Slide 1: Fourth Quarter and Full Year 2023 Financial Results
February 22, 2024 Jackson Financial Inc. Fourth Quarter and Full Year 2023 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: Cumulative Capital Return to Common Shareholders
Oct 2021 Dec 2021 Mar 2022 Jun 2022 Sep 2022 Dec 2022 Mar 2023 Jun 2023 Sep 2023 Dec 2023 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 JFI updates capital return target to $425 -
Slide 4: Delivered on All 2023 Financial Targets
Delivered on All 2023 Financial Targets $450 - $550 million capital return to common shareholders Approximately two years of holding company fixed expenses Returned $464 million of capital to common shareholders in 2023 through $255 million in share repurchases and $209 million in dividends Holding
Slide 5: Successful Year of Execution Full Year 2023 Highlights
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 Earnings 1 of $1.1 billion • Adjusted Operating Earnings per common share (
Slide 6: Continue to Execute on Annual Targets & Focus on Shareholder Value Creation
6 ― 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 for continued long - term value creation for shareholders Continue to Exec
Slide 7: Operating Earnings Drove Book Value Growth in 2023
Operating Earnings Drove Book Value Growth in 2023 Adjusted Operating Earnings • Adjusted Operating Earnings for 4Q23 of $204 million compared to $294 million for 4Q22, as growth in fee income, along with a lower effective tax rate and improved spread income, were more than offset by the comparative
Slide 8: Notable Items Fourth Quarter 2023
Notable Items Fourth Quarter 2023 4Q22 4Q23 ($ millions, except per share amounts) Pretax After - tax 1 EPS - Diluted Pretax After - tax 1,2 EPS - Diluted Adjusted Operating Earnings 3 320 294 3.39 203 204 2.53 Notable Items Included in Adjusted Operating Earnings Out performance/(Under performance)
Slide 9: Notable Items Full Year 2023
Notable Items Full Year 2023 FY22 FY23 ($ millions, except per share amounts) Pretax After - tax 1 EPS - Diluted Pretax After - tax 1,2 EPS - Diluted Adjusted Operating Earnings 3 1,643 1,454 16.39 1,165 1,073 12.84 Notable Items Included in Adjusted Operating Earnings Out performance/(Under perform
Slide 10: Net Hedge Loss: $990 million
Net Hedge Loss 1 : $990 million 4Q23 Non - Operating Earnings • 4Q23 net hedge loss of $990 million, primarily due to lower interest rates generating a significant loss in market risk benefits • Our hedging program historically sought to balance three risk management objectives: ― Protecting against
Slide 11: Segment Results – Retail Annuities
3.2 3.1 3.1 3.3 3.3 4Q22 1Q23 2Q23 3Q23 4Q23 640 549 568 822 1,000 4Q22 1Q23 2Q23 3Q23 4Q23 Segment Results – Retail Annuities 1 • 4Q23 total annuity sales up from 4Q22 with an increasingly diversified product mix • More than half of annuity sales now without lifetime benefit riders • 4Q23 RILA sale
Slide 12: Segment Results – Retail Annuities
1.9 5.2 4Q22 4Q23 1.6 1.8 4Q22 4Q23 Segment Results – Retail Annuities • Pretax adjusted operating earnings for 4Q23 of $326 million broadly unchanged from 4Q22 • Growth of inforce business across all product lines supports future earnings trajectory • VA account value up 11% from 4Q22, benefiting f
Slide 13: Segment Results – Institutional & Closed Blocks
9.0 8.4 ( 2.0 ) 1.1 0.3 4Q22 Sales Surrenders, Withdrawals, and Benefits Interest Credited 4Q23 Segment Results – Institutional & Closed Blocks • Pretax adjusted operating earnings 1 of $22 million in 4Q23 up from $17 million in the year - ago quarter • Institutional sales of $1.1 billion during 202
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 mil
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 to Variable Annuity Business
16 Cash Surrender Value Floor Introduced Non - Economic Volatility to Variable Annuity Business • Present Value (PV) of cash flows approach evaluating 10,000 economic scenarios focused on the tail • On its own, this cash flow - based requirement was market sensitive and reasonably aligned with econo
Slide 17: Seeking a Long-Term Solution That Aligns Liability Treatment With the Economics of Our Business
Seeking a Long - Term Solution That Aligns Liability Treatment With the Economics of Our Business 17 Goals of Solution • Align reserves and hedging instruments in a more consistent, economic manner • Reduce the need for non - economic hedging • Allow for more intuitive results to stakeholders • Stro
Slide 18: Established a Self-Sustaining Variable Annuity Captive
• Formed Brooke Re, a Michigan based captive reinsurer 100% owned by Brooke Life Insurance Company (BLIC) • Certain inforce and future VA guaranteed benefits transferred from Jackson National Life to Brooke Re through a coinsurance agreement utilizing a funds withheld account • Implemented an econom
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 19 • 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 clear line between: • Guaranteed benefit economics in Brooke R
Slide 20: Capital Framework at Brooke Re Designed to Be Highly Resilient
Capital Framework at Brooke Re Designed to Be Highly Resilient 20 • 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 • Brooke Re’s market/interest rate risk charge
Slide 21: Improved Hedging Outcomes Following Transaction
Improved Hedging Outcomes Following Transaction 21 • 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 -
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 22 x Modified GAAP reserve not limited by cash surrender value floor x Hedges and reserves consistently and fully responsive to market and rate movements x Reserve better aligned with economics of business Align reserves
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 24 • 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 rat
Slide 25: Jackson National Life Capital Generation Driven Primarily By Fee Business
25 Jackson National Life Capital Generation Driven Primarily By Fee Business VA Separate Account VA Fixed Account FA/FIA/Payout RILA Institutional Closed Block Annuity Closed Block Life Fee 82% Life 6% Inforce Reserves By Type 1 • Capital generation more aligned with adjusted operating earnings • Fe
Slide 26: Robust JNL Capital Position Following Transaction
Robust JNL Capital Position Following Transaction 26 Jackson National Life Insurance Company – Impact of Reinsurance Transaction $ millions Total Adjusted Capital (TAC) Company Action Level Required Capital (CAL) RBC Ratio As Reported Year - End 2023 $5,158 $827 624% Release of Required Capital (36)
Slide 27: Increased Transparency Into Economics of Business
Increased Transparency Into Economics of Business Jackson Financial Inc. Jackson National Life Brooke Re Holding Company Regulated Insurance Company Regulated Captive Reinsurer • Holding company fixed expenses including debt service • Cash and highly liquid securities funded by operating company rem
Slide 28: 2024 Key Financial Targets
2024 Key Financial Targets
Slide 29: 2024 Financial Targets
2024 Financial Targets 425% Risk - Based Capital (RBC) ratio Approximately two years of holding company fixed expenses Excess capital at Jackson National Life Insurance Company measured at 425% RBC ratio Holding company fixed net expenses, including interest expense, at approximately $250 million $5
Slide 30: Investments
Investments
Slide 31: High Quality, Diversified Investment Portfolio
31 ― 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 securities 31 High Quality, Diversified Investm
Slide 32: U.S. GAAP – Investment Portfolio December 31, 2023
U.S government securities 10% Other government securities 2% Corporate securities 55% Residential mortgage - backed <1% Commercial mortgage - backed 3% Other asset - backed securities 5% Equity securities <1% Mortgage loans 17% Policy loans 2% Derivatives <1% Limited Partnerships 3% Other invested a
Slide 33: Statutory – Investment Portfolio December 31, 2023
U.S government securities 10% Other government securities 2% Corporate securities 54% Residential mortgage - backed <1% Commercial mortgage - backed 3% Other asset - backed securities 5% Equity securities 1% Mortgage loans 18% Policy loans 2% Derivatives <1% Limited Partnerships 3% Other invested as
Slide 34: Statutory – Fixed Maturity Rating Distribution
US Treasuries 14% NAIC 1A - 1D (AAA - AA - ) 17% NAIC 1E - 1G (A) 33% NAIC 2A - 2C (BBB) 34% NAIC 3A - 3C (BB) 1% NAIC 4A - 4C (B) <1% NAIC 5/6 <0.1% Statutory – Fixed Maturity Rating Distribution December 31, 2023 Notes: Excludes Funds Withheld. Statutory statement value based on NAIC ratings. Incl
Slide 35: Statutory – Corporate Portfolio
AAA: 1% AA: 6% A: 43% BBB: 47% BB: 2% B: <1% CCC and below: <0.1% Statutory – Corporate Portfolio December 31, 2023 1) Excludes Funds Withheld. Based on NAIC expanded ratings and Statement value. Includes Brooke, Squire, Squire II, Jackson, and Jackson New York. Percentages may not total 100 due to
Slide 36: Statutory – ABS Portfolio
NAIC 1A - 1D (AAA - AA - ) 61% NAIC 1E - 1G (A) 33% NAIC 2 (BBB) 6% NAIC 3 (BB) <0.1% NAIC 4 <0.1% CLOs 45% Structured Settlements 16% Rooftop Solar 9% Tax Liens 8% Timeshare 5% PDP Wells 3% Whole Business Securitizations 3% Equipment Leases 2% Music Royalties 2% Single Family Rental 2% Aircraft 1%
Slide 37: Statutory – Collateralized Loan Obligations (CLO) Debt
AAA 60% AA 24% A 15% BBB <1% B <0.1% Statutory – Collateralized Loan Obligations (CLO) Debt December 31, 2023 1) Excludes Funds Withheld. Based on NAIC expanded ratings and Statement value. Includes Brooke, Squire, Squire II, Jackson, and Ja ckson New York. Percentages may not total 100 due to round
Slide 38: Statutory – Commercial Mortgage Loan Portfolio
CM 1 69% CM 2 28% CM 3/4 3% Statutory – Commercial Mortgage Loan Portfolio 1 December 31, 2023 CML NAIC Distribution 2 CML Property Type Distribution 2 • Highly diversified with an average loan size of $19m • 99% are senior/first mortgage loans • 97% of the portfolio has the highest ratings of CM1 -
Slide 39: Statutory – Commercial Mortgage Loan Office Exposure
CM 1 86% CM 2 14% Statutory – Commercial Mortgage Loan Office Exposure 1 December 31, 2023 NAIC Rating Distribution – Office Exposure 2 Key Highlights • Highly diversified with an average loan size of $14m • 100% are senior/first mortgage loans • 100% of the portfolio has the highest two ratings, CM
Slide 40: Appendix
Appendix
Slide 41: VA Market Risk Benefits Liability
VA Market Risk Benefits 41 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
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, sel ected non - GAAP financial measures. Management believes that the use of these non - GAAP financial measures, together with relevant U.S. GAA
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 ( Los s) ("AOCI") attributable to Jackson Financial Inc ("JFI"), which does not include AO
Slide 44: Adjusted Operating Earnings Reconciliation
Adjusted Operating Earnings Reconciliation $ millions, except effective tax rate For the Three Months Ended For the Twelve 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 $ millions, except per share and shares outstanding data For the Three Months Ended For the Twelve 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 attributabl
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 -
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 register