U.S life reinsurance company, Reinsurance Group of America (RGA), has reported net income of $617 million for the full year 2021 in spite of pre-tax COVID-19 claims of around $1.4 billion.
Year-on-year, RGA’s 2021 net income swelled by more than 48%, while operating income fell dramatically, from $496 million in 2020 to $77 million in 2021. For Q4, net income increased to $156 million, although RGA has reported a quarterly operating loss of $38 million.
Throughout the year, RGA’s performance was heavily impacted by the COVID-19 pandemic and the data shows that the majority of claims hit its U.S. and Latin America segment. Here, RGA has reported total segment costs of roughly $852 million related to the pandemic, as well as excess individual mortality claims believed to be directly or indirectly related to COVID-19.
In the fourth quarter, RGA has announced global estimated pre-tax COVID-19 claims of roughly $350 million and again the U.S. and Latin America segment took the largest hit. Total segment costs in Q4 2021 totalled around $276 million in the segment, again alongside excess individual mortality claims believed to be directly or indirectly related.
The life reinsurer explains that, “COVID-19 impact estimates include mortality and morbidity claims of approximately $351 million with offsetting impacts from longevity of approximately $1 million in the quarter, mortality and morbidity claims of approximately $1.4 billion with offsetting impacts from longevity of approximately $54 million in the full year.”
For the full year, the firm’s net premiums jumped by $11.7 billion to $12.5 billion, while quarterly net premiums increased from almost $3.3 billion to more than $3.4 billion, year-on-year.
Anna Manning, President and Chief Executive Officer (CEO) of RGA, commented: “Our fourth quarter was impacted by a meaningful level of COVID-19 mortality claims. Beyond the effect of COVID-19, our results were strong, as a number of our businesses performed well. We continue to see good new business activity both in our organic business and in the pipeline for in-force transactions.
“On the capital front, we deployed $106 million into in-force transactions and repurchased $50 million of common shares. Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $1.3 billion.”
