Jackson Financial Inc. · NYSE:JXN
Jackson Financial — Q1 2024 Earnings Presentation
31 slides from Jackson Financial's earnings presentation, May 9, 2024
Slide 1: First Quarter 2024 Financial Results
Jackson Financial Inc. First Quarter 2024 Financial Results May 9, 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: Expected Brooke Re Outcomes Evident in 1Q24
Expected Brooke Re Outcomes Evident in 1Q24 More stable and predictable capital generation at Jackson National Life Reduced volatility of net hedging results Greater stability of U.S. GAAP net income Better alignment of adjusted operating earnings1 and regulatory capital generation 1) See the Append
Slide 4: Strong 1Q24 Financial Results
Strong 1Q24 Financial Results GAAP Earnings GAAP Earnings per Non-GAAP Non-GAAP Share Earnings Earnings per Share $784M $9.94 $334M $4.23 Net income attributable to Jackson Net income per common share Adjusted Operating Earnings1 Adjusted Operating Earnings per Financial Inc. common shareholders com
Slide 5: Consistent Capital Delivery
Consistent Capital Delivery Cumulative capital return to common shareholders Capital return since becoming a standalone company Highlights $1.4B • Jackson Financial Inc. (JFI) has returned $1.4 billion since becoming a standalone public company • JFI has repurchased to date 22.1 million shares, whic
Slide 6: On Track to Deliver on 2024 Financial Targets
On Track to Deliver on 2024 Financial Targets 2024 Progress Capital Return $550-$650 million capital return to common Returned $172 million of capital to common shareholders in 1Q24 shareholders Holdco Liquidity Approximately two years of Holding company cash and highly liquid securities of nearly $
Slide 7: Consolidated Results
Consolidated Results Adjusted Operating Earnings1 Key Takeaways ($ millions) 334 Adjusted Operating Earnings 271 204 1Q24 v. 1Q23 • 1Q24 benefited from higher fee income resulting from higher average variable annuity assets under management, and higher spread income, partially offset by higher marke
Slide 8: Notable Items
Notable Items First Quarter 2024 1Q23 1Q24 After- EPS- After- EPS- ($ millions, except per share amounts) Pretax Pretax tax1 Diluted tax1,2 Diluted Adjusted Operating Earnings3 302 271 $3.15 389 334 $4.23 Notable Items Included in Adjusted Operating Earnings Out performance/(Under performance) from
Slide 9: Economic Hedging Approach Better Aligned With GAAP
Economic Hedging Approach Better Aligned With GAAP 1Q24 Pretax Adjusted Operating Earnings Reconciliation Highlights ($ millions) • Stable guarantee fee stream supports 69 11 896 hedging needs 427 • Economic hedging better aligns with U.S. GAAP accounting following the establishment and funding of B
Slide 10: Continued Progress on Retail Sales Diversification
Continued Progress on Retail Sales Diversification1 Retail Sales Highlights ($ billions) 3.3 3.7 • 1Q24 retail annuity sales up 13% and 18% from 4Q23 and 3.1 1Q23, respectively, with an increasingly diversified product mix • More than half of annuity sales now without lifetime benefit 1Q23 4Q23 1Q24
Slide 11: Segment Results
Segment Results 11 ($ millions) Retail ($ millions) Institutional ($ millions) Closed Block ($ millions) Pre-tax adjusted operating earnings1 ($ millions) Pre-tax adjusted operating earnings1 ($ millions) Pre-tax adjusted operating earnings1 Impact of annual actuarial assumption update 19 419 356 (2
Slide 12: Strong Capital and Liquidity Position
Strong Capital and Liquidity Position Highlights • Jackson National Life Insurance Company (JNLIC) estimated RBC ratio of 555-575% as of 1Q24 • Statutory Total Adjusted Capital (TAC) at JNLIC ended 1Q24 at $4.7 billion • Brooke Re remains well capitalized and hedging performed as expected • Holding
Slide 13: Outlook for Continued Performance Against Targets Remain Positive
Outlook for Continued Performance Against Targets Remain Positive ― Continued progress toward our strategic and operational goals ― Maintained strong balance sheet and robust levels of liquidity ― On track to deliver on 2024 key financial targets ― Well-positioned for continued long-term value creat
Slide 14: Investments
Investments @ JACKSON’
Slide 15: High Quality, Diversified Investment Portfolio
High Quality, Diversified Investment Portfolio ― Strategic, conservative underwriting across our portfolio ― 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 securi
Slide 16: U.S. GAAP – Investment Portfolio
U.S. GAAP – Investment Portfolio March 31, 2024 Investment Portfolio Classification1 Key Highlights Limited Partnerships 4% Other invested assets <1% • Market/book ratio of the fixed maturity portfolio is 0.92 U.S government securities 9% Derivatives <1% Policy loans 2% Other government securities 2
Slide 17: Statutory – Investment Portfolio
Statutory – Investment Portfolio March 31, 2024 Investment Portfolio Classification1 Key Highlights Limited Partnerships 3% Other invested assets <1% • Market/book ratio of the fixed maturity portfolio is 0.92 Derivative <1% U.S government securities 10% Policy loans 2% Other government securities 2
Slide 18: Statutory – Fixed Maturity Rating Distribution
Statutory – Fixed Maturity Rating Distribution March 31, 2024 98% of portfolio is investment grade US Treasuries NAIC 1A-1D (AAA-AA-) 13% NAIC 5/6 17% <0.1% NAIC 4A-4C (B) <1% NAIC 3A-3C (BB) 1% $31b NAIC 1E-1G (A) 34% NAIC 2A-2C (BBB) 34% 18 Notes: Excludes Funds Withheld. Statutory statement value
Slide 19: Statutory – Corporate Portfolio
Statutory – Corporate Portfolio March 31, 2024 Corporate Portfolio Rating Distribution1 Key Highlights CCC and below: <0.1% • Market/book ratio of the corporate portfolio is 0.94 B: <1% AAA: <1% BB: 2% AA: 7% • High-yield corporates account for 1% of the total investment portfolio and 2% of total co
Slide 20: Statutory – ABS Portfolio
Statutory – ABS Portfolio March 31, 2024 ABS Sector Distribution1, 2 NAIC Rating Distribution1 Fiber 1% Aircraft 1% Other 4% Single Family Rental 1% Equipment Leases 2% Whole Business NAIC 4 Securitizations 2% <0.1% NAIC 1A-1D (AAA-AA-) Music Royalties 3% NAIC 3 (BB) 59% PDP Wells 3% <0.1% Timeshare
Slide 21: Statutory – Collateralized Loan Obligations (CLO) Debt
Statutory – Collateralized Loan Obligations (CLO) Debt March 31, 2024 CLO NAIC Distribution1 Key Highlights • CLO exposure highly rated with virtually all rated single A B or above <0.1% AAA 57% BBB • Exposure is diversified among 39 different managers and <1% 61 CLOs • Each CLO is diversified, aver
Slide 22: Statutory – Commercial Mortgage Loan Portfolio
Statutory – Commercial Mortgage Loan Portfolio1 March 31, 2024 CML NAIC Distribution2 CML Property Type Distribution2 Multi-Family CM 1 28% 68% CM 3/4 Other Industrial 4% 4% 25% $7.1b Hotels $7.1b 10% CM 2 28% Office 10% Retail Loan-to-Value / Debt Service Coverage3 23% Debt Service Coverage Ratio •
Slide 23: Statutory – Commercial Mortgage Loan Office Exposure
Statutory – Commercial Mortgage Loan Office Exposure1 March 31, 2024 NAIC Rating Distribution – Office Exposure2 Key Highlights CM 1 • Highly diversified with an average loan size of $15m 86% CM 3/4 3.0% • 100% are senior/first mortgage loans CM 2 11% $0.7b • 97% of the portfolio has the highest two
Slide 24: Appendix
Appendix @ JACKSON’
Slide 25: 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 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, selected non-GAAP financial measures. Management believes that the use of these non-GAAP financial measures, together with relevant U.S. GAAP finan
Slide 27: 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 28: Adjusted Operating Earnings Reconciliation
Adjusted Operating Earnings Reconciliation For the Twelve $ millions, except effective tax rate For the Three Months Ended Months Ended 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 12/31/22 12/31/23 Net income (loss) attributable to Jackson Financial Inc. common shareholders (1,497) 1,204 2,762 (1,570)
Slide 29: 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 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 12/31/22 12/31/23 Net Income (Loss) (1,496) 1,220 2,790 (1,560) 802 6,229 954 Income attributable to no
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”), including our investment portfolio (but excludes assets held in funds withheld accounts for reinsurance transactions), (ii) third-part
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 registered