RGA - Earnings call transcript Q4 2018 | Reinsurance Group of America, Incorporated

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Operator

Good day. Welcome to the Reinsurance Group of America Fourth Quarter 2018 Results Conference Call. Today's conference is being recorded. At this time, I would like to introduce Mr. Todd Larson, Senior Executive Vice President and Chief Financial Officer; and Ms. Chief and President Manning, Executive Officer. Anna ahead, go Mr. Please Larson.

Todd Larson

and welcome Thank and financial me quarter fourth discuss morning, the RGA's this I results measures. Anna and reminder you. everyone, to about President Manning, XXXX Anna a in fourth Louis RGA's Executive will non-GAAP St. Officer. and Good morning is Chief after conference quick quarter call. With information forward-looking

to make take understand Keep our statements your expected investment To is among that projections Following materially be premiums the earnings results in to could prepared we differ subjects better and cause A we'll that from we'll results. other results of relating expected help that mind results forward-looking included of or financial certain future RGA's and discuss subsidiaries. growth happy business, actual from call performance will of differ materially certain actual potential issued could remarks, and you in things, this important information, statements revenues, questions. list to during yesterday. performance, factors contain release its RGA earnings including, and

refer rgare.com. In income, the financial turn Investor and income over on may reflects is adjusted on information information These at the after-tax pre-tax to a comments. make measure to the for on and segments. for operating more profitability and reconciliations this ongoing release business addition, adjusted the found our net we'll various regulations. comments documents her Please and for tables supplement course be of website Anna of this And financial the quarterly our our this non-GAAP income We of I'll and SEC business. to call measure operating during now, better under Relations considered additional believe which call, measure press trends underlying in

Anna Manning

and you, morning. Thank Todd, good

night, in of $X.XX to adjusted ago. we've year release operating indicated reported As a EPS earnings last the compared $X.XX

$XX.XX our last $XX.XX year, operating year. EPS adjusted versus was the For full

at sound we business growth fundamentals were of a transactions Looking and good underlying and again quarter the were on had strong premium the organic strong very deployment. and capital as active our quarter, was front

We in offset relative this and a shortfall the growth breakeven reflects bottom Traditional EMEA, strong Australia. quarter. earnings shortfalls in US Canada was claims, modest showed Asia was and quarters a Group basis from higher currency in quarter benefit to to on and US business US the while recent achieved progress Reported and continue X%. The premium close line mortality organic from XX% Individual diversity growth constant estimated Traditional to results

results pipeline XX%, growth tax due Asia into premium deals quarter and recent regions the For years. our in tax in business, we continuing momentum premium financial full terms year mortality reinsurance of The active. organic the business XXXX. for million organic were very in full of year, about lower million, The EPS periods achieved the most growth rate in America, growth deployment active were We When was a the our aided covered transactions and since to active and and this Asia for North deployed second our transactions strong and transactions of the $XXX operating in-force business, and of standing I in of capital capital. performance continuing It albeit growth for our EMEA were transactions. year there reform. $XXX deployed think of to over X% level capital brought overall us The positives. our one years. active in-force by all remains more momentum Europe, many year, the recent of the broad-based Asset-Intensive longevity This

some continue While is business see short-term in shape. our good to volatility, we

to generation of year with commit capital ongoing a the repurchases the and approximately end million position combination still in of approximately allowed $XXX capital billion share transactions us excess a and in-force from total and business $X strong Our excess power to our capital.

specifically sheet additional proven product unique this focus portfolio to ability positioned RGA a and diversification we and execution. attractive position our well line financial results. less sensitivity long As overall is we achieve of environment look optimistic markets, our to and high-quality we ahead, we uncertainty, in the about strategy the record successful our financial prospects business, have our and markets. remain some model track of operate of geography, with given from by biometric with strength a and on a nature a operating balance a macro In investment

We on a demonstrated and effectively disciplined that, to that over in XXXX. time, it over turn with capital managing focus And again and have growing I'll business Todd. profitable was

Todd Larson

Thanks, Anna. a provide brief overview. I'll financial

return range operating XX.X%, equity adjusted XX% our return on was is Our our guidance of the for -- XX%. within year on adjusted which full to

putting us continue through repurchases in to growth, able Our as end transactions strong to approximately position and was appropriate. return excess at shareholders period capital attractive to to share position a billion, capital of the dividends organic execute $X on be in-force the fund and

Moving business X.XX%, variable to the income. reflecting points investments. to XXXX, was fourth quarter The X average investment basis compared higher investment yield up of excluding spread

income last operating new pre-tax quarter. on down tax XX.X% The Our adjusted the was effective quarter. rate from money was X.XX% for somewhat rate

pre-tax of adjusted year, range our expected on XX.X% XX%. within to operating was XX% our income the tax For effective rate

US line a was Individual Latin that result sequential of adjusted Turning basically this income to with improvement revised quarter, Group a the quarters. quarter million, America business a and our close flat for breakeven pre-tax moderately two relative unfavorable experience prior to operating the experience business ago. was ago. to to and US our year $XX.X segment unfavorable reported a expectations compares and a mortality within year Traditional bottom results. The The

growth going the X%. health and as premium X% modification for of was organic mentioned Reported planned. adjusting US we last year Our remediation treaty the growth of efforts premium Group after are effects was existing that

line of expectations. Our this relatively pre-tax Asset-Intensive business operating in our adjusted income reported quarter, with $XX.X million

pre-tax million reported year line of income a $XX.X reinsurance financial period, operating adjusted modestly this down from Our ago.

from Canadian year operating pre-tax million Our million, the reported period. $XX.X $XX.X in up of segment prior Traditional adjusted income

favorable This favorable and in the transactions and these two income reported longevity of and Premiums year adjusted $X.X experience. operating fee-based new of up ago year transactions. quarter from down Financial individual Solutions and prior new income a experience the reflects transactions were written execution Canada's to XX% period year. Africa. pre-tax which business in-force contribution this with during Europe, East reflecting the results in-force line current mortality Middle reflecting from includes Switching the and longevity million, business relatively of

income Solutions million $XX million, adjusted favorable million. modestly operating were fee-based continued Our Reported reflecting the year's up $XX.X last premiums longevity growth includes to $XX.X income across reflecting most underwriting business experience which segment. Asset-Intensive compared Traditional pre-tax of business Financial and strong transactions business EMEA's of pre-tax across markets. reported adjusted reported XX%, operating

quarter's longevity experience. results This reflected favorable

Turning period. Pacific adjusted $XX.X to to operating prior million million the Pretax our Traditional Asia $XX.X year business. in income totaled compared

and quarter primarily some Pacific group in a results Asia margins Traditional treaties most underwriting the this premiums up in reflecting XX%, loss due region. in business. catch-ups. Australia favorable experience quarter Australia Asia experienced primarily new the premium Reported existing experienced the and excluding unfavorable Asia Our growth in in on were some to across countries

were technology Our of expectations. to ago to results expected year pre-tax due $X.X in million related income pre-tax in period. $X costs million, $XX million Asia the versus than Pacific line loss Financial and segment greater adjusted Corporate operating current range Solutions business with adjusted reported operating The initiatives. period relatively The reported our the service of

quarter-to-quarter, from approximately Going this some forward expect on $XX segment, loss we given nature the do volatility a but of expect average, million. we of

we equity We we adjusted over for intermediate in have thereafter XXXX operating be year. range income growth per X% in and of time term, provided adjusted to XX%. return other X% us that diversified expect this within to XXXX. in operating historically of underlying XX% the of in In and to segments the at intermediate mind, to tax to the fall our guidance share Also expect our rate on With particular our business in areas. underperformance with lines benefits effective conclusion, of of of XX% sound business strengths business range were continue The offset fundamentals XX%. or in to allow the of to

the extremely capital of repurchases. We pleased higher level deployment and share with are

investment achieve attractive and open balance you Given and and uncertain position are for excess strong sheet, successful And call the continue more that, economic thank RGA. in we'll results in capital high-quality we confident portfolio, even that questions. and our financial be with we appreciate support to interest We environment. your can

Operator

[Operator Instructions] And take question with Bhullar JPMorgan. from our first Jimmy we'll

Jimmy Bhullar

block. normal margin? more you a to revert XXXX, you generate question group first that morning. earnings of, that I progress could business, a assuming the Good to margin repricing Hi. expect And in had you I'm just of and if on when the but insurance give on you're what's just -- expecting us to idea to your profit rough get an what's know the power level? once sort a

Todd Larson

repricing going our Jimmy. efforts No, Hi, are as expected. efforts remediation and

For the the with the part We business so. to fairly the be won't as on. XXXX has profitability a good repriced XX% we'll that US we're remaining results, business, quarters over we of Group of that or have approximately -- repricing and next of the albeit treaties XXXX, back all to so flow see in to business and we return to through until do full chance expect margins the repricing really couple

pleased with going. how on far we're So, so track, it's and

Jimmy Bhullar

the get business profit business the have -- be premiums range or you on of years? has the in of could would would earnings couple like margins profitability business on just improved normal so idea And that of of and what for in sort us much we how can or how much normal over give an the idea quantify be, what next profit range an

Todd Larson

US Group numbers. is rough In $XXX in total, just premium. Yes, about in the million business

performs million the that premiums, it piece excess underperforming, to and more care medical $XX total, were margins of you will, business as -- the a in but would which block. $XX disability XX% was that million the far volatile, as like be so business lines, total earning overall the can when income if was the the a say I that excess was Now of it smaller And year.

So that gives it some to. hopefully get you of back can where context

Jimmy Bhullar

just then GE to lastly, and And your PG&E? some Yes. this us investment quarter give is losses color what exposure on and could you the

Todd Larson

Yes, have some quarter. so we investment losses did this

mentioned, you our was down that those specifically selling of GE. of Some of it credits position. liquidate did We some out

think million some do incurred of of Gas. I sales. those $XX Pacific in of the about on losses we the We have neighborhood

which it's I value, $XX I million million $XX right about value think book think equivalent market the in about now. is

Jimmy Bhullar

position are GE, of And the entirely? out you

Todd Larson

we the were think a for very, have small might most piece left, but out. part, they very, I very

Operator

question from next And Partners. Dowling Humphrey & comes our Lee with

Humphrey Lee

to question Australia. related a I've

other the positive was turning and it breakeven. XXXX, you toward quarter three right kind at the XXXX of looking being of obviously quarters but So and direction, had losses

So the I underperformance was drivers was for the what XXXX? were what wondering is the in expectation your what near-term -- country? just And for

Todd Larson

Yes.

disappointed Australia were with for we Humphrey, year. this result So the

we been this you since repricing did year you was profitable ago, few by experience. business for the the the a started As we claims take have on business back, a had over due loss. full primarily last that in step few had mentioned, some driven year, XXXX. if a group years been But to And group higher negative the efforts It years.

So group line of this the year driver in was the main Australia.

in XXXX, result. around that say I'd we're things here my sitting today, is all guess considered, best For breakeven the being

Humphrey Lee

the see terms in -- what see activities? higher you what claims for is I XXXX guess cause the higher you is what of or claims do that in did like that

Todd Larson

we real on a as we experience claims specific, to activity, elevated multiple very just which Just go think I attributed across forward. higher keep close don't clients. we'll claims eye anything

Humphrey Lee

along you some strong of what have back have for? of Like Got of it. you this favorable at And forward? of feel then in I that the margins multiple better Like performance positive do secret clients guess, to Or EMEA, like variance? pass how performance driving sustainable sort go to maintain would that some you kind your have going quarters to you good to experience point? in sauce kind definitely And very now. shifting gear, is is

Todd Larson

Yes.

business well. us. there's little is information And EMEA, due just been the to So as of to our very good reporting bit information in has there as client clients performing only on report what especially catch-ups, the our longevity UK in noise a just in

I particular experience to past very some mean longevity underlying So for sometimes client quarters, but quarters now. performing have in right also good reporting, just due us good the has business for the been catch-ups they're several we

Humphrey Lee

how who And How competitive just market that other than that competitive main guys? of business? is players the like particular you line will is? Like, it in be

Anna Manning

competitive very market. It Anna. it's a Humphrey, is

We that focus niches have we on.

it transactions. no, So give a that strength on repeat also business. of we're we to any particular question, are yes, competitive But looking for risk have to profiles, from relationships don't your all more and we type particular particular the and your existing question, attributes, margins of long-term market enjoy earlier back These to contracts. is

Humphrey Lee

color. you Got it. for the Thank

Operator

take Research. Autonomous our next we'll question And Erik with from Bass

Erik Bass

Thank follow think do Commission you on I having seeing Hi. the of on up any risk review I any you. and that having that's particular, want forward? And do from guess, are if going to higher the in Royal question Humphrey's Or any to you issues any impact contribution not, claims? you see Australia.

Todd Larson

on activity out, in It's report due fairly hard had last we been say direct claims of there's impact Yes. soon. Commission to that this The at Royal so is point. year, February this any

been the relationship there's on it's pinpoint to a But now. right some impact Commission. hard believe to activity have I Royal claims indirect direct from the really Although,

it's to very to with see that clients again, that our those develops. stay work one how and of and So continue we'll situations close close

Erik Bass

Got question it it. but this that's is to But there's you adequacy? only fair reserve earnings you to see is Australia that nothing when mid at headwind, an of say causing point,

Todd Larson

the continuously at for experience overall with we're and We're that right. studies looking making sure That's balance comfortable Australia. sheet

that's it earnings now. it It do any issues characterize significant feel I a at the -- balance we So way balance sheet way right is to an drag, point. don't certainly we this but there's think good

Erik Bass

We've just on seen Mortality some conflicting but declining medical could population, And slightly for with particularly question Thanks. US in I cancer. a the treatment points data trends. there's important then expectancy picture some the broader life also bigger if been advances ask of

your book, trends? rather exposed you changes we're look favorable So reasonable seeing? more that is insured trends so the infer it unfavorable would in are claims any the as than at to seeing to you the population be And

Anna Manning

but you're the slowdown we that what a to in Hi. The Mortality by Erik, right? it So of absolutely public despair. data of major desk part that driven improvements, correct. there's does suggest points call being

and think So as much. populations, affect about which the opioids suicides don't our younger book and impacting

causes perspective, we And our from remain our diseases. bullish. cancers cardiovascular are there So main and

mortality improvements. We long-term are bullish on

going to to continue for We that the believe business. are positive long-term be trends our

Erik Bass

of Thanks. any benefit claims seeing of the early I cancer realize, you drugs in I and some but in mean prescription advances it's bit the anything your are there? data on having the terms on

Anna Manning

too No, early for that. much

Erik Bass

Okay. Thank you.

Operator

from And Lee Kenneth our question comes RBC with Markets. Capital next

Kenneth Lee

the Hi. color it's Thanks us could question. quarter? perhaps impact you And severity my can quantify for you frequency? unfavorable whether taking Wonder more give Mortality in the on if a business whether little in within potential the more around Individual US or bit

Anna Manning

QX very quarters our had for year, But our and in the sizes above higher it in The quarter. fourth a than average mind, say count. claims saw and we claim keep pretty much avenge full additional the strong rather somewhat line. in and a some [ph] But where was we would sizes I were a severity more average in frequency expectations the

I winter related. not that XXXX had unexpected the way the frequency that the season. bad we given And performances and about flu the that's was hard So miss think

Kenneth Lee

to the you. And expectation And are improve follow-up business. just if of within there Got year? any initiatives Australia Australia the business? ongoing other return any the kind is one remind profitability to Thanks. efforts could that next repricing Could on the just profitability you business are ongoing or us of sometime

Todd Larson

Yes.

ability up business. would So the we or we're as treaties they improve block, selective being we profitability repricing in-force on say have for renewal also what fairly doing as I reprice. we And to new are continuously the the to including can those come of

to really I on as as make Australia hope in in-force to business. sure profitable like then block can. sure make be selective goal the we return we Our We Can And new is as said, somewhat profitability? so. it

that As I we'll hopefully, result march or breakeven for earlier, continue return. as forward, probably then XXXX, to we see mentioned but plus minus, profitability

Kenneth Lee

Thank it. you. Got

Operator

question next comes KBW. Krueger our Ryan with And from

Ryan Krueger

morning. from at expectation? deferred a that can Good look of us for results you typical sense the much your you Individual When Thanks. full year US give how Hi. XXXX, Mortality

Todd Larson

Yes, worse to but year we're we than about of fine on it's put but say, hard are, have would that Ryan, a I million overall. would expected full point sort $XX-ish

Ryan Krueger

And add Thanks. think you've to then have I of Asset-Intensive quarterly transactions the on reasonably rate a well talked US run it. of to past you $XX Got $XX to as million in but about done some million now that. earnings, big

update you you'd your us hoping give expect in on could an term what those was given I transactions? So

Todd Larson

recently. have We transactions did Yes. nice some

that add rate still in-force the these Although Asset-Intensive run number, blocks, is we blocks, I remember because to a well. that, to good would newer some million of pretty $XX that off $XX of have as million you still hold blocks on amortize these as

blocks adding newer is So the blocks somewhat are of the that as offsetting we're some off. running

I'd also still is on a say mentioned full of way takes ramp estimate million $XX the to to some works GAAP So as past speed we've it the US all-in, some the in the -- newer $XX bit million blocks of earnings. accounting a the to good little up sometimes and

Ryan Krueger

Got it. Thank you.

Operator

take we'll Kligerman with question next Credit from And Suisse. our Andrew

Andrew Kligerman

could one it good earnings Traditional Hey, like that the on what type I'm give on of on And wondering two deal in it put was? morning. transactions fourth the Canada which little impact color and And quarter. was you us the maybe was? looks a you

Todd Larson

mortality it Yes, Andrew, related. was

the the date in the actually So probably effective the quarter. of was in And ortality big quarter fourth block. fourth in of latter because year not impact the a part

a earnings quarter. significant had for the to the have wouldn't impact So real

Andrew Kligerman

wise. earnings how maybe going into particular you about it can Any size And year? next

Todd Larson

reasonable those year earnings into into don't as go next or do mean that. transactions size should we've add XXXX. normally we we No I But

Andrew Kligerman

the you Or to that base I be X% about? in give should should considering we Okay the another base generated thinking X% guidance $XX.XX there is when you XXXX? be

Todd Larson

looking a time Well intermediate our as can you've year-to-year. period look not of quarter-to-quarter base and volatility some certainly to necessarily earnings that's in. seen Again we're there our of year-over-year. business be And in at at just

where period power So what true And a longer we intermediate mix just time what good some of it call we business at when at over try normalize pretty think and looking should look look but and it of we is do be. earnings look growth I'll are feel of the the at our enterprise. we the results what at we prospects guidance and more is to

Andrew Kligerman

just last on one maybe then APAC. And one

seemed earnings guided to you Your in It How mentioned you premium much to lumpy. at kind the previously catch-ups. But of earnings? came XX. XX contribute did to that XX

Todd Larson

on as earnings. Yes excluding term number it's also premium But our the million average. on best rate experience exact Andrew. But which got hard you the this you've well. in volatility But put on also for to some I there can it's is a earnings the on Australia impacts $XX quarterly is happening the around that the an to provide basis amounts best-run probably near it here

Operator

our take we'll next with John UBS. Nadel question And from

John Nadel

like has the than been rate? Still there base that's that mentioned. intermediate-term was an for is onetime I and really adjusting XXXX. some sort the that's think year earnings not of full about premium items your if growth the growth reason the think individual an I I we to any should premium X% bottom understand growth And slower for catch-up X% X% at line just a grow year Is think But why target. any of that

Todd Larson

Not necessarily.

As currency few But in number we And have again I some is capable live X% moving account of that well. what as is it's our of time your U.S. to will foreign business X% over that with producing. business outside it a in is of the a Then what feel we to show mentioned premium also growth you'll rates into the have parts. part there's happens good some the good take

growth minuses. capable business our top of. bottom But So is at board our rate the growth and pluses rate that and some line line think we

John Nadel

sort relates Okay. balance from it And about alternative partnership sheet of that thing. effect then we as lag some limited maybe if think a the investments to holdings

above release at the should very not income? just is what typical kind as on weak but was expectation terrific of think the impact relates maybe XQ impact guys this XQ that sort just point of I your mentioned about Given in income to think how that variable XQ? visibility a in you the investment we little investment yet an it bit

Todd Larson

our our some of comes and lot estate from feel A income real other we still Yes. good JVs some partnerships. there's there. variable And runway

sure if there's can a color your not understand I So I question. more I'm lot add

John Nadel

Yes less partnerships fair? these the thinking on just of maybe investments is about that equity-oriented a kinds but are market-related I'm lot limited impacts

Todd Larson

that more the and and to Yes thing properties not to and of se. businesses some related as correlated investment type Markets underlying in per necessarily some Capital

John Nadel

thinking would shortfall X% encourage we're the example you Okay. of if Traditional I'm intermediate-term shortfall effectively U.S. sort not? individual for in results results And U.S. about did just XXXX your would the EMEA? the expectation fee Adjust $XX then thinking XXXX about but in typical maybe with mortality to X% better us for relative on some or million you during in to the offset there's you to that

Todd Larson

where. say our some I'd what because U.S. than we that expectations expectations had it had some that off year. Group results We the were better remember are our for lines so Well

up the of total you have have the lines. going business our to shown Just we're in pluses consistent But I of I think given pretty we growth show the the few our add that various business past to given these able it in rate. minuses think nature all that we've in and when diversity years

diversity will of sort by but because all to over hard give you continue unit they'll and the hang business think I little in to be together. time the bit it's total pluses volatile So minuses

John Nadel

Bigger the for sort being sort strong. interject outlook composition still you what activity relates it as last quick. lying potential I in the commentary And of just shift And at? it guys looking really the you're Any about know also talked of to and one too? of could pretty some you pipeline And for picture. Okay. deal if

Anna Manning

seeing the to going pretty deal pipeline. so across for we're is shift see not question across sizes a are yields pleasing regions what and I'll is on we're No a us the pipeline that take across the seeing and particularly steady risks is. Okay first that

be example deal U.S. seeing in the For good flow

business. Asset-Intensive

deals And active. Asia. some expect Reinsurance will seeing We remain longevity and from Asset-Intensive also Financial deals

a look that to perspective XXXX oh to very XXXX? look will from say similar the overall similar I'm question? expect did I Langhorne pipeline sorry very will And I So XXXX. on XXXX

John Nadel

And Langhorne at a helping on a capital from will time well haven't we sourcing continue both as you deal-ready with we get as continuously to its get but ongoing transactions. one of Unfortunately the the yet We're on that first we executed know as Langhorne. Langhorne Langhorne fees we'll return looking itself. just transactions the I think in some matter vehicles transaction. invest it's oversee before as well as

Anna Manning

that would I It really just speed with add our Langhorne. isn't. isn't goal Yes.

We are keeping full standards.

deal We get are a done. corners going to cut But to are get going our not to we deal done.

very towards. our good we and That's that deals hard are fit. working want that's So objective we what

Operator

And our question from next we'll take Bergman with Citi. Dan

Dan Bergman

pipeline if want lately? just completion you're quite But have products or start especially the change seeing? any block the up And To is deal like or strong. for particular on question. any level competitive sounds of It areas deals I activity there's update to following been that see

Anna Manning

Yes.

a remains But also strong. raise surprised by few have be have going not seen it's in we entrants periods strong. you're It seen but to we about few is answer. leave. is Competition prior and new the as my pretty same a that So

was? of So part I'm overall this both say new these the the the re-insurers. I the and those question edges. re-insurers And some number of would rent competitors of but of on are roughly sorry established competitors second that same your and

Dan Bergman

between or particularly at products the geographies I there's in thinking moment? of any if maybe mean terms just differential or kind in competitive less terms areas different of competitive

Anna Manning

hasn't think that the I of those level the I deals. last the it's deals pretty all size one the that but at The changed competitive competition at much number factors of competitors of quarters. say over fewer of Well the larger larger deals would that midsize really is course have

Dan Bergman

just comes X% up it's on and growth shifting your the deployment factor to Got I X% which the given recent that expectation. guidance. that recent deployment of it around XXXX is base? to in weighted into kind the thoughts the just pretty how EPS Or was it. back the heavily And that follow of then be to So medium-term would short-term was gears just a growth about of any Understanding wondering helpful. to capital elevated half the year. be as earnings think could stronger impact capital

Todd Larson

Yes capital that capital level the it the does deals. really consider into deployment ongoing of

XXXX those were normal little consider the we bit our right of of than a does You're deployment year higher but in into it and towards part second the capital transactions.

Operator

next from Our with comes question Evercore. Instructions] Tom Gallagher [Operator

Tom Gallagher

questions. Few

terms of or further just terms what the annuity you in income in hedging is there breakage of First just some that? the variable on net can volatility block clarity give further color on drove that? Was

Todd Larson

small hedging is We we increase much you was quarter. there net this operating amount it earlier is or the our the for part by is of then the I component derivatives. quarter income losses. $XX Yes was and or unrealized I income. as reserve. the And as the volatility I mentioned say derivatives was embedded would mentioned had some Tom. on the was that this between living piece some Yes mentioned then what had coinsurance you disconnect And relate GMxB our also had capital think material embedded capital this some some Asset-Intensive a offset in newer of second sales credit probably reserves third But the pretty we benefit negative of in impairments then we the around it that and quarter that some to transactions repositioning coinsurance impairments some of mod a And brought was modified for treaties quarter. were million on some that concerns losses. there realized then due we on

really disconnect disconnect worked wasn't not there there there. the So GMxB and pretty any between the and those on was liability against any the hedges well

Tom Gallagher

generated in you in been would the would was was than quarter was there income better the noise in net barometer some income And better capital on line net that say your that net income capital the have the the by the generation performance? a or you quarter implied of

Todd Larson

GMxB things Well embedded the can pretty derivatives unfortunately through turn they like well. go change around the into as do retained quickly and those earnings income although

impact the can did certainly around. for they turn So those quarter but capital

Tom Gallagher

And quality different looked but quick your just others is on performance book care. long-term vintages know your than you. quarter? Got the then one I really the how in care curious on and industry that just long-term a of this

Todd Larson

And care performance Yes so long-term for as not quarter of long-term for of care variety. year newer that the I advantage block right our around of would but the you expectations. mentioned the only characterized

Tom Gallagher

Okay. yours repricing competitors knock-on to have led significant some recapture effect in then instances. and pretty has which in-force our reinsurance companies blocks them some And been of of an primary of

not doing is an see I stand an we not have it think is of you're discussed with something whether update you're trend that's opportunity last more to on and doing you? where but considering for if on you you wanted this that been that that and just that

Anna Manning

them goes will we think sit consistent relationships look do clients we with to in see is The rate back relationship and clients try about just with we'll the that with balances our and described in and line. long-term where that update those What to the we broad-based work term. with long global with those we remain we broad-based down and business is and the very you that. When bring relationship is in and with those strategy at how pursue our clients isn't recapture our activity increases that

we've and the that that Certainly being pretty yes looked strengthening of that offer this at how of opportunities in important I market. approach us. think I for can relationship the terms think

Tom Gallagher

So that fair to pricing characterize way nothing a a meaningful standpoint it? from Anna is

Anna Manning

standpoint. a repricing Nothing from material

Operator

from [Operator Instructions] Sachs. We'll take Goldman with our next question Scott Alex

Alex Scott

I for had been normalization kind guys think just Just and our the I low to the investment particularly it looked you capital VII It when quarter-over-quarter kind it to relative deployed. out calling some about bit I just of quarter. excess a net I about has think few income since relative of a items estimates guess last housekeeping that

in that kind you what should maybe at when comment of I could XXXX? you expect consolidated we if look investment wondering been had that there net Just income anything and

Todd Larson

look together at the we what And household Asset-Intensive the well you look is business. block I the was outside But call I'd X% if corporate that income the that look say which think spread as you those block traditional the Asset-Intensive and pretty our investment way it expect. because Alex is asset-liability matched I at would if block about core we a at up

of it I be in the there some derivative some accounting some some if it the describe all be of assets. works there. flow due Like but at of volatility way through look some not to best way activity think accounting some the of can and that it items could you to the just to

Alex Scott

there investing in I then it things otherwise think in and will kind that the corporate will And the into about out I our that some be impact Okay just will the it's I of RGAx XX% how of think can whether XXXX? that continued you call digital XX%? investment help like you're or drain compared to So loss do think there or us you a

Todd Larson

mentioned in as the we quarter that their as RGAx is corporate the are average some Corporate volatility. but I of on there's a investment out XXXX say some well. which in loss to of a will be would about segment level segment as activity quarter-to-quarter higher for a million one probably segment. revenue the offset happen going I over $XX some we mean look And expect you there I at Yes over to time that activities

So be it's with. work on you $XX to estimate to is million estimate good predict it my a around best there's but for but a little loss for rate some average going quarter is bit hard again volatility to

Alex Scott

kind deals? last included stay interest universal any Okay reason been of closed a this for Is one out I a deals you do There's of notable bit more that couple life life. come beat block those maybe pays me. transaction? how the that in that for pricing maybe of there the U.S. recently so environment type in little sensitive guys you mean of the insurance

Anna Manning

of the sailing. in is the successful products risk and of in U.S. risks living part We successful type our re-insuring risk products we the with leaving been policyholder or to with investment would of partner the block in-force type That's haven't compared behavior those those A are mortality us who with of type open the other that not splitting those maybe of the others the re-insuring risks and be to look opportunities an appetite strategy have for is might parts the or and same products mortality retaining risks.

able have So to terms successful of top of risk I that execute. being been list would in say of at that the return in terms that's not we our propositions

Operator

for additional no Instructions] to remarks. the we to questions it in at I'd time. have [Operator closing like it turn back presenters our this any appears or queue And further

Todd Larson

today thank you for well participating RGA. our you on Okay call very much. support Thank continued for everyone and

Operator

conference. today's your participation. Thank this you And concludes for

now disconnect. may You

Reinsurance Group of America (RGA) 29 Jan 192018 Q4 Earnings call transcript