v3.25.3
Derivatives
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives
5. Derivatives

Athene uses a variety of derivative instruments to manage risks, primarily equity, interest rate, foreign currency and market volatility. See note 7 for information about the fair value hierarchy for derivatives.

The following table presents the notional amount and fair value of derivative instruments:

September 30, 2025December 31, 2024
Notional AmountFair ValueNotional AmountFair Value
(In millions)AssetsLiabilitiesAssetsLiabilities
Derivatives designated as hedges
Foreign currency hedges
Swaps23,466 $643 $878 15,669 $938 $211 
Forwards2,626 82 40 3,139 331 5 
Interest rate swaps4,382 78 257 4,506 — 654 
Forwards on net investments236 3 — 218 11 — 
Interest rate swaps28,196 142 32 24,885 55 138 
Total derivatives designated as hedges948 1,207 1,335 1,008 
Derivatives not designated as hedges
Equity options93,793 6,808 155 85,452 5,002 126 
Futures50 155 7 37 93 11 
Foreign currency swaps17,816 248 821 14,908 600 199 
Interest rate swaps and forwards13,235 73 300 3,255 67 124 
Other swaps2,285 8 — 2,644 3 5 
Foreign currency forwards41,581 644 2,363 39,598 1,054 2,083 
Embedded derivatives
Funds withheld, including related parties(2,878)172 (3,650)4 
Interest sensitive contract liabilities— 14,299 — 11,242 
Total derivatives not designated as hedges5,058 18,117 3,169 13,794 
Total derivatives$6,006 $19,324 $4,504 $14,802 

Derivatives Designated as Hedges

Cash Flow Hedges

Athene uses interest rate swaps to convert floating-rate interest payments to fixed-rate interest payments to reduce exposure to interest rate changes. The interest rate swaps will expire by June 2032. During the three months ended September 30, 2025 and 2024, Athene recognized gains of $14 million and $152 million, respectively, in other comprehensive income (“OCI”) associated with these hedges. During the nine months ended September 30, 2025 and 2024, Athene recognized gains of $186 million and $149 million, respectively, in OCI associated with these hedges. There were no amounts deemed ineffective during the three and nine months ended September 30, 2025 and 2024. As of September 30, 2025, no amounts were expected to be reclassified to income within the next 12 months.

Fair Value Hedges – Athene uses foreign currency forward contracts, foreign currency swaps, foreign currency interest rate swaps and interest rate swaps that are designated and accounted for as fair value hedges to hedge certain exposures to foreign currency risk and interest rate risk. The foreign currency forward price is agreed upon at the time of the contract and payment is made at a specified future date. The amortized cost of AFS debt securities in qualifying fair value hedges of foreign currency risk was $17,684 million and $16,307 million as of September 30, 2025 and December 31, 2024, respectively. The carrying value of interest sensitive contract liabilities in qualifying fair value hedges of foreign currency swaps was $8,771 million and $2,426 million as of September 30, 2025 and December 31, 2024, respectively.
The following represents the carrying amount and the cumulative fair value of hedging adjustments of hedged liabilities, excluding those solely hedging foreign currency risk:

September 30, 2025December 31, 2024
(In millions)Carrying amount of the hedged liabilities
Cumulative amount of fair value hedging gains (losses)1
Carrying amount of the hedged liabilitiesCumulative amount of fair value hedging gains (losses)
Interest sensitive contract liabilities
Foreign currency interest rate swaps$4,276 $82 $3,946 $488 
Interest rate swaps17,285 (51)17,873 130 
1 Excludes gains (losses) related to foreign currency risk.

The following is a summary of the gains (losses) related to the derivatives and related hedged items in fair value hedge relationships:

Amounts excluded
(In millions)DerivativesHedged itemsNetRecognized in income through amortization approachRecognized in income through changes in fair value
Three months ended September 30, 2025
Investment related gains (losses)
Foreign currency forwards$15 $(25)$(10)$8 $— 
Foreign currency swaps(9)29 20 — — 
Foreign currency interest rate swaps(34)13 (21)— — 
Interest rate swaps24 (17)7 — — 
Interest sensitive contract benefits
Foreign currency interest rate swaps23 (23)— — — 
Three months ended September 30, 2024
Investment related gains (losses)
Foreign currency forwards$(180)$184 $4 $4 $8 
Foreign currency swaps(313)282 (31)— — 
Foreign currency interest rate swaps255 (258)(3)— — 
Interest rate swaps382 (386)(4)— — 
Interest sensitive contract benefits
Foreign currency interest rate swaps26 (25)1 — — 
Amounts excluded
(In millions)DerivativesHedged itemsNetRecognized in income through amortization approachRecognized in income through changes in fair value
Nine months ended September 30, 2025
Investment related gains (losses)
Foreign currency forwards$(335)$307 $(28)$27 $— 
Foreign currency swaps(1,022)1,087 65 — — 
Foreign currency interest rate swaps447 (451)(4)— — 
Interest rate swaps218 (191)27 — — 
Interest sensitive contract benefits
Foreign currency interest rate swaps71 (70)1 — — 
Nine months ended September 30, 2024
Investment related gains (losses)
Foreign currency forwards$(1)$1 $— $35 $14 
Foreign currency swaps(158)144 (14)— — 
Foreign currency interest rate swaps132 (135)(3)— — 
Interest rate swaps267 (310)(43)— — 
Interest sensitive contract benefits
Foreign currency interest rate swaps66 (64)2 — — 

The following is a summary of the gains (losses) excluded from the assessment of hedge effectiveness that were recognized in OCI:

Three months ended September 30,Nine months ended September 30,
(In millions)2025202420252024
Foreign currency forwards$12 $13 $41 $(2)
Foreign currency swaps41 56 61 82 

Net Investment Hedges

Athene uses foreign currency forwards to hedge the foreign currency exchange rate risk of its investments in subsidiaries that have a reporting currency other than the U.S. dollar. Hedge effectiveness is assessed based on the changes in forward rates. During the three months ended September 30, 2025 and 2024, these derivatives had gains of $8 million and losses of $14 million, respectively. During the nine months ended September 30, 2025 and 2024, these derivatives had losses of $14 million and $11 million, respectively. These derivatives are included in foreign currency translation and other adjustments on the condensed consolidated statements of comprehensive income (loss). As of September 30, 2025 and December 31, 2024, the cumulative foreign currency translations recorded in AOCI related to these net investment hedges were gains of $15 million and $29 million, respectively. During the three and nine months ended September 30, 2025 and 2024, there were no amounts deemed ineffective.

Derivatives Not Designated as Hedges

Equity options

Athene uses equity indexed options to economically hedge fixed indexed annuity products that guarantee the return of principal to the policyholder and credit interest based on a percentage of the gain in a specified market index, including the S&P 500 and other bespoke indices. To hedge against adverse changes in equity indices, Athene enters into contracts to buy equity indexed options. The contracts are net settled in cash based on differentials in the indices at the time of exercise and the strike price.
Futures

Athene purchases futures contracts to hedge the growth in interest credited to the customer as a direct result of increases in the related indices. Athene enters into exchange-traded futures with regulated futures commission clearing brokers who are members of a trading exchange. Under exchange-traded futures contracts, Athene agrees to purchase a specified number of contracts with other parties and to post variation margin on a daily basis in an amount equal to the difference in the daily fair values of those contracts.

Interest rate swaps and forwards

Athene uses interest rate swaps and forwards to reduce market risks from interest rate changes and to alter interest rate exposure arising from duration mismatches between assets and liabilities. With an interest rate swap, Athene agrees with another party to exchange the difference between fixed-rate and floating-rate interest amounts tied to an agreed-upon notional principal amount at specified intervals.

Other swaps

Other swaps include total return swaps, credit default swaps and swaptions. Athene purchases total rate of return swaps to gain exposure and benefit from a reference asset or index without ownership. Credit default swaps provide a measure of protection against the default of an issuer or allow Athene to gain credit exposure to an issuer or traded index. Athene uses credit default swaps coupled with a bond to synthetically create the characteristics of a reference bond. Swaptions provide an option to enter into an interest rate swap and are used by Athene to hedge against interest rate exposure.

Embedded derivatives

Athene has embedded derivatives which are required to be separated from their host contracts and reported as derivatives. Host contracts include reinsurance agreements structured on a modco or funds withheld basis and indexed annuity products.

The following is a summary of the gains (losses) related to derivatives not designated as hedges:

Three months ended September 30,Nine months ended September 30,
(In millions)2025202420252024
Equity options$1,627 $596 $1,562 $2,298 
Futures123 26 107 152 
Interest rate swaps and forwards and other swaps91 (126)(1,334)(156)
Foreign currency forwards(361)209 (972)(657)
Embedded derivatives on funds withheld149 747 348 560 
Amounts recognized in investment related gains (losses)1,629 1,452 (289)2,197 
Embedded derivatives in indexed annuity products1
(1,260)(275)(1,144)(1,270)
Total gains (losses) on derivatives not designated as hedges$369 $1,177 $(1,433)$927 
1 Included in interest sensitive contract benefits on the condensed consolidated statements of operations.

Credit Risk

Athene may be exposed to credit-related losses in the event of counterparty nonperformance on derivative financial instruments. Generally, the current credit exposure of Athene’s derivative contracts is the fair value at the reporting date less any collateral received from the counterparty.

Athene manages credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties. Where possible, Athene maintains collateral arrangements and uses master netting agreements that provide for a single net payment from one counterparty to another at each due date and upon termination. Athene has also established counterparty exposure limits, where possible, in order to evaluate if there is sufficient collateral to support the net exposure.
Collateral arrangements typically require the posting of collateral in connection with its derivative instruments. Collateral agreements often contain posting thresholds, some of which may vary depending on the posting party’s financial strength ratings. Additionally, a decrease in Athene’s financial strength rating to a specified level can result in settlement of the derivative position.

The estimated fair value of Athene’s net derivative and other financial assets and liabilities after the application of master netting agreements and collateral were as follows:

Gross amounts not offset on the condensed consolidated statements of financial condition
(In millions)
Gross amount recognized1
Financial instruments2
Collateral (received)/pledgedNet amount
Off-balance sheet securities collateral3
Net amount after securities collateral
September 30, 2025
Derivative assets$8,884 $(2,406)$(6,186)$292 $(75)$217 
Derivative liabilities(4,853)2,406 2,047 (400)269 (131)
December 31, 2024
Derivative assets$8,154 $(2,209)$(5,922)$23 $— $23 
Derivative liabilities(3,556)2,209 1,333 (14)2 (12)
1 The gross amounts of recognized derivative assets and derivative liabilities are reported on the condensed consolidated statements of financial condition. As of September 30, 2025 and December 31, 2024, amounts not subject to master netting or similar agreements were immaterial.
2 Represents amounts offsetting derivative assets and derivative liabilities that are subject to an enforceable master netting agreement or similar agreement that are not netted against the gross derivative assets or gross derivative liabilities for presentation on the condensed consolidated statements of financial condition.
3 For non-cash collateral received, Athene does not recognize the collateral on the condensed consolidated statements of financial condition unless the obligor (transferor) has defaulted under the terms of the secured contract and is no longer entitled to redeem the pledged asset. Amounts do not include any excess of collateral pledged or received.