Athene Holding Ltd. · NYSE:ATH/PA
Athene — Debt Investor Presentation (May 2023)
40 slides from Athene's debt investor presentation, May 18, 2023
Slide 1: Athene Fixed Income Investor Presentation May 2023
Athene Fixed Income Investor Presentation May 2023
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. (“Athene”). Unless the context requires otherwise, references in this presentation to “Apollo" and "AGM" refer to Apollo Global Management, Inc., together wi
Slide 3: Athene and AAM Are Consolidated Under AGM Following Merger in 2022
3 Athene and AAM Are Consolidated Under AGM Following Merger in 2022 As of March 31, 2023, unless otherwise noted. Please refer to page 37 of this presentation for the definition of Assets Under Management. 1. Represents the aggregate capital of Athene's US and Bermuda insurance entities, determined
Slide 4: Athene is a Leading Retirement Services Business
4 Athene is a Leading Retirement Services Business… 1. Industry rankings per Life Insurance Marketing and Research Association (LIMRA) as of December 31, 2022. 2. As of March 31, 2023. Provides attractive products that help make guaranteed retirement income affordable for Americans Stable, predictab
Slide 5: Which Has Diligently Built Diversified Organic Growth Capabilities
5 …Which Has Diligently Built Diversified Organic Growth Capabilities 1. LIMRA data for full year 2020, 2021, and 2022. 2. Credit Suisse data for full year 2021. Funding agreements are comprised of funding agreements issued under our FABN and FABR programs, funding agreements issued to the FHLB and
Slide 6: 2023 Is Off to a Tremendous Start
6 2023 Is Off to a Tremendous Start Note: Athene metrics are net of non-controlling interest in ACRA, as of March 31, 2023. 1. Represents the aggregate capital of Athene's US and Bermuda insurance entities, determined with respect to each insurance entity by applying the statutory accounting princip
Slide 7: Note: Athene metrics are net of non-controlling interest in ACRA, as of March 31,
7 Note: Athene metrics are net of non-controlling interest in ACRA, as of March 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 entiti
Slide 8: That Outperforms the Competition
11.1% 9.0% Athene AA-/A+ Rated Company Average 8 1. Athene metrics are net of non-controlling interest in ACRA, as of March 31, 2023. AA-/A+ Rated Companies metrics as of December 31, 2022 per SNL Financial. AA-/A+ Rated Companies are: PFG (A+), MET (AA-) GL (AA-), and PRU (AA-). 2. Refers to Athene
Slide 9: Strong Capital and Liquidity Profile
9 Strong Capital and Liquidity Profile 1. The consolidated risk-based capital ratio of our non-US reinsurance and US insurance subsidiaries is calculated by applying NAIC risk-based capital factors to the statutory financial statements on an aggregate basis, including interests in other non-insuranc
Slide 10: Rating agency commentary on Athene
“The A1 rating of Athene’s US and Bermuda-based life insurance companies reflects the company's strong market position in its core insurance products… Other strengths include very good capital levels, modest financial leverage, and strong interest coverage metrics, as well as solid profitability dri
Slide 11: Athene Utilizes Numerous Sources of Capital to Grow
11 Athene Utilizes Numerous Sources of Capital to Grow • Earnings generation o $2.5B of normalized spread related earnings (SRE) in 2022 o >20% earnings growth expected in 2023 on a normalized basis o $810mm of normalized spread related earnings (SRE) in 1Q’23 • Capital Release from Runoff o $1.5B i
Slide 12: Strategic Sidecar Supports Athene's Growth with On-Demand Equity Capital
12 Strategic Sidecar Supports Athene’s Growth with On-Demand Equity Capital Note: Past performance is not a guarantee of future results. Apollo/Athene Dedicated Investment Program (ADIP) CAPITAL DEPLOYED SINCE INCEPTION ~$3B Direct equity capital to support Athene’s growth Greater third-party partic
Slide 13: Total Capitalization Mix Highlights Disciplined Capital Management Strategy
13 Total Capitalization Mix Highlights Disciplined Capital Management Strategy 1. Includes both short-term and long-term debt, at notional. $8,823 $9,127 $9,445 $10,157 $11,232 $13,471 $14,803 $15,589 $16,653 $16,505 $839 $1,172 $1,755 $2,312 $2,312 $2,312 $2,667 $3,154 $3,154 $1,000 $1,000 $1,475 $
Slide 14: Capital Allocation Priorities
14 Capital Allocation Priorities Balance sheet strength determines the capital available to pursue profitable growth opportunities Support Profitable Growth Preserve excess capital at ‘AA’ levels with a mid-teens adjusted debt-to- capital ratio and strong liquidity Maintain Fortress Balance Sheet At
Slide 15: Consistent Investment Management Philosophy
15 Consistent Investment Management Philosophy Target higher and sustainable risk- adjusted returns by capturing illiquidity premia to drive consistent yield outperformance Focus on downside protection given long- dated liability profile and low cost of funding Dynamic asset allocation to take advan
Slide 16: High Quality Asset Portfolio Generates Safe Yield
High Quality Asset Portfolio Generates Safe Yield Note: Net invested assets includes Athene's proportionate share of ACRA investments, based on Athene's economic ownership, but does not include the proportionate share of investments associated with the noncontrolling interest. 1. As of March 31, 202
Slide 17: Athene Has a Well-Constructed Commercial Mortgage Loan Portfolio
Athene Has a Well-Constructed Commercial Mortgage Loan Portfolio Note: Data presented on a net invested assets basis, excluding Athene’s non-controlling interest in ACRA. 1. DSCR is calculated based on interest rate cap. 2. LTV figures based on original appraised values at close or most recent appra
Slide 18: Athene's CML Office Investments are 100% Debt
Class A CBD 75% Class B CBD 11% Suburban 11% Medical Office 3% Owner Occupied <1% Athene’s CML Office Investments are 100% Debt Note: Data presented net of Athene’s non-controlling interest in ACRA. 1. DSCR is calculated based on interest rate cap. 2. LTV figures based on original appraised values a
Slide 19: Persistent and Predictable Liability Portfolio Provides Long-Dated Funding
1% 47% 25% 4% 12% 11% Fixed Rate Annuities Pension Group Annuities Payout Annuities6 Fixed Indexed Annuities$185 BILLION 7 Persistent and Predictable Liability Portfolio Provides Long-Dated Funding 1. Calculation based on net reserve liabilities as of March 31, 2023. 2. Non-surrenderable liabilities
Slide 20: Risk Management is Embedded in Everything We Do
20 Robust risk management framework and procedures underpin focus on protecting capital and aligning risks with stakeholder expectations Risk strategy, investment, credit, asset-liability management (“ALM”) and liquidity risk policies, amongst others, at the board and management levels Stress testin
Slide 21: Athene is Committed to Transparency and Ongoing Disclosure
Athene Financial Supplement will continue to be published quarterly Athene Holding Ltd. (AHL) will continue to publish 10-K’s and 10-Q’s as a ’34 Act SEC filer Parent company, Apollo Global Management, Inc. (AGM) publishes 10-K’s and 10-Q’s as a ’34 Act SEC filer Statutory filings for main Athene op
Slide 22: Key Credit Highlights Indicate Winning Strategy Remains the Same
22 Key Credit Highlights Indicate Winning Strategy Remains the Same ASSET PORTFOLIO IS HIGH QUALITY AND GENERATES SAFE INVESTMENT GRADE YIELD Athene has consistently delivered strong net spread generation with lower credit losses versus peers 3 ATHENE HAS BUILT A FORTRESS BALANCE SHEET Highly-rated
Slide 23: Additional Perspectives on Retirement Services Industry
Additional Perspectives on Retirement Services Industry
Slide 24: Our Industry Has Amazing Potential to Serve a Growing Societal Need
Our Industry Has Amazing Potential to Serve a Growing Societal Need… 1. United Nations (here), World Bank (here). 2. Willis Towers Watson 2023 ‘Global Pensions Asset Study’. National pensions included are Australia, Canada, Japan, Netherlands, Switzerland, UK, and US. 3. Average 5-year CD from selec
Slide 25: and Has Been Unable to Attract Capital
… and Has Been Unable to Attract Capital Source: Barclays, SNL Financial, Apollo Analysts. 1. Includes target ADIP II fundraise Capital Raised in the Life Insurance Industry Since 2010 Across the US and Europe ($B) <$1B PUBLIC MARKETS PRIVATE CAPITAL Apollo has raised ~40% of all equity capital ADIP
Slide 26: The Industry Has Focused on Returning Its 'Hard' Capital to Shareholders
The Industry Has Focused on Returning Its ‘Hard’ Capital to Shareholders Source: Capital IQ as of April 2, 2023. Includes US insurers AEL, AIG, LNC, MET, PFG, PRU, and VOYA, and European insurers AXA, Generali, Allianz, Aviva, Swiss Life, Phoenix, L&G, NN, ASR, Ageas and Aegon. Over the past decade,
Slide 27: Increasingly Difficult to Organically Build Capital by Generating 'Safe Yield'
It Has Become Increasingly Difficult to Organically Build Capital by Generating ‘Safe Yield’ in the Public Fixed Income Markets Alone 1. Morningstar’s Active/Passive Barometer, year-end 2022 edition (here). Trailing periods ending 2022. Data shown for Intermediate Bond fund managers, which primarily
Slide 28: The Ability to Originate Assets is Now Table Stakes
The Ability to Originate Assets is Now Table Stakes Insurers Have Acquired Asset Managers Insurer Asset Manager But much of the industry is behind the curve 28
Slide 29: Industry Has Had to Rely on Asset Classes that Provide an Efficient Return Relative to Required Capital
So The Industry Has Had to Rely on Asset Classes that Provide an Efficient Return Relative to Required Capital but Not Necessarily Economic Risk Note: European asset charges assume a 5-year duration. 1. Abbreviation stands for “Simple Transparent, Standardized” ABS. 2. Southern European Sovereign ch
Slide 30: U.S. Insurers May Have Crowded into Commercial Real Estate Equity
U.S. Insurers May Have Crowded into Commercial Real Estate Equity Note: CRE equity includes affiliated and unaffiliated real estate from Schedule BA and Schedule A directly held real estate as reported on statutory filings, aggregated by SNL Financial. Metrics shown as a % of invested assets as of D
Slide 31: Capital Charges Should Reflect the Principle of 'Equal Capital for Equal Risk'
Capital Charges Should Reflect the Principle of ‘Equal Capital for Equal Risk’ 31 Capital charges should be applied consistently across all asset classes, and accurately reflect the economic risk of the underlying credits 1 Capital charges need to be based on evidence (history and stress testing) wi
Slide 32: Many Life Insurers Are Reliant on 'Soft' Capital
(24)% (22)% (17)% (15)% (15)% (15)% (14)% (14)% (13)% (9)% (8)% (8)% (7)% (6)% (5)% (5)% (4)% Insurer 1 Insurer 2 Insurer 3 Insurer 4 Insurer 5 Insurer 6 Insurer 7 Insurer 8 Insurer 9 Insurer 10 Insurer 11 Insurer 12 Insurer 13 Insurer 14 Insurer 15 Insurer 16 ATH Even with ‘Capital Efficient’ Asset
Slide 33: Diversification Into Higher Risk Liabilities Hurts the Risk Profile
5% 4% 29% 11% 2006 2007 2008 2009 Diversification Into Higher Risk Liabilities Hurts the Risk Profile 1. Living Benefit net amount at risk (NAR) as a percentage of living benefit account value. Calculated as median for Hartford, Manulife, Prudential, Jackson, Lincoln, AEGON, Brighthouse, AXA and Voy
Slide 34: Some U.S. Insurers May be Reliant on Wholesale Funding Sources
Some U.S. Insurers May be Reliant on Wholesale Funding Sources Note Data as of December 31, 2022. FHLB borrowing includes funding agreements issued to FHLB and advances from FHLB, as disclosed in 2022 10K’s. Expressed as a percentage of general account assets as reported in US regulatory fillings, e
Slide 35: Non-GAAP Measures & Definitions
Non-GAAP Measures & Definitions 35 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
Slide 36: Non-GAAP Measures & Definitions
Non-GAAP Measures & Definitions 36 Cost of Funds Cost of funds includes liability costs related to cost of crediting on both deferred annuities and institutional products as well as other liability costs, but does not include the proportionate share of the ACRA cost of funds associated with the nonc
Slide 37: Non-GAAP Measures & Definitions
Non-GAAP Measures & Definitions 37 Sales Sales statistics do not correspond to revenues under US GAAP but are used as relevant measures to understand our business performance as it relates to inflows generated during a specific period of time. Our sales statistics include inflows for fixed rate annu
Slide 38: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations 38 Total AHL shareholders’ equity $ 8,276 $ 12,365 $ 13,391 $ 14,711 $ 18,657 $ 20,006 $ 20,130 $ 13,973 $ 8,697 $ 5,133 $ 7,158 $ 8,698 Less: Preferred stock — 839 1,172 1,755 2,312 2,312 2,312 2,667 2,667 2,667 3,154 3,154 Total AHL common shareholder's equity 8,27
Slide 39: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations 39 Net income (loss) available to Athene Holding Ltd. common shareholder Preferred stock dividends Net income (loss) attributable to noncontrolling interests Net income (loss) Income tax expense (benefit) Income (loss) before income taxes Investment gains (losses), n
Slide 40: Non-GAAP Measure Reconciliations
Non-GAAP Measure Reconciliations 40 Total investments, including related parties Derivative assets Cash and cash equivalents (including restricted cash) Accrued investment income Net receivable (payable) for collateral on derivatives Reinsurance funds withheld and modified coinsurance VIE and VOE as
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