American Equity Broadens Appeal of FIA Through Fee Options

American Equity Investment Life Holding Co., a top seller of fixed indexed annuities (FIAs), broadened the appeal of a core product line with the announcement of a new guaranteed lifetime income-focused fixed indexed annuity (FIA) with fee options.

The FIA, to be launched next month, will be sold only through independent marketing organizations and independent agents on a commission basis with the fee options applying to the guaranteed lifetime income rider.

The FIA will come in two flavors: a bonus version and a non-bonus version, American Equity Chairman and CEO John Matovina said.

Each version, depending on the deferral period, will have two fee-based options for lifetime income, he said.

A no-fee option, which will have lower lifetime income than the fee-based options, will also be available.

“This product incorporates significant input from our distribution partners, and we expect it to be well received in the market as income levels are expected to be competitive,” Matovina said in a news release.

American Equity’s subsidiary Eagle Life Insurance, which distributes FIAs through banks and broker/dealers, will not sell the new FIA.

Company Delivers 4Q Earnings Beat

On Wednesday, American Equity also reported fourth-quarter net income of $36.8 million.

The company said it had net income of $0.41 per share. Earnings, adjusted for investment gains, came to 82 cents per share.

The results exceeded Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 68 cents per share.

The annuity and insurance underwriter posted revenue of $1.2 billion in the fourth quarter. Its adjusted revenue was $578 million.

For the year, the company reported profit of $174.6 million, or $1.93 per share. Revenue was reported as $3.89 billion.

American Equity shares have fallen 1.7 percent since the beginning of the year. Shares closed Thursday at $30.21, an increase of 17 percent in the last 12 months.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].