a5741770.htm

Exhibit 99.1

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

Julie L. LaFollette, Investor Relations

(515) 273-3602, jlafollette@american-equity.com

FOR IMMEDIATE RELEASE

July 30, 2008

American Equity Reports Second Quarter 2008 Operating Income

of $18.7 Million or $0.33 Per Diluted Common Share

WEST DES MOINES, Iowa (July 30, 2008) – American Equity Investment Life Holding Company (NYSE: AEL), a leading underwriter of fixed-rate and index annuities, today reported 2008 second quarter operating income1 of $18.7 million, or $0.33 per diluted common share, an increase of 14% over 2007 second quarter operating income of $16.3 million, or $0.28 per diluted common share. Financial highlights include:

Annuity sales of $648.0 million during the second quarter of 2008, an increase of 4% over second quarter 2007 annuity sales of $622.5 million

	·	Investment spread on annuity business of 2.76% for the second quarter of 2008 compared to 2.59% for the first quarter 2008

	·	Book value per outstanding common share2 of $12.77 (excluding Accumulated Other Comprehensive Loss)

Net income for the second quarter of 2008 was $4.8 million, or $0.09 per diluted common share, compared to net income of $20.6 million, or $0.35 per diluted common share for the same period in 2007. Net income for the second quarter of 2008 was reduced by $8.9 million for recognition of “other than temporary impairments” on invested assets resulting in realized losses, net of taxes and adjustments to the amortization of deferred policy acquisition costs and deferred sales inducements, and by $5.6 million for net valuation adjustments in the derivatives and embedded derivatives associated with American Equity’s index annuity business.

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.

CONTINUED SALES MOMENTUM

New sales of American Equity’s annuity products remained strong in the second quarter of 2008, with sales exceeding $200 million per month for each month during the quarter. This momentum has continued into July, 2008, with sales again expected to exceed $200 million. New annuity sales in 2008 have been predominantly sales of American Equity’s multi-strategy index annuities. Allocations of new premium to the fixed-rate strategy within the index products increased to 37% of deposits received in the first six months of 2008 compared to 27% in the first six months of 2007. Commented David J. Noble, Chairman, Chief Executive Officer and President of American Equity, “We are very proud of the fact that no American Equity annuity holder has ever lost a dime of contract value due to market volatility. Nearly every day brings news of the capital crises affecting our nation, but our annuity holders need not worry about the safety of their index and fixed-rate annuity savings. This is one of the great values that insurance products like index annuities bring to the market for principal-protected savings alternatives.”

On June 25, 2008, the Securities and Exchange Commission adopted proposed rule 151A which would change the legal status of index annuities from insurance to securities. If adopted in its present form, the earliest the rule would become effective is late 2009, and it applies prospectively only to sales of index annuities after the effective date. The proposed rule appears to be having little effect on new sales currently. American Equity believes the rule reflects fundamental inaccuracies and misperceptions about index annuities, how they are marketed and how they are regulated by state insurance departments. Regardless of whether the rule is adopted, American Equity intends to be prepared to market a registered index annuity through the broker dealer distribution channel, and the company is working with its independent insurance agents and national marketing organizations to adapt to this potential change. In addition, American Equity will enhance its product offerings in fixed-rate annuities, for which the company anticipates continued market demand.

STEADY IMPROVEMENT IN GROSS INVESTMENT SPREADS

American Equity’s gross investment spread on aggregate annuity reserves was 2.76% for the second quarter of 2008, compared to 2.59% for the first quarter of 2008. This improvement reflects both enhanced yields on invested assets as well as a steady decrease in the cost of money for the company’s annuity liabilities. Second quarter 2008 aggregate yield on invested assets was 6.20% compared to 6.14% for the first quarter of 2008. During the second quarter American Equity purchased new fixed income securities totaling $1.26 billion with an average yield of 6.66% and made new commercial mortgage loans totaling $185.6 million with an average yield of 6.13%. Fixed income securities called or sold during the second quarter totaled $1.01 billion with an average yield of 6.53%.

The aggregate cost of money declined to 3.44% in the second quarter of 2008 compared to 3.55% in the first quarter of 2008. This reduction, which began in the first quarter of 2008, was driven primarily by lower costs of one-year call options purchased to fund the index credits on American Equity’s index annuities, and reflects rate cuts implemented during 2007 in response to increasing volatility and corresponding increases in option costs for that year.

CONTINUED STRONG ASSET QUALITY

While valuations have declined in certain asset sectors over the last 12 months, the quality of American Equity’s invested assets remains strong with over 99% of fixed income securities rated investment grade or higher, and 89% rated A or higher. The quality of American Equity’s commercial mortgage loans, totaling $2.2 billion at June 30, 2008 or 16.8% of total invested assets, has also remained consistently high, with no defaults, delinquencies or restructurings. American Equity has no exposure to subprime residential mortgages, and its investments in “Alt-A” residential mortgage loan pools are all in the highest available tranches of such pools with no exposure to adjustable rate mortgage loans and no leverage related to those investments.

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 to differ 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 second quarter 2008 earnings on Thursday, July 31, 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 1-866-356-4441, passcode 85146842 (international callers, please dial 1-617-597-5396). 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 August 21, 2008 by calling 1-888-286-8010, passcode 86101638 (international callers will need to dial 1-617-801-6888).

ABOUT AMERICAN EQUITY

American Equity Investment Life Holding Company, through its wholly-owned operating subsidiaries, 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. For more information, visit our website www.american-equity.com.

###

American Equity Investment Life Holding Company


Net Income/Operating Income (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
	(Dollars in thousands, expect per share data)
Revenues:
Traditional life and accident and health insurance premiums	$	2,880		$	3,190		$	6,196		$	6,247
Annuity product charges		11,845			11,453			23,943			20,447
Net investment income		202,080			175,719			397,568			345,077
Realized gains (losses) on investments		(30,019	)		17			(32,438	)		596
Change in fair value of derivatives		(73,313	)		98,986			(230,678	)		90,464
Total revenues		113,473			289,365			164,591			462,831

Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,321			2,097			4,930			4,030
Interest credited to account balances		49,469			168,141			103,645			284,094
Amortization of deferred sales inducements		(4,479	)		11,602			27,433			15,963
Change in fair value of embedded derivatives		17,745			14,984			(200,869	)		8,353
Interest expense on notes payable		3,722			4,057			7,851			8,139
Interest expense on subordinated debentures		4,649			5,614			9,880			11,203
Interest expense on amounts due under repurchase agreements		2,024			3,060			4,996			7,078
Amortization of deferred policy acquisition costs		18,620			34,366			99,310			51,935
Other operating costs and expenses		12,100			14,083			24,818			25,494
Total benefits and expenses		106,171			258,004			81,994			416,289

Income before income taxes		7,302			31,361			82,597			46,542
Income tax expense		2,535			10,757			28,678			16,011
Net income		4,767			20,604			53,919			30,531
Realized (gains) losses on investments, net of offsets		8,910			(11	)		9,918			(385	)
Net effect of SFAS 133, net of offsets		5,000			(4,266	)		(27,426	)		1,314

Operating income (a)	$	18,677		$	16,327		$	36,411		$	31,460


Earnings per common share	$	0.09		$	0.36		$	0.99		$	0.54
Earnings per common share - assuming dilution	$	0.09		$	0.35		$	0.95		$	0.52
Operating income per common share (a)	$	0.35		$	0.29		$	0.67		$	0.55
Operating income per common share - assuming dilution (a)	$	0.33		$	0.28		$	0.64		$	0.53

Weighted average common shares outstanding (in thousands):
Earnings per common share		53,934			57,122			54,661			56,909
Earnings per common share - assuming dilution		56,856			60,309			57,518			60,342

Page 1

American Equity Investment Life Holding Company


Operating Income
Three months ended June 30, 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	$	2,880		$	-	$	-		$	2,880
Annuity product charges		11,845			-		-			11,845
Net investment income		202,080			-		-			202,080
Realized losses on investments		(30,019	)		30,019		-			-
Change in fair value of derivatives		(73,313	)		-		6,052			(67,261	)
Total revenues		113,473			30,019		6,052			149,544

Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,321			-		-			2,321
Interest credited to account balances		49,469			-		-			49,469
Amortization of deferred sales inducements		(4,479	)		6,083		8,286			9,890
Change in fair value of embedded derivatives		17,745			-		(17,745	)		-
Interest expense on notes payable		3,722			-		(73	)		3,649
Interest expense on subordinated debentures		4,649			-		-			4,649
Interest expense on amounts due under repurchase agreements		2,024			-		-			2,024
Amortization of deferred policy acquisition costs		18,620			10,133		7,603			36,356
Other operating costs and expenses		12,100			-		449			12,549
Total benefits and expenses		106,171			16,216		(1,480	)		120,907

Income before income taxes		7,302			13,803		7,532			28,637
Income tax expense		2,535			4,893		2,532			9,960

Net income	$	4,767		$	8,910	$	5,000		$	18,677

Earnings per common share	$	0.09							$	0.35
Earnings per common share - assuming dilution	$	0.09							$	0.33

(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.

Page 2

American Equity Investment Life Holding Company

Financial Supplement

June 30, 2008

A.	Financial Highlights

	Condensed Consolidated Balance Sheets	1
	Consolidated Statements of Income	3
	Operating Income
	Six Months Ended June 30, 2008	4
	Three Months Ended June 30, 2008	5
	Quarterly Summary – Most Recent 5 quarters	6
	Capitalization/ Book Value per Share	7

B.	Product Summary

	Annuity Deposits by Product Type	8
	Surrender Charge Protection and Account Values by Product Type	8
	Annuity Liability Characteristics	9
	Spread Results	11

C.	Investment Summary

	Summary of Invested Assets	12
	Credit Quality of Fixed Maturity Securities	13
	Watch List Securities	13
	Mortgage Loans by Region and Property Type	14

D.	Shareholder Information	15

E.	Research Analyst Coverage	16

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	June 30, 2008		December 31, 2007
	(Unaudited)
Assets
Investments:
Fixed maturity securities:
Available for sale, at fair value	$	6,074,498	$	5,008,772
Held for investment, at amortized cost		4,651,973		5,355,733
Equity securities, available for sale, at fair value		152,549		87,412
Mortgage loans on real estate		2,213,548		1,953,894
Derivative instruments		74,068		204,657
Policy loans		422		427
Total investments		13,167,058		12,610,895

Cash and cash equivalents		13,438		18,888
Coinsurance deposits		1,612,854		1,698,153
Accrued investment income		84,887		77,348
Deferred policy acquisition costs		1,362,312		1,272,108
Deferred sales inducements		687,595		588,473
Deferred income taxes		68,570		75,806
Other assets		56,555		52,701
Total assets	$	17,053,269	$	16,394,372

Page 1

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(Dollars in thousands)

	June 30, 2008		December 31, 2007
	(Unaudited)
Liabilities and Stockholders’ Equity
Liabilities:
Policy benefit reserves	$	15,202,225	$	14,711,780
Other policy funds and contract claims		115,717		120,186
Notes payable		255,018		268,339
Subordinated debentures		268,383		268,330
Amounts due under repurchase agreements		499,247		257,225
Other liabilities		119,565		156,877
Total liabilities		16,460,155		15,782,737

Stockholders’ equity:
Common stock		51,598		53,556
Additional paid-in capital		366,110		387,302
Unallocated common stock held by ESOP		(6,575)		(6,781)
Accumulated other comprehensive loss		(88,425)		(38,929)
Retained earnings		270,406		216,487
Total stockholders’ equity		593,114		611,635
Total liabilities and stockholders’ equity	$	17,053,269	$	16,394,372

Page 2

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2008			2007		2008			2007
Revenues:
Traditional life and accident and health insurance premiums	$	2,880		$	3,190	$	6,196		$	6,247
Annuity product charges		11,845			11,453		23,943			20,447
Net investment income		202,080			175,719		397,568			345,077
Realized gains (losses) on investments		(30,019	)		17		(32,438	)		596
Change in fair value of derivatives		(73,313	)		98,986		(230,678	)		90,464
Total revenues		113,473			289,365		164,591			462,831

Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,321			2,097		4,930			4,030
Interest credited to account balances		49,469			168,141		103,645			284,094
Amortization of deferred sales inducements		(4,479	)		11,602		27,433			15,963
Change in fair value of embedded derivatives		17,745			14,984		(200,869	)		8,353
Interest expense on notes payable		3,722			4,057		7,851			8,139
Interest expense on subordinated debentures		4,649			5,614		9,880			11,203
Interest expense on amounts due under repurchase agreements		2,024			3,060		4,996			7,078
Amortization of deferred policy acquisition costs		18,620			34,366		99,310			51,935
Other operating costs and expenses		12,100			14,083		24,818			25,494
Total benefits and expenses		106,171			258,004		81,994			416,289

Income before income taxes		7,302			31,361		82,597			46,542
Income tax expense		2,535			10,757		28,678			16,011
Net income	$	4,767		$	20,604	$	53,919		$	30,531

Earnings per common share	$	0.09		$	0.36	$	0.99		$	0.54
Earnings per common share - assuming dilution (a)	$	0.09		$	0.35	$	0.95		$	0.52
Weighted average common shares outstanding (in thousands):
Earnings per common share		53,934			57,122		54,661			56,909
Earnings per common share - assuming dilution		56,856			60,309		57,518			60,342

(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 June 30, 2008, $262 for the three months ended June 30, 2007, $524 for the six months ended June 30, 2008 and $528 for the six months ended June 30, 2007.

Page 3

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Operating Income

Six months ended June 30, 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	$	6,196		$	–	$	–		$	6,196
Annuity and single premium universal life product charges		23,943			–		–			23,943
Net investment income		397,568			–		–			397,568
Realized losses on investments		(32,438	)		32,438		–			–
Change in fair value of derivatives		(230,678	)		–		100,965			(129,713	)
Total revenues		164,591			32,438		100,965			297,994

Benefits and expenses:
Insurance policy benefits and change in future policy benefits		4,930			–		–			4,930
Interest credited to account balances		103,645			–		–			103,645
Amortization of deferred sales inducements		27,433			6,318		(13,266	)		20,485
Change in fair value of embedded derivatives		(200,869	)		–		200,869			–
Interest expense on notes payable		7,851			–		(564	)		7,287
Interest expense on subordinated debentures		9,880			–		–			9,880
Interest expense on amounts due under repurchase agreements		4,996			–		–			4,996
Amortization of deferred policy acquisition costs		99,310			10,755		(44,122	)		65,943
Other operating costs and expenses		24,818			–		182			25,000
Total benefits and expenses		81,994			17,073		143,099			242,166

Income before income taxes		82,597			15,365		(42,134	)		55,828
Income tax expense		28,678			5,447		(14,708	)		19,417
Net income	$	53,919		$	9,918	$	(27,426	)	$	36,411

Earnings per common share	$	0.99							$	0.67
Earnings per common share – assuming dilution	$	0.95							$	0.64

(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	$	20,030		$	–	$	20,030
Cost of money for index annuities		(149,320	)		–		(149,320	)
Change in the difference between fair value and remaining option cost at beginning and end of period		(101,388	)		100,965		(423	)
	$	(230,678	)	$	100,965	$	(129,713	)


Index credits included in interest credited to account balances		$	24,217			$	24,217

Page 4

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Operating Income

Three months ended June 30, 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	$	2,880		$	–	$	–		$	2,880
Annuity product charges		11,845			–		–			11,845
Net investment income		202,080			–		–			202,080
Realized losses on investments		(30,019	)		30,019		–			–
Change in fair value of derivatives		(73,313	)		–		6,052			(67,261	)
Total revenues		113,473			30,019		6,052			149,544

Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,321			–		–			2,321
Interest credited to account balances		49,469			–		–			49,469
Amortization of deferred sales inducements		(4,479	)		6,083		8,286			9,890
Change in fair value of embedded derivatives		17,745			–		(17,745	)		–
Interest expense on notes payable		3,722			–		(73	)		3,649
Interest expense on subordinated debentures		4,649			–		–			4,649
Interest expense on amounts due under repurchase agreements		2,024			–		–			2,024
Amortization of deferred policy acquisition costs		18,620			10,133		7,603			36,356
Other operating costs and expenses		12,100			–		449			12,549
Total benefits and expenses		106,171			16,216		(1,480	)		120,907

Income before income taxes		7,302			13,803		7,532			28,637
Income tax expense		2,535			4,893		2,532			9,960
Net income	$	4,767		$	8,910	$	5,000		$	18,677

Earnings per common share	$	0.09							$	0.35
Earnings per common share – assuming dilution	$	0.09							$	0.33

(a)

Change in fair value of derivatives:
Proceeds received at expiration or gains recognized upon early termination	$	7,263		$	–	$	7,263
Cost of money for index annuities		(74,213	)		–		(74,213	)
Change in the difference between fair value and remaining option cost at beginning and end of period		(6,363	)		6,052		(311	)

	$	(73,313	)	$	6,052	$	(67,261	)

Index credits included in interest credited to account balances	$	7,807				$	7,807

Page 5

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Operating Income/Net Income

Quarterly Summary – Most Recent 5 Quarters (Unaudited)

		Q2 2008			Q1 2008			Q4 2007			Q3 2007			Q2 2007
	(Dollars in thousands, except per share data)
Revenues:
Traditional life and accident and health insurance premiums	$	2,880		$	3,316		$	3,032		$	3,344		$	3,190
Annuity product charges		11,845			12,098			12,805			12,576			11,453
Net investment income		202,080			195,488			191,107			183,732			175,719
Change in fair value of derivatives		(67,261	)		(62,452	)		(7,249	)		56,332			68,821
Total revenues		149,544			148,450			199,695			255,984			259,183

Benefits and expenses:
Insurance policy benefits and change in future policy benefits		2,321			2,609			2,029			2,360			2,097
Interest credited to account balances		49,469			54,176			110,294			165,821			168,141
Amortization of deferred sales inducements		9,890			10,595			9,364			9,177			9,124
Interest expense on notes payable		3,649			3,638			3,772			3,770			3,793
Interest expense on subordinated debentures		4,649			5,231			5,644			5,673			5,614
Interest expense on amounts due under repurchase agreements		2,024			2,972			4,084			4,764			3,060
Amortization of deferred policy acquisition costs		36,356			29,587			27,712			27,776			28,405
Other operating costs and expenses		12,549			12,451			11,154			11,582			14,083
Total benefits and expenses		120,907			121,259			174,053			230,923			234,317

Operating income before income taxes		28,637			27,191			25,642			25,061			24,866
Income tax expense		9,960			9,457			8,622			8,639			8,539

Operating income (a)		18,677			17,734			17,020			16,422			16,327
Realized gains (losses) on investments, net of offsets		(8,910	)		(1,008	)		(2,283	)		210			11
Net effect of SFAS 133, net of offsets		(5,000	)		32,426			(19,735	)		(13,189	)		4,266

Net income (loss)	$	4,767		$	49,152		$	(4,998	)	$	3,443		$	20,604

Operating income per common share (a)		$	0.35			$	0.32			$	0.30			$	0.29			$	0.29
Operating income per common share – assuming dilution (a)		$	0.33			$	0.31			$	0.29			$	0.28			$	0.28

Earnings (loss) per common share	$	0.09	$	0.89	$	(0.09	)	$	0.06	$	0.36
Earnings (loss) per common share – assuming dilution	$	0.09	$	0.85	$	(0.08	)	$	0.06	$	0.35

Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share		53,934		55,431		56,348			56,878		57,122
Earnings (loss) per common share - assuming dilution		56,856		58,221		59,154			59,774		60,309

(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 6

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Capitalization/ Book Value per Share


	June 30, 2008			December 31, 2007
	(Dollars in thousands, except per share data)
Capitalization:
Notes payable	$	255,018		$	268,339
Subordinated debentures payable to subsidiary trusts		268,383			268,330
Total debt		523,401			536,669

Total stockholders’ equity		593,114			611,635

Total capitalization		1,116,515			1,148,304
Accumulated other comprehensive loss (AOCL)		88,425			38,929
Total capitalization excluding AOCL (a)	$	1,204,940		$	1,187,233

Total stockholders’ equity	$	593,114		$	611,635
Accumulated other comprehensive loss		88,425			38,929
Total stockholders’ equity excluding AOCL (a)	$	681,539		$	650,564

Common shares outstanding (b)		53,350,670			55,919,585

Book Value per Share: (c)
Book value per share including AOCL	$	11.12		$	10.94
Book value per share excluding AOCL (a)	$	12.77		$	11.63
Book value per share excluding AOCL and SFAS 133 (a)	$	12.89		$	12.22

Debt-to-Capital Ratios: (d)
Senior debt / Total capitalization		21.1	%		22.6	%
Adjusted debt / Total capitalization		28.4	%		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 - 2,353,053 shares; 2007 - 2,993,148 shares and exclude unallocated shares held by ESOP: 2008 - 600,228 shares; 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 including AOCL.

Page 7

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Annuity Deposits by Product Type

	Six Months Ended June 30,				Year Ended December 31,
Product Type	2008		2007		2007
	(Dollars in thousands)
Index Annuities:
Index Strategies	$	724,619	$	756,851	$	1,578,347
Fixed Strategy		421,930		278,372		515,229
		1,146,549		1,035,223		2,093,576
Fixed Rate Annuities:
Single-Year Rate Guaranteed		13,971		28,094		45,948
Multi-Year Rate Guaranteed		2,643		3,672		5,158
		16,614		31,766		51,106
Total before coinsurance ceded		1,163,163		1,066,989		2,144,682
Coinsurance ceded		971		1,075		1,779
Net after coinsurance ceded	$	1,162,192	$	1,065,914	$	2,142,903

Surrender Charge Protection and Account Values by Product Type

Annuity Surrender Charges and Net (of coinsurance) Account Values at June 30, 2008

	Surrender Charge							Net Account Value
Product Type	Avg. Years At Issue		Avg. Years Remaining		Avg. % Remaining			Dollars in Thousands		%

Index Annuities		14.1		11.1		15.0	%	$	11,635,231		86.1	%
Single-Year Fixed Rate Guaranteed Annuities		10.6		4.9		7.7	%		1,420,005		10.5	%
Multi-Year Fixed Rate Guaranteed Annuities		7.1		2.7		5.7	%		456,894		3.4	%

Total		13.5		10.2		13.9	%	$	13,512,130		100.0	%

Page 8

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Annuity Liability Characteristics

	Fixed Annuities Account Value		Index Annuities Account Value
	(Dollars in thousands)
SURRENDER CHARGE PERCENTAGES (1):
No surrender charge	$	195,410	$	100,699
0.0% < 2.0%		14,258		4,676
2.0% < 3.0%		87,919		22,285
3.0% < 4.0%		39,007		68,047
4.0% < 5.0%		134,103		151,550
5.0% < 6.0%		38,689		135,788
6.0% < 7.0%		245,079		427,004
7.0% < 8.0%		251,175		399,154
8.0% < 9.0%		295,533		343,809
9.0% < 10.0%		74,103		442,313
10.0% or greater		501,623		9,539,906
	$	1,876,899	$	11,635,231

	Fixed and		Weighted
	Index		Average
	Annuities		Surrender
	Account Value		Charge
	(Dollars in thousands)
SURRENDER CHARGE EXPIRATION BY YEAR
Out of Surrender Charge	$	296,109		0.00	%
2008		58,526		5.01	%
2009		351,910		6.43	%
2010		397,736		5.30	%
2011		370,565		5.93	%
2012		546,550		6.90	%
2013		699,812		7.35	%
2014		652,531		8.52	%
2015		608,795		10.77	%
2016		821,502		11.69	%
2017		1,019,196		12.68	%
2018		838,365		14.19	%
2019		513,629		13.87	%
2020		632,552		15.04	%
2021		643,363		16.69	%
2022		1,266,013		18.55	%
2023		2,573,911		19.53	%
2024		1,200,400		19.88	%
2025		20,665		20.00	%
	$	13,512,130		13.89	%

Page 9

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Annuity Liability Characteristics

	Fixed Annuities Account Value		Index Annuities Account Value
	(Dollars in thousands)
APPLICABLE GUARANTEE PERIOD:
Annual reset (2)	$	1,666,204	$	11,507,042
Multi-year (3 - 5 years)		210,695		128,189
	$	1,876,899	$	11,635,231

ULTIMATE MINIMUM GUARANTEE RATE (3):
2.00%	$	–	$	1,500
2.20%		4,760		89,986
2.25%		–		1,439,338
2.25% (3)		231,842		1,156,991
3.00%		1,554,830		7,404,352
3.50% (4)		–		1,543,064
4.00%		85,467		–
	$	1,876,899	$	11,635,231


CREDITED RATE (INCLUDING BONUS INTEREST) VS. ULTIMATE MINIMUM GUARANTEED RATE DIFFERENTIAL (5) (6):
No differential	$	79,683	$	–
› 0.0% - 0.5		1,267,472		1,957,268
› 0.5% - 1.0		324,489		817,189
› 1.0% - 1.5		139,473		122,424
› 1.5% - 2.0		30,484		90
› 2.0% - 2.5		22,134		–
› 2.5% - 3.0		11,287		–
Greater than 3.0%		1,877		–
Index strategies		–		8,738,260
	$	1,876,899	$	11,635,231

(1)	In addition, $1,155,764 (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 129 basis points.

Page 10

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Spread Results


	Six Months Ended June 30,				Year Ended December 31,
	2008		2007		2007
Average yield on invested assets		6.17%		6.09%		6.11%
Cost of money:
Aggregate		3.49%		3.38%		3.50%
Cost of money for index annuities		3.51%		3.34%		3.51%
Average crediting rate for fixed rate annuities:
Annually adjustable		3.26%		3.27%		3.28%
Multi-year rate guaranteed		3.92%		4.22%		4.14%
Investment spread:
Aggregate		2.68%		2.71%		2.61%
Index annuities		2.66%		2.75%		2.60%
Fixed rate annuities:
Annually adjustable		2.91%		2.82%		2.83%
Multi-year rate guaranteed		2.25%		1.87%		1.97%

Page 11

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Summary of Invested Assets

	June 30, 2008					December 31, 2007
	Carrying Amount		Percent			Carrying Amount		Percent
	(Dollars in thousands)

Fixed maturity securities:
United States Government full faith and credit	$	20,262		0.2	%	$	19,882		0.2	%
United States Government sponsored agencies		7,536,663		57.2	%		8,208,909		65.1	%
Corporate securities, including redeemable preferred stocks		1,521,857		11.5	%		1,419,129		11.2	%
Mortgage and asset-backed securities:
Government		73,683		0.6	%		75,353		0.6	%
Non-Government		1,574,006		12.0	%		641,232		5.1	%
Total fixed maturity securities		10,726,471		81.5	%		10,364,505		82.2	%
Equity securities		152,549		1.2	%		87,412		0.7	%
Mortgage loans on real estate		2,213,548		16.8	%		1,953,894		15.5	%
Derivative instruments		74,068		0.5	%		204,657		1.6	%
Policy loans		422		–			427		–
	$	13,167,058		100.0	%	$	12,610,895		100.0	%

Page 12

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Credit Quality of Fixed Maturity Securities

		June 30, 2008					December 31, 2007
NAIC Designation	Rating Agency Equivalent	Carrying Amount		Percent			Carrying Amount		Percent
		(Dollars in thousands)

1	Aaa/Aa/A	$	9,590,538		89.4	%	$	9,361,755		90.3	%
2	Baa		1,036,540		9.7	%		915,259		8.8	%
3	Ba		60,778		0.6	%		53,784		0.5	%
4	B		24,387		0.2	%		20,310		0.3	%
5	Caa and lower		14,228		0.1	%		13,397		0.1	%
6	In or near default		–		–			–		–
		$	10,726,471		100.0	%	$	10,364,505		100.0	%

Watch List Securities - June 30, 2008

General Description	Amortized Cost		Unrealized Losses			Estimated Fair Value		Months Unrealized Losses Greater Than 20%

Corporate bonds:
Finance, insurance and real estate companies	$	18,376	$	(4,821	)	$	13,555	1 - 5
U.S. retail company		10,501		(2,241	)		8,260	5
Consumer staple company		9,626		(1,863	)		7,763	0
U.S. media company		5,750		(1,775	)		3,975	5
Mortgage-backed securities		2,366		(840	)		1,526	2
Common & preferred stock:
Finance, insurance and real estate companies		101,484		(29,278	)		72,206	1 - 5
Telecommunication and media companies		9,433		(2,713	)		6,720	1 - 2
	$	157,536	$	(43,531	)	$	114,005

Page 13

American Equity Investment Life Holding Company

Financial Supplement – June 30, 2008

Mortgage Loans by Region and Property Type

	June 30, 2008					December 31, 2007
	Carrying Amount		Percent			Carrying Amount		Percent
	(Dollars in thousands)
Geographic distribution
East	$	512,269		23.1	%	$	458,418		23.5	%
Middle Atlantic		160,348		7.2	%		133,662		6.8	%
Mountain		360,093		16.3	%		310,244		15.9	%
New England		45,311		2.0	%		45,618		2.3	%
Pacific		172,287		7.8	%		141,264		7.2	%
South Atlantic		390,697		17.7	%		344,800		17.7	%
West North Central		390,169		17.6	%		356,334		18.2	%
West South Central		182,374		8.3	%		163,554		8.4	%
	$	2,213,548		100.0	%	$	1,953,894		100.0	%

Property type distribution
Office	$	628,958	28.4	%	$	586,109	30.0	%
Medical Office		134,473	6.1	%		108,667	5.6	%
Retail		523,954	23.7	%		438,214	22.4	%
Industrial/Warehouse		517,301	23.3	%		453,654	23.2	%
Hotel		139,971	6.3	%		115,758	5.9	%
Apartments		108,064	4.9	%		105,431	5.4	%
Mixed use/other		160,827	7.3	%		146,061	7.5	%
	$	2,213,548	100.0	%	$	1,953,894	100.0	%

Page 14

American Equity Investment Life Holding Company

Financial Supplement – June 30, 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
Second Quarter	$	11.63	$	7.61	$	8.15	$	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:

Computershare 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 15

American Equity Investment Life Holding Company

Financial Supplement – June 30, 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 16

IOWA		001-31911		42-1447959
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

5000 Westown Parkway, Suite 440, West Des Moines, Iowa		50266
(Address of Principal Executive Offices)		(Zip Code)

	AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

	By:	/s/ Wendy L. Carlson
		Wendy L. Carlson
		Chief Financial Officer and
		General Counsel

Exhibit Number		Description
99.1		Press Release dated July 30, 2008 and Financial Supplement dated June 30, 2008