Reinsurance Group of America (RGA) 5 Aug 222022 Q2 Earnings call transcript

Company Profile

Participants

Anna Manning	President and Chief Executive Officer
Todd Larson	Senior Executive Vice President and Chief Financial Officer
Leslie Barbi	Executive Vice President and Chief Investment Officer
Jonathan Porter	Executive Vice President and Global Chief Risk Officer
Jamminder Bhullar	JPMorgan Chase & Co.
Erik Bass	Autonomous Research
John Barnidge	Piper Sandler & Co.
Ryan Krueger	KBW
Tom Gallagher	Evercore ISI
Alexander Scott	Goldman Sachs Group
Andrew Kligerman	Crédit Suisse
Michael Ward	Citi
Daniel Bergman	Jefferies

Call transcript

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Operator

Good day, and welcome to the Reinsurance Group of America Second 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

Officer; morning, Jeff I to call am Manning, Investor Chief Chief with Good Officer; Chief XXXX Porter, Relations. the Jonathan this second Head conference Anna our Executive and President call. joined Officer; RGA's Barbi, and you. our RGA's Investment and welcome Risk quarter morning Leslie Hopson, Thank on our the of

financial quick about forward measures. GAAP reminder and a Now information looking

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

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

Anna Manning

Good segments. reported adjusted for morning, it contributions of we This per And of share of for Last earnings was business us. for joining this $X.XX. morning. strong earnings and our importantly, our record operating night level call included thank a many you

In had in-force for good. capital in and new deployment other And addition, growth another business was into organic we active quarter transactions.

expect infections, development mortality We and by limited, also we saw impacts to in new and the vaccinations and COVID favorable was non-COVID markets. the by continued and come most while given down underlying COVID provided be remained, treatments. future vaccines claims to our protection And uncertainty prior of substantially, more continue

continuing the and too our many think momentum business, pipeline growth of I strength opportunities. the of on underlying new quarter positive signs the points of business attractive this

I'm was Latin has initiatives solid with product underwriting growth range than and to business to The new quarter had the Traditional And underlying both favorable, Asia business us of that excellent Traditional further very and pleased with individual in into and partnership the US premium America reflected highlights region. other expected, frequency growth severity notably allow the an some profitable better will quarter, mortality very the as with also favorable experience quarter, Turning continue the to claim client activities, excellent deliver an future. development, and experience across business demand.

Our global capital years success their of deploying geographies. in-force capital our match another deployment all The quarter GFS meaningful business business measurable financial amounts of block levels. deployment business into us couple on solutions roughly $XXX past and saw record also delivered in other million into the transactions last Further, our segments and puts across growth, Asia to transactions. of earnings strong reflecting in-force over capital year's pace

we the was as Our and pipelines risks broad stand and geographies, year. based remain momentum across here good halfway through and active

Our reported and and X.X% our see was in to on favorable constant markets, demand dynamics for and traditional and premium capital continue many insurance insurance a solutions. of growth our X.X% we clients reinsurance FX risk for from products strong basis,

new money in dividend earnings. higher and benefit underlying we yields by report investment increased sustainability meaningful become Our would yields, reflecting also that a to quarterly our I'm of nearly strength RGA’s reflecting forward. the sustained overall, were XX%, its favorable pleased benefit of confidence and our results higher going the

and the can substantial to positioned to I'll over to value have me the ability confident create through it around which in that and We've financial manage and change, a periods continue hand of franchise We your well in successfully to our investors. interest long-term elevated review you Todd we for world. great demonstrated Thank makes our uncertainty for are results. very RGA,

Todd Larson

includes operating be adjusted per just We of Anna below reported has Thanks earnings currency range negative a quarter impact adjusted for one a of XX% COVID-XX foreign the million and per quarter, XX%. a tax $X.XX and headwind of which share expected $XXX strong already pretax the $X.XX of as XX.X% of this income operating mentioned. RGA per Anna. to the record to a rate very consider was for $X.XX quarter share. The effective share

decrease to by the Traditional Traditional wanted the listed however, of EMEA and X.X% segment in because region X.X%, a currency currency X.X% the up I results Canada to significant X After of on in reported our region quarter, adjusting of increased impact premium presentation. summary. were were give X.X%. premiums premiums of the up a increase X.X%. reported a Reported -- constant currency million, currency you $XXX and in Turning slide X%. earnings X constant premiums increased foreign of for adverse

at Asia XX.X%. reported Traditional currency increase premiums up in Pacific constant were and X.X% in

We the are pleased momentum to good see our business. in

experience. Traditional Now America Latin The segment COVID recent income turning mortality to had results. strong, Variable the results overall. US the business Jonathan reflecting minutes. a in further provide expectations experience earnings individual line and will health segment and details individual rate. both few run was US investment with in very below favorable non-COVID The although were favorable

life markets. expectations. quarterly quarter XD partially in And Traditional results slightly strong unfavorable experience, average Our segment morbidity claims results costs Africa, The of recapture $XX expectations, The US quarter. favorable impact line results million. of had COVID-XX million. claim fee million offset $X the Financial traditional mortality with a the level a -- and UK unfavorable solutions large above reported due East were results from experience US reflecting segment reflected claim favorable business cost $X Europe, solutions reflecting volatility Canada unfavorable group was its COVID-XX in on development results by experience. business financial below of claim longevity and results the of the Middle IBNR. to favorable an US The other In due the were Canada very good Solutions mortality individual reflected COVID by positive to The our asset-intensive approximately the Capitol overall business experience result offset business experience.

Asia our Traditional Pacific to business. Turning

million the reflected favorable and costs. results corporate underwriting COVID-XX due quarter business investment rate claim across primarily partially and costs. of Australia of The strong, offset reported absorb run million positive experience $X including reflecting net loss Solutions Asia growth a other COVID-XX the to investment cost very from region claim partnership Financial business $X Pacific the limited adjusted than better COVID-XX favorable The claim by of investments. higher of million for segment and quarterly were small income, results $X yields, loss average $X pretax due impact million. reported to Asia operating our

presentation. for floating higher the quarter Portfolio XX income investment to well on reflecting investments yield earnings securities. some was a The non-spread in have to rate that existing X.XX% that on with was Moving rates on benefit we the positive line X slides two -- then from achieved as through first quarters. as impact expectations our variable And in

our the rate business to spreads increase X.XX% from public For in rate both activity. risk first X.XX% an private and non-spread money as The rates to new free quarter, new investment rose money compared the benefited in quarter. nation as well in credit

modest uncertain is million. well move credit quarter in the We economic impairments as through Additionally, were believe positioned we portfolio and $XX the totaled environment. and

mentioned, approximately capital remains in-force earnings XX and to million presentation, As as provide through $X quarterly I comments. the million turn and XX%. quarter We over additional our Risk the dividends. transactions $XX by And our will we to shareholders increase shown Porter, our nearly to Anna some strong, into Chief we slides $XXX on of billion. position other now XX capital the with ended and deployed dividend of call Jonathan excess Officer

Jonathan Porter

down deaths in Compared population Canada US, in of general XX% UK. and population to first general key our Thanks, in Todd. deaths all this XX% quarter in XX% COVID-XX were almost quarter down the reported the were the markets.

the experience consistent with pandemic. claims their claim Our lowest are trends estimated level these population as costs at was our COVID-XX of

the population population As reporting XX,XXX general a slide were approximately COVID-XX yet in mortality lowest US quarterly QX. there start isn't excess complete, shown non of the XX, on although of general And pandemic. quarter, the COVID-XX CDC in negligible US level the the since was in level deaths

have life is consecutive now proportion of deaths a below at general ages quarters we exposure. Finally, more declining XX, population there where seen insurance three of ages

individual US period frequency of due And net and average in positive both claims a claim quarter lower of was $XX lower IBNR. favorable experience the was a non size. our to to of due results, to Turning prior million COVID-XX a development COVID-XX mortality mortality experience favorable

below Excluding low the approximately per the our deaths expected of claim benefit end costs COVID-XX of general this IBNR range. XX,XXX population $X were adjustment, million

future trend to that this population claim of We was our at of quarters general out proportion population of XX,XXX range COVID-XX have in ages. segment consecutive is for continues, deaths seen our in claim on quarters. modest, the working a we COVID-XX by US mortality outside broken cost lower would three lower individual business costs general all expect in X. other extent reporting on the trend the the deaths in Total and To of per reflective the be slide end now US in decline

We trends claim we are very encouraged costs seen several the COVID-XX over that by favorable the in have past quarters.

significant believe Population levels has I'll immunity moved is much a continue future to the is although that over prior back lesser infection, impact impacts uncertainty will Evidence to will there of to seen vaccines time. COVID-XX and evolve, treatments Todd. continue and than and phase now it higher due to we will into future endemic and extent still be the hand pandemic that on will mortality, past vaccinations over improve manageable. years. new Although, how suggests to and an continue a to two half

Todd Larson

pivot Targeted of Long LDTI. Thanks Improvements Jonathan. the to I'd or like the Duration discussion

come X, of some I move relative Please appreciate disclosed of discuss note closer are LDTI the financial final the information high we've January As we GAAP. the to differ US level to estimates believe financial could new has new that Date, positive we XXXX standard community time. impacts current over will features want and upon effective the to many standard. the And adoption. the reporting to

five insight value are We emphasize. There important will the into provide RGA’s to also points performance and that it of business. long-term believe further are key

business economics remain unchanged. the of First, RGA

will basis. reserves reflect best updated regular assumptions, on Second, be a will estimate which

at will from future income. Third, only And higher increased. earnings lead to transition, be transition will be earnings Four, to reserves reduced. fluctuations retained adjustment the quarterly claims finally, can volatility

to XX, sheet, XX slide to the specific million some There XXXX to our a estimate adjustment. balance the are earnings impacts in at as of moving elements we to of retained on shown earnings $XXX decrease few million. Now presentation, $XXX this a of December

lower will relates LDTI expect on of these note to of very cohorts The limited had of in is a the an and cohorts is First, It we the primarily in this the required elimination adjusted be at other performance. recognition gain to profitability at strong is our the longevity reserves A is to or cohorts not of zero of business. loss have that And granularity negative important it to produce which have reserves requires reserves loss negative will And rest future in earnings of position third, level small margins recognizing the future benefits. recognition a decrease portion It into of to assessment eliminating earnings. requires risk earnings. we material adjustment of from component transition market a substantial that transition. relates retained adjustment number business our flow second have and the cohorts. that

rates AOCI estimate are driver from The discount of are will adjustment AOCI existing that in discount and adjusted current liability December unrealized discount LDTI, Moving interest to generally Currently, or volatile of We decrease reflective adjustments under income reserve of operating and $X.X component this result will issue. XXXX. to rates. of under Whereas reserve to AOCI our locked loss new reserve that billion the will there AOCI, be also when $X.X at as main earnings with GAAP accordingly. in be both US claims smaller are billion reserve rates AOCI investment Additionally, rates emergence, combined component, gain is volatility. will less XX, the unlocking

be assumption our income volatility compared reserve current claims changes. reporting. from LDTI Thus, be will volatile, to we LDTI, under any absent less under earnings expect financial muted significantly variability However, to

in expect performance reserves. disclosures due provide earnings to the to in investors. along you removal for recognize into RGA’s transparency Additionally, feel interest deviation conclude, will to new we and slightly early we better years the insight of new long-term more Thank new additional the on provision and with the To business adverse provide standard your for RGA.

We question. will call for open the now

Operator

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

Jamminder Bhullar

morning. couple questions. good had Hey, I a of

for The first on one is Todd buybacks.

the about if or not how of had accelerate under the bought the last parts the you something with world? I'm for stock else So uncertainty rest in you what maybe this in are And to otherwise? certain in of any nothing like just is new business wondering of there do thinking a And back terms you Or and the or COVID what the about quarter. it lingering buybacks quarter, you've versus opportunities in has but done do could quarters? last do versus conditions buybacks few still year

Todd Larson

Hi, Yes. Jimmy.

environment having an take potential new share powder in share of out on type of and there. in approach So part XX, And deployment some shareholder past, in active approach we've the that also and repurchases are like capital slide looking again, But opportunities our which balanced really transactions opportunities allow to repurchases. we management view also it that to us And of across will geographies. capital include we that is follow no discussed dry view time, continue got shown the future, mentioned, and we and the we'll we've our today's presentation, to up, various business dividend management. pipeline continue at will in as very to balanced we'll approach as over overall in the advantage buybacks. transactions as share Anna the

Jamminder Bhullar

in Anna, Okay, claims mortality, forward of years, headwind benefits the going screenings there's next whole or in of maybe margins lingering and the for or of of of next which a on maybe years. effects COVID your few to results once And ends maybe and that pandemic could of then dynamic on whether ignoring the whether for tailwind pull the cause because you your strong worse non-COVID. views next Do discussion lot and the and any have pandemic? like, versus stuff, Jonathan, been be the there's few over years a few people to sort

Jonathan Porter

talk of question. specifically for the I'll about you this Jimmy, maybe Yes, thanks the that is Jonathan. items couple mentioned.

the goes, quarters, draw expect this So to that conclusions will as about this is of seen do With in directly that on talked ages, it indicates I in we're US favorable some, to diagnosis, potential far nothing where our though, prior material identify, the older monitoring that though, deaths like seen pandemic in we've quarter. our in that the hard experience is say death see to to forward CDC ages, as pull change delayed see to and notably One we thing attained respect with higher was of older based results, and we've and that's we cause which results in that or is, difficult quarter favorable consistent past. one we've and did and going screening, materially. yet impact data

pandemic period from really away year which is back further get we the As the the of the of first in XXXX. in delay

impact a are well. up as logical there'll also I likely from you be think it's will and be the that screening material that period, assume be further less the the to that catching process time there'll

So be that noted. specifically this and anything to like you at on minuses, but balance not the I think items material pluses seeing it's, you say, We're there's point. going

Jonathan Porter

maybe the buyback stock on the Okay, little did comments for this pipeline pipeline. now the was But than year. understand I just maybe two, quarters it Todd is a of and bit three point. on ago because buyback earlier you stronger your

Todd Larson

But management. some, across we to earlier potential And overall as be geographies. these I opportunities, mentioned our are continue of again, capital will share part buybacks seeing various

Operator

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

Erik Bass

your restating Can transition what's year about XXXX from you a And end of in movements driving just be the the expect you earnings this? XXXX. disclosure, Is should retain retained date to decline In you. it and end we thank interest markets or by the higher Hi, show ‘XX. the smaller LDTI in earnings at capital something to time the adoption impact earnings else? rates or of talk

Todd Larson

is Yes, XXXX. of LDTI the claims for year, some end part at in the out of than And part works, way earnings X, a if reason the higher you in elevated LDTI that in the retained smooths the the adjustment to current transition of adjustment, of XXXX, the the to to is the decrease COVID. due related earnings look compared GAAP. under January it that That under decrease that's

Erik Bass

it. Got

quick up two just So follow there.

if But and up guess overall, framework. we amortizations, then earnings should changing for would down conclude were again, should case you of prospectively, reserves earnings one the think I I go then higher not negative under saying was the DAC materially. new are that it also, And So likely on your that are to be guess the XXXX. based by end be go to the I comments, LDTI your blocks

Todd Larson

we'll how and we'll work. how be out looking and XXXX year calculations. calculations balance go the the Yes, in also into looking assumptions reserve see year at various the And at that plays the the sheet

Operator

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

John Barnidge

you Thank talked you got health in access about better the landscape much. think And meaningfully you quarter, comfortable with we are about below within annual coming possibly given billion, you. results bringing last how If maybe How framework, we capital excess ago, capital $X remains health view very as maybe internal excess further? improved. think the landscape more generation? should the back Thank you down a capital quarter

Todd Larson

Yes, we've a we we excess of the in the of did the at session look last as part other of And And flexible we of as the year, retro capital. forms year. we efficient did to towards surplus capital. the current continue as down so level capital end possible as be middle well, to well. alternative note talked remain going make forms continue can of And the would look also comfortable below to we about past, at sure we as alternative

level ongoing able generate that through below impacts COVID. go ex platform we given and the yes, we would our to to our willing the capital down global comfort billion be $X So of are

John Barnidge

then the quarter? from look may follow income projecting? then perform you, in Thank you the up size And third the you do Thank early investment into you where see maybe my floaters income. investment in you Can maybe question. variable the on that think width opportunity an quarter the have maybe you how for ask

Todd Larson

would you to that one? take like Leslie,

Leslie Barbi

Sure.

Let on that. in me jump

the question. So your of on part first

the the rate, question investment portion on non-spread quarter So $X.X ballpark of $X.X impact in with here was additional the floating it was and variable fact forward. risk consolidated, the on more in the go roughly income

we've expectations. just know, you very we've out real to quarter period But as our environment. come of So robust a closer been was in robust this estate

So also, in And back going been we expect downward some unrealized. like would equity the but some Russell markets activity I forward. less there's on pressure that downward things in particularly you as know, some year-to-date, quarter, pressure although XXXX, this on the expect nonetheless, bounce

from So I term platform second level, of the but long deliver the do year should the pressure the at downward think in factors continue to that that expect the I current some mentioned. half

Operator

move on Ryan will We our KBW. Krueger question from with to next

Ryan Krueger

last morning. up think Good a interest rate to first in current in the follow on how maybe drag on, about potential environment of general, thanks. upside interest low can give sense total Hi, earnings in us And the the annual rates maybe how much you of on talk a the environment? question the and had been about

Leslie Barbi

like I'll It’s the Leslie, go you'd if take forward.

XXX what had grade broadly, higher. yields, have at kinds we expected at rates, that are all we of this look levels short might year the investment end, from of about net income that coming investment you into year, If

about think investment year. expected coming versus of expect the kind we if something the net income into might next that have magnitude, of XX-months, what million I order additional the So you $XX on would

Ryan Krueger

would is dropped there any Or in line? offset that bottom areas? there That's any helpful. all Is -- other the

Leslie Barbi

and things that there's that was that, other a net, factored if liabilities so that estimate. floating was rate into On

Ryan Krueger

back impact you impacts Got compared -- And Can to of that if ‘XX, you underperforming -- LDTI. it, at you at sense reserves. yearend the cohorts of pieces earnings then the can the us negative to look the magnitude a I thanks. guess within the retained give

Todd Larson

the XXXX, maybe cohorts. then of are fairly the small, roughly the the the magnitude, maybe at I'd reserves of or these of risk underperforming say remainder around the is negative end so XX% of be market rough in in neighborhood benefit would the XX-ish Ys, of total and percent, order the

Operator

on to we from move with question next our Barclays. And [Inaudible] Tracy

Unidentified Analyst

want the Good your LDTI to morning, the go on of dampening reserve to discussion claims effect back I from methodology.

share you it margin they'll to adequacy on work, unlocking. any some understand respect more by experience? the your line thoughts or where margin high versus alluded with seeing too be specific to effect to I recent you're cohort by for emerging cohort, your And if retrospective could to level So without assumptions on believe and I margin a need falling getting dampening you

Todd Larson

claims claim through premium less, out below flow life and and can cohorts it's you're, net start the that reporting answering if So maybe underperforming the the, claims then those underlying maybe that and that one of by called new will over as the that's refer works, with policy the question is of volatility clarify the maybe is to way premium volatility bottom muted period we we And treaties. financial or XXX%. the way of what's where spread that ratio above time longer and can will line, and ratio get to the XXX%, the the reserving your to The elevated blocks. the is

Unidentified Analyst

Okay, that's helpful.

of losses more favorable COVID experience. also become new you're if should to given so your that out mortality unfavorable call considering as mortality or favorable $X.XX COVID held limited, the You've a in threshold quarter in am comparison impact any mentioned I from wondering EPS

So your this be I quarter when out been the think backing in quarter for have favorable my guess you experience? would question that would mortality

Jonathan Porter

talking Just US specifically our clarify? business? about to you Are

Unidentified Analyst

be I that mean, big the US is one would helpful.

Jonathan Porter

Yes. Okay.

give details. So I can some you

you all that's we whether excluding or claims board so across Basically, and is see from favorable. quarter, million claims non-large estimate roughly about the experience improvement, between And a the prior experience. would split quite by large been it's have age our in you look favorable. saw COVID the attained of by US that that So favorable for quarter our the XX:XX are impacts individual business, $XX

Operator

next our from with We'll Tom Gallagher Evercore question ISI. take

Tom Gallagher

we don't have structure? much just you want how have morning, charge just about type any to I'm should of I you prudential the Good exposure but just invited a exposure think day, do that whether confirm very SUL that product other assume to

Todd Larson

Todd. never with not something that have change have a a just lapse comfortable And perspective. that this we've some those do component on in We the it's of performance that gotten reinsure Hi, the historically of the is component from just component really It's don't guarantee lapses risk products, reinsured of We those but mortality only. products. mortality risk. material impact on

we So exposure. wreck no, don't

Tom Gallagher

also you. change Thank that mortality with they Along their in as assumptions, lapsation, of Okay. the mentioned Pru charge. changed ultimate part

that? Just ultimate changing? you're curious that something mortality? how overall you're on thinking considering Is thoughts Or about

Todd Larson

Yes, as technology number a I to mortality for we're related on term changes. guess, of as long-term advancements, medical reasons mortality quite bullish goes, other far genomics, long improvement

and at just at So made our now. and right assumptions business look to nothing change a we point but this regularly haven't mortality review like our emergence, we long-term expectation all

Operator

Sachs our Group. question Scott take We'll next Goldman from Alex with

Alexander Scott

geographies? first had I across you just the was you or line? And year the Hey, line driving us one a dynamics currency look mean, local are think two Can the on PFO good. growth, foresee pretty yes, just the growth through help basis, top the that for I what on different on next top the

Anna Manning

Go comments maybe. Todd. gross. on provide additional I’ll once you the so commented Yes, ahead,

Todd Larson

on think good production Asia, our premium US. some be about higher talking high to We of all Okay, Anna, thanks. that digit new to business what product past different in opportunities growth the continues it single side. We're mid comfortable, in comfortable the on achievable. do We're been really still the we've seen our, opportunities regions and very development, with

the board seeing. the opportunities pleased across really that it's we're we're with really, So that very

Anna Manning

many add there offer I want clients large can They existing had clients. light only transfer, offer And it could we capital our quarters, are a that, products. more capital markets the are leaning some and Yes. our in insurance and customers, this they're that. conversation solutions, or they product and think as simple, prior these development, protection so sizable. risk our playing to protection our insurance comments When life maybe question. role good gaps to are their want Todd consumers our not you for doing already there all big life efficient And to models, towards in new thank broadly and but but If I affordable also mentioned, already to of and started, we're because of, we've play

of tools many that see that the need. have capabilities We clients and the continuing. I And

service. for so underwriting it expertise do big entry. about barriers about If example, facultative provide can I've reinsurance differentiator. our and few of has and spoken depth it And a businesses our the And also that high to

and changes, add, in models So look in just extensive early to markets, world, models in the with reporting of happening about And that to further add then our very or country you're the or it's because on us as when I have local what global well every strong stronger layer the have enables with quickly shared leverage opportunities others. against around that knowledge, their market we at they we're the and around globe, opportunities. generally opportunities, other in-force and longevity large block opportunities some and pension the the again, talking then world good I very they capital ideas would past, exclusive about growth new local midst there's margins, that, good not I've arrangements risk framework -- competing on the local new it market revising as teams, And between ideas lots frameworks. where that being where they come is footprint, I financial around have strong come client does relationships, is

drive as capital management as further will implementation. now tools, think would not the we you that on that is a right Now, in efficient risk both expect, and perhaps interest focus immediately, reinsurance

of all we new have look saw solvency changes. to new creating rebalanced. then expect would RGA, That's and through one the that history betting to busy for solvency two clients or But So what completed, turn down to environment. and a gets we to people these clearly that respond we are once long solutions opportunities optimize portfolios

continue So you to to expect can do that. us

we of growth that all say, in deliver attractive really, on So to growth our I'm business. this see continue all opportunities that And we'll confident of in to parts organization.

Alexander Scott

and Can back So a right the get level power of COVID. pandemic. way PFO I mean, the it's I look the at I don't full had this that before? much know sort to sort business? margin are PFO's to of of different we in were if growth about just anything what's generating structurally higher how mean, through look the you to the come is there before question PFO kind back were I with that margins. a here? going way high where mean, we about think at the today, pandemic, and earning margins PFO and on Certainly, I happen potential sort the is earnings you of I

estimates But of minute, So is earnings back if our good a this terms can we'll like the you so, be aside COVID of that. if amount around And here we have for in set sustainable? have to those return levels? to

Anna Manning

apologize. I just to again. Todd, want Yes, start

Todd Larson

business couple billion into I comment to pandemic, throughout continued operating if think the look layer about levels our going was to of deployed $X.X to throughout pretax just back you so. capital new record And profitable business. was the or on last I we've pre-pandemic income the years of levels,

forward. We well. tailwind the that and impacts earnings be a feel of And should also as mentioned, and also, going it, we excluding more as that COVID. then have environment any increasing you still So power, rate potential given

Operator

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

Andrew Kligerman

Hey, to We'd good few on a earlier morning. questions. up follow like

on cohorts types $X.X and With were what retained give earnings. little color billion product on you the LDTI, to of billion $X by transition impacted possibly there vintage? a at impact Could

Todd Larson

transparent several select XX pretty it above is the of the where ratio lost point, cohorts As we're detail. over talked and real net pockets And last component At globe you the about, we've premium a is around that block the not that about XX years there's know, adjustment. lot a over as in to more giving we'll the of US provide but time, been few XXX%. clearly the this a

Andrew Kligerman

we of medical in which How severity now, COVID-XX expect any some non- it still influencing COVID-XX, was influenced sort The you'll earlier like dissipates. this mortality, quite there been and you so the long think discussion like, a Todd. lack we in of is frequency about little do a see for mortality. COVID-XX won't forth. the Thank looked this COVID-XX question assuming checkups, claims, hopefully given has might I Jonathan, you and mortality? lag and think and be What indirect period, dissipates, clear, quarter, could year from was favorable. non-COVID-XX And certainly and it more the be then

Jonathan Porter

negative thanks as appreciate. when it's, mortality Yes, we a challenging, Andrew, saw was I'm is the thing for put timeline in precise this sure which to is the excess encouraging question, very that One you quarter. can US

in belief the looks so And reporting CDC expect has mortality that like that that of COVID-XX. than over our therefore yet. on as been course, support directly other excess So, complete what it yet balance of delayed I'd rate not helps, the is come course again, materially mortality say more earlier of after been minuses further to haven't away But indirectly we've down. we actually I are diagnoses before, anything of isn't impact the most data sort a would a potential less the said things. mix backing the that or delayed emerging think the the seen get the from that we the is I for of CDC the think, there on about diagnosis as We COVID, historic I that pandemic sort item. an and impact talk on impacts period, out well normalization be. of COVID population of of seeing we will as there's delayed And, COVID-XX pluses directly based again, deaths favorable slightly did But run significant related. the And related and that general

Todd Larson

one in maybe reserves then, if date. that any the be excess only significantly my earnings made opening increased, the the the at in circle to very adjustments significant we of in positive can majority margins of to question transition I your do those our emphasize And businesses have of I comments reserve that retained want on day on I Andrew, comment just could back that LDTI.

on balance very a we've business, the will long-term have margins Now a be sheet very large substantial we block, got and forward. going that realized

Operator

Citi. question take Ward from with Michael We'll next our

Michael Ward

for Thanks guys. question. the Hey,

mortality to guys view just or it and the the might, about that new you thinking existing take a guess like, of long, COVID incorporate you to endemic set potential in an idea. you should I'm I have might Just experience form if those adjust how of into for morph And years wondering assumptions, of business number an you or business. idea

Jonathan Porter

the by question. And just the the consistent we're over that Jonathan. I for we've reiterating think trends thanks start few with by favorable This seen let encouraged Again, Yes, is me see last to expect and but waves than much what we've also hospitalizations, mortality past. will seen that lower of we expect infections in do future the be we views, impacts quarters. expert and variants

mentioned, scenarios look future. my into We a I prepared in of reasons the the remarks. at For range

uncertainty We our kind we and reflect are of the continue been, have and pricing. the in and we will to expectation

made So made risk for to new we've on that to adjustments medical and anti-selection based to avoiding our have prices COVID We've to the ensure information. to newest relative definitely business. updating we're underwriting adjustments approach

into have the data as few So do managing continue to to proactively new will need so that and years business definitely we last been emerges take the account. over we

Michael Ward

might to pricing? Okay, certain of business, existing following that mortality need that? number adjusting years of the maybe just before level you on have do you up been there you is any a see Or or

Jonathan Porter

it we we take those any that by and is we'll of thinking in options the review our client I an impact causes extent mortality, lasting Yes, using the think in-force in see change I that action just mean, treaties. impacts client changes material and longer broadly mean, basis a to have that on available mortality, to I

for process as we that. of reasons, to again, the and that future. option So an take in that And have actions continue a use regular in least this assessment is will we some taken to probably, various or go the quarterly, through an we past at

Operator

We'll now move on to our next question from Dan Bergman with Jefferies.

Daniel Bergman

with on Hi, the asset of change quarters among the for geography, if of core elevated few intensive block color you're there's you deal acquiring the now. more thanks. blocks Good to whether morning. a I pretty can see of activity types any wanted I guess or what more acquirers. and in between types seeing competitive environment there size, risks, any And side blocks? update the kind any by on differences also versus mortality provide you're

Anna Manning

Thanks for Yes. Dan. question, the

deals with quarter. me the Let the second start in

So clients. by on relief we needs in driven of some Asia part won deals savings in products. And deals our statutory there were the

deal with other here What's on US deferred some an from on follow a in completed right the of the we're on clients transactions asset-intensive some block. the also deals noting these We potentially bases quarter is clients. start. worth that annuity done and on were of exclusive working And

So working similar deals. on

guarantees. no Now,

we're are I And win to we to believe deals. So shape continue active. good in

a with in remarks, a mentioned, far As prepared my this us. gotten pace start so good for on we've off year, pretty year to which year, record last was much

underlying deal In terms the deals, size of the say competition on remains competition, asset-intensive deals, on would specifically on the I experiences, of risks. our and the depending competition, very US competitive, particularly varies

relative then feel in We that a the So typically, market in more there's a risks. risks good. we're Demand larger to competitor, remains the less insurance overall, we biometric competition complex and would say are and risks. less good. we're And competition, very deal on have good more

good a competitive have We position.

I've continue deals. of seen we past. the some factors spoken the I And about of that You've for and many would in win the us say factors to win deals

not confident regional, to counterparty I that certainty said, deep local, things price. that business. say you'll of structuring It's when about with and And oriented. all this what execute ability our our they are our risk RGA, and So to execute. great same we expertise creative us, select commitments why exactly why at about that and deal just it's relationships it's we're clients, and I've hear We partner innovative, you the if global, strength our partner, levels, they that we've think And deliver that on solution the term experts, just long around I'm ask choose going spoken promises. to were we to

active, continue win pipelines we So good to very and across. We're are very right deals.

Daniel Bergman

follow little up really Thank helpful. Got maybe to your I gears on question commentary bit, just it? growth. a regarding on guess That's Alex's then you. switching premium

pandemic, on would in any Is into their seeing other you're from there in seeing demand to expect historical you session the guess, what the helpful? words, that recent to I seeing mortality all rates results pressure recent are or uptick coverage? relative increased on Now are commentary insurance you volatility you any life we're reinsurance and be COVID? Given due companies, further levels? raising would any primary there

Anna Manning

we maybe. of with session session movements rates, respect a growth They've a specifically well, lot But Yes, rates. session rates us. for up so flat, seen session not, in not only levers to is the remember, relatively little are of haven't been

a addition then hold reinsurance rates, is third session us is the and to in for really session if lever underlying So us lever you market share. market for growth flat, growth rates the

bringing translates exclusive of And early being about exclusives ideas to new reinsurance tie I'll that the into us. to taken that's and our more where clients, reinsurance gain leveraging ability ideas all to comments arrangements around earlier to success back this Our market. comes in the history to our and

So a basis. we're on not competing pool for that business

the session not attention something they're caution pay my to, only are drive growth. rates to really our that So is but around things

Operator

take a up Krueger from We'll follow KBW. Ryan with now

Ryan Krueger

Hi, thanks. just thing. I just to had, want clarify one

on about The guess PAD the for LDTI. confirm of DAC right. retained I post post And combined of seems have removal not just time to the future you virtually wanted I much for was GAAP that with like LDTI. in they a to that to made earnings adjustments higher period earnings thinking pattern I amortization. change make So some earnings of

Todd Larson

for new won't think we be in durations the of the adverse PADs certainly start deviation. right, provision mentioned that's think released. then know, I I will some Yes, being on because up because business, we here, I early setting And existing

margins be bit higher a the should So little early on.

Operator

Citi. Mike And another follow up Ward we'll with from take

Michael Ward

the Thanks guys. for up, follow

charge. and Just have They longevity guys, covered off kind was since had don't that at least to like worry, slide to quickly, been, at showing slide your point think to has Days about you've you I've isn't Investor a business balances model. their be mortality just in a the going offset that this I a of this they'd that like of discussed terms they earnings. characteristic I that thinking, Prudential have mortality

during we COVID. offset so And really it didn't mortality see

in that hedge and area, if in was as delta mortality discussed in aspect UK the between didn't sort wondering longevity or making some the to just but you've really it's longevity your of and maybe help improve such, pension And the think but age shift about US thought I much. future.

Jonathan Porter

Jonathan. I'll Maybe it's Yes. start, Mike. Hi,

of our back longevity. I we space, which sorry, will see Day growth and see be we biometric that our we longevity And strong over growth to the risk. that morbidity think of go the portion But longevity. slide So see bit And and opportunities presentation and in course strategy, a growth we first the of do expect one Investor to all, showed of distribution included quite US of particularly we everywhere. PRT opportunities a well, if core of there to I you mortality risks year our that areas five think opportunity, in in December, grow the

lot Now, good opportunity, a as you've see like of again, reason pointed good there, but both that from of benefit, added capital the will there's lot better margin and we an an is perspective growth there's out, for earnings diversification perspective. a growth a the also

Michael Ward

five over of years. sort it's gradual so Okay,

Jonathan Porter

over those the in I our it can't, or I think, risks longevity, think I of is next the roughly at than off our faster top are the five our take biometric number. growing. I rate head as businesses give years Yes, our on other longevity so. exact But remember is I the my think a slide. doubling guess grows can't I proportion It's

Operator

question remarks. session. to you. closing conference answer over additional to any the Mr. Larson, like and that conclude turn Thank for does back I'd today's And

Todd Larson

much. Well, in everyone, RGA. Thank support your continued you second quarter and our And you interest concludes thank for that very call.

Operator

We that And conference. does thank participation. all for you conclude you. today's Thank your

You may now disconnect.

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