Jackson National Life Insurance Company® (Jackson®) today announced its half-year financial results, generating $1.3 billion in IFRS pre-tax operating income2 during the first half of 2020. Jackson also reported $9.8 billion in sales and deposits.
Additionally, Prudential plc (NYSE: PUK), Jackson’s parent company, today announced it has decided to pursue a full separation of Jackson by way of a minority Initial Public Offering (IPO) followed by full divestment over time. The U.S. listing is planned for the first half of 2021, and Jackson does not currently expect to remit any regular dividends to Prudential plc in 2020 or 2021 prior to an IPO.
“The COVID-19 pandemic continues to create hardship and disruption in the lives of millions of Americans,” said Michael Falcon, chief executive officer of Jackson Holdings LLC. “Consumers value the benefits our products provide, and these needs are highlighted during volatile markets. Throughout the first half of the year, we have adapted our business to ensure we continue to deliver on our ongoing commitment to helping Americans seek protection amid uncertainty, as they transition to and through retirement.”
On June 18, 2020, Jackson entered into an agreement with Athene Holding Ltd. (Athene) (NYSE: ATH) to fully reinsure $27.6 billion of the company’s in-force book of fixed and fixed index annuity liabilities in exchange for $1.2 billion in ceding commission from Athene (effective June 1, 2020).
Falcon said the recent Athene agreement further strengthens Jackson’s capital position, as the company continues to deliver on its long-term strategic objectives while serving the growing population of American savers seeking to build financial freedom for life.
1Financial results from Jackson National Life Insurance Company and its subsidiaries have been included in Jackson’s financial results. Fixed index annuities and institutional products are not sold in New York.
2International Financial Reporting Standards (IFRS) is a principles-based set of international accounting standards indicating how transactions and other events should be reported in financial statements. IFRS is issued by the International Accounting Standards Board in an effort to increase global comparability of financial statements and results. Jackson’s parent, Prudential plc (Group), uses IFRS to report the Group’s financial results.
IFRS pre-tax operating income is based on longer-term investment returns. It excludes short-term fluctuations in investment returns, hedge results and change in value of derivatives. A reconciliation to both IFRS net income as well as net income based on US generally accepted accounting principles (US GAAP) is as follows (amounts in millions):
|IFRS basis pre-tax income from operations|
|Net hedge results and change in value of derivatives, net of DAC amortization|
|Impact from Athene transaction|
|Net realized investment gains, net of DAC amortization and non-controlling interest|
|Normalization of longer-term investment returns, net of DAC amortization|
|Income tax benefit|
|IFRS net loss|
|IFRS to US GAAP adjustments, net of tax|
|US GAAP basis net loss attributable to Jackson|
Jackson's net loss was impacted by hedging losses incurred due to movements in interest rates and equity markets, which were not fully offset by the release of accounting reserves. IFRS accounting for variable annuity liabilities is not necessarily consistent with the economic value of these liabilities. Jackson continues to manage its hedge program on an economic basis and is willing to accept the accounting volatility that results.
Jackson is a leading provider of retirement products for industry professionals and their clients. The company and its affiliates offer variable, fixed and fixed index annuities designed for tax-efficient growth and distribution of retirement income for retail customers, as well as products for institutional investors. Jackson is a proud founding member and co-chair of the Alliance for Lifetime Income, a nonprofit 501(c)(6) organization formed and supported by 24 of the nation’s financial services organizations to create awareness and educate Americans about the importance of protected lifetime income. With $294.6 billion in IFRS assets*, the company prides itself on sound corporate risk management practices and strategic technology initiatives. Focused on thought leadership and education, Jackson provides industry insights and financial representative training on retirement planning and alternative investment strategies. The company is also dedicated to corporate philanthropy and supports nonprofits focused on strengthening families and creating economic opportunities in the communities where its employees live and work. For more information, visit www.jackson.com.
*Jackson has $294.6 billion in total IFRS assets and $265.4 billion in IFRS policy liabilities set aside to pay primarily future policyowner benefits (as of June 30, 2020).
Jackson is an indirect subsidiary of Prudential plc, an Asia-led portfolio of businesses focused on structural growth markets. The business helps individuals to de-risk their lives and deal with their biggest financial concerns through life and health insurance, and retirement and asset management solutions. Prudential plc has 20 million customers (as of June 30, 2020) and is listed on stock exchanges in London, Hong Kong, Singapore and New York. Prudential plc is not affiliated in any manner with Prudential Financial, Inc. a company whose principal place of business is in the United States of America, nor with the Prudential Assurance Company, a subsidiary of M&G plc, a company incorporated in the United Kingdom.
This press release may contain certain statements that constitute “forward-looking statements.” Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. However, as with any projection or forecast, forward-looking statements are inherently susceptible to a number of risks and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in such forward-looking statements. There can be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished. Any forward-looking statements reflect Jackson’s views and assumptions as of the date of this press release and Jackson disclaims any obligation to update forward-looking information.