Jackson Financial touted progress in the second quarter rebuilding its annuity suite to compete better in a strong sales market.
During a conference call with analysts today, CEO Laura Prieskorn pointed to several positive developments in the second quarter:
Registered index-linked annuity (RILA) sales of $541 million, up from $490 million in the second quarter of 2022.
Total annuity account value of $227 billion, up 9% from the second quarter of 2022, driven largely by higher equity markets over the 12-month period.
The launch of an enhanced Market Link Pro RILA suite in early June “reflects product innovations that have been embraced by the market,” Prieskorn said.
With those successes, Jackson’s bottom line showed adjusted operating earnings of $283 million, compared to $407 million in second quarter of 2022. Jackson reported net income of $1.2 billion, reflecting the benefit of a rising equity market and higher interest rates.
Year-over-year earnings declined due to higher operating and interest expenses, lower spread income from resetting minimum interest crediting rates on variable annuity fixed rate options in 2023, a loss on operating derivatives compared to a gain in the prior year’s second quarter due to higher short-term interest rates, and lower fee income as a result of lower average variable annuity AUM, Jackson said.
In the first quarter 2023, the insurer reported a net income loss of $1.5 billion.
“Overall, I remain pleased with our momentum towards our strategic and operational goals during the second quarter,” Prieskorn said. “We continue to maintain a strong balance sheet and remain committed to achieving our 2023 key financial targets.”
The Lansing, Mich.-based insurer continues to retrench amid market volatility and rising interest rates. Jackson has long been a market leader in the sales of variable annuities, a product line that recorded its lowest annual sales since 1995.
Jackson is expanding its distribution network considerably, Prieskorn said. The insurer added more than 3,200 relationships with new or re-engaged advisors since introducing Jackson Market Link Pro in October 2021, including nearly 1,200 added in the second quarter 2023.
Total annuity sales of $3.1 billion were in line with the first quarter 2023 and down 25% from the second quarter of 2022. Traditional variable annuity sales “have stabilized over recent quarters and were down 33% compared to the second quarter of 2022, primarily due to consumer preferences for asset protection,” Jackson said in a news release.
Jackson benefits from “a broader consumer demographic,” Prieskorn said, “as the average age of a rival policyholder is five years younger than our traditional variable annuity buyer. Overall, the awareness of annuities as a retirement solution continues to grow.”
She pointed to a recent survey, conducted by The Gallup Organization and Mathew Greenwald & Associates, showing that 87% of individual annuity owners agree that annuities are an effective way to save for retirement.
“These surveys not only heightened awareness of the value of annuities, they serve as a tool for key stakeholders in Washington when developing retirement-related legislation and regulatory policy,” Prieskorn said.
Jackson shares rose slightly upon release of the Q2 performance. Shares are down about one-third from a February peak.
Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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