American Equity Hits Target of $3 Billion in Year-to-Date Annuity Sales and Reports Third Quarter 2009 Operating Earnings of $28.2 Million or $0.47 Per Diluted Common Share

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WEST DES MOINES, Iowa--(Business Wire)--
American Equity Investment Life Holding Company (NYSE: AEL), a leading
underwriter of fixed rate and index annuities, reported today that it achieved a
long-standing goal of writing in excess of $3 billion in new annuity premium in
a single year. Annuity sales for 2009 topped $3 billion in October, setting an
all time sales record since AEL was founded by Executive Chairman David J. Noble
in 1995. Commented Noble: "With our relentless focus on quality products and
excellent service we have stepped up sales to meet increased consumer demand for
principal protected products such as fixed index annuities. The steep market
declines and great volatility of the last twelve months have had a deep impact
on consumer attitudes about market risk and retirement income security. We
intend to remain at the forefront of the market for products which offer
insurance protection from risk of loss and guaranteed retirement income."

American Equity also reported record 2009 third quarter operating income1 of
$28.2 million, or $0.47 per diluted common share, a 26% increase over adjusted2
2008 third quarter operating income of $22.3 million, or $0.40 per diluted
common share. Financial highlights for the third quarter of 2009 include:

* Annuity sales increased 71% to $980 million compared to third quarter 2008
annuity sales of $572 million.
* Effective July 1, 2009 American Equity increased its capacity for sales growth
by entering into reinsurance arrangements with Athene Life Re, a newly formed
Bermuda life reinsurer, covering 20% of 2009 premium from two top selling fixed
index annuities and 80% of premium beginning in the third quarter of 2009 from a
multi-year rate guaranteed annuity.
* American Equity announced an "at the market" offering ("ATM") of up to $50
million of its common stock to increase its financial flexibility.
* Book value per outstanding common share increased to $13.03 including
Accumulated Other Comprehensive Income, up from $9.46 at December 31, 2008.

The net loss for the third quarter of 2009 was $3.0 million, or $0.04 per
diluted common share, compared to adjusted net loss of $11.7 million or $0.21
per diluted common share for the same period in 2008. The net loss for the third
quarters of 2009 and 2008 included $11.5 million and $39.2 million, respectively
of realized losses on investments due principally to "other than temporary
impairments", net of realized gains and offsets for taxes and adjustments to the
amortization of deferred acquisition costs and deferred sales inducements. These
2009 and 2008 quarters were also impacted by the effects of fair value changes
in derivatives and embedded derivatives which increased the third quarter 2009
net loss by $19.7 million and decreased the adjusted third quarter 2008 net loss
by $5.2 million.

RECORD OPERATING EARNINGS FROM CONTINUED STRONG INVESTMENT SPREADS

Record operating income for the third quarter of 2009 was driven primarily by an
increase in the yield on average invested assets to 6.38% and a reduction in the
cost of money for the quarter to 3.25% for a gross spread of 3.13%. Total
investment income of $241.5 million included nonrecurring fee income on bonds of
$2.4 million. Excluding nonrecurring fee income the investment yield an average
invested assets for the third quarter of 2009 was 6.31%. The average yield on
$1.3 billion of fixed income securities purchased in the third quarter of 2009
was 6.28% and $46.7 million of commercial mortgage loans were made during the
quarter at an average yield of 7.02%.

The cost of money on average annuity liabilities declined to 3.25% for the third
quarter of 2009, primarily as a result of a reduction in the aggregate cost of
one year call options purchased to fund index credits on index annuity reserves
and increased allocations by index annuity policyholders to the fixed rate
crediting strategy. Because new money yields declined in the third quarter with
narrowing of corporate credit spreads, American Equity has announced rate
reductions on new annuities sold after November 3, 2009.

Impairment losses on invested assets of $50.1 million were recognized in the
third quarter of 2009 and represent 0.3% of the carrying value of total invested
assets at September 30, 2009. These losses include: $26.1 million from
residential mortgage backed securities ("RMBS"); $18.5 million from corporate
securities; and $5.5 million from commercial mortgage loans. While substantially
all of the company`s RMBS are continuing to perform in accordance with their
terms, rating agency downgrades due to projected losses on a portion of these
assets necessitated impairment loss recognition.

CAPITAL MANAGEMENT

In response to the strong sales environment of 2009, American Equity has
implemented a variety of programs to support statutory capital and surplus at
the levels required to maintain its "A−" (Excellent) rating as assigned by A.M.
Best Company. During the first three quarters of 2009 these included: (i)
drawing down the remaining $75 million from the company`s bank line of credit
for contribution to the capital of the company`s primary operating subsidiary;
(ii) restructuring commission payments to sales agents to defer 25% over 2 years
after the date of sale; (iii) expanding a reinsurance treaty providing surplus
relief of $29.5 million pre-tax in connection with reserves held for annuity
withdrawal benefits. Also, in the third quarter of 2009, American Equity ceded
$513.8 million of annuity premium to Athene Life Re under funds withheld
reinsurance arrangements, including $23.4 million or 20% of multi-year rate
guaranteed premium received in the third quarter of 2009 and $490.4 million or
80% of certain index annuity premium received in the first nine months of 2009.
In addition, in connection with its ATM, the company issued 132,300 shares of
its common stock during the third quarter of 2009 in exchange for gross proceeds
of $1.1 million or an average price per share of $8.26.

To address additional capital requirements for RMBS resulting from downgrades in
that sector the company is also pursuing a "Re-Remic" transaction involving a
block of its Alt-A and Prime RMBS. Such a transaction would result in a
re-alignment of ratings to better reflect anticipated cash flows from such
securities and would enhance their liquidity. While the statutory accounting
treatment for such transactions has yet to be clarified, the company believes
the transaction will be beneficial under any of the possible accounting
outcomes. American Equity remains committed to taking such steps as are prudent
and cost effective to achieve an acceptable level of capital adequacy for its
financial strength ratings.

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 third quarter 2009
earnings on Thursday November 5, 2009, at 10:00 a.m. CST. 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 866-831-6162, passcode 80891304
(international callers, please dial 617-213-8852). 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 November 26, 2009 by calling 888-286-8010,
passcode 17772836 (international callers will need to dial 617-801-6888).

ABOUT AMERICAN EQUITY

American Equity Investment Life Holding Company, through its wholly-owned
operating subsidiaries, is a full service underwriter of fixed annuity and life
insurance products, with a primary emphasis on the sale of index and fixed rate
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.

1 In addition to net income (loss), 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. See accompanying tables for the reconciliation of net income (loss)
to operating income and a description of reconciling items.

2 All prior period financial statements have been adjusted due to a change in
accounting for convertible debt which was effective for financial statements
issued for fiscal years beginning after December 15, 2008 and interim periods
within those fiscal years. See more complete discussion in the company`s Form
10-Q for the quarterly period ended March 31, 2009.

American Equity Investment Life Holding Company

Net Income (Loss)/Operating Income (Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
(As Adjusted) (As Adjusted)
(Dollars in thousands, except per share data)
Revenues:
Traditional life and accident and health insurance premiums $ 3,166 $ 3,223 $ 9,519 $ 9,419
Annuity product charges 15,835 13,328 47,501 37,271
Net investment income 241,471 209,978 688,928 607,546
Change in fair value of derivatives 121,507 (83,753 ) 108,178 (314,431 )
Net realized gains on investments, excluding other than
temporary impairment ("OTTI") losses 5,510 2,258 10,587 3,343
OTTI losses on investments:
Total OTTI losses (94,216 ) (61,232 ) (171,668 ) (94,755 )
Portion of OTTI losses recognized in other comprehensive income 49,641 - 108,012 -
Net OTTI losses recognized in operations (44,575 ) (61,232 ) (63,656 ) (94,755 )
Gain (loss) on extinguishment of debt - (28 ) 3,098 (1,356 )
Total revenues 342,914 83,774 804,155 247,037

Benefits and expenses:
Insurance policy benefits and change in future policy benefits 2,737 2,126 6,910 7,056
Interest sensitive and index product benefits 75,288 50,387 207,028 154,032
Amortization of deferred sales inducements (8,081 ) 6,760 17,814 34,193
Change in fair value of embedded derivatives 259,737 (37,100 ) 414,636 (237,969 )
Interest expense on notes payable 3,370 5,014 11,288 15,127
Interest expense on subordinated debentures 3,841 4,669 12,078 14,549
Interest expense on amounts due under repurchase agreements 100 2,698 344 7,694
Amortization of deferred policy acquisition costs (2,972 ) 19,285 44,938 118,595
Other operating costs and expenses 13,961 13,549 45,305 38,550
Total benefits and expenses 347,981 67,388 760,341 151,827

Income (loss) before income taxes (5,067 ) 16,386 43,814 95,210
Income tax expense (benefit) (2,089 ) 28,102 11,305 55,214
Net income (loss) (2,978 ) (11,716 ) 32,509 39,996
Net realized gains and net OTTI losses on investments, net of offsets 11,491 39,222 10,954 49,140
Convertible debt retirement, net of income taxes - 16 (1,520 ) 793
Net effect of SFAS 133, net of offsets 19,640 (5,211 ) 31,121 (32,861 )

Operating income (a) $ 28,153 $ 22,311 $ 73,064 $ 57,068

Earnings (loss) per common share $ (0.05 ) $ (0.22 ) $ 0.59 $ 0.74
Earnings (loss) per common share - assuming dilution $ (0.04 ) $ (0.21 ) $ 0.57 $ 0.72
Operating income per common share (a) $ 0.49 $ 0.42 $ 1.32 $ 1.06
Operating income per common share - assuming dilution (a) $ 0.47 $ 0.40 $ 1.27 $ 1.02

Weighted average common shares outstanding (in thousands):
Earnings (loss) per common share 58,030 52,916 55,462 54,075
Earnings (loss) per common share - assuming dilution 60,833 55,835 58,231 56,953

American Equity Investment Life Holding Company

Operating Income
Three months ended September 30, 2009 (Unaudited)

Adjustments
SFAS 133
Realized and Other Operating
As Reported Losses Index Annuity Income (a)
(Dollars in thousands, except per share data)
Reserves:
Traditional life and accident and health insurance premiums $ 3,166 $ - $ - $ 3,166
Annuity product charges 15,835 - - 15,835
Net investment income 241,471 - - 241,471
Change in fair value of derivatives 121,507 - (178,312 ) (56,805 )
Net realized gains on investments, excluding other than - -
temporary impairment ("OTTI") losses 5,510 (5,510 ) - -
Net OTTI losses recognized in operations (44,575 ) 44,575 - -
Total revenues 342,914 39,065 (178,312 ) 203,667

Benefits and expenses:
Insurance policy benefits and change in future policy benefits 2,737 - - 2,737
Interest sensitive and index product benefits 75,288 - (591 ) 74,697
Amortization of deferred sales inducements (8,081 ) 8,590 19,700 20,209
Change in fair value of embedded derivatives 259,737 - (259,737 ) -
Interest expense on notes payable 3,370 - - 3,370
Interest expense on subordinated debentures 3,841 - - 3,841
Interest expense on amounts due under repurchase agreements 100 - - 100
Amortization of deferred policy acquisition costs (2,972 ) 12,673 31,771 41,472
Other operating costs and expenses 13,961 - - 13,961
Total benefits and expenses 347,981 21,263 (208,857 ) 160,387

Income (loss) before income taxes (5,067 ) 17,802 30,545 43,280
Income tax expense (benefit) (2,089 ) 6,311 10,905 15,127

Net income (loss) $ (2,978 ) $ 11,491 $ 19,640 $ 28,153

Earnings (loss) per common share $ (0.05 ) $ 0.49
Earnings (loss) per common share - assuming dilution $ (0.04 ) $ 0.47

(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 including net OTTI losses recognized in operations and related deferred
tax asset valuation allowance, SFAS 133, dealing with fair value changes in derivatives and embedded derivatives and the Lehman counterparty default on expired call
options. 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.

American Equity
Wendy L. Carlson, Chief Executive Officer
515-457-1824, wcarlson@american-equity.com
or
John M. Matovina, Chief Financial Officer
515-457-1813, jmatovina@american-equity.com
or
Julie L. LaFollette, Director of Investor Relations
515-273-3602, jlafollette@american-equity.com
or
Debra J. Richardson, Chief Administrative Officer
515-273-3551, drichardson@american-equity.com

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