Brookfield sells Utmost
Hot on the heels of the acquisition of Just Group, Canada’s Brookfield had another 2025 surprise for the BPA market in the form of the sale of Utmost Life & Pensions to German investor, JAB Holdings.
It was always unclear how Utmost as a BPA new entrant was going to operate alongside Blumont Annuity, another BPA new entrant launched by Brookfield earlier this year. With Blumont likely to be merged with Just Group once the acquisition completes next year, and Brookfield effectively having full ownership of Utmost from October, perhaps the betting money might have been on Utmost merging into Just also.
Apparently not though, and it seems instead the clear intention is for Utmost Life & Pensions to leave the wider Brookfield group, subject to regulatory approval. While much of the details around Utmost’s future are yet to unfold, we consider what this might mean for trustees and employers expecting to transact with Utmost.
Utmost – the story so far
Utmost group’s immediate owner is Oaktree Capital, a US based asset manager and investor. Oaktree had been majority owned by Brookfield Capital since 2019 but in October this year, Brookfield acquired the remainder of Oaktree.
The whole Utmost group (of which Life & Pensions is a part) has some £109bn under administration, primarily via wealth management products and services. With around £5.4bn of assets at the start of this year, Utmost Life & Pensions is a relatively small part of the wider Utmost group. Utmost group has said that the sale of Life & Pensions will allow it to focus on its core wealth solutions business and given the pensions business is a small part of the whole it will not leave much of a dent on the group’s balance sheet.
Utmost Life & Pensions itself is a business of two (unequal) halves, having until recently been primarily a UK closed-book consolidator (it took on the remainder of the policies of Equitable Life in 2020), but then entered the BPA market in late 2024. Its BPA business is a modest 20% of its total assets so there is plenty of scope for growth, the capital for which has to date been provided primarily from profits from its other operations. Brookfield could have provided significant additional capital to grow the business, although its focus appears to be on growing Blumont and its impending merger with Just.
Who are JAB Holdings?
JAB are a German family-owned investor, with a head office in Luxembourg. They hold businesses with a total value of around $70bn, split $40bn held in consumer goods companies, including familiar names such as Pret and Krispy Kreme, and $30bn in a life insurance business.
JAB only recently entered the insurance market in September this year with the acquisition of US-based life insurer, Prosperity Life.
JAB management have indicated that they intend to make Utmost Life & Pensions a “significant solution for long term financial security” suggesting they may invest in Utmost to accelerate its growth. While clearly JAB does not have pockets as deep as the Brookfield group, it is a substantial investor and has the ability to invest in Utmost’s growth.
Brookfield have made their interest in the UK BPA market very clear through starting Blumont and the acquisition of major player, Just. It will be interesting to see how JAB sets out its BPA ambitions in the coming months.
What does this mean for schemes looking to buy out?
With Blumont set to be merged into Just, provider choice will contract leaving only Utmost and Royal London as the effective new entrants in the market.
The good news is that the short term implications may be quite modest and for now at least the market will continue benefit from the presence of Utmost as a new entrant. Utmost has certainly provided some additional capacity and BPA access for a number of smaller schemes – while it builds its book, even with a new owner, we would expect this to continue. Utmost will also be JAB’s only UK BPA business so there would not appear to be a merger on the cards in the immediate term.
In terms of financial strength, one of the positives of its relatively small scale as a new entrant meant its investment strategy and risk management approach were relatively ‘vanilla’. However as it gains scale we would expect to see it make use of all the flexibilities permitted under the Solvency UK regime such as internal models, more exotic assets and maximising matching adjustment allowances. This evolution may have been quite gradual under its current ownership but if JAB’s plan is to grow the business then this transition might happen more quickly.
Overall, in the short term additional comfort might be taken from the fact that a new acquirer is perhaps unlikely to make major changes that would undermine an insurer’s credit profile or competitiveness. Nonetheless, it will be critical for trustees and employers considering insuring with Utmost to fully understand the implications of the new ownership.
For further information, contact:
Richard Hall
rhall@argyllcovenant.com
+44 (0)118 334 5801
+44 (0)7718 543168
