Reinsurance Group of America Reports Second Quarter Results

Second Quarter Results

  • Net income available to RGA shareholders of $3.03 per diluted share
  • Adjusted operating income* of $5.48 per diluted share
  • Premium growth of 17.5% over the prior-year quarter, 18.5% on a constant currency basis1
  • ROE of 9.7%, adjusted operating ROE* of 15.3% for the trailing twelve months
  • Increased quarterly dividend 4.7% to $0.89 per share
  • Deployed capital of $307 million into in-force transactions

1 Actual amounts reflect impact of currency fluctuations. Constant currency amounts reflect foreign denominated activity translated to U.S. dollars at a constant exchange rate.

Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life and health reinsurance, reported second quarter net income available to RGA shareholders of $203 million, or $3.03 per diluted share, compared with $205 million, or $3.05 per diluted share, in the prior-year quarter. Adjusted operating income* for the second quarter totaled $365 million, or $5.48 per diluted share, compared with $297 million, or $4.40 per diluted share, the year before. Net foreign currency fluctuations had a favorable effect of $0.06 per diluted share on net income available to RGA shareholders, and an adverse effect of $0.06 per diluted share on adjusted operating income as compared with the prior year.

 

Quarterly Results

 

Year-to-Date Results

($ in millions, except per share data)

 

2024

 

 

2023

 

 

2024

 

 

2023

Net premiums

$

3,920

 

$

3,337

 

$

9,296

 

$

6,722

Net income available to RGA shareholders

 

203

 

 

205

 

 

413

 

 

457

Net income available to RGA shareholders per diluted share

 

3.03

 

 

3.05

 

 

6.19

 

 

6.77

Adjusted operating income*

 

365

 

 

297

 

 

766

 

 

646

Adjusted operating income, excluding notable items*

 

365

 

 

297

 

 

766

 

 

646

Adjusted operating income per diluted share*

 

5.48

 

 

4.40

 

 

11.49

 

 

9.55

Adjusted operating income, excluding notable items per diluted share*

 

5.48

 

 

4.40

 

 

11.49

 

 

9.55

Book value per share

 

147.90

 

 

117.87

 

 

 

 

Book value per share, excluding accumulated other comprehensive income (AOCI)*

 

148.19

 

 

138.99

 

 

 

 

Book value per share, excluding AOCI and B36*

 

149.01

 

 

138.88

 

 

 

 

Total assets

 

109,888

 

 

89,040

 

 

 

 

*

See “Non-GAAP Financial Measures and Other Definitions” below

In the second quarter, consolidated net premiums totaled $3.9 billion, an increase of 17.5% over the 2023 second quarter, with an adverse net foreign currency effect of $33 million. Excluding the net foreign currency effect, consolidated net premiums increased 18.5% in the quarter. Net premiums for the quarter included a $282 million contribution from a single premium pension risk transfer transaction in the U.S. Financial Solutions business.

Compared with the year-ago period, excluding spread-based businesses, second quarter investment income increased 10.9%, primarily due to the addition of large asset-intensive in-force transactions in recent periods. Average investment yield increased to 4.65% in the second quarter compared with 4.42% in the prior-year period due to higher new money rates.

The effective tax rate for the quarter was 24.3% on pre-tax income, slightly above the expected range of 23% to 24%, primarily related to income earned in non-U.S. jurisdictions.

The effective tax rate for the quarter was 25.5% on pre-tax adjusted operating income, above the expected range of 23% to 24%, primarily related to income earned in non-U.S. jurisdictions.

Tony Cheng, President and Chief Executive Officer, commented, “Our second quarter was good overall, and we continue to have strong momentum, on the back of a particularly strong first quarter. Our Asia Traditional and Financial Solutions businesses had a very good quarter, and our U.S. Traditional and EMEA Financial Solutions areas also performed well. We had a solid quarter of in-force transactions, with $307 million of capital deployed. Additionally, we continued to see good momentum in organic new business activity.

“Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $1.0 billion. Based on favorable business conditions and RGA’s global leadership position, we are optimistic about the future and expect to continue to deliver attractive financial results over time.”

SEGMENT RESULTS

U.S. and Latin America

Traditional

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Net premiums

$

1,827

 

$

1,750

 

$

3,542

 

$

3,365

Pre-tax income

 

174

 

 

62

 

 

290

 

 

183

Pre-tax adjusted operating income

 

167

 

 

63

 

 

295

 

 

185

Pre-tax adjusted operating income, excluding notable items

 

167

 

 

63

 

 

295

 

 

185

Quarterly Results

  • Results reflected favorable in-force management actions, partially offset by client reporting adjustments; overall claims experience was in line with expectations.

Financial Solutions

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Pre-tax income

$

83

 

$

68

 

$

100

 

$

182

Pre-tax adjusted operating income

 

80

 

 

109

 

 

170

 

 

214

Pre-tax adjusted operating income, excluding notable items

 

80

 

 

109

 

 

170

 

 

214

Quarterly Results

  • Results were below the expected range due to the timing of recent new business not yet at full earnings run rate, as well as one-time items.

Canada

Traditional

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Net premiums

$

326

 

$

307

 

$

644

 

$

602

Pre-tax income

 

27

 

 

35

 

 

74

 

 

64

Pre-tax adjusted operating income

 

26

 

 

32

 

 

72

 

 

61

Pre-tax adjusted operating income, excluding notable items

 

26

 

 

32

 

 

72

 

 

61

Net Premiums

  • Foreign currency exchange rates had an adverse effect on net premiums of $6 million for the quarter.

Quarterly Results

  • Results reflected modestly unfavorable mortality experience.
  • Foreign currency exchange rates had an immaterial effect on pre-tax income and pre-tax adjusted operating income.

Financial Solutions

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Pre-tax income

$

6

 

$

6

 

$

13

 

$

16

Pre-tax adjusted operating income

 

7

 

 

6

 

 

14

 

 

16

Pre-tax adjusted operating income, excluding notable items

 

7

 

 

6

 

 

14

 

 

16

Quarterly Results

  • Results were in line with expectations.
  • Foreign currency exchange rates had an immaterial effect on pre-tax income and pre-tax adjusted operating income.

Europe, Middle East and Africa (EMEA)

Traditional

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

 

2023

 

 

2024

 

 

2023

Net premiums

$

497

 

 

$

429

 

$

993

 

$

867

Pre-tax income

 

1

 

 

 

4

 

 

29

 

 

31

Pre-tax adjusted operating income (loss)

 

(1

)

 

 

4

 

 

37

 

 

31

Pre-tax adjusted operating income (loss), excluding notable items

 

(1

)

 

 

4

 

 

37

 

 

31

Net Premiums

  • Foreign currency exchange rates had a favorable effect on net premiums of $1 million for the quarter.

Quarterly Results

  • Results reflected unfavorable experience, primarily in the United Kingdom.
  • Foreign currency exchange rates had an immaterial effect on pre-tax income and pre-tax adjusted operating income.

Financial Solutions

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Pre-tax income

$

72

 

$

52

 

$

136

 

$

111

Pre-tax adjusted operating income

 

86

 

 

66

 

 

163

 

 

135

Pre-tax adjusted operating income, excluding notable items

 

86

 

 

66

 

 

163

 

 

135

Quarterly Results

  • Results reflected the impact of strong new business in recent periods and favorable longevity experience.
  • Foreign currency exchange rates had an immaterial effect on pre-tax income and pre-tax adjusted operating income.

Asia Pacific

Traditional

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Net premiums

$

708

 

$

677

 

$

1,424

 

$

1,339

Pre-tax income

 

100

 

 

89

 

 

209

 

 

168

Pre-tax adjusted operating income

 

99

 

 

89

 

 

208

 

 

168

Pre-tax adjusted operating income, excluding notable items

 

99

 

 

89

 

 

208

 

 

168

Net Premiums

  • Foreign currency exchange rates had an adverse effect on net premiums of $23 million for the quarter.

Quarterly Results

  • Results reflected the benefit of in-force management actions and the impact of recent new business in Asia.
  • Foreign currency exchange rates had an adverse effect of $2 million on pre-tax income and pre-tax adjusted operating income.

Financial Solutions

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

Net premiums

$

50

 

 

$

44

 

$

96

 

 

$

108

Pre-tax income (loss)

 

(58

)

 

 

20

 

 

(45

)

 

 

7

Pre-tax adjusted operating income

 

71

 

 

 

62

 

 

130

 

 

 

102

Pre-tax adjusted operating income, excluding notable items

 

71

 

 

 

62

 

 

130

 

 

 

102

Quarterly Results

  • Pre-tax loss reflected a foreign currency exchange rate derivative loss, driven by weakness in Japanese yen.
  • Pre-tax adjusted operating income reflected favorable overall experience.
  • Foreign currency exchange rates had a favorable effect of $8 million on pre-tax income and an adverse effect of $2 million on pre-tax adjusted operating income.

Corporate and Other

 

Quarterly Results

 

Year-to-Date Results

($ in millions)

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Pre-tax income (loss)

$

(136

)

 

$

(71

)

 

$

(265

)

 

$

(146

)

Pre-tax adjusted operating income (loss)

 

(44

)

 

 

(55

)

 

 

(82

)

 

 

(80

)

Pre-tax adjusted operating income (loss), excluding notable items

 

(44

)

 

 

(55

)

 

 

(82

)

 

 

(80

)

Quarterly Results

  • Results were slightly unfavorable compared to the expected quarterly average run rate; year to date results are in line with the average run rate.

Dividend Declaration

Effective July 30, 2024, the board of directors declared a regular quarterly dividend of $0.89, payable August 27, 2024, to shareholders of record as of August 13, 2024.

Earnings Conference Call

A conference call to discuss second quarter results will begin at 10 a.m. Eastern Time on Friday, August 2, 2024. Interested parties may access the call by dialing 1-844-481-2753 (1-412-317-0669 international) and asking to be joined into the Reinsurance Group of America, Incorporated (RGA) call. A live audio webcast of the conference call will be available on the Company’s Investor Relations website at www.rgare.com. A replay of the conference call will be available at the same address for 90 days following the conference call.

The Company has posted to its website an earnings presentation and a Quarterly Financial Supplement that includes financial information for all segments as well as information on its investment portfolio. Additionally, the Company posts periodic reports, press releases and other useful information on its Investor Relations website.

Non-GAAP Financial Measures and Other Definitions

Reinsurance Group of America, Incorporated (the “Company”) discloses certain financial measures that are not determined in accordance with U.S. GAAP. The Company principally uses such non-GAAP financial measures in evaluating performance because the Company believes that such measures, when reviewed in conjunction with relevant U.S. GAAP measures, present a clearer picture of our operating performance and assist the Company in the allocation of its resources. The Company believes that these non-GAAP financial measures provide investors and other third parties with a better understanding of the Company’s results of operations, financial statements and the underlying profitability drivers and trends of the Company’s businesses by excluding specified items which may not be indicative of the Company’s ongoing operating performance and may fluctuate significantly from period to period. These measures should be considered supplementary to the Company’s financial results that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for U.S. GAAP measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way the Company calculates such measures. Consequently, the Company’s non-GAAP financial measures may not be comparable to similar measures used by other companies.

The following non-GAAP financial measures are used in this document or in other public disclosures made by the Company from time to time:

1.

Adjusted operating income, on a pre-tax and after-tax basis, and adjusted operating income per diluted share. The Company uses these measures as a basis for analyzing financial results because the Company believes that such measures better reflect the ongoing profitability and underlying trends of the Company’s continuing operations. Adjusted operating income is calculated as net income available to the Company’s shareholders (or, in the case of pre-tax adjusted operating income, income before income taxes) excluding, as applicable:

 

  • substantially all of the effect of net investment related gains and losses;
  • changes in the fair value of certain embedded derivatives;
  • changes in the fair value of contracts that provide market risk benefits;
  • non-economic losses at contract inception for direct pension risk transfer single premium business (which are amortized into adjusted operating income within claims and other policy benefits over the estimated lives of the contracts);
  • any net gain or loss from discontinued operations;
  • the cumulative effect of any accounting changes;
  • the impact of certain tax-related items; and
  • any other items that the Company believes are not indicative of the Company’s ongoing operations

as such items can be volatile and may not reflect the underlying performance of the Company’s business. In addition, adjusted operating income per diluted share is calculated as adjusted operating income divided by weighted average diluted shares outstanding. These measures also serve as a basis for establishing target levels and awards under the Company’s management incentive programs.

2.

Adjusted operating income (on a pre-tax and after-tax basis), excluding notable items.

Notable items are items the Company believes may not be indicative of its ongoing operating performance which are excluded from adjusted operating income to provide investors and other third parties with a better understanding of the Company’s results. Such items may be unexpected, unknown when the Company prepares its business plan or otherwise. Notable items presented may include the financial impact of the Company’s assumption reviews on business subject to the Financial Accounting Standards Board’s Accounting Standards Update No. 2018-12, “Targeted Improvements to the Accounting for Long-Duration Contracts” and related amendments, reflected in future policy benefits remeasurement gains or losses.

3.

Adjusted operating revenue. This measure excludes the effects of net realized capital gains and losses, and changes in the fair value of certain embedded derivatives.

4.

Shareholders’ equity position excluding the impact of accumulated other comprehensive income (loss) (“AOCI”), shareholders’ average equity position excluding AOCI, and book value per share excluding the impact of AOCI. The Company believes that these measures provide useful information since such measures exclude AOCI-related items that are not permanent and can fluctuate significantly from period to period, and may not reflect the impact of the underlying performance of the Company’s businesses on shareholders’ equity and book value per share. AOCI primarily relates to changes in interest rates, credit spreads on its investment securities, future policy benefits discount rate measurement gains (losses), market risk benefits instrument-specific credit risk remeasurement gains (losses) and foreign currency fluctuations. The Company also discloses the following non-GAAP financial measures:

  • Shareholders’ average equity position excluding AOCI and B36, where B36 refers to the cumulative change in fair value of funds withheld embedded derivatives;
  • Shareholders’ average equity position excluding AOCI and notable items; and
  • Shareholders’ average equity position excluding AOCI, B36 and notable items.

5.

Adjusted operating return on equity. This measure is calculated as adjusted operating income divided by average shareholders’ equity excluding AOCI. Adjusted operating return on equity also serves as a basis for establishing target levels and awards under the Company’s management incentive programs. The Company also discloses the following non-GAAP financial measures:

  • Adjusted operating return on equity excluding AOCI and B36;
  • Adjusted operating return on equity excluding AOCI and notable items, which is calculated as adjusted operating income excluding notable items divided by average shareholders’ equity excluding notable items and AOCI; and
  • Adjusted operating return on equity excluding AOCI, B36 and notable items.

Reconciliations of the foregoing non-GAAP financial measures (to the extent disclosed in this document) to the most comparable GAAP financial measures are provided in the Appendix at the end of this document.

 

Other definitions:

  • Uncapped (profitable) cohorts: cohorts with a net premium ratio under 100%.
  • Capped (loss) cohorts: cohorts with a net premium ratio equal to or greater than 100%.
  • Floored cohorts: cohorts with reserves floored at zero as reserves cannot be negative.

About RGA

Reinsurance Group of America, Incorporated (NYSE: RGA) is a global industry leader specializing in life and health reinsurance and financial solutions that help clients effectively manage risk and optimize capital. Founded in 1973, RGA is today one of the world’s largest and most respected reinsurers and remains guided by a powerful purpose: to make financial protection accessible to all. As a global capabilities and solutions leader, RGA empowers partners through bold innovation, relentless execution, and dedicated client focus – all directed toward creating sustainable long-term value. RGA has approximately $3.8 trillion of life reinsurance in force and assets of $109.9 billion as of June 30, 2024. To learn more about RGA and its businesses, please visit www.rgare.com or follow RGA on LinkedIn and Facebook. Investors can learn more at investor.rgare.com.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and federal securities laws including, among others, statements relating to projections of the future operations, strategies, earnings, revenues, income or loss, ratios, financial performance and growth potential of Reinsurance Group of America, Incorporated (the “Company”). Forward-looking statements often contain words and phrases such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,” “plan,” “potential,” “pro forma,” “project,” “should,” “will,” “would,” and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all derivative forms. Forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements are not a guarantee of future performance and are subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance, and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

Factors that could also cause results or events to differ, possibly materially, from those expressed or implied by forward-looking statements, include, among others: (1) adverse changes in mortality, morbidity, lapsation, or claims experience, (2) inadequate risk analysis and underwriting, (3) adverse capital and credit market conditions and their impact on the Company’s liquidity, access to capital, and cost of capital, (4) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (5) the availability and cost of collateral necessary for regulatory reserves and capital, (6) requirements to post collateral or make payments due to declines in the market value of assets subject to the Company’s collateral arrangements, (7) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (8) the effect of the Company parent’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, (9) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, (10) the impairment of other financial institutions and its effect on the Company’s business, (11) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (12) market or economic conditions that adversely affect the value of the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities that in turn could affect regulatory capital, (13) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (14) risks inherent in the Company’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (15) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (16) the stability of and actions by governments and economies in the markets in which the Company operates, including ongoing uncertainties regarding the amount of U.S. sovereign debt and the credit ratings thereof, (17) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes some reinsurance, third-party investment managers, and others, (18) financial performance of the Company’s clients, (19) the threat of natural disasters, catastrophes, terrorist attacks, pandemics, epidemics, or other major public health issues anywhere in the world where the Company or its clients do business, (20) competitive factors and competitors’ responses to the Company’s initiatives, (21) development and introduction of new products and distribution opportunities, (22) execution of the Company’s entry into new markets, (23) integration of acquired blocks of business and entities, (24) interruption or failure of the Company’s telecommunication, information technology, or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data and intellectual property stored on such systems, (25) adverse developments with respect to litigation, arbitration, or regulatory investigations or actions, (26) the adequacy of reserves, resources, and accurate information relating to settlements, awards and terminated and discontinued lines of business, (27) changes in laws, regulations, and accounting standards applicable to the Company or its business, including Long-Duration Targeted Improvement accounting changes and (28) other risks and uncertainties described in this document and in the Company’s other filings with the Securities and Exchange Commission (“SEC”).

Forward-looking statements should be evaluated together with the many risks and uncertainties that affect the Company’s business, including those mentioned in this document and described in the periodic reports the Company files with the SEC. These forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update these forward-looking statements, even though the Company’s situation may change in the future, except as required under applicable securities law. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to see Item 1A – “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as may be supplemented by Item 1A - “Risk Factors” in the Company’s subsequent Quarterly Reports on Form 10-Q and in our other periodic and current reports filed with the SEC.

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Net Income to Adjusted Operating Income

(Dollars in millions, except per share data)

 

(Unaudited)

Three Months Ended June 30,

 

2024

 

2023

 

 

 

Diluted

Earnings Per

Share

 

 

 

Diluted

Earnings Per

Share

Net income available to RGA shareholders

$

203

 

 

$

3.03

 

 

$

205

 

 

$

3.05

 

Reconciliation to adjusted operating income:

 

 

 

 

 

 

 

Realized (gains) losses, derivatives and other, included in investment related gains (losses), net

 

239

 

 

 

3.60

 

 

 

88

 

 

 

1.30

 

Market risk benefits remeasurement (gains) losses

 

(6

)

 

 

(0.09

)

 

 

(24

)

 

 

(0.36

)

Realized (gains) losses on funds withheld, included in investment income, net of related expenses

 

 

 

 

 

 

 

2

 

 

 

0.03

 

Embedded derivatives:

 

 

 

 

 

 

 

Included in investment related gains/losses, net

 

(20

)

 

 

(0.30

)

 

 

16

 

 

 

0.24

 

Included in interest credited

 

(4

)

 

 

(0.06

)

 

 

3

 

 

 

0.04

 

Investment (income) loss on unit-linked variable annuities

 

1

 

 

 

0.01

 

 

 

2

 

 

 

0.03

 

Interest credited on unit-linked variable annuities

 

(1

)

 

 

(0.01

)

 

 

(2

)

 

 

(0.03

)

Interest expense on uncertain tax positions

 

(1

)

 

 

(0.01

)

 

 

 

 

 

 

Other (1)

 

(35

)

 

 

(0.52

)

 

 

 

 

 

 

Uncertain tax positions and other tax related items

 

(12

)

 

 

(0.18

)

 

 

5

 

 

 

0.07

 

Net income attributable to noncontrolling interest

 

1

 

 

 

0.01

 

 

 

2

 

 

 

0.03

 

Adjusted operating income

 

365

 

 

 

5.48

 

 

 

297

 

 

 

4.40

 

Notable items

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income, excluding notable items

$

365

 

 

$

5.48

 

 

$

297

 

 

$

4.40

 

(Unaudited)

Six Months Ended June 30,

 

2024

 

2023

 

 

 

Diluted

Earnings Per

Share

 

 

 

Diluted

Earnings Per

Share

Net income available to RGA shareholders

$

413

 

 

$

6.19

 

 

$

457

 

 

$

6.77

 

Reconciliation to adjusted operating income:

 

 

 

 

 

 

 

Realized (gains) losses, derivatives and other, included in investment related gains (losses), net

 

424

 

 

 

6.37

 

 

 

190

 

 

 

2.79

 

Market risk benefits remeasurement (gains) losses

 

(34

)

 

 

(0.51

)

 

 

(13

)

 

 

(0.19

)

Realized (gains) losses on funds withheld, included in investment income, net of related expenses

 

(2

)

 

 

(0.03

)

 

 

2

 

 

 

0.03

 

Embedded derivatives:

 

 

 

 

 

 

 

Included in investment related gains/losses, net

 

(81

)

 

 

(1.22

)

 

 

(13

)

 

 

(0.19

)

Included in interest credited

 

6

 

 

 

0.09

 

 

 

(3

)

 

 

(0.04

)

Investment (income) loss on unit-linked variable annuities

 

2

 

 

 

0.03

 

 

 

2

 

 

 

0.03

 

Interest credited on unit-linked variable annuities

 

(2

)

 

 

(0.03

)

 

 

(2

)

 

 

(0.03

)

Interest expense on uncertain tax positions

 

(1

)

 

 

(0.02

)

 

 

 

 

 

 

Other (1)

 

54

 

 

 

0.81

 

 

 

6

 

 

 

0.09

 

Uncertain tax positions and other tax related items

 

(16

)

 

 

(0.24

)

 

 

17

 

 

 

0.25

 

Net income attributable to noncontrolling interest

 

3

 

 

 

0.05

 

 

 

3

 

 

 

0.04

 

Adjusted operating income

 

766

 

 

 

11.49

 

 

 

646

 

 

 

9.55

 

Notable items

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income, excluding notable items

$

766

 

 

$

11.49

 

 

$

646

 

 

$

9.55

 

(1)

The Other line item includes pension risk transfer day one loss, market value adjustments on surrender charges and other immaterial items.

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Effective Income Tax Rates

(Dollars in millions)

 

(Unaudited)

Three Months Ended June 30, 2024

 

Six Months Ended June 30, 2024

 

Pre-tax

Income

(Loss)

 

Income

Taxes

 

Effective

Tax Rate (1)

 

Pre-tax

Income

(Loss)

 

Income

Taxes

 

Effective

Tax Rate (1)

GAAP income

$

269

 

 

$

65

 

 

24.3

%

 

$

541

 

 

$

125

 

 

23.1

%

Reconciliation to adjusted operating income:

 

 

 

 

 

 

 

 

 

 

 

Realized and unrealized (gains) losses, derivatives and other, included in investment related gains (losses), net

 

308

 

 

 

69

 

 

 

 

 

540

 

 

 

116

 

 

 

Market risk benefits remeasurement (gains) losses

 

(8

)

 

 

(2

)

 

 

 

 

(43

)

 

 

(9

)

 

 

Realized (gains) losses on funds withheld, included in investment income, net of related expenses

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

Embedded derivatives:

 

 

 

 

 

 

 

 

 

 

 

Included in investment related gains/losses, net

 

(26

)

 

 

(6

)

 

 

 

 

(103

)

 

 

(22

)

 

 

Included in interest credited

 

(6

)

 

 

(2

)

 

 

 

 

7

 

 

 

1

 

 

 

Investment (income) loss on unit-linked variable annuities

 

1

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

Interest credited on unit-linked variable annuities

 

(1

)

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

Interest expense on uncertain tax positions

 

(1

)

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

Other (2)

 

(45

)

 

 

(10

)

 

 

 

 

68

 

 

 

14

 

 

 

Uncertain tax positions and other tax related items

 

 

 

 

12

 

 

 

 

 

 

 

 

16

 

 

 

Adjusted operating income

 

491

 

 

 

126

 

 

25.5

%

 

 

1,007

 

 

 

241

 

 

23.9

%

Notable items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income, excluding notable items

$

491

 

 

$

126

 

 

 

 

$

1,007

 

 

$

241

 

 

 

(1)

The Company rounds amounts in the financial statements to millions and calculates the effective tax rate from the underlying whole-dollar amounts. Thus certain amounts may not recalculate based on the numbers due to rounding.

(2)

The Other line item includes pension risk transfer day one loss, market value adjustments on surrender charges and other immaterial items.

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Income before Income Taxes to Pre-tax Adjusted Operating Income

(Dollars in millions)

 

(Unaudited)

Three Months Ended June 30,

 

 

2024

 

 

 

2023

 

Income before income taxes

$

269

 

 

$

265

 

Reconciliation to pre-tax adjusted operating income:

 

 

 

Realized (gains) losses, derivatives and other, included in investment related gains (losses), net

 

308

 

 

 

117

 

Market risk benefits remeasurement (gains) losses

 

(8

)

 

 

(31

)

Realized (gains) losses on funds withheld, included in investment income, net of related expenses

 

 

 

 

2

 

Embedded derivatives:

 

 

 

Included in investment related gains/losses, net

 

(26

)

 

 

20

 

Included in interest credited

 

(6

)

 

 

3

 

Investment (income) loss on unit-linked variable annuities

 

1

 

 

 

2

 

Interest credited on unit-linked variable annuities

 

(1

)

 

 

(2

)

Interest expense on uncertain tax positions

 

(1

)

 

 

 

Other (1)

 

(45

)

 

 

 

Pre-tax adjusted operating income

 

491

 

 

 

376

 

Notable items

 

 

 

 

 

Pre-tax adjusted operating income, excluding notable items

$

491

 

 

$

376

 

(Unaudited)

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

Income before income taxes

$

541

 

 

$

616

 

Reconciliation to pre-tax adjusted operating income:

 

 

 

Realized (gains) losses, derivatives and other, included in investment related gains (losses), net

 

540

 

 

 

244

 

Market risk benefits remeasurement (gains) losses

 

(43

)

 

 

(17

)

Realized (gains) losses on funds withheld, included in investment income, net of related expenses

 

(2

)

 

 

2

 

Embedded derivatives:

 

 

 

Included in investment related gains/losses, net

 

(103

)

 

 

(17

)

Included in interest credited

 

7

 

 

 

(4

)

Investment (income) loss on unit-linked variable annuities

 

2

 

 

 

2

 

Interest credited on unit-linked variable annuities

 

(2

)

 

 

(2

)

Interest expense on uncertain tax positions

 

(1

)

 

 

 

Other (1)

 

68

 

 

 

8

 

Pre-tax adjusted operating income

 

1,007

 

 

 

832

 

Notable items

 

 

 

 

 

Pre-tax adjusted operating income, excluding notable items

$

1,007

 

 

$

832

 

(1)

The Other line item includes pension risk transfer day one loss, market value adjustments on surrender charges and other immaterial items.

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Pre-tax Income to Pre-tax Adjusted Operating Income

(Dollars in millions)

 

(Unaudited)

Three Months Ended June 30, 2024

 

Pre-tax

income

(loss)

 

Realized

(gains) losses,

derivatives

and other, net

 

Change in

value of

embedded

derivatives, net

 

Pre-tax

adjusted

operating

income (loss)

 

Notable

Items

 

Pre-tax adjusted

operating

income (loss) ex.

notable items

U.S. and Latin America:

 

 

 

 

 

 

 

 

 

 

 

Traditional

$

174

 

 

$

(1

)

 

$

(6

)

 

$

167

 

 

$

 

$

167

 

Financial Solutions

 

83

 

 

 

23

 

 

 

(26

)

 

 

80

 

 

 

 

 

 

80

 

Total U.S. and Latin America

 

257

 

 

 

22

 

 

 

(32

)

 

 

247

 

 

 

 

 

 

247

 

Canada Traditional

 

27

 

 

 

(1

)

 

 

 

 

 

26

 

 

 

 

 

 

26

 

Canada Financial Solutions

 

6

 

 

 

1

 

 

 

 

 

 

7

 

 

 

 

 

 

7

 

Total Canada

 

33

 

 

 

 

 

 

 

 

 

33

 

 

 

 

 

 

33

 

EMEA Traditional

 

1

 

 

 

(2

)

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

EMEA Financial Solutions

 

72

 

 

 

14

 

 

 

 

 

 

86

 

 

 

 

 

 

86

 

Total EMEA

 

73

 

 

 

12

 

 

 

 

 

 

85

 

 

 

 

 

 

85

 

APAC Traditional

 

100

 

 

 

(1

)

 

 

 

 

 

99

 

 

 

 

 

 

99

 

APAC Financial Solutions

 

(58

)

 

 

129

 

 

 

 

 

 

71

 

 

 

 

 

 

71

 

Total Asia Pacific

 

42

 

 

 

128

 

 

 

 

 

 

170

 

 

 

 

 

 

170

 

Corporate and Other

 

(136

)

 

 

92

 

 

 

 

 

 

(44

)

 

 

 

 

 

(44

)

Consolidated

$

269

 

 

$

254

 

 

$

(32

)

 

$

491

 

 

$

 

 

$

491

 

(Unaudited)

Three Months Ended June 30, 2023

 

Pre-tax

income

(loss)

 

Realized

(gains) losses,

derivatives

and other, net

 

Change in

value of

embedded

derivatives, net

 

Pre-tax adjusted

operating

income (loss)

 

Notable

Items

 

Pre-tax adjusted

operating

income (loss) ex.

notable items

U.S. and Latin America:

 

 

 

 

 

 

 

 

 

 

 

Traditional

$

62

 

 

$

 

 

$

1

 

$

63

 

 

$

 

$

63

 

Financial Solutions

 

68

 

 

 

19

 

 

 

22

 

 

 

109

 

 

 

 

 

 

109

 

Total U.S. and Latin America

 

130

 

 

 

19

 

 

 

23

 

 

 

172

 

 

 

 

 

 

172

 

Canada Traditional

 

35

 

 

 

(3

)

 

 

 

 

 

32

 

 

 

 

 

 

32

 

Canada Financial Solutions

 

6

 

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

6

 

Total Canada

 

41

 

 

 

(3

)

 

 

 

 

 

38

 

 

 

 

 

 

38

 

EMEA Traditional

 

4

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

4

 

EMEA Financial Solutions

 

52

 

 

 

14

 

 

 

 

 

 

66

 

 

 

 

 

 

66

 

Total EMEA

 

56

 

 

 

14

 

 

 

 

 

 

70

 

 

 

 

 

 

70

 

APAC Traditional

 

89

 

 

 

 

 

 

 

 

 

89

 

 

 

 

 

 

89

 

APAC Financial Solutions

 

20

 

 

 

42

 

 

 

 

 

 

62

 

 

 

 

 

 

62

 

Total Asia Pacific

 

109

 

 

 

42

 

 

 

 

 

 

151

 

 

 

 

 

 

151

 

Corporate and Other

 

(71

)

 

 

16

 

 

 

 

 

 

(55

)

 

 

 

 

 

(55

)

Consolidated

$

265

 

 

$

88

 

 

$

23

 

 

$

376

 

 

$

 

 

$

376

 

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Pre-tax Income to Pre-tax Adjusted Operating Income

(Dollars in millions)

 

(Unaudited)

Six Months Ended June 30, 2024

 

Pre-tax

income (loss)

 

Realized

(gains) losses,

derivatives

and other, net

 

Change in

value of

embedded

derivatives, net

 

Pre-tax

adjusted

operating

income (loss)

 

Notable

Items

 

Pre-tax adjusted

operating

income (loss) ex.

notable items

U.S. and Latin America:

 

 

 

 

 

 

 

 

 

 

 

Traditional

$

290

 

 

$

(1

)

 

$

6

 

 

$

295

 

 

$

 

$

295

 

Financial Solutions

 

100

 

 

 

172

 

 

 

(102

)

 

 

170

 

 

 

 

 

 

170

 

Total U.S. and Latin America

 

390

 

 

 

171

 

 

 

(96

)

 

 

465

 

 

 

 

 

 

465

 

Canada Traditional

 

74

 

 

 

(2

)

 

 

 

 

 

72

 

 

 

 

 

 

72

 

Canada Financial Solutions

 

13

 

 

 

1

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Total Canada

 

87

 

 

 

(1

)

 

 

 

 

 

86

 

 

 

 

 

 

86

 

EMEA Traditional

 

29

 

 

 

8

 

 

 

 

 

 

37

 

 

 

 

 

 

37

 

EMEA Financial Solutions

 

136

 

 

 

27

 

 

 

 

 

 

163

 

 

 

 

 

 

163

 

Total EMEA

 

165

 

 

 

35

 

 

 

 

 

 

200

 

 

 

 

 

 

200

 

APAC Traditional

 

209

 

 

 

(1

)

 

 

 

 

 

208

 

 

 

 

 

 

208

 

APAC Financial Solutions

 

(45

)

 

 

175

 

 

 

 

 

 

130

 

 

 

 

 

 

130

 

Total Asia Pacific

 

164

 

 

 

174

 

 

 

 

 

 

338

 

 

 

 

 

 

338

 

Corporate and Other

 

(265

)

 

 

183

 

 

 

 

 

 

(82

)

 

 

 

 

 

(82

)

Consolidated

$

541

 

 

$

562

 

 

$

(96

)

 

$

1,007

 

 

$

 

 

$

1,007

 

(Unaudited)

Six Months Ended June 30, 2023

 

Pre-tax

income (loss)

 

Realized

(gains) losses,

derivatives

and other, net

 

Change in

value of

embedded

derivatives, net

 

Pre-tax adjusted

operating

income (loss)

 

Notable

Items

 

Pre-tax adjusted

operating

income (loss) ex.

notable items

U.S. and Latin America:

 

 

 

 

 

 

 

 

 

 

 

Traditional

$

183

 

 

$

 

 

$

2

 

 

$

185

 

 

$

 

$

185

 

Financial Solutions

 

182

 

 

 

55

 

 

 

(23

)

 

 

214

 

 

 

 

 

 

214

 

Total U.S. and Latin America

 

365

 

 

 

55

 

 

 

(21

)

 

 

399

 

 

 

 

 

 

399

 

Canada Traditional

 

64

 

 

 

(3

)

 

 

 

 

 

61

 

 

 

 

 

 

61

 

Canada Financial Solutions

 

16

 

 

 

 

 

 

 

 

 

16

 

 

 

 

 

 

16

 

Total Canada

 

80

 

 

 

(3

)

 

 

 

 

 

77

 

 

 

 

 

 

77

 

EMEA Traditional

 

31

 

 

 

 

 

 

 

 

 

31

 

 

 

 

 

 

31

 

EMEA Financial Solutions

 

111

 

 

 

24

 

 

 

 

 

 

135

 

 

 

 

 

 

135

 

Total EMEA

 

142

 

 

 

24

 

 

 

 

 

 

166

 

 

 

 

 

 

166

 

APAC Traditional

 

168

 

 

 

 

 

 

 

 

 

168

 

 

 

 

 

 

168

 

APAC Financial Solutions

 

7

 

 

 

95

 

 

 

 

 

 

102

 

 

 

 

 

 

102

 

Total Asia Pacific

 

175

 

 

 

95

 

 

 

 

 

 

270

 

 

 

 

 

 

270

 

Corporate and Other

 

(146

)

 

 

66

 

 

 

 

 

 

(80

)

 

 

 

 

 

(80

)

Consolidated

$

616

 

 

$

237

 

 

$

(21

)

 

$

832

 

 

$

 

 

$

832

 

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Per Share and Shares Data

(In thousands, except per share data)

 

(Unaudited)

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Earnings per share from net income (loss):

 

 

 

 

 

 

 

Basic earnings per share

$

3.07

 

$

3.09

 

$

6.28

 

$

6.86

Diluted earnings per share

$

3.03

 

 

$

3.05

 

 

$

6.19

 

 

$

6.77

 

 

 

 

 

 

 

 

 

Diluted earnings per share from adjusted operating income

$

5.48

 

 

$

4.40

 

 

$

11.49

 

 

$

9.55

 

Weighted average number of common and common equivalent shares outstanding

 

66,732

 

 

 

67,420

 

 

 

66,645

 

 

 

67,563

 

(Unaudited)

At June 30,

 

 

2024

 

 

 

2023

 

Treasury shares

 

19,487

 

 

19,099

Common shares outstanding

 

65,824

 

 

 

66,212

 

Book value per share outstanding

$

147.90

 

 

$

117.87

 

Book value per share outstanding, before impact of AOCI

$

148.19

 

 

$

138.99

 

 

Reconciliation of Book Value Per Share to Book Value Per Share Excluding AOCI and B36 Derivatives

 

(Unaudited)

At June 30,

 

 

2024

 

 

 

2023

 

Book value per share outstanding

$

147.90

 

 

$

117.87

 

Less effect of AOCI:

 

 

 

Accumulated currency translation adjustment

 

1.32

 

 

 

0.38

 

Unrealized (depreciation) appreciation of securities

 

(71.31

)

 

 

(73.69

)

Effect of updating discount rates on future policy benefits

 

70.06

 

 

 

52.26

 

Change in instrument-specific credit risk for market risk benefits

 

0.09

 

 

 

0.20

 

Pension and postretirement benefits

 

(0.45

)

 

 

(0.27

)

Book value per share outstanding, before impact of AOCI

 

148.19

 

 

 

138.99

 

Less effect of B36 derivatives

 

(0.82

)

 

 

0.11

 

Book value per share outstanding, before impact of AOCI and B36 derivatives

$

149.01

 

 

$

138.88

 

 

Reconciliation of Shareholders' Average Equity to Shareholders' Average Equity Excluding AOCI

(Dollars in millions)

 

(Unaudited)

 

Trailing Twelve Months Ended June 30, 2024:

Average Equity

Shareholders' average equity

$

8,830

 

Less effect of AOCI:

 

Accumulated currency translation adjustment

 

41

 

Unrealized (depreciation) appreciation of securities

 

(4,792

)

Effect of updating discount rates on future policy benefits

 

4,120

 

Change in instrument-specific credit risk for market risk benefits

 

6

 

Pension and postretirement benefits

 

(24

)

Shareholders' average equity, excluding AOCI

 

9,479

 

Year-to-date notable items, net of tax

 

 

Shareholders' average equity, excluding AOCI and notable items

$

9,479

 

 

Reconciliation of Trailing Twelve Months of Consolidated Net Income to Adjusted Operating Income

and Related Return on Equity

(Dollars in millions)

 

(Unaudited)

 

 

Return on Equity

Trailing Twelve Months Ended June 30, 2024:

Income

 

Net income available to RGA shareholders

$

858

 

 

9.7

%

Reconciliation to adjusted operating income:

 

 

 

Capital (gains) losses, derivatives and other, net

 

553

 

 

 

Change in fair value of embedded derivatives

 

65

 

 

 

Tax expense on uncertain tax positions and other tax related items

 

(29

)

 

 

Net income attributable to noncontrolling interest

 

7

 

 

 

Adjusted operating income

 

1,454

 

 

15.3

%

Notable items after tax

 

 

 

 

Adjusted operating income, excluding notable items

$

1,454

 

 

15.3

%

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollars in millions)

 

(Unaudited)

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

Net premiums

$

3,920

 

 

$

3,337

 

 

$

9,296

 

 

$

6,722

 

Investment income, net of related expenses

 

1,082

 

 

 

857

 

 

 

2,043

 

 

 

1,713

 

Investment related gains (losses), net

 

(271

)

 

 

(123

)

 

 

(420

)

 

 

(200

)

Other revenue

 

147

 

 

 

85

 

 

 

296

 

 

 

172

 

Total revenues

 

4,878

 

 

 

4,156

 

 

 

11,215

 

 

 

8,407

 

Benefits and expenses:

 

 

 

 

 

 

 

Claims and other policy benefits

 

3,712

 

 

 

3,013

 

 

 

8,844

 

 

 

6,076

 

Future policy benefits remeasurement (gains) losses

 

(90

)

 

 

13

 

 

 

(114

)

 

 

(13

)

Market risk benefits remeasurement (gains) losses

 

(8

)

 

 

(31

)

 

 

(43

)

 

 

(17

)

Interest credited

 

231

 

 

 

209

 

 

 

485

 

 

 

424

 

Policy acquisition costs and other insurance expenses

 

391

 

 

 

349

 

 

 

778

 

 

 

680

 

Other operating expenses

 

301

 

 

 

275

 

 

 

584

 

 

 

525

 

Interest expense

 

72

 

 

 

63

 

 

 

140

 

 

 

116

 

Total benefits and expenses

 

4,609

 

 

 

3,891

 

 

 

10,674

 

 

 

7,791

 

Income before income taxes

 

269

 

 

 

265

 

 

 

541

 

 

 

616

 

Provision for income taxes

 

65

 

 

 

58

 

 

 

125

 

 

 

156

 

Net income

 

204

 

 

 

207

 

 

 

416

 

 

 

460

 

Net income attributable to noncontrolling interest

 

1

 

 

 

2

 

 

 

3

 

 

 

3

 

Net income available to RGA shareholders

$

203

 

 

$

205

 

 

$

413

 

 

$

457

 

 

Contacts

Jeff Hopson

Senior Vice President - Investor Relations

(636) 736-2068

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