AM Best Affirms Credit Ratings of Reinsurance Group of America, Incorporated and Its Subsidiaries
October 27 2022 - 1:58PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A+
(Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR)
of “aa-” (Superior) of RGA Reinsurance Company (Chesterfield, MO),
RGA Americas Reinsurance Company Ltd (Bermuda), RGA Life
Reinsurance Company of Canada (Toronto, Canada), Aurora National
Life Assurance Company (Los Angeles, CA) and RGA Atlantic
Reinsurance Company, Ltd. (Barbados). These companies collectively
are referred to as RGA. AM Best also has affirmed the Long-Term ICR
of “a-” (Excellent) and all existing Long-Term Issue Credit Ratings
(Long-Term IRs) on the debt securities and indicative shelf ratings
of Reinsurance Group of America, Incorporated (Chesterfield, MO)
[NYSE: RGA]. The outlook of these Credit Ratings (ratings) is
stable. Concurrently AM Best has assigned “bbb+” (Good) on the $700
million, 7.125% subordinated debentures, due 2052 of Reinsurance
Group of America, Incorporated. The outlook assigned to this rating
is stable. (See below for a detailed listing of the Long-Term
IRs.)
The ratings reflect RGA’s balance sheet strength, which AM Best
assesses as very strong, as well as its strong operating
performance, favorable business profile and very strong enterprise
risk management (ERM).
RGA’s balance sheet strength remains very strong underpinned by
its consolidated risk-adjusted capitalization, which remains at the
strongest level, as measured by Best’s Capital Adequacy Ratio
(BCAR), despite significant impacts from the COVID-19 pandemic over
the past two years. RGA had bolstered its balance sheet strength
over the past two years by reducing the level of share repurchases,
while increasing the level of cash and cash equivalents within the
organization. While the company has since reduced the level of cash
within the organization, liquidity measures remain strong and
financial leverage remains well within AM Best guidelines for the
current rating. In addition, RGA maintains a high quality
investment portfolio, which has experienced only a modest amount of
impairments during the past year.
RGA also benefits from its leading market positions in the
United States, Canada, Europe and Asia with approximately 45% of
revenues coming from international operations. Overall net premiums
increased about 7% in 2021 after a more modest increase in 2020 due
to the pandemic. Premium growth has primarily been driven by growth
in all geographic areas of its traditional reinsurance segment, and
particularly in Asia. The company’s extensive risk management
framework, which includes a strong focus on operational and
strategic risks in addition to performing a multitude of stress
tests and continual monitoring of emerging risks, are key factors
in its very strong ERM assessment.
Partially offsetting these positive rating factors is the
volatility of earnings in recent periods within certain core
segments, including its U.S. individual mortality segment and its
Australia business segment. AM Best notes that mortality increased
materially over the past two and a half years due to the COVID-19
pandemic, leading to losses in the individual life insurance
segment. The pandemic has also negatively impacted the amount of
insurance in-force over the past two years due to high mortality
and increased lapses. However, earnings generated from its other
core businesses generally have been increasing in recent periods
and mortality has shown improvement in more recent months. While
some earnings volatility may continue over the near term, AM Best
expects that earnings will gradually improve as mortality rates
continue to decline as COVID-19 moves into an endemic phase. RGA
also has increased its exposure to higher-risk product lines,
including annuities and longevity reinsurance, and maintains a
moderate-sized block of long-term care business that may add to
operating volatility over the mid-to-long term.
The following Long-Term IRs have been affirmed with a stable
outlook:
Reinsurance Group of America, Incorporated— —
“a-” (Excellent) on $400 million 4.7% senior unsecured notes, due
2023 — “a-” (Excellent) on $400 million 3.95% senior unsecured
notes, due 2026 — “a-” (Excellent) on $600 million 3.9% senior
unsecured notes, due 2029 — “a-” (Excellent) on $600 million 3.15%
senior unsecured notes, due 2030 — “bbb+” (Good) on $400 million
6.2% fixed to floating subordinated debentures, due 2042 — “bbb+”
(Good) on $400 million 5.75% fixed to floating rate subordinated
debentures, due 2056 — “bbb” (Good) on $400 million variable rate
junior subordinated debentures, due 2065
The following indicative Long-Term IRs available under shelf
registrations have been affirmed with a stable outlook:
Reinsurance Group of America, Incorporated— —
“a-” (Excellent) on senior unsecured debt — “bbb+” (Good) on
subordinated debt — “bbb” (Good) on preferred stock
RGA Capital Trust III and IV— — “bbb” (Good)
on trust preferred securities
This press release relates to Credit Ratings that have been
published on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please
view Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2022 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221027006001/en/
Michael Adams Associate Director +1 908 439
2200, ext. 5133 michael.adams@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Michael Porcelli Senior Director +1 908 439
2200, ext. 5548 michael.porcelli@ambest.com
Al Slavin Communications Specialist +1 908 439
2200, ext. 5098 al.slavin@ambest.com
Reinsurance Group of Ame... (NYSE:RGA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Reinsurance Group of Ame... (NYSE:RGA)
Historical Stock Chart
From Apr 2023 to Apr 2024