Retirement services company Athene has announced that its net income in the fourth quarter of 2020 more than doubled to $1.07 billion on the back of strong organic growth.
Income was up 147% on the $432 million reported in Q4 2019, and 71% on the $622 million in Q3 2020.
However, over the full-year income dropped by 32% to $1.45 billion, owing to the $1.07 billion loss that Athene recorded in the first quarter of the year.
The increase from the prior year quarter was attributed to higher adjusted operating income, favourable changes in the fair value of reinsurance assets due to tightening credit spreads and a favourable change in the provision for credit losses.
These factors were partially offset by an unfavourable change in the net fair value of fixed indexed annuity derivatives, primarily due to a lower discount rate resulting from declining interest rates.
In Q4 2020, Athene generated gross organic inflows of $9.3 billion, representing an increase of 155% year-over-year and 25% quarter-over-quarter. And for the full year, Athene generated record annual gross organic inflows of $27.5 billion, representing an increase of 52% compared to full year 2019.
Organic inflow activity reflected continued strength across Athene’s diversified funding channels including retail, flow reinsurance, pension risk transfer, and funding agreements. Importantly, organic inflows for the fourth quarter and full year 2020 were underwritten to strong returns despite the historically low interest rate environment.
Specifically, flow reinsurance inflows decreased 53% year-over-year to $559 million in Q4 but increased 52% to $6.0 billion over the course of the year.
“Our robust fourth quarter results capped a year of record growth in which we generated $56 billion of gross inflows across our diversified funding channels, underwritten to very attractive returns above our historical average,” said Jim Belardi, CEO of Athene.
“A primary driver of this activity was record net organic growth of 27% for the year. Despite the pandemic, our focus and discipline to execute Athene’s business strategy never wavered – originate low cost, persistent funding and employ alpha-generating investing capabilities to drive compelling net spread.”
Belardi continued, “Our strong financial results demonstrate both the resilience of our model and our ability to drive consistent excellence even through periods of volatility. The significant profitable growth we generated in 2020 will increase our earnings power in 2021 and beyond.”
“Importantly, we continue to see an abundance of organic and inorganic opportunities in front of us. As one of the best capitalized businesses in the industry, we will use our position of strength to build upon our compelling track record of delivering long-term shareholder value.”
