Jackson Financial Inc.

Ladies and gentlemen, hello and welcome to the Jackson Financial Inc. 4Q22 Earnings and 2023 Outlook Call. My name is Maxine and I'll be coordinating the call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I will now hand over to your host, Liz Werner, Head of Investor Relations to begin. Liz, please go ahead when you're ready.

Good morning, everyone, and welcome to Jackson's fourth quarter earnings call. Today's remarks may contain forward-looking statements which are subject to risks and uncertainties. These statements are not guarantees of future performance or events and are based on management's current expectations. Jackson's filings with the SEC provide details on important factors that may cause actual results or events to differ materially. Except as required by the applicable securities laws, Jackson is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change. Today's remarks may also refer to non-GAAP financial measures. The reconciliation of those such measures to the most comparable U.S. GAAP figures is included in our earnings release, financial supplement, and earnings presentation, all of which are available in the investor relations page on our website at jackson.com. Joining us today are our CEO, Laura Prescorn, our CFO, Marcia Wadson, our head of ALM and chief actuary, Steve Ben-Yorris, our president of Jackson National Life Distributors, Scott Romine, and President and Chief Investment Officer of PPM, Craig Smith. At this time, I'll turn the call over to our CEO, Laura Prescorn.

Thank you, Liz. Welcome, everyone, to our fourth quarter in full-year 2022 earnings and 2023 outlook call. Today, we'll review our full-year results and our success in delivering on our key financial targets. We'll speak to progress made on our strategic initiatives during our first full year as a public company and share our outlook for 2023, including specific financial targets for the year. But before I dive into our results, I want to acknowledge the tragedy that occurred in our hometown area of Lansing, Michigan, just a few weeks ago. Jackson has deep ties to Michigan State University and to the hundreds of Jackson associates who are MSU students or alumni. During this difficult time, we're focused on doing what we can to help our employees, our customers, and the community we call home. I'm extremely proud of our team and how we've supported each other and our community during this time, just as we do every day. Turning to 2022, the hard work and dedication of that same talented team enabled us to achieve many milestones. We delivered strong financial results and provided industry-leading service to our distribution partners and their clients. And we continued to demonstrate our ability to operate through volatile markets and successfully managed risk throughout 2022, including in the fourth quarter. With respect to the macroeconomic impacts on our business, early in the year, we stated that the positive impact of rising interest rates would be an emerging benefit and we saw that develop over the course of the year. We managed through significant equity market volatility, protected our statutory capital, and met or exceeded each of our four key financial targets. As we look ahead to 2023, we believe our financial strength and our leadership in the annuity industry position us for another successful year. Moving on to our results, Net income for the full year 2022 was $5.7 billion, primarily due to adjusted operating earnings and the benefits of higher interest rates throughout the year. Our pre-tax adjusted operating earnings, excluding notable items, was $1.8 billion and reflects the profitability of our retail annuity business. We delivered strong operating margins despite lower equity markets in 2022, margins that benefited from a double-digit decline in operating expenses, primarily driven by lower variable compensation and a decline in asset-based commissions. With over $200 billion in retail annuity account value, our scale and continued focus on operating efficiency position us well to deliver long-term profitability. Jackson's solid operating company results contributed to our strong capital generation and financial flexibility. Our 2022 operating company RBC ratio was 544%. Total adjusted capital was $7 billion, representing a $400 million increase from year-end 2021 after remitting $600 million to the holding company in early 2022. We start 2023 with significant capacity for both continued investment in our business and capital return to shareholders. Therefore, we expect to distribute $600 million from Jackson National Life Insurance Company in March. Consistent with our historical performance and subject to market conditions, we expect to continue to generate excess capital at our operating company that will support our balanced approach to capital management. Our focus continues to be on maintaining a strong capital position, ongoing investment in our business, and a consistent approach to returning capital to shareholders. In 2022, we delivered capital return to shareholders of more than $480 million, including $283 million in share repurchases and $199 million in dividends. Our balanced approach to capital management supports our outlook for future profitability and continued capital return. Yesterday, we announced our board's approval of our shareholder dividend, which was up nearly 13% and represented our second consecutive annual increase. This increase is reflected in our first quarter shareholder dividend of approximately $50 million and highlights our commitment to long-term shareholder return. We strengthened our competitive position with the successful sales expansion of our registered index-linked annuity, or RILA, combined with timely and disciplined pricing actions. Traditional variable annuity sales for Jackson and the industry are below historical levels, reflecting the decline in equity markets and shifting product preferences in a rising interest rate environment. Should that trend persist, we will continue to rely on our experience operating profitably throughout product cycles. In the current competitive environment, our fixed and fixed index annuity offerings provide modest, incremental new sales as we maintain our pricing and investment discipline, while our RILA offerings continue to be a source of sales growth and distribution expansion. We reached $1.8 billion in our first full year of RILA sales and expect these products to remain a steady source of new sales in the future. With $15.7 billion in total annuity sales, we remain a market leader with the capacity to offer a range of products to meet the needs of financial professionals and their clients. Our competitive strength is not built on price competition. but on our consistent presence in the market, a compelling retirement value proposition, strong distribution relationships, and our award-winning customer service. We never explicitly target market share and see our long-term market leading position as an outcome of successfully competing on capabilities. Over the past year, Our distribution strategy included a focus on strengthening our presence among independent registered investment advisors. RIAs are an emerging market for Jackson and the industry, and we ended 2022 with nearly 1,100 RIA firm selling agreements, providing access to more than 10,000 investment advisor representatives. We established three new outsourced insurance desks or OID, distribution partnerships in 2022, further increasing RIA access to our fee-based annuities. These new relationships signify Jackson's ongoing commitment to diversifying and expanding our distribution opportunities. Jackson recently announced that we've been added to iCapital's InsurTech platform, Simon, which provides wealth management firms with increased access to our suite of annuities and product education tools. This platform gives financial professionals increased flexibility to deliver better outcomes as they support the evolving portfolio needs of their clients. We place high value on our distribution partners and seek to maintain a level of service and support that continues to set Jackson apart from others. On past calls, we've shared our history of industry recognition, And we're pleased to announce we've once again been recognized by the Independent Organization Service Quality Measurement, or SQM, with several awards, including highest customer service in the financial industry for 2022. Beyond our strategic initiatives to develop differentiated products and expand distribution, Jackson also seeks to serve financial professionals and their clients by supporting regulatory changes intended to improve Americans' retirement options. This past December, Jackson supported two pieces of legislation passed by Congress to enhance retirement savings opportunities and allow annuities to help Americans meet their retirement needs. Both the RILA Act and Secure 2.0 create opportunities for financial professionals to help their clients better prepare for retirement. The RILA Act directs the SEC to create a new registration form for RILA products, easing a regulatory burden on insurers, allowing for more innovation and choice within the RILA market, and providing consumers with a clearer understanding of the risks and benefits of these products. Now that the RILA Act has passed, Jackson will continue to be a leading voice within the industry to ensure the SEC's new registration form is appropriately tailored to benefit consumers, reduce regulatory barriers, and enable innovation within the RILA market. SECURE 2.0 builds upon the 2019 SECURE Act, expanding opportunities for employees to plan for retirement and presenting income annuities as a valuable solution. Key highlights of the Act include required minimum distribution exceptions for lifetime income annuities, and allowing the use of annuity payments as offsets to required minimum distributions for non-annuity balances. This legislation encourages retirement savings and creates new opportunities for Jackson and others to deliver annuity retirement solutions to Americans planning for a more secure retirement. Our team's relentless efforts allowed us to meet or exceed each of our four key 2022 financial targets. We consistently returned capital to shareholders through share repurchases and paid regular shareholder dividends in our first full year as a public company. We also ended the year with approximately $675 million in holding company cash and liquid securities, well above our $250 million minimum. And we had an adjusted RBC ratio above our targeted range. Leverage was below our 20% to 25% range, which we believe was prudent as we entered 2023. I'll now turn the call over to Marcia to review our financial results in more detail.