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What changed in Athene Holding Ltd.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Athene Holding Ltd.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+927 added−968 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-27)

Top changes in Athene Holding Ltd.'s 2024 10-K

927 paragraphs added · 968 removed · 654 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

172 edited+48 added−61 removed319 unchanged
Biggest changeFor example: (1) the NAIC has adopted amendments to the anti-rebating provisions of the NAIC’s Unfair Trade Practices Act to address new technologies that are being deployed to add value to existing insurance products and services; (2) the NAIC has adopted guiding principles related to artificial intelligence, its use in the insurance sector, and its impact on consumer protection and privacy, marketplace dynamics and the state-based insurance regulatory framework; and (3) the NAIC’s Privacy Protections (H) Working Group (PPWG) is developing a new Insurance Consumer Privacy Protections Model Law (Model 674) to replace the NAIC’s Insurance Information and Privacy Protection Model Act and the NAIC’s Privacy of Consumer Financial and Health Information Regulation.
Biggest changeFor example, the NAIC has adopted amendments to the anti-rebating provisions of the NAIC’s Unfair Trade Practices Act to address new technologies that are being deployed to add value to existing insurance products and services.
Broker-dealers Our securities operations, principally conducted by our limited purpose SEC-registered broker-dealer, Athene Securities, LLC (Athene Securities), are subject to federal and state securities and related laws, and are regulated principally by the SEC, state securities authorities and the Financial Industry Regulatory Authority (FINRA). Athene Securities does not hold customer funds or safekeep customer securities.
Broker-dealers Our securities operations, principally conducted by our limited purpose SEC-registered broker-dealer, Athene Securities, LLC (Athene Securities), are subject to federal and state securities and related laws, and are regulated principally by the SEC, the Financial Industry Regulatory Authority (FINRA), and state securities authorities. Athene Securities does not hold customer funds or safekeep customer securities.
Belardi also owns profits interest in ISG and in connection with such interest receives a specified percentage of other fee streams earned by Apollo from us, including sub-allocation fees. Mr. Belardi is also a director of the general partner of ISG. Accordingly, Mr.
Belardi also owns a profits interest in ISG and in connection with such interest receives a specified percentage of other fee streams earned by Apollo from us, including sub-allocation fees. Mr. Belardi is also a director of the general partner of ISG. Accordingly, Mr.
Even if our assumptions and valuations are accurate at the time that they are made, the market value of these investments could subsequently decline, which could materially and adversely impact our financial condition, results of operations or cash flows. • Hedging Strategies – We use, and may in the future use, derivatives and reinsurance contracts to hedge risks related to current or future changes in the fair value of our assets and liabilities; current or future changes in cash flows; changes in interest rates, equity markets and credit spreads; the occurrence of credit defaults; currency fluctuations; and changes in mortality and longevity.
Even if our assumptions and valuations are accurate at the time that they are made, the market value of these investments could subsequently decline, which could materially and adversely impact our financial condition, results of operations or cash flows. • Hedging Strategies – We use, and may in the future use, derivatives and reinsurance contracts to hedge risks related to current or future changes in the fair value of our assets and liabilities; current or future changes in cash flows; changes in interest rates, equity markets and credit spreads; the occurrence of credit defaults; foreign currency fluctuations; and changes in mortality and longevity.
Business Under the Bermuda Insurance Act, stockholder controller ownership is defined as follows: Actual Stockholder Controller Voting Power Defined Stockholder Controller Voting Power 10% or more but less than 20% 10% 20% or more but less than 33% 20% 33% or more but less than 50% 33% 50% or more 50% Where the shares of a registered insurer, or the shares of its parent company, are traded on a recognized stock exchange, and such stockholder becomes a 10%, 20%, 33%, or 50% stockholder controller of the insurer, that stockholder shall, within 45 days, notify the BMA in writing that such stockholder has become, or as a result of a disposition ceased to be, a controller of any such category.
Under the Bermuda Insurance Act, stockholder controller ownership is defined as follows: Actual Stockholder Controller Voting Power Defined Stockholder Controller Voting Power 10% or more but less than 20% 10% 20% or more but less than 33% 20% 33% or more but less than 50% 33% 50% or more 50% Where the shares of a registered insurer, or the shares of its parent company, are traded on a recognized stock exchange, and such stockholder becomes a 10%, 20%, 33%, or 50% stockholder controller of the insurer, that stockholder shall, within 45 days, notify the BMA in writing that such stockholder has become, or as a result of a disposition ceased to be, a controller of any such category.
Business Innovation and Technology There has been increased scrutiny, including from state insurance regulators, regarding the use of “big data” techniques, including artificial intelligence, machine learning and automated decision-making. The NAIC established the Innovation, Cybersecurity and Technology (H) Committee ((H) Committee) to address the insurance implications of cybersecurity and emerging technologies, including big data, artificial intelligence and e-commerce.
Business Innovation and Technology There has been increased scrutiny, including from state insurance regulators, regarding the use of “big data” techniques, including artificial intelligence (AI), machine learning and automated decision-making. The NAIC established the Innovation, Cybersecurity and Technology (H) Committee ((H) Committee) to address the insurance implications of cybersecurity and emerging technologies, including big data, artificial intelligence and e-commerce.
Risks Relating to Market and Credit Risk Our investments are subject to market and credit risks that could diminish their value and these risks could be greater during periods of extreme volatility or disruption in the financial and credit markets, which could adversely impact our business, financial condition, results of operations, liquidity and cash flows.
Risk Factors Risks Relating to Market and Credit Risk Our investments are subject to market and credit risks that could diminish their value and these risks could be greater during periods of extreme volatility or disruption in the financial and credit markets, which could adversely impact our business, financial condition, results of operations, liquidity and cash flows.
In addition, US federal, state, local and non-US income tax rules are constantly under review by persons involved in the legislative process, the IRS, the US Department of the Treasury, and state, local and non-US legislative and regulatory bodies, which frequently results in revised interpretations of established concepts, statutory changes, revisions to regulations and other modifications and interpretations.
In addition, US federal, state, local and non-US tax rules are constantly under review by persons involved in the legislative process, the IRS, the US Department of the Treasury, and state, local and non-US legislative and regulatory bodies, which frequently results in revised interpretations of established concepts, statutory changes, revisions to regulations and other modifications and interpretations.
UK Corporation Tax Certain of our subsidiaries are treated as residents in the United Kingdom for UK tax purposes due to being centrally managed and controlled in the UK, and will each be treated as a fiscally opaque company from a UK tax perspective (collectively, UK Resident Companies).
Business UK Corporation Tax Certain of our subsidiaries are treated as residents in the United Kingdom for UK tax purposes due to being centrally managed and controlled in the UK, and will each be treated as a fiscally opaque company from a UK tax perspective (collectively, UK Resident Companies).
The tax treatment of our structure and transactions undertaken by us depends in some instances on determinations of fact and interpretations of complex provisions of US federal, state, local and non-US income tax law for which no clear precedent or authority may be available.
The tax treatment of our structure and transactions undertaken by us depends in some instances on determinations of fact and interpretations of complex provisions of US federal, state, local and non-US tax law for which no clear precedent or authority may be available.
Business Similarly, in the event of the impairment or insolvency of one of our US insurance subsidiaries, the applicable Commissioner will be authorized and directed to commence delinquency proceedings for the purpose of liquidating, rehabilitating, reorganizing or conserving the applicable US insurance subsidiary pursuant to applicable state insurance laws and regulations.
Similarly, in the event of the impairment or insolvency of one of our US insurance subsidiaries, the applicable Commissioner will be authorized and directed to commence delinquency proceedings for the purpose of liquidating, rehabilitating, reorganizing or conserving the applicable US insurance subsidiary pursuant to applicable state insurance laws and regulations.
Many of our competitors are large and well-established and some have greater breadth of distribution; offer a broader range of products, services or features; assume a greater level of risk; or have higher financial strength, claims-paying or credit ratings than we do.
Risk Factors Many of our competitors are large and well-established and some have greater breadth of distribution; offer a broader range of products, services or features; assume a greater level of risk; or have higher financial strength, claims-paying or credit ratings than we do.
In 2024, AHL expects to no longer be a resident of the UK for tax purposes on the basis that it is not incorporated in the UK and its central management and control is no longer exercised from the UK.
As from 2024, AHL expects to no longer be a resident of the UK for tax purposes on the basis that it is not incorporated in the UK and its central management and control is no longer exercised from the UK.
In addition, tax authorities may disagree with our BEAT calculations, or the interpretations on which those calculations are based, and assess additional taxes, interest and penalties. We will establish our tax provision in accordance with US GAAP.
In addition, tax authorities may disagree with our BEAT calculations, or the interpretations on which those calculations are based, and assess additional taxes, interest and penalties. We establish our tax provision in accordance with US GAAP.
We have significant concentrations of real estate investments and collateral underlying investments linked to real estate in areas of the United States prone to catastrophe, including California, sections of the northeastern US, the South Atlantic states and the Gulf Coast.
We have significant concentrations of real estate investments and collateral underlying investments linked to real estate in areas of the US prone to catastrophe, including California, sections of the northeastern US, the South Atlantic states and the Gulf Coast.
The IID has adopted the GCC and LST amendments, which now are applicable to us. On February 6, 2024, the IID identified AGM as meeting the criteria as an IAIG and further identified AHL as the Head of the IAIG.
The IID has adopted the GCC and LST amendments, which are applicable to us. On February 6, 2024, the IID identified AGM as meeting the criteria as an IAIG and further identified AHL as the Head of the IAIG.
The Fee Agreement gives our Independent Directors complete discretion, while acting in good faith, as to whether to determine if an AHL Cause event has occurred with respect to any ACRA System IMA with the applicable Apollo subsidiary, and therefore our Independent Directors are under no obligation to make, and accordingly may exercise their discretion never to make, such a determination.
Risk Factors The Fee Agreement gives our Independent Directors complete discretion, while acting in good faith, as to whether to determine if an AHL Cause event has occurred with respect to any ACRA System IMA with the applicable Apollo subsidiary, and therefore our Independent Directors are under no obligation to make, and accordingly may exercise their discretion never to make, such a determination.
Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain legal actions between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject to uncertainty.
Risk Factors Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain legal actions between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject to uncertainty.
Under the provisions of the ESA, every Bermuda registered entity, other than an entity which is resident for tax purposes in certain jurisdictions outside of Bermuda, that carries on as a business in any one or more “relevant activities” referred to in the ESA must satisfy economic substance requirements by maintaining a substantial economic presence in Bermuda.
Economic Substance Act 2018 (ESA) Under the provisions of the ESA, every Bermuda registered entity, other than an entity which is resident for tax purposes in certain jurisdictions outside of Bermuda, that carries on as a business in any one or more “relevant activities” referred to in the ESA must satisfy economic substance requirements by maintaining a substantial economic presence in Bermuda.
Any dividends received by our UK Resident Companies should be exempt from UK corporation tax and any gains arising to our UK Resident Companies on a disposal of a subsidiary (including any potential future subsidiaries and any disposal or deemed disposal occurring as a result of Redomicile) should be exempt from UK corporation tax on chargeable gains as a result of the application of the UK substantial shareholding exemption set out in Schedule 7AC of the Taxation of Chargeable Gains Act 1992.
Any dividends received by our UK Resident Companies should be exempt from UK corporation tax and any gains arising to our UK Resident Companies on a disposal or deemed disposal of a subsidiary (including any potential future subsidiaries) should be exempt from UK corporation tax on chargeable gains as a result of the application of the UK substantial shareholding exemption set out in Schedule 7AC of the Taxation of Chargeable Gains Act 1992.
Risk Factors Additionally, past or future misconduct by agents that distribute our subsidiaries’ products or employees of our vendors could result in violations of law by us, regulatory sanctions and/or serious reputational or financial harm and the precautions we take to prevent and detect this activity may not be effective in all cases.
Additionally, past or future misconduct by agents that distribute our subsidiaries’ products or employees of our vendors could result in violations of law by us, regulatory sanctions and/or serious reputational or financial harm and the precautions we take to prevent and detect this activity may not be effective in all cases.
The GDPR imposes onerous and comprehensive privacy, data protection, and data security obligations on controllers and provides certain rights for data subjects, including, among others: (i) accountability and transparency requirements, which require controllers to demonstrate and record compliance with the GDPR and to provide more detailed information to data subjects regarding processing of their personal data; (ii) specific requirements for obtaining valid consent; (iii) obligations to consider data protection when any new products or services are developed and designed to limit the amount of personal data processed; (iv) obligations to comply with data protection rights of data subjects including a right of access to and rectification of, personal data, a right of restriction of processing or to object to processing of personal data and a right to ask for a copy of personal data to be provided to a third party in a useable format and a right of erasure of their personal data in certain circumstances; and (v) an obligation to report personal data breaches to: (A) the data supervisory authority without undue delay (and no later than 72 hours after discovering the personal data breach, where feasible); and (B) affected data subjects, where the personal data breach is likely to result in a high risk to their rights and freedoms. 35 Table of Contents Item 1.
The GDPR imposes onerous and comprehensive privacy, data protection, and data security obligations on controllers and provides certain rights for data subjects, including, among others: (i) accountability and transparency requirements, which require controllers to demonstrate and record compliance with the GDPR and to provide more detailed information to data subjects regarding processing of their personal data; (ii) specific requirements for obtaining valid consent; (iii) obligations to consider data protection when any new products or services are developed and designed to limit the amount of personal data processed; (iv) obligations to comply with data protection rights of data subjects including a right of access to and rectification of, personal data, a right of restriction of processing or to object to processing of personal data and a right to ask for a copy of personal data to be provided to a third party in a useable format and a right of erasure of their personal data in certain circumstances; and (v) an obligation to report personal data breaches to: (A) the data supervisory authority without undue delay (and no later than 72 hours after discovering the personal data breach, where feasible); and (B) affected data subjects, where the personal data breach is likely to result in a high risk to their rights and freedoms.
Risk Factors We have made investments in collective investment vehicles managed by Apollo affiliates, including seed investments in new investment vehicles or investment strategies offered by Apollo which have limited track records, as well as junior and subordinated tranches of structured investment vehicles which may assist Apollo in meeting certain regulatory requirements applicable to Apollo as the sponsor of such vehicles.
We have made investments in collective investment vehicles managed by Apollo affiliates, including seed investments in new investment vehicles or investment strategies offered by Apollo which have limited track records, as well as junior and subordinated tranches of structured investment vehicles which may assist Apollo in meeting certain regulatory requirements applicable to Apollo as the sponsor of such vehicles.
Given the large or indeterminate amounts sometimes sought, and the inherent unpredictability of litigation and enforcement actions, it is possible that an unfavorable resolution of one or more matters could have a material and adverse effect on our business, financial condition, results of operations and cash flows. See Item 3.
Given the large or indeterminate amounts sometimes sought, and the inherent unpredictability of litigation and enforcement actions, it is possible that an unfavorable resolution of one or more matters could have a material and adverse effect on our business, financial condition, results of operations and cash flows. See
Risk Factors A financial strength rating downgrade, potential downgrade or any other negative action by a rating agency could make our product offerings less attractive, inhibit our ability to acquire future business through acquisitions or reinsurance and increase our cost of capital, which could have a material adverse effect on our business.
A financial strength rating downgrade, potential downgrade or any other negative action by a rating agency could make our product offerings less attractive, inhibit our ability to acquire future business through acquisitions or reinsurance and increase our cost of capital, which could have a material adverse effect on our business.
Although management believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities, the tax authorities could challenge our interpretation resulting in additional tax liability or adjustment to our income tax provision that could increase our effective tax rate and/or have other unforeseen tax consequences.
Although management believes its application of current laws, regulations and treaties to be correct and sustainable upon examination by the tax authorities, the tax authorities could challenge our interpretation resulting in additional tax liability or adjustment to our tax provision that could increase our effective tax rate or have other unforeseen adverse tax consequences.
Our competitors may also have lower return on capital requirements than we do which may allow them to price products, reinsurance arrangements or acquisitions more competitively. In addition, our competitors, including new market entrants may engage in aggressive, non-economic pricing in an effort to gain market share.
Our competitors may also have lower return on capital targets than we do which may allow them to price products, reinsurance arrangements or acquisitions more competitively. In addition, our competitors, including new market entrants may engage in aggressive, non-economic pricing in an effort to gain market share.
Many of our invested assets are relatively illiquid and we may fail to realize profits from these assets for a considerable period of time, or lose some or all of the principal amount we invest in these assets if we are required to sell our invested assets at a loss at inopportune times.
Risk Factors Many of our invested assets are relatively illiquid and we may fail to realize profits from these assets for a considerable period of time, or lose some or all of the principal amount we invest in these assets if we are required to sell our invested assets at a loss at inopportune times.
Risks Relating to Insurance and Other Regulatory Matters Our industry is highly regulated and we are subject to significant legal restrictions and obligations, and these restrictions and obligations may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and prospects.
Risk Factors Risks Relating to Insurance and Other Regulatory Matters Our industry is highly regulated and we are subject to significant legal restrictions and obligations, and these restrictions and obligations may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and prospects.
SEC and State Fiduciary Standards The SEC adopted a rule under the Exchange Act that establishes a standard of conduct for broker-dealers and associated persons of a broker-dealer when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities.
SEC and State Fiduciary Standards The SEC adopted a rule in 2020 under the Exchange Act that establishes a standard of conduct for broker-dealers and associated persons of a broker-dealer when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities.
Risk Factors We rely on our investment management agreements with Apollo for the management of our investment portfolio. Apollo may terminate these arrangements at any time, and there are limitations on our ability to terminate investment management agreements covering assets backing reserves and surplus in ACRA, which may adversely affect our investment results.
We rely on our investment management agreements with Apollo for the management of our investment portfolio. Apollo may terminate these arrangements at any time, and there are limitations on our ability to terminate investment management agreements covering assets backing reserves and surplus in ACRA, which may adversely affect our investment results.
Non-US, state and local governments may enact legislation that could result in changes to non-US, state and local tax law and regulations, which may have a material impact on our financial position and results of operations. In particular, both the level and basis of taxation may change.
Non-US, state and local governments may enact legislation that could result in changes to non-US, state and local tax law and regulations, which may have a material impact on our financial position and results of operations. In particular, both the rate and basis of taxation may change.
Certain of our subsidiaries treated as resident in the UK for UK tax purposes (UK Resident Companies) expect to qualify for the benefits of the income tax treaty between the US and the UK (UK Treaty) by reason of being subsidiaries of AGM or by reason of satisfying an ownership and base erosion test.
In addition, certain of our subsidiaries are treated as resident in the UK for UK tax purposes (UK Resident Companies) and expect to qualify for the benefits of the income tax treaty between the US and the UK (UK Treaty) by reason of being subsidiaries of AGM or by reason of satisfying an ownership and base erosion test.
The NAIC also adopted an interim change to the life RBC formula for year-end 2023 and 2024 reporting to increase the RBC base factor for residual tranches of structured securities, and will further consider whether to increase or decrease the base factor in 2024.
The NAIC also adopted an interim change to the life RBC formula for year-end 2023 and 2024 reporting to increase the RBC base factor for residual tranches of structured securities, and will further consider whether to increase or decrease the base factor in future years.
As noted below (See The recently enacted Bermuda corporate income tax, or other changes in Bermuda tax laws, may negatively affect our earnings and results from operations ), Bermuda in particular has enacted the Bermuda CIT in response to the Pillar Two initiative.
As noted below (see – The recently enacted Bermuda Corporate Income Tax Act 2023, or other changes in Bermuda tax laws, may negatively affect our earnings and results from operations ), Bermuda in particular has enacted the Bermuda CIT in response to the Pillar Two initiative.
The ultimate implementation of the BEPS project may also increase the complexity and the burden and costs of compliance and advice relating to our ability to efficiently fund, hold and realize investments, and could necessitate or increase the probability of some restructuring of our group or business operations.
The ultimate implementation of the BEPS project may also increase the complexity and the burden and costs of compliance and advice relating to our efforts to efficiently fund, hold and realize investments, and could necessitate or increase the probability of some restructuring of our group or business operations.
There is US income tax risk associated with reinsurance between US insurance companies and their Bermuda affiliates.
Risk Factors There is US income tax risk associated with reinsurance between US insurance companies and their Bermuda affiliates.
Risk Factors In addition, licensing regulations differ as to products and jurisdictions and may be subject to interpretation as to whether certain licenses are required with respect to the manner in which we may sell or service some of our products in certain jurisdictions.
In addition, licensing regulations differ as to products and jurisdictions and may be subject to interpretation as to whether certain licenses are required with respect to the manner in which we may sell or service some of our products in certain jurisdictions.
On September 5, 2023, the North American Securities Administrators Association (NASAA), the association of state securities administrators in the United States and Canada, proposed revisions to its Model Rule on Dishonest and Unethical Business Practices of Broker-Dealers and Agents; these revisions purport to incorporate the standards of Regulation Best Interest but in fact would expand those requirements in ways that would increase costs to broker-dealers.
On September 5, 2023, the North American Securities Administrators Association (NASAA), the association of state securities administrators in the US and Canada, proposed revisions to its Model Rule on Dishonest and Unethical Business Practices of Broker-Dealers and Agents; these revisions purport to incorporate the standards of Regulation Best Interest but in fact would expand those requirements in ways that would increase costs to broker-dealers.
The SEC and other governmental agencies and self-regulatory organizations, as well as state securities commissions in the United States, have the power to conduct administrative proceedings that can result in censure, penalties and fines, disgorgement of profits, restitution to customers, cease-and-desist orders or suspension, termination or limitation of the activities of the regulated entity or its employees.
The SEC and other governmental agencies and self-regulatory organizations, as well as state securities commissions in the US, have the power to conduct administrative proceedings that can result in censure; penalties and fines; disgorgement of profits; restitution to customers; cease-and-desist orders; or suspension, termination or limitation of the activities of the regulated entity or its employees.
Commencing on January 1, 2025, the Bermuda CIT generally will impose a 15% corporate income tax on entities that are tax residents in Bermuda or have a Bermuda permanent establishment and are members of multi-national groups with consolidated revenues in excess of €750 million for at least two of the last four fiscal years.
Commencing on January 1, 2025, the Bermuda CIT generally imposes a 15% corporate income tax on entities that are tax residents in Bermuda or have a Bermuda permanent establishment and are members of multi-national groups with consolidated revenues in excess of €750 million for at least two of the last four fiscal years.
Financial markets have been subject to inflationary pressures, and continued rising inflation may adversely impact our business and results of operations. Financial markets have been subject to inflationary pressures, and we cannot predict the extent to which rising inflation may be transitory.
Risk Factors Financial markets have been subject to inflationary pressures, and continued rising inflation may adversely impact our business and results of operations. Financial markets have been subject to inflationary pressures, and we cannot predict the extent to which rising inflation may be transitory.
The definition of stockholder controller is set out in the Bermuda Insurance Act but generally refers to (1) a person who holds 10% or more of the shares carrying rights to vote at a stockholders’ meeting of the registered insurer or its parent company, (2) a person who is entitled to exercise 10% or more of the voting power at any stockholders’ meeting of such registered insurer or its parent company or (3) a person who is able to exercise significant influence over the management of the registered insurer or its parent company by virtue of its shareholding or its entitlement to exercise, or control the exercise of, the voting power at any stockholders’ meeting. 39 Table of Contents Item 1.
The definition of stockholder controller is set out in the Bermuda Insurance Act but generally refers to (1) a person who holds 10% or more of the shares carrying rights to vote at a stockholders’ meeting of the registered insurer or its parent company, (2) a person who is entitled to exercise 10% or more of the voting power at any stockholders’ meeting of such registered insurer or its parent company or (3) a person who is able to exercise significant influence over the management of the registered insurer or its parent company by virtue of its shareholding or its entitlement to exercise, or control the exercise of, the voting power at any stockholders’ meeting.
Risk Factors The historical investment portfolio performance of Apollo should not be considered as indicative of the future results of our investment portfolio, or our future results or our ability to declare and pay dividends on our preferred stock.
The historical investment portfolio performance of Apollo should not be considered as indicative of the future results of our investment portfolio, or our future results or our ability to declare and pay dividends on our preferred stock.
The assumptions and estimates required for these calculations involve judgment and by their nature are imprecise and subject to changes and revisions over time. Accordingly, our financial condition and results of operations may be adversely affected if actual results differ from assumptions or if assumptions are materially revised.
The estimates and assumptions required for these calculations involve judgment and by nature are imprecise and subject to changes and revisions over time. Accordingly, our financial condition and results of operations may be adversely affected if actual results differ from the estimates we use or if assumptions are materially revised.
Risk Factors The Dodd-Frank Act made sweeping changes to the regulation of financial services entities, products and markets. Historically, the federal government had not directly regulated the insurance business.
The Dodd-Frank Act made sweeping changes to the regulation of financial services entities, products and markets. Historically, the federal government had not directly regulated the insurance business.
Our investments and derivative financial instruments are subject to risks of credit defaults and changes in market values. Periods of macroeconomic weakness or recession, heightened volatility or disruption in the financial and credit markets could increase these risks, potentially resulting in other-than-temporary impairment of assets in our investment portfolio.
Our investments and derivative financial instruments are subject to risks of credit defaults and changes in market values. Periods of macroeconomic weakness or recession, heightened volatility or disruption in the financial and credit markets could increase these risks, potentially resulting in impairment of assets in our investment portfolio.
All of these risks are also applicable where we rely on third-party suppliers to provide products and services to us and/or our customers.
Risk Factors All of these risks are also applicable where we rely on third-party suppliers to provide products and services to us and/or our customers.
We are subject to significant operating and financial restrictions imposed by our credit agreements and certain letters of credit, and we are also subject to certain operating restrictions imposed by the indenture to which we are a party.
We are subject to significant operating and financial restrictions imposed by our credit agreements and certain letters of credit, and we are also subject to certain operating restrictions imposed by the indentures to which we are a party.
Governmental authorities and standard setters in the US and worldwide (including the IAIS) have become increasingly interested in potential risks posed by the insurance industry as a whole, and to commercial and financial activities and systems in general, as indicated by the development of the global insurance capital standard by the IAIS to be applicable to IAIGs, as well as the US NAIC’s adoption of the GCC and LST.
Governmental authorities and standard setters in the US and worldwide (including the IAIS) have become increasingly interested in potential risks posed by the insurance industry as a whole, and to commercial and financial activities and systems in general, as indicated by the development of the ICS by the IAIS to be applicable to IAIGs and the Global Monitoring Exercise, as well as the US NAIC’s adoption of the GCC and LST.
As such, we cannot assure you that future legislative, administrative or judicial developments will not result in an increase in the amount of US or non-US tax payable by us, our subsidiaries or investors in our shares.
As such, we cannot assure you that future legislative, administrative or judicial developments will not result in an increase in the amount of US (including state or local) or non-US tax payable by us, our subsidiaries or investors in our shares.
If any of these TPAs or their employees are found to have made material misrepresentations to our policyholders, violated applicable insurance, privacy or other laws and regulations or otherwise engaged in misconduct, we could be held liable for their actions and be subject to regulatory scrutiny, which could adversely affect our reputation, business prospects, financial condition, results of operations and cash flows. 44 Table of Contents Item 1A.
If any of these TPAs or their employees are found to have made material misrepresentations to our policyholders, violated applicable insurance, privacy or other laws and regulations or otherwise engaged in misconduct, we could be held liable for their actions and be subject to regulatory scrutiny, which could adversely affect our reputation, business prospects, financial condition, results of operations and cash flows.
Some of the factors influencing these requirements, particularly factors such as changes in equity market levels, the value of certain derivative instruments that do not receive hedge accounting, the value and credit ratings of certain fixed-income and equity securities in our investment portfolio, interest rate changes, changes to the applicable RBC formulas and the interpretation of the NAIC’s instructions with respect to RBC calculation methodologies, are out of our control. 55 Table of Contents Item 1A.
Some of the factors influencing these requirements, particularly factors such as changes in equity market levels, the value of certain derivative instruments that do not receive hedge accounting, the value and credit ratings of certain fixed-income and equity securities in our investment portfolio, interest rate changes, changes to the applicable RBC formulas and the interpretation of the NAIC’s instructions with respect to RBC calculation methodologies, are out of our control.
Any entity that must satisfy economic substance requirements but fails to do so could face automatic disclosure to competent authorities in the US and EU of the information filed by the entity with the Bermuda Registrar of Companies in connection with the economic substance requirements and may also face financial penalties, restriction or regulation of its business activities and/or removal from the list of registered entities in Bermuda.
Any entity that must satisfy economic substance requirements but fails to do so could face automatic disclosure to competent authorities in the US and EU of the information filed by the entity with the Bermuda Registrar of Companies in connection with the economic substance requirements and may also face financial penalties, restriction or regulation of its business activities and/or removal from the list of registered entities in Bermuda. 40 Table of Contents Item 1.
As such, the GDPR applies to us to the extent we are established in an EU Member State or the UK, we are processing personal data in the context of an establishment in an EU Member State or the UK or we meet the requirements of either the targeting test or the monitoring test.
Business GDPR applies to us to the extent we are established in an EU Member State or the UK, we are processing personal data in the context of an establishment in an EU Member State or the UK or we meet the requirements of either the targeting test or the monitoring test.
Although we have historically not paid material amounts in connection with these assessments, we cannot accurately predict the magnitude of such amounts in the future, or accurately predict which past or future insolvencies of competitors could lead to such assessments.
Although we have historically not paid material amounts in connection with these assessments, we cannot accurately predict the magnitude of such amounts in the future, or accurately predict which past or future insolvencies of other insurers could lead to such assessments.
In addition to the specific restrictions described above, AHL’s subsidiaries, as members of its insurance holding company system, are subject to various statutory and regulatory restrictions on their ability to pay dividends to AHL, as further described in Item 1. Business–Regulation–Regulation of an Insurance Group–Insurance Holding Company Regulation .
In addition to the specific restrictions described above, AHL’s subsidiaries, as members of its insurance holding company system, are subject to various statutory and regulatory restrictions on their ability to pay dividends to AHL, as further described in Item 1. Business–Regulation–Regulation of an Insurance Group–Insurance Holding Company Regulation . 60 Table of Contents Item 1A.
Business In addition, the EU GDPR prohibits the international transfer of personal data from the EEA to the United States and other countries that the European Commission does not recognize as having ‘adequate’ data protection laws unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data.
In addition, the EU GDPR prohibits the international transfer of personal data from the EEA to the US and other countries that the European Commission does not recognize as having ‘adequate’ data protection laws unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data.
Athene Securities is the principal underwriter for the RILA and PPVA products that we offer, and has FINRA permissions to retail the PPVA product. Athene Securities previously served as the principal underwriter of a block of variable contracts that were closed to new investors in 2002 and issued by a predecessor of AAIA.
Athene Securities is the principal underwriter for the RILA and PPVA products that we offer, and has FINRA permissions to retail the PPVA product. Athene Securities currently serves as the principal underwriter of a block of variable contracts that were closed to new investors in 2002 and issued by a predecessor of AAIA.
In December 2023, the (H) Committee adopted the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers (AI Bulletin), which outlines how insurance regulators should govern the development, acquisition and use of artificial intelligence technologies, as well as the types of information that regulators may request during an investigation or examination of an insurer in relation to artificial intelligence systems.
In December 2023, the (H) Committee adopted the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers (AI Bulletin), which outlines how insurance regulators should govern the development, acquisition and use of artificial intelligence technologies, as well as the types of information that regulators may request during an investigation or examination of an insurer in relation to artificial intelligence systems, which has already started to be adopted by the states.
Furthermore, certain members of our board of directors also serve on the board of directors of AGM or ISG or are employees of Apollo or its affiliates, which could also lead to potential conflicts of interest. See Item 13. Certain Relationships and Related Transactions, and Director Independence . 53 Table of Contents Item 1A.
Furthermore, certain members of our board of directors also serve on the board of directors of AGM or ISG or are employees of Apollo or its affiliates, which could also lead to potential conflicts of interest. See Item 13. Certain Relationships and Related Transactions, and Director Independence .
Undertaking initiatives to address ESG practices, including those related to human capital management such as talent attraction and development, DEI and employee health and safety, could increase our cost of doing business and actual or perceived failure to adequately address ESG expectations of our various stakeholders could lead to a tarnished reputation and loss of customers.
Undertaking initiatives to address ESG practices, including those related to human capital management such as talent attraction and development, DEI and employee health and safety, could increase our cost of doing business and actual or perceived failure to adequately address ESG expectations of our various stakeholders could lead to a tarnished reputation and loss of customers. 51 Table of Contents Item 1A.
The failure of any one of these systems at Apollo for any reason, or errors made by its employees or agents, could cause significant interruptions to its operations, which could adversely affect our internal control over financial reporting or have a material adverse effect on our business, financial condition and results of operations. 54 Table of Contents Item 1A.
The failure of any one of these systems at Apollo for any reason, or errors made by its employees or agents, could cause significant interruptions to its operations, which could adversely affect our internal control over financial reporting or have a material adverse effect on our business, financial condition and results of operations.
This requires all registrants to develop a cyber risk policy which is to be delivered pursuant to an operation cyber risk management program and appoint an appropriately qualified member of staff or outsourced resource to the role of Chief Information Security Officer. The role of the Chief Information Security Officer is to deliver the operational cyber risk management program.
The Cyber Risk Code requires all registrants to develop a cyber risk policy which is to be delivered pursuant to an operation cyber risk management program and appoint an appropriately qualified member of staff or outsourced resource to the role of Chief Information Security Officer.
General Risk Factors We may be the target or subject of, and may be required to defend against or respond to, litigation, regulatory investigations or enforcement actions. We operate in an industry in which various practices are subject to potential litigation, including class actions, and regulatory scrutiny.
General Risk Factors Our business may be the target or subject of, and we may be required to defend against or respond to, litigation, regulatory investigations, enforcement actions or reputational harm. We operate in an industry in which various practices are subject to potential litigation, including class actions, and regulatory scrutiny.
Decreases in product sales or increases in lapse rates, in either case, brought about by changes in US tax law, may result in a decrease in net invested assets and therefore investment income and may have a material and adverse effect on our business, financial position, results of operations and cash flows.
Decreases in product sales or increases in lapse rates, in either case, brought about by changes in US tax law, may result in a decrease in net invested assets and therefore investment income and may have a material and adverse effect on our business, financial position, results of operations and cash flows. 59 Table of Contents Item 1A.
The remaining principal sections of PIPA, including conditions for use of personal information, requirements to provide a privacy notice and appoint a privacy officer and access, rectification and erasure rights for individuals, are scheduled to become fully implemented on January 1, 2025.
The remaining principal sections of PIPA, including conditions for use of personal information, requirements to provide a privacy notice and appoint a privacy officer, and access, rectification and erasure rights for individuals, were fully implemented on January 1, 2025.
The Indenture contains restrictive covenants which limit, subject to certain exceptions, AHL’s and, in certain instances, some or all of its subsidiaries’ ability to make fundamental changes, create liens on any capital stock of certain of AHL’s subsidiaries, and sell or dispose of the stock of certain of AHL’s subsidiaries.
The Indentures contain restrictive covenants which limit, subject to certain exceptions, AHL’s and, in certain instances, some or all of its subsidiaries’ ability to make fundamental changes, create liens on any capital stock of certain of AHL’s subsidiaries, and sell or dispose of the stock of certain of AHL’s subsidiaries.
If we are unable to attract and retain sufficient marketers and agents to sell our products or if we are not successful in expanding our distribution channels within the bank and broker-dealer markets, our ability to compete and our sales volumes and results of operations could be adversely affected. 45 Table of Contents Item 1A.
If we are unable to attract and retain sufficient marketers and agents to sell our products or if we are not successful in expanding our distribution channels within the bank and broker-dealer markets, our ability to compete and our sales volumes and results of operations could be adversely affected.
We may also be subject to disruptions of any of these systems arising from events that are wholly or partially beyond our control (for example, natural disasters, acts of terrorism, war, epidemics, pandemics, computer viruses and electrical or telecommunications outages).
We may also be subject to disruptions of any of these systems arising from events that are wholly or partially beyond our control (for example, natural disasters, acts of terrorism, war, epidemics, pandemics, computer viruses, and electrical or telecommunications outages). 44 Table of Contents Item 1A.
Rehypothecation of subject securities by the counterparty may also create risk with respect to the counterparty’s ability to perform its obligations to tender such securities on the repurchase date. Such facilities may not be available to us on favorable terms or at all in the future.
Rehypothecation of subject securities by the counterparty may also create risk with respect to the counterparty’s ability to perform its obligations to tender such securities on the repurchase date. Such facilities may not be available to us on favorable terms or at all in the future. 47 Table of Contents Item 1A.
Changes in the laws and regulations relevant to our business may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and prospects. Certain of the risks associated with changes in these laws and regulations are discussed in greater detail below. 56 Table of Contents Item 1A.
Changes in the laws and regulations relevant to our business may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and prospects. Certain of the risks associated with changes in these laws and regulations are discussed in greater detail below.
Given the limited duration of the Bermuda Minister of Finance’s assurances, and that the Bermuda CIT described above was enacted notwithstanding such assurances, we cannot assure you that we will not be subject to any other Bermuda taxes before or after March 31, 2035. 60 Table of Contents Item 1A.
Given the limited duration of the Bermuda Minister of Finance’s assurances, and that the Bermuda CIT described above was enacted notwithstanding such assurances, we cannot assure you that we will not be subject to any other Bermuda taxes before or after March 31, 2035.
Regulatory developments, including the NAIC’s adoption of amendments to its Insurance Holding Company System Regulatory Act and Model Regulation requiring, subject to certain exceptions, the filing of a confidential annual group capital calculation and an annual liquidity stress test with the IID, the lead state insurance regulator of our US insurance subsidiaries, may increase the amount of capital that we are required to hold and could result in us being subject to increased regulatory requirements.
Regulatory developments, including the NAIC’s adoption of amendments to its Insurance Holding Company System Regulatory Act and Model Regulation requiring, subject to certain exceptions, the filing of a confidential annual GCC and an annual LST with the IID, the lead state insurance regulator of our US insurance subsidiaries, may increase the amount of capital that we are required to hold and could result in us being subject to increased regulatory requirements.
Also on June 30, 2023, AHL and ALRe entered into a new revolving credit agreement with a syndicate of banks and Wells Fargo Bank, National Association, as administrative agent (Liquidity Facility), which replaced our previous revolving credit agreement dated as of July 1, 2022.
Also on June 28, 2024, AHL and ALRe entered into a new revolving credit agreement with a syndicate of banks and Wells Fargo Bank, National Association, as administrative agent (Liquidity Facility), which replaced our previous revolving credit agreement dated as of June 30, 2023.
In addition, we may in the future sacrifice our competitive or market position in order to improve our short-term profitability, particularly in the highly competitive retail markets, which may adversely affect our long-term growth and results of operations. Alternatively, we may sacrifice short-term profitability to maintain market share and long-term growth.
In addition, we may in the future sacrifice our competitive or market position in order to improve our short-term profitability, particularly in the highly competitive retail markets, which may adversely affect our long-term growth and results of operations. Alternatively, we may sacrifice short-term profitability to maintain market share and long-term growth. 43 Table of Contents Item 1A.
For example, the NAIC recently adopted changes to certain statements of statutory accounting principles in connection with its principles-based bond project, which are currently scheduled to become effective on January 1, 2025, setting forth the factors to determine whether an investment in asset-backed securities qualifies for reporting on an insurer’s statutory financial statement as a bond on Schedule D-1 as opposed to Schedule BA (other long-term invested assets), the latter of which could result, among other things, in the capital charge treatment of an investment being less favorable.
For example, the NAIC recently adopted changes to certain statements of statutory accounting principles in connection with its principles-based bond project, which became effective on January 1, 2025, setting forth the factors to determine whether an investment in debt qualifies for reporting on an insurer’s statutory financial statement as a bond on Schedule D-1 as opposed to Schedule BA (other long-term invested assets), the latter of which could result, among other things, in the capital charge treatment of an investment being less favorable.
As a consequence, AHL’s ability to pay dividends on its securities and to make timely payments on its debt obligations will depend on the ability of its subsidiaries to make distributions or other payments to it, which may be restricted by law. AHL is a holding company with limited business operations of its own.
Risks Relating to Investment in Our Securities AHL is a holding company with limited operations of its own. As a consequence, AHL’s ability to pay dividends on its securities and to make timely payments on its debt obligations will depend on the ability of its subsidiaries to make distributions or other payments to it, which may be restricted by law.
As of December 31, 2023, 34% of the carrying value of our available-for-sale (AFS) securities, including related parties, was comprised of securities of issuers based outside of the US and debt securities of foreign governments.
As of December 31, 2024, 40% of the carrying value of our available-for-sale (AFS) securities, including related parties, was comprised of securities of issuers based outside of the US and debt securities of foreign governments.
Further, it is expected that AHL will conduct its affairs in a manner that ensures that it is not regarded as carrying on a trade in the UK through a UK “permanent establishment” or “UK Representative.” Accordingly, AHL does not expect to be generally subject to UK tax on its worldwide profits. 59 Table of Contents Item 1A.
Further, it is expected that AHL will conduct its affairs in a manner that ensures that it is not regarded as carrying on a trade in the UK through a UK “permanent establishment” or “UK Representative.” Accordingly, AHL does not expect to be generally subject to UK tax on its worldwide profits.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe factors that make an investment in our business speculative or risky include: • Our business, financial condition, results of operations, liquidity and cash flows depend on the accuracy of our management’s assumptions and estimates, and we could experience significant gains or losses if these assumptions and estimates differ significantly from actual results. • Interruption or other operational failures in telecommunications, information technology and other operational systems, including as a result of threat actors attacking those systems, or a failure to maintain the security, integrity, confidentiality or privacy of sensitive data residing on those systems, including as a result of human error, could have a material adverse effect on our business. • A financial strength rating downgrade, potential downgrade or any other negative action by a rating agency could make our product offerings less attractive, inhibit our ability to acquire future business through acquisitions or reinsurance and increase our cost of capital, which could have a material adverse effect on our business. • We rely significantly on third parties for various services, and we may be held responsible for obligations that arise from the acts or omissions of third parties under their respective agreements with us. • We are subject to significant operating and financial restrictions imposed by our credit agreements and certain letters of credit, and we are also subject to certain operating restrictions imposed by the indenture to which we are a party. • We operate in a highly competitive industry that includes a number of competitors, which could limit our ability to achieve our growth strategies and could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. • If we are unable to attract and retain IMOs, banks and broker-dealers, sales of certain of our products may be adversely affected. • Our growth strategy includes acquisitions and block reinsurance transactions, and our ability to consummate these transactions on economically advantageous terms acceptable to us in the future is unknown. • We are subject to risks associated with pandemics, epidemics, disease outbreaks and other public health crises, such as the COVID-19 pandemic, which could impact our business, financial condition and results of operations in the future. • As a financial services company, we are exposed to liquidity risk, which is the risk that we are unable to meet near-term obligations as they come due. • The amount of statutory capital that our insurance and reinsurance subsidiaries have, or that they are required to hold, can vary significantly from time to time and is sensitive to a number of factors outside of our control. • Repurchase agreement programs subject us to potential liquidity and other risks. • Our investments are subject to market and credit risks that could diminish their value and these risks could be greater during periods of extreme volatility or disruption in the financial and credit markets, which could adversely impact our business, financial condition, results of operations, liquidity and cash flows. • Interest rate fluctuations could adversely affect our business, financial condition, results of operations, liquidity and cash flows. • We are subject to the credit risk of our counterparties, including ceding companies, reinsurers, plan sponsors and derivative counterparties. • Our investment portfolio may be subject to concentration risk, particularly with respect to single issuers, including Athora, among others; industries, including financial services; and asset classes, including real estate. • Many of our invested assets are relatively illiquid and we may fail to realize profits from these assets for a considerable period of time, or lose some or all of the principal amount we invest in these assets if we are required to sell our invested assets at a loss at inopportune times. • Our investments linked to real estate are subject to credit risk, market risk, servicing risk, loss from catastrophic events and other risks, which could diminish the value that we obtain from such investments. • Our investment portfolio may include investments in securities of issuers based outside the US, including emerging markets, which may be riskier than securities of US issuers. • While we seek to hedge foreign currency risks, foreign currency fluctuations may reduce our net income and our capital levels, adversely affecting our financial condition. • Climate change and regulatory and other efforts to reduce climate change, as well as environmental, social and governance requirements could adversely affect our business. • Financial markets have been subject to inflationary pressures, and continued rising inflation may adversely impact our business and results of operations. 4 Table of Contents • There are potential conflicts of interests between Apollo, our corporate parent, and the holders of our preferred stock. • We rely on our investment management agreements with Apollo for the management of our investment portfolio.
Biggest changeThe factors that make an investment in our business speculative or risky include: • Our business, financial condition, results of operations, liquidity and cash flows depend on the accuracy of our management’s assumptions and estimates, and we could experience significant gains or losses if these assumptions and estimates differ significantly from actual results. • A financial strength rating downgrade, potential downgrade or any other negative action by a rating agency could make our product offerings less attractive, inhibit our ability to acquire future business through acquisitions or reinsurance and increase our cost of capital, which could have a material adverse effect on our business. • We operate in a highly competitive industry that includes a number of competitors, which could limit our ability to achieve our growth strategies and could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. • If we are unable to attract and retain IMOs, banks and broker-dealers, sales of certain of our products may be adversely affected. • From time to time we may pursue acquisitions and block reinsurance transactions, and our ability to consummate these transactions on economically advantageous terms acceptable to us in the future is unknown. • Interruption or other operational failures in telecommunications, information technology and other operational systems, including as a result of threat actors attacking those systems, or a failure to maintain the security, integrity, confidentiality or privacy of sensitive data residing on those systems, including as a result of human error, could have a material adverse effect on our business. • We rely significantly on third parties for various services, and we may be held responsible for obligations that arise from the acts or omissions of third parties under their respective agreements with us. • We are subject to significant operating and financial restrictions imposed by our credit agreements and certain letters of credit, and we are also subject to certain operating restrictions imposed by the indentures to which we are a party. • We are subject to risks associated with pandemics, epidemics, disease outbreaks and other public health crises which could impact our business, financial condition and results of operations in the future. • Artificial intelligence could increase competitive, operational, legal and regulatory risks to our businesses in ways that we cannot predict. • As a financial services company, we are exposed to liquidity risk, which is the risk that we are unable to meet near-term obligations as they come due. • The amount of statutory capital that our insurance and reinsurance subsidiaries have, or that they are required to hold, can vary significantly from time to time and is sensitive to a number of factors outside of our control. • Repurchase agreement programs subject us to potential liquidity and other risks. • Our investments are subject to market and credit risks that could diminish their value and these risks could be greater during periods of extreme volatility or disruption in the financial and credit markets, which could adversely impact our business, financial condition, results of operations, liquidity and cash flows. • Interest rate fluctuations could adversely affect our business, financial condition, results of operations, liquidity and cash flows. • We are subject to the credit risk of our counterparties, including ceding companies, reinsurers, plan sponsors and derivative counterparties. • Our investment portfolio may be subject to concentration risk, particularly with respect to single issuers, including Athora, among others; industries, including financial services; and asset classes, including real estate. • Many of our invested assets are relatively illiquid and we may fail to realize profits from these assets for a considerable period of time, or lose some or all of the principal amount we invest in these assets if we are required to sell our invested assets at a loss at inopportune times. • Our investments linked to real estate are subject to credit risk, market risk, servicing risk, loss from catastrophic events and other risks, which could diminish the value that we obtain from such investments. • Our investment portfolio may include investments in securities of issuers based outside the US, including emerging markets, which may be riskier than securities of US issuers. • While we seek to hedge foreign currency risks, foreign currency fluctuations may reduce our net income and our capital levels, adversely affecting our financial condition. • Climate change and regulatory and other efforts to reduce climate change, as well as environmental, social and governance requirements could adversely affect our business. • Financial markets have been subject to inflationary pressures, and continued rising inflation may adversely impact our business and results of operations. 4 Table of Contents • There are potential conflicts of interests between Apollo, our corporate parent, and the holders of our preferred stock. • We rely on our investment management agreements with Apollo for the management of our investment portfolio.
Our investment philosophy is to invest a portion of our assets in securities that earn an incremental yield by taking measured liquidity and complexity risk and capitalize on our long-dated, persistent liability profile to prudently achieve higher net investment earned rates, rather than assuming incremental credit risk.
Our investment philosophy is to invest a portion of our assets in securities that earn an incremental yield by taking measured liquidity and complexity risk and capitalize on our long-dated, persistent liability profile to prudently achieve higher net investment earned rates, rather than assuming incremental credit risk.
Rather than increase our allocation to higher risk securities to increase yield, we pursue the direct origination of high-quality, predominantly senior secured assets, which we believe possess greater alpha-generating qualities than securities that would otherwise be readily available in public markets.
Rather than increase our allocation to higher risk securities to increase yield, we pursue the direct origination of high-quality, predominantly senior secured assets, which we believe possess greater alpha-generating qualities than securities that would otherwise be readily available in public markets.
These direct origination strategies include investments sourced by (1) affiliated platforms that originate loans to third parties and in which we gain exposure directly to the loan or indirectly through our ownership of the origination platform and/or securitizations of assets originated by the origination platform, and (2) Apollo’s extensive network of direct relationships with predominantly investment-grade counterparties.
These direct origination strategies include investments sourced by (1) affiliated platforms that originate loans to third parties and in which we gain exposure directly to the loan or indirectly through our ownership of the origination platform and/or securitizations of assets originated by the origination platform, and (2) Apollo’s extensive network of direct relationships with predominantly investment-grade counterparties.
Furthermore, we believe that these direct origination strategies will often provide us with the flexibility to choose the location in the capital structure in which we invest, affording us the opportunity to select the risk/return profile that we deem optimal and limit our exposure to assets with sub-optimal risk/return characteristics.
Furthermore, we believe these direct origination strategies will often provide us with the flexibility to choose the location in the capital structure in which we invest, affording us the opportunity to select the risk/return profile that we deem optimal and limit our exposure to assets with sub-optimal risk/return characteristics.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of economic interests.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of the economic interests.
Such competition is likely to intensify as insurance businesses become more attractive acquisition targets for both other insurance companies and financial and other institutions and as the already substantial consolidation in the financial services industry continues.
Such competition is likely to intensify as insurance businesses become more attractive acquisition targets for both other insurance companies and financial institutions and as the already substantial consolidation in the financial services industry continues.
Business Classification of Insurers The Bermuda Insurance Act distinguishes between insurers carrying on long-term business, insurers carrying on special purpose business and insurers carrying on general business.
Classification of Insurers The Bermuda Insurance Act distinguishes between insurers carrying on long-term business, insurers carrying on special purpose business and insurers carrying on general business.
Credit for Coinsurance Ceded by a US Cedant The ability of a ceding insurer to take reserve credit for the business ceded to reinsurers through coinsurance is a significant component of reinsurance regulation and is often a determining factor in establishing a reinsurance relationship.
Business Credit for Coinsurance Ceded by a US Cedant The ability of a ceding insurer to take reserve credit for the business ceded to reinsurers through coinsurance is a significant component of reinsurance regulation and is often a determining factor in establishing a reinsurance relationship.
Statutory Reporting and Regulatory Examinations Our US insurance subsidiaries are required to file detailed annual reports, including financial statements, in accordance with prescribed statutory accounting rules, with regulatory officials in the jurisdictions in which they conduct business. In addition, each US insurance subsidiary is required to file quarterly reports prepared on the same basis, though with considerably less detail.
Statutory Reporting and Regulatory Examinations Our US insurance subsidiaries are required to file with regulatory officials in the jurisdictions in which they conduct business detailed annual reports, including financial statements, in accordance with prescribed statutory accounting rules. In addition, each US insurance subsidiary is required to file quarterly reports prepared on the same basis, though with considerably less detail.
Business Restrictions on Business Operations Pursuant to the Bermuda Insurance Act, our Bermuda reinsurance subsidiaries are not permitted to engage in non-insurance business unless such non-insurance business is ancillary to its core business.
Restrictions on Business Operations Pursuant to the Bermuda Insurance Act, our Bermuda reinsurance subsidiaries are not permitted to engage in non-insurance business unless such non-insurance business is ancillary to its core business.
DAC Deferred acquisition costs Deferred annuities Fixed indexed annuities, annual reset annuities, multi-year guaranteed annuities and registered index-linked annuities DSI Deferred sales inducement Excess capital Capital in excess of the level management believes is needed to support our current operating strategy FIA Fixed indexed annuity, which is an insurance contract that earns interest at a crediting rate based on a specified index on a tax-deferred basis Fixed annuities FIAs together with fixed rate annuities Fixed rate annuity An insurance contract that offers tax-deferred growth and the opportunity to produce a guaranteed stream of retirement income for the lifetime of its policyholder Flow reinsurance A transaction in which the ceding company cedes a portion of newly issued policies to the reinsurer Funds withheld Funds withheld modified coinsurance GLWB Guaranteed lifetime withdrawal benefit GMDB Guaranteed minimum death benefit Gross invested assets Represent the investments that directly back our gross reserve liabilities as well as surplus assets.
DAC Deferred acquisition costs Deferred annuities Fixed indexed annuities, annual reset annuities, multi-year guaranteed annuities and registered index-linked annuities DSI Deferred sales inducement Excess equity capital Capital in excess of the level management believes is needed to support our current operating strategy FIA Fixed indexed annuity, which is an insurance contract that earns interest at a crediting rate based on a specified index on a tax-deferred basis Fixed annuities FIAs together with fixed rate annuities Fixed rate annuity An insurance contract that offers tax-deferred growth and the opportunity to produce a guaranteed stream of retirement income for the lifetime of its policyholder Flow reinsurance A transaction in which the ceding company cedes a portion of newly issued policies to the reinsurer Funds withheld Funds withheld modified coinsurance GLWB Guaranteed lifetime withdrawal benefit GMDB Guaranteed minimum death benefit Gross invested assets Represent the investments that directly back our gross reserve liabilities as well as surplus assets.
Gross invested assets include (a) total investments on the consolidated balance sheet with available-for-sale securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
Gross invested assets include (a) total investments on the consolidated balance sheet with available-for-sale securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE and VOE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
Net invested assets include (a) total investments on the consolidated balance sheets, with available-for-sale securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
Net invested assets include (a) total investments on the consolidated balance sheets, with available-for-sale securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE and VOE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
ALRe has been approved as a certified reinsurer in Delaware (its lead state), and for passport applications in Iowa, Maine, Massachusetts, Michigan, Ohio, Tennessee, and Vermont and is therefore eligible, based on its current ratings, to post reduced collateral equal to 20% of the statutory reserves ceded under new coinsurance agreements by insurers domiciled in those states.
ALRe has been approved as a certified reinsurer in Iowa (its new lead state, previously Delaware), and for passport applications in Delaware, Maine, Massachusetts, Michigan, Ohio, Tennessee, and Vermont and is therefore eligible, based on its current ratings, to post reduced collateral equal to 20% of the statutory reserves ceded under new coinsurance agreements by insurers domiciled in those states.
The prescribed form of capital and solvency return is comprised of: the BMA’s BSCR model or an approved internal capital model in lieu thereof; a statutory economic balance sheet; the approved actuary’s opinion; and several prescribed schedules, including a schedule of fixed income and equity investments by BSCR rating, a schedule of funds held by ceding reinsurers in segregated accounts/trusts by BSCR rating, a schedule of risk management and a schedule of eligible capital, among others.
The prescribed form of capital and solvency return is comprised of: the BMA’s BSCR model or an approved internal capital model in lieu thereof; a statutory economic balance sheet (EBS); the approved actuary’s opinion; and several prescribed schedules, including a schedule of fixed income and equity investments by BSCR rating, a schedule of funds held by ceding reinsurers in segregated accounts/trusts by BSCR rating, a schedule of risk management and a schedule of eligible capital, among others.
Regulation of Investments Each of our US insurance subsidiaries is subject to laws and regulations in each Athene Domiciliary State that require diversification of its investment portfolio and limit the amounts of investments in certain asset categories, such as below-investment grade fixed income securities, real estate-related equity, partnerships, other equity investments, derivatives and alternative investments.
Business Regulation of Investments Each of our US insurance subsidiaries is subject to laws and regulations in each Athene Domiciliary State that require diversification of its investment portfolio and limit the amounts of investments in certain asset categories, such as below-investment grade fixed income securities, real estate-related equity, partnerships, other equity investments, derivatives and alternative investments.
Credit for reinsurance laws and regulations adopted by the various states are based on the NAIC’s Credit for Reinsurance Model Law and Regulation (Credit for Reinsurance Model Law) and provide that collateral requirements may be reduced for reinsurance ceded to certain unauthorized or non-accredited non-US-based reinsurers that satisfy certain criteria to qualify as a certified reinsurer.
Credit for reinsurance laws and regulations adopted by the various states are based on the NAIC’s Credit for Reinsurance Model Law (#785) and Regulation (Credit for Reinsurance Model Law) and provide that collateral requirements may be reduced for reinsurance ceded to certain unauthorized or non-accredited non-US-based reinsurers that satisfy certain criteria to qualify as a certified reinsurer.
For example, in our most recent Japanese block reinsurance transaction, we entered into an arrangement with a highly rated reinsurer to retrocede the mortality risk associated with the whole life liability. We plan to continue leveraging our expertise in sourcing and evaluating transactions to profitably grow our business.
For example, in our most recent Japanese block reinsurance transaction in 2023, we entered into an arrangement with a highly rated reinsurer to retrocede the mortality risk associated with the whole life liability. We plan to continue leveraging our expertise in sourcing and evaluating transactions to profitably grow our business.
Rules adopted by the CFTC and SEC under Title VII of the Dodd-Frank Act impose a number of requirements related to the trading swaps and security-based swamps, including mandatory clearing, on-facility trade execution requirements, mandatory minimum margin requirements for uncleared swaps and security-based swaps, as well as reporting and recordkeeping requirements.
Rules adopted by the CFTC and SEC under Title VII of the Dodd-Frank Act impose a number of requirements related to trading swaps and security-based swaps, including mandatory clearing, on-facility trade execution requirements, mandatory minimum margin requirements for uncleared swaps and security-based swaps, as well as reporting and recordkeeping requirements.
The GLBA and other federal and state laws and regulations require financial institutions, including insurers, to protect the security and confidentiality of nonpublic personal information, including certain health-related and customer information, regulate the use and disclosure of certain personal information, and require financial institutions to notify customers and other individuals about their policies and practices relating to their collection and disclosure of health-related and customer information and their practices relating to protecting the security and confidentiality of that information.
The GLBA and other federal and state laws and regulations require financial institutions, including insurers, to protect the security and confidentiality of nonpublic personal information, including certain financial-related, health-related and customer information, regulate the use and disclosure of certain personal information, and require financial institutions to notify customers and other individuals about their policies and practices relating to their collection and disclosure of such information and their practices relating to protecting the security and confidentiality of that information.
Each of the Athene Domiciliary States has adopted a form of the Holding Company Model Law, that requires each ultimate controlling party to file an annual enterprise risk report identifying the material risks within the insurance holding company system that could pose enterprise risk to the licensed companies.
Each of the Athene Domiciliary States has adopted a form of the Holding Company Model Law that requires each ultimate controlling party to file an annual enterprise risk report identifying the material risks within the insurance holding company system, which could pose enterprise risk to the licensed companies.
Policy and Contract Reserve Adequacy Analysis The Athene Domiciliary States and other states have adopted laws with respect to policy and contract reserve sufficiency. Under applicable insurance laws, our US insurance subsidiaries are each required to annually conduct an analysis of the adequacy of all life insurance and annuity statutory reserves.
Business Policy and Contract Reserve Adequacy Analysis The Athene Domiciliary States and other states have adopted laws with respect to policy and contract reserve sufficiency. Under applicable insurance laws, our US insurance subsidiaries are each required to annually conduct an analysis of the adequacy of all life insurance and annuity statutory reserves.
We believe that a greater focus on these direct origination strategies affords us both quantitative and qualitative advantages, including eliminating the cost of intermediaries, recognizing an illiquidity premium, having direct access to diligence and having greater control over the terms of the investment.
We believe that a greater focus on these direct origination strategies affords us both quantitative and qualitative advantages, including eliminating the cost of intermediaries, recognizing an origination premium, having direct access to diligence and having greater control over the terms of the investment.
As we continue to expand to new markets and geographies, we have been disciplined in only retaining liabilities that are core to our strategy and competitive advantages. This can be accomplished through structural solutions, including mortality and longevity reinsurance.
As we continue to expand into new markets and geographies, we have been disciplined in only retaining liabilities that are core to our strategy and competitive advantages. This can be accomplished through structural solutions, including mortality and longevity reinsurance.
Business The Bermuda Insurance Act provides the BMA with powers to set standards on public disclosure. Using this power, the BMA requires all commercial insurers and insurance groups, subject to certain exceptions, to prepare and publish a Financial Condition Report on their website.
The Bermuda Insurance Act provides the BMA with powers to set standards on public disclosure. Using this power, the BMA requires all commercial insurers and insurance groups, subject to certain exceptions, to prepare and publish a Financial Condition Report on their website.
US Federal Oversight Although the insurance business in the United States is primarily regulated by the states, federal initiatives can affect the businesses of our US insurance subsidiaries in a variety of ways. From time to time, federal measures are proposed which may significantly affect the insurance business.
Business US Federal Oversight Although the insurance business in the US is primarily regulated by the states, federal initiatives can affect the businesses of our US insurance subsidiaries in a variety of ways. From time to time, federal measures are proposed which may significantly affect the insurance business.
There can be no assurance that any particular rating will continue for any given period of time or that it will not be changed or withdrawn entirely if, in the respective rating agency’s judgment or circumstances so warrant.
There can be no assurance that any particular rating will continue for any given period of time or that it will not be changed or withdrawn entirely if the respective rating agency’s judgment or circumstances so warrant.
Surplus assets Assets in excess of policyholder obligations, determined in accordance with the applicable domiciliary jurisdiction’s statutory accounting principles TAC Total adjusted capital as defined by the model created by the NAIC US GAAP Accounting principles generally accepted in the United States of America US RBC The CAL RBC ratio for AADE, our parent US insurance company VIE Variable interest entity VOBA Value of business acquired 8 Table of Contents PART I Item 1.
Surplus assets Assets in excess of policyholder obligations, determined in accordance with the applicable domiciliary jurisdiction’s statutory accounting principles TAC Total adjusted capital as defined by the model created by the NAIC US GAAP Accounting principles generally accepted in the United States of America US RBC The CAL RBC ratio for AAIA, our parent US insurance company VIE Variable interest entity VOBA Value of business acquired 8 Table of Contents PART I Item 1.
ALRe Athene Life Re Ltd., a Bermuda reinsurance subsidiary ALReI Athene Life Re International Ltd., a Bermuda reinsurance subsidiary Apollo Apollo Global Management, Inc., together with its subsidiaries (other than us or our subsidiaries) Apollo Group (1) AGM and its subsidiaries, including AAM, (2) any investment fund or other collective investment vehicle whose general partner or managing member is owned, directly or indirectly, by clause (1), (3) BRH Holdings GP, Ltd. and each of its shareholders, (4) any executive officer or employee of AGM or AGM’s subsidiaries, and (5) any affiliate of a person described in clauses (1), (2), (3) or (4) above; provided none of AHL or its subsidiaries (other than ACRA) will be deemed to be a member of the Apollo Group AUSA Athene USA Corporation Athora Athora Holding Ltd.
ALRe Athene Life Re Ltd., a Bermuda reinsurance subsidiary ALReI Athene Life Re International Ltd., a Bermuda reinsurance subsidiary Apollo Apollo Global Management, Inc., together with its subsidiaries (other than us or our subsidiaries) Apollo Group (1) AGM and its subsidiaries, including AAM, (2) any investment fund or other collective investment vehicle whose general partner or managing member is owned, directly or indirectly, by clause (1), (3) BRH Holdings GP, Ltd. and each of its shareholders, (4) any executive officer or employee of AGM or AGM’s subsidiaries, and (5) any affiliate of a person described in clauses (1), (2), (3) or (4) above; provided none of AHL or its subsidiaries (other than ACRA) will be deemed to be a member of the Apollo Group Athora Athora Holding Ltd.
We earn income on group annuities based upon the spread between the return on the assets received in connection with the pension group annuity transaction and the cost of the pension obligations assumed.
Business We earn income on group annuities based upon the spread between the return on the assets received in connection with the pension group annuity transaction and the cost of the pension obligations assumed.
The Dodd-Frank Act, which effected the most far-reaching overhaul of financial regulation in the US in decades, established the Federal Insurance Office within the Treasury Department.
The Dodd-Frank Act, which effected the most far-reaching overhaul of financial regulation in the US in decades, established the Federal Insurance Office (FIO) within the Treasury Department.
Business under these laws, transactions between our US insurance subsidiaries and their affiliates, including any reinsurance transactions and affiliated investments, must be fair and reasonable and, if material or included within a specified category, require prior notice and approval or non-disapproval by the insurance department of each applicable Athene Domiciliary State.
Generally, under these laws, transactions between our US insurance subsidiaries and their affiliates, including any reinsurance transactions and affiliated investments, must be fair and reasonable and, if material or included within a specified category, require prior notice and approval or non-disapproval by the insurance department of each applicable Athene Domiciliary State.
Such laws as these prevent any person from acquiring direct or indirect control of any of our US insurance subsidiaries or their holding companies unless that person has filed a statement with specified information with the commissioner, superintendent or director of the insurance department of the applicable Athene Domiciliary State (each, a Commissioner) and has obtained the Commissioner’s prior approval.
Such laws prevent any person from acquiring direct or indirect control of any of our US insurance subsidiaries or their holding companies unless that person has filed a statement with specified information with the commissioner, superintendent or director of the insurance department of the applicable Athene Domiciliary State (each, a Commissioner) and has obtained the Commissioner’s prior approval.
In order for ceding companies of our Bermuda reinsurance subsidiaries to receive statutory reserve or RBC credit for the reinsurance provided, reinsurance transactions are typically structured in one of three ways: (1) funds withheld, where, although the applicable Bermuda reinsurance subsidiary recognizes the insurance reserve liabilities, the assets to secure such liabilities are held and maintained by the applicable ceding company, (2) modco, where both the insurance reserves and assets supporting the reserves are retained by the applicable ceding company or (3) coinsurance, where the respective Bermuda reinsurance subsidiary’s obligation to the applicable ceding company in connection with reinsurance transactions is secured by assets held in trust for the benefit of the applicable ceding company, which may be reduced or eliminated to the extent that the applicable Bermuda reinsurance subsidiary is approved as a certified reinsurer or reciprocal jurisdiction reinsurer in the cedant’s domiciliary state as discussed in more detail in the following section.
In order for US ceding companies to receive statutory reserve or RBC credit for the reinsurance provided, reinsurance transactions are typically structured in primarily one of three ways: (1) modco, where both the insurance reserves and assets supporting the reserves are retained by the applicable US ceding company; or (2) funds withheld, where, although the applicable Bermuda reinsurance subsidiary recognizes the insurance reserve liabilities, the assets to secure such liabilities are held and maintained by the applicable ceding company, or (3) coinsurance where the respective Bermuda reinsurance subsidiary’s obligation to the applicable US ceding company in connection with reinsurance transactions is secured by assets held in trust for the benefit of the applicable US ceding company, which may be reduced or eliminated to the extent that the applicable Bermuda reinsurance subsidiary is approved as a certified reinsurer or reciprocal jurisdiction reinsurer in the cedant’s domiciliary state as discussed in more detail in the following section.
In light of these risks, you should not place undue reliance upon any forward-looking statements contained in this report. Unless an earlier date is specified, the forward-looking statements included in this report are made only as of the date that this report was filed with the US Securities and Exchange Commission (SEC).
In light of these risks, you should not place undue reliance on any forward-looking statements contained in this report. Unless an earlier date is specified, the forward-looking statements included in this report are made only as of the date that this report was filed with the US Securities and Exchange Commission (SEC).
The surrender charge for most of our products at contract inception is generally between 7% and 15% of the contract value and decreases by approximately one percentage point per year during the surrender charge period. The weighted average surrender charge (excluding the impact of MVAs) was 6% for our deferred annuities as of December 31, 2023.
The surrender charge for most of our products at contract inception is generally between 7% and 15% of the contract value and decreases by approximately one percentage point per year during the surrender charge period. The weighted average surrender charge (excluding the impact of MVAs) was 6% for our deferred annuities as of December 31, 2024.
As a consequence, AHL’s ability to pay dividends on its securities and to make timely payments on its debt obligations will depend on the ability of its subsidiaries to make distributions or other payments to it, which may be restricted by law. • Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain legal actions between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject to uncertainty. • We may be the target or subject of, and may be required to defend against or respond to, litigation, regulatory investigations or enforcement actions. 5 Table of Contents GLOSSARY OF SELECTED TERMS Unless otherwise indicated in this report, the following terms have the meanings set forth below: Entities Term or Acronym Definition AAA Apollo Aligned Alternatives Aggregator, LP AADE Athene Annuity & Life Assurance Company AAIA Athene Annuity and Life Company AAM Apollo Asset Management, Inc., formerly known as Apollo Global Management, Inc.
As a consequence, AHL’s ability to pay dividends on its securities and to make timely payments on its debt obligations will depend on the ability of its subsidiaries to make distributions or other payments to it, which may be restricted by law. • Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for certain legal actions between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with us or our directors, officers or employees, and the enforceability of the exclusive forum provision may be subject to uncertainty. • Our business may be the target or subject of, and we may be required to defend against or respond to, litigation, regulatory investigations, enforcement actions or reputational harm. 5 Table of Contents GLOSSARY OF SELECTED TERMS Unless otherwise indicated in this report, the following terms have the meanings set forth below: Entities Term or Acronym Definition AAA Apollo Aligned Alternatives Aggregator, LP AADE Athene Annuity & Life Assurance Company AAIA Athene Annuity and Life Company AAM Apollo Asset Management, Inc.
A rating may have a stable outlook to indicate that the rating is not expected to change, but a stable outlook does not preclude a rating agency from changing a rating at any time without notice. A.M. Best, S&P, Fitch and Moody’s review their ratings of insurance companies from time to time.
A rating may have a stable outlook to indicate that the rating is not expected to change, but a stable outlook does not preclude a rating agency from changing a rating at any time without notice. AM Best, S&P, Fitch and Moody’s review their ratings of insurance companies from time to time.
Within the pension group annuities market, we compete primarily on the basis of price, underwriting, investment capabilities and our ability to provide quality service to the corporate sponsor’s pension participants. Finally, we face competition in the market for acquisition targets and profitable blocks of insurance.
Within the pension group annuities market, we compete primarily on the basis of price, underwriting, investment capabilities and our ability to provide quality service to the corporate sponsor’s pension participants. Finally, we experience competition in the market for acquisition targets and profitable blocks of insurance.
ALRe and AARe have received a determination that they satisfy the conditions to forgo the collateral posting requirements in Iowa pursuant to any coinsurance agreement entered into, amended or renewed on or after the effective date of NAIC 2019 as adopted by Iowa, and only with respect to losses incurred and reserves reported on or after the later of the (1) date on which ALRe or AARe has met all eligibility requirements to be designated a Reciprocal Jurisdiction Reinsurer, and (2) effective date of the new reinsurance agreement, amendment or renewal pursuant to the provisions of the Credit for Reinsurance Model Law as adopted by Iowa. 27 Table of Contents Item 1.
ALRe and AARe have received a determination that they satisfy the conditions to forgo the collateral posting requirements in Iowa pursuant to any coinsurance agreement entered into, amended or renewed on or after the effective date of NAIC 2019 as adopted by Iowa, and only with respect to losses incurred and reserves reported on or after the later of the (1) date on which ALRe or AARe has met all eligibility requirements to be designated a Reciprocal Jurisdiction Reinsurer, and (2) effective date of the new reinsurance agreement, amendment or renewal pursuant to the provisions of the Credit for Reinsurance Model Law as adopted by Iowa.
Five of our twelve directors are employees of or consultants to Apollo, including our Chairman, Chief Executive Officer and Chief Investment Officer, who is also a member of the board of directors and an executive officer of Apollo, and the Chief Executive Officer of Apollo Insurance Solutions Group LP (ISG), our investment manager and a subsidiary of AGM.
Six of our twelve directors are employees of or consultants to Apollo, including our Chairman, Chief Executive Officer and Chief Investment Officer, who is also a member of the board of directors and an executive officer of Apollo, and the Chief Executive Officer of Apollo Insurance Solutions Group LP (ISG), our investment manager and a subsidiary of AGM.
Within the reinsurance market, we compete with other insurance and reinsurance companies. We face strong competition within our institutional channel. With respect to funding agreements, namely those issued in connection with our FABN program, we compete with other insurers that have active FABN programs.
Within the reinsurance market, we compete with other insurance and reinsurance companies. We encounter strong competition within our institutional channel. With respect to funding agreements, namely those issued in connection with our FABN program, we compete with other insurers that have active FABN programs.
Best’s financial strength rating categories from “A+” to “C” include a ratings notch to reflect a gradation of financial strength within the category. Ratings notches for A.M. Best’s financial strength rating are expressed with either a second plus “+” or a minus “-”. A.M.
AM Best’s financial strength rating categories from “A+” to “C” include a ratings notch to reflect a gradation of financial strength within the category. Ratings notches for AM Best’s financial strength rating are expressed with either a second plus “+” or a minus “-”.
Best’s long-term issuer credit rating are expressed with a plus “+” or a minus “-”. 2 S&P’s insurer financial strength rating is a forward-looking opinion about the financial security characteristics of an insurance organization with respect to its ability to pay under its insurance policies and contracts in accordance with their terms.
Rating notches for AM Best’s long-term issuer credit rating are expressed with a plus “+” or a minus “-”. 2 S&P’s insurer financial strength rating is a forward-looking opinion about the financial security characteristics of an insurance organization with respect to its ability to pay under its insurance policies and contracts in accordance with their terms.
As of December 31, 2023, crediting rates on outstanding annual reset annuities ranged from 0.5% to 6.0% and crediting rates on outstanding MYGAs ranged from 0.25% to 6.20%. Registered Index-Linked Annuities (RILA) – RILAs are similar to FIAs in offering the policyholder the opportunity for tax-deferred growth based in part on the performance of a market index.
As of December 31, 2024, crediting rates on outstanding annual reset annuities primarily ranged from 0.5% to 6.0% and crediting rates on outstanding MYGAs primarily ranged from 0.25% to 6.20%. Registered Index-Linked Annuities (RILA) – RILAs are similar to FIAs in offering the policyholder the opportunity for tax-deferred growth based in part on the performance of a market index.
The changes include a revised approach to SIFI designation based on risk factors contained in a proposed analytic framework, including leverage, liquidity risk and maturity mismatch, interconnections, operational risks, complexity, or opacity, inadequate risk management, concentration, and destabilizing activities, regardless of whether those risks arise from activities, firms, or otherwise.
The changes from the FSOC’s prior guidance include a revised approach to SIFI designation based on risk factors contained in a proposed analytic framework, including leverage, liquidity risk and maturity mismatch, interconnections, operational risks, complexity, or opacity, inadequate risk management, concentration, and destabilizing activities, regardless of whether those risks arise from activities, firms, or otherwise.
While the Director of the Federal Insurance Office does not currently have general supervisory or regulatory authority over the business of insurance, he or she performs various functions with respect to insurance, including serving as a non-voting member of the FSOC and making recommendations to the FSOC regarding non-bank financial companies to be designated as SIFIs.
While the Director of the FIO does not currently have general supervisory or regulatory authority over the business of insurance, he or she performs various functions with respect to insurance, including serving as a non-voting member of the FSOC and making recommendations to the FSOC regarding non-bank financial companies to be designated as SIFIs.
In addition to other efforts, we partially mitigate the risk of rising interest rates by strategically allocating a meaningful portion of our investment portfolio into floating rate securities. Apollo’s investment team and credit portfolio managers employ their deep experience to assist us in sourcing and underwriting complex asset classes.
In addition to other efforts, we manage the risk of rising interest rates by strategically allocating a meaningful portion of our investment portfolio into floating rate securities. Apollo’s investment team and credit portfolio managers employ their deep experience to assist us in sourcing and underwriting complex asset classes.
In addition, we believe an outsourcing model provides predictable pricing and service levels and operational flexibility and further allows us to benefit from technological developments that enhance our capabilities, each in a manner that we would not otherwise be able to achieve without investing more of our own capital.
In addition, we believe an outsourcing model provides predictable pricing and service levels and operational flexibility while further allowing us to benefit from technological developments that enhance our capabilities, each in a manner that we would not otherwise be able to achieve without investing more of our own capital.
A qualified actuary appointed by each such subsidiary’s board must submit an opinion annually for each such subsidiary which states that the statutory reserves make adequate provision, according to accepted actuarial standards of practice, for the anticipated cash flows resulting from the contractual obligations and related expenses of such subsidiary.
A qualified actuary appointed by each such subsidiary’s board must submit an opinion annually for each such subsidiary stating that the statutory reserves make adequate provision, according to accepted actuarial standards of practice, for the anticipated cash flows resulting from the contractual obligations and related expenses of such subsidiary.
In addition, we are creating products that capitalize on the capabilities of both Apollo and Athene and will facilitate Apollo’s distribution of these products to high-net-worth individuals. • Leverage Our Merger with Apollo. We intend to continue leveraging our close relationship with Apollo to source high-quality assets with attractive risk-adjusted returns.
In addition, we are creating products that capitalize on the capabilities of both Apollo and Athene and will facilitate Apollo’s distribution of these products. • Leverage Our Merger with Apollo – We intend to continue leveraging our close relationship with Apollo to source high-quality assets with attractive risk-adjusted returns.
Best’s long-term issuer credit rating is an opinion of an entity’s ability to meet its ongoing senior financial obligations. A.M. Best’s long-term issuer credit rating categories from “aa” to “ccc” include rating notches to reflect a gradation within the category to indicate whether credit quality is near the top or bottom of a particular rating category. Rating notches for A.M.
AM Best’s long-term issuer credit rating is an opinion of an entity’s ability to meet its ongoing senior financial obligations. AM Best’s long-term issuer credit rating categories from “aa” to “ccc” include rating notches to reflect a gradation within the category to indicate whether credit quality is near the top or bottom of a particular rating category.
Principal competitive factors for FIAs are initial crediting rates, reputation for renewal crediting action, product features, brand recognition, customer service, distribution capabilities and financial strength ratings of the provider. Competition may affect, among other matters, both business growth and the pricing of our products and services.
Principal competitive factors for fixed annuities are initial crediting rates, reputation for renewal crediting action, product features, brand recognition, customer service, distribution capabilities and financial strength ratings of the provider. Competition may affect, among other matters, both business growth and the pricing of our products and services.
The FSOC’s changes could have the effect of simplifying and shortening its procedures for designating non-bank financial companies as SIFIs, which would subject them to additional supervision, examination, and regulation.There is considerable uncertainty as to the FSOC’s future determination of non-bank SIFIs and/or systemically important activities.
The FSOC’s changes could have the effect of simplifying and shortening its procedures for designating non-bank financial companies as SIFIs compared to the prior guidance, which would subject them to additional supervision, examination, and regulation. There is considerable uncertainty as to the FSOC’s future determination of non-bank SIFIs and/or systemically important activities.
ComFrame establishes international standards for the designation of a group-wide supervisor for each IAIG and IAIS intends to include a group capital requirement (the global insurance capital standard (ICS)) applicable to an IAIG in addition to the current legal entity capital requirements and any group capital requirements imposed by relevant insurance laws and regulations.
ComFrame establishes international standards for the designation of a group-wide supervisor for each IAIG, and the IAIS includes a group capital requirement (the global insurance capital standard (ICS)) applicable to an IAIG in addition to the current legal entity capital requirements and any group capital requirements imposed by relevant insurance laws and regulations.
Under the Companies Act, a company may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that: (1) the company is, or would after the payment be, unable to pay its liabilities as they become due, or (2) the realizable value of the company’s assets would thereby be less than its liabilities.
Under the Companies Act, a company may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that: (1) the company is, or would after the payment be, unable to pay its liabilities as they become due, or (2) the realizable value of the company’s assets would thereby be less than its liabilities. 31 Table of Contents Item 1.
The Head of the IAIG is a legal entity identified by the group-wide supervisor as controlling all of the insurance legal entities within the group and non-insurance legal entities which pose a risk to the insurance operations. In general, the Head of the IAIG is the uppermost entity to which obligations associated with being an IAIG designation attach.
The Head of the IAIG is a legal entity identified by the group-wide supervisor as controlling all of the group’s insurance legal entities and non-insurance legal entities that pose a risk to the group’s insurance operations. In general, the Head of the IAIG is the uppermost entity to which obligations associated with being an IAIG designation attach.
While we cannot accurately predict the amount of any such future assessments, or past or future insolvencies of competitors which would lead to such assessments, it is possible that any such assessments with respect to pending insurers’ impairments and insolvencies may have a material adverse effect on our financial condition, results of operations, liquidity or cash flows, and any reserves we have previously established for these potential assessments may not be adequate.
While we cannot accurately predict the amount of any such future assessments, or past or future insolvencies of competitors which would lead to such assessments, it is possible that any such assessments with respect to pending insurers’ impairments and insolvencies may have a material adverse effect on our financial condition, results of operations, liquidity or cash flows, and any reserves we have previously established for these potential assessments may not be adequate. 32 Table of Contents Item 1.
Going forward, we expect to build on our growth in the US, expand our footprint in the UK and explore options for transactions in other jurisdictions. • Pursue Attractive Inorganic Growth Opportunities. We plan to continue leveraging our expertise in sourcing and evaluating inorganic transactions to grow our business profitably.
Going forward, we expect to build on our growth in the US and explore options for transactions in other jurisdictions. • Pursue Attractive Inorganic Growth Opportunities – We plan to continue leveraging our expertise in sourcing and evaluating inorganic transactions to grow our business profitably.
Current law of New York permits the payment of dividends or distributions which, together with dividends or distributions paid during any calendar year, (1) is out of earned surplus and does not exceed the greater of (a) 10% of the insurer’s surplus as regards policyholders as of the end of the immediately preceding calendar year or (b) the net gain from operations of the insurer for the immediately preceding calendar year, not including realized capital gains, not to exceed 30% of the insurer’s surplus as regards policyholders as of the end of the immediately preceding calendar year or (2) do not exceed the lesser of (a) 10% of the insurer’s surplus as regards policyholders as of the end of the immediately preceding calendar year or (b) the net gain from operations of the insurer for the 30 Table of Contents Item 1.
Current law of New York permits the payment of dividends or distributions that, together with dividends or distributions paid during any calendar year, (1) is out of earned surplus and does not exceed the greater of (a) 10% of the insurer’s surplus as regards policyholders as of the end of the immediately preceding calendar year or (b) the net gain from operations of the insurer for the immediately preceding calendar year, not including realized capital gains, not to exceed 30% of the insurer’s surplus as regards policyholders as of the end of the immediately preceding calendar year or (2) do not exceed the lesser of (a) 10% of the insurer’s surplus as regards policyholders as of the end of the immediately preceding calendar year or (b) the net gain from operations of the insurer for the immediately preceding calendar year, not including realized capital gains.
As of December 31, 2023, ALRe, Athene Life Re International Ltd. (ALReI) and Athene Annuity Re Ltd. (AARe) had retroceded to ACRA $91 billion of reserve liabilities. In connection with future Participating Transactions, ACRA 2 will draw from ADIP II and ALRe their respective share of the amount of capital necessary to consummate such Participating Transactions.
As of December 31, 2024, ALRe, Athene Life Re International Ltd. (ALReI) and Athene Annuity Re Ltd. (AARe) had retroceded to ACRA $114.2 billion of reserve liabilities. In connection with future Participating Transactions, ACRA 2 will draw from ADIP II and ALRe their respective share of the amount of capital necessary to consummate such Participating Transactions.
Risk Factors–Risks Relating to Our Business Operations–A financial strength rating downgrade, potential downgrade or any other negative action by a rating agency could make our product offerings less attractive, inhibit our ability to acquire future business through acquisitions or reinsurance and increase our cost of capital, which could have a material adverse effect on our business for further discussion about risks associated with financial strength ratings. 21 Table of Contents Item 1.
Risk Factors–Risks Relating to Our Business Operations–A financial strength rating downgrade, potential downgrade or any other negative action by a rating agency could make our product offerings less attractive, inhibit our ability to acquire future business through acquisitions or reinsurance and increase our cost of capital, which could have a material adverse effect on our business for further discussion about risks associated with financial strength ratings.
Our diverse Fixed Indexed Annuity (FIA) product offerings are complemented by a number of innovative custom indices, which allow our customers to gain access to sophisticated strategies that are designed for better performance within our products. During 2023, approximately 64% of sales went to custom indices that are only available through our products.
Our diverse Fixed Indexed Annuity (FIA) product offerings are complemented by a number of innovative custom indices, which allow our customers to gain access to sophisticated strategies that are designed for better performance within our products. During 2024, approximately 52% of sales went to custom indices that are only available through our products.
Gross premiums and deposits are comprised of all products’ deposits, which generally are not included in revenues on the consolidated statements of income (loss), and premiums collected. Gross premiums and deposits include directly written business, flow reinsurance assumed as well as premiums and deposits generated from assumed block reinsurance transactions, net of those ceded through reinsurance.
Gross premiums and deposits are comprised of all products’ deposits, which generally are not included in revenues on the consolidated statements of income (loss), and premiums collected. Gross premiums and deposits include directly written business, flow reinsurance assumed as well as premiums and deposits generated from assumed block reinsurance transactions, net of those ceded through reinsurance to third-party reinsurers.
The Gramm-Leach-Bliley Act of 1999 (GLBA), which implemented fundamental changes in the regulation of the financial services industry in the United States, includes privacy requirements for financial institutions, including obligations to protect and safeguard consumers’ nonpublic personal information and records, and limitations on the re-disclosure and re-use of such information.
The Gramm-Leach-Bliley Act of 1999 (GLBA), which implemented fundamental changes in the regulation of the financial services industry in the US, includes privacy and security requirements for financial institutions, including obligations to protect and safeguard consumers’ nonpublic personal information and records, and limitations on the re-disclosure and re-use of such information.
As of December 31, 2023 and 2022, AARe’s EBS capital and surplus resulted in BSCR ratios, computed as available statutory economic capital and surplus divided by ECR, of 291% and 278%, respectively, which does not reflect the impact of any deferred taxes that may be recorded on a statutory basis as a result of the enactment by the Government of Bermuda of the Corporate Income Tax Act 2023 (Bermuda CIT).
As of December 31, 2024 and 2023, AARe’s EBS capital and surplus resulted in BSCR ratios, computed as available statutory economic capital and surplus divided by ECR, of 238% and 291%, respectively, which does not reflect the impact of any deferred taxes that may be recorded on an EBS basis as a result of the enactment by the Government of Bermuda of the Corporate Income Tax Act 2023 (Bermuda CIT).
Within 45 days of becoming aware of such failure, or of having reason to believe that such a failure has occurred, such insurer shall furnish the BMA with (1) unaudited statutory economic balance sheets and unaudited interim financial statements prepared in accordance with US GAAP covering such period as the BMA may require; (2) an opinion of the approved actuary in relation to total long-term business insurance technical provisions as set out in the statutory economic balance sheet, where applicable; (3) a long-term business solvency certificate in respect of the financial statements; and (4) a capital and solvency return reflecting an ECR prepared using post-failure data where applicable.
Business reason to believe that such a failure has occurred, such insurer shall furnish the BMA with (1) unaudited statutory economic balance sheets and unaudited interim financial statements prepared in accordance with US GAAP covering such period as the BMA may require; (2) an opinion of the approved actuary in relation to total long-term business insurance technical provisions as set out in the statutory economic balance sheet, where applicable; (3) a long-term business solvency certificate in respect of the financial statements; and (4) a capital and solvency return reflecting an ECR prepared using post-failure data where applicable.
Bermuda Class C insurers, Class E insurers and SPIs must at all times maintain a minimum margin of solvency (MMS) in accordance with the provisions of the Bermuda Insurance Act. Class C and Class E insurers must also maintain an enhanced capital requirement (ECR) in accordance with the provisions of the Bermuda Insurance Act.
Bermuda Class C insurers, Class E insurers and SPIs must at all times maintain a minimum margin of solvency (MMS) in accordance with the provisions of the Bermuda Insurance Act. Class C and Class E insurers must also maintain an ECR in accordance with the provisions of the Bermuda Insurance Act.
None of our employees are subject to collective bargaining agreements, nor are we aware of any efforts to implement such agreements. We are committed to a culture that prioritizes teamwork, engagement, inclusivity and pride of ownership.
None of our employees are subject to collective bargaining agreements, nor are we aware of any efforts to implement such agreements. We are dedicated to fostering a culture that prioritizes teamwork, engagement, inclusivity and pride of ownership.
SPIs are also required to file with the BMA a statutory financial return which includes, among other matters, the US GAAP financial statements, a cover sheet, a statement of control and changes of control, a solvency certificate, an annual statutory declaration, an own-risk assessment, alternative capital arrangements report, cyber risk management report and compliance with sanctions report. 28 Table of Contents Item 1.
SPIs are also required to file with the BMA a statutory financial return which includes, among other matters, the US GAAP financial statements, a cover sheet, a statement of control and changes of control, a solvency certificate, an annual statutory declaration, an own-risk assessment, alternative capital arrangements report, cyber risk management report and compliance with sanctions report.
A cornerstone of our investment philosophy is that given the operating leverage inherent in our business, modest investment outperformance can translate to outsized return performance. Because we maintain discipline in underwriting attractively priced liabilities, we have the ability to invest in a broad range of high-quality assets to generate attractive earnings.
A cornerstone of our investment philosophy is that given the operating leverage inherent in our business, modest investment outperformance can translate to outsized return performance. Because we maintain discipline in underwriting attractively priced liabilities, we have the ability to invest in a broad range of high-quality assets to generate attractive earnings. 16 Table of Contents Item 1.
Title VII of the Dodd-Frank Act divides regulatory responsibility for swaps in the United States between the SEC and the Commodity Futures Trading Commission (CFTC) with the CFTC regulating swaps and the SEC regulating security-based swaps.
Title VII of the Dodd-Frank Act divides regulatory responsibility for swaps in the US between the SEC and the Commodity Futures Trading Commission (CFTC) with the CFTC regulating swaps and the SEC regulating security-based swaps.
These laws generally require an insurance holding company and insurers that are members of such holding company system to register with their US insurance regulators and to file certain reports with those authorities, including information concerning their capital structure, ownership, financial condition, certain intercompany transactions and general business operations. Generally, 25 Table of Contents Item 1.
These laws generally require an insurance holding company and insurers that are members of such holding company system to register with their US insurance regulators and to file certain reports with those authorities, including information concerning their capital structure, ownership, financial condition, certain intercompany transactions and general business operations.
Restrictions on Dividends and Other Distributions Current law of two of the Athene Domiciliary States, Delaware and Iowa, permits the payment of ordinary dividends or distributions which, together with dividends or distributions paid during the preceding twelve months do not exceed the greater of (a) 10% of the insurer’s surplus as regards policyholders as of the immediately preceding year end or (b) the net gain from operations of the insurer for the preceding twelve-month period ending as of the immediately preceding year end.
Restrictions on Dividends and Other Distributions Current law of the Athene Domiciliary State, Iowa, permits the payment of ordinary dividends or distributions that, together with dividends or distributions paid during the preceding twelve months, do not exceed the greater of (a) 10% of the insurer’s surplus as regards policyholders as of the immediately preceding year end or (b) the net gain from operations of the insurer for the preceding twelve-month period ending as of the immediately preceding year end.
Also, regulatory actions with prospective impact can potentially have a significant impact on products that we currently sell. The NAIC continues to work to reform state regulation in various areas, including reporting requirements for investment transactions with related parties that may not be considered “affiliates” under the Holding Company Model Law. 26 Table of Contents Item 1.
Also, regulatory actions with prospective impact can potentially have a significant impact on products that we currently sell. The NAIC continues to work to reform state regulation in various areas, including reporting requirements for investment transactions with related parties that may not be considered “affiliates” under the Holding Company Model Law.
The Life Insurance and Market Research Association (LIMRA) estimates that approximately 14% of fixed annuity premium in the US for the nine months ended September 30, 2023 (the most recent period that specific market share data is currently available) included an income rider. As of December 31, 2023, approximately 28% of our deferred annuity account value contained rider benefits.
The Life Insurance and Market Research Association (LIMRA) estimates that approximately 17% of fixed annuity premium in the US for the nine months ended September 30, 2024 (the most recent period that specific market share data is currently available) included an income rider. As of December 31, 2024, approximately 26% of our deferred annuity account value contained rider benefits.
This includes annuities with income riders sourced through retail and reinsurance operations as well as acquisitions. Of the deferred annuities sourced through our retail and flow reinsurance channels, for the year ended December 31, 2023, 2% contained participating income riders and 4% contained guaranteed income riders.
This includes annuities with income riders sourced through retail and reinsurance operations as well as acquisitions. Of the deferred annuities sourced through our retail and flow reinsurance channels, for the year ended December 31, 2024, 2% contained participating income riders and 10% contained guaranteed income riders.
Under the Bermuda rules, our Bermuda reinsurance subsidiaries are required to file with the BMA group audited financial statements prepared using accounting principles generally accepted in the US (US GAAP) and an annual group capital and solvency return, which includes the Group Bermuda Solvency Capital Requirement model showing the Group’s Enhanced Capital Requirement, within five months after the financial year-end.
Under the Bermuda rules, our Bermuda reinsurance subsidiaries are required to file with the BMA group audited financial statements prepared using accounting principles generally accepted in the United States of America (US GAAP) and an annual group capital and solvency return, which includes the Group Bermuda Solvency Capital Requirement (BSCR) model showing the Group’s Enhanced Capital Requirement (ECR), within five months after the financial year-end.
Long-Term Issuer Credit Rating/Issuer Default Rating bbb+ A- A- NR Outlook Positive Stable Stable NR Athene Insurance Subsidiaries 2 Financial Strength Rating A A+ A+ A1 Outlook Positive Stable Stable Stable 1 Athene insurance subsidiaries include AARe, ALRe, ALReI, Athene Annuity & Life Assurance Company (AADE), Athene Annuity and Life Company (AAIA), Athene Annuity & Life Assurance Company of New York (AANY), Athene Life Insurance Company of New York (ALICNY), Athene Co-Invest Reinsurance Affiliate 1A Ltd.
Long-Term Issuer Credit Rating/Issuer Default Rating a- A- A- NR Outlook Stable Stable Stable NR Athene Insurance Subsidiaries 1 Financial Strength Rating A+ A+ A+ A1 Outlook Stable Stable Stable Stable 1 Athene insurance subsidiaries include AARe, ALRe, ALReI, AAIA, Athene Annuity & Life Assurance Company of New York (AANY), Athene Life Insurance Company of New York (ALICNY), Athene Co-Invest Reinsurance Affiliate 1A Ltd.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO has over 20 years of information technology experience and over 15 years of information security experience; is a Certified Information Systems Security Professional, Certified Information Systems Auditor, Certified Information Systems Manager, and Check Point Certified Engineer; and holds a Bachelor of Arts in statistical science, a Bachelor of Science in computer science, and a Master of Business Administration in business.
Biggest changeOur CISO has over 25 years of information technology experience and over 20 years of information security experience; is a Certified Information Systems Security Professional, a Certified Information Systems Manager, and holds a Bachelor of Arts in statistical science, a Bachelor of Science in computer science, and a Master of Business Administration in business.
Risk Factors—Risks Relating to Our Business Operations—Interruption or other operational failures in telecommunications, information technology and other operational systems, including as a result of threat actors attacking those systems, or a failure to maintain the security, integrity, confidentiality or privacy of sensitive data residing on those systems, including as a result of human 62 Table of Contents error, could have a material adverse effect on our business and Item 1A.
Risk Factors—Risks Relating to Our Business Operations—Interruption or other operational failures in telecommunications, information technology and other operational systems, including as a result of threat actors attacking those systems, or a failure to maintain the security, integrity, confidentiality or privacy of sensitive data residing on those systems, including as a result of human error, could have a 62 Table of Contents material adverse effect on our business and Item 1A.
As of February 1, 2024, we have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, our business strategy, results of operation or financial condition. See Item 1A.
We have not identified any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, our business strategy, results of operation or financial condition. See Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We own our corporate headquarters located at 7700 Mills Civic Pkwy, West Des Moines, Iowa. We lease our head office for Bermuda operations in Hamilton, Bermuda. We consider these facilities and other properties to be suitable and adequate for the management and operation of our business.
Biggest changeItem 2. Properties We own our corporate headquarters located at 7700 Mills Civic Parkway, West Des Moines, Iowa. We lease our head office for Bermuda operations in Hamilton, Bermuda. We consider these facilities and other properties to be suitable and adequate for the management and operation of our business. Item 3.
Added
Legal Proceedings We are subject to litigation arising in the ordinary course of our business, including litigation principally relating to our retail business. We cannot assure you that our insurance coverage will be adequate to cover all liabilities arising out of such claims. The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty.
Added
There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. In management’s opinion, the ultimate disposition of any current legal proceedings or claims brought against us will not have a material effect on our financial condition, results of operations or cash flows.
Added
Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.
Added
From time to time, in the ordinary course of business and like others in the insurance and financial services industries, we receive requests for information from government agencies in connection with such agencies’ regulatory or investigatory authority. Such requests can include financial or market conduct examinations, subpoenas or demand letters for documents to assist such agencies in audits or investigations.
Added
We and each of our US insurance subsidiaries review such requests and notices and take appropriate action. We have been subject to certain requests for information and investigations in the past and could be subject to them in the future.
Added
Descriptions of certain legal proceedings affecting us, if any, are included in Note 16 – Commitments and Contingencies to the consolidated financial statements. Item 4. Mine Safety Disclosures Not applicable. 63 Table of Contents PART II

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Item 3. Legal Proceedings We are subject to litigation arising in the ordinary course of our business, including litigation principally relating to our indexed annuity business. We cannot assure you that our insurance coverage will be adequate to cover all liabilities arising out of such claims.
Added
Item 3. Legal Proceedings and Note 16 – Commitments and Contingencies to the consolidated financial statements for certain matters to which we are a party, if any. Even if we ultimately prevail in any litigation or receive positive results from investigations, we could incur material legal costs or our reputation could be materially adversely affected.
Removed
The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated.
Added
Beginning in March 2024, a number of putative class actions were filed in federal courts in the US against certain of our customers, in their respective capacities as plan sponsors, alleging violations of ERISA in connection with their transfer of pension obligations under defined benefit plans governed under ERISA and their purchase of pension group annuity contracts from us.
Removed
In management’s opinion, the ultimate disposition of any current legal proceedings or claims brought against us will not have a material effect on our financial condition, results of operations or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.
Added
The lawsuits seek, inter alia, that defendants guarantee the annuities purchased from us and disgorge any profits earned from the transactions. Although we are not a named defendant, the lawsuits make several negative allegations about us and our business, which we believe to be untrue.
Removed
From time to time, in the ordinary course of business and like others in the insurance and financial services industries, we receive requests for information from government agencies in connection with such agencies’ regulatory or investigatory authority. Such requests can include financial or market conduct examinations, subpoenas or demand letters for documents to assist such agencies in audits or investigations.
Added
Recently, similar claims have been filed against customers of other insurance companies that have transferred their pension obligations to such other insurance companies.
Removed
We and each of our US insurance subsidiaries review such requests and notices and take appropriate action. We have been subject to certain requests for information and investigations in the past and could be subject to them in the future.
Added
Negative public perceptions of us and our business have adversely affected, and may continue to adversely affect, our ability to attract and retain customers in our pension group annuity business, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Removed
Descriptions of certain legal proceedings affecting us, if any, are included in Note 17 – Commitments and Contingencies to the consolidated financial statements. Item 4. Mine Safety Disclosures Not applicable. 63 Table of Contents PART II
Added
To the extent these lawsuits continue to spread to customers of other insurance companies, future activity in the overall pension risk transfer industry may be reduced.
Added
In addition, these lawsuits could lead to increased regulatory and governmental scrutiny of our business and the industry overall, and/or result in us becoming involved in these lawsuits or even being named as a defendant in future lawsuits related to our pension group annuity business, which could result in additional expenses, adverse regulations and oversight, and/or additional reputational harm.
Added
These lawsuits could also spur similar copycat lawsuits, which could further impact our pension group annuity business.
Added
To the extent that the inflows in our pension group annuity business continue to be negatively impacted by these lawsuits, and in the event of any related regulatory and governmental scrutiny, we may seek to increase our inflows in our other distribution channels, including by issuing additional funding agreements within our institutional channel.
Added
However, there are no assurances that we would be successful in replacing any future pension group annuity inflows with inflows from other distribution channels or that such other inflows would result in comparable spreads. 61 Table of Contents Item 1B. Unresolved Staff Comments None.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 63 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 64 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 65 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 113 Item 8. Financial Statements 117
Biggest changeItem 4. Mine Safety Disclosures 63 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 64 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 65 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 110 Item 8. Financial Statements 114

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe distribution of our AFS securities, including related parties, by type is as follows: December 31, 2023 (In millions, except percentages) Amortized Cost Allowance for Credit Losses Unrealized Gains Unrealized Losses Fair Value Percent of Total AFS securities US government and agencies $ 6,161 $ — $ 67 $ (829) $ 5,399 3.6 % US state, municipal and political subdivisions 1,296 — — (250) 1,046 0.7 % Foreign governments 2,083 — 71 (255) 1,899 1.3 % Corporate 88,343 (129) 830 (10,798) 78,246 52.8 % CLO 20,506 (2) 261 (558) 20,207 13.6 % ABS 13,942 (49) 120 (630) 13,383 9.0 % CMBS 7,070 (29) 52 (502) 6,591 4.4 % RMBS 8,160 (381) 252 (464) 7,567 5.1 % Total AFS securities 147,561 (590) 1,653 (14,286) 134,338 90.5 % AFS securities – related parties Corporate 1,423 — 1 (72) 1,352 0.9 % CLO 4,367 — 21 (120) 4,268 2.9 % ABS 8,665 (1) 34 (309) 8,389 5.7 % Total AFS securities – related parties 14,455 (1) 56 (501) 14,009 9.5 % Total AFS securities, including related parties $ 162,016 $ (591) $ 1,709 $ (14,787) $ 148,347 100.0 % 83 Table of Contents
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations The distribution of our AFS securities, including related parties, by type is as follows: December 31, 2024 (In millions, except percentages) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value Percentage of Total AFS securities US government and agencies $ 8,413 $ — $ 8 $ (1,270) $ 7,151 3.9 % US state, municipal and political subdivisions 1,167 — — (246) 921 0.5 % Foreign governments 2,082 — — (514) 1,568 0.8 % Corporate 95,006 (175) 485 (11,731) 83,585 45.3 % CLO 29,524 — 266 (608) 29,182 15.8 % ABS 24,779 (76) 138 (640) 24,201 13.1 % CMBS 11,158 (60) 75 (432) 10,741 5.8 % RMBS 8,587 (397) 228 (403) 8,015 4.4 % Total AFS securities 180,716 (708) 1,200 (15,844) 165,364 89.6 % AFS securities – related parties Corporate 2,502 — 18 (59) 2,461 1.3 % CLO 6,130 — 18 (113) 6,035 3.3 % ABS 10,899 (1) 21 (288) 10,631 5.8 % Total AFS securities – related parties 19,531 (1) 57 (460) 19,127 10.4 % Total AFS securities, including related parties $ 200,247 $ (709) $ 1,257 $ (16,304) $ 184,491 100.0 % December 31, 2023 (In millions, except percentages) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value Percentage of Total AFS securities US government and agencies $ 6,161 $ — $ 67 $ (829) $ 5,399 3.6 % US state, municipal and political subdivisions 1,296 — — (250) 1,046 0.7 % Foreign governments 2,083 — 71 (255) 1,899 1.3 % Corporate 88,343 (129) 830 (10,798) 78,246 52.8 % CLO 20,506 (2) 261 (558) 20,207 13.6 % ABS 13,942 (49) 120 (630) 13,383 9.0 % CMBS 7,070 (29) 52 (502) 6,591 4.4 % RMBS 8,160 (381) 252 (464) 7,567 5.1 % Total AFS securities 147,561 (590) 1,653 (14,286) 134,338 90.5 % AFS securities – related parties Corporate 1,423 — 1 (72) 1,352 0.9 % CLO 4,367 — 21 (120) 4,268 2.9 % ABS 8,665 (1) 34 (309) 8,389 5.7 % Total AFS securities – related parties 14,455 (1) 56 (501) 14,009 9.5 % Total AFS securities, including related parties $ 162,016 $ (591) $ 1,709 $ (14,787) $ 148,347 100.0 % 82 Table of Contents Item 7.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of economic interests.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of the economic interests.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of economic interests.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of the economic interests.
Other Operating Expense s Other operating expenses excludes integration, restructuring and other non-operating expenses, stock compensation and long-term incentive plan expenses, interest expense, policy acquisition expenses, net of deferrals, and the proportionate share of the ACRA operating expenses associated with the noncontrolling interests.
Other Operating Expense s Other operating expenses excludes interest expense, policy acquisition expenses, net of deferrals, integration, restructuring and other non-operating expenses, stock compensation and long-term incentive plan expenses and the proportionate share of the ACRA operating expenses associated with the noncontrolling interests.
Net invested assets include (a) total investments on the consolidated balance sheets, with AFS securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
Net invested assets include (a) total investments on the consolidated balance sheets, with AFS securities, trading securities and mortgage loans at cost or amortized cost, excluding derivatives, (b) cash and cash equivalents and restricted cash, (c) investments in related parties, (d) accrued investment income, (e) VIE and VOE assets, liabilities and noncontrolling interest adjustments, (f) net investment payables and receivables, (g) policy loans ceded (which offset the direct policy loans in total investments) and (h) an adjustment for the allowance for credit losses.
Unrealized, allowances and other investment gains and losses are comprised of the fair value adjustments of trading securities (other than certain equity tranche securities) and mortgage loans, investments held under the fair value option, derivative gains and losses not hedging FIA index credits, foreign exchange impacts and the change in provision for credit losses recognized in operations net of the change in AmerUs Closed Block fair value reserve related to the corresponding change in fair value of investments.
Unrealized, allowances and other investment gains and losses are comprised of the fair value adjustments of trading securities (other than certain equity tranche securities) and mortgage loans, investments held under the fair value option, derivative gains and losses not hedging FIA index credits, all foreign exchange impacts and the change in provision for credit losses recognized in operations net of the change in AmerUs Closed Block fair value reserve related to the corresponding change in fair value of investments.
Common Stockholder The adjustments to net income (loss) available to Athene Holding Ltd. common stockholder are comprised of investment gains (losses), net of offsets; non-operating change in insurance liabilities and related derivatives; inte gration, restructuring and other non-operating expenses; stock compensation expense and the non-operating income tax expense (benefit) on these adjustments.
Common Stockholder The adjustments to net income (loss) available to Athene Holding Ltd. common stockholder are comprised of investment gains (losses), net of offsets; non-operating change in insurance liabilities and related derivatives; inte gration, restructuring and other non-operating expenses; stock compensation expense and the non-operating income tax expense (benefit) related to these adjustments.
Unlocking in 2023 was $45 million favorable consisting of $297 million of favorable future policy benefit reserve unlocking, partially offset by $252 million of unfavorable negative VOBA and deferred profit liability unlocking. The net favorable unlocking primarily related to higher interest rates and favorable mortality experience lowering future benefit payments.
Unlocking in 2023 was $45 million favorable consisting of $297 million of favorable future policy benefit reserve unlocking, partially offset by $252 million of unfavorable negative VOBA and deferred profit liability unlocking. The favorable unlocking primarily related to higher interest rates and favorable mortality experience lowering future benefit payments.
At the closing of the merger, each issued and outstanding AHL Class A common share (other than shares held by Apollo, the AOG or the respective direct or indirect wholly owned subsidiaries of Athene or the AOG) was converted automatically into 1.149 shares of AGM common shares with cash paid in lieu of any fractional AGM common shares.
At the closing of the merger, each issued and outstanding AHL Class A common share (other than shares held by Apollo, the Apollo Operating Group (AOG) or the respective direct or indirect wholly owned subsidiaries of Athene or the AOG) was converted automatically into 1.149 shares of AGM common shares with cash paid in lieu of any fractional AGM common shares.
Our spread related earnings equals net income (loss) available to AHL common stockholder adjusted to eliminate the impact of the following: • Investment Gains (Losses), Net of Offsets— Consists of the realized gains and losses on the sale of AFS securities, the change in fair value of reinsurance assets, unrealized gains and losses, changes in the provision for credit losses and other investment gains and losses.
Our spread related earnings equals net income (loss) available to AHL common stockholder adjusted to eliminate the impact of the following: • Investment Gains (Losses), Net of Offsets— Consists of the realized gains and losses on the sale of AFS securities and mortgage loans, the change in fair value of reinsurance assets, unrealized gains and losses, changes in the provision for credit losses and other investment gains and losses.
While the substantial majority of our investment portfolio has been allocated to corporate bonds and structured credit products, a key component of our investment strategy is the opportunistic acquisition of investment funds with attractive risk and return profiles. Our investment fund portfolio consists of funds or similar equity structures that employ various strategies including equity, hybrid and yield funds.
While the substantial majority of our investment portfolio has been allocated to corporate bonds and structured credit products, a key component of our investment strategy is the opportunistic acquisition of investment funds with attractive risk and return profiles. Our investment fund portfolio consists of funds or similar equity structures that employ various strategies including equity and credit funds.
In addition to our fixed income portfolio, we opportunistically allocate approximately 5% of our portfolio to alternative investments where we primarily focus on fixed income-like, cash flow-based investments. Net investment income on the consolidated statements of income (loss) included management fees under our investment management arrangements with Apollo.
In addition to our fixed income portfolio, we opportunistically allocate approximately 5% of our portfolio to alternative investments where we primarily focus on fixed income-like, cash flow-based investments. Net investment income on the consolidated statements of income (loss) includes management fees under our investment management arrangements with Apollo.
Except with respect to reinvestment activity relating to acquired blocks of businesses, we typically buy and hold investments to maturity throughout the duration of market fluctuations, therefore, the period-over-period impacts in unrealized gains and losses are not necessarily indicative of current operating fundamentals or future performance. Adjusted debt-to-capital ratio should not be used as a substitute for the debt-to-capital ratio.
Except with respect to reinvestment activity relating to acquired blocks of businesses, we typically buy and hold investments to maturity throughout the duration of market fluctuations, therefore, the period-over-period impacts in unrealized gains and losses are not necessarily indicative of current operating fundamentals or future performance. Adjusted leverage ratio should not be used as a substitute for the leverage ratio.
For such contracts with non-economic US GAAP losses, the SRE reserve accretes interest using an imputed discount rate that produces zero gain or loss at issuance. • Integration, Restructuring, and Other Non-operating Expenses— Consists of restructuring and integration expenses related to acquisitions and block reinsurance costs as well as certain other expenses, which are not predictable or related to our underlying profitability drivers. • Stock Compensation Expense— Consists of stock compensation expenses associated with our share incentive plans, including long-term incentive expenses, which are not related to our underlying profitability drivers and fluctuate from time to time due to the structure of our plans. • Income Tax (Expense) Benefit— Consists of the income tax effect of all income statement adjustments, including our Apollo investment in prior years, and is computed by applying the appropriate jurisdiction’s tax rate to all adjustments subject to income tax.
For such contracts with non-economic US GAAP losses, the SRE reserve accretes interest using an imputed discount rate that produces zero gain or loss at issuance. • Integration, Restructuring, and Other Non-operating Expenses— Consists of restructuring and integration expenses related to acquisitions and block reinsurance costs as well as certain other expenses, which are not predictable or related to our underlying profitability drivers. • Stock Compensation Expense— Consists of stock compensation expenses associated with our share incentive plans, including long-term incentive expenses, which are not related to our underlying profitability drivers and fluctuate from time to time due to the structure of our plans. • Income Tax (Expense) Benefit— Consists of the income tax effect of all income statement adjustments and is computed by applying the appropriate jurisdiction’s tax rate to all adjustments subject to income tax.
A significant majority of our deferred annuity products have crediting rates that we may reset annually upon renewal, following the expiration of the current guaranteed period. While we have the contractual ability to lower these crediting rates to the guaranteed minimum levels, our willingness to do so may be limited by competitive pressures. See Item 7A.
A significant majority of our deferred annuity products have crediting rates that we may reset annually upon renewal, following the expiration of the current guaranteed period. While we have the contractual ability to lower these crediting rates to the guaranteed minimum levels, our willingness to do so may be limited by competitive pressures.
We expect that our credit profile and our reputation as a solutions provider will help us continue to source additional reinsurance partners, which will further diversify our flow reinsurance channel. Within our institutional channel, we generated inflows of $17.6 billion, $21.3 billion and $25.7 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
We expect that our credit profile and our reputation as a solutions provider will help us continue to source additional reinsurance partners, which will further diversify our flow reinsurance channel. Within our institutional channel, we generated inflows of $29.7 billion, $17.6 billion and $21.3 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
To further support our growth and capital deployment opportunities following the deployment of capital by ACRA 1, we funded ACRA 2 in December of 2022 as another long-duration, on-demand capital vehicle. Effective July 1, 2023, ALRe sold 50% of its non-voting, economic interests in ACRA 2 to ADIP II for $640 million, while maintaining all of ACRA 2’s voting interests.
To further support our growth and capital deployment opportunities following the deployment of capital by ACRA 1, we funded ACRA 2 in December 2022 as another long-duration, on-demand capital vehicle. Effective July 1, 2023, ALRe sold 50% of its non-voting, economic interests in ACRA 2 to ADIP II for $640 million.
We have established a significant base of earnings and, as of December 31, 2023, have an expected annual net investment spread, which measures our investment performance plus strategic capital management fees less the total cost of our liabilities, of 1–2% over the estimated 8.5 year weighted-average life of our net reserve liabilities.
We have established a significant base of earnings and, as of December 31, 2024, have an expected annual net investment spread, which measures our investment performance plus strategic capital management fees less the total cost of our liabilities, of 1–2% over the estimated 7.8 year weighted-average life of our net reserve liabilities.
In addition, our investment portfolio is constrained by its scenario-based capital ratio limits and its liquidity limits. 80 Table of Contents Item 7.
In addition, our investment portfolio is constrained by its scenario-based capital ratio limits and its liquidity limits. 78 Table of Contents Item 7.
On November 6, 2023, we entered into an agreement with a Japanese counterparty, effective October 1, 2023, pursuant to which we agreed to reinsure a block of whole life insurance policies on a coinsurance basis. 3 Gross outflows consist of full and partial policyholder withdrawals on deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, funding agreement repurchases and maturities and reinsurance outflows.
On November 6, 2023, we entered into an agreement with a Japanese counterparty, effective October 1, 2023, pursuant to which we agreed to reinsure a block of whole life insurance policies on a coinsurance basis. 3 Gross outflows include full and partial policyholder withdrawals on deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, payments related to interest, maturities and repurchases of funding agreements and block reinsurance outflows.
With support from Apollo, we are a solutions provider with a proven track record of closing transactions, which we believe makes us the ideal partner to insurance companies seeking to restructure their business. We expect that our inorganic channel will continue to be an important source of profitable growth in the future. 67 Table of Contents Item 7.
With support from Apollo, we are a solutions provider with a proven track record of closing transactions, which we believe makes us the ideal partner to insurance companies seeking to restructure their business. We expect that our inorganic channel will continue to be an important source of profitable growth in the future.
Our strong financial position and diverse, capital-efficient products allow us to be dependable partners with IMOs, banks and broker-dealers as well as consistently write new business. We expect our retail channel to continue to benefit from our credit profile, product launches and continuous product enhancements.
Our strong financial position and diverse, capital-efficient products allow us to be dependable partners with IMOs, banks and broker-dealers as well as to consistently write new business. We expect our retail channel to continue to benefit from our credit profile, product launches and continuous product enhancements as we look to capture new potential distribution opportunities.
To support our growth strategies and capital deployment opportunities, we established ACRA 1 as a long-duration, on-demand capital vehicle. We own 36.55% of the economic interests in ACRA 1, with the remaining 63.45% of the economic interests being owned by ADIP I, a series of funds managed by Apollo.
To support our growth strategies and capital deployment opportunities, we established ACRA 1 as a long-duration, on-demand capital vehicle. We directly own 37% of the economic interests in ACRA 1, with the remaining 63% of the economic interests being owned by ADIP I, a series of funds managed by Apollo.
Of these, approximately $16.8 billion, or 7.7% of our net invested assets, were structured securities for which Apollo or an affiliated direct origination platform was the manager of the underlying securitization vehicle, but the underlying collateral, borrower or other credit party is generally unaffiliated with us.
Of these, approximately $18.5 billion, or 7.4% of our net invested assets, were structured securities for which Apollo or an affiliated direct origination platform was the manager of the underlying securitization vehicle, but the underlying collateral, borrower or other credit party is generally unaffiliated with us.
All changes in the allowance for expected credit losses, whether due to passage of time, change in expected cash flows or change in fair value are recorded through the provision for credit losses within investment related gains (losses) on the consolidated statements of income (loss).
All changes in the allowance for expected credit losses, whether due to passage of time, change in expected cash flows or change in fair value are recorded through the provision for credit losses within investment related gains (losses) on the consolidated statements of income (loss). 81 Table of Contents Item 7.
Our net invested assets, which are those that directly back our net reserve liabilities as well as surplus assets, were $217.4 billion and $196.5 billion as of December 31, 2023 and 2022, respectively. Apollo’s knowledge of our funding structure and regulatory requirements allows it to design customized strategies and investments for our portfolio.
Our net invested assets, which are those that directly back our net reserve liabilities as well as surplus assets, were $248.6 billion and $217.4 billion as of December 31, 2024 and 2023, respectively. Apollo’s knowledge of our funding structure and regulatory requirements allows it to design customized strategies and investments for our portfolio.
The increase was driven by an increase in interest sensitive contract benefits, an increase in market risk benefits remeasurement (gains) losses, an increase in future policy and other policy benefits, an increase in policy and other operating expenses and an increase in DAC, DSI and VOBA amortization.
The decrease was driven by a decrease in future policy and other policy benefits and a decrease in market risk benefits remeasurement (gains) losses, partially offset by an increase in interest sensitive contract benefits, an increase in policy and other operating expenses and an increase in DAC, DSI and VOBA amortization.
Together with net income (loss) available to AHL common stockholder, we believe spread related earnings provides a meaningful financial metric that helps investors understand our underlying results and profitability. Spread related earnings should not be used as a substitute for net income (loss) available to AHL common stockholder. 71 Table of Contents Item 7.
Together with net income (loss) available to AHL common stockholder, we believe spread related earnings provides a meaningful financial metric that helps investors understand our underlying results and profitability. Spread related earnings should not be used as a substitute for net income (loss) available to AHL common stockholder.
Adjusted capitalization includes our adjusted AHL common stockholder’s equity, preferred stock and the notional value of our debt. Adjusted AHL common stockholder’s equity is calculated as the ending AHL stockholders’ equity excluding AOCI, the cumulative changes in fair value of funds withheld and modco reinsurance assets and mortgage loan assets as well as preferred stock.
Adjusted AHL common stockholder’s equity is calculated as the ending AHL stockholders’ equity excluding AOCI, the cumulative changes in fair value of funds withheld and modco reinsurance assets and mortgage loan assets as well as preferred stock.
Gross organic inflows for the year ended December 31, 2023 increased $15.6 billion, or 33%, reflecting the strength of our multi-channel distribution platform and our ability to quickly pivot into optimal and profitable channels as opportunities arise.
Gross organic inflows for the year ended December 31, 2024 increased $7.6 billion, or 12%, reflecting the strength of our multi-channel distribution platform and our ability to quickly pivot into optimal and profitable channels as opportunities arise.
For the nine months ended September 30, 2023 (the most recent period for which specific market share data is available), we were the eleventh largest provider of RILAs based on sales of $650 million, translating to a 1.9% market share.
For the nine months ended September 30, 2024 (the most recent period for which specific market share data is available), we were the eleventh largest provider of RILAs based on sales of $823 million, translating to a 1.7% market share.
If prevailing interest rates were to rise, we believe the yield on our new investment purchases may also rise and our investment income from floating rate investments would increase, while the value of our existing investments may decline.
Our investment portfolio consists predominantly of fixed maturity investments. See – Investment Portfolio . If prevailing interest rates were to rise, we believe the yield on our new investment purchases may also rise and our investment income from floating rate investments would increase, while the value of our existing investments may decline.
These measures should be considered supplementary to our results in accordance with US GAAP and should not be viewed as a substitute for the corresponding US GAAP measures. See Non-GAAP Measure Reconciliations for the appropriate reconciliations to the most directly comparable US GAAP measures. 70 Table of Contents Item 7.
These measures should be considered supplementary to our results in accordance with US GAAP and should not be viewed as a substitute for the corresponding US GAAP measures. See –Non-GAAP Measure Reconciliations for the appropriate reconciliations to the most directly comparable US GAAP measures.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview 66 Industry Trends and Competition 68 Key Operating and Non-GAAP Measures 70 Results of Operations 73 Investment Portfolio 80 Non-GAAP Measure Reconciliations 98 Liquidity and Capital Resources 102 Critical Accounting Estimates and Judgments 108 65 Table of Contents Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview 66 Industry Trends and Competition 68 Key Operating and Non-GAAP Measures 70 Results of Operations 73 Investment Portfolio 78 Non-GAAP Measure Reconciliations 95 Liquidity and Capital Resources 99 Critical Accounting Estimates and Judgments 105 65 Table of Contents Item 7.
Adverse economic conditions may result from domestic and global economic and political developments, including plateauing or decreasing economic growth and business activity, civil unrest, geopolitical tensions or military action, such as the armed conflicts in the Middle East and between Ukraine and Russia, and corresponding sanctions imposed on Russia by the US and other countries, and new or evolving legal and regulatory requirements on business investment, hiring, migration, labor supply and global supply chains. 68 Table of Contents Item 7.
Adverse economic conditions may result from domestic and global economic and political developments, including plateauing or decreasing economic growth and business activity, changes to US and foreign tariff policies, civil unrest, geopolitical tensions or military action, such as the armed conflicts in the Middle East and between Ukraine and Russia, and corresponding sanctions imposed on Russia by the US and other countries, and new or evolving legal and regulatory requirements on business investment, hiring, migration, labor supply and global supply chains.
The total amounts we incurred, directly and indirectly, from Apollo and its affiliates were $1.1 billion, $1.1 billion, and $936 million, respectively, for the years ended December 31, 2023, 2022 and 2021.
The total amounts we incurred, directly and indirectly, from Apollo and its affiliates were $1.3 billion, $1.1 billion, and $1.1 billion, respectively, for the years ended December 31, 2024, 2023 and 2022.
Adjusted Debt-to-Capital Ratio Adjusted debt-to-capital ratio is a non-GAAP measure used to evaluate our capital structure excluding the impacts of AOCI and the cumulative changes in fair value of funds withheld and modco reinsurance assets as well as mortgage loan assets, net of tax. Adjusted debt-to-capital ratio is calculated as total debt at notional value divided by adjusted capitalization.
Adjusted Senior Debt-to-Capital Ratio Adjusted senior debt-to-capital ratio is a non-GAAP measure used to evaluate our capital structure excluding the impacts of AOCI and the cumulative changes in fair value of funds withheld and modco reinsurance assets as well as mortgage loan assets, net of tax.
Net investment earned rate is a key measure of our investment performance while cost of funds is a key measure of the cost of our policyholder benefits and liabilities. Strategic capital management fees consist of management fees received by us for business managed for others, primarily the noncontrolling interest portion of our business ceded to ACRA.
Net investment earned rate is a key measure of our investment performance while cost of funds is a key measure of the cost of our policyholder benefits and liabilities. Strategic capital management fees consist of management fees received by us for business managed for others.
Since entering the pension group annuity market in 2017, we have closed 47 deals resulting in the issuance or reinsurance of group annuities of $51.8 billion with more than 560,000 plan participants as of December 31, 2023. We expect to grow our institutional channel by continuing to engage in pension group annuity transactions and programmatic issuances of funding agreements.
Since entering the pension group annuity market in 2017, we have closed 49 deals resulting in the issuance or reinsurance of group annuities of $52.7 billion with more than 550,000 plan participants as of December 31, 2024. We expect to grow our institutional channel by continuing to engage in pension group annuity transactions and programmatic issuances of funding agreements.
We plan to continue to grow and diversify our business, both organically and inorganically, with a focus on international expansion, particularly in Asia. We believe our corporate development team, with support from Apollo, has an industry-leading ability to source, underwrite and expeditiously close transactions.
Our inorganic channel has contributed significantly to our growth through both acquisitions and block reinsurance transactions. We plan to continue to grow and diversify our business, both organically and inorganically, with a focus on international expansion, particularly in Asia. We believe our corporate development team, with support from Apollo, has an industry-leading ability to source, underwrite and expeditiously close transactions.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Net Investment Spread Net investment spread is a key measure of profitability used in analyzing the trends of our core business operations. Net investment spread measures our investment performance plus our strategic capital management fees, less our total cost of funds.
Net Investment Spread Net investment spread is a key measure of profitability used in analyzing the trends of our core business operations. Net investment spread measures our investment performance plus our strategic capital management fees, less our total cost of funds.
Unlocking in 2023 was $36 million unfavorable mainly related to an increase in lapse assumptions and changes to projected interest crediting, while unlocking in 2022 was $2 million favorable.
Unlocking in 2024 was $21 million unfavorable mainly related to changes to projected interest crediting and an increase in lapse assumptions, while unlocking in 2023 was $36 million unfavorable mainly related to an increase in lapse assumptions and changes to projected interest crediting.
For our non-GAAP measure of net invested assets, we provide visibility into the underlying assets within these reinsurance portfolios. The below table looks through to the underlying assets within our reinsurance portfolios to determine the related party status. As of December 31, 2023, $28.7 billion, or 13.1% of our total net invested assets were related party investments.
For our non-GAAP measure of net invested assets, we provide visibility into the underlying assets within these reinsurance portfolios. The below table looks through to the underlying assets within our reinsurance portfolios to determine the related party status. As of December 31, 2024, $31.9 billion, or 12.8% of our total net invested assets were related party investments.
As of December 31, 2023, these investments totaled $42.3 billion, or 14.2% of our total assets. Related party AFS and trading securities primarily consist of structured securities for which Apollo is the manager of the underlying securitization vehicle and securities issued by Apollo direct origination platforms including Wheels and MidCap Financial.
As of December 31, 2024, these investments totaled $47.4 billion, or 13.0% of our total assets. Related party AFS and trading securities primarily consist of structured securities for which Apollo is the manager of the underlying securitization vehicle and securities issued by Apollo direct origination platforms including Wheels and MidCap Financial.
The 2023 unlocking was driven by a decrease of $94 million in interest sensitive contract benefits and a decrease of $45 million in future policy and other policy benefits, partially offset by an increase of $81 million in market risk benefits and an increase of $36 million related to DAC, DSI and VOBA, compared to a decrease of $49 million in interest sensitive contract benefits, a decrease of $43 million in market risk benefits and a decrease of $2 million related to DAC, DSI and VOBA in 2022.
The 2024 unlocking was driven by an increase of $62 million in market risk benefits, an increase of $21 million related to DAC, DSI and VOBA and an increase of $8 million in interest sensitive contract benefits, partially offset by a decrease of $60 million in future policy and other policy benefits, compared to a decrease of $94 million in interest sensitive contract benefits and a decrease of $45 million in future policy and other policy benefits, partially offset by an increase of $81 million in market risk benefits and an increase of $36 million related to DAC, DSI and VOBA in 2023.
In the total annuity market, for the nine months ended September 30, 2023 (the most recent period for which specific market share data is available), we were the largest provider of annuities based on sales of $22.0 billion, translating to an 8.2% market share.
In the total fixed annuity market, for the nine months ended September 30, 2024 (the most recent period for which specific market share data is available), we were the largest provider of fixed annuities based on sales of $27.2 billion, translating to an 11.3% market share.
The weighted-average life includes deferred annuities, pension group annuities, funding agreements, payout annuities and other products. Our total assets have grown to $300.6 billion as of December 31, 2023. For the year ended December 31, 2023, we generated a net investment spread of 1.93%.
The weighted-average life includes deferred annuities, pension group annuities, funding agreements, payout annuities, life insurance contracts and other products. Our total assets have grown to $363.3 billion as of December 31, 2024. For the year ended December 31, 2024, we generated a net investment spread of 1.78%.
The decrease in our institutional channel was driven by lower funding agreement and pension group annuity inflows. We issued funding agreements in the aggregate principal amount of $7.2 billion, $10.0 billion and $11.9 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
The increase in our institutional channel was driven by higher funding agreement inflows, partially offset by lower pension group annuity inflows. We issued funding agreements in the aggregate principal amount of $28.7 billion, $7.2 billion and $10.0 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
We issued group annuity contracts in the aggregate principal amount of $10.4 billion, $11.2 billion and $13.8 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
We issued pension group annuity contracts in the aggregate principal amount of $918 million, $10.4 billion and $11.2 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
The increase in adjustments to net income (loss) available to Athene Holding Ltd. common stockholder in 2023 compared to 2022 was primarily driven by the increase in investment gains (losses), net of offsets, and an increase in the non-operating income tax benefit, partially offset by the decrease in non-operating change in insurance liabilities and related derivatives.
The decrease in adjustments to net income (loss) available to Athene Holding Ltd. common stockholder in 2024 compared to 2023 was primarily driven by non-operating income tax expense compared to a significant benefit in 2023 and an increase in integration, restructuring and other non-operating expenses, partially offset by an increase i n non-operating change in insurance liabilities and related derivatives and an increase in investment gains (losses), net of offsets.
According to LIMRA, total fixed indexed annuity market sales in the US were $71.0 billion for the nine months ended September 30, 2023, a 23.5% increase from the same time period in 2022.
According to LIMRA, total annuity market sales in the US were $332.0 billion for the nine months ended September 30, 2024, a 23.1% increase from the same time period in 2023.
We aim to continue to grow our retail channel by deepening our relationships with our approximately 51 IMOs and with our growing network of 18 banks and 144 broker-dealers, collectively representing approximately 128,000 independent agents.
We aim to continue to grow our retail channel by deepening our relationships with our approximately 41 IMOs and with our growing network of 19 banks and 151 broker-dealers, collectively representing approximately 140,000 independent agents.
Income Tax Expense (Benefit) Income tax expense (benefit) decreased by $515 million to $(1.2) billion in 2023 from $(646) million in 2022, primarily driven by a one-time tax benefit of $1.8 billion resulting from the establishment of deferred tax assets related to the Bermuda CIT , an unfavorable change in fair value of market risk benefits and additional policyholder and other reserve liability costs, partially offset by the favorable changes in fair value of reinsurance assets and mortgage loans, an increase in net investment income and the gain on the settlement of the VIAC recapture agreement. 75 Table of Contents Item 7.
Income Tax Expense (Benefit) Income tax expense (benefit) increased by $1.9 billion to $730 million in 2024 from $(1.2) billion in 2023, primarily driven by a one-time tax benefit of $1.8 billion resulting from the establishment of deferred tax assets related to the Bermuda CIT in 2023, an increase in net investment income and a favorable change in the fair value of market risk benefits, partially offset by an increase in policyholder and other reserve liability costs, an unfavorable change in fair value of reinsurance assets and the gain on the settlement of the VIAC recapture agreement in 2023 .
Management’s Discussion and Analysis of Financial Condition and Results of Operations Our organic channels, including retail, flow reinsurance and institutional products, provided gross inflows of $63.4 billion, $47.9 billion and $37.0 billion for the years ended December 31, 2023, 2022 and 2021, respectively, which were underwritten to attractive returns.
Our organic channels, including retail, flow reinsurance and institutional products, provided gross inflows of $71.0 billion, $63.4 billion and $47.9 billion for the years ended December 31, 2024, 2023 and 2022, respectively, which were underwritten to attractive returns.
Related party investment funds include strategic investments in direct origination platforms and insurance companies and investments in Apollo managed funds. Short-term investments include reverse repurchase agreements in Atlas Securitized Products Holdings LP (Atlas), which is owned by AAA.
Related party investment funds include strategic investments in direct origination and retirement services platforms and investments in Apollo managed funds. Short-term investments include reverse repurchase agreements in Atlas, which is owned by AAA.
For the nine months ended September 30, 2022, we were the twelfth largest provider of RILAs based on sales of $678 million, translating to a 2.2% market share. We believe RILAs represent a significant growth opportunity for Athene.
For the nine months ended September 30, 2023, we were the eleventh largest provider of RILAs based on sales of $650 million, translating to a 1.9% market share. We believe RILAs represent a significant growth opportunity for Athene.
Spread Related Earnings SRE increased by $641 million, or 26%, to $3.1 billion in 2023 from $2.5 billion in 2022. The increase in SRE was primarily driven by higher net investment earnings, partially offset by higher cost of funds and interest and other financing costs.
Spread Related Earnings SRE increased by $114 million, or 4%, to $3.2 billion in 2024 from $3.1 billion in 2023. The increase in SRE was primarily driven by higher net investment earnings and strategic capital management fees, partially offset by higher cost of funds and interest and other financing costs.
For the nine months ended September 30, 2023 (the most recent period for which specific market share data is available), we were the second largest provider of FIAs based on sales of $7.6 billion, translating to a 10.7% market share.
For the nine months ended September 30, 2024 (the most recent period for which specific market share data is available), we were the largest provider of FIAs based on sales of $10.9 billion, translating to an 11.5% market share.
The fair value of FIA embedded derivative unlocking, net of the noncontrolling interests, in 2023 was $71 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions, while 2022 unlocking was $47 million favorable primarily due to changes to projected interest crediting, partially offset by the impact of higher rates on future account values.
The fair value of FIA embedded derivative unlocking, net of the noncontrolling interests, in 2024 was $26 million unfavorable primarily due to changes to projected interest crediting, while 2023 unlocking was $71 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions.
We have a strong preference for alternative investments that have some or all of the following characteristics, among others: (1) investments that constitute a direct investment or an investment in a fund with a high degree of co-investment; (2) investments with credit- or debt-like characteristics (for example, a stipulated maturity and par value), or alternatively, investments with reduced volatility when compared to pure equity; or (3) investments that we believe have less downside risk.
We have a strong preference for alternative investments that have some or all of the following characteristics, among others: (1) investments with credit- or debt-like characteristics (for example, a stipulated maturity and par value), or alternatively, investments with reduced volatility when compared to pure equity; or (2) investments that we believe have less downside risk. 79 Table of Contents Item 7.
Quantitative and Qualitative Disclosures About Market Risks , which includes a discussion regarding interest rate and other significant risks and our strategies for managing these risks. 69 Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Demographics Over the next four decades, the retirement-age population is expected to experience unprecedented growth.
Quantitative and Qualitative Disclosures About Market Risk , which includes a discussion regarding interest rate and other significant risks and our strategies for managing these risks. Demographics Over the next four decades, the retirement-age population is expected to experience unprecedented growth.
For the years ended December 31, 2023, 2022 and 2021, we incurred management fees, inclusive of base, sub-allocation and performance fees, of $987 million, $775 million and $592 million, respectively.
We incurred management fees, inclusive of base, sub-allocation and performance fees, of $1.3 billion, $987 million and $775 million, respectively, during the years ended December 31, 2024, 2023 and 2022.
The adjustments to net investment income to arrive at our net investment earnings add (a) alternative investment gains and losses, (b) gains and losses related to certain equity securities, (c) net VIE impacts (revenues, expenses and noncontrolling interest), (d) forward points gains and losses on foreign exchange derivative hedges, (e) amortization of premium/discount on held-for-trading securities and (f) the change in fair value of reinsurance assets, and remove the proportionate share of the ACRA net investment income associated with the noncontrolling interests.
The primary adjustments to net investment income to arrive at our net investment earnings are (a) net VIE impacts (revenues, expenses and noncontrolling interests), (b) forward points gains and losses on foreign exchange derivative hedges, (c) amortization of premium/discount on held-for-trading securities, (d) the change in fair value of reinsurance assets, (e) an adjustment to the change in net asset value of our ADIP investments to recognize our proportionate share of spread related earnings based on our ownership in the investment funds and (f) the removal of the proportionate share of the ACRA net investment income associated with the noncontrolling interests.
Management’s Discussion and Analysis of Financial Condition and Results of Operations We carefully monitor economic and market conditions that could potentially give rise to global market volatility and affect our business operations, investment portfolios and derivatives, which includes global inflation.
We carefully monitor economic and market conditions that could potentially give rise to global market volatility and affect our business operations, investment portfolios and derivatives, which include global inflation.
The fair value of FIA embedded derivatives unlocking in 2023 was $20 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions, while 2022 unlocking was $47 million favorable primarily due to changes to projected interest crediting, partially offset by the impact of higher rates on future account values.
The fair value of FIA embedded derivatives unlocking in 2024 was $67 million unfavorable primarily due to changes to projected interest crediting, while 2023 unlocking was $20 million favorable primarily due to changes to projected interest crediting, partially offset by an increase in lapse and risk margin assumptions.
In the total fixed annuity market, for the nine months ended September 30, 2023 (the most recent period for which specific market share data is available), we were the largest provider of fixed annuities based on sales of $21.4 billion, translating to a 10.9% market share.
For the nine months ended September 30, 2023, we were the largest provider of fixed annuities based on sales of $21.4 billion, translating to a 10.9% market share.
The following table presents the inflows and outflows generated from our organic and inorganic channels as well as the breakout between Athene and the ACRA noncontrolling interests: Successor Predecessor (In millions) Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 Retail $ 35,293 $ 20,407 $ 8,781 Flow reinsurance 10,547 6,186 2,564 Funding agreements 1 7,193 10,039 11,852 Pension group annuities 10,374 11,218 13,837 Gross organic inflows 63,407 47,850 37,034 Gross inorganic inflows 2 2,214 — — Total gross inflows 65,621 47,850 37,034 Gross outflows 3 (33,868) (27,872) (17,534) Net flows $ 31,753 $ 19,978 $ 19,500 Inflows attributable to Athene 4 $ 43,000 $ 39,244 $ 26,795 Inflows attributable to ACRA noncontrolling interests 4 22,621 8,606 10,239 Total gross inflows $ 65,621 $ 47,850 $ 37,034 Outflows attributable to Athene $ (28,763) $ (23,724) $ (14,761) Outflows attributable to ACRA noncontrolling interests (5,105) (4,148) (2,773) Total gross outflows 3 $ (33,868) $ (27,872) $ (17,534) 1 Funding agreements are comprised of funding agreements issued under our FABN and FABR programs, funding agreements issued to the FHLB and long-term repurchase agreements. 2 Gross inorganic inflows represent acquisitions and block reinsurance transactions.
The following table presents the inflows and outflows generated from our organic and inorganic channels as well as the breakout between Athene, the ACRA noncontrolling interests and third-party reinsurers: Years ended December 31, (In millions) 2024 2023 2022 Retail $ 35,764 $ 35,293 $ 20,407 Flow reinsurance 5,573 10,547 6,186 Funding agreements 1 28,748 7,193 10,039 Pension group annuities 918 10,374 11,218 Gross organic inflows 71,003 63,407 47,850 Gross inorganic inflows 2 — 2,214 — Total gross inflows 71,003 65,621 47,850 Gross outflows 3 (33,469) (33,868) (27,872) Net flows $ 37,534 $ 31,753 $ 19,978 Inflows attributable to Athene 4 $ 49,084 $ 43,000 $ 39,244 Inflows attributable to ACRA noncontrolling interests 4 17,848 22,621 8,606 Inflows ceded to third-party reinsurers 5 4,071 — — Total gross inflows $ 71,003 $ 65,621 $ 47,850 Outflows attributable to Athene $ (27,248) $ (28,763) $ (23,724) Outflows attributable to ACRA noncontrolling interests (6,221) (5,105) (4,148) Total gross outflows 3 $ (33,469) $ (33,868) $ (27,872) 1 Funding agreements are comprised of funding agreements issued under our FABN program, secured and other funding agreements, funding agreements issued to the FHLB and long-term repurchase agreements. 2 Gross inorganic inflows represent acquisitions and block reinsurance transactions.
For the nine months ended September 30, 2022, we were the largest provider of FIAs based on sales of $7.1 billion, translating to a 12.4% market share. According to LIMRA, total RILA market sales in the US were $34.4 billion for the nine months ended September 30, 2023, an 11.1% increase from the same time period in 2022.
For the nine months ended September 30, 2023, we were the second largest provider of FIAs based on sales of $7.6 billion, translating to a 10.7% market share. According to LIMRA, total RILA market sales in the US were $47.9 billion for the nine months ended September 30, 2024, a 39.6% increase from the same time period in 2023.
Net Income (Loss) Available to Athene Holding Ltd. Common Stockholder Net income (loss) available to Athene Holding Ltd. common stockholder increased by $7.5 billion, or 247%, to $4.5 billion in 2023 from $(3.1) billion in 2022.
Net Income (Loss) Available to Athene Holding Ltd. Common Stockholder Net income (loss) available to Athene Holding Ltd. common stockholder decreased by $1.2 billion, or 27%, to $3.3 billion in 2024 from $4.5 billion in 2023.
Related party investments in strategic affiliated companies or Apollo funds represented $11.9 billion, or 5.4% of our net invested assets.
Related party investments in strategic affiliated companies or Apollo funds represented $13.4 billion, or 5.4% of our net invested assets. 80 Table of Contents Item 7.
The $2.0 billion unfavorable change in fair value of market risk benefits was primarily driven by a decrease in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits, as well as favorable unlocking in 2022, partially offset by favorable equity market performance.
The $428 million favorable change in fair value of market risk benefits was primarily driven by an increase in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits, as well as a favorable change in unlocking, partially offset by less favorable equity market performance compared to 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Spread Related Earnings (SRE) Spread related earnings is a pre-tax non-GAAP measure used to evaluate our financial performance excluding market volatility and expenses related to integration, restructuring, stock compensation and other expenses.
Spread Related Earnings (SRE) Spread related earnings is a pre-tax non-GAAP measure used to evaluate our financial performance including the impact of any reinsurance transactions and excluding market volatility and expenses related to integration, restructuring, stock compensation and other expenses.
Our annual unlocking of assumptions, net of the noncontrolling interests, resulted in an increase in our adjustments to net income (loss) available to Athene Holding Ltd. common stockholder of $71 million compared to an increase of $90 million in 2022.
Our annual unlocking of assumptions, net of the noncontrolling interests, resulted in a decrease in our adjustments to net income (loss) available to AHL common stockholder of $11 million compared to an increase of $71 million in 2023.
Our annual unlocking of assumptions resulted in a decrease in benefits and expenses of $22 million compared to a decrease of $94 million in 2022.
Our annual unlocking of assumptions resulted in an increase in total benefits and expenses of $31 million compared to a decrease of $22 million in 2023.
The change in fair value of market risk b enefits was $2.1 billion un favorable compared to 2022 due to a decrease in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits.
The change in fair value of market risk b enefits was $567 million favorable compared to 2023 due to an increase in the risk-free discount rate across the curve, which is used in the fair value measurement of the liability for market risk benefits.
Successor Predecessor (In millions) Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 Revenues $ 28,194 $ 7,623 $ 26,320 Benefits and expenses 23,603 13,285 22,134 Income (loss) before income taxes 4,591 (5,662) 4,186 Income tax expense (benefit) (1,161) (646) 386 Net income (loss) 5,752 (5,016) 3,800 Less: Net income (loss) attributable to noncontrolling interests 1,087 (2,106) (59) Net income (loss) attributable to Athene Holding Ltd. stockholders 4,665 (2,910) 3,859 Less: Preferred stock dividends 181 141 141 Net income (loss) available to Athene Holding Ltd. common stockholder $ 4,484 $ (3,051) $ 3,718 Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 In this section, references to 2023 refer to the year ended December 31, 2023 and references to 2022 refer to the year ended December 31, 2022.
The following summarizes the consolidated results of operations: Years ended December 31, (In millions) 2024 2023 2022 Revenues $ 20,689 $ 28,194 $ 7,623 Benefits and expenses 15,055 23,603 13,285 Income (loss) before income taxes 5,634 4,591 (5,662) Income tax expense (benefit) 730 (1,161) (646) Net income (loss) 4,904 5,752 (5,016) Less: Net income (loss) attributable to noncontrolling interests 1,443 1,087 (2,106) Net income (loss) attributable to Athene Holding Ltd. stockholders 3,461 4,665 (2,910) Less: Preferred stock dividends 181 181 141 Net income (loss) available to Athene Holding Ltd. common stockholder $ 3,280 $ 4,484 $ (3,051) Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 In this section, references to 2024 refer to the year ended December 31, 2024 and references to 2023 refer to the year ended December 31, 2023.
As of December 31, 2023, our net invested asset portfolio included $42.5 billion of floating rate investments, or 20% of our net invested assets, and our net reserve liabilities included $17.7 billion of floating rate liabilities at notional, or 8% of our net invested assets, resulting in $24.8 billion of net floating rate assets, or 12% of our net invested assets.
As of December 31, 2024, our net invested asset portfolio included $50.6 billion of floating rate investments, or 20% of our net invested assets, and our net reserve liabilities included $33.6 billion of floating rate liabilities at notional, or 13% of our net invested assets, resulting in $17.0 billion of net floating rate assets, or 7% of our net invested assets.
Summary of Non-GAAP Earnings The following summarizes our spread related earnings : Successor Predecessor (In millions) Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 Fixed income and other net investment income $ 8,744 $ 5,707 $ 5,325 Alternative net investment income 864 1,206 1,754 Net investment earnings 9,608 6,913 7,079 Strategic capital management fees 72 53 39 Cost of funds (5,650) (3,755) (3,993) Net investment spread 4,030 3,211 3,125 Other operating expenses (487) (466) (359) Interest and other financing costs (436) (279) (257) Spread related earnings $ 3,107 $ 2,466 $ 2,509 Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 In this section, references to 2023 refer to the year ended December 31, 2023 and references to 2022 refer to the year ended December 31, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Summary of Non-GAAP Earnings The following summarizes our spread related earnings : Years ended December 31, (In millions) 2024 2023 2022 Fixed income and other net investment income $ 10,811 $ 8,744 $ 5,707 Alternative net investment income 939 864 1,206 Net investment earnings 11,750 9,608 6,913 Strategic capital management fees 105 72 53 Cost of funds (7,702) (5,650) (3,755) Net investment spread 4,153 4,030 3,211 Other operating expenses (467) (487) (466) Interest and other financing costs (465) (436) (279) Spread related earnings $ 3,221 $ 3,107 $ 2,466 Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 In this section, references to 2024 refer to the year ended December 31, 2024 and references to 2023 refer to the year ended December 31, 2023.
The largest percentage of our FIA policies are linked to the S&P 500 index, which increased 24.2% in 2023, compared to a decrease of 19.4% in 2022.
The largest percentage of our FIA policies are linked to the S&P 500 Index, which increased 23.3% in 2024, compared to an increase of 24.2% in 2023.
The largest percentage of our FIA policies are linked to the S&P 500 index, which increased 24.2% in 2023, compared to a decrease of 19.4% in 2022.
The largest percentage of our FIA policies are linked to the S&P 500 Index, which increased 23.3% in 2024, compared to an increase of 24.2% in 2023.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations The reconciliation of benefits and expenses to cost of funds is as follows: Successor Predecessor Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 (In millions, except percentages) Dollar Rate Dollar Rate Dollar Rate US GAAP benefits and expenses $ 23,603 11.32 % $ 13,285 7.04 % $ 22,134 13.83 % Premiums (12,749) (6.12) % (11,638) (6.17) % (14,262) (8.91) % Product charges (848) (0.41) % (718) (0.38) % (621) (0.39) % Other revenues (150) (0.07) % 28 0.01 % (72) (0.04) % FIA option costs 1,512 0.73 % 1,264 0.67 % 1,125 0.70 % Reinsurance impacts (155) (0.07) % 17 0.01 % 49 0.03 % Non-operating change in insurance liabilities and embedded derivatives (2,930) (1.41) % 2,825 1.50 % (2,989) (1.87) % DAC, DSI and VOBA amortization related to investment gains and losses — — % — — % 115 0.07 % Rider reserves related to investment gains and losses — — % — — % (4) — % Policy and other operating expenses, excluding policy acquisition expenses (1,341) (0.64) % (1,110) (0.59) % (772) (0.48) % AmerUs Closed Block fair value liability (58) (0.03) % 291 0.15 % 57 0.04 % ACRA noncontrolling interests (1,587) (0.76) % (549) (0.29) % (759) (0.47) % Other 353 0.17 % 60 0.03 % (8) (0.01) % Total adjustments to arrive at cost of funds (17,953) (8.61) % (9,530) (5.06) % (18,141) (11.33) % Total cost of funds $ 5,650 2.71 % $ 3,755 1.98 % $ 3,993 2.50 % Average net invested assets $ 208,479 $ 188,742 $ 160,019 The reconciliation of policy and other operating expenses to other operating expenses is as follows: Successor Predecessor (In millions) Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 US GAAP policy and other operating expenses $ 1,848 $ 1,495 $ 1,128 Interest expense (459) (227) (139) Policy acquisition expenses, net of deferrals (507) (385) (356) Integration, restructuring and other non-operating expenses (130) (133) (134) Stock compensation expenses (88) (56) (38) ACRA noncontrolling interests (143) (231) (93) Other (34) 3 (9) Total adjustments to arrive at other operating expenses (1,361) (1,029) (769) Other operating expenses $ 487 $ 466 $ 359 100 Table of Contents Item 7.
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations The reconciliation of net investment income to net investment earnings and earned rate is as follows: Years ended December 31, 2024 2023 2022 (In millions, except percentages) Dollar Rate Dollar Rate Dollar Rate US GAAP net investment income $ 14,481 6.19 % $ 11,130 5.34 % $ 7,571 4.01 % Change in fair value of reinsurance assets (129) (0.05) % 86 0.04 % 333 0.18 % VIE earnings and noncontrolling interests 1,310 0.56 % 1,078 0.52 % 586 0.31 % Forward points adjustment on FX derivative hedges 133 0.06 % 187 0.09 % 125 0.07 % Held-for-trading amortization (108) (0.05) % (191) (0.09) % (228) (0.12) % Reinsurance impacts (223) (0.09) % (264) (0.13) % (41) (0.02) % Apollo investment (gain) loss — — % — — % (33) (0.02) % ACRA noncontrolling interests (3,864) (1.65) % (2,377) (1.14) % (1,505) (0.80) % Other 150 0.06 % (41) (0.02) % 105 0.05 % Total adjustments to arrive at net investment earnings/earned rate (2,731) (1.16) % (1,522) (0.73) % (658) (0.35) % Total net investment earnings/earned rate $ 11,750 5.03 % $ 9,608 4.61 % $ 6,913 3.66 % Average net invested assets $ 233,809 $ 208,479 $ 188,742 The reconciliation of benefits and expenses to cost of funds is as follows: Years ended December 31, 2024 2023 2022 (In millions, except percentages) Dollar Rate Dollar Rate Dollar Rate US GAAP benefits and expenses $ 15,055 6.44 % $ 23,603 11.32 % $ 13,285 7.04 % Premiums (1,318) (0.56) % (12,749) (6.12) % (11,638) (6.17) % Product charges (1,016) (0.44) % (848) (0.41) % (718) (0.38) % Other revenues (19) (0.01) % (150) (0.07) % 28 0.01 % FIA option costs 1,617 0.69 % 1,512 0.73 % 1,264 0.67 % Reinsurance impacts (157) (0.07) % (155) (0.07) % 17 0.01 % Non-operating change in insurance liabilities and embedded derivatives (2,647) (1.13) % (2,930) (1.41) % 2,825 1.50 % Policy and other operating expenses, excluding policy acquisition expenses (1,760) (0.75) % (1,341) (0.64) % (1,110) (0.59) % Forward points adjustment on FX derivative hedges 293 0.12 % 141 0.07 % — — % AmerUs Closed Block fair value liability 25 0.01 % (58) (0.03) % 291 0.15 % ACRA noncontrolling interests (2,624) (1.12) % (1,587) (0.76) % (549) (0.29) % Other 253 0.11 % 212 0.10 % 60 0.03 % Total adjustments to arrive at cost of funds (7,353) (3.15) % (17,953) (8.61) % (9,530) (5.06) % Total cost of funds $ 7,702 3.29 % $ 5,650 2.71 % $ 3,755 1.98 % Average net invested assets $ 233,809 $ 208,479 $ 188,742 The reconciliation of policy and other operating expenses to other operating expenses is as follows: Years ended December 31, (In millions) 2024 2023 2022 US GAAP policy and other operating expenses $ 2,213 $ 1,848 $ 1,495 Interest expense (552) (459) (227) Policy acquisition expenses, net of deferrals (453) (507) (385) Integration, restructuring and other non-operating expenses (239) (130) (133) Stock compensation expenses (50) (88) (56) ACRA noncontrolling interests (406) (143) (231) Other (46) (34) 3 Total adjustments to arrive at other operating expenses (1,746) (1,361) (1,029) Other operating expenses $ 467 $ 487 $ 466 97 Table of Contents Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Preferred Stock – The following summarizes our perpetual non-cumulative preferred stock issuances (in millions, except share, per share data and percentages): Issuance Fixed/Floating Rate Issue Date Optional Redemption Date 1 Shares Issued Par Value Per Share Liquidation Value Per Share Aggregate Net Proceeds Series A Fixed-to-Floating Rate 6.350% June 10, 2019 June 30, 2029 34,500 $1.00 $25,000 $839 Series B Fixed-Rate 5.625% September 19, 2019 September 30, 2024 13,800 $1.00 $25,000 $333 Series C Fixed-Rate Reset 6.375% June 11, 2020 Variable 2 24,000 $1.00 $25,000 $583 Series D Fixed-Rate 4.875% December 18, 2020 December 30, 2025 23,000 $1.00 $25,000 $557 Series E Fixed-Rate Reset 7.750% December 12, 2022 Variable 3 20,000 $1.00 $25,000 $487 1 We may redeem preferred stock anytime on or after the dates set forth in this column, subject to the terms of the applicable certificate of designations. 2 We may redeem during a period from and including June 30 of each year in which there is a Reset Date to and including such Reset Date.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Preferred Stock – The following summarizes our perpetual non-cumulative preferred stock issuances as of December 31, 2024 (in millions, except share, per share data and percentages): Issuance Fixed/Floating Rate Issue Date Optional Redemption Date 1 Shares Issued Par Value Per Share Liquidation Value Per Share Aggregate Net Proceeds Series A Fixed-to-Floating Rate 6.350% June 10, 2019 June 30, 2029 34,500 $1.00 $25,000 $839 Series B Fixed-Rate 5.625% September 19, 2019 September 30, 2024 13,800 $1.00 $25,000 $333 Series C Fixed-Rate Reset 6.375% June 11, 2020 Variable 2 24,000 $1.00 $25,000 $583 Series D Fixed-Rate 4.875% December 18, 2020 December 30, 2025 23,000 $1.00 $25,000 $557 Series E Fixed-Rate Reset 7.750% December 12, 2022 Variable 3 20,000 $1.00 $25,000 $487 1 We may redeem preferred stock anytime on or after the dates set forth in this column, subject to the terms of the applicable certificate of designations. 2 We may redeem during a period from and including June 30 of each year in which there is a Reset Date to and including such Reset Date.
Our Credit Facility contains various standard covenants with which we must comply, including maintaining a consolidated debt-to-capitalization ratio of not greater than 35%, maintaining a minimum consolidated net worth of no less than $14.8 billion and restrictions on our ability to incur liens, with certain exceptions. Rates and terms are as defined in the Credit Facility.
Our Credit Facility contains various standard covenants with which we must comply, including maintaining a consolidated debt-to-capitalization ratio of not greater than 35%, maintaining a minimum consolidated net worth of no less than $14.8 billion and restrictions on our ability to incur liens, with certain exceptions. Rates, ratios and terms are as defined in the Credit Facility.
The statutory capital and surplus and RBC of our Bermuda insurance companies presented herein exclude the impact of any deferred taxes that may be recorded on a statutory basis as a result of the enactment of the Bermuda CIT.
The statutory capital and surplus and RBC of our Bermuda insurance companies presented herein exclude the impact of any deferred taxes that may be recorded on a statutory basis as a result of the Bermuda CIT.
We require that, at all times during the term of the repurchase agreements, we maintain sufficient cash or other liquid assets sufficient to allow us to fund substantially all of the repurchase price.
We require that, at all times during the term of the repurchase agreements, we maintain sufficient cash or other liquid assets to allow us to fund all of the repurchase price.
Holding Company Liquidity Common Stock Dividends We intend to pay regular common stock dividends to our parent company of $750 million per year, generally paid at the end of each quarter; provided that the declaration and payment of any dividends are at the sole discretion of our board of directors, which may change the dividend policy at any time, including, without limitation, to eliminate the dividend entirely.
Holding Company Liquidity Common Stock Dividends We intend to pay regular common stock dividends to our parent company of $750 million per year, generally paid at the end of each quarter; provided that the declaration and payment of any dividends are at the sole discretion of our board of directors, which may change the dividend policy at any time, including, without limitation, eliminating the dividend entirely.
Future interest payments on floating rate repurchase agreements were calculated using the December 31, 2023 interest rate. Atlas Securitized Products Holdings LP In connection with our, Apollo and Credit Suisse AG (CS)’s previously announced transaction, certain subsidiaries of Atlas, which is owned by AAA, acquired certain assets of the CS Securitized Products Group (the Transaction).
Future interest payments on floating rate repurchase agreements were calculated using the December 31, 2024 interest rate. Atlas Securitized Products Holdings LP In connection with our, Apollo and Credit Suisse AG (CS)’s previously announced transaction, certain subsidiaries of Atlas, which is owned by AAA, acquired certain assets of the CS Securitized Products Group (the Transaction).
Reset Date means December 30, 2027 and each date falling on the fifth anniversary of the preceding Reset Date. See Note 13 – Equity to the consolidated financial statements for further information on preferred stock. Unsecured Revolving Promissory Note Payable with AGM – AHL has an unsecured revolving promissory note with AGM which allows AHL to borrow funds from AGM.
Reset Date means December 30, 2027 and each date falling on the fifth anniversary of the preceding Reset Date. See Note 12 – Equity to the consolidated financial statements for further information on preferred stock. Unsecured Revolving Promissory Note Payable with AGM – AHL has an unsecured revolving promissory note with AGM which allows AHL to borrow funds from AGM.
Other equity securities, typically private equities or equity securities not traded on an exchange, are valued based on other sources, such as commercial pricing services or brokers. 109 Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations For mortgage loans, we use independent commercial pricing services.
Other equity securities, typically private equities or equity securities not traded on an exchange, are valued based on other sources, such as commercial pricing services or brokers. 106 Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations For mortgage loans, we use independent commercial pricing services.
Uses of cash include investment purchases, payments to policyholders for surrenders, withdrawals and payout benefits, interest and principal payments on funding agreements, payments to satisfy pension group annuity obligations, policy acquisition costs and general operating costs, and payment of cash dividends. Our policyholder obligations are generally long-term in nature.
Uses of cash include investment purchases, payments to policyholders for surrenders, withdrawals and payout benefits, interest and principal payments on funding agreements and outstanding debt, payments to satisfy pension group annuity obligations, policy acquisition and general operating costs and payment of cash dividends. Our policyholder obligations are generally long-term in nature.
For additional information regarding sensitivities to interest rate risk and public equity risk, see Item 7A. Quantitative and Qualitative Disclosures About Market Risks — Sensitivities .
For additional information regarding sensitivities to interest rate risk and public equity risk, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk — Sensitivities .
An expected increase in decrements and decrease in rider utilization, all else constant, will result in a decrease to the market risk benefit liability or an increase in the market risk benefit asset with remeasurement gains recorded in the consolidated statements of income (loss). 111 Table of Contents Item 7.
An expected increase in decrements and decrease in rider utilization, all else constant, will result in a decrease to the market risk benefit liability or an increase in the market risk benefit asset with remeasurement gains recorded in the consolidated statements of income (loss). 108 Table of Contents Item 7.
If we are not the primary beneficiary, the general partner or another limited partner may consolidate the investment fund, and we record the investment as an equity method investment. See Note 6 – Variable Interest Entities to the consolidated financial statements.
If we are not the primary beneficiary, the general partner or another limited partner may consolidate the investment fund, and we record the investment as an equity method investment. See Note 5 – Variable Interest Entities to the consolidated financial statements.
Cash flows from financing activities The primary cash inflows from financing activities are inflows on our investment-type policies and contracts, changes of cash collateral posted for derivative transactions, capital contributions and proceeds from debt and preferred stock issuances.
Cash flows from financing activities The primary cash inflows from financing activities are inflows on our investment-type policies and contracts, changes of cash collateral for derivative transactions posted by counterparties, capital contributions and proceeds from debt and preferred stock issuances.
The note has a borrowing capacity of $500 million and maturity date of December 13, 2025, or earlier at AGM’s request. There was no outstanding balance on the note payable as of December 31, 2023.
The note has a borrowing capacity of $500 million and maturity date of December 13, 2025, or earlier at AGM’s request. There was no outstanding balance on the note payable as of December 31, 2024.
We review and evaluate our tax positions quarterly to determine whether we have uncertain tax positions that require financial statement recognition. For more information regarding income taxes, see Note 14 – Income Taxes to the consolidated financial statements.
We review and evaluate our tax positions quarterly to determine whether we have uncertain tax positions that require financial statement recognition. For more information regarding income taxes, see Note 13 – Income Taxes to the consolidated financial statements.
Impact of Recent Accounting Pronouncements For a discussion of new accounting pronouncements affecting us, see Note 1 – Business, Basis of Presentation and Significant Accounting Policies to the consolidated financial statements. 112 Table of Contents Item 7A.
Impact of Recent Accounting Pronouncements For a discussion of new accounting pronouncements affecting us, see Note 1 – Business, Basis of Presentation and Significant Accounting Policies to the consolidated financial statements. 109 Table of Contents Item 7A.
Our Liquidity Facility also contains various standard covenants with which we must comply, including maintaining an ALRe minimum consolidated net worth of no less than $8.8 billion and restrictions on our ability to incur liens, with certain exceptions. Rates and terms are as defined in the Liquidity Facility.
Our Liquidity Facility also contains various standard covenants with which we must comply, including maintaining an ALRe minimum consolidated net worth of no less than $10.2 billion and restrictions on our ability to incur liens, with certain exceptions. Rates and terms are as defined in the Liquidity Facility.
Concentration and portfolio limits are designed to ensure that exposure to default and impairment risk is sufficiently modest to not represent a solvency risk, even in severe economic conditions. 113 Table of Contents
Concentration and portfolio limits are designed to ensure that exposure to default and impairment risk is sufficiently modest to not represent a solvency risk, even in severe economic conditions. 110 Table of Contents
The increase in cash used in investing activities for the year ended December 31, 2023 compared to 2022 was primarily driven by an increase in the purchases of investments due to the deployment of greater cash inflows from organic growth compared to 2022 and a decrease in the sales, maturities and repayments of investments, partially offset by an increase in net investment payables.
The increase in cash used in investing activities for the year ended December 31, 2024 compared to 2023 was primarily driven by an increase in the purchases of investments due to the deployment of greater cash inflows from strong organic growth compared to 2023 and a decrease in net investment payables, partially offset by an increase in sales, maturities and repayments of investments.
We have paid $937 million in common stock cash dividends during the year ended December 31, 2023, including payment of the fourth quarter dividend from 2022 in the first quarter of 2023. We declared and paid common stock cash dividends of $563 million during the year ended December 31, 2022.
We declared and paid common stock cash dividends of $937 million during the year ended December 31, 2023, including payment of the fourth quarter dividend from 2022 in the first quarter of 2023.
Although our investment portfolio does contain assets that are generally considered illiquid for liquidity monitoring purposes (primarily mortgage loans, policy loans, real estate, investment funds and affiliated common stock), there is some ability to raise cash from these assets if needed.
Although our investment portfolio does contain assets that are generally considered less liquid for liquidity monitoring purposes (primarily mortgage loans, policy loans, real estate, investment funds and affiliated common stock), there is some ability to raise cash from these assets if needed.
For immediate annuities with life contingencies, the liability for future policy benefits is equal to the present value of future benefits and related expenses. 110 Table of Contents Item 7.
For immediate annuities with life contingencies, the liability for future policy benefits is equal to the present value of future benefits and related expenses. 107 Table of Contents Item 7.
Risk Management The risk management team consists of eight teams: Business and Operational Risk, ALM, Regulatory and Risk Analytics, Derivative Governance & Risk Policy, Derivatives and Structured Solutions, Asset Risk Management, Strategic & Emerging Risk and Risk Operations & Change Management.
Risk Management The risk management team consists of eight teams: Business and Operational Risk, ALM, Regulatory and Risk Analytics, Risk Policy and Derivatives Risk, Derivatives and Structured Solutions, Asset Risk Management, Strategic and Emerging Risk and Risk Operations and Change Management.
Specifically, the level of capital needed to maintain desired financial strength ratings from rating agencies, including S&P, A.M. Best, Fitch and Moody’s, is of particular concern when determining the amount of capital available for distributions.
Specifically, the level of capital needed to maintain desired financial strength ratings from rating agencies, including S&P, AM Best, Fitch and Moody’s, is of particular concern when determining the amount of capital available for distributions.
As of December 31, 2023 and 2022, the payables for repurchase agreements were $3.9 billion and $4.7 billion, respectively, while the fair value of securities and collateral held by counterparties backing the repurchase agreements was $4.1 billion and $5.0 billion, respectively.
As of December 31, 2024 and 2023, the payables for repurchase agreements were $5.7 billion and $3.9 billion, respectively, while the fair value of securities and collateral held by counterparties backing the repurchase agreements was $5.9 billion and $4.1 billion, respectively.
In addition, as of December 31, 2023 and 2022, approximately 64% and 60%, respectively, of policies contained MVAs that may also have the effect of limiting early withdrawals if interest rates increase but may encourage early withdrawals by effectively subsidizing a portion of surrender charges when interest rates decrease.
In addition, as of December 31, 2024 and 2023, approximately 66% and 64%, respectively, of policies contained MVAs that may also have the effect of limiting early withdrawals if interest rates increase but may encourage early withdrawals by effectively subsidizing a portion of surrender charges when interest rates decrease.
An insurer must have a BSCR ratio of 100% or greater to be considered solvent by the BMA. As of December 31, 2023 and 2022, our Bermuda insurance companies held the appropriate capital to adhere to these regulatory standards. As of December 31, 2023 and 2022, our Bermuda RBC ratio was 400% and 407%, respectively.
An insurer must have a BSCR ratio of 100% or greater to be considered solvent by the BMA. As of December 31, 2024 and 2023, our Bermuda insurance companies held the appropriate capital to adhere to these regulatory standards. As of December 31, 2024 and 2023, our Bermuda RBC ratio was 450% and 400%, respectively.
We perform vendor due diligence exercises annually to review vendor processes, models and assumptions. Additionally, we review price movements on a quarterly basis to ensure reasonableness. Derivatives Valuation of Embedded Derivatives on Indexed Annuities We issue and reinsure products, primarily indexed annuity products, or purchase investments that contain embedded derivatives.
We perform vendor due diligence exercises annually for all asset classes to review vendor processes, models and assumptions. Additionally, we review price movements on a quarterly basis to ensure reasonableness. Derivatives Valuation of Embedded Derivatives on Indexed Annuities We issue and reinsure products, primarily indexed annuity products, or purchase investments that contain embedded derivatives.
The increase (decrease) to the net market risk benefit balance from hypothetical changes in the discount rate is summarized as follows: (In millions) December 31, 2023 +100 bps discount rate $ (719) –100 bps discount rate 897 Consolidation We consolidate all entities in which we hold a controlling financial interest as of the financial statement date whether through a majority voting interest or otherwise, including those investment funds that meet the definition of a VIE in which we are determined to be the primary beneficiary.
The increase (decrease) to the net market risk benefit balance from hypothetical changes in the discount rate is summarized as follows: (In millions) December 31, 2024 +100 bps discount rate $ (867) –100 bps discount rate 748 Consolidation We consolidate all entities in which we hold a controlling financial interest as of the financial statement date whether through a majority voting interest or otherwise, including those investment funds that meet the definition of a VIE in which we are determined to be the primary beneficiary.
The increase (decrease) to the embedded derivatives on indexed annuity products from hypothetical changes in discount rates is summarized as follows: (In millions) December 31, 2023 +100 bps discount rate $ (499) –100 bps discount rate 552 However, these estimated effects do not take into account potential changes in other variables, such as equity price levels and market volatility, which can also contribute significantly to changes in carrying values.
The increase (decrease) to the embedded derivatives on indexed annuity products from hypothetical changes in discount rates is summarized as follows: (In millions) December 31, 2024 +100 bps discount rate $ (569) –100 bps discount rate 626 However, these estimated effects do not take into account potential changes in other variables, such as equity price levels and market volatility, which can also contribute significantly to changes in carrying values.
For a discussion of our investment funds for which we have elected the fair value option, see Note 7 – Fair Value to the consolidated financial statements. 108 Table of Contents Item 7.
For a discussion of our investment funds for which we have elected the fair value option, see Note 6 – Fair Value to the consolidated financial statements. 105 Table of Contents Item 7.
Intercompany Note – AHL has an unsecured revolving note payable with ALRe, which permits AHL to borrow up to $4.0 billion with a fixed interest rate of 2.29% and a maturity date of December 15, 2028. As of December 31, 2023 and 2022, the revolving note payable had an outstanding balance of $486 million and $896 million, respectively.
Intercompany Note – AHL has an unsecured revolving note payable with ALRe, which permits AHL to borrow up to $4.0 billion with a fixed interest rate of 2.29% and a maturity date of December 15, 2028. As of December 31, 2024 and 2023, the revolving note payable had an outstanding balance of $1.6 billion and $486 million, respectively.
The increase (decrease) to future policy benefit reserves from hypothetical changes in discount rates is summarized as follows: (In millions) December 31, 2023 +100 bps discount rate $ (3,859) –100 bps discount rate 4,683 Market Risk Benefits Market risk benefits represent contracts or contract features that both provide protection to the contract holder from, and expose the insurance entity to, other-than-nominal capital market risk.
The increase (decrease) to future policy benefit reserves from hypothetical changes in discount rates is summarized as follows: (In millions) December 31, 2024 +100 bps discount rate $ (3,393) –100 bps discount rate 4,048 Market Risk Benefits Market risk benefits represent contracts or contract features that both provide protection to the contract holder from, and expose the insurance entity to, other-than-nominal capital market risk.
If the discount rates used to discount the indexed strategy cash flows were to fluctuate, there would be a resulting change in reserves for indexed annuities recorded through the consolidated statements of income (loss). As of December 31, 2023, we had embedded derivative liabilities classified as Level 3 in the fair value hierarchy of $9.1 billion.
If the discount rates used to discount the indexed strategy cash flows were to fluctuate, there would be a resulting change in reserves for indexed annuities recorded through the consolidated statements of income (loss). As of December 31, 2024, we had embedded derivative liabilities classified as Level 3 in the fair value hierarchy of $11.2 billion.
We entered into a new Liquidity Facility on June 30, 2023, which replaced our previous liquidity facility. The Liquidity Facility has a borrowing capacity of $2.6 billion, subject to being increased up to $3.1 billion in total on the terms described in the Liquidity Facility.
We entered into a new Liquidity Facility on June 28, 2024, which replaced our previous agreement dated as of June 30, 2023. The Liquidity Facility has a borrowing capacity of $2.6 billion, subject to being increased up to $3.1 billion in total on the terms described in the Liquidity Facility.
The maximum FHLB indebtedness by a member is determined by the amount of collateral pledged and cannot exceed a specified percentage of the member’s total statutory assets dependent on the internal credit rating assigned to the member by the FHLB. As of December 31, 2023, our total maximum borrowing capacity under the FHLB facilities was limited to $43.1 billion.
The maximum FHLB indebtedness by a member is determined by the amount of collateral pledged and cannot exceed a specified percentage of the member’s total statutory assets dependent on the internal credit rating assigned to the member by the FHLB. As of December 31, 2024, our total maximum borrowing capacity under the FHLB facilities was limited to $49.5 billion.
We measure capital sufficiency using an internal capital model which reflects management’s view on the various risks inherent to our business, the amount of capital required to support our core operating strategies and the amount of capital necessary to maintain our current ratings in a recessionary environment.
We measure capital sufficiency using various internal capital metrics which reflect management’s view on the various risks inherent to our business, the amount of capital required to support our core operating strategies and the amount of capital necessary to maintain our current ratings in a recessionary environment.
We further seek to mitigate liquidity risk by maintaining access to alternative, external sources of liquidity as described below. Our liquidity risk management framework is codified in the company’s Liquidity Risk Policy that is reviewed and approved by our board of directors. 102 Table of Contents Item 7.
We further seek to mitigate liquidity risk by maintaining access to alternative, external sources of liquidity as described below. Our liquidity risk management framework is codified in the company’s Liquidity Risk Policy that is reviewed and approved by our board of directors.
The Credit Facility provides access to liquidity with a borrowing capacity of $1.25 billion, subject to being increased up to $1.75 billion in total on the terms described in the Credit Facility. The Credit Facility has a commitment termination date of June 30, 2028, subject to up to two one-year extensions, and was undrawn as of December 31, 2023.
The Credit Facility has a borrowing capacity of $1.25 billion, subject to being increased up to $1.75 billion in total on the terms described in the Credit Facility. The Credit Facility has a commitment termination date of June 30, 2028, subject to up to two one-year extensions, and was undrawn as of December 31, 2024.
However, our ability to borrow under the facilities is constrained by the availability of assets that qualify as eligible collateral under the facilities and certain other limitations. Considering these limitations, as of December 31, 2023, we had the ability to draw up to an estimated $10.2 billion, inclusive of borrowings then outstanding.
However, our ability to borrow under the facilities is constrained by the availability of assets that qualify as eligible collateral under the facilities and certain other limitations. Considering these limitations, as of December 31, 2024, we had the ability to draw up to an estimated $18.9 billion, inclusive of borrowings then outstanding.
During the commitment period, we may sell and Societe Generale is required to purchase eligible investment grade corporate bonds pursuant to repurchase transactions at pre-agreed rates in exchange for an ongoing commitment fee for the facility. As of December 31, 2023, we had no outstanding payables under this facility.
During the commitment period, we may sell and Societe Generale is required to purchase eligible investment grade corporate bonds pursuant to repurchase transactions at pre-agreed rates in exchange for an ongoing commitment fee for the facility. As of December 31, 2024, we had no outstanding payables under this facility. 100 Table of Contents Item 7.
In general, the reserve for future policy benefits will decrease when longevity decreases, resulting in remeasurement gains in the consolidated statements of income (loss). Changes in the discount rate in periods after a cohort has closed will not impact interest expense recognition within the consolidated statements of income (loss).
In general, the reserve for future policy benefits associated with life-contingent payout annuities will decrease when longevity decreases, resulting in remeasurement gains in the consolidated statements of income (loss). Changes in the discount rate in periods after a cohort has closed will not impact interest expense recognition within the consolidated statements of income (loss).
As discussed in Note 15 – Statutory Requirements to the consolidated financial statements, a permitted practice of the state of Vermont allows the captive to include issued and outstanding letters of credit in the amount of $96 million and $112 million as of December 31, 2023 and 2022, respectively, as admitted assets in its statutory financial statements.
As discussed in Note 14 – Statutory Requirements to the consolidated financial statements, a permitted practice of the state of Vermont allows the captive to include issued and outstanding letters of credit in the amount of $86 million and $96 million as of December 31, 2024 and 2023, respectively, as admitted assets in its statutory financial statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Bermuda statutory capital and surplus for our Bermuda insurance companies in aggregate was $14.6 billion and $14.8 billion as of December 31, 2023 and 2022, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Bermuda statutory capital and surplus for our Bermuda insurance companies in aggregate was $17.0 billion and $14.6 billion as of December 31, 2024 and 2023, respectively.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Insurance Subsidiaries’ Liquidity Operations The primary cash flow sources for our insurance subsidiaries include retirement services product inflows (premiums and deposits), investment income, principal repayments on our investments, net transfers from separate accounts and financial product inflows.
Insurance Subsidiaries’ Liquidity Operations The primary cash flow sources for our insurance subsidiaries include retirement services product inflows (premiums and deposits), investment income, principal repayments on our investments, net transfers from separate accounts and financial product inflows.
The primary source of AHL’s cash flow is dividends from its subsidiaries, which are expected to be adequate to fund cash flow requirements based on current estimates of future obligations.
The primary source of AHL’s cash flow is dividends from its subsidiaries, which are expected to be adequate to fund cash flow requirements based on current estimates of future obligations. 102 Table of Contents Item 7.
Our TAC was significantly in excess of all regulatory standards as of December 31, 2023 and 2022, respectively. 107 Table of Contents Item 7.
Our TAC was significantly in excess of all regulatory standards as of December 31, 2024 and 2023, respectively. 104 Table of Contents Item 7.
As of December 31, 2023 and 2022, our US insurance companies’ TAC, as defined by the NAIC, was $5.8 billion and $4.1 billion, respectively, and our US RBC ratio was 392% and 387%, respectively. Each US domestic insurance subsidiary’s state of domicile imposes minimum RBC requirements that were developed by the NAIC.
As of December 31, 2024 and 2023, our US insurance companies’ TAC, as defined by the NAIC, was $7.7 billion and $5.8 billion, respectively, and our US RBC ratio was 419% and 392%, respectively. Each US domestic insurance subsidiary’s state of domicile imposes minimum RBC requirements that were developed by the NAIC.
As of December 31, 2023 and 2022, approximately 79% and 76%, respectively, of our deferred annuity liabilities were subject to penalty upon surrender.
As of December 31, 2024 and 2023, approximately 82% and 79%, respectively, of our deferred annuity liabilities were subject to penalty upon surrender.
These laws and regulations require, among other things, the insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay. 105 Table of Contents Item 7.
These laws and regulations require, among other things, the insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Subject to these limitations and prior notification to the appropriate regulatory agency, the US insurance subsidiaries are permitted to pay ordinary dividends based on calculations specified under insurance laws of the relevant state of domicile.
Subject to these limitations and prior notification to the appropriate regulatory agency, the US insurance subsidiaries are permitted to pay ordinary dividends based on calculations specified under insurance laws of the relevant state of domicile.
The ability of AHL’s insurance subsidiaries to pay dividends is limited by applicable laws and regulations of the jurisdictions where the subsidiaries are domiciled, as well as agreements entered into with regulators.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The ability of AHL’s insurance subsidiaries to pay dividends is limited by applicable laws and regulations of the jurisdictions where the subsidiaries are domiciled, as well as agreements entered into with regulators.
As of December 31, 2023, approximately 28% of our net reserve liabilities were generally non-surrenderable, including buy-out pension group annuities other than those that can be withdrawn as lump sums, funding agreements and payout annuities, while 56% were subject to penalty upon surrender.
As of December 31, 2024, approximately 33% of our net reserve liabilities were generally non-surrenderable, including buy-out pension group annuities other than those that can be withdrawn as lump sums, funding agreements and payout annuities, while 54% were subject to penalty upon surrender. 99 Table of Contents Item 7.
Funding liquidity relates to the ability to fund operations. Balance sheet liquidity relates to our ability to liquidate or rebalance our balance sheet without incurring significant costs from fees, bid-offer spreads, or market impact. We manage our liquidity position by matching projected cash demands with adequate sources of cash and other liquid assets.
Balance sheet liquidity relates to our ability to sell assets held in our investment portfolio without incurring significant costs from fees, bid-offer spreads, or market impact. We manage our liquidity position by matching projected cash demands with adequate sources of cash and other liquid assets.
As of December 31, 2023 and 2022, our consolidated statutory capital and surplus in the aggregate was $21.8 billion and $20.1 billion, respectively, and our consolidated RBC ratio was 412% and 416%, respectively.
As of December 31, 2024 and 2023, our consolidated statutory capital and surplus in the aggregate was $24.8 billion and $21.8 billion, respectively, and our consolidated RBC ratio was 430% and 412%, respectively.
For the Bermuda group, which includes the capital and surplus of AARe and all of its subsidiaries, including AADE and its subsidiaries, EBS capital and surplus was $26.6 billion and $21.9 billion, resulting in a BSCR ratio of 291% and 278% as of December 31, 2023 and 2022, respectively.
For the Bermuda group, which includes the capital and surplus of AARe and all of its subsidiaries, including AAIA and its subsidiaries, EBS capital and surplus was $27.7 billion and $26.6 billion, resulting in a BSCR ratio of 238% and 291% as of December 31, 2024 and 2023, respectively.
Cash Flows Our cash flows were as follows: Successor Predecessor (In millions) Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 Net income (loss) $ 5,752 $ (5,016) $ 3,800 Non-cash revenues and expenses (769) 11,274 6,492 Net cash provided by operating activities 4,983 6,258 10,292 Sales, maturities and repayments of investments 27,801 28,163 42,063 Purchases of investments (71,779) (62,386) (70,220) Other investing activities 328 (152) 225 Net cash used in investing activities (43,650) (34,375) (27,932) Inflows on investment-type policies and contracts 53,660 33,920 21,447 Withdrawals on investment-type policies and contracts (14,125) (10,209) (7,042) Other financing activities 5,232 2,761 5,224 Net cash provided by financing activities 44,767 26,472 19,629 Effect of exchange rate changes on cash and cash equivalents 10 (15) (2) Net increase (decrease) in cash and cash equivalents 1 $ 6,110 $ (1,660) $ 1,987 1 Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Cash Flows Our cash flows were as follows: Years ended December 31, (In millions) 2024 2023 2022 Net income (loss) $ 4,904 $ 5,752 $ (5,016) Non-cash revenues and expenses (3,028) (769) 11,274 Net cash provided by operating activities 1,876 4,983 6,258 Sales, maturities and repayments of investments 59,369 27,801 28,163 Purchases of investments (120,220) (71,779) (62,386) Other investing activities (1,067) 328 (152) Net cash used in investing activities (61,918) (43,650) (34,375) Inflows on investment-type policies and contracts 71,323 53,660 33,920 Withdrawals on investment-type policies and contracts (19,119) (14,125) (10,209) Other financing activities 7,221 5,232 2,761 Net cash provided by financing activities 59,425 44,767 26,472 Effect of exchange rate changes on cash and cash equivalents (3) 10 (15) Net (decrease) increase in cash and cash equivalents 1 $ (620) $ 6,110 $ (1,660) 1 Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.
The decrease in cash provided by operating activities for the year ended December 31, 2023 compared to 2022 was primarily driven by lower cash received from pension group annuity transactions, net of outflows, cash paid for reinsurance settlements and an increase in cash paid for policy acquisition and other operating expenses, partially offset by an increase in net investment income and less cash paid for taxes.
The decrease in cash provided by operating activities for the year ended December 31, 2024 compared to 2023 was primarily driven by lower cash received from pension group annuity transactions, net of cash outflows, and an increase in cash paid for taxes, interest on funding agreements and other operating expenses.
Market risk benefits are measured at fair value at the contract level and may be recorded as a liability or an asset. At contract inception, we assess the fees and assessments that are collectible from the policyholder, which include explicit rider fees and other contract fees, and allocate them to the extent they are attributable to the market risk benefit.
At contract inception, we assess the fees and assessments that are collectible from the policyholder, which include explicit rider fees and other contract fees, and allocate them to the extent they are attributable to the market risk benefit.
Assets included in modified coinsurance and funds withheld portfolios are available to fund the benefits for the associated obligations but are restricted from other uses. The carrying value of the underlying assets in these modified coinsurance and funds withheld portfolios that we consider liquid as of December 31, 2023 was $15.6 billion.
The carrying value of these assets, excluding assets within modified coinsurance and funds withheld portfolios, as of December 31, 2024 was $119.0 billion. Assets included in modified coinsurance and funds withheld portfolios, including assets held in reinsurance trusts, are available to fund the benefits for the associated obligations but are restricted from other uses.
Effective December 31, 2023, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 60%, with ALRe owning the remaining 40% of economic interests.
Effective October 1, 2024, ACRA 2 repurchased a portion of its shares held by ALRe, which increased ADIP II’s ownership of economic interests in ACRA 2 to 63%, with ALRe owning the remaining 37%. ALRe holds all of ACRA 2’s voting interests.
Debt – The following summarizes our outstanding long-term senior notes (in millions, except percentages): Issuance Issue Date Maturity Date Interest Rate Principal Balance 2028 Senior Unsecured Notes January 12, 2018 January 12, 2028 4.125% $1,000 2030 Senior Unsecured Notes April 3, 2020 April 3, 2030 6.150% $500 2031 Senior Unsecured Notes October 8, 2020 January 15, 2031 3.500% $500 2051 Senior Unsecured Notes May 25, 2021 May 25, 2051 3.950% $500 2052 Senior Unsecured Notes December 13, 2021 May 15, 2052 3.450% $500 2033 Senior Unsecured Notes November 21, 2022 February 1, 2033 6.650% $400 2034 Senior Unsecured Notes December 12, 2023 January 15, 2034 5.875% $600 See Note 12 – Debt to the consolidated financial statements for further information on debt. 106 Table of Contents Item 7.
Debt – The following summarizes our outstanding long-term senior and subordinated notes as of December 31, 2024 (in millions, except percentages): Issuance Issue Date Maturity Date Interest Rate Principal Balance 2028 Senior Notes January 12, 2018 January 12, 2028 4.125% $1,000 2030 Senior Notes April 3, 2020 April 3, 2030 6.150% $500 2031 Senior Notes October 8, 2020 January 15, 2031 3.500% $500 2051 Senior Notes May 25, 2021 May 25, 2051 3.950% $500 2052 Senior Notes December 13, 2021 May 15, 2052 3.450% $500 2033 Senior Notes November 21, 2022 February 1, 2033 6.650% $400 2034 Senior Notes December 12, 2023 January 15, 2034 5.875% $600 2064 Subordinated Notes March 7, 2024 March 30, 2064 7.250% 1 $575 2054 Senior Notes March 22, 2024 April 1, 2054 6.250% $1,000 2054 Subordinated Notes October 10, 2024 October 15, 2054 6.625% 2 $600 1 The 2064 Subordinated Notes bear interest at an annual fixed rate of 7.250% until March 30, 2029.
These warehouse assets are senior secured assets at industry standard loan-to-value ratios, structured to investment grade-equivalent criteria, and were approved by Atlas in connection with this Transaction.
These warehouse assets are senior secured assets at industry standard loan-to-value ratios, structured to investment grade-equivalent criteria, and were approved by Atlas in connection with this Transaction. Atlas will earn total fees of $0.4 billion under the terms of the investment management agreement with CS, including management fees and transition and termination payments.
We declared common stock cash dividends of $187 million on November 30, 2023, payable to the holder of AHL’s Class A common shares with a record date of December 13, 2023 and payment date of December 15, 2023.
We declared common stock cash dividends of $78 million on November 18, 2024, payable to the holder of AHL’s Class A common stock with a record date of December 11, 2024 and payment date of December 13, 2024. We paid $452 million in common stock cash dividends during the year ended December 31, 2024.
As of each of December 31, 2023 and 2022, we had no outstanding borrowings under these arrangements. We have issued funding agreements to the FHLB. These funding agreements were issued in an investment spread strategy, consistent with other investment spread operations.
These funding agreements were issued in an investment spread strategy, consistent with other investment spread operations. As of December 31, 2024 and 2023, we had funding agreements outstanding with the FHLB in the aggregate principal amount of $15.6 billion and $6.5 billion, respectively.
We issue and reinsure deferred annuity contracts, which include both traditional deferred and indexed annuities, that contain guaranteed lifetime withdrawal benefit (GLWB) and guaranteed minimum death benefit (GMDB) riders. These riders meet the criteria for and are classified as market risk benefits.
We issue and reinsure deferred annuity contracts, which include both traditional deferred and indexed annuities, that contain GLWB and GMDB riders. These riders meet the criteria for and are classified as market risk benefits. Market risk benefits are measured at fair value at the contract level and may be recorded as a liability or an asset.
The primary cash outflows from financing activities are withdrawals on our investment-type policies and contracts, changes of cash collateral posted for derivative transactions, repayments of outstanding borrowings and payment of preferred and common stock dividends. Our financing activities provided cash flows totaling $44.8 billion, $26.5 billion and $19.6 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
The primary cash outflows from financing activities are withdrawals on our investment-type policies and contracts, changes of cash collateral posted for derivative transactions posted by counterparties, capital distributions, repayments of outstanding borrowings and payment of preferred and common stock dividends.
Cash flows from investing activities The primary cash inflows from investing activities are the sales, maturities and repayments of investments. The primary cash outflows from investing activities are the purchases and acquisitions of new investments. Our investing activities used cash flows totaling $43.7 billion, $34.4 billion and $27.9 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Our investing activities used cash flows totaling $61.9 billion, $43.7 billion and $34.4 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
See Glossary of Selected Terms – Consolidated RBC for further information. ACRA 1 – ACRA 1 provided us with access to on-demand capital to support our growth strategies and capital deployment opportunities. ACRA 1 provided a capital source to fund both our inorganic and organic channels.
The consolidated RBC ratio is calculated by aggregating US RBC and Bermuda RBC. ACRA 1 – ACRA 1 provided us with access to on-demand capital to support our growth strategies and capital deployment opportunities. ACRA 1 provided a capital source to fund both our inorganic and organic channels. The commitment period for ACRA 1 expired in August 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The reconciliation of total investments, including related parties, to net invested assets is as follows: (In millions) December 31, 2023 December 31, 2022 Total investments, including related parties $ 238,941 $ 196,448 Derivative assets (5,298) (3,309) Cash and cash equivalents (including restricted cash) 14,781 8,407 Accrued investment income 1,933 1,328 Net receivable (payable) for collateral on derivatives (2,835) (1,486) Reinsurance impacts (572) 1,423 VIE assets, liabilities and noncontrolling interests 14,818 12,747 Unrealized (gains) losses 16,445 22,284 Ceded policy loans (174) (179) Net investment receivables (payables) 11 186 Allowance for credit losses 608 471 Other investments (41) (10) Total adjustments to arrive at gross invested assets 39,676 41,862 Gross invested assets 278,617 238,310 ACRA noncontrolling interests (61,190) (41,859) Net invested assets $ 217,427 $ 196,451 The reconciliation of total investment funds, including related parties and VIEs, to net alternative investments within net invested assets is as follows: (In millions) December 31, 2023 December 31, 2022 Investment funds, including related parties and VIEs $ 17,668 $ 14,128 Equity securities 430 509 Certain equity securities included in AFS or trading securities 201 225 Investment funds within funds withheld at interest 827 1,126 Royalties 14 15 Net assets of the VIE, excluding investment funds (4,508) (2,041) Unrealized (gains) losses 26 44 ACRA noncontrolling interests (2,829) (1,836) Other assets (170) (91) Total adjustments to arrive at net alternative investments (6,009) (2,049) Net alternative investments $ 11,659 $ 12,079 101 Table of Contents Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The reconciliation of total investments, including related parties, to net invested assets is as follows: December 31, (In millions) 2024 2023 Total investments, including related parties $ 291,491 $ 238,941 Derivative assets (8,154) (5,298) Cash and cash equivalents (including restricted cash) 13,676 14,781 Accrued investment income 2,816 1,933 Net receivable (payable) for collateral on derivatives (4,602) (2,835) Reinsurance impacts (4,435) (572) VIE and VOE assets, liabilities and noncontrolling interests 17,289 14,818 Unrealized (gains) losses 18,320 16,445 Ceded policy loans (167) (174) Net investment receivables (payables) 97 11 Allowance for credit losses 720 608 Other investments (87) (41) Total adjustments to arrive at gross invested assets 35,473 39,676 Gross invested assets 326,964 278,617 ACRA noncontrolling interests (78,321) (61,190) Net invested assets $ 248,643 $ 217,427 The reconciliation of total investment funds, including related parties and consolidated VIEs, to net alternative investments within net invested assets is as follows: December 31, (In millions) 2024 2023 Investment funds, including related parties and consolidated VIEs $ 19,725 $ 17,668 Equity securities — 430 Certain equity securities included in AFS or trading securities 34 201 Investment funds within funds withheld at interest 900 827 Royalties 7 14 Net assets of the VIE, excluding investment funds (4,850) (4,508) Unrealized (gains) losses 92 26 ACRA noncontrolling interests (3,731) (2,829) Other assets (177) (170) Total adjustments to arrive at net alternative investments (7,725) (6,009) Net alternative investments $ 12,000 $ 11,659 The reconciliation of total liabilities to net reserve liabilities is as follows: December 31, (In millions) 2024 2023 Total liabilities $ 337,469 $ 279,344 Debt (6,309) (4,209) Derivative liabilities (3,556) (1,995) Payables for collateral on derivatives and short-term securities to repurchase (8,988) (4,370) Other liabilities (6,546) (2,590) Liabilities of consolidated VIEs (1,640) (1,115) Reinsurance impacts (11,861) (8,574) Ceded policy loans (167) (174) Market risk benefit asset (312) (377) ACRA noncontrolling interests (72,164) (56,651) Total adjustments to arrive at net reserve liabilities (111,543) (80,055) Net reserve liabilities $ 225,926 $ 199,289 98 Table of Contents Item 7.
As of December 31, 2023, payables for repurchase agreements were comprised of $686 million of short-term and $3.2 billion of long-term repurchase agreements. As of December 31, 2022, payables for repurchase agreements were comprised of $1.9 billion of short-term and $2.9 billion of long-term repurchase agreements. We have a $1.0 billion committed repurchase facility with BNP Paribas.
As of December 31, 2024, payables for repurchase agreements, based on original issuance, were comprised of $3.0 billion of short-term and $2.7 billion of long-term repurchase agreements. As of December 31, 2023, payables for repurchase agreements, based on original issuance, were comprised of $686 million of short-term and $3.2 billion of long-term repurchase agreements.
Our operating activities generated cash flows totaling $5.0 billion, $6.3 billion and $10.3 billion for the years ended December 31, 2023, 2022 and 2021, respectively.
Our financing activities provided cash flows totaling $59.4 billion, $44.8 billion and $26.5 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
These increases were partially offset by cash paid to settle outstanding repurchase agreements in 2023 compared to cash received from the issuance of repurchase agreements in 2022, the issuance of preferred stock in 2022 and a decrease in net capital contributions from noncontrolling interests. 104 Table of Contents Item 7.
These increases were partially offset by lower cash received from deferred annuity inflows, net of cash outflows, a capital contribution of $1.25 billion from AGM in 2023 related to the net proceeds from its mandatory convertible preferred stock offering and a decrease in net capital contributions from noncontrolling interests. 101 Table of Contents Item 7.
In general, liquid assets include cash and cash equivalents, highly rated bonds, short-term investments, unaffiliated preferred stock and public common stock, all of which generally have liquid markets with a large number of buyers. The carrying value of these assets, excluding assets within modified coinsurance and funds withheld portfolios, as of December 31, 2023 was $123.9 billion.
In general, liquid assets include cash and cash equivalents, highly rated bonds, short-term investments, unaffiliated preferred stock and public common stock, all of which generally have liquid markets with a large number of buyers, but exclude pledged assets, mainly associated with funding agreement and repurchase agreement liabilities.
AARe and AAM have each issued an assurance letter to CS to guarantee the full amount of $3.3 billion. In exchange for the purchase price, Atlas received approximately $0.4 billion in cash and a portfolio of senior secured warehouse assets, subject to debt, with approximately $1 billion of tangible equity value.
Our guarantees are not probable of payment; therefore, no liabilities have been recorded for the guarantees on the consolidated financial statements. In exchange for the purchase price, Atlas originally received approximately $0.4 billion in cash and a portfolio of senior secured warehouse assets, subject to debt, with approximately $1 billion of tangible equity value.
Cash flows from operating activities The primary cash inflows from operating activities include net investment income, annuity considerations and insurance premiums. The primary cash outflows from operating activities are comprised of benefit payments and operating expenses.
Cash flows from operating activities The primary cash inflows from operating activities include net investment income and insurance premiums. The primary cash outflows from operating activities are comprised of benefit payments and operating expenses. Our operating activities generated cash flows totaling $1.9 billion, $5.0 billion and $6.3 billion for the years ended December 31, 2024, 2023 and 2022, respectively.
Membership in Federal Home Loan Bank Through our membership in the FHLB, we are eligible to borrow under variable rate short-term federal funds arrangements to provide additional liquidity. The borrowings must be secured by eligible collateral such as mortgage loans, eligible CMBS or RMBS, government or agency securities and guaranteed loans.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Membership in Federal Home Loan Bank Through our membership in the FHLB, we are eligible to borrow under variable rate short-term federal funds arrangements to provide additional liquidity.
The facility has an initial commitment period of 12 months and automatically renews for successive 12-month periods until terminated by either party. During the commitment period, we may sell and BNP Paribas is required to purchase eligible investment grade corporate bonds pursuant to repurchase transactions at pre-agreed discounts in exchange for a commitment fee.
We have a $1.0 billion committed repurchase facility with BNP Paribas. The facility has an initial commitment period of 12 months and automatically renews for successive 12-month periods until terminated by either party.
The increase in cash provided by financing activities for the year ended December 31, 2023 compared to 2022 was primarily attributed to higher cash received from retail and flow reinsurance inflows, net of outflows, a favorable change in cash collateral posted for derivative transactions related to the favorable equity market performance in 2023 compared to unfavorable performance in 2022, a capital contribution by AGM in 2023 of $1.25 billion related to the net proceeds from its mandatory convertible preferred stock offering, the payment of less common stock dividends as 2022 included the payment of a $750 million dividend to AGM declared in December of 2021 and a larger debt issuance in 2023.
The increase in cash provided by financing activities for the year ended December 31, 2024 compared to 2023 was primarily attributable to higher cash received from funding agreement inflows, net of cash outflows, an increase in the issuance of short-term repurchase agreements, net of the repayment of a long-term repurchase agreement in 2024, the issuance of more debt in 2024, a favorable change in cash collateral posted by counterparties for derivative transactions and the payment of less common stock cash dividends as 2024 included an assets in kind dividend of certain alternative investments to AGM in lieu of a cash dividend and 2023 included the payment of the fourth quarter 2022 common stock dividend.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

20 edited+3 added−2 removed30 unchanged
Biggest changeThe financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings. These financial instruments include derivative instruments, embedded derivatives, mortgage loans, certain fixed maturity securities and market risk benefits.
Biggest changeThese financial instruments include derivative instruments, embedded derivatives, mortgage loans, certain fixed maturity securities and market risk benefits. The sensitivity analysis excludes those financial instruments carried at fair value for which changes in fair value are recognized in equity, such as AFS fixed maturity securities. 112 Table of Contents Item 7A.
In addition to credit-risk exposures from our investment portfolio, we are also exposed to credit risk from our counterparty exposures from our derivative hedging and reinsurance activities. Derivative counterparty risk is managed by trading on a collateralized basis with counterparties under International Swaps and Derivatives Association documents with a credit support annex having zero-dollar collateral thresholds.
In addition to credit-risk exposures from our investment portfolio, we are also exposed to credit risk from our counterparty exposures related to derivative hedging and reinsurance activities. Derivative counterparty risk is managed by trading on a collateralized basis with counterparties under International Swaps and Derivatives Association documents with a credit support annex having zero-dollar collateral thresholds.
Unique policy-level liability options are matched with static OTC options and residual risk arising from (1) policy holder behavior and other trading constraints (for example minimum trade size) and (2) the decision by the organization to enhance the value of the product offerings by dynamically managing a small portion of the exposure on custom indices, are managed dynamically by decomposing the risk of the portfolio (asset and liability positions) into market risk measures which are managed to pre-established risk limits.
Unique policy-level liability options are matched with static OTC options and residual risk arising from (1) policyholder behavior and other trading constraints (for example minimum trade size) and (2) the decision by the organization to enhance the value of the product offerings by dynamically managing a small portion of the exposure on custom indices, are managed dynamically by decomposing the risk of the portfolio (asset and liability positions) into market risk measures which are managed to pre-established risk limits.
See above for a discussion regarding the estimated impact on income (loss) before income taxes of an immediate, parallel increase in interest rates of 100 basis points from levels as of December 31, 2023, which discussion encompasses the impact of such an increase on certain of the adjustment items.
See above for a discussion regarding the estimated impact on income (loss) before income taxes of an immediate, parallel increase in interest rates of 100 basis points from levels as of December 31, 2024, which discussion encompasses the impact of such an increase on certain of the adjustment items.
The financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings. These financial instruments include public equity investments, derivative instruments, market risk benefits and the FIA embedded derivative. 116 Table of Contents
The financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings. These financial instruments include public equity investments, derivative instruments, market risk benefits and the FIA embedded derivative. 113 Table of Contents
Assuming all other factors are constant, if there was a decline in public equity market prices of 10% as of December 31, 2023, we estimate a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $538 million.
Assuming all other factors are constant, if there was a decline in public equity market prices of 10% as of December 31, 2024, we estimate a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $617 million.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measure Reconciliations for the reconciliation of net income (loss) available to AHL common stockholder to spread related earnings. The impact of changing rates on these adjustments is likely to be significant.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measure Reconciliations for the reconciliation of net income (loss) available to Athene Holding Ltd. common stockholder to spread related earnings. The impact of changing rates on these adjustments is likely to be significant.
If there was a similar parallel increase in interest rates from levels as of December 31, 2022, we estimate a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $2.1 billion, net of offsets.
If there was a similar parallel increase in interest rates from levels as of December 31, 2023, we estimate a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $2.5 billion, net of offsets.
As of December 31, 2022, we estimate that a decline in public equity market prices of 10% would cause a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $312 million.
As of December 31, 2023, we estimate that a decline in public equity market prices of 10% would cause a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $538 million.
Assuming all other factors are constant, if there was an immediate parallel increase in interest rates of 100 basis points from levels as of December 31, 2023, we estimate a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $2.5 billion, net of offsets.
Assuming all other factors are constant, if there was an immediate parallel increase in interest rates of 100 basis points from levels as of December 31, 2024, we estimate a net decrease to our point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments of $3.0 billion, net of offsets.
However, changes in interest rates that impact the cost of the projected GLWB and GMDB rider benefits, included within our market risk benefit reserve, are amortized within cost of funds in spread related earnings over the life of the business. 115 Table of Contents Item 7A.
However, changes in interest rates that impact the cost of the projected GLWB and GMDB rider benefits, included within our market risk benefit reserve, are amortized within cost of funds in spread related earnings over the life of the business.
The increase in sensitivity to point-in-time pre-tax income from changes in the fair value of these financial instruments as of December 31, 2023, when compared to December 31, 2022, is primarily driven by equity market performance during the year, which has resulted in more equity exposure to public equity market price declines.
The increase in sensitivity to point-in-time income (loss) before income taxes from changes in the fair value of these financial instruments as of December 31, 2024, when compared to December 31, 2023, is primarily driven by equity market performance during the year, which has resulted in more equity exposure to public equity market price declines.
Quantitative and Qualitative Disclosures About Market Risk Assuming a parallel increase in interest rates of 25 basis points, the estimated impact to spread related earnings over a 12-month period related to market risk benefits would be an increase of approximately $20 – $40 million, and a parallel decrease in interest rates of 25 basis points would generally result in a similar decrease.
Assuming a parallel increase in interest rates of 25 basis points, the estimated impact to spread related earnings over a 12-month period related to market risk benefits would be an increase of approximately $30 – $50 million, and a parallel decrease in interest rates of 25 basis points would generally result in a similar decrease.
We have a strong preference for alternative investments that have some or all of the following characteristics, among others: (1) investments that constitute a direct investment or an investment in a fund with a high degree of co-investment; (2) investments with credit- or debt-like characteristics (for example, a stipulated maturity and par value), or alternatively, investments with reduced volatility when compared to pure equity; or (3) investments that we believe have less downside risk.
We have a strong preference for alternative investments that have some or all of the following characteristics, among others: (1) investments with credit- or debt-like characteristics (for example, a stipulated maturity and par value), or alternatively, investments with reduced volatility when compared to pure equity; or (2) investments that we believe have less downside risk.
Assuming a 25 basis point increase in interest rates that persists for a 12-month period, the estimated impact to spread related earnings due to the change in net investment spread from floating rate assets and liabilities would be an increase of approximately $45 – $55 million, and a 25 basis point decrease would generally result in a similar decrease.
Quantitative and Qualitative Disclosures About Market Risk Assuming a 25 basis point increase in interest rates that persists for a 12-month period, the estimated impact to spread related earnings due to the change in net investment spread from floating rate assets and liabilities would be an increase of approximately $30 – $40 million, and a 25 basis point decrease would generally result in a similar decrease.
We currently target fund investments that have characteristics resembling fixed income investments versus those resembling pure equity investments, but as holders of partnership positions, our investments are generally held as equity positions.
The form of those investments is typically a limited partnership interest in a fund. We currently target fund investments that have characteristics resembling fixed income investments versus those resembling pure equity investments, but as holders of partnership positions, our investments are generally held as equity positions.
The increase in sensitivity to point-in-time pre-tax income from changes in the fair value of these financial instruments as of December 31, 2023, when compared to December 31, 2022, was primarily driven by the significant growth experienced in 2023.
The increase in sensitivity to point-in-time pre-tax income from changes in the fair value of these financial instruments as of December 31, 2024, when compared to December 31, 2023, was primarily driven by the growth experienced in 2024. The financial instruments included in the sensitivity analysis are carried at fair value and changes in fair value are recognized in earnings.
This is calculated without regard to future changes to assumptions. With the implementation of LDTI in accounting for long-duration insurance and investment contracts, changes in the fair value of market risk benefits due to current period movement in the interest rate curve used to discount the reserve are reflected in net income (loss) but excluded from spread related earnings.
Changes in the fair value of market risk benefits due to current period movement in the interest rate curve used to discount the reserve are reflected in net income (loss) but excluded from spread related earnings.
Risk measures that have term structure sensitivity, such as index volatility risk and interest rate risk, are monitored and risk managed along the term structure. We are also exposed to equity risk in our alternative investment portfolio. The form of those investments is typically a limited partnership interest in a fund.
Risk measures that have term structure sensitivity, such as index volatility risk and interest rate risk, are monitored and risk managed along the term structure. 111 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are also exposed to equity risk in our alternative investment portfolio.
Alternative investments are comprised of several categories, including at the most liquid end of the spectrum “liquid strategies”, (which is mostly exposure to publicly 114 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk traded equities), followed by “yield”, “equity” and “hybrid” strategies.
Alternative investments are comprised of several categories, including at the most liquid end of the spectrum “liquid strategies”, (which is mostly exposure to publicly traded equities), followed by “equity” and “credit” strategies. Our alternatives portfolio also includes strategic equity investments in origination platforms, insurance platforms and others. Our investment mandate in our alternative investment portfolio is inherently opportunistic.
Removed
Our alternatives portfolio also includes strategic equity investments in origination platforms, insurance platforms and others. Our investment mandate in our alternative investment portfolio is inherently opportunistic.
Added
This is calculated without regard to future changes to assumptions and excludes the impact of rate changes on cash and cash equivalents.
Removed
The sensitivity analysis excludes those financial instruments carried at fair value for which changes in fair value are recognized in equity, such as AFS fixed maturity securities.
Added
As of December 31, 2024 the balance in cash and cash equivalents plus restricted cash, net investment payables and receivables, reinsurance impacts and the net derivative collateral offsetting the related cash positions, was $6.8 billion, net of the amount attributable to the noncontrolling interests.
Added
The decrease in sensitivity to spread related earnings due to the change in net investment spread from floating rate assets and liabilities as of December 31, 2024, when compared to December 31, 2023, was driven by the decrease in our net floating rate position related to hedging actions as well as additional issuances of floating rate funding agreements in 2024.

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