American Equity Investment Life Holding Company (NYSE: AEL), a leading underwriter of index and fixed rate annuities, today reported operating income 1 for the year 2011 of $133.7 million, or $2.12 per diluted common share, an increase of 23% over 2010 operating income of $108.9 million or $1.70 per diluted common share. 2011 fourth quarter operating income was $32.6 million, or $0.52 per diluted common share, an increase of 24% compared to 2010 fourth quarter operating income of $26.4 million or $0.41 per diluted common share. Operating earnings for the full year of 2011 were positively impacted by unlocking of assumptions utilized in the determination of deferred acquisition costs and deferred sales inducements which, as previously disclosed, increased third quarter 2011 operating income by $12.5 million or $0.20 per diluted common share.
Performance highlights for the fourth quarter and year of 2011 include:
- Total invested assets grew 23% to $24.4 billion at December 31, 2011 compared to $19.8 billion at December 31, 2010.
- Net investment income, the principal component of total revenues, grew to $1.22 billion for the year of 2011 and $324.3 million for the fourth quarter representing year over year growth of 18% and 17%, respectively.
- 2011 annuity sales were $5.1 billion ($4.8 billion net of coinsurance), and fourth quarter sales were $1.4 billion ($1.3 billion net of coinsurance) representing year over year growth of 9% for 2011 and a decline of 12% for the fourth quarter.
- Risk-based capital (“RBC”) ratio of 346% at December 31, 2011, compared to 339% at December 31, 2010.
- Book value per outstanding common share (excluding Accumulated Other Comprehensive Income) of $16.09 at December 31, 2011, compared to $15.33 at September 30, 2011.
- Operating earnings return on average equity of 14.8% for the year of 2011.
Commented David J. Noble, founder and Executive Chairman of American Equity: “When I founded American Equity in 1995 the idea of producing over $5 billion in new annuity sales in a single year would have exceeded my highest expectations. We are very proud of this accomplishment. Good products, good producers and good service make for a winning formula in any market environment, including the difficult low interest rate, high equity market volatility environment of 2011.”
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