On the heels of strong results reported by Principal, Genworth and The Hartford, Jackson National Life Insurance Co. announced Monday, May 17, that it generated total sales and deposits of $4.4 billion during the first quarter of 2010. The amount marks a 62% increase over the prior year period. According to the company, the increase was driven primarily by a 108% year-over-year rise in variable annuity sales to $3.1 billion.
Jackson also said it set a company record for monthly VA sales in March 2010 with a total of more than $1.3 billion.
“Jackson is continuing to benefit from the sales momentum generated during the financial crisis,” said Clark Manning, Jackson’s president and chief executive officer, in a statement. “Advisors and their clients are attracted by the consistency we have maintained in our product offering, wholesaling support, customer service and financial strength ratings.”
Jackson, an indirect wholly owned subsidiary of the United Kingdom’s Prudential plc (NYSE: PUK), sold $473 million in fixed index annuities during the first quarter of 2010, up nearly 34% over the prior year period.
First quarter 2010 sales of traditional deferred fixed annuities totaled $283 million, compared to $693 million during the first quarter of 2009, as the company continued to manage fixed annuity volumes to preserve capital.
For the seventh consecutive year, Jackson’s flagship variable annuity contract, Perspective II, was the top selling VA contract in the independent channel and 2009 marked the first year that Perspective II was also the top-selling VA contract in the bank channel. Jackson ranked first in the industry in VA net flows during the third and fourth quarters of 2009, and second for the full year.
“Stability was the primary driver of Jackson’s sales success during the last 15 months,” said Clifford Jack, Jackson’s executive vice president and chief distribution officer, also in a prepared statement. “While our adherence to a consistent product pricing strategy cost us some VA market share during the top of the cycle in 2007, we gained market share when the majority of VA providers reacted swiftly to the financial crisis by reducing their offerings or exiting the business altogether. Jackson is increasingly attracting the interest of advisers who are seeking a stable product provider.”
During 2009, Jackson expanded the number of advisors appointed to sell the company’s products by 35% over the prior year. Since the beginning of the financial crisis, Jackson has secured selling agreements with a number of new distribution partners, including Merrill Lynch.
Curian Capital, Jackson’s separately managed accounts subsidiary, set a company record during the first quarter of 2010 with deposits of $482 million, up 245% over the first quarter of 2009. As of March 31, 2010, Curian’s assets under management totaled $4.1 billion, compared to $3.6 billion at the end of 2009. During the first quarter of 2010, Jackson sold $12 million in life insurance products, up 3% from the same period in 2009. Jackson did not sell any institutional products during the first quarter of 2010, as the company directed available capital to support higher-margin variable annuity sales. Jackson participates in the institutional market on an opportunistic basis when capital is available and margins are attractive.
Jackson has maintained the same financial strength ratings for more than seven years and, during 2009, all four of the major rating agencies affirmed Jackson’s financial strength ratings. As of April 29, 2010, Jackson had the following ratings:
? 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
“While we are pleased with our market share gains, Jackson remains committed to generating profitable growth for our parent company by adhering to the product pricing and risk management discipline that served us so well during the market downturn,” Manning said. “Our Long-term Smart approach to operating the business has been critical to our success and we’ll continue to adhere to those tenets going forward.”
Read a story about the Q1 earnings of Principal, Genworth and Hartford from the archives of InvestmentAdvisor.com.