RGA(US:RGA)2023-11-03 22:01Financial Data and Key Metrics Changes - RGA reported pre-tax adjusted operating income of $481 million for the quarter, with adjusted operating earnings per share of $5.57, including a foreign currency tailwind of $0.01 per share [10][95] - The trailing 12-month adjusted operating return on equity was 14.7%, or 14% excluding notable items [141] - Reported premiums increased by 31% for the quarter, driven by over $800 million in premium from the second US PRT transaction [142] Business Line Data and Key Metrics Changes - The US PRT business gained momentum, with significant transactions completed in Europe and a strong performance in the longevity business [8][78] - The Asia Pacific traditional business reflected favorable claims experience, contributing positively to results [78][112] - The Corporate and Other segment reported a pre-tax adjusted operating loss of $25 million, less than expected, primarily due to higher investment income [13] Market Data and Key Metrics Changes - The company noted strong demand for new products launched in Asia, particularly in Japan, Korea, China, and Hong Kong [100] - The US asset-intensive business showed strong results, reflecting improved investment spreads due to higher yields on floating rate securities [143] - The traditional business in Europe, Middle East, and Africa (EMEA) experienced unfavorable mortality experience, while the Financial Solutions business reflected favorable longevity experience [113] Company Strategy and Development Direction - RGA is focused on pursuing attractive growth opportunities while balancing the return of excess capital to shareholders [5][145] - The company aims to leverage its strong balance sheet and brand to capitalize on global opportunities, emphasizing execution and delivery [66][137] - RGA's strategy includes partnerships with established PRT insurers to jointly bid on transactions, enhancing competitive positioning [77][151] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, citing strong business momentum and favorable interest rates as tailwinds [5][9] - The outlook for underwriting experience remains positive, with expectations of continued favorable mortality trends [44][67] - Management highlighted the importance of automation in underwriting and the ongoing trend towards digital solutions in the industry [125] Other Important Information - The company deployed $203 million of capital in the quarter, bringing the year-to-date total to $587 million, exceeding the total amount deployed in each of the last two years [14][135] - RGA's book value per share increased to $142.63, representing a compounded annual growth rate of 10.8% since the beginning of 2021 [115] Q&A Session Summary Question: Can you provide color on the quantification of favorable underwriting experience? - Management indicated that overall underwriting for the quarter was approximately $150 million, with about $60 million recognized in the current period [18][56] Question: What is the impact of Bermuda regulatory changes on the competitive environment? - Management noted that while they do not expect a material impact, they are monitoring the situation closely [184] Question: What are the strongest opportunities for in-force management? - Management highlighted that they see strong opportunities in both GFS and traditional business, with a focus on partnerships and in-force actions [127][158]