|[March 14, 2017]
Jackson Reports Record 2016 Financial Results1
National Life Insurance Company® (Jackson®)
generated $2.8 billion in IFRS pre-tax operating income during 2016, an
increase of 7 percent over 2015 and the highest in company history.
Jackson, an indirect wholly owned subsidiary of the United Kingdom's
Prudential plc (NYSE: PUK), recorded sales and deposits of $21.1 billion
in 2016. The results mark another highly successful year for the
company, despite recent challenges faced throughout the industry.
Barry Stowe, chairman and chief executive officer of the North American
Business Unit of Prudential plc4, said the results were
primarily driven by strong variable annuity net flows and the growth of
separate account assets under management, which totaled a record $148.8
billion in 2016.
"At Jackson, our long-term, disciplined approach to business is centered
on aligning the needs of our stakeholders," Stowe said. "In 2016, this
discipline enabled us to successfully manage volatile macroeconomic
conditions and consistently drive positive outcomes amid adversity."
"The products we provide are a crucial component of a well-balanced
retirement plan," Stowe continued. "The looming retirement crisis for
under-saved Americans presents an opportunity for us to provide
guaranteed income solutions that will support investors into and through
retirement. As a leading provider of variable annuities, we'll continue
to focus our efforts on creating value for consumers and providing
quality products that meet the needs of those in search of a viable
Jackson continues to maintain its financial strength and capital
position. The company increased total IFRS assets to $236.9 billion at
the end of 2016, up 8 percent from year-end 2015. Jackson also increased
regulatory adjusted capital to $5.3 billion, more than nine times the
minimum regulatory requirement (as of December 31, 2016), while
remitting a $550 million dividend to its parent company.
1Financial results from Jackson National Life
Insurance Company and its subsidiaries have been included in Jackson's
financial results. Jackson results exclude its separately managed
account business as new deposits have been discontinued effective July
31, 2015. Fixed index annuities, life insurance and institutional
products are not sold in New York.
2International 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
(Group), uses IFRS 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
both IFRS net income as well as net income based on US generally
accepted accounting principles (US GAAP) is as follows (amounts in
IFRS basis pretax income from operations
Net hedge results and change in value of derivatives, net of DAC
Net realized investment gains, net of DAC amortization and
Normalization of longer-term investment returns, net of DAC
Income tax benefit
IFRS net income
IFRS to US GAAP adjustments, net of tax
US GAAP basis net income attributable to Jackson
Jackson's net income was impacted by hedging losses incurred due to the
equity market, which were not fully offset by the release of accounting
reserves. IFRS accounting for variable annuity liabilities is not
necessarily consistent with the economic value of these liabilities.
Jackson continues to manage its hedge program on an economic basis and
is willing to accept the accounting volatility that results.
3Jackson also has $223.1 billion of IFRS policy
liabilities set aside to pay future policy owner benefits (as of
December 31, 2016).
4The North American Business Unit of Prudential plc
includes Jackson, its subsidiaries Jackson National Life Distributors
LLC (JNLD) and Jackson National Asset Management, LLC®
(JNAM) and its U.S. affiliates National Planning Holdings®,
Inc. (NPH) and PPM (News - Alert) America, Inc. (PPMA).
About Jackson National Life Insurance Company
Jackson is a leading provider of retirement products 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 $236.9 billion in IFRS 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 has $236.9 billion in total IFRS assets and $223.1 billion
in IFRS policy liabilities set aside to pay primarily future policyowner
benefits (as of December 31, 2016). 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 company.
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 165 years and has $740.6 billion in assets
under management (as of December 31, 2016). 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.
This press release may contain certain statements that constitute
"forward-looking statements." 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. Any forward-looking
statements reflect Jackson's views and assumptions as of the date of
this press release and Jackson disclaims any obligation to update
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