Jackson National Life Insurance Company® (Jackson®) generated a record level of $2.0 billion in IFRS pretax operating income during 2013, an increase of 28.0 percent over 2012. IFRS net income for December 31, 2013 was $730 million.
Jackson also reported record total sales and deposits of $27.3 billion, 7.3 percent higher than the prior year. The key driver of this increase in 2013 was Jackson’s newest variable annuity product, Elite Access®, which provides tax efficient access to alternative investments. Elite Access contributed $4.0 billion in total sales in 2013, up from $1.3 billion in 2012.
“In 2013, Jackson remained focused on our key strengths and we are pleased with the strong performance which is a result of our continued discipline,” said Mike Wells, Jackson’s president and chief executive officer. “During the year, with the success of our most recent product, Elite Access, we were able to achieve record sales while we continued to diversify our risk profile. In addition, we maintained our strong capital position while growing our business and paying a significant dividend to our parent.”
Jackson, an indirect wholly owned subsidiary of the United Kingdom’s Prudential plc (NYSE: PUK), increased total IFRS assets to $191.5 billion3 at the end of 2013, up from $165.4 billion at the end of 2012. As of December 31, 2013, Jackson had $4.8 billion of regulatory adjusted capital, approximately nine times the minimum regulatory requirement.4
Throughout the economic cycles, Jackson has maintained its financial strength. During 2013, all four primary rating agencies—A.M. Best, Standard & Poor’s, Fitch Ratings and Moody’s Investors Service, Inc.—affirmed Jackson’s financial strength ratings. Jackson has maintained the same financial strength ratings for more than 10 years. As of March 12, 2014, Jackson had the following ratings:5
- A+ (superior) —A.M. Best financial strength rating, the second-highest of 16 rating categories;
- AA (very strong) —Standard & Poor's insurer financial strength rating, the third-highest of 21 rating categories;
- AA (very strong) —Fitch Ratings insurer financial strength rating, the third-highest of 19 rating categories;
- A1 (good) —Moody's Investors Service, Inc. insurance financial strength rating, the fifth-highest of 21 rating categories.
1International Financial Reporting Standards (IFRS) is a principles-based set of international accounting standards indicating how transactions and other events should be reported in financial statements. IFRS is issued by the International Accounting Standards Board in an effort to increase global comparability of financial statements and results. Jackson’s parent, Prudential plc (Group), uses IFRS to report the Group's financial results. For more information, visit www.prudential.co.uk.
IFRS pretax operating income is based on longer-term investment returns. It excludes short-term fluctuations in investment returns, hedge results, and change in value of derivatives. A reconciliation to both IFRS net income as well as to net income based on US generally accepted accounting principles (US GAAP) is as follows (amounts in millions):
|$||1,998.6||IFRS basis pretax income from operations|
|(1,229.4||)||Net hedge results and change in value of derivatives, net of Deferred Acquisition Cost (DAC) amortization|
|95.1||Net realized investment gains, net of DAC amortization and non-controlling interest|
|41.7||Normalization of longer-term investment returns, net of DAC amortization|
|(175.8||)||Income tax expense|
|730.2||IFRS net income|
|25.0||IFRS to US GAAP adjustments, net of tax|
|$||755.2||US GAAP basis net income|
Jackson’s net income was impacted by hedging losses incurred in the strong equity market which were not fully offset by the related 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.
2Sales and deposits from Jackson’s subsidiaries, Jackson National Life Insurance Company of New York® and Curian Capital® LLC, have been included in Jackson’s total sales and deposits figure.
3Jackson also has $178.5 billion of IFRS policy liabilities primarily set aside to pay future policyowner benefits (as of December 31, 2013).
4 Based on authorized control level regulatory capital requirements.
5Financial strength ratings do not apply to the principal amount or investment performance of the separate account or underlying investments of variable products.
About Jackson National Life Insurance Company
Jackson National Life Insurance Company is an indirect subsidiary of Prudential plc, a company incorporated in England and Wales. Prudential plc and its affiliated companies constitute one of the world's leading financial services groups. It provides insurance and financial services through its subsidiaries and affiliates throughout the world. It has been in existence for over 160 years and has $733.6 billion in assets under management (as of December 31, 2013). 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
With $191.5 billion in IFRS assets, Jackson is a leading provider of retirement solutions. The company sells variable, fixed and fixed index annuities, and institutional products. Through its affiliates and subsidiaries, Jackson also provides asset management and retail brokerage services. Jackson markets its products in 49 states and the District of Columbia through independent and regional broker-dealers, wirehouses, financial institutions and independent insurance agents. Jackson’s subsidiary, Jackson National Life Insurance Company of New York®, similarly markets products in the state of New York. For more information, visit www.jackson.com.
The following cautionary statement is included to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Jackson National Life Insurance Company. 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.
John Brown, Vice President
Public Policy and Communications
Phone: 800-565-9044 x22447