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RGA reports dip in Q4 net income; $300mn of COVID-19 claims

9th February 2021 - Author: Luke Gallin

Life reinsurer Reinsurance Group of America, Incorporated (RGA) has reported net income of $132 million for the fourth-quarter of 2020 and consolidated net premiums of $3.3 billion for the period.

Reinsurance Group of America logoNet income declined for the reinsurer from the $235 million reported in Q4 2019, while net premiums increased by 9% for the firm.

RGA’s fourth-quarter 2020 results include global estimated COVID-19 claims of around $300 million, taking the reinsurer’s full-year hit from the pandemic to an estimated $720 million.

For the full-year 2020, net income fell from $870 million to $415 million; while net premiums increased from $11.3 billion in 2019 to $11.7 billion in 2020.

Anna Manning, RGA’s President and Chief Executive Officer (CEO), commented: “Results benefited from our diversified global platform with a number of our segments performing very well this quarter; our overall premium growth was a solid 9%, and we were successful in closing a number of in-force transactions. Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $1.3 billion.

RMS

“Our fourth quarter and full-year results were negatively impacted by a significant level of COVID-19 mortality claim costs, resulting in earnings that were lower than would have been expected in a normal quarter and year. While we expect our results to continue to be affected by COVID-19 in the short term, the RGA franchise has shown resilience and produced very good results in many respects. We believe that our strong financial condition and global business platform position us to both successfully manage through the immediate challenges and create substantial long-term value.”

In Q4 2020, RGA’s Traditional U.S. & Latin America segment fell to a loss of $92 million, which reflects the negative impact from individual mortality estimated COVID-19-related claim costs of roughly $230 million.

For the full-year, the segment recorded losses of $298 million compared with a gain of $265 million a year earlier, which reflects the negative impact from individual mortality estimated COVID-19-related claim costs of approximately $545 million.

In Financial Solutions, RGA has reported Q4 2020 income of $96 million against $78 million a year earlier.

RGA’s Canada Traditional unit has reported income of $37 million for Q4 2020 against $28 million in Q4 2019. For the full-year, income reached $134 million, which is down slightly on the $168 million posted a year earlier.

The company’s EMEA Traditional segment fell to a loss of $13 million in the quarter, compared with income of $23 million a year earlier. And, in Asia-Pacific Traditional, RGA has announced income $25 million for the quarter, against $12 million in the prior year period.

“I am proud of how our organization has performed in this challenging environment. Our employees have demonstrated perseverance, dedication and flexibility, and have kept our operations running smoothly. Because of this, RGA has continued to deliver on our promises and supported our clients and their customers around the globe,” said Manning.

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