American Equity Sells More Annuities This Year

Annuity sales for 2009 topped $3 billion at American Equity Investment Life Holding Co., the company said Wednesday.

Due to uncompromising dedication to delivering quality products and services, the company has stepped up sales to meet increased demand for fixed-index annuities and other principal-protected products.

Changes in Market Compel More Americans to Buy Annuities

From third quarter 2008’s $572 million, annuity sales increased 71% to $980 million in the quarter. This growth can probably be attributed to the deep impact the volatility and market declines had on consumer attitudes in the last twelve months.

American Equity recorded an operating income of $28.2 million during the third quarter (that’s a 26% increase over the same amount of time last year) thanks to booming annuity sales. Operating income doesn’t include investment gains and losses in the quarter.

From last year’s net loss of $11.7 million, this year’s figure is looking up at $3 million. The net loss included $11.5 million of realized losses on investments.

American Equity claims to be taking steps to shore up its capital reserves to keep up its excellent rating by A.M. Best Co., including drawing down on its line of credit, restructuring commission payments and expanding reinsurance treaty.

The company also ceded $513.8 million of annuity premium to Athene Life Re under funds withheld reinsurance arrangements in the third quarter and raised $1.1 million by issuing 132,300 shares in the quarter.