Jackson Financial Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Scott - Barclays Capital Inc. - Analyst : First one I had is just on your excess capital position and cash flow and potential uses of capital, I mean, at this point, you've got such a strong excess capital position. You're sort of taking up so much free cash flow to the Holdco, you're not using it all for share repurchases. So the excess is building even further. And just in light of that situation, I wanted to better understand, like, as you look at this capital position what is the pecking order for priority for potential upsizing capital return or M&A.

Question: Alex Scott - Barclays Capital Inc. - Analyst : Got it. That's helpful. And then the second question, I just wanted to ask on the AUM level and just the equity market heading into the back half of the year. How would you expect that to kind of flow through to your earnings? Like how much of the expense base is variable versus fixed? Would you expect margins to improve out of that? Or are there may be some offsets to think about related to investment in the business and so forth?

Question: Thomas Gallagher - Evercore ISI Institutional Equities - Analyst : Just a sort of a strategic question on -- is there any consideration to remixing the business when -- and it's kind of slowly happening already from the mix shift that's happening on the sales side. But anything that you would consider on something more strategic on legacy VA risk transfer, maybe lowering the reliance on shorter-term hedges for the VA or anything else that you would consider? Or would you say you're broadly happy with the structure you have today? And just thinking specifically about lowering your cost of capital, given your lower valuation versus peers.

Question: Thomas Gallagher - Evercore ISI Institutional Equities - Analyst : Okay. Just one quick follow-up. The RILA product you're selling today, does that have a living benefit and income guarantees on the majority of that? Or is that investment only? And how do you see competition in that part of the market?

Question: Suneet Kamath - Jefferies LLC - Analyst : First, just a quick follow-up on RILA and the answer you just gave. So this new product that offers 100% principal protection. I had thought that one of the things that made the RILA more capital efficient is that it didn't have principal protection and that the downside was sort of shared with the consumer. So maybe just want to understand that a little bit more? And is this a relatively unique feature in the market versus kind of what your competitors are offering? And how do the capital requirements associated with this 100% principal protection compared to some of the other RILA that you offer?

Question: Suneet Kamath - Jefferies LLC - Analyst : Okay. And then I guess on the -- you mentioned this also in your prepared remarks, I just wanted to come back to it. Are you managing or risk managing the RILA sort of together with the legacy VA? And the reason I ask the question is another one of your company competitors has talked about doing that, and they sort of ran into some issues once they got to this quote-unquote balanced risk profile across the two blocks. So I just want to make sure that I get a better sense of kind of how you're approaching the two -- the risk management of those two blocks of business.

Question: Suneet Kamath - Jefferies LLC - Analyst : Got it. And if I could just sneak one more in, just on Brook Re. Do you think you'd be able to use that structure if you were to pursue inorganic growth, i.e., acquire a VA company? Could you sort of slot that block of business into Brooke Re.

Question: Ryan Krueger - Keefe, Bruyette & Woods, Inc. - Analyst : I had some follow-ups. One was you mentioned that you could use captives to reduce the strain from increased sales of fixed and fixed indexed annuities. When you mentioned that, were you referring to potentially setting up like a new affiliated reinsurer that would be separate from Brooke Re and that could be used to put some of the new business into.

Question: Ryan Krueger - Keefe, Bruyette & Woods, Inc. - Analyst : And then I guess somewhat related to this, but -- so I guess, in terms of looking to diversify the business, you -- outside of just organic growth. So I guess, are you suggesting that you would be, I guess, consider being a reinsurer for spread business in the market? I assume you don't need a strategic M&A transaction because you already have the capabilities in distribution. So I think I just wanted to make sure I understood that correctly that you'd potentially consider being a reinsurer for spread business in the market, there was an opportunity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 3:00PM, JXN.N - Q2 2025 Jackson Financial Inc Earnings Call