Group 1 - The Reinsurance Group of America (RGA) has underperformed in the past year, with a loss of approximately 11% in share value [1] - RGA is actively pursuing growth through significant deals, including partnerships with firms like Equitable [1]

Core Insights - Reinsurance Group (RGA) reported quarterly earnings of $6.37 per share, exceeding the Zacks Consensus Estimate of $5.8 per share, and showing an increase from $6.13 per share a year ago, resulting in an earnings surprise of +9.83% [1] - The company generated revenues of $6.19 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.95% and up from $5.73 billion year-over-year [2] - RGA's stock has underperformed the market, losing about 11.2% since the beginning of the year compared to the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $5.52 on revenues of $6.33 billion, while for the current fiscal year, the estimate is $21.77 on revenues of $23.46 billion [7] - The estimate revisions trend for RGA was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Insurance - Life Insurance industry, to which RGA belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Brighthouse Financial (BHF), is expected to report quarterly earnings of $5.09 per share, reflecting a year-over-year change of +27.6% [9]

Financial Performance - Net premiums for Q3 2025 were $4,280 million, a decrease of $111 million compared to Q2 2025 and a decline of $1,237 million year-to-date from $13,687 million in 2024[7]. - Net income available to RGA's shareholders increased to $253 million in Q3 2025, up from $180 million in Q2 2025, and up $150 million year-to-date compared to $569 million in 2024[7]. - Adjusted operating income for Q3 2025 was $310 million, slightly down from $315 million in Q2 2025, and down $5 million year-to-date from $1,008 million in 2024[7]. - Total revenues for the three months ended September 30, 2025, were $6,204 million, an increase of 9.9% compared to $5,651 million in the prior year[9]. - Year-to-date revenues reached $17,063 million, a slight increase of 1.2% compared to $16,866 million in the previous year[9]. - The company reported a year-to-date revenue of $1,188 million, which is $28 million higher than the same period last year[28]. - Total revenues for the three months ended September 30, 2025, were $956 million, an increase of $137 million or 16.7% compared to the prior quarter[44]. Shareholder Returns - Total returned to shareholders in Q3 2025 was $136 million, significantly higher than $59 million in Q2 2025, and up $84 million year-to-date from $170 million in 2024[7]. - Shareholders' dividends paid increased to $61 million in Q3 2025, up from $59 million in Q2 2025, and up $9 million year-to-date from $170 million in 2024[7]. - RGA, Inc. shareholders' equity reached $12,978 million as of September 30, 2025, up from $12,053 million at June 30, 2025, reflecting a 7.7% increase[96]. - Book value per share increased to $197.52 as of September 30, 2025, compared to $182.37 at June 30, 2025, a rise of 8.3%[97]. Investment Performance - Net investment income rose to $1,475 million, up 24.2% from $1,188 million in the same quarter last year[9]. - The company reported net investment income of $282 million for Q3 2025, an increase of $56 million compared to the same quarter last year[18]. - Total assets increased to $152.003 billion as of September 30, 2025, up from $120.258 billion a year earlier, representing a growth of 26.4%[15]. - Total investments rose to $127.604 billion as of September 30, 2025, compared to $98.236 billion a year ago, marking a 29.9% increase[15]. - The annualized investment yield for the three months ended September 30, 2025, was 4.73%, down 35 basis points from 5.08% in the prior year quarter[62]. Claims and Benefits - Adjusted claims and other policy benefits were $4,356 million, an increase of 5.8% from $4,116 million in the prior year[9]. - The company reported a total benefits and expenses of $5,884 million, which is a 8.2% increase compared to $5,437 million in the same quarter last year[9]. - The loss ratio for Q3 2025 was 91.5%, a slight improvement from 91.9% in Q2 2025, while the year-to-date loss ratio was 93.9%, up from 90.2% in the prior year[18]. - Adjusted claims and other policy benefits totaled $511 million, a decrease of 22% from $654 million in the same quarter last year[22]. - Total benefits and expenses amounted to $970 million, an increase of 47% compared to $923 million in the same quarter last year[22]. Segment Performance - Income before income taxes for U.S. and Latin America Traditional decreased to $123 million in Q3 2025 from $149 million in Q2 2025, a decline of 17.4%[84]. - Income before income taxes for Canada Traditional increased to $41 million in Q3 2025, compared to $32 million in Q2 2025, an increase of 28.1%[88]. - Income before income taxes for Asia Pacific Traditional increased to $140 million in Q3 2025, up from $102 million in Q2 2025, representing a 37.3% increase[92]. - The Asia Pacific segment showed a strong performance with total adjusted operating income of $209 million, an increase of $146 million compared to $63 million in the prior year quarter[56]. Notable Items and Adjustments - The notable items impacted adjusted operating income by a reduction of $39 million in Q3 2025, compared to an increase of $53 million in Q3 2024[84]. - Adjusted operating income excluding notable items for U.S. and Latin America Traditional was $97 million in Q3 2025, down from $140 million in Q2 2025, representing a decrease of 30.7%[84]. - Adjusted operating income excluding notable items was $424 million in Q3 2025, compared to $315 million in Q2 2025, and down from $1,176 million year-to-date in 2024[7]. Credit and Securities - The allowance for credit losses for total fixed maturity securities was $161 million as of September 30, 2025, compared to $98 million on December 31, 2024[67]. - The total fixed maturity securities below amortized cost reached $45,788 million as of September 30, 2025, with unrealized losses of $6,512 million[74]. - The total value of corporate fixed maturity securities represented 67.5% of the total fair value as of September 30, 2025[67]. - The total amount of securities rated AAA/AA/A was $63,266 million, accounting for 63.5% of the total fair value as of September 30, 2025[70].

Core Insights - FoxPath Capital Partners has announced a long-term strategic partnership with RGA, a leading global reinsurer [1] Company Summary - FoxPath Capital Partners is an independent credit secondaries firm [1] - RGA is recognized as a leading global reinsurer [1] Industry Summary - The partnership signifies a strategic move within the insurance and reinsurance sectors, potentially enhancing capabilities in credit secondaries [1]

Core Points - The International Insurance Society (IIS) has announced the three finalists for the 2025 RGA Leaders of Tomorrow award [1] Group 1 - The award recognizes emerging leaders in the insurance industry [1] - The finalists represent significant contributions to the field of insurance [1] - The announcement highlights the importance of leadership development within the insurance sector [1]

Core Viewpoint - Reinsurance Group of America (RGA) is currently experiencing a short-term bearish trend as its shares are trading below the 50-day simple moving average (SMA) [1] Group 1: Price Performance - RGA shares have declined by 11.4% year-to-date, contrasting with the industry's gain of 1.3% [2] - The Finance sector and the Zacks S&P 500 Composite have increased by 13.9% and 12.8%, respectively, during the same period [2] Group 2: Valuation Metrics - RGA shares are trading at a price-to-book value of 1.03X, which is lower than the industry average of 1.93X, indicating they are affordable [4] - The company has a market capitalization of $12.5 billion and an average trading volume of 0.4 million shares over the last three months [4] Group 3: Revenue and Earnings Projections - The Zacks Consensus Estimate for RGA's 2025 revenues is $23.5 billion, reflecting a year-over-year growth of 3% [6] - The current-year earnings estimate is $22.40 per share, while the 2026 earnings per share and revenues are projected to increase by 14.6% and 10.5%, respectively, from 2025 estimates [9][10] Group 4: Business Strategy and Growth Drivers - RGA's in-force portfolio and product expansion are expected to support long-term earnings diversification [8] - The company benefits from a balanced mix of organic initiatives and transactional opportunities, with a strong foundation in its individual mortality business [13] - Advancements in product design, underwriting, analytics, and innovation are anticipated to drive growth [14] Group 5: Investment Income and Financial Performance - RGA's net investment income has shown a compound annual growth rate (CAGR) of 17.2% from 2016 to 2024, supported by a larger asset base and higher risk-free rates [15] - In the second quarter, income after expenses rose by 30.1% year-over-year to $1.4 billion, with an average yield increase of 66 basis points [15] Group 6: Debt and Financial Flexibility - RGA's long-term borrowings reached $5.73 billion as of June 30, 2025, marking a 13.7% increase from the end of 2024 [17] - The debt-to-capital ratio for the trailing 12 months stood at 47.22, significantly above the industry average of 16.79, indicating elevated leverage [17] Group 7: Shareholder Value and Dividends - RGA has increased its dividend five times over the past five years, resulting in a five-year annualized growth rate of 6.3% and a current payout ratio of 17% [18] Group 8: Analyst Sentiment - The Zacks Consensus Estimate for 2025 earnings has decreased by 1.5% in the past 30 days, while the estimate for 2026 earnings has increased by 0.4% [10] - The average price target from 10 analysts suggests a potential upside of 22.3% from the last closing price, with a target of $235 per share [12]

Core Insights - Reinsurance Group of America (RGA) shares have declined by 11.1% year-to-date, contrasting with a 2.5% decline in the industry, while the Finance sector and the S&P 500 have gained 10.6% and 9.5%, respectively [1][7] - RGA has a market capitalization of $12.6 billion, with an average trading volume of 0.4 million shares over the last three months [1] Valuation and Market Position - RGA shares are trading at a price-to-book value of 1.03X, which is lower than the industry average of 1.66X, indicating that RGA shares are relatively affordable [4] - The average target price for RGA, based on estimates from 11 analysts, is $239 per share, suggesting a potential upside of 28.3% from the last closing price [5] Financial Performance - In Q2, RGA's net investment income surged by 30.1% to $1.4 billion, with yields increasing by 66 basis points to 5.3% [7][14] - The Zacks Consensus Estimate for RGA's 2025 revenues is $23.4 billion, reflecting a year-over-year improvement of 2.5% [9] - Current-year earnings are estimated at $22.73 per share, up 0.7% from the previous year, while 2026 earnings per share and revenues are projected to increase by 9.8% and 12.5%, respectively, from 2025 estimates [9] Analyst Sentiment and Estimates - Analysts have recently lowered their earnings estimates for RGA for 2025 and 2026 by 1.5% and 0.5%, respectively, over the past 30 days [10] - The adjusted operating return on equity (ROE) for Q2 2025 has decreased by 100 basis points to 14.3%, with trailing 12-month ROE falling by 320 basis points year-over-year to 12.6% [16] Market Leadership and Growth Potential - RGA leads the reinsurance markets in the U.S., Latin America, and Canada, with a strong focus on individual mortality segments that provide stable earnings and capital generation [11][12] - The company benefits from a sizable in-force business that supports steady earnings and has seen long-term growth in net investment income, with a 17.2% compound annual growth rate (CAGR) from 2016 to 2024 [14] Challenges and Financial Health - Rising expenses from higher claims, interest credited, operating costs, and interest expenses could pressure margins [15] - Long-term debt has increased by 13.7% since the end of 2024, reaching $5.73 billion, which has pushed the total debt-to-capital ratio up by 50 basis points to 32.1 [16]

Core Insights - Reinsurance Group of America (RGA) reported second-quarter 2025 adjusted operating earnings of $4.72 per share, missing the Zacks Consensus Estimate by 15.4% and decreasing 13.9% from the previous year [1][9] - Operating revenues reached $5.6 billion, a 9.6% year-over-year increase, but fell short of consensus estimates by 1.1% [2][9] - Total benefits and expenses rose 14.1% year over year to $5.2 billion, driven by higher claims and policy benefits [3][9] Segment Performance - **U.S. and Latin America**: Pre-tax adjusted operating income decreased 59% year over year to $101 million, with net premiums increasing 10.5% to $2 billion [4] - **Canada**: Pre-tax adjusted operating income increased 12.1% year over year to $37 million, with net premiums rising 4% to $339 million [5][6] - **EMEA**: Pre-tax adjusted operating income climbed 57.6% year over year to $134 million, with premiums increasing 15.3% to $573 million [7] - **Asia/Pacific**: Pre-tax adjusted operating income rose 6.5% year over year to $181 million, with premiums increasing 15.3% to $816 million [10] Financial Metrics - Net premiums totaled $4.2 billion, a 5.9% year-over-year increase [3] - Investment income increased 30.1% from the prior year to $1.4 billion, with an average investment yield of 5.3%, up 66 basis points [3] - As of June 30, 2025, total assets were $133.5 billion, a 12.5% increase from the end of 2024, and book value per share rose 5.2% to $155.87 [12] Capital Deployment - RGA deployed $276 million for in-force block transactions and declared a quarterly dividend of 93 cents, payable on August 26, 2025 [13]

Company Overview - Reinsurance Group (RGA) is headquartered in Chesterfield and has experienced a price change of -16.99% this year [3] - The company currently pays a dividend of $0.89 per share, resulting in a dividend yield of 2.01%, which is higher than the Insurance - Life Insurance industry's yield of 1.81% and the S&P 500's yield of 1.49% [3] Dividend Analysis - RGA's current annualized dividend of $3.56 has increased by 2.3% from the previous year [4] - Over the past 5 years, RGA has raised its dividend 4 times, achieving an average annual increase of 6.28% [4] - The company's current payout ratio is 17%, indicating that it pays out 17% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for RGA's earnings in 2025 is $23.10 per share, with an expected increase of 2.35% from the previous year [5] - The company is viewed as a strong dividend play, particularly appealing to income investors [6] Investment Considerations - RGA is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [6]

PART I – FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements show significant asset growth to $133.5 billion, driven by investments, with a rise in six-month net income despite a slight Q2 decline [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects substantial growth in total assets to $133.5 billion, primarily from increased investments and corresponding liabilities Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total investments | $109,901 | $98,040 | | Cash and cash equivalents | $5,416 | $3,326 | | **Total assets** | **$133,479** | **$118,675** | | **Liabilities** | | | | Future policy benefits | $63,531 | $53,368 | | Interest-sensitive contract liabilities | $37,158 | $35,095 | | Long-term debt | $5,734 | $5,042 | | **Total liabilities** | **$121,336** | **$107,769** | | **Equity** | | | | Total RGA, Inc. shareholders' equity | $12,053 | $10,816 | | **Total equity** | **$12,143** | **$10,906** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement details a year-over-year increase in six-month net income, despite lower net premiums and a quarterly profit dip Condensed Consolidated Income Statement Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net premiums | $4,151 | $3,920 | $8,170 | $9,296 | | Net investment income | $1,408 | $1,082 | $2,640 | $2,043 | | Total revenues | $5,599 | $4,878 | $10,859 | $11,215 | | Total benefits and expenses | $5,258 | $4,609 | $10,149 | $10,674 | | Income before income taxes | $341 | $269 | $710 | $541 | | Net income available to RGA, Inc. shareholders | $180 | $203 | $466 | $413 | | Diluted earnings per share | $2.70 | $3.03 | $6.97 | $6.19 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements indicate a significant decrease in operating cash flow, offset by lower cash used in investing activities Condensed Consolidated Cash Flow Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,249 | $6,703 | | Net cash used in investing activities | $(2,872) | $(7,176) | | Net cash provided by financing activities | $2,607 | $2,225 | | **Change in cash and cash equivalents** | **$2,090** | **$1,626** | | **Cash and cash equivalents, end of period** | **$5,416** | **$4,596** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes clarify the company's business scope and confirm the financial statements adhere to U.S. GAAP for interim reporting - The Company is an insurance holding company providing traditional reinsurance (life, health, disability, critical illness) and financial solutions (longevity, asset-intensive products, financial reinsurance, capital solutions, PRT, stable value products)[18](index=18&type=chunk) - The financial statements are prepared in conformity with U.S. GAAP for interim reporting and should be read with the 2024 Annual Report on Form 10-K[19](index=19&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A details decreased adjusted operating income due to unfavorable claims, offset by investment gains, and highlights a major upcoming reinsurance transaction - The company is a leading global provider of life reinsurance and financial solutions, with **$4.1 trillion of life reinsurance in force** and assets of **$133.5 billion** as of June 30, 2025[185](index=185&type=chunk) - On July 31, 2025, RGA Re executed a significant reinsurance transaction with subsidiaries of Equitable Holdings, Inc., assuming a 75% quota share of approximately $32 billion in U.S. statutory individual life insurance liabilities, which is estimated to add **$11 billion to $12 billion** in assets and liabilities[149](index=149&type=chunk)[181](index=181&type=chunk) Reconciliation of Income Before Income Taxes to Adjusted Operating Income (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income before income taxes | $341 | $269 | $710 | $541 | | Adjustments | $80 | $222 | $196 | $466 | | **Adjusted operating income before income taxes** | **$421** | **$491** | **$906** | **$1,007** | [Consolidated Results of Operations](index=58&type=section&id=MD&A_Consolidated_Results) Consolidated results show higher pre-tax income due to lower investment losses, though adjusted operating income declined from unfavorable claims experience - For the six months ended June 30, 2025, **pre-tax income increased to $710 million** from $541 million year-over-year, driven by a decrease in investment-related losses and the non-recurrence of a large non-economic loss from a PRT transaction in 2024[195](index=195&type=chunk) - **Adjusted operating income before tax decreased** for both the three and six-month periods ended June 30, 2025, primarily due to unfavorable claims experience in the U.S. Traditional segment and higher operating costs, partially offset by increased investment income[205](index=205&type=chunk)[207](index=207&type=chunk) - Net premiums decreased for the six-month period due to large single-premium Pension Risk Transfer (PRT) transactions in 2024, however, **life reinsurance in force grew to $4.1 trillion** from $3.8 trillion year-over-year[209](index=209&type=chunk) [Results of Operations by Segment](index=62&type=section&id=MD&A_Segment_Results) Segment results reveal mixed performance, with a significant decline in the U.S. & Latin America segment offset by strong growth in