Athene Holding (ATHS) risk factors, FY2024 10-K

Other

1. 01We operate in a highly competitive industry that includes a number of competitors, which could limit our ability to achieve our growth strategies and could materially and adversely affect our business, financial condition, results of operations, cash flows and prospects
2. 02If we are unable to attract and retain IMOs, banks and broker-dealers, sales of certain of our products may be adversely affected
3. 03From time to time we may pursue acquisitions and block reinsurance transactions, and our ability to consummate these transactions on economically advantageous terms acceptable to us in the future is unknown
4. 04We rely significantly on third parties for various services, and we may be held responsible for obligations that arise from the acts or omissions of third parties under their respective agreements with us
5. 05We are subject to significant operating and financial restrictions imposed by our credit agreements and certain letters of credit, and we are also subject to certain operating restrictions imposed by the indentures to which we are a party
6. 06We are subject to risks associated with pandemics, epidemics, disease outbreaks and other public health crises which could impact our business, financial condition and results of operations in the future
7. 07Artificial intelligence could increase competitive, operational, legal and regulatory risks to our businesses in ways that we cannot predict

Risks Relating to Liquidity and Regulatory Capital

1. 08As a financial services company, we are exposed to liquidity risk, which is the risk that we are unable to meet near-term obligations as they come due
2. 09The amount of statutory capital that our insurance and reinsurance subsidiaries have, or that they are required to hold, can vary significantly from time to time and is sensitive to a number of factors outside of our control
3. 10In March 2024, the BMA published revised rules and new guidance notes to enhance Bermuda’s regulatory regime for commercial insurers. The material enhancement to the framework includes updates to the technical provisions, the computation of the BSCR and the BSCR adjustment framework
4. 11Repurchase agreement programs subject us to potential liquidity and other risks

Risks Relating to Market and Credit Risk

1. 12Our investments are subject to market and credit risks that could diminish their value and these risks could be greater during periods of extreme volatility or disruption in the financial and credit markets, which could adversely impact our business, financial condition, results of operations, liquidity and cash flows
2. 13Interest rate fluctuations could adversely affect our business, financial condition, results of operations, liquidity and cash flows
3. 14We are subject to the credit risk of our counterparties, including ceding companies, reinsurers, plan sponsors and derivative counterparties
4. 15Our investment portfolio may be subject to concentration risk, particularly with respect to single issuers, including Athora, among others; industries, including financial services; and asset classes, including real estate
5. 16Many of our invested assets are relatively illiquid and we may fail to realize profits from these assets for a considerable period of time, or lose some or all of the principal amount we invest in these assets if we are required to sell our invested assets at a loss at inopportune times
6. 17Our investments linked to real estate are subject to credit risk, market risk, servicing risk, loss from catastrophic events and other risks, which could diminish the value that we obtain from such investments
7. 18Our investments in assets linked to real estate are also subject to loss in the event of catastrophic events, such as earthquakes, hurricanes, floods, tornadoes and fires
8. 19Our investment portfolio may include investments in securities of issuers based outside the US, including emerging markets, which may be riskier than securities of US issuers
9. 20While we seek to hedge foreign currency risks, foreign currency fluctuations may reduce our net income and our capital levels, adversely affecting our financial condition
10. 21Climate change and regulatory and other efforts to reduce climate change, as well as environmental, social and governance requirements could adversely affect our business
11. 22Financial markets have been subject to inflationary pressures, and continued rising inflation may adversely impact our business and results of operations

Risks Relating to Our Relationship with Apollo

1. 23There are potential conflicts of interests between Apollo, our corporate parent, and the holders of our preferred stock
2. 24ACRA System IMA Termination Rights
3. 25The historical investment portfolio performance of Apollo should not be considered as indicative of the future results of our investment portfolio, or our future results or our ability to declare and pay dividends on our preferred stock
4. 26The returns that we expect to achieve on our investment portfolio may not be realized

Risks Relating to Insurance and Other Regulatory Matters

1. 27Our industry is highly regulated and we are subject to significant legal restrictions and obligations, and these restrictions and obligations may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and prospects
2. 28Our failure to obtain or maintain licenses and/or other regulatory approvals as required for the operations of our insurance subsidiaries may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and prospects
3. 29position and reduce our growth prospects, causing our financial position, results of operations and cash flows to fall below our current expectations
4. 30Changes in the laws and regulations governing the insurance industry or otherwise applicable to our business, may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and prospects
5. 31our securities-licensed representatives and a reduction in the products we offer to our clients, any of which could have a material adverse effect on our business, financial condition and results of operations

Risks Relating to Taxation

1. 32The tax treatment of our structure is complex and may be subject to change as a result of new laws or regulations or differing interpretations of existing laws and regulations, under audit or otherwise, potentially on a retroactive basis
2. 33Our ownership of certain non-US entities could cause us to be subject to US federal income tax in amounts greater than expected, which could adversely affect the value of your investment
3. 34AHL may be subject to UK taxation by reason of its historic UK tax residency or as a result of ceasing to be a UK tax resident
4. 35The Base Erosion and Anti-Abuse Tax (BEAT) may significantly increase our tax liability
5. 36Changes in tax law could adversely impact our earnings
6. 37There is US income tax risk associated with reinsurance between US insurance companies and their Bermuda affiliates
7. 38The recently enacted Bermuda Corporate Income Tax Act 2023, or other changes in Bermuda tax laws, may negatively affect our earnings and results from operations

Risks Relating to Investment in Our Securities

1. 39AHL is a holding company with limited operations of its own. As a consequence, AHL’s ability to pay dividends on its securities and to make timely payments on its debt obligations will depend on the ability of its subsidiaries to make distributions or other payments to it, which may be restricted by law
2. 40Our business may be the target or subject of, and we may be required to defend against or respond to, litigation, regulatory investigations, enforcement actions or reputational harm