Financial Data and Key Metrics Changes - In 2021, adjusted operating earnings reached $2.4 billion, exceeding the prior year by over $500 million, with a 22% increase in pretax adjusted operating earnings from the previous year [13][18] - The company ended the year with total adjusted capital of $6.6 billion and an RBC ratio of 580% at Jackson National Life Insurance [15][71] - Fourth quarter adjusted operating earnings were $7.48 per share, reflecting a 30% increase in adjusted pretax operating earnings compared to the previous year's quarter [22][48] Business Line Data and Key Metrics Changes - The retail annuity segment accounted for nearly two-thirds of total growth in pretax adjusted operating earnings, with retail annuity account values reaching $259 billion, up nearly 13% from the prior year [14][25] - Fourth quarter annuity sales were at their highest level for the year at $5 billion, up modestly from the prior year's quarter [26] - Fee-based advisory sales reached a record level of $1.3 billion, up from $1 billion last year, indicating strong growth in this segment [27] Market Data and Key Metrics Changes - The overall annuity sales for the industry in 2021 were at their highest level since 2008, with a 27% increase in traditional variable annuity and RILA sales combined, totaling $125 billion [28][29] - The company entered the defined contribution market with a partnership with AllianceBernstein, indicating potential growth opportunities in this area [30] Company Strategy and Development Direction - The company aims to maintain a balanced approach to capital management while investing in growth and delivering targeted capital returns to shareholders [77] - Jackson Financial is focused on expanding and diversifying its product offerings and distribution channels, maintaining its position as a leader in the retirement income and savings solutions market [76][77] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate various market conditions, emphasizing the stability of their fee income stream that supports hedging budgets [86] - The company anticipates continued sales momentum in 2022, supported by a diverse set of products and an expanding distribution network [27][30] Other Important Information - The company announced an increase in shareholder dividends and share repurchase authorization, targeting a capital return of $425 million to $525 million for the calendar year 2022 [10][18] - The company completed $211 million in share repurchases and paid $50 million in dividends by the end of 2021, maintaining cash and liquidity of over $600 million at the holding company [68][69] Q&A Session Summary Question: Is the $600 million dividend typical going forward? - Management indicated that the $600 million dividend reflects a strong year for the business and may be slightly elevated compared to historical averages [80] Question: What about the remaining $90 million from the dividend? - The remaining $90 million will eventually make its way to the holding company through financing arrangements [82] Question: How does the current macro environment affect RBC calculations? - Management noted that market downturns could lead to increased reserves or capital requirements, but they are well-prepared for such fluctuations [84][85] Question: What is the expected capital return target for 2022? - The capital return target of $425 million to $525 million is based on the business's performance and is viewed as sustainable [88][89] Question: What are the annual hedging costs? - The company collects approximately $2.5 billion in guarantee fees annually, with hedging costs expected to increase in a volatile market environment [92][93] Question: Will the company generate positive RBC capital in a market correction? - Management indicated that they would need to close the books to determine the impact on RBC, but they have a good buffer to absorb market downturns [100][104] Question: What are the qualitative impacts of LDTI? - Management expects an increase in reserves due to the shift to fair value accounting under LDTI, with potential changes in GAAP earnings volatility [108][109]

Product Launch and Market Position - Jackson Financial reported a successful launch of Market Link Pro and Market Link Pro Advisory in Q4 2021, expanding its product offerings in the Registered Index-Linked Annuities (RILAs) market[276]. - The company has been the top-selling retail annuity provider in the U.S. for eight of the past nine years, according to LIMRA[276]. Financial Performance - Adjusted Operating Earnings for Q3 2021 was $487.4 million, compared to $546.8 million in Q3 2020, reflecting a decrease of 10.1% year-over-year[315]. - Total sales for Q3 2021 reached $4.81 billion, an increase from $4.53 billion in Q3 2020, representing a growth of 6.2%[319]. - Variable annuity sales in Q3 2021 were $4.74 billion, up from $4.46 billion in Q3 2020, indicating a growth of 6.3%[319]. - Fixed index annuity sales dropped to $23.3 million in Q3 2021 from $61.4 million in Q3 2020, a decline of 62.1%[319]. - Net income attributable to Jackson Financial Inc. for Q3 2021 was $206.2 million, a significant recovery from a loss of $396.6 million in Q3 2020[315]. - Total revenues increased by $1,375 million to $1,486 million during the three months ended September 30, 2021, from $111 million during the same period in 2020[332]. Revenue Sources - Jackson Financial's revenues are derived from five primary sources, including fee income, net investment income, premiums, net realized gains, and other income[279]. - Fee income for the three months ended September 30, 2021, was $1,961.9 million, an increase of 17.7% from $1,666.5 million in 2020[330]. - Net investment income decreased to $852.0 million for the three months ended September 30, 2021, down from $881.4 million in 2020, reflecting a decline of approximately 3.3%[330]. Operational Segments - The company operates through three segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks, allowing for diversified revenue streams[278]. - Total institutional product sales for Q3 2021 were $43.4 million, a significant drop from $1.28 billion in Q3 2020[319]. Market and Economic Conditions - The demographic trend indicates that by 2030, 32% of the U.S. population will be aged 55 or older, creating significant demand for the company's products[301]. - The company is closely monitoring the impact of the COVID-19 pandemic, which has caused significant economic turmoil, affecting future business performance[299]. - The interest rate environment is expected to remain low, impacting yields on new investments and potentially increasing statutory reserves, which could adversely affect dividends[296]. - The company faces increased competition due to consolidation in the insurance and financial services industries, which may impact sales and distribution[303]. Reinsurance and Investment Agreements - The company reported a $1.2 billion ceding commission from a funds withheld coinsurance agreement with Athene Life Re Ltd. for reinsurance of fixed and fixed-index annuity product liabilities[271]. - Jackson Financial's investment agreement with Athene Life Re Ltd. involved a $500 million capital investment for a 9.9% voting interest, enhancing its financial position[272]. - A reinsurance agreement with Athene involved ceding a $27.6 billion portfolio of fixed and fixed index annuity liabilities, resulting in approximately $1.2 billion in ceding commissions[288]. Expenses and Costs - The company expects to incur approximately $75 million in one-time expenses related to the operational separation from Prudential, with $63 million incurred during the nine months ended September 30, 2021[289]. - The company anticipates annual recurring expenses of approximately $25 million to $30 million for operating as a stand-alone entity, primarily related to support services[289]. - Total benefits and expenses for the three months ended September 30, 2021, were $1,234.6 million, significantly higher than $643.0 million in 2020, marking an increase of approximately 92%[330]. Investment Performance - Total assets under management (AUM) decreased to $347,567.6 million as of September 30, 2021, from $361,646.3 million at the end of 2020, a reduction of about 3.9%[328]. - Total investments amounted to $74 billion as of September 30, 2021, down from $80 billion as of December 31, 2020[457]. - Available-for-sale debt securities decreased to $52,123 million as of September 30, 2021, from $59,075 million at the end of 2020, primarily due to a decrease in net unrealized gains[458]. Tax and Regulatory Environment - The company believes that changes in U.S. tax laws affecting tax-deferred advantages of annuities could materially decrease demand for its products[307]. - The SECURE Act is expected to create growth opportunities by making it easier for 401(k) programs to offer annuities as an investment option[306].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40274 Jackson Financial Inc. (Exact name of registrant as specified in its charter) Delaware 98-0486152 (State or other j ...