RGA - Earnings call transcript Q1 2022 | Reinsurance Group of America, Incorporated

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Operator

Good day, and welcome to the Reinsurance Group of America First Quarter 2022 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, Hopson, With to the me RGA's Relations. Risk Executive Anna Good Jonathan Investment XXXX our Head Porter, call first of conference Manning, Chief Officer; Chief and call. this and President our and you. Chief RGA's Officer; Jeff welcome Officer; quarter is Barbi, the Thank morning Investor on our

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

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

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

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

Anna Manning

and million Todd. per operating you which morning, a $X.XX, EPS everyone, of reported this thank night, $X.XX you, Thank call of for joining adjusted impact COVID-XX included pretax morning. Last or Good $XXX our we share.

by to consider earnings the to also encouraged many I spots very results despite are bright of and the we claims. a operating as this are There We the good absorbing this year. level reported positive quarter COVID-XX a meaningful be throughout start business,

a quarter, want emphasize key details few points. the of getting the I into Before to

our indicator our testament is underlying strong is future results. a continues to positive Our results, for to deliver and core the of value franchise that a global and business

means organic encouraging good we been in We see we've also And transactions. new new adding pipelines that And business both channels. in activity continue and to meaningfully earnings. through to future in-force business markets, our see both

and Canada were COVID-XX the the our U.S., in provide further insights will COVID-XX on concentrated claims the the to quarter. shortly. U.K. in turning global quarter Jonathan Now claims

a after amount strong reflecting had Our even Asia quarter, a underwriting moderate business results favorable Traditional very of COVID-XX claims. absorbing

produced business above led quarter. excel that results this by GFS continues expectations, EMEA the Our region to our and were

developments both again U.S. of and group We and the towards continuing to businesses. and very Australia business cautiously individual it good industry move The group starts results, Australia the in while, health reported remain Traditional sustainable a the across business U.S. more market quite reported performance. profitable optimistic strong Our trend best results a as profit, individual was business and the about the ongoing conditions.

results has local investment Capital rise tailwind been having positioning this our $XXX where in the Our risks a were other sustained, transactions would into be positive A across in-force and forward. the favorable, And the start to already as new nice and million year. interest if remain rates, mentioned, deployed quarter, and a the broad-based was pipelines $XXX and and and rates in in money large going factor the million geographies. a market capital is operations. in local evident transactions. paying combined transactions deep further deployed having off relationships. of with is of in success quarter That strategy That local long into well-established and strong in-force long-term we part client expertise is and Asia, active

facing and Our is countries some a of that while X.X% strong reported restrictions. some growth still pandemic premium level was are

our clients new for me. also see with in momentum forward good strong demand proud favorable to reinsurance traditional -- insurance in from of going for our to business announce I'm solutions. markets and products excuse continue many We dynamics

Health leading in employees capabilities XXth and that business their for has a our I'm of our of Leveraging partner a also client ranked by and tribute getting year, capabilities I'm our #X centricity. us throughout to Reinsurance proud culture to me global as value have organization for the excuse to Life was to over personal to You report. this consecutive as and NMG point cold. announce the as RGA XXXX well leader, morning our Global clients a being thought and allowed deliver years, pride trusted a in this a

be I ahead, many optimistic. Looking see reasons to

First, although many evidence deaths COVID-XX countries. uncertainty shows are remains, that declining in

strengthened depth expertise, material partnerships proposition of Second, our X long-term and capabilities strength our has and added business earnings. value platform, and years last And client success of been has technical throughout differentiates interest new Thank positions our opportunities third, forward. value the as extremely us RGA, to growth safe for the attractive I partnerships you and all client us and and of remain your in you many move well. we well capitalize hope on global

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

Todd Larson

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

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

X.X%, of rate effects solid tax months quarter for was XX was a dollar items, quarter. organic impacts X.X% we of year. the trailing to were premiums and X.X% the expect even onetime not Consolidated out range rate When XX% which for quarter. was effective was and COVID-XX for to XX%. The course that higher equity the expected return items The on the drove basis, adjusting large of growth over the operating currency adjusted the X.X%. than Our increased of this reported net the in a on

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

the excess our low overall. level business to Variable again performed U.S. consistent data. better The non-COVID of individual were with income quarter. due minimal, than claim population mortality this favorable costs excess general favorable Our expectations was investment health experience

from claim offset claims result by by of an business $XX COVID-XX favorable segment results above-average the The results Solutions that investment cost COVID-XX of non-COVID-XX Traditional mortality favorable the million to Traditional as COVID-XX group reflected results unfavorable In segment of variable cost due Canada Middle segment, experience. experience U.K. expectations total, business reflected quarterly Financial results of income. the The and business aided asset-intensive was U.S. of of large East reflected Our experience. individual million the the Canada life claims. most moderate was Europe, with The and COVID-XX-related level longevity reported claim volatility Africa $XX in strong above impact level in

reflected quarterly and the the also a business in growth the the large business. EMEA's longevity impact Financial claims U.K., to we non-COVID-XX We very favorable had of some experience excess of attribute saw quarter as normal results volatility. Solutions mortality which good

business. to Turning our Asia Pacific Traditional

the favorable modestly quarter corporate both than Asia moderate other average were a results segment experience group profit expectations. The adjusted which a line of and better rate. reported reflected $XX underwriting profitable. reported operating with run individual Asia Australia our businesses in Solutions quarterly a loss The impact. as pretax with Financial business were COVID-XX and is results for million,

joint investments. income, The nonspread portfolio yield the primarily estate to variable reflecting the Moving for real investment to X.XX%, gains. quarter due venture was strong

core perspective, to hard part a predict timing variable While our of is earnings. a income investment investment from

billion. quarter impairments on approximately $XX other million of and credit capital strong, shareholders to share were We excess Slides' in remained $X presentation, deployed our and XX into earnings the ended with through our quarter, XX modest capital million dividends and position in-force totaled million. and transactions of Additionally, $XXX the $XX and Included we and returned repurchases.

sheet deploy summary, This capital growth, turn earnings dividends. the from Porter, time. shareholders share our attractive deliver into our call capital In continue will well-diversified Risk who our on COVID-XX-related now management our to balance provide power returns return and position COVID-XX, to impact and additional believe over fund absorb we to organic to underlying our quarter balanced the global capital I Chief through Officer, and to us approach comments will strong over highlights financial Jonathan to experience. platform, ability and our transactions repurchases

Jonathan Porter

XXXX, claims Thanks, will COVID-XX were Canada. Starting reported our deaths reported deaths based almost population Todd. QX previous three COVID-XX increases, across approximately for claim XX% global reporting. quarter an markets declined from in U.S. were covering these many estimated Compared I QX CDC to highlight. data first essentially U.S., the XX% population with increase general in Despite the key portfolio. I wanted of these the saw XX% three costs and are general population U.K. flat shows our the observations general morning, tripled from our on U.S. in our and COVID-XX up to There XX the experience. in markets. Slide key that deaths This global be in

First, QX, up as reported were in COVID-XX deaths approximately previously XX% from QX. population general mentioned, XXX,XXX

we that And the seen also population of we've this respect pandemic or about throughout believe by I to prior very to showing population factors. is reporting offset low two age quarter. third have The likely composition complete, deaths of quarters is the COVID-XX. excess directly non-COVID-XX share year, deaths. the that believe isn't related We like mortality of is average the yet we with is Second, would deaths when talked although influenza indirectly a compared to COVID-XX CDC and very levels non-COVID-XX little offsetting in that observation general in excess result to it an

more below from on right-hand life slide, at XX%. of there exposure, the QX XXXX of on where COVID-XX the to see population XX% XX, the you the proportion ages As side of the is declined deaths insurance chart ages peak

mortality population individual in U.S. what general very we with are results this Our seeing quarter. the are consistent

we XX,XXX million due as we general XXXX. claim shown the mortality material of QX population and COVID-XX of improvement, were the but QX to cost This reduction deaths, proportion is population in a ages Our part lower claim deaths as in high costs in data. believe, CDC our of the in given deaths per working to level compared $XXX of saw

notable the mortality when non-COVID-XX Our There minimal, population. the cohorts. mortality in excess absence or excess year general was quarter at consistent our were experience U.S. age of by underlying issue no with experience mortality looking trends again, size, in policy the

quarter. COVID-XX $XX as lower observed in results claim. the increase general and to include deaths, claims also XX, Turning or than Slide was mortality one population the and large shown a on impact million Canada, the COVID-XX double approximately QX very were estimated of prior This

the costs wound to being similar of general of COVID-XX Canada general population costs deaths. claim year our COVID-XX thumb population were results QX Excluding on In impacts being in in XXXX range expected this based much result U.K., also claim claim full deaths XX,XXX within one after range our for within mortality for elevated per and rules XXXX.

We our U.K. the Canada. thumb cost claim stated U.S., are and for rules maintaining of

Delta We newly now are and that more are the during decreased XX,XXX deaths to the have line wave and peaks in as and the midpoint In observed prior impacts claims South encouraged QX, Africa, by QX per claim ranges. and relative remained QX development. cost offset India in impacts quarter modest were our claims with favorable minimal quarter the reported COVID-XX of in were

higher U.S. in are population relatively from far, when to QX, prior at increasing deaths immunity to vaccination markets So access more well continue decline and that general that effective population will optimistic COVID-XX as treatments. future we as persists, will confident in remained and the and have remain key to compared manageable. severity but impacts other due infection impacts in we to low be QX, levels cautiously Uncertainty

to me Todd. now back it Let hand

Todd Larson

Jonathan. remarks. concludes Thanks, That prepared our

up now to it we questions. So for like open would

Operator

John Sandler. question [Operator [indiscernible] go Barnidge and ahead from Piper Instructions]. with We'll

John Barnidge

how move to from mortality has to that thinking correlation direct about we indirect prospectively? excess My pandemic question should indirect COVID mortality we endemic, But the COVID. mortality. some to relates as Clearly, be

Jonathan Porter

John, Yes. it's Jon.

think to meaningful. that, respect I that belief while likely think our excess impacts COVID is mortality, with continue So are I will

is and as believe indirect, or we other to that there because related direct again, COVID-XX. you mortality a the connection excess So said, between

come as excess no a expectation material down, COVID in So will deaths we that that, have continue way. mortality

John Barnidge

higher about think then -- well rates. you as resetting the about rate talk much from as that how prospectively? how first follow-up, my floating And lift on with and as that you from quarter securities saw in you Okay. well Can as

Todd Larson

to that like take you would one? Leslie,

Leslie Barbi

a there's is and a moved you while curve, move, bit to This out of other rates as the short lag you Leslie. the little rates and Yes, meaningfully actually follow through. having Sure. have central so, know, banks have the Fed

will impact So there from and we first out and moves, the cash that the some grow in quarter, seen contribution but years. have full over the rate floating not the was yet

So it's meaningful.

Operator

move on ahead Jimmy question next with Bhullar go JPMorgan. and we'll with to And our

Jamminder Bhullar

First, question I a had for Anna.

to have views on your companies? cause in part seem been whether in terms you will or past And that lot are and obviously of for pandemic buying in one Just declining seeing behavior stabilized, the reinsurance know rates demand will direction session that few changes demand indications and move for any I a think pandemic any on rates over long-term or have the of but it the decades will reinsurance? another? session do you the primary change

Anna Manning

you Thank question. for that

some me And I been growth. in us accelerated the active up, of the underwriting business and We've seeing And to let our I facultative First, Then can their the customers their regions. markets. flowing nice competitors seen support efforts, would our where support underwrite across this who fewer with risk. that thing in a increasing use growth so all provide And of U.S. we're in consumers and for stage. approaches then that our point facultative would That's go the opportunities have underlying we are are activity. seen most application digital is companies to there. products business new and that there is reinsurers by to accelerating, fewer service, good we've And for creating fairly clients, set our so there digitally-based And general demand wins of data. also keep to in are note part remember, start the we many new sharing

will So only that of clients value say our years, pandemic. that demand higher I expertise, last but not the our for paying and insurance mortality that over certainly, off, a also from the it's post awareness And on the expect this increased I pandemic would X expertise. seeing we're of continue benefit has

see as we it. momentum and good beyond through we I growth come see pandemic -- overall, the So

Jamminder Bhullar

are for buybacks, Okay. of And than amount And then should lower you reasons the then that? the quarter was you've done assume for in did couple last terms Todd, quarters. you'll this we get what of that you a it Any that the and a do reason buybacks that's more bit Or better see lot pandemic's are like recently? buy little back that other you've been out with opportunities seems abating? proactive to the if there reluctant

Todd Larson

balance as term return million balanced -- were we've quarter had transactions combination look our heightened alternative of how then year. in strategic over on did back block of a And or last also off year we $XX of The managed version for transaction is surplus we're first also period activity that in capital what into risk company the was it and next in share look approach debt the history, then the of continue seen, out of retrocession latter underlying I -- capital claims. we dividends. then and potential got think COVID that's capital alternative We the off we maintaining capital $XXX of million is we're at forms to would looking the horizon and especially last Langhorne. in we think what a million the to of management then a deployment, repurchases very do the And the forms of as from I see out you a well the a us capital the I repurchases. if of look and base business and expect operating overall think you've note And the transaction the holding deployment far with think well to and continue and beyond at returning deploying continue part terms capital, good we've that the we're to start as we on a issued So on through in pleased at company. that as into reasonable equity of the getting as what pretty a transaction transaction, good of considering longer Langhorne still here then the $XX with that's dividend and on balancing there of as appropriate we to in-force the we then overall like

think to forward. we'll answer as long-winded balanced to question, a I go take we your a So approach continue

Operator

Credit ahead we'll our to and move Andrew question from go And Suisse. Kligerman next on with

Andrew Kligerman

mean, Just billion you you be excess capital number to centered? that Jimmy as $X asking. like along down? move that to it forward? where you'd Where that kind would you like like capital, Would was I of the -- excess to of your do with Todd, lines we is get

Todd Larson

confident get So capital we as I'll generation as more, we execute most alternative go are of call mentioned once when replenish billion forum. below behind forward fairly these of alternative and we the to we're comfortable forms it, to earnings capital, on back continue capital can of we the with and normal more a be we and down $X we more the times that confident ago, pandemic the impact excess capital is through and of I minute that us coming quickly would

or $X bringing know the So would right at we've throughout level the that billion-plus two, last in we comfortable I that been but year be situations. down

Andrew Kligerman

And bringing few be? in that that the hundred means million zone? Or would level comfort down where like

Todd Larson

probably I have say to a $XXX I so. to or around, you if million number, million need mention an don't but $XXX more exact would me number,

Andrew Kligerman

And what That's in? very acquisitions, RGA management, parallel with just a Re? would with of Todd. Langhorne see. same then areas I making you seeing again the in pipeline be helpful, acquisitions to like capital terms And what's of

Anna Manning

year pipelines at those region. U.S. of many we pipelines see in increasing for a deals. in changes there although countries also increasing that years. the in interest. interest about deals world upcoming of been seeing In the some completed coming from has back the Asia, is good the And pipeline you Sorry, year couple in nice longevity to are market. look those Recall done of over are PRT several big continuing last transactions part the us. and when coming interest longevity and we've competition, generating our a especially that we EMEA, other recall, some of have to of can U.S., can very expect clients And in add -- good, the Jimmy, of because Then markets. good for question, U.S. In U.S. you all I asset-intensive We address And are deals The transactions the capital a if last then the was across the maybe in frameworks then the lot for good Netherlands. on. regions.

they you It's on and in in corporate significant desires And aware of a in more a very, the that big with environment, is liabilities market an growth do rise a ranging it this in the attractive market add are likely estimates It to that. very then really may rates $X a market. big pension capacity, potential worth to fully or and sponsors' You're competitive. opportunities, up that's of point. sheets, demand. seen increasing trillion And at number. funded There highly for pretty believe balance well I the are volatility is but deal. That's I've current it's us. year's

you And and expect time. be I pick can from spots and over we'll successful active us disciplined, so us expect our is be what we'll to

across see this regions right success risks. many all good And around seen for So opportunities in different over I shape, we're and been our in We've decades. I multiple our think business years. in you've

Operator

Autonomous Bass our move we'll to next go And ahead Research. question from with and on Erik

Erik Bass

Or interested Maybe PRT transfers? you Or that deals? up funded in opportunity. fully first, to about last just just longevity follow be Anna, Would both? the point, on doing U.S.

Anna Manning

do We both.

as deals. longevity as well So -- asset-intensive done have longevity and swap-type deals we

are very parts both in interested of that We market.

Erik Bass

talk much Or much now was or they're And neutral interest how ROE rates years? your I hoping over then from positive ROE recent to lower in maybe forward. rise rates level another you the even Rates could on at a where how asked way, of see time? in about going you weighed benefit could

Todd Larson

to Yes. Leslie, It's rates some I'll with the starting And portfolio, well. get start below our this a market equivalent U.S. being the back the off add reinvestment time quite rising see hopefully This right, good that's had and in is especially drag, for become to you maybe we've and -- are then can and Traditional finally tailwind. for good Todd. as on rates business.

about optimistic rising environment. Leslie? rate we're So the

Leslie Barbi

Sure, Todd.

other that think whole in now the of sort -- yield this [indiscernible] are I -- period. combining long So favorable they than us have for the been available much the question, more

If above on So is long know current of most book time hold, opportunities it's maturing dynamic. that market And on be the I welcome for this yields on a will rate our get -- benefit industry -- going the a we'd so that's as parallel, hasn't but we maturing floating kind been noted, change. yields of we're on securities, cash get move the to going a far quarters. we're have to it been to coming positive. through. But and over The continue to continued play securities.

Operator

to we'll with KBW. ahead move and on Ryan question go And our from next Krueger

Ryan Krueger

the portfolio? floating Just rate a how follow-up first, big is

Leslie Barbi

net So when I'd we the liabilities, a as at total percent I guess look characterize of portfolio. few it floating of rate it

Ryan Krueger

have a I capital COVID, generation. Got you generation year? on about a it. And normalized you But given of through on I had kind an then excluding gone been skewed question view in think the pandemic. I have guess do we've capital guess updated as things as if

Todd Larson

But to our mentioned of Yes. of add block deploying as be the before lumpy were earnings. $XXX course comments, million to -- her of produce nicely future it business will to prepandemic, in transactions. the million earlier during we've continued to couple we $XXX pandemic years last We range in-force the Anna that in over into It year-to-year.

those So if levels, anticipate even will we come to I back as we that prepandemic would better. the get of pandemic not out

Operator

we'll and with move Dan our Bergman ahead And Jefferies. go next to question on with

Daniel Bergman

saw the up I I profit straight second in was quarter. Australia you booked for, it first, think guess I

you be the helpful? sustained where on you Australia produce and can give just color -- saw quarter. wanted blocks and see region any also your Is in your market any across if the can updates a now this on could the going in performance think in the this Just the earnings size to you And profitability you position business there additional forward? would

Todd Larson

dynamics lines group -- for which taking primary are was and business some it businesses, quarter, forward. both $X that profitable performance lines the lines those in about was profitability individual -- the X And overall changes see. the of So for was the yes, business. still, to both going there's the were Also, Australia good for we pretax. Australia, and will be The view million just industry -- overall positive of place business the of that

So there's still some we to as to upside -- as go improve. continues it

Daniel Bergman

then Got it. And impact countries two in That's on guess down on helpful. markets? I those And it bucket COVID breaking outside was in of quarter, there be saw was of it possible quarter. think development more is in and the your to million COVID claims favorable the you in your country, great. kind would it quarter what any in quarter? India is COVID main granularity the just prior By size I the the South that Africa $XX and net claims

Jonathan Porter

Dan, this Yes, is Jonathan.

IBNR in So was prior the as South more million for $XX claims reported release around claims from both of India Africa, quarter we or favorable actually period was that. new so. had of actually than and that level the The development

So it single-digit of gives earnings. in positive to sort That the a was you contribution million. slight

in sense So that that other pieces. claims as [indiscernible]talked Hong up set and there. what say Kong bucket IBNR given that out in far outside we the some pulled spike have of of those we gives you we about, I'd sort as And two a of

markets. other about that's piece and $XX smaller in So that million of number then

Operator

and from Sachs. ahead question next with on Alex move our Scott to Goldman go we'll And

Alexander Scott

I'd I you're interested have is there the to back Asia. is you and doing of The improving off on seems be in just some things paying fundamentals. some It that grow. for like one first of

places any be drivers could the on of provide deploying interested some underlying et So cetera? capital, of of the you if I'd some just details you're

Anna Manning

would point that region X been in I so. we've to -- -- decades been or coming investing on we've and Alex, to for

with in of structure region, what's that in what to those transactions. success being early which ground is that understanding clients. is the so deep shape the XX-plus in remarks, our And -- development market, that's with the our combined And seeing market, and really we're helping helping So there, understanding we're the underlying prepared that the built relationships helping what we're long-lasting products, that's the the years I said understanding and we've from risks. the to on

that, proposition we that in success in that's of to All take the what's market. what's that can leading together, of all and that the that's deals part you market, when put that value to the

Alexander Scott

follow-up is they reported more just that of my update received And And of guys one that you the a actuarial mortality of they're I rather on study primaries [indiscernible] than real-time mentioned sort a reviewing helpful. it doing know basis ahead their things That's review. interested one that's the anything If there But if something study, mortality? I'd if or that reviewed? just seeing change to all you there's outside be caused of environment there's time. any you've specific expectations in -- that even you're that anything in longer-term for

Jonathan Porter

I start. can Maybe

will in changes or to about post-COVID in that of look things improvement we're advances, going we we're there's like the personal technology our in but the for that estimates a mortality behavior, our lot no work of very is trends. have would doing studies pretty best in expectations What that too, we assumptions to we and I would all and yet. framework say, something effects reflect our the Also, looking material, Obviously, our data forward. on space so environment, markets experience it's conclusions potential see as or review regular expectations robust look just emerging changed -- knock-on where of at at COVID. diagnosis, in be a long-term point, we to we delays at basis process a some this at haven't So relative our that extent of

look sure at on you're So we overall that's though. I more a just to, how of referring of study I'm the general guess, statement, exact not experience.

Operator

for And conclude Larson hand the remarks. closing our like back additional with to I now that, to would that call any Todd session. question-and-answer over does or

Todd Larson

earnings our support morning call joining Thank interest and this for you and continued thank your Well, RGA. of very much. you

Operator

with does participation. today's that you call. for your that, Thank And conclude

You may now disconnect.

Reinsurance Group of America (RGA) 6 May 222022 Q1 Earnings call transcript