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Jackson Financial Inc (JXN) Reports Mixed 2023 Financial Results

  • Net Income: Reported a net loss of $(1.6) billion for Q4 2023, and a net income of $899 million for the full year.

  • Adjusted Operating Earnings: $204 million for Q4 and $1.1 billion for the full year, reflecting a decrease from the previous year.

  • RILA Sales: Fourth-quarter RILA sales climbed to $1.0 billion, a significant increase from the previous year.

  • Annuity Account Value: Grew to $235 billion, a 12% increase year-over-year, largely due to higher equity markets.

  • Capital Return: Achieved a 2023 capital return target with $464 million in dividends and share repurchases.

  • RBC Ratio: Estimated risk-based capital ratio at Jackson National Life Insurance Company was a robust 624% at year-end.

  • Liquidity: Holding company cash and highly liquid securities stood at approximately $600 million as of year-end.

On February 21, 2024, Jackson Financial Inc (NYSE:JXN) released its 8-K filing, disclosing its financial results for the fourth quarter and full year ended December 31, 2023. The company, known for helping Americans grow and protect their retirement savings through a diverse suite of annuities, faced mixed financial outcomes in 2023.

Financial Performance and Challenges

Jackson Financial Inc (NYSE:JXN) reported a net loss attributable to common shareholders of $(1.6) billion for the fourth quarter of 2023, a deeper loss compared to $(1.2) billion in the same quarter of the previous year. This loss was primarily due to an $841 million loss from business reinsured to third parties. However, for the full year, the company posted a net income of $899 million, a significant decrease from $6.2 billion in 2022. The adjusted operating earnings for the fourth quarter were $204 million, down from $294 million in the prior year's quarter. The company attributed this decline to the unfavorable impact of the annual actuarial assumptions update and lower returns on private equity and other limited partnership assets.

Despite these challenges, Jackson Financial Inc (NYSE:JXN) achieved its full-year capital return target to common shareholders, returning $464 million through dividends and share repurchases. The company also reported robust sales of its registered index-linked annuities (RILA), which surged to $1.0 billion in the fourth quarter, up from $560 million in the same period last year. This performance underscores the growing demand for RILA products and the company's success in capturing market share in this segment.

Key Financial Metrics

Important metrics for Jackson Financial Inc (NYSE:JXN) include the total annuity account value, which increased by 12% year-over-year to $235 billion, driven by higher equity markets. The company's estimated risk-based capital (RBC) ratio at Jackson National Life Insurance Company (JNLIC) stood at a healthy 624% as of year-end 2023. Additionally, the holding company's cash and highly liquid securities were approximately $600 million, above the targeted minimum liquidity buffer, even after repaying $600 million of senior notes upon maturity in November 2023.

"2023 was a fantastic year of execution for Jackson, with our financial performance highlighting the strong fundamentals of our business," said Laura Prieskorn, President and CEO of Jackson. She also expressed confidence in the company's $550-650 million capital return target for 2024, positioning Jackson well to deliver on its ongoing purpose of helping Americans build financial freedom for life.

Analysis of Company's Performance

While the net loss in the fourth quarter indicates volatility, the overall annual performance of Jackson Financial Inc (NYSE:JXN) suggests resilience in its core business operations. The growth in RILA sales and the increase in annuity account values reflect the company's ability to adapt to market demands and consumer preferences. The establishment of Brooke Life Reinsurance Company (Brooke Re) and the increase in the first quarter 2024 common dividend by nearly 13% to $0.70 per share are strategic moves that may bolster investor confidence and stabilize capital generation.

Value investors may find Jackson Financial Inc (NYSE:JXN)'s commitment to returning capital to shareholders and maintaining a robust capital position appealing. The company's focus on expanding its distribution in the rapidly growing annuity market segment, coupled with its strong liquidity position, positions it well for future growth and financial stability.

For a more detailed analysis of Jackson Financial Inc (NYSE:JXN)'s financial results and to access the full 8-K filing, visit GuruFocus.com.

Explore the complete 8-K earnings release (here) from Jackson Financial Inc for further details.

This article first appeared on GuruFocus.

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