Alternative Asset Manager Brookfield's Diversification, Exploring UK Pension Insurance with Possible Acquisitions

Brookfield Corporation (NYSE:BN) and its affiliate Brookfield Reinsurance Ltd (NYSE:BNRE) are reportedly exploring the possibility of venturing into the U.K.'s pension insurance sector. 

This exploration focuses on the bulk annuities segment, where potential acquisition targets may include companies like Just Group and Pension 

Bulk annuities represent a type of insurance that enables companies' pension plans to transfer their liabilities to an insurer.

Reuters reported that the deliberations are still in their early stages, and there is no assurance that Brookfield will proceed with such a move or engage in a transaction. 

While Brookfield spun off its reinsurance arm as a separate entity in 2021, the unit continues to contract administration and management services from its former parent. 

Assets originated by Brookfield Reinsurance are invested in North America as part of the services agreement.

This move aligns with a broader trend observed in the financial industry, where entities like Brookfield and Apollo Global Management (NYSE:APO) have been increasingly entering the life insurance and annuities sector, searching for long-term capital for investment opportunities.

Should Brookfield proceed with this move, it would signify the company's first investment outside North America via its reinsurance arm.

The popularity of bulk annuities in the U.K. has been on the rise, with approximately £30 billion ($36.64 billion) in pension liabilities transferred to the insurance industry last year, as per data from broker Aon. 

The U.K. presents a significant investment opportunity for Brookfield, with approximately £1.3 trillion in defined benefit pension schemes in the U.K. private sector as of September 2022.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.