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Recent Acquisitions, Disposals & Other Transactions
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Recent Acquisitions, Disposals & Other Transactions Recent Acquisitions, Disposals & Other Transactions
Merger
On November 16, 2023, the Company completed the Merger, which resulted in a change to the Company’s ownership. The Company became an indirect wholly-owned subsidiary of Brookfield Wealth Solutions Ltd.
Pursuant to ASC 805, the total value of the consideration transferred was $1,058.9 million. This consisted of $1,056.6 million for 35,221,291 shares of common stock issued and outstanding immediately prior to the Merger which were automatically canceled and converted into the right to receive an amount in cash equal to $30.00, without interest, and a $2.3 million settlement of unvested employee stock. There is no contingent consideration arrangement in connection with the Merger.
On the date of the Merger, the transaction resulted in a $48.9 million bargain purchase since the value of the net assets acquired exceeded the purchase consideration. The bargain purchase determination is consistent with the fact that the Company’s shares traded at a discount to book value, and when considering the circumstances surrounding the Company at the time of sale, including those related to the strategic review.
The following table is a summary of the purchase price and the fair value of assets acquired and liabilities assumed as part of the Merger as of November 16, 2023:
As of
(in millions)November 16, 2023
Consideration transferred settling 35,221,291 shares of outstanding common stock
$1,056.6 
Consideration transferred settling unvested employee stock2.3 
Total consideration
$1,058.9 
Assets
Investments:
Fixed maturities available-for-sale, at fair value$2,525.3 
Mortgage loans144.9
Equity securities, at fair value11.7
Other investments327.8
Short-term investments, at fair value450.1
Total investments3,459.8 
Cash712.9
Accrued investment income17.1
Premiums receivable306.8
Reinsurance recoverables2,981.6
Other intangible assets186.1
Current income taxes receivable, net53.2
Deferred tax asset, net54.0
Ceded unearned premiums387.6
Operating lease right-of-use assets51.6
Other assets190.8
Value of business acquired176.3
Total assets (1)
$8,577.8 
Liabilities
Reserves for losses and loss adjustment expenses5,526.4
Unearned premiums986.2
Accrued underwriting expenses and other liabilities92.0
Ceded reinsurance payable, net257.4
Funds held49.9
Senior unsecured fixed rate notes127.9
Junior subordinated debentures241.0
Operating lease liabilities52.1
Total liabilities assumed (2)
$7,332.9 
Fair value of net assets acquired
$1,244.9 
Other claims on net assets:
Preferred stock
$137.1 
Bargain purchase recognized in Additional paid-in capital
$48.9 
(1) Reflects net fair value adjustments of $114.2 million to increase the total assets acquired, including value of business acquired and other intangible assets.
(2) Reflects net fair value adjustments of $80.9 million to reduce the total liabilities assumed.
Purchase Accounting Measurement Period Adjustment
The Merger resulted in a bargain purchase, which is uncommon, since the value of the net assets acquired exceeded the purchase consideration. The values of certain assets and liabilities were considered preliminary in nature and were subject to adjustment during the measurement period as additional information was obtained. As the valuations were finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed might have resulted in retrospective adjustments to the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.
During the three months ended September 30, 2024, the Company reduced its bargain purchase amount by $15.3 million to $33.6 million, resulting in a reduction to Additional paid-in capital. The adjustment related to the Company’s valuation of loss reserves.
Other Transactions
Merger with AGIH Merger Sub, Inc.
On September 25, 2024, the Company and AGIH Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“AGIH Merger Sub”), entered into an Agreement and Plan of Merger, pursuant to which, among other things, AGIH Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation (the “Merger with AGIH Merger Sub, Inc.”). The purpose of the Merger with AGIH Merger Sub, Inc., was to reduce the Company’s annual franchise taxes in the State of Delaware by reducing the number of authorized shares of the Company’s common stock and preferred stock. In connection with the consummation of the Merger with AGIH Merger Sub, Inc., the number of authorized shares of the Company’s common stock decreased from 2,000,000,000 to 1,000, each share of the Company’s common stock, par value $1.00 per share, of the Company was converted into and became one hundred millionth (1/100,000,000) of a validly issued, fully paid, and non-assessable share of common stock, par value $0.01 per share, of the Company, and the number of authorized shares of the Company’s preferred stock decreased from 30,000,000 to 10,000.
The merger constituted a common-control transaction as defined under current accounting standards as there was no change in control over the net assets of the Company. Therefore, these resulting financial statements reflect the financial position and results of operations as if the merger had occurred on January 1, 2024.
Commutation of Riverstone Holdings Limited Reinsurance Agreement
On June 2, 2024, the Company entered into a commutation with Riverstone Holdings Limited (part of the RiverStone International group) on its legacy assumed business from our former Malta operations, ArgoGlobal Holdings (Malta) Ltd., which was sold in 2022. This transaction had no material impact on our net income. The final consideration of $86.7 million was paid to Riverstone Holdings Limited on July 1, 2024.