v3.26.1
Derivatives
 3 Months Ended
Mar. 31, 2026
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:

March 31, 2026December 31, 2025
Notional AmountFair ValueNotional AmountFair Value
(In millions)AssetsLiabilitiesAssetsLiabilities
Derivatives designated as hedges
Foreign currency hedges
Swaps26,971 $787 $660 26,437 $560 $868 
Forwards1,950 99 21 2,302 81 34 
Interest rate swaps4,198 51 275 4,347 86 242 
Forwards on net investments243 5 — 234 — — 
Interest rate swaps35,231 69 47 31,252 129 30 
Total derivatives designated as hedges1,011 1,003 856 1,174 
Derivatives not designated as hedges
Equity options100,871 5,683 327 97,259 6,905 170 
Futures52 88 — 890 192 1 
Foreign currency swaps20,398 335 561 19,248 230 744 
Interest rate swaps and forwards26,803 115 448 14,606 72 295 
Other swaps2,262 109 14 2,845 78 2 
Foreign currency forwards47,663 1,011 3,482 47,486 857 3,356 
Embedded derivatives
Funds withheld, including related parties(2,921)46 (2,765)150 
Interest sensitive contract liabilities— 13,549 — 14,749 
Total derivatives not designated as hedges4,420 18,427 5,569 19,467 
Total derivatives$5,431 $19,430 $6,425 $20,641 
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 January 2036. During the three months ended March 31, 2026 and 2025, Athene recognized losses of $64 million and gains of $96 million, respectively, in other comprehensive income (“OCI”) associated with these hedges. There were no amounts deemed ineffective during the three months ended March 31, 2026 and 2025. As of March 31, 2026, Athene expected an estimated $5 million to be reclassified to income within the next 12 months based on current market economics; however, actual amounts recognized may vary as a result of changes in relevant market conditions.

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 $20.9 billion and $21.3 billion as of March 31, 2026 and December 31, 2025, respectively. The carrying value of interest sensitive contract liabilities in qualifying fair value hedges of foreign currency swaps was $8.3 billion and $8.4 billion as of March 31, 2026 and December 31, 2025, respectively.

The following represents the carrying amount and the cumulative amount of fair value hedging adjustments of hedged liabilities, excluding liabilities solely hedging foreign currency risk and cumulative amounts related to foreign currency gains (losses):

March 31, 2026December 31, 2025
(In millions)Carrying amount of the hedged liabilitiesCumulative amount of fair value hedging gains (losses)Carrying amount of the hedged liabilitiesCumulative amount of fair value hedging gains (losses)
Interest sensitive contract liabilities
Foreign currency interest rate swaps$4,033 $87 $4,271 $77 
Interest rate swaps20,287 81 19,175 (20)
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 March 31, 2026
Investment related gains (losses)
Foreign currency forwards$40 $(36)$4 $7 $— 
Foreign currency swaps173 (174)(1)— — 
Foreign currency interest rate swaps(59)58 (1)— — 
Interest rate swaps(107)106 (1)— — 
Interest sensitive contract benefits
Foreign currency interest rate swaps24 (23)1 — — 
Three months ended March 31, 2025
Investment related gains (losses)
Foreign currency forwards(115)104 (11)10 — 
Foreign currency swaps(332)359 27 — — 
Foreign currency interest rate swaps137 (134)3 — — 
Interest rate swaps129 (125)4 — — 
Interest sensitive contract benefits
Foreign currency interest rate swaps23 (23)— — — 

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

Three months ended March 31,
(In millions)20262025
Foreign currency forwards$1 $26 
Foreign currency swaps193 107 

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 March 31, 2026 and 2025, these derivatives had gains of $4 million and losses of $8 million, respectively. These derivatives are included in foreign currency translation and other adjustments on the condensed consolidated statements of comprehensive income (loss). As of March 31, 2026 and December 31, 2025, the cumulative foreign currency translations recorded in AOCI related to these net investment hedges were gains of $18 million and $14 million, respectively. During the three months ended March 31, 2026 and 2025, there were no amounts deemed ineffective.

Derivatives Not Designated as Hedges

Equity options

Athene uses equity indexed options to economically hedge 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 March 31,
(In millions)20262025
Equity options$(1,155)$(936)
Futures(47)(7)
Foreign currency swaps436 (279)
Interest rate swaps and forwards and other swaps(114)(67)
Foreign currency forwards46 (210)
Embedded derivatives on funds withheld(161)158 
Amounts recognized in investment related gains (losses)(995)(1,341)
Embedded derivatives in indexed annuity products1
1,531 1,003 
Total gains (losses) on derivatives not designated as hedges$536 $(338)
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
March 31, 2026
Derivative assets$8,352 $(2,726)$(5,283)$343 $(126)$217 
Derivative liabilities(5,835)2,726 2,566 (543)591 48 
December 31, 2025
Derivative assets$9,190 $(2,602)$(5,908)$680 $(889)$(209)
Derivative liabilities(5,742)2,602 2,491 (649)561 (88)
1 The gross amounts of recognized derivative assets and derivative liabilities are reported on the condensed consolidated statements of financial condition. As of March 31, 2026 and December 31, 2025, 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.

Certain derivative instruments contain provisions for credit-related events, such as a negative credit event of a credit default swap’s reference entity. If a credit event were to occur, Athene may be required to settle an outstanding liability. Athene has written credit default swaps primarily on high-yield indices. As of March 31, 2026 and December 31, 2025, the carrying value of these derivatives was $107 million and $76 million in assets, respectively, and less than $1 million of liabilities as of each respective period. As of March 31, 2026 and December 31, 2025, the maximum amount of potential future payments on the credit default swaps was $985 million and $510 million, respectively.