American Equity Investment Life : 3Q20 Financial Supplement

Exhibit 99.2

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement

September 30, 2020

A. Financial Highlights
Condensed Consolidated Balance Sheets	1
Consolidated Statements of Operations	2
Quarterly Summary - Most Recent 5 Quarters	3
Non-GAAP Financial Measures

Reconciliation from Net Income Available to Common Stockholders to Non-GAAP	5
Operating Income (Loss) Available to Common Stockholders
Summary of Adjustments to Arrive at Non-GAAP Operating Income (Loss) Available to	6
Common Stockholders
Quarterly Summary - Reconciliation from Net Income (Loss) Available to Common	7
Stockholders to Non-GAAP Operating Income (Loss) Available to Common Stockholders
Quarterly Summary - Summary of Adjustments to Arrive at Non-GAAP Operating	8
Income (Loss) Available to Common Stockholders
Capitalization/Book Value per Common Share	9
Spread Results	10
B. Product Summary
Summary of Cost of Money for Deferred Annuities	10
Annuity Account Balance Rollforward	10
Annuity Deposits by Product Type	11
Surrender Charge Protection and Account Values by Product Type	11
Annuity Liability Characteristics	12

1. Investment Summary

	Summary of Invested Assets	15
	Credit Quality of Fixed Maturity Securities	15
	Watch List Securities	16
	Fixed Maturity Securities by Sector	17
	Mortgage Loans on Real Estate	18
D.	Shareholder Information	19
E.	Research Analyst Coverage	20

Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

		September 30, 2020			December 31, 2019
Assets
Investments:
Fixed maturity securities, available for sale, at fair value	$	51,700,743	$	51,580,490
Mortgage loans on real estate		3,926,699			3,448,793
Derivative instruments		874,741			1,355,989
Other investments		495,740			492,301
Total investments		56,997,923			56,877,573
Cash and cash equivalents		2,656,632			2,293,392
Coinsurance deposits		4,886,705			5,115,013
Accrued investment income		452,647			472,826
Deferred policy acquisition costs		2,163,003			2,923,454
Deferred sales inducements		1,426,945			1,966,723
Income taxes recoverable		34,773			-
Other assets		46,448			47,571
Total assets	$	68,665,076	$	69,696,552
Liabilities and Stockholders' Equity
Liabilities:
Policy benefit reserves	$	60,109,669	$	61,893,945
Other policy funds and contract claims		242,159			256,105
Notes payable		495,528			495,116
Subordinated debentures		78,037			157,265
Deferred income taxes		512,428			177,897
Income taxes payable		-			429
Other liabilities		1,108,521			2,145,676
Total liabilities		62,546,342			65,126,433
Stockholders' equity:
Preferred stock, Series A		16			16
Preferred stock, Series B		12			-
Common stock		91,932			91,107
Additional paid-in capital		1,510,987			1,212,311
Accumulated other comprehensive income		2,112,111			1,497,921
Retained earnings		2,403,676			1,768,764
Total stockholders' equity		6,118,734			4,570,119
Total liabilities and stockholders' equity	$	68,665,076	$	69,696,552

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands, except per share data)

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended			Nine Months Ended
		September 30,				September 30,
		2020			2019			2020			2019
Revenues:
Premiums and other considerations	$	10,407	$	5,152	$	29,103	$	14,688
Annuity product charges		62,277			63,647			185,264			177,313
Net investment income		543,331			590,412			1,660,353			1,719,418
Change in fair value of derivatives		205,011			(20,042)			(409,201)			440,472
Net realized gains (losses) on investments		(22,321)			4,328			(68,545)			(67)
Other than temporary impairment (OTTI) losses on investments:
Total OTTI losses		-			(101)			-			(1,099)
Portion of OTTI losses recognized from other comprehensive income		-			-			-			(215)
Net OTTI losses recognized in operations		-			(101)			-			(1,314)
Loss on extinguishment of debt		-			-			(2,024)			-
Total revenues		798,705			643,396			1,394,950			2,350,510
Benefits and expenses:
Insurance policy benefits and change in future policy benefits		13,273			7,627			36,676			23,865
Interest sensitive and index product benefits		576,147			500,285			1,217,358			888,062
Amortization of deferred sales inducements		416,983			(55,769)			415,396			(2,675)
Change in fair value of embedded derivatives		(1,732,497)			212,278			(1,855,623)			1,306,163
Interest expense on notes payable		6,388			6,382			19,161			19,141
Interest expense on subordinated debentures		1,323			3,968			4,232			12,113
Amortization of deferred policy acquisition costs		622,596			(120,934)			623,409			(45,856)
Other operating costs and expenses		42,738			38,554			128,315			114,959
Total benefits and expenses		(53,049)			592,391			588,924			2,315,772
Income before income taxes		851,754			51,005			806,026			34,738
Income tax expense		184,554			13,645			143,308			8,798
Net income		667,200			37,360			662,718			25,940
Less: Preferred stock dividends		5,950			-			18,511			-
Net income available to common stockholders	$	661,250		$	37,360		$	644,207		$	25,940
Earnings per common share	$	7.20	$	0.41	$	7.02	$	0.28
Earnings per common share - assuming dilution	$	7.17	$	0.41	$	7.00	$	0.28
Weighted average common shares outstanding (in thousands):
Earnings per common share		91,861			91,252			91,770			91,081
Earnings per common share - assuming dilution		92,163			91,711			92,071			91,748

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands, except per share data)

Quarterly Summary - Most Recent 5 Quarters

		Q3 2020			Q2 2020			Q1 2020			Q4 2019			Q3 2019
Revenues:
Traditional life insurance premiums	$	708	$	722	$	823	$	762	$	778
Life contingent immediate annuity considerations		9,699			10,310			6,841			8,084			4,374
Surrender charges		16,447			19,390			19,705			15,092			20,537
Lifetime income benefit rider fees		45,830			44,048			39,844			47,630			43,110
Net investment income		543,331			543,704			573,318			588,217			590,412
Change in fair value of derivatives		205,011			327,662			(941,874)			466,434			(20,042)
Net realized gains (losses) on investments		(22,321)			(25,888)			(20,336)			7,029			4,328
Net OTTI losses recognized in operations		-			-			-			(17,412)			(101)
Loss on extinguishment of debt		-			-			(2,024)			(2,001)			-
Total revenues		798,705			919,948			(323,703)			1,113,835			643,396
Benefits and expenses:
Traditional life insurance policy benefits and change in future policy		655			702			621			835			758
benefits
Life contingent immediate annuity benefits and change in future policy		12,618			12,629			9,451			10,718			6,869
benefits
Interest sensitive and index product benefits (a)		576,147			240,992			400,219			399,514			500,285
Amortization of deferred sales inducements (b)(d)		416,983			(75,178)			73,591			91,260			(55,769)
Change in fair value of embedded derivatives (c)(d)		(1,732,497)			1,126,935			(1,250,061)			147,879			212,278
Interest expense on notes payable		6,388			6,388			6,385			6,384			6,382
Interest expense on subordinated debentures		1,323			1,321			1,588			3,651			3,968
Amortization of deferred policy acquisition costs (b)(d)		622,596			(119,889)			120,702			133,573			(120,934)
Other operating costs and expenses		42,738			41,951			43,626			39,194			38,554
Total benefits and expenses		(53,049)			1,235,851			(593,878)			833,008			592,391
Income (loss) before income taxes		851,754			(315,903)			270,175			280,827			51,005
Income tax expense (benefit) (e)		184,554			(68,474)			27,228			60,677			13,645
Net income (loss) (a)(b)(c)(d)(e)		667,200			(247,429)			242,947			220,150			37,360
Less: Preferred stock dividends		5,950			5,950			6,611			-			-
Net income (loss) available to common stockholders (a)(b)(c)(d)(e)	$	661,250		$	(253,379)		$	236,336		$	220,150		$	37,360
Earnings (loss) per common share	$	7.20	$	(2.76)	$	2.58	$	2.41	$	0.41
Earnings (loss) per common share - assuming dilution (a)(b)(c)(d)(e)	$	7.17	$	(2.76)	$	2.57	$	2.40	$	0.41
Weighted average common shares outstanding (thousands):
Earnings (loss) per common share		91,861			91,803			91,644			91,314			91,252
Earnings (loss) per common share - assuming dilution		92,163			92,027			92,021			91,883			91,711

1. Q3 2020 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index products by $285.8 million and decreased both net income and net income available to common stockholders by $224.4 million and decreased earnings per common share - assuming dilution by $2.44 per share.
   Q3 2019 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index product benefits by $315.4 million and decreased both net income and net income available to common stockholders by $247.3 million and decreased earnings per common share - assuming dilution by $2.70 per share.
2. Q3 2020 includes expense from the revision of assumptions which increased amortization of deferred sales inducements and deferred policy acquisition costs by $391.4 million and $589.2 million, respectively, and decreased both net income and net income available to common stockholders by $769.8 million and decreased earnings per common share - assuming dilution by $8.35 per share.
   Q3 2019 includes a benefit from the revision of assumptions which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $104.7 million and $193.0 million, respectively, and increased both net income and net income available to common stockholders by $233.4 million and increased earnings per common share - assuming dilution by $2.54 per share.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands, except per share data)

1. Q3 2020 includes a benefit from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact decreased change in fair value of embedded derivatives by $2,111.1 million and increased both net income and net income available to common stockholders by $1,657.2 million and increased earnings per common share - assuming dilution by $17.98 per share.
   Q3 2019 includes expense from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact increased change in fair value of embedded derivatives by $28.2 million and decreased both net income and net income available to common stockholders by $22.1 million and decreased earnings per common share - assuming dilution by $0.24 per share.
2. Q2 2020 includes a benefit from the revision of assumptions used in determining the embedded derivative component of our fixed index annuity policy benefit reserves. The impact decreased change in fair value of embedded derivatives by $230.1 million, increased amortization of deferred sales inducements and deferred policy acquisition costs by $36.7 million and $57.6 million, respectively, and decreased both net loss and net loss available to common stockholders by $106.5 million and reduced loss per common share - assuming dilution by $1.16 per share.
3. Q1 2020 includes a tax benefit related to the provision of the Coronavirus Aid, Relief, and Economic Security Act, ("the CARES ACT") which was signed into legislation on March 27, 2020 and allows net operating losses for 2018 through 2020 to be carried back to previous tax years in which a 35% statutory tax rate was in effect. The impact reduced income tax expense and increased both net income and net income available to common stockholders by $30.8 million and increased earnings per common share - assuming dilution by $0.33 per share.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

In addition to net income available to common stockholders, we have consistently utilized non-GAAP operating income (loss) available to common stockholders and non-GAAP operating income (loss) available to common stockholders per common share - assuming dilution, non- GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance. Non- GAAP operating income (loss) available to common stockholders equals net income available to common stockholders adjusted to eliminate the impact of items that fluctuate from quarter to quarter in a manner unrelated to core operations, and we believe measures excluding their impact are useful in analyzing operating trends. The most significant adjustments to arrive at non-GAAP operating income (loss) available to common stockholders eliminate the impact of fair value accounting for our fixed index annuity business. These adjustments are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of non-GAAP operating income (loss) available to common stockholders together with net income available to common stockholders provides information that may enhance an investor's understanding of our underlying results and profitability.

Reconciliation from Net Income Available to Common Stockholders to Non-GAAP Operating Income (Loss) Available to Common Stockholders

		Three Months Ended			Nine Months Ended
		September 30,				September 30,
		2020			2019			2020			2019
Net income available to common stockholders	$	661,250	$	37,360	$	644,207	$	25,940
Adjustments to arrive at non-GAAP operating income (loss) available to
common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses		15,145			(3,175)			49,986			(245)
Change in fair value of derivatives and embedded derivatives - fixed		(1,176,909)			250,186			(873,773)			500,998
index annuities
Change in fair value of derivatives - interest rate caps and swap		-			(76)			(848)			1,414
Income taxes		250,701			(50,940)			177,804			(105,759)
Non-GAAP operating income (loss) available to common stockholders	$	(249,813)	$	233,355	$	(2,624)	$	422,348
Per common share - assuming dilution:
Net income available to common stockholders	$	7.17	$	0.41	$	7.00	$	0.28
Adjustments to arrive at non-GAAP operating income (loss) available
to common stockholders:
Anti-dilutive effect of operating loss		0.01			-			-			-
Net realized gains/losses on financial assets, including credit losses		0.16			(0.04)			0.54			-
Change in fair value of derivatives and embedded derivatives - fixed		(12.77)			2.73			(9.49)			5.46
index annuities
Change in fair value of derivatives - interest rate caps and swap		-			-			(0.01)			0.01
Income taxes		2.71			(0.56)			1.93			(1.15)
Non-GAAP operating income (loss) available to common stockholders	$	(2.72)	$	2.54	$	(0.03)	$	4.60

1. Adjustments to net income available to common stockholders to arrive at non-GAAP operating income (loss) available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements (DSI) and deferred policy acquisition costs (DAC) where applicable.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income (Loss) Available to Common Stockholders

		Three Months Ended			Nine Months Ended
		September 30,				September 30,
		2020			2019			2020			2019
Net realized gains/losses on financial assets, including credit losses:
Net realized gains/losses on financial assets, including credit losses	$	21,023	$	(4,227)	$	67,956	$	1,381
Amortization of DAC and DSI		(5,878)			1,052			(17,970)			(1,626)
Income taxes		(3,271)			3,151			(10,797)			2,518
	$	11,874	$	(24)	$	39,189	$	2,273
Change in fair value of derivatives and embedded derivatives:
Fixed index annuities	$	(1,935,585)	$	132,411	$	(1,432,030)	$	591,577
Interest rate caps and swap		-			(76)			(848)			1,414
Amortization of DAC and DSI		758,676			117,775			558,257			(90,579)
Income taxes		253,972			(54,091)			188,601			(108,277)
	$	(922,937)	$	196,019	$	(686,020)	$	394,135

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands, except per share data)

NON-GAAP FINANCIAL MEASURES

Quarterly Summary - Most Recent 5 Quarters

Reconciliation from Net Income (Loss) Available to Common Stockholders to Non-GAAP Operating Income (Loss) Available to Common Stockholders

		Q3 2020			Q2 2020			Q1 2020			Q4 2019			Q3 2019
Net income (loss) available to common stockholders	$	661,250	$	(253,379)	$	236,336	$	220,150	$	37,360
Adjustments to arrive at non-GAAP operating income (loss) available to
common stockholders: (a)
Net realized gains/losses on financial assets, including credit losses		15,145			18,492			16,349			7,606			(3,175)
Change in fair value of derivatives and embedded derivatives -		(1,176,909)			423,590			(120,454)			(127,777)			250,186
fixed index annuities
Change in fair value of derivatives - interest rate caps and swap		-			-			(848)			(167)			(76)
Income taxes		250,701			(95,599)			22,702			26,023			(50,940)
Non-GAAP operating income (loss) available to common stockholders	$	(249,813)	$	93,104	$	154,085	$	125,835	$	233,355
(b)(c)(d)
Per common share - assuming dilution:
Net income (loss) available to common stockholders	$	7.17	$	(2.76)	$	2.57	$	2.40	$	0.41
Adjustments to arrive at non-GAAP operating income (loss) available to
common stockholders:
Anti-dilutive effect of net loss		-			0.01			-			-			-
Anti-dilutive effect of operating loss		0.01			-			-			-			-
Net realized gains/losses on financial assets, including credit losses		0.16			0.20			0.17			0.08			(0.04)
Change in fair value of derivatives and embedded derivatives - fixed		(12.77)			4.60			(1.31)			(1.39)			2.73
index annuities
Change in fair value of derivatives - interest rate caps and swap		-			-			(0.01)			-			-
Income taxes		2.71			(1.04)			0.25			0.28			(0.56)
Non-GAAP operating income (loss) available to common stockholders	$	(2.72)	$	1.01	$	1.67	$	1.37	$	2.54
(b)(c)(d)

1. Adjustments to net income (loss) available to common stockholders to arrive at non-GAAP operating income (loss) available to common stockholders are presented net of related adjustments to amortization of deferred sales inducements and deferred policy acquisition costs where applicable.

1. Q3 2020 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index products by $285.8 million and increased non-GAAP operating loss available to common stockholders and non-GAAP operating loss available to common stockholders per common share - assuming dilution by $224.4 million and $2.44 per share, respectively.
   Q3 2019 includes expense from the revision of assumptions used in determining reserves held for lifetime income benefit riders. The impact increased interest sensitive and index product benefits by $315.4 million and decreased non-GAAP operating income available to common stockholders and non- GAAP operating income available to common stockholders per common share - assuming dilution by $247.3 million and $2.70 per share, respectively.
2. Q3 2020 includes expense from the revision of assumptions which increased amortization of deferred sales inducements and deferred policy acquisition costs by $57.5 million and $91.0 million, respectively, and increased non-GAAP operating loss available to common stockholders and non-GAAP operating loss available to common stockholders per common share- assuming dilution by $116.5 million and $1.26 per share, respectively.
   Q3 2019 includes a benefit from the revision of assumptions which reduced amortization of deferred sales inducements and deferred policy acquisition costs by $184.9 million and $288.3 million, respectively, and increased non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders per common share- assuming dilution by $371.0 million and $4.05 per share, respectively.
3. Q1 2020 includes a tax benefit related to the provision of the CARES ACT which was signed into legislation on March 27, 2020 and allows net operating losses for 2018 through 2020 to be carried back to previous tax years in which a 35% statutory tax rate was in effect. The impact reduced income tax expense and increased non-GAAP operating income available to common stockholders and non-GAAP operating income available to common stockholders per common share - assuming dilution by $30.8 million and $0.33 per share, respectively.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

NON-GAAP FINANCIAL MEASURES

Summary of Adjustments to Arrive at Non-GAAP Operating Income (Loss) Available to Common Stockholders

		Q3 2020			Q2 2020			Q1 2020			Q4 2019			Q3 2019
Net realized (gains) losses on investments	$	22,321	$	25,888	$	20,336	$	(7,029)	$	(4,328)
Net OTTI losses recognized in operations		-			-			-			17,412			101
Change in fair value of derivatives		(203,088)			(413,489)			1,039,322			(370,973)			(79,943)
Increase (decrease) in total revenues		(180,767)			(387,601)			1,059,658			(360,590)			(84,170)
Amortization of deferred sales inducements		(303,710)			115,511			(29,683)			(37,374)			(57,408)
Change in fair value of embedded derivatives		1,732,497			(1,126,935)			1,250,061			(147,879)			(212,278)
Interest sensitive and index product benefits (a)		1,298			612			(1,321)			-			-
Amortization of deferred policy acquisition costs		(449,088)			181,129			(54,446)			(54,999)			(61,419)
Increase (decrease) in total benefits and expenses		980,997			(829,683)			1,164,611			(240,252)			(331,105)
Increase in income (loss) before income taxes		(1,161,764)			442,082			(104,953)			(120,338)			246,935
Increase (decrease) in income tax expense (benefit)		(250,701)			95,599			(22,702)			(26,023)			50,940
Increase (decrease) in net income (loss) available to common	$	(911,063)	$	346,483	$	(82,251)	$	(94,315)	$	195,995
stockholders

1. Interest sensitive and index product benefits adjustment reflects the change in the allowance for credit losses on our reinsurance recoverable/coinsurance deposits under a revised impairment model for financial assets measured at amortized cost which we were required to adopt on January 1, 2020. The change in this allowance is reflected in the net realized gains/losses of financial assets, including credit losses line in the other Non-GAAP financial measures tables in this financial supplement.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands, except share and per share data)

Capitalization/Book Value per Common Share

		Q3 2020			Q2 2020			Q1 2020			Q4 2019			Q3 2019
Capitalization:
Notes payable	$	500,000	$	500,000	$	500,000	$	500,000	$	500,000
Subordinated debentures payable to subsidiary trusts		78,037			77,964			77,893			159,272			247,362
Total debt		578,037			577,964			577,893			659,272			747,362
Total stockholders' equity		6,118,734			5,062,059			3,522,757			4,570,119			4,126,716
Total capitalization		6,696,771			5,640,023			4,100,650			5,229,391			4,874,078
Accumulated other comprehensive income (AOCI)		(2,112,111)			(1,719,839)			(219,974)			(1,497,921)			(1,639,429)
Total capitalization excluding AOCI (a)	$	4,584,660		$	3,920,184		$	3,880,676		$	3,731,470		$	3,234,649
Total stockholders' equity
$	6,118,734	$	5,062,059	$	3,522,757	$	4,570,119	$	4,126,716
Equity available to preferred stockholders (b)		(700,000)			(700,000)			(400,000)			(400,000)			-
Total common stockholders' equity (c)		5,418,734			4,362,059			3,122,757			4,170,119			4,126,716
Accumulated other comprehensive income		(2,112,111)			(1,719,839)			(219,974)			(1,497,921)			(1,639,429)
Total common stockholders' equity excluding AOCI (c)		3,306,623			2,642,220			2,902,783			2,672,198			2,487,287
Net impact of fair value accounting for derivatives and embedded		(237,099)			685,839			353,853			448,924			549,202
derivatives
Total common stockholders' equity excluding AOCI and the net
impact of fair value accounting for derivatives and embedded	$	3,069,524		$	3,328,059		$	3,256,636		$	3,121,122		$	3,036,489
derivatives (c)
Common shares outstanding	91,931,837	91,595,066	91,497,841	91,107,555	91,006,950
Book Value per Common Share: (d)
Book value per common share (c)	$	58.94	$	47.62	$	34.13	$	45.77	$	45.35
Book value per common share excluding AOCI (c)	$	35.97	$	28.85	$	31.73	$	29.33	$	27.33
Book value per common share excluding AOCI and the net impact of	$	33.39	$	36.33	$	35.59	$	34.26	$	33.37
fair value accounting for derivatives and embedded derivatives (c)
Debt-to-Capital Ratios: (e)
Senior debt / Total capitalization		10.9 %			12.8 %			12.9 %			13.4 %			15.5 %
Total debt / Total capitalization		12.6 %			14.7 %			14.9 %			17.7 %			23.1 %

1. Total capitalization excluding AOCI, a non-GAAP financial measure, is based on stockholders' equity excluding the effect of AOCI.
2. Equity available to preferred stockholders is equal to the redemption value of outstanding preferred stock plus share dividends declared but not yet issued.
3. Total common stockholders' equity, total common stockholder's equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, exclude equity available to preferred stockholders. Total common stockholders' equity and book value per common share excluding AOCI, non-GAAP financial measures, are based on common stockholders' equity excluding the effect of AOCI. Since AOCI fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale securities, we believe these non-GAAP financial measures provide useful supplemental information. Total common stockholders' equity and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives, non-GAAP financial measures, are based on common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives. Since the net impact of fair value accounting for our derivatives and embedded derivatives fluctuates from quarter to quarter and the most significant impacts relate to fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results, we believe these non-GAAP financial measures provide useful supplemental information.
4. Book value per common share including and excluding AOCI and book value per common share excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives are calculated as total common stockholders' equity, total common stockholders' equity excluding AOCI and total common stockholders' equity excluding AOCI and the net impact of fair value accounting for derivatives and embedded derivatives divided by the total number of shares of common stock outstanding.
5. Debt-to-capitalratios are computed using total capitalization excluding AOCI.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Spread Results

Nine Months Ended

September 30,
2020		2019		Q3 2020		Q2 2020		Q1 2020		Q4 2019		Q3 2019
4.20%	4.53%	Average yield on invested assets	4.10%	4.12%	4.36%	4.52%	4.59%
1.71%	1.87%	Aggregate cost of money	1.66%	1.73%	1.72%	1.75%	1.84%
2.49%	2.66%	Aggregate investment spread	2.44%	2.39%	2.64%	2.77%	2.75%
			Impact of:
0.06%	0.06%	Investment yield - additional prepayment income	0.10%	0.03%	0.06%	0.12%	0.11%
0.03%	0.04%	Cost of money effect of over (under) hedging	0.03%	(0.01)%	0.05%	0.05%	0.02%
$52,849,751	$50,716,178	Weighted average investments	$53,024,798	$52,901,215	$52,623,239	$52,141,459	$51,529,850

Weighted average investments include fixed maturity securities at amortized cost and mortgage loans on real estate and other investments at carrying values as reflected in the consolidated balance sheets. The numerator for average yield on invested assets includes net investment income and the tax effect of investment income that is exempt from income taxes.

Summary of Cost of Money for Deferred Annuities

Nine Months Ended

	September 30,
	2020			2019			Q3 2020			Q2 2020			Q1 2020			Q4 2019			Q3 2019
					Included in interest sensitive and index product
					benefits:
$	551,562	$	310,020	Index credits	$	174,747	$	97,875	$	278,940	$	277,798	$	92,343
	142,917			147,425	Interest credited		47,376			46,594			48,947			49,482			49,511
					Included in change in fair value of derivatives:
	(560,683)			(320,381)	Proceeds received at option expiration		(178,405)			(97,015)			(285,263)			(284,624)			(95,491)
	546,352			592,857	Pro rata amortization of option cost		176,481			182,841			187,030			188,984			195,354
$	680,148		$	729,921	Cost of money for deferred annuities	$	220,199		$	230,295		$	229,654		$	231,640		$	241,717
$	53,182,845	$	52,007,003	Weighted average liability balance outstanding	$	53,059,376	$	53,214,255	$	53,274,905	$	53,092,419	$	52,682,886

Annuity Account Balance Rollforward

Nine Months Ended

	September 30,
	2020			2019			Q3 2020			Q2 2020			Q1 2020			Q4 2019			Q3 2019
$	53,233,898	$	51,053,450	Account balances at beginning of period	$	53,112,600	$	53,315,909	$	53,233,898	$	52,950,937	$	52,414,835
	1,782,453			3,822,410	Net deposits		557,675			543,026			681,752			838,761			1,216,720
	68,467			140,959	Premium bonuses		21,205			22,710			24,552			36,983			46,968
	694,479			457,445	Fixed interest credited and index credits		222,123			144,469			327,887			327,280			141,854
	(55,542)			(56,473)	Surrender charges		(16,447)			(19,390)			(19,705)			(15,092)			(20,537)
	(129,722)			(120,840)	Lifetime income benefit rider fees		(45,830)			(44,048)			(39,844)			(47,630)			(43,110)
	(2,587,883)			(2,346,014)	Surrenders, withdrawals, deaths, etc.		(845,176)			(850,076)			(892,631)			(857,341)			(805,793)
$	53,006,150	$	52,950,937	Account balances at end of period	$	53,006,150	$	53,112,600	$	53,315,909	$	53,233,898	$	52,950,937

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Annuity Deposits by Product Type

Nine Months Ended

	September 30,
	2020			2019			Q3 2020			Q2 2020			Q1 2020			Q4 2019			Q3 2019
					American Equity Life:
$	1,491,564	$	3,293,458	Fixed index annuities	$	432,602	$	472,899	$	586,063	$	765,180	$	1,054,796
	6,464			9,402	Annual reset fixed rate annuities		1,817			2,316			2,331			1,843			2,340
	983			1,307	Multi-year fixed rate annuities		531			83			369			306			593
	25,687			7,129	Single premium immediate annuities		10,205			10,084			5,398			4,873			3,314
	1,524,698			3,311,296			445,155			485,382			594,161			772,202			1,061,043
					Eagle Life:
	239,349			579,119	Fixed index annuities		60,476			72,371			106,502			67,784			166,081
	97			193	Annual reset fixed rate annuities		39			17			41			6			-
	73,386			151,572	Multi-year fixed rate annuities		68,206			1,031			4,149			81,041			79,000
	312,832			730,884			128,721			73,419			110,692			148,831			245,081
					Consolidated:
	1,730,913			3,872,577	Fixed index annuities		493,078			545,270			692,565			832,964			1,220,877
	6,561			9,595	Annual reset fixed rate annuities		1,856			2,333			2,372			1,849			2,340
	74,369			152,879	Multi-year fixed rate annuities		68,737			1,114			4,518			81,347			79,593
	25,687			7,129	Single premium immediate annuities		10,205			10,084			5,398			4,873			3,314
	1,837,530			4,042,180	Total before coinsurance ceded		573,876			558,801			704,853			921,033			1,306,124
	29,390			212,641	Coinsurance ceded		5,996			5,691			17,703			77,399			86,090
$	1,808,140	$	3,829,539	Net after coinsurance ceded	$	567,880	$	553,110	$	687,150	$	843,634	$	1,220,034

Surrender Charge Protection and Account Values by Product Type

Annuity Surrender Charges and Net (of Coinsurance) Account Values at September 30, 2020:

			Surrender Charge				Net Account Value
		Avg.		Avg.	Avg.			Dollars in
Product Type		Years		Years	%				%
At Issue		Remaining		Remaining			Thousands
Fixed Index Annuities	12.8	6.5		10.4%	$	50,958,583	96.1 %
Annual Reset Fixed Rate Annuities	9.3	3.0		5.6%			1,407,450	2.7 %
Multi-Year Fixed Rate Annuities	6.3	1.6		4.9%			640,117		1.2 %
Total	12.6	6.3		10.2%	$	53,006,150	100.0 %

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

		Fixed			Fixed Index
Surrender Charge Percentages:		Annuities			Annuities
	Account Value			Account Value
No surrender charge	$	825,721	$	2,846,232
0.0% < 2.0%		16,822			275,001
2.0% < 3.0%		31,469			1,545,053
3.0% < 4.0%		59,817			1,957,048
4.0% < 5.0%		64,727			1,805,901
5.0% < 6.0%		266,924			3,077,161
6.0% < 7.0%		52,592			1,435,413
7.0% < 8.0%		88,886			5,094,333
8.0% < 9.0%		52,049			3,819,840
9.0% < 10.0%		126,967			3,747,742
10.0% or greater		461,593			25,354,859
	$	2,047,567	$	50,958,583
		Fixed and			Weighted
		Fixed Index			Average
Surrender Charge Expiration By Year:		Annuities			Surrender
	Account Value			Charge
Out of Surrender Charge	$	3,671,953			0.00 %
2020		260,408			2.64 %
2021		1,189,431			3.32 %
2022		1,684,517			4.22 %
2023		4,107,017			5.02 %
2024		5,043,124			6.58 %
2025		6,007,714			8.08 %
2026		5,177,748			9.75 %
2027		4,428,208			11.38 %
2028		4,690,673			12.28 %
2029		5,973,173			13.60 %
2030		3,513,420			15.54 %
2031		2,944,267			17.59 %
2032		2,010,489			18.17 %
2033		1,158,686			18.58 %
2034		712,963			19.05 %
2035		317,288			19.58 %
2036		115,071			20.00 %
	$	53,006,150			10.19 %

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

		Fixed			Fixed Index
Credited Rate vs. Ultimate Minimum Guaranteed Rate Differential:		Annuities			Annuities
	Account Value			Account Value
No differential	$	959,589	$	1,261,845
› 0.0% - 0.25%		48,555			147,586
› 0.25% - 0.5%		236,229			3,353
› 0.5% - 1.0%		23,109			9,729
› 1.0% - 1.5%		11,476			-
1.00% ultimate guarantee - 1.99% wtd avg interest rate (a)		502,678			891,202
1.50% ultimate guarantee - 1.11% wtd avg interest rate (a)		141,632			3,261,157
1.75% ultimate guarantee - 1.71% wtd avg interest rate (a)		49,229			535,629
2.00% ultimate guarantee - 1.85% wtd avg interest rate (a)		75,070			-
2.25% ultimate guarantee - 1.69% wtd avg interest rate (a)		-			730,120
3.00% ultimate guarantee - 1.98% wtd avg interest rate (a)		-			1,435,179
Allocated to index strategies (see tables that follow)		-			42,682,783
	$	2,047,567	$	50,958,583

1. The minimum guaranteed interest rate for the fixed rate or the fixed rate strategy ranges from 0.5% - 1.75%. The ultimate guaranteed rate is applied on less than 100% of the premium.

If all crediting rates were reduced to minimum guaranteed rates (subject to limitations imposed by ultimate minimum guaranteed rates where applicable) the weighted average crediting rate as of September 30, 2020 for fixed annuities and funds allocated to the fixed rate strategy for fixed index annuities would decrease by 0.13%.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Annuity Liability Characteristics

FIXED INDEX ANNUITIES ACCOUNT VALUE - INDEX STRATEGIES

Annual Monthly Average and Point-to-Point with Caps
						Minimum Guaranteed Cap
			1%			3%			4%			7%				8% +
Current Cap
At minimum	$	1,346		$	102,171	$	4,992,952	$	62,425			$	142,594
1.75%	- 3%		8,636,011			-			-			-		-
3% - 4%		265,296			3,638			-			-		-
4% - 5%		1,013,946			217,323			1,238,010			-		-
5% - 6%		510,330			182,458			28,498			-		-
6% - 7%		-		-			444			-		-
>= 7%			10,580			6,771			716			5,402				-
Annual Monthly Average and Point-to-Point with Participation Rates
							Minimum Guaranteed Participation Rate
						10%			20% - 25%			35%				50% +
Current Participation Rate
At minimum				$	94,543	$	396,064	$	89,508			$	96,074
< 20%						918,295			-			-		-
20% - 40%					1,742,696			177,087			838				-
40% - 60%					2,697,494			89,741			55,280				-
60% - 100%					649,591			-			-		-
> 100%					494,672			-			-		-
S&P 500 Monthly Point-to-Point - Minimum Guaranteed Monthly Cap = 1.0%
Current Cap
At minimum				$	2,083,877
1.10%	- 1.30%					6,752,359
1.40%	- 1.60%					1,882,049
1.70%	- 2.00%					279,564
>= 2.10%					4,773
Volatility Control Index
Current Asset Fee
At Maximum				$	-
0.75%	- 1.75%					352,651
2.25%	- 2.75%					205,570
3.00%	- 3.50%					1,745,345
3.75%	- 5.00%					2,970,283

If all caps and participation rates were reduced to minimum caps and participation rates and current asset fees were increased to their maximums, the cost of options would decrease by 0.75% based upon prices of options for the week ended September 30, 2020.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Summary of Invested Assets

		September 30, 2020			December 31, 2019
		Carrying		Percent			Carrying		Percent
		Amount				Amount
Fixed maturity securities:
United States Government full faith and credit	$	38,739	0.1 %	$	161,765	0.3 %
United States Government sponsored agencies		1,074,978	1.9 %			625,020	1.1 %
United States municipalities, states and territories		3,805,086	6.7 %			4,527,671	7.9 %
Foreign government obligations		209,233	0.4 %			205,096	0.3 %
Corporate securities		33,457,290	58.7 %			32,536,839	57.2 %
Residential mortgage backed securities		1,623,073	2.8 %			1,575,664	2.8 %
Commercial mortgage backed securities		5,478,783	9.6 %			5,786,279	10.2 %
Other asset backed securities		6,013,561		10.5 %			6,162,156		10.8 %
Total fixed maturity securities		51,700,743	90.7 %			51,580,490	90.6 %
Mortgage loans on real estate		3,926,699	6.9 %			3,448,793	6.1 %
Derivative instruments		874,741	1.5 %			1,355,989	2.4 %
Other investments		495,740		0.9 %			492,301		0.9 %
	$	56,997,923	100.0 %	$	56,877,573	100.0 %

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands, except per share data)

Credit Quality of Fixed Maturity Securities - September 30, 2020

NAIC Designation			Carrying		Percent		Rating Agency Rating			Carrying		Percent
		Amount					Amount
1	$	28,981,733	56.1 %		Aaa/Aa/A	$	29,855,053	57.8 %
2			20,682,645	40.0 %		Baa			19,893,094	38.5 %
3			1,684,689	3.3 %		Ba			1,573,650	3.0 %
4			248,133	0.5 %		B			224,170	0.4 %
5			80,048	0.1 %		Caa			65,386	0.1 %
6			23,495		- %		Ca and lower			89,390		0.2 %
	$	51,700,743	100.0 %			$	51,700,743	100.0 %

Watch List Securities - September 30, 2020

			Amortized			Allowance for		Amortized Cost,			Net Unrealized
General Description (a)								Losses, Net of			Fair Value
		Cost			Credit Losses		Net of Allowance			Allowance
Corporate securities - Public securities	$	202,148	$	(51,430)	$	150,718	$	(23,736)	$	126,982
Corporate securities - Private placement securities			350,537			(1,615)			348,922			(22,957)			325,965
Residential mortgage backed securities			59,491			(1,221)			58,270			(501)			57,769
Commercial mortgage backed securities			250,545			(7,353)			243,192			(47,711)			195,481
Other asset backed securities			69,738			-			69,738			(8,780)			60,958
Collateralized loan obligations			74,805			-			74,805			(14,081)			60,724
	$	1,007,264	$	(61,619)	$	945,645	$	(117,766)	$	827,879

1. The watch list consists of all fixed maturity securities we have determined contain elevated credit risk, including those we have taken credit losses on.

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Fixed Maturity Securities by Sector

		September 30, 2020			December 31, 2019
		Amortized			Fair			Amortized			Fair
		Cost			Value			Cost			Value
Available for sale:
United States Government full faith and credit and sponsored agencies	$	1,060,685	$	1,113,717	$	763,164	$	786,785
United States municipalities, states and territories		3,265,276			3,805,086			4,147,343			4,527,671
Foreign government obligations		187,036			209,233			186,993			205,096
Corporate securities:
Capital goods		2,488,172			2,878,641			2,550,750			2,794,986
Consumer discretionary		6,091,509			7,064,666			6,082,974			6,658,120
Energy		2,654,458			2,774,360			2,499,030			2,677,646
Financials		6,543,633			7,381,859			6,737,325			7,323,150
Government non-guaranteed		539,175			626,339			539,639			606,308
Industrials		276,391			318,454			311,269			336,537
Information technology		1,741,574			2,043,842			1,868,131			2,051,175
Materials		1,719,670			1,959,090			1,818,048			1,961,033
Other		339,301			399,050			439,171			469,344
Telecommunications		1,488,146			1,728,726			1,510,836			1,664,350
Transportation		1,564,354			1,680,426			1,486,540			1,603,997
Utilities		3,920,669			4,601,837			3,978,459			4,390,193
Residential mortgage backed securities:
Government agency		571,424			656,909			591,100			646,787
Prime		847,250			867,660			793,357			815,916
Alt-A		84,538			98,504			93,281			112,961
Commercial mortgage backed securities:
Government agency		400,366			458,466			414,626			437,420
Non-agency		5,098,391			5,020,317			5,176,541			5,348,859
Other asset backed securities:
Auto		338,688			345,538			403,860			411,371
Energy		7,312			9,104			7,495			8,603
Financials		4,441			4,205			4,967			5,493
Industrials		142,356			139,366			167,466			171,273
Collateralized loan obligations		4,771,492			4,437,907			4,787,402			4,612,694
Military housing		466,333			549,996			471,621			539,029
Other		519,975			527,445			407,558			413,693
	$	47,132,615	$	51,700,743	$	48,238,946	$	51,580,490

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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Unaudited (Dollars in thousands)

Mortgage Loans on Real Estate

		September 30, 2020			December 31, 2019
		Principal			Percent			Principal			Percent
Geographic distribution: commercial mortgage loans
East	$	701,945			18.6 %	$	645,991			18.7 %
Middle Atlantic		284,211			7.5 %			284,597			8.2 %
Mountain		447,623			11.8 %			389,892			11.3 %
New England		24,921			0.6 %			9,152			0.3 %
Pacific		788,267			20.9 %			655,518			19.0 %
South Atlantic		781,906			20.7 %			751,199			21.7 %
West North Central		297,526			7.9 %			302,534			8.7 %
West South Central		451,918			12.0 %			420,031			12.1 %
	$	3,778,317			100.0 %	$	3,458,914			100.0 %
Property type distribution: commercial mortgage loans
Office	$	250,523			6.6 %	$	250,287			7.3 %
Medical Office		21,022			0.6 %			29,990			0.9 %
Retail		1,199,877			31.8 %			1,225,670			35.4 %
Industrial/Warehouse		959,819			25.4 %			896,558			25.9 %
Apartment		941,858			24.9 %			858,679			24.8 %
Agricultural		208,303			5.5 %			51,303			1.5 %
Mixed use/Other		196,915			5.2 %			146,427			4.2 %
	$	3,778,317			100.0 %	$	3,458,914			100.0 %
				September 30, 2020					December 31, 2019
		Commercial			Residential			Total			Total
Credit exposure - by payment activity
Performing	$	3,778,317	$	171,163	$	3,949,480	$	3,458,914
In workout		-			-			-			-
Delinquent		-			771			771			-
Collateral dependent		-			-			-			-
Principal outstanding		3,778,317			171,934			3,950,251			3,458,914
Unamortized discount		-			(2,838)			(2,838)
Deferred fees and costs, net		(1,827)			392			(1,435)			(942)
Amortized cost		3,776,490			169,488			3,945,978			3,457,972
Valuation allowance		(17,429)			(1,850)			(19,279)			(9,179)
Carrying value	$	3,759,061	$	167,638	$	3,926,699	$	3,448,793

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Shareholder Information

Corporate Offices:

American Equity Investment Life Holding Company

6000 Westown Parkway

West Des Moines, IA 50266

Inquiries:

Steven Schwartz, Vice President-Investor Relations [phone],[e-mail]

Common Stock and Dividend Information:

New York Stock Exchange symbol: "AEL"

	High		Low		Close		Dividend
				Declared
2020
First Quarter	$34.16	$9.07	$18.80	$0.00
Second Quarter	$27.09	$14.76	$24.71	$0.00
Third Quarter	$27.32	$19.06	$21.99	$0.00
2019
First Quarter	$33.57	$26.34	$27.02	$0.00
Second Quarter	$30.91	$25.84	$27.16	$0.00
Third Quarter	$27.80	$20.16	$24.20	$0.00
Fourth Quarter	$30.96	$21.75	$29.93	$0.30
2018
First Quarter	$35.79	$28.90	$29.36	$0.00
Second Quarter	$37.16	$27.06	$36.00	$0.00
Third Quarter	$38.57	$34.51	$35.36	$0.00
Fourth Quarter	$36.39	$25.27	$27.94	$0.28

Transfer Agent:

Computershare Trust Company, N.A.

P.O. Box 43010

Providence, RI 02940-0310

Phone: [phone]

Fax: [phone]

www.computershare.com

Annual Report and Other Information:

Shareholders may receive when available, without charge, a copy of American Equity's Annual Report, SEC filings and/or press releases by calling Steven Schwartz, Vice President-Investor Relations, at [phone] or by visiting our website at www.american-equity.com.

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Table of Contents

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

Financial Supplement - September 30, 2020

Research Analyst Coverage
Erik Bass	Bob Huang
Autonomous Research US LP	Morgan Stanley Research
[phone]	[phone]
[e-mail]	[e-mail]
Randy Binner	John Barnidge
B. Riley FBR, Inc.	Piper Sandler & Co.
[phone]	[phone]
[e-mail]	[e-mail]
Daniel Bergman	C. Gregory Peters
Citi Research	Raymond James & Associates, Inc.
[phone]	[phone]
[e-mail]	[e-mail]
Thomas Gallagher	Mark A. Dwelle
Evercore ISI	RBC Capital Markets, LLC
[phone]	[phone]
[e-mail]	[e-mail]
Pablo Singzon II	Mark Hughes
JP Morgan	SunTrust Robinson Humphrey
[phone]	[phone]
[e-mail]	[e-mail]

Ryan Krueger

Keefe, Bruyette & Woods

1. [e-mail]

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