Jackson Financial Inc
For the period ended Dec 31, 2024. Filed Feb 26, 2025.
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FY2024 · Filed Feb 26, 2025
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Policy and Contract Liabilities
We establish, and carry as liabilities, actuarially determined amounts that are estimated as necessary to meet policy obligations or to provide for future annuity payments. Amounts for actuarial liabilities are computed and reported on the Consolidated Financial Statements in conformity with U.S. GAAP. For more details on Policyholder Liabilities, see “Critical Accounting Estimates" below.
Our policy and contract liabilities includes separate account liabilities, reserves for future policy benefits and claims payable and other contract holder funds. As of December 31, 2024, 90% of our policy and contract liabilities were in our Retail Annuities segment, 3% were in our Institutional Products segment and 7% were in our Closed Life and Annuity Blocks segment.
The table below represents a breakdown of our policy and contract liabilities:
| December 31, 2024 | Separate Accounts | Reserves for future policy benefits | Other contract holder funds | Market Risk Benefits | Total |
|---|---|---|---|---|---|
| (in millions) | |||||
| Variable Annuities | $228,851 | $— | $7,206 | $(5,176) | $230,881 |
| RILA1 | — | — | 11,685 | 6 | 11,691 |
| Fixed Index Annuities2 | — | — | 8,515 | 37 | 8,552 |
| Fixed Annuities | — | — | 9,615 | 1 | 9,616 |
| Payout Annuities | — | 1,095 | 844 | — | 1,939 |
| Other Annuities | 208 | — | — | — | 208 |
| Total Retail Annuities | 229,059 | 1,095 | 37,865 | (5,132) | 262,887 |
| Total Institutional Products | — | — | 8,384 | — | 8,384 |
| Total Closed Life and Annuity Blocks | 84 | 8,599 | 11,899 | 7 | 20,589 |
| Total Policy and Contract Liabilities | 229,143 | 9,694 | 58,148 | (5,125) | 291,860 |
| Claims payable and other | — | 1,378 | 164 | — | 1,542 |
| Total | $229,143 | $11,072 | $58,312 | $(5,125) | $293,402 |
| December 31, 2023 | Separate Accounts | Reserves for future policy benefits | Other contract holder funds | Market Risk Benefits | Total |
|---|---|---|---|---|---|
| (in millions) | |||||
| Variable Annuities | $219,381 | $— | $8,396 | $(2,000) | $225,777 |
| RILA1 | — | — | 5,219 | 3 | 5,222 |
| Fixed Index Annuities2 | — | — | 10,243 | 37 | 10,280 |
| Fixed Annuities | — | — | 9,736 | 1 | 9,737 |
| Payout Annuities | — | 1,090 | 860 | — | 1,950 |
| Other Annuities | 198 | — | — | — | 198 |
| Total Retail Annuities | 219,579 | 1,090 | 34,454 | (1,959) | 253,164 |
| Total Institutional Products | — | — | 8,406 | — | 8,406 |
| Total Closed Life and Annuity Blocks | 77 | 9,362 | 12,291 | 7 | 21,737 |
| Total Policy and Contract Liabilities | 219,656 | 10,452 | 55,151 | (1,952) | 283,307 |
| Claims payable and other | — | 1,446 | 168 | — | 1,614 |
| Total | $219,656 | $11,898 | $55,319 | $(1,952) | $284,921 |
(1) Includes the embedded derivative liabilities in other contract holder funds related to RILA of $3,065 million and $1,224 million at December 31, 2024 and 2023, respectively.
(2) Includes the embedded derivative liabilities related to fixed index annuity in other contract holder funds of $877 million and $866 million at December 31, 2024 and 2023, respectively.
As of December 31, 2024:
$229.1 billion or 79% of our policy and contract liabilities were backed by separate account assets. These separate account assets backed reserves primarily related to our variable annuities. Separate account liabilities are fully funded by cash flows from the customer’s corresponding separate account assets and are set equal to the fair value of such invested assets.
$47.4 billion of our policy and contract liabilities were backed by our investment portfolio.
$15.3 billion of our policy and contract liabilities were reinsured by Athene and backed by funds withheld assets.
As of December 31, 2024, 94% of fixed annuity, fixed-index annuity, and the fixed accounts of RILA and variable annuity correspond to crediting rates that are at the guaranteed minimum crediting rate. We have the discretion, subject to contractual limitations and minimums, to reset the crediting terms on the majority of our fixed index annuities and fixed annuities.
See Item 8. Financial Statements and Supplementary Data— Note 9 - Reserves for Future Policy Benefits and Claims Payable, Note 10 - Other Contract Holder Funds, Note 11 - Separate Account Assets and Liabilities, and Note 12 - Market Risk Benefits of the Notes to Consolidated Financial Statements for additional discussion on accounting policies around Reserves for future policy benefits and claims payable, Other contract holder funds, Separate account assets and liabilities and MRBs.
Actuarial Assumption Updates and Model Enhancements
The following tables reflect the impacts from our annual assumption review to pretax income (loss), pre-tax non-operating
adjustments and Pre-Tax Adjusted Operating Earnings for the periods presented:
| Years Ended December 31, | |||
|---|---|---|---|
| 2024 | 2023 | 2022 | |
| (in millions) | |||
| Assumption Review Impact: | |||
| Total assumption review impact on pretax (loss) income | $(445) | $(466) | $(448) |
| Less: total assumption review impact on pretax non-operating | (419) | (406) | (486) |
| Total assumption review impact on Pretax Adjusted Operating Earnings | $(26) | $(60) | $38 |
| Assumption Review Impact on Pretax Adjusted Operating Earnings by Segment: | |||
| Retail Annuities | $42 | $— | $(9) |
| Closed Life and Annuity Blocks | (68) | (60) | 47 |
| Total assumption review impact on Pretax Adjusted Operating Earnings | $(26) | $(60) | $38 |
2024 Actuarial Assumption Updates and Model Enhancements
The impact of assumption updates on Pretax Adjusted Operating Earnings was a loss of $26 million. $68 million of this loss was attributed to the Closed Life and Annuity Blocks segment mainly on the additional reserve for life insurance and annuitization benefits driven by an update to a more recent mortality table, offset by favorable mortality experience on the reserves for future policyholder benefits on payout annuity blocks. A gain of $42 million from the Retail Annuities segment was mainly driven by favorable mortality experience on payout annuities on the reserves for future policyholder benefits as well as other contract holder funds.
The impact on pretax non-operating earnings was a loss of $419 million attributed to the Retail Annuities segment. This loss was due to changes on variable annuity MRB reserves of $434 million, which was primarily related to data enhancements and assumption updates for withdrawal utilization on policies with GMWBs. This was partially offset by a gain of $15 million on fixed index annuities and RILA reserves, primarily driven by changes to RILA partial withdrawal assumptions. See Item 8. Financial Statements and Supplementary Data -- Note 12 - Market Risk Benefits of the Notes to Consolidated Financial Statements for further information regarding the notable assumption updates included in the MRB calculation.
Liquidity and Capital Resources
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