Brookfield Corporation (BN -1.22%) has been quietly building an investment-led insurance platform. This strategy has provided it with a growing source of perpetual capital to invest, enabling it to generate more fee-based income. The company has grown its insurance portfolio to over $180 billion in assets.
That's only the beginning. Here's why insurance is becoming Brookfield's next growth engine.
Image source: The Motley Fool.
Quietly building an insurance behemoth one deal at a time
Brookfield initially formed its dedicated insurance platform in 2021 with the creation and spinoff of Brookfield Asset Management Reinsurance Partners, which it later renamed Brookfield Wealth Solutions (BNT -1.60%). The company initially created a separate insurance arm to grow that platform. It has certainly done that over the past five years.
The biggest growth driver has been acquisitions. Brookfield Wealth Solutions bought American National ($5.1 billion in 2022), Argo ($1.1 billion in 2023), AEL ($4.3 billion in 2024), and Just Group ($3.2 billion in 2026). These deals have helped grow its total capital from $5.7 billion in 2022 to $19.8 billion at the end of last year, while increasing its insurance assets from $45 billion to over $180 billion. Meanwhile, its distributable earnings have skyrocketed from $30 million in 2021 to $1.7 billion last year.
NYSE: BN
Key Data Points
Only the beginning
Brookfield is about to embark on the next phase of its investment-led insurance growth strategy by recombining with Brookfield Wealth Solutions. Shareholders will vote on the deal later this week, which the company hopes to close by year-end. The combination will simplify its corporate structure, provide its insurance operations with greater access to Brookfield's corporate balance sheet, and give it greater flexibility to optimize its long-term expansion.
The company aims to grow its insurance assets to $350 billion by 2030. While Brookfield plans to continue making acquisitions, it expects organic growth to do most of the heavy lifting going forward. It sees a combination of the recently closed Just Group deal, annuity growth, and asset rotation and optimization of its existing insurance assets, boosting the distributable earnings of its wealth solutions platform to $4.8 billion by 2030. Meanwhile, it anticipates that future acquisitions will push this segment's earnings up over $5.5 billion.
That's a meaningful growth engine for the leading global investment firm. Brookfield currently expects the combined company to grow its earnings at a 25% compound annual rate through 2030. The company anticipates its wealth solutions business to contribute 34% of its total earnings growth during that period. That's the biggest growth driver, well ahead of the growth contribution it expects from capital allocation (23%), carried interest (22%), asset management (19%), and its operating businesses (2%).
Brookfield's big-time growth engine
Brookfield has quietly built up a leading insurance platform over the past few years. That business has become a major growth driver for the company. It will play a starring role in supporting Brookfield's plans to deliver 25% compound annual earnings growth through 2030. That robust earnings growth should significantly boost Brookfield's stock, which it expects will be worth about $140 by 2030. With its share price currently in the low-$40's, Brookfield's high-powered insurance-driven growth profile makes it look like one of the best financial stocks to buy and hold for the long term right now.
