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RGA falls to $22mn Q3 loss off COVID-19 claims

5th November 2021 - Author: Charlie Wood

Reinsurance Group of America, a US-based life reinsurer, has reported a third quarter net loss of $22 million, down from a $213 million net income in the prior-year quarter.

Reinsurance Group of America logoAdjusted operating losses totaled $75 million, compared with adjusted operating income of $239 million in the prior period.

Consolidated net premiums totaled $3.1 billion, an increase of 9.5% over last year’s third quarter, with a favorable net foreign currency effect of $51 million.

The firm’s US & Latin America segment fell to a pre-tax loss of $126 million after having previously secured an income of $14 million.

This reflects COVID-19 claim costs of approximately $250 million, as well as excess individual mortality claims believed to be directly or indirectly related to COVID-19.

Europe, Middle East and Africa (EMEA) fell to a pre-tax loss of $91 million, against a $7 million income last year.

This segment’s results is reported to have been impact by roughly $80 million of COVID-19 claim costs, driven primarily by experience in South Africa and to a lesser extent the UK, as well as excess mortality claims believed to be directly or indirectly related to COVID-19.

“Our third quarter reflected strong underlying earnings, demonstrating the value and resilience of our diversified global business, although COVID-19 claim costs were material in the quarter,” said Anna Manning, President and Chief Executive Officer.

“We continue to see encouraging new business activity both in our organic business and in the pipeline for in-force transactions. Reported premiums were up 9.5%.

“On the capital front, we deployed $140 million into in-force transactions and repurchased $46 million of common shares at an average price of $113.37.

“In addition, we completed an attractive asset-intensive retrocession transaction generating $94 million in capital. These actions demonstrate our commitment to effective and efficient capital management. Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $1.0 billion.

“While our results will continue to reflect COVID-19 claims, we expect them to continue to be manageable.”

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