Jackson Reports First Half 2013 IFRS Pretax Operating Income of $924.6 Million; Total Sales and Depo
Jackson Reports First Half 2013 IFRS Pretax Operating Income of $924.6 Million; Total Sales and Deposits of $13.7 Billion
LANSING, Mich.--(BUSINESS WIRE)-- Jackson National Life Insurance Company® (Jackson®) generated $924.6 million in IFRS pretax operating income1 during the first half of 2013, an increase of 29.8 percent over the first half of 2012, due primarily to higher fee income and higher life insurance profits due to the earnings contribution of REALIC, which was acquired by Jackson in the third quarter of 2012. First-half sales and deposits2 totaled $13.7 billion, up 9.4 percent year over year.
Jackson, an indirect wholly owned subsidiary of the United Kingdom's Prudential plc (NYS: PUK) , recorded IFRS net income of $145.7 million during the first half of 2013, compared to $389.7 million during the first half of 2012. This decline was due primarily to less favorable net hedge results during the period due to the combination of a rapid rise in equity markets with accounting requirements that do not fully reflect economic movements.
"In the first half of 2013, we continued to expand the Jackson franchise through profitable sales growth while maintaining pricing discipline and a strong capital position. Our sales results benefited significantly from Elite Access®, and we remain pleased with the profits gained through the REALIC acquisition. This excellent first-half performance allowed Jackson to remit a $470.0 million dividend to our parent company," said Mike Wells, Jackson president and chief executive officer.
During the first half of 2013, all four primary rating agencies—A.M. Best, Standard & Poor's, Fitch Ratings and Moody's Investors Service, Inc.—affirmed Jackson's financial strength ratings. Jackson has maintained the same financial strength ratings for more than 10 years.As of August 9, 2013, Jackson had the following ratings:3
- A+ (superior) —A.M. Best financial strength rating, the second-highest of 16 rating categories;
- AA (very strong) —Standard & Poor's insurer financial strength rating, the third-highest of 21 rating categories;
- AA (very strong) —Fitch Ratings insurer financial strength rating, the third-highest of 19 rating categories;
- A1 (good) —Moody's Investors Service, Inc. insurance financial strength rating, the fifth-highest of 21 rating categories.
Jackson generated $13.7 billion in total sales and deposits during the first half of 2013, compared to $12.6 billion in the same period of 2012. The company maintained healthy variable annuity (VA) volumes of $10.3 billion, with a rapidly growing contribution from Elite Access, a VA launched in March 2012 that gives individual investors the ability to access alternative investments. Elite Access sales were nearly $2.0 billion, up from $218.2 million in the first half of 2012 and $1.1 billion in the second half of 2012.
"Jackson has achieved tremendous success with Elite Access because the product fulfills a demand in the market for a retail investment vehicle that effectively combines traditional and alternative asset classes," said Clifford Jack, executive vice president and head of retail for Jackson. "Elite Access is a great complement to Perspective II®, Jackson's more traditional variable annuity, as both products allow advisors to customize an investment strategy to help meet the unique financial needs of their clients."
Jackson's fixed index annuity sales totaled $957.1 million during the first half of 2013, up from $793.5 million during the first half of 2012, due to an increase in consumer demand for products that offer principal protection along with the potential to benefit from equity market gains. Fixed annuity sales totaled $457.2 million, compared to $492.6 million in the same period of 2012.
Jackson participates in the institutional market (guaranteed investment contracts, medium-term notes and funding agreements) on an opportunistic basis. Jackson issued $597.1 million of institutional products, up from $293.3 million in first half of 2012.
Subsidiary and Affiliate Performance
Curian Capital® LLC (Curian), Jackson's asset management subsidiary that provides customized investment management products and services to financial representatives and institutional clients, continued to generate positive net flows during 2013. Deposits were nearly $1.5 billion during the first half of 2013, up from $1.3 billion during the same period of 2012. Assets under management in Curian's core business increased to $9.8 billion as of June 30, 2013, up from $8.9 billion at year-end 2012. Curian contributed $21.9 million to Jackson's total IFRS pretax income during the first half of 2013, up from $11.2 million during the first half of 2012.
Jackson's affiliate, National Planning Holdings®, Inc. (NPH®), a network of four independent broker-dealers, reported gross product sales of $10.4 billion during the first half of 2013, compared to $8.2 billion in the same period of 2012, yielding IFRS1 revenue of $470.1 million and $411.5 million in the first six months of 2013 and 2012, respectively. NPH also generated $11.0 million in IFRS net income, compared to $8.1 million during the first half of 2012.
Jackson's growth during the first half of 2013 facilitated the recruitment of more than 200 new employees, increasing total headcount to more than 4,500 people. Employee growth was delivered in all of Jackson's regional centers including Lansing, Nashville and Denver. In April, Jackson announced the expansion of its Lansing campus to accommodate its growing workforce. In addition, Jackson established satellite offices at Michigan State University and Michigan Technological University, providing employment opportunities for students and community members, and giving Jackson access to a broader pool of talent for workforce recruitment.
1 International Financial Reporting Standards (IFRS) is a principles-based set of international accounting standards for reporting financial information. IFRS is issued by the International Accounting Standards Board in an effort to increase global comparability of financial statements and results. IFRS is used by Jackson's parent, Prudential plc, to report the Group's financial results.
IFRS pretax operating income is based on longer-term investment returns. It excludes short-term fluctuations in investment returns, hedge results, and change in value of derivatives. A reconciliation to net income based on US generally accepted accounting principles (US GAAP) is as follows (amounts in millions):
|$||924.6||IFRS basis pretax income from operations|
|(842.8||)||Net hedge results and change in value of derivatives, net of DAC amortization|
|54.8||Net realized investment gains, net of DAC amortization and non-controlling interest|
|57.6||Normalization of longer-term investment returns, net of DAC amortization|
|(48.5||)||Income tax expense|
|145.7||IFRS net income|
|29.6||IFRS to US GAAP adjustments, net of tax|
|$||175.3||US GAAP basis net income|
2 Sales and deposits from Jackson's subsidiaries, Jackson National Life Insurance Company of New York ® and Curian, have been included in Jackson's total sales and deposits figure.
3 Financial strength ratings do not apply to the principal amount or investment performance of the separate account or underlying investments of variable products.
Please remember that a Jackson annuity is intended to be a long-term, tax-deferred vehicle for retirement. An annuity's earnings are taxable as ordinary income when withdrawn and, if taken before age 59 1/2, may be subject to a 10% additional tax. Variable annuities involve investment risks and may lose value.
Although asset allocation among different asset categories generally limits risk and exposure to any one category, the risk remains that management may favor an asset category that performs poorly relative to the other asset categories. Some of those risks include general economic risk, geopolitical risk, commodity-price volatility, counterparty and settlement risk, currency risk, derivatives risk, emerging markets risk, foreign securities risk, high-yield bond exposure, noninvestment-grade bond exposure, index investing risk, industry concentration risk, leveraging risk, market risk, prepayment risk, liquidity risk, real estate investment risk, sector risk, short sales risk, temporary defensive positions, and large cash positions.
Before investing in variable products, investors should carefully consider the investment objectives, risks, charges and expenses of the variable product and its underlying investment options. The current contract prospectus and underlying fund prospectuses, which are contained in the same document, provide this and other important information. Please contact your representative or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.
About Jackson National Life Insurance Company
Jackson is a leading provider of retirement solutions for industry professionals and their clients. The company offers a diverse range of products including variable, fixed and fixed index annuities designed for tax-efficient accumulation and distribution of retirement income for retail customers, and fixed income products for institutional investors. Jackson subsidiaries and affiliates provide specialized asset management and retail brokerage services. With $173.6 billion in assets*, Jackson prides itself on product innovation, sound corporate risk management practices and strategic technology initiatives. Focused on thought leadership and education, the company develops proprietary research, industry insights and financial representative training on retirement planning and alternative investment strategies. Jackson is also dedicated to corporate social responsibility and supports charities focused on helping children and seniors in the communities where its employees live and work. For more information, visit www.jackson.com .
Jackson is the marketing name for Jackson National Life Insurance Company, Jackson National Life Insurance Company of New York ® and Jackson National Life Distributors LLC.
*Jackson has $173.6 billion in total IFRS assets and $161.2 billion in IFRS policy liabilities primarily set aside to pay future policyowner benefits as of June 30, 2013.
Elite Access Fixed and Variable Annuity (VA650, VA 660) is issued by Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and in New York (VA650NY, VA 660NY) by Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Perspective II Fixed and Variable Annuity (VA620) is issued by Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and in New York (VA620NY 09/12) by Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Variable annuities are distributed by Jackson National Life Distributors LLC, member FINRA, may not be available in all states and state variations may apply. These products have limitations and restrictions, including withdrawal charges and excess interest adjustments (interest rate adjustments in New York) where applicable.
Jackson issues other variable annuities with similar features, benefits, limitations and charges. Discuss Jackson's other variable annuity options with your representative or contact Jackson for more information. Jackson is the marketing name for Jackson National Life Insurance Company and Jackson National Life Insurance Company of New York.
Annuities are issued by Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Contact your representative or the Company for more information.
Jackson National Life Insurance Company is an indirect subsidiary of Prudential plc, a company incorporated and with its principal place of business in England. Prudential plc and its affiliated companies constitute a large global financial services group. It has been in existence for 165 years and has $648.2 billion in assets under management as of June 30, 2013. Prudential plc is not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America.
The following cautionary statement is included to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Jackson National Life Insurance Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. However, as with any projection or forecast, forward-looking statements are inherently susceptible to a number of risks and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in such forward-looking statements. There can be no assurance that management's expectations, beliefs or projections will result or be achieved or accomplished.
Jackson National Life Insurance Company
Kim Isaacson, 800-565-9044 x24292
Director, Financial Communications & Social Media
KEYWORDS: United States North America Michigan
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