Jackson Financial Inc. · NYSE:JXN
Jackson Financial — Q2 2024 Earnings Presentation
31 slides from Jackson Financial's earnings presentation, Aug 7, 2024
Slide 1: Second Quarter 2024 Financial Results
August 8, 2024 Jackson Financial Inc. Second Quarter 2024 Financial Results
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 upo n revenues, expenses and business opportunities. Generally speaking, any statement in this document not based upon h
Slide 3: 2Q 2024 Financial Results Key Highlights
2Q 2024 Financial Results Key Highlights $264M GAAP earnings $410M Non - GAAP earnings 1 $3.43 GAAP Earnings per share $5.32 Non - GAAP earnings per share 1 $144M Capital return $750M increase to common share repurchase authorization, adding to the $95 million of authorization remaining as of June 3
Slide 4: Consistent Capital Delivery
Consistent Capital Delivery Cumulative capital return to common shareholders 4 • Jackson Financial Inc. (JFI) has returned $1.5 billion to common shareholders since becoming a standalone public company • JFI has repurchased 23.4 million shares to date, which equates to nearly 25% of outstanding comm
Slide 5: On Track to Deliver on 2024 Financial Targets
425% Risk - Based Capital (RBC) ratio minimum Approximately two years of holding company fixed expenses Estimated JNLIC RBC ratio of 550 - 570% as of 2Q24, after reflecting $250 million distribution from operating company Holding company cash and highly liquid securities of more than $500 million as
Slide 6: Consolidated Results
283 334 410 2Q23 1Q24 2Q24 9,554 10,833 11,465 2Q23 4Q23 2Q24 Consolidated Results Adjusted Operating Earnings 2Q24 vs. 2Q23 • 2Q24 benefited from improved spread income and increased fee income resulting from higher average variable annuity assets under management, and improved mortality, partially
Slide 7: Notable Items Second Quarter 2024
Notable Items Second Quarter 2024 2Q23 2Q24 ($ millions, except per share amounts) Pretax After - tax 1 EPS - Diluted Pretax After - tax 1,2 EPS - Diluted Adjusted Operating Earnings 3 305 283 $3.34 473 410 $5.32 Notable Items Included in Adjusted Operating Earnings Out performance/(Under performanc
Slide 8: Stable Non-Operating Results
Stable Non - Operating Results Pretax income attributable to Jackson Financial Inc. (U.S. GAAP) Pretax adjusted operating earnings (Non - GAAP) 1 Income on funds withheld 4 311 1) See the Appendix for the non - U.S. GAAP financial measures, definitions, and reconciliations to the most comparable U.S
Slide 9: Continued Progress on Retail Sales Diversification
3.1 3.7 4.2 2Q23 1Q24 2Q24 568 1,140 1,413 2Q23 1Q24 2Q24 Continued Progress on Retail Sales Diversification 1 • 2Q24 retail annuity sales up 15% and 36% from 1Q24 and 2Q23, respectively, with an increasingly diversified product mix • More than half of retail annuity sales without lifetime benefit r
Slide 10: Segment Results
Segment Results Retail Institutional Closed Block • 2Q24 vs. 2Q23 : Increase primarily due to improved mortality and lower other policyholder benefits expenses • 2Q24 vs. 1Q24 : Increase primarily due to gains from updating future policy benefits cashflow assumptions • 2Q24 vs. 2Q23 : Current quarte
Slide 11: Strong Capital and Liquidity Position
Strong Capital and Liquidity Position Highlights • Jackson National Life Insurance Company (JNLIC) estimated RBC ratio of 550 - 570% as of 2Q24 • Statutory Total Adjusted Capital (TAC) at JNLIC ended 2Q24 at $4.7 billion • JNLIC generated $681 million of capital in the first six months of 2024 1 • B
Slide 12: Outlook for Continued Performance Against Targets Remains Positive
12 Outlook for Continued Performance Against Targets Remains Positive 12 On track to deliver on 2024 key financial targets Maintained strong balance sheet and robust levels of liquidity Demonstrated strength of distribution franchise and consistent capital generation Well - positioned for continued
Slide 13: Investments
Investments
Slide 14: High Quality, Diversified Investment Portfolio
14 High Quality, Diversified Investment Portfolio 14 Corporate portfolio is concentrated in investment - grade securities Highly rated and diversified commercial mortgage loan office portfolio, which is less than 2% of the general account portfolio Strategic, conservative underwriting across our por
Slide 15: U.S. GAAP – Investment Portfolio
U.S government securities 9% Other government securities 2% Corporate securities 57% Residential mortgage - backed <1% Commercial mortgage - backed 3% Other asset - backed securities 5% Equity securities <1% Mortgage loans 16% Policy loans 2% Derivatives <1% Limited partnerships 4% Other invested as
Slide 16: Statutory – Investment Portfolio
U.S government securities 10% Other government securities 2% Corporate securities 56% Residential mortgage - backed <1% Commercial mortgage - backed 3% Other asset - backed securities 6% Equity securities <1% Mortgage loans 17% Policy loans 2% Derivative <1% Limited partnerships 3% Other invested as
Slide 17: Statutory – Fixed Maturity Rating Distribution
US Treasuries 13% NAIC 1A - 1D (AAA - AA - ) 17% NAIC 1E - 1G (A) 33% NAIC 2A - 2C (BBB) 35% NAIC 3A - 3C (BB) 1% NAIC 4A - 4C (B) <1% NAIC 5/6 <0.1% Statutory – Fixed Maturity Rating Distribution June 30, 2024 $32b 17 98% of portfolio is investment grade Note: Percentages may not total 100 due to r
Slide 18: Statutory – Corporate Portfolio
AAA: <1% AA: 7% A: 42% BBB: 48% BB: 2% B: <1% CCC and below: <0.1% Statutory – Corporate Portfolio June 30, 2024 Corporate Portfolio Rating Distribution 1 Key Highlights • Market/book ratio of the corporate portfolio is 0.94 • High - yield corporates account for 1% of the total investment portfolio
Slide 19: Statutory – ABS Portfolio
NAIC 1A - 1D (AAA - AA - ) 59% NAIC 1E - 1G (A) 35% NAIC 2 (BBB) 6% NAIC 3 (BB) <0.1% NAIC 4 <0.1% Statutory – ABS Portfolio June 30, 2024 $2.4b ABS Sector Distribution 1 NAIC Rating Distribution $2.4b 19 CLOs 46% Structured settlements 13% Rooftop solar 11% Tax liens 7% Timeshare 5% PDP wells 3% Fi
Slide 20: Statutory – Collateralized Loan Obligations (CLO) Debt
AAA 56% AA 25% A 18% BBB <1% B <1% Statutory – Collateralized Loan Obligations (CLO) Debt June 30, 2024 CLO NAIC Distribution 1 Key Highlights • CLO exposure highly rated with virtually all rated single A or above • Exposure is diversified among 42 different managers and 68 CLOs • Each CLO is divers
Slide 21: Statutory – Commercial Mortgage-Backed Securities (CMBS)
Single Asset/Single Borrower 37% Agency 5% Conduit 58% Office , 12% Retail , 9% Industrial , 6% Multi - family , 5% Hotel , 4% Other , 1% Statutory – Commercial Mortgage - Backed Securities (CMBS) June 30, 2024 CMBS Distribution Key Highlights • 97% are rated AA - or higher • 58% of CMBS portfolio a
Slide 22: Statutory – Commercial Mortgage Loan Portfolio
CM 1 69% CM 2 27% CM 3/4 4% Statutory – Commercial Mortgage Loan Portfolio 1 June 30, 2024 CML NAIC Distribution CML Property Type Distribution • Highly diversified with an average loan size of $19m • 99% are senior/first mortgage loans • 96% of the portfolio has the highest ratings of CM1 - 2 • Wei
Slide 23: Statutory – Commercial Mortgage Loan Office Exposure
CM 1 86% CM 2 11% CM 3/4 3% Statutory – Commercial Mortgage Loan Office Exposure 1 June 30, 2024 NAIC Rating Distribution – Office Exposure Key Highlights $0.7b 23 Loan - to - Value / Debt Service Coverage 2 1) Based on NAIC expanded ratings and statement value. Shown net of $72m of impairment and s
Slide 24: Appendix
Appendix
Slide 25: VA Market Risk Benefits Liability
VA Market Risk Benefits 25 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 g
Slide 26: 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, sel ected non - GAAP financial measures. Management believes that the use of these non - GAAP financial measures, together with relevant U.S. GAA
Slide 27: Non-GAAP Financial Measures: Adjusted Book Value
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 ( Los s) (AOCI) attributable to Jackson Financial Inc (JFI), which does not include AOCI a
Slide 28: Adjusted Operating Earnings Reconciliation
Adjusted Operating Earnings Reconciliation $ millions, except effective tax rate For the Three Months Ended For the Six Months Ended 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 6/30/23 6/30/24 Net income (loss) attributable to Jackson Financial Inc. common shareholders 1,204 2,762 (1,570) 784 264 (293)
Slide 29: Select U.S. GAAP to Non-GAAP Reconciliation
Select U.S. GAAP to Non - GAAP Reconciliation $ millions, except per share and shares outstanding data For the Three Months Ended For the Six Months Ended 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 6/30/23 6/30/24 Net Income (Loss) 1,220 2,790 (1,560) 802 282 (276) 1,084 Income attributable to non - c
Slide 30: 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), in c luding our investment portfolio (but excludes assets held in funds withheld accounts for reinsurance transactions), (ii) third - pa
Slide 31: 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 register