Jackson(US:JXN)2023-11-09 17:04Financial Data and Key Metrics Changes - Net income for the third quarter totaled $2.8 billion, primarily due to gains on market risk benefits from higher interest rates [15][67] - Adjusted operating earnings were $3.80 per share, an increase from the second quarter of 2023, driven by fee income growth and lower corporate expenses [15][20] - Total adjusted capital increased by approximately $700 million to $4.5 billion, reflecting strong cash flows and positive variable annuity net guarantee results [70] Business Line Data and Key Metrics Changes - Retail annuity sales increased by 6% from the second quarter of 2023 to $3.3 billion, driven by momentum in RILA sales [15][24] - Enhanced RILA product sales exceeded $800 million in the third quarter, reaching record levels in September [16][68] - Sales of annuities without lifetime benefits increased to 48% of total retail sales, up from 41% in the same quarter last year [68] Market Data and Key Metrics Changes - Variable annuity account values increased by 3% for the year, offsetting the impact of net outflows [36] - The company reported strong net flows translating to over $800 million of non-variable annuity net flow in the third quarter of 2023 [68] Company Strategy and Development Direction - The company aims to maintain a strong capital position and has consistently reported estimated RBC ratios within or above the target range of 425% to 500% [13][70] - Jackson is focused on product innovation and digital marketing to enhance its RILA offerings and improve customer engagement [37][40] - The company is actively engaging with regulators to advocate for fair regulations that do not impede access to retirement solutions [18][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2023 capital return target of $450 million to $550 million, with year-to-date capital return totaling nearly $350 million [14][32] - The company is targeting early 2024 for a solution regarding cash surrender value floor issues, which is expected to enhance capital stability [35][51] - Management remains optimistic about the momentum towards strategic and operational goals, emphasizing long-term benefits over short-term impacts [40][78] Other Important Information - The board approved a fourth quarter common dividend of $0.62 per share, reflecting the company's commitment to returning capital to shareholders [13][32] - The company has repurchased common shares for eight consecutive quarters, with cumulative share repurchases representing 19% of common shares outstanding at the time of separation [12][32] Q&A Session Summary Question: What is the expected timing for the resolution of the Florida reserve situation? - Management indicated great progress year-to-date and targeted completion early in 2024, dependent on regulator approval [51][75] Question: Will the potential solution change the hedging program? - Management suggested that the solution could lead to changes in hedging positioning, focusing more on economic hedging rather than statutory adjustments [57][81] Question: How will the potential solution impact RBC targets? - Management noted that a solution mitigating cash surrender value floor issues could lead to a narrower RBC target range in the future [85][86] Question: What is the current trend in policyholder behavior for variable annuities? - Management observed that policyholder behavior has been largely consistent with assumptions, with a slight uptick in variable annuity surrenders due to equity market rebounds [6][95]