After years of watching the industry closely, we decided in 2020 the time was right to establish insurance solutions as one of our key businesses. Interest rates were effectively at zero and had been for a long time.
The Insurance Solutions Story
Brookfield Place, New York City
In October of that year, we became a cornerstone investor in American Equity Investment Life Insurance (AEL), an Iowa-based insurance company founded in 1995. AEL is a leader in the development and sale of fixed index and fixed rate annuity products. At the same time, we agreed to reinsure $5 billion of annuity policies already written and as much as $5 billion worth of future AEL payments.
“It was the right time to take on long-tailed annuities, which have defined periods of cash flow because interest rates were so low,” said Sachin Shah, who was appointed to run the insurance business. “The risk in taking on long-tailed liabilities is that interest rates will go lower, which no longer seemed likely. As interest rates rise again, it should prove to be very attractive business over the long term.” Today, Brookfield Reinsurance has close to $45 billion in assets under management, an A or A- ratings at each of its licensed subsidiaries, and more than 3,400 operating employees.
In June 2021, Brookfield Reinsurance was spun off and began trading as a separate, listed company. In May 2022, Brookfield Reinsurance acquired Galveston, Texas–based American National for $5.1 billion.
Today, Brookfield Reinsurance is focused on providing capital solutions for insurance companies. In doing so, it seeks to match long-duration liabilities with a portfolio of high-quality investments to generate attractive, risk-adjusted returns for policyholders and other stakeholders. Through its operating subsidiaries, Brookfield Reinsurance provides a broad range of insurance products and services, including reinsurance solutions and direct insurance for individuals and institutions, including life insurance, individual and group annuities, health insurance, and property and casualty insurance for personal lines, agribusiness and certain commercial exposures.
“We believe that access to Brookfield’s alternative asset strategies can deliver long-term value in this space,” Shah said. “And we are confident that Brookfield Reinsurance is well positioned to grow to a scale of $500 billion over the next decade.”
Case Study: American National
American National joined our portfolio in 2022 following the successful completion of our $5.1 billion acquisition. Founded in 1905 by prominent Texas businessman William Lewis Moody Jr., the company was controlled by the Moody family for more than a century. By the beginning of World War II, it was one of the oldest and most-established insurance companies in Texas.
American National continued to grow in the postwar years, building a network with operations in all 50 U.S. states and Puerto Rico, underwriting, issuing, and administering life, health, and property and casualty policies, as well as annuities. As a national, multi-line insurer, American National has generated stable growth through the decades.
Brookfield Reinsurance’s strong balance sheet and flexible capital structure allowed us to make a compelling offer to American National’s shareholders, and our experience executing on large, multifaceted transactions allowed us to close the transaction without disruption to the ongoing business, which continued to perform well throughout the process.
We expect to continue to grow the business and to enhance American National’s commitment to its policyholders by maintaining a strong capital position, promoting American National’s core operational strengths, and by leveraging our strategic relationship with Brookfield to source attractive investment opportunities.
Our acquisition of American National has provided Brookfield Reinsurance with an attractive platform for long-term growth in the U.S. and has helped us establish a strong presence in the insurance market.
