American Equity annuity sales set a record
February 26, 2010 by Karen Mracek
By KAREN MRACEK • kmracek@dmreg.com • February 25, 2010
American Equity Investment Life Holding Co. reported a record operating income for last year, thanks to record annuity sales.
The West Des Moines provider of annuity and life insurance products earned $68.5 million for the year, compared with $15.9 million in 2008.
Operating income, which doesn’t include investment gains and losses, totaled a record $101.8 million, a 40 percent increase from 2008.
For the fourth quarter, the company reported a net income of $36 million and operating income of $28.7 million.
For the fourth quarter and full year of 2009, American Equity sold 12 percent of all fixed index annuities, ranking third in size of market share,” Executive Chairman David Noble said in a statement.
American Equity reported record annuity sales of $3.7 billion last year, and $900 million in the fourth quarter.
Sales of annuities were helped by declines in equity markets and low interest rates on competing products such as bank certificates of deposit, the company said.
Sales were also helped by competitors, such as Aviva USA and ING, who have been slowing the growth of these products. “While several competitors are expected to resume accepting a higher level of sales, favorable sales conditions have continued into the first quarter of 2010,” Noble said. “We are optimistic that 2010 will be another strong year for American Equity.”
American Equity also reported investment earnings of $932.2 million for the year, and $243.2 million for the fourth quarter. The company’s investing activities in 2009 reached an all-time high with approximately $6.7 billion invested in new fixed-income securities with an average yield of 6.35 percent, and $249 million in commercial mortgage loans with an average yield of 6.91 percent.
Shares of America Equity traded up 1.80 percent to close at $7.91 Wednesday, before the earnings results were released.
