American Equity Investment Life Holding Co. CEO Wendy Waugaman was interviewed in the Des Moines Register article “W.D.M. firm’s CEO talks of annuities, economic growth.” American Equity has the second highest sales of fixed equity indexed annuities, just above Aviva USA and behind Allianz Life. The company was started in 1995 and went from selling $150 million of annuities in 1997 to $2 billion in 2001. Their revenue is now up to $28 billion, largely based on sales of fixed equity indexed annuities. Investors look to annuities even more in volatile markets and for good reason. If you had purchased a fixed annuity in 1998 from American Equity for $100,000; the 2010 value would have been over $160,000. In comparison, the same investment in an S&P fund would have been worth just under $109,000.
These guaranteed interest rates make annuities very popular, especially as 401k annuities purchased with some of a retiree’s 401k plan. Waugaman answered questions about everything from annuity basics to the inner workings of American Equity. When asked how American Equity makes money from annuities, she says that it is similar to a bank loaning your money to other people while paying you interest. She says that they are growing faster than other annuity companies because of their excellent customer service to both agents and investors. After being asked about interest rates, she was honest and said that they are frighteningly low. She is hopeful that they will gradually increase so that they can offer higher immediate annuity rates and America can come out of the financial crisis. American Equity has hired 80 people over the last six months and they have been in every area of the business. American Equity is poised to retain their high position in the fixed equity indexed annuities market.