American Equity Investment Life Holding Company reports second quarter 2021 results

Good afternoon, 

We are dedicated to keeping you informed on our company earnings information and are excited to share key highlights as you continue to partner with us. 

Highlights from Quarter 2, 2021 

• Second quarter 2021 annuity sales of $1.2 billion were driven by strong growth in fixed index annuity (FIA) sales
• Second quarter 2021 non-GAAP operating income¹ available to common stockholders of $93.8 million or $0.98 per diluted common share compared to $93.1 million, or $1.01 per diluted common share, for the second quarter of 2020
• Book value per common share of $60.46 at June 30, 2021; Book value per share excluding accumulated other comprehensive income (AOCI) of $38.59; Excluding both AOCI and net impact of accounting for fair value of derivatives and embedded derivatives, book value per share of $35.97
• Share repurchase of $95.1 million, fully offsetting dilution from 4Q 2020 Brookfield equity issuance

Chief Executive Officer, Anant Bhalla,  stated that: “For the first time in our company’s history, in the second quarter, we started leveraging our asset management partnerships to invest in single-family rental homes and middle market loans consistent with ramping towards the AEL 2.0 asset allocation strategy. Year-to-date, we have purchased over $800 million of privately-sourced alpha-generating assets — solid initial steps towards our plan of adding between $1 billion to $2 billion in private assets this year growing to a pace of 5% or greater of the portfolio in each subsequent year to evolve into our new asset allocation of 30% or greater in private assets. In the second quarter, we purchased $1.7 billion of new assets at an expected return of approximately 4.15%, net of third-party investment expenses. This included $569 million in private assets added in the quarter.”

Commenting on sales, Bhalla stated: “Our strategy of growing fixed index annuity sales is working in both the American Equity and Eagle Life channels. As previously shared in our first quarter earnings call, our plan to pivot from multi-year fixed rate annuities for the remainder of the year to our refreshed line-up of fixed index annuities is bearing results. Based on preliminary industry estimates, this is the third quarter in a row that our fixed index annuity market share has increased, reflecting the upgrades we have made to our Go-to-Market franchise over the past year.”

The full earnings news release can be found here.

Letter From The President

August 9, 2021

We are excited to report that Q2 marked the fifth consecutive quarter for IncomeShield 10 as the top selling 10-year fixed index annuity with guaranteed lifetime withdrawal benefits in the independent agent channel². Sales on IncomeShield products of all contract lengths continue to be robust, with payouts consistently in the top 3 for most issue age and deferral periods.

The launch of EstateShield 10 in July represents our first step into the increasing income segment of fixed index annuities, and early application submissions indicate it’s a strong move and the right direction for American Equity. This newest product helps to round out our Shield suite of fixed index annuities, joining the recently-enhanced, accumulation-minded AssetShield as well as income-focused IncomeShield.

This last quarter we were able to get back out onto the road, and we’ve been grateful for the opportunity to see many of you in person again. While the last 18 months have been full of change, it’s clear that so much of what’s important in our business remains the same: strong relationships. We know that our relationships with you, our stakeholders, are the foundation of our success. Our exemplary customer service is a central part of those relationships, and something American Equity can never take for granted. 

Thank you again for your outstanding support and business. Please let us know what questions you have, or how we can better serve you or your clients.

Sincerely,

Ron Grensteiner
President 

1. Use of non-GAAP financial measures is discussed in this release in the tables that follow the text of the release.

2. Secure Retirement Institute: Index Annuity Guaranteed Lifetime Withdrawal Benefit Survey, tracking the amount of sales and assets in which GLWB were elected. 6/30/21. To request a copy of the data, contact American Equity Investment Life Insurance Company.