A.M. Best has affirmed the financial strength rating of A+ (Superior) and the issuer credit ratings (ICR) of “aa-” of RGA Reinsurance Company (St. Louis, MO), RGA Americas Reinsurance Company, Ltd (Bermuda) and its subsidiaries; RGA Life Reinsurance Company of Canada (Montreal, Canada) and RGA Atlantic Reinsurance Company Ltd. (Barbados), collectively referred to as RGA Re. A.M. Best also has affirmed the ICR of “a-” and all issue ratings on the existing debt securities and indicative shelf ratings of Reinsurance Group of America, Incorporated (RGA) (St. Louis, MO) [NYSE: RGA]. The outlook for each rating is stable. Additionally, A.M. Best has assigned an issue rating of “a-” to RGA’s $400 million senior unsecured notes due 2026 and assigned an issue rating of “bbb+” to the $400 million subordinated debentures, due 2056. The outlook assigned to each of these ratings is stable. (See below for a detailed listing of the companies and ratings.)

The ratings of RGA Re reflect its leading North American life reinsurance market positions, stable risk-adjusted capitalization, and favorable, albeit lower GAAP-adjusted operating earnings trends. RGA Re has very strong brand recognition as a leading provider of underwriting and facultative capabilities with an expanding geographical presence in Asia and emerging markets. Historically, U.S. and Latin America GAAP operating results have been stable with declines in traditional business offset by growth within its asset-intensive business segment. More recently, RGA Re has experienced adverse U.S. mortality, although this volatility is expected to remain manageable. On a consolidated basis, premium trends remain strong after adjusting for currency headwinds associated with a strong U.S. dollar, although they appear flat on a reported basis. RGA Re continues to be viewed favorably by A. M. Best for its strong technological platform, and sophisticated and highly integrated global enterprise risk management framework that includes comprehensive risk tolerance limits, economic capital modeling and stochastic stress testing.

These strengths are partially offset by expansion of its business profile from mortality-risk into higher-risk product lines including longevity reinsurance, long-term care and annuities, which A.M. Best views as of lower credit worthiness in its product continuum. Consistent with other North American reinsurers, RGA Re’s mortality in-force metrics remain relatively flat given ongoing challenges in the highly competitive U.S.-traditional marketplace, which has experienced declining cession rates in recent years, although the pace of decline has stabilized. Slow U.S.-business growth has been partially offset by increased reliance on international growth and the ability to secure highly competitive deal flow to generate organic earnings growth. While its operating profile is increasingly diversified amongst morbidity, mortality, longevity and spread-based earnings, there is the potential for higher levels of operating volatility given the more recent changes in the reserve mix. Additionally, there has been an increase in higher-risk assets (mortgage loans, below-investment grade bonds) relative to statutory capital in recent years, and RGA Re’s statutory capital structure remains heavily supported by surplus notes and dependent on access to low-cost funding to support redundant reserves or provide capital market solutions.

A.M. Best views RGA’s debt servicing capabilities favorably, with sufficient liquidity to service its debt, a well-laddered debt maturity structure, strong interest coverage ratios and financial leverage ratios that remain within A.M. Best’s guidelines for its current ratings.

A positive rating action could occur if there is an improvement in RGA Re’s risk-adjusted capitalization and operating performance while maintaining its leadership position. A decline in risk-adjusted capital or adverse trends in operating performance could result in a negative rating action. A material decline in RGA Re’s market leadership position with diminishing new business could result in a negative rating action.

The following issue ratings have been assigned with a stable outlook.

Reinsurance Group of America, Incorporated—

-- “a-” on $400 million 3.95% senior unsecured notes, due 2026

-- “bbb+” on $400 million 5.75% fixed to floating rate subordinated debentures, due 2056

The following issue ratings have been affirmed with a stable outlook:

Reinsurance Group of America, Incorporated—

-- “a-” on $300 million 5.625% senior unsecured notes, due 2017

-- “a-” on $400 million 6.45% senior unsecured notes, due 2019

-- “a-” on $400 million 5% senior unsecured notes, due 2021

-- “a-” on $400 million 4.7% senior unsecured notes, due 2023

-- “bbb+” on $400 million 6.2% fixed to floating subordinated debentures, due 2042

-- “bbb” on $400 million 6.75 % fixed to floating junior subordinated debentures, due 2065

The following indicative ratings available under shelf registration have been affirmed with a stable outlook:

Reinsurance Group of America, Incorporated—

-- “a-” on senior unsecured debt

-- “bbb+” on subordinated debt

-- “bbb” on preferred stock

RGA Capital Trust III and IV—

-- “bbb” on trust preferred securities

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

For more information, visit www.ambest.com.

Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.

A.M. BestWilliam PargeansAssistant Vice President+1 908 439 2200, ext. 5359william.pargeans@ambest.comorRosemarie MirabellaAssistant Vice President+1 908 439 2200, ext. 5892rosemarie.mirabella@ambest.comorChristopher SharkeyManager, Public Relations+1 908 439 2200, ext. 5159christopher.sharkey@ambest.comorJim PeavyAssistant Vice President, Public Relations+1 908 439 2200, ext. 5644james.peavy@ambest.com

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