Jackson Financial Exceeds Financial Targets with Strategic Partnerships

Jackson Financial has exceeded its financial targets for 2025, set new sales benchmarks, and updated its 2026 financial outlook in a recent earnings report. CEO Laura Prieskorn announced a strategic partnership with TPG to enhance the company's spread-based business and improve capital efficiency, especially in fixed and fixed index annuities.

CFO Don Cummings highlighted the financial advantages of the TPG transaction, which generated $650 million in value and involved issuing common stock. This transaction includes growth capital allocation to Hickory Re, Jackson’s captive reinsurer, enhancing capital flexibility at Jackson National Life Insurance Company by reallocating resources from spread-product development.

In the fourth quarter, Jackson diversified Brooke Re’s liability and capital profile by reinsuring $1.3 billion in payout annuity liabilities, and establishing Hickory Re, which now holds $1.2 billion in annuity liabilities. Prieskorn noted that Jackson had an exceptional year, surpassing financial goals and achieving sales growth driven by stable fee income and higher investment spread earnings, which supported a rise in earnings per share.

Cummings reported $455 million in fourth-quarter adjusted operating earnings, ending the quarter with over $650 million in holding company liquidity and an RBC ratio of 567%. The company's sales momentum was partly due to increased registered index-linked annuities and fixed annuities, with full-year retail annuity sales approaching $20 billion.

Record RILA sales reached $2.3 billion in the fourth quarter, with annual sales up 22%, and a 14% quarterly increase to $20 billion. The company generated $28 billion in separate account investment performance throughout the year, counterbalancing outflows from variable annuities.

Operational challenges were evident in a GAAP pre-tax loss of $376 million, linked to equity index implied volatility and increased reserves from adjusted policyholder behavior assumptions. Despite this, the adjusted framework positively impacted operating earnings due to favorable mortality trends.

Looking ahead, Prieskorn expects the TPG partnership and captive strategy to enhance capital generation, with a 2026 goal of $1.2 billion. The company aims for $900 million to $1.1 billion in capital returns by 2026 and has increased its quarterly dividend to $0.90 per share. Management underscored efforts to offset variable annuity outflows with new sales and noted market performance as a critical factor. Updates on progress toward 2026 targets are scheduled post-first quarter. Jackson Financial, headquartered in Lansing, Michigan, operates through Jackson National Life Insurance Company, specializing in retirement products, and trades on the NYSE under JXN since May 2022.