AM Best Affirms Credit Ratings of North End Re (Cayman) SPC

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (ICR) of a- (Excellent) for North End Re (Cayman) SPC, with a stable outlook. The ratings highlight NER Cayman’s very strong balance sheet strength, adequate operating performance, and effective enterprise risk management. In 2021, NER Cayman entered a reinsurance agreement with American Equity Investment Life Holding Company (AEL) to assume up to $10 billion of annuity products, yielding $195 million in net income by year-end 2022. NER Cayman is a subsidiary of Brookfield Reinsurance Ltd. (BNRE), which focuses on capital-based insurance solutions and completed a $5.1 billion acquisition of American National Group in May 2022.

Positive

• Affirmed a Financial Strength Rating of A- and Long-Term ICR of a-, indicating strong financial health.
• Reported net income of $195 million as of year-end 2022 due to successful reinsurance agreement with AEL.

Negative

• None.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of North End Re (Cayman) SPC (NER Cayman) (Cayman Islands). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NER Cayman’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect NER Cayman’s execution of its business plan, which includes maintaining a favorable risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).

In 2021, NER Cayman executed a reinsurance transaction with American Equity Investment Life Holding Company [NYSE: AEL] (AEL), under which NER Cayman agreed to assume up to $10 billion of annuity products issued by American Equity Investment Life Insurance Company, a subsidiary of AEL. As of year-end 2022, the management of this business has produced favorable results with NER Cayman reporting $195 million in net income.

NER Cayman’s parent, Brookfield Reinsurance Ltd. [NYSE, TSX: BNRE] (Brookfield Reinsurance), is a publicly traded company focused on providing capital-based solutions and insurance and reinsurance services to individuals and institutions. Brookfield Reinsurance seeks capital-intensive business to leverage its asset management and sourcing capabilities. In August 2021, Brookfield Reinsurance announced an agreement to acquire American National Group, Inc. in a cash transaction valued at approximately $5.1 billion, which closed in May 2022. NER Cayman geographically complements its sister company, North End Re Ltd., which also began its reinsurance operations in 2021. The company has another sister company, Brookfield Annuity Company, that provides pension risk transfer solutions in Canada.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Kevin Varvaro

Senior Financial Analyst

+1 908 439 2200, ext. 5487

kevin.varvaro@ambest.com

Christopher Sharkey

Associate Director, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Anthony McSwieney

Senior Financial Analyst

+1 908 439 2200, ext. 5715

anthony.mcswieney@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best

FAQ

What are the latest ratings for BNRE and AEL?

AM Best has affirmed a Financial Strength Rating of A- and a Long-Term Issuer Credit Rating of a- for North End Re (Cayman) SPC.

How much did NER Cayman report in net income?

NER Cayman reported $195 million in net income as of year-end 2022.

What reinsurance agreement did NER Cayman enter with AEL?

NER Cayman agreed to assume up to $10 billion of annuity products issued by American Equity Investment Life Insurance Company.

What was the acquisition value by BNRE in 2022?

Brookfield Reinsurance announced a $5.1 billion acquisition of American National Group, which closed in May 2022.