Jackson Financial's Growth Strategies for 2025: Annuity Sales Soar
Jackson Financial (JXN) announced notable advancements in its 2025 operations, highlighted by a surge in retail annuity sales, including registered index-linked annuities (RILA) and fixed index annuities. These achievements led to a record in free capital generation for the year. Additionally, Jackson forged a strategic partnership with TPG, involving a $650 million capital contribution and $500 million in common stock issuance at a 30% premium. This collaboration aims to bolster growth in Jackson’s spread-based businesses and captive reinsurance endeavors.
Jackson Financial's management reported positive trends in adjusted operating earnings and return on equity, attributed to diversification in product offerings and favorable mortality trends. The company announced a 13% increase in its quarterly dividend, affirming its commitment to capital return to shareholders. The establishment of Hickory Re, along with the strategic allocation of new business blocks to Brook Re, enhanced liability and capital diversification.
Financial Performance and Capital Generation
For 2025, Jackson's adjusted operating earnings surged nearly 12%, driven by stable fee income and increased spread earnings. This performance contributed to a 20% rise in adjusted operating earnings per share. However, net income was impacted by annual assumption reviews and net hedge results, highlighting vulnerabilities to market fluctuations and policyholder behavior changes.
Jackson achieved record-breaking sales figures, with retail annuity sales nearing $20 billion in 2025, the highest since 2019. This growth was supported by strong RILA and FIA sales, counteracting net outflows in the variable annuity sector. The total retail annuity account value rose by 7%, reaching $269 billion by year-end.
Capital Efficiency and Shareholder Returns
The company exceeded capital return targets, delivering over $860 million to shareholders, while maintaining a robust liquidity position with an RBC ratio of 567%. Free capital generation surpassed $1 billion for the second year, resulting in over $1 billion distribution from Jackson National Life to the holding company, marking a 27% increase from 2024.
Looking ahead, Jackson Financial aims to increase free capital generation to $1.2 billion for 2026. Capital return targets are also set to rise, aiming between $900 million to $1.1 billion, reflecting a 16% increase from 2025's returns. To enhance shareholder value, the board approved an increase in the quarterly dividend to $0.90 per share.
Strategic Initiatives for Growth
The RILA and FIA product lines, alongside new offerings such as Jackson Income Assurance, have expanded distribution reach and fortified advisor partnerships. Record sales in the fee-based advisory business reached $1.5 billion for 2025. The investment-only variable annuity segment significantly contributed to advisory sales.
In its partnership with TPG, and focus on capital efficiency, Jackson is well-positioned to sustain growth in spread product offerings. TPG’s investment expertise is anticipated to complement Jackson’s strategies, particularly enhancing the profitability of spread products within its portfolio.
Looking forward, Jackson Financial is poised to leverage its strategic initiatives for long-term growth and increase shareholder value. The company remains dedicated to product innovation, robust risk management, and sustainable financial performance to navigate future market dynamics.