Jackson National Life Insurance Company® (Jackson®) generated a record $2.3 billion in IFRS pretax operating income1 during 2014, an increase of 17 percent over 2013. This overall increase was primarily driven by increased fee income on higher separate account assets under management. The separate account growth resulted from both strong net flows and positive market appreciation during 2014. Jackson, an indirect wholly owned subsidiary of the United Kingdom’s Prudential plc (NYSE: PUK), recorded sales and deposits2 of $28.3 billion in 2014, up 3 percent over 2013.
“Jackson remains committed to our strategy which focuses on providing sustainable value to all of our stakeholders. In 2014, this commitment resulted in profitable sales growth and continued diversification of our sales mix,” said Mike Wells, Jackson president and chief executive officer. “The strength of our performance in 2014, led by the continued success of Elite Access®, allowed Jackson to remit a $680 million dividend to our parent company while maintaining a strong capital position. Jackson’s approach continues to successfully provide value for customers and shareholders, the ultimate metrics which define our success.”
Jackson increased total IFRS assets to $212.2 billion3 at the end of 2014, up from $191.5 billion at the end of 2013. As of December 31, 2014, Jackson had $4.9 billion of regulatory adjusted capital, more than nine times the minimum regulatory requirement.4
During 2014, 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 12 years. As of March 10, 2015, 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.
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 net income based on US generally accepted accounting principles (US GAAP) is as follows (amounts in millions):
IFRS basis pretax income from operations
Net hedge results and change in value of derivatives, net of DAC amortization
Net realized investment gains, net of DAC amortization and non-controlling interest
Normalization of longer-term investment returns, net of DAC amortization
Income tax expense
IFRS net income
IFRS to US GAAP adjustments, net of tax
US GAAP basis net income
Jackson’s net income was impacted by the increase in accounting reserves primarily related to movements in interest rates which were not fully offset by hedging gains. IFRS accounting for variable annuity liabilities is not necessarily consistent with the expected future cash flows 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 $198.7 billion of IFRS policy liabilities set aside to pay future policy owner benefits (as of December 31, 2014).
4Based 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 $773.3 billion in assets under management (as of December 31, 2014). 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.
With $212.2 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.
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.
John Brown, Vice President, Public Policy and Communications
Phone: 800-565-9044 x22447