RGA(RGA) - 2025 Q1 - Quarterly Results

Consolidated Financials This section details the company's consolidated financial performance, encompassing key highlights, GAAP income statements, and balance sheet positions Financial Highlights The company's Q1 2025 financial highlights show a mixed performance with a decrease in net premiums and adjusted operating income year-over-year, but an increase in net income available to shareholders and significant growth in book value per share and assumed life reinsurance in force Consolidated Financial Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $4,019 | $5,376 | $(1,357) | | Net income available to RGA's shareholders | $286 | $210 | $76 | | Adjusted operating income | $378 | $401 | $(23) | | Diluted earnings per share (Net income) | $4.27 | $3.16 | $1.11 | | Diluted earnings per share (Adjusted operating income) | $5.66 | $6.02 | $(0.36) | | Book value per share | $172.53 | $143.92 | $28.61 | | Assumed life reinsurance in force (in billions) | $3,950.9 | $3,729.8 | $221.1 | | Assumed new business production (in billions) | $131.7 | $109.1 | $22.6 | Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations) The consolidated GAAP income statement for Q1 2025 shows a decrease in total revenues primarily due to lower net premiums, but an increase in net investment income. Despite a decline in adjusted operating income before income taxes, GAAP income before income taxes improved year-over-year Consolidated GAAP Income Statement Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total revenues | $5,260 | $6,337 | $(1,077) | | Net investment income | $1,232 | $961 | $271 | | Total benefits and expenses | $4,891 | $6,065 | $(1,174) | | Income before income taxes | $369 | $272 | $97 | | Adjusted operating income before income taxes | $485 | $516 | $(31) | | Foreign currency effect on Net premiums | $(60) | $(12) | $(48) | Consolidated Balance Sheets As of March 31, 2025, the company's consolidated balance sheet reflects significant growth in total assets and total investments compared to the prior year, driven by an increase in fixed maturity securities. Total liabilities also increased, while cash and cash equivalents saw a slight decrease Consolidated Balance Sheet Highlights (March 31, 2025 vs. March 31, 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total assets | $128,210 | $106,000 | $22,210 | | Total investments | $105,580 | $84,514 | $21,066 | | Cash and cash equivalents | $5,151 | $5,935 | $(784) | | Total liabilities | $116,718 | $96,442 | $20,276 | | Total RGA, Inc. shareholders' equity | $11,402 | $9,468 | $1,934 | Segment Summaries of Adjusted Operating Income Statements This section provides a detailed breakdown of adjusted operating income performance across the company's diverse geographic and business segments U.S. and Latin America Traditional The U.S. and Latin America Traditional segment reported an increase in net premiums and adjusted operating income before income taxes in Q1 2025 compared to the prior year, despite a slight rise in the loss ratio. Assumed life reinsurance in force also grew significantly U.S. and Latin America Traditional Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $1,921 | $1,715 | $206 | | Adjusted operating income before income taxes | $140 | $128 | $12 | | Loss ratio | 91.0% | 90.4% | 0.6% | | Assumed Life Reinsurance In Force (in billions) | $1,840.6 | $1,709.1 | $131.5 | U.S. and Latin America Financial Solutions The U.S. and Latin America Financial Solutions segment experienced a substantial decrease in net premiums in Q1 2025, leading to a decline in adjusted operating income before income taxes. However, policyholder account balances for fixed annuities and payout annuities showed growth U.S. and Latin America Financial Solutions Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $109 | $1,916 | $(1,807) | | Adjusted operating income before income taxes | $67 | $90 | $(23) | | Fixed annuities (deferred) account balances | $10,299 | $9,981 | $318 | | Payout annuities (Future policy benefits) | $8,840 | $6,503 | $2,337 | Canada Traditional The Canada Traditional segment saw stable net premiums but a decrease in adjusted operating income before income taxes in Q1 2025, accompanied by an increase in the loss ratio. Assumed life reinsurance in force slightly declined Canada Traditional Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $319 | $318 | $1 | | Adjusted operating income before income taxes | $32 | $46 | $(14) | | Loss ratio | 93.4% | 88.1% | 5.3% | | Assumed Life Reinsurance In Force (in billions) | $478.6 | $488.0 | $(9.4) | Canada Financial Solutions The Canada Financial Solutions segment demonstrated strong growth in Q1 2025, with significant increases in both net premiums and adjusted operating income before income taxes. Assumed life reinsurance in force also saw a substantial increase Canada Financial Solutions Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $52 | $23 | $29 | | Adjusted operating income before income taxes | $11 | $7 | $4 | | Assumed Life Reinsurance In Force (in billions) | $6.0 | $0 | $6.0 | Europe, Middle East and Africa Traditional The Europe, Middle East and Africa Traditional segment reported growth in net premiums and adjusted operating income before income taxes in Q1 2025. The loss ratio increased, while assumed life reinsurance in force also expanded EMEA Traditional Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $540 | $496 | $44 | | Adjusted operating income before income taxes | $50 | $38 | $12 | | Loss ratio | 88.0% | 84.5% | 3.5% | | Assumed Life Reinsurance In Force (in billions) | $1,036.7 | $985.1 | $51.6 | Europe, Middle East and Africa Financial Solutions The Europe, Middle East and Africa Financial Solutions segment showed positive performance in Q1 2025, with increases in both net premiums and adjusted operating income before income taxes compared to the prior year EMEA Financial Solutions Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $189 | $146 | $43 | | Adjusted operating income before income taxes | $90 | $77 | $13 | Asia Pacific Traditional The Asia Pacific Traditional segment reported an increase in net premiums in Q1 2025, but a slight decrease in adjusted operating income before income taxes. The loss ratio increased, while assumed life reinsurance in force continued to grow Asia Pacific Traditional Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $777 | $716 | $61 | | Adjusted operating income before income taxes | $106 | $109 | $(3) | | Loss ratio | 84.0% | 82.0% | 2.0% | | Assumed Life Reinsurance In Force (in billions) | $561.1 | $528.9 | $32.2 | Asia Pacific Financial Solutions The Asia Pacific Financial Solutions segment achieved substantial growth in net premiums in Q1 2025, with adjusted operating income before income taxes remaining stable year-over-year. Assumed life reinsurance in force also saw a significant increase Asia Pacific Financial Solutions Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net premiums | $112 | $46 | $66 | | Adjusted operating income before income taxes | $59 | $59 | $0 | | Assumed Life Reinsurance In Force (in billions) | $18.4 | $8.5 | $9.9 | Corporate and Other The Corporate and Other segment reported an increased adjusted operating loss before income taxes in Q1 2025 compared to the prior year Corporate and Other Segment Highlights (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Adjusted operating loss before income taxes | $(70) | $(38) | $(32) | Summary of Segment Adjusted Operating Income A consolidated view of adjusted operating income before income taxes across all segments shows a slight decrease in total consolidated adjusted operating income before income taxes in Q1 2025. While EMEA segments saw growth, U.S. & Latin America, Canada, and Asia Pacific segments experienced slight declines Summary of Segment Adjusted Operating Income Before Income Taxes (Q1 2025 vs. Q1 2024) | Segment | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | U.S. and Latin America | $207 | $218 | $(11) | | Canada | $43 | $53 | $(10) | | Europe, Middle East and Africa | $140 | $115 | $25 | | Asia Pacific | $165 | $168 | $(3) | | Corporate and Other | $(70) | $(38) | $(32) | | Consolidated adjusted operating income before income taxes | $485 | $516 | $(31) | Investments This section details the company's investment portfolio, encompassing cash and invested assets, fixed maturity securities, and related gains and losses Cash and Invested Assets and Investment Income and Yield Summary Total cash and invested assets increased significantly in Q1 2025, primarily driven by growth in fixed maturity securities. Net investment income also rose, although the overall annualized investment yield slightly decreased, while the yield excluding variable investment income improved Cash and Invested Assets & Investment Income Summary (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total cash and invested assets | $110,731 | $90,449 | $20,282 | | Fixed maturity securities, available-for-sale | $84,507 | $65,827 | $18,680 | | Net investment income | $502 | $444 | $58 | | Annualized investment yield | 4.64% | 4.70% | (6) bps | | Annualized investment yield excluding VII | 4.90% | 4.75% | 15 bps | Fixed Maturity Securities The company's fixed maturity securities portfolio, primarily available-for-sale, grew in fair value as of March 31, 2025. Corporate securities remain the largest component, and total unrealized losses saw a slight increase Fixed Maturity Securities (Fair Value) (March 31, 2025 vs. Dec 31, 2024) | Category | March 31, 2025 (USD millions) | Dec 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total fixed maturity securities | $84,507 | $77,617 | $6,890 | | Corporate | $55,720 | $50,991 | $4,729 | | Total unrealized losses | $6,447 | $6,393 | $54 | - Corporate securities constitute 65.9% of total fixed maturity securities as of March 31, 2025[65] Corporate Fixed Maturity Securities by Industry Corporate fixed maturity securities increased in fair value, with the Industrials sector maintaining the largest allocation, followed by Financial Institutions. The overall average credit rating for corporate fixed maturity securities remained strong at A- Corporate Fixed Maturity Securities by Industry (Fair Value) (March 31, 2025 vs. Dec 31, 2024) | Industry | March 31, 2025 (USD millions) | Dec 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total corporate fixed maturity securities | $55,720 | $50,991 | $4,729 | | Industrials | $28,958 | $26,476 | $2,482 | | Financial institutions | $17,470 | $16,673 | $797 | | Utilities | $9,292 | $7,842 | $1,450 | - The Industrials sector represents 52.0% of total corporate fixed maturity securities, and the overall average credit rating is A- as of March 31, 2025[67] Ratings of Fixed Maturity Securities and Structured Fixed Maturity Securities The company's fixed maturity securities portfolio maintains a high credit quality, with investment-grade securities (AAA/AA/A and BBB) accounting for the vast majority. Structured fixed maturity securities, including CLOs, also form a notable part of the portfolio Ratings of Fixed Maturity Securities (Fair Value) (March 31, 2025) | Rating (Agency Designation) | Fair Value (USD millions) | % of Total | | :--------------------------------- | :----------------------------- | :---------- | | AAA/AA/A | $54,839 | 64.9% | | BBB | $24,946 | 29.5% | | BB | $3,849 | 4.6% | | B | $639 | 0.8% | | CCC | $216 | 0.2% | | In or near default | $18 | —% | | Total | $84,507 | 100.0% | Structured Fixed Maturity Securities (Fair Value) (March 31, 2025) | Category | Fair Value (USD millions) | % of Total | | :--------------------------------- | :----------------------------- | :---------- | | Total ABS | $5,520 | 59.4% | | CLOs | $2,251 | 24.2% | | CMBS | $2,267 | 24.4% | | Total RMBS | $1,502 | 16.2% | | Total Structured Fixed Maturity Securities | $9,289 | 100.0% | Fixed Maturity Securities Below Amortized Cost The total estimated fair value of fixed maturity securities below amortized cost slightly decreased in Q1 2025, while gross unrealized losses saw a minor increase. The majority of these unrealized losses are associated with investment-grade securities and have a duration of 12 months or greater Fixed Maturity Securities Below Amortized Cost (March 31, 2025 vs. Dec 31, 2024) | Metric | March 31, 2025 (USD millions) | Dec 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total fixed maturity securities below amortized cost (Estimated Fair Value) | $49,268 | $49,888 | $(620) | | Total gross unrealized losses | $6,444 | $6,384 | $60 | | Investment grade securities (Gross Unrealized Losses) | $6,341 | $6,283 | $58 | | Gross Unrealized Losses (Equal to or greater than 12 months) | $5,844 | $5,556 | $288 | Consolidated Investment Related Gains and Losses The company reported a reduction in net investment-related losses in Q1 2025 compared to the prior year, driven by lower net losses on fixed maturity securities and derivatives. This improvement was partially offset by other investment-related items Consolidated Investment Related Gains and Losses (Q1 2025 vs. Q1 2024) | Metric | March 31, 2025 (USD millions) | March 31, 2024 (USD millions) | Change (USD millions) | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total investment related gains (losses), net | $(79) | $(149) | $70 | | Net losses on fixed maturity securities available-for-sale | $(57) | $(122) | $65 | | Net gains (losses) on total derivatives | $(13) | $(22) | $9 | Appendix This section provides supplementary information, including reconciliations of GAAP to non-GAAP measures and detailed non-GAAP disclosures Reconciliations of GAAP to Non-GAAP Measures This section provides detailed reconciliations from GAAP income before income taxes to adjusted operating income before income taxes for each segment and on a consolidated basis. It also includes reconciliations of RGA, Inc. shareholders' equity and book value per share to their respective non-GAAP measures excluding AOCI - The reconciliations illustrate the adjustments made to GAAP figures to arrive at non-GAAP measures, primarily by excluding investment and derivative gains/losses, market risk benefits remeasurement, changes in fair value of funds withheld embedded derivatives, and notable items (e.g., actuarial assumption changes)[84][85][88][89][91][92] RGA, Inc. Shareholders' Equity Reconciliation (March 31, 2025) | Metric | Amount (USD millions) | | :--------------------------------- | :-------------------- | | RGA, Inc. shareholders' equity | $11,402 | | Less effect of AOCI | $(1,238) | | RGA, Inc. shareholders' equity, excluding AOCI | $10,164 | Book Value Per Share Reconciliation (March 31, 2025) | Metric | Amount | | :--------------------------------- | :----- | | Book value per share | $172.53 | | Less effect of AOCI | $(18.73) | | Book value per share, excluding AOCI | $153.80 | | Less effect of B36 | $(0.80) | | Book value per share, excluding AOCI and B36 | $154.60 | Non-GAAP Disclosures This section clarifies the company's rationale for using non-GAAP financial measures, stating they provide a clearer view of operating performance by excluding volatile or non-recurring items. It defines key non-GAAP metrics such as adjusted operating income, adjusted operating revenue, shareholders' equity excluding AOCI, and adjusted operating return on equity - The company uses non-GAAP financial measures to better reflect ongoing profitability, assist in resource allocation, and provide a clearer understanding of underlying business trends by excluding specified items not indicative of ongoing operating performance[99] - Key non-GAAP measures include: - Adjusted operating income: Excludes net investment related gains/losses, changes in fair value of certain embedded derivatives, market risk benefits remeasurement, non-economic losses from pension risk transfer, discontinued operations, accounting changes, certain tax-related items, and other non-ongoing operational items - Adjusted operating income excluding notable items: Further excludes items like the financial impact of actuarial assumption reviews - Adjusted operating revenue: Excludes net realized capital gains/losses and changes in fair value of certain embedded derivatives - Shareholders' equity excluding AOCI: Excludes AOCI-related items (e.g., changes in interest rates, credit spreads, discount rates, market risk benefits, foreign currency fluctuations) that are volatile and not permanent - Adjusted operating return on equity: Calculated as adjusted operating income divided by average shareholders' equity excluding AOCI[101][102][105]