RGA - Earnings call transcript Q4 2021 | Reinsurance Group of America, Incorporated

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Operator

Good day and welcome to the Reinsurance Group of America Fourth Quarter 2021 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. Anna Manning, President and Chief Executive Officer. Mr. ahead, go Please Larson.

Todd Larson

Leslie morning of With to the me RGA’s and Executive Anna Good Porter, Officer; XXXX Risk Relations. Chief call fourth conference Manning, Officer; Officer; Chief and call. this Hopson, President Chief and you. Investment RGA’s Jonathan Head welcome Jeff quarter is Barbi, Investor Thank morning on

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

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

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

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

Anna Manning

today. everyone call for costs operating which $XXX share. per COVID-XX and you or we of pre-tax night, in $X.XX joining million thank EPS, included a our adjusted of morning, $X.XX reported Good loss Last

the COVID-XX countries. Africa, and of levels claim Jonathan COVID-XX quarter while U.S. and on In had favorable COVID-XX claims other performance absorbing of the continued business were we further in shortly. South a a This quarter, our will is insights active more story costs. global in claim momentum underlying material strong capital management while claims meaningful provide moderate level

I stream high-quality Global a regions. business very to very earnings notable proud done generate the the year, And performance the across to record profits. highlights all earnings. work of am GFS of our Financial business this Solutions delivered business growing and have some strong a for the to Turning teams for continue full year lines build had for the to quarter,

Our trend. performed continuing well, recent U.S. business a Individual Health

underwriting profit. Our favorable Australia record COVID-XX business small were a impacts as were results also quarter The the Asia and traditional modest. reported had traditional business a profit in very

our cautiously quarter, level across into Also of deploying in transactions full are a notably, of regions, were general and towards history. developments levels. successful $XXX Australia Europe. across progress EMEA terms the XXXX block This longevity activity start continuing in more capital new third the in active transactions, a ongoing dynamics building number We quarter and a and several products. million $XXX year transactions very and million, industry the and in-force levels, good transactions new into this deployments annual optimistic are of quarter, Organic capital deals the momentum. conditions, Asia showing were was of our with pipeline. We sustainable as range highest including about market again the deployment broad-based good We of a all total our U.S., an year brought to notable on business this positive pricing

addition insurance the and shared realized sheet. for to Investor the of during despite discussed our many real from December, Day, and as about the some be yields, demand future. of and were in quarter products the in we challenges and business quarter, partnerships. in-force minimal gains resilience to in we bringing shares new limited deploying capital low our total And $XX results and reinsurance business ventures joint year we to market transactions, And Investment from balance continued this strong support to $XX our the the reasons optimistic estate impairments favorable in we continued quarter people, the dynamics demonstrate our we from Investor of nice our These the we in for for see at our repurchased also markets in favorable traditional solutions. As were Day many clients million. organic highlights million our block our see

although from the to are current variant signs And uncertainty as we in see many such, would places. remains, expect infection that Omicron death as move their declining First, levels there from we forward. are decline levels

to efforts. RGA. the our the Second, been of and we well I global to and relationships, I many excited proposition the your earnings our on of the positions client client depth these combined capabilities remain us our value that our in and we been new hope for RGA our long-term expertise be have through and and Thank during interest adding opportunities difficult achieved platform, capitalize growth all attractive strength partnerships times all have future. move strengthened of with material and finally, extremely well. business you technical about stay continue have safe proud I and confident forward. we as you remain And

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

Todd Larson

the pre-tax for negative $X.XX and share. adjusted EPS reported loss per a of of operating $X.XX includes quarter of which $XX RGA Anna. impact share, Thanks, adjusted million per loss COVID-XX operating

experience COVID-XX did claims, underlying While our a non-COVID-XX level of we strong. meaningful results were

XX equity was was X.X%, on operating months net adjusted which COVID-XX XX.X%. of of trailing Our impacts return

loss. of liability. tax $XXX.XX. currency And billion approximately release FIN our X.X% adjusting all effective in the tax for earned quarter, reported Consolidated For the the and segments. in the lower The full excluding losses income incurred the COVID-XX This good share, income tax When high primarily from quarter adjusted is value tax benefited for $X.X in jurisdictions. growth net X.X% was costs. was organic income of on growth was effects GAAP to X.X% for AOCI, year, we absorbing due across grew rate per jurisdictions one-time significant pre-tax achieved the saw pre-tax to quarter. as on in – quarter tax increased expense adjusted operating pre-tax the claim expense a The XX book premiums and X% after items,

with America approximately $XXX U.S. claim mortality Slides listed our X COVID-XX the presentation, U.S. of on results balance business segment traditional the and earnings included X majority the cost. which $XXX of to of in was group our the segment and U.S. in business. million million of Turning Latin individual the

excess also as directly This the we our than related to favorable non-COVID-XX believe higher mortality Individual which the or the We overall. non-COVID-XX indirectly to population performed consistent COVID-XX. reporting. The is to better saw CDC claims, per business be with Health U.S. expectations experience

favorable expectations to realizations. was limited performed impact The group quarter investment line was real partnership with COVID-XX venture of income the Our business non-COVID-XX strong Variable and by in offset U.S. due in the joint claims estate experience. as

claims results and reported demonstrating this due income, reflected results Middle million. The the segment, business business Intensive life $XX the cost of higher Canada overall handful The $XX Solutions UK. continued cost of experience and claim mortality million performance Canada and from investment strong the was Africa COVID-XX strong the Asset million experience. in with longevity a which of Financial traditional in variable of COVID-XX $XX South segment impact Europe, million East results of segment. results in Traditional experience $XX individual and In Africa claim segment reflect large reflected to favorable favorable total, unfavorable

quarter COVID-XX in We or this to reflected some related. growth of good favorable as Africa, directly experience South had business claims also a the business. excess believed EMEA’s results impact longevity indirectly and saw Financial Solutions mortality of be

new adjusted of record in in gains experience minimal partnerships favorable Asia operating primarily Turning business, one-time segment Asia-Pacific is year for Solutions results recorded and of quarter impact a the strong profit loss some business. operating reflected COVID-XX to business a and Corporate including $XX small reported The due investment Australia adjustment experience the quarter higher to reflecting reflect favorable underwriting $XX higher than growth loss for pre-tax adjusted with the method, good million million, one-time our Asia-Pacific achieved quarterly equity unrealized our general had average a reflecting a income. India. accounting which to quarter. Other very Financial in first in pre-tax traditional a quarter, reported expenses, to The full correct limited cost. The run-rate,

the expected annual adjusted run-rate. in item, this operating was loss the full line Excluding year with

yield realizations. non-spread reflecting variable joint quarter the estate investments, was the to on income, investment for to Moving real venture partnership portfolio limited primarily due strong X.X%, and

perspective, nominal. core of investment the investment predict investment part were our earnings. in from While timing quarter, a variable again to hard income impairments is And a

Moving $X.X billion. our approximately quarter capital excess management, end of to capital was on the position at the

remains capital $XX have repurchased Our strong position ample deployed of million $XXX and liquidity. transactions in-force We we million and shares. into

to fund and U.S. dividends. This by and underlying sheet balanced management through into emerge In power power manageable. second to the underlying like January. – notes, approach funding In earnings our note strong COVID-XX quarter surplus company, balance our impacts we took highlight summary, to return in us earnings a are impacts Also, believe of $XXX global our we shareholders our well-diversified advantage the issuance growth, pandemic the I financial turn executed our Company, Reinsurance flexibility. in capital provide attractive issued our COVID-XX RGA from in platform, positions our COVID-XX, of believe organic the positioned from operating capital deploy transactions good ability would Risk and who related quarter, capital repurchases our Porter, highlights RGA agreement will over attractive the market over main quarter, will deliver now I additional also returns to experience. time. based share on conditions call which enhances comments Chief to Jonathan followed financial to that our backed and absorb and Officer, continue our shape issuance inaugural to of to million

Jonathan Porter

data General review based past global X then variant, based the claims the QX. about COVID-XX the mortality Thanks, variant. an the is U.S. material, were QX. now to from on still notable population reporting. CDC of on however, QX; for Todd. am takeaways majority deaths views non-COVID-XX Omicron shows some I from impacts XX transmission. population experience deaths and new compared mortality which absolute XX% lower up seen experience to CDC reported QX, in our still excess expectations of were basis months on relative responsible case vast for but updated COVID population Delta The shift general going are: largely to general compared and has The QX QX on is provide Slide population a to

where in deaths majority indirectly levels still is exposure The there life XX% ages or to deaths to from believe proportion ages in declined excess continue about are is below these insurance directly QX to the earlier of from related more elevated pandemic. QX, population peak observed that We the XX, of COVID-XX at the but COVID-XX.

were individual U.S. CDC results mortality Our consistent reporting. the with

COVID-XX sizes million costs, due claim million the from was improvement mortality with of Full our general policy the There were in in the $XX approximately non-COVID-XX higher of to $XX $XX of when population to every at claims, mortality is for the million of partly to $XXX thumb slightly looking size, claim COVID-XX claim million in that with driven in underlying Approximately within the million the lower as population. reflects incurred QX. deaths to estimated rule experienced from million book amount mortality in COVID-XX quarter this and of a by an impacts estimated on Africa average ages experience, mortality. costs. updated periods is range our remainder individual development U.S. level mortality million based of line we what the reporting above in excess which on relatively are industry QX XX,XXX India of wave rule claim South of Our early offset claim by data the size, general COVID-XX a our thumb proportion mortality This million accounted XX% experience costs estimates of our QX COVID-XX impact return including lower of lower your of $XXX quarter. Other the claim from the due from are costs Notably, and largely Delta population in and midpoint claim $XX which quarter at for UK, the account non-U.S. quarter are levels are cohorts. consistent level. age the about of the estimated younger were as markets, population range. for QX is desk. prior large quarter adverse half results well pandemic. the by India of the XXXX development frequency estimated updated believe We Canada in of or experience $XX in notable modest, claim deaths. at level declined claims, general given by this no more general favorable year Excess at prior U.S. was the in lower $X trend this issue as reporting for driven

the is to more is severity variant material due in variants. particular, look vaccination is the infectious nature and/or that there Omicron uncertainty ahead, that previous also than we populations As infection. Evidence indicates the prior in developing of in of reduction variant. levels and high persists the Preliminary data impact Omicron of outcomes, a clear with

this result stated At relative mortality season levels the falling time, new markets, the but where higher to QX, are is a mortality see in in that still levels counts those so developing,, very experience also Although may by maintaining the current higher points flu ranges driven decline elevated at additional by COVID-XX UK favorable result infections at previously claim to our in to thumb far many deaths for we from of is variant. typical case Northern general Canada, of due in The the the QX to claims. do We the impacts. remain reflecting season. to still see Omicron mortality a QX high to cases. number are drop variant rules partly now remainder data consistent expect of expect end of the the US, seasonal quarter, Hemisphere will is January deaths flu. with cost population caused current be This due we recognizing would the over Delta that and ranges,

Omicron confident will We models of We which the as we of update rules manageable. impacts over into be into if expect and our becomes QX, available to will thumb, data more future mortality it have remain insights needed. that incorporate our course

to back it Todd. hand now me Let

Todd Larson

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

Operator

Our with Jefferies. [Operator Dan question Thank first you, comes Instructions] sir. from Bergman

is open. Your line Please go ahead.

Dan Bergman

hopefully to color that into similar just due forward? about seeing past to bit guess you’re be preventative XXXX, few Is on deferrals could COVID this drivers does little main the a over as the desk? this and as in non-COVID the we move came on just kind excess how care lag years? over and what a quarter that trend deaths, you thoughts quarter the down U.S., trend was great? excess there some screenings do moderate to thinking start, we how hoping said, Or how to I further I evolve going there of terms expect non-COVID any but population could remained expect the should in is in of going you the any it be on would expand of elevated. you’re you If

Jonathan Porter

Yes. this Hi, is Dan, Jonathan.

vary to while I think So excess it’s that still pretty reasonable is That though. COVID expect population continue does mortality by country, material. country will

have So between excess mortality increases in you the we definitely we data. mortality increases look a COVID when in and correlation as at seen pointed out,

of makes things be really the is these are direct of one think that I indirect causes to COVID. the believe comorbid us COVID or tend with death that

deaths. in the So to COVID addition, Alzheimer’s, with like diabetes, things But that. they move tend

timing and vary again, So we those come would death as country. expect by But in decline may down. would to it COVID

Operator

question We with Sandler. Barnidge Piper will John take from our next

Your open. line Please ahead. go is

John Barnidge

about about maybe note you the Can the one maybe did fourth as in you. geographies? you. the the funding You January. well an about opportunity another in agreement you Thank as opportunity? doing talked Can size issuance talk quarter, Thank of talk

Todd Larson

This John. set we program ago. up is a couple Todd, actually of Yes, years the had

guess, program have billion, I a that’s up. been We set $X

exercise another and January. it $XXX business think we to capabilities lending well. did nice sheet we allows well in it a as balance And investment because like I to as issue million mentioned, $XXX back our RGA’s as November you spread million As in us adds

it’s good but market $X it’s of So to program. us or issue. market you’ll issuance, the to the we see be I a when billion we will continue time a overall, think But in think cadence time in that periodically

Operator

Humphrey We will go next Dowling to Lee with & Partners.

Your Please go is open. ahead. line

Humphrey Lee

and thank you for morning Good taking question. my

Dan’s on earlier Just to follow-up question.

As populations on kind think at the the mortality thinking pandemic on pandemic about pandemic. about looking necessarily general mental post we the how mortality may but near-term trend, trend that affect the based think of health, the of post comorbidity, and would you not impact the the physical more

be impact. on other that hand I think an But one medical the could side, the on help. advancements could

kind how thinking or ‘XX, I up? So of to you’re will ‘XX let’s hear that yes, shape wanted say, about like mortality near-term how just trend by

Jonathan Porter

no Jonathan. would yet. of of you impacts it’s as Yes, resources itself. we’re Humphrey, Obviously, expect devoting so Hi, to conclusions impact lot assessing the firm the a internally pandemic the beyond

and I minuses. think what some There you pluses be correct. said is going to is

mortality, could certain like other increases direction. said as then might cause things in medical of and conditions advances So the well, delayed other diagnosis like go items, but you

feel feel a Day of I pandemic, or point. still that like like we Investor the could probably there and beyond more because in no we mortality communicated there, long-term term but think headwind even fact, in these negative be will this on specific at shorter in December, for but the of more mortality and balance, bit still be or we improvement little positive the at quantification benefits some of developments, is

Operator

Tom to Gallagher next go will with Evercore. We

Your go is line open. Please ahead.

Tom Gallagher

this I about it. a But if little excess why your missed drove can went already that? talk sorry sequentially. by million What you $XXX Hi, through capital bit went and you up

Todd Larson

Todd. it’s Yes. Tom, Hi,

So income for we generation. – actually we operating positive though net loss the quarter, even an had had actually we

for capital that good place the one million Then a and of we well. have securities market added surplus the to also conditions, issued opportunistically base it. ability long-term that So given surplus a the price relatively piece a that’s thought was very $XXX we its we note as note to attractive

Tom Gallagher

Got it. Thank you.

Operator

to with KBW. Krueger next go Ryan will We

Please go is open. line Your ahead.

Ryan Krueger

the for both the in Are excess non-COVID the thanks. you of you fourth – to year? U.S. able claims mortality amount and quarter estimated full Hi, the quantify that

Todd Larson

Todd. Ryan, it’s

have to have would the at related I’d it year fingertips the size full U.S. to mortality. I the get about $X.XX excess For to don’t the that. back you on my quarter, for

Ryan Krueger

talked that in Got have quarter fourth Thanks. And claims companies recognized negative it. on guess, I then they some think the I third about have COVID development quarter.

at view can If incurred thought they you able an updated actually you I point the you than if give claims – this last you in and to, had higher in third were you, – guess, time, they what were are of quarter were if the quarter?

Jonathan Porter

Jonathan. it’s Hi, Yes.

reporting I go Let in factors, claims of bit and guess, that COVID a is that that little There just One of actually, for amount our I developments two take down one. me death is into quarter-over-quarter. QX. think, came cause

would reduced we estimate. some you the it as see as more recognized we that think, up. so information, I have got to was QX, But mortality, QX, have So in brought that would said, did related which

probably not I’d little So QX dramatically but balance, for a bit would in what last COVID mentioned we say, quarter, it’s higher on have than so.

Ryan Krueger

Thank you. it. Got

Operator

will Andrew Suisse. next to with We Kligerman go Credit

is Your ahead. line go Please open.

Andrew Kligerman

good Hi, morning.

Just incremental case Hey, ask cut my I just claims. in to the clarify excess get in off, questions on orders. I’ll

guiding claims. I quarter COVID think XX% last to you were of the like

to just guidance So little I want a get on that.

competitors reinsurance a COVID, are is or claims this your Europe whether the classification really the really not have can’t challenge. of actually in dissect said they Some that COVID

outlook is, talk Latin numbers C, then to the you but was why give look driving you. specify? you you’re numbers. So had you my on is you one you XXXX? And in just Could confident Thank that America year, lastly, sneaking premiums. in COVID-XX growth your in, are don’t little Part as question X% could and clarity in the U.S. about what what these towards in Maybe and I a for growth January, that confident the renewals us we net COVID you

Jonathan Porter

Yes.

and question. then Todd, can take premium me the you Let start,

to is is in think the level in the excess access of reporting quarter CDC And we percentage total as this with what again, the of COVID, number consistent see down just from that’s a prior where lower quarter. on I So relative U.S. the would the deaths

I’d maybe say or in higher. the it’s so, So bit ish more XX% little range a

comes probably a call COVID look as what in as what far most we we we COVID, actually do actually I reported claim. As in conservative we what at think is COVID a the because is what take position as can we all classify we

a as to COVID death, us information to then we do an but have. for the extrapolation really And we cause identified of specifically claim. it’s proportionate amount So just unknown of

and anything it’s COVID. we we’re come a that are feel not we which designated So claim, include unless not think COVID directly in does that that including potentially I don’t means things as directly

Andrew Kligerman

That’s made on you was saw what that was you that related. that believe There by mean the number. indirectly XX% you extrapolating it something label

Jonathan Porter

let Yes, so me just clarify.

cause So all of on when I timely on of our death say extrapolate, we a claims basis. get reporting don’t

would XX% claim report way. let’s And to for say, sure what don’t we of what would to for will the where quarter as yet. because on reported us death So information, we we COVID based we to you that know current gross a we in be is that have as XX% example, of cause death COVID number up an have the cause then account it’s

So to to proportionate has back accurate. go the assuming reporting out our when get it’s we turned we basically, as be business, which historically, pretty

excess that So comfortable The is we’re that. we that with into COVID all. that at number non-COVID enter feel doesn’t seeing piece

So that’s it’s is how – excess as the and guess... Then well COVID general showed I claims, again it’s look for top you the where a reporting, non-COVID there we population. COVID then the of XX% graph split of at CDC that’s which question, the in sort premium on when how that

Todd Larson

Andrew, Hi, Yes. Todd. it’s

the I change. that an is premiums, mean, in impact treaty there from we a – the had On quarter,

underwriting low-risk facultative X% board? I And full good full some case. about wins to had I small across probably take just discussed premium to a accounting, a from And a transaction year, last – quarter. some a call then think wins, flow added from growth, in-force, organic growth. we then the that which this on clients went step and that combination we and is at continued of the accounting we’ve which a what had treaty back risk look We the if

Operator

to move will from We next JPMorgan. our question of Bhullar Jimmy

go Please ahead. Your line open. is

Jimmy Bhullar

Hi, good morning.

the EMEA. and and more as margins – like That’s you the lot a report tend question I specifically It So not a Asia seems and happening to overall population. claims move first, it’s just than around sure really what reporting delayed your terms extent and COVID on I’m just of in because what’s international to that of business had and stuff. different is in Africa then over And talk very got you was India see and or the both especially the that this how as the few quarters caught well? than reporting, to next up about could it delayed do And it you well? extent South think XQ XQ then or to if you’re as you’ve you’ll is something issue

Jonathan Porter

Yes, start Jimmy, with so India. me let

you’re So right.

quarter, year. So down from wave, two in is were from this deaths we driving had the nominal of COVID Really the peak things which that, versus QX the one India. impact last a population was of significantly Delta

So the of estimate not that high single-digit was millions. new our that’s were reasons those one not I’d large. the was that of incurred claims main – say

The to it past to our X offsetting was IBNR. down other piece that get impact development million from overall favorable

little a in up on the being ended conservative side. So QX claims we that bit estimated

you two, when those it’s So net million $X the impact.

little story the is the opposite. bit Africa, of South For a

So we of million related $XX QX had that we the more than talked about impact to COVID $XX that million was experience. about, half of

developed impact described what So what was turned in back more sort we estimated that I insurance of the India. had really, in population, as information out of significant opposite so the QX, than COVID it the on

about for million, million specific of $XX accounted that So about of the to $XX experience. the million million $XX $XX QX was

each – estimate I approach it our an its quarter. its we the of nature, of mean, because use is Just IBNR, nature relative for kind to

lower had saw is in wave, described. we the general decrease the going to based recent there pluses But as South most think substantially minuses well we’ve in on which I I do So in that QX. be data updates the what just as mortality and like is than Africa

think will the going our true-up forward. I we comfortable material with And plus feel or quite minus, of likelihood IBNR. overall, a be lower

Operator

with to Markets. Capital next go Mark will We Dwelle RBC

line ahead. open. Your Please is go

Mark Dwelle

questions. have Yes. morning. Good I just two

million if question the of share could you the times net, longevity question, And growth? why been couple COVID is, it India? enjoying couple a on the to you first benefits. the loss You you last Do could amount have of share as $X loss the a in mentioned that pandemic, have what’s The like second gross of were seemed you – larger earlier minimal. in relatively fairly quarters thought changed? The the

Jonathan Porter

Yes.

let India net me make So to so in – correctly. just I’m gross sure in

development QX? So prior favorable looking you’re what just was impact for prior quarters, from in to the the

Mark Dwelle

Correct.

Jonathan Porter

Yes.

high single-digit QX itself than taking is millions account just if estimate prior. experience, it you it’s rather isolate our the of into So the to

to So Xx a on going offset other COVID in of than what is in death very Again, understating was quarter in that’s seeing that was One thing maybe what Delta consistent India, by direction. we there with the more population reported. large significant same Xx earlier were waves almost based and actually the in reported the claims to that that that to amount tune mind of we had believe mortality saw we now QX. in the the to data, that mortality what’s keep being prior in general the pandemic we with large cost

than probably have pandemic. don’t impact as data. population what – would of the distribution little that you’re the numbers the then though longevity right, early we just So, the benefits That’s And bit even in that general business. been function have seen a the the of largely less our far as a size the helps happened sort quarter, show goes, in of in

So, large longevity business is of the in proportion it most our of or UK. a

in centered the especially business as population. due for So, vaccinations the older quarters that is adverse and probably impacts far to few to in again ages, we some that’s of UK, less a just mortality which past as our the in levels of have the see number longevity high of older tended age is where

UK. based did we forward, We and in as say nature quarter feel to vaccination we as well was in could attribute boosters over COVID favorable going geographically offset. see more things on probably confidently because a of like just didn’t it We and the didn’t to reporting it just COVID-driven. distribution the the modest the now, So, we have of experience would expect longevity prevalence the ages

Operator

We with Sachs. will move next to Goldman Scott Alex

ahead. line Your open. Please is go

Alex Scott

good Hi, morning.

First had COVID. to sensitivity was the question around I

couple I appears the has think picked of some a last that portion. mortality, being kind some earlier in that’s it to be up bigger pandemic, relative And I the quarters. of think excess to of under to age XX of sensitivity

you be So, of life has Is of much feeling group versus what to if recently through and the side? what you understand could experience are sort changes maybe this? to been on I of looking you and the for the sensitivity? just Delta And like the associated compare the far on life. individual are in how things impact you versus group gauge January of would with contrast that an rule thumb Are part seeing whether are then necessary to Omicron interested so

Jonathan Porter

Yes.

on on QX. So, here did will I about on million impact see We and about and group from so on our healthcare mortality. $XX is of COVID business specifically. of About in focus group just is U.S. one-third or two-thirds that

still the mortality relatively a So, modest impact on side.

which but the – had I group Now that was not am experience, said favorable sorry, as out also your immaterial part meant before. forgot also, expectations in and second amount, I COVID non-COVID Todd an that, largely just question. keep is of mind our The we

Alex Scott

compare some just would in Omicron in you interested was from things Delta of to variant, I which…? contrast the

Jonathan Porter

Yes.

Sorry, Yes. that. sorry about

we too rules of looking against that it still that it’s think as of one going have. I just data mean I we why we that reasons signal at thumb are to the we That’s be to So, evaluate early. the wanted

Most is that what see our do So, think population given the months, at that we wave Omicron peaked. can so far material, Delta insight age point anything we between what of the extent of there by in so when data to extrapolate we to demographic couple we relationship in or there. likely that far. driven the accordingly. to, lives the there general of use credible But characteristics get January the update just is we yet kind look to rules have to of will thumb over seen to other insured is we our or would little then share would next a no And more

Operator

Research. with Bass We next will Erik go to Autonomous

open. is Your ahead. line Please go

Erik Bass

that that or you you capital are that other excess the for of surplus did And fourth in you with maintain of note? have like quarter the the of want repurchase level the inexpensive what about growth capital going to talk you sources to shares, capital tap forward? Can you. opportunities either could deploy you your to then there Thank given kind Hi.

Todd Larson

Erik, Todd. it’s Yes. Hi

post-COVID value and type So, or as other we got quarter, mentioned, the Investor strategic we I have as in environment, through could ways and source in efficient well about we think a means also strong as talked we Day power underlying at demonstrated retro etcetera. I you of earnings developing think as to sessions, embedded transactions capital the fourth are that very be

our capital sources So, environment, given we underlying current we again, post-pandemic expect power excess comfort other back would capital capital. get to or to the would of level be once to run more – below and of our generation with a normal plus earnings access

Erik Bass

it. Got

excess kind capital. target mean of given business? I think historically, has level, in level million being still to it same for the the million about the Is or the growth higher that $XXX I talked moved you had $XXX

Todd Larson

to. I expect would it

amount, company but value a the pre-pandemic continued the would said, have grow be a it bit quite to the to of higher period. in I levels. the We specific a pandemic than expect little we and bit to you added organization Like haven’t sat during –

probably $XXX of excess $XXX it the than we level. expect hold to albeit million to more So little would a million would be bit current think – I south the again, but

Operator

next We Evercore. will go with to Gallagher Tom

ahead. go Please open. is line Your

Tom Gallagher

wanted back – just are of precise how give and XXXX. you on a balance I asking for clarity to can how you for more but a come not am thinking COVID about little Hi. number, the to I

It’s you. because QX, Thank of feel out what give I COVID how guidance. like range embedded thinking visibility such QX. of the hard for insurer obviously the for it’s placeholder of playing if XXX,XXX forecasting But estimate, what out part critical you are COVID see this are an thinking now, their a in there And right on to how put get legitimate I that like even a are think life think would services mortality indication one what you do. have over all kind be you a do about some you specifically, are mortality out? curious you has to little what place. of I – could you

Jonathan Porter

Yes. a are very No, and at. there we range saying. – wide looking people are agree, Tom, with is currently There that what are you

forecast, I just longer-range a think it’s we of to extremely for feel happen provided difficult haven’t historically, we going couple a partly because predict what’s anybody to further beyond months. than

can can as and sure we at you we So, accordingly. manage that wide cover we when to make imagine plan internally, of a range outcomes, look

population over a or I to the we prepared give guess say are I number estimate of the an of for numbers deaths course So, the would not year. specific

rules think to so ranges if couple for as We you reporting we say seen the are for quarter. we look at probably actual the to January, as have pointing assume you I in or not our so what level the back to will unreasonable U.S. we Delta. end higher And QX, just the quarter, think sort provided two that XX,XXX those towards quarters are of of be the far thumb, even go of with the guidance that also, I last it’s of given this of months just to deaths well in

should come difficult least from what you very Now cases the gives a to But those it’s said, dropping level. an quarter. said, expect, reasonable predict down around rate you that I hopefully, current we would number. as at follow run deaths bracket as the first do think absolute for But to and

Anna Manning

and absorb the that still earnings. have if Tom, underlying I earnings able the of of the course through pandemic COVID shown claims add business we And produce meaningful level can power been to has of our

demonstrate to have We continued that.

expect COVID manageable. to continue manageable, We be will be will

front. new We business have active been the on

also that I us. been get have confident, prepared behind meaningful engine. am future and I shared in adding excited And we I earnings We as am to remarks, once my about the COVID

Operator

go Alex Goldman with Sachs. to Scott next will We

is line Please ahead. open. go Your

Alex Scott

companies wanted to know are of sets probably taking Investor at calculation a give the – to ready of back of ones the that’s you that Day, just and have, and for an as that could to you LDTI. mention the impact retained least did the And for come at disaggregation it to you full sounds industry reserve follow-up questions. to it begun disclosure I think sounds other have impact Thanks is think would it impact circle going it not I that expected maybe so forth. like doesn’t I But sound I earnings. be you. much like as for like be for

to the going if any is to sort And like treat high what for just that, about of rating magnitude, that? out what’s find conversations are of level. there in way us wanted So, terms they the I the to looking think with driving are agencies how

Todd Larson

Yes. Todd. it’s Alex,

of first point financial of business. economics value changing It’s LDTI, cash the block overall the economics the flow, is So This business the of and changing. the of reporting. flows the is underlying cash not aren’t

We continue to work the through details.

provide So, this we targeting quantitative ready of point, middle to not are at this point, least at numbers to year quantitative the at the impact. probably more this provide

on can because business. XXXX. sheet then that’s of And any And much reserves that is where and the is it, opening and adjustment the, the a balance granular, going couple have yes, And One can end way of balance at of to reserve aggregation now might entire reasons. have I as say, the increase, you block standard going to is sheet mentioned, only is level about more to think there so aggregate works, sheet. negative balance opening as an be you of reserves the the eliminate be the you the of we

broken Now, more be to be much it’s more here granular. to is year issue treaty going going down to

potential So, all certain areas. the negatives positives don’t in cover the necessarily

adjustment in basis, than So, earnings about is as we couple balance there restate accounting what sheet new opening income or because back those have it, as adjustment going look opening like do live reserve thinking we to and think will But things then adjustment when sheet on I important and XXXX balance XXXX, that on opening an positive XXXX balance through years. income the of sheet. the the come I of be go been equity as through what’s go is some over more

of balance – would look what and Then some position. fairly beginning as I would what are discussions, think have what as as sort far things you important end say the the sheet on as look far at is far but still rating I overall XXXX to the like do agencies towards So, at early to discussions. are position they as I as equity is those point more of

Operator

Bass next Research. Erik with move Autonomous to will We

Your Please line is open. go ahead.

Erik Bass

bringing And expectation on translate has things. this because sort then so up reserve the then actually follow-ups. would higher just for about implication talk of your on VII a to Two that is what’s forward you taking prospectively? normal are the quarter? you earnings the different quantify going the One, topic, levels Thank given could of LDTI, just And then you portfolio grown? level a it that

Todd Larson

Yes.

On would earnings earnings higher we important new set standard. as seen some back the go you the some I things like XXXX the on in to under do look income why LDTI first sheet, have quarter. trying to investment that come to on as like you under run-rate opening comment LDTI question, more $X.XX balance That’s that’s as under were a additional might than about years the up look was going the reserves into through think go of right average what couple but on what that’s over data then I of XX. is first quarter, the far live as probably point is And what the for the variable for we FAS we

Operator

with next Ryan move will KBW. We to Krueger

Ryan Krueger

earnings, earnings? Thanks. the you an of Hi. updated for but asset-intensive view the terms rate U.S. run do of have I have quarterly this, may in business missed

Todd Larson

Yes.

that…? is asset the For intensive, U.S.

Ryan Krueger

Yes, that’s right.

Todd Larson

a around. my Yes. is I estimate business some of put amortizes to the We off. million quarter, business best million run the it’s million $XX and then existing still still No, $XX of on quarter say, But a think new around, rate. it’s $XX

Ryan Krueger

Thank you. Okay.

Operator

with to We Evercore. next Tom move Gallagher will

is Please line ahead. Your go open.

Tom Gallagher

taking the for Thanks follow-up. Hi.

any not, you not will longer – volatility or changes Just mortality? curious and thinking get thinking the had mortality had expect to pursue just have or and and and related our of through maybe just you have might Thanks. around you for look increases you expectations, your to treaties, future gone rate mortality that mortality evolution term if if increases have you the in future any on push you longer in-force views for term that would of this in as rate whether further pandemics, view whether

Jonathan Porter

is This Jonathan. Yes.

changed point, mortality. this we haven’t at our on long-term So, view

mortality, we As we impacts obviously what see I of a immediate price are implications no on pandemic may the around which we changes lot but of action as be I develops or COVID, the information are mentioned may on to reflecting experiencing. not devoting the this. now. long-term are analyzing the and clearly, thinking before, unfolds And resources into mean right

we as of pricing we definitely COVID new our business, adjusting to account think impacts. for estimates are about So,

We appropriate. are being cautious on new business where

underwriting We things. have modified

So, quite a to few actions business. related new

level COVID. develop on We As medium-term far and as conclusions – of level, for or in we or going expectations those systemic think mortality to shift COVID, client or believe think and extent a is related on using will there as options us goes, action business that taking there would in-force sort lasting of impacts to in-force longer impacts the the we certainly we forward. we our our a expect we I at review the have long-lasting if to available to that be impacts looking negative a term

Operator

We back to John will Piper Sandler. move at next Barnidge

Please ahead. open. go is Your line

John Barnidge

Great. being go South about Day underwriting countries Thank utilized being in back to and Investor since this – for vaccination said to you. are at your Africa. or other Thank expanded status I there you. you at vaccination all to? would then, something like plans pricing underwriting Has to

Jonathan Porter

Yes.

has here, material you, expansion I am I we a believe will think I that so the need to. to expert been other with John, markets. don’t if the not we there – follow-up But

asking regulatory which of COVID to elements connected vaccination, to from comorbidities specific requirements, account market-by-market. market-by-market. is questions variables you But do related and to take are and the and kind health or prevent may other there think status we certainly, underlying like I but connected into

So, are of there for selecting we and are I status think the think make risks account that to a sure Africa. we I have select the underwriting. But is definitely reasons made outside case that South – specifically underwriting for other appropriately adjustments we for use vaccination limited

Operator

conference the or for With Mr. additional to no closing any comments. I other Larson holding, will questions back turn

Todd Larson

we Okay. for that, everyone, fourth Thank Thank call. conclude and morning you. Thank your you. earnings for RGA. us the interest this quarter will With our call in continued joining you,

Operator

and your thank participation. ladies will gentlemen Again, that today’s you for We call. conclude

You may time and this have disconnect at day. a great

Reinsurance Group of America (RGA) 4 Feb 222021 Q4 Earnings call transcript