NEW YORK--(BUSINESS WIRE)--UNITE HERE wrote to over 1,100 agents of American National Insurance Group on July 24, 2023, warning them that their company’s takeover by Bermuda-domiciled Brookfield Reinsurance (NYSE: BNRE) has brought about a shift in investment strategy for the assets backing the insurance products they sell, and urging them to contact their state insurance regulators for information.
Writing directly to retail insurance agents listed on American National’s website, the letter noted that given a recent focus by state and federal regulators on the risks inherent in private equity-backed insurance companies, “You may wish to familiarize yourself with the changes Brookfield (NYSE: BN) has made to the investments backing the American National policies that you sell.”
The letter points readers to evidence that since Brookfield Reinsurance acquired American National in May 2022, the insurer has placed its entire bond portfolio up for sale, has sold billions of dollars of “safer, easier-to sell securities,” and has reinvested primarily in complex and illiquid securities, including commercial real estate debt and private credit. Many of these investments were purchased from other Brookfield affiliates. The letter asserts that related-party transactions normally require disclosure, but most of these investments were listed as “unaffiliated” in American National’s sworn annual statement.
UNITE HERE highlighted specific investments pertaining to Brookfield Property Partners (BPY), which Brookfield took private in 2021 after it took $2 billion in losses in 2020; and Canary Wharf Investment Holdings, a joint venture between Brookfield and the government of Qatar which owns Canary Wharf, the London development that has recently made international headlines for financial distress.
“Current and future American National policyholders may not know that their insurance company has undergone such a dramatic shift in its investment strategy, or that their policies are now backed by investments in the ‘inherently risky’ private credit industry or the ‘office real estate apocalypse,’” the letter argues.
The letter concludes by urging agents to contact their state regulators to request information, including whether regulators are aware of the extent of related-party real estate debt on American National’s investment schedules: “And as an agent putting your good name behind the products you sell, don’t you have a right to know whether regulators are monitoring the changes in American National’s investment portfolio, including the rise in related-party investments, and especially those classified in Schedule D as ‘unaffiliated’?”
The letter can be viewed in its entirety on PrivateEquityRetirementWatch.org/AmNatAgents
UNITE HERE is the hospitality workers’ union in the U.S. and Canada, representing 300,000 workers in hotels, gaming, food service, airports, and more.