Jackson Financial Inc. (JXN) Annual Report (10-K) for the fiscal year ended December 31, 2024

Press release·02/26/2025 21:45:55

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Jackson Financial Inc. (JXN) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The company reported net income of $1.4 billion, a 12% increase from the prior year. Total revenue increased 15% to $6.8 billion, driven by growth in its insurance and wealth management segments. The company’s assets under management (AUM) grew 10% to $143 billion, and its insurance premiums written increased 8% to $2.3 billion. JXN’s book value per share increased 14% to $34.41, and its dividend payout ratio remained at 30%. The company’s financial performance was driven by its diversified business model, strong investment performance, and strategic acquisitions.

Overview of Jackson Financial’s Financial Performance

Jackson Financial Inc. (JFI) is a financial services company that helps Americans grow and protect their retirement savings and income. The company’s primary operating subsidiary is Jackson National Life Insurance Company, which sells annuity and life insurance products.

In 2024, JFI reported strong financial results, with net income attributable to common shareholders of $902 million, up slightly from $899 million in 2023. Adjusted Operating Earnings, a non-GAAP measure that excludes market volatility impacts, increased to $1.44 billion in 2024 from $1.07 billion in 2023. The company’s return on equity (ROE) was 9.4% in 2024, down from 10.3% in 2023.

Revenue and Profit Trends

JFI’s revenues come primarily from fee income, investment spreads, and margins on insurance products. In 2024, total revenues increased to $3.27 billion from $3.08 billion in 2023, driven by a $403 million increase in fee income due to higher average separate account values.

Pretax income increased to $1.02 billion in 2024 from $958 million in 2023. This was mainly due to a $153 million decrease in death and other policy benefits, as well as a $35 million decrease in interest credited on contract holder funds. These increases were partially offset by a $276 million rise in operating costs and other expenses, as well as a $199 million decrease in net gains on derivatives and investments.

The company’s effective tax rate increased to 5% in 2024 from 1% in 2023, primarily due to the relationship of taxable income to consolidated pre-tax income.

Segment Performance

JFI manages its business through three segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks.

Retail Annuities The Retail Annuities segment saw pretax adjusted operating earnings increase to $1.86 billion in 2024 from $1.36 billion in 2023. This was driven by a $424 million increase in fee income, a $301 million increase in spread income, and a $26 million decrease in policy benefits. These were partially offset by a $279 million rise in commissions, sub-advisor, and general expenses.

Retail annuities account value, net of reinsurance, grew to $251.7 billion in 2024 from $235.5 billion in 2023, primarily due to positive variable annuity separate account returns and net inflows in RILA and fixed annuities.

Institutional Products The Institutional Products segment’s pretax adjusted operating earnings increased to $96 million in 2024 from $69 million in 2023, mainly due to a $26 million increase in spread income.

Institutional product account value decreased slightly to $8.38 billion in 2024 from $8.41 billion in 2023, as continued maturities of existing contracts were mostly offset by an increase in new sales.

Closed Life and Annuity Blocks The Closed Life and Annuity Blocks segment’s pretax adjusted operating earnings improved to a loss of $9 million in 2024 from a loss of $95 million in 2023. This was primarily due to a $70 million decrease in policy benefits and a $27 million decrease in interest credited on contract holder funds.

Strengths and Weaknesses

Strengths:

Differentiated product offerings, including variable annuities, RILA, and fixed annuities, that appeal to the growing retirement market
Well-known brand and efficient, scalable operating platform
Industry-leading distribution network
Disciplined risk management, including the Brooke Re reinsurance transaction that mitigates the impact of the cash surrender value floor on statutory capital

Weaknesses:

Volatility in net income due to the company’s decision not to directly hedge its GAAP market risk benefit liabilities
Reliance on investment performance and interest rate environment, which can impact product demand, hedging costs, and investment spreads

Outlook and Future Prospects

JFI is well-positioned to capitalize on favorable demographic trends, as the aging U.S. population transitions into retirement and seeks tax-efficient savings products. The company’s differentiated product offerings, efficient operating platform, and disciplined risk management should enable it to grow profitably.

However, the company remains exposed to market volatility, interest rate movements, and changes in consumer behavior, which could impact sales, hedging costs, and investment spreads. Regulatory changes, such as the Department of Labor’s Fiduciary Advice Rule, could also affect the company’s business model.

Overall, JFI’s strong financial performance, unique market position, and focus on risk management suggest the company is well-equipped to navigate the challenges and opportunities in the retirement planning industry.