Jackson Financial Inc. · NYSE:JXN
Jackson Financial — Q3 2023 Earnings Presentation
31 slides from Jackson Financial's earnings presentation, Nov 9, 2023
Slide 1: Third Quarter 2023 Financial Results
Jackson Financial Inc. Third Quarter 2023 Financial Results November 9, 2023
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 18.4 million shares, which equates to 19% of outstanding common shares since separation February 28, 2023 JFI updates capital return target to $450-$550m for calendar year 2023 $1B+ JFI announces increased share repurchase authoriz
Slide 4: On Track to Achieve 2023 Financial Targets
On Track to Achieve 2023 Financial Targets 425-500% Risk Based Capital Estimated 3Q23 RBC ratio was up from 2Q23 and above target range for (RBC) ratio under normal normal market conditions market conditions Holding company assets (excluding equity in subsidiaries) of nearly $1.4 Approximately two y
Slide 5: Strong Operating and Capital Results
Strong Operating and Capital Results Third Quarter 2023 Resilient Earnings Results • Net income attributable to Jackson Financial Inc. common shareholders of $2.8 billion • Adjusted Operating Earnings1 of $315 million • Adjusted Operating Earnings per common share (Diluted)1 of $3.80 • Adjusted Oper
Slide 6: Growth in Quarterly Earnings and Book Value in 2023
Growth in Quarterly Earnings and Book Value in 2023 Adjusted Operating Earnings1 Key Takeaways ($ millions) Adjusted Operating Earnings 376 294 283 315 • Adjusted Operating Earnings for 3Q23 of $315 million compared to $376 million for 271 3Q22, as growth in fee and spread income were more than offs
Slide 7: Notable Items
Notable Items Third Quarter 2023 3Q22 3Q23 ($ millions, except EPS amounts) Pretax After-tax1 EPS-Diluted Pretax After-tax1,2 EPS-Diluted Adjusted Operating Earnings3 414 376 4.28 355 315 3.80 Notable Items Included in Adjusted Operating Earnings Out performance/(Under performance) from Limited Part
Slide 8: Non-Operating Earnings
Non-Operating Earnings 3Q23 Pretax Adjusted Operating Earnings Reconciliation Highlights ($ millions) Net Hedge Gain1: $2,786 million • 3Q23 net hedge gain of $2,786 million, primarily due to higher 303 9 3,485 interest rates generating a significant gain in market risk benefits 2,376 45 159 • Our h
Slide 9: Segment Results – Retail Annuities
Segment Results – Retail Annuities1 Retail Sales Recent Trends ($ billions) • Variable annuity (VA) sales of $2.4 billion in 3Q23 have stabilized over recent quarters in the higher interest rate environment, consistent with consumer 3.6 3.2 3.3 preference for protection 3.1 3.1 • RILA sales of $807
Slide 10: Segment Results – Retail Annuities
Segment Results – Retail Annuities Variable Annuity Account Value RILA Account Value FA / FIA Account Value ($ billions) ($ billions) ($ billions) 3.8 1.8 195 212 1.5 1.2 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 Separate Account General Account • Pretax adjusted operating earnings for 3Q23 of $354 million comp
Slide 11: Segment Results – Institutional & Closed Blocks
Segment Results – Institutional & Closed Blocks Institutional Account Value Institutional Highlights ($ billions) • Pretax adjusted operating earnings1 of $21 million in 3Q23 broadly in line with $20 million in the year-ago quarter 2.0 8.4 8.7 • Institutional sales of $112 million during 3Q23, refle
Slide 12: Delivering On Our Capital Management Commitments
Delivering On Our Capital Management Commitments On track to achieving 2023 capital return target of $450-$550 million, with $347 million returned YTD • Returned $123 million to common shareholders in 3Q23 through $71 million of share repurchases and $52 million in dividends • $368 million remaining
Slide 13: Continue to Execute on Targets and Focus on Shareholder Value Creation
Continue to Execute on Targets and Focus on Shareholder Value Creation ― Continued progress toward our strategic and operational goals ― Maintained strong balance sheet and robust levels of liquidity ― On track to deliver on 2023 key financial targets ― Well-positioned for continued long-term value
Slide 14: Investments
Investments @ JACKSON’
Slide 15: 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 16: U.S. GAAP – Investment Portfolio
U.S. GAAP – Investment Portfolio September 30, 2023 Investment Portfolio Classification1 Key Highlights Limited Partnerships 6% Other invested assets <1% • Market/book ratio of the fixed maturity portfolio is 0.88 U.S government securities 9% Derivatives 2% Other government securities Policy loans 2
Slide 17: Statutory – Investment Portfolio
Statutory – Investment Portfolio September 30, 2023 Investment Portfolio Classification1 Key Highlights Other invested assets <1% • Market/book ratio of the fixed maturity portfolio is 0.87 Limited Partnerships 3% Derivatives <1% U.S government securities 10% Policy loans 2% Other government securit
Slide 18: Statutory – Fixed Maturity Rating Distribution
Statutory – Fixed Maturity Rating Distribution September 30, 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% $31b NAIC 1E-1G (A) 33% NAIC 2A-2C (BBB) 35% 18 Notes: Excludes Funds Withheld. Statutory statement value based on NAIC ratings. Includes
Slide 19: Statutory – Corporate Portfolio
Statutory – Corporate Portfolio September 30, 2023 Corporate Portfolio Rating Distribution1 Key Highlights CCC and below: <0.1% • Market/book ratio of the corporate portfolio is 0.89 B: <1% AAA: 1% BB: 2% AA: 7% • High yield corporates account for 1% of invested assets and 2% of total corporate port
Slide 20: Statutory – ABS Portfolio
Statutory – ABS Portfolio September 30, 2023 ABS Sector Distribution1, 2 NAIC Rating Distribution1 Servicer Advance 1% Aircraft 1% Stranded Utility <1% Single Family Rentals 2% Other, 1% Music Royalties 2% PDP Wells 3% NAIC 1A-1D (AAA-AA-) NAIC 3 (BB) 57% Timeshare 4% <1% Whole Business Securitizati
Slide 21: Statutory – Collateralized Loan Obligations (CLO) Debt
Statutory – Collateralized Loan Obligations (CLO) Debt September 30, 2023 CLO NAIC Distribution1 Key Highlights AAA • CLO exposure highly rated with virtually all rated single A 47% or above BBB <1% • Exposure is diversified among 37 different managers and 61 CLOs • Each CLO is diversified, averagin
Slide 22: Statutory – Commercial Mortgage Loan Portfolio
Statutory – Commercial Mortgage Loan Portfolio1 September 30, 2023 CML NAIC Distribution CML Property Type Distribution Multi-Family CM 1 28% 70% CM 3/4 Other 3% 4% Retail $7.1b Hotels $7.1b 23% 10% CM 2 27% Office 10% Industrial Loan-to-Value / Debt Service Coverage2 25% Debt Service Coverage Ratio
Slide 23: Statutory – Commercial Mortgage Loan Office Exposure
Statutory – Commercial Mortgage Loan Office Exposure1 September 30, 2023 NAIC Rating Distribution – Office Exposure Key Highlights • Highly diversified with an average loan size of $14m CM 1 • 100% are senior/first mortgage loans CM 2 86% 14% $0.7b • 100% of the portfolio has the highest two ratings
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 Nine $ millions, except effective tax rate For the Three Months Ended Months Ended 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 9/30/22 9/30/23 Net income (loss) attributable to Jackson Financial Inc. common shareholders 1,879 (1,150) (1,497) 1,204 2,76
Slide 29: Select U.S. GAAP to Non-GAAP Reconciliation
Select U.S. GAAP to Non-GAAP Reconciliation For the Nine $ millions, except per share and shares outstanding data For the Three Months Ended Months Ended 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 9/30/22 9/30/23 Net Income (Loss) 1,868 (1,158) (1,496) 1,220 2,790 7,387 2,514 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) the assets in our investment portfolio managed by PPM America, Inc. (“PPM”), which excludes assets held in funds withheld accounts for reinsurance transactions, (ii) third-party a
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