Q2 2024 Jackson Financial Inc Earnings Call

August 8, 2024

Investor Relations page of our website at www.investors.jackson.com

Unknown Executive: Joining us today are our CEO, Laura Prieskorn; our CFO, Don Cummings; the president of Jackson National Life Distributors, Scott Romine; our head of asset liability management and chief actuary, Steve Benures; and the president and chief investment officer of PPM, Craig Smith.

Unknown Executive: Joining us today are our CEO, Laura Prieskorn, our CFO, Don Cummings, the President of Jackson National Life Distributors, Scott Romine, our Head of Asset Liability Management and Chief Actuary, Steve Benirez, and the President and Chief Investment Officer of PPM, Craig Smith.

Unknown Executive: Joining us today are our CEO , Laura Prieskorn, our CFO , Don Cummings, the President of Jackson National Life Distributors, Scott Romine, our Head of Asset Liability Management and Chief Actuary, Steve Benyarras, and the President and Chief Investment Officer of PPM, Craig Smith.

Unknown Executive: Joining us today are our CEO, Laura Prieskorn, our CFO, Don Cummings, the president of Jackson National Life Distributors, Scott Romine, our head of asset liability management and chief actuary, Steve Benures, and the president and chief investment officer of PPM Craig Smith.

Laura Prieskorn: At this time, I'll turn the call over to our CEO, Laura Prieskorn.

Unknown Executive: at Investors. Jaxon.com Joining us today are our CEO, Laura Prieskorn, our CFO, Don Cummings, the President of Jackson National Life Distributors, Scott Romine, our Head of Asset Liability Management and Chief Actuary, Steve DeNures, and the President and Chief Investment Officer of PPM, Craig Smith. At this time, I'll turn the call over to our CEO, Laura Prieskorn.

Unknown Executive: At this time, I'll turn the call over to our CEO , Laura Prieskorn.

Laura Prieskorn: At this time, I'll turn the call over to our CEO, Laura Prieskorn. Good morning, everyone. As we moved through the second quarter, our operating trends in strong capital levels supported positive financial results in sustainable capital return. Today, we look forward to discussing our second quarter results and progress through the first half of 2024. Beginning on slide three, we achieved positive net income and solid operating earnings growth in the second quarter of 2024, driven by increased fee income from higher average annuity assets under management and higher net investment income.

Laura Prieskorn: Good morning, everyone. As we moved through the second quarter, our operating trends and strong capital levels supported positive financial results and sustainable capital return. Beginning on slide three, we achieved positive net income and solid operating earnings growth in the second quarter of 2024, driven by increased fee income from higher average annuity assets under management and higher net investment income. We continue to see successful retail annuity sales across all product lines. This shows our continued focus on execution.

Laura Prieskorn: Good morning, everyone. As we moved through the second quarter, our operating trends in strong capital levels supported positive financial results in sustainable capital return. Today, we look forward to discussing our second quarter results and progress through the first half of 2024. Beginning on slide three, we achieved positive net income and solid operating earnings growth in the second quarter of 2024, driven by increased fee income from higher average annuity assets under management and higher net investment income.

Laura Prieskorn: Today, we look forward to discussing our second quarter results and progress through the first half of 2024.

Laura Prieskorn: Beginning on slide 3, we achieved positive net income and solid operating earnings growth in the second quarter of 2024, driven by increased fee income from higher average annuity assets under management and higher net investment income.

Laura Prieskorn: The benefits of a favorable equity market and strong annuity sales contributed to growth from the second quarter of 2023 and from the first quarter of this year.

Laura Prieskorn: The benefits of a favorable equity market and strong annuity sales contributed to growth from the second quarter of 2023 and from the first quarter of this year. We continue to see successful retail annuity sales across all product lines, demonstrating our continued focus on execution. Jackson provides a range of annuity solutions to advisors and their clients, and in the second quarter of 2024, we saw strong demand for registered index linked annuities where RILA's and traditional variable annuities.

Laura Prieskorn: We continue to see successful retail annuity sales across all product lines, demonstrating our continued focus on execution. Jackson provides a range of annuity solutions to advisors and their clients, and in the second quarter of 2024, we saw strong demand for registered index linked annuities, where RILA's and traditional variable annuities. Total retail annuity sales grew 36% from the second quarter of 2023 and 15% from the first quarter of this year. Variable annuity sales benefited from rising equity markets and the opportunity for equity growth available through our commitment to investment freedom. Our second quarter variable annuity sales of 2.7 billion represented a return to a level we last saw in the third quarter of 2022.

Laura Prieskorn: We continue to see successful retail annuity sales across all product lines, demonstrating our continued focus on execution.

Laura Prieskorn: Jackson provides a range of annuity solutions to advisors and their clients, and in the second quarter of 2024, we saw strong demand for registered index linked annuities for RILAs and Traditional Variable Annuity. Total retail annuity sales grew 36% from the second quarter of 2023 and 15% from the first quarter of this year. Variable annuity sales benefited from rising equity markets and the opportunity for equity growth available through our commitment to investment freedom. Our second quarter variable annuity sales of $2.7 billion represented a return to a level we last saw in the third quarter of 2022. We continue to build momentum in Ryla Sails.

Laura Prieskorn: Jackson provides a range of annuity solutions to advisors and their clients, and in the second quarter of 2024, we saw strong demand for registered index-linked annuities, or RILAs, and traditional variable annuities.

Laura Prieskorn: total retail annuity sales grew thirty-six percent from the second quarter of two thousand and twenty three and fifteen percent from the first quarter of this year

Laura Prieskorn: Total retail annuity sales grew 36% from the second quarter of 2023 and 15% from the first quarter of this year. Variable annuity sales benefited from rising equity markets and the opportunity for equity growth available through our commitment to investment freedom. Our second quarter variable annuity sales of 2.7 billion represented a return to a level we last saw in the third quarter of 2022. We continue to build momentum in RILA sales, reaching a record $1.4 billion in the second quarter with an increasing share of new and reactivated advisors selling RILA as their leading annuity solution, demonstrating that RILA continues to be a source of diversification and a product of choice for our financial professionals.

Laura Prieskorn: Variable annuity sales benefited from rising equity markets and the opportunity for equity growth available through our commitment to investment freedom.

Laura Prieskorn: Our second quarter variable annuity sales of $2.7 billion represented a return to a level we last saw in the third quarter of 2022.

Laura Prieskorn: We continue to build momentum in RILA sales, reaching a record $1.4 billion in the second quarter with an increasing share of new and reactivated advisors selling RILA as their leading annuity solution, demonstrating that RILA continues to be a source of diversification and a product of choice for our financial professionals. We expect Jackson's sales momentum to continue as we focus on providing the best solutions to U.S. retirement sabers through our product innovation, strength and distribution, investing class service. Our traditional investment-only variable annuity and RILA products were once again recognized in Variance Annual 100 Best Annuity Skyd published in late July.

Laura Prieskorn: Reaching a record $1.4 billion in the second quarter with an increasing share of new and reactivated advisors selling RILA as their leading annuity solution, demonstrating that RILA continues to be a source of diversification and a product of choice for our financial advisors. We expect Jackson's sales momentum to continue as we focus on providing the best solutions to US retirement savers through our product innovation, strength, and distribution, and best in Our traditional investment-only variable annuity and Ryla products were once again recognized in Barron's annual 100 Best Annuities Guide published in late July.

Laura Prieskorn: demonstrating that riila continues to be a source of diversification and a product of choice for our financial professionals

Laura Prieskorn: We expect Jackson's sales momentum to continue as we focus on providing the best solutions to U.S. retirement savers through our product innovation, strength in distribution, and best-in-class service.

Laura Prieskorn: We expect Jackson's sales momentum to continue as we focus on providing the best solutions to U.S, retirement sabers through our product innovation, strength and distribution, investing class service. Our traditional investment only variable annuity and RILA products were once again recognized in variance annual 100 best annuity skyd published in late July. I'm proud that these products were highlighted across three categories for offering exceptional value for policy holders. Preliminary data from industry trade organization, Lemra, shows the overall U.S, annuity market is expected to set a new sales record in the first half of 2024.

Laura Prieskorn: Our traditional investment only variable annuity and RILA products were once again recognized in Barron's annual 100 Best Annuities Guide published in late July .

Laura Prieskorn: I'm proud that these products were highlighted across three categories for offering exceptional value for policyholders. Preliminary data from industry trade organization, Lemra, shows the overall U.S. Annuity market is expected to set a new sales record in the first half of 2024. According to their recent forecast, sales of traditional VA are expected to exceed $40 billion in 2020. 44, up more than 15% from 2023, and sales of Rila are expected to exceed 50 billion in 2024, up approximately 8% from 2023. We're excited about the growth the industry is seeing across product lines as more American-seq solutions offering guaranteed lifetime income.

Laura Prieskorn: I'm proud that these products were highlighted across three categories for offering exceptional value for the policy. Preliminary data from industry trade organization, LIMRA, shows the overall U.S. annuity market is expected to set a new sales record in the first half of 2024. According to their recent forecast, sales of traditional VA are expected to exceed $40 billion in 2024, up more than 15% from 2023, and sales of Rila are expected to exceed $50 billion in 2024, up approximately 8% from 2022.

Laura Prieskorn: I'm proud that these products were highlighted across three categories for offering exceptional value for policyholders.

Speaker Change: preliminary data from industry trade organization limmra shows the overall u s annuity market is expected to set a new sales record in the first half of two thousand and twenty-four

Laura Prieskorn: According to their recent forecast, sales of traditional VA are expected to exceed $40 billion in 2020. 44, up more than 15% from 2023, and sales of Rila are expected to exceed 50 billion in 2024, up approximately 8% from 2023. We're excited about the growth the industry is seeing across product lines as more American-seq solutions offering guaranteed lifetime income. Critical to this continued growth is a focus on enhancing the digital experience for financial professionals and consumers to strengthen understanding of an annuities value to a confident and secure retirement.

Laura Prieskorn: according to their recent forecast

Laura Prieskorn: Sales of Traditional VA are expected to exceed $40 billion in 2024, up more than 15 percent from 2023, and sales of RILA are expected to exceed $50 billion in 2024, up approximately 8 percent from 2023.

Laura Prieskorn: We're excited about the growth the industry is seeing across product lines as more Americans seek solutions offering guaranteed lifetime income. Critical to this continued growth is a focus on enhancing the digital experience for financial professionals and consumers to strengthen understanding of annuity's value to a confident and secure retirement. The platform also serves clients, helping them to plan their journey more easily toward financial freedom. As an example, we have enhanced the capabilities within our digital ecosystem, a one-stop platform for financial professionals.

Laura Prieskorn: We're excited about the growth the industry is seeing across product lines as more Americans seek solutions offering guaranteed lifetime income. Critical to this continued growth is a focus on enhancing the digital experience for financial professionals and consumers to strengthen understanding of annuity's value to a confident and secure retirement. Jackson has a long history of investing in technology, which we believe has contributed to our competitive cost structure and exceptional service delivery for financial professionals and their clients.

Laura Prieskorn: We're excited about the growth the industry is seeing across product lines as more Americans seek solutions offering guaranteed lifetime income.

Laura Prieskorn: Critical to this continued growth is a focus on enhancing the digital experience for financial professionals and consumers to strengthen understanding of an annuities value to a confident and secure retirement. Jackson has a long history of investing in technology, which we believe has contributed to our competitive cost structure and exceptional service delivery for financial professionals and their clients. We are a leader in digital connectivity through data exchanges and integrations within the annuity industry ecosystem. This allows us to connect to an advisor's platform of choice, making annuities more accessible for financial professionals and their clients, and making it easier to do business with Jackson.

Laura Prieskorn: Jackson has a long history of investing in technology, which we believe has contributed to our competitive cost structure and exceptional service delivery for financial professionals and their clients.

Laura Prieskorn: Jackson has a long history of investing in technology which we believe has contributed to our competitive cost structure and exceptional service delivery for financial professionals and their clients. We are a leader in digital connectivity through data exchanges and integrations within the annuity industry ecosystem. This allows us to connect to an advisor's platform of choice, making annuities more accessible for financial professionals and their clients and making it easier to do business with Jackson.

Laura Prieskorn: We are a leader in digital connectivity through data exchanges and integrations within the industry. This allows us to connect to an advisor's platform of choice, making annuities more accessible for financial professionals and their clients, and making it easier to do business with Jackson. With a variety of educational tools and information available, Jackson.com serves as a platform for financial professionals to build their practice, support their clients, and optimize annuities in their current books of business.

Laura Prieskorn: we are a leader in digital connectivity through data exchanges and integrations within the annuity industry ecosystem

Laura Prieskorn: This allows us to connect to an advisor's platform of choice, making annuities more accessible for financial professionals and their clients, and making it easier to do business with Jackson.

Laura Prieskorn: With a variety of educational tools and information available, Jackson.com serves as a platform for financial professionals to build their practice, support their clients, and optimize annuities in their current books of business. The platform also serves clients, helping them to plan their journey more easily towards financial freedom. As an example, we have enhanced the capabilities within our digital ecosystem: a one-stop platform for financial professionals. This digital experience, initially available for our Rila products, allows advisors to illustrate how a Rila could fit within a client's portfolio to meet their specific needs based on customized market scenarios. We have seen substantial growth in activity for this platform, with second quarter 2024 visits up nearly 75 percent compared to the second quarter of 2023.

Laura Prieskorn: With a variety of educational tools and information available, Jackson.com serves as a platform for financial professionals to build their practice, support their clients and optimize annuities in their current books of business. The platform also serves clients helping them to plan their journey more easily towards financial freedom. As an example, we have enhanced the capabilities within our digital ecosystem a one-stop platform for financial professionals. This digital experience initially available for our Rila products allows advisors to illustrate how a Rila could fit within a client's portfolio to meet their specific needs based on customized market scenarios.

Laura Prieskorn: The platform also serves clients, helping them to plan their journey more easily towards financial freedom. As an example, we have enhanced the capabilities within our digital ecosystem, a one-stop platform for financial professionals. This digital experience, initially available for our RYLA products, allows advisors to illustrate how a RYLA could fit within a client's portfolio to meet their specific needs based on customized market scenarios. We have seen substantial growth in activity for this platform, with second quarter 2024 visits up nearly 75% compared to the second quarter of 2020.

Laura Prieskorn: the platform also serves clients helping them to plan their journey more easily pooured financial freedom

Laura Prieskorn: As an example, we have enhanced the capabilities within our digital ecosystem, a one-stop platform for financial professionals.

Laura Prieskorn: This digital experience, initially available for our RYLA products, allows advisors to illustrate how a RYLA could fit within a client's portfolio to meet their specific needs based on customized market scenarios.

Laura Prieskorn: We have seen substantial growth in activity for this platform, with second quarter 2024 visits up nearly 75% compared to the second quarter of 2020. Additionally, approximately one-third of our RILA sales this quarter came from producers utilizing our RILA digital ecosystem, clearly demonstrating that financial professionals are relying on our industry-leading technology to provide clients with better information and services.

Laura Prieskorn: We have seen substantial growth in activity for this platform, with second quarter 2024 visits up nearly 75% compared to the second quarter of 2023.

Laura Prieskorn: We have seen substantial growth in activity for this platform with second quarter 2024 visits up nearly 75 percent compared to the second quarter of 2023. The success of our Rila digital ecosystem experience has led to stronger sales lead generation contributed to new advisor relationships and furthered our sales momentum. Approximately one-third of our Rila sales discordr came from producers utilizing our Rila digital ecosystem. Clearly demonstrating that financial professionals are relying on our industry leading technology to provide clients with better information and service.

Laura Prieskorn: The success of our Rila digital ecosystem experience has led to stronger sales lead generation, contributed to new advisor relationships, and furthered our sales momentum. Approximately one-third of our Rila sales discord came from producers utilizing our Rila digital ecosystem. Clearly demonstrating that financial professionals are relying on our industry leading technology to provide clients with better information and service. Jackson also plays a leadership role in the Insured Retirement Institute's Digital First for Annuities initiative, helping to establish industry-wide data standards and embracing innovation to ensure financial professionals and clients experience a streamlined and modern approach to retirement planning.

Laura Prieskorn: The success of our Ryla digital ecosystem experience has led to stronger sales lead generation, contributed to new advisor relationships, and furthered our sales momentum. Approximately one-third of our RILA sales discordor came from producers utilizing our RILA digital ecosystem. Clearly demonstrating that financial professionals are relying on our industry-leading technology to provide clients with better information and service, Jackson also plays a leadership role in the Insured Retirement Institute's Digital First for Annuities initiative.

Laura Prieskorn: The success of our RILA digital ecosystem experience has led to stronger sales lead generation, contributed to new advisor relationships, and furthered our sales momentum.

Laura Prieskorn: Approximately one-third of our RILA sales this quarter came from producers utilizing our RILA digital ecosystem, clearly demonstrating that financial professionals are relying on our industry-leading technology to provide clients with better information and service.

Laura Prieskorn: Jackson also plays a leadership role in the Insured Retirement Institute's Digital First for Annuities initiative.

Laura Prieskorn: Jackson also plays a leadership role in the insured retirement institute's digital first for annuities initiative helping to establish industry-wide data standards and embracing innovation to ensure financial professionals and clients experience a streamlined and modern approach to retirement planning. We look forward to continuing this important work to enhance the overall digital experience and simplify integration of our products within the industry. Turning back to slide three during the second quarter of 2024 and excluding the impact of its distribution to JFI, Jackson National Life's total adjusted capital grew by 321 million dollars, and for the first half of the year increased by $681 million.

Laura Prieskorn: Helping to establish industry-wide data standards and embracing innovation to ensure financial professionals and clients experience a streamlined and modern approach to retirement planning. We look forward to continuing this important work to enhance the overall digital experience and simplify integration of our products within the industry. Turning back to slide 3, during the second quarter of 2024 and excluding the impact of its distribution to JFI, Jackson National Life's total adjusted capital grew by $321 million and for the first half of the year increased by $681 million.

Laura Prieskorn: helping to establish industry-wide data standards and embracing innovation to ensure financial professionals and clients experience a streamlined and modern approach to retirement planning.

Laura Prieskorn: We look forward to continuing this important work to enhance the overall digital experience and simplify integration of our products within the industry. Turning back to slide three during the second quarter of 2024 and excluding the impact of its distribution to JFI, Jackson National Life's total adjusted capital grew by 321 million dollars. and for the first half of the year increased by $681 million. Our more stable capital generation continues to reflect the success of Brookree. Importantly, this stability supports our balanced approach to capital management, which includes our commitment to shareholder return, maintaining and strengthening our balance sheet, and funding growth through new business and other strategic opportunities.

Laura Prieskorn: We look forward to continuing this important work to enhance the overall digital experience and simplify integration of our products within the industry.

Laura Prieskorn: Turning back to slide 3, during the second quarter of 2024 and excluding the impact of its distribution to JFI,

Laura Prieskorn: Jackson National Life's total adjusted capital grew by $321 million and for the first half of the year increased by $681 million.

Laura Prieskorn: Our more stable capital generation continues to reflect the success of Brook Reef. Importantly, this stability supports our balanced approach to capital management, which includes our commitment to shareholder return, maintaining and strengthening our balance sheet, and funding growth through new business and other strategic opportunities. The expanded share repurchase authorization has no time limit and provides flexibility for capital return into the future. We believe this announcement highlights our commitment to future profitability, capital generation, and long-term shareholder value.

Laura Prieskorn: Our more stable capital generation continues to reflect the success of Brook Reef. Importantly, this stability supports our balanced approach to capital management, which includes our commitment to shareholder return, maintaining and strengthening our balance sheet, and funding growth through new business and other strategic opportunities. Capital return in the second quarter was $144 million through a combination of common share repurchases and common share dividends. Yesterday, we also announced our board's approval of a $750 million increase to our common share repurchase authorization and a third quarter common stock dividend of 70 cents per share. The Expanded Share Repurchase Authorization has no time limit and provides flexibility for capital return into the future.

Laura Prieskorn: Our more stable capital generation continues to reflect the success of Brooke Ree.

Laura Prieskorn: Our more stable capital generation continues to reflect the success of Brookree. Importantly, this stability supports our balanced approach to capital management, which includes our commitment to shareholder return, maintaining and strengthening our balance sheet, and funding growth through new business and other strategic opportunities. Capital return in the second quarter was $144 million through a combination of common share repurchases and common share dividends. Yesterday, we also announced our board's approval of a $750 million increase to our common share repurchase authorization and a third quarter common stock dividend of $0.70 per share.

Laura Prieskorn: importantly this stability supports our balanced approach to capital management which includes our commitment to shareholder return maintaining and strengthening our balance sheet and funding growth through new business and other strategic opportunities

Laura Prieskorn: Capital return in the second quarter was $144 million through a combination of common share repurchases and common share dividends. Yesterday, we also announced our board's approval of a $750 million increase to our common share repurchase authorization and a third quarter common stock dividend of $0.70 per share. The expanded share repurchase authorization has no time limit and provides flexibility for capital return into the future. We believe this announcement highlights our commitment to future profitability, capital generation, and long-term shareholder value. You can see our record of consistent capital return on slide four, which totals $1.5 billion since separation, including repurchases of 25% of our common shares at separation.

Laura Prieskorn: Capital return in the second quarter was $144 million through a combination of common share repurchases and common share dividends.

Laura Prieskorn: Yesterday, we also announced our board's approval of a $750 million increase to our common share repurchase authorization and a third quarter common stock dividend of $0.70 per share.

Laura Prieskorn: The expanded share repurchase authorization has no time limit and provides flexibility for capital return into the future. We believe this announcement highlights our commitment to future profitability, capital generation, and long-term shareholder value. You can see our record of consistent capital return on slide four, which totals $1.5 billion since separation, including repurchases of 25% of our common shares at separation. Slide five shows we are on pace to achieve our full-year targets for the fourth year in a row.

Laura Prieskorn: The Expanded Share Repurchase Authorization has no time limit and provides flexibility for capital return into the future.

Laura Prieskorn: We believe this announcement highlights our commitment to future profitability, capital generation, and long-term shareholder value. You can see our record of Consistic Capital Return on Slide 4, which totals $1.5 billion since, including repurchases of 25% of our common shares that separate. Slide 5 shows we are on pace to achieve our full-year targets for the fourth year in a row. For the second quarter of 2024, our estimated RBC ratio is between 550% and 570%, while still above our minimum of 425%.

Laura Prieskorn: We believe this announcement highlights our commitment to future profitability, capital generation, and long-term shareholder value.

Laura Prieskorn: You can see our record of consistent capital return on slide 4, which totals $1.5 billion since separation, including repurchases of 25% of our common shares that separate. Slide five shows we are on pace to achieve our full year targets for the fourth year in a row. The greater stability of capital generation will continue to support our approach to more frequent capital distributions than our prior practice of an annual dividend to our holding company. At this time, I'd like to turn the call over to our CFO, Don Cummings.

Laura Prieskorn: You can see our record of consistent capital return on slide 4, which totals $1.5 billion since separation.

Laura Prieskorn: including repurchases of 25% of our common shares at separation.

Laura Prieskorn: Slide five shows we are on pace to achieve our full-year targets for the fourth year in a row. For the second quarter of 2024, our estimated RBC ratio is between 550% and 570%, while above are minimum of 425%. The greater stability of capital generation will continue to support our approach to more frequent capital distributions than our prior practice of an annual dividend to our holding company. Following this approach, our statutory capital at the end of the second quarter was approximately $4.7 billion after the $250 million distribution from our main operating company, Jackson National Life, in June.

Don Cummings: Slide 5 shows we are on pace to achieve our full year targets for the 4th year in a row.

Don Cummings: For the second quarter of 2024, our estimated RBC ratio is between 550% and 570%, well above our minimum of 425%.

Laura Prieskorn: For the second quarter of 2024, our estimated RBC ratio is between 550% and 570%, while above are minimum of 425%. The greater stability of capital generation will continue to support our approach to more frequent capital distributions than our prior practice of an annual dividend to our holding company. Following this approach, our statutory capital at the end of the second quarter was approximately $4.7 billion after the $250 million distribution from our main operating company, Jackson National Life, in June.

Laura Prieskorn: The greater stability of capital generation will continue to support our approach to more frequent capital distributions than our prior practice of an annual dividend to our holding company. Following this approach, our statutory capital at the end of the second quarter was approximately $4.7 billion after the $250 million distribution from our main operating company, Jackson National Life, in June. At this time, I'd like to turn the call over to our CFO, Don Cummings.

Don Cummings: Following this approach, our statutory capital at the end of the second quarter was approximately $4.7 billion after the $250 million distribution from our main operating company, Jackson National Life, in June .

Don Cummings: At this time, I'd like to turn the call over to our CFO, Don Cummings.

Don Cummings: at this time i'd like to turn the call over to our cfo d comumings

Don Cummings: Thank you, Laura.

Don Cummings: At this time, I'd like to turn the call over to our CFO Don Cummings. Thank you, Laura. I'll begin on slide six with our second quarter result summary. Adjusted operating earnings of $410 million were up 45% or the second quarter of last year and 23% over the first quarter of this year. This significant growth in earnings was primarily due to higher fee income from growth and variable annuity assets under management and higher earnings on spread products.

Don Cummings: Laura, I'll begin on slide six with our second quarter results summary. Adjusted operating earnings of $410 million were up 45% over the second quarter of last year and 23% over the first quarter of this year. This significant growth in earnings was primarily due to higher fee income from growth in variable annuity assets under management and higher earnings on spread profits. Bread earnings also benefited from gains in net investment income, primarily driven by the growth of our RILA block, as well as higher portfolio yields.

Don Cummings: I'll begin on slide six with our second quarter result summary. Adjusted operating earnings of $410 million were up 45% for the second quarter of last year and 23% over the first quarter of this year. This significant growth in earnings was primarily due to higher fee income from growth and variable annuity assets under management and higher earnings on spread products. Spread earnings benefited from gains and net investment income, primarily driven by the growth of our Iowa block as well as higher portfolio yields. The investment portfolio supporting our spread products has continued to perform well. The appendix of our earnings presentation provides breakdowns on both GAAP and statutory bases, excluding the assets reinsured to third parties through funds withheld agreements.

Don Cummings: Thank you, Laura. I'll begin on slide 6 with our second quarter results summary. Adjusted operating earnings of $410 million were up 45% over the second quarter of last year and 23% over the first quarter of this year.

Don Cummings: This significant growth in earnings was primarily due to higher fee income from growth in variable annuity assets under management and higher earnings on spread products. The appendix of our earnings presentation provides breakdowns on both GAAP and statutory bases, excluding the assets reinsured to third parties through funds withheld agreements. Jackson remains conservatively positioned with only 1% exposure to below investment grade securities on a statutory basis.

Don Cummings: This significant growth in earnings was primarily due to higher fee income from growth in variable annuity assets under management and higher earnings on spread products.

Don Cummings: Spread earnings benefited from gains in net investment income, primarily driven by the growth of our RILA block, as well as higher portfolio yields.

Don Cummings: Spread earnings benefited from gains and net investment income primarily driven by the growth of our Iowa block as well as higher portfolio yields. The investment portfolio supporting our spread products has continued to perform well. The appendix of our earnings presentation provides breakdowns on both gap and statutory bases, excluding the assets reinsured to third parties through funds withheld agreements. This information includes insights into our highly rated and diversified commercial office loan portfolio, which is less than 2% of the investment Now. Jackson remains conservatively positioned with only 1% exposure to below investment great securities on a statutory basis, excluding funds with held assets.

Don Cummings: The investment portfolio supporting our spread products has continued to perform well. The appendix of our earnings presentation provides breakdowns on both GAAP and statutory bases, excluding the assets reinsured to third parties through funds withheld agreements. This information includes insights into our highly rated and diversified commercial office, which is less than 2% of the investment portfolio. Jackson remains conservatively positioned, with only 1% exposure to below investment grade securities on a statutory basis.

Don Cummings: the investment portfolio supporting our spread products has continued to perform well

Don Cummings: The appendix of our earnings presentation provides breakdowns on both GAAP and statutory bases, excluding the assets reinsured to third parties through funds withheld agreements.

Don Cummings: This information includes insights into our highly rated and diversified commercial office loan portfolio, which is less than 2% of the investment now. Jackson remains conservatively positioned with only 1% exposure to below investment-grade securities on a statutory basis, excluding funds with held assets.

Don Cummings: this information includes insights into our highly rated and diversified commercial office loan portfolio which is less than two percent of the investment portfolio

Don Cummings: Jackson remains conservatively positioned, with only 1% exposure to below-investment-grade securities on a statutory basis, excluding funds withheld assets.

Don Cummings: Excluding funds withheld app. Before turning to notable items in the quarter, I want to highlight the growth in book value since year end. Our adjusted book value attributable to common shareholders ended the second quarter at $11.5 billion, or $150.35 per diluted share. An increase of over 10% from year-end 2023, driven by our strong operating performance and common share repurchase activity. Slide 7 outlines the notable items included in Adjusted Operating Earnings for the second quarter of 2024. Reported earnings per share were $5.32 for the current quarter.

Don Cummings: Excluding funds withheld after, our adjusted book value attributable to common shareholders ended the second quarter at $11.5 billion, or $150.35 per diluted share. Slide seven outlines the notable items included in adjusted operating earnings for the second quarter of 2024. Reported earnings per share were $5.32 for the current quarter. Earnings per share were $4.87 for the current quarter compared to $3.54 in the prior year's second quarter.

Don Cummings: Before turning to notable items in the quarter, I want to highlight the growth in book value since year-end. Our adjusted book value attributable to common shareholders ended the second quarter at $11.5 billion, or $150.35 per diluted share. An increase of over 10% from year end 2023, driven by our strong operating performance in common share we purchase activity.

Don Cummings: Before turning to notable items in the quarter, I want to highlight the growth in book value since year-end.

Don Cummings: Before turning to notable items in the quarter, I want to highlight the growth in book value since year end. Our adjusted book value attributable to common shareholders ended the second quarter at $11.5 billion or $150.35 per diluted share. An increase of over 10% from year end 2023, driven by our strong operating performance in common share we purchase activity. Slide 7 outlines the notable items included in adjusted operating earnings for the second quarter of 2024.

Don Cummings: our adjusted book value attributable to common shareholders ended the second quarter at eleven point five billion dollars were hundred fifty dollars and thirty-five cents per diluted share

Don Cummings: An increase of over 10% from year-end 2023, driven by our strong operating performance and common share repurchase activity.

Don Cummings: Slide 7 outlines the notable items included in adjusted operating earnings for the second quarter of 2024. Reported earnings per share were $5.32 for the current quarter. Adjusting for 37 cents of notable items in the difference in tax rates from our 15% guidance, earnings per share were $4.87 for the current quarter compared to $3.54 in the prior year's second quarter. This strong earnings improvement was primarily due to the growth in assets under management and spread income benefits noted earlier, as well as the reduction in diluted share count from common share purchase activity. Notable items for the quarter also included a 31 cent benefit from a payout annuity reserve release due to deaths.

Don Cummings: slide seven outlines the notable items included in adjusted operating earnings for the second quarter of two thousand and twenty-four

Don Cummings: Reported earnings per share were $5.32 for the current quarter.

Don Cummings: Reported earnings per share were $5.32 for the current quarter. Adjusting for 37 cents of notable items in the difference in tax rates from our 15% guidance, earnings per share were $4.87 for the current quarter compared to $3.54 in the prior year's second quarter. This strong earnings improvement was primarily due to the growth in assets under management and spread income benefits noted earlier as well as the reduction in diluted share count from common share we purchase activity. Notable items for the quarter also included a 31 cent benefit from a payout annuity reserve release due to deaths.

Don Cummings: Adjusting for 37 cents of notable items and the difference in tax rates from our 15% guidance, earnings per share were $4.87 for the current quarter compared to $3.54 in the prior year's second quarter. The strong earnings improvement was primarily due to the growth and assets under management and spread income benefits noted earlier, as well as the reduction in diluted share account from common share we purchase activity. Notable items for the quarter also included a $0.31 benefit from a payout annuity reserve release due to debt. This was a one-off item in the current quarter that we do not expect to repeat.

Don Cummings: This strong earnings improvement was primarily due to the growth in assets under management and spread income benefits noted earlier, as well as the reduction in diluted share count from common share repurchase activity. Additionally, notable items for the quarter also included a $0.31 benefit from a payout annuity reserve release due to debt. Turning to slide eight, we've included a waterfall comparison of our second quarter 2024 non-GAAP pre-tax adjusted operating earnings of $473 million to GAAP pre-tax income attributable to Jackson Financial of $311 million. We continue to see greater alignment between Adjusted Operating Earnings and Gap Income following the establishment of Brooke Re at the beginning of this year.

Don Cummings: Notable items for the quarter also included a $0.31 benefit from a payout annuity reserve release due to debts.

Don Cummings: This was a one-off item in the current quarter that we do not expect to repeat.

Don Cummings: Turning to slide 8, we've included a waterfall comparison of our second quarter 2024 non-GAAP pre-tax income attributable to Jackson Financial of $311 million. We continue to see greater alignment between adjusted operating earnings and GAAP income following the establishment of Brookree at the beginning of this year. Although our net hedge result was a loss of $201 million in the second quarter of 2024, for the first half of the year we reported a net hedge gain of $226 million. The hedging results include a robust guaranteed benefit fee strain that is derived from the benefit base rather than the account value, which provides stability to the guaranteed fees even in periods when markets decline.

Don Cummings: This was a one-off item in the current quarter that we do not expect to repeat. Turning to slide 8 we've included a waterfall comparison of our second quarter 2024 non-gap pre-tax income attributable to Jackson financial of $311 million. We continue to see greater alignment between adjusted operating earnings and gap income following the establishment of Brookree at the beginning of this year. Although our net hedge result was a loss of $201 million in the second quarter of 2024, for the first half of the year we reported a net hedge gain of $226 million.

Don Cummings: Turning to slide eight, we've included a waterfall comparison of our second quarter 2024 non-GAAP pre-tax adjusted operating earnings of $473 million to GAAP pre-tax income attributable to Jackson Financial of $311 million. We continue to see greater alignment between Adjusted Operating Earnings and Gap Income following the establishment of Brooke Re at the beginning of this year. Although our net hedge result was a loss of $201 million in the second quarter of 2024, for the first half of the year, we reported a net hedge gain of $226 million.

Don Cummings: Turning to slide 8, we've included a waterfall comparison of our second quarter 2024 non-GAAP pre-tax adjusted operating earnings of $473 million to GAAP pre-tax income attributable to Jackson Financial of $311 million.

Don Cummings: we continue to see greater alignment between adjusted operating earnings and gaap income following the establishment of brookery at the beginning of this year

Don Cummings: Although our net hedge result was a loss of $201 million in the second quarter of 2024, for the first half of the year, we reported a net hedge gain of $226 million. During the second quarter of 2024, the net hedge result included a loss on freestanding derivatives of about $1 billion, primarily due to losses on interest rate hedges in a quarter when interest rates were up across the yield curve, as well as losses on equity hedges in a rising equity market environment.

Don Cummings: Although our net hedge result was a loss of $201 million in the second quarter of 2024, for the first half of the year we reported a net hedge gain of $226 million.

Don Cummings: The hedging results include a robust guaranteed benefit fee stream that is derived from the benefit base rather than the account value, which provides stability to the guaranteed fees even in periods when markets decline. During the second quarter of 2024, the net hedge result included a loss on freestanding derivatives of about $1 billion, primarily due to losses on interest rate hedges in a quarter when interest rates were up across the yield curve, as well as losses on equity hedges in a rising equity market environment.

Don Cummings: The hedging results include a robust, guaranteed benefit fee stream that is derived from the benefit base rather than the account value, which provides stability to the guarantee fees even in periods when markets decline.

Don Cummings: The hedging results include a robust guaranteed benefit fee strain that is derived from the benefit base rather than the account value which provides stability to the guaranteed fees even in periods when markets decline. During the second quarter of 2024 the net hedge result included a loss on freestanding derivatives of about $1 billion. Primarily due to losses on interest rate hedges in a quarter where interest rates were up across the yield curve as well as losses on equity hedges in a rising equity market environment.

Don Cummings: During the second quarter of 2024, the net hedge result included a loss on freestanding derivatives of about $1 billion. Primarily due to losses on interest rate hedges in a quarter where interest rates were up across the yield curve, as well as losses on equity hedges in a rising equity market environment. Changes in net market risk benefits or net MRB benefited from the same equity market and interest rate movements, providing a $516 million offset to the freestanding derivatives loss. It is important to note that, in addition to market and interest rate impacts, there will be an MRB increase in each period as time passes due to the collection of fees.

Don Cummings: During the second quarter of 2024, the net hedge result included a loss on freestanding derivatives of about $1 billion.

Don Cummings: primarily due to losses on interest rate hedges in a quarter where interest rates were up across the yield curve as well as losses on equity hedges in a rising equity market environment

Don Cummings: Changes in Net Market Risk Benefits, or Net MRB, benefited from the same equity market and interest rate movements, providing a $516 million offset to the freestanding derivatives loss. It is important to note that in addition to market and interest rate impacts, there will be an MRB increase in each period as time passes due to the collection of fees.

Don Cummings: Changes in net market risk benefits or net MRB benefited from the same equity market and interest rate movements providing a $516 million offset to the freestanding derivatives loss. It is important to note that in addition to market and interest rate impacts there will be an MRB increase in each period as time passes due to the collection of fees. The reserve and embedded derivative loss of $278 million during the second quarter primarily reflects losses on Riley reserves resulting from higher Records.

Don Cummings: it is important to note that in addition to market and interest rate impacts

Don Cummings: There will be an MRB increase in each period as time passes due to the collection of fees.

Don Cummings: The reserve and embedded derivative loss of $278 million during the second quarter primarily reflects losses on Riley reserves resulting from higher records. The Ryla business provides a natural equity risk offset to our guaranteed variable annuity business, which results in hedging efficiencies that increase as the Ryla block grows. The change in the net MRB, fees collected during the period, as well as the reserve and embedded derivative movements, should be viewed collectively when comparing to freestanding derivative losses that come through in our hedge results. The deferred acquisition costs or DACA immunization reported in the net hedge result is associated with the non-operating portion of DACA as of the transition date to LDTI.

Don Cummings: The reserve and embedded derivative loss of $278 million during the second quarter primarily reflects losses on RILA reserves resulting from higher equity markets. The RILA business provides a natural equity risk offset to our guaranteed variable annuity business, which results in hedging efficiencies that increase as the RILA block grows. The change in the net MRB, fees collected during the period, as well as the reserve and embedded derivative movements, should be viewed collectively when comparing to freestanding derivative losses that come through in our headroom.

Don Cummings: The reserve and embedded derivative loss of $278 million during the second quarter primarily reflects losses on RILA reserves resulting from higher equity markets. The RILA business provides a natural equity risk offset to our guaranteed variable annuity business, which results in hedging efficiencies that increase as the RILA block grows. The change in the net MRB, fees collected during the period, as well as the reserve and embedded derivative movements. This non-operating DAC will continue to run off over time, and the amount of quarterly amortization will decline from the current level over time.

Don Cummings: the reserve and embedded derivative loss of two hundred and seventy eight million dollars during the second quarter primarily reflects losses on riiler reserves resulting from higher equity markets

Don Cummings: The RILA business provides a natural equity risk offset to our guaranteed variable annuity business, which results in hedging efficiencies that increase as the RILA block grows.

Don Cummings: The Ryla business provides a natural equity risk offset to our guaranteed variable annuity business, which results in hedging efficiencies that increase as the Ryla block grows. The change in the net MRB, fees collected during the period, as well as the reserve and embedded derivative movements, should be viewed collectively when comparing to freestanding derivative losses that come through in our hedge results. The deferred acquisition costs or DACA immunization reported in the net hedge result is associated with the non-operating portion of DACA as of the transition date to LDTI.

Don Cummings: The change in the net MRB, fees collected during the period, as well as the reserve and embedded derivative movements, should be viewed collectively when comparing to freestanding derivative losses that come through in our hedge results.

Don Cummings: The Deferred Acquisition Costs, or DAC, amortization reported in the Net Hedge Result is associated with the non-operating portion of DAC as of the transition date to LDTI. This non-operating DAC will continue to run off over time, and the amount of quarterly amortization will decline from the current level over time. To summarize the results of our hedging program, we've included a subtotal in the table on slide 8 that excludes DAC amortization as this expense is not an element of our hedging program or driven by current period activity. The net impact of guarantee fees, freestanding derivatives losses, market risk benefits gain, and reserve and embedded derivative movements was a $65 million loss in the second quarter of 2024.

Don Cummings: The Deferred Acquisition Costs, or DAC, amortization reported in the Net Hedge Result is associated with the non-operating portion of DAC as of the transition date to LDTI.

Don Cummings: This non-operating DAC will continue to run off over time, and the amount of quarterly amortization will decline from the current level over time. To summarize the results of our hedging program, we've included a subtotal in the table on site 8 that excludes DACA immunization, as this expense is not an element of our hedging program or driven by current period activity. The net impact of guarantee fees, freestanding derivatives loss, market risk benefits gain, and reserve and embedded derivative movements was a $65 million loss in the second quarter of 2024.

Don Cummings: this nonoperating dck will continue to run off over time and the amount of quarterly amortization will decline from the current level over time

Don Cummings: This non-operating DAC will continue to run off over time, and the amount of quarterly amortization will decline from the current level over time. To summarize the results of our hedging program, we've included a subtotal in the table on site 8 that excludes DACA immunization as this expense is not an element of our hedging program or driven by current period activity. The net impact of guarantee fees, freestanding derivatives loss, market risk benefits gain, and reserve and embedded derivative movements, was a $65 million loss in the second quarter of 2024.

Don Cummings: To summarize the results of our hedging program, we've included a subtotal in the table on slide 8 that excludes DAC amortization as this expense is not an element of our hedging program or driven by current period activity. The net impact of guarantee fees, freestanding derivatives losses, market risk benefits gain, and reserve and embedded derivative movements was a $65 million loss in the second quarter of 2024. We believe this result demonstrates that our hedging program continues to be effective in reducing the volatility of our results and is working as expected with the establishment of Brooke Reef.

Don Cummings: The net impact of guarantee fees, freestanding derivatives loss, market risk benefits gain, and reserve and embedded derivative movements was a $65 million loss in the second quarter of 2024.

Don Cummings: we believe this result demonstrates that our hedging program continues to be effective in reducing the volatility of our results and is working as expected with the establishment of brook rate

Don Cummings: We believe this result demonstrates that our hedging program continues to be effective in reducing the volatility of our results and is working as expected with the establishment of Brook Ray. Non-operating results also included $71 million in gains from business reinsured to third parties. This resulted from a loss on a funds-withheld reinsurance treaty due to the change in the associated embedded derivative value netted against the related net investment income. These non-operating items which can be volatile from period to period are offset by changes in accumulated other comprehensive income or AOCI in the funds-withheld account related to reinsurance, resulting in a minimal net impact on adjusted book value. Furthermore, these items do not impact our statutory capital or free cash flow.

Don Cummings: Non-operating results also included $71 million in gains from business re-insured to third parties. This resulted from a loss on a funds withheld reinsurance treaty due to the change in the associated embedded derivative value netted against the related net investment income. These non-operating items, which can be volatile from period to period, are offset by changes in Accumulated Other Comprehensive Income, or AOCI, in the funds withheld account related to reinsurance, resulting in a minimal net impact on adjusted book value.

Don Cummings: Non-operating results also included $71 million in gains from business reinsured to third parties. This resulted from a loss on a funds-withheld reinsurance treaty due to the change in the associated embedded derivative value netted against the related net investment income. These non-operating items, which can be volatile from period to period, are offset by changes in accumulated other comprehensive income or AOCI in the funds-withheld account related to reinsurance, resulting in a minimal net impact on adjusted book value.

Don Cummings: Non-operating results also included $71 million in gains from business reinsured to third parties.

Don Cummings: this resulted from a loss on a funds withheld reinsurance treaty due to the change in the associated embedded derivative value netted against the related net investment income

Don Cummings: These non-operating items, which can be volatile from period to period, are offset by changes in Accumulated Other Comprehensive Income, or AOCI, in the funds withheld account related to reinsurance, resulting in a minimal net impact on adjusted book value. Furthermore, these items do not impact our statutory capital or free cash flow. Our segment results begin on slide 9 and focus on the healthy new business profile of our retail annuities segment in the current quarter, illustrated by growth of 36% from the second quarter of last year and 15% from the first quarter of this year.

Don Cummings: Furthermore, these items do not impact our statutory capital or free cash flow.

Don Cummings: Resulting in a minimal net impact on adjusted book value. Furthermore, these items do not impact our statutory capital or free cash flow.

Don Cummings: Our segment results begin on slide 9 and focus on the healthy new business profile of our retail annuity segment in the current quarter, illustrated by growth of 36 percent from the second quarter of last year and 15 percent from the first quarter of this year. Our Ryla product continues to gain momentum, with second quarter sales reaching a record level of $1.4 billion, supporting further diversification in our top-line growth. Going forward, we expect continued growth in our Ryla business to be supported by a recent launch of a living benefit, as well as the recent availability of one of Jackson's base Ryla products in New York.

Don Cummings: Our segment results begin on slide 9 and focus on the healthy new business profile of our retail annuities segment in the current quarter, illustrated by growth of 36% from the second quarter of last year and 15% from the first quarter of this year. Going forward, we expect continued growth in our RILA business to be supported by our recent launch of a living benefit, as well as the recent availability of one of Jackson's base RILA products in New York.

Don Cummings: Our segment results begin on slide 9 and focus on the healthy new business profile of our retail annuity segment in the current quarter, illustrated by growth of 36 percent from the second quarter of last year and 15 percent from the first quarter of this year. Our Ryla product continues to gain momentum with second quarter sales reaching a record level of $1.4 billion, supporting further diversification in our top-line growth. Going forward, we expect continued growth in our Ryla business to be supported by a recent launch of a living benefit, as well as the recent availability of one of Jackson's base Ryla products in New York.

Don Cummings: Our Ryla product continues to gain momentum, with second quarter sales reaching a record level of $1.4 billion, supporting further diversification in our top line growth. Going forward, we expect continued growth in our RILA business to be supported by our recent launch of a living benefit, as well as the recent availability of one of Jackson's base RILA products in New York. Sales of variable annuities grew from the second quarter of last year in the first quarter of this year, driven by products without a lifetime income benefit, including elite access, our investment only variable annuity.

Don Cummings: Our Ryla product continues to gain momentum with second quarter sales reaching a record level of 1.4 billion dollars, supporting further diversification in our top line growth.

Don Cummings: Going forward, we expect continued growth in our RYLA business to be supported by our recent launch of a living benefit, as well as the recent availability of one of Jackson's base RYLA products in New York.

Don Cummings: Sales of variable annuities grew from the second quarter of last year in the first quarter of this year driven by products without a lifetime income benefit, an increase of 9% from the second quarter of last year. Our Closed Life and Annuity Blocks segment reported higher pre-tax adjusted operating earnings compared to both the second quarter of last year and the first quarter of this year due primarily to improved mortality trends. Slide 11 summarizes our strong 2024 capital and liquidity position.

Don Cummings: Sales of variable annuities grew from the second quarter of last year and the first quarter of this year, driven by products without lifetime income benefits, including elite access, our investment only variable annuity. The growth sales we are generating in Ryla and other spread products translated to $1.4 billion of non-verible annuity net flows in the second quarter of 2024, which has grown materially over time. These net flows provide valuable economic diversification and hedging efficiency benefits.

Don Cummings: sales of variable annuities grew from the second quarter of last year in the first quarter of this year driven by products without lifetime income benefits

Don Cummings: Sales of variable annuities grew from the second quarter of last year and the first quarter of this year driven by products without lifetime income benefits, including elite access, our investment only variable annuity. The growth sales we are generating in Ryla and other spread products translated to $1.4 billion of non-verible annuity net flows in the second quarter of 2024, which has grown materially over time. These net flows provide valuable economic diversification and hedging efficiency benefits.

Don Cummings: Including elite access or investment only variable annuity.

Don Cummings: The gross sales we are generating in RILA and other spread products translated to $1.4 billion of non-variable annuity net flows in the second quarter of 2024, which has grown materially over time. These net flows provide valuable economic diversification and hedging efficiency benefits.

Don Cummings: these net flows provide valuable economic diversification and hedging efficiency benefits

Don Cummings: Fitz. Importantly, our overall sales mix remains efficient from the standpoint of new business strain. Looking at 2nd quarter 2024, pre-tax adjusted operating earnings for our segments on slide 10, higher equity markets and a continued positive environment for spread products has driven solid growth in our retail annuity segment compared to both the 2nd quarter of last year and the first quarter of this year. Jackson's earnings power is supported by the growing level of assets under management, as healthy separate account returns combined with growing non-verifiable annuity net flows have built our AUM up to $247 billion. An increase of 9% from the 2nd quarter of last year.

Don Cummings: Importantly, our overall sales mix remains efficient from the standpoint of new business strength. Looking at second quarter 2024 pre-tax adjusted operating earnings for our segments on slide 10, higher equity markets and a continued positive environment for spread products have driven solid growth in our retail annuity segment compared to both the second quarter of last year and the first quarter of this year. Jackson's earnings power is supported by the growing level of assets under management, as healthy separate account returns combined with growing non-variable annuity net flows have built our AUM up to $247 billion.

Don Cummings: Fitz. Importantly, our overall sales mix remains efficient from the standpoint of new business strain. Looking at 2nd quarter 2024, pre-tax adjusted operating earnings for our segments on slide 10, higher equity markets and a continued positive environment for spread products has driven solid growth in our retail annuity segment compared to both the 2nd quarter of last year and the first quarter of this year. Jackson's earnings power is supported by the growing level of assets under management as healthy separate account returns combined with growing non-verifiable annuity net flows have built our AUM up to $247 billion.

Don Cummings: importantly our overall sales mix remains efficient from the standpoint of new business strength

Don Cummings: Looking at second quarter 2024 pre-tax adjusted operating earnings for our segments on slide 10, higher equity markets and a continued positive environment for spread products has driven solid growth in our retail annuity segment compared to both the second quarter of last year,

Don Cummings: and the first quarter of this year.

Don Cummings: Jackson's earnings power is supported by the growing level of assets under management as healthy separate account returns combined with growing non-variable annuity net flows have built our AUM up to $247 billion.

Don Cummings: An increase of 9% from the second quarter of last year. Importantly, the positive separate account performance has offset our overall net outflow, including the impact of slightly elevated surrenders of variable annuities coming out of their surrender charge period by nearly $13 billion in the first half of 2024. For our institutional segment, pre-tax adjusted operating earnings were up from the second quarter of last year due to higher spread income. We have seen increased new business activity in 2024, with over $600 million in second quarter sales and what we believe to be a strong start to the third quarter to date. Our Closed Life and Annuity Blocks segment reported higher pre-tax adjusted operating earnings compared to both the second quarter of last year and the first quarter of this year due primarily to improved mortality trends.

Don Cummings: An increase of 9% from the second quarter of last year.

Don Cummings: An increase of 9% from the 2nd quarter of last year. Importantly, the positive separate account performance as offset our overall net outflows including the impact of slightly elevated surrenders of variable annuities coming out of their surrender charge period by nearly $13 billion in the first half of 2024. For our institutional segment, pre-tax adjusted operating earnings were up from the 2nd quarter of last year due to higher spread income. We have seen increased new business activity in 2024 with over $600 million in 2nd quarter sales in what we believe to be a strong start to the 3rd quarter today. Our closed life and annuity blocks segment reported higher pre-tax adjusted operating earnings compared to both the 2nd quarter of last year and the first quarter of this year due primarily to improved mortality trends.

Don Cummings: Importantly, the positive separate account performance has offset our overall net outflows, including the impact of slightly elevated surrenders of variable annuities coming out of their surrender charge period, by nearly $13 billion in the first half of 2024. For our institutional segment, pre-tax adjusted operating earnings were up from the 2nd quarter of last year due to higher spread income. We have seen increased new business activity in 2024, with over $600 million in 2nd quarter sales in what we believe to be a strong start to the 3rd quarter today. Our closed life and annuity blocks segment reported higher pre-tax adjusted operating earnings compared to both the 2nd quarter of last year and the first quarter of this year due primarily to improved mortality trends.

Don Cummings: Importantly, the positive separate account performance has offset our overall net outflows.

Don Cummings: including the impact of slightly elevated surreners of variable annuities coming out of their surrender charge period by nearly thirteen billion dollars in the first half of two thousand and twenty four

Don Cummings: For our institutional segment, pre-tax adjusted operating earnings were up from the second quarter of last year due to higher spread income.

Speaker Change: we have seen increased new business activity in two thousand and twenty four with over six hundred million dollars in second quarter sales and what we believe to be a strong start to the third quarter to date

Don Cummings: Our Closed Life and Annuity Blocks segment reported higher pre-tax adjusted operating earnings compared to both the second quarter of last year and the first quarter of this year, due primarily to improved mortality trends.

Don Cummings: Slide 11 summarizes our strong 2024 capital and liquidity position. The profitability of our enforced business, including the variable annuity base contract, provided substantial capital generation of $321 million during the 2nd quarter. Consistent with our prior guidance for smaller periodic distributions from Jackson National Life, $250 million was distributed to JFI during the 2nd quarter of 2024. After accounting for this impact and the related reduction in deferred tax asset and missibility, Jackson's total adjusted capital or tax increased slightly and ended the quarter at $4.7 billion. Our company action level required capital or COW is also much more stable following the formation of Brookree.

Don Cummings: Slide 11 summarizes our strong 2024 capital and liquidity position. The profitability of our in-force business, including the variable annuity-based contract, provided substantial capital generation of $321 million during the second quarter, consistent with our prior guidance for smaller periodic distributions from Jackson National Life. $250 million was distributed to JFI during the second quarter of 2024.

Don Cummings: Slide 11 summarizes our strong 2024 capital and liquidity position.

Don Cummings: Slide 11 summarizes our strong 2024 capital and liquidity position. The profitability of our enforced business including the variable annuity base contract provided substantial capital generation of $321 million during the 2nd quarter. Consistent with our prior guidance for smaller periodic distributions from Jackson National Life, $250 million was distributed to JFI during the 2nd quarter of 2024. After accounting for this impact and the related reduction in deferred tax asset and missibility, Jackson's total adjusted capital or tax increased slightly and ended the quarter at $4.7 billion.

Don Cummings: The profitability of our in-force business, including the variable annuity-based contract, provided substantial capital generation of $321 million during the second quarter.

Don Cummings: Consistent with our prior guidance for smaller periodic distributions from Jackson National Life, $250 million was distributed to JFI during the second quarter of 2024.

Don Cummings: $250 million was distributed to JFI during the second quarter of 2024. The extraordinary dividend from Jackson National Life this quarter is consistent with the goal of reducing the RBC volatility that occurred from our past practice of sizable annual dividends. I'll now turn the call back to Laura.

Don Cummings: After accounting for this impact and the related reduction in Deferred Tax Asset Immiscibility, Jackson's Total Adjusted Capital, or TAC, increased slightly and ended the quarter at $4.7 billion. Our Company Action Level required capital, or CAL, is also much more stable following the formation of Brooke Ridge. This stability was apparent in our second quarter, 2024 results, with estimated cows slightly higher, reflecting growth in Rila assets and normal investment portfolio activities. However, our estimated RBC ratio range of 550 to 570% remains well above our 425% minimum.

Don Cummings: After accounting for this impact and the related reduction in deferred tax asset admissibility, Jackson's total adjusted capital, or TAC, increased slightly and ended the quarter at $4.7 billion.

Laura Prieskorn: Our Company Action Level Required Capital, or CAL, is also much more stable following the formation of Brook Re.

Don Cummings: Our company action level required capital or cow is also much more stable following the formation of Brookree. This stability was apparent in our 2nd quarter 2024 results with estimated cows slightly higher reflecting growth in lila assets and normal investment portfolio activity. Our estimated RBC ratio range of 550 to 570% remains well above our 425% minimum. We are pleased with Brookree's 2nd quarter performance, which is operating as expected and remains well capitalized.

Don Cummings: This stability was apparent in our 2nd quarter 2024 results, with estimated cows slightly higher, reflecting growth in lila assets and normal investment portfolio activity. Our estimated RBC ratio range of 550 to 570% remains well above our 425% minimum. We are pleased with Brookree's 2nd quarter performance, which is operating as expected and remains well capitalized. Our holding company cash and highly liquid asset position at the end of the quarter was over $500 million, which continues to be above our minimum buffer.

Laura Prieskorn: This stability was apparent in our second quarter 2024 results, with estimated COW slightly higher, reflecting growth in RILA assets and normal investment portfolio activity.

Laura Prieskorn: Our estimated RBC ratio range of 550 to 570% remains well above our 425% minimum. We are pleased with Brooke-Ree's second quarter performance, which is operating as expected and remains well capitalized.

Don Cummings: We are pleased with Brooke Ree's second quarter performance, which is operating as expected and remains well captured. Our holding company cash and highly liquid asset position at the end of the quarter was over $500 million, which continues to be above our minimum. The extraordinary dividend from Jackson National Life this quarter is consistent with the goal of reducing the RBC volatility that occurred from our past practice of sizable annual dividends. We believe our robust capital position across operating companies provides a strong financial base for future operating company dividends.

Speaker Change: Our holding company cash and highly liquid asset position at the end of the quarter was over $500 million, which continues to be above our minimum buffer.

Don Cummings: Our holding company cash and highly liquid asset position at the end of the quarter was over $500 million, which continues to be above our minimum buffer. The extraordinary dividend from Jackson National Life, this quarter, is consistent with the goal of reducing the RBC volatility that occurred from our past practice and sizable annual dividend. Ltd. We believe our robust capital position across operating companies provides a strong financial base for future operating company dividends.

Don Cummings: The extraordinary dividend from Jackson National Life this quarter is consistent with the goal of reducing the RBC volatility that occurred from our past practice and sizable annual dividend. Ltd. We believe our robust capital position across operating companies provides a strong financial base for future operating company dividends.

Laura Prieskorn: We believe our robust capital position across operating companies provides a strong financial base for future operating company dividends.

Don Cummings: As Laura mentioned earlier, we received board approval for a $750 million addition to our existing common share repurchase authorization. As a reminder, there is no time limit on this authorization, which positions us well to reach our 2024 financial target and Future Share Repurchase Activities. Overall, I am incredibly pleased with our second quarter results, which demonstrate positive momentum in sales, earnings, capital generation, and holding company liquidity. I'll now turn the call back to Laura. Thank you.

Speaker Change: As Laura mentioned earlier, we received board approval for a $750 million addition to our existing common share repurchase authorization.

Don Cummings: As Laura mentioned earlier, we received board approval for a $750 million edition to our existing common share repurchase authorization. As a reminder, there is no time limit on this authorization, which positions as well to reach our 2024 financial targets and future share repurchase activity.

Laura Prieskorn: As a reminder, there is no time limit on this authorization, which positions us well to reach our 2024 financial targets and future share repurchase activity.

Don Cummings: Overall, I am incredibly pleased with our second quarter results, which demonstrate positive momentum in sales, earnings, capital generation, and holding company liquidity.

Laura Prieskorn: Overall, I am incredibly pleased with our second quarter results, which demonstrate positive momentum in sales, earnings, capital generation, and holding company liquidity.

Don Cummings: Overall, I am incredibly pleased with our second quarter results, which demonstrate positive momentum in sales, earnings, capital generation, and holding company liquidity.

Laura Prieskorn: I'll now turn the call back to Laura.

Laura Prieskorn: Thank you, Don. Our second quarter results demonstrate we continue to benefit from our stable capital position and market leadership.

Don Cummings: I'll now turn the call back to Laura.

Laura Prieskorn: Our second quarter results demonstrate we continue to benefit from our stable capital position and market leadership. We look forward to the second half of 2024 and providing further updates on our growth, product initiatives, and continued capital generation. As always, I'd like to acknowledge our talented Jackson team. Their dedication to our purpose in providing long-term solutions to Americans planning for their financial futures is our greatest strength. The opportunity to work alongside our associates is always rewarding as we continue to deliver against our strategic and operational goals while supporting our communities and each other. At this time, I'd like to turn it over to the operator for questions.

Laura Prieskorn: I'll now turn the call back to Laura. Thank you, Don. Our second quarter results demonstrate we continue to benefit from our stable capital position and market leadership.

Laura Prieskorn: Thank you, Don. Our second quarter results demonstrate we continue to benefit from our stable capital position and market leadership.

Laura Prieskorn: We look forward to the second half of 2024 and providing further updates on our growth, product initiatives, and continued capital generation.

Laura Prieskorn: We look forward to the second half of 2024 and providing further updates on our growth, product initiatives, and continued capital generation. As always, I'd like to acknowledge our talent to Jackson team, their dedication to our purpose in providing long-term solutions to Americans planing for their financial futures as our greatest strengths. The opportunity to work alongside our associates is ever-rewarding as we continue to deliver against our strategic and operational goals while supporting our communities and each other.

Laura Prieskorn: As always, I'd like to acknowledge our talent to Jackson team, their dedication to our purpose in providing long-term solutions to Americans planning for their financial futures as our greatest strengths. The opportunity to work alongside our associates is ever-rewarding as we continue to deliver against our strategic and operational goals while supporting our communities and each other.

Speaker Change: as always i'd like to acknowledge our talented jacksonand team their dedication to our purpose in providing long-term solutions to americans planning for their financial futures as our greatest strength

Laura Prieskorn: The opportunity to work alongside our associates is ever rewarding as we continue to deliver against our strategic and operational goals while supporting our communities and each other.

Unknown Executive: At this time, I'd like to turn it over to the operator for questions. Thank you. Of course, if you'd like to ask a question, please press star followed by one on your telephone keypads. If you'd like to assure your question, please press star followed by two. I'm preparing to ask a question. Please ensure you aren't muted locally. As a reminder, that star followed by one on your telephone keypads now.

Laura Prieskorn: At this time, I'd like to turn it over to the operator for questions.

Operator: Thank you. Of course, if you'd like to ask a question, please press star followed by one on your telephone keypad. If you'd like to confirm your question, please press star followed by two. When preparing to ask a question, please ensure you are muted locally. As a reminder, that the star followed by one on your telephone keypad now. If you'd like to ask a question, please press the star followed by one on your telephone keypad now. Our first question comes from Suneet Kamath of Jeffreys. Suneet, your line is open, please go ahead.

Speaker Change: Thank you. Of course, if you'd like to ask a question, please press star followed by one on your telephone keypads. If you'd like to withdraw your question, please press star followed by two. When preparing to ask a question, please ensure you are unmuted locally. As a reminder, that's star followed by one on your telephone keypads now.

Suneet Kamath: Our first question comes from Sunit Kamath of Jeffries. Sunit Shulana's open. Please go ahead.

Speaker Change: Our first question comes from Suneet Kamath of Jeffreys. Suneet, your line is open, please go ahead.

Suneet Kamath: Our first question comes from Sunit Kamath of Jeffries. Sunit Shulana's open. Please go ahead. I just wanted to start with the capital generation. If we look kind of year-to-date, I think you're a little over 600 million, which is pretty well in excess of your billion plus that you've talked about before. I was hoping you could unpack that. How much of that was maybe the better market versus better investment spreads? Because even if I think about the market impact, the growth seems just a lot higher than that. I just wanted to understand what's going in there. Please, thanks. Thanks for meeting it's done. I'll type that question.

Don Cummings: I just wanted to start with the capital generation. If we look kind of year-to-date, I think you're a little over 600 million, which is pretty well in excess of your billion plus that you've talked about before. I was hoping you could unpack that. How much of that was maybe the better market versus better investment spreads? Because even if I think about the market impact, the growth seems just a lot higher than that. I just wanted to understand what's going on in there. Please, thanks.

Suneet Kamath: I just wanted to start with capital generation. If we look kind of year to date, I think you're a little over 600 million, which is, you know, pretty well in excess of, I guess, your billion plus that you've talked about before. I just was hoping you could unpack that. How much of that was maybe the better markets versus, you know, better investment spreads? Because even if I think about the market impact, the growth seems just a lot higher than that.

Speaker Change: I just wanted to start with the capital generation. If we look kind of year-to-date, I think you're a little over $600 million, which is pretty well in excess of, I guess, your billion-plus that you've talked about before.

Don Cummings: So I just wanted to understand what's going on there. Please. Thanks.

Speaker Change: i just hoping you could unpack that how much of that was maybe the better market versus you know better investment spreads because even if i think about the market impact if the grow seems just a lot higher than that so i just wanted to understand what's going in theretheir pol s

Don Cummings: Thanks for meeting; it's done. I'll type that question. First of all, just a reminder on our billion-dollar capital generation guidance. That was based on performance under normal market conditions. As we look at the performance in the first half, we've obviously had a strong tailwind from the equity market performance to reach that $680 million. We are a bit ahead, but we continue to feel very comfortable with that billion dollar guidance and growth and statutory capital. I would say that the business that we're writing today is certainly capital-efficient. As we see, attractive opportunities going forward to diversify our mix of business that could change the magnitude of required capital related to organic growth.

Suneet Kamath: Hey, Suneet, it's Don. I'll take that question. So first of all, just a reminder about our billion dollar capital generation guidance, that was based on performance under normal market conditions. So as we look at the performance in the first half, we've obviously had a strong tailwind from the equity market performance to reach that $680 million. So we are a bit ahead, but we continue to feel, you know, very comfortable with that billion-dollar guidance and growth in statutory capital.

Laura Prieskorn: Hey Suneet, it's Don. I'll take that question. So, first of all, just a reminder on our billion-dollar capital generation guidance.

Don Cummings: First of all, just a reminder on our billion dollar capital generation guidance. That was based on performance under normal market conditions. As we look at the performance in the first half, we've obviously had a strong tailwind from the equity market performance to reach that $680 million. We are a bit ahead, but we continue to feel very comfortable with that billion dollar guidance and growth and statutory capital. I would say that the business that we're writing today is certainly capital-efficient.

Speaker Change: That was based on performance under normal market conditions.

Laura Prieskorn: So as we look at the performance in the first half, we've obviously had a strong tailwind from the equity market performance to reach that $680 million.

Laura Prieskorn: So, we are a bit ahead, but we continue to feel, you know, very comfortable with that billion dollar guidance and growth in statutory capital.

Suneet Kamath: I would say that, you know, the business that we're writing about today is fairly capital efficient. And, you know, as we see attractive opportunities going forward to diversify our mix of businesses, that could change the magnitude of required capital related to organic growth. But overall, just to answer your question, I think the main delta from the billion dollars is really that that was a more normal market environment as opposed to the strong growth that we've seen in the first half of the year.

Speaker Change: I would say that, you know, the business that we're writing today is fairly capital efficient.

Laura Prieskorn: And, you know, as we see attractive opportunities going forward to diversify our mix of business, you know, that could change the magnitude of required capital related to organic growth.

Don Cummings: As we see, attractive opportunities going forward to diversify our mix of business, that could change the magnitude of required capital related to organic growth. But overall, just to answer your question, I think the main delta from the billion dollars is related that was a more normal market environment as opposed to the strong growth that we've seen in the first half of the year. Maybe just to follow up on that, because I think the markets through the second quarter were up like 14%, if you just use the S&P, and obviously the growth off of the, so the run rate in capital generation is well above that percentage-wise.

Don Cummings: But overall, just to answer your question, I think the main delta from the billion dollars is related that was a more normal market environment as opposed to the strong growth that we've seen in the first half of the year. Maybe just to follow up on that, because I think the markets through the second quarter were up like 14%, if you just use the S&P, and obviously the growth off of the, so the run rate in capital generation is well above that percentage-wise. So is it, is it just the positive operating leverage that you're getting, and that's what's giving you higher capital generation, because it does seem to be coming in higher than the overall market?

Speaker Change: But overall, just to answer your question, I think the main delta from the billion dollars is really that that was a more normal market environment as opposed to the strong growth that we've seen in the first half of the year.

Don Cummings: Maybe just to follow up on that, because I think the markets through the second quarter were up like 14% if you just use the S&P, and obviously, the growth off of, so the run rate in capital generation is well above that percentage wise. So is it just the positive operating leverage that you're getting? And that's what's giving you higher capital generation because it does seem to be coming in higher than the overall market. Thanks.

Speaker Change: Maybe just to follow up on that, because I think the markets through the second quarter were up like 14% if you just use the S&P and obviously the growth.

Speaker Change: off of the so the run rate in capital generation is well above that percentage wise. So is it is it just the positive operating leverage that you're getting and that's what's giving you higher capital generation because it does seem to be coming in higher than the overall market. Thanks.

Don Cummings: So is it, is it just the positive operating leverage that you're getting, and that's what's giving you higher capital generation, because it does seem to be coming in higher than the overall market? Thanks. Yeah, so it's a, it is a combination, so obviously, you know, our portfolio is pretty heavily weighted toward variable annuity business. So within Jackson National, you're going to see the higher variable annuity AUM, driving our fee income, so that's, you know, a significant component.

Don Cummings: Thanks. Yeah, so it's a, it is a combination, so obviously, you know, our portfolio is pretty heavily weighted toward variable annuity business. So within Jackson National, you're going to see the higher variable annuity AUM, driving our fee income, so that's, you know, a significant component. Again, the other thing that I would remind you of is that we did have strong growth in Ryla sales, so as we continue to bring on assets for that business, we're seeing, you know, higher spread-based earnings as well.

Suneet Kamath: Yeah, so it is a combination. So obviously, you know, our portfolio is pretty heavily weighted toward the variable annuity business. So within Jackson National, you're going to see higher variable annuity AUM driving our fee income. So that's, you know, a significant component. The other thing that I would remind you of is that we did have strong growth in RILA sales. So as we continue to bring on assets for that business, we're seeing, you know, higher spread based earnings as well.

Speaker Change: Yeah, so it is a combination. So obviously, you know, our portfolio is pretty heavily weighted toward

Speaker Change: variable annuity business. So the within Jackson National you're going to see the higher variable annuity AUM driving our fee income so that's

Speaker Change: a significant component. The other thing that I would remind you of is that we did have strong growth in Ryla sales. So as we continue to bring on assets for that business, we're seeing higher spread based earnings as well.

Don Cummings: Again, the other thing that I would remind you of is that we did have strong growth in Ryla sales, so as we continue to bring on assets for that business, we're seeing, you know, higher spread-based earnings as well. Got it, and then my follow-up is just done, just how, where we said today, obviously, you know, first half of the year was pretty good, but now volatility is spiked, you know, interest rates have been pretty volatile as well.

Don Cummings: Got it, and then my follow-up is just done. Just how, where we said today, obviously, you know, first half of the year was pretty good, but now volatility has spiked; you know, interest rates have been pretty volatile as well. I guess, how should we think about the capital generation in jail, and I see, and the reason I ask is, is my thought, was, or my understanding, was that most of the hedges are now in Brookree, which means the capital generation of JNLIC might be a little bit more tied to the markets, but I just wanted to get your thoughts, but based on that, as well, it's just where we sit today in terms of the volatility.

Don Cummings: And then my follow-up is just on where we sit today. Obviously, the first half of the year was pretty good, but now volatility has spiked. Interest rates have been pretty volatile as well. I guess how should we think about the capital generation in JLNIC? And the reason I ask is that my thought was, or my understanding was, that most of the hedges are now in Brook Re, which means the capital generation of JLNIC might be a little bit more tied to the markets, but I just wanted to get your thoughts based on that as well as just where we sit today in terms of volatility. Thanks.

Speaker Change: Got it. And then my follow-up is just on...

Laura Prieskorn: just how where we said today obviously first half of the year was pretty good but now volatility is spiked interest rates to have been pretty volatile as well

Speaker Change: I guess, how should we think about the capital generation in JLNIC? And the reason I ask is, is my thought was, or my understanding was that most of the hedges are now in brookery, which means.

Don Cummings: I guess, how should we think about the capital generation in jail, and I see, and the reason I ask is, is my thought, was, or my understanding, was that most of the hedges are now in Brookree, which means the capital generation of JNLIC might be a little bit more tied to the markets, but I just wanted to get your thoughts, but based on that, as well, it's just where we sit today in terms of the volatility. Thanks.

Speaker Change: the capital generation of JNLIC might be a little bit more tied to the markets, but I just wanted to get your thoughts based on that, as well as just where we sit today in terms of the volatility. Thanks.

Don Cummings: Thanks. Yeah, so maybe I'll address the volatility point first, and so, you know, the recent market pullback that we saw in the last few days, our hedging program continued to perform as expected with Brookree in place, and I think there are a couple of things that contribute to that. So, first of all, just reminding everyone that, you know, our hedging program is now aligned more with the economics, post the Brookree transaction, so that makes it easier to manage with less rebalancing needed, you know, given that we've got a much more predictable hedge target, and our hedge target is really just our MRB position on a modified gap base. So that is certainly contributing to the positive results at JNL, and we do have some hedges at JNL for business that was not seeded over to Brookree, but you're right in that we would continue to see most of the performance at JNL being driven by our base contract, and there is a little bit of sensitivity to market results there, and the impact on, you know, variable newty AUM, and then again, as I said earlier, the growth and spread products.

Don Cummings: Yeah, so maybe I'll address the volatility point first, Suneet. So, you know, with the recent market pullback that we saw in the last few days, our hedging program continued to perform as expected with the broker in place. And I think there are a couple of things that contribute to that.

Speaker Change: yesso maybe i ll address the volatility point firstany

Don Cummings: Yeah, so maybe I'll address the volatility point first, and so, you know, the recent market pullback that we saw in the last few days are hedging program continued to perform as expected with Brookree in place, and I think there are a couple of things that contribute to that. So, first of all, just reminding everyone that, you know, our hedging program is now aligned more with the economics, post the Brookree transaction, so that makes it easier to manage with less rebalancing needed, you know, given that we've got a much more predictable hedge target, and our hedge target is really just our MRB position on a modified gap base, so that is certainly contributing to the positive results at JNL, and we do have some hedges at JNL for business that was not seeded over to Brookree, but you're right in that we would continue to see most of the performance at JNL being driven by our base contract, and there is a little bit of sensitivity to market results there, and the impact on, you know, variable newty AUM, and then again, as I said earlier, the growth and spread products. Okay, thanks.

Speaker Change: So, you know, with the recent market pullback that we saw in the last few days.

Speaker Change: Our hedging program continued to perform as expected with brookery in place and I think there are a couple of things that contribute to that.

Don Cummings: So first of all, just reminding everyone that, you know, our hedging program is now aligned more with the economics post the Brookray transaction, so that makes it easier to manage with less rebalancing needed. You know, given that we've got a much more predictable hedge target, and our hedge target is really just our MRB position on a modified gap basis. So that is certainly contributing to the positive results at J&L. And we do have some hedges at J&L for business that was not ceded over to Brookery.

Laura Prieskorn: So, first of all, just reminding everyone that, you know, our hedging program is now aligned more with the economics post the Brookray transaction.

Speaker Change: So, that makes it easier to manage with less rebalancing needed, you know, given that we've got a much more predictable hedge target. And our hedge target is really just our MRB position.

Laura Prieskorn: on a modified gap basis.

Speaker Change: That is certainly contributing to the positive results at J&L.

Speaker Change: And we do have some hedges at J&L for business that was not.

Don Cummings: But you're right in that we would continue to see most of the performance at J&L being driven by our base contract. And there is a little bit of sensitivity to market results there and the impact on, you know, variable annuity AUM. And then again, as I said earlier, growth and spread.

Brooke Rea: seated over to Brooke Rea, but you're right in that we would continue to see most of the performance of J&L being driven by our base contract and there is a little bit of sensitivity to market results there and the impact on you know variable annuity AUM.

Speaker Change: And then again, as I said earlier, the growth and spread products.

Operator: Okay, thanks.

Unknown Executive: Okay, thanks.

Laura Prieskorn: Okay, thanks.

Tom Gallagher: Thank you. As another reminder, if you'd like to ask your question, please dial star followed by one on your telephone keypad now. Our next question is from Tom Gallagher of Evercore ISI.

Tom Gallagher: Thank you. As another reminder, if you'd like to ask a question, please dial star followed by one on your telephone keypad now. Our next question is from Tom Gallagher of Evercore ISI. Tom, your line is open, please go ahead.

Speaker Change: Thank you. As another reminder, if you'd like to ask a question, please dial star followed by one on your telephone keypads now.

Unknown Executive: Thank you, as another reminder, if you'd like to ask your question, please dial Star Followed by one on your telephone keypad now.

Speaker Change: Our next question is from Tom Gallagher of Evercore ISI. Tom, your line is open, please go ahead.

Tom Gallagher: Tom, your line is open. Please good morning. A couple of questions on hedging in Brookway. Don, I was following your comments and it sounds like the 200 million plus derivative loss was largely offset by the fees you're collecting, the guaranteed fees you're collecting. I think you said it was a net of 64 million for Brookway in the quarter.

Tom Gallagher: Our next question is from Tom Gallagher of Evercore ISI.

Tom Gallagher: Good morning. I have a couple of questions on hedging and collateral. So Don, I was following your comments, and it sounds like the 200 million plus derivative loss was largely offset by the fees you're collecting, the guaranteed fees you're collecting. I think you said it was a net of $64 million for the brokery in the quarter. So my question is, can you just comment on what are the actual hard assets that are currently capitalizing Brook? How does that compare to the $64 million? And can you mention your capital levels there? Do you have a buffer over what you target?

Tom Gallagher: Tom, your line is open, please Good morning. A couple of questions on hedging in Brookway. Don, I was following your comments and it sounds like the 200 million plus derivative loss was largely offset by the fees you're collecting, the guaranteed fees you're collecting. I think you said it was a net of 64 million for Brookway in the quarter. So my question is, can you just comment on what are the actual hard assets that are currently capitalizing Brook? How does that compare to the 64 million? And just can you mention your capital levels there? Do you have a buffer over what you target?

Speaker Change: Good morning. A couple of questions on hedging and brookery.

Unknown Executive: So Don, I was following your comments, and it sounds like the 200 million plus.

Speaker Change: So Don, I was following your comments, and it sounds like the 200 million plus

Speaker Change: Derivative loss was largely offset by the fees you're collecting, the guaranteed fees you're collecting. I think you said it was a net of $64 million.

Don Cummings: So my question is, can you just comment on what are the actual hard assets that are currently capitalizing Brook? How does that compare to the 64 million? And just can you mention your capital levels there? Do you have a buffer over what you target?

Speaker Change: for brokering in the quarter.

Speaker Change: So my question is, can you just comment on what are the actual hard assets that are currently capitalizing Brook?

Speaker Change: How does that compare to the $64 million? And just can you mention your capital levels there? Do you have a buffer over what you target?

Don Cummings: Yeah, thanks, Tom. First of all, just a reminder, the components of the hedge gain or loss in the quarter, which we displayed on slide eight of the earnings material, those are for JFI on a consolidated basis, and there's not a direct read across to Brook Rae, but generally, I think you can use that as kind of an informational proxy. Brook Rae follows a modified gap structure, so it's not going to be the exact same numbers, but it's kind of a directionally a good indication. In terms of just some stats on Rookery, just to remind you of what we previously disclosed.

Don Cummings: Yeah, thanks, Tom. So first of all, just a reminder, so the components of the hedge gain are lost in the quarter, which we displayed on slide 8 of the earnings material. Those are for JFI on a consolidated basis. And there's not a direct read across to Brookway, but generally I think you can use that as kind of an informational proxy. Brookway follows a modified gap structure, so it's not going to be the exact same numbers, but kind of directionally a good indicator. In terms of just some stats on Brookway, just remind you of what we previously disclosed.

Laura Prieskorn: Thanks, Tom. First of all, just a reminder, the components of the hedge gain or loss in the quarter, which we displayed on slide 8 of the earnings material, those are for JFI on a consolidated basis.

Don Cummings: Yeah, thanks Tom. So first of all, just a reminder, so the components of the hedge gain are lost in the quarter, which we displayed on slide 8 of the earnings material. Those are for JFI on a consolidated basis. And there's not a direct read across to Brookway, but generally I think you can use that as kind of an informational proxy. Brookway follows a modified gap structure, so it's not going to be the exact same numbers, but kind of directionally a good indicator.

Speaker Change: and there's not a direct read across to brook ray but generally i think you can use that as kindofan informational proxy

Speaker Change: Brooke Ray follows a modified gap structure so it's not going to be the exact you know same numbers but you know kind of directionally a good indicator

Speaker Change: In terms of just some stats on Brook Re, just to remind you of what we previously disclosed. So we funded Brook Re on day one with $700 million of cash and investments.

Don Cummings: In terms of just some stats on Brookway, just remind you of what we previously disclosed. So we funded Brookway on day one with $700 million of cash and investments. And on day one, we had an MRB that was in an asset position. And through the first half of the year, we've seen a bit of growth in Brookway's equity. So everything with Brookway, with two quarters behind us, is operating as we expected.

Don Cummings: So we funded Brookway on day one with $700 million of cash and investments. And on day one, we had an MRB that was in an asset position. And through the first half of the year, we've seen a bit of growth in Brookway's equity. So everything with Brookway, with two quarters behind us, is operating as we expected. And we continue to be comfortable with that structure.

Don Cummings: So we funded Brookree on day one with $700 million in cash and investment. And on day one, we had an MRB that was in an asset position. And, you know, through the first half of the year, we've seen a bit of growth in Brookry's equity. So everything with Brookry, you know, with two quarters behind us, is operating as we expected. And, you know, we continue to be comfortable with that structure.

Don Cummings: And we continue to be comfortable with that structure. Gotcha. And so the 64, I could compare to the 700 million, or is the net reserve position, that's an asset, large enough where it's not going to be 10% pipe swing in your capital there, or that it would be much smaller, maybe comment on that. Yeah, so the 65 wouldn't be relative to the 700 million of hard assets, because again, there's a couple of components to Brookway's equity.

Unknown Executive: And on day one, we had an MRB that was in an asset position, and, you know, through the first half of the year, we've seen, you know, a bit of growth in Brookree's equity. So everything with Brookree, you know, with two quarters behind us, is operating as we expected. And, you know, we continue to be comfortable with that structure.

Unknown Executive: And on day one, we had an MRB that was in an asset position.

Unknown Executive: And, you know, through the first half of the year, we've seen, you know, a bit of growth in Brookery's equity. So everything with Brookery, you know, with two quarters behind us is operating.

Unknown Executive: As we expected, and, you know, we continue to be comfortable with with that structure.

Don Cummings: Gotcha. And so the 64, I could compare to the 700 million, or is the net reserve position, that's an asset, large enough where it's not going to be 10% pipe swing in your capital there, or that it would be much smaller, maybe comment on that. Yeah, so the 65 wouldn't be relative to the 700 million of hard assets, because again, there's a couple of components to Brookway's equity. It's the hard assets that we put in, in addition to the MRB asset. And that's going to be significantly higher than the 700 million. We provide some disclosures in our financial supplement on the consolidated JFI, MRB position.

Tom Gallagher: Gotcha, and so the 64 I took a pair of the 700 million. Or, you know, is the net reserve position, that's an asset, large enough where it's not going to be, you know, a 10% type swing in your capital there that it would be much smaller? Maybe if you could comment on that.

Speaker Change: Gotcha, and so the 64, I could compare to the 700 million.

Speaker Change: Or, you know, is the net reserve position, that's an asset, large enough where it's not going to be, you know, a 10% type swing in your capital there that it would be much smaller? Maybe if you could comment on that.

Don Cummings: Yeah, so the 65 wouldn't be relative to the 700 million in-part assets because, again, there are a couple of components to brokerage equity. It's the hard assets that we put in in addition to the MRB asset, and, you know, that's going to be significantly higher than 700 million. We provide some disclosures and our financial supplement on the consolidated JFI MRB position, but again, that's not a direct read across for brokerage. It gives you an idea of the magnitude of the assets that we've got.

Unknown Executive: Yeah, so the 65 wouldn't be relative to the 700 million in hard assets, because again, there are a couple of components to Brookree's equity. It's the hard assets that we put in, in addition to the MRB asset. And, you know, that's going to be significantly higher than 700 million. We provide some disclosures in our financial supplement on the consolidated JFI MRB position. But again, not, you know, that's not a direct read across for Brookree, but it gives you an idea of the magnitude of the assets that we've got in Brookree.

Unknown Executive: Yeah, so the $65 million wouldn't be relative to the $700 million of hard assets because again there's a couple of components to Brookery's equity, it's the hard assets that we put in.

Don Cummings: It's the hard assets that we put in, in addition to the MRB asset. And that's going to be significantly higher than the 700 million. We provide some disclosures in our financial supplement on the consolidated JFI, MRB position. But again, that's not a direct read across for Brookway. It gives you an idea of the magnitude of the assets that we've got in Brookway.

Unknown Executive: In addition to the MRB asset.

Unknown Executive: And, you know, that's going to be significantly higher than the $700 million.

Unknown Executive: We provide some disclosures in our financial supplement on the consolidated JFI MRB position. But again, that's not a direct read across for Brookree. It gives you an idea of the magnitude of the assets that we've got in Brookree.

Don Cummings: But again, that's not a direct read across for Brookway. It gives you an idea of the magnitude of the assets that we've got in Brookway.

Don Cummings: Okay, and then my last question is just, when I look back a few years ago, when you were still using a different hedging approach, I think the duration of most of your derivatives was around three months. And then there was a period where, as rates began to move higher, you started lengthening that out. Can you comment about it? Average duration of your hedging instrument and also role risk. If we get into an environment where the market becomes a lot more volatile, how should we think about role risk on your hedges?

Tom Gallagher: Okay, and then my last question is just when I look back a few years ago when you were still using a different hedging approach, I think the duration of most of your derivatives was around three months. And then there was a period where as rates began to move higher, you started lengthening that out. Can you comment on that? average duration of your hedging instruments and also role risk. If we get into an environment where the market becomes a lot more volatile, how should we think about role risk on your hedges? Thanks.

Speaker Change: Okay, and then my last question is just, when I, if I look back a few years ago,

Don Cummings: Okay, and then my last question is just, when I look back a few years ago, when you were still using a different hedging approach, I think the duration of most of your derivatives were around three months. And then there was a period where as rates began to move higher, you started lengthening that out. Can you comment about it? Average duration of your hedging instrument and also role risk. If we get into an environment where the market becomes a lot more volatile, how should we think about role risk on your hedges?

Speaker Change: when you were still, you know, using a different hedging approach. I think the duration of most of your derivatives were around three months. And then there was a period where as rates began to move higher, you started lengthening that out. Can you comment about

Speaker Change: average duration of your hedging instruments and also roll risk. If we get into an environment where the market becomes a lot more volatile, how should we think about roll risk on your hedges? Thanks.

Don Cummings: Thanks. Yeah, so I'll make a couple of points and maybe ask Steve to just chime in on some of the specifics around the duration of our hedges. But, you know, because Brook Raise hedging program is more aligned with economics, it's much easier for us to manage and actually requires less rebalancing than our historical approach under the old statutory framework. So we feel, you know, comfortable that that's working as we kind of designed it and as we expected. All that Steve just chimed in on in terms of, you know, the duration of the hedges that we're using and that sort of thing.

Don Cummings: Yeah, so I'll make a couple of points and maybe ask Steve to just chime in on some of the specifics around the duration of our hedges, but you know, because Brook Rees' hedging program is more aligned with economics, it's much easier for us to manage and actually requires less rebalancing than our historical approach under the old statutory framework. So we feel, you know, comfortable that that's working as we kind of designed it and as we expected, all of it, Steve, just chime in on in terms of, you know, the duration of the hedges that we're using and that sort of thing.

Speaker Change: Yeah, so I'll make a couple points and maybe ask Steve to just chime in on on some of the specifics around the

Steve Benures: Thanks. Yeah, so I'll make a couple of points and maybe ask Steve to just chime in on some of the specifics around the duration of our hedges. But, you know, because Brook Raise hedging program is more aligned with economics, it's much easier for us to manage and actually requires less rebalancing than our historical approach under the old statutory framework. So we feel, you know, comfortable that that's working as we kind of designed it and as we expected, all that Steve just chime in on in terms of, you know, the duration of the hedges that we're using and that sort of thing.

Speaker Change: the duration of our hedges. But, you know, with because of Brooke Ray's hedging program is more aligned with the economics, it's much easier for us to manage and actually requires

Unknown Executive: Less rebalancing than our historical approach under the old statutory framework.

Unknown Executive: so we feel comfortable that that's working

Unknown Executive: As we kind of designed it and as we expected, I'll let Steve just chime in on in terms of

Speaker Change: you know the duration of the edges that we're using and that's sort of thing in terms of focusing on the interest rates as part of the modified gap move we really increased our interest rate protection as part of our brain workgan so we do and have some for

Unknown Executive: In terms of focusing on interest rates as part of the modified GAAP move, we really increased our interest rate protection as part of that framework. And so we do have some market volatility picked up; having those puts in place serves as well. And those, you know, those will vary from three to six to nine months.

Steve Benures: Yeah, in terms of focusing on interest rates as part of the modified gap, we really increased our interest rate protection as part of that framework, and so we do have some pretty significant north of $30 billion of interest rate derivatives. Those are, we're tied to the long run of the euro curve, so $10, $20, $30, $20, $30 year part of the euro curve. So we've got some pretty good protection there, and that's tied to liability. In terms of the equity side, we both have a combination of futures, but important we still have a significant put option portfolio that's there for retail type events. You know, worked really well in a recent period. You know, market volatility picked up; having those puts in place serves as well, and those, you know, those were varied from 3 to 6 to 9 month.

Steve Benures: Yeah, in terms of focusing on interest rates as part of the modified gap, we really increased our interest rate protection as part of that framework and so we do have some pretty significant north of $30 billion of interest rate derivatives. Those are, we're tied to the long run of the euro curve, so $10, $20, $30, $20, $30 year part of the euro curve. So we've got some pretty good protection there and that's tied to liability.

Unknown Executive: significant nor the thirty billion dollars of interestrate derivatves

Unknown Executive: Please go to the, go to start.

Speaker Change: We're tied to the longer end of the Euro curve, so 10, 20, 30-year part of the Euro curve, so we've got some pretty good protection there that's tied to liability. In terms of on the equity side, we both have a combination of futures.

Steve Benures: In terms of the equity side, we both have combination of futures, but important we do still have a significant put option portfolio that's there for retail type events, you know, worked really well in a recent period, you know, market volatility picked up having those puts in place serves as well and those, you know, those were varied from 3 to 6 to 9 month. We tried to stagger the maturity a little bit on the put options as well.

Speaker Change: But importantly, we do still have a significant put option portfolio that's there for retail type events, you know, worked really well in recent periods, you know, market volatility picked up, having those puts in place.

Unknown Executive: We try to stagger the maturity a little bit on the put options as well, so we feel pretty comfortable that our hedging is pretty resilient for the foreseeable future. In terms of role risk, you know, we're pretty diversified across multiple indices. We've ramped up to seven different equity indices that we're using right now. So we want to make sure we're lining up all of the liabilities we offer on our platform.

Steve Benures: We tried to stagger the maturity a little bit on the put options as well. So we feel pretty comfortable that our hedging is pretty resilient for the foreseeable future. In terms of the role risk, you know, we're pretty diversified across multiple indices. You know, we've ramped up to yet seven different equity indices that we're using right now. So we want to make sure we're kind of well at the liabilities we offer our platforms. And one of the benefits that we are getting, you know, is start to managing the collateral account of party risk, is Brilet does provide a nice offset to our VAs.

Speaker Change: serves as well and those you know those are varying for three to six to nine months we try to stag urity alittlebit on the point options as well so we feel pretty good comfortable and our edging is pretty usily at for for the first see what future it turns of the role risk you know we're pretty diversified across multiple indes

Steve Benures: So we feel pretty comfortable that our hedging is pretty resilient for the foreseeable future. In terms of the role risk, you know, we're pretty diversified across multiple indices, you know, we've ramped up to yet seven different equity indices that we're using right now. So we want to make sure we're kind of well at the liabilities we offer our platforms. And one of the benefits that we are getting, you know, is start to managing the collateral account of party risk, is Brilet does provide a nice offset to our VAs. We're seeing about a 30% reduction in our kind of external hedging needs, and so that does help with managing the liquidity and the role of, you know, overall risk management growth.

Unknown Executive: Gotcha.

Speaker Change: We've ramped up to seven different equity indices that we're using right now. So we want to make sure we're lining up all of the liabilities we offer on our platform. And one of the benefits that we are getting with Extractive Managing

Unknown Executive: And one of the benefits that we are getting, you know, with executive management, collateral, and counterparty risk is Pryla does provide a nice offset to our VAs. We're seeing about a 30 percent reduction in our kind of external hedging needs. And so that does help with managing the liquidity and the role of the overall risk management program.

Unknown Executive: Thanks.

Speaker Change: The collateral, the counterparty risk is Pryla does provide a nice offset to our VAs. We're seeing about a 30% reduction in our kind of our external hedging needs. And so that does help with managing the liquidity and the role of the overall risk management program.

Steve Benures: We're seeing about a 30% reduction in our kind of external hedging needs, and so that does help with managing the liquidity and the role of, you know, overall risk management growth.

Unknown Executive: Gotcha. Thanks.

Tom Gallagher: Gotcha. Thanks. Thanks for the call.

Unknown Executive: Thanks for the call.

Speaker Change: Gotcha. Thanks. Thanks for the call.

Unknown Executive: Thanks for the call.

Unknown Executive: Thank you.

Operator: Thank you. As a final reminder, if you'd like to ask a question, please dial star followed by one on your telephone keypad now. At this time, we have no further questions, so I'll hand back over to Laura Prieskorn.

Unknown Executive: As a final reminder, if you'd like to ask a question, please dial star, followed by one on your telephone keypads now.

Speaker Change: Thank you. As a final reminder, if you'd like to ask a question, please dial star followed by one on your telephone keypads now.

Unknown Executive: Thank you.

Unknown Executive: As a final reminder, if you'd like to ask a question, please dial star, followed by one on your telephone keypads now.

Unknown Executive: thank

Unknown Executive: At this time, we have no further questions.

Unknown Executive: At this time, we have no further questions, so I hand over to Laura Prieskorn for any closing or final questions.

Laura Prieskorn: So hand back over to Laura, please call for any closing or final remarks. Thank you. Your participation in today's call is appreciated.

Unknown Executive: At this time we have no further questions, so I'll hand back over to Laura Prieskorn for any closing or final remarks.

Unknown Executive: At this time, we have no further questions.

Laura Prieskorn: So hand back over to Laura, please call for any closing or final remarks. Thank you. Your participation in today's call is appreciated. We thank you all for joining us this morning. Take care.

Laura Prieskorn: Thank you. Your participation in today's call is appreciated. We thank you all for joining us this morning. Take care.

Laura Prieskorn: Thank you. Your participation in today's call is appreciated. We thank you all for joining us this morning.

Laura Prieskorn: We thank you all for joining us this morning. Take care.

Unknown Executive: Ladies and gentlemen, this concludes today's call. Thank you for joining us.

Operator: Ladies and gentlemen, this concludes today's call. Thank you for joining us; you may now disconnect your lines.

Speaker Change: Take care.

Unknown Executive: This can act your line.

Operator: Ladies and gentlemen, this concludes today's call. Thank you for joining, you may now disconnect your lines.

Unknown Executive: Ladies and gentlemen, this concludes today's call. Thank you for joining us. This can act your line.

Q2 2024 Jackson Financial Inc Earnings Call

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