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Reinsurance Group (RGA)
NYSE:RGA
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Reinsurance Group
(NYSE:RGA)
Rating:66Neutral
Price Target:
$207.00
▲(9.34% Upside)
Positive Factors
Capital Flexibility
The increase in excess capital provides RGA with greater flexibility for growth initiatives and shareholder returns, strengthening its long-term financial stability and strategic positioning.
Global Expansion
Successful global transactions highlight RGA's strong international platform, enhancing its market reach and diversification, which are crucial for sustained growth and competitive advantage.
New Business Growth
The robust growth in traditional business premiums indicates strong demand and effective market strategies, supporting long-term revenue growth and profitability.
Negative Factors
Claims Volatility
Claims volatility poses a risk to earnings stability, impacting financial performance and requiring effective risk management to mitigate potential long-term impacts.
Operational Challenges
Declining free cash flow growth may limit liquidity and investment capacity, challenging RGA's ability to fund growth initiatives and maintain operational efficiency.
Tax Rate Concerns
Higher than expected tax rates can reduce net income and affect financial planning, potentially impacting long-term profitability and cash flow management.
Reinsurance Group (RGA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.70B
Dividend Yield1.9%
Average Volume (3M)462.76K
Price to Earnings (P/E)16.7
Beta (1Y)0.70
Revenue Growth1.53%
EPS Growth-10.27%
CountryUS
Employees4,100
SectorFinancial
Sector Strength70
IndustryInsurance - Reinsurance
Share Statistics
EPS (TTM)4.72
Shares Outstanding66,093,750
10 Day Avg. Volume345,620
30 Day Avg. Volume462,757
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.50
Enterprise Value/Revenue0.88
Enterprise Value/Gross Profit1.63
Enterprise Value/Ebitda15.43
Forecast
1Y Price Target
$235.50Price Target Upside24.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Reinsurance Group Business Overview & Revenue Model
Company DescriptionReinsurance Group of America, Incorporated (RGA) is a leading global provider of life and health reinsurance, operating in multiple sectors including individual life, group life, health insurance, and financial solutions. With a presence in over 25 countries, RGA partners with insurance companies to provide them with risk management and capital management solutions through a variety of reinsurance products and services, helping them to manage their underwriting risks and enhance their profitability.
How the Company Makes MoneyRGA generates revenue primarily through the premiums it receives from ceding insurers for the reinsurance coverage it provides. The company underwrites reinsurance contracts, which can encompass life, health, and financial products, allowing ceding insurers to transfer a portion of their risk in exchange for premium payments. Key revenue streams include traditional life reinsurance, health reinsurance, and financial reinsurance, with the latter involving products like longevity risk and capital management solutions. RGA also earns investment income from the premiums it holds before claims are paid out, as well as from its investment portfolio. Strategic partnerships with various insurance firms globally enhance RGA's market position and contribute to its earnings by broadening its customer base and diversifying its risk exposure.
Reinsurance Group Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant achievements in capital increase, global transactions, and new business growth. However, it was overshadowed by claims volatility and unfavorable healthcare excess claims, leading to below-expectation results. The company's strategic successes are promising for future growth, but current operational challenges need attention.Q2-2025 Updates
Positive Updates
Increase in Excess Capital
During the quarter, there was a significant increase in RGA's excess and deployable capital measures, reaching $3.8 billion, which provides more flexibility for future growth and shareholder returns.
Successful Global Transactions
RGA closed asset-intensive transactions in 5 different countries across 3 continents for the first time, demonstrating the strength of RGA's global platform.
Strong New Business Growth
The traditional business premiums rose by 11% on a constant currency basis for the first 6 months of the year, maintaining robust margins.
Completion of Equitable Transaction
RGA successfully closed the Equitable transaction with an effective date of April 1, which is expected to contribute significantly to earnings in the coming years.
Negative Updates
Claims Volatility Impacting U.S. Individual Life
The quarter's results were below expectations due to large claims volatility in U.S. individual life and unfavorable claims in the healthcare excess business.
Unfavorable Healthcare Excess Claims
Claims in the U.S. group healthcare excess business were higher than expected, impacted by more expensive treatments. The majority of this block will be repriced by January 2026.
Higher Effective Tax Rate
The effective tax rate for the quarter was 25.2%, above the expected range of 23% to 24%, primarily due to valuation allowances on foreign tax credits.
Company Guidance
During the Reinsurance Group of America's (RGA) second quarter 2025 earnings call, the company reported an operating EPS of $4.72 per share, with an adjusted operating return on equity of 14.3% for the trailing 12 months, excluding notable items. Despite a strong first quarter, operating results this quarter were below expectations due to claims volatility in U.S. individual life and unfavorable claims in the healthcare excess business. Strategic achievements included a significant increase in excess and deployable capital, reaching $3.8 billion and $3.4 billion, respectively, giving RGA more flexibility for growth and shareholder returns. Throughout the quarter, RGA closed asset-intensive transactions across five countries and experienced an 11% increase in traditional business premiums on a constant currency basis. The company's success in new business activities, particularly in Asia and the U.K. PRT market, coupled with strong investment results, underscored their strategic focus on innovative solutions and risk management. Despite challenges, RGA remained confident in their strategy, projecting continued strong returns and growth prospects.Reinsurance Group Financial Statement Overview
Summary
Reinsurance Group demonstrates strong revenue growth and cash generation capabilities, providing a solid financial foundation. Despite some pressure on net margins and ROE, the company maintains a stable balance sheet and impressive cash flow performance, suggesting resilience and the ability to capitalize on revenue growth.Income Statement
The income statement shows a strong revenue growth with a TTM revenue increase of 19.75% compared to the previous year. The gross profit margin is excellent at 96.20% for TTM, indicating efficient cost management. However, the net profit margin has decreased to 3.27% from 4.92% in the previous year, highlighting some profitability challenges. The EBIT margin stands at 5.21%, with the EBITDA margin reduced to 2.09% due to increased expenses.75
Positive
Balance Sheet
The balance sheet is stable with a debt-to-equity ratio of 0.47, which is reasonable for the insurance industry. The company's equity ratio is healthy at 9.12%, though there's room for improvement. Return on equity has decreased to 6.63%, down from last year's 9.93%, reflecting a decline in efficiency in generating profits from shareholders' equity.82
Very Positive
Cash Flow
Cash flow metrics are robust, with a significant operating cash flow increase to $7.77 billion in TTM. Free cash flow growth is strong at 92.16% year-over-year, indicating excellent cash generation. The operating cash flow to net income ratio is high at 10.84, demonstrating efficient conversion of income into cash.85
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.70B | 22.11B | 18.57B | 16.26B | 16.66B | 14.60B |
| Gross Profit | 11.70B | 22.11B | 17.48B | 15.25B | 15.72B | 13.78B |
| EBITDA | 1.24B | 1.33B | 1.42B | 909.00M | 1.57B | 736.00M |
| Net Income | 770.00M | 717.00M | 902.00M | 517.00M | 617.00M | 415.00M |
Balance Sheet | ||||||
| Total Assets | 133.48B | 118.67B | 97.62B | 84.90B | 92.17B | 84.66B |
| Cash, Cash Equivalents and Short-Term Investments | 91.46B | 5.50B | 63.66B | 55.98B | 63.78B | 60.37B |
| Total Debt | 5.73B | 5.04B | 4.43B | 4.36B | 3.85B | 3.96B |
| Total Liabilities | 121.34B | 107.77B | 88.45B | 77.73B | 79.16B | 70.30B |
| Stockholders Equity | 12.05B | 10.82B | 9.08B | 7.08B | 13.01B | 14.35B |
Cash Flow | ||||||
| Free Cash Flow | 4.92B | 9.37B | 4.04B | 1.34B | 4.16B | 3.29B |
| Operating Cash Flow | 4.92B | 9.37B | 4.04B | 1.34B | 4.18B | 3.32B |
| Investing Cash Flow | -8.24B | -12.54B | -4.07B | -5.69B | -4.63B | -2.68B |
| Financing Cash Flow | 4.04B | 3.66B | 78.00M | 4.44B | 20.00M | 1.25B |
Reinsurance Group Technical Analysis
Negative
189.32
Price Trends
191.16
Negative
194.67
Negative
198.95
Negative
Market Momentum
0.42
Positive
45.01
Neutral
48.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGA, the sentiment is Negative. The current price of 189.32 is below the 20-day moving average (MA) of 192.66, below the 50-day MA of 191.16, and below the 200-day MA of 198.95, indicating a bearish trend. The MACD of 0.42 indicates Positive momentum. The RSI at 45.01 is Neutral, neither overbought nor oversold. The STOCH value of 48.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RGA.
Reinsurance Group Risk Analysis
Reinsurance Group disclosed 40 risk factors in its most recent earnings report. Reinsurance Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Reinsurance Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $11.64B | 6.31 | 18.75% | 0.65% | 23.19% | -22.42% | |
82 Outperform | $2.40B | 6.40 | 15.86% | ― | 28.86% | -11.22% | |
72 Outperform | $14.65B | 18.20 | 5.52% | 2.35% | 10.40% | -71.67% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $12.70B | 16.72 | 7.07% | 1.90% | 1.53% | -10.27% | |
64 Neutral | $2.22B | 21.20 | 4.82% | ― | -4.56% | -55.48% | |
61 Neutral | $429.19M | 11.46 | 5.82% | ― | 2.18% | -41.11% |
* Financial Sector Average
Performance Comparison
RGA
Reinsurance Group
189.32
-25.43
-11.84%
EG
Everest Group
339.84
-40.96
-10.76%
GLRE
Greenlight Capital Re
12.55
-1.50
-10.68%
RNR
Renaissancere Holdings
243.50
-20.80
-7.87%
SPNT
SiriusPoint
18.54
4.37
30.84%
HG
Hamilton Insurance Group, Ltd. Class B
24.16
6.36
35.73%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.