Jackson Announces First Quarter 2023 Results
Key Highlights
-
Net income (loss) attributable to Jackson Financial Inc. of
$(1,497) million $(18.11) -
Adjusted operating earnings1 of
$271 million $3.15 28% from the first quarter of 2022 reflecting the decline in annuity account values and higher interest crediting rates on variable annuity fixed rate options in the first quarter of 2023 -
Returned
$124 million $70 million $54 million $450 -550 million -
First quarter 2023 registered index-linked annuity (RILA) sales of
$533 million $199 million -
Total annuity account value of
$219 billion 10% from the first quarter of 2022, driven largely by lower equity markets over the 12-month period. Compared to fourth quarter 2022, total annuity account value increased4% due primarily to higher equity markets in the current quarter. -
Estimated Risk Based Capital (RBC) ratio at Jackson National Life Insurance Company was within our target range of 425
-500% as of the end of the first quarter of 2023, including the impact of first quarter distributions from Jackson National Life of$600 million -
Successful issuance of preferred stock in the first quarter, raising
$533 million -
Cash and highly liquid securities at the holding company remained robust at more than
$1.5 billion
Laura Prieskorn, President and Chief Executive Officer of Jackson, stated, “We are pleased with the performance of Jackson’s business throughout the first quarter of 2023, which keeps us on track with our strategic and operational goals amid ongoing market volatility. In line with our commitments, we returned
Consolidated First Quarter 2023 Results
The company reported net income (loss) attributable to Jackson Financial Inc. of
Adjusted operating earnings for the three months ended March 31, 2023 were
First quarter adjusted operating earnings included a negative impact of
Total common shareholders’ equity was
Segment Results – Pretax Adjusted Operating Earnings2
|
Three Months Ended |
|
(in millions) |
March 31, 2023 |
March 31, 2022 |
Retail Annuities |
|
|
Institutional Products |
9 |
23 |
Closed Life and Annuity Blocks |
(20) |
(9) |
Corporate and Other |
(43) |
6 |
Total3 |
|
|
Retail Annuities
Retail Annuities reported pretax adjusted operating earnings of
Total annuity sales of
Institutional Products
Institutional Products reported pretax adjusted operating earnings of
Closed Life and Annuity Blocks
Closed Life and Annuity Blocks reported a pretax adjusted operating loss of
Corporate and Other
Corporate and Other reported a pretax adjusted operating loss of
Capitalization and Liquidity
(Unaudited, in billions) |
March 31, 2023 |
December 31, 2022 |
Statutory Total Adjusted Capital (TAC) Jackson National Life Insurance Company |
|
|
Statutory TAC at Jackson National Life Insurance Company (JNLIC) was
The negative impact from the reduction in TAC was partially offset by a decline in company action level (CAL) required capital, due primarily to higher equity markets and the update to the mean reversion parameter effective in the first quarter of 2023. The estimated RBC ratio as of first quarter 2023 was within our 425
Cash and liquid assets at the holding company totaled over
Earnings Conference Call
Jackson will host a conference call Wednesday, May 10, 2023, at 9 a.m. ET to review the first quarter results. The live webcast is open to the public and can be accessed at https://investors.jackson.com. A replay will be available following the call.
To register for the webcast, click here.
FORWARD-LOOKING STATEMENTS
The information in this press release contains forward-looking statements about future events and circumstances and their effects upon revenues, expenses and business opportunities. Generally speaking, any statement in this release not based upon historical fact is a forward-looking statement. Forward-looking statements can also be identified by the use of forward-looking or conditional words, such as “could,” “should,” “can,” “continue,” “estimate,” “forecast,” “intend,” “look,” “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “remain,” “confident” and “commit” or similar expressions. In particular, statements regarding plans, strategies, prospects, targets and expectations regarding the business and industry are forward-looking statements. They reflect expectations, are not guarantees of performance and speak only as of the dates the statements are made. We caution investors that these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those projected, expressed or implied. Factors that could cause actual results to differ materially from those in the forward-looking statements include those reflected in Part I, Item 1A. Risk Factors and Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 1, 2023, (the "2022 Annual Report") and elsewhere in the Company’s reports filed with the
Certain financial data included in this release consists of non-GAAP (Generally Accepted Accounting Principles) financial measures. These non-GAAP financial measures may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with
Certain financial data included in this release consists of statutory accounting principles (“statutory”) financial measures, including “total adjusted capital.” These statutory financial measures are included in or derived from the Jackson National Life Insurance Company annual and/or quarterly statements filed with the Michigan Department of Insurance and Financial Services and available in the investor relations section of the Company’s website at investors.jackson.com/financials/statutory-filings.
ABOUT JACKSON
Jackson® (NYSE: JXN) is committed to helping clarify the complexity of retirement planning—for financial professionals and their clients. Through our range of annuity products, financial know-how, history of award-winning service* and streamlined experiences, we strive to reduce the confusion that complicates retirement planning. We take a balanced, long-term approach to responsibly serving all our stakeholders, including customers, shareholders, distribution partners, employees, regulators and community partners. We believe by providing clarity for all today, we can help drive better outcomes for tomorrow. For more information, visit www.jackson.com.
Visit investors.jackson.com to view information regarding Jackson Financial Inc., including a supplement regarding the First Quarter 2023 results. We use this website as a primary channel for disclosing key information to our investors, some of which may contain material and previously non-public information.
*SQM (Service Quality Measurement Group) Contact Center Awards Program for 2004 and 2006-2022, for the financial services industry (To achieve world-class certification,
Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company® (
APPENDIX
Non-GAAP Financial Measures
In addition to presenting our results of operations and financial condition in accordance with GAAP, we use and report selected non-GAAP financial measures. Management believes the use of these non-GAAP financial measures, together with relevant GAAP financial measures, provides a better understanding of our results of operations, financial condition and the underlying performance drivers of our business. These non-GAAP financial measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with GAAP and should not be viewed as a substitute for the GAAP financial measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies.
Adjusted Operating Earnings
Adjusted Operating Earnings is an after-tax non-GAAP financial measure, which we believe should be used to evaluate our financial performance on a consolidated basis by excluding certain items that may be highly variable from period to period due to accounting treatment under GAAP or that are non-recurring in nature, as well as certain other revenues and expenses that we do not view as driving our underlying performance. Adjusted Operating Earnings should not be used as a substitute for net income as calculated in accordance with GAAP. However, we believe the adjustments to net income are useful for gaining an understanding of our overall results of operations.
For additional detail on the excluded items, please refer to the supplement regarding the first quarter ended March 31, 2023, posted on our website, https://investors.jackson.com.
The following is a reconciliation of Adjusted Operating Earnings to net income (loss) attributable to Jackson Financial Inc. (Jackson), the most comparable GAAP measure.
GAAP Net Income (Loss) to Adjusted Operating Earnings
|
Three Months Ended |
|||||
(in millions) |
March 31, 2023 |
March 31, 2022 |
||||
Net income (loss) attributable to Jackson Financial Inc. |
$ |
(1,497 |
) |
$ |
2,194 |
|
Income tax expense (benefit) |
|
(558 |
) |
|
388 |
|
Pretax income (loss) attributable to Jackson Financial Inc. |
|
(2,055 |
) |
|
2,582 |
|
Non-operating adjustments – (income) loss: |
|
|
||||
Guaranteed benefits and hedging results: |
|
|
||||
Fees attributed to guaranteed benefit reserves |
|
(780 |
) |
|
(764 |
) |
Net movement in freestanding derivatives |
|
2,512 |
|
|
1,476 |
|
Market risk benefits gains (losses), net |
|
(174 |
) |
|
(1,907 |
) |
Net reserve and embedded derivative movements |
|
189 |
|
|
40 |
|
Amortization of DAC associated with non-operating items at date of transition to LDTI |
|
153 |
|
|
173 |
|
Total guaranteed benefits and hedging results |
|
1,900 |
|
|
(982 |
) |
Net realized investment (gains) losses |
|
68 |
|
|
130 |
|
Net realized investment (gains) losses on funds withheld assets |
|
673 |
|
|
(1,028 |
) |
Net investment income on funds withheld assets |
|
(307 |
) |
|
(260 |
) |
Other items |
|
23 |
|
|
3 |
|
Total non-operating adjustments |
|
2,357 |
|
|
(2,137 |
) |
Pretax Adjusted Operating Earnings |
|
302 |
|
|
445 |
|
Operating income taxes |
|
31 |
|
|
68 |
|
Adjusted Operating Earnings |
$ |
271 |
|
$ |
377 |
|
|
|
|
||||
Weighted Average diluted shares outstanding |
|
86,082,970 |
|
|
89,959,862 |
|
Net income (loss) per diluted share |
$ |
(18.11 |
) |
$ |
24.39 |
|
Adjusted Operating Earnings per diluted share |
$ |
3.15 |
|
$ |
4.19 |
|
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"). AOCI attributable to JFI excludes AOCI arising from investments held within the funds withheld account related to the Athene Reinsurance Transaction. We exclude AOCI attributable to JFI from Adjusted Book Value Attributable to Common Shareholders because our invested assets are generally invested to closely match the duration of our liabilities, which are longer duration in nature, and therefore we believe period-to-period fair market value fluctuations in AOCI to be inconsistent with this objective. We believe excluding AOCI attributable to JFI is more useful to investors in analyzing trends in our business.
(in millions) |
March 31, 2023 |
December 31, 2022 |
||||
Total shareholders’ equity |
$ |
8,638 |
$ |
8,646 |
||
Less: Preferred equity |
|
533 |
|
— |
||
Total common shareholders’ equity |
|
8,105 |
|
8,646 |
||
Adjustments to total common shareholders’ equity: |
|
|
||||
Exclude Accumulated Other Comprehensive (Income) Loss attributable to Jackson Financial Inc. |
|
476 |
|
1,272 |
||
Adjusted Book Value Attributable to Common Shareholders |
$ |
8,581 |
$ |
9,918 |
||
Condensed Consolidated Balance Sheets
|
|
March 31, |
|
December 31, |
|||
|
|
2023 |
|
2022 |
|||
(in millions, except per share data) |
|
|
|
|
|||
Assets |
|
|
|
|
|||
Investments: |
|
|
|
|
|
||
Debt Securities, available-for-sale, net of allowance for credit losses of |
|
$ |
43,774 |
|
$ |
42,489 |
|
Debt Securities, at fair value under fair value option |
|
|
2,255 |
|
|
2,173 |
|
Debt Securities, trading, at fair value |
|
|
101 |
|
|
100 |
|
Equity securities, at fair value |
|
|
225 |
|
|
393 |
|
Mortgage loans, net of allowance for credit losses of |
|
|
10,911 |
|
|
10,967 |
|
Mortgage loans, at fair value under fair value option |
|
|
480 |
|
|
582 |
|
Policy loans (including |
|
|
4,377 |
|
|
4,377 |
|
Freestanding derivative instruments |
|
|
1,051 |
|
|
1,270 |
|
Other invested assets |
|
|
3,711 |
|
|
3,595 |
|
Total investments |
|
|
66,885 |
|
|
65,946 |
|
Cash and cash equivalents |
|
|
1,779 |
|
|
4,298 |
|
Accrued investment income |
|
|
497 |
|
|
514 |
|
Deferred acquisition costs |
|
|
12,760 |
|
|
12,923 |
|
Reinsurance recoverable, net of allowance for credit losses of |
|
|
28,078 |
|
|
29,046 |
|
Reinsurance recoverable on market risk benefits, at fair value |
|
|
238 |
|
|
221 |
|
Market risk benefit assets, at fair value |
|
|
5,204 |
|
|
4,865 |
|
Deferred income taxes, net |
|
|
755 |
|
|
320 |
|
Other assets |
|
|
902 |
|
|
944 |
|
Separate account assets |
|
|
204,366 |
|
|
195,906 |
|
Total assets |
|
$ |
321,464 |
|
$ |
314,983 |
|
Condensed Consolidated Balance Sheets
|
|
March 31, |
|
December 31, |
|
||||
|
|
2023 |
|
2022 |
|
||||
(in millions, except share and per share data) |
|
|
|
|
|
||||
Liabilities and Equity |
|
|
|
|
|||||
Liabilities |
|
|
|
|
|
||||
Reserves for future policy benefits and claims payable |
|
$ |
12,369 |
|
|
$ |
12,318 |
|
|
Other contract holder funds |
|
|
57,094 |
|
|
|
58,190 |
|
|
Market risk benefit liabilities, at fair value |
|
|
5,560 |
|
|
|
5,662 |
|
|
Funds withheld payable under reinsurance treaties (including |
|
|
22,254 |
|
|
|
22,957 |
|
|
Long-term debt |
|
|
2,632 |
|
|
|
2,635 |
|
|
Repurchase agreements and securities lending payable |
|
|
1,124 |
|
|
|
1,048 |
|
|
Collateral payable for derivative instruments |
|
|
545 |
|
|
|
689 |
|
|
Freestanding derivative instruments |
|
|
1,510 |
|
|
|
2,065 |
|
|
Notes issued by consolidated variable interest entities, at fair value under fair value option |
|
|
2,016 |
|
|
|
1,732 |
|
|
Other liabilities |
|
|
2,527 |
|
|
|
2,403 |
|
|
Separate account liabilities |
|
|
204,366 |
|
|
|
195,906 |
|
|
Total liabilities |
|
|
311,997 |
|
|
|
305,605 |
|
|
|
|
|
|
|
|
||||
Equity |
|
|
|
|
|
||||
Series A non-cumulative preferred stock and additional paid in capital, |
|
|
533 |
|
|
|
— |
|
|
Common stock; 1,000,000,000 shares authorized, |
|
|
1 |
|
|
|
1 |
|
|
Additional paid-in capital |
|
|
6,070 |
|
|
|
6,063 |
|
|
Treasury stock, at cost; 13,431,514 and 11,784,813 shares at March 31, 2023 and December 31, 2022, respectively |
|
|
(510 |
) |
|
|
(443 |
) |
|
Accumulated other comprehensive income (loss), net of tax expense (benefit) of |
|
|
(2,308 |
) |
|
|
(3,378 |
) |
|
Retained earnings |
|
|
4,852 |
|
|
|
6,403 |
|
|
Total shareholders' equity |
|
|
8,638 |
|
|
|
8,646 |
|
|
Noncontrolling interests |
|
|
829 |
|
|
|
732 |
|
|
Total equity |
|
|
9,467 |
|
|
|
9,378 |
|
|
Total liabilities and equity |
|
|
321,464 |
|
|
|
314,983 |
|
|
Condensed Consolidated Income Statements
|
|
Three Months Ended March 31, |
|
||||||
(in millions, except per share data) |
|
2023 |
|
2022 |
|
||||
Revenues |
|
|
|
|
|||||
Fee income |
|
$ |
1,888 |
|
|
$ |
2,012 |
|
|
Premiums |
|
|
25 |
|
|
|
37 |
|
|
Net investment income: |
|
|
|
|
|
||||
Net investment income excluding funds withheld assets |
|
|
415 |
|
|
|
430 |
|
|
Net investment income on funds withheld assets |
|
|
307 |
|
|
|
260 |
|
|
Total net investment income |
|
|
722 |
|
|
|
690 |
|
|
Net gains (losses) on derivatives and investments: |
|
|
|
|
|
||||
Net gains (losses) on derivatives and investments |
|
|
(2,726 |
) |
|
|
(1,566 |
) |
|
Net gains (losses) on funds withheld reinsurance treaties |
|
|
(673 |
) |
|
|
1,028 |
|
|
Total net gains (losses) on derivatives and investments |
|
|
(3,399 |
) |
|
|
(538 |
) |
|
Other income |
|
|
15 |
|
|
|
20 |
|
|
Total revenues |
|
|
(749 |
) |
|
|
2,221 |
|
|
|
|
|
|
|
|||||
Benefits and Expenses |
|
|
|
|
|
||||
Death, other policy benefits and change in policy reserves, net of deferrals |
|
|
228 |
|
|
|
300 |
|
|
(Gain) loss from updating future policy benefits cash flow assumptions, net |
|
|
14 |
|
|
|
15 |
|
|
Market risk benefits (gains) losses, net |
|
|
(174 |
) |
|
|
(1,907 |
) |
|
Interest credited on other contract holder funds, net of deferrals and amortization |
|
|
285 |
|
|
|
197 |
|
|
Interest expense |
|
|
43 |
|
|
|
20 |
|
|
Operating costs and other expenses, net of deferrals |
|
|
616 |
|
|
|
666 |
|
|
Amortization of deferred acquisition costs |
|
|
293 |
|
|
|
317 |
|
|
Total benefits and expenses |
|
|
1,305 |
|
|
|
(392 |
) |
|
Pretax income (loss) |
|
|
(2,054 |
) |
|
|
2,613 |
|
|
Income tax expense (benefit) |
|
|
(558 |
) |
|
|
388 |
|
|
Net income (loss) |
|
|
(1,496 |
) |
|
|
2,225 |
|
|
Less: Net income (loss) attributable to noncontrolling interests |
|
|
1 |
|
|
|
31 |
|
|
Net income (loss) attributable to Jackson Financial Inc. |
|
$ |
(1,497 |
) |
|
$ |
2,194 |
|
|
|
|
|
|
|
|||||
Earnings per share |
|
|
|
|
|
||||
Basic |
|
$ |
(18.11 |
) |
|
$ |
25.41 |
|
|
Diluted |
|
$ |
(18.11 |
) |
|
$ |
24.39 |
|
|
| ____________________________ |
1 For the reconciliation of non-GAAP measures to the most comparable GAAP measure, please see the explanation of Non-GAAP Financial Measures in the Appendix to this release. |
2 For the reconciliation of non-GAAP measures to the most comparable GAAP measure, please see the explanation of Non-GAAP Financial Measures in the Appendix to this release. |
3 See reconciliation of Net Income to Total pretax adjusted operating earnings in the Appendix to this release |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006152/en/
Investor Relations Contacts:
Liz Werner
elizabeth.werner@jackson.com
Andrew
andrew.campbell@jackson.com
Media Contact:
Patrick Rich
patrick.rich@jackson.com
Source: Jackson Financial Inc.
