Jackson Financial Q2 2025 Earnings: RILA Sales Fuel Growth and Capital Strength
Jackson Financial delivered a solid second-quarter performance for 2025, meeting Wall Street revenue expectations with $1.75 billion, marking a 1.4% year-over-year increase. The company exceeded non-GAAP earnings per share estimates by 5%, reporting $4.87 compared to analysts' expectations of $4.64. This performance reflects steady growth in its annuity business and effective capital management strategies.
A key driver behind the quarter's results was the Registered Index-Linked Annuity (RILA) segment, which now represents nearly one-third of total Retail Annuity sales. The segment saw account balances grow by 80% year-over-year, supported by innovative product launches like Market Link Pro III, which combines NASDAQ 100 exposure with principal protection features. Variable annuity net outflows improved, declining 27% year-over-year, indicating enhanced retention and sales diversification.
Jackson's strategic asset allocation towards higher-yielding classes such as emerging markets, residential mortgages, and investment-grade structured securities increased spread income, balancing earnings amidst fluctuating interest rates and market volatility. The company also launched an upgraded digital platform designed to streamline the adviser experience, improve product selection accuracy, and facilitate better wholesaler engagement.
Capital generation remains robust, with free cash flow exceeding a $1 billion annualized run rate and maintaining a risk-based capital ratio well above regulatory minimums. This strong capital position supports Jackson's dual objectives of funding growth initiatives and returning value to shareholders. Management also highlighted potential for strategic growth through product innovation, risk transfer transactions, and selective mergers or acquisitions.
Looking ahead, Jackson expects to leverage its diversified annuity product portfolio, ongoing technology enhancements, and capital flexibility to navigate competitive pressures particularly in variable annuities, while expanding RILA and fixed annuity sales. The company plans to focus on digital distribution upgrades and advisor engagement to enhance sales efficiency and client alignment.
The insurance industry will watch closely the pace of adoption for new RILA features, the trajectory of variable annuity retention, and capital deployment strategies including potential inorganic growth executions. Jackson Financial's position reflects a balanced approach to growth, risk management, and shareholder value creation amidst evolving market conditions.