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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-26 · 336 added, 268 removed, 1192 unchanged (34% of the section changed)

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(“Jackson Financial” or “JFI”), along with its subsidiaries (collectively, the “Company,” which also may be referred to as “we,” “our” or “us”), is a financial services company.

Jackson Financial, domiciled in the state of Delaware, United States (“U.S.”), previously was a subsidiary of Prudential plc (“Prudential”), London, England and was the holding company for Prudential’s U.S.

On September 13, 2021, the Company demerged from Prudential (the "Demerger").

Jackson Financial’s primary operating subsidiary, Jackson National Life Insurance Company ("Jackson"), is licensed to sell group and individual annuity products (including immediate, registered index-linked, deferred fixed, fixed index, fixed and variable annuities), and various protection products, primarily whole life, universal life, variable universal life and term life insurance products in all 50 states and the District of Columbia.

Jackson Financial, domiciled in the state of Delaware, United States (“U.S.”), became an independent public company on September 13, 2021.

Jackson National Life Insurance Company ("Jackson") is licensed to sell group and individual annuity products (including immediate, registered index-linked, deferred fixed, fixed index, fixed and variable annuities), and various protection products, primarily whole life, universal life, variable universal life and term life insurance products, in all 50 states and the District of Columbia.

Executive Summary

We help Americans grow and protect their retirement savings and income to enable them to pursue financial freedom for life.

We help Americans in the U.S.

grow and protect their retirement savings and income to secure their financial future.

We believe that we are uniquely positioned in our markets because of our differentiated products, well-known brand and disciplined risk management.

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GAAP") market risk benefit liabilities as market conditions change from period to period.

Our core dynamic hedging program seeks to offset changes in the economic liability associated with variable annuity guaranteed benefits due to equity market and interest rate movements, while our macro hedging program seeks to provide additional liquidity and statutory capital protection as needed.

Our core dynamic hedging program seeks to offset impacts of equity market and interest rate movements on the economic liabilities associated with variable annuity guaranteed benefits and with annuities subject to index interest crediting (RILA and FIA), while our macro hedging program seeks to provide additional liquidity and statutory capital protection as needed.

As a result, the changes in the fair value of the derivatives used as part of our overall hedging program are not expected to match the movements in the market risk benefit liabilities resulting in volatility from changes in fair value recorded to net income.

Accordingly, we evaluate and manage the performance of our business using Adjusted Operating Earnings, a non-GAAP financial measure that reduces the impact of market volatility by excluding changes in fair value of freestanding and embedded derivative instruments, market risk benefits and other items.

Accordingly, we evaluate and manage the performance of our business using Adjusted Operating Earnings, a non-GAAP financial measure, which reduces the impact of market volatility by excluding changes in fair value of freestanding and embedded derivative instruments, market risk benefits and other items.

See “Non-GAAP Financial Measures” below for information regarding our non-GAAP financial measures and reconciliations to the most comparable U.S.

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Executive Summary

We manage our business through three segments:

We manage our business through three reportable segments:

Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks.

We report in Corporate and Other activities and items that are not included in those three segments, including the results of PPM Holdings, Inc., the parent holding company of PPM America Inc.

We report in Corporate and Other items that are not included in those three segments, including the results of PPM Holdings, Inc., the parent holding company of PPM America Inc.

("PPM") that manages the majority of our general account investment portfolio.

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(in millions, except percentages)

Operating Metrics:

Total Sales $ 23,211 $ 19,849

Assets Under Management ("AUM") 351,059 324,718

Income Metrics:

Net income (loss) attributable to Jackson Financial Inc.

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Adjusted Operating Earnings (1)

Capital Returned to Common Shareholders 631 464

Return on Equity ("ROE") Attributable to Common Shareholders (0.2) % 9.4 %

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14.7 % 12.9 %

Capital Metrics:

Amount of common shares repurchased under share repurchase program 634 415

Dividends on common shares 228 216

Jackson Financial, Inc.

Net cash provided by operating activities (Parent Company Only) 12 51

Free cash flow (1)

Jackson statutory risk-based capital ratio (2)

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• Capital Returned to Common Shareholders:

Since January 1, 2024 through December 31, 2024, we have returned $631 million to our common shareholders, consisting of $216 million in dividends and $415 million in common share repurchases.

Our capital return target for common shareholders for 2025 is $700-$800 million.

During 2025, we returned $862 million to our common shareholders consisting of $228 million in dividends and $634 million in common share repurchases.

Our capital return target for common shareholders for 2026 is $900 million - $1.1 billion.

Share repurchases, net of issuances for our share-based compensation, have reduced our outstanding shares of common stock from 73,380,643 at December 31, 2024 to 66,825,632 at December 31, 2025.

Financial Statement and Supplementary Data — Note 24 - Equity of the Notes to Consolidated Financial Statements for further information on our share repurchases.

Financial Statement and Supplementary Data — Note 23 - Equity of the Notes to Consolidated Financial Statements for further information on our share repurchases and Note 25 – Subsequent Events for information regarding a first quarter 2026 share issuance.

• Free Capital Generation and Free Cash Flow:

◦ Our free capital generation during 2024 exceeded $1 billion.

◦ Our free capital generation during 2025 was $1.4 billion, meeting our expectation to exceed $1 billion in 2025, under normal market conditions.

Free capital generation represents Jackson’s aggregate statutory basis after-tax income from operations, realized gains (losses), unrealized gains (losses), and other surplus adjustments, adjusted for the change in Company Action Level required capital (CAL) for Jackson calibrated to a 425% RBC ratio.

We expect free capital generation in 2025 to exceed $1 billion, under normal market conditions.

As explained below under “Liquidity and Capital Resources – Holding Company Liquidity” and “- Distributions from Our Insurance Subsidiaries,” the payment of dividends or distributions from our capital generation is limited by applicable laws and regulations.

We expect free capital generation in 2026 to be at or above $1.2 billion, assuming 5% equity market total return and rates following the year-end forward curve.

As explained below under “Liquidity and Capital Resources – Holding Company Liquidity” and “-

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Executive Summary

Distributions from Our Insurance Subsidiaries,” the payment of dividends or distributions from our capital generation is limited by applicable laws and regulations.

◦ The free cash flow at Jackson Financial (Parent Company only) during 2025 was $838 million.

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• Brooke Life Reinsurance Company (“Brooke Re”):

During the first quarter of 2024, Jackson entered into a 100% coinsurance with funds withheld reinsurance transaction with Brooke Re with all economics of the transaction

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Executive Summary

effective as of January 1, 2024.

Jackson and Brooke Re are both direct subsidiaries of Brooke Life.

During the first quarter of 2024, Jackson entered into a 100% coinsurance with funds withheld reinsurance transaction with Brooke Re with all economics of the transaction effective as of January 1, 2024.

The transaction primarily provides for the cession from Jackson to Brooke Re of liabilities associated with certain guaranteed benefit riders under variable annuity contracts and similar products of Jackson (“market risk benefits”), both in-force on the transaction effective date and written in the future ( i.e.

, on a “flow” basis) as well as related future fees, claims and other benefits, and maintenance expenses in exchange for a ceding commission for the in-force business.

, on a “flow” basis) as well as related future fees, claims and other benefits, and maintenance expenses in exchange for a $1.2 billion ceding commission for the in-force business.

Jackson retains the variable annuity base contract, the annuity contract administration of the ceded business, and responsibility for investment management of the assets in the funds withheld account supporting the ceded liabilities.

Brooke Re recorded a ceding commission of approximately $1.2 billion to Jackson in connection with the execution of the reinsurance transaction.

The reinsurance transaction eliminates upon consolidation at JFI.

Holding company liquidity at JFI was not impacted by the transaction.

Brooke Re is a Michigan captive insurer regulated by the Michigan Department of Insurance and Financial Services and created in the first quarter of 2024 for the express purpose of serving as the counterparty to the reinsurance transaction with Jackson described above.

Brooke Re is a Michigan captive insurer regulated by the Michigan Department of Insurance and Financial Services and created for the express purpose of serving as the counterparty to the reinsurance transaction with Jackson described above.

Brooke Re was capitalized with assets contributed from Brooke Life of approximately $1.9 billion originating from Jackson as a return of capital to Brooke Life.

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GAAP approach for regulatory reporting purposes primarily related to market risk benefits, with the intent to increase alignment between assets and liabilities in response to changes in economic factors.

The modifications include a fixed, long-term volatility assumption and adjustments to discount rates, guarantee fees and administrative expenses.

The transaction and related modified U.S.

GAAP approach mitigate the impact of the cash surrender value floor on Jackson’s total adjusted capital, statutory required capital, and risk-based capital ("RBC") ratio and enables more efficient economic hedging of the underlying risks of Jackson’s business.

GAAP approach enable us to largely moderate the impact of the cash surrender value floor on Jackson’s total adjusted capital, statutory required capital, and RBC ratio and enable more efficient economic hedging of the underlying risks of Jackson’s business.

This outcome serves the interests of policyholders by protecting statutory capital through diminished non-economic hedging and related costs.

Overall, this transaction allows us to optimize our hedging, stabilize capital generation, and produce more predictable financial results going forward.

• Long-term Strategic Partnership with TPG Inc ("TPG") and formation of Hickory Brooke Reinsurance Company (“Hickory Re”):

On January 6, 2026, Jackson announced that it entered an agreement providing for a long-term strategic partnership with TPG, combining the strength of Jackson’s annuity product expertise and broad distribution network with TPG’s best-in-class, scaled private credit platform.

The partnership aims to expand Jackson’s spread-based product sales and to provide flexibility for future innovative insurance solutions.

The benefits of this strategic partnership include increased opportunities for new business and earnings diversification, enhanced profitability and greater long-term value for Jackson stakeholders.

Upon the transaction closing on February 11 2026, subsidiaries and affiliates of Jackson Financial and TPG entered into a non-exclusive investment management arrangements with a 10-year initial term with automatic 1-year renewals through year 15, subject to various termination provisions, with TPG providing Investment Grade Asset Based Finance and Direct Lending investment capabilities to complement the asset management capabilities of PPM America, Inc.

("PPM"), a Jackson subsidiary.

The partnership is expected to strengthen investment capabilities within Jackson’s general account with a focus on maintaining a well-diversified investment strategy that appropriately balances risk and returns to support annuity product sales in various market environments.

PPM will continue to manage the majority of Jackson’s general account and both Jackson and PPM will retain oversight of Jackson’s investment portfolio.

The combination of PPM and TPG’s complementary investment capabilities is expected to enhance Jackson’s profitability and competitive position.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Executive Summary

As part of the closing, TPG Operating Group II, L.P.

("TPG Partnership") acquired an approximate 6.5% equity stake for $500 million in Jackson Financial consisting of 4,715,554 shares of JFI common stock.

Additionally, TPG issued to Jackson Brooke LLC ("JBLLC"), a wholly owned, indirect subsidiary of Jackson Financial, $150 million equity stake in TPG representing 2,279,109 shares of TPG common stock.

Under the terms of the agreement, TPG Partnership and JBLLC have agreed to certain limitations on their ability to divest their respective ownership stakes over time.

During the fourth quarter of 2025, Jackson entered into a reinsurance agreement with Hickory Re, on a quota-share coinsurance basis on certain fixed annuities and fixed index annuities issued by Jackson, including the annuitization of these contracts, with all economics of the transaction effective as of December 1, 2025.

In consideration for the ceded contracts, Jackson transferred to Hickory Re an initial reinsurance premium consisting of assets with a market value equal to the estimated statutory reserve amount of the ceded contracts in the amount of $1.2 billion.

In addition, Hickory Re, will reinsure new sales by Jackson of fixed annuities and fixed index annuities.

The reinsurance transaction eliminates upon consolidation at JFI.

Hickory Re is a Michigan captive insurer regulated by the Michigan Department of Insurance and Financial Services and was capitalized with a $150 million capital contribution in excess cash from Jackson Financial.

The $500 million received at the close of the transaction, from TPG’s investment in Jackson Financial, was used to make a further capital contribution to Hickory Re.

Hickory Re has been established to serve as a capital-efficient way to accelerate further sales growth of Jackson’s fixed and fixed index annuity products as we grow our spread-based business.

For regulatory reporting purposes, Hickory Re measures the liabilities for assumed contracts using a modified U.S.

GAAP methodology which is intended to increase alignment between assets and liabilities in response to changes in economic factors.

The combination of these transactions is expected to increase Jackson’s future profitability, general account asset growth and capital generation, supporting growth in free cash flows and capital return to shareholders.

• 2025 Annual Actuarial Assumption Updates and Model Enhancements:

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Total assumption review impact on Pretax Income (Loss) $ (342) $ (445) $ (466)

The following table reflects the impacts from our annual assumption review to segment Pretax Adjusted Operating Earnings for the periods presented:

Part II | Item 7.

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Executive Summary

The following table reflects the impacts from our annual assumption review to segment Pretax Adjusted Operating Earnings for the periods presented:

Years Ended December 31,

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Variable annuities (1)

$ 10,853 $ 10,561 $ 9,540

RILA 6,926 5,674 2,890

Fixed Index Annuities 181 210 126

Fixed Annuities 1,084 1,433 193

1,433 193 162

Fixed Index Annuities 816 181 210

Total Retail Annuity Sales 19,679 17,849 12,833

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Total Sales $ 23,211 $ 19,849 $ 13,898

(1) Includes payout annuities

Higher retail annuity sales for the year ended December 31, 2024, were primarily due to increased RILA and fixed annuity sales in 2024.

Sales in the fixed annuity market, particularly in the third quarter 2024, were robust as consumers looked to lock in crediting rates during a period with declining interest rates.

While we expect our distribution efforts to continue to deliver higher levels of fixed annuity sales going forward, we expect near-term volumes will be below third quarter 2024 levels.

(1) Excludes certain internal exchanges.

Higher retail annuity sales for the year ended December 31, 2025, were primarily due to increased RILA and fixed index annuity sales.

Sales of our fixed annuities remained strong as PPM added capabilities during 2025 to source higher yielding assets supporting our spread based products.

In addition, sales of our institutional products were higher for the year ended December 31, 2025, reflecting our opportunistic approach to this business, which depends on both the risk-adjusted return on investment opportunities available and the prevailing cost of funding required by purchasers.

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Account Value

Account value ("AV") generally equals the account value of our variable annuities, RILA, fixed index annuities, fixed annuities, interest sensitive life, and institutional products.

Account value ("AV") generally refers to the account value of our variable annuities, RILA, fixed annuities, fixed index annuities, interest sensitive life, and institutional products.

It reflects the total amount of customer invested assets that have accumulated within a respective product and equals cumulative customer contributions, which includes gross deposits or premiums, plus accrued credited interest plus or minus the impact of equity market movements, as applicable, less withdrawals and various fees.

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RILA 20,282 11,685

Fixed Index Annuity (1)

Fixed Annuity (1)

Fixed Index Annuity (1)

Total Fixed & Fixed Index Annuity Account Value (1)

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RILA 6,527 5,481 2,820

Fixed Index Annuity (1)

Fixed Annuity (1)

870 1,302 (11)

Fixed Index Annuity (1)

Payout Annuity (1)

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(10,839) (11,744) (6,338)

Net flows ceded to Athene (3,830) (4,063) (3,182)

Net flows ceded (2,723) (3,830) (4,063)

Total Retail Annuities Net Flows, gross of reinsurance (13,562) (15,574) (10,401)

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(277) (309) (273)

Total Net Flows (1)

$ (9,605) $ (12,323) $ (7,596)

(1) Net of reinsurance

Net flows, net of reinsurance, decreased for the year ended December 31, 2024, compared to the year ended December 31, 2023, driven by increased variable annuity surrenders and withdrawals due to some mature policies from higher sales years coming out of their surrender charge period, along with higher surrenders as guarantee benefits are less in the money during times of strong equity market performance.

Net flows, net of reinsurance, improved for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Improved net flows for the year ended December 31, 2025 were primarily driven by increased RILA, fixed index annuity, and institutional sales.

Elevated variable annuity surrenders and withdrawals were driven by mature policies from higher sales years coming out of their surrender charge period, along with higher surrenders as guaranteed benefits are less in the money during times of strong equity market performance.

The more recent environment of higher interest rates and attractive annuity alternatives, such as RILA, combined with Jackson’s seasoned “out-of-the-money” book heightens exchange activity for us and the industry.

The decrease in variable annuity net flows was partially offset by increased RILA and fixed annuity sales.

Variable annuity net flows were more than offset by an increase in AUM, as defined below, due to market performance in 2024.

Part II | Item 7.

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Key Operating Measures

Benefit base refers to a notional amount that represents the value of a customer’s guaranteed benefit and, therefore, may be a different value from the invested assets in a customer’s account value.

Benefit base refers to a notional amount representing the value of a customer’s guaranteed benefit and, therefore, may be a different value from the invested assets in that customer’s account value.

The benefit base may be used to calculate the fees for a customer’s guaranteed benefits within an annuity contract.

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AUM, or assets under management, includes:

(i) investment assets managed by one of our subsidiaries, PPM, including our investment portfolio (but excluding assets held in funds withheld accounts for reinsurance transactions) and third-party assets (including our former parent and its affiliates) and (ii) the separate account investment assets of our Retail Annuities segment managed and administered by another subsidiary, JNAM.

(i) investment assets managed by one of our subsidiaries, PPM, including our investment portfolio (but excluding assets held in funds withheld accounts for reinsurance transactions) and assets of other institutional clients and (ii) the separate account investment assets of our Retail Annuities segment managed and administered by another Company subsidiary, JNAM.

Total AUM reflects exclusions between segments to avoid double counting.

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Total AUM $ 351,059 $ 324,718

Total AUM increased for the year ended December 31, 2024, compared to the year ended December 31, 2023, driven primarily by an increase in separate account balances managed by JNAM due to positive equity market returns during the year.

Sales of RILA, fixed and fixed index annuities, and institutional products, along with a focus on growing its institutional client assets, contributed to the increase in PPM AUM.

The increase in JNAM AUM primarily reflects favorable equity market performance.

Part II | Item 7.

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Monetary and fiscal policy in the U.S., or similar actions in foreign nations, could result in increased volatility in financial markets, including interest rates, currencies and equity markets, and could impact our business in both the short- and medium-term.

Government actions, including responses to future pandemics, civil unrest, tariffs, sanctions or other barriers to international trade, and the effects that these or other government events could have on levels of U.S.

Government actions, including tariffs, sanctions or other barriers to international trade, restructuring of government services, responses to future pandemics, civil unrest, and geographic conflicts, and the effects that these or other government events could have on levels of U.S.

economic activity, could also impact our business through any of their individual impacts on consumers’ behavior or on financial markets.

In the short- to medium-term, the potential for increased volatility could pressure sales and reduce demand for our products as consumers consider purchasing alternative products to meet their objectives.

In the short- to medium-term, increased volatility could pressure sales and reduce demand for our products as consumers consider purchasing alternative products to meet their objectives.

Our financial performance can be adversely affected by market volatility and equity market declines if fees assessed on the account value of our annuities fluctuate, hedging costs increase, or revenues decline due to reduced sales and increased outflows.

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Our financial performance is impacted by equity market performance.

On our variable annuities, the fees we earn that are not associated with guaranteed benefits are mainly based on the account value, which changes with equity market levels.

In addition, our hedges could be less effective in periods of large directional movements, or we could experience more frequent or more costly rebalancing in periods of high volatility, which would lead to adverse performance versus our hedge targets and increased hedging costs.

Further, we also are exposed to basis risk, which results from our inability to purchase or sell hedge assets whose performance strongly correlates to the performance of the funds into which customers allocate their assets.

We make available to customers funds where we believe we can transact in sufficiently correlated hedge assets, yet we anticipate some variance in the performance of our hedge assets and customer funds.

• Variable Annuity Fees:

Fees we earn that are not associated with guaranteed benefits are mainly based on the account value, which increases as equity market levels increase.

• Index Interest Crediting on RILA and FIA Contracts:

RILA and FIA products feature a crediting rate formulaically linked to the performance of an external equity index.

The interest credited to the contract increases as equity market levels increase.

• Hedge Effectiveness in Face of Volatility:

Our hedges could be less effective in periods of large directional movements, or we could experience more frequent or more costly rebalancing in periods of high volatility.

This could lead to adverse performance versus our hedge targets and increased hedging costs.

• Basis Risk:

We are exposed to basis risk, which results from our inability to purchase or sell hedge assets whose performance fully correlates to the performance of the funds into which customers allocate their assets.

This variance may result in our hedge assets outperforming or underperforming the customer assets they are intended to match.

This variance may be exacerbated during periods of high volatility, leading to a mismatch in our hedge results relative to our hedge targets and U.S.

This variance may be exacerbated during periods of high volatility, leading to a mismatch in our hedge results relative to our hedge targets, and potentially an adverse effect on our U.S.

GAAP results.

With the execution of the Brooke Re transaction in the first quarter of 2024, we are now able to largely moderate the impact of the cash surrender value floor going forward.

In the past, our statutory total adjusted capital ("TAC") has been negatively impacted by rising equity markets due to minimum required reserving levels (i.e., the cash surrender value floor) when reserve releases are limited and unable to offset equity hedging losses.

The risk-based capital, or RBC, ratio increased or decreased depending on the interaction between movements in TAC and movements in statutory required capital (the company action level, or "CAL”).

Interest Rate Environment

The interest rate environment has affected, and will continue to affect, our business and financial performance for the following reasons:

• Periods of rising interest rates impact investment-related activity, including investment income returns, net investment spread results, new money rates, mortgage loan prepayments, and bond redemptions .

Rising interest rates also impact the hedging results of our variable annuity business as the market values of interest rate hedges decline, thereby driving hedging losses.

We would expect lower hedging costs and reduced levels of hedging going forward after such an increase in rates.

Further, we expect near-term hedging losses from rising rates may be more than offset by changes in the fair value of the related guaranteed benefit liabilities, which are reduced with an increase in interest rates.

• Our hedges could be less effective in periods of large directional interest rate movements, or we could experience more frequent or more costly rebalancing in periods of high interest rate volatility.

This could lead to adverse performance versus our hedge targets and increased hedging costs.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Macroeconomic, Industry and Regulatory Trends

• Interest rate increases also expose us to disintermediation risk, where higher rates make currently sold fixed annuity products more attractive while simultaneously reducing the market value of assets backing our liabilities.

This creates an incentive for our customers to lapse their products in an environment where selling assets causes us to realize losses.

• With the execution of the Brooke Re transaction in the first quarter of 2024, we are now able to largely moderate the impact of the cash surrender value floor going forward.

In the past, our statutory TAC may have been negatively impacted by rising interest rates due to minimum required reserving levels (i.e., the cash surrender value floor) when reserve releases are limited and unable to offset interest rate hedging losses.

The RBC ratio increased or decreased depending on the interaction between movements in TAC and movements in CAL.

• Pricing actions we take in response to decreasing interest rates may reduce the attractiveness of crediting rates, guaranteed benefits, and other product features.

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If earnings on our investment portfolio decline, those GMICRs may result in net investment spread compression that negatively impacts earnings.

Many of our annuities have GMICRs that reset at contractually specified times after issue, subject to a contractually specified minimum GMICR.

Many of our annuities have GMICRs that reset at contractually specified times after issue, subject to a contractually specified MICR.

In a rising interest rate environment, these GMICRs can increase over time.

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When policies have comparatively high GMICRs, in a subsequent low interest rate environment more customers are expected to hold on to their policies, which may result in lower lapses than previously expected.

Rising interest rates also impact the hedging results of our variable annuity business as the market values of interest rate hedges decline, thereby driving hedging losses.

This creates an incentive for our customers to lapse their products in an environment where selling assets causes us to realize losses.

• Additionally, rising interest rates decrease the value of bond funds held by variable annuity clients.

This in turn decreases the volume of fees we collect based on the account value and increases the value of any guaranteed benefits.

• Increasing interest rates also increase the cash surrender values of some of our RILAs.

This increases the amount of regulatory reserves that our insurance subsidiaries are required to hold, decreasing regulatory surplus, which could adversely affect our insurance subsidiaries' ability to pay dividends.

Credit Market Environment

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Conversely, as credit spreads tighten, the fair value of our existing investment portfolio generally increases, and the yield available on new investment purchases decreases.

While changing credit spreads impact the fair value of our investment portfolio, this revaluation is generally reflected in our accumulated other comprehensive income, or AOCI.

The revaluation will impact net income for realized gains or losses from the sale of securities, the change in fair value of trading securities or securities carried at fair value under the fair value election, or potential changes in the allowance for credit loss ("ACL").

While changing credit spreads impact the fair value of our investment portfolio, this revaluation is generally reflected in our accumulated other comprehensive income, or accumulated other comprehensive income ("AOCI").

The revaluation will impact net income in the cases of realized gains or losses from the sale of securities, changes in fair value of trading securities or securities carried at fair value under the fair value election, or potential changes in the allowance for credit loss ("ACL").

In addition, if credit conditions deteriorate due to a recession or other negative credit events in capital markets, we could experience an increase in defaults and other-than-temporary-impairments (“OTTI”).

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Macroeconomic, Industry and Regulatory Trends

OTTI in our underlying investments would reduce our insurance company subsidiaries' regulatory capital.

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As such, significant credit rating downgrades along with elevated defaults and OTTI losses would negatively impact our RBC ratio, which could impact available dividends from our insurance subsidiaries.

Additionally, widening credit spreads decrease the value of bond funds held by variable annuity clients.

This in turn decreases the volume of fees we collect based on the account value and increases the value of any guaranteed benefits.

With the execution of the Brooke Re transaction in the first quarter of 2024, we are now able to largely moderate the impact of the cash surrender value floor going forward.

In the past, our statutory total adjusted capital ("TAC") has been negatively impacted by rising equity markets or rising interest rates due to minimum required reserving levels ( i.e.

, the cash surrender value floor) when reserve releases are limited and unable to offset equity or interest rate hedging losses.

The risk-based capital, or RBC, ratio increased or decreased depending on the interaction between movements in TAC and movements in statutory required capital (the company action level, or "CAL”).

See “Recent Events of Note” above for more information regarding Brooke Re.

Consumer Behavior

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We believe our products are well-positioned to meet this increasing consumer demand.

However, consumer behavior may be impacted by increased economic uncertainty, unemployment rates, declining equity markets, significant changes in interest rates and increased volatility of financial markets.

In recent years, we have introduced new products to better address changes in consumer demand and targeted distribution channels that meet changes in consumer preferences.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Macroeconomic, Industry and Regulatory Trends

However, consumer behavior may be impacted by increased economic uncertainty, unemployment rates, inflation rates, declining equity markets, significant changes in interest rates and increased volatility of financial markets.

In recent years, we have introduced or reintroduced products, such as RILA or fixed annuities, to better address changes in consumer demand and targeted distribution channels that meet changes in consumer preferences.

We expect demographic trends in the U.S.

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We believe we are well-positioned to capture the increased demand generated by these demographic trends.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Macroeconomic, Industry and Regulatory Trends

Regulatory Policy

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Department of Labor Fiduciary Advice Rule

See Part I, Item I Business—Regulation—"Federal Initiatives Impacting Insurance Companies—Department of Labor’s Fiduciary Advice Rule" for a discussion of the 2024 Fiduciary Advice Rule.

In April 2024, the Department of Labor (the "DOL") revised the definition of “fiduciary” and related Prohibited Transaction Exemptions ("PTE") (the “2024 Fiduciary Advice Rule”), redefining what constitutes fiduciary “investment advice” to Employee Retirement Income Security Act ("ERISA") plans and individual retirement accounts ("IRAs").

See Part I, Business – Regulation – “Federal Initiatives Impacting Insurance Companies – Department of Labor’s Fiduciary Advice Rule” for more information regarding the 2024 Fiduciary Advice Rule.

The 2024 Fiduciary Advice Rule is currently being challenged in two separate litigation matters and the DOL has been stayed from enforcing the rule.

In these cases, it does not appear that the government will ultimately oppose the relief sought by the plaintiffs, making it likely that the 2024 Fiduciary Advice rule will be permanently vacated.

While we cannot predict the final rule’s impact, it could have an adverse effect on sales of annuities through our distribution partners and result in increased compliance costs to Jackson.

Legislative Reforms

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These non-GAAP financial measures should be considered supplementary to our results of operations and financial condition that are presented in accordance with U.S.

GAAP and should not be viewed as a substitute for the U.S.

GAAP financial measures.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures.

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Comprised of:

(i) realized investment gains and losses associated with the periodic sales or disposals of securities, excluding those held within our trading portfolio, and (ii) impairments of securities, after adjustment for the non-credit component of the impairment charges.

(i) realized investment gains and losses associated with the periodic sales or disposals of securities, excluding those held within our trading portfolio;

(ii) impairments of securities, after adjustment for the non-credit component of the impairment charges;

and (iii) foreign currency gain or loss on foreign denominated funding agreements and associated cross-currency swaps.

Change in Value of Funds Withheld Embedded Derivative and Net Investment Income on Funds Withheld Assets:

(i) the change in fair value of funds withheld embedded derivatives, and (ii) net investment income on funds withheld assets related to funds withheld reinsurance transactions.

(i) the change in fair value of funds withheld embedded derivatives;

and (ii) net investment income on funds withheld assets related to funds withheld reinsurance transactions.

Other Items :

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(i) the impact of investments that are consolidated in our financial statements due to U.S.

GAAP accounting requirements, such as our investments in collateralized loan obligations (CLOs), but for which the consolidation effects are not consistent with our economic interest or exposure to those entities, and (ii) one-time or other non-recurring items, such as costs relating to our separation from Prudential.

GAAP accounting requirements, such as our investments in collateralized loan obligations ("CLOs"), but for which the consolidation effects are not consistent with our economic interest or exposure to those entities;

(ii) impacts from derivatives not included in Net Hedging Results or Net Realized Investment Gains or Losses (see 1.

above), excluding earned income from periodic settlements and changes in settlement accruals on cross-currency swaps;

and (iii) one-time or other non-recurring items.

Operating income taxes are calculated using the prevailing corporate federal income tax rate of 21% while taking into account any items recognized differently in our financial statements and federal income tax returns, including the dividends received deduction and other tax credits.

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We exclude AOCI attributable to Jackson Financial from Adjusted Book Value Attributable to Common Shareholders because our invested assets are generally invested to closely match the duration of our liabilities, which are longer duration in nature, and therefore we believe period-to-period fair market value fluctuations in AOCI to be inconsistent with this objective.

We believe excluding AOCI attributable to Jackson Financial is more useful to investors in analyzing trends in our business.

We believe excluding AOCI attributable to Jackson Financial is more useful to investors in analyzing trends in our business because it removes those short-term fluctuations.

Changes in AOCI within the funds withheld account related to the Athene Reinsurance Transaction offset the related non-operating earnings from the Athene Reinsurance Transaction resulting in a minimal net impact on Adjusted Book Value of Jackson Financial.

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(Parent Company only) net cash provided by (used in) operating activities less preferred stock dividends and capital contributions to PPM or other subsidiaries, plus the return of capital from subsidiaries.

Free cash flow should not be used as a substitute for Jackson Financial’s net cash provided by (used in) operating activities in accordance with U.S.

However, we believe these adjustments are useful to gaining an understanding of our overall available cash flow at Jackson Financial for return of capital to common shareholders or other corporate initiatives.

Free cash flow should not be used as a substitute for Jackson Financial’s (Parent Company only) net cash provided by (used in) operating activities calculated in accordance with U.S.

Years Ended December 31,

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Dividends and distributions to parent (1)

$ 1,115 $ 875

Capital contributed to Hickory Re (150) —

Jackson Financial expenses and other, net (127) (108)

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Non-GAAP Financial Measures

The following is a reconciliation of Jackson Financial net cash provided by operating activities (Parent Company only), the most comparable U.S.

The following is a reconciliation of Jackson Financial net cash provided by (used in) operating activities (Parent Company only), the most comparable U.S.

GAAP measure, to Free Cash Flow:

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Capital distributions from subsidiaries 1,025 785

Capital contributed to PPM (25) (15)

Capital contributed to subsidiaries (155) (25)

Dividends on preferred stock (44) (44)

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Capital distributions from subsidiaries $ 1,025 $ 785

Dividends from subsidiaries — 360

Interest on surplus note from subsidiary 90 90

Cash distributed to Jackson Financial 1,115 875

Capital contributed to Hickory Re (150) —

Parent company expenses (119) (124)

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The following table sets forth, for the periods presented, certain data from our Consolidated Income Statements.

The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes elsewhere in this report:

The information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes elsewhere in this Form 10-K:

Years Ended December 31,

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Net income (loss) attributable to Jackson Financial Inc.

946 934 6,186

Dividends on preferred stock 44 44 35

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Pretax Income (Loss)

Our pretax income (loss) increased by $64 million to pretax income of $1,022 million for the year ended December 31, 2024, from $958 million for the year ended December 31, 2023, primarily due to:

• $403 million increase in fee income due to higher average separate account values compared to the prior year;

• $153 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.

Our pretax income (loss) decreased by $1,136 million to a pretax loss of $(114) million for the year ended December 31, 2025, from pretax income of $1,022 million for the year ended December 31, 2024, primarily due to:

• $4,414 million unfavorable movements in market risk benefits (gains) losses, net, primarily due to less favorable movements in interest rates and unfavorable movements in equity volatility in 2025, compared to the prior year;

• $111 million increase in interest credited on contract holder funds, net of deferrals and amortization, primarily due to higher average institutional account balances in 2025 and increased retail new business, compared to the prior year;

• $100 million decrease in fee income primarily due to decreases in benefit-based guarantee fee income during 2025, and decreases in variable fee income driven by market volatility in the first half of 2025, which was partially offset by increase in separate account values in the second half of the year;

• $57 million increase 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 changes in mortality and higher other policyholder benefits, partially offset by the impact of actuarial assumption updates.

See " Policy and Contract Liabilities" below for further information regarding our actuarial assumption updates.

• $35 million decrease in interest credited on contract holder funds, net of deferrals, primarily due to lower average fixed account balances in 2024, compared to the prior year.

These increases were largely offset by:

• $276 million increase in operating costs and other expenses, net of deferrals, primarily due to higher asset-based non-deferrable commissions, due to higher account values during 2024, an increase in incentive compensation expenses, and higher other commissions, net of deferrals, driven primarily by higher RILA sales in 2024;

• $199 million decrease in total net gains (losses) on derivatives and investments as shown in table below and driven by:

These movements were partially offset by:

• $3,203 million improvement in total net gains (losses) on derivatives and investments as discussed below:

Years Ended December 31,

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Total net gains (losses) on derivatives and investments $ (4,661) $ (7,864) $ 3,203

• Volumes of freestanding derivatives can significantly vary period over period and movements in those derivatives are subject to interest rate or equity market movements.

The movements in interest rate hedges during 2024 were primarily driven by an increase in interest rates, compared to relatively flat interest rate movements in 2023.

The movements in equity hedges during 2024 were primarily driven by slight increases in equity markets, compared to 2023.

• Embedded derivative movements were unfavorable primarily due to the impact of market increases on our growing RILA block during 2024, compared to the prior year.

• $88 million unfavorable movements in market risk benefits (gains) losses, net, primarily due to less favorable movements in equity volatility and fund performance, partially offset by more favorable changes in interest rates in 2024 compared to the prior year.

Income tax expense increased $42 million to an expense of $46 million for the year ended December 31, 2024, from an expense of $4 million for the year ended December 31, 2023.

The provision for income tax in the current period led to an effective tax rate ("ETR") of 5% for the year ended December 31, 2024, compared to an ETR of 1% for the year ended December 31, 2023.

The change in the ETR during the year ended December 31, 2024 compared to the year ended December 31, 2023 was due to the relationship of the taxable income to the consolidated pre-tax income.

The ETR differs from the statutory rate of 21% primarily due to the dividends received deduction and the utilization of foreign tax credits.

• Volumes of freestanding derivatives can vary significantly period over period and movements in those derivatives are subject to interest rate or market movements.

The movements in interest rate hedges during 2025 were primarily driven by a decrease in interest rates in the current year compared to an increase in interest rates in the prior year.

The movements in equity hedges during 2025 were primarily driven by smaller increases in equity markets in the current year compared to larger increases in equity markets during 2024;

• Embedded derivative movements were unfavorable largely due to equity market increase impacts on our growing RILA block during 2025, compared to the prior year.

• $289 million increase in net investment income as a result of higher income on bonds, lower expenses, and higher income on limited partnerships, which are recorded on a one quarter lag, partially offset by lower income on funds withheld assets during 2025;

• $28 million decrease in operating costs and other expenses, net of deferrals, primarily due to lower incentive and deferred compensation expenses during 2025, partially offset by higher other commissions expenses, net of deferrals, driven by higher retail sales, compared to prior year.

Income tax expense (benefit) decreased $232 million to a benefit of $186 million for the year ended December 31, 2025, from an expense of $46 million for the year ended December 31, 2024.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Segment Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Consolidated Results of Operations

The provision for income tax in the current period led to an effective tax rate ("ETR") of 117% for the year ended December 31, 2025, compared to an ETR of 5% for the year ended December 31, 2024.

The year-over-year change in the ETR was due to the relationship of the taxable income to the consolidated pre-tax income (loss), the valuation allowance expense in the current year compared to a prior year benefit, and the interest benefit on IRS refund claims.

The ETR differs from the statutory rate of 21% primarily due to the dividends received deduction, utilization of foreign tax credits, valuation allowance and the interest benefit on IRS refund claims.

Segment Results of Operations

We manage our business through three segments:

We manage our business through three reportable segments:

Retail Annuities, Institutional Products, and Closed Life and Annuity Blocks.

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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.

As part of the Company’s asset liability management program, management monitors the allocation of invested assets supporting the Company’s contractual liabilities.

During the first quarter of 2025, that monitoring resulted in the reallocation of certain invested assets across reportable segments and Corporate and Other.

The results of this reallocation are reflected in reported net investment income starting the second quarter of 2025.

The impact of the reallocation was not material to the prior period financial results and prior period financial figures were not recast to reflect the reallocated basis.

Also, see Item 8.

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Net income (loss) attributable to Jackson Financial Inc.

946 934 6,186

Dividends on preferred stock 44 44 35

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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 information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this Form 10-K:

Years Ended December 31,

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Operating Benefits and Expenses

Death, other policy benefits and change in policy reserves 67 43 61

Death, other policy benefits and change in policy reserves, net of deferrals 111 67 43

(Gain) loss from updating future policy benefits cash flow assumptions, net (20) (54) (4)

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Premiums and deposits (1)

19,849 17,994 13,015

Surrenders, withdrawals, and benefits (1)

(30,688) (29,738) (19,353)

Net flows (10,839) (11,744) (6,338)

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Balance as of end of period, gross of reinsurance $ 281,333 $ 266,716 $ 253,835

(1) Excludes certain internal exchanges.

Part II | Item 7.

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Pretax a djusted operating earnings increased $8 million to $1,863 million for the year ended December 31, 2025 from $1,855 million for the year ended December 31, 2024 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.

• $152 million increase in spread income primarily due to $210 million higher net investment income, partially offset by $58 million higher interest credited on contract holder funds.

The increase in investment income was driven by higher debt securities income primarily due to higher invested asset balances.

Increased interest credited on contract holder funds was primarily due to increased retail new business, compared to the prior year.

These movements were mostly offset by:

• $78 million increase 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 higher other policyholder benefits and the impact of actuarial assumption updates.

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.

• $33 million increase in commissions and general expenses, net of deferrals, reflecting higher other commissions expenses, net of deferrals, of $37 million during 2025, driven by higher retail sales compared to prior year;

• $12 million decrease in fee income driven by market volatility in the first half of 2025 which resulted in lower fee income compared to the prior year.

Separate account values increased in the second half of 2025, which partially offset this impact.

Account Value

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.

Retail annuities account value, net of reinsurance, increased $16.9 billion over the prior year primarily due to positive variable annuity separate account returns driven by favorable market performance in 2025, as well as positive RILA and fixed index annuity net flows over the period.

Institutional Products

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 information contained in the table below should be read in conjunction with our Consolidated Financial Statements and the related notes appearing elsewhere in this Form 10-K:

Years Ended December 31,

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Balance as of end of period $ 11,021 $ 8,384 $ 8,406

(1) Includes net deposit and withdrawal activity for FABCP funding agreements, which are generally short-term in nature.

Financial Statements and Supplementary Data Note 10 - Other Contract Holder Funds in the Notes to Consolidated Financial Statements elsewhere in this Form 10-K for information regarding FABCP funding agreements.

Year Ended December 31, 2025 compared to Year Ended December 31, 2024

Pretax Adjusted Operating Earnings

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.

Pretax adjusted operating earnings decreased $4 million to $92 million for the year ended December 31, 2025 from $96 million for the year ended December 31, 2024, reflecting a $3 million decrease in spread income primarily due to a $100 million increase in interest credited on contract holder funds, due to increased account values, partially offset by a $97 million increase in investment income, due to higher invested asset balances.

Account Value

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.

Institutional product account value increased from $8,384 million at December 31, 2024 to $11,021 million at December 31, 2025.

The increase in account value was primarily driven by an increased amount of FABN funding agreements and FABCP funding agreements in 2025.

Financial Statements and Supplementary Data — Note 10 - Other Contract Holder Funds in the Notes to Condensed Consolidated Financial Statements for information regarding FABN and FABCP funding agreements.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Segment Results of Operations

Closed Life and Annuity Blocks

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:

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 Form 10-K:

Years Ended December 31,

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Operating Benefits and Expenses

Death, other policy benefits and change in policy reserves 573 641 734

Death, other policy benefits and change in policy reserves, net of deferrals 610 573 641

(Gain) loss from updating future policy benefits cash flow assumptions, net 64 104 106

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Pretax Adjusted Operating Earnings $ 70 $ (9) $ (95)

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Segment Results of Operations

Year Ended December 31, 2025 compared to Year Ended December 31, 2024

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Pretax adjusted operating earnings increased $79 million to $70 million for the year ended December 31, 2025 from $(9) million for the year ended December 31, 2024 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.

• $112 million increase in spread income due to a $65 million increase in net investment income, and a $47 million decrease in interest credited on contract holder funds, net of deferrals and amortization, resulting from the continued run off of the closed block of business;

• $3 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 and lower other policyholder benefits, mostly offset by changes in mortality.

See “ Policy and Contract Liabilities” below for further information regarding our actuarial assumption updates .

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

These movements were partially offset by:

• $21 million decrease in fee income resulting from the continued run off of the closed block of business.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Segment Results of Operations

Corporate and Other

1 unchanged sentence

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:

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 Form 10-K:

Years Ended December 31,

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Pretax Adjusted Operating Earnings

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.

Pretax adjusted operating earnings increased $121 million to $(143) million for the year ended December 31, 2025 from $(264) million for the year ended December 31, 2024 primarily driven by a $58 million decrease in general and administrative expenses, due to lower incentive and deferred compensation expenses, a $29 million increase in other income primarily due to a one-time reinsurance related adjustment in 2024, and a $40 million increase in net investment income.

Part II | Item 7.

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Financial Statements and Supplementary Data — Note 8 - Reinsurance of the Notes to Consolidated Financial Statements for further details .

We may also use other third-party investment managers for certain niche asset classes.

We use other third-party investment managers for certain niche asset classes.

As of December 31, 2025, Apollo managed $11.6 billion of cash and investments and other third-party investment managers managed approximately $312 million of investments.

Our Investment Committee has specified a target strategic asset allocation (“SAA”) that is designed to deliver the highest expected return within a defined risk tolerance while meeting other important objectives such as those mentioned in the prior paragraph.

The fixed income portion of the SAA is assessed relative to a customized index of public corporate bonds that represents a close approximation of the maturity profile of our liabilities and a credit quality mix that is consistent with our risk tolerance.

14 unchanged sentences

Debt Securities, at fair value under fair value option 3,464 6 3,470 2,930 116 3,046

Debt securities, trading, at fair value — — — 68 — 68

Equity securities, at fair value 84 88 172 72 125 197

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Total investments $ 54,510 $ 14,723 $ 69,233 $ 44,325 $ 16,682 $ 61,007

Available-for-sale debt securities decreased to $40,289 million at December 31, 2024 from $40,422 million at the end of 2023.

Available-for-sale debt securities increased to $47,321 million at December 31, 2025 from $40,289 million at the end of 2024.

The amortized cost of debt securities, available-for-sale, increased to $50,491 million at December 31, 2025 from $45,007 million as of December 31, 2024.

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(1) No single remaining industry exceeds 3% of the portfolio.

Evaluation of Available-For-Sale Debt Securities

Evaluation of Available-For-Sale Debt Securities for Credit Loss

Financial Statements and Supplementary Data -- Note 4 - Investments of the Notes to Consolidated Financial Statements for information about how we evaluate our available-for-sale debt securities for credit loss.

Equity Securities

Equity securities consist of investments in common and preferred stock holdings and mutual fund investments.

Equity securities consist of investments in common and preferred stock and mutual fund investments.

Common and preferred stock investments generally arise out of previous private equity investments or other settlements rather than as direct investments.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations | Investments

The table below presents the carrying value, net of allowance of credit loss, of our mortgage loans by property type:

The table below presents the carrying value, net of allowance for credit loss, of our mortgage loans by property type:

(in millions)

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Charge offs, net of recoveries (1)

Reductions for mortgages disposed (2) —

Provision (release) (1)

Balance at end of period $ 133 $ 121

(1) At December 31, 2024 and 2023, the $(44) million net decrease and $70 million net increase in allowance for credit losses is due to the change in expected credit losses, primarily in the office sector.

(1) At December 31, 2025, the $12 million net increase in allowance for credit losses is due to the change in expected credit losses, primarily in the residential mortgage sector.

At December 31, 2024, the $(44) million net decrease in allowance for credit losses is due to the change in expected credit losses, primarily in the office sector.

The Company’s mortgage loans that are current and in good standing are accruing interest.

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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.

Our policy and contract liabilities include separate account liabilities, reserves for future policy benefits and claims payable and other contract holder funds.

As of December 31, 2025, 90% of our policy and contract liabilities were in our Retail Annuities segment, 4% were in our Institutional Products segment and 6% were in our Closed Life and Annuity Blocks segment.

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— — 20,282 17 20,299

Fixed Annuities — — 9,494 2 9,496

Fixed Index Annuities 2

— — 7,946 127 8,073

Fixed Annuities — — 9,615 1 9,616

Payout Annuities — 1,169 854 — 2,023

10 unchanged sentences

— — 11,685 6 11,691

Fixed Annuities — — 9,615 1 9,616

Fixed Index Annuities 2

— — 8,515 37 8,552

Fixed Annuities — — 9,736 1 9,737

Payout Annuities — 1,095 844 — 1,939

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Total $ 229,143 $ 11,072 $ 58,312 $ (5,125) $ 293,402

(1) Includes the embedded derivative liabilities in other contract holder funds re lated to RILA of $3,065 million and $1,224 mill ion at December 31, 2024 and 2023, respectively.

(2) Includes the embedded derivative liabilities related to fixed index annuity in other contract holder fu nds of $877 million and $866 mill ion at December 31, 2024 and 2023, respectively.

(1) Includes the embedded derivative liabilities in other contract holder funds re lated to RILA of $6,043 million and $3,065 million at December 31, 2025 and 2024, respectively.

(2) Includes the embedded derivative liabilities related to fixed index annuity in other contract holder funds of $863 million and $877 mill ion at December 31, 2025 and 2024, respectively.

As of December 31, 2025:

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As of December 31, 2025, 92% 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.

We have the discretion, subject to contractual limitations and minimums, to reset the crediting terms on the majority of our fixed annuities and fixed index annuities.

Part II | Item 7.

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2025 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.

The impact of assumption updates on Pretax Adjusted Operating Earnings was a gain of $18 million.

A gain of $16 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.

$2 million of this gain was attributed to the Closed Life and Annuity Blocks segment related to mortality and lapse assumptions.

The impact on pretax non-operating earnings was a loss of $360 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.

This loss was due to changes on variable annuity MRB reserves of $374 million, which was primarily related to updated policyholder behavior assumptions such as lapse and partially offset by updated mortality assumptions and model enhancements.

This was partially offset by a gain of $14 million on fixed index annuities and RILA MRB and embedded derivative reserves, primarily driven by changes to RILA policyholder behavior.

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.

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The primary liquidity concern with respect to these cash flows is the risk of earlier than expected contract holder and policyholder benefit payments.

Cash flows provided by (used in) operating activities increased $483 million to $5,793 million during the year ended December 31, 2024 from $5,310 million during the year ended December 31, 2023.

This increase was primarily due to the timing of settlements of receivables and payables.

Cash flows provided by (used in) operating activities decreased $35 million to $5,758 million during the year ended December 31, 2025 from $5,793 million during the year ended December 31, 2024.

This was primarily due to the timing of settlements of receivables and payables.

Cash flows from Investing Activities

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The primary liquidity concerns with respect to these cash flows are the risk of default by debtors or market disruptions that might impact the timing of investment related cash flows as well as derivative collateral needs, which could result in material liquidity needs for our insurance subsidiaries.

Cash flows provided by (used in) investing activities decreased $6,498 million to $(7,090) million during the year ended December 31, 2024 from $(592) million during the year ended December 31, 2023.

This decrease was primarily driven by increased purchases of debt securities in 2024, primarily due to increased RILA and fixed annuity issuances in 2024, and increased outflows related to our hedging program for derivative settlements and collateral, predominately resulting from increases in interest rates and equity markets in 2024 compared to 2023.

Cash flows provided by (used in) investing activities changed by $666 million to $(7,756) million during the year ended December 31, 2025 from $(7,090) million during the year ended December 31, 2024.

This change was primarily driven by increased net purchases of debt securities and mortgage loans, primarily driven by increased institutional and retail sales in 2025, partially offset by lower outflows related to our hedging program, compared to the prior year.

Part II | Item 7.

5 unchanged sentences

Cash flows provided by (used in) financing activities increased $1,562 million to $3,935 million during the year ended December 31, 2025 from $2,373 million for the year ended December 31, 2024.

This increase was primarily due to higher deposits from increased RILA and fixed annuity sales in 2024 in addition to higher proceeds from repurchase agreements in the current year, partially offset by the proceeds we received in the prior year from the issuance of our preferred stock.

This increase was primarily due to higher deposits from increased institutional and RILA sales in 2025, partially offset by repayments on repurchase agreements and federal home loan bank notes during 2025 .

Statutory Capital

9 unchanged sentences

Jackson had an RBC ratio of 567%, 572% and 624% as of December 31, 2025, 2024 and 2023, respectively.

The decrease in Jackson’s RBC ratio as of December 31, 2024 as compared to December 31, 2023 was primarily due to an increase in dividends paid in 2024, an increase in asset risk driven by RILA separate account growth and increased collateral, and increased business risk, partially offset by reductions in interest rate and market risk.

The decrease in Jackson’s RBC ratio as of December 31, 2025 as compared to December 31, 2024 was primarily due to an increase in asset risk driven by RILA separate account growth and increased business risk, partially offset by decreased collateral and capital generation.

Holding Company Liquidity

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The main uses of liquidity for Jackson Financial are interest payments and debt repayment, holding company operating expenses, payment of dividends and other distributions to shareholders, which may include stock repurchases, and capital contributions, if needed, to our insurance company subsidiaries.

Our principal sources of liquidity and our anticipated capital position are described in the following paragraphs.

Any declaration of cash dividends or stock repurchases are at the discretion of JFI’s Board of Directors and will depend on our financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, preferred stock and other contractual restrictions with respect to paying cash dividends or repurchasing stock, restrictions imposed by Delaware law, general business conditions and any other factors that JFI’s Board of Directors deems relevant in making any such determination.

See “Recent Events of Note” above in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Insurance Company Subsidiaries’ Liquidity

The liquidity sources for our insurance company subsidiaries include their cash, short-term investments, sales of publicly-traded bonds, insurance premiums, fees charged on their products, sales of annuities and institutional products, investment income, commercial repurchase agreements and utilization of borrowing facilities, including a short-term borrowing facility with the Federal Home Loan Bank of Indianapolis ("FHLBI").

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

The liquidity requirements for our insurance company subsidiaries include:

• liabilities associated with their insurance and reinsurance activities.

Liabilities arising from insurance and reinsurance activities include the payment of policyholder benefits when due, cash payments in connection with policy surrenders and withdrawals and policy loans;

• purchases of new investments;

• management of derivative-related margin requirements.

The derivative contracts are an integral part of our risk management program, especially for the management of our variable annuities program, and are managed in accordance with our hedging and risk management program.

Our cash flows associated with collateral received from counterparties and posted with counterparties fluctuates with changes in the market value of the underlying derivative contract and/or the market value of the collateral.

The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged.

As of December 31, 2025 , we were in a net collateral payable position of $58 million, compared to $150 million as of December 31, 2024 ;

• repayment of principal and interest on debt, and payments of interest on surplus notes.

As of December 31, 2025 , Jackson’s outstanding surplus notes and bank debt included $ 47 million of bank loans from the FHLBI, collateralized by mortgage-related securities and mortgage loans, and $250 million of surplus notes maturing in 2027;

• funding of expenses including payment of commissions, operating expenses and taxes.

Significant increases in interest rates could create sudden increases in surrender and withdrawal requests by customers and contract holders and result in increased liquidity requirements at our insurance company subsidiaries.

Significant increases in interest rates or equity markets may also result in higher margin and collateral requirements on our derivative portfolio.

Other factors not directly related to interest rates can also give rise to an increase in liquidity requirements including, changes in ratings from rating agencies, general policyholder concerns relating to the life insurance industry (e.g., the unexpected default of a large, unrelated life insurer) and competition from other products, including non-insurance products such as mutual funds, certificates of deposit and newly developed investment products.

Most of the life insurance and annuity products Jackson offers permit the policyholder or contract holder to withdraw or borrow funds or surrender cash values.

As of December 31, 2025, 100% of our RILA policy and contract liabilities were subject to surrender charges of at least 5% or at market value in the event of discretionary withdrawal by customers.

Further, more than half of Jackson’s general account reserves are not surrenderable, included surrender charges greater than 5%, or included market value adjustments to discourage early withdrawal of policy and contract funds as of December 31, 2025 .

Jackson uses a variety of asset liability management techniques to provide for the orderly provision of cash flow from investments and other sources as policies and contracts mature in accordance with their normal terms.

Jackson’s principal sources of liquidity to meet unexpected cash outflows associated with sudden and severe increases in surrenders and withdrawals or benefit payments are its portfolio of liquid assets and its net operating cash flows.

As of December 31, 2025, the portfolio of cash, short-term investments and privately and publicly traded securities and equities that are unencumbered and unrestricted to sale, amounted to $36.8 billion.

Distributions and Dividends

• Holding Company

Any declaration of cash dividends or stock repurchases by JFI are at the discretion of JFI’s Board of Directors and will depend on our financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, preferred stock and other contractual restrictions with respect to paying cash dividends or repurchasing stock, restrictions imposed by Delaware law, general business conditions and any other factors that JFI’s Board of Directors deems relevant in making any such determination.

Therefore, there can be no assurance that we will pay any cash dividends to holders of our stock or approve any further increase in the existing, or any new, common stock repurchase program, or any assurance as to the amount of any such cash dividends or stock repurchases.

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The states in which our insurance subsidiaries are domiciled impose certain restrictions on our insurance subsidiaries’ ability to pay dividends to their parent companies.

See “Distributions from our Insurance Company Subsidiaries” below for a discussion of those restrictions .

See “Distributions and Dividends - Insurance Company Subsidiaries” below for a discussion of those restrictions .

Such restrictions, or any future restrictions adopted by the states in which our insurance subsidiaries are domiciled, could have the effect, under certain circumstances, of significantly reducing dividends or other amounts payable by our subsidiaries without affirmative approval of state regulatory authorities.

Risk Factors—“Risks relating to Financing and Liquidity - As a holding company, Jackson Financial depends on the ability of its subsidiaries to pay dividends and make other distributions to meet its obligations and liquidity needs, including servicing debt, dividend payments and stock repurchases.”

On March 13, 2023, the Company issued and sold depositary shares, each representing a 1/1000 th interest in a share of our Fixed-Rate Reset Noncumulative Perpetual Preferred Stock, Series A.

After underwriting discounts and expenses, we received net proceeds of approximately $533 million.

Financial Statements and Supplementary Data — Note 24 - Equity of the Notes to Consolidated Financial Statements for more information

See “Risk Factors—Risks relating to Financing and Liquidity - As a holding company, Jackson Financial depends on the ability of its subsidiaries to pay dividends and make other distributions to meet its obligations and liquidity needs, including servicing debt, dividend payments and stock repurchases.”

During the year ended December 31, 2025, we paid a cash dividend of $0.50 per depositary share and $0.80 per common share on JFI's preferred and common stock totaling $44 million and $228 million, respectively.

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The dividend will be payable on March 30, 2026, to depositary shareholders of record at the close of business on March 16, 2026.

On August 1, 2024, our Board of Directors authorized an increase of $750 million in our existing authorization to repurchase shares of our outstanding common stock as part of the Company's share repurchase program.

On February 11, 2026, Jackson and TPG completed the transaction announced on January 6, 2026.

See Executive Summary - Recent Events to Note of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details on this transaction.

On September 18, 2025, our Board of Directors authorized an increase of $1 billion in our existing authorization to repurchase shares of our outstanding common stock as part of the Company's share repurchase program.

We repurchased a total of 7,030,535 shares of common stock for an aggregate purchase price of $634 million for the year ended December 31, 2025, which were funded with cash on hand.

As of February 18, 2026, the Company had remaining authorization to purchase $903 million of its common shares.

Financial Statements and Supplementary Data — Note 24 - Equity of the Notes to Consolidated Financial Statements for further information on dividends to shareholders and share repurchase s.

During 2023, Jackson Financial purchased certain private equity fund investments from Jackson National Life Insurance Company for $452 million, with a carrying value of $502 million, as part of rebalancing Jackson National Life Insurance Company's portfolio mix.

Jackson Financial sold these investments in October 2023.

The Company recorded a loss of $ 97 million on the sale, which it recognized in Net Investment Income within the consolidated financial statements for the year ended December 31, 2023 , of which $37 million of this loss was attributable to Jackson Financial.

Distributions from our Insurance Company Subsidiaries

See Note 23 - Equity of the Notes to Consolidated Financial Statements in this Form 10-K for further information on dividends to shareholders and share repurchases .

• Insurance Company Subsidiaries

The ability of our insurance company subsidiaries to pay dividends is limited by applicable laws and regulations of the jurisdictions where such subsidiaries are domiciled as well as agreements entered into with regulators.

These laws and regulations require, among other things, our insurance company subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

Subject to these limitations, our insurance company subsidiaries are permitted to pay ordinary dividends based on calculations specified under insurance laws of the relevant state of domicile, subject to prior notification to the appropriate regulatory agency.

Any distributions above the amount permitted by statute in any twelve-month period are considered extraordinary dividends, and the approval of the appropriate regulator is required prior to payment.

In Michigan, the Director of the Michigan Department of Insurance and Financial Services (the Michigan Director of Insurance) may limit, or not permit, the payment of dividends from either Jackson or Brooke Life, Jackson's direct parent company, if it determines that the surplus of either of these subsidiaries is not reasonable in relation to their outstanding liabilities and is not adequate to meet their financial needs, as required by the Michigan Insurance Code of 1956.

Unless otherwise approved by the Michigan Director of Insurance, dividends may only be paid from earned surplus.

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In New York, all dividends require approval from the New York State Department of Financial Services.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

For 2026, ordinary dividend capacity for Jackson and Brooke Life is based on the greater of 10% of 2025 reported statutory capital and surplus or statutory net gain from operations.

This capacity is then reduced by cumulative dividends and other capital distributions in the preceding 12 months, subject to the availability of earned surplus.

As a result of cumulative dividends and other capital distributions occurring in the preceding 12 months as of December 31, 2024 , including the January 2024 distributions to establish Brooke Re, future dividends from both Jackson and Brooke Life are expected to be classified as extraordinary.

As a result of cumulative dividends and other capital distributions occurring in the preceding 12 months as of December 31, 2025 , future dividends from both Jackson and Brooke Life are expected to be classified as extraordinary.

There is a process within the Michigan Insurance Code to request extraordinary dividends that the companies have utilized previously.

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We believe our insurance company subsidiaries have sufficient statutory capital and surplus to maintain their desired financial strength ratings.

In connection with the formation of Brooke Re, Jackson remitted a $1,920 million return of capital to its parent company, Brooke Life, in the first quarter of 2024.

Brooke Life subsequently made a $1,870 million capital contribution to its subsidiary, Brooke Re.

Brooke Re then recorded a $1.2 billion ceding commission to Jackson.

On June 20, 2024, Jackson paid a $250 million extraordinary dividend to its parent company, Brooke Life.

Brooke Life subsequently remitted a $250 million return of capital to its ultimate parent, Jackson Financial.

On September 12, 2024, Jackson paid a $300 million extraordinary dividend to Brooke Life.

Brooke Life subsequently remitted a $255 million return of capital to Jackson Financial.

In addition, for the year ended December 31, 2024 , Brooke Life paid $90 million of interest associated with the $2 billion surplus note between Brooke Life and Jackson Finance, LLC ("Jackson Finance"), a subsidiary of Jackson Financial.

On December 10, 2024, Jackson paid a $280 million extraordinary dividend to Brooke Life.

Brooke Life subsequently remitted a $280 million return of capital to Jackson Financial.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

Insurance Company Subsidiaries’ Liquidity

The liquidity requirements for our insurance company subsidiaries primarily relate to the liabilities associated with their insurance and reinsurance activities, operating expenses and income taxes.

Liquidity requirements are principally for purchases of new investments, management of derivative related margin requirements, repayment of principal and interest on debt, payments of interest on surplus notes, funding of insurance product liabilities including payments for policy benefits, surrenders, maturities and new policy loans, funding of expenses including payment of commissions, operating expenses and taxes.

As of December 31, 2024, Jackson’s outstanding surplus notes and bank debt included $ 52 million of bank loans from the Federal Home Loan Bank of Indianapolis ("FHLBI"), collateralized by mortgage-related securities and mortgage loans, and $250 million of surplus notes maturing in 2027.

Significant increases in interest rates or equity markets may also result in higher margin and collateral requirements on our derivative portfolio.

The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged.

Collateral posting requirements can result in material liquidity needs for our insurance subsidiaries.

As of December 31, 2024, we were in a net collateral payable position of $150 million, which is down from $780 million as of December 31, 2023.

Other factors that are not directly related to interest rates can also give rise to an increase in liquidity requirements including, changes in ratings from rating agencies, general policyholder concerns relating to the life insurance industry ( e.g.

, the unexpected default of a large, unrelated life insurer) and competition from other products, including non-insurance products such as mutual funds, certificates of deposit and newly developed investment products.

Most of the life insurance and annuity products Jackson offers permit the policyholder or contract holder to withdraw or borrow funds or surrender cash values.

As of December 31, 2024, all of our RILA policy and contract liabilities were subject to surrender charges of at least 5% or at market value in the event of discretionary withdrawal by customers.

Further, approximately half of Jackson’s general account reserves are not surrenderable, included surrender charges greater than 5%, or included market value adjustments to discourage early withdrawal of policy and contract funds as of December 31, 2024.

The liquidity sources for our insurance company subsidiaries include their cash, short-term investments, sales of publicly traded bonds, insurance premiums, fees charged on their products, sales of annuities and institutional products, investment income, commercial repurchase agreements and utilization of a short-term borrowing facility with the FHLBI.

As of December 31, 2024, the portfolio of cash, short-term investments and privately and publicly traded securities and equities that are unencumbered and unrestricted to sale, amounted to $26.4 billion.

Our Indebtedness

In November 2021 and June 2022, the Company issued an aggregate of $2,350 million principal amount of its senior notes, shown as Long-term debt on the Consolidated Balance Sheets.

The proceeds of the note issuances were used, together with cash on hand, to retire the Company’s previously outstanding term loans.

$600 million of these notes matured on November 22, 2023, and were paid with cash on hand at maturity.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

The Company has an aggregate of $1,750 million principal amount of its senior notes, shown as Long-term debt on the Consolidated Balance Sheets.

See Note 13 – Long-Term Debt of the Notes to Consolidated Financial Statements for information regarding long term debt.

Revolving Credit and Short-Term Borrowing Facilities

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We were in compliance with these covenants at December 31, 2025.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

Jackson is a party to an Uncommitted Money Market Line Credit Agreement dated April 6, 2023 among Jackson, Jackson Financial, and Société Générale.

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Interest is payable semi-annually on March 15th and September 15th of each year.

Interest expense on the notes was $20 million, $20 million, and $20 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Interest expense on the notes was $20 million for each of the years ended December 31, 2025, 2024 and 2023.

Under Michigan insurance law, for statutory reporting purposes, the surplus notes are not part of the legal liabilities of Jackson and are considered surplus funds.

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Federal Home Loan Bank

Jackson is a member of the regional FHLBI primarily for the purpose of participating in its collateralized loan advance program with funding facilities.

Jackson is a member of the FHLBI primarily for the purpose of participating in its collateralized loan advance program with funding facilities.

Membership requires us to purchase and hold a minimum amount of FHLBI capital stock, plus additional stock based on outstanding advances.

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As of December 31, 2025 and 2024, Jackson held a bank loan with an outstanding balance of $47 million and $52 million, respectively.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

Collateral Upgrade Transactions

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These transactions are evergreened and require at least 150-days' notice prior to termination.

See “Collateral Upgrade Transactions” under Note 4 – Investments of Notes to Consolidated Financial Services in Part II, Item 8.

See “Collateral Upgrade Transactions” under Note 4 – Investments of Notes to Consolidated Financial Statements in Part II, Item 8.

Financial Statements and Supplementary Data in this Form 10-K for additional information.

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Financial strength ratings and credit ratings are important factors affecting consumer confidence in an insurer and its competitive position in marketing products as well as critical factors considered by ceding companies in selecting a reinsurer.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

Our principal insurance company subsidiaries are rated by A.M.

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A stable outlook does not preclude a rating agency from changing a rating at any time without notice.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations | Liquidity and Capital Resources

Best, S&P, Moody’s and Fitch review their ratings of insurance companies from time to time.

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Financial Statements and Supplementary Data — Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements .

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S.

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Updates to assumptions are applied on a retrospective basis, and each reporting period the reserve for future policy benefits is updated to reflect actual experience to date.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

The Company establishes cohorts, which are product groupings used to measure reserves for future policy benefits.

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Each reporting period, the reserve for future policy benefits is remeasured using the current discount rate.

The difference between the reserve calculated using the current discount rate and the reserve calculated using the locked-in discount rate is recorded in other comprehensive income.

The difference between the reserve calculated using the current discount rate and the reserve calculated using the locked-in discount rate is recorded in accumulated other comprehensive income.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

Additional Liabilities - Universal Life-type

The Company issues universal life plans with secondary guarantees and interest-sensitive life plans.

The Company issues universal life policies with secondary guarantees and interest-sensitive life policies.

The primary reserves for these policies are the contract holder account balances reported within the other contract holder funds line of the Consolidated Balance Sheets.

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These additional liabilities for annuitization, death and other insurance benefits are reported within reserves for future policy benefits and claims payable.

The methodology uses a benefit ratio defined as a constant percentage of the assessment base.

The liability measurement methodology uses a benefit ratio defined as a constant percentage of the assessment base.

This ratio is multiplied by current period assessments to determine the reserve accrual for the period.

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Other Future Policy Benefits and Claims Payable

In conjunction with a prior acquisition, we recorded a fair value adjustment related to certain annuity and interest-sensitive life blocks of business to reflect the cost of the interest guarantees within the in-force liabilities, based on the difference between the guaranteed interest rate and an assumed new money guaranteed interest rate.

This adjustment is recorded in reserves for future policy benefits and claims payable.

This component of the acquired reserves is reassessed at the end of each period, taking into account changes in the in-force block.

Any resulting change in the reserve is recorded as a change in policy reserve through the Consolidated Income Statements.

In addition, life and annuity claims liabilities in course of settlement are included in other future policy benefits and claims payable.

This liability adjustment is remeasured each reporting period, taking into account changes in the in-force block.

Any resulting change in the reserve is recorded as a change in policy reserve in the Consolidated Income Statements.

In addition, life and annuity claims liabilities in course of settlement are included in reserves for future policy benefits and claims payable.

Financial Statements and Supplementary Data — Note 9 - Reserve for Future Policy Benefits and Claims Payable of the Notes to Consolidated Financial Statements for additional information on these accounting policies.

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A mortality improvement assumption is also applied.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

• Base lapse rates - These vary by contract-level factors, such as product type, surrender charge schedule and guaranteed benefits election.

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Withdrawal rates on contracts with a GMWB vary based on attained age, tax qualification status, GMWB type and GMWB benefit provisions.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

• Non-performance risk adjustment - This is applied as a spread over the risk-free rate to determine the rate used to discount the related cash flows and varies by projection year.

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For additional information regarding our account value by optional guarantee benefit, see Item 1.

Business–Our Product Offerings by Segments–Retail Annuities–Variable Annuities in this report.

Business–Our Product Offerings by Segments–Retail Annuities–Variable Annuities in this Form 10-K.

Variable annuity guaranteed benefit features classified as MRBs, which have explicit fees, are measured using the attributed fee method.

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In subsequent valuations, both the present value of future projected liabilities and the present value of projected attributed fees are remeasured based on current market conditions and policyholder behavior assumptions.

Fixed Index Annuities

The longevity riders issued on fixed index annuities are classified as MRBs and measured at fair value.

Similar to the variable annuity guaranteed benefits features, these contracts have explicit fees and are measured using the attributed fee method.

The Company attributes a percentage of total projected future fees expected to be assessed against the policyholder to offset the projected future claims over the lifetime of the contract.

If the fees attributed are insufficient to offset the claims at issue, the shortfall is borrowed from the host contract rather than recognizing a loss at inception.

Fixed Index Annuities and RILA

Our FIA and RILA contracts may be issued with features that guarantee benefits that are payable upon death (GMDB) or upon depletion of funds (GMWB).

These features are classified as MRBs and measured at fair value.

Where the guaranteed benefit features have explicit fees, the fair value of the MRB is measured as the difference between the present value of projected future guaranteed benefits and the present value of projected attributed fees (the attributed fee method).

At inception of the contract, the Company attributes a percentage of total projected future fees expected to be assessed against the policyholder to offset the projected future guaranteed benefits over the lifetime of the contract.

Where the projected attributed fees are sufficient to offset the projected guaranteed benefits at issue, the MRB has an initial fair value of zero resulting in no gain or loss on issuance of the contract.

If the projected attributed fees are insufficient to offset the projected guaranteed benefits at issue, an MRB liability is recognized and the value of the MRB is deducted from the host contract liability resulting in no gain or loss on issuance of the contract.

If the guaranteed benefits do not have explicit fees, the fair value of the MRB is measured as the present value of projected future guaranteed benefits.

At inception, the initial value of the MRB is deducted from the host contract liability resulting in no gain or loss on issuance of the contract.

Financial Statements and Supplementary Data — Note 12 - Market Risk Benefits of the Notes to Consolidated Financial Statements for additional information on these accounting policies.

Part II | Item 7.

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Critical Accounting Estimates

RILA guaranteed benefit features are classified as MRBs and measured at fair value.

The fair value measurement represents the present value of future claims payable by the MRB feature.

At inception, the value of the MRB is deducted from the value of the contract resulting in no gain or loss.

Financial Statements and Supplementary Data — Note 12 - Market Risk Benefits of the Notes to Consolidated Financial Statements for additional information on these accounting policies.

Income taxes represent the net amount of income taxes that we expect to pay to or receive from various taxing jurisdictions in connection with our operations.

We provide for federal and state income taxes currently payable, as well as those deferred due to temporary differences between the financial reporting and tax bases of assets and liabilities.

The Company did not elect to early adopt the proposed regulations of the U.S.

Treasury Department and the Internal Revenue Service for the 2023 tax returns and relied on reasonable interpretations of previously published guidance resulting in a reduction to the Corporate Alternative Minimum Tax (“CAMT”) liability and related CAMT deferred tax asset previously recorded as of December 31, 2023.

The determination of the estimated 2024 CAMT liability considered carryover impacts from the 2023 tax return and consideration of the applicability of the proposed regulations.

Treasury Department and the Internal Revenue Service and relied on reasonable interpretations of published guidance to determine the estimated Corporate Alternative Minimum Tax (“CAMT”) liability and related CAMT deferred tax asset.

The determination of the estimated 2025 CAMT liability considered carryover impacts from the prior years tax returns and consideration of the applicability of the published guidance.

Treasury Department is expected to issue Final Regulations after the year ended December 31, 2025, which may materially change the estimated provision of the CAMT.

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Financial Statements and Supplementary Data — Note 15 – Income Taxes for additional information on these accounting policies and the estimated provision for the CAMT.

Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risk with respect to reinsurance receivables.

We periodically review actual and anticipated experience compared to the previously mentioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluate the financial strength of counterparties to our reinsurance agreements.

Counterparty credit risk may be managed through the use of letters of credit, collateral trusts or on balance sheet funds withheld agreements.

Assets held under funds withheld agreements are included on our Consolidated Balance Sheets and subject to triggers embedded within the relevant reinsurance agreements.

Additionally, for each of our reinsurance agreements, we determine whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards.

We review all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims.

We assess each of our reinsurance agreements to determine whether the agreement transfers insurance risk to the reinsurer by providing indemnification against loss or liability relating to insurance risk.

Those contracts that transfer risk to the reinsurer are accounted for as reinsurance.

Contracts that do not transfer sufficient risk to the reinsurer are accounted for as deposits.

For reinsurance contracts to transfer sufficient insurance risk to the reinsurer, the contract must provide a reasonable possibility that the reinsurer may realize a significant loss.

Determining whether a reinsurance contract sufficiently transfers insurance risk is a matter of judgment based on an evaluation of all facts, both qualitative and quantitative.

For contracts where the Company cedes risks to reinsurers, reinsurance accounting generally matches the recognition of the benefits received from the reinsurance with the expense for benefits provided on the reinsured contracts.

Premiums paid to the reinsurer are recorded as reduction of premium revenue.

Expected reimbursements for losses are recorded as a reduction of losses as the losses are incurred with a corresponding reinsurance recoverable asset.

Reinsurance recoverables are generally measured using methodologies and assumptions that are consistent with those used to measure the direct liabilities.

For non-participating traditional life insurance contracts and limited pay life-contingent contracts, there may be reinsurance contracts executed subsequent to the direct contract issue dates, and market interest rates may have changed between the date that the underlying insurance contracts were issued and the date the reinsurance contract is recognized in the financial statements, resulting in the underlying discount rate differing between the direct and reinsured business.

We periodically review, and update as necessary, actual and anticipated experience and the assumptions used to measure reinsurance recoverable assets.

Part II | Item 7.

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Critical Accounting Estimates

For reinsurance contracts, reinsurance recoverable balances are generally calculated using methodologies and assumptions that are consistent with those used to calculate the direct liabilities.

Our guaranteed minimum income benefits (GMIBs) are reinsured with an unrelated party.

For contracts that only ceded the GMIB feature of our annuity products, the reinsurance contract in its entirety is classified as a reinsured market risk benefit or MRB.

Accordingly, the reinsured MRB is recorded at fair value using internally developed models consistent with those used to value our direct MRBs.

Reinsurance recoverables are reported net of an allowance for expected credit losses.

The allowance for credit losses considers the credit quality of the reinsurer and is generally determined based on probability of default and loss given default assumptions after considering any applicable collateral arrangements.

Counterparty credit risk may be managed through the use of letters of credit, collateral trusts or funds withheld agreements.

Assets held under funds withheld agreements are included on our Consolidated Balance Sheets.

Guaranteed minimum income benefits (GMIBs) are reinsured with an unrelated party.

This contract provides reinsurance for only the GMIB feature and is classified as a market risk benefit (MRB).

The reinsurance MRB is recorded at fair value using internally developed models consistent with those used to value our direct MRBs.

Financial Statements and Supplementary Data — Note 8 - Reinsurance of the Notes to Consolidated Financial Statements for additional information on these accounting policies.

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Factors considered in determining whether an impairment is necessary include whether we have the intent to sell, or whether it is more likely than not we will be required to sell, the security before the amortized cost basis is fully recovered, the severity of the unrealized loss, the reasons for the decline in value and expectations for the amount and timing of a recovery in fair value.

For debt securities in an unrealized loss position, for which we deem an impairment necessary, the amortized cost may be written down to fair value through net gains (losses) on derivatives and investments, or an ACL may be recorded along with a charge to net gains (losses) on derivatives and investments.

For debt securities in an unrealized loss position, for which we deem an impairment necessary, an ACL will be recorded along with a charge to net gains (losses) on derivatives and investments and any amounts deemed unrecoverable will be released from the ACL with a corresponding reduction to the amortized cost of the security.

Securities determined to be underperforming, or potential problem securities are subject to regular review.

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or an issuer has filed or indicated a possibility of filing for bankruptcy, has missed or announced it intends to miss a scheduled interest or principal payment, or has experienced a specific material adverse change that could impair its creditworthiness.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

In performing these reviews, we consider the relevant facts and circumstances relating to each investment and exercise considerable judgment in determining whether an impairment is needed for a particular security.

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This assessment may also involve assumptions regarding underlying collateral such as prepayment rates, default and recovery rates, and third-party servicing capabilities.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

In addition to the review procedures described above, investments in asset-backed securities where market prices are depressed are subject to a review of their future estimated cash flows, including expected and stress case scenarios, to identify potential shortfalls in contractual payments.

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Rather, receivable balances that are deemed uncollectible are written off with a corresponding reduction to net investment income.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

Freestanding Derivative Instruments

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These transactions manage the risk of a change in the value, yield, price, cash flows, foreign currency, credit quality or degree of exposure with respect to assets, liabilities or future cash flows that we have acquired or incurred.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

Freestanding derivative instruments are reported at fair value, which reflects the estimated amounts, net of payment accruals, that we would receive or pay upon sale or termination of the contracts at the reporting date.

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For our registered index-linked and fixed index annuities, the equity-linked option issued by the Company is accounted for at fair value as an embedded derivative on the Company’s Consolidated Balance Sheets as a component of other contract holder funds, with changes in fair value recorded in net income.

The policyholder account value is the imputed value of the underlying guaranteed host contract.

The fair value of the embedded derivative for the FIA and RILA products is determined using an option-budget method with capital market inputs of market index returns and discount rates as well as actuarial assumptions including lapse, mortality and withdrawal rates.

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The underlying assumptions may have a material impact on the measurement of the embedded derivative, including equity market movements.

Thus, favorable equity market movements cause increases in future contract holder benefits, resulting in an increase in the fair value of the embedded derivative liability (and vice versa).

Financials Statements and Supplementary Data — Note 5 - Derivative Instruments and Note 10 - Other Contract Holder Funds of the Notes to Consolidated Financial Statements for additional information on our accounting policies for embedded derivatives bifurcated for insurance host contracts.

Embedded Derivatives - Funds Withheld Reinsurance Agreements

The Company has recorded an embedded derivative liability related to the Athene coinsurance agreement (the “Athene Embedded Derivative”) in accordance with ASC 815-15 as Jackson’s obligation under the coinsurance agreement is based on the total return of investments in a segregated funds withheld account rather than Jackson’s own creditworthiness.

As the coinsurance agreement transfers the economics of the investments in the segregated funds withheld account to Athene, they will receive an investment return equivalent to owning the underlying assets.

As the coinsurance agreement transfers the performance of the investments in the segregated funds withheld account to Athene, they will receive an investment return equivalent to owning the underlying assets.

At inception of the coinsurance agreement, the Athene Embedded Derivative was valued at zero.

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Subsequent to the effective date of the coinsurance agreement, the Athene Embedded Derivative is measured at fair value with changes reported in Net gains (losses) on derivatives and investments in the Consolidated Income Statement.

The Athene Embedded Derivative Liability is included in Funds withheld payable under reinsurance treaties in the Consolidated Balance Sheet.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

The Athene Embedded Derivative Liability is included in Funds withheld payable under reinsurance treaties on the Consolidated Balance Sheet.

Financial Statements and Supplementary Data — Note 8 - Reinsurance of the Notes to Consolidated Financial Statements for additional information on Athene Reinsurance Transaction.

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The amount of capital assigned to each of our segments for purposes of measuring segment net investment income is established at a level that management considers necessary to support the segment’s risks.

This assessment is determined based upon internal models and contemplates the NAIC RBC requirements at internally defined levels.

This assessment is determined based upon internal models and contemplates the RBC requirements at internally defined levels.

Net investment income on capital in excess of the amount required to support our core operating strategies is reflected in Corporate and Other.

Part II | Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations |

Critical Accounting Estimates

Contingent Liabilities

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Consolidation of Variable Interest Entities (“VIEs”)

The Company invests in a number of asset types that it has determined are VIEs, such as equity positions in collateralized loan obligations (“CLOs”), limited partnerships (“LPs”), limited liability companies (“LLCs”), and mutual funds that are assessed to determine whether they meet the criteria as a VIE.

For those entities deemed to be VIEs, we further assess whether the VIE must be consolidated as a result of the terms specific to each entity.

Entities for which consolidation is required are included on our Consolidated Financial Statements.

The Company invests in a number of asset types that may be VIEs, such as equity positions in collateralized loan obligations (“CLOs”), limited partnerships (“LPs”), limited liability companies (“LLCs”), and mutual funds.

These entities are assessed to determine whether they meet the criteria as a VIE.

The Company consolidates VIEs where the Company has determined that it is the primary beneficiary of the VIE.

To the extent that external parties are also invested in these VIEs, a non-controlling interest is reflected on our Consolidated Financial Statements as well.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis