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U.K. Pru Schedules Jackson Split for Sept. 13

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What You Need to Know

  • Jackson was founded in 1961 and became part of the U.K. Prudential in 1986.
  • The company has 2,900 full-time employees and $351 billion in assets under management.
  • U.K. Pru shareholders are preparing to vote on the Jackson split Aug 27.

The leading issuer of individual variable annuities in the United States could become a stand-alone company next month.

Prudential P.L.C., the London-based parent of Jackson Financial, announced today that its shareholders will vote Aug. 27 on a proposal to split from Jackson.

If the shareholders approve the deal, then Prudential will demerge from Jackson by giving Jackson stock to its own shareholders. Prudential shareholders will get one share of Jackson stock for every 40 shares of Prudential shares that they own, or, in same cases, an equivalent amount of cash.

Shares of Jackson stock would begin trading on the New York Stock Exchange, under the ticker symbol JXN, Sept. 1.

Prudential would start out with a 19.9% stake in Jackson and intends to reduce that stake to less than 10% within a year.

Jackson Financial — the parent of Jackson National Life Insurance Company of Lansing, Michigan — announced that a registration statement for the transaction has now been declared effective by the SEC.

Prudential filed at least four notices related to the deal with the SEC this morning.

Jackson’s Future

Prudential says in a new demerger filing that Jackson “intends to focus its new product development efforts on capital-efficient products that help diversify its balance sheet exposures.”

Laura Prieskorn will continue to be Jackson’s CEO.

Prieskorn said in a comment on Jackson’s path forward that the separation will “enhance our mission to help customers pursue financial freedom for life by providing differentiated products through our industry-leading distribution capabilities, efficient operating platform and disciplined risk management.”

Prieskorn said in March that Jackson would diversify by selling more registered index-linked annuities, or variable annuities that provide either no protection or limited protection against account value decreases.

The Companies

The U.K. Prudential is a company that once was a major force in insurance in the United Kingdom but has focused heavily on business opportunities in Asia in recent years.

The U.K. Prudential has no connection with Prudential Financial of Newark, New Jersey.

Jackson was founded in 1961 and became part of the U.K Pru in 1986.

The company now has about 2,900 full-time employees and $351 billion in assets under management.

The Secure Retirement Institute says Jackson generated $4.6 billion in individual variable annuity sales in the first quarter of this year and accounted for about 23% of all U.S. individual variable annuity sales recorded during that quarter.

The second-ranking issuer recorded just $2 billion in individual variable annuity sales.

Prudential will release results for the first half of this year Aug. 11. But the company says Jackson’s variable annuity sales were about 30% higher in the first half this year than in the first half of 2020.

The Demerger History

The U.K. Pru’s thinking about Jackson has changed over the past four years.

Low interest rates, sluggish growth in demand for financial services products in North America, and tough new accounting rules have reduced the appeal of U.S. life and annuity issuers for many companies.

Executives from the U.K. Pru said in March 2018 that they wanted to keep Jackson, but the executives then indicated that their priorities had changed in September 2019.

The U.K. Pru said it would sell a stake in Jackson to investors in March 2020.

Prudential said it would split from Jackson without an initial public offering in January 2021; set a June 30, 2021, split completion deadline in March; then, in May, postponed the deal completion deadline, due to investment market turmoil.

MetLife split Brighthouse Financial off through a similar transaction in August 2017, and AXA split Equitable off through a demerger in May 2018.

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Laura Prieskorn (Photo: Jackson)