Jackson Financial Inc. (NYSE:JXN) Q1 2024 Earnings Call Transcript

Suneet Kamath : Got it. And then just one last one for Marcia. So you talked about the capital efficiency between RILA and the traditional VA. We had another rider to talk about that capital efficiency going away as the RILA block has gotten to a particular size. I’m assuming you’re way away from that given the relative sizes of the business but just wanted to confirm that and if there’s any sort of rule of thumb in terms of when you might start to see some of that efficiency get eroded? Thanks.

Marcia Wadsten: Sure. Yes. We did speak to that kind of efficiency from an economic perspective and the ability that, that has to reduce our net hedging needs from an equity perspective given that offset from a delta perspective, and I think we shared last quarter that, that offset from RILA was in the 14% range. And I can say that it has increased with the additional sales over the first quarter to just over 20%. So we’re certainly not — we don’t have that 100% offset or anything we’ve got a ways to go before that. But I would point out that since we have the Brooke Re structure in place and our VA guarantees are now seated to Brooke Re following the modified reporting basis, we don’t have that same offset in VM-21. We have the economic offset, which is evident in the efficiencies we get from a hedging perspective, but we don’t have the VM-21 offset, so we’re not necessarily expecting we would see a change in how our capital would be impacted if we were to reach full offset, a full parity, I guess, between the RILA and the VA book.

Suneet Kamath : Got it. And then just one last one, if I could. What is the typical capital charge for RILA? I don’t know if there’s a rule of thumb you could share, but that would be helpful. Thanks.

Marcia Wadsten: Maybe 5%, probably is just kind of an approximate off the top of our head here.

Suneet Kamath : Okay. Thanks. Good luck, Marcia.

Marcia Wadsten: Thank you.

Operator: There are no further questions waiting at this time. I would like to turn the call over to Laura Prieskorn, the CEO, for final remarks.

Laura Prieskorn : Thank you. We appreciate you joining us today, and we look forward to speaking with you again soon. Take care.

Operator: That concludes the Jackson Financial, Inc. first quarter 2024 earnings call. Thank you for your participation, and enjoy the rest of your day.