NEWS RELEASE

	For more information, contact: Debra J. Richardson, Sr. Vice President (515) 273-3551, drichardson@american-equity.com John M. Matovina, Vice Chairman (515) 457-1813, jmatovina@american-equity.com D. J. Noble, Chairman (515) 457-1705, dnoble@american-equity.com
FOR IMMEDIATE RELEASE May 7, 2008	Julie L. LaFollette, Investor Relations (515) 273-3602, jlafollette@american-equity.com

American Equity Reports First Quarter 2008 Operating Income

of $17.7 Million or $0.31 Per Diluted Common Share

WEST DES MOINES, Iowa (May 7, 2008) – American Equity Investment Life Holding Company (NYSE: AEL), a leading underwriter of fixed-rate and index annuities, today reported 2008 first quarter operating income1 of $17.7 million, or $0.31 per diluted common share, an increase of 17% over 2007 first quarter operating income of $15.1 million, or $0.26 per diluted common share.  Financial highlights include:

§   Annuity sales of $515.2 million during the first quarter of 2008, an increase of 16% over first quarter 2007 annuity sales of $444.5 million

§   April 2008 annuity sales of $232.3 million, the highest month for new sales since December 2005

§   Improving investment spread on annuity business of 2.59% compared to 2.48% for the fourth quarter of 2007

§   Book value per outstanding common share2 of $12.66 (excluding Accumulated Other Comprehensive Loss)

§   Repurchase of 2.3 million shares of common stock from November 2007 through April 2008 at an average cost per share of $8.64

1           In addition to net income, American Equity has consistently utilized operating income, a non-GAAP financial measure commonly used in the life insurance industry, as an economic measure to evaluate its financial performance.  Operating income equals net income adjusted to eliminate the impact of (i) net realized gains and losses on investments; and (ii) the impact of SFAS 133, dealing with the fair value changes in derivatives and embedded derivatives.  Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, American Equity believes a measure excluding their impact is useful in analyzing operating trends.  American Equity believes the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor’s understanding of American Equity’s underlying results and profitability.  A reconciliation of net income to operating income is provided in the accompanying tables.

2            Book value per outstanding share excluding Accumulated Other Comprehensive Loss (“AOCL”), a non-GAAP financial measure, is calculated as total stockholders’ equity excluding AOCL divided by the total number of shares of common stock outstanding.

Net income for the first quarter of 2008 was $49.2 million, or $0.85 per diluted common share, compared to net income of $9.9 million, or $0.17 per diluted common share for the same period in 2007.   Net income for the first quarter of 2008 was impacted by the Company’s adoption of SFAS No. 157, Fair Value Measurements (SFAS 157), which resulted in a material reduction in the fair value measurement of the embedded derivative component of the Company’s policy benefit reserves, and a corresponding increase in net income of $40.7 million.

STRONG YIELDS ON NEW MONEY FIXED INCOME INVESTMENTS

American Equity’s total invested assets grew to $12.8 billion in the first quarter of 2008, with a weighted average yield of 6.14% and record investment earnings of $195.5 million for the quarter.  Yields on new money purchases during the first quarter of 2008 averaged 6.61% on $945.2 million of new fixed income investments and 6.20% on $105.5 million of new commercial mortgage loans.  A significant portion of these new investments consisted of re-invested proceeds from securities called for redemption or sold, including, during the first quarter 2008, securities with a total book value of $737.9 million and a weighted average yield of 5.59%.  A portion of the company’s new investments in the first quarter of 2008 include super senior trances of residential mortgage-backed securities, but American Equity has no exposure to subprime mortgage-backed securities or CDO/SIVs backed by residential mortgages.

Commented David J. Noble, Chairman, Chief Executive Officer and President of American Equity, “In the first quarter of 2008, we have been presented with very rare opportunities in the fixed income securities markets.  Credit spreads on high quality securities have been extremely attractive for American Equity because we are well positioned to take advantage of them.  With our balance sheet strength and positive liquidity, American Equity is in the right place at the right time to diversify asset allocations and build yields without sacrificing credit quality.”

IMPROVING INVESTMENT SPREAD ON ANNUITY BUSINESS

In the first quarter of 2008, American Equity earned a gross investment spread on its annuity reserves of 2.59% (aggregate yield on invested assets less aggregate cost of money on annuity reserves), an improvement over the fourth quarter 2007 aggregate spread of 2.48%.  American Equity’s spread results were driven by its index annuity block, which represents over 85% of total annuity account values.  During 2007, equity market volatility caused sharp increases in the cost of money for American Equity’s index annuities, which reached a high of 3.74% in the fourth quarter of 2007.  In the first quarter of 2008, the cost of money on index annuities declined to 3.55%, as a result of rate cuts and hedging improvements the company implemented throughout 2007.

The cost of money on index annuities is comprised primarily of the cost of one-year call options purchased to fund future index credits on new and renewing annuity account values.  The costs of such options were significantly lower during the first quarter of 2008 compared to costs incurred throughout 2007.  Because option costs are expensed over their 12-month terms, management anticipates that cost reductions attained in the first quarter should be reflected in spread results over the remainder of 2008.

SAFE MONEY PRODUCTS

American Equity’s sales of new annuity products in the first quarter of 2008 totaled $515.2 million, an increase of 16% over the same period in 2007.   Momentum continues to build with new sales climbing to $232.3 million for April 2008, the highest level since December 2005.  The Company attributes the sales growth to several factors including: its continued strong position with its national marketing organizations and field force of licensed, independent insurance agents; the increased attractiveness of safe money products in volatile markets; declining interest rates on competing products such as bank certificates of deposit; and product enhancements including a new generation of guaranteed income withdrawal benefit riders.

“No American Equity policyholder has ever lost a dime of account value as a result of market declines or volatility. We call that “sleep insurance”, and there is a tremendous need in the market for such products,” commented Mr. Noble.  “I’ve been in the insurance industry for over 50 years, and from time to time I’ve had to deal with the arm chair critics, who are usually my competitors in other industries or their proponents.  The simple fact is, however, that American Equity strives to offer excellent products and superior service to a growing group of policyholders who want and need safe money alternatives.  After 50 years, I know that good products and satisfied customers will stand the test of time.”

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995.  Forward-looking statements relate to future operations, strategies, financial results or other developments, and are subject to assumptions, risks and uncertainties.  Statements such as “guidance,” “expect,” “anticipate,” “believe,” “goal,” “objective,” “target,” “may,” “should,” “estimate,” “projects,” or similar words as well as specific projections of future results qualify as forward-looking statements.  Factors that may cause our actual results todiffer materially from those contemplated by these forward looking statements can be found in the Company’s Form 10-K filed with the Securities and Exchange Commission.   Forward-looking statements speak only as of the date the statement was made and the company undertakes no obligation to update such forward-looking statements.  There can be no assurance that other factors not currently anticipated by the company will not materially and adversely affect our results of operations.  Investors are cautioned not to place undue reliance on any forward-looking statements made by us or on our behalf.

CONFERENCE CALL

American Equity will hold a conference call to discuss first quarter 2008 earnings on Thursday, May 8, 2008, at 10 a.m. CDT.   The conference call will be webcast live on the Internet.  Investors and interested parties who wish to listen to the call on the Internet may do so at www.american-equity.com.  The call may also be accessed by telephone at 866-700-0161, passcode 90020628 (international callers, please dial 617-213-8832.   An audio replay will be available shortly after the call on AEL’s web site.  An audio replay will also be available via telephone through May 22, 2008 by calling 1-888-286-8010, passcode 83963836 (international callers will need to dial 617-801-6888).

ABOUT AMERICAN EQUITY

Founded in 1995, American Equity Investment Life Holding Company is a full-service underwriter of a broad line of annuity and insurance products, with a primary emphasis on the sale of fixed-rate and index annuities.  The Company’s headquarters are located at 5000 Westown Parkway, West Des Moines, Iowa, 50266.  The mailing address of the company is: P.O. Box 71216, Des Moines, Iowa, 50325.

###

American Equity Investment Life Holding Company
Net Income/Operating Income (Unaudited)
	Three Months Ended
	March 31,
	2008			2007
	(Dollars in thousands,
	except per share data)
Revenues:
Traditional life and accident and health insurance premiums	$	3,316		$	3,057
Annuity product charges		12,098			8,994
Net investment income		195,488			169,358
Realized gains (losses) on investments		(2,419	)		579
Change in fair value of derivatives		(157,365	)		(8,522	)
Total revenues		51,118			173,466
Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,609			1,933
Interest credited to account balances		54,176			115,953
Amortization of deferred sales inducements		31,912			4,361
Change in fair value of embedded derivatives		(218,614	)		(6,631	)
Interest expense on notes payable		4,129			4,082
Interest expense on subordinated debentures		5,231			5,589
Interest expense on amounts due under repurchase agreements		2,972			4,018
Amortization of deferred policy acquisition costs		80,690			17,569
Other operating costs and expenses		12,718			11,411
Total benefits and expenses		(24,177	)		158,285
Income before income taxes		75,295			15,181
Income tax expense		26,143			5,254
Net income		49,152			9,927
Realized (gains) losses on investments, net of offsets		1,008			(374	)
Net effect of SFAS 133, net of offsets		(32,426	)		5,580
Operating income (a)	$	17,734		$	15,133
Earnings per common share	$	0.89		$	0.18
Earnings per common share - assuming dilution	$	0.85		$	0.17
Operating income per common share (a)	$	0.32		$	0.27
Operating income per common share - assuming dilution (a)	$	0.31		$	0.26
Weighted average common shares outstanding (in thousands):
Earnings per common share		55,431			56,693
Earnings per common share - assuming dilution		58,221			60,159

American Equity Investment Life Holding Company
Operating Income
Three months ended March 31, 2008 (Unaudited)
				Adjustments					Operating
	As Reported			Realized Losses		SFAS 133			Income (a)
	(Dollars in thousands, except per share data)
Reserves:
Traditional life and accident and health insurance premiums	$	3,316		$	-	$	-		$	3,316
Annuity product charges		12,098			-		-			12,098
Net investment income		195,488			-		-			195,488
Realized losses on investments		(2,419	)		2,419		-			-
Change in fair value of derivatives		(157,365	)		-		94,913			(62,452	)
Total revenues		51,118			2,419		94,913			148,450
Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,609			-		-			2,609
Interest credited to account balances		54,176			-		-			54,176
Amortization of deferred sales inducements		31,912			235		(21,552	)		10,595
Change in fair value of embedded derivatives		(218,614	)		-		218,614			-
Interest expense on notes payable		4,129			-		(491	)		3,638
Interest expense on subordinated debentures		5,231			-		-			5,231
Interest expense on amounts due under repurchase agreements		2,972			-		-			2,972
Amortization of deferred policy acquisition costs		80,690			622		(51,725	)		29,587
Other operating costs and expenses		12,718			-		(267	)		12,451
Total benefits and expenses		(24,177	)		857		144,579			121,259
Income before income taxes		75,295			1,562		(49,666	)		27,191
Income tax expense		26,143			554		(17,240	)		9,457
Net income	$	49,152		$	1,008	$	(32,426	)	$	17,734
Earnings per common share	$	0.89							$	0.32
Earnings per common share - assuming dilution	$	0.85							$	0.31

(a)    In addition to net income, we have consistently utilized operating income, operating income per common share and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance.  Operating income equals net income adjusted to eliminate the impact of net realized gains and losses on investments, and the impact of SFAS 133, dealing with fair value changes in derivatives and embedded derivatives.  Because these items fluctuate from quarter to quarter quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends.  We believe the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor's understanding of our underlying results and profitability.

Page 2

American Equity Investment Life Holding Company

Financial Supplement

March 31, 2008

A. Financial Highlights
	Condensed Consolidated Balance Sheets	1
	Consolidated Statements of Income	3
	Operating Income
	Three Months Ended March 31, 2008	4
	Quarterly Summary – Most Recent 5 quarters	5
	Capitalization/ Book Value per Share	6
B. Product Summary
	Annuity Deposits by Product Type	7
	Surrender Charge Protection and Account Values by Product Type	7
	Annuity Liability Characteristics	8
	Spread Results	10
C. Investment Summary
	Summary of Invested Assets	11
	Credit Quality of Fixed Maturity Securities	12
	Watch List Securities	12
	Mortgage Loans by Region and Property Type	13
D. Shareholder Information		14
E. Research Analyst Coverage		15

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	March 31, 2008		December 31, 2007
	(Unaudited)
Assets
Investments:
Fixed maturity securities:
Available for sale, at fair value	$	5,273,420	$	5,008,772
Held for investment, at amortized cost		5,270,156		5,355,733
Equity securities, available for sale, at fair value		135,667		87,412
Mortgage loans on real estate		2,046,836		1,953,894
Derivative instruments		80,707		204,657
Policy loans		446		427
Total investments		12,807,232		12,610,895
Cash and cash equivalents		19,647		18,888
Coinsurance deposits		1,645,769		1,698,153
Accrued investment income		86,644		77,348
Deferred policy acquisition costs		1,274,724		1,272,108
Deferred sales inducements		611,385		588,473
Deferred income taxes		49,824		75,806
Other assets		62,748		52,701
Total assets	$	16,557,973	$	16,394,372

Page 1

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

 (Dollars in thousands)

	March 31, 2008			December 31, 2007
	(Unaudited)
Liabilities and Stockholders’ Equity
Liabilities:
Policy benefit reserves	$	14,753,115		$	14,711,780
Other policy funds and contract claims		118,254			120,186
Notes payable		262,570			268,339
Subordinated debentures		268,351			268,330
Amounts due under repurchase agreements		439,614			257,225
Other liabilities		91,167			156,877
Total liabilities		15,933,071			15,782,737
Stockholders’ equity:
Common stock		51,670			53,556
Additional paid-in capital		373,374			387,302
Unallocated common stock held by ESOP		(6,670	)		(6,781	)
Accumulated other comprehensive loss		(59,111	)		(38,929	)
Retained earnings		265,639			216,487
Total stockholders’ equity		624,902			611,635
Total liabilities and stockholders’ equity	$	16,557,973		$	16,394,372

Page 2

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2008			2007
Revenues:
Traditional life and accident and health insurance premiums	$	3,316		$	3,057
Annuity product charges		12,098			8,994
Net investment income		195,488			169,358
Realized gains (losses) on investments		(2,419	)		579
Change in fair value of derivatives		(157,365	)		(8,522	)
Total revenues		51,118			173,466
Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,609			1,933
Interest credited to account balances		54,176			115,953
Amortization of deferred sales inducements		31,912			4,361
Change in fair value of embedded derivatives		(218,614	)		(6,631	)
Interest expense on notes payable		4,129			4,082
Interest expense on subordinated debentures		5,231			5,589
Interest expense on amounts due under repurchase agreements		2,972			4,018
Amortization of deferred policy acquisition costs		80,690			17,569
Other operating costs and expenses		12,718			11,411
Total benefits and expenses		(24,177	)		158,285
Income before income taxes		75,295			15,181
Income tax expense		26,143			5,254
Net income	$	49,152		$	9,927
Earnings per common share	$	0.89		$	0.18
Earnings per common share - assuming dilution (a)	$	0.85		$	0.17
Weighted average common shares outstanding (in thousands):
Earnings per common share		55,431			56,693
Earnings per common share - assuming dilution		58,221			60,159

   (a) The numerator for earnings per common share - assuming dilution is equal to net income plus the after tax cost of interest on convertible subordinated debentures issued to a subsidiary trust.  The after tax cost of such interest was $262 for the three months ended March 31, 2008 and $265 for the three months ended March 31, 2007.

Page 3

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Operating Income

Three months ended March 31, 2008 (Unaudited)

	As Reported			Realized Loss Adjustments		SFAS 133 Adjustments			Operating Income (a)
	(Dollars in thousands, except per share data)
Revenues:
Traditional life and accident and health insurance premiums	$	3,316		$	–	$	–		$	3,316
Annuity product charges		12,098			–		–			12,098
Net investment income		195,488			–		–			195,488
Realized losses on investments		(2,419	)		2,419		–			–
Change in fair value of derivatives		(157,365	)		–		94,913			(62,452	)
Total revenues		51,118			2,419		94,913			148,450
Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,609			–		–			2,609
Interest credited to account balances		54,176			–		–			54,176
Amortization of deferred sales inducements		31,912			235		(21,552	)		10,595
Change in fair value of embedded derivatives		(218,614	)		–		218,614			–
Interest expense on notes payable		4,129			–		(491	)		3,638
Interest expense on subordinated debentures		5,231			–		–			5,231
Interest expense on amounts due under repurchase agreements		2,972			–		–			2,972
Amortization of deferred policy acquisition costs		80,690			622		(51,725	)		29,587
Other operating costs and expenses		12,718			–		(267	)		12,451
Total benefits and expenses		(24,177	)		857		144,579			121,259
Income before income taxes		75,295			1,562		(49,666	)		27,191
Income tax expense		26,143			554		(17,240	)		9,457
Net income	$	49,152		$	1,008	$	(32,426	)	$	17,734
Earnings per common share	$	0.89							$	0.32
Earnings per common share – assuming dilution	$	0.85							$	0.31

(a) In addition to net income, we have consistently utilized operating income, operating income per common share and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance.  Operating income equals net income adjusted to eliminate the impact of net realized gains and losses on investments and the impact of SFAS 133, dealing with fair value changes in derivatives and embedded derivatives.  Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends.  We believe the combined presentation and evaluation of operating income together with net income, provides information that may enhance an investor’s understanding of our underlying results and profitability.

Change in fair value of derivatives:
Proceeds received at expiration or gains recognized upon early       termination	$	12,767		$	–	$	12,767
Cost of money for index annuities		(75,107	)		–		(75,107	)
Change in the difference between fair value and remaining       option cost at beginning and end of period		(95,025	)		94,913		(112	)
	$	(157,365	)	$	94,913	$	(62,452	)
Index credits included in interest credited to account balances	$	16,410				$	16,410

Page 4

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Operating Income/Net Income

Quarterly Summary – Most Recent 5 Quarters (Unaudited)

		Q1 2008			Q4 2007			Q3 2007			Q2 2007		Q1 2007
	(Dollars in thousands, except per share data)
Revenues:
Traditional life and accident and health insurance premiums	$	3,316		$	3,032		$	3,344		$	3,190	$	3,057
Annuity product charges		12,098			12,805			12,576			11,453		8,994
Net investment income		195,488			191,107			183,732			175,719		169,358
Change in fair value of derivatives		(62,452	)		(7,249	)		56,332			68,821		17,862
Total revenues		148,450			199,695			255,984			259,183		199,271
Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,609			2,029			2,360			2,097		1,933
Interest credited to account balances		54,176			110,294			165,821			168,141		115,953
Amortization of deferred sales inducements		10,595			9,364			9,177			9,124		7,748
Interest expense on notes payable		3,638			3,772			3,770			3,793		3,820
Interest expense on subordinated debentures		5,231			5,644			5,673			5,614		5,589
Interest expense on amounts due under repurchase agreements		2,972			4,084			4,764			3,060		4,018
Amortization of deferred policy acquisition costs		29,587			27,712			27,776			28,405		25,656
Other operating costs and expenses		12,451			11,154			11,582			14,083		11,411
Total benefits and expenses		121,259			174,053			230,923			234,317		176,128
Operating income before income taxes		27,191			25,642			25,061			24,866		23,143
Income tax expense		9,457			8,622			8,639			8,539		8,010
Operating income (a)		17,734			17,020			16,422			16,327		15,133
Realized gains (losses) on investments, net of offsets		(1,008	)		(2,283	)		210			11		374
Net effect of SFAS 133, net of offsets		32,426			(19,735	)		(13,189	)		4,266		(5,580	)
Net income (loss)	$	49,152		$	(4,998	)	$	3,443		$	20,604	$	9,927

Operating income per common share (a)	$	0.32	$	0.30	$	0.29	$	0.29	$	0.27
Operating income per common share – assuming dilution (a)	$	0.31	$	0.29	$	0.28	$	0.28	$	0.26

Earnings (loss) per common share	$	0.89	$	(0.09	)	$	0.06	$	0.36	$	0.18
Earnings (loss) per common share – assuming dilution	$	0.85	$	(0.08	)	$	0.06	$	0.35	$	0.17
Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share		55,431		56,348			56,878		57,122		56,693
Earnings (loss) per common share - assuming dilution		58,221		59,154			59,774		60,309		60,159

(a) In addition to net income (loss), we have consistently utilized operating income, operating income per common share and operating income per common share - assuming dilution, non-GAAP financial measures commonly used in the life insurance industry, as economic measures to evaluate our financial performance.  Operating income equals net income (loss) adjusted to eliminate the impact of net realized gains and losses on investments, and the impact of SFAS 133, dealing with fair value changes in derivatives and embedded derivatives.  Because these items fluctuate from quarter to quarter in a manner unrelated to core operations, we believe measures excluding their impact are useful in analyzing operating trends.  We believe the combined presentation and evaluation of operating income together with net income (loss), provides information that may enhance an investor’s understanding of our underlying results and profitability.

Page 5

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Capitalization/ Book Value per Share

	March 31, 2008			December 31, 2007
	(Dollars in thousands, except per share data)
Capitalization:
Notes payable	$	262,570		$	268,339
Subordinated debentures payable to subsidiary trusts		268,351			268,330
Total debt		530,921			536,669
Total stockholders’ equity		624,902			611,635
Total capitalization		1,155,823			1,148,304
Accumulated other comprehensive loss (AOCL)		59,111			38,929
Total capitalization excluding AOCL (a)	$	1,214,934		$	1,187,233
Total stockholders’ equity	$	624,902		$	611,635
Accumulated other comprehensive loss		59,111			38,929
Total stockholders’ equity excluding AOCL (a)	$	684,013		$	650,564
Common shares outstanding (b)		54,043,919			55,919,585
Book Value per Share: (c)
Book value per share including AOCL	$	11.56		$	10.94
Book value per share excluding AOCL (a)	$	12.66		$	11.63
Book value per share excluding AOCL and SFAS 133 (a)	$	12.66		$	12.22
Debt-to-Capital Ratios: (d)
Senior debt / Total capitalization		21.6	%		22.6	%
Adjusted debt / Total capitalization		28.7	%		30.2	%

(a) Total capitalization, total stockholders’ equity and book value per share excluding AOCL, non-GAAP financial measures, are based on stockholders’ equity excluding the effect of AOCL.  Since AOCL fluctuates from quarter to quarter due to unrealized changes in the fair value of available for sale investments caused principally by changes in market interest rates, we believe these non-GAAP financial measures provide useful supplemental information.  Book value per share excluding AOCL and  SFAS 133 is a non-GAAP financial measure based on stockholders’ equity excluding the effect of AOCL and the cumulative impact on stockholders’ equity of SFAS 133, dealing with fair value changes in derivatives and embedded derivatives.  Because the cumulative impact of SFAS 133 fluctuates in a manner unrelated to core operations, we believe this non-GAAP financial measure provides useful supplemental information.

(b) Common shares outstanding include shares held by the NMO Deferred Compensation Trust: 2008 - 2,993,148 shares; 2007 - 2,993,148 shares and exclude unallocated shares held by ESOP: 2008 - 619,302; 2007 - 629,565 shares.

(c) Book value per share including and excluding AOCL is calculated as total stockholders’ equity and total stockholders’ equity excluding AOCL divided by the total number of shares of common stock outstanding.  Book value excluding AOCL and the impact of SFAS 133 is calculated as total stockholders’ equity excluding AOCL adjusted to eliminate the cumulative impact on stockholders’ equity of SFAS 133 divided by the total number of shares of common stock outstanding.

(d) Debt-to-capital ratios are computed using total capitalization excluding AOCL.  Adjusted debt includes notes payable and the portion of the total subordinated debentures payable to subsidiary trusts outstanding (qualifying trust preferred securities) that exceeds 15% of total capitalization excluding AOCL.

Page 6

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Annuity Deposits by Product Type

	Three Months Ended March 31,				Year Ended December 31,
Product Type	2008		2007		2007
	(Dollars in thousands)
Index Annuities:
Index Strategies	$	332,836	$	301,791	$	1,578,347
Fixed Strategy		173,533		128,970		515,229
		506,369		430,761		2,093,576
Fixed Rate Annuities:
Single-Year Rate Guaranteed		7,233		11,786		45,948
Multi-Year Rate Guaranteed		1,558		1,932		5,158
		8,791		13,718		51,106
Total before coinsurance ceded		515,160		444,479		2,144,682
Coinsurance ceded		537		591		1,779
Net after coinsurance ceded	$	514,623	$	443,888	$	2,142,903

Surrender Charge Protection and Account Values by Product Type

Annuity Surrender Charges and Net (of coinsurance) Account Values at March 31, 2008
	Surrender Charge							Net Account Value
Product Type	Avg. Years  At Issue		Avg. Years Remaining		Avg. % Remaining			Dollars in Thousands		%
Index Annuities		14.1		11.2		15.0	%	$	11,118,685		85.2	%
Single-Year Fixed Rate Guaranteed Annuities		10.6		5.0		7.9	%		1,463,054		11.2	%
Multi-Year Fixed Rate Guaranteed Annuities		7.1		2.9		5.8	%		467,171		3.6	%
Total		13.4		10.2		13.9	%	$	13,048,910		100.0	%

Page 7

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Annuity Liability Characteristics

	Fixed Annuities Account Value		Index Annuities Account Value
	(Dollars in thousands)
SURRENDER CHARGE PERCENTAGES (1):
No surrender charge	$	194,149	$	95,119
0.0% <   2.0%		12,892		2,482
2.0% <   3.0%		83,290		18,358
3.0% <   4.0%		34,884		50,945
4.0% <   5.0%		145,860		142,530
5.0% <   6.0%		38,348		110,020
6.0% <   7.0%		223,049		357,568
7.0% <   8.0%		243,683		451,435
8.0% <   9.0%		313,355		348,042
9.0% < 10.0%		119,033		468,771
10.0% or greater		521,682		9,073,415
	$	1,930,225	$	11,118,685
	Fixed and		Weighted
	Index		Average
	Annuities		Surrender
	Account Value		Charge
	(Dollars in thousands)
SURRENDER CHARGE EXPIRATION BY YEAR
Out of Surrender Charge	$	289,268		0.00	%
2008		84,771		4.36	%
2009		362,946		6.51	%
2010		408,985		5.61	%
2011		380,523		6.32	%
2012		561,002		7.13	%
2013		715,249		7.65	%
2014		649,749		8.87	%
2015		619,517		11.11	%
2016		828,432		11.94	%
2017		1,004,624		13.07	%
2018		771,751		14.12	%
2019		520,876		14.07	%
2020		613,639		15.28	%
2021		653,533		16.79	%
2022		1,289,802		18.68	%
2023		2,595,287		19.67	%
2024		692,358		19.83	%
2025		6,598		20.00	%
	$	13,048,910		13.81	%

Page 8

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Annuity Liability Characteristics

	Fixed  Annuities Account Value		Index Annuities Account Value
	(Dollars in thousands)
APPLICABLE GUARANTEE PERIOD:
Annual reset (2)	$	1,700,511	$	10,991,346
Multi-year (3 - 5 years)		229,714		127,339
	$	1,930,225	$	11,118,685

ULTIMATE MINIMUM GUARANTEE RATE (3):
2.00%	$	–	$	1,502
2.20%		4,729		91,150
2.25% (3)		235,501		2,644,864
3.00%		1,602,103		6,809,855
3.50% (4)		–		1,571,314
4.00%		87,892		–
	$	1,930,225	$	11,118,685

CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL (5)(6)
No differential	$	82,218	$	–
› 0.0% - 0.5%		1,285,305		1,613,235
› 0.5% - 1.0%		331,805		811,683
› 1.0% - 1.5%		147,249		119,962
› 1.5% - 2.0%		30,384		90
› 2.0% - 2.5%		38,776		–
› 2.5% - 3.0%		12,084		–
Greater than 3.0%		2,404		–
Index strategies		–		8,573,715
	$	1,930,225	$	11,118,685

(1) In addition, $1,200,653 (62%) of the Fixed Annuities Account Value have market value adjustment protection.

(2) The contract features for substantially all of the Index Annuities Account Value provide for the annual reset of contractual features that effect the cost of money.  The contract features for less than .5% of the Index Annuities Account Value are reset every two years.

(3) Products have a guarantee of 2.25% for the first 10 years, and 3.00% thereafter.

(4) Rates applicable to the minimum guaranteed surrender value are 3.50% for the first 5 years, and 3.00% thereafter (applied to less than 100% of the annuity deposits received).  Minimum guaranteed rates for amounts allocated to the fixed rate strategy are 2.25% for the first 10 years, and 3.00% thereafter.

(5) Recent issues may contain bonus interest rates ranging from 1.0% to 3.0%.

(6) Includes products with multi-year guarantees for which the credited rate cannot be decreased to the ultimate minimum guaranteed rate until the end of the multi-year period.  The weighted average differential between the current credited rate and the ultimate minimum guaranteed rate on the multi-year guarantee fixed annuity account values was approximately 133 basis points.

Page 9

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Spread Results

	Three Months Ended March 31,						Year Ended December 31,
	2008			2007			2007
Average yield on invested assets		6.14	%		6.06	%		6.11	%
Cost of money:
Aggregate		3.55	%		3.43	%		3.50	%
Cost of money for index annuities		3.58	%		3.41	%		3.51	%
Average crediting rate for fixed rate annuities:
Annually adjustable		3.26	%		3.25	%		3.28	%
Multi-year rate guaranteed		3.94	%		4.28	%		4.14	%
Investment spread:
Aggregate		2.59	%		2.63	%		2.61	%
Index annuities		2.56	%		2.65	%		2.60	%
Fixed rate annuities:
Annually adjustable		2.88	%		2.81	%		2.83	%
Multi-year rate guaranteed		2.20	%		1.78	%		1.97	%

Page 10

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Summary of Invested Assets

	March 31, 2008					December 31, 2007
	Carrying Amount		Percent			Carrying Amount		Percent
	(Dollars in thousands)
Fixed maturity securities:
United States Government full faith and credit	$	20,865		0.2	%	$	19,882		0.2	%
United States Government sponsored agencies		7,833,179		61.2	%		8,208,909		65.1	%
Public utilities		149,038		1.2	%		146,525		1.1	%
Corporate securities		1,118,031		8.7	%		1,084,550		8.6	%
Redeemable preferred stocks		203,770		1.6	%		188,054		1.5	%
Mortgage and asset-backed securities:
Government		74,505		0.6	%		75,353		0.6	%
Non-Government		1,144,188		8.9	%		641,232		5.1	%
Total fixed maturity securities		10,543,576		82.4	%		10,364,505		82.2	%
Equity securities		135,667		1.0	%		87,412		0.7	%
Mortgage loans on real estate		2,046,836		16.0	%		1,953,894		15.5	%
Derivative instruments		80,707		0.6	%		204,657		1.6	%
Policy loans		446		–			427		–
	$	12,807,232		100.0	%	$	12,610,895		100.0	%

Page 11

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Credit Quality of Fixed Maturity Securities

		March 31, 2008					December 31, 2007
NAIC Designation	Rating Agency Equivalent	Carrying Amount		Percent			Carrying Amount		Percent
		(Dollars in thousands)
1	Aaa/Aa/A	$	9,504,023		90.1	%	$	9,361,755		90.3	%
2	Baa		956,233		9.1	%		915,259		8.8	%
3	Ba		54,501		0.5	%		53,784		0.5	%
4	B		17,376		0.2	%		20,310		0.3	%
5	Caa and lower		11,443		0.1	%		13,397		0.1	%
6	In or near default		–		–			–		–
		$	10,543,576		100.0	%	$	10,364,505		100.0	%

Watch List Securities - March 31, 2008

General Description	Amortized Cost		Unrealized Losses			Estimated Fair Value		Months Below Amortized Cost
Corporate bonds:
Finance, insurance and real estate companies	$	32,942	$	(16,894	)	$	16,048		8 - 33
Home builder		16,966		(3,993	)		12,973		13 - 32
Consumer staple company		9,693		(2,125	)		7,568		22
U.S. media company		5,750		(1,875	)		3,875		3
Common & preferred stock:
Finance, insurance and real estate companies		24,686		(10,361	)		14,325		1 - 14
	$	90,037	$	(35,248	)	$	54,789

Page 12

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Mortgage Loans by Region and Property Type

	March 31, 2008					December 31, 2007
	Carrying Amount		Percent			Carrying Amount		Percent
	(Dollars in thousands)
Geographic distribution
East	$	497,036		24.3	%	$	458,418		23.5	%
Middle Atlantic		139,083		6.8	%		133,662		6.8	%
Mountain		320,428		15.7	%		310,244		15.9	%
New England		45,678		2.2	%		45,618		2.3	%
Pacific		140,220		6.9	%		141,264		7.2	%
South Atlantic		355,867		17.4	%		344,800		17.7	%
West North Central		379,594		18.5	%		356,334		18.2	%
West South Central		168,930		8.2	%		163,554		8.4	%
	$	2,046,836		100.0	%	$	1,953,894		100.0	%

Property type distribution
Office	$	590,980	28.9	%	$	586,109	30.0	%
Medical Office		130,583	6.4	%		108,667	5.6	%
Retail		469,640	22.9	%		438,214	22.4	%
Industrial/Warehouse		475,620	23.2	%		453,654	23.2	%
Hotel		123,940	6.1	%		115,758	5.9	%
Apartments		104,744	5.1	%		105,431	5.4	%
Mixed use/other		151,329	7.4	%		146,061	7.5	%
	$	2,046,836	100.0	%	$	1,953,894	100.0	%

Page 13

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Shareholder Information

Corporate Offices:

American Equity Investment Life Holding Company

5000 Westown Parkway, Suite 440

West Des Moines, IA 50266

Inquiries:

D. J. Noble, Chairman

(515) 457-1703, dnoble@american-equity.com

Debra J. Richardson, Senior Vice President

(515) 273-3551, drichardson@american-equity.com

John M. Matovina, Vice Chairman

(515) 457-1813, jmatovina@american-equity.com

Common Stock and Dividend Information:

New York Stock Exchange symbol: “AEL”

							Dividend
	High		Low		Close		Declared
2008
First Quarter	$	10.21	$	6.82	$	9.28	$	0.00
2007
First Quarter	$	14.07	$	12.17	$	13.13	$	0.00
Second Quarter	$	13.97	$	11.37	$	12.08	$	0.00
Third Quarter	$	12.55	$	9.51	$	10.65	$	0.00
Fourth Quarter	$	11.25	$	8.09	$	8.29	$	0.06
2006
First Quarter	$	14.34	$	12.76	$	14.34	$	0.00
Second Quarter	$	14.60	$	10.66	$	10.66	$	0.00
Third Quarter	$	12.55	$	10.07	$	12.27	$	0.00
Fourth Quarter	$	13.44	$	11.90	$	13.03	$	0.05

Transfer Agent:

Comptershare Trust Company, N.A.

P.O. Box 43010

Providence, RI 02940-0310

Phone: (877) 282-1169

Fax: (781) 575-2723

www.computershare.com

Annual Report and Other Information:

Shareholders may receive when available, without charge, a copy of American Equity’s Annual Report, SEC filings and/or press releases by calling Julie L. LaFollette, Investor Relations, at (515) 273-3602 or by visiting our web site at www.american-equity.com.

Page 14

American Equity Investment Life Holding Company

Financial Supplement – March 31, 2008

Research Analyst Coverage

Steven Schwartz

Raymond James & Associates, Inc.

(312) 612-7686

steven.schwartz@raymondjames.com

Mark Finkelstein

Fox-Pitt Kelton

Cochran Caronia Waller

(312) 425-4079

mfinkelstein@ccwco.com

Elizabeth C. Malone

KeyBanc Capital Markets

(917) 368-2230

bmalone@keybanccm.com

Keith F. Walsh

Citigroup Investment Research

(212) 816-5452

keith.f.walsh@citigroup.com

Randy Binner

Friedman, Billings, Ramsey & Co., Inc.

(703) 312-1890

rbinner@fbr.com

Page 15