Companies

Jackson Financial reverses slide with big bounceback quarter

By Doug Bailey

In a bounceback, Jackson Financial Inc., a seller of retail annuities and institutional fixed income products, reported first-quarter earnings for 2024 of $784 million, or $9.94 per share, a significant leap from the $1.5 billion loss (-$18.11 per share) reported in the same quarter of 2023.

The adjusted operating earnings of $334 million in the first quarter, up from $271 million in the corresponding period last year, underscores the efficacy of Jackson’s strategic initiatives and operational efficiency measures, company executives said.

A key factor contributing to the company's strengthened financial position is the successful establishment of Brooke Reinsurance Company, Jackson Financial's indirect wholly owned Michigan captive. This move for the first time bolstered the company's capital reserves and has had a cascading effect across its subsidiaries, particularly at Jackson National Life Insurance Company, according to the company.

The benefits include more stable capital generation, reduced volatility in net hedging results, greater stability of U.S. GAAP net income, and improved alignment of adjusted operating earnings with regulatory capital generation.

“The hard work and execution that led to the formation of Brook Re positions Jackson for long-term capital strength and a continued focus on delivering on our commitments to all stakeholders,” Jackson President and CEO Laura Prieskorn, told investors in prepared statements in a Thursday morning conference call. “We are off to a strong start in 2024, and our first quarter results reflect the expected outcomes of Brook Re.”

Annuity surge

Retail annuity sales surged nearly 20% from the first quarter of 2023. This growth trajectory was primarily driven by record registered index-linked annuity (RILA) quarterly sales, which reached $1.2 billion in the first quarter of 2024, up from $533 million in the prior year quarter. Overall annuity sales also witnessed a robust uptick, totaling $3.7 billion in the first quarter of 2024, an 18% increase from the same period in 2023.

The company's total annuity account value soared to $248 billion as of March 31, reflecting a whopping 13% increase from $219 billion in the first quarter of 2023. This substantial growth was attributed largely to the buoyant performance of equity markets in the preceding 12-month period.

Jackson’s estimated risk-based capital ratio at Jackson National stood at 555-575%, surpassing the 2024 financial target RBC ratio of a minimum of 425%. This healthy regulatory capital position is further supported by a substantial cash and highly liquid securities reserve of nearly $500 million at the holding company level, exceeding the company’s targeted minimum liquidity buffer.

“We believe our robust capital position across operating companies provides a favorable financial foundation for future operating company dividends,” said Chief Financial Officer Marcia Wadsten. “I am very pleased with these results, which demonstrate strength in sales, earnings, capital, and holding company liquidity.”

Stock shares move up

The company said it has demonstrated its commitment to rewarding shareholders by returning $172 million to common shareholders in the first quarter of 2024 through a combination of common share repurchases totaling $116 million and common dividends amounting to $56 million. The declaration of cash dividends of $0.70 per share of common stock and $0.50 per depositary share for the second quarter of 2024 reaffirms the company's confidence in its long-term capital generation prospects.

Jackson Financial stock, which has more than doubled over the last year, ticked up more than 5% in trading following the earnings call Thursday, to $77.12 per share.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

Correction: An earlier version of this article incorrectly stated the name of Jackson Financial's CFO. Her name is Marcia Wadsten.