☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-37963
ATHENE HOLDING LTD.
(Exact name of registrant as specified in its charter)
Delaware
98-0630022
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification Number)
7700 Mills Civic Pkwy
West Des Moines, Iowa50266
1-(515) 342-4678
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Depositary Shares, each representing a 1/1,000th interest in a
6.35% Fixed-to-Floating Rate Perpetual Non-Cumulative Preferred Stock, Series A
ATHPrA
New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a
5.625% Fixed-Rate Perpetual Non-Cumulative Preferred Stock, Series B
ATHPrB
New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a
4.875% Fixed-Rate Perpetual Non-Cumulative Preferred Stock, Series D
ATHPrD
New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a
7.75% Fixed-Rate Reset Perpetual Non-Cumulative Preferred Stock, Series E
ATHPrE
New York Stock Exchange
7.250% Fixed-Rate Reset Junior Subordinated Debentures due 2064
ATHS
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☑
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of August 5, 2025, 203,805 shares of our common stock were outstanding, all of which are held by Apollo Global Management, Inc.
As used in this Quarterly Report on Form 10-Q (report), unless the context otherwise indicates, any reference to “Athene,” “our Company,” “the Company,” “us,” “we” and “our” refer to Athene Holding Ltd. together with its consolidated subsidiaries and any reference to “AHL” refers to Athene Holding Ltd. only.
Forward-Looking Statements
Certain statements in this report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “seek,” “assume,” “believe,” “may,” “will,” “should,” “could,” “would,” “likely” and other words and terms of similar meaning, including the negative of these or similar words and terms, in connection with any discussion of the timing or nature of future operating or financial performance or other events. However, not all forward-looking statements contain these identifying words. Forward-looking statements appear in a number of places throughout and give our current expectations and projections relating to our business, financial condition, results of operations, plans, strategies, objectives, future performance and other matters.
We caution you that forward-looking statements are not guarantees of future performance and that our actual consolidated financial condition, results of operations, liquidity, cash flows and performance may differ materially from that made in or suggested by the forward-looking statements contained in this report. A number of important factors could cause actual results or conditions to differ materially from those contained or implied by the forward-looking statements, including the risks discussed in Part II–Item 1A. Risk Factors included in this report and Part I–Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 Annual Report). Factors that could cause actual results or conditions to differ from those reflected in the forward-looking statements contained in this report include:
•the accuracy of management’s assumptions and estimates;
•variability in the amount of statutory capital that our insurance and reinsurance subsidiaries have or are required to hold;
•our potential need for additional capital in the future and the potential unavailability of such capital to us on favorable terms or at all;
•major public health issues, such as the pandemic caused by the effects of the spread of the Coronavirus Disease of 2019 (COVID-19);
•changes in relationships with important parties in our product distribution network;
•the activities of our competitors and our ability to grow our retail business in a highly competitive environment;
•the impact of general economic conditions on our ability to sell our products and on the fair value of our investments;
•our ability to successfully acquire new companies or businesses and/or integrate such acquisitions into our existing framework;
•downgrades, potential downgrades or other negative actions by rating agencies;
•our dependence on key executives and inability to attract qualified personnel;
•market and credit risks that could diminish the value of our investments;
•changes to the creditworthiness of our reinsurance and derivative counterparties;
•changes in consumer perception regarding the desirability of annuities as retirement savings products;
•potential litigation (including class action litigation), enforcement investigations or regulatory scrutiny against us and our subsidiaries, which we may be required to defend against or respond to;
•the impact of new accounting rules or changes to existing accounting rules on our business;
•interruption or other operational failures in telecommunication and information technology and other operating systems, including as a result of threat actors attempting to attack those systems, as well as our ability to maintain the security of those systems;
•the dependence of Apollo Global Management, Inc. and its subsidiaries (other than us or our subsidiaries, Apollo) on key executives and Apollo’s inability to attract qualified personnel;
•the accuracy of our estimates regarding the future performance of our investment portfolio;
•increased regulation or scrutiny of alternative investment advisers and certain trading methods;
•potential changes to laws or regulations affecting, among other things, group supervision and/or group capital requirements, entity-level regulatory capital standards, transactions with our affiliates, the ability of our subsidiaries to make dividend payments or distributions to AHL, acquisitions by or of us, minimum capitalization and statutory reserve requirements for insurance companies and fiduciary obligations on parties who distribute our products;
•the failure to obtain or maintain licenses and/or other regulatory approvals as required for the operation of our insurance subsidiaries;
•increases in our tax liability resulting from the implementation in various jurisdictions of measures to introduce the Organisation for Economic Cooperation and Development’s (OECD) “Pillar Two” global minimum tax initiative, or similar rules in other jurisdictions (including the recently enacted corporate income tax in Bermuda or otherwise);
•certain of our non-United States (US) subsidiaries becoming subject to US federal income taxation in amounts greater than expected;
•adverse changes in tax law;
•the failure to achieve the economic benefits expected to be derived from Athene Co-Invest Reinsurance Affiliate Holding Ltd. and Athene Co-Invest Reinsurance Affiliate Holding 2 Ltd. (together with their subsidiaries, ACRA), or future ACRA capital raises;
•the failure of third-party ACRA investors to fund their capital commitment obligations; and
•other risks and factors listed in Part II–Item 1A. Risk Factors included in this report, Part I—Item 1A. Risk Factors included in our 2024 Annual Report and those discussed elsewhere in this report and in our 2024 Annual Report.
We caution you that the important factors referenced above may not be exhaustive. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect or anticipate. 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). We undertake no obligation, except as may be required by law, to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.
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
AAIA
Athene Annuity and Life Company
AAM
Apollo Asset Management, Inc.
AARe
Athene Annuity Re Ltd., a Bermuda reinsurance subsidiary
ACRA
ACRA 1 and ACRA 2
ACRA 1
Athene Co-Invest Reinsurance Affiliate Holding Ltd., together with its subsidiaries
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.
BMA
Bermuda Monetary Authority
ISG
Apollo Insurance Solutions Group LP
Jackson
Jackson Financial, Inc., together with its subsidiaries
LIMRA
Life Insurance and Market Research Association
MidCap Financial
MidCap FinCo Designated Activity Company
NAIC
National Association of Insurance Commissioners
US Treasury
United States Department of the Treasury
Venerable
Venerable Holdings, Inc., together with its subsidiaries
Alternative investments, including investment funds and certain VIEs, adjusted for reinsurance impacts and to include our proportionate share of ACRA alternative investments based on our economic ownership.
Base of earnings
Earnings generated from our results of operations and the underlying profitability drivers of our business
Bermuda capital
The capital of Athene’s non-US reinsurance subsidiaries as reported in the Bermuda statutory financial statements and applying US statutory accounting principles for policyholder reserve liabilities which are subjected to US cash flow testing requirements, excluding certain items that do not exist under our applicable Bermuda requirements, such as interest maintenance reserves. There are certain Bermuda statutory accounting differences, primarily (1) marking to market of inception date investment gains or losses relating to reinsurance transactions and (2) admission of certain deferred tax assets, that may from time to time result in material differences from the calculation of statutory capital under US statutory accounting principles.
Bermuda RBC
The risk-based capital ratio of our non-US reinsurance subsidiaries calculated using Bermuda capital and applying NAIC risk-based capital factors on an aggregate basis, excluding US subsidiaries which are included within our US RBC Ratio.
Block reinsurance
A transaction in which the ceding company cedes all or a portion of a block of previously issued annuity contracts through a reinsurance agreement
BSCR
Bermuda Solvency Capital Requirement
CAL
Company action level risk-based capital as defined by the model created by the NAIC
CLO
Collateralized loan obligation
CMBS
Commercial mortgage-backed securities
CML
Commercial mortgage loan
Consolidated RBC
The consolidated risk-based capital ratio of our non-US reinsurance and US insurance subsidiaries calculated by aggregating US RBC and Bermuda RBC.
Cost of funds
Cost of funds includes liability costs related to cost of crediting on both deferred annuities, including, with respect to our fixed indexed annuities, option costs, and institutional costs related to institutional products, as well as other liability costs, but does not include the proportionate share of the ACRA cost of funds associated with the noncontrolling interests. Other liability costs include DAC, DSI and VOBA amortization, certain market risk benefit costs, the cost of liabilities on products other than deferred annuities and institutional products, premiums and certain product charges and other revenues. We include the costs related to business added through assumed reinsurance transactions and exclude the costs on business related to ceded reinsurance transactions. Cost of funds is computed as the total liability costs divided by the average net invested assets for the relevant period, presented on an annualized basis for interim periods.
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 condensed 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. Gross invested assets exclude the derivative collateral offsetting the related cash positions. We include the investments supporting assumed funds withheld and modco agreements and exclude the investments related to ceded reinsurance transactions in order to match the assets with the income received. Gross invested assets include the entire investment balance attributable to ACRA as ACRA is 100% consolidated.
IMO
Independent marketing organization
Liability outflows
The aggregate of withdrawals on our deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, repurchases and maturities of our funding agreements and block reinsurance outflows.
Market risk benefits
Guaranteed lifetime withdrawal benefits and guaranteed minimum death benefits
Represent the investments that directly back our net reserve liabilities, as well as surplus assets. Net invested assets include (a) total investments on the condensed 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. Net invested assets exclude the derivative collateral offsetting the related cash positions. We include the investments supporting assumed funds withheld and modco agreements and exclude the investments related to ceded reinsurance transactions in order to match the assets with the income received. Net invested assets include our economic ownership of ACRA investments but do not include the investments associated with the noncontrolling interests.
Net investment earned rate
Computed as the income from our net invested assets divided by the average net invested assets for the relevant period, presented on an annualized basis for interim periods. 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. Net investment earned rate includes the income and assets supporting our change in fair value of reinsurance assets by evaluating the underlying investments of the funds withheld at interest receivables and including the net investment income from those underlying investments which does not correspond to the US GAAP presentation of change in fair value of reinsurance assets. Net investment earned rate excludes the income and assets on business related to ceded reinsurance transactions.
Net investment spread
Net investment spread measures our investment performance plus our strategic capital management fees less our total cost of funds, presented on an annualized basis for interim periods.
Net reserve liabilities
Represent our policyholder liability obligations net of reinsurance and used to analyze the costs of our liabilities. Net reserve liabilities include (a) interest sensitive contract liabilities, (b) future policy benefits, (c) net market risk benefits, (d) long-term repurchase obligations, (e) dividends payable to policyholders and (f) other policy claims and benefits, offset by reinsurance recoverable, excluding policy loans ceded. Net reserve liabilities include our economic ownership of ACRA reserve liabilities but do not include the reserve liabilities associated with the noncontrolling interests. Net reserve liabilities are net of the ceded liabilities to third-party reinsurers as the costs of the liabilities are passed to such reinsurers and, therefore, we have no net economic exposure to such liabilities, assuming our reinsurance counterparties perform under our agreements. Net reserve liabilities include the underlying liabilities assumed through modco reinsurance agreements in order to match the liabilities with the expenses incurred.
Payout annuities
Annuities with a current cash payment component, which consist primarily of single premium immediate annuities, supplemental contracts and structured settlements
Policy loan
A loan to a policyholder under the terms of, and which is secured by, a policyholder’s policy
RBC
Risk-based capital
RILA
Registered index-linked annuity, which is an insurance contract similar to an FIA that has the potential for higher returns but also has the potential risk of loss to principal and related earnings, subject to a floor
RMBS
Residential mortgage-backed securities
RML
Residential mortgage loan
Sales
All money paid into an individual annuity, including money paid into new contracts with initial purchase occurring in the specified period and existing contracts with initial purchase occurring prior to the specified period (excluding internal transfers)
Spread Related Earnings, or SRE
Pre-tax non-GAAP measure used to evaluate our financial performance excluding market volatility (other than with respect to alternative investments), as well as integration, restructuring, stock compensation and certain other expenses which are not part of our underlying profitability drivers.
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
Available-for-sale securities, at fair value (amortized cost: 2025 – $199,637 and 2024 – $180,716; allowance for credit losses: 2025 – $760 and 2024 – $708)
$
188,750
$
165,364
Trading securities, at fair value
4,060
1,583
Equity securities, at fair value
1,150
1,290
Mortgage loans, at fair value
77,289
63,239
Investment funds
102
107
Policy loans
310
318
Funds withheld at interest (portion at fair value: 2025 – $(2,743) and 2024 – $(3,035))
16,998
18,866
Derivative assets
6,901
8,154
Short-term investments (portion at fair value: 2025 – $16 and 2024 – $255)
187
447
Other investments (portion at fair value: 2025 – $1,695 and 2024 – $1,606)
3,364
2,915
Total investments
299,111
262,283
Cash and cash equivalents
10,329
12,733
Restricted cash
1,720
943
Investments in related parties
Available-for-sale securities, at fair value (amortized cost: 2025 – $21,943 and 2024 – $19,531; allowance for credit losses: 2025 – $1 and 2024 – $1)
21,916
19,127
Trading securities, at fair value
399
573
Equity securities, at fair value
266
234
Mortgage loans, at fair value
1,275
1,297
Investment funds (portion at fair value: 2025 – $1,297 and 2024 – $1,139)
2,062
1,853
Funds withheld at interest (portion at fair value: 2025 – $(478) and 2024 – $(615))
4,590
5,050
Short-term investments
18
743
Other investments, at fair value
339
331
Accrued investment income (related party: 2025 – $181 and 2024 – $193)
3,176
2,816
Reinsurance recoverable (related party: 2025 – $5,269 and 2024 – $4,309; portion at fair value: 2025 – $1,780 and 2024 – $1,661)
9,273
8,194
Deferred acquisition costs, deferred sales inducements and value of business acquired
7,981
7,173
Goodwill
4,075
4,063
Other assets (related party: 2025 – $237 and 2024 – $203)
11,886
11,253
Assets of consolidated variable interest entities
Investments
Trading securities, at fair value (related party: 2025 – $899 and 2024 – $711)
3,265
2,301
Mortgage loans, at fair value (related party: 2025 – $441 and 2024 – $384)
2,544
2,579
Investment funds, at fair value (related party: 2025 – $19,057 and 2024 – $16,986)
19,348
17,765
Other investments (related party: 2025 – $94 and 2024 – $86; portion at fair value: 2025 – $383 and 2024 – $107)
1,204
884
Cash and cash equivalents (restricted cash: 2025 – $17 and 2024 – $10)
191
583
Other assets
341
565
Total assets
$
405,309
$
363,343
(Continued)
See accompanying notes to the unaudited condensed consolidated financial statements
Condensed Consolidated Statements of Income (Unaudited)
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Revenues
Premiums
$
107
$
673
$
234
$
774
Product charges
274
251
539
489
Net investment income (related party investment income of $562 and $423 for the three months ended and $1,005 and $813 for the six months ended June 30, 2025 and 2024, respectively; and related party investment expense of $383 and $304 for the three months ended and $754 and $593 for the six months ended June 30, 2025 and 2024, respectively)
4,429
3,509
8,420
6,801
Investment related gains (losses) (related party of $(21) and $(26) for the three months ended and $44 and $(66) for the six months ended June 30, 2025 and 2024, respectively)
(5)
(134)
(833)
1,543
Other revenues
6
3
10
5
Revenues of consolidated variable interest entities
Net investment income (related party of $19 and $7 for the three months ended and $34 and $18 for the six months ended June 30, 2025 and 2024, respectively)
80
56
157
133
Investment related gains (losses) (related party of $473 and $327 for the three months ended and $994 and $697 for the six months ended June 30, 2025 and 2024, respectively)
468
306
1,018
640
Total revenues
5,359
4,664
9,545
10,385
Benefits and expenses
Interest sensitive contract benefits (related party of $(61) and $(13) for the three months ended and $(94) and $8 for the six months ended June 30, 2025 and 2024, respectively)
3,428
1,824
4,922
4,708
Future policy and other policy benefits (related party of $5 and $7 for the three months ended and $10 and $14 for the six months ended June 30, 2025 and 2024, respectively; and remeasurement (gains) losses of $(19) and $(5) for the three months ended and $(60) and $7 for the six months ended June 30, 2025 and 2024, respectively)
527
1,095
1,068
1,638
Market risk benefits remeasurement (gains) losses (related party of $(3) and $(1) for the three months ended and $12 and $(15) for the six months ended June 30, 2025 and 2024, respectively)
(111)
(16)
274
(170)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired
292
227
559
434
Policy and other operating expenses (related party of $72 and $17 for the three months ended and $144 and $1 for the six months ended June 30, 2025 and 2024, respectively)
571
507
1,136
966
Total benefits and expenses
4,707
3,637
7,959
7,576
Income before income taxes
652
1,027
1,586
2,809
Income tax expense (benefit)
(34)
161
141
468
Net income
686
866
1,445
2,341
Less: Net income attributable to noncontrolling interests
222
237
516
520
Net income attributable to Athene Holding Ltd. stockholders
464
629
929
1,821
Less: Preferred stock dividends
45
46
90
91
Add: Preferred stock redemption
84
—
84
—
Net income available to Athene Holding Ltd. common stockholder
$
503
$
583
$
923
$
1,730
See accompanying notes to the unaudited condensed consolidated financial statements
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six months ended June 30,
(In millions)
2025
2024
Cash flows from financing activities
Deposits on investment-type policies and contracts
$
45,973
$
37,102
Withdrawals on investment-type policies and contracts (related party: 2025 – $(147) and 2024 – $(222))
(9,604)
(11,636)
Proceeds from debt
1,591
1,569
Capital contributions from parent
211
—
Capital contributions from noncontrolling interests
126
705
Capital contributions from noncontrolling interests of consolidated variable interest entities
819
1,250
Capital distributions to noncontrolling interests
(190)
(508)
Net change in cash collateral posted for derivative transactions and securities to repurchase
(4,392)
2,340
Preferred stock dividends
(90)
(91)
Common stock dividends
(375)
(374)
Redemption of preferred stock
(600)
—
Other financing activities, net
(122)
(288)
Net cash provided by financing activities
33,347
30,069
Effect of exchange rate changes on cash and cash equivalents
13
(2)
Net decrease in cash and cash equivalents
(2,019)
(225)
Cash and cash equivalents at beginning of year1
14,259
14,879
Cash and cash equivalents at end of period1
$
12,240
$
14,654
Supplementary information
Non-cash transactions
Deposits on investment-type policies and contracts through reinsurance agreements, net assumed (ceded) (related party: 2025 – $(875) and 2024 – $(2,120))
$
(851)
$
(2,086)
Withdrawals on investment-type policies and contracts through reinsurance agreements, net assumed (ceded) (related party: 2025 – $545 and 2024 – $900)
3,123
4,090
Investments received from settlements on related party reinsurance agreements
—
48
Investments received from pension group annuity premiums
—
521
1Includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.
(Concluded)
See accompanying notes to the unaudited condensed consolidated financial statements
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Business, Basis of Presentation and Significant Accounting Policies
Athene Holding Ltd. (AHL), together with its subsidiaries (collectively, Athene, we, our, us, or the Company), is a leading financial services company that specializes in issuing, reinsuring and acquiring retirement savings products in the United States (US) and internationally. We are a direct subsidiary of Apollo Global Management, Inc. (AGM, and together with its subsidiaries other than us or our subsidiaries, Apollo).
We conduct business primarily through the following consolidated subsidiaries:
•Our non-US reinsurance subsidiaries, to which AHL’s other insurance subsidiaries and third-party ceding companies directly and indirectly reinsure a portion of their liabilities, including Athene Life Re Ltd. (ALRe), Athene Annuity Re Ltd. (AARe) and Athene Life Re International Ltd. (ALReI); and
•Athene Annuity and Life Company (AAIA), our parent US insurance company, and its subsidiaries.
In addition, we consolidate certain variable interest entities (VIEs) for which we have determined we are the primary beneficiary. See Note 4 – Variable Interest Entities for further information on VIEs.
Consolidation and Basis of Presentation—We have prepared the accompanying condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information and the United States Securities and Exchange Commission’s rules and regulations for Form 10-Q and Article 10 of Regulation S-X. The accompanying condensed consolidated financial statements are unaudited and reflect all adjustments, consisting only of normal recurring items, considered necessary for fair statement of the results for the interim periods presented. Certain reclassifications have been made to conform with current year presentation. All intercompany accounts and transactions have been eliminated. Interim operating results are not necessarily indicative of the results expected for the entire year.
For entities that are consolidated, but not wholly owned, we allocate a portion of the income or loss and corresponding equity to the owners other than us. We include the aggregate of the income or loss and corresponding equity that is not owned by us in noncontrolling interests in the condensed consolidated financial statements.
The condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited financial statements, but does not include all of the information and footnotes required by US GAAP for complete financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.The preparation of financial statements requires the use of management estimates. Actual results may differ from estimates used in preparing the condensed consolidated financial statements.
Summary of Significant Accounting Policies
Income Taxes—Any difference between the tax provision (or benefit) allocated to us under the separate-return method and payments to be made to (or received from) AGM for tax expense is treated as either a dividend or a capital contribution.
In 2025, we executed a US and UK tax sharing agreement with AGM. As a result of this tax sharing agreement, AGM made a tax settlement payment to us for the usage of a portion of our tax attributes. We previously recorded deferred tax assets (DTA) for these tax attributes in our separate company financials. We have elected to distribute these hypothetical DTAs and no longer include them on our separate company balance sheet. We will continue to evaluate the likelihood of realizing the benefit of these hypothetical deferred tax assets and may record a valuation allowance for these hypothetical DTAs, if based on all available evidence, we determine that it is more likely than not that some portion of the tax benefit will not be realized on a separate company basis.
Recently Issued Accounting Pronouncements
Business Combinations and Consolidation – Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity(Accounting Standards Update (ASU) 2025-03)
This amendments in this update clarify the guidance in determining the accounting acquirer in a business combination involving a VIE. The amendments require that an entity apply the general guidance of identifying the Acquirer under ASC 805, Business Combination, even when the legal acquiree is a VIE and the transaction is primarily effected by exchanging equity interests. This guidance is effective for us for the 2027 annual and interim periods; early adoption is permitted. The amendments are required to be applied prospectively to any acquisition transaction that occurs after the initial application date. We are currently evaluating the impact of this guidance on our consolidated financial statements.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (ASU 2024-03)
The amendments in this update require disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The ASU requires tabular presentation of each relevant expense caption on the face of the income statement including employee compensation, depreciation, intangible asset amortization and certain other expenses, when applicable. The guidance is effective for us for the 2027 annual period and in interim periods in 2028; early adoption is permitted. We are currently evaluating the impact of this new guidance on our consolidated financial statements.
Income Taxes—Improvements to Income Tax Disclosures (Accounting Standards Update (ASU) 2023-09)
The amendments in this update revise certain disclosures on income taxes including rate reconciliation, income taxes paid, and certain amendments on disaggregation by federal, state and foreign taxes. The guidance is effective for us for annual periods beginning in 2025. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.
Adopted Accounting Pronouncements
Compensation – Stock Compensation (ASU 2024-01)
The amendments in this update clarify how an entity determines whether it is required to account for profits interest awards (and similar awards) in accordance with Accounting Standards Codification (ASC) 718 Compensation – Stock Compensation or other guidance. The ASU provides specific examples on when profits interest awards should be accounted for as a share-based payment arrangement under ASC 718 or in a manner similar to a cash bonus or profit-sharing arrangement under ASC 710 Compensation – General or other ASC topics. We adopted this guidance effective January 1, 2025. The adoption of this update was applied on a prospective basis and did not have a material effect on our consolidated financial statements.
Business Combinations – Joint Venture Formations (ASU 2023-05)
The amendments in this update address how a joint venture initially recognizes and measures contributions received at its formation date. The amendments require a joint venture to apply a new basis of accounting upon formation and to initially recognize its assets and liabilities at fair value. The guidance is effective prospectively for all joint ventures formed on or after January 1, 2025, while retrospective application may be elected for a joint venture formed before the effective date. The adoption of this update was applied on a prospective basis and did not have a material effect on our consolidated financial statements.
2. Investments
AFS Securities—Our AFS investment portfolio includes bonds, collateralized loan obligations (CLO), asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS) and redeemable preferred stock. Our AFS investment portfolio includes related party investments, primarily comprised of investments over which Apollo can exercise significant influence, which are presented as investments in related parties on the condensed consolidated balance sheets, and are separately disclosed below.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table represents the amortized cost, allowance for credit losses, gross unrealized gains and losses and fair value of our AFS investments by asset type:
Notes to Condensed Consolidated Financial Statements (Unaudited)
The amortized cost and fair value of AFS securities, including related parties, are shown by contractual maturity below:
June 30, 2025
(In millions)
Amortized Cost
Fair Value
AFS securities
Due in one year or less
$
2,385
$
2,355
Due after one year through five years
25,853
25,861
Due after five years through ten years
29,743
28,473
Due after ten years
59,061
49,489
CLO, ABS, CMBS and RMBS
82,595
82,572
Total AFS securities
199,637
188,750
AFS securities – related parties
Due after one year through five years
1,142
1,150
Due after five years through ten years
823
832
Due after ten years
591
587
CLO and ABS
19,387
19,347
Total AFS securities – related parties
21,943
21,916
Total AFS securities, including related parties
$
221,580
$
210,666
Actual maturities can differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Unrealized Losses on AFS Securities—The following summarizes the fair value and gross unrealized losses for AFS securities, including related parties, for which an allowance for credit losses has not been recorded, aggregated by asset type and length of time the fair value has remained below amortized cost:
Notes to Condensed Consolidated Financial Statements (Unaudited)
December 31, 2024
Less than 12 months
12 months or more
Total
(In millions)
Fair Value
Gross Unrealized Losses
Fair Value
Gross Unrealized Losses
Fair Value
Gross Unrealized Losses
AFS securities
US government and agencies
$
3,010
$
(114)
$
3,462
$
(1,156)
$
6,472
$
(1,270)
US state, municipal and political subdivisions
67
(3)
842
(243)
909
(246)
Foreign governments
830
(205)
738
(309)
1,568
(514)
Corporate
19,530
(673)
44,051
(10,997)
63,581
(11,670)
CLO
2,675
(48)
2,325
(215)
5,000
(263)
ABS
9,361
(155)
4,070
(309)
13,431
(464)
CMBS
1,868
(56)
1,773
(315)
3,641
(371)
RMBS
825
(13)
1,261
(157)
2,086
(170)
Total AFS securities
38,166
(1,267)
58,522
(13,701)
96,688
(14,968)
AFS securities – related parties
Corporate
499
(9)
446
(47)
945
(56)
CLO
586
(10)
544
(56)
1,130
(66)
ABS
2,533
(43)
3,355
(235)
5,888
(278)
Total AFS securities – related parties
3,618
(62)
4,345
(338)
7,963
(400)
Total AFS securities, including related parties
$
41,784
$
(1,329)
$
62,867
$
(14,039)
$
104,651
$
(15,368)
The following summarizes the number of AFS securities that were in an unrealized loss position, including related parties, for which an allowance for credit losses has not been recorded:
June 30, 2025
Unrealized loss position
Unrealized loss position 12 months or more
AFS securities
6,857
5,525
AFS securities – related parties
165
68
The unrealized losses on AFS securities can primarily be attributed to changes in market interest rates since the application of pushdown accounting or acquisition. We did not recognize the unrealized losses in income, unless as required for hedge accounting, as we intend to hold these securities and it is not more likely than not we will be required to sell a security before the recovery of its amortized cost.
Allowance for Credit Losses—The following table summarizes the activity in the allowance for credit losses for AFS securities by asset type:
Three months ended June 30, 2025
Additions
Reductions
(In millions)
Beginning balance
Initial credit losses
Securities sold during the period
Additions (reductions) to previously impaired securities
Notes to Condensed Consolidated Financial Statements (Unaudited)
Net Investment Income—Net investment income by asset class consists of the following:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
AFS securities
$
2,884
$
2,340
$
5,555
$
4,477
Trading securities
66
44
108
85
Equity securities
29
29
44
46
Mortgage loans
1,262
890
2,385
1,704
Investment funds
129
(17)
169
(6)
Funds withheld at interest
244
359
509
722
Other
229
191
461
403
Investment revenue
4,843
3,836
9,231
7,431
Investment expenses
(414)
(327)
(811)
(630)
Net investment income
$
4,429
$
3,509
$
8,420
$
6,801
Investment Related Gains (Losses)—Investment related gains (losses) by asset class consists of the following:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
AFS securities1
Gross realized gains on investment activity
$
1,522
$
125
$
2,233
$
192
Gross realized losses on investment activity
(143)
(218)
(378)
(565)
Net realized investment gains (losses) on AFS securities
1,379
(93)
1,855
(373)
Net recognized investment gains (losses) on trading securities
261
(33)
341
(98)
Net recognized investment gains (losses) on equity securities
36
(12)
51
27
Net recognized investment gains (losses) on mortgage loans
785
93
1,799
(265)
Derivative gains (losses)
(1,075)
(553)
(2,587)
878
Provision for credit losses
(56)
(90)
(64)
(100)
Other gains (losses)
(1,335)
554
(2,228)
1,474
Investment related gains (losses)
$
(5)
$
(134)
$
(833)
$
1,543
1Includes the effects of recognized gains or losses on AFS securities associated with designated hedges.
Proceeds from sales of AFS securities were $5,865 million and $7,048 million for the three months ended June 30, 2025 and 2024, respectively, and $14,810 million and $10,766 million for the six months ended June 30, 2025 and 2024, respectively.
The following table summarizes the change in unrealized gains (losses) on trading and equity securities we held as of the respective period end:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Trading securities
$
118
$
(21)
$
140
$
(41)
Equity securities
27
(8)
39
24
Repurchase Agreements—The following table summarizes the remaining contractual maturities of our repurchase agreements, which are included in payables for collateral on derivatives and securities to repurchase on the condensed consolidated balance sheets:
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table summarizes the securities pledged as collateral for repurchase agreements:
June 30, 2025
December 31, 2024
(In millions)
Amortized Cost
Fair Value
Amortized Cost
Fair Value
AFS securities
US government and agencies
$
711
$
514
$
3,253
$
2,693
Foreign governments
243
179
159
107
Corporate
2,113
1,894
1,877
1,573
CLO
585
588
587
588
ABS
598
561
596
552
RMBS
—
—
369
365
Total securities pledged under repurchase agreements
$
4,250
$
3,736
$
6,841
$
5,878
Reverse Repurchase Agreements—As of June 30, 2025 and December 31, 2024, amounts loaned under reverse repurchase agreements were $189 million and $935 million, respectively, and the fair value of the collateral, comprised primarily of asset-backed securities, was $1,034 million and $2,208 million, respectively.
Mortgage Loans, including related parties and consolidated VIEs—Mortgage loans include both commercial and residential loans. We have elected the fair value option on our mortgage loan portfolio. See Note 5 – Fair Value for further fair value option information. The following represents the mortgage loan portfolio, with fair value option loans presented at unpaid principal balance:
(In millions)
June 30, 2025
December 31, 2024
Commercial mortgage loans
$
37,482
$
32,544
Commercial mortgage loans under development
1,782
1,987
Total commercial mortgage loans
39,264
34,531
Mark to fair value
(1,997)
(2,099)
Commercial mortgage loans
37,267
32,432
Residential mortgage loans
43,445
35,223
Mark to fair value
396
(540)
Residential mortgage loans
43,841
34,683
Mortgage loans
$
81,108
$
67,115
We invest in commercial mortgage loans, primarily on income-producing properties including office and retail buildings, apartments, hotels, and industrial properties. We diversify the commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk. We evaluate mortgage loans based on relevant current information to confirm whether properties are performing at a consistent and acceptable level to secure the related debt.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The distribution of commercial mortgage loans, including those under development, by property type and geographic region, is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
Property type
Apartment
$
14,559
39.1
%
$
11,746
36.2
%
Industrial
7,849
21.0
%
6,793
21.0
%
Office building
4,217
11.3
%
4,162
12.8
%
Hotels
2,864
7.7
%
2,786
8.6
%
Retail
2,422
6.5
%
2,269
7.0
%
Other commercial
5,356
14.4
%
4,676
14.4
%
Total commercial mortgage loans
$
37,267
100.0
%
$
32,432
100.0
%
US region
East North Central
$
1,672
4.5
%
$
1,546
4.8
%
East South Central
430
1.2
%
438
1.3
%
Middle Atlantic
9,980
26.8
%
8,386
25.9
%
Mountain
1,544
4.2
%
1,322
4.1
%
New England
1,093
2.9
%
1,118
3.4
%
Pacific
6,386
17.1
%
5,768
17.8
%
South Atlantic
6,679
17.9
%
6,198
19.1
%
West North Central
308
0.8
%
221
0.7
%
West South Central
2,391
6.4
%
1,971
6.1
%
Total US region
30,483
81.8
%
26,968
83.2
%
International region
United Kingdom
2,988
8.0
%
2,281
7.0
%
Other international1
3,796
10.2
%
3,183
9.8
%
Total international region
6,784
18.2
%
5,464
16.8
%
Total commercial mortgage loans
$
37,267
100.0
%
$
32,432
100.0
%
1 Represents all other countries, with each individual country comprising less than 5% of the portfolio.
Our residential mortgage loan portfolio primarily consists of first lien residential mortgage loans collateralized by properties in various geographic locations and is summarized by proportion of the portfolio in the following table:
June 30, 2025
December 31, 2024
US States
California
25.9
%
25.6
%
Florida
12.0
%
12.4
%
Texas
7.4
%
7.4
%
Other1
46.5
%
45.5
%
Total US residential mortgage loan percentage
91.8
%
90.9
%
International1
8.2
%
9.1
%
Total residential mortgage loan percentage
100.0
%
100.0
%
1 Represents all other states or countries, with each individual state or country comprising less than 5% of the portfolio.
Investment Funds—Our investment fund portfolio strategy primarily focuses on core holdings of origination and retirement services platforms, equity and credit, and other funds. Origination platforms include investments sourced by 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. Retirement services platforms include investments in equity of financial services companies. Our credit strategy comprises direct origination, asset-backed, multi-credit and opportunistic credit funds focused on generating excess returns through high-quality credit underwriting and origination. Our equity strategy comprises private equity, hybrid value, secondaries equity, real estate equity, impact investing, infrastructure and clean transition equity funds that raise capital from investors to pursue control-oriented investments across the universe of private assets. Our investment funds can meet the definition of a VIE, which are discussed further in Note 4 – Variable Interest Entities. Our investment funds do not specify timing of distributions on the funds’ underlying assets.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following summarizes our investment funds, including related parties and consolidated VIEs:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Carrying value
Percentage of total
Carrying value
Percentage of total
Investment funds
Equity
$
102
0.5
%
$
107
0.5
%
Investment funds – related parties
Origination platforms
31
0.1
%
29
0.2
%
Retirement services platforms
1,492
6.9
%
1,317
6.7
%
Equity
218
1.0
%
244
1.2
%
Credit
314
1.5
%
253
1.3
%
Other
7
—
%
10
0.1
%
Total investment funds – related parties
2,062
9.5
%
1,853
9.5
%
Investment funds – consolidated VIEs
Origination platforms
7,536
35.1
%
6,347
32.2
%
Equity
7,383
34.3
%
7,702
39.0
%
Credit
3,735
17.4
%
3,062
15.5
%
Other
694
3.2
%
654
3.3
%
Total investment funds – consolidated VIEs
19,348
90.0
%
17,765
90.0
%
Total investment funds, including related parties and consolidated VIEs
$
21,512
100.0
%
$
19,725
100.0
%
Non-Consolidated Securities and Investment Funds
Fixed maturity securities – We invest in securitization entities as a debt holder or an investor in the residual interest of the securitization vehicle. These entities are deemed VIEs due to insufficient equity within the structure and lack of control by the equity investors over the activities that significantly impact the economics of the entity. In general, we are a debt investor within these entities and, as such, hold a variable interest; however, due to the debt holders’ lack of ability to control the decisions within the structure that significantly impact the entity, and the fact the debt holders are protected from losses due to the subordination of the equity tranche, the debt holders are not deemed the primary beneficiary. Securitization vehicles in which we hold the residual tranche are not consolidated because we do not unilaterally have substantive rights to remove the general partner, or when assessing related party interests, we are not under common control, as defined by US GAAP, with the related parties, nor are substantially all of the activities conducted on our behalf; therefore, we are not deemed the primary beneficiary. Debt investments and investments in the residual tranche of securitization entities are considered debt instruments and are held at fair value and classified as AFS or trading securities on the condensed consolidated balance sheets.
Investment funds – Investment funds include non-fixed income, alternative investments in the form of limited partnerships or similar legal structures.
Equity securities – We invest in preferred equity securities issued by entities deemed to be VIEs due to insufficient equity within the structure.
Our risk of loss associated with our non-consolidated investments depends on the investment. Investment funds, equity securities and trading securities are limited to the carrying value plus unfunded commitments. AFS securities are limited to amortized cost plus unfunded commitments.
The following summarizes the carrying value and maximum loss exposure of these non-consolidated investments:
June 30, 2025
December 31, 2024
(In millions)
Carrying Value
Maximum Loss Exposure
Carrying Value
Maximum Loss Exposure
Investment funds
$
102
$
745
$
107
$
987
Investment in related parties – investment funds
2,062
3,119
1,853
3,226
Assets of consolidated VIEs – investment funds
19,348
25,691
17,765
23,597
Investment in fixed maturity securities
83,063
83,542
72,523
74,797
Investment in related parties – fixed maturity securities
Notes to Condensed Consolidated Financial Statements (Unaudited)
Concentrations—The following table represents our investment concentrations in excess of 10% of AHL stockholders’ equity:
(In millions)
June 30, 2025
AP Grange Holdings, LLC1
$
4,773
Atlas Securitized Products Holdings LP (Atlas)2
3,732
Fox Hedge L.P.1
3,175
Investment-grade debt issued by Blackstone Private Credit Fund3
2,021
December 31, 2024
AP Grange Holdings, LLC1
$
4,661
Atlas2
3,172
Fox Hedge L.P.1
2,924
1 Investment-grade ABS.
2 See Note 11 – Related Parties for additional details on Atlas. Amounts are representative of single issuer risk and may only include a portion of the total investments associated with a related party.
3 Senior unsecured investment-grade debt issued by a non-exchange traded business development company.
3. Derivative Instruments
We use a variety of derivative instruments to manage risks, primarily equity, interest rate, foreign currency and market volatility. See Note 5 – Fair Value for information about the fair value hierarchy for derivatives.
The following table presents the notional amount and fair value of derivative instruments:
June 30, 2025
December 31, 2024
Notional Amount
Fair Value
Notional Amount
Fair Value
(In millions)
Assets
Liabilities
Assets
Liabilities
Derivatives designated as hedges
Foreign currency hedges
Swaps
20,404
$
623
$
964
15,669
$
938
$
211
Forwards
2,721
60
49
3,139
331
5
Interest rate swaps
4,382
102
247
4,506
—
654
Forwards on net investments
224
—
15
218
11
—
Interest rate swaps
29,423
142
41
24,885
55
138
Total derivatives designated as hedges
927
1,316
1,335
1,008
Derivatives not designated as hedges
Equity options
91,009
5,069
146
85,452
5,002
126
Futures
59
133
—
37
93
11
Foreign currency swaps
18,216
185
1,064
14,908
600
199
Interest rate swaps and forwards
3,249
63
252
3,255
67
124
Other swaps
2,066
12
—
2,644
3
5
Foreign currency forwards
39,990
512
2,111
39,598
1,054
2,083
Embedded derivatives
Funds withheld, including related parties
(3,221)
60
(3,650)
4
Interest sensitive contract liabilities
—
12,276
—
11,242
Total derivatives not designated as hedges
2,753
15,909
3,169
13,794
Total derivatives
$
3,680
$
17,225
$
4,504
$
14,802
Derivatives Designated as Hedges
Cash Flow Hedges–We use interest rate swaps to convert floating-rate interest payments to fixed-rate interest payments to reduce exposure to interest rate changes. The interest rate swaps will expire by May 2035. During the three months ended June 30, 2025 and 2024, we recognized gains of $76 million and $18 million, respectively, in other comprehensive income (OCI) associated with these hedges. During the six months ended June 30, 2025 and 2024, we recognized gains of $172 million and losses of $3 million, respectively, in OCI associated with these hedges. There were no amounts deemed ineffective during the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, no amounts were expected to be reclassified to income within the next 12 months.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Fair Value Hedges – We use foreign currency forward contracts, foreign currency swaps, foreign currency interest rate swaps and interest rate swaps that are designated and accounted for as fair value hedges to hedge certain exposures to foreign currency risk and interest rate risk. The foreign currency forward price is agreed upon at the time of the contract and payment is made at a specified future date. The amortized cost of AFS debt securities in qualifying fair value hedges of foreign currency risk was $17,818 million and $16,307 million as of June 30, 2025 and December 31, 2024, respectively. The carrying value of interest sensitive contract liabilities in qualifying fair value hedges of foreign currency swaps was $6,012 million and $2,426 million as of June 30, 2025 and December 31, 2024, respectively.
The following represents the carrying amount and the cumulative fair value of hedging adjustments of hedged liabilities, excluding those solely hedging foreign currency risk:
June 30, 2025
December 31, 2024
(In millions)
Carrying amount of the hedged liabilities
Cumulative amount of fair value hedging gains (losses)1
Carrying amount of the hedged liabilities
Cumulative amount of fair value hedging gains (losses)
Interest sensitive contract liabilities
Foreign currency interest rate swaps
$
4,315
$
85
$
3,946
$
488
Interest rate swaps
17,327
(34)
17,873
130
1 Excludes gains (losses) related to foreign currency risk.
The following is a summary of the gains (losses) related to the derivatives and related hedged items in fair value hedge relationships:
Amounts excluded
(In millions)
Derivatives
Hedged items
Net
Recognized in income through amortization approach
Recognized in income through changes in fair value
Notes to Condensed Consolidated Financial Statements (Unaudited)
Amounts excluded
(In millions)
Derivatives
Hedged items
Net
Recognized in income through amortization approach
Recognized in income through changes in fair value
Six months ended June 30, 2025
Investment related gains (losses)
Foreign currency forwards
$
(350)
$
332
$
(18)
$
19
$
—
Foreign currency swaps
(1,013)
1,058
45
—
—
Foreign currency interest rate swaps
481
(464)
17
—
—
Interest rate swaps
194
(174)
20
—
—
Interest sensitive contract benefits
Foreign currency interest rate swaps
48
(47)
1
—
—
Six months ended June 30, 2024
Investment related gains (losses)
Foreign currency forwards
$
179
$
(183)
$
(4)
$
31
$
6
Foreign currency swaps
155
(138)
17
—
—
Foreign currency interest rate swaps
(123)
123
—
—
—
Interest rate swaps
(115)
76
(39)
—
—
Interest sensitive contract benefits
Foreign currency interest rate swaps
40
(39)
1
—
—
The following is a summary of the gains (losses) excluded from the assessment of hedge effectiveness that were recognized in OCI:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Foreign currency forwards
$
3
$
2
$
29
$
(15)
Foreign currency swaps
(87)
64
20
26
Net Investment Hedges – We use foreign currency forwards to hedge the foreign currency exchange rate risk of our investments in subsidiaries that have a reporting currency other than the US dollar. We assess hedge effectiveness based on the changes in forward rates. During the three months ended June 30, 2025 and 2024, these derivatives had losses of $14 million and $0 million, respectively. During the six months ended June 30, 2025 and 2024, these derivatives had losses of $22 million and gains of $3 million, respectively. These derivatives are included in foreign currency translation and other adjustments on the condensed consolidated statements of comprehensive income (loss). As of June 30, 2025 and December 31, 2024, the cumulative foreign currency translations recorded in AOCI related to these net investment hedges were gains of $7 million and $29 million, respectively. During the three and six months ended June 30, 2025 and 2024, there were no amounts deemed ineffective.
Derivatives Not Designated as Hedges
Equity options – We use equity indexed options to economically hedge fixed indexed annuity products that guarantee the return of principal to the policyholder and credit interest based on a percentage of the gain in a specified market index, including the S&P 500 and other bespoke indices. To hedge against adverse changes in equity indices, we enter into contracts to buy equity indexed options. The contracts are net settled in cash based on differentials in the indices at the time of exercise and the strike price.
Futures –Futures contracts are purchased to hedge the growth in interest credited to the customer as a direct result of increases in the related indices. We enter into exchange-traded futures with regulated futures commission clearing brokers who are members of a trading exchange. Under exchange-traded futures contracts, we agree to purchase a specified number of contracts with other parties and to post variation margin on a daily basis in an amount equal to the difference in the daily fair values of those contracts.
Interest rate swaps and forwards – We use interest rate swaps and forwards to reduce market risks from interest rate changes and to alter interest rate exposure arising from duration mismatches between assets and liabilities. With an interest rate swap, we agree with another party to exchange the difference between fixed-rate and floating-rate interest amounts tied to an agreed-upon notional principal amount at specified intervals.
Other swaps – Other swaps include total return swaps, credit default swaps and swaptions. We purchase total rate of return swaps to gain exposure and benefit from a reference asset or index without ownership. Credit default swaps provide a measure of protection against the default of an issuer or allow us to gain credit exposure to an issuer or traded index. We use credit default swaps coupled with a bond to synthetically create the characteristics of a reference bond. Swaptions provide an option to enter into an interest rate swap and are used to hedge against interest rate exposure.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Embedded derivatives – We have embedded derivatives which are required to be separated from their host contracts and reported as derivatives. Host contracts include reinsurance agreements structured on a modco or funds withheld basis and indexed annuity products.
The following is a summary of the gains (losses) related to derivatives not designated as hedges:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Equity options
$
871
$
105
$
(65)
$
1,702
Futures
(9)
(1)
(16)
126
Interest rate swaps and forwards and other swaps
(1,079)
(69)
(1,425)
(30)
Foreign currency forwards
(401)
(556)
(611)
(866)
Embedded derivatives on funds withheld
41
(112)
199
(187)
Amounts recognized in investment related gains (losses)
(577)
(633)
(1,918)
745
Embedded derivatives in indexed annuity products1
(887)
182
116
(995)
Total gains (losses) on derivatives not designated as hedges
$
(1,464)
$
(451)
$
(1,802)
$
(250)
1Included in interest sensitive contract benefits on the condensed consolidated statements of income.
Credit Risk—We may be exposed to credit-related losses in the event of counterparty nonperformance on derivative financial instruments. Generally, the current credit exposure of our derivative contracts is the fair value at the reporting date less any collateral received from the counterparty.
We manage credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties. Where possible, we maintain collateral arrangements and use master netting agreements that provide for a single net payment from one counterparty to another at each due date and upon termination. We have also established counterparty exposure limits, where possible, in order to evaluate if there is sufficient collateral to support the net exposure.
Collateral arrangements typically require the posting of collateral in connection with its derivative instruments. Collateral agreements often contain posting thresholds, some of which may vary depending on the posting party’s financial strength ratings. Additionally, a decrease in our financial strength rating to a specified level can result in settlement of the derivative position.
The estimated fair value of our net derivative and other financial assets and liabilities after the application of master netting agreements and collateral were as follows:
Gross amounts not offset on the condensed consolidated balance sheets
(In millions)
Gross amount recognized1
Financial instruments2
Collateral (received)/pledged
Net amount
Off-balance sheet securities collateral3
Net amount after securities collateral
June 30, 2025
Derivative assets
$
6,901
$
(2,496)
$
(3,685)
$
720
$
(536)
$
184
Derivative liabilities
(4,889)
2,496
2,041
(352)
209
(143)
December 31, 2024
Derivative assets
$
8,154
$
(2,209)
$
(5,922)
$
23
$
—
$
23
Derivative liabilities
(3,556)
2,209
1,333
(14)
2
(12)
1 The gross amounts of recognized derivative assets and derivative liabilities are reported on the condensed consolidated balance sheets. As of June 30, 2025 and December 31, 2024, amounts not subject to master netting or similar agreements were immaterial.
2 Represents amounts offsetting derivative assets and derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets or gross derivative liabilities for presentation on the condensed consolidated balance sheets.
3 For non-cash collateral received, we do not recognize the collateral on our balance sheet unless the obligor (transferor) has defaulted under the terms of the secured contract and is no longer entitled to redeem the pledged asset. Amounts do not include any excess of collateral pledged or received.
4. Variable Interest Entities
We determined that we are required to consolidate certain Apollo-managed investment funds and other Apollo-managed structures. Since the criteria for the primary beneficiary are satisfied by our related party group, we are deemed the primary beneficiary. In addition, we consolidate certain securitization entities where we are deemed the primary beneficiary. No arrangement exists requiring us to provide additional funding in excess of our committed capital investment, liquidity, or the funding of losses or an increase to our loss exposure in excess of our investment in any of the consolidated VIEs.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following summarizes the income statement activity of the consolidated VIEs:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Trading securities
$
54
$
30
$
101
$
65
Mortgage loans
38
31
81
61
Investment funds
20
—
21
21
Other
(32)
(5)
(46)
(14)
Net investment income
$
80
$
56
$
157
$
133
Net recognized investment gains (losses) on trading securities
$
4
$
(8)
$
6
$
(8)
Net recognized investment gains (losses) on mortgage loans
(13)
(2)
7
(28)
Net recognized investment gains on investment funds
461
321
988
685
Other gains (losses)
16
(5)
17
(9)
Investment related gains (losses)
$
468
$
306
$
1,018
$
640
5. Fair Value
Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. We determine fair value based on the following fair value hierarchy:
Level 1 – Unadjusted quoted prices for identical assets or liabilities in an active market.
Level 2 – Quoted prices for inactive markets or valuation techniques that require observable direct or indirect inputs for substantially the full term of the asset or liability. Level 2 inputs include the following:
•Quoted prices for similar assets or liabilities in active markets,
•Observable inputs other than quoted market prices, and
•Observable inputs derived principally from market data through correlation or other means.
Level 3 – Prices or valuation techniques with unobservable inputs significant to the overall fair value estimate. These valuations use critical assumptions not readily available to market participants. Level 3 valuations are based on market standard valuation methodologies, including discounted cash flows, matrix pricing or other similar techniques.
Net Asset Value (NAV) – Investment funds are typically measured using NAV as a practical expedient in determining fair value and are not classified in the fair value hierarchy. Our carrying value reflects our pro rata ownership percentage as indicated by NAV in the investment fund financial statements, which we may adjust if we determine NAV is not calculated consistent with investment company fair value principles. The underlying investments of the investment funds may have significant unobservable inputs, which may include but are not limited to, comparable multiples and weighted average cost of capital rates applied in valuation models or a discounted cash flow model.
The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the instrument’s fair value measurement.
We use a number of valuation sources to determine fair values. Valuation sources can include quoted market prices; third-party commercial pricing services; third-party brokers; industry-standard, vendor modeling software that uses market observable inputs; and other internal modeling techniques based on projected cash flows. We periodically review the assumptions and inputs of third-party commercial pricing services through internal valuation price variance reviews, comparisons to internal pricing models, back testing to recent trades, or monitoring trading volumes.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Fair Value Valuation Methods—We used the following valuation methods and assumptions to estimate fair value:
AFS and trading securities –We obtain the fair value for most marketable securities without an active market from several commercial pricing services. These are classified as Level 2 assets. The pricing services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, trading activity, credit quality, issuer spreads, bids, offers and other reference data. This category typically includes US and non-US corporate bonds, US agency and government guaranteed securities, CLO, ABS, CMBS and RMBS.
We also have fixed maturity securities priced based on indicative broker quotes or by employing market accepted valuation models. For certain fixed maturity securities, the valuation model uses significant unobservable inputs and these are included in Level 3 in our fair value hierarchy. Significant unobservable inputs used include: discount rates, issue-specific credit adjustments, material non-public financial information, estimation of future earnings and cash flows, default rate assumptions, liquidity assumptions and indicative quotes from market makers.
We value privately placed fixed maturity securities based on the credit quality and duration of comparable marketable securities, which may be securities of another issuer with similar characteristics. In some instances, we use a matrix-based pricing model. These models consider the current level of risk-free interest rates, corporate spreads, credit quality of the issuer and cash flow characteristics of the security. We also consider additional factors such as net worth of the borrower, value of collateral, capital structure of the borrower, presence of guarantees and our evaluation of the borrower’s ability to compete in its relevant market. Privately placed fixed maturity securities are classified as Level 2 or 3.
Equity securities–Fair values of publicly traded equity securities are based on quoted market prices and classified as Level 1. Other equity securities, typically private equities or equity securities not traded on an exchange, we value based on other sources, such as commercial pricing services or brokers, and are classified as Level 2 or 3.
Mortgage loans – We estimate fair value on a monthly basis using discounted cash flow analysis and rates being offered for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. The discounted cash flow model uses unobservable inputs, including estimates of discount rates and loan prepayments. Mortgage loans are classified as Level 3.
Investment funds – Certain investment funds for which we elected the fair value option are included in Level 3 and are priced based on market accepted valuation models. The valuation models use significant unobservable inputs, which include material non-public financial information, estimation of future distributable earnings and demographic assumptions.
Other investments – The fair values of other investments are primarily determined using a discounted cash flow model using discount rates for similar investments.
Funds withheld at interest embedded derivatives – Funds withheld at interest embedded derivatives represent the right to receive or obligation to pay the total return on the assets supporting the funds withheld at interest or funds withheld liability, respectively, and are analogous to a total return swap with a floating rate leg. The fair value of embedded derivatives on funds withheld and modco agreements is measured as the unrealized gain (loss) on the underlying assets and classified as Level 3.
Derivatives –Derivative contracts can be exchange-traded or over-the-counter. Exchange-traded derivatives typically fall within Level 1 of the fair value hierarchy depending on trading activity. Over-the-counter derivatives are valued using valuation models or an income approach using third-party broker valuations. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit curves, measures of volatility, prepayment rates and correlation of the inputs. We consider and incorporate counterparty credit risk in the valuation process through counterparty credit rating requirements and monitoring of overall exposure. We also evaluate and include our own nonperformance risk in valuing derivatives. The majority of our derivatives trade in liquid markets; therefore, we can verify model inputs and model selection does not involve significant management judgment. These are typically classified within Level 2 of the fair value hierarchy.
Cash and cash equivalents, including restricted cash – The carrying amount for cash equals fair value. We estimate the fair value for cash equivalents based on quoted market prices. These assets are classified as Level 1.
Other assets and market risk benefits liability – Other assets at fair value consist of market risk benefit assets. See Note 7 – Long-duration Contracts for additional information on market risk benefits valuation methodology and additional fair value disclosures. Market risk benefits are classified as Level 3.
Interest sensitive contract liabilities embedded derivatives– Embedded derivatives related to interest sensitive contract liabilities with fixed indexed annuity products are classified as Level 3. The valuations include significant unobservable inputs associated with economic assumptions and actuarial assumptions for policyholder behavior.
AmerUs Closed Block– We elected the fair value option for the future policy benefits liability in the AmerUs Closed Block. Our valuation technique is to set the fair value of policyholder liabilities equal to the fair value of assets. There is an additional component which captures the fair value of the open block’s obligations to the closed block business. This component is the present value of the projected release of required capital and future earnings before income taxes on required capital supporting the AmerUs Closed Block, discounted at a rate which represents a market participant’s required rate of return, less the initial required capital. Unobservable inputs include estimates for these items. The AmerUs Closed Block policyholder liabilities and any corresponding reinsurance recoverable are classified as Level 3.
Notes to Condensed Consolidated Financial Statements (Unaudited)
ILICO Closed Block – We elected the fair value option for the ILICO Closed Block. Our valuation technique is to set the fair value of policyholder liabilities equal to the fair value of assets. There is an additional component which captures the fair value of the open block’s obligations to the closed block business. This component uses the present value of future cash flows which include commissions, administrative expenses, reinsurance premiums and benefits, and an explicit cost of capital. The discount rate includes a margin to reflect the business and nonperformance risk. Unobservable inputs include estimates for these items. The ILICO Closed Block policyholder liabilities and corresponding reinsurance recoverable are classified as Level 3.
Universal life liabilities and other life benefits– We elected the fair value option for certain blocks of universal and other life business ceded to Global Atlantic. We use a present value of liability cash flows. Unobservable inputs include estimates of mortality, persistency, expenses, premium payments and a risk margin used in the discount rates that reflect the riskiness of the business. These universal life policyholder liabilities and corresponding reinsurance recoverable are classified as Level 3.
Other liabilities – Other liabilities include funds withheld liability embedded derivatives, as described above in funds withheld at interest embedded derivatives, and a ceded modco agreement of certain inforce funding agreement contracts for which we elected the fair value option. We estimate the fair value of the ceded modco agreement by discounting projected cash flows for net settlements and certain periodic and non-periodic payments. Unobservable inputs include estimates for asset portfolio returns and economic inputs used in the discount rate, including risk margin. Depending on the projected cash flows and other assumptions, the contract may be recorded as an asset or liability. The estimate is classified as Level 3.
Fair Value Option—The following represents the gains (losses) recorded for instruments for which we have elected the fair value option, including related parties and consolidated VIEs:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Trading securities
$
261
$
(40)
$
336
$
(100)
Mortgage loans
892
82
1,933
(318)
Investment funds
120
5
203
(19)
Future policy benefits
10
31
5
58
Other
(29)
(11)
(17)
4
Total gains (losses)
$
1,254
$
67
$
2,460
$
(375)
Gains and losses on trading securities, mortgage loans, investments of consolidated VIEs, and other are recorded in investment related gains (losses) on the condensed consolidated statements of income. Gains and losses related to investment funds are recorded in net investment income on the condensed consolidated statements of income. We record the change in fair value of future policy benefits in future policy and other policy benefits on the condensed consolidated statements of income.
The following summarizes information for fair value option mortgage loans, including related parties and consolidated VIEs:
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following represents our commercial mortgage loan portfolio 90 days or more past due and/or in non-accrual status:
(In millions)
June 30, 2025
December 31, 2024
Unpaid principal balance of commercial mortgage loans 90 days or more past due and/or in non-accrual status
$
614
$
195
Mark to fair value of commercial mortgage loans 90 days or more past due and/or in non-accrual status
(257)
(102)
Fair value of commercial mortgage loans 90 days or more past due and/or in non-accrual status
$
357
$
93
Fair value of commercial mortgage loans 90 days or more past due
$
108
$
31
Fair value of commercial mortgage loans in non-accrual status
357
93
The following represents our residential mortgage loan portfolio 90 days or more past due and/or in non-accrual status:
(In millions)
June 30, 2025
December 31, 2024
Unpaid principal balance of residential mortgage loans 90 days or more past due and/or in non-accrual status
$
743
$
898
Mark to fair value of residential mortgage loans 90 days or more past due and/or in non-accrual status
(69)
(51)
Fair value of residential mortgage loans 90 days or more past due and/or in non-accrual status
$
674
$
847
Fair value of residential mortgage loans 90 days or more past due1
$
674
$
847
Fair value of residential mortgage loans in non-accrual status
611
765
1As of June 30, 2025 and December 31, 2024 includes $63 million and $82 million, respectively, of residential mortgage loans that are guaranteed by US government-sponsored agencies.
The following is the estimated amount of gains (losses) included in earnings during the period attributable to changes in instrument-specific credit risk on our mortgage loan portfolio:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Mortgage loans
$
(20)
$
3
$
(23)
$
(30)
We estimated the portion of gains and losses attributable to changes in instrument-specific credit risk by identifying commercial mortgage loans with loan-to-value ratios meeting credit quality criteria, and residential mortgage loans with delinquency status meeting credit quality criteria.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Level 3 Financial Instruments—The following are reconciliations for Level 3 assets and liabilities measured at fair value on a recurring basis. Transfers in and out of Level 3 are primarily based on changes in the availability of pricing sources, as described in the valuation methods above.
Significant Unobservable Inputs—Significant unobservable inputs occur when we cannot obtain or corroborate the quantitative detail of the inputs. This applies to fixed maturity securities, equity securities, mortgage loans and certain investment funds, as well as embedded derivatives in liabilities. Additional significant unobservable inputs are described below.
AFS, trading and equity securities – We usediscounted cash flow models to calculate the fair value for certain fixed maturity and equity securities. The discount rate is a significant unobservable input because the credit spread includes adjustments made to the base rate. The base rate represents a market comparable rate for securities with similar characteristics. This excludes assets for which fair value is provided by independent broker quotes, but includes assets for which fair value is provided by affiliated quotes.
Mortgage loans – We use discounted cash flow models from independent commercial pricing services to calculate the fair value of our mortgage loan portfolio. The discount rate is a significant unobservable input. This approach uses market transaction information and client portfolio-oriented information, such as prepayments or defaults, to support the valuations.
Investment funds – We use various methods of valuing our investment funds from both independent pricing services and affiliated modeling.
Interest sensitive contract liabilities – embedded derivative – Significant unobservable inputs we use in the fixed indexed annuities embedded derivative of the interest sensitive contract liabilities valuation include:
1.Nonperformance risk – For contracts we issue, we use the credit spread, relative to the US Department of the Treasury (US Treasury) curve based on our public credit rating as of the valuation date. This represents our credit risk used in the fair value estimate of embedded derivatives.
2.Option budget – We assume future hedge costs in the derivative’s fair value estimate. The level of option budgets determines the future costs of the options and impacts future policyholder account value growth.
3.Policyholder behavior – We regularly review the full withdrawal (surrender rate) assumptions. These are based on our initial pricing assumptions updated for actual experience. Actual experience may be limited for recently issued products.
1 The discount rate weighted average is calculated based on the relative fair values of the investments.
2The nonperformance risk weighted average is based on the projected cash flows attributable to the embedded derivative.
3 The option budget and surrender rate weighted averages are calculated based on projected account values.
Fair Value of Financial Instruments Not Carried at Fair Value—The following represents our financial instruments not carried at fair value on the condensed consolidated balance sheets:
June 30, 2025
(In millions)
Carrying Value
Fair Value
NAV
Level 1
Level 2
Level 3
Financial assets
Investment funds
$
102
$
102
$
102
$
—
$
—
$
—
Policy loans
310
310
—
—
310
—
Funds withheld at interest
19,741
19,741
—
—
—
19,741
Short-term investments
171
171
—
—
—
171
Other investments
225
58
—
—
—
58
Investments in related parties
Investment funds
765
765
765
—
—
—
Funds withheld at interest
5,068
5,068
—
—
—
5,068
Short-term investments
18
18
—
—
18
—
Total financial assets not carried at fair value
$
26,400
$
26,233
$
867
$
—
$
328
$
25,038
Financial liabilities
Interest sensitive contract liabilities
$
236,927
$
232,387
$
—
$
—
$
—
$
232,387
Debt
7,864
7,507
—
577
6,930
—
Securities to repurchase
3,537
3,537
—
—
3,537
—
Funds withheld liability
4,503
4,503
—
—
—
4,503
Total financial liabilities not carried at fair value
Notes to Condensed Consolidated Financial Statements (Unaudited)
December 31, 2024
(In millions)
Carrying Value
Fair Value
NAV
Level 1
Level 2
Level 3
Financial assets
Investment funds
$
107
$
107
$
107
$
—
$
—
$
—
Policy loans
318
318
—
—
318
—
Funds withheld at interest
21,901
21,901
—
—
—
21,901
Short-term investments
192
192
—
—
—
192
Other investments
93
101
—
—
—
101
Investments in related parties
Investment funds
714
714
714
—
—
—
Funds withheld at interest
5,665
5,665
—
—
—
5,665
Short-term investments
743
743
—
—
743
—
Total financial assets not carried at fair value
$
29,733
$
29,741
$
821
$
—
$
1,061
$
27,859
Financial liabilities
Interest sensitive contract liabilities
$
200,278
$
192,025
$
—
$
—
$
—
$
192,025
Debt
6,309
5,844
—
581
5,263
—
Securities to repurchase
5,716
5,716
—
—
5,716
—
Funds withheld liability
4,331
4,331
—
—
—
4,331
Total financial liabilities not carried at fair value
$
216,634
$
207,916
$
—
$
581
$
10,979
$
196,356
We estimate the fair value for financial instruments not carried at fair value using the same methods and assumptions as those we carry at fair value. The financial instruments presented above are reported at carrying value on the condensed consolidated balance sheets; however, in the case of policy loans, funds withheld at interest and liability, short-term investments and securities to repurchase, the carrying amount approximates fair value.
Other investments– Other investments include investments in low-income housing and transferable energy tax credit structures. For those held using the proportional amortization method, the carrying value may include tax credits which have been received but not yet used, which are excluded from the measurement of the fair value estimate of the investment structures. Tax and other future benefits expected to be generated by these structures are valued using a discounted cash flow model. Received but unused tax credits included in the carrying value as of June 30, 2025 are expected to be used during the year ending December 31, 2025.
Interest sensitive contract liabilities– The carrying and fair value of interest sensitive contract liabilities above includes fixed indexed and traditional fixed annuities without mortality or morbidity risks, funding agreements, guaranteed investment contracts and payout annuities without life contingencies. The embedded derivatives within fixed indexed annuities without mortality or morbidity risks are excluded, as they are carried at fair value. The valuation of these investment contracts is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using current market risk-free interest rates, adding a spread to reflect our nonperformance risk and subtracting a risk margin to reflect uncertainty inherent in the projected cash flows.
Debt – We obtain the fair value of debt from commercial pricing services. These are classified as Level 1 or Level 2. The pricing services use quoted market prices, if available, or incorporate a variety of market observable information in their valuation techniques including benchmark yields, trading activity, credit quality, issuer spreads, bids, offers and other reference data.
Notes to Condensed Consolidated Financial Statements (Unaudited)
6. Deferred Acquisition Costs, Deferred Sales Inducements and Value of Business Acquired
The following represents a rollforward of DAC and DSI by product, and a rollforward of VOBA. See Note 7 – Long-duration Contracts for more information on our products.
Six months ended June 30, 2025
DAC
DSI
VOBA
Total DAC, DSI and VOBA
(In millions)
Traditional deferred annuities
Indexed annuities
Funding agreements
Other investment-type and other
Indexed annuities
Balance at December 31, 2024
$
1,158
$
2,278
$
40
$
11
$
1,476
$
2,210
$
7,173
Additions
366
560
26
5
408
—
1,365
Amortization
(169)
(122)
(11)
(1)
(84)
(172)
(559)
Other
2
—
—
—
—
—
2
Balance at June 30, 2025
$
1,357
$
2,716
$
55
$
15
$
1,800
$
2,038
$
7,981
Six months ended June 30, 2024
DAC
DSI
VOBA
Total DAC, DSI and VOBA
(In millions)
Traditional deferred annuities
Indexed annuities
Funding agreements
Other investment-type and other
Indexed annuities
Balance at December 31, 2023
$
890
$
1,517
$
10
$
11
$
970
$
2,581
$
5,979
Additions
279
525
24
—
328
—
1,156
Amortization
(109)
(82)
(5)
(1)
(55)
(182)
(434)
Other
(2)
—
—
—
—
—
(2)
Balance at June 30, 2024
$
1,058
$
1,960
$
29
$
10
$
1,243
$
2,399
$
6,699
Deferred costs related to universal life-type policies and investment contracts with significant revenue streams from sources other than investment of the policyholder funds, including traditional deferred annuities and indexed annuities, are amortized on a constant-level basis for a cohort of contracts using initial premium or deposit. Significant inputs and assumptions are required for determining the expected duration of the cohort and involves using accepted actuarial methods to determine decrement rates related to policyholder behavior for lapses, withdrawals (surrenders) and mortality. The assumptions used to determine the amortization of DAC and DSI are consistent with those used to estimate the related liability balance.
Deferred costs related to investment contracts without significant revenue streams from sources other than investment of policyholder funds are amortized using the effective interest method, which primarily includes funding agreements. The effective interest method requires inputs to project future cash flows, which for funding agreements includes contractual terms of notional value, periodic interest payments based on either fixed or floating interest rates, and duration. For other investment-type contracts which include immediate annuities and assumed endowments without significant mortality risks, assumptions are required related to policyholder behavior for lapses and withdrawals (surrenders).
▪indexed annuities consisting of fixed indexed, index-linked variable annuities, and assumed indexed universal life without significant mortality risk;
▪funding agreements; and
▪other investment-type contracts comprising of immediate annuities without significant mortality risk (which includes pension group annuities without life contingencies), guaranteed investment contracts, and assumed endowments without significant mortality risks.
The following represents a rollforward of the policyholder account balance by product within interest sensitive contract liabilities. Where explicit policyholder account balances do not exist, the disaggregated rollforward represents the recorded reserve.
Six months ended June 30, 2025
(In millions, except percentages)
Traditional deferred annuities
Indexed annuities
Funding agreements
Other investment-type
Total
Balance at December 31, 2024
$
86,661
$
97,861
$
54,768
$
8,030
$
247,320
Deposits
15,357
8,868
21,676
502
46,403
Policy charges
(1)
(382)
—
—
(383)
Surrenders and withdrawals
(2,913)
(5,601)
—
(36)
(8,550)
Benefit payments
(703)
(807)
(3,906)
(153)
(5,569)
Interest credited
2,098
1,376
1,456
110
5,040
Foreign exchange
337
7
1,021
437
1,802
Other
—
—
213
(34)
179
Balance at June 30, 2025
$
100,836
$
101,322
$
75,228
$
8,856
$
286,242
Weighted average crediting rate
4.6
%
2.7
%
4.6
%
2.7
%
Net amount at risk
$
420
$
15,997
$
—
$
39
Cash surrender value
94,874
93,191
—
7,191
Six months ended June 30, 2024
(In millions, except percentages)
Traditional deferred annuities
Indexed annuities
Funding agreements
Other investment-type
Total
Balance at December 31, 2023
$
64,763
$
93,147
$
32,350
$
7,629
$
197,889
Deposits
13,436
8,823
14,511
708
37,478
Policy charges
(1)
(342)
—
—
(343)
Surrenders and withdrawals
(2,511)
(6,350)
—
(44)
(8,905)
Benefit payments
(557)
(845)
(6,032)
(113)
(7,547)
Interest credited
1,466
1,400
703
100
3,669
Foreign exchange
(357)
(4)
(180)
(583)
(1,124)
Other
—
—
(64)
(50)
(114)
Balance at June 30, 2024
$
76,239
$
95,829
$
41,288
$
7,647
$
221,003
Weighted average crediting rate
4.2
%
2.5
%
4.3
%
2.7
%
Net amount at risk
$
427
$
15,185
$
—
$
71
Cash surrender value
71,380
87,449
—
6,404
The following is a reconciliation of interest sensitive contract liabilities to the condensed consolidated balance sheets:
June 30,
(In millions)
2025
2024
Traditional deferred annuities
$
100,836
$
76,239
Indexed annuities
101,322
95,829
Funding agreements
75,228
41,288
Other investment-type
8,856
7,647
Reconciling items1
5,996
7,386
Interest sensitive contract liabilities
$
292,238
$
228,389
1Reconciling items primarily include embedded derivatives in indexed annuities, unaccreted host contract adjustments on indexed annuities, negative VOBA, sales inducement liabilities, and wholly ceded universal life insurance contracts.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following represents policyholder account balances by range of guaranteed minimum crediting rates (GMCR), as well as the related range of the difference between rates being credited to policyholders and the respective guaranteed minimums. Our funding agreements and other investment-type products provide us little to no discretionary ability to change the rates of interest payable to the respective policyholder or institution, and as a result, those policyholder account balances are excluded from the following tables.
June 30, 2025
(In millions)
At guaranteed minimum
1 basis point – 100 basis points above guaranteed minimum
Greater than 100 basis points above guaranteed minimum
Total
Traditional deferred annuities
< 2.0%
$
5,071
$
1,857
$
80,432
$
87,360
2.0% – < 4.0%
5,962
610
2,598
9,170
4.0% – < 6.0%
4,300
2
1
4,303
6.0% and greater
3
—
—
3
Total traditional deferred annuities
$
15,336
$
2,469
$
83,031
$
100,836
Indexed annuities
< 2.0%
$
1,544
$
1,182
$
3,280
$
6,006
2.0% – < 4.0%
4,070
37
—
4,107
Total indexed annuities with GMCR
5,614
1,219
3,280
10,113
Other1
91,209
Total indexed annuities
$
101,322
1 Includes account value allocated to an indexed strategy or other amounts without a GMCR.
June 30, 2024
(In millions)
At guaranteed minimum
1 basis point – 100 basis points above guaranteed minimum
Greater than 100 basis points above guaranteed minimum
Total
Traditional deferred annuities
< 2.0%
$
4,003
$
3,029
$
56,813
$
63,845
2.0% – < 4.0%
7,127
434
1,466
9,027
4.0% – < 6.0%
3,354
9
1
3,364
6.0% and greater
3
—
—
3
Total traditional deferred annuities
$
14,487
$
3,472
$
58,280
$
76,239
Indexed annuities
< 2.0%
$
2,069
$
1,492
$
2,962
$
6,523
2.0% – < 4.0%
4,826
53
17
4,896
Total indexed annuities with GMCR
6,895
1,545
2,979
11,419
Other1
84,410
Total indexed annuities
$
95,829
1 Includes account value allocated to an indexed strategy or other amounts without a GMCR.
Note: The amounts presented in this table have been revised to conform with the current year presentation to provide certain product-level detail and account value allocated to an indexed strategy or other amounts without a GMCR.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Future policy benefits – Future policy benefits consist primarily of payout annuities, including single premium immediate annuities with life contingencies (which include pension group annuities with life contingencies), and whole life insurance contracts.
The following is a rollforward by product within future policy benefits:
Six months ended June 30, 2025
(In millions, except percentages and years)
Payout annuities with life contingencies
Whole life
Total
Present value of expected net premiums
Beginning balance
$
—
$
880
$
880
Effect of changes in discount rate assumptions
—
(30)
(30)
Effect of foreign exchange on the change in discount rate assumptions
—
2
2
Beginning balance at original discount rate
—
852
852
Effect of actual to expected experience
—
(1)
(1)
Adjusted balance
—
851
851
Interest accrual
—
10
10
Net premium collected
—
(92)
(92)
Foreign exchange
—
76
76
Ending balance at original discount rate
—
845
845
Effect of changes in discount rate assumptions
—
23
23
Ending balance, present value of expected net premiums
$
—
$
868
$
868
Present value of expected future policy benefits
Beginning balance
$
42,261
$
2,711
$
44,972
Effect of changes in discount rate assumptions
7,378
206
7,584
Effect of foreign exchange on the change in discount rate assumptions
(5)
(1)
(6)
Beginning balance at original discount rate
49,634
2,916
52,550
Effect of actual to expected experience
(64)
2
(62)
Adjusted balance
49,570
2,918
52,488
Issuances
133
—
133
Interest accrual
879
35
914
Benefit payments
(2,238)
(49)
(2,287)
Foreign exchange
75
270
345
Ending balance at original discount rate
48,419
3,174
51,593
Effect of changes in discount rate assumptions
(6,465)
(553)
(7,018)
Effect of foreign exchange on the change in discount rate assumptions
(28)
(24)
(52)
Ending balance, present value of expected future policy benefits
Notes to Condensed Consolidated Financial Statements (Unaudited)
Six months ended June 30, 2024
(In millions, except percentages and years)
Payout annuities with life contingencies
Whole life
Total
Present value of expected net premiums
Beginning balance
$
—
$
1,182
$
1,182
Effect of changes in discount rate assumptions
—
(45)
(45)
Effect of foreign exchange on the change in discount rate assumptions
—
(2)
(2)
Beginning balance at original discount rate
—
1,135
1,135
Effect of actual to expected experience
—
(6)
(6)
Adjusted balance
—
1,129
1,129
Interest accrual
—
11
11
Net premium collected
—
(98)
(98)
Foreign exchange
—
(135)
(135)
Ending balance at original discount rate
—
907
907
Effect of changes in discount rate assumptions
—
38
38
Effect of foreign exchange on the change in discount rate assumptions
—
(3)
(3)
Ending balance, present value of expected net premiums
$
—
$
942
$
942
Present value of expected future policy benefits
Beginning balance
$
45,001
$
3,371
$
48,372
Effect of changes in discount rate assumptions
6,233
(89)
6,144
Effect of foreign exchange on the change in discount rate assumptions
1
(6)
(5)
Beginning balance at original discount rate
51,235
3,276
54,511
Effect of actual to expected experience
(29)
(9)
(38)
Adjusted balance
51,206
3,267
54,473
Issuances
670
—
670
Interest accrual
901
35
936
Benefit payments
(2,243)
(44)
(2,287)
Foreign exchange
(6)
(404)
(410)
Ending balance at original discount rate
50,528
2,854
53,382
Effect of changes in discount rate assumptions
(7,537)
(45)
(7,582)
Effect of foreign exchange on the change in discount rate assumptions
1
(1)
—
Ending balance, present value of expected future policy benefits
42,992
2,808
45,800
Less: Present value of expected net premiums
—
942
942
Net future policy benefits
$
42,992
$
1,866
$
44,858
Weighted-average liability duration (in years)
9.4
32.2
Weighted-average interest accretion rate
3.7
%
4.8
%
Weighted-average current discount rate
5.6
%
4.4
%
Expected future gross premiums, undiscounted
$
—
$
1,201
Expected future gross premiums, discounted1
—
992
Expected future benefit payments, undiscounted
74,184
10,247
1Discounted at the original discount rate.
The following is a reconciliation of future policy benefits to the condensed consolidated balance sheets:
June 30,
(In millions)
2025
2024
Payout annuities with life contingencies
$
41,926
$
42,992
Whole life
1,729
1,866
Reconciling items1
5,745
5,941
Future policy benefits
$
49,400
$
50,799
1Reconciling items primarily include the deferred profit liability and negative VOBA associated with the liability for future policy benefits. Additionally, it includes term life reserves, fully ceded whole life reserves, and reserves for immaterial lines of business including accident and health and disability, as well as other insurance benefit reserves for no-lapse guarantees with universal life contracts, all of which are fully ceded.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following is a reconciliation of premiums and interest expense relating to future policy benefits to the condensed consolidated statements of income:
Premiums
Interest expense
Six months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Payout annuities with life contingencies
$
122
$
655
$
879
$
901
Whole life
101
105
25
23
Reconciling items1
11
14
—
—
Total
$
234
$
774
$
904
$
924
1Reconciling items primarily relate to immaterial lines of business including term life, fully ceded whole life, and accident and health and disability.
Significant assumptions and inputs to the calculation of future policy benefits for payout annuities with life contingencies include policyholder demographic data, assumptions for policyholder longevity and policyholder utilization for contracts with deferred lives, and discount rates. For whole life products, significant assumptions and inputs include policyholder demographic data, assumptions for mortality, morbidity, and lapse and discount rates.
We base certain key assumptions related to policyholder behavior on industry standard data adjusted to align with actual company experience, if necessary. At least annually, we review all significant cash flow assumptions and update as necessary, unless emerging experience indicates a more frequent review is necessary. The discount rate reflects market observable inputs from upper-medium grade fixed income instrument yields and is interpolated, where necessary, to conform to the duration of our liabilities.
During the six months ended June 30, 2025, the present value of expected future policy benefits decreased by $449 million, which was driven by $2,287 million of benefit payments, offset by $914 million of interest accruals, a $573 million change in discount rate assumptions related to a decrease in market observable rates, a $345 million change in foreign exchange and $133 million of issuances, primarily pension group annuities.
During the six months ended June 30, 2024, the present value of expected future policy benefits decreased by $2,572 million, which was driven by $2,287 million of benefit payments and a $1,431 million change in discount rate assumptions related to an increase in market observable rates, partially offset by $936 million of interest accrual.
The following is a summary of remeasurement gains (losses) included within future policy and other policy benefits on the condensed consolidated statements of income:
Six months ended June 30,
(In millions)
2025
2024
Reserves
$
61
$
32
Deferred profit liability
2
(29)
Negative VOBA
(3)
(10)
Total remeasurement gains (losses)
$
60
$
(7)
During the six months ended June 30, 2025 and 2024, we recorded reserve increases of $8 million and $35 million, respectively, on the condensed consolidated statements of income as a result of the present value of benefits and expenses exceeding the present value of gross premiums.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Market risk benefits – We issue and reinsure traditional deferred and indexed annuity products that contain guaranteed lifetime withdrawal benefit (GLWB) and guaranteed minimum death benefit (GMDB) riders that meet the criteria to be classified as market risk benefits.
The following is a rollforward of net market risk benefit liabilities by product:
Six months ended June 30, 2025
(In millions, except years)
Traditional deferred annuities
Indexed annuities
Total
Balance at December 31, 2024
$
190
$
3,525
$
3,715
Effect of changes in instrument-specific credit risk
(3)
(154)
(157)
Balance, beginning of period, before changes in instrument-specific credit risk
187
3,371
3,558
Issuances
—
201
201
Interest accrual
4
89
93
Attributed fees collected
1
189
190
Benefit payments
(3)
(30)
(33)
Effect of changes in interest rates
3
(29)
(26)
Effect of actual policyholder behavior compared to expected behavior
—
53
53
Balance, end of period, before changes in instrument-specific credit risk
192
3,844
4,036
Effect of changes in instrument-specific credit risk
3
173
176
Balance at June 30, 2025
195
4,017
4,212
Less: Reinsurance recoverable
—
50
50
Balance at June 30, 2025, net of reinsurance
$
195
$
3,967
$
4,162
Net amount at risk
$
420
$
15,997
Weighted-average attained age of contract holders (in years)
76
69
Six months ended June 30, 2024
(In millions, except years)
Traditional deferred annuities
Indexed annuities
Total
Balance at December 31, 2023
$
192
$
3,181
$
3,373
Effect of changes in instrument-specific credit risk
2
(10)
(8)
Balance, beginning of period, before changes in instrument specific credit risk
194
3,171
3,365
Issuances
—
159
159
Interest accrual
5
94
99
Attributed fees collected
1
174
175
Benefit payments
(2)
(27)
(29)
Effect of changes in interest rates
(11)
(372)
(383)
Effect of changes in equity
—
(81)
(81)
Effect of actual policyholder behavior compared to expected behavior
4
45
49
Balance, end of period, before changes in instrument-specific credit risk
191
3,163
3,354
Effect of changes in instrument-specific credit risk
(2)
4
2
Balance at June 30, 2024
189
3,167
3,356
Less: Reinsurance recoverable
—
18
18
Balance at June 30, 2024, net of reinsurance
$
189
$
3,149
$
3,338
Net amount at risk
$
427
$
15,185
Weighted-average attained age of contract holders (in years)
76
69
The following is a reconciliation of market risk benefits to the condensed consolidated balance sheets. Market risk benefit assets are included in other assets on the condensed consolidated balance sheets.
Notes to Condensed Consolidated Financial Statements (Unaudited)
During the six months ended June 30, 2025, net market risk benefit liabilities increased by $497 million, which was primarily driven by $201 million of issuances, $190 million in fees collected from policyholders and $93 million of interest accruals.
During the six months ended June 30, 2024, net market risk benefit liabilities decreased by $17 million, which was primarily driven by a decrease of $383 million related to changes in the risk-free discount rate across the curve, offset by $175 million in fees collected from policyholders and $159 million of issuances.
The determination of the fair value of market risk benefits requires the use of inputs related to fees and assessments and assumptions in determining the projected benefits in excess of the projected account balance. Judgment is required for both economic and actuarial assumptions, which can be either observable or unobservable, that impact future policyholder account growth.
Economic assumptions include interest rates and implied volatilities throughout the duration of the liability. For indexed annuities, assumptions also include projected equity returns which impact cash flows attributable to indexed strategies, implied equity volatilities, expected index credits on the next policy anniversary date and future equity option costs. Assumptions related to the level of option budgets used for determining the future equity option costs and the impact on future policyholder account value growth are considered unobservable inputs.
Policyholder behavior assumptions are unobservable inputs and are established using accepted actuarial valuation methods to estimate withdrawals (surrender rate) and income rider utilization. Assumptions are generally based on industry data and pricing assumptions which are updated for actual experience, if necessary. Actual experience may be limited for recently issued products.
All inputs are used to project excess benefits and fees over a range of risk-neutral, stochastic interest rate scenarios. For indexed annuities, stochastic equity return scenarios are also included within the range. A risk margin is incorporated within the discount rate to reflect uncertainty in the projected cash flows such as variations in policyholder behavior, as well as a credit spread to reflect nonperformance risk, which is considered an unobservable input. We use our public credit rating relative to the US Treasury curve as of the valuation date to reflect our nonperformance risk in the fair value estimate of market risk benefits.
The following summarizes the unobservable inputs for market risk benefits:
June 30, 2025
(In millions, except percentages)
Fair value
Valuation technique
Unobservable inputs
Minimum
Maximum
Weighted average
Impact of an increase in the input on fair value
Market risk benefits, net
$
4,212
Discounted cash flow
Nonperformance risk
0.3
%
1.1
%
1.0
%
1
Decrease
Option budget
0.5
%
6.0
%
2.5
%
2
Decrease
Surrender rate
3.1
%
6.7
%
4.4
%
2
Decrease
Utilization rate
28.6
%
95.0
%
85.4
%
3
Increase
June 30, 2024
(In millions, except percentages)
Fair value
Valuation technique
Unobservable inputs
Minimum
Maximum
Weighted average
Impact of an increase in the input on fair value
Market risk benefits, net
$
3,356
Discounted cash flow
Nonperformance risk
0.4
%
1.3
%
1.2
%
1
Decrease
Option budget
0.5
%
6.0
%
2.1
%
2
Decrease
Surrender rate
3.1
%
6.9
%
4.4
%
2
Decrease
Utilization rate
28.6
%
95.0
%
84.4
%
3
Increase
1The nonperformance risk weighted average is based on the cash flows underlying the market risk benefit reserve.
2 The option budget and surrender rate weighted averages are calculated based on projected account values.
3The utilization of GLWB withdrawals represents the estimated percentage of policyholders that are expected to use their income rider over the duration of the contract, with the weighted average based on current account values.
Notes to Condensed Consolidated Financial Statements (Unaudited)
8. Debt
Liquidity Facility—On June 27, 2025, AHL, AARe, ALRe and AAIA entered into a 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 28, 2024. The previous credit agreement, and the commitments under it, expired on June 27, 2025. The Liquidity Facility is unsecured and has a commitment termination date of June 26, 2026, subject to any extensions of additional 364-day periods with consent of extending lenders and/or “term-out” of outstanding loans (by which, at our election, the outstanding loans may be converted to term loans which shall have a maturity of up to one year after the original maturity date), in each case in accordance with the terms of the Liquidity Facility. In connection with the Liquidity Facility, AARe guaranteed all of the obligations of each other borrower under the Liquidity Facility and the related loan documents. The Liquidity Facility will be used for liquidity and working capital needs to meet short-term cash flow and investment timing differences. The borrowing capacity under the Liquidity Facility is $2.6 billion, subject to being increased up to $3.1 billion in total on the terms described in the Liquidity Facility. The Liquidity Facility contains various standard covenants with which we must comply, including the following:
1.AARe minimum consolidated net worth of no less than $23.2 billion; and
2.Restrictions on our ability to incur liens, with certain exceptions.
Interest accrues on outstanding borrowings at either the adjusted term secured overnight financing rate plus a margin or the base rate plus a margin, with applicable margin varying based on AARe’s financial strength rating. Rates and terms are as defined in the Liquidity Facility.
As of June 30, 2025 and December 31, 2024, we had no amounts outstanding under the current or previous liquidity facilities and were in compliance with all financial covenants under the facilities.
Senior Notes—Our senior unsecured notes are callable by AHL at any time. If called prior to a defined period before the scheduled maturity date, typically three or six months, the price is equal to the greater of (1) 100% of the principal and any accrued and unpaid interest and (2) an amount equal to the sum of the present values of remaining scheduled payments, discounted from the scheduled payment date to the redemption date at the treasury rate plus a spread as defined in the applicable prospectus supplement and any accrued and unpaid interest.
During the second quarter of 2025, we issued $1,000 million of 6.625% Senior Notes due May 19, 2055 (2055 Senior Notes). We will accrue interest quarterly and pay interest on the 2055 Senior Notes semi-annually, commencing on November 19, 2025.
Subordinated Notes—We have fixed-rate reset subordinated notes outstanding, which pay interest at the initially stated fixed rate until the interest rate reset dates, at which point the interest rate resets to the Five-Year US Treasury Rate plus a spread. Reset terms are as defined in the applicable prospectus supplement. We may defer interest payments on the subordinated notes for up to five consecutive years.
During the second quarter of 2025, we issued $600 million of 6.875% Fixed-Rate Reset Junior Subordinated Debentures due June 28, 2055 (2055 Subordinated Notes). We will accrue interest quarterly and pay interest at an annual fixed rate of 6.875% on the 2055 Subordinated Notes semi-annually, commencing on December 28, 2025 until June 28, 2035. On June 28, 2035, and every fifth annual anniversary thereafter, the interest rate will reset to the Five-Year US Treasury Rate (as defined in the applicable prospectus supplement) plus 2.582%. We may defer interest payments for up to five consecutive years.
Notes to Condensed Consolidated Financial Statements (Unaudited)
9. Equity
Preferred Stock—On June 30, 2025, we redeemed in whole our 6.375% Fixed-Rate Reset Perpetual Non-Cumulative Preferred Stock, Series C (Series C) outstanding for $25,000 per share of Series C preferred stock, or $600 million in total.
Common Stock—On August 5, 2025, our board of directors approved a reverse stock split of 1-for-1,000, which reduced our shares of common stock outstanding to 203,805 as of August 5, 2025, all of which continue to be held by AGM.
Accumulated Other Comprehensive Income (Loss)—The following provides the details and changes in AOCI:
(In millions)
Unrealized investment gains (losses) on AFS securities without a credit allowance
Unrealized investment gains (losses) on AFS securities with a credit allowance
Unrealized gains (losses) on hedging instruments
Remeasurement gains (losses) on future policy benefits related to discount rate
Remeasurement gains (losses) on market risk benefits related to credit risk
Foreign currency translation and other adjustments
Accumulated other comprehensive income (loss)
Balance at March 31, 2025
$
(8,214)
$
(313)
$
(1)
$
3,986
$
(23)
$
4
$
(4,561)
Other comprehensive income (loss) before reclassifications
1,258
58
1
(45)
(135)
78
1,215
Less: Reclassification adjustments for gains (losses) realized in net income1
(77)
(3)
9
—
—
—
(71)
Less: Income tax expense (benefit)
268
13
(2)
(6)
(28)
15
260
Less: Other comprehensive income (loss) attributable to noncontrolling interests, net of tax
234
5
20
(96)
(15)
5
153
Balance at June 30, 2025
$
(7,381)
$
(270)
$
(27)
$
4,043
$
(115)
$
62
$
(3,688)
1 Recognized in investment related gains (losses) on the condensed consolidated statements of income.
(In millions)
Unrealized investment gains (losses) on AFS securities without a credit allowance
Unrealized investment gains (losses) on AFS securities with a credit allowance
Unrealized gains (losses) on hedging instruments
Remeasurement gains (losses) on future policy benefits related to discount rate
Remeasurement gains (losses) on market risk benefits related to credit risk
Foreign currency translation and other adjustments
Accumulated other comprehensive income (loss)
Balance at March 31, 2024
$
(8,959)
$
(404)
$
(129)
$
3,879
$
(17)
$
2
$
(5,628)
Other comprehensive income (loss) before reclassifications
(1,069)
148
97
628
34
(5)
(167)
Less: Reclassification adjustments for gains (losses) realized in net income1
64
(6)
13
—
—
—
71
Less: Income tax expense (benefit)
(229)
32
18
128
8
(1)
(44)
Less: Other comprehensive income (loss) attributable to noncontrolling interests, net of tax
(193)
(5)
20
161
4
—
(13)
Balance at June 30, 2024
$
(9,670)
$
(277)
$
(83)
$
4,218
$
5
$
(2)
$
(5,809)
1 Recognized in investment related gains (losses) on the condensed consolidated statements of income.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(In millions)
Unrealized investment gains (losses) on AFS securities without a credit allowance
Unrealized investment gains (losses) on AFS securities with a credit allowance
Unrealized gains (losses) on hedging instruments
Remeasurement gains (losses) on future policy benefits related to discount rate
Remeasurement gains (losses) on market risk benefits related to credit risk
Foreign currency translation and other adjustments
Accumulated other comprehensive income (loss)
Balance at December 31, 2024
$
(9,171)
$
(284)
$
(120)
$
4,235
$
(103)
$
(22)
$
(5,465)
Other comprehensive income (loss) before reclassifications
2,596
21
240
(573)
(19)
114
2,379
Less: Reclassification adjustments for gains (losses) realized in net income1
(268)
(3)
19
—
—
—
(252)
Less: Income tax expense (benefit)
580
5
46
(116)
(4)
22
533
Less: Other comprehensive income (loss) attributable to noncontrolling interests, net of tax
494
5
82
(265)
(3)
8
321
Balance at June 30, 2025
$
(7,381)
$
(270)
$
(27)
$
4,043
$
(115)
$
62
$
(3,688)
1 Recognized in investment related gains (losses) on the condensed consolidated statements of income.
(In millions)
Unrealized investment gains (losses) on AFS securities without a credit allowance
Unrealized investment gains (losses) on AFS securities with a credit allowance
Unrealized gains (losses) on hedging instruments
Remeasurement gains (losses) on future policy benefits related to discount rate
Remeasurement gains (losses) on market risk benefits related to credit risk
Foreign currency translation and other adjustments
Accumulated other comprehensive income (loss)
Balance at December 31, 2023
$
(8,672)
$
(289)
$
(82)
$
3,458
$
3
$
13
$
(5,569)
Other comprehensive income (loss) before reclassifications
(1,614)
3
39
1,431
6
(21)
(156)
Less: Reclassification adjustments for gains (losses) realized in net income1
111
(6)
31
—
—
—
136
Less: Income tax expense (benefit)
(346)
2
2
296
2
(4)
(48)
Less: Other comprehensive income (loss) attributable to noncontrolling interests, net of tax
(381)
(5)
7
375
2
(2)
(4)
Balance at June 30, 2024
$
(9,670)
$
(277)
$
(83)
$
4,218
$
5
$
(2)
$
(5,809)
1 Recognized in investment related gains (losses) on the condensed consolidated statements of income.
10. Income Taxes
The income tax expense (benefit)was $(34) million and $161 million for the three months ended June 30, 2025 and 2024, respectively. Our effective tax rate was (5)% and 16% for the three months ended June 30, 2025 and 2024, respectively. The income tax expensewas $141 million and $468 million for the six months ended June 30, 2025 and 2024, respectively. Our effective tax rate was 9% and 17% for the six months ended June 30, 2025 and 2024, respectively. The income tax expense considers US federal, US state, local and foreign income taxes. The most significant reconciling items relate to US noncontrolling interests and Bermuda corporate income tax.
On June 28, 2025, the Group of 7 (G7) released a joint statement supporting the exclusion of US-parented multinational groups from the Pillar Two Income Inclusion Rule and Undertaxed Profits Rule with respect to both domestic and foreign profits. While such a revision would likely apply to our wholly-owned entities, application to ACRA is uncertain given that we only partially own ACRA. In addition, it is uncertain whether Bermuda will revise its corporate income tax (CIT) regime in response to the G7’s statement. We continue to monitor these developments. Our results continue to reflect any impacts of Pillar Two and the Bermuda CIT on our US and non-US income, and if either regime changes, our consolidated financial statements could be affected.
On July 4, 2025, the US government enacted H.R. 1, which includes several tax-related provisions. We have evaluated the enacted legislation and concluded that it does not have a material impact on our consolidated financial statements.
Notes to Condensed Consolidated Financial Statements (Unaudited)
11. Related Parties
Apollo
Fee structure – Substantially all of our investments are managed by Apollo. Apollo provides us with a full suite of services for our investment portfolio, including direct investment management, asset allocation, mergers and acquisitions asset diligence, and certain operational support services including investment compliance, tax, legal and risk management support.
Apollo has extensive experience managing our investment portfolio and its knowledge of our liability profile enables it to tailor an asset management strategy to fit our specific needs. This strategy has proven responsive to changing market conditions and focuses on earning incremental yield by taking measured liquidity risk and complexity risk, rather than assuming incremental credit risk. Our partnership has enabled us to take advantage of investment opportunities that would likely not otherwise have been available to us.
Under our fee agreement with Apollo, we pay Apollo a base management fee of (1) 0.225% per year on a monthly basis equal to the lesser of (A) $103.4 billion, which represents the aggregate fair market value of substantially all of the assets in substantially all of the accounts of or relating to us (collectively, the Accounts) as of December 31, 2018 (Backbook Value), and (B) the aggregate book value of substantially all of the assets in the Accounts at the end of the respective month, plus (2) 0.15% per year of the amount, if any, by which the aggregate book value of substantially all of the assets in the Accounts at the end of the respective month exceeds the Backbook Value, subject to certain adjustments. Additionally, we pay a sub-allocation fee based on specified asset class tiers ranging from 0.065% to 0.70% of the book value of such assets, with the higher percentages in this range for asset classes that are designed to have more alpha generating abilities. In addition to the base and sub-allocation fees specified above, we pay Apollo a target annual performance fee of $37.5 million, with the amount of the annual performance fee ranging from between 0% and 200% of such target amount, based on our spread related earnings for the year relative to our targets.
During the three months ended June 30, 2025 and 2024, we incurred management fees, inclusive of the base, sub-allocation and performance fees, of $383 million and $304 million, respectively. During the six months ended June 30, 2025 and 2024, we incurred management fees, inclusive of the base, sub-allocation and performance fees, of $754 million and $593 million, respectively. Management fees are included within net investment income on the condensed consolidated statements of income. As of June 30, 2025 and December 31, 2024, management fees payable were $148 million and $127 million, respectively, and are included in other liabilities on the condensed consolidated balance sheets. Such amounts include fees incurred attributable to Athene Co-Invest Reinsurance Affiliate Holding Ltd. (together with its subsidiaries, ACRA 1) and Athene Co-Invest Reinsurance Affiliate Holding 2 Ltd. (together with its subsidiaries, ACRA 2) including any noncontrolling interests associated with ACRA 1 and ACRA 2 (collectively, ACRA).
In addition to the assets on our condensed consolidated balance sheets managed by Apollo, Apollo manages the assets underlying our funds withheld receivable. For these assets, the third-party cedants pay Apollo fees based upon the same fee construct we have with Apollo. Such fees directly reduce the settlement payments that we receive from the third-party cedant and, as such, we indirectly pay those fees. Finally, Apollo charges management fees and carried interest on Apollo-managed funds and other entities in which we invest. Neither the fees paid by such third-party cedants nor the fees or carried interest paid by such Apollo-managed funds or other entities are included in the investment management fee amounts noted above.
Governance – We have an investment and asset liability committee, which includes members of our senior management and reports to the risk committee of our board of directors. The committee focuses on strategic decisions involving our investment portfolio, such as approving investment limits, new asset classes and our allocation strategy, reviewing large asset transactions, as well as monitoring our credit risk, and the management of our assets and liabilities.
AGM owns all of our common stock and James Belardi, our Executive Chairman and Chief Investment Officer, serves as a member of the board of directors and an executive officer of AGM, and Chief Executive Officer (CEO) of Apollo Insurance Solutions Group LP (ISG), which is also a subsidiary of AGM. Mr. Belardi also owns a profit interest in ISG and in connection with such interest receives quarterly distributions equal to 3.35% of base management fees and 4.5% of subadvisory fees, as such fees are defined in our fee agreement with Apollo. Additionally, six of the twelve members of our board of directors (including Mr. Belardi) are employees of or consultants to Apollo. In order to protect against potential conflicts of interest resulting from transactions into which we have entered and will continue to enter into with the Apollo Group, our audit committee reviews and approves material transactions between us and the Apollo Group, subject to certain exceptions.
Other related party transactions
Apollo Aligned Alternatives Aggregator, L.P. (AAA) – We consolidate AAA as a VIE and AAA holds the majority of our alternative investment portfolio. Apollo established AAA to provide a single vehicle through which investors may participate in a portfolio of alternative investments, including those managed by Apollo. Additionally, we believe AAA enhances Apollo’s ability to increase alternative assets under management (AUM) by raising capital from third parties, which allows us to achieve greater scale and diversification for alternatives.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Athora Holding Ltd. (Athora) – We had an amended and restated cooperation agreement with Athora, which was terminated effective August 5, 2025. Pursuant to this agreement, among other things, (1) for a period of 30 days from the receipt of notice of a cession, we had the right of first refusal to reinsure (i) up to 50% of the liabilities ceded from Athora’s reinsurance subsidiaries to Athora Life Re Ltd. and (ii) up to 20% of the liabilities ceded from a third party to any of Athora’s insurance subsidiaries, subject to a limitation in the aggregate of 20% of Athora’s liabilities, and (2) Athora agreed to cause its insurance subsidiaries to consider the purchase of certain funding agreements and/or other spread instruments issued by our insurance subsidiaries, subject to a limitation that the fair market value of such funding agreements purchased by any of Athora’s insurance subsidiaries may generally not exceed 3% of the fair market value of such subsidiary’s total assets. As of June 30, 2025, we had not exercised our right of first refusal to reinsure liabilities ceded to Athora’s insurance or reinsurance subsidiaries.
We have investments in Athora’s equity, which we hold as a related party investment fund on the condensed consolidated balance sheets, and non-redeemable preferred equity and corporate debt securities. The following table summarizes our investments in Athora:
(In millions)
June 30, 2025
December 31, 2024
Investment fund
$
1,171
$
1,033
Non-redeemable preferred equity and corporate debt securities
316
277
Total investment in Athora
$
1,487
$
1,310
Additionally, as of June 30, 2025 and December 31, 2024, we had $65 million and $57 million, respectively, of funding agreements outstanding to Athora. We also had commitments to make additional investments in Athora of $277 million as of June 30, 2025. On July 3, 2025, we made a conditional commitment to invest, or cause one or more of our affiliates to invest, in Athora for up to an additional $2.5 billion, in connection with Athora’s agreement to acquire a UK insurer (Athora transaction). The Athora transaction remains subject to closing conditions, including receipt of regulatory approvals. The amount ultimately funded pursuant to the conditional commitment, and sources of funding, are subject to change as a result of an anticipated capital raise by Athora between signing and closing of the Athora transaction.
Atlas –We have an equity investment in Atlas, an asset-backed specialty lender, through our investment in AAA. As of June 30, 2025 and December 31, 2024, we held $4,584 million and $3,245 million, respectively, of related party AFS securities issued by Atlas or its affiliates. Additionally, we held $724 million of reverse repurchase agreements issued by Atlas as of December 31, 2024, which were included in related party short-term investments on the condensed consolidated balance sheets, and settled during the six months ended June 30, 2025. As of June 30, 2025, we had commitments to make additional investments in Atlas of $1,384 million. See Note 12 – Commitments and Contingencies for further information on assurance letters issued in support of Atlas.
Catalina – We have an investment in Apollo Rose II (B) (Apollo Rose). Apollo Rose holds common and preferred equity interests in Catalina Holdings (Bermuda) Ltd. (together with its subsidiaries, Catalina). As of June 30, 2025 and December 31, 2024, we held $202 million and $205 million, respectively, of redeemable preferred equity securities issued by Apollo Rose, which are held as related party AFS securities on the condensed consolidated balance sheets.
We have a strategic modco reinsurance agreement with Catalina to cede certain inforce funding agreements. We elected the fair value option on this agreement and had a liability of $235 million and $221 million as of June 30, 2025 and December 31, 2024, respectively, which is included in other liabilities on the condensed consolidated balance sheets. We also have a modco reinsurance agreement with Catalina to cede a quota share of retail deferred annuity products. As of June 30, 2025 and December 31, 2024, we had a reinsurance recoverable balance of $5,269 million and $4,309 million, respectively, related to this agreement.
MidCap FinCo Designated Activity Company (MidCap Financial) – We have various investments in MidCap Financial including an investment through AAA, senior unsecured notes and redeemable preferred stock. We also hold structured securities issued by MidCap Financial affiliates. As of June 30, 2025 and December 31, 2024, we held securities issued by MidCap Financial and its affiliates of $1,849 million and $1,938 million, respectively, which are included in related party AFS securities on the condensed consolidated balance sheets.
Skylign Aviation Holdings, L.P. (together with its subsidiaries, Skylign) – We have investments in Skylign, a leading aviation finance group focused on aviation lending and leasing, both directly through notes issued by PK AirFinance, a subsidiary of Skylign, and indirectly through AAA. We had direct investments in Skylign notes of $1,503 million and $1,616 million as of June 30, 2025 and December 31, 2024, respectively, which are included in related party AFS securities on the condensed consolidated balance sheets. We also had commitments to make additional investments in Skylign of $41 million as of June 30, 2025.
Strategic Partnership – We have an agreement pursuant to which we may invest up to $2.875 billion in funds managed by Apollo entities (Strategic Partnership). This arrangement is intended to permit us to invest across the Apollo alternatives platform in a manner and size that is consistent with our existing investment strategy. Fees for such investments payable by us to Apollo would be more favorable to us than market rates, and consistent with our existing alternative investments, investments made under the Strategic Partnership require approval of ISG and remain subject to our existing governance processes, including approval by our audit committee where applicable. As of June 30, 2025 and December 31, 2024, we held $1,959 million and $1,994 million, respectively, of investments under the Strategic Partnership and these investments are typically included as investments of consolidated VIEs or related party investment funds on the condensed consolidated balance sheets.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Venerable – VA Capital Company LLC (VA Capital) is owned by a consortium of investors, led by affiliates of Apollo, Crestview Partners III Management, LLC and Reverence Capital Partners L.P., and is the parent of Venerable Holdings, Inc. (together with its subsidiaries, Venerable). We have a minority equity investment in VA Capital, which was $198 million and $178 million as of June 30, 2025 and December 31, 2024, respectively, that is included in related party investment funds on the condensed consolidated balance sheets and accounted for as an equity method investment. We also had commitments to make additional investments in Venerable of $169 million as of June 30, 2025.
Additionally, we consolidate AP Violet ATH Holdings, L.P. and its investment fund primarily represents an interest in VA Capital, which was $123 million and $106 million as of June 30, 2025 and December 31, 2024, respectively.
We have coinsurance and modco agreements with VIAC, which is a subsidiary of Venerable. VIAC is a related party due to our investment in VA Capital. We also have term loans receivable from Venerable due in 2033, which are included in related party other investments on the condensed consolidated balance sheets. The loans are held at fair value and were $339 million and $331 million as of June 30, 2025 and December 31, 2024, respectively. While management views the overall transactions with Venerable as favorable to us, the stated interest rate of 6.257% on the initial term loan to Venerable represented a below-market interest rate, and management considered such rate as part of its evaluation and pricing of the reinsurance transactions.
Wheels Inc. (Wheels) – We invest in Wheels indirectly through our investment in AAA. We also directly hold securities issued by Wheels of $974 million and $984 million as of June 30, 2025 and December 31, 2024, respectively, which are included in related party AFS securities on the condensed consolidated balance sheets. We also had commitments to make additional investments in Wheels of $32 million as of June 30, 2025.
ACRA and Apollo/Athene Dedicated Investment Programs I and II (collectively, ADIP) – ACRA 1 is partially owned by Apollo/Athene Dedicated Investment Program (ADIP I), a series of funds managed by Apollo. ALRe directly holds 37% of the economic interests in ACRA 1 and all of ACRA 1’s voting interests, with ADIP I holding the remaining 63% of the economic interests. ACRA 2 is partially owned by Apollo/Athene Dedicated Investment Program II (ADIP II), a fund managed by Apollo. ADIP II owns 63% of the economic interests in ACRA 2, with ALRe directly owning the remaining 37% of the economic interests. ALRe holds all of ACRA 2’s voting interests.
We received capital contributions and paid distributions relating to ACRA of the following:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Contributions from ADIP
$
126
$
300
$
126
$
705
Distributions to ADIP
(95)
(254)
(190)
(508)
Additionally, as of June 30, 2025 and December 31, 2024, we had $333 million and $289 million, respectively, of related party payables for contingent investment fees payable by ACRA to Apollo. ACRA is obligated to pay the contingent investment fees on behalf of ADIP and, as such, the balance is attributable to the noncontrolling interests.
As of June 30, 2025 and December 31, 2024, we held investments in ADIP of $236 million and $238 million, respectively, which are accounted for as equity method investments and included in related party investment funds on the condensed consolidated balance sheets. As of June 30, 2025, we also had commitments to make additional investments in ADIP of $328 million.
Unsecured Revolving Promissory Note Receivable with AGM – AHL has an unsecured revolving promissory note with AGM which allows AGM to borrow funds from AHL. The note has a borrowing capacity of $500 million. Interest accrues at the US mid-term applicable federal rate per year and has a maturity date of December 13, 2025, or earlier at AHL’s request. The note receivable had an outstanding balance of $177 million and $142 million as of June 30, 2025 and December 31, 2024, respectively.
Unsecured Revolving Promissory Note Payable with AGM – AHL has an unsecured revolving promissory note with AGM which allows AHL to borrow funds from AGM. The note has a borrowing capacity of $500 million. Interest accrues at the US mid-term applicable federal rate per year and has a maturity date of December 13, 2025, or earlier at AGM’s request. There was no outstanding balance on the note payable as of June 30, 2025 and December 31, 2024.
Notes to Condensed Consolidated Financial Statements (Unaudited)
12. Commitments and Contingencies
Contingent Commitments—We had commitments to make investments, inclusive of related party commitments discussed previously and those of consolidated VIEs, of $33.3 billion as of June 30, 2025. These commitments primarily include capital contributions to investment funds and mortgage loan commitments. We expect most of our current commitments will be invested over the next five years; however, these commitments could become due any time upon counterparty request.
Funding Agreements—We are a member of the Federal Home Loan Bank of Des Moines (FHLB) and, through membership, we have issued funding agreements to the FHLB in exchange for cash advances. As of June 30, 2025 and December 31, 2024, we had $21.0 billion and $15.6 billion, respectively, of FHLB funding agreements outstanding. We are required to provide collateral in excess of the funding agreement amounts outstanding, considering any discounts to the securities posted and prepayment penalties.
We have a funding agreement backed notes (FABN) program, which allows Athene Global Funding, a special-purpose, unaffiliated statutory trust, to offer its senior secured medium-term notes. Athene Global Funding uses the net proceeds from each sale to purchase one or more funding agreements from us. As of June 30, 2025 and December 31, 2024, we had $30.4 billion and $24.1 billion, respectively, of FABN funding agreements outstanding. We had $5.0 billion of board-authorized FABN capacity remaining as of June 30, 2025.
We also issue secured and other funding agreements. Secured funding agreements issued under our funding agreement backed repurchase agreement (FABR) programs involve special-purpose, unaffiliated entities entering into repurchase agreements with a third party, the proceeds of which are used by the special-purpose entities to purchase funding agreements from us. As of June 30, 2025 and December 31, 2024, we had $23.2 billion and $14.8 billion, respectively, of secured and other funding agreements outstanding, of which $18.0 billion and $12.0 billion were issued under the FABR program, respectively, and $5.2 billion and $2.8 billion were direct funding agreements, respectively.
Pledged Assets and Funds in Trust (Restricted Assets)—The restricted investments and cash balances included on the condensed consolidated balance sheets are as follows:
(In millions)
June 30, 2025
December 31, 2024
AFS securities
$
57,451
$
46,337
Trading securities
3,045
1,665
Equity securities
246
286
Mortgage loans
36,249
27,883
Investment funds
288
777
Derivative assets
158
91
Short-term investments
—
2
Other investments
1,733
1,507
Restricted cash
1,737
953
Total restricted assets
$
100,907
$
79,501
The restricted assets are primarily related to reinsurance trusts established in accordance with coinsurance agreements and the FHLB and secured funding agreements described above.
Letters of Credit—We have undrawn letters of credit totaling $1,147 million as of June 30, 2025. These letters of credit were issued for our reinsurance program and have expirations through June 19, 2028.
Assurance Letter—In connection with our, Apollo and Credit Suisse AG’s (CS) previously announced transaction, Atlas acquired certain assets of the CS Securitized Products Group and agreed to pay CS a deferred purchase obligation of $3.3 billion. In March 2024, in connection with Atlas concluding its investment management agreement with CS, the deferred purchase obligation amount was reduced to $2.5 billion. In addition, certain strategic investors have made equity commitments to Atlas which therefore obligates these investors for a portion of the deferred purchase obligation. This deferred purchase price is an obligation first of Atlas, and (as a result of additional guarantees provided by AAA, Apollo Asset Management, Inc. (AAM) and AHL) second of AAA, third of AAM, fourth of AHL and fifth of AARe. AARe and AAM each issued an assurance letter to CS to guarantee the full amount. Our guarantees are not probable of payment; therefore, no liabilities have been recorded for the guarantees on the condensed consolidated financial statements.
Notes to Condensed Consolidated Financial Statements (Unaudited)
13. Segment Information
We operate our core business strategies through one reportable segment. We conduct our retirement services business through entities domiciled in the US and Bermuda and our revenues are similarly generated primarily in the US and Bermuda. Our CEO is the Chief Operating Decision Maker (CODM), who is also solely responsible for decisions related to the allocation of resources on a company-wide basis. For determining the allocation of resources, the CODM reviews the Company’s performance based on its key measure of condensed consolidated net income to evaluate income generated and determine allocation of resources, among other measures.
Measures that the CODM reviews also include the significant expenses of cost of funds, other operating expenses, and interest and other financing costs that each exclude the proportionate share associated with noncontrolling interests. Cost of funds reflect the cost of crediting on both deferred annuities and institutional products, as well as other liability costs, net of premium from life and life-contingent products and other revenues. Certain expenses within cost of funds, notably future policy and other policy benefits, are partially or fully offset in the presentation of cost of funds with inflows of premium and other fee-related revenues; as a result, other liability costs equal to the amount of premium from life and life-contingent products are added back in the reconciliation below to reflect the expense amount excluded from cost of funds. Other operating expenses consist primarily of employee compensation and general operating costs of the business. Interest and other financing costs consist primarily of preferred stock dividends and interest expense on our debt issuances, as well as other financing.
Additionally, total condensed consolidated assets is the only measure of segment assets that the CODM uses to determine allocation of resources.
The reconciliation of total condensed consolidated revenue to total condensed consolidated net income is as follows:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Revenues
$
5,359
$
4,664
$
9,545
$
10,385
Less:
Cost of funds
2,470
1,880
4,680
3,603
Other operating expenses
109
116
225
232
Interest and other financing costs
132
119
262
210
Other liability costs equal to the amount of premium
107
673
234
774
Other segment items1
1,889
849
2,558
2,757
Income before income taxes
652
1,027
1,586
2,809
Income tax expense (benefit)
(34)
161
141
468
Net income
$
686
$
866
$
1,445
$
2,341
1 Other segment items reflect the difference between revenues and significant segment expenses and include the impact of fair value accounting for market risk benefits, embedded derivative remeasurement, the amortization of purchased options on fixed indexed annuities and noncontrolling interests.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
We are a leading financial services company that specializes in issuing, reinsuring and acquiring retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs. AGM is the beneficial owner of 100% of our common stock and controls all of the voting power to elect members to our board of directors. We focus on generating spread income by combining our two core competencies of (1) sourcing long-term, persistent liabilities and (2) using the global scale and reach of Apollo’s asset management business to actively source or originate assets with our preferred risk and return characteristics. Our steady and significant base of earnings generates capital that we opportunistically invest across our business to source attractively priced liabilities and capitalize on opportunities.
We have established a significant base of earnings and, as of June 30, 2025, 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 7.4 year weighted-average life of our net reserve liabilities. 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 $405.3 billion as of June 30, 2025. For the six months ended June 30, 2025, we generated an annualized net investment spread of 1.62%.
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:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Retail
$
7,256
$
8,938
$
16,738
$
18,601
Flow reinsurance
2,031
1,210
6,964
3,600
Funding agreements1
11,707
5,970
22,851
14,011
Pension group annuities
1
577
5
577
Other2
237
—
237
—
Gross organic inflows
21,232
16,695
46,795
36,789
Gross inorganic inflows
—
—
—
—
Total gross inflows
21,232
16,695
46,795
36,789
Gross outflows3
(7,230)
(10,140)
(15,622)
(18,175)
Net flows
$
14,002
$
6,555
$
31,173
$
18,614
Inflows attributable to Athene
$
15,838
$
10,840
$
35,956
$
25,431
Inflows attributable to ACRA noncontrolling interests
5,019
4,824
9,975
9,261
Inflows ceded to third-party reinsurers
375
1,031
864
2,097
Total gross inflows
$
21,232
$
16,695
$
46,795
$
36,789
Outflows attributable to Athene4
$
(5,813)
$
(8,627)
$
(12,830)
$
(15,375)
Outflows attributable to ACRA noncontrolling interests
(1,417)
(1,513)
(2,792)
(2,800)
Total gross outflows3
$
(7,230)
$
(10,140)
$
(15,622)
$
(18,175)
1 Funding agreements are comprised of funding agreements issued under our FABN program, secured and other funding agreements, which include our FABR program and direct funding agreements, funding agreements issued to the FHLB and long-term repurchase agreements.
2 Other inflows include guaranteed investment and group annuity contracts issued in connection with defined contribution plans.
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.
4 Quarter-to-date and year-to-date 2025 outflows exclude maturities of long-term repurchase agreements of $1.1 billion, which may be renewed upon joint agreement of the parties based on a variety of factors.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our organic channels, including retail, flow reinsurance, institutional and other products, provided gross inflows of $46.8 billion and $36.8 billion for the six months ended June 30, 2025 and 2024, respectively, which were underwritten to attractive returns. Gross organic inflows increased $10.0 billion, or 27% from the prior year, reflecting the strength of our multi-channel distribution platform and our ability to quickly pivot into optimal and profitable channels as opportunities arise. Withdrawals on our 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 (collectively, gross outflows), in the aggregate were $15.6 billion and $18.2 billion for the six months ended June 30, 2025 and 2024, respectively. The decrease in gross outflows of $2.6 billion was primarily driven by a decrease in funding agreement maturities in 2025 and a decrease in outflows related to policies underlying certain reinsurance blocks compared to 2024, partially offset by an increase in retail annuity policies which have reached the end of the surrender charge period in a higher rate environment. We believe that our credit profile, current product offerings and product design capabilities, as well as our reputation as both a seasoned funding agreement issuer and a reliable pension group annuity counterparty, will continue to enable us to grow our existing organic channels and source additional volumes of profitably underwritten liabilities in various market environments. We intend to continue to grow organically by expanding each of our retail, flow reinsurance, institutional and other distribution channels. We believe that we have the right people, infrastructure, scale and capital discipline to position us for continued growth.
Within our retail channel, we had fixed annuity sales of $16.7 billion and $18.6 billion for the six months ended June 30, 2025 and 2024, respectively. The decrease in our retail channel was primarily driven by a decrease in the sales of our multi-year guaranteed annuity (MYGA) products. Overall sales were strong across our bank, broker-dealer and independent marketing organization (IMO) channels, exhibiting strong sales execution, the current rate environment, growing product offerings and our continued expansion into large financial institutions. We have maintained our disciplined approach to pricing and our targeted underwritten returns. We aim to continue to grow our retail channel by deepening our relationships with our approximately 41 IMOs and with our network of 17 banks and 158 broker-dealers, collectively representing approximately 146,000 independent agents. 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. We believe this can support sales growth at our targeted returns from increased volumes via existing IMO relationships and allow continued expansion of our bank and broker-dealer channels.
Within our flow reinsurance channel, we target reinsurance business consistent with our preferred liability characteristics, which provides us another channel to source liabilities with attractive crediting rates. We generated inflows through our flow reinsurance channel of $7.0 billion and $3.6 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in our flow reinsurance channel from 2024 was driven by record volumes primarily attributable to a strategic opportunity with a US partner at attractive returns, as well as strong volume from our Asia Pacific partners. We continue to expand our presence in Asia with increased partnerships and growing product offerings. 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 $22.9 billion and $14.6 billion for the six months ended June 30, 2025 and 2024, 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 $22.9 billion and $14.0 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in our funding agreement channel from 2024 was driven by record inflows with diversified activity across sub-channels. Funding agreement inflows for the six months ended June 30, 2025 consisted of $7.6 billion of FABN issuances, $6.0 billion of FABR issuances, $2.4 billion of direct funding agreements, $5.7 billion of FHLB issuances and $1.2 billion of long-term repurchase agreement issuances. As of June 30, 2025, we had funding agreements outstanding of $30.4 billion under our FABN program, $18.0 billion under our FABR program, $5.2 billion of direct funding agreements, $21.0 billion with the FHLB and $2.7 billion of long-term repurchase agreements. We issued group annuity contracts in the aggregate principal amount of $5 million and $577 million during the six months ended June 30, 2025 and 2024. The pension group annuity channel continues to be impacted by the competitive environment and litigation against certain of our pension group annuity clients. 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 535,000 plan participants as of June 30, 2025. We expect to grow our institutional channel by continuing to engage in pension group annuity transactions and programmatic issuances of funding agreements.
Within our other channel, inflows include guaranteed investment and group annuity contracts issued in connection with defined contribution plans. We generated inflows through our other channel of $237 million and $0 million for the six months ended June 30, 2025 and 2024, respectively. The increase in our other channel from 2024 was driven by the development of new retirement products within new markets in 2025 to provide solutions to help meet the growing retirement need.
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. 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.
To support growth strategies and capital deployment opportunities, we established ACRA 1 as a long-duration, on-demand capital vehicle. ALRe directly owns 37% of the economic interests in ACRA 1 and all of ACRA 1’s voting interests, with ADIP I, a series of funds managed by
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Apollo, owning the remaining 63% of the economic interests. During the commitment period, ACRA 1 participated in certain transactions by drawing a portion of the required capital for such transactions from third-party investors equal to ADIP I’s proportionate economic interests in ACRA 1. The commitment period for ACRA 1 expired in August 2023.
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. ALRe directly owns 37% of the economic interests in ACRA 2 and all of ACRA 2’s voting interests, with ADIP II, a fund managed by Apollo, owning the remaining 63% of the economic interests. ACRA 2 participates in certain transactions by drawing a portion of the required capital for such transactions from third-party investors equal to ADIP II’s proportionate economic interests in ACRA 2.
These stockholder-friendly, strategic capital solutions allow us the flexibility to simultaneously deploy capital across multiple accretive avenues, while maintaining a strong financial position.
Executing our growth strategy requires that we have sufficient capital available to deploy. We believe that we have significant capital available to support our growth aspirations. As of June 30, 2025, we estimate that we had approximately $8.7 billion in capital available to deploy, consisting of approximately $3.1 billion in excess equity capital, $2.4 billion in untapped leverage capacity (assuming an adjusted leverage ratio of not more than 30%, subject to maintaining a sufficient level of capital required to maintain our desired financial strength ratings from rating agencies), and $3.2 billion in available undrawn capital at ACRA.
Industry Trends and Competition
Economic and Market Conditions
As a leading financial services company specializing in retirement services, we are affected by the condition of global financial markets and the economy. Price fluctuations within equity, credit, commodity and foreign exchange markets, as well as interest rates and global inflation, which may be volatile and mixed across geographies, can significantly impact the performance of our business, including, but not limited to, the valuation of investments, and related income we may recognize.
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 ongoing uncertainty regarding trade policy poses a downside risk to the current economic outlook, with lower growth and higher inflationary pressures increasing the risk of a stagflationary environment. Tariffs, which are inflationary in nature, remain in place and may have a negative impact on Gross Domestic Product (GDP) growth. The potential impact of tariffs on corporate earnings remains uncertain and will depend on the duration and outcome of related trade negotiations.
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. US inflation remains elevated with the US Bureau of Labor Statistics reporting the annual US inflation rate at 2.7% as of June 30, 2025, compared to 2.4% as of March 31, 2025. The US Federal Reserve finished the quarter with a benchmark interest rate target range of 4.25% to 4.50%, unchanged from its December 2024 meeting.
Equity market performance was strong during the second quarter of 2025. In the US, the S&P 500 Index increased by 10.6% during the second quarter, following a decrease of 4.6% in the first quarter of 2025. In terms of economic conditions in the US, the Bureau of Economic Analysis reported real GDP increased at an annual rate of 3.0% in the second quarter of 2025, following a contraction of 0.5% in the first quarter of 2025. As of July 2025, the International Monetary Fund estimated the US economy will expand by 1.9% in 2025 and 2.0% in 2026. The US Bureau of Labor Statistics reported the US unemployment rate decreased to 4.1% as of June 30, 2025, compared to 4.2% as of March 31, 2025. Oil finished the second quarter of 2025 down 8.9% from the first quarter of 2025.
Foreign exchange rates can materially impact the valuations of our investments and liabilities that are denominated in currencies other than the US dollar. The US dollar weakened in the second quarter of 2025 compared to the euro and Japanese yen. Relative to the US dollar, the euro appreciated 9.0% in the second quarter of 2025, after appreciating 4.5% in the first quarter of 2025. Relative to the US dollar, the Japanese yen appreciated 4.1% in the second quarter of 2025, after appreciating 4.8% in the first quarter of 2025. We generally undertake hedging activities to eliminate or mitigate foreign exchange currency risk.
Interest Rate Environment
Medium and long-term rates experienced some volatility during the second quarter of 2025 before ending the quarter relatively flat, with the US 10-year Treasury yield at 4.24% as of June 30, 2025 compared to 4.23% as of March 31, 2025. Short-term rates were generally flat during the second quarter of 2025 with the 3-month secured overnight financing rate at 4.29% as of each of June 30, 2025 and March 31, 2025, respectively.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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. If prevailing interest rates were to decline significantly, the yield on our new investment purchases may decline and our investment income from floating rate investments would decrease, while the value of our existing investments may increase.
We address interest rate risk through managing the duration of the liabilities we source with assets we acquire through asset liability management (ALM) modeling. As part of our investment strategy, we purchase floating rate investments, which we expect would perform well in a rising interest rate environment and which we expect would underperform in a declining rate environment. We manage our interest rate risk in a declining rate environment through hedging activity or the issuance of additional floating rate liabilities to lower our overall net floating rate position. As of June 30, 2025, our net invested asset portfolio included $55.9 billion of floating rate investments, or 20% of our net invested assets, and our net reserve liabilities included $40.8 billion of floating rate liabilities at notional, or 15% of our net invested assets, resulting in $15.1 billion of net floating rate assets, or 5% of our net invested assets.
If prevailing interest rates were to rise, we believe our products would be more attractive to consumers and our sales would likely increase. If prevailing interest rates were to decline, it is likely that our products would be less attractive to consumers and our sales would likely decrease. In periods of prolonged low interest rates, the net investment spread may be negatively impacted by reduced investment income to the extent that we are unable to adequately reduce policyholder crediting rates due to policyholder guarantees in the form of minimum crediting rates or otherwise due to market conditions. Our policyholder account balances include deferred annuities, indexed annuities, funding agreements and other investment-type contracts, the latter of which is comprised of immediate annuities without significant mortality risk (including pension group annuities without life contingencies) and assumed endowments without significant mortality risks. 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 at renewal, our willingness to do so may be limited by competitive pressures. See Note 7 – Long-duration Contracts to the condensed consolidated financial statements for our deferred and indexed annuity policyholder account balances by range of guaranteed minimum crediting rates and the related distance to those respective guaranteed minimums. Our funding agreements and other investment-type products provide us little to no discretionary ability to change the rates of interest that determine the amounts payable to the respective policyholder or institution.
See Part I—Item 3. Quantitative and Qualitative Disclosures About Market Risks in this report and Part II—Item 7A. Quantitative and Qualitative Disclosures About Market Risks in our 2024 Annual Report, which include 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. Technological advances and improvements in healthcare are projected to continue to contribute to increasing average life expectancy, and aging individuals must be prepared to fund retirement periods that will last longer than ever before. Further, many working households in the US do not have adequate retirement savings. As a tool for addressing the unmet need for retirement planning, we believe that many Americans have begun to look to tax-efficient savings products with low-risk or guaranteed return features and potential equity market upside. Our tax-efficient savings products are well positioned to meet this increasing customer demand.
Competition
We operate in highly competitive markets. We face a variety of large and small industry participants, including diversified financial institutions, insurance and reinsurance companies and private equity firms. These companies compete in one form or another for the growing pool of retirement assets driven by a number of external factors such as the continued aging of the population and the reduction in safety nets provided by governments and private employers. In the markets in which we operate, scale and the ability to provide value-added services and build long-term relationships are important factors to compete effectively. We believe that our leading presence in the retirement market, diverse range of capabilities and broad distribution network uniquely position us to effectively serve consumers’ increasing demand for retirement solutions, particularly in the fixed annuity market.
According to the Life Insurance and Market Research Association (LIMRA), total annuity market sales in the US were $106.4 billion for the three months ended March 31, 2025, a 0.3% decrease from the same time period in 2024. In the total annuity market, for the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the largest provider of annuities based on sales of $9.5 billion, translating to an 8.9% market share. For the three months ended March 31, 2024, we were the largest provider of annuities based on sales of $9.7 billion, translating to a 9.1% market share.
According to LIMRA, total fixed annuity market sales in the US were $73.7 billion for the three months ended March 31, 2025, a 6.1% decrease from the same time period in 2024. In the total fixed annuity market, for the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the largest provider of fixed annuities based on sales of $9.2 billion, translating to a 12.4% market share. For the three months ended March 31, 2024, we were the largest provider of fixed annuities based on sales of $9.4 billion, translating to a 12.0% market share.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
According to LIMRA, total fixed indexed annuity (FIA) market sales in the US were $27.8 billion for the three months ended March 31, 2025, a 2.8% decrease from the same time period in 2024. For the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the largest provider of FIAs based on sales of $3.4 billion, translating to a 12.1% market share. For the three months ended March 31, 2024, we were the largest provider of FIAs based on sales of $4.2 billion, translating to a 14.5% market share.
According to LIMRA, total registered index-linked annuity (RILA) market sales in the US were $17.4 billion for the three months ended March 31, 2025, a 20.6% increase from the same time period in 2024. For the three months ended March 31, 2025 (the most recent period for which specific market share data is available), we were the eleventh largest provider of RILAs based on sales of $353 million, translating to a 2.0% market share. For the three months ended March 31, 2024, we were the tenth largest provider of RILAs based on sales of $291 million, translating to a 2.0% market share. We believe RILAs represent a significant growth opportunity for Athene.
Key Operating and Non-GAAP Measures
In addition to our results presented in accordance with US GAAP, we present certain financial information that includes non-GAAP measures. Management believes the use of these non-GAAP measures, together with the relevant US GAAP measures, provides information that may enhance an investor’s understanding of our results of operations and the underlying profitability drivers of our business. The majority of these non-GAAP measures are intended to remove from the results of operations the impact of market volatility (other than with respect to alternative investments), which consists of investment gains (losses), net of offsets, and non-operating change in insurance liabilities and related derivatives, both defined below, as well as integration, restructuring, stock compensation and certain other expenses which are not part of our underlying profitability drivers, as such items fluctuate from period to period in a manner inconsistent with these drivers. 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.
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 spread related earnings equals net income 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. Unrealized, allowances and other investment gains and losses are comprised of the fair value adjustments of trading 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. Investment gains and losses are net of offsets related to the market value adjustments (MVA) associated with surrenders or terminations of contracts.
•Non-operating Change in Insurance Liabilities and Related Derivatives
•Change in Fair Values of Derivatives and Embedded Derivatives – FIAs—Consists of impacts related to the fair value accounting for derivatives hedging the FIA index credits and the related embedded derivative liability fluctuations from period to period. The index reserve is measured at fair value for the current period and all periods beyond the current policyholder index term. However, the FIA hedging derivatives are purchased to hedge only the current index period. Upon policyholder renewal at the end of the period, new FIA hedging derivatives are purchased to align with the new term. The difference in duration between the FIA hedging derivatives and the index credit reserves creates a timing difference in earnings. This timing difference of the FIA hedging derivatives and index credit reserves is included as a non-operating adjustment.
We primarily hedge with options that align with the index terms of our FIA products (typically 1–2 years). On an economic basis, we believe this is suitable because policyholder accounts are credited with index performance at the end of each index term. However, because the term of an embedded derivative in an FIA contract is longer-dated, there is a duration mismatch which may lead to mismatches for accounting purposes.
•Non-operating Change in Funding Agreements—Consists of timing differences caused by changes to interest rates on variable funding agreements and funding agreement backed notes and the associated reserve accretion patterns of those contracts. Further included are adjustments for gains associated with our early repurchases of funding agreements.
•Change in Fair Value of Market Risk Benefits—Consists primarily of volatility in capital market inputs used in the measurement at fair value of our market risk benefits, including certain impacts from changes in interest rates, equity returns and implied equity volatilities.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
•Non-operating Change in Liability for Future Policy Benefits—Consists of the non-economic loss incurred at issuance for certain pension group annuities and other payout annuities with life contingencies when valuation interest rates prescribed by US GAAP are lower than the net investment earned rates, adjusted for profit, assumed in pricing. 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.
We consider these adjustments to be meaningful adjustments to net income available to AHL common stockholder for the reasons discussed in greater detail above. Accordingly, we believe using a measure which excludes the impact of these items is useful in analyzing our business performance and the trends in our results of operations. Together with net income 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 available to AHL common stockholder.
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 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.
Net investment earned rate is a non-GAAP measure we use to evaluate the performance of our net invested assets. Net investment earned rate is computed as the income from our net invested assets divided by the average net invested assets, for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized. 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. We include the income and assets supporting our change in fair value of reinsurance assets by evaluating the underlying investments of the funds withheld at interest receivables and we include the net investment income from those underlying investments which does not correspond to the US GAAP presentation of change in fair value of reinsurance assets. We exclude the income and assets on business related to ceded reinsurance transactions. We believe the adjustments for reinsurance provide a net investment earned rate on the assets for which we have economic exposure. We believe a measure like net investment earned rate is useful in analyzing the trends of our core business operations, profitability and pricing discipline. While we believe net investment earned rate is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for net investment income presented under US GAAP.
Cost of funds includes liability costs related to cost of crediting on 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 noncontrolling interests. Cost of crediting on deferred annuities is the interest credited to the policyholders on our fixed strategies, as well as the option costs on the indexed annuity strategies. With respect to FIAs, the cost of providing index credits includes the expenses incurred to fund the annual index credits, and where applicable, minimum guaranteed interest credited. Cost of crediting on institutional products is comprised of (1) pension group annuity costs, including interest credited, benefit payments and other reserve changes, net of premiums received when issued, and (2) funding agreement costs, including the interest payments and other reserve changes. Additionally, cost of crediting includes forward points gains and losses on foreign exchange derivative hedges. Other liability costs include DAC, DSI and VOBA amortization, certain market risk benefit costs, the cost of liabilities on products other than deferred annuities and institutional products, premiums and certain product charges and other revenues. We include the costs related to business added through assumed reinsurance transactions and exclude the costs on business related to ceded reinsurance transactions. Cost of funds is computed as the total liability costs divided by the average net invested assets for the relevant period. To enhance the ability to analyze these measures across periods, interim periods are annualized. We believe a measure like cost of funds is useful in analyzing the trends of our core business operations, profitability and pricing discipline. While we believe cost of funds is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for total benefits and expenses presented under US GAAP.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Other Operating Expenses
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. We believe a measure like other operating expenses is useful in analyzing the trends of our core business operations and profitability. While we believe other operating expenses is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for policy and other operating expenses presented under US GAAP.
Adjusted Leverage Ratio
Adjusted leverage 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 leverage ratio is calculated as total debt at notional value adjusted to exclude 50% of the notional value of subordinated debt as an equity credit plus 50% of the notional value of our preferred stock divided by adjusted capitalization. Adjusted capitalization includes our adjusted AHL common stockholder’s equity and the notional value of our preferred stock and total 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. These adjustments fluctuate period to period in a manner inconsistent with our underlying profitability drivers as the majority of such fluctuation is related to the market volatility of the unrealized gains and losses associated with our AFS securities, reinsurance assets and mortgage loans. 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. However, we believe the adjustments to stockholders’ equity and debt are significant to gaining an understanding of our capitalization, debt and preferred stock utilization and overall leverage capacity, because they provide insight into how rating agencies measure our capitalization, which is a consideration in how we manage our leverage capacity.
Net Invested Assets
In managing our business, we analyze net invested assets, which does not correspond to total investments, including investments in related parties, as disclosed in our condensed consolidated financial statements and notes thereto. Net invested assets represent the investments that directly back our net reserve liabilities, as well as surplus assets. Net invested assets is used in the computation of net investment earned rate, which allows us to analyze the profitability of our investment portfolio. Net invested assets include (a) total investments on the condensed 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. Net invested assets exclude the derivative collateral offsetting the related cash positions. We include the underlying investments supporting our assumed funds withheld and modco agreements and exclude the underlying investments related to ceded reinsurance transactions in our net invested assets calculation in order to match the assets with the income received. We believe the adjustments for reinsurance provide a view of the assets for which we have economic exposure. Net invested assets include our proportionate share of ACRA investments, based on our economic ownership, but do not include the proportionate share of investments associated with the noncontrolling interests. Our net invested assets are averaged over the number of quarters in the relevant period to compute our net investment earned rate for such period. While we believe net invested assets is a meaningful financial metric and enhances our understanding of the underlying drivers of our investment portfolio, it should not be used as a substitute for total investments, including related parties, presented under US GAAP.
Net Reserve Liabilities
In managing our business, we also analyze net reserve liabilities, which does not correspond to total liabilities as disclosed in our condensed consolidated financial statements and notes thereto. Net reserve liabilities represent our policyholder liability obligations net of reinsurance and are used to analyze the costs of our liabilities. Net reserve liabilities include (a) interest sensitive contract liabilities, (b) future policy benefits, (c) net market risk benefits, (d) long-term repurchase obligations, (e) dividends payable to policyholders and (f) other policy claims and benefits, offset by reinsurance recoverable, excluding policy loans ceded. Net reserve liabilities include our proportionate share of ACRA reserve liabilities, based on our economic ownership, but do not include the proportionate share of reserve liabilities associated with the noncontrolling interests. Net reserve liabilities are net of the ceded liabilities to third-party reinsurers as the costs of the liabilities are passed to such reinsurers and, therefore, we have no net economic exposure to such liabilities, assuming our reinsurance counterparties perform under our agreements. For such transactions, US GAAP requires the ceded liabilities and related reinsurance recoverables to continue to be recorded in our consolidated financial statements despite the transfer of economic risk to the counterparty in connection with the reinsurance transaction. We include the underlying liabilities assumed through modco reinsurance agreements in our net reserve liabilities calculation in order to match the liabilities with the expenses incurred. While we believe net reserve liabilities is a meaningful financial metric and enhances our understanding of the underlying profitability drivers of our business, it should not be used as a substitute for total liabilities presented under US GAAP.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 annuities and FIAs and align with the LIMRA definition of all money paid into an individual annuity, including money paid into new contracts with initial purchase occurring in the specified period and existing contracts with initial purchase occurring prior to the specified period (excluding internal transfers). We believe sales is a meaningful metric that enhances our understanding of our business performance and is not the same as premiums presented in our condensed consolidated statements of income.
Results of Operations
The following summarizes the condensed consolidated results of operations:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Revenues
$
5,359
$
4,664
$
9,545
$
10,385
Benefits and expenses
4,707
3,637
7,959
7,576
Income before income taxes
652
1,027
1,586
2,809
Income tax expense (benefit)
(34)
161
141
468
Net income
686
866
1,445
2,341
Less: Net income attributable to noncontrolling interests
222
237
516
520
Net income attributable to Athene Holding Ltd. stockholders
464
629
929
1,821
Less: Preferred stock dividends
45
46
90
91
Add: Preferred stock redemption
84
—
84
—
Net income available to Athene Holding Ltd. common stockholder
$
503
$
583
$
923
$
1,730
Three Months Ended June 30, 2025Compared to the Three Months Ended June 30, 2024
In this section, references to 2025 refer to the three months ended June 30, 2025 and references to 2024 refer to the three months ended June 30, 2024.
Net Income Available to Athene Holding Ltd. Common Stockholder
Net income available to Athene Holding Ltd. common stockholder decreased by $80 million, or 14%, to $503 million in 2025 from $583 million in 2024. The decrease in net income available to Athene Holding Ltd. common stockholder was primarily driven by a $1.1 billion increase in benefits and expenses, partially offset by a $695 million increase in revenues, a $195 million decrease in income tax expense and an $84 million increase from our preferred stock redemption.
Revenues
Revenues increased by $695 million to $5.4 billion in 2025 from $4.7 billion in 2024. The increase was primarily driven by an increase in net investment income, an increase in VIE investment related gains (losses) and an increase in investment related gains (losses), partially offset by a decrease in premiums.
Net investment income increased by $920 million to $4.4 billion in 2025 from $3.5 billion in 2024, primarily driven by significant growth in our investment portfolio attributable to strong net flows during the previous twelve months, higher rates on new deployment in comparison to our existing portfolio related to the higher interest rate environment, earlier deployment into assets during the quarter compared to 2024 and more favorable investment fund performance in 2025. These impacts were partially offset by lower floating rate income and higher investment management fees driven by the significant growth in our investment portfolio.
VIE investment related gains (losses) increased by $162 million to $468 million in 2025 from $306 million in 2024, primarily driven by growth and investment performance within AAA related to favorable returns on the underlying assets as well as underperformance from certain investment funds held in VIEs in 2024 that were subsequently deconsolidated.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Investment related gains (losses) increased by $129 million to $(5) million in 2025 from $(134) million in 2024, primarily driven by a favorable change in fair value of FIA hedging derivatives, reinsurance assets, trading securities and mortgage loans, partially offset by unfavorable net foreign exchange impacts and an increase in realized losses on AFS securities. The change in fair value of FIA hedging derivatives increased $758 million, primarily driven by the favorable performance of the equity indices upon which our call options are based. The largest percentage of our call options are based on the S&P 500 Index, which increased 10.6% in 2025, compared to an increase of 3.9% in 2024. The change in fair value of reinsurance assets increased $153 million, the change in fair value of trading securities increased $96 million and the change in fair value of mortgage loans increased $91 million, primarily driven by a decrease in US Treasury rates in 2025 compared to an increase in 2024. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in 2025 compared to 2024, including the impact from derivatives not designated as a hedge where the foreign exchange impact on the related asset is reported through AOCI.
Premiums decreased by $566 million to $107 million in 2025 from $673 million in 2024, primarily driven by a $576 milliondecrease in pension group annuity premiums compared to 2024.
Benefits and Expenses
Benefits and expenses increased by $1.1 billion to $4.7 billion in 2025 from $3.6 billion in 2024. The increase was primarily driven by an increase in interest sensitive contract benefits, an increase in the amortization of DAC, DSI and VOBA and an increase in policy and other operating expenses, partially offset by a decrease in future policy and other policy benefits and a decrease in market risk benefits remeasurement (gains) losses.
Interest sensitive contract benefits increased by $1.6 billion to $3.4 billion in 2025 from $1.8 billion in 2024, primarily driven by an increase in the change in our FIA reserves, significant growth in our deferred annuity and funding agreement blocks of business, higher rates on new deferred annuity and funding agreement issuances in comparison to our existing blocks of business and earlier origination of new business within the quarter compared to 2024. These impacts were partially offset by lower rates on floating rate funding agreements. The change in our FIA reserves includes the impact from changes in the fair value of FIA embedded derivatives. The increase in the change in fair value of FIA embedded derivatives of $1.1 billion was primarily due to the performance of the equity indices to which our FIA policies are linked. The largest percentage of our FIA policies are linked to the S&P 500 Index, which increased 10.6% in 2025, compared to an increase of 3.9% in 2024. The change in fair value of FIA embedded derivatives was also driven by the unfavorable change in discount rates used in our embedded derivative calculations as 2025 experienced a decrease in discount rates compared to an increase in 2024.
Amortization of DAC, DSI and VOBA increased by $65 million to $292 million in 2025 from $227 million in 2024, primarily driven by an increase in acquisition costs that are deferred and amortized due to strong growth in our deferred annuity business.
Policy and other operating expenses increased by $64 million to $571 million in 2025 from $507 million in 2024, primarily driven by an increase in interest expense and policy acquisition expenses related to significant growth. The increase in interest expense was primarily due to an increase in host accretion on business ceded to Catalina, as well as interest related to additional issuances of long-term debt in the fourth quarter of 2024 and second quarter of 2025.
Future policy and other policy benefits decreased by $568 million to $527 million in 2025 from $1.1 billion in 2024, primarily driven by a $576 milliondecrease in pension group annuity obligations compared to 2024.
Market risk benefits remeasurement (gains) losses decreased by $95 million to $(111) million in 2025 from $(16) million in 2024. The larger gains in 2025 compared to 2024 were primarily driven by a favorable change in the fair value of market risk benefits. The change in fair value of market risk benefits was $60 million favorable due to an increase in risk-free discount rates across the long end of the curve compared to 2024, which is used in the fair value measurement of the liability for market risk benefits, and $42 million favorable related to favorable equity market performance compared to 2024.
Income Tax Expense (Benefit)
Income tax expense decreased by $195 million to $(34) million in 2025 from $161 million in 2024, primarily driven by a decrease in pretax income subject to US income tax, and impacts from the Bermuda Corporate Income Tax (Bermuda CIT) that were not present in 2024. Our effective tax rate in the second quarter of 2025 was (5)% compared to 16% in 2024.
Preferred Stock Redemption
Preferred stock redemption increased by $84 million to $84 million in 2025 from $0 million in 2024 driven by the redemption of our Series C preferred stock at par value, which was below our carrying value of $684 million.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
In this section, references to 2025 refer to the six months ended June 30, 2025 and references to 2024 refer to the six months ended June 30, 2024.
Net Income Available to Athene Holding Ltd. Common Stockholder
Net income available to Athene Holding Ltd. common stockholder decreased by $807 million, or 47%, to $923 million in 2025 from $1.7 billion in 2024. The decrease in net income available to Athene Holding Ltd. common stockholder was primarily driven by an $840 million decrease in revenues and a $383 million increase in benefits and expenses, partially offset by a $327 million decrease in income tax expense and an $84 million increase from our preferred stock redemption.
Revenues
Revenues decreased by $840 million to $9.5 billion in 2025 from $10.4 billion in 2024. The decrease was primarily driven by a decrease in investment related gains (losses) and a decrease in premiums, partially offset by an increase in net investment income and an increase in VIE investment related gains (losses).
Investment related gains (losses) decreased by $2.4 billion to $(833) million in 2025 from $1.5 billion in 2024, primarily driven by unfavorable net foreign exchange impacts, an unfavorable change in fair value of FIA hedging derivatives and an increase in realized losses on AFS securities, partially offset by the favorable change in fair value of mortgage loans, reinsurance assets and trading securities. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in 2025 compared to 2024, including the impact from derivatives not designated as a hedge where the foreign exchange impact on the related asset is reported through AOCI. The change in fair value of FIA hedging derivatives decreased $1.9 billion, primarily driven by the less favorable performance of the equity indices upon which our call options are based.The largest percentage of our call options are based on the S&P 500 Index, which increased 5.5% in 2025, compared to an increase of 14.5% in 2024. The change in fair value of mortgage loans increased $1.0 billion, the change in fair value of reinsurance assets increased $386 million and the change in fair value of trading securities increased $131 million primarily driven by a decrease in US Treasury rates in 2025 compared to an increase in 2024.
Premiums decreased by $540 million to $234 million in 2025 from $774 million in 2024, primarily driven by a $572 million decrease in pension group annuity premiums, partially offset by an increase in payout premiums compared to 2024.
Net investment income increased by $1.6 billion to $8.4 billion in 2025 from $6.8 billion in 2024, primarily driven by significant growth in our investment portfolio attributable to strong net flows during the previous twelve months, higher rates on new deployment in comparison to our existing portfolio related to the higher interest rate environment, earlier deployment into assets during the year compared to 2024 and more favorable investment fund performance in 2025. These impacts were partially offset by lower floating rate income and higher investment management fees driven by the significant growth in our investment portfolio.
VIE investment related gains (losses) increased by $378 million to $1.0 billion in 2025 from $640 million in 2024, primarily driven by growth and investment performance within AAA related to favorable returns on the underlying assets, favorable returns from A-A Onshore Fund, LLC, a favorable change in the fair value of mortgage loans held in VIEs related to a decrease in US Treasury rates in 2025 compared to an increase in 2024 and underperformance from certain investment funds held in VIEs in 2024 that were subsequently deconsolidated.
Benefits and Expenses
Benefits and expenses increased by $383 million to $8.0 billion in 2025 from $7.6 billion in 2024. The increase was primarily driven by an increase in market risk benefits remeasurement (gains) losses, an increase in interest sensitive contract benefits, an increase in policy and other operating expenses and an increase in the amortization of DAC, DSI and VOBA, partially offset by a decrease in future policy and other policy benefits.
Market risk benefits remeasurement (gains) losses increased by $444 million to $274 million in 2025 from $(170) million in 2024. The losses in 2025 compared to gains in 2024 were primarily driven by an unfavorable change in the fair value of market risk benefits. The change in fair value of market risk benefits was $357 million unfavorable due to a decrease in risk-free discount rates across the long end of the curve compared to 2024, which is used in the fair value measurement of the liability for market risk benefits, and $81 million unfavorable related to less favorable equity market performance compared to 2024.
Interest sensitive contract benefits increased by $214 million to $4.9 billion in 2025 from $4.7 billion in 2024, primarily driven by significant growth in our deferred annuity and funding agreement blocks of business, higher rates on new deferred annuity and funding agreement issuances in comparison to our existing blocks of business and earlier origination of new business within the year compared to 2024. These impacts were partially offset by a decrease in the change in our FIA reserves and lower rates on floating rate funding agreements. The change in our FIA reserves includes the impact from changes in the fair value of FIA embedded derivatives. The decrease in the change in fair value of FIA embedded derivatives of $1.1 billion was primarily due to the performance of the equity indices to which our FIA policies are linked. The largest percentage of our FIA policies are linked to the S&P 500 Index, which increased 5.5% in 2025, compared to an increase of 14.5% in 2024. The change in fair value of FIA embedded derivatives was also driven by the favorable impact of rates on policyholder projected benefits.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
These impacts were partially offset by the unfavorable change in discount rates used in our embedded derivative calculations as 2025 experienced a decrease in discount rates compared to an increase in 2024.
Policy and other operating expenses increased by $170 million to $1.1 billion in 2025 from $966 million in 2024, primarily driven by an increase in interest expense and policy acquisition expenses related to significant growth. The increase in interest expense was primarily due to an increase in host accretion on business ceded to Catalina, as well as interest related to additional issuances of long-term debt in the fourth quarter of 2024 and second quarter of 2025.
Amortization of DAC, DSI and VOBA increased by $125 million to $559 million in 2025 from $434 million in 2024, primarily driven by an increase in acquisition costs that are deferred and amortized due to strong growth in our deferred annuity business.
Future policy and other policy benefits decreased by $570 million to $1.1 billion in 2025 from $1.6 billion in 2024, primarily driven by a $572 million decrease in pension group annuity obligations compared to 2024.
Income Tax Expense (Benefit)
Income tax expense decreased by $327 million to $141 million in 2025 from $468 million in 2024, primarily driven by a decrease in pretax income subject to US income tax, and impacts from the Bermuda CIT that were not present in 2024. Our effective tax rate in 2025 was 9% compared to 17% in 2024.
Preferred stock redemption increased by $84 million to $84 million in 2025 from $0 million in 2024 driven by the redemption of our Series C preferred stock at par value, which was below our carrying value of $684 million.
Summary of Non-GAAP Earnings
The following summarizes our spread related earnings:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Fixed income and other net investment income
$
3,180
$
2,635
$
6,096
$
5,090
Alternative net investment income
319
168
634
434
Net investment earnings
3,499
2,803
6,730
5,524
Strategic capital management fees
32
24
61
49
Cost of funds
(2,470)
(1,880)
(4,680)
(3,603)
Net investment spread
1,061
947
2,111
1,970
Other operating expenses
(109)
(116)
(225)
(232)
Interest and other financing costs
(132)
(119)
(262)
(210)
Spread related earnings
$
820
$
712
$
1,624
$
1,528
Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024
In this section, references to 2025 refer to the three months ended June 30, 2025 and references to 2024 refer to the three months ended June 30, 2024.
Spread Related Earnings
Spread related earnings increased by $108 million, or 15%, to $820 million in 2025 from $712 million in 2024. The increase in SRE was primarily driven by an increase in net investment earnings and strategic capital management fees, partially offset by an increase in cost of funds and interest and other financing costs.
Net investment earnings increased by $696 million to $3.5 billion in 2025 from $2.8 billion in 2024, primarily driven by $38.5 billion of growth in our average net invested assets, higher rates on new deployment compared to our existing portfolio related to the higher interest rate environment, earlier deployment into assets during the quarter compared to 2024 and an increase in alternative net investment income, partially offset by lower floating rate income. The increase in alternative net investment income compared to 2024 was primarily driven by more favorable performance within origination and retirement services platforms. The increase in income from origination platforms was mainly attributable to a valuation increase on Wheels in 2025, strong growth from origination partnerships within Aqua Finance, Inc. (Aqua Finance) compared to a valuation decrease in 2024, successful deployment following a capital raise within Apterra Infrastructure Capital, LLC (Apterra) and certain of our other origination platforms reaching scale in 2025. The increase in income from retirement services platforms was primarily related to a valuation increase on Venerable in 2025 related to the announcement of a reinsurance transaction with Corebridge Financial, Inc. (Corebridge), as well as unfavorable returns on our investment in Catalina in 2024 not recurring in 2025 due to the distribution of our Catalina common equity interests to AGM as a dividend in the third quarter of 2024.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Strategic capital management fees increased by $8 million to $32 million in 2025 from $24 million in 2024, primarily driven by additional fees received from ADIP II attributable to strong net flows into ACRA 2 over the previous twelve months.
Cost of funds increased by $590 million to $2.5 billion in 2025 from $1.9 billion in 2024, primarily driven by significant growth in deferred annuity and institutional business, higher rates on new business and runoff of lower rate business compared to existing blocks, earlier origination of new business within the quarter compared to 2024 and a shift in business mix to more institutional business at higher crediting rates. These impacts were partially offset by lower rates on floating rate funding agreements.
Interest and other financing costs increased by $13 million to $132 million in 2025 from $119 million in 2024, primarily driven by higher interest expense related to additional issuances of long-term debt in the fourth quarter of 2024 and second quarter of 2025. This was partially offset by a lower average short-term repurchase agreement balance outstanding in 2025 compared to 2024.
Net Investment Spread
Three months ended June 30,
2025
2024
Fixed income and other net investment earned rate
4.97
%
4.83
%
Alternative net investment earned rate
9.86
%
5.73
%
Net investment earned rate
5.21
%
4.87
%
Strategic capital management fees
0.05
%
0.04
%
Cost of funds
(3.68)
%
(3.27)
%
Net investment spread
1.58
%
1.64
%
Net investment spread decreased 6 basis points to 1.58% in 2025 from 1.64% in 2024, primarily driven by higher cost of funds, partially offset by a higher net investment earned rate.
Cost of funds increased 41 basis points to 3.68% in 2025 from 3.27% in 2024, primarily driven by higher rates on new business and runoff of lower rate business compared to existing blocks, earlier origination of new business within the quarter compared to 2024 and a shift in business mix to more institutional business at higher crediting rates, partially offset by lower rates on floating rate funding agreements.
Net investment earned rate increased 34 basis points to 5.21% in 2025 from 4.87% in 2024, primarily driven by higher returns in both our fixed income and alternative investment portfolios. Fixed income and other net investment earned rate was 4.97% in 2025, an increase from 4.83% in 2024, primarily driven by higher rates on new deployment compared to our existing portfolio related to the higher interest rate environment and earlier deployment into assets during the quarter compared to 2024, partially offset by lower floating rate income. Alternative net investment earned rate was 9.86% in 2025, an increase from 5.73% in 2024, primarily driven by more favorable performance within origination and retirement services platforms. The higher returns from the origination platforms were mainly attributable to a valuation increase on Wheels in 2025, strong growth from origination partnerships within Aqua Finance compared to a valuation decrease in 2024, successful deployment following a capital raise within Apterra and certain of our other origination platforms reaching scale in 2025. The higher returns from retirement services platforms were primarily related to a valuation increase on Venerable in 2025 related to the announcement of a reinsurance transaction with Corebridge, as well as unfavorable returns on our investment in Catalina in 2024 not recurring in 2025 due to the distribution of our Catalina common equity interests to AGM as a dividend in the third quarter of 2024.
Adjustments to Net Income Available to Athene Holding Ltd. Common Stockholder
The adjustments to net income 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; integration, restructuring and other non-operating expenses; stock compensation expense and the non-operating income tax expense (benefit) related to these adjustments. The decrease in adjustments to net income available to Athene Holding Ltd. common stockholder in 2025 compared to 2024 was primarily driven by a decrease in investment gains (losses), net of offsets and a decrease in non-operating change in insurance liabilities and related derivatives.
Investment gains (losses), net of offsets, decreased $385 million, primarily driven by unfavorable net foreign exchange impacts and an increase in realized losses on AFS securities, partially offset by the favorable changes in fair value of reinsurance assets and mortgage loans. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in 2025 compared to 2024, including the impact from derivatives not designated as a hedge where the foreign exchange impact on the related asset is reported through AOCI. The favorable changes in fair value of reinsurance assets of $78 million and mortgage loans of $61 million were primarily driven by a decrease in US Treasury rates in 2025 compared to an increase in 2024.
Non-operating change in insurance liabilities and related derivatives decreased $54 million, primarily driven by a decrease in net FIA derivatives, partially offset by a favorable change in fair value of market risk benefits. The $99 million unfavorable change in net FIA derivatives was primarily due to the unfavorable change in discount rates used in our embedded derivative calculations as 2025 experienced a
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
decrease in discount rates compared to an increase in 2024. This impact was partially offset by the performance of the equity indices to which our FIA policies are linked. The largest percentage of our FIA policies are linked to the S&P 500 Index, which increased 10.6% in 2025, compared to an increase of 3.9% in 2024. The $55 million favorable change in fair value of market risk benefits was primarily driven by an increase in risk-free discount rates across the long end of the curve compared to 2024, which is used in the fair value measurement of the liability for market risk benefits, and favorable equity market performance compared to 2024.
Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
In this section, references to 2025 refer to the six months ended June 30, 2025 and references to 2024 refer to the six months ended June 30, 2024.
Spread Related Earnings
SRE increased by $96 million, or 6%, to $1.6 billion in 2025 from $1.5 billion in 2024. The increase in SRE was primarily driven by an increase in net investment earnings and strategic capital management fees, partially offset by an increase in cost of funds and interest and other financing costs.
Net investment earnings increased by $1.2 billion to $6.7 billion in 2025 from $5.5 billion in 2024, primarily driven by $36.1 billion of growth in our average net invested assets, higher rates on new deployment compared to our existing portfolio related to the higher interest rate environment, earlier deployment into assets during the year compared to 2024 and an increase in alternative net investment income, partially offset by lower floating rate income. The increase in alternative net investment income compared to 2024 was primarily driven by more favorable performance within origination and retirement services platforms, as well as within equity funds. The increase in income from origination platforms was mainly attributable to strong performance within other origination platforms, including an initial mark from cost to fair value on Atlas and certain other platforms reaching scale in 2025, a valuation increase on Wheels in the second quarter of 2025, strong growth from origination partnerships within Aqua Finance compared to a valuation decrease in 2024 and successful deployment following a capital raise within Apterra in 2025. The increase in income from retirement services platforms was primarily related to a valuation increase on Venerable in 2025 related to the announcement of a reinsurance transaction with Corebridge and unfavorable returns on our investment in Catalina in 2024 not recurring in 2025 due to the distribution of our Catalina common equity interests to AGM as a dividend in the third quarter of 2024, partially offset by increased capital requirements related to expanded solvency requirements impacting the valuation of Athora in 2025.
Strategic capital management fees increased by $12 million to $61 million in 2025 from $49 million in 2024, primarily driven by additional fees received from ADIP II attributable to strong net flows into ACRA 2 over the previous twelve months.
Cost of funds increased by $1.1 billion to $4.7 billion in 2025 from $3.6 billion in 2024, primarily driven by significant growth in deferred annuity and institutional business, higher rates on new business and runoff of lower rate business compared to existing blocks, earlier origination of new business within the year compared to 2024 and a shift in business mix to more institutional business at higher crediting rates. These impacts were partially offset by lower rates on floating rate funding agreements.
Interest and other financing costs increased by $52 million to $262 million in 2025 from $210 million in 2024, primarily driven by higher interest expense related to additional issuances of long-term debt in the fourth quarter of 2024 and second quarter of 2025.
Net Investment Spread
Six months ended June 30,
2025
2024
Fixed income and other net investment earned rate
4.89
%
4.75
%
Alternative net investment earned rate
10.05
%
7.42
%
Net investment earned rate
5.14
%
4.89
%
Strategic capital management fees
0.05
%
0.04
%
Cost of funds
(3.57)
%
(3.19)
%
Net investment spread
1.62
%
1.74
%
Net investment spread decreased 12 basis points to 1.62% in 2025 from 1.74% in 2024, primarily driven by higher cost of funds, partially offset by a higher net investment earned rate.
Cost of funds increased by 38 basis points to 3.57% in 2025, from 3.19% in 2024, primarily driven by higher rates on new business and runoff of lower rate business compared to existing blocks, earlier origination of new business within the year compared to 2024 and a shift in business mix to more institutional business at higher crediting rates, partially offset by lower rates on floating rate funding agreements.
Net investment earned rate increased 25 basis points to 5.14% in 2025 from 4.89% in 2024, primarily driven by higher returns in both our fixed income and alternative investment portfolios. Fixed income and other net investment earned rate was 4.89% in 2025, an increase from 4.75% in 2024, primarily driven by higher rates on new deployment compared to our existing portfolio related to the higher interest rate environment and
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
earlier deployment into assets during the year compared to 2024, partially offset by lower floating rate income. Alternative net investment earned rate was 10.05% in 2025, an increase from 7.42% in 2024, primarily driven by more favorable performance within origination and retirement services platforms, as well as within equity funds. The higher returns from origination platforms were mainly attributable to strong performance within other origination platforms, including an initial mark from cost to fair value on Atlas and certain other platforms reaching scale in 2025, a valuation increase on Wheels in the second quarter of 2025, strong growth from origination partnerships within Aqua Finance compared to a valuation decrease in 2024 and successful deployment following a capital raise within Apterra in 2025. The higher returns from retirement services platforms were primarily related to a valuation increase on Venerable in 2025 related to the announcement of a reinsurance transaction with Corebridge and unfavorable returns on our investment in Catalina in 2024 not recurring in 2025 due to the distribution of our Catalina common equity interests to AGM as a dividend in the third quarter of 2024, partially offset by increased capital requirements related to expanded solvency requirements impacting the valuation of Athora in 2025.
Adjustments to Net Income Available to Athene Holding Ltd. Common Stockholder
The decrease in adjustments to net income available to Athene Holding Ltd. common stockholder in 2025 compared to 2024 was primarily driven by a decrease in non-operating change in insurance liabilities and related derivatives and a decrease in investment gains (losses), net of offsets.
Non-operating change in insurance liabilities and related derivatives decreased $1.1 billion, primarily driven by a decrease in net FIA derivatives and the unfavorable change in fair value of market risk benefits. The $678 million unfavorable change in net FIA derivatives was primarily due to the performance of the equity indices to which our FIA policies are linked. The largest percentage of our FIA policies are linked to the S&P 500 Index, which increased 5.5% in 2025, compared to an increase of 14.5% in 2024. The change in net FIA derivatives was also driven by the unfavorable change in discount rates used in our embedded derivative calculations as 2025 experienced a decrease in discount rates compared to an increase in 2024. These impacts were partially offset by the favorable impact of rates on policyholder projected benefits. The $443 million unfavorable change in fair value of market risk benefits was primarily driven by a decrease in risk-free discount rates across the long end of the curve compared to 2024, which is used in the fair value measurement of the liability for market risk benefits, and less favorable equity market performance compared to 2024.
Investment gains (losses), net of offsets, decreased $212 million, primarily driven by unfavorable net foreign exchange impacts and an increase in realized losses on AFS securities, partially offset by the favorable changes in fair value of mortgage loans and reinsurance assets. The unfavorable net foreign exchange impacts were primarily related to the weakening of the US dollar against foreign currencies in 2025 compared to 2024, including the impact from derivatives not designated as a hedge where the foreign exchange impact on the related asset is reported through AOCI. The favorable changes in fair value of mortgage loans of $904 million and reinsurance assets of $215 million were primarily driven by a decrease in US Treasury rates in 2025 compared to an increase in 2024.
Investment Portfolio
We had total investments, including related parties and consolidated VIEs, of $356.3 billion and $315.0 billion as of June 30, 2025 and December 31, 2024, respectively. Our investment strategy seeks to achieve sustainable risk-adjusted returns through the disciplined management of our investment portfolio against our long-duration liabilities, coupled with the diversification of risk. The investment strategies utilized by our investment manager focus primarily on a buy and hold asset allocation strategy that may be adjusted periodically in response to changing market conditions and the nature of our liability profile. Substantially all of our investment portfolio is managed by Apollo, which provides a full suite of services for our investment portfolio, including direct investment management, asset allocation, mergers and acquisitions asset diligence, and certain operational support services including investment compliance, tax, legal and risk management support. Our relationship with Apollo allows us to take advantage of our generally persistent liability profile by identifying investment opportunities with an emphasis on earning incremental yield by taking measured liquidity and complexity risk rather than assuming incremental credit risk. Apollo’s investment team and credit portfolio managers utilize their deep experience to assist us in sourcing and underwriting complex asset classes. Apollo has selected a diverse array of primarily high-grade fixed income assets including corporate bonds, structured securities and commercial and residential real estate loans, among others. We also maintain holdings in floating rate and less rate-sensitive instruments, including CLOs, non-agency RMBS and various types of structured products. 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 condensed consolidated statements of income includes management fees under our investment management arrangements with Apollo. We incurred management fees, inclusive of base, sub-allocation and performance fees, of $383 million and $304 million, respectively, during the three months ended June 30, 2025 and 2024, and $754 million and $593 million, respectively, during the six months ended June 30, 2025, and 2024. The total amounts we incurred, directly and indirectly, from Apollo and its affiliates were $347 million and $317 million, respectively, for the three months ended June 30, 2025 and 2024, and $730 million and $634 million, respectively, for the six months ended June 30, 2025, and 2024. Such amounts include (1) fees associated with investment management agreements (excluding sub-advisory fees paid to ISG for the benefit of third-party sub-advisors), which include fees charged by Apollo to third-party cedants with respect to assets supporting obligations reinsured to us but exclude fees charged by Apollo to third-party reinsurers supporting ceded obligations, (2) fees associated with fund investments (including those fund investments held by AAA), which include management fees, carried interest (including unrealized but accrued carried interest fees) and other fees on Apollo-managed funds and our other alternative investments and (3) other fees resulting from shared services, advisory and other agreements with Apollo or its affiliates; net of fees incurred directly and indirectly attributable to ACRA, based upon the economic ownership of the noncontrolling interests in ACRA.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our net invested assets, which are those that directly back our net reserve liabilities, as well as surplus assets, were $275.0 billion and $248.6 billion as of June 30, 2025 and December 31, 2024, respectively. Apollo’s knowledge of our funding structure and regulatory requirements allows it to design customized strategies and investments for our portfolio. Apollo manages our asset portfolio within the limits and protocols set forth in our Investment and Credit Risk Policy. Under this policy, we set limits on investments in our portfolio by asset class, such as corporate bonds, emerging markets securities, municipal bonds, non-agency RMBS, CMBS, CLOs, commercial mortgage whole loans and mezzanine loans and investment funds. We also set credit risk limits for exposure to a single issuer, which vary based on the issuer’s ratings. Our strategic investments are also governed by our Strategic Investment Risk Policy which provides for special governance and risk management procedures for these transactions. In addition, our investment portfolio is constrained by its scenario-based capital ratio limits and its liquidity limits.
The following table presents the carrying values of our total investments, including related parties and consolidated VIEs:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Carrying Value
Percentage of Total
Carrying Value
Percentage of Total
Available-for-sale securities, at fair value
$
188,750
53.0
%
$
165,364
52.5
%
Trading securities, at fair value
4,060
1.1
%
1,583
0.5
%
Equity securities, at fair value
1,150
0.3
%
1,290
0.4
%
Mortgage loans, at fair value
77,289
21.7
%
63,239
20.1
%
Investment funds
102
—
%
107
—
%
Policy loans
310
0.1
%
318
0.1
%
Funds withheld at interest
16,998
4.8
%
18,866
6.0
%
Derivative assets
6,901
1.9
%
8,154
2.6
%
Short-term investments
187
0.1
%
447
0.2
%
Other investments
3,364
0.9
%
2,915
0.9
%
Total investments
299,111
83.9
%
262,283
83.3
%
Investments in related parties
Available-for-sale securities, at fair value
21,916
6.2
%
19,127
6.1
%
Trading securities, at fair value
399
0.1
%
573
0.2
%
Equity securities, at fair value
266
0.1
%
234
0.1
%
Mortgage loans, at fair value
1,275
0.4
%
1,297
0.4
%
Investment funds
2,062
0.6
%
1,853
0.6
%
Funds withheld at interest
4,590
1.3
%
5,050
1.6
%
Short-term investments
18
—
%
743
0.2
%
Other investments, at fair value
339
0.1
%
331
0.1
%
Total related party investments
30,865
8.8
%
29,208
9.3
%
Total investments, including related parties
329,976
92.7
%
291,491
92.6
%
Investments of consolidated VIEs
Trading securities, at fair value
3,265
0.9
%
2,301
0.7
%
Mortgage loans, at fair value
2,544
0.7
%
2,579
0.8
%
Investment funds, at fair value
19,348
5.4
%
17,765
5.6
%
Other investments
1,204
0.3
%
884
0.3
%
Total investments of consolidated VIEs
26,361
7.3
%
23,529
7.4
%
Total investments, including related parties and consolidated VIEs
$
356,337
100.0
%
$
315,020
100.0
%
Our total investments, including related parties and consolidated VIEs, were $356.3 billion and $315.0 billion as of June 30, 2025 and December 31, 2024, respectively. The increase was primarily driven by significant growth from gross organic inflows of $46.8 billion in excess of gross liability outflows of $15.6 billion, reinvestment of earnings and unrealized gains on AFS securities during the six months ended June 30, 2025 of $2.9 billion, as well as unrealized gains on mortgage loans, reinsurance assets and trading securities attributable to a decrease in US Treasury rates, partially offset by credit spread widening in 2025. Additionally, total investments, including related parties and consolidated VIEs, increased due to unrealized foreign exchange impacts on foreign denominated assets, the issuance of debt in 2025 and an increase in VIE investments primarily related to an increase in investment funds attributable to favorable performance of the underlying assets within AAA and net contributions from third-party investors into AAA in 2025, partially offset by the deconsolidation of certain VIEs. These impacts were partially offset by a decrease in short term repurchase agreements outstanding and a decrease in derivative assets primarily related to the market impacts on our derivative swaps and forward contracts.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our investment portfolio consists largely of high quality fixed maturity securities, loans and short-term investments, as well as additional opportunistic holdings in investment funds and other instruments, including equity holdings. Fixed maturity securities and loans include publicly issued corporate bonds, government and other sovereign bonds, privately placed corporate bonds and loans, mortgage loans, CMBS, RMBS, CLOs and ABS.
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. 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.
We hold derivatives for economic hedging purposes to reduce our exposure to the cash flow variability of assets and liabilities, equity market risk, foreign exchange risk and interest rate risk. Our primary use of derivative instruments relates to providing the income needed to fund the annual index credits on our FIA products. We primarily use fixed indexed options to economically hedge indexed annuity products that guarantee the return of principal to the policyholder and credit interest based on a percentage of the gain in a specific market index. We also use derivative instruments, such as forward contracts and swaps, to hedge foreign currency exposure resulting from foreign denominated assets and liabilities and to help manage our net floating rate position.
With respect to derivative positions, we transact with highly rated counterparties, and expect the counterparties to fulfill their obligations under the contracts. We generally use industry standard agreements and annexes with bilateral collateral provisions to further reduce counterparty credit exposure.
Related Party Investments
We hold investments in related party assets primarily comprised of AFS securities, trading securities, funds withheld at interest receivables, mortgage loans within our triple net lease investment and investment funds, which primarily include investments over which Apollo can exercise influence. As of June 30, 2025, these investments totaled $51.4 billion, or 12.6% 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 asset origination platforms including Wheels and MidCap Financial. In each case, the underlying collateral, borrower or other credit party is generally unaffiliated with us. The funds withheld at interest related party amount is comprised of the Venerable reinsurance portfolios, which are considered related party even though a significant majority of the underlying assets within the investment portfolios do not have a related party affiliation. Related party investment funds include investments in asset origination and retirement services platforms and investments in Apollo managed funds.
A summary of our related party investments reflecting the nature of the affiliation is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Carrying Value
Percentage of Total Assets
Carrying Value
Percentage of Total Assets
Venerable funds withheld reinsurance portfolio
$
4,590
1.1
%
$
5,050
1.4
%
Securitizations of unaffiliated assets where Apollo is manager
22,208
5.5
%
20,389
5.6
%
Investments in Apollo funds
13,431
3.3
%
12,272
3.4
%
Investments in asset origination platforms
8,509
2.1
%
7,329
2.0
%
Investments in retirement services platforms
2,524
0.6
%
2,249
0.6
%
Other
94
—
%
86
—
%
Total related party investments
$
51,356
12.6
%
$
47,375
13.0
%
As of June 30, 2025, a $4.6 billion funds withheld reinsurance asset with Venerable was included in our US GAAP related party investments. Venerable is a related party due to our minority equity investment in its holding company’s parent, VA Capital. For US GAAP, each funds withheld and modified coinsurance reinsurance portfolio is treated as one asset rather than reporting the underlying investments in the portfolio. 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 June 30, 2025, $33.4 billion, or 12.3% of our total net invested assets were related party investments. Of these, approximately $19.1 billion, or 7.0% of our net invested assets, were structured securities for which Apollo or an affiliated asset origination platform was the manager of the underlying securitization vehicle, but the underlying collateral, borrower or other credit party is generally unaffiliated with us. Related party investments in affiliated companies or Apollo funds represented $14.3 billion, or 5.3% of our net invested assets.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
A summary of our related party net invested assets reflecting the nature of the affiliation is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Net Invested Asset Value
Percentage of Net Invested Assets
Net Invested Asset Value
Percentage of Net Invested Assets
Securitizations of unaffiliated assets where Apollo is manager
$
19,148
7.0
%
$
18,472
7.4
%
Investments in Apollo funds
7,324
2.7
%
7,131
2.9
%
Investments in asset origination platforms
4,607
1.7
%
4,006
1.6
%
Investments in retirement services platforms
2,365
0.9
%
2,285
0.9
%
Total related party net invested assets
$
33,444
12.3
%
$
31,894
12.8
%
A summary of our related party gross invested assets, which includes the proportionate share of investments associated with the ACRA noncontrolling interests, reflecting the nature of the affiliation is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Gross Invested Asset Value
Percentage of Gross Invested Assets
Gross Invested Asset Value
Percentage of Gross Invested Assets
Securitizations of unaffiliated assets where Apollo is manager
$
26,224
7.2
%
$
25,327
7.7
%
Investments in Apollo funds
9,458
2.6
%
9,557
2.9
%
Investments in asset origination platforms
5,867
1.6
%
5,281
1.6
%
Investments in retirement services platforms
2,454
0.7
%
2,374
0.7
%
Total related party gross invested assets
$
44,003
12.1
%
$
42,539
12.9
%
AFS Securities
We invest in AFS securities and attempt to source investments that match our future cash flow needs. However, we may sell any of our investments in advance of maturity to timely satisfy our liabilities as they become due or to respond to a change in the credit profile or other characteristics of the particular investment.
AFS securities are carried at fair value, less allowances for expected credit losses, on our condensed consolidated balance sheets. Changes in fair value of our AFS securities are charged or credited to other comprehensive income (loss), net of tax. 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 condensed consolidated statements of income.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
We maintain a diversified AFS portfolio of corporate fixed maturity securities across industries and issuers and a diversified portfolio of structured securities. The composition of our AFS securities, including related parties, is as follows:
June 30, 2025
December 31, 20241
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
Corporate
Financial - Banking
$
12,033
5.7
%
$
9,391
5.1
%
Financial - Brokerage/asset managers/exchanges
3,276
1.5
%
3,093
1.7
%
Financial - Financial companies
10,367
4.9
%
7,110
3.9
%
Financial - Insurance
9,030
4.3
%
7,878
4.3
%
Financial - Real estate investment trusts
2,753
1.3
%
2,830
1.5
%
Financial - Other
5,410
2.6
%
5,378
2.9
%
Industrial - Basic industry
2,858
1.4
%
2,670
1.4
%
Industrial - Capital goods
2,581
1.2
%
2,626
1.4
%
Industrial - Communications
5,539
2.6
%
5,180
2.8
%
Industrial - Consumer cyclical
5,162
2.5
%
5,492
3.0
%
Industrial - Consumer non-cyclical
7,386
3.5
%
7,658
4.1
%
Industrial - Energy
8,398
4.0
%
7,750
4.2
%
Industrial - Technology
3,004
1.4
%
2,721
1.5
%
Industrial - Transportation
4,354
2.1
%
3,930
2.1
%
Industrial - Other
1,248
0.6
%
1,170
0.6
%
Utility - Electric
11,995
5.7
%
9,462
5.1
%
Utility - Natural gas
1,455
0.7
%
1,416
0.8
%
Utility - Other
283
0.1
%
291
0.2
%
Total corporate
97,132
46.1
%
86,046
46.6
%
Other government-related securities
US government and agencies
9,023
4.3
%
7,151
3.9
%
Foreign governments
1,752
0.8
%
1,568
0.8
%
US state, municipal and political subdivisions
840
0.4
%
921
0.5
%
Total non-structured securities
108,747
51.6
%
95,686
51.8
%
Structured securities
CLO
38,926
18.5
%
35,217
19.1
%
ABS
39,171
18.6
%
34,832
18.9
%
CMBS
13,500
6.4
%
10,741
5.8
%
RMBS
Agency
1,185
0.6
%
1,032
0.6
%
Non-agency
9,137
4.3
%
6,983
3.8
%
Total structured securities
101,919
48.4
%
88,805
48.2
%
Total AFS securities, including related parties
$
210,666
100.0
%
$
184,491
100.0
%
1Prior period amounts have been reclassified to conform with the updated current year presentation.
The fair value of our AFS securities, including related parties, was $210.7 billion and $184.5 billion as of June 30, 2025 and December 31, 2024, respectively. The increase was mainly driven by the deployment of strong gross organic inflows in excess of gross liability outflows, unrealized gains on AFS securities during the six months ended June 30, 2025 of $2.9 billion and unrealized gains related to foreign exchange impacts. The unrealized investment gains were attributable to a decrease in US Treasury rates, partially offset by credit spread widening in 2025, while the unrealized foreign exchange gains were attributable to the weakening of the US dollar against foreign currencies in 2025.
The Securities Valuation Office (SVO) of the National Association of Insurance Commissioners (NAIC) is responsible for the credit quality assessment and valuation of securities owned by state regulated insurance companies. Insurance companies report ownership of securities to the SVO when such securities are eligible for filing on the relevant schedule of the NAIC Financial Statement. The SVO conducts credit analysis on these securities for the purpose of assigning an NAIC designation and/or unit price. Generally, the process for assigning an NAIC designation
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
varies based upon whether a security is considered “filing exempt” (General Designation Process). Subject to certain exceptions, a security is typically considered “filing exempt” if it has been rated by a Nationally Recognized Statistical Rating Organization (NRSRO). For securities that are not “filing exempt,” insurance companies assign temporary designations based upon a subjective evaluation of credit quality. The insurance company generally must then submit the securities to the SVO within 120 days of acquisition to receive an NAIC designation. For securities considered “filing exempt,” the SVO utilizes the NRSRO rating and assigns an NAIC designation based upon the following system:
NAIC designation
NRSRO equivalent rating
1 A-G
AAA/AA/A
2 A-C
BBB
3 A-C
BB
4 A-C
B
5 A-C
CCC
6
CC and lower
An important exception to the General Designation Process occurs in the case of certain loan-backed and structured securities (LBaSS). The NRSRO ratings methodology is focused on the likelihood of recovery of all contractual payments, including principal at par, regardless of an investor’s carrying value. In effect, the NRSRO rating assumes that the holder is the original purchaser at par. In contrast, the SVO’s LBaSS methodology is focused on determining the risk associated with the recovery of the amortized cost of each security. Because the NAIC’s methodology explicitly considers amortized cost and the likelihood of recovery of such amount, we view the NAIC’s methodology as the most appropriate means of evaluating the credit quality of our fixed maturity portfolio since a portion of our holdings were purchased and are carried at significant discounts to par.
The SVO has developed a designation process and provides instruction on modeled LBaSS. For modeled LBaSS, the process is specific to the non-agency RMBS and CMBS asset classes. To establish ratings at the individual security level, the SVO obtains loan-level analysis of each RMBS and CMBS using a selected vendor’s proprietary financial model. The SVO ensures that the vendor has extensive internal quality-control processes in place and the SVO conducts its own quality-control checks of the selected vendor’s valuation process. The SVO has retained the services of Blackrock, Inc. (Blackrock) to model non-agency RMBS and CMBS owned by US insurers for all years presented herein. Blackrock provides five prices (breakpoints), based on each US insurer’s statutory book value price, to utilize in determining the NAIC designation for each modeled LBaSS.
The NAIC designation determines the associated level of risk-based capital that an insurer is required to hold for all securities owned by the insurer. In general, under the modeled LBaSS process, the larger the discount to par value at the time of determination, the higher the NAIC designation the LBaSS will have.
Beginning on January 1, 2025, domestic insurance companies were required to adopt new statutory accounting guidance for the principles-based bond definition. Under the new guidance, certain debt securities, which were formerly treated as bonds, will now be accounted for as non-bond debt securities. These non-bond debt securities are required to be filed with and designated by the NAIC. Effective January 1, 2025, our non-bond debt securities that have not received a designation are presented as “Non-designated” within the NAIC rating tables below. “Non-designated” status is not an indication of the quality of the security.
A summary of our AFS securities, including related parties, by NAIC designation is as follows:
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
A significant majority of our AFS portfolio, 96.7% and 97.0% as of June 30, 2025 and December 31, 2024, respectively, was invested in assets considered investment grade with an NAIC designation of 1 or 2.
A summary of our AFS securities, including related parties, by NRSRO ratings is set forth below:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
NRSRO rating agency designation
AAA/AA/A
$
106,242
50.4
%
$
96,095
52.2
%
BBB
85,035
40.4
%
70,150
38.0
%
Non-rated1
11,250
5.3
%
11,300
6.1
%
Total investment grade
202,527
96.1
%
177,545
96.3
%
BB
3,312
1.6
%
2,722
1.5
%
B
1,380
0.7
%
972
0.5
%
CCC
1,478
0.7
%
1,011
0.5
%
CC and lower
605
0.3
%
791
0.4
%
Non-rated1
1,364
0.6
%
1,450
0.8
%
Total below investment grade
8,139
3.9
%
6,946
3.7
%
Total AFS securities, including related parties
$
210,666
100.0
%
$
184,491
100.0
%
1 Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. With respect to modeled LBaSS, the NAIC designation methodology differs in significant respects from the NRSRO rating methodology.
Consistent with the NAIC Process and Procedures Manual, an NRSRO rating was assigned based on the following criteria: (a) the equivalent S&P rating when the security is rated by one NRSRO; (b) the equivalent S&P rating of the lowest NRSRO when the security is rated by two NRSROs; and (c) the equivalent S&P rating of the second lowest NRSRO when the security is rated by three or more NRSROs. If the lowest two NRSRO ratings are equal, then such rating will be the assigned rating. NRSRO ratings available for the periods presented were S&P, Fitch, Moody’s, DBRS, and Kroll Bond Rating Agency, Inc.
The portion of our AFS portfolio that was considered below investment grade based on NRSRO ratings was 3.9% and 3.7%, as of June 30, 2025 and December 31, 2024, respectively. The primary driver of the difference in the percentage of securities considered below investment grade by NRSRO as compared to the securities considered below investment grade by the NAIC is the difference in methodologies between the NRSRO and NAIC for RMBS due to investments acquired and/or carried at a discount to par value, as previously discussed.
As of June 30, 2025 and December 31, 2024, non-rated securities were comprised 65% and 64%, respectively, of corporate private placement securities for which we have not sought individual ratings from an NRSRO, and 28% and 23%, respectively, of RMBS, many of which were acquired at a discount to par. We rely on internal analysis and designations assigned by the NAIC to evaluate the credit risk of our portfolio. As of each of June 30, 2025 and December 31, 2024, 89% of the non-rated securities were designated NAIC 1 or 2.
Asset-backed Securities– We invest in ABS which are securitized by pools of assets such as consumer loans, automobile loans, student loans, insurance-linked securities, operating cash flows of corporations and cash flows from various types of business equipment. Our ABS holdings were $39.2 billion and $34.8 billion as of June 30, 2025 and December 31, 2024, respectively.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
A summary of our AFS ABS portfolio, including related parties, by NAIC designations and NRSRO quality ratings is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
NAIC designation
1 A-G
$
24,544
62.7
%
$
24,672
70.9
%
2 A-C
13,505
34.5
%
9,336
26.8
%
Total investment grade
38,049
97.2
%
34,008
97.7
%
3 A-C
450
1.2
%
658
1.9
%
4 A-C
56
0.1
%
109
0.3
%
5 A-C
10
—
%
12
—
%
6
18
—
%
45
0.1
%
Non-designated
588
1.5
%
—
—
%
Total below investment grade
1,122
2.8
%
824
2.3
%
Total AFS ABS, including related parties
$
39,171
100.0
%
$
34,832
100.0
%
NRSRO rating agency designation
AAA/AA/A
$
24,327
62.1
%
$
24,532
70.5
%
BBB
14,221
36.3
%
9,443
27.1
%
Non-rated1
60
0.2
%
64
0.2
%
Total investment grade
38,608
98.6
%
34,039
97.8
%
BB
460
1.2
%
641
1.8
%
B
45
0.1
%
95
0.3
%
CCC
10
—
%
12
—
%
CC and lower
14
—
%
13
—
%
Non-rated1
34
0.1
%
32
0.1
%
Total below investment grade
563
1.4
%
793
2.2
%
Total AFS ABS, including related parties
$
39,171
100.0
%
$
34,832
100.0
%
1Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. The NAIC designation methodology differs in significant respects from the NRSRO rating methodology.
As of June 30, 2025 and December 31, 2024, a substantial majority of our AFS ABS portfolio, 97.2% and 97.7%, respectively, was invested in assets considered to be investment grade based upon the application of the NAIC’s methodology, while 98.6% and 97.8% of securities as of June 30, 2025 and December 31, 2024, respectively, were considered investment grade based upon NRSRO ratings. The increase in our ABS portfolio was mainly driven by the deployment of strong gross organic inflows in excess of gross liability outflows, unrealized gains related to foreign exchange impacts and unrealized gains on ABS securities during the six months ended June 30, 2025. The unrealized foreign exchange gains were attributable to the weakening of the US dollar against foreign currencies in 2025, while the unrealized investment gains were attributable to a decrease in US Treasury rates, partially offset by credit spread widening in 2025.
Collateralized Loan Obligations– We also invest in CLOs which pay principal and interest from cash flows received from underlying corporate loans. These holdings were $38.9 billion and $35.2 billion as of June 30, 2025 and December 31, 2024, respectively.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
A summary of our AFS CLO portfolio, including related parties, by NAIC designations and NRSRO quality ratings is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
NAIC designation
1 A-G
$
26,766
68.8
%
$
23,948
68.0
%
2 A-C
12,038
30.9
%
11,130
31.6
%
Total investment grade
38,804
99.7
%
35,078
99.6
%
3 A-C
100
0.2
%
118
0.3
%
4 A-C
22
0.1
%
21
0.1
%
5 A-C
—
—
%
—
—
%
6
—
—
%
—
—
%
Non-designated
—
—
%
—
—
%
Total below investment grade
122
0.3
%
139
0.4
%
Total AFS CLO, including related parties
$
38,926
100.0
%
$
35,217
100.0
%
NRSRO rating agency designation
AAA/AA/A
$
26,766
68.8
%
$
23,956
68.0
%
BBB
12,038
30.9
%
11,122
31.6
%
Non-rated1
—
—
%
—
—
%
Total investment grade
38,804
99.7
%
35,078
99.6
%
BB
100
0.2
%
118
0.3
%
B
22
0.1
%
21
0.1
%
CCC
—
—
%
—
—
%
CC and lower
—
—
%
—
—
%
Non-rated1
—
—
%
—
—
%
Total below investment grade
122
0.3
%
139
0.4
%
Total AFS CLO, including related parties
$
38,926
100.0
%
$
35,217
100.0
%
1Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. The NAIC designation methodology differs in significant respects from the NRSRO rating methodology.
As of June 30, 2025 and December 31, 2024, 99.7% and 99.6%, respectively, of our AFS CLO portfolio was invested in assets considered to be investment grade based upon both the application of the NAIC’s methodology and NRSRO ratings. The increase in our CLO portfolio was mainly driven by the deployment of strong gross organic inflows in excess of gross liability outflows, as well as unrealized gains attributable to a decrease in US Treasury rates, partially offset by credit spread widening in 2025.
Commercial Mortgage-backed Securities– A portion of our AFS portfolio is invested in CMBS which are constructed from pools of commercial mortgages. These holdings were $13.5 billion and $10.7 billion as of June 30, 2025 and December 31, 2024, respectively.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
A summary of our AFS CMBS portfolio by NAIC designations and NRSRO quality ratings is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
NAIC designation
1 A-G
$
11,942
88.4
%
$
9,300
86.6
%
2 A-C
1,040
7.7
%
913
8.5
%
Total investment grade
12,982
96.1
%
10,213
95.1
%
3 A-C
226
1.7
%
241
2.2
%
4 A-C
94
0.7
%
95
0.9
%
5 A-C
144
1.1
%
156
1.5
%
6
54
0.4
%
36
0.3
%
Non-designated
—
—
%
—
—
%
Total below investment grade
518
3.9
%
528
4.9
%
Total AFS CMBS
$
13,500
100.0
%
$
10,741
100.0
%
NRSRO rating agency designation
AAA/AA/A
$
11,046
81.8
%
$
8,448
78.6
%
BBB
1,388
10.3
%
1,075
10.0
%
Non-rated1
311
2.3
%
544
5.1
%
Total investment grade
12,745
94.4
%
10,067
93.7
%
BB
308
2.3
%
336
3.1
%
B
201
1.5
%
115
1.1
%
CCC
191
1.4
%
135
1.3
%
CC and lower
55
0.4
%
48
0.4
%
Non-rated1
—
—
%
40
0.4
%
Total below investment grade
755
5.6
%
674
6.3
%
Total AFS CMBS
$
13,500
100.0
%
$
10,741
100.0
%
1Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. The NAIC designation methodology differs in significant respects from the NRSRO rating methodology.
As of June 30, 2025 and December 31, 2024, 96.1% and 95.1%, respectively, of our AFS CMBS portfolio was invested in assets considered to be investment grade based upon application of the NAIC’s methodology, while 94.4% and 93.7% of securities as of June 30, 2025 and December 31, 2024, respectively, were considered investment grade based upon NRSRO ratings. The increase in our CMBS portfolio was mainly driven by the deployment of strong gross organic inflows in excess of gross liability outflows.
Residential Mortgage-backed Securities– A portion of our AFS portfolio is invested in RMBS, which are securities constructed from pools of residential mortgages. These holdings were $10.3 billion and $8.0 billion as of June 30, 2025 and December 31, 2024, respectively.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
A summary of our AFS RMBS portfolio by NAIC designations and NRSRO quality ratings is as follows:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
NAIC designation
1 A-G
$
8,878
86.0
%
$
6,715
83.8
%
2 A-C
872
8.5
%
691
8.6
%
Total investment grade
9,750
94.5
%
7,406
92.4
%
3 A-C
232
2.2
%
259
3.3
%
4 A-C
170
1.6
%
186
2.3
%
5 A-C
83
0.8
%
82
1.0
%
6
87
0.9
%
82
1.0
%
Non-designated
—
—
%
—
—
%
Total below investment grade
572
5.5
%
609
7.6
%
Total AFS RMBS
$
10,322
100.0
%
$
8,015
100.0
%
NRSRO rating agency designation
AAA/AA/A
$
3,895
37.7
%
$
2,518
31.4
%
BBB
1,132
11.0
%
945
11.8
%
Non-rated1
3,173
30.7
%
2,523
31.5
%
Total investment grade
8,200
79.4
%
5,986
74.7
%
BB
43
0.4
%
46
0.6
%
B
127
1.2
%
129
1.6
%
CCC
1,154
11.2
%
827
10.3
%
CC and lower
491
4.8
%
679
8.5
%
Non-rated1
307
3.0
%
348
4.3
%
Total below investment grade
2,122
20.6
%
2,029
25.3
%
Total AFS RMBS
$
10,322
100.0
%
$
8,015
100.0
%
1Securities denoted as non-rated by the NRSRO were classified as investment or non-investment grade according to the security’s respective NAIC designation. The NAIC designation methodology differs in significant respects from the NRSRO rating methodology.
A significant majority of our RMBS portfolio, 94.5% and 92.4% as of June 30, 2025 and December 31, 2024, respectively, was invested in assets considered to be investment grade based upon application of the NAIC’s methodology. The NAIC’s methodology with respect to RMBS gives explicit effect to the amortized cost at which an insurance company carries each such investment. Because we invested in RMBS after the stresses related to US housing had caused significant downward pressure on prices of RMBS, we carry some of our investments in RMBS at significant discounts to par value, which results in an investment grade NAIC designation. In contrast, our understanding is that in setting ratings, the NRSRO focuses on the likelihood of recovering all contractual payments including principal at par value. As a result of this fundamental difference in approach, NRSRO characterized 79.4% and 74.7% of our RMBS portfolio as investment grade as of June 30, 2025 and December 31, 2024, respectively. The increase in our RMBS portfolio was mainly driven by the deployment of strong gross organic inflows in excess of gross liability outflows.
Unrealized Losses
Our investments in AFS securities, including related parties, are reported at fair value with changes in fair value recorded in other comprehensive income (loss). Certain of our AFS securities, including related parties, have experienced declines in fair value that we consider temporary in nature. These investments are held to support our product liabilities, and we currently have the intent and ability to hold these securities until recovery of the amortized cost basis prior to sale or maturity. As of June 30, 2025, our AFS securities, including related parties, had a fair value of $210.7 billion, which was 4.9% below amortized cost of $221.6 billion. As of December 31, 2024, our AFS securities, including related parties, had a fair value of $184.5 billion, which was 7.9% below amortized cost of $200.2 billion. Our fair value of AFS securities as of both June 30, 2025 and December 31, 2024 were below amortized cost due to the investment portfolio being marked to fair value on January 1, 2022 in conjunction with purchase accounting, with subsequent losses driven by the significant increase in US Treasury rates.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following tables reflect the unrealized losses, including any unrealized foreign exchange impacts, on the AFS portfolio, including related parties, for which an allowance for credit losses has not been recorded, by NAIC designations:
June 30, 2025
(In millions, except percentages)
Amortized Cost of AFS Securities with Unrealized Loss
Gross Unrealized Losses
Fair Value of AFS Securities with Unrealized Loss
Fair Value to Amortized Cost Ratio
Fair Value of Total AFS Securities
Gross Unrealized Losses to Total AFS Fair Value
NAIC designation
1 A-G
$
61,731
$
(7,723)
$
54,008
87.5
%
$
115,479
(6.7)
%
2 A-C
43,817
(5,078)
38,739
88.4
%
88,320
(5.7)
%
Total investment grade
105,548
(12,801)
92,747
87.9
%
203,799
(6.3)
%
3 A-C
1,868
(241)
1,627
87.1
%
3,653
(6.6)
%
4 A-C
799
(52)
747
93.5
%
1,594
(3.3)
%
5 A-C
288
(16)
272
94.4
%
368
(4.3)
%
6
291
(43)
248
85.2
%
664
(6.5)
%
Non-designated
656
(80)
576
87.8
%
588
(13.6)
%
Total below investment grade
3,902
(432)
3,470
88.9
%
6,867
(6.3)
%
Total
$
109,450
$
(13,233)
$
96,217
87.9
%
$
210,666
(6.3)
%
December 31, 2024
(In millions, except percentages)
Amortized Cost of AFS Securities with Unrealized Loss
Gross Unrealized Losses
Fair Value of AFS Securities with Unrealized Loss
Fair Value to Amortized Cost Ratio
Fair Value of Total AFS Securities
Gross Unrealized Losses to Total AFS Fair Value
NAIC designation
1 A-G
$
67,663
$
(8,693)
$
58,970
87.2
%
$
104,887
(8.3)
%
2 A-C
48,729
(6,292)
42,437
87.1
%
74,064
(8.5)
%
Total investment grade
116,392
(14,985)
101,407
87.1
%
178,951
(8.4)
%
3 A-C
2,280
(240)
2,040
89.5
%
3,230
(7.4)
%
4 A-C
889
(59)
830
93.4
%
1,378
(4.3)
%
5 A-C
202
(19)
183
90.6
%
293
(6.5)
%
6
256
(65)
191
74.6
%
639
(10.2)
%
Non-designated
—
—
—
—
%
—
—
%
Total below investment grade
3,627
(383)
3,244
89.4
%
5,540
(6.9)
%
Total
$
120,019
$
(15,368)
$
104,651
87.2
%
$
184,491
(8.3)
%
The gross unrealized losses on AFS securities, including related parties, were $13.2 billion and $15.4 billion as of June 30, 2025 and December 31, 2024, respectively. The decrease in unrealized losses on AFS securities was primarily attributable to a decrease in US Treasury rates, partially offset by credit spread widening in 2025.
Provision for Credit Losses
For our credit loss accounting policies and the assumptions used in the allowances, see Note 1 – Business, Basis of Presentation and Significant Accounting Policies of our 2024 Annual Report.
As of June 30, 2025 and December 31, 2024, we held an allowance for credit losses on AFS securities of $761 million and $709 million, respectively. During the six months ended June 30, 2025, we recorded an increase in the allowance for credit losses on AFS securities of $52 million, of which $57 million had an income statement impact and $(5) million related to Purchased Credit Deteriorated (PCD) securities and other changes. The increase in the allowance for credit losses on AFS securities was primarily related to impacts from ABS securities. During the six months ended June 30, 2024, we recorded an increase in the allowance for credit losses on AFS securities of $80 million, of which $79 million had an income statement impact and $1 million related to PCD securities and other changes. The increase in the allowance for credit losses on AFS securities was primarily related to impacts from CMBS and corporate securities. The intent-to-sell impairments for the six months ended June 30, 2025 and 2024 were $6 million and $22 million, respectively.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
International Exposure
A portion of our AFS securities is invested in securities with international exposure. As of June 30, 2025 and December 31, 2024, 38% and 40%, respectively, of the carrying value of our AFS securities, including related parties, was comprised of securities of issuers based outside of the US and debt securities of foreign governments. These securities generally are either denominated in US dollars or do not expose us to significant foreign currency risk as a result of foreign currency swap and forward arrangements.
The following table presents our international exposure in our AFS portfolio, including related parties, by country or region of issuance:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Amortized Cost
Fair Value
Percentage of Total
Amortized Cost
Fair Value
Percentage of Total
Country
Ireland
$
11,926
$
12,771
15.8
%
$
10,918
$
10,330
14.1
%
Other Europe
20,062
19,342
23.9
%
18,190
16,450
22.4
%
Total Europe
31,988
32,113
39.7
%
29,108
26,780
36.5
%
Non-US North America
40,950
40,306
49.8
%
40,260
39,343
53.7
%
Australia & New Zealand
3,279
2,990
3.7
%
3,207
2,825
3.9
%
Asia/Pacific
3,161
2,790
3.5
%
2,212
1,821
2.5
%
Central & South America
1,789
1,627
2.0
%
1,680
1,467
2.0
%
Africa & Middle East
1,373
1,054
1.3
%
1,384
1,050
1.4
%
Total
$
82,540
$
80,880
100.0
%
$
77,851
$
73,286
100.0
%
Approximately 97.5% and 98.1% of these securities are investment grade by NAIC designation as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, 9% of our AFS securities, including related parties, were invested in CLOs of Cayman Islands issuers (included in Non-US North America) for which the underlying investments are largely loans to US issuers and 29% were invested in securities of other non-US issuers.
The majority of our investments in Ireland are comprised of Euro denominated CLOs, for which the SPV is domiciled in Ireland, but the underlying leveraged loans involve borrowers from the broader European region.
Trading Securities
Trading securities, including related parties and consolidated VIEs, were $7.7 billion and $4.5 billion as of June 30, 2025 and December 31, 2024, respectively. Trading securities are primarily comprised of AmerUs Closed Block securities for which we have elected the fair value option valuation, certain equity tranche securities, structured securities with embedded derivatives and investments which support various reinsurance arrangements. The increase in trading securities was primarily driven by the deployment of strong gross organic inflows in excess of gross liability outflows, the purchases of trading securities primarily within two consolidated VIEs, AAA and Apollo Asset-Backed Finance Lending Company, L.P, due to increased funding, as well as unrealized gains on the underlying assets attributable to a decrease in US Treasury rates, partially offset by credit spread widening in 2025.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Mortgage Loans
The following is a summary of our mortgage loan portfolio by collateral type, including assets held by related parties and consolidated VIEs:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Fair Value
Percentage of Total
Fair Value
Percentage of Total
Property type
Apartment
$
14,559
17.9
%
$
11,746
17.5
%
Industrial
7,849
9.7
%
6,793
10.1
%
Office building
4,217
5.2
%
4,162
6.2
%
Hotels
2,864
3.5
%
2,786
4.1
%
Retail
2,422
3.0
%
2,269
3.4
%
Other commercial
5,356
6.6
%
4,676
7.0
%
Total commercial mortgage loans
37,267
45.9
%
32,432
48.3
%
Residential loans
43,841
54.1
%
34,683
51.7
%
Total mortgage loans, including related parties and consolidated VIEs
$
81,108
100.0
%
$
67,115
100.0
%
We invest a portion of our investment portfolio in mortgage loans, which are generally comprised of high quality commercial first lien and mezzanine real estate loans. Our mortgage loan holdings, including related parties and consolidated VIEs, were $81.1 billion and $67.1 billion as of June 30, 2025 and December 31, 2024, respectively. This included $838 million and $903 million of mezzanine mortgage loans as of June 30, 2025 and December 31, 2024, respectively. We have acquired mortgage loans through acquisitions and reinsurance arrangements, as well as through an active program to invest in new mortgage loans. We invest in commercial mortgage loans (CML) on income producing properties including hotels, apartments, retail and office buildings, and other commercial and industrial properties. Our residential mortgage loan (RML) portfolio primarily consists of first lien RMLs collateralized by properties located in the US. Loan-to-value ratios at the time of loan approval are generally 75% or less.
We have elected the fair value option on our mortgage loan portfolio; therefore, we have no allowance for credit losses for commercial and residential mortgage loans. Interest income on mortgage loans is accrued on the principal amount of the loan based on the loan’s contractual interest rate. Interest income and prepayment fees are reported in net investment income on the condensed consolidated statements of income. Changes in the fair value of the mortgage loan portfolio are reported in investment related gains (losses) on the condensed consolidated statements of income.
It is our policy to cease to accrue interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is our general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place. As of June 30, 2025 and December 31, 2024, we had $782 million and $878 million, respectively, of mortgage loans that were 90 days past due, of which $272 million and $251 million, respectively, were in the process of foreclosure. As of June 30, 2025 and December 31, 2024, $63 million and $82 million of mortgage loans that were 90 days past due were related to Government National Mortgage Association early buyouts that are fully or partially guaranteed and are accruing interest.
Investment Funds
Our investment fund portfolio strategy primarily focuses on core holdings of origination and retirement services platforms, equity and credit, and other funds. Origination platforms include investments sourced by 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. Retirement services platforms include investments in equity of financial services companies. Our credit strategy comprises direct origination, asset-backed, multi-credit and opportunistic credit funds focused on generating excess returns through high-quality credit underwriting and origination. Our equity strategy comprises private equity, hybrid value, secondaries equity, real estate equity, impact investing, infrastructure and clean transition equity funds that raise capital from investors to pursue control-oriented investments across the universe of private assets. Our investment funds can meet the definition of a VIE, and in certain cases, these investment funds are consolidated in our financial statements because we meet the criteria of the primary beneficiary.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following table illustrates our investment funds, including related parties and consolidated VIEs:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Carrying Value
Percentage of Total
Carrying Value
Percentage of Total
Investment funds
Equity
$
102
0.5
%
$
107
0.5
%
Investment funds – related parties
Origination platforms
31
0.2
%
29
0.2
%
Retirement services platforms
1,492
6.9
%
1,317
6.7
%
Equity
218
1.0
%
244
1.2
%
Credit
314
1.5
%
253
1.3
%
Other
7
—
%
10
0.1
%
Total investment funds – related parties
2,062
9.6
%
1,853
9.5
%
Investment funds owned by consolidated VIEs
Origination platforms
7,536
35.0
%
6,347
32.2
%
Equity
7,383
34.3
%
7,702
39.0
%
Credit
3,735
17.4
%
3,062
15.5
%
Other
694
3.2
%
654
3.3
%
Total investment funds owned by consolidated VIEs
19,348
89.9
%
17,765
90.0
%
Total investment funds, including related parties and consolidated VIEs
$
21,512
100.0
%
$
19,725
100.0
%
Overall, total investment funds, including related parties and consolidated VIEs, were $21.5 billion and $19.7 billion, as of June 30, 2025 and December 31, 2024, respectively. See Note 2 – Investments to the condensed consolidated financial statements for further discussion regarding how we account for our investment funds. Our investment fund portfolio is subject to a number of market-related risks including interest rate risk and equity market risk. Interest rate risk represents the potential for changes in the investment fund’s net asset values resulting from changes in the general level of interest rates. Equity market risk represents the potential for changes in the investment fund’s net asset values resulting from changes in equity markets or from other external factors which influence equity markets. These risks expose us to potential volatility in our earnings period-over-period. We actively monitor our exposure to these risks. The increase in investment funds, including related parties and consolidated VIEs, was primarily driven by favorable performance of the underlying assets within AAA and net contributions from third-party investors into AAA in 2025, partially offset by the deconsolidation of a VIE.
Funds Withheld at Interest
Funds withheld at interest represent a receivable for amounts contractually withheld by ceding companies in accordance with modco and funds withheld reinsurance agreements in which we act as the reinsurer. Generally, assets equal to statutory reserves are withheld and legally owned by the ceding company. We hold funds withheld at interest receivables, including those held with Venerable, The Lincoln National Life Company and Jackson. As of June 30, 2025, the majority of the ceding companies holding the assets pursuant to such reinsurance agreements had a financial strength rating of A+ or better (based on a S&P scale).
The funds withheld at interest is comprised of the host contract and an embedded derivative. We are subject to the investment performance on the withheld assets with the total return directly impacting the host contract and the embedded derivative. Interest accrues at a risk-free rate on the host receivable and is recorded as net investment income in the condensed consolidated statements of income. The embedded derivative in our reinsurance agreements is similar to a total return swap on the income generated by the underlying assets held by the ceding companies. The change in the embedded derivative is recorded in investment related gains (losses) in the condensed consolidated statements of income. Although we do not legally own the underlying investments in the funds withheld at interest, in each instance, the ceding company has hired Apollo to manage the withheld assets in accordance with our investment guidelines.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following summarizes the underlying investment composition of the funds withheld at interest, including related parties:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Carrying Value
Percentage of Total
Carrying Value
Percentage of Total
Fixed maturity securities
Corporate
$
11,240
52.1
%
$
12,452
52.1
%
ABS
2,125
9.8
%
2,404
10.0
%
CLO
1,078
5.0
%
1,343
5.6
%
CMBS
587
2.7
%
656
2.7
%
RMBS
388
1.8
%
467
2.0
%
Foreign governments
283
1.3
%
294
1.2
%
US state, municipal and political subdivisions
150
0.7
%
162
0.7
%
Mortgage loans
3,985
18.5
%
4,282
17.9
%
Investment funds
945
4.4
%
900
3.8
%
Equity securities
228
1.1
%
255
1.1
%
Short-term investments
42
0.2
%
209
0.9
%
Derivative assets
28
0.1
%
130
0.5
%
Cash and cash equivalents
505
2.3
%
517
2.1
%
Other assets and liabilities
4
—
%
(155)
(0.6)
%
Total funds withheld at interest, including related parties
$
21,588
100.0
%
$
23,916
100.0
%
As of June 30, 2025 and December 31, 2024, we held $21.6 billion and $23.9 billion, respectively, of funds withheld at interest receivables, including related parties. Approximately 95.8% and 95.4% of the fixed maturity securities within the funds withheld at interest are investment grade by NAIC designation as of June 30, 2025 and December 31, 2024, respectively. The decrease in funds withheld at interest, including related parties, was primarily driven by run-off of the underlying blocks of business, partially offset by unrealized gains during the six months ended June 30, 2025 attributable to a decrease in US Treasury rates, partially offset by credit spread widening in 2025.
Derivative Instruments
We hold derivative instruments for economic hedging purposes to reduce our exposure to the cash flow variability of assets and liabilities, equity market risk, foreign exchange risk and interest rate risk. The types of derivatives we may use include interest rate swaps, foreign currency swaps and forward contracts, total return swaps, credit default swaps, variance swaps, futures and equity options.
A discussion regarding our derivative instruments and how such instruments are used to manage risk is included in Note 3 – Derivative Instruments to the condensed consolidated financial statements.
As part of our risk management strategies, management continually evaluates our derivative instrument holdings and the effectiveness of such holdings in addressing risks identified in our operations.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Net Invested Assets
The following summarizes our net invested assets:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Net Invested Asset Value1
Percentage of Total
Net Invested Asset Value1
Percentage of Total
Corporate
$
92,073
33.5
%
$
86,051
34.6
%
CLO
29,303
10.6
%
27,698
11.2
%
Credit
121,376
44.1
%
113,749
45.8
%
CML
30,955
11.2
%
28,055
11.3
%
RML
34,263
12.5
%
27,848
11.2
%
RMBS
8,879
3.2
%
7,635
3.1
%
CMBS
10,007
3.6
%
8,243
3.3
%
Real estate
84,104
30.5
%
71,781
28.9
%
ABS
30,397
11.0
%
28,670
11.5
%
Alternative investments
12,817
4.7
%
12,000
4.8
%
State, municipal, political subdivisions and foreign government
3,217
1.2
%
3,237
1.3
%
Equity securities
2,183
0.8
%
2,201
0.9
%
Short-term investments
224
0.1
%
1,015
0.4
%
US government and agencies
7,105
2.6
%
5,531
2.2
%
Other investments
55,943
20.4
%
52,654
21.1
%
Cash and cash equivalents
9,265
3.4
%
6,794
2.7
%
Other
4,352
1.6
%
3,665
1.5
%
Net invested assets
$
275,040
100.0
%
$
248,643
100.0
%
1See Key Operating and Non-GAAP Measures for the definition of net invested assets.
Our net invested assets were $275.0 billion and $248.6 billion as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, corporate securities included $26.1 billion of private placements, which represented 9.5% of our net invested assets. The increase in net invested assets was primarily driven by growth from net organic inflows of $36.0 billion in excess of net liability outflows of $12.8 billion, the reinvestment of earnings, the issuance of $1.6 billion of long-term debt during the second quarter of 2025 and favorable alternative investment performance. These impacts were partially offset by a decrease in short-term repurchase agreements outstanding as of June 30, 2025, cash paid to redeem our Series C preferred stock and the payment of common and preferred stock dividends.
In managing our business, we utilize net invested assets as presented in the above table. Net invested assets do not correspond to total investments, including related parties, on our condensed consolidated balance sheets, as discussed previously in Key Operating and Non-GAAP Measures. Net invested assets represent the investments that directly back our net reserve liabilities and surplus assets. We believe this view of our portfolio provides a view of the assets for which we have economic exposure. We adjust the presentation for assumed and ceded reinsurance transactions to include or exclude the underlying investments based upon the contractual transfer of economic exposure to such underlying investments. We also adjust for VIEs to show the net investment in the funds, which are included in the alternative investments line above, as well as adjusting for the allowance for credit losses. Net invested assets include our proportionate share of ACRA investments, based on our economic ownership, but exclude the proportionate share of investments associated with the noncontrolling interests.
Net invested assets is utilized by management to evaluate our investment portfolio. Net invested assets is used in the computation of net investment earned rate, which allows us to analyze the profitability of our investment portfolio. Net invested assets is also used in our risk management processes for asset purchases, product design and underwriting, stress scenarios, liquidity and ALM.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Net Alternative Investments
The following summarizes our net alternative investments:
June 30, 2025
December 31, 2024
(In millions, except percentages)
Net Invested Asset Value
Percentage of Total
Net Invested Asset Value
Percentage of Total
Origination platforms
Wheels
$
711
5.5
%
$
581
4.8
%
Redding Ridge
629
4.9
%
581
4.8
%
MidCap Financial
582
4.5
%
544
4.5
%
Aqua Finance
368
2.9
%
309
2.6
%
Skylign
308
2.4
%
300
2.5
%
Apterra
408
3.2
%
221
1.9
%
Foundation Home Loans
189
1.5
%
184
1.5
%
Other
688
5.4
%
555
4.6
%
Origination platforms
3,883
30.3
%
3,275
27.2
%
Apollo and other investments
Real assets
1,769
13.8
%
1,691
14.1
%
Private equity
1,226
9.6
%
1,107
9.2
%
Structured equity and other
595
4.6
%
522
4.4
%
Equity
3,590
28.0
%
3,320
27.7
%
Credit
1,892
14.8
%
1,481
12.4
%
Liquid assets and other
690
5.4
%
851
7.1
%
Apollo and other investments
6,172
48.2
%
5,652
47.2
%
Total AAA
10,055
78.5
%
8,927
74.4
%
Retirement services
Athora
1,122
8.8
%
1,125
9.4
%
Venerable
309
2.4
%
273
2.3
%
Retirement services
1,431
11.2
%
1,398
11.7
%
Apollo and other investments
Equity
948
7.4
%
1,120
9.3
%
Credit
365
2.8
%
531
4.4
%
Other
18
0.1
%
24
0.2
%
Apollo and other investments
1,331
10.3
%
1,675
13.9
%
Total Non AAA
2,762
21.5
%
3,073
25.6
%
Net alternative investments
$
12,817
100.0
%
$
12,000
100.0
%
Net alternative investments were $12.8 billion and $12.0 billion as of June 30, 2025 and December 31, 2024, respectively, representing 4.7% and 4.8% of our net invested asset portfolio as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, we held approximately 78% of our net alternative investments through AAA and had a gross ownership percentage in AAA of approximately 60%. The increase in net alternative investments was primarily driven by the deployment of a cash contribution into AAA and favorable alternative investment performance, primarily within origination platforms.
Net alternative investments do not correspond to the total investment funds, including related parties and consolidated VIEs, on our condensed consolidated balance sheets. As previously discussed in the net invested assets section, we adjust the US GAAP presentation primarily for assumed and ceded reinsurance and VIE impacts. Net alternative investments include our proportionate share of ACRA alternative investments, based on our economic ownership, but exclude the proportionate share of alternative investments associated with the noncontrolling interests.
Through our relationship with Apollo, we have indirectly invested in companies that meet the key characteristics we look for in net alternative investments. Athora is our largest alternative investment.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Athora
Athora is a specialized insurance and reinsurance group fully focused on the European market. Athora’s principal operational subsidiaries are Athora Netherlands N.V. in the Netherlands, Athora Belgium SA in Belgium, Athora Lebensversicherung AG in Germany, Athora Ireland plc in Ireland and Athora Life Re Ltd. in Bermuda. Athora deploys capital and resources to further its mission to build a stand-alone independent and integrated insurance and reinsurance business. Athora’s growth is achieved primarily through acquisitions, portfolio transfers and reinsurance. Athora is building a European insurance brand and has successfully acquired, integrated and transformed multiple insurance companies.
Our alternative investment in Athora had a carrying value of $1.1 billion as of each of June 30, 2025 and December 31, 2024. Our investment in Athora represents our proportionate share of its net asset value, which largely reflects any contributions to and distributions from Athora and changes in its fair value. Athora returned a net investment earned rate of 1.46% and 2.30% for the three months ended June 30, 2025 and 2024, respectively, and (0.65)% and 2.93% for the six months ended June 30, 2025 and 2024, respectively. Alternative investment income from Athora was $5 million and $7 million for the three months ended June 30, 2025 and 2024, respectively, and $(2) million and $17 million for the six months ended June 30, 2025 and 2024, respectively. The decrease in alternative investment income compared to 2024 was primarily driven by increased capital requirements related to expanded solvency requirements impacting the valuation of Athora in 2025.
Non-GAAP Measure Reconciliations
The reconciliation of net income available to Athene Holding Ltd. common stockholder to spread related earnings is as follows:
Three months ended June 30,
Six months ended June 30,
(In millions)
2025
2024
2025
2024
Net income available to Athene Holding Ltd. common stockholder
$
503
$
583
$
923
$
1,730
Less: Preferred stock redemption
84
—
84
—
Add: Preferred stock dividends
45
46
90
91
Add: Net income attributable to noncontrolling interests
222
237
516
520
Net income
686
866
1,445
2,341
Income tax expense (benefit)
(34)
161
141
468
Income before income taxes
652
1,027
1,586
2,809
Investment gains (losses), net of offsets
(509)
(124)
(358)
(146)
Non-operating change in insurance liabilities and related derivatives
149
203
(218)
876
Integration, restructuring and other non-operating expenses
(32)
(31)
(62)
(61)
Stock compensation expense
(11)
(11)
(22)
(24)
Preferred stock dividends
45
46
90
91
Noncontrolling interests – pre-tax income and VIE adjustments
190
232
532
545
Less: Total adjustments to income before income taxes
(168)
315
(38)
1,281
Spread related earnings
$
820
$
712
$
1,624
$
1,528
The reconciliation of total AHL stockholders’ equity to total adjusted AHL common stockholder’s equity is as follows:
(In millions)
June 30, 2025
December 31, 2024
Total AHL stockholders’ equity
$
18,148
$
16,360
Less: Preferred stock
2,470
3,154
Total AHL common stockholder’s equity
15,678
13,206
Less: Accumulated other comprehensive loss
(3,688)
(5,465)
Less: Accumulated change in fair value of reinsurance assets
(1,385)
(1,591)
Less: Accumulated change in fair value of mortgage loan assets
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The reconciliation of leverage ratio to adjusted leverage ratio is as follows:
(In millions, except percentages)
June 30, 2025
December 31, 2024
Total debt
$
7,864
$
6,309
Add: 50% of preferred stock
1,235
1,577
Less: 50% of subordinated debt
888
588
Less: Adjustment to arrive at notional
183
134
Adjusted leverage
$
8,028
$
7,164
Total debt
$
7,864
$
6,309
Total AHL stockholders’ equity
18,148
16,360
Total capitalization
26,012
22,669
Less: Accumulated other comprehensive loss
(3,688)
(5,465)
Less: Accumulated change in fair value of reinsurance assets
(1,385)
(1,591)
Less: Accumulated change in fair value of mortgage loan assets
(1,461)
(2,051)
Less: Adjustment to arrive at notional
276
134
Total adjusted capitalization
$
32,270
$
31,642
Leverage ratio
39.7
%
41.7
%
Accumulated other comprehensive loss
(4.4)
%
(7.1)
%
Accumulated change in fair value of reinsurance assets
(1.7)
%
(2.1)
%
Accumulated change in fair value of mortgage loan assets
(1.7)
%
(2.7)
%
Adjustment to exclude 50% of preferred stock
(3.8)
%
(5.0)
%
Adjustment to exclude 50% of subordinated debt
(2.8)
%
(1.9)
%
Adjustment to arrive at notional
(0.4)
%
(0.3)
%
Adjusted leverage ratio
24.9
%
22.6
%
Note: The current period adjusted leverage ratio was updated to include preferred stock at notional rather than fair value within the calculation to align with the treatment of debt. The impact to previous period ratios was de minimis. Therefore, historical ratios were not adjusted.
The reconciliation of net investment income to net investment earnings and earned rate is as follows:
Three months ended June 30,
Six months ended June 30,
2025
2024
2025
2024
(In millions, except percentages)
Dollar
Rate
Dollar
Rate
Dollar
Rate
Dollar
Rate
US GAAP net investment income
$
4,429
6.59
%
$
3,509
6.10
%
$
8,420
6.43
%
$
6,801
6.02
%
Change in fair value of reinsurance assets
(65)
(0.10)
%
(37)
(0.06)
%
(128)
(0.10)
%
(47)
(0.04)
%
VIE earnings and noncontrolling interests
382
0.57
%
257
0.45
%
816
0.62
%
568
0.50
%
Forward points adjustment on FX derivative hedges
26
0.04
%
32
0.05
%
50
0.04
%
83
0.08
%
Held-for-trading amortization
(40)
(0.06)
%
(8)
(0.01)
%
(69)
(0.05)
%
(43)
(0.04)
%
Reinsurance impacts
(39)
(0.06)
%
(55)
(0.10)
%
(79)
(0.06)
%
(119)
(0.11)
%
ACRA noncontrolling interests
(1,159)
(1.72)
%
(921)
(1.60)
%
(2,233)
(1.70)
%
(1,789)
(1.58)
%
Other
(35)
(0.05)
%
26
0.04
%
(47)
(0.04)
%
70
0.06
%
Total adjustments to arrive at net investment earnings/earned rate
Item 2. 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)
June 30, 2025
December 31, 2024
Total investments, including related parties
$
329,976
$
291,491
Derivative assets
(6,901)
(8,154)
Cash and cash equivalents (including restricted cash)
12,049
13,676
Accrued investment income
3,176
2,816
Net receivable (payable) for collateral on derivatives
(1,682)
(4,602)
Reinsurance impacts
(5,226)
(4,435)
VIE and VOE assets, liabilities and noncontrolling interests
18,066
17,289
Unrealized (gains) losses
12,202
18,320
Ceded policy loans
(162)
(167)
Net investment receivables (payables)
(49)
97
Allowance for credit losses
774
720
Other investments
(428)
(87)
Total adjustments to arrive at gross invested assets
31,819
35,473
Gross invested assets
361,795
326,964
ACRA noncontrolling interests
(86,755)
(78,321)
Net invested assets
$
275,040
$
248,643
The reconciliation of total investment funds, including related parties and consolidated VIEs, to net alternative investments within net invested assets is as follows:
(In millions)
June 30, 2025
December 31, 2024
Investment funds, including related parties and consolidated VIEs
$
21,512
$
19,725
Certain equity securities included in trading securities
(265)
34
Investment funds within funds withheld at interest
917
900
Net assets of the VIE, excluding investment funds
(5,434)
(4,850)
Unrealized (gains) losses
(49)
92
ACRA noncontrolling interests
(3,459)
(3,731)
Investment in ADIP
(236)
—
Other assets
(169)
(170)
Total adjustments to arrive at net alternative investments
(8,695)
(7,725)
Net alternative investments
$
12,817
$
12,000
The reconciliation of total liabilities to net reserve liabilities is as follows:
(In millions)
June 30, 2025
December 31, 2024
Total liabilities
$
376,105
$
337,469
Debt
(7,864)
(6,309)
Derivative liabilities
(4,889)
(3,556)
Payables for collateral on derivatives and short-term securities to repurchase
(4,513)
(8,988)
Other liabilities
(8,008)
(6,546)
Liabilities of consolidated VIEs
(1,760)
(1,640)
Reinsurance impacts
(12,251)
(11,861)
Ceded policy loans
(162)
(167)
Market risk benefit asset
(277)
(312)
ACRA noncontrolling interests
(81,809)
(72,164)
Total adjustments to arrive at net reserve liabilities
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
There are two forms of liquidity relevant to our business: funding liquidity and balance sheet liquidity. Funding liquidity relates to the ability to fund operations. 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. Our principal sources of liquidity, in the ordinary course of business, are operating cash flows and holdings of cash, cash equivalents and other readily marketable assets.
Our investment portfolio is structured to ensure a strong liquidity position over time to permit timely payment of policy and contract benefits without requiring asset sales at inopportune times or at depressed prices. 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. The carrying value of these assets, excluding assets within modified coinsurance and funds withheld portfolios, as of June 30, 2025 was $130.8 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. The carrying value of the underlying assets in these modified coinsurance and funds withheld portfolios that we consider liquid as of June 30, 2025 was $10.1 billion. Although our investment portfolio does contain assets that are generally considered less liquid for liquidity monitoring purposes (primarily mortgage loans, policy loans, real estate and investment funds), there is some ability to raise cash from these assets if needed. In periods of economic downturn, we may seek to raise or hold additional cash and liquid assets to manage our liquidity risk and to take advantage of market dislocations as they arise.
We have access to additional liquidity through our credit facility and liquidity facility. 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 June 30, 2025. We entered into a new liquidity facility on June 27, 2025, which replaced our previous agreement dated as of June 28, 2024. 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 liquidity facility has a commitment termination date of June 26, 2026, subject to additional 364-day extensions, and was undrawn as of June 30, 2025. We also have access to $2.0 billion of committed repurchase facilities. Our registration statement on Form S-3 ASR (Shelf Registration Statement) provides us with access to the capital markets, subject to market conditions and other factors. We are also the counterparty to repurchase agreements with several different financial institutions, pursuant to which we may obtain short-term liquidity, to the extent available. In addition, through our membership in the FHLB, we are eligible to borrow under variable rate short-term federal funds arrangements to provide additional liquidity.
We proactively manage our liquidity position to meet cash needs while minimizing adverse impacts on investment returns. We analyze our cash-flow liquidity over the upcoming 12 months by modeling potential demands on liquidity under a variety of scenarios, taking into account the provisions of our policies and contracts in force, our cash flow position, and the volume of cash and readily marketable securities in our portfolio.
Liquidity risk is monitored, managed and mitigated through a number of stress tests and analyses to assess our ability to meet our cash flow requirements, as well as the ability of our reinsurance and insurance subsidiaries to meet their collateral obligations, under various stress scenarios. 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 our Liquidity Risk Policy that is reviewed and approved by our board of directors.
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. 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. However, policyholders may elect to withdraw some, or all, of their account value in amounts that exceed our estimates and assumptions over the life of an annuity contract. We include provisions within our annuity policies, such as surrender charges and MVAs, which are intended to protect us from early withdrawals. As of June 30, 2025 and December 31, 2024, approximately 84% and 82%, respectively, of our deferred annuity liabilities were subject to penalty upon surrender. In addition, as of June 30, 2025 and December 31, 2024, approximately 68% and 66%, 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. As of June 30, 2025, approximately 36% 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 52% were subject to penalty upon surrender.
Item 2. 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 borrowings must be secured by eligible collateral such as mortgage loans, eligible CMBS or RMBS, government or agency securities and guaranteed loans. As of each of June 30, 2025 and December 31, 2024, 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. As of June 30, 2025 and December 31, 2024, we had funding agreements outstanding with the FHLB in the aggregate principal amount of $21.0 billion and $15.6 billion, respectively.
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 June 30, 2025, our total maximum borrowing capacity under the FHLB facilities was limited to $58.6 billion. 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 June 30, 2025, we had the ability to draw up to an estimated $25.4 billion, inclusive of borrowings then outstanding. This estimate is based on our internal analysis and assumptions and may not accurately measure collateral which is ultimately acceptable to the FHLB.
Securities Repurchase Agreements
We engage in repurchase transactions whereby we sell fixed income securities to third parties, primarily major brokerage firms or commercial banks, with a concurrent agreement to repurchase such securities at a determined future date. 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 substantially all of the repurchase price. Proceeds received from the sale of securities pursuant to these arrangements are generally invested in short-term investments or maintained in cash, with the offsetting obligation to repurchase the security included within payables for collateral on derivatives and securities to repurchase on the condensed consolidated balance sheets. As per the terms of the repurchase agreements, we monitor the market value of the securities sold and may be required to deliver additional collateral (which may be in the form of cash or additional securities) to the extent that the value of the securities sold decreases prior to the repurchase date.
As of June 30, 2025 and December 31, 2024, the payables for repurchase agreements were $3.5 billion and $5.7 billion, respectively, while the fair value of securities and collateral held by counterparties backing the repurchase agreements was $3.7 billion and $5.9 billion, respectively. As of June 30, 2025, payables for repurchase agreements, based on original issuance, were comprised of $790 million of short-term and $2.7 billion of long-term repurchase agreements. 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.
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. 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. As of June 30, 2025, we had no outstanding payables under this facility.
We have a $1.0 billion committed repurchase facility with Societe Generale. The facility has a commitment term of 5 years, however, either party may terminate the facility upon 24-months’ notice, in which case the facility will end upon the earlier of (1) such designated termination date, or (2) July 26, 2026. 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 June 30, 2025, we had no outstanding payables under this facility.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cash Flows
Our cash flows were as follows:
Six months ended June 30,
(In millions)
2025
2024
Net income
$
1,445
$
2,341
Non-cash revenues and expenses
37
(1,631)
Net cash provided by operating activities
1,482
710
Sales, maturities and repayments of investments
37,207
24,752
Purchases of investments
(73,825)
(55,010)
Other investing activities
(243)
(744)
Net cash used in investing activities
(36,861)
(31,002)
Inflows on investment-type policies and contracts
45,973
37,102
Withdrawals on investment-type policies and contracts
(9,604)
(11,636)
Other financing activities
(3,022)
4,603
Net cash provided by financing activities
33,347
30,069
Effect of exchange rate changes on cash and cash equivalents
13
(2)
Net decrease in cash and cash equivalents
$
(2,019)
$
(225)
Note: Cash and cash equivalents includes cash and cash equivalents, restricted cash and cash and cash equivalents of consolidated variable interest entities.
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 $1.5 billion and $710 million for the six months ended June 30, 2025 and 2024, respectively. The increase in cash provided by operating activities for the six months ended June 30, 2025 compared to 2024 was primarily driven by an increase in net investment income, partially offset by an increase in cash paid for interest on funding agreements, policy acquisition expenses and other operating expenses.
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 $36.9 billion and $31.0 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in cash used in investing activities for the six months ended June 30, 2025 compared to 2024 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 2024, partially offset by an increase in the sales, maturities and repayments of investments, a decrease in cash collateral posted by us for derivative transactions, an increase in cash received for settlements of derivatives and an increase in net investment payables.
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 primary cash outflows from financing activities are withdrawals on our investment-type policies and contracts, changes of cash collateral for derivative transactions posted by counterparties, capital distributions, repayments of outstanding borrowings and payment of preferred and common stock dividends. Our financing activities provided cash flows totaling $33.3 billion and $30.1 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in cash provided by financing activities for the six months ended June 30, 2025 compared to 2024 was primarily attributable to higher cash received from funding agreement and deferred annuity inflows, net of cash outflows, a capital contribution from AGM and cash received related to the issuance of additional long-term repurchase agreements in 2025 compared to cash used for the repayment of a long-term repurchase agreement in 2024. These increases were partially offset by a decrease in cash collateral posted by counterparties for derivative transactions, an increase in cash used for the repayment of outstanding short-term repurchase agreements in 2025, a decrease in net capital contributions from noncontrolling interests in 2025 and cash paid for the redemption of our Series C preferred stock in 2025.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Material Cash Obligations
The following table summarizes estimated future cash obligations as of June 30, 2025:
Payments Due by Period
(In millions)
2025
2026-2027
2028-2029
2030 and thereafter
Total
Interest sensitive contract liabilities
$
16,500
$
65,310
$
86,632
$
123,796
$
292,238
Future policy benefits
1,569
5,938
5,397
36,496
49,400
Market risk benefits
—
—
—
6,651
6,651
Other policy claims and benefits
108
—
—
—
108
Dividends payable to policyholders
4
16
13
56
89
Debt1
220
879
1,818
14,575
17,492
Securities to repurchase2
872
1,822
492
797
3,983
Total
$
19,273
$
73,965
$
94,352
$
182,371
$
369,961
1 The obligations for debt payments include contractual maturities of principal and estimated future interest payments based on the terms of the debt agreements.
2 The obligations for securities to repurchase payments include contractual maturities of principal and estimated future interest payments based on the terms of the agreements. Future interest payments on floating rate repurchase agreements were calculated using the June 30, 2025 interest rate.
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.
We declared common stock cash dividends of $187 million on May 12, 2025, payable to the holder of AHL’s common stock with a record date of June 13, 2025 and payment date of June 16, 2025. We have paid $375 million in common stock cash dividends for the six months ended June 30, 2025.
We declared and paid common stock cash dividends of $187 million and $374 million for the three months ended June 30, 2024 and the six months ended June 30, 2024, respectively.
Dividends from Insurance Subsidiaries
AHL is a holding company whose primary liquidity needs include the cash-flow requirements relating to its corporate activities, including its day-to-day operations, debt servicing, preferred and common stock dividend payments and strategic transactions, such as acquisitions. The primary sources of AHL’s cash flow are dividends from its subsidiaries, capital market issuances and inter-company borrowings, which are expected to be adequate to fund cash flow requirements based on current estimates of future obligations.
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. 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.
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. Any distributions above the amount permitted by statute in any twelve-month period are considered to be extraordinary dividends, and require the approval of the appropriate regulator prior to payment. AHL does not currently plan on having the US subsidiaries pay any dividends to their parents.
Dividends from subsidiaries are projected to be the primary source of AHL’s liquidity. Under the Bermuda Insurance Act, each of our Bermuda insurance subsidiaries is prohibited from paying a dividend in an amount exceeding 25% of the prior year’s statutory capital and surplus, unless at least two members of the board of directors of the Bermuda insurance subsidiary and its principal representative in Bermuda sign and submit to the Bermuda Monetary Authority (BMA) an affidavit attesting that a dividend in excess of this amount would not cause the Bermuda insurance subsidiary to fail to meet its relevant margins. In certain instances, the Bermuda insurance subsidiary would also be required to provide prior notice to the BMA in advance of the payment of dividends. In the event that such an affidavit is submitted to the BMA in accordance with the Bermuda Insurance Act, and further subject to the Bermuda insurance subsidiary meeting its relevant margins, the Bermuda insurance subsidiary is permitted to distribute up to the sum of 100% of statutory surplus and an amount less than 15% of its total statutory capital. Distributions in excess of this amount require the approval of the BMA.
The maximum distribution permitted by law or contract is not necessarily indicative of our actual ability to pay such distributions, which may be further restricted by business and other considerations, such as the impact of such distributions on surplus, which could affect our ratings or
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
competitive position and the amount of premiums that can be written. 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. AHL believes its insurance subsidiaries have sufficient statutory capital and surplus, combined with additional capital available to be provided by AHL, to meet their financial strength ratings objectives. Finally, state insurance laws and regulations require that the statutory surplus of our insurance subsidiaries following any dividend or distribution must be reasonable in relation to their outstanding liabilities and adequate for the insurance subsidiaries’ financial needs.
Other Sources of Funding
We may seek to secure additional funding at the holding company level by means other than dividends from subsidiaries, such as by drawing on our undrawn $1.25 billion credit facility, drawing on our undrawn $2.6 billion liquidity facility or by pursuing future issuances of debt or preferred stock to third-party investors. Certain other sources of liquidity potentially available at the holding company level are discussed below. 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. Our liquidity facility also contains various standard covenants with which we must comply, including maintaining an AARe minimum consolidated net worth of no less than $23.2 billion and restrictions on our ability to incur liens, with certain exceptions. Rates and terms are as defined in the liquidity facility.
Shelf Registration – Under our Shelf Registration Statement, subject to market conditions, we have the ability to issue, in indeterminate amounts, debt securities, preferred stock, depositary shares, warrants and units.
Debt – The following summarizes our outstanding long-term senior and subordinated notes as of June 30, 2025 (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
2055 Senior Notes
May 19, 2025
May 19, 2055
6.625%
$1,000
2055 Subordinated Notes
June 27, 2025
June 28, 2055
6.875%3
$600
1 The 2064 Subordinated Notes bear interest at an annual fixed rate of 7.250% until March 30, 2029. On March 30, 2029, and every fifth annual anniversary thereafter, the interest rate resets to the five-year US Treasury rate (as defined in the applicable prospectus supplement) plus 2.986%.
2 The 2054 Subordinated Notes bear interest at an annual fixed rate of 6.625% until October 15, 2034. On October 15, 2034, and every fifth annual anniversary thereafter, the interest rate resets to the five-year US Treasury rate (as defined in the applicable prospectus supplement) plus 2.607%.
3 The 2055 Subordinated Notes bear interest at an annual fixed rate of 6.875% until June 28, 2035. On June 28, 2035, and every fifth annual anniversary thereafter, the interest rate resets to the five-year US Treasury rate (as defined in the applicable prospectus supplement) plus 2.582%.
See Note 8 – Debt to the condensed consolidated financial statements and Note 11 – Debt to the consolidated financial statements in our 2024 Annual Report for further information on debt.
Item 2. 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 June 30, 2025 (in millions, except share, per share data and percentages):
Issuance
Fixed/Floating
Rate
Issue Date
Optional Redemption Date1
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 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
Variable2
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 December 30 of each year in which there is a Reset Date to and including such Reset Date. Reset Date means December 30, 2027 and each date falling on the fifth anniversary of the preceding Reset Date.
On June 30, 2025, we redeemed in whole our outstanding 6.375% Fixed-Rate Reset Perpetual Non-Cumulative Preferred Stock, Series C for $600 million.
See Note 12 – Equity to the consolidated financial statements in our 2024 Annual Report 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. 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 June 30, 2025.
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 June 30, 2025 and December 31, 2024, the revolving note payable had an outstanding balance of $2.2 billion and $1.6 billion, respectively.
Capital
We believe we have a strong capital position and are well positioned to meet policyholder and other obligations. 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. The amount of capital required to support our core operating strategies is determined based upon internal modeling and analysis of economic risk, as well as inputs from rating agency capital models and consideration of both NAIC risk-based capital (RBC) and Bermuda capital requirements. Capital in excess of this required amount is considered excess equity capital, which is available to deploy.
As of December 31, 2024 and 2023, our US insurance companies’ total adjusted capital (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. The formulas for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of TAC to its authorized control level RBC. Our TAC was significantly in excess of all regulatory standards as of December 31, 2024 and 2023, respectively.
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. Our Bermuda insurance companies adhere to BMA regulatory capital requirements to maintain statutory capital and surplus to meet the minimum margin of solvency and maintain minimum economic balance sheet (EBS) capital and surplus to meet the enhanced capital requirement. Under the EBS framework, assets are recorded at market value and insurance reserves are determined by reference to nine prescribed scenarios, with the scenario resulting in the highest reserve balance being ultimately required to be selected. For the Bermuda group, which includes the capital and surplus of AARe and all of its subsidiaries, including Athene Annuity and Life Company and its subsidiaries, the final EBS capital and surplus and Bermuda Solvency Capital Requirement (BSCR) ratio as of December 31, 2024 were $28.9 billion and 243%, respectively. EBS capital and surplus and the BSCR ratio as of December 31, 2023 were $26.6 billion and 291%, 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. The Bermuda RBC ratio is calculated using Bermuda capital and applying NAIC RBC factors on an aggregate basis, excluding US subsidiaries which are included within our US RBC ratio. 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 are currently assessing deferred taxes that may be recorded on a statutory basis as a result of the Bermuda CIT, which could have a positive impact on the statutory capital and surplus of our Bermuda insurance companies.
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. Our consolidated regulatory capital represents the aggregate capital of our US and Bermuda insurance entities, determined with respect to each insurance entity by applying the statutory accounting principles applicable to each such entity with adjustments made to, among other things, assets and expenses at the holding company level. The consolidated RBC ratio is calculated by aggregating US RBC and Bermuda RBC.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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. ALRe directly owns 37% of the economic interests in ACRA 1 and all of ACRA 1’s voting interests, with ADIP I owning the remaining 63% of the economic interests. The commitment period for ACRA 1 expired in August 2023.
ACRA 2 – Similar to ACRA 1, we funded ACRA 2 in December 2022 as another long-duration, on-demand capital vehicle. ALRe directly owns 37% of the economic interests in ACRA 2 and all of ACRA 2’s voting interests, with ADIP II owning the remaining 63% of the economic interests. ACRA 2 participates in certain transactions by drawing a portion of the required capital for such transactions from third-party investors equal to ADIP II’s proportionate economic interests in ACRA 2.
These stockholder-friendly, strategic capital solutions allow us the flexibility to simultaneously deploy capital across multiple accretive avenues, while maintaining a strong financial position.
Critical Accounting Estimates and Judgments
The preparation of consolidated financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Amounts based on such estimates involve numerous assumptions subject to varying and potentially significant degrees of judgment and uncertainty, particularly related to the future performance of the underlying business, and will likely change in the future as additional information becomes available. Critical estimates and assumptions are evaluated on an ongoing basis based on historical developments, market conditions, industry trends and other information that is reasonable under the circumstances. There can be no assurance that actual results will conform to estimates and assumptions and that reported results of operations will not be materially affected by the need to make future accounting adjustments to reflect periodic changes in these estimates and assumptions. Critical accounting estimates are impacted significantly by our methods, judgments and assumptions used in the preparation of the condensed consolidated financial statements and should be read in conjunction with our significant accounting policies described in Note 1 – Business, Basis of Presentation and Significant Accounting Policies to the consolidated financial statements of our 2024 Annual Report. The most critical accounting estimates and judgments include those used in determining:
•fair value of investments;
•impairment of investments and allowances for expected credit losses;
•derivatives valuation, including embedded derivatives;
•future policy benefits;
•market risk benefits;
•consolidation of VIEs; and
•income taxes.
The above critical accounting estimates and judgments are discussed in detail in Part II—Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates and Judgments of our 2024 Annual Report.
For a discussion of new accounting pronouncements affecting us, see Note 1 – Business, Basis of Presentation and Significant Accounting Policies to the condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
We regularly analyze our exposure to market risks, which reflect potential losses in value due to credit and counterparty risk, interest rate risk, currency risk, commodity price risk, equity price risk and inflation risk. As a result of that analysis, we have determined that we are primarily exposed to credit risk, interest rate risk, equity price risk and inflation risk. A description of our market risk exposures, including strategies used to manage our exposure to market risk, may be found under Part II—Item 7A. Quantitative and Qualitative Disclosures About Market Risks of our 2024 Annual Report.
There have been no material changes to our market risk exposures from those previously disclosed in our 2024 Annual Report.
We maintain disclosure controls and procedures as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Executive Chairman, Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Executive Chairman, Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Executive Chairman, Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at attaining the level of reasonable assurance noted above.
Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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. 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 proceeding or claim 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.
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 the government in audits or investigations. 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.
Descriptions of certain legal proceedings affecting us, if any, are included in Note 12 – Commitments and Contingencies to the consolidated financial statements.
Item 1A. Risk Factors
There have been no material changes to our risk factors from those previously disclosed in Part I–Item 1A. Risk Factors of our 2024 Annual Report.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities
None.
Item 5. Other Information
During the three months ended June 30, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of AHL adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K with respect to any of AHL’s securities.
Amendments to Certificate of Incorporation
On August 5, 2025, a Certificate of Amendment (the Certificate of Amendment) to AHL’s Certificate of Incorporation was filed for the purpose of effecting: (i) a reverse stock split of AHL’s issued and outstanding shares of common stock, par value $0.001 per share (Common Stock), at a ratio of 1-for-1,000 (the Reverse Stock Split), and (ii) a reduction in the number of authorized shares of Common Stock from 360,000,000 to 250,000 and of AHL’s preferred stock, $1.00 par value per share (Preferred Stock), from 40,000,000 to 200,000 (Authorized Share Reduction). The Certificate of Amendment was effective as of 4:54 p.m., Eastern Time, on August 5, 2025 (the Effective Time).
As of the Effective Time, every one thousand (1,000) shares of Common Stock issued and outstanding immediately prior to the Effective Time was automatically reclassified and combined into one (1) share of Common Stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise be entitled to a fractional share of Common Stock are instead entitled to a cash payment equal to the fraction multiplied by the fair value per share of the Common Stock, as determined by AHL’s Board of Directors or Chief Financial Officer. The par value of the Common Stock remains unchanged as a result of the Reverse Stock Split. Following the Reverse Stock Split, all of AHL’s issued and outstanding shares of Common Stock continue to be owned by Apollo Global Management, Inc. The Reverse Stock Split does not have any impact on the holders of Preferred Stock or the depositary shares representing a 1/1000th interest in a share of Preferred Stock. The Reverse Stock Split and Authorized Share Reduction were effected to enhance operational efficiencies and streamline our capital structure.
The foregoing description of the Certificate of Amendment does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the Certificate of Amendment, a copy of which is filed with this report as Exhibit 3.4 and incorporated herein by reference.
On August 5, 2025, AHL’s Board of Directors (Board) approved a restructuring of its governance framework to eliminate the Conflicts Committee and to delegate the responsibilities previously assigned to that committee to the Board’s Audit Committee (the Conflicts Committee Restructuring). In connection with the Conflicts Committee Restructuring, the Board also approved Amended and Restated Bylaws (the Bylaws) to reflect these changes, including the removal of all references to the Conflicts Committee, and the delegation of responsibility for reviewing certain conflicts of interest involving us, on the one hand, and members of the Apollo Group (as defined in our Related Party Transactions Policy), on the other hand, to the Audit Committee.
The foregoing description of the Bylaws does not purport to be complete and is subject to and qualified in its entirety to the full text of the Bylaws, a copy of which is filed with this report as Exhibit 3.5 and incorporated herein by reference.
Termination of Cooperation Agreement
We and Athora are parties to that certain Amended and Restated Cooperation Agreement, dated as of May 6, 2025 (Cooperation Agreement). See Note 11 – Related Parties—Other related party transactions—Athora Holding Ltd. (Athora) to the condensed consolidated financial statements for a description of the Cooperation Agreement and our investments in Athora. On August 5, 2025, we and Athora entered into a letter agreement to mutually terminate the Cooperation Agreement effective as of such date (the Termination Agreement).
The foregoing descriptions of the Cooperation Agreement and Termination Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Cooperation Agreement, which was previously filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q on May 7, 2025, and the full text of the Termination Agreement, a copy of which is filed with this report as Exhibit 10.3, each of which is incorporated herein by reference.
Item 6. Exhibits
The exhibits listed in the Exhibit Index immediately below are filed as part of this report, which Exhibit Index is incorporated by reference herein.
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema.
101.CAL
XBRL Taxonomy Extension Calculation Linkbase.
101.LAB
XBRL Taxonomy Extension Label Linkbase.
101.PRE
XBRL Taxonomy Extension Presentation Linkbase.
101.DEF
XBRL Taxonomy Extension Definition Linkbase.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ATHENE HOLDING LTD.
Date: August 7, 2025
/s/ Louis-Jacques Tanguy
Louis-Jacques Tanguy
Executive Vice President and Chief Financial Officer
(principal financial officer and duly authorized signatory)
