Reinsurance Group's Q1 Earnings Top, Revenues Miss Estimates

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]