JXN Q3 2026 earnings call transcript, November 4, 2026

And capital efficiency. Consistent with our approach of providing expanded disclosures for Brookery annually at year-end, we anticipate providing additional transparency when we report year-end 2026 results. Overall, Brookery allows us to prudently manage the long-term economic risks of our variable annuity guarantees, protect policyholders over the long term, and support more consistent hedging outcomes and predictable capital generation. Turning to slide 13, we highlight net hedge results by product and provide a reconciliation from pre-tax adjusted operating earnings to U.S. GAAP pre-tax income attributable to Jackson Financial. As a reminder, we recently enhanced our disclosure of net hedge results to separately present our variable annuity in RILA businesses. This provides greater transparency.

Good day, everyone. Welcome to the Jackson Financial third quarter 2026 earnings conference call. All participants will be in listen-only mode until the question and answer session begins.

Following the presentation, we will conduct a question and answer session. This call is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Dean Scott, Head of Investor Relations. Please go ahead.

Good morning, everyone, and welcome to Jackson's 2026 third quarter earnings call. Today's remarks may contain forward-looking statements which are subject to risks and uncertainties. These statements are not guarantees of future. Performance or events. Jackson's filings with the S&P. I'll now turn the call back to Don.

Thank you, Brian. Turning to slide 20, we remain confident in Jackson's outlook, supported by the strength of our business and significant financial flexibility. Over the last five years, we have successfully navigated volatile markets while pursuing disciplined, profitable growth. Our associates... ...continue to be our greatest strength, and I'm grateful for their dedication and contributions to our success each quarter. At this time, I'll turn the call over to the operator for questions.

We'll now begin the question and answer session. If you'd like to ask a question or joined by the webinar, please use the raise hand icon, which can be found on the black bar at the bottom of the webinar application screen. Just checking on... Just confirming that I have a...

I'll see you next time.

Good day, everyone. Welcome to the JXN. Financial third quarter 2026 earnings conference call. All participants will be in listen-only

mode until the question and answer session begins. Following the presentation, we will

conduct a question and answer session. This call is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Dean Scott,

Head of Investor Relations. Please go ahead.

Good morning, everyone, and welcome to JXN's 2020. Six, third quarter earnings call. Today's remark.

Today's remark.

Good day, everyone. Welcome to the Jackson Financial Third Quarter 2026.

JXN earnings conference call. All participants will be in listen-only mode until the question and answer session begins. Following the presentation, we will conduct a question and answer session. This call is being recorded. If you have any objections, please disconnect at this time. I would now like to turn the call over to Dean Scott, Head of Investor Relations. Please go ahead.

Good morning, everyone, and welcome to Jackson's 2026 Third Quarter Earnings Call. Today's remarks may contain forward-looking statements which are subject to risks and uncertainties. These statements are not guarantees of future performance or events. Jackson's filings with the SEC provide details on important factors that may cause actual results or events to defer materially. Except as required by law, Jackson is under no obligation to update any forward-looking statements. Today's remarks also refer to certain non-GAAP financial measures. The reconciliation of those measures to the most comparable U.S. GAAP figures is included. in our earnings release, financial supplement, and earnings presentation, all of which are available on the Investor Relations page of our website at investors.jackson.com. Presenting on today's call are Jackson CEO, Don Cummings, and CFO, Brian Walta. Joining us in the room are our President and CEO of PPM America, Chris Robb, and our Head of Distribution of Jackson National Life Distributors, Allison Reed. At this time, I'll turn the call over to our CEO, Don Cummings.

Thank you, Dean.

Good morning, everyone, and welcome to Jackson Financial's third quarter 2026 earnings call. As I shared last quarter, I am honored to lead Jackson as we continue to execute on our long-term strategy and pursue exciting opportunities ahead. Today, I will highlight our strong quarterly results, progress toward our financial targets, and recent announcements on further strengthening our product portfolio and expanding our distribution results. Following my remarks, our CFO, Brian Walta, will provide a more detailed review of our financial performance. Before turning to our quarterly results, I want to recognize the significant progress Jackson has made during our first five years as a stand-alone public company, as summarized on slide three. Over that period, we have generated more than $88 billion in retail annuity sales. This reflects our... continued leadership in variable annuities, the development of a leading RILA franchise, and our successful re-entry into other spread-based products. Together, these initiatives have meaningfully shifted our sales mix, with that diversification now increasingly reflected in our in-force business. This progress is also evident in our earnings. Since becoming an independent company, we have generated nearly $8 billion in in-force business. cumulative adjusted operating earnings including outstanding results this quarter. Strong growth in spread income is complementing our robust fee income and creating a more balanced and durable earnings profile. Our profitability is further demonstrated by our track record of capital generation and distributable cash flow. The strong cash flow profile of our in-force variable annuity business

enabled us to immediately begin returning capital to shareholders with subsequent growth in spread income providing additional support. Since becoming an independent company we have produced nearly five billion dollars of free capital generation which reflects our substantial investment in new business growth over that five-year period. Over the same time frame we returned a significant portion of capital generation to shareholders. More than three are you? point five billion dollars. This exceeds our initial market capitalization by one billion dollars and on a net basis we have repurchased nearly thirty percent of our initial share count. Our confidence in the sustainability of Jackson's capital generation led us to establish a common dividend in twenty twenty one. A key differentiator for our company. We have increased the dividend every year since then and then and it now stands at ninety cents per share. An eighty percent increase from its initial level. This exceptional financial performance has been reflected in our stock price which has increased nearly four hundred percent over the last five years. I am extremely proud of what we have accomplished together and confident in Jackson's ability to build on this strong foundation. Going forward we will continue to focus on enhancing our core business and we will continue to focus on the future. We will continue to focus on the future.

Expanding opportunities for growth. Investing in innovation. And serving customers with the commitment and care they expect from Jackson. Turning to key financial metrics on slide four, we believe our performance through the first nine months of 2026 positions Jackson to achieve our full year financial targets and reinforces the foundation for achieving our goal of sustainable long-term profitability. Third quarter operating earnings benefited from strong fee income and substantial growth in spread income as we delivered quarterly adjusted operating earnings of $7.55 per diluted share. Combined account value across retail annuities and institutional products exceeded $291 billion, increasing 4% from the prior year quarter, driven by strong growth. and spread product account values. Through the first nine months of the year, adjusted operating earnings increased 20%. We expect our sizable, high-quality, in-force business, increasingly diversified earnings profile, and continued sales momentum to support earnings and cash flow for the foreseeable future. JXN's growth continues to be supported by a strong capital position and robust... capital generation. Statutory capital generation benefits from considerable variable annuity-based contract cash flows, which are supported by rising equity markets, as well as our growing spread product business. At quarter end, total adjusted capital was $5.9 billion, up 5% from last year's third quarter. Even as we funded significant new business growth, our ability

to generate free cash flow and return capital to shareholders remained strong. Through the first nine months of 2026, free cash flow increased 18% to $850 million, while we returned $838 million to shareholders through dividends and share repurchases. We remain committed to a balanced approach to capital management, maintaining our financial strength while funding profitable growth and returning capital to shareholders. Turning to retail annuity sales, momentum accelerated in the third quarter, with record sales exceeding $6.5 billion, up 22% from the prior year quarter. Our diversification efforts are gaining momentum, with nearly 60% of retail annuity sales coming from spread-based products. We remain an industry leader in the RILA market, with nearly $29 billion in RILA assets, and record third quarter RILA sales of $3 billion. We expect continued RILA growth, driven by the June launch of MarketLink Pro 4 and MarketLink Pro Advisory 4. These additions to our RILA suite are the first in the industry to offer an option linked to the Dow Jones Industrial Average. We believe these enhancements provide advisors and their clients with valuable new choices, while building on RILA's compelling combination of growth potential and downside protection. Our fixed and fixed index annuity sales are also advancing our spread product growth and diversification strategy. Over the past 12 months, account values increased 64% to $7.1 billion.

We'll see you in the next video. During the video. JXN Income Assurance, our income focused fixed index annuity, offers a differentiated income benefit that enables advisors to provide clients with a dependable retirement income solution. Looking ahead, we expect PPM's investment expertise and our strategic partnership with TPG to further strengthen our ability to offer competitive spread products. With the collaboration already expanding. our access to attractive investment opportunities and enhancing new money yields. Importantly, total retail annuity net outflows improved for the third consecutive quarter and declined 22% through the first nine months of the year compared with the prior year period. While strong equity markets contributed to higher variable annuity surrenders during the quarter, healthy net inflows across RILA, fixed costs. Fixed annuities and fixed index annuities supported the improving overall net flow trend. Turning to slide five, our broad product portfolio continues to drive growth by expanding our distribution reach and increasing the role of annuities in client portfolios. During the quarter, more advisors sold multiple JXN products, deepening engagement and strengthening our distribution relationships. We... We also maintained our leadership in the advisory channel where RILA, FIA, and Elite Access, our investment-only variable annuity, accounted for approximately 80% of our year-to-date advisory annuity sales. This performance illustrates the strength of our diversified product strategy and our strong distribution relationships. Our RILA franchise continues to broaden our distribution network.

Since... Since last year, we have added nearly 2,500 new advisors and reactivated over 3,500 advisors who had not recently sold a JXN product. Our JXN Income Assurance product is further expanding our distribution network. About 55% of producers selling the product are either new to JXN or recently reactivated. We further strengthened our product portfolio in October. With the launch of JXN Fixed Index Accumulation and JXN Fixed Index Accumulation Advisory. Our accumulation focused FIA offerings. These products deliver significant flexibility and choice with five index options and four crediting methods that can be used in any combination. This launch reflects our continued commitment to providing financial professionals with solutions. They can tailor to their clients' individual needs and objectives. In September, we also launched enhancements to our single premium immediate annuity, including a cost of living adjustment feature. Beyond our innovative annuity portfolio, we provide financial professionals with a solutions-based approach supported by advanced digital capabilities and consistently award-winning service. This recognition reflects the strength of our organization, the trusted relationships we have built with our distribution partners, and the dedication of our associates, whose work delivers meaningful customer outcomes every day. We are proud of that legacy and remain firmly focused on our mission of helping Americans secure their financial futures.

Turning to slide 6, we are excited to announce we have been named the exclusive provider of annuities for AARP members. This program gives us a direct entry point to millions of AARP members and expands our opportunity to reach affluent households that invest without an advisor. We believe the AARP annuity program from Jackson will enhance consumer access to important retirement products by providing AARP members with an AARP members. With a simple direct digital experience to purchase an annuity. Through the program AARP members will have access to a distinct set of Jackson annuity products including certain fixed index and fixed annuities through our new direct to consumer platform. This program combines an integrated digital experience with dedicated Jackson sales and service support. We expect to launch initially in 10 states érence of Bellator, DCCuth, DCCW. Later this month, with national availability targeted for the first half of 2027. This program represents another important step in our growth and diversification strategy, expanding our distribution reach and providing an additional way for consumers to access important retirement products through JXN. We look forward to sharing further details on the program at launch and in the coming quarters. Turning to slide 7, the evolution of our business mix since becoming an independent company demonstrates the growing diversification benefits of JXN's broad product portfolio. At quarter end, spread products and investment-only variable annuities represented more than 40% of our in-force book, reflecting strong growth across our product suite. Our strategic focus remains clear.

To drive growth through continued product innovation and broader distribution, further diversifying sales, and building a more balanced, in-force book. We believe this will lead to better risk-adjusted returns over time. Turning to slide 8 and looking ahead to the full year, we are pleased with our accomplishments and the momentum we have built going into the end of the year. We remain confident in our ability to achieve our free capital generation. target of $1.2 billion and deliver on our capital return to shareholders target range of $900 million to $1.1 billion. Based on our progress to date, we currently expect capital return to be at or above the midpoint of that range. In addition, our holding company liquidity, excluding the proceeds from our second quarter senior debt issuance, is well above our minimum program. Buffer. Importantly, we believe JXN's market presence, operating strength, and capital position provide the foundation for long-term value creation. At this time, I'll turn the call over to Brian.

Thank you, Don. Before moving to results, I want to say how honored I am to step into the CFO role and build on JXN's strong financial foundation. I look forward to maintaining our disciplined approach to finance. Supporting our growth priorities and delivering sustainable value for shareholders. JXN is well positioned for the future with a strong balance sheet, differentiated capabilities, and an experienced management team focused on long-term value creation. With that said, let's turn to slide nine and review our third quarter results. Pre-tax adjusted operating earnings were $612 million or $631 million. excluding notable items. On an X notables basis, earnings increased 24% year-over-year, driven by continued momentum in our spread-based business. Compared with the second quarter, earnings excluding notables declined slightly. Growth in fee-based and spread-based AUM was offset by higher acquisition costs associated with record annuity sales. Spread-based earnings continue to grow, supported by competitive products and are high-quality and conservatively managed investment portfolio. Diversification and disciplined credit management remain central to our approach. Net investment income from our spread-based businesses increased meaningfully year-over-year, reflecting continued growth in spread-based AUM. As these businesses become a larger contributor to JXN's results, we expect to enhance our disclosures to provide greater visibility into key earnings drivers.

PPM's enhanced asset sourcing case capabilities are also allowing us to deploy more new money into select higher yielding asset classes, supporting attractive new money yields and our competitive position in spread-based products. Our strategic partnership with TPG also gained momentum this quarter. The partnership broadened our investment opportunities and further supported new money yields. The strength and profitability of our in-force business is reflected in our strong return profile. Adjusted operating return on equity for the trailing 12 months ended September 2026 was 17.1%, up from 13.6% a year ago. This improvement reflects the resilience and earnings power of our business as we continue to diversify our sales mix and balance sheet with discipline. Turning to slide 10, I'll walk through the notable items that impacted adjusted operating earnings this quarter. Free capital generation, which I'll discuss later, was also a affected by these items. We reported adjusted operating earnings per diluted common share of $7.55. Excluding 24 cents of notable items and normalizing to our 15% tax guidance, adjusted operating earnings per diluted share was $7.67. That represents a 28% increase versus the third quarter of last year, which was driven by strong spread income growth and the benefit of a lower diluted share count from our one. ongoing common share repurchase program. Limited partnership results were below our long-term 10% return assumption, resulting in an unfavorable impact of $0.24 per share. While valuations within the limited partnership portfolio can vary quarter to quarter, we remain confident in the underlying quality and long-term performance of these investments. Our effective tax rate for the quarter was 13.7%, modestly below our 15% guidance.

Turning to slide 11, we will look at the continued growth and diversification of our retail annuities business. We remain number one in traditional variable annuities and a top three provider of RILA. Third quarter sales increased 22% year-over-year, reflecting strong execution across our product portfolio. Total retail sales also increased 11% from the second quarter. The expansion of our wholesale territories is deepening distributor engagement and expected to help. Sustain that momentum. Spread-based products accounted for 58% of sales, reflecting the continued diversification of our business mix. RILA continues to perform exceptionally well. Third quarter sales reached a record $3 billion, up 44% year-over-year. Since launching in 2021, RILA AUM has grown to nearly $29 billion. Momentum also remains strong across our other spread-based products. JXN income assurance. Contributed to total fixed and fixed indexed annuity sales of $796 million, up 79% year-over-year. We expect that our new accumulation FIA and the continued expansion of our TPG partnership position us for further growth and increased long-term earnings from the spread-based business. Turning to net flows. Strong RILA and other spread-based sales generated $3.5 billion of non-variable annuity net inflows. 52% year-over-year and 20% sequentially. Within variable annuities, the all-in surrender rate increased modestly, both sequentially and year-over-year. As expected, strong equity markets continue to influence surrender activity in the enforced block. Importantly, year-to-date separate account returns were 9.3%, generating more than $17 billion of investment gains in variable annuity AUM. Those gains exceeded net outflows by

more than $2 billion. And the resulting account value growth continued to support strong fee income. Advisory sales further demonstrate the breadth of our distribution capabilities. JXN ranks number three in the advisory annuity market, supported by a comprehensive product suite. More than half of third quarter advisory sales came from products other than variable annuities, another indication of the progress we are making in diversifying the business. Finally, institutional product sales totaled $755 million. This reflects strong demand for spread lending products and our disciplined, opportunistic approach to this market. Turning to slide 12, before reviewing the quarterly results, I want to highlight our economic hedging framework, which was strengthened by the formation of Brookree at the end of 2023. Brookree is a Michigan-based captive reinsurer established to support the effective management of variable annuity guarantees on a market-neutral economic basis. including the hedging of both equity and interest rate risk. The structure was approved by a regulator, which regularly reviews Brookree's performance and balance sheet. Brookree is also subject to annual audits and regular stress testing. Brookree was designed with three primary objectives. First, to better align reserves and hedging with the underlying economics of the business. Second, to reduce the need for costly, non-economic hedging. And third, to produce

And third, to reduce the need for costly, non-economic hedging, non-economic hedging, non-economic hedging, non-economic hedging, non-economic hedging. With more consistent and intuitive results for stakeholders. We believe the structure has been highly successful in achieving these objectives. This is particularly important because of a limitation of statutory reserving related to the cash surrender value floor. For a healthy and profitable variable annuity block like Jackson's, heavily weighted towards prudently priced post-global financial crisis vintages, strong earnings can cause statutory reserves to be floored at cash surrender value. In rising equity and or interest rate environments, this can create a mismatch where hedge losses are recognized without a corresponding change in statutory reserves. As a result, the statutory framework can create a disincentive to hedge the underlying economic risk. Prior to brokery, JXN addressed this asymmetry through non-economic hedging expenditures, including the purchase of call options. Brokery addresses this limitation by allowing us to manage these risks on a more economic basis while also supporting more predictable capital generation at JXN National Life. Importantly, brokery was created to facilitate prudent risk management of our long-term variable annuity liabilities, not to create a capital or regulatory advantage. The structure allows us to manage the underlying economic risks over the life of these liabilities through an integrated reserving, hedging, and capital framework with a strong focus

process. on long-term policyholder protection. Consistent with that purpose, the transaction did not generate a day-one capital benefit. At formation, Jackson National Life contributed $700 million of cash and investments to Brookery, reducing its RBC ratio by approximately 80 points. Turning to the structure itself, Brookery currently reinsures our variable annuity guarantees, primarily guaranteed minimum withdrawal benefits and guaranteed minimum death benefits. As well as payout annuities. Consistent with Michigan law, its reserving and capital framework is based on U.S. GAAP with necessary modifications and requires annual asset adequacy testing. JXN National Life executes the hedging on behalf of Brookery, leveraging our established hedging resources and counterparty relationships. JXN National Life settles all external hedge-related payments with counterparties daily, including during periods of significant market price. Volatility. The three-year settlement period under the reinsurance agreement smooths potentially significant hedge gains or losses that can arise in any individual period and was approved by a regulator. Importantly, these are long-duration liabilities supported by a stable guarantee fee stream that extends well beyond the three-year settlement period, while the associated hedge cash flows can occur over much shorter periods. The settlement period, which we monitor,

helps manage that timing difference. Since its formation, brookery has made settlement payments to JXNNL consistent with the original transaction terms. Its capitalization remains well above both our internal risk management target and the regulatory minimum operating capital level. We also regularly stress test brookery's capacity to repay the reinsurance balance. Looking ahead, we will continue to evaluate opportunities to enhance our captive strategy with that. With a continued focus on policyholder protection, economic risk management, and capital efficiency. Consistent with our approach of providing expanded disclosures for brookery annually at year-end, we anticipate providing additional transparency when we report year-end 2026 results. Overall, brookery allows us to prudently manage the long-term economic risks of our variable annuity guarantees, protect policyholders over the long-term, program. And support more consistent hedging outcomes and predictable capital generation. Turning to slide 13, we highlight net hedge results by product and provide a reconciliation from pre-tax adjusted operating earnings to U.S. GAAP pre-tax income attributable to Jackson Financial. As a reminder, we recently enhanced our disclosure of net hedge results to separately present our variable annuity in RILA businesses. This provides greater transparency into our hedging results. and highlights the offsetting equity exposures between VA and RILA. Excluding the impact of implied volatility and market risk benefits, the disclosure also offers insight into the change in equity at Brokery. Importantly, we hedge both VA and RILA independently, with each hedging program focused on managing the economic risks of its respective business. At the enterprise level, however, the equity exposures of the two businesses naturally offset to a significant

So, let's see. This allows us to net those offsetting exposures through internal transactions, with only the residual exposure hedged externally. As a result, a substantial portion of brokerage hedging settlement balance relates to transactions within JXN and does not involve external counterparties. That equity offset is not particularly evident in the third quarter results, which were influenced more by interest rate movements. However, you can see the benefit more clearly in the year-to-date results, at the bottom of the slide. Through the first nine months of the year, approximately $4.1 billion of VA hedge losses were partially offset by approximately $2.2 billion of hedge gains in RILA and FIA. During the quarter, our overall net hedge result was a $479 million gain, excluding the impact of implied volatility on market risk benefits. RILA and FIA generated a $285 million gain, while various annuities generated a $194 million gain, excluding implied volatility. Starting with RILA and FIA, our hedging strategy is focused on economic outcomes rather than JFI GAAP results. The two perspectives can differ meaningfully, so quarterly net hedge gains or losses reported under JFI GAAP may not reflect the underlying economics and should not be viewed in isolation as a measure of hedging effectiveness. We saw that distinction. This quarter, while the JFI GAAP net hedge result was meaningfully positive, the economic hedge result was much closer to neutral, consistent with our objective of managing the underlying economic risk of the business. Turning to variable annuities, higher interest rates drove hedge losses during the quarter, but also benefited the liability side of the equation. Together with guarantee fees, this resulted in positive net hedge results excluding the impact of implied volatility on

market risk benefits. The quarter included an approximately $266 million unfavorable impact from implied volatility on market risk benefits. There are differences between JFI variable annuity results and brokery results that extend beyond implied volatility, including differences in scope and accounting modifications. On a brokery U.S. gap with necessary modifications basis, the quarterly net hedge gain was modestly higher than a JFI variable annuity result. During the quarter, brokery received no capital contributions and made no capital distributions. Overall, these results demonstrate the benefits of our enterprise hedging approach. We independently manage the economic risks of our VA and RILA businesses while also benefiting from the natural offset between their equity exposures and maintaining our focus on more consistent capital outcomes. Turning to slide 14, to slide 14, we'll review our capital generation, free cash flow, and shareholder returns. Third quarter after-tax statutory capital generation was $491 million, supported by strong fee income and continued growth in our spread-based businesses. We believe that statutory capital generation is a clear measure of the underlying earnings power of the business and an important guidepost as we balance investment and profitable growth with capital returns to shareholders. Free capital generation was $281 million after reflecting the capital required to support new business growth across an increasingly diversified sales mix.

The quarter also included an RBC-related headwind associated with trailing 12-month fixed and fixed indexed annuity sales. With the higher level of production now reflected in the full 12-month measurement period, we would expect the magnitude of this headwind to moderate, absent a further meaningful increase. Based on our performance through September, we remain confident in achieving at least $1.2 billion of free capital generation for the full year. Our RBC risk appetite remains at 425%. Our healthy RBC levels over the past several years support sustained free capital generation and reinforce our earn-it-then-pay-it philosophy. Holding company free cash flow was $275 million. We'll see you next time. Up 27% year-over-year and broadly in line with the second quarter after funding expenses and other cash flow items. Strong capital generation and free cash flow supported $291 million of capital returns to common shareholders, a 42% increase on a per-diluted share basis from the prior year quarter. Overall, we continue to generate strong capital while funding significant new business growth and returning capital to shareholders. Turning to slide 15, we'll review JXN's strong capital and liquidity position. Our enforced business remains a significant source of earnings and capital generation. Fee income from our variable annuity-based contracts, combined with continued growth and spread-based earnings, supported solid capital generation during the quarter.

Our economic hedging approach and growing spread block have contributed to a more stable and diversified capital profile at JXN. Consistently, the global annuity-based contracts and investing deals in excess of each of the suppliers, the fund-based contracts and the intermediaries, and the future. We are not Sunday at the end of this period. However, we are not the only one that this is a significant number of financial services, but we are both the small administrations. We would have to pay more attention to government totalmente, Let's go. Instant with our disciplined approach to capital management, Jackson National Life distributed $325 million to the holding company during the third quarter. After accounting for the related impact on deferred tax assets, total adjusted capital ended the quarter at $5.9 billion, and our estimated RBC ratio was 524%, comfortably above our minimum target. These results demonstrate the continued strength and resilience of our balance sheet. At the holding company, we ended the quarter with nearly $1.4 billion in cash and investments, well above our updated minimum liquidity buffer, and providing substantial financial flexibility. Overall, our third quarter results demonstrate our ability to fund growth, return capital shareholders, and maintain a strong and resilient balance sheet. Slide 16 highlights the significant liquidity available across JXN's legal entities. These resources

include our PCAPs, expanded revolving credit facility, and proceeds from the senior debt issuance completed in the second quarter. That issuance included $750 million of senior debt, effectively pre-funding $650 million of debt maturities due in 2027, while adding $100 million of incremental holding company liquidity. We also expanded our revolving credit facility from $1 billion to $1.25 billion. And extended the maturity from 2028 to 2031. At quarter end, JXN Financial Inc. had approximately $4 billion of available liquidity, including holding company cash, highly liquid securities, and our undrawn revolving credit facility. JXN National Life maintained nearly $32 billion of available liquidity, including $6 billion in cash in U.S. Treasury securities, and an additional $23 billion in other... ...highly liquid marketable securities. JXN National Life also has $2.3 billion of additional borrowing capacity through its long-standing federal home loan bank relationship. Our leverage profile also remains among the strongest in our peer group. Total leverage was approximately 23%, excluding accumulated other comprehensive income. Adjusting for the planned retirement of our 2027 maturities, leverage would decline to approximately 18%. Thank you! 1-7-7-7-8-1-8-0-8-1-8-1-8-1-8-1-8-1-7-4-0. 2-7-8-1-8-1-8-1-8-1-8-1-8-1-8-1-6-0. Taken together, our capitalization, liquidity, and leverage provide meaningful financial flexibility across a wide range of market conditions.

Turning to slide 17, we highlight PPM America, our wholly owned asset management subsidiary. PPM's AUM approached $102 billion this quarter, benefiting from growth in JXN's spread-based businesses as well as third-party AUM. PPM. Together with our strategic relationship with TBG, enhances our ability to source attractive investment opportunities and maintain competitive yields across both our retail and institutional spread businesses. We remain highly optimistic about PPM's growth trajectory and its ability to further expand its capabilities. We view PPM as an important strategic differentiator and an increasingly valuable contributor to JXN's long-term growth. Turning to slide 18, we'll review the quality, diversification, and conservative positioning of our investment portfolio. Our disciplined asset liability management framework guides our strategic asset allocation and helps us balance yield, risk, liquidity, and capital efficiency. Our fixed maturity portfolio remains high quality and defensively positioned with a meaningful allocation of highly liquid U.S. Treasuries, which represent approximately 7% of the portfolio. Exposure to below-investment-grade securities remains very limited at just 1% of the portfolio and consists almost entirely of corporate bonds and loans. The portfolio is also well-diversified by asset type. Corporate securities represent roughly 56% of invested assets, complemented by mortgage loans, asset-backed securities, and a modest allocation to private equity through our limited partnership investments.

Our Commercial Mortgage Portfolio remains conservatively underwritten, supported by strong loan-to-value and debt service covers ratios, supporting resilience across market cycles. And importantly, our combined exposure to hyperscaler, data center, and AI investments is less than 2% of our general account and is well-diversified. Overall, our investment approach remains focused on credit quality, diversification, and liquidity, supporting durable earnings while preserving the business. Strength of our balance sheet. Slide 19 provides enhanced disclosures on our private investment exposure. As we noted last quarter, JXN remains underweight in direct lending relative to peers, giving us capacity to invest selectively as we continue to diversify the portfolio. We believe recent market dislocation is creating more compelling entry points relative to more recent vintages. Through our strategic partnership with TPG, we also benefit from deep direct lending expertise, particularly in the lower middle market, where disciplined underwriting and strong covenant protections are central to the investment approach. As of the third quarter, 60% of our private debt portfolio consisted of traditional private placements, with the remainder allocated to infrastructure, asset-backed securities, and credit tenant leases. Overall, our private investment portfolio remains conservatively positioned and supportive

by robust credit oversight. We believe that we have meaningful capacity to selectively deploy capital, supporting our growth and diversification strategy, while maintaining the strength of our balance sheet. I'll now turn the call back to Don. Thank you, Brian. Turning to slide 20, we remain confident in Jackson's outlook, supported by the strength of our business and significant financial flexibility. Over the last five years, we have successfully

navigated volatile markets while pursuing disciplined, profitable growth. Our associates continue to be our greatest strength, and I'm grateful for their dedication and contributions to our success each quarter. At this time, I'll turn the call over to the operator for questions.

We will now begin the question and answer session. If you'd like to ask a question and you've joined via the webinar, please use the raise hand icon.

Which can be found in the black bar at the bottom of the webinar application screen. If you've joined via telephone, please press star nine on your keypad to raise your hand. When your name is called, you'll be prompted to unmute your line and ask your question. If you've joined via phone, please dial star six to unmute your line. Our first question comes from Alex Scott with Barclays. Please unmute to ask your question. Hey, good morning. First one I had for you is.

Yeah, thanks, Don. We have the comprehensive assumption review is in the fourth quarter, and we are still working through that review. There's nothing I can really report specifically at this time. We will provide those details in our year-end earnings. But like Don stated, we do have a very disciplined data-driven process. We have a lot of experience for our own business, and we then supplement that with industry data. benchmarking along the way. And, you know, what we have seen is that the increase in lapses have kind of, you know, kicked up a little bit over the last several years. And so as that data does work its way into our analysis, you know, it would impact our assumption review. But I would note this is similar. We're not going to change our process from what we've done from prior years. And importantly, when we've made the adjustments that we did last year in 2025, we did see an improvement in our unexpected policyholder behavior this year. I also would note that we also saw an increase in our expected policy behavior. It just became more and more accurate as equities were higher again in 2026. We would expect modestly higher lapse rates, and that is what we've seen. But we've been able to, despite that, show lower unexpected policy behavior. Overall, since we don't know the impact at this point in time, I don't want to speculate on the number, but I would say we, you know.

We had a very strong Brookery quarter, as you saw, for the net hedge results. And we're being confident in the overall enterprise from a financial flexibility standpoint.

Got it. That's all. So we'll stay tuned on that. A follow-up question I had is just on the, you know, intercompany settlement agreement between Brookery and Jackson National. And just, you know, the potential timing mismatch is sort of the three years versus, you know, whatever the duration of the MRBs is, you know, how do you plan on managing that? Like, are there any immediate stresses from it? You know, if equities and rates continue to go up, let's say, in a scenario, like what are the levers you would use to potentially, you know, deal with, you know, what? Maybe some people would call it an economic sort of difference between the three-year amortization versus the duration of the MRB.

Hey, Alex, thanks for that question. Maybe before I turn it over to Brian to get into some of the details there, I thought it would just be helpful to give, you know, just a more strategic view of how brookery fits into our overall.

enterprise. Obviously, it's a key part of the JXN enterprise. And if you look back at sort of equity market performance and interest rates since we formed brookery, they have risen meaningfully. The S&P 500 is up about 60% on a price return basis since the beginning of 24. And the 20-year treasury rate, which is kind of the point in the curve that's more relevant for our lives, liabilities is up, you know, nearly 150 basis points. So given the current structure of our hedging program, you know, this market environment has resulted in hedge losses at Brookery, as you've seen. And for those who follow JXN and really kind of understand our economic approach to hedging, you know that this is an environment that can create some liquidity headwind at Brookery. Well, for the overall JXN... It actually is a tailwind for our business. You know, I would also highlight that as equity markets and interest rates decline, as they have done in October, the liquidity position can improve. So the results are very path dependent. But really, whatever the market environment, we expect to be able to manage through those conditions. And the steady stream of guarantee fees that we have at Brookery along with the extended settlement period really give us flexibility to navigate market environments like this one. And, you know, since becoming a public company and since the formation of Brookery, we've taken a number of deliberate steps to strengthen the overall liquidity position for the entire Jackson enterprise. Most recent example of that was our PCAPS transaction. So we have liquidity sources available. And should we need to support Brookery in the future?

We'll take the appropriate actions to ensure its obligations are met. And, you know, our commitment in this area is really unwavering. You know, we'll continue to keep our promises to policyholders and to all of our other stakeholders. So with that sort of high level, you know, kind of strategic view, maybe Brian, you could give a little more color on some of the details.

Yeah, thanks, Don. And I would reiterate, you know, certainly what you said, we feel that Brook. Brookery is an excellent solution to manage the long-term economics. It protects our policyholders in an important way. And the one thing that we really need to think through from, you know, Don talked about, certainly as markets have gone up, interest rates have gone up since the inception of Brookery, that has also been, while we have taken hedge losses, our MRB has improved significantly. The cash flow generation on our base contract at J&L has done quite well. Also, so higher equities, higher interest rates in general are certainly good. For the overall enterprise. And I would note that the brokerage in particular benefits from those significant recurring cash flows. We talked about the $2.8 billion. That has been stable. It has been that $2.8, $2.9 billion range since the inception brokerage, despite some of the elevated lapses that we talked about earlier. So that is something that will be around for a number of years that we would expect. And then the other thing I would note is, as RILA has grown significantly, a large chunk of the... You know, the hedge losses that are actually at brokery are actually internal trades. They're offset at J&L via the RILA hedging that we do on the equity standpoint. So a notable percentage of the re-insurance, outstanding re-insurance balance is, in fact, offset via internal trades.

So if we look at all those resources, we remain confident in our ability to manage those obligations. And we think the financial flexibility of the enterprise is very...

Our next question comes from Ryan Krueger with KBW. Please unmute to ask your question.

And then I guess maybe just a question on the AARP opportunity seems like an interesting one, but also I think it's never. AARP has never had an annuity provider so far. Any way you can help frame how you're thinking about how meaningful this could be to the company over the next few years?

Hey, Ryan, thanks for that question. Sure. So, you know, overall, we see the AARP program as an opportunity to expand really access to JXN's products through a direct-to-consumer channel, you know, and it supports also our growth and diversification strategy, although it's fairly early in the program's development, and it's going to take some time for that to roll out and be fully available nationwide. I'll ask Allison just to provide a little bit more color on the program and how we're thinking about that going forward. Great. Thanks, Don. Yeah, the AARP program is an exclusive program offered from JXN. We'll start in mid November, offering it through 10 states. And then we'll expand to a national launch in the first half of 2027. We will offer a distinct set of annuity products through the AARP annuity program from JXN. It will focus on fixed or spread products initially, with the opportunity to expand into additional products in the future. As Don mentioned, it is a digital focused platform that focuses on the direct-to-consumer marketplace. So we do feel like it's going to be a source of incremental growth for JXN, as well as a new channel for JXN to focus on as we expand our distribution.

Thank you. Your next question comes from Sunit Kamath with Jeffries. Please dial star six to unmute your line.

Good morning, Sunit. So, you know, since formation, if you look at the cumulative fees that Brookery has received, those have. Exceeded our required settlement payments. So the hard assets have increased and, you know, we continually monitor the balance sheet of Brookery. Obviously, the future level of hard assets and our hedge results are going to depend on the path of equity markets and our settlement cash flows. But let me turn it over to Brian to provide a little more information on those dynamics.

Yeah, thanks, Don. Certainly agree. As we've talked about, the hard assets are greater today than we started. At Brooklyn, we capitalized with $700 million. Really, the, you know, and then we talked about the fee stream as well is very strong. That's a really good source of ongoing liquidity going forward. We will provide additional detail at the end of the year, like consistent what we've done the last couple of years. Certainly we'll go through. An equity walkthrough of where brookery has landed and be able to show that level of detail. We feel like we've provided quite a bit of transparency on those specific items. So overall, we are quite pleased with the performance of brookery this past quarter. The economic hedging program is working as expected. We saw high hedge effectiveness really throughout the year. But with the constructive movement in equities and interest rates really this year, we have seen some. From productive movements in brookery, particularly this past quarter. So the equity movement has gone in a positive direction from that standpoint. And we continue to have those steady stream, steady stream, steady free stream going forward. I would note that, you know, once again, when it comes to hard assets, it is very path dependent. As we've seen so far this quarter, you know, interest rates have unwound a decent chunk of what happened in the third quarter. We can't predict what's going to happen for the rest of the year, which is why we look at all.

scenarios, both higher and lower on equities and interest rates, and make sure we're prepared to be able to risk manage across the board. Okay, that's helpful. I guess the second question related is, there seems to be this narrative in the market that I guess regulators are taking a really close look at some of these captive relationships. I realize that yours is onshore as opposed to offshore and is sort of regulated by your primary regulators, so clearly some differences there. But is there anything... that you're hearing from the regulators that, you know, suggest that maybe they would take another look at how you've done or how you've structured Brookery, or is it sort of BAU as you have those conversations? Thanks.

Thanks, Sunit. I'll take that one. So, you know, obviously with the election results, we will have a new incoming governor here in Michigan. We'd like to extend our congratulations to Governor Benson on our win. However, we have a longstanding relationship with the Michigan Department of Insurance and Financial Services. We've been regulated here in Michigan for the last 65 years. So we've worked closely, not only with the current leadership, but prior leadership over the years. And, you know, we established... We established Brook Ray and, as you mentioned, our most recent captive insurer in Michigan, Hickory Ray, under Michigan's very well-established statutory framework for captive companies. And that framework is really designed to support stable reinsurance arrangements in the state. And both captives went through a rigorous review process with substantial engagement with the department. Staff. And I think it's also important to note that neither captive was established under a permitted practice. It's really a matter of the captive regulation and law in the state of Michigan, which is similar to many other states. So we're, you know, we stand ready to work with, you know, the incoming governor and her administration. And we believe our... captive insurers were properly authorized and we fully comply with Michigan law. We don't expect any change in the administration to require any changes to our captives.

Okay, that's helpful. Thanks. I got an helpful one.

Thank you. This concludes our Q&A session. I'll now turn the call back to Don Cummings for closing remarks.

Well, thank you, everyone, for your questions. and for joining us today. We're pleased with our progress and we remain focused on executing our strategy and delivering for our shareholders, customers and partners. We appreciate your continued interest in JXN and we look forward to speaking with you again next quarter. Thank you. The call has concluded. Thank you for joining. You may now disconnect.