American Equity Investment Life Holding Company (AEL)

AEL 
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American Equity Investment Life Holding Company (AEL)

Q1 2008 Earnings Call

May 8, 2008 11:00 am ET

Executives

Julie LaFollette - Investor Relations

John Matovina - Vice Chairman of the Board

Kevin Wingert - President; American Equity Life, Director

Wendy Lee Carlson - Chief Financial Officer, General Counsel

Analysts

Randy Binner - Friedman Billings

Mark Finkelstein - FPK

Beth Malone - KeyBanc

Bill Dezellem - Tieton Capital Management

Presentation

Operator

Welcome to the American Equity first quarter 2008 earnings call. (Operator Instructions) For opening remarks and introduction I would like to turn the call over to Julie LaFollette, Investor Relations.

Julie Lafollette

Welcome to American Equity Investment Life Holding Company's conference call to discuss first quarter 2008 earnings. Our earnings release and financial supplement can be found on our website at www.american-equity.com. Presenting on today's call are John Matovina, Vice Chairman, Kevin Wingert, President of the Life Company and Wendy Carlson, Chief Financial Officer.

Some of the comments made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. There are a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Factors that could cause the actual results to differ materially are discussed in detail in our most recent filings with the SEC. An audio replay will be available on our website shortly after today's call.

It is now my pleasure to introduce John Matovina.

John Matovina

It’s a pleasure to be with you this morning. As reported yesterday afternoon operating income for the first quarter of ’08 was $17.7 million, a 17% increase over $15.1 million in the first quarter of 2007 and $0.31 per diluted share. Before my associates get into some of the detail, I would just like to kind of remind you some of the specifics. At American Equity we look at our business as fairly simple things and details you’ll hear on this call are going to be inline with those themes.

We want to go our assets under management and Kevin will talk to you about the favorable sales results we had in the first quarter and our prospects for continued favorable sales results or an acceptable spread which it did improve in the first quarter and Wendy will go through the details of there and of course maintain a high quality asset portfolio and Wendy will also cover the details about that.

So, with that I will turn the call over to Kevin.

Kevin Wingert

First quarter 2008 was a great quarter, $515.2 million of production up 16% from the first quarter of 2007 at $444.5 million of production. Monthly sales for both March and April were up over $200 million; April was our best production month since I believe December of 2005. So, we are having very solid production results at this point, a lot of activity out in the field. It’s a lot of things going on. Maybe I hit some of the meetings to start with. We have been at a lot of NMO meetings; we have touched well over 2000 agents since the beginning of the year. Had 20 plus NMO sponsored meetings, had certainly good results, good support from the NMO’s with service, good quality products still being a theme from American Equity.

If you look at other meetings in other ways that we have touched the agents, we had our Million Dollar Producer Forum out in Las Vegas again this year. We had 300 producers at that meeting, those producers would have represented probably close to a billion dollar of production at that meeting. I think the meeting was very, very well received. We got good responses. We are now working hard to get production out of the people that were at that meeting and about a third, maybe a little more than a third of those producers were producers who had written in the last year with American Equity, so we think there is some good upside potential there.

We have got road shows that begin this week using Jack Marrion from The Advantage Group. I would expect that we will touch 600, 700 agents or more in those road shows over the next three weeks, with a theme of talking about American Equity’s product, our income, our riders and the ability to guarantee income for both Baby Boomers and Senior’s in their retirement years and Jack will be doing some training on behavioral selling. So, I think those meetings will go over well. We continue to have Producer Forums here in the Des Moines.

We have had approximately between 215 and 300 agents in the office, so far this year and I would expect we will get up over 700 agents by the end of the year through the Producers Forums. We are getting a lot more demand from our NMO’s to bring Producers into Des Moines. Let them get to know the company kick the tiers, here our story and we are able to then turn those agents into either new production or for increased production from those folks that are already writing business with us and in fact we have got two groups in Des Moines today.

Next week I will be in Chicago. I’ll be in front of approximately 275 agents from a couple of different groups like marketing groups that are good supporters of American Equity. So, there is a ton of activity going on out there which I think spells good news for production, on a going forward basis.

Read the rest of this transcript for free on seekingalpha.com