Nick Nemeth, an investment consultant who posts analyses on the Mispriced Assets Substack site, took time off from looking at stocks, bonds and private equity last week to skewer the financial statements of Athene Annuity and Life.
Nemeth opened the company's 9,612-page annual statement and deemed it to be a lousy-looking bank.
Athene has only about $4.1 billion in capital backing $282 billion in assets, or 419% of an insurance company's company action level capital requirement, Nemeth wrote in an article about the company.
If banks calculated risk-based capital ratios the way life and annuity issuers do, Lehman Brothers would have had an RBC ratio over 10,000% the week before it collapsed, Nemeth said.
"Lehman was levered 30 to 1," he added. "Athene's U.S. entity is levered 69 to 1."
The situation is worse than that, because Athene has invested much of its portfolio in private credit arrangements and other alternative assets, which are hard to value, Nemeth wrote.
Also, the company depends heavily on a relationship with a Bermuda-based reinsurance company affiliate, which is subject to much lighter reporting requirements than Athene and might not necessarily make good on its obligations to Athene in a crisis, he added.
"In a crisis," Nemeth said, "the question is not how much capital exists across the corporate structure. It is how much is available at the entity that owes the money, when it owes it, under the jurisdiction that regulates it."
He wrote that, unlike the U.S. Securities and Exchange Commission (which makes access to ordinary publicly traded companies' financial filings available to the public for free), insurance regulators make insurance company financial filings available mainly through expensive paid services.
Athene, a subsidiary of Apollo Global Management, an asset manager, said in a statement that it has exceptional financial strength, with top crediting ratings from Moody's, S&P, Fitch and AM Best.
"Every promise Athene makes to policyholders is backed by $35 billion of regulatory capital, stable liabilities and disciplined risk management," the company said in response to Nemeth's analysis. "Athene's regulatory capital to reserves ratio is 11%, and our consolidated RBC ratio is 441%, illustrating how policyholders benefit from our aggregate capitalization."
But agents and advisors have been sharing the Nemeth article with each other on social media services.
What it means: The publication of the Nemeth article starts a new episode in the long-running series of debates featuring analysts who look at life and annuity issuers as if the issuers were banks, and shudder, and life and annuity issuer executives and regulators who make the case that life and annuity issuers are much different from banks.
Experienced life and annuity issuer solvency watchers argue that analysts who look at a life and annuity issuer as if it were a bank are demonstrating ignorance about how life and annuity issuers' finances work.
In 2011, for example, Joseph Torti III, who was then Rhode Island's superintendent of insurance and banking, testified at a House Financial Services Committee hearing that banks have to have big piles of capital to cope with "runs," or situations in which customers run into banks and pull cash out.
Life and annuity issuers use factors such as policy loan limits, surrender and withdrawal penalties, and other provisions and penalties to reduce or eliminate run risk, Torti said.
For a life and annuity issuer, Torti and other insurance solvency watchers have said, the main solvency concern is not a run but "asset-liability matching." Asset-liability matching is the art of having enough of the right assets available at the right time to handle the liabilities created by the products sold, such as life insurance claims that may arrive decades after a customer has purchased a policy or decisions to exercise annuity contract income options that may create streams of annuity income payments that will last for decades.
Life and annuity issuers have also argued that the kinds of reinsurance arrangements companies like Athene use usually leave the direct writers in physical control of the assets backing the reinsurance arrangements,
Nick Nemeth: Nemeth has a bachelor's degree in finance from Tulane.
He worked as an asset pricing analysis intern for Potomac Capital Management for one month in 2015 and as an intern analyzing debt for CVC Credit Partners for one month in 2015.
He started posting about economics and finance topics on TikTok in 2020 and now has about 47,000 folowers. He started his Substack feed in July 2025.
Transparency concerns: Larry J. Rybka, the chief executive officer of Valmark Financial Group, a life and annuity distributor, said in an email that he found the Nemeth article interesting.
Rybka emphasized that his company has its own screening process for life and annuity issuers, on top of what state insurance regulators and rating agencies do, and that the company excludes private equity-owned issuers from its approved list.
One concern is that rating agencies may be grading the alternative assets in the issuers' investment portfolios too leniently, and another is that states' own accounting rules for insurance companies let the companies value assets at the purchase value, rather than requiring the companies to "mark the assets to market," Rybka said.
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