Jackson Financial (NYSE: JXN ) is an annuity provider that was born from a spin-off of Prudential Financial. Earlier this year, I wrote a STRONG BUY article on the company. This article is intended to be aL/S Equity Research. Mostly micro and small caps. I use this platform to bounce ideas around and try to get different point of views. Contact me at theredkraken7@gmail.com, it's always nice to make new friends =)Analyst’s Disclosure: I/we have a beneficial long position in the shares of JXN either through ...

Jackson Financial (JXN) closed at $76.76 in the latest trading session, marking a +0.5% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.74% for the day. At the same time, the Dow added 0.05%, and the tech-heavy Nasdaq gained 1.26%.Heading into today, shares of the financial services company had lost 10.92% over the past month, lagging the Finance sector's loss of 3.44% and the S&P 500's loss of 4.77% in that time.Market participants will be closely following the fi ...

Jackson Financial (NYSE: JXN ) might be one of the most complex and misunderstood stocks I’ve looked at in a while. It offers a dividend yield north of 4%, trades at a single-digit earnings multiple, and has outperformed the S&P 500I am an investment professional with a background in both equity and real estate markets. I specialize in identifying long-only opportunities that offer safe and growing dividends, aiming to outperform the broader market on a risk-adjusted return basis. In addition to managing my ...

[Business Overview](index=9&type=section&id=Item%201.%20Business) [Company Overview](index=9&type=section&id=Overview) Jackson Financial Inc. is a U.S. financial services company focused on retirement savings and income solutions, primarily offering diverse annuities through an industry-leading distribution network, emphasizing differentiated products, efficient operations, and disciplined risk management, reporting significant sales growth and strong capital levels in fiscal year 2024 - Jackson Financial Inc. helps Americans with retirement savings and income by offering diverse annuities through an industry-leading distribution network[18](index=18&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) Selected Financial and Operating Measures (Year Ended Dec 31, in millions USD) | Measure | 2024 | 2023 | | :--- | :--- | :--- | | Total Sales | $19,849 | $13,898 | | Assets Under Management (AUM) | $324,718 | $315,838 | | Net income attributable to JFI common shareholders | $902 | $899 | | Adjusted Operating Earnings | $1,443 | $1,073 | | Capital Returned to Common Shareholders | $631 | $464 | | Jackson statutory risk-based capital ratio | 572% | 624% | - Total retail annuity sales **increased to $17.8 billion in 2024** from $12.8 billion in 2023[21](index=21&type=chunk) [Product Offerings by Segment](index=10&type=section&id=Our%20Product%20Offerings%20by%20Segment) The company operates through three main segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks, with Retail Annuities being the largest, driven by strong sales in Variable Annuities and significant RILA growth, while Institutional Products are issued opportunistically and Closed Life and Annuity Blocks consist of acquired, non-new-sale businesses Annuity Sales and Account Value by Type (in millions USD) | Annuity Type | 2024 Sales | 2024 Account Value | 2023 Sales | 2023 Account Value | | :--- | :--- | :--- | :--- | :--- | | Variable annuities | $10,561 | $236,057 | $9,540 | $227,777 | | RILA | $5,674 | $11,685 | $2,890 | $5,219 | | Fixed index annuities | $181 | $816 | $210 | $622 | | Fixed annuities | $1,433 | $2,515 | $193 | $1,218 | - As of December 31, 2024, **73% of total variable annuity account value** included a Guaranteed Minimum Withdrawal Benefit for Life (GMWB for Life) feature[30](index=30&type=chunk) - The Institutional Products segment reported **$2.0 billion in sales** and **$8.4 billion in account value** as of December 31, 2024[36](index=36&type=chunk) - The Closed Life and Annuity Blocks segment, comprising acquired policies and discontinued life insurance sales, held **$20.6 billion in total reserves** as of December 31, 2024[37](index=37&type=chunk)[38](index=38&type=chunk) [Distribution and Operations](index=13&type=section&id=Distribution%20and%20Operations) Jackson utilizes a multi-channel distribution network, including approximately 500 broker-dealers and over 1,700 RIAs, ranking 2 in U.S. variable annuity sales for the first nine months of 2024, supported by an efficient operating platform that administers 79% of policies in-house and a product design focused on risk management through investment-only options, GMWB emphasis, and reinsurance - The company distributes retail annuities through approximately **500 broker-dealer partners** with over 120,000 advisors and more than **1,700 RIAs**[43](index=43&type=chunk) - For the nine months ended September 30, 2024, Jackson ranked **2 in U.S. variable annuity sales** with a **12.3% market share**[42](index=42&type=chunk) - The company administers approximately **79% of in-force policies** on its in-house platform, contributing to a low combined statutory operating expense-to-asset ratio of **29 basis points for 2024**[22](index=22&type=chunk)[44](index=44&type=chunk) - Product design strategy no longer includes offering GMIBs, instead utilizing third-party reinsurance to mitigate associated risks[47](index=47&type=chunk) [Risk Management](index=15&type=section&id=Risk%20Management) The company employs a comprehensive Enterprise Risk Management Framework, organized around six core components and a three-lines model for governance, managing key financial risks like market, counterparty, and asset-liability through dynamic hedging, third-party reinsurance, and disciplined pricing, with most in-force fixed, fixed index, and GMIB variable annuity businesses ceded to unaffiliated reinsurers - The risk management framework employs a three-lines model: Risk Ownership (first line), Risk Oversight (second line), and Independent Assurance (third line)[51](index=51&type=chunk)[53](index=53&type=chunk) - The hedging program aims to protect against adverse market conditions, safeguard statutory capital, and stabilize distributable earnings[62](index=62&type=chunk) - The company utilizes third-party reinsurance to mitigate longevity and mortality risks, ceding the majority of its in-force fixed annuity, fixed index annuity, and legacy GMIB variable annuity businesses to unaffiliated reinsurers[63](index=63&type=chunk)[64](index=64&type=chunk) [Regulation](index=19&type=section&id=Regulation) Jackson Financial is subject to extensive state and federal regulation, with state insurance departments overseeing solvency and market conduct, federal agencies like SEC, FINRA, and DOL impacting product sales and investment advice, and evolving rules around cybersecurity and AI also requiring navigation - The company's primary insurance subsidiary, Jackson National Life, is regulated by the Michigan Department of Insurance and Financial Services (DIFS)[69](index=69&type=chunk) - As of December 31, 2024, the **RBC ratios** for Jackson and its New York subsidiary substantially exceeded minimum required levels[78](index=78&type=chunk) - The NAIC's revised Annuity Suitability Model Regulation, imposing a "best interest" standard, has been adopted by **48 states** as of January 1, 2025[74](index=74&type=chunk) - The DOL's 2024 Fiduciary Advice Rule, redefining "fiduciary" investment advice for ERISA plans and IRAs, is currently stayed pending litigation but could impact compensation and product offerings[89](index=89&type=chunk)[91](index=91&type=chunk) - The company is subject to various cybersecurity regulations, including the NYSDFS Cybersecurity Regulation and the NAIC Insurance Data Security Model Law, adopted in **26 states** including Michigan[96](index=96&type=chunk)[97](index=97&type=chunk) [Human Capital Resources](index=29&type=section&id=Human%20Capital%20Resources) As of December 31, 2024, Jackson employed approximately 3,970 associates, focusing on internal talent development, competitive compensation, comprehensive benefits, and associate well-being, highlighted by a senior management team with over 20 years average tenure and a robust mentoring program - The company employed approximately **3,970 associates** as of December 31, 2024, including 3,060 full-time and 910 part-time[119](index=119&type=chunk) - The senior management team boasts an average tenure of **over 20 years** with the company[120](index=120&type=chunk) - In 2024, the company's mentoring program engaged approximately **80 mentors** and over **230 mentees**, reporting over **1,500 hours of mentoring**[121](index=121&type=chunk)[122](index=122&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) [Summary of Key Risks](index=34&type=section&id=Summary%20of%20Key%20Risks) The company faces significant risks from global financial market volatility, including equity market movements and interest rate fluctuations, impacting fee income, guaranteed benefit liabilities, and hedging effectiveness, while financial strength ratings are critical, and dependence on subsidiary dividends, operational risks, complex regulations, and cybersecurity threats also pose challenges - Equity market declines can negatively impact fee-based income, proportional to AUM, and increase liabilities for guaranteed benefits[137](index=137&type=chunk)[138](index=138&type=chunk) - Interest rate movements pose risks, as falling rates increase the present value of future guarantees and rising rates create disintermediation risk[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - As a holding company, Jackson Financial's ability to meet obligations depends on dividends from its insurance subsidiaries, which are restricted by state insurance laws and regulations[153](index=153&type=chunk)[154](index=154&type=chunk) - The company faces significant counterparty credit risk from derivatives used for hedging and reinsurance agreements, with a large concentration of risk with Athene for its fixed and fixed index annuity blocks[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - Changes in U.S. federal income tax laws, including the elimination of tax deferral for annuities, could adversely affect product sales, and the new **15% Corporate Alternative Minimum Tax (CAMT)** could also materially affect results[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - A decrease in the **RBC ratio** of insurance subsidiaries could trigger increased regulatory scrutiny, corrective measures, and rating downgrades[180](index=180&type=chunk)[181](index=181&type=chunk) [Cybersecurity](index=48&type=section&id=Item%201C.%20Cybersecurity) [Cybersecurity Risk Management and Governance](index=48&type=section&id=Cybersecurity%20Risk%20Management%20and%20Governance) Jackson's enterprise-wide cybersecurity risk management framework aligns with industry standards and regulations, featuring a 24/7 internal Security Operations Center, regular threat intelligence reviews, and external penetration testing, with governance provided by the Board's Finance and Risk Committee and a third-party vendor management program, reporting no material cybersecurity events for the period - The company's cybersecurity program aligns with the NIST Cyber Security Framework and regulations like New York's DFS Cybersecurity Requirements[220](index=220&type=chunk) - The Board's Finance and Risk Committee provides oversight, meeting at least annually with the CISO for in-depth reviews of cybersecurity risks[224](index=224&type=chunk) - The company's Information Security and Privacy Team comprises **over 70 full-time positions**, with a significant portion holding relevant industry certifications[227](index=227&type=chunk) - The company is not aware of any material cybersecurity events likely to have a material effect on its business, operations, or financial condition[223](index=223&type=chunk) [Market for Common Equity and Shareholder Matters](index=51&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) [Share Repurchases and Dividends](index=51&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) In 2024, Jackson Financial continued its capital return program, with the Board authorizing a $750 million increase to the share repurchase program on August 1, 2024, resulting in 974,324 shares repurchased during Q4 2024, and $568 million remaining under authorization as of February 18, 2025 Share Repurchases (Q4 2024) | Period | Total Shares Purchased (Program) | Average Price Paid Per Share (USD) | | :--- | :--- | :--- | | Oct 2024 | 469,244 | $98.05 | | Nov 2024 | 261,631 | $103.14 | | Dec 2024 | 243,449 | $93.64 | | **Q4 Total** | **974,324** | **-** | - On August 1, 2024, the Board of Directors authorized a **$750 million increase** to the share repurchase program, with **$568 million of authorization remaining** as of February 18, 2025[235](index=235&type=chunk)[362](index=362&type=chunk) [Management's Discussion and Analysis (MD&A)](index=53&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Executive Summary](index=53&type=section&id=Executive%20Summary) Jackson's 2024 performance featured strong capital returns, significant free capital generation exceeding $1 billion, and the strategic establishment of Brooke Re, a captive reinsurer, to optimize hedging and stabilize results, despite a Q4 2024 annual actuarial review resulting in a $445 million pretax income loss - In 2024, the company returned **$631 million to common shareholders**, comprising **$216 million in dividends** and **$415 million in share repurchases**[249](index=249&type=chunk) - Free capital generation **exceeded $1 billion in 2024**, with a target to exceed $1 billion again in 2025 under normal market conditions[249](index=249&type=chunk) - In Q1 2024, Jackson established Brooke Re, a captive reinsurer, to cede liabilities for variable annuity guaranteed benefits, designed to optimize hedging, stabilize capital, and produce more predictable results[249](index=249&type=chunk)[250](index=250&type=chunk)[252](index=252&type=chunk) - The 2024 annual actuarial assumption review resulted in a pretax income impact of **$(445) million**, primarily from updates to market risk benefit (MRB) reserves[253](index=253&type=chunk)[254](index=254&type=chunk) [Key Operating Measures](index=56&type=section&id=Key%20Operating%20Measures) In 2024, total sales grew to $19.8 billion from $13.9 billion in 2023, driven by strong RILA and fixed annuity sales, though net outflows increased to $(11.7) billion from $(6.3) billion due to higher variable annuity surrenders, partially offset by positive market performance that increased total AUM to $324.7 billion and retail annuity account value to $251.7 billion Sales by Product (Years Ended Dec 31, in millions USD) | Product | 2024 | 2023 | | :--- | :--- | :--- | | Variable annuities | $10,561 | $9,540 | | RILA | $5,674 | $2,890 | | Fixed Annuities | $1,433 | $193 | | **Total Retail Annuity Sales** | **$17,849** | **$12,833** | | **Total Institutional Product Sales** | **$2,000** | **$1,065** | | **Total Sales** | **$19,849** | **$13,898** | - Total retail annuity net flows were **$(11.7) billion in 2024**, a larger outflow compared to $(6.3) billion in 2023, driven by increased variable annuity surrenders, partially offset by strong RILA and fixed annuity sales[263](index=263&type=chunk) - Total Assets Under Management (AUM) **increased to $324.7 billion** at year-end 2024 from $315.8 billion at year-end 2023, primarily due to positive equity market returns[267](index=267&type=chunk) [Consolidated Results of Operations](index=67&type=section&id=Consolidated%20Results%20of%20Operations) For the year ended December 31, 2024, pretax income increased to $1.022 billion from $958 million in 2023, driven by a $403 million rise in fee income and a $153 million decrease in policy benefits, largely offset by a $276 million increase in operating costs and a $199 million decrease in net gains on derivatives and investments Consolidated Income Statement Highlights (Years Ended Dec 31, in millions USD) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues | $3,271 | $3,083 | | Total benefits and expenses | $2,249 | $2,125 | | **Pretax income (loss)** | **$1,022** | **$958** | | Net income (loss) attributable to JFI common shareholders | $902 | $899 | - The increase in pretax income was primarily due to a **$403 million increase in fee income** and a **$153 million decrease in policy benefits**[301](index=301&type=chunk) - The gains were partially offset by a **$276 million increase in operating costs** and a **$199 million decrease in total net gains on derivatives and investments**[301](index=301&type=chunk) [Segment Results of Operations](index=70&type=section&id=Segment%20Results%20of%20Operations) For 2024, the Retail Annuities segment saw pretax adjusted operating earnings increase to $1.86 billion, Institutional Products to $96 million, and Closed Life and Annuity Blocks narrowed its loss to $9 million, while Corporate and Other reported a larger loss of $264 million, primarily due to lower net investment income Pretax Adjusted Operating Earnings by Segment (Years Ended Dec 31, in millions USD) | Segment | 2024 | 2023 | | :--- | :--- | :--- | | Retail Annuities | $1,855 | $1,364 | | Institutional Products | $96 | $69 | | Closed Life and Annuity Blocks | $(9) | $(95) | | Corporate and Other | $(264) | $(173) | | **Total Pretax Adjusted Operating Earnings** | **$1,678** | **$1,165** | - Retail Annuities earnings increased by **$491 million**, primarily due to a **$424 million increase in fee income** and a **$301 million increase in spread income**[307](index=307&type=chunk)[309](index=309&type=chunk) - Closed Life and Annuity Blocks earnings improved by **$86 million**, mainly due to a **$70 million decrease in policy benefits** from actuarial updates and improved mortality[315](index=315&type=chunk) [Investments](index=76&type=section&id=Investments) Jackson's investment strategy focuses on a diversified, largely investment-grade fixed income portfolio, totaling $61.0 billion as of December 31, 2024, with 93% of debt securities rated investment grade and the commercial mortgage loan portfolio diversified across property types like apartments, warehouses, and retail Investment Portfolio Composition (as of Dec 31, in millions USD) | Investment Type | 2024 Total Value | 2023 Total Value | | :--- | :--- | :--- | | Debt Securities (Fair Value) | $43,335 | $42,643 | | Mortgage loans (Carrying Value) | $9,911 | $10,563 | | Other invested assets | $2,864 | $2,466 | | **Total Investments (Excluding Policy Loans, Derivatives)** | **$56,110** | **$55,672** | - As of December 31, 2024, **93.0% of the debt securities portfolio** was rated investment grade (BBB or higher), consistent with the prior year[550](index=550&type=chunk) - The commercial mortgage loan portfolio's largest exposures by property type at year-end 2024 were **Apartment (28%)**, **Warehouse (24%)**, and **Retail (19%)**[331](index=331&type=chunk) - The allowance for credit losses on mortgage loans **decreased to $121 million** at year-end 2024 from $165 million at year-end 2023, primarily due to changes in expected credit losses in the office sector[332](index=332&type=chunk) [Policy and Contract Liabilities](index=83&type=section&id=Policy%20and%20Contract%20Liabilities) Total policy and contract liabilities increased to $291.9 billion as of December 31, 2024, with 79% backed by separate account assets, primarily for variable annuities, and the 2024 annual actuarial assumption review resulting in a $445 million pretax loss, mainly due to a $434 million increase in variable annuity Market Risk Benefit (MRB) reserves from updated withdrawal utilization assumptions Policy and Contract Liabilities Breakdown (as of Dec 31, 2024, in billions USD) | Liability Type | Amount | | :--- | :--- | | Separate Accounts | $229.1 | | Other contract holder funds | $58.1 | | Reserves for future policy benefits | $9.7 | | Market Risk Benefits (Net Asset) | $(5.1) | | **Total** | **$291.9** | - The 2024 annual actuarial assumption review resulted in a pretax income loss of **$445 million**, including a **$434 million loss on variable annuity MRB reserves** primarily due to updated assumptions for withdrawal utilization on GMWB policies[254](index=254&type=chunk)[345](index=345&type=chunk) - As of December 31, 2024, **94% of fixed annuity and fixed-index annuity account values** had crediting rates at their guaranteed minimum[341](index=341&type=chunk) [Liquidity and Capital Resources](index=86&type=section&id=Liquidity%20and%20Capital%20Resources) Jackson maintains strong liquidity and capital, with its primary insurance subsidiary's statutory RBC ratio at 572% at year-end 2024, well above regulatory requirements, and the holding company relying on subsidiary dividends, including extraordinary ones related to Brooke Re's formation, supported by a $1.0 billion undrawn revolving credit facility and stable financial strength ratings - Jackson's primary insurance subsidiary reported a statutory risk-based capital (RBC) ratio of **572%** as of December 31, 2024, compared to 624% at year-end 2023[358](index=358&type=chunk) - The holding company maintains a minimum liquidity target of **$250 million**, sufficient to cover two years of fixed net expenses[359](index=359&type=chunk) - In 2024, Jackson's subsidiaries paid **$830 million in extraordinary dividends** to Brooke Life, which subsequently upstreamed **$785 million to JFI**[843](index=843&type=chunk)[844](index=844&type=chunk) - The company holds a **$1.0 billion revolving credit facility** expiring in 2028, which remained undrawn as of year-end 2024[380](index=380&type=chunk) - Financial strength ratings from major agencies (A.M. Best, Fitch, Moody's, S&P) were all stable, with ratings of **'A' or 'A3'**[389](index=389&type=chunk) [Critical Accounting Estimates](index=93&type=section&id=Critical%20Accounting%20Estimates) Management identifies critical accounting estimates including the valuation of reserves for future policy benefits based on mortality, persistency, and discount rates, the fair value of Market Risk Benefits (MRBs) sensitive to policyholder behavior and capital market inputs, income taxes (especially deferred tax assets and CAMT), reinsurance accounting, and the valuation and impairment of investments, particularly illiquid assets - Reserves for future policy benefits are based on best-estimate assumptions for mortality, persistency, and discount rates, which undergo annual review[396](index=396&type=chunk)[398](index=398&type=chunk) - The fair value of Market Risk Benefits (MRBs) is calculated using internal models with significant unobservable inputs, including policyholder behavior (lapse, utilization rates) and capital market assumptions (volatility, non-performance risk)[404](index=404&type=chunk)[405](index=405&type=chunk)[644](index=644&type=chunk) - The determination of the valuation allowance for deferred tax assets requires significant judgment regarding future taxable income[413](index=413&type=chunk)[414](index=414&type=chunk) - Investment valuation, particularly for assets without quoted market prices (Level 3), involves considerable uncertainty and judgment regarding economic conditions, credit risk, and liquidity[421](index=421&type=chunk)[422](index=422&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=101&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) [Market Risk Exposures and Management](index=101&type=section&id=Market%20Risk%20Exposures%20and%20Management) Jackson's primary market risks stem from interest rate and equity price movements, impacting its fixed-income portfolio, derivatives, and annuity liabilities, managed through product design, ALM, and a comprehensive hedging program that protects economic value and statutory capital but can lead to U.S. GAAP net income volatility, with sensitivity analysis showing significant impacts from interest rate and equity market changes - The company's hedging program seeks to protect economic value and statutory capital but does not directly hedge for U.S. GAAP liability movements, which can result in net income volatility[455](index=455&type=chunk)[456](index=456&type=chunk) Interest Rate Sensitivity Analysis (50 bps parallel shift, as of Dec 31, 2024, in millions USD) | Item | Fair Value | Impact of +50 bps | Impact of -50 bps | | :--- | :--- | :--- | :--- | | Fixed Rate Debt Securities | $30,236 | $(857) | $924 | | Market risk benefits | $(4,939) | $(1,728) | $2,001 | Equity Market Sensitivity Analysis (10% price change, as of Dec 31, 2024, in millions USD) | Item | Fair Value | Impact of +10% | Impact of -10% | | :--- | :--- | :--- | :--- | | Equity Securities & LPs | $1,814 | $(181) | $181 | | Market risk benefits | $(4,939) | $(1,722) | $2,187 | [Financial Statements and Supplementary Data](index=108&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) [Consolidated Financial Statements](index=112&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for Jackson Financial Inc. show total assets of $338.5 billion and total equity of $10.0 billion as of December 31, 2024, with net income attributable to common shareholders of $902 million, or $11.74 per diluted share, reflecting the company's significant investment portfolio, policy liabilities, and hedging activities Consolidated Balance Sheet Highlights (as of Dec 31, in millions USD) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Total Investments | $61,007 | $60,855 | | Separate account assets | $229,143 | $219,656 | | **Total assets** | **$338,450** | **$330,255** | | Total liabilities | $328,468 | $319,921 | | **Total equity** | **$9,982** | **$10,334** | Consolidated Income Statement Highlights (Year Ended Dec 31, in millions USD) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues | $3,271 | $3,083 | | Pretax income (loss) | $1,022 | $958 | | **Net income attributable to JFI common shareholders** | **$902** | **$899** | | **Diluted EPS** | **$11.74** | **$10.76** | Consolidated Cash Flow Highlights (Year Ended Dec 31, in millions USD) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,793 | $5,310 | | Net cash used in investing activities | $(7,090) | $(592) | | Net cash provided by (used in) financing activities | $2,373 | $(6,328) | [Notes to Consolidated Financial Statements](index=124&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, highlighting the Q1 2024 establishment of Brooke Re for variable annuity risk management, a significant investment in investment-grade debt, a major funds-withheld reinsurance agreement with Athene, the impact of market conditions on Market Risk Benefits (MRBs), and active capital management through dividends, buybacks, and debt maturities - In Q1 2024, Jackson established Brooke Re, a captive reinsurer, to which it ceded liabilities for variable annuity guaranteed benefits to optimize hedging and stabilize capital[510](index=510&type=chunk) - The company maintains a significant funds-withheld coinsurance agreement with Athene, ceding a large block of fixed and fixed-index annuity liabilities, with **$13.1 billion in assets held as collateral** as of December 31, 2024[707](index=707&type=chunk)[708](index=708&type=chunk) - The net Market Risk Benefit (MRB) position for variable annuities was a net asset of **$5.2 billion** at year-end 2024, an improvement from a net asset of $2.0 billion at year-end 2023, primarily due to favorable market performance[779](index=779&type=chunk) - In March 2023, the company issued **$533 million (net proceeds)** of Series A Preferred Stock[851](index=851&type=chunk) - In 2024, the company repurchased **5.8 million common shares for $415 million** and paid common dividends of **$2.80 per share**[859](index=859&type=chunk)[861](index=861&type=chunk) [Controls and Procedures](index=231&type=section&id=Item%209A.%20Controls%20and%20Procedures) [Management's Report on Internal Control Over Financial Reporting](index=231&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) Management concluded that the company's internal control over financial reporting was effective as of December 31, 2024, based on the COSO framework, with the independent registered public accounting firm, KPMG LLP, also issuing an unqualified audit report on its effectiveness, and no material changes occurred during Q4 2024 - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2024[903](index=903&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, these controls[905](index=905&type=chunk)

Jackson Financial Inc. Fourth Quarter and Full Year 2024 Financial Results For Presentation on February 20, 2025 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 historical fact is a forward-looking statement. Forward-looking statements can also be identified by the us ...

Financial Data and Key Metrics Changes - Jackson Financial reported net income exceeding $900 million and adjusted operating earnings of $1.4 billion for 2024, largely driven by significant growth in the retail annuity segment [9][10] - The company's retail annuity sales reached $18 billion, marking a 39% year-over-year increase [10] - The RBC ratio remained stable at an estimated 572%, comfortably above the target, allowing for significant capital return to shareholders [11][22] Business Line Data and Key Metrics Changes - Retail annuities segment saw a 57% increase in adjusted operating earnings compared to the fourth quarter of the previous year, supported by strong equity markets and positive trends in spread products [45] - RILA (Registered Index-Linked Annuities) sales contributed significantly, with fourth quarter sales of $1.5 billion, and total traditional variable annuity sales increased by 11% in 2024 [39][16] - Fixed and fixed index annuity sales reached $397 million in the fourth quarter, indicating healthy volumes in spread product sales [41] Market Data and Key Metrics Changes - The advisory market saw Jackson reach $1 billion in advisory sales in 2024, reflecting growing interest in retirement solutions [17] - LIMRA estimates suggest that 2025 industry sales will remain strong, with traditional variable annuity sales holding steady and RILA sales projected to slightly exceed 2024 levels [18] Company Strategy and Development Direction - Jackson Financial aims to enhance product innovation, distribution expansion, and service excellence as key differentiators in the market [15] - The company plans to increase total capital return targets for 2025 to $700 to $800 million, representing a growth of over 10% at the low end and more than 25% at the high end compared to 2024 [22] - The focus remains on maintaining a balanced long-term view of capital management while supporting new business and returning capital to shareholders [13][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to build on the momentum from 2024, emphasizing a commitment to serving financial professionals and their clients [61] - The outlook for 2025 includes expectations for continued strong capital generation and free cash flow, with a target of exceeding $1 billion in free capital generation [53][55] Other Important Information - The company completed its annual actuarial assumptions review, which resulted in an unfavorable earnings impact primarily due to higher mortality rates [30][76] - Jackson's adjusted book value attributable to common shareholders increased by 10% to $11.2 billion, driven by strong operating performance and share repurchase activity [27] Q&A Session Summary Question: Can you provide more details on Brook Re's capital increase? - Management explained that the $200 million increase in Brook Re's capital was influenced by various factors, including the stability of the balance sheet and the performance of the hedging program [65][72] Question: What led to the decision to keep the existing lapse assumption? - Management clarified that the decision was based on a comprehensive review of historical data and current market conditions, indicating that no changes were deemed necessary at this time [81][90] Question: What is the long-term outlook for PPM? - Management views PPM as a core part of the business, with ongoing efforts to increase distribution to institutional investors and enhance capabilities [98][103] Question: How does the company plan to manage excess capital? - Management emphasized a focus on earning capital, paying it up to the holding company, and returning it to shareholders, while maintaining a buffer above regulatory requirements [92][93]

Core Insights - Jackson Financial (JXN) is projected to announce quarterly earnings of $4.72 per share, reflecting an increase of 86.6% year over year, with revenues expected to reach $1.8 billion, a 102.1% increase from the same quarter last year [1]. Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been adjusted upward by 0.2%, indicating a reassessment by covering analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts estimate 'Revenues- Net investment income' to be $484.42 million, indicating a year-over-year decrease of 35.8% [5]. - 'Revenues- Other income' is projected to reach $15.50 million, reflecting a 3.3% increase from the prior-year quarter [5]. - 'Revenues- Premium' is expected to be $39.76 million, showing a year-over-year increase of 4.6% [5]. - 'Revenues- Fee income' is forecasted at $1.26 billion, indicating a decrease of 34.6% from the prior-year quarter [6]. Adjusted Earnings Before Tax - 'Adjusted earnings before tax- Retail Annuities' is estimated to be $447.38 million, up from $326 million in the same quarter last year [6]. - 'Adjusted earnings before tax- Institutional Products' is projected at $24.22 million, compared to $22 million reported in the same quarter last year [7]. Stock Performance - Jackson Financial shares have shown a return of -0.6% over the past month, while the Zacks S&P 500 composite has increased by 3.9% [7]. - With a Zacks Rank 2 (Buy), JXN is expected to outperform the overall market in the near future [7].

Group 1 - Jackson Financial (JXN) closed at $92.93, reflecting a -0.36% change from the previous day, underperforming the S&P 500 which gained 0.67% [1] - Over the past month, shares of Jackson Financial have appreciated by 10.31%, outperforming the Finance sector's gain of 5.69% and the S&P 500's gain of 2.07% [1] Group 2 - Jackson Financial is set to announce its earnings on February 19, 2025, with an expected EPS of $4.72, representing an increase of 86.56% from the prior-year quarter [2] - The Zacks Consensus Estimate projects net sales of $1.8 billion, up 102.05% from the year-ago period [2] Group 3 - Recent changes to analyst estimates for Jackson Financial indicate evolving short-term business trends, with positive revisions reflecting analysts' confidence in the company's performance [3] - The Zacks Rank system, which integrates estimate changes, currently ranks Jackson Financial at 2 (Buy) [5] Group 4 - Jackson Financial has a Forward P/E ratio of 4.54, indicating a discount compared to the industry average Forward P/E of 9.77 [6] - The Insurance - Life Insurance industry, part of the Finance sector, has a Zacks Industry Rank of 165, placing it within the bottom 35% of over 250 industries [6]

Company Performance - Jackson Financial (JXN) closed at $91.09, with a +0.33% change from the previous day's closing price, underperforming the S&P 500's daily gain of 0.72% [1] - Over the past month, Jackson Financial's shares increased by 0.93%, lagging behind the Finance sector's gain of 3.24% and the S&P 500's gain of 1.02% [1] Upcoming Earnings - The earnings report for Jackson Financial is expected on February 19, 2025, with an anticipated EPS of $4.72, representing an 86.56% increase compared to the same quarter last year [2] - Revenue is projected to be $1.8 billion, reflecting a 102.05% rise from the equivalent quarter last year [2] Analyst Estimates - Recent modifications to analyst estimates for Jackson Financial indicate changing near-term business trends, with positive revisions seen as a favorable sign for the company's outlook [3] - The Zacks Rank system, which incorporates estimate changes, provides actionable ratings for stocks, with Jackson Financial currently holding a Zacks Rank of 2 (Buy) [5] Valuation Metrics - Jackson Financial has a Forward P/E ratio of 4.42, which is a discount compared to the industry average Forward P/E of 9.84 [6] - The Insurance - Life Insurance industry, part of the Finance sector, has a Zacks Industry Rank of 90, placing it in the top 36% of over 250 industries [6]

Group 1 - Jackson Financial (NYSE: JXN) is highlighted as a company with strong current valuations, making it an attractive investment opportunity in the long/short equity research space [1] - The company is primarily focused on micro and small-cap stocks, indicating a niche investment strategy [1] Group 2 - The article emphasizes the author's beneficial long position in JXN shares, suggesting confidence in the company's future performance [2] - The analysis is presented as an independent opinion, with no external compensation influencing the views expressed [2]