Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2018
AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY
(Exact Name of Registrant as Specified in its Charter)

Iowa
001-31911
42-1447959
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
6000 Westown Parkway, West Des Moines, Iowa
50266
(Address of Principal Executive Offices)
(Zip Code)
(515) 221-0002
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933
(17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o









Item 2.02  Results of Operations and Financial Condition
On November 5, 2018, the registrant issued a press release announcing its financial results for the quarter ended September 30, 2018, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference. The registrant's financial supplement for the quarter ended September 30, 2018, is attached as Exhibit 99.2 and is incorporated herein by reference.
The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 9.01.  Financial Statements and Exhibits
(d)    Exhibits
The following exhibits are being furnished with this Form 8-K.
Exhibit
Number
 
Description
99.1
 
99.2
 





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 5, 2018
 
AMERICAN EQUITY
 
 
INVESTMENT LIFE HOLDING COMPANY
 
 
 
 
 
 
 
 
 
 
By:
/s/ John M. Matovina
 
 
 
John M. Matovina
 
 
 
Chief Executive Officer and President
 
 
 
 
 
 
 




Exhibit
Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12531132&doc=4
For more information, contact:
 
Steven D. Schwartz, Vice President-Investor Relations
(515) 273-3763, sschwartz@american-equity.com
 
 
 
 
FOR IMMEDIATE RELEASE
 
 
November 5, 2018
 
 
American Equity Reports Third Quarter 2018 Results
Company Highlights
Third quarter 2018 net income of $169.3 million or $1.85 per diluted common share
Third quarter 2018 non-GAAP operating income1 of $171.1 million or $1.87 per diluted common share
Third quarter 2018 annuity sales of $1.0 billion
Policyholder funds under management of $50.6 billion
Third quarter 2018 investment spread of 2.67%
Estimated risk-based capital ratio of 386% compared to 378% at December 31, 2017
WEST DES MOINES, Iowa (November 5, 2018) - American Equity Investment Life Holding Company (NYSE: AEL), a leading issuer of fixed index annuities (FIAs), today reported third quarter 2018 net income of $169.3 million, or $1.85 per diluted common share, compared to net income of $57.0 million, or $0.63 per diluted common share, for third quarter 2017.
Non-GAAP operating income1 for the third quarter of 2018 was $171.1 million, or $1.87 per diluted common share, compared to non-GAAP operating income1 of $87.2 million, or $0.96 per diluted common share, for third quarter 2017. On a trailing twelve-month basis, non-GAAP operating return on average equity excluding average AOCI1 was 18.1% based upon reported results and 14.8% excluding the impact of assumption revisions. Third quarter 2018 net income and non-GAAP operating income1 were positively affected by $82.8 million ($0.91 per diluted common share) and $80.6 million ($0.88 per diluted common share), respectively, for revisions to assumptions utilized in the determination of deferred policy acquisition costs, deferred sales inducements and the liability for future benefits to be paid for lifetime income benefit riders. Net income and non-GAAP operating income1 for the third quarter of 2017 were positively affected by $39.2 million ($0.44 per diluted common share) and $34.4 million ($0.38 per diluted common share), respectively, for assumption revisions.
POLICYHOLDER FUNDS UNDER MANAGEMENT UP 1.4% ON $1.0 BILLION OF SALES
Policyholder funds under management at September 30, 2018 were $50.6 billion, a $677 million or 1.4% increase from June 30, 2018. Third quarter sales were $1.0 billion before coinsurance ceded and $0.9 billion after coinsurance ceded. Gross sales and net sales for the quarter increased 14% and 12%, respectively, from third quarter 2017 sales. On a sequential basis, both gross and net sales decreased 13%.



Total sales by independent agents for American Equity Investment Life Insurance Company (American Equity Life) decreased 13% sequentially while total sales by broker-dealers and banks for Eagle Life Insurance Company (Eagle Life) decreased by $28 million or 12% sequentially. Sales of FIAs were down 12% sequentially to $1.0 billion driven by the decline in sales for American Equity Life. FIA sales for Eagle Life of $164 million were down $9 million or 5% sequentially.
Commenting on sales, John Matovina, Chairman and Chief Executive Officer, said: "We experienced a sequential decrease in FIA sales in American Equity Life's independent agent channel as competition remains intense. Reflecting the attractiveness of accumulation products in the current market environment, the Choice Series continues to be our best-selling product line at American Equity Life with 35% of sales in the third quarter. In the guaranteed lifetime income space, the IncomeShield Series has gained wide acceptance with our independent agents. IncomeShield was the second-best selling product line accounting for 26% of American Equity Life's sales in the third quarter."
Commenting on the market environment and the outlook for FIA sales, Matovina added: "The market in each of our distribution channels continues to be competitive with a number of competitors raising caps, participation rates and guaranteed lifetime income. Our higher new money investment yields allowed us to take several actions late in the third quarter and early in the fourth quarter to enhance our competitiveness. In September, we raised S&P 500 participation rates on our American Equity Choice and Eagle Select FIAs. In early October, we improved the competitive position of the IncomeShield and our other guaranteed income products by increasing payout factors. IncomeShield now ranks #1, 2, or 3 in what we believe to be the most important age/deferral combinations."
Matovina continued: "We further enhanced our competitive position in accumulation products with the introduction of the AssetShield Series on October 9th. While it is similar to the Choice Series, AssetShield is for pure accumulation and a lifetime income benefit rider is not available. AssetShield 10 has the same 54% annual participation rate on the S&P 500 as the Choice 10. Plus, it has an annual participation rate of 120% on an S&P 500 Dividend Aristocrats volatility controlled index strategy and a 175% participation on that same index strategy if the policyholder chooses a two year strategy term. Our participation rates compete favorably with the most popular accumulation products in the independent agent channel. AssetShield also features better liquidity options than offered with Choice.
Matovina went on to say: "In the bank and broker-dealer channels, we added one of the 15 largest banks based on assets as a distributor. We have begun to see new applications from its representatives, and expect this to be a key account for Eagle Life in 2019. We are also in the process of hiring three additional employee wholesalers which will bring our total to six."
INVESTMENT SPREAD HOLDS FIRM AS INVESTMENT YIELD INCREASES; OUTLOOK FOR INVESTMENT SPREAD CONTINUES TO IMPROVE
American Equity’s investment spread was 2.67% for the third quarter of 2018 compared to 2.64% for the second quarter of 2018 and 2.70% for the third quarter of 2017. On a sequential basis, the average yield on invested assets increased by seven basis points while the cost of money rose four basis points.
Average yield on invested assets was 4.54% in the third quarter of 2018 compared to 4.47% in the second quarter of 2018. This increase was primarily attributable to portfolio realignment actions taken throughout the year. Non-trendable investment items of 11 basis points compared to 10 basis points from such items in the second quarter of 2018. The average yield on fixed income securities purchased and commercial mortgage loans funded in the third quarter of 2018 was 4.97% compared to 4.77% and 4.43% in the second and first quarters of 2018.



The aggregate cost of money for annuity liabilities of 1.87% in the third quarter of 2018 was up four basis points from 1.83% in the second quarter of 2018. The benefit from over hedging index linked interest obligations was seven basis points in the third quarter of 2018 compared to six basis points in the second quarter of 2018.
Commenting on investment spread, Matovina said: “The sequential increase in investment spread in the third quarter primarily reflected a two basis point increase in the benefit from non-trendable investment income items and over-hedging. Our investment spread remained under pressure in the third quarter of 2018 due to the escalation of option costs for certain index strategies in the last several quarters that is recognized in the cost of money ratably over the twelve month option period. To counteract this impact, we initiated renewal rate adjustments on certain in-force policies in October in addition to the renewal rate actions we undertook in March. We have flexibility to reduce our crediting rates and could decrease our cost of money by approximately 0.65% through further reductions in renewal rates to guaranteed minimums should the cost of money not return to acceptable levels."
Matovina went on to say: "Our investment spread should benefit from the higher yields we have been obtaining on investment securities purchases and commercial mortgage loan fundings, increases in yields on our floating rate investments and changes in renewal rates. We are also looking to improve our investment yield through the opportunistic replacement of lower yielding securities with higher yielding securities. In early October, we sold $384 million in book value of securities with an average yield of 3.00%. Since we had declared our intent to sell these securities, we recognized other than temporary impairments of $12 million in the third quarter. Including the October transactions, we have sold $2 billion of book value of lower yielding securities this year and reinvested the proceeds into higher yielding securities. The prospect for higher investment yields is quite good, and we expect our portfolio yield, excluding non-trendable items, to increase in future quarters."

CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future operations, strategies, financial results or other developments, and are subject to assumptions, risks and uncertainties. Statements such as “guidance”, “expect”, “anticipate”, “believe”, “goal”, “objective”, “target”, “may”, “should”, “estimate”, “projects” or similar words as well as specific projections of future results qualify as forward-looking statements. Factors that may cause our actual results to differ materially from those contemplated by these forward looking statements can be found in the company’s Form 10-K filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statement was made and the company undertakes no obligation to update such forward-looking statements. There can be no assurance that other factors not currently anticipated by the company will not materially and adversely affect our results of operations. Investors are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf.
CONFERENCE CALL
American Equity will hold a conference call to discuss third quarter 2018 earnings on Tuesday, November 6, 2018 at 9:00 a.m. CT. The conference call will be webcast live on the Internet. Investors and interested parties who wish to listen to the call on the Internet may do so at www.american-equity.com.



The call may also be accessed by telephone at 855-865-0606, passcode 2779888 (international callers, please dial 704-859-4382). An audio replay will be available shortly after the call on AEL’s website. An audio replay will also be available via telephone through November 13, 2018 at 855-859-2056, passcode 2779888 (international callers will need to dial 404-537-3406).
ABOUT AMERICAN EQUITY
American Equity Investment Life Holding Company, through its wholly-owned operating subsidiaries, issues fixed annuity and life insurance products, with a primary emphasis on the sale of fixed index and fixed rate annuities. American Equity Investment Life Holding Company, a New York Stock Exchange Listed company (NYSE: AEL), is headquartered in West Des Moines, Iowa. For more information, please visit www.american-equity.com.
1    Use of non-GAAP financial measures is discussed in this release in the tables that follow the text of the release.
###



American Equity Investment Life Holding Company
Unaudited (Dollars in thousands, except per share data)



Consolidated Statements of Operations
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Premiums and other considerations
$
7,240

 
$
8,569

 
$
22,050

 
$
25,691

Annuity product charges
58,365

 
51,931

 
164,094

 
144,106

Net investment income
549,391

 
500,202

 
1,593,457

 
1,479,288

Change in fair value of derivatives
595,311

 
362,525

 
276,433

 
1,015,878

Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses
(2,196
)
 
1,579

 
(40,275
)
 
7,790

OTTI losses on investments:
 
 
 
 
 
 
 
Total OTTI losses
(14,373
)
 
(273
)
 
(16,025
)
 
(273
)
Portion of OTTI losses recognized in (from) other comprehensive income

 
(191
)
 
(1,651
)
 
(1,281
)
Net OTTI losses recognized in operations
(14,373
)
 
(464
)
 
(17,676
)
 
(1,554
)
Loss on extinguishment of debt

 
(18,389
)
 

 
(18,817
)
Total revenues
1,193,738

 
905,953

 
1,998,083

 
2,652,382

 
 
 
 
 
 
 
 
Benefits and expenses:
 
 
 
 
 
 
 
Insurance policy benefits and change in future policy benefits
10,721

 
10,823

 
32,091

 
32,684

Interest sensitive and index product benefits
413,089

 
501,028

 
1,355,135

 
1,392,763

Amortization of deferred sales inducements
55,244

 
14,707

 
233,779

 
110,727

Change in fair value of embedded derivatives
383,716

 
229,702

 
(585,465
)
 
628,845

Interest expense on notes and loan payable
6,376

 
7,597

 
19,122

 
23,997

Interest expense on subordinated debentures
3,942

 
3,502

 
11,450

 
10,260

Amortization of deferred policy acquisition costs
81,053

 
23,023

 
336,741

 
162,248

Other operating costs and expenses
31,924

 
28,782

 
95,704

 
82,325

Total benefits and expenses
986,065

 
819,164

 
1,498,557

 
2,443,849

Income before income taxes
207,673

 
86,789

 
499,526

 
208,533

Income tax expense
38,345

 
29,832

 
95,333

 
70,691

Net income
$
169,328

 
$
56,957

 
$
404,193

 
$
137,842

 
 
 
 
 
 
 
 
Earnings per common share
$
1.87

 
$
0.64

 
$
4.48

 
$
1.55

Earnings per common share - assuming dilution
$
1.85

 
$
0.63

 
$
4.42

 
$
1.53

 
 
 
 
 
 
 
 
Weighted average common shares outstanding (in thousands):
 
 
 
 
 
 
 
Earnings per common share
90,486

 
89,069

 
90,278

 
88,873

Earnings per common share - assuming dilution
91,651

 
90,421

 
91,355

 
90,171







Page 1


American Equity Investment Life Holding Company
Unaudited (Dollars in thousands, except per share data)



NON-GAAP FINANCIAL MEASURES
In addition to net income, the Company has consistently utilized non-GAAP operating income and non-GAAP operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate its financial performance. Non-GAAP operating income equals net income adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations, and the Company believes measures excluding their impact are useful in analyzing operating trends. The most significant adjustments to arrive at non-GAAP operating income eliminate the impact of fair value accounting for the Company's fixed index annuity business. These adjustments are not economic in nature but rather impact the timing of reported results. The Company believes the combined presentation and evaluation of non-GAAP operating income together with net income provides information that may enhance an investor’s understanding of its underlying results and profitability.
Reconciliation from Net Income to Non-GAAP Operating Income
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
169,328

 
$
56,957

 
$
404,193

 
$
137,842

Adjustments to arrive at non-GAAP operating income: (a)
 
 
 
 
 
 
 
Net realized investment (gains) losses, including OTTI
10,278

 
(916
)
 
35,925

 
(4,417
)
Change in fair value of derivatives and embedded derivatives - fixed index annuities
545

 
47,835

 
(108,367
)
 
116,383

Change in fair value of derivatives - debt
(597
)
 
(357
)
 
(3,168
)
 
(139
)
Income taxes
(8,491
)
 
(16,281
)
 
6,822

 
(39,127
)
Non-GAAP operating income
$
171,063

 
$
87,238

 
$
335,405

 
$
210,542

 
 
 
 
 
 
 
 
Per common share - assuming dilution:
 
 
 
 
 
 
 
Net income
$
1.85

 
$
0.63

 
$
4.42

 
$
1.53

Adjustments to arrive at non-GAAP operating income:
 
 
 
 
 
 
 
Net realized investment (gains) losses, including OTTI
0.11

 
(0.01
)
 
0.39

 
(0.05
)
Change in fair value of derivatives and embedded derivatives - fixed index annuities
0.01

 
0.52

 
(1.19
)
 
1.29

Change in fair value of derivatives - debt
(0.01
)
 

 
(0.03
)
 

Income taxes
(0.09
)
 
(0.18
)
 
0.08

 
(0.44
)
Non-GAAP operating income
$
1.87

 
$
0.96

 
$
3.67

 
$
2.33

(a)
Adjustments to net income to arrive at non-GAAP operating income are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable.


Page 2


American Equity Investment Life Holding Company
Unaudited (Dollars in thousands)



NON-GAAP FINANCIAL MEASURES
Average Stockholders' Equity and Return on Average Equity
Return on average equity measures how efficiently the Company generates profits from the resources provided by its net assets.  Return on average equity is calculated by dividing net income and non-GAAP operating income for the trailing twelve months by average equity excluding average accumulated other comprehensive income ("AOCI").  The Company excludes AOCI because AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments.
 
Twelve Months Ended
 
September 30, 2018
Average Stockholders' Equity
 
Average equity including average AOCI
$
2,625,982

Average AOCI
(364,890
)
Average equity excluding average AOCI
$
2,261,092

 
 
Net income
$
440,996

Non-GAAP operating income
409,913

 
 
Return on Average Equity Excluding Average AOCI
 
Net income
19.50
%
Non-GAAP operating income
18.13
%



Page 3
Exhibit

Exhibit 99.2



AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement

September 30, 2018


A.
Financial Highlights
 
 
 
 
 
Non-GAAP Financial Measures
 
 
 
 
 
 
 
 
 
 
B.
Product Summary
 
 
 
 
 
 
 
 
 
C.
Investment Summary
 
 
 
 
 
 
 
 
 
D.
 
 
 
E.





Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands)


AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
 
September 30, 2018
 
December 31, 2017
Assets
 
 
 
Investments:
 
 
 
Fixed maturity securities:
 
 
 
Available for sale, at fair value
$
45,822,017

 
$
45,372,989

Held for investment, at amortized cost
77,213

 
77,041

Mortgage loans on real estate
2,892,155

 
2,665,531

Derivative instruments
1,290,387

 
1,568,380

Other investments
536,594

 
616,764

Total investments
50,618,366

 
50,300,705

 
 
 
 
Cash and cash equivalents
1,129,242

 
1,434,045

Coinsurance deposits
5,017,255

 
4,858,289

Accrued investment income
481,999

 
429,008

Deferred policy acquisition costs
3,318,733

 
2,714,523

Deferred sales inducements
2,384,161

 
2,001,892

Deferred income taxes
250,734

 
38,147

Income taxes recoverable
13,712

 

Other assets
234,796

 
254,127

Total assets
$
63,448,998

 
$
62,030,736

 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
Liabilities:
 
 
 
Policy benefit reserves
$
57,992,164

 
$
56,142,673

Other policy funds and contract claims
271,765

 
282,884

Notes payable
494,464

 
494,093

Subordinated debentures
242,875

 
242,565

Amounts due under repurchase agreements
116,399

 

Income taxes payable

 
34,285

Other liabilities
1,842,035

 
1,984,079

Total liabilities
60,959,702

 
59,180,579

 
 
 
 
Stockholders' equity:
 
 
 
Common stock
90,278

 
89,331

Additional paid-in capital
807,310

 
791,446

Accumulated other comprehensive income
70,288

 
724,599

Retained earnings
1,521,420

 
1,244,781

Total stockholders' equity
2,489,296

 
2,850,157

Total liabilities and stockholders' equity
$
63,448,998

 
$
62,030,736




Page 1


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands, except per share data)


AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
Premiums and other considerations
$
7,240

 
$
8,569

 
$
22,050

 
$
25,691

Annuity product charges
58,365

 
51,931

 
164,094

 
144,106

Net investment income
549,391

 
500,202

 
1,593,457

 
1,479,288

Change in fair value of derivatives
595,311

 
362,525

 
276,433

 
1,015,878

Net realized gains (losses) on investments, excluding other than temporary impairment ("OTTI") losses
(2,196
)
 
1,579

 
(40,275
)
 
7,790

OTTI losses on investments:
 
 
 
 
 
 
 
Total OTTI losses
(14,373
)
 
(273
)
 
(16,025
)
 
(273
)
Portion of OTTI losses recognized in (from) other comprehensive income

 
(191
)
 
(1,651
)
 
(1,281
)
Net OTTI losses recognized in operations
(14,373
)
 
(464
)
 
(17,676
)
 
(1,554
)
Loss on extinguishment of debt

 
(18,389
)
 

 
(18,817
)
Total revenues
1,193,738

 
905,953

 
1,998,083

 
2,652,382

 
 
 
 
 
 
 
 
Benefits and expenses:
 
 
 
 
 
 
 
Insurance policy benefits and change in future policy benefits
10,721

 
10,823

 
32,091

 
32,684

Interest sensitive and index product benefits
413,089

 
501,028

 
1,355,135

 
1,392,763

Amortization of deferred sales inducements
55,244

 
14,707

 
233,779

 
110,727

Change in fair value of embedded derivatives
383,716

 
229,702

 
(585,465
)
 
628,845

Interest expense on notes and loan payable
6,376

 
7,597

 
19,122

 
23,997

Interest expense on subordinated debentures
3,942

 
3,502

 
11,450

 
10,260

Amortization of deferred policy acquisition costs
81,053

 
23,023

 
336,741

 
162,248

Other operating costs and expenses
31,924

 
28,782

 
95,704

 
82,325

Total benefits and expenses
986,065

 
819,164

 
1,498,557

 
2,443,849

Income before income taxes
207,673

 
86,789

 
499,526

 
208,533

Income tax expense
38,345

 
29,832

 
95,333

 
70,691

Net income
$
169,328

 
$
56,957

 
$
404,193

 
$
137,842

 
 
 
 
 
 
 
 
Earnings per common share
$
1.87

 
$
0.64

 
$
4.48

 
$
1.55

Earnings per common share - assuming dilution
$
1.85

 
$
0.63

 
$
4.42

 
$
1.53

 
 
 
 
 
 
 
 
Weighted average common shares outstanding (in thousands):
 
 
 
 
 
 
 
Earnings per common share
90,486

 
89,069

 
90,278

 
88,873

Earnings per common share - assuming dilution
91,651

 
90,421

 
91,355

 
90,171



Page 2


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands, except per share data)


Quarterly Summary - Most Recent 5 Quarters
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
Revenues:
 
 
 
 
 
 
 
 
 
Traditional life insurance premiums
$
807

 
$
910

 
$
972

 
$
2,989

 
$
2,832

Life contingent immediate annuity considerations
6,433

 
4,847

 
8,081

 
5,548

 
5,737

Surrender charges
17,132

 
16,520

 
16,282

 
13,573

 
13,521

Lifetime income benefit rider fees
41,233

 
38,486

 
34,441

 
42,815

 
38,410

Net investment income
549,391

 
533,282

 
510,784

 
512,709

 
500,202

Change in fair value of derivatives
595,311

 
132,205

 
(451,083
)
 
661,993

 
362,525

Net realized gains (losses) on investments, excluding OTTI
(2,196
)
 
(38,381
)
 
302

 
2,719

 
1,579

Net OTTI losses recognized in operations
(14,373
)
 
(2,396
)
 
(907
)
 
(3,076
)
 
(464
)
Loss on extinguishment of debt (a)

 

 

 

 
(18,389
)
Total revenues
1,193,738

 
685,473

 
118,872

 
1,239,270

 
905,953

 
 
 
 
 
 
 
 
 
 
Benefits and expenses:
 
 
 
 
 
 
 
 
 
Traditional life insurance policy benefits and change in future policy benefits
838

 
981

 
821

 
1,528

 
1,898

Life contingent immediate annuity benefits and change in future policy benefits
9,883

 
8,295

 
11,273

 
9,007

 
8,925

Interest sensitive and index product benefits (b)
413,089

 
427,951

 
514,095

 
630,905

 
501,028

Amortization of deferred sales inducements (c)
55,244

 
78,112

 
100,423

 
65,885

 
14,707

Change in fair value of embedded derivatives
383,716

 
(101,949
)
 
(867,232
)
 
290,890

 
229,702

Interest expense on notes and loan payable
6,376

 
6,374

 
6,372

 
6,371

 
7,597

Interest expense on subordinated debentures
3,942

 
3,878

 
3,630

 
3,864

 
3,502

Amortization of deferred policy acquisition costs (c)
81,053

 
115,049

 
140,639

 
93,716

 
23,023

Other operating costs and expenses
31,924

 
32,540

 
31,240

 
29,366

 
28,782

Total benefits and expenses
986,065

 
571,231

 
(58,739
)
 
1,131,532

 
819,164

Income before income taxes
207,673

 
114,242

 
177,611

 
107,738

 
86,789

Income tax expense (d)(e)
38,345

 
20,339

 
36,649

 
70,935

 
29,832

Net income (a)(b)(c)(d)(e)
$
169,328

 
$
93,903

 
$
140,962

 
$
36,803

 
$
56,957

 
 
 
 
 
 
 
 
 
 
Earnings per common share
$
1.87

 
$
1.04

 
$
1.57

 
$
0.41

 
$
0.64

Earnings per common share - assuming dilution (a)(b)(c)(d)(e)
$
1.85

 
$
1.03

 
$
1.55

 
$
0.41

 
$
0.63

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding (thousands):
 
 
 
 
 
 
 
 
 
Earnings per common share
90,486

 
90,327

 
90,017

 
89,308

 
89,069

Earnings per common share - assuming dilution
91,651

 
91,271

 
91,139

 
90,727

 
90,421

(a)
Q3 2017 includes a loss on the extinguishment of our 6.625% Notes due in 2021. The loss decreased net income and earnings per common share - assuming dilution by $10.8 million and $0.12 per share, respectively.
(b)
Q3 2018 includes a benefit from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact decreased interest sensitive and index product benefits by $53.6 million and increased net income and earnings per common share - assuming dilution by $42.0 million and $0.46 per share, respectively.
Q3 2017 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index product benefits by $21.6 million and decreased net income and earnings per common share - assuming dilution by $13.9 million and $0.15 per share, respectively.
(c)
Q3 2018 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $21.5 million and $30.6 million, respectively, and increased net income and earnings per common share - assuming dilution by $40.8 million and $0.45 per share, respectively.
Q3 2017 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $34.3 million and $48.2 million, respectively, and increased net income and earnings per common share - assuming dilution by $53.1 million and $0.59 per share, respectively.
(d)
Q3 2018 includes an income tax benefit from a worthless stock deduction related to a wholly-owned subsidiary which increased net income and earnings per common share - assuming dilution by $7.4 million and $0.08 per share, respectively.
(e)
Q4 2017 includes income tax expense related to the revaluation of our deferred tax assets and liabilities using the newly enacted federal tax rate resulting from the Tax Cuts and Jobs Act of 2017. The change in the federal income tax rate decreased net income and earnings per common share - assuming dilution by $35.9 million and $0.40 per share, respectively.

Page 3


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands, except per share data)


NON-GAAP FINANCIAL MEASURES
In addition to net income, we have consistently utilized non-GAAP operating income and non-GAAP operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance. Non-GAAP operating income equals net income adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations, and we believe measures excluding their impact are useful in analyzing operating trends. The most significant adjustments to arrive at non-GAAP operating income eliminate the impact of fair value accounting for our fixed index annuity business. These adjustments are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of non-GAAP operating income together with net income provides information that may enhance an investor’s understanding of our underlying results and profitability.
Reconciliation from Net Income to Non-GAAP Operating Income
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Net income
$
169,328

 
$
56,957

 
$
404,193

 
$
137,842

Adjustments to arrive at non-GAAP operating income: (a)
 
 
 
 
 
 
 
Net realized investment (gains) losses, including OTTI
10,278

 
(916
)
 
35,925

 
(4,417
)
Change in fair value of derivatives and embedded derivatives - fixed index annuities
545

 
47,835

 
(108,367
)
 
116,383

Change in fair value of derivatives - debt
(597
)
 
(357
)
 
(3,168
)
 
(139
)
Income taxes
(8,491
)
 
(16,281
)
 
6,822

 
(39,127
)
Non-GAAP operating income
$
171,063

 
$
87,238

 
$
335,405

 
$
210,542

 
 
 
 
 
 
 
 
Per common share - assuming dilution:
 
 
 
 
 
 
 
Net income
$
1.85

 
$
0.63

 
$
4.42

 
$
1.53

Adjustments to arrive at non-GAAP operating income:
 
 
 
 
 
 
 
Net realized investment (gains) losses, including OTTI
0.11

 
(0.01
)
 
0.39

 
(0.05
)
Change in fair value of derivatives and embedded derivatives - fixed index annuities
0.01

 
0.52

 
(1.19
)
 
1.29

Change in fair value of derivatives - debt
(0.01
)
 

 
(0.03
)
 

Income taxes
(0.09
)
 
(0.18
)
 
0.08

 
(0.44
)
Non-GAAP operating income
$
1.87

 
$
0.96

 
$
3.67

 
$
2.33

(a)
Adjustments to net income to arrive at non-GAAP operating income are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable.

Page 4


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands)


NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Non-GAAP Operating Income
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2018
 
2017
 
2018
 
2017
Net realized investment gains and losses, including OTTI:
 
 
 
 
 
 
 
Net realized (gains) losses on investments, including OTTI
$
16,569

 
$
(1,115
)
 
$
57,951

 
$
(6,236
)
Amortization of DAC and DSI
(6,291
)
 
199

 
(22,026
)
 
1,819

Income taxes
(1,187
)
 
326

 
(9,908
)
 
1,572

 
$
9,091

 
$
(590
)
 
$
26,017

 
$
(2,845
)
Change in fair value of derivatives and embedded derivatives:
 
 
 
 
 
 
 
Index annuities
$
(24,367
)
 
$
99,909

 
$
(254,647
)
 
$
262,635

Interest rate caps and swap
(597
)
 
(357
)
 
(3,168
)
 
(139
)
Amortization of DAC and DSI
24,912

 
(52,074
)
 
146,280

 
(146,252
)
Income taxes
144

 
(16,607
)
 
24,178

 
(40,699
)
 
$
92

 
$
30,871

 
$
(87,357
)
 
$
75,545

Worthless stock deduction:
 
 
 
 
 
 
 
Income taxes
$
(7,448
)
 
$

 
$
(7,448
)
 
$



Page 5


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands, except per share data)


NON-GAAP FINANCIAL MEASURES
Quarterly Summary - Most Recent 5 Quarters
Reconciliation from Net Income to Non-GAAP Operating Income
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
Net income (a)
$
169,328

 
$
93,903

 
$
140,962

 
$
36,803

 
$
56,957

Adjustments to arrive at non-GAAP operating income: (b)
 
 
 
 
 
 
 
 
 
Net realized investment (gains) losses, including OTTI
10,278

 
25,624

 
23

 
(676
)
 
(916
)
Change in fair value of derivatives and embedded derivatives -
fixed index annuities
545

 
(30,094
)
 
(78,818
)
 
5,463

 
47,835

Change in fair value of derivatives - debt
(597
)
 
(739
)
 
(1,832
)
 
(1,085
)
 
(357
)
Income taxes (a)
(8,491
)
 
(2,046
)
 
17,359

 
34,003

 
(16,281
)
Non-GAAP operating income (c)(d)(e)
$
171,063

 
$
86,648

 
$
77,694

 
$
74,508

 
$
87,238

 
 
 
 
 
 
 
 
 
 
Per common share - assuming dilution:
 
 
 
 
 
 
 
 
 
Net income (a)
$
1.85

 
$
1.03

 
$
1.55

 
$
0.41

 
$
0.63

Adjustments to arrive at non-GAAP operating income: (b)
 
 
 
 
 
 
 
 
 
Net realized investment (gains) losses, including OTTI
0.11

 
0.28

 

 
(0.01
)
 
(0.01
)
Change in fair value of derivatives and embedded derivatives - fixed index annuities
0.01

 
(0.33
)
 
(0.87
)
 
0.06

 
0.52

Change in fair value of derivatives - debt
(0.01
)
 
(0.01
)
 
(0.02
)
 
(0.01
)
 

Income taxes (a)
(0.09
)
 
(0.02
)
 
0.19

 
0.37

 
(0.18
)
Non-GAAP operating income (c)(d)(e)
$
1.87

 
$
0.95

 
$
0.85

 
$
0.82

 
$
0.96

(a)
Q4 2017 includes income tax expense related to the revaluation of our deferred tax assets and liabilities using the newly enacted federal tax rate resulting from the Tax Cuts and Jobs Act of 2017 ("Tax Reform"). The change in the federal income tax rate decreased net income and earnings per common share - assuming dilution by $35.9 million and $0.40 per share, respectively. The impact of Tax Reform has been excluded from non-GAAP operating income.
(b)
Adjustments to net income to arrive at non-GAAP operating income are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs where applicable.
(c)
Q3 2018 includes a benefit from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact decreased interest sensitive and index product benefits by $53.6 million and increased non-GAAP operating income and non-GAAP operating income per common share - assuming dilution by $42.0 million and $0.46 per share, respectively.
Q3 2017 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index product benefits by $21.6 million and decreased non-GAAP operating income and non-GAAP operating income per common share - assuming dilution by $13.9 million and $0.15 per share, respectively.
(d)
Q3 2018 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $20.5 million and $28.7 million, respectively, and increased non-GAAP operating income and non-GAAP operating income per common share- assuming dilution by $38.5 million and $0.42 per share, respectively.
Q3 2017 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $31.3 million and $43.7 million, respectively, and increased non-GAAP operating income and non-GAAP operating income per common share- assuming dilution by $48.3 million and $0.53 per share, respectively.
(e)
Q3 2017 includes a loss on the extinguishment of our 6.625% Notes due in 2021. The loss decreased non-GAAP operating income and non-GAAP operating income per common share - assuming dilution by $10.8 million and $0.12 per share, respectively.

Page 6


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands)


NON-GAAP FINANCIAL MEASURES
Summary of Adjustments to Arrive at Non-GAAP Operating Income
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
Net realized (gains) losses on investments
$
2,196

 
$
38,381

 
$
(302
)
 
$
(2,719
)
 
$
(1,579
)
Net OTTI losses recognized in operations
14,373

 
2,396

 
907

 
3,076

 
464

Change in fair value of derivatives
(408,680
)
 
28,741

 
707,589

 
(283,801
)
 
(130,150
)
Increase (decrease) in total revenues
(392,111
)
 
69,518

 
708,194

 
(283,444
)
 
(131,265
)
 
 
 
 
 
 
 
 
 
 
Amortization of deferred sales inducements
(7,219
)
 
(9,888
)
 
(33,212
)
 
1,499

 
22,442

Change in fair value of embedded derivatives
(383,716
)
 
101,949

 
867,232

 
(290,890
)
 
(229,702
)
Amortization of deferred policy acquisition costs
(11,402
)
 
(17,334
)
 
(45,199
)
 
2,245

 
29,433

Increase (decrease) in total benefits and expenses
(402,337
)
 
74,727

 
788,821

 
(287,146
)
 
(177,827
)
Increase (decrease) in income before income taxes
10,226

 
(5,209
)
 
(80,627
)
 
3,702

 
46,562

Increase (decrease) in income tax expense
8,491

 
2,046

 
(17,359
)
 
(34,003
)
 
16,281

Increase (decrease) in net income
$
1,735

 
$
(7,255
)
 
$
(63,268
)
 
$
37,705

 
$
30,281


Page 7


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands, except share and per share data)


Capitalization/Book Value per Share
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
Capitalization:
 
 
 
 
 
 
 
 
 
Notes and loan payable
$
500,000

 
$
500,000

 
$
500,000

 
$
500,000

 
$
500,000

Subordinated debentures payable to subsidiary trusts
247,096

 
247,032

 
246,969

 
246,908

 
246,847

Total debt
747,096

 
747,032


746,969


746,908


746,847

Total stockholders’ equity
2,489,296

 
2,426,825

 
2,546,990

 
2,850,157

 
2,762,667

Total capitalization
3,236,392

 
3,173,857


3,293,959


3,597,065


3,509,514

Accumulated other comprehensive income (AOCI)
(70,288
)
 
(180,406
)
 
(399,982
)
 
(724,599
)
 
(659,491
)
Total capitalization excluding AOCI (a)
$
3,166,104

 
$
2,993,451


$
2,893,977


$
2,872,466


$
2,850,023

 
 
 
 
 
 
 
 
 
 
Total stockholders’ equity
$
2,489,296

 
$
2,426,825


$
2,546,990


$
2,850,157


$
2,762,667

Accumulated other comprehensive income
(70,288
)
 
(180,406
)

(399,982
)

(724,599
)

(659,491
)
Total stockholders’ equity excluding AOCI (a)
$
2,419,008

 
$
2,246,419


$
2,147,008


$
2,125,558


$
2,103,176

 
 
 
 
 
 
 
 
 
 
Common shares outstanding
90,277,626

 
90,233,346

 
89,983,823

 
89,331,087

 
88,948,986

 
 
 
 
 
 
 
 
 
 
Book Value per Share: (b)
 
 
 
 
 
 
 
 
 
Book value per share including AOCI
$
27.57

 
$
26.89


$
28.30


$
31.91


$
31.06

Book value per share excluding AOCI (a)
$
26.80

 
$
24.90


$
23.86


$
23.79


$
23.64

 
 
 
 
 
 
 
 
 
 
Debt-to-Capital Ratios: (c)
 
 
 
 
 
 
 
 
 
Senior debt / Total capitalization
15.8
%
 
16.7
%

17.3
%

17.4
%

17.5
%
Adjusted debt / Total capitalization
15.8
%
 
16.7
%
 
17.3
%
 
17.4
%
 
17.5
%
(a)
Total capitalization, total stockholders’ equity and book value per share excluding AOCI, non-GAAP financial measures, are based on stockholders’ equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments, we believe these non-GAAP financial measures provide useful supplemental information.
(b)
Book value per share including and excluding AOCI is calculated as total stockholders’ equity and total stockholders’ equity excluding AOCI divided by the total number of shares of common stock outstanding.
(c)
Debt-to-capital ratios are computed using total capitalization excluding AOCI. Adjusted debt includes notes and loan payable and the portion of the total subordinated debentures payable to subsidiary trusts outstanding (qualifying trust preferred securities) that exceeds 15% of total capitalization excluding AOCI.

Page 8


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands)


Spread Results
Nine Months Ended 
 September 30,
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
4.46%
 
4.45%
Average yield on invested assets
4.54%
 
4.47%
 
4.36%
 
4.47%
 
4.43%
1.84%
 
1.75%
Aggregate cost of money
1.87%
 
1.83%
 
1.82%
 
1.72%
 
1.73%
2.62%
 
2.70%
Aggregate investment spread
2.67%
 
2.64%
 
2.54%
 
2.75%
 
2.70%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impact of:
 
 
 
 
 
 
 
 
 
0.08%
 
0.06%
Investment yield - additional prepayment income
0.11%
 
0.07%
 
0.03%
 
0.11%
 
0.05%
0.05%
 
0.06%
Cost of money effect of over hedging
0.07%
 
0.06%
 
0.02%
 
0.08%
 
0.06%
 
 
 
 
 
 
 
 
 
 
 
 
 
$47,720,190
 
$44,386,981
Weighted average investments
$48,466,817
 
$47,795,388
 
$46,898,365
 
$46,031,966
 
$45,228,136
Weighted average investments include fixed maturity securities at amortized cost and equity securities at cost. The numerator for average yield on invested assets includes net investment income and the tax effect of investment income that is exempt from income taxes.
Summary of Cost of Money for Deferred Annuities
Nine Months Ended 
 September 30,
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
 
 
 
Included in interest sensitive and index product benefits:
 
 
 
 
 
 
 
 
 
$
1,127,556

 
$
1,068,522

Index credits
$
369,011

 
$
334,605

 
$
423,940

 
$
526,200

 
$
375,019

160,607

 
190,833

Interest credited
52,618

 
52,922

 
55,067

 
59,065

 
62,725

 
 
 
Included in change in fair value of derivatives:
 
 
 
 
 
 
 
 
 
(1,145,322
)
 
(1,088,018
)
Proceeds received at option expiration
(378,149
)
 
(341,616
)
 
(425,557
)
 
(535,328
)
 
(382,949
)
540,559

 
437,208

Pro rata amortization of option cost
191,362

 
180,465

 
168,732

 
156,782

 
150,163

$
683,400

 
$
608,545

Cost of money for deferred annuities
$
234,842

 
$
226,376


$
222,182


$
206,719


$
204,958

 
 
 
 
 
 
 
 
 
 
 
 
 
$
49,530,043

 
$
46,457,851

Weighted average liability balance outstanding
$
50,273,893

 
$
49,541,746

 
$
48,774,490

 
$
48,014,427

 
$
47,281,417

Annuity Account Balance Rollforward
Nine Months Ended 
 September 30,
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
$
48,400,755

 
$
45,204,015

Account balances at beginning of period
$
49,935,266

 
$
49,148,224

 
$
48,400,755

 
$
47,628,099

 
$
46,934,736

2,927,071

 
2,890,032

Net deposits
929,480

 
1,066,857

 
930,734

 
874,952

 
826,885

135,015

 
175,074

Premium bonuses
41,878

 
49,467

 
43,670

 
41,098

 
46,982

1,288,163

 
1,259,355

Fixed interest credited and index credits
421,629

 
387,527

 
479,007

 
585,265

 
437,744

(49,934
)
 
(41,051
)
Surrender charges
(17,132
)
 
(16,520
)
 
(16,282
)
 
(13,573
)
 
(13,521
)
(114,160
)
 
(103,055
)
Lifetime income benefit rider fees
(41,233
)
 
(38,486
)
 
(34,441
)
 
(42,815
)
 
(38,410
)
(1,974,391
)
 
(1,756,271
)
Surrenders, withdrawals, deaths, etc.
(657,369
)
 
(661,803
)
 
(655,219
)
 
(672,271
)
 
(566,317
)
$
50,612,519

 
$
47,628,099

Account balances at end of period
$
50,612,519

 
$
49,935,266

 
$
49,148,224

 
$
48,400,755

 
$
47,628,099


Page 9


Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
Financial Supplement - September 30, 2018
Unaudited (Dollars in thousands)


Annuity Deposits by Product Type
Nine Months Ended 
 September 30,
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
Q3 2018
 
Q2 2018
 
Q1 2018
 
Q4 2017
 
Q3 2017
 
 
 
American Equity:
 
 
 
 
 
 
 
 
 
$
2,616,784

 
$
2,632,984

Fixed index annuities
$
830,759

 
$
952,675

 
$
833,350

 
$
757,160

 
$
738,257

40,062

 
55,855

Annual reset fixed rate annuities
8,390

 
15,455

 
16,217

 
18,974

 
20,142

3,249

 
19,651

Multi-year fixed rate annuities
360

 
888

 
2,001

 
3,773

 
5,717

20,920

 
17,037

Single premium immediate annuities
4,977

 
5,313

 
10,630

 
7,909

 
6,505

2,681,015

 
2,725,527

 
844,486

 
974,331

 
862,198

 
787,816

 
770,621

 
 
 
Eagle Life:
 
 
 
 
 
 
 
 
 
497,554

 
388,807

Fixed index annuities
163,871

 
173,119

 
160,564

 
187,888

 
133,503

1,071

 

Annual reset fixed rate annuities
450

 
348

 
273

 

 

96,294

 
54,219

Multi-year fixed rate annuities
34,851

 
53,419

 
8,024

 
32,953

 
10,717

594,919

 
443,026

 
199,172

 
226,886

 
168,861

 
220,841

 
144,220

 
 
 
Consolidated:
 
 
 
 
 
 
 
 
 
3,114,338

 
3,021,791

Fixed index annuities
994,630

 
1,125,794

 
993,914

 
945,048

 
871,760

41,133

 
55,855

Annual reset fixed rate annuities
8,840


15,803


16,490


18,974


20,142

99,543

 
73,870

Multi-year fixed rate annuities
35,211

 
54,307

 
10,025

 
36,726

 
16,434

20,920

 
17,037

Single premium immediate annuities
4,977

 
5,313

 
10,630

 
7,909

 
6,505

3,275,934

 
3,168,553

Total before coinsurance ceded
1,043,658

 
1,201,217

 
1,031,059

 
1,008,657

 
914,841

327,943

 
261,484

Coinsurance ceded
109,201

 
129,047

 
89,695

 
125,796

 
81,451

$
2,947,991

 
$
2,907,069

Net after coinsurance ceded
$
934,457

 
$
1,072,170

 
$
941,364

 
$
882,861

 
$
833,390

Surrender Charge Protection and Account Values by Product Type
Annuity Surrender Charges and Net (of Coinsurance) Account Values at September 30, 2018:
 
 
Surrender Charge
 
Net Account Value
Product Type
 
Avg.
Years
At Issue
 
Avg.
Years
Remaining
 
Avg.
%
Remaining
 
Dollars in Thousands
 
%
Fixed Index Annuities
 
13.4
 
7.8
 
12.6%