Jackson Books ‘Record’ Profits in Year’s First Half
August 15, 2017 by Greg Shulas
Jackson National reaped record profits for the year’s first half, compared to previous reporting periods, and also registered a record in assets under management. That’s according to a mid-year update issued by the Lansing, Mich.-based life insurer.
In 2017’s opening six months, Jackson booked $1.4 billion in IFRS pre-tax operating income, an uptick of 7% compared to last year’s first half. IFRS refers to the London-based International Financial Reporting Standards, the accounting guidelines that Jackson’s U.K.-based parent, Prudential plc, uses in its financial statements.
Further, Jackson boasted sales and deposits of $12.1 billion for the year’s opening half, representing a 8% increase from the previous reporting period. An additional highlight was Jackson hitting a record in separate account assets under management, as the total hit a high-water mark of $162 billion in AUM.
Barry Stowe, chair and CEO of Prudential plc’s North American business, says in a press statement that the results were primarily sparked by solid variable annuity net flows and the growth from the separate account asset base.
“During the first half of the year, our disciplined approach to business produced excellent results, even amid a disruptive industry environment,” Stowe says in the release. “Our consistent performance allowed Jackson to remit a $600 million dividend to our parent company while continuing to have a strong capital position.”
Jackson’s release comes as its affiliate business units within Prudential plc have been in the news.
InvestmentNews has reported that LPL Financial is considering a strategy to buy four broker-dealers in the National Planning Holdings network, a sister business of Jackson National. Such an acquisition would help LPL hit earnings growth in 2018 of 20%, states Nomura Securities analyst Steven Chuback in the InvestmentNews article. Chuback estimates National Planning Holdings to have a value of $750 million.
If LPL Financial Holdings Inc. acquires the four broker-dealers in the National Planning Holdings’ network, the largest independent contractor broker-dealer could see earnings growth next year of 20%, according to Chubak.
Executives at LPL and Jackson had no comment to InvestmentNews about the potential transaction.
Additionally, Prudential plc is reported to be in talks to sell its U.K. annuity business, according to the Financial Times. This movement comes amid a larger push by shareholders to break up parts of Jackson’s parent company.