Marc Rowan, the CEO of the investment company that controls Athene Holding, is not excited about the idea of Athene writing more multi-year guaranteed annuity contracts.
Higher interest rates helped push total U.S. MYGA sales to $40 billion in the first quarter, up 173% from the total for the first quarter of 2022.
Rowan, the head of Apollo Global Management, told securities analysts on Thursday that Athene, a big life and annuity insurer and reinsurer, is leaving tens of billions of dollars of MYGA business on the table because Apollo sees MYGAs as "transactional."
"'Transactional' does not mean bad," Rowan said. "It just means we elected to do other business versus transactional business."
What It Means
Anant Bhalla, the CEO of American Equity Investment Life, said in May that he thought that most annuity players were pricing their annuities rationally but that there were pockets of irrationality.
Rowan's comments show that other executives may also have concerns about some areas of the individual annuity market.
The Earnings
Apollo has had a large stake in Athene for years. It merged with Athene and took Athene private at the beginning of 2022.
Rowan spoke on a conference call Apollo held to go over second-quarter earnings.
The company reported $750 million in net income for the quarter on $14 billion in revenue, compared with a $2.6 billion net loss on $2.3 billion in revenue for the second quarter of 2022.
MYGAs
MYGAs are annuities that guarantee that the holders will get a fixed interest rate for a period longer than a year.
"MYGAs is our primary transactional business," Rowan said during the call. "Any time we want to add MYGAs, we can add MYGAs."
