Jackson National Life Insurance Company® (Jackson®) generated $2.6 billion in IFRS pre-tax operating income during 2015, an increase of 10 percent over 2014 and the highest in company history. Jackson, an indirect wholly owned subsidiary of the United Kingdom’s Prudential plc (NYSE: PUK), recorded sales and deposits of $27.9 billion in 20153.
Barry Stowe, chief executive officer of the North American Business Unit of Prudential plc4, said this marks another highly successful year for the company and attributes the growth to greater fee income from higher levels of separate account assets under management.
“The products we sell are an important component of a well-balanced retirement plan,” Stowe said. “We provide financial security to our customers to support them into and through retirement. Our strategy remains focused on providing a strong value proposition for our customers and consistent value creation for our shareholders.”
Jackson continues to maintain its financial strength and capital position. The company increased total IFRS assets to $220.3 billion at the end of 2015, up from $212.2 billion at the end of 2014. Jackson also had $5.1 billion of regulatory adjusted capital, more than nine times the minimum regulatory requirement (as of December 31, 2015)5.
“At Jackson, we continue our long term, disciplined approach to business with a sharp focus on the alignment of our stakeholders,” Stowe said. “In 2015, this discipline enabled us to successfully manage volatile macroeconomic conditions and consistently drive positive outcomes. Jackson also generated a record level of IFRS net income of $1.4 billion and remitted $710 million to our parent company.”
1International Financial Reporting Standards (IFRS) is a principles-based set of international accounting standards indicating how transactions and other events should be reported in financial statements. IFRS is issued by the International Accounting Standards Board in an effort to increase global comparability of financial statements and results. Jackson’s parent, Prudential plc (Group), uses IFRS to report the Group’s financial results.
IFRS pretax operating income is based on longer-term investment returns. It excludes short-term fluctuations in investment returns, hedge results, and change in value of derivatives. A reconciliation to both IFRS net income as well as net income based on US generally accepted accounting principles (US GAAP) is as follows (amounts in millions):
|$||2,560.0||IFRS basis pretax income from operations|
|(725.8||)||Net hedge results and change in value of derivatives, net of DAC amortization|
|60.6||Net realized investment gains, net of DAC amortization and non-controlling interest|
|(101.5||)||Normalization of longer-term investment returns, net of DAC amortization|
|(346.9||)||Income tax expense|
|1,446.4||IFRS net income|
|(45.5||)||IFRS to US GAAP adjustments, net of tax|
|$||1,400.9||US GAAP basis net income attributable to Jackson|
Jackson’s net income was also impacted by the increase in accounting reserves, primarily related to movements in interest rates, which were not fully offset by hedging gains. Accounting reserves are reported pursuant to the US GAAP measurement basis applied for IFRS, which may differ significantly from the fair value movement of the hedge instruments. Jackson continues to manage its hedge program on an economic basis and is willing to accept the accounting volatility that results.
2Jackson also has $207.1 billion of IFRS policy liabilities set aside to pay future policy owner benefits (as of December 31, 2015).
3Sales 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.
4The North American Business Unit of Prudential plc includes Jackson and its affiliated and subsidiary companies, Jackson National Life Distributors LLC (JNLD), Curian Capital®, LLC (Curian) and its U.S. affiliates National Planning Holdings®, Inc. (NPH) and PPM America, Inc. (PPMA).
5Based on authorized control level regulatory capital requirements.
About Jackson National Life Insurance Company
Jackson is a leading provider of retirement solutions for industry professionals and their clients. The company offers a diverse range of products including variable, fixed and fixed index annuities designed for tax-efficient accumulation and distribution of retirement income for retail customers, and fixed income products for institutional investors. Jackson subsidiaries and affiliates provide specialized asset management and retail brokerage services. With $220.3 billion in IFRS assets, Jackson prides itself on product innovation, sound corporate risk management practices and strategic technology initiatives. Focused on thought leadership and education, the company develops proprietary research, industry insights and financial representative training on retirement planning and alternative investment strategies. Jackson is also dedicated to corporate social responsibility and supports charities focused on helping children and seniors in the communities where its employees live and work. For more information, visit www.jackson.com.
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 165 years and has $749.6 billion in assets under management (as of December 31, 2015). 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.
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.
Melissa Hernandez, External Communications Manager