SEC Filing | American Equity Investment Life Holding Company

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ael-20210805

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): August 05, 2021

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, IA 50266

(Address of principal executive offices and 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:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $1

AEL

New York Stock Exchange

Depositary Shares, each representing a 1/1,000th interest in a share of 5.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series A

AELPRA

New York Stock Exchange

Depositary Shares, each representing a 1/1,000th interest in a share of 6.625% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series B

AELPRB

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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. ☐

Item 2.02 Results of Operations and Financial Condition

On August 5, 2021, the registrant issued a press release announcing its financial results for the quarter ended June 30, 2021, 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 June 30, 2021, 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


Exhibit Number						Description
99.1						Press release dated August 5, 2021, announcing American Equity Investment Life Holding Company's financial results for the quarter ended June 30, 2021.
99.2						American Equity Investment Life Holding Company's Financial Supplement for the quarter ended June 30, 2021.
104						The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

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: August 5, 2021


			AMERICAN EQUITY
			INVESTMENT LIFE HOLDING COMPANY


			By:			/s/ Scott A. Samuelson
						Scott A. Samuelson
						Vice President and Chief Accounting Officer

Document

Exhibit 99.1


						For more information, contact:

						Steven D. Schwartz, Vice President-Investor Relations
						(515) 273-3763, sschwartz@american-equity.com


FOR IMMEDIATE RELEASE
August 5, 2021

American Equity Reports Second Quarter 2021 Results

Company Highlights

•Second quarter 2021 annuity sales of $1.2 billion driven by strong growth in fixed index annuity (FIA) sales

•Policyholder funds under management increased by 1.5% to $56.6 billion

•Deployed $569 million in private assets in the quarter as part of plans to ramp to 30% asset allocation over time

•Share repurchase of $95.1 million, fully offsetting dilution from 4Q 2020 Brookfield equity issuance

•Second quarter 2021 net loss available to common stockholders of $(65.6) million or $(0.69) per diluted common share compared to net loss available to common stockholders of $(253.4) million, or $(2.76) per diluted common share, for the second quarter of 2020 driven in both periods by reductions in discount rates used in the calculation of fair value of fixed index annuity policy benefit reserves

•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

•Trailing twelve-month return on average common stockholders' equity of 17.5%; Trailing twelve-month non-GAAP operating return1 on average common stockholders' equity excluding average AOCI1 of (1.4)% based on reported results and 9.1% excluding impact of notable items2

WEST DES MOINES, Iowa (August 5, 2021) - American Equity Investment Life Holding Company (NYSE: AEL), a leading issuer of fixed index annuities (FIAs) today reported second quarter 2021 non-GAAP operating income1 available to common stockholders of $93.8 million, or $0.98 per diluted common share, compared to non-GAAP operating income1 available to common stockholders of $93.1 million, or $1.01 per diluted common share, for second quarter 2020.

The year-over-year increase in quarterly non-GAAP operating income1 available to common stockholders primarily reflected a decrease in the change in the liability for future policy benefits to be paid for lifetime income benefit riders (LIBR) offset by a decrease in investment spread and an increase in other operating costs and expenses.

Year-over-year, the change in liability for future policy benefits to be paid for LIBR decreased by $61 million. The positive difference between actual versus modeled expectations in the second quarter of 2021, primarily reflecting the level of equity index credits, reduced the increase in the liability for future policy benefits to be paid for LIBR by $29 million. By comparison, in the second quarter of 2020, actual versus modeled expectations increased the change in liability for future policy benefits to be paid for LIBR by $43 million.

Compared to the second quarter of 2020, amortization of deferred policy acquisition and sales inducement costs decreased $1 million. Actual versus modeled expectations in the second quarter of 2021, primarily reflecting the level of equity index credits, reduced amortization by $31 million. Amortization of deferred sales inducements and policy acquisition costs benefited by $28 million in the second quarter of 2020 from actual versus modeled expectations.

CONTINUED DEPLOYMENT INTO PRIVATE ASSETS AS PART OF RAMPING TO 30% ASSET ALLOCATION OVER TIME

American Equity’s investment spread was 1.95% for the second quarter of 2021 compared to 2.00% for the first quarter of 2021 and 2.39% for the second quarter of 2020. On a sequential basis, the average yield on invested assets decreased by 7 basis points while the cost of money fell by 2 basis points. Adjusted investment spread excluding non-trendable items3 declined to 1.81% in the second quarter of 2021 from 1.87% in the first quarter of 2021.

Average yield on invested assets was 3.51% in the second quarter of 2021 compared to 3.58% in the first quarter of 2021. The decrease in investment yield was primarily driven by an increase in the average level of liquidity in the investment portfolios of the life insurance companies. The average adjusted yield on invested assets excluding non-trendable items3 was 3.41% in the second quarter of 2021 compared to 3.47% in the first quarter of 2021.

The aggregate cost of money for annuity liabilities of 1.56% in the second quarter of 2021 was down 2 basis points from 1.58% in the first quarter of 2021. The cost of money in the second quarter of 2021 was positively affected by 4 basis points of over-hedging of index-linked credits compared to 2 basis point of hedge gain in the first quarter of 2021.

Commenting on investment activities, Anant Bhalla, Chief Executive Officer, said: "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."

Bhalla continued: "For any strategy migration, there are short-term impacts for longer-term gains. For American Equity, this has manifested itself in higher cash balances. The decrease in average yield on investment assets was primarily attributable to a 7-basis point reduction from interest foregone due to an increase in the average amount of cash held in the life insurance company portfolios in the quarter. Cash and equivalents averaged $10.0 billion in the second quarter of 2021 compared to $8.6 billion in the first quarter of 2021. At June

30, cash and equivalents in the life insurance company portfolios were $10 billion. While we expect to continue to ramp up private assets with strong positive net cash flows in 2022, we are also planning to deploy most of the cash balances above our target cash levels into traditional fixed income investments over the next six months."

FUNDS UNDER MANAGEMENT INCREASE 1.5% ON $1.2 BILLION OF SALES DRIVEN BY FIA

Policyholder funds under management at June 30, 2021 were $56.6 billion, an $817 million, or 1.5% increase from March 31, 2021. Second quarter gross sales were $1,180 million, representing an increase of 111% from the second quarter 2020 sales level. On a sequential basis, gross sales decreased 52% from the all-time record level set in the first quarter of 2021. Compared to the first quarter of 2021, gross sales of fixed index annuities at American Equity Life increased 36% while Eagle Life sales rose 24%.

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."

AMERICAN EQUITY COMPLETES INITIAL 9.1 MILLION SHARE REPURCHASE

In July, American Equity completed the repurchase of 9.1 million shares that began in November of last year to fully offset the impact of dilution from shares issued to Brookfield Asset Management Inc. The total buyback included repurchase of 3 million shares in the second quarter for a total of $95.1 million. Remaining share repurchase authorization is $236 million.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

The forward-looking statements in this release, such as believe, evolve, expect, intend, may, plan, ramping towards, strategy, or similar words, as well as specific projections of future results, are based on assumptions and expectations that involve risks and uncertainties, including the "Risk Factors" the company describes in its U.S. Securities and Exchange Commission filings. The Company's future results could differ, and it has no obligation to correct or update any of these statements.

CONFERENCE CALL

American Equity will hold a conference call to discuss second quarter 2021 earnings on Friday, August 6, at 10:00 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 5148835 (international callers, please dial 704-859-4382). An audio replay will be available shortly after the call on American Equity's website. An audio replay will also be available via telephone through August 13, 2021 at 855-859-2056, passcode 5148835 (international callers will need to dial 404-537-3406).

ABOUT AMERICAN EQUITY

American Equity Investment Life Holding Company, through its wholly-owned subsidiaries, is a leading issuer of fixed index annuities through independent agents, banks and broker-dealers. 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.

2 Pertinent notable items consist of $340,895 impact related to actuarial assumption updates made in Q3 2020. The presentation of notable items is intended to help investors better understand our results and to evaluate and forecast those results. For more information, see page 6 of our June 30, 2021 financial supplement.

3 Non-trendable items are the impact of investment yield – additional prepayment income and cost of money effect of over (under) hedging as shown in our June 30, 2021 financial supplement on page 9, “Spread Results”.

###

American Equity Investment Life Holding Company

Unaudited (Dollars in thousands, except per share data)

Consolidated Statements of Operations


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenues:
Premiums and other considerations	$	14,595	$	11,032	$	27,808	$	18,696
Annuity product charges	63,759		63,438		123,841		122,987
Net investment income	499,320		543,704		996,510		1,117,022
Change in fair value of derivatives	500,880		327,662		897,185		(614,212)
Net realized losses on investments	(3,114)		(25,888)		(7,697)		(46,224)




Loss on extinguishment of debt	—		—		—		(2,024)
Total revenues	1,075,440		919,948		2,037,647		596,245

Benefits and expenses:
Insurance policy benefits and change in future policy benefits	15,828		13,331		32,252		23,403
Interest sensitive and index product benefits	812,981		240,992		1,289,576		641,211
Amortization of deferred sales inducements	(12,520)		(75,178)		110,455		(1,587)
Change in fair value of embedded derivatives	273,713		1,126,935		(8,700)		(123,126)
Interest expense on notes payable	6,394		6,388		12,787		12,773
Interest expense on subordinated debentures	1,326		1,321		2,652		2,909

Amortization of deferred policy acquisition costs	(16,906)		(119,889)		186,917		813
Other operating costs and expenses	65,050		41,951		120,915		85,577
Total benefits and expenses	1,145,866		1,235,851		1,746,854		641,973
Income (loss) before income taxes	(70,426)		(315,903)		290,793		(45,728)
Income tax expense (benefit)	(15,732)		(68,474)		62,803		(41,246)
Net income (loss)	(54,694)		(247,429)		227,990		(4,482)
Less: Preferred stock dividends	10,919		5,950		21,838		12,561
Net income (loss) available to common stockholders	$	(65,613)	$	(253,379)	$	206,152	$	(17,043)

Earnings (loss) per common share	$	(0.69)	$	(2.76)	$	2.16	$	(0.19)
Earnings (loss) per common share - assuming dilution	$	(0.69)	$	(2.76)	$	2.15	$	(0.19)

Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	94,801		91,803		95,265		91,724
Earnings (loss) per common share - assuming dilution	95,379		92,027		95,795		92,024

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 (loss) available to common stockholders, we have consistently utilized non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders 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 available to common stockholders equals net income (loss) available to common stockholders 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 available to common stockholders 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 available to common stockholders together with net income (loss) available to common stockholders provides information that may enhance an investor’s understanding of our underlying results and profitability.

Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income Available to Common Stockholders and Non-GAAP Operating Income Available to Common Stockholders, Excluding Notable Items


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income (loss) available to common stockholders	$	(65,613)	$	(253,379)	$	206,152	$	(17,043)
Adjustments to arrive at non-GAAP operating income available to common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses	2,912		18,492		6,428		34,841
Change in fair value of derivatives and embedded derivatives - fixed index annuities	200,767		423,590		(96,867)		303,136
Change in fair value of derivatives - interest rate caps and swap	—		—		—		(848)


Income taxes	(44,278)		(95,599)		19,516		(72,897)
Non-GAAP operating income available to common stockholders	93,788		93,104		135,229		247,189
Impact of notable items (b)	—		—		—		(30,778)
Non-GAAP operating income available to common stockholders, excluding notable items	$	93,788	$	93,104	$	135,229	$	216,411

Per common share - assuming dilution:
Net income (loss) available to common stockholders	$	(0.69)	$	(2.76)	$	2.15	$	(0.19)
Adjustments to arrive at non-GAAP operating income available to common stockholders:
Anti-dilutive effect of net loss	—		0.01		—		—

Net realized gains/losses on financial assets, including credit losses	0.03		0.20		0.07		0.38
Change in fair value of derivatives and embedded derivatives - fixed index annuities	2.10		4.60		(1.01)		3.30
Change in fair value of derivatives - interest rate caps and swap	—		—		—		(0.01)


Income taxes	(0.46)		(1.04)		0.20		(0.79)
Non-GAAP operating income available to common stockholders	0.98		1.01		1.41		2.69
Impact of notable items	—		—		—		(0.33)
Non-GAAP operating income available to common stockholders, excluding notable items	$	0.98	$	1.01	$	1.41	$	2.36

Notable Items


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Notable items impacting non-GAAP operating income available to common stockholders:


Tax benefit related to the CARES Act	$	—	$	—	$	—	$	(30,778)
Total notable items (b)	$	—	$	—	$	—	$	(30,778)

(a)Adjustments to net income (loss) available to common stockholders to arrive at non-GAAP operating income available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs and accretion of lifetime income benefit rider (LIBR) reserves where applicable.

(b)Notable items reflect the after-tax impact to non-GAAP operating income available to common stockholders for certain items that do not reflect the company's expected ongoing operations. Notable items include the impact from actuarial assumption updates, certain initial uncapitalized costs to establish the AEL 2.0 strategy, and initial non-deferred impacts related to reinsurance transactions. The presentation of notable items is intended to help investors better understand our results and to evaluate and forecast those results.

Page 2

American Equity Investment Life Holding Company

Unaudited (Dollars in thousands, except share and per share data)

Book Value per Common Share


	Q2 2021









Total stockholders’ equity	$	6,295,735
Equity available to preferred stockholders (a)	(700,000)
Total common stockholders' equity (b)	5,595,735
Accumulated other comprehensive income	(2,023,911)
Total common stockholders’ equity excluding AOCI (b)	3,571,824
Net impact of fair value accounting for derivatives and embedded derivatives	(242,423)
Total common stockholders’ equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives (b)	$	3,329,401

Common shares outstanding	92,553,825

Book Value per Common Share: (c)
Book value per common share	$	60.46
Book value per common share excluding AOCI (b)	$	38.59
Book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives (b)	$	35.97

(a)Equity available to preferred stockholders is equal to the redemption value of outstanding preferred stock plus share dividends declared but not yet issued.

(b)Total common stockholders' equity, total common stockholders' equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, exclude equity available to preferred stockholders. Total common stockholders’ equity and book value per common share excluding AOCI, non-GAAP financial measures, are based on common 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 securities, we believe these non-GAAP financial measures provide useful supplemental information. Total common stockholders' equity and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, are based on common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives. Since the net impact of fair value accounting for our derivatives and embedded derivatives fluctuates from quarter to quarter and the most significant impacts relate to fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results, we believe these non-GAAP financial measures provide useful supplemental information.

(c)Book value per common share including and excluding AOCI and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives are calculated as total common stockholders’ equity, total common stockholders’ equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives divided by the total number of shares of common stock outstanding.

Page 3

American Equity Investment Life Holding Company

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Average Common Stockholders' Equity and Return on Average Common Stockholders' Equity

Return on average common stockholders' equity measures how efficiently we generate profits from the resources provided by our net assets. Return on average common stockholders' equity is calculated by dividing net income available to common stockholders, for the trailing twelve months, by average equity available to common stockholders. Non-GAAP operating return on average common stockholders' equity excluding average accumulated other comprehensive income (AOCI) is calculated by dividing non-GAAP operating income (loss) available to common stockholders, for the trailing twelve months, by average common stockholders' equity excluding average AOCI. We exclude AOCI because AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments.


	Twelve Months Ended
	June 30, 2021
Average Common Stockholders' Equity Excluding Average AOCI
Average total stockholders' equity	$	5,607,712
Average equity available to preferred stockholders	(700,000)
Average equity available to common stockholders	4,907,712
Average AOCI	(1,800,690)
Average common stockholders' equity excluding average AOCI	3,107,022
Impact of notable items on average common stockholders' equity excluding average AOCI	170,448
Average common stockholders' equity excluding average AOCI and notables	$	3,277,470

Net income available to common stockholders	$	861,140
Adjustments to arrive at non-GAAP operating loss available to common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses	30,942
Change in fair value of derivatives and embedded derivatives - fixed index annuities	(1,183,160)
Income taxes	248,221
Non-GAAP operating loss available to common stockholders	(42,857)
Impact of notable items (b)	340,895
Non-GAAP operating income available to common stockholders, excluding notable items	$	298,038

Return on Average Common Stockholders' Equity
Net income available to common stockholders	17.5		%

Return on Average Common Stockholders' Equity Excluding Average AOCI

Non-GAAP operating loss available to common stockholders	(1.4)		%
Non-GAAP operating income available to common stockholders, excluding notable items	9.1		%

Notable Items


	Twelve Months Ended
	June 30, 2021
Notable items impacting Non-GAAP operating loss available to common stockholders:

Impact of actuarial assumption updates	$	340,895

Total notable items (b)	$	340,895

(a)Adjustments to net income available to common stockholders to arrive at non-GAAP operating loss available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) and accretion of lifetime income benefit rider (LIBR) reserves where applicable.

(b)Notable items reflect the after-tax impact to non-GAAP operating loss available to common stockholders for certain items that do not reflect the company's expected ongoing operations. Notable items include the impact from actuarial assumption updates, certain initial uncapitalized costs to establish the AEL 2.0 strategy, and initial non-deferred impacts related to reinsurance transactions. The presentation of notable items is intended to help investors better understand our results and to evaluate and forecast those results.

Page 4

Document

Exhibit 99.2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement

June 30, 2021


A.	Financial Highlights
	Condensed Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Quarterly Summary - Most Recent 5 Quarters	3
	Non-GAAP Financial Measures
	Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income Available to Common Stockholders and Non-GAAP Operating Income Available to Common Stockholders, Excluding Notable Items	4
	Summary of Adjustments to Arrive at Non-GAAP Operating Income Available to Common Stockholders	5
	Quarterly Summary - Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income (Loss) Available to Common Stockholders and Non-GAAP Operating Income Available to Common Stockholders, Excluding Notable Items	6
	Quarterly Summary - Summary of Adjustments to Arrive at Non-GAAP Operating Income (Loss) Available to Common Stockholders	7
	Capitalization/Book Value per Common Share	8
	Spread Results	9

B.	Product Summary
	Summary of Cost of Money for Deferred Annuities	9
	Annuity Account Balance Rollforward	10
	Annuity Deposits by Product Type	10
	Surrender Charge Protection and Account Values by Product Type	11
	Annuity Liability Characteristics	11

C.	Investment Summary
	Summary of Invested Assets	14
	Credit Quality of Fixed Maturity Securities	14
	Watch List Securities	14
	Fixed Maturity Securities by Sector	15
	Mortgage Loans on Real Estate	16

D.	Shareholder Information	18

E.	Research Analyst Coverage	19

Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2021		December 31, 2020 (a)
Assets
Investments:
Fixed maturity securities, available for sale, at fair value	$	46,659,256	$	47,538,893


Mortgage loans on real estate	4,299,945		4,165,489
Real estate	258,237		—
Derivative instruments	1,459,965		1,310,954
Other investments	962,305		590,078
Total investments	53,639,708		53,605,414

Cash and cash equivalents	11,524,265		9,095,522

Coinsurance deposits	4,441,950		4,844,927
Accrued investment income	397,393		398,082
Deferred policy acquisition costs	2,310,931		2,225,199
Deferred sales inducements	1,466,217		1,448,375

Income taxes recoverable	41,019		862
Other assets	60,816		70,198
Total assets	$	73,882,299	$	71,688,579

Liabilities and Stockholders' Equity
Liabilities:
Policy benefit reserves	$	64,555,597	$	62,352,882
Other policy funds and contract claims	233,987		240,904
Notes payable	495,955		495,668
Subordinated debentures	78,264		78,112

Deferred income taxes	483,631		504,000

Other liabilities	1,739,130		1,668,025
Total liabilities	67,586,564		65,339,591

Stockholders' equity:
Preferred stock, Series A	16		16
Preferred stock, Series B	12		12
Common stock	92,554		95,721
Additional paid-in capital	1,604,535		1,681,127
Accumulated other comprehensive income	2,023,911		2,203,557
Retained earnings	2,574,707		2,368,555
Total stockholders' equity	6,295,735		6,348,988
Total liabilities and stockholders' equity	$	73,882,299	$	71,688,579

(a)The December 31, 2020 balance sheet includes reclassifications from previously reported amounts for the correction of an immaterial error in the calculation of the impact of unrealized gains and losses on lifetime income benefit reserves which was determined in the first quarter of 2021. This is reflected in deferred policy acquisition costs, deferred sales inducements, policy benefit reserves, deferred income taxes and accumulated other comprehensive income

Page 1

Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands, except per share data)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenues:
Premiums and other considerations	$	14,595	$	11,032	$	27,808	$	18,696
Annuity product charges	63,759		63,438		123,841		122,987
Net investment income	499,320		543,704		996,510		1,117,022
Change in fair value of derivatives	500,880		327,662		897,185		(614,212)
Net realized losses on investments	(3,114)		(25,888)		(7,697)		(46,224)




Loss on extinguishment of debt	—		—		—		(2,024)
Total revenues	1,075,440		919,948		2,037,647		596,245

Benefits and expenses:
Insurance policy benefits and change in future policy benefits	15,828		13,331		32,252		23,403
Interest sensitive and index product benefits	812,981		240,992		1,289,576		641,211
Amortization of deferred sales inducements	(12,520)		(75,178)		110,455		(1,587)
Change in fair value of embedded derivatives	273,713		1,126,935		(8,700)		(123,126)
Interest expense on notes payable	6,394		6,388		12,787		12,773
Interest expense on subordinated debentures	1,326		1,321		2,652		2,909

Amortization of deferred policy acquisition costs	(16,906)		(119,889)		186,917		813
Other operating costs and expenses	65,050		41,951		120,915		85,577
Total benefits and expenses	1,145,866		1,235,851		1,746,854		641,973
Income (loss) before income taxes	(70,426)		(315,903)		290,793		(45,728)
Income tax expense (benefit)	(15,732)		(68,474)		62,803		(41,246)
Net income (loss)	(54,694)		(247,429)		227,990		(4,482)
Less: Preferred stock dividends	10,919		5,950		21,838		12,561
Net income (loss) available to common stockholders	$	(65,613)	$	(253,379)	$	206,152	$	(17,043)


Earnings (loss) per common share	$	(0.69)	$	(2.76)	$	2.16	$	(0.19)
Earnings (loss) per common share - assuming dilution	$	(0.69)	$	(2.76)	$	2.15	$	(0.19)

Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	94,801		91,803		95,265		91,724
Earnings (loss) per common share - assuming dilution	95,379		92,027		95,795		92,024

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands, except per share data)

Quarterly Summary - Most Recent 5 Quarters


	Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
Revenues:
Traditional life insurance premiums	$	708	$	706	$	701	$	708	$	722
Life contingent immediate annuity considerations	13,887		12,507		9,578		9,699		10,310
Surrender charges	18,057		19,481		17,009		16,447		19,390
Lifetime income benefit rider fees	45,702		40,601		48,954		45,830		44,048
Net investment income	499,320		497,190		521,725		543,331		543,704
Change in fair value of derivatives	500,880		396,305		443,867		205,011		327,662
Net realized losses on investments	(3,114)		(4,583)		(12,135)		(22,321)		(25,888)


Total revenues	1,075,440		962,207		1,029,699		798,705		919,948

Benefits and expenses:
Traditional life insurance policy benefits and change in future policy benefits	502		1,049		1,091		655		702
Life contingent immediate annuity benefits and change in future policy benefits	15,326		15,375		11,975		12,618		12,629
Interest sensitive and index product benefits (a)	812,981		476,595		325,912		576,147		240,992
Amortization of deferred sales inducements (b)(d)	(12,520)		122,975		22,768		416,983		(75,178)
Change in fair value of embedded derivatives (c)(d)	273,713		(282,413)		568,836		(1,732,497)		1,126,935
Interest expense on notes payable	6,394		6,393		6,391		6,388		6,388
Interest expense on subordinated debentures	1,326		1,326		1,325		1,323		1,321

Amortization of deferred policy acquisition costs (b)(d)	(16,906)		203,823		26,145		622,596		(119,889)
Other operating costs and expenses	65,050		55,865		55,321		42,738		41,951
Total benefits and expenses	1,145,866		600,988		1,019,764		(53,049)		1,235,851
Income (loss) before income taxes	(70,426)		361,219		9,935		851,754		(315,903)
Income tax expense (benefit)	(15,732)		78,535		1,193		184,554		(68,474)
Net income (loss) (a)(b)(c)(d)	(54,694)		282,684		8,742		667,200		(247,429)
Less: Preferred stock dividends	10,919		10,919		15,004		5,950		5,950
Net income (loss) available to common stockholders (a)(b)(c)(d)	$	(65,613)	$	271,765	$	(6,262)	$	661,250	$	(253,379)

Earnings (loss) per common share	$	(0.69)	$	2.84	$	(0.07)	$	7.20	$	(2.76)
Earnings (loss) per common share - assuming dilution (a)(b)(c)(d)	$	(0.69)	$	2.82	$	(0.07)	$	7.17	$	(2.76)

Weighted average common shares outstanding (thousands):
Earnings (loss) per common share	94,801		95,735		92,904		91,861		91,803
Earnings (loss) per common share - assuming dilution	95,379		96,216		93,352		92,163		92,027

(a)Q3 2020 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index products by $285.8 million and decreased both net income and net income available to common stockholders by $224.4 million and decreased earnings per common share - assuming dilution by $2.44 per share.

(b)Q3 2020 includes expense from the revision of assumptions which increased amortization of deferred sales inducements and deferred policy acquisition costs by $391.4 million and $589.2 million, respectively, and decreased both net income and net income available to common stockholders by $769.8 million and decreased earnings per common share - assuming dilution by $8.35 per share.

(c)Q3 2020 includes a benefit from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact decreased change in fair value of embedded derivatives by $2,111.1 million and increased both net income and net income available to common stockholders by $1,657.2 million and increased earnings per common share - assuming dilution by $17.98 per share.

(d)Q2 2020 includes a benefit from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact decreased change in fair value of embedded derivatives by $230.1 million, increased amortization of deferred sales inducements and deferred policy acquisition costs by $36.7 million and $57.6 million, respectively, and decreased both net loss and net loss available to common stockholders by $106.5 million and reduced loss per common share - assuming dilution by $1.16 per share.

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income (loss) available to common stockholders	$	(65,613)	$	(253,379)	$	206,152	$	(17,043)
Adjustments to arrive at non-GAAP operating income available to common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses	2,912		18,492		6,428		34,841
Change in fair value of derivatives and embedded derivatives - fixed index annuities	200,767		423,590		(96,867)		303,136
Change in fair value of derivatives - interest rate caps and swap	—		—		—		(848)


Income taxes	(44,278)		(95,599)		19,516		(72,897)
Non-GAAP operating income available to common stockholders	93,788		93,104		135,229		247,189
Impact of notable items (b)	—		—		—		(30,778)
Non-GAAP operating income available to common stockholders, excluding notable items	$	93,788	$	93,104	$	135,229	$	216,411

Per common share - assuming dilution:
Net income (loss) available to common stockholders	$	(0.69)	$	(2.76)	$	2.15	$	(0.19)
Adjustments to arrive at non-GAAP operating income available to common stockholders:
Anti-dilutive effect of net loss	—		0.01		—		—

Net realized gains/losses on financial assets, including credit losses	0.03		0.20		0.07		0.38
Change in fair value of derivatives and embedded derivatives - fixed index annuities	2.10		4.60		(1.01)		3.30
Change in fair value of derivatives - interest rate caps and swap	—		—		—		(0.01)


Income taxes	(0.46)		(1.04)		0.20		(0.79)
Non-GAAP operating income available to common stockholders	0.98		1.01		1.41		2.69
Impact of notable items	—		—		—		(0.33)
Non-GAAP operating income available to common stockholders, excluding notable items	$	0.98	$	1.01	$	1.41	$	2.36

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands, except per share data)

Notable Items


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Notable items impacting non-GAAP operating income available to common stockholders:


Tax benefit related to the CARES Act	$	—	$	—	$	—	$	(30,778)
Total notable items (b)	$	—	$	—	$	—	$	(30,778)

(a)Adjustments to net income (loss) available to common stockholders to arrive at non-GAAP operating income available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) and accretion of lifetime income benefit rider (LIBR) reserves where applicable.

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income Available to Common Stockholders


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net realized gains/losses on financial assets, including credit losses:
Net realized gains/losses on financial assets, including credit losses	$	2,862	$	25,276	$	7,589	$	46,933
Amortization of DAC and DSI and accretion of LIBR reserves	50		(6,784)		(1,161)		(12,092)
Income taxes	(626)		(3,995)		(1,382)		(7,526)
	$	2,286	$	14,497	$	5,046	$	27,315
Change in fair value of derivatives and embedded derivatives:
Fixed index annuities	$	331,268	$	713,446	$	(162,531)	$	503,555
Interest rate caps and swap	—		—		—		(848)
Amortization of DAC and DSI	(130,501)		(289,856)		65,664		(200,419)
Income taxes	(43,652)		(91,604)		20,898		(65,371)
	$	157,115	$	331,986	$	(75,969)	$	236,917

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

Quarterly Summary - Most Recent 5 Quarters

Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income (Loss) Available to Common Stockholders and Non-GAAP Operating Income Available to Common Stockholders, Excluding Notable Items


	Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
Net income (loss) available to common stockholders	$	(65,613)	$	271,765	$	(6,262)	$	661,250	$	(253,379)
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses	2,912		3,516		9,369		15,145		18,492
Change in fair value of derivatives and embedded derivatives - fixed index annuities	200,767		(297,634)		90,616		(1,176,909)		423,590



Income taxes	(44,278)		63,794		(21,996)		250,701		(95,599)
Non-GAAP operating income (loss) available to common stockholders (b)(c)	93,788		41,441		71,727		(249,813)		93,104
Impact of notable items (d)	—		—		—		340,895		—
Non-GAAP operating income available to common stockholders, excluding notable items	$	93,788	$	41,441	$	71,727	$	91,082	$	93,104

Per common share - assuming dilution:
Net income (loss) available to common stockholders	$	(0.69)	$	2.82	$	(0.07)	$	7.17	$	(2.76)
Adjustments to arrive at non-GAAP operating income (loss) available to common stockholders:
Anti-dilutive effect of net loss	—		—		—		—		0.01
Anti-dilutive effect of operating loss	—		—		—		0.01		—
Net realized gains/losses on financial assets, including credit losses	0.03		0.04		0.10		0.16		0.20
Change in fair value of derivatives and embedded derivatives - fixed index annuities	2.10		(3.09)		0.97		(12.77)		4.60


Income taxes	(0.46)		0.66		(0.23)		2.71		(1.04)
Non-GAAP operating income (loss) available to common stockholders (b)(c)	0.98		0.43		0.77		(2.72)		1.01
Impact of notable items	—		—		—		3.70		—
Non-GAAP operating income available to common stockholders, excluding notable items	$	0.98	$	0.43	$	0.77	$	0.98	$	1.01

Notable Items


	Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
Notable items impacting non-GAAP operating income (loss) available to common stockholders:

Impact of actuarial assumption updates (c)(d)	$	—	$	—	$	—	$	340,895	$	—

Total notable items (b)	$	—	$	—	$	—	$	340,895	$	—

(a)Adjustments to net income (loss) available to common stockholders to arrive at non-GAAP operating income (loss) available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) and accretion of lifetime income benefit rider (LIBR) reserves where applicable.

(b)Q3 2020 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index products by $285.8 million and increased non-GAAP operating loss available to common stockholders and non-GAAP operating loss available to common stockholders per common share - assuming dilution by $224.4 million and $2.44 per share, respectively.

(c)Q3 2020 includes expense from the revision of assumptions which increased amortization of deferred sales inducements and deferred policy acquisition costs by $57.5 million and $91.0 million, respectively, and increased non-GAAP operating loss available to common stockholders and non-GAAP operating loss available to common stockholders per common share - assuming dilution by $116.5 million and $1.26 per share, respectively.

(d)Notable items reflect the after-tax impact to non-GAAP operating income available to common stockholders for certain items that do not reflect the company's expected ongoing operations. Notable items include the impact from actuarial assumption updates, certain initial uncapitalized costs to establish the AEL 2.0 strategy, and initial non-deferred impacts related to reinsurance transactions. The presentation of notable items is intended to help investors better understand our results and to evaluate and forecast those results.

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income (Loss) Available to Common Stockholders


	Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
Net realized losses on investments	$	3,114	$	4,583	$	12,135	$	22,321	$	25,888

Change in fair value of derivatives	57,555		(211,387)		(416,450)		(203,088)		(413,489)

Increase (decrease) in total revenues	60,669		(206,804)		(404,315)		(180,767)		(387,601)

Amortization of deferred sales inducements	52,074		(69,788)		22,785		(303,710)		115,511
Change in fair value of embedded derivatives	(273,713)		282,413		(568,836)		1,732,497		(1,126,935)

Interest sensitive and index product benefits (a)	227		(145)		761		1,298		612
Amortization of deferred policy acquisition costs	78,402		(125,166)		40,990		(449,088)		181,129

Increase (decrease) in total benefits and expenses	(143,010)		87,314		(504,300)		980,997		(829,683)
Increase in income (loss) before income taxes	203,679		(294,118)		99,985		(1,161,764)		442,082
Increase (decrease) in income tax expense (benefit)	44,278		(63,794)		21,996		(250,701)		95,599
Increase (decrease) in net income (loss) available to common stockholders	$	159,401	$	(230,324)	$	77,989	$	(911,063)	$	346,483

(a)Interest sensitive and index product benefits adjustment reflects the change in the allowance for credit losses on our reinsurance recoverable/coinsurance deposits under a revised impairment model for financial assets measured at amortized cost which we were required to adopt on January 1, 2020. The change in this allowance is reflected in the net realized gains/losses of financial assets, including credit losses line in the other Non-GAAP financial measures tables in this financial supplement.

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands, except share and per share data)

Capitalization/Book Value per Common Share


	Q2 2021			Q1 2021			Q4 2020			Q3 2020			Q2 2020
Capitalization:
Notes payable	$	500,000		$	500,000		$	500,000		$	500,000		$	500,000
Subordinated debentures payable to subsidiary trusts	78,264			78,187			78,112			78,037			77,964
Total debt	578,264			578,187			578,112			578,037			577,964
Total stockholders’ equity (a)	6,295,735			5,928,760			6,348,988			5,918,216			4,919,689
Total capitalization (a)	6,873,999			6,506,947			6,927,100			6,496,253			5,497,653
Accumulated other comprehensive income (AOCI) (a)	(2,023,911)			(1,505,260)			(2,203,557)			(1,911,593)			(1,577,469)
Total capitalization excluding AOCI (b)	$	4,850,088		$	5,001,687		$	4,723,543		$	4,584,660		$	3,920,184

Total stockholders’ equity (a)	$	6,295,735		$	5,928,760		$	6,348,988		$	5,918,216		$	4,919,689
Equity available to preferred stockholders (c)	(700,000)			(700,000)			(700,000)			(700,000)			(700,000)
Total common stockholders' equity (a)(d)	5,595,735			5,228,760			5,648,988			5,218,216			4,219,689
Accumulated other comprehensive income (a)	(2,023,911)			(1,505,260)			(2,203,557)			(1,911,593)			(1,577,469)
Total common stockholders’ equity excluding AOCI (d)	3,571,824			3,723,500			3,445,431			3,306,623			2,642,220
Net impact of fair value accounting for derivatives and embedded derivatives	(242,423)			(399,538)			(166,453)			(237,099)			685,839
Total common stockholders’ equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives (d)	$	3,329,401		$	3,323,962		$	3,278,978		$	3,069,524		$	3,328,059

Common shares outstanding	92,553,825			95,482,733			95,720,622			91,931,837			91,595,066

Book Value per Common Share: (e)
Book value per common share (a)	$	60.46		$	54.76		$	59.02		$	56.76		$	46.07
Book value per common share excluding AOCI (d)	$	38.59		$	39.00		$	35.99		$	35.97		$	28.85
Book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives (d)	$	35.97		$	34.81		$	34.26		$	33.39		$	36.33

Debt-to-Capital Ratios: (f)
Senior debt / Total capitalization	10.3		%	10.0		%	10.6		%	10.9		%	12.8		%
Total debt / Total capitalization	11.9		%	11.6		%	12.2		%	12.6		%	14.7		%

(a)Q2 2020 through Q4 2020 include the impact of a correction of an immaterial error in the calculation of the impact of unrealized gains and losses on lifetime income benefit reserves which was determined in Q1 2021. This had the impact of reducing AOCI as of December 31, 2020 by $225.7 million and decreased book value per common share by $2.35 compared to amounts previously reported.

(b)Total capitalization excluding AOCI, a non-GAAP financial measure, is based on stockholders' equity excluding the effect of AOCI.

(c)Equity available to preferred stockholders is equal to the redemption value of outstanding preferred stock plus share dividends declared but not yet issued.

(d)Total common stockholders' equity, total common stockholders' equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, exclude equity available to preferred stockholders. Total common stockholders’ equity and book value per common share excluding AOCI, non-GAAP financial measures, are based on common 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 securities, we believe these non-GAAP financial measures provide useful supplemental information. Total common stockholders' equity and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, are based on common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives. Since the net impact of fair value accounting for our derivatives and embedded derivatives fluctuates from quarter to quarter and the most significant impacts relate to fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results, we believe these non-GAAP financial measures provide useful supplemental information.

(e)Book value per common share including and excluding AOCI and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives are calculated as total common stockholders’ equity, total common stockholders’ equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives divided by the total number of shares of common stock outstanding.

(f)Debt-to-capital ratios are computed using total capitalization excluding AOCI.

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

Spread Results


Six Months Ended June 30,
2021	2020		Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020
3.54%	4.24%	Average yield on invested assets	3.51%	3.58%	3.88%	4.10%	4.12%
1.57%	1.73%	Aggregate cost of money	1.56%	1.58%	1.63%	1.66%	1.73%
1.97%	2.51%	Aggregate investment spread	1.95%	2.00%	2.25%	2.44%	2.39%

		Impact of:
0.11%	0.04%	Investment yield - additional prepayment income	0.10%	0.11%	0.11%	0.10%	0.03%
0.03%	0.02%	Cost of money effect of over (under) hedging	0.04%	0.02%	0.01%	0.03%	(0.01)%

$56,352,021	$52,762,227	Weighted average investments	$56,991,393	$55,712,648	$53,836,378	$53,024,798	$52,901,215
57,144,563	52,963,914	Ending investments	57,144,563	56,838,224	54,587,072	53,085,683	52,963,914

Weighted average investments include fixed maturity securities at amortized cost and mortgage loans on real estate and other investments at carrying values as reflected in the consolidated balance sheets. 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


Six Months Ended June 30,
2021		2020			Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
				Included in interest sensitive and index product benefits:
$	1,060,028	$	376,815	Index credits	$	714,291	$	345,737	$	195,927	$	174,747	$	97,875
119,114		95,541		Interest credited	62,637		56,477		49,551		47,376		46,594
				Included in change in fair value of derivatives:
(1,069,593)		(382,278)		Proceeds received at option expiration	(720,474)		(349,119)		(197,921)		(178,405)		(97,015)
326,354		369,871		Pro rata amortization of option cost	162,124		164,230		170,505		176,481		182,841
$	435,903	$	459,949	Cost of money for deferred annuities	$	218,578	$	217,325	$	218,062	$	220,199	$	230,295

$	55,578,458	$	53,244,580	Weighted average liability balance outstanding	$	56,221,809	$	54,935,106	$	53,531,441	$	53,059,376	$	53,214,255

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except per share data)

Annuity Account Balance Rollforward


Six Months Ended June 30,
2021		2020			Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
$	54,056,725	$	53,233,898	Account balances at beginning of period	$	55,813,480	$	54,056,725	$	53,006,150	$	53,112,600	$	53,315,909
3,578,854		1,224,778		Net deposits	1,161,125		2,417,729		1,830,816		557,675		543,026
49,663		47,262		Premium bonuses	24,813		24,850		25,143		21,205		22,710
1,179,142		472,356		Fixed interest credited and index credits	776,928		402,214		245,478		222,123		144,469
(37,538)		(39,095)		Surrender charges	(18,057)		(19,481)		(17,009)		(16,447)		(19,390)
(86,303)		(83,892)		Lifetime income benefit rider fees	(45,702)		(40,601)		(48,954)		(45,830)		(44,048)
(2,110,405)		(1,742,707)		Surrenders, withdrawals, deaths, etc.	(1,082,449)		(1,027,956)		(984,899)		(845,176)		(850,076)
$	56,630,138	$	53,112,600	Account balances at end of period	$	56,630,138	$	55,813,480	$	54,056,725	$	53,006,150	$	53,112,600

$	2,007,394	$	1,467,811	Lifetime income benefit rider reserves, excluding unrealized gain/loss adjustment	$	2,007,394	$	1,973,223	$	1,900,487	$	1,821,169	$	1,467,811

Annuity Deposits by Product Type


Six Months Ended June 30,
2021		2020			Q2 2021		Q1 2021		Q4 2020		Q3 2020		Q2 2020
				American Equity Life:
$	1,219,600	$	1,058,962	Fixed index annuities	$	702,605	$	516,995	$	500,495	$	432,602	$	472,899
3,823		4,647		Annual reset fixed rate annuities	1,656		2,167		1,664		1,817		2,316
834,866		452		Multi-year fixed rate annuities	47,674		787,192		394,999		531		83
29,389		15,482		Single premium immediate annuities	15,430		13,959		7,774		10,205		10,084
2,087,678		1,079,543			767,365		1,320,313		904,932		445,155		485,382
				Eagle Life:
333,356		178,873		Fixed index annuities	184,520		148,836		106,170		60,476		72,371
337		58		Annual reset fixed rate annuities	175		162		—		39		17
1,193,622		5,180		Multi-year fixed rate annuities	228,197		965,425		833,765		68,206		1,031
1,527,315		184,111			412,892		1,114,423		939,935		128,721		73,419
				Consolidated:
1,552,956		1,237,835		Fixed index annuities	887,125		665,831		606,665		493,078		545,270
4,160		4,705		Annual reset fixed rate annuities	1,831		2,329		1,664		1,856		2,333
2,028,488		5,632		Multi-year fixed rate annuities	275,871		1,752,617		1,228,764		68,737		1,114
29,389		15,482		Single premium immediate annuities	15,430		13,959		7,774		10,205		10,084
3,614,993		1,263,654		Total before coinsurance ceded	1,180,257		2,434,736		1,844,867		573,876		558,801
6,750		23,394		Coinsurance ceded	3,702		3,048		6,277		5,996		5,691
$	3,608,243	$	1,240,260	Net after coinsurance ceded	$	1,176,555	$	2,431,688	$	1,838,590	$	567,880	$	553,110

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except per share data)

Surrender Charge Protection and Account Values by Product Type

Annuity Surrender Charges and Net (of Coinsurance) Account Values at June 30, 2021:


	Surrender Charge			Net Account Value
Product Type	Avg. Years At Issue	Avg. Years Remaining	Avg. % Remaining	Dollars in Thousands		%
Fixed Index Annuities	12.6	6.0	9.6%	$	51,385,857	90.7	%
Annual Reset Fixed Rate Annuities	8.8	2.5	4.8%	1,404,922		2.5	%
Multi-Year Fixed Rate Annuities	3.9	2.9	8.4%	3,839,359		6.8	%
Total	12.0	5.7	9.4%	$	56,630,138	100.0	%

Annuity Liability Characteristics


Surrender Charge Percentages:	Fixed Annuities Account Value		Fixed Index Annuities Account Value
No surrender charge	$	868,177	$	3,247,984
0.0% < 2.0%	23,222		762,507
2.0% < 3.0%	60,396		2,973,108
3.0% < 4.0%	87,053		2,297,534
4.0% < 5.0%	105,067		2,414,801
5.0% < 6.0%	90,957		2,779,431
6.0% < 7.0%	51,880		2,841,897
7.0% < 8.0%	57,271		3,745,345
8.0% < 9.0%	61,158		3,596,109
9.0% < 10.0%	3,418,114		3,471,007
10.0% or greater	420,986		23,256,134
	$	5,244,281	$	51,385,857


Surrender Charge Expiration By Year:	Fixed and Fixed Index Annuities Account Value		Weighted Average Surrender Charge
Out of Surrender Charge	$	4,116,161	0.00	%
2021	617,148		2.77	%
2022	1,584,961		3.04	%
2023	4,879,266		4.97	%
2024	6,234,060		6.06	%
2025	6,190,943		6.72	%
2026	5,905,338		8.53	%
2027	4,368,969		10.23	%
2028	4,672,067		11.27	%
2029	5,917,422		12.67	%
2030	3,934,688		14.62	%
2031	3,836,507		15.95	%
2032	1,965,637		17.69	%
2033	1,136,036		18.22	%
2034	716,311		18.68	%
2035	339,938		19.18	%
2036	155,185		19.74	%
2037	59,501		20.00	%
	$	56,630,138	9.38	%

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

Annuity Liability Characteristics


Credited Rate vs. Ultimate Minimum Guaranteed Rate Differential:	Fixed Annuities Account Value		Fixed Index Annuities Account Value
No differential	$	978,718	$	1,174,031
› 0.00% - 0.25%	45,864		135,475
› 0.25% - 0.50%	229,188		6,647
› 0.50% - 1.00%	9,153		1,095
› 1.00% - 1.50%	10,998		—




1.00% ultimate guarantee - 2.13% wtd avg interest rate (a)	3,716,931		1,102,168
1.50% ultimate guarantee - 1.08% wtd avg interest rate (a)	135,477		3,052,600
1.75% ultimate guarantee - 1.72% wtd avg interest rate (a)	48,616		507,653
2.00% ultimate guarantee - 1.85% wtd avg interest rate (a)	69,336		—
2.25% ultimate guarantee - 1.64% wtd avg interest rate (a)	—		641,376
3.00% ultimate guarantee - 1.95% wtd avg interest rate (a)	—		1,303,391
Allocated to index strategies (see tables that follow)	—		43,461,421
	$	5,244,281	$	51,385,857

(a)The minimum guaranteed interest rate for the fixed rate or the fixed rate strategy ranges from 0.5% - 1.75%. The ultimate guaranteed rate is applied on less than 100% of the premium.

If all crediting rates were reduced to minimum guaranteed rates (subject to limitations imposed by ultimate minimum guaranteed rates where applicable) the weighted average crediting rate as of June 30, 2021 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.12%.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES


Annual Monthly Average and Point-to-Point with Caps
	Minimum Guaranteed Cap
	1%		3%		4%		7%		8% +
Current Cap
At minimum	$	1,273	$	100,565	$	4,932,913	$	58,112	$	130,834
1.75% - 3%	8,951,323		—		—		—		—
3% - 4%	338,626		2,058		—		—		—
4% - 5%	1,760,633		208,598		1,009,494		—		—
5% - 6%	693,286		185,423		28,041		—		—
6% - 7%	1,116		—		741		—		—
>= 7%	9,550		8,660		615		4,769		—


Annual Monthly Average and Point-to-Point with Participation Rates
	Minimum Guaranteed Participation Rate
	10%		20% - 25%		35%		50% +
Current Participation Rate
At minimum	$	252,030	$	457,082	$	83,979	$	88,543
< 20%	1,599,918		—		—		—
20% - 40%	3,872,612		252,766		5,965		—
40% - 60%	1,293,438		28,723		44,382		—
60% - 100%	1,006,567		—		—		—
> 100%	754,602		—		—		—


S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1.0%
Current Cap
At minimum	$	1,918,300
1.10% - 1.30%	6,179,584
1.40% - 1.60%	2,006,652
1.70% - 2.00%	299,836
>= 2.10%	12,790


Volatility Control Index
Current Asset Fee
At Maximum	$	—
0.75% - 1.75%	360,092
2.00% - 2.75%	177,105
3.00% - 3.50%	1,063,320
3.75% - 5.25%	3,164,913

If all caps and participation rates were reduced to minimum caps and participation rates and current asset fees were increased to their maximums, the cost of options would decrease by 0.72% based upon prices of options for the week ended July 2, 2021.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

Summary of Invested Assets


	June 30, 2021				December 31, 2020
	Carrying Amount		Percent		Carrying Amount		Percent
Fixed maturity securities:
United States Government full faith and credit	$	38,879	0.1	%	$	39,771	0.1	%
United States Government sponsored agencies	1,046,186		2.0	%	1,039,551		1.9	%
United States municipalities, states and territories	3,700,225		6.9	%	3,776,131		7.0	%
Foreign government obligations	197,330		0.4	%	202,706		0.4	%
Corporate securities	31,455,817		58.6	%	31,156,827		58.1	%
Residential mortgage backed securities	1,192,423		2.2	%	1,512,831		2.8	%
Commercial mortgage backed securities	4,175,517		7.8	%	4,261,227		8.0	%
Other asset backed securities	4,852,879		9.0	%	5,549,849		10.4	%
Total fixed maturity securities	46,659,256		87.0	%	47,538,893		88.7	%
Mortgage loans on real estate	4,299,945		8.0	%	4,165,489		7.8	%
Real estate	258,237		0.5	%	—		—	%
Derivative instruments	1,459,965		2.7	%	1,310,954		2.4	%
Other investments	962,305		1.8	%	590,078		1.1	%
	$	53,639,708	100.0	%	$	53,605,414	100.0	%

Credit Quality of Fixed Maturity Securities - June 30, 2021


NAIC Designation	Carrying Amount		Percent		Rating Agency Rating	Carrying Amount		Percent
1	$	25,937,900	55.6	%	Aaa/Aa/A	$	27,097,912	58.1	%
2	19,387,062		41.6	%	Baa	18,570,085		39.8	%
3	1,135,994		2.4	%	Ba	800,364		1.7	%
4	147,401		0.3	%	B	82,971		0.2	%
5	29,418		0.1	%	Caa	46,470		0.1	%
6	21,481		—	%	Ca and lower	61,454		0.1	%
	$	46,659,256	100.0	%		$	46,659,256	100.0	%

Watch List Securities - June 30, 2021


General Description (a)	Amortized Cost		Allowance for Credit Losses		Amortized Cost, Net of Allowance		Net Unrealized Gains (Losses), Net of Allowance		Fair Value
Corporate securities - Public securities	$	69,739	$	(10,033)	$	59,706	$	1,318	$	61,024
Corporate securities - Private placement securities	103,189		(690)		102,499		1,652		104,151
Residential mortgage backed securities	6,739		(120)		6,619		(69)		6,550
Commercial mortgage backed securities	46,059		—		46,059		(3,441)		42,618

Collateralized loan obligations	9,989		—		9,989		(1,113)		8,876
United States municipalities, states and territories	19,044		(3,347)		15,697		—		15,697
	$	254,759	$	(14,190)	$	240,569	$	(1,653)	$	238,916

(a)The watch list consists of all fixed maturity securities we have determined contain elevated credit risk, including those we have taken credit losses on.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

Fixed Maturity Securities by Sector


	June 30, 2021				December 31, 2020
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale:
United States Government full faith and credit and sponsored agencies	$	1,046,316	$	1,085,065	$	1,032,936	$	1,079,322
United States municipalities, states and territories	3,219,847		3,700,225		3,236,767		3,776,131
Foreign government obligations	177,087		197,330		177,062		202,706
Corporate securities:
Capital goods	2,301,510		2,664,988		2,295,927		2,721,465
Consumer discretionary	5,902,440		6,818,683		5,674,845		6,734,249
Energy	1,984,088		2,241,563		2,140,768		2,359,893
Financials	6,174,256		6,960,264		5,971,097		6,877,472
Government non-guaranteed	496,339		576,083		539,148		632,178
Industrials	377,724		423,507		276,352		319,823
Information technology	1,639,715		1,872,439		1,556,654		1,840,942
Materials	1,598,844		1,826,924		1,543,032		1,803,501
Other	292,504		340,499		315,628		370,204
Telecommunications	1,543,432		1,758,859		1,340,484		1,582,329
Transportation	1,334,560		1,481,455		1,362,858		1,511,499
Utilities	3,880,356		4,490,553		3,728,403		4,403,272
Residential mortgage backed securities:
Government agency	498,757		558,512		549,677		627,201
Prime	538,257		547,174		771,031		788,933
Alt-A	69,907		86,737		79,248		96,697
Commercial mortgage backed securities:
Government agency	393,427		439,822		398,141		447,726
Non-agency	3,584,388		3,735,695		3,721,509		3,813,501
Other asset backed securities:
Auto	227,504		234,719		258,286		266,065
Energy	7,198		8,506		7,301		8,946
Financials	4,441		4,303		4,441		3,911
Industrials	41,544		43,250		60,894		61,147
Collateralized loan obligations	3,535,477		3,486,402		4,255,839		4,112,318
Military housing	468,218		538,845		464,684		538,356
Other	513,952		536,854		541,724		559,106
	$	41,852,088	$	46,659,256	$	42,304,736	$	47,538,893

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)

Mortgage Loans on Real Estate


	June 30, 2021				December 31, 2020
	Principal		Percent		Principal		Percent
Geographic distribution: commercial mortgage loans
East	$	676,448	19.6	%	$	699,741	19.5	%
Middle Atlantic	294,619		8.5	%	281,971		7.9	%
Mountain	373,129		10.8	%	391,025		10.9	%
New England	24,475		0.7	%	24,774		0.7	%
Pacific	650,256		18.8	%	659,743		18.4	%
South Atlantic	779,690		22.5	%	832,739		23.3	%
West North Central	263,600		7.6	%	266,050		7.4	%
West South Central	397,662		11.5	%	424,111		11.9	%
	$	3,459,879	100.0	%	$	3,580,154	100.0	%

Property type distribution: commercial mortgage loans
Office	$	292,968	8.5	%	$	297,065	8.3	%
Medical Office	17,718		0.5	%	20,584		0.6	%
Retail	1,116,376		32.3	%	1,187,484		33.2	%
Industrial/Warehouse	911,293		26.3	%	929,325		25.9	%
Apartment	948,161		27.4	%	939,084		26.2	%
Mixed use/Other	173,363		5.0	%	206,612		5.8	%
	$	3,459,879	100.0	%	$	3,580,154	100.0	%

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Unaudited (Dollars in thousands)


	June 30, 2021
	Commercial		Agricultural		Residential		Total
Credit exposure - by payment activity
Performing	$	3,459,879	$	277,427	$	565,053	$	4,302,359
In workout	—		—		—		—
Delinquent	—		—		8,585		8,585

Principal outstanding	3,459,879		277,427		573,638		4,310,944

Unamortized discounts and premiums, net	—		—		16,212		16,212
Deferred fees and costs, net	(1,409)		(708)		1,487		(630)
Amortized cost	3,458,470		276,719		591,337		4,326,526

Valuation allowance	(22,498)		(454)		(3,629)		(26,581)
Carrying value	$	3,435,972	$	276,265	$	587,708	$	4,299,945

	December 31, 2020
	Commercial		Agricultural		Residential		Total
Credit exposure - by payment activity
Performing	$	3,580,154	$	245,807	$	366,047	$	4,192,008
In workout	—		—		—		—
Delinquent	—		—		273		273

Principal outstanding	3,580,154		245,807		366,320		4,192,281

Unamortized discounts and premiums, net	—		—		5,212		5,212
Deferred fees and costs, net	(1,266)		(634)		925		(975)
Amortized cost	3,578,888		245,173		372,457		4,196,518

Valuation allowance	(25,529)		(2,130)		(3,370)		(31,029)
Carrying value	$	3,553,359	$	243,043	$	369,087	$	4,165,489

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Shareholder Information

Corporate Offices:

American Equity Investment Life Holding Company

6000 Westown Parkway

West Des Moines, IA 50266

Inquiries:

Steven Schwartz, Vice President-Investor Relations

(515) 273-3763, sschwartz@american-equity.com

Common Stock and Dividend Information:

New York Stock Exchange symbol: “AEL”


	High	Low	Close	Dividend Declared
2021
First Quarter	$32.54	$26.21	$31.53	$0.00
Second Quarter	$33.68	$29.18	$32.32	$0.00



2020
First Quarter	$34.16	$9.07	$18.80	$0.00
Second Quarter	$27.09	$14.76	$24.71	$0.00
Third Quarter	$27.32	$19.06	$21.99	$0.00
Fourth Quarter	$34.25	$22.37	$27.66	$0.32

2019
First Quarter	$33.57	$26.34	$27.02	$0.00
Second Quarter	$30.91	$25.84	$27.16	$0.00
Third Quarter	$27.80	$20.16	$24.20	$0.00
Fourth Quarter	$30.96	$21.75	$29.93	$0.30

Transfer Agent:

Computershare Trust Company, N.A.

P.O. Box 43010

Providence, RI 02940-0310

Phone: (877) 282-1169

Fax: (781) 575-2723

www.computershare.com

Annual Report and Other Information:

Shareholders may receive when available, without charge, a copy of American Equity’s Annual Report, SEC filings and/or press releases by calling Steven Schwartz, Vice President-Investor Relations, at (515) 273-3763 or by visiting our website at www.american-equity.com.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2021

Research Analyst Coverage

Erik Bass

Autonomous Research US LP

(646) 561-6248

ebass@autonomous.com

Daniel Bergman

Citi Research

(212) 816-2132

daniel.bergman@citi.com

Wilma Burdis

Credit Suisse Securities

Equity Research | Life Insurance

(919) 306-1023

wilma.burdis@credit-suisse.com

Thomas Gallagher

Evercore ISI

(212) 446-9439

thomas.gallagher@evercoreisi.com

Pablo Singzon II

JP Morgan

(212) 622-2295

pablo.s.singzon@jpmorgan.com

Ryan Krueger

Keefe, Bruyette & Woods

(860) 722-5930

rkrueger@kbw.com

Bob Huang

Morgan Stanley Research

(212) 761-6136

Bob.Huang@morganstanley.com

John Barnidge

Piper Sandler & Co.

(312) 281-3412

John.Barnidge@psc.com

C. Gregory Peters

Raymond James & Associates, Inc.

(727) 567-1534

greg.peters@raymondjames.com

Mark A. Dwelle

RBC Capital Markets, LLC

(804) 782-4008

mark.dwelle@rbccm.com

Mark Hughes

Truist Securities

(615) 748-4422

mark.hughes@research.truist.com

Page 19