American National Group Inc

Current report

Item 1A. Risk Factors

Current report

We describe certain factors that may affect our business or operations under "Risk Factors" in Part II, Item 1A, of our Quarterly Report on Form 10-Q for the period ended June 30, 2024.

Previous report

The following summarizes some, but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 1A “Risk Factors” in this Form 10-Q for a more thorough description of these and other risks.

Previous report

If any of the following risks were actually to occur, our business, financial condition and results of operations would likely suffer:

Previous report

•We make assumptions and estimates when underwriting insurance risks, and significant deviations from such assumptions and estimates could adversely affect our business, financial condition, results of operations, liquidity and cash flows.

Previous report

•If we are unable to attract and retain independent marketing organization (“IMOs”), agents, banks and broker-dealers, sales of our insurance products may be adversely affected.

Previous report

•A rating downgrade or the absence of a rating of us or any of our subsidiaries could adversely affect our existing business and our ability to compete for further business.

Previous report

•If market conditions cause reinsurance to be more costly or unavailable, we may be required to bear increased risks or reduce the level of our underwriting commitments.

Previous report

•If the counterparties to our reinsurance arrangements or to the derivatives we use to hedge our business risks default or fail to perform, we may be exposed to risks we had sought to mitigate, which could materially and adversely affect our financial condition and results of operations.

Previous report

•The insurance industry is highly competitive; competitive pressures may result in lower volumes of policies written, fewer insurance contracts underwritten, lower premium rates, increased expense for customer acquisition and retention and less favorable policy terms and conditions.

Previous report

•We rely on the use of technology, and as a result, we are exposed to the risk of cybersecurity attacks.

Previous report

•Compliance with laws and regulations governing the processing of personal data and information may impede our services or results in increased costs. The failure to comply with such data privacy laws and regulations could result in material fines or penalties imposed by data protection or financial services conduct regulators and/or awards of civil damages and any data breach may have a material adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

Previous report

•Compliance with existing and emerging rules and regulations governing the use of artificial intelligence (“AI”) and generative AI could result in increased compliance costs and/or lead to changes in business practices and policies, and challenges with properly managing the use of AI could result in reputational harm, competitive harm and legal liability.

Previous report

•We may be unable to attract and retain key executives and skilled employees, and because our employees are located throughout the United States, we may incur additional compliance and litigation costs that could adversely impact us.

Previous report

•We may be unable to protect our intellectual property and may face infringement claims.

Previous report

•We have incurred indebtedness and intend to incur additional indebtedness which may result in us not being able to generate sufficient cash flows from operations and our investments to service our indebtedness.

Previous report

•Our debt and any future debt we incur may subject us or our subsidiaries to certain covenants that restrict our ability to engage in certain types of activities and may require us to utilize significant cash flow to service our debt.

Previous report

•We may require additional capital in the future, including to fund future growth, which may not be available or may only be available on unfavorable terms, including as a result of increasing barriers to free trade and the free flow of capital and fluctuations in the financial markets.

Previous report

•We are at risk of becoming involved in disputes and possible litigation.

Previous report

•We may be subject to negative publicity in the insurance industry.

Previous report

•We are a holding company with no operations and limited assets of our own and as a result, our ability to service our debt obligations or to pay dividends is limited or otherwise restricted, and dependent on the ability of our subsidiaries to distribute cash to us.

Previous report

•We may fail to authorize and pay dividends on our preferred stock.

Previous report

•Our failure to maintain effective internal controls could have a material adverse effect on our business in the future.

Previous report

•Changes in interest rates and credit spreads, which are out of our control, can materially and adversely affect our financial condition and results of operations.

Previous report

•We may incur significant losses resulting from catastrophic events, including natural disasters, public health crises, illness, epidemics or pandemics and their related effects.

Previous report

•All of our subsidiaries are subject to changes in government policy and legislation.

Previous report

•We are exposed to counterparty credit risk which, in turn, increases our exposure to liabilities.

Previous report

•Our valuation of securities and investments, as well as the determination of the amount of allowances and impairments taken on our investments are subjective and, if changed, could materially and adversely affect our results of operations or financial condition.

Previous report

•Our investment portfolio may be subject to concentration risk, which could threaten our financial condition.

Previous report

•A number of our company’s assets are illiquid, and our company may be required to dispose of such assets if there is significant amount of unanticipated policyholder withdrawal, lapse, or claim activity or to meet other obligations.

Previous report

•Our investments are subject to credit risk, market risk, servicing risk, loss from catastrophic events and other risks, which could diminish the value that we obtain from such investments.

Previous report

•Our investment portfolio may include investments in securities of issuers based outside the U.S., including emerging markets, which may be riskier than securities of U.S. issuers.

Previous report

•Our insurance business is highly regulated, and such regulation and any supervisory and enforcement policies, or changes thereto, may materially impact our capitalization or cash flows, reduce our profitability and limit our growth.

Previous report

•Our failure to obtain or maintain licenses and/or other regulatory approvals as required for the operations of our subsidiaries may have a material adverse effect on our business, financial condition, results of operations, liquidity, cash flows and process.

Previous report

•Any future regulatory changes, including political, regulatory and industry initiatives by state and international authorities, could result in the imposition of significant restrictions on our ability to do business.

Previous report

•A decrease in applicable capital ratios/calculations of our subsidiaries could result in increased scrutiny by insurance regulators and rating agencies and have a material adverse effect on our results of operations and financial condition.

Previous report

•Potential government intervention in the insurance industry and instability in the marketplace for insurance products could hinder our flexibility and negatively affect the business opportunities that may be available to us in the market.

Previous report

•The insurance regulatory framework and legislation enacted in Bermuda as to economic substance may affect our operations.

Previous report

•Regulatory regimes and changes to accounting rules may adversely impact our financial results irrespective of business operations.

Previous report

•The Company’s predecessor recently completed its Merger with Brookfield Reinsurance and its Post-Effective Merger with American National. As a result, the Company could experience challenges or unanticipated costs in integrating its operations with those of American National which could adversely affect our results of operations and financial condition.

Previous report

•We only list preferred shares on the New York Stock Exchange (the “NYSE”) and, as a result, qualify for and intend to rely on exemptions from certain corporate governance requirements. Holders of our preferred shares will not have the same protections afforded to shareholders of companies that are subject to such requirements.

Previous report

•The interests of the sole holder of our common shares may differ from the interests of holders of our preferred shares and our outstanding indebtedness.