Core Viewpoint - Reinsurance Group (RGA) reported quarterly earnings of $4.72 per share, missing the Zacks Consensus Estimate of $5.58 per share, representing an earnings surprise of -15.41% [1][2] Financial Performance - The company posted revenues of $5.64 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.09%, compared to year-ago revenues of $5.15 billion [2] - Over the last four quarters, RGA has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - RGA shares have lost about 10.8% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current status translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $6.04 on $6.05 billion in revenues, and for the current fiscal year, it is $23.10 on $23.33 billion in revenues [7] - The estimate revisions trend for RGA was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Insurance - Life Insurance industry is currently in the top 10% of the Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially impact stock performance [5][8]

Core Viewpoint - Reinsurance Group of America, Incorporated (NYSE: RGA) has underperformed in the past year, with a 15% decline in share value, raising concerns about its transaction efficacy despite aggressive deal-making [1] Group 1: Company Performance - RGA's shares have lost 15% of their value over the past year [1] - The company has been active in signing large transactions, but the mixed performance has led to increased scrutiny [1] Group 2: Market Sentiment - There are growing concerns regarding the effectiveness of RGA's strategies in the current market environment [1]

[Consolidated Financials](index=3&type=section&id=Consolidated) [Financial Highlights](index=3&type=section&id=Financial%20Highlights) In the second quarter of 2025, RGA reported net premiums of $4.151 billion, a slight decrease in net income to $180 million, and adjusted operating income of $315 million Q2 2025 Key Financial Metrics (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Change | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net premiums | $4,151M | $3,920M | +$231M | $8,170M | $9,296M | -$1,126M | | Net income available to shareholders | $180M | $203M | -$23M | $466M | $413M | +$53M | | Adjusted operating income | $315M | $365M | -$50M | $693M | $766M | -$73M | | Diluted EPS (Net Income) | $2.70 | $3.03 | -$0.33 | $6.97 | $6.19 | +$0.78 | | Diluted EPS (Adjusted Operating) | $4.72 | $5.48 | -$0.76 | $10.38 | $11.49 | -$1.11 | | Book value per share, excluding AOCI | $155.87 | $148.19 | +$7.68 | $155.87 | $148.19 | +$7.68 | - Assumed life reinsurance in force grew to **$4.09 trillion** as of June 30, 2025, up from **$3.77 trillion** in the prior year quarter[7](index=7&type=chunk) [Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations)](index=4&type=section&id=Consolidated%20GAAP%20Income%20Statements%20(including%20Adjusted%20Operating%20Income%20Reconciliations)) For Q2 2025, total revenues were $5.6 billion, an increase from $4.88 billion in the prior-year quarter, driven by higher net premiums and net investment income Q2 2025 Consolidated Income Statement Summary (in millions) | Item | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net premiums | $4,151 | $3,920 | +$231 | | Net investment income | $1,408 | $1,082 | +$326 | | Total revenues | $5,599 | $4,878 | +$721 | | Total benefits and expenses | $5,258 | $4,609 | +$649 | | Income before income taxes | $341 | $269 | +$72 | | Net income available to RGA's shareholders | $180 | $203 | -$23 | Reconciliation to After-Tax Adjusted Operating Income (in millions) | Item | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP net income attributable to RGA | $180 | $203 | -$23 | | Adjustments (net) | +$135 | +$162 | -$27 | | Adjusted operating income | $315 | $365 | -$50 | - Foreign currency exchange rates had a positive effect on net premiums by **$45 million** and on pre-tax adjusted operating income by **$9 million** compared to the prior-year quarter[11](index=11&type=chunk) [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, RGA's total assets increased to $133.5 billion from $109.9 billion a year prior, primarily due to growth in fixed maturity securities and mortgage loans Balance Sheet Summary (in millions) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total investments | $109,901 | $89,620 | | **Total assets** | **$133,479** | **$109,888** | | Future policy benefits | $63,531 | $50,779 | | **Total liabilities** | **$121,336** | **$100,063** | | **Total RGA, Inc. shareholders' equity** | **$12,053** | **$9,735** | | Total RGA, Inc. shareholders' equity, excluding AOCI | $10,301 | $9,755 | [Segment Summaries of Adjusted Operating Income Statements](index=7&type=section&id=Segment%20Summaries%20of%20Adjusted%20Operating%20Income%20Statements) [U.S. and Latin America Traditional](index=8&type=section&id=U.S.%20and%20Latin%20America%20Traditional) The U.S. and Latin America Traditional segment reported a significant decrease in pre-tax adjusted operating income to $4 million in Q2 2025 from $167 million in the prior-year quarter U.S. and Latin America Traditional Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $2,019 | $1,827 | +$192 | | Adjusted Operating Income (Pre-tax) | $4 | $167 | -$163 | - The loss ratio for the segment increased significantly to **98.9%** in Q2 2025, compared to **88.1%** in Q2 2024[18](index=18&type=chunk) - Assumed Life Reinsurance in Force for this segment grew to **$1.85 trillion** from **$1.72 trillion** in the prior year[18](index=18&type=chunk) [U.S. and Latin America Financial Solutions](index=10&type=section&id=U.S.%20and%20Latin%20America%20Financial%20Solutions) The U.S. and Latin America Financial Solutions segment saw pre-tax adjusted operating income increase to $97 million in Q2 2025 from $80 million in the prior-year quarter U.S. and Latin America Financial Solutions Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $(5) | $305 | -$310 | | Net Investment Income | $371 | $318 | +$53 | | Adjusted Operating Income (Pre-tax) | $97 | $80 | +$17 | - Policyholder account balances for fixed annuities stood at **$10.5 billion** as of June 30, 2025[24](index=24&type=chunk) [Canada Traditional](index=12&type=section&id=Canada%20Traditional) The Canada Traditional segment reported a stable pre-tax adjusted operating income of $28 million for Q2 2025, a slight increase from $26 million in the prior-year quarter Canada Traditional Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $339 | $326 | +$13 | | Adjusted Operating Income (Pre-tax) | $28 | $26 | +$2 | - Assumed Life Reinsurance in Force for this segment increased to **$512.4 billion** from **$489.3 billion** in the prior year[27](index=27&type=chunk) [Canada Financial Solutions](index=13&type=section&id=Canada%20Financial%20Solutions) The Canada Financial Solutions segment, which includes longevity and fee-based transactions, posted a pre-tax adjusted operating income of $9 million in Q2 2025, up from $7 million year-over-year Canada Financial Solutions Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $45 | $48 | -$3 | | Adjusted Operating Income (Pre-tax) | $9 | $7 | +$2 | - This segment's operations primarily consist of longevity and fee-based transactions[32](index=32&type=chunk) [Europe, Middle East and Africa Traditional](index=14&type=section&id=Europe,%20Middle%20East%20and%20Africa%20Traditional) The EMEA Traditional segment showed significant improvement, reporting a pre-tax adjusted operating income of $18 million in Q2 2025, compared to a loss of $1 million in the prior-year quarter EMEA Traditional Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $573 | $497 | +$76 | | Adjusted Operating Income (Loss) (Pre-tax) | $18 | $(1) | +$19 | - Assumed new business production in the segment more than doubled year-over-year, reaching **$34.1 billion** in Q2 2025[35](index=35&type=chunk) [Europe, Middle East and Africa Financial Solutions](index=15&type=section&id=Europe,%20Middle%20East%20and%20Africa%20Financial%20Solutions) The EMEA Financial Solutions segment delivered strong results with pre-tax adjusted operating income rising to $116 million in Q2 2025, a 35% increase from $86 million in the prior-year quarter EMEA Financial Solutions Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $247 | $159 | +$88 | | Adjusted Operating Income (Pre-tax) | $116 | $86 | +$30 | - This segment's operations include longevity, asset-intensive, and fee-based transactions[40](index=40&type=chunk) [Asia Pacific Traditional](index=16&type=section&id=Asia%20Pacific%20Traditional) The Asia Pacific Traditional segment maintained stable profitability, with pre-tax adjusted operating income of $104 million in Q2 2025, compared to $99 million in the prior-year quarter Asia Pacific Traditional Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $816 | $708 | +$108 | | Adjusted Operating Income (Pre-tax) | $104 | $99 | +$5 | - Critical illness net premiums, a key product in this region, grew to **$424 million** from **$358 million** in the prior-year quarter[43](index=43&type=chunk) [Asia Pacific Financial Solutions](index=17&type=section&id=Asia%20Pacific%20Financial%20Solutions) The Asia Pacific Financial Solutions segment reported a pre-tax adjusted operating income of $77 million in Q2 2025, a slight increase from $71 million year-over-year Asia Pacific Financial Solutions Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Premiums | $117 | $50 | +$67 | | Net Investment Income | $247 | $163 | +$84 | | Adjusted Operating Income (Pre-tax) | $77 | $71 | +$6 | - Assumed Life Reinsurance in Force more than doubled to **$22.1 billion** from **$9.6 billion** in the prior year, indicating strong business growth[47](index=47&type=chunk) [Corporate and Other](index=18&type=section&id=Corporate%20and%20Other) The Corporate and Other segment reported a pre-tax adjusted operating loss of $32 million in Q2 2025, an improvement from a loss of $44 million in the prior-year quarter Corporate and Other Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Investment Income | $166 | $123 | +$43 | | Interest Expense | $90 | $73 | +$17 | | Adjusted Operating Loss (Pre-tax) | $(32) | $(44) | +$12 | [Summary of Segment Adjusted Operating Income](index=19&type=section&id=Summary%20of%20Segment%20Adjusted%20Operating%20Income) Consolidated pre-tax adjusted operating income for Q2 2025 was $421 million, down from $491 million in Q2 2024 Pre-Tax Adjusted Operating Income by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | U.S. and Latin America | $101 | $247 | -$146 | | Canada | $37 | $33 | +$4 | | Europe, Middle East and Africa | $134 | $85 | +$49 | | Asia Pacific | $181 | $170 | +$11 | | Corporate and Other | $(32) | $(44) | +$12 | | **Consolidated Total** | **$421** | **$491** | **-$70** | [Investments](index=20&type=section&id=Investments) [Cash and Invested Assets and Investment Income and Yield Summary](index=20&type=section&id=Cash%20and%20Invested%20Assets%20and%20Investment%20Income%20and%20Yield%20Summary) As of June 30, 2025, total cash and invested assets reached $115.3 billion, up from $94.2 billion a year ago Cash and Invested Assets Breakdown (in millions) | Asset Class | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Fixed maturity securities, AFS | $86,043 | $70,491 | | Mortgage loans | $10,057 | $7,984 | | Cash and cash equivalents | $5,416 | $4,596 | | **Total cash and invested assets** | **$115,317** | **$94,216** | Investment Yield Summary (in millions, except yield) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net investment income (excl. spread business) | $595M | $436M | | Annualized investment yield | 5.31% | 4.65% | [Fixed Maturity Securities](index=21&type=section&id=Fixed%20Maturity%20Securities) The fixed maturity securities portfolio, valued at $86.0 billion at fair value as of June 30, 2025, is predominantly composed of corporate bonds (66.5%) Fixed Maturity Securities by Type (June 30, 2025, Fair Value, in millions) | Security Type | Fair Value (in millions) | % of Total | | :--- | :--- | :--- | | Corporate | $57,326 | 66.5% | | Other foreign government | $6,162 | 7.2% | | ABS | $6,016 | 7.0% | | Japanese government | $5,738 | 6.7% | | Canadian government | $5,134 | 6.0% | | Other | $5,767 | 6.6% | | **Total** | **$86,043** | **100.0%** | [Corporate Fixed Maturity Securities by Industry](index=22&type=section&id=Corporate%20Fixed%20Maturity%20Securities%20by%20Industry) The corporate fixed maturity portfolio of $57.3 billion (fair value) is well-diversified across industries Corporate Securities by Industry (June 30, 2025, Amortized Cost, in millions) | Industry Sector | Amortized Cost (in millions) | % of Total | Average Rating | | :--- | :--- | :--- | :--- | | Industrials | $31,866 | 52.4% | BBB to A- | | Financial institutions | $18,947 | 31.1% | A- | | Utilities | $10,193 | 16.5% | A- | | **Total** | **$61,006** | **100.0%** | **BBB+** | [Ratings of Fixed Maturity Securities and Structured Fixed Maturity Securities](index=23&type=section&id=Ratings%20of%20Fixed%20Maturity%20Securities%20and%20Structured%20Fixed%20Maturity%20Securities) The fixed maturity portfolio maintains a high credit quality, with 93.8% of securities rated investment grade (NAIC 1 or 2) based on amortized cost as of June 30, 2025 - As of June 30, 2025, **93.8%** of the fixed maturity portfolio by amortized cost was rated investment grade (NAIC Designation 1 or 2)[69](index=69&type=chunk) Structured Fixed Maturity Securities (June 30, 2025, Amortized Cost, in millions) | Security Type | Amortized Cost (in millions) | % of Total | | :--- | :--- | :--- | | Total ABS | $6,160 | 62.6% | | CMBS | $2,129 | 21.6% | | Total RMBS | $1,593 | 15.8% | | **Total** | **$9,882** | **100.0%** | [Fixed Maturity Securities Below Amortized Cost](index=24&type=section&id=Fixed%20Maturity%20Securities%20Below%20Amortized%20Cost) As of June 30, 2025, the company held fixed maturity securities with a total fair value of $50.8 billion that were below their amortized cost, resulting in gross unrealized losses of $6.9 billion Gross Unrealized Losses (June 30, 2025, in millions) | Category | Gross Unrealized Losses | | :--- | :--- | | Investment grade securities | $6,808 | | Below investment grade securities | $126 | | **Total fixed maturity securities** | **$6,934** | - Of the total **$6.9 billion** in gross unrealized losses, **$6.1 billion** were on securities held in an unrealized loss position for 12 months or longer[73](index=73&type=chunk) [Consolidated Investment Related Gains and Losses](index=26&type=section&id=Consolidated%20Investment%20Related%20Gains%20and%20Losses) For Q2 2025, the company reported total net investment related losses of $44 million Investment Related Gains (Losses) Summary (Q2 2025, in millions) | Item | Amount | | :--- | :--- | | Net losses on fixed maturity securities available for-sale | $(66) | | Net gains on total derivatives | $53 | | Other net losses | $(31) | | **Total investment related gains (losses), net** | **$(44)** | [Appendix](index=27&type=section&id=Appendix) [Reconciliations of GAAP to Non-GAAP Measures](index=27&type=section&id=Reconciliations%20of%20GAAP%20to%20Non-GAAP%20Measures) This section provides detailed reconciliations from GAAP measures to the non-GAAP measures used throughout the report - This section contains detailed reconciliations of GAAP income to adjusted operating income for each operating segment, such as U.S. and Latin America Traditional, Canada Financial Solutions, etc[83](index=83&type=chunk)[87](index=87&type=chunk)[91](index=91&type=chunk) - It also provides a reconciliation of RGA, Inc. shareholders' equity to a non-GAAP measure that excludes the impact of Accumulated Other Comprehensive Income (AOCI)[95](index=95&type=chunk) - A reconciliation of book value per share to book value per share excluding AOCI is also presented, showing the per-share impact of items like unrealized depreciation of securities and changes in discount rates[96](index=96&type=chunk) [Non-GAAP Disclosures](index=32&type=section&id=Non-GAAP%20Disclosures) The company explains its use of non-GAAP financial measures, stating they provide a clearer picture of ongoing operating performance - The company uses non-GAAP financial measures to better reflect ongoing profitability and underlying trends by excluding volatile items not indicative of core operations[99](index=99&type=chunk) - Adjusted operating income is defined as net income excluding items such as net investment gains/losses, changes in fair value of embedded derivatives, and market risk benefit remeasurements[102](index=102&type=chunk) - The company states it is unable to provide reconciliations for its forward-looking non-GAAP financial targets due to the inherent difficulty in forecasting the various components[104](index=104&type=chunk)

Core Viewpoint - Reinsurance Group (RGA) is expected to report quarterly earnings of $5.58 per share, a 1.8% increase year-over-year, with revenues projected at $5.71 billion, reflecting a 10.8% increase compared to the previous year [1]. Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been adjusted downward by 0.3%, indicating a reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts estimate 'Revenues- Net premiums' to reach $4.32 billion, representing a year-over-year increase of 10.2% [5]. - 'Revenues- Other revenues' are projected at $109.95 million, indicating a decline of 25.2% from the prior-year quarter [5]. Pre-tax Adjusted Operating Income Estimates - 'Pre-tax adjusted operating income (loss)- Total Asia Pacific' is estimated at $171.26 million, slightly up from $170.00 million a year ago [6]. - 'Pre-tax adjusted operating income (loss)- Total Canada' is expected to be $46.30 million, compared to $33.00 million in the previous year [6]. - 'Pre-tax adjusted operating income (loss)- Total U.S. and Latin America' is forecasted at $205.58 million, down from $247.00 million year-over-year [7]. - 'Pre-tax adjusted operating income (loss)- Total EMEA' is projected to reach $112.04 million, up from $85.00 million in the same quarter last year [7]. - 'Pre-tax adjusted operating income (loss)- Asia Pacific Traditional' is expected to be $100.19 million, slightly up from $99.00 million a year ago [8]. - 'Pre-tax adjusted operating income (loss)- Asia Pacific Financial Solutions' is estimated at $68.82 million, down from $71.00 million in the previous year [8]. - 'Pre-tax adjusted operating income (loss)- U.S. and Latin America- Financial Solutions- Total' is projected at $76.48 million, down from $80.00 million year-over-year [9]. - 'Pre-tax adjusted operating income (loss)- Canada Financial Solutions' is expected to be $8.41 million, up from $7.00 million a year ago [9]. - 'Pre-tax adjusted operating income (loss)- Canada Traditional' is forecasted at $38.33 million, compared to $26.00 million in the previous year [10]. - 'Pre-tax adjusted operating income (loss)- U.S. and Latin America- Traditional' is expected to be $129.63 million, down from $167.00 million year-over-year [10]. Stock Performance - Shares of Reinsurance Group have decreased by 0.5% over the past month, contrasting with a 4.9% increase in the Zacks S&P 500 composite [11].

Core Insights - Reinsurance Group of America (RGA) shares are trading at a discount compared to the Zacks Life Insurance industry, with a forward price-to-book value of 1.14X, lower than the industry average of 1.97X, the Finance sector's 4.18X, and the S&P 500 Composite's 8.18X [2] - RGA has a market capitalization of $13.13 billion and an average trading volume of 0.4 million shares over the last three months [2] - The company has a Value Score of A, indicating strong valuation metrics [2] Price Performance - RGA shares have lost 3.2% over the past year, while the industry has grown by 14.8%, the Finance sector by 19.7%, and the S&P 500 composite by 11.3% [5] - RGA shares are currently trading above the 50-day simple moving average of $197.98, indicating solid upward momentum [4] Earnings and Growth - RGA has a decent earnings surprise history, beating estimates in three of the last four quarters with an average surprise of 7.85% [6] - Earnings have grown by 15.3% over the past five years, outperforming the industry average of 7.8%, and the company has a Growth Score of B [11] - The Zacks Consensus Estimate for RGA's 2025 earnings per share indicates a year-over-year increase of 2.2%, with revenues projected at $23.45 billion, reflecting a 2.6% improvement [10] Analyst Sentiment and Target Price - The average target price for RGA, based on short-term price targets from 11 analysts, is $244.64 per share, suggesting a potential upside of 25.1% from the last closing price [12] Return on Invested Capital - RGA's return on invested capital (ROIC) has increased annually, with a trailing 12-month ROIC of 6%, significantly higher than the industry average of 0.6% [15] Market Position and Strategy - RGA is a leader in the traditional U.S. and Latin American markets, with a strong product line and significant value embedded in its in-force business, which is expected to generate predictable long-term earnings [17] - The company is well-capitalized and actively seeks growth opportunities while balancing capital returns to shareholders [19] - RGA is ramping up technological inclusion in its products and has maintained a free cash flow conversion rate above 85% in recent quarters [20] Final Assessment - RGA's new business volumes, favorable longevity experience, diversified business model, and effective capital deployment position it well for long-term growth [22] - The stock has a VGM Score of A, indicating attractive value, growth, and momentum [22] - Given the solid growth projections and attractive valuations, RGA is considered a stock to hold [23]

Group 1 - The Conservative Income Portfolio focuses on value stocks with high margins of safety and aims to reduce volatility through well-priced options [1] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1] - Trapping Value offers Covered Calls and Preferred Stock Trader provides Fixed Income solutions, emphasizing capital preservation and high income potential [3][4] Group 2 - The last coverage of Reinsurance Group (NYSE: RGA) resulted in a "hold" rating, with a recommendation to invest in baby bonds instead of common stock, which has shown little movement since then [2] - The analysts at Trapping Value have over 40 years of combined experience in generating options income while focusing on capital preservation [4] - A long position on RGA includes $155 covered calls sold against it, indicating a strategy to generate income from the investment [6]

Core Viewpoint - Reinsurance Group of America (RGA) shares are trading at a discount compared to the Zacks Life Insurance industry, with a forward price-to-book value of 1.19X, lower than the industry average of 1.80X and the Finance sector's 4.09X [1] Group 1: Financial Performance - RGA has a market capitalization of $13.64 billion and an average trading volume of 0.4 million shares over the last three months [1] - RGA's shares have lost 1% over the past year, while the industry has grown by 14.3%, the Finance sector by 16.3%, and the S&P 500 by 10% [5][6] - The company has a decent earnings surprise history, beating estimates in three of the last four quarters with an average surprise of 7.85% [9] Group 2: Growth Projections - The Zacks Consensus Estimate for RGA's 2025 earnings per share indicates a year-over-year increase of 1.9%, with revenues projected at $24.28 billion, reflecting a 6.2% improvement [10] - Earnings have grown by 15.3% over the past five years, outperforming the industry average of 7.8% [11] - The consensus estimates for 2026 earnings per share and revenues suggest increases of 11.4% and 9.4%, respectively, from the 2025 estimates [10] Group 3: Operational Efficiency - RGA's return on invested capital (ROIC) has consistently increased, reaching 6.1% in the trailing 12 months, significantly higher than the industry average of 0.6% [12] - The company has effectively managed capital through share buybacks, dividend payments, and prudent investments, maintaining a free cash flow conversion of over 85% in recent quarters [18][19] Group 4: Market Position and Strategy - RGA is a leader in the traditional U.S. and Latin American markets, with a strong product line and capabilities that contribute to risk diversification [13] - In Canada, RGA is well-positioned with a sizable block of in-force business, anticipating long-term growth in longevity insurance [14] - The company is capitalizing on the growing demand for protection products among the emerging global middle class and aging populations [15] Group 5: Future Outlook - RGA's new business volumes, favorable longevity experience, diversified business model, and effective capital deployment are expected to support long-term growth [20] - The stock has a VGM Score of A, indicating attractive value, growth, and momentum [20] - The recommendation is to hold the stock, given its affordability and potential for future performance [21]

Core Viewpoint - Reinsurance Group of America (RGA) reported mixed financial results for the first quarter of 2025, with adjusted operating earnings per share beating estimates but overall revenues declining significantly year over year Financial Performance - Adjusted operating earnings were $5.66 per share, exceeding the Zacks Consensus Estimate by 6.2%, but down 6% from the previous year [1] - Operating revenues totaled $5.3 billion, missing estimates by 7% and declining 13.7% year over year due to higher net premiums and net investment income [2] - Net premiums increased by 23.9% year over year to $4 billion [2] - Investment income rose 13% from the prior year to $1.2 billion, although average investment yield decreased to 4.64% from 4.7% [3] - Total benefits and expenses decreased 19% year over year to $4.9 billion, attributed to lower claims and other policy benefits [3] Segment Performance - U.S. and Latin America segment reported pre-tax adjusted operating income of $207 million, up 5% year over year [4] - Traditional segment's pre-tax adjusted operating income increased 9.4% to $140 million, with net premiums rising 12% to $1.9 billion [4] - Financial Solutions segment's pre-tax adjusted operating income decreased 25.6% year over year to $67 million [5] - Canada segment's pre-tax adjusted operating income fell 18.9% to $43 million [5] - EMEA segment's pre-tax adjusted operating income dropped 65.2% to $140 million [7] - Asia/Pacific segment's pre-tax adjusted operating income decreased 1.8% to $165 million [8] Capital and Shareholder Returns - As of March 31, 2025, RGA's total assets were $128.2 billion, an 8% increase from the end of 2024 [11] - Book value per share increased 1.6% to $153.80 [11] - The company deployed $418 million into in-force block transactions in the first quarter [13] - A quarterly dividend of 89 cents was declared, payable on May 27 to shareholders of record as of May 13 [13] Future Outlook - RGA estimates adjusted operating return on equity (ROE) to be between 13% and 15%, indicating expectations of continued strong business fundamentals [12]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2025, including balance sheets, income, and cash flow statements, with detailed notes Condensed Consolidated Balance Sheet Highlights (in millions) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $128,210 | $118,675 | | Total Investments | $105,580 | $98,040 | | Cash and cash equivalents | $5,151 | $3,326 | | **Total Liabilities** | $116,718 | $107,769 | | Future policy benefits | $59,836 | $53,368 | | Long-term debt | $5,734 | $5,042 | | **Total Equity** | $11,492 | $10,906 | Condensed Consolidated Statement of Income Highlights (in millions) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $5,260 | $6,337 | | Net premiums | $4,019 | $5,376 | | Net investment income | $1,232 | $961 | | **Total Benefits and Expenses** | $4,891 | $6,065 | | **Income Before Income Taxes** | $369 | $272 | | **Net Income** | $288 | $212 | | **Diluted Earnings Per Share** | $4.27 | $3.16 | Condensed Consolidated Statement of Cash Flows Highlights (in millions) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,429 | $5,736 | | **Net cash used in investing activities** | $(1,695) | $(3,720) | | **Net cash provided by financing activities** | $2,067 | $1,005 | | **Change in cash and cash equivalents** | $1,825 | $2,965 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on earnings per share, equity changes, policy benefits, investment portfolio, derivatives, segment information, and recent financing activities - The company is engaged in providing traditional reinsurance (life, health, disability) and financial solutions (longevity, asset-intensive products, financial reinsurance, capital solutions, PRT, and stable value products)[17](index=17&type=chunk) Earnings Per Share (Q1 2025 vs Q1 2024) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Basic EPS | $4.33 | $3.20 | | Diluted EPS | $4.27 | $3.16 | - Total liability for future policy benefits increased to **$59.8 billion** as of March 31, 2025, from **$47.1 billion** as of March 31, 2024, driven by growth in both Traditional and Financial Solutions segments[48](index=48&type=chunk) - On March 3, 2025, the Company issued **$700 million** of 6.65% fixed-rate reset subordinated debentures due 2055 for general corporate purposes, including funding a pending reinsurance transaction[166](index=166&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, covering consolidated results, segment performance, liquidity, capital resources, and investment portfolio analysis - The company is a leading global provider of life reinsurance and financial solutions, with **$4.0 trillion** of life reinsurance in force and assets of **$128.2 billion** as of March 31, 2025[173](index=173&type=chunk) - In February 2025, RGA Reinsurance Company entered into a Master Transaction Agreement with subsidiaries of Equitable Holdings, Inc. to cede a **75% quota share** of in-force individual life insurance liabilities, representing **$32 billion** on a U.S. statutory basis; the transaction is expected to close mid-2025[140](index=140&type=chunk)[141](index=141&type=chunk) [Consolidated Results of Operations](index=53&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated income before taxes increased in Q1 2025 due to reduced claims and lower investment-related losses, despite a decrease in net premiums primarily from a prior-year PRT transaction Consolidated Results Summary (in millions) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net premiums | $4,019 | $5,376 | | Claims and other policy benefits | $3,822 | $5,132 | | Income before income taxes | $369 | $272 | | Adjusted operating income before income taxes | $485 | $516 | - The decrease in net premiums was primarily due to single premium pension risk transfer (PRT) transactions completed in 2024; excluding this, premiums increased due to organic growth and new business[194](index=194&type=chunk) - The decrease in investment related losses was due to lower unfavorable impacts from portfolio repositioning (**$51 million** loss in Q1'25 vs **$102 million** in Q1'24) and freestanding derivatives[183](index=183&type=chunk) [Results of Operations by Segment](index=57&type=section&id=Results%20of%20Operations%20by%20Segment) This section details segment performance, noting increased operating income in U.S. & Latin America Traditional and EMEA, while Canada and Asia Pacific were impacted by currency and underwriting factors respectively Adjusted Operating Income Before Income Taxes by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | U.S. and Latin America | $207 | $218 | | Canada | $43 | $53 | | Europe, Middle East and Africa | $140 | $115 | | Asia Pacific | $165 | $168 | | Corporate and Other | $(70) | $(38) | - U.S. & Latin America Traditional segment's adjusted operating income increased to **$140 million** from **$128 million** YoY due to new business growth[201](index=201&type=chunk)[202](index=202&type=chunk) - EMEA's adjusted operating income increased to **$140 million** from **$115 million** YoY, driven by increased net premiums and investment income[218](index=218&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity with **$5.8 billion** in outstanding debt, an undrawn **$850 million** credit facility, no share repurchases in Q1 2025, and a declared quarterly dividend - The company has an **$850 million** syndicated revolving credit facility maturing in March 2028, with no cash borrowings or letters of credit outstanding as of March 31, 2025[253](index=253&type=chunk)[256](index=256&type=chunk) - The company did not repurchase any shares under its **$500 million** share repurchase program during Q1 2025; the entire amount remains available[249](index=249&type=chunk)[324](index=324&type=chunk) - In April 2025, the board of directors declared a quarterly dividend of **$0.89 per share**[252](index=252&type=chunk) [Investments](index=70&type=section&id=Investments) Total cash and invested assets grew to **$110.7 billion**, with **76.3%** in fixed maturity securities, **94.4%** investment grade, and an annualized investment yield of **4.64%** Portfolio Composition as of March 31, 2025 (in millions) | Asset Class | Amount | % of Total | | :--- | :--- | :--- | | Fixed maturity securities | $84,507 | 76.3% | | Mortgage loans | $9,331 | 8.4% | | Funds withheld at interest | $5,328 | 4.8% | | Cash and cash equivalents | $5,151 | 4.7% | | Other | $6,414 | 5.8% | | **Total** | **$110,731** | **100.0%** | - As of March 31, 2025, approximately **94.4%** of the total fixed maturity securities portfolio was investment grade[280](index=280&type=chunk)[286](index=286&type=chunk) Investment Yield (Excluding Spread Business) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Annualized investment yield | 4.64% | 4.70% | | Annualized investment yield excluding VII | 4.90% | 4.75% | [Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of March 31, 2025, there have been no material changes to the company's economic exposure to market risk or its Enterprise Risk Management function - There have been no material changes in the Company's economic exposure to market risk or its Enterprise Risk Management function from December 31, 2024[305](index=305&type=chunk) [Controls and Procedures](index=75&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[306](index=306&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[307](index=307&type=chunk) [PART II – OTHER INFORMATION](index=76&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and regulatory matters, but management does not anticipate a material adverse effect on its financial condition or results - Management does not believe that loss contingencies from pending legal, regulatory, and governmental matters will have a material adverse effect on the company's financial condition or results[308](index=308&type=chunk) [Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) This section outlines new risk factors related to the pending Reinsurance Transaction, including completion risks, regulatory conditions, due diligence inaccuracies, counterparty reliance, and integration challenges - The pending Reinsurance Transaction with Equitable Holdings, Inc. is subject to closing conditions, including regulatory approvals, and may not be completed, which could negatively affect the company's business and financial results[309](index=309&type=chunk)[311](index=311&type=chunk) - Risks associated with the transaction include: potential for inaccurate assumptions regarding mortality, lapse, and investment returns; reliance on the counterparty for administration and asset management; and challenges in integrating the large block of business[315](index=315&type=chunk)[317](index=317&type=chunk)[321](index=321&type=chunk) - The company will rely on the counterparty for policy administration and investment advice, exposing it to risks from the counterparty's IT systems, cybersecurity, and operational performance[320](index=320&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares under its **$500 million** share repurchase program in Q1 2025, with the full authorization remaining available - The Company did not repurchase any shares of common stock under its share repurchase program in Q1 2025[323](index=323&type=chunk) - As of March 31, 2025, the entire **$500 million** authorized under the January 2024 share repurchase program remains available[324](index=324&type=chunk) [Other Information](index=79&type=section&id=Item%205.%20Other%20Information) During Q1 2025, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements - During Q1 2025, no directors or executive officers adopted or terminated any Rule 10b5-1(c) trading plan or any non-Rule 10b5-1 trading arrangement[326](index=326&type=chunk) [Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q report, including corporate governance documents, debt indentures, employee agreements, and CEO/CFO certifications - The report includes an index of exhibits, listing documents such as the Tenth Supplemental Indenture, forms of employee stock agreements, and CEO/CFO certifications[328](index=328&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted operating earnings of $5.66 per share, with an adjusted operating return on equity of 15% for the quarter, indicating a strong start to the year [7][24] - The pretax adjusted operating income for the quarter was $485 million, with a favorable economic impact from biometric claims experience amounting to $196 million [24][29] - Consolidated net premiums increased by 13% year over year, with traditional business premium growth at 11.2% on a constant currency basis [28][29] Business Line Data and Key Metrics Changes - In force transactions saw $418 million of capital deployed, including a significant deal with Manulife and two smaller transactions in Asia [10][25] - The U.S. and Latin America Traditional segments reported favorable individual life claims experience, driven by lower than expected large claims [33] - The Asia Traditional segment experienced strong new treaties, with significant contributions from the Creation Re product development initiatives [11][12] Market Data and Key Metrics Changes - The Hong Kong life insurance market achieved record sales in 2024, increasing over 21% from 2023, driven by factors such as the aging population and high net worth management [13] - The U.S. market showed strong claims experience, particularly due to lower than expected large claims, while favorable economic experience was noted across all geographic regions [30][33] - The U.K. market is expected to see strong levels of PRT sales, with local teams positioned to leverage their expertise [17][18] Company Strategy and Development Direction - The company emphasizes its biometric expertise as a key differentiator in pricing, underwriting, and risk management, which has led to strong claims experience [9][20] - The strategic focus on the Creation Re model aims to foster exclusive partnerships and innovative product development, contributing to a significant portion of new business [12][20] - The company remains optimistic about its growth prospects, citing a disciplined approach to risk management and capital allocation [22][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties without losing momentum, highlighting a strong capital position and asset portfolio [8][22] - The company anticipates a recovery in the PRT market in the second half of the year, viewing current market volatility as a temporary pause [59] - Management remains committed to disciplined capital management and strategic partnerships to drive future growth [22][39] Other Important Information - The effective tax rate for the quarter was 21.9%, below the expected range, primarily due to U.S. tax benefits from foreign taxes paid [27] - The company reported a non-spread portfolio yield of 4.9%, up 10 basis points from the previous quarter, while variable investment income was below expectations by approximately $30 million [25][37] - Book value per share increased to $154.6, representing a compounded annual growth rate of 9.8% since the beginning of 2021 [38] Q&A Session Summary Question: Understanding mortality experience in the U.S. - Management noted that the strong claims experience was driven by lower than expected large claims, with some volatility expected in smaller claims consistent with an elevated flu season [42][43] Question: Clarification on the Equitable deal and its potential for ROE - Management explained that the transaction allows for repricing based on extensive data and experience, which is expected to enhance returns despite the challenges faced by Equitable [48][49] Question: Current pipeline of transactions and opportunities - Management described the pipeline as attractive, emphasizing the quality of partnerships and the strategic fit within their business model [54][55] Question: Trends in new money rates and investment opportunities - Management indicated that new money rates have remained stable, with ongoing opportunities in both public and private asset markets [62][66] Question: Competitive conditions across various markets - Management stated that competition remains manageable, with a consistent focus on life and health reinsurance, unaffected by fluctuations in the P&C market [72][80]