Reinsurance Group of America (RGA) Q3 2024 earnings summary

Executive summary

• Achieved record adjusted operating income of $6.13 per share for Q3 2024, with a trailing twelve-month adjusted operating ROE of 15.5%, both exceeding targets and prior records.

• Value of In-Force Business Margins increased by $4.6 billion or 13.9% year-to-date, driven by new business, balance sheet management, and capital deployment.

• Net income for Q3 2024 was $156 million–$158 million, down from the prior year, impacted by assumption changes and retention limit increases.

• $382 million of capital deployed into in-force block transactions in Q3, with excess capital at approximately $0.7 billion at quarter-end.

• Notable items included a $136 million pre-tax impact from increasing per-life retention limits and a $58 million pre-tax impact from the annual actuarial assumption review, both expected to benefit future profitability.

Financial highlights

• Pre-tax adjusted operating income was $314 million ($3.62 per share after tax); excluding notable items, it was $508 million ($6.13 per share after tax).

• Net premiums rose 3.2% year-over-year to $4.4 billion, with traditional business premiums up 7.9% YTD on a constant currency basis.

• Book value per share (excluding AOCI) was $149.63–$151.79, with a 10.0%–10.4% CAGR since early 2021.

• Average investment yield increased to 5.08% from 4.72% year-over-year.

• Net investment income for Q3 2024 was $1.19 billion, up from $922 million in Q3 2023.

Outlook and guidance

• Management expects continued strong business growth, a healthy new business pipeline, and favorable impacts from increased per-life retention limits.

• Recapture of retroceded business is expected to add $20 million to 2025 run-rate pre-tax operating income, increasing to $60 million by 2040.

• Sufficient liquidity and capital are projected to meet obligations for at least the next 12 months, with no anticipated need for capital augmentation.

• Effective tax rate for the full year is projected at the lower end of 24%-25%.