Jackson Financial Q1 Earnings Call Highlights

Key Points

• Jackson Financial reported stronger first-quarter performance, with pre-tax adjusted operating earnings of $503 million excluding notable items, up 12% year over year. Adjusted operating EPS rose to $5.94 on the same basis, helped by stronger spread income and a lower share count.
• Retail annuity sales surged 31% to $5.3 billion, led by continued momentum in RILA products and a sharp increase in fixed annuity and fixed indexed annuity sales. Jackson said its new FIA product has been positively received and is helping diversify the business.
• The company reaffirmed its 2026 capital targets, including at least $1.2 billion in free capital generation and $900 million to $1.1 billion in shareholder returns. Management also highlighted a strong capital position, with total adjusted capital of $5.5 billion and ample liquidity.

Jackson Financial NYSE: JXN executives said the insurer opened 2026 with stronger annuity sales, higher operating earnings excluding notable items and continued capital returns, while reaffirming full-year free capital generation and shareholder return targets.

On the company’s first-quarter earnings call, President and CEO Laura Prieskorn said Jackson “successfully executed” its capital management and growth initiatives during a volatile market backdrop. Total adjusted capital was $5.5 billion, up nearly 5% from the first quarter of last year, while the company distributed $288 million from its operating company to the holding company.

Jackson returned $257 million to common shareholders through dividends and share repurchases during the quarter, an 11% increase from a year earlier, according to Prieskorn. CFO Don Cummings said capital returned to common shareholders increased 17% year over year on a per diluted share basis.

Operating Earnings Rise Excluding Notable Items

Cummings said Jackson reported pre-tax adjusted operating earnings of $430 million, or $503 million excluding notable items. On that basis, earnings rose 12% from the prior-year period, driven by growth in spread-based businesses and steady growth in in-force assets under management.

Adjusted operating earnings per share were $5.15. Excluding $0.90 of notable items and normalizing for the difference between the actual tax rate and the company’s 15% tax guidance, adjusted operating EPS was $5.94, up 18% from the first quarter of last year. Cummings said the increase reflected stronger spread income and a lower diluted share count from share repurchases, which more than offset the impact of 4.7 million shares issued to TPG midway through the quarter.

The notable items included a $0.48 unfavorable impact from limited partnership results, which came in below Jackson’s long-term 10% return assumption. Cummings also cited a $0.42 unfavorable impact from higher claims after Jackson enhanced its processes and data sourcing to more efficiently identify deceased policyholders.

Jackson’s effective tax rate for the quarter was 13.5%, modestly below its 15% guidance.

Retail Annuity Sales Increase 31%

Prieskorn said retail annuity sales rose 31% year over year, with total first-quarter sales of $5.3 billion. In response to an analyst question, she said the reported sales represent new business net of internal exchanges.

Jackson’s registered index-linked annuity, or RILA, products remained a key driver of growth. Prieskorn said RILA sales have exceeded $2 billion in quarterly sales since the company launched the products in May 2025, helping Jackson become the industry’s third-largest RILA provider with more than $21 billion in RILA assets. Cummings said RILA sales were $2 billion in the quarter, up 68% from the year-ago period.

Fixed annuity and fixed indexed annuity sales also increased sharply. Prieskorn said fixed annuity and FIA sales reached $756 million in the quarter, compared with $174 million a year earlier. Cummings described that as an increase of more than 300% year over year, helped by the launch of Jackson Income Assurance, the company’s FIA product.

Prieskorn said the FIA includes an income benefit and has been “positively received” since its August 2025 launch. In response to a question from Barclays analyst Alex Scott, she said the FIA’s living benefit option can be elected at sale or after sale, which she described as a unique feature.

Within the advisory channel, Prieskorn said RILA and Elite Access accounted for more than 70% of fee-based advisory sales, while the new FIA product represented more than 10% of total advisory sales in the quarter. Cummings said nearly 50% of advisory sales came from products other than variable annuities, reflecting Jackson’s diversification strategy.

Capital Targets Reaffirmed

Jackson reaffirmed its 2026 target of at least $1.2 billion in free capital generation, assuming a 5% equity market return and interest rates moving in line with the year-end forward curve. Prieskorn said first-quarter free capital generation was $271 million and is expected to build over the year under the company’s current market assumptions.

The company also maintained its target of returning $900 million to $1.1 billion to common shareholders in 2026. Holding company liquidity ended the quarter at nearly $650 million, which management said was comfortably above its minimum buffer.

Cummings said after-tax statutory capital generation was $342 million in the quarter. He added that free cash flow totaled $288 million at the holding company, up 35% year over year after funding expenses and other cash flow items.

Jackson National Life ended the quarter with total adjusted capital of $5.5 billion and an estimated risk-based capital ratio of 554%, above the company’s minimum target. Cummings said Jackson’s capital position and RBC ratio have become significantly less sensitive to equity market movements because of the Brooke Re structure.

TPG Partnership and Investment Portfolio in Focus

Management highlighted Jackson’s recently established strategic partnership with TPG, which Prieskorn said brings expertise in asset-based finance and direct lending that complements PPM America, Jackson’s wholly owned investment management subsidiary. She said Jackson has begun allocating new money to TPG-managed assets but does not expect an outsized allocation to those asset classes.

Cummings said TPG began deploying capital during the quarter, supporting higher new money yields and expanding Jackson’s investment opportunities. In response to a question from KBW analyst Ryan Krueger, Cummings said it remains early in the partnership and that portfolio repositioning opportunities are still being evaluated as the relationship becomes fully established.

PPM America President Chris Raub said Jackson’s limited partnership portfolio is predominantly private equity with a middle-market buyout focus, along with a modest amount of CLO equity and other fund investments. He said nothing in the quarter changed the company’s view of its 10% long-term return assumption.

Cummings said PPM oversees approximately $95 billion in total assets under management, including $59 billion of Jackson assets and $36 billion of third-party AUM. He described Jackson’s investment portfolio as high quality and defensively positioned, with below-investment-grade exposure limited to 1% of the portfolio.

Jackson also discussed its $900 million PCAPS contingent capital facility. Cummings said the facility provides a source of capital in a severe stress scenario and supports the company’s liquidity profile. Including holding company cash and highly liquid securities, plus an undrawn revolving credit facility, total available liquidity at Jackson Financial Inc. was approximately $3 billion.

Management Addresses Industry Consolidation

During the Q&A session, Jefferies analyst Suneet Kamath asked about a large merger of equals in the annuity industry. Prieskorn said Jackson competes with both organizations involved in the announced transaction and believes its diversified product set will allow it to continue competing effectively.

Cummings added that Jackson has a comprehensive product suite and one of the largest distribution forces in its space. He said the company feels “well-positioned” with both its product lineup and distribution capabilities.

Prieskorn closed the call by saying Jackson’s first-quarter performance reinforced the resilience of the business and that the company remains focused on achieving its 2026 targets.

About Jackson Financial NYSE: JXN

Jackson Financial Inc is a U.S.-based financial services holding company headquartered in Lansing, Michigan. The company operates primarily through its principal subsidiary, Jackson National Life Insurance Company, and specializes in designing and distributing retirement products. Jackson Financial has been publicly traded on the New York Stock Exchange under the ticker JXN since its initial public offering in May 2022.

The company's core offerings include a broad range of fixed, variable and indexed annuity products aimed at helping individuals preserve and grow retirement assets.

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