Athene Holding Ltd. has reported a net loss of $1.1 billion for the first-quarter of 2020, primarily as a result of a decline in the fair value of reinsurance assets due to COVID-19-induced widening credit spreads.
A net loss of $1.1 billion compares with net income of $708 million recorded in the first-quarter of 2019, while adjusted operating income declined to $108 million, year-on-year.
Despite significant financial market volatility and fading equity markets as a result of the impacts of the COVID-19 pandemic, the firm’s Chief Executive Officer (CEO), Jim Belardi, has said that this will have little impact on Athene’s long-term earnings.
“Our actions over the past year have allowed us to operate from a position of strength. While the COVID-19 pandemic caused mark-to-market volatility in Athene’s financials during the quarter, we believe these impacts will be transitory and have little impact on Athene’s long-term earnings trajectory.
“I’m incredibly proud of our team for continuing to execute our differentiated strategy as we continue to serve policyholders at a high standard and underwrite strong levels of new business,” said Belardi.
Athene’s Q1 2020 results also reveal that its capital position remains strong, with total deployable capital of $7.4 billion, including excess capital of $2.7 billion, $2.3 billion of untapped debt capacity with no upcoming AHL maturities until 2028, and $2.4 billion of undrawn third-party commitments to the company’s sidecar vehicle, ACRA.
“We are armed with one of the best capitalized balance sheets in the industry, and when combined with resources in our sidecar capital vehicle, ACRA, we have more than $7 billion of deployable capital which can be used to support nearly $90 billion of opportunistic growth.
“We have record levels of liquidity, a proven ability to take advantage of dislocation, and I’m confident that we will emerge from this crisis even stronger than before,” said Belardi.
Total cash and cash equivalents stand at $5.4 billion, and Athene’s liquid bond portfolio stands at roughly $33 billion. As of April 30th, 2020, the company had total available liquidity of $6.3 billion.
In addition, Athene deployed over $500 million of capital in Q1 2020, including $270 million for organic growth, and $319 million of share repurchases at very attractive returns.
