Brookfield Re will join the $100bn club on Argo & AEL buys
Brookfield Reinsurance expects to have over $100 billion in insurance assets following the closing of its purchases of American Equity Investment Life (AEL) and Argo Group.
The two major buys prove a “important milestone in the continued growth of a diversified insurance business of scale,” CEO Sachin Shah (pictured) said in comment accompanying the group’s H1 2023 financial report.
Bermuda-based Brookfield Re, which was spun off from its eponymous parent company in 2020, said it expects to increase new business originations to $10 billion annually once its purchases of AEL and Argo are complete.
The company expects the $1.1 billion purchase of Bermuda-based Argo Group to close in the second half of 2023.
It added: Upon closing of the Argo Group and AEL Brookfield transactions, we will have deployed approximately $10 billion of capital within Brookfield Reinsurance since its inception, and our total insurance assets are expected to exceed $100 billion.
“By leveraging Brookfield’s investment capabilities, these assets will be redeployed at attractive risk-adjusted returns, driving increasing spread earnings and delivering significant returns to our shareholders.”
Following the ensuing purchase of AEL, Brookfield Re said it expects to “have the foundation to become a leading U.S. annuity originator.”
The company said it originated over $3 billion in annuity sales in the quarter, including $650 million of flow business within existing reinsurance treaties. It also closed 25 pension risk transfer transactions, representing approximately $530 million in premiums.
In the financial statements just out, Brookfield Re increased second quarter profits over 14 times to $360 million. Net premiums and other policy revenue declined fractionally to $1.20 billion. while the net investment income more than doubled to $525 million while investment gains swung to a positive take of $313 million from a prior period loss.
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