Reinsurance Group of America Reports Second Quarter Results

Rhea-AI Summary

Reinsurance Group of America (NYSE: RGA) reported strong second quarter results for 2024. Key highlights include:

Net income available to shareholders was $203 million, or $3.03 per diluted share, compared to $205 million, or $3.05 per diluted share, last year. Adjusted operating income rose to $365 million, or $5.48 per diluted share, up from $297 million, or $4.40 per diluted share in 2023.

Premium growth was notable, increasing by 17.5% year-over-year, and 18.5% on a constant currency basis. The company deployed $307 million into in-force transactions and announced a 4.7% increase in its quarterly dividend to $0.89 per share. Return on equity stood at 9.7%, with an adjusted operating ROE of 15.3% over the trailing twelve months. Total assets amounted to $109.9 billion compared to $89 billion last year.

The effective tax rate was slightly above expectations at 24.3% on pre-tax income. RGA's balance sheet remains strong with excess capital of approximately $1 billion.

Positive

• Adjusted operating income increased to $365 million, up 22.9% from last year.
• Net premiums grew 17.5% year-over-year, reaching $3.9 billion.
• ROE of 9.7% and adjusted operating ROE of 15.3% for the trailing twelve months.
• Quarterly dividend increased by 4.7% to $0.89 per share.
• Deployed $307 million in capital into in-force transactions.

Negative

• Net income available to shareholders slightly decreased to $203 million from $205 million last year.
• The effective tax rate increased to 24.3%, above the expected range.

Insights

Financial Analyst

Reinsurance Group of America's Q2 2024 results demonstrate solid performance and growth. Net income available to shareholders was $203 million, or $3.03 per diluted share, slightly down from $3.05 in Q2 2023. However, adjusted operating income surged to $365 million, or $5.48 per diluted share, a significant increase from $4.40 in the prior year.

The company's premium growth is particularly impressive, with consolidated net premiums increasing by 17.5% (18.5% on a constant currency basis) to $3.9 billion. This growth was partly driven by a $282 million contribution from a single premium pension risk transfer transaction in the U.S. Financial Solutions business.

RGA's investment performance improved, with the average investment yield increasing to 4.65% from 4.42% in the prior-year period, benefiting from higher new money rates. The company also deployed $307 million into in-force transactions, demonstrating its ability to capitalize on market opportunities.

The company's balance sheet remains strong, with excess capital of approximately $1.0 billion. This financial flexibility positions RGA well for future growth and potential market volatility. The board's decision to increase the quarterly dividend by 4.7% to $0.89 per share reflects confidence in the company's financial position and future prospects.

While overall performance was strong, there were some areas of concern. The U.S. Financial Solutions segment underperformed due to timing issues with new business and one-time items. Additionally, the EMEA Traditional segment experienced unfavorable results, primarily in the United Kingdom.

In conclusion, RGA's Q2 results demonstrate resilience and growth in a challenging environment, with strong premium growth, improved investment yields and strategic capital deployment. However, investors should monitor segment-specific challenges and the company's ability to maintain this momentum in future quarters.

Insurance Industry Expert

RGA's Q2 results highlight several key trends in the reinsurance industry. The strong performance in Asia Traditional and Financial Solutions businesses underscores the growing importance of Asian markets in the global reinsurance landscape. This aligns with the industry-wide shift towards emerging markets for growth opportunities.

The $282 million contribution from a single premium pension risk transfer transaction in the U.S. Financial Solutions business is particularly noteworthy. It reflects the increasing demand for pension risk transfer solutions as companies seek to offload long-term pension liabilities. This trend is likely to continue as more corporations look to de-risk their balance sheets.

RGA's success in in-force transactions, with $307 million of capital deployed, demonstrates the company's ability to capitalize on the growing market for legacy life insurance portfolio transfers. This strategy allows RGA to acquire established books of business, potentially at attractive prices, while helping primary insurers optimize their capital and risk profiles.

The company's improved investment yield, rising to 4.65% from 4.42%, reflects the broader industry trend of benefiting from rising interest rates. This environment can help insurers and reinsurers boost their investment income, which is important for long-term profitability.

However, the challenges faced in certain segments, such as EMEA Traditional, highlight the ongoing volatility and regional differences in mortality and morbidity experiences. This underscores the importance of geographic diversification in the reinsurance business model.

Overall, RGA's results indicate a reinsurance industry that is adapting to changing market conditions, capitalizing on new opportunities in pension risk transfer and in-force transactions, while navigating regional challenges and benefiting from an improved interest rate environment.

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.

ST. LOUIS--(BUSINESS WIRE)-- 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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731744784/en/

Jeff Hopson

Senior Vice President - Investor Relations

(636) 736-2068

Source: Reinsurance Group of America, Incorporated

FAQ

What were the second quarter earnings for RGA?

RGA reported net income of $203 million, or $3.03 per diluted share, and adjusted operating income of $365 million, or $5.48 per diluted share.

How did RGA's net premiums perform in the second quarter?

RGA's net premiums increased by 17.5% year-over-year, reaching $3.9 billion.

What is RGA's adjusted operating ROE for the trailing twelve months?

RGA reported an adjusted operating return on equity (ROE) of 15.3% for the trailing twelve months.

How much capital did RGA deploy into in-force transactions?

RGA deployed $307 million into in-force transactions in the second quarter.

What is the new quarterly dividend for RGA?

RGA increased its quarterly dividend by 4.7% to $0.89 per share.

What is RGA's total asset value as of the second quarter?

RGA's total assets amounted to $109.9 billion as of the second quarter.

What was the effective tax rate for RGA in the second quarter?

The effective tax rate for RGA in the second quarter was 24.3% on pre-tax income.

How did foreign currency fluctuations impact RGA's earnings?

Foreign currency fluctuations had a favorable effect of $0.06 per diluted share on net income and an adverse effect of $0.06 per diluted share on adjusted operating income.