Brookfield Re turns $337m profit in first quarter
On the heels of its acquisition of American Equity Life, Bermuda-based Brookfield Reinsurance has announced it earned $337 million in the first quarter as it almost doubled net premiums and investment income increased by more than half.
The result contrasted with a $93 million loss in the first quarter of 2023 as the life and property casualty insurer said it expected to grow to $20 billion of annual annuity writing following the AEL takeover.
“Our business continued to deliver strong financial results for the first quarter of 2024," said chief executive officer Sachin Shah. "With our recent acquisition of American Equity Life now complete, we’ve reached a significant milestone as one of the largest providers of annuities in North America.
"We are well positioned to scale our existing platform and offerings, diversify our retirement services capabilities, and lay the groundwork for the next phase of growth for our company.”
The company said the premiums and other policy revenue rose to $1.6 billion from $897 million.
Net investment income rose to $684 million from $451 million while net realized and unrealised gains improved to $259 million from a $145 million loss.
In line with the growth of the company, benefits and claims paid on insurance contracts rose to $1.4 billion from $742 million and acquisition costs rose to $151 million from $68 million. Operating expenses also rose to $295 million from $176 million.
Management said the increase in earnings reflected strong annuity sales and other premium growth over the last twelve months, as well as higher spread earnings on its existing business, driven by higher net investment income resulting from the progress made repositioning assets into higher yielding investment strategies.
"Our first quarter earnings also benefited from strong performance in our property and casualty businesses, which included a full quarter of earnings contribution from Argo Group, the US specialty P&C platform we acquired in late 2023," the company said.
"Today, we are in a strong liquidity position across the portfolio, with over $25 billion of cash and short-term liquid investments across our investment portfolios, and another $25 billion of long-term liquid investments, inclusive of our recently acquired assets with the acquisition of AEL.
"These liquid assets will facilitate the ongoing rotation of our investment portfolio into higher yielding investment strategies, while also continuing to ensure we have sufficient liquidity coverage for our liabilities in the case of any stress events across the broader market."
Brookfield Re said the acquisition of AEL made the company one of the largest providers of annuities in North America, with a float of over $100 billion.
"AEL’s strong franchise and track record of servicing its policyholders and distribution partners is very complementary to our existing business, and we expect to grow meaningfully as we leverage the synergies of our existing annuity platform, held through American National, to grow to $20 billion of annual annuity writing capabilities in the near term.
"Today our combined businesses generate annualised cashflows of approximately $1.4 billion, and as we reposition the investment portfolio, we are on track to achieve $2 billion of cash flows annually in the next 18 to 24 months."
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