Athene Holding Ltd. · NYSE:ATH/PA
Athene — Investor Presentation (March 2024)
22 slides from Athene's investor presentation, Mar 13, 2024
Slide 1: Athene Asset Portfolio Risk & Stress Considerations Update March 2024
Athene Asset Portfolio Risk & Stress Considerations Update March 2024
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any security of Athene Holding Ltd. (“AHL” or “Athene”). Unless the context requires otherwise, references in this presentation to “Apollo" and "AGM" refer to Apollo Global Management, Inc., to
Slide 3: The Industry Has Focused on Capital Return, Leaving Many Companies With Less Capital Flexibility
5% 9% 14% 22% 30% 37% 45% 52% 57% 66% 72% 77% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD 2023 3 The Industry Has Focused on Capital Return, Leaving Many Companies With Less Capital Flexibility U.S. and European Life Insurers Cumulative Capital Return as % of Current Market Capitaliza
Slide 4: Athene Has Spent Years Diligently Raising Capital to Improve Its Financial Strength
Note: Ratings represent financial strength ratings for primary insurance subsidiaries. 1. Calculated as the sum of total primary capital raised across Apollo retirement services platform entities via equity, preferred equity, debt, and third-party capital from 2010 through January 31, 2024. 4 Acquir
Slide 5: Athene capital and balance sheet metrics
5 Note: Athene metrics are net of the noncontrolling interests, as of December 31, 2023. 1. Relates to Athene’s primary insurance subsidiaries; represents ratings from AM Best "A", Fitch "A+", S&P "A+" and Moody’s "A1". 2. Represents the aggregate capital of Athene's US and Bermuda insurance entitie
Slide 6: Athene vs. AA-/A+ rated peers and industry
11.6% 9.3% 6 Note: Athene metrics are net of the noncontrolling interests. AA-/A+ Rated Companies are: PFG (A+), GL (AA-), MET (AA-), and PRU (AA-). 1. AA-/A+ Rated Company metrics as of September 30, 2023 per SNL Financial. 2. Refers to Athene adjusted debt-to-capital ratio as of December 31, 2023.
Slide 7: Rating agency commentary
“Risk-adjusted capitalization is at the strongest level, as measured by Best's Capital Adequacy Ratio. Strong historical growth in premiums and deposits across its retail, institutional reinsurance, and pension risk transfer markets. Stable liability profile with concentration in retirement products
Slide 8: Key Differentiators: High-Quality Private Credit, Structured Credit, Differentiated Alternatives
8 95% NAIC 1 & 2597% NAIC 1 & 21 Note: Athene net invested assets as of December 31, 2023. 1. As of December 31, 2023, 97% of $148 billion of available for sale securities designated NAIC 1 or 2. 2. Includes short-term investments, equity securities, policy loans and other investments. 3. Comprised
Slide 9: Athene Targets ~30-40 Basis Points of Incremental Yield Through Illiquidity and Complexity Premia
More Duration Riskier Assets Illiquidity & Structure • Buy assets with longer tenor than liabilities to take advantage of upward sloping yield curve • Buy assets farther out on the risk/reward spectrum (e.g. public equities) • Buy lower quality credit in pursuit of higher spreads • Capture illiquidi
Slide 10: Today, Investment Grade Structured Credit is Safer Credit Risk Than Equivalently Rated Corporate Debt
Today, Investment Grade Structured Credit is Safer Credit Risk Than Equivalently Rated Corporate Debt Athene continues to be a leader in transparency around its investment philosophy in structured credit, and published a Structured Credit Whitepaper in December 2022 Highlights key features of invest
Slide 11: Risk Management is Embedded in Everything We Do
11 Risk Management is Embedded in Everything We Do Manage Risk Such That Athene Can Grow Profitably Across Market Environments Robust risk management framework and procedures underpin focus on protecting capital and aligning risks with stakeholder expectations Risk strategy, investment, credit, asse
Slide 12: An Experienced Risk Team Manages a Robust Governance & Limit Framework
12 Disciplined risk appetite Experienced risk team Enterprise risk appetite is established using stress testing and is cascaded to the business through risk limits Maintaining excess capital and liquidity allows Athene to be positioned to take advantage of opportunities in times of market dislocatio
Slide 13: Robust, Multi-Layered Governance for Investment Risk
13 Apollo’s Portfolio Managers and Investment Committees Apollo Insurance Solutions Group Apollo’s Compliance and Allocation Committees Athene Risk Athene Investment & Asset / Liability Committee Athene Board Risk & Conflict Committees Rating Agencies, Regulators, and Clients Ensures investments are
Slide 14: Athene's stress framework and scenario definitions
14 Athene’s stress framework utilizes internally defined, integrated scenario stresses (shocks to credit, equity, rates) based on economic scenarios Defined scenarios based on severe economic stresses observed over multi-year periods Corporates Utilize Moody’s historical recession era bond default r
Slide 15: Stress scenario assumptions vs. historical recession data
15 Athene Assumptions Sample Historical Recession Data Baseline Recession Scenario Deep Recession Scenario Stagflation Scenario 1990 2001 2008 Euro 2016 COVID 20201 10 Yr US Treasury Yield Down 60% (e.g. ~233bps) Down 83% (e.g. ~322bps) Up 150bps2 Up 4% Down 21% Down 43% Down 84%3 Down 68% Absolute
Slide 16: Stress scenario losses by asset class
16 4Q’23 Portfolio Allocation Baseline Recession Scenario Deep Recession Scenario Stagflation Scenario Losses Impact ($B) Losses % of Net Invested Assets Losses Impact ($B) Losses % of Net Invested Assets Losses Impact ($B) Losses % of Net Invested Assets Corporate & Gov’t 42% ($0.3) (0.4%) ($0.7) (
Slide 17: Required capital impacts from stress and ratings downgrades
17 ($B) Baseline Recession and Stagflation Scenario Deep Recession Scenario Every Asset Downgraded One NRSRO Notch1 Corporate & Gov’t ($0.8) ($1.1) ($0.3) Structured Assets (CLO / ABS) ($0.8) ($1.3) ($0.2) Commercial Mortgages (CML / CMBS) ($0.1) ($0.3) ($0.1) Residential Mortgages (RML / RMBS) ($0.
Slide 18: Available Actions Allow for ~$14B of Liquidity and ~$10B of Capital Relief in Market Dislocations
Available Actions Allow for ~$14B of Liquidity and ~$10B of Capital Relief in Market Dislocations 18 ACTION ILLUSTRATIVE BENEFIT ($B) ACTIONABILITY CAPITAL MARKETS Utilize Federal Home Loan Bank (‘FHLB’) Facility ~$3.7 Draw Committed Repo ~$2.0 Draw Committed Liquidity Facility ~$3.11 Draw Revolver
Slide 19: Key Takeaways
3 ATHENE IS NOT A NEAR-TERM PROFIT MAXIMIZER Athene operates with greater excess capital, and lower financial leverage than similarly rated peers 2 5 INDUSTRY-LEADING RISK MANAGEMENT TEAM AND TRANSPARENCY Athene provides industry-leading disclosure around its balance sheet, investment, and risk mana
Slide 20: Non-GAAP Definitions
Non-GAAP Definitions In addition to our results presented in accordance with accounting principles generally accepted in the United States of America (US GAAP), we present certain financial information that includes non-GAAP measures. Management believes the use of these non-GAAP measures, together
Slide 21: Non-GAAP Measure Reconciliations: Debt-to-Capital Ratio
Non-GAAP Measure Reconciliations (In millions, except percentages) 21 RECONCILIATION OF DEBT-TO-CAPITAL RATIO TO ADJUSTED DEBT-TO-CAPITAL RATIO December 31, 2023 Total debt $ 4,209 Less: Adjustment to arrive at notional debt 209 Notional debt $ 4,000 Total debt $ 4,209 Total AHL stockholders' equity
Slide 22: Non-GAAP Measure Reconciliations: Net Invested Assets
Non-GAAP Measure Reconciliations (In millions) 22 RECONCILIATION OF TOTAL INVESTMENTS, INCLUDING RELATED PARTIES, TO NET INVESTED ASSETS December 31, 2023 Total investments, including related parties $ 238,941 Derivative assets (5,298) Cash and cash equivalents (including restricted cash) 14,781 Acc