1039828--3/16/2009--AMERICAN_EQUITY_INVESTMENT_LIFE_HOLDING

related topics

{condition, economic, financial}

{loss, insurance, financial}

{acquisition, growth, future}

{personnel, key, retain}

{tax, income, asset}

{product, market, service}

{financial, litigation, operation}

{capital, credit, financial}

{control, financial, internal}

{regulation, government, change}

The current financial crisis has resulted in unprecedented levels of market volatility and an overall deterioration in the debt and equity markets which have adversely affected us and will further adversely affect us if these conditions continue or deteriorate further in 2009. Governmental initiatives intended to alleviate the current financial crisis that have been adopted may not be effective and, in any event, may be accompanied by other initiatives, including new capital requirements or other regulations, that could materially affect our results of operations, financial condition and liquidity in ways that we cannot predict. The markets in the United States and elsewhere have been experiencing unprecedented levels of market volatility and disruption. We are exposed to significant financial and capital risk, including changing interest rates, credit spreads and equity prices which may have an adverse affect on sales of our products, profitability, investment portfolio and reported book value per share. Our valuation of fixed maturity and equity securities may include methodologies, estimates and assumptions which are subject to differing interpretations and could result in changes to investment valuations that may materially adversely affect our results of operations or financial condition. We face competition from companies that have greater financial resources, broader arrays of products, higher ratings and stronger financial performance, which may impair our ability to retain existing customers, attract new customers and maintain our profitability and financial strength. Our reinsurance program involves risks because we remain liable with respect to the liabilities ceded to reinsurers if the reinsurers fail to meet the obligations assumed by them. We may experience volatility in net income due to accounting standards for derivatives. If we do not manage our growth effectively, our financial performance could be adversely affected; our historical growth rates may not be indicative of our future growth. We must retain and attract key employees or else we may not grow or be successful. If we are unable to attract and retain national marketing organizations and independent agents, sales of our products may be reduced. We may require additional capital to support our business and sustained future growth which may not be available when needed or may be available only on unfavorable terms. Changes in state and federal regulation may affect our profitability. Changes in federal income taxation laws, including any reduction in individual income tax rates, may affect sales of our products and profitability. We face risks relating to litigation, including the costs of such litigation, management distraction and the potential for damage awards, which may adversely impact our business. A downgrade in our credit or financial strength ratings may increase our future cost of capital and may reduce new sales, adversely affect relationships with distributors and increase policy surrenders and withdrawals. Our system of internal control ensures the accuracy or completeness of our disclosures and a loss of public confidence in the quality of our internal controls or disclosures could have a negative impact on us.

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1039828--3/16/2009--AMERICAN_EQUITY_INVESTMENT_LIFE_HOLDING_CO