Jackson Financial (NYSE:JXN) executives said the company exceeded its 2025 financial targets, set new sales records, and raised its 2026 outlook for both capital generation and shareholder returns during the company’s fourth-quarter earnings call.
Strategic actions: TPG partnership and expanded captive strategy
CEO Laura Prieskorn opened the call by highlighting recently announced strategic actions, including the closing of Jackson’s long-term strategic partnership with TPG. Prieskorn said the partnership is intended to support “accelerated growth” in the company’s spread-based business and increase flexibility. She also pointed to capital efficiency benefits tied to the company’s captive strategy, which management said positions Jackson to build momentum in fixed and fixed index annuities.
During Q&A, Cummings also discussed actions taken at Brooke Re, the company’s captive used for variable annuity guarantees, noting two fourth-quarter transactions that diversified the entity’s liability and capital profile. He said Jackson reinsured about $1.3 billion of payout annuity liabilities on a coinsurance basis, with assets transferred to support the block. He also said the company established Hickory Re as a subsidiary of Brooke Re and ceded roughly $1.2 billion of in-force assets and liabilities into that structure, which holds fixed and fixed index annuity liabilities.
2025 performance: earnings growth, capital generation, and sales records
Prieskorn said 2025 was an “exceptional year,” with Jackson surpassing financial targets and achieving records in sales and distribution. She reported nearly 12% growth in full-year adjusted operating earnings, supported by stable fee income and increased investment spread earnings, and said adjusted operating earnings per share rose over 20% for the year, aided by share repurchases and capital return.
Cummings reported fourth-quarter adjusted operating earnings of $455 million and adjusted operating earnings per share of $6.61. After removing $0.10 of notable items and adjusting for the difference between the company’s actual tax rate and its 15% tax guidance, he said adjusted operating EPS was $6.43, a 33% increase from the prior-year quarter.
Management emphasized capital generation and returns:
- Free capital generation totaled nearly $1.4 billion for 2025, which Cummings said was “well ahead” of the company’s expectation of $1 billion-plus.
- Free cash flow at the holding company was $119 million in the fourth quarter, after funding the $150 million initial capitalization of Hickory Re, and $838 million for the full year.
- Jackson returned $205 million to common shareholders in the fourth quarter and $862 million for the full year, exceeding the top end of its disclosed range, according to management.
Jackson also ended 2025 with over $650 million in holding company liquidity and an RBC ratio of 567%, Prieskorn said. Cummings said holding company cash and investments were $691 million at quarter-end, down from $797 million in the third quarter, primarily reflecting the new captive funding and capital return to shareholders.
Product mix and flows: RILA strength and spread-based momentum
Executives attributed sales momentum to continued expansion in registered index-linked annuities (RILA), along with growth in fixed and fixed index annuities. Prieskorn said Jackson achieved the highest quarterly and annual retail annuity sales since going public, with full-year retail annuity sales of nearly $20 billion, the highest level since 2019. Total retail annuity account values increased 7% to $269 billion at year-end 2025, she said.
In product highlights, Prieskorn said fourth-quarter RILA sales set a record at nearly $2.3 billion, while full-year RILA sales rose 22%. She said RILA account value was $20 billion at year-end 2025, up 14% from the third quarter and 74% from 2024. Cummings said RILA sales were up 53% from the prior-year quarter and 10% sequentially.
Cummings said the company’s newly launched fixed index annuity offering contributed to $812 million of fixed and fixed index annuity sales in the fourth quarter. He also said non-variable annuity net flows were $2.8 billion in the quarter, while variable annuity net outflows remained “somewhat elevated,” citing the “moneyness” of the block, an aging policyholder base, and older sales vintages coming off surrender periods. He said surrender activity improved in the first half of 2025 during volatility but picked up as equity markets reached new highs in the second half, and management expects surrenders to remain closely tied to equity markets.
Cummings added that strong market performance generated over $28 billion of separate account investment performance for the year, more than offsetting variable annuity net outflows and contributing to 2.8% growth in variable annuity account values.
Hedging, assumption review, and GAAP volatility
Cummings walked investors through a quarter in which adjusted operating earnings contrasted with a GAAP pre-tax loss attributable to Jackson Financial of $376 million. He said the company’s total net hedge result for the quarter was a net loss of $405 million, driven largely by equity index implied volatility.
He also provided details on components affecting results, including:
- Guaranteed benefit fees of $800 million in the fourth quarter and $3.1 billion for the full year.
- A $370 million net loss from hedging instruments, driven by losses on interest rate hedges as long-term rates moved higher and losses on variable annuity equity hedges amid modest equity market gains.
- A $405 million MRB loss primarily tied to variable annuity guarantees, with implied volatility cited as the largest driver.
- A $393 million reserve and embedded derivative loss tied to higher RILA reserves in stronger equity markets, which management said was “much” offset by gains on RILA hedges.
Cummings said that after isolating volatility effects, the overall net hedge result was a modest $62 million loss for the quarter.
He also said the annual actuarial assumptions review resulted in an unfavorable impact of $360 million, driven mainly by higher reserves from updated policyholder behavior assumptions, including lapses, partially offset by favorable mortality updates and model refinements. In the adjusted operating framework, however, the annual actuarial assumption review was described as favorable to operating earnings in the quarter; Cummings said it created a $0.23 per share operating earnings benefit versus a $0.31 unfavorable impact in the prior-year quarter, primarily reflecting favorable mortality trends.
2026 targets: higher capital return range and free capital generation outlook
Looking ahead, Prieskorn said Jackson expects its partnership with TPG and captive strategy to contribute to stronger and more stable capital generation. Management set a 2026 target for free capital generation to reach or exceed $1.2 billion, with Cummings noting the outlook assumes 5% equity market returns and interest rates moving in line with the year-end forward curve.
The company also raised its capital return targets for the fifth time since going public, setting a 2026 target range of $900 million to $1.1 billion, compared with $862 million returned in 2025. Prieskorn said the board approved a fifth increase to the quarterly dividend, raising it to $0.90 per share, which she described as nearly a 13% increase over the prior quarterly dividend.
During Q&A, management said it could take “a couple of years” for additional sales to offset variable annuity outflows and reach flat net flows, though Cummings noted that market performance can be a significant swing factor. Executives said they plan to provide updates on progress toward the 2026 targets after the first quarter.
About Jackson Financial (NYSE:JXN)
Jackson Financial Inc is a U.S.-based financial services holding company headquartered in Lansing, Michigan. The company operates primarily through its principal subsidiary, Jackson National Life Insurance Company, and specializes in designing and distributing retirement products. Jackson Financial has been publicly traded on the New York Stock Exchange under the ticker JXN since its initial public offering in May 2022.
The company’s core offerings include a broad range of fixed, variable and indexed annuity products aimed at helping individuals preserve and grow retirement assets.
