American National Group Inc
For the period ended Sep 30, 2024. Filed Nov 15, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 15, 2024
ANG-PD$21.88+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001039828-24-000074
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-15.
0001039828-24-000079
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 187 previous paragraphs and 145 current paragraphs.
51 unchanged; 44 reworded; 48 added; 91 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (48)
Current report
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Current report
(1)Distributable Operating Earnings is a Non-GAAP measure. See “Reconciliation of Non-GAAP Measures”.
Current report
Net Premiums
Current report
Net premiums by product type collected during the three and nine months ended September 30, 2024 and 2023, were as follows:
Current report
(1)Premiums received from retail annuities are generally recorded as deposits and are not included in net premiums on the Consolidated Statements of Operations.
Current report
(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.
Current report
For the three months ended September 30, 2024, we reported total net premiums of $888 million, compared to net premiums of $784 million for the same period in 2023. The increase of $104 million is primarily due to continued growth in the PRT business.
Current report
For the nine months ended September 30, 2024, we reported total net premiums of $3.0 billion, compared to net premiums of $2.6 billion for the same period in 2023. The increase of $470 million is primarily due to growth within the annuities segment as we continue to scale our PRT business.
Current report
Gross Annuity Sales
Current report
Gross annuity sales are comprised of directly written retail and institutional annuity deposits, which generally are not included in revenues on the Consolidated Statements of Operations.
Current report
(1)Premiums differ from gross annuity sales in PRT, since premiums are recognized as revenue when due while they are included in sales upon deal close, which is confirmed by the counterparty.
Current report
For the three months ended September 30, 2024, we reported total gross annuity sales of $4.1 billion, compared to gross annuity sales of $1.6 billion for the same period in 2023. The increase of $2.5 billion is primarily due to the addition of fixed index annuity deposits generated by American Equity subsequent to the completion of the acquisition as well as strong fixed rate annuity and PRT sales.
Current report
For the nine months ended September 30, 2024, we reported total gross annuity sales of $9.0 billion, compared to gross annuity sales of $4.9 billion in the prior year period. The increase of $4.0 billion is primarily due to the addition of fixed index annuity deposits generated by American Equity subsequent to the completion of the acquisition as well as an increase in PRT sales due to continued scaling of that segment of business.
Current report
For the three months ended September 30, 2024, we reported net loss of $(288) million, compared to net income of $54 million for the same period in 2023. The decrease of $(342) million was primarily due to an increase in the change in fair value of insurance-related derivatives and embedded derivatives and an increase in the change in fair value of market risk benefits as a result of equity market and interest rate movements. Additionally, there was an increase in policyholder benefits and claims incurred due to growth in the PRT business and an increase in interest sensitive contract benefits and operating expenses which were primarily driven by the inclusion of American Equity following the acquisition. Those impacts were partially offset by an increase in net investment income and other policy revenue primarily due to the inclusion of American Equity following the acquisition.
Current report
We recorded $(128) million of investment related losses for the three months ended September 30, 2024, an increase of $116 million compared to the same period in 2023. The increase was primarily due to an increase in realized losses on investments driven by the transfer of assets pursuant to RGA reinsurance transaction which was effective July 1, 2024.
Current report
For the nine months ended September 30, 2024, we reported net income of $80 million, compared to a net income of $163 million for the same period in 2023. The decrease is primarily due to an increase in the change in fair value of insurance-related derivatives and embedded derivatives and an increase in the change in fair value of market risk benefits as a result of equity market and interest rate movements. Additionally, there was an increase in policyholder benefits and claims incurred due to growth in the PRT business and an increase in interest sensitive contract benefits and operating expenses due to the inclusion of American Equity following the acquisition. This decrease was partially offset by an increase in net investment income and other policy revenue due to the inclusion of American Equity.
Current report
Distributable Operating Earnings
Current report
We measure operating performance primarily using Distributable Operating Earnings (“DOE”) 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.
Current report
The following table presents DOE of each of our reporting segments for the three and nine months ended September 30, 2024 and 2023:
Current report
Annuity – DOE within our annuity business represents contribution from both our retail and institutional platforms. DOE increased by $247 million for the three months ended September 30, 2024 compared to the same period in 2023. The increase is primarily attributable to earnings contributed from AEL as well as increased investment income from our continued deployment into higher yielding investment strategies.
Current report
Life – DOE decreased by $(22) million for the three months ended September 30, 2024 compared to the same period in 2023. The decrease is primarily driven by the impact of the RGA reinsurance treaty executed during the quarter.
Current report
Property and Casualty – DOE increased by $31 million for the three months ended September 30, 2024 compared to the same period in 2023. The increase was driven by improvements in our loss experience arising from underwriting actions implemented over the past twelve months.
Current report
Corporate and Other – DOE decreased by $(36) million for the three months ended September 30, 2024 compared to the same period in 2023. The decrease was primarily driven by increased interest expenses due to debt assumed and raised through the acquisition of AEL.
Current report
Comparison of Nine Months Ended September 30, 2024 vs. 2023
Current report
Annuity – DOE increased by $386 million for the nine months ended September 30, 2024 compared to the same period in 2023. The increase is primarily attributable to earnings contributed from AEL, the scale-up of our U.S. PRT business as well as increased investment income from our continued deployment into higher yielding investment strategies.
Current report
Life – DOE increased by $15 million for the nine months ended September 30, 2024 compared to the same period in 2023. The increase was driven by improved investment income from our continued deployment into higher yielding investment strategies, partially offset by the impact of the RGA reinsurance treaty executed during the third quarter.
Current report
Property and Casualty – DOE increased by $49 million for the nine months ended September 30, 2024 compared to the same period in 2023. The increase was driven by improvements in loss experience arising from underwriting actions implemented since the prior year period.
Current report
Corporate and Other – DOE decreased by $(85) million for the nine months ended September 30, 2024 compared to the same period in 2023. The decrease was primarily driven by increases in interest expenses due to debt assumed and raised through the acquisition of AEL.
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
Financial Instruments
Current report
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 by the Company. The following key principles form the basis of our foreign currency hedging strategy:
Current report
•We leverage any natural hedges that may exist within our operations;
Current report
•We utilize local currency debt financing to the extent possible; and
Current report
•We may utilize derivative contracts to the extent that natural hedges are insufficient.
Current report
Performance Measures Used by Management
Current report
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. Refer to the “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 nine months ended September 30, 2024 and 2023.
Current report
Non-GAAP Measures
Current report
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.
Current report
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 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.
Current report
Distributable Operating Earnings
Showing the first 40 of 48 passages. Open the source sections for the rest.
Removed paragraphs (91)
Previous report
Regulation
Previous report
Our subsidiaries are subject to extensive regulation, primarily at the state level. Such regulation varies by state but generally has its source in statutes that establish requirements for the business of insurance and that grant broad regulatory authority to a state agency. Insurance regulation governs a wide variety of matters including:
Previous report
•insurance company licensing
Previous report
•agent and adjuster licensing
Previous report
•policy benefits
Previous report
•price setting
Previous report
•accounting practices
Previous report
•product suitability
Previous report
•the payment of dividends
Previous report
•the nature and amount of investments
Previous report
•underwriting practices
Previous report
•reserve requirements
Previous report
•sales and advertising practices
Previous report
•privacy practices
Previous report
•information systems security
Previous report
•policy forms
Previous report
•reinsurance reserve requirements
Previous report
•risk and solvency assessments
Previous report
•mergers and acquisitions
Previous report
•corporate governance practices
Previous report
•capital adequacy
Previous report
•transactions with affiliates
Previous report
•participation in shared markets and guaranty associations
Previous report
•claims practices
Previous report
•the remittance of unclaimed property
Previous report
•enterprise risk management requirements
Previous report
The models for state laws and regulations often emanate from the National Association of Insurance Commissioners (“NAIC”). While it is not mandatory for insurers to comply with an NAIC model law, nor for states to adopt a model law, state and federal legislators and regulators generally look to the model law for guidance in proposing new legislation and regulation.
Previous report
State insurance departments monitor compliance with regulations through periodic reporting procedures and examinations. At any given time, financial, market conduct or other examinations of our U.S. subsidiaries may be occurring.
Previous report
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) expanded the U.S. federal government presence in insurance oversight. Dodd-Frank also established the Federal Insurance Office within the U.S. Department of Treasury, which is authorized to, among other things, gather data and information to monitor aspects of the insurance industry, identify certain issues in the regulation of insurers, and preempt state insurance measures under certain circumstances. Provisions of Dodd-Frank are or may become applicable to us, our competitors, or certain entities with which we do business. For example, it is possible that regulations issued by the Consumer Financial Protection Bureau may extend, or be interpreted to extend, to the sale of certain insurance products by covered financial institutions, which could adversely affect sales of such products. The Federal Insurance Office, as a result of various studies it conducts, may also recommend changes in laws or regulations that affect our business. There may be further federal involvement in the business of insurance in the future, which may add significant legal complexity and associated costs to our business.
Previous report
Regulatory matters having the most significant effects on our insurance operations and related financial reporting are described further below.
Previous report
Holding Company Regulation
Previous report
We are an insurance holding company system under the insurance laws of the states where we do business. Our insurance companies are organized in multiple U.S. jurisdictions. Insurance holding company system laws and regulations in such states generally require periodic reporting to state insurance regulators of various business, enterprise risk management, corporate governance, and financial matters, as well as advance notice to, and in some cases approval by, such regulators prior to certain transactions between insurers and their affiliates. These laws also generally require regulatory approval prior to the acquisition of a controlling interest in an insurance company. These requirements may deter or delay certain transactions considered desirable by management or our stockholders.
Previous report
Limitations on Dividends by Subsidiaries
Previous report
The ability of our U.S. subsidiaries to pay dividends is generally limited by state law and is also impacted by federal income tax considerations. This includes restrictions on certain of our subsidiaries’ ability to distribute cash to us which may limit the movement of capital to us from certain subsidiaries.
Previous report
Rate Regulation
Previous report
Nearly all states have laws that require life, and property and casualty insurers to file rate schedules and require most insurers to file policy or coverage forms and other information with the state’s insurance regulatory authority. In many cases, these must be approved prior to use. The objectives of rate laws vary, but generally a price cannot be excessive, inadequate, or unfairly discriminatory. Prohibitions on discriminatory underwriting practices apply in the context of certain products as well.
Previous report
Our ability to adjust premium rates, particularly with certain property and casualty and health insurance products, often depends on the applicable pricing law and our ability to demonstrate to the particular regulator that current or proposed pricing complies with such law. Rate increases that we believe are necessary for our profitability may be delayed or denied as a result of such laws. We manage our risk of loss by charging a price that reflects the cost and expense of providing insurance products and by being selective in underwriting. When a state has significant underwriting and pricing restrictions, it becomes more difficult to manage our risk of loss, which can adversely impact our ability to market products profitably in such states.
Previous report
Guaranty Associations and Involuntary Markets
Previous report
State laws allow insurers to be assessed, subject to prescribed limits, insurance guaranty fund fees to pay certain obligations of insolvent insurance companies. In addition, to maintain our licenses to write property and casualty insurance in various states, we are required to participate in assigned risk plans, reinsurance facilities and joint underwriting associations that provide various insurance coverages to purchasers that otherwise are unable to obtain coverage from private insurers.
Previous report
Investment Regulation
Showing the first 40 of 91 passages. Open the source sections for the rest.
Reworded paragraphs (44)
Previous wording
Management's discussion and analysis reviews our unaudited consolidated financial position at June 30, 2024 compared with December 31, 2023, and our unaudited consolidated results of operations for the three and six months ended June 30, 2024 and 2023, and where appropriate, factors that may affect future financial performance. This analysis should be read in conjunction with our unaudited consolidated financial statements, notes thereto and selected consolidated financial data appearing elsewhere in this Form 10-Q. Interim operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the entire year. Preparation of financial statements requires use of management estimates and assumptions.
Current wording
Management's discussion and analysis reviews our unaudited consolidated financial position at September 30, 2024 compared with December 31, 2023, and our unaudited consolidated results of operations for the three and nine months ended September 30, 2024 and 2023, and where appropriate, factors that may affect future financial performance. This analysis should be read in conjunction with our unaudited consolidated financial statements, notes thereto and selected consolidated financial data appearing elsewhere in this Form 10-Q. Interim operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results expected for the entire year. Preparation of financial statements requires use of management estimates and assumptions.
Previous wording
On May 2, 2024, the Company’s predecessor, AEL, merged with and into Arches Merger Sub Inc., an indirect, wholly-owned subsidiary of Brookfield Reinsurance with AEL surviving and becoming an indirect, wholly-owned subsidiary of Brookfield Reinsurance. On May 7, 2024, American National merged with and into AEL, with AEL surviving as an indirect, wholly-owned subsidiary of Brookfield Reinsurance. Subsequently, AEL discontinued its existence as an Iowa corporation and continued its existence as a corporation incorporated in the State of Delaware through the Reincorporation. In connection with the Reincorporation, AEL changed its name to American National Group Inc. Throughout this report, unless otherwise specified or the context otherwise requires, all references to “ANGI", the "Company", "we", "our" and similar references are to American National Group Inc. and its consolidated subsidiaries.
Current wording
On May 2, 2024, the Company’s predecessor, AEL, merged with and into Arches Merger Sub Inc., an indirect, wholly-owned subsidiary of Brookfield Wealth Solutions, with AEL surviving and becoming an indirect, wholly-owned subsidiary of Brookfield Wealth Solutions. On May 7, 2024, American National merged with and into AEL, with AEL surviving as an indirect, wholly-owned subsidiary of Brookfield Wealth Solutions. Subsequently, AEL discontinued its existence as an Iowa corporation and continued its existence as a corporation incorporated in the State of Delaware through the Reincorporation. In connection with the Reincorporation, AEL changed its name to American National Group Inc. Throughout this report, unless otherwise specified or the context otherwise requires, all references to “ANGI", the "Company", "we", "our" and similar references are to American National Group Inc. and its consolidated subsidiaries.
Previous wording
Through our insurance subsidiaries, our Company offers a broad range of insurance products and services, including annuities, life insurance, and personal and commercial property and casualty insurance. Our business is presently conducted through our subsidiaries under four operating segments: Life, Annuity, Property and Casualty and Corporate and Other.
Current wording
Through our insurance subsidiaries, our Company offers a broad range of insurance products and services, including annuities, life insurance, and personal and commercial property and casualty insurance. Our business is presently conducted through our subsidiaries under four operating segments: Annuity, Life, Property and Casualty and Corporate and Other.
Previous wording
Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023
Current wording
Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
The following table summarizes the financial results of our business for the three and six months ended June 30, 2024 and 2023:
Current wording
The following table summarizes the financial results of our business for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Net premiums and other policy revenue were $1.2 billion for the three months ended June 30, 2024, compared to $1.1 billion for the same period in 2023. The increase of $84 million was primarily due to an increase in other policy revenue which reflects surrender fee and rider fee income recognized on annuity policies added following the acquisition of American Equity.
Current wording
Net premiums and other policy revenue were $1.1 billion for the three months ended September 30, 2024, compared to $890 million for the same period in 2023. The increase of $206 million was primarily due to an increase in other policy revenue which reflects surrender fee and rider fee income recognized on annuity policies added following the acquisition of American Equity as well as strong sales in the PRT business.
Previous wording
Net investment income increased by $582 million for the three months ended June 30, 2024, compared to the same period in 2023. Net investment income comprise interest and dividends received on financial instruments, equity investments and other miscellaneous fee income. The increase in 2024 was driven by the increase in assets under management following the acquisition of American Equity as well as the continued growth in the existing investment portfolio and the rotation into higher yielding investment strategies.
Current wording
Net investment income increased by $649 million for the three months ended September 30, 2024, compared to the same period in 2023. Net investment income comprise interest and dividends received on financial instruments, equity investments and other miscellaneous fee income. The increase in 2024 was driven by the increase in assets under management following the acquisition of American Equity as well as the continued growth in the existing investment portfolio and the rotation into higher yielding investment strategies.
Previous wording
Policyholder benefits and claims incurred were $1.0 billion for the three months ended June 30, 2024, compared to $989 million for the same period in 2023. The increase of $41 million was primarily due to an increase in growth of the PRT business which resulted in higher reserves. Additionally, there was an increase in catastrophe claims on the property and casualty business due to weather related incidents.
Current wording
Policyholder benefits and claims incurred were $846 million for the three months ended September 30, 2024, compared to $717 million for the same period in 2023. The increase of $129 million was primarily due to an increase in growth of the PRT business which resulted in higher reserves. This was partially offset by a decreased claims incurred due to the impact of business ceded to RGA subsequent to the effectuation of the reinsurance transaction.
Previous wording
Interest sensitive contract benefits represent interest credited to policyholders’ account balances from our investment contracts with customers. During the three months ended June 30, 2024, interest sensitive contract benefits increased by $274 million compared to the same period in 2023, driven mainly by an increase in the in-force block of annuity business following the acquisition of American Equity.
Current wording
Interest sensitive contract benefits represent interest credited to policyholders’ account balances from our investment contracts with customers. During the three months ended September 30, 2024, interest sensitive contract benefits increased by $390 million compared to the same period in 2023, driven mainly by an increase in the in-force block of annuity business following the acquisition of American Equity.
Previous wording
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $67 million compared to the same period in 2023, primarily due to an increase in the amortization of VOBA due to the increase in the VOBA asset following the acquisition of American Equity as well as the continued growth of the annuity business which increases the deferred acquisition cost asset.
Current wording
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $153 million compared to the same period in 2023, primarily due to an increase in the amortization of VOBA due to the increase in the VOBA asset following the acquisition of American Equity as well as the continued growth of the annuity business which increases the deferred acquisition cost asset.
Previous wording
Change in fair value of insurance-related derivatives and embedded derivatives increased by $47 million for the three months ended June 30, 2024 compared to the same period of 2023. The increase 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.
Current wording
Change in fair value of insurance-related derivatives and embedded derivatives increased by $290 million for the three months ended September 30, 2024 compared to the same period of 2023. The increase 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 and an update to the short term option budget assumption used in the calculation of the fair value of the embedded derivatives associated with fixed index annuity products.
Previous wording
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 $151 million for the three months ended June 30, 2024 compared to the same period of 2023 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities. Additionally, the market risk benefit liabilities increased as a result of the acquisition of American Equity leading to increases in the change in the fair value of these liabilities.
Current wording
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 $148 million for the three months ended September 30, 2024 compared to the same period of 2023 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities as well as the net impact of updates to the option budget assumption and policyholder lapse assumption used in the calculation of the fair value of market risk benefits. Additionally, the market risk benefit liabilities increased as a result of the acquisition of American Equity leading to increases in the change in the fair value of these liabilities.
Previous wording
Operating expenses were $335 million for the three months ended June 30, 2024, compared to $148 million for the same period in 2023, an increase of $187 million. The increase was primarily driven by transaction expenses incurred related to the acquisition of American Equity as well as an increase associated with two months of operating expenses from American Equity subsequent to the acquisition.
Current wording
Operating expenses were $228 million for the three months ended September 30, 2024, compared to $147 million for the same period in 2023, an increase of $81 million. The increase was primarily driven by the inclusion of operating expenses from American Equity subsequent to the acquisition.
Previous wording
The increase of $21 million of interest expense on borrowings compared to the same period in 2023 was mainly due to increased borrowings with the new term loan entered into in May 2024 as well as the acquisition of American Equity which included legacy senior notes and subordinated debt.
Current wording
The increase of $22 million of interest expense on borrowings compared to the same period in 2023 was mainly due to increased borrowings with the new term loan entered into in May 2024 as well as the acquisition of American Equity which included legacy senior notes and subordinated debt.
Previous wording
Net premiums and other policy revenue of $2.4 billion increased by $462 million for the six months ended June 30, 2024, compared to the same period in 2023 primarily due to growth in the PRT business partially offset by an increase in ceded premiums with the cession of the specialty market group block of business beginning in Q1 2024. Additionally, there was an increase in other policy revenue which reflects surrender fee and rider fee income recognized on annuity policies added following the acquisition of American Equity.
Current wording
Net premiums and other policy revenue of $3.5 billion increased by $668 million for the nine months ended September 30, 2024, compared to the same period in 2023 primarily due to growth in the PRT business partially offset by an increase in ceded premiums with the cession of the specialty market group block of business beginning in Q1 2024. Additionally, there was an increase in other policy revenue which reflects surrender fee and rider fee income recognized on annuity policies added following the acquisition of American Equity.
Previous wording
Net investment income increased by $706 million for the six months ended June 30, 2024, compared to the same period in 2023. The increase was primarily driven by the increase in assets under management following the acquisition of American Equity as well as the continued growth in the existing investment portfolio and the rotation into higher yielding investment strategies.
Current wording
Net investment income increased by $1.4 billion for the nine months ended September 30, 2024, compared to the same period in 2023. The increase was primarily driven by the increase in assets under management following the acquisition of American Equity as well as the continued growth in the existing investment portfolio and the rotation into higher yielding investment strategies.
Previous wording
The Company incurred investment related losses of $32 million for the six months ended June 30, 2024, compared to $20 million for the same period in 2023. The decrease of investment gains of $12 million was primarily due to higher realized losses in 2023 compared to 2024 as a result of portfolio turnover in 2023. This is partially offset by higher mark-to-market gains on equity securities in 2023 compared to 2024.
Current wording
The Company incurred investment related losses of $160 million for the nine months ended September 30, 2024, compared to $32 million for the same period in 2023. The increase in investment losses of $128 million was primarily due to realized losses on investments driven by the transfer of assets pursuant to the RGA reinsurance transaction which was effective July 1, 2024.
Previous wording
Policyholder benefits and claims incurred increased by $427 million for the six months ended June 30, 2024, compared to the same period in 2023. The increase is primarily due to an increase in growth of the PRT business which resulted in higher reserves. Additionally, there was an increase in catastrophe claims on the property and casualty business due to weather related incidents.
Current wording
Policyholder benefits and claims incurred increased by $556 million for the nine months ended September 30, 2024, compared to the same period in 2023. The increase is primarily due to an increase in growth of the PRT business which resulted in higher reserves. Additionally, there was an increase in catastrophe claims on the property and casualty business due to weather related incidents. These increases were partially offset by a decrease in claims incurred due to the impact of business ceded to RGA beginning in Q2 2024.
Previous wording
For the six months ended June 30, 2024, interest sensitive contract benefits increased compared to the same period in 2023 by $340 million which was primarily driven by an increase in the in-force block of annuity business following the acquisition of American Equity.
Current wording
For the nine months ended September 30, 2024, interest sensitive contract benefits increased compared to the same period in 2023 by $730 million which was primarily driven by an increase in the in-force block of annuity business following the acquisition of American Equity.
Previous wording
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $97 million compared to the same period in 2023, primarily due to an increase in the amortization of VOBA due to the increase in the VOBA asset following the acquisition of American Equity as well as the continued growth of the annuity business which increases the deferred acquisition cost asset.
Current wording
Amortization of deferred policy acquisition costs, deferred sales inducements and value of business acquired increased by $250 million compared to the same period in 2023, primarily due to an increase in the amortization of VOBA due to the increase in the VOBA asset following the acquisition of American Equity as well as the continued growth of the annuity business which increases the deferred acquisition cost asset.
Previous wording
Change in fair value of insurance-related derivatives and embedded derivatives increased by $2 million for the six months ended June 30, 2024 compared to the same period of 2023. The increase 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.
Current wording
Change in fair value of insurance-related derivatives and embedded derivatives increased by $292 million for the nine months ended September 30, 2024 compared to the same period of 2023. The increase 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 and an update to the short term option budget assumption used in the calculation of the fair value of the embedded derivatives associated with fixed index annuity products.
Previous wording
The increase in the change in fair value of market risk benefit of $165 million for the six months ended June 30, 2024 compared to the same period of 2023 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities. Additionally, the market risk benefit liabilities increased as a result of the acquisition of American Equity leading to increases in the change in the fair value of these liabilities.
Current wording
The increase in the change in fair value of market risk benefit of $313 million for the nine months ended September 30, 2024 compared to the same period of 2023 was primarily due to the impact of interest rates and equity markets on the valuation of these liabilities as well as the net impact of updates to the option budget assumption and policyholder lapse assumption used in the calculation of the fair value of market risk benefits. Additionally, the market risk benefit liabilities increased as a result of the acquisition of American Equity leading to increases in the change in the fair value of these liabilities.
Previous wording
Operating expenses increased by $135 million for the six months ended June 30, 2024 compared to the same period in 2023, primarily driven by transaction expenses incurred related to the acquisition of American Equity as well as an increase associated with two months of operating expenses from American Equity subsequent to the acquisition.
Current wording
Operating expenses increased by $216 million for the nine months ended September 30, 2024 compared to the same period in 2023, primarily driven by transaction expenses incurred related to the acquisition of American Equity as well as an increase associated with five months of operating expenses from American Equity subsequent to the acquisition.
Previous wording
Interest expense on borrowings increased by $19 million for the six months ended June 30, 2024 compared to the same period in 2023 primarily as a result of increased borrowings with the new term loan entered into in May 2024 as well as the acquisition of American Equity which included legacy senior notes and subordinated debt.
Current wording
Interest expense on borrowings increased by $41 million for the nine months ended September 30, 2024 compared to the same period in 2023 primarily as a result of increased borrowings with the new term loan entered into in May 2024 as well as the acquisition of American Equity which included legacy senior notes and subordinated debt.
Previous wording
Three Months Ended June 30, 2024 vs. 2023
Current wording
Comparison of Three Months Ended September 30, 2024 vs. 2023
Previous wording
Total assets increased by $82.7 billion during the year to $118.6 billion. The increase primarily related to the acquisition of $81.2 billion of assets from American Equity as well as additional annuity and PRT sales during the year.
Current wording
Total assets increased by $87.8 billion during the year to $123.7 billion. The increase primarily related to the acquisition of $81.2 billion of assets from American Equity as well as additional deployment of cash associated with annuity and PRT sales during the year.
Previous wording
Total investments increased by $45.5 billion from December 31, 2023 to June 30, 2024. The increase primarily relates to the acquisition of $43.0 billion of investments from American Equity as well as the deployment of excess cash and cash from new sales into investments during the year.
Current wording
Total investments increased by $47.8 billion from December 31, 2023 to September 30, 2024. The increase primarily relates to the acquisition of $43.0 billion of investments from American Equity as well as the deployment of excess cash and cash from new sales into investments during the year.
Previous wording
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 $7.4 billion primarily driven by the addition of $7.2 billion of VOBA related to the acquisition of American Equity. Additionally, deferrals associated with writing new business contributed to an increase of $575 million of DAC and DSI assets, partially offset by $358 million of amortization of DAC, DSI and VOBA recorded during the year.
Current wording
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 $7.4 billion primarily driven by the addition of $7.2 billion of VOBA related to the acquisition of American Equity. Additionally, deferrals associated with writing new business contributed to an increase of $1.1 billion of DAC and DSI assets, partially offset by $650 million of amortization of DAC, DSI and VOBA recorded during the year.
Previous wording
Deferred tax assets decreased by $58 million from December 31, 2023 to June 30, 2024. The decrease primarily relates to the addition of a deferred tax liability from the acquisition of American Equity partially offset by increases due to changes in estimates for deferred tax assets associated with our Bermuda subsidiaries, including economic transition adjustments which allows for elective fair value adjustments to the tax basis of assets and liabilities.
Current wording
Deferred tax assets decreased by $3 million from December 31, 2023 to September 30, 2024. The decrease is due to changes in estimates for deferred tax assets associated with our Bermuda subsidiaries, including economic transition adjustments, which allow for elective fair value adjustments to the tax basis of assets and liabilities and increased unrealized gains on investment securities, partially offset by the addition of a deferred tax liability from the acquisition of American Equity.
Previous wording
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 increased by $14.8 billion in the year primarily due to the acquisition of American Equity which contributed $15.0 billion of reinsurance recoverables and deposit assets.
Current wording
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 increased by $17.6 billion in the year primarily due to the acquisition of American Equity, which contributed $15.0 billion of reinsurance recoverables and deposit assets, and the RGA reinsurance transaction executed in Q3 2024, which contributed approximately $3.0 billion of reinsurance recoverables. These increases were slightly offset by a decrease in reinsurance recoverable due to an increase in benefits and surrenders ceded for existing American Equity reinsurance agreements.
Previous wording
Intangible assets increased by $1.6 billion at the end of the year, primarily due to the acquisition of American Equity which resulted in $1.6 billion of additional intangible assets primarily associated with the distributor relationships, trade name, and insurance licenses.
Current wording
Intangible assets increased by $1.6 billion during the year, primarily due to the acquisition of American Equity which resulted in $1.6 billion of additional intangible assets primarily associated with the distributor relationships, trade name, and insurance licenses.
Previous wording
Other assets increased by $1.5 billion during the year to $2.1 billion. The balance includes current tax asset, market risk benefit asset, prepaid pension assets, as well as other miscellaneous receivables, and includes an increase of $670 million as a result of the acquisition of American Equity.
Current wording
Other assets increased by $1.3 billion during the year to $1.9 billion. The balance includes current tax asset, market risk benefit asset, prepaid pension assets, as well as other miscellaneous receivables, and includes an increase of $670 million as a result of the acquisition of American Equity.
Previous wording
Separate account assets and liabilities both increased by $77 million during 2024, primarily due to net realized gains of underlying assets of $112 million and policyholder deposits of $35 million, partially offset by $75 million of policyholder benefits and withdrawals.
Current wording
Separate account assets and liabilities both increased by $113 million during 2024, primarily due to net realized gains of underlying assets of $156 million and policyholder deposits of $55 million, partially offset by $103 million of policyholder benefits and withdrawals.
Previous wording
Future policy benefits and policyholders’ account balances increased by $64.4 billion during 2024 primarily due to the acquisition of American Equity which contributed to an increase in $61.8 billion. Additionally, there was an increase associated with the net impact of new premiums and interest credited to policyholders net of surrenders and withdrawals.
Current wording
Future policy benefits and policyholders’ account balances increased by $66.3 billion during 2024 primarily due to the acquisition of American Equity which contributed to an increase in $61.8 billion. Additionally, there was an increase associated with the net impact of new premiums and interest credited to policyholders net of surrenders and withdrawals.
Previous wording
Market risk benefits increased by $3.2 billion during 2024 primarily due to the acquisition of American Equity which contributed to an increase of $3.0 billion. Additionally, the market risk benefits increased subsequent to the acquisition due to the impact of changes in interest rates and equity markets.
Current wording
Market risk benefits increased by $3.7 billion during 2024 primarily due to the acquisition of American Equity which contributed to an increase of $3.0 billion. Additionally, the market risk benefits increased subsequent to the acquisition due to the impact of changes in interest rates and equity markets and as a result of the net impact of updates to the option budget assumption and policyholder lapse assumption used in the calculation of the fair value of market risk benefits.
Previous wording
Long term borrowings increased by $983 million during 2024 primarily due to the execution of a new term loan agreement in May of 2024 which resulted in $1.9 billion of additional borrowings. This increase is partially offset by the payoff of a historical term loan with the proceeds of the new term loan.
Current wording
Notes payable and long term borrowings increased by $1.5 billion during 2024 primarily due to the execution of a new term loan agreement in May of 2024 which resulted in $1.9 billion of additional borrowings. This increase is partially offset by the payoff of a historical term loan with the proceeds of the new term loan issued upon acquisition.
Previous wording
Funds withheld for reinsurance liabilities increased by $8.7 billion during 2024 due to the acquisition of American Equity which held this liability as a result of certain coinsurance funds withheld and modified coinsurance reinsurance agreements which were in place prior to the acquisition.
Current wording
Funds withheld for reinsurance liabilities increased by $8.8 billion during 2024 due to the acquisition of American Equity which held this liability as a result of certain coinsurance funds withheld and modified coinsurance reinsurance agreements which were in place prior to the acquisition.
Previous wording
Other liabilities increased by $1.4 billion during 2024. The balance includes the reinsured market risk benefits liability, accrued interest on debt and other miscellaneous payables. The increase during 2024 is primarily due to the acquisition of American Equity.
Current wording
Other liabilities increased by $3.2 billion during 2024. The balance includes the reinsured market risk benefits liability, accrued interest on debt and other miscellaneous payables. The increase during 2024 is primarily due to the acquisition of American Equity which contributed an increase of $2.1 billion and the $1.5 billion deferred gain associated with the RGA reinsurance transaction executed in Q3 2024.
Previous wording
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”). As of June 30, 2024, the Company had no drawings and a total of $1.5 billion undrawn commitment available related to this program.
Current wording
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”). As of September 30, 2024, the Company had no drawings and a total of $1.6 billion undrawn commitment available related to this program.
Previous wording
Liquidity within our insurance subsidiaries may be restricted from time to time due to regulatory constraints. As of June 30, 2024, the Company’s total liquidity was $38.6 billion, which included $61.0 million of unrestricted cash and cash equivalents.
Current wording
Liquidity within our insurance subsidiaries may be restricted from time to time due to regulatory constraints. As of September 30, 2024, the Company’s total liquidity was $42.3 billion, which included $42 million of unrestricted cash and cash equivalents.
Showing the first 40 of 44 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The results of operations discussed below comprise results for American National for all periods presented and results for American Equity for the period May 2, 2024 to September 30, 2024.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Six Months Ended June 30, 2024 vs. 2023