Jackson Financial Reports Record Annuity Sales and Capital Growth in 2025
Jackson Financial Inc. (NYSE:JXN) reported substantial achievements for 2025, including record annuity sales and significant capital returns. The company generated over $1 billion in free capital for a second consecutive year, supporting growth and capital distribution initiatives.
The partnership with TPG aims to enhance Jackson's spread-based business, increasing operational flexibility. Retail annuity sales soared to nearly $20 billion, the highest since 2019, with notable growth in Registered Index-Linked Annuities (RILA) and fixed index annuities.
Financial Challenges and Actuarial Adjustments
Jackson increased its quarterly dividend by nearly 13%, reflecting strong capital management. Despite this, the company faced GAAP pretax losses due to annual actuarial reviews and net hedge results. Variable annuity net outflows persisted, driven by an aging demographic and older sales vintages, compounded by market volatility and policy surrenders.
The annual actuarial assumptions review led to a $360 million negative impact from policyholder behavior updates. Although sales remain strong, the company anticipates several years to achieve net flow equilibrium amidst ongoing variable annuity outflows.
Brooke Re and Hickory Re: Diversifying Liabilities
Don Cummings, CFO, noted the establishment of Brooke Re, allowing diversification of liabilities and capital profile by reinsuring $1.3 billion in payout annuity liabilities. This strategy reduces equity market risks. Hickory Re has also been created, with $1.2 billion in assets and liabilities ceded, aimed at generating free cash flow gradually.
Early second-quarter volatility and unexpected surrender levels impacted Brooke Re's capital generation, but the entity is expected to meet its objectives long term. CEO Laura Prieskorn emphasized the TPG partnership's role in driving demand for diverse annuity products, predicting net flow equilibrium may take years.
CFO Cummings stated that Hickory Re's dividend capabilities will support the holding company’s growth and potential shareholder returns. With confidence in the robust balance sheet and recent transactions, future capital contributions are expected to decrease due to revised lapse assumptions. Stakeholders are encouraged to review the complete earnings call transcript for more detailed insights.