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American Equity (AEL) Q4 Earnings Lag Estimates, Revenues Top

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American Equity Investment Life Holding Company (AEL - Free Report) reported fourth-quarter 2021 adjusted net earnings of $1.04 per share, which missed the Zacks Consensus Estimate by 0.9%. The bottom line increased 35.1% on a year-over-year basis.

American Equity witnessed higher premiums and lower expenses, partially offset by lower revenues during the quarter.

Operational Update

Total operating revenues were $515 million, down 1.3% year over year. The top line beat the Zacks Consensus Estimate by 1.8%.

Premiums and other considerations increased 41.6% year over year to $14.5 million. Annuity product charges decreased 8.6% to $60.3 million while net investment income declined 1.4% to $514.6 million, all on a year-over-year basis.

Sales in the reported quarter were $1,045 million, reflecting a significant shift in mix to 94% focus fixed index annuities (FIA), while representing a total sales decrease of 43% from the prior-year quarter.

Total benefits and expenses were $994.9 million, down 2.4% year over year.
The investment spread was 2.29%, up from 2.25% in the year-ago quarter.

Policyholder funds under management of $53.2 billion at quarter-end was up 0.5% from third-quarter end.

Full-Year Highlights

Adjusted net earnings of $3.07 per share missed the Zacks Consensus Estimate of $3.31 per share. The bottom line surged four-fold year over year.

Operating total revenues were $2.3 billion, down 5.4% year over year. The top line beat the Zacks Consensus Estimate of $2 billion.

Financial Update

Cash and cash equivalents was $4.5 billion as of Dec 31, 2021, down 50.4% from 2020 end. Total investments were about $60.4 billion, up 12.6% from 2020 end.

Notes payable totaled $496.2 million, up 0.1% from 2020 end.

Book value per common share excluding AOCI was $40.80, up 13.4% from 2020 end.

Total debt/total capitalization was 11.4% at 2021 end, improving 80 basis points.

Operating return on equity excluding average AOCI was 10.1%.

Zacks Rank

American Equity currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Of the life insurance industry players that have reported fourth-quarter results so far, Voya Financial, Inc. (VOYA - Free Report) beat the Zacks Consensus Estimate for earnings while Lincoln National Corporation (LNC - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) missed expectations.

Voya Financial reported fourth-quarter 2021 adjusted operating earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate by 28.4%. The bottom line remained flat year over year. Total revenues amounted to $1.7 billion, which declined 19.2% year over year in the fourth quarter.

As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $739 billion.

Lincoln National’s fourth-quarter 2021 adjusted earnings of $1.56 per share missed the Zacks Consensus Estimate of $1.98 and declined from the prior-year figure of $1.78 per share. Adjusted operating revenues increased 2.4% year over year to $4.8 billion and beat the consensus mark of $4.7 billion.

Even though the ongoing pandemic is likely to continue hurting results, Lincoln National is expected to witness rising earnings per share on the back of its Spark Initiative.

Reinsurance Group reported fourth-quarter 2021 adjusted operating loss of 56 cents per share against the Zacks Consensus Estimate of earnings of 83 cents per share. RGA had reported an operating income of $1.19 per share in the prior-year quarter. Higher COVID-19 mortality claims weighed on the performance. Operating revenues of $4.3 billion increased 5.8% year over year.

Reinsurance Group’s top line beat the Zacks Consensus Estimate by 2.1%.
RGA’s net premiums of $3.4 billion rose 4.5% year over year. Investment income increased 18%, reflecting a 5% higher average asset balance and strong variable investment income. Average investment yield increased 50 bps to 4.7% primarily due to higher variable investment income.