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RGA income stable in Q2, net premiums up 7%

30th July 2019 - Author: Matt Sheehan

Reinsurance Group of America (RGA) has reported net income of $202.7 million for the second quarter of 2019, consistent with its result of $204.4 million for the same period in 2018.

Reinsurance Group of America logoOn an adjusted basis, earnings increased modestly to $210.8 million, compared with $202.1 million in Q2 2018.

Although income remained stable, the Group still increased its consolidated net premiums by 7% to $2.8 billion, up from $2.6 billion in the prior year period.

Additionally, investment income increased 7% versus a year ago, reflecting asset growth of 6%. Total investment gains for Q2 were $12.5 million, improving from a loss of $10.5 million in 2018.

In the US and Latin America, income was down by 23% for RGA’s traditional segment and by 10% for its financial reinsurance business, but was up by 20% for its asset intensive business.

RMS

In Canada, income for the traditional segment business more than doubled to $46.4 million was up modestly for financial solutions, while in EMEA traditional income was also up significantly at $16.1 million, but was down 21% for financial solutions.

Finally, in Asia Pacific, RGA’s traditional segment income slumped 41% in Q2 2019 despite a 13% increase in premiums, while income in the financial solutions segment similarly sank from $4.1 million to $1.9 million in contrast to premium growth.

“This was a solid quarter for us, with a number of positives,” said Anna Manning, President and Chief Executive Officer at RGA. “Income slightly exceeded our expectations, and we experienced strong momentum both from organic growth and in-force transactions.”

“The benefits from our global operating platform helped to deliver diverse earnings in the quarter, as strong results in U.S. Financial Solutions, EMEA and Canada offset some modest weakness elsewhere,” she continued.

“This quarter we deployed $185 million of capital into a number of in-force and other transactions across a range of product areas and geographies, bringing our year-to-date total to $236 million. We ended the quarter with an excess capital position of approximately $1.0 billion.”

Looking at RGA’s performance over the first half of 2019, the company recorded a stronger result, with net income up 22% to $372.2 million, compared with $304.6 million in H1 2018.

Net premiums for the period also increased 6% to $5.5 billion, while investment income was up 11% to $1.0 billion.

Manning further stated: “We are optimistic about our business, and in recognition of our ongoing earnings power, the board increased the common stock dividend by 17%, marking the tenth straight year of double-digit percentage increases.”

“RGA is well positioned for expanding opportunities, we have a proven strategy and a proven track record of execution, and we expect to continue to produce attractive financial returns,” she added.

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