American Equity Investment Life Holding Company (AEL) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $7.42 million, or $ 0.09 a share in the quarter, against a net profit of $97.31 million, or $1.19 a share in the last year period. On adjusted basis, net loss for the quarter stood at $4.72 million, or $0.05 a share compared with a net profit of $45.92 million, or $0.56 a share in the last year period.
Revenue during the quarter surged 396.25 percent to $630.06 million from $126.96 million in the previous year period. Net premium earned for the quarter jumped 52.74 percent or $4.40 million to $12.73 million.
Benefits, losses and expenses for the quarter were at $641.04 million, or 5,035.25 percent of premium earned from $21.75 million or 260.98 percent of premium earned in the last year period. Operating loss for the quarter was $10.98 million, compared with an operating income of $148.72 million in the previous year period.
Net investment income was at $463.58 million for the quarter, up 6.31 percent or $27.50 million from year-ago period. Meanwhile, income from fees and commission for the quarter increased by 25.54 percent or $9.70 million to $47.68 million. The company has recorded a gain on investments of $106.07 million in the quarter compared with a loss of $355.43 million for the previous year period.
Commenting on sales, John Matovina, chief executive officer and president, said: "Our pace of sales slowed in the quarter but we are still growing invested assets and policyholder funds under management. As we indicated in our second quarter commentary, we expected sales to moderate in the second half of this year following a very strong first six months. Sales by independent agents for American Equity Investment Life Insurance Company (American Equity Life) declined 26% sequentially with FIA sales down 15% and MYGA sales down 88%. Although formal FIA sales data for third quarter 2016 will not likely be released until later this month, our expectation is that the sequential decline in FIA sales by our independent agents was consistent with the overall market experience. MYGA sales by independent agents were 2.6% of total independent agent sales in the third quarter. That mix of FIA and MYGA sales by our independent agents is more in line with our historical experience than the first two quarters of this year."
Assets outpace liabilities growth
Total assets increased 18.50 percent or $8,719.80 million to $55,848.22 million on Sep. 30, 2016. On the other hand, total liabilities were at $53,035.36 million as on Sep. 30, 2016, up 17.91 percent or $8,056.85 million from year-ago.
Return on equity was negative at 0.26 percent in the quarter against a positive 4.53 percent in the last year period.
Investments move up
Investments stood at $45,811.33 million as on Sep. 30, 2016, up 19.32 percent or $7,419.04 million from year-ago. Meanwhile, yield on investments went down 12 basis points to 1.01 percent in the quarter.
Total debt was at $735.20 million as on Sep. 30, 2016, up 13.74 percent or $88.80 million from year-ago. Shareholders equity stood at $2,812.86 million as on Sep. 30, 2016, up 30.84 percent or $662.95 million from year-ago. As a result, debt to equity ratio went down 4 basis points to 0.26 percent in the quarter from 0.30 percent in the last year period.
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