Athene's Parent Shrugs at MYGA Sales

What You Need to Know

Apollo took Athene private in 2022.
CEO Marc Rowan says Athene has plenty of asset inflows from what he thinks of as high-quality business.
Apollo has broken down data on Athene asset outflows by reason.

Marc Rowan, the CEO of the investment company that controls Athene Holding, is not excited about the idea of Athene writing more multi-year guaranteed annuity contracts.

Higher interest rates helped push total U.S. MYGA sales to $40 billion in the first quarter, up 173% from the total for the first quarter of 2022.

Rowan, the head of Apollo Global Management, told securities analysts on Thursday that Athene, a big life and annuity insurer and reinsurer, is leaving tens of billions of dollars of MYGA business on the table because Apollo sees MYGAs as “transactional.”

“‘Transactional’ does not mean bad,” Rowan said. “It just means we elected to do other business versus transactional business.”

What It Means

Anant Bhalla, the CEO of American Equity Investment Life, said in May that he thought that most annuity players were pricing their annuities rationally but that there were pockets of irrationality.

Rowan’s comments show that other executives may also have concerns about some areas of the individual annuity market.

The Earnings

Apollo has had a large stake in Athene for years. It merged with Athene and took Athene private at the beginning of 2022.

Rowan spoke on a conference call Apollo held to go over second-quarter earnings.

The company reported $750 million in net income for the quarter on $14 billion in revenue, compared with a $2.6 billion net loss on $2.3 billion in revenue for the second quarter of 2022.

MYGAs

MYGAs are annuities that guarantee that the holders will get a fixed interest rate for a period longer than a year.

“MYGAs is our primary transactional business,” Rowan said during the call. “Any time we want to add MYGAs, we can add MYGAs.”

Outflows

In its new quarterly earnings supplement and earnings call slide deck, Apollo gives details about the flow of assets into and out of the company.

Athene has $214 billion in net invested assets. It recorded $15 billion in asset inflows in the second quarter and $7.9 billion in outflows.

A table in Apollo’s financial supplement shows the reasons for Athene’s outflows.

About $4 billion of the outflows were due to annuity contracts or other arrangements maturing, up from $1.3 billion a year earlier.

Planned income withdrawals increased to $1.75 billion, from $1.4 billion, and planned product surrenders, which took place outside the surrender charge period, increased to $1.4 billion, from $1.1 billion.

Unplanned surrenders, which occurred during the surrender charge period, increased to $783 million, from $269 million.