Jackson® Reports 2012 Record IFRS Net Income of $992.0 Million
Mar 13th 2013 9:50AM
Updated Mar 13th 2013 9:56AM
Jackson ® Reports 2012 Record IFRS Net Income of $992.0 Million
- Record 2012 IFRS1 net income of $992.0 million, up 73.0%
- Record total sales and deposits2 of $25.5 billion, up 11.3%
- Year-end 2012 IFRS assets total $165.4 billion, up from $119.0 billion at year-end 2011
- Year-end 2012 regulatory adjusted capital of $4.7 billion, up from $3.9 billion at year-end 2011
LANSING, Mich.--(BUSINESS WIRE)-- Jackson National Life Insurance Company® (Jackson) reported record IFRS net income of $992.0 million for full-year 2012, up from $572.8 million in full-year 2011, driven primarily by higher fee income from variable annuities.
Jackson, an indirect wholly owned subsidiary of the United Kingdom's Prudential plc (NYS: PUK) , increased total IFRS assets to $165.4 billion3 at the end of 2012, up from $119.0 billion at the end of 2011. As of December 31, 2012, the company had $4.7 billion of regulatory adjusted capital, more than eight times the minimum regulatory requirement.4
On September 4, 2012, Jackson completed the acquisition of SRLC America Holding Corp. (SRLC) from Swiss Re Life Capital Ltd (Swiss Re) for an initial consideration of $587.3 million.5 SRLC was the U.S. holding company of Reassure America Life Insurance Company (REALIC), which was merged into Jackson on December 31, 2012. The acquisition helps diversify Jackson's sources of earnings by increasing the amount of income generated from stable life insurance profits.
"In 2012, Jackson had a successful year and we are pleased with the progress that has been made on several fronts. During the year, we delivered record IFRS profits and record sales despite the challenges that the industry faces from the current low-interest rate environment. We completed the acquisition of SRLC which has broadened our policyholder base and enhanced the resilience of our earnings. We launched a new variable annuity product, Elite Access®, which provides tax-efficient access to alternative investments. And, most importantly, we maintained a strong capital position throughout the entire year. There is good momentum within our businesses and we are well positioned as we move into 2013," said Mike Wells, Jackson's president and chief executive officer.
During 2012, 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 March 12, 2013, Jackson had the following ratings:6
- 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 $25.5 billion in total sales and deposits during 2012, compared to $22.9 billion in 2011. Variable annuity (VA) sales totaled $19.7 billion, compared to $17.5 billion during 2011. In March 2012, Jackson launched Elite Access®, a variable annuity which gives individual investors the ability to access alternative investments. Elite Access contributed more than $1.3 billion to Jackson's VA sales total during 2012.
"We're very pleased with the traction Elite Access has gained in the market," said Clifford Jack, executive vice president and head of retail for Jackson. "In 2012, Jackson hosted hundreds of events to help educate advisors on how to effectively utilize alternative asset classes and confidently explain them to their clients. This year, we have planned a more ambitious educational campaign to further support advisors and ensure they are comfortable with the nuances of the investment options available to them through the Elite Access platform."
Sales of fixed and fixed index annuities (FIAs) also increased in 2012, as competitive conditions became more favorable. Fixed annuity sales increased to $921.0 million from $756.2 million in 2011, and FIA sales of $1.7 billion compared to $1.5 billion in 2011.
Jackson participates in the institutional market (guaranteed investment contracts, medium-term notes and funding agreements) on an opportunistic basis. Jackson issued $599.8 million of institutional products, up from $381.8 million in 2011, at spread levels higher than its historical targets.
Subsidiary and Affiliate Performance
Curian Capital® LLC (Curian), Jackson's retail asset management subsidiary that provides customized investment management products and services to financial representatives and institutional clients, continued to generate positive net flows during 2012. Deposits totaled $2.5 billion and assets under management in its core business increased to $8.9 billion as of year-end 2012, up from $7.3 billion at year-end 2011. Curian reported 2012 IFRS net income of $23.6 million, compared to $10.0 million during the prior year.
Jackson's affiliate, National Planning Holdings®, Inc. (NPH®), a network of four independent broker-dealers, generated IFRS revenue of $837.2 million, compared to $787.8 million in 2011, and IFRS net income of $16.5 million, compared to $13.4 million in 2011. The network reported gross product sales of $16.6 billion, compared to $16.3 billion in 2011.
During the first nine months of 2012 (the latest industry data available), Jackson ranked:
- First in total annuity sales, with a market share of 10.4 percent;7
- Second in VA new sales, with a market share of 14.0 percent;8
- Second in VA net flows;9
- Sixth in total VA assets; 8
- Eighth in FIA sales, with a market share of 4.9 percent;10 and
- Seventh in deferred fixed-rate annuity sales with a market share of 3.6 percent.7
Jackson's growth during 2012 facilitated the recruitment of 321 new employees, taking Jackson's total headcount to 4,337 people. Employee growth was delivered in all of Jackson's regional centers including Lansing, Nashville and Denver.
1 International Financial Reporting Standards (IFRS) is a principles-based set of international accounting standards indicating how transactions and other events should be reported in financial statements. IFRS is issued by the International Accounting Standards Board in an effort to increase global comparability of financial statements and results. Jackson's parent, Prudential plc, uses IFRS to report the Group's financial results.
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 Jackson also has $150.9 billion of IFRS policy liabilities primarily set aside to pay future policyowner benefits (as of 12/31/12).
4 Based on authorized control level regulatory capital requirements.
5 On September 4, 2012, Jackson acquired 100% of the equity of SRLC from Swiss Re for a preliminary purchase price of $663.3 million, which was reduced by an estimated $73.9 million current net operating loss carryback income tax recoverable, resulting in a cash payment of $589.4 million at the time of sale. Subsequent adjustments reduced the preliminary purchase price to $587.3 million, which remains subject to final agreement with Swiss Re.
SRLC's primary subsidiary was REALIC, which was merged into Jackson on December 31, 2012. REALIC's primary business activity involved the acquisition of blocks of life insurance, including corporate owned life insurance, disability income and/or annuity contracts in force. In addition to REALIC, SRLC had other insignificant subsidiaries. Subsequent to the purchase, SRLC was dissolved and its subsidiaries became direct subsidiaries of Jackson.
6 Financial strength ratings do not apply to the principal amount or investment performance of the separate account or underlying investments of variable products.
7 Source: LIMRA U.S. Individual Annuities Sales Survey, Third Quarter 2012. Jackson ranked first in total annuity sales out of 57 participating companies that reported sales during the period. Jackson ranked seventh in fixed-rate deferred annuity sales out of 57 participating companies that reported sales during the period. Market share calculated from LIMRA survey data.
8 Source: © 2012 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Morningstar Annuity Research Center (MARC), Third Quarter 2012 YTD Sales Reports©. Jackson ranked second in VA sales out of 36 VA companies that reported sales during the period. Jackson ranked sixth in total VA assets out of 48 VA companies that reported assets during the period.
9 Jackson ranked second in VA net flows out of 21 participating companies from the MARC Third Quarter 2012 YTD Net Flow Report© and one company from its quarterly financial supplement.
10 Source: AnnuitySpecs Indexed Sales & Market Report Third Quarter 2012. Jackson ranked eighth out of 39 companies that reported sales during the period. Copyright © 2012, AnnuitySpecs.com.
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 across 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
With $165.4 billion in assets (IFRS)*, Jackson National Life Insurance Company (Jackson) is a leading provider of retirement solutions. The company sells variable, fixed and fixed index annuities, and institutional products. Through its affiliates and subsidiaries, Jackson also provides asset management and retail brokerage services. Jackson markets its products in 49 states and the District of Columbia through independent and regional broker-dealers, wirehouses, financial institutions and independent insurance agents. Jackson's subsidiary, Jackson National Life Insurance Company of New York ® , similarly markets products in the state of New York. For more information, visit www.jackson.com .
*Jackson has $165.4 billion in total IFRS assets and $150.9 billion in IFRS policy liabilities primarily set aside to pay future policyowner benefits (as of 12/31/12).
Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such as a 401(k) or IRA, and may be found at a lower cost in other investment products. It also may not be available if the annuity is owned by a "non-natural person" such as a corporation or certain types of trusts.
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). Variable annuities are distributed by Jackson National Life Distributors LLC, member FINRA, and may not be available in all states, and state variations apply. This product has 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.
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 in England and Wales. Prudential plc and its affiliated companies constitute one of the world's leading financial services groups. It provides insurance and financial services through its subsidiaries and affiliates throughout the world. It has been in existence for over 160 years and has $658.3 billion in assets under management (as of December 31, 2012). 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
KEYWORDS: United States North America Michigan
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