Slide 1: Fourth Quarter and Full Year 2021 Financial Results
Jackson Financial Inc. Fourth Quarter and Full Year 2021 Financial Results March 3, 2022
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures This document may contain certain statements, other than those relating to historical facts, that constitute “forward-looking statements.” Forward-looking statements can generally be identified by their use of terms such as “anticipate,” “estimate,” “
Slide 3: Strong Full Year 2021
Record Operating Results • Net Income attributable to JFI of $3.2 billion for FY21 • Adjusted Operating Earnings1 of $2.4 billion for FY21 • Record fee-based advisory sales of $1.3 billion for FY21 Solid Capital Generation • Statutory Total Adjusted Capital of $6.6 billion at YE21 • 2021 year-end JN
Slide 4: Key Financial Targets at Demerger
Key Financial Targets at Demerger 4 500-525% adjusted RBC ratio1 $250 million minimum cash at the holding company 20-25% total financial leverage2 Jackson National Life Insurance Company year-end RBC ratio of 580% with an adjusted RBC ratio of 611% Holding company cash position over $600 million at
Slide 5: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights 5 • Quarterly earnings up from prior year quarter • Results driven by growing fee-based AUM Strong Quarterly Earnings • Operating entities capitalized above target range • Maintained excess holding company cash while paying a dividend and making a significant repu
Slide 6: Adjusted Operating Earnings and Adjusted Book Value
6,821 8,814 8,632 8,694 8,937 4Q20 1Q21 2Q21 3Q21 4Q21 645 568 636 487 707 4Q20 1Q21 2Q21 3Q21 4Q21 6 Adjusted Operating Earnings1 ($ millions) Adjusted Book Value1 ($ millions) Adjusted Operating Earnings of $707 million; Adjusted Operating EPS (diluted) of $7.48 • Adjusted operating earnings were
Slide 7: Notable Items – 4Q21
Notable Items – 4Q21 7 4Q20 4Q21 ($ millions, except per share amounts) Pretax After-tax1 EPS - Diluted Pretax After-tax1 EPS - Diluted (Loss)/Income Attributable to Jackson Financial Inc. (197) 76 0.80 672 585 6.19 Non-Operating Losses 741 569 6.02 145 122 1.29 Adjusted Operating Earnings2 544 645
Slide 8: Notable Items – FY21
Notable Items – FY21 8 FY20 FY21 ($ millions, except per share amounts) Pretax After-tax1 EPS - Diluted Pretax After-tax1 EPS - Diluted (Loss)/Income Attributable to Jackson Financial Inc. (2,488) (1,634) (24.15) 3,785 3,183 33.69 Non-Operating Losses 4,462 3,514 51.94 (1,004) (785) (8.31) Adjusted
Slide 9: Non-Operating Items
Non-Operating Items 9 • 4Q21 net hedge loss1 of $381 million • Accounting mismatch on equity market impact as equity derivatives are marked-to-market while non- economic reserves are only partially fair valued • Mismatch from interest rate movements: ― SOP-03-1 not sensitive to interest rates ― FAS
Slide 10: Segment Results – Retail Annuities
4.9 4.7 4.9 4.8 5.0 4Q20 1Q21 2Q21 3Q21 4Q21 Segment Results – Retail Annuities • Variable annuity sales were flat when compared to the year-ago quarter reflecting: ― 45% increase in Elite Access (Investment-Only VA) ― 23% increase in other variable annuities without lifetime benefit guarantees ― 13
Slide 11: Segment Results – Retail Annuities
1.3 1.4 4Q20 4Q21 229 258 4Q20 4Q21 601 750 4Q20 4Q21 Segment Results – Retail Annuities • Pretax adjusted operating earnings up 25% compared to the year-ago quarter. The current quarter benefited from improved fee income attributable to higher average variable annuity account values as well as the
Slide 12: Segment Results – Institutional & Closed Blocks
36% 38% 20% 6% Segment Results – Institutional & Closed Blocks • Pretax adjusted operating earnings1 in the Institutional segment were $27 million for the 4Q21, compared to $12 million in the year-ago quarter attributable to spread compression in the prior year period • Jackson re-engaged in the mar
Slide 13: Capital Management
Capital Management 13 • Announced quarterly dividend and share repurchase program1 in November reflecting our resilient, cash generative business model ― Share repurchases of $211 million and dividends of $50 million in the 4Q21 • Holding company cash was over $600 million at year end, which provide
Slide 14: Summary
― Successful Execution of the Demerger ― Strong Balance Sheet ― Delivered Solid 2021 Results ― Continue to Broaden Distribution Capabilities ― Product Expansion with RILA Launch ― Well Positioned for the Future Summary 14
Slide 15: 2022 Key Financial Targets
2022 Key Financial Targets 15 Adjusted RBC ratio1 range Holding company liquidity Financial leverage2 range Intend to manage our target adjusted RBC ratio to a range of 500% to 525% under normal market conditions Maintaining cash and cash equivalents in excess of $250 million for ongoing holding com
Slide 16: Appendix
Appendix
Slide 17: DAC / Mean Reversion Overview
DAC / Mean Reversion Overview 17 .. For annuity products, the key driver that determines DAC amortization is historical and projected spread or fee income. For fixed annuities, this is typically stable through time, with account balances growing steadily by a modestly varying growth rate. .. However
Slide 18: DAC acceleration/(deceleration) estimation
. DAC acceleration/(deceleration) is determined by separate account returns as detailed in the prior slide, and has a drop-off of the 3-year return component, and a current period return component .. Estimating the impact from the drop-off of the return 3 years ago is simple, as it remains steady th
Slide 19: Drivers of GAAP Guaranteed Benefits and Hedging Results
Drivers of GAAP Guaranteed Benefits and Hedging Results 19 Macroeconomic Factor Impact to Total Guaranteed Benefit Reserves and Hedging Results Reason Equity Markets Up Negative Hedges fully mark to fair value, while not all liabilities are fully fair valued (SOP 03-1). This is true under current GA
Slide 20: 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 21: Non-GAAP Financial Measures Adjusted Operating Earnings (Continued)
Non-GAAP Financial Measures Adjusted Operating Earnings (Continued) Adjusted Operating Earnings equals our net income adjusted to eliminate the impact of the items listed on the previous slide plus the following items: DAC and DSI impact: amortization of deferred acquisition costs and deferred sales
Slide 22: Non-GAAP Financial Measures Financial Leverage Ratio
Non-GAAP Financial Measures Financial Leverage Ratio We use the Financial Leverage Ratio to manage our financial flexibility and ensure that we maintain our financial strength ratings. Total financial leverage is the ratio of total debt to the Total Adjusted Capitalization (combined total debt and A
Slide 23: Adjusted Operating Earnings Reconciliation
Adjusted Operating Earnings Reconciliation 23 $ millions For the Three Months Ended For the Twelve Months Ended 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 12/31/20 12/31/21 Adjusted Operating Earnings Net income (loss) attributable to Jackson Financial Inc. 76 2,932 (540) 206 585 (1,634) 3,183 Income
Slide 24: Select GAAP to Non-GAAP Reconciliation
Select GAAP to Non-GAAP Reconciliation 24 $ millions, except per share and shares outstanding data For the Three Months Ended For the Twelve Months Ended 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 12/31/20 12/31/21 Net Income (Loss) 110 3,000 (484) 268 661 (1,637) 3,445 Income attributable to non-
Slide 25: Glossary
Glossary Assets Under Management (AUM) - General account investments and separate account assets. Deferred Acquisition Cost (DAC) - Represent the incremental costs related directly to the successful acquisition of new and certain renewal insurance policies and annuity contracts and which have been d
Slide 26: Glossary
Glossary Risk Based Capital (RBC) - Rules to determine insurance company statutory capital requirements. It is based on rules published by the National Association of Insurance Commissioners (NAIC). Return of Premium (ROP) Death Benefit - This death benefit pays the greater of the account value at t