Jackson National Life Insurance Company® (Jackson®) today announced its full-year financial results, generating $2 billion in IFRS net income2 during 2018, the highest in company history. Jackson also reported $20.6 billion in sales and deposits, $2.5 billion in IFRS pre-tax operating income and adjusted capital of $5.5 billion, more than nine times the minimum regulatory requirement (as of December 31, 2018).
Michael Falcon, recently appointed chief executive officer of Jackson Holdings LLC, said Jackson’s results demonstrate how its superior product offerings and disciplined approach to business remain resilient despite market conditions — proving the company’s risk management practices are effective throughout volatile periods.
“Since joining Jackson in January, our financial strength, operational excellence and passionate commitment to delivering long-term value to consumers have become even more clear to me,” Falcon said. “These broad foundational capabilities — which have proven resilient through and across market cycles — serve as the backbone of what we do, allowing us to continue to deliver on our promises. Jackson is proud to provide protected lifetime income and investment freedom to millions of Americans who trust us to help secure their financial futures.”
Jackson, an indirect wholly owned subsidiary of the United Kingdom’s Prudential plc (NYSE: PUK), remitted a $450 million dividend to its parent company in 2018. Jackson’s capital position and financial health remain strong, and the company continued to generate positive variable annuity net flows in 2018. Additionally, Jackson has established a significant presence in the advisory space and continues to enhance its capabilities to provide advisors and their clients with more choice as they plan for their financial futures. These efforts include several fee-based product launches, technology innovation and forming new distribution partnerships.
“As the country’s population ages, there is a need for retirement solutions that can make a significant difference in the quality of life after work for many families,” Falcon said. “Across our product offerings, we continue to meet investors and their advisor partners where they are as they plan for or enter retirement. Our clients need to feel confident they can live the life they want in retirement — truly embracing their 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
Net realized investment gains, net of DAC amortization
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 attributable to Jackson
Jackson's net income was impacted by hedging losses incurred due to the equity market, 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 $257.7 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 $257.7 billion in total IFRS assets and $243.5 billion in IFRS policy liabilities set aside to pay primarily future policyowner benefits (as of December 31, 2018).
Jackson 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, serving over 26 million customers with $837.1 billion in assets under management (as of December 31, 2018). 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.