What You Need to Know
- Overall sales have been great.
- The company has tilted toward selling products without lifetime benefits guarantees.
- Securities analysts were asking about how the company supports the guarantees it has provided.
Jackson Financial — the U.S. individual annuity giant — has just released earnings for its first full quarter as an independent company.
The Lansing, Michigan-based insurer previously was a child of Prudential PLC of London. Prudential executives took the lead in talking to investors and securities analysts.
In September 2021, Jackson separated from its corporate parent. Jackson now can eat ice cream for breakfast, stay up as late as it wants, and handle its own investor relations communications.
Jackson executives shared their view of the annuity world Thursday, during a conference call the company held to go over the latest earnings.
The company reported $585 million in net income for the quarter on $1.6 billion in revenue, up from $76 million in net income on $601 million in revenue for the fourth quarter of 2020.
Annuity account value increased 13% from the year-earlier quarter, thanks to the strong performance of the separate accounts, or policyholder accounts, inside the annuities it has sold.
Here are three things company executives talked about during their analyst call.
1. The annuity sales outlook looks great.
Some life insurers have emphasized that they might have benefited from unusual “tailwinds,” or helpful forces, in the latest quarter, and that sales growth might now slow.
Laura Prieskorn, Jackson’s CEO, expressed optimism about the coming year.
“We expect sales momentum for Jackson and the industry to continue,” Prieskorn said.
For the industry overall, 2021 sales were at the highest level since 2008, and at the third highest level ever, she added.
“All annuity categories saw growth,” Prieskorn said.
The company emphasized its optimism by authorizing a cash dividend of 55 cents per share for the first quarter and increasing its share repurchase authorization by $300 million.
2. Jackson is being careful about benefits guarantees.
Life insurers use giant portfolios of bonds and related instruments, such as derivatives, to support annuity benefits guarantees. Twenty years ago, when interest rates, and bond yields, were much higher, annuity issuers bragged about lifetime income guarantees and other types of guarantees.