Jackson Financial climbs RILA sales charts with another strong quarter

As a longtime leader in the variable annuity space, it seemed inevitable that Jackson Financial would master the registered indexed-linked annuity.

Despite a late entry in the red-hot RILA space, Jackson is hitting its stride with its Market Link Pro. The insurer backed up $1.4 billion in Q2 RILA sales with another $1.6 billion in the third quarter, up 99% from the year-ago quarter.

Total retail annuity sales exceeded $5 billion for the third quarter, said CEO Laura Prieskorn, up 59% from the year-ago quarter, and up 25% from the second quarter 2024. Q3 was the “highest and most diversified quarter of sales” since Jackson became an independent company in September 2021.

Prieskorn spoke Thursday during a conference call with Wall Street analysts.

“Jackson Market Link Pro continues to grow as a RILA product of choice, and after three years of offering this product, we are a top five RILA provider according to LIMRA second quarter 2024 sales numbers,” Prieskorn noted.

Over the past six months, Jackson launched a RILA product for New York, and introduced a living benefits option to Market Link Pro. The option allows for either an immediate income stream or deferred withdrawals for potentially increased income over time.

“We continue to expand our distribution network, announcing earlier this week that Jackson Market Link Pro II is now available to approximately 5,000 financial professionals with JP Morgan Wealth Management,” Prieskorn said.

Jackson dominated traditional VA sales for many years and remains a big player in that market. Variable annuity sales of $2.6 billion in the quarter rose 8% from the third quarter of 2023.

In October, Jackson launched Principal Guard, an add-on guaranteed minimum accumulation benefit available for an extra charge in its Elite Access suite of variable annuities.

“This benefit provides policyholders the option to add valuable principal protection while maintaining investment flexibility,” Prieskorn said. “Our user-friendly digital capabilities also allow advisors and their clients to analyze how our principal guard benefits meet the client needs under a range of individual team scenarios.”

Additional highlights

Jackson booked $515 million in losses from business reinsured to third parties, noted Don Cummings, chief financial officer.

“Non-operating items related to this reinsurance treaty can be volatile from period to period and have a minimal net impact on our adjusted book value,” he explained. “Furthermore, these items do not impact Jackson statutory capital generation or free cash flow.”

In June 2020, Jackson reinsured $27.6 billion of its fixed annuity and fixed index annuity reserves with Athene. In December 2023, Jackson announced the creation of Brooke Re, a reinsurance company in Michigan, to increase alignment between assets and liabilities.

Brooke Re is reducing income volatility for Jackson, Cummings told analysts. Jackson seeded Brooke Re with $700 million of cash and investments.

Still, analysts peppered Cummings with questions about the capital behind Brooke Re.

“We set it up intentionally to be sort of self-sustaining, and so we do feel like we have a pretty strong buffer there, well above the minimum operating capital that's required for a regulatory basis,” Cummings said. “We also have internal risk levels that we monitor quite regularly, and we feel good about that, and really feel like we're in a strong position in terms of Brooke Re. It would take a very, very significant market event to cause a capital issue.”

Management commentary

“Jackson continues to meet the demands of a dynamic market, delivering flexible protection and income-oriented solutions to Americans planning for retirement.”

CEO Laura Prieskorn

Financial overview

Net Income: -$480 million ($2.8 billion in Q3 2023)

Adjusted operating earnings: $350 million ($315 million in Q3 2023)

Earnings Per Share: $4.60 per share ($3.80 in Q3 2023)

Share repurchases: $113 million

Dividend declared: $54 million

Stock price movement: Down about 1% to $112.67 at midday Thursday

Segment performance

Retail Annuities:

- Operating Earnings: $458 million ($358 million in Q3 2023)

- Retail Sales: $5.3 billion ($3.3 billion in Q3 2023)

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.