Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

Aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $2,227,345,118$2,945,865,287 based on the closing price of $24.71$32.32 per share, the closing price of the common stock on the New York Stock Exchange on June 30, 2020.2021.

Shares of common stock outstanding as of February 25, 2021: 95,433,99123, 2022: 96,949,174

Documents incorporated by reference: Portions of the registrant's definitive proxy statement for the annual meeting of shareholders to be held June 10, 2021,2022, which will be filed within 120 days after December 31, 2020,2021, are incorporated by reference into Part III of this report.

We are a leader in the development and sale of fixed index and fixed rate annuity products. We were incorporated in the state of Iowa on December 15, 1995. We issue fixed annuity products through our wholly-owned life insurance subsidiaries, American Equity Investment Life Insurance Company ("American Equity Life"), American Equity Investment Life Insurance Company of New York ("American Equity Life of New York") and Eagle Life Insurance Company ("Eagle Life"). We have one business segment which represents our core business comprised of the sale of fixed index and fixed rate annuities. We are licensed to sell our products in 50 states and the District of Columbia. Throughout this report, unless otherwise specified or the context otherwise requires, all references to "American Equity", the "Company", "we", "our" and similar references are to American Equity Investment Life Holding Company and its consolidated subsidiaries.

While the business looks considerably different today than it did when it was started back in 1995, the themes have been consistent. We offer our customers simple fixed and fixed index annuity products, which we primarily sell through independent insurance agents in the independent marketing organization (“IMO”) distribution channel. We have consistently been a leader in the IMO market. We benefit from two secular trends: the demographic trends of people retiring or getting close to retirement who want to accumulate wealth through index based investing while protecting their principal and the need of retirees and pre-retirees to have a way to deaccumulate their wealth into income for life. A traditional brokerage based equity bond portfolio can’t really meet these unique needs, but a fixed index annuity can as part of holistic financial plan. Finally, there is a scarcity value to what we do: that is originating billions of dollars of annuity funding each year at scale from the IMO channel, which is generally longer term funding than that achieved through sales in the bank and broker dealer channel.

In the past decade, the fixed and fixed index annuity market has seen many new entrants and as a result has become more competitive. Adding to that, low interest rates have made it more difficult for traditional, core investment grade fixed income asset allocations to support return expectations on annuity liabilities.

With these changes in the macro environment, we are in the process of implementingbegan to implement an updated strategy, referred to as AEL 2.0, after having undertaken a thorough review of our business in 2020. AEL 2.0 is designed to capitalize on the scarcity value of our annuity origination and couple it with an “open architecture” investment management platform for investing the annuity assets. Our approach to investment management is to partner with best in class investment management firms across a wide array of asset classes and capture part of the asset management value chain economics for our shareholders. This enables AELwill enable us to operate at the intersection of both asset management and insurance. Our updated strategy focuses on four key pillars: Go-to-Market, Investment Management, Capital Structure and Foundational Capabilities.

The Go-to-Market pillar focuses on how we generate long-term client assets, referred to as policyholder funds under management, through annuity product sales. We consider our marketing capabilities and franchise to be one of our core competitive strengths. The liabilities we originate result in stable, long-term attractive funding, which is invested to earn a spread and return over the prudent level of risk capital. American Equity Life has become one of the leading insurance companies in the IMO distribution channel over our 25-year history and can

tap into a core set of loyal independent producers to originate new annuity product sales. We are focused on growing our loyal producers with one million dollars or greater of annuity product sales each year. We plan to increase our share of annuity product sales generated by IMOs and accelerate our expansion into bank, broker dealer and registered investment advisor distribution through our subsidiary, Eagle Life. Our strategy is to improve sales execution and enhance producer loyalty with product solutions, focused marketing campaigns, distribution analytics to enhance both sales productivity and producer engagement and new client engagement models that complement traditional physical face-to-face interactions,interactions.

The Investment Management pillar enables theis focused on generating a strong return on assets towhich, in turn, will generate adequate spread income.income to support our liabilities, operations, and profitability. In an environment where risk free interest rates are between zero and one percent,continue to be historically low, insurers need to invest for better risk-adjusted yields than what are available in traditional fixed income securities. Our investment strategy is to look for opportunities to investsupplement our core fixed income investment portfolio with opportunistic investments in alpha-producing specialty sub-sectors like middle market credit and sectors with contractually strong cash flows like real estate and infrastructure. Our investment managementWe execute on this strategy includesby forming partnerships with certain asset managers that will provide access to specific asset sectors, resulting in a sustainable supply of quality private investments, in addition to traditional fixed income securities. The partnerships with asset managers may include us taking an equity interest in the asset manager to create greater alignment or forming an alternate economic sharing arrangement so we benefit as our partners scale their platforms with third party assets under management.

The Capital Structure pillar is focused on greater use of reinsurance structuring to both optimize asset allocation for our balance sheet and enable American Equity Life to free up capital and become a capital-light company over time. We are workingworked diligently to complete in 2021 the announced reinsurance partnershipspartnership with Värde Partners and Agam Capital Management, LLC and their affiliated entities (collectively, "Värde/Agam") as well as Brookfield Asset Management Inc.Reinsurance Partners Ltd. and its affiliated entities (collectively, "Brookfield Reinsurance" or "Brookfield") and the formation of our own reinsurance platform. These transactionsplatforms. The use of reinsurance will enable us to achieve three business outcomes over time: first, free up capital to potentially return to shareholders, second, redeploy capital into higher yielding alpha generating assets to grow investment income relative to new money yields in a traditional core fixed income portfolio and third, successfully demonstrating the first two outcomes will allow us to raise third-party capital into reinsurance vehicles ("side-cars") to provide risk capital to back a portion of our existing liabilities and future sales of annuity products. This will enable us to convert from an investment spread business with our own capital at risk into a combination spread based and fee based business with externally sourced risk capital. In combination, these three outcomes are likely to generate sustained, deployable capital for shareholders and significant accretion in return on equity (“ROE”) over time.

The Foundational Capabilities pillar is focused on upgrading our operating platform to enhance the digital customer experience, create differentiation through data analytics to support the first three pillars, enhance core technology and align talent. We have maintained high quality personal service as one of our highest priorities since our inception and continue to strive for an unprecedented level of timely and accurate service to both our agents and policyholders. Examples of our high quality service include a live person answering phone calls and issuing policies within 24 hours of receiving the application if the paperwork is in good order. We believe high quality service is one of our strongest competitive advantages and the foundational capabilities pillar will look to continue to enhance our high quality service.

The combination of differentiated investment strategies and increased capital efficiency improves annuity product competitiveness, thereby enhancing new business growth potential and further strengthening the operating platform. This completes the virtuous cycle of the AEL 2.0 business model, having started with a strong, at scale annuity originator, that is even further strengthened by the power of the investments and capital structure pillars.

Annuities offer our policyholders a tax-deferred means of accumulating retirement savings, as well as a reliable source of income during the payout period. When our policyholders deposit cash for an annuity, we account for these receipts as policy benefit reserves in the liability section of our consolidated balance sheet. The annuity deposits collected, by product type, during the three most recent fiscal years are as follows:

The initial caps and participation rates are largely a function of the cost of the call options we purchase to fund the index credits, the interest rate we can earn on invested assets acquired with new annuity deposits and the rates offered on similar products by our competitors. For subsequent adjustments to caps and participation rates, we take into account the cost of the call options we purchase to fund the index credits, yield on our investment portfolio, annuity surrender and withdrawal assumptions and crediting rate history for particular groups of annuity policies with similar characteristics.

Fixed rate deferred annuities include annual, multi-year rate guaranteed products ("MYGAs") and single premium deferred annuities ("SPDAs") . Our annual reset fixed rate annuities have an annual interest rate (the "crediting rate") that is guaranteed for the first policy year. After the first policy year, we have the discretionary ability to change the crediting rate once annually to any rate at or above a guaranteed minimum rate. Our MYGAs and SPDASSPDAs are similar to our annual reset products except that the initial crediting rate on MYGAs is guaranteed for up to seven years before it may be changed at our discretion while the initial crediting rate on SPDAs is guaranteed for either three or five years. The minimum guaranteed rate on our annual reset fixed rate deferred annuities ranges from 1%1.00% to 4%4.00%, the initial guaranteed rate on our multi-year rate guaranteed deferred annuities ranges from 1.25%1.00% to 3.35%4.00% and the initial guaranteed rate on our SPDAs ranges from 2.40%1.45% to 3.25%2.65%.

The initial crediting rate is largely a function of the interest rate we can earn on invested assets acquired with new annuity deposits and the rates offered on similar products by our competitors. For subsequent adjustments to crediting rates, we take into account the yield on our investment portfolio, annuity surrender and withdrawal assumptionsexperience factors and crediting rate history for particular groups of annuity policies with similar characteristics. As of December 31, 2020,2021, crediting rates on our outstanding fixed rate deferred annuities generally ranged from 1.0% to 4.0%. The average

crediting rates on our outstanding annual reset and multi-year rate guaranteed fixed rate deferred annuities at December 31, 20202021 were 1.66%1.64% and 2.60%2.37%, respectively.

We also sell single premium immediate annuities ("SPIAs"). Our SPIAs provide a series of periodic payments for a fixed period of time or for life, according to the policyholder's choice at the time of issue. The amounts, frequency and length of time of the payments are fixed at the outset of the annuity contract. SPIAs are often purchased by persons at or near retirement age who desire a steady stream of payments over a future period of years.

Policyholders are typically permitted penalty-free withdrawals up to 10% of the contract value in each year after the first year, subject to limitations. Withdrawals in excess of allowable penalty-free amounts are assessed a surrender charge during a penalty period which ranges from 5 to 17 years for fixed index annuities and 3 to 15 years for fixed rate annuities from the date the policy is issued. This surrender charge initially ranges from 5% to 20% for fixed index annuities and 8% to 20% for fixed rate annuities of the contract value and generally decreases by approximately one-half to two percentage points per year during the surrender charge period. For certain policies, the premium bonus is considered in the establishment of the surrender charge percentages. For other policies, there is a vesting schedule ranging from 9 to 14 years that applies to the premium bonus and any interest earned on that premium bonus. Surrender charges and bonus vesting are set at levels aimed at protecting us from loss on early terminations and reducing the likelihood of policyholders terminating their policies during periods of increasing interest rates. This practice enhances our ability to maintain profitability on such policies. Policyholders may elect to take the proceeds of the annuity either in a single payment or in a series of payments for life, for a fixed number of years or a combination of these payment options.

Investment activities are an integral part of our business, and net investment income is a significant component of our total revenues. Profitability of our annuity products is significantly affected by spreads between interest yields on investments, the cost of options to fund the index credits on our fixed index annuities and rates credited on our fixed rate annuities and the fixed rate strategy in our fixed index annuities. We manage the index-based risk component of our fixed index annuities by purchasing call options on the applicable indices to fund the index credits on these annuities and by adjusting the caps, participation rates and asset fees on policy anniversary dates to reflect the change in the cost of such options which varies based on market conditions. All options are purchased on the respective policy anniversary dates, and new options are purchased on each of the anniversary dates to fund the next index credits. All credited rates on annual reset fixed rate deferred annuities and the fixed rate strategy in fixed index annuities may be changed annually, subject to minimum guarantees. Changes in caps, participation rates and asset fees on fixed index annuities and crediting rates on fixed rate and fixed index annuities may not be sufficient to maintain targeted investment spreads in all economic and market environments. In addition, competition and other factors, including the potential for increases in surrenders and withdrawals, may limit our ability to adjust or to maintain caps, participation rates, asset fees and crediting rates at levels necessary to avoid narrowing of spreads under certain market conditions.

We market our products through a variable cost distribution network, including independent agents through IMOs, broker/dealers, banks and registered investment advisors. We emphasize high quality service to our agents, distribution partners and policyholders along with the prompt payment of commissions to our agents and distribution partners. We believe this has been significant in building excellent relationships with our distribution network.

Our independent agents and agencies range in profile from national sales organizations to personal producing general agents. A value proposition that we emphasize with agents is they have direct access to our senior leadership, giving us an edge over larger and foreign-owned competitors. We also emphasize our products, service and our focused fixed annuity expertise. We also have favorable relationships with our IMOs, which have enabled us to efficiently sell through an expanded number of independent agents.

The independent agent distribution system is comprised of insurance brokers and marketing organizations. We are pursuing a strategy to increase the efficiency of our independent agent distribution network by strengthening our relationships with key IMOs and are alert for opportunities to establish relationships with organizations not presently associated with us. These organizations typically recruit agents for us by advertising our products and our commission structure through direct mail advertising or seminars for insurance agents and brokers. We monitor agent activity and will terminate those who have not produced business for us in recent periods and are unlikely to sell our products in the future. The IMOs bear most of the cost incurred in marketing our products. We compensate marketing organizations by paying them a percentage of the commissions earned on new annuity policy sales generated by the agents recruited by such organizations. American Equity

Agents contracted with us through two national marketing organizations accounted for approximately 27%25% of the annuity deposits and insurance premiums collected during 2020,2021, and we expect these organizations to continue as marketers for American Equity Life with a focus on selling our products. The states with the largest share of direct premium collected during 20202021 were: Florida (9.9%(9.3%), Texas (8.0%(7.5%), Ohio (5.7%(6.2%), Pennsylvania (5.5%), and Michigan (5.1%New Jersey (4.8%).

Eagle Life's fixed index and fixed rate annuities are distributed pursuant to selling agreements with broker/dealers, banks and registered investment advisors. Eagle Life has 7184 broker-dealer/firm selling agreements, through which nearly 9,80010,700 representatives are appointed. Twenty threeTwenty-four of these agreements are with broker/dealers affiliated with banks. Relationships with certain of these firms are facilitated by third party wholesalers who promote Eagle Life and are compensated based upon the sales of the firms they have contracted with Eagle Life. We are developing our employee wholesaling force, which will be a key to our success at Eagle Life. Beginning in 2020, the majority of our third-party wholesaling partners no longer market Eagle Life products to new accounts as new account acquisition is handled almost entirely on an internal basis. American Equity Life to a lesser extent also sells through broker/dealers and we have introduced products specifically for this distribution channel.

We operate in a highly competitive industry. Our annuity products compete with fixed index, fixed rate and variable annuities sold by other insurance companies and also with mutual fund products, traditional bank products and other investment and retirement funding alternatives offered by asset managers, banks, and broker/dealers. Our insurance products compete with products of other insurance companies, financial intermediaries and other institutions based on a number of features, including crediting rates, index options, policy terms and conditions, service provided to distribution channels and policyholders, ratings, reputation and distributor compensation.

The sales agents for our products use the ratings assigned to an insurer by independent rating agencies as one factor in determining which insurer's annuity to market. The degree to which ratings adjustments have affected and will affect our sales and persistency is unknown. Following is a summary of American Equity Life's financial strength ratings:

Financial strength ratings generally involve quantitative and qualitative evaluations by rating agencies of a company's financial condition and operating performance. Generally, rating agencies base their ratings upon information furnished to them by the insurer and upon their own investigations, studies and assumptions. Ratings are based upon factors of concern to policyholders, agents and intermediaries and are not directed toward the protection of investors and are not recommendations to buy, sell or hold securities.

In addition to the financial strength ratings, rating agencies use an "outlook statement" to indicate a medium or long-term trend which, if continued, may lead to a rating change. A positive outlook indicates a rating may be raised and a negative outlook indicates a rating may be lowered. A stable outlook is assigned when ratings are not likely to be changed. Outlook statements should not be confused with expected stability of the insurer's financial or economic performance. A rating may have a "stable" outlook to indicate that the rating is not expected to change, but a "stable" outlook does not preclude a rating agency from changing a rating at any time without notice.

In April 2020,March 2021, A.M. Best changedaffirmed its rating outlook on the U.S. life/annuity sector toas ‘negative’ from ‘stable’, reflecting its view that while annuity writers have maintained strong capital and liquidity positions, the COVID-19 virus has added significant volatilitysegment faces a number of challenges and uncertainty to the financial markets.threats. In December 2020,May 2021, Fitch affirmedrevised its rating outlook on the U.S. life insurance sector asto 'stable' from ‘negative’, reflecting its continued concernthe improved macroeconomic environment and reduced concerns regarding the ongoing economic fallout of the COVID-19 virus which could causeasset quality deterioration in key credit metrics over the next one to two years.within general account investment portfolios. In January 2021,2022, S&P affirmed its rating outlook on the U.S. life insurance sector as 'stable', reflecting its viewexpectation that insurerscompanies in the sector will be able to withstand challenges of current economic conditions due to strong capital positions, access to relatively cheap capital, an active transaction market and healthy demand for life and retirement products.

A.M. Best financial strength ratings currently range from "A++" (superior) to "F" (in liquidation), and include 16 separate ratings categories. Within these categories, "A++" (superior) and "A+" (superior) are the highest, followed by "A" (excellent) and "A-" (excellent) then followed by "B++" (good) and "B+" (good). Publications of A.M. Best indicate that the "A-" rating is assigned to those companies that, in A.M. Best's opinion, have demonstrated an excellent ability to meet their ongoing obligations to policyholders.

S&P financial strength ratings currently range from "AAA" (extremely strong) to "R" (under regulatory supervision), and include 21 separate ratings categories, while "NR" indicates that S&P has no opinion about the insurer's financial strength. Within these categories, "AAA" and "AA" are the highest, followed by "A" and "BBB". Publications of S&P indicate that an insurer rated "A-" is regarded as having strong financial security characteristics, but is somewhat more likely to be affected by adverse business conditions than are higher rated insurers.

Fitch financial strength ratings currently range from "AAA" (exceptionally strong) to "C" (distressed). Ratings of "BBB-" and higher are considered to be "secure," and those of "BB+" and lower are considered to be "vulnerable."

A.M. Best, S&P and Fitch review their ratings of insurance companies from time to time. There can be no assurance that any particular rating will continue for any given period of time or that it will not be changed or withdrawn entirely if, in their judgment, circumstances so warrant. If our ratings were to be negatively adjusted for any reason, we could experience a material decline in the sales of our products and the persistency of our existing business, as well as an increase in the cost of debt or equity financing.

We follow the industry practice of reinsuring a portion of our annuity risks with third party reinsurers. Our reinsurance agreements play a part in managing our regulatory capital.capital, risk and returns.

American Equity Life has three coinsurance agreements with Athene Life Re Ltd. ("Athene"), an unauthorized life reinsurer domiciled in Bermuda. One agreement ceded 20% of certain of American Equity Life's fixed index annuities issued from January 1, 2009 through March 31, 2010. The second agreement ceded 80% of American Equity Life's multi-year rate guaranteed annuities issued from July 1, 2009 through December 31, 2013 and 80% of Eagle Life's multi-year rate guaranteed annuities issued from November 20, 2013 through December 31, 2013. The third agreement cedesceded 80% of certain of American Equity Life's and Eagle Life's multi-year rate guaranteed annuities issued on or after January 1, 2014, 80% of Eagle Life's fixed index annuities issued prior to January 1, 2017, 50% of certain of Eagle Life's fixed index annuities issued from January 1, 2017 through December 31, 2018, 20% of certain of Eagle Life's fixed index annuities issued on or after January 1, 2019 and 80% of certain of American Equity Life's fixed index annuities issued from August 1, 2016 through December 31, 2016. Effective January 1, 2021, no new business is being ceded to Athene. The business reinsured under any of the Athene agreements may not be recaptured. Total reserves ceded to Athene were $4.4 billion as of December 31, 2020. American Equity Life is an intermediary for reinsurance of Eagle Life's business ceded to Athene. American Equity Life and Eagle Life remain liable to policyholders with respect to the policy liabilities ceded to Athene should Athene fail to meet the obligations it has coinsured. The annuity deposits that have been ceded to Athene are secured by assets held in trusts and American Equity Life is the sole beneficiary of the trusts. The assets in the trusts are required to remain at a value that is sufficient to support the current balance of policy benefit liabilities of the ceded business on a statutory basis. If the value of the trust accounts would ever be less than the amount of the ceded policy benefit liabilities on a statutory basis, Athene is required to either establish a letter of credit or deposit securities in the trusts for the amount of any shortfall. Athene has received a financial strength rating of "A" (Excellent) with a stable outlook from A.M. Best. Effective January 1, 2021, no new business is being ceded to Athene.

American Equity Life has two coinsurance agreements with EquiTrust Life Insurance Company ("EquiTrust"), covering 70% of certain of American Equity Life's fixed index and fixed rate annuities issued from August 1, 2001 through December 31, 2001, 40% of those contracts issued during 2002 and 2003, and 20% of those contracts issued from January 1, 2004 to July 31, 2004. The business reinsured under these agreements may not be recaptured. Total reserves ceded to Equitrust were $0.4 billion at December 31, 2020. We remain liable to policyholders with respect to the policy liabilities ceded to EquiTrust should EquiTrust fail to meet the obligations it has coinsured. EquiTrust has received a financial strength rating of "B++" (Good) with a stable outlook from A.M. Best.

Effective April 1, 2019, we entered into a coinsurance agreement with Hannover Life Reassurance Company of America ("Hannover"), which is treated as reinsurance under statutory accounting practices and as a financing arrangement under U.S. generally accepted accounting principles ("GAAP"). The statutory surplus benefit under this agreement is eliminated under GAAP and the associated charges are recorded as risk charges and included in other operating costs and expenses in the consolidated statements of operations. The agreement, which replaced a previous agreement with Hannover, became effective April 1, 2019 and is a coinsurance funds withheld reinsurance agreement for statutory purposes covering 80% of lifetime income benefit rider payments in excess of policy fund values and waived surrender charges related to penalty free withdrawals on certain business. We may recapturebusiness (the "2019 Hannover Agreement"). The 2019 Hannover Agreement was treated as reinsurance under statutory accounting practices and as a financing arrangement under U.S. generally accepted accounting principles ("GAAP"). Under GAAP, the risks reinsuredstatutory surplus benefit under thisthe 2019 Hannover Agreement was eliminated and the associated charges were recorded as risk charges that were included in other operating costs and expenses in the consolidated statements of operations. Effective October 1, 2021, we recaptured the 2019 Hannover agreement.

Effective October 1, 2021, American Equity Life entered into a coinsurance agreement without penalty aswith AEL Re Vermont Inc., a wholly-owned captive reinsurance company, to cede a portion of lifetime income benefit rider payments in excess of policy fund values on a funds withheld basis ("the AEL Re Vermont Agreement"). In connection with the agreement, AEL Re Vermont entered into an excess of loss reinsurance agreement (the "XOL treaty") with Hannover, to retrocede the lifetime income benefit rider payments in excess of the endpolicy fund values ceded under the AEL Re Vermont Agreement upon exhaustion of the accounting periodfunds withheld account balance under the AEL Re Vermont Agreement.

AEL Re Vermont is permitted to carry the XOL treaty as an admitted asset on the AEL Re Vermont statutory balance sheet. The XOL treaty does not satisfy risk transfer and is treated as a financing agreement. The associated charges are recorded as risk charges that are included in which every reinsured policyother operating costs and expenses in the issue year cohort reaches its 12th anniversary date. We can electconsolidated statements of operations.

Effective December 31, 2021, American Equity Life entered into a coinsurance agreement with AEL Re Bermuda, an affiliated Bermuda reinsurer wholly owned by American Equity Investment Life Holding Company, to recapture the business by issue year cohort any time prior to the 12th anniversary date however we are subject to payingreinsure a make-whole payment to Hannoverquota share of fixed index annuities issued from January 1, 1997 through December 31, 2007 on a funds withheld basis.

The impact of all intercompany reinsurance agreements and related intercompany balances have been eliminated in the eventpreparation of an early recapture. The agreement incentivizes us to recapture the business on or before the 12th anniversary of each issue year cohort.accompanying consolidated financial statements.

Life insurance companies are subject to regulation and supervision by the states in which they transact business. State insurance laws establish supervisory agencies with broad regulatory authority, including the power to:

Our life subsidiaries are subject to periodic examinations by state regulatory authorities. In 2020, the Iowa Insurance Division completed financial examinations of American Equity Life and Eagle Life for the five-year period ending December 31, 2018. There were no adjustments to American Equity Life's or Eagle Life's statutory financial statements as a result of these examinations. In 2020, the New York Insurance Department of Financial Services completed its financial examination of American Equity Life of New York for the five-year period ending December 31, 2018. There were no adjustments to American Equity Life of New York's statutory financial statements as a result of this examination.

The payment of dividends or distributions, including surplus note payments, by our life subsidiaries is subject to regulation by each subsidiary's state of domicile's insurance department. Currently, American Equity Life may pay dividends or make other distributions without the prior approval of the Iowa Insurance Commissioner, unless such payments, together with all other such payments within the preceding twelve months, exceed the greater of (1) American Equity Life's statutory net gain from operations for the preceding calendar year, or (2) 10% of American Equity Life's statutory surplus at the preceding December 31.prior year-end. For 2021,2022, up to $372.9$407.9 million can be distributed as dividends by American Equity Life without prior approval of the Iowa Insurance Commissioner. In addition, dividends and surplus note payments may be made only out of earned surplus, and all surplus note payments are subject to prior approval by regulatory authorities. American Equity Life had $2.1$2.4 billion of statutory earned surplus at December 31, 2020.2021.

Most states have also enacted regulations on the activities of insurance holding company systems, including acquisitions, extraordinary dividends, the terms of surplus notes, the terms of affiliate transactions, corporate governance, risk management, and other related matters. We are registered pursuant to such legislation in Iowa. A number of state legislatures have also considered or have enacted legislative proposals that alter and, in many cases, increase the authority of state agencies to regulate insurance companies and holding company systems.

Most states, including Iowa and New York where our life subsidiaries are domiciled, have enacted legislation or adopted administrative regulations affecting the acquisition of control of insurance companies as well as transactions between insurance companies and persons controlling them. The nature and extent of such legislation and regulations currently in effect vary from state to state. However, most states require administrative approval of the direct or indirect acquisition of 10% or more of the outstanding voting securities of an insurance company incorporated in the state. The acquisition of 10% of such securities is generally deemed to be the acquisition of "control" for the purpose of the holding company statutes and requires not only the filing of detailed information concerning the acquiring parties and the plan of acquisition, but also administrative approval prior to the acquisition. In many states, the insurance authority may find that "control" in fact does not exist in circumstances in which a person owns or controls more than 10% of the voting securities. In 2021, Brookfield Reinsurance received Iowa and New York regulatory approval to increase its ownership of our common stock, and chose to increase its ownership to 16%.

Historically, the federal government has not directly regulated the business of insurance. However, federal legislation and administrative policies in several areas, including pension regulation, age and sex discrimination, financial services regulation, securities regulation and federal taxation can significantly affect the insurance business. Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") generally provides for enhanced federal supervision of financial institutions, including insurance companies in certain circumstances, and financial activities that represent a systemic risk to financial stability or the U.S. economy. Under the Dodd-Frank Act, a Federal Insurance Office has been established within the U.S. Treasury Department to monitor all aspects of the insurance industry and its authority may extend to our business, although the Federal Insurance Office is not empowered with any general regulatory authority over insurers. The director of the Federal Insurance Office serves in an advisory capacity to the Financial Stability Oversight Council ("FSOC").

TheGenerally, U.S. federal tax law permits tax deferral on the inside build-up of investment value of certain retirement savings, including annuity andproducts, until a contract distribution has occurred. In general, death benefits paid under a life insurance contract are excluded from taxation. Attractiveness of the Company's products that we market generally providefor some individuals may depend on the policyholder with a federal incomeenacted tax advantage, as compared to certain other savings investments such as certificatesrates and the impact on the value of deposit and taxable bonds, in that federal income taxation on any increases in the contract values (i.e., the "inside build-up") of these products is deferred until it is received by the policyholder. With other savings investments, the increase in value is generally taxed each year as it is realized. Additionally, life insurance death benefits are generally exemptdeferral. Congress from income tax.

American Equity's growth and Independent Contractors

In 2021, we asked team members worked into complete a cultural advantage index survey to assess our two central office locations. Withcultural progress and over 70% responded. We used the onset of COVID-19,results to identify practices we quickly actedshould continue and encourage, as well as areas where we needed to devote more attention to cultivate the culture we need to succeed.

We continue to protect team member health and safeguard our business by sending approximately 91%in light of the COVID-19 pandemic. We engaged over 90% of our workforce remotely in 2021 for substantially all or the overwhelming majority of their work time. We engaged expert advice to work remotely. Safetydesign and deploy safety protocols and facility upgrades were implemented for the essential on-site team members while on-site at our main offices in Iowa, and we added a COVID-19 care program comprised of COVID-19 related paid time off, updatedcontinued to update benefits, offer well-being programs, and enhance management best practices.

Our employee benefits programs are designed to support our growing workforce's evolving needs. Healthcare options for benefit-eligible employees aim to maintain affordable team member contribution and proactively promote physical and mental well-being. In 2020, 89%One measure of the caliber of our benefits in 2021 was that over 85% of our employees electedchose coverage through our medical plans, 90% of employees elected coverage through our dental plan, and 74% of employees elected coverage through oursimilarly high levels chose dental and/or vision plan. Thecoverage. During 2021, the company payspaid an average of 84% of theparticipating employees' monthly medical premium. In addition, we updated our free mental and behavioral health resources in 2020, including on-demand webinars through a web-based vendor. As of December 31, 2020, 27% ofpremiums. We also offered out team members utilized the program.a free robust virtual holistic wellness program, in which hundreds took part.

American Equity team members are eligible to participate in our 401(k) plan once they have completedafter thirty days of employment with us and attained age 18. We match 100% of team member contributions to the 401(k) plan up to 3% of the employee’s total eligible compensation and match 50% of employee contributions up to the next 2% of the employee’s total eligible compensation, subject to the limitations specified in the Internal Revenue Code of 1986 (the “Code”). limitations.

To encourage alignment of employeesWe also align employee and shareholder interests and engender anpromote team members' ownership perspective in the employee population, the Company makes semi-annual discretionary contributions to themindset through our long-standing Employee Stock Ownership Plan (“ESOP”). Employees become eligible once they have completedWe make semi-annual discretionary contributions for all employees after a minimum of six months of service, and their interests in the ESOP become 100% vestedvest after two years of service to the Company.service.

At American Equity, we encourage and invest in a wide variety of professional development opportunities and in-role stretch assignments. Approximately 6,600Our employees expanded their skills and expertise through thousands of hours of training were delivered internally through the American Equityin our Academy for Excellence. In addition, our team members accessed 794 hours of real-timeExcellence and and LinkedIn Learning Content.in 2021. We also provide access toengaged employees through a wide variety of internal and external leadership and subject-matter seminars, degree, and certificate programs.

Our business, financial condition, results of operations and cash flows dependare based on the accuracy of management assumptions and estimates. Significant deviations between estimated and actual results could lead to significant gains or losses and significant volatility in our net income.

In addition, our risk management policies, procedures, and models may be imperfect or may not be sufficiently comprehensive. As a result, they may not identify or adequately protect us from every risk to lapse rates. As changes in the value of these embedded derivativeswhich we are recorded as a component of our expenses, changes in these assumptions can result in significant volatility in our reported net income and book value per share

Interest rate increases or decreases could vary significantly. Decreases in value may have an adverse effect on our results of operations or financial condition.

Our investments and their performance, including our derivative financial instruments, are subject to the risks of credit defaults, and market value volatility. These risks could increase when financialvolatility and credit markets are disrupted or subject to extreme volatility, potentially resulting in credit losses on assets in our investment portfolio. We are also subject to the risk that cash flows generated from the collateral underlying our structured products may differ from our expectations in timing or amount.

We also consider all relevant objective information available in estimating the cash flows relatedmay have to residential and commercial mortgage backed securities.

Volatility in the equity market and/Derivatives margin requirements may increase, and we may be required to post collateral. In addition, our costs may increase due to counterparties' higher capital requirements for derivatives. We may need to liquidate higher yielding assets for cash to cover some or interest ratesall of these costs.

Our cost of call options, purchasedwhich we use to fund annual index credits and adversely impact our business, financial condition, results of operations and cash flows.

We are subject to thehave counterparty credit risk of our counterparties, including companies with whom we have reinsurance agreements or have purchased call options.

We may be unable to a ratings downgrade or other negative effects.

Our call options counterparties may fail to reinsurance. If we are unableperform. Our efforts to maintain our current level of reinsurance, the decrease in statutory surplus of American Equity Life couldquality and credit exposure concentration limits may be materialinadequate to its capital position whichmitigate this risk.

Counterparties' failure to perform their derivative instrument obligations may result in a potential decline in its RBC ratio, exposureimpose costs on us to a ratings downgrade or other negative effects.

We utilize and rely onThe third parties towho perform various services for the Company. Failure of these third partiesus, including sales agents, marketing organizations, investment managers, and information technologists, may fail to meet our service level objectives or abide by regulatory requirements could adversely affect our business, financial condition, results of operations and cash flows.

We operate in a highly competitive industry. Many of our competitors are substantiallymay be unable to compete successfully with larger andcompanies who enjoy substantially greaterlarger financial resources, higher ratings by rating agencies, broader and more diversified product lines, higher ratings, and more widespread agency relationships. Our annuity products compete withCustomers may choose fixed index, fixed rate, andor variable annuities sold by other insurance companies, and also withor chose mutual fund products, traditional bank products, and other retirement funding alternatives offered by asset managers, banks and broker/dealers. Our insuranceCompetitors' products compete with those ofmay have competitive or other insurance companies, financial intermediaries and other institutionsadvantages based on a numberdesign, participation

rates and crediting rates, policy terms and conditions, serviceservices provided to distributors and policyholders, ratings by rating agencies, reputation and distributor compensation.

Our abilityWe may be unable to compete depends in part on returns and other benefits we make available to our policyholders through our annuity contracts. We will not be able to offer competitive products if we are unable to invest in assets with attractive and/or competitive yields and thus our investment results underperform the market or the competition, since such underperformance likely would result in lower rates to policyholders which could lead to withdrawals and reduced sales.

We may lose access to or use of our information technology or communications systems could adversely affect our reputation, business, financial condition, results of operations and cash flows.

We must also commit significant resources to maintain and enhance our existing systemsmay be unable to keep pace with industry standards and evolving customer preferences. If we fail to keep up-to-date information systems, we may not be able to rely on information for product design, product pricing and risk management decisions.

The NAIC has adopted the Insurance Data Security Model Law which established theOur efforts and expenses to maintain and enhance our existing systems to keep pace with changing security requirements, industry standards, and evolving customer preferences may be insufficient or misguided, impairing our ability to rely on information for data security, investigation,product design, product pricing, and notification of a breach of data security for insurance companies. An increasing number of state insurance regulatory agencies have adopted a version of the NAIC’s model regulationrisk management decisions. Our extensive backup and now require that affected persons be notified if a security breach results in the disclosure of their personally identifiable information. Any compromise of the cybersecurity of our computerrecovery systems that results in the unauthorized disclosure of personally identifiable customer information could damage our reputation in the marketplace, deter people from purchasing our products, subjectand contingency plans may not prevent system interruptions, failures, or allow us to civil and criminal liability and require us to incur significant technical, legal and other expenses.promptly remediate those that do occur.

We may increasefail to maintain or improve our cost of capital, reduce new sales, adversely affect relationships with distributors and increase policy surrenders and withdrawals.

Financial strength ratings are important factors used by distributors and sales agents in determining which insurer's annuities to market. In recent years, the market for annuities has been dominated by those insurers with the highest ratings. A ratings downgrade, or the potential for a ratings downgrade, could have a number of adverse effects on our business. For example, a ratings downgrade could cause distributors and sales agents to seek alternative carriers. In addition, a ratings downgradestop or reduce our product sales in favor of our competitors, could increase the number ofour policy or contract surrenders, we experience, as well asand harm our ability to obtain reinsurance or obtain reasonable pricing on reinsurance.to do so at competitive prices.

Our long-term capital adequacy will depend on many factors including the accumulated statutory earnings of our life insurance subsidiaries and the relationship between the statutory capital and surplus of our life insurance subsidiaries and various elements of required capital. For the purpose of supporting long-term capital requirements, weWe may need to increase or maintain the statutory capital and surplus of our life insurance subsidiaries, or the capital of our holding company, through additional financings, which could include debt, equity, and/or other surplus relief transactions. AdverseWe may be unable to do so because of adverse market conditions could affect the availability andor high cost of capital. Such financings, if available at all, maycapital, or be availableable to do so only on terms that are not favorable to us. If we cannot maintain adequate capital,unfavorable terms. As a result, we may be requiredhave to limit growth in sales of new annuity products, and such action could adversely affect our business,products. We may also agree to restrictions on other activities, transactions, or financial condition or results of operations.arrangements in order to obtain necessary capital.

Economic and capital markets could suffer downturns, uncertainties, or market disruptions. For example, armed conflict in Europe or elsewhere, sanctions intended to address those conflicts or achieve other ends, COVID-19 and the resulting economic uncertainty,related pandemic, and government and business efforts in reaction to any of these, may adversely impact our business, financial condition and results of operations.

FailureWe may fail to authorize and pay dividends regularly on our preferred stockstock. Unpaid dividends would not accrue, and could result in our inability to pay or declare a dividend on our common stock or purchase,repurchase, redeem or otherwise acquire for consideration anyour common stock. Any such failure would also prevent us from making certain distributions to common shareholders. They may also give preferred shareholders the right to elect members of our Board of Directors or other corporate governance rights that could weaken the rights and interests of common stock, subject to certain limited exceptions.shareholders and other stakeholders.

Our future cash flows may be restricted by law.

notes, term loans, subordinated debentures issued to a subsidiary trust, and others), pay dividends. This would negatively affect our businessoperating expenses and financial condition as well as the trading price of our ordinary shares.

We may be unable to source, negotiate, obtain timely regulatory approval for, and execute the reinsurance, investment management, or third-party-capital arrangements for our strategy to succeed. As parta result, we may not realize our anticipated economic, strategic or other benefits of any such transaction and may incur unforeseen expenses or liabilities. Any reorganization or consolidation of the executionlegal entities through which we conduct business may raise similar risks.

We may make errors or fail to detect incorrect or incomplete information in any of AEL 2.0, we are entering into athe large number of third party reinsurancetransactions we process through our complex administrative systems. Our controls and investment management partnerships, all of which are at varying levels of execution and completion. It is possible, that despite good faith negotiations, we willprocedures to prevent such errors may not reach conclusive agreement with one or more third parties. In such cases,be effective. For example, we may needfail to seek other partnersescheat property timely and completely, or modify the business approach. Therefail to detect, deter or mitigate fraud against us or our customers. We may be unforeseen delaysfail to maintain service standards or to operate efficiently or control costs. In addition, we may fail to attract, motivate and retain employees, develop talent, or adequately plan for management succession. We may also suffer internal control deficiencies or disclosure control deficiencies that result in execution due to reliance on third parties. Regulatory approval of parts of our business plan is always uncertain, which could cause significant modificationsdeficiencies or delays that inhibit the successful execution of our plans. Additionally, as part of Brookfield’s intended equity investment in the company, its investment is subject to several regulatory approvals. These approvals may delay or impact the execution of the Brookfield equity investment and the related reinsurance strategy between the company and Brookfield and its affiliates.material weaknesses.

We face risks relating to litigation and regulatory examination, including the costs of such litigation or examination, management distraction and the potential for damage awards, fines, penalties or other required remediation, which may adversely affect our business, financial condition, results of operations and cash flows.

Any of the Employee Retirement Income Security Actmyriad of 1974, as amended ("ERISA").

State laws, our certificate of incorporation and by-laws, and agreements into which we have entered concerning changes in control may adverselydelay, deter or prevent a takeover attempt that stockholders might consider favorable.

Our investors or others may evaluate our business financial condition, results of operationspractices by continually evolving and cash flows.

Our common stock is traded on the New York Stock Exchange ("NYSE") under the symbol AEL. The following table sets forth the high and low sales prices of our common stock for each quarterly period within the two most recent fiscal years as quoted on the NYSE.

As of February 11, 2021,2022, to the best of our knowledge, there were approximately 21,01129,524 beneficial holders of our common stock. In 20202021 and 2019,2020, we paid an annual cash dividend of $0.32$0.34 and $0.30,$0.32, respectively, per share on our common stock. We intend to continue to pay an annual cash dividend on such shares so long as we have sufficient capital and/or future earnings to do so. Any further determination as to dividend policy will be made by our board of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition and future prospects and such other factors as our board of directors may deem relevant.

The following table presents the amount of our share purchase activity for the periods indicated:

Management's discussion and analysis reviews our consolidated financial position at December 31, 20202021 compared with December 31, 2019,2020, and our consolidated results of operations for the years ended December 31, 20202021 and 2019,2020, and where appropriate, factors that may affect future financial performance. This analysis should be read in conjunction with our audited consolidated financial statements, notes thereto and selected consolidated financial data appearing elsewhere in this report.

For information and analysis relating to our financial condition and consolidated results of operations as of and for the year ended December 31, 2019,2020, as well as for the year ended December 31, 20192020 compared with the year ended December 31, 2018,2019, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2019.2020.

All statements, trend analysis and other information contained in this report and elsewhere (such as in filings by us with the SEC, press releases, presentations by us or management or oral statements) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may relate to markets for our products, trends in our operations or financial results, strategic alternatives, future operations, strategies, plans, partnerships, investments, share buybacks and other financial developments, and are subject to assumptions, risks and uncertainties. Statements such as “guidance”[“guidance”, “expect”, “anticipate”, “strong”, “believe”, “intend”, “goal”, “objective”, “target”, “position”, “potential”, “will”, “may”, “would”, “should”, “can”, “deliver”, “accelerate”, “enable”, “estimate”, “projects”, “outlook”, “opportunity”] or similar words, as well as specific projections of future events or results qualify as forward-looking statements. Forward-looking statements, by their nature, are subject to a variety of inherent risks and uncertainties that could cause actual results to differ materially from the results projected. Many of these risks and uncertainties cannot be controlled by the Company. Factors that may cause our actual decisions or results to differ materially from those contemplated by these forward-looking statements include, among other things:

For a detailed discussion of these and other factors that might affect our performance, see Item 1A of this report.

Excellent customer service teamed with our ability to offer innovative insurance products that provide principal protection and lifetime income continued to result in significant sales of our annuity products. In 2020,2021, our sales were $3.7$6.0 billion which has resulted inincreased cash and investments to a balance in excess of $62$64.0 billion at December 31, 2020.2021. Our sales for the last five years have ranged from $3.7 billion to $7.1$6.0 billion.

Total sales decreasedincreased to $6.0 billion in 20202021 compared to 2019, the fourth quarter of 2020$3.7 billion in 2020. The increase in fixed rate annuity products was the start of our turnaround in the Go-to-Market pillar. Drivendriven by the introduction of competitive three and five-year single premium deferred annuity products at both American Equity Life and Eagle Life, we saw a substantialLife. The increase in fixed index annuity products was driven by product refreshes at both American Equity Life and Eagle Life, including the addition of two new proprietary indices to our refreshed AssetShield product and the introduction of two new products at American Equity Life. Sales levels in 2021 also benefited from an improving sales with total deposits of $1.8 billionenvironment compared to 2020. We lowered crediting rates on our single premium deferred annuity products during the fourth quarter of 2020, doubling from the fourth quarter2021 in order to focus on sales of 2019 and up 221% from the third quarter of 2020. Fixed rate annuities were the major driver of the fourth quarter sales increase, while fixed index annuity sales were also up 23%products as comparedwe believe such products align with the transformation of the Company from a spread based return on equity insurer to the third quartermore of 2020.a fee-based return on asset insurer.

We continue to be in the midst of an unprecedented period of low interest rates and low yields for investments with the credit quality we prefer which presents a strong headwind to achieving our target rate for investment spread.prefer. In response, we have been reducing policyholder crediting rates for new annuities and existing annuities. Active management of policyholder crediting rates resulted in a lower aggregate cost of money during 2020.2021. We continue to have flexibility to reduce our crediting rates if necessary and could decrease our cost of money by approximately 62 basis points if we reduce current rates to guaranteed minimums. Investment yieldsWe now have 7 sleeves of private asset sectors in which we have conviction, specifically as a landlord in both single family rental homes and multi-family apartments, residential whole loans for individuals and professional investors, infrastructure debt, infrastructure equity, with a priority around sub-sectors like energy transition, middle market loans to private companies, and annual recurring revenue based lending to companies in the software and technology sector. During 2021, we deployed $3.4 billion in private assets with expected returns in the 5.1% to 5.2% range. In aggregate, we successfully repositioned the portfolio in 2021 with close to $10 billion of new assets purchases resulting in an estimated portfolio yield 3.85% at the end of 2021. We are on fixed income securities purchased and commercial mortgage loans fundedtrack to achieve close to or above 4% aggregate portfolio yield in 2020 decreased compared to 2019 due to a general decline in interest rates. As previously noted,2022 as part of the Investment Management pillar, we intend tofurther ramp up our allocation in private assets from approximately 15% at year-end 2021 to alpha assets by partnering with proven asset managers in our focus expansion sectors of middle market credit, real estate, infrastructure debt and agricultural loans.

On October 18, 2020, the Company's Board of Directors approved a $500 million share repurchase program. The purpose of the share repurchase program is to both offset dilution from the issuance of shares to Brookfield and to institute a regular cash return program for shareholders. We startedOn November 19, 2021, the buyback program on October 30, 2020 andCompany's Board of Directors authorized the repurchase of an additional $500 million of Company common stock. As of December 31, 2021, we have repurchased 1.9approximately 9.1 million shares of our common stock for $50at an average price of $29.04 per common share. Through February 25, 2022, we have repurchased approximately 11.6 million in the open market.

We specialize in the sale of individual annuities (primarily fixed and fixed index deferred annuities) through IMOs, agents, banks and broker-dealers. Fixed and fixed index annuities are an important product for Americans looking to fund their retirement needs as annuities have the ability to provide retirees a paycheck for life.

Under U.S. GAAP, premium collections for deferred annuities are reported as deposit liabilities instead of as revenues. Similarly, cash payments to policyholders are reported as decreases in the liabilities for policyholder account balances and not as expenses. Sources of revenues for products accounted for as deposit liabilities are net investment income, surrender charges assessed against policy withdrawals and fees deducted from policyholder account balances for lifetime income benefit riders, net realized gains (losses) on investments and changes in fair value of derivatives. Components of expenses for products accounted for as deposit liabilities are interest sensitive and index product benefits (primarily interest credited to account balances and changes in the liability for lifetime income benefit riders), changes in fair value of embedded derivatives, amortization of deferred sales inducements and deferred policy acquisition costs, other operating costs and expenses and income taxes.

Our profitability depends in large part upon:

Life insurance companies are subject to NAIC RBC requirements and rating agencies utilize a form of RBC to partially determine capital strength of insurance companies. Our RBC ratio at bothDecember 31, 2021 and December 31, 2020 was 400% and December 31, 2019 was 372%., respectively.

We intend to manage our capitalization in normal economic conditions at a level that is consistent with a 400% RBC ratio; and allow it torating agency capital at or above the A-level. It may drift downwards, if necessary to approximately 320% RBCat times, for reasons including, but not limited to, realized credit losses or temporary increases in required risk capital for ratings migrations. This level is intended to reflect a level that is consistent with the rating agencies expectations for capital adequacy ratios at different points in an economic cycle. This implies operating with a peak to trough swing whereby capital is absorbing risk at the low point of the economic cycle. As economic activity recovers, we would expect to grow capital adequacy back to or near the 400% RBC ratio level through a combination of earnings and balance sheet optimization actions while continuing to execute on our core business strategy.

On August 21, 2020 S&P affirmed its "A-" financial strength rating on American Equity Life and its "BBB-" long-term issuer credit rating on American Equity Investment Life Holding Company, and revised its outlook to "stable" from "negative" primarily due to capital management actions taken throughout the year, including a $200 million contribution from American Equity Investment Life Holding Company to American Equity Life and the issuance of Fixed-Rate Reset Non-Cumulative Stock, Series B for aggregate net proceeds of $290.3 million.during 2020.

On June 26, 2020,July 29, 2021, A.M. Best affirmed its "A-" financial strength rating ofon American Equity Investment Life Insurance Company and its subsidiaries, American Equity Investment Life Insurance Company of New York and Eagle Life Insurance Company, its "bbb-" long-term issuer credit rating of American Equity Investment Life Holding Company, its "bbb-" senior unsecured debt ratings, and its "bb" perpetual, non-cumulative preferred stock ratings. The outlook for these credit ratings of "stable" was also affirmed by A.M. Best on June 26, 2020.July 29, 2021.

On April 24, 2020,14, 2021, Fitch affirmed its "A-" financial strength rating on American Equity Investment Life Insurance Company and its life insurance subsidiaries, its "BBB" issuer default rating on American Equity Investment Life Holding Company and its "BBB-" senior unsecured debt ratings, butand revised its outlook to "negative""stable" from "stable""negative" on its financial strength, issuer default and senior unsecured debt ratings due to disruption to economic activity and the financial markets from the COVID-19 pandemic.ratings.

Earnings from products accounted for as deposit liabilities are primarily generated from the excess of net investment income earned over the interest credited or the cost of providing index credits to the policyholder, or the "investment spread." Our investment spread is summarized as follows:

The cost of money for fixed index annuities and average crediting rates for fixed rate annuities are computed based upon policyholder account balances and do not include the impact of amortization of deferred sales inducements. See Critical Accounting Policies—Policies and Estimates—Deferred Policy Acquisition Costs and Deferred Sales Inducements. With respect to our fixed index annuities, the cost of money includes the average crediting rate on amounts allocated to the fixed rate strategy and expenses we incur to fund the annual index credits. Proceeds received upon expiration of call options purchased to fund annual index credits are recorded as part of the change in fair value of derivatives, and are largely offset by an expense for interest credited to annuity policyholder account balances. See Critical Accounting Policies and Estimates - Policy Liabilities for Fixed Index Annuities and Financial Condition - Derivative Instruments.

Annuity deposits by product type collected during 2021, 2020 2019 and 2018,2019, were as follows:

Annuity deposits before coinsurance ceded decreased 26%increased 62% during 20202021 compared to 2019.2020. Annuity deposits after coinsurance ceded decreased 22%increased 52% during 20202021 compared to 2019.2020. The decreaseincrease in sales in 20202021 compared to 20192020 was primarily due todriven by the impactsales of the COVID-19 pandemic, including limitations on face to face meetingsmulti-year fixed rate annuity products introduced in late 2020 at both American Equity Life and Eagle Life and increased social distancing requirements, as well as competitive pressures within each of our distribution channels. We continue to face a challenging environment for sales of fixed index annuities at both American Equity Life and Eagle Life. This growth is due to a highly competitive market.fixed index annuity product refreshes at both American Equity Life and Eagle Life, the introduction of two new products at American Equity Life and strong sales of single premium deferred annuity products at both Eagle Life and American Equity Life during the first three quarters of 2021. Sales levels in 2021 also benefited from an improving sales environment compared to 2020.

We coinsurePrior to January 1, 2021, we had been ceding 80% of the annuity deposits received from certain multi-year rate guaranteed annuities and 20% of certain fixed index annuities sold by Eagle Life through broker/dealers and banks. The decreasebanks to an unaffiliated reinsurer. Beginning January 1, 2021, no new business is being ceded to the unaffiliated reinsurer. Effective July 1, 2021, we ceded 100% of an in-force block of fixed index annuities and began ceding 75% of certain fixed index annuities issued after July 1, 2021 to North End Re which caused the increase in coinsurance ceded premiums in 2020 was attributable to a decrease in certain multi-year rate guaranteed annuities and fixed index annuities sold by Eagle Life during 2020for the year ended December 31, 2021 compared to 2019.2020.

We periodically update the key assumptions used in the calculation of amortization of deferred policy acquisition costs and deferred sales inducements retrospectively through an unlocking process when estimates of current or future gross profits/margins (including the impact of realized investment gains and losses) to be realized from a group of products are revised. In addition, we periodically update the assumptions used in determining the liability for lifetime income benefit riders and the embedded derivative component of our fixed index annuity policy benefit reserves as experience develops that is different from our assumptions.

Net income available to common stockholders for 2021, 2020 2019 and 20182019 includes effects from updates to assumptions as follows:

We review these assumptions quarterly and as a result of these reviews, we made updates to assumptions during each year. In addition, we implemented an enhanced actuarial valuation system during 2019, and as a result, our 2019 assumption updates include model refinements resulting from the implementation.

The most significant assumption updates made in 2021 were to investment spread assumptions, including the net investment earned rate and crediting rate on policies, lifetime income benefit rider utilization assumptions, mortality assumptions, and lapse rate assumptions as discussed below. In addition, we made assumption updates to change the reinsurance expense assumption associated with the refinancing of statutory redundant reserves effective October 1, 2021.

The most significant assumption updates from the 2020 review were to investment spread assumptions, including the net investment earned rate and crediting rates on policies, as well as updates to lapse rate and partial withdrawal assumptions.

Due to the current economic and low interest rate environments, we updated our assumption for aggregate investment spread to 2.40% in the near-term increasing to 2.60% over an eight-year reversion period and our assumption for crediting/discount rate to 1.60% increasing to 2.10% over an eight-year reversion period. Prior to these assumption updates, our long-term assumption for aggregate investment spread was steady at 2.60%, with a near term crediting/discount rate of 1.90% increasing to 2.90% over a 20-year reversion period. The assumption update to decrease aggregate investment spread resulted in lower expected future gross profits as compared to previous estimates and a decrease in the balances of deferred policy acquisition costs and deferred sales inducements. The decrease in the crediting rate, which is used as the discount rate in the calculation of the liability for lifetime income benefit riders, resulted in an increase in the liability for lifetime income benefit riders.

We updated lapse rate and partial withdrawal assumptions based on actual historical experience. For certain annuity products without a lifetime income benefit rider, lapse rate and partial withdrawal assumptions were increased while for certain annuity products with a lifetime income benefit rider, lapse rate and partial withdrawal assumptions were decreased. The net impact of the updates to lapse rate and partial withdrawal assumptions resulted in lower expected future gross profits as compared to previous estimates and a decrease in the balances of deferred policy acquisition costs and deferred sales inducements. The net impact of the updates to lapse rate and partial withdrawal assumptions resulted in an increase in the liability for lifetime income benefit riders due to a greater amount of expected benefit payments in excess of account values.

The most significant assumption update to the calculation of the fair value of the embedded derivative component of our fixed index annuity policy benefit reserves during 2020 was a decrease in the crediting rate/option budget to 2.10% from 2.90% as a result of a revised estimate of the cost of options. This assumption change resulted in a decrease in the fair value of the embedded derivative component of our fixed index annuity policy benefit reserves due to a reduction in the projected policy contract values over the expected lives of the contracts. The net impact of the the updates to lapse and partial withdrawal assumptions noted above resulted in an increase in the embedded derivative component of our fixed index annuity policy benefit reserves as more funds ultimately qualify for excess benefits. In addition, during 2020, we refined the derivation of the discount rate used in calculating the fair value of embedded derivatives which increased the discount rate and resulted in a decrease in the change in fair value of embedded derivatives offset by increases in amortization of deferred sales inducements and deferred policy acquisition costs.

In addition to net income available to common stockholders, we have consistently utilized non-GAAP operating income available to common stockholders, a non-GAAP financial measure commonly used in the life insurance industry, as an economic measure to evaluate our financial performance. Non-GAAP operating income available to common stockholders equals net income available to common stockholders adjusted to eliminate the impact of items that fluctuate from year to year in a manner unrelated to core operations, and we believe measures excluding their impact are useful in analyzing operating trends. The most significant adjustments to arrive at non-GAAP operating income available to common stockholders eliminate the impact of fair value accounting for our fixed index annuity business and are not economic in nature but rather impact the timing of reported results. We believe the combined presentation and evaluation of non-GAAP operating income available to common stockholders together with net income available to common stockholders provides information that may enhance an investor's understanding of our underlying results and profitability.

Non-GAAP operating income available to common stockholders is not a substitute for net income available to common stockholders determined in accordance with GAAP. The adjustments made to derive non-GAAP operating income available to common stockholders are important to understand our overall results from operations and, if evaluated without proper context, non-GAAP operating income available to common stockholders possesses material limitations. As an example, we could produce a low level of net income available to common stockholders or a net loss available to common stockholders in a given period, despite strong operating performance, if in that period we experience significant net realized losses from our investment portfolio. We could also produce a high level of net income available to common stockholders in a given period, despite poor operating performance, if in that period we generate significant net realized gains from our investment portfolio. As an example of another limitation of non-GAAP operating income available to common stockholders, it does not include the decrease in cash flows expected to be collected as a result of credit losses on financial assets. Therefore, our management reviews net realized investment gains (losses) and analyses of our net investment income, including impacts related to credit losses, in connection with their review of our investment portfolio. In addition, our management examines net income available to common stockholders as part of their review of our overall financial results.