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RGA Earnings Call: Strategic Wins Amid Challenges

RGA Earnings Call: Strategic Wins Amid Challenges

Reinsurance Group Of America ((RGA)) has held its Q2 earnings call. Read on for the main highlights of the call.

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The recent earnings call for Reinsurance Group of America (RGA) revealed a generally positive sentiment, highlighting strong strategic achievements and improvements in capital position. Despite facing challenges such as claims volatility and issues in the healthcare excess business, the company demonstrated resilience and a commitment to growth.

Strong Capital Position

RGA reported a significant increase in excess capital, reaching $3.8 billion at the end of Q2. This robust capital position provides the company with the flexibility needed for growth initiatives and returning value to shareholders.

Successful Transactions

The company successfully closed the Equitable transaction, effective April 1, which is expected to contribute approximately $70 million to pretax operating income in the latter half of 2025.

Global Business Expansion

In a historic achievement, RGA won asset-intensive transactions across five countries on three continents, marking a significant milestone in its global expansion strategy.

Strong Investment Performance

RGA’s investment results were impressive, with variable investment income reaching $105 million. This performance was driven by gains from limited partnerships and real estate joint venture sales.

Premium Growth

The company experienced an 11% increase in traditional business premiums on a constant currency basis during the first half of 2025, indicating strong momentum in its core operations.

Claims Volatility Impact

Operating results fell short of expectations due to significant claims volatility in U.S. individual life and unfavorable claims in the healthcare excess business, highlighting areas for improvement.

Healthcare Excess Business Challenges

The U.S. group healthcare excess business faced unfavorable claims, consistent with broader industry trends, which negatively impacted financial results.

Higher Effective Tax Rate

RGA’s effective tax rate was 25.2%, exceeding the anticipated range due to valuation allowances on foreign tax credits, affecting the company’s overall financial performance.

Forward-Looking Guidance

Looking ahead, RGA aims to maintain a balance between business deployment and shareholder returns, targeting to return 20% to 30% of after-tax operating earnings through dividends and share repurchases. The company remains focused on aligning its operations with intermediate-term targets, despite the challenges faced in claims volatility.

In summary, the earnings call for Reinsurance Group of America painted a picture of a company with strong strategic achievements and a solid capital position, despite facing some challenges. The company is well-positioned for future growth, with a clear focus on expanding its global footprint and enhancing shareholder value.

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