Who Owns Brookfield Reinsurance Company?

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Who owns Brookfield Reinsurance Company?

Understanding Brookfield Reinsurance Company's ownership is key to grasping its strategic moves and market influence. This entity emerged as a separate company in June 2021, following its spin-off from Brookfield Asset Management. Established in 2020 and based in Pembroke, Bermuda, it was created to leverage Brookfield Asset Management's investment acumen in the insurance sector, particularly for life and annuity liabilities.

Brookfield Reinsurance focuses on acquiring and managing insurance and reinsurance operations, specializing in life, annuity, and pension risk transfer. Its strategy involves generating long-term value through robust investment capabilities and asset management expertise, providing reinsurance solutions to manage capital and risk. The company's strategic acquisitions have significantly strengthened its position, especially in the North American annuity market, with projected insurance assets nearing $100 billion after the acquisition of American Equity Investment Life Holding Co. in early 2024. For a deeper dive into its operational environment, consider a Brookfield Reinsurance PESTEL Analysis.

Brookfield Reinsurance Ltd. was established on December 10, 2020, in Bermuda, as a strategic move by Brookfield Asset Management to consolidate its reinsurance operations. Sachin G. Shah was appointed as its CEO. The company's inception is a direct result of Brookfield Asset Management's initiative to create a dedicated insurance platform.

Establishment Date Brookfield Reinsurance Ltd. was formally established on December 10, 2020. CEO Appointment Sachin G. Shah was appointed as the Chief Executive Officer to lead the new insurance business. Spin-off Completion The spin-off of Brookfield Reinsurance was completed on June 28, 2021. Shareholder Distribution Shareholders received one Class A exchangeable limited voting share of Brookfield Reinsurance for every 145 Brookfield shares held. Parent Company Interest Brookfield Corporation retains all Class C non-voting shares, representing its residual economic interest. Strategic Objective The early structure aimed to create a 'paired' entity, offering investors flexibility and leveraging investment expertise.

The spin-off of Brookfield Reinsurance was executed as a special dividend on June 28, 2021. Holders of Brookfield Asset Management's Class A and Class B shares received one Class A exchangeable limited voting share of Brookfield Reinsurance for every 145 shares they held. This strategic distribution ensured that Brookfield Asset Management, and subsequently Brookfield Corporation, maintained a significant economic stake and control over the new entity. Brookfield Corporation holds all Class C non-voting shares, which represent its residual economic interest in Brookfield Reinsurance, although these shares do not carry voting rights.

Early Ownership Structure

The initial ownership of Brookfield Reinsurance was closely tied to its parent company, Brookfield Asset Management. This structure was designed for strategic flexibility and to leverage the parent company's expertise.

• Brookfield Asset Management orchestrated the creation and spin-off.
• Shareholders of Brookfield Asset Management received Brookfield Reinsurance shares via a special dividend.
• Brookfield Corporation holds Class C non-voting shares, signifying its residual economic interest.
• The structure allowed for a 'paired' entity, offering investors economic equivalence.

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Brookfield Reinsurance's ownership journey began with its public listing on June 28, 2021, on both the Toronto Stock Exchange and New York Stock Exchange. Its initial market capitalization stood at approximately $6.9 billion as of June 27, 2021, marking a significant entry into the public markets.

Brookfield Corporation, formerly Brookfield Asset Management Inc., maintains a significant and ongoing interest in Brookfield Reinsurance. This relationship is characterized by Brookfield Corporation's ownership of Class C non-voting shares, which represent its residual economic stake in the reinsurance entity. As of 2024, institutional investors are key stakeholders, though precise holdings for the largest among them are not publicly detailed. Overall, individual shareholders account for approximately 42.39% of the company's ownership, with a notable presence of Canadian shareholders at 33.51% and U.S. shareholders at 5.34% among the top 1,000 holdings. The company's strategic focus on wealth protection, retirement services, and tailored capital solutions aims to attract a broad and stable investor base. Recent strategic moves, including the $1.1 billion acquisition of Argo Group International in late 2023 and the $4.3 billion acquisition of American Equity Investment Life Holding Company (AEL) in May 2024, have substantially increased its insurance assets to over $100 billion, thereby influencing its capital structure and shareholder composition.

Brookfield Reinsurance Ownership Snapshot

Understanding who owns Brookfield Reinsurance is crucial for assessing its stability and strategic direction. The company's structure involves significant backing from its former parent, Brookfield Corporation, alongside a growing base of institutional and individual investors.

• Brookfield Corporation holds residual economic interest via Class C non-voting shares.
• Individual shareholders represent approximately 42.39% of ownership based on the top 1,000 holdings.
• Canadian shareholders constitute 33.51% of these top holdings.
• U.S. shareholders make up 5.34% of the top 1,000 holdings.
• Strategic acquisitions are reshaping the company's asset base and investor profile.
• Learn more about the Growth Strategy of Brookfield Reinsurance.

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As of July 22, 2024, Brookfield Reinsurance's Board of Directors consists of ten elected members. Five directors are chosen by holders of Class A exchangeable limited voting shares, while the remaining five are elected by the holder of Class B limited voting shares.

The voting structure of Brookfield Reinsurance is notably influenced by its Class B shares, which number 24,000 and are held through a voting trust. This arrangement grants the holder of these shares significant sway in electing half of the board members. The Class A exchangeable limited voting shares and Class A-1 exchangeable non-voting shares possess a one-for-one exchangeability with Brookfield Corporation's Class A limited voting shares, establishing a degree of economic parity. Recent shareholder approvals in July 2024 for bye-law amendments are set to streamline the capital structure. These changes include re-designating Class A-1 non-voting shares to Class A limited voting shares and implementing a voting power cap of 9.9% for any single shareholder, irrespective of their economic stake. These adjustments, anticipated for implementation in Q3 2024, are designed to foster a more dispersed voting power among the shareholder base.

Board Composition and Voting Influence

Brookfield Reinsurance's board is evenly split between directors elected by Class A and Class B shareholders. The holder of Class B shares, through a voting trust, wields considerable influence over board appointments.

• Ten elected directors as of July 22, 2024.
• Five directors elected by Class A shareholders.
• Five directors elected by the holder of Class B shares.
• Class B shares are held via a voting trust.
• Recent bye-law amendments aim to limit individual voting power to 9.9%.

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Brookfield Reinsurance has seen significant shifts in its ownership and structure over the past few years, notably its spin-off from Brookfield Asset Management in June 2021. This move established it as a separate, publicly traded entity focused on the insurance and reinsurance sector.

These developments underscore a strategic evolution for the company, aiming to expand its offerings and solidify its market position. The acquisitions have substantially grown its asset base, positioning it as a key player in the annuity market. The planned rebranding to 'Brookfield Wealth Solutions' signifies a strategic pivot towards a more comprehensive suite of financial services, aligning with broader industry trends. Furthermore, the implemented governance changes, such as the voting power limitation, suggest a commitment to stable and diversified shareholder influence, a critical aspect for long-term growth and investor confidence. Brookfield Corporation, as the parent entity, continues to play a pivotal role, leveraging its extensive ecosystem to support the growth of its wealth solutions business, which is identified as a core strategic driver.

Strategic Acquisitions Drive Growth

The company has significantly expanded its operations through major acquisitions, including Argo Group International and American Equity Investment Life Holding Company. These moves have bolstered its insurance assets to over $100 billion.

Name Change Reflects Evolving Strategy

A forthcoming name change to 'Brookfield Wealth Solutions' signals a strategic shift towards offering a wider array of wealth and retirement services. This rebranding aligns with the company's expanding business model.

Enhanced Corporate Governance

Shareholder approval of bye-law amendments to cap voting power at 9.9% for Class A shares demonstrates a proactive approach to corporate governance. This aims to ensure broader shareholder representation and control.

Parent Company Support and Shareholder Value

Brookfield Corporation's continued investment through share repurchases, totaling approximately $1.2 billion from 2024 into 2025, highlights its commitment to enhancing intrinsic value per share for its shareholders.

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