Jackson Financial Inc.

Hello and welcome to the Jackson Financial Incorporated 3Q24 earnings call. My name is Harry and I'll be your operator today. All lines are currently in a listen-only mode and there will be an opportunity for Q&A after management's prepared remarks. If you would like to enter the key for questions, please dial star followed by one on your telephone keypad. I would now like to hand the conference over to Liz Werner, Jackson Head of Investor Relations. Thank you. Please go ahead.

Good morning, everyone, and welcome to Jackson's third 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, and our Chief Actuary, Steve Ben-Yorris. 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.

Good morning, everyone. Today, we will discuss Jackson's third quarter results and progress through the first nine months of the year. Our results reflect diversified and growing annuity sales, recent product and distribution initiatives, and sustainable capital generation. With three operating quarters completed with our captive, Brooke Ree, we're realizing the benefits of greater capital stability, which are evident in our third quarter results. Beginning with slide three, net income was a loss for the third quarter and positive over the full nine months. Importantly, we've experienced less volatility than prior periods with the formation of Brooke Ree and achieved greater alignment between adjusted operating earnings, gap net income, and statutory capital generation. Adjusted operating earnings were up in the third quarter compared to the same period last year and are also up comparatively on a year-to-date basis. Increased fee income combined with greater investment spread income once again supported strong earnings growth in our retail annuity segment. Favorable equity markets and increasing sales resulted in a 9% growth in assets under management through the first nine months to more than $250 billion. The combination of product innovation, risk management, best-in-class service, scale, and strong distribution partnerships continue to provide a solid foundation for sustainable growth. Total retail annuity sales exceeded $5 billion for the third quarter, up 59% from the third quarter of 2023, and up 25% from the second quarter of 2024, marking our highest and most diversified quarter of sales since becoming an independent company in September of 2021. Our RILA segment hit record sales with more than $1.6 billion in the third quarter of 2024, bringing us to more than $4 billion over the first nine months of the year. Jackson MarketLink Pro continues to grow as a RILA product of choice, and after three years of offering this product, we are a top five RILA provider according to Limerick's second quarter 2024 sales rankings. Over the past six months, We have seen additional sales from our new Ryla offering in New York and our Ryla with Living Benefit launched in April of this year. We continue to expand our distribution network, announcing earlier this week that Jackson MarketLink Pro2 is now available to approximately 5,000 financial professionals with JPMorgan Wealth Management. We look forward to providing this important partner and its clients access to Jackson's unique product, and industry leading service as consumer demand for RILA continues to grow. Our traditional variable annuity sales were $2.6 billion for the third quarter and continue to benefit from a favorable equity market with sales up 6% over the first nine months of the year. Jackson continues to meet the demands of a dynamic market, delivering flexible protection and income oriented solutions to Americans planning for retirement. Most recently, we introduced Principal Guard, the Guaranteed Minimum Accumulation Benefit, or GMAB, to our Elite Access Variable Annuity Suite. This benefit provides policyholders the option to add valuable principal protection while maintaining investment flexibility. Our user-friendly digital capabilities also allow advisors and their clients to analyze how our Principal Guard benefit meets the client's needs under a range of individual planning scenarios. We have a long history with fixed and fixed indexed annuities and have consistently offered a full range of competitive products that provide choice, flexibility, and strong consumer value across the annuity spectrum. Our continued monitoring of interest rates supported by our broad retail distribution network and increased capital generation stability with Brook Reimplace enabled us to reengage in this market with targeted distribution partners Delivering 1 billion in spread sales in the third quarter of 2024. These spread sales further diversify our sales mix, contribute to growth in our business, improve our ratings profile, bring new advisors to Jackson, and bring new money to the annuity space. We expect to remain active in the spread business while maintaining our disciplined and balanced approach to capital management. In addition to growth in earnings and sales, we delivered increases in capital generation, holding company cash, and capital return to shareholders. After-tax capital generation grew to $462 million for the third quarter of 2024 and more than $1 billion for the first nine months of the year. Holding company cash approached $650 million, including a $300 million distribution during the quarter from Jackson National Life. Our practice of periodic operating company dividends continues to contribute to our more stable RBC while positioning us to meet our financial objectives. Third quarter capital return rose to $167 million, and we are on track to deliver at the upper half of our $550 to $650 million target for the year. Yesterday, we announced our board's approval of a common stock dividend of $0.70 per share for the fourth quarter of 2024 and repurchased an additional $48 million of common shares between the end of the third quarter and Friday, November 1st. leaving us with an outstanding share repurchase authorization of approximately $684 million. This provides flexibility and visibility into our 2025 opportunities for capital return. As you can see on slide four, we have consistently returned capital to our shareholders through both common shareholder dividends and share repurchases. The pace accelerated in 2024 with year-to-date per share capital return up 52% from the same period in 2023. On a cumulative basis since separation in 2021, we've returned nearly $1.7 billion to shareholders. We've consistently delivered on our capital return commitments while maintaining our financial strength and investing in our business. Our third quarter 2024 sales growth and capital generation were a result of our balanced approach to capital management. Turning to slide five, we are on track to meet our annual financial targets for the fourth year in a row. Our estimated RBC ratio was up slightly from the second quarter and in range of 550 to 570%, well above our minimum of 425%, and at a level to support continued growth. We ended the quarter with over $4.8 billion in statutory capital and believe our financial strength and continued capital generation position us well for future growth and capital return. At this time, I'd like to turn the call over to our CFO, Don Cummings.