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February 22, 2024 at 04:26 PM
Jackson Financial increased sales of its 2-year-old registered index-linked annuity product 80% between the fourth quarter of 2022 and the fourth quarter of 2023, to $1 billion.
Laura Prieskorn, the Lansing, Michigan-based annuity issuer’s CEO, told securities analysts Thursday during a conference call that the new RILA products do more than help diversify the company’s sales and attract cash.
“RILAs also contribute to hedging efficiency,” Prieskorn said.
Improvements in hedging, or efforts to manage the market risk that comes with offering annuity guarantees, make Jackson’s capital levels look better, Prieskorn said.
In addition, Jackson is starting Brooke Re, a Michigan-based captive reinsurer that will serve as a financial storage closet for hedging-related ups and downs that might make the parent company’s results look negative.
What it means: You may feel confused when insurers report huge net losses after quarters when business was good. Companies like Jackson are trying to get themselves off the current hedging-related earnings rollercoaster.
The earnings: Jackson held the conference call to go over earnings for the fourth quarter of 2023.
The company is reporting $203 million in pretax adjusted operating earnings for the quarter on $1.5 billion in operating revenue, compared with $320 million in pretax adjusted operating earnings on $1.5 billion in operating revenue for the fourth quarter of 2022.
