- Net income available to RGA shareholders of $4.29 per diluted
share
- Adjusted operating income* of $5.57 per diluted share
- Premium growth of 31.0% over the prior-year quarter, 30.6% on a
constant currency basis1
- Premium growth of 14.0% year-to-date, 15.5% on a constant
currency basis1
- ROE of 13.9%, adjusted operating ROE* of 14.7%, and adjusted
operating ROE excluding notable items*2 of 14.0% for the trailing
twelve months
- Deployed capital of $203 million into in-force and other
transactions, $587 million year-to-date
- Total shareholder capital returns of $106 million: $50 million
of share repurchases and $56 million of shareholder dividends
1 Actual amounts reflect impact of currency fluctuations.
Constant currency amounts reflect foreign denominated activity
translated to U.S. dollars at a constant exchange rate.
2 RGA completed its annual actuarial assumption review related
to business, subject to Long-Duration Targeted Improvements (LDTI),
during the third quarter. The impact from the actuarial assumption
review is reflected in the results as notable items.
Reinsurance Group of America, Incorporated (NYSE: RGA), a
leading global provider of life and health reinsurance, reported
third quarter net income available to RGA shareholders of $287
million, or $4.29 per diluted share, compared with a net loss
available to RGA shareholders of $76 million, or $1.13 per diluted
share, in the prior-year quarter. Adjusted operating income* for
the third quarter totaled $372 million, or $5.57 per diluted share,
compared with $16 million, or $0.24 per diluted share, the year
before. Adjusted operating income, excluding notable items for the
third quarter, totaled $372 million, or $5.57 per diluted share,
compared with $263 million, or $3.92 per diluted share, the year
before. Net foreign currency fluctuations had a favorable effect of
$0.03 per diluted share on net income available to RGA
shareholders, and $0.01 per diluted share on adjusted operating
income as compared with the prior year.
RGA completed its annual actuarial assumption review related to
business, subject to Long-Duration Targeted Improvements (LDTI),
during the third quarter. The impact from the actuarial assumption
review is reflected in the results as notable items, which had an
immaterial impact to both consolidated net income and adjusted
operating income.
Quarterly Results
Year-to-Date Results
($ in millions, except per share
data)
2023
2022
2023
2022
Net premiums
$
4,255
$
3,247
$
10,977
$
9,632
Net income (loss) available to RGA
shareholders
287
(76
)
744
226
Net income (loss) available to RGA
shareholders per diluted share
4.29
(1.13
)
11.06
3.35
Adjusted operating income*
372
16
1,018
615
Adjusted operating income excluding
notable items*
372
263
1,018
845
Adjusted operating income per diluted
share*
5.57
0.24
15.14
9.10
Adjusted operating income excluding
notable items per diluted share*
5.57
3.92
15.14
12.51
Book value per share
122.40
101.08
Book value per share, excluding
accumulated other comprehensive income (AOCI)*
142.63
130.68
Total assets
87,422
82,819
*
See “Non-GAAP Financial Measures”
below
In the third quarter, consolidated net premiums totaled $4.3
billion, an increase of 31.0% over the 2022 third quarter, with a
favorable net foreign currency effect of $13 million. Excluding the
net foreign currency effect, consolidated net premiums increased
30.6% in the quarter. Net premiums include an $820 million
contribution from the U.S. Financial Solutions business, primarily
due to a single premium pension risk transfer transaction.
Compared with the year-ago period, excluding spread-based
businesses, third quarter investment income increased 15.0%,
reflecting higher yields. Average investment yield increased to
4.72% in the third quarter from 4.40% in the prior-year period due
to higher yields.
The effective tax rate on pre-tax income was 24.2% for the
quarter. The effective tax rate for the quarter was 22.6% on
pre-tax adjusted operating income, lower than the expected range of
23% to 24% primarily due to tax benefits received in foreign
geographies.
Anna Manning, Chief Executive Officer, commented, “This was
another strong quarter, with most regions and business lines
performing very well. We continue to see very strong momentum in
our new business activities and pipelines. Industry dynamics are
favorable and we are well-positioned, with the capabilities and
proven track record to benefit from all those dynamics. We are
optimistic about our future and our ability to deliver attractive
returns for our shareholders.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
1,746
$
1,640
$
5,111
$
4,812
Pre-tax income (loss)
105
(69
)
288
81
Pre-tax adjusted operating income
(loss)
103
(77
)
288
39
Pre-tax adjusted operating income
excluding notable items
120
93
305
209
Quarterly Results
- Results reflected $17 million of unfavorable impacts from
assumption updates, which are reflected as notable items.
- Excluding notable items, Individual Life results reflected
favorable mortality claims experience; Individual Health and Group
results were favorable.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Asset-Intensive:
Pre-tax income
$
89
$
30
$
229
$
33
Pre-tax adjusted operating income
117
83
289
227
Pre-tax adjusted operating income
excluding notable items
95
80
267
224
Capital Solutions:
Pre-tax income
$
19
$
23
$
61
$
120
Pre-tax adjusted operating income
19
23
61
120
Pre-tax adjusted operating income
excluding notable items
19
23
61
120
Quarterly Results
- Asset-Intensive results reflected $22 million of favorable
impacts from assumptions updates, which are reflected as notable
items.
- Excluding notable items, Asset-Intensive results reflected
continued strong investment spreads.
- Capital Solutions results were in line with expectations.
Canada
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
302
$
293
$
904
$
911
Pre-tax income
6
12
70
54
Pre-tax adjusted operating income
10
12
71
61
Pre-tax adjusted operating income
excluding notable items
23
18
84
67
Net Premiums
- Foreign currency exchange rates had an adverse effect on net
premiums of $8 million for the quarter.
Quarterly Results
- Results reflected $13 million of unfavorable impacts from
assumptions updates, which are reflected as notable items.
- Excluding notable items, results reflected unfavorable Group
claims experience.
- Foreign currency exchange rates had an adverse effect of $1
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Pre-tax income
$
30
$
6
$
46
$
22
Pre-tax adjusted operating income
30
6
46
22
Pre-tax adjusted operating income
excluding notable items
8
6
24
22
Quarterly Results
- Results reflected $22 million of favorable impacts from
assumption updates, which are reflected as notable items.
- Excluding notable items, results reflected favorable longevity
experience.
- Foreign currency exchange rates had an immaterial effect on
pre-tax income and pre-tax adjusted operating income.
Europe, Middle East and Africa (EMEA)
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
447
$
436
$
1,314
$
1,314
Pre-tax income (loss)
(60
)
5
(29
)
43
Pre-tax adjusted operating income
(loss)
(59
)
5
(28
)
43
Pre-tax adjusted operating income (loss)
excluding notable items
(12
)
18
19
56
Net Premiums
- Foreign currency exchange rates had a favorable effect on net
premiums of $20 million for the quarter.
Quarterly Results
- Results reflected $47 million of unfavorable impacts from
assumption updates, primarily in the U.K., which are reflected as
notable items.
- Excluding notable items, results reflected unfavorable
mortality experience.
- Foreign currency exchange rates had an adverse effect of $4
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Pre-tax income
$
84
$
34
$
195
$
126
Pre-tax adjusted operating income
108
52
243
171
Pre-tax adjusted operating income
excluding notable items
74
52
209
171
Quarterly Results
- Results reflected $34 million of favorable impacts from
assumption updates, which are reflected as notable items.
- Excluding notable items, results reflected favorable longevity
experience.
- Foreign currency exchange rates had a favorable effect of $6
million on pre-tax income and $8 million on pre-tax adjusted
operating income.
Asia Pacific
Traditional
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
737
$
660
$
2,076
$
1,950
Pre-tax income (loss)
134
(73
)
302
94
Pre-tax adjusted operating income
(loss)
134
(73
)
302
94
Pre-tax adjusted operating income
excluding notable items
132
67
300
211
Net Premiums
- Foreign currency exchange rates had an adverse effect on net
premiums of $10 million for the quarter.
Quarterly Results
- Results reflected $2 million of favorable impacts from
assumption updates, which are reflected as notable items.
- Excluding notable items, results reflected favorable claims and
other experience.
- Foreign currency exchange rates had an immaterial effect on
pre-tax income and an adverse effect of $1 million on pre-tax
adjusted operating income.
Financial Solutions
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Net premiums
$
63
$
69
$
171
$
172
Pre-tax income (loss)
(16
)
47
(9
)
(63
)
Pre-tax adjusted operating income
44
62
146
123
Pre-tax adjusted operating income
excluding notable items
44
62
146
123
Quarterly Results
- Results were in line with expectations.
- Foreign currency exchange rates had a favorable effect of $1
million on pre-tax income and an adverse effect of $2 million on
pre-tax adjusted operating income.
Corporate and Other
Quarterly Results
Year-to-Date Results
($ in millions)
2023
2022
2023
2022
Pre-tax income (loss)
$
(11
)
$
(92
)
$
(157
)
$
(173
)
Pre-tax adjusted operating income
(loss)
(25
)
(55
)
(105
)
(70
)
Pre-tax adjusted operating income (loss)
excluding notable items
(25
)
(55
)
(105
)
(70
)
Quarterly Results
- Results were favorable compared to the quarterly average run
rate, primarily due to higher investment income.
Dividend Declaration
Effective October 31, 2023, the board of directors declared a
regular quarterly dividend of $0.85, payable November 28, 2023, to
shareholders of record as of November 14, 2023.
Earnings Conference Call
A conference call to discuss third quarter results will begin at
10 a.m. Eastern Time on Friday, November 3, 2023. Interested
parties may access the call by dialing 1-844-481-2753 (412-317-0669
international) and asking to be joined into the Reinsurance Group
of America, Incorporated (RGA) call. A live audio webcast of the
conference call will be available on the Company’s Investor
Relations website at www.rgare.com. A replay of the conference call
will be available at the same address for 90 days following the
conference call.
The Company has posted to its website an earnings presentation
and a Quarterly Financial Supplement that includes financial
information for all segments as well as information on its
investment portfolio. Additionally, the Company posts periodic
reports, press releases and other useful information on its
Investor Relations website.
Non-GAAP Financial Measures
Reinsurance Group of America, Incorporated (the “Company”)
discloses certain financial measures that are not determined in
accordance with U.S. GAAP. The Company principally uses such
non-GAAP financial measures in evaluating performance because the
Company believes that such measures, when reviewed in conjunction
with relevant U.S. GAAP measures, present a clearer picture of our
operating performance and assist the Company in the allocation of
its resources. The Company believes that these non-GAAP financial
measures provide investors and other third parties with a better
understanding of the Company’s results of operations, financial
statements and the underlying profitability drivers and trends of
the Company’s businesses by excluding specified items which may not
be indicative of the Company’s ongoing operating performance and
may fluctuate significantly from period to period. These measures
should be considered supplementary to the Company’s financial
results that are presented in accordance with U.S. GAAP and should
not be viewed as a substitute for U.S. GAAP measures. Other
companies may use similarly titled non-GAAP financial measures that
are calculated differently from the way the Company calculates such
measures. Consequently, the Company’s non-GAAP financial measures
may not be comparable to similar measures used by other
companies.
The following non-GAAP financial measures are used in this
document or in other public disclosures made by the Company from
time to time:
- Adjusted operating income, on a pre-tax and after-tax basis,
and adjusted operating income per diluted share. The Company
uses these measures as a basis for analyzing financial results
because the Company believes that such measures better reflect the
ongoing profitability and underlying trends of the Company’s
continuing operations. Adjusted operating income is calculated as
net income available to the Company’s shareholders (or, in the case
of pre-tax adjusted operating income, income before income taxes)
excluding substantially all of the effect of net investment related
gains and losses, changes in the fair value of certain embedded
derivatives, and changes in the fair value of contracts that
provide market risk benefits, any of which can be volatile and may
not reflect the underlying performance of the Company’s businesses.
Additionally, adjusted operating income excludes, to the extent
applicable, any net gain or loss from discontinued operations, the
cumulative effect of any accounting changes, the impact of certain
tax-related items, and any other items that the Company believes
are not indicative of the Company’s ongoing operations. In
addition, adjusted operating income per diluted share is calculated
as adjusted operating income divided by weighted average diluted
shares outstanding. These measures also serve as a basis for
establishing target levels and awards under the Company’s
management incentive programs.
- Adjusted operating income (on a pre-tax and after-tax
basis), excluding notable items. Notable items are items the
Company believes may not be indicative of its ongoing operating
performance which are excluded from adjusted operating income to
provide investors and other third parties with a better
understanding of the Company’s results. Such items may be
unexpected, unknown when the Company prepares its business plan or
otherwise. Notable items presented may include the financial impact
of the Company’s assumption reviews on business subject to the
Financial Accounting Standards Board’s Accounting Standards Update
No. 2018-12, “Targeted Improvements to the Accounting for
Long-Duration Contracts” and related amendments, reflected in
future policy benefits remeasurement gains or losses.
- Adjusted operating revenue. This measure excludes the
effects of net realized capital gains and losses, and changes in
the fair value of certain embedded derivatives.
- Shareholders’ equity position excluding the impact of
accumulated other comprehensive income (loss) (“AOCI”),
shareholders’ average equity position excluding AOCI, and book
value per share excluding the impact of AOCI. The Company
believes that these measures provide useful information since such
measures exclude AOCI-related items that are not permanent and can
fluctuate significantly from period to period, and may not reflect
the impact of the underlying performance of the Company’s
businesses on shareholders’ equity and book value per share. AOCI
primarily relates to changes in interest rates, credit spreads on
its investment securities, future policy benefits discount rate
measurement gains (losses), market risk benefits
instrument-specific credit risk remeasurement gains (losses) and
foreign currency fluctuations. The Company also discloses a
non-GAAP financial measure called shareholders’ average equity
position excluding AOCI and notable items.
- Adjusted operating return on equity. This measure is
calculated as adjusted operating income divided by average
shareholders’ equity excluding AOCI. Adjusted operating return on
equity also serves as a basis for establishing target levels and
awards under the Company’s management incentive programs. The
Company also discloses a non-GAAP financial measure called adjusted
operating return on equity excluding notable items, which is
calculated as adjusted operating income excluding notable items
divided by average shareholders’ equity excluding notable items and
AOCI.
Reconciliations of the foregoing non-GAAP financial measures (to
the extent disclosed in this document) to the most comparable GAAP
financial measures are provided in the Appendix at the end of this
document.
About RGA
Reinsurance Group of America, Incorporated (NYSE: RGA) is a
global industry leader specializing in life and health reinsurance
and financial solutions that help clients effectively manage risk
and optimize capital. Founded in 1973, RGA is today one of the
world’s largest and most respected reinsurers and remains guided by
a powerful purpose: to make financial protection accessible to all.
As a global capabilities and solutions leader, RGA empowers
partners through bold innovation, relentless execution, and
dedicated client focus – all directed toward creating sustainable
long-term value. RGA has approximately $3.5 trillion of life
reinsurance in force and assets of $87.4 billion as of September
30, 2023. To learn more about RGA and its businesses, please visit
www.rgare.com or follow RGA on LinkedIn and Facebook. Investors can
learn more at investor.rgare.com.
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and
federal securities laws including, among others, statements
relating to projections of the future operations, strategies,
earnings, revenues, income or loss, ratios, financial performance
and growth potential of Reinsurance Group of America, Incorporated
(the “Company”). Forward-looking statements often contain words and
phrases such as “anticipate,” “assume,” “believe,” “continue,”
“could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,”
“plan,” “potential,” “pro forma,” “project,” “should,” “will,”
“would,” and other words and terms of similar meaning or that are
otherwise tied to future periods or future performance, in each
case in all derivative forms. Forward-looking statements are based
on management’s current expectations and beliefs concerning future
developments and their potential effects on the Company.
Forward-looking statements are not a guarantee of future
performance and are subject to risks and uncertainties, some of
which cannot be predicted or quantified. Future events and actual
results, performance, and achievements could differ materially from
those set forth in, contemplated by or underlying the
forward-looking statements.
Factors that could also cause results or events to differ,
possibly materially, from those expressed or implied by
forward-looking statements, include, among others: (1) adverse
changes in mortality (whether related to COVID-19 or otherwise),
morbidity, lapsation or claims experience, (2) inadequate risk
analysis and underwriting, (3) adverse capital and credit market
conditions and their impact on the Company’s liquidity, access to
capital and cost of capital, (4) changes in the Company’s financial
strength and credit ratings and the effect of such changes on the
Company’s future results of operations and financial condition, (5)
the availability and cost of collateral necessary for regulatory
reserves and capital, (6) requirements to post collateral or make
payments due to declines in the market value of assets subject to
the Company’s collateral arrangements, (7) action by regulators who
have authority over the Company’s reinsurance operations in the
jurisdictions in which it operates, (8) the effect of the Company
parent’s status as an insurance holding company and regulatory
restrictions on its ability to pay principal of and interest on its
debt obligations, (9) general economic conditions or a prolonged
economic downturn affecting the demand for insurance and
reinsurance in the Company’s current and planned markets, (10) the
impairment of other financial institutions and its effect on the
Company’s business, (11) fluctuations in U.S. or foreign currency
exchange rates, interest rates, or securities and real estate
markets, (12) market or economic conditions that adversely affect
the value of the Company’s investment securities or result in the
impairment of all or a portion of the value of certain of the
Company’s investment securities that in turn could affect
regulatory capital, (13) market or economic conditions that
adversely affect the Company’s ability to make timely sales of
investment securities, (14) risks inherent in the Company’s risk
management and investment strategy, including changes in investment
portfolio yields due to interest rate or credit quality changes,
(15) the fact that the determination of allowances and impairments
taken on the Company’s investments is highly subjective, (16) the
stability of and actions by governments and economies in the
markets in which the Company operates, including ongoing
uncertainties regarding the amount of U.S. sovereign debt and the
credit ratings thereof, (17) the Company’s dependence on third
parties, including those insurance companies and reinsurers to
which the Company cedes some reinsurance, third-party investment
managers and others, (18) financial performance of the Company’s
clients, (19) the threat of natural disasters, catastrophes,
terrorist attacks, pandemics, epidemics or other major public
health issues anywhere in the world where the Company or its
clients do business, (20) competitive factors and competitors’
responses to the Company’s initiatives, (21) development and
introduction of new products and distribution opportunities, (22)
execution of the Company’s entry into new markets, (23) integration
of acquired blocks of business and entities, (24) interruption or
failure of the Company’s telecommunication, information technology
or other operational systems, or the Company’s failure to maintain
adequate security to protect the confidentiality or privacy of
personal or sensitive data and intellectual property stored on such
systems, (25) adverse developments with respect to litigation,
arbitration or regulatory investigations or actions, (26) the
adequacy of reserves, resources and accurate information relating
to settlements, awards and terminated and discontinued lines of
business, (27) changes in laws, regulations, and accounting
standards applicable to the Company or its business, including
Long-Duration Targeted Improvement accounting changes and (28)
other risks and uncertainties described in this document and in the
Company’s other filings with the Securities and Exchange Commission
(“SEC”).
Forward-looking statements should be evaluated together with the
many risks and uncertainties that affect the Company’s business,
including those mentioned in this document and described in the
periodic reports the Company files with the SEC. These
forward-looking statements speak only as of the date on which they
are made. The Company does not undertake any obligation to update
these forward-looking statements, even though the Company’s
situation may change in the future, except as required under
applicable securities law. For a discussion of the risks and
uncertainties that could cause actual results to differ materially
from those contained in the forward-looking statements, you are
advised to see Item 1A – “Risk Factors” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2022, as may be
supplemented by Item 1A - “Risk Factors” in the Company’s
subsequent Quarterly Reports on Form 10-Q and in our other periodic
and current reports filed with the SEC.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated
Net Income to Adjusted Operating Income
(Dollars in millions, except per
share data)
(Unaudited)
Three Months Ended September
30,
2023
2022
Diluted
Earnings Per
Share
Diluted
Earnings Per
Share
Net income (loss) available to RGA
shareholders
$
287
$
4.29
$
(76
)
$
(1.13
)
Reconciliation to adjusted operating
income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
104
1.56
120
1.79
Market risk benefits remeasurement (gains)
losses
(17
)
(0.25
)
18
0.27
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(4
)
(0.06
)
3
0.04
Embedded derivatives:
Included in investment related
gains/losses, net
(1
)
(0.01
)
14
0.21
Included in interest credited
(6
)
(0.09
)
(8
)
(0.12
)
Investment (income) loss on unit-linked
variable annuities
1
0.01
4
0.06
Interest credited on unit-linked variable
annuities
(1
)
(0.01
)
(4
)
(0.06
)
Interest expense on uncertain tax
positions
1
0.01
—
—
Other
—
—
(56
)
(0.83
)
Uncertain tax positions and other tax
related items
6
0.09
—
—
Net income attributable to noncontrolling
interest
2
0.03
1
0.01
Adjusted operating income
372
5.57
16
0.24
Notable items
—
—
248
3.68
Adjusted operating income excluding
notable items
$
372
$
5.57
$
264
$
3.92
(Unaudited)
Nine Months Ended September
30,
2023
2022
Diluted
Earnings Per
Share
Diluted
Earnings Per
Share
Net income available to RGA
shareholders
$
744
$
11.06
$
226
$
3.35
Reconciliation to adjusted operating
income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
294
4.39
366
5.42
Market risk benefits remeasurement (gains)
losses
(30
)
(0.45
)
23
0.34
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(2
)
(0.03
)
17
0.25
Embedded derivatives:
Included in investment related
gains/losses, net
(14
)
(0.21
)
84
1.24
Included in interest credited
(9
)
(0.13
)
(43
)
(0.64
)
Investment (income) loss on unit-linked
variable annuities
3
0.04
17
0.25
Interest credited on unit-linked variable
annuities
(3
)
(0.04
)
(17
)
(0.25
)
Interest expense on uncertain tax
positions
1
0.01
—
—
Other
6
0.09
(64
)
(0.95
)
Uncertain tax positions and other tax
related items
23
0.34
4
0.06
Net income attributable to noncontrolling
interest
5
0.07
2
0.03
Adjusted operating income
1,018
15.14
615
9.10
Notable items
—
—
231
3.41
Adjusted operating income excluding
notable items
$
1,018
$
15.14
$
846
$
12.51
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated
Effective Income Tax Rates
(Dollars in millions)
(Unaudited)
Three Months Ended September 30,
2023
Nine Months Ended September 30,
2023
Pre-tax
Income
(Loss)
Income
Taxes
Effective
Tax Rate (1)
Pre-tax
Income
(Loss)
Income
Taxes
Effective
Tax Rate (1)
GAAP income
$
380
$
91
24.2
%
$
996
$
247
24.9
%
Reconciliation to adjusted operating
income:
Realized and unrealized (gains) losses,
derivatives and other, included in investment related gains
(losses), net
134
30
378
84
Market risk benefits remeasurement (gains)
losses
(21
)
(4
)
(38
)
(8
)
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(4
)
—
(2
)
—
Embedded derivatives:
Included in investment related
gains/losses, net
(1
)
—
(18
)
(4
)
Included in interest credited
(7
)
(1
)
(11
)
(2
)
Investment (income) loss on unit-linked
variable annuities
2
1
4
1
Interest credited on unit-linked variable
annuities
(2
)
(1
)
(4
)
(1
)
Interest expense on uncertain tax
positions
1
—
1
—
Other
(1
)
(1
)
7
1
Uncertain tax positions and other tax
related items
—
(6
)
—
(23
)
Adjusted operating income
481
109
22.6
%
1,313
295
22.5
%
Notable items
(3
)
(3
)
(3
)
(3
)
Adjusted operating income excluding
notable items
$
478
$
106
$
1,310
$
292
(1)
The Company rounds amounts in the
financial statements to millions and calculates the effective tax
rate from the underlying whole-dollar amounts. Thus certain amounts
may not recalculate based on the numbers due to rounding.
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated
Income before Income Taxes to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited)
Three Months Ended
September 30,
2023
2022
Income (loss) before income taxes
$
380
$
(77
)
Reconciliation to pre-tax adjusted
operating income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
134
152
Market risk benefits remeasurement (gains)
losses
(21
)
23
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(4
)
4
Embedded derivatives:
Included in investment related
gains/losses, net
(1
)
17
Included in interest credited
(7
)
(10
)
Investment (income) loss on unit-linked
variable annuities
2
5
Interest credited on unit-linked variable
annuities
(2
)
(5
)
Interest expense on uncertain tax
positions
1
—
Other
(1
)
(71
)
Pre-tax adjusted operating income
481
38
Notable items
(3
)
326
Pre-tax adjusted operating income
excluding notable items
$
478
$
364
(Unaudited)
Nine Months Ended
September 30,
2023
2022
Income before income taxes
$
996
$
337
Reconciliation to pre-tax adjusted
operating income:
Realized (gains) losses, derivatives and
other, included in investment related gains (losses), net
378
471
Market risk benefits remeasurement (gains)
losses
(38
)
29
Realized (gains) losses on funds withheld,
included in investment income, net of related expenses
(2
)
22
Embedded derivatives:
Included in investment related
gains/losses, net
(18
)
106
Included in interest credited
(11
)
(54
)
Investment (income) loss on unit-linked
variable annuities
4
22
Interest credited on unit-linked variable
annuities
(4
)
(22
)
Interest expense on uncertain tax
positions
1
—
Other
7
(81
)
Pre-tax adjusted operating income
1,313
830
Notable items
(3
)
303
Pre-tax adjusted operating income
excluding notable items
$
1,310
$
1,133
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Income
to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited)
Three Months Ended September 30,
2023
Pre-tax
income
(loss)
Realized
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax
adjusted
operating
income (loss)
Notable
Items
Pre-tax
adjusted
operating
income (loss)
ex. notable items
U.S. and Latin America:
Traditional
$
105
$
—
$
(2
)
$
103
$
17
$
120
Financial Solutions:
Asset-Intensive
89
34
(6
)
117
(22
)
95
Capital Solutions
19
—
—
19
—
19
Total U.S. and Latin America
213
34
(8
)
239
(5
)
234
Canada Traditional
6
4
—
10
13
23
Canada Financial Solutions
30
—
—
30
(22
)
8
Total Canada
36
4
—
40
(9
)
31
EMEA Traditional
(60
)
1
—
(59
)
47
(12
)
EMEA Financial Solutions
84
24
—
108
(34
)
74
Total EMEA
24
25
—
49
13
62
APAC Traditional
134
—
—
134
(2
)
132
APAC Financial Solutions
(16
)
60
—
44
—
44
Total Asia Pacific
118
60
—
178
(2
)
176
Corporate and Other
(11
)
(14
)
—
(25
)
—
(25
)
Consolidated
$
380
$
109
$
(8
)
$
481
$
(3
)
$
478
(Unaudited)
Three Months Ended September 30,
2022
Pre-tax
income
(loss)
Realized
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax
adjusted
operating
income (loss)
Notable
Items
Pre-tax
adjusted
operating
income (loss)
ex. notable items
U.S. and Latin America:
Traditional
$
(69
)
$
(1
)
$
(7
)
$
(77
)
$
170
$
93
Financial Solutions:
Asset-Intensive
30
39
14
83
(3
)
80
Capital Solutions
23
—
—
23
—
23
Total U.S. and Latin America
(16
)
38
7
29
167
196
Canada Traditional
12
—
—
12
6
18
Canada Financial Solutions
6
—
—
6
—
6
Total Canada
18
—
—
18
6
24
EMEA Traditional
5
—
—
5
13
18
EMEA Financial Solutions
34
18
—
52
—
52
Total EMEA
39
18
—
57
13
70
APAC Traditional
(73
)
—
—
(73
)
140
67
APAC Financial Solutions
47
15
—
62
—
62
Total Asia Pacific
(26
)
15
—
(11
)
140
129
Corporate and Other
(92
)
37
—
(55
)
—
(55
)
Consolidated
$
(77
)
$
108
$
7
$
38
$
326
$
364
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Income
to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited)
Nine Months Ended September 30,
2023
Pre-tax
income
(loss)
Realized
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax
adjusted
operating
income (loss)
Notable
Items
Pre-tax
adjusted
operating
income (loss)
ex. notable items
U.S. and Latin America:
Traditional
$
288
$
—
$
—
$
288
$
17
$
305
Financial Solutions:
Asset-Intensive
229
89
(29
)
289
(22
)
267
Capital Solutions
61
—
—
61
—
61
Total U.S. and Latin America
578
89
(29
)
638
(5
)
633
Canada Traditional
70
1
—
71
13
84
Canada Financial Solutions
46
—
—
46
(22
)
24
Total Canada
116
1
—
117
(9
)
108
EMEA Traditional
(29
)
1
—
(28
)
47
19
EMEA Financial Solutions
195
48
—
243
(34
)
209
Total EMEA
166
49
—
215
13
228
APAC Traditional
302
—
—
302
(2
)
300
APAC Financial Solutions
(9
)
155
—
146
—
146
Total Asia Pacific
293
155
—
448
(2
)
446
Corporate and Other
(157
)
52
—
(105
)
—
(105
)
Consolidated
$
996
$
346
$
(29
)
$
1,313
$
(3
)
$
1,310
(Unaudited)
Nine Months Ended September 30,
2022
Pre-tax
income
(loss)
Realized
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax
adjusted
operating
income (loss)
Notable
Items
Pre-tax
adjusted
operating
income (loss)
ex. notable items
U.S. and Latin America:
Traditional
$
81
$
(1
)
$
(41
)
$
39
$
170
$
209
Financial Solutions:
Asset-Intensive
33
101
93
227
(3
)
224
Capital Solutions
120
—
—
120
—
120
Total U.S. and Latin America
234
100
52
386
167
553
Canada Traditional
54
7
—
61
6
67
Canada Financial Solutions
22
—
—
22
—
22
Total Canada
76
7
—
83
6
89
EMEA Traditional
43
—
—
43
13
56
EMEA Financial Solutions
126
45
—
171
—
171
Total EMEA
169
45
—
214
13
227
APAC Traditional
94
—
—
94
117
211
APAC Financial Solutions
(63
)
186
—
123
—
123
Total Asia Pacific
31
186
—
217
117
334
Corporate and Other
(173
)
103
—
(70
)
—
(70
)
Consolidated
$
337
$
441
$
52
$
830
$
303
$
1,133
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share
data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Earnings per share from net income
(loss):
Basic earnings per share
$
4.34
$
(1.13
)
$
11.19
$
3.38
Diluted earnings per share (1)
$
4.29
$
(1.13
)
$
11.06
$
3.35
Diluted earnings per share from adjusted
operating income
$
5.57
$
0.24
$
15.14
$
9.10
Weighted average number of common and
common equivalent shares outstanding
66,914
67,663
67,252
67,607
(1)
As a result of anti-dilutive
impact, in periods of a loss, weighted average common shares
outstanding (basic) are used in the calculation of diluted earnings
per share.
(Unaudited)
At September 30,
2023
2022
Treasury shares
19,439
18,484
Common shares outstanding
65,872
66,827
Book value per share outstanding
$
122.40
$
101.08
Book value per share outstanding, before
impact of AOCI
$
142.63
$
130.68
Reconciliation of Book Value Per
Share to Book Value Per Share Excluding AOCI
(Unaudited)
At September 30,
2023
2022
Book value per share outstanding
$
122.40
$
101.08
Less effect of AOCI:
Accumulated currency translation
adjustment
(0.49
)
(2.20
)
Unrealized (depreciation) appreciation of
securities
(101.10
)
(86.61
)
Effect of updating discount rates on
future policy benefits
81.46
59.69
Change in instrument-specific credit risk
for market risk benefits
0.11
0.29
Pension and postretirement benefits
(0.21
)
(0.77
)
Book value per share outstanding, before
impact of AOCI
$
142.63
$
130.68
Reconciliation of Shareholders'
Average Equity to Shareholders' Average Equity Excluding AOCI
(Dollars in millions)
(Unaudited)
Trailing Twelve Months Ended September 30,
2023:
Average Equity
Shareholders' average equity
$
7,466
Less effect of AOCI:
Accumulated currency translation
adjustment
(73
)
Unrealized (depreciation) appreciation of
securities
(5,443
)
Effect of updating discount rates on
future policy benefits
3,921
Change in instrument-specific credit risk
for market risk benefits
13
Pension and postretirement benefits
(26
)
Shareholders' average equity, excluding
AOCI
9,074
Year-to-date notable items, net of tax
83
Shareholders' average equity, excluding
AOCI and notable items
$
9,157
Reconciliation of Trailing Twelve
Months of Consolidated Net Income to Adjusted Operating Income
and Related Return on Equity
(Dollars in millions)
(Unaudited)
Return on
Equity
Trailing Twelve Months Ended September 30,
2023:
Income
Net income available to RGA
shareholders
$
1,035
13.9
%
Reconciliation to adjusted operating
income:
Capital (gains) losses, derivatives and
other, net
243
Change in fair value of embedded
derivatives
31
Tax expense on uncertain tax positions and
other tax related items
14
Net income attributable to noncontrolling
interest
7
Adjusted operating income
1,330
14.7
%
Notable items after tax
(47
)
Adjusted operating income excluding
notable items
$
1,283
14.0
%
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements
of Income
(Dollars in millions)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenues:
Net premiums
$
4,255
$
3,247
$
10,977
$
9,632
Investment income, net of related
expenses
922
769
2,635
2,333
Investment related gains (losses), net
(126
)
(154
)
(326
)
(533
)
Other revenue
102
188
274
438
Total revenues
5,153
4,050
13,560
11,870
Benefits and expenses:
Claims and other policy benefits
3,959
3,048
10,035
8,857
Future policy benefits remeasurement
(gains) losses
(82
)
226
(95
)
302
Market risk benefits remeasurement (gains)
losses
(21
)
23
(38
)
29
Interest credited
223
189
647
468
Policy acquisition costs and other
insurance expenses
348
341
1,028
1,021
Other operating expenses
274
251
799
720
Interest expense
72
49
188
136
Total benefits and expenses
4,773
4,127
12,564
11,533
Income before income taxes
380
(77
)
996
337
Provision for income taxes
91
(2
)
247
109
Net income (loss)
289
(75
)
749
228
Net income attributable to noncontrolling
interest
2
1
5
2
Net income (loss) available to RGA
shareholders
$
287
$
(76
)
$
744
$
226
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231031174583/en/
Jeff Hopson Senior Vice President - Investor Relations (636)
736-2068
Reinsurance Group of Ame... (NYSE:RGA)
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