8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2020

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

(Exact name of registrant as specified in its charter)

Iowa	001-31911	42-1447959
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6000 Westown Parkway

West Des Moines, IA 50266

(Address of principal executive offices and zip code)

(515) 221-0002

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $1	AEL	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 5.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series A	AELPRA	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 6.625% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series B	AELPRB	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933

(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02  Results of Operations and Financial Condition

On August 5, 2020, the registrant issued a press release announcing its financial results for the quarter ended June 30, 2020, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference. The registrant's financial supplement for the quarter ended June 30, 2020, is attached as Exhibit 99.2 and is incorporated herein by reference.

The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01.  Financial Statements and Exhibits

(d)    Exhibits

The following exhibits are being furnished with this Form 8-K.

Exhibit Number	Description
99.1	Press release dated August 5, 2020, announcing American Equity Investment Life Holding Company's financial results for the quarter ended June 30, 2020.
99.2	American Equity Investment Life Holding Company's Financial Supplement for the quarter ended June 30, 2020.
104	The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 5, 2020

AMERICAN EQUITY
INVESTMENT LIFE HOLDING COMPANY
By:	/s/ Anant Bhalla
	Anant Bhalla
	Chief Executive Officer and President

EX-99.1

Exhibit 99.1

	For more information, contact:
	Steven D. Schwartz, Vice President-Investor Relations
	(515) 273-3763, sschwartz@american-equity.com
FOR IMMEDIATE RELEASE
August 5, 2020

American Equity Reports Second Quarter2020 Results

Company Highlights

• Second quarter2020 net loss available to common stockholders of $253.4 million or $(2.76) per diluted common share driven primarily by the tightening of American Equity's own credit spread with improving market conditions; thereby reducing the discount rate used for policyholder liabilities

• Second quarter2020 non-GAAP operating income¹ available to common stockholders of $93.1 million or $1.01 per diluted common share

• Second quarter2020 annuity sales of $559 million

• Policyholder funds under management of $53.1 billion

• Second quarter2020 investment spread of 2.39%

• Estimated risk-based capital ratio of 389% excluding $290 million of cash proceeds at the holding company from the issuance of $300 million of perpetual preferred stock in June

WEST DES MOINES, Iowa (August 5, 2020) - American Equity Investment Life Holding Company (NYSE: AEL), a leading issuer of fixed index annuities (FIAs) today reported second quarter2020 net loss available to common stockholders of $253.4 million, or $(2.76) per diluted common share, compared to net income available to common stockholders of $18.6 million, or $0.20 per diluted common share, for second quarter2019.         

Non-GAAP operating income¹ available to common stockholders for the second quarter2020 was $93.1 million, or $1.01per diluted common share, compared to non-GAAP operating income¹ available to common stockholders of $99.6 million, or $1.09 per diluted common share, for second quarter2019. On a trailing twelve-month basis, non-GAAP operating return¹ on average common stockholders' equity excluding average AOCI¹ was 23.8% based on reported results and 19.4% excluding the impact of annual actuarial revisions in the third quarter of 2019. The year-over-year decreases in quarterly non-GAAP operating income¹ available to common stockholders and non-GAAP operating income¹ per share available to common stockholders were attributable to lower investment spread income and a greater increase in the liability for future benefits to be paid for lifetime income benefit riders, partially offset by a decline in deferred acquisition cost and deferred sales inducement amortization. While the amortization of deferred acquisition costs and deferred sales inducements was consistent with the actuarial revisions made in the third quarter of 2019, the increase in the liability for lifetime income benefit riders was higher, primarily due to the relatively low level

of index credits, renewal rate management activity, and somewhat higher lifetime income benefit rider utilization - reflecting the original quarterly sales patterns in certain cohorts.

INVESTMENT SPREAD DECREASES SEQUENTIALLY ON LOWER YIELD ON INVESTED ASSETS

American Equity’s investment spread was 2.39% for the second quarter of 2020 compared to 2.64% for the first quarter of 2020 and 2.63% for the second quarter of 2019. On a sequential basis, the average yield on invested assets decreased by 24 basis points while the cost of money increased by 1 basis point.

Average yield on invested assets was 4.12% in the second quarter of 2020 compared to 4.36% in the first quarter of 2020. The decrease in investment yield was primarily driven by the decline in short term yields on floating rate instruments in the investment portfolio, retention of a higher level of liquidity in the investment portfolios of the life insurance companies, mark to market losses on investment partnerships, and lower prepayment and bond fee income. The average yield on invested assets excluding non-trendable items was 4.17% in the second quarter of 2020 compared to 4.30% in the first quarter of 2020. In our analysis of trendable yield this quarter, we have excluded the reduction in effective yield resulting from the mark to market investment partnership losses in addition to prepayment income.

The aggregate cost of money for annuity liabilities of 1.73% in the second quarter of 2020 was up 1 basis point from 1.72% in the first quarter of 2020. The cost of money in the second quarter was negatively affected by 1 basis point of hedging loss driven by minimal over-hedging gains and the 2 basis point cost of an index credit macro-hedge compared to 5 basis points of gains from the over-hedging of index-linked credits in the first quarter.

POLICYHOLDER FUNDS UNDER MANAGEMENT RELATIVELY FLAT ON $559 MILLION OF SALES

Policyholder funds under management at June 30, 2020 were $53.1 billion, a $203 million, or 0.4% decrease from March 31, 2020. Second quarter gross and net sales were $559 million and $553 million, respectively, representing decreases of 63% and 61% from second quarter2019 sales. On a sequential basis, gross and net sales decreased 21% and 20%, respectively. Compared to the first quarter of 2020, gross sales atAmerican Equity Life and Eagle Life declined 18% and 34%, respectively.

Commenting on sales, Anant Bhalla, Chief Executive Officer, said: "Given the prudence of limiting face to face meetings and increased social distancing to limit the spread of COVID-19, sales pipelines for us and for our industry have slowed. We are using this time of slower new business activity to identify where we need to retool and modernize our company and to embark on the reinvigoration of our strategic focus to dominate the retail annuity businesses in which we participate. As a first step in this direction, in late June, American Equity Life launched the Destinations 9 & 10 fixed index annuity, which includes the Destinations index we co-developed and co-branded with Bank of America, to the independent agent channel. This is a rules-based, multi-asset sector index strategy that combines three well established, transparent assets - low volatility S&P500 equities, 10-year US treasury bonds and gold using two time-tested investment principles - risk parity and momentum. While sales activity may remain subdued until the COVID-19 situation improves or new ways of engaging in new business activity emerge, we believe this and other product refresh plans over the coming few months will lay the groundwork for sustained sales success in 2021."

Commenting further, Bhalla said: "During the quarter, we implemented a decision to move entirely to an employee wholesaler model at Eagle Life for both the bank and broker-dealer channels. With some new talent hires made and more expected over the coming few months, we expect 2021 to be the first year of meaningful sales growth at Eagle Life and pave the way for it to be as impactful for us in the future as is the independent agent channel today."

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future operations, strategies, financial results or other developments, and are subject to assumptions, risks and uncertainties. Statements such as “guidance”, “expect”, “anticipate”, “believe”, “goal”, “objective”, “target”, “may”, “should”, “estimate”, “projects” or similar words as well as specific projections of future results qualify as forward-looking statements. Factors that may cause our actual results to differ materially from those contemplated by these forward looking statements can be found in the company’s Form 10-K filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statement was made and the company undertakes no obligation to update such forward-looking statements. There can be no assurance that other factors not currently anticipated by the company will not materially and adversely affect our results of operations. Investors are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf.

CONFERENCE CALL

American Equity will hold a conference call to discuss second quarter2020 earnings on Thursday, August 6, 2020 at 10:00 a.m. CT. 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 855-865-0606, passcode 1372736 (international callers, please dial 704-859-4382). An audio replay will be available shortly after the call on American Equity's website. An audio replay will also be available via telephone through August 13, 2020 at 855-859-2056, passcode 1372736 (international callers will need to dial 404-537-3406).

ABOUT AMERICAN EQUITY

American Equity Investment Life Holding Company, through its wholly-owned subsidiaries, is a leading issuer of fixed index annuities through independent agents, banks and broker-dealers. American Equity Investment Life Holding Company, a New York Stock Exchange listed company (NYSE: AEL), is headquartered in West Des Moines, Iowa. For more information, please visit www.american-equity.com.

1    Use of non-GAAP financial measures is discussed in this release in the tables that follow the text of the release.

###

American Equity Investment Life Holding Company

Unaudited (Dollars in thousands, except per share data)

Consolidated Statements of Operations

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2020			2019			2020			2019
Revenues:
Premiums and other considerations	$	11,032		$	4,126		$	18,696		$	9,536
Annuity product charges	63,438			60,700			122,987			113,666
Net investment income	543,704			570,568			1,117,022			1,129,006
Change in fair value of derivatives	327,662			76,045			(614,212		)	460,514
Net realized gains (losses) on investments	(25,888		)	(3,832		)	(46,224		)	(4,395		)
Other than temporary impairment (OTTI) losses on investments:
Total OTTI losses	—			(998		)	—			(998		)
Portion of OTTI losses recognized from other comprehensive income	—			(215		)	—			(215		)
Net OTTI losses recognized in operations	—			(1,213		)	—			(1,213		)
Loss on extinguishment of debt	—			—			(2,024		)	—
Total revenues	919,948			706,394			596,245			1,707,114
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	13,331			6,939			23,403			16,238
Interest sensitive and index product benefits	240,992			251,103			641,211			387,777
Amortization of deferred sales inducements	(75,178		)	19,785			(1,587		)	53,094
Change in fair value of embedded derivatives	1,126,935			327,562			(123,126		)	1,093,885
Interest expense on notes payable	6,388			6,380			12,773			12,759
Interest expense on subordinated debentures	1,321			4,057			2,909			8,145
Amortization of deferred policy acquisition costs	(119,889		)	29,946			813			75,078
Other operating costs and expenses	41,951			37,426			85,577			76,405
Total benefits and expenses	1,235,851			683,198			641,973			1,723,381
Income (loss) before income taxes	(315,903		)	23,196			(45,728		)	(16,267		)
Income tax expense (benefit)	(68,474		)	4,606			(41,246		)	(4,847		)
Net income (loss)	(247,429		)	18,590			(4,482		)	(11,420		)
Less: Preferred stock dividends	5,950			—			12,561			—
Net income (loss) available to common stockholders	$	(253,379	)	$	18,590		$	(17,043	)	$	(11,420	)
Earnings (loss) per common share	$	(2.76	)	$	0.20		$	(0.19	)	$	(0.13	)
Earnings (loss) per common share - assuming dilution	$	(2.76	)	$	0.20		$	(0.19	)	$	(0.13	)
Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	91,803			91,103			91,724			90,994
Earnings (loss) per common share - assuming dilution	92,027			91,785			92,024			91,765

Page 1

American Equity Investment Life Holding Company

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

In addition to net income (loss) available to common stockholders, we have consistently utilized non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance. Non-GAAP operating income available to common stockholders equals net income (loss) available to common stockholders adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations, and we believe measures excluding their impact are useful in analyzing operating trends. The most significant adjustments to arrive at non-GAAP operating income available to common stockholders eliminate the impact of fair value accounting for our fixed index annuity business. These adjustments are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of non-GAAP operating income available to common stockholders together with net income (loss) available to common stockholders provides information that may enhance an investor’s understanding of our underlying results and profitability.

Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income Available to Common Stockholders

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2020			2019			2020			2019
Net income (loss) available to common stockholders	$	(253,379	)	$	18,590		$	(17,043	)	$	(11,420	)
Adjustments to arrive at non-GAAP operating income available to common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses	18,492			2,625			34,841			2,930
Change in fair value of derivatives and embedded derivatives - fixed index annuities	423,590			99,868			303,136			250,812
Change in fair value of derivatives - interest rate caps and swap	—			854			(848		)	1,490
Income taxes	(95,599		)	(22,346		)	(72,897		)	(54,819		)
Non-GAAP operating income available to common stockholders	$	93,104		$	99,591		$	247,189		$	188,993
Per common share - assuming dilution:
Net income (loss) available to common stockholders	$	(2.76	)	$	0.20		$	(0.19	)	$	(0.13	)
Adjustments to arrive at non-GAAP operating income available to common stockholders:
Anti-dilutive effect of net loss	0.01			—			—			0.01
Net realized gains/losses on financial assets, including credit losses	0.20			0.03			0.38			0.03
Change in fair value of derivatives and embedded derivatives - fixed index annuities	4.60			1.09			3.30			2.73
Change in fair value of derivatives - interest rate caps and swap	—			0.01			(0.01		)	0.02
Income taxes	(1.04		)	(0.24		)	(0.79		)	(0.60		)
Non-GAAP operating income available to common stockholders	$	1.01		$	1.09		$	2.69		$	2.06

(a) Adjustments to net income (loss) available to common stockholders to arrive at non-GAAP operating income available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs where applicable.

Page 2

American Equity Investment Life Holding Company

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Average Common Stockholders' Equity and Return on Average Common Stockholders' Equity

Return on average common stockholders' equity measures how efficiently we generate profits from the resources provided by our net assets.  Return on average common stockholders' equity and non-GAAP operating return on average common stockholders' equity are calculated by dividing net income (loss) available to common stockholders and non-GAAP operating income available to common stockholders, respectively, for the trailing twelve months by average total stockholders' equity excluding average equity available to preferred stockholders and average accumulated other comprehensive income (AOCI).  We exclude AOCI because AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments.

	Twelve Months Ended
	June 30, 2020
Average Common Stockholders' Equity Excluding Average AOCI
Average total stockholders' equity	$	4,279,767
Average equity available to preferred stockholders	(350,000		)
Average AOCI	(1,384,912		)
Average common stockholders' equity excluding average AOCI	$	2,544,855
Net income available to common stockholders	$	240,467
Non-GAAP operating income available to common stockholders	$	606,379
Return on Average Common Stockholders' Equity Excluding Average AOCI
Net income available to common stockholders	9.45		%
Non-GAAP operating income available to common stockholders	23.83		%

Page 3

EX-99.2

Exhibit 99.2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement

June 30, 2020

A.	Financial Highlights
	Condensed Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Quarterly Summary - Most Recent 5 Quarters	3
	Non-GAAP Financial Measures
	Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income Available to Common Stockholders	4
	Summary of Adjustments to Arrive at Non-GAAP Operating Income Available to Common Stockholders	5
	Quarterly Summary - Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income Available to Common Stockholders	6
	Quarterly Summary - Summary of Adjustments to Arrive at Non-GAAP Operating Income Available to Common Stockholders	7
	Capitalization/Book Value per Common Share	8
	Spread Results	9
B.	Product Summary
	Summary of Cost of Money for Deferred Annuities	9
	Annuity Account Balance Rollforward	9
	Annuity Deposits by Product Type	10
	Surrender Charge Protection and Account Values by Product Type	10
	Annuity Liability Characteristics	11
C.	Investment Summary
	Summary of Invested Assets	14
	Credit Quality of Fixed Maturity Securities	15
	Watch List Securities	15
	Fixed Maturity Securities by Sector	16
	Mortgage Loans on Real Estate	17
D.	Shareholder Information	18
E.	Research Analyst Coverage	19

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2020		December 31, 2019
Assets
Investments:
Fixed maturity securities, available for sale, at fair value	$	50,738,792	$	51,580,490
Mortgage loans on real estate	3,958,233		3,448,793
Derivative instruments	672,958		1,355,989
Other investments	479,099		492,301
Total investments	55,849,082		56,877,573
Cash and cash equivalents	2,408,635		2,293,392
Coinsurance deposits	4,962,859		5,115,013
Accrued investment income	450,290		472,826
Deferred policy acquisition costs	2,920,793		2,923,454
Deferred sales inducements	1,937,083		1,966,723
Income taxes recoverable	35,962		—
Other assets	43,592		47,571
Total assets	$	68,608,296	$	69,696,552
Liabilities and Stockholders' Equity
Liabilities:
Policy benefit reserves	$	61,669,232	$	61,893,945
Other policy funds and contract claims	244,186		256,105
Notes payable	495,388		495,116
Subordinated debentures	77,964		157,265
Deferred income taxes	229,757		177,897
Income taxes payable	—		429
Other liabilities	829,710		2,145,676
Total liabilities	63,546,237		65,126,433
Stockholders' equity:
Preferred stock, Series A	16		16
Preferred stock, Series B	12		—
Common stock	91,595		91,107
Additional paid-in capital	1,508,171		1,212,311
Accumulated other comprehensive income	1,719,839		1,497,921
Retained earnings	1,742,426		1,768,764
Total stockholders' equity	5,062,059		4,570,119
Total liabilities and stockholders' equity	$	68,608,296	$	69,696,552

Page 1

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except per share data)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2020			2019			2020			2019
Revenues:
Premiums and other considerations	$	11,032		$	4,126		$	18,696		$	9,536
Annuity product charges	63,438			60,700			122,987			113,666
Net investment income	543,704			570,568			1,117,022			1,129,006
Change in fair value of derivatives	327,662			76,045			(614,212		)	460,514
Net realized gains (losses) on investments	(25,888		)	(3,832		)	(46,224		)	(4,395		)
Other than temporary impairment (OTTI) losses on investments:
Total OTTI losses	—			(998		)	—			(998		)
Portion of OTTI losses recognized from other comprehensive income	—			(215		)	—			(215		)
Net OTTI losses recognized in operations	—			(1,213		)	—			(1,213		)
Loss on extinguishment of debt	—			—			(2,024		)	—
Total revenues	919,948			706,394			596,245			1,707,114
Benefits and expenses:
Insurance policy benefits and change in future policy benefits	13,331			6,939			23,403			16,238
Interest sensitive and index product benefits	240,992			251,103			641,211			387,777
Amortization of deferred sales inducements	(75,178		)	19,785			(1,587		)	53,094
Change in fair value of embedded derivatives	1,126,935			327,562			(123,126		)	1,093,885
Interest expense on notes payable	6,388			6,380			12,773			12,759
Interest expense on subordinated debentures	1,321			4,057			2,909			8,145
Amortization of deferred policy acquisition costs	(119,889		)	29,946			813			75,078
Other operating costs and expenses	41,951			37,426			85,577			76,405
Total benefits and expenses	1,235,851			683,198			641,973			1,723,381
Income (loss) before income taxes	(315,903		)	23,196			(45,728		)	(16,267		)
Income tax expense (benefit)	(68,474		)	4,606			(41,246		)	(4,847		)
Net income (loss)	(247,429		)	18,590			(4,482		)	(11,420		)
Less: Preferred stock dividends	5,950			—			12,561			—
Net income (loss) available to common stockholders	$	(253,379	)	$	18,590		$	(17,043	)	$	(11,420	)
Earnings (loss) per common share	$	(2.76	)	$	0.20		$	(0.19	)	$	(0.13	)
Earnings (loss) per common share - assuming dilution	$	(2.76	)	$	0.20		$	(0.19	)	$	(0.13	)
Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share	91,803			91,103			91,724			90,994
Earnings (loss) per common share - assuming dilution	92,027			91,785			92,024			91,765

Page 2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except per share data)

Quarterly Summary - Most Recent 5 Quarters

	Q2 2020			Q1 2020			Q4 2019			Q3 2019			Q2 2019
Revenues:
Traditional life insurance premiums	$	722		$	823		$	762		$	778		$	799
Life contingent immediate annuity considerations	10,310			6,841			8,084			4,374			3,327
Surrender charges	19,390			19,705			15,092			20,537			19,480
Lifetime income benefit rider fees	44,048			39,844			47,630			43,110			41,220
Net investment income	543,704			573,318			588,217			590,412			570,568
Change in fair value of derivatives	327,662			(941,874		)	466,434			(20,042		)	76,045
Net realized gains (losses) on investments	(25,888		)	(20,336		)	7,029			4,328			(3,832		)
Net OTTI losses recognized in operations	—			—			(17,412		)	(101		)	(1,213		)
Loss on extinguishment of debt	—			(2,024		)	(2,001		)	—			—
Total revenues	919,948			(323,703		)	1,113,835			643,396			706,394
Benefits and expenses:
Traditional life insurance policy benefits and change in future policy benefits	702			621			835			758			576
Life contingent immediate annuity benefits and change in future policy benefits	12,629			9,451			10,718			6,869			6,363
Interest sensitive and index product benefits (a)	240,992			400,219			399,514			500,285			251,103
Amortization of deferred sales inducements (b)(c)	(75,178		)	73,591			91,260			(55,769		)	19,785
Change in fair value of embedded derivatives (b)(d)	1,126,935			(1,250,061		)	147,879			212,278			327,562
Interest expense on notes payable	6,388			6,385			6,384			6,382			6,380
Interest expense on subordinated debentures	1,321			1,588			3,651			3,968			4,057
Amortization of deferred policy acquisition costs (b)(c)	(119,889		)	120,702			133,573			(120,934		)	29,946
Other operating costs and expenses	41,951			43,626			39,194			38,554			37,426
Total benefits and expenses	1,235,851			(593,878		)	833,008			592,391			683,198
Income (loss) before income taxes	(315,903		)	270,175			280,827			51,005			23,196
Income tax expense (benefit) (e)	(68,474		)	27,228			60,677			13,645			4,606
Net income (loss) (a)(b)(c)(d)(e)	(247,429		)	242,947			220,150			37,360			18,590
Less: Preferred stock dividends	5,950			6,611			—			—			—
Net income (loss) available to common stockholders (a)(b)(c)(d)(e)	$	(253,379	)	$	236,336		$	220,150		$	37,360		$	18,590
Earnings (loss) per common share	$	(2.76	)	$	2.58		$	2.41		$	0.41		$	0.20
Earnings (loss) per common share - assuming dilution (a)(b)(c)(d)(e)	$	(2.76	)	$	2.57		$	2.40		$	0.41		$	0.20
Weighted average common shares outstanding (thousands):
Earnings (loss) per common share	91,803			91,644			91,314			91,252			91,103
Earnings (loss) per common share - assuming dilution	92,027			92,021			91,883			91,711			91,785

(a) Q3 2019 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index product benefits by $315.4 million and decreased both net income and net income available to common stockholders by $247.3 million and decreased earnings per common share - assuming dilution by $2.70 per share.

(b) Q2 2020 includes a benefit from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact decreased change in fair value of embedded derivatives by $230.1 million, increased amortization of deferred sales inducements and deferred policy acquisition costs by $36.7 million and $57.6 million, respectively, and decreased both net loss and net loss available to common stockholders by $106.5 million and reduced loss per common share - assuming dilution by $1.16 per share.

(c) Q3 2019 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $104.7 million and $193.0 million, respectively, and increased both net income and net income available to common stockholders by $233.4 million and increased earnings per common share - assuming dilution by $2.54 per share.

(d) Q3 2019 includes expense from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact increased change in fair value of embedded derivatives by $28.2 million and decreased both net income and net income available to common stockholders by $22.1 million and decreased earnings per common share - assuming dilution by $0.24 per share.

(e) Q1 2020 includes a tax benefit related to the provision of the Coronavirus Aid, Relief, and Economic Security Act, (“the CARES ACT”)  which was signed into legislation on March 27, 2020 and allows net operating losses for 2018 through 2020 to be carried back to previous tax years in which a 35% statutory tax rate was in effect. The impact reduced income tax expense and increased both net income and net income available to common stockholders by $30.8 million and increased earnings per common share - assuming dilution by $0.33 per share.

Page 3

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

In addition to net income (loss) available to common stockholders, we have consistently utilized non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance. Non-GAAP operating income available to common stockholders equals net income (loss) available to common stockholders adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations, and we believe measures excluding their impact are useful in analyzing operating trends. The most significant adjustments to arrive at non-GAAP operating income available to common stockholders eliminate the impact of fair value accounting for our fixed index annuity business. These adjustments are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of non-GAAP operating income available to common stockholders together with net income (loss) available to common stockholders provides information that may enhance an investor’s understanding of our underlying results and profitability.

Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income Available to Common Stockholders

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2020			2019			2020			2019
Net income (loss) available to common stockholders	$	(253,379	)	$	18,590		$	(17,043	)	$	(11,420	)
Adjustments to arrive at non-GAAP operating income available to common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses	18,492			2,625			34,841			2,930
Change in fair value of derivatives and embedded derivatives - fixed index annuities	423,590			99,868			303,136			250,812
Change in fair value of derivatives - interest rate caps and swap	—			854			(848		)	1,490
Income taxes	(95,599		)	(22,346		)	(72,897		)	(54,819		)
Non-GAAP operating income available to common stockholders	$	93,104		$	99,591		$	247,189		$	188,993
Per common share - assuming dilution:
Net income (loss) available to common stockholders	$	(2.76	)	$	0.20		$	(0.19	)	$	(0.13	)
Adjustments to arrive at non-GAAP operating income available to common stockholders:
Anti-dilutive effect of net loss	0.01			—			—			0.01
Net realized gains/losses on financial assets, including credit losses	0.20			0.03			0.38			0.03
Change in fair value of derivatives and embedded derivatives - fixed index annuities	4.60			1.09			3.30			2.73
Change in fair value of derivatives - interest rate caps and swap	—			0.01			(0.01		)	0.02
Income taxes	(1.04		)	(0.24		)	(0.79		)	(0.60		)
Non-GAAP operating income available to common stockholders	$	1.01		$	1.09		$	2.69		$	2.06

(a) Adjustments to net income (loss) available to common stockholders to arrive at non-GAAP operating income available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income Available to Common Stockholders

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2020			2019			2020			2019
Net realized gains/losses on financial assets, including credit losses:
Net realized gains/losses on financial assets, including credit losses	$	25,276		$	5,045		$	46,933		$	5,608
Amortization of DAC and DSI	(6,784		)	(2,420		)	(12,092		)	(2,678		)
Income taxes	(3,995		)	(567		)	(7,526		)	(633		)
	$	14,497		$	2,058		$	27,315		$	2,297
Change in fair value of derivatives and embedded derivatives:
Fixed index annuities	$	713,446		$	218,046		$	503,555		$	459,166
Interest rate caps and swap	—			854			(848		)	1,490
Amortization of DAC and DSI	(289,856		)	(118,178		)	(200,419		)	(208,354		)
Income taxes	(91,604		)	(21,779		)	(65,371		)	(54,186		)
	$	331,986		$	78,943		$	236,917		$	198,116

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

Quarterly Summary - Most Recent 5 Quarters

Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income Available to Common Stockholders

	Q2 2020			Q1 2020			Q4 2019			Q3 2019			Q2 2019
Net income (loss) available to common stockholders	$	(253,379	)	$	236,336		$	220,150		$	37,360		$	18,590
Adjustments to arrive at non-GAAP operating income available to common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses	18,492			16,349			7,606			(3,175		)	2,625
Change in fair value of derivatives and embedded derivatives - fixed index annuities	423,590			(120,454		)	(127,777		)	250,186			99,868
Change in fair value of derivatives - interest rate caps and swap	—			(848		)	(167		)	(76		)	854
Income taxes	(95,599		)	22,702			26,023			(50,940		)	(22,346		)
Non-GAAP operating income available to common stockholders (b)(c)(d)	$	93,104		$	154,085		$	125,835		$	233,355		$	99,591
Per common share - assuming dilution:
Net income (loss) available to common stockholders	$	(2.76	)	$	2.57		$	2.40		$	0.41		$	0.20
Adjustments to arrive at non-GAAP operating income available to common stockholders:
Anti-dilutive effect of net loss	0.01			—			—			—			—
Net realized gains/losses on financial assets, including credit losses	0.20			0.17			0.08			(0.04		)	0.03
Change in fair value of derivatives and embedded derivatives - fixed index annuities	4.60			(1.31		)	(1.39		)	2.73			1.09
Change in fair value of derivatives - interest rate caps and swap	—			(0.01		)	—			—			0.01
Income taxes	(1.04		)	0.25			0.28			(0.56		)	(0.24		)
Non-GAAP operating income available to common stockholders (b)(c)(d)	$	1.01		$	1.67		$	1.37		$	2.54		$	1.09

(a) Adjustments to net income (loss) available to common stockholders to arrive at non-GAAP operating income available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs where applicable.

(b) Q3 2019 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index product benefits by $315.4 million and decreased non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders per common share - assuming dilution by $247.3 million and $2.70 per share, respectively.

(c) Q3 2019 includes a benefit from unlocking which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $184.9 million and $288.3 million, respectively, and increased non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders per common share- assuming dilution by $371.0 million and $4.05 per share, respectively.

(d) Q1 2020 includes a tax benefit related to the provision of the CARES ACT which was signed into legislation on March 27, 2020 and allows net operating losses for 2018 through 2020 to be carried back to previous tax years in which a 35% statutory tax rate was in effect. The impact reduced income tax expense and increased non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders per common share - assuming dilution by $30.8 million and $0.33 per share, respectively.

Page 6

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income Available to Common Stockholders

	Q2 2020			Q1 2020			Q4 2019			Q3 2019			Q2 2019
Net realized (gains) losses on investments	$	25,888		$	20,336		$	(7,029	)	$	(4,328	)	$	3,832
Net OTTI losses recognized in operations	—			—			17,412			101			1,213
Change in fair value of derivatives	(413,489		)	1,039,322			(370,973		)	(79,943		)	(108,662		)
Increase (decrease) in total revenues	(387,601		)	1,059,658			(360,590		)	(84,170		)	(103,617		)
Amortization of deferred sales inducements	115,511			(29,683		)	(37,374		)	(57,408		)	49,101
Change in fair value of embedded derivatives	(1,126,935		)	1,250,061			(147,879		)	(212,278		)	(327,562		)
Interest sensitive and index product benefits (a)	612			(1,321		)	—			—			—
Amortization of deferred policy acquisition costs	181,129			(54,446		)	(54,999		)	(61,419		)	71,497
Increase (decrease) in total benefits and expenses	(829,683		)	1,164,611			(240,252		)	(331,105		)	(206,964		)
Increase in income (loss) before income taxes	442,082			(104,953		)	(120,338		)	246,935			103,347
Increase (decrease) in income tax expense (benefit)	95,599			(22,702		)	(26,023		)	50,940			22,346
Increase (decrease) in net income (loss) available to common stockholders	$	346,483		$	(82,251	)	$	(94,315	)	$	195,995		$	81,001

(a) Interest sensitive and index product benefits adjustment reflects the change in the allowance for credit losses on our reinsurance recoverable/coinsurance deposits under a revised impairment model for financial assets measured at amortized cost which we were required to adopt on January 1, 2020. The change in this allowance is reflected in the net realized gains/losses of financial assets, including credit losses line in the other Non-GAAP financial measures tables in this financial supplement.

Page 7

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except share and per share data)

Capitalization/Book Value per Common Share

	Q2 2020			Q1 2020			Q4 2019			Q3 2019			Q2 2019
Capitalization:
Notes payable	$	500,000		$	500,000		$	500,000		$	500,000		$	500,000
Subordinated debentures payable to subsidiary trusts	77,964			77,893			159,272			247,362			247,294
Total debt	577,964			577,893			659,272			747,362			747,294
Total stockholders’ equity	5,062,059			3,522,757			4,570,119			4,126,716			3,497,475
Total capitalization	5,640,023			4,100,650			5,229,391			4,874,078			4,244,769
Accumulated other comprehensive income (AOCI)	(1,719,839		)	(219,974		)	(1,497,921		)	(1,639,429		)	(1,049,984		)
Total capitalization excluding AOCI (a)	$	3,920,184		$	3,880,676		$	3,731,470		$	3,234,649		$	3,194,785
Total stockholders’ equity	$	5,062,059		$	3,522,757		$	4,570,119		$	4,126,716		$	3,497,475
Equity available to preferred stockholders (b)	(700,000		)	(400,000		)	(400,000		)	—			—
Total common stockholders' equity (c)	4,362,059			3,122,757			4,170,119			4,126,716			3,497,475
Accumulated other comprehensive income	(1,719,839		)	(219,974		)	(1,497,921		)	(1,639,429		)	(1,049,984		)
Total common stockholders’ equity excluding AOCI(c)	2,642,220			2,902,783			2,672,198			2,487,287			2,447,491
Net impact of fair value accounting for derivatives and embedded derivatives	685,839			353,853			448,924			549,202			353,180
Total common stockholders’ equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives (c)	$	3,328,059		$	3,256,636		$	3,121,122		$	3,036,489		$	2,800,671
Common shares outstanding	91,595,066			91,497,841			91,107,555			91,006,950			90,936,324
Book Value per Common Share: (d)
Book value per common share (c)	$	47.62		$	34.13		$	45.77		$	45.35		$	38.46
Book value per common share excluding AOCI (c)	$	28.85		$	31.73		$	29.33		$	27.33		$	26.91
Book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives (c)	$	36.33		$	35.59		$	34.26		$	33.37		$	30.80
Debt-to-Capital Ratios: (e)
Senior debt / Total capitalization	12.8		%	12.9		%	13.4		%	15.5		%	15.7		%
Total debt / Total capitalization	14.7		%	14.9		%	17.7		%	23.1		%	23.4		%

(a) Total capitalization excluding AOCI, a non-GAAP financial measure, is based on stockholders' equity excluding the effect of AOCI.

(b) Equity available to preferred stockholders is equal to the redemption value of outstanding preferred stock plus share dividends declared but not yet issued.

(c) Total common stockholders' equity, total common stockholder's equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, exclude equity available to preferred stockholders. Total common stockholders’ equity and book value per common share excluding AOCI, non-GAAP financial measures, are based on common stockholders’ equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale securities, we believe these non-GAAP financial measures provide useful supplemental information. Total common stockholders' equity and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, are based on common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives. Since the net impact of fair value accounting for our derivatives and embedded derivatives fluctuates from quarter to quarter and the most significant impacts relate to fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results, we believe these non-GAAP financial measures provide useful supplemental information.

(d) Book value per common share including and excluding AOCI and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives are calculated as total common stockholders’ equity, total common stockholders’ equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives divided by the total number of shares of common stock outstanding.

(e) Debt-to-capital ratios are computed using total capitalization excluding AOCI.

Page 8

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Spread Results

Six Months Ended   June 30,
2020	2019		Q2 2020	Q1 2020	Q4 2019	Q3 2019	Q2 2019
4.24%	4.49%	Average yield on invested assets	4.12%	4.36%	4.52%	4.59%	4.51%
1.73%	1.89%	Aggregate cost of money	1.73%	1.72%	1.75%	1.84%	1.88%
2.51%	2.60%	Aggregate investment spread	2.39%	2.64%	2.77%	2.75%	2.63%
		Impact of:
0.04%	0.03%	Investment yield - additional prepayment income	0.03%	0.06%	0.12%	0.11%	0.04%
0.02%	0.03%	Cost of money effect of over (under) hedging	(0.01)%	0.05%	0.05%	0.02%	0.04%
$52,762,227	$50,309,342	Weighted average investments	$52,901,215	$52,623,239	$52,141,459	$51,529,850	$50,709,966

Weighted average investments include fixed maturity securities at amortized cost and mortgage loans on real estate and other investments at carrying values as reflected in the consolidated balance sheets. The numerator for average yield on invested assets includes net investment income and the tax effect of investment income that is exempt from income taxes.

Summary of Cost of Money for Deferred Annuities

Six Months Ended   June 30,
2020			2019				Q2 2020			Q1 2020			Q4 2019			Q3 2019			Q2 2019
						Included in interest sensitive and index product benefits:
$	376,815		$	217,677		Index credits	$	97,875		$	278,940		$	277,798		$	92,343		$	161,752
95,541			97,914			Interest credited	46,594			48,947			49,482			49,511			50,478
						Included in change in fair value of derivatives:
(382,278		)	(224,890		)	Proceeds received at option expiration	(97,015		)	(285,263		)	(284,624		)	(95,491		)	(166,430		)
369,871			397,503			Pro rata amortization of option cost	182,841			187,030			188,984			195,354			199,006
$	459,949		$	488,204		Cost of money for deferred annuities	$	230,295		$	229,654		$	231,640		$	241,717		$	244,806
$	53,244,580		$	51,669,061		Weighted average liability balance outstanding	$	53,214,255		$	53,274,905		$	53,092,419		$	52,682,886		$	52,009,407

Annuity Account Balance Rollforward

Six Months Ended   June 30,
2020			2019				Q2 2020			Q1 2020			Q4 2019			Q3 2019			Q2 2019
$	53,233,898		$	51,053,450		Account balances at beginning of period	$	53,315,909		$	53,233,898		$	52,950,937		$	52,414,835		$	51,603,979
1,224,778			2,605,690			Net deposits	543,026			681,752			838,761			1,216,720			1,425,325
47,262			93,991			Premium bonuses	22,710			24,552			36,983			46,968			48,370
472,356			315,591			Fixed interest credited and index credits	144,469			327,887			327,280			141,854			212,230
(39,095		)	(35,936		)	Surrender charges	(19,390		)	(19,705		)	(15,092		)	(20,537		)	(19,480		)
(83,892		)	(77,730		)	Lifetime income benefit rider fees	(44,048		)	(39,844		)	(47,630		)	(43,110		)	(41,220		)
(1,742,707		)	(1,540,221		)	Surrenders, withdrawals, deaths, etc.	(850,076		)	(892,631		)	(857,341		)	(805,793		)	(814,369		)
$	53,112,600		$	52,414,835		Account balances at end of period	$	53,112,600		$	53,315,909		$	53,233,898		$	52,950,937		$	52,414,835

Page 9

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Annuity Deposits by Product Type

Six Months Ended   June 30,
2020		2019			Q2 2020		Q1 2020		Q4 2019		Q3 2019		Q2 2019
				American Equity Life:
$	1,058,962	$	2,238,662	Fixed index annuities	$	472,899	$	586,063	$	765,180	$	1,054,796	$	1,211,004
4,647		7,062		Annual reset fixed rate annuities	2,316		2,331		1,843		2,340		3,614
452		714		Multi-year fixed rate annuities	83		369		306		593		566
15,482		3,815		Single premium immediate annuities	10,084		5,398		4,873		3,314		1,747
1,079,543		2,250,253			485,382		594,161		772,202		1,061,043		1,216,931
				Eagle Life:
178,873		413,038		Fixed index annuities	72,371		106,502		67,784		166,081		235,558
58		193		Annual reset fixed rate annuities	17		41		6		—		66
5,180		72,572		Multi-year fixed rate annuities	1,031		4,149		81,041		79,000		47,004
184,111		485,803			73,419		110,692		148,831		245,081		282,628
				Consolidated:
1,237,835		2,651,700		Fixed index annuities	545,270		692,565		832,964		1,220,877		1,446,562
4,705		7,255		Annual reset fixed rate annuities	2,333		2,372		1,849		2,340		3,680
5,632		73,286		Multi-year fixed rate annuities	1,114		4,518		81,347		79,593		47,570
15,482		3,815		Single premium immediate annuities	10,084		5,398		4,873		3,314		1,747
1,263,654		2,736,056		Total before coinsurance ceded	558,801		704,853		921,033		1,306,124		1,499,559
23,394		126,551		Coinsurance ceded	5,691		17,703		77,399		86,090		72,487
$	1,240,260	$	2,609,505	Net after coinsurance ceded	$	553,110	$	687,150	$	843,634	$	1,220,034	$	1,427,072

Surrender Charge Protection and Account Values by Product Type

Annuity Surrender Charges and Net (of Coinsurance) Account Values at June 30, 2020:

	Surrender Charge			Net Account Value
Product Type	Avg. Years At Issue	Avg. Years Remaining	Avg. % Remaining	Dollars in Thousands		%
Fixed Index Annuities	12.9	6.6	10.7%	$	51,122,612	96.3	%
Annual Reset Fixed Rate Annuities	9.4	3.2	6.1%	1,403,321		2.6	%
Multi-Year Fixed Rate Annuities	5.9	1.6	4.6%	586,667		1.1	%
Total	12.7	6.5	10.5%	$	53,112,600	100.0	%

Page 10

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

Surrender Charge Percentages:	Fixed Annuities Account Value		Fixed Index Annuities Account Value
No surrender charge	$	811,287	$	2,740,676
0.0% < 2.0%	16,674		272,742
2.0% < 3.0%	18,180		1,059,162
3.0% < 4.0%	62,253		1,813,373
4.0% < 5.0%	66,625		1,629,546
5.0% < 6.0%	243,420		3,045,822
6.0% < 7.0%	94,673		1,169,623
7.0% < 8.0%	82,992		5,209,088
8.0% < 9.0%	44,361		4,048,053
9.0% < 10.0%	79,797		3,937,052
10.0% or greater	469,726		26,197,475
	$	1,989,988	$	51,122,612

Surrender Charge Expiration By Year:	Fixed and Fixed Index Annuities Account Value		Weighted Average Surrender Charge
Out of Surrender Charge	$	3,551,963	0.00	%
2020	466,472		2.62	%
2021	1,205,030		3.67	%
2022	1,718,514		4.67	%
2023	4,127,620		5.36	%
2024	5,140,087		7.22	%
2025	6,002,725		8.49	%
2026	5,229,759		10.10	%
2027	4,456,516		11.67	%
2028	4,726,844		12.59	%
2029	5,980,906		13.84	%
2030	3,228,720		15.92	%
2031	2,984,563		17.74	%
2032	2,030,436		18.26	%
2033	1,169,013		18.68	%
2034	698,437		19.17	%
2035	318,637		19.70	%
2036	76,358		20.00	%
	$	53,112,600	10.47	%

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

Credited Rate vs. Ultimate Minimum Guaranteed Rate Differential:	Fixed Annuities Account Value		Fixed Index Annuities Account Value
No differential	$	944,032	$	1,275,851
› 0.0% - 0.25%	49,125		153,052
› 0.25% - 0.5%	237,473		5,638
› 0.5% - 1.0%	34,082		10,596
› 1.0% - 1.5%	11,491		—
› 2.0% - 2.5%	238		—
Greater than 3.0%	2,757		—
1.00% ultimate guarantee - 2.36% wtd avg interest rate (a)	441,111		812,678
1.50% ultimate guarantee - 1.14% wtd avg interest rate (a)	142,690		3,300,429
1.75% ultimate guarantee - 1.96% wtd avg interest rate (a)	49,338		517,285
2.00% ultimate guarantee - 1.85% wtd avg interest rate (a)	77,651		—
2.25% ultimate guarantee - 1.75% wtd avg interest rate (a)	—		758,107
2.25% ultimate guarantee - 2.00% wtd avg interest rate (a)	—		1,471,865
Allocated to index strategies (see tables that follow)	—		42,817,111
	$	1,989,988	$	51,122,612

(a) The minimum guaranteed interest rate for the fixed rate or the fixed rate strategy is 1.00%. The ultimate guaranteed rate is applied on less than 100% of the premium.

If all crediting rates were reduced to minimum guaranteed rates (subject to limitations imposed by ultimate minimum guaranteed rates where applicable) the weighted average crediting rate as of June 30, 2020 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.14%.

Page 12

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES

Annual Monthly Average and Point-to-Point with Caps
	Minimum Guaranteed Cap
	1%		3%		4%		7%		8% +
Current Cap
At minimum	$	1,418	$	100,762	$	4,915,126	$	61,573	$	83,976
1.75% - 3%	8,452,761		—		—		—		—
3% - 4%	269,501		3,651		—		—		—
4% - 5%	890,045		218,620		1,394,195		—		—
5% - 6%	528,022		186,089		30,599		—		—
6% - 7%	—		—		444		—		—
>= 7%	10,694		6,334		716		5,510		—

Annual Monthly Average and Point-to-Point with Participation Rates
	Minimum Guaranteed Participation Rate
	10%		20% - 25%		35%		50% +
Current Participation Rate
At minimum	$	52,121	$	392,105	$	94,250	$	98,941
< 20%	867,652		—		—		—
20% - 40%	1,286,560		171,053		—		—
40% - 60%	3,196,216		96,904		57,801		—
60% - 100%	573,225		—		—		—
> 100%	473,490		—		—		—

S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1.0%
Current Cap
At minimum	$	2,050,638
1.10% - 1.30%	7,045,435
1.40% - 1.60%	2,017,351
1.70% - 2.00%	312,013
>= 2.10%	1,332

Volatility Control Index
Current Asset Fee
At Maximum	$	—
0.75% - 1.75%	373,003
2.25% - 2.75%	211,814
3.00% - 3.50%	2,305,934
3.75% - 5.00%	2,524,462

If all caps and participation rates were reduced to minimum caps and participation rates and current asset fees were increased to their maximums, the cost of options would decrease by 0.77% based upon prices of options for the week ended July 1, 2020.

Page 13

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Summary of Invested Assets

	June 30, 2020				December 31, 2019
	Carrying Amount		Percent		Carrying Amount		Percent
Fixed maturity securities:
United States Government full faith and credit	$	39,342	0.1	%	$	161,765	0.3	%
United States Government sponsored agencies	343,387		0.6	%	625,020		1.1	%
United States municipalities, states and territories	3,778,710		6.8	%	4,527,671		7.9	%
Foreign government obligations	207,509		0.4	%	205,096		0.3	%
Corporate securities	33,330,711		59.7	%	32,536,839		57.2	%
Residential mortgage backed securities	1,712,725		3.1	%	1,575,664		2.8	%
Commercial mortgage backed securities	5,393,062		9.6	%	5,786,279		10.2	%
Other asset backed securities	5,933,346		10.6	%	6,162,156		10.8	%
Total fixed maturity securities	50,738,792		90.9	%	51,580,490		90.6	%
Mortgage loans on real estate	3,958,233		7.1	%	3,448,793		6.1	%
Derivative instruments	672,958		1.2	%	1,355,989		2.4	%
Other investments	479,099		0.8	%	492,301		0.9	%
	$	55,849,082	100.0	%	$	56,877,573	100.0	%

Page 14

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands, except per share data)

Credit Quality of Fixed Maturity Securities - June 30, 2020

NAIC Designation	Carrying Amount		Percent		Rating Agency Rating	Carrying Amount		Percent
1	$	28,327,288	55.8	%	Aaa/Aa/A	$	29,240,135	57.6	%
2	20,765,334		40.9	%	Baa	19,857,663		39.1	%
3	1,430,998		2.8	%	Ba	1,347,637		2.7	%
4	156,234		0.3	%	B	126,141		0.3	%
5	31,644		0.1	%	Caa	68,192		0.1	%
6	27,294		0.1	%	Ca and lower	99,024		0.2	%
	$	50,738,792	100.0	%		$	50,738,792	100.0	%

Watch List Securities - June 30, 2020

General Description (a)	Amortized Cost		Allowance for Credit Losses			Amortized Cost, Net of Allowance		Net Unrealized Losses, Net of Allowance			Fair Value
Corporate securities - Public securities	$	59,078	$	(46,622	)	$	12,456	$	(1,718	)	$	10,738
Corporate securities - Private placement securities	359,141		(127		)	359,014		(25,933		)	333,081
Residential mortgage backed securities	35,860		(777		)	35,083		(458		)	34,625
Commercial mortgage backed securities	137,801		(2,660		)	135,141		(19,966		)	115,175
Other asset backed securities	83,892		—			83,892		(12,200		)	71,692
	$	675,772	$	(50,186	)	$	625,586	$	(60,275	)	$	565,311

(a) The watch list consists of all fixed maturity securities we have determined contain elevated credit risk, including those we have taken credit losses on.

Page 15

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Fixed Maturity Securities by Sector

	June 30, 2020				December 31, 2019
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for sale:
United States Government full faith and credit and sponsored agencies	$	330,238	$	382,729	$	763,164	$	786,785
United States municipalities, states and territories	3,283,321		3,778,710		4,147,343		4,527,671
Foreign government obligations	187,021		207,509		186,993		205,096
Corporate securities:
Capital goods	2,489,801		2,824,749		2,550,750		2,794,986
Consumer discretionary	6,128,110		7,003,608		6,082,974		6,658,120
Energy	2,661,723		2,738,944		2,499,030		2,677,646
Financials	6,690,075		7,439,505		6,737,325		7,323,150
Government non-guaranteed	539,396		616,763		539,639		606,308
Industrials	276,430		316,225		311,269		336,537
Information technology	1,823,511		2,104,744		1,868,131		2,051,175
Materials	1,774,801		1,972,694		1,818,048		1,961,033
Other	438,725		498,284		439,171		469,344
Telecommunications	1,476,151		1,703,362		1,510,836		1,664,350
Transportation	1,567,784		1,647,677		1,486,540		1,603,997
Utilities	3,868,282		4,464,156		3,978,459		4,390,193
Residential mortgage backed securities:
Government agency	592,348		684,049		591,100		646,787
Prime	907,897		925,834		793,357		815,916
Alt-A	88,515		102,842		93,281		112,961
Commercial mortgage backed securities:
Government agency	402,537		458,597		414,626		437,420
Non-agency	5,121,544		4,934,465		5,176,541		5,348,859
Other asset backed securities:
Auto	381,835		382,965		403,860		411,371
Energy	7,400		9,228		7,495		8,603
Financials	4,441		4,149		4,967		5,493
Industrials	143,874		140,426		167,466		171,273
Collateralized loan obligations	4,798,760		4,369,527		4,787,402		4,612,694
Military housing	468,201		549,773		471,621		539,029
Other	498,322		477,278		407,558		413,693
	$	46,951,043	$	50,738,792	$	48,238,946	$	51,580,490

Page 16

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Unaudited (Dollars in thousands)

Mortgage Loans on Real Estate

	June 30, 2020						December 31, 2019
	Principal			Percent			Principal			Percent
Geographic distribution: commercial mortgage loans
East	$	714,198		18.7		%	$	645,991		18.7		%
Middle Atlantic	287,864			7.5		%	284,597			8.2		%
Mountain	444,495			11.6		%	389,892			11.3		%
New England	25,066			0.7		%	9,152			0.3		%
Pacific	782,240			20.4		%	655,518			19.0		%
South Atlantic	820,260			21.4		%	751,199			21.7		%
West North Central	308,874			8.1		%	302,534			8.7		%
West South Central	445,975			11.6		%	420,031			12.1		%
	$	3,828,972		100.0		%	$	3,458,914		100.0		%
Property type distribution: commercial mortgage loans
Office	$	259,888		6.8		%	$	250,287		7.3		%
Medical Office	27,372			0.7		%	29,990			0.9		%
Retail	1,225,212			32.0		%	1,225,670			35.4		%
Industrial/Warehouse	974,579			25.5		%	896,558			25.9		%
Apartment	971,536			25.4		%	858,679			24.8		%
Agricultural	177,333			4.6		%	51,303			1.5		%
Mixed use/Other	193,052			5.0		%	146,427			4.2		%
	$	3,828,972		100.0		%	$	3,458,914		100.0		%
	June 30, 2020									December 31, 2019
	Commercial			Residential			Total			Total
Credit exposure - by payment activity
Performing	$	3,828,972		$	153,913		$	3,982,885		$	3,458,914
In workout	—			—			—			—
Delinquent	—			—			—			—
Collateral dependent	—			—			—			—
Principal outstanding	3,828,972			153,913			3,982,885			3,458,914
Unamortized discount	—			(3,078		)	(3,078		)
Deferred fees and costs, net	(1,858		)	373			(1,485		)	(942		)
Amortized cost	3,827,114			151,208			3,978,322			3,457,972
Valuation allowance	(18,439		)	(1,650		)	(20,089		)	(9,179		)
Carrying value	$	3,808,675		$	149,558		$	3,958,233		$	3,448,793

Page 17

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Shareholder Information

Corporate Offices:

American Equity Investment Life Holding Company

6000 Westown Parkway

West Des Moines, IA 50266

Inquiries:

Steven Schwartz, Vice President-Investor Relations

(515) 273-3763, sschwartz@american-equity.com

Common Stock and Dividend Information:

New York Stock Exchange symbol: “AEL”

	High	Low	Close	Dividend Declared
2020
First Quarter	$34.16	$9.07	$18.80	$0.00
Second Quarter	$27.09	$14.76	$24.71	$0.00
2019
First Quarter	$33.57	$26.34	$27.02	$0.00
Second Quarter	$30.91	$25.84	$27.16	$0.00
Third Quarter	$27.80	$20.16	$24.20	$0.00
Fourth Quarter	$30.96	$21.75	$29.93	$0.30
2018
First Quarter	$35.79	$28.90	$29.36	$0.00
Second Quarter	$37.16	$27.06	$36.00	$0.00
Third Quarter	$38.57	$34.51	$35.36	$0.00
Fourth Quarter	$36.39	$25.27	$27.94	$0.28

Transfer Agent:

Computershare Trust Company, N.A.

P.O. Box 43010

Providence, RI 02940-0310

Phone: (877) 282-1169

Fax: (781) 575-2723

www.computershare.com

Annual Report and Other Information:

Shareholders may receive when available, without charge, a copy of American Equity’s Annual Report, SEC filings and/or press releases by calling Steven Schwartz, Vice President-Investor Relations, at (515) 273-3763 or by visiting our website at www.american-equity.com.

Page 18

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - June 30, 2020

Research Analyst Coverage

Erik Bass

Autonomous Research US LP

(646) 561-6248

ebass@autonomous.com

Randy Binner

B. Riley FBR, Inc.

(703) 312-1890

rbinner@fbr.com

Daniel Bergman

Citi Research

(212) 816-2132

daniel.bergman@citi.com

Thomas Gallagher

Evercore ISI

(212) 446-9439

thomas.gallagher@evercoreisi.com

Pablo Singzon II

JP Morgan

(212) 622-2295

pablo.s.singzon@jpmorgan.com

Ryan Krueger

Keefe, Bruyette & Woods

(860) 722-5930

rkrueger@kbw.com

C. Gregory Peters

Raymond James & Associates, Inc.

(727) 567-1534

greg.peters@raymondjames.com

Mark A. Dwelle

RBC Capital Markets, LLC

(804) 782-4008

mark.dwelle@rbccm.com

John Barnidge

Piper Sandler & Co.

(312) 281-3412

John.Barnidge@psc.com

Mark Hughes

SunTrust Robinson Humphrey

(615) 748-4422

mark.hughes@suntrust.com

Page 19

XML

Cover Page	Aug. 05, 2020
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Aug. 05, 2020
Entity Registrant Name	AMERICAN EQUITY INVESTMENT LIFE HOLDING CO
Entity Incorporation, State or Country Code	IA
Entity File Number	001-31911
Entity Tax Identification Number	42-1447959
Entity Address, Address Line One	6000 Westown Parkway
Entity Address, City or Town	West Des Moines
Entity Address, State or Province	IA
Entity Address, Postal Zip Code	50266
City Area Code	515
Local Phone Number	221-0002
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001039828
Amendment Flag	false
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common stock, par value $1
Trading Symbol	AEL
Security Exchange Name	NYSE
Preferred Stock, Series A
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/1,000th interest in a share of 5.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series A
Trading Symbol	AELPRA
Security Exchange Name	NYSE
Preferred Stock, Series B
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/1,000th interest in a share of 6.625% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series B
Trading Symbol	AELPRB
Security Exchange Name	NYSE