Financial Data and Key Metrics Changes - The company reported operating EPS of $4.72 per share, with an adjusted operating return on equity of 14.3% for the trailing twelve months, aligning with intermediate term targets [7][22] - The pretax adjusted operating income for the quarter was $421 million, reflecting a decrease due to claims volatility in U.S. Individual Life and unfavorable claims in the Healthcare Excess business [22][24] - Economic claims experience was lower than expected by $256 million, leading to a $158 million unfavorable financial impact for the current period [28] Business Line Data and Key Metrics Changes - U.S. Individual Life experienced a higher level of large claims, offsetting favorable results from Q1, while the Healthcare Excess business faced unfavorable claims consistent with market trends [7][8] - The traditional business premiums rose by 11% on a constant currency basis for the first six months of the year, indicating strong growth across regions [11][34] - The U.S. Financial Solutions results were higher than expected due to increased variable investment income and higher investment yields [38] Market Data and Key Metrics Changes - In Asia, traditional business had a robust quarter with significant new treaties, particularly in Hong Kong, which saw a 43% increase in life insurance sales [15][16] - The U.K. PRT market was active, with several attractive transactions closed, positioning the company as a market leader [18] - The Asia Financial Solutions segment closed several transactions in Japan, Korea, and Hong Kong, benefiting from regulatory changes [17] Company Strategy and Development Direction - The company aims to leverage its strong capital position to fund growth and return capital to shareholders through dividends and share repurchases [9][35] - A focus on creation REIT allows the company to exceed targets for exclusive arrangements, enhancing pricing returns and value creation [12][21] - The company is committed to maintaining strong risk discipline and selectively pursuing business that aligns with its risk appetite [13][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business prospects, citing a strong pipeline and the ability to drive improved returns for shareholders [21][43] - The company anticipates that the majority of the Healthcare Excess block will be repriced by January 2026, expecting improvements in results moving into 2026 [30][63] - Management acknowledged the volatility in claims experience but emphasized that it does not indicate a material trend [31][56] Other Important Information - The effective tax rate for the quarter was 25.2%, above the expected range, primarily due to valuation allowances on foreign tax credits [25] - The company announced a 4.5% increase in quarterly dividends to $0.93 per share [36] Q&A Session Summary Question: Can you talk about the additional credit on the LifeBlock? - Management indicated that the value of in-force credits was a result of extensive analysis and reflects the current book of business without changes in actuarial assumptions [48][49] Question: Was there a significant lag effect from Q1 in individual life experience? - Management noted that while there was some volatility, the year-to-date results for U.S. Individual Life were broadly in line with expectations [54][56] Question: Can you elaborate on the health experience in the quarter? - Management explained that the negative experience was primarily driven by higher claims costs in the healthcare access line, which is expected to improve with implemented rate increases [62][63] Question: What are the priorities for using excess capital? - Management emphasized a balanced approach, aiming for a total shareholder return of 20% to 30% of after-tax operating earnings through dividends and share repurchases [72][76] Question: Is there a practical limitation to the value of in-force credit? - Management confirmed that there are limits to the amount of value of in-force credit that can be recognized, but opportunities for further recognition exist [108] Question: How does the company plan to address volatility in results? - Management acknowledged the potential for retrocession to manage volatility but emphasized the importance of balancing this with business growth opportunities [110]

Financial Data and Key Metrics Changes - The company reported operating EPS of $4.72 per share, with an adjusted operating return on equity of 14.3% for the trailing twelve months, which aligns with intermediate-term targets [6][23] - The pretax adjusted operating income for the quarter was $421 million, reflecting a decrease due to claims volatility in U.S. Individual Life and unfavorable claims in the Healthcare Excess business [23][24] - Economic claims experience was lower than expected by $256 million, leading to a $158 million unfavorable financial impact for the current period [28][29] Business Line Data and Key Metrics Changes - U.S. Individual Life experienced a higher level of large claims, offsetting favorable results from Q1, while the Healthcare Excess business faced unfavorable claims consistent with market trends [6][7] - The traditional business premium growth was 11% year-to-date on a constant currency basis, with strong growth in the U.S., EMEA, and Asia [35] - The company achieved a record quarter for individual underwriting cases, indicating strong performance in the U.S. Traditional area [20] Market Data and Key Metrics Changes - In Asia, traditional business saw robust performance with a 43% increase in life insurance sales in Hong Kong for the first quarter [16] - The U.S. PRT market showed increased activity at the jumbo end, with expectations for a pickup in the second half of the year [19] - Claims in Canada and EMEA were modestly unfavorable, while APAC experience was favorable [32] Company Strategy and Development Direction - The company is focused on capital optimization and has increased excess capital to $3.8 billion, providing flexibility for growth and shareholder returns [24][36] - The strategic focus includes building a comprehensive asset management platform and maintaining strong risk discipline [14][22] - The company aims to balance capital deployment into business growth with returning capital to shareholders through dividends and share repurchases, targeting a payout ratio of 20% to 30% of after-tax operating earnings [37][77] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business prospects, citing a proven strategy that has stood the test of time [22][44] - The company anticipates improvements in claims experience and margins in the Healthcare Access business as pricing actions are implemented [31][64] - Management acknowledged the volatility in claims experience but emphasized that year-to-date results are broadly in line with expectations [57][72] Other Important Information - The effective tax rate for the quarter was 25.2%, above the expected range, primarily due to valuation allowances on foreign tax credits [26] - The company announced a 4.5% increase in quarterly dividends to $0.93 per share [37] Q&A Session Summary Question: Can you talk about the additional credit on the LifeBlock? - Management indicated that the value of in-force credits was a result of extensive analysis and reflects the current book of business without changes in actuarial assumptions [48][49] Question: Can you unpack the individual life experience in the quarter? - Management noted that the claims experience should be reviewed over longer periods, and while Q2 saw elevated large claims, year-to-date results are in line with expectations [55][56] Question: Can you discuss the health experience in the quarter? - Management explained that the negative experience in the Healthcare Access line is driven by higher claims costs, but rate increases have been implemented and margins are expected to improve [63][64] Question: What are the priorities for using excess capital? - Management stated that they aim to balance capital deployment into business growth with returning capital to shareholders, with a focus on share buybacks being opportunistic [75][77] Question: Is there a practical limitation to the value of in-force credit? - Management confirmed that there are limits to the amount of value of in-force credit that can be recognized, but they believe there are opportunities for further recognition [106][108] Question: How does the company plan to address volatility in results? - Management acknowledged the potential for volatility but emphasized their focus on long-term growth and the importance of maintaining appropriate reserves [110][112]

Financial Performance - Adjusted operating income, excluding notable items, was $4.72 per diluted share[15] - The trailing twelve-month adjusted operating ROE, excluding notable items, was 14.3%[15] - The company's total adjusted operating income before taxes was $421 million[20] Capital Management - Estimated deployable capital is $3.4 billion[15] - Estimated excess capital increased to $3.8 billion, or $2.3 billion pro forma for the EQH transaction[15] - The company has access to an $850 million syndicated credit facility[56] Business Growth - Traditional premium growth was 11.0% year-to-date on a constant currency basis[15] - U S and Latin America Traditional premiums increased by 11.2% to $3.940 billion[23] - Global Financial Solutions premiums decreased by 67.8% to $866 million, primarily due to a decrease in single premium pension risk transfer transactions[23] Investment Portfolio - Assets under management are approximately $115 billion[30] - Over 94% of fixed maturity securities are rated investment-grade[30] - The Q2 new money rate was 6.53%[38]

Core Insights - Reinsurance Group (RGA) reported $5.64 billion in revenue for Q2 2025, a 9.6% year-over-year increase, but fell short of the Zacks Consensus Estimate of $5.71 billion, resulting in a surprise of -1.09% [1] - The company's EPS for the quarter was $4.72, down from $5.48 a year ago, with an EPS surprise of -15.41% compared to the consensus estimate of $5.58 [1] Financial Performance Metrics - Net premiums from U.S. and Latin America Traditional were $2.02 billion, exceeding the average estimate of $1.95 billion [4] - Other Revenues from Corporate and Other were $18 million, surpassing the average estimate of $11.5 million [4] - Net premiums from U.S. and Latin America Financial Solutions reported a loss of $5 million, significantly below the average estimate of $245.13 million [4] - Net investment income from U.S. and Latin America Financial Solutions was $371 million, exceeding the average estimate of $348.21 million [4] - Total net premiums reported were $4.15 billion, below the average estimate of $4.32 billion, representing a year-over-year change of +5.9% [4] - Other revenues totaled $84 million, significantly lower than the average estimate of $109.95 million, reflecting a year-over-year decline of -42.9% [4] - Net investment income overall was $1.41 billion, surpassing the five-analyst average estimate of $1.22 billion [4] Stock Performance - Shares of Reinsurance Group have returned -2.9% over the past month, contrasting with the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

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]