- Net income available to RGA shareholders of $3.05 per diluted
share
- Adjusted operating income* of $4.40 per diluted share
- Premium growth of 3.3% over the prior-year quarter, 4.7% on a
constant currency basis1
- Premium growth of 5.3% year-to-date, 7.7% on a constant
currency basis1
- ROE of 9.2%, adjusted operating ROE* of 10.9%, and adjusted
operating ROE excluding notable items* of 13.0% for the trailing
twelve months
- Deployed capital of $190 million into in-force and other
transactions, $384 million year-to-date
- Total shareholder capital returns of $104 million: $50 million
of share repurchases and $54 million of shareholder dividends
- Total shareholder capital returns of $207 million year-to-date:
$100 million of share repurchases and $107 million of shareholder
dividends
- Increased quarterly dividend 6.3% to $0.85 per share
1 Actual amounts reflect impact of currency fluctuations.
Constant currency amounts reflect foreign denominated activity
translated to U.S. dollars at a constant exchange rate.
Reinsurance Group of America, Incorporated (NYSE: RGA), a
leading global provider of life and health reinsurance, reported
second quarter net income available to RGA shareholders of $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 $0.07 per diluted share on
adjusted operating income as compared with the prior year.
Quarterly Results
Year-to-Date Results
($ in millions, except per share
data)
2023
2022
2023
2022
Net premiums
$
3,337
$
3,230
$
6,722
$
6,385
Net income available to RGA
shareholders
205
105
457
302
Net income available to RGA shareholders
per diluted share
3.05
1.55
6.77
4.46
Adjusted operating income*
297
316
646
599
Adjusted operating income excluding
notable items *
297
299
646
582
Adjusted operating income per diluted
share*
4.40
4.67
9.55
8.86
Book value per share
117.87
110.27
Book value per share, excluding
accumulated other comprehensive income (AOCI)*
138.99
132.42
Total assets
89,040
84,875
* See ‘Use of Non-GAAP Financial Measures’ below
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 $45 million. Excluding the
net foreign currency effect, consolidated net premiums increased
4.7% in the quarter.
Compared with the year-ago period, excluding spread-based
businesses, second quarter investment income decreased 1.0%,
reflecting lower variable investment income, partially offset by
higher yields. Average investment yield decreased to 4.42% in the
second quarter from 4.63% in the prior-year period due to lower
variable investment income, partially offset by higher yields.
The effective tax rate on pre-tax income was 21.7% for the
quarter. The effective tax rate for the quarter was 20.9% on
pre-tax adjusted operating income, lower than the expected range of
23% to 24% primarily due to the geographical mix of earnings and
benefits resulting from tax returns filed during the quarter.
Anna Manning, Chief Executive Officer, commented, “This was a
strong quarter, with most regions and business lines performing
very well, highlighting RGA’s differentiated, diversified and
valuable global franchise. We continue to see strong momentum in
our new business activities, both organic and in-force
transactions. Favorable industry dynamics are creating many growth
opportunities, and we continue to partner with our clients for
shared success. Our balance sheet is strong, and we are benefiting
from the higher yield environment while maintaining our risk
discipline. Looking forward, we see a bright future and expect to
continue to deliver attractive financial results over time,
consistent with our new financial targets.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
1,750
$
1,631
$
3,365
$
3,172
Pre-tax income
62
90
183
150
Pre-tax adjusted operating income
63
71
185
116
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
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Asset-Intensive:
Pre-tax income (loss)
$
47
$
(29
)
$
140
$
3
Pre-tax adjusted operating income
88
68
172
144
Capital Solutions:
Pre-tax income
$
21
$
72
$
42
$
97
Pre-tax adjusted operating income
21
72
42
97
Quarterly Results
- Asset-Intensive results reflected improved investment
spreads.
- Capital Solutions results were in line with expectations.
Canada
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
307
$
314
$
602
$
618
Pre-tax income
35
27
64
42
Pre-tax adjusted operating income
32
34
61
49
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 $2
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Pre-tax income
$
6
$
7
$
16
$
16
Pre-tax adjusted operating income
6
7
16
16
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
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
429
$
427
$
867
$
878
Pre-tax income
4
4
31
38
Pre-tax adjusted operating income
4
4
31
38
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 $1
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Pre-tax income
$
52
$
25
$
111
$
92
Pre-tax adjusted operating income
66
58
135
119
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
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
677
$
640
$
1,339
$
1,290
Pre-tax income
89
59
168
167
Pre-tax adjusted operating income
89
59
168
167
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 $3 million on pre-tax adjusted
operating income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
44
$
60
$
108
$
103
Pre-tax income (loss)
20
(54
)
7
(110
)
Pre-tax adjusted operating income
62
40
102
61
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 $2 million on pre-tax
adjusted operating income.
Corporate and Other
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Pre-tax income (loss)
$
(71
)
$
(54
)
$
(146
)
$
(81
)
Pre-tax adjusted operating income
(loss)
(55
)
3
(80
)
(15
)
Quarterly Results
- Pre-tax adjusted operating loss was unfavorable compared to the
quarterly average run rate, primarily due to higher financing costs
and the timing of some general expenses; year-to-date results are
in line with the expected run rate.
Dividend Declaration
Effective August 1, 2023, the board of directors declared a
regular quarterly dividend of $0.85, payable August 29, 2023, to
shareholders of record as of August 15, 2023.
Earnings Conference Call
A conference call to discuss second quarter results will begin
at 10 a.m. Eastern Time on Friday, August 4, 2023. Interested
parties may access the call by dialing 1-844-481-2753 (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
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:
- 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 substantially all of the effect of net investment related
gains and losses, changes in the fair value of certain embedded
derivatives, and changes in the fair value of contracts that
provide market risk benefits, which items can be volatile and may
not reflect the underlying performance of the Company’s businesses.
Additionally, adjusted operating income excludes, to the extent
applicable, 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. 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.
- 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.
- 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.
- 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 a
non-GAAP financial measure called shareholders’ average equity
position excluding AOCI and notable items.
- 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 a non-GAAP financial measure called adjusted
operating return on equity excluding notable items, which is
calculated as adjusted operating income excluding notable items
divided by average shareholders’ equity excluding notable items and
AOCI.
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.
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 celebrates its 50th
anniversary in 2023. Over the past five decades, RGA has become one
of the world’s largest and most respected reinsurers and is listed
among Fortune’s World’s Most Admired Companies. The global
organization is guided by a fundamental purpose: to make financial
protection accessible to all. RGA is widely recognized for superior
risk management and underwriting expertise, innovative product
design, and dedicated client focus. RGA serves clients and partners
in key markets around the world and has approximately $3.5 trillion
of life reinsurance in force and assets of $89.0 billion as of June
30, 2023. To learn more about RGA and its businesses, visit
www.rgare.com. Follow RGA on LinkedIn and Facebook.
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 (whether related to COVID-19 or otherwise),
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, 2022, 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,
2023
2022
Diluted Earnings Per Share
Diluted Earnings Per Share
Net income available to RGA
shareholders
$
205
$
3.05
$
105
$
1.55
Reconciliation to adjusted operating
income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
88
1.30
154
2.29
Market risk benefits remeasurement (gains)
losses
(24
)
(0.36
)
32
0.47
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
2
0.03
8
0.12
Embedded derivatives:
Included in investment related
gains/losses, net
16
0.24
44
0.65
Included in interest credited
3
0.04
(22
)
(0.33
)
Investment (income) loss on unit-linked
variable annuities
2
0.03
6
0.09
Interest credited on unit-linked variable
annuities
(2
)
(0.03
)
(6
)
(0.09
)
Interest expense on uncertain tax
positions
—
—
—
—
Other
—
—
(9
)
(0.13
)
Uncertain tax positions and other tax
related items
5
0.07
3
0.04
Net income attributable to noncontrolling
interest
2
0.03
1
0.01
Adjusted operating income
297
4.40
316
4.67
Notable items
—
—
(17
)
(0.26
)
Adjusted operating income excluding
notable items
$
297
$
4.40
$
299
$
4.41
(Unaudited)
Six Months Ended June 30,
2023
2022
Diluted Earnings Per Share
Diluted Earnings Per Share
Net income available to RGA
shareholders
$
457
$
6.77
$
302
$
4.46
Reconciliation to adjusted operating
income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
190
2.79
246
3.65
Market risk benefits remeasurement (gains)
losses
(13
)
(0.19
)
5
0.07
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
2
0.03
14
0.21
Embedded derivatives:
Included in investment related
gains/losses, net
(13
)
(0.19
)
70
1.04
Included in interest credited
(3
)
(0.04
)
(35
)
(0.52
)
Investment (income) loss on unit-linked
variable annuities
2
0.03
13
0.19
Interest credited on unit-linked variable
annuities
(2
)
(0.03
)
(13
)
(0.19
)
Interest expense on uncertain tax
positions
—
—
—
—
Other
6
0.09
(8
)
(0.12
)
Uncertain tax positions and other tax
related items
17
0.25
4
0.06
Net income attributable to noncontrolling
interest
3
0.04
1
0.01
Adjusted operating income
646
9.55
599
8.86
Notable items
—
—
(17
)
(0.26
)
Adjusted operating income excluding
notable items
$
646
$
9.55
$
582
$
8.60
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated
Effective Income Tax Rates
(Dollars in millions)
(Unaudited)
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
Pre-tax Income (Loss)
Income Taxes
Effective Tax Rate (1)
Pre-tax Income (Loss)
Income Taxes
Effective Tax Rate (1)
GAAP income
$
265
$
58
21.7
%
$
616
$
156
25.2
%
Reconciliation to adjusted operating
income:
Realized and unrealized (gains) losses,
derivatives and other, included in investment related gains
(losses), net
117
29
244
54
Market risk benefits remeasurement (gains)
losses
(31
)
(7
)
(17
)
(4
)
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
20
4
(17
)
(4
)
Included in interest credited
3
—
(4
)
(1
)
Investment (income) loss on unit-linked
variable annuities
—
—
2
—
Interest credited on unit-linked variable
annuities
2
—
(2
)
—
Interest expense on uncertain tax
positions
(2
)
—
—
—
Other
—
—
8
2
Uncertain tax positions and other tax
related items
—
(5
)
—
(17
)
Adjusted operating income
376
79
20.9
%
$
832
$
186
22.4
%
Notable items
—
—
—
—
Adjusted operating income excluding
notable items
$
376
$
79
$
832
$
186
(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.
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,
2023
2022
Income before income taxes
$
265
$
147
Reconciliation to pre-tax adjusted
operating income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
117
201
Market risk benefits remeasurement (gains)
losses
(31
)
40
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
2
10
Embedded derivatives:
Included in investment related
gains/losses, net
20
56
Included in interest credited
3
(27
)
Investment (income) loss on unit-linked
variable annuities
—
8
Interest credited on unit-linked variable
annuities
2
(8
)
Interest expense on uncertain tax
positions
(2
)
—
Other
—
(11
)
Pre-tax adjusted operating income
376
416
Notable items
—
(23
)
Pre-tax adjusted operating income
excluding notable items
$
376
$
393
(Unaudited)
Six Months Ended June 30,
2023
2022
Income before income taxes
$
616
$
414
Reconciliation to pre-tax adjusted
operating income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
244
319
Market risk benefits remeasurement (gains)
losses
(17
)
6
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
2
18
Embedded derivatives:
Included in investment related
gains/losses, net
(17
)
89
Included in interest credited
(4
)
(44
)
Investment (income) loss on unit-linked
variable annuities
2
17
Interest credited on unit-linked variable
annuities
(2
)
(17
)
Interest expense on uncertain tax
positions
—
—
Other
8
(10
)
Pre-tax adjusted operating income
832
792
Notable items
—
(23
)
Pre-tax adjusted operating income
excluding notable items
$
832
$
769
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,
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)
U.S. and Latin America:
Traditional
$
62
$
—
$
1
$
63
Financial Solutions:
Asset-Intensive
47
19
22
88
Capital Solutions
21
—
—
21
Total U.S. and Latin America
130
19
23
172
Canada Traditional
35
(3
)
—
32
Canada Financial Solutions
6
—
—
6
Total Canada
41
(3
)
—
38
EMEA Traditional
4
—
—
4
EMEA Financial Solutions
52
14
—
66
Total EMEA
56
14
—
70
APAC Traditional
89
—
—
89
APAC Financial Solutions
20
42
—
62
Total Asia Pacific
109
42
—
151
Corporate and Other
(71
)
16
—
(55
)
Consolidated
$
265
$
88
$
23
$
376
(Unaudited)
Three Months Ended June 30,
2022
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
$
90
$
—
$
(19
)
$
71
$
—
$
71
Financial Solutions:
Asset-Intensive
(29
)
49
48
68
—
68
Capital Solutions
72
—
—
72
—
72
Total U.S. and Latin America
133
49
29
211
—
211
Canada Traditional
27
7
—
34
—
34
Canada Financial Solutions
7
—
—
7
—
7
Total Canada
34
7
—
41
—
41
EMEA Traditional
4
—
—
4
—
4
EMEA Financial Solutions
25
33
—
58
—
58
Total EMEA
29
33
—
62
—
62
APAC Traditional
59
—
—
59
(23
)
36
APAC Financial Solutions
(54
)
94
—
40
—
40
Total Asia Pacific
5
94
—
99
(23
)
76
Corporate and Other
(54
)
57
—
3
—
3
Consolidated
$
147
$
240
$
29
$
416
$
(23
)
$
393
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,
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)
U.S. and Latin America:
Traditional
$
183
$
—
$
2
$
185
Financial Solutions:
Asset-Intensive
140
55
(23
)
172
Capital Solutions
42
—
—
42
Total U.S. and Latin America
365
55
(21
)
399
Canada Traditional
64
(3
)
—
61
Canada Financial Solutions
16
—
—
16
Total Canada
80
(3
)
—
77
EMEA Traditional
31
—
—
31
EMEA Financial Solutions
111
24
—
135
Total EMEA
142
24
—
166
APAC Traditional
168
—
—
168
APAC Financial Solutions
7
95
—
102
Total Asia Pacific
175
95
—
270
Corporate and Other
(146
)
66
—
(80
)
Consolidated
$
616
$
237
$
(21
)
$
832
(Unaudited)
Six Months Ended June 30,
2022
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
$
150
$
—
$
(34
)
$
116
$
—
$
116
Financial Solutions:
Asset-Intensive
3
62
79
144
—
144
Capital Solutions
97
—
—
97
—
97
Total U.S. and Latin America
250
62
45
357
—
357
Canada Traditional
42
7
—
49
—
49
Canada Financial Solutions
16
—
—
16
—
16
Total Canada
58
7
—
65
—
65
EMEA Traditional
38
—
—
38
—
38
EMEA Financial Solutions
92
27
—
119
—
119
Total EMEA
130
27
—
157
—
157
APAC Traditional
167
—
—
167
(23
)
144
APAC Financial Solutions
(110
)
171
—
61
—
61
Total Asia Pacific
57
171
—
228
(23
)
205
Corporate and Other
(81
)
66
—
(15
)
—
(15
)
Consolidated
$
414
$
333
$
45
$
792
$
(23
)
$
769
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,
2023
2022
2023
2022
Earnings per share from net income
(loss):
Basic earnings per share
$
3.09
$
1.57
$
6.86
$
4.50
Diluted earnings per share
$
3.05
$
1.55
$
6.77
$
4.46
Diluted earnings per share from adjusted
operating income
$
4.40
$
4.67
$
9.55
$
8.86
Weighted average number of common and
common equivalent shares outstanding
67,420
67,620
67,563
67,614
(Unaudited)
At June 30,
2023
2022
Treasury shares
19,099
18,304
Common shares outstanding
66,212
67,007
Book value per share outstanding
$
117.87
$
110.27
Book value per share outstanding, before
impact of AOCI
$
138.99
$
132.42
Reconciliation of Book Value Per
Share to Book Value Per Share Excluding AOCI
(Unaudited)
At June 30,
2023
2022
Book value per share outstanding
$
117.87
$
110.27
Less effect of AOCI:
Accumulated currency translation
adjustment
0.38
0.04
Unrealized (depreciation) appreciation of
securities
(73.69
)
(52.96
)
Effect of updating discount rates on
future policy benefits
52.26
31.66
Change in instrument-specific credit risk
for market risk benefits
0.20
(0.14
)
Pension and postretirement benefits
(0.27
)
(0.75
)
Book value per share outstanding, before
impact of AOCI
$
138.99
$
132.42
Reconciliation of Shareholders'
Average Equity to Shareholders' Average Equity Excluding AOCI
(Dollars in millions)
(Unaudited)
Trailing Twelve Months Ended June 30,
2023:
Average Equity
Shareholders' average equity
$
7,331
Less effect of AOCI:
Accumulated currency translation
adjustment
(66
)
Unrealized (depreciation) appreciation of
securities
(4,821
)
Effect of updating discount rates on
future policy benefits
3,272
Change in instrument-specific credit risk
for market risk benefits
10
Pension and postretirement benefits
(34
)
Shareholders' average equity, excluding
AOCI
8,970
Year-to-date notable items, net of tax
79
Shareholders' average equity, excluding
AOCI and notable items
$
9,049
Reconciliation of Trailing Twelve
Months of Consolidated Net Income to Adjusted Operating Income
and Related Return on Equity
(Dollars in millions)
(Unaudited)
Trailing Twelve Months Ended June 30,
2023:
Income
Return on Equity
Net income available to RGA
shareholders
$
672
9.2
%
Reconciliation to adjusted operating
income:
Capital (gains) losses, derivatives and
other, net
244
Change in fair value of embedded
derivatives
44
Tax expense on uncertain tax positions and
other tax related items
8
Net income attributable to noncontrolling
interest
6
Adjusted operating income
974
10.9
%
Notable items after tax
201
Adjusted operating income excluding
notable items
$
1,175
13.0
%
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,
2023
2022
2023
2022
Revenues:
Net premiums
$
3,337
$
3,230
$
6,722
$
6,385
Investment income, net of related
expenses
857
754
1,713
1,564
Investment related gains (losses), net
(123
)
(240
)
(200
)
(379
)
Other revenue
85
159
172
250
Total revenues
4,156
3,903
8,407
7,820
Benefits and expenses:
Claims and other policy benefits
3,013
2,938
6,076
5,809
Future policy benefits remeasurement
(gains) losses
13
18
(13
)
76
Market risk benefits remeasurement (gains)
losses
(31
)
40
(17
)
6
Interest credited
209
138
424
279
Policy acquisition costs and other
insurance expenses
349
336
680
680
Other operating expenses
275
242
525
469
Interest expense
63
44
116
87
Total benefits and expenses
3,891
3,756
7,791
7,406
Income before income taxes
265
147
616
414
Provision for income taxes
58
41
156
111
Net income
207
106
460
303
Net income attributable to noncontrolling
interest
2
1
3
1
Net income available to RGA
shareholders
$
205
$
105
$
457
$
302
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230731062842/en/
Jeff Hopson Senior Vice President - Investor Relations (636)
736-2068
Reinsurance Group of Ame... (NYSE:RGA)
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