In its third-quarter release, Reinsurance Group of America (RGA) reported third quarter net income available to RGA shareholders of $456 million, or $6.92 per diluted share, compared with $253 million, or $3.81 per diluted share, in the prior-year quarter.
Adjusted Operating Income and Returns on Equity Set Out in the Release
Adjusted operating income for the third quarter totaled $558 million, or $8.49 per diluted share, compared with $310 million, or $4.66 per diluted share, in the prior-year quarter. Excluding notable items, the prior-year quarter figure was $424 million, or $6.37 per diluted share.
On returns, RGA reported return on equity (“ROE”) of 13.1%; adjusted operating ROE of 19.2%; adjusted operating ROE, excluding notable items, of 19.1%, each for the trailing twelve months.
Net Premium Growth and the Pension Risk Transfer Contribution in the U.S. Financial Solutions Business
RGA stated that, in the third quarter, consolidated net premiums totaled $5.4 billion, an increase of 25.0% compared with the prior-year quarter, with an adverse net foreign currency effect of $16 million. Net premiums for the quarter included approximately $800 million from single premium pension risk transfer transactions, which are included in the U.S. Financial Solutions business, compared with no contribution from these transactions in the prior-year quarter. InsuraBeat has separate coverage of RGA’s push into Japanese life reinsurance.
Investment Income, Average Investment Yield and Effective Tax Rates Against the Expected Range
According to RGA’s earnings release, investment income for the quarter, excluding spread-based businesses, increased 17.5% compared with the prior-year quarter. RGA also stated that Average investment yield was 5.26% in the quarter compared with 4.73% in the prior-year quarter.
On taxes, RGA stated in the release that the effective tax rate for the quarter was 26.8% on pre-tax income, above the expected range of 22% to 23% and that the rate for the quarter was 24.1% on adjusted operating income before taxes, above the expected range of 22% to 23%. InsuraBeat has separate coverage of Manulife’s long-term care block reinsurance deal with Munich Re.
Annual Actuarial Assumption Review, Shareholder Capital Return and the Chief Executive’s Comments
RGA completed its annual actuarial assumption review. There was no net impact to consolidated pre-tax adjusted operating income as a result of this review. RGA also stated it Returned $139 million to shareholders in the quarter, including $75 million in share repurchases and $64 million in dividends paid. On the dividend, the release says the Board of Directors declared a regular quarterly dividend of $0.98, payable December 1, 2026.
The release quotes the chief executive. Tony Cheng, President and Chief Executive Officer, commented, “RGA delivered excellent results this quarter with strong performance across all regions.” InsuraBeat has separate coverage of Lincoln’s guaranteed universal life reserve cession to Talcott.
Frequently Asked Questions
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Source Document
RGA’s earnings release is available on the SEC website.
