Jackson Financial Inc.

Good morning everyone and welcome to today's conference call titled Jackson Financial Inc. Q2 23 Earnings Call. My name is Ellen and I'll be coordinating the call for today. At the end of today's presentation, there'll be an opportunity to ask a question. If you'd like to ask a question, please press star followed by one on your telephone keypad to join the question queue. If you change your mind and would like to revoke your question, please press star followed by two. I would now like to turn the call over to Liz Warner, Head of Investor Relations to begin. Liz, please go ahead whenever you're ready.

Good morning, everyone, and welcome to Jackson's second quarter earnings call. Today's remarks may contain forward-looking statements which are subject to risks and uncertainties. These statements are not at guarantees of future performance or events and are based upon 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 law, Jackson is under no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change. Today's remarks also refer to certain non-GAAP financial measures. The reconciliation of those 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 on the Investor Relations website at investors.jackson.com. Joining us today are CEO Laura Prescorn, our CFO Marcia Wadston, Our Head of Asset Liability Management and Chief Actuary, Steve Benyures, 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 Preeskorn. Laura Preeskorn Thank you, Liz.

Good morning, everyone, and welcome to our second quarter 2023 earnings call. During today's call, we'll provide an update on our quarterly results and outlook on achieving our financial targets, including our capital return goals. September of this year will mark Jackson's second anniversary as an independent company. Over these last two years, we have consistently returned capital to shareholders every quarter. In the second quarter, we continued to build upon our proven track record by returning $100 million through dividends and share repurchases. In addition to our earnings release, we announced Board approval for a third quarter common dividend of 62 cents per share. By the time we reach our upcoming anniversary in mid-September, we expect to exceed $1 billion in capital return to shareholders, representing nearly 40% of our initial market capitalization. Looking ahead, We remain committed to delivering on our 2023 capital return target of $450 to $550 million as we continue to focus on capital generation and long-term financial strength. Based on our progress through the first six months of the year, we are reiterating our 2023 key financial targets. We ended the second quarter with an RBC ratio up from the prior quarter and within our target range of 425 to 500 percent. We took actions during the quarter to optimize required capital at the operating company, selling certain limited partnership assets from Jackson National Life Insurance Company to Jackson Financial, Inc. And Marsha will provide more detail on this transaction later in the call. We maintained a strong holding company position with nearly $1.5 billion in assets. This includes cash and highly liquid assets of nearly $1 billion with additional liquidity expected over time from the sale of limited partnership assets along with future operating company dividends. We are pleased with our current holding company position, which allows us to meet our November debt maturity and our current year capital return target and provides a strong asset base as we head into 2024. As discussed in the first quarter, Statutory reserving and capital requirements are subject to flooring at the cash surrender value, or CSB, and the economics of our business are not recognized through our capital position. We are actively engaged with our Michigan regulator and are optimistic we will develop a long-term reserves and capital solution that will better reflect the economics of our business and facilitate more efficient risk management. Turning to our second quarter results, net income was $1.2 billion, reflecting the benefit of a rising equity market and higher interest rates. Adjusted operating earnings were $3.34 per share, an increase from the prior quarter due to the rising equity market and a 4% increase in average annuity account values. We remain confident in credit quality across our investment portfolio and have updated the enhanced disclosures provided last quarter with particular emphasis on commercial real estate. We updated the internal valuation of our entire loan portfolio for current property fundamentals and cap rates. The loan to value of the portfolio has increased but remains below 55%. You will see commercial office exposure below 2% of our overall investment portfolio consisting entirely of first mortgage loans rated at the two highest rating levels, CM1 and CM2. Our conservative underwriting and high quality investment portfolio remain a core strength of our business. Retail annuity sales totaled $3.1 billion for the quarter and have been stable the last few quarters. Variable annuity sales were flat from the first quarter, while RILA sales gained momentum. Fixed annuity sales remain relatively modest as our pricing reflects our prudent investment approach. We remain focused on offering products and solutions that meet the long-term retirement needs of financial professionals and their clients. Our most recent enhancement to the Jackson MarketLink Pro Ryla Suite reflects product innovations that have been embraced by the market. Ryla sales reached $540 million in the quarter, up from the first quarter and still climbing. We set a record for Ryla sales in the month of July and continue to benefit from our distribution strength as we grow in this space. Our increasing success in the RILA market has made a positive contribution to our distribution expansion and diversification strategy. We've added over 3,200 relationships with new or re-engaged advisors since introducing this suite of products in October of 2021. This includes nearly 1,200 relationships in the second quarter alone following the launch of our enhanced RILA suite in early June. We also benefit from a broader consumer demographic as the average age of a RILA policyholder is five years younger than our traditional variable annuity buyer. Overall, the awareness of annuities as a retirement solution continues to grow, and we saw increased evidence of this trend in the recently released Committee of Annuity Insurers survey conducted by the Gallup Organization and Matthew Greenwald & Associates. 87% of individual annuity owners agree annuities are an effective way to save for retirement. These surveys not only heighten awareness of the value of annuities, they serve as a tool for key stakeholders in Washington when developing retirement-related legislation and regulatory policies. In July, our leadership was once again highlighted in Barron's annual 100 Best Annuities Guide. Jackson had four products featured across three categories this year, including our Elite Access Advisory 2 and Perspective 2 variable annuity products and our Jackson Market Link Pro RILAS suite, which was highlighted three times as a leading product providing valuable market protections for policyholders. Overall, I remain pleased with our momentum towards our strategic and operational goals during the second quarter. We continue to maintain a strong balance sheet and remain committed to achieving our 2023 key financial targets. Our focus on product innovation led to the successful rollout of an enhanced RILA suite and an expanding distribution network. As a leader in the annuity industry, we will continue to serve financial professionals and their clients' needs for reliable retirement savings and protected income solutions and remain steadfast in our commitment to sustainable growth and long-term value creation for all of our stakeholders. I'll now turn it over to Marcia to review our numbers for the quarter in greater detail.