(Source: Business Wire)
Jackson National Life Insurance Company® (Jackson) generated $4.5 billion of International Financial Reporting Standards (IFRS)1 revenue in 2008 and achieved the second-best sales performance in the company's history. Jackson's IFRS pretax operating income was $761 million2; however, net earnings were negatively impacted by $1.0 billion in net realized losses on investments, which were the primary driver of an IFRS net loss of $1.0 billion in 2008.
"Under challenging economic conditions, Jackson delivered strong sales and good pretax operating income," said Clark Manning, Jackson's president and chief executive officer. "Jackson's conservative approach to risk management allowed the company to preserve capital and mitigate the impact of falling equity markets and frozen credit markets during the latter half of the year."
Jackson, an indirect wholly owned subsidiary of the United Kingdom's Prudential plc (NYSE: PUK), recorded sales and deposits of more than $14.0 billion3 in 2008, down slightly from record sales of $14.5 billion in the prior year. At year-end 2008, Jackson had nearly $4.0 billion of regulatory adjusted capital, nearly nine times the regulatory requirements4, after remitting a $280-million dividend to its parent company.
"Due to disciplined pricing and comprehensive hedging of variable annuity guarantees, Jackson's equity hedging program performed as designed, on a statutory capital basis, offsetting the effect of the 38.5-percent drop in the S&P 500 Index in 2008," said Andy Hopping, Jackson's chief financial officer.
Jackson reduced its statutory general expense to average assets ratio to 47 basis points in 2008 from 49 basis points in 2007, giving the company a 28-basis-point advantage over the average expense ratio of its top 25 annuity competitors.5 Although Jackson increased the efficiency of its operations, it was not at the expense of service. In 2008, Jackson earned its fourth World Class Customer Satisfaction award from the Service Quality Measurement (SQM) group and SQM's Highest Satisfaction by Industry award for having the highest customer satisfaction in the financial services industry.
Jackson's retail sales and deposits, which exclude institutional product sales, exceeded $11.8 billion in 2008, compared to $12.6 billion in 2007.3 Variable annuity sales totaled $6.5 billion, down from $9.1 billion during the prior year, reflecting continued volatility in US equity markets and intense price competition. Jackson ranked 12th in new VA sales in 2008, the same as in 2007.6 In the fourth quarter of 2008, Jackson climbed two spots to rank 10th in new VA sales.6 In full-year 2008, Jackson's flagship variable annuity, Perspective II®, was the top-selling VA contract in the independent broker-dealer channel for the sixth year in a row.7
Sales of traditional fixed annuities were $3.2 billion during 2008, up from $1.1 billion in 2007, reflecting Jackson's ability to meet changing customer demands through the company's diversified product portfolio. Jackson sold $928 million in fixed index annuities, up from $894 million during 2007. According to LIMRA, during the fourth quarter of 2008, Jackson achieved a top-10 ranking in total annuity sales, as well as in variable annuity, fixed annuity and fixed index annuity sales.8
Curian Capital, Jackson's separately managed accounts subsidiary, accumulated $1.1 billion in deposits during 2008, compared to $1.3 billion in the prior year.
