Brookfield Reinsurance .(BNRE) - 2024 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended March 31, 2024, was $337 million, a significant increase of$430 million compared to a net loss of $93 million in the prior year quarter [94]. - Distributable Operating Earnings (DOE) rose by$134 million to $279 million for the three months ended March 31, 2024, primarily due to new business and a full quarter of earnings contribution from Argo [95]. - Revenues for Brookfield for the three months ended March 31, 2024, were$22.9 billion, with net income of $519 million, compared to$23.3 billion and $424 million in the same period of 2023 [144]. - For the three months ended March 31, 2024, net income was$337 million compared to a net loss of $93 million in the same period of 2023 [154]. - Distributable Operating Earnings (DOE) for Q1 2024 was$279 million, up from $145 million in Q1 2023, reflecting a significant increase in operating performance [154]. Asset and Liability Management - Total assets increased by$1.5 billion to $63.1 billion, driven by capital deployment from annuity sales and new Pension Risk Transfer (PRT) deals [97]. - Total liabilities increased to$53.9 billion from $52.8 billion, reflecting growth in policyholder account balances and future policy benefits [102]. - Adjusted Equity rose to$9.3 billion from $4.7 billion, indicating strong capital growth [93]. - Cash and cash equivalents decreased by$1.7 billion to $2.6 billion, primarily due to redeployment into short-term investments [97]. - Corporate and subsidiary borrowings decreased by$24 million from December 31, 2023 to March 31, 2024, as corporate borrowings repayment offset additional subsidiary borrowings [106]. Investment Performance - Net investment income increased by $174 million to$574 million, driven by growth in the investment portfolio and rotation into higher yielding investment strategies [94]. - Investment related gains were $145 million, an increase of$251 million compared to a loss of $106 million in the prior year quarter, driven by mark-to-market movements [94]. - The company reported net investment gains and losses of$(259) million for Q1 2024, compared to $145 million in Q1 2023, highlighting volatility in investment performance [154]. - The investment portfolio's total value increased to$42,565 million in Q1 2024, up from $39,838 million in Q4 2023, which is a 6.1$145 million, compared to a loss of $106 million in the same period of 2023 [239]. Cash Flow and Liquidity - As of March 31, 2024, total liquidity was$27.6 billion, including $2.574 billion in cash and cash equivalents, and$24.3 billion in liquid financial assets [127]. - The company generated $232 million from operating activities for the three months ended March 31, 2024, compared to$198 million in the same period of 2023, reflecting business growth and increased PRT deals [133]. - Investing activities resulted in a net cash deployment of $2.3 billion during the current quarter, a significant increase from$74 million in the prior year quarter [134]. - Financing activities yielded a net cash inflow of $333 million for the three months ended March 31, 2024, up from$86 million in the same period of 2023, driven by policyholder deposits and reduced repayment activity [135]. - The company maintains a revolving credit facility of $400 million with Brookfield and$750 million with external banks, providing flexibility for working capital and growth investments [131]. Policyholder and Premiums - Net premiums and other policy revenue reached $1.6 billion, up$746 million from $897 million in the prior year quarter, primarily due to a higher number of PRT deals closed [94]. - Future policy benefits and policyholders' account balances increased by$778 million from December 31, 2023 to March 31, 2024, driven by new premiums and interest-sensitive contract benefits [106]. - Ceded unearned premiums increased by $165 million, primarily due to additional reinsurance agreements in the Direct Insurance segment [106]. - Direct Insurance segment DOE increased by$122 million to $232 million for the three months ended March 31, 2024, compared to$110 million in the prior year [109][110]. - Pension Risk Transfer segment DOE increased to $14 million for the three months ended March 31, 2024, compared to$11 million in the prior year, driven by 16 PRT deals representing $776 million of premiums [113][114]. Credit and Risk Management - The allowance for credit losses on available-for-sale securities was concentrated within the financials sector as of March 31, 2024, indicating potential risks in that area [159]. - The company utilized various derivative financial instruments to manage risks associated with assets and liabilities, ensuring stability in financial performance [165]. - The total gross unrealized losses for corporate debt securities were$680 million as of March 31, 2024, indicating significant market pressures [200]. - The company recognized a gain of $41 million on hedged items and a corresponding loss of$(41) million on derivatives designated as hedging instruments for the three months ended March 31, 2024 [228]. - The company reported no interest income recognized on loans in non-accrual status for the three months ended March 31, 2024 [212]. Future Outlook - Forward-looking statements indicate the company anticipates continued growth and operational improvements, although actual results may vary due to unforeseen factors [155]. - The company has an undrawn equity commitment of $2.0 billion from Brookfield, available for future growth initiatives [131]. - The company’s liquidity position is supported by$615 million in undrawn commitments related to the Federal Home Loan Bank program [131]. - The company experienced a significant increase in policyholders' account deposits, totaling $992 million in Q1 2024, compared to$725 million in Q1 2023 [187]. - The company reported comprehensive income of $141 million for the three months ended March 31, 2023, compared to a comprehensive loss of$99 million in the same period of 2022 [182].