NU Online News Service, April 26, 2004, 1:44 p.m. EDT – Annuity investment spreads were wider at American Equity Investment Life Holding Company, West Des Moines, Iowa, during the first quarter despite pressure on investment yields.[@@]
The 9-year-old annuity manufacturer is reporting $10.4 million in net income for the latest quarter on $114.9 million in revenue, compared with $4.5 million in net income on $86.3 million in revenue for the first quarter of 2003.
American Equity sells annuities with rates tied to various stock market equity indices, annuities with rates fixed for 1 year and annuities with rates fixed for more than 1 year.
The overall average rate that American Equity earned on its own investments fell to 6.33% during the first quarter, from 7% for the first quarter of 2003, according to the company’s first-quarter financial supplement.
American Equity expanded the spread between the rate it earns on its own investments and the crediting rates it pays to annuity holders by cutting crediting rates on most products.
The average crediting rate for annually adjustable fixed-rate annuities fell to 3.53%, from 4.46%, while the average crediting rate for annuities with fixed rates guaranteed for more than 1 year fell to 5.64%, from 5.78%.