Slide 1: Fourth Quarter and Full Year 2023 Financial Results
Jackson Financial Inc. Fourth Quarter and Full Year 2023 Financial Results February 22, 2024
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures The information in this document contains forward-looking statements about future events and circumstances and their effects upon revenues, expenses and business opportunities. Generally speaking, any statement in this document not based upon historic
Slide 3: Cumulative Capital Return to Common Shareholders
Cumulative Capital Return to Common Shareholders JFI has repurchased to date 19.9 million shares, which equates to over 21% of outstanding common shares at separation February 28, 2023 $1.2B+ JFI updates capital return target to $450-$550m for calendar year 2023 JFI announces increased share repurch
Slide 4: Delivered on All 2023 Financial Targets
Delivered on All 2023 Financial Targets 425-500% Risk-based Capital Estimated RBC ratio of 624% at year end 2023, up from 3Q23 and above (RBC) ratio under normal target range for normal market conditions market conditions Holding company cash and highly liquid securities of approximately Approximate
Slide 5: Successful Year of Execution
Successful Year of Execution Full Year 2023 Highlights Earnings Results • Net income attributable to Jackson Financial Inc. common shareholders of nearly $900 million or $10.76 per common share (diluted) • Adjusted Operating Earnings1 of $1.1 billion • Adjusted Operating Earnings per common share (d
Slide 6: Continue to Execute on Annual Targets & Focus on Shareholder Value Creation
Continue to Execute on Annual Targets & Focus on Shareholder Value Creation ― Continued progress toward our strategic and operational goals ― Maintained strong balance sheet and robust levels of liquidity ― Met or exceeded all key financial targets for the third consecutive year ― Well-positioned fo
Slide 7: Operating Earnings Drove Book Value Growth in 2023
Operating Earnings Drove Book Value Growth in 2023 Adjusted Operating Earnings1 Key Takeaways ($ millions) Adjusted Operating Earnings 294 283 315 • Adjusted Operating Earnings for 4Q23 of $204 million compared to $294 million for 271 4Q22, as growth in fee income, along with a lower effective tax r
Slide 8: Notable Items - Fourth Quarter 2023
Notable Items Fourth Quarter 2023 4Q22 4Q23 ($ millions, except per share amounts) Pretax After-tax1 EPS-Diluted Pretax After-tax1,2 EPS-Diluted Adjusted Operating Earnings3 320 294 3.39 203 204 2.53 Notable Items Included in Adjusted Operating Earnings Out performance/(Under performance) from Limit
Slide 9: Notable Items - Full Year 2023
Notable Items Full Year 2023 FY22 FY23 ($ millions, except per share amounts) Pretax After-tax1 EPS-Diluted Pretax After-tax1,2 EPS-Diluted Adjusted Operating Earnings3 1,643 1,454 16.39 1,165 1,073 12.84 Notable Items Included in Adjusted Operating Earnings Out performance/(Under performance) from
Slide 10: 4Q23 Non-Operating Earnings
4Q23 Non-Operating Earnings 4Q23 Pretax Adjusted Operating Earnings Reconciliation Highlights ($ millions) Net Hedge Loss1: $990 million • 4Q23 net hedge loss of $990 million, primarily due to lower interest 43 rates generating a significant loss in market risk benefits 780 • Our hedging program his
Slide 11: Segment Results – Retail Annuities
Segment Results – Retail Annuities1 Continued Retail Sales Diversification Recent Trends ($ billions) • 4Q23 total annuity sales up from 4Q22 with an increasingly 3.2 3.1 3.3 3.3 diversified product mix 3.1 • More than half of annuity sales now without lifetime benefit riders 4Q22 1Q23 2Q23 3Q23 4Q2
Slide 12: Segment Results – Retail Annuities
Segment Results – Retail Annuities Variable Annuity Account Value RILA Account Value FA / FIA Account Value ($ billions) ($ billions) ($ billions) 5.2 1.8 1.6 228 206 1.9 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23 Separate Account General Account • Pretax adjusted operating earnings for 4Q23 of $326 million broa
Slide 13: Segment Results – Institutional & Closed Blocks
Segment Results – Institutional & Closed Blocks Institutional Account Value Institutional Highlights ($ billions) • Pretax adjusted operating earnings1 of $22 million in 4Q23 up from $17 million in the year-ago quarter 1.1 9.0 0.3 8.4 • Institutional sales of $1.1 billion during 2023 reflects our (2
Slide 14: Strong Year-End 2023 Capital Position
Strong Year-End 2023 Capital Position Returned $464 million to common shareholders in 2023 through $255 million of share repurchases and $209 million in dividends • Returned $117 million to common shareholders in 4Q23 through $67 million of share repurchases and $50 million in dividends • $301 milli
Slide 15: Brooke Life Reinsurance Company (Brooke Re) A Captive Solution
Brooke Life Reinsurance Company (Brooke Re) A Captive Solution
Slide 16: Cash Surrender Value Floor Introduced Non-Economic Volatility
Cash Surrender Value Floor Introduced Non-Economic Volatility to Variable Annuity Business Statutory Reserve Approach for VA CSV Illustration • Present Value (PV) of cash flows approach evaluating Non-Economic Statutory Requirement 10,000 economic scenarios focused on the tail Statutory Profile • On
Slide 17: Seeking a Long-Term Solution That Aligns Liability Treatment With Economics
Seeking a Long-Term Solution That Aligns Liability Treatment With the Economics of Our Business CHALLENGE CONSEQUENCES • Strong PV of VA cash flows resulted in a large, persistent cash surrender value floor impact Statutory Liability Not Aligned With Economics • Lack of offsetting reserve movements
Slide 18: Established a Self-Sustaining Variable Annuity Captive
Established a Self-Sustaining Variable Annuity Captive Captive Structure Jackson Financial Inc. (JFI) • Formed Brooke Re, a Michigan based captive reinsurer 100% owned by Brooke Life Insurance Company (BLIC) Brooke Life Insurance Company • Certain inforce and future VA guaranteed benefits transferre
Slide 19: Reserve Methodology at Brooke Re Aligns with the Economics of the Business
Reserve Methodology at Brooke Re Aligns with the Economics of the Business Benefits of Modified GAAP Market Risk Benefits (MRB) Methodology • No cash surrender value floor, allowing reserve to increase or decrease in response to changes in markets • Includes only the guarantee cash flows creating a
Slide 20: Capital Framework at Brooke Re Designed to Be Highly Resilient
Capital Framework at Brooke Re Designed to Be Highly Resilient Brooke Re Minimum Operating Capital Methodology • Built using statutory required risk capital charges with the exception of market/interest rate risk • Statutory market/interest rate risk calculation would be impacted by the CSV floor •
Slide 21: Improved Hedging Outcomes Following Transaction
Improved Hedging Outcomes Following Transaction • Strong opening balance sheet position at Brooke Re, funded by capital from JNL • More predictable hedge target aligned with economics, requiring less rebalancing activity • Reduced level of equity hedging costs, due to diminished need for non-economi
Slide 22: Brooke Re Is a Durable, Long-Term Solution to the Cash Surrender Value Floor
Brooke Re Is a Durable, Long-Term Solution to the Cash Surrender Value Floor Align reserves and hedging ✓ Modified GAAP reserve not limited by cash surrender value floor instruments in a more consistent, ✓ Hedges and reserves consistently and fully responsive to market and rate movements economic ma
Slide 23: Jackson National Life Stronger & More Predictable Capital Creation
Jackson National Life Stronger & More Predictable Capital Creation
Slide 24: Jackson National Life Post Transaction
Jackson National Life Post Transaction • Capital generation focused on more predictable VA fee income separated from guarantees • Diversification from spread and mortality-based business with opportunity to grow • Robust initial capital position with a high level of excess over targeted RBC ratio •
Slide 25: Jackson National Life Capital Generation Driven Primarily By Fee Business
Jackson National Life Capital Generation Driven Primarily By Fee Business Inforce Reserves By Type1 Economics of Business Life 6% • Capital generation more aligned with adjusted operating earnings • Fee business driven by VA base contract cash flows • Asset management economics reflecting significan
Slide 26: Robust JNL Capital Position Following Transaction
Robust JNL Capital Position Following Transaction Strong Estimated Year-End RBC Ratio Transaction Impacts • RBC ratio was up from 3Q 2023 to 624% • Captive established in January with an effective date of 1/1/24 • Continued strong underlying business results • JNL total adjusted capital (TAC) reduce
Slide 27: Increased Transparency Into Economics of Business
Increased Transparency Into Economics of Business Jackson Financial Inc. Jackson National Life Brooke Re Description Holding Company Regulated Insurance Company Regulated Captive Reinsurer Target 2x Annual Holding Target RBC Ratio Minimum Operating Capital Capital Framework Company Fixed Expenses Re
Slide 28: 2024 Key Financial Targets
2024 Key Financial Targets @ JACKSON’
Slide 29: 2024 Financial Targets
2024 Financial Targets $550-$650 million capital return to common Supported by periodic distributions from JNL to JFI throughout the year shareholders Approximately two years of Holding company fixed net expenses, including interest expense, at holding company fixed expenses approximately $250 milli
Slide 30: Investments
Investments @ JACKSON’
Slide 31: High Quality, Diversified Investment Portfolio
High Quality, Diversified Investment Portfolio ― Conservative underwriting is a consistent theme throughout ― Highly rated and diversified commercial mortgage loan office portfolio, which is less than 2% of the general account portfolio ― Corporate portfolio is concentrated in investment-grade secur
Slide 32: U.S. GAAP – Investment Portfolio
U.S. GAAP – Investment Portfolio December 31, 2023 Investment Portfolio Classification1 Key Highlights Other invested assets <1% • Market/book ratio of the fixed maturity portfolio is 0.93 Limited Partnerships 3% U.S government securities 10% Derivatives <1% Policy loans 2% Other government securiti
Slide 33: Statutory – Investment Portfolio
Statutory – Investment Portfolio December 31, 2023 Investment Portfolio Classification1 Key Highlights • Market/book ratio of the fixed maturity portfolio is 0.93 Other invested assets <1% Limited Partnerships 3% U.S government securities 10% Policy loans 2% Derivatives <1% Other government • Exposu
Slide 34: Statutory – Fixed Maturity Rating Distribution
Statutory – Fixed Maturity Rating Distribution December 31, 2023 US Treasuries NAIC 1A-1D (AAA-AA-) 14% NAIC 5/6 17% <0.1% NAIC 4A-4C (B) <1% NAIC 3A-3C (BB) 1% $30b NAIC 1E-1G (A) 33% NAIC 2A-2C (BBB) 34% 34 Notes: Excludes Funds Withheld. Statutory statement value based on NAIC ratings. Includes B
Slide 35: Statutory – Corporate Portfolio
Statutory – Corporate Portfolio December 31, 2023 Corporate Portfolio Rating Distribution1 Key Highlights CCC and below: <0.1% • Market/book ratio of the corporate portfolio is 0.95 B: <1% AAA: 1% BB: 2% AA: 6% • High yield corporates account for 1% of invested assets and 2% of total corporate portf
Slide 36: Statutory – ABS Portfolio
Statutory – ABS Portfolio December 31, 2023 ABS Sector Distribution1, 2 NAIC Rating Distribution1 Service Advance 1% Aircraft 1% Single Family Rental 2% Other, 3% Music Royalties 2% Equipment Leases 2% NAIC 4 <0.1% Whole Business NAIC 1A-1D (AAA-AA-) Securitizations 3% NAIC 3 (BB) 61% <0.1% PDP Well
Slide 37: Statutory – Collateralized Loan Obligations (CLO) Debt
Statutory – Collateralized Loan Obligations (CLO) Debt December 31, 2023 CLO NAIC Distribution1 Key Highlights B • CLO exposure highly rated with virtually all rated single A <0.1% AAA or above 60% BBB <1% • Exposure is diversified among 39 different managers and 61 CLOs • Each CLO is diversified, a
Slide 38: Statutory – Commercial Mortgage Loan Portfolio
Statutory – Commercial Mortgage Loan Portfolio1 December 31, 2023 CML NAIC Distribution2 CML Property Type Distribution2 Multi-Family CM 1 28% 69% CM 3/4 Other 3% 4% Retail $7.1b Hotels $7.1b 23% 10% CM 2 Office 28% 10% Industrial Loan-to-Value / Debt Service Coverage3 25% Debt Service Coverage Rati
Slide 39: Statutory – Commercial Mortgage Loan Office Exposure
Statutory – Commercial Mortgage Loan Office Exposure1 December 31, 2023 NAIC Rating Distribution – Office Exposure2 Key Highlights CM 1 • Highly diversified with an average loan size of $14m 86% • 100% are senior/first mortgage loans CM 2 14% $0.7b • 100% of the portfolio has the highest two ratings
Slide 40: Appendix
Appendix @ JACKSON’
Slide 41: VA Market Risk Benefits
VA Market Risk Benefits Liability Effect Category Runs Through: Description of Impact Drivers Changes in Interest Rates Net Income Movement in risk free rates (impacts both assumed future separate account returns and discounting of cash flows) Fund Performance Net Income Separate account returns gro
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to presenting our results of operations and financial condition in accordance with U.S. GAAP, we use and report, selected non-GAAP financial measures. Management believes that the use of these non-GAAP financial measures, together with relevant U.S. GAAP finan
Slide 43: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Book Value Attributable to Common Shareholders Adjusted Book Value Attributable to Common Shareholders excludes Preferred Stock and Accumulated Other Comprehensive Income (Loss) ("AOCI") attributable to Jackson Financial Inc ("JFI"), which does not include AOCI a
Slide 44: Adjusted Operating Earnings Reconciliation
Adjusted Operating Earnings Reconciliation For the Twelve $ millions, except effective tax rate For the Three Months Ended Months Ended 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 12/31/22 12/31/23 Net income (loss) attributable to Jackson Financial Inc. common shareholders (1,150) (1,497) 1,204 2,762
Slide 45: Select U.S. GAAP to Non-GAAP Reconciliation
Select U.S. GAAP to Non-GAAP Reconciliation For the Twelve $ millions, except per share and shares outstanding data For the Three Months Ended Months Ended 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 12/31/22 12/31/23 Net Income (Loss) (1,158) (1,496) 1,220 2,790 (1,560) 6,229 954 Income attributable
Slide 46: Glossary
Glossary Assets Under Management (AUM) - Investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by PPM America, Inc. (“PPM”), including our investment portfolio (but excludes assets held in funds withheld accounts for reinsurance transactions), (ii) third-part
Slide 47: Glossary
Glossary Net Flows - The net change in customer account balances during a period, including gross premiums, surrenders, withdrawals and benefits. Net flows exclude investment performance, interest credited to customer accounts and policy charges. Registered Index-Linked Annuity (RILA) - A registered