Third Quarter Results
- Net income available to RGA shareholders of $2.33 per diluted
share
- Adjusted operating income of $3.62 per diluted share
- Adjusted operating income, excluding notable items of $6.13 per
diluted share, a record quarterly result
- ROE of 7.7%, adjusted operating ROE of 13.8%. Adjusted
operating ROE, excluding notable items of 15.5% for the trailing
twelve months, a record quarterly result
- Deployed capital of $382 million into in-force block
transactions
- Increased Value of In-force Business Margins by $4.6 billion or
13.9% in the first nine months of the year
Reinsurance Group of America, Incorporated (NYSE: RGA), a
leading global provider of life and health reinsurance, reported
third quarter net income available to RGA shareholders of $156
million, or $2.33 per diluted share, compared with $287 million, or
$4.29 per diluted share, in the prior-year quarter. Adjusted
operating income for the third quarter totaled $242 million, or
$3.62 per diluted share, compared with $372 million, or $5.57 per
diluted share, the year before. Adjusted operating income,
excluding notable items for the third quarter totaled $410 million,
or $6.13 per diluted share, compared with $372 million, or $5.57
per diluted share, the year before. Net foreign currency
fluctuations had an adverse effect of $0.03 per diluted share on
net income available to RGA shareholders, and a favorable effect of
$0.02 per diluted share on adjusted operating income as compared
with the prior year.
Tony Cheng, President and Chief Executive Officer, commented,
“The third quarter was an excellent one for us, as we produced
record financial results and demonstrated our continued strong
momentum in virtually all aspects of our business. Our Asia
Traditional and Financial Solutions businesses produced very good
results, and our U.S. Traditional business and EMEA region
performed well. We had a strong quarter of in-force block
transactions, with $382 million of capital deployed, and we
continued to see good momentum in new business. While we are
delighted with the excellent current results, we are also mindful
of long-term value, and were proactive in pulling various levers in
the quarter that we expect will add to returns and enhance value
over the long-term.
“Our balance sheet remains strong, and we ended the quarter with
excess capital of approximately $0.7 billion. Based on favorable
business conditions and RGA’s global leadership position, we are
optimistic about the future and expect to continue to deliver
attractive financial results over time.”
Quarterly Results
Year-to-Date Results
($ in millions, except per share
data)
2024
2023
2024
2023
Net premiums
$
4,391
$
4,255
$
13,687
$
10,977
Net income available to RGA
shareholders
156
287
569
744
Net income available to RGA shareholders
per diluted share
2.33
4.29
8.53
11.06
Adjusted operating income
242
372
1,008
1,018
Adjusted operating income, excluding
notable items
410
372
1,176
1,018
Adjusted operating income per diluted
share
3.62
5.57
15.11
15.14
Adjusted operating income, excluding
notable items per diluted share
6.13
5.57
17.63
15.14
Book value per share
168.93
122.40
Book value per share, excluding
accumulated other comprehensive income (AOCI)
149.63
142.63
Book value per share, excluding AOCI and
B36
151.79
142.51
Total assets
120,258
87,422
Information regarding the non-GAAP financial measures and
operating measures included in this press release, including
definitions of these measures, reconciliations to the most
comparable GAAP measures and limitations related thereto, is
included below under “Non-GAAP Financial Measures and Other
Definitions” and in the tables attached to this press release.
There are two key items reflected as notable items in the third
quarter:
- In individual life markets, RGA retains a maximum coverage per
individual life and retrocedes risk for amounts above this amount.
The current “per life” retention limit has been effective since
2008 and RGA has decided to increase this limit, effective January
1, 2025. Since 2008 RGA has grown significantly and further
diversified its business, thus increasing the ability to absorb
earnings volatility related to claims. Additionally, under the
recently adopted LDTI accounting standard, earnings volatility is
further reduced and spread over the life of the business. As a
result of this increase, RGA expects to recapture business
previously retroceded starting in 2025. The impact of updating our
assumptions to reflect the new retention limit is an unfavorable
$136 million to consolidated pre-tax adjusted operating income in
the third quarter. However, this action has a favorable $1.5
billion impact to the Value of In-force Business Margins that is
expected to be recognized over the remaining life of the business.
RGA expects a favorable impact to 2025 run-rates, with increasing
impacts over time.
- RGA completed its annual actuarial assumption review. The
impact to consolidated pre-tax adjusted operating income is an
unfavorable $58 million, primarily driven by updated lapse rate
assumptions for term business in India, partially offset by
favorable mortality updates in the U.S. and Canada. However, this
has a favorable $0.1 billion impact to the Value of In-force
Business Margins that is expected to be recognized over the
remaining life of the business.
Pre-tax Income Impact ($ in
millions)
Annual Assumption
Review
Retrocession
Recapture
Total
U.S. and Latin America Traditional
$
30
$
(83
)
$
(53
)
U.S. and Latin America Financial
Solutions
—
—
—
Canada Traditional
30
(25
)
5
Canada Financial Solutions
—
—
—
EMEA Traditional
(25
)
(15
)
(40
)
EMEA Financial Solutions
(2
)
—
(2
)
APAC Traditional
(82
)
(13
)
(95
)
APAC Financial Solutions
(9
)
—
(9
)
Total
$
(58
)
$
(136
)
$
(194
)
In the third quarter, consolidated net premiums totaled $4.4
billion, an increase of 3.2% over the 2023 third quarter, with a
favorable net foreign currency effect of $1 million. Net premiums
for the quarter included an approximately $600 million contribution
from a single premium pension risk transfer, compared with
approximately $800 million in the prior year quarter, both of which
are in the U.S. Financial Solutions business.
Compared with the year-ago period, excluding spread-based
businesses, third quarter investment income increased 14.4%,
primarily due to higher new money rates and higher volumes from
transactions. Average investment yield increased to 5.08% in the
third quarter compared with 4.72% in the prior-year period due to
higher new money rates.
The effective tax rate for the quarter was 26.7% on pre-tax
income, above the expected range of 24% to 25%, primarily related
to adjustments due to tax returns filed during the quarter,
partially offset by income earned in non-U.S. jurisdictions.
The effective tax rate for the quarter was 23% on pre-tax
adjusted operating income, below the expected range of 24% to 25%,
primarily related to income earned in non-U.S. jurisdictions.
SEGMENT RESULTS
U.S. and Latin America
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Net premiums
$
1,912
$
1,746
$
5,454
$
5,111
Pre-tax income
57
105
347
288
Pre-tax adjusted operating income
79
103
374
288
Pre-tax adjusted operating income,
excluding notable items
132
120
427
305
Quarterly Results
- Results reflected $30 million of favorable impacts from the
annual actuarial assumption review and $83 million of unfavorable
impacts from the change in policy retention limit, both of which
are reflected as notable items.
- Excluding notable items, results reflected favorable in-force
management actions and favorable Individual Health results.
Individual Life claims experience was in line with
expectations.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Pre-tax income (loss)
$
(46
)
$
108
$
54
$
290
Pre-tax adjusted operating income
80
136
250
350
Pre-tax adjusted operating income,
excluding notable items
80
114
250
328
Quarterly Results
- Results were below the expected range due to lower
contributions from new business.
Canada
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Net premiums
$
314
$
302
$
958
$
904
Pre-tax income
29
6
103
70
Pre-tax adjusted operating income
30
10
102
71
Pre-tax adjusted operating income,
excluding notable items
25
23
97
84
Net Premiums
- Foreign currency exchange rates had an adverse effect on net
premiums of $5 million for the quarter.
Quarterly Results
- Results reflected $30 million of favorable impacts from the
annual actuarial assumption review and $25 million of unfavorable
impacts from the change in policy retention limit, both of which
are reflected as notable items.
- Excluding notable items, results were slightly below
expectations due to modestly unfavorable claims experience.
- Foreign currency exchange rates had an adverse effect of $1
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Pre-tax income
$
21
$
30
$
34
$
46
Pre-tax adjusted operating income
4
30
18
46
Pre-tax adjusted operating income,
excluding notable items
4
8
18
24
Quarterly Results
- Results reflected the negative impact of a modest one-time
item.
- Foreign currency exchange rates had an adverse effect of $1
million on pre-tax income and pre-tax adjusted operating
income.
Europe, Middle East and Africa (EMEA)
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Net premiums
$
521
$
447
$
1,514
$
1,314
Pre-tax income (loss)
(17
)
(60
)
12
(29
)
Pre-tax adjusted operating income
(loss)
(18
)
(59
)
19
(28
)
Pre-tax adjusted operating income (loss),
excluding notable items
22
(12
)
59
19
Net Premiums
- Foreign currency exchange rates had a favorable effect on net
premiums of $12 million for the quarter.
Quarterly Results
- Results reflected $25 million of unfavorable impacts from the
annual actuarial assumption review and $15 million of unfavorable
impacts from the change in policy retention limit, both of which
are reflected as notable items.
- Excluding notable items, results reflected favorable claims
experience, primarily in the United Kingdom and Continental
Europe.
- Foreign currency exchange rates had an adverse effect of $1
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Pre-tax income
$
84
$
84
$
220
$
195
Pre-tax adjusted operating income
86
108
249
243
Pre-tax adjusted operating income,
excluding notable items
88
74
251
209
Quarterly Results
- Results reflected $2 million of unfavorable impacts from
assumption updates, which are reflected as notable items.
- Excluding notable items, results reflected the impact of strong
new business in recent periods.
- Foreign currency exchange rates had a favorable effect of $2
million on pre-tax income and pre-tax adjusted operating
income.
Asia Pacific
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Net premiums
$
756
$
737
$
2,180
$
2,076
Pre-tax income
11
134
220
302
Pre-tax adjusted operating income
11
134
219
302
Pre-tax adjusted operating income,
excluding notable items
106
132
314
300
Net Premiums
- Foreign currency exchange rates had an adverse effect on net
premiums of $4 million for the quarter.
Quarterly Results
- Results reflected $82 million of unfavorable impacts from the
annual actuarial assumption review and $13 million of unfavorable
impacts from the change in policy retention limit, both of which
are reflected as notable items.
- Excluding notable items, results reflected favorable overall
experience.
- Foreign currency exchange rates had a favorable effect of $5
million on pre-tax income and $4 million on pre-tax adjusted
operating income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Net premiums
$
62
$
63
$
158
$
171
Pre-tax income (loss)
93
(16
)
48
(9
)
Pre-tax adjusted operating income
60
44
190
146
Pre-tax adjusted operating income,
excluding notable items
69
44
199
146
Quarterly Results
- Results reflected $9 million of unfavorable impacts from
assumption changes, which are reflected as notable items.
- Excluding notable items, results reflected favorable overall
experience.
- Foreign currency exchange rates had an adverse effect of $5
million on pre-tax income and $2 million on pre-tax adjusted
operating income.
Corporate and Other
Quarterly Results
Year-to-Date Results
($ in millions)
2024
2023
2024
2023
Pre-tax income (loss)
$ (18)
$ (11)
$ (283)
$ (157)
Pre-tax adjusted operating income
(loss)
(18)
(25)
(100)
(105)
Pre-tax adjusted operating income (loss),
excluding notable items
(18)
(25)
(100)
(105)
Quarterly Results
- Results were favorable compared to the expected quarterly
average run rate, primarily due to higher investment income.
Dividend Declaration
Effective October 29, 2024, the board of directors declared a
regular quarterly dividend of $0.89, payable November 26, 2024, to
shareholders of record as of November 12, 2024.
Earnings Conference Call
A conference call to discuss third quarter results will begin at
10 a.m. Eastern Time on Friday, November 1, 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 RGA'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.
RGA 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, RGA 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 include the financial impact of
the Company’s assumption reviews.
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:
Value of In-force Business Margins:
Operating measure reflecting expected underwriting margins,
expected investment margins, and expected fee income; excludes
management expenses, impact of capital, and taxes
- Expected underwriting margin1 is derived from the estimated
cash flows used to determine LDTI reserves, which are reviewed as
part of the annual audit
- Calculated using the locked-in LDTI liability discount
rates
- Expected investment margin:
- LDTI products: values derived from the difference between using
the expected book yields2 and locked-in LDTI liability discount
rates
- Interest-sensitive products: values calculated using expected
investment spread2 and expected duration of treaty
- Expected fee income, primarily from capital solutions products,
is calculated as the present value of expected fees
- Value is based on the Company’s current estimates and
assumptions and could materially change
1 Represents the expected difference, based on current
assumptions, between the present value of premiums and present
value of claim benefits and treaty allowances.
- Present value of premiums is the present value of expected
gross premiums plus Deferred Profit Liability (DPL)
- Present value of claim benefits is the present value of
expected claim payments less Liability for Future Policy Benefits
(LFPB) (before zero floor is applied)
- Present value of treaty allowances is the present value of
future allowances plus related Deferred Acquisition Costs
(DAC)
2 Expected book yields are based on 2024 actual portfolio book
yields adjusted for longer-term VII expectations
- Investment spread is the difference between expected book
yields and interest credited expense
Cohort 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 $4.0 trillion of life
reinsurance in force and assets of $120.3 billion as of September
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
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 September
30,
2024
2023
Diluted Earnings Per Share
Diluted Earnings Per Share
Net income available to RGA
shareholders
$
156
$
2.33
$
287
$
4.29
Reconciliation to adjusted operating
income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
(18
)
(0.26
)
104
1.56
Market risk benefits remeasurement (gains)
losses
25
0.37
(17
)
(0.25
)
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
—
—
(4
)
(0.06
)
Embedded derivatives:
Included in investment related
gains/losses, net
88
1.32
(1
)
(0.01
)
Included in interest credited
8
0.12
(6
)
(0.09
)
Investment (income) loss on unit-linked
variable annuities
(1
)
(0.01
)
1
0.01
Interest credited on unit-linked variable
annuities
1
0.01
(1
)
(0.01
)
Interest expense on uncertain tax
positions
1
0.01
1
0.01
Other (1)
(25
)
(0.37
)
—
—
Uncertain tax positions and other tax
related items
5
0.07
6
0.09
Net income attributable to noncontrolling
interest
2
0.03
2
0.03
Adjusted operating income
242
3.62
372
5.57
Notable items
168
2.51
—
—
Adjusted operating income, excluding
notable items
$
410
$
6.13
$
372
$
5.57
(Unaudited)
Nine Months Ended September
30,
2024
2023
Diluted Earnings Per Share
Diluted Earnings Per Share
Net income available to RGA
shareholders
$
569
$
8.53
$
744
$
11.06
Reconciliation to adjusted operating
income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
406
6.09
294
4.39
Market risk benefits remeasurement (gains)
losses
(9
)
(0.13
)
(30
)
(0.45
)
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
7
0.10
(14
)
(0.21
)
Included in interest credited
14
0.21
(9
)
(0.13
)
Investment (income) loss on unit-linked
variable annuities
1
0.01
3
0.04
Interest credited on unit-linked variable
annuities
(1
)
(0.01
)
(3
)
(0.04
)
Interest expense on uncertain tax
positions
—
—
1
0.01
Other (1)
29
0.43
6
0.09
Uncertain tax positions and other tax
related items
(11
)
(0.16
)
23
0.34
Net income attributable to noncontrolling
interest
5
0.07
5
0.07
Adjusted operating income
1,008
15.11
1,018
15.14
Notable items
168
2.52
—
—
Adjusted operating income, excluding
notable items
$
1,176
$
17.63
$
1,018
$
15.14
(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 September 30,
2024
Nine Months Ended September 30,
2024
Pre-tax Income (Loss)
Income Taxes
Effective Tax Rate (1)
Pre-tax Income (Loss)
Income Taxes
Effective Tax Rate (1)
GAAP income
$
214
$
56
26.7
%
$
755
$
181
24.1
%
Reconciliation to adjusted operating
income:
Realized and unrealized (gains) losses,
derivatives and other, included in investment related gains
(losses), net
(23
)
(5
)
517
111
Market risk benefits remeasurement (gains)
losses
31
6
(12
)
(3
)
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(1
)
(1
)
(3
)
(1
)
Embedded derivatives:
Included in investment related
gains/losses, net
112
24
9
2
Included in interest credited
11
3
18
4
Investment (income) loss on unit-linked
variable annuities
(1
)
—
1
—
Interest credited on unit-linked variable
annuities
1
—
(1
)
—
Interest expense on uncertain tax
positions
1
—
—
—
Other (2)
(31
)
(6
)
37
8
Uncertain tax positions and other tax
related items
—
(5
)
—
11
Adjusted operating income
314
72
23.0
%
1,321
313
23.7
%
Notable items
194
26
194
26
Adjusted operating income, excluding
notable items
$
508
$
98
$
1,515
$
339
(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 September
30,
2024
2023
Income before income taxes
$
214
$
380
Reconciliation to pre-tax adjusted
operating income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
(23
)
134
Market risk benefits remeasurement (gains)
losses
31
(21
)
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(1
)
(4
)
Embedded derivatives:
Included in investment related
gains/losses, net
112
(1
)
Included in interest credited
11
(7
)
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 (1)
(31
)
(1
)
Pre-tax adjusted operating income
314
481
Notable items
194
(3
)
Pre-tax adjusted operating income,
excluding notable items
$
508
$
478
(Unaudited)
Nine Months Ended September
30,
2024
2023
Income before income taxes
$
755
$
996
Reconciliation to pre-tax adjusted
operating income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
517
378
Market risk benefits remeasurement (gains)
losses
(12
)
(38
)
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(3
)
(2
)
Embedded derivatives:
Included in investment related
gains/losses, net
9
(18
)
Included in interest credited
18
(11
)
Investment (income) loss on unit-linked
variable annuities
1
4
Interest credited on unit-linked variable
annuities
(1
)
(4
)
Interest expense on uncertain tax
positions
—
1
Other (1)
37
7
Pre-tax adjusted operating income
1,321
1,313
Notable items
194
(3
)
Pre-tax adjusted operating income,
excluding notable items
$
1,515
$
1,310
(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 September 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
$
57
$
1
$
21
$
79
$
53
$
132
Financial Solutions
(46
)
24
102
80
—
80
Total U.S. and Latin America
11
25
123
159
53
212
Canada Traditional
29
1
—
30
(5
)
25
Canada Financial Solutions
21
(17
)
—
4
—
4
Total Canada
50
(16
)
—
34
(5
)
29
EMEA Traditional
(17
)
(1
)
—
(18
)
40
22
EMEA Financial Solutions
84
2
—
86
2
88
Total EMEA
67
1
—
68
42
110
APAC Traditional
11
—
—
11
95
106
APAC Financial Solutions
93
(33
)
—
60
9
69
Total Asia Pacific
104
(33
)
—
71
104
175
Corporate and Other
(18
)
—
—
(18
)
—
(18
)
Consolidated
$
214
$
(23
)
$
123
$
314
$
194
$
508
(Unaudited)
Three Months Ended September 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
$
105
$
—
$
(2
)
$
103
$
17
$
120
Financial Solutions
108
34
(6
)
136
(22
)
114
Total U.S. and Latin America
213
34
(8
)
239
(5
)
234
Canada Traditional
6
4
—
10
13
23
Canada Financial Solutions
30
—
—
30
(22
)
8
Total Canada
36
4
—
40
(9
)
31
EMEA Traditional
(60
)
1
—
(59
)
47
(12
)
EMEA Financial Solutions
84
24
—
108
(34
)
74
Total EMEA
24
25
—
49
13
62
APAC Traditional
134
—
—
134
(2
)
132
APAC Financial Solutions
(16
)
60
—
44
—
44
Total Asia Pacific
118
60
—
178
(2
)
176
Corporate and Other
(11
)
(14
)
—
(25
)
—
(25
)
Consolidated
$
380
$
109
$
(8
)
$
481
$
(3
)
$
478
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Income
to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited)
Nine Months Ended September 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
$
347
$
—
$
27
$
374
$
53
$
427
Financial Solutions
54
196
—
250
—
250
Total U.S. and Latin America
401
196
27
624
53
677
Canada Traditional
103
(1
)
—
102
(5
)
97
Canada Financial Solutions
34
(16
)
—
18
—
18
Total Canada
137
(17
)
—
120
(5
)
115
EMEA Traditional
12
7
—
19
40
59
EMEA Financial Solutions
220
29
—
249
2
251
Total EMEA
232
36
—
268
42
310
APAC Traditional
220
(1
)
—
219
95
314
APAC Financial Solutions
48
142
—
190
9
199
Total Asia Pacific
268
141
—
409
104
513
Corporate and Other
(283
)
183
—
(100
)
—
(100
)
Consolidated
$
755
$
539
$
27
$
1,321
$
194
$
1,515
(Unaudited)
Nine Months Ended September 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
$
288
$
—
$
—
$
288
$
17
$
305
Financial Solutions
290
89
(29
)
350
(22
)
328
Total U.S. and Latin America
578
89
(29
)
638
(5
)
633
Canada Traditional
70
1
—
71
13
84
Canada Financial Solutions
46
—
—
46
(22
)
24
Total Canada
116
1
—
117
(9
)
108
EMEA Traditional
(29
)
1
—
(28
)
47
19
EMEA Financial Solutions
195
48
—
243
(34
)
209
Total EMEA
166
49
—
215
13
228
APAC Traditional
302
—
—
302
(2
)
300
APAC Financial Solutions
(9
)
155
—
146
—
146
Total Asia Pacific
293
155
—
448
(2
)
446
Corporate and Other
(157
)
52
—
(105
)
—
(105
)
Consolidated
$
996
$
346
$
(29
)
$
1,313
$
(3
)
$
1,310
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share
data)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Earnings per share from net income
(loss):
Basic earnings per share
$
2.37
$
4.34
$
8.64
$
11.19
Diluted earnings per share
$
2.33
$
4.29
$
8.53
$
11.06
Diluted earnings per share from adjusted
operating income
$
3.62
$
5.57
$
15.11
$
15.14
Weighted average number of common and
common equivalent shares outstanding
66,797
66,914
66,694
67,252
(Unaudited)
At September 30,
2024
2023
Treasury shares
19,447
19,439
Common shares outstanding
65,864
65,872
Book value per share outstanding
$
168.93
$
122.40
Book value per share outstanding, before
impact of AOCI
$
149.63
$
142.63
Reconciliation of Book Value Per
Share to Book Value Per Share Excluding AOCI and B36
Derivatives
(Unaudited)
At September 30,
2024
2023
Book value per share outstanding
$
168.93
$
122.40
Less effect of AOCI:
Accumulated currency translation
adjustment
1.64
(0.49
)
Unrealized (depreciation) appreciation of
securities
(42.52
)
(101.10
)
Effect of updating discount rates on
future policy benefits
60.54
81.46
Change in instrument-specific credit risk
for market risk benefits
0.09
0.11
Pension and postretirement benefits
(0.45
)
(0.21
)
Book value per share outstanding, before
impact of AOCI
149.63
142.63
Less effect of B36 derivatives
(2.16
)
0.12
Book value per share outstanding, before
impact of AOCI and B36 derivatives
$
151.79
$
142.51
Reconciliation of Shareholders'
Average Equity to Shareholders' Average Equity Excluding AOCI
(Dollars in millions)
(Unaudited)
Trailing Twelve Months Ended September 30,
2024:
Average Equity
Shareholders' average equity
$
9,495
Less effect of AOCI:
Accumulated currency translation
adjustment
57
Unrealized (depreciation) appreciation of
securities
(4,376
)
Effect of updating discount rates on
future policy benefits
4,225
Change in instrument-specific credit risk
for market risk benefits
5
Pension and postretirement benefits
(26
)
Shareholders' average equity, excluding
AOCI
9,610
Year-to-date notable items, net of tax
33
Shareholders' average equity, excluding
AOCI and notable items
$
9,643
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 September 30,
2024:
Income
Net income available to RGA
shareholders
$
727
7.7
%
Reconciliation to adjusted operating
income:
Capital (gains) losses, derivatives and
other, net
452
Change in fair value of embedded
derivatives
168
Tax expense on uncertain tax positions and
other tax related items
(30
)
Net income attributable to noncontrolling
interest
7
Adjusted operating income
1,324
13.8
%
Notable items after tax
168
Adjusted operating income, excluding
notable items
$
1,492
15.5
%
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements
of Income
(Dollars in millions)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenues:
Net premiums
$
4,391
$
4,255
$
13,687
$
10,977
Investment income, net of related
expenses
1,188
922
3,231
2,635
Investment related gains (losses), net
(78
)
(126
)
(498
)
(326
)
Other revenue
150
102
446
274
Total revenues
5,651
5,153
16,866
13,560
Benefits and expenses:
Claims and other policy benefits
4,116
3,959
12,960
10,035
Future policy benefits remeasurement
(gains) losses
151
(82
)
37
(95
)
Market risk benefits remeasurement (gains)
losses
31
(21
)
(12
)
(38
)
Interest credited
310
223
795
647
Policy acquisition costs and other
insurance expenses
452
348
1,230
1,028
Other operating expenses
299
274
883
799
Interest expense
78
72
218
188
Total benefits and expenses
5,437
4,773
16,111
12,564
Income before income taxes
214
380
755
996
Provision for income taxes
56
91
181
247
Net income
158
289
574
749
Net income attributable to noncontrolling
interest
2
2
5
5
Net income available to RGA
shareholders
$
156
$
287
$
569
$
744
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030230625/en/
Investor Contact Jeff Hopson Senior Vice President -
Investor Relations (636) 736-2068
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