Athene sets record quarter in Q3 with $872M earnings

Retirement income products are in such high demand that executives at Athene – which saw record earnings in the third quarter – believe the industry is in a “golden age of annuities.

Athene, which is owned by Apollo Global Management, reported non-GAAP earnings of $872 million in the third quarter of 2023, a record quarter for the firm and a 36% improvement on the same period last year. The company is seeing strong organic growth with $13 billion of inflows in the third quarter, including $6.4 billion in its retail channel.

The company has already brought in more total inflows in the first nine months of 2023 than it did in the full year of 2023, which was a record-setting year for Athene.

'Ongoing momentum' drove earnings

“The ongoing momentum in our business drove another outperforming quarter, continuing what will be a record year for the company on every front,” said Athene CEO Jim Belardi on Thursday during a conference call to discuss earnings results.

Demand for annuities surged after interest rates rose from historic lows, and the worsening retirement crisis in the U.S. is driving long-term consumer interest in retirement income products, Belardi added. Athene expects 2023 will set a new record for the company but expects 2024 to be even better.

“The aging of the population, rising interest rates and market volatility are driving increasing demand for our products that we do not expect to slow down anytime soon,” he said. “Not surprisingly, consumers prefer a rate a 6% rate to a 2% rate.”

The boost in flows can also be attributed to Athene building new distribution partnerships with banks and broker-dealers. The company launched on the JPMorgan Chase platform in early August and early returns have been positive, said Grant Kvalheim.

Expanding institutional partnerships is a key priority for future growth, and Athene said it envisions launching on several new platforms in 2024.

'Fortress' balance sheet

In addition to record inflows – Athene is ranked number one in total annuity sales said Kvalheim - and spread earnings, Athene has built a “fortress” balance sheet with $21 billion in regulatory capital and $2.6 billion in excess equity capital.

While the firm’s is now the largest A+ rated company in retirement services, its excess capital is more equivalent to that of companies with AA- ratings, Belardi said. Improving its credit rating remains a top priority for the business, he added.

Ryan W. Neal has more than 14 years of experience as a reporter, including nine years covering the financial services industry. He formerly served as technology editor at Investment News. 

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