American Equity moves $2B in second-quarter annuities as sale nears

American Equity celebrated another milestone in its remarkable turnaround with $2 billion in second-quarter annuity sales.

The Des Moines, Iowa insurer will release full second-quarter results Aug. 7. Of the $2 billion, 94% were fixed-indexed annuities, American Equity said in a news release. Total enterprise FIA sales increased 94% compared to the first quarter of 2023 and 141% compared to the second quarter of 2022, the release said.

“This significant increase in sales reflects the value proposition offered by our industry-leading FIA solutions, enhanced by our private asset strategies driving strong new money yields," CEO Anant Bhalla said. "Each aspect of the AEL flywheel is working seamlessly – a testament to our team’s execution of the AEL 2.0 strategy – creating momentum in annuity origination and ensuring lifelong financial dignity for our policyholders.”

American Equity sold $964 million worth of fixed indexed annuities in Q1, an increase of 23.2% and 9.3% compared to fourth and first quarters of 2022, respectively. Overall annuity sales totaled $1.4 billion.

In the meantime, Brookfield Reinsurance is in the midst of acquiring American Equity in a deal valued at $4.3 billion. Announced last month, the deal represents a 35% premium American Equity's the share price at the time.

The second-quarter earnings call will be the company's last, the news release said. Brookfield is a private company.

Protest urged

American Equity has been the subject of several takeover rumors and attempts. The first takeover bid, by MassMutual and Athene in 2020, was thwarted when Brookfield came to the rescue with a large investment infusion.

Brookfield Re is the biggest shareholder in American Equity with a roughly 20% stake, according to regulatory filings.

But not everyone is happy with the deal, which the Des Moines Register reported could be worth up to $90 million in compensation to Bhalla alone.

Unite Here, a union with about 262,000 members across the country, took out a full-page ad in the Register this week urging customers to oppose the Brookfield acquisition. The union cautioned that Brookfield Re will expose policyholder funds to riskier investments,

Unite Here voiced similar opposition when Brookfield Re acquired American National Group in a $5.1 billion deal completed last year. When American National entered the pension risk transfer market in December, Unite Here sent a letter to plan administrators.

"Pension obligations should not be used as a cheap funding source for private equity asset managers chasing the illiquidity premium or offloading illiquid assets their own affiliates have originated,” the letter reads.

Sheryl Moore, CEO of both Moore Market Intelligence and Wink, Inc., does not see Brookfield as a threat to American Equity policyholders.

"It doesn't seem like a huge risk to me," she said. "Everything has been business as usual at American National, and they acquired them a year ago. I haven't had any concerns about Brookfield as a result."

Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.