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RGA’s net income and premiums up in Q4

29th January 2020 - Author: Luke Gallin

Global life reinsurer, Reinsurance Group of America (RGA), has reported net income and premium growth for both the fourth-quarter and full-year 2019.

Reinsurance Group of America logoAt $235 million, RGA’s Q4 2019 net income improved by roughly 114% from the $110 million posted a year earlier, contributing to an increase in full-year net income of more than 21% to $870 million, when compared with 2018.

At the same time, the life reinsurer’s net premiums also grew in the fourth-quarter, from $2.8 billion to just under $3 billion, with adverse net foreign currency effects of $5 million. For the full-year 2019, RGA’s net premiums totalled $11.3 billion, up on the $10.5 billion posted in 2018.

The company’s President and Chief Executive Officer (CEO), Anna Manning, commented: “Our operating results were modestly below our expectations this quarter, while the full-year results were above our expectations. We can point to strong organic growth and active capital deployment as favorable indicators of the strength of our business, and we continue to benefit from the earnings diversity that comes from our global platform.

“In the quarter, we produced strong overall results in EMEA, excellent results from Financial Solutions across all geographies, and the U.S. Group business performed above expectations. These areas of strength partially offset a loss in Australia and unfavorable U.S. Individual Mortality experience.

RMS

“We had an active quarter as we deployed approximately $78 million of capital into in-force and other transactions, bringing the year-to-date total to $465 million. We remain well positioned and optimistic about the environment and our pipeline. We ended the quarter with an excess capital position of approximately $900 million.”

As noted by Manning, adjusted operating income fell slightly in the quarter to $219 million, but did increase to $853 million for the full-year.

Excluding spread-based business and the value of associated derivatives, RGA’s investment income jumped 10% year-on-year in 2019, which it attributes to asset growth of 8% and higher variable investment income.

“The full year featured numerous highlights, including excellent Financial Solutions results across all geographies, strong overall results in EMEA and Canada, a strong rebound in our U.S. Group operations, vibrant top-line growth and in-line adjusted operating income in Asia.

“Looking forward, we remain optimistic about the future and our business prospects, as RGA is well positioned in its markets and we are executing on our proven strategy. We have a long track record of successful execution and strong financial results, and our intermediate-term financial outlook remains unchanged,” added Manning.

It’s also been revealed by the firm that during the fourth-quarter, RGA changed the name of its Financial Reinsurance operation within the U.S. and Latin America Financial Solutions segment to Capital Solutions. RGA notes that this new name better describes the solutions on offer for this part of the business.

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