In light of the uncertainty overhanging the U.S. and worldwide capital
markets, American Equity Investment Life Holding Company (NYSE:AEL) is
announcing third quarter 2008 sales and certain other information prior
to its release of third quarter 2008 earnings which will occur after the
close of market on Wednesday, November 5, 2008. The third quarter
earnings release and financial supplement will be posted on the American
Equity website (www.american-equity.com)
at that time.
AEL’s annuity sales in the third quarter of
2008 totaled $571.8 million, bringing year-to-date sales to $1.7 billion
for the first nine months of 2008, compared to $1.6 billion for the same
period in 2007, an increase of 6%. As a part of its Producer Forum
program involving a series of 2-day home office meetings with AEL sales
agents, the company has held 24 meetings during 2008 involving nearly
500 agents from all over the United States. Many of these agents are top
selling agents of at least $1 million in annual sales and as such are “Gold
Eagle” members entitled to participate in the
Company’s agent’s
stock option plan and other special incentives. The Producer Forums are
one of the ways the company communicates with its field force about
significant issues including the current national financial crisis as
well as Securities and Exchange Commission (“SEC”)
Proposed Rule 151A.
Concerning the costs of hedging the annual index credits on AEL’s
index annuity business, the average cost of options AEL purchased during
the third quarter of 2008 remained below 3.20% despite the spike up in
the CBOE Volatility Index (“VIX”)
during the last two weeks of September. In contrast, such options costs
averaged above 3.50% for the same period in 2007. As a result the
company has taken no action to reduce applicable participation and cap
rates on its index annuities during 2008, and in fact increased certain
rates in June 2008. AEL will continue to closely monitor the VIX and
options costs to determine whether such a rate cut should be implemented
in order to maintain the cost of money on index annuities within the
company’s budget.
Concerning its common stock repurchase program, AEL suspended purchases
of its common stock on August 4, 2008. Under this program, which was
initiated in November 2007, AEL has purchased 3.4 million shares at an
average cost of $8.57 per share. The Company does not presently
anticipate making additional purchases under this program before it
expires in November 2008.
Concerning SEC Proposed Rule 151A (which would require registration of
most index annuity products and securities licensing of sales agents),
the comment period for the Proposed Rule expired September 10, 2008. As
of that date, approximately 2,400 comments had been sent to the SEC of
which approximately 90% were in opposition to the Rule. The SEC has
continued to accept and post comments received after the deadline. On
September 23, 2008 AEL co-hosted a Congressional fly-in in Washington
D.C. in which the Coalition for Indexed Products (a Coalition of nine
companies co-chaired by AEL and Old Mutual) and a group of national
marketing organizations representing the Coalition companies met with
nearly 80 members of Congress in an all-day event. The purpose of the
meetings was to urge the members to contact the SEC with their concerns
that the Proposed Rule is unnecessary since index annuity sales are
already heavily regulated by state insurance departments and would
restrict consumer choice at a time when access to principal-protected
products like fixed index annuities should be carefully guarded.
EARNINGS CONFERENCE CALL
AEL will hold a conference call to discuss third quarter 2008 earnings
on Thursday, November 6, 2008, at 10 a.m. CST. The conference call will
be webcast live on the Internet. Investors and interested parties who
wish to listen to the call on the Internet may do so at www.american-equity.com.
The call may also be accessed by telephone at 1-866-713-8307, passcode
22461740 (international callers, please dial 1-617-597-5307). An audio
replay will be available shortly after the call on AEL’s
website. An audio replay will also be available via telephone through
November 27, 2008, by calling 1-888-286-8010, passcode 27418323
(international callers will need to dial 1-617-801-6888).
ABOUT AMERICAN EQUITY
American Equity Investment Life Holding Company, through its
wholly-owned operating subsidiaries, is a full-service underwriter of a
broad line of annuity and insurance products with a primary emphasis on
the sale of fixed-rate and index annuities. The company’s
headquarters are located at 5000 Westown Parkway, West Des Moines, Iowa,
50266. The mailing address of the company is: P.O. Box 71216, Des
Moines, Iowa, 50325. For more information, visit our website www.american-equity.com.
American Equity Investment Life Holding Company
Debra J.
Richardson, 515-273-3551
Sr. Vice President
drichardson@american-equity.com
John
M. Matovina, 515-457-1813
Vice Chairman
jmatovina@american-equity.com
D.
J. Noble, 515-457-1705
Chairman
dnoble@american-equity.com
Julie
L. LaFollette, 515-273-3602
Investor Relations
jlafollette@american-equity.com
