Jackson Financial’s Earnings Call Highlights Strong Growth

Jackson Financial Incorporation Class A ((JXN)) has held its Q3 earnings call. Read on for the main highlights of the call.

Jackson Financial Inc. recently held its earnings call, revealing a strong financial performance marked by significant sales growth, capital generation, and shareholder returns. Despite facing challenges with variable annuity net outflows and hedging losses, the overall sentiment was positive, as the highlights significantly outweighed the lowlights.

Strong Sales Growth and Diversification

Jackson Financial reported adjusted operating earnings of $433 million, reflecting a more than 20% increase from the previous year. This growth was primarily driven by Retail Annuities, with sales exceeding $5 billion for the quarter. Both RILA and traditional variable annuities played a significant role in this achievement.

Record RILA Sales

The company achieved record RILA sales of $2 billion, which accounted for 38% of the overall retail annuity sales. The RILA account balance saw a substantial increase of 21% from the second quarter and an impressive 74% from the previous year.

Robust Capital Generation and Return

Jackson Financial’s free capital generation surpassed $1 billion, with free cash flow reaching $719 million for the first three quarters. The capital return to shareholders totaled $657 million year-to-date, with expectations to exceed the 2025 capital return target range.

Strong Capital Position

The company maintained a robust capital position, with a risk-based capital ratio estimated at 579%, significantly above the minimum target of 425%.

Increased Book Value Per Share

Driven by share repurchase activity, Jackson Financial’s adjusted book value per share increased by 6% to $158.44.

Positive Institutional Segment Growth

The Institutional segment experienced growth, with increased pretax adjusted operating earnings attributed to higher spread income.

Elevated Variable Annuity Net Outflows

Challenges were noted with elevated variable annuity net outflows, influenced by the moneyness profile of the book, aging policyholders, and higher surrender rates due to strong equity market performance.

Closed Block Segment Challenges

The Closed Block segment faced modest earnings declines on a sequential basis, primarily due to higher mortality levels.

Slight Loss on Hedge Results

A net loss of $14 million was reported on hedging instruments, mainly due to equity hedges and lower long-term interest rates.

Forward-Looking Guidance

Looking ahead, Jackson Financial anticipates continued strong fiscal performance. The company reported a 20% increase in adjusted operating earnings and a significant rise in RILA sales. Free capital generation exceeded $1 billion, and the risk-based capital ratio remains robust at 579%. The ongoing capital return efforts have resulted in nearly $2.5 billion returned to shareholders since the company’s independence, surpassing initial market expectations.

In summary, Jackson Financial Inc.’s earnings call highlighted a positive outlook with strong financial results and strategic growth in key areas. Despite some challenges, the company’s robust sales, capital generation, and shareholder returns underscore its solid market position and future potential.