Jackson Financial Incorporation Class A ((JXN)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Jackson Financial Incorporation Class A recently held its earnings call, revealing a mixed sentiment. The company showcased strong financial performance with notable growth in earnings and annuity sales, underpinned by a robust capital position. However, these positives were somewhat overshadowed by a net loss influenced by reinsurance and hedging activities, alongside increased expenses and challenges posed by market volatility.
Strong Earnings Growth
Jackson Financial reported adjusted operating earnings of $376 million, marking a 13% increase over the previous year. This growth translated into a 25% rise in earnings per share compared to the first quarter of the prior year, highlighting the company’s strong financial trajectory.
Robust Annuity Sales
The first quarter saw retail annuity sales surpassing $4 billion, reflecting a growth of over 9% from the previous year. Notably, sales of variable annuities rose by 9% to $2.7 billion, indicating a strong demand in this segment.
Capital Strength
Jackson’s RBC ratio climbed to 585%, significantly above the minimum requirement. The company returned over $230 million to common shareholders while maintaining more than $600 million in liquid assets, underscoring its solid capital foundation.
Growing Advisory Channel
The advisory sales channel experienced a 28% increase over the first quarter of 2024, achieving an annual run rate exceeding $1 billion, demonstrating the company’s expanding influence in this area.
Innovative Product Features
The introduction of the Principal Guard feature for Elite Access spurred increased demand for investment-only variable annuities, showcasing Jackson’s commitment to innovation and product development.
Net Loss Impact
Despite the positive earnings, the company reported a net loss this quarter, primarily due to the impact of third-party reinsurance and modest net hedging results.
Hedging and Market Volatility
Hedging activities resulted in a net loss of $134 million, and the Brooke Re entity experienced a modest decline in equity, attributed to market volatility in April.
Higher Expenses
The Retail Annuities segment faced increased general and administrative expenses, driven by seasonality and compensation expenses, impacting the overall financial performance.
Forward-Looking Guidance
Looking ahead, Jackson Financial provided optimistic guidance for 2025, emphasizing their strategic objectives. The company aims to build on its strong performance, with adjusted operating earnings reaching $376 million in the first quarter, a 13% increase from the previous year. Retail annuity sales exceeded $4 billion, and the RILA product suite contributed $1.2 billion in sales. The company maintains a robust capital position with an estimated 585% RBC and plans to continue returning value to shareholders, with a second-quarter cash dividend of $0.80 per share approved by the Board.
In summary, Jackson Financial’s earnings call painted a picture of strong growth and strategic advancements, despite facing challenges from reinsurance impacts and market volatility. The company’s robust capital position and innovative product offerings position it well for future growth, as reflected in its optimistic guidance for 2025.