American Equity posts quarterly loss despite strong sales
April 28, 2016 by Editorial Staff
American Equity Investment Life Holding Co., a leading issuer of fixed index annuities based in West Des Moines, today reported a first-quarter 2016 net loss of $44.8 million, or 55 cents per common share, compared with net income of $5.9 million, or 7 cents per common share, for first-quarter 2015. Operating income for the first quarter of 2016 was $21 million, compared with $48.8 million, for first-quarter 2015. First-quarter 2016 operating income was decreased by $28.6 million for revisions to investment spread assumptions used in determining deferred policy acquisition costs and deferred sales inducements. First-quarter sales of $2.1 billion were up 59 percent from last year’s first quarter and nearly equaled the single-quarter record set in the fourth quarter of 2015. “Our sales for the quarter were strong on both a gross and net basis,” CEO John Matovina said in a release. “As expected, we experienced more competition in the independent agent distribution channel for fixed index annuity products, and those sales fell by 20 percent.” The decline was partially offset by increased sales of multiyear guaranteed fixed annuity products, he said.
