Reinsurance Group of America Reports Second Quarter Results

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 $205 million, or $3.05 per diluted share, compared with $105 million, or $1.55 per diluted share, in the prior-year quarter. Adjusted operating income* for the second quarter totaled $297 million, or $4.40 per diluted share, compared with $316 million, or $4.67 per diluted share, the year before. Net foreign currency fluctuations had an adverse effect of $0.04 per diluted share on net income available to RGA shareholders and $0.07 per diluted share on adjusted operating income as compared with the prior year.

In the second quarter, consolidated net premiums totaled $3.3 billion, an increase of 3.3% over the 2022 second quarter, with an adverse net foreign currency effect of $45 million. Excluding the net foreign currency effect, consolidated net premiums increased 4.7% in the quarter.

Compared with the year-ago period, excluding spread-based businesses, second quarter investment income decreased 1.0%, reflecting lower variable investment income, partially offset by higher yields. Average investment yield decreased to 4.42% in the second quarter from 4.63% in the prior-year period due to lower variable investment income, partially offset by higher yields.

The effective tax rate on pre-tax income was 21.7% for the quarter. The effective tax rate for the quarter was 20.9% on pre-tax adjusted operating income, lower than the expected range of 23% to 24% primarily due to the geographical mix of earnings and benefits resulting from tax returns filed during the quarter.

Anna Manning, Chief Executive Officer, commented, “This was a strong quarter, with most regions and business lines performing very well, highlighting RGA’s differentiated, diversified and valuable global franchise. We continue to see strong momentum in our new business activities, both organic and in-force transactions. Favorable industry dynamics are creating many growth opportunities, and we continue to partner with our clients for shared success. Our balance sheet is strong, and we are benefiting from the higher yield environment while maintaining our risk discipline. Looking forward, we see a bright future and expect to continue to deliver attractive financial results over time, consistent with our new financial targets.”

SEGMENT RESULTS

U.S. and Latin America

Traditional

Quarterly Results

• Individual Mortality results reflected favorable claims experience, the impact of which was moderated under LDTI.
• Individual Health and Group results were favorable.
• The favorable experience was partially offset by one-time items.

Financial Solutions

Quarterly Results

• Asset-Intensive results reflected improved investment spreads.
• Capital Solutions results were in line with expectations.

Canada

Traditional

Net Premiums

• Foreign currency exchange rates had an adverse effect on net premiums of $16 million for the quarter.

Quarterly Results

• Results reflected slightly favorable mortality experience.
• 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

• Results reflected favorable longevity experience.
• 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

Net Premiums

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

Quarterly Results

• Results reflected moderately unfavorable mortality experience in the U.K.
• Foreign currency exchange rates had a favorable effect of $1 million on pre-tax income and pre-tax adjusted operating income.

Financial Solutions

Quarterly Results

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

Asia Pacific

Traditional

Net Premiums

• Foreign currency exchange rates had an adverse effect on net premiums of $21 million for the quarter.

Quarterly Results

• Results reflected favorable claims experience.
• Foreign currency exchange rates had an adverse effect of $2 million on pre-tax income and $3 million on pre-tax adjusted operating income.

Financial Solutions

Quarterly Results

• Results reflected favorable investment spreads and claims experience.
• Foreign currency exchange rates had an immaterial effect on pre-tax income and an adverse effect of $2 million on pre-tax adjusted operating income.

Corporate and Other