Athene Holding Reports Second Quarter Results
Athene Holding Ltd announced financial results for the second quarter 2020.
“Our second quarter results demonstrate the resilience of Athene’s business and our ability to serve as a source of strength for our policyholders and business partners during periods of market disruption,” said Jim Belardi, CEO of Athene.
“We generated nearly $7 billion of organic deposits at exceptional returns, a quarterly record, with strength exhibited across all our channels during a period when others were forced to pull back. At the same time, we closed a large-scale block reinsurance transaction with Jackson National that added nearly $30 billion of growth to our balance sheet with predictable, persistent fixed annuity liabilities we know very well.
“Following this strong growth, Athene remains one of the best capitalized businesses in the industry, with $3 billion of excess equity capital and more than $7 billion of total deployable capital, which can be used for more than $85 billion of opportunistic growth.”
Mr. Belardi continued, “In the quarter, we generated strong normalized profitability in our core spread-based business. As we continue to invest our cash balances and redeploy the inherited Jackson portfolio, our earnings power and our capital base will continue to grow at attractive rates.”
Second Quarter 2020 Financial Results
The company said, “Net income available to AHL common shareholders for the second quarter 2020 was $824 million, or $4.19 per diluted Class A common share ["diluted share"], compared to $720 million, or $3.75 per diluted share for the second quarter 2019. The increase from the prior year quarter was driven by higher adjusted operating income and favorable changes in the fair value of reinsurance assets due to tightening credit spreads, partially offset by a net decrease in the fair value of fixed indexed annuity ["FIA"] derivatives due to a lower discount rate resulting from declining interest rates.
“Adjusted operating income available to common shareholders for the second quarter 2020 was $490 million, or $2.49 per adjusted operating common share, compared to $370 million, or $1.95 per adjusted operating common share for the second quarter 2019. The increase from the prior year quarter was primarily driven by an increase in the fair value of the Apollo Operating Group ["AOG"] investment which was not held in the prior year quarter.
“Adjusted operating income available to common shareholders excluding notables and AOG for the second quarter 2020 was $98 million, or $0.58 per adjusted operating common share, compared to $370 million, or $1.95 per adjusted operating common share for the second quarter 2019. The decrease from the prior year quarter was primarily driven by a net investment loss from alternatives, more than half of which are valued on a lagged basis and were impacted by significant capital markets depreciation in the first quarter of 2020 being reflected in the current period.
Continued Strong Capital Position
- “Book value per common share of $75.87 for the period ended June 30, 2020, an increase of 14% year-over-year. Adjusted book value per common share of $51.15, an increase of 3% year-over-year
- “Total deployable capital of $7.3 billion, including excess equity capital of $3.0 billion, $2.5 billion of untapped debt capacity2, and $1.8 billion of undrawn third-party commitments to ACRA
- “Total cash and cash equivalents of $6.2 billion, and a liquid bond portfolio of approximately $36 billion3
- “Available liquidity of $8.5 billion4 as of June 30, 2020, including $2.25 billion undrawn credit facilities
- “ALRe RBC of 449%5 and U.S. RBC of 430% as of June 30, 2020.”
