RGA - Earnings call transcript Q2 2020 | Reinsurance Group of America, Incorporated

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone. Welcome to the Reinsurance Group of America's Second Quarter 2020 Results Conference Call. Today's call 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

Chief to Thank Jeff Head this XXXX Quarter Leslie morning, Barbi, President morning Operating Relations. Officer; of Néemeh, welcome Chief you. and RGA's Risk and RGA's our Conference Manning, Porter, the Chief are Investor Second Officer; Officer; Hopson, call Alain Chief Good on Anna Executive Jonathan Call. Global Investment With me and Officer;

non-GAAP reminder discuss measures. the results about second forward-looking financial quick and will We after information quarter a

our to Following we'll your take happy prepared be remarks, questions.

statements. cause expected your for Some yesterday results of actual results answers expected the or materially results. our to materially results. could issued we a differ to comments differ list questions earnings to may Please release refer of contain forward-looking important from could from that Actual factors

these call, supplement her the measures. financial presentation, see include during of comments. Additionally, website I'll Anna GAAP course turn and we call for and quarterly provide may over release, for the non-GAAP information of to measures. And our terms earnings financial reconciliations now earnings to Please this discussion

Anna Manning

you, Good Thank to hope healthy. you and everyone are Todd. all welcome staying and call. the well on morning, I

their to seamless and numerous The all has health moment and all our much and Throughout safety their pandemic. a continues heartfelt of provided articles, take to well We I and RGA's clients. for everyone operations suffering to be support my run and published meetings families from ongoing to the webinars, ensuring appreciated. and expertise would productively. services who to priority their and our appreciation and are to that continue commitment teams were through and RGA which who uninterrupted quarter, and me knowledge express Let or friends, to received virtual consequences global my like smoothly economic dedication shared lost our this of sympathy of member a to a express family and the top employees devastating of

We during to ongoing of thought are these leadership proud contributions this crisis.

reported of pleased with these adjusted and to pandemic quarter Turning operating We environment. for the quarter of $X.XX results. EPS the this results context in the are

million COVID-XX adjusting which in reporting quarter IBNR. claim the cause-of-death $XXX million, lags million part morbidity the U.S. Total outside $XXX in quarter U.K. mortality of the reported be in the totaled claims business. costs of million and which remaining for favorable were COVID-XX costs are COVID-XX and and $XXX business individual the U.S. the Specifically claims related offset million The U.S. by $XX mortality estimated non-COVID-XX of to claim in globally, mainly related were Canada. large in experience. individual were were in $XXX

Chief consideration own mortality the future our when on We the impact have in of in the in Risk despite and an highlighted model. resulted have overall the Officer, global and Porter, Jonathan population of level our estimated assumptions path revised the on model we model deaths, projecting of provide ultimate previously on emerging our a pandemic scenarios of our updates reflecting on and decrease reflect some describing higher experience, information updated data our will the virus. additional shortly. results uncertainty ongoing the information conservatism U.S. to updates modest These

well. better-than-expected most performed we our COVID-XX, for of effects in particularly results the were as operations with operations and Beyond were some of performance or pleased business the line

platform. our the been engine the We power earnings diversification benefits that and built highlighted from X of global decades long highlighted the the over last have has

quarter. resilience quarter value reinforced financial transactions This platform. reinsurance completed motivated We that again and several of the the the capital in

transactions, of amount U.S. increasing we asset-intensive capital deployed in into reflecting force quarter, opportunities. on in part competition, This minimal a especially

capital to a value. taking North see and opportunities opportunities disciplined to crisis financial deployment carefully during by America, prudent, strategic this Europe and We're continue Asia. balanced in against approach We weighing and long-term

be have and investors' of stuarts long-term capital. continue our to very good will We been

some strength. remains challenges of there in RGA and Although unknowns, a entered the pandemic position

measured our buffers. to capital proactive balance actions to raise build During further additional strengthen and the quarter, sheet took we and

increased reduced and risk our also ended billion. $X.X capital with We in excess investment quarter our portfolio liquidity of the

and and economy. evidence I period positioned largely underlying are results think through a power successfully the in demonstrate there's earnings plenty well of this uncertainty of quarter for is to to our that manage our the we virus global intact continuing that

creating of remain our of well the of shape capitalize in our are this from the strength and and RGA in emerge RGA to the value. track to on placed to strong on in the pandemic I franchise. business confident good We in continue build value long-term record opportunities to team long-term

leaders health remain industry life your are you and to reinsurance to you in the and I We many for years safe and come. and interest well. remain RGA, hope so expect for in all Thank

to results. over detailed go turn financial me back Todd to Let the it now over

Todd Larson

markets down basis single as X% mid- results, well a quarter, from the will on the expected to in growth the RGA's high currency reduction with X%, part Thanks, in from digits slowdown growth temporary periods, position. reflecting constant organic and in of reported the we Anna. in financial as lockdown growth approximately of a some Australia. was review prior Asia actions our premium make I of for capital premiums, comments Beginning liquidity investments consolidated on

than segment, the earnings we our by individual the to have significant been the excess of business the XX which quarter that in in are Jersey. mortality concentrated affected a states to million. data, were And and the claims states the Latin lifted a Slides and New this on Starting those ratios potential similar XX claims also not reported a traditional of excess highest negatively in population cost as and have based elevated U.S. yet. the states. the the claims emerging X American The COVID-XX And wearing over of more assume cause did ago, were claim with presentation. policies the comorbidities. selection Mortality underwriting believe with across of we of death. mortality related of where age of death in the $XXX amount years underwritten is New results consistent off excess was of ratios analysis specifically general policies known that recorded cause the majority for specifically, segment the Turning when with the U.S. more and percentage York significantly desk, approximately on other compared mortality highest we COVID-XX We to X COVID-XX saw of and remaining

the business to Also be reports these of our lines the group U.S. U.S. in were majority traditional believed COVID-XX our in excess Our of segment, that of and levels conclusions quarter better are our results with also related. of are death expectations. reported significant CDC modestly indicates consistent health than that the that both individual vast

Latin U.S. new the Our U.S. adjusted business from rebound equity and and result, America benefiting the Latin asset-intensive reported Capital reported a in resulting in an markets. business growth. increase Solutions America good from income, operating

Moving in in results the of another to solid Europe. U.K., and a offset of by in mortality favorable but good EMEA's this This business moderate by Traditional the quarter, material was another had reflect line impact any very Africa second in impact The the impacted the Financial group in moderate Due and the quarter. amount had across region traditional the some favorable performed reporting, believe our have quarter. good morbidity COVID-XX longevity, by East catch business by absent we was from start Canada's Traditional lags amount a reflected segment, favorable up we would COVID-XX segment offset overall. but including Europe, Solutions the of results a favorable don't This segment to to Continental some our claims reflecting with client Middle our reporting. of benefit expectations In business, COVID-XX, had would year. half expect seeing COVID-XX, segment Canada. performance claims, partially

to our Asia business. Pacific Turning Traditional

quarter, had the underwriting loss. individual were experience with at inline business breakeven profitable no-real outliers. was group as was benefiting a most solid inline and in Australia a The geographies disability at a Asia results while better-than-expected from

loss for to quarter, the the $XX due tax average rate, income adjusted lower pretax income effective on the Asia primarily or adjustments and operating in-force expenses. returns. lower earnings, from mix benefiting tax incentive global the rate below very quarter, had Corporate expected and growing Financial operating XX%, primarily XX.X% new of Our than the and segment favorable GILTI, the was from compensation Solutions The geographic activity. business tax run adjusted travel-related XX% to of low of filed and intangible Pacific range lower good from The pretax other reported million another

Slides and at Looking X the in earnings presentation. XX X,

The versus financial influence non-spread a markets certain quarter the we first quarter at to March below-the-line and embedded investment XX. hedging relatively we derivatives. in saw unchanged As ended items rebound yields of their X.XX%, and the the expected, portfolio based upon reversal

lower did investment Variable some expect. average Our levels portfolio still quarter. coming modest cash increased a quarter, were in believe the slightly the run portfolio improved new as defensively of credit the downward money our the was crisis. on put We we positioned rate. were rate relatively into investment would the pressure but first versus below impairments income that yields Overall,

maintained. quality rating average A was portfolio of Our

We leverage growth the and to $XXX capital senior billion, increased a actions first $X.X in capital that out to point the of favorable. death at relative our end and ratios the quarter, engine to in reward less quarter and risk the of liquidity raise under to our targets public the cash position and limits. had million I'd added to to net the strong of excess our Slide $X.X increased from quarter. also second COVID-XX RGA's has we at was dividend. $XXX stock first million the XX, end our has of enough following issuance. cash assessed considerable We took of outlook reposition impact equivalents billion like the this our organic common quarter, absorb the level to become fund of are where On billion comfortable that securities and we earnings $X.X

we with of position long-term of capital creating to support record on the confidence to Our underlying opportunities, the clients uncertainty current of business manage liquidity in earnings value. power to current strong a track levels capitalize our our environment the reinforces continued and combined and our that and are our

negatively we of some forward, ongoing our COVID-XX affect will see earnings. to impacts Looking expect that level

accurately timing impact. predict difficult it time, the this to and at ultimate the is Although

RGA's value that expect continue to will for strong We long-term our produce shareholders. franchise

difficult achieve our obvious targets the will However, given uncertainties, hurdles and to it in near the be term. intermediate

more provide who view turn some COVID-XX into call impact will thoughts exposure provide I Porter, Global greater the We not now will pandemic. Chief as Risk Officer, insight over looking of we we will forward. how our the information gain the Jonathan on to ultimate

Jonathan Porter

our on global Thanks, Todd. businesses. This of assessment on morning, I'll provide potential mortality update COVID-XX our impact an future the of

mortality improved, Anna estimated death but As is general general by population a expected this possible of in to has population in for mentioned, offset our each claim particular deaths, the range U.S. higher partially cost be

through in for detail. we that a this on walk illustration of a in million. provided between time, scenario, mortality global Let the $XXX of little $XXX At scenario included deaths me of this based quarter, extra Recall more the COVID-XX which million estimate on XXX,XXX pretax U.S. mortality an the costs claims potential and impact was our last claim

COVID-XX multiple on larger other claims own The based selection insured emerging In used that million a this updated have additional as most assumed. number to individuals in life population costs, change lower of model other Several now million. book shown data of our decrease will claim drove mortality reviewing key These insurance deaths, estimating figures general $XXX material. million of and of experience estimate the we be and same words, presentation between $XXX expect than of the on is to lives XX we on for as who a general impact our $XXX own our were reduction range impactful we business deaths general sources. the in factor mortality that are updated previously insured We are approximately a of estimates assumptions are model population assumed lives. of pretax had well that related Slide population the

to including made we mortality are better seeing markets reductions. book. age future country-specific other These resulting the impacts we general that refinements, applying experience in some general the We our which to less calibrate to models these and increases we were material, claims believe in the in our also Overall, in updates population rates in some insured and operate. resulting

are and appreciate, the is a application claims which data, As of you therefore, our number of on analysis can to uncertainty. as well set underlying are assumptions, and model on experience as estimates expert subject judgment, of based our based range external own a

risk globally quarter, half our mortality the Slide of is last of diversified more and on material, of the our exposure provided amounted As shown with again than XX outside U.S.

are we there as them exposure amounts the for virus a scenario beyond, representative the claim regarding demographics the for estimates of future also U.S. XXXX every additional we general $XXX given million. for as where order and shows mortality in be of considerably costs and in be how Canada deaths other it our and have between expected pretax U.K. of near current Obviously, in continue our U.K. key our population population although virus COVID-XX a other largest all course of Slide However, to COVID-XX claims U.S. U.S., additional deaths to level are exposures, global to global $XXX XX to to and than XX,XXX XX the future next QX remains Slide in the models U.S., million geographies. mortality calibrate Canada, underlying both to countries ultimately XX,XXX starting Canada uncertainty and for in will these the and additional the for driver estimates In takes country general the X apply mortality. XXX,XXX term. death. RGA of the the in in XX,XXX estimate in mortality path costs the mortality of countries and well U.K., the future expected claim claims the and these impacts of we estimates be this would estimates scenario, expect population population lower for The

estimate claims Finally, worth is are impact the and occur that claims otherwise to assume continues it that that medium this over extra claims is time. noting as of would to or this unknown modeling short not our whole COVID-XX difficult marginal accelerations and at term,

earnings include range With any of emerges. hand from impact not it a benefit I'll that, Todd. claims business, longevity future as mortality see although positive Additionally, would the of to provided we does our expect to back experience

Todd Larson

like up That concludes We'd now Jonathan. for to Thanks, open our remarks. prepared questions. it

Operator

[Operator Partners. Instructions]. Dowling & And Humphrey from first our question from take we'll Lee

Humphrey Lee

think of this potential on quarter, Todd, still of It's the both about think XX% last that kind number the really -- see the of still prepared you quarter, earnings much in about remarks, longevity talked kind benefit? kind didn't in I this second from expect potential Is half. talked the -- offset the kind to guys as you your this but of right offset is of downward about, the there. to you Is you emerge COVID-XX sensitivity? how about given think revised kind of kind

Todd Larson

as lag the didn't part of half first yes, question, because to it. estimate business missed see far sort the mortality I a year go look you us. to range XX% how to still that last of come reasonable view But the the have scheme But we an because of then your in as to Humphrey. we as the the to ultimately the is reporting insurance that of the as there's at from still on the lot potential so offset, underlying far offset

Humphrey Lee

it. And see kind of potential your then the half a Okay. in kind Anna, second countries. about you Got deal other year? let in become talked I just the in you Asia more intensity but in terms the the of don't bit in more the little performance U.S. competitive, capital remarks, for for outlook opportunities pipeline asset maybe and Can your of of

Anna Manning

on and going a environment. reemphasize, generally overall, just we the pipeline. Alain a the Sure. provide more I'm competitive to pipeline little Alain? ask say color healthy to and see bit I'll

Alain Néemeh

Sure. Thanks, Anna.

deal that healthy I normal lumpy. in seeing Todd think Humphrey, times, we applies And Generally as fairly the very here I process well. are, is pipeline. as speaking, think, mentioned, a

we've different of times. got levels Although different competition at

fact at wouldn't to Asian the I lumpiness transactions. going I in to, in we're I U.S., speaking, Similarly, EMEA, times, competition. a pretty reiterate, closing generally pipeline healthy in have some And of certain you diminish think, these as strong. think think see want I a we're while them. think, level terms as the of well. in there's alluded do to those opportunities I the I looking and business, we But reasonably there's that is

Anna Manning

good Yes. of shown very Humphrey. And that may, quarter facing let me like pockets time, to for environment, we've that as I general then see protractive had innovation rate of solutions. the our solutions comments, do We're innovation periods a a changing to and underwriting demand for we'd process. this for good for play And if those interest competition. as product demand at we're those in we by We've I additional transactions. at on the in solutions. greater that period past our some provide well continuing look if and low executing very in this those expect capital-efficient navigate spot, We And opportunities on as focusing sweet

that strength, underwriting. of really to product and All our development strength in plays our

are somewhat would but are X do So advantage. we an remaining focused, very have comments. where and finding echo I They're spots, we Alain's lumpy, we sweet

Humphrey Lee

environment growth you think a lumpy maybe to kind make environment? your in lumpy current current of do headwind will outlook So years. the just the -- given And of the couple next will the premium more present

Anna Manning

we question? question. didn't expect the part last I'm sorry, lumpiness about catch that Is It the of the lumpiness? premise of increasing? I was that Do your

Humphrey Lee

No.

premium effect so make environment outlook? your, -- of, that growth And materially you impact worse? do to the like current think lumpiness the meant So kind so

Anna Manning

our The in-force referring lumpiness, to we're transactions.

mortality do part Our business. part these our organic although spread-based blocks as premium fee-based driven we large in growth Because in are underlying of transactions force flow by is large well. transactions, in or

temporary we demand. the that a would asking? most lockdowns organic terms think pent-up expect as I premium crisis up, parts you back were even pick that out the of come in potentially it world, of environment, Does some address reflection the the the stronger the is growth, to of In question with of

Humphrey Lee

Yes.

Operator

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

Andrew Kligerman

was to APAC. such anticipate and a call I number like of Todd looked on sensitivity, I'm in should start don't on cost like I than expected. and take wondering that APAC. the it from mortality no better that Slide that very claim part there's And then And question, I'd Australia noticed the -- was said level you that the low COVID-XX mortality XX if you breakeven.

that this or think we good should this rate? losses revert So business see Or is a again? run start backward to will you'll group profitability

Anna Manning

Andrew, over then ask I'll your turn mortality Jonathan, to address Australia-specific can and the first Jonathan, mortality question questions. to question question, please? and Alain to with we the start Todd

Jonathan Porter

Yes. Yes.

why as we're noted, U.S., impacts the we claims about estimating other for point, of provided, the our combined the we countries. didn't X will countries on the account and you At break And XX. Canada those So that's this the of all have for COVID-XX XX% calibrated Slide out U.K. costs. mortality of that

that's your current and So of amount as efforts I in countries. of relative our demographic the is both impact modest mortality well function Asia think rates or exposure of correct. to some that our in And assumption our distribution of small and that's a a add, projections relatively just those the assumes business as the the

Andrew Kligerman

go sorry, I on Todd. see. And -- then ahead,

Todd Larson

manage the reporting continuing We're Australia, closely. good corner. is given in but or X. to the Todd. what turned Yes. performing we've months, through the And to last X it's we claims, But are pleased see very the better, first some that in-force disability the see the closely we're suggest managing losses. results seeing Yes. I to still individual the too that On very think to year group we've this Andrew, premature it's seen very is

the of to need on block to and still we continue eye rate keep an to we'll business, the continue reform entire So to extent we can. increases

So to hesitant some still on in keep we volatility. it's need I'm that turned so good see forward, eye it likely and say still results the see could we an corner. but summary, We far, to going the to

Andrew Kligerman

scenario? is you what see. And I an starting think the is cite occur? of you Or Slide I'm kind that wondering, a random your just XX, deaths population a is follow-up. that additional assumptions? to XQ. U.S. general likely And quick underlying In And what just in so, if XXX,XXX are

Alain Néemeh

Yes.

take me that one. Let

really we're listed the to the underlying the we a We predict around COVID-XX, uncertainty of the that range exists So think end aspects was here it's again, don't where million a because assumption. of to think just up. but we scenario considering all including $XXX that scenario. across it that one outcomes with of or think no can $XXX reasonable, It's of one of range is of that million going possible ultimately ourselves

provide So it illustration a outcome of was our an meant from to possible perspective.

Andrew Kligerman

a COVID-XX. assumptions big to right? Which wonder wave Is is forward. moving Any me that like kind leads very big like you're of number a assuming XXX of that second

Alain Néemeh

from Yes. we really burn, much of I the that timing make the wave, deaths sort it on of mean that a second conditions. wave the at again, or that whether look of difference. perspective, or results. our it's It doesn't kind multiple various is occur -- second slow our ultimately really, drives of number views that so incidence And of not,

we possible that options, outcome. what we but for kind we're scenario at again, can a So now multiple is the the at the this of potential future, in and feel where happen given consider

Todd Larson

the outcome, to that This add that's everything difficult. the I onto quick. going think anyone Todd. can And Yes. don't why Maybe real that's predict just uncertainty. is on is did and It very provide. ultimate we

the ultimate we this provided. deaths of sort every estimates on are population can potential means own what far view claims as general take as These XX,XXX activity. you at your best So point,

Andrew Kligerman

conservative like sensitivities. your Hopefully, it. original Got that's

Operator

to on next question We'll JPMorgan. from move Bhullar Jimmy from our

Jamminder Bhullar

talk companies they'll using the excess you is My It's equity be excess just same time. capital, at capital. when how first question about on define odd

and line excess haven't how that's how as well, then capital, you manageable and the you So to a numbers? given of standpoint number clarity deploying have a on of would ends capital relatedly, from you've the Clearly, maybe past expectations. capital got but think in risk by more COVID -- credit mentioned you first things. about being do then And your you've with the is So compute than these a the have if let's then absorbed the would lot an way sort up -- thing. mortality in say, been

that? deploy? do and starting how proactive And to when do to think you you So more about start deploying become

Anna Manning

Right.

ask on So your he your I'll Todd capital. if address thoughts define first ask question has we come how provide And to to I'll provide. question management. second excess additional And any around on and comments some also Todd, back capital

So Todd, can we start with the definition?

Todd Larson

Yes.

So as what we we needs. various do, adequate risk capital models And the have of that that lot a look then long-term first look in of as and viewed world of economic the also a capital counterparty used meet to make at to our to local also, agency also various foremost, models attention then our helps internally sure we because underlying We're and to long-term of need pay our levels to to own be all our us very limits. the to And capital want companies around operating regulatory form solid, view are at business. the rating some we very we clients. a ratings we important

So what's is very counterparty. the strong a for them, important U.S.

and little maintain capitalized to we'll to So need companies maybe make and perspective. want things tilted to where our the always ratings bit our those agency models, towards operating be appropriately rating they from a looking all a we keep local at sure

Anna Manning

fully I'd so active, with I crisis, through. question, us we've to being balancing that by active. continue expect opportunities saying that weather prudent. -- second we're but to your where we on continue we work that been remain start this to to positioned do well To then be during And on

would to in I And potentially and as to around some Now the we balance look and impacts we outlook well. around out, shift, and virus, term. expect certainty does of in then say the we that happen when economic short clarity that don't start terms would as the stability need

would that if along So haven't this we'll have the balance change seen we And activity very long-term bit. a engaged, there we're and that back way support environment. and actively any be look the anything continuation for the you been will prudent against is else started, our perhaps good continue to add? pick Todd, in continuing to clients, in since anything crisis we up opportunities like

Todd Larson

you think it, Anna, I thanks. covered No,

Jamminder Bhullar

X age I'll mortality just average in ask of the Have forward, At and that other versus sort clearly, point, -- primarily in you deeper seen the your this on are the to pull claim into is. And discern you've the U.S. the more maybe the a to XX looked like claims Life older pull of them comes how every if some by you And population, better -- maybe the forward year the determine But -- try through more one of factors are many business. the or business forward if years XX, years. quarter. in the obviously, recent pulled claims all right? the

that the years few over how or of next on couple any your of -- So positively earnings affects but negatively? comments

Anna Manning

-- if The claims? the of and we We estimate hard Yes. question, very the then or claims large think ask I'll like the period day, of very answer to much of we this age to have Very the can of would acceleration But any question it about add. very Jonathan some that do few accelerations put on at over the extra point, possible expected would given I'll our to Todd answer are that think see claims, that of figure course XX-plus. Todd? as XX-plus a to it's at But periods. this difficult people only once. next how and and in deaths the Jonathan were concentrated at of die point. have of it's we that -- that end to to majority -- certainly particular, part future that a obviously, hard is of at the or

Jonathan Porter

Anna. on No, that's, projections just think assumed acceleration, exactly you And another why what a with that's haven't mortality Yes. consistent for I go-forward said. our again, we extra basis, right, reason

Todd Larson

I be Yes. is, elevated claim add more we we of now The we're see And through but through side. temporary was to that of only power we'll the may activity. overall that said, when thing probably be the other it organization, some traditional I the would able earnings when a being acceleration, mortality -- the to what get is get so we period business, of I view including going think that, intact

Jamminder Bhullar

But forward earnings next true, pulled Yes. that that -- from claims be value being or in assumption the right? otherwise. Obviously, is years, pulled all the the year have but years. better be to present -- they year the and else I lower, equal, then that would that lower, -- of if that earnings fact, say X the actually X X would higher, should is or future X assumes not actually earnings claims are been forward would next are, and Correct? than but your extent

Todd Larson

gauge Like hard at said, to it's point. that this we to

Operator

And next KBW. Ryan we'll from Krueger question take from our

Ryan Krueger

expect, I had that dynamic? the you in your pretty the from the offset on reiterated you -- more I longevity offset question elevated near-term, has your can of much given guess, more the longevity deaths assumption U.K. risks longevity I the would longevity know there have XX% to in I been significant, U.K., cloudy overall where in given rough of the risk, that guess not a a you but about been

Anna Manning

more any that the with it's haven't our categorically to think will U.K., likely the difficult -- earlier, as be haven't going Todd lags, we seen say I'd be and but given in state, date, situation of we to we seen case what Ryan, we've to forward. it but mentioned yes, the

Ryan Krueger

those? COVID any of coming for U.S., Got maybe difference just you you guess, give on -- how it. what focus to through how insured typically between detail, I normal And for expect the then you'd versus it's relative kind think the mortality? population And could

Anna Manning

going turn to it Jonathan. For over that I'm question, to

Jonathan Porter

Yes. Yes.

So the difference projections. our we're for all-cause we're in, markets assuming most we're seeing or insured What same just to that will general COVID-specific the now population is of deaths basically go-forward across equivalent between and the for what mortality. be

that information early we're we as not well we otherwise applying comfortable assumption model for was the full sure of differential that's when a experience more lack we're last mortality. extremely. data, all-cause at determine that just our looking now quarter, see would Again, based we So as that that weren't on but

Operator

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

Erik Bass

I the up typical this your that on a how that you're think does talk now. the was seeing amount kind when long of of seen catch hoping come experience And could longevity or Just is through now favorable quantify benefit actually it about a lag, you of maybe something what results? to you've take then the I in for experience kind a of trend when incurred? the so is as quarter? the is And this sort And EMEA. it follow-up -- bit was

Anna Manning

Yes.

to Todd respond question. ask your Let to me

Todd Larson

Yes. Okay.

right, time, up business, some Over longevity U.K. type given the the reporting lumpiness been You're primarily in we that of thing. Erik. there's U.K. and and get catch

appropriate the still it you think still over longer that rate We period bit of target mentioning for in that a think past to of in more run is on. the total I sort little look we've at least, been a $XX $XX need rate the million So EMEA couple million range run time. of to here quarters, for to at

changed catch to the they're and positive really that Unfortunately, things. information time client up up. time just the hasn't truing updated types to this point. So inventory do of usually because those it's see It's of getting usually we from the at and

don't back I million. the $XX looking run But million of EMEA the that the of $XX rate again, quantification I'd that So total specific true-up for exact quarter. to to have tie at

Erik Bass

What may Got general, pretty it. seem assumptions. see does I is I driving favorable, guess, think, that And pricing No, in do been to it relative that's continue? helpful. the trend I something mean, consistently you has your like that?

Anna Manning

Todd short have it's term, favorably time? the Well, we that sorry, part impacting, the other obviously, they're be but as direction, that term, longevity of some really a the as in they good we're of It in, mentioned, part long And the -- performance assumptions price improvements offer intermediate attribution. business. temporary answer when provide may to, the and the just -- slowdown you alluded could of It's step we difficult, be long-term to period region. term very how business and lock to with detailed there. of very mortality volatility, for the in I up both necessarily come would very set Erik, there's It's comfortable business, smooth. don't some that been and There's performing

Erik Bass

I some And about Kong? in if uncertainty could about just then could Hong also potential Asians. impacts And market you organic to talk if any from in growth of Curious switch the outlook. near-term the disruptions

Anna Manning

your ask Alain question, address to me Let if may, I Alain.

Alain Néemeh

Thanks, Yes. Anna.

think you of over out, year, last pointed Hong as Kong pre-COVID. I disruption, the particularly there quite has been bit even a in

little we that would over levels. new say to continue expected the course fully we that ramp back to bit run our the be can a rate, expect year our might next the think up more business near-term or below normal of, expect but I So

Operator

And we'll question from next Gallagher Tom take our Evercore. from

Thomas Gallagher

seeing session terms renewals the that Or and First will changes question. expect continue do what's for the the of new primary be And at you on in-force insurers? treaties Do any both impact impact you and to life all wake any happened the also, you there? here? does stable? pretty pandemic Are the rates on in conditions think to

Anna Manning

our in but as gauge it's would certainly up underlying has that the highlighted really the just too well also reinsurance seeing expect clients, Consumers what will so could to offer growth saying itself. other the solutions. fashion I during insurance early risk that of not and of of value to the happen respond this I both transfer, the pandemic, rates. seeing insurance market value reinsurance as company, life value insurance been by

also certainly that further side. purely Alain. Any session Perhaps we -- could I'll on that it's that, I thoughts on the add? think you would we're see yes, I expect ask to the say that that. So to seeing to would see we but like session side it

Alain Néemeh

Yes.

think I right, Anna. you're

impact been this on pressure no far. As downward believe be you mentioned, there'd to session And any no rate reason so that at really point, there's on that.

and In probably wouldn't course life reinsuring companies end think day, see terms pandemic, flu excluding the terms at of of the are dies of too early tell. that. insurance the that I or front a end the a conditions, the whether through and But I life on we again, to certainly, us and

I terms So any changes in significant conditions. and wouldn't expect

Thomas Gallagher

Okay. to it that force. or Does the you're before you're cause risk as you out raise way strategy, to how do my hold question, would just about are thought viewing is it, lessen overall? thinking to, way this risk consider I to the whether materially a given how ended about capital equity? guess, And asked to better follow-up offsetting growing enterprise net book kind pandemic would the risks a thinking the that's have? about adequacy, is, reconsider here? And you relative equity in I to you that adding up more just exposure you what raising you then Jimmy the overall morbidity risks the balance call follow-up how a really given to related some capital of guess mortality, longevity Or that you you just

Anna Manning

right. All

Let me take parts questions. of those

the So your Jonathan let question. capital me to to speak And address raise ask then equity questions. I'll

being the a impacts on developing and global there likely to of picture long in how, or of by was just until So the And vaccines equity. and period that much pandemic would a specifically done. the a vaccines why on when highly over we crisis, the We those addition recovery. uncertainty you we when to And around looked felt was raised on to see the were or couldn't see I'll the time, virus, how timing continue how end. out were saying, at economies start damage uncertain. therapies treatments the we and therapies would quick

long-term spoken opportunities. that, in attractive these in pursue a to to value for sure because we valuable prudent business morning and strength our making capital we've we're felt So stability was long-term the this that and protecting franchise well buffers we're are and increase about it facing important positioned opportunities growth,

Jonathan at look with saying, right to the address it's conclusions premature end believe over at and this. not at resolved your today, this to with And has end capital buffers managed we of it's rest And lot we're long a by maybe a shareholder was not and we today decision, of we've term. As consistent -- continue the was our look I'd as out the choice, ask prudent increasing that, think to that the point. Look, I I'll questions. draw I how any

Jonathan Porter

Yes. Yes, Anna. Thanks.

capital and have level still economic a quite the basis pandemic account exposure. an up I'm for So capital perspective, to comfortable required set from handle that with we from of

we things get us environment. into like have morbidity I say I too. And So you're at think think about And asking that would point then as in over last decades, been sure basis geographies any on the diversification. think don't a in out, guess served I -- go-forward no employing our the so over that both diversification there. strategy several we're concerns diversification, -- strategy. looking I factor a different thinking I'm this has experience you I And well we'll guess, I now, having

Anna Manning

can amount was It business. meaningful the were always we for add protection pandemic bond I maybe a costs add be is buying to then some at I other find or get that from type have which given hard was of looked too to maybe protection, and we just the one can scale found instrument. other And a that one -- What mortality protection our just provided. capacity other of of the cap time-to-time, some thought, expensive

benefit-cost see So we good didn't options. not and continue to

the So going by look highlighted, way as and it's do it's is, which framework our we business. diversification, by risk look will it, we Jonathan at we so at risk And to through managing appetite. continue using the forward. That's

Operator

comes question Citi. next Our from Dan Bergman from

Daniel Bergman

To start, capital looks capital the raises, quarter-over-quarter. I excluding like guess, it flat was excess roughly

excess of generate other forward? quarter a decent if to So about? earnings second remain are you'll looking growth need we the current around deals is level, and the reinsurance to range Or the earnings adjustments forward, be and or buybacks going to thinking proxy capital for flat keep need premium block there level minimal factors

Anna Manning

to ask you can I Yes. Todd, the question, address please?

Todd Larson

in we then year. the And what how of would went our for estimate you second over it's bad that's of and year. the a think through time think of look estimate you that COVID, be look But what for Dan, way can be I our -- to can if ex-COVID I probably not don't it. at remainder power the earnings out half is Yes, the at much

unknown the be to as transactions growth would we organic that think capital and deploy fund the into how sort any potentially as dividend much fund I the attractive? had then we've of earnings look in-force well

Daniel Bergman

a expectation? guidance And depressed? with to maybe the Should prior kind helpful. Got loss corporate. remaining prior near-term of quarterly a travel expenses just Or remain expect it. then guidance, maybe favorable there reasonable some one to quick on other That's really still that and is we loss

Todd Larson

Yes.

little that maybe average have under should go some the would of $XX second the wouldn't the per be a updated the I say I through now, an here. point. we'll rest We did the additional loss travel year. think through of reasonable. on for sort a I coming little quarter loss -- But hopefully So quarter in loss still bit million but at we in this But the a like the average provide as obviously, forward, bit maintain level of lower items reduction

Operator

& question General. next Our Agrogiannis Kostas Legal from from from comes

Konstantinos Agrogiannis

going I'm personality to a my bit. deferment, regarding for guess goals I capital so sense

I you current COVID-XX ability. and the capital think excess absorbed earnings losses by have the that mentioned Regarding ratings, would the expected been have you

I was worse the still lag we back have from within do if capital editing of going Is you consider stable deployment, it to have because reporting a claims has capital much a QX, -- previous experience reports, I'm million you maintained reporting? $XXX around the also outlook? and S&P kind asking whether QX to expect Therefore, the buffer While I'm ratings. the what from

Anna Manning

should Think that comment our lag net reporting was positive we longevity respect earnings. to of expect which in be business,

do on that understanding about felt in the am be we that the and Todd, any I thinking of question then in if would -- have claims not in business, quarters, the We have all quarter lag following I'm the our question. have correctly? mortality incurred

Todd Larson

the comments, your it out get was question, answer, for breaking Based not on So but that's or did me. all I right. I agree, -- your agree I think -- completely hear I

Anna Manning

your in Kostas, does yes. Yes, that fact, address question?

Konstantinos Agrogiannis

Yes. about was Yes, It deployments. capital future it does. mostly

In lag address it reporting terms it. of on but yes, reporting, -- lag does

Operator

Meredith our question from And from next Brian we'll take UBS.

Michael Ward

past. on I that Brian. in kind the on of hedge about Ward is that expanding natural for we've phenomenon This Mike spoken guess,

of how a to longevity curious lag, we've that So just it you benefit in frame course, years? Does the in it usually occurs, through that should period we elevated benefit when how mentioned the got this, maybe comes there's wondering, little but thinking does that long piece? kind take of mortality Just like it take kind of or about through that flow for offset? quarters it that

Anna Manning

first, the which quarters, lagged not has for depends. is it closer It's it to years. Obviously,

operations. operational We clients. have And of And number means also then the have a transactions, and processes. clients have pension different number of the schemes underlying scheme, that underlying the themselves

general, correct think at So me not necessarily. I years' perspective Todd, Jonathan. from we're on in average, or perspective, looking it quarters' a few

Todd Larson

No, I with comment. agree the

Anna Manning

Yes.

Michael Ward

Okay.

helpful. And so that's

share. So you excess said of And I'm an us quantify would you curious you per EPS million think I out or quarter? that just claims, the about if the understand thinking didn't we -- translate $X that favorability over but so have of could the $XXX just I'm help quarter wrong quarter, maybe I'm but if longevity on for any back COVID contributed this into that this other that, benefit

Anna Manning

Yes. things other in other I'm going there -- going directions. were

you help just to that give Todd other some high-level overview So of did. some to just ask I'm of items to the going frame you calculation

Todd Larson

Yes.

to impacts say, need You the that the, in mortality could elevated to, you looking addition just at back. add

need $X.XX experience the the to underlying maybe quarter of longer-term to put component longer-term around that the the adjust. type and added we we're see expenses that, to sort additional variable to some as some the those by as in share. were we composition expense need year, but compensation at mortality to -- number, to significant reduce need given impact rough You -- so going going And look savings some travel the savings adjustments to related made, also within need of to a a incentive of compensation maybe it's so that expenses? -- there In this you programs, the related expense it's savings related a that to maybe I'd be well compensation compensation and adjusted and back would

Anna Manning

in estimated is U.S., million And global $XXX and I add individual. thought cost, $XXX million that would the other one the is

million part outside offset of was due to in $XX and performance morbidity nonmortality. large other the recall that in The operation, it favorable that business other

that contribution somewhat contribution a And be that case, be suggest is that because up we'd adjusting -- continuing performance. permanent think I although from could for over for million the that $XX would from somewhat back to it aggressive aggressive. that love

Operator

for time like to that questions for have today. any to we concluding over ladies would call Larson is all Todd back And turn and I gentlemen, remarks. Mr. the unfortunately, the

Todd Larson

for you you. our call Thank everyone, earnings joining quarter Well, us today. on thank second

look very as the appreciate As always, continued forward you the forward. dialogue continued and to we we support much. go Thank

Operator

ladies appreciate that your conference. once gentlemen, today. We again, today's concludes And and participation

Reinsurance Group of America (RGA) 5 Aug 202020 Q2 Earnings call transcript