Jackson(US:JXN)2026-02-19 16:02Financial Data and Key Metrics Changes - Jackson Financial reported adjusted operating earnings of $455 million for Q4 2025, reflecting continued strength across spread-based products and a 12% growth in adjusted operating earnings for the full year [5][13] - The company achieved over $1 billion in free capital generation for the second consecutive year, with free cash flow totaling $838 million for the full year [6][36] - Adjusted operating earnings per share increased by 33% to $6.43, driven by strong spread income growth and a lower diluted share count [16][18] Business Line Data and Key Metrics Changes - Retail annuity sales reached nearly $20 billion for the full year, the highest level since 2019, with a record $2.3 billion in RILA sales for Q4, up 53% year-over-year [6][10] - The retail annuity segment delivered 27% growth over last year's fourth quarter, with RILA assets under management growing to over $20 billion [18][22] - Fixed index annuity sales contributed $812 million during the quarter, indicating strong momentum in the product lineup [19][22] Market Data and Key Metrics Changes - Total retail annuity account values increased by 7% to $269 billion at year-end 2025, supported by strong sales in RILA and fixed index annuities [7][10] - Variable annuity net outflows remained elevated, reflecting an aging policyholder base and market conditions, but were offset by strong investment performance generating over $28 billion [20][21] - The RBC ratio stood at 567%, indicating a strong capital position above the minimum target [7][41] Company Strategy and Development Direction - Jackson Financial closed a strategic partnership with TPG to support accelerated growth in its spread-based business, enhancing capital efficiency and product offerings [5][12] - The company aims to leverage its diversified product suite to meet various consumer needs, focusing on income, protection, growth, and legacy benefits [61] - Future growth targets include free capital generation of at least $1.2 billion for 2026 and a capital return target of $900 million to $1.1 billion [12][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a balanced approach to capital management, focusing on financial strength, growth, and capital return to shareholders [6][8] - The partnership with TPG is expected to enhance profitability and support the growth of the spread-based business, with a positive outlook for retail annuity sales [62][64] - Management anticipates that surrender activity will remain closely tied to equity market performance, with expectations for improved actual-to-expected results in 2026 [21][78] Other Important Information - The company returned over $862 million to common shareholders in 2025, exceeding its capital return target range [7][38] - Jackson's annual actuarial assumptions review resulted in a favorable impact on operating earnings, reflecting improved mortality trends [17][30] - The establishment of Hickory Re as a subsidiary is expected to contribute to future cash flows and enhance the capital profile of Brook Re [48][50] Q&A Session Summary Question: Can you provide more details on capital levels and tracking? - Management discussed the progress of Brook Re and its diversified liability profile, highlighting recent reinsurance transactions that enhance stability [47][48] Question: What is the expected impact of the TPG partnership on growth? - Management indicated that the partnership will support strong retail annuity sales and enhance product offerings, with expectations for growth in the coming years [56][62] Question: How will cash flow from Hickory Re be managed? - It was clarified that dividends from Hickory Re would flow up to Brook Re and then to the holding company, supporting ongoing capital return strategies [65][66]