“New products and new distribution channels have given customers wider access to our services.” Bob Saltzman, Chief Executive Officer, Jackson National Life.

For Jackson National Life, 1998 demonstrated the effectiveness of its strategy of diversification. Low interest rates reduced the attractiveness of Jackson’s traditional fixed annuity products, whilst volatile equity markets and aggressive competitor pricing tactics dampened demand for Jackson’s newer variable and equity-linked indexed annuities. Despite these factors, JNL was able to achieve record profits and near-record sales. Operating profit for the year totalled US$679 million and funds under management have increased by US$4 billion to total US$35 billion.

Anticipating changes in the US market, we have been developing new product lines and creating new distribution channels. Indeed, in 1998, roughly three quarters of JNL’s sales of US$4.7 billion came from products not in existence four years ago.

Sales
Our 1998 sales were fuelled by two successful new equity-based annuities. JNL entered the index annuity market in 1996 with the Equity Linked Index Annuity (ELI) which has been one of JNL’s most successful product launches ever and is now the number three selling index annuity in the country. Additionally, ELITE 500, another equity index annuity, was introduced in 1998. Sales of US$469 million demonstrate the appeal of these two products. A further initiative during 1998 was the Perspective Advisors Fixed and Variable Annuity, a new variable annuity with a range of innovative features.

Sales of our stable value products – Guaranteed Investment Contracts (GICs) and Funding Agreements – increased with US$2.2 billion in new contracts issued. Jackson National’s name has become well recognised in only its third year in this market. In fact, JNL now has the seventh largest block of stable value business in the industry.

As well as servicing the variable annuities sales channel, Jackson's call centre in Denver, Colorado also supports independent agents, banks and broker dealers.

New Developments
Diversification has helped us reach more customers, has given Jackson National an added dimension of strength and stability, and caught the attention of the ratings agencies. As a result, Jackson National earned three ratings upgrades in just over a year: Moody’s Investors Service, from A1 to Aa3; A.M. Best from A (Excellent) to A+ (Superior); and Duff & Phelps, from AA to AA+. Duff & Phelps cited JNL’s ‘considerable progress toward expansion, diversifying product and distribution, and improving capitalisation,’ as reasons for the upgrade.

As well as developing new products to meet customer requirements, we have developed new channels to provide wider access to our services. Technology is the driving force for better service across all of our distribution channels: we continue to expand our Web site to provide increasing amounts of information for both consumers and agents and our service centres in Lansing and Denver have again upgraded technology.

During the year Jackson completed its coverage in all 50 states when it opened for business in the state of New York. Jackson also launched its own broker-dealer, National Planning Corporation and acquired a small independent broker-dealer, SII Investments, Inc. The acquisition of a small US Savings & Loans institution (renamed Jackson Federal Savings Bank) will, in due course, enable Jackson to offer a range of banking products through a federally chartered banking subsidiary.

With so much new business and steady growth during the last five years, JNL has outgrown its current building and expects to move into a new headquarters in Lansing by the end of the year 2000. In February, JNL broke ground on a new state-of-the-art complex that will consolidate six business sites into one comprehensive location.

Going forward, our diversification strategy is likely to include the acquisition of blocks of business or entire companies with complementary product lines and distribution channels – to strengthen still further our resilience to economic cycles.

Operating Profit (US$m)		Single Premium Sales (US$bn)		Funds Under Management (US$bn)

For more information, please visit Jackson National Life’s website: www.jnli.com