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    JXN
    Earnings call· Mar 2026(Q1 FY26)

    Jackson Financial Q1 FY26 earnings call JXN

    May 6, 2026 Source

    Executive summary

    Jackson Financial Q1 FY26 — Strong Annuity Sales and Capital Generation

    Jackson Financial reported a strong start to FY26, driven by robust retail annuity sales, particularly in RILA and FIA products, and solid capital generation. The company is on track to meet its full-year free capital generation and capital return targets, supported by a diversified product portfolio and strategic investment partnerships. Despite some market volatility impacts on fee income and a net hedging loss, the business model demonstrates resilience and strong profitability.

    Highlights

    7

    • Retail annuity sales increased 31% year-over-year to $5.3 billion.

    • RILA sales exceeded $2 billion in quarterly sales, with AUM reaching $21 billion.

    • Fixed annuity and FIA sales reached $756 million, an increase of over 300% year-over-year.

    • Pretax adjusted operating earnings (excluding notable items) increased 12% year-over-year to $503 million.

    • Adjusted operating EPS (excluding notable items and tax normalization) increased 18% year-over-year to $5.94.

    • Free capital generation was $271 million, on track for the full-year target of $1.2 billion.

    • Holding company liquidity is nearly $650 million, comfortably above the minimum buffer.

    Concerns

    3

    • Net hedge result was a loss of $101 million for the quarter.

    • Limited partnership results had a $0.48 unfavorable impact on EPS, falling below the 10% long-term assumption.

    • Proactive enhancement of policyholder identification processes resulted in a $0.42 unfavorable impact on EPS due to higher claims.

    Guidance & targets

    3
    CategoryTargetConfidence
    Free capital generation
    $1.2 billion
    high materiality
    High
    Capital return to common shareholders
    $900 million to $1.1 billion
    high materiality
    High
    RBC risk appetite
    425%
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Retail Annuity
    Underscores the success of comprehensive product suite. Spread-based products represented 52% of total sales. Sequentially lower consistent with typical seasonal patterns.
    Total sales: $5.3 billion
    		—31%——
    Retail Annuity - RILA
    A standout performer, reaching a record high AUM. Jackson is the industry's third largest RILA provider.
    Sales: $2 billionAssets under management: $21 billion
    		—68%——
    Retail Annuity - Fixed/FIA
    Significant increase year-over-year, benefiting from the successful launch of Jackson Income Assurance (FIA).
    Sales: $756 millionPrior year sales: $174 million
    		—over 300%——
    Advisory Channel
    Jackson maintains a leading position, with nearly 50% of advisory sales coming from products other than variable annuities in Q1 FY26.
    RILA and Elite Access share of fee-based advisory sales: >70%New FIA product share of total advisory sales: >10%
    		————

    Operational metrics

    38
    Pretax Adjusted Operating Earnings
    $503 millionup 12% year-over-year
    Q1 FY26

    Reflects continued momentum across spread-based businesses and steady growth in in-force AUM.

    Pretax Adjusted Operating Earnings
    $430 million
    Q1 FY26

    Reported figure including notable items.

    Adjusted Operating EPS
    $5.94up 18% year-over-year
    Q1 FY26

    Reflects strong spread income growth and benefit of lower diluted share count from share repurchase program.

    Adjusted Operating EPS
    $5.15
    Q1 FY26

    Reported figure including notable items.

    Limited Partnership Results Impact on EPS
    $0.48unfavorable impact
    Q1 FY26

    Came in below the long-term 10% return assumption.

    Higher Claims Impact on EPS
    $0.42unfavorable impact
    Q1 FY26

    Due to proactive enhancement of processes to identify ceased policyholders.

    Shares Issued to TPG
    4.7 million
    Q1 FY26

    Issued midway through the quarter, partially offset by share repurchase program benefits.

    Adjusted Operating Return on Equity
    14.8%up from 13.2% for TTM ended March 2025
    TTM ended March 2026

    Underscores the resilience and underlying profitability of the business.

    Effective Tax Rate
    13.5%modestly lower than 15% guidance
    Q1 FY26
    Retail Annuity Sales
    $5.3 billionup 31% year-over-year
    Q1 FY26

    All new business, no internal exchanges.

    RILA Sales
    $2 billionup 68% from year ago quarter
    Q1 FY26

    Since launch in May 2025, RILA sales have exceeded $2 billion quarterly.

    RILA Assets Under Management
    $21 billionrecord high
    End of Q1 FY26

    Grown steadily since product launch in 2021.

    Fixed Annuity and FIA Sales
    $756 millionincrease of over 300% year-over-year
    Q1 FY26

    Benefiting from the successful launch of Jackson Income Assurance.

    Net Outflows
    —improved by 30% from a year ago, decreased nearly 6% from Q4 2025
    Q1 FY26

    Reflects significant RILA inflows and lower variable annuity surrenders and withdrawals.

    Nonvariable Annuity Net Inflows
    $2.5 billion
    Q1 FY26

    Driven by strong RILA sales and spread product performance.

    Variable Annuity All-in Surrender Rate
    declinedboth year-over-year and sequentially
    Q1 FY26

    Resulted in modestly lower net outflows for the quarter.

    Free Capital Generation
    $271 million
    Q1 FY26

    Reflects estimated change in required capital, modestly reduced by LP returns and elevated claims.

    After-tax Statutory Capital Generation
    $342 million
    Q1 FY26

    Viewed as a clear indicator of underlying business strength.

    Capital Returned to Common Shareholders
    $257 millionup 17% year-over-year on a per diluted share basis
    Q1 FY26

    Enabled by robust free capital generation and growing free cash flow.

    Total Capital Returned to Common Shareholders
    $3 billionexceeding initial market capitalization at separation
    Since becoming independent public company

    Reinforces strong capital generation profile.

    Holding Company Liquidity
    $650 millioncomfortably above minimum buffer, slight decline from Q4 primarily reflects capital return
    End of Q1 FY26

    Provides strong financial flexibility.

    Capital Contribution to Holding Company
    $325 million
    Q1 FY26

    Periodic distribution from Jackson National Life.

    Total Adjusted Capital
    $5.5 billion
    End of Q1 FY26

    After considering impact of distribution on deferred tax assets.

    Estimated RBC Ratio
    554%comfortably above minimum target
    End of Q1 FY26

    Jackson National Life's capital position.

    PCAPs Facility
    $900 million
    null

    Strengthens liquidity profile and reinforces capital resilience.

    Total Available Liquidity
    $3 billion
    End of Q1 FY26
    Available Liquidity
    $35 billion
    End of Q1 FY26
    Federal Home Loan Bank Capacity
    $2.6 billion
    null

    Additional capacity.

    Total Leverage Ratio
    19.8%among the lowest in peer group
    End of Q1 FY26

    Provides meaningful financial flexibility.

    PPM America Total Assets Under Management
    $95 billion
    End of Q1 FY26

    Third-party AUM has grown meaningfully since separation.

    Investment Portfolio Market-to-Book Ratio
    95%
    End of Q1 FY26

    Reflects disciplined asset selection and prudent portfolio management.

    Below Investment-Grade Securities Exposure
    1%very limited
    End of Q1 FY26
    Corporate Securities Allocation
    57%
    End of Q1 FY26

    Part of diversified investment portfolio.

    Private Debt Portfolio Traditional Private Placements
    63%
    End of Q1 FY26

    Part of private investment exposure.

    Private Debt Portfolio Investment Grade
    99%
    End of Q1 FY26

    Conservatively positioned.

    Net Hedge Result
    -$101 millionloss
    Q1 FY26

    Driven by market dislocations and actively managed fund underperformance versus benchmarks.

    Capital Contribution to Brooke Re
    $500 million
    Q1 FY26

    Despite this, Brooke Re experienced a loss of approximately $100 million during the quarter.

    Brooke Re Loss
    $100 millionloss
    Q1 FY26

    Experienced during the quarter, after capital contribution.

    Industry KPIs

    1
    MetricValueDetails
    Capital returns$257 millionUSD

    Product announcements

    2
    ProductTypeDetails
    Jackson Income Assurancelaunch
    Marketlink Pro 3 and Marketlink Pro Advisory IIIupdate

    Deals & partnerships

    1
    TPGLong-term strategic investment partnership focused on asset-based finance and direct lending areas.long-term

    TPG began deploying capital in Q1 FY26. Provides access to deep expertise in direct lending, particularly in the lower middle market segment. PPM maintains oversight and establishes investment guidelines.

    Risks & headwinds

    5
    Underperformance of limited partnership investmentsQ1 FY26

    $0.48 unfavorable impact on EPS

    Mitigation: Management remains confident in the underlying strength and long-term performance of the portfolio, despite quarterly fluctuations.

    Temporarily higher claims due to enhanced policyholder identification processesQ1 FY26

    $0.42 unfavorable impact on EPS

    Mitigation: Strengthens data integrity, streamlines policyholder experience, and ensures greater consistency in future reporting.

    Market volatility impacting fee incomeQ1 FY26

    approximately $30 million of headwinds in fee income this quarter

    Mitigation: Driven by slightly lower average AUM and fewer days in the quarter. Market recovery early in Q2 positions well for the remainder of the quarter.

    Net hedging loss due to market dislocations and actively managed fund underperformanceQ1 FY26

    $101 million loss

    Mitigation: Brooke Re's capitalization remains well above internal risk management target and regulatory minimum. Historically, these effects have tended to balance out over time.

    Potential for higher surrender activityRemainder of Q2 FY26 and beyond

    directional

    Mitigation: Higher surrender activity would also support growth in variable annuity AUM and fee income. The all-in surrender rate declined in Q1.

    What to watch in Q2 FY26

    5

    Free Capital Generation

    Next quarter
    Current$271 million in Q1 FY26
    TargetOn track for $1.2 billion for FY26

    Why it matters

    Free capital generation is a key indicator of underlying business strength and supports capital return to shareholders.

    For full year 2026, we continue to expect to generate at least $1.2 billion in free capital, assuming equity markets deliver a 5% return and interest rates move in line with the year-end forward curve.

    Q&A highlights

    7

    What percentage of Q1 annuity sales are new business versus internal exchanges?

    All reported Q1 sales are new business, with no internal exchanges.

    “the first quarter sales, which were very healthy at $5.3 billion, are a reflection of new business without any internal exchanges.”

    asked by Suneet Kamath · answered by Laura Prieskorn

    2 min read6 chapters

    Detailed Narrative

    01

    Diversification and Product Strategy

    Jackson is actively diversifying its product portfolio, with nearly 40% of account values now from spread-based and investment-only variable annuities, a significant shift since separation. The company launched Jackson Income Assurance (FIA) in August 2025 and refreshed its RILA products in mid-2025, contributing to strong sales growth and a balanced product mix. This strategy aims to drive profitable growth and expand distribution reach.

    02

    Capital Management and Shareholder Returns

    The company maintains a disciplined "earn it, then pay it" capital management philosophy, generating free capital and converting it into free cash flow for shareholder returns. In Q1 FY26, $288 million was distributed to the holding company, and $257 million was returned to common shareholders, an 11% increase year-over-year. Since becoming independent, Jackson has returned nearly $3 billion to shareholders, exceeding its initial market capitalization.

    03

    Investment Strategy and TPG Partnership

    Jackson's investment strategy focuses on diversification, disciplined credit management, and high-quality assets. The recently announced partnership with TPG brings expertise in asset-based finance and direct lending, complementing PPM's capabilities and enhancing investment returns for spread-based products. While current private credit exposure is low, the partnership allows opportunistic investment at attractive valuations, with capital already being deployed.

    04

    Net Flows and Surrender Activity

    Net outflows improved by 30% year-over-year and nearly 6% sequentially, driven by significant RILA inflows and lower variable annuity surrenders. The decline in surrender activity reflects recent equity market uncertainty🌐. Management expects continued withdrawal activity from the maturing variable annuity block but notes that higher equity markets could lead to increased surrenders while also supporting AUM growth and fee income.

    05

    Hedging Program and Capital Stability

    Jackson's hedging program, which moved to a more economic approach in early 2024, aims for consistent outcomes and predictable capital generation. Despite a net hedge loss of $101 million in Q1, primarily from the VA business due to market dislocations and actively managed fund underperformance, Brooke Re's capitalization remains well above internal targets and regulatory minimums. The company views this as a stable and well-managed outcome, underscoring the program's effectiveness in maintaining capital stability.

    06

    PPM America's Strategic Role

    PPM America, Jackson's wholly-owned asset management subsidiary, manages $95 billion in total AUM, including $59 billion of Jackson's assets and $36 billion for third parties. PPM is crucial for sourcing attractive yields, supporting product competitiveness, and ensuring alignment between investment strategy, asset-liability management, and risk management. Its expanded capabilities in higher-yielding asset classes and oversight of third-party managers like TPG reinforce its strategic importance.

    AI-generated summary of the company’s earnings call. Not investment advice.