8-K: Jackson Financial Inc. Reports Strong Second Quarter 2024 Results Driven by Record RILA Sales

Jackson Financial Inc. announced strong second quarter 2024 results, highlighted by a 9% increase in total annuity assets under management and record sales of registered index-linked annuities (RILA).

Summary

• Jackson Financial Inc. reported a net income of $264 million, or $3.43 per diluted share, for the second quarter of 2024, compared to $1.2 billion, or $14.21 per diluted share, in the same period last year.
• Adjusted operating earnings were $410 million, or $5.32 per diluted share, up from $283 million, or $3.34 per diluted share, in the second quarter of 2023.
• The company's total annuity assets under management increased by 9% year-over-year, reaching $247 billion as of June 30, 2024.
• Record RILA sales of $1.4 billion were achieved in the second quarter of 2024, a 163% increase compared to the same period in 2023.
• Jackson returned $144 million to shareholders through share repurchases and dividends in the second quarter.
• The company's operating company, Jackson National Life Insurance Company (JNLIC), has a robust capital position with total adjusted capital of $4.7 billion and an estimated risk-based capital (RBC) ratio of 550-570% as of June 30, 2024.
• Cash and highly liquid securities at the holding company exceeded $500 million as of June 30, 2024.

Sentiment

Score: 8

Explanation: The document presents a generally positive outlook with strong growth in key areas like RILA sales and adjusted operating earnings. While net income was down, the underlying business performance and capital position are robust, suggesting a positive trajectory for the company.

Positives

• The company experienced a significant increase in adjusted operating earnings, driven by higher spread income and growth in variable annuity assets under management.
• Retail annuity sales increased by 36% year-over-year, driven by record RILA sales.
• The company maintains a strong capital position at the operating company level.
• Jackson has a healthy cash position at the holding company, exceeding its targeted minimum liquidity buffer.
• The company is actively returning capital to shareholders through share repurchases and dividends.
• The increase in adjusted book value was driven by adjusted operating earnings and non-operating, net hedging gains.

Negatives

• Net income attributable to Jackson Financial Inc. common shareholders decreased significantly compared to the same quarter last year, primarily due to unfavorable net hedging results.
• Net flows for Institutional Products were negative at $(619) million for the quarter.
• Fixed and fixed indexed annuity sales decreased to $85 million from $115 million in the second quarter of 2023.
• Corporate and Other segment reported a pretax adjusted operating loss of $(56) million, compared to a loss of $(47) million in the second quarter of 2023.

Risks

• The company's forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those projected.
• The results of reinsured business can differ significantly quarter to quarter, although these results do not impact statutory capital or free cash flow.
• The company's non-GAAP financial measures may not be comparable to similarly titled measures presented by other entities.
• Market volatility and changes in interest rates can impact the company's financial results.

Future Outlook

Jackson anticipates building on its current momentum through the remainder of 2024 and continuing to deliver on its mission of helping Americans achieve financial freedom for life.

Management Comments

• Laura Prieskorn, President and Chief Executive Officer of Jackson, stated, 'Jacksons second quarter results highlight our distribution strength and consistent capital generation.'
• Laura Prieskorn also noted, 'Our retail annuity sales were up 36% from the second quarter of 2023 driven by record RILA sales that further diversify our product mix.'
• She added, 'We are well-positioned relative to our financial targets, as we maintained more than $1 billion in excess capital above our targeted minimum RBC ratio of 425%, returned $144 million to common shareholders during the second quarter, and increased our excess cash at the holding company.'

Industry Context

The strong performance in RILA sales reflects a broader trend in the insurance industry towards offering more diverse and innovative annuity products to meet evolving customer needs. The increase in annuity assets under management also indicates a positive market environment for retirement savings products.

Comparison to Industry Standards

• Jackson's 9% increase in annuity assets under management is a strong result compared to industry averages, which have seen moderate growth in the current economic environment.
• The record RILA sales of $1.4 billion demonstrate Jackson's ability to capture market share in the growing index-linked annuity segment, outperforming many competitors.
• The company's RBC ratio of 550-570% is well above the regulatory minimum and indicates a strong capital position, which is a key benchmark for insurance companies.
• While net income was down compared to the previous year, the adjusted operating earnings growth suggests that the underlying business is performing well, which is a more relevant metric for long-term performance.

Stakeholder Impact

• Shareholders will benefit from the increased share repurchase authorization and dividend payments.
• Customers will benefit from the company's continued focus on providing diverse and innovative annuity products.
• Employees will benefit from the company's strong financial performance and growth prospects.
• Distribution partners will benefit from the company's strong sales performance and product offerings.

Next Steps

• Jackson will host a conference call on August 8, 2024, to review the second quarter results.
• The company anticipates building on its current momentum through the remainder of 2024.

Key Dates

Keywords

annuities, RILA, financial results, earnings, capital, share repurchase, dividends, insurance, Jackson Financial, operating earnings