Brookfield Wealth Solutions Ltd. FY 2026 Earnings Call

Afternoon. My name is Seamus McLaughlin, and I am the Corporate Secretary of Brookfield Wealth Solutions Ltd.. Ms. Chair, we are ready to commence the meeting.

Good afternoon. It's now 1:00 P.M. time to begin the annual general and special meeting of shareholders of Brookfield Wealth Solutions Ltd.. My name is Lori Pearson, and as Chair of the Board, it's my pleasure to chair today's meeting. On behalf of the Board and our management team, I'd like to welcome everyone joining us today. Mr. Seamus McLaughlin, our Corporate Secretary, will set out the voting procedures for the meeting.

Voting during the meeting will take place on our virtual meeting platform. If you wish to vote, click on the Vote Here button located on the virtual meeting platform, make your selections, and then click on Submit Vote. For each matter being voted on, each holder of Class A limited voting shares and Class B limited voting shares, which we will refer to at this meeting as the Class A shares and Class B shares respectively, are entitled to one vote in respect of each share held, subject to the Class A voting adjustment as set out in our bylaws and the management information circular, which we will refer to at this meeting as the Class A voting adjustment.

With respect to the transaction resolution, holders of Class C non-voting shares, which we will refer to at this meeting as the Class C shares, are entitled to one vote in respect of each share held. We will conduct the votes on the matters before us by a poll. Every shareholder entitled to a vote on the matters to be considered has one vote in respect of each share held by that shareholder, subject to the Class A voting adjustment. Voting will be open for all resolutions throughout the formal portion of the meeting. This will allow you to vote on each resolution immediately or wait until the conclusion of discussion on each resolution prior to casting your vote. If you voted in advance of the meeting and do not wish to revoke your previously submitted proxies, no action is needed.

If you do vote on the online poll on a resolution, this will automatically revoke your previously submitted vote on this particular resolution. I will now call for registered shareholders and duly appointed proxy holders to submit their votes if they have not already done so. We welcome questions from our registered shareholders and duly appointed proxy holders, which may be submitted by submitting the question into the virtual meeting platform using the question function. Only registered shareholders or duly appointed proxy holders are able to submit questions at this meeting. Following the formal part of the meeting, there will be a management presentation. Questions will generally only be addressed at that time. To the extent there are questions regarding procedural matters or directly related to those motions before the meeting, those may be addressed during the formal portion of the meeting. Questions will be read out before being addressed.

If you connected to this meeting as a guest, you will not be able to submit a question. After the formal part of the meeting, Thomas Corbett, our Chief Financial Officer, will give a brief presentation. After this presentation, we would be happy to answer any questions. Should any technical difficulties arise during the meeting, we may pause proceedings briefly to ensure all participants continue to have access to the meeting.

Thank you, Seamus. I now call the meeting to order and ask Broadridge, by its representatives, Ms. Jennifer Huff and Ms. Estella Richard, to act as scrutineers. I also asked Seamus to act as Secretary of the Meeting. I'll now invite our General Counsel, Lyndsay Hatlelid, to review certain procedural matters for today's meeting.

There are nine items of business to be considered at today's meeting. The full text of each of these resolutions is set out in our management information circular. Ms. Chair, please be advised that the notice calling this meeting and the management information circular were disseminated to voting shareholders in accordance with all applicable laws. As Secretary of the Meeting, Seamus will keep a copy of the notice and confirmation of mailing with the minutes of this meeting. Based upon the scrutineers' preliminary report on attendance, I confirm that there is a quorum.

I declare the meeting properly constituted for the transaction of business for which it is called. Management has received proxies representing a majority of the company's Class A shares, as well as 100% of the Class B shares and Class C shares. These proxies direct management to vote a majority of such shares in favor of the resolutions. I will now take us through each item of business.

The polls are now open for voting on all resolutions.

As the first item of business, I'll now table the company's audited consolidated financial statements for the fiscal year ended December 31, 2025, together with the external auditor's report. Our annual financial statements have been mailed to shareholders who have requested them and are available on our website. We have not received any questions or comments submitted in connection with the financial statements. The second item of business is to elect directors who will serve until our next annual general meeting of shareholders. Lyndsay, would you please read the names of the proposed nominees?

The five proposed nominees for elections by holders of the company's Class A shares are William Cox, Anne Schaumburg, Dr. Soonyoung Chang, Lars Rodert, and Michele Coleman Mayes. The five proposed nominees for election by holders of the company's Class B shares are Sachin Shah, Barry Blattman, Gregory Morrison, Michael McRaith, and Lori Pearson. We have not received any questions or comments submitted in connection with the resolution.

Ms. Chair, I nominate for election the 10 nominees named to serve as directors of the company until the next annual general and special meeting of shareholders, or until their successors are elected or appointed.

Thank you, Tom. I declare the nominations closed. The third item of business today is the reappointment of the company's external auditor and authorizing the directors to set their remuneration.

Ms. Chair, on recommendation by the board, I move that Deloitte LLP be appointed the external auditor of the company until the next annual general meeting, and that the directors be authorized to set their remuneration. We have not received any questions or comments submitted in connection with the resolution.

Fourth item of business today is the approval of the return of capital distributions to the company shareholders. Shareholders are being asked to pass the resolution approving quarterly return of capital distributions on each of the Class A shares and the Class B shares of the company, and corresponding reductions to the authorized share capital of the company in each case in respect of the periods ending on or around September 29th, 2026, December 31st, 2026, March 31st, 2027, and June 30th, 2027.

Ms. Chair, on recommendation by the board, I move the resolution with respect to the quarterly return of capital distributions and the corresponding reductions be approved. We have not received any questions or comments submitted in connection with the resolution.

The fifth item of business today is the approval of the transaction resolution. As described in the management information circular, the transaction would result in the combination of the businesses of the company and Brookfield Corporation under a single publicly traded company, Brookfield Corporation Limited, which will be referred to as New BN in this meeting. The combination of the businesses of the company and Brookfield Corporation is designed to further simplify the corporate structure, create a more capital-efficient platform to support Brookfield's long-term growth, and open a path to broader global index inclusion. We're excited about this transaction as it'll mark the next evolution of Brookfield as a globally diversified and fully integrated insurance and investment organization, setting us up well for our next phase of growth.

If the transaction resolution is approved by the shareholders and subject to the receipt of the final order of the Ontario Superior Court of Justice, customary closing conditions, and receipt of all other legal and regulatory approvals, the transaction is expected to close in late Q4 2026.

Ms. Chair, on recommendation by the board, I move that the transaction resolution be approved. We have not received any questions or comments submitted in connection with the resolution.

The sixth item of business today is the approval of the resolution on the stock plan of New BN, as described in the management information circular.

Ms. Chair, on recommendation by the board, I move that the resolution accepting the stock option plan of New BN be approved. We have not received any questions or comments submitted in connection with this resolution.

The seventh item of business today is the approval of the resolution on the escrowed stock plan of New BN, as described in the management information circular.

Ms. Chair, on recommendation by the board, I move that the resolution accepting the escrowed stock plan of New BN be approved. We have not received any questions or comments submitted in connection with the resolution.

The eighth item of business today is the approval of the resolution on the escrowed stock plan of Brookfield Canada Corporation, described in the management information circular. Brookfield Canada Corporation will be referred to as the New BNC in this meeting.

Ms. Chair, on recommendation by the board, I move that the resolution accepting the escrowed stock plan of New BNC be approved. We have not received any questions or comments submitted in connection with the resolution.

The ninth and final item of business today is the approval of the resolution on the stock option plan of New BNC, as described in the management information circular.

Ms. Chair, on the recommendation by the board, I move that the resolution accepting the stock option plan of New BNC be approved. We have not received any questions or comments submitted in connection with the resolution.

The polls are now closed for voting on all resolutions.

Thank you, Lori and Lyndsay. I am pleased to declare that based on the ballots and proxies deposited for the meeting and the preliminary voting results, those nominated have been duly elected as directors of the company. I declare that each motion, other motion has been carried.

Since there's no other business being put to the shareholders, that concludes the formal portion of today's meeting. I declare the meeting terminated. I'll now invite the Chief Financial Officer of Brookfield Wealth Solutions, Tom Corbett, to give a brief presentation, and then we're happy to answer any questions.

Now that the formal meeting has concluded, I will make a presentation on behalf of the management team. At the end of the presentation, we will be available to respond to any questions or comments you may have submitted. Please note that in responding to questions and in talking about our initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. We refer you to the cautionary statements contained in our financial reports and other public documents for full details. Moving to our shareholder presentation, I will provide an update on our business. We'll then spend some time on our near-term priorities. Our business has continued to grow significantly since our spinoff in 2021. Today we have a strong balance sheet that supports our policyholders and positions us for future growth.

We now have approximately $180 billion of insurance assets, approximately $20 billion of group capital, and annualized Distributable Operating Earnings of over $2 billion. We remain very well-capitalized with strong levels of liquidity, with $35 billion of cash and short-term liquid investments. This financial strength provides the foundation to meet our commitments to policyholders, while also giving us the flexibility to continue investing in our business and pursuing attractive growth opportunities. Moving now to our core businesses, which continue to drive our growth. Our retail annuity business, with $127 billion of insurance assets across the U.S. and the U.K., continues to provide a steady source of income for individuals. The long-duration nature of these liabilities pairs well with Brookfield's investment capabilities, allowing us to generate attractive risk-adjusted returns. Our institutional annuity business now represents $42 billion of insurance assets across the U.S., Canada, and the U.K.

Through tailored group annuity solutions for defined benefit plan sponsors, along with our funding agreement-backed note program, we continue to expand this business with low-risk products that have little to no lapse exposure. Third, our property and casualty business represents $11 billion of insurance assets, serving both businesses and individuals. This business provides important diversification from our other spread-based lending businesses and enables us to generate value on both sides of the balance sheet through a focus on disciplined underwriting, paired with a flexible investment portfolio with larger allocations to proprietary equity strategies we have access to through our partnership with Brookfield Asset Management. Together, these lines of business give us a broad and diversified platform from which to serve customers and deliver long-term shareholder value. Looking ahead, we remain focused on executing against a clear set of strategic priorities.

We will continue to broaden our products and distribution channels to drive further growth in both our retail and institutional annuity businesses. We also remain focused on repositioning our investment portfolios, leveraging Brookfield Asset Management's best-in-class investment expertise to achieve strong risk-adjusted returns. In the U.K., through our strong balance sheet capital investment expertise we provide, we are focused on supporting our recently acquired Just Group's continued growth as a leading participant in the institutional and retail annuity markets, while at the same time expanding our global footprint through new opportunities, with a focus on Asia. Underpinning these priorities, as always, is our disciplined approach to capital allocation. Every decision we make is guided by our objective of delivering 15% or greater returns on invested capital. Lastly, turning to the combination of BN and BWS. Combining BN and BWS marks the next evolution of Brookfield.

Five years ago, Brookfield Wealth Solutions was established with a clear objective to build a world-class insurance business that protects policyholders, delivers attractive risk-adjusted returns, and leverages Brookfield's differentiated real asset investing capabilities. That strategy has worked extremely well for us. In just a few years, the business has grown to nearly $200 billion of assets. However, as the business has scaled, it is now clear that to keep growing and to maximize our returns while maintaining a low risk profile, a full combination is optimal. First, it positions Brookfield as a globally diversified, fully integrated insurance and investment organization under a single public company. This simplifies our corporate structure and allows shareholders to directly own the full value of BN and BWS. Second, the combination gives our insurance operations direct access to the Corporation's permanent capital base, an incremental $145 billion.

This creates a more efficient capital structure, enhances flexibility, and provides significant capacity to support long-term growth, something very few insurance organizations globally have access to. Third, the new structure creates a path towards broader global index inclusion that is unavailable today. Over time, inclusion in broader indices would broaden our investor base, improve trading liquidity, and facilitate greater ownership of our shares from passive investment vehicles. Importantly, it is expected to be tax efficient for most shareholders. Taken together, this creates a simpler, more efficient, and flexible structure that positions Brookfield to continue compounding value for shareholders over the long term. We look forward to providing you with a more detailed update at Brookfield's upcoming Investor Day on September 17th, 2026. That concludes our presentation. Thank you all for your time, and I will now turn the call over to Lyndsay for the question period.

Thank you, Seamus. We received one question, which is, with the combination with BN approved, how does this change the friction of moving capital between the holdco and the insurance float? Specifically, what does the post-transaction capital structure look like in terms of tax optimization and structural flow of float to BAM managed private credit and infrastructure funds? As Tom mentioned earlier, the combination gives our insurance operations direct access to the corporation's permanent capital base, an incremental $145 billion of float. We expect that this will enhance the movement of capital between our entities over time, facilitating the overall growth of our business. We do not anticipate any change to the float managed by BAM or any change to the allocation of investments to Brookfield Asset Management or any of its associated funds in connection with this transaction.

We also do not anticipate any change in the tax treatment of any of our underlying businesses as a result or in connection with this transaction. There are no further questions, I will now call the meeting to a close.