Jackson Financial Inc.

Hello everyone and welcome to the Jackson Financial Inc 2Q24 earnings call. My name is Charlie and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypads. I'll now hand over to our host, Liz Werner, Head of Investor Relations to begin. Liz, please go ahead.

Good morning everyone and welcome to Jackson's second quarter 2024 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 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 page of our website at investors.jackson.com. Joining us today are our CEO, Laura Prescorn, our CFO, Don Cummings, the President of Jackson National Life Distributors, Scott Romine, our Head of Asset Liability Management and Chief Actuary, Steve Benioff, and the 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 Good morning, everyone. As we moved through the second quarter, our operating trends and strong capital levels supported positive financial results and sustainable capital return. Today, we look forward to discussing our second quarter results and progress through the first half of 2024. Beginning on slide three, we achieved positive net income and solid operating earnings growth in the second quarter of 2024, driven by increased fee income from higher average annuity assets under management and higher net investment income. The benefits of a favorable equity market and strong annuity sales contributed to growth from the second quarter of 2023 and from the first quarter of this year. We continue to see successful retail annuity sales across all product lines, demonstrating our continued focus on execution. Jackson provides a range of annuity solutions to advisors and their clients, and in the second quarter of 2024, we saw strong demand for registered index-linked annuities, or RILAs, and traditional variable annuities. Total retail annuity sales grew 36 percent from the second quarter of 2023 and 15 percent from the first quarter of this year. Variable annuity sales benefited from rising equity markets and the opportunity for equity growth available through our commitment to investment freedom. Our second quarter variable annuity sales of $2.7 billion represented a return to a level we last saw in the third quarter of 2022. We continued to build momentum in RILA sales, reaching a record $1.4 billion in the second quarter with an increasing share of new and reactivated advisors selling RILA as their leading annuity solution. demonstrating that RILA continues to be a source of diversification and a product of choice for our financial professionals. We expect Jackson's sales momentum to continue as we focus on providing the best solutions to U.S. retirement savers through our product innovation, strength in distribution, and best-in-class service. Our traditional investment-only variable annuity and RILA products were once again recognized in Barron's annual 100 Best Annuities Guide published in late July. I'm proud that these products were highlighted across three categories for offering exceptional value for policyholders. Preliminary data from industry trade organization, LIMRA, shows the overall U.S. annuity market is expected to set a new sales record in the first half of 2024. According to their recent forecast, Sales of traditional VA are expected to exceed $40 billion in 2024, up more than 15% from 2023, and sales of Ryla are expected to exceed $50 billion in 2024, up approximately 8% from 2023. We're excited about the growth the industry is seeing across product lines as more Americans seek solutions offering guaranteed lifetime income. Critical to this continued growth is a focus on enhancing the digital experience for financial professionals and consumers to strengthen understanding of an annuity's value to a confident and secure retirement. Jackson has a long history of investing in technology, which we believe has contributed to our competitive cost structure and exceptional service delivery for financial professionals and their clients. We are a leader in digital connectivity through data exchanges and integrations within the annuity industry ecosystem. This allows us to connect to an advisor's platform of choice, making annuities more accessible for financial professionals and their clients, and making it easier to do business with Jackson. With a variety of educational tools and information available, Jackson.com serves as a platform for financial professionals to build their practice support their clients, and optimize annuities in their current books of business. The platform also serves clients, helping them to plan their journey more easily toward financial freedom. As an example, we have enhanced the capabilities within our digital ecosystem, a one-stop platform for financial professionals. This digital experience, initially available for our RILA products, allows advisors to illustrate how a RILA could fit within a client's portfolio to meet their specific needs based on customized market scenarios. We have seen substantial growth in activity for this platform, with second quarter 2024 visits up nearly 75% compared to the second quarter of 2023. The success of our RILA digital ecosystem experience has led to stronger sales lead generation contributed to new advisor relationships and furthered our sales momentum. Approximately one-third of our RILA sales this quarter came from producers utilizing our RILA digital ecosystem, clearly demonstrating that financial professionals are relying on our industry-leading technology to provide clients with better information and service. Jackson also plays a leadership role in the Insured Retirement Institute's Digital First for Annuities initiative, helping to establish industry-wide data standards and embracing innovation to ensure financial professionals and clients experience a streamlined and modern approach to retirement planning. We look forward to continuing this important work to enhance the overall digital experience and simplify integration of our products within the industry. Turning back to slide three, during the second quarter of 2024 and excluding the impact of its distribution to JFI, Jackson National Life's total adjusted capital grew by $321 million and for the first half of the year increased by $681 million. Our more stable capital generation continues to reflect the success of Brooke Re. Importantly, This stability supports our balanced approach to capital management, which includes our commitment to shareholder return, maintaining and strengthening our balance sheet, and funding growth through new business and other strategic opportunities. Capital return in the second quarter was $144 million through a combination of common share repurchases and common share dividends. Yesterday, we also announced our board's approval of a $750 million increase to our common share repurchase authorization and a third quarter common stock dividend of 70 cents per share. The expanded share repurchase authorization has no time limit and provides flexibility for capital return into the future. We believe this announcement highlights our commitment to future profitability, capital generation, and long-term shareholder value. You can see our record of consistent capital return on slide four, which totals $1.5 billion since separation, including repurchases of 25% of our common shares at separation. Slide five shows we are on pace to achieve our full year targets for the fourth year in a row. For the second quarter of 2024, Our estimated RBC ratio is between 550% and 570%, well above our minimum of 425%. The greater stability of capital generation will continue to support our approach to more frequent capital distributions than our prior practice of an annual dividend to our holding company. Following this approach, our statutory capital at the end of the second quarter was approximately $4.7 billion after the $250 million distribution from our main operating company, Jackson National Life, in June. At this time, I'd like to turn the call over to our CFO, Don Cummings.