In This Article:
Reinsurance Group of America, Incorporated RGA reported first-quarter 2025 adjusted operating earnings of $5.66 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line decreased 6% from the year-ago quarter’s figure. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net foreign currency fluctuations had a favorable effect of 9 cents per share on adjusted operating income.
RGA's operating revenues of $5.3 billion missed the Zacks Consensus Estimate by 7%. The top line declined 13.7% year over year due to higher net premiums and net investment income. Net premiums of $4 billion rose 23.9% year over year.
Investment income increased 13% from the prior-year quarter to $1.2 billion on higher average invested assets. Average investment yield decreased to 4.64% from 4.7% in the year-ago period, reflecting lower variable investment income and lower yield on cash and cash equivalents, partially offset by higher new money rates.
Reinsurance Group of America, Incorporated Price, Consensus and EPS Surprise
Reinsurance Group of America, Incorporated price-consensus-eps-surprise-chart | Reinsurance Group of America, Incorporated Quote
Total benefits and expenses at Reinsurance Group decreased 19% year over year to $4.9 billion on lower claims and other policy benefits.
Quarterly Segment Update
U.S. and Latin America: Total pre-tax adjusted operating income was $207 million in the quarter under discussion, which increased 5% year over year.
The Traditional segment reported a pre-tax adjusted operating income of $140 million, which increased 9.4% year over year, reflecting favorable Individual Life large claims experience. Net premiums rose 12% from the year-ago quarter to $1.9 billion.
The Financial Solutions segment’s pre-tax adjusted operating income of $67 million decreased 25.6% year over year on lower variable investment income.
Canada: Total pre-tax adjusted operating income decreased 18.9% year over year to $43 million.
The Traditional segment’s pre-tax adjusted operating income surged 60% year over year to $32 million, reflecting unfavorable lapse experience, partially offset by favorable claims experience. Net premiums marginally increased to $319 million. Foreign currency exchange rates had an adverse effect on net premiums of $20 million in the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income increased 57.1% year over year to $11 million, reflecting favorable longevity experience. Foreign currency exchange rates had an adverse effect of $1 million on pre-tax adjusted operating income.
EMEA: Total pre-tax adjusted operating income was $140 million, down 65.2% year over year.
Pre-tax adjusted operating loss of the Traditional segment was $50 million, up 31.6% year over year on a timing benefit on an annual premium treaty and favorable claims experience. Premiums increased 8.9% to $540 million in the quarter. Foreign currency exchange rates had a favorable effect on net premiums of $3 million in the quarter.
Financial Solutions' pre-tax adjusted operating income increased 16.9% year over year to $90 million and reflected favorable overall experience
Asia/Pacific: Total pre-tax adjusted operating income was $165 million, which decreased 1.8% from the year-ago quarter.
The Traditional segment’s pre-tax adjusted operating income was $106 million, which decreased 2.7% from the year-ago quarter. Foreign currency exchange rates had a favorable effect of $23 million on pre-tax adjusted operating income. Premiums increased 8.5% to $777 million in the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income was flat year over year at $66 million. Foreign currency exchange rates had a favorable effect of $1 million on pre-tax adjusted operating income. Premiums increased 143% to $112 million in the quarter.
Corporate and Other: Pre-tax adjusted operating loss was $70 million, wider than the year-ago quarter’s loss of $38 million. The higher loss was primarily due to lower variable investment income.