American Equity Investment Life Holding Co. on Tuesday reported record annuity sales of $1.1 billion during the second quarter. The West Des Moines-based company, which is a leading underwriter of fixed-rate and fixed index annuities, also reported a 21 percent increase in operating income for the quarter. Net income for quarter was $9 million, or 16 cents per share, compared to $3.7 million, or 7 cents per share, for the same period in 2008.

Company officials said strong demand for principal-protected savings products and growth in invested assets contributed to the results.

American Equity saw record sales volumes in each month during the second quarter, with June sales reaching an all-time high of $409 million, the company said in a release. “Fixed annuities are particularly attractive in this time of financial uncertainty because they offer protection from market volatility for the full value of policyholder accounts including principal and all annually credited interest,” the company said.

On an amortized cost basis, invested assets grew 9.8 percent from the previous year, from $13.4 billion on June 30, 2008, to $14.7 billion on June 30, 2009. The gross investment spread improved due to higher yields on invested assets and lower costs of borrowing.

During the second quarter the company implemented a number of steps to reinforce the capital adequacy of its principal life subsidiary and increase sales capacity, among them restructuring its sales commissions to defer portions of commission expenses, and a contribution to statutory capital and surplus from an additional draw on the company’s bank line of credit.