Jackson Financial Inc

We manage our business through three segments: Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks. We report certain activities and items that are not included in these segments, including the results of PPM Holdings, Inc., the holding company of PPM, within Corporate and Other. The following tables and discussion represent an overall view of our results of operations for each segment.

Pretax Adjusted Operating Earnings by Segment

The following table summarizes pretax adjusted operating earnings (non-GAAP) from the Company's business segment operations and also provides a reconciliation of the segment measure to net income on a consolidated U.S. GAAP basis. Also, see Item 8. Financial Statements and Supplementary Data— Note 3 - Segment Information of the Notes to Consolidated Financial Statements for further information regarding the calculation of pretax adjusted operating earnings:

The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Retail Annuities segment. The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report:

The following table summarizes a roll-forward of activity affecting account value for our Retail Annuities segment for the periods indicated:

Pretax adjusted operating earnings increased $491 million to $1,855 million for the year ended December 31, 2024 from $1,364 million for the year ended December 31, 2023 primarily due to:

•$424 million increase in fee income primarily due to higher average separate account values compared to prior year;

•$301 million increase in spread income primarily due to $289 million higher net investment income and $12 million lower interest credited on contract holder funds. The increase in investment income was primarily driven by higher income on bonds driven by higher asset balances earning higher yields in 2024, compared to the prior year, partially offset by higher investment expenses related to portfolio leveraged costs;

•$26 million decrease in death, other policy benefits, and change in policy reserves, net of (gain) loss from updating future policy benefits cash flow assumptions, primarily due to the impact of actuarial assumption updates, lower other policyholder benefits, and an increase in payout annuity reserves. See "Policy and Contract Liabilities" below for further information regarding our actuarial assumption updates.

These increases were partially offset by:

•$279 million increase in commissions, sub-advisor, and general expenses, net of deferrals, primarily driven by a $115 million increase in non-deferrable asset-based commissions expense, primarily due to higher account values during 2024, and a $200 million increase in other commission expenses, net of deferrals of $163 million, primarily due to higher RILA sales in 2024. In addition, general and administrative expenses increased $111 million primarily due to an increase in incentive compensation expenses in the current year.

Retail annuities account value, net of reinsurance, increased $16.2 billion between periods primarily due to positive variable annuity separate account returns driven by favorable market performance in 2024, as well as positive RILA and fixed annuity net flows over the period.

The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Institutional Products segment. The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report:

The following table summarizes a roll-forward of activity affecting account value for our Institutional Products segment for the periods indicated:

Pretax adjusted operating earnings increased $27 million to $96 million for the year ended December 31, 2024 from $69 million for the year ended December 31, 2023 primarily due to a $26 million increase in spread income primarily due to $30 million higher investment income, partially offset by $4 million higher interest credited on contract holder funds.

Institutional product account value decreased from $8,406 million at December 31, 2023 to $8,384 million at December 31, 2024. The decrease in account value was driven by continued maturities of the existing contracts and funding agreements, mostly offset by an increase in sales in 2024.

The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for our Closed Life and Annuity Blocks segment. The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report:

Pretax adjusted operating earnings increased $86 million to $(9) million for the year ended December 31, 2024 from $(95) million for the year ended December 31, 2023 primarily due to:

•$70 million decrease in death, other policy benefits, and change in policy reserves, net of (gain) loss from updating future policy benefits cash flow assumptions, primarily due to the impact of actuarial assumption updates, improved mortality, and lower other policyholder benefits. See“Policy and Contract Liabilities” below for further information regarding our actuarial assumption updates; and

•$27 million decrease in interest credited on other contract holder funds related to persistency bonuses.

Corporate and Other includes the operations of PPM Holdings, Inc., the parent holding company of PPM, and unallocated corporate revenue and expenses, as well as certain eliminations and consolidation adjustments. The following table sets forth, for the periods presented, certain data underlying the pretax adjusted operating earnings results for Corporate and Other. The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this report:

Pretax adjusted operating earnings decreased $91 million to $(264) million for the year ended December 31, 2024 from $(173) million for the year ended December 31, 2023 primarily due to a $60 million decrease in net investment income, and a $24 million decrease in other income primarily due to a one-time reinsurance related adjustment.