American Equity Investment Life Holding Company

08/13/2026 | Press release | Distributed by Public on 08/13/2026 15:24

Quarterly Report for Quarter Ending June 30, 2026 (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 June 30, 2026 compared with December 31, 2025, and our unaudited condensed consolidated results of operations for the three and six months ended June 30, 2026 and 2025, 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, 2025 audited consolidated financial statements included in the Form 10-K, filed with the SEC on March 30, 2026. Interim operating results for the three and six months ended June 30, 2026 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-party 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
Through our insurance subsidiaries, our Company is focused on being a source of certainty for individuals and institutions through a range of insurance and retirement services.
Prior to October 1, 2025, the Company was organized into three segments, annuities, life insurance, and property and casualty. As discussed in Note 26 - Discontinued Operations, the Company completed the transfer of the P&C Subsidiaries on October 1, 2025. Subsequently during Q2 2026, it was announced that the sale of new life insurance products by American National through its career agent distribution channel would be terminated. American National had previously ceased selling new life insurance policies through its multiple-line and independent agent distribution channels in 2025. The transfer of the P&C Subsidiaries and withdrawal from the life insurance business represent strategic shifts for ANGI and accordingly, the property and casualty and life insurance segments are no longer reportable segments as the Company's chief operating decision maker ("CODM") is no longer allocating resources to those businesses and rather is focused on ANGI consolidated. See Note 24 - Segment Reporting for more information.
Key Financial Data
The following table presents key financial data of the Company:
Three Months Ended
June 30, 		Six Months Ended
June 30,
2026 2025 2026 2025
(Dollars in millions)
Total assets $ 131,714 $ 126,345 $ 131,714 $ 126,345
Net income (loss) attributable to American National Group Inc. common stockholder 198 141 191 (95)
Distributable operating earnings (1) 291 320 597 661
(1)Distributable Operating Earnings is a Non-GAAP measure. See "Reconciliation of Non-GAAP Measures".
Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025
Net Premiums
The breakdown of premiums by product, net of ceded premiums is as follows:
Three Months Ended
June 30, 		Six Months Ended
June 30,
2026 2025 2026 2025
(Dollars in millions)
Annuities:
Retail (1)
Fixed Rate $ - $ - $ - $ 2
Total Retail Annuities - - - 2
Institutional:
Pension Risk Transfer (2) 25 260 87 636
Total Institutional Annuities 25 260 87 636
Total Annuities 25 260 87 638
Life 117 94 200 174
Total net premiums $ 142 $ 354 $ 287 $ 812
(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 June 30, 2026 vs. 2025
For the three months ended June 30, 2026, we reported total net premiums of $142 million, compared to net premiums of $354 million for the same period in 2025. The decrease of $212 million is a result of a smaller PRT market during 2026 and our pricing discipline related to expected returns on this business.
Comparison of Six Months Ended June 30, 2026 vs. 2025
For the six months ended June 30, 2026, we reported total net premiums of $287 million, compared to net premiums of $812 million for the same period in 2025. The decrease of $525 million is a result of a smaller PRT market during 2026 and our pricing discipline related to expected returns on this business as noted above.
Gross Annuity Sales
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
June 30, 		Six Months Ended
June 30,
2026 2025 2026 2025
(Dollars in millions)
Retail:
Fixed Index $ 1,631 $ 2,513 $ 3,322 $ 4,348
Fixed Rate 1,175 1,052 2,554 2,095
Other (1) 177 57 353 103
Total Retail Annuities 2,983 3,622 6,229 6,546
Institutional:
Pension Risk Transfer (2) 30 262 94 644
Funding Agreements 700 400 1,200 900
Total Institutional Annuities 730 662 1,294 1,544
Total gross annuity sales $ 3,713 $ 4,284 $ 7,523 $ 8,090
(1)Other retail annuities represent sales of single premium immediate annuities and structured settlement annuities.
(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 June 30, 2026 vs. 2025
For the three months ended June 30, 2026, we reported total gross annuity sales of $3.7 billion, compared to gross annuity sales of $4.3 billion for the same period in 2025. The decrease of $571 million is primarily due to decreased sales activity in some of our fixed index retail annuity product coupled with a decline in PRT sales due to a smaller PRT market in 2026 and our pricing discipline related to expected returns on the PRT business.
Comparison of Six Months Ended June 30, 2026 vs. 2025
For the six months ended June 30, 2026, we reported total gross annuity sales of $7.5 billion, compared to gross annuity sales of $8.1 billion in the prior year period. Annuity sales declined quarter over quarter due to decreased sales in our fixed index annuity product. Additionally, PRT sales decreased due to a smaller PRT market during 2026 and our pricing discipline related to expected returns on the business.
The following table summarizes the financial results of our business for the three and six months ended June 30, 2026 and 2025:
Three Months Ended
June 30, 		Six Months Ended
June 30,
2026 2025 2026 2025
(Dollars in millions)
Net premiums $ 142 $ 354 $ 287 $ 812
Other policy revenue 190 172 352 321
Net investment income 1,289 1,139 2,578 2,390
Investment related gains (losses) 59 (11) 29 (8)
Other income 26 27 60 55
Total revenues 1,706 1,681 3,306 3,570
Policyholder benefits and claims incurred 244 510 475 1,112
Interest sensitive contract benefits 762 485 1,307 997
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired 271 246 543 484
Change in fair value of insurance-related derivatives and embedded derivatives (232) 131 (94) 330
Change in fair value of market risk benefits 109 (47) 248 314
Operating expenses 230 168 436 392
Interest expense 42 49 91 93
Total benefits and expenses 1,426 1,542 3,006 3,722
Net income (loss) before income taxes 280 139 300 (152)
Income tax expense (benefit) 72 27 89 (35)
Income (loss) from continuing operations 208 112 211 (117)
Income from discontinuing operations, net of tax - 42 - 68
Net income (loss) 208 154 211 (49)
Less: Net income from continuing operations attributable to noncontrolling interests, net of tax 4 2 8 5
Net income (loss) attributable to American National Group Inc. stockholders 204 152 203 (54)
Less: Preferred stock dividends and redemption 6 11 12 41
Net income (loss) attributable to American National Group Inc. common stockholder $ 198 $ 141 $ 191 $ (95)
Comparison of Three Months Ended June 30, 2026 vs. 2025
For the three months ended June 30, 2026, we reported net income of $204 million, compared to net income of $152 million for the same period in 2025. The increase of $52 million was primarily driven by a benefit from 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, and an increase in net investment income. Those impacts were partially offset by an increase in interest sensitive contract benefits due to higher index credits during the current period, an increase in the change fair value of market risk benefits, a decrease in net premiums, and an increase in operating expenses.
Net premiums and other policy revenue were $332 million for the three months ended June 30, 2026, compared to $526 million for the same period in 2025. The decrease of $194 million was primarily attributable to lower PRT sales in the quarter as compared to the prior year.
Net investment income increased by $150 million for the three months ended June 30, 2026, compared to the same period in 2025. Net investment income comprise interest and dividends recognized on financial instruments, equity investments and other miscellaneous fee income. The increase in 2026 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 $59 million of investment related gains for the three months ended June 30, 2026, an increase of $70 million compared to the same period in 2025. The increase was primarily driven by the change in unrealized gains (losses) on equity securities as well as an increase in realized gains recognized on investments in certain limited partnerships and limited liability companies.
Policyholder benefits and claims incurred were $244 million for the three months ended June 30, 2026, compared to $510 million for the same period in 2025. The decrease of $266 million was primarily due to a decrease in PRT sales which resulted in lower reserve changes.
Interest sensitive contract benefits represent interest credited to policyholders' account balances from our investment contracts with customers. During the three months ended June 30, 2026, interest sensitive contract benefits increased $277 million over the same period in 2025 due to new annuity business issued and an increase in index credits as a result of equity market movements, partially offset by surrender and withdrawal activities.
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $25 million compared to the same period in 2025, 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 $363 million for the three months ended June 30, 2026 compared to the same period of 2025. The decrease was primarily due to 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 $156 million for the three months ended June 30, 2026 compared to the same period of 2025 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities.
Operating expenses were $230 million for the three months ended June 30, 2026, compared to $168 million for the same period in 2025, a increase of $62 million. The increase was primarily driven by a one-time impairment of office property as well as approximately $17 million of non-recurring expenses related to the termination of the sale of new life insurance products through its career agent distribution channel.
The decrease of $7 million of interest expense on borrowings compared to the same period in 2025 was mainly due to the consolidation impact of certain investments in variable interest entities.
Income tax expense was $72 million for the three months ended June 30, 2026, resulting in an effective tax rate of 25.7%. This is compared to a $27 million tax expense and a 19.4% effective tax rate for the same period in 2025. For the three months ended June 30, 2026, the Company's effective rate was higher than the statutory rate of 21% primarily due to changes to our Bermuda deferred tax asset and tax credit project expenses charged to tax expense. For the three month period ended June 30, 2025, the Company's effective tax rate was not materially different from the statutory rate of 21%.
Income from discontinuing operations, net of tax was $0 million for the three months ended June 30, 2026 compared to $42 million for the same period in 2025. Income from discontinuing operations in the prior period was primarily attributable to unrealized gains on the equity securities portfolio coupled with net premiums in excess of policyholder benefits and claims incurred due to improved loss experience arising from underwriting actions implemented on the property casualty block of business which was disposed of during 2025 as discussed in Note 26 - Discontinued Operations.
Comparison of Six Months Ended June 30, 2026 vs. 2025
For the six months ended June 30, 2026, we reported a net income of $203 million, compared to a net loss of $(54) million for the same period in 2025. The change in net income (loss) is primarily driven by decreases in the expense associated with the change in fair value of market risk benefits and the expense associated with the change in fair value of insurance-related derivatives and embedded derivatives as a result of equity market and interest rate movements. Additionally, there was an increase in net investment income due to continued rotation into higher yielding investment strategies and a decrease in policyholder benefits and claims incurred, partially offset by a decrease in net premiums, due to lower PRT sales. Those impacts were partially offset by an increase in interest sensitive contract benefits due to an increase in index credits from changes in the equity market and an increase in amortization of DAC, DSI, and VOBA which are a result of continued growth of the annuity business.
Net premiums and other policy revenue of $639 million decreased by $494 million for the six months ended June 30, 2026, compared to the same period in 2025 primarily due to lower PRT sales as compared to the prior year period due to a smaller PRT market during 2026 and our pricing discipline related to expected return on this business.
Net investment income increased by $188 million for the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily driven by the increase in assets under management due to sustained growth of the business as well as continued rotation into higher yielding investment strategies.
The Company realized investment related gains of $29 million for the six months ended June 30, 2026, compared to losses of $8 million for the same period in 2025. The increase in investment gains of $37 million was primarily due to the change in unrealized gains/losses on equity securities during 2026 as well as realized gains on investments in certain limited partnerships and limited liability corporations.
Policyholder benefits and claims incurred decreased by $637 million for the six months ended June 30, 2026, compared to the same period in 2025. The decrease is primarily due to a reduction in PRT sales which resulted in lower reserve changes.
For the six months ended June 30, 2026, interest sensitive contract benefits increased by $310 million compared to the same period in 2025 primarily driven by an increase in the in-force block of annuity business due to continued growth of the business as well as higher index credits driven by the change in equity market activity.during the period.
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $59 million compared to the same period in 2025, primarily due to 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 $424 million for the six months ended June 30, 2026 compared to the same period of 2025. The decrease was primarily due to the impact of interest rates and equity market performance on the fair value of the embedded derivatives and equity-indexed options.
The decrease in the change in fair value of market risk benefit of $66 million for the six months ended June 30, 2026 compared to the same period of 2025 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities.
Operating expenses increased by $44 million for the six months ended June 30, 2026 compared to the same period in 2025, primarily driven by a one-time impairment of office property as well as non-recurring expenses related to the termination of the sale of new life insurance products through its career agent distribution channel in Q2 2026.
Interest expense on borrowings decreased by $2 million for the six months ended June 30, 2026 compared to the same period in 2025 primarily as a result of recurring repayments of the term loan during 2025 partially offset by increased borrowings with senior notes issued in June 2025 and junior subordinated notes entered into in August 2025.
Income tax expense was $89 million for the six months ended June 30, 2026, resulting in an effective tax rate of 29.7%. This is compared to a $(35) million tax benefit and a 23.0% effective tax rate for the same period in 2025. For the six months ended June 30, 2026, the Company's effective rate was higher than the statutory rate of 21% primarily due to changes to our Bermuda deferred tax asset and tax credit project expenses charged to tax expense. For the six month period ended June 30, 2025, the Company's effective tax rate was not materially different from the statutory rate of 21%.
Income from discontinuing operations, net of tax was $0 million for the six months ended June 30, 2026 compared to $68 million for the same period in 2025. Income from discontinuing operations in the prior period was primarily attributable to unrealized gains on the equity securities portfolio coupled with net premiums in excess of policyholder benefits and claims incurred due to improved loss experience arising from underwriting actions implemented on the property casualty block of business which was disposed of during 2025 as discussed in Note 26 - Discontinued Operations.
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 our reporting segment for the three and six months ended June 30, 2026 and 2025:
Three Months Ended
June 30, 		Six Months Ended
June 30,
2026 2025 2026 2025
(Dollars in millions)
Distributable Operating Earnings $ 291 $ 320 $ 597 $ 661
Comparison of Three Months Ended June 30, 2026 vs. 2025
DOE decreased by $29 million for the three months ended June 30, 2026 compared to the same period in 2025. The decrease is primarily attributable to an increase in the cost of funds due to higher option costs and crediting rates and a decrease in product charges as a result of lower surrender activity in 2026 partially offset by increased net investment income from our continued deployment into higher yielding investment strategies.
Comparison of Six Months Ended June 30, 2026 vs. 2025
DOE decreased by $64 million for the six months ended June 30, 2026 compared to the same period in 2025. The decrease is primarily attributable to an increase in cost of funds as a result of increased new business option costs and fixed interest. These changes were partially offset by increased investment income from our continued deployment into higher yielding investment strategies coupled with an increased asset base from annuity sales over the past twelve months.
Financial Condition
Comparison as of June 30, 2026 and December 31, 2025
The following table summarizes the financial position as of June 30, 2026 and December 31, 2025:
June 30, 2026 December 31, 2025
(Dollars in millions)
Assets
Investments $ 95,451 $ 90,516
Cash and cash equivalents 8,416 11,660
Accrued investment income 834 799
Deferred policy acquisition costs, deferred sales inducements and value of business acquired 11,665 11,513
Deferred tax asset 435 460
Reinsurance recoverables and deposit assets 8,831 9,255
Property and equipment 70 161
Intangible assets 1,480 1,501
Other assets 2,910 2,822
Goodwill 748 748
Separate account assets 874 822
Total assets $ 131,714 $ 130,257
Liabilities
Future policy benefits $ 10,879 $ 10,962
Policyholders' account balances 96,064 92,992
Policy and contract claims 298 410
Market risk benefits 4,751 4,536
Due to related parties 105 103
Other policyholder funds 355 353
Notes payable 206 205
Long term borrowings 2,957 2,951
Funds withheld for reinsurance liabilities 2,887 3,088
Other liabilities 3,669 4,166
Separate account liabilities 874 822
Total liabilities 123,045 120,588
Equity
Preferred stock, Series D 292 292
Additional paid-in capital 5,865 6,404
Accumulated other comprehensive income, net of taxes 433 1,094
Retained earnings 1,955 1,759
Non-controlling interests 124 120
Total equity 8,669 9,669
Total liabilities and equity $ 131,714 $ 130,257
June 30, 2026 vs. December 31, 2025
Total assets increased by $1.5 billion during the period to $131.7 billion. The increase is primarily driven by net annuity inflows which results in increased investment purchases as well as additional capitalization of deferred policy acquisition costs and deferred sales inducements due to continued strong annuity sales.
Total investments increased by $4.9 billion from December 31, 2025 to June 30, 2026. The increase is primarily driven by net annuity inflows and deployment of cash and cash equivalents into fixed maturity investments resulting in increased investment purchases, partially offset by the change in net unrealized investment losses.
Cash and cash equivalents decreased by $3.2 billion from December 31, 2025 to June 30, 2026. The decrease is primarily driven by the deployment of funds into our investments. We continue to maintain a strong liquidity position across our business. 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 $152 million primarily driven by deferrals associated with writing new business during the period.
Deferred tax assets decreased by $25 million from December 31, 2025 to June 30, 2026. The decrease is primarily due to changes in the deferred tax asset related to the Bermuda corporate income tax.
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 $424 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 $21 million during the year, primarily due to the amortization of intangible assets during the period.
Other assets increased by $88 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 investment transaction settlement timing and change in volume partially offset by a decrease in the current tax assets as a result of changes to net income (loss) before income taxes.
Separate account assets and liabilities both increased by $52 million during 2026, primarily due to net realized capital gains on investments during the period, partially offset by policyholder benefits and withdrawals.
Future policy benefits and policyholders' account balances increased by $3.0 billion during 2026 primarily driven by annuity sales during the period 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 $215 million during 2026 primarily due to the impact of changes in interest rates and equity markets.
Funds withheld for reinsurance liabilities decreased by $201 million during 2026 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 decreased by $497 million during 2026. The balance includes the reinsured market risk benefits liability, accrued interest on debt and other miscellaneous payables. The decrease during 2026 is primarily driven by a decrease in deferred tax liabilities as a result of changes in unrealized gains or losses and the timing and change in volume of investment transaction settlements.
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:
June 30, 2026 December 31, 2025
(Dollars in millions)
Cash and cash equivalents $ 8,416 $ 11,660
Liquid financial assets 43,047 42,041
Undrawn credit facilities 1,371 1,505
Total liquidity (1) $ 52,834 $ 55,206
(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 Ltd. revolving credit facility. As of June 30, 2026, the Company had no drawings and a total of $1.4 billion undrawn commitment available related to the FHLB program, and access to $500 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 June 30, 2026, the Company's total liquidity was $52.8 billion, which included $422 million of cash and cash equivalents held outside of the regulated insurance companies.
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table presents a summary of our cash flows and ending cash balances for the six months ended June 30, 2026 and 2025:
Six Months Ended
June 30,
2026 2025
(Dollars in millions)
Operating activities $ 1,390 $ 1,206
Investing activities (6,249) (3,138)
Financing activities 1,615 2,706
Cash and cash equivalents:
Cash and cash equivalents, beginning of period 11,660 11,330
Net change during the period (3,244) 774
Cash and cash equivalents, end of period 8,416 12,104
Less: Cash and cash equivalents of discontinued operations - 490
Cash and cash equivalents, end of period $ 8,416 $ 11,614
Operating Activities
For the six months ended June 30, 2026, we generated $1.4 billion of cash from operating activities compared to $1.2 billion during 2025, primarily due to an increase in net investment income due to continued rotation into higher yielding investment strategies, partially offset by an increase in operating expenses for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 as detailed above.
Investing Activities
For the six months ended June 30, 2026, cash outflows arose as we deployed cash and cash equivalents held as of December 31, 2025 to primarily available-for-sale fixed maturity securities and mortgage loans as we continued to rotate our investment portfolio into higher yielding investment strategies. This resulted in net deployment of $6.2 billion of cash from investing activities, compared to net deployment of $3.1 billion in the prior year.
Financing Activities
For the six months ended June 30, 2026, we recorded a net cash inflow of $1.6 billion from our financing activities, compared to net inflow of $2.7 billion recorded in 2025. The proceeds in the current year period were mainly a result of $1.7 billion net payments received on policyholders' account deposits partially offset by withdrawals on such accounts. Net cash inflows decreased from 2025 to 2026 due to both lower policyholders' account deposits and withdrawals in 2026.
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. 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 June 30, 2026, the Company and its subsidiaries, in aggregate, had outstanding investment commitments of $7.1 billion. The funded commitments are primarily recognized as mortgage loans, private loans, investment funds, investment real estate and other invested assets. For additional information, see Note 25 - Financial Commitments and Contingencies of 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 June 30, 2026
Long term borrowings $ 2,957 $ (43) $ 600 $ - $ - $ 600 $ - $ 1,800
As of December 31, 2025
Long term borrowings $ 2,951 $ (49) $ - $ 600 $ - $ 600 $ - $ 1,800
For additional information, See Note 19 - Long Term Borrowings of 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.
The Company's insurance subsidiaries 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 June 30, 2026 and December 31, 2025.
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. See "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 six months ended June 30, 2026 and 2025.
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 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. DOE 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 from continuing operations to DOE:
Three Months Ended
June 30, 		Six Months Ended
June 30,
2026 2025 2026 2025
(Dollars in millions)
Income (loss) from continuing operations (1)
$ 198 $ 99 $ 191 $ (163)
Mark-to-market losses (gains) on investments, including reinsurance funds withheld (2) 76 186 213 261
Mark-to-market losses (gains) on insurance contracts and other net assets (3)(4) (49) 36 113 618
Deferred income tax expense (recovery) relating to basis and other changes 9 (44) (42) (182)
Transaction costs
28 5 54 37
Depreciation and amortization expenses 29 38 68 90
DOE $ 291 $ 320 $ 597 $ 661
(1)Income (loss) from continuing operations is net income (loss) attributable to American National Group Inc. common stockholder less income from discontinuing operations, net of tax.
(2)"Mark-to-market losses (gains) on investments, including reinsurance funds withheld" primarily represent mark-to-market gains or losses on our investments and reinsurance funds withheld. 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.
(3)"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 17 - Policyholders' Account Balances; and (iii) Note 18 - Market Risk Benefits.
(4)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 Policies to 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 August 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 13, 2026 at 21:24 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]