Brookfield Reinsurance, soon to be the owner of Argo Group, has reported a staggering increase in second-quarter net income year-on-year.

The company recorded net income of $360 million for the three months ended June 30 (2022 Q2: $25 million) as a result of unrealised mark-to-market gains on its investments and insurance reserves.

Net income also continues to benefit from the repositioning of assets across its insurance accounts into higher-yielding investments.

Sachin Shah, chief executive of Brookfield Reinsurance, said: “The strength of our second-quarter results are underpinned by significant investment portfolio redeployment and the execution of strategic initiatives post the acquisition of American National one year ago.

“Following the close of our announced transactions, our total insurance assets will be over $100 billion, representing an important milestone in the continued growth of a diversified insurance business of scale.”

Brookfield said it recognised $160 million and $305 million of distributable operating earnings for the three and six months ended June 30, respectively, compared with $46 million and $59 million in the prior-year periods.

Results in the period were driven by contributions from American National, which Brookfield acquired in May 2022, as well as higher net investment income from reinsurance treaties closed in late 2021.

Brookfield said it originated more than $3 billion of annuity sales in the quarter, including $650 million of flow business within its existing reinsurance treaties.

The company said it closed more than 25 pension risk transfer transactions, representing approximately $530 million in premiums.

Brookfield said it has approximately $1 billion of corporate liquidity, with an additional $22 billion of cash and liquid assets within its insurance portfolios.

The company said: “Amid a volatile market backdrop in the first half of 2023, we continue to find opportunities to deploy capital for deep value and fund our strong pipeline of investments.

“Our strong liquidity positions us well to support the redeployment of our investment portfolios, while also remaining well capitalised to meet the needs of our policyholders and clients.”

In February, Argo Group, the Bermudian-based specialty insurer, announced that it had entered into a definitive merger agreement with Brookfield that will see the company acquire Argo in an all-cash transaction valued at approximately $1.1 billion.

Brookfield said the Argo acquisition remains on track to close in the second half of 2023.

It added: “Upon closing of the Argo Group and AEL transactions, we will have deployed approximately $10 billion of capital within Brookfield Reinsurance since its inception, and our total insurance assets are expected to exceed $100 billion.

“By leveraging Brookfield’s investment capabilities, these assets will be redeployed at attractive risk-adjusted returns, driving increasing spread earnings and delivering significant returns to our shareholders.”