JXN — Jackson Financial Inc.

Summary of Jackson Financial Inc. Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Adjusted Capital: $5.5 billion, up nearly 5% year-over-year.
• Pretax Operating Earnings: $430 million; $503 million excluding notable items, reflecting a 12% year-over-year increase.
• Earnings Per Share: Adjusted operating EPS of $5.15, or $5.94 after excluding notable items, marking an 18% increase year-over-year.
• Free Capital Generation: $271 million for the quarter, on track to meet the full-year target of $1.2 billion.
• Capital Return to Shareholders: $257 million, an 11% increase from the previous year, distributed through dividends and share repurchases.

2. Strategic Updates and Business Highlights

• Retail Annuity Sales: Increased by 31% year-over-year, driven by strong performance in RILA products, which achieved over $2 billion in quarterly sales.
• Product Diversification: Launched Jackson Income Assurance, a fixed indexed annuity, contributing to significant sales growth in fixed annuities.
• Partnership with TPG: Established a strategic partnership aimed at enhancing investment returns and expanding product offerings.
• Improved Net Outflows: Decreased by 30% year-over-year, reflecting strong RILA inflows and reduced variable annuity surrenders.

3. Forward Guidance and Outlook

• 2026 Targets: Confident in achieving free capital generation of $1.2 billion and capital return of $900 million to $1.1 billion.
• Market Conditions: Entering Q2 with equity indices near all-time highs, which may influence surrender activity positively while supporting growth in variable annuity AUM.
• Continued Growth: Expectation of sustained momentum in spread-based products and overall profitability.

4. Bad News, Challenges, or Points of Concern

• Market Volatility: Noted that equity market uncertainty could lead to increased surrender activity in variable annuities.
• Hedging Losses: Experienced a $101 million net hedging loss primarily in the variable annuity segment due to market dislocations.
• Limited Partnership Returns: Underperformed against long-term return assumptions, impacting capital generation.

5. Notable Q&A Insights

• Sales Composition: All reported sales in Q1 were new business without internal exchanges, indicating strong market demand.
• Industry Consolidation: Management acknowledged the recent merger activity in the annuity space but expressed confidence in their competitive position due to a diversified product set and strong distribution capabilities.
• Brook Re Capital: A $500 million capital contribution was made to Brook Re, with expectations for future capital distributions from Hickory Re in the coming years.
• Sensitivity to Alternative Returns: Management indicated that capital generation is somewhat sensitive to alternative investment returns, but they remain optimistic about meeting their targets despite current headwinds.

Overall, Jackson Financial Inc. reported a strong start to 2026, with solid financial metrics and strategic initiatives in place, while also acknowledging potential challenges from market volatility and competition.