Retirement services firm Athene has posted a $432 million net income for the fourth quarter of 2019, up from a $104 million net loss incurred in the prior year quarter.
This increase was driven by higher adjusted operating income, as well as a favorable net change in fixed indexed annuity derivatives including the impact of favorable equity market performance and discount rates.
Net income for the full year was $2.1 billion against $1 billion across 2018.
Athene says this increase from the prior year was primarily driven by a favorable change in the fair value of reinsurance assets due to a decrease in US Treasury rates and tightening credit spreads.
Q4’s adjusted operating income was a quarterly record at $389 million, compared to $240 million in the prior year quarter.
The increase from the prior year quarter was primarily driven by higher net investment earnings due to an increase in net invested assets, stronger alternative investment performance and higher bond call income, as well as a lower cost of funds attributable to favorable rider reserves and deferred acquisition costs amortisation due to strong equity market performance.
“Athene’s robust fourth quarter results capped a year of record adjusted operating earnings and record organic growth, which was profitably underwritten to very attractive returns above our historical average. Our strong operating performance culminated in 18% year-over-year growth in adjusted book value, which now exceeds $54 per share,” said Athene Chief Executive Officer Jim Belardi.
“Over the past year, we undertook several important initiatives that will create shareholder value in 2020 and beyond. First, we formed a multi-billion dollar strategic capital solution, ACRA, which greatly enhances our capital flexibility and positions us as a solutions provider of choice amid a restructuring industry.”
“Second, we opportunistically deployed over $900 million of capital toward share repurchases, securing high-teens returns with limited execution risk. And finally, we structured a pending strategic transaction with our partners at Apollo to eliminate our multi-class share structure, which will serve to broaden Athene’s index eligibility and investor appeal.
“Overall, we see an abundance of opportunity in front of us and we will continue to judiciously allocate capital in order to build long-term shareholder value.”
