Jackson Financial's Strategic Growth in Annuities and Capital Management
Jackson Financial Inc. has announced pivotal strategies to enhance its growth within the spread-based annuity industry while solidifying capital stability. During a recent investor call, CEO Laura Prieskorn revealed a strategic alliance with alternative asset manager TPG and the creation of Hickory Brook Reinsurance Company (Hickory Re), a new Michigan-based captive reinsurer.
Expansion of Product Offerings
Prieskorn highlighted that Jackson is diversifying its product catalog beyond traditional variable annuities by developing registered index-linked annuities (RILAs) and other spread-based options. Since its public transition, Jackson has refined its RILA and fixed index annuity (FIA) products. Plans for 2024 include expanding its multi-year guaranteed annuity (MYGA) offerings, followed by launching a new RILA and an updated FIA featuring guaranteed minimum withdrawal in 2025. These strategies aim to boost Jackson's asset management prowess and competitive edge in spread-based products.
Strategic Alliance with TPG
The alliance with TPG marks Jackson’s first partnership with an alternative asset manager. This collaboration is set to enrich investment strategies, leveraging TPG's expertise alongside Jackson's subsidiary, PPM America, especially in private asset classes like investment-grade asset-based finance and direct lending. CFO Don Cummings noted the TPG transaction is expected to close in the first quarter of 2026, pending regulatory compliance requirements.
Capital Efficiency through Hickory Re
Jackson's establishment of Hickory Re aims to support capital efficiency for fixed and FIA products. Funded with $650 million—$500 million from TPG and $150 million from Jackson's reserves—Hickory Re has begun reinsuring existing blocks of fixed and FIA products through a flow reinsurance structure. This approach optimizes capital efficiency and enhances returns by using economic reserving similar to offshore underwriting practices.
Future Growth Projections
Cummings emphasized that the new initiatives, including the TPG partnership and Hickory Re launch, are projected to drive $10 billion to $15 billion in cumulative fixed and FIA sales. Jackson anticipates a positive impact on adjusted operating earnings per share by 2027. Although 2026 specifics are not yet finalized, growth and capital return to shareholders could increase by approximately 20% compared to 2025, reaching around $1 billion, including share repurchases and dividends.
In a related update, Cummings reported on an annual actuarial assumption review resulting in a $350 million reserve increase for Brooke Re due to adjustments in policyholder behavior assumptions. However, the impact on Jackson's consolidated net income was less severe than in 2024. Moreover, updates to mortality assumptions and model enhancements offset some reserve increases. Brooke Re remains well-capitalized in line with regulatory standards, requiring no additional capital under current conditions.
Jackson Financial, trading on the NYSE under the ticker JXN, is headquartered in Lansing, Michigan, and predominantly operates through Jackson National Life Insurance Company, offering retirement products like fixed, variable, and indexed annuities. Publicly traded since May 2022, further details on these strategies will be outlined in Jackson’s fourth-quarter earnings release, expected in February.