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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)




~~(Mark One)~~
OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) x		~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)~~
		OF THE SECURITIES EXCHANGE ACT OF 1934
		~~For the quarterly period ended September 30, 2017~~
		OR
¨		~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)~~
¨		~~OF THE SECURITIES EXCHANGE ACT OF 1934~~
		Commission File Number 1-11848

REINSURANCE GROUP OF AMERICA, INCORPORATED

(Exact name of Registrant as specified in its charter)



~~MISSOURI~~ Missouri						43-1627032
(State or other jurisdiction						(IRS employer
of incorporation or organization)						identification number)

16600 Swingley Ridge Road

Chesterfield, Missouri 63017

(Address of principal executive offices)

(636) 736-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer x Accelerated filer o Non-accelerated filer o

Smaller reporting company o☐ Emerging growth company o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ~~Exchange~~ Act). Yes ☐ No ☒

~~Yes~~ o No xSecurities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01

RGA

New York Stock Exchange

6.20% Fixed-To-Floating Rate Subordinated Debentures due 2042

RZA

New York Stock Exchange

5.75% Fixed-To-Floating Rate Subordinated Debentures due 2056

RZB

New York Stock Exchange

As of ~~October 31, 2017, 64,404,061~~April 30, 2022, 66,989,863 shares of the registrant’s common stock were outstanding.

Table of Contents

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

TABLE OF CONTENTS


Item		Page

	PART I – FINANCIAL INFORMATION

1	Financial Statements
	Condensed Consolidated Balance Sheets (Unaudited) March 31, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Income (Unaudited) Three months ended March 31, 2022 and 2021	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three months ended March 31, 2022 and 2021	5
	Condensed Consolidated Statements of Equity (Unaudited) Three months ended March 31, 2022 and 2021	6
	Condensed Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, 2022 and 2021	7
	Notes to Condensed Consolidated Financial Statements (Unaudited):	8
	1. Business and Basis of Presentation	8
	2. Earnings Per Share	8
	3. Equity	9
	4. Investments	11
	5. Derivative Instruments	19
	6. Fair Value of Assets and Liabilities	23
	7. Segment Information	29
	8. Commitments, Contingencies and Guarantees	31
	9. Income Tax	32
	10. Employee Benefit Plans	33
	11. Reinsurance	33
	12. Policy Claims and Benefits	34
	13. New Accounting Standards	35
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
3	Quantitative and Qualitative Disclosure About Market Risk	61
4	Controls and Procedures	61

	PART II – OTHER INFORMATION

1	Legal Proceedings	62
1A	Risk Factors	62
2	Unregistered Sales of Equity Securities and Use of Proceeds	62
6	Exhibits	62
	Index to Exhibits	63
	Signatures	64

Item       Page

   PART I – FINANCIAL INFORMATION

1
Financial Statements


Condensed Consolidated Balance Sheets (Unaudited)
September 30, 2017 and December 31, 2016

3

Condensed Consolidated Statements of Income (Unaudited)
Three and nine months ended September 30, 2017 and 2016

4

Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Three and nine months ended September 30, 2017 and 2016

5

Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine months ended September 30, 2017 and 2016

6

Notes to Condensed Consolidated Financial Statements (Unaudited):

7

     1. Business and Basis of Presentation

7

     2. Earnings Per Share

7

     3. Equity

8

     4. Investments

10

     5. Derivative Instruments

20

     6. Fair Value of Assets and Liabilities

28

     7. Segment Information

43

     8. Commitments, Contingencies and Guarantees

44

     9. Income Tax

45

     10. Employee Benefit Plans

46

     11. Reinsurance

46

     12. New Accounting Standards

47
2
Management’s Discussion and Analysis of
Financial Condition and Results of Operations

49
3
Quantitative and Qualitative Disclosures About Market Risk

81
4
Controls and Procedures

82

   PART II – OTHER INFORMATION

1
Legal Proceedings

83
1A
Risk Factors

83
2
Unregistered Sales of Equity Securities and Use of Proceeds

83
6
Exhibits

83

Signatures

85

Index to Exhibits

84

Table of Contents

PART I - FINANCIAL INFORMATION

~~ITEM 1. Financial Statements~~

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

(Unaudited)


	September 30, 2017			December 31, 2016
	(Dollars in thousands, except share data)							March 31, 2022		December 31, 2021
Assets							Assets
Fixed maturity securities:
Available-for-sale at fair value (amortized cost of $33,889,968 and $30,211,787)	$	36,381,742		$	32,093,625
Mortgage loans on real estate (net of allowances of $9,137 and $7,685)	4,322,329			3,775,522
Fixed maturity securities available-for-sale, at fair value (amortized cost of $57,849 and $55,873; allowance for credit losses of $42 and $31)							Fixed maturity securities available-for-sale, at fair value (amortized cost of $57,849 and $55,873; allowance for credit losses of $42 and $31)	$	57,922	$	60,749
Equity securities, at fair value							Equity securities, at fair value	139		151
Mortgage loans on real estate (net of allowance for credit losses of $37 and $35)							Mortgage loans on real estate (net of allowance for credit losses of $37 and $35)	6,535		6,283
Policy loans	1,340,146			1,427,602			Policy loans	1,221		1,234
Funds withheld at interest	6,020,336			5,875,919			Funds withheld at interest	6,737		6,954
Short-term investments	80,582			76,710			Short-term investments	315		87
Other invested assets	1,532,523			1,591,940			Other invested assets	3,033		3,070
Total investments	49,677,658			44,841,318			Total investments	75,902		78,528
Cash and cash equivalents	1,204,590			1,200,718			Cash and cash equivalents	2,709		2,948
Accrued investment income	420,111			347,173			Accrued investment income	578		533
Premiums receivable and other reinsurance balances	2,411,777			1,930,755			Premiums receivable and other reinsurance balances	2,883		2,888
Reinsurance ceded receivables	779,118			683,972			Reinsurance ceded receivables	2,595		2,580
Deferred policy acquisition costs	3,315,237			3,338,605			Deferred policy acquisition costs	3,797		3,690
Other assets	885,540			755,338			Other assets	1,297		1,008
Total assets	$	58,694,031		$	53,097,879		Total assets	$	89,761	$	92,175
Liabilities and Stockholders’ Equity
Liabilities and Equity							Liabilities and Equity
Future policy benefits	$	21,084,562		$	19,581,573		Future policy benefits	$	35,946	$	35,782
Interest-sensitive contract liabilities	16,370,090			14,029,354			Interest-sensitive contract liabilities	28,083		26,377
Other policy claims and benefits	4,899,367			4,263,026			Other policy claims and benefits	7,079		6,993
Other reinsurance balances	415,692			388,989			Other reinsurance balances	582		613
Deferred income taxes	3,180,545			2,770,640			Deferred income taxes	1,843		2,886
Other liabilities	1,061,352			1,041,880			Other liabilities	3,123		2,663

Long-term debt	2,788,480			3,088,635			Long-term debt	3,667		3,667
Collateral finance and securitization notes	796,825			840,700			Collateral finance and securitization notes	166		180
Total liabilities	50,596,913			46,004,797			Total liabilities	80,489		79,161
Commitments and contingent liabilities (See Note 8)							Commitments and contingent liabilities (See Note 8)	0		0
Stockholders’ Equity:
Preferred stock - par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding	—			—
Common stock - par value $.01 per share, 140,000,000 shares authorized, 79,137,758 shares issued at September 30, 2017 and December 31, 2016	791			791
Additional paid-in capital	1,865,699			1,848,611
Equity:							Equity:
Preferred stock – par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding							Preferred stock – par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding	—		—
Common stock – par value $.01 per share, 140,000,000 shares authorized, 85,310,598 shares issued at March 31, 2022 and December 31, 2021							Common stock – par value $.01 per share, 140,000,000 shares authorized, 85,310,598 shares issued at March 31, 2022 and December 31, 2021	1		1
Additional paid-in-capital							Additional paid-in-capital	2,465		2,461
Retained earnings	5,712,590			5,199,130			Retained earnings	8,446		8,563
Treasury stock, at cost - 14,769,487 and 14,835,256 shares	(1,107,719		)	(1,094,779		)
Accumulated other comprehensive income	1,625,757			1,139,329
Total stockholders’ equity	8,097,118			7,093,082
Total liabilities and stockholders’ equity	$	58,694,031		$	53,097,879
Treasury stock, at cost – 18,322,345 and 18,139,868 shares							Treasury stock, at cost – 18,322,345 and 18,139,868 shares	(1,675)		(1,653)
Accumulated other comprehensive income (loss)							Accumulated other comprehensive income (loss)	(55)		3,642
Total Reinsurance Group of America, Inc. stockholders’ equity							Total Reinsurance Group of America, Inc. stockholders’ equity	9,182		13,014
Noncontrolling interest							Noncontrolling interest	90		—
Total equity							Total equity	9,272		13,014
Total liabilities and equity							Total liabilities and equity	$	89,761	$	92,175

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts)

(Unaudited)


	Three months ended September 30,					Nine months ended September 30,							Three months ended March 31,
	2017			2016		2017			2016					2022		2021
Revenues:	(Dollars in thousands, except per share data)											Revenues:
Net premiums	$	2,489,797		$	2,251,758	$	7,335,944		$	6,755,708		Net premiums		$	3,155	$	2,914
Investment income, net of related expenses	556,918			489,727		1,589,820			1,414,659
Investment related gains (losses), net:
Other-than-temporary impairments on fixed maturity securities	(390		)	—		(20,980		)	(34,663		)
Other investment related gains (losses), net	23,043			86,624		160,451			118,665
Total investment related gains (losses), net	22,653			86,624		139,471			84,002
Net investment income												Net investment income		810		812

Investment related gains (losses), net												Investment related gains (losses), net		(126)		302
Other revenues	75,942			72,468		218,091			197,844			Other revenues		91		91
Total revenues	3,145,310			2,900,577		9,283,326			8,452,213			Total revenues		3,930		4,119
Benefits and Expenses:												Benefits and Expenses:
Claims and other policy benefits	2,100,680			1,993,064		6,371,188			5,877,330			Claims and other policy benefits		3,225		3,192
Interest credited	126,099			116,848		349,068			300,602			Interest credited		141		146
Policy acquisition costs and other insurance expenses	365,424			300,962		1,064,645			940,406			Policy acquisition costs and other insurance expenses		355		333
Other operating expenses	168,417			152,556		481,279			469,875			Other operating expenses		226		214
Interest expense	36,836			43,063		108,590			96,201			Interest expense		42		45
Collateral finance and securitization expense	7,692			6,484		21,235			19,396			Collateral finance and securitization expense		1		3
Total benefits and expenses	2,805,148			2,612,977		8,396,005			7,703,810			Total benefits and expenses		3,990		3,933
Income before income taxes	340,162			287,600		887,321			748,403
Income (loss) before income taxes												Income (loss) before income taxes		(60)		186
Provision for income taxes	112,571			88,881		282,028			237,109			Provision for income taxes		3		47
Net income	$	227,591		$	198,719	$	605,293		$	511,294
Net income (loss)												Net income (loss)		$	(63)	$	139
Earnings per share:												Earnings per share:
Basic earnings per share	$	3.53		$	3.10	$	9.39		$	7.95		Basic earnings per share		$	(0.93)	$	2.04
Diluted earnings per share	$	3.47		$	3.07	$	9.23		$	7.87		Diluted earnings per share		$	(0.93)	$	2.03
Dividends declared per share	$	0.50		$	0.41	$	1.32		$	1.15

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Comprehensive income (Dollars in thousands)
Net income $ 227,591
$ 198,719
$ 605,293
$ 511,294
Other comprehensive income, net of tax:
Foreign currency translation adjustments 46,733
(28,233 ) 68,085
59,442
Net unrealized investment gains (93,574 ) 254,658
415,870
1,445,776
Defined benefit pension and postretirement plan adjustments 700
527
2,473
(1,176 )
Total other comprehensive income, net of tax (46,141 ) 226,952
486,428
1,504,042
Total comprehensive income $ 181,450
$ 425,671
$ 1,091,721
$ 2,015,336


	Three months ended March 31,
		2022		2021
Comprehensive income (loss)
Net income (loss)		$	(63)	$	139
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		13		30
Net unrealized investment gains (losses)		(3,710)		(2,387)

Defined benefit pension and postretirement plan adjustments		—		—
Total other comprehensive income (loss), net of tax		(3,697)		(2,357)
Total comprehensive income (loss)		$	(3,760)	$	(2,218)

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in millions except per share amounts)

(Unaudited)


	Reinsurance Group of America, Inc. Stockholders’ Equity
	Common Stock		Additional Paid In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total RGA, Inc. Stockholders’ Equity		Noncontrolling Interest		Total Equity
Balance, December 31, 2021	$	1	$	2,461	$	8,563	$	(1,653)	$	3,642	$	13,014	$	—	$	13,014
Issuance of preferred interests by subsidiary											—		90		90
Net income					(63)						(63)				(63)
Total other comprehensive income (loss)									(3,697)		(3,697)				(3,697)
Dividends to stockholders, $0.73 per share					(49)						(49)				(49)
Purchase of treasury stock							(27)				(27)				(27)
Reissuance of treasury stock			4		(5)		5				4				4
Balance, March 31, 2022	$	1	$	2,465	$	8,446	$	(1,675)	$	(55)	$	9,182	$	90	$	9,272


	Reinsurance Group of America, Inc. Stockholders’ Equity
	Common Stock		Additional Paid In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total RGA, Inc. Stockholders’ Equity		Noncontrolling Interest		Total Equity
Balance, December 31, 2020	$	1	$	2,406	$	8,148	$	(1,562)	$	5,359	$	14,352	$	—	$	14,352
Issuance of preferred interests by subsidiary											—				—
Net income					139						139				139
Total other comprehensive income (loss)									(2,357)		(2,357)				(2,357)
Dividends to stockholders, $0.70 per share					(48)						(48)				(48)
Purchase of treasury stock							(1)				(1)				(1)
Reissuance of treasury stock			5		(4)		4				5				5
Balance, March 31, 2021	$	1	$	2,411	$	8,235	$	(1,559)	$	3,002	$	12,090	$	—	$	12,090

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(Unaudited)~~

(in millions)

Nine months ended September 30,
2017 2016

(Dollars in thousands)
Cash Flows from Operating Activities:
Net income $ 605,293
$ 511,294
Adjustments to reconcile net income to net cash provided by operating activities:
Change in operating assets and liabilities:
Accrued investment income (63,321 ) (58,863 )
Premiums receivable and other reinsurance balances (421,027 ) (3,619 )
Deferred policy acquisition costs 67,471
(15,059 )
Reinsurance ceded receivable balances (120,013 ) (77,741 )
Future policy benefits, other policy claims and benefits, and other reinsurance balances 982,164
479,606
Deferred income taxes 236,185
165,988
Other assets and other liabilities, net 78,848
29,343
Amortization of net investment premiums, discounts and other (95,227 ) (55,967 )
Depreciation and amortization expense 21,384
19,489
Investment related (gains) losses, net (139,471 ) (84,002 )
Other, net (47,787 ) 109,403
Net cash provided by operating activities 1,104,499
1,019,872
Cash Flows from Investing Activities:
Sales of fixed maturity securities available-for-sale 6,364,236
3,649,187
Maturities of fixed maturity securities available-for-sale 385,993
349,836
Sales of equity securities 192,821
331,978
Principal payments on mortgage loans on real estate 208,052
377,671
Principal payments on policy loans 93,286
59,518
Purchases of fixed maturity securities available-for-sale (7,450,749 ) (5,938,302 )
Purchases of equity securities (60,790 ) (523,499 )
Cash invested in mortgage loans on real estate (751,702 ) (857,445 )
Cash invested in policy loans (5,830 ) (5,685 )
Cash invested in funds withheld at interest (12,597 ) (31,222 )
Purchases of property and equipment (33,242 ) —
Change in short-term investments 65,664
418,625
Change in other invested assets (51,476 ) (78,068 )
Net cash used in investing activities (1,056,334 ) (2,247,406 )
Cash Flows from Financing Activities:
Dividends to stockholders (85,086 ) (74,034 )
Repayment of collateral finance and securitization notes (56,637 ) (60,971 )
Proceeds from long-term debt issuance —
799,984
Debt issuance costs —
(9,026 )
Principal payments of long-term debt (301,927 ) (1,850 )
Purchases of treasury stock (41,360 ) (121,896 )
Exercise of stock options, net 4,450
11,752
Change in cash collateral for derivative positions and other arrangements (46,206 ) 24,749
Deposits on universal life and other investment type policies and contracts 1,007,563
874,708
Withdrawals on universal life and other investment type policies and contracts (568,789 ) (386,900 )
Net cash provided by financing activities (87,992 ) 1,056,516
Effect of exchange rate changes on cash 43,699
25,436
Change in cash and cash equivalents 3,872
(145,582 )
Cash and cash equivalents, beginning of period 1,200,718
1,525,275
Cash and cash equivalents, end of period $ 1,204,590
$ 1,379,693
Supplemental disclosures of cash flow information:
Interest paid $ 129,136
$ 114,043
Income taxes paid, net of refunds $ 27,385
$ 47,312
Non-cash transactions:
Transfer of invested assets $ 2,247,136
$ 3,621
(Unaudited)


	Three months ended March 31,
	2022		2021
















Net cash provided by operating activities	163		2,366
Cash Flows from Investing Activities:
Sales of fixed maturity securities available-for-sale	2,608		2,738
Maturities of fixed maturity securities available-for-sale	228		216
Sales of equity securities	4		1
Principal payments on mortgage loans on real estate	188		164
Principal payments on policy loans	13		10
Purchases of fixed maturity securities available-for-sale	(4,762)		(5,293)

Cash invested in mortgage loans on real estate	(443)		(356)
Cash invested in policy loans	—		(4)
Cash invested in funds withheld at interest, net	(5)		(26)
Purchases of property and equipment	(6)		(4)
Change in short-term investments	(232)		64
Change in other invested assets	172		(2)
Net cash used in investing activities	(2,235)		(2,492)
Cash Flows from Financing Activities:
Dividends to stockholders	(49)		(48)
Repayment of collateral finance and securitization notes	(14)		(42)
Principal payments of long-term debt	(1)		(1)
Purchases of treasury stock	(27)		(1)
Change in cash collateral for derivative positions and other arrangements	(6)		(25)
Change in deposit asset on reinsurance	(3)		—
Deposits to investment-type policies and contracts	2,369		255
Withdrawals from investment-type policies and contracts	(505)		(281)
Issuance of preferred interests by subsidiary	90		—
Net cash provided by (used in) financing activities	1,854		(143)
Effect of exchange rate changes on cash	(21)		(17)
Change in cash and cash equivalents	(239)		(286)
Cash and cash equivalents, beginning of period	2,948		3,408
Cash and cash equivalents, end of period	$	2,709	$	3,122
Supplemental disclosures of cash flow information:
Interest paid	$	33	$	36
Income taxes paid, net of refunds	$	81	$	61

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)


1.	~~Business and Basis of Presentation~~

1. Business and Basis of Presentation

Business

Reinsurance Group of America, Incorporated (“RGA”) is an insurance holding company that was formed on December 31, 1992. ~~The accompanying unaudited condensed consolidated financial statements of~~ RGA and its subsidiaries (collectively, the “Company”) is engaged in providing traditional reinsurance, which includes individual and group life and health, disability and critical illness reinsurance. The Company also provides financial solutions, which includes longevity reinsurance, asset-intensive products, primarily annuities, financial reinsurance, capital solutions and stable value products.

Basis of Presentation

The unaudited condensed consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation ~~S-X.~~S-X of the Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial ~~statements.~~ statements and should be read in conjunction with the Company’s 2021 Annual Report on Form 10-K filed with the SEC on February 25, 2022 (the “2021 Annual Report”).

In the opinion of management, all adjustments, including normal recurring adjustments necessary for a fair presentation have been included. ~~Results for the nine months ended September 30, 2017~~Interim results are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~ 2022.

Consolidation

These unaudited condensed consolidated financial statements include the accounts of RGA and its subsidiaries and all intercompany accounts and transactions have been eliminated. ~~These condensed~~Entities in which the Company has significant influence over the operating and financing decisions but are not required to be consolidated ~~statements should be read in conjunction with~~are reported under the ~~Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 28, 2017 (the “2016 Annual Report”).~~equity method of accounting.


2.	~~Earnings Per Share~~

2. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share on net income (in ~~thousands,~~millions, except per share information):


	Three months ended March 31,
		2022		2021
Earnings:
Net income (loss)		$	(63)	$	139
Shares:
Weighted average outstanding shares		67		68
Equivalent shares from outstanding stock awards		1		—
Denominator for diluted calculation		68		68
Earnings per share:
Basic		$	(0.93)	$	2.04
Diluted		$	(0.93)	$	2.03

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Earnings:
Net income (numerator for basic and diluted calculations) $ 227,591
$ 198,719
$ 605,293
$ 511,294
Shares:
Weighted average outstanding shares (denominator for basic calculation) 64,488
64,146
64,430
64,281
Equivalent shares from outstanding stock options 1,165
669
1,174
663
Denominator for diluted calculation 65,653
64,815
65,604
64,944
Earnings per share:
Basic $ 3.53
$ 3.10
$ 9.39
$ 7.95
Diluted $ 3.47
$ 3.07
$ 9.23
$ 7.87
As a result of the net loss for the three months ended March 31, 2022, the Company is required to use basic weighted average common shares outstanding of 67 million in the calculation of diluted loss per share, since the inclusion of shares for outstanding stock awards would be anti-dilutive to the loss per share calculations.

The calculation of common equivalent shares does not include the impact of ~~options having~~stock awards with a ~~strike or~~ conversion price that exceeds the average stock price for the earnings period as the result would be antidilutive. The calculation of common equivalent shares also excludes the impact of outstanding performance contingent ~~shares,~~awards as the conditions necessary for their issuance have not been satisfied as of the end of the reporting period. ~~For the three months ended~~ ~~September 30, 2017, 0.1~~Approximately 1.2 million stock ~~options~~awards and approximately ~~0.3~~0.2 million performance contingent shares were excluded from the ~~calculation. For~~calculation of common equivalent shares during the three months ended ~~September 30, 2016~~, no stock options and approximately 0.7 million performance contingent shares were excluded from the calculation. Year-to-date amounts for equivalent shares from outstanding stock options and performance contingent shares are the weighted average of the individual quarterly amounts.March 31, 2022.

Table of Contents

3. Equity


3.	~~Equity~~

Common ~~Stock~~stock

The changes in number of common stock shares issued, held in treasury and outstanding are as follows for the periods indicated:


	Issued	Held In Treasury	Outstanding
Balance, December 31, 2021	85,310,598	18,139,868	67,170,730

Common stock acquired	—	219,116	(219,116)
Stock-based compensation (1)	—	(36,639)	36,639
Balance, March 31, 2022	85,310,598	18,322,345	66,988,253

Issued Held In Treasury Outstanding
Balance, December 31, 2016 79,137,758
14,835,256
64,302,502
Common stock acquired —
208,680
(208,680 )
Stock-based compensation ⁽¹⁾
—
(274,449 ) 274,449
Balance, September 30, 2017 79,137,758
14,769,487
64,368,271


	Issued	Held In Treasury	Outstanding
Balance, December 31, 2020	85,310,598	17,353,697	67,956,901
Common Stock acquired	—	—	—
Stock-based compensation (1)	—	(28,342)	28,342
Balance, March 31, 2021	85,310,598	17,325,355	67,985,243

(1)Represents net shares issued from treasury pursuant to the Company’s equity-based compensation programs.

Issued Held In Treasury Outstanding
Balance, December 31, 2015 79,137,758
13,933,232
65,204,526
Common stock acquired —
1,356,892
(1,356,892 )
Stock-based compensation ⁽¹⁾
—
(358,639 ) 358,639
Balance, September 30, 2016 79,137,758
14,931,485
64,206,273


~~(1)~~	~~Represents net shares issued from treasury pursuant to the Company’s equity-based compensation programs.~~

Common Stock Held in Treasury

Common stock held in treasury is accounted for at average cost. Gains resulting from the reissuance of common stock held in treasury are credited to additional paid-in capital. Losses resulting from the reissuance of common stock held in treasury are charged first to additional paid-in capital to the extent the Company has previously recorded gains on treasury share transactions, then to retained earnings.

On January ~~26, 2017,~~24, 2019, RGA’s board of directors authorized a share repurchase program for up to ~~$400.0~~$400 million of RGA’s outstanding common stock. During the three months ended March 31, 2022, RGA repurchased 219,116 shares of common stock under this program for $25 million.

On February 25, 2022, RGA’s board of directors authorized a share repurchase program for up to $400 million of RGA’s outstanding common stock. The authorization was effective immediately and does not have an expiration date. In connection with this ~~new~~ authorization, the board of directors terminated the stock repurchase authority granted in ~~2016.~~2019. During the ~~first nine~~three months ~~of 2017,~~ended March 31, 2022, RGA ~~repurchased 0.2 million~~did not repurchase any shares of common stock under this ~~program~~program.

Noncontrolling Interest

In 2022, Papara Financing LLC (“Papara”), a subsidiary of RGA Reinsurance Company, issued nonconvertible preferred interests to an unaffiliated third party. Papara holds investments in mortgage loans on real estate.

The membership interests in Papara consist of (1) common interests, which are held by RGA Reinsurance Company and (2) preferred interests. The preferred interests total $90 million and pay an initial preferred distribution at an annual rate of 2.375% plus three month LIBOR. The applicable rate of interest is reset every five years. Distributions are paid quarterly, if declared by Papara. RGA can call the Papara preferred interests at the issue price beginning five years from the issuance date or upon the receipt of proceeds from the sale of the underlying assets.

The holders of the Papara preferred interests have the option to require redemption upon the occurrence of certain contingent events, such as the failure of Papara to pay the preferred distribution for ~~$26.9 million.~~two or more periods or to meet certain other requirements, including a minimum credit rating. If notice is given upon such an event, all other holders of equal or more subordinate classes of membership interests in Papara are entitled to receive the same form of consideration payable to the holders of the preferred interests, resulting in a deemed liquidation for accounting purposes. The preferred interests are included in noncontrolling interest, and net income attributable to noncontrolling interest was $0.4 million for the three months ended March 31, 2022.

Table of Contents

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of accumulated other comprehensive income (loss) (“AOCI”) for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 are as follows (dollars in ~~thousands)~~millions):


	Accumulated Other Comprehensive Income (Loss), Net of Income Tax
	Accumulated Currency Translation Adjustments		Unrealized Appreciation (Depreciation) of Investments(1)		Pension and Postretirement Benefits		Total
Balance, December 31, 2021	$	(9)	$	3,701	$	(50)	$	3,642
Other comprehensive income (loss) before reclassifications	14		(4,888)		(1)		(4,875)
Amounts reclassified to (from) AOCI	—		138		1		139
Deferred income tax benefit (expense)	(1)		1,040		—		1,039
Balance, March 31, 2022	$	4	$	(9)	$	(50)	$	(55)


														Accumulated Other Comprehensive Income (Loss), Net of Income Tax
	Accumulated Currency Translation Adjustments			Unrealized Appreciation (Depreciation) of Investments⁽¹⁾			Pension and Postretirement Benefits			Total				Accumulated Currency Translation Adjustments		Unrealized Appreciation (Depreciation) of Investments(1)		Pension and Postretirement Benefits		Total
Balance, December 31, 2016	$	(172,541	)	$	1,355,033		$	(43,163	)	$	1,139,329
Balance, December 31, 2020													Balance, December 31, 2020	$	(69)	$	5,500	$	(72)	$	5,359
Other comprehensive income (loss) before reclassifications	23,117			671,564			(191		)	694,490			Other comprehensive income (loss) before reclassifications	35		(2,947)		(1)		(2,913)
Amounts reclassified to (from) AOCI	—			(51,407		)	4,006			(47,401		)	Amounts reclassified to (from) AOCI	—		(113)		1		(112)
Deferred income tax benefit (expense)	44,968			(204,287		)	(1,342		)	(160,661		)	Deferred income tax benefit (expense)	(5)		673		—		668
Balance, September 30, 2017	$	(104,456	)	$	1,770,903		$	(40,690	)	$	1,625,757
Balance, March 31, 2021													Balance, March 31, 2021	$	(39)	$	3,113	$	(72)	$	3,002

Accumulated
Currency
Translation
Adjustments

Unrealized
Appreciation
(Depreciation)
of Investments⁽¹⁾

Pension and
Postretirement
Benefits
Total
Balance, December 31, 2015 $ (181,151 ) $ 935,697
$ (46,262 ) $ 708,284
Other comprehensive income (loss) before reclassifications 68,271
2,191,823
(6,079 ) 2,254,015
Amounts reclassified to (from) AOCI —
(109,145 ) 4,253
(104,892 )
Deferred income tax benefit (expense) (8,829 ) (636,902 ) 650
(645,081 )
Balance, September 30, 2016 $ (121,709 ) $ 2,381,473
$ (47,438 ) $ 2,212,326


~~(1)~~	(1)Includes cash flow hedges of $347 and $(2,496) as of September 30, 2017 and December 31, 2016, respectively, and $(40,597) and $(29,397) as of September 30, 2016 and December 31, 2015, respectively. See Note 5 - “Derivative Instruments” for additional information on cash flow hedges.

~~Table~~ of ~~Contents~~

$(81) and $(22) as of March 31, 2022 and December 31, 2021, respectively, and $(71) and $(49) as of March 31, 2021 and December 31, 2020, respectively. See Note 5 – “Derivative Instruments” for additional information on cash flow hedges.

The following table presents the amounts of AOCI reclassifications for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 (dollars in ~~thousands)~~millions):


		Amount Reclassified from AOCI
	Three months ended March 31,			Affected Line Item in Statement of Income
Details about AOCI Components		2022				2021
Net unrealized investment gains (losses):
Net unrealized gains (losses) on available-for-sale securities		$	(35)	$	157		Investment related gains (losses), net

Cash flow hedges – Currency/Interest rate		(1)		(2)			(1)

Deferred policy acquisition costs attributed to unrealized gains and losses		(102)		(42)			(2)
Total		(138)		113
Provision for income taxes		29		(24)
Net unrealized gains (losses), net of tax		$	(109)	$	89
Amortization of defined benefit plan items:
Prior service cost (credit)		$	—	$	—		(3)
Actuarial gains (losses)		(1)		(1)			(3)
Total		(1)		(1)
Provision for income taxes		—		—
Amortization of defined benefit plans, net of tax		$	(1)	$	(1)

Total reclassifications for the period		$	(110)	$	88

(1)See Note 5 – “Derivative Instruments” for additional information on cash flow hedges.

(2)This AOCI component is included in the computation of the deferred policy acquisition cost. See Note 8 – “Deferred Policy Acquisition Costs” of the 2021 Annual Report for additional details.

(3)This AOCI component is included in the computation of the net periodic pension cost. See Note 10 – “Employee Benefit Plans” for additional details.

Amount Reclassified from AOCI
Three months ended September 30, Nine months ended September 30,
Details about AOCI Components 2017 2016 2017 2016
Affected Line Item in
Statements of Income
Net unrealized investment gains (losses):
Net unrealized gains and losses on available-for-sale securities $ 10,515
$ 72,351
$ 39,032
$ 84,250
Investment related gains (losses), net
Cash flow hedges - Currency/Interest rate 230
200
560
454
(1)
Cash flow hedges - Forward bond purchase commitments 224
137
286
(120 ) (1)
Deferred policy acquisition costs attributed to unrealized gains and losses 1,116
12,090
11,529
24,561
(2)
Total 12,085
84,778
51,407
109,145

Provision for income taxes (3,991 ) (27,680 ) (16,015 ) (32,676 )
Net unrealized gains (losses), net of tax $ 8,094
$ 57,098
$ 35,392
$ 76,469

Amortization of defined benefit plan items:
Prior service cost (credit) $ 590
$ 391
$ 732
$ 238
(3)
Actuarial gains/(losses) (1,661 ) (1,177 ) (4,738 ) (4,491 ) (3)
Total (1,071 ) (786 ) (4,006 ) (4,253 )
Provision for income taxes 375
276
1,402
1,489

Amortization of defined benefit plans, net of tax $ (696 ) $ (510 ) $ (2,604 ) $ (2,764 )

Total reclassifications for the period $ 7,398
$ 56,588
$ 32,788
$ 73,705


~~(1)~~	~~See Note 5 - “Derivative Instruments” for additional information on cash flow hedges.~~


~~(2)~~	~~This AOCI component is included in the computation of the deferred policy acquisition cost. See Note 8 – “Deferred Policy Acquisition Costs” of the 2016 Annual Report for additional details.~~


~~(3)~~	~~This AOCI component is included in the computation of the net periodic pension cost. See Note 10 – “Employee Benefit Plans” for additional details.~~

Table of Contents

Equity Based Compensation

Equity compensation expense was ~~$17.1~~$4 million and ~~$27.1~~$5 million infor the ~~first nine~~three months ~~of 2017~~ended March 31, 2022 and ~~2016,~~2021, respectively. In the first quarter of ~~2017,~~2022, the Company granted ~~0.2 million~~258,327 stock appreciation rights at ~~$129.72~~$106.53 weighted average exercise price per share, ~~and 0.2 million~~78,687 performance contingent shares and 215,601 restricted stock units to employees. ~~Additionally, non-employee directors were granted a total of 7,696 shares of common stock.~~ As of ~~September 30, 2017, 1.6 million~~March 31, 2022, 1,736,018 share ~~options~~awards at a weighted average strike price per share of ~~$60.77~~$105.02 were vested and exercisable with a remaining weighted average exercise period of ~~4.6~~4.5 years. As of ~~September 30, 2017,~~March 31, 2022, the total compensation cost of non-vested awards not yet recognized in the condensed consolidated financial statements was ~~$32.5~~$50 million. It is estimated that these costs will vest over a weighted average period of ~~1.2~~0.9 years.

94. Investments

~~Table of Contents~~


4.	~~Investments~~

Fixed Maturity ~~and Equity~~ Securities Available-for-Sale

The Company holds various types of fixed maturity securities available-for-sale and classifies them as corporate securities (“Corporate”), Canadian and Canadian provincial government securities (“Canadian government”), residential mortgage-backed securities (“RMBS”), asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), U.S. government and agencies (“U.S. government”), state and political subdivisions, and other foreign government, supranational and foreign government-sponsored enterprises (“Other foreign government”). RMBS, ABS and CMBS are collectively “structured securities.”

The following tables provide information relating to investments in fixed maturity ~~and equity~~ securities by ~~sector~~type as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


March 31, 2022:	Amortized		Allowance for		Unrealized		Unrealized		Estimated Fair		% of
	Cost		Credit Losses		Gains		Losses		Value		Total
Available-for-sale:
Corporate	$	36,813	$	33	$	954	$	1,354	$	36,380	62.8	%
Canadian government	3,381		—		1,038		12		4,407		7.6
RMBS	983		—		11		28		966		1.7
ABS	3,915		5		5		169		3,746		6.5
CMBS	1,829		1		6		48		1,786		3.1
U.S. government	1,587		—		7		69		1,525		2.6
State and political subdivisions	1,206		—		50		47		1,209		2.1
Other foreign government	8,135		3		110		339		7,903		13.6
Total fixed maturity securities	$	57,849	$	42	$	2,181	$	2,066	$	57,922	100.0	%

September 30, 2017: Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value % of Total Other-than-
temporary impairments in AOCI
Available-for-sale:
Corporate securities $ 21,418,741
$ 1,209,999
$ 92,910
$ 22,535,830
61.9 % $ —
Canadian and Canadian provincial governments 2,850,982
1,142,635
2,432
3,991,185
11.0
—
Residential mortgage-backed securities 1,645,379
42,202
8,276
1,679,305
4.6
—
Asset-backed securities 1,680,918
18,713
5,063
1,694,568
4.7
275
Commercial mortgage-backed securities 1,293,296
25,471
5,445
1,313,322
3.6
—
U.S. government and agencies 1,621,053
13,614
30,998
1,603,669
4.4
—
State and political subdivisions 614,099
52,919
5,987
661,031
1.8
—
Other foreign government, supranational and foreign government-sponsored enterprises 2,765,500
145,025
7,693
2,902,832
8.0
—
Total fixed maturity securities $ 33,889,968
$ 2,650,578
$ 158,804
$ 36,381,742
100.0 % $ 275
Non-redeemable preferred stock $ 41,878
$ 312
$ 3,289
$ 38,901
34.4 %
Other equity securities 74,514
633
1,117
74,030
65.6

Total equity securities $ 116,392
$ 945
$ 4,406
$ 112,931
100.0 %


December 31, 2021:	Amortized		Allowance for		Unrealized		Unrealized		Estimated Fair		% of
	Cost		Credit Losses		Gains		Losses		Value		Total
Available-for-sale:
Corporate	$	35,239	$	26	$	3,084	$	194	$	38,103	62.8	%
Canadian government	3,339		—		1,606		1		4,944		8.1
RMBS	1,020		—		37		7		1,050		1.7
ABS	4,024		—		22		41		4,005		6.6
CMBS	1,790		1		66		6		1,849		3.0
U.S. government	2,082		—		31		8		2,105		3.5
State and political subdivisions	1,191		—		137		5		1,323		2.2
Other foreign government	7,188		4		273		87		7,370		12.1
Total fixed maturity securities	$	55,873	$	31	$	5,256	$	349	$	60,749	100.0	%

December 31, 2016: Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value % of Total Other-than-
temporary impairments in AOCI
Available-for-sale:
Corporate securities $ 18,924,711
$ 911,618
$ 217,245
$ 19,619,084
61.1 % $ —
Canadian and Canadian provincial governments 2,561,605
1,085,982
3,541
3,644,046
11.4
—
Residential mortgage-backed securities 1,258,039
33,917
13,380
1,278,576
4.0
(375 )
Asset-backed securities 1,443,822
9,350
23,828
1,429,344
4.5
275
Commercial mortgage-backed securities 1,342,440
28,973
7,759
1,363,654
4.2
—
U.S. government and agencies 1,518,702
12,644
63,044
1,468,302
4.6
—
State and political subdivisions 566,761
37,499
12,464
591,796
1.8
—
Other foreign government, supranational and foreign government-sponsored enterprises 2,595,707
123,054
19,938
2,698,823
8.4
—
Total fixed maturity securities $ 30,211,787
$ 2,243,037
$ 361,199
$ 32,093,625
100.0 % $ (100 )
Non-redeemable preferred stock $ 55,812
$ 1,648
$ 6,337
$ 51,123
18.6 %
Other equity securities 229,767
1,792
7,321
224,238
81.4

Total equity securities $ 285,579
$ 3,440
$ 13,658
$ 275,361
100.0 %

The Company enters into various collateral arrangements with counterparties that require both the pledging and acceptance of fixed maturity securities as collateral. Pledged fixed maturity securities are included in fixed maturity securities available-for-sale in the condensed consolidated balance sheets. Fixed maturity securities received as collateral are held in separate custodial accounts and are not recorded on the Company’s condensed consolidated balance sheets. Subject to certain constraints, the Company is permitted by contract to sell or repledge collateral it receives; however, as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~,2021, none of the collateral received had been sold or repledged. The Company also holds assets in trust to satisfy collateral requirements under derivative transactions and certain third-party reinsurance treaties. The following table includes fixed maturity securities pledged and received as collateral and assets in trust held to satisfy collateral requirements under derivative transactions and certain third-party reinsurance treaties as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):

Table of Contents


	September 30, 2017				December 31, 2016					March 31, 2022				December 31, 2021
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value			Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Fixed maturity securities pledged as collateral	$	68,841	$	72,365	$	207,066	$	210,676	Fixed maturity securities pledged as collateral	$	181	$	173	$	100	$	103
Fixed maturity securities received as collateral	n/a		461,237		n/a		300,925		Fixed maturity securities received as collateral	n/a		1,743		n/a		1,922
Assets in trust held to satisfy collateral requirements	14,598,404		15,598,457		12,135,258		12,874,370		Assets in trust held to satisfy collateral requirements	29,136		29,077		28,671		31,173

The Company monitors its concentrations of financial instruments on an ongoing basis and mitigates credit risk by maintaining a diversified investment portfolio ~~which~~that limits exposure to any one issuer. The Company’s exposure to concentrations of credit risk from single issuers greater than 10% of the Company’s ~~stockholders’~~ equity included securities of the U.S. government and its agencies, as well as the securities disclosed below, as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions).


	March 31, 2022				December 31, 2021
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Fixed maturity securities guaranteed or issued by:
Government of Japan	$	3,887	$	3,742	$	3,080	$	3,063
Canadian province of Quebec	1,409		2,062		1,377		2,347
Canadian province of Ontario	1,063		1,288		1,092		1,451

September 30, 2017 December 31, 2016

Amortized
Cost

Estimated
Fair Value

Amortized
Cost

Estimated
Fair Value
Fixed maturity securities guaranteed or issued by:
Canadian province of Quebec $ 1,115,505
$ 1,766,749
$ 1,004,261
$ 1,612,957
Canadian province of Ontario 932,872
1,231,201
832,764
1,126,433

The amortized cost and estimated fair value of fixed maturity securities classified as available-for-sale at ~~September 30, 2017~~as of March 31, 2022, are shown by contractual maturity in the table below (dollars in ~~thousands)~~millions). Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. ~~Asset and mortgage-backed~~Structured securities are shown separately in the table below, as they are not due at a single maturity date.


	Amortized Cost		Estimated Fair Value			Amortized Cost		Estimated Fair Value
Available-for-sale:					Available-for-sale:
Due in one year or less	$	910,821	$	915,586	Due in one year or less	$	1,511	$	1,517
Due after one year through five years	7,339,134		7,618,692		Due after one year through five years	10,009		10,112
Due after five years through ten years	9,581,912		10,090,704		Due after five years through ten years	11,862		11,776
Due after ten years	11,438,508		13,069,565		Due after ten years	27,740		28,019
Asset and mortgage-backed securities	4,619,593		4,687,195
Structured securities					Structured securities	6,727		6,498
Total	$	33,889,968	$	36,381,742	Total	$	57,849	$	57,922

Corporate Fixed Maturity Securities

The tables below show the major ~~industry types~~sectors of the Company’s corporate fixed maturity holdings as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


March 31, 2022:			Estimated
	Amortized Cost		Fair Value		% of Total
Finance	$	13,839	$	13,599	37.4	%
Industrial	18,496		18,382		50.5
Utility	4,478		4,399		12.1

Total	$	36,813	$	36,380	100.0	%

December 31, 2021:			Estimated
	Amortized Cost		Fair Value		% of Total
Finance	$	13,101	$	14,045	36.9	%
Industrial	17,857		19,375		50.8
Utility	4,281		4,683		12.3
Total	$	35,239	$	38,103	100.0	%

September 30, 2017: Estimated
Amortized Cost Fair Value % of Total
Finance $ 7,797,576
$ 8,146,891
36.2 %
Industrial 11,323,024
11,914,845
52.8
Utility 2,298,141
2,474,094
11.0
Total $ 21,418,741
$ 22,535,830
100.0 %

December 31, 2016: Estimated
Amortized Cost Fair Value % of Total
Finance $ 6,725,199
$ 6,888,968
35.2 %
Industrial 10,228,813
10,639,613
54.2
Utility 1,970,699
2,090,503
10.6
Total $ 18,924,711
$ 19,619,084
100.0 %

Table of Contents

~~Other-Than-Temporary~~Allowance for Credit Losses and Impairments - – Fixed Maturity ~~and Equity~~ Securities Available-for-Sale

As discussed in Note 2 – ~~“Summary of Significant~~“Significant Accounting ~~Policies”~~Policies and Pronouncements” of the ~~2016~~Company’s 2021 Annual Report, ~~a portion of certain other-than-temporary impairment (“OTTI”)~~allowances for credit losses on fixed maturity securities isare recognized in ~~AOCI. For these securities, the net~~investment related gains (losses), net. The amount recognized ~~in the condensed consolidated statements of income (“credit loss impairments”)~~ represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the ~~debt~~fixed maturity security prior to ~~impairment.~~the allowance for credit losses. Any remaining difference between the fair value and amortized cost is recognized in ~~AOCI.~~ OCI.

The following ~~table sets forth~~tables present the ~~amount~~rollforward of ~~pre-tax~~the allowance for credit ~~loss impairments on~~losses in fixed maturity securities ~~held~~ by type for the ~~Company as of the dates indicated, for which a portion of the OTTI loss was recognized~~three months ended March 31, 2022 and 2021 (dollars in ~~AOCI, and the corresponding changes in such amounts (dollars in thousands)~~millions):


For the three months ended March 31, 2022:
	Corporate		ABS		CMBS		Other Foreign Government		Total
Balance, beginning of period	$	26	$	—	$	1	$	4	$	31
Credit losses recognized on securities for which credit losses were not previously recorded	6		5		—		—		11
Reductions for securities sold during the period	(1)		—		—		(1)		(2)
Additional increases or decreases for credit losses on securities that had an allowance recorded in a previous period	2		—		—		—		2
Balance, end of period	$	33	$	5	$	1	$	3	$	42


For the three months ended March 31, 2021:											For the three months ended March 31, 2021:
												Corporate		ABS		CMBS		Other Foreign Government		Total
Balance, beginning of period											Balance, beginning of period	$	17	$	—	$	3	$	—	$	20
Credit losses recognized on securities for which credit losses were not previously recorded											Credit losses recognized on securities for which credit losses were not previously recorded	—		—		1		5		6

Reductions for securities sold during the period											Reductions for securities sold during the period	(1)		—		(2)		—		(3)

Additional increases or decreases for credit losses on securities that had an allowance recorded in a previous period											Additional increases or decreases for credit losses on securities that had an allowance recorded in a previous period	—		—		(1)		—		(1)

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017			2016
Balance, beginning of period	$	3,677	$	6,974	$	6,013		$	7,284
Credit loss OTTI previously recognized on securities which matured, paid down, prepaid or were sold during the period	—		—		(2,336		)	(310		)
Balance, end of period	$	3,677	$	6,974	$	3,677		$	6,974		Balance, end of period	$	16	$	—	$	1	$	5	$	22

Unrealized Losses for Fixed Maturity ~~and Equity~~ Securities Available-for-Sale

The following table presents the total gross unrealized losses for the 1,165 and 1,535 fixed maturity and equity securities as of September 30, 2017 and December 31, 2016, respectively, where the estimated fair value had declined and remained below amortized cost by the indicated amount (dollars in thousands):

September 30, 2017 December 31, 2016

Gross
Unrealized
Losses
% of Total
Gross
Unrealized
Losses
% of Total
Less than 20% $ 140,313
86.0 % $ 337,831
90.1 %
20% or more for less than six months 3,407
2.1
19,438
5.2
20% or more for six months or greater 19,490
11.9
17,588
4.7
Total $ 163,210
100.0 % $ 374,857
100.0 %

The Company’s determination of whether a decline in value ~~is other-than-temporary includes analysis of~~necessitates the ~~underlying credit and the extent and duration of a decline in value. The Company’s credit analysis~~recording of an ~~investment~~allowance for credit losses includes ~~determining~~an analysis of whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment. In the Company’s impairment review process, the duration and severity of an unrealized loss position for equity securities are given greater weight and consideration given the lack of contractual cash flows or deferability features.

The following tables present the estimated fair ~~values~~value and gross unrealized losses ~~including other-than-temporary impairment losses reported in AOCI,~~ for ~~1,165~~the 4,136 and ~~1,535~~1,862 fixed maturity securities for which an allowance for credit loss has not been recorded as of March 31, 2022 and ~~equity securities that have~~December 31, 2021, and the estimated fair ~~values~~value had declined and remained below amortized cost ~~as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, respectively~~ (dollars in ~~thousands)~~millions). These investments are presented by class and grade of security, as well as the length of time the related fair value has continuously remained below amortized cost.

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	Less than 12 months				12 months or greater				Total
			Gross				Gross				Gross
March 31, 2022:	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Investment grade securities:
Corporate	$	15,156	$	1,082	$	1,161	$	186	$	16,317	$	1,268
Canadian government	127		8		15		4		142		12
RMBS	400		15		137		13		537		28
ABS	2,632		139		604		18		3,236		157
CMBS	1,178		40		34		3		1,212		43
U.S. government	1,148		64		27		5		1,175		69
State and political subdivisions	460		42		30		5		490		47
Other foreign government	4,287		218		727		83		5,014		301
Total investment grade securities	25,388		1,608		2,735		317		28,123		1,925
Below investment grade securities:
Corporate	878		50		108		33		986		$	83

ABS	22		2		9		2		31		4
CMBS	28		2		9		1		37		3
Other foreign government	172		15		102		23		274		38
Total below investment grade securities	1,100		69		228		59		1,328		128
Total fixed maturity securities	$	26,488	$	1,677	$	2,963	$	376	$	29,451	$	2,053

Less than 12 months 12 months or greater Total
Gross Gross Gross
September 30, 2017: Estimated Unrealized Estimated Unrealized Estimated Unrealized
Fair Value Losses Fair Value Losses Fair Value Losses
Investment grade securities:
Corporate securities $ 2,035,856
$ 15,923
$ 1,213,026
$ 49,422
$ 3,248,882
$ 65,345
Canadian and Canadian provincial governments 97,100
1,320
46,663
1,112
143,763
2,432
Residential mortgage-backed securities 507,372
5,084
154,469
3,189
661,841
8,273
Asset-backed securities 516,613
2,318
133,848
2,213
650,461
4,531
Commercial mortgage-backed securities 293,834
3,224
61,707
2,221
355,541
5,445
U.S. government and agencies 1,302,732
29,712
56,595
1,286
1,359,327
30,998
State and political subdivisions 53,977
743
62,530
5,156
116,507
5,899
Other foreign government, supranational and foreign government-sponsored enterprises 327,813
2,529
104,333
4,865
432,146
7,394
Total investment grade securities 5,135,297
60,853
1,833,171
69,464
6,968,468
130,317

Below investment grade securities:

Corporate securities 170,023
3,780
95,089
23,785
265,112
27,565
Residential mortgage-backed securities —
—
93
3
93
3
Asset-backed securities —
—
5,611
532
5,611
532
State and political subdivisions 919
88
—
—
919
88
Other foreign government, supranational and foreign government-sponsored enterprises 11,219
77
15,667
222
26,886
299
Total below investment grade securities 182,161
3,945
116,460
24,542
298,621
28,487
Total fixed maturity securities $ 5,317,458
$ 64,798
$ 1,949,631
$ 94,006
$ 7,267,089
$ 158,804
Non-redeemable preferred stock $ 6,712
$ 345
$ 25,983
$ 2,944
$ 32,695
$ 3,289
Other equity securities 6,446
396
58,206
721
64,652
1,117
Total equity securities $ 13,158
$ 741
$ 84,189
$ 3,665
$ 97,347
$ 4,406

Less than 12 months 12 months or greater Total
Gross Gross Gross
December 31, 2016: Estimated Unrealized Estimated Unrealized Estimated Unrealized
Fair Value Losses Fair Value Losses Fair Value Losses
Investment grade securities:
Corporate securities $ 4,661,706
$ 124,444
$ 549,273
$ 43,282
$ 5,210,979
$ 167,726
Canadian and Canadian provincial governments 101,578
3,541
—
—
101,578
3,541
Residential mortgage-backed securities 490,473
9,733
112,216
3,635
602,689
13,368
Asset-backed securities 563,259
12,010
257,166
9,653
820,425
21,663
Commercial mortgage-backed securities 368,465
6,858
10,853
166
379,318
7,024
U.S. government and agencies 1,056,101
63,044
—
—
1,056,101
63,044
State and political subdivisions 187,194
9,396
13,635
3,068
200,829
12,464
Other foreign government, supranational and foreign government-sponsored enterprises 524,236
13,372
51,097
2,981
575,333
16,353
Total investment grade securities 7,953,012
242,398
994,240
62,785
8,947,252
305,183
Below investment grade securities:
Corporate securities 330,757
7,914
163,152
41,605
493,909
49,519
Residential mortgage-backed securities —
—
412
12
412
12
Asset-backed securities 5,904
700
12,581
1,465
18,485
2,165
Commercial mortgage-backed securities 5,815
735
—
—
5,815
735
Other foreign government, supranational and foreign government-sponsored enterprises 32,355
1,258
39,763
2,327
72,118
3,585
Total below investment grade securities 374,831
10,607
215,908
45,409
590,739
56,016
Total fixed maturity securities $ 8,327,843
$ 253,005
$ 1,210,148

$ 108,194
$ 9,537,991
$ 361,199
Non-redeemable preferred stock $ 10,831
$ 831
$ 21,879
$ 5,506
$ 32,710
$ 6,337
Other equity securities 202,068
7,020
6,751
301
208,819
7,321
Total equity securities $ 212,899
$ 7,851
$ 28,630

$ 5,807
$ 241,529
$ 13,658

~~Table of Contents~~


	Less than 12 months				12 months or greater				Total
			Gross				Gross				Gross
December 31, 2021:	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Investment grade securities:
Corporate	$	4,135	$	86	$	946	$	51	$	5,081	$	137
Canadian government	20		1		—		—		20		1
RMBS	132		3		102		4		234		7
ABS	1,747		22		589		6		2,336		28
CMBS	152		2		35		2		187		4
U.S. government	1,513		6		31		2		1,544		8
State and political subdivisions	109		3		28		2		137		5
Other foreign government	2,237		33		724		37		2,961		70
Total investment grade securities	10,045		156		2,455		104		12,500		260
Below investment grade securities:
Corporate	463		13		97		44		560		57


ABS	—		—		13		13		13		13
CMBS	—		—		—		—		—		—

Other foreign government	136		7		75		10		211		17
Total below investment grade securities	599		20		185		67		784		87
Total fixed maturity securities	$	10,644	$	176	$	2,640	$	171	$	13,284	$	347

The Company has no intention to sell, nor does it expect to be required to sell, the securities outlined in the ~~table~~tables above, as of the dates indicated. However, unforeseen facts and circumstances may cause the Company to sell fixed maturity ~~and equity~~ securities in the ordinary course of managing its portfolio to meet certain diversification, credit quality and liquidity guidelines.

~~Unrealized losses on below investment grade securities as of September 30, 2017 are primarily related to high-yield corporate securities.~~ Changes in unrealized losses are primarily ~~being~~ driven by changes in ~~credit spreads and~~ interest rates.

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Net Investment Income ~~Net of Related Expenses~~

Major categories of net investment income ~~net of related expenses,~~ consist of the following (dollars in ~~thousands)~~millions):


	Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
	2017			2016			2017			2016					2022		2021
Fixed maturity securities available-for-sale	$	359,157		$	325,089		$	1,039,392		$	961,096		Fixed maturity securities available-for-sale		$	533	$	495
Equity securities													Equity securities		2		2
Mortgage loans on real estate	50,040			39,802			138,829			121,494			Mortgage loans on real estate		73		66
Policy loans	15,404			15,391			45,870			47,897			Policy loans		13		14
Funds withheld at interest	102,144			104,609			327,089			273,482			Funds withheld at interest		51		84
Short-term investments and cash and cash equivalents	1,977			1,752			5,266			6,265			Short-term investments and cash and cash equivalents		2		1
Other invested assets	47,595			21,138			90,488			57,896
Other invested assets – limited partnerships and real estate joint ventures													Other invested assets – limited partnerships and real estate joint ventures		161		161
Other invested assets – all other													Other invested assets – all other		2		13
Investment income	576,317			507,781			1,646,934			1,468,130			Investment income		837		836
Investment expense	(19,399		)	(18,054		)	(57,114		)	(53,471		)	Investment expense		(27)		(24)
Investment income, net of related expenses	$	556,918		$	489,727		$	1,589,820		$	1,414,659
Net investment income													Net investment income		$	810	$	812

Investment Related Gains (Losses), Net

Investment related gains (losses), net consist of the following (dollars in ~~thousands)~~millions):


	Three months ended March 31,
		2022		2021
Fixed maturity securities available-for-sale:
Change in allowance for credit losses and impairments		$	(12)	$	(2)
Realized gains on investment activity		11		167
Realized losses on investment activity		(36)		(13)
Net gains (losses) on equity securities		(8)		3
Other impairment losses and change in mortgage loan allowance for credit losses		(2)		18
Change in fair value of certain limited partnership investments and other, net		26		111
Net gains (losses) on derivatives		(105)		18
Total investment related gains (losses), net		$	(126)	$	302

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Fixed maturity and equity securities available for sale:
Other-than-temporary impairment losses on fixed maturity securities recognized in earnings $ (390 ) $ —
$ (20,980 ) $ (34,663 )
Impairment losses on equity securities (889 ) —
(889 ) —
Gain on investment activity 19,522
46,346
91,635
127,153
Loss on investment activity (7,678 ) (9,054 ) (30,712 ) (43,397 )
Other impairment losses and change in mortgage loan provision (2,446 ) (262 ) (9,220 ) (2,111 )
Derivatives and other, net 14,534
49,594
109,637
37,020
Total investment related gains (losses), net $ 22,653
$ 86,624
$ 139,471
$ 84,002

The fixed maturity impairments for the three and nine months ended September 30, 2017 and 2016 were largely related to high-yield and emerging market corporate securities. The equity impairments for the three and nine months ended September 30, 2017 were related to an equity position received as part of a debt restructuring. The other impairment losses and change in mortgage loan provision for the three and nine months ended September 30, 2017 and 2016 were primarily due to impairments on limited partnerships. The fluctuations in investment related gains (losses) for derivatives and other for the three and nine months ended September 30, 2017, compared to the same periods in 2016, are primarily due to changes in the fair value of embedded derivatives and interest rate swaps.

During the three months ended September 30, 2017 and 2016, the Company sold fixed maturity and equity securities with fair values of $484.7 million and $317.3 million at losses of $7.7 million and $9.1 million, respectively. During the nine months ended September 30, 2017 and 2016, the Company sold fixed maturity and equity securities with fair values of $1,771.4 million and $903.1 million at losses of $30.7 million and $43.4 million, respectively. The Company generally does not buy and sell securities on a short-term basis.

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Securities Borrowing, Lending and ~~Other~~Repurchase/Reverse Repurchase Agreements

The ~~Company participates in~~following table provides information relating to securities borrowing, ~~programs whereby securities, which~~lending and repurchase/reverse repurchase agreements as of March 31, 2022 and December 31, 2021 (dollars in millions):


	March 31, 2022			December 31, 2021
	Amortized Cost	Estimated Fair Value		Amortized Cost	Estimated Fair Value
Securities borrowing agreements:
Securities borrowed (1)	n/a	$	561	n/a	$	420
Securities pledged as collateral (2)	460	437		279	290
Securities lending agreements:
Securities loaned (2)	82	84		94	102
Securities received as collateral (3)	n/a	94		n/a	102
Repurchase/reverse repurchase agreements:
Securities pledged (2)	730	715		704	736
Cash (4)	—	—		10	10
Securities received (3)	n/a	690		n/a	728
Cash received (5)	42	42		—	—

(1)Securities borrowed are not reflected on the Company’s condensed consolidated balance sheets, are borrowed from third parties. The borrowed securities are used to provide collateral under affiliated reinsurance transactions. The Company is required to maintain a minimum of ~~100%~~ of the fair value, or par value, under certain programs, of the borrowed securities as collateral. The collateral consists of rights to reinsurance treaty cash flows. If cash flows from the reinsurance treaties are insufficient to maintain the minimum collateral requirement, the Company may substitute cash or securities to meet the requirement. No cash or securities have been pledged by the Company for this purpose.

The Company also participates in a securities lending program whereby securities, reflected as investments on the Company’s condensed consolidated balance sheets, are loaned to a third party. The Company receives securities as collateral, in an amount equal to a minimum of 105% of the fair value of the securities lent. The securities received as collateral are not reflected on the Company’s condensed consolidated balance sheets.

The Company also participates in repurchase/reverse repurchase programs in which securities, reflected as investments on the Company’s condensed consolidated balance sheets, are pledged to third parties. In return, the Company receives securities from the third parties with an estimated fair value equal to a minimum of ~~100%~~ ~~of the securities pledged. The securities received are not reflected on the Company’s condensed consolidated balance sheets.~~

The Company also participates in a repurchase program in which securities, reflected as investments on the Company’s condensed consolidated balance sheets, are pledged to a third party. In return, the Company receives cash from the third party, which is reflected as a payable to the third party and included in other liabilities on the condensed consolidated balance sheets. ~~The Company is required to maintain a minimum collateral balance with a fair value of 102% of the cash received.~~

The following table includes the amount of borrowed securities, securities lent and securities collateral received as part of the securities lending program and repurchased/reverse repurchased securities pledged and received as of ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~ ~~(dollars in thousands).~~

September 30, 2017 December 31, 2016

Amortized
Cost

Estimated
Fair Value

Amortized
Cost

Estimated
Fair Value
Borrowed securities $ 360,475
$ 379,101
$ 263,820
$ 279,186
Securities lending:
Securities loaned 117,219
121,958
74,389
73,625
Securities received n/a
120,000
n/a
80,000
Repurchase program/reverse repurchase program:
Securities pledged 491,824
512,613
476,531
499,891
Securities received n/a
522,354
n/a
515,200

The Company also held cash collateral for securities lending and the repurchase program/reverse repurchase programs of $38.5 million and $28.8 million at September 30, 2017 and December 31, 2016, respectively.

~~Table of Contents~~

~~The following table presents information on the Company’s securities lending and repurchase transactions as of September 30, 2017 and December 31, 2016 (dollars in thousands).~~ Collateral associated with certain borrowed securities is not included within ~~the~~this table as the collateral pledged to ~~each~~the counterparty is the right to reinsurance treaty cash flows.

(2)Securities loaned and pledged to counterparties are included within fixed maturity securities.

September 30, 2017
Remaining Contractual Maturity of the Agreements
Overnight and Continuous Up to 30 Days 30-90 Days Greater than 90 Days Total
Securities lending transactions:
Corporate securities $ —
$ —
$ —
$ 121,958
$ 121,958
Total —
—
—
121,958
121,958
Repurchase transactions:
Corporate securities —
1,472
5,402
175,258
182,132
Residential mortgage-backed securities —
—
—
87,418
87,418
U.S. government and agencies —
—
23,206
196,040
219,246
Foreign government —
—
—
21,370
21,370
Other 2,447
—
—
—
2,447
Total 2,447
1,472
28,608
480,086
512,613
Total transactions $ 2,447
$ 1,472
$ 28,608
$ 602,044
$ 634,571

Gross amount of recognized liabilities for securities lending and repurchase transactions in preceding table $ 680,850
Amounts related to agreements not included in offsetting disclosure $ 46,279

December 31, 2016
Remaining Contractual Maturity of the Agreements
Overnight and Continuous Up to 30 Days 30-90 Days Greater than 90 Days Total
Securities lending transactions:
Corporate securities $ —
$ —
$ 4,017
$ 69,608
$ 73,625
Total $ —
$ —
$ 4,017
$ 69,608
$ 73,625
Repurchase transactions:
Corporate securities $ —
$ —
$ 3,220
$ 166,979
$ 170,199
Residential mortgage-backed securities —
—
—
92,546
92,546
U.S. government and agencies —
—
—
216,000
216,000
Foreign government —
—
—
19,900
19,900
Other 1,246
—
—
—
1,246
Total 1,246
—
3,220
495,425
499,891
Total borrowings $ 1,246
$ —
$ 7,237
$ 565,033
$ 573,516

Gross amount of recognized liabilities for securities lending and repurchase transactions in preceding table $ 624,032
Amounts related to agreements not included in offsetting disclosure $ 50,516

~~The Company has elected to offset amounts recognized~~(3)Securities received as ~~receivables and payables resulting~~collateral from ~~the repurchase/reverse repurchase programs. After the effect of offsetting, the net amount presented~~counterparties are not reflected on the condensed consolidated ~~balance sheets was a liability~~financial statements.

(4)A receivable for the cash held by counterparties is included within other assets.

(5)A payable for the cash received by the Company is included within other liabilities.

The following tables present information on the remaining contractual maturity of ~~$7.9 million~~the Company’s securities lending and ~~$5.5 million~~repurchase agreements as of ~~September 30, 2017~~March 31, 2022 and December 31, 2016, respectively. As of September 30, 2017 and December 31, 2016, the Company recognized payables resulting from cash received as collateral associated with a repurchase agreement as discussed above. Amounts owed to and due from the counterparties may be settled2021 (dollars in ~~cash or offset, in accordance with the agreements.~~millions):


	March 31, 2022
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 – 90 Days		Greater than 90 Days		Total
Securities lending agreements:
Corporate	$	—	$	—	$	—	$	71	$	71
State and political subdivisions	—		—		—		3		3
Other foreign government	—		—		—		10		10
Total	—		—		—		84		84
Repurchase agreements:
Corporate	—		—		—		361		361
Other foreign government	—		106		—		248		354
Total	—		106		—		609		715
Total agreements	$	—	$	106	$	—	$	693	$	799


	December 31, 2021
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30 – 90 Days		Greater than 90 Days		Total
Securities lending agreements:
Corporate	$	—	$	—	$	—	$	94	$	94
State and political subdivisions	—		—		—		3		3
Other foreign government	—		—		—		5		5
Total	—		—		—		102		102
Repurchase agreements:
Corporate	—		—		—		366		366

Other foreign government	—		—		—		370		370
Total	—		—		—		736		736
Total agreements	$	—	$	—	$	—	$	838	$	838

Table of Contents

Mortgage Loans on Real Estate

~~Mortgage loans represented approximately 8.7% and 8.4%~~As of ~~the Company’s total investments as of September 30, 2017 and December~~March 31, ~~2016. The Company makes~~2022, mortgage loans ~~on income producing properties that are~~were geographically ~~diversified~~dispersed throughout the U.S. with the largest ~~concentration being~~concentrations in ~~the state of~~ California ~~which represented 21.2%~~(12.7%), Texas (12.4%) and ~~22.1% of mortgage~~Washington (7.5%), in addition to loans ~~on real estate as of~~ ~~September 30, 2017~~secured by properties in Canada (3.2%) and ~~December 31, 2016, respectively.~~United Kingdom (2.5%). The recorded investment in mortgage loans on real estate presented below is gross of unamortized deferred loan origination fees and expenses and ~~valuation allowances.~~allowance for credit losses.

The following table presents the distribution of the Company’s recorded investment in mortgage loans by property type ~~is as follows~~ as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


	March 31, 2022				December 31, 2021
Property type:	Carrying Value		% of Total		Carrying Value		% of Total
Office	$	1,699	25.9	%	$	1,683	26.6	%
Retail	2,227		33.8		2,090		33.0
Industrial	1,451		22.0		1,249		19.7
Apartment	859		13.0		801		12.7
Other commercial	347		5.3		506		8.0
Recorded investment	$	6,583	100.0	%	6,329		100.0	%
Unamortized balance of loan origination fees and expenses	(11)				(11)
Allowance for credit losses	(37)				(35)
Total mortgage loans on real estate	$	6,535			$	6,283

September 30, 2017 December 31, 2016
Property type: Carrying Value % of Total Carrying Value % of Total
Office building $ 1,426,673
32.9 % $ 1,270,113
33.6 %
Retail 1,316,463
30.4
1,179,936
31.2
Industrial 891,051
20.6
713,461
18.8
Apartment 508,367
11.7
447,088
11.8
Other commercial 191,443
4.4
172,609
4.6
Recorded investment 4,333,997
100.0 % $ 3,783,207
100.0 %
Unamortized balance of loan origination fees and expenses (2,531 ) —

Valuation allowances (9,137 ) (7,685 )
Total mortgage loans on real estate $ 4,322,329
$ 3,775,522

The following table presents the maturities of the Company’s recorded investment in mortgage loans as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~ ~~are as follows~~2021 (dollars in ~~thousands)~~millions):


	September 30, 2017				December 31, 2016					March 31, 2022				December 31, 2021
	Recorded Investment		% of Total		Recorded Investment		% of Total			Recorded Investment		% of Total		Recorded Investment		% of Total
Due within five years	$	1,086,700	25.1	%	$	822,073	21.7	%	Due within five years	$	2,724	41.4	%	$	2,660	42.0	%
Due after five years through ten years	2,334,113		53.8		2,099,559		55.5		Due after five years through ten years	2,738		41.6		2,593		41.0
Due after ten years	913,184		21.1		861,575		22.8		Due after ten years	1,121		17.0		1,076		17.0
Total	$	4,333,997	100.0	%	$	3,783,207	100.0	%	Total	$	6,583	100.0	%	$	6,329	100.0	%

The following tables set forth certain key credit quality indicators of the Company’s recorded investment in mortgage loans as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


	Recorded Investment
	Debt Service Ratios						Construction loans
	>1.20x		1.00x – 1.20x		<1.00x				Total		% of Total
March 31, 2022:
Loan-to-Value Ratio
0% – 59.99%	$	3,257	$	240	$	33	$	9	$	3,539	53.8	%
60% – 69.99%	1,995		199		53		—		2,247		34.1
70% – 79.99%	482		40		53		—		575		8.7
80% or greater	99		4		119		—		222		3.4
Total	$	5,833	$	483	$	258	$	9	$	6,583	100.0	%

Recorded Investment
Debt Service Ratios
>1.20x 1.00x - 1.20x <1.00x Total % of Total
September 30, 2017:
Loan-to-Value Ratio
0% - 59.99% $ 2,060,277
$ 51,162
$ 4,698
$ 2,116,137
48.8 %
60% - 69.99% 1,515,469
86,613
44,358
1,646,440
38.0
70% - 79.99% 424,195
32,664
19,850
476,709
11.0
Greater than 80% 51,348
19,951
23,412
94,711
2.2
Total $ 4,051,289
$ 190,390
$ 92,318
$ 4,333,997
100.0 %


	Recorded Investment
	Debt Service Ratios						Construction loans
	>1.20x		1.00x – 1.20x		<1.00x				Total		% of Total
December 31, 2021:
Loan-to-Value Ratio
0% – 59.99%	$	3,111	$	238	$	51	$	6	$	3,406	53.8	%
60% – 69.99%	1,906		190		46		—		2,142		33.8
70% – 79.99%	520		41		12		—		573		9.1
80% or greater	148		—		60		—		208		3.3
Total	$	5,685	$	469	$	169	$	6	$	6,329	100.0	%

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Recorded Investment
Debt Service Ratios
>1.20x 1.00x - 1.20x <1.00x Total % of Total
December 31, 2016:
Loan-to-Value Ratio
0% - 59.99% $ 1,859,640
$ 64,749
$ 1,366
$ 1,925,755
50.8 %
60% - 69.99% 1,257,788
34,678
—
1,292,466
34.2
70% - 79.99% 370,092
20,869
24,369
415,330
11.0
Greater than 80% 114,297
—
35,359
149,656
4.0
Total $ 3,601,817
$ 120,296
$ 61,094
$ 3,783,207
100.0 %

~~None~~The following table sets forth credit quality grades by year of origination of the ~~payments due to the Company on its~~Company’s recorded investment in mortgage loans ~~were delinquent~~ as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016.~~2021 (dollars in millions):


	Recorded Investment
	Year of Origination
	2022		2021		2020		2019		2018		Prior		Total
March 31, 2022:
Internal credit quality grade:
High investment grade	$	196	$	725	$	375	$	629	$	435	$	1,779	$	4,139
Investment grade	236		366		298		333		300		723		2,256
Average	—		6		—		27		49		66		148
Watch list	—		—		—		—		—		4		4
In or near default	—		$	—	—		—		—		36		36
Total	$	432	$	1,097	$	673	$	989	$	784	$	2,608	$	6,583


	Recorded Investment
	Year of Origination
	2021		2020		2019		2018		2017		Prior		Total
December 31, 2021:
Internal credit quality grade:
High investment grade	$	725	$	402	$	645	$	461	$	344	$	1,534	$	4,111
Investment grade	367		272		331		301		296		502		2,069
Average	6		—		27		39		5		32		109
Watch list	—		—		—		—		—		4		4
In or near default	—		—		—		—		—		36		36
Total	$	1,098	$	674	$	1,003	$	801	$	645	$	2,108	$	6,329

The following table presents the current and past due composition of the Company’s recorded investment in mortgage loans ~~by method of measuring impairment, and the related valuation allowances~~ as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~ ~~(dollars in thousands):~~2021.


	March 31, 2022		December 31, 2021
Current	$	6,564	$	6,329
31 – 60 days past due	—		—
61 – 90 days past due	19		—
Total	$	6,583	$	6,329

September 30, 2017 December 31, 2016
Mortgage loans:
Individually measured for impairment $ 5,856
$ 2,216
Collectively measured for impairment 4,328,141
3,780,991
Recorded investment $ 4,333,997
$ 3,783,207
Valuation allowances:
Individually measured for impairment $ —
$ —
Collectively measured for impairment 9,137
7,685
Total valuation allowances $ 9,137
$ 7,685

~~Information~~The following table presents information regarding the Company’s ~~loan valuation allowances~~allowance for credit losses for mortgage loans for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016 is as follows~~2021 (dollars in ~~thousands)~~millions):


	Three months ended March 31,
		2022		2021
Balance, beginning of period		$	35	$	64
Change in allowance for credit losses		2		(17)

Balance, end of period		$	37	$	47

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Balance, beginning of period $ 8,156
$ 6,499
$ 7,685
$ 6,813
Provision (release) 977
247
1,444
(67 )
Translation adjustment 4
—
8
—
Balance, end of period $ 9,137
$ 6,746
$ 9,137
$ 6,746

~~Table~~For the three months ended March 31, 2022, the Company restructured three mortgage loans to interest only payments as a result of ~~Contents~~

~~Information regarding~~lower occupancy levels. The total recorded investment before allowance for credit losses for mortgage loans, which were modified and met the ~~portion~~criteria of Troubled Debt Restructuring (“TDR”), is $77 million as of March 31, 2022. For the ~~Company’s mortgage~~three months ended March 31, 2021, the Company did not have any significant loans that were ~~impaired as~~modified and met the criteria of ~~September 30, 2017 and December 31, 2016 is as follows (dollars in thousands):~~

Unpaid
Principal
Balance

Recorded
Investment

Related
Allowance

Carrying
Value
September 30, 2017:
Impaired mortgage loans with no valuation allowance recorded $ 6,427
$ 5,856
$ —
$ 5,856
Impaired mortgage loans with valuation allowance recorded —
—
—
—
Total impaired mortgage loans $ 6,427
$ 5,856
$ —
$ 5,856
December 31, 2016:
Impaired mortgage loans with no valuation allowance recorded $ 2,758
$ 2,216
$ —
$ 2,216
Impaired mortgage loans with valuation allowance recorded —
—
—
—
Total impaired mortgage loans $ 2,758
$ 2,216
$ —
$ 2,216

The Company’s average investment in impaired mortgage loans and the related interest income are reflected in the table below for the periods indicated (dollars in thousands):
Three months ended September 30,
2017 2016

Average
Recorded
Investment⁽¹⁾

Interest
Income

Average
Recorded
Investment⁽¹⁾

Interest
Income
Impaired mortgage loans with no valuation allowance recorded $ 3,967
$ 33
$ 6,953
$ 107

Impaired mortgage loans with valuation allowance recorded
—
—
—
—
Total impaired mortgage loans $ 3,967
$ 33
$ 6,953
$ 107

Nine months ended September 30,
2017 2016

Average
Recorded
Investment⁽¹⁾

Interest
Income

Average
Recorded
Investment⁽¹⁾

Interest
Income
Impaired mortgage loans with no valuation allowance recorded $ 3,062
$ 100
$ 4,687
$ 324

Impaired mortgage loans with valuation allowance recorded
—
—
5,459
—
Total impaired mortgage loans $ 3,062
$ 100
$ 10,146
$ 324

~~(1) Average recorded investment represents the average loan balances as of the beginning of period and all subsequent quarterly end of period balances.~~

~~The Company did not acquire any impaired mortgage loans during the nine months ended~~ ~~September 30, 2017~~ ~~and 2016.~~a TDR. The Company had no mortgage loans that were on a nonaccrual status at ~~September 30, 2017~~as of March 31, 2022 and ~~December~~2021. The Company did not acquire any impaired mortgage loans during three months ended March 31, ~~2016~~.2022 and 2021.

Policy Loans

~~Policy loans comprised approximately 2.7% and~~ ~~3.2%~~ ~~of the Company’s total investments as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, respectively, the~~The majority of ~~which~~policy loans are associated with one client. These policy loans present no credit risk ~~because~~as the amount of the loan cannot exceed the obligation due to the ceding company upon the death of the insured or surrender of the underlying policy. The provisions of the treaties in force and the underlying policies determine the policy loan interest rates. The Company earns a spread between the interest rate earned on policy loans and the interest rate credited to corresponding liabilities.

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Funds Withheld at Interest

~~Funds withheld at interest comprised approximately~~ ~~12.1%~~ ~~and~~ ~~13.1%~~As of ~~the Company’s total investments as~~March 31, 2022, $4.4 billion of ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, respectively. Of~~ the ~~$6.0 billion~~ funds withheld at interest balance ~~net of embedded derivatives, as of September 30, 2017, $4.0 billion of the balance~~ is primarily associated with ~~one client.~~two clients. For reinsurance agreements written on a ~~modified coinsurance~~modco basis and certain agreements written on a coinsurance funds withheld basis, assets equal to the net statutory reserves are withheld and legally owned and managed by the ceding company and are reflected as funds withheld at ~~interest on the Company’s condensed consolidated balance sheets.~~interest. In the event of a ceding company’s insolvency, the Company would need to assert a claim on the assets supporting its reserve liabilities. However, the risk of loss to the Company is mitigated by its ability to offset amounts it owes the ceding company for claims or allowances against amounts owed to the Company from the ceding company.

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Other Invested Assets

Other invested assets include ~~equity securities,~~ limited partnership interests, joint ventures (other than operating joint ventures), lifetime mortgages, and derivative ~~contracts and fair value option (“FVO”) contractholder-directed unit-linked investments.~~contracts. Other invested assets also ~~include Federal Home Loan Bank of Des Moines (“FHLB”)~~includes FHLB common stock ~~equity release mortgages~~ and ~~structured loans, all of~~unit-linked investments, which are included in ~~other~~Other in the table below. The fair value option was elected for contractholder-directed investments supporting unit-linked variable annuity type liabilities which do not qualify for presentation and reporting as separate accounts. Other invested assets represented approximately 3.1% and 3.6%As of ~~the Company’s total investments as of September 30, 2017~~March 31, 2022 and December 31, ~~2016, respectively. Carrying~~2021, the allowance for credit losses for lifetime mortgages was not material. The carrying values of ~~these~~other invested assets as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 are as follows (dollars in ~~thousands)~~millions):


	March 31, 2022		December 31, 2021
Limited partnership interests and real estate joint ventures	$	1,943	$	1,996
Lifetime mortgages	823		758
Derivatives	134		175
Other	133		141
Total other invested assets	$	3,033	$	3,070

September 30, 2017 December 31, 2016
Equity securities $ 112,931
$ 275,361
Limited partnership interests and real estate joint ventures 761,739
687,522
Derivatives 133,405
229,108
FVO contractholder-directed unit-linked investments 210,660
190,120
Other 313,788
209,829
Total other invested assets $ 1,532,523
$ 1,591,940

5. Derivative Instruments

Accounting for Derivative Instruments and Hedging Activities

See Note 2 – “Significant Accounting Policies and Pronouncements” of the Company’s 2021 Annual Report for a detailed discussion of the accounting treatment for derivative instruments, including embedded derivatives. See Note 6 – “Fair Value of Assets and Liabilities” for additional disclosures related to the fair value hierarchy for derivative instruments, including embedded derivatives.

Types of Derivatives Used by the Company

Commonly used derivative instruments include, but are not necessarily limited to: credit default swaps, financial futures, equity options, foreign currency swaps, foreign currency forwards, interest rate swaps, synthetic guaranteed investment contracts (“GICs”), consumer price index (“CPI”) swaps, forward bond purchase commitments, other derivatives and embedded derivatives.

For detailed information on these derivative instruments and the related strategies, see Note 5 – “Derivative Instruments” of the Company’s 2021 Annual Report.

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Summary of Derivative Positions

Derivatives, except for embedded derivatives, ~~and longevity and mortality swaps,~~ are ~~carried on the Company’s condensed consolidated balance sheets~~included in other invested ~~assets or other liabilities, at fair value. Longevity and mortality swaps are included on the condensed consolidated balance sheets in other~~ assets or other liabilities, at fair value. Embedded derivative assets and liabilities on ~~modified coinsurance~~modco or funds withheld arrangements are included on the condensed consolidated balance sheets with the host contract in funds withheld at interest or other liabilities, at fair value. Embedded derivative liabilities on indexed annuity and variable annuity products are included on the condensed consolidated balance sheets with the host contract in interest-sensitive contract liabilities, at fair value. The following table presents the notional amounts and gross fair value of derivative instruments prior to taking into account the netting effects of master netting agreements as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


		March 31, 2022						December 31, 2021
	Primary Underlying Risk	Notional		Carrying Value/Fair Value				Notional		Carrying Value/Fair Value
		Amount		Assets		Liabilities		Amount		Assets		Liabilities
Derivatives not designated as hedging instruments:
Interest rate swaps	Interest rate	$	1,182	$	43	$	1	$	1,273	$	66	$	1
Financial futures	Equity	228		—		—		240		—		—
Foreign currency swaps	Foreign currency	150		7		—		150		1		—
Foreign currency forwards	Foreign currency	724		2		21		395		2		4
CPI swaps	CPI	548		56		8		563		34		7
Credit default swaps	Credit	1,816		3		34		1,321		29		1
Equity options	Equity	472		29		—		472		29		—
Synthetic GICs	Interest rate	16,694		—		—		16,143		—		—
Embedded derivatives in:
Modco or funds withheld arrangements		—		280		148		—		227		62
Indexed annuity products		—		—		645		—		—		693
Variable annuity products		—		—		148		—		—		162
Total non-hedging derivatives		21,814		420		1,005		20,557		388		930
Derivatives designated as hedging instruments:
Interest rate swaps	Foreign currency/Interest rate	935		5		28		941		4		33
Foreign currency swaps	Foreign currency	133		8		1		153		1		—
Foreign currency forwards	Foreign currency	1,683		6		25		1,320		14		11
Forward bond purchase commitments	Interest rate	545		1		43		545		14		1
Total hedging derivatives		3,296		20		97		2,959		33		45
Total derivatives		$	25,110	$	440	$	1,102	$	23,516	$	421	$	975

September 30, 2017 December 31, 2016
Notional Carrying Value/Fair Value Notional Carrying Value/Fair Value
Amount Assets Liabilities Amount Assets Liabilities
Derivatives not designated as hedging instruments:
Interest rate swaps $ 946,726
$ 61,263
$ 1,825
$ 949,556
$ 78,405
$ 5,949
Financial futures 448,600
—
—
475,968
—
—
Foreign currency forwards 6,000
(84 ) —
25,000
—
5,070
Consumer price index swaps 132,081
589
420
20,615
—
262
Credit default swaps 948,000
7,905
490
926,000
12,012
2,871
Equity options 541,532
20,006
—
525,894
33,459
—
Longevity swaps 945,120
37,827
—
841,360
26,958
—
Mortality swaps 50,000
—
1,683
50,000
—
2,462
Synthetic guaranteed investment contracts 9,119,434
—
—
8,834,700
—
—
Embedded derivatives in:
Modified coinsurance or funds withheld arrangements —
84,325
—
—
—
22,529
Indexed annuity products —
—
821,821
—
—
805,672
Variable annuity products —
—
168,119
—
—
184,636
Total non-hedging derivatives 13,137,493
211,831
994,358
12,649,093
150,834
1,029,451
Derivatives designated as hedging instruments:
Interest rate swaps 435,000
—
22,133
435,000
27,901
31,223
Foreign currency swaps 796,489
71,032
13,876
928,505
104,359
734
Foreign currency forwards 331,135
1,418
10,203
—
—
—
Total hedging derivatives 1,562,624
72,450
46,212
1,363,505
132,260
31,957
Total derivatives $ 14,700,117
$ 284,281
$ 1,040,570
$ 14,012,598
$ 283,094
$ 1,061,408

~~Netting Arrangements~~

Certain of the Company’s derivatives are subject to enforceable master netting arrangements and reported as a net asset or liability in the condensed consolidated balance sheets. The Company nets all derivatives that are subject to such arrangements.

~~Table of Contents~~

The Company has elected to include all derivatives, except embedded derivatives, in the tables below, irrespective of whether they are subject to an enforceable master netting arrangement or a similar agreement. See Note 4 – “Investments” for information regarding the Company’s securities borrowing, lending, repurchase and repurchase/reverse repurchase programs. See “Embedded Derivatives” below for information regarding the Company’s bifurcated embedded derivatives.

~~The following table provides information relating to the Company’s derivative instruments as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~ ~~(dollars in thousands):~~

Gross Amounts Not
Offset in the Balance Sheet

Gross Amounts
Recognized

Gross Amounts
Offset in the
Balance Sheet

Net Amounts
Presented in the
Balance Sheet

Financial
Instruments ⁽¹⁾

Cash Collateral
Pledged/
Received
Net Amount
September 30, 2017:
Derivative assets $ 199,956
$ (28,724 ) $ 171,232
$ (17,782 ) $ (174,120 ) $ (20,670 )
Derivative liabilities 50,630
(28,724 ) 21,906
(58,360 ) (30,771 ) (67,225 )
December 31, 2016:
Derivative assets $ 283,094
$ (27,028 ) $ 256,066
$ (16,913 ) $ (254,498 ) $ (15,345 )
Derivative liabilities 48,571
(27,028 ) 21,543
(95,863 ) (1,441 ) (75,761 )


~~(1)~~	~~Includes initial margin posted to a central clearing partner.~~

~~Accounting for Derivative Instruments and Hedging Activities~~

The Company does not enter into derivative instruments for speculative purposes. As discussed below under “Non-qualifying Derivatives and Derivatives for Purposes Other Than Hedging,” the Company uses various derivative instruments for risk management purposes that either do not qualify or have not been qualified for hedge accounting treatment. As of ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~, the Company held interest rate swaps that were designated and qualified as cash flow hedges of interest rate risk, for variable rate liabilities and foreign currency assets, foreign currency swaps and foreign currency forwards that were designated and qualified as hedges of a portion of its net investment in its foreign operations, foreign currency swaps that were designated and qualified as fair value hedges of foreign currency risk, and derivative instruments that were not designated as hedging instruments. See Note 2 – “Summary of Significant Accounting Policies” of the Company’s 2016 Annual Report for a detailed discussion of the accounting treatment for derivative instruments, including embedded derivatives. Derivative instruments are carried at fair value and generally require an insignificant amount of cash at inception of the contracts.

Fair Value Hedges

The Company designates and reports certain foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets as fair value hedges when they meet the requirements of the general accounting principles for Derivatives and Hedging. The gain or loss on the hedged item attributable to a change in foreign currency and the offsetting gain or loss on the related foreign currency swaps as of ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021 were (dollars in ~~thousands)~~millions):

Type of Fair Value Hedge Hedged Item Gains (Losses) Recognized for Derivatives Gains (Losses) Recognized for Hedged Items Ineffectiveness Recognized in Investment Related Gains (Losses), net
For the three months ended September 30, 2017:
Foreign currency swaps Foreign-denominated fixed maturity securities $ 2,100
$ (2,100 ) $ —
For the three months ended September 30, 2016:
Foreign currency swaps Foreign-denominated fixed maturity securities $ 3,205
$ (3,205 ) $ —
For the nine months ended September 30, 2017:
Foreign currency swaps Foreign-denominated fixed maturity securities $ 9,541
$ (9,541 ) $ —
For the nine months ended September 30, 2016:
Foreign currency swaps Foreign-denominated fixed maturity securities $ 5,317
$ (5,317 ) $ —

A regression analysis was used, both at inception of the hedge and on an ongoing basis, to determine whether each derivative used in a hedged transaction is highly effective in offsetting changes in the hedged item. For the foreign currency swaps, the change in fair value related to changes in the benchmark interest rate and credit spreads are excluded from the hedge effectiveness. For the three and nine months ended September 30, 2017, $0.2 million and $0.8 million, respectively, of the change in the estimated fair value of derivatives, was excluded from hedge effectiveness. For the three and nine months ended September 30, 2016, $1.6 million and $(5.4) million, respectively, of the change in the estimated fair value of derivatives, was excluded from hedge effectiveness.

~~Table of Contents~~


Type of Fair Value Hedge	Hedged Item	Gains (Losses) Recognized for Derivatives		Gains (Losses) Recognized for Hedged Items
		Investment Related Gains (Losses), Net
For the three months ended March 31, 2022:
Foreign currency swaps	Foreign-denominated fixed maturity securities	$	7	$	(3)
For the three months ended March 31, 2021:
Foreign currency swaps	Foreign-denominated fixed maturity securities	$	—	$	1

Cash Flow Hedges

Certain derivative instruments are designated as cash flow hedges when they meet the requirements of the general accounting principles for Derivatives and ~~Hedging.~~Hedging. The Company designates and accounts for the following as cash ~~flows:~~flow hedges: (i) certain interest rate swaps, in which the cash flows of assets and liabilities are variable based on a benchmark rate; (ii) certain

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interest rate swaps, in which the cash flows of assets are denominated in different currencies, commonly referred to as cross-currency swaps; and (iii) forward bond purchase commitments.

The following table presents the components of AOCI, before income tax, and the condensed consolidated income statement classification where the gain or loss is recognized related to cash flow hedges for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 (dollars in ~~thousands)~~millions):

Three months ended September 30,
2017 2016
Balance beginning of period $ 7,690
$ (41,192 )
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges (6,889 ) 932
Amounts reclassified to investment related (gains) losses, net (183 ) (116 )
Amounts reclassified to investment income (271 ) (221 )
Balance end of period $ 347
$ (40,597 )

Nine months ended September 30,
2017 2016
Balance beginning of period $ (2,496 ) $ (29,397 )
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges 3,689
(10,866 )
Amounts reclassified to investment related (gains) losses, net (142 ) 53
Amounts reclassified to investment income (704 ) (387 )
Balance end of period $ 347
$ (40,597 )










	Three months ended March 31,
	2022		2021
Balance, beginning of period	$	(22)	$	(49)
Gains (losses), net deferred in other comprehensive income (loss)	(60)		(24)
Amounts reclassified to investment income	—		—
Amounts reclassified to interest expense	1		2
Balance, end of period	$	(81)	$	(71)

As of ~~September 30, 2017, the~~March 31, 2022, approximately $1 million of before-tax deferred net ~~gains (losses)~~losses on derivative instruments recorded in AOCI ~~that~~ are expected to be reclassified to ~~earnings~~interest expense during the next twelve ~~months~~months. For the same time period, $1 million of before-tax deferred net gains recorded in AOCI are ~~approximately $(0.4) million. This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities that will occur over~~expected to be reclassified to investment income during the next twelve ~~months, at which time the Company will recognize the deferred net gains (losses) as an adjustment to investment income over the term of the investment cash flows.~~months.

~~Table of Contents~~

The following table presents the ~~effective portion~~effect of derivatives in cash flow hedging relationships on the condensed consolidated statements of income and the condensed consolidated statements of comprehensive income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 (dollars in ~~thousands)~~millions):


Derivative Type	Gains (Losses) Deferred in OCI		Gains (Losses) Reclassified into Income from AOCI
			Investment Income		Interest Expense
For the three months ended March 31, 2022:
Interest rate	$	(64)	$	—	$	(1)
Foreign currency/interest rate	4		—		—
Total	$	(60)	$	—	$	(1)
For the three months ended March 31, 2021:
Interest rate	$	(23)	$	—	$	(2)
Foreign currency/interest rate	(1)		—		—
Total	$	(24)	$	—	$	(2)

Effective Portion
Derivative Type Gain (Loss) Deferred in OCI Gain (Loss) Reclassified into Income from OCI
Investment Related Gains (Losses) Investment Income
For the three months ended September 30, 2017:
Interest rate $ (8,421 ) $ —
$ —
Currency/Interest rate 1,544
—
230
Forward bond purchase commitments (12 ) 183
41
Total $ (6,889 ) $ 183
$ 271
For the three months ended September 30, 2016:
Interest rate $ (3,282 ) $ —
$ —
Currency/Interest rate 4,214
—
200
Forward bond purchase commitments —
116
21
Total $ 932
$ 116
$ 221

For the nine months ended September 30, 2017:
Interest rate $ (6,205 ) $ —
$ —
Currency/Interest rate 9,894
—
560
Forward bond purchase commitments —
142
144
Total $ 3,689
$ 142
$ 704
For the nine months ended September 30, 2016:
Interest rate $ (15,617 ) $ —
$ —
Currency/Interest rate 4,751
—
454
Forward bond purchase commitments —
(53 ) (67 )
Total $ (10,866 ) $ (53 ) $ 387

~~All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.~~ For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, the ineffective portion of derivatives reported as cash flow hedges was not material to the Company’s results of operations. Also,~~2021, there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging.

Hedges of Net Investments in Foreign Operations

The Company uses foreign currency swaps and foreign currency forwards to hedge a portion of its net investment in certain foreign operations against adverse movements in exchange rates. The following table illustrates the Company’s net investments in foreign operations (“NIFO”) hedges and the gains (losses) deferred in OCI for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 (dollars in ~~thousands)~~millions):


	Derivative Gains (Losses) Deferred in OCI
	For the three months ended March 31,
Type of NIFO Hedge	2022		2021
Foreign currency swaps	$	—	$	(1)
Foreign currency forwards	(16)		(14)
Total	$	(16)	$	(15)

Derivative Gains (Losses) Deferred in AOCI
For the three months ended September 30, For the nine months ended September 30,
Type of NIFO Hedge ^{(1) (2)}
2017 2016 2017 2016
Foreign currency swaps $ (35,198 ) $ 8,341
$ (60,723 ) $ (23,151 )
Foreign currency forwards 4,627
—
8,785
—
Total $ (30,571 ) $ 8,341
$ (51,938 ) $ (23,151 )


~~(1)~~	There were no sales or substantial liquidations of net investments in foreign operations that would have required the reclassification of gains or losses from accumulated other comprehensive income (loss) into investment income during the periods presented.


~~(2)~~	~~There was no ineffectiveness recognized for the Company’s hedges of net investments in foreign operations.~~

The cumulative foreign currency translation gain recorded in AOCI related to these hedges was ~~$109.7~~$121 million and ~~$161.6~~$137 million at ~~September 30, 2017~~ as of March 31, 2022 and December 31, ~~2016~~,2021, respectively. If a hedged foreign operation was sold or substantially liquidated, the amounts in AOCI would be reclassified to the condensed consolidated statements of income. A pro rata portion would be reclassified upon partial sale of a hedged foreign operation.

There were no sales or substantial liquidations of net investments in foreign operations that would have required the reclassification of gains or losses from AOCI into investment income during the periods presented.

Table of Contents

Non-qualifying Derivatives and Derivatives for Purposes Other Than Hedging

The Company uses various other derivative instruments for risk management purposes that either do not qualify or have not been ~~qualified~~elected for hedge accounting treatment. The gain or loss related to the change in fair value for these derivative instruments is recognized in investment related gains (losses), net, ~~in the condensed consolidated statements of income,~~ except where otherwise noted.

A summary of the effect of non-hedging derivatives, including embedded derivatives, on the Company’s condensed consolidated statements of income for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 is as follows (dollars in ~~thousands)~~millions):

Gain (Loss) for the three months ended September 30,
Type of Non-hedging Derivative Income Statement Location of Gain (Loss) 2017 2016
Interest rate swaps Investment related gains (losses), net $ 641
$ 4,122
Financial futures Investment related gains (losses), net (8,890 ) (11,677 )
Foreign currency forwards Investment related gains (losses), net 24
507
CPI swaps Investment related gains (losses), net 220
76
Credit default swaps Investment related gains (losses), net 4,137
6,672
Equity options Investment related gains (losses), net (8,295 ) (13,648 )
Longevity swaps Other revenues 3,334
8,921
Mortality swaps Other revenues (132 ) (400 )
Subtotal (8,961 ) (5,427 )
Embedded derivatives in:
Modified coinsurance or funds withheld arrangements Investment related gains (losses), net 23,044
49,078
Indexed annuity products Interest credited (13,133 ) (20,104 )
Variable annuity products Investment related gains (losses), net (6,205 ) 7,988
Total non-hedging derivatives $ (5,255 ) $ 31,535

Gain (Loss) for the nine months ended
September 30,
Type of Non-hedging Derivative Income Statement Location of Gain (Loss) 2017 2016
Interest rate swaps Investment related gains (losses), net $ 12,318
$ 108,149
Financial futures Investment related gains (losses), net (28,107 ) (30,285 )
Foreign currency forwards Investment related gains (losses), net 577
6,584
CPI swaps Investment related gains (losses), net 211
(624 )
Credit default swaps Investment related gains (losses), net 15,374
13,536
Equity options Investment related gains (losses), net (34,757 ) (19,576 )
Longevity swaps Other revenues 7,180
11,402
Mortality swaps Other revenues (921 ) 222
Subtotal (28,125 ) 89,408
Embedded derivatives in:
Modified coinsurance or funds withheld arrangements Investment related gains (losses), net 106,854
33,795
Indexed annuity products Interest credited (35,490 ) (20,730 )
Variable annuity products Investment related gains (losses), net 16,518
(83,089 )
Total non-hedging derivatives $ 59,757
$ 19,384

~~Table of Contents~~

~~Types of Derivatives Used by the Company~~

~~Interest Rate Swaps~~

Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates, to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches) and to manage the risk of cash flows of liabilities that are variable based on a benchmark rate. With an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between two rates, which can be either fixed-rate or floating-rate interest amounts, tied to an agreed-upon notional principal amount. These transactions are executed pursuant to master agreements that provide for a single net payment or individual gross payments at each due date. The Company utilizes interest rate swaps in cash flow and non-qualifying hedging relationships.

~~Financial Futures~~

Exchange-traded futures are used primarily to economically hedge liabilities embedded in certain variable annuity products. With exchange-traded futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the relevant indices, and to post variation margin on a daily basis in an amount equal to the difference between the daily estimated fair values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange.

~~Equity Options~~

Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products. To hedge against adverse changes in equity indices volatility, the Company buys put options. The contracts are net settled in cash based on differentials in the indices at the time of exercise and the strike price. Equity warrants are also used by the Company to economically hedge the variability in anticipated cash flows for the acquisition of investment securities.

~~Consumer Price Index Swaps~~

Consumer price index (“CPI”) swaps are used by the Company primarily to economically hedge liabilities embedded in certain insurance products where value is directly affected by changes in a designated benchmark consumer price index. With a CPI swap transaction, the Company agrees with another party to exchange the actual amount of inflation realized over a specified period of time for a fixed amount of inflation determined at inception. These transactions are executed pursuant to master agreements that provide for a single net payment or individual gross payments to be made by the counterparty at each due date. Most of these swaps will require a single payment to be made by one counterparty at the maturity date of the swap.

~~Foreign Currency Swaps~~

Foreign currency swaps are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. With a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a forward exchange rate calculated by reference to an agreed upon principal amount. The principal amount of each currency is exchanged at the termination of the currency swap by each party. The Company uses foreign currency swaps in hedges of net investments in foreign operations and non-qualifying hedge relationships.

~~Foreign Currency Forwards~~

Foreign currency forwards are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. With a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made in a different currency at the specified future date. The Company uses foreign currency forwards in hedges of net investments in foreign operations and non-qualifying hedge relationships.

~~Forward Bond Purchase Commitments~~

Forward bond purchase commitments have been used by the Company to hedge against the variability in the anticipated cash flows required to purchase securities. With forward bond purchase commitments, the forward price is agreed upon at the time of the contract and payment for such contract is made at the future specified settlement date of the securities.

~~Table of Contents~~


		Gains (Losses) for the three months ended March 31,
Type of Non-hedging Derivative	Income Statement Location of Gains (Losses)	2022		2021
Interest rate swaps	Investment related gains (losses), net	$	(52)	$	(70)
Financial futures	Investment related gains (losses), net	7		(10)
Foreign currency swaps	Investment related gains (losses), net	7		9
Foreign currency forwards	Investment related gains (losses), net	(23)		(8)
CPI swaps	Investment related gains (losses), net	29		18
Credit default swaps	Investment related gains (losses), net	(58)		20
Equity options	Investment related gains (losses), net	—		(10)


Subtotal		(90)		(51)
Embedded derivatives in:
Modco or funds withheld arrangements	Investment related gains (losses), net	(33)		50

Indexed annuity products	Interest credited	36		14
Variable annuity products	Investment related gains (losses), net	14		19
Total non-hedging derivatives		$	(73)	$	32

Credit ~~Default Swaps~~Derivatives

The Company sells protection under single name credit default swaps and credit default swap index tranches to diversify its credit risk exposure in certain portfolios and, in combination with purchasing securities, to replicate characteristics of similar investments based on the credit quality and term of the credit default swap. Credit default triggers for indexed reference entities and single name reference entities are defined in the contracts. The Company’s maximum exposure to credit loss equals the notional value for credit default swaps. In the event of default of a referencing entity, the Company is typically required to pay the protection holder the full notional value less a recovery amount determined at auction.

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of credit default swaps sold by the Company at ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


	March 31, 2022					December 31, 2021
Rating Agency Designation of Referenced Credit Obligations(1)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps(2)		Weighted Average Years to Maturity(3)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps(2)		Weighted Average Years to Maturity(3)
AAA/AA+/AA/AA-/A+/A/A-
Single name credit default swaps	$	(31)	$	600	14.0	$	28	$	600	14.2
Subtotal	(31)		600		14.0	28		600		14.2
BBB+/BBB/BBB-
Single name credit default swaps	1		181		2.7	1		141		2.4
Credit default swaps referencing indices	—		1,015		6.1	—		565		5.1
Subtotal	1		1,196		5.6	1		706		4.6
BB+/BB/BB-
Single name credit default swaps	(1)		20		3.6	(1)		15		3.5
Subtotal	(1)		20		3.6	(1)		15		3.5
Total	$	(31)	$	1,816	8.4	$	28	$	1,321	9.0

September 30, 2017 December 31, 2016
Rating Agency Designation of Referenced Credit Obligations⁽¹⁾

Estimated Fair
Value of Credit
Default Swaps

Maximum
Amount of Future
Payments under
Credit Default
Swaps⁽²⁾

Weighted
Average
Years to
Maturity⁽³⁾

Estimated Fair
Value of Credit
Default Swaps

Maximum
Amount of Future
Payments under
Credit Default
Swaps⁽²⁾

Weighted
Average
Years to
Maturity⁽³⁾
AAA/AA+/AA/AA-/A+/A/A-
Single name credit default swaps $ 2,975
$ 155,500
3.2 $ 1,726
$ 150,500
3.8
Subtotal 2,975
155,500
3.2 1,726
150,500
3.8
BBB+/BBB/BBB-
Single name credit default swaps 4,209
368,200
3.2 1,426
347,200
3.7
Credit default swaps referencing indices 56
416,000
4.2 6,295
416,000
5.0
Subtotal 4,265
784,200
3.7 7,721
763,200
4.4
BB+/BB/BB-
Single name credit default swaps 21
5,000
1.7 (477 ) 9,000
3.5
Subtotal 21
5,000
1.7 (477 ) 9,000
3.5
Total $ 7,261
$ 944,700
3.6 $ 8,970
$ 922,700
4.3
(1)The rating agency designations are based on ratings from Standard and Poor’s (“S&P”).

(2)Assumes the value of the referenced credit obligations is zero.


~~(1)~~	~~The rating agency designations are based on ratings from Standard and Poor’s (“S&P”).~~


~~(2)~~	~~Assumes the value of the referenced credit obligations is zero.~~


~~(3)~~	(3)The weighted average years to maturity of the ~~credit default swaps is calculated based on weighted average notional amounts.~~

~~The Company also purchases~~ credit default swaps is calculated based on weighted average notional amounts.

Netting Arrangements and Credit Risk

Certain of the Company’s derivatives are subject to ~~reduce its risk against~~enforceable master netting arrangements and reported as a ~~drop~~net asset or liability in ~~bond prices due to credit concerns of certain bond issuers. If a credit event, as defined by~~ the ~~contract, occurs, the Company is able to put the bond back to the counterparty at par.~~

~~Longevity Swaps~~

condensed consolidated balance sheets. The Company ~~enters into longevity swaps in the form of out-of-the-money options, which provide protection against changes in mortality improvement~~nets all derivatives that are subject to ~~retirement plans and insurers of~~ such plans. With a longevity swap transaction, the Company agrees with another party to exchange a proportion of a notional value. The proportion is determined by the difference between a predefined benefit, and the realized benefit plus the future expected benefit, calculated by reference to a population index for a fixed premium.

~~Mortality Swaps~~

Mortality swaps are used by the Company to hedge risk from changes in mortality experience associated with its reinsurance of life insurance risk. The Company agrees with another party to exchange, at specified intervals, a proportion of a notional value determined by the difference between a predefined expected and realized claim amount on a designated index of reinsured lives, for a fixed percentage (premium) each term.

~~Synthetic Guaranteed Investment Contracts~~

The Company sells fee-based synthetic guaranteed investment contracts to retirement plans which include investment-only, stable value contracts. The assets are owned by the trustees of such plans, who invest the assets under the terms of investment guidelines to which the Company agrees. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements. These contracts are reported as derivatives and recorded at fair value.

~~Embedded Derivatives~~arrangements.

The Company has ~~certain~~elected to include all derivatives, except embedded derivatives, ~~which~~in the table below, irrespective of whether they are ~~required~~subject to ~~be separated from their host contracts~~an enforceable master netting arrangement or a similar agreement. See Note 4 – “Investments” for information regarding the Company’s securities borrowing, lending and reported as derivatives. Host contracts include reinsurance treaties structured on a modified coinsurance (“modco”) or funds withheld basis. Additionally, the Company reinsures equity-indexed annuity and variable annuity contracts with benefits that are considered

repurchase/reverse repurchase agreements.

Table of Contents

The following table provides information relating to the netting of the Company’s derivative instruments as of March 31, 2022 and December 31, 2021 (dollars in millions):

~~embedded derivatives, including guaranteed minimum withdrawal benefits, guaranteed minimum accumulation benefits,~~


	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments/Collateral (1)		Net Amount
March 31, 2022:
Derivative assets	$	160	$	(26)	$	134	$	(127)	$	7
Derivative liabilities	161		(26)		135		(135)		—
December 31, 2021:
Derivative assets	$	194	$	(19)	$	175	$	(175)	$	—
Derivative liabilities	58		(19)		39		(39)		—

(1)Includes initial margin posted to a central clearing partner for financial instruments and ~~guaranteed minimum income benefits.~~ excludes the excess of collateral received/pledged from/to the counterparty.

The ~~changes~~Company may be exposed to credit-related losses in ~~fair values~~the event of ~~embedded derivatives on equity-indexed annuities described below relate~~non-performance by counterparties to ~~changes in~~derivative financial instruments. Generally, the credit exposure of the Company’s derivative contracts is limited to the fair value ~~associated with capital market~~ and ~~other related assumptions. The~~accrued interest of non-collateralized derivative contracts in an asset position at the reporting date. As of March 31, 2022, the Company had credit exposure of $16 million.

Derivatives may be exchange-traded or they may be privately negotiated contracts, which are referred to as over-the-counter (“OTC”) derivatives. Certain of the Company’s ~~utilization of a credit valuation adjustment~~OTC derivatives are cleared and settled through central clearing counterparties (“~~CVA”) did not have a material effect on the change in fair value of its embedded derivatives for the three and nine months ended September 30, 2017 and 2016.~~

~~The related gains (losses) and the effect on net income after amortization of deferred acquisition costs (“DAC”~~OTC cleared”) and ~~income taxes for the~~ ~~three and nine months ended September 30, 2017 and 2016~~others are ~~reflected in the following table (dollars in thousands):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Embedded derivatives in modco or funds withheld arrangements included in investment related gains $ 23,044
$ 49,078
$ 106,854
$ 33,795
After the associated amortization of DAC and taxes, the related amounts included in net income 7,515
9,653
36,300
1,683
Embedded derivatives in variable annuity contracts included in investment related gains (6,205 ) 7,988
16,518
(83,089 )
After the associated amortization of DAC and taxes, the related amounts included in net income (1,074 ) 2,595
30,785
(63,415 )
Amounts related to embedded derivatives in equity-indexed annuities included in benefits and expenses (13,133 ) (20,104 ) (35,490 ) (20,730 )
After the associated amortization of DAC and taxes, the related amounts included in net income (9,737 ) (13,397 ) (38,059 ) (9,979 )

~~Credit Risk~~

bilateral contracts between two counterparties. The Company manages its credit risk related to ~~over-the-counter (“OTC”)~~OTC derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master netting agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination.

The ~~credit exposure of the Company’s OTC derivative transactions is represented by the contracts with a positive fair value (market value) at the reporting date. To reduce credit exposures, the~~ Company seeks to (i) enter into OTC derivative transactions pursuant to master netting agreements that provide for a netting of payments and receipts with a single counterparty, and (ii) enter into agreements that allow the use of credit support annexes, which are bilateral rating-sensitive agreements that require collateral postings at established threshold levels. Certain of the Company’s OTC derivatives are cleared derivatives, which are bilateral transactions between the Company and a counterparty where the transactions are cleared through a clearinghouse, such that each derivative counterparty is only exposed to the default of the ~~clearinghouse. These~~central clearing counterparties for OTC cleared derivatives, and these transactions require initial and daily variation margin collateral postings and include certain interest rate swaps and credit default swaps entered into on or after June 10, 2013, related to guidelines implemented under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Also, the Company enters into exchange-traded futures through regulated exchanges and these transactionspostings. Exchange-traded derivatives are settled on a daily basis, thereby reducing the credit risk exposure in the event of non-performance by counterparties to such financial instruments.

The Company enters into various collateral arrangements, which require both the posting and accepting of collateral in connection with its derivative instruments. Collateral agreements contain attachment thresholds that may vary depending on the posting party’s ratings. Additionally, a decline in the Company’s or the counterparty’s credit ratings to specified levels could result in potential settlement of the derivative positions under the Company’s agreements with its counterparties. The Company also has exchange-traded futures, which require the maintenance of a margin account. As exchange-traded futures are affected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties.

~~Table of Contents~~

The Company’s credit exposure related to derivative contracts is generally limited to the fair value at the reporting date plus or minus any collateral posted or held by the Company. The Company’s credit exposure to mortality swaps is minimal, as they are fully collateralized by a counterparty. Information regarding the Company’s credit exposure related to its over-the-counter derivative contracts, centrally cleared derivative contracts and margin account for exchange-traded futures, excluding mortality swaps, at ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~ ~~are reflected in the following table (dollars in thousands):~~

September 30, 2017 December 31, 2016
Estimated fair value of derivatives in net asset position $ 151,009
$ 236,985
Cash provided as collateral⁽¹⁾
30,771
1,441
Securities pledged to counterparties as collateral⁽²⁾
58,360
95,863
Cash pledged from counterparties as collateral⁽³⁾
(174,120 ) (254,498 )
Securities pledged from counterparties as collateral⁽⁴⁾
(17,782 ) (16,913 )
Initial margin for cleared derivatives⁽²⁾
(58,360 ) (73,571 )
Net amount after application of master netting agreements and collateral $ (10,122 ) $ (10,693 )
Margin account related to exchange-traded futures⁽⁵⁾
$ 7,832
$ 9,687


~~(1)~~	~~Consists of receivable from counterparty, included in other assets.~~


~~(2)~~	~~Included in available-for-sale securities, primarily consists of U.S. Treasury and government agency securities.~~


~~(3)~~	~~Included in cash and cash equivalents, with obligation to return cash collateral recorded in other liabilities.~~


~~(4)~~	~~Consists of U.S. Treasury and government securities.~~


~~(5)~~	~~Included in other assets.~~

6. Fair Value of Assets and Liabilities

Fair Value Measurement

General accounting principles for Fair Value Measurements and Disclosures define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. These principles also establish a three-level fair value hierarchy ~~which~~that requires an entity to maximize the use of observable inputs and to minimize the use of unobservable inputs when measuring fair ~~value and describes three levels of inputs that may be used to measure fair~~ value:

Level 1 -– Unadjusted quoted prices in active markets for identical assets or liabilities. ~~The Company’s Level 1 assets~~Active markets are defined through various characteristics for the measured asset/liability, such as having many transactions and ~~liabilities are traded in active exchange markets.~~narrow bid/ask spreads.

Level 2 -– Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or market standard valuation techniques and assumptions that use significant inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 -– Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the related assets or ~~liabilities.~~liabilities and include those whose value is determined using market standard valuation techniques described above. Prices are determined using valuation methodologies such as discounted cash flow models and other similar techniques that require management’s judgment or estimation in developing inputs that are consistent with those other market participants would use when pricing similar assets and liabilities. ~~Additionally,~~

For a discussion of the Company’s ~~embedded derivatives, all of which are associated with reinsurance treaties~~valuation methodologies for assets and ~~longevity~~liabilities measured at fair value and ~~mortality swaps, are classified in Level 3 since their values include significant unobservable inputs.~~

~~When inputs used to measure~~ the fair value hierarchy, see Note 6 – “Fair Value of ~~an asset or liability fall within different levels of~~Assets and Liabilities” in the ~~hierarchy,~~Notes to Consolidated Financial Statements included in the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety, except for fair value measurements using net asset value. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, gains and losses for such assets and liabilities categorized within Level 3 may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).Company’s 2021 Annual Report.

Table of Contents

Assets and Liabilities by Hierarchy Level

Assets and liabilities measured at fair value on a recurring basis as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 are summarized below (dollars in ~~thousands)~~millions):


March 31, 2022:			Fair Value Measurements Using:
	Total		Level 1		Level 2		Level 3
Assets:
Fixed maturity securities – available-for-sale:
Corporate	$	36,380	$	—	$	32,334	$	4,046
Canadian government	4,407		—		4,407		—
RMBS	966		—		959		7
ABS	3,746		—		2,710		1,036
CMBS	1,786		—		1,708		78
U.S. government	1,525		1,415		100		10
State and political subdivisions	1,209		—		1,175		34
Other foreign government	7,903		—		7,874		29
Total fixed maturity securities – available-for-sale	57,922		1,415		51,267		5,240
Equity securities	139		91		—		48
Funds withheld at interest – embedded derivatives	(16)		—		—		(16)
Funds withheld at interest	75		—		—		75
Cash equivalents	974		974		—		—
Short-term investments	268		177		43		48
Other invested assets:
Derivatives	134		—		134		—

Other	58		—		58		—
Total other invested assets (1)	192		—		192		—

Total	$	59,554	$	2,657	$	51,502	$	5,395
Liabilities:
Interest-sensitive contract liabilities – embedded derivatives	$	793	$	—	$	—	$	793
Other liabilities:
Funds withheld at interest – embedded derivatives	(147)		—		—		(147)
Derivatives	135		—		135		—
Total	$	781	$	—	$	135	$	646

September 30, 2017: Fair Value Measurements Using:
Total Level 1 Level 2 Level 3
Assets:
Fixed maturity securities – available-for-sale:
Corporate securities $ 22,535,830
$ 615,433
$ 20,648,377
$ 1,272,020
Canadian and Canadian provincial governments 3,991,185
—
3,465,820
525,365
Residential mortgage-backed securities 1,679,305
—
1,561,310
117,995
Asset-backed securities 1,694,568
—
1,549,371
145,197
Commercial mortgage-backed securities 1,313,322
—
1,311,375
1,947
U.S. government and agencies 1,603,669
1,480,357
100,061
23,251
State and political subdivisions 661,031
—
619,519
41,512
Other foreign government supranational and foreign government-sponsored enterprises 2,902,832
319,147
2,578,057
5,628
Total fixed maturity securities – available-for-sale 36,381,742
2,414,937
31,833,890
2,132,915
Funds withheld at interest – embedded derivatives 84,325
—
—
84,325
Cash equivalents 332,186
332,186
—
—
Short-term investments 56,454
—
53,095
3,359
Other invested assets:
Non-redeemable preferred stock 38,901
38,901
—
—
Other equity securities 74,030
74,030
—
—
Derivatives:
Interest rate swaps 46,258
—
46,258
—
Foreign currency forwards 1,418
—
1,418
—
CPI swaps 230
—
230
—
Credit default swaps 6,903
—
6,903
—
Equity options 9,700
—
9,700
—
Foreign currency swaps 68,896
—
68,896
—
FVO contractholder-directed unit-linked investments 210,660
209,136
1,524
—
Total other invested assets 456,996
322,067
134,929
—
Other assets - longevity swaps 37,827
—
—
37,827
Total $ 37,349,530
$ 3,069,190
$ 32,021,914
$ 2,258,426
Liabilities:
Interest sensitive contract liabilities – embedded derivatives $ 989,940
$ —
$ —
$ 989,940
Other liabilities:
Derivatives:
Interest rate swaps 8,953
—
8,953
—
Foreign currency forwards 10,287
—
10,287
—
CPI swaps 61
—
61
—
Credit default swaps (512 ) —
(512 ) —
Equity options (10,306 ) —
(10,306 ) —
Foreign currency swaps 11,740
—
11,740
—
Mortality swaps 1,683
—
—
1,683
Total $ 1,011,846
$ —
$ 20,223
$ 991,623

~~Table of Contents~~

December 31, 2016: Fair Value Measurements Using:
Total Level 1 Level 2 Level 3
Assets:
Fixed maturity securities – available-for-sale:
Corporate securities $ 19,619,084
$ 310,995
$ 18,035,836
$ 1,272,253
Canadian and Canadian provincial governments 3,644,046
—
3,168,081
475,965
Residential mortgage-backed securities 1,278,576
—
1,118,285
160,291
Asset-backed securities 1,429,344
—
1,210,064
219,280
Commercial mortgage-backed securities 1,363,654
—
1,342,509
21,145
U.S. government and agencies 1,468,302
1,345,755
98,059
24,488
State and political subdivisions 591,796
—
550,130
41,666
Other foreign government, supranational and foreign government-sponsored enterprises 2,698,823
276,729
2,409,225
12,869
Total fixed maturity securities – available-for-sale 32,093,625
1,933,479
27,932,189
2,227,957
Funds withheld at interest – embedded derivatives (22,529 ) —
—
(22,529 )
Cash equivalents 338,601
338,601
—
—
Short-term investments 44,241
8,276
32,619
3,346
Other invested assets:
Non-redeemable preferred stock 51,123
38,317
12,806
—
Other equity securities 224,238
224,238
—
—
Derivatives:
Interest rate swaps 93,508
—
93,508
—
Credit default swaps 9,136
—
9,136
—
Equity options 26,070
—
26,070
—
Foreign currency swaps 100,394
—
100,394
—
FVO contractholder-directed unit-linked investments 190,120
188,891
1,229
—
Other 11,036
11,036
—
—
Total other invested assets 705,625
462,482
243,143
—
Other assets - longevity swaps 26,958
—
—
26,958
Total $ 33,186,521
$ 2,742,838
$ 28,207,951
$ 2,235,732
Liabilities:
Interest sensitive contract liabilities – embedded derivatives $ 990,308
$ —
$ —
$ 990,308
Other liabilities:
Derivatives:
Interest rate swaps 24,374
—
24,374
—
Foreign currency forwards 5,070
—
5,070
—
CPI swaps 262
—
262
—
Credit default swaps (5 ) —
(5 ) —
Equity options (7,389 ) —
(7,389 ) —
Foreign currency swaps (3,231 ) —
(3,231 ) —
Mortality swaps 2,462
—
—
2,462
Total $ 1,011,851
$ —
$ 19,081
$ 992,770

~~The Company may utilize information from third parties, such as pricing services and brokers, to assist in determining the fair value for certain~~(1)Other invested assets and liabilities; however, management is ultimately responsible for all fair values presented in the Company’s condensed consolidated financial statements. This includes responsibility for monitoring the fair value process, ensuring objective and reliable valuation practices and pricing of assets and liabilities, and approving changes to valuation methodologies and pricing sources. The selection of the valuation technique(s) to apply considers the definition of an exit price and the nature of the asset or liability being valued and significant expertise and judgment is required.

~~Table of Contents~~

The Company performs initial and ongoing analysis and review of the various techniques utilized in determining fair value to ensure that they are appropriate and consistently applied, and that the various assumptions are reasonable. The Company analyzes and reviews the information and prices received from third parties to ensure that the prices represent a reasonable estimate of the fair value and to monitor controls around pricing, which includes quantitative and qualitative analysis and is overseen by the Company’s investment and accounting personnel. Examples of procedures performed include, but are not limited to, review of pricing trends, comparison of a sample of executed prices of securities sold to the fair value estimates, comparison of fair value estimates to management’s knowledge of the current market, and ongoing confirmation that third party pricing services use, wherever possible, market-based parameters for valuation. In addition, the Company utilizes both internal and external cash flow models to analyze the reasonableness of fair values utilizing credit spread and other market assumptions, where appropriate. As a result of the analysis, if the Company determines there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly. The Company also determines if the inputs used in estimated fair values received from pricing services are observable by assessing whether these inputs can be corroborated by observable market data.

For assets and liabilities reported at fair value, the Company utilizes, when available, fair values based on quoted prices in active markets that are regularly and readily obtainable. Generally, these are very liquid investments and the valuation does not require management judgment. When quoted prices in active markets are not available, fair value is based on market valuation techniques, market comparable pricing and the income approach. The use of different techniques, assumptions and inputs may have a material effect on the estimated fair values of the Company’s securities holdings. For the periods presented, the application of market standard valuation techniques applied to similar assets and liabilities has been consistent.

~~The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below.~~

~~Fixed Maturity Securities~~ – The fair values of the Company’s publicly-traded fixed maturity securities are generally based on prices obtained from independent pricing services. Prices from pricing services are sourced from multiple vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company generally receives prices from multiple pricing services for each security, but ultimately uses the price from the vendor that is highest in the hierarchy for the respective asset type. To validate reasonableness, prices are periodically reviewed as explained above. Consistent with the fair value hierarchy described above, securities with quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. If the pricing information received from third party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service.

If the Company ultimately concludes that pricing information received from the independent pricing service is not reflective of fair value, non-binding broker quotes are used, if available. If the Company concludes that the values from both pricing services and brokers are not reflective of fair value, an internally developed valuation may be prepared; however, this occurs infrequently. Internally developed valuations or non-binding broker quotes are also used to determine fair value in circumstances where vendor pricing is not available. These valuations may use significant unobservable inputs, which reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset. Observable market data may not be available in certain circumstances, such as market illiquidity and credit events related to the security. Pricing service overrides, internally developed valuations and non-binding broker quotes are generally based on significant unobservable inputs and are reflected as Level 3 in the valuation hierarchy.

The inputs used in the valuation of corporate and government securities include, but are not limited to standard market observable inputs which are derived from, or corroborated by, market observable data including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues that incorporate the credit quality and industry sector of the issuer. For structured securities, valuation is based primarily on matrix pricing or other similar techniques using standard market inputs including spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, rating, weighted average coupon, weighted average maturity, average delinquency rates, geographic region, debt-service coverage ratios and issuance-specific information including, but not limited to: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans.

When observable inputs are not available, the market standard valuation techniques for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management judgment or estimation, and cannot be supported by reference to market activity. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and are believed to be consistent with what other market participants would use when pricing such securities.

~~Table of Contents~~

The fair values of private placement securities are primarily determined using a discounted cash flow model. In certain cases these models primarily use observable inputs with a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 3. For certain private fixed maturities, the discounted cash flow model may also incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the security. To the extent management determines that such unobservable inputs are not significant to the price of a security, a Level 2 classification is made. Otherwise, a Level 3 classification is used.

~~Embedded Derivatives~~ – The fair value of embedded derivative liabilities, including those calculated by third parties, are monitored through the use of attribution reports to quantify the effect of underlying sources of fair value change, including capital market inputs based on policyholder account values, interest rates and short-term and long-term implied volatilities, from period to period. Actuarial assumptions are based on experience studies performed internally in combination with available industry information and are reviewed on a periodic basis, at least annually.

For embedded derivative liabilities associated with the underlying products in reinsurance treaties, primarily equity-indexed and variable annuity treaties, the Company utilizes a discounted cash flow model, which includes an estimate of future equity option purchases and an adjustment for a CVA. The variable annuity embedded derivative calculations are performed by third parties based on methodology and input assumptions provided by the Company. To validate the reasonableness of the resulting fair value, the Company’s internal actuaries perform reviews and analytical procedures on the results. The capital market inputs to the model, such as equity indexes, short-term equity volatility and interest rates, are generally observable. The valuation also requires certain significant inputs, which are generally not observable and accordingly, the valuation is considered Level 3included in the fair value hierarchy ~~see “Level 3 Measurements and Transfers” below for a description.~~

~~The~~exclude limited partnership interests that are measured at estimated fair value using the net asset value (“NAV”) per share (or its equivalent) as a practical expedient. As of ~~embedded derivatives associated with funds withheld reinsurance treaties is determined based upon a total return swap technique with reference to~~March 31, 2022, the fair value of ~~the~~such investments ~~held by the ceding company that support the Company’s funds withheld at interest asset with an adjustment for a CVA. The fair value~~was $609 million.

Table of ~~the underlying~~Contents


December 31, 2021:			Fair Value Measurements Using:
	Total		Level 1		Level 2		Level 3
Assets:
Fixed maturity securities – available-for-sale:
Corporate	$	38,103	$	—	$	34,215	$	3,888
Canadian government	4,944		—		4,944		—
RMBS	1,050		—		1,049		1
ABS	4,005		—		2,908		1,097
CMBS	1,849		—		1,768		81
U.S. government	2,105		1,993		100		12
State and political subdivisions	1,323		—		1,290		33
Other foreign government	7,370		—		7,337		33
Total fixed maturity securities – available-for-sale	60,749		1,993		53,611		5,145
Equity securities	151		101		—		50
Funds withheld at interest – embedded derivatives	104		—		—		104
Funds withheld at interest	83		—		—		83
Cash equivalents	1,138		1,138		—		—
Short-term investments	64		—		36		28
Other invested assets:
Derivatives	175		—		175		—
Other	52		—		52		—


Total other invested assets (1)	227		—		227		—
Total	$	62,516	$	3,232	$	53,874	$	5,410
Liabilities:
Interest-sensitive contract liabilities – embedded derivatives	$	855	$	—	$	—	$	855
Other liabilities:
Funds withheld at interest – embedded derivatives	(61)		—		—		(61)
Derivatives	39		—		39		—
Total	$	833	$	—	$	39	$	794

(1)Other invested assets is generally based on market observable inputs using industry standard valuation techniques. The valuation also requires certain significant inputs, which are generally not observable and accordingly, the valuation is considered Level 3included in the fair value hierarchy ~~see “Level 3 Measurements and Transfers” below for a description.~~

~~Credit Valuation Adjustment~~ – The Company uses a structural default risk model to estimate a CVA. The input assumptions are a combination of externally derived and published values (default threshold and uncertainty), market inputs (interest rate, equity price per share, debt per share, equity price volatility) and insurance industry data (Loss Given Default), adjusted for market recoverability.

~~Cash Equivalents and Short-Term Investments~~ – Cash equivalents and short-term investments include money market instruments, commercial paper and other highly liquid debt instruments. Money market instruments are generally valued using unadjusted quoted prices in active marketsexclude limited partnership interests that are accessible for identical assets and are primarily classified as Level 1. The fair value of certain other cash equivalents and short-term investments, such as floating rate notes and bonds with original maturities less than twelve months, are based upon other market observable data and are typically classified as Level 2. However, certain short-term investments may incorporate significant unobservable inputs resulting in a Level 3 classification. Various time deposits carried as cash equivalents or short-term investments are not measured at estimated fair value ~~and therefore are excluded from~~using the ~~tables presented.~~

~~Equity Securities~~ ~~– Equity securities consist principally~~NAV per share (or its equivalent) as a practical expedient. As of exchange-traded funds and preferred stock of publicly and privately traded companies. The fair values of publicly traded equity securities are primarily based on quoted market prices in active markets and are classified within Level 1 in the fair value hierarchy. The fair values of preferred equity securities, for which quoted market prices are not readily available, are based on prices obtained from independent pricing services and these securities are generally classified within Level 2 in the fair value hierarchy. Non-binding broker quotes for equity securities are generally based on significant unobservable inputs and are reflected as Level 3 in the fair value hierarchy.

~~FVO Contractholder-Directed Unit-Linked Investments~~ – FVO contractholder-directed investments supporting unit-linked variable annuity type liabilities primarily consist of exchange-traded funds and, to a lesser extent, fixed maturity securities and cash and cash equivalents. The fair values of the exchange-traded securities are primarily based on quoted market prices in active markets and are classified within Level 1 of the hierarchy. The fair value of the fixed maturity contractholder-directed securities is determined on a basis consistent with the methodologies described above for fixed maturity securities and are classified within Level 2 of the hierarchy.

~~Table of Contents~~

~~Derivative Assets and Derivative Liabilities –~~ All of the derivative instruments utilized by the Company, except for longevity and mortality swaps, are classified within Level 2 on the fair value hierarchy. These derivatives are principally valued using an income approach. Valuations of interest rate contracts are based on present value techniques, which utilize significant inputs that may include the swap yield curve, London Interbank Offered Rate (“LIBOR”) basis curves, and repurchase rates. Valuations of foreign currency contracts, are based on present value techniques, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves, currency spot rates, and cross currency basis curves. Valuations of credit contracts are based on present value techniques, which utilize significant inputs that may include the swap yield curve, credit curves, and recovery rates. Valuations of equity market contracts, are based on present value techniques, which utilize significant inputs that may include the swap yield curve, spot equity index levels, and dividend yield curves. Valuations of equity market contracts, option-based, are based on option pricing models, which utilize significant inputs that may include the swap yield curve, spot equity index levels, dividend yield curves, and equity volatility. The Company does not currently have derivatives, except for longevity and mortality swaps, included in Level 3 measurement.

~~Longevity and Mortality Swaps –~~ ~~The Company utilizes a discounted cash flow model to estimate~~December 31, 2021, the fair value of ~~longevity and mortality swaps. The fair value of these swaps includes an accrual for premiums payable and receivable. Some inputs to the valuation model are generally observable,~~ such as interest rates and actual population mortality experience. The valuation also requires significant inputs that are generally not observable and, accordingly, the valuation is considered Level 3 in the fair value hierarchy.

~~Level 3 Measurements and Transfers~~

~~As of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, the Company classified approximately~~ ~~5.9%~~ and 6.9%, respectively, of its fixed maturity securities in the Level 3 category. These securities primarily consist of private placement corporate securities and bank loans as well as Canadian provincial strips with inactive trading markets. Additionally, the Company has included asset-backed securities with subprime exposure and mortgage-backed securities with below investment grade ratings in the Level 3 category due to market uncertainty associated with these securities and the Company’s utilization of unobservable information from third parties for the valuation of these securities.

~~The significant unobservable inputs used in the fair value measurement of the Company’s corporate, sovereign, government-backed, and other political subdivision~~ investments are probability of default, liquidity premium and subordination premium. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumptions used for the liquidity premium and subordination premium. For securities with a fair value derived using the market comparable pricing valuation technique, liquidity premium is the only significant unobservable input.

The significant unobservable inputs used in the fair value measurement of the Company’s asset and mortgage-backed securities are prepayment rates, probability of default, liquidity premium and loss severity in the event of default. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the liquidity premium and loss severity and a directionally opposite change in the assumption used for prepayment rates.

The actuarial assumptions used in the fair value of embedded derivatives which include assumptions related to lapses, withdrawals, and mortality, are based on experience studies performed by the Company in combination with available industry information and are reviewed on a periodic basis, at least annually. The significant unobservable inputs used in the fair value measurement of embedded derivatives are assumptions associated with policyholder experience and selected capital market assumptions for equity-indexed and variable annuities. The selected capital market assumptions, which include long-term implied volatilities, are projections based on short-term historical information. Changes in interest rates, equity indices, equity volatility, CVA, and actuarial assumptions regarding policyholder experience may result in significant fluctuations in the value of embedded derivatives.

Fair value measurements associated with funds withheld reinsurance treaties are generally not materially sensitive to changes in unobservable inputs associated with policyholder experience. The primary drivers of change in these fair values are related to movements of credit spreads, which are generally observable. Increases (decreases) in market credit spreads tend to decrease (increase) the fair value of embedded derivatives. Increases (decreases) in the CVA assumption tend to decrease (increase) the magnitude of the fair value of embedded derivatives.

Fair value measurements associated with variable annuity treaties are sensitive to both capital markets inputs and policyholder experience inputs. Increases (decreases) in lapse rates tend to decrease (increase) the value of the embedded derivatives associated with variable annuity treaties. Increases (decreases) in the long-term volatility assumption tend to increase (decrease) the fair value of embedded derivatives. Increases (decreases) in the CVA assumption tend to decrease (increase) the magnitude of the fair value of embedded derivatives.

was $581 million.

Table of Contents

Quantitative Information Regarding Internally Priced Assets and Liabilities

The actuarial assumptions used in the fair value of longevity and mortality swaps include assumptions related to the level and volatility of mortality. The assumptions are based on studies performed by the Company in combination with available industry information and are reviewed on a periodic basis, at least annually.

The following table presents quantitative information about significant unobservable inputs used in Level 3 fair value measurements that are developed internally by the Company as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


	Estimated Fair Value				Valuation Technique	Unobservable Inputs	Range (Weighted Average)
	March 31, 2022		December 31, 2021				March 31, 2022	December 31, 2021
Assets:
Corporate	$	42	$	49	Market comparable securities	Liquidity premium	1%	0-1% (1%)
						EBITDA Multiple	6.7x-7.0x (6.8x)	5.2x-7.0x (6.4x)
ABS	183		205		Market comparable securities	Liquidity premium	2-18% (4%)	2-18% (4%)
U.S. government	10		12		Market comparable securities	Liquidity premium	0-1% (1%)	0-1% (1%)


Equity securities	6		5		Market comparable securities	EBITDA Multiple	6.9x-10.6x (8.3x)	6.9x-10.6x (8.0x)
Funds withheld at interest – embedded derivatives	134		182		Total return swap	Mortality	0-100% (3%)	0-100% (3%)
						Lapse	0-35% (12%)	0-35% (18%)
						Withdrawal	0-5% (4%)	0-5% (4%)
						CVA	0-5% (—%)	0-5% (—%)
						Crediting rate	1-4% (2%)	1-4% (2%)


Liabilities:
Interest-sensitive contract liabilities – embedded derivatives – indexed annuities	645		693		Discounted cash flow	Mortality	0-100% (3%)	0-100% (2%)
						Lapse	0-35% (11%)	0-35% (16%)
						Withdrawal	0-5% (3%)	0-5% (3%)
						Option budget projection	1-4% (2%)	1-4% (2%)
Interest-sensitive contract liabilities – embedded derivatives – variable annuities	148		162		Discounted cash flow	Mortality	0-100% (2%)	0-100% (2%)
						Lapse	0-25%(4%)	0-25% (4%)
						Withdrawal	0-7% (5%)	0-7% (5%)
						CVA	0-5% (1%)	0-5% (1%)
						Long-term volatility	0-27% (14%)	0-27% (14%)

Table of Contents

Estimated Fair Value       Valuation Technique Unobservable Inputs Range (Weighted Average)
September 30, 2017 December 31, 2016 September 30, 2017 December 31, 2016
Assets:
Corporate securities $ 150,170
$ 167,815
Market comparable securities Liquidity premium 0-2% (1%)
0-2%  (1%)
U.S. government and agencies 23,251
24,488
Market comparable securities Liquidity premium 0-1% (1%)
0-1%  (1%)
State and political subdivisions 4,544
4,670
Market comparable securities     Liquidity premium 1 % 1 %
Funds withheld at interest- embedded derivatives 84,325
(22,529 ) Total return swap Mortality 0-100%  (3%)
0-100%  (2%)
Lapse 0-35%  (10%)
0-35%  (8%)
Withdrawal 0-5%  (4%)
0-5%  (3%)
CVA 0-5%  (1%)
0-5%  (1%)
Crediting rate 2-4%  (3%)
2-4%  (2%)
Longevity swaps 37,827
26,958
Discounted cash flow Mortality 0-100%  (2%)
0-100%  (2%)
Mortality improvement (10%)-10%  (3%)
(10%)-10%  (3%)
Liabilities:
Interest sensitive contract liabilities- embedded derivatives- indexed annuities 821,821
805,672
Discounted cash flow Mortality 0-100%  (3%)
0-100% (2%)
Lapse 0-35%  (10%)
0-35% (8%)
Withdrawal 0-5%  (4%)
0-5% (3%)
Option budget projection 2-4%  (3%)
2-4% (2%)

Interest sensitive contract liabilities- embedded derivatives- variable annuities 168,119
184,636

Discounted cash
flow
Mortality 0-100% (1%)
0-100% (2%)
Lapse 0-25% (5%)
0-25% (6%)
Withdrawal 0-7% (3%)
0-7% (3%)
CVA 0-5% (1%)
0-5% (1%)
Long-term volatility 0-27% (9%)
0-27% (14%)
Mortality swaps 1,683
2,462
Discounted cash flow Mortality 0-100%  (1%)
0-100%  (1%)
Changes in Level 3 Assets and Liabilities

The Company recognizes transfers of assets and liabilities into and out of levels within the fair value hierarchy at the beginning of the quarter in which the actual event or change in circumstances that caused the transfer occurs. Assets and liabilities transferred into Level 3 are due to a lack of observable market transactions and price information. Assets and liabilities are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data. This may be due to a significant increase in market activity for the asset or liability, a specific event, one or more significant input(s) becoming observable. Transfers out of Level 3 ~~were~~are primarily the result of the Company obtaining observable pricing information or a ~~third party~~third-party pricing quotation that appropriately reflects the fair value of those assets and liabilities. ~~In addition, certain transfers out~~

For further information on the Company’s valuation processes, see Note 6 – “Fair Value of ~~Level 3 were also due~~Assets and Liabilities” in the Notes to ~~ratings upgrades~~Consolidated Financial Statements included in the Company’s 2021 Annual Report.

The reconciliations for all assets and liabilities measured at fair value on ~~mortgage-backed securities that~~a recurring basis using significant unobservable inputs (Level 3) are as follows (dollars in millions):


For the three months ended March 31, 2022:	Fixed maturity securities – available-for-sale												Funds withheld at interest –embedded derivatives, net(1)		Funds withheld at interest		Interest-sensitive contract liabilities embedded derivatives
	Corporate		Foreign govt		Structured securities		U.S. and local govt		Equity securities		Short-term investments
Fair value, beginning of period	$	3,888	$	33	$	1,179	$	45	$	50	$	28	$	165	$	83	$	(855)
Total gains/losses (realized/unrealized)
Included in earnings, net:
Net investment income	1		—		—		—		—		—		—		(5)		—
Investment related gains (losses), net	—		—		(5)		—		(1)		—		(33)		—		14

Interest credited	—		—		—		—		—		—		—		—		36

Included in other comprehensive income (loss)	(144)		(4)		(72)		(1)		—		—		—		(2)		—

Purchases(2)	365		—		95		—		—		20		—		1		(6)
Sales(2)	(16)		—		(51)		—		(1)		—		—		—		—
Settlements(2)	(26)		—		(38)		(2)		—		—		—		(2)		18
Transfers into Level 3	—		—		13		6		—		—		—		—		—
Transfers out of Level 3	(22)		—		—		(4)		—		—		—		—		—
Fair value, end of period	$	4,046	$	29	$	1,121	$	44	$	48	$	48	$	132	$	75	$	(793)
Total gains/losses (realized/unrealized) recorded for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Net investment income	$	1	$	—	$	—	$	—	$	—	$	—	$	—	$	(5)	$	—
Investment related gains (losses), net	—		—		(5)		—		(1)		—		(33)		—		12

Claims and other policy benefits	—		—		—		—		—		—		—		—		—
Interest credited	—		—		—		—		—		—		—		—		18
Included in other comprehensive income (loss)	(144)		(4)		(71)		(1)		—		—		—		(2)		—

(1)Funds withheld at interest – embedded derivative assets and liabilities are presented net for purposes of the rollforward.

(2)The amount reported within purchases, sales and settlements is the purchase price (for purchases) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased or sold/settled. Items purchased and sold/settled in the same period are excluded from the rollforward. The Company had ~~previously had below investment-grade ratings.~~

no issuances during the period.

Table of Contents


For the three months ended March 31, 2021:	Fixed maturity securities – available-for-sale												Funds withheld at interest –embedded derivatives		Funds withheld at interest		Interest-sensitive contract liabilities embedded derivatives
	Corporate		Foreign govt		Structured securities		U.S. and local govt		Equity securities		Short-term investments
Fair value, beginning of period	$	3,029	$	17	$	254	$	23	$	53	$	15	$	114	$	56	$	(907)
Total gains/losses (realized/unrealized)
Included in earnings, net:
Net investment income	1		—		—		—		—		—		(5)		(5)		—
Investment related gains (losses), net	(1)		—		—		—		1		—		50		—		19

Interest credited	—		—		—		—		—		—		—		—		13

Included in other comprehensive income (loss)	(82)		(1)		(1)		—		—		—		1		—		—

Purchases(1)	223		—		166		—		—		—		16		16		(3)
Sales(1)	(1)		—		—		—		—		—		—		—		—
Settlements(1)	(72)		—		(61)		(1)		—		—		—		—		22
Transfers into Level 3	4		—		30		—		—		—		—		—		—
Transfers out of Level 3	—		—		—		—		—		(4)		—		—		—
Fair value, end of period	$	3,101	$	16	$	388	$	22	$	54	$	11	$	176	$	67	$	(856)
Total gains/losses (realized/unrealized) recorded for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Net investment income	$	1	$	—	$	—	$	—	$	—	$	—	$	(5)	$	(5)	$	—
Investment related gains (losses), net	(1)		—		—		—		1		—		50		—		16

Claims & other policy benefits	—		—		—		—		—		—		—		—		(8)

Included in other comprehensive income (loss)	(82)		(1)		(1)		—		—		—		—		—		—

~~Transfers from Level 1 to Level 2 are due to~~(1)The amount reported within purchases, sales and settlements is the ~~lack of observable market data when pricing these securities, while transfers from Level 2 to Level 1 are due to an increase~~purchase price (for purchases) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased or sold/settled. Items purchased and sold/settled in the ~~availability of market observable data in an active market. There were~~same period are excluded from the rollforward. The Company had no ~~transfers between Level 1 and Level 2~~issuances during the ~~three and nine months ended September 30, 2016. The following tables present the transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2017 (dollars in thousands):~~period.

2017

Transfers from
Level 1 to
Level 2

Transfers from
Level 2 to
Level 1
Three months ended September 30:
Fixed maturity securities - available-for-sale:
Corporate securities $ —
$ —

Nine months ended September 30:
Fixed maturity securities - available-for-sale:
Corporate securities $ —
$ 88,674

~~The tables below provide a summary of the changes in fair value of Level 3 assets and liabilities for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as well as the portion of gains or losses included in income for the~~ ~~three and nine months ended September 30, 2017~~ ~~attributable to unrealized gains or losses related to those assets and liabilities still held at~~ ~~September 30, 2017~~ ~~(dollars in thousands):~~

For the three months ended September 30, 2017: Fixed maturity securities - available-for-sale

Corporate
securities
Canadian and Canadian provincial governments
Residential
mortgage-
backed
securities

Asset-backed
securities
Fair value, beginning of period $ 1,291,054
$ 533,270
$ 148,685
$ 201,589
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses (383 ) 3,460
(30 ) 160
Investment related gains (losses), net 396
—
44
—
Included in other comprehensive income (2,700 ) (11,365 ) 104
(101 )
Purchases⁽¹⁾
107,670
—
26,765
—
Sales⁽¹⁾
(26,337 ) —
(3,553 ) —
Settlements⁽¹⁾
(88,551 ) —
(3,645 ) (15,243 )
Transfers into Level 3 3,844
—
15
36,994
Transfers out of Level 3 (12,973 ) —
(50,390 ) (78,202 )
Fair value, end of period $ 1,272,020
$ 525,365
$ 117,995
$ 145,197
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ (394 ) $ 3,460
$ (27 ) $ 156

~~Table of Contents~~

For the three months ended September 30, 2017 (continued): Fixed maturity securities available-for-sale
Commercial
mortgage-
backed
securities U.S. government
and agencies State
and political
subdivisions Other foreign government, supranational and foreign government-sponsored enterprises
Fair value, beginning of period $ 1,943
$ 23,567
$ 34,434
$ 11,994
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses —
(116 ) 26
(1 )
Included in other comprehensive income 5
6
(208 ) (7 )
Purchases⁽¹⁾
—
134
—
495
Settlements⁽¹⁾
(1 ) (340 ) (35 ) —
Transfers into Level 3 —
—
7,295
—
Transfers out of Level 3 —
—
—
(6,853 )
Fair value, end of period $ 1,947
$ 23,251
$ 41,512
$ 5,628
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ —
$ (116 ) $ 26
$ (1 )

For the three months ended September 30, 2017 (continued): Short-term Investments
Funds withheld
at interest-
embedded
derivatives
Other assets - longevity swaps Interest sensitive contract liabilities embedded derivatives Other liabilities - mortality swaps
Fair value, beginning of period $ 3,548
$ 61,281
$ 33,349
$ (974,631 ) $ (1,552 )
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment related gains (losses), net —
23,044
—
(10,047 ) —
Interest credited —
—
—
(8,335 ) —
Included in other comprehensive income (3 ) —
1,144
—
1
Other revenues —
—
3,334
—
(132 )
Purchases⁽¹⁾
3,164
—
—
(18,736 ) —
Settlements⁽¹⁾
(114 ) —
—
21,809
—
Transfers out of Level 3 (3,236 ) —

—
—
Fair value, end of period $ 3,359
$ 84,325
$ 37,827
$ (989,940 ) $ (1,683 )
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment related gains (losses), net —
23,044
—
(11,900 ) —
Other revenues —
—
3,334
—
(132 )
Interest credited —
—
—
(30,145 ) —

~~Table of Contents~~

For the nine months ended September 30, 2017: Fixed maturity securities - available-for-sale

Corporate
securities
Canadian and Canadian provincial governments
Residential
mortgage-
backed
securities

Asset-backed
securities
Fair value, beginning of period $ 1,272,253
$ 475,965
$ 160,291
$ 219,280
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses (1,202 ) 9,731
(304 ) 1,689
Investment related gains (losses), net 7,592
—
524
—
Interest credited

Included in other comprehensive income (2,300 ) 39,669
2,716
6,802
Purchases⁽¹⁾
257,671
—
72,582
45,215
Sales⁽¹⁾
(49,511 ) —
(18,624 ) —
Settlements⁽¹⁾
(234,552 ) —
(15,084 ) (60,966 )
Transfers into Level 3 35,042
—
5,515
75,752
Transfers out of Level 3 (12,973 ) —
(89,621 ) (142,575 )
Fair value, end of period $ 1,272,020
$ 525,365
$ 117,995
$ 145,197
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ (1,213 ) $ 9,731
$ (155 ) $ 556
Investment related gains (losses), net (2,788 ) —
(346 ) —

For the nine months ended September 30, 2017 (continued): Fixed maturity securities available-for-sale
Commercial
mortgage-
backed
securities U.S. government
and agencies State
and political
subdivisions Other foreign government, supranational and foreign government-sponsored enterprises
Fair value, beginning of period $ 21,145
$ 24,488
$ 41,666
$ 12,869
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses 709
(348 ) (68 ) (1 )
Investment related gains (losses), net (595 ) —
—
—
Included in other comprehensive income (57 ) 269
(228 ) (210 )
Other revenues —
—
—
—
Purchases⁽¹⁾
—
370
—
495
Sales⁽¹⁾
(3,720 ) —
—
—
Settlements⁽¹⁾
(5,403 ) (1,528 ) (309 ) (672 )
Transfers into Level 3 —
—
7,295
—
Transfers out of Level 3 (10,132 ) —
(6,844 ) (6,853 )
Fair value, end of period $ 1,947
$ 23,251
$ 41,512
$ 5,628
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ —
$ (348 ) $ (68 ) $ (1 )

~~Table of Contents~~

For the nine months ended September 30, 2017 (continued): Short-term Investments
Funds withheld
at interest-
embedded
derivatives
Other assets - longevity swaps Interest sensitive contract liabilities embedded derivatives Other liabilities - mortality swaps
Fair value, beginning of period $ 3,346
$ (22,529 ) $ 26,958
$ (990,308 ) $ (2,462 )
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment related gains (losses), net —
106,854
—
9,005
—
Interest credited —
—
—
(20,408 ) —
Included in other comprehensive income 1
—
3,689
—
1
Other revenues —
—
7,180
—
(922 )
Purchases⁽¹⁾
3,520
—
—
(51,276 ) —
Settlements⁽¹⁾
(272 ) —
—
63,047
1,700
Transfers out of Level 3 (3,236 ) —
—
—
—
Fair value, end of period $ 3,359
$ 84,325
$ 37,827
$ (989,940 ) $ (1,683 )
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment related gains (losses), net —
106,854
—
2,934
—
Other revenues —
—
7,180
—
(922 )
Interest credited —
—
—
(83,456 ) —


~~(1)~~	The amount reported within purchases, sales and settlements is the purchase price (for purchases) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased or sold/settled. Items purchased and sold/settled in the same period are excluded from the rollforward. The Company had no issuances during the period.

~~The tables below provide a summary of the changes in fair value of Level 3 assets and liabilities for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2016, as well as the portion of gains or losses included in income for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2016~~ ~~attributable to unrealized gains or losses related to those assets and liabilities still held at~~ ~~September 30, 2016~~ ~~(dollars in thousands):~~

For the three months ended September 30, 2016: Fixed maturity securities - available-for-sale

Corporate
securities
Canadian and Canadian provincial governments
Residential
mortgage-
backed
securities

Asset-backed
securities

Commercial
mortgage-
backed
securities

U.S. government
and agencies
Fair value, beginning of period $ 1,297,382
$ 554,192
$ 165,979
$ 298,816
$ 37,935
$ 26,255
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses (567 ) 3,085
(40 ) 173
304
(122 )
Investment related gains (losses), net 17,917
—
—
—
—
—
Included in other comprehensive income (19,635 ) 16,342
2,597
3,410
(94 ) (135 )
Purchases⁽¹⁾
54,492
—
27,548
5,013
—
147
Sales⁽¹⁾
(26,320 ) —
—
—
—
—
Settlements⁽¹⁾
(44,110 ) —
(6,935 ) (18,602 ) (1 ) (312 )
Transfers into Level 3 —
—
1,544
28,285
—
—
Transfers out of Level 3 (23,255 ) —
—
(93,444 ) (637 ) —
Fair value, end of period $ 1,255,904
$ 573,619
$ 190,693
$ 223,651
$ 37,507
$ 25,833
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ (489 ) $ 3,085
$ (40 ) $ 173
$ 304
$ (122 )

~~Table of Contents~~

For the three months ended September 30, 2016 (continued):
Fixed maturity securities
available-for-sale

State
and political
subdivisions Other foreign government, supranational and foreign government-sponsored enterprises
Funds withheld
at interest-
embedded
derivatives
Other assets - longevity swaps Interest sensitive contract liabilities embedded derivatives Other liabilities - mortality swaps
Fair value, beginning of period $ 35,246
$ 13,706
$ (91,981 ) $ 17,781
$ (1,125,380 ) $ (1,997 )
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses 10
—
—
—
—
—
Investment related gains (losses), net —
—
49,078
—
7,988
—
Interest credited —
—
—
—
(20,104 ) —
Included in other comprehensive income 553
48
—
327
—
—
Other revenues —
—
—
8,921
—
(400 )
Purchases⁽¹⁾
1,986
—
—
—
(11,853 ) —
Sales⁽¹⁾
—
—
—
—
—
—
Settlements⁽¹⁾
(32 ) (328 ) —
—
19,225
329
Transfers into Level 3 —
—
—
—
—
—
Transfers out of Level 3 —
—
—
—
—
—
Fair value, end of period $ 37,763
$ 13,426
$ (42,903 ) $ 27,029
$ (1,130,124 ) $ (2,068 )
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ 10
$ —
$ —
$ —
$ —
$ —
Investment related gains (losses), net —
—
49,078
—
3,969
—
Other revenues —
—
—
8,921
—
(400 )
Interest credited —
—
—
—
(39,329 ) —

For the nine months ended September 30, 2016: Fixed maturity securities - available-for-sale

Corporate
securities
Canadian and Canadian provincial governments
Residential
mortgage-
backed
securities

Asset-backed
securities

Commercial
mortgage-
backed
securities

U.S. government
and agencies
Fair value, beginning of period $ 1,226,970
$ 416,076
$ 330,649
$ 303,836
$ 68,563
$ 26,265
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses (1,986 ) 9,136
(411 ) 599
1,437
(367 )
Investment related gains (losses), net (3,939 ) —
(1,922 ) 1,101
(3,289 ) —
Interest credited —
—
—
—
—
—
Included in other comprehensive income 36,438
148,407
2,104
(4,324 ) (2,453 ) 922
Other revenues —
—
—
—
—
—
Purchases⁽¹⁾
195,070
—
99,776
102,063
1,545
404
Sales⁽¹⁾
(36,803 ) —
(167,684 ) (38,681 ) (25,976 ) —
Settlements⁽¹⁾
(141,065 ) —
(31,839 ) (26,523 ) (138 ) (1,391 )
Transfers into Level 3 10,206
—
1,544
53,081
—
—
Transfers out of Level 3 (28,987 ) —
(41,524 ) (167,501 ) (2,182 ) —
Fair value, end of period $ 1,255,904
$ 573,619
$ 190,693
$ 223,651
$ 37,507
$ 25,833
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ (1,917 ) $ 9,136
$ 2
$ 523
$ 1,335
$ (367 )

~~Table of Contents~~

For the nine months ended September 30, 2016 (continued):
Fixed maturity securities
available-for-sale

State
and political
subdivisions Other foreign government, supranational and foreign government-sponsored enterprises
Funds withheld
at interest-
embedded
derivatives
Other assets - longevity swaps Interest sensitive contract liabilities embedded derivatives Other liabilities - mortality swaps
Fair value, beginning of period $ 38,342
$ 14,065
$ (76,698 ) $ 14,996
$ (1,070,584 ) $ (2,619 )
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses 205
—
—
—
—
—
Investment related gains (losses), net —
—
33,795
—
(83,089 ) —
Interest credited —
—
—
—
(20,730 ) —
Included in other comprehensive income 1,725
336
—
631
—
—
Other revenues —
—
—
11,402
—
222
Purchases⁽¹⁾
1,986
—
—
—
(9,817 ) —
Sales⁽¹⁾
—
—
—
—
—
—
Settlements⁽¹⁾
(290 ) (975 ) —
—
54,096
329
Transfers into Level 3 —
—
—
—
—
—
Transfers out of Level 3 (4,205 ) —
—
—
—
—
Fair value, end of period $ 37,763
$ 13,426
$ (42,903 ) $ 27,029
$ (1,130,124 ) $ (2,068 )
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses $ 205
$ —
$ —
$ —
$ —
$ —
Investment related gains (losses), net —
—
33,795
—
(92,842 ) —
Other revenues —
—
—
11,402
—
222
Interest credited —
—
—
—
(74,826 ) —


~~(1)~~	The amount reported within purchases, sales and settlements is the purchase price (for purchases) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased or sold/settled. Items purchased and sold/settled in the same period are excluded from the rollforward. The Company had no issuances during the period.

~~Table of Contents~~

Nonrecurring Fair Value Measurements

The ~~following table presents information for~~Company has certain assets ~~measured~~subject to measurement at ~~estimated~~ fair value on a nonrecurring basis, ~~during~~in periods subsequent to their initial recognition if they are determined to be impaired. During the ~~periods presented~~three months ended March 31, 2022 and ~~still held~~2021, the Company did not have any material assets that were measured at ~~the reporting date (for example, when there is evidence of impairment). The estimated~~ fair ~~values for these assets were determined using significant unobservable inputs (Level 3).~~

Carrying Value After Measurement Net Investment Gains (Losses)
At September 30, Three months ended September 30, Nine months ended September 30,
(dollars in thousands) 2017 2016 2017 2016 2017 2016
Mortgage loans⁽¹⁾
$ —
$ 6,913
$ —
$ 747
$ —
$ 45
Limited partnership interests⁽²⁾
4,656
4,460
(896 ) —
(7,204 ) (2,039 )
Private equities⁽³⁾
106
—
(531 ) —
(531 ) —


~~(1)~~	Estimated fair values for impaired mortgage loans are based on internal valuation models using unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on external appraisals of the underlying collateral.


~~(2)~~	The impaired limited partnership interests presented above were accounted for using the cost method. Impairments on these cost method investments were recognized at estimated fair value determined using the net asset values of the Company’s ownership interest as provided in the financial statements of the investees. The market for these investments has limited activity and price transparency.


~~(3)~~	~~The fair value of the Company’s private equity investments is based on external valuation models.~~

value due to impairment.

Fair Value of Financial Instruments

~~The Company is required by general accounting principles for~~ ~~Fair Value Measurements and Disclosures~~ ~~to disclose the fair value of certain financial instruments including those that are not carried at fair value.~~ The following table presents the carrying ~~amounts~~values and estimated fair values of the Company’s financial instruments, which were not measured at fair value on a recurring basis, as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions). For additional information regarding the methods and significant assumptions used by the Company to estimate these fair values, see Note 6 – “Fair Value of Assets and Liabilities” in the Notes to Consolidated Financial Statements included in the Company’s 2021 Annual Report. This table excludes any payables or receivables for collateral under repurchase/reverse repurchase agreements and other transactions. The estimated fair value of the excluded amount approximates carrying value as they equal the amount of cash collateral received/paid.

September 30, 2017: Carrying Value
Estimated
Fair Value
Fair Value Measurement Using:
Level 1 Level 2 Level 3 NAV
Assets:
Mortgage loans on real estate $ 4,322,329
$ 4,494,964
$ —
$ —
$ 4,494,964
$ —
Policy loans 1,340,146
1,340,146
—
1,340,146
—
—
Funds withheld at interest⁽¹⁾
5,931,416
6,309,369
—
—
6,309,369
—
Cash and cash equivalents⁽²⁾
872,404
872,404
872,404
—
—
—
Short-term investments⁽²⁾
24,128
24,128
24,128
—
—
—
Other invested assets⁽²⁾
601,905
627,650
28,267
68,342
230,355
300,686
Accrued investment income 420,111
420,111
—
420,111
—
—
Liabilities:
Interest-sensitive contract liabilities⁽¹⁾
$ 12,616,104
$ 12,960,161
$ —
$ —
$ 12,960,161
$ —
Long-term debt 2,778,480
2,997,791
—
—
2,997,791
—
Collateral finance and securitization notes 796,825
708,342
—
—
708,342
—

December 31, 2016: Carrying Value
Estimated
Fair Value
Fair Value Measurement Using:
Level 1 Level 2 Level 3 NAV
Assets:
Mortgage loans on real estate $ 3,775,522
$ 3,786,987
$ —
$ —
$ 3,786,987
$ —
Policy loans 1,427,602
1,427,602
—
1,427,602
—
—
Funds withheld at interest⁽¹⁾
5,893,381
6,193,166
—
—
6,193,166
—
Cash and cash equivalents⁽²⁾
862,117
862,117
862,117
—
—
—
Short-term investments⁽²⁾
32,469
32,469
32,469
—
—
—
Other invested assets⁽²⁾
477,132
510,640
26,294
55,669
131,904
296,773
Accrued investment income 347,173
347,173
—
347,173
—
—
Liabilities:
Interest-sensitive contract liabilities⁽¹⁾
$ 10,225,099
$ 10,234,544
$ —
$ —
$ 10,234,544
$ —
Long-term debt 3,088,635
3,186,173
—
—
3,186,173
—
Collateral finance and securitization notes 840,700
745,805
—
—
745,805
—


~~(1)~~	Carrying values presented herein differ from those presented in the condensed consolidated balance sheets because certain items within the respective financial statement caption are embedded derivatives and are measured at fair value on a recurring basis.


~~(2)~~	Carrying values presented herein differ from those presented in the condensed consolidated balance sheets because certain items within the respective financial statement caption are measured at fair value on a recurring basis.

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March 31, 2022:	Carrying Value (1)		Estimated Fair Value		Fair Value Measurement Using:
					Level 1		Level 2		Level 3
Assets:
Mortgage loans on real estate	$	6,535	$	6,382	$	—	$	—	$	6,382
Policy loans	1,221		1,221		—		1,221		—
Funds withheld at interest	6,672		6,795		—		—		6,795
Cash and cash equivalents	1,735		1,735		1,735		—		—
Short-term investments	47		47		47		—		—
Other invested assets	954		900		5		58		837
Accrued investment income	578		578		—		578		—
Liabilities:
Interest-sensitive contract liabilities	$	20,834	$	21,046	$	—	$	—	$	21,046
Other liabilities – funds withheld at interest	1,646		1,556		—		—		1,556
Long-term debt	3,667		3,614		—		—		3,614
Collateral finance and securitization notes	166		141		—		—		141

December 31, 2021:
Assets:
Mortgage loans on real estate	$	6,283	$	6,580	$	—	$	—	$	6,580
Policy loans	1,234		1,234		—		1,234		—
Funds withheld at interest	6,747		7,075		—		—		7,075
Cash and cash equivalents	1,810		1,810		1,810		—		—
Short-term investments	23		23		23		—		—
Other invested assets	910		907		6		70		831
Accrued investment income	533		533		—		533		—
Liabilities:
Interest-sensitive contract liabilities	$	18,625	$	19,540	$	—	$	—	$	19,540
Other liabilities – funds withheld at interest	1,658		1,657		—		—		1,657
Long-term debt	3,667		3,886		—		—		3,886
Collateral finance and securitization notes	180		153		—		—		153

~~Mortgage Loans on Real Estate~~ ~~– The~~(1)Carrying values presented herein may differ from those in the Company’s condensed consolidated balance sheets because certain items within the respective financial statement captions may be measured at fair value of mortgage loans on real estate is estimated by discounting cash flows, both principal and interest, using current interest rates for mortgage loans with similar credit ratings and similar remaining maturities. As such, inputs include current treasury yields and spreads, which are based on the credit rating and average life of the loan, corresponding to the market spreads. The valuation of mortgage loans on real estate is considered Level 3 in the fair value hierarchy.

~~Policy Loans~~ – Policy loans typically carry an interest rate that is adjusted annually based on an observable market index and therefore carrying value approximates fair value. The valuation of policy loans is considered Level 2 in the fair value hierarchy.

~~Funds Withheld at Interest~~ – The carrying value of funds withheld at interest approximates fair value except where the funds withheld are specifically identified in the agreement. When funds withheld are specifically identified in the agreement, the fair value is based on the fair value of the underlying assets which are held by the ceding company. Ceding companies use a variety of sources and pricing methodologies, which are not transparent to the Company and may include significant unobservable inputs, to value the securities that are held in distinct portfolios, therefore the valuation of these funds withheld assets are considered Level 3 in the fair value hierarchy.

~~Cash and Cash Equivalents and Short-term Investments~~ – The carrying values of cash and cash equivalents and short-term investments approximates fair values due to the short-term maturities of these instruments and are considered Level 1 in the fair value hierarchy.

~~Other Invested Assets~~ – This primarily includes limited partnership interests accounted for using the cost method, structured loans, FHLB common stock, cash collateral and equity release mortgages. The fair value of limited partnership interests and other investments accounted for using the cost method is determined using the net asset value (“NAV”) of the Company’s ownership interest as provided in the financial statements of the investees. The fair value of structured loans is estimated based on a discounted cash flow analysis using discount rates applicable to each structured loan, this is considered Level 3 in the fair value hierarchy. The fair value of the Company’s common stock investment in the FHLB is considered to be the carrying value and it is considered Level 2 in the fair value hierarchy. The fair value of the Company’s cash collateral is considered to be the carrying value and considered to be Level 1 in the fair value hierarchy. The fair value of the Company’s equity release mortgage loan portfolio, considered Level 3 in the fair value hierarchy, is estimated by discounting cash flows, both principal and interest, using a risk free rate plus an illiquidity premium. The cash flow analysis considers future expenses, changes in property prices, and actuarial analysis of borrower behavior, mortality and morbidity.recurring basis.

~~Accrued Investment Income~~ ~~– The carrying value for accrued investment income approximates fair value as there are no adjustments made to the carrying value. This is considered Level 2 in the fair value hierarchy.~~

~~Interest-Sensitive Contract Liabilities~~ – The carrying and fair values of interest-sensitive contract liabilities reflected in the table above exclude contracts with significant mortality risk. The fair value of the Company’s interest-sensitive contract liabilities utilizes a market standard technique with both capital market inputs and policyholder behavior assumptions, as well as cash values adjusted for recapture fees. The capital market inputs to the model, such as interest rates, are generally observable. Policyholder behavior assumptions are generally not observable and may require use of significant management judgment. The valuation of interest-sensitive contract liabilities is considered Level 3 in the fair value hierarchy.7. Segment Information

~~Long-term Debt/Collateral Finance and Securitization Notes~~ – The fair value of the Company’s long-term, debt and collateral finance and securitization notes is generally estimated by discounting future cash flows using market rates currently available for debt with similar remaining maturities and reflecting the credit risk of the Company, including inputs when available, from actively traded debt of the Company or other companies with similar credit quality. The valuation of long-term debt, and collateral finance and securitization notes are generally obtained from brokers and is considered Level 3 in the fair value hierarchy.

~~Table of Contents~~


7.	~~Segment Information~~

The accounting policies of the segments are the same as those described in ~~the Summary of Significant~~Note 2 – “Significant Accounting Policies and Pronouncements” in ~~Note 2 of~~ the ~~consolidated financial statements accompanying~~Notes to Consolidated Financial Statements included in the ~~2016~~Company’s 2021 Annual Report. The Company measures segment performance primarily based on profit or loss from operations before income taxes. There are no intersegment reinsurance transactions and the Company does not have any material long-lived assets.

The Company allocates capital to its segments based on an internally developed economic capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model considers the unique and specific nature of the risks inherent in the Company’s businesses. As a result of the economic capital allocation process, a portion of investment income is attributed to the segments based on the level of allocated capital. In addition, the segments are charged for excess capital utilized above the allocated economic capital basis. This charge is included in policy acquisition costs and other insurance expenses.

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The Company has geographic-based and business-based operational segments. Geographic-based operations are further segmented into traditional and financial solutions businesses. Information related to revenues, income (loss) before income taxes and total assets of the Company for each reportable segment are summarized below (dollars in ~~thousands).~~millions):


	Three months ended March 31,
Revenues:		2022		2021
U.S. and Latin America:
Traditional		$	1,867	$	1,637
Financial Solutions		252		318
Total		2,119		1,955
Canada:
Traditional		362		343
Financial Solutions		25		26
Total		387		369
Europe, Middle East and Africa:
Traditional		476		457
Financial Solutions		182		146
Total		658		603
Asia Pacific:
Traditional		688		647
Financial Solutions		21		104
Total		709		751
Corporate and Other		57		441
Total		$	3,930	$	4,119


	Three months ended March 31,
Income (loss) before income taxes:		2022		2021
U.S. and Latin America:
Traditional		$	(166)	$	(338)
Financial Solutions		44		83
Total		(122)		(255)
Canada:
Traditional		6		24
Financial Solutions		13		6
Total		19		30
Europe, Middle East and Africa:
Traditional		(6)		(68)
Financial Solutions		85		60
Total		79		(8)
Asia Pacific:
Traditional		51		41
Financial Solutions		(56)		28
Total		(5)		69
Corporate and Other		(31)		350
Total		$	(60)	$	186

Three months ended September 30, Nine months ended September 30,
Revenues: 2017 2016 2017 2016
U.S. and Latin America:
Traditional $ 1,521,383
$ 1,444,917
$ 4,532,584
$ 4,339,737
Financial Solutions 264,170
276,135
834,992
620,117
Total 1,785,553
1,721,052
5,367,576
4,959,854
Canada:
Traditional 281,095
280,959
814,643
827,871
Financial Solutions 12,430
12,359
36,240
34,897
Total 293,525
293,318
850,883
862,768
Europe, Middle East and Africa:
Traditional 360,972
289,070
1,024,978
880,346
Financial Solutions 77,041
99,752
230,435
248,485
Total 438,013
388,822
1,255,413
1,128,831
Asia Pacific:
Traditional 561,660
427,647
1,628,419
1,299,417
Financial Solutions 16,932
19,037
55,368
56,153
Total 578,592
446,684
1,683,787
1,355,570
Corporate and Other 49,627
50,701
125,667
145,190
Total $ 3,145,310
$ 2,900,577
$ 9,283,326
$ 8,452,213

Three months ended September 30, Nine months ended September 30,
Income (loss) before income taxes: 2017 2016 2017 2016
U.S. and Latin America:
Traditional $ 160,512
$ 77,081
$ 281,066
$ 239,609
Financial Solutions 89,118
102,714
299,689
196,672
Total 249,630
179,795
580,755
436,281
Canada:
Traditional 28,789
34,275
80,953
97,679
Financial Solutions 4,472
1,160
12,489
3,880
Total 33,261
35,435
93,442
101,559
Europe, Middle East and Africa:
Traditional 15,421
8,515
40,751
14,233
Financial Solutions 30,953
43,786
91,776
96,679
Total 46,374
52,301
132,527
110,912
Asia Pacific:
Traditional 26,564
19,822
121,574
95,464
Financial Solutions (229 ) 7,549
11,020
16,029
Total 26,335
27,371
132,594
111,493
Corporate and Other (15,438 ) (7,302 ) (51,997 ) (11,842 )
Total $ 340,162
$ 287,600
$ 887,321
$ 748,403

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Assets:	March 31, 2022		December 31, 2021
U.S. and Latin America:
Traditional	$	20,960	$	20,572
Financial Solutions	27,229		29,028
Total	48,189		49,600
Canada:
Traditional	5,144		5,091
Financial Solutions	43		18
Total	5,187		5,109
Europe, Middle East and Africa:
Traditional	4,655		4,670
Financial Solutions	6,506		7,165
Total	11,161		11,835
Asia Pacific:
Traditional	10,769		10,048
Financial Solutions	8,808		7,678
Total	19,577		17,726
Corporate and Other	5,647		7,905
Total	$	89,761	$	92,175

Assets: September 30, 2017 December 31, 2016
U.S. and Latin America:
Traditional $ 18,707,824
$ 18,140,825
Financial Solutions 16,101,746
13,712,106
Total 34,809,570
31,852,931
Canada:
Traditional 4,177,125
3,846,682
Financial Solutions 88,609
85,405
Total 4,265,734
3,932,087
Europe, Middle East and Africa:
Traditional 2,978,701
2,559,124
Financial Solutions 4,094,518
3,876,131
Total 7,073,219
6,435,255
Asia Pacific:
Traditional 4,750,652
3,968,081
Financial Solutions 1,187,514
676,281
Total 5,938,166
4,644,362
Corporate and Other 6,607,342
6,233,244
Total $ 58,694,031
$ 53,097,879

8. Commitments, Contingencies and Guarantees

Commitments

Funding of Investments

The Company’s commitments to fund investments as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021, are presented in the following table (dollars in ~~thousands)~~millions):

September 30, 2017 December 31, 2016
Limited partnership interests and real estate joint ventures $ 349,157
$ 332,169
Commercial mortgage loans 75,492
126,248
Bank loans and private placements 51,479
58,318
Equity release mortgages 156,777
130,324


	March 31, 2022		December 31, 2021
Limited partnership interests and joint ventures	$	978	$	1,031
Mortgage loans on real estate	57		152
Bank loans and private placements	914		768
Lifetime mortgages	90		41

The Company anticipates that the majority of its current commitments will be invested over the next five years; however, these commitments could become due any time at the request of the counterparties. Investments in limited partnership interests and real estate joint ventures are carried at cost or reported using the equity method and included in other invested assets in the condensed consolidated balance sheets. Bank loans and private placements are ~~carried at fair value and~~ included in fixed maturity securities available-for-sale. ~~Equity release mortgages are carried at unpaid principal balances, net of any amortized premium or discount and valuation allowance and~~

The Company has an immaterial liability, included in other ~~invested assets.~~liabilities, for expected credit losses associated with unfunded commitments as of March 31, 2022 and December 31, 2021.

Funding Agreements

Federal Home Loan Bank of Des Moines

The Company is a member of the FHLB and, through membership, has issued funding agreements to the FHLB in exchange for cash advances. As of March 31, 2022 and December 31, 2021, the Company had $1.1 billion and $1.4 billion, respectively, of FHLB funding agreements outstanding. The Company is required to provide collateral in excess of the funding agreement amounts outstanding, considering any discounts to the securities posted and prepayment penalties.

Funding Agreement Backed Notes

The Company’s Funding Agreement Backed Notes (“FABN”) program allows RGA Global Funding, a special-purpose, unaffiliated statutory trust, to offer its senior secured medium-term notes to investors. RGA Global Funding uses the net proceeds from each sale to purchase one or more funding agreements from the Company. As of March 31, 2022 and December 31, 2021, the Company had $900 million and $500 million, respectively, of FABN agreements outstanding and are included within interest-sensitive contract liabilities.

Contingencies

Litigation

The Company is subject to litigation in the normal course of its ~~business. The~~business, however, the Company currently has no material litigation. A legal reserve is established when the Company is notified of an arbitration demand or litigation or is notified that

Table of Contents

an arbitration demand or litigation is imminent, it is probable that the Company will incur a loss as a result and the amount of the probable loss is reasonably capable of being estimated.

Other Contingencies

The Company indemnifies its directors and officers as provided in its charters and by-laws. Since this indemnity generally is not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount due under this indemnity in the future.

Guarantees

Statutory Reserve Support

Certain RGA ~~through wholly-owned~~ subsidiaries ~~has~~have committed to provide statutory reserve support to third parties, in exchange for a fee, by funding loans if certain defined events occur. Such statutory reserves are required under the U.S. Valuation of Life Policies Model Regulation (commonly referred to as Regulation XXX for term life insurance policies and Regulation A-XXX for universal life secondary guarantees). ~~The third parties~~In addition, certain subsidiaries have ~~recourse to RGA should the subsidiary fail~~also committed to provide capital support to a third party, in exchange for a fee, by agreeing to assume real estate leases in the ~~required funding,~~

~~Table~~event of ~~Contents~~

~~however, as~~a severe and prolonged decline in the commercial lease market. Upon assumption of ~~September 30, 2017,~~a lease, the Company would recognize a right to use asset and lease obligation. As of March 31, 2022, the Company does not believe that it will be required to provide any funding under these commitments as the occurrence of the defined events is considered remote. The following table presents the maximum potential obligation for these commitments as of ~~September 30, 2017~~March 31, 2022 (dollars in millions):


Commitment Period:	Maximum Potential Obligation
2023	$	500.0
2033	450.0
Commitment Period			Commitment Period	Maximum Potential Obligation
2034	2,000.0		2034	$	1,243
2035	1,314.2		2035	2,678
2036	2,932.0		2036	3,599
2037	5,750.0		2037	6,850
2038			2038	2,300
2039			2039	7,350
2046			2046	3,000

Other Guarantees

RGA has issued guarantees to third parties on behalf of its subsidiaries for the payment of amounts due under certain securities borrowing and repurchase arrangements, financing arrangements and office lease obligations, whereby, if a subsidiary fails to meet an obligation, RGA or one of its other subsidiaries will make a payment to fulfill the obligation. Additionally, in limited circumstances, treaty guarantees are granted to ceding companies in order to provide them additional security, particularly in cases where RGA’s subsidiary is relatively new, unrated, or not of a significant size, relative to the ceding company. Liabilities supported by the treaty guarantees, before consideration ~~for~~of any legally offsetting amounts due from the guaranteed party are reflected on the Company’s condensed consolidated balance sheets in future policy benefits. Potential guaranteed amounts of future payments will vary depending on production levels and underwriting results. Guarantees related to securities borrowing and repurchase arrangements provide additional security to third parties should a subsidiary fail to provide securities when due. RGA’s guarantees issued as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021, are reflected in the following table (dollars in ~~thousands)~~millions):


	March 31, 2022		December 31, 2021
Treaty guarantees	$	2,152	$	2,208
Treaty guarantees, net of assets in trust	1,253		1,281
Securities borrowing and repurchase arrangements	177		134

9. Income Tax

September 30, 2017 December 31, 2016
Treaty guarantees $ 936,032
$ 902,216
Treaty guarantees, net of assets in trust 810,870
780,786
Securities borrowing and repurchase arrangements 295,285
263,820
Financing arrangements 100,602
119,073
Lease obligations 1,895
2,428


9.	~~Income Tax~~

~~Provision for~~For the three months ended March 31, 2022, the Company recorded income tax expense ~~differed from~~of $3 million on a pre-tax loss of $60 million, or an effective tax rate of 3.7%. Tax expense was recorded on the ~~amounts computed by applying~~pre-tax loss was the result of income in jurisdictions with tax rates higher than the U.S. ~~federal~~, basis adjustments in foreign jurisdictions and adjustments to the valuation allowance. For the three months ended March 31, 2021, the Company recorded income tax ~~statutory~~expense of $47 million on pre-tax income of $186 million, or an effective tax rate of ~~35.0% to pre-tax income as a result of the following for the three and nine months ended September 30, 2017 and 2016 (dollars in thousands):~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Tax provision at U.S. statutory rate $ 119,057
$ 100,660
$ 310,562
$ 261,941
Increase (decrease) in income taxes resulting from:
Foreign tax rate differing from U.S. tax rate (3,635 ) (2,335 ) (14,049 ) (14,617 )
Differences in tax bases in foreign jurisdictions 2,126
(7,078 ) (14,633 ) (21,567 )
Deferred tax valuation allowance (2,501 ) 4,411
11,627
13,698
Amounts related to tax audit contingencies 299
(3,979 ) (873 ) (175 )
Corporate rate changes (1,139 ) —
(2,332 ) —
Subpart F 64
1,779
1,390
3,212
Foreign tax credits 1,230
(1,934 ) (834 ) (2,655 )
Equity compensation excess benefit (2,762 ) —
(7,226 ) —
Return to provision adjustments 452
(1,996 ) 133
(2,227 )
Other, net (620 ) (647 ) (1,737 ) (501 )
Total provision for income taxes $ 112,571
$ 88,881
$ 282,028
$ 237,109
Effective tax rate 33.1 % 30.9 % 31.8 % 31.7 %

~~Table of Contents~~

25.3%. The effective tax rate ~~for the third quarter of 2017~~ was ~~lower~~higher than the U.S. ~~Statutory~~statutory income tax rate of ~~35.0%~~21% primarily as a result of income ~~generated~~earned in ~~non-U.S.~~ jurisdictions with ~~lower~~ tax rates higher than the U.S. ~~The first nine months~~, global intangible low-taxed income (“GILTI”) and Subpart F income.

Table of 2017 also includes a reduction related to differences in tax bases in foreign jurisdictions and a tax benefit from the filing of amended returns, which was partially offset with a valuation allowance established related to amended return filings. The third quarter of 2016 effective tax rate was lower than the U.S. Statutory rate of 35.0% primarily as a result of effectively settling an uncertain tax position during the quarter and adjustments related to the filing of the US Federal Income tax return. The first nine months of 2016 effective tax rate was lower than the U.S. Statutory rate of 35.0% primarily as a result of tax benefits from income in non-U.S. jurisdictions with lower tax rates than the U.S.Contents

10. Employee Benefit Plans

The components of net periodic benefit ~~costs,~~cost, included in other operating expenses on the Company’s condensed consolidated statements of income, for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 were as follows (dollars in ~~thousands)~~millions):


	Pension Benefits				Other Benefits
	Three months ended March 31,				Three months ended March 31,
	2022		2021		2022		2021
Service cost	$	4	$	4	$	1	$	1
Interest cost	1		1		—		—
Expected return on plan assets	(3)		(2)		—		—
Amortization of prior service cost (credit)	—		—		—		—
Amortization of prior actuarial losses	1		1		—		—

Net periodic benefit cost	$	3	$	4	$	1	$	1

11. Reinsurance

Pension Benefits Other Benefits
Three months ended September 30, Three months ended September 30,
2017 2016 2017 2016
Service cost $ 2,699
$ 2,479
$ 465
$ 131
Interest cost 1,314
1,168
459
408
Expected return on plan assets (1,554 ) (1,285 ) —
—
Amortization of prior service cost 85
76
(675 ) (467 )
Amortization of prior actuarial loss 1,081
1,040
580
137
Settlements 256
—
—
—
Net periodic benefit cost $ 3,881
$ 3,478
$ 829
$ 209

Pension Benefits Other Benefits
Nine months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Service cost $ 8,098
$ 7,437
$ 1,907
$ 2,162
Interest cost 3,943
3,503
1,589
1,694
Expected return on plan assets (4,662 ) (3,854 ) —
—
Amortization of prior service cost 254
229
(986 ) (467 )
Amortization of prior actuarial loss 3,244
3,121
1,494
1,370
Settlements 769
—
—
—
Net periodic benefit cost $ 11,646
$ 10,436
$ 4,004
$ 4,759

~~The Company has made $5.0 million in pension contributions during the first nine months of 2017 and expects to make total pension contributions between $5.0 million and $10.0 million in 2017.~~


~~11.~~	~~Reinsurance~~

Retrocession reinsurance treaties do not relieve the Company from its obligations to direct writing companies. Failure of retrocessionaires to honor their obligations could result in losses to the Company. Consequently, allowances would be established for amounts deemed uncollectible. At ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, no allowances were deemed necessary. The Company regularly evaluates the financial condition of the insurance companies from which it assumes and to which it cedes reinsurance.

Retrocessions are arranged through the Company’s retrocession pools for amounts in excess of the Company’s retention limit. As of ~~September 30, 2017 and December~~March 31, ~~2016,~~2022, all rated retrocession pool participants followed by the A.M. Best Company were rated “A- (excellent)” or better. The Company verifies retrocession pool participants’ ratings on a quarterly basis. For a majority of the retrocessionaires that were not rated, security in the form of letters of credit or trust assets has been posted. In addition, the Company performs annual financial reviews of its retrocessionaires to evaluate financial stability and performance. ~~In addition to its third party retrocessionaires, various RGA reinsurance subsidiaries retrocede amounts in excess of their retention to affiliated subsidiaries.~~

~~Table of Contents~~

The following table presents information for the Company’s reinsurance ceded receivable assets, including the respective amount and A.M. Best rating for each reinsurer representing in excess of five percent of the total as of ~~September 30, 2017 and~~March 31, 2022 or December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):


		September 30, 2017				December 31, 2016						March 31, 2022				December 31, 2021
Reinsurer	A.M. Best Rating	Amount		% of Total		Amount		% of Total		Reinsurer	A.M. Best Rating	Amount		% of Total		Amount		% of Total
Reinsurer A	A+	$	291,115	37.4		$	240,894	35.2	%	Reinsurer A	A-	$	1,617	62.3	%	$	1,626	63.0	%
Reinsurer B	A+	203,584		26.1		183,881		26.9		Reinsurer B	A+	441		17.0		423		16.4
Reinsurer C	A+	65,528		8.4		68,832		10.1		Reinsurer C	A+	216		8.3		212		8.2
Reinsurer D	A++	40,860		5.2		36,202		5.3		Reinsurer D	A	59		2.3		59		2.3
Reinsurer E	A+	40,387		5.2		35,484		5.2		Reinsurer E	A+	44		1.7		44		1.7
Reinsurer F										Reinsurer F	A++	42		1.6		42		1.6
Other reinsurers		137,644		17.7		118,679		17.3		Other reinsurers		176		6.8		174		6.8
Total		$	779,118	100.0	%	$	683,972	100.0	%	Total		$	2,595	100.0	%	$	2,580	100.0	%

Included in the total reinsurance ceded receivables balance were ~~$268.1~~$196 million and ~~$242.0~~$203 million of claims recoverable, of which ~~$0.9~~$9 million and ~~$4.0~~$10 million were in excess of 90 days past due, as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, respectively. Also included in the total reinsurance ceded receivable and other is a deposit asset on reinsurance of $1,617 million and $1,626 million as of March 31, 2022 and December 31, 2021, respectively.

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~~12.~~	~~New Accounting Standards~~

12. Policy Claims and Benefits

Rollforward of Claims and Claim Adjustment Expenses

The liability for unpaid claims is reported in future policy benefits and other policy claims and benefits on the Company’s condensed consolidated balance sheets. Activity associated with unpaid claims is summarized below (dollars in millions):


	Three months ended March 31,
	2022		2021
Balance at beginning of year	$	8,053	$	7,556
Less: reinsurance recoverable	(556)		(641)
Net balance at beginning of year	7,497		6,915
Incurred:
Current year	3,438		4,097
Prior years	(82)		(59)
Total incurred	3,356		4,038
Payments:
Current year	(161)		(164)
Prior years	(3,051)		(3,196)
Total payments	(3,212)		(3,360)
Other changes:
Interest accretion	8		10
Foreign exchange adjustments	17		(51)
Total other changes	25		(41)

Net balance at end of period	7,666		7,552
Plus: reinsurance recoverable	567		732
Balance at end of period	$	8,233	$	8,284

Incurred claims associated with prior periods are primarily due to events, related to long-duration business, which were incurred in prior periods but were reported in the current period, and to a lesser extent, the development of short-duration business claims for prior years being different than were anticipated when the liabilities for unpaid claims were originally estimated. These trends have been considered in establishing the current year liability for unpaid claims.

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13. New Accounting Standards

Changes to the general accounting principles are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates to the FASB Accounting Standards Codification™. Accounting standards updates not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s condensed consolidated financial statements.

~~Adoption of New Accounting Standards~~

~~Stock Compensation~~

In March 2016, the FASB updated the general accounting principal for Stock Compensation which changed how companies account for certain aspects of share-based payment awards to employees. The updated guidance requires excess tax benefits and deficiencies from share-based payment awards be recorded in income tax expense in the income statement. Previously, excess tax benefits and deficiencies were recognized in shareholders’ equity or deferred taxes on the balance sheet depending on the tax situation of the Company. In addition, the updated guidance also changes the accounting for forfeitures and statutory tax withholding requirements, as well as the classification in the statement of cash flows. The new standard generally requires a modified retrospective transition through a cumulative-effect adjustment as of the beginning of the period of adoption, with certain provisions requiring either a prospective or retrospective transition. The Company adopted the new guidance on January 1, 2017. Upon adoption, the Company recognized excess tax benefits of approximately $17.7 million in deferred tax assets that were previously not recognized in a cumulative-effect adjustment increasing retained earnings by $17.7 million. The Company also recorded excess tax benefits of approximately $2.8 million and $7.2 million in the provision for income taxes for the three and nine months ended September 30, 2017, respectively. The number of weighted average diluted shares outstanding were also adjusted to exclude excess tax benefits from the assumed proceeds in the diluted shares calculation resulting in an immaterial increase in the number of dilutive shares outstanding. The Company also elected to continue estimating forfeitures for purposes of recognizing share-based compensation. Other aspects of the adoption of the updated guidance did not have a material impact to the Company’s financial statements.

~~Future Adoption of New Accounting Standards~~

~~Financial Instruments~~

In January 2016, the FASB amended the general accounting principle for Financial Instruments, effective for the Company January 1, 2018. The amendment revises the accounting related to (1) the classification and measurement of investments in equity securities, (2) the presentation of certain fair value changes for financial liabilities measured at fair value, (3) certain disclosure requirements associated with the fair value of financial instruments. The new guidance should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values (including disclosure requirements) should be applied prospectively to equity investments that exist as of the date of adoption. The adoption of this amendment is not expected to have a material impact on the Company’s financial statements; however, it could result in net income volatility depending on the composition of the Company’s investment portfolio and changes in the fair value of equity securities.

In June 2016, the FASB amended the existing impairment guidance of Financial Instruments. The amendment adds to U.S. GAAP an impairment model, known as current expected credit loss (“CECL”) model that is based on expected losses rather than incurred


Description	Anticipated Date of Adoption	Effect on the Consolidated Financial Statements
Standards not yet adopted:
Financial Services – Insurance This guidance significantly changes how insurers account for long-duration insurance contracts. The new guidance also significantly expands the disclosure requirements of long-duration insurance contracts. Below are the most significant areas of change:	January 1, 2023	See each significant area of change below for the method of adoption and expected impact to the Company’s results of operations and financial position.
Cash flow assumptions for measuring liability for future policy benefits The new guidance requires insurers to review, and if necessary, update the cash flow assumptions used to measure liabilities for future policy benefits periodically. The change in the liability estimate as a result of updating cash flow assumptions will be recognized in net income.		Cash flow assumptions for measuring liability for future policy benefits The Company will likely adopt this guidance on a modified retrospective basis as of the earliest period presented in the year of adoption. Upon adoption, there will be an adjustment to retained earnings as a result of capping the net premium ratio at 100% and eliminating negative reserves on certain issue year cohorts. The Company is currently evaluating this impact but anticipates it will likely result in a material decrease to retained earnings. The Company is currently evaluating the impact of the cash flow assumptions amendments on its results of operations and financial position but anticipates they will likely be material.
Discount rate assumption for measuring liability for future policy benefits The new guidance requires insurers to update the discount rate assumption used to measure liabilities for future policy benefits at each reporting period, and the discount rate utilized must be based on an upper-medium grade fixed income instrument yield. The change in the liability estimate as a result of updating the discount rate assumption will be recognized in other comprehensive income (loss).		Discount rate assumption for measuring liability for future policy benefits The Company will likely adopt this guidance on a modified retrospective basis as of the earliest period presented in the year of adoption. Upon adoption, there will be an adjustment to accumulated other comprehensive income (loss) as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment will largely reflect the difference between discount rates locked-in at contract inception versus current discount rates at transition. The Company is currently evaluating the impact of this adjustment but anticipates it will likely be material.
Market risk benefits The new guidance created a new category of benefit features called market risk benefits that will be measured at fair value with changes in fair value attributable to a change in the instrument-specific credit risk recognized in other comprehensive income (loss).		Market risk benefits The Company is required to adopt this guidance on a retrospective basis as of the earliest period presented in the year of adoption. Upon adoption, the Company expects an impact to (1) accumulated other comprehensive income (loss) for the cumulative effect of changes in the instrument-specific credit risk between contract issue date and transition date and (2) retained earnings for the difference between fair value and carrying value at the transition date, excluding the changes in the instrument-specific credit risk. The Company is currently evaluating the impact of these adjustments but anticipates they will likely be material.
Amortization of deferred acquisition costs (“DAC”) and other balances The new guidance requires DAC and other balances to be amortized on a constant level basis over the expected term of the related contracts.		Amortization of deferred acquisition costs (“DAC”) and other balances The Company will likely adopt this guidance on a modified retrospective basis as of the earliest period presented in the year of adoption. Upon adoption, the Company expects an adjustment to accumulated other comprehensive income (loss) for the removal of cumulative adjustments to DAC associated with unrealized gains and losses previously recorded in accumulated other comprehensive income (loss). The Company is currently evaluating the impact of this adjustment but anticipates it will likely result in a material increase to accumulated other comprehensive income (loss). The Company is currently evaluating the impact of the other amortization of DAC and other balances amendments on its results of operations and financial position but anticipates they will likely not be material.

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losses. For traditional and other receivables, held-to-maturity debt securities, loans and other instruments entities will be required to use the new forward-looking “expected loss” model that generally will result in earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses similar to what they do today, except the losses will be recognized as allowances rather than reduction to the amortized cost of the securities. This guidance is effective for the Company January 1, 2020, with early adoption permitted. The guidance will be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is currently evaluating the impact of this amendment on its condensed consolidated financial statements.

~~Leases~~

In February 2016, the FASB issued guidance which will replace most existing lease accounting guidance. The new standard, based on the principle that entities should recognize assets and liabilities arising from leases, does not significantly change the lessees’ recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Leases are classified as finance or operating. The new standard’s primary change is the requirement for entities to recognize a lease liability for payments and a right of use asset representing the right to use the leased asset during the term of operating lease arrangements. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting is largely unchanged from the previous accounting standard. In addition, the new standard expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. This guidance is effective for the Company January 1, 2019, with early adoption permitted. The Company is currently evaluating the impact of this amendment on its condensed consolidated financial statements.

~~Income Taxes~~

In October 2016, the FASB amended the general accounting principal for Income Taxes, effective for the Company January 1, 2018. The amendment requires entities to recognize the tax consequences of intercompany asset transfers, except for inventory, at the transaction date. Current GAAP prohibits entities from recognizing the income tax consequences from intercompany asset transfers. The seller defers any net tax effect, and the buyer is prohibited from recognizing a deferred tax asset on the difference between the newly created tax basis of the asset in its tax jurisdiction and its financial statement carrying amount as reported in the condensed consolidated financial statements. The amendment requires entities to recognize these tax consequences in the period in which the transfer occurred. There will be an immediate effect on earnings if the tax rates in the seller’s and buyer’s tax jurisdictions are different. This amendment will be applied using a modified retrospective transition method with a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The adoption of this amendment will not have a material impact on the Company’s condensed consolidated financial statements.

~~Derivative and Hedging~~

In August 2017, the FASB updated the general accounting principal for Derivatives and Hedging. The updated guidance improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting in current GAAP related to the assessment of hedge effectiveness. The updated guidance is effective for the Company January 1, 2019, with early adoption permitted. The Company is currently evaluating the impact of this amending on its condensed consolidated financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, among others, statements relating to projections of the future operations, strategies, earnings, revenues, income or loss, ratios, ~~future~~ financial performance and growth potential of the Company. ~~The~~Forward-looking statements often contain words and phrases such as “intend,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “should,” ~~“believe,”~~“believe” and other similar ~~expressions also are intended to identify forward-looking statements.~~expressions. Forward-looking statements are ~~inherently~~based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements are not a guarantee of future performance and are subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance, and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

~~Numerous important factors~~The effects of the COVID-19 pandemic and the response thereto on economic conditions, the financial markets and insurance risks, and the resulting effects on the Company’s financial results, liquidity, capital resources, financial metrics, investment portfolio and stock price, could cause actual results and events to differ materially from those expressed or implied by forward-looking statements. Additionally, numerous other important factors (whether related to, resulting from or exacerbated by the COVID-19 pandemic or otherwise) could also cause results and events to differ materially from those expressed or implied by forward-looking statements, including, without ~~limitation,~~limitation: (1) adverse changes in mortality, morbidity, lapsation or claims experience, (2) inadequate risk analysis and underwriting, (3) adverse capital and credit market conditions and their impact on the Company’s liquidity, access to capital and cost of capital, (2) the impairment of other financial institutions and its effect on the Company’s business, (3) requirements to post collateral or make payments due to declines in market value of assets subject to the Company’s collateral arrangements, (4) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (5) adverse changes in mortality, morbidity, lapsation or claims experience, (6) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (5) the availability and cost of collateral necessary for regulatory reserves and capital, (6) requirements to post collateral or make payments due to declines in market value of assets subject to the Company’s collateral arrangements, (7) ~~inadequate risk analysis~~action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (8) the effect of the Company parent’s status as an insurance holding company and ~~underwriting, (8)~~regulatory restrictions on its ability to pay principal of and interest on its debt obligations, (9) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, ~~(9)~~(10) the ~~availability~~impairment of other financial institutions and ~~cost of collateral necessary for regulatory reserves~~its effect on the Company’s business, (11) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and ~~capital, (10)~~real estate markets, (12) market or economic conditions that adversely affect the value of the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities, that in turn could affect regulatory capital, ~~(11)~~(13) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, ~~(12)~~(14) risks inherent in the Company’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, ~~(13) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (14) adverse litigation or arbitration results,~~ (15) the ~~adequacy~~fact that the determination of ~~reserves, resources~~allowances and ~~accurate information relating to settlements, awards and terminated and discontinued lines of business,~~impairments taken on the Company’s investments is highly subjective, (16) the stability of and actions by governments and economies in the markets in which the Company operates, including ongoing uncertainties regarding the amount of U.S. sovereign debt and the credit ratings thereof, (17) competitive factors and competitors’ responses to the Company’s initiatives, (18) the success of the Company’s clients, (19) successful execution of the Company’s entry into new markets, (20) successful development and introduction of new products and distribution opportunities, (21) the Company’s ability to successfully integrate acquired blocks of business and entities, (22) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (23) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes some reinsurance, third-party investment managers and others, ~~(24)~~(18) financial performance of the Company’s clients, (19) the threat of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics anywhere in the world where the Company or its clients do business, ~~(25)~~(20) competitive factors and competitors’ responses to the Company’s initiatives, (21) development and introduction of new products and distribution opportunities, (22) execution of the Company’s entry into new markets, (23) integration of acquired blocks of business and entities, (24) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data stored on such systems, (25) adverse litigation or arbitration results, (26) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (27) changes in laws, regulations, and accounting standards applicable to the Company ~~its subsidiaries,~~ or its business, ~~(27) the effect of the Company’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations,~~including Long Duration Targeted Improvement accounting changes, and (28) other risks and uncertainties described in this document and in the Company’s other filings with the ~~SEC.~~Securities and Exchange Commission (“SEC”).

Forward-looking statements should be evaluated together with the many risks and uncertainties that affect the Company’s business, including those mentioned in this document and described in the periodic reports the Company files with the SEC. These forward-looking statements speak only as of the date on which they are made. The Company does not undertake any ~~obligations~~obligation to update these forward-looking statements, even though the Company’s situation may change in the future. For a discussion of these risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to see Item 1A – “Risk Factors” in the ~~2016~~2021 Annual ~~Report.~~Report, as may be supplemented by Item 1A – “Risk Factors” in the Company’s subsequent Quarterly Reports on Form 10-Q.

Overview

The Company is ~~one of~~among the leading global providers of life ~~reinsurers in North America based on premiums~~reinsurance and ~~the amount~~financial solutions, with $3.5 trillion of life reinsurance in force ~~providing traditional reinsurance~~ and ~~financial solutions to its clients.~~assets of $89.8 billion as of March 31, 2022. Traditional reinsurance includes individual and group life

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and health, disability, and critical illness reinsurance. Financial solutions includes longevity reinsurance, asset-intensive reinsurance, capital solutions, including financial reinsurance and ~~financial reinsurance.~~stable value products. The Company derives revenues primarily from renewal premiums from existing reinsurance treaties, new business premiums from existing or new reinsurance treaties, fee income from financial solutions business and income earned on invested assets.

Historically, the Company’s primary business has been traditional life reinsurance, which involves reinsuring life insurance policies that are often in force for the remaining lifetime of the underlying individuals insured, with premiums earned typically over a

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period of 10 to 30 years. To a lesser extent, the Company also reinsures health business typically reinsured for one to three years. Each year, however, a portion of the business under existing treaties terminates due to, among other things, lapses or voluntary surrenders of underlying policies, deaths of insureds, and the exercise of recapture options by ceding companies. The Company has expanded its financial solutions business, including significant asset-intensive and longevity risk transactions, which allow its clients to take advantage of growth opportunities and manage their capital, longevity and investment risk.

~~The~~For its traditional life business, the Company’s ~~long-term~~ profitability largely depends on the volume and amount of death- and health-related claims incurred and the ability to adequately price the risks it assumes. While death claims are reasonably predictable over a period of many years, claims become less predictable over shorter periods and are subject to significant fluctuation from quarter to quarter and year to year. For longevity business, the Company’s profitability depends on the lifespan of the underlying contract holders and the investment performance for certain contracts. Additionally, the Company generates profits on investment spreads associated with the reinsurance of investment type contracts and generates fees from financial reinsurance transactions, which are typically shorter duration than its traditional life reinsurance business. The Company believes its sources of liquidity are sufficient to cover potential claims payments on both a short-term and long-term basis.

As is customary in the reinsurance business, clients continually update, refine, and revise reinsurance information provided to the Company. Such revised information is used by the Company in preparation of its condensed consolidated financial statements and the financial effects resulting from the incorporation of revised data are reflected in the current period.

Segment Presentation

The Company has geographic-based and business-based operational segments. Geographic-based operations are further segmented into traditional and financial solutions businesses. The Company allocates capital to its segments based on an internally developed economic capital model, the purpose of which is to measure the risk in the business and to provide a consistent basis upon which capital is deployed. The economic capital model considers the unique and specific nature of the risks inherent in RGA’s businesses.

As a result of the economic capital allocation process, a portion of investment income is credited to the segments based on the level of allocated capital. In addition, the segments are charged for excess capital utilized above the allocated economic capital basis. This charge is included in policy acquisition costs and other insurance expenses. Segment investment performance varies with the composition of investments and the relative allocation of capital to the operating segments.

Segment ~~premium~~revenue levels can be significantly influenced by currency fluctuations, large transactions, mix of business and reporting practices of ceding companies, and therefore may fluctuate from period to period. Although reasonably predictable over a period of years, segment claims experience can be volatile over shorter periods. See “Results of Operations by Segment” below for further information about the Company’s segments.

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Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires the application of accounting policies that often involve a significant degree of judgment. Management, on an ongoing basis, reviews estimates and assumptions used in the preparation of financial statements. If management determines that modifications in assumptions and estimates are appropriate given current facts and circumstances, results of operations and financial position as reported in the condensed consolidated financial statements could change significantly.

Management believes the critical accounting policies relating to the following areas are most dependent on the application of estimates and assumptions:

Premiums receivable;

Deferred acquisition costs;

Liabilities for future policy benefits and incurred but not reported claims;

Valuation of investments, allowance for credit losses and impairments to specific investments;

Valuation of embedded derivatives; and

Income taxes.

A discussion of each of the critical accounting policies may be found in the Company’s 2021 Annual Report under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies.”

~~Consolidated~~Critical Accounting Policies

Management believes the critical accounting policies relating to the following areas are most dependent on the application of estimates and assumptions:

Premiums receivable;

Deferred acquisition costs;

Liabilities for future policy benefits and incurred but not reported claims;

Valuation of investments, allowance for credit losses and impairments to specific investments;

Valuation of embedded derivatives; and

Income taxes.

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues: (Dollars in thousands, except per share data)
Net premiums $ 2,489,797
$ 2,251,758
$ 7,335,944
$ 6,755,708
Investment income, net of related expenses 556,918
489,727
1,589,820
1,414,659
Investment related gains (losses), net 22,653
86,624
139,471
84,002
Other revenues 75,942
72,468
218,091
197,844
Total revenues 3,145,310
2,900,577
9,283,326
8,452,213
Benefits and Expenses:
Claims and other policy benefits 2,100,680
1,993,064
6,371,188
5,877,330
Interest credited 126,099
116,848
349,068
300,602
Policy acquisition costs and other insurance expenses 365,424
300,962
1,064,645
940,406
Other operating expenses 168,417
152,556
481,279
469,875
Interest expense 36,836
43,063
108,590
96,201
Collateral finance and securitization expense 7,692
6,484
21,235
19,396
Total benefits and expenses 2,805,148
2,612,977
8,396,005
7,703,810
Income before income taxes
340,162
287,600
887,321
748,403
Provision for income taxes 112,571
88,881
282,028
237,109
Net income $ 227,591
$ 198,719
$ 605,293
$ 511,294
Earnings per share:
Basic earnings per share $ 3.53
$ 3.10
$ 9.39
$ 7.95
Diluted earnings per share $ 3.47
$ 3.07
$ 9.23
$ 7.87
Dividends declared per share $ 0.50
$ 0.41
$ 1.32
$ 1.15

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Consolidated income before income taxes increased $52.6 million, or 18.3%, and $138.9 million, or 18.6%, for the three and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016. The increase in income for third quarter of 2017 was primarily due to improved mortality experience in the U.S. operations, increased investment income, new business growth in the Europe, Middle East and Africa (“EMEA”) and Asia Pacific operations and lower interest expense. The increase in income for the first nine months of 2017 was primarily due to improved mortality experience in the U.S., EMEA and Asia Pacific operations and increased investment income, partially offset by higher interest expense. The increases in investment income are discussed below and the changes in interest expense for the third quarter and first nine months are discussed within the Corporate and Other section. Foreign currency fluctuations resulted in an increase (decrease) in income before income taxes by $2.0 million and $(7.4) million for the third quarter and first nine months of 2017, as compared to the same periods in 2016.

The Company recognizes in consolidated income, any changes in the fair value of embedded derivatives on modco or funds withheld treaties, equity-indexed annuity treaties (“EIAs”) and variable annuity products. The combined changes in these three types of embedded derivatives, after adjustment for deferred acquisition costs and retrocession, resulted in a decrease in consolidated income before income taxes of $8.9 million in the third quarter of 2017 and an increase of $218.2 million in the first nine months of 2017, respectively, as compared to the same periods in 2016. This fluctuation does not affect current cash flows, crediting rates or spread performance on the underlying treaties. Therefore, management believes it is helpful to distinguish between the effects of changes in these embedded derivatives, net of related hedging activity and deferred acquisition costs, and the primary factors that drive profitability of the underlying treaties, namely investment income, fee income, and interest credited. The individual effect on income before income taxes for these three types of embedded derivatives is as follows:

The change in the value of embedded derivatives related to reinsurance treaties written on a modco or funds withheld basis are subject to the general accounting principles for derivatives and hedging related to embedded derivatives. The unrealized gains and losses associated with these embedded derivatives, after adjustment for deferred acquisition costs, resulted in a decrease in income before income taxes of $3.3 million in the third quarter of 2017 and an increase of $53.3 million in the first nine months of 2017, as compared to the same periods in 2016.

Changes in risk-free rates used in the fair value estimates of embedded derivatives associated with EIAs affect the amount of unrealized gains and losses the Company recognizes. The unrealized gains and losses associated with EIAs, after adjustment for deferred acquisition costs and retrocession, increased income before income taxes by $0.1 million and $20.0 million in the third quarter and first nine months of 2017, respectively, as compared to the same periods in 2016.

The change in the Company’s liability for variable annuities associated with guaranteed minimum living benefits affects the amount of unrealized gains and losses the Company recognizes. The unrealized gains and losses associated with guaranteed minimum living benefits, after adjustment for deferred acquisition costs, resulted in a decrease in income before income taxes of $5.7 million in the third quarter of 2017 and an increase of $144.9 million in the first nine months of 2017, as compared to the same periods in 2016. After consideration of the change in fair value of freestanding derivatives used to hedge this liability, income before income taxes decreased by $2.2 million in the third quarter of 2017 and increased by $6.9 million in the first nine months of 2017, as compared to the same periods in 2016.

Consolidated net premiums increased $238.0 million, or 10.6%, and $580.2 million, or 8.6%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016, primarily due to growth in life reinsurance in force. Foreign currency fluctuations resulted in an increase (decrease) in net premiums of $18.3 million and $(17.3) million for the third quarter and first nine months of 2017, as compared to the same periods in 2016. Consolidated assumed life insurance in force increased to $3,297.9 billion as of September 30, 2017 from $3,082.8 billion as of September 30, 2016 due to new business production and in force transactions. The Company added new business production, measured by face amount of insurance in force, of $90.7 billion and $81.3 billion during the third quarter of 2017 and 2016, respectively, and $304.8 billion and $296.4 billion during the first nine months of 2017 and 2016, respectively. Foreign currency fluctuations contributed $43.6 billion to the increase in assumed life insurance in force from September 30, 2016. Management believes industry consolidation, regulatory changes and the established practice of reinsuring mortality and morbidity risks should continue to provide opportunities for growth, albeit at rates less than historically experienced in some markets.

Consolidated investment income, net of related expenses, increased $67.2 million, or 13.7%, and $175.2 million, or 12.4%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. Market value changes related to the Company’s funds withheld at interest investment associated with the reinsurance of certain EIAs increased (decreased) investment income by $(1.3) million and $73.3 million in the third quarter and first nine months of 2017, respectively, as compared to the same periods in 2016. The effect on investment income of the EIA's market value changes is substantially offset by a corresponding change in interest credited to policyholder account balances resulting in an insignificant effect on net income.

Also contributing to the increase in investment income is a larger average invested asset base, excluding spread related business, partially offset by a decrease in the average investment yield. Average invested assets at amortized cost, excluding spread related business, for the nine months ended September 30, 2017 totaled $25.1 billion, a 9.4% increase over September 30, 2016. The

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average yield earned on investments, excluding spread related business, was 4.81% and 4.43% for the third quarter of 2017 and 2016, respectively, and 4.61% and 4.53% for the first nine months ended September 30, 2017 and 2016, respectively. The average yield will vary from quarter to quarter and year to year depending on a number of variables, including the prevailing interest rate and credit spread environment, prepayment fees and make-whole premiums, changes in the mix of the underlying investments and cash balances, and the timing of dividends and distributions on certain investments. The third quarter of 2017, in particular, benefited from a higher level of bond make-whole premiums and distributions from joint ventures and limited partnerships. A continued low interest rate environment is expected to put downward pressure on this yield in future reporting periods.

Total investment related gains (losses), net changed favorably (unfavorably) by $(64.0) million and $55.5 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. A significant portion of theses variances in the third quarter and first nine months are due to changes in the value of embedded derivatives related to reinsurance treaties written on a modco or funds withheld basis, reflecting the impact of changes in interest rates and credit spreads on the calculation of fair value. During the third quarter and first nine months of 2017, the favorable (unfavorable) changes in the value of these embedded derivatives was $(26.0) million and $73.1 million respectively, as compared to the same periods in 2016. Impairments on fixed maturity securities decreased by $13.7 million in the first nine months of 2017, as compared to the same period in 2016. See Note 4 - “Investments” and Note 5 - “Derivative Instruments” in the Notes to Condensed Consolidated Financial Statements for additional information on the impairment losses and derivatives.

The effective tax rate on a consolidated basis was 33.1% and 30.9% for the third quarter 2017 and 2016, respectively, and 31.8% and 31.7% for the first nine months of 2017 and 2016, respectively. The effective tax rate for the third quarter of 2017 was lower than the U.S. Statutory rate of 35% primarily as a result of income generated in non-U.S. jurisdictions with lower tax rates than the U.S. The first nine months of 2017 also includes a reduction related to differences in tax bases in foreign jurisdictions and a tax benefit from the filing of amended returns, which was partially offset with a valuation allowance established related to amended return filings. The effective tax rate for the third quarter of 2016 was lower than the U.S. Statutory rate of 35.0% primarily as a result of effectively settling an uncertain tax position during the quarter and adjustments related to the filing of the US Federal Income tax return. The first nine months of 2016 effective tax rate was lower than the U.S. Statutory rate of 35.0% primarily as a result of tax benefits from income in non-U.S. jurisdictions with lower tax rates than the U.S.

Critical Accounting Policies

Management believes the critical accounting policies relating to the following areas are most dependent on the application of estimates and assumptions:

Premiums receivable;

Deferred acquisition costs;

Liabilities for future policy benefits and incurred but not reported claims;

Valuation of investments, allowance for credit losses and ~~other-than-temporary~~ impairments to specific investments;

Valuation of embedded derivatives; and

Income taxes.

A discussion of each of the critical accounting policies may be found in the Company’s ~~2016~~2021 Annual Report under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies.”

Consolidated Results of Operations

Impacts of the COVID-19 Pandemic

Although global COVID-19 related deaths have begun to decline, the Company continues to experience increased claim costs as a result of the COVID-19 global pandemic. However, the Company cannot reliably predict the future impact the ongoing pandemic will have on its business, results of operations and financial condition as the impact will depend on, among other factors, the severity of new variants of the virus, vaccination effectiveness, country-specific circumstances, and COVID-19’s indirect impact on mortality and morbidity.

The ultimate amount and timing of claims the Company will experience as a result of the COVID-19 pandemic will depend on many variables and uncertainties. These variables and uncertainties include those discussed above, in addition to age, gender, comorbidities, other insured versus general population characteristics, geography-specific institutional and individual mitigating actions, medical capacity, and other factors. To date, general population COVID-19 deaths have been heavily concentrated in individuals aged 70 and older and with pre-existing comorbidities; however, many populations have seen an increase in younger age deaths, particularly in areas where healthcare facilities were unable to provide adequate care. The Company’s insured population has lower exposure to older ages than the general population and covers a generally healthier population due to underwriting and socioeconomic factors of those purchasing insurance. In addition, the Company’s longevity business may act as a modest offset to excess life insurance claims at older ages.

The Company’s COVID-19 projection and financial impact models continue to be updated and refined based on latest external data and the Company’s claim experience to date and are subject to the many variables and uncertainties noted above. The U.S. continues to be the key driver of mortality claim costs followed by Canada and the UK. For the three months ended March 31, 2022, the Company estimates it has incurred approximately $315 million of COVID-19 related life and health claim costs, including amounts incurred but not reported, with approximately $272 million of that amount being associated with the U.S. and Latin America Traditional segment. The Company has maintained the range of COVID-19 mortality claim cost estimates relative to the level of general population deaths for the U.S., UK and Canada although short-term experience may be at the higher end of those ranges, reflecting mortality that is still driven in part by new variants of the virus. The Company estimates that every additional 10,000 population deaths in the U.S., UK or Canada as a result of COVID-19 would result in the following corresponding excess mortality claims of approximately

•$10 million to $20 million in the U.S.;

•$4 million to $8 million in the UK; and

•$10 million to $20 million in Canada.

RGA’s operating subsidiaries continue to be well capitalized, and the Company continues to monitor its solvency position under multiple capital regimes on a regular basis while considering both its developing experience and economic conditions. In addition, the Company utilizes its internal capital model to assess its ability to meet its long-term obligations under a range of stress scenarios on a consolidated basis. This internal capital model is also used as the capital basis for the Company’s consolidated Own Risk and Solvency Assessment.

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Results from Operations – 2022 compared to 2021

The following table summarizes net income for the periods presented.


For the three months ended March 31,
(Dollars in millions, except per share data)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	3,155	$	2,914	$	241
Net investment income	810		812		(2)




Investment related gains (losses), net	(126)		302		(428)
Other revenues	91		91		—
Total revenues	3,930		4,119		(189)
Benefits and Expenses:
Claims and other policy benefits	3,225		3,192		33
Interest credited	141		146		(5)
Policy acquisition costs and other insurance expenses	355		333		22
Other operating expenses	226		214		12
Interest expense	42		45		(3)
Collateral finance and securitization expense	1		3		(2)
Total benefits and expenses	3,990		3,933		57
Income (loss) before income taxes	(60)		186		(246)
Provision for income taxes	3		47		(44)
Net income (loss)	$	(63)	$	139	$	(202)
Earnings per share:
Basic earnings per share	$	(0.93)	$	2.04	$	(2.97)
Diluted earnings per share	$	(0.93)	$	2.03	$	(2.96)

The decrease in income for the three months ended March 31, 2022, was primarily the result of:

•As discussed in the “Impacts of the COVID-19 Pandemic” above, the Company estimates it has incurred approximately $315 million, pre-tax, of COVID-19 related life and health claim costs, including amounts incurred but not reported, with approximately $272 million, pre-tax, in the U.S. and Latin America segment.

•Changes in the fair value of embedded derivatives, associated with modco/funds withheld treaties, decreased investment related gains by $33 million for the three month period ended March 31 2022, compared to an increase of $50 million for the three month period ended March 31, 2021.

•$25 million, pre-tax, of net realized losses, included in investment related gains (losses), net associated with portfolio repositioning compared to $154 million of net realized gains recognized in the prior year.

Foreign currency fluctuations can result in variances in the financial statement line items. Foreign currency exchange fluctuation increased income before taxes for the three months ended March 31, 2022 by $6 million primarily due to a weakening of the Japanese Yen compared to the U.S. dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.

Premiums and business growth

The increase in premiums is primarily due to an increase in new business production, measured by the face amount of life reinsurance in force, of $119.4 billion and $77.9 billion during the three months ended March 31, 2022 and 2021, respectively. Consolidated assumed life reinsurance in force increased to $3,495.1 billion as of March 31, 2022, from $3,428.6 billion as of March 31, 2021, due to new business production offset by lapses and mortality claims.

Net investment income and investment related gains (losses), net

Net investment income is consistent with the comparable period in 2021 as an increase in the average invested asset base was offset by a decrease in yield:

•The average invested assets at amortized cost, excluding spread related business, totaled $35.3 billion and $33.4 billion in 2022 and 2021, respectively.

•The average yield earned on investments, excluding spread related business, was 5.29% and 5.67% for the three-month periods ended March 31, 2022 and 2021, respectively.

•Investment income, net for the three-months ended March 31, 2021, benefited from a one-time adjustment of approximately $92 million, pre-tax, to correct the accounting for unrealized gains on certain limited partnerships, for

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which the Company uses the equity method of accounting, from AOCI to net investment income. The unrealized gains should have been recognized directly in net investment income in the same prior periods they were reported as earnings by the investees.

The average yield will vary from period to period depending on several variables, including the prevailing risk-free interest rate and credit spread environment, prepayment fees and make-whole premiums, changes in the mix of the underlying investments and cash and cash equivalents balances. Variable investment income from joint ventures and limited partnerships will also vary from period to period and is highly dependent on the timing of dividends and distributions on certain investments. Investment income is allocated to the operating segments based upon average assets and related capital levels deemed appropriate to support segment operations.

The decrease in investment related gains (losses), net is primarily attributable to the following:

•During the three months ended March 31, 2022, the Company repositioned select investment portfolios generating net realized losses of $25 million compared to net realized gains of $154 million during the first three months of 2021.

•Changes in the fair value of embedded derivatives, associated with modco/funds withheld treaties, decreased investment related gains (losses), net by $33 million for the three month period ended March 31 2022, compared to an increase of $50 million for the three month period ended March 31, 2021.

•The Company uses various derivative instruments such as interest rate swaps, credit default swaps and foreign exchange forwards for risk management purposes that either do not qualify or have not been elected for hedge accounting treatment. Changes in the fair value of these instruments are included in investment related gains (losses), net. During the three months period ended March 31, 2022, the fair value of these instruments decreased by $90 million, compared to a decrease of $51 million during the first three months of 2021. See Note 5 – “Derivative Instruments” in the Notes to Condensed Consolidated Financial Statements for additional information.

•During the three months ended March 31, 2022, the Company incurred $12 million of impairments and change in allowance for credit losses on fixed maturity securities compared to $2 million during the first three months of 2021.

•Investment related gains (losses), net, for the first three months of 2021 included an adjustment to investments in limited partnerships considered to be investment companies, which should have been recognized in prior periods, of $70 million pre-tax to adjust the carrying value from cost less impairments to the fair value approach, using the net asset value (“NAV”) per share or its equivalent.

The effective tax rate on a consolidated basis was 3.7% tax rate expense on a pre-tax loss for the three months ended March 31, 2022, and 25.3% tax rate expense on pre-tax income for the three months ended March 31, 2021, respectively. See Note 9 – “Income Tax” in the Notes to Condensed Consolidated Financial Statements for additional information on the Company’s consolidated effective tax rate.

Impact of certain derivatives

The Company recognizes in consolidated income, any changes in the fair value of embedded derivatives on modco or funds withheld treaties, equity index annuities (“EIAs”) and variable annuities with guaranteed minimum benefit riders. The Company utilizes freestanding derivatives to minimize the income statement volatility due to changes in the fair value of embedded derivatives associated with guaranteed minimum benefit riders. The following table presents the effect of embedded derivatives and related freestanding derivatives on income before income taxes for the periods indicated (dollars in millions):


	Three months ended March 31,
	2022		2021		2022 vs. 2021
Modco/Funds withheld:
Unrealized gains (losses)	$	(33)	$	50	$	(83)
Deferred acquisition costs/retrocession	19		(17)		36
Net effect	(14)		33		(47)
EIAs:
Unrealized gains (losses)	17		29		(12)
Deferred acquisition costs/retrocession	(7)		(15)		8
Net effect	10		14		(4)
Guaranteed minimum benefit riders:
Unrealized gains (losses)	14		19		(5)
Related freestanding derivatives, net of deferred acquisition costs costs/retrocession	(29)		(54)		25
Net effect	(15)		(35)		20
Total net effect after freestanding derivatives	$	(19)	$	12	$	(31)

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Results of Operations by Segment

U.S. and Latin America Operations

The U.S. and Latin America operations include business generated by its offices in the U.S., Mexico and Brazil. The offices in Mexico and Brazil provide services to clients in other Latin American countries. U.S. and Latin America operations consist of two major segments: Traditional and Financial Solutions. The Traditional segment primarily specializes in the reinsurance of individual mortality-risk, ~~reinsurance~~health and long-term care and to a lesser extent, group ~~health and long-term care~~ reinsurance. The Financial Solutions segment consists of Asset-Intensive and ~~Financial Reinsurance.~~Capital Solutions. Asset-Intensive within the Financial Solutions segment ~~provides~~includes coinsurance of annuities and corporate-owned life insurance policies and to a lesser extent, ~~also issues~~ fee-based synthetic guaranteed investment contracts, which include investment-only, stable value contracts. ~~Financial Reinsurance~~Capital Solutions within the Financial Solutions segment primarily involves assisting ceding companies in meeting applicable regulatory requirements by enhancing the ceding companies’ financial strength and regulatory surplus position through relatively low risk reinsurance and other transactions. Typically, these transactions do not qualify as reinsurance under GAAP, due to the low-risk nature of the transactions, sotherefore only the related net fees are reflected in other revenues on the condensed consolidated statements of income.

For the three months ended September 30, 2017: Financial Solutions
(dollars in thousands) Asset-Intensive
Financial
Reinsurance
Total U.S. and Latin America
Traditional
Revenues:
Net premiums $ 1,327,181
$ 6,423
$ —
$ 1,333,604
Investment income, net of related expenses 191,904
188,176
2,984
383,064
Investment related gains (losses), net (1,503 ) 12,832
—
11,329
Other revenues 3,801
26,899
26,856
57,556
Total revenues 1,521,383
234,330
29,840
1,785,553
Benefits and expenses:
Claims and other policy benefits 1,118,401
11,959
—
1,130,360
Interest credited 20,673
94,120
—
114,793
Policy acquisition costs and other insurance expenses 189,291
54,441
5,674
249,406
Other operating expenses 32,506
6,684
2,174
41,364
Total benefits and expenses 1,360,871
167,204
7,848
1,535,923
Income before income taxes $ 160,512
$ 67,126
$ 21,992
$ 249,630

For the three months ended September 30, 2016: Financial Solutions
(dollars in thousands) Asset-Intensive
Financial
Reinsurance
Total U.S. and Latin America
Traditional
Revenues:
Net premiums $ 1,277,491
$ 5,369
$ —
$ 1,282,860
Investment income, net of related expenses 167,898
167,683
1,038
336,619
Investment related gains (losses), net (3,394 ) 59,661
—
56,267
Other revenues 2,922
23,417
18,967
45,306
Total revenues 1,444,917
256,130
20,005
1,721,052
Benefits and expenses:
Claims and other policy benefits 1,131,507
18,927
—
1,150,434
Interest credited 20,628
86,742
—
107,370
Policy acquisition costs and other insurance expenses 184,766
56,497
3,492
244,755
Other operating expenses 30,935
5,232
2,531
38,698
Total benefits and expenses 1,367,836
167,398
6,023
1,541,257
Income before income taxes $ 77,081
$ 88,732
$ 13,982
$ 179,795

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For the nine months ended September 30, 2017: Financial Solutions
(dollars in thousands) Asset-Intensive
Financial
Reinsurance
Total U.S. and Latin America
Traditional
Revenues:
Net premiums $ 3,966,842
$ 18,186
$ —
$ 3,985,028
Investment income, net of related expenses 554,612
553,286
6,501
1,114,399
Investment related gains (losses), net (192 ) 103,229
—
103,037
Other revenues 11,322
76,324
77,466
165,112
Total revenues 4,532,584
751,025
83,967
5,367,576
Benefits and expenses:
Claims and other policy benefits 3,538,958
53,998
—
3,592,956
Interest credited 61,800
260,941
—
322,741
Policy acquisition costs and other insurance expenses 556,476
176,305
17,234
750,015
Other operating expenses 94,284
19,883
6,942
121,109
Total benefits and expenses 4,251,518
511,127
24,176
4,786,821
Income before income taxes $ 281,066
$ 239,898
$ 59,791
$ 580,755

For the nine months ended September 30, 2016: Financial Solutions
(dollars in thousands) Asset-Intensive
Financial
Reinsurance
Total U.S. and Latin America
Traditional
Revenues:
Net premiums $ 3,819,280
$ 17,250
$ —
$ 3,836,530
Investment income, net of related expenses 515,159
462,579
6,031
983,769
Investment related gains (losses), net (6,376 ) 7,940
—
1,564
Other revenues 11,674
70,806
55,511
137,991
Total revenues 4,339,737
558,575
61,542
4,959,854
Benefits and expenses:
Claims and other policy benefits 3,400,614
58,267
—
3,458,881
Interest credited 62,873
217,736
—
280,609
Policy acquisition costs and other insurance expenses 544,129
113,919
9,145
667,193
Other operating expenses 92,512
16,772
7,606
116,890
Total benefits and expenses 4,100,128
406,694
16,751
4,523,573
Income before income taxes $ 239,609
$ 151,881
$ 44,791
$ 436,281

~~Income before income taxes increased by $69.8 million, or 38.8%, and $144.5 million, or 33.1%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.~~ The ~~increase in~~following table summarizes income before income taxes for the ~~third quarter~~Company’s U.S. and Latin America operations for the periods presented:


For the three months ended March 31,
(dollars in millions)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	1,556	$	1,432	$	124
Net investment income	567		465		102
Investment related gains (losses), net	(65)		—		(65)
Other revenues	61		58		3
Total revenues	2,119		1,955		164
Benefits and expenses:
Claims and other policy benefits	1,813		1,800		13
Interest credited	124		131		(7)
Policy acquisition costs and other insurance expenses	249		231		18
Other operating expenses	55		48		7
Total benefits and expenses	2,241		2,210		31
Income (loss) before income taxes	$	(122)	$	(255)	$	133

The decrease in loss before income taxes was ~~primarily due to strong mortality experience~~the result of increases in net premiums and net investment income in the U.S. Traditional ~~segment as well as higher variable investment income.~~segment. The ~~increase~~decrease in losses was partially offset ~~somewhat~~ by a decrease in investment related gains ~~in the Financial Solutions segment. The increase in income before income taxes for the first nine months is the result~~(losses), net.

Table of several factors, including changes in the value of the embedded derivatives associated with reinsurance treaties structured on a modco or funds withheld, an increase in investment related capital gains and additional variable investment income.Contents

Traditional Reinsurance


For the three months ended March 31,
(dollars in millions)	2022			2021			2022 vs 2021
Revenues:
Net premiums	$	1,541		$	1,419		$	122
Net investment income	304			207			97
Investment related gains (losses), net	15			6			9
Other revenues	7			5			2
Total revenues	1,867			1,637			230
Benefits and expenses:
Claims and other policy benefits	1,765			1,740			25
Interest credited	17			17			—
Policy acquisition costs and other insurance expenses	208			182			26
Other operating expenses	43			36			7
Total benefits and expenses	2,033			1,975			58
Income (loss) before income taxes	$	(166)		$	(338)		$	172
Key metrics:
Life reinsurance in force	$1,645.1 billion			$1,610.2 billion
Claims and other policy benefits as a percentage of net premiums (“loss ratios”)	114.5		%	122.6		%
Policy acquisition costs and other insurance expenses as a percentage of net premiums	13.5		%	12.8		%
Other operating expenses as a percentage of net premiums	2.8		%	2.5		%

The U.S. and Latin America Traditional segment provides life and health reinsurance to clients for a variety of products through yearly renewable term, coinsurance and modco agreements. These reinsurance arrangements may involve either facultative or automatic agreements.

~~Income~~decrease in loss before income taxes for the U.S. and Latin America Traditional segment increased by $83.4 million, or 108.2%, and $41.5 million, or 17.3%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The increase in the third quarter is primarily due to favorable mortality experience as compared to same period in 2016 and higher variable investment income. The favorable mortality experience was driven by both a lower number and average size of large claims. The increase in income for the first nine months was primarily due to improved claims experience of $70 million within the Individual Mortality line of business, as well as higher ~~variable investment.~~net investment income.

~~Net~~Revenues

•The increase in net premiums ~~increased $49.7 million, or 3.9%, and $147.6 million, or 3.9%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The increases were~~was primarily due to ~~expected~~ organic ~~premium growth.~~growth as well as $46 million of new business, $45 million related to the restructuring of a transaction that was previously recognized as a low risk transaction or deposit accounting in Latin America and $31 million related to the partial recapture of a large reinsurance transaction, which had been retroceded to another reinsurer, in the second quarter of 2021. The segment added new ~~individual~~ life business production, measured by face amount of ~~insurance~~life reinsurance in force, of ~~$24.8~~$39.5 billion and ~~$19.7~~$28.5 billion ~~for~~during the ~~third quarter~~three months ended March 31, 2022 and ~~$75.1 billion and $93.0 billion for the first nine months of 2017 and 2016,~~2021, respectively.

~~Net~~•The increase in net investment income ~~increased $24.0 million, or 14.3%, and $39.5 million, or 7.7%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in 2016. The increases were~~was primarily due to ~~higher~~an increase in variable investment ~~income. Investment related~~income associated with investments in real estate joint ventures and an increase in realized gains ~~(losses), net increased $1.9 million~~associated with investments in limited partnerships and ~~$6.2 million for the three~~private equity funds.

Benefits and ~~nine months ended September 30, 2017, as compared to the same periods in 2016.~~expenses

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~~Claims and other policy benefits as a percentage of net premiums (“loss ratios”) were 84.3% and 88.6% for the third quarter and 89.2% and 89.0%, for the nine months ended~~ ~~September 30, 2017~~ ~~and 2016, respectively.~~ •The decrease in the loss ratio for the ~~third quarter of 2017,~~three months ended March 31, 2022, as compared to the same period in ~~2016~~2021, was primarily due to favorable ~~mortality~~non-COVID-19 experience, ~~specifically~~mainly within the ~~lower number~~Individual Mortality line of business. Although global COVID-19 related deaths have begun to decline, the U.S. and ~~average size~~Latin America segment continued to experience increased claim costs as result of ~~large claims. For~~COVID-19 during the ~~first nine months~~period. While the cause of ~~2017, as compared to~~death is not yet available for all claims, the ~~same period in 2016, mortality experience was relatively consistent.~~

~~Interest credited expense decreased $1.1~~Company estimates that approximately $272 million ~~or 1.7%,~~of claims for the ~~nine~~three months ended ~~September 30, 2017, as compared~~March 31, 2022, were attributable to ~~the same period~~COVID-19.

•The increase in 2016. Interest credited in this segment relates to amounts credited on cash value products which also have a significant mortality component. Income before income taxes is affected by the spread between the investment income and the interest credited on the underlying products.

~~Policy~~policy acquisition costs and other insurance expenses as a percentage of net premiums were 14.3% and 14.5% for the third quarter and 14.0% and 14.2% for the nine months ended September 30, 2017 and 2016, respectively. While these ratios are expected to remain in a predictable range, they may fluctuate from period to period due to varying allowance levels within coinsurance-type arrangements. In addition, the amortization pattern of previously capitalized amounts, which are subjectis primarily attributable to the ~~form~~restructure of ~~the reinsurance agreement and the underlying insurance policies, may vary. Also, the mix~~a transaction in Latin America.

Table of ~~first year coinsurance business versus yearly renewable term business can cause the percentage to fluctuate from period to period~~Contents

Other operating expenses, as a percentage of net premiums remained constant at 2.4% and 2.4% for the third quarter and 2.4% and 2.4% first nine months of 2017 and 2016, respectively. The expense ratio tends to fluctuate only slightly from period to period due to the maturity and scale of this segment.

Financial Solutions -


For the three months ended March 31,	2022						2021						2022 vs 2021
	Asset-Intensive		Capital Solutions		Total		Asset-Intensive		Capital Solutions		Total		Asset-Intensive		Capital Solutions		Total
(dollars in millions)
Revenues:
Net premiums	$	15	$	—	$	15	$	13	$	—	$	13	$	2	$	—	$	2
Net investment income	262		1		263		257		1		258		5		—		5
Investment related gains (losses), net	(80)		—		(80)		(6)		—		(6)		(74)		—		(74)
Other revenues	27		27		54		26		27		53		1		—		1
Total revenues	224		28		252		290		28		318		(66)		—		(66)
Benefits and expenses:
Claims and other policy benefits	48		—		48		60		—		60		(12)		—		(12)
Interest credited	107		—		107		114		—		114		(7)		—		(7)
Policy acquisition costs and other insurance expenses	40		1		41		47		2		49		(7)		(1)		(8)
Other operating expenses	9		3		12		9		3		12		—		—		—
Total benefits and expenses	204		4		208		230		5		235		(26)		(1)		(27)
Income before income taxes	$	20	$	24	$	44	$	60	$	23	$	83	$	(40)	$	1	$	(39)

Asset-Intensive Reinsurance

~~Asset-Intensive reinsurance within~~The decrease in income before income taxes for the U.S. and Latin America Financial Solutions Asset-Intensive segment was primarily ~~involves assuming~~due to higher investment ~~risk within underlying annuities~~related losses, net in coinsurance portfolios and ~~corporate-owned life insurance policies. Most~~the decrease in fair value of ~~these agreements are coinsurance, coinsurance with~~ the embedded derivatives related to modco/funds withheld ~~or modco.~~ treaties.

The ~~Company recognizes profits or losses~~invested asset base supporting this segment increased to $23.7 billion as of March 31, 2022, from $23.2 billion as of March 31, 2021.

•The increase in the asset base was primarily ~~from~~due to $3.2 billion of new transactions, partially offset by $1.6 billion of retrocessions competed in the ~~spread between~~second half of 2021, and $1.1 billion of net run off in existing inforce blocks.

•As of March 31, 2022 and 2021, $4.4 billion and $3.2 billion, respectively, of the ~~investment income earned and the~~invested assets were funds withheld at interest, ~~credited on the underlying deposit liabilities, income~~of which greater than 90% was associated with ~~longevity risk, and fees associated with variable annuity account values and guaranteed investment contracts.~~two clients.

Impact of certain ~~derivatives:~~derivatives

Income from the asset-intensive business tends to be volatile due to changes in the fair value of certain derivatives, including embedded derivatives associated with reinsurance treaties structured on a modco or funds withheld basis, as well as embedded derivatives associated with the Company’s reinsurance of ~~equity-indexed annuities~~EIAs and variable annuities with guaranteed minimum benefit riders. Fluctuations occur period to period primarily due to changing investment conditions including, but not limited to, interest rate movements (including risk-free rates and credit spreads), implied volatility, the Company’s own credit risk and equity market performance, all of which are factors in the calculations of fair value. Therefore, management believes it is helpful to distinguish between the effects of changes in these derivatives, net of related hedging activity, and the primary factors that drive profitability of the underlying treaties, namely investment income, fee income (included in other revenues), and interest credited. These fluctuations are considered unrealized by management and do not affect current cash flows, crediting rates or spread performance on the underlying treaties.

The following table summarizes the asset-intensive results and quantifies the impact of these embedded derivatives for the periods presented. Revenues before certain derivatives, benefits and expenses before certain derivatives, and income before income taxes and certain derivatives should not be viewed as substitutes for GAAP revenues, GAAP benefits and expenses, and GAAP income before income taxes.

5543

Table of Contents


(dollars in millions)	Three months ended March 31,
		2022		2021
Revenues:
Total revenues		$	224	$	290
Less:
Embedded derivatives – modco/funds withheld treaties		(49)		44
Guaranteed minimum benefit riders and related free standing derivatives		(22)		(64)
Revenues before certain derivatives		295		310
Benefits and expenses:
Total benefits and expenses		204		230
Less:
Embedded derivatives – modco/funds withheld treaties		(20)		17
Guaranteed minimum benefit riders and related free standing derivatives		(7)		(29)
Equity-indexed annuities		(10)		(14)
Benefits and expenses before certain derivatives		241		256
Income before income taxes:
Income (loss) before income taxes		20		60
Less:
Embedded derivatives – modco/funds withheld treaties		(29)		27
Guaranteed minimum benefit riders and related free standing derivatives		(15)		(35)
Equity-indexed annuities		10		14
Income before income taxes and certain derivatives		$	54	$	54

(dollars in thousands) Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues:
Total revenues $ 234,330
$ 256,130
$ 751,025
$ 558,575
Less:
Embedded derivatives – modco/funds withheld treaties 24,539
52,540
107,039
40,174
Guaranteed minimum benefit riders and related free standing derivatives (17,058 ) (12,647 ) (20,935 ) (24,710 )
Revenues before certain derivatives 226,849
216,237
664,921
543,111
Benefits and expenses:
Total benefits and expenses 167,204
167,398
511,127
406,694
Less:
Embedded derivatives – modco/funds withheld treaties 11,481
34,226
51,008
31,206
Guaranteed minimum benefit riders and related free standing derivatives (5,379 ) (3,135 ) (6,565 ) (3,439 )
Equity-indexed annuities 481
549
(13,603 ) 6,449
Benefits and expenses before certain derivatives 160,621
135,758
480,287
372,478
Income before income taxes:
Income before income taxes 67,126
88,732
239,898
151,881
Less:
Embedded derivatives – modco/funds withheld treaties 13,058
18,314
56,031
8,968
Guaranteed minimum benefit riders and related free standing derivatives (11,679 ) (9,512 ) (14,370 ) (21,271 )
Equity-indexed annuities (481 ) (549 ) 13,603
(6,449 )
Income before income taxes and certain derivatives $ 66,228
$ 80,479
$ 184,634
$ 170,633

Embedded Derivatives -– Modco/Funds Withheld Treaties -– Represents the change in the fair value of embedded derivatives on funds withheld at interest associated with treaties written on a modco or funds withheld basis. The fair value changes of these embedded derivatives ~~on funds withheld at interest associated with treaties written on a modco or funds withheld basis~~ are reflected in revenues, while the related impact on deferred acquisition expenses is reflected in benefits and expenses. The Company’s utilization of a credit valuation adjustment did not have a material effect on the change in fair value of these embedded derivatives for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016.~~2021.

The change in fair value of the embedded derivatives -related to modco/funds withheld treaties, net of deferred acquisition costs increased (decreased) income before income taxes by ~~$13.1~~$(29) million and ~~$18.3~~$27 million for the ~~third quarter and $56.0 million and $9.0 million for the nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, respectively. The increases in income for the third quarter of 2016 and 2017 were primarily due to tightening credit spreads. The increase in income for the nine months ended September 30, 2017 was primarily due to tightening credit spreads. The decrease in ~~income~~revenue for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2022, was ~~primarily~~ due to ~~shifts in~~higher interest rates of $(31) million and $(26) million of widening credit spreads during the ~~yield curve.~~three months ended March 31, 2022, compared to the prior period.

Guaranteed Minimum Benefit Riders -– Represents the impact related to guaranteed minimum benefits associated with the Company’s reinsurance of variable annuities. The fair value changes of the guaranteed minimum benefits along with the changes in fair value of the free standing derivatives (interest rate swaps, financial futures and equity options), purchased by the Company to substantially hedge the liability are reflected in revenues, while the related impact on deferred acquisition expenses is reflected in benefits and expenses. The change in fair value of the embedded derivatives on guaranteed minimum benefits are net of a decrease in investment related gains (losses), net of $13 million and $55 million for the three months ended March 31, 2022 and 2021, respectively, associated with the Company’s utilization of a credit valuation ~~adjustment did not have a material effect on the change in fair value of these embedded derivatives for the nine months ended September 30, 2017 and 2016.~~adjustment.

The change in fair value of the guaranteed minimum benefits, after allowing for changes in the associated free standing derivatives, decreased income before income taxes by ~~$11.7~~$15 million and ~~$9.5~~$35 million for the ~~third quarter and $14.4 million and $21.3 million for the nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, respectively. The decrease in income for ~~all periods~~the three months ended March 31, 2022, was primarily due to the ~~annual update~~$13 million reduction in the credit valuation adjustment which has the impact of ~~best estimate actuarial assumptions to account for lower policyholder lapse experience.~~increasing the fair value of the guaranteed minimum benefit liability.

Equity-Indexed Annuities - –Represents changes in the liability for equity-indexed annuities in excess of changes in account value, after adjustments for related deferred acquisition expenses. The change in fair value of embedded derivative liabilities associated with equity-indexed annuities increased ~~(decreased)~~ income before income taxes by ~~$(0.5)~~$10 million and ~~$(0.5)~~$14 million for the ~~third quarter and $13.6 million and $(6.4) million for the nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, respectively. ~~The decreases in income for the third quarter of 2017 and 2016 were primarily due to shifts in the yield curve.~~ The increase in income for the ~~first nine~~three months ~~of 2017~~ended March 31, 2022, was ~~primarily~~ due to ~~declining long-term~~an increase in risk free interest ~~rates. The decrease in income for~~rates which has the ~~first nine months~~impact of ~~2016 was primarily due to increasing short-term interest rates.~~lowering the fair value of the liability.

Table of Contents

The changes in derivatives discussed above are considered unrealized by management and do not affect current cash flows, crediting rates or spread performance on the underlying treaties. Fluctuations occur period to period primarily due to changing investment conditions including, but not limited to, interest rate movements (including benchmark rates and credit spreads), credit valuation adjustments, implied volatility and equity market performance, all of which are factors in the calculations of fair value. Therefore, management believes it is helpful to distinguish between the effects of changes in these derivatives and the primary factors that drive profitability of the underlying treaties, namely investment income, fee income (included in other revenues) and interest credited.

Discussion and analysis before certain ~~derivatives:~~derivatives

•Income before income taxes and certain derivatives ~~decreased by $14.3 million and increased by $14.0 million~~was consistent for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022, as compared to the same ~~periods~~period in 2016. The decrease in the third quarter was primarily due to lower investment related gains (losses), net of the corresponding impact to deferred acquisition costs, associated with coinsurance and funds withheld portfolios, which was partially offset by favorable policyholder experience in payout annuities. Funds withheld capital gains (losses) are reported in investment income. The increase in the first nine months was primarily due to favorable policyholder experience in payout annuities and higher variable investment income.2021.

•Revenue before certain derivatives ~~increased~~decreased by ~~$10.6 million and $121.8~~$15 million for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2016.~~2021. The ~~increase~~decrease in the ~~third~~first quarter of 2022 was primarily due to the impact to investment income from a new coinsurance transaction in 2017 which was partially offset by lower investment related gains (losses) associated with coinsurance and funds withheld portfolios. The increase in the first nine months was primarily due to the$(33) million change in fair value of equity options associated with the reinsurance of ~~certain~~ EIAs, ~~and higher~~partially offset by a $10 million increase in investment ~~related gains (losses)~~income associated with ~~coinsurance and~~a funds withheld ~~portfolios. The effect on investment income related~~transaction which is retroceded to ~~equity options is~~a third party. Both of these items are substantially offset by a corresponding change in interest ~~credited.~~credited and other insurance expenses, respectively.

•Benefits and expenses before certain derivatives ~~increased~~decreased by ~~$24.9 million and $107.8~~$15 million for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022, as compared to the same period in ~~2016.~~2021. The ~~increase~~decrease in the ~~third~~current quarter was primarily due to the impact to interest credited of a new coinsurance transaction in 2017 and the corresponding impact to deferred acquisition costs from investment related gains (losses) in coinsurance and funds withheld portfolios. The increase in the first nine months was primarily due to$(29) million higher interest credited associated with the reinsurance of EIAs, ~~and the corresponding impact~~partially offset by $10 million increase in other insurance expenses related to ~~deferred acquisition costs from investment related gains (losses) in coinsurance and~~a funds withheld ~~portfolios. The effect on interest credited related~~transaction which is retroceded to ~~equity options is substantially offset by~~ a ~~corresponding change in investment income.~~third party.

The invested asset base supporting this segment increased to $15.5 billion as of September 30, 2017 from $13.2 billion as of September 30, 2016. The increase in the asset base was due primarily to the aforementioned new coinsurance transaction in 2017. As of September 30, 2017, $4.1 billion of the invested assets were funds withheld at interest, of which greater than 90% is associated with one client.Capital Solutions

~~Financial Solutions - Financial Reinsurance~~

~~Financial Reinsurance within~~Income before income taxes for the U.S. and Latin America ~~Financial Solutions segment income before income taxes consists primarily of net fees earned on financial reinsurance transactions. Additionally, a portion of the~~Capital Solutions’ business is brokered business in which the Company does not participate in the assumption of risk. The fees earned from financial reinsurance contracts and brokered business are reflected in other revenues, and the fees paid to retrocessionaires are reflected in policy acquisition costs and other insurance expenses.

~~Income before income taxes increased $8.0 million, or 57.3%, and $15.0 million, or 33.5%,~~ for the three ~~and nine~~ months ended ~~September 30, 2017, as~~March 31, 2022, increased slightly compared to the ~~same periods in 2016. The increases were primarily due to growth in new transactions and organic growth on existing transactions which was partially offset by the termination of certain agreements.~~

At September 30, 2017 and 2016, the amount of reinsurance assumed from client companies, as measured by pre-tax statutory surplus, risk based capital and other financial structures was $12.6 billion and $7.9 billion, respectively. The increase was primarily due to new transactions, as well as organic growth on existing transactions.three months ended March 31, 2021. Fees earned from this business can vary significantly depending on the size of the transactions and the timing of their completion and therefore can fluctuate from period to period.

~~Table~~•As of ~~Contents~~March 31, 2022 and 2021, the amount of reinsurance assumed from client companies, as measured by pre-tax statutory surplus, risk based capital and other financial structures was $23.3 billion and $22.0 billion, respectively.

Canada Operations

The Company conducts reinsurance business in Canada primarily through RGA Canada, which assists clients with capital management activity and mortality and morbidity risk management. The Canada operations are primarily engaged in Traditional reinsurance, which consists mainly of traditional individual life reinsurance, ~~as well as~~and to a lesser extent creditor, group life and health, critical illness and disability reinsurance. Creditor insurance covers the outstanding balance on personal, mortgage or commercial loans in the event of death, disability or critical illness and is generally shorter in duration than traditional individual life insurance. The Canada Financial Solutions segment consists of longevity and ~~financial reinsurance.~~capital solutions.


For the three months ended March 31,
(dollars in millions)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	327	$	303	$	24
Net investment income	56		60		(4)
Investment related gains (losses), net	1		2		(1)
Other revenues	3		4		(1)
Total revenues	387		369		18
Benefits and expenses:
Claims and other policy benefits	311		284		27
Interest credited	—		—		—
Policy acquisition costs and other insurance expenses	47		45		2
Other operating expenses	10		10		—
Total benefits and expenses	368		339		29
Income (loss) before income taxes	$	19	$	30	$	(11)

(dollars in thousands) Three months ended September 30,
2017 2016
Revenues: Traditional Financial Solutions Total Canada Traditional Financial Solutions Total Canada
Net premiums $ 225,841
$ 9,874
$ 235,715
$ 231,154
$ 9,946
$ 241,100
Investment income, net of related expenses 51,593
1,120
52,713
45,239
1,037
46,276
Investment related gains (losses), net 2,380
—
2,380
3,832
—
3,832
Other revenues 1,281
1,436
2,717
734
1,376
2,110
Total revenues 281,095
12,430
293,525
280,959
12,359
293,318
Benefits and expenses:
Claims and other policy benefits 193,978
7,170
201,148
175,618
10,567
186,185
Interest credited 6
—
6
8
—
8
Policy acquisition costs and other insurance expenses 50,023
221
50,244
61,019
285
61,304
Other operating expenses 8,299
567
8,866
10,039
347
10,386
Total benefits and expenses 252,306
7,958
260,264
246,684
11,199
257,883
Income before income taxes $ 28,789
$ 4,472
$ 33,261
$ 34,275
$ 1,160
$ 35,435

(dollars in thousands) Nine months ended September 30,
2017 2016
Revenues: Traditional Financial Solutions Total Canada Traditional Financial Solutions Total Canada
Net premiums $ 662,983
$ 28,598
$ 691,581
$ 686,724
$ 29,089
$ 715,813
Investment income, net of related expenses 140,929
3,515
144,444
134,121
1,649
135,770
Investment related gains (losses), net 8,821
—
8,821
7,757
—
7,757
Other revenues 1,910
4,127
6,037
(731 ) 4,159
3,428
Total revenues 814,643
36,240
850,883
827,871
34,897
862,768
Benefits and expenses:
Claims and other policy benefits 566,227
21,888
588,115
524,497
29,005
553,502
Interest credited 15
—
15
17
—
17
Policy acquisition costs and other insurance expenses 143,302
571
143,873
178,178
1,002
179,180
Other operating expenses 24,146
1,292
25,438
27,500
1,010
28,510
Total benefits and expenses 733,690
23,751
757,441
730,192
31,017
761,209
Income before income taxes $ 80,953
$ 12,489
$ 93,442
$ 97,679
$ 3,880
$ 101,559

Income before income taxes decreased by $2.2 million, or 6.1%, and $8.1 million, or 8.0%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The decrease in income for the third quarter and first nine months is primarily due to unfavorable traditional individual life mortality experience compared to favorable experience in the same periods in 2016, partially offset by favorable experience on longevity business in the current year. Foreign currency exchange fluctuations in the Canadian dollar resulted in an increase in income before income taxes of $1.7 million and $1.6 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Traditional Reinsurance~~

~~Income before income taxes for the Canada Traditional segment decreased by $5.5 million, or 16.0%, and $16.7 million, or 17.1%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in 2016.~~ •The decrease in income before income taxes for the ~~third quarter and first nine~~three months ended March 31, 2022, as compared to the same period in 2021, is primarily due to unfavorable ~~traditional individual life mortality experience compared to favorable~~claims experience in the ~~same periods~~individual mortality line of business and lower investment income, partially offset by favorable claims experience in ~~2016. Foreign~~the group life and health line of business and favorable longevity experience.

Table of Contents

•While foreign currency ~~exchange~~ fluctuations can result in variances in the financial statement line items, fluctuation in the Canadian dollar ~~resulted~~did not result in ~~an increase~~a material change in income before income taxes ~~of $1.5 million and $1.4 million~~ for the three ~~and nine~~ months ended ~~September 30, 2017, as compared to the same periods~~March 31, 2022. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.

Traditional Reinsurance


For the three months ended March 31,
(dollars in millions)	2022			2021			2022 vs 2021
Revenues:
Net premiums	$	304		$	280		$	24
Net investment income	55			60			(5)
Investment related gains (losses), net	1			2			(1)
Other revenues	2			1			1
Total revenues	362			343			19
Benefits and expenses:
Claims and other policy benefits	300			266			34
Interest credited	—			—			—
Policy acquisition costs and other insurance expenses	46			45			1
Other operating expenses	10			8			2
Total benefits and expenses	356			319			37
Income (loss) before income taxes	$	6		$	24		$	(18)
Key metrics:
Life reinsurance in force	$484.5 billion			$460.1 billion
Claims and other policy benefits as a percentage of net premiums (“loss ratios”)	98.7		%	95.0		%
Policy acquisition costs and other insurance expenses as a percentage of net premiums	15.1		%	16.1		%
Other operating expenses as a percentage of net premiums	3.3		%	2.9		%

The decrease in ~~2016.~~

~~Table of Contents~~

~~Net premiums decreased $5.3 million, or 2.3%, and $23.7 million, or 3.5%,~~income before income taxes for the three ~~and nine~~ months ended ~~September 30, 2017, as compared to the same periods in 2016. The decreases in net premiums were~~March 31, 2022, is primarily due to ~~an anticipated~~unfavorable claims experience in the individual mortality line of business and lower investment income, partially offset by favorable claims experience in the group life and health line of business.

Revenues

•The segment added new life business production, measured by face amount of life reinsurance in force, of $12.7 billion, and $14.2 billion during the first three months of 2022 and 2021, respectively.

•The decrease in ~~creditor premiums of $21.0 million and $60.4 million for the third quarter and first nine months, respectively. These decreases were~~net investment income was primarily due to decreased variable investment income, partially offset by an increase in traditional individual life business premiums from annually increasing premium rates on yearly renewable term treaties and favorable foreign currency exchange fluctuation. Foreign currency exchange fluctuations in the Canadian dollar resulted in an increase in net premiums of approximately $9.0 million and $7.0 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

Net investment income increased $6.4 million, or 14.0%, and $6.8 million, or 5.1%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The increases in investment income for the third quarter and the first nine months were primarily the result of an increase in the invested asset ~~base due to growth in the underlying business volume~~base.

Benefits and an increase in investment yields from a higher level of variable investment income. Foreign currency exchange fluctuation in the Canadian dollar resulted in an increase in net investment income of approximately $2.1 million and $1.7 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.expenses

~~Other revenues increased by $0.5 million and $2.6 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.~~ •The increase in other revenues for the third quarter of 2017 is primarily due to foreign currency exchange fluctuations. The increase in other revenues for the first nine months of 2017 is primarily due to fee income from the recapture of a previously assumed block of individual life business during the second quarter of 2017.

~~Loss ratios for this segment were 85.9% and 76.0% for the third quarter and 85.4% and 76.4% for the nine months ended September 30, 2017 and 2016, respectively. The increases~~ in the loss ratio for the three ~~and nine~~ months ~~of 2017,~~ended March 31, 2022, as compared to the same ~~periods~~period in ~~2016, are~~2021, was primarily due to unfavorable ~~traditional life mortality experience compared to favorable~~claims experience in the ~~same periods in 2016 and a decrease in creditor business premiums. Loss ratios~~individual mortality line of business. While the cause of death is not yet available for the traditional individual life mortality business were 99.5% and 94.4% for the third quarter and 98.7% and 93.4% for the first nine months ended September 30, 2017 and 2016, respectively. Historically, the loss ratio increased primarily as the result of several large permanent level premium in force blocks assumed in 1997 and 1998. These blocks are mature blocks of long-term permanent level premium business in which mortality as a percentage of net premiums is expected to be higher than historical ratios. The nature of permanent level premium policies requiresall claims, the Company ~~to set up actuarial liabilities and invest the amounts received in excess~~estimates that approximately $20 million of ~~early-year~~ claims costs to fund claims in later years when premiums, by design, continue to be level as compared to expected increasing mortality or claim costs. As such, investment income becomes a more significant component of profitability of these in force blocks. Excluding creditor business, claims and other policy benefits, as a percentage of net premiums and investment income were 77.7% and 73.7% for the third quarter and 77.7% and 73.5% for the nine months ended September 30, 2017 and 2016, respectively.

Policy acquisition costs and other insurance expenses as a percentage of net premiums were 22.1% and 26.4% for the third quarter and 21.6% and 25.9% for the nine months ended September 30, 2017 and 2016, respectively. Overall, while these ratios are expected to remain in a predictable range, they may fluctuate from period to period due to varying allowance levels and product mix. The decrease for the third quarter and first nine months reflects a lower level of creditor business which typically has a higher level of acquisition costs. In addition, the amortization patterns of previously capitalized amounts, which are subject to the form of the reinsurance agreement and the underlying insurance policies, may vary.

~~Other operating expenses decreased $1.7 million, or 17.3%, and $3.4 million, or 12.2%,~~ for the three ~~and nine~~ months ended ~~September 30, 2017, as compared~~March 31, 2022, were attributable to the same periods in 2016, primarily due to a decrease in corporate overhead expenses. Other operating expenses as a percentage of net premiums were 3.7% and 4.3% for the third quarter and 3.6% and 4.0% for the nine month periods ended September 30, 2017 and 2016, respectively.COVID-19 related factors.

Financial Solutions ~~Reinsurance~~

~~Income before income taxes increased by $3.3 million and $8.6 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.~~


For the three months ended March 31,
(dollars in millions)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	23	$	23	$	—
Net investment income	1		—		1
Investment related gains (losses), net	—		—		—
Other revenues	1		3		(2)
Total revenues	25		26		(1)
Benefits and expenses:
Claims and other policy benefits	11		18		(7)
Interest credited	—		—		—
Policy acquisition costs and other insurance expenses	1		—		1
Other operating expenses	—		2		(2)
Total benefits and expenses	12		20		(8)
Income (loss) before income taxes	$	13	$	6	$	7

Table of Contents

The increases in income for both the three and nine month periods are primarily due to favorable experience on longevity business in the current-year periods. Foreign currency exchange fluctuations in the Canadian dollar resulted in an increase in income before income taxes was primarily a result of ~~$0.2 million~~more favorable mortality experience on longevity business for ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2016.~~2021.

Net premiums decreased $0.1 million, or 0.7%, and $0.5 million, or 1.7%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. Foreign currency exchange fluctuations in the Canadian dollar resulted in an increase in net premiums of approximately $0.4 million for both the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

Net investment income increased $0.1 million and $1.9 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016 primarily due to an increase in the invested asset base.

~~Table of Contents~~

~~Claims and other policy benefits decreased $3.4 million, or 32.1%, and $7.1 million, or 24.5%, for the three and nine months ended~~ ~~September 30, 2017~~ ~~as compared to the same periods in 2016. The decreases for the third quarter and first nine months are primarily due to favorable experience on longevity business.~~

Europe, Middle East and Africa Operations

The Europe, Middle East and Africa (“EMEA”) ~~segment includes~~operations include business primarily generated by ~~its~~ offices ~~principally~~ in ~~the United Kingdom (“UK”), South Africa,~~ France, Germany, Ireland, Italy, the Middle East, the Netherlands, Poland, South Africa, Spain and the United ~~Arab Emirates~~Kingdom (“~~UAE”~~UK”). EMEA consists of two major segments: Traditional and Financial Solutions. The Traditional segment primarily provides reinsurance through yearly renewable term and coinsurance agreements on a variety of life, health and critical illness products. Reinsurance agreements may be facultative or automatic agreements covering primarily individual risks and, in some markets, group risks. The Financial Solutions segment consists of reinsurance and other transactions associated with longevity closed blocks, payout annuities, capital management solutions and financial reinsurance.


For the three months ended March 31,
(dollars in millions)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	579	$	517	$	62
Net investment income	57		68		(11)
Investment related gains (losses), net	16		16		—
Other revenues	6		2		4
Total revenues	658		603		55
Benefits and expenses:
Claims and other policy benefits	518		544		(26)
Interest credited	(9)		(1)		(8)
Policy acquisition costs and other insurance expenses	26		31		(5)
Other operating expenses	44		37		7
Total benefits and expenses	579		611		(32)
Income (loss) before income taxes	$	79	$	(8)	$	87

(dollars in thousands) Three months ended September 30,
2017 2016
Revenues: Traditional Financial Solutions Total EMEA Traditional Financial Solutions Total EMEA
Net premiums $ 344,211
$ 39,294
$ 383,505
$ 275,514
$ 47,018
$ 322,532
Investment income, net of related expenses 14,727
30,892
45,619
13,067
33,187
46,254
Investment related gains (losses), net —
1,192
1,192
—
8,159
8,159
Other revenues 2,034
5,663
7,697
489
11,388
11,877
Total revenues 360,972
77,041
438,013
289,070
99,752
388,822
Benefits and expenses:
Claims and other policy benefits 285,071
35,648
320,719
241,763
45,805
287,568
Interest credited —
2,475
2,475
—
5,540
5,540
Policy acquisition costs and other insurance expenses 35,751
327
36,078
14,133
(304 ) 13,829
Other operating expenses 24,729
7,638
32,367
24,659
4,925
29,584
Total benefits and expenses 345,551
46,088
391,639
280,555
55,966
336,521
Income before income taxes $ 15,421
$ 30,953
$ 46,374
$ 8,515
$ 43,786
$ 52,301

(dollars in thousands) Nine months ended September 30,
2017 2016
Revenues: Traditional Financial Solutions Total EMEA Traditional Financial Solutions Total EMEA
Net premiums $ 979,733
$ 119,809
$ 1,099,542
$ 838,810
$ 126,108
$ 964,918
Investment income, net of related expenses 41,032
88,602
129,634
38,556
95,288
133,844
Investment related gains (losses), net 7
8,225
8,232
5
8,623
8,628
Other revenues 4,206
13,799
18,005
2,975
18,466
21,441
Total revenues 1,024,978
230,435
1,255,413
880,346
248,485
1,128,831
Benefits and expenses:
Claims and other policy benefits 846,476
108,381
954,857
745,342
126,252
871,594
Interest credited —
6,297
6,297
—
8,914
8,914
Policy acquisition costs and other insurance expenses 66,263
1,070
67,333
46,465
226
46,691
Other operating expenses 71,488
22,911
94,399
74,306
16,414
90,720
Total benefits and expenses 984,227
138,659
1,122,886
866,113
151,806
1,017,919
Income before income taxes $ 40,751
$ 91,776
$ 132,527
$ 14,233
$ 96,679
$ 110,912

~~Income~~•The increase in income before income taxes ~~decreased by $5.9 million, or 11.3%, and increased by $21.6 million, or 19.5%,~~ for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2022, as compared to the same ~~periods~~period in ~~2016. The decrease in income for the third quarter~~2021, was primarily due to ~~lower payout annuity~~increased net premiums, as well as improved mortality experience compared to the prior-year quarter.

•Foreign currency fluctuations can result in variances in the financial statement line items. Foreign currency fluctuations resulted in a $2 million decrease in income ~~partially offset~~before income taxes for the three months ended March 31, 2022. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.

Traditional Reinsurance


For the three months ended March 31,
(dollars in millions)	2022			2021			2022 vs 2021
Revenues:
Net premiums	$	451		$	438		$	13
Net investment income	22			20			2
Investment related gains (losses), net	—			—			—
Other revenues	3			(1)			4
Total revenues	476			457			19
Benefits and expenses:
Claims and other policy benefits	427			469			(42)
Interest credited	—			—			—
Policy acquisition costs and other insurance expenses	25			29			(4)
Other operating expenses	30			27			3
Total benefits and expenses	482			525			(43)
Income (loss) before income taxes	$	(6)		$	(68)		$	62
Key metrics:
Life reinsurance in force	$850.7 billion			$830.8 billion
Claims and other policy benefits as a percentage of net premiums (“loss ratios”)	94.7		%	107.1		%
Policy acquisition costs and other insurance expenses as a percentage of net premiums	5.5		%	6.6		%
Other operating expenses as a percentage of net premiums	6.7		%	6.2		%

The decrease in loss before income taxes for the three months ended March 31, 2022, as compared to the same period in 2021, was primarily due to an improvement in individual life mortality experience and increased net premiums.

Table of Contents

Revenues

•The increase in net premiums was due to an increase in business volume on new and existing treaties.

•The segment added new life business production, measured by ~~favorable~~face amount of life reinsurance in force, of $50.5 billion and $27.6 billion during the three months ended March 31, 2022, and the same period in 2021, respectively.

Benefits and expenses

•The decrease in the loss ratio for the first three months of 2022 is due to improved mortality experience. While the cause of death is not available for all claims, the Company estimates that approximately $10 million of claims for the three months ended March 31, 2022, were attributable to COVID-19 related factors.

Financial Solutions


For the three months ended March 31,
(dollars in millions)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	128	$	79	$	49
Net investment income	35		48		(13)
Investment related gains (losses), net	16		16		—
Other revenues	3		3		—
Total revenues	182		146		36
Benefits and expenses:
Claims and other policy benefits	91		75		16
Interest credited	(9)		(1)		(8)
Policy acquisition costs and other insurance expenses	1		2		(1)
Other operating expenses	14		10		4
Total benefits and expenses	97		86		11
Income (loss) before income taxes	$	85	$	60	$	25

The increase in income before income taxes for the first ~~nine~~three months was primarily due to favorable individual mortality and longevity experience. Foreign currency exchange fluctuations resulted in an increase (decrease) in income before income taxes of $0.8 million and $(8.5) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Table of Contents~~

~~Traditional Reinsurance~~

~~Income before income taxes increased by $6.9 million, or 81.1%, and $26.5 million, or 186.3%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in~~ ~~2016. The increase in income for the third quarter was primarily due to favorable mortality experience. The increases in income before income taxes for the first nine months was primarily due to~~new business growth and favorable ~~individual mortality experience partially offset by unfavorable morbidity~~longevity experience. Foreign currency exchange fluctuations resulted in an increase (decrease) in income before income taxes of $0.7 million and $(0.5) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Net premiums increased $68.7 million, or 24.9%, and $140.9 million, or 16.8%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.~~ Revenues

•The increase in ~~the three and nine months~~net premiums was primarily due to increased ~~business~~ volumes most notably in the UAE, Italy and South Africa related to new treaties in 2017 and favorable growth from existing treaties. Foreign currency exchange fluctuations increased (decreased) net premiums by approximately $7.3 million and $(27.8) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.of closed block longevity transactions.

A portion of the net premiums for the segment, in each period presented, relates to reinsurance of critical illness coverage, primarily in the UK. This coverage provides a benefit in the event of the diagnosis of a pre-defined critical illness. Net premiums earned from this coverage totaled $49.0 million and $49.5 million for the third quarter and $144.2 million and $157.0 million for the first nine months of 2017 and 2016, respectively.

~~Net investment income increased $1.7 million, or 12.7%, and $2.5 million, or 6.4%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in 2016.~~ •The ~~increases were primarily due to an increase in the invested asset base related to increased business volumes. Foreign currency exchange fluctuations resulted in an increase (decrease)~~decrease in net investment income ~~of approximately $0.4 million~~was primarily related to lower income associated with unit-linked policies which fluctuate with market performance and ~~$(0.8) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.~~

~~Loss ratios for this segment were 82.8% and 87.7% for the third quarter and 86.4% and 88.9% for the first nine months ended~~ ~~September 30, 2017~~ and 2016, respectively. The decreases in loss ratios were primarily due to changes in the mix of business in the third quarter of 2017 reflecting increased volumes of new business with lower loss ratios, but with higher commissions. These higher commissions are reflected in the increases of 2017 policy acquisition cost ratios below.

~~Policy acquisition costs and other insurance expenses as~~is offset by a ~~percentage of net premiums were 10.4% and 5.1% for the third quarter and 6.8% and 5.5% for the first nine months ended~~ ~~September 30, 2017~~ and 2016, respectively. The increases in policy acquisition cost ratios are due primarily to changes in the mix of business in the third quarter of 2017 reflecting increased volumes of new business with higher commissions.

~~Other operating expenses increased $0.1 million, or 0.3%, and decreased $2.8 million, or 3.8%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The~~ decrease in ~~the first nine months was primarily due to lower corporate overhead expense timing~~interest credited.

Benefits and ~~the effect of foreign currency exchange fluctuations. Foreign currency exchange fluctuations resulted in an increase (decrease) in operating~~ expenses of approximately $0.8 million and $(0.4) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. Other operating expenses as a percentage of net premiums totaled 7.2% and 9.0% for the third quarter and 7.3% and 8.9% for the first nine months ended ~~September 30, 2017~~ ~~and 2016, respectively.~~

~~Financial Solutions Reinsurance~~

~~Income before income taxes decreased by $12.8 million, or 29.3%, and $4.9 million, or 5.1%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in~~ ~~2016~~. •The decreases in income before income taxes were primarily due to payout annuity experience normalizing after a particularly positive 2016, partly offset by favorable longevity business results. Foreign currency exchange fluctuations resulted in an increase (decrease) in income before income taxes totaling $0.1 million and $(7.9) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Net premiums decreased by $7.7 million, or 16.4%, and $6.3 million, or 5.0%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017~~, as compared to the same periods in 2016. The decreases in net premiums were due to a new retrocession treaty, executed for risk management purposes effective in the first quarter of 2017, which cedes longevity risk to third parties, partially offset by an increase in premiums from new transactions. Foreign currency exchange fluctuations increased (decreased) net premiums by approximately $0.1 million and $(10.5) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Table of Contents~~

~~Net investment income decreased $2.3 million, or 6.9%, and $6.7 million, or 7.0%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017~~, as compared to the same periods in 2016. The decreases in investment income for the third quarter was due to decreases in both investment yields and the invested asset base, while the decrease for the nine-month period was primarily due to foreign currency exchange fluctuations. Foreign currency exchange fluctuations resulted in an increase (decrease) in net investment income of approximately $0.1 million and $(7.3) million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Other revenues decreased by $5.7 million, or 50.3%, and $4.7 million, or 25.3%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in 2016. The decreases in other revenues were due to experience from a longevity swap normalizing after a particularly positive 2016.~~

~~Claims and other policy benefits decreased $10.2 million, or 22.2%, and $17.9 million, or 14.2%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017~~, as compared to the same periods in 2016. The decrease in the third quarter and first nine months was primarily due to the aforementioned new longevity retrocession treaty that cedes longevity risk to third parties, net of an increase in claims and other policy benefits ~~from new transactions. Foreign currency exchange fluctuations resulted~~is the result of increased production and continued growth in ~~a decrease in claims and other policy benefits of approximately $9.6 million for~~ the ~~nine months ended September 30, 2017, as compared to the same period in 2016.~~segment’s longevity block business.

~~Interest credited expense decreased by $3.1 million, or 55.3%, and $2.6 million, or 29.4%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.~~ •Interest credited in this segment relates to amounts credited to the ~~contractholders~~contract holders of unit-linked products. This amount will fluctuate according to ~~contractholder~~contract holder investment selections, equity returns and interest rates. The effect on interest credited related to unit-linked products is substantially offset by a corresponding change in investment income.

~~Other operating expenses increased $2.7 million, or 55.1%, and $6.5 million, or 39.6%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in 2016.~~ •The increases are primarily due to increased administration costs related to longevity transactions and are offset partially by the effect of foreign currency exchange fluctuations. Foreign currency exchange fluctuations resulted in an increase ~~(decrease)~~ in operating expenses ~~of approximately $0.2 million and $(1.0) million for the three and nine months ended September 30, 2017, as compared~~is due to ~~the same periods~~an increase in ~~2016.~~transaction related costs.

Asia Pacific Operations

The Asia Pacific operations include business generated by its offices principally in Australia, China, Hong Kong, India, Japan, Malaysia, New Zealand, Singapore, South Korea and Taiwan. The Traditional segment’s principal types of reinsurance include individual and group life and health, critical illness, disability and superannuation. Reinsurance agreements may be facultative or automatic agreements covering primarily individual risks, and in some markets, group risks. Superannuation is the Australian government mandated compulsory retirement savings program. Superannuation funds accumulate retirement funds for employees, and, in addition, typically offer life and disability insurance coverage. The Financial Solutions segment includes financial reinsurance, asset-intensive and certain disability and life blocks. ~~Reinsurance agreements may be facultative or automatic agreements covering primarily individual risks and in some markets, group risks.~~

(dollars in thousands) Three months ended September 30,
2017 2016
Revenues: Traditional Financial Solutions Total Asia Pacific Traditional Financial Solutions Total Asia Pacific
Net premiums $ 536,931
$ 19
$ 536,950
$ 404,451
$ 743
$ 405,194
Investment income, net of related expenses 23,858
10,556
34,414
21,273
5,827
27,100
Investment related gains (losses), net —
758
758
—
6,108
6,108
Other revenues 871
5,599
6,470
1,923
6,359
8,282
Total revenues 561,660
16,932
578,592
427,647
19,037
446,684
Benefits and expenses:
Claims and other policy benefits 442,358
6,110
448,468
365,115
3,777
368,892
Interest credited —
7,026
7,026
—
3,308
3,308
Policy acquisition costs and other insurance expenses 55,891
653
56,544
4,157
1,482
5,639
Other operating expenses 36,847
3,372
40,219
38,553
2,921
41,474
Total benefits and expenses 535,096
17,161
552,257
407,825
11,488
419,313
Income (loss) before income taxes $ 26,564
$ (229 ) $ 26,335
$ 19,822
$ 7,549
$ 27,371

Table of Contents


For the three months ended March 31,
(dollars in millions)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	693	$	662	$	31
Net investment income	77		61		16
Investment related gains (losses), net	(81)		11		(92)
Other revenues	20		17		3
Total revenues	709		751		(42)
Benefits and expenses:
Claims and other policy benefits	583		564		19
Interest credited	20		15		5
Policy acquisition costs and other insurance expenses	59		54		5
Other operating expenses	52		49		3
Total benefits and expenses	714		682		32
Income (loss) before income taxes	$	(5)	$	69	$	(74)

(dollars in thousands) Nine months ended September 30,
2017 2016
Revenues: Traditional Financial Solutions Total Asia Pacific Traditional Financial Solutions Total Asia Pacific
Net premiums $ 1,557,590
$ 2,094
$ 1,559,684
$ 1,233,222
$ 4,936
$ 1,238,158
Investment income, net of related expenses 68,105
24,662
92,767
61,601
18,086
79,687
Investment related gains (losses), net —
11,525
11,525
14
14,322
14,336
Other revenues 2,724
17,087
19,811
4,580
18,809
23,389
Total revenues 1,628,419
55,368
1,683,787
1,299,417
56,153
1,355,570
Benefits and expenses:
Claims and other policy benefits 1,221,091
14,170
1,235,261
977,860
15,487
993,347
Interest credited —
15,595
15,595
—
9,474
9,474
Policy acquisition costs and other insurance expenses 180,007
4,111
184,118
116,432
4,436
120,868
Other operating expenses 105,747
10,472
116,219
109,661
10,727
120,388
Total benefits and expenses 1,506,845
44,348
1,551,193
1,203,953
40,124
1,244,077
Income before income taxes $ 121,574
$ 11,020
$ 132,594
$ 95,464
$ 16,029
$ 111,493

~~Income~~•The decrease in income before ~~income~~ taxes ~~decreased by $1.0 million, or 3.8%, and increased by $21.1 million, or 18.9%, for the three and nine months ended September 30, 2017,~~ as compared to the same ~~periods~~period in ~~2016.~~ 2021 was primarily due to unfavorable fluctuations in the fair value of derivatives within the Financial Solutions business, partially offset by favorable claims experience in Asia and Australia.

•Foreign currency fluctuations can result in variances in the financial statement line items. Foreign currency fluctuations resulted in an $8 million increase in income before income taxes during the three months ended March 31, 2022. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.

Traditional Reinsurance


For the three months ended March 31,
(dollars in millions)	2022			2021			2022 vs 2021
Revenues:
Net premiums	$	650		$	609		$	41
Net investment income	33			33			—
Investment related gains (losses), net	—			(1)			1
Other revenues	5			6			(1)
Total revenues	688			647			41
Benefits and expenses:
Claims and other policy benefits	542			518			24
Interest credited	—			—			—
Policy acquisition costs and other insurance expenses	47			43			4
Other operating expenses	48			45			3
Total benefits and expenses	637			606			31
Income (loss) before income taxes	$	51		$	41		$	10
Key metrics:
Life reinsurance in force	$508.4 billion			$521.0 billion
Claims and other policy benefits as a percentage of net premiums (“loss ratios”)	83.4		%	85.1		%
Policy acquisition costs and other insurance expenses as a percentage of net premiums	7.2		%	7.1		%
Other operating expenses as a percentage of net premiums	7.4		%	7.4		%

The increase in income before income taxes is primarily the result of an increase in net premiums, partially offset by increases in benefits and expenses across the segment.

Revenues

•The increase in net premiums was primarily due to continued business growth in the segment.

•The segment added new life business production, measured by face amount of life reinsurance in force, of $16.6 billion and $7.6 billion during the three months ended March 31, 2022 and 2021, respectively, due to new business production.

Table of Contents

Benefits and expenses

•The decrease in the loss ratio for the three months ended March 31, 2022, as compared to the same period in 2021 was primarily due to increases in net premiums in excess of unfavorable claims experience across the segment. While the cause of death is not yet available for all claims, the Company estimates that approximately $14 million of claims for the three months ended March 31, 2022, were attributable to COVID-19 related factors.

Financial Solutions


For the three months ended March 31,
(dollars in millions)	2022		2021		2022 vs 2021
Revenues:
Net premiums	$	43	$	53	$	(10)
Net investment income	44		28		16
Investment related gains (losses), net	(81)		12		(93)
Other revenues	15		11		4
Total revenues	21		104		(83)
Benefits and expenses:
Claims and other policy benefits	41		46		(5)
Interest credited	20		15		5
Policy acquisition costs and other insurance expenses	12		11		1
Other operating expenses	4		4		—
Total benefits and expenses	77		76		1
Income (loss) before income taxes	$	(56)	$	28	$	(84)

The decrease in income before income taxes ~~for the third quarter was~~is primarily due to ~~an increase in policy lapses on a financial solutions closed block of business in Japan partially offset by favorable results~~unfavorable fluctuations in the ~~traditional segment.~~fair value of derivatives. The invested asset base supporting asset-intensive transactions increased to $10.3 billion as of March 31, 2022 from $6.6 billion as of March 31, 2021. The increase in ~~income before income taxes for~~ the ~~first nine months~~asset base compared to March 31, 2021, was primarily due to ~~higher income~~$3.3 billion from ~~offices in Asia driven by business~~recently executed transactions and net organic growth ~~most notably in Hong Kong and Southeast Asia.~~of $0.4 billion from existing inforce blocks. The prior-year period also included poor claims experience in Australia. The third quarter of 2016 also included a higher level of benefit expense associated with the timing of client reporting on one large treaty in Hong Kong. Foreign currency exchange fluctuations resulted in a decrease to income before income taxes totaling approximately $0.8 million and $0.3 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Traditional Reinsurance~~

~~Income before income taxes increased by $6.7 million, or 34.0%, and $26.1 million, or 27.4%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in~~ ~~2016~~. The increases in income before income taxes are primarily due to higher income from offices in Asia driven by business growth. Foreign currency exchange fluctuations resulted in a decrease to income before income taxes totaling approximately $1.0 million and $0.4 million for the ~~three and nine~~ ~~months ended September 30, 2017, as compared to the same periods in~~ ~~2016~~.

Net premiums increased by $132.5 million, or 32.8%, and $324.4 million, or 26.3%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The increases were driven by both new and existing business written throughout the segment. Foreign currency exchange fluctuations resulted in an increase in net premiums of approximately $1.0 million and $14.2 million for the three and nine months of 2017, as compared to the same periods in 2016.

A portion of the net premiums for the segment, in each period presented, relates to reinsurance of critical illness coverage. This coverage provides a benefit in the event of the diagnosis of a pre-defined critical illness. Reinsurance of critical illness in the segment is offered primarily in South Korea, Australia and Hong Kong. Net premiums earned from this coverage totaled $158.6 million and $100.6 million for the third quarter and $474.8 million and $312.3 million for the first nine months ended ~~September 30, 2017~~ ~~and~~ ~~2016, respectively.~~

~~Net investment income increased $2.6 million, or 12.2%, and $6.5 million, or 10.6%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017~~, as compared to the same periods in 2016. The increases were primarily due to a higher invested asset base. Foreign currency exchange fluctuations resulted in an increase in net investment income of approximately $0.5 million and $1.3 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

Other revenues decreased by $1.1 million, or 54.7%, and $1.9 million, or 40.5%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. These variances are primarily due to gains and losses related to foreign currency transactions.

Loss ratios for this segment were 82.4% and 90.3% for the third quarter and 78.4% and 79.3% for the first nine months ended September 30, 2017 and 2016, respectively. The decreases in the loss ratios for the third quarter and first nine months of 2017 were primarily due to improved claims experience in Australia compared to the prior year.

~~Table of Contents~~

Policy acquisition costs and other insurance expenses as a percentage of net premiums were 10.4% and 1.0% for the third quarter and 11.6% and 9.4% for the nine months ended September 30, 2017 and 2016, respectively. The third quarter 2016 included the affect of adjustments associated with client reporting on one large treaty in Hong Kong. These percentages fluctuate due to timing of client company reporting, premium refunds, variations in the mixture of business and the relative maturity of the business.~~In addition, as the segment grows, renewal premiums, which have lower allowances than first-year premiums, represent a greater percentage of the total net premiums.~~

Other operating expenses decreased $1.7 million, or 4.4%, and $3.9 million, or 3.6%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016 mainly due to the timing of travel and consultant expenditures. Other operating expenses as a percentage of net premiums totaled 6.9% and 9.5% for the third quarter and 6.8% and 8.9% for the first nine months ended September 30, 2017 and 2016, respectively. The timing of premium flows and the level of costs associated with the entrance into and development of new markets within the segment may cause other operating expenses as a percentage of net premiums to fluctuate over periods of time.

~~Financial Solutions Reinsurance~~

~~Income before income taxes decreased by $7.8 million and $5.0 million for the three and nine months ended~~ ~~September 30, 2017, as compared to the same periods in~~ ~~2016~~. The decreases in income before income taxes are primarily due to lower income from higher lapses on policies of the aforementioned closed block of business in Japan. Foreign currency exchange fluctuations resulted in an increase in income before income taxes of approximately $0.1 million for both the ~~three and nine~~ ~~months ended September 30, 2017, as compared to the same periods in~~ ~~2016~~.

~~Net premiums decreased $0.7 million or 97.4%, and $2.8 million, or 57.6%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017~~, as compared to the same periods in 2016. The decreases for the third quarter and first nine months were due to higher lapses from policies of the aforementioned closed block of business in Japan. Foreign currency exchange fluctuations had a negligible effect on net premiums for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Net investment income increased $4.7 million, or 81.2%, and $6.6 million, or 36.4%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017~~, as compared to the same periods in 2016 mainly due to growth in the invested asset base. Foreign currency exchange fluctuations resulted in an increase in net investment income of approximately $0.2 million and $0.4 million for the three and nine months ended September 30, 2017, as compared to the same periods in 2016.

~~Other revenues decreased by $0.8 million, or 12.0%, and $1.7 million, or 9.2%, for the~~ ~~three and nine~~ ~~months ended~~ ~~September 30, 2017, as compared to the same periods in 2016. At~~ ~~September 30, 2017~~ ~~and 2016, the~~ amount of reinsurance assumed from client companies, as measured by pre-tax statutory surplus, risk based capital and other financial reinsurance structures was ~~$2.4~~$1.3 billion and ~~$1.0~~$1.6 billion for the three months ended March 31, 2022 and 2021, respectively. Fees earned from this business can vary significantly depending on the size, complexity and timing of the transactions ~~and the timing of their completion~~ and, therefore, can fluctuate from period to period.

~~Claims and other policy benefits increased by $2.3~~Revenues

•The decrease in net premiums is attributable to a lower contribution from single premium asset-intensive transactions of $8 million ~~or 61.8%, and decreased by $1.3 million, or 8.5%,~~ for the three ~~and nine~~ months ended ~~September 30, 2017~~,March 31, 2022, as compared to the same ~~periods~~period in ~~2016.~~ 2021.

•The increase in net investment income is due to the ~~third quarter was~~increase in the asset base.

•The decrease in investment related gains (losses), net is primarily due to ~~higher lapses from policies of the aforementioned closed block of business in Japan. The decrease~~unfavorable fluctuations in the ~~first nine months is attributable~~fair value of credit derivatives of $(78) million due to ~~lower lapses from policies from a closed block of business in Japan.~~widening credit spreads.

~~Other operating expenses increased by $0.5 million, or 15.4%, and decreased by $0.3 million, or 2.4%, for the three and nine months ended~~ ~~September 30, 2017~~, as compared to the same periods in 2016, respectively. The timing of premium flows and the level of costs associated with the entrance into and development of new markets within the segment may cause other operating expenses to fluctuate over periods of time.

~~Table of Contents~~

Corporate and Other

Corporate and Other revenues primarily include investment income from unallocated invested assets, ~~and~~ investment related gains and ~~losses.~~losses and service fees. Corporate and Other expenses consist of the offset to capital charges allocated to the operating segments within the policy acquisition costs and other insurance income line item, unallocated overhead and executive costs, interest expense related to debt, and the investment income and expense associated with the Company’s collateral finance and securitization ~~transactions.~~transactions and service business expenses. Additionally, Corporate and Other includes results from certain wholly-owned subsidiaries, such as RGAX, and joint ventures that, among other activities, develop and market technology, and provide consulting and outsourcing solutions for the insurance ~~industry.~~and reinsurance industries. The Company continues to invest in this area in an effort to both support its clients and accelerate the development of new solutions and services to increase consumer engagement within the life insurance industry and hence generate new future revenue streams.

Table of Contents


(dollars in thousands)	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
For the three months ended March 31,													For the three months ended March 31,
(dollars in millions)													(dollars in millions)	2022		2021		2022 vs 2021
Revenues:													Revenues:
Net premiums	$	23		$	72		$	109		$	289		Net premiums	$	—	$	—	$	—
Investment income, net of related expenses	41,108			33,478			108,576			81,589
Net investment income													Net investment income	53		158		(105)
Investment related gains (losses), net	6,994			12,258			7,856			51,717			Investment related gains (losses), net	3		273		(270)
Other revenues	1,502			4,893			9,126			11,595			Other revenues	1		10		(9)
Total revenues	49,627			50,701			125,667			145,190			Total revenues	57		441		(384)
Benefits and expenses:													Benefits and expenses:
Claims and other policy benefits	(15		)	(15		)	(1		)	6			Claims and other policy benefits	—		—		—
Interest credited	1,799			622			4,420			1,588			Interest credited	6		1		5
Policy acquisition costs and other insurance income	(26,848		)	(24,565		)	(80,694		)	(73,526		)	Policy acquisition costs and other insurance income	(26)		(28)		2
Other operating expenses	45,601			32,414			124,114			113,367			Other operating expenses	65		70		(5)
Interest expense	36,836			43,063			108,590			96,201			Interest expense	42		45		(3)
Collateral finance and securitization expense	7,692			6,484			21,235			19,396			Collateral finance and securitization expense	1		3		(2)
Total benefits and expenses	65,065			58,003			177,664			157,032			Total benefits and expenses	88		91		(3)
Income (loss) before income taxes	$	(15,438	)	$	(7,302	)	$	(51,997	)	$	(11,842	)
Loss before income taxes													Loss before income taxes	$	(31)	$	350	$	(381)

~~Loss~~The decrease in income before income taxes increased by $8.1 million, or 111.4% and $40.2 million, or 339.1%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The increase in loss before income taxes for the third quarter and the first nine months is primarily due to decreased net investment related gains, decreased other revenues and higher other operating expenses partially offset by increased investment income.

Total revenues decreased by $1.1 million, or 2.1%, and $19.5 million, or 13.4%, for the three and nine months ended September 30, 2017, as compared to the same periods in 2016. The decrease for the third quarter is primarily due to a ~~$5.3~~decrease in total revenues attributable to the following:

•The decrease in net investment income is primarily due to a one-time adjustment recorded in the prior period of $92 million of pre-tax unrealized gains on certain limited partnerships, for which the Company uses the equity method of accounting, from AOCI to net investment income. The unrealized gains should have been recognized directly in net investment income in the same prior periods they were reported as earnings by the investees. The remaining decrease is attributable to lower investment income on Corporate invested assets primarily due to a lower yield.

•The decrease in investment related gains (losses), net ~~largely caused by an increase in other-than-temporary impairments~~is attributable to losses on sales of fixed maturity securities ~~and other impairment charges~~in the first three months of ~~$3.2 million. The third quarter decrease was partially offset by a $7.6~~2022 of $18 million ~~increase in investment income related~~compared to ~~an increase in unallocated invested assets and higher investment yields, primarily due to a higher level~~gains of ~~variable investment income. The decrease~~$144 million for the ~~first nine months is primarily due to a decrease of $43.9 million~~prior year, lower unrealized gains on limited partnerships and changes in allowances and impairments on mortgage loans and available for sale securities. In addition, investment related gains (losses), net, mainly related to an increase in other-than-temporary impairments on fixed maturity securities and other impairment charges of $12.9 million and a reduction in net gains on the sale of investments of $25.2 million. The decrease for the first ~~nine~~three months ~~was partially offset by~~of 2021 includes an ~~increase~~adjustment to investments in limited partnerships considered to be investment companies, which should have been recognized in prior periods, of ~~$27.0~~$70 million ~~in investment income related~~ to ~~an increase in unallocated invested assets and higher investment yields, primarily due to a higher level of variable investment income.~~

~~Total benefits and expenses increased by $7.1 million, or 12.2%, and $20.6 million, or 13.1%, for~~adjust the ~~three and nine months ended September 30, 2017, as compared~~carrying value from cost less impairments to the ~~same periods in 2016. The increase of total benefits and expenses in~~fair value approach, using the third quarter is primarily due to a $13.2 million increase in other operating expenses, primarily related to compensation and consulting expenses, partially offset by a reduction in interest expense of $6.2 million. The increase in total benefits and expenses in the first nine months was primarily due to an increase in interest expense and other operating expenses offset by an increase in other insurance income, related to the offset to capital charges allocated to the operating segments. The increase in interest expense in the first nine months is primarily due to the issuance of $800.0 million in long-term debt in June 2016, which was partially offset by the repayment of $300.0 million of long-term debt in 2017, and a lower reduction in tax-related interest expense primarily resulting from settlement with the taxing authority in 2016.net asset value (“NAV”) per share or its equivalent.

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Liquidity and Capital Resources

Overview

The Company believes that cash flows from the source of funds available to it will provide sufficient cash flows for the next twelve months to satisfy the current liquidity requirements of ~~RGA, Inc. and its subsidiaries~~the Company under various scenarios that include the potential risk of early recapture of reinsurance treaties, market events and higher than expected ~~claims.~~claims associated with COVID-19. The Company is currently holding higher cash and cash equivalents levels in response to COVID-19. The Company performs periodic liquidity stress testing to ensure its asset portfolio includes sufficient high quality liquid assets that could be utilized to bolster its liquidity position under stress scenarios. These assets could be utilized as collateral for secured borrowing transactions with various third parties or by selling the securities in the open market if needed. The Company’s liquidity requirements have been and will continue to be funded through net cash flows from operations. However, in the event of significant unanticipated cash requirements beyond normal liquidity needs, the Company has multiple liquidity alternatives available based on market conditions and the amount and timing of the liquidity need. These alternatives include ~~borrowings under committed credit facilities, secured borrowings, the ability to issue long-term debt, preferred securities or common equity and, if necessary,~~ the sale of invested assets subject to market ~~conditions.~~conditions, borrowings under committed credit facilities, secured borrowings, and if necessary issuing long-term debt, preferred securities or common equity.

Current Market Environment

The ~~current interest rate environment in select markets, primarily the U.S. and Canada, continues to negatively affect the Company’s earnings. However, the~~ Company’s average investment yield, excluding spread related business, ~~has begun to increase, which~~ for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022, was ~~4.61%~~5.29%, 838 basis points ~~above~~below the same period in ~~2016.~~2021 due to lower variable investment income. The Company’s insurance liabilities, in particular its annuity products, are sensitive to changing market factors. Gross unrealized gains on fixed maturity ~~and equity~~ securities available-for-sale ~~increased~~decreased from ~~$2,246.5 million~~$5.3 billion at December 31, ~~2016~~2021, to ~~$2,651.5 million~~$2.2 billion at ~~September 30, 2017. Gross~~March 31, 2022, due to tightening credit spreads. Additionally, gross unrealized losses ~~decreased~~increased from ~~$374.9 million~~$0.3 billion at December 31, ~~2016~~2021, to ~~$163.2 million~~$2.1 billion at ~~September 30, 2017.~~March 31, 2022.

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The Company continues to be in a position to hold any investment security showing an unrealized loss until recovery, provided it remains comfortable with the credit of the issuer. ~~As indicated above, gross unrealized gains on investment securities of $2,651.5 million remain well in excess of gross unrealized losses of $163.2 million as of September 30, 2017.~~ The Company does not rely on short-term funding or commercial paper and to date it has experienced no liquidity pressure, nor does it anticipate such pressure in the foreseeable future.

The Company projects its reserves to be sufficient, and it would not expect to write down deferred acquisition costs or be required to take any actions to augment capital, even if interest rates remain at current levels for the next five years, assuming all other factors remain constant. While the Company has felt the pressures of sustained low interest rates and volatile equity markets and may continue to do so, its business and results of operations are not overly sensitive to these risks. Mortality and morbidity risks continue to be the most significant risk for the Company. Although management believes the Company’s current capital base is adequate to support its business at current operating levels, it continues to monitor new business opportunities and any associated new capital needs that could arise from the changing financial landscape.

The Holding Company

RGA is an insurance holding company whose primary uses of liquidity include, but are not limited to, the immediate capital needs of its operating companies, dividends paid to its shareholders, repurchase of common stock and interest payments on its indebtedness. The primary sources of RGA’s liquidity include proceeds from its capital-raising efforts, interest income on undeployed corporate investments, interest income received on surplus notes with RGA Reinsurance ~~RCM~~Company (“RGA Reinsurance”), Reinsurance Company of Missouri, Incorporated (“RCM”) and Rockwood ReReinsurance Company (“Rockwood Re”) and dividends from operating subsidiaries. As the Company continues its ~~expansion~~growth efforts, RGA will continue to be dependent upon these sources of liquidity. The following tables provide comparative information for RGA (dollars in ~~thousands)~~millions):


	Three months ended March 31,
		2022		2021
Interest expense		$	41	$	52
Capital contributions to subsidiaries		7		4
Dividends to shareholders		49		48
Purchase of common stock		25		—
Interest and dividend income		108		32

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Interest expense $ 44,697
$ 50,826
$ 132,018
$ 119,700
Capital contributions to subsidiaries 10,000
46,002
28,500
87,002
Dividends to shareholders 32,271
26,288
85,086
74,034
Interest and dividend income 23,635
227,819
75,916
283,712
Issuance of unaffiliated debt —
—
—
799,984

September 30, 2017 December 31, 2016
Cash and invested assets $ 862,480
$ 1,443,755


	March 31, 2022		December 31, 2021
Cash and invested assets	$	511	$	621

See Item 15, Schedule II -– “Condensed Financial Information of the Registrant” in the ~~2016~~2021 Annual Report for additional financial information related to RGA.

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The undistributed earnings of substantially all of the Company’s foreign subsidiaries have been reinvested indefinitely in those non-U.S. operations, as described in Note 9 -– “Income Tax” ofin the Notes to Consolidated Financial Statements in the ~~2016~~2021 Annual Report. ~~Under current tax laws, should~~As U.S. Tax Reform generally eliminates U.S. federal income taxes on dividends from foreign subsidiaries, the Company ~~repatriate such earnings, it may be subject~~does not expect to ~~additional U.S.~~incur material income taxes ~~and foreign withholding taxes.~~if these funds are repatriated.

RGA endeavors to maintain a capital structure that provides financial and operational flexibility to its subsidiaries, credit ratings that support its competitive position in the financial services marketplace, and shareholder returns. As part of the Company’s capital deployment strategy, isit has in recent years repurchased shares of RGA common stock and paid dividends to RGA shareholders, as authorized by the board of directors.

On January 24, 2019, RGA’s ~~current~~board of directors authorized a share repurchase program ~~which~~for up to $400 million of RGA’s outstanding common stock. During the three months ended March 31, 2022, RGA repurchased 219,116 shares of common stock under this program for $25 million.

On February 25, 2022, RGA’s board of directors authorized a share repurchase program for up to $400 million of RGA’s outstanding common stock. The authorization was ~~approved by~~effective immediately and does not have an expiration date. In connection with this authorization, the board of directors terminated the stock repurchase authority granted in ~~January 2017, authorizes~~2019. During the three months ended March 31, 2022, RGA did not repurchase ~~of up to $400.0 million~~any shares of common ~~stock.~~ stock under this program.

The pace of repurchase activity depends on various factors such as the level of available cash, an evaluation of the costs and benefits associated with alternative uses of excess capital, such as acquisitions and in force reinsurance transactions, and RGA’s stock price.

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Details underlying dividend and share repurchase program activity were as follows (in ~~thousands,~~millions, except share data):


	Three months ended March 31,
	2022		2021
Dividends to shareholders	$	49	$	48
Purchase of common stock (1)	25		—
Total amount paid to shareholders	$	74	$	48

Number of common shares purchased (1)	219,116		—
Average price per share	$	114.09	$	—

Nine months ended September 30,
2017 2016
Dividends to shareholders $ 85,086
$ 74,034
Repurchases of treasury stock 26,897
116,522
Total amount paid to shareholders $ 111,983
$ 190,556

Number of shares repurchased 208,680
1,356,892
Average price per share $ 128.89
$ 85.87
(1)Excludes shares utilized to execute and settle certain stock incentive awards.

In ~~October 2017,~~April 2022, RGA’s board of directors declared a quarterly dividend of ~~$0.50~~$0.73 per share. All future payments of dividends are at the discretion of RGA’s board of directors and will depend on the Company’s earnings, capital requirements, insurance regulatory conditions, operating conditions, and other such factors as the board of directors may deem relevant. The amount of dividends that RGA can pay will depend in part on the operations of its reinsurance subsidiaries. See Note 3 -– “Equity” in the Notes to Condensed Consolidated Financial Statements for information on the Company’s share repurchase program.

Debt

Certain of the Company’s debt agreements contain financial covenant restrictions related to, among others, liens, the issuance and disposition of stock of restricted subsidiaries, minimum requirements of consolidated net worth, maximum ratios of debt to capitalization and change of control provisions. The Company is required to maintain a minimum consolidated net worth, as defined in the debt agreements, of ~~$3.5~~$5.3 billion, calculated as of the last day of each fiscal quarter. Also, consolidated indebtedness, calculated as of the last day of each fiscal quarter, cannot exceed 35% of the sum of the Company’s consolidated indebtedness plus adjusted ~~consolidated~~RGA Inc’s stockholders’ equity. A material ongoing covenant default could require immediate payment of the amount due, including principal, under the various agreements. Additionally, the Company’s debt agreements contain ~~cross-default~~cross-acceleration covenants, which would make outstanding borrowings immediately payable in the event of a material uncured covenant default under any of the agreements, including, but not limited to, non-payment of indebtedness when due for an amount in excess of ~~$100.0 million,~~the amounts set forth in those agreements, bankruptcy proceedings, or any other event ~~which~~that results in the acceleration of the maturity of indebtedness.

As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~,2021, the Company had ~~$2.8~~$3.7 billion, ~~and $3.1 billion, respectively,~~ in outstanding borrowings under its debt agreements and was in compliance with all covenants under those agreements. As of March 31, 2022 and December 31, 2021, the average interest rate on long-term debt outstanding was 4.42%. The ability of the Company to make debt principal and interest payments depends on the earnings and surplus of subsidiaries, investment earnings on undeployed capital proceeds, available liquidity at the holding company, and the Company’s ability to raise additional funds.

The Company enters into derivative agreements with counterparties that reference either the Company’s debt rating or its financial strength rating. If either rating is downgraded in the future, it could trigger certain terms in the Company’s derivative agreements, which could negatively affect overall liquidity. For the majority of the Company’s derivative agreements, there is a termination event ~~at the Company’s option,~~ should the long-term senior debt ratings drop below either BBB+ (S&P) or Baa1 (Moody’s) or the financial strength ratings drop below either A- (S&P) or A3 (Moody’s).

The Company may borrow up to ~~$850.0~~$850 million in cash and obtain letters of credit in multiple currencies on aits revolving credit facility that ~~expires~~matures in ~~September 2019.~~August 2023. As of ~~September 30, 2017~~,March 31, 2022, the Company had no cash borrowings outstanding and ~~$97.2~~$21 million in issued, but undrawn, letters of credit under this facility. As

On December 13, 2021, RGA Reinsurance issued 4.00% Surplus Notes due in 2051, with a face amount of ~~September 30, 2017~~$500 million. The net proceeds were approximately $494 million and ~~December 31, 2016, the average interest rate on short-term and long-term debt outstanding was 5.15% and 5.16%, respectively.~~

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will be used for general corporate purposes.

Based on the historic cash flows and the current financial results of the Company, management believes RGA’s cash flows will be sufficient to enable RGA to meet its obligations for at least the next 12 months.

Credit and Committed Facilities

At ~~September 30, 2017,~~March 31, 2022, the Company maintained an ~~$850.0~~$850 million syndicated revolving credit facility ~~and certain~~in addition to committed letter of credit facilities aggregating ~~$1,349.1~~$929 million. See Note 13 -– “Debt” in the Notes to Consolidated Financial Statements in the ~~2016~~2021 Annual Report for further information about these facilities.

The Company has obtained bank letters of credit in favor of various affiliated and unaffiliated insurance companies from which the Company assumes business. These letters of credit represent guarantees of performance under the reinsurance agreements and allow ceding companies to take statutory reserve credits. Certain of these letters of credit contain financial covenant restrictions similar to those described in the “Debt” discussion above. At ~~September 30, 2017,~~March 31, 2022, there were approximately ~~$133.4~~$53 million

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of outstanding bank letters of credit in favor of third parties. Additionally, in accordance with applicable regulations, the Company utilizes letters of credit to secure statutory reserve credits when it retrocedes business to its affiliated subsidiaries. The Company cedes business to its affiliates to help reduce the amount of regulatory capital required in certain jurisdictions, such as the U.S. and the UK. The Company believes the capital required to support the business in the affiliates reflects more realistic expectations than the original jurisdiction of the business, where capital requirements are often considered to be quite conservative. As of ~~September 30, 2017, $1.5~~March 31, 2022, $1.7 billion in letters of credit from various banks were outstanding, but undrawn, backing reinsurance between the various subsidiaries of the Company.

Cash Flows

The Company’s principal cash inflows from its reinsurance operations include premiums and deposit funds received from ceding companies. The primary liquidity concerns with respect to these cash flows are early recapture of the reinsurance contract by the ceding company and lapses of annuity products reinsured by the Company. The Company’s principal cash inflows from its invested assets result from investment income and the maturity and sales of invested assets. The primary liquidity ~~concern~~concerns with respect to these cash inflows relates to the risk of default by debtors and interest rate volatility. The Company manages these risks very closely. See “Investments” ~~and “Interest Rate Risk”~~ below.

Additional sources of liquidity to meet unexpected cash outflows in excess of operating cash inflows and current cash and equivalents on hand ~~include selling short-term investments or fixed maturity securities and~~also includes drawing funds under a revolving credit facility, under which the Company had availability of ~~$752.8~~$829 million as of ~~September 30, 2017.~~March 31, 2022. The Company also has ~~$1.1 billion~~$742 million of funds available through collateralized borrowings from the FHLB as of ~~September 30, 2017.~~March 31, 2022. As of ~~September 30, 2017,~~March 31, 2022, the Company could have borrowed these additional amounts without violating any of its existing debt covenants.

The Company’s principal cash outflows relate to the payment of claims liabilities, interest credited, operating expenses, income taxes, dividends to shareholders, purchases of treasury stock, and principal and interest under debt and other financing obligations. The Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance enterprises or reinsurers under excess coverage and coinsurance contracts (See Note 2 ~~“Summary of Significant~~– “Significant Accounting ~~Policies”~~Policies and Pronouncements” in the Notes to Consolidated Financial Statements in the ~~2016~~2021 Annual Report). The Company performs annual financial reviews of its retrocessionaires to evaluate financial stability and performance. The Company has never experienced a material default in connection with retrocession arrangements, nor has it experienced any difficulty in collecting claims recoverable from retrocessionaires; however, no assurance can be given as to the future performance of such retrocessionaires nor to the recoverability of future claims. The Company’s management believes its cash and cash equivalents along with its current sources of liquidity are adequate to meet its cash requirements for the next 12 ~~months.~~

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months, despite the uncertainty associated with the pandemic.

Summary of Primary Sources and Uses of Liquidity and Capital

The Company’s primary sources and uses of liquidity and capital are summarized as follows:


		For the three months ended March 31,
		2022		2021
		(Dollars in millions)
Sources:
	Net cash provided by operating activities	$	163	$	2,366





	Net deposits to investment-type policies and contracts	1,864		—
	Issuance of preferred interests by subsidiary	90		—

	Total sources	2,117		2,366

Uses:
	Net cash used in investing activities	2,235		2,492
	Dividends to stockholders	49		48
	Repayment of collateral finance and securitization notes	14		42
	Principal payments of long-term debt	1		1
	Purchases of treasury stock	27		1
	Change in cash collateral for derivative positions and other arrangements	6		25
	Change in deposit asset on reinsurance	3		—
	Net withdrawals from investment-type policies and contracts	—		26
	Effect of exchange rate changes on cash	21		17
	Total uses	2,356		2,652
Net change in cash and cash equivalents		$	(239)	$	(286)

For the nine months ended September 30,
2017 2016
(Dollars in thousands)
Sources:
Net cash provided by operating activities $ 1,104,499
$ 1,019,872
Proceeds from long-term debt issuance —
799,984
Exercise of stock options, net 4,450
11,752
Change in cash collateral for derivative positions and other arrangements —
24,749
Cash provided by changes in universal life and other
investment type policies and contracts 438,774
487,808
Effect of exchange rate changes on cash 43,699
25,436
Total sources 1,591,422
2,369,601

Uses:
Net cash used in investing activities 1,056,334
2,247,406
Dividends to stockholders 85,086
74,034
Repayment of collateral finance and securitization notes 56,637
60,971
Debt issuance costs —
9,026
Principal payments of long-term debt 301,927
1,850
Purchases of treasury stock 41,360
121,896
Change in cash collateral for derivatives and other arrangements 46,206
—
Total uses 1,587,550
2,515,183
Net change in cash and cash equivalents $ 3,872
$ (145,582 )

Cash Flows from Operations - – The principal cash inflows from the Company’s reinsurance activities come from premiums, investment and fee income, annuity considerations and deposit funds. The principal cash outflows relate to the liabilities associated with various life and health insurance, annuity and disability products, operating expenses, income tax payments and

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interest on outstanding debt obligations. The primary liquidity concern with respect to these cash flows is the risk of shortfalls in premiums and investment income, particularly in periods with abnormally high claims levels.

Cash Flows from Investments - – The principal cash inflows from the Company’s investment activities come from repayments of principal on invested assets, proceeds from maturities of invested assets, sales of invested assets and settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments, issuances of policy loans and settlements of freestanding derivatives. The Company typically has a net cash outflow from investing activities because cash inflows from insurance operations are reinvested in accordance with its asset/liability management discipline to fund insurance liabilities. The Company closely monitors and manages these risks through its credit risk management process. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market ~~disruption.~~disruption, which could make it difficult for the Company to sell investments.

Financing Cash Flows - – The principal cash inflows from the Company’s financing activities come from issuances of RGA debt and equity securities, and deposit funds associated with universal life and other investment type policies and contracts. The principal cash outflows come from repayments of debt, payments of dividends to stockholders, purchases of treasury stock, and withdrawals associated with universal life and other investment type policies and contracts. A primary liquidity concern with respect to these cash flows is the risk of early contractholder and policyholder withdrawal.

Contractual Obligations

There were no material changes in the Company’s contractual obligations from those ~~previously reported.~~reported in the 2021 Annual Report.

Asset / Liability Management

The Company actively manages its cash and invested assets using an approach that is intended to balance quality, diversification, asset/liability matching, liquidity and investment return. The goals of the investment process are to optimize after-tax, risk-adjusted investment income and after-tax, risk-adjusted total return while managing the assets and liabilities on a cash flow and duration basis.

The Company has established target asset portfolios for ~~each major insurance product,~~its operating segments, which represent the investment strategies intended to profitably fund its liabilities within acceptable risk parameters. These strategies include objectives and limits for effective duration, yield curve sensitivity and convexity, liquidity, asset sector concentration and credit quality.

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The Company’s asset-intensive products are primarily supported by investments in fixed maturity securities reflected on the Company’s balance sheet and under funds withheld arrangements with the ceding company. Investment guidelines are established to structure the investment portfolio based upon the type, duration and behavior of products in the liability portfolio so as to achieve targeted levels of profitability. The Company manages the asset-intensive business to provide a targeted spread between the interest rate earned on investments and the interest rate credited to the underlying interest-sensitive contract liabilities. The Company periodically reviews models projecting different interest rate scenarios and their effect on profitability. Certain of these asset-intensive agreements, primarily in the U.S. and Latin America Financial Solutions operating segment, are generally funded by fixed maturity securities that are withheld by the ceding company.

The Company’s liquidity position (cash and cash equivalents and ~~short-term~~short term investments) was ~~$1,285.2 million and $1,277.4 million~~$3.0 billion at ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, respectively. Cash and cash equivalents includes cash collateral received from derivative counterparties of $174.1 million and $254.5 million as of September 30, 2017 and December 31, 2016, respectively. This unrestricted cash collateral is included in cash and cash equivalentsGiven the uncertainty associated with the COVID-19 pandemic and the ~~obligation to return it is included in other liabilities~~related volatility in the ~~Company’s condensed consolidated balance sheets.~~financial markets, the Company has increased its liquidity position. Liquidity needs are determined from valuation analyses conducted by operational units and are driven by product portfolios. Periodic evaluations of demand liabilities and short-term liquid assets are designed to adjust specific portfolios, as well as their durations and maturities, in response to anticipated liquidity needs.

See “Securities Borrowing, Lending and Other” in Note 4 -– “Investments” in the Notes to Condensed Consolidated Financial Statements for information related to the Company’s securities borrowing, lending and repurchase/reverse repurchase programs. In addition to its security agreements with third parties, certain RGA’s subsidiaries have entered into intercompany securities lending agreements to more efficiently source securities for lending to third parties and to provide for more efficient regulatory capital management.

The Company is a member of the FHLB and holds ~~$67.9~~$58 million of FHLB common stock, which is included in other invested assets on the Company’s condensed consolidated balance sheets. ~~Membership provides the Company access to borrowing arrangements (“advances”) and funding agreements, discussed below, with the FHLB.~~ The Company did not have any advances from the FHLB at September 30, 2017 and December 31, 2016. The Company’s average outstanding balance of advances was $8.2 million and $17.0 million during the third quarter and the first nine months of 2017, respectively, and was $0.5 million and $29.5 million during the third quarter and the first nine months of 2016, respectively. Interest on advances is reflected in interest expense on the Company’s condensed consolidated statements of income.

~~In addition, the Company~~ has ~~also~~ entered into funding agreements with the FHLB under guaranteed investment contracts whereby the Company has issued the funding agreements in exchange for cash and for which the FHLB has been granted a blanket lien on the Company’s commercial and residential mortgage-backed securities and commercial mortgage loans used to collateralize the Company’s obligations under the funding agreements. The Company maintains control over these pledged assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. The funding agreements and the related security agreements represented by this blanket lien provide that upon any event of default by the Company, the FHLB’s recovery is limited to the amount of the Company’s liability under the

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outstanding funding agreements. The amount of the Company’s liability for the funding agreements with the FHLB under guaranteed investment contracts was $1.1 billion and $1.4 billion ~~and $1.1 billion~~ at ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, respectively, which is included in interest sensitive contract liabilities on the Company’s condensed consolidated balance sheets. The advances on these agreements are collateralized primarily by commercial and residential mortgage-backed securities, commercial mortgage loans, and U.S. Treasury and government agency securities. The amount of collateral exceeds the liability and is dependent on the type of assets collateralizing the guaranteed investment contracts.

Investments

Management of Investments

The Company’s investment and derivative strategies involve matching the characteristics of its reinsurance products and other ~~obligations and to seek~~obligations. The Company seeks to closely approximate the interest rate sensitivity of the assets with estimated interest rate sensitivity of the reinsurance liabilities. The Company achieves its income objectives through strategic and tactical asset allocations, applying security and derivative strategies within an asset/liability ~~management~~ and disciplined risk management ~~framework.~~frameworks. Derivative strategies are employed within the Company’s risk management framework to help manage duration, currency, and other risks in assets and/or liabilities and to replicate the credit characteristics of certain assets. ~~For a discussion of the Company’s risk management process see “Market and Credit Risk” in the “Enterprise Risk Management” section below.~~

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The Company’s portfolio management groups work with the Enterprise Risk Management function to develop the investment policies for the assets of the Company’s domestic and international investment portfolios. All investments held by the Company, directly or in a funds withheld at interest reinsurance arrangement, are monitored for conformance with the Company’s stated investment policy limits as well as any limits prescribed by the applicable jurisdiction’s insurance laws and regulations. See Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements for additional information regarding the Company’s investments.

Portfolio Composition

The Company had total cash and invested assets of ~~$50.9~~$78.6 billion and ~~$46.0~~$81.5 billion ~~at September 30, 2017~~as of March 31, 2022 and December 31, ~~2016,~~2021, respectively, as illustrated below (dollars in ~~thousands)~~millions):


	March 31, 2022		% of Total		December 31, 2021		% of Total
Fixed maturity securities, available-for-sale	$	57,922	73.6	%	$	60,749	74.6	%
Equity securities	139		0.2		151		0.2
Mortgage loans on real estate	6,535		8.3		6,283		7.7
Policy loans	1,221		1.6		1,234		1.5
Funds withheld at interest	6,737		8.6		6,954		8.5
Short-term investments	315		0.4		87		0.1
Other invested assets	3,033		3.9		3,070		3.8
Cash and cash equivalents	2,709		3.4		2,948		3.6
Total cash and invested assets	$	78,611	100.0	%	$	81,476	100.0	%

September 30, 2017 % of Total December 31, 2016 % of Total
Fixed maturity securities, available-for-sale $ 36,381,742
71.5 % $ 32,093,625
69.6 %
Mortgage loans on real estate 4,322,329
8.5
3,775,522
8.2
Policy loans 1,340,146
2.6
1,427,602
3.1
Funds withheld at interest 6,020,336
11.8
5,875,919
12.8
Short-term investments 80,582
0.2
76,710
0.2
Other invested assets 1,532,523
3.0
1,591,940
3.5
Cash and cash equivalents 1,204,590
2.4
1,200,718
2.6
Total cash and invested assets $ 50,882,248
100.0 % $ 46,042,036
100.0 %

Investment Yield

The following table presents consolidated average invested assets at amortized cost, net investment income, investment yield, variable investment income (“VII”), and investment yield excluding VII, which can vary significantly from period to period (dollars in millions). The table excludes spread related business. Spread related business is primarily associated with contracts on which the Company earns an interest rate spread between assets and liabilities. To varying degrees, fluctuations in the yield on other spread related business is generally subject to corresponding adjustments to the interest credited on the ~~liabilities (dollars in thousands).~~liabilities.


	Three months ended September 30,								Nine months ended September 30,									Three months ended March 31,
	2017			2016			Increase/ (Decrease)		2017			2016			Increase/ (Decrease)			2022			2021			Increase/ (Decrease)
Average invested assets at amortized cost	$	25,887,338		$	24,128,430		7.3	%	$	25,136,119		$	22,982,245		9.4	%	Average invested assets at amortized cost	$	35,271		$	33,367		$	1,904
Net investment income	305,632			263,111			16.2	%	863,724			777,157			11.1	%	Net investment income	$	457		$	463		$	(6)
Investment yield (ratio of net investment income to average invested assets)	4.81		%	4.43		%	38 bps		4.61		%	4.53		%	8 bps
Annualized investment yield (ratio of net investment income to average invested assets at amortized cost)																	Annualized investment yield (ratio of net investment income to average invested assets at amortized cost)	5.29		%	5.67		%	(38) bps
VII (included in net investment income)																	VII (included in net investment income)	$	141		$	162		$	(21)
Annualized investment yield excluding VII (ratio of net investment income, excluding VII, to average invested assets, excluding assets with only VII, at amortized cost)																	Annualized investment yield excluding VII (ratio of net investment income, excluding VII, to average invested assets, excluding assets with only VII, at amortized cost)	3.80		%	3.79		%	1 bp

Investment yield ~~increased~~decreased for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022, in comparison to the same period in the prior year, primarily due to ~~increased~~decreased variable income from ~~bond make-whole premiums and~~ limited ~~partnership and~~partnerships partially offset by increased variable income from real estate joint ~~venture investments, both of~~ventures, which are included in other invested assets on the condensed consolidated balance sheets.

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Fixed Maturity ~~and Equity~~ Securities Available-for-Sale

See “Fixed Maturity ~~and Equity~~ Securities Available-for-Sale” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements for tables that provide the amortized cost, allowance for credit losses, unrealized gains and losses and estimated fair value of ~~fixed maturity and equity~~these securities ~~and the other-than-temporary impairments in AOCI~~ by ~~sector~~type as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016.~~2021.

The ~~Company’s~~Company holds various types of fixed maturity securities ~~are invested primarily in~~available-for-sale and classifies them as corporate ~~bonds, mortgage-~~securities (“Corporate”), Canadian and Canadian provincial government securities (“Canadian government”), residential mortgage-backed securities (“RMBS”), asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), U.S. government and agencies (“U.S. government”), state and political subdivisions, and other foreign government, supranational and foreign ~~government~~government-sponsored enterprises (“Other foreign government”). RMBS, ABS, and CMBS are collectively “structured securities.” As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, approximately ~~95.7%~~93.8% and ~~95.0%~~94.0%, respectively, of the Company’s consolidated investment portfolio of fixed maturity securities were investment grade.

Important factors in the selection of investments include diversification, quality, yield, call protection and total rate of return potential. The relative importance of these factors is determined by market conditions and the underlying reinsurance liability and existing portfolio characteristics. The Company owns floating rate securities that represent approximately 6.3% and 5.3% of the total fixed maturity securities as of March 31, 2022 and December 31, 2021, respectively. These investments have a higher degree of income variability than the other fixed income holdings in the portfolio due to fluctuations in interest payments. The Company holds floating rate investments to match specific floating rate liabilities primarily reflected in the condensed consolidated balance sheets as collateral finance notes, as well as to enhance asset management strategies.

The largest asset class in which fixed maturity securities were invested was corporate securities, which represented approximately ~~61.9% and 61.1%~~62.8% of total fixed maturity securities as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016, respectively.~~2021. See “Corporate Fixed Maturity Securities” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements for tables showing the major ~~industry~~sector types, which comprise the corporate fixed maturity holdings ~~at September 30, 2017~~as of March 31, 2022 and December 31, ~~2016.~~

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2021.

As of ~~September 30, 2017,~~March 31, 2022 and December 31, 2021, the Company’s investments in Canadian ~~and Canadian provincial~~ government securities represented ~~11.0%~~7.6% and 8.1%, respectively, of the fair value of total fixed maturity ~~securities compared to 11.4% of the fair value of total fixed maturity securities at December 31, 2016.~~securities. These assets are primarily high quality, long duration provincial ~~strips,~~strip bonds, the valuation of which is closely linked to the interest rate curve. These assets are longer in duration and held primarily for asset/liability management to meet Canadian regulatory requirements. See “Fixed Maturity and Equity Securities Available-for-Sale” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements for tables showing the various sectors as of September 30, 2017 and December 31, 2016.

The Company references rating agency designations in some of its investments disclosures. These designations are based on the ratings from nationally recognized statistical rating organizations, primarily ~~those assigned by S&P. In instances where a~~Moody’s, S&P ~~rating is not available the Company references the rating provided by Moody’s~~ and in the absence of both the Company will assign equivalent ratings based on information from the NAIC. The NAIC assigns securities quality ratings and uniform valuations called “NAIC Designations” which are used by insurers when preparing their U.S. statutory filings.Fitch. Structured securities ~~(mortgage-backed and asset-backed securities)~~ held by the Company’s insurance subsidiaries that maintain the NAIC statutory basis of accounting utilize the NAIC rating methodology. The NAIC assigns designations to publicly traded as well as privately placed securities. The designations assigned by the NAIC range from class 1 to class 6, with designations in classes 1 and 2 generally considered investment grade (BBB or higher rating agency designation). NAIC designations in classes 3 through 6 are generally considered below investment grade (BB or lower rating agency designation). If no rating is available from a rating agency or the NAIC, then an internally developed rating is used.

The quality of the Company’s available-for-sale fixed maturity securities portfolio, as measured at fair value and by the percentage of fixed maturity securities invested in various ratings categories, relative to the entire available-for-sale fixed maturity ~~security~~securities portfolio, ~~at September 30, 2017~~as of March 31, 2022 and December 31, ~~2016~~2021 was as follows (dollars in ~~thousands)~~millions):


		March 31, 2022						December 31, 2021
NAIC Designation	Rating Agency Designation	Amortized Cost		Estimated Fair Value		% of Total		Amortized Cost		Estimated Fair Value		% of Total
1	AAA/AA/A	$	34,434	$	34,741	60.0	%	$	33,540	$	36,725	60.5	%
2	BBB	19,691		19,574		33.8		18,684		20,379		33.5
3	BB	2,821		2,769		4.8		2,620		2,668		4.4
4	B	730		720		1.2		876		863		1.4
5	CCC and lower	127		92		0.2		96		79		0.1
6	In or near default	46		26		—		57		35		0.1
	Total	$	57,849	$	57,922	100.0	%	$	55,873	$	60,749	100.0	%

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September 30, 2017 December 31, 2016
NAIC
  Designation

Rating Agency
Designation
Amortized Cost
Estimated
Fair Value
% of Total      Amortized Cost
Estimated
     Fair Value
% of Total
1 AAA/AA/A $ 22,095,642
$ 23,989,873
66.0 % $ 19,813,653
$ 21,369,081
66.5 %
2 BBB 10,233,331
10,792,989
29.7
8,834,469
9,162,483
28.5
3 BB 1,107,086
1,143,449
3.1
944,839
955,735
3.0
4 B 360,643
374,478
1.0
414,087
411,138
1.3
5 CCC and lower 86,984
74,093
0.2
187,744
177,481
0.6
6 In or near default 6,282
6,860
—
16,995
17,707
0.1
Total $ 33,889,968
$ 36,381,742
100.0 % $ 30,211,787
$ 32,093,625
100.0 %

The Company’s fixed maturity portfolio includes structured securities. The following table shows the types of structured securities the Company held ~~at September 30, 2017~~as of March 31, 2022 and December 31, ~~2016~~2021 (dollars in ~~thousands)~~millions):

September 30, 2017 December 31, 2016
Amortized Cost
Estimated
Fair Value
Amortized Cost
Estimated
Fair Value
Residential mortgage-backed securities:
Agency $ 891,508
$ 917,589
$ 579,686
$ 602,549
Non-agency 753,871
761,716
678,353
676,027
Total residential mortgage-backed securities 1,645,379
1,679,305
1,258,039
1,278,576
Commercial mortgage-backed securities 1,293,296
1,313,322
1,342,440
1,363,654
Asset-backed securities 1,680,918
1,694,568
1,443,822
1,429,344
Total $ 4,619,593
$ 4,687,195
$ 4,044,301
$ 4,071,574


	March 31, 2022						December 31, 2021
	Amortized Cost		Estimated Fair Value		% of Total		Amortized Cost		Estimated Fair Value		% of Total
RMBS:
Agency	$	538	$	537	8.3	%	$	551	$	582	8.4	%
Non-agency	445		429		6.6		469		468		6.8
Total RMBS	983		966		14.9		1,020		1,050		15.2
ABS:
Collateralized loan obligations (“CLOs”)	1,659		1,630		25.1		1,761		1,752		25.4
ABS, excluding CLOs	2,256		2,116		32.5		2,263		2,253		32.6
Total ABS	3,915		3,746		57.6		4,024		4,005		58.0
CMBS	1,829		1,786		27.5		1,790		1,849		26.8
Total	$	6,727	$	6,498	100.0	%	$	6,834	$	6,904	100.0	%

The ~~residential mortgage-backed securities include~~Company’s RMBS portfolio includes agency-issued pass-through securities and collateralized mortgage obligations. ~~A majority of the agency-issued~~Agency-issued pass-through securities are guaranteed or otherwise supported by the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, or the Government National Mortgage Association. The principal risks inherent in holding ~~mortgage-backed securities~~RMBS are prepayment and extension risks, which will affect the timing of when cash will be received and are dependent on the level of mortgage interest rates. Prepayment risk is the unexpected increase in principal payments from the expected, primarily as a result of owner refinancing. Extension risk relates to the unexpected slowdown in principal payments from the expected. In addition, non-agency ~~mortgage-backed securities~~RMBS face credit risk should the borrower be unable to pay the contractual interest or principal on their obligation. The Company monitors its mortgage-backed securities to mitigate exposure to the cash flow uncertainties associated with these risks.

~~Asset-backed securities include credit card~~The Company’s ABS portfolio primarily consists of CLOs, aircraft, and ~~automobile receivables, student loans, home equity loans and collateralized debt obligations (primarily collateralized loan obligations).~~single-family rentals. The ~~Company owns floating rate securities that represent approximately~~

~~Table of Contents~~

14.0% and 12.9% of the total fixed maturity securities at September 30, 2017 and December 31, 2016, respectively. These investments have a higher degree of income variability than the other fixed income holdings in the portfolio due to the floating rate nature of the interest payments. The Company holds these investments to match specific floating rate liabilities primarily reflected in the condensed consolidated balance sheets as collateral finance notes, as well as to enhance asset management strategies. In addition to the risks associated with floating rate securities, principal risks in holding ~~asset-backed securities~~ABS are structural, credit, ~~and~~ capital market and interest rate risks. Structural risks include the securities’ cash flow priority in the capital structure and the inherent prepayment sensitivity of the underlying collateral. Credit risks include the adequacy and ability to realize proceeds from the collateral. Credit risks are mitigated by credit enhancements ~~which~~that include excess spread, over-collateralization and subordination. Capital market risks include general level of interest rates and the liquidity for these securities in the marketplace.

The Company’s CMBS portfolio primarily consists of large pool securitizations that are diverse by property type, borrower and geographic dispersion. The principal risks in holding CMBS are structural and credit risks. Structural risks include the securities’ cash flow priority in the capital structure and the inherent prepayment sensitivity of the underlying collateral. Credit risks include the adequacy and ability to realize proceeds from the collateral. The Company focuses on investment grade rated tranches that provide additional credit support beyond the equity protection in the underlying loans. These assets are viewed as an attractive alternative to other fixed income asset classes.

As of March 31, 2022 and December 31, 2021, the Company had $2,066 million and $349 million, respectively, of gross unrealized losses related to its fixed maturity securities. The Company monitors its fixed maturity ~~and equity~~ securities to determine impairments in value and evaluates factors such as financial condition of the issuer, payment performance, ~~the length of time and the extent to which the market value has been below amortized cost,~~ compliance with covenants, general market and industry sector conditions, current intent and ability to hold securities, and various other subjective factors. Based on management’s judgment, an allowance for credit losses in the amount that fair value is less than the amortized cost is recorded for securities determined to have an other-than-temporary impairment in value are written down to fair value. See “Investments – Other-than-Temporary Impairment” in Note 2 – “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in the 2016 Annual Report for additional information. expected credit losses.

Mortgage Loans on Real Estate

The ~~table below summarizes other-than-temporary impairments and changes in the~~Company’s mortgage loan ~~provision for the three~~portfolio consists of U.S., Canada and ~~nine months ended September 30, 2017~~UK based investments primarily in commercial offices, light industrial properties and ~~2016 (dollars in thousands).~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Impairment losses on available-for-sale securities:
Fixed maturity securities $ 390
$ —
$ 20,980
$ 34,663
Equity securities 889
—
889
—
Other impairment losses 1,469
15
7,776
2,178
Change in mortgage loan provision 977
247
1,444
(67 )
Total $ 3,725
$ 262
$ 31,089
$ 36,774

retail locations. The ~~fixed maturity impairments for the three~~mortgage loan portfolio is diversified by geographic region and nine months ended September 30, 2017 and 2016 were largely related to high-yield corporate securities. The equity impairments for the three and nine months ended September 30, 2017 were related to an equity position receivedproperty type as ~~part of a debt restructuring. In addition, other impairment losses for the three and nine months ended September 30, 2017 and 2016 are primarily due to impairments~~discussed further under “Mortgage Loans on ~~limited partnerships.~~

At September 30, 2017 and December 31, 2016, the Company had $163.2 million and $374.9 million, respectively, of gross unrealized losses related to its fixed maturity and equity securities. The distribution of the gross unrealized losses related to these securities is shown below.

September 30, 2017 December 31, 2016
Sector:
Corporate securities 59.6 % 61.6 %
Canadian and Canada provincial governments 1.5
0.9
Residential mortgage-backed securities 5.1
3.6
Asset-backed securities 3.1
6.4
Commercial mortgage-backed securities 3.3
2.1
State and political subdivisions 3.7
3.3
U.S. government and agencies 19.0
16.8
Other foreign government, supranational and foreign government-sponsored enterprises 4.7
5.3
Total 100.0 % 100.0 %
Industry:
Finance 15.3 % 20.1 %
Asset-backed 3.1
6.4
Industrial 40.1
32.9
Mortgage-backed 8.4
5.7
Government 28.9
26.3
Utility 4.2
8.6
Total 100.0 % 100.0 %

~~Table of Contents~~

~~See “Unrealized Losses for Fixed Maturity and Equity Securities Available-for-Sale”~~Real Estate” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial ~~Statements for a table that presents~~Statements. Most of the ~~total gross unrealized losses for fixed maturity and equity securities at September 30, 2017~~mortgage loans in the Company’s portfolio range in size up to $30 million, with the average mortgage loan investment as of March 31, 2022, totaling approximately $9 million.

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As of March 31, 2022 and December 31, ~~2016, respectively, where~~2021, the ~~estimated fair value had declined~~Company’s recorded investment in mortgage loans, gross of unamortized deferred loan origination fees and ~~remained below amortized cost by less than 20% or more than 20%.~~expenses and allowance for credit losses, were distributed geographically as follows (dollars in millions):


	March 31, 2022				December 31, 2021
	Recorded Investment		% of Total		Recorded Investment		% of Total
U.S. Region:
West	$	2,302	35.1	%	$	2,270	36.0	%
South	2,238		34.0		2,135		33.7
Midwest	1,187		18.0		1,166		18.4
Northeast	475		7.2		419		6.6
Subtotal - U.S.	6,202		94.3		5,990		94.7
Canada	213		3.2		193		3.0
United Kingdom	167		2.5		144		2.3
Other	1		—		2		—
Total	$	6,583	100.0	%	$	6,329	100.0	%

See “Allowance for Credit Losses and Impairments” in Note 2 – “Significant Accounting Policies and Pronouncements” of the Company’s 2021 Annual Report and “Mortgage Loans on Real Estate” in Note 4 – ��Investments” in the Notes to Condensed Consolidated Financial Statements for information regarding the Company’s policy for allowance for credit losses on mortgage loans.

Allowance for Credit Losses and Impairments

The Company’s determination of whether a decline in value ~~is other-than-temporary includes analysis of~~necessitates the ~~underlying credit and the extent and duration of a decline in value. The Company’s credit analysis~~recording of an ~~investment~~allowance for credit losses includes ~~determining~~an analysis of whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment. InSee “Allowance for Credit Losses and Impairments” in Note 2 – “Significant Accounting Policies and Pronouncements” of the Company’s ~~impairment review process,~~2021 Annual Report for additional information. The table below summarizes investment related gains (losses), net related to allowances for credit losses and impairments for the ~~duration~~three months ended March 31, 2022 and ~~severity of an unrealized loss position~~2021 (dollars in millions).


	Three months ended March 31,
		2022		2021
Change in allowance for credit losses on fixed maturity securities		$	11	$	2
Impairments on fixed maturity securities		1		—
Other impairment losses and changes in provision		—		(1)
Change in mortgage loan allowance for credit losses		2		(17)
Total		$	14	$	(16)

The change in allowance for ~~equity~~credit losses and impairments on fixed maturity securities ~~are given greater weight~~for the three months ended March 31, 2022 and ~~consideration given~~2021, was primarily related to high-yield securities. The decrease in mortgage loan allowance for credit losses for the ~~lack of contractual cash flows and~~three months ended, March 31, 2021 reflects the ~~deferability features of these securities.~~improved outlook from the COVID-19 pandemic.

See “Unrealized Losses for Fixed Maturity ~~and Equity~~ Securities Available-for-Sale” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements for tables that present the estimated fair ~~values~~value and gross unrealized losses ~~including other-than-temporary impairment losses reported in AOCI,~~ for ~~fixed maturity and equity~~ securities that have estimated fair values below amortized cost by class and grade, ~~security,~~ as well as the length of time the related ~~market~~estimated fair value has remained below amortized cost as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016.~~2021.

As of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, the Company classified approximately ~~5.9%~~9.0% and ~~6.9%~~8.5%, respectively, of its fixed maturity securities in the Level 3 category (refer to Note 6 – “Fair Value of Assets and Liabilities” in the Notes to Condensed Consolidated Financial Statements for additional information). These securities primarily consist of private placement corporate ~~securities, bank loans, Canadian provincial strips, below investment grade mortgage-backed securities~~ and ~~subprime~~ asset-backed ~~securities with inactive trading markets.~~securities.

See “Securities Borrowing, Lending and ~~Other”~~Repurchase Agreements” in Note 4 -– “Investments” in the Notes to Condensed Consolidated Financial Statements for information related to the Company’s securities borrowing, ~~repurchase~~lending and repurchase/reverse repurchase programs.

~~Mortgage Loans on Real Estate~~

Mortgage loans represented approximately 8.5% and 8.2% of the Company’s cash and invested assets as of September 30, 2017 and December 31, 2016, respectively. The Company’s mortgage loan portfolio consists of U.S. and Canada based investments primarily in commercial offices, light industrial properties and retail locations. The mortgage loan portfolio is diversified by geographic region and property type. Additional information on geographic concentration and property type can be found under “Mortgage Loans on Real Estate” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements.

As of September 30, 2017 and December 31, 2016, the Company’s mortgage loans, gross of unamortized deferred loan origination fees and expenses and valuation allowances, were distributed geographically as follows (dollars in thousands):

September 30, 2017 December 31, 2016

Recorded
Investment
% of Total
Recorded
Investment
% of Total
U.S. Region:
Pacific $ 1,304,056
30.1
$ 1,112,636
29.4 %
South Atlantic 858,474
19.8
782,509
20.7
Mountain 688,609
15.9
615,915
16.3
East North Central 529,007
12.2
422,512
11.2
West North Central 305,894
7.1
318,212
8.4
West South Central 359,680
8.3
317,194
8.4
Middle Atlantic 107,453
2.5
92,683
2.4
East South Central 97,379
2.2
57,216
1.5
New England 9,191
0.2
9,346
0.2
Subtotal - U.S. 4,259,743
98.3
3,728,223
98.5
Canada 74,254
1.7
54,984
1.5
Total $ 4,333,997
100.0 % $ 3,783,207
100.0 %

Table of Contents

Valuation allowances on mortgage loans are established based upon inherent losses expected by management to be realized in connection with future dispositions or settlement of mortgage loans, including foreclosures. The valuation allowances are established after management considers, among other things, the value of underlying collateral and payment capabilities of debtors. Any subsequent adjustments to the valuation allowances will be treated as investment gains or losses. See “Mortgage Loans on Real Estate” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements for information regarding valuation allowances and impairments.

~~Policy Loans~~

Policy loans comprised approximately 2.6% and 3.1% of the Company’s cash and invested assets as of September 30, 2017 and December 31, 2016, respectively, the majority of which are associated with one client. These policy loans present no credit risk because the amount of the loan cannot exceed the obligation due the ceding company upon the death of the insured or surrender of the underlying policy. The provisions of the treaties in force and the underlying policies determine the policy loan interest rates. The Company earns a spread between the interest rate earned on policy loans and the interest rate credited to corresponding liabilities.

Funds Withheld at Interest

~~Funds withheld at interest comprised approximately 11.8% and 12.8% of the Company’s cash and invested assets as of September 30, 2017 and December 31, 2016, respectively.~~ For reinsurance agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis, assets equal to the net statutory reserves are withheld and legally owned and managed by the ceding company, and are reflected as funds withheld at interest on the Company’s condensed consolidated balance sheets. In the event of a ceding company’s insolvency, the Company would need to assert a claim on the assets supporting its reserve liabilities. However, the risk of loss to the Company is mitigated by its ability to offset amounts it owes the ceding company for claims or allowances against amounts owed by the ceding company. Interest accrues to the total funds withheld at interest assets at rates defined by the treaty terms. ~~Additionally, under certain treaties the~~The Company is subject to the investment performance on the withheld assets, although it does not directly control them. These assets are primarily fixed maturity investment securities and pose risks similar to the fixed maturity securities the Company owns. To mitigate this risk, the Company helps set the investment guidelines followed by the ceding company and monitors compliance. Ceding companies with funds withheld at interest had an average financial strength rating of “A” ~~at September 30, 2017~~as of March 31, 2022 and December 31, ~~2016.~~2021. Certain ceding companies maintain segregated portfolios for the benefit of the Company.

Other Invested Assets

Other invested assets include ~~equity securities,~~ limited partnership interests, joint ventures (other than operating joint ventures), ~~structured loans,~~lifetime mortgages, derivative contracts, ~~FVO contractholder-directed unit-linked investments,~~ FHLB common stock and ~~equity release mortgages. Other invested assets represented approximately 3.0% and 3.5% of the Company’s cash and invested assets as of September 30, 2017 and December 31, 2016, respectively.~~unit-linked investments. See “Other Invested Assets” in Note 4 – “Investments” in the Notes to Condensed Consolidated Financial Statements for a table that presents the carrying value of the Company’s other invested assets by type as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016.~~2021.

The Company utilizes derivative financial instruments to protect the Company against possible changes in the fair value of its investment portfolio as a result of interest rate changes, to hedge against risk of changes in the purchase price of securities, to hedge liabilities associated with the reinsurance of variable annuities with guaranteed living benefits and to manage the portfolio’s effective yield, maturity and duration. In addition, the Company utilizes derivative financial instruments to reduce the risk associated with fluctuations in foreign currency exchange rates. The Company uses ~~both~~ exchange-traded, centrally cleared, and customized over-the-counter derivative financial instruments.

See Note 5 -– “Derivative Instruments” in the Notes to Condensed Consolidated Financial Statements for a table that presents the notional amounts and fair value of investment related derivative instruments held ~~at September 30, 2017~~as of March 31, 2022 and December 31, ~~2016.~~2021.

The Company may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. Generally, the credit exposure of the Company’s derivative contracts is limited to the fair value and accrued interest of non-collateralized derivative contracts in an asset position at the reporting ~~date plus or minus any collateral posted or held by~~date. As of March 31, 2022, the ~~Company. The~~ Company had ~~no net~~ credit exposure ~~related to its derivative contracts, excluding futures and mortality swaps, at September 30, 2017 and December 31, 2016, as the net amount~~ of ~~collateral pledged to the Company from counterparties exceeded the fair value of the derivative contracts.~~$16 million.

The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Certain of the Company’s OTC derivatives are cleared derivatives, which are bilateral transactions between the Company and a counterparty where the transactions are cleared through a clearinghouse, such that each derivative counterparty is only exposed to the default of the clearinghouse. As ~~exchange-~~

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~~traded~~exchange-traded futures are affected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties. See Note 5 -– “Derivative Instruments” in the Notes to Condensed Consolidated Financial Statements for more information regarding the Company’s derivative instruments.

~~Enterprise Risk Management~~

~~RGA maintains~~The Company holds $823 million and $758 million of beneficial interest in lifetime mortgages in the UK, net of allowance for credit losses, as of March 31, 2022 and December 31, 2021, respectively. Investment income includes $10 million and $13 million in interest income earned on lifetime mortgages for the three months ended March 31, 2022 and 2021, respectively. Lifetime mortgages represent loans provided to individuals 55 years of age and older secured by the borrower’s residence. Lifetime mortgages are comparable to a ~~dedicated Enterprise Risk Management (“ERM”) function that is responsible for analyzing and reporting~~home equity loan by allowing the ~~Company’s risks on an aggregated basis; facilitating monitoring~~borrower to ~~ensure~~utilize the ~~Company’s risks remain within its appetites and limits; and ensuring, on an ongoing basis, that RGA’s ERM objectives are met. This includes ensuring proper risk controls are~~equity in ~~place; risks are effectively identified, assessed, and managed; and key risks to which the Company is exposed are disclosed to appropriate stakeholders.~~their home as collateral. The ~~ERM function plays an important role in fostering the Company’s risk management culture and practices.~~

~~Enterprise Risk Management Structure and Governance~~

~~The Board of Directors (“the Board”) oversees enterprise risk through its standing committees. The Finance, Investments, and Risk Management (“FIRM”) Committee~~amount of the Board oversees the management of the Company’s ERM program and policies. The FIRM receives regular reports and assessments which describe the Company’s key risk exposures and include quantitative and qualitative assessments and information about breaches, exceptions, and waivers.

The Company’s Global Chief Risk Officer (“CRO”) leads the dedicated ERM function. The CRO reports to the Chief Executive Officer (“CEO”) and has direct access to the Board through the FIRM Committee with formal reporting occurring quarterly. The CROloan is supported by a network of Business Unit Chief Risk Officers and Risk Management Officers throughout the business who are responsible for the analysis and management of risks within their scope. A Lead Risk Management Officer is assigned to each risk to take overall responsibility to monitor and assess the risk consistently across all markets.

In addition to leading the ERM function, the CRO also chairs the Company’s Risk Management Steering Committee (“RMSC”), which is made up of senior management executives, including the CEO, the Chief Financial Officer (“CFO”), and the Chief Operating Officer, among others. The RMSC provides oversight for the Insurance, Market and Credit, Capital, and Operational risk committees and retains direct risk oversight responsibilities for the following:

~~Company’s global ERM framework, activities, and issues.~~

~~Identification, assessments, and management of all known, new and emerging strategic risk exposures.~~

~~Risk appetite statement, including the ongoing alignment of the risk appetite statement with the Company’s strategy and capital plans.~~

~~Review, revise and approve RGA group-level strategic risk limits consistent with the risk appetite statement~~

The Insurance, Market and Credit, Capital, and Operational risk committees have direct oversight accountability for their respective risks areas including the identification, assessments, and management of known, new and emerging risk exposures and the review and approval of RGA group-level risk limits

To ensure appropriate oversight of enterprise-wide risk management issues without unnecessary duplication, as well as to foster cross-committee communication and coordination regarding risk issues, risk committee chairs attend RMSC meetings. In addition to the risk committees, their sub-committees and working groups, some RGA operating entities have risk management committees that oversee relevant risks related to segment-level risk limits.

~~Enterprise Risk Management Framework~~

RGA’s ERM framework provides a platform to assess the risk / return profiles of risks throughout the organization to enable enhanced decision making by business leaders. The ERM framework also guides the development and implementation of mitigation strategies to reduce exposures to these risks to acceptable levels.

~~RGA’s ERM framework includes the following elements:~~


1.	Risk Culture: Risk management is an integral part of the Company’s culture and is embedded in RGA’s business processes in accordance with RGA’s risk philosophy. As the cornerstone of the ERM framework, a culture of prudent risk management reinforced by senior management plays a preeminent role in the effective management of risks assumed by RGA.


2.	Risk Appetite Statement: A general and high level overview of the risk profile RGA aims to achieve to meet its strategic objectives. This statement is then supported by more granular risk limits guiding the businesses to achieve this Risk Appetite Statement.

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3.	Risk Limits: Risk Limits establish the maximum amount of defined risk that the Company is willing to assume to remain within the Company’s overall risk appetite. These risks have been identified by the management of the Company as relevant to manage the overall risk profile of the Company while allowing achievement of strategic objectives.


4.	~~Risk Assessment Process: RGA uses qualitative and quantitative methods to assess key risks through a portfolio approach, which analyzes established and emerging risks in conjunction with other risks.~~


5.	Business Specific Limits/Controls: These limits/controls provide additional safeguards against undesired risk exposures and are embedded in business processes. Examples include maximum retention limits, pricing and underwriting reviews, per issuer limits, concentration limits, and standard treaty language.

Proactive risk monitoring and reporting enable early detection and mitigation of emerging risks. The RMSC and its subcommittees monitor adherence to risk limits through the ERM function, which reports regularly to the RMSC and FIRM Committee. The frequency of monitoring is tailored to the volatility assessment and relative priority of each risk. Risk escalation channels coupled with open communication lines enhance the mitigants explained above. The Company has devoted significant resources to developing its ERM program and expects to continue to do so in the future. Nonetheless, the Company’s policies and procedures to identify, manage, and monitor risks may not be fully effective. Many of the Company’s methods for managing risk are based on historical information, which may not be a good predictor of future risk exposures, such as the risk of a pandemic causing a large number of deaths. Management of operational, legal, and regulatory risk relies on policies and procedures which may not be fully effective under all scenarios.

~~Risk Categories~~

The Company groups its risks into the following categories: Insurance risk, Market and Credit risk, Capital risk, Operational risk and Strategic risk. Specific risk assessments and descriptions can be found below and in Item 1A - “Risk Factors” of the 2016 Annual Report.

~~Insurance Risk~~

Insurance risk is the risk of lower or negative earnings and potentially a reduction in enterprise value due to a greater amount of benefits and related expenses paid than expected, or from non-market related adverse policyholder or client behavior. The Company uses multiple approaches to managing insurance risk: active insurance risk assessment and pricing appropriately for the risks assumed, transferring undesired risks, and managing the retained exposure prudently. These strategies are explained below.

~~Insurance Risk Assessment and Pricing~~

The Company has developed extensive expertise in assessing insurance risks which ultimately forms an integral part of ensuring that it is compensated commensurately for the risks it assumes and that it does not overpay for the risks it transfers to third parties. This expertise includes a vast array of market and product knowledge supported by a large information database of historical experience which is closely monitored. Analysis and experience studies derived from this database help form the basis for the Company’s pricing assumptions which are used in developing rates for new risks. If actual mortality or morbidity experience is materially adverse, some reinsurance treaties allow for increases to future premium rates.

Misestimation of any key risk can threaten the long term viability of the enterprise. Further, the pricing process is a key operational risk and significant effort is applied to ensuring the appropriateness of pricing assumptions. Some of the safeguards the Company uses to ensure proper pricing are: experience studies, strict underwriting, sensitivity and scenario testing, pricing guidelines and controls, authority limits and internal and external pricing reviews. In addition, the ERM function provides pricing oversight which includes periodic pricing audits.

~~Risk Transfer~~

To minimize volatility in financial results and reduce the impact of large losses, the Company transfers some of its insurance risk to third parties using vehicles such as retrocession and catastrophe coverage.

~~Individual Exposure Retrocession~~

In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of claims paid by ceding reinsurance to other insurance enterprises (or retrocessionaires) under excess coverage and coinsurance contracts. In individual life markets, the Company retains a maximum of $8.0 million of coverage per individual life. In certain limited situations the Company has retained more than $8.0 million per individual life. The Company enters into agreements with other reinsurers to mitigate the residual risk related to the over-retained policies. Additionally, due to some lower face amount reinsurance coverages provided by the Company in addition to individual life, such as group life, disability and health, under certain circumstances, the Company could potentially incur claims totaling more than $8.0 million per individual life.

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~~Catastrophic Excess Loss Retrocession~~

The Company seeks to limit its exposure to loss on its assumed catastrophic excess of loss reinsurance agreements by ceding a portion of its exposure to multiple retrocessionaires through retrocession line slips or directly to retrocession markets. The Company’s policy is to retain a maximum of $20.0 million of catastrophic loss exposure per agreement and to retrocede up to $30.0 million additional loss exposures to the retrocession markets. The Company limits its exposure on a country-by-country (and state-by-state in the U.S.) basis by managing its total exposure to all catastrophic excess of loss agreements bound within a given country to established maximum aggregate exposures. The maximum exposures are established and managed both on gross amounts issued prior to including retrocession and for amounts net of exposures retroceded.

~~Catastrophe Coverage~~

~~The Company accesses the markets each year for annual catastrophic coverages and reviews current coverage and pricing of current and alternate designs. The coverage may vary from year to year based~~dependent on the Company’s perceived value of such protection. The current policy covers events involving 8 or more insured deaths from a single occurrence and covers $100.0 million of claims in excess of the Company’s $25.0 million deductible.

~~Managing Retained Exposure~~

The Company retains most of the inbound insurance risk. The Company manages the retained exposure proactively using various mitigating factors such as diversification and limits. Diversification is the primary mitigating factor of short term volatility risk, but it also mitigates adverse impacts of changes in long term trends and catastrophic events. The Company’s insured populations are dispersed globally, diversifying the insurance exposure because factors that cause actual experience to deviate materially from expectations do not affect all areas uniformly and synchronously or in close sequence. A variety of limits mitigate retained insurance risk. Examples of these limits include geographic exposure limits, which set the maximum amount of business that can be written in a given country, and jumbo limits, which prevent excessive coverage on a given individual.

In the event that mortality or morbidity experience develops in excess of expectations, some reinsurance treaties allow for increases to future premium rates. Other treaties include experience refund provisions, which may also help reduce RGA’s mortality risk.

~~RGA has various methods to manage its insurance risks, including access to the capital and reinsurance markets.~~

~~Market and Credit Risk~~

~~Market and Credit risk is the risk of lower or negative earnings and potentially a reduction in enterprise value due to changes in the market prices of asset and liabilities.~~

~~Interest Rate Risk~~

Interest Rate risk is risk that changes in the level and volatility of nominal interest rates affect the profitability, value or solvency position of the Company. This includes credit spread changes and inflation but excludes credit quality deterioration. This risk arises from many of the Company’s primary activities, as the Company invests substantial funds in interest-sensitive assets, primarily fixed maturity securities, and also has certain interest-sensitive contract liabilities. A prolonged period where market yields are significantly below the book yields of the Company’s asset portfolio puts downward pressure on portfolio book yields. The Company has been proactive in its investment strategies, reinsurance structures and overall asset-liability management practices to reduce the risk of unfavorable consequences in this type of environment.

The Company manages interest rate risk to optimize the return on the Company’s capital and to preserve the value created by its business operations within certain constraints. For example, certain management and monitoring processes are designed to minimize the effect of sudden and/or sustained changes in interest rates on fair value, cash flows, and net interest income. The Company manages its exposure to interest rates principally by managing the relative matching of the cash flows of its liabilities and assets.

The Company’s exposure to interest rate price risk and interest rate cash flow risk is reviewed on a quarterly basis. Interest rate price risk exposure is measured using interest rate sensitivity analysis to determine the change in fairappraised value of the ~~Company’s financial instruments in~~home at the ~~event~~time of origination, the borrower's age and interest rate. Unlike a ~~hypothetical change in~~home equity loan, no payment of principal or interest ~~rates. Interest rate cash flow risk exposure~~ is ~~measured using interest rate sensitivity analysis to determine~~required until the ~~Company’s variability in cash flows in the event of a hypothetical change in interest rates.~~

In order to reduce the exposure to changes in fair values from interest rate fluctuations, the Company has developed strategies to manage the net interest rate sensitivity of its assets and liabilities. In addition, from time to time, the Company has utilized the swap market to manage the sensitivity of fair values to interest rate fluctuations.

~~Inflation can also have direct effects on the Company’s assets and liabilities. The primary direct effect of inflation is the increase in operating expenses. A large portion~~death of the ~~Company’s operating expenses consists~~borrower or sale of ~~salaries, which~~the home. Lifetime mortgages may also be either fully funded at origination, or the borrower can request periodic funding similar to a line of credit. Lifetime mortgages are subject to ~~wage increases at least partly affected by the~~risks, including market, credit, interest rate, ~~of inflation.~~liquidity, operational, reputational and legal risks.

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~~The Company reinsures annuities with benefits indexed to the cost of living. Some of these benefits are hedged with a combination of CPI swaps and indexed bonds when material.~~

Long Term Care products have an inflation component linked to the future cost of such services. If health care costs increase at a much larger rate than what is prevalent in the nominal interest rates available in the markets, the Company may not earn enough investment yield to pay future claims on such products.

~~Foreign Currency Risk~~

Foreign currency risk is the risk of changes in level and volatility of currency exchange rates affect the profitability, value or solvency position of the Company. The Company manages its exposure to currency principally by currency matching invested assets with the underlying liabilities to the extent possible. The Company has in place net investment hedges for a portion of its investments in its Canadian operations to reduce excess exposure to these currencies. Translation differences resulting from translating foreign subsidiary balances to U.S. dollars are reflected in stockholders’ equity on the condensed consolidated balance sheets.

The Company generally does not hedge the foreign currency exposure of its subsidiaries transacting business in currencies other than their functional currency (transaction exposure). However, the Company has entered into cross currency swaps to manage exposure to specific currencies. The majority of the Company’s foreign currency transactions are denominated in Australian dollars, British pounds, Canadian dollars, Euros, Japanese yen, Korean won, and the South African rand. The maximum amount of assets held in a specific currency (with the exception of the U.S. dollar) is measured relative to risk targets and is monitored regularly.

~~Real Estate Risk~~

Real Estate risk is the risk that changes in the level and volatility of real estate market valuations may impact the profitability, value or solvency position of the Company. The Company has investments in direct real estate equity and debt instruments collateralized by real estate (“real estate loans”). Real estate equity risks include significant reduction in valuations, which could be caused by downturns in the broad economy or in specific geographic regions or sectors. In addition, real estate loan risks include defaults, borrower or tenant bankruptcy and reduced liquidity. Real estate loan risks are partially mitigated by the excess of the value of the property over the loan principle, which provides a buffer should the value of the real estate decrease. The Company manages its real estate loan risk by diversifying by property type and geography and through exposure limits.

~~Equity Risk~~

Equity risk is the risk that changes in the level and volatility of equity market valuations affect the profitability, value or solvency position of the company. This risk includes Variable Annuity and other equity linked exposures and asset related equity exposure. The Company assumes equity risk from alternative investments, fixed indexed annuities and variable annuities. The Company uses derivatives to hedge its exposure to movements in equity markets that have a direct correlation with certain of its reinsurance products.

~~Alternative Investments~~

Alternative investments are investments in non-traditional asset classes that primarily back the Company’s capital and surplus. The Company generally restricts the alternative investments portfolio to non-liability supporting assets: that is, free surplus. Alternative investments generally encompass: hedge funds, emerging markets debt, distressed debt, commodities, infrastructure, tax credits, and equities, both public and private. The Company mitigates its exposure to alternative investments by limiting the size of the alternative investments holding and using per-issuer investment limits.

~~Fixed Indexed Annuities~~

The Company reinsures fixed indexed annuities (“FIAs”). Credits for FIAs are affected by changes in equity markets. Thus the fair value of the benefit is primarily a function of index returns and volatility. The Company hedges most of the underlying FIA equity exposure with derivatives.

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~~Variable Annuities~~

The Company reinsures variable annuities including those with guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”), guaranteed minimum accumulation benefits (“GMAB”) and guaranteed minimum withdrawal benefits (“GMWB”). Strong equity markets, increases in interest rates and decreases in equity market volatility will generally decrease the fair value of the liabilities underlying the benefits. Conversely, a decrease in the equity markets along with a decrease in interest rates and an increase in equity market volatility will generally result in an increase in the fair value of the liabilities underlying the benefits, which has the effect of increasing reserves and lowering earnings. The Company maintains a customized dynamic hedging program that is designed to substantially mitigate the risks associated with income volatility around the change in reserves on guaranteed benefits, ignoring the Company’s own credit risk assessment. However, the hedge positions may not fully offset the changes in the carrying value of the guarantees due to, among other things, time lags, high levels of volatility in the equity and derivative markets, extreme swings in interest rates, unexpected contract holder behavior, and divergence between the performance of the underlying funds and hedging indices. These factors, individually or collectively, may have a material adverse effect on the Company’s net income, financial condition or liquidity. The table below provides a summary of variable annuity account values and the fair value of the guaranteed benefits as of September 30, 2017 and December 31, 2016.

(dollars in millions) September 30, 2017 December 31, 2016
No guaranteed minimum benefits $ 940
$ 731
GMDB only 180
58
GMIB only 23
5
GMAB only 25
28
GMWB only 1,361
1,334
GMDB / WB 340
335
Other 33
19
Total variable annuity account values $ 2,902
$ 2,510
Fair value of liabilities associated with living benefit riders $ 168
$ 185

~~Credit Risk~~

Credit risk, which includes default risk, is risk of loss due to credit quality deterioration of an individual financial asset, derivative or non-derivative contract or instrument. Credit quality deterioration may or may not be accompanied by a ratings downgrade. Generally, the credit exposure for an asset is limited to the fair value, net of any collateral received, at the reporting date.

~~Investment Credit Risk~~

Investment credit risk is credit risk related to invested assets. The Company manages investment credit risk using per-issuer investment limits. In addition to per-issuer limits, the Company also limits the total amounts of investments per rating category. An automated compliance system checks for compliance for all investment positions and sends warning messages when there is a breach. The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because futures are transacted through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments.

The Company enters into various collateral arrangements, which require both the posting and accepting of collateral in connection with its derivative instruments. Collateral agreements contain attachment thresholds that vary depending on the posting party’s financial strength ratings. Additionally, a decrease in the Company’s financial strength rating to a specified level results in potential settlement of the derivative positions under the Company’s agreements with its counterparties. A committee is responsible for setting rules and approving and overseeing all transactions requiring collateral. See “Credit Risk” in Note 5 - “Derivative Instruments” in the Notes to Condensed Consolidated Financial Statements for additional information on credit risk related to derivatives.

~~Counterparty Risk~~

Counterparty risk is the potential for the Company to incur losses due to a client, retrocessionaire, or partner becoming distressed or insolvent. This includes run-on-the-bank risk and collection risk.

~~Run-on-the-Bank~~

The risk that a client’s in force block incurs substantial surrenders and/or lapses due to credit impairment, reputation damage or other market changes affecting the counterparty. Substantially higher than expected surrenders and/or lapses could result in inadequate in force business to recover cash paid out for acquisition costs.

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~~Collection Risk~~

For clients and retrocessionaires, this includes their inability to satisfy a reinsurance agreement because the right of offset is disallowed by the receivership court; the reinsurance contract is rejected by the receiver, resulting in a premature termination of the contract; and/or the security supporting the transaction becomes unavailable to RGA.

The Company manages counterparty risk by limiting the total exposure to a single counterparty and by only initiating contracts with creditworthy counterparties. In addition, some of the counterparties have set up trusts and letters of credit, reducing the Company’s exposure to these counterparties.

Generally, RGA’s insurance subsidiaries retrocede amounts in excess of their retention to certain other RGA insurance subsidiaries. External retrocessions are arranged through the Company’s retrocession pools for amounts in excess of its retention. As of September 30, 2017, all retrocession pool members in this excess retention pool rated by the A.M. Best Company were rated “A-” or better. A rating of “A-” is the fourth highest rating out of sixteen possible ratings. For a majority of the retrocessionaires that were not rated, letters of credit or trust assets have been given as additional security. In addition, the Company performs annual financial and in force reviews of its retrocessionaires to evaluate financial stability and performance.

The Company has never experienced a material default in connection with retrocession arrangements, nor has it experienced any material difficulty in collecting claims recoverable from retrocessionaires; however, no assurance can be given as to the future performance of such retrocessionaires or as to the recoverability of any such claims.

~~Aggregate Counterparty Limits~~

In addition to investment credit limits and counterparty limits, there are aggregate counterparty risk limits which include counterparty exposures from reinsurance, financing and investment activities at an aggregated level to control total exposure to a single counterparty. Counterparty risk aggregation is important because it enables the Company to capture risk exposures at a comprehensive level and under more extreme circumstances compared to analyzing the components individually.

~~All counterparty exposures are calculated on a quarterly basis, reviewed by management and monitored by the ERM function.~~

~~Capital Risk~~

Capital risk is the risk of lower or negative earnings and a potential reduction in enterprise value, and/or the ability to conduct business due to insufficient financial capacity. Collateral, financing, liquidity and tax risks are important to the operations of the Company and its ability to meet obligations with its clients, shareholders and regulators.

~~Operational Risk~~

Operational risk is the risk of lower or negative earnings and a potential reduction in enterprise value caused by the inadequacy or failure of internal processes, people and systems, or from the adverse impact of external events or actors. The Company regularly monitors the risks related to human capital, fraud, business conduct and governance, disruption of operations, business operations and privacy and security related matters. Operational risks are core to managing the Company’s brand and market confidence as well as maintaining its ability to acquire and retain the appropriate expertise to execute and operate the business.

~~Strategic Risk~~

Strategic risk is the risk of lower or negative earnings and a potential reduction in enterprise value related to the planning, implementation, and management of the Company’s business plans and strategies. This includes the risks associated with the global environment in which it operates; future law and regulation changes; political and sovereign risks; and relationships with key external parties.

New Accounting Standards

Financial Services – Insurance

In August 2018, the FASB issued amendments that will significantly change the recognition and measurement of long-duration insurance contracts and expand disclosure requirements. The guidance is effective for the Company on January 1, 2023. The

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Company established a team to support the implementation of the updated guidance, which requires significant changes to policies, reporting and processes. The Company’s achievements as of the balance sheet date include, but are not limited to, the following:

•Established preliminary key accounting policies;

•Updated chart of accounts to support enhanced financial statement presentation and disclosures;

•Implemented a data management system and process for grouping treaties into cohorts;

•Established valuation analytics and reporting foundation;

•Established an assumption governance process for assumption review, changes and approvals; and

•Conducted dry runs and end to end system testing.

The Company continues to make progress on the following items (includes, but not limited to):

•Evaluating and finalizing key accounting policies;

•Evaluating the impact to the consolidated financial statements at transition;

•Determining and documenting key risks and appropriate internal controls; and

•Conducting parallel valuation runs.

See Note ~~12 —~~13 – “New Accounting Standards” in the Notes to Condensed Consolidated Financial ~~Statements.~~Statements for additional information on new accounting pronouncements and their impact, if any, on the Company’s results of operations and financial position.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

~~There has~~Market risk is the risk of fluctuations in the value of financial instruments as a result of absolute or relative changes in interest rates, foreign currency exchange rates, equity prices or commodity prices. To varying degrees, the Company products and services, and the investment activities supporting them, generate exposure to market risk. The market risk incurred, and the Company’s strategies for managing this risk, vary by product. As of March 31, 2022, there have been no ~~significant change~~material changes in the Company’s ~~quantitative or qualitative aspects of~~economic exposure to market risk ~~during~~or the ~~quarter~~Company’s Enterprise Risk Management function from December 31, 2021, a description of which may be found in its Annual Report on Form 10-K, for the year ended ~~September 30, 2017 from that disclosed in~~December 31, 2021, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” filed with the ~~2016 Annual Report. See “Item 2 – Management’s Discussion~~Securities and ~~Analysis of Financial Condition and Results of Operations – Market and Credit Risk”, which is included herein, for additional information.~~Exchange Commission.

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ITEM 4. Controls and Procedures

The Chief Executive Officer and the Chief Financial Officer have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective.

There was no change in the Company’s internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the quarter ended ~~September 30, 2017,~~March 31, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

The Company is subject to litigation in the normal course of its business. The Company currently has no material litigation. A legal reserve is established when the Company is notified of an arbitration demand or litigation or is notified that an arbitration demand or litigation is imminent, it is probable that the Company will incur a loss as a result and the amount of the probable loss is reasonably capable of being estimated.

ITEM 1A. Risk Factors

There ~~were~~have been no material changes from the risk factors previously disclosed in the ~~2016~~Company’s 2021 Annual Report.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table summarizes RGA’s repurchase activity of its common stock during the quarter ended ~~September 30, 2017:~~March 31, 2022:


	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Program
January 1, 2022 – January 31, 2022	10,998	$	115.70	—	$	71,573,495
February 1, 2022 – February 28, 2022	225,234	$	114.11	219,116	$	46,573,506
March 1, 2022 – March 31, 2022	212	$	111.56	—	$	400,000,000

(1)RGA repurchased 0, 219,116, and 0 shares of common stock under its share 2019 repurchase program during January, February and March 2022. The Company net settled – issuing 30,189, 23,150, and 628 shares from treasury and repurchasing from recipients 10,998, 6,118 and 212 shares in January, February and March 2022, respectively, in settlement of income tax withholding requirements incurred by the recipients of equity incentive awards.

Total Number of Shares
Purchased (1)

Average Price Paid per
Share

Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs (1)

Maximum Number (or
Approximate Dollar
Value) of Shares that May
Yet Be Purchased Under
the Plan or Program
July 1, 2017 -
July 31, 2017 1,320
$ 131.02
—
$ 400,000,000
August 1, 2017 -
August 31, 2017 25,841
$ 140.23
—
$ 400,000,000
September 1, 2017 -
September 30, 2017 209,344
$ 128.91
208,680
$ 373,103,074

~~(1)~~

RGA repurchased 208,680 shares of common stock under its share repurchase program for $26.9 million during September 2017. The Company net settled - issuing 3,190, 65,078 and 2,648 shares from treasury and repurchasing from recipients 1,320, 25,841 and 664 shares in July, August and September, respectively, in settlement of income tax withholding requirements incurred by the recipients of an equity incentive award.

On January ~~26, 2017,~~24, 2019, RGA’s board of directors authorized a share repurchase program ~~with no expiration date,~~ for up to ~~$400.0~~$400 million of RGA’s outstanding common stock. During the three months ended March 31, 2022, RGA repurchased 219,116 shares of common stock under this program for $25 million.

On February 25, 2022, RGA’s board of directors authorized a share repurchase program for up to $400 million of RGA’s outstanding common stock. The authorization was effective immediately and does not have an expiration date. In connection with this authorization, the board of directors terminated the stock repurchase authority granted in ~~2016.~~2019. During the three months ended March 31, 2022, RGA did not repurchase any shares of common stock under this program.

ITEM 6. Exhibits

See index to exhibits.

Table of Contents

INDEX TO EXHIBITS



Exhibit Number		Description

~~Exhibit~~ ~~Number~~3.1(i)		~~Description~~

~~3.1~~	Amended and Restated Articles of Incorporation, effective as of May 21, 2020, incorporated by reference to Exhibit ~~3.1 of~~3.1(i) to Current Report on Form 8-K filed ~~November 25, 2008.~~on May 22, 2020 (File No. 1-11848)

3.2		Amended and Restated Bylaws, effective as of May 23, 2018, incorporated by reference to Exhibit ~~3.1 of~~3.2 to Current Report on Form 8-K filed ~~July 18, 2014.~~on May 24, 2018 (File No. 1-11848)

10.1		Form of Performance Contingent Share Agreement under RGA Flexible Stock Plan, as amended and restated effective May 23, 2017 and as further amended effective May 19, 2021 *

10.2		Form of Stock Appreciation Right Award Agreement under RGA Flexible Stock Plan, as amended and restated effective May 23, 2017 and as further amended effective May 19, 2021 *

10.3		Form of Non-Qualified Stock Option Agreement under RGA Flexible Stock Plan, as amended and restated effective May 23, 2017 and as further amended effective May 19, 2021 *

31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002

31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

~~101.INS~~101.SCH		~~XBRL Instance Document~~

~~101.SCH~~	XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101).

* Represents a management contract or compensatory plan or arrangement

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	Reinsurance Group of America, Incorporated
Date: ~~November 2, 2017~~May 6, 2022	By:	/s/ Anna Manning
		Anna Manning
		President & Chief Executive Officer
		(Principal Executive Officer)
Date: ~~November 2, 2017~~May 6, 2022	By:	/s/ Todd C. Larson
		Todd C. Larson
		Senior Executive Vice President & Chief Financial Officer
		(Principal Financial and Accounting Officer)



September 30, 2017:	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		% of Total		Other-than- temporary impairments in AOCI
Available-for-sale:
Corporate securities	$	21,418,741	$	1,209,999	$	92,910	$	22,535,830	61.9	%	$	—
Canadian and Canadian provincial governments	2,850,982		1,142,635		2,432		3,991,185		11.0		—
Residential mortgage-backed securities	1,645,379		42,202		8,276		1,679,305		4.6		—
Asset-backed securities	1,680,918		18,713		5,063		1,694,568		4.7		275
Commercial mortgage-backed securities	1,293,296		25,471		5,445		1,313,322		3.6		—
U.S. government and agencies	1,621,053		13,614		30,998		1,603,669		4.4		—
State and political subdivisions	614,099		52,919		5,987		661,031		1.8		—
Other foreign government, supranational and foreign government-sponsored enterprises	2,765,500		145,025		7,693		2,902,832		8.0		—
Total fixed maturity securities	$	33,889,968	$	2,650,578	$	158,804	$	36,381,742	100.0	%	$	275
Non-redeemable preferred stock	$	41,878	$	312	$	3,289	$	38,901	34.4	%
Other equity securities	74,514		633		1,117		74,030		65.6
Total equity securities	$	116,392	$	945	$	4,406	$	112,931	100.0	%



December 31, 2016:	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		% of Total		Other-than- temporary impairments in AOCI
Available-for-sale:
Corporate securities	$	18,924,711	$	911,618	$	217,245	$	19,619,084	61.1	%	$	—
Canadian and Canadian provincial governments	2,561,605		1,085,982		3,541		3,644,046		11.4		—
Residential mortgage-backed securities	1,258,039		33,917		13,380		1,278,576		4.0		(375		)
Asset-backed securities	1,443,822		9,350		23,828		1,429,344		4.5		275
Commercial mortgage-backed securities	1,342,440		28,973		7,759		1,363,654		4.2		—
U.S. government and agencies	1,518,702		12,644		63,044		1,468,302		4.6		—
State and political subdivisions	566,761		37,499		12,464		591,796		1.8		—
Other foreign government, supranational and foreign government-sponsored enterprises	2,595,707		123,054		19,938		2,698,823		8.4		—
Total fixed maturity securities	$	30,211,787	$	2,243,037	$	361,199	$	32,093,625	100.0	%	$	(100	)
Non-redeemable preferred stock	$	55,812	$	1,648	$	6,337	$	51,123	18.6	%
Other equity securities	229,767		1,792		7,321		224,238		81.4
Total equity securities	$	285,579	$	3,440	$	13,658	$	275,361	100.0	%



	September 30, 2017				December 31, 2016
	Gross Unrealized Losses		% of Total		Gross Unrealized Losses		% of Total
Less than 20%	$	140,313	86.0	%	$	337,831	90.1	%
20% or more for less than six months	3,407		2.1		19,438		5.2
20% or more for six months or greater	19,490		11.9		17,588		4.7
Total	$	163,210	100.0	%	$	374,857	100.0	%



	September 30, 2017		December 31, 2016
Mortgage loans:
Individually measured for impairment	$	5,856	$	2,216
Collectively measured for impairment	4,328,141		3,780,991
Recorded investment	$	4,333,997	$	3,783,207
Valuation allowances:
Individually measured for impairment	$	—	$	—
Collectively measured for impairment	9,137		7,685
Total valuation allowances	$	9,137	$	7,685



	Unpaid Principal Balance		Recorded Investment		Related Allowance		Carrying Value
September 30, 2017:
Impaired mortgage loans with no valuation allowance recorded	$	6,427	$	5,856	$	—	$	5,856
Impaired mortgage loans with valuation allowance recorded	—		—		—		—
Total impaired mortgage loans	$	6,427	$	5,856	$	—	$	5,856
December 31, 2016:
Impaired mortgage loans with no valuation allowance recorded	$	2,758	$	2,216	$	—	$	2,216
Impaired mortgage loans with valuation allowance recorded	—		—		—		—
Total impaired mortgage loans	$	2,758	$	2,216	$	—	$	2,216

The Company’s average investment in impaired mortgage loans and the related interest income are reflected in the table below for the periods indicated (dollars in thousands):
	Three months ended September 30,
	2017				2016
	Average Recorded Investment⁽¹⁾		Interest Income		Average Recorded Investment⁽¹⁾		Interest Income
Impaired mortgage loans with no valuation allowance recorded	$	3,967	$	33	$	6,953	$	107
Impaired mortgage loans with valuation allowance recorded	—		—		—		—
Total impaired mortgage loans	$	3,967	$	33	$	6,953	$	107

	Nine months ended September 30,
	2017				2016
	Average Recorded Investment⁽¹⁾		Interest Income		Average Recorded Investment⁽¹⁾		Interest Income
Impaired mortgage loans with no valuation allowance recorded	$	3,062	$	100	$	4,687	$	324
Impaired mortgage loans with valuation allowance recorded	—		—		5,459		—
Total impaired mortgage loans	$	3,062	$	100	$	10,146	$	324



	Effective Portion
Derivative Type	Gain (Loss) Deferred in OCI			Gain (Loss) Reclassified into Income from OCI
				Investment Related Gains (Losses)			Investment Income
For the three months ended September 30, 2017:
Interest rate	$	(8,421	)	$	—		$	—
Currency/Interest rate	1,544			—			230
Forward bond purchase commitments	(12		)	183			41
Total	$	(6,889	)	$	183		$	271
For the three months ended September 30, 2016:
Interest rate	$	(3,282	)	$	—		$	—
Currency/Interest rate	4,214			—			200
Forward bond purchase commitments	—			116			21
Total	$	932		$	116		$	221

For the nine months ended September 30, 2017:
Interest rate	$	(6,205	)	$	—		$	—
Currency/Interest rate	9,894			—			560
Forward bond purchase commitments	—			142			144
Total	$	3,689		$	142		$	704
For the nine months ended September 30, 2016:
Interest rate	$	(15,617	)	$	—		$	—
Currency/Interest rate	4,751			—			454
Forward bond purchase commitments	—			(53		)	(67		)
Total	$	(10,866	)	$	(53	)	$	387



	Derivative Gains (Losses) Deferred in AOCI
	For the three months ended September 30,					For the nine months ended September 30,
Type of NIFO Hedge ^{(1) (2)}	2017			2016		2017			2016
Foreign currency swaps	$	(35,198	)	$	8,341	$	(60,723	)	$	(23,151	)
Foreign currency forwards	4,627			—		8,785			—
Total	$	(30,571	)	$	8,341	$	(51,938	)	$	(23,151	)



		Gain (Loss) for the three months ended September 30,
Type of Non-hedging Derivative	Income Statement Location of Gain (Loss)	2017			2016
Interest rate swaps	Investment related gains (losses), net	$	641		$	4,122
Financial futures	Investment related gains (losses), net	(8,890		)	(11,677		)
Foreign currency forwards	Investment related gains (losses), net	24			507
CPI swaps	Investment related gains (losses), net	220			76
Credit default swaps	Investment related gains (losses), net	4,137			6,672
Equity options	Investment related gains (losses), net	(8,295		)	(13,648		)
Longevity swaps	Other revenues	3,334			8,921
Mortality swaps	Other revenues	(132		)	(400		)
Subtotal		(8,961		)	(5,427		)
Embedded derivatives in:
Modified coinsurance or funds withheld arrangements	Investment related gains (losses), net	23,044			49,078
Indexed annuity products	Interest credited	(13,133		)	(20,104		)
Variable annuity products	Investment related gains (losses), net	(6,205		)	7,988
Total non-hedging derivatives		$	(5,255	)	$	31,535

		Gain (Loss) for the nine months ended September 30,
Type of Non-hedging Derivative	Income Statement Location of Gain (Loss)	2017			2016
Interest rate swaps	Investment related gains (losses), net	$	12,318		$	108,149
Financial futures	Investment related gains (losses), net	(28,107		)	(30,285		)
Foreign currency forwards	Investment related gains (losses), net	577			6,584
CPI swaps	Investment related gains (losses), net	211			(624		)
Credit default swaps	Investment related gains (losses), net	15,374			13,536
Equity options	Investment related gains (losses), net	(34,757		)	(19,576		)
Longevity swaps	Other revenues	7,180			11,402
Mortality swaps	Other revenues	(921		)	222
Subtotal		(28,125		)	89,408
Embedded derivatives in:
Modified coinsurance or funds withheld arrangements	Investment related gains (losses), net	106,854			33,795
Indexed annuity products	Interest credited	(35,490		)	(20,730		)
Variable annuity products	Investment related gains (losses), net	16,518			(83,089		)
Total non-hedging derivatives		$	59,757		$	19,384



	September 30, 2017			December 31, 2016
Estimated fair value of derivatives in net asset position	$	151,009		$	236,985
Cash provided as collateral⁽¹⁾	30,771			1,441
Securities pledged to counterparties as collateral⁽²⁾	58,360			95,863
Cash pledged from counterparties as collateral⁽³⁾	(174,120		)	(254,498		)
Securities pledged from counterparties as collateral⁽⁴⁾	(17,782		)	(16,913		)
Initial margin for cleared derivatives⁽²⁾	(58,360		)	(73,571		)
Net amount after application of master netting agreements and collateral	$	(10,122	)	$	(10,693	)
Margin account related to exchange-traded futures⁽⁵⁾	$	7,832		$	9,687



	2017
	Transfers from Level 1 to Level 2		Transfers from Level 2 to Level 1
Three months ended September 30:
Fixed maturity securities - available-for-sale:
Corporate securities	$	—	$	—

Nine months ended September 30:
Fixed maturity securities - available-for-sale:
Corporate securities	$	—	$	88,674



For the three months ended September 30, 2017:	Fixed maturity securities - available-for-sale
	Corporate securities			Canadian and Canadian provincial governments			Residential mortgage- backed securities			Asset-backed securities
Fair value, beginning of period	$	1,291,054		$	533,270		$	148,685		$	201,589
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses	(383		)	3,460			(30		)	160
Investment related gains (losses), net	396			—			44			—
Included in other comprehensive income	(2,700		)	(11,365		)	104			(101		)
Purchases⁽¹⁾	107,670			—			26,765			—
Sales⁽¹⁾	(26,337		)	—			(3,553		)	—
Settlements⁽¹⁾	(88,551		)	—			(3,645		)	(15,243		)
Transfers into Level 3	3,844			—			15			36,994
Transfers out of Level 3	(12,973		)	—			(50,390		)	(78,202		)
Fair value, end of period	$	1,272,020		$	525,365		$	117,995		$	145,197
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses	$	(394	)	$	3,460		$	(27	)	$	156



For the three months ended September 30, 2017 (continued):	Fixed maturity securities available-for-sale
	Commercial mortgage- backed securities			U.S. government and agencies			State and political subdivisions			Other foreign government, supranational and foreign government-sponsored enterprises
Fair value, beginning of period	$	1,943		$	23,567		$	34,434		$	11,994
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses	—			(116		)	26			(1		)
Included in other comprehensive income	5			6			(208		)	(7		)
Purchases⁽¹⁾	—			134			—			495
Settlements⁽¹⁾	(1		)	(340		)	(35		)	—
Transfers into Level 3	—			—			7,295			—
Transfers out of Level 3	—			—			—			(6,853		)
Fair value, end of period	$	1,947		$	23,251		$	41,512		$	5,628
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses	$	—		$	(116	)	$	26		$	(1	)



For the three months ended September 30, 2017 (continued):	Short-term Investments			Funds withheld at interest- embedded derivatives		Other assets - longevity swaps		Interest sensitive contract liabilities embedded derivatives			Other liabilities - mortality swaps
Fair value, beginning of period	$	3,548		$	61,281	$	33,349	$	(974,631	)	$	(1,552	)
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment related gains (losses), net	—			23,044		—		(10,047		)	—
Interest credited	—			—		—		(8,335		)	—
Included in other comprehensive income	(3		)	—		1,144		—			1
Other revenues	—			—		3,334		—			(132		)
Purchases⁽¹⁾	3,164			—		—		(18,736		)	—
Settlements⁽¹⁾	(114		)	—		—		21,809			—
Transfers out of Level 3	(3,236		)	—				—			—
Fair value, end of period	$	3,359		$	84,325	$	37,827	$	(989,940	)	$	(1,683	)
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment related gains (losses), net	—			23,044		—		(11,900		)	—
Other revenues	—			—		3,334		—			(132		)
Interest credited	—			—		—		(30,145		)	—



For the three months ended September 30, 2016 (continued):	Fixed maturity securities available-for-sale
	State and political subdivisions			Other foreign government, supranational and foreign government-sponsored enterprises			Funds withheld at interest- embedded derivatives			Other assets - longevity swaps		Interest sensitive contract liabilities embedded derivatives			Other liabilities - mortality swaps
Fair value, beginning of period	$	35,246		$	13,706		$	(91,981	)	$	17,781	$	(1,125,380	)	$	(1,997	)
Total gains/losses (realized/unrealized)
Included in earnings, net:
Investment income, net of related expenses	10			—			—			—		—			—
Investment related gains (losses), net	—			—			49,078			—		7,988			—
Interest credited	—			—			—			—		(20,104		)	—
Included in other comprehensive income	553			48			—			327		—			—
Other revenues	—			—			—			8,921		—			(400		)
Purchases⁽¹⁾	1,986			—			—			—		(11,853		)	—
Sales⁽¹⁾	—			—			—			—		—			—
Settlements⁽¹⁾	(32		)	(328		)	—			—		19,225			329
Transfers into Level 3	—			—			—			—		—			—
Transfers out of Level 3	—			—			—			—		—			—
Fair value, end of period	$	37,763		$	13,426		$	(42,903	)	$	27,029	$	(1,130,124	)	$	(2,068	)
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
Included in earnings, net:
Investment income, net of related expenses	$	10		$	—		$	—		$	—	$	—		$	—
Investment related gains (losses), net	—			—			49,078			—		3,969			—
Other revenues	—			—			—			8,921		—			(400		)
Interest credited	—			—			—			—		(39,329		)	—



	Carrying Value After Measurement				Net Investment Gains (Losses)
	At September 30,				Three months ended September 30,					Nine months ended September 30,
(dollars in thousands)	2017		2016		2017			2016		2017			2016
Mortgage loans⁽¹⁾	$	—	$	6,913	$	—		$	747	$	—		$	45
Limited partnership interests⁽²⁾	4,656		4,460		(896		)	—		(7,204		)	(2,039		)
Private equities⁽³⁾	106		—		(531		)	—		(531		)	—



	September 30, 2017		December 31, 2016
Sector:
Corporate securities	59.6	%	61.6	%
Canadian and Canada provincial governments	1.5		0.9
Residential mortgage-backed securities	5.1		3.6
Asset-backed securities	3.1		6.4
Commercial mortgage-backed securities	3.3		2.1
State and political subdivisions	3.7		3.3
U.S. government and agencies	19.0		16.8
Other foreign government, supranational and foreign government-sponsored enterprises	4.7		5.3
Total	100.0	%	100.0	%
Industry:
Finance	15.3	%	20.1	%
Asset-backed	3.1		6.4
Industrial	40.1		32.9
Mortgage-backed	8.4		5.7
Government	28.9		26.3
Utility	4.2		8.6
Total	100.0	%	100.0	%