DEF 14A: Jackson Financial Inc. Aims for Increased Capital Return After Strong 2023 Performance

Jackson Financial Inc. reports exceeding its 2023 financial targets and anticipates a more than 22% increase in capital return to shareholders in 2024.

Summary

• Jackson Financial Inc. exceeded its 2023 key financial targets, including risk-based capital (RBC) ratio, holding company fixed expenses, and capital return to common shareholders.
• The company returned over $1 billion in capital to shareholders since becoming an independent public company in September 2021.
• Jackson's 2023 total shareholder return was in the 100th percentile when compared to other companies within the S&P Insurance Select Industry Index.
• In January 2024, Jackson successfully executed the establishment and funding of a captive reinsurer, Brooke Life Reinsurance Company (Brooke Re), which is expected to optimize hedging, stabilize capital generation, and provide more predictable financial results.
• The company returned $464 million to common shareholders in 2023 through $209 million in dividends and $255 million in share repurchases.
• Jackson is targeting a capital return of $550-$650 million to shareholders in 2024, a more than 22% increase over the prior year range.
• The first quarter dividend was raised to $0.70 per common share in February 2024, a 13% increase over the prior year level and a 40% increase since the initial dividend as an independent public company.
• The company has repurchased over 21% of common shares outstanding at separation at an average price of $37.60 per common share and maintained $301 million in share repurchase authorization at the start of 2024.

Sentiment

Score: 8

Explanation: The document conveys a positive outlook due to strong financial performance, strategic initiatives like Brooke Re, and commitment to shareholder returns. However, it also acknowledges risks and uncertainties inherent in forward-looking statements.

Positives

• Jackson exceeded its key financial targets for 2023.
• The establishment of Brooke Re is expected to improve financial stability and predictability.
• The company has a healthy and profitable book of business.
• Jackson is committed to returning capital to shareholders, with a target increase for 2024.
• The company has been opportunistic with share buybacks, repurchasing a significant percentage of outstanding shares.
• Updates to the executive compensation program were approved to maintain its pay-for-performance focus and further support shareholder alignment.

Risks

• The document mentions the impact of the cash surrender value floor on the RBC ratio and the statutory capital of JNL, though a solution has been implemented.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Future Outlook

Jackson expects to meet its 2024 capital return target of $550-$650 million, supported by the establishment of Brooke Re and a healthy book of business.

Management Comments

• Jackson remained focused on its core strengths and capabilities, delivering another successful year for stakeholders.
• The establishment of Brooke Re should allow for optimized hedging, stabilized capital generation and more predictable financial results going forward.
• Growing free cash flow is critical as we seek strategic opportunities to reinvest in the growth of our business and maximize shareholder value over time.
• Jackson is committed to expanding its role as a leading retirement solutions provider and helping Americans achieve financial freedom for life.

Industry Context

Jackson is positioning itself as a leading retirement solutions provider in a market with increasing demand for retirement income sources, competing with other major players in the insurance and annuity sectors.

Comparison to Industry Standards

• Jackson's total shareholder return was in the 100th percentile when compared to other companies within the S&P Insurance Select Industry Index, indicating superior performance relative to its peers.
• The document does not provide specific comparisons to individual companies, but the peer group used for compensation benchmarking includes American Equity Investment Life, Ameriprise Financial, Brighthouse, CNO Financial, Equitable, Genworth Financial, Guardian Life, Lincoln National, Pacific Life, Principal Financial, Unum Group, and Voya Financial.

Corporate Governance

Stakeholder Impact

• Shareholders are expected to benefit from increased capital returns and strategic initiatives.
• Employees are supported through a human capital management strategy rooted in core values.
• Customers are served through product innovation, strong distribution relationships, and award-winning customer service.
• Communities benefit from corporate giving programs that support nonprofits and improve financial wellness.

Next Steps

• Shareholders are encouraged to participate in the annual meeting on May 23, 2024.
• The company intends to publish the 2023 Corporate Responsibility report in or around May 2024.
• The company intends to continue an open dialogue with shareholders through our regular outreach program in 2024 and beyond.

Key Dates

Keywords

shareholder return, capital return, financial targets, Brooke Re, dividends, share repurchases, executive compensation, retirement solutions, Jackson Financial, RBC ratio, governance