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What changed in Jackson Financial Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Jackson Financial Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+645 added−632 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in Jackson Financial Inc.'s 2024 10-K

645 paragraphs added · 632 removed · 470 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

199 edited+91 added−38 removed120 unchanged
Biggest changeIn addition, the SEC announced a number of actions, including forming an enforcement task force designed to harmonize the efforts of the SEC’s divisions and offices, consider potential comprehensive changes to ESG disclosure guidance, announce ESG as an examination priority, address shareholder rights, create accountability in statements and conduct, and solicit comments to potential changes to the “names rule” under the Investment Company Act to reflect the effect of ESG factors on a fund’s investment objectives and performance.
Biggest changeIn addition, among other actions, the SEC solicited comments to potential changes to the “names rule” under the Investment Company Act to reflect the effect of environmental, social and governance factors on a fund’s investment objectives and performance. The Company engages in activities that promote the sustainability of Jackson's business, including positive governance practices.
Business | Competition Competition The insurance industry is highly competitive, with several factors affecting our ability to compete effectively, including the range of products offered, product terms and features, financial strength and credit ratings, brand strength and name recognition, investment management performance and fund management trends, responsiveness to developing demographic trends, customer appetite for certain products and technological advances.
Business | Competition Competition The insurance industry is highly competitive, with several factors affecting our ability to compete effectively, including: • the range of products offered, • product terms and features, • financial strength and credit ratings, • brand strength and name recognition, • investment management performance, • fund management trends, • responsiveness to developing demographic trends, and • customer appetite for certain products and technological advances.
We embed risk management in the business using a three lines model: • Risk Ownership and Management (first line): Our business function leaders have primary ownership of risk management relating to their area of expertise. • Risk Oversight and Challenge (second line): Our Risk team focuses on risk oversight and challenge, especially related to top business, financial and non-financial risks.
We embed risk management in the business using a three lines model: • Risk Ownership and Management (first line): Our business function leaders have primary ownership of risk management relating to their area of expertise. • Risk Oversight and Challenge (second line): Our Risk team focuses on risk oversight and challenge, especially related to top financial, non-financial and business risks.
See Note 10 of Notes to Consolidated Financial Statements for a description of those funding agreements and related collateral requirements. Additionally, we use agreements with the FHLBI to meet near-term liquidity needs, augmenting our repurchase agreement capacity from other counterparties.
See Note 10 of the Notes to Consolidated Financial Statements for a description of those funding agreements and related collateral requirements. Additionally, we use agreements with the FHLBI to meet near-term liquidity needs, augmenting our repurchase agreement capacity from other counterparties.
Risks Related to the Distribution of Our Products Our failure to accurately describe the features and options of our annuities, failure to administer those features and options consistent with their descriptions or mishandling of customer complaints could adversely impact our business, financial condition, results of operations and cash flows.
Risks Related to the Distribution of Our Products Our failure to describe accurately the features and options of our annuities, failure to administer those features and options consistent with their descriptions or mishandling of customer complaints could adversely impact our business, financial condition, results of operations and cash flows.
A decline in the RBC ratio of one or more of our insurance subsidiaries, whether or not it results in a failure to meet applicable RBC requirements, could limit the ability of our insurance subsidiaries’ ability to make dividends or distributions to us, could result in a loss of customers or new business, or could influence ratings agencies to downgrade financial strength ratings, each of which could cause a material adverse effect on our business, financial condition, results of operations and cash flows.
A decline in the RBC ratio of one or more of our insurance subsidiaries, whether or not it results in a failure to meet applicable RBC requirements, could limit our insurance subsidiaries’ ability to make dividends or distributions to us, could result in a loss of customers or new business, or could influence ratings agencies to downgrade financial strength ratings, each of which could cause a material adverse effect on our business, financial condition, results of operations and cash flows.
JNAM and the mutual funds have incurred additional regulatory compliance and reporting expenses as a result, which could reduce investment returns or harm the mutual fund’s ability to implement its investment strategy. Corporate Responsibility Jackson takes a balanced, long-term approach to serving all its stakeholders, including shareholders, business partners, regulators, customers, associates and communities.
JNAM and the mutual funds have incurred additional regulatory compliance and reporting expenses as a result, which could reduce investment returns or harm the mutual fund’s ability to implement its investment strategy. Corporate Responsibility Jackson takes a balanced, long-term approach to serving its stakeholders, including shareholders, business partners, regulators, customers, associates and communities.
In rising interest rate environments, fixed annuities, fixed indexed annuities, variable annuities with a fixed fund option, registered index-linked annuities and institutional products could also expose us to the risk that our asset portfolio yield does not increase as fast as the rates that are credited to policyholders, thereby reducing earnings from those product lines.
In rising interest rate environments, fixed annuities, fixed index annuities, variable annuities with a fixed fund option, registered index-linked annuities and institutional products could also expose us to the risk that our asset portfolio yield does not increase as fast as the rates that are credited to policyholders, thereby reducing earnings from those product lines.
Increased consolidation among banks and other financial services companies could create firms with even stronger competitive positions, negatively impact the insurance industry’s sales, increase competition for access to third-party distributors, result in greater distribution expenses and impair our ability to market our annuities to our current customer base or expand our customer base.
Increased consolidation among banks and other financial services companies could create firms with stronger competitive positions, negatively impact the insurance industry’s sales, increase competition for access to third-party distributors, result in greater distribution expenses and impair our ability to market our annuities to our current customer base or expand our customer base.
Our derivative-based hedging program is used to mitigate financial loss related to the equity market risk associated with guaranteed benefits and equity-linked interest credits. The hedging program could be less effective in mitigating risk during periods of high market volatility, which could have a negative impact on our financial performance.
Risk Factors Our derivative-based hedging program is used to mitigate financial loss related to the equity market risk associated with guaranteed benefits and equity-linked interest credits. The hedging program could be less effective in mitigating risk during periods of high market volatility, which could have a negative impact on our financial performance.
Since that time, it has been the industry’s best-selling investment-only variable annuity. • In 2021, we successfully launched our commission and advisory based suite of RILAs. • All our variable annuities, including our flagship variable annuity, Perspective II, may be purchased without any guaranteed living benefits. • For those products that include optional guaranteed benefits, we focus on living benefits that are easier to manage in terms of risk, such as GMWB and GMWB for Life. • We no longer offer guaranteed living benefits that we believe offer us a lower risk-adjusted return, such as Guaranteed Minimum Income Benefits, or GMIBs; instead, we utilize third-party reinsurance to mitigate the risks that we face relating to those benefits. • We have designed substantially all of our products such that the guarantee fee charged to the customer is calculated based on the benefit base, rather than the account value, which supports our hedging program by stabilizing the guarantee fees we earn. • Less than 4% of our in-force variable annuity policies, based on account value as of December 31, 2023, were sold prior to the 2008 financial crisis, a period when many variable annuities sold by our competitors were uneconomically priced and offered difficult to manage guarantee features.
Since that time, it has been the industry’s best-selling investment-only variable annuity. • In 2021, we successfully launched our commission and advisory based suite of RILAs. • All our variable annuities, including our flagship variable annuity, Perspective II, may be purchased without any guaranteed living benefits. • For those products that include optional guaranteed benefits, we focus on living benefits that are easier to manage in terms of risk, such as GMWB and GMWB for Life. • We no longer offer guaranteed living benefits that we believe offer us a lower risk-adjusted return, such as Guaranteed Minimum Income Benefits ("GMIBs"); instead, we utilize third-party reinsurance to mitigate the risks that we face relating to those benefits. • We have designed substantially all of our products such that the guarantee fee charged to the customer is calculated based on the benefit base, rather than the account value, which supports our hedging program by stabilizing the guarantee fees we earn. • Less than 4% of our in-force variable annuity policies, based on account value as of December 31, 2024, were sold prior to the 2008 financial crisis, a period when many variable annuities sold by our competitors were uneconomically priced and offered difficult to manage guarantee features.
Factors considered in product pricing primarily include expected investment returns, interest rates, market volatility, mortality, longevity, persistency, benefit utilization and operating expenses as well as other features of certain annuity products. Our product pricing models also take into account capital requirements, risk profile, target returns and operating expenses.
Pricing and Reserving: Factors considered in product pricing primarily include expected investment returns, interest rates, market volatility, mortality, longevity, persistency, benefit utilization and operating expenses as well as other features of certain annuity products. Our product pricing models also take into account capital requirements, risk profile, target returns and operating expenses.
We rely on complex models to predict behavior, identify potential risks and estimate financial performance, which models may be ineffective due to incomplete or inaccurate assumptions or errors in data collection, analysis or interpretation that could result in materially inaccurate risk assessments and output. We use complex models to predict customer behavior, identify risks and establish reserves.
Risk Factors We rely on complex models to predict behavior, identify potential risks and estimate financial performance, which models may be ineffective due to incomplete or inaccurate assumptions or errors in data collection, analysis or interpretation that could result in materially inaccurate risk assessments and output. We use complex models to predict customer behavior, identify risks and establish reserves.
Our annuities contain many options and features, and we rely on third-party distributors to describe and explain our products to investors and our customers. There is a risk that we or our distributors fail to describe accurately and completely every feature and option in our contracts, forms, regulatory filings, marketing literature, and other written descriptions.
Our annuities contain many options and features, and we rely on our affiliate and/or third-party distributors to describe and explain our products to investors and our customers. There is a risk that we or our distributors fail to describe accurately and completely every feature and option in our contracts, forms, regulatory filings, marketing literature, and other written descriptions.
Our business is exposed to equity market risk through the guaranteed benefits sold within our variable annuities, and interest credited to fixed indexed annuities and registered index-linked annuities, which can manifest through increased reserves and capital requirements and, ultimately, policyholder payment claims associated with these guarantees and interest credits.
Our business is exposed to equity market risk through the guaranteed benefits sold within our variable annuities, and interest credited to fixed index annuities and registered index-linked annuities, which can manifest through increased reserves and capital requirements and, ultimately, policyholder payment claims associated with these guarantees and interest credits.
We make capital deployment decisions on an ongoing basis, which include growing organically via sales of our products, growing inorganically through acquisitions, returning capital to shareholders, and increasing capital strength. Failure to make decisions about deploying or retaining capital efficiently could result in decreased shareholder value and confidence.
We make capital deployment decisions on an ongoing basis, which include growing organically through sales of our products, growing inorganically through acquisitions, returning capital to shareholders, and increasing capital strength. Failure to make decisions about deploying or retaining capital efficiently could result in decreased shareholder value and confidence.
Our use of financial derivative transactions to hedge risks associated with our operations exposes us to counterparty credit risk that could lead to a financial loss. We enter into derivative contracts with investment banks, creating an obligation for our counterparties to deliver on financial obligations to Jackson.
Risk Factors Our use of financial derivative transactions to hedge risks associated with our operations exposes us to counterparty credit risk that could lead to a financial loss. We enter into derivative contracts with investment banks, creating an obligation for our counterparties to deliver on financial obligations to Jackson.
Risk Factors Our failure to design or maintain products that provide competitive benefits and features or that do not conform to distributor requirements could result in short- or long-term loss of sales, distributor selling agreements, and reputational risk that would adversely impact Jackson’s growth and profitability.
Our failure to design or maintain products that provide competitive benefits and features or that do not conform to distributor requirements could result in short- or long-term loss of sales, loss of distributor selling agreements, and reputational risk that would adversely impact Jackson’s growth and profitability.
Legislation has been introduced from time to time in the U.S. Congress that could result in a more expansive role of regulation of insurance companies. The NAIC has approved and recommended several regulatory initiatives designed to reduce the risk of insurance company insolvencies.
Legislation has been introduced from time to time in the U.S. Congress that could result in a more expansive federal role in the regulation of insurance companies. The NAIC has approved and recommended several regulatory initiatives designed to reduce the risk of insurance company insolvencies.
The California Consumer Privacy Act of 2018 (the “CCPA”) grants all California residents the right to know what information a business has collected from them and the sourcing and sharing of that information, as well as a right to have a business delete their personal information (with some exceptions).
Business | Regulation The California Consumer Privacy Act of 2018 (the “CCPA”) grants all California residents the right to know what information a business has collected from them and the sourcing and sharing of that information, as well as a right to have a business delete their personal information (with some exceptions).
We offer significant career opportunities, competitive merit-based compensation, inclusive practices, world-class facilities, and the ability to work for a purpose-driven organization. Our Company's four corporate values — Empower, Respect, Execute and Create — guide our associate practices and decisions.
We offer significant career opportunities, competitive merit-based compensation, world-class facilities, and the ability to work for a purpose-driven organization. Our Company's four corporate values — Empower, Respect, Execute and Create — guide our associate practices and decisions.
Valuing our Communities We demonstrate our commitment to corporate social responsibility with charitable donations that (i) generate impact in the communities we serve, (ii) engage associates in a culture of philanthropy, and (iii) grow awareness for our commitment to being a good corporate neighbor.
Valuing our Communities We demonstrate our commitment to corporate responsibility with charitable donations that (i) generate impact in the communities we serve, (ii) engage associates in a culture of philanthropy, and (iii) grow awareness for our commitment to being a good corporate neighbor.
Risk Factors JFI and its subsidiaries have significant liquidity needs to support daily cash flows, including operating expenses, interest payments, derivative-based margin requirements and policyholder withdrawals. Jackson is exposed to liquidity risk primarily through its day-to-day business operations.
JFI and its subsidiaries have significant liquidity needs to support daily cash flows, including operating expenses, interest payments, derivative-based margin requirements and policyholder withdrawals. Jackson is exposed to liquidity risk primarily through its day-to-day business operations.
Our RILA offers a number of options for a customizable product, including several combinations of crediting strategies, index options, term lengths, and levels of downside protection in the form of "floors" or "buffers".
Specifically, our RILA offers a number of options for a customizable product, including several combinations of crediting strategies, index options, term lengths, and levels of downside protection in the form of "floors" or "buffers".
Our ability to utilize both in-house and third-party administrative platforms gives us flexibility to convert and administer acquired business efficiently. We believe our operating platform provides a competitive advantage by allowing us to grow efficiently and provide superior customer service. In 2023, Jackson received the Highest Customer Service — Financial Industry award from Service Quality Measurement Group, Inc.
Our ability to utilize both in-house and third-party administrative platforms gives us flexibility to convert and administer acquired business efficiently. We believe our operating platform provides a competitive advantage by allowing us to grow efficiently and provide superior customer service. In 2024, Jackson received the Highest Customer Service — Financial Industry award from Service Quality Measurement Group, Inc.
The value and composition of our assets under management could be adversely affected by several factors including market factors, client preferences, product trends, investment performance, and fee changes, any of which, alone or in the aggregate, could adversely impact our business revenues and results of operations. Prudential plc and its affiliates are significant clients of PPM.
The value and composition of our assets under management could be adversely affected by several factors including market factors, client preferences, product trends, investment performance, and fee changes, any of which, alone or in the aggregate, could adversely impact our business revenues and results of operations. Our former parent, Prudential plc and its affiliates are significant clients of PPM.
We also have rigorous governance processes in place to ensure that we promote equitable pay practices, reinforce strong risk management, and maintain independent oversight of our executive compensation. Associate Health and Well-Being We believe it is important to support our associates and are committed to providing a safe and healthy workplace.
We also have rigorous governance processes in place to ensure that we promote fair pay practices, reinforce strong risk management, and maintain independent oversight of our executive compensation. Associate Health and Well-Being We believe it is important to support our associates and are committed to providing a safe and healthy workplace.
To the extent that an insurance subsidiary’s RBC ratio is deemed to be insufficient, we may seek to take actions either to increase the insurance subsidiary’s capitalization or reduce the capitalization requirements. If we were unable to accomplish such actions, the rating agencies could view this as a reason for a ratings downgrade.
To the extent that an insurance subsidiary’s RBC ratio is deemed to be insufficient, we may seek to take actions either to increase the insurance subsidiary’s capitalization or reduce the capitalization requirements. If we were unable to accomplish those actions, the rating agencies could view this as a reason for a ratings downgrade.
Disruptions or volatility in financial market conditions could negatively impact our liquidity or limit our ability to buy or sell investments and derivative instruments. We rely on liquidity in the financial markets for the trading of fixed income or equity investments and derivatives to acquire, rebalance or liquidate investment positions.
Risk Factors Disruptions or volatility in financial market conditions could limit our ability to buy or sell investments and derivative instruments or negatively impact our liquidity. We rely on liquidity in the financial markets for the trading of fixed income or equity investments and derivatives to acquire, rebalance or liquidate investment positions.
Nonetheless, because the distribution of annuities is primarily through intermediaries, most of which have implemented systems and processes to align to existing state and federal fiduciary and/or best interest standards, we believe that we will have more limited exposure to the 2023 Fiduciary Advice Rule.
Nonetheless, because the distribution of annuities is primarily through intermediaries, most of which have implemented systems and processes to align to existing state and federal fiduciary and/or best interest standards, we believe that we will have more limited exposure to the 2024 Fiduciary Advice Rule.
The business of our investment adviser subsidiaries will be impacted by SEC regulatory initiatives with respect to the investment management business.
Business | Regulation The business of our investment adviser subsidiaries will be impacted by SEC regulatory initiatives with respect to the investment management business.
Smith 56 Executive Vice President of Jackson National Life Insurance Company, a position assumed in September 2022. Mr. Smith continues to serve as President, Chief Executive Officer and Chief Investment Officer of PPM America, Inc., a role assumed in January 2021. Prior to this role, Mr. Smith served as Chief Investment Officer, since 2018. Mr.
Smith 57 Executive Vice President of Jackson National Life Insurance Company, a position assumed in September 2022. Mr. Smith continues to serve as President, Chief Executive Officer and Chief Investment Officer of PPM America, Inc., a role assumed in January 2021. Prior to this role, Mr. Smith served as Chief Investment Officer, since 2018. Mr.
Risk Factors Volatility in credit spreads, or ratings downgrades, defaults, or impairments in our general or separate account assets could negatively impact earnings and statutory capital. Credit spread volatility Tightening credit spreads would reduce the investment yields available on new asset purchases in our general account, impacting our investment income.
Volatility in credit spreads, or ratings downgrades, defaults, or impairments in our general or separate account assets could negatively impact earnings and statutory capital. Credit spread volatility Tightening credit spreads would reduce the investment yields available on new asset purchases in our general account, impacting our investment income.
In addition, rating agencies may implement changes to their own internal models, which differ from the RBC capital model, that have the effect of increasing or decreasing the amount of capital our insurance subsidiaries should hold relative to the rating agencies’ expectations.
Risk Factors In addition, rating agencies may implement changes to their own internal models, which differ from the RBC capital model, that have the effect of increasing or decreasing the amount of capital our insurance subsidiaries should hold relative to the rating agencies’ expectations.
Asset-Liability Management: We use asset-liability duration and cash flow management techniques to ensure that obligations arising from our products will be met when they become due. Such techniques consider current and future investment returns, asset and liability durations, risk tolerance and cash flow requirements.
Asset-Liability Management: We use asset-liability duration and cash flow management techniques to ensure that obligations arising from our products will be met when they become due. These techniques consider current and future investment returns, asset and liability durations, risk tolerance and cash flow requirements.
Business | Regulation Regulators around the world, including U.S. banking regulators and the CFTC, have implemented margin requirements for uncleared derivatives generally in accordance with the recommendations of the Basel Committee on Bank Supervision and International Organization of Securities Commissions.
Regulators around the world, including U.S. banking regulators and the CFTC, have implemented margin requirements for uncleared derivatives generally in accordance with the recommendations of the Basel Committee on Bank Supervision and International Organization of Securities Commissions.
Risk Factors Our products and companies are subject to extensive and potentially conflicting state and federal tax, securities, broker-dealer and broker licensing, insurance and employee benefit plan laws and regulations in the jurisdictions in which we operate. These laws and regulations are complex and subject to change.
Our products and companies are subject to extensive and potentially conflicting state and federal tax, securities, broker-dealer and broker licensing, insurance and employee benefit plan laws and regulations in the jurisdictions in which we operate. These laws and regulations are complex and subject to change.
Further, we are exposed to basis risk, which results from our inability to purchase or sell hedge assets whose performance perfectly matches that of the mutual funds that drive the value of guaranteed benefits. That variance could result in reduced earnings. Also, basis risk may be exacerbated in periods of elevated market volatility.
Further, we are exposed to basis risk, which results from our inability to purchase or sell hedge assets whose performance perfectly matches that of the mutual funds that drive the value of guaranteed benefits. Basis risk could result in reduced earnings and may be exacerbated in periods of elevated market volatility.
Risk Factors If we do not design our products in accordance with applicable law, those products may not achieve the intended objectives and could adversely impact our business, financial condition, and results of operations.
If we do not design our products in accordance with applicable law, those products may not achieve the intended objectives and could adversely impact our business, financial condition, and results of operations.
In some markets, we face competitors that are larger, have greater financial resources or greater market share, have better brand recognition, offer a broader range of products, or have higher crediting rates. Our competitors include major stock and mutual insurance companies, mutual fund organizations, banks, and other financial services companies.
In some markets, we face competitors that are larger, have greater financial resources or greater market share, have better brand recognition, offer a broader range of products, or have higher crediting rates. Our competitors include major stock and mutual insurance companies, private equity-backed insurance companies, mutual fund organizations, banks, and other financial services companies.
Such events and conditions could also have an adverse effect on the availability and cost of reinsurance protections and could affect the availability, cost and effectiveness of hedging instruments resulting in a material adverse impact on our profitability.
Those events and conditions could also have an adverse effect on the availability and cost of reinsurance protections and could affect the availability, cost and effectiveness of hedging instruments resulting in a material adverse impact on our profitability.
As a result of the Dodd-Frank Act, the CFTC has adopted significant regulations changing the way swaps are traded in the U.S., including: • imposing registration requirements on swap dealers and large market participants, known as major swap participants, • subjecting a significant portion of the interest rate swap market and some of the credit default swap index market to mandatory exchange or swap execution facility trading and central clearing requirements, and • imposing new requirements on swap transactions, including trade reporting and recordkeeping, know-your-customer and other sales practices, and documentation for swap transactions entered into with swap dealers and major swap participants. 15 Part I | Item 1.
As a result of the Dodd-Frank Act, the CFTC has adopted significant regulations changing the way swaps are traded in the U.S., including: • imposing registration requirements on swap dealers and large market participants, known as major swap participants, • subjecting a significant portion of the interest rate swap market and some of the credit default swap index market to mandatory exchange or swap execution facility trading and central clearing requirements, and • imposing new requirements on swap transactions, including trade reporting and recordkeeping, know-your-customer and other sales practices, and documentation for swap transactions entered into with swap dealers and major swap participants.
Department of Labor’s Fiduciary Advice Rule The Department of Labor (the “DOL”) issued a regulatory action, effective February 16, 2021, that reinstated the text of the DOL’s 1975 investment advice regulation defining what constitutes fiduciary “investment advice” to Employee Retirement Income Security Act ("ERISA") plans and individual retirement accounts ("IRAs").
Department of Labor’s Fiduciary Advice Rule The DOL issued a regulatory action, effective February 16, 2021, that reinstated the text of the DOL’s 1975 investment advice regulation defining what constitutes fiduciary “investment advice” to Employee Retirement Income Security Act ("ERISA") plans and individual retirement accounts ("IRAs").
An increase in bank, wire house and broker-dealer consolidation activity could increase competition for access to distributors, result in greater distribution expenses and impair our ability to market products through these channels. Any of these changes in distribution could materially and adversely impact our business, financial condition, results of operations.
An increase in bank, wirehouse and broker-dealer consolidation activity could increase competition for access to distributors, result in greater distribution expenses and impair our ability to market products through these channels. Any of these changes in distribution could materially and adversely impact our business, financial condition, and results of operations.
The proposal again extends fiduciary status to one-time rollover recommendations and broadens the circumstances under which financial institutions, including insurance companies, could be considered fiduciaries under ERISA or the Federal income tax code, despite the recent U.S. District Court decision.
The rule again extends fiduciary status to one-time rollover recommendations and broadens the circumstances under which financial institutions and financial professionals, including insurance companies, could be considered fiduciaries under ERISA or the Federal income tax code, despite the recent U.S. District Court decision.
We regularly assess and report on our key risks to our Board's Finance and Risk Committee and have management committees and forums in place to manage and oversee our relevant non-financial risks.
We regularly assess and report on our key risks to the Board's Finance and Risk Committee and have management forums in place to manage and oversee our relevant non-financial risks.
Our "Living Life Well" program helps ensure that Jackson associates are provided supportive health, safety and financial wellness resources both at work and at home. These efforts cultivate a supportive and well-balanced corporate culture and help define the future of our success. The health and safety of our associates is a top priority.
These efforts cultivate a supportive and well-balanced corporate culture and help define the future of our success. Our "Living Life Well" program helps ensure that Jackson associates are provided supportive health, safety and financial wellness resources both at work and at home. These efforts cultivate a supportive and well-balanced corporate culture and help define the future of our success.
Counterparty Risk Management: The inability of a banking, derivative or reinsurance counterparty to satisfy its obligations could expose us to material risk. Collateralization of the value of contracts we hold with a given counterparty serves as a key component of our counterparty risk management strategy. Collateral requirements are specified contractually.
Counterparty Risk Management: The inability of a banking, derivative or reinsurance counterparty to satisfy its obligations could expose us to material risk. A key component of our counterparty risk management strategy is collateralization of the value of contracts we hold with a given counterparty. Collateral requirements are specified contractually.
Our strong presence in multiple distribution channels helps position us as a leading provider of retirement savings and income solutions. According to LIMRA LOMA U.S. Individual Annuity Sales Industry report, for the nine months ended September 30, 2023, we accounted for 12.1% of all sales in the U.S. variable annuity market and ranked #2 in variable annuity sales.
Our strong presence in multiple distribution channels helps position us as a leading provider of retirement savings and income solutions. According to LIMRA LOMA U.S. Individual Annuity Sales Industry report, for the nine months ended September 30, 2024, we accounted for 12.3% of all sales in the U.S. variable annuity market and ranked #2 in variable annuity sales.
Surplus and Capital; RBC Requirements The NAIC has developed RBC standards for life insurance companies as well as a model act for state legislatures to enact.
Business | Regulation Surplus and Capital; RBC Requirements The NAIC has developed RBC standards for life insurance companies as well as a model act for state legislatures to enact.
We may not continue to compete effectively, which could cause a material adverse effect on our business, financial condition, results of operations and cash flows. Risks Related to Legal, Tax and Regulatory Matters Our businesses are heavily regulated and changes in regulation could reduce our profitability and limit our growth. 32 Part I | Item 1A.
We may not continue to compete effectively, which could cause a material adverse effect on our business, financial condition, results of operations and cash flows. 33 Part I | Item 1A. Risk Factors Risks Related to Legal, Tax and Regulatory Matters Our businesses are heavily regulated and changes in regulation could reduce our profitability and limit our growth.
While the final direction of these proposed statutes and regulations is not clear, they could result in additional requirements for Jackson Financial or its subsidiaries. See Item 1C. Cybersecurity - Cybersecurity Risk Management and Strategy. Holding Company Regulation We are subject to regulation under the insurance holding company laws of various jurisdictions.
While the final direction of these proposed statutes and regulations is not clear, they could result in additional requirements for Jackson Financial or its subsidiaries. See Item 1C. Cybersecurity - Cybersecurity Risk Management and Strategy in this Form 10-K. Holding Company Regulation We are subject to regulation under the insurance holding company laws of various jurisdictions.
Patent and Trademark Office. These trademarks and service marks include those entity and product names, that appear in this Form 10-K, and our logo, names of our other products, advisor platforms, optional benefit annuity riders and marketing-related taglines.
These trademarks and service marks include those entity and product names, that appear in this Form 10-K, and our logo, names of our other products, advisor platforms, optional benefit annuity riders and marketing-related taglines.
In any particular year, total adjusted capital amounts and RBC ratios could change due to a variety of factors, including: • the amount of statutory earnings generated by the insurance subsidiary, • the amount of additional capital that an insurer must hold to support business growth, • equity, interest rate, and credit market conditions, • the value and credit ratings of certain fixed income and equity securities in an insurance subsidiary's investment portfolio, and • changes to the RBC formulas and the interpretation of the NAIC’s instructions with respect to RBC calculation methodologies.
In any particular year, total adjusted capital amounts and RBC ratios could change due to a variety of factors, including: • the amount of statutory earnings generated by the insurance subsidiary, • the amount of additional capital that an insurer must hold to support business growth, • equity, interest rate, and credit market conditions, • the value and credit ratings of certain fixed income and equity securities in an insurance subsidiary's investment portfolio, or • changes to the RBC formulas and the interpretation of the NAIC’s instructions with respect to RBC calculation methodologies. 34 Part I | Item 1A.
Business–Regulation–State Insurance Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Distributions from our Insurance Company Subsidiaries.” Failing to deliver on Jackson’s cash obligations, such as policyholder benefits and derivative margin requirements, could have a significant negative impact on its ability to continue to sell products and access derivative markets. 29 Part I | Item 1A.
Business–Regulation–State Insurance Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Distributions from our Insurance Company Subsidiaries.” Failing to deliver on Jackson’s cash obligations, such as policyholder benefits and derivative margin requirements, could have a significant negative impact on its ability to continue to sell products and access derivative markets.
We have more than 2.8 million life and annuity policies and currently administer approximately 79% of our in-force policies on our in-house platform, eliminating the burdens, costs and inefficiencies that would be involved in maintaining multiple legacy administration systems. We also have scalable third-party administration agreements.
We have more than 2.7 million life and annuity policies and currently administer approximately 79% of our in-force policies on our in-house platform, eliminating the burdens, costs and inefficiencies that would be involved in maintaining multiple legacy administration systems. We also have scalable third-party administration arrangements.
The internal audit team is directly overseen by the Jackson Financial Audit Committee and operates pursuant to a charter which is reviewed and approved annually by the Jackson Financial Audit Committee. Risk Appetite and Limits We manage our business under a Board-approved risk appetite that specifies the risk we are willing to accept in pursuit of our objectives.
The Internal Audit team is directly overseen by the Board Audit Committee and operates pursuant to a charter that is reviewed and approved annually by that Committee. Risk Appetite and Limits We manage our business under a Board-approved risk appetite statement (the "Risk Appetite") that specifies the risk we are willing to accept in pursuit of our objectives.
Business | Regulation regulations are designed to protect or benefit the interests of a specific constituency, such as, for example, state insurance laws and regulations that are generally intended to protect or benefit purchasers or users of insurance products.
Generally, these laws and regulations are designed to protect or benefit the interests of a specific constituency, such as, for example, state insurance laws and regulations that are generally intended to protect or benefit purchasers or users of insurance products.
State regulatory authorities generally enforce these provisions through periodic market conduct examinations, with emphasis in recent years on improper life insurance pricing and sales practices, race-based underwriting or sales practices, and misleading sales presentations, targeting the elderly, and product suitability for potential customers.
State regulatory authorities generally enforce these provisions through periodic market conduct examinations, with emphasis in recent years on improper life insurance pricing and sales practices, misleading sales presentations targeting the elderly, and product suitability for potential customers.
Collectively these firms have more than 11,700 investment advisory representatives ("IARs") without a broker-dealer registration . In addition, Jackson National Life Distributors, LLC ("JNLD") is registered as a broker-dealer with the U.S. Securities and Exchange Commission ("SEC"), pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is registered as a broker-dealer in all applicable states.
Collectively these firms have more than 22,000 investment advisory representatives without a broker-dealer registration . In addition, Jackson National Life Distributors, LLC ("JNLD") is a registered broker-dealer with the U.S. Securities and Exchange Commission (the "SEC"), pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is registered as a broker-dealer in all applicable states.
Our ergonomics program supports associate wellness by promoting evidence-based ergonomic principles for associates working remotely or at our offices. At the office, associates also have access to a complete training system and highly qualified team of experts to help associates achieve their personal fitness, nutritional and lifestyle goals.
The health and safety of our associates is a top priority. Our ergonomics program supports associate wellness by promoting evidence-based ergonomic principles for associates working remotely or at our offices. At the office, associates also have access to a complete training system and highly qualified team of experts to help associates achieve their personal fitness, nutritional and lifestyle goals.
If we were required to liquidate these investments on short notice, we could have difficulty doing so and could be forced to sell them for less than we otherwise would have been able to realize, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we were required to liquidate these investments on short notice, we could have difficulty doing so and could be forced to sell them for less than we otherwise would have been able to realize, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 30 Part I | Item 1A.
Prudential and its affiliates represent $24.5 billion or 34% of PPM’s total assets under management. PPM’s investment management agreements with Prudential and its affiliates are terminable at any time or on short notice by either party, and Prudential and its affiliates are under no obligation to maintain any level of assets under management with PPM.
Prudential and its affiliates represent $23.5 billion or 32% of PPM’s total assets under management. PPM’s investment management agreements with Prudential and its affiliates are terminable at any time or on short notice by either party, and Prudential and its affiliates are under no obligation to maintain any level of assets under management with PPM.
The manner of determining the amount of allowances and impairments varies by investment type and is based upon our evaluation and assessment of known and inherent risks associated with a respective asset class.
The manner of determining the amount of allowances and impairments varies by investment type and is based upon our evaluation and assessment of known and inherent risks associated with an asset class.
We facilitate the sale of annuities by RIAs by offering them use of an insurance support desk that satisfies insurance-related licensing and regulatory requirements. We believe there is a significant long-term opportunity to grow annuity sales through RIAs, who managed approximately $7.16 trillion in investor assets at the end of 2022, according to a report by Cerulli Associates.
We facilitate the sale of annuities by RIAs by offering them use of an insurance support desk that satisfies insurance-related licensing and regulatory requirements. We believe there is a significant long-term opportunity to grow annuity sales through RIAs, who managed approximately $8.48 trillion in investor assets at the end of 2023, according to a report by Cerulli Associates.
We may directly receive, or regulatory agencies may receive, customer complaints about service or other issues relating to annuity contracts or insurance policies. Should we fail to review each complaint and investigate the potential causes, the complaint could evolve into a litigated matter, or we could face regulatory fines, penalties, or reputational damage. 31 Part I | Item 1A.
We may directly receive, or regulatory agencies may receive, customer complaints about service or other issues relating to annuity contracts or insurance policies. Should we fail to review each complaint and investigate the potential causes, the complaint could evolve into a litigated matter, or we could face regulatory fines, penalties, or reputational damage.
The National Association of Insurance Commissioners ("NAIC") established model regulations that provide minimum capitalization requirements for insurance companies based on risk-based capital formulas. Each of our U.S. insurance subsidiaries is subject to RBC standards or other minimum statutory capital and surplus requirements imposed under the laws of its respective jurisdiction of domicile.
The NAIC established model regulations that provide minimum capitalization requirements for insurance companies based on risk-based capital formulas. Each of our U.S. insurance subsidiaries is subject to RBC standards or other minimum regulatory capital and surplus requirements imposed under the laws of its respective jurisdiction of domicile.
We typically issue institutional products on an opportunistic basis depending on both the risk-adjusted return on investment opportunities available and the prevailing cost of funding required by customers that purchase our institutional products. For the year ended December 31, 2023, we had institutional product sales of $1.1 billion.
We typically issue institutional products on an opportunistic basis depending on both the risk-adjusted return on investment opportunities available and the prevailing cost of funding required by customers that purchase our institutional products. For the year ended December 31, 2024, we had institutional product sales of $2.0 billion.
If Prudential and its affiliates were to terminate their investment management agreements with PPM, it could cause material disruption in the operations and investment advisory capabilities of PPM, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If Prudential and its affiliates were to terminate their investment management agreements with PPM, it could cause material disruption in the operations and investment advisory capabilities of PPM, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 28 Part I | Item 1A.
SEC-registered investment adviser Jackson National Life Distributors LLC SEC-registered broker-dealer and subject to regulation and supervision by the Financial Industry Regulatory Authority, Inc. (“FINRA”) These laws and regulations affect, among other things, how we conduct business, our permitted investments and financial condition, marketing and investment disclosures, cybersecurity and privacy requirements, and applicable accounting standards.
SEC-registered investment adviser Jackson National Life Distributors LLC SEC-registered broker-dealer and subject to regulation and supervision by the Financial Industry Regulatory Authority ("FINRA") and state securities administrators. These laws and regulations affect, among other things, how we conduct business, our permitted investments and financial condition, marketing and investment disclosures, cybersecurity and privacy requirements, and applicable accounting standards.
We currently operate 21 Occupational, Safety and Health Administration ("OSHA") related programs, in addition to our standard air and water quality programs, in a comprehensive corporate health and safety effort to meet OSHA and American National Standards Institute ("ANSI") Z10-02019 standards.
We currently operate 24 Occupational, Safety and Health Administration ("OSHA") related programs, including our standard air and water quality programs, in a comprehensive corporate health and safety effort to meet OSHA and American National Standards Institute ("ANSI") Z10-02019 standards.
The CPRA, effective January 1, 2023, imposes additional obligations on companies that collect California residents’ personal information, including providing a right to correct personal information, additional protections for certain uses of sensitive personal information, and certain limitations on data use and data sharing that does not involve a sale.
The California Privacy Rights Act (the “CPRA”), effective January 1, 2023, imposes additional obligations on companies that collect California residents’ personal information, including providing a right to correct personal information, additional protections for certain uses of sensitive personal information, and certain limitations on data use and data sharing that does not involve a sale.
As part of their regulatory oversight process, state insurance departments conduct periodic examinations, generally once every three to five years, of the books, records, accounts and business practices of insurers domiciled in their states. Examinations are sometimes carried out in cooperation with other states' insurance regulators under guidelines promulgated by the National Association of Insurance Commissioners (the “NAIC").
Business | Regulation As part of their regulatory oversight process, state insurance departments conduct periodic examinations, generally once every three to five years, of the books, records, accounts and business practices of insurers domiciled in their states. Examinations are sometimes carried out in cooperation with other states' insurance regulators under guidelines promulgated by the NAIC.
Our commitments are described below and with more detail in our annual Corporate Responsibility Report. The Company’s annual Corporate Responsibility Report is not incorporated by reference in, and does not form a part of, this Form 10-K or any other of our SEC filings. 20 Part I | Item 1.
Our commitments are described below and in more detail in our annual Corporate Responsibility Report. The Company’s annual Corporate Responsibility Report is not incorporated by reference in, and does not form a part of, this Form 10-K or any other of our SEC filings.
For example, policyholders of annuity contracts funded with after-tax dollars (“non-qualified”) are able to defer federal income taxation on any gain until it is received. With other savings investments, such as certificates of deposit and taxable bonds, the increase in value is generally taxed each year as it is realized.
For example, policyholders of annuity contracts funded with after-tax dollars (“non-qualified”) are able to defer federal income taxation on any gain until received. With other savings investments, such as certificates of deposit and taxable bonds, the increase in value is generally taxed each year as it is realized. Additionally, life insurance death benefits are generally exempt from income tax.
The industry-leading size of our wholesaling force propels our sales in the traditional variable annuity market to be over triple that of our closest competitor per ISS Market Intelligence's YTD third quarter 2023 Competitor Sales, Staffing and Productivity Benchmarking report. We are increasingly focused on growing sales through our Independent RIAs, Platforms & Agents ("IPA") channel.
The industry-leading size of our wholesaling force propels our sales in the traditional variable annuity market to be more than double that of our closest competitor per ISS Market Intelligence's YTD third quarter 2024 Competitor Sales, Staffing and Productivity Benchmarking report. We are increasingly focused on growing sales through our Independent RIAs, Platforms & Agents ("IPA") channel.
("SQM") for the 12th straight year. According to the Operations Managers’ Roundtable, we ranked 2 nd for overall operational capabilities in 2022 and 2023 by our broker-dealer partners.
("SQM") for the 13th straight year. According to the Operations Managers’ Roundtable, we ranked 2 nd for overall operational capabilities in 2023 and 2024 by our broker-dealer partners.
In recent years, substantial consolidation and convergence among companies in the insurance and financial services industries resulted in increased competition from large, well-capitalized insurance and financial services firms that market products and services similar to ours. These companies and firms compete with us for customers, distribution partners, and employees.
In recent years, increased private equity and venture capital investments as well as substantial consolidation and convergence among companies in the insurance and financial services industries resulted in increased competition from large, well-capitalized insurance and financial services firms that market products and services similar to ours. These companies and firms compete with us for customers, distribution partners, and employees.
Certain information and reports that each of Brooke Life and Jackson has filed with DIFS can be inspected during normal business hours at 530 W. Allegan Street, 7th Floor, Lansing, Michigan.
Certain information and reports that each of Brooke Life and Jackson has filed with DIFS can be inspected during normal business hours at 530 W. Allegan Street, 7th Floor, Lansing, Michigan. 13 Part I | Item 1.
Disruptions in financial markets could have a material adverse effect on our business, financial condition, results of operations and cash flows. We require a significant amount of liquidity to support our hedging program, to satisfy variation margin requirements on hedging positions as well as to cover the initial cost of certain derivatives, such as equity and interest rate options.
Disruptions in financial markets could have a material adverse effect on our business, financial well-being and financial performance. We require a significant amount of liquidity to support our hedging program, satisfy variation margin requirements on hedging positions, and cover the initial cost of certain derivatives, such as equity and interest rate options.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, our efforts to conduct our business in accordance with expectations may involve compromises, at least in the short run. We may fail to meet our ESG commitments or targets. Our policies and processes to evaluate and manage ESG standards in coordination with other business priorities may not be completely effective or satisfy investors, regulators, or other stakeholders.
Biggest changeOur practices may not change in the way or at the rate stakeholders expect. As a result, our efforts to conduct our business in accordance with expectations may involve compromises, at least in the short run. We may fail to meet our corporate responsibility commitments.
These regulatory restrictions could delay, deter, or prevent a potential merger or sale of our company, even if our Board of Directors decides that it is in the best interests of shareholders for us to merge or be sold. These restrictions also could delay sales by us or acquisitions by third parties of our insurance subsidiaries.
These regulatory restrictions could delay, deter, or prevent a potential merger or sale of our company, even if JFI's Board of Directors decides that it is in the best interests of shareholders for us to merge or be sold. These restrictions also could delay sales by us or acquisitions by third parties of our insurance subsidiaries.
Our certificate of incorporation designates the Court of Chancery of the State of Delaware or the federal courts, as applicable, as the sole and exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or shareholders.
Risk Factors Our certificate of incorporation designates the Court of Chancery of the State of Delaware or the federal courts, as applicable, as the sole and exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or shareholders.
We rely on the performance and operations of a number of third-party relationships providing services such as back-office support functions, information technology infrastructure, customer facing operations and services, product distribution and services (including through digital channels), and investment operations.
We rely on the performance and operations of a number of third-party relationships providing services including back-office support, information technology infrastructure, customer facing operations and services, product distribution and services (including through digital channels), and investment operations.
Risk Factors Our inability to recruit, motivate and retain key associates and experienced and productive associates could cause a material adverse effect on our business, financial condition, results of operations and cash flows. Our business depends on our ability to attract, motivate, and retain highly skilled, and often highly specialized, technical, investment, actuarial, managerial, and executive personnel.
Item 1A. Risk Factors Our inability to recruit, motivate and retain key associates and experienced and productive associates could cause a material adverse effect on our business, financial condition, and results of operations. Our business depends on our ability to attract, motivate, and retain highly skilled, and often highly specialized, technical, investment, actuarial, managerial, and executive personnel.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: • any derivative action or proceeding brought on our behalf, • any action asserting a claim of breach of a fiduciary duty owed to us or our shareholders by any of our current or former directors, officers, other associates, agents or shareholders, • any action asserting a claim arising out of or under the Delaware General Corporation Law ("DGCL"), or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware (including, without limitation, any action asserting a claim arising out of or pursuant to our certificate of incorporation or our bylaws), or 38 Part I | Item 1A.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: • any derivative action or proceeding brought on our behalf, • any action asserting a claim of breach of a fiduciary duty owed to us or our shareholders by any of our current or former directors, officers, other associates, agents or shareholders, • any action asserting a claim arising out of or under the Delaware General Corporation Law ("DGCL"), or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware (including, without limitation, any action asserting a claim arising out of or pursuant to our certificate of incorporation or our bylaws), or • any action asserting a claim that is governed by the internal affairs doctrine.
Some of our regulators have proposed ESG rules or announced that they intend to review our practices against ESG standards; others may yet do so. Our investors or other stakeholders may evaluate our practices by ESG criteria that are continually evolving and not always clear. These standards and expectations may also reflect contrasting or conflicting values or agendas.
Some of our regulators have proposed corporate responsibility rules or announced that they intend to review our practices against corporate responsibility standards; others may yet do so. Our investors or other stakeholders may evaluate our practices by corporate responsibility criteria that are continually evolving and not always clear.
Failure to adequately oversee our third-party partners, or the failure of a partner (or of its information technology and operational systems and processes) could result in significant disruption to business operations and customers and could have adverse reputational, regulatory and legal implications, and thus could cause a material adverse effect on our business, financial condition, results of operations and cash flows.
Failure to adequately oversee our third-party partners, or the failure of a partner (or of its information technology and operational systems and processes) could result in significant disruption to business operations impacting customers, and could have adverse reputational, regulatory and legal implications, thereby causing a material adverse effect on our business, financial well-being and financial performance.
Our efforts to meet Environmental, Social, and Governance (“ESG”) standards may not meet investors’ or regulators’ expectations; and our customers, prospective investors or shareholders, or those considering such a relationship with us, may negatively evaluate our business or other practices according to a variety of ESG standards and expectations.
We may not meet investors’ or regulators’ corporate responsibility expectations; and our customers, prospective investors or shareholders, or those considering such a relationship with us, may negatively evaluate our business or other practices according to a variety of corporate responsibility expectations.
We may face adverse regulatory, investor, or other stakeholder scrutiny resulting in business, reputational, or legal challenges. We face direct or indirect effects of, or responses to, climate change. Climate change regulation may affect the prospects of companies and other entities whose securities we hold, the value of those securities, or our willingness to continue to hold those securities.
Risk Factors We could face direct or indirect effects of, or responses to, climate change. Climate change regulation may affect the prospects of companies and other entities whose securities we hold, the value of those securities, or our willingness to continue to hold those securities.
A failure to identify and address these global climate issues and related impacts could cause a material adverse effect on the achievement of our business objectives. 37 Part I | Item 1A. Risk Factors The market price of our common stock could be volatile and could decline.
A failure to identify and address these global climate issues and related impacts could cause a material adverse effect on the achievement of our business objectives. The market price of our common stock could be volatile and could decline. Stock markets are subject to volatility unrelated to the operating performance of particular companies.
Our decisions or priorities must necessarily and simultaneously, consider our business goals and interests. We define our own corporate purpose, in part, by the sustainability of our practices and our impact on all our stakeholders. Our practices may not change in the way or at the rate stakeholders expect.
These standards and expectations may also reflect contrasting or conflicting values or agendas. Our decisions or priorities must necessarily and simultaneously consider our business goals and interests. We define our own corporate purpose, in part, by the sustainability of our practices and our impact on all our stakeholders.
Furthermore, the existence of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of common stock. These provisions could facilitate management entrenchment that could delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our shareholders.
These provisions could facilitate management entrenchment that could delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our shareholders. 40 Part I | Item 1A.
Stock markets have experienced extreme volatility in recent years unrelated to the operating performance of particular companies. These broad market fluctuations could adversely affect the trading price of our common stock.
These broad market fluctuations could adversely affect the trading price of our common stock.
The JFI Privacy Policy is also annually reviewed and updated by management to align with industry best practices and state and federal regulatory requirements. Our cybersecurity program includes a threat and vulnerability management program to identify, assess, prevent, detect, monitor and remediate internal and external threats to, and vulnerabilities of, the Company’s electronic systems, applications and data.
The JFI Privacy Policy is also annually reviewed and updated by management to align with industry best practices and state and federal regulatory requirements. 41 Part I |
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Item 1A. Risk Factors From time to time, proposed tax law changes could, for example, eliminate all or a portion of the income tax advantages described above for annuities and life insurance. If legislation were enacted to eliminate the tax deferral for annuities, such a change would have an adverse effect on our ability to sell our annuities.
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Our policies and processes to evaluate and manage corporate responsibility expectations in coordination with other business priorities may not be completely effective or satisfy investors, regulators, or other stakeholders. We may face adverse regulatory, investor, or other stakeholder scrutiny resulting in business, reputational, or legal challenges. 39 Part I | Item 1A.
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Moreover, if the treatment of annuities were changed prospectively, and the tax-favored status of existing contracts was grandfathered, holders of existing contracts would be less likely to surrender or rollover their contracts. These tax law changes, if implemented, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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Furthermore, the existence of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.
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The Inflation Reduction Act of 2022 (“IRA”) established in 2023 a new 15 percent corporate alternative minimum tax (“CAMT”) on large applicable corporations. The Company is a large applicable corporation and is subject to the tax each year starting in 2023. The implementation of the CAMT contemplates that the U.S. Department of Treasury issues final regulatory guidance.
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It remains difficult to predict the specific final guidance or the definition of adjusted financial statement income.
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In the absence of further guidance, despite our federal net operating loss and foreign tax credit carryforwards, we may be required to pay tax equal to 15 percent of our pre-tax financial statement income, as adjusted by the CAMT, which includes certain items that are non-economic and can fluctuate significantly based on the movement of interest rates and equity markets.
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The CAMT, including the potential impacts of pending regulatory guidance, and any potential future increase in the U.S. corporate income tax rate could have a material adverse effect on our results of operations and cash flows. Our investment advisory agreements with clients are subject to termination or non-renewal on short notice.
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Our investment advisory subsidiaries’ written investment management agreements with their clients are terminable without penalty at any time or upon relatively short notice by either party. Moreover, our investment advisory subsidiaries’ investment management agreements with U.S.
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Securities and Exchange Commission-registered investment companies (each, an “RIC”), including the RICs affiliated with Jackson that serve as the sole investment options for our variable annuities, may be terminated at any time, without payment of any penalty, by each RIC’s Board of Trustees (including a majority of the independent trustees) or by vote of a majority of the outstanding voting securities of the RIC on not more than 60 days’ notice.
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The investment management agreements pursuant to which our investment advisory subsidiaries manage RICs must be renewed and approved by each RICs’ Boards of Trustees or by vote of a majority of the outstanding voting securities of the RIC (including a majority of each RIC’s independent trustees) annually. A significant majority of an RIC’s trustees are independent.
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Consequently, the Board of Trustees of each RIC may not approve the investment management agreement each year or may condition its approval on revised terms that are materially adverse to us.
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Also, as required by the Investment Company Act of 1940, as amended (the “Investment Company Act”), each investment advisory agreement with a RIC automatically terminates upon its assignment, although new investment advisory agreements may be approved by the RIC’s Board of Trustees and shareholders.
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The Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), also requires approval or consent of investment advisory agreements by clients in the event of an assignment of the agreement.
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An “assignment” for purposes of both the Investment Company Act and the Investment Advisers Act includes a sale of a controlling block of the voting stock of the investment adviser or its parent company, or a change in control of the investment adviser.
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If an assignment were to occur, clients may not approve it, which event could have a material adverse effect on our business.
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Changes to comply with new and potential laws or regulations that impose fiduciary or best interest standards in connection with the sale of our products could materially increase our costs, decrease our sales and result in a material adverse impact on our business, financial condition, results of operations and cash flows.
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Regulators continue to propose and adopt fiduciary rules, best interest standards and other similar laws and regulations applicable to the sale of annuities. These rules, standards, laws, and regulations generally require advisers providing investment recommendations to act in the client’s best interest or put the client’s interest ahead of their own interest.
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We face uncertainty regarding the adoption of these rules and regulations and the U.S. Securities and Exchange Commission, the U.S. Department of Labor, and state insurance departments could adopt potentially conflicting or overlapping standards.
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Changes in these standards, rules and laws could lead to changes to our compensation practices and product offerings and increase our litigation risk, which could adversely affect our results of operations and financial condition. See “Item 1. Business—Regulation—Federal Initiatives.” Changes in accounting standards could cause a material adverse effect on our business, financial condition, results of operations and cash flows.
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Our consolidated financial statements are prepared in accordance with U.S. GAAP, the principles of which are revised from time to time. Changes to U.S.
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GAAP could affect the way we account for and report significant areas of our business, impose special demands on us in areas of governance, associate training, internal controls and disclosures, and affect how we manage our business.
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To the extent that such changes affect income, expenses, assets, liabilities or shareholders’ equity, they could adversely affect rating agency metrics and could consequently adversely impact our financial strength ratings 34 Part I | Item 1A. Risk Factors and our ability to incur new indebtedness or refinance our existing indebtedness.
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See Note 2 of Notes to Consolidated Financial Statements for a description of recently adopted and pending changes in accounting principles . Our operating insurance companies are also subject to statutory accounting practices prescribed or permitted by their states of domicile, whose accounting practices are driven by the NAIC.
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Any changes in the method of calculating reserves for our products under statutory accounting practices could result in increases in, and volatility of, reserve and capital requirements. For example, the NAIC is currently working to revise the economic scenarios that are inputs to the calculation of statutory reserves and required capital for many insurance products.
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Those revisions, which are expected to be finalized prior to 2026, could result in a material impact on the level and volatility of our statutory surplus and required statutory capital.
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Legal and regulatory investigations and actions are increasingly common in our industry and could result in a material adverse effect on our business, financial condition, results of operations and cash flows.
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We face a significant risk of litigation and regulatory investigations and actions in the ordinary course of operating our business, including the risk of class action lawsuits, arbitration claims, government subpoenas, regulatory investigations, examinations, actions, and other claims.
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Given the inherent unpredictability of litigation, the unfavorable resolution of one or more pending litigation matters, or future litigation or actions, inquiries, investigations or examinations, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
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Even if we ultimately prevail in any litigation, arbitration, or any action or investigation by governmental authorities or regulators, we could suffer significant reputational harm, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. See Note 16 of Notes to Consolidated Financial Statements for further information.
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Risks Related to Information Technology, Security and Data Our information technology systems could fail, which could cause a material adverse effect on our business, financial condition, results of operations and cash flows. Our business operations depend on the ability to process large numbers of transactions for numerous and diverse products, which requires the effective operation of our information technology systems.
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We employ a large number of complex and interconnected information technology and finance systems, models, and user developed applications in our processes to support our business operations. We also have arrangements in place with third-party suppliers and other service providers with whom we share and receive information.
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We could experience significant impacts to our business operations if our technology lack sufficient system capacity, scalability, stability, or if they underperform, or if our data or technology systems suffer an outage impacting availability, due to a disaster or cyberattack.
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Our systems change management controls may not work as designed, which could result in an unintended change being introduced into a production environment resulting in unexpected effects on functionality, or experience limited availability of one or more systems or devices, or our ability to recover data might be hindered by the impact of a ransomware attack, any or all of which could cause material disruption to normal business operations.
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Our information technology systems, and those of our third-party vendors and service providers, are vulnerable to physical or electronic intrusions, computer viruses, ransomware or other attacks potentially exposing confidential customer or associate data or proprietary business information.
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We are exposed to continuously evolving risks of attempts to disrupt the availability, confidentiality and integrity of our information technology systems, which could result in disruption to key operations or loss of the availability, confidentiality or integrity of customer, associate, or other data.
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We have been, and likely will continue to be, subject to potential damage from computer viruses, attempts to access confidential information, including customer data, and cybersecurity attacks such as “denial of service” attacks, phishing, sophisticated and automated attacks, and other disruptive software campaigns.
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Our security measures, including information security policies, standards, administrative, technical, and physical controls, associate training and other preventative actions may not fully protect us from such events. See "Item 1C. Cybersecurity" for more information.
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Customer, associate or representative data, or strictly confidential or proprietary non-public business information could be disclosed to unauthorized parties due to associate error, a cyberattack ( i.e. , hacking, phishing, malware, etc.), or through a third-party relationship, resulting in financial losses, regulatory fines, and impact to our reputation.
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Increased cybersecurity threats and computer crime also pose a risk of litigation, regulatory investigations, and other penalties. Data privacy is subject to frequently changing rules and regulations regarding the handling of personal data.
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Any breach in the security of our information technology systems could result in the disclosure or misuse of confidential or proprietary business information, including sensitive customer, supplier, or associate data maintained in the ordinary course of our business.
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Any such event, or any failure to comply with these data privacy requirements or other laws in this area, 35 Part I | Item 1A. Risk Factors could cause damage to our reputation, or loss of revenue and could result in legal liability or penalties.
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In addition, we could incur large expenditures to investigate, remediate, and recover networks or information systems and protect against similar future events. We retain confidential information in our information systems and in cloud-based systems (including customer transactional data and personal data about our distribution partners, customers, and our own associates).
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We rely on commercial technologies and third parties to maintain the security of those systems. Anyone who circumvents our security measures and penetrates our information systems, or the cloud-based systems we use, has and could access, view, misappropriate, alter or delete any information in the systems, including customer data and proprietary business information.
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It is possible that an associate, contractor, or representative could, intentionally or unintentionally, disclose or misappropriate personal data or other confidential information. Our associates, distribution partners and other third-party partners use portable computers or mobile devices that could contain similar information to that in our information systems, and these devices have been and could be lost, stolen or damaged.
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Any compromise of our information technology systems or of the third-party partners' systems that results in the unauthorized access or disclosure of personal data or proprietary business information could damage our reputation in the marketplace, deter customers from purchasing our products, subject us to civil and criminal liability and require us to incur significant technical, legal and other expenses, any of which could cause a material adverse effect on our business, financial condition, results of operations, and cash flows.
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Jackson is exposed to the risk of incomplete, inaccurate, or misinterpreted data being utilized for reporting or decision-making purposes. Our business depends on the performance of complex information technology systems and the effective management and use of quality and reliable data.
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This data could become incomplete, inaccurate, or misinterpreted due to inadequate or failed internal and external processes, systems or deliberate human actions, inactions, or error, resulting in misinterpretation of the data or inability to make strategic or timely decisions, which could cause a material adverse effect on our business, financial condition, results of operations and cash flows.
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The use of artificial intelligence processes may introduce errors in analysis and decision-making and cause adverse effects on our business, financial condition, results of operations and cash flows. Generative artificial intelligence is a new use of technology that potentially offers opportunities for businesses to gain efficiencies, pursue growth opportunities, or improve customer, employee or other stakeholder experiences.
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We are selectively exploring its use where it can provide meaningful benefit to our business.
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If employed, it could inherently create risks such as biased, discriminatory or otherwise unfair decision-making, misrepresent data leading to negative impacts on decision-making, or be subject to cyberattacks, any of which could result in a material adverse effect on our business, regulatory fines and impact to our reputation.
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In addition, new and currently unforeseeable regulatory issues could also arise due to the developing and uncertain regulatory environment. General Risk Factors Adverse outcomes from the operational risks inherent in our business could disrupt our business, and have a negative impact on our business, financial condition, results of operations and cash flows.
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Operational risks are inherent to our businesses and include direct or indirect losses resulting from inadequate or failed internal and external processes, systems or deliberate human actions, inactions, or error. Our policies and procedures may not be fully effective in identifying, monitoring, or mitigating our risk exposure against all types of risk.
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We are exposed to risks related to natural and man-made disasters and catastrophes, diseases, epidemics, pandemics, malicious acts, terrorist acts, civil unrest, and global climate change. We face exposure from the effects of natural or man-made catastrophic events (such as natural disasters, pandemics like COVID-19, cyber-attacks, acts of terrorism, civil unrest, and other catastrophes), and other external events.
Removed
These risks could also adversely impact us through our distribution partners and our third-party relationships that provide outsourcing services such as policy administration, technology, and data hosting and administration.
Removed
Jackson could suffer a major and prolonged business interruption, impacting its ability to deliver on its commitments to customers and other stakeholders, due to a disruption to the communication or utility infrastructures, availability or accessibility of our business locations or people due to a variety of natural or man-made events or actions.
Removed
If associates are unable to perform regular business operations, we could suffer a significant business interruption, negatively impacting customers or other stakeholders. 36 Part I | Item 1A.
Removed
Risk Factors • any action asserting a claim that is governed by the internal affairs doctrine.
Removed
Key components of this security program include a 24/7 Security Operations Center, which is managed internally at Jackson, with staff augmentation from third-party service vendors. The Security Operations Center monitors threats and attacks and initiates the incident response management process and associated notifications, as needed.
Removed
In addition to monitoring threats and attacks, our internal management team reviews daily external threat intelligence and oversees, at least quarterly, external penetration testing of our Company’s electronic systems.
Removed
We provide training to all associates and regularly audit and assess our program with both internal and external resources, and through benchmarking studies and assessments against our Information Security and Privacy Policies and Standards. We have a third-party vendor management program that oversees the identification and assessment of cybersecurity risk for the Company’s use of all third-party service providers.
Removed
This program evaluates third-party vendors based on their level of access to the Company’s data and the level of potential risk the third-party service providers create for the organization through reviews of their security program and systems architecture.
Removed
The Company identifies monitoring and mitigating controls and implements such controls where appropriate for any identified risks, including adding robust security terms in agreed contracts. We also monitor and periodically reassess third-party service vendors to ensure controls are maintained to expectations. 39 Part I |

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+7 added−6 removed4 unchanged
Biggest changeGovernance JFI’s Board Oversight of Risks from Cybersecurity Threats: JFI’s Board approved both the Company’s initial JFI Information Security Policy and the JFI Privacy Policy. The Finance and Risk Committee of the JFI Board assists the Board with oversight of the Company’s risk framework and its effectiveness.
Biggest changeThe Finance and Risk Committee of the JFI Board assists the Board with oversight of the Company’s risk framework and its effectiveness. The Finance and Risk Committee regularly reviews top risks identified by management, the Company’s Risk Appetite, and financial and non-financial risks, including information security and cybersecurity.
Regular independent third-party assessments, penetration testing, and internal audits are conducted to validate controls and to position our cybersecurity maturity level at or ahead of industry trends in meeting stringent security standards.
Cybersecurity Regular independent third-party assessments, penetration testing, and internal audits are conducted to validate controls and to position our cybersecurity maturity level at or ahead of industry trends in meeting stringent security standards.
Our Information Security and Privacy Team includes 70 full-time positions with at least 50% of our associates holding industry certifications, such as the Certified Information Systems Security Professional (CISSP), Certified Information Security Manager (CISM), and Certified Information Privacy Professional (CIPP).
Our Information Security and Privacy Team includes over 70 full-time positions with at least 50% of our associates holding relevant industry certifications, such as the Certified Information Systems Security Professional (CISSP), Certified Information Security Manager (CISM), and Certified Information Privacy Professional (CIPP).
All associates and contractors with access to our Company’s systems receive comprehensive initial and ongoing annual training on responsible information security, data security, and cybersecurity practices and how to protect against cyber threats.
All associates and contractors with access to our Company’s systems receive comprehensive initial and ongoing annual training on responsible information security, data security, and cybersecurity practices and how to protect against cyber threats. 42 Part I | Item 1C.
Certain of these control activities are also subject to an assessment by our external auditor to support its opinion on the effectiveness of our internal control over financial reporting. 40 Part I | Item 2. Properties
Certain of these control activities are also subject to an assessment by our external auditor to support its opinion on the effectiveness of our internal control over financial reporting.
At least annually, and more often as needed, the committee meets with our Chief Information Security Officer (“CISO”) in a dedicated session to review and discuss in-depth cybersecurity risks facing the Company.
The committee also reviews activity reports on the status of our cybersecurity program, including material policy changes, breaches, and remediation actions. At least annually, and more often as needed, the committee meets with our Chief Information Security Officer (“CISO”) in a dedicated session to review and discuss in-depth cybersecurity risks facing the Company.
Removed
Item 1C. Cybersecurity Cybersecurity Incidents As previously disclosed in Item 2.
Added
Item 1C. Cybersecurity Our cybersecurity program includes a threat and vulnerability management program to identify, assess, prevent, detect, monitor and remediate internal and external threats to, and vulnerabilities of, the Company’s electronic systems, applications and data.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Macroeconomic, Industry and Regulatory Trends — Cybersecurity Event in our Form 10-Q for the quarter ended June 30, 2023, Jackson determined that its information at one of our third-party vendors, Pension Benefit Information, LLC (“PBI”), was impacted by a cybersecurity breach involving Progress Software Corporation’s MOVEit Transfer software.
Added
Key components of this security program include a 24/7 Security Operations Center, which is managed internally at Jackson, with staff augmentation from third-party service vendors. The Security Operations Center monitors threats and attacks and initiates the incident response management process and associated notifications, as needed.
Removed
The PBI service helps Jackson to identify possible beneficiaries for death benefits. According to PBI, an unknown actor exploited a MOVEit software flaw to access PBI’s systems and download certain data. Our assessment indicated that personally identifiable information relating to approximately 850,000 of Jackson’s customers was obtained by that unknown actor from PBI’s systems.
Added
In addition to monitoring threats and attacks, our internal management team reviews daily external threat intelligence and oversees, at least quarterly, external penetration testing of our Company’s electronic systems.
Removed
PBI informed Jackson that it rectified the MOVEit vulnerability. Separately, Jackson experienced unauthorized access to two servers as a result of the MOVEit flaw; however, the scope and nature of the data accessed on those servers was significantly less than the PBI impact.
Added
We provide training to all associates and regularly audit and assess our program with both internal and external resources, and through benchmarking studies and assessments against our Information Security and Privacy Policies and Standards. We have a third-party vendor management program that oversees the identification and assessment of cybersecurity risk for the Company’s use of all third-party service providers.
Removed
Our assessment was that a subset of information relating to certain partner organizations and individuals, including certain customers of Jackson, was obtained from the two affected servers. At this time, we do not believe the incidents or related litigation will have a material adverse effect on the business, operations, or financial results of Jackson Financial.
Added
This program evaluates third-party vendors based on their level of access to the Company’s data and the level of potential risk the third-party service providers create for the organization through reviews of their security program and systems architecture.
Removed
The Finance and Risk Committee regularly reviews top risks identified by management, the Company’s risk appetite, and financial and non-financial risks, including information security and cybersecurity. The committee also reviews activity reports on the status of our cybersecurity program, including material policy changes, breaches, and remediation actions.
Added
The Company identifies monitoring and mitigating controls and implements such controls where appropriate for any identified risks, including adding robust security terms in agreed contracts. We also monitor and periodically reassess third-party service vendors to ensure controls are maintained to expectations.
Added
Cybersecurity Incidents We are not aware of any material cybersecurity events that are likely to have a material effect on our business strategy, results of operation or financial condition. Governance JFI’s Board Oversight of Risks from Cybersecurity Threats: JFI’s Board approved both the Company’s initial JFI Information Security Policy and the JFI Privacy Policy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe our properties are adequate and suitable for our business as currently conducted and are adequately maintained. All of our offices include operations across all of our reporting segments.
Biggest changeWe believe our properties are adequate and suitable for our business as currently conducted and are adequately maintained. All of our offices include operations across all of our reportable segments.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For a discussion of legal proceedings, see Note 16 - Commitments and Contingencies of Notes to Consolidated Financial Statements included under Item 8. Financial Statements and Supplementary Data of this Form 10-K , which is incorporated herein by reference.
Biggest changeItem 3. Legal Proceedings For a discussion of legal proceedings, see Note 16 - Commitments and Contingencies of the Notes to Consolidated Financial Statements included under Item 8. Financial Statements and Supplementary Data of this Form 10-K , which is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

119 edited+43 added−28 removed59 unchanged
Biggest changeThe information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report: Years Ended December 31, 2023 2022 2021 (in millions) Institutional Products: Operating Revenues Net investment income $ 474 $ 312 $ 260 Income (loss) on operating derivatives (50) (22) (3) Total Operating Revenues 424 290 257 Operating Benefits and Expenses Interest credited on other contract holder funds, net of deferrals and amortization 334 201 188 Interest expense 16 5 — Operating costs and other expenses, net of deferrals 5 5 5 Total Operating Benefits and Expenses 355 211 193 Pretax Adjusted Operating Earnings $ 69 $ 79 $ 64 The following table summarizes a roll-forward of activity affecting account value for our Institutional Products segment for the periods indicated: Years Ended December 31, 2023 2022 2021 (in millions) Institutional Products: Balance as of beginning of period $ 9,019 $ 8,830 $ 11,138 Premiums and deposits 1,065 2,398 475 Surrenders, withdrawals, and benefits (2,050) (2,358) (2,915) Net flows (985) 40 (2,440) Credited Interest 334 201 188 Policy Charges and other 38 (52) (56) Balance as of end of period $ 8,406 $ 9,019 $ 8,830 61 Part II | Item 7.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations | Segment Results of Operations The following table summarizes a roll-forward of activity affecting account value for our Institutional Products segment for the periods indicated: Years Ended December 31, 2024 2023 2022 (in millions) Institutional Products: Balance as of beginning of period $ 8,406 $ 9,019 $ 8,830 Premiums and deposits 2,000 1,065 2,398 Surrenders, withdrawals, and benefits (2,270) (2,050) (2,358) Net flows (270) (985) 40 Interest credited 338 334 201 Policy Charges and other (90) 38 (52) Balance as of end of period $ 8,384 $ 8,406 $ 9,019 Year Ended December 31, 2024 compared to Year Ended December 31, 2023 Pretax Adjusted Operating Earnings Pretax adjusted operating earnings increased $27 million to $96 million for the year ended December 31, 2024 from $69 million for the year ended December 31, 2023 primarily due to a $26 million increase in spread income primarily due to $30 million higher investment income, partially offset by $4 million higher interest credited on contract holder funds.
Our profitability is dependent on our ability to properly price and manage risk on insurance and annuity products, to manage our portfolio of investments effectively, and to control costs through expense discipline. Due to funds withheld reinsurance arrangements, including the Athene Reinsurance Transaction, we hold significant assets whose investment performance accrues to the benefit of the related reinsurer.
Our profitability is dependent on our ability to properly price and manage risk on insurance and annuity products, manage our portfolio of investments effectively, and control costs through expense discipline. Due to funds withheld reinsurance arrangements, including the Athene Reinsurance Transaction, we hold significant assets whose investment performance accrues to the benefit of the related reinsurer.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments Investments Our investment portfolio primarily consists of fixed-income securities and loans, primarily publicly-traded corporate and government bonds, private securities and loans, asset-backed securities and mortgage loans. Asset-backed securities include mortgage-backed and other structured securities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments Investments Our investment portfolio primarily consists of fixed-income securities and loans, publicly-traded corporate and government bonds, private securities and loans, asset-backed securities and mortgage loans. Asset-backed securities include mortgage-backed and other structured securities.
Government actions, including responses to future pandemics, civil unrest, tariffs or other barriers to international trade, and the effects that these or other government events could have on levels of U.S. economic activity, could also impact our business through any of their individual impacts on consumers’ behavior or on financial markets.
Government actions, including responses to future pandemics, civil unrest, tariffs, sanctions or other barriers to international trade, and the effects that these or other government events could have on levels of U.S. economic activity, could also impact our business through any of their individual impacts on consumers’ behavior or on financial markets.
It reflects the total amount of customer invested assets that have accumulated within a respective product and equals cumulative customer contributions, which includes gross deposits or premiums, plus accrued credited interest plus or minus the impact of market movements, as applicable, less withdrawals and various fees.
It reflects the total amount of customer invested assets that have accumulated within a respective product and equals cumulative customer contributions, which includes gross deposits or premiums, plus accrued credited interest plus or minus the impact of equity market movements, as applicable, less withdrawals and various fees.
Corporate and Other Corporate and Other includes the operations of PPM Holdings, Inc., the holding company of PPM, and unallocated corporate revenue and expenses, as well as certain eliminations and consolidation adjustments. The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for Corporate and Other.
Corporate and Other Corporate and Other includes the operations of PPM Holdings, Inc., the parent holding company of PPM, and unallocated corporate revenue and expenses, as well as certain eliminations and consolidation adjustments. The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for Corporate and Other.
Also, shifts in the credit quality or credit rating downgrades of our investments as a result of stressed credit conditions may also impact the level of regulatory required statutory capital for our insurance company subsidiaries.
Also, shifts in the credit quality or credit rating downgrades of our investments as a result of stressed credit conditions may impact the level of regulatory required capital for our insurance company subsidiaries.
See “Non-GAAP Financial Measures” below for information regarding our non-GAAP financial measures and reconciliations to the most comparable U.S. GAAP measures. 44 Part II | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | Executive Summary We manage our business through three segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks.
See “Non-GAAP Financial Measures” below for information regarding our non-GAAP financial measures and reconciliations to the most comparable U.S. GAAP measures. 46 Part II | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | Executive Summary We manage our business through three segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks.
Closed Life and Annuity Blocks The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Closed Block Life and Annuity Blocks segment.
Closed Life and Annuity Blocks The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Closed Life and Annuity Blocks segment.
Financial Statements and Supplementary Data — Note 3 - Segment Information of Notes to Condensed Consolidated Financial Statements for further information on our segments. An understanding of several key operating measures, including sales, account value, net flows, benefit base and assets under management ("AUM"), is helpful in evaluating our results. See “Key Operating Measures” below.
Financial Statements and Supplementary Data — Note 3 - Segment Information of the Notes to Consolidated Financial Statements for further information on our segments. An understanding of several key operating measures, including sales, account value, net flows, benefit base and assets under management ("AUM"), is helpful in evaluating our results. See “Key Operating Measures” below.
T he following regulations could materially impact our business: Department of Labor Fiduciary Advice Rule See Part I, Item I Business—Regulation—"Federal Initiatives Impacting Insurance Companies—Department of Labor’s Fiduciary Advice Rule" for a discussion of the 2023 Fiduciary Advice Rule. Legislative Reforms In recent years, Congress approved legislation beneficial to our business model.
T he following regulations could materially impact our business: Department of Labor Fiduciary Advice Rule See Part I, Item I Business—Regulation—"Federal Initiatives Impacting Insurance Companies—Department of Labor’s Fiduciary Advice Rule" for a discussion of the 2024 Fiduciary Advice Rule. Legislative Reforms In recent years, Congress approved legislation beneficial to our business model.
Jackson retains the variable annuity base contract, the annuity contract administration of the ceded business, and responsibility for investment management of the assets in the funds withheld account supporting the ceded liabilities. Brooke Re paid a ceding commission of approximately $1.2 billion to Jackson in connection with the execution of the reinsurance transaction.
Jackson retains the variable annuity base contract, the annuity contract administration of the ceded business, and responsibility for investment management of the assets in the funds withheld account supporting the ceded liabilities. Brooke Re recorded a ceding commission of approximately $1.2 billion to Jackson in connection with the execution of the reinsurance transaction.
Financial Statements and Supplementary Data -- Note 5 – Derivative Instruments of Notes to Consolidated Financial Statements, which presents the aggregate contractual or notional amounts and the fair values of our freestanding and embedded derivatives instruments as of December 31, 2023 and 2022. Evaluation of Invested Assets We perform regular evaluations of our invested assets.
Financial Statements and Supplementary Data — Note 5 – Derivative Instruments of the Notes to Consolidated Financial Statements, which presents the aggregate contractual or notional amounts and the fair values of our freestanding and embedded derivatives instruments as of December 31, 2024 and 2023. Evaluation of Invested Assets We perform regular evaluations of our invested assets.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Common Stock Performance Graph The graph and table, below, compare the total return on our common stock with the total return on the S&P Global Ratings (“S&P”) 500, S&P 500 Insurance, S&P 500 Financials, and S&P Insurance Select Industry indices, respectively, between September 20, 2021 (the date that our common stock commenced regular way trading on the NYSE) through December 31, 2023.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Common Stock Performance Graph The graph and table, below, compare the total return on our common stock with the total return on the S&P Global Ratings (“S&P”) 500, S&P 500 Insurance, S&P 500 Financials, and S&P Insurance Index Select Industry Total Return indices, respectively, between September 20, 2021 (the date that our common stock commenced regular way trading on the NYSE) through December 31, 2024.
Brooke Re is a Michigan captive insurer regulated by the Michigan Department of Insurance and Financial Services and created in the first quarter of 2024 for the express purpose of serving as the counterparty to the reinsurance transaction previously described with Jackson.
Brooke Re is a Michigan captive insurer regulated by the Michigan Department of Insurance and Financial Services and created in the first quarter of 2024 for the express purpose of serving as the counterparty to the reinsurance transaction with Jackson described above.
The reinsurance transaction eliminates upon consolidation at JFI. Holding company liquidity at JFI was not impacted by the transactions.
The reinsurance transaction eliminates upon consolidation at JFI. Holding company liquidity at JFI was not impacted by the transaction.
The transaction provides for the cession from Jackson to Brooke Re of liabilities associated with certain guaranteed benefit riders under our variable annuity contracts and similar products of Jackson (“market risk benefits”), both in-force on the effective date of the reinsurance agreement and written in the future ( i.e. , on a “flow” basis) as well as related future fees, claims and other benefits, and maintenance expenses in exchange for a ceding commission for the in-force business.
The transaction primarily provides for the cession from Jackson to Brooke Re of liabilities associated with certain guaranteed benefit riders under variable annuity contracts and similar products of Jackson (“market risk benefits”), both in-force on the transaction effective date and written in the future ( i.e. , on a “flow” basis) as well as related future fees, claims and other benefits, and maintenance expenses in exchange for a ceding commission for the in-force business.
Treasury securities, while lower yielding than other alternatives, provide a higher level of liquidity and play a role in managing our interest rate exposure. 64 Part II | Item 7.
Treasury securities, while lower yielding than other alternatives, provide a higher level of liquidity and play a role in managing our interest rate exposure. 67 Part II | Item 7.
Change in Value of Funds Withheld Embedded Derivative and Net investment income on funds withheld assets: Composed of: (i) the change in fair value of funds withheld embedded derivatives, and (ii) net investment income on funds withheld assets related to funds withheld reinsurance transactions. 4.
Change in Value of Funds Withheld Embedded Derivative and Net investment income on funds withheld assets: Composed of: (i) the change in fair value of funds withheld embedded derivatives, and (ii) net investment income on funds withheld assets related to funds withheld reinsurance transactions. 6.
We believe excluding these items removes the impact to both revenue and related expenses associated with Guaranteed Benefits and Net Hedging Results. 2.
We believe excluding these items removes the impact to both revenue and related expenses associated with Net Hedging Results. 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments Debt Securities At December 31, 2023 and December 31, 2022, the amortized cost, allowance for credit loss, gross unrealized gains and losses, and fair value of debt securities, including trading securities and securities carried at fair value under the fair value option, were as follows (in millions): December 31, 2023 Amortized Cost Allowance for Credit Loss Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities $ 5,154 $ — $ 3 $ 845 $ 4,312 Other government securities 1,622 — 1 221 1,402 Corporate securities Utilities 5,598 — 42 513 5,127 Energy 2,946 — 24 272 2,698 Banking 2,204 1 23 148 2,078 Healthcare 2,985 — 20 338 2,667 Finance/Insurance 4,392 13 31 429 3,981 Technology/Telecom 2,058 1 10 191 1,876 Consumer goods 2,395 — 21 285 2,131 Industrial 1,609 — 14 112 1,511 Capital goods 1,838 — 14 127 1,725 Real estate 1,572 — 6 153 1,425 Media 1,082 — 4 109 977 Transportation 1,381 — 7 157 1,231 Retail 1,197 — 6 132 1,071 Other (1) 2,211 — 14 119 2,106 Total Corporate Securities 33,468 15 236 3,085 30,604 Residential mortgage-backed 422 6 12 53 375 Commercial mortgage-backed 1,569 — 1 147 1,423 Other asset-backed securities 4,830 — 6 309 4,527 Total Debt Securities $ 47,065 $ 21 $ 259 $ 4,660 $ 42,643 (1) No single remaining industry exceeds 3% of the portfolio. 66 Part II | Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments December 31, 2023 Amortized Cost Allowance for Credit Loss Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. government securities $ 5,154 $ — $ 3 $ 845 $ 4,312 Other government securities 1,622 — 1 221 1,402 Corporate securities Utilities 5,598 — 42 513 5,127 Energy 2,946 — 24 272 2,698 Banking 2,204 1 23 148 2,078 Healthcare 2,985 — 20 338 2,667 Finance/Insurance 4,392 13 31 429 3,981 Technology/Telecom 2,058 1 10 191 1,876 Consumer goods 2,395 — 21 285 2,131 Industrial 1,609 — 14 112 1,511 Capital goods 1,838 — 14 127 1,725 Real estate 1,572 — 6 153 1,425 Media 1,082 — 4 109 977 Transportation 1,381 — 7 157 1,231 Retail 1,197 — 6 132 1,071 Other (1) 2,211 — 14 119 2,106 Total Corporate Securities 33,468 15 236 3,085 30,604 Residential mortgage-backed 422 6 12 53 375 Commercial mortgage-backed 1,569 — 1 147 1,423 Other asset-backed securities 4,830 — 6 309 4,527 Total Debt Securities $ 47,065 $ 21 $ 259 $ 4,660 $ 42,643 (1) No single remaining industry exceeds 3% of the portfolio.
Our financial performance can be adversely affected by market volatility and equity market declines if fees assessed on the account value of our annuities fluctuate, hedging costs increase and revenues decline due to reduced sales and increased outflows.
Our financial performance can be adversely affected by market volatility and equity market declines if fees assessed on the account value of our annuities fluctuate, hedging costs increase, or revenues decline due to reduced sales and increased outflows. Equity Market Environment Our financial performance is impacted by equity market performance.
We experience net income volatility due to the fact that we do not directly use hedging to offset the movement in our U.S. Generally Accepted Accounting Principles ("GAAP") market risk benefit liabilities as market conditions change from period to period.
We experience net income volatility because we do not directly use hedging to offset the movement in our U.S. generally accepted accounting principles ("U.S. GAAP") market risk benefit liabilities as market conditions change from period to period.
Accrued interest amounting to $2 million and nil were written off as of December 31, 2023 and 2022, respectively, relating to loans that were greater than 90 days delinquent or in the process of foreclosure.
Accrued interest amounting to $1 million and $2 million were written off as of December 31, 2024 and 2023, respectively, relating to loans that were greater than 90 days delinquent or in the process of foreclosure.
New federal and state regulations could impact our business model, including statutory reserve and capital requirements. Our ability to respond to changes in regulation and other legislative activity are critical to our long-term financial performance.
New federal and state regulations could impact our business model, including regulatory reserve and capital requirements. Our ability to respond to changes in regulation and other legislative activity is critical to our long-term financial performance.
Net Realized Investment Gains and Losses: Comprised of: (i) realized investment gains and losses associated with the periodic sales or disposals of securities, excluding those held within our trading portfolio, and (ii) impairments of securities, after adjustment for the non-credit component of the impairment charges. 54 Part II | Item 7.
Net Realized Investment Gains and Losses: Comprised of: (i) realized investment gains and losses associated with the periodic sales or disposals of securities, excluding those held within our trading portfolio, and (ii) impairments of securities, after adjustment for the non-credit component of the impairment charges. 5.
See " Policy and Contract Liabilities" below for further information regarding our actuarial assumption changes .
See " Policy and Contract Liabilities" below for further information regarding our actuarial assumption updates .
Adjusted Book Value Attributable to Common Shareholders excludes Preferred Stock and AOCI attributable to Jackson Financial, which does not include AOCI arising from investments held within the funds withheld account related to the Athene Reinsurance Transaction. 55 Part II | Item 7.
Adjusted Book Value Attributable to Common Shareholders excludes Preferred Stock and AOCI attributable to Jackson Financial, which does not include AOCI arising from investments held within the funds withheld account related to the Athene Reinsurance Transaction.
Variable annuity net flows were more than offset by an increase in AUM, as defined below, due to market performance in 2023. 49 Part II | Item 7.
Variable annuity net flows were more than offset by an increase in AUM, as defined below, due to market performance in 2024. 51 Part II | Item 7.
We report certain activities and items that are not included in these segments, including the results of PPM Holdings, Inc., the holding company of PPM America Inc. ("PPM"), which manages the majority of our general account investment portfolio, in Corporate and Other. See Item 8.
We report in Corporate and Other activities and items that are not included in those three segments, including the results of PPM Holdings, Inc., the parent holding company of PPM America Inc. ("PPM"), that manages the majority of our general account investment portfolio. See Item 8.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview This executive summary of Management’s Discussion and Analysis of Financial Condition and Results of Operation highlights selected information and may not contain all the information that is important to current or potential investors in our securities.
Item 6. [Reserved] 45 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The following executive summary of Management’s Discussion and Analysis of Financial Condition and Results of Operation highlights selected information and may not contain all the information that is important to current or potential investors in our securities.
Brooke Re was capitalized with assets contributed from Brooke Life of approximately $1.9 billion originating from Jackson as a return of capital to Brooke Life. Brooke Re will utilize a modified GAAP approach primarily related to market risk benefits, with the intent to increase alignment between assets and liabilities in response to changes in economic factors.
Brooke Re was capitalized with assets contributed from Brooke Life of approximately $1.9 billion originating from Jackson as a return of capital to Brooke Life. Brooke Re utilizes a modified U.S. GAAP approach for regulatory reporting purposes primarily related to market risk benefits, with the intent to increase alignment between assets and liabilities in response to changes in economic factors.
Adjusted Operating Earnings Adjusted Operating Earnings is an after-tax non-GAAP financial measure, which we believe should be used to evaluate our financial performance on a consolidated basis by excluding certain items that may be highly variable from period to period due to accounting treatment under U.S.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Non-GAAP Financial Measures Adjusted Operating Earnings Adjusted Operating Earnings is an after-tax non-GAAP financial measure, which we believe should be used to evaluate our financial performance on a consolidated basis by excluding certain items that may be highly variable from period to period due to accounting treatment under U.S.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Non-GAAP Financial Measures We exclude AOCI attributable to Jackson Financial from Adjusted Book Value Attributable to Common Shareholders because our invested assets are generally invested to closely match the duration of our liabilities, which are longer duration in nature, and, therefore we believe period-to-period fair market value fluctuations in AOCI to be inconsistent with this objective.
We exclude AOCI attributable to Jackson Financial from Adjusted Book Value Attributable to Common Shareholders because our invested assets are generally invested to closely match the duration of our liabilities, which are longer duration in nature, and therefore we believe period-to-period fair market value fluctuations in AOCI to be inconsistent with this objective.
Financial Statements and Supplementary Data -- Note 8 - Reinsurance of Notes to Consolidated Financial Statements for further details . We may also use other third-party investment managers for certain niche asset classes. As of December 31, 2023, Apollo managed $16.6 billion of cash and investments and other third-party investment managers managed approximately $218 million of investments.
Financial Statements and Supplementary Data — Note 8 - Reinsurance of the Notes to Consolidated Financial Statements for further details . We may also use other third-party investment managers for certain niche asset classes. As of December 31, 2024, Apollo managed $13.4 billion of cash and investments and other third-party investment managers managed approximately $278 million of investments.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments The Company’s mortgage loans that are current and in good standing are accruing interest. Interest is not accrued on loans greater than 90 days delinquent and in process of foreclosure, when deemed uncollectible. Delinquency status is determined from the date of the first missed contractual payment.
The Company’s mortgage loans that are current and in good standing are accruing interest. Interest is not accrued on loans greater than 90 days delinquent or in process of foreclosure, when deemed uncollectible. Delinquency status is determined from the date of the first missed contractual payment.
Equity Market Environment Our financial performance is impacted by equity market performance. On our variable annuities, the fees we earn that are not associated with guaranteed benefits are mainly based on the account value, which changes with equity market levels.
On our variable annuities, the fees we earn that are not associated with guaranteed benefits are mainly based on the account value, which changes with equity market levels.
Account Value Retail annuities account value, net of reinsurance, increased $25.5 billion between periods primarily due to positive variable annuity separate account returns driven by favorable market performance in 2023, as well as positive RILA net flows over the period.
Account Value Retail annuities account value, net of reinsurance, increased $16.2 billion between periods primarily due to positive variable annuity separate account returns driven by favorable market performance in 2024, as well as positive RILA and fixed annuity net flows over the period.
In addition, if credit conditions deteriorate due to a recession or other negative credit events in capital markets, we could experience an increase in defaults and other-than-temporary-impairments (“OTTI”). OTTI in our underlying investments would result in a reduction in TAC held by our insurance company subsidiaries.
In addition, if credit conditions deteriorate due to a recession or other negative credit events in capital markets, we could experience an increase in defaults and other-than-temporary-impairments (“OTTI”). OTTI in our underlying investments would reduce our insurance company subsidiaries' regulatory capital.
The following table summarizes our holdings: December 31, 2023 2022 (in millions) Common Stock $ 17 $ 82 Preferred Stock 175 133 Mutual Funds 202 178 Total $ 394 $ 393 Mortgage Loans At December 31, 2023, commercial mortgage loans were collateralized by properties located in 36 states, the District of Columbia, and Europe.
The following table summarizes our holdings: December 31, 2024 2023 (in millions) Common Stock $ 18 $ 17 Preferred Stock 151 175 Mutual Funds 28 202 Total $ 197 $ 394 Mortgage Loans At December 31, 2024, commercial mortgage loans were collateralized by properties located in 36 states, the District of Columbia, and Europe.
This means maximizing risk-adjusted return within the context of a largely fixed income portfolio while also managing exposure to downside risk in a stressed environment, regulatory and rating agency capital models, overall portfolio yield, diversification and correlation with other investments and company exposures.
This means maximizing risk-adjusted return within the context of a largely fixed income portfolio while also managing exposure to downside risk in a stressed environment, regulatory and rating agency capital models, overall portfolio yield, diversification and correlation with other investments and company exposures. The investments within our investment portfolio are primarily managed by PPM, our wholly-owned registered investment advisor.
GAAP and should not be viewed as a substitute for the U.S. GAAP financial measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies.
Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies. These non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with U.S.
In addition, sales of our institutional products were lower compared to the year ended December 31, 2022, reflecting our opportunistic approach to this business, depending on both the risk-adjusted return on investment opportunities available and the prevailing cost of funding required by purchasers. 47 Part II | Item 7.
In addition, sales of our institutional products were higher for the year ended December 31, 2024, reflecting our opportunistic approach to this business, which depends on both the risk-adjusted return on investment opportunities available and the prevailing cost of funding required by purchasers. 49 Part II | Item 7.
(1) 1,196 1,272 (1,073) Adjusted Book Value Attributable to Common Shareholders $ 10,833 $ 9,918 $ 6,568 ROE Attributable to Common Shareholders 10.3 % 69.7 % 44.1 % Adjusted Operating ROE Attributable to Common Shareholders on average equity 10.6 % 16.2 % 32.8 % (1) Excludes $(1,612) million, $(2,106) million and $287 million related to the investments held within the funds withheld account related to the Athene Reinsurance Transaction as of December 31, 2023, 2022 and 2021, respectively, which are not attributable to Jackson Financial Inc. and are therefore not included as an adjustment to total shareholders’ equity in the reconciliation of Adjusted Book Value Attributable to Common Shareholders to total shareholders’ equity. 56 Part II | Item 7.
(1) 1,925 1,196 1,272 Adjusted Book Value Attributable to Common Shareholders $ 11,156 $ 10,833 $ 9,918 ROE Attributable to Common Shareholders 9.4 % 10.3 % 69.7 % Adjusted Operating ROE Attributable to Common Shareholders on average equity 12.9 % 10.6 % 16.2 % (1) Excludes $(1,597) million, $(1,612) million and $(2,106) million related to the investments held within the funds withheld account related to the Athene Reinsurance Transaction as of December 31, 2024, 2023 and 2022, respectively, which are not attributable to Jackson Financial Inc. and are therefore not included as an adjustment to total shareholders’ equity in the reconciliation of Adjusted Book Value Attributable to Common Shareholders to total shareholders’ equity.
Share repurchases, net of issuances for our share-based compensation, have reduced our outstanding shares of common stock from 82,690,098 at December 31, 2022 to 78,660,221 at December 31, 2023. See Item 8.
Share repurchases, net of issuances for our share-based compensation, have reduced our outstanding shares of common stock from 78,660,221 at December 31, 2023 to 73,380,643 at December 31, 2024. See Item 8.
Management believes that the use of these non-GAAP financial measures, together with relevant U.S. GAAP financial measures, provides a better understanding of our results of operations, financial condition and the underlying performance drivers of our business. These non-GAAP financial measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with U.S.
GAAP financial measures, provides a better understanding of our results of operations, financial condition and the underlying performance drivers of our business. These non-GAAP financial measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for the U.S. GAAP financial measures.
GAAP measure: Years Ended December 31, 2023 2022 2021 (in millions) Net income (loss) attributable to Jackson Financial Inc. common shareholders $ 899 $ 6,186 $ 3,417 Adjusted Operating Earnings 1,073 1,454 2,179 Total shareholders' equity $ 10,170 $ 8,646 $ 7,641 Less: Preferred stock 533 — — Total common shareholders' equity 9,637 8,646 7,641 Adjustments to total common shareholders’ equity: Exclude AOCI attributable to Jackson Financial Inc.
GAAP measure: Years Ended December 31, 2024 2023 2022 (in millions, except percentages) Net income (loss) attributable to Jackson Financial Inc. common shareholders $ 902 $ 899 $ 6,186 Adjusted Operating Earnings 1,443 1,073 1,454 Total shareholders' equity $ 9,764 $ 10,170 $ 8,646 Less: Preferred stock 533 533 — Total common shareholders' equity 9,231 9,637 8,646 Adjustments to total common shareholders’ equity: Exclude AOCI attributable to Jackson Financial Inc.
As credit spreads widen, the fair value of our existing investment portfolio generally decreases, although we generally expect the widening spreads to increase the yield on new fixed income investments. Conversely, as credit spreads tighten, the fair value of our existing investment portfolio 52 Part II | Item 7.
As credit spreads widen, the fair value of our existing investment portfolio generally decreases, although we generally expect the widening spreads to increase the yield on new fixed income investments. Conversely, as credit spreads tighten, the fair value of our existing investment portfolio generally increases, and the yield available on new investment purchases decreases.
Finally, we are affected by various economic, industry and regulatory trends , which are described below under “Macroeconomic, Industry and Regulatory Trends.” The table below presents selected financial and operating measures: Years Ended December 31, 2023 2022 (in millions, except percentages) Total Sales $ 13,898 $ 18,135 Assets Under Management ("AUM") 315,838 290,549 Net income (loss) attributable to Jackson Financial Inc. common shareholders 899 6,186 Adjusted Operating Earnings (1) 1,073 1,454 Capital Returned to Common Shareholders 464 482 Return on Equity ("ROE") Attributable to Common Shareholders 10.3 % 69.7 % Adjusted Operating ROE Attributable to Common Shareholders on average adjusted book value (1) 10.6 % 16.2 % Jackson statutory risk-based capital (2) 624 % 544 % (1) Non-GAAP Financial Measure.
Finally, we are affected by various economic, industry and regulatory trends , which are described below under “Macroeconomic, Industry and Regulatory Trends.” The table below presents selected financial and operating measures: Years Ended December 31, 2024 2023 (in millions, except percentages) Total Sales $ 19,849 $ 13,898 Assets Under Management ("AUM") 324,718 315,838 Net income (loss) attributable to Jackson Financial Inc. common shareholders 902 899 Adjusted Operating Earnings (1) 1,443 1,073 Capital Returned to Common Shareholders 631 464 Return on Equity ("ROE") Attributable to Common Shareholders 9.4 % 10.3 % Adjusted Operating ROE Attributable to Common Shareholders on average adjusted book value (1) 12.9 % 10.6 % Jackson statutory risk-based capital ratio (2) 572 % 624 % (1) Non-GAAP Financial Measure.
You should read this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the "Form 10-K") in its entirety for a more detailed description of events, trends, uncertainties, risks and critical accounting estimates affecting us.
You should read this Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "Form 10-K") in its entirety for a more detailed description of events, trends, uncertainties, risks and critical accounting estimates affecting us. Discussion related to the Company's comparison of 2023 results to 2022 results of operations has been omitted in this Form 10-K.
The following table provides a summary of the allowance for credit losses related to our mortgage loans: December 31, 2023 2022 (in millions) Balance at beginning of period $ 95 $ 94 Charge offs, net of recoveries (1) (66) — Provision (release) (1) 136 1 Balance at end of period $ 165 $ 95 (1) At December 31, 2023, the $70 million net increase in allowance for credit losses is due to an increase in expected credit losses, primarily in the office sector. 69 Part II | Item 7.
The following table provides a summary of the allowance for credit losses related to our mortgage loans: December 31, 2024 2023 (in millions) Balance at beginning of period $ 165 $ 95 Charge offs, net of recoveries (1) (3) (66) Provision (release) (1) (41) 136 Balance at end of period $ 121 $ 165 (1) At December 31, 2024 and 2023, the $(44) million net decrease and $70 million net increase in allowance for credit losses is due to the change in expected credit losses, primarily in the office sector.
As of December 31, 2023, 89% of our policy and contract liabilities were in our Retail Annuities segment, 3% were in our Institutional Products segment and 8% were in our Closed Life and Annuity Blocks segment. 70 Part II |
As of December 31, 2024, 90% of our policy and contract liabilities were in our Retail Annuities segment, 3% were in our Institutional Products segment and 7% were in our Closed Life and Annuity Blocks segment. 73 Part II |
The amortized cost of debt securities, available-for-sale, decreased from $48,798 million as of December 31, 2022 to $44,843 million as of December 31, 2023. Further, net unrealized losses, after adjusting for allowance for credit loss, were $6,286 million as of December 31, 2022 compared to $4,401 million as of December 31, 2023.
The amortized cost of debt securities, available-for-sale, increased to $44,976 million at December 31, 2024 from $44,843 million as of December 31, 2023. Further, net unrealized losses, after adjusting for allowance for credit loss, were $4,679 million as of December 31, 2024, compared to $4,401 million as of December 31, 2023.
Interest Rate Environment The interest rate environment has affected, and will continue to affect, our business and financial performance for the following reasons: • Periods of sharp rises in interest rates, as we have seen as a result of the Federal Reserve’s past actions, impact investment-related activity including investment income returns, net investment spread results, new money rates, mortgage loan prepayments, and bond redemptions.
Interest Rate Environment The interest rate environment has affected, and will continue to affect, our business and financial performance for the following reasons: • Periods of rising interest rates impact investment-related activity, including investment income returns, net investment spread results, new money rates, mortgage loan prepayments, and bond redemptions .
The following tables and discussion represent an overall view of our results of operations for each segment. Pretax Adjusted Operating Earnings by Segment The following table summarizes pretax adjusted operating earnings (non-GAAP) from the Company's business segment operations and also provides a reconciliation of the segment measure to net income on a consolidated GAAP basis. Also, see Item 8.
Pretax Adjusted Operating Earnings by Segment The following table summarizes pretax adjusted operating earnings (non-GAAP) from the Company's business segment operations and also provides a reconciliation of the segment measure to net income on a consolidated U.S. GAAP basis. Also, see Item 8.
In addition, our hedges could be less effective in periods of large directional movements or we could experience more frequent or more costly rebalancing in periods of high volatility, which would lead to adverse performance versus our 51 Part II | Item 7.
In addition, our hedges could be less effective in periods of large directional movements, or we could experience more frequent or more costly rebalancing in periods of high volatility, which would lead to adverse performance versus our hedge targets and increased hedging costs.
Residential mortgage loans were collateralized by properties located in 50 states, the District of Columbia, Mexico, and Europe.
Residential mortgage loans were collateralized by properties located in 49 states, the District of Columbia, Mexico, and Europe. 70 Part II | Item 7.
Macroeconomic, Industry and Regulatory Trends We discuss a number of trends and uncertainties below that we believe could materially affect our future business performance, including our results of operations, our investments, our cash flows, and our capital and liquidity position. Macroeconomic and Financial Market Conditions Our business and results of operations are affected by macroeconomic factors.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Macroeconomic, Industry and Regulatory Trends Macroeconomic, Industry and Regulatory Trends We discuss a number of trends and uncertainties below that we believe could materially affect our future business performance, including our results of operations, our investments, our cash flows, and our capital and liquidity position. See Part IA.
The Company's comparison of 2022 results to 2021 results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 1, 2023, (the "2022 Annual Report"), as recast to reflect the adoption of LDTI in our Current Report on Form 8-K filed May 10, 2023, under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations .
The Company's comparison of 2023 results to 2022 results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, (the "2023 Annual Report"), under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. Jackson Financial Inc.
See Executive Summary above for more information regarding the Brooke Re Transaction. • Low interest rate environments could also subject us to increased hedging costs or an increase in the amount of statutory reserves that our insurance subsidiaries are required to hold for optional guaranteed benefits, decreasing statutory surplus, which would adversely affect our insurance subsidiaries' ability to pay dividends.
This in turn may lead to reduced sales volumes. • Low interest rate environments could also subject us to increased hedging costs or an increase in the amount of regulatory reserves that our insurance subsidiaries are required to hold for optional guaranteed benefits, decreasing regulatory surplus, which would adversely affect our insurance subsidiaries' ability to pay dividends.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Key Operating Measures Assets Under Management AUM, or assets under management, refers to investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by PPM, including our investment portfolio (but excluding assets held in funds withheld accounts for reinsurance transactions) and third-party assets (including our former parent and its affiliates) and (ii) the separate account assets of our Retail Annuities segment managed and administered by one of our subsidiaries, Jackson National Asset Management LLC ("JNAM").
Assets Under Management AUM, or assets under management, includes: (i) investment assets managed by one of our subsidiaries, PPM, including our investment portfolio (but excluding assets held in funds withheld accounts for reinsurance transactions) and third-party assets (including our former parent and its affiliates) and (ii) the separate account investment assets of our Retail Annuities segment managed and administered by another subsidiary, JNAM.
We utilize repurchase and reverse repurchase transactions as a part of our overall portfolio management program to assist with collateral requirements associated with our hedging program and other liquidity needs of our insurance subsidiaries. The investments within our investment portfolio are primarily managed by PPM, our wholly-owned registered investment advisor.
We utilize repurchase and reverse repurchase transactions as a part of our overall portfolio management program to assist with collateral requirements associated with our hedging program and other liquidity needs of our insurance subsidiaries.
GAAP measure: Years Ended December 31, 2023 2022 2021 (in millions) Net income (loss) attributable to Jackson Financial Inc common shareholders $ 899 $ 6,186 $ 3,417 Add: dividends on preferred stock 35 — — Add: income tax expense (benefit) 4 1,505 666 Pretax income (loss) attributable to Jackson Financial Inc 938 7,691 4,083 Non-operating adjustments (income) loss: Guaranteed benefits and hedging results: Fees attributable to guarantee benefit reserves (3,125) (3,077) (2,855) Net movement in freestanding derivatives 4,651 2,744 5,674 Market risk benefits (gains) losses, net (3,897) (3,536) (3,966) Net reserve and embedded derivative movements 787 222 141 Amortization of DAC associated with non-operating items at date of transition to LDTI 591 658 737 Total guaranteed benefits and net hedging results (993) (2,989) (269) Net realized investment (gains) losses 554 359 (182) Net realized investment (gains) losses on funds withheld assets 1,801 (2,186) 21 Net investment income on funds withheld assets (1,174) (1,254) (1,188) Other items 39 22 36 Total non-operating adjustments 227 (6,048) (1,582) Pretax adjusted operating earnings 1,165 1,643 2,501 Less: operating income tax expense (benefit) 57 189 322 Adjusted operating earnings before dividends on preferred stock 1,108 1,454 2,179 Less: dividends on preferred stock 35 — — Adjusted operating earnings $ 1,073 $ 1,454 $ 2,179 Adjusted Book Value Attributable to Common Shareholders and Adjusted Operating ROE Attributable to Common Shareholders We use Adjusted Operating Return on Equity ("ROE") Attributable to Common Shareholders to manage our business and evaluate our financial performance that: (i) excludes items that vary from period to period due to accounting treatment under U.S.
GAAP measure: Years Ended December 31, 2024 2023 2022 (in millions) Net income (loss) attributable to Jackson Financial Inc common shareholders $ 902 $ 899 $ 6,186 Add: dividends on preferred stock 44 35 — Add: income tax expense (benefit) 46 4 1,505 Pretax income (loss) attributable to Jackson Financial Inc 992 938 7,691 Non-operating adjustments (income) loss: Guaranteed benefits and hedging results: Fees attributable to guarantee benefit reserves (3,122) (3,125) (3,077) Net (gains) losses on hedging instruments 5,856 4,651 2,744 Market risk benefits (gains) losses, net (4,243) (4,295) (4,021) Net reserve and embedded derivative movements 1,224 779 221 Total net hedging results (285) (1,990) (4,133) Amortization of DAC associated with non-operating items at date of transition to LDTI 541 591 658 Actuarial assumption updates and model enhancements 419 406 486 Net realized investment (gains) losses 11 554 359 Net realized investment (gains) losses on funds withheld assets 1,052 1,801 (2,186) Net investment income on funds withheld assets (1,024) (1,174) (1,254) Other items (28) 39 22 Total non-operating adjustments 686 227 (6,048) Pretax adjusted operating earnings 1,678 1,165 1,643 Less: operating income tax expense (benefit) 191 57 189 Adjusted operating earnings before dividends on preferred stock 1,487 1,108 1,454 Less: dividends on preferred stock 44 35 — Adjusted operating earnings $ 1,443 $ 1,073 $ 1,454 Adjusted Book Value Attributable to Common Shareholders and Adjusted Operating ROE Attributable to Common Shareholders We use Adjusted Operating Return on Equity ("ROE") Attributable to Common Shareholders to manage our business and evaluate our financial performance that: (i) excludes items that vary from period to period due to accounting treatment under U.S.
The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes elsewhere in this report: Years Ended December 31, 2023 2022 2021 (in millions) Revenues Fee income $ 7,680 $ 7,722 $ 8,059 Premiums 147 132 148 Net investment income: Net investment income excluding funds withheld assets 1,756 1,507 2,236 Net investment income on funds withheld assets 1,174 1,254 1,188 Total net investment income 2,930 2,761 3,424 Net gains (losses) on derivatives and investments: Net gains (losses) on derivatives and investments (5,864) (3,023) (5,344) Net gains (losses) on funds withheld reinsurance treaties (1,801) 2,186 (21) Total net gains (losses) on derivatives and investments (7,665) (837) (5,365) Other income 67 85 94 Total revenues 3,159 9,863 6,360 Benefits and Expenses Death, other policy benefits and change in policy reserves, net of deferrals 965 1,062 925 (Gain) loss from updating future policy benefits cash flow assumptions, net 102 (34) 41 Market risk benefits (gains) losses, net (3,897) (3,536) (3,966) Interest credited on other contract holder funds, net of deferrals and amortization 1,145 866 832 Interest expense 185 113 37 Operating costs and other expenses, net of deferrals 2,549 2,432 2,839 Amortization of deferred acquisition costs 1,152 1,226 1,307 Total benefits and expenses 2,201 2,129 2,015 Pretax income (loss) 958 7,734 4,345 Income tax expense (benefit) 4 1,505 666 Net income (loss) 954 6,229 3,679 Less: Net income (loss) attributable to noncontrolling interests 20 43 262 Net income (loss) attributable to Jackson Financial Inc. 934 6,186 3,417 Less: Dividends on preferred stock 35 — — Net income (loss) attributable to Jackson Financial Inc. common shareholders $ 899 $ 6,186 $ 3,417 57 Part II | Item 7.
The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes elsewhere in this report: Years Ended December 31, 2024 2023 2022 (in millions) Revenues Fee income $ 8,083 $ 7,680 $ 7,722 Premiums 146 147 132 Net investment income: Net investment income excluding funds withheld assets 1,838 1,680 1,492 Net investment income on funds withheld assets 1,024 1,174 1,254 Total net investment income 2,862 2,854 2,746 Net gains (losses) on derivatives and investments: Net gains (losses) on derivatives and investments (6,812) (5,864) (3,023) Net gains (losses) on funds withheld reinsurance treaties (1,052) (1,801) 2,186 Total net gains (losses) on derivatives and investments (7,864) (7,665) (837) Other income 44 67 85 Total revenues 3,271 3,083 9,848 Benefits and Expenses Death, other policy benefits and change in policy reserves, net of deferrals 868 965 1,062 (Gain) loss from updating future policy benefits cash flow assumptions, net 46 102 (34) Market risk benefits (gains) losses, net (3,809) (3,897) (3,536) Interest credited on other contract holder funds, net of deferrals and amortization 1,110 1,145 866 Interest expense 101 109 98 Operating costs and other expenses, net of deferrals 2,825 2,549 2,432 Amortization of deferred acquisition costs 1,108 1,152 1,226 Total benefits and expenses 2,249 2,125 2,114 Pretax income (loss) 1,022 958 7,734 Income tax expense (benefit) 46 4 1,505 Net income (loss) 976 954 6,229 Less: Net income (loss) attributable to noncontrolling interests 30 20 43 Net income (loss) attributable to Jackson Financial Inc. 946 934 6,186 Less: Dividends on preferred stock 44 35 — Net income (loss) attributable to Jackson Financial Inc. common shareholders $ 902 $ 899 $ 6,186 60 Part II | Item 7.
Financial Statements and Supplementary Data - Note 3 - Segment Information of Notes to Consolidated Financial Statements for further information regarding the calculation of pretax adjusted operating earnings : Years Ended December 31, 2023 2022 2021 (in millions) Pretax Adjusted Operating Earnings by Segment: Retail Annuities $ 1,364 $ 1,507 $ 2,184 Institutional Products 69 79 64 Closed Life and Annuity Blocks (95) 117 255 Corporate and Other (173) (60) (2) Pretax Adjusted Operating Earnings 1,165 1,643 2,501 Pre-tax reconciling items from adjusted operating income to net income (loss) attributable to Jackson Financial Inc.: Guaranteed benefits and hedging results: Fees attributable to guarantee benefit reserves 3,125 3,077 2,855 Net movement in freestanding derivatives (4,651) (2,744) (5,674) Market risk benefits gains (losses), net 3,897 3,536 3,966 Net reserve and embedded derivative movements (787) (222) (141) Amortization of DAC associated with non-operating items at date of transition to LDTI (591) (658) (737) Total guaranteed benefits and net hedging results 993 2,989 269 Net realized investment gains (losses) (554) (359) 182 Net realized investment gains (losses) on funds withheld assets (1,801) 2,186 (21) Net investment income on funds withheld assets 1,174 1,254 1,188 Other items (39) (22) (36) Total pre-tax reconciling items (227) 6,048 1,582 Pretax income (loss) attributable to Jackson Financial Inc. 938 7,691 4,083 Income tax expense (benefit) 4 1,505 666 Net income (loss) attributable to Jackson Financial Inc. 934 6,186 3,417 Less: Dividends on preferred stock 35 — — Net income (loss) attributable to Jackson Financial Inc. common shareholders $ 899 $ 6,186 $ 3,417 59 Part II | Item 7.
Financial Statements and Supplementary Data — Note 3 - Segment Information of the Notes to Consolidated Financial Statements for further information regarding the calculation of pretax adjusted operating earnings : Years Ended December 31, 2024 2023 2022 (in millions) Pretax Adjusted Operating Earnings by Segment: Retail Annuities $ 1,855 $ 1,364 $ 1,507 Institutional Products 96 69 79 Closed Life and Annuity Blocks (9) (95) 117 Corporate and Other (264) (173) (60) Pretax Adjusted Operating Earnings 1,678 1,165 1,643 Pre-tax reconciling items from adjusted operating income to net income (loss) attributable to Jackson Financial Inc.: Guaranteed benefits and hedging results: Fees attributable to guarantee benefit reserves 3,122 3,125 3,077 Net gains (losses) on hedging instruments (5,856) (4,651) (2,744) Market risk benefits gains (losses), net 4,243 4,295 4,021 Net reserve and embedded derivative movements (1,224) (779) (221) Total net hedging results 285 1,990 4,133 Amortization of DAC associated with non-operating items at date of transition to LDTI (541) (591) (658) Actuarial assumption updates and model enhancements (419) (406) (486) Net realized investment gains (losses) (11) (554) (359) Net realized investment gains (losses) on funds withheld assets (1,052) (1,801) 2,186 Net investment income on funds withheld assets 1,024 1,174 1,254 Other items 28 (39) (22) Total pre-tax reconciling items (686) (227) 6,048 Pretax income (loss) attributable to Jackson Financial Inc. 992 938 7,691 Income tax expense (benefit) 46 4 1,505 Net income (loss) attributable to Jackson Financial Inc. 946 934 6,186 Less: Dividends on preferred stock 44 35 — Net income (loss) attributable to Jackson Financial Inc. common shareholders $ 902 $ 899 $ 6,186 62 Part II | Item 7.
Note 24 - Equity of Notes to Consolidated Financial Statements included elsewhere in this Form 10-K. (2) Includes shares withheld pursuant to the terms of awards under the Company's 2021 Omnibus Incentive Plan to offset tax withholding obligations that occur upon vesting and release of shares, which are treated as share repurchases.
(2) Includes shares withheld pursuant to the terms of awards under the Company's 2021 Omnibus Incentive Plan to cover tax withholding obligations that occur upon vesting and release of shares, which are treated as share repurchases.
Financial Statements and Supplementary Data -- Note 12 - Market Risk Benefits of Notes to Consolidated Financial Statements for further information regarding the notable assumption change updates included in the MRB calculation. 45 Part II | Item 7.
See “Policy and Contract Liabilities – Actuarial Assumption Updates and Model Enhancements” below and Item 8. Financial Statements and Supplementary Data -- Note 12 - Market Risk Benefits of Notes to Consolidated Financial Statements for further information regarding the notable assumption updates included in the MRB calculation.
December 31, 2023 2022 (in millions) Jackson Invested Assets $ 44,068 $ 44,486 Third Party Invested Assets (including CLOs) 29,043 26,993 Total PPM AUM 73,111 71,479 Total JNAM AUM 242,727 219,070 Total AUM $ 315,838 $ 290,549 Total AUM increased for the year ended December 31, 2023, compared to the year ended December 31, 2022, driven primarily by an increase in separate account balances managed by JNAM due to positive equity market returns during the year.
December 31, 2024 2023 (in millions) Jackson Invested Assets $ 46,143 $ 44,068 Third Party Invested Assets (including CLOs) 28,278 29,043 Total PPM AUM 74,421 73,111 Total JNAM AUM 250,297 242,727 Total AUM $ 324,718 $ 315,838 Total AUM increased for the year ended December 31, 2024, compared to the year ended December 31, 2023, driven primarily by an increase in separate account balances managed by JNAM due to positive equity market returns during the year. 52 Part II | Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments Evaluation of Available-For-Sale Debt Securities See Item 8. Financial Statements and Supplementary Data -- Note 4 - Investments of Notes to Consolidated Financial Statements for information about how we evaluate our available-for-sale debt securities for credit loss.
Evaluation of Available-For-Sale Debt Securities See Item 8. Financial Statements and Supplementary Data -- Note 4 - Investments of the Notes to Consolidated Financial Statements for information about how we evaluate our available-for-sale debt securities for credit loss. Equity Securities Equity securities consist of investments in common and preferred stock holdings and mutual fund investments.
The transaction allows us to mitigate the impact of the cash surrender value floor on Jackson’s total adjusted capital, statutory required capital, and risk-based capital ratio, as well as to allow for more efficient economic hedging of the underlying risks of Jackson’s business.
The transaction and related modified U.S. GAAP approach mitigate the impact of the cash surrender value floor on Jackson’s total adjusted capital, statutory required capital, and risk-based capital ("RBC") ratio and enables more efficient economic hedging of the underlying risks of Jackson’s business.
This creates an incentive for our customers to lapse their products in an environment where selling assets causes us to realize losses. • In the past, our statutory total adjusted capital ("TAC") has been negatively impacted by rising rates due to minimum required reserving levels ( i.e. , cash surrender value floor) when reserve releases are limited and unable to offset interest rate hedging losses.
In the past, our statutory total adjusted capital ("TAC") has been negatively impacted by rising equity markets due to minimum required reserving levels (i.e., the cash surrender value floor) when reserve releases are limited and unable to offset equity hedging losses.
Years Ended December 31, 2023 2022 2021 (in millions) Sales Variable annuities $ 9,540 $ 13,638 $ 19,073 RILA 2,890 1,811 108 Fixed Index Annuities 210 126 115 Fixed Annuities (1) 193 162 33 Total Retail Annuity Sales 12,833 15,737 19,329 Total Institutional Product Sales 1,065 2,398 475 Total Sales $ 13,898 $ 18,135 $ 19,804 (1) Includes payout annuities For the year ended December 31, 2023, total sales decreased significantly compared to the year ended December 31, 2022.
Years Ended December 31, 2024 2023 2022 (in millions) Sales Variable annuities $ 10,561 $ 9,540 $ 13,638 RILA 5,674 2,890 1,811 Fixed Index Annuities 181 210 126 Fixed Annuities (1) 1,433 193 162 Total Retail Annuity Sales 17,849 12,833 15,737 Total Institutional Product Sales 2,000 1,065 2,398 Total Sales $ 19,849 $ 13,898 $ 18,135 (1) Includes payout annuities Higher retail annuity sales for the year ended December 31, 2024, were primarily due to increased RILA and fixed annuity sales in 2024.
Account Value Institutional product account value decreased from $9,019 million at December 31, 2022 to $8,406 million at December 31, 2023. The decrease in account value was driven by continued maturities of the existing contracts, partially offset by new issuances in 2023.
Account Value Institutional product account value decreased from $8,406 million at December 31, 2023 to $8,384 million at December 31, 2024. The decrease in account value was driven by continued maturities of the existing contracts and funding agreements, mostly offset by an increase in sales in 2024.
The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report: Years Ended December 31, 2023 2022 2021 (in millions) Retail Annuities: Operating Revenues Fee income $ 4,036 $ 4,108 $ 4,636 Premiums 21 10 15 Net investment income 541 403 692 Income (loss) on operating derivatives (45) 17 52 Other income 37 42 47 Total Operating Revenues 4,590 4,580 5,442 Operating Benefits and Expenses Death, other policy benefits and change in policy reserves 43 61 6 (Gain) loss from updating future policy benefits cash flow assumptions, net (4) (4) 225 Interest credited on other contract holder funds, net of deferrals and amortization 374 253 (8) Interest expense 84 32 22 Operating costs and other expenses, net of deferrals 2,178 2,174 2,456 Amortization of deferred acquisition costs 551 557 557 Total Operating Benefits and Expenses 3,226 3,073 3,258 Pretax Adjusted Operating Earnings $ 1,364 $ 1,507 $ 2,184 The following table summarizes a roll-forward of activity affecting account value for our Retail Annuities segment for the periods indicated: Years Ended December 31, 2023 2022 2021 (in millions) Retail Annuities Account Value: Balance as of beginning of period $ 209,967 $ 260,135 $ 230,741 Premiums and deposits 13,015 15,961 19,594 Surrenders, withdrawals, and benefits (19,353) (16,430) (20,459) Net flows (6,338) (469) (865) Investment performance 33,807 (47,149) 32,621 Change in value of equity option 509 (41) 7 Interest credited 372 244 223 Policy charges and other (2,852) (2,753) (2,592) Balance as of end of period, net of ceded reinsurance 235,465 209,967 260,135 Ceded reinsurance 18,370 22,037 25,075 Balance as of end of period, gross of reinsurance $ 253,835 $ 232,004 $ 285,210 Year Ended December 31, 2023 compared to Year Ended December 31, 2022 Pretax Adjusted Operating Earnings Pretax a djusted operating earnings decreased $143 million to $1,364 million for the year ended December 31, 2023 from $1,507 million for the year ended December 31, 2022 primarily due to: • $72 million decrease in fee income primarily due to lower average separate account values compared to prior year; 60 Part II | Item 7.
The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report: Years Ended December 31, 2024 2023 2022 (in millions) Retail Annuities: Operating Revenues Fee income $ 4,460 $ 4,036 $ 4,108 Premiums 52 21 10 Net investment income 725 436 410 Other income 32 37 42 Total Operating Revenues 5,269 4,530 4,570 Operating Benefits and Expenses Death, other policy benefits and change in policy reserves 67 43 61 (Gain) loss from updating future policy benefits cash flow assumptions, net (54) (4) (4) Interest credited on other contract holder funds, net of deferrals and amortization 362 374 253 Interest expense 23 24 22 Asset-based commission expenses 1,137 1,022 1,010 Other commission expenses 891 691 809 Sub-advisor expenses 334 318 337 General and administrative expenses 788 677 642 Deferral of acquisition costs (693) (530) (624) Amortization of deferred acquisition costs 559 551 557 Total Operating Benefits and Expenses 3,414 3,166 3,063 Pretax Adjusted Operating Earnings $ 1,855 $ 1,364 $ 1,507 The following table summarizes a roll-forward of activity affecting account value for our Retail Annuities segment for the periods indicated: Years Ended December 31, 2024 2023 2022 (in millions) Retail Annuities Account Value: Balance as of beginning of period $ 235,465 $ 209,967 $ 260,135 Premiums and deposits 17,994 13,015 15,961 Surrenders, withdrawals, and benefits (29,738) (19,353) (16,430) Net flows (11,744) (6,338) (469) Investment performance 29,532 33,807 (47,149) Change in value of equity option 985 509 (41) Interest credited 362 372 244 Policy charges and other (2,935) (2,852) (2,753) Balance as of end of period, net of ceded reinsurance 251,665 235,465 209,967 Ceded reinsurance 15,051 18,370 22,037 Balance as of end of period, gross of reinsurance $ 266,716 $ 253,835 $ 232,004 63 Part II | Item 7.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (the "SECURE Act"), approved by Congress on December 20, 2019, provides 53 Part II | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | Macroeconomic, Industry and Regulatory Trends individuals with greater access to retirement products.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (the "SECURE Act"), approved by Congress on December 20, 2019, provides individuals with greater access to retirement products.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments Portfolio Composition The following table summarizes the carrying values of our investments: December 31, 2023 2022 Investments excluding Funds Withheld Funds Withheld Total Investments excluding Funds Withheld Funds Withheld Total (in millions) Debt Securities, available-for-sale, net of allowance for credit losses $ 28,896 $ 11,526 $ 40,422 $ 28,867 $ 13,622 $ 42,489 Debt Securities, at fair value under fair value option 2,037 116 2,153 2,014 159 2,173 Debt securities, trading, at fair value 68 — 68 100 — 100 Equity securities, at fair value 243 151 394 316 77 393 Mortgage loans, net of allowance for credit losses 7,015 3,067 10,082 6,840 4,127 10,967 Mortgage loans, at fair value under fair value option — 481 481 — 582 582 Policy loans 928 3,471 4,399 942 3,435 4,377 Freestanding derivative instruments 375 15 390 1,192 78 1,270 Other invested assets 1,757 709 2,466 2,802 793 3,595 Total investments $ 41,319 $ 19,536 $ 60,855 $ 43,073 $ 22,873 $ 65,946 Available-for-sale debt securities decreased to $40,422 million at December 31, 2023 from $42,489 million at the end of 2022, primarily due to dispositions, partially offset by declines in unrealized losses primarily in the funds withheld portfolio.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments Portfolio Composition The following table summarizes the carrying values of our investments: December 31, 2024 2023 Investments excluding Funds Withheld Funds Withheld Total Investments excluding Funds Withheld Funds Withheld Total (in millions) Debt Securities, available-for-sale, net of allowance for credit losses $ 31,231 $ 9,058 $ 40,289 $ 28,896 $ 11,526 $ 40,422 Debt Securities, at fair value under fair value option 2,930 116 3,046 2,037 116 2,153 Debt securities, trading, at fair value — — — 68 — 68 Equity securities, at fair value 72 125 197 243 151 394 Mortgage loans, net of allowance for credit losses 6,851 2,611 9,462 7,015 3,067 10,082 Mortgage loans, at fair value under fair value option — 449 449 — 481 481 Policy loans 902 3,501 4,403 928 3,471 4,399 Freestanding derivative instruments 252 45 297 375 15 390 Other invested assets 2,087 777 2,864 1,757 709 2,466 Total investments $ 44,325 $ 16,682 $ 61,007 $ 41,319 $ 19,536 $ 60,855 Available-for-sale debt securities decreased to $40,289 million at December 31, 2024 from $40,422 million at the end of 2023.
Accrual of interest on mortgage loans is generally suspended when principal or interest payments on mortgage loans are past due more than 90 days. Interest is then accounted for on a cash basis. Policy and Contract Liabilities We establish, and carry as liabilities, actuarially determined amounts that are calculated to meet policy obligations or to provide for future annuity payments.
Accrual of interest on mortgage loans is generally suspended when principal or interest payments on mortgage loans are past due more than 90 days. Interest is then accounted for on a cash basis.
The following table shows variable annuity account value and benefit base as of December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Account Value Benefit Base Account Value Benefit Base (in millions) No Living Benefits $ 53,645 N/A $ 49,073 N/A By Guaranteed Living Benefits: GMWB for Life 166,688 188,722 149,706 189,814 GMWB 6,092 5,348 5,674 5,655 GMIB (1) 1,352 1,799 1,356 1,929 Total $ 227,777 $ 195,869 $ 205,809 $ 197,398 By Guaranteed Death Benefit: Return of AV (No GMDB) $ 27,486 N/A $ 25,049 N/A Return of Premium 174,841 137,287 157,339 138,419 Highest Anniversary Value ("HAV") 13,213 13,522 12,128 14,272 Rollup 3,347 4,484 3,229 4,695 Combination HAV/Rollup 8,890 10,057 8,064 10,297 Total $ 227,777 $ 165,350 $ 205,809 $ 167,683 (1) Substantially all our GMIB benefits are reinsured. 50 Part II | Item 7.
The following table shows variable annuity account value and benefit base as of December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Account Value Benefit Base Account Value Benefit Base (in millions) No Living Benefits $ 56,894 N/A $ 53,645 N/A By Guaranteed Living Benefits: GMWB for Life 171,745 181,379 166,688 188,722 GMWB 6,165 5,076 6,092 5,348 GMIB (1) 1,218 1,561 1,352 1,799 GMAB 35 35 — — Total $ 236,057 $ 188,051 $ 227,777 $ 195,869 By Guaranteed Death Benefit: Return of AV (No GMDB) $ 29,519 N/A $ 27,486 N/A Return of Premium 181,132 132,612 174,841 137,287 Highest Anniversary Value ("HAV") 13,233 12,857 13,213 13,522 Rollup 3,234 4,108 3,347 4,484 Combination HAV/Rollup 8,939 9,682 8,890 10,057 Total $ 236,057 $ 159,259 $ 227,777 $ 165,350 (1) Substantially all our GMIB benefits are reinsured.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Macroeconomic, Industry and Regulatory Trends hedge targets and increased hedging costs. Further, we also are exposed to basis risk, which results from our inability to purchase or sell hedge assets whose performance is directly correlated to the performance of the funds into which customers allocate their assets.
Further, we also are exposed to basis risk, which results from our inability to purchase or sell hedge assets whose performance strongly correlates to the performance of the funds into which customers allocate their assets.
Years Ended December 31, 2023 2022 2021 (in millions) Net Flows: Variable Annuity $ (9,277) $ (2,407) $ (1,011) RILA 2,820 1,803 108 Fixed Index Annuity (1) 199 124 106 Fixed Annuity (1) (11) 90 13 Payout Annuity (1) (69) (79) (81) Total Retail Annuities Net Flows (1) (6,338) (469) (865) Net flows ceded to Athene (4,063) (3,182) (2,521) Total Retail Annuities net flows, gross of reinsurance $ (10,401) $ (3,651) $ (3,386) Total Institutional Products Net Flows $ (985) $ 40 $ (2,440) Total Closed Life and Annuity Blocks Net Flows (1) $ (273) $ (270) $ (250) (1) Net of reinsurance Net flows, net of reinsurance, decreased for the year ended December 31, 2023, compared to the year ended December 31, 2022, driven by the decreased variable annuity sales coupled with increased variable annuity surrenders and withdrawals, partially offset by increased RILA sales.
Years Ended December 31, 2024 2023 2022 (in millions) Net Flows: Variable Annuity $ (18,615) $ (9,277) $ (2,407) RILA 5,481 2,820 1,803 Fixed Index Annuity (1) 143 199 124 Fixed Annuity (1) 1,302 (11) 90 Payout Annuity (1) (55) (69) (79) Total Retail Annuities Net Flows (1) (11,744) (6,338) (469) Net flows ceded to Athene (3,830) (4,063) (3,182) Total Retail Annuities net flows, gross of reinsurance $ (15,574) $ (10,401) $ (3,651) Total Institutional Products Net Flows $ (270) $ (985) $ 40 Total Closed Life and Annuity Blocks Net Flows (1) $ (309) $ (273) $ (270) (1) Net of reinsurance Net flows, net of reinsurance, decreased for the year ended December 31, 2024, compared to the year ended December 31, 2023, driven by increased variable annuity surrenders and withdrawals due to some mature policies from higher sales years coming out of their surrender charge period, along with higher surrenders as guarantee benefits are less in the money during times of strong equity market performance.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeManagement's Discussion and Analysis of Financial Condition and Results of Operations 44 Executive Summary 44 Key Operating Measures 47 Macroeconomic, Industry and Regulatory Trends 51 Non-GAAP Financial Measures 54 Consolidated Results of Operations 57 Segment Results of Operations 59 Investments 64 Policy and Contract Liabilities 70 Liquidity and Capital Resources 72 Impact of Recent Accounting Pronouncements 79 Critical Accounting Estimates 80 Item 7A.
Biggest changeManagement's Discussion and Analysis of Financial Condition and Results of Operations 46 Executive Summary 46 Key Operating Measures 49 Macroeconomic, Industry and Regulatory Trends 53 Non-GAAP Financial Measures 55 Consolidated Results of Operations 60 Segment Results of Operations 62 Investments 67 Policy and Contract Liabilities 73 Liquidity and Capital Resources 76 Impact of Recent Accounting Pronouncements 83 Critical Accounting Estimates 83 Item 7A.
Quantitative and Qualitative Disclosures about Market Risk 87 Item 8. Financial Statements and Supplementary Data 93 Reference to Financial Statements and Schedules 93
Quantitative and Qualitative Disclosures about Market Risk 91 Item 8. Financial Statements and Supplementary Data 98 Reference to Financial Statements and Schedules 98

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations | Policy and Contract Liabilities The table below represents a breakdown of our policy and contract liabilities: December 31, 2023 Separate Accounts Reserves for future policy benefits Other contract holder funds Market Risk Benefits Total (in millions) Variable Annuities $ 219,381 $ — $ 8,396 $ (2,000) $ 225,777 RILA 1 — — 5,219 3 5,222 Fixed Annuities — — 9,736 1 9,737 Fixed Index Annuities 2 — — 10,243 37 10,280 Payout Annuities — 1,090 860 — 1,950 Other Annuities 198 — — — 198 Total Retail Annuities 219,579 1,090 34,454 (1,959) 253,164 Total Institutional Products — — 8,406 — 8,406 Total Closed Life and Annuity Blocks 77 9,362 12,291 7 21,737 Total Policy and Contract Liabilities 219,656 10,452 55,151 (1,952) 283,307 Claims payable and other — 1,446 168 — 1,614 Total $ 219,656 $ 11,898 $ 55,319 $ (1,952) $ 284,921 December 31, 2022 Separate Accounts Reserves for future policy benefits Other contract holder funds Market Risk Benefits Total (in millions) Variable Annuities $ 195,550 $ — $ 10,259 $ 767 $ 206,576 RILA 1 — — 1,875 5 1,880 Fixed Annuities — — 11,696 — 11,696 Fixed Index Annuities 2 — — 11,787 17 11,804 Payout Annuities — 1,042 837 — 1,879 Other Annuities 285 — — — 285 Total Retail Annuities 195,835 1,042 36,454 789 234,120 Total Institutional Products — — 9,019 — 9,019 Total Closed Life and Annuity Blocks 71 9,726 12,534 8 22,339 Total Policy and Contract Liabilities 195,906 10,768 58,007 797 265,478 Claims payable and other — 1,550 183 — 1,733 Total $ 195,906 $ 12,318 $ 58,190 $ 797 $ 267,211 (1) Includes the embedded derivative liabilities in other contract holder funds related to RILA of $1,224 million and $205 million at December 31, 2023 and 2022, respectively.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations | Policy and Contract Liabilities The table below represents a breakdown of our policy and contract liabilities: December 31, 2024 Separate Accounts Reserves for future policy benefits Other contract holder funds Market Risk Benefits Total (in millions) Variable Annuities $ 228,851 $ — $ 7,206 $ (5,176) $ 230,881 RILA 1 — — 11,685 6 11,691 Fixed Index Annuities 2 — — 8,515 37 8,552 Fixed Annuities — — 9,615 1 9,616 Payout Annuities — 1,095 844 — 1,939 Other Annuities 208 — — — 208 Total Retail Annuities 229,059 1,095 37,865 (5,132) 262,887 Total Institutional Products — — 8,384 — 8,384 Total Closed Life and Annuity Blocks 84 8,599 11,899 7 20,589 Total Policy and Contract Liabilities 229,143 9,694 58,148 (5,125) 291,860 Claims payable and other — 1,378 164 — 1,542 Total $ 229,143 $ 11,072 $ 58,312 $ (5,125) $ 293,402 December 31, 2023 Separate Accounts Reserves for future policy benefits Other contract holder funds Market Risk Benefits Total (in millions) Variable Annuities $ 219,381 $ — $ 8,396 $ (2,000) $ 225,777 RILA 1 — — 5,219 3 5,222 Fixed Index Annuities 2 — — 10,243 37 10,280 Fixed Annuities — — 9,736 1 9,737 Payout Annuities — 1,090 860 — 1,950 Other Annuities 198 — — — 198 Total Retail Annuities 219,579 1,090 34,454 (1,959) 253,164 Total Institutional Products — — 8,406 — 8,406 Total Closed Life and Annuity Blocks 77 9,362 12,291 7 21,737 Total Policy and Contract Liabilities 219,656 10,452 55,151 (1,952) 283,307 Claims payable and other — 1,446 168 — 1,614 Total $ 219,656 $ 11,898 $ 55,319 $ (1,952) $ 284,921 (1) Includes the embedded derivative liabilities in other contract holder funds re lated to RILA of $3,065 million and $1,224 mill ion at December 31, 2024 and 2023, respectively.
Accordingly, the reinsured MRB is recorded at fair value using internally developed models consistent with those used to value our direct MRBs. See Item 8. Financial Statements and Supplementary Data -- Note 8 - Reinsurance of Notes to Consolidated Financial Statements for additional information on these accounting policies.
Accordingly, the reinsured MRB is recorded at fair value using internally developed models consistent with those used to value our direct MRBs. See Item 8. Financial Statements and Supplementary Data — Note 8 - Reinsurance of the Notes to Consolidated Financial Statements for additional information on these accounting policies.
The types of derivative instruments we use to manage interest rate risk are different from those we use to manage equity market risk. We also recognize the sensitivity of our equity hedges to interest rates but believe their contribution to the overall interest rate hedge is small due to their relatively short duration of these derivatives.
The types of derivative instruments we use to manage interest rate risk are different from those we use to manage equity market risk. We also recognize the sensitivity of our equity hedges to interest rates but believe their contribution to the overall interest rate hedge is small due to the relatively short duration of these derivatives.
Best Fitch Moody’s S&P Jackson National Life Insurance Company Rating A A A3 A Outlook stable stable stable stable Jackson National Life Insurance Company of New York Rating A A A3 A Outlook stable stable stable stable Brooke Life Insurance Company Rating A Outlook stable In evaluating our Company’s financial strength, the rating agencies evaluate a variety of factors including our strategy, market positioning and track record, mix of business, profitability, leverage and liquidity, the adequacy and soundness of our reinsurance, the quality and estimated market value of our assets, the adequacy of our surplus, our capital structure, and the experience and competence of our management.
Best Fitch Moody’s S&P Jackson National Life Insurance Company Rating A A A3 A Outlook stable stable stable stable Jackson National Life Insurance Company of New York Rating A A A3 A Outlook stable stable stable stable Brooke Life Insurance Company Rating A Outlook stable In evaluating our Company’s financial strength, the rating agencies evaluate a variety of factors including our strategy, market positioning and record, mix of business, profitability, leverage and liquidity, the adequacy and soundness of our reinsurance, the quality and estimated market value of our assets, the adequacy of our surplus, our capital structure, and the experience and competence of our management.
The following discussion is not intended to represent a comprehensive list of the estimates and judgments that we apply or our accounting policies. For a detailed discussion of the application of these and other accounting policies, see Item 8. Financials Statements and Supplementary Data — Note 2- Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements.
The following discussion is not intended to represent a comprehensive list of the estimates and judgments that we apply or our accounting policies. For a detailed discussion of the application of these and other accounting policies, see Item 8. Financial Statements and Supplementary Data — Note 2- Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.
Financial Statements and Supplementary Data -- Note 9 - Reserves for Future Policy Benefits and Claims Payable, Note 10 - Other Contract Holder Funds, Note 11 - Separate Account Assets and Liabilities, and Note 12 - Market Risk Benefits of Notes to Consolidated Financial Statements for additional discussion on accounting policies around Reserves for future policy benefits and claims payable, Other contract holder funds, Separate account assets and liabilities and MRBs.
Financial Statements and Supplementary Data — Note 9 - Reserves for Future Policy Benefits and Claims Payable, Note 10 - Other Contract Holder Funds, Note 11 - Separate Account Assets and Liabilities, and Note 12 - Market Risk Benefits of the Notes to Consolidated Financial Statements for additional discussion on accounting policies around Reserves for future policy benefits and claims payable, Other contract holder funds, Separate account assets and liabilities and MRBs.
In addition, life and annuity claims liabilities in course of settlement are included in other future policy benefits and claims payable. See Item 8. Financial Statements and Supplementary Data -- Note 9- Reserve for Future Policy Benefits and Claims Payable of Notes to Consolidated Financial Statements for additional information on these accounting policies.
In addition, life and annuity claims liabilities in course of settlement are included in other future policy benefits and claims payable. See Item 8. Financial Statements and Supplementary Data — Note 9- Reserve for Future Policy Benefits and Claims Payable of the Notes to Consolidated Financial Statements for additional information on these accounting policies.
Financials Statements and Supplementary Data -- Note 5 - Derivative Instruments and Note 10 - Other Contract Holder Funds of Notes to Consolidated Financial Statements for additional information on our accounting policies for embedded derivatives bifurcated for insurance host contracts.
Financials Statements and Supplementary Data -- Note 5 - Derivative Instruments and Note 10 - Other Contract Holder Funds of the Notes to Consolidated Financial Statements for additional information on our accounting policies for embedded derivatives bifurcated for insurance host contracts.
Financials Statements and Supplementary Data — Note 5 - Derivative Instruments and Note 6 - Fair Value Measurements of Notes to Consolidated Financial Statements for additional information on significant inputs into our derivative pricing methodology.
Financials Statements and Supplementary Data — Note 5 - Derivative Instruments and Note 6 - Fair Value Measurements of the Notes to Consolidated Financial Statements for additional information on significant inputs into our derivative pricing methodology.
Any declaration of cash dividends or stock repurchases is at the discretion of JFI’s Board of Directors and will depend on our financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, preferred stock and other contractual restrictions with respect to paying cash dividends or repurchasing stock, restrictions imposed by Delaware law, general business conditions and any other factors that JFI’s Board of Directors deems relevant in making any such determination.
Any declaration of cash dividends or stock repurchases are at the discretion of JFI’s Board of Directors and will depend on our financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, preferred stock and other contractual restrictions with respect to paying cash dividends or repurchasing stock, restrictions imposed by Delaware law, general business conditions and any other factors that JFI’s Board of Directors deems relevant in making any such determination.
Financial Statements and Supplementary Data -- Note 24 - Equity of Notes to Consolidated Financial Statements for further information on dividends to shareholders and share repurchase s.
Financial Statements and Supplementary Data — Note 24 - Equity of the Notes to Consolidated Financial Statements for further information on dividends to shareholders and share repurchase s.
To the extent that external parties are also invested in these VIEs, a non-controlling interest is reflected on our Consolidated Financial Statements as well. See Item 8. Financial Statements and Supplementary Data -- Note 4 - Investments of Notes to Consolidated Financial Statements for additional information. 86 Part II | Item 7A.
To the extent that external parties are also invested in these VIEs, a non-controlling interest is reflected on our Consolidated Financial Statements as well. See Item 8. Financial Statements and Supplementary Data — Note 4 - Investments of the Notes to Consolidated Financial Statements for additional information. 90 Part II | Item 7A.
Increases or decreases in the value of the referenced equity securities will increase or decrease the associated core contract charges and investment management fees. • As of December 31, 2023, 77% of our total variable annuity account value included a return of premium death benefit and 11% of our total variable annuity account value included an enhanced GMDB selection.
Increases or decreases in the value of the referenced equity securities will increase or decrease the associated core contract charges and investment management fees. • As of December 31, 2024, 77% of our total variable annuity account value included a return of premium death benefit and 11% of our total variable annuity account value included an enhanced GMDB selection.
The formula is used as an early warning regulatory tool to identify possible inadequately capitalized insurers for purposes of initiating regulatory action, and not to rank insurers generally. As of December 31, 2023, our insurance companies were well in excess of the minimum required capital levels.
The formula is used as an early warning regulatory tool to identify possible inadequately capitalized insurers for purposes of initiating regulatory action, and not to rank insurers generally. As of December 31, 2024, our insurance companies were well in excess of the minimum required capital levels.
The liquidity sources for our insurance company subsidiaries are their cash, short-term investments, sales of publicly traded bonds, insurance premiums, fees charged on our products, sales of annuities and institutional products, investment income, commercial repurchase agreements and utilization of a short-term borrowing facility with the FHLBI.
The liquidity sources for our insurance company subsidiaries include their cash, short-term investments, sales of publicly traded bonds, insurance premiums, fees charged on their products, sales of annuities and institutional products, investment income, commercial repurchase agreements and utilization of a short-term borrowing facility with the FHLBI.
We have the discretion, subject to contractual limitations and minimums, to reset the crediting terms on the majority of our fixed index annuities and fixed annuities. 71 Part II | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | Policy and Contract Liabilities See Item 8.
We have the discretion, subject to contractual limitations and minimums, to reset the crediting terms on the majority of our fixed index annuities and fixed annuities. 74 Part II | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | Policy and Contract Liabilities See Item 8.
The fees attributable to guaranteed benefits are generally calculated based on the benefit base, so the scenario in which equity markets increase and then later decrease will also result in relatively higher fee income. 87 Part II | Item 7A.
The fees attributable to guaranteed benefits are generally calculated based on the benefit base, so the scenario in which equity markets increase and then later decrease will also result in relatively higher fee income. 91 Part II | Item 7A.
Interest is payable semi-annually on March 15th and September 15th of each year. Interest expense on the notes was $20 million, $20 million, and $20 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Interest is payable semi-annually on March 15th and September 15th of each year. Interest expense on the notes was $20 million, $20 million, and $20 million for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2023, 94% of fixed annuity, fixed index annuity, and the fixed accounts of RILA and variable annuity correspond to crediting rates that are at the guaranteed minimum crediting rate.
As of December 31, 2024, 94% of fixed annuity, fixed-index annuity, and the fixed accounts of RILA and variable annuity correspond to crediting rates that are at the guaranteed minimum crediting rate.
As a result, the risk associated with such payouts is dependent on both the equity market performance and the time of the claim. • As of December 31, 2023, 76% of total variable annuity account value included either a GMWB for Life or GMWB selection. These benefits guarantee minimum payments based on a fixed annual percentage of the benefit base.
As a result, the risk associated with such payouts is dependent on both the equity market performance and the time of the claim. • As of December 31, 2024, 75% of total variable annuity account value included either a GMWB for Life or GMWB selection. These benefits guarantee minimum payments based on a fixed annual percentage of the benefit base.
Among the criteria for securities to be included on a watch list are: credit deterioration that has led to a significant decline in fair value of the security; a significant covenant related to the security has been breached; or an issuer has filed or indicated a possibility of filing for bankruptcy, has missed or announced it intends to miss a scheduled interest or principal payment, or has experienced a specific material adverse change that could impair its creditworthiness.
Among the criteria for securities to be included on a watch list are: credit deterioration that has led to a significant decline in fair value of the security; a significant covenant related to the security has been breached; or an issuer has filed or indicated a possibility of filing for bankruptcy, has missed or announced it intends to miss a scheduled interest or principal payment, or has experienced a specific material adverse change that could impair its creditworthiness. 87 Part II | Item 7.
Under Michigan insurance law, for statutory reporting purposes, the surplus notes are not part of the legal liabilities of the Company and are considered surplus funds.
Under Michigan insurance law, for statutory reporting purposes, the surplus notes are not part of the legal liabilities of Jackson and are considered surplus funds.
Business – Risk Management.” We have an Asset Liability Management Committee (“ALCO”) that maintains a written Asset Liability Management Policy ("ALM Policy"). ALCO regularly reviews all material financial risks in accordance with our ALM Policy. If market risks exceed predetermined tolerances, management is required to inform the Finance and Risk Committee of our Board of Directors.
Business – Risk Management.” We have an Asset Liability Management Committee (“ALCO”) that maintains a written Asset Liability Management Policy ("ALM Policy"). ALCO regularly reviews all material financial risks in accordance with our ALM Policy. If market risks exceed predetermined tolerances, management is required to inform the Board's Finance and Risk Committee.
GAAP, which primarily consist of $10.1 billion and $11.0 billion of mortgage loans as of December 31, 2023 and 2022, respectively; • the analysis excludes the effect of market or interest rate impacts on assets and liabilities related to our funds withheld reinsurance treaties; • the analysis excludes real estate holdings; • the analysis excludes the impact of changes in income taxes; and • the analysis assumes that the composition of assets and liabilities remains unchanged upon measurement and excludes the impacts of management actions.
GAAP, which primarily consist of $9.5 billion and $10.1 billion of mortgage loans as of December 31, 2024 and 2023, respectively; • the analysis excludes the effect of market or interest rate impacts on assets and liabilities related to our funds withheld reinsurance treaties; • the analysis excludes real estate holdings; • the analysis excludes the impact of changes in income taxes; and • the analysis assumes that the composition of assets and liabilities remains unchanged upon measurement and excludes the impacts of management actions.
Our hedging strategy manages equity and interest rate risk within risk tolerances through a mix of equity and interest rate derivatives and fixed income assets. We do not directly use hedging to offset the movement in our U.S. GAAP liabilities as market conditions change from period to period, which may result in U.S. GAAP net income volatility.
Our hedging strategy manages equity and interest rate risk within risk tolerances through a mix of equity and interest rate derivatives and fixed income assets. We do not directly use hedging to offset the movement in our U.S. GAAP liabilities as market conditions change from period to period, which has resulted, and may continue to result, in U.S.
Accrued interest receivables are presented separate from the amortized cost of debt securities and mortgage loans. An allowance for credit losses is not estimated on an accrued interest receivable. Rather, receivable balances that are deemed uncollectible are written off with a corresponding reduction to net investment income.
Accrued interest receivables are presented separate from the amortized cost of debt securities and mortgage loans. An allowance for credit losses is not estimated on an accrued interest receivable. Rather, receivable balances that are deemed uncollectible are written off with a corresponding reduction to net investment income. 88 Part II | Item 7.
Our core dynamic hedging program seeks to offset changes in economic liability associated with variable, registered index-linked, and fixed indexed annuity guaranteed benefits due to market movements, while our macro hedging program seeks to manage capital and liquidity risk.
Our core dynamic hedging program seeks to offset changes in economic liability associated with variable, registered index-linked, and fixed index annuity guaranteed benefits and index-linked interest crediting due to equity market movements, while our macro hedging program seeks to manage capital and liquidity risk.
As of December 31, 2023, Jackson’s outstanding surplus notes and bank debt included $ 57 million of bank loans from the Federal Home Loan Bank of Indianapolis ("FHLBI"), collateralized by mortgage-related securities and mortgage loans and $250 million of surplus notes maturing in 2027.
As of December 31, 2024, Jackson’s outstanding surplus notes and bank debt included $ 52 million of bank loans from the Federal Home Loan Bank of Indianapolis ("FHLBI"), collateralized by mortgage-related securities and mortgage loans, and $250 million of surplus notes maturing in 2027.
Subsequent to the effective date of the coinsurance agreement, the Athene Embedded Derivative is measured at fair value with changes reported in Net gains (losses) on derivatives and investments in the Consolidated Income Statement. The Athene Embedded Derivative Liability is included in Funds withheld payable under reinsurance treaties in the Consolidated Balance Sheet. See Item 8.
Subsequent to the effective date of the coinsurance agreement, the Athene Embedded Derivative is measured at fair value with changes reported in Net gains (losses) on derivatives and investments in the Consolidated Income Statement. The Athene Embedded Derivative Liability is included in Funds withheld payable under reinsurance treaties in the Consolidated Balance Sheet. 89 Part II | Item 7.
Therefore, there can be no assurance that we will pay any cash dividends to holders of our stock or approve any further increase in the existing, or any new, common stock repurchase program, or as to the amount of any such cash dividends or stock repurchases.
Therefore, there can be no assurance that we will pay any cash dividends to holders of our stock or approve any further increase in the existing, or any new, common stock repurchase program, or any assurance as to the amount of any such cash dividends or stock repurchases. 77 Part II | Item 7.
Brooke Life, as the sole owner of our other insurance company subsidiaries, including Jackson and Jackson National Life NY, is the direct recipient of any dividend payments from those subsidiaries and must make dividend payments to its ultimate parent company, Jackson Financial, in order for any funds from our insurance company subsidiaries to reach Jackson Financial.
Brooke Life, as the sole owner of Jackson and Brooke Re, is the direct recipient of any dividend payments from those subsidiaries and must make dividend payments to its ultimate parent company, Jackson Financial, in order for any funds from our insurance company subsidiaries to reach Jackson Financial.
As of December 31, 2023, the portfolio of cash, short-term investments and privately and publicly traded securities and equities that are unencumbered and unrestricted to sale, amounted to $22.4 billion.
As of December 31, 2024, the portfolio of cash, short-term investments and privately and publicly traded securities and equities that are unencumbered and unrestricted to sale, amounted to $26.4 billion.
The proceeds of the note issuances were used, together with cash on hand, to retire the Company’s previously outstanding term loans. $600 million of these notes matured on November 22, 2023, and were paid with cash on hand at maturity.
The proceeds of the note issuances were used, together with cash on hand, to retire the Company’s previously outstanding term loans. $600 million of these notes matured on November 22, 2023, and were paid with cash on hand at maturity. 80 Part II | Item 7.
A stable outlook is assigned when ratings are not likely to be changed. Outlooks should not be confused with expected stability of the issuer’s financial or economic performance. A stable outlook does not preclude a rating agency from changing a rating at any time without notice. A.M.
A stable outlook is assigned when ratings are not likely to be changed. Outlooks should not be confused with expected stability of the issuer’s financial or economic performance. A stable outlook does not preclude a rating agency from changing a rating at any time without notice. 82 Part II | Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources Other factors that are not directly related to interest rates can also give rise to an increase in liquidity requirements, including, changes in ratings from rating agencies, general policyholder concerns relating to the life insurance industry (e.g., the unexpected default of a large, unrelated life insurer) and competition from other products, including non-insurance products such as mutual funds, certificates of deposit and newly developed investment products.
Other factors that are not directly related to interest rates can also give rise to an increase in liquidity requirements including, changes in ratings from rating agencies, general policyholder concerns relating to the life insurance industry ( e.g. , the unexpected default of a large, unrelated life insurer) and competition from other products, including non-insurance products such as mutual funds, certificates of deposit and newly developed investment products.
Free partial withdrawal rates vary based on the product type and duration.
Free partial withdrawal rates vary based on the product type, duration, and GMAB election.
The primary reserves for these policies are the contract holder account balances reported within the other contract holder funds line of the Consolidated Balance Sheets. Where these contracts provide additional benefits beyond the account balance or base insurance coverage that are not market risk benefits or embedded derivatives, liabilities in addition to the policyholder’s 80 Part II | Item 7.
The primary reserves for these policies are the contract holder account balances reported within the other contract holder funds line of the Consolidated Balance Sheets. Where these contracts provide additional benefits beyond the account balance or base insurance coverage that are not market risk benefits or embedded derivatives, liabilities in addition to the policyholder’s account value are recognized.
Quantitative and Qualitative Disclosures about Market Risk crediting rates. Our asset-liability management strategies may include the use of derivatives, such as interest rate swaps, interest rate swaptions (also known as a swap option) and interest rate/bond futures, as well as fixed income assets. We manage interest rate risk in aggregate, contemplating natural offsets between products before pursuing hedging transactions.
Our asset-liability management strategies may include the use of derivatives, such as interest rate swaps, interest rate swaptions (also known as a swap option) and interest rate/bond futures/forwards, as well as fixed income assets. We manage interest rate risk in aggregate, contemplating natural offsets between products before pursuing hedging transactions.
Interest Rate Risk : We manage interest rate risk by employing product design, pricing and asset-liability management strategies intended to mitigate the potential effects of interest rate movements. Product design and pricing strategies include the use of surrender charges, market value adjustments, restrictions on withdrawals and the ability to reset 88 Part II | Item 7A.
Interest Rate Risk : We manage interest rate risk by employing product design, pricing and asset-liability management strategies intended to mitigate the potential effects of interest rate movements. Product design and pricing strategies include the use of surrender charges, market value adjustments, restrictions on withdrawals and the ability to reset crediting rates.
Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
We are required to test the value of deferred tax assets for realizability. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
These laws and regulations require, among other things, our insurance company subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay.
These laws and regulations require, among other things, our insurance company subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay. 78 Part II | Item 7.
The sensitivity analysis reflects changes in fair value resulting from changes in interest rates or equity market levels and does not reflect changes in the economic value of assets or liabilities.
The sensitivity analysis reflects changes in fair value resulting from changes in interest rates or equity market levels and does not reflect changes in the economic value of assets or liabilities. 94 Part II | Item 7A.
The market risk information is limited by the assumptions and parameters established in creating the related sensitivity analysis, including: • interest-rate sensitive liabilities do not include $65.9 billion and $70.3 billion of policy and contract liabilities as of December 31, 2023 and 2022, respectively, which are accounted for on a book value basis under U.S.
Quantitative and Qualitative Disclosures about Market Risk The market risk information is limited by the assumptions and parameters established in creating the related sensitivity analysis, including: • interest-rate sensitive liabilities do not include $66.2 billion and $65.9 billion of policy and contract liabilities as of December 31, 2024 and 2023, respectively, which are accounted for on a book value basis under U.S.
Separate account liabilities are fully funded by cash flows from the customer’s corresponding separate account assets and are set equal to the fair value of such invested assets. • $45.1 billion of our policy and contract liabilities were backed by our investment portfolio. • $18.6 billion of our policy and contract liabilities were reinsured by Athene and backed by funds withheld assets.
Separate account liabilities are fully funded by cash flows from the customer’s corresponding separate account assets and are set equal to the fair value of such invested assets. • $47.4 billion of our policy and contract liabilities were backed by our investment portfolio. • $15.3 billion of our policy and contract liabilities were reinsured by Athene and backed by funds withheld assets.
For example, in periods with increasing equity markets, we expect significant losses on our equity hedges, but as increasing equity markets also generally increase contract holder account values, we expect a related decrease in the likelihood or level of future payments we need to make on our guaranteed benefits.
For example, in periods with increasing equity markets, we expect significant losses on the value of our equity hedges and additional interest credited on registered index-linked and fixed index annuities, but as increasing equity markets also generally increase contract holder account values, we expect a related decrease in the likelihood or level of future payments we need to make on our guaranteed benefits.
Unlike variable annuities, the amount of the reduction is limited by a floor (which defines the maximum amount of market loss to which the contract holder is exposed) or buffer (which defines the amount of the market loss not credited to the contract holder). We also offer a return of premium death benefit on our RILA.
Unlike variable annuities, the amount of the reduction is limited by a floor (which defines the maximum amount of market loss to which the contract holder is exposed) or buffer (which defines the amount of the market loss not credited to the contract holder). • Many of the RILA contracts we sell have a return of premium death benefit.
All of our business operations are conducted through our subsidiaries. Any dividends we pay or stock repurchases we make will depend upon the funds legally available for distribution, including dividends or distributions from our subsidiaries to us.
JFI is a holding company and has no direct operations. All of our business operations are conducted through our subsidiaries. Any dividends we pay, or stock repurchases we make will depend upon the funds legally available for distribution, including dividends or distributions from our subsidiaries to us.
Advances are in the form of either notes or funding agreements issued to FHLBI. As of December 31, 2023 and 2022, Jackson held a bank loan with an outstanding balance of $57 million and $62 million, respectively.
Advances are in the form of either notes or funding agreements issued to FHLBI. As of December 31, 2024 and 2023, Jackson held a bank loan with an outstanding balance of $52 million and $57 million, respectively. 81 Part II | Item 7.
Leases. Impact of Recent Accounting Pronouncements For a complete discussion of new accounting pronouncements affecting us, s ee Item 8. Financials Statements and Supplementary Data -- Note 2 - Summary of Significant Accounting Policies of Notes to Consolidated Financial Statements .
Leases. Impact of Recent Accounting Pronouncements For a complete discussion of new accounting pronouncements affecting us, s ee Item 8. Financial Statements and Supplementary Data — Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements . Critical Accounting Estimates The preparation of financial statements in conformity with U.S.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources Statutory Capital Our insurance company subsidiaries have statutory surplus above the level needed to meet current regulatory requirements. RBC requirements are used as minimum capital requirements by the NAIC and the state insurance departments to identify companies that merit regulatory action.
Statutory Capital Our insurance company subsidiaries have statutory surplus above the level needed to meet current regulatory requirements. RBC requirements are used as minimum capital requirements by the NAIC and the state insurance departments to identify companies that merit regulatory action.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources Cash Flows The following table presents a summary of our cash flow activity for the periods set forth below: Years Ended December 31, 2023 2022 2021 (in millions) Net cash provided by (used in) operating activities $ 5,310 $ 5,206 $ 5,682 Net cash provided by (used in) investing activities (592) (1,374) (1,296) Net cash provided by (used in) financing activities (6,328) (2,162) (3,774) Net increase (decrease) in cash, cash equivalents, and restricted cash (1,610) 1,670 612 Cash, cash equivalents, and restricted cash at beginning of period 4,301 2,631 2,019 Total cash, cash equivalents, and restricted cash at end of period $ 2,691 $ 4,301 $ 2,631 Cash flows from Operating Activities The principal operating cash inflows from our insurance activities come from insurance premiums, fees charged on our products and net investment income.
Cash Flows The following table presents a summary of our cash flow activity for the periods set forth below: Years Ended December 31, 2024 2023 2022 (in millions) Net cash provided by (used in) operating activities $ 5,793 $ 5,310 $ 5,206 Net cash provided by (used in) investing activities (7,090) (592) (1,374) Net cash provided by (used in) financing activities 2,373 (6,328) (2,162) Net increase (decrease) in cash, cash equivalents, and restricted cash 1,076 (1,610) 1,670 Cash, cash equivalents, and restricted cash at beginning of period 2,691 4,301 2,631 Total cash, cash equivalents, and restricted cash at end of period $ 3,767 $ 2,691 $ 4,301 Cash flows from Operating Activities The principal operating cash inflows from our insurance activities come from insurance premiums, fees charged on our products and net investment income.
This ratio is multiplied by current period assessments to determine the reserve accrual for the period. The measurements of the additional liabilities for annuitization, death and other insurance benefits are based on best estimate assumptions including mortality, persistency, investment returns, and discount rates. These assumptions are similarly subject to the annual review process discussed above.
The measurements of the additional liabilities for annuitization, death and other insurance benefits are based on best estimate assumptions including mortality, persistency, investment returns, and discount rates. These assumptions are similarly subject to the annual review process discussed above.
In addition, increasing equity markets could potentially increase the specified amount available for withdrawal. RILA Equity Market Risk We sell RILA where the crediting rate to the contract holder is determined by reference to equity market performance.
In addition, increasing equity markets could potentially increase the specified amount available for withdrawal. RILA Equity Market Risk Equity market risk arises from the registered index linked annuities (RILA) we offer principally in the following ways: • We sell RILA where the crediting rate to the contract holder is determined by reference to equity market performance.
The 2023 Revolving Credit Facility provides for borrowings for working capital and other general corporate purposes under aggregate commitments of $1.0 billion, with a sub-limit of $500 million available for letters of credit.
The 2023 Revolving Credit Facility replaced an existing revolving credit facility that was due to expire in February 2024. The 2023 Revolving Credit Facility provides for borrowings for working capital and other general corporate purposes under aggregate commitments of $1.0 billion, with a sub-limit of $500 million available for letters of credit.
We repurchased a total of 6,502,524 shares of common stock for an aggregate purchase price of $255 million for the year ended December 31, 2023, which were funded with cash on hand. As of February 20, 2024, the Company had remaining authorization to purchase $237 million of its common shares. See Item 8.
We repurchased a total of 5,778,990 shares of common stock for an aggregate purchase price of $415 million for the year ended December 31, 2024, which were funded with cash on hand. As of February 18, 2025, the Company had remaining authorization to purchase $568 million of its common shares. See Item 8.
Along with solvency regulations, another primary consideration in determining the amount of capital used for dividends is the level of capital needed to maintain desired financial strength ratings from rating agencies, including A.M. Best, S&P, Moody’s and Fitch.
Along with solvency regulations, another primary consideration in determining the amount of capital used for dividends is the level of capital needed to maintain desired financial strength ratings from rating agencies, including A.M. Best, S&P, Moody’s and Fitch. Both regulators and rating agencies could become more conservative in their methodology and criteria, including increasing capital requirements for insurance company subsidiaries.
Subject to these limitations, our insurance company subsidiaries are permitted to pay ordinary dividends based on calculations specified under insurance laws of the relevant state of domicile, subject to prior notification to the appropriate regulatory agency.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources Subject to these limitations, our insurance company subsidiaries are permitted to pay ordinary dividends based on calculations specified under insurance laws of the relevant state of domicile, subject to prior notification to the appropriate regulatory agency.
Likewise, in periods of decreasing markets we expect significant increases in the value of our equity hedges, but also would expect liabilities for future guaranteed benefit payments to increase.
Likewise, in periods of decreasing markets we expect significant increases in the value of our equity hedges and less interest credited on registered index-linked and fixed index annuities, but also would expect liabilities for future guaranteed benefit payments to increase.
Cash flows provided by (used in) operating activities increased $104 million to $5,310 million during the year ended December 31, 2023 from $5,206 million during the year ended December 31, 2022. This was primarily due to the timing of settlements of receivables and payables as well as lower acquisition costs.
Cash flows provided by (used in) operating activities increased $483 million to $5,793 million during the year ended December 31, 2024 from $5,310 million during the year ended December 31, 2023. This increase was primarily due to the timing of settlements of receivables and payables.
In performing these reviews, we consider the relevant facts and circumstances relating to each investment and exercise considerable judgment in determining whether an impairment is needed for a particular security.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Critical Accounting Estimates In performing these reviews, we consider the relevant facts and circumstances relating to each investment and exercise considerable judgment in determining whether an impairment is needed for a particular security.
Best, S&P, Moody’s and Fitch review their ratings of insurance companies from time to time. There can be no assurance that any particular rating will continue for any given period of time or that it will not be changed or withdrawn entirely if, in their judgment, circumstances so warrant.
There can be no assurance that any particular rating will continue for any given period of time or that it will not be changed or withdrawn entirely if, in their judgment, circumstances so warrant.
(2) Includes the embedded derivative liabilities related to fixed index annuity in other contract holder funds of $866 million and $931 million at December 31, 2023 and 2022, respectively. As of December 31, 2023: • $219.7 billion or 78% of our policy and contract liabilities were backed by separate account assets.
(2) Includes the embedded derivative liabilities related to fixed index annuity in other contract holder fu nds of $877 million and $866 mill ion at December 31, 2024 and 2023, respectively. As of December 31, 2024: • $229.1 billion or 79% of our policy and contract liabilities were backed by separate account assets.
The discussion below describes our liquidity and capital resources for the years ended December 31, 2023, 2022 and 2021. 72 Part II | Item 7.
The discussion below describes our liquidity and capital resources for the years ended December 31, 2024, 2023 and 2022.
Collateral Upgrade Transactions During the first quarter of 2024, Jackson executed certain paired repurchase and reverse repurchase transactions (“Collateral Upgrade” transactions) totaling $1.5 billion pursuant to master repurchase agreements with participating bank counterparties.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources Collateral Upgrade Transactions During the first quarter of 2024, Jackson executed certain paired repurchase and reverse repurchase transactions totaling approximately $1.5 billion pursuant to master repurchase agreements with participating bank counterparties.
Our exposures to interest rates and equity markets also impact our business, financial condition, results of operations and cash flows other than through changes in fair value. See Item 1A. Risk Factors – “Risks Related to Conditions in the Global Financial Markets and Economy.” 89 Part II | Item 7A.
Our exposures to interest rates and equity markets also impact our business, financial condition, results of operations and cash flows other than through changes in fair value. See Item 1A.
At times, illiquid market conditions could 83 Part II | Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | Critical Accounting Estimates result in inactive markets for certain of our financial instruments. In such instances, there could be no or limited observable market data for these assets and liabilities.
At times, illiquid market conditions could result in inactive markets for certain of our financial instruments. In such instances, there could be no or limited observable market data for these assets and liabilities.
These guarantees include benefits that are payable upon the depletion of funds (GMWB), in the event of death (GMDB), at annuitization (GMIB), or at the end of a specified period (GMAB). Substantially all of our GMIB benefits are reinsured. GMIB benefits and GMAB benefits were discontinued in 2009 and 2011, respectively.
These guarantees include benefits that are payable upon the depletion of funds (GMWB), in the event of death (GMDB), at annuitization (GMIB), or at the end of a specified period (GMAB). Substantially all of our GMIB benefits are reinsured. GMIB benefits were discontinued in 2009. For additional information regarding our account value by optional guarantee benefit, see Item 1.
Brooke Life subsequently paid a $360 million ordinary dividend and remitted a $150 million return of capital to its ultimate parent, Jackson Financial. In addition, for the year ended December 31, 2023, Brooke Life paid $90 million of interest associated with the $2 billion surplus note between Brooke Life and Jackson Finance, LLC ("Jackson Finance"), a subsidiary of Jackson Financial.
In addition, for the year ended December 31, 2024 , Brooke Life paid $90 million of interest associated with the $2 billion surplus note between Brooke Life and Jackson Finance, LLC ("Jackson Finance"), a subsidiary of Jackson Financial. On December 10, 2024, Jackson paid a $280 million extraordinary dividend to Brooke Life.
For our equity market exposure, we compare the impact of changes to equity markets on our hedge assets relative to the liabilities these assets are intended to hedge.
This analysis of hedge positioning relative to the liabilities these assets are intended to hedge provides our management team a view on the effectiveness of the hedging program. For our equity market exposure, we compare the impact of changes to equity markets on our hedge assets relative to the liabilities these assets are intended to hedge.
We consider our hedge program effective if it is successful in keeping the net effect of these assets and liabilities within our defined risk measures and limits. This analysis of hedge positioning relative to the liabilities these assets are intended to hedge provides our management team a view on the effectiveness of the hedging program.
When evaluating the effectiveness of our hedge program we look at the combined net effect of our hedge assets and the liabilities these assets are intended to hedge. We consider our hedge program effective if it is successful in keeping the net effect of these assets and liabilities within our defined risk measures and limits.
On February 20, 2024, our Board of Directors approved a first quarter cash dividend on JFI's common stock of $0.70 per share, payable on March 21, 2024 to shareholders of record on March 12, 2024. The company also declared a cash dividend of $0.50 per depositary share.
On February 17, 2025, our Board of Directors approved a cash dividend for the first quarter on JFI's common stock of $0.80 per share, payable on March 20, 2025, to common shareholders of record on March 11, 2025.
Updates to assumptions are applied on a retrospective basis, and each reporting period the reserve for future policy benefits is updated to reflect actual experience to date. The Company establishes cohorts, which are product groupings used to measure reserves for future policy benefits.
Updates to assumptions are applied on a retrospective basis, and each reporting period the reserve for future policy benefits is updated to reflect actual experience to date. 83 Part II | Item 7.
Business – “Our Product Offerings by Segment – Retail Annuities” for additional information about RILA. Risk Management Our actuarial, asset-liability management and finance functions have responsibility for managing our market risk exposures. Our risk function provides risk oversight and challenge, and our internal audit team provides independent assurance.
Quantitative and Qualitative Disclosures about Market Risk Risk Management Our actuarial, asset-liability management and finance functions have responsibility for managing our market risk exposures. Our risk function provides risk oversight and challenge, and our Internal Audit team provides independent assurance.
In determining cohorts, the Company considers both qualitative and quantitative factors, including the issue year, type of product, product features, and legal entity. The discount rate used to estimate reserves for future policy benefits is consistent with an upper-medium grade (low-credit risk) fixed-income corporate instrument yield, which has been interpreted to represent a single-A corporate instrument yield.
The discount rate used to estimate reserves for future policy benefits is consistent with an upper-medium grade (low-credit risk) fixed-income corporate instrument yield, which has been interpreted to represent a single-A corporate instrument yield.
Collateral posting requirements can result in material liquidity needs for our insurance subsidiaries. As of December 31, 2023, we were in a net collateral payable position of $780 million, as compared to $689 million as of December 31, 2022. 76 Part II | Item 7.
Collateral posting requirements can result in material liquidity needs for our insurance subsidiaries. As of December 31, 2024, we were in a net collateral payable position of $150 million, which is down from $780 million as of December 31, 2023.
Cash flows provided by (used in) investing activities increased $782 million to $(592) million during the year ended December 31, 2023 from $(1,374) million during the year ended December 31, 2022.
Cash flows provided by (used in) investing activities decreased $6,498 million to $(7,090) million during the year ended December 31, 2024 from $(592) million during the year ended December 31, 2023.
Most of the life insurance and annuity products Jackson offers permit the policyholder or contract holder to withdraw or borrow funds or surrender cash values. As of December 31, 2023, approximately half of Jackson’s general account reserves are not surrenderable, included surrender charges greater than 5%, or included market value adjustments to discourage early withdrawal of policy and contract funds.
Further, approximately half of Jackson’s general account reserves are not surrenderable, included surrender charges greater than 5%, or included market value adjustments to discourage early withdrawal of policy and contract funds as of December 31, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources additional form of liquidity to Jackson and to Jackson Financial. The aggregate borrowing capacity under the agreement is $500 million and each cash advance request must be at least $100 thousand.
This agreement is an uncommitted short-term cash advance facility that provides an additional form of liquidity to Jackson and to Jackson Financial. The aggregate borrowing capacity under the agreement is $500 million and each cash advance request must be at least $100 thousand.
Based on the fair values of the financial instruments and our analysis of the impacts of the measured changes in market rates and prices, we have determined that our interest rate and equity market exposures are material. 90 Part II |
Given the limitations described above, we use models as tools and not as substitutes for the experience and judgment of our management. Based on the fair values of the financial instruments and our analysis of the impacts of the measured changes in market rates and prices, we have determined that our interest rate and equity market exposures are material.
However, it is the opinion of management that the ultimate disposition of contingent liabilities is unlikely to have a material adverse effect on our financial position.
It is possible that an adverse outcome in certain of our contingent liabilities, or the use of different assumptions in the determination of amounts recorded, could have a material effect upon our financial position. However, it is the opinion of management that the ultimate disposition of contingent liabilities is unlikely to have a material adverse effect on our financial position.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeQuantitative and Qualitative Disclosures about Market Risk The table below provides details regarding the potential change in estimated fair value of our derivative instruments due to a 50 basis point parallel increase and decrease in the yield curve by type of derivative instrument, as well as the potential change in estimated fair value of our derivative instruments due to a 10% increase and decrease in equity prices (dollars in millions): Interest Rate Sensitivity Notional Weighted Impact of Fair Impact of Amount Average Term +50 bps Value -50 bps (Years) Change Change December 31, 2023 Swaps $ 7,893 5.68 $ (93) $ (120) $ 96 Swaptions 23,500 0.36 (612) (752) 885 Interest Rate Futures 33,926 0.25 (1,011) — 1,138 Total $ (1,716) $ (872) $ 2,119 December 31, 2022 Swaps $ 11,053 6.01 $ (165) $ (257) $ 174 Swaptions 25,000 1.07 (685) (1,711) 647 Interest Rate Futures 105,261 0.91 (102) — 83 Total $ (952) $ (1,968) $ 904 Equity Sensitivity Notional Weighted Impact of Fair Impact of Amount Average Term +10% Value -10% (Years) Change Change December 31, 2023 Options Calls $ — — $ — $ — $ — Puts 26,000 0.07 (55) 59 1,226 Total options 26,000 0.07 (55) 59 1,226 Equity Futures 24,739 1.81 (1,452) — 1,452 Total Return Swaps 1,599 4.50 (162) (22) 162 Total $ (1,669) $ 37 $ 2,840 December 31, 2022 Options Calls $ 17,500 0.10 $ 698 $ 106 $ (99) Puts 30,500 0.77 (473) 958 1,015 Total options 48,000 0.53 225 1,064 916 Equity Futures 19,760 1.78 (1,988) — 1,988 Total Return Swaps 739 4.34 (71) 31 71 Total $ (1,834) $ 1,095 $ 2,975 92
Biggest changeQuantitative and Qualitative Disclosures about Market Risk The table below provides details regarding the potential change in estimated fair value of our derivative instruments due to a 50 basis point parallel increase and decrease in the yield curve by type of derivative instrument, as well as the potential change in estimated fair value of our derivative instruments due to a 10% increase and decrease in equity prices (dollars in millions): Interest Rate Sensitivity Notional Weighted Impact of Fair Impact of Amount Average Term +50 bps Value -50 bps (Years) Change Change December 31, 2024 Swaps $ 7,703 4.70 $ (65) $ (204) $ 66 Bond Forwards 609 0.87 (51) (21) 59 Interest Rate Futures 20,592 0.25 (1,363) — 1,500 Total $ (1,479) $ (225) $ 1,625 December 31, 2023 Swaps $ 7,893 5.68 $ (93) $ (120) $ 96 Swaptions 23,500 0.36 (612) (752) 885 Interest Rate Futures 33,926 0.25 (1,011) — 1,138 Total $ (1,716) $ (872) $ 2,119 Equity Sensitivity Notional Weighted Impact of Fair Impact of Amount Average Term +10% Value -10% (Years) Change Change December 31, 2024 Put Options $ 10,000 0.22 $ (68) $ 77 $ 286 Equity Futures 33,104 1.29 (583) — 583 Total Return Swaps 2,065 3.48 (203) 39 203 Total $ (854) $ 116 $ 1,072 December 31, 2023 Put Options $ 26,000 0.07 $ (55) $ 59 $ 1,226 Equity Futures 24,739 1.81 (1,452) — 1,452 Total Return Swaps 1,599 4.50 (162) (22) 162 Total $ (1,669) $ 37 $ 2,840 97
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Quantitative and Qualitative Disclosures about Market Risk The table below provides detail regarding the potential change in estimated fair value of our debt securities in addition to our variable annuity, fixed index and RILA market risk benefits and embedded derivatives due to a 50 basis point parallel increase and decrease in the yield curve by type of asset or liability (in millions): December 31, 2023 December 31, 2022 Fair Impact of Impact of Fair Impact of Impact of Value +50 bps -50 bps Value +50 bps -50 bps Change Change Change Change Debt Securities (1) Floating Rate $ 3,019 $ (2) $ 2 $ 3,025 $ — $ 1 Fixed Rate 27,982 (814) 862 27,956 (906) 946 (1) Includes debt securities that are classified as available-for-sale or trading and includes securities at fair value under the fair value option.
Removed
December 31, 2023 December 31, 2022 Fair Value Impact of +50 bps Change Impact of -50 bps Change Fair Value Impact of +50 bps Change Impact of -50 bps Change Fixed index and RILA embedded derivatives $ 1,275 $ (49) $ 52 $ 235 $ (9) $ 9 Market risk benefits (1,136) (2,213) 2,470 2,753 (2,212) 2,463 The fair value of certain market risk benefits reflects the present value of projected benefit payments less the present value of attributed fees.
Removed
These benefit payments and fees are subject to differing degrees of discounting, as benefit payments are generally projected to occur further in the future as compared to attributed fees.
Removed
As a result, the degree of sensitivity between the present values of projected fees as compared to the present values of projected benefit payments may result in disproportionate sensitivity impacts relative to the market risk benefits fair value.
Removed
The table below provides additional detail regarding the potential change in estimated fair value of our equity investment portfolio in addition to our variable annuity, fixed index and RILA market risk benefits and embedded derivatives due to a 10% increase and decrease in equity market prices by type of asset or liability (in millions): December 31, 2023 December 31, 2022 Fair Impact of Impact of Fair Impact of Impact of Value 10% -10% Value 10% -10% Change Change Change Change Equity Securities and Limited Partnerships $ 1,665 $ (167) $ 167 $ 2,734 $ (273) $ 273 December 31, 2023 December 31, 2022 Fair Impact of Impact of Fair Impact of Impact of Value 10% -10% Value 10% -10% Change Change Change Change Fixed index and RILA embedded derivatives $ 1,275 $ 2 $ (5) $ 235 $ 1 $ (3) Market risk benefits (1,136) (2,048) 2,587 2,753 (2,382) 2,867 The fair value of our market risk benefits reflect our contract holders’ exposure to equity market declines.
Removed
When equity markets increase, this exposure and the related fair value declines. 91 Part II | Item 7A.

Other JXN 10-K year-over-year comparisons