RGA-Reinsurance Group's Q4 Earnings Miss Estimates, Revenues Beat

Core Insights - Reinsurance Group of America (RGA) reported fourth-quarter 2024 adjusted operating earnings of $4.99 per share, missing the Zacks Consensus Estimate by 4.8%, but increased 5.5% year over year [1] - The company experienced solid performance in the U.S., Latin America, and Canada segments, while results were softer in Asia/Pacific and EMEA segments [2] - RGA's operating revenues reached$ 5.5 billion, beating the Zacks Consensus Estimate by 0.5% and improving 6.3% year over year due to higher net premiums and net investment income [3] Financial Performance - Investment income rose 24% year over year to $1.2 billion, driven by higher average invested assets, although the average investment yield decreased to 4.83% from 4.86% [4] - Total benefits and expenses increased 3.8% year over year to$ 5 billion, influenced by higher claims, policy benefits, and other operating expenses [5] Segment Performance - In the U.S. and Latin America, pre-tax adjusted operating income was $227 million, up 80.1% year over year, with net premiums rising 7% to$ 2 billion [6] - The Financial Solutions segment's pre-tax adjusted operating income decreased 24.8% year over year to $76 million due to the runoff of existing annuity business [7] - In Canada, pre-tax adjusted operating income increased 185% year over year to$ 40 million [7] - EMEA reported a pre-tax adjusted operating income of $107 million, down 10.9% year over year, with a traditional segment loss of$ 11 million [9] - Asia/Pacific's total pre-tax adjusted operating income was $128 million, a decrease of 6.6% from the previous year [10] Full-Year Highlights - For the full year, adjusted operating earnings were$ 22.57 per share, exceeding the Zacks Consensus Estimate of $21.19, and increased 13.5% year over year [14] - Total revenues for the year were$ 22.9 billion, a 10% increase over 2023, surpassing the consensus estimate of $22.4 billion [14] - Net premiums totaled$ 17.8 billion, reflecting an 18.3% increase from 2023 [14] Financial Update - As of December 31, 2024, RGA's assets were valued at $118.72 billion, up 21.6% year over year [15] - The book value per share increased 5.1% year over year to$ 151.31 [15] - The adjusted operating return on equity was 13.8%, a contraction of 70 basis points year over year, with a new target set at 13% to 15% [16] Capital Deployment - RGA deployed $1.676 billion into in-force block transactions in 2024 [17] - A quarterly dividend of 89 cents was declared, payable on March 14 to shareholders of record as of February 18 [17]