Brookfield Reinsurance has announced its financial results for the third quarter of 2023 reporting a net income of $77 million, which compares to the $139 million reported in the same period last year.
According to Brookfield, this figure was the result of contributions from the firm’s distributable operating earnings (DOE), less unrealized mark-to-market losses on its equity investments and insurance reserves.
Q3 2023 DOE increased to $182 million, from the $159 million reported in the same period last year. This growth was driven by higher net investment income given the significant progress made over the last twelve months repositioning assets into higher yielding investment strategies, Brookfield noted.
“We continue to benefit from maintaining a short duration asset portfolio in the current rising interest rate environment and currently holding $7 billion of cash and short-term treasuries. The increase in results in the nine month period also benefited from our asset repositioning efforts, as well as from contributions from American National, which was acquired in May 2022.” the firm stated.
Overall, Brookfield reported net premiums of $1.01 million for Q3 2023, compared to $1.05 for Q3 2022. Net investment income grew to $525 million in the quarter, from $452 million in last year’s quarter. The figure for net investment gains and losses, including funds withheld, went down in Q3 2023, to $94 million from $133 million.
This third quarter, the firm closed 16 pension risk transfer (PRT) transactions, which according to the announcement, represent over $250 million in premiums. It also deployed approximately $1 billion at returns in excess of 9%, increasing our gross portfolio wide yield to 5.5%
Sachin Shah, CEO of Brookfield Reinsurance, commented: “Our strong results for the third quarter reflect the continued build out of our operating platform and increased investment returns.
“As our business grows to $100 billion in assets in the near term, we are focused on further scaling across our core business lines, managing risk and driving investment yields and returns to our shareholders.”
Regarding Brookfield’s previously announced acquisition of Argo Group, the firm is expecting it to close before the end of the year. It also noted that its acquisition of American Equity Investment Life Holding Company (AEL) is progressing well and on track to close in early 2024.
During the quarter, Brookfield contributed $2.1 billion of real estate and other assets into BNRE in exchange for Class C shares, to support the growth of the business.
“Upon closing of the Argo Group and AEL transactions, we will have over $100 billion of assets across a diversified platform of life, annuities and P&C,” the firm said.
It added: “With the strong, complementary distribution channels between the companies and our existing platform, we have a credible path to meaningfully grow our insurance assets organically, and by leveraging Brookfield’s investment capabilities, these assets will be redeployed at attractive risk-adjusted returns, driving increased spread earnings and delivering significant returns to our shareholders.”
