The deal is expected to close in Q1 2021. Brookfield completed its initial acquisition of a 57% stake in the Company in
DBRS Morningstar does not expect the transaction to have a ratings impact on Sagen. Current ratings are based on the ability of Sagen to pay policyholders, which DBRS Morningstar does not expect to change a result of the acquisition. Sagen continues to maintain good levels of regulatory capital to protect against a steep increase in claims liabilities. DBRS Morningstar expects the Company's operations to remain largely unchanged, including its underwriting and claims management practices. Other changes, such as in the Company's capital management framework and investment portfolio, may occur in the future but will likely remain within the Company's current risk appetite framework. However, if the Company were to shift and take on more risk without augmenting capital resources, the ratings would likely come under pressure.
In general, DBRS Morningstar views the acquisition by Brookfield positively. In particular, Brookfield is viewed as a more financially stable parent relative to the prior owner,
Sagen's operating insurance company (
Notes:
All figures are in Canadian dollars unless otherwise noted.
For more information on this credit or on this industry, visit www.dbrsmorningstar.com.
Tel. +1 416 593-5577
(C) 2020 Electronic News Publishing, source