A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit ratings (ICR) of “a-” of American Equity Investment Life Insurance Company (American Equity Life) and its subsidiaries, American Equity Investment Life Insurance Company of New York (New York, NY) and Eagle Life Insurance Company (Eagle Life).
Concurrently, A.M. Best has affirmed the ICR of “bbb-” and all debt ratings of American Equity Life’s parent, American Equity Investment Life Holding Company (AEL) [NYSE: AEL], as well as the indicative ratings under the shelf registration of American Equity Capital Trust V and VI. The outlook for all ratings is stable. All companies are domiciled in Des Moines, IA, unless otherwise specified. (See below for a detailed list of all debt ratings.)
The ratings recognize American Equity’s leading role in the fixed indexed annuity marketplace, strong risk-adjusted capitalization, continued positive trends of statutory and GAAP operating earnings and strong surrender protection charges to mitigate potential disintermediation risk. In addition, A.M. Best views the financial leverage and interest coverage ratios of AEL within the guidelines for its current ratings.
American Equity Life continues to benefit from strong growth in its core fixed-indexed annuity business and diverse distribution relationships. On a risk-adjusted basis, the company’s capitalization trends have strengthened over the past five years despite its accelerated new business growth and high demand on its capital resources. Its enterprise risk management and asset liability matching strategies remain supportive of the ratings.Partially offsetting these positive rating factors are American Equity Life’s mono-line business profile with significant product concentration risk from fixed indexed annuities, its relatively high level of acquisition costs, relatively high exposure to residential mortgage-backed securities (RMBS) and commercial mortgages, exposure to the risk of narrowing spreads in the current low interest rate environment and the entrance of new competitors into the fixed indexed annuity marketplace, which could pressure profit margins and growth opportunities.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV