Jackson Financial Inc Q4 2024 Earnings Call Transcript

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

Question: Ryan Krueger - KBW - Analyst : Hey, thanks. Good morning. First question was, could you provide a little bit more color on the moving pieces within Brooke Re in 2024 that ultimately produced the $200 million increase in capital?

Question: Ryan Krueger - KBW - Analyst : Great thanks and then a question on the assumption review sounds like you, the main main impact was around utilization. I think you've also had actual to expect adverse actual to expected results over the last year or two around higher lapses. I know you also mentioned you know you're seeing more exchange activity in the current environment, so. Just curious, did you, if you considered changing the long term lapse assumption and ultimately what led to keeping the existing lapse assumption?

Question: Ryan Krueger - KBW - Analyst : Great, thank you.

Question: Suneet Kamath - Jefferies - Analyst : Great, thanks. I just want to follow up to Ryan's question on Brooke Re. One of the questions that we get most often from investors is, how do you get comfort that Brooke Re is well capitalized, and I take your comments on the call, but Is there something that you guys could sort of provide us on a more regular basis that we can sort of anchor to just it seems to be some reluctance in terms of providing additional disclosure on Brooke Re and since it's such an important part of your strategy, I'm wondering if there's something that you guys could give us on a more regular basis that we can use to track the performance there.

Question: Suneet Kamath - Jefferies - Analyst : Okay, and then second on capital, I mean, I appreciate the increase in the capital return guide for 2025, but if we just sort of think about how much excess capital you have between the RBC level being above your target. And then the whole co cash also being above your target, it's a pretty big number. So, I guess what is keeping you from, bringing down some of that excess capital even more and again I appreciate the increase in capital return, but it still seems like there's a sizable amount of excess on the balance sheet. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 20, 2025 / 2:00PM, JXN.N - Q4 2024 Jackson Financial Inc Earnings Call

Question: Suneet Kamath - Jefferies - Analyst : Okay, thanks for the answers.

Question: Alex Scott - Barclays - Analyst : Hey, thanks for taking the question. First one is actually on PPM. I know it's a, relatively small business from an earnings standpoint for you all, but you would be interested in, where you see PPM going over over the long-term. Is that something that may become a bigger piece of strategy over time?

Question: Alex Scott - Barclays - Analyst : Got it. That, that's helpful and that Western asset management, hire did, catch my eye. That was one of the reasons I was interested in asking about that. All right, I guess for my follow up. I wanted to ask about the free capital generation. The guide's unchanged in terms of, exceed $1 billion. I'd say 2024 being, 1.7% before funding sort of business growth, 1.3% after you laid out in your deck that that seemed pretty darn strong to me and I guess I just wanted to ask, how much does that, excuse me, a number of benefit from the strong equity markets, higher interest rates, etc. I mean, is that something where maybe we shouldn't think about it being quite that strong in the '25 because there were like, sort of 11 time like benefits from the market being strong, or, do you view that as a pretty good run rate at this point?

Question: Alex Scott - Barclays - Analyst : Got it. Thank you.

Question: Thomas Gallagher - Evercore ISI - Analyst : Morning. First wanted to come back to the actual review. So is it was the charge taken because more customers are utilizing the GMWB features than you had modeled? I guess I've I've sort of looked at your guarantees and thought the vast majority of them are probably out of the money at this point, but I guess there's cohorts that are in the money and is that done? Is that where you're making the adjustment change as you've looked at different cohorts? If you can unpack that a little bit, thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 20, 2025 / 2:00PM, JXN.N - Q4 2024 Jackson Financial Inc Earnings Call

Question: Thomas Gallagher - Evercore ISI - Analyst : Got it. And then just a couple of other quick ones. Did you say your ultimate lapse rate assumption for total annuities was around 7%? Because I'm just looking at this quarter it was around 13%. I just want to make sure I'm looking at apples to apples.

Question: Thomas Gallagher - Evercore ISI - Analyst : Okay, and what is your terminal lapse rate assumption? I just want to at least level set where we are now and if rates, if lapses remain elevated, whether you might have to make some adjustments.

Question: Thomas Gallagher - Evercore ISI - Analyst : Got it. And then just one final one if I could the this is a little more of like a structural question. So I know you have the permitted practice with Brooke Re. Is there within that permitted practice, is there, are there guard rails around you still are beholden somehow to RBC on a statutory basis? And the reason I ask is. When I see like there's proposed changes to scenario generator in '26, I wonder how is that even going to affect you if you're using modified GAAP. But anyway, is there any guardrail that's still where there's still a relevance to statutory, or is there, is that not even relevant anymore in terms of the the deal you have with the Michigan regulator?

Question: Thomas Gallagher - Evercore ISI - Analyst : Okay. Thank you.