American Equity Investment Life Holding Company
11/13/2025 | Press release | Distributed by Public on 11/13/2025 16:04
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's discussion and analysis reviews our unaudited condensed consolidated financial position at September 30, 2025 compared with December 31, 2024, and our unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2025 and 2024, and where appropriate, factors that may affect future financial performance. This analysis should be read in conjunction with our unaudited condensed consolidated financial statements, notes thereto and selected condensed consolidated financial data appearing elsewhere in this Form 10-Q as well as the December 31, 2024 audited consolidated financial statements included in the Form 10-K, filed with the SEC on March 31, 2025. Interim operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the entire year. Preparation of financial statements requires use of management estimates and assumptions.
Cautionary Statement Regarding Forward-Looking Information
All statements, trend analysis and other information contained in this report and elsewhere (such as in filings by us with the SEC, press releases, presentations by us or management or oral statements) may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements give expectations or forecasts of future events and do not relate strictly to historical or current facts. They may relate to markets for our products, trends in our operations or financial results, strategic alternatives, future operations, strategies, plans, partnerships, investments, share buybacks and other financial developments. They use words and terms such as anticipate, assume, believe, can, continue, could, enable, estimate, expect, foreseeable, goal, improve, intend, likely, may, model, objective, opportunity, outlook, plan, potential, project, remain, risk seek, should, strategy, target, will, would, and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all forms of speech and derivative forms, or similar words, as well as any projections of future events or results. Forward-looking statements, by their nature, are subject to a variety of assumptions, risks, and uncertainties that could cause actual results to differ materially from the results projected. Many of these risks and uncertainties cannot be controlled by the Company. Factors that may cause our actual decisions or results to differ materially from those contemplated by these forward-looking statements include, among other things:
•results differing from assumptions, estimates, and models.
•interest rate condition changes.
•investments losses or failures to grow as quickly as expected due to market, credit, liquidity, concentration, default, and other risks.
•option costs increases.
•counterparty credit risks.
•third parties service-provider failures to perform or to comply with legal or regulatory requirements.
•poor attraction and retention of customers or distributors due to competitors' greater resources, broader array of products, and higher ratings.
•information technology and communication systems failures or security breaches.
•credit or financial strength downgrades.
•inability to raise additional capital to support our business and sustain our growth on favorable terms.
•U.S. and global capital market and economic deterioration due to major public health issues, including political or social developments, or otherwise.
•failure to authorize and pay dividends on our preferred stock.
•subsidiaries' inability to pay dividends or make other payments to us.
•failure at reinsurance, investment management, or third-party capital arrangements.
•failure to prevent excessive risk-taking.
•failure of policies and procedures to protect from operational risks.
•increased litigation, regulatory examinations, and tax audits.
•changes to laws, regulations, accounting, and benchmarking standards.
•takeover or combination delays or deterrence by laws, corporate governance documents, or change-in-control agreements.
•effects of climate change, or responses to it.
•failure of efforts to meet environmental, social, and governance standards and to enhance sustainability.
For a detailed discussion of these and other factors that might affect our performance, see Item 1A of this report.
Overview of our Business
As a result of the Post-Effective Merger of American National into AEL, the condensed consolidated financial statements for the periods prior to the Post-Effective Merger represent the results of American National as the accounting acquirer. For periods subsequent to the Post-Effective Merger, the condensed consolidated financial statements represent the combined results of American National and AEL. See Note 1 - Organization and Description of the Companyfor additional discussion on the Post-Effective Merger. Throughout this report, unless otherwise specified or the context otherwise requires, all references to "ANGI", the "Company", "we", "our" and similar references are to American National Group Inc. and its consolidated subsidiaries.
Through our insurance subsidiaries, our Company is primarily focused on providing insurance solutions to individuals and institutions through a broad range of annuity and retirement products and services. Our business is presently conducted through our subsidiaries under three operating segments: Annuities, Property and Casualty ("P&C") and Life Insurance.
Key Financial Data
The following table presents key financial data of the Company:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Total assets | $ | 130,559 | $ | 123,659 | $ | 130,559 | $ | 123,659 | |||||||||||||||
| Net income (loss) attributable to American National Group Inc. common stockholder | 208 | (299) | 113 | 58 | |||||||||||||||||||
| Segment distributable operating earnings (1) | 464 | 407 | 1,375 | 904 | |||||||||||||||||||
(1)Distributable Operating Earnings is a Non-GAAP measure. See "Reconciliation of Non-GAAP Measures".
Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024
The results of operations discussed below comprise results for American National for the periods prior to the Post-Effective Merger and the combined results of American National and AEL for periods subsequent to the Post-Effective Merger.
Net Premiums
The breakdown of premiums by product, net of ceded premiums is as follows:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Annuities | |||||||||||||||||||||||
| Retail (1) | |||||||||||||||||||||||
| Fixed Index | $ | - | $ | 2 | $ | - | $ | 3 | |||||||||||||||
| Fixed Rate | - | 1 | 2 | 1 | |||||||||||||||||||
| Total Retail Annuities | - | 3 | 2 | 4 | |||||||||||||||||||
| Institutional | |||||||||||||||||||||||
| Pension Risk Transfer (2) | 99 | 285 | 734 | 1,228 | |||||||||||||||||||
| Total Institutional Annuities | 99 | 285 | 734 | 1,228 | |||||||||||||||||||
| Total Annuities | 99 | 288 | 736 | 1,232 | |||||||||||||||||||
| Life | 106 | 135 | 280 | 412 | |||||||||||||||||||
| Property Casualty | |||||||||||||||||||||||
| Property | 274 | 324 | 396 | 946 | |||||||||||||||||||
| Liability | 87 | 139 | 795 | 412 | |||||||||||||||||||
| Other | - | 2 | - | 35 | |||||||||||||||||||
| Total Property and Casualty | 361 | 465 | 1,191 | 1,393 | |||||||||||||||||||
| Total net premiums | $ | 566 | $ | 888 | $ | 2,207 | $ | 3,037 | |||||||||||||||
(1)Premiums received from retail annuities are generally recorded as deposits and are not included in net premiums on the Condensed Consolidated Statements of Operations.
(2)Premiums differ from gross annuity sales in Pension Risk Transfer (PRT), since premiums are recognized as revenue when due while they are included in sales upon deal close, which is confirmed by the counterparty.
Comparison of Three Months Ended September 30, 2025 vs. 2024
For the three months ended September 30, 2025, we reported total net premiums of $566 million, compared to net premiums of $888 million for the same period in 2024. The decrease of $322 million is primarily due to the phased withdrawal from non-core business in our P&C segment, reinsurance agreements executed on our Life Insurance segment, and a decline in our PRT related premiums due to overall decline in the market in 2025.
Comparison of Nine Months Ended September 30, 2025 vs. 2024
For the nine months ended September 30, 2025, we reported total net premiums of $2.2 billion, compared to net premiums of $3.0 billion for the same period in 2024. The decrease of $830 million is a result of the aforementioned phased withdrawal from non-core business in our P&C segment, reinsurance agreements executed on our Life Insurance segment, and a decline in our PRT related premiums due to overall decline in the market in 2025.
Gross annuity sales are comprised of directly written retail and institutional annuity deposits, which generally are not included in revenues on the Condensed Consolidated Statements of Operations.
The breakdown of gross annuity sales is as follows:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Retail: | |||||||||||||||||||||||
|
Fixed Index
|
$ | 2,528 | $ | 2,027 | $ | 6,876 | $ | 3,677 | |||||||||||||||
|
Fixed Rate
|
2,125 | 1,799 | 4,197 | 4,016 | |||||||||||||||||||
| Variable (1) | 101 | 17 | 227 | 47 | |||||||||||||||||||
|
Total Retail Annuities
|
4,754 | 3,843 | 11,300 | 7,740 | |||||||||||||||||||
| Institutional: | |||||||||||||||||||||||
| Pension Risk Transfer (2) | 100 | 289 | 744 | 1,233 | |||||||||||||||||||
| Funding Agreements | - | - | 900 | - | |||||||||||||||||||
|
Total Institutional Annuities
|
100 | 289 | 1,644 | 1,233 | |||||||||||||||||||
| Total gross annuity sales | $ | 4,854 | $ | 4,132 | $ | 12,944 | $ | 8,973 | |||||||||||||||
(1)Variable sales represent additional premiums on previously issued policies.
(2)Gross annuity sales differ from premiums in Pension Risk Transfer, since premiums are recognized as revenue when due while they are included in sales upon deal close, which is confirmed by the counterparty.
Comparison of Three Months Ended September 30, 2025 vs. 2024
For the three months ended September 30, 2025, we reported total gross annuity sales of $4.9 billion, compared to gross annuity sales of $4.1 billion for the same period in 2024. The increase of $722 million is primarily due to increased sales activity in our fixed index and fixed rate retail annuity products.
Comparison of Nine Months Ended September 30, 2025 vs. 2024
For the nine months ended September 30, 2025, we reported total gross annuity sales of $12.9 billion, compared to gross annuity sales of $9.0 billion in the prior year period. The increase of $4.0 billion is primarily due to our funding agreement backed notes ("FABN") issuances during the period coupled with increased sales in our fixed index annuity product primarily contributed from the inclusion of AEL for the full period in 2025.
The following table summarizes the financial results of our business for the three and nine months ended September 30, 2025 and 2024:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net premiums | $ | 566 | $ | 888 | $ | 2,207 | $ | 3,037 | |||||||||||||||
| Other policy revenue | 181 | 208 | 502 | 504 | |||||||||||||||||||
| Net investment income | 1,285 | 1,024 | 3,720 | 2,396 | |||||||||||||||||||
| Investment related gains (losses) | 2 | (128) | 71 | (160) | |||||||||||||||||||
| Other income | 24 | 12 | 83 | 12 | |||||||||||||||||||
| Total revenues | 2,058 | 2,004 | 6,583 | 5,789 | |||||||||||||||||||
| Policyholder benefits and claims incurred | 527 | 846 | 2,243 | 2,962 | |||||||||||||||||||
| Interest sensitive contract benefits | 523 | 523 | 1,520 | 1,068 | |||||||||||||||||||
| Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired | 345 | 289 | 995 | 649 | |||||||||||||||||||
| Change in fair value of insurance-related derivatives and embedded derivatives | (187) | 344 | 143 | 346 | |||||||||||||||||||
| Change in fair value of market risk benefits | 310 | 134 | 624 | 292 | |||||||||||||||||||
| Operating expenses | 156 | 228 | 647 | 666 | |||||||||||||||||||
| Interest expense | 47 | 49 | 140 | 114 | |||||||||||||||||||
| Total benefits and expenses | 1,721 | 2,413 | 6,312 | 6,097 | |||||||||||||||||||
| Net income (loss) before income taxes | 337 | (409) | 271 | (308) | |||||||||||||||||||
| Income tax expense (benefit) | 119 | (77) | 102 | (337) | |||||||||||||||||||
| Net income (loss) | 218 | (332) | 169 | 29 | |||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | (1) | (44) | 4 | (51) | |||||||||||||||||||
| Net income (loss) attributable to American National Group Inc. stockholders | 219 | (288) | 165 | 80 | |||||||||||||||||||
| Less: Preferred stock dividends and redemption | 11 | 11 | 52 | 22 | |||||||||||||||||||
| Net income (loss) attributable to American National Group Inc. common stockholder | $ | 208 | $ | (299) | $ | 113 | $ | 58 | |||||||||||||||
Comparison of Three Months Ended September 30, 2025 vs. 2024
For the three months ended September 30, 2025, we reported net income of $219 million, compared to net loss of $(288) million for the same period in 2024. The increase of $507 million was primarily driven by a decrease in the change in fair value of insurance-related derivatives and embedded derivatives as a result of equity market and interest rate movements, a decrease in policyholder benefits and claims incurred, an increase in net investment income, and a decrease in operating expenses. Those impacts were partially offset by an increase in amortization of DAC, DSI, and VOBA which is a result of continued growth of the annuity business, a decrease in net premiums, and an increase in the change in fair value of market risk benefits.
Net premiums and other policy revenue were $747 million for the three months ended September 30, 2025, compared to $1.1 billion for the same period in 2024. The decrease of $349 million was primarily attributable to lower PRT sales in the quarter as compared to the prior year and the phased withdrawal from non-core businesses in our P&C segment.
Net investment income increased by $261 million for the three months ended September 30, 2025, compared to the same period in 2024. Net investment income comprise interest and dividends received on financial instruments, equity investments and other miscellaneous fee income. The increase in 2025 was driven by the increase in assets under management due to growth of the business as well as the continued rotation into higher yielding investment strategies.
We recorded $2 million of investment related gains for the three months ended September 30, 2025, an increase of $130 million compared to the same period in 2024. The increase was primarily driven by the non-recurrence of the realized losses on investments recognized during the third quarter of 2024 as a result of the transfer of assets pursuant to the RGA reinsurance transaction which was effective July 1, 2024.
Policyholder benefits and claims incurred were $527 million for the three months ended September 30, 2025, compared to $846 million for the same period in 2024. The decrease of $319 million was primarily due to a decrease in PRT sales which resulted in lower reserve changes coupled with a decrease in claims incurred due to the impact of business ceded to RGA subsequent to the effectuation of the life insurance reinsurance transaction.
Interest sensitive contract benefits represent interest credited to policyholders' account balances from our investment contracts with customers. During the three months ended September 30, 2025, interest sensitive contract benefits were equivalent compared to the same period in 2024, driven mainly by new business issued within our annuities segment and equity market movements, offset by surrender and withdrawal activities.
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $56 million compared to the same period in 2024, primarily due to the continued growth of the annuity business which increases the deferred acquisition cost and deferred sales inducements assets.
Change in fair value of insurance-related derivatives and embedded derivatives decreased by $531 million for the three months ended September 30, 2025 compared to the same period of 2024. The decrease was primarily due to the favorable impact of assumption updates as a result of our annual assumption review along with the impact of interest rates and equity market performance on the fair value of the embedded derivatives and equity-indexed options.
Change in fair value of market risk benefits represents the mark-to-market movements of our liability based on protection to the policyholder from capital market risk. The increase in the fair value of market risk benefits of $176 million for the three months ended September 30, 2025 compared to the same period of 2024 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities coupled with the impact of assumption updates as a result of our annual assumption review.
Operating expenses were $156 million for the three months ended September 30, 2025, compared to $228 million for the same period in 2024, a decrease of $72 million. The decrease was primarily driven by a non-recurring $27 million benefit realized from the termination of American National's pension plan, as well as ongoing cost optimization efforts.
The decrease of $2 million of interest expense on borrowings compared to the same period in 2024 was mainly due to the consolidation impact of certain investment variable interest entities.
Comparison of Nine Months Ended September 30, 2025 vs. 2024
The results of operations discussed below comprise results for American National for the periods prior to the Post-Effective Merger and the combined results of American National and AEL for periods subsequent to the Post-Effective Merger.
For the nine months ended September 30, 2025, we reported net income of $165 million, compared to a net income of $80 million for the same period in 2024. The increase is primarily driven by an increase in net investment income due to the inclusion of American Equity following the acquisition and an increase in investment related gains (losses) as a result of the non-recurrence of realized losses recognized in the prior year as a result of the transfer of assets pursuant to the RGA reinsurance transaction which was effective July 1, 2024, and a decrease in policyholder benefits and claims incurred. Those impacts were partially offset by an increase in the change in fair value of market risk benefits as a result of equity market and interest rate movements, an increase in interest sensitive contract benefits, an increase in amortization of DAC, DSI, and VOBA, and an increase in interest expense all of which are a result of continued growth of the annuity business and inclusion of American Equity following the acquisition.
Net premiums and other policy revenue of $2.7 billion decreased by $832 million for the nine months ended September 30, 2025, compared to the same period in 2024 primarily due to lower PRT sales as compared to the prior year period coupled with the phased withdrawal from non-core businesses in our P&C segment.
Net investment income increased by $1.3 billion for the nine months ended September 30, 2025, compared to the same period in 2024. The increase was primarily driven by the increase in assets under management following the acquisition of American Equity as well as the continued rotation into higher yielding investment strategies.
The Company realized investment related gains of $71 million for the nine months ended September 30, 2025, compared to losses of $160 million for the same period in 2024. The increase in investment gains of $231 million was primarily due to one-time realized losses recognized in the prior year as a result of the transfer of assets pursuant to the RGA reinsurance transaction which was effective July 1, 2024 as well as realized gains recognized during 2025 through the foreclosure and conversion of certain agricultural loans to real estate owned.
Policyholder benefits and claims incurred decreased by $719 million for the nine months ended September 30, 2025, compared to the same period in 2024. The decrease is primarily due to a reduction in PRT sales which resulted in lower reserve changes coupled with a decrease in claims incurred due to the impact of life insurance business ceded to RGA subsequent to the effectuation of the reinsurance transaction.
For the nine months ended September 30, 2025, interest sensitive contract benefits increased compared to the same period in 2024 by $452 million which was primarily driven by an increase in the in-force block of annuity business following the acquisition of American Equity.
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $346 million compared to the same period in 2024, primarily due to an increase in the amortization of VOBA due to the increase in the VOBA asset following the acquisition of American Equity as well as the continued growth of the annuity business which increases the deferred acquisition cost and deferred sales inducements assets.
Change in fair value of insurance-related derivatives and embedded derivatives decreased by $203 million for the nine months ended September 30, 2025 compared to the same period of 2024. The decrease was primarily due to the favorable impact of assumption updates as a result of our annual assumption review in the third quarter of 2025 along with the impact of interest rates and equity market performance on the fair value of the embedded derivatives and equity-indexed options.
The increase in the change in fair value of market risk benefit of $332 million for the nine months ended September 30, 2025 compared to the same period of 2024 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities, as well as impacts from assumption updates as a result of the annual assumption review. Additionally, the market risk benefit liabilities increased as a result of the acquisition of American Equity leading to increases in the change in the fair value of these liabilities.
Operating expenses decreased by $19 million for the nine months ended September 30, 2025 compared to the same period in 2024, primarily driven by non-recurring expenses from the acquisition of American Equity in 2024 as well as a one-time benefit realized from the termination of American National's pension plan during the third quarter of 2025.
Interest expense on borrowings increased by $26 million for the nine months ended September 30, 2025 compared to the same period in 2024 primarily as a result of increased borrowings with the new term loan entered into in May 2024, senior notes issued in June 2025, junior subordinated notes entered into in August 2025, as well as the acquisition of American Equity which included legacy senior notes and subordinated debt. These increases in interest expense were partially offset by recurring repayments of the term loan during 2025.
Distributable Operating Earnings
We measure operating performance primarily using Distributable Operating Earnings ("DOE") which is a Non-GAAP metric which measures our ability to acquire net insurance assets at a positive margin, and invest these assets at a return that is greater than the cost of policyholder liabilities. See "Performance Measures Used by Management" for the reconciliation of GAAP consolidated net income to DOE.
The following table presents DOE of each of our reporting segments for the three and nine months ended September 30, 2025 and 2024:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Annuities | $ | 389 | $ | 342 | $ | 1,168 | $ | 691 | |||||||||||||||
| Life Insurance | 37 | 42 | 109 | 162 | |||||||||||||||||||
| Property and Casualty | 38 | 23 | 98 | 51 | |||||||||||||||||||
| Segment DOE | $ | 464 | $ | 407 | $ | 1,375 | $ | 904 | |||||||||||||||
Comparison of Three Months Ended September 30, 2025 vs. 2024
Annuities - DOE within our annuities business represents contribution from both our retail and institutional platforms. DOE increased by $47 million for the three months ended September 30, 2025 compared to the same period in 2024. The increase is primarily attributable to increased investment income from our continued deployment into higher yielding investment strategies.
Life Insurance - DOE decreased by $5 million for the three months ended September 30, 2025 compared to the same period in 2024. The decrease is primarily driven by the favorable impact of assumption updates from the annual assumption review.
Property and Casualty - DOE increased by $15 million for the three months ended September 30, 2025 compared to the same period in 2024. The increase was driven by improvements in our loss experience arising from underwriting actions implemented over the past twelve months.
Comparison of Nine Months Ended September 30, 2025 vs. 2024
Annuities - DOE increased by $477 million for the nine months ended September 30, 2025 compared to the same period in 2024. The increase is primarily attributable to a full period of earnings contributed from AEL, coupled with new business wins and higher spread earnings.
Life Insurance - DOE decreased by $53 million for the nine months ended September 30, 2025 compared to the same period in 2024. The decrease was driven by the impact of the aforementioned RGA reinsurance treaty executed during the third quarter of 2024.
Property and Casualty - DOE increased by $47 million for the nine months ended September 30, 2025 compared to the same period in 2024. The increase was driven by improvements in loss experience arising from underwriting actions implemented since the prior year period.
Financial Condition
Comparison as of September 30, 2025 and December 31, 2024
The following table summarizes the financial position as of September 30, 2025 and December 31, 2024:
| September 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Assets | |||||||||||
| Investments | $ | 89,728 | $ | 80,755 | |||||||
| Cash and cash equivalents | 11,568 | 11,330 | |||||||||
| Accrued investment income | 786 | 761 | |||||||||
| Deferred policy acquisition costs, deferred sales inducements and value of business acquired | 11,384 | 10,631 | |||||||||
| Premiums due and other receivables | 499 | 437 | |||||||||
| Ceded unearned premiums | 143 | 132 | |||||||||
| Deferred tax asset | 303 | 529 | |||||||||
| Reinsurance recoverables and deposit assets | 9,531 | 10,055 | |||||||||
| Property and equipment | 170 | 175 | |||||||||
| Intangible assets | 1,541 | 1,545 | |||||||||
| Other assets | 2,928 | 2,745 | |||||||||
| Goodwill | 783 | 783 | |||||||||
| Separate account assets | 1,195 | 1,343 | |||||||||
| Total assets | $ | 130,559 | $ | 121,221 | |||||||
| Liabilities | |||||||||||
| Future policy benefits | $ | 10,345 | $ | 9,170 | |||||||
| Policyholders' account balances | 89,469 | 83,079 | |||||||||
| Policy and contract claims | 1,811 | 1,867 | |||||||||
| Market risk benefits | 4,505 | 3,655 | |||||||||
| Unearned premium reserve | 733 | 1,044 | |||||||||
| Due to related parties | 115 | 80 | |||||||||
| Other policyholder funds | 353 | 347 | |||||||||
| Notes payable | 204 | 189 | |||||||||
| Long term borrowings | 3,449 | 2,957 | |||||||||
| Funds withheld for reinsurance liabilities | 3,131 | 3,321 | |||||||||
| Other liabilities | 4,268 | 4,141 | |||||||||
| Separate account liabilities | 1,195 | 1,343 | |||||||||
| Total liabilities | 119,578 | 111,193 | |||||||||
| Equity | |||||||||||
| Preferred stock, Series A | - | 389 | |||||||||
| Preferred stock, Series B | 296 | 296 | |||||||||
| Preferred stock, Series D | 292 | - | |||||||||
| Additional paid-in capital | 7,558 | 7,569 | |||||||||
| Accumulated other comprehensive income, net of taxes | 1,132 | 340 | |||||||||
| Retained earnings | 1,480 | 1,356 | |||||||||
| Non-controlling interests | 223 | 78 | |||||||||
| Total equity | 10,981 | 10,028 | |||||||||
| Total liabilities and equity | $ | 130,559 | $ | 121,221 | |||||||
September 30, 2025 vs. December 31, 2024
Total assets increased by $9.3 billion during the period to $130.6 billion. The increase is primarily driven by net annuity inflows which results in increased cash and investment purchases, the issuance of the 2055 Notes, and favorable fair value movements on our equity securities portfolio.
Total investments increased by $9.0 billion from December 31, 2024 to September 30, 2025. The increase is primarily driven by the net annuity inflows and redeployment of cash and cash equivalents into fixed maturity investments resulting in increased investment purchases and favorable unrealized fair value movements on our equity securities portfolio.
Cash and cash equivalents increased by $238 million from December 31, 2024 to September 30, 2025. The increase is primarily driven by the issuance of the 2055 Notes during the third quarter of 2025 as well as annuity sales during the period not yet deployed into our investments. We continue to maintain a strong liquidity position across our segments. For further information, refer to "Liquidity and Capital Resources" section within this MD&A.
Deferred policy acquisition costs ("DAC"), deferred sales inducements ("DSI") and value of business acquired ("VOBA") are capitalized costs directly related to writing new policyholder contracts and include the VOBA intangible assets. During the year, the balance increased by $753 million primarily driven by deferrals associated with writing new business during the period.
Ceded unearned premiums represent a portion of unearned premiums ceded to reinsurers. The increase of $11 million from December 31, 2024 to September 30, 2025 is primarily driven by the recognition of earned premiums subject to reinsurance.
Deferred tax assets decreased by $226 million from December 31, 2024 to September 30, 2025. The decrease is primarily due to changes in the deferred tax asset related to Bermuda and changes in unrealized gains or losses in our investments offset by an increase in our net operating loss carryforwards.
Reinsurance recoverables and deposit assets are estimated amounts due to the Company from reinsurers and include reinsurance receivables and recoverables from reinsurers and deposit assets associated with reinsurance agreements. The amount decreased by $524 million primarily driven by a reduction in the associated insurance liabilities as well as the run off of certain blocks of business ceded to external reinsurers.
Intangible assets decreased by $4 million during the year, primarily due to the amortization of intangible assets during the period.
Other assets increased by $183 million during the year to $2.9 billion. The balance includes current tax asset, market risk benefit asset, as well as other miscellaneous receivables, and is primarily attributable to an increase in the market risk benefit asset as a result of assumption updates made during the annual assumption review.
Separate account assets and liabilities both decreased by $148 million during 2025, primarily due to policyholder benefits and withdrawals during the quarter as well as the release of $174 million of assets and the associated liabilities related to the lump sum payout of a portion of the qualified defined benefit pension plan during Q3 2025.
Future policy benefits and policyholders' account balances increased by $7.6 billion during 2025 primarily driven by annuity sales during the period as well as assumption updates as a result of the annual assumption review and the impact of changes in interest rates and equity markets on the valuation of the embedded derivatives during the period.
Market risk benefits increased by $850 million during 2025 primarily due to the impact of changes in interest rates and equity markets as well as assumption updates as a result of the annual assumption review on the valuation of market risk benefits.
Funds withheld for reinsurance liabilities decreased by $190 million during 2025 as a result of decrements on the existing ceded liabilities and the corresponding funds withheld payable as flow business is not being ceded to external reinsurers.
Other liabilities increased by $127 million during 2025. The balance includes the reinsured market risk benefits liability, accrued interest on debt and other miscellaneous payables. The increase during 2025 is primarily driven by an increase in miscellaneous payables.
Liquidity and Capital Resources
Capital Resources
We strive to maintain sufficient financial liquidity at all times so that we are able to participate in attractive opportunities as they arise, better withstand sudden adverse changes in economic circumstances within our operating subsidiaries and maintain payments to policyholders. Our principal sources of liquidity are cash flows from our operations and access to the Company's third-party credit facilities. We proactively manage our liquidity position to meet liquidity needs and continue to develop relationships with lenders who provide borrowing capacity at competitive rates, while looking to minimize adverse impacts on investment returns. We look to structure the ownership of our assets to enhance our ability to monetize them to provide additional liquidity, if needed. Our liquidity for the periods noted below consisted of the following:
| September 30, 2025 | December 31, 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Cash and cash equivalents | $ | 11,568 | $ | 11,330 | |||||||
| Liquid financial assets | 39,017 | 32,947 | |||||||||
| Undrawn credit facilities | 1,462 | 881 | |||||||||
| Total liquidity (1) | $ | 52,047 | $ | 45,158 | |||||||
(1)Total Liquidity is a Non-GAAP measure. See "Performance Measures used by Management."
Today, we have significant liquidity within our insurance portfolios, giving us flexibility to secure attractive investment opportunities. In addition to a portfolio of highly liquid financial assets, our operating companies have additional access to liquidity from sources such as the Federal Home Loan Bank ("FHLB") and access to a sub-allocation under the Brookfield Wealth Solutions revolving credit facility. As of September 30, 2025, the Company had no drawings and a total of $1.5 billion undrawn commitment available related to this program, and access to $300 million of capacity under the revolving credit facility.
Liquidity within our insurance subsidiaries may be restricted from time to time due to regulatory constraints. As of September 30, 2025, the Company's total liquidity was $52.0 billion, which included $764 million of unrestricted cash and cash equivalents held outside of the regulated insurance companies.
Comparison of the Nine Months Ended September 30, 2025 and 2024
The following table presents a summary of our cash flows and ending cash balances for the nine months ended September 30, 2025 and 2024:
|
Nine Months Ended September 30, |
|||||||||||
| 2025 | 2024 | ||||||||||
| (Dollars in millions) | |||||||||||
| Operating activities | $ | 1,636 | $ | 2,104 | |||||||
| Investing activities | (6,485) | 6,565 | |||||||||
| Financing activities | 5,087 | 2,012 | |||||||||
| Cash and cash equivalents: | |||||||||||
| Cash and cash equivalents, beginning of period | 11,330 | 3,192 | |||||||||
| Net change during the period | 238 | 10,681 | |||||||||
| Cash and cash equivalents, end of period | $ | 11,568 | $ | 13,873 | |||||||
Operating Activities
For the nine months ended September 30, 2025, we generated $1.6 billion of cash from operating activities compared to $2.1 billion during 2024, primarily due to the change in the fair value of embedded derivatives for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 as detailed above.
Investing Activities
For the nine months ended September 30, 2025, cash outflows arose as we deployed cash and cash equivalents held as of December 31, 2024 to short-term investments, private loans, and available-for-sale fixed maturity securities and continued to rotate our investment portfolio into higher yielding investment strategies. This resulted in net deployment of $6.5 billion of cash from investing activities, compared to net inflow of $6.6 billion in the prior year.
Financing Activities
For the nine months ended September 30, 2025, we recorded a net cash inflow of $5.1 billion from our financing activities, compared to net inflow of $2.0 billion recorded in 2024. The proceeds in the current year period were mainly as a result of $4.5 billion net payments received on policyholders' account deposits partially offset by withdrawals on such accounts.
Financial Instruments
To the extent that we believe it is economically prudent to do so, our strategy is to hedge a portion of our equity investments and/or cash flows exposed to foreign currencies by the Company. The following key principles form the basis of our foreign currency hedging strategy:
•We leverage any natural hedges that may exist within our operations;
•We utilize local currency debt financing to the extent possible; and
•We may utilize derivative contracts to the extent that natural hedges are insufficient.
Future Capital Obligations and Requirements
As of September 30, 2025, the Company and its subsidiaries, in aggregate, had total unfunded investment commitments of $6.9 billion. The unfunded commitments are primarily recognized as mortgage loans, private loans, investment funds, investment real estate and other invested assets. For additional information, see Note 27 - Financial Commitments and Contingenciesof the financial statements.
The following is the maturity by year on long term borrowings:
| Payments Due by Year | |||||||||||||||||||||||||||||||||||||||||||||||
| Total |
Unamortized Discount and Issuance Costs |
Less Than 1 year |
1-2 Years | 2-3 Years | 3-4 Years | 4-5 Years |
More Than 5 Years |
||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
|
As of September 30, 2025
|
|||||||||||||||||||||||||||||||||||||||||||||||
| Long term borrowings | $ | 3,449 | $ | (51) | $ | - | $ | 1,100 | $ | - | $ | - | $ | 600 | $ | 1,800 | |||||||||||||||||||||||||||||||
|
As of December 31, 2024
|
|||||||||||||||||||||||||||||||||||||||||||||||
| Long term borrowings | $ | 2,957 | $ | (43) | $ | - | $ | - | $ | 1,800 | $ | - | $ | 600 | $ | 600 | |||||||||||||||||||||||||||||||
For additional information, See Note 21 - Long Term Borrowingsof the financial statements.
Capital Management
Capital management is the on-going process of determining and maintaining the quantity and quality of capital appropriate to take advantage of the Company's growth opportunities, to support the risks associated with the business and to optimize shareholder returns while fully complying with the regulatory capital requirements.
The Company and its subsidiaries take an integrated approach to risk management that involves the Company's risk appetite and capital requirements. The operating capital levels are determined by the Company's risk appetite and Own Risk and Solvency Assessment ("ORSA"). Furthermore, additional stress techniques are used to evaluate the Company's capital adequacy under sustained adverse scenarios.
American National and AEL are required to follow Risk Based Capital ("RBC") requirements based on guidelines of the National Association of Insurance Commissioners ("NAIC"). RBC is a method of measuring the level of capital appropriate for an insurance company to support its overall business operations, in light of its size and risk profile. It provides a means of assessing capital adequacy, where the degree of risk taken by the insurer is the primary determinant.
The Company has determined that it is in compliance with all capital requirements as of September 30, 2025 and December 31, 2024.
Performance Measures Used by Management
To measure performance, we focus on net income and total assets, as well as certain Non-GAAP measures, including DOE and Total Liquidity, which we believe are useful to investors to provide additional insights into assets within the business available for redeployment. Refer to the "Results of Operations", "Financial Condition," and "Liquidity and Capital Resources" sections of this MD&A for further discussion on our performance and Non-GAAP measures for the three and nine months ended September 30, 2025 and 2024.
Non-GAAP Measures
We regularly monitor certain Non-GAAP measures that are used to evaluate our performance and analyze underlying business performance and trends. We use these measures to establish budgets and operational goals, manage our business and evaluate our performance. We also believe that these measures help investors compare our operating performance with our results in prior years. These Non-GAAP financial measures are provided as supplemental information to the financial measures presented in this MD&A that are calculated and presented in accordance with GAAP. These Non-GAAP measures are not comparable to GAAP and may not be comparable to similarly described Non-GAAP measures reported by other companies, including those within our industry.
Consequently, our Non-GAAP measures should not be evaluated in isolation, but rather, should be considered together with the most directly comparable GAAP measure in our condensed consolidated financial statements for the years presented. The Non-GAAP financial measures we present in this MD&A should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.
Distributable Operating Earnings
We use DOE to assess operating results and the performance of our businesses. We define DOE as net income after applicable taxes, excluding the impact of depreciation and amortization, deferred income taxes related to basis and other changes, and breakage and transaction costs, as well as certain investment and insurance reserve gains and losses, including gains and losses related to asset and liability matching strategies, non-operating adjustments related to changes in cash flow assumptions for future policy benefits and change in market risk benefits, and is inclusive of returns on equity invested in certain variable interest entities and our share of adjusted earnings from our investments in certain associates.
DOE is a measure of operating performance that is not calculated in accordance with, and does not have any standardized meaning prescribed by GAAP. DOE is, therefore, unlikely to be comparable to similar measures presented by other issuers.
We believe our presentation of DOE is useful to investors because it supplements investors' understanding of our operating performance by providing information regarding our ongoing performance that excludes items we believe do not directly affect our core operations. Our presentation of DOE also provides investors enhanced comparability of our ongoing performance across years.
Total Liquidity
Total Liquidity is a measure of our liquidity position and includes cash and cash equivalents, undrawn revolving credit facilities and liquid financial assets held by our regulated insurance entities.
The following table contains further details regarding our use of our Non-GAAP measures, as well as a reconciliation of GAAP consolidated net income to DOE:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net income (loss) attributable to American National Group Inc. common stockholder | $ | 208 | $ | (299) | $ | 113 | $ | 58 | |||||||||||||||
| Mark-to-market losses (gains) on insurance contracts and other net assets (2)(3) | (21) | 835 | 597 | 1,461 | |||||||||||||||||||
| Mark-to-market losses (gains) on investments, including reinsurance funds withheld (1) | 117 | (128) | 342 | (487) | |||||||||||||||||||
|
Transaction costs
|
(10) | 32 | 27 | 163 | |||||||||||||||||||
| Deferred income tax expense (recovery) relating to basis and other changes | 25 | (105) | (147) | (432) | |||||||||||||||||||
| Depreciation and amortization expenses | 35 | 25 | 125 | 49 | |||||||||||||||||||
| Corporate and other DOE | 110 | 47 | 318 | 92 | |||||||||||||||||||
| Segment DOE | $ | 464 | $ | 407 | $ | 1,375 | $ | 904 | |||||||||||||||
(1)"Mark-to-market losses (gains) on investments, including reinsurance funds withheld" primarily represent mark-to-market gains or losses on our investments. Mark-to-market gains or losses on our invested assets are presented as "Investment related gains (losses)" on the Condensed Consolidated Statements of Operations. See Note 10 - Net Investment Income and Investment Related Gains (Losses)in the notes to the condensed consolidated financial statements for additional details.
(2)"Mark-to-market losses (gains) on insurance contracts and other net assets" principally represents the mark-to-market effect on insurance-related liabilities, net of reinsurance, due to changes in market risks (e.g., interest rates, equity markets and equity index volatility). These mark-to-market effects are primarily included in "Interest sensitive contract benefits", "Change in fair value of insurance-related derivatives and embedded derivatives" and "Change in fair value of market risk benefits" on the Condensed Consolidated Statements of Operations. See the following notes to the condensed consolidated financial statements for additional information: (i) Note 9 - Derivative Instruments; (ii) Note 18 - Policyholders' Account Balances; and (iii) Note 19 - Market Risk Benefits.
(3)Included in "Mark-to-market losses (gains) on insurance contracts and other net assets" are "returns on equity invested in certain variable interest entities" and "our share of adjusted earnings from our investments in certain associates" as stated in the definition of DOE. "Returns on equity invested in certain variable interest entities" primarily represent equity-accounted income from our investments in real estate partnerships and investment funds and are included in "Net investment income" on the Condensed Consolidated Statements of Operations.
New Accounting Pronouncements
See Note 2 - Summary of Significant Accounting Policiesto our unaudited condensed consolidated financial statements in this Form 10-Q, which is incorporated by reference in this Item 2.
American Equity Investment Life Holding Company published this content on November 13, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 13, 2025 at 22:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]