Fourth Quarter Results
- Net income available to RGA shareholders of $3.02 per diluted
share, including adverse foreign currency effects of $0.42 per
diluted share
- Adjusted operating income* of $2.99 per diluted share,
including adverse foreign currency effects of $0.22 per diluted
share
- Premium growth of 1.1% over the prior-year quarter, 6.0% on a
constant currency basis
- Deployed capital of $80 million into in-force and other
transactions
- Total shareholder capital returns of $78 million: $25 million
of share repurchases and $53 million of shareholder dividends
- Estimated COVID-19 impacts1 of approximately $70 million on a
pre-tax basis, or $0.78 per diluted share2
Full Year Results
- Net income available to RGA shareholders of $9.21 per diluted
share, including adverse foreign currency effects of $0.15 per
diluted share
- Adjusted operating income* of $14.43 per diluted share,
including adverse foreign currency effects of $0.53 per diluted
share
- Premium growth of 4.5% over the prior year, 8.4% on a constant
currency basis
- ROE 8.7% and adjusted operating ROE* 10.3% for the trailing
twelve months, reflecting 1.5%2 of COVID-19 impacts1
- Deployed capital of $430 million into in-force and other
transactions
- Total shareholder capital returns of $280 million: $75 million
of share repurchases and $205 million of shareholder dividends
- Estimated COVID-19 impacts1 of approximately $447 million on a
pre-tax basis, or $5.02 per diluted share2
1 COVID-19 impact estimates include fourth quarter mortality and
morbidity claims of approximately $71 million with offsetting
impact from longevity of approximately $1 million and full year
2022 mortality and morbidity claims of approximately $453 million
with offsetting impacts from longevity of approximately $6 million.
2 Tax effected at 24%.
Reinsurance Group of America, Incorporated (NYSE: RGA), a
leading global provider of life and health reinsurance, reported
fourth quarter net income available to RGA shareholders of $204
million, or $3.02 per diluted share, compared with $156 million, or
$2.30 per diluted share, in the prior-year quarter. Adjusted
operating income* for the fourth quarter totaled $202 million, or
$2.99 per diluted share, compared with adjusted operating loss of
$38 million, or $0.56 per diluted share, the year before. Net
foreign currency fluctuations had an adverse effect of $0.42 per
diluted share on net income available to RGA shareholders and $0.22
per diluted share on adjusted operating income as compared with the
prior year.
Quarterly Results
Full Year Results
($ in millions, except per share
data)
2022
2021
2022
2021
Net premiums
$
3,446
$
3,407
$
13,078
$
12,513
Net income available to RGA
shareholders
204
156
623
617
Net income available to RGA shareholders
per diluted share
3.02
2.30
9.21
9.04
Adjusted operating income (loss)*
202
(38
)
977
77
Adjusted operating income (loss) per
diluted share*
2.99
(0.56
)
14.43
1.13
Book value per share
62.16
193.75
Book value per share, excluding
accumulated other comprehensive income (AOCI)*
146.22
139.53
Total assets
84,706
92,175
*
See ‘Use of Non-GAAP Financial Measures’
below
Full year net income totaled $623 million, or $9.21 per diluted
share, compared with $617 million, or $9.04 per diluted share in
2021. Adjusted operating income for the full year totaled $977
million, or $14.43 per diluted share, compared with $77 million, or
$1.13 per diluted share the year before. Net foreign currency
fluctuations had an adverse effect of $0.15 per diluted share on
net income and $0.53 per diluted share on adjusted operating income
as compared with the prior year.
In the fourth quarter, consolidated net premiums totaled $3.4
billion, an increase of 1.1% over 2021’s fourth quarter, with an
adverse net foreign currency effect of $164 million. Excluding the
net foreign currency effect, consolidated net premiums increased
6.0% in the quarter. For the full year, net premiums totaled $13.1
billion, increasing 4.5% in 2022. Full year premiums reflected an
adverse foreign currency effect of $490 million. Excluding the net
foreign currency effect, consolidated net premiums increased 8.4%
for the full year.
Compared with the year-ago period, excluding spread-based
businesses, fourth quarter investment income decreased 2.8%,
reflecting lower variable investment income. For the full year,
investment income, excluding spread-based business, decreased 2.1%,
reflecting lower variable investment income. Average investment
yield decreased to 4.45% in the fourth quarter from 4.70% in the
prior year period due to lower variable investment income this
quarter. For the full year, the average investment yield decreased
to 4.69%, from 4.99% in 2021, due to lower variable investment
income.
The effective tax rate on pre-tax income was 23.9% for the
quarter and 24.6% for the full year.
The effective tax rate for the quarter was 17.5% on pre-tax
adjusted operating income. The tax rate was below the expected
range of 23% to 24% primarily due to adjustments for tax returns
filed during the quarter and an increase in foreign tax credits.
For the full year, the adjusted operating effective tax rate was
22.5%, in line with the expected range of 23% to 24%.
Anna Manning, Chief Executive Officer, commented, “It was a very
successful year for RGA, and I view our fourth quarter performance
as solid with many segments reporting strong results. Our Financial
Solutions business continued to deliver very good results across
regions and product lines, and the performance of our Asia
traditional business was also very strong. In the U.S., Group and
Individual Health businesses both performed well in the quarter. We
continue to see good new business activity in our organic business
and in the pipeline for in-force and other transactions.
“On the capital front, we deployed $80 million into in-force and
other transactions, bringing the full year total to $430 million.
Additionally, we repurchased $25 million of common shares, bringing
the full year total to $75 million. Our balance sheet remains
strong, and we ended the quarter with excess capital of
approximately $1.2 billion. Based on favorable business conditions
and RGA's global leadership position, we are optimistic about the
future and expect to continue to deliver attractive financial
results over time.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Net premiums
$
1,778
$
1,697
$
6,590
$
6,244
Pre-tax income (loss)
21
(211
)
268
(540
)
Pre-tax adjusted operating income
(loss)
15
(215
)
220
(546
)
Quarterly Results
- Results reflected unfavorable individual mortality experience,
including $44 million of COVID-19 claim costs, partially offset by
higher-than-expected investment income.
- Individual Health experience was favorable, driven by higher
investment income and favorable claims experience.
- Group experience was very favorable, primarily due to
experience in both the healthcare and life lines of business.
- Additional COVID-19 claims in Group and Latin America totaled
$4 million.
Full Year Results
- Results reflected favorable non-COVID-19 individual mortality,
and favorable Individual Health and Group underwriting
experience.
- COVID-19 claim costs totaled $336 million.
Financial Solutions
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Asset-Intensive:
Pre-tax income
$
2
$
93
$
59
$
422
Pre-tax adjusted operating income
80
73
293
341
Capital Solutions:
Pre-tax income
22
25
140
93
Pre-tax adjusted operating income
22
25
140
93
Quarterly Results
- Asset-Intensive results reflected favorable investment spreads,
primarily driven by higher interest rates.
- Capital Solutions results were in line with expectations.
Full Year Results
- Asset-Intensive results reflected favorable overall
experience.
- Capital Solutions results were above expectations, primarily
due to a treaty recapture fee.
Canada
Traditional
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Net premiums
$
308
$
324
$
1,219
$
1,194
Pre-tax income
32
28
86
128
Pre-tax adjusted operating income
28
29
90
130
Net Premiums
- Foreign currency exchange rates had an adverse effect on net
premiums of $23 million and $47 million for the quarter and full
year, respectively.
Quarterly Results
- Results reflected unfavorable group life and disability
experience; COVID-19 claim costs were $3 million.
- Foreign currency exchange rates had an adverse effect of $2
million on pre-tax income and pre-tax adjusted operating
income.
Full Year Results
- Results reflected unfavorable individual mortality experience,
including $30 million of COVID-19 claim costs.
- Foreign currency exchange rates had an adverse effect of $4
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Pre-tax income
$
11
$
5
$
32
$
15
Pre-tax adjusted operating income
11
5
32
15
Quarterly Results
- Results reflected favorable longevity experience.
- Foreign currency exchange rates had an adverse effect of $1
million on pre-tax income and pre-tax adjusted operating
income.
Full Year Results
- Results reflected favorable longevity experience.
- Foreign currency exchange rates had an adverse effect of $1
million on pre-tax income and pre-tax adjusted operating
income.
Europe, Middle East and Africa (EMEA)
Traditional
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Net premiums
$
422
$
435
$
1,736
$
1,738
Pre-tax income (loss)
13
(68
)
10
(239
)
Pre-tax adjusted operating income
(loss)
13
(68
)
10
(239
)
Net Premiums
- Foreign currency exchange rates had an adverse effect on net
premiums of $53 million and $183 million for the quarter and full
year, respectively.
Quarterly Results
- Results were in line with expectations, reflecting unfavorable
U.K. mortality experience, offset by favorable experience
otherwise.
- COVID-19 claim costs were $2 million.
- Foreign currency exchange rates had an adverse effect of $1
million on pre-tax income and pre-tax adjusted operating
income.
Full Year Results
- Results reflected unfavorable U.K. mortality experience,
including $17 million of COVID-19 claim costs throughout the
segment.
- Foreign currency exchange rates had an adverse effect of $2
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Pre-tax income
$
47
$
75
$
196
$
303
Pre-tax adjusted operating income
63
70
257
257
Quarterly Results
- Results reflected modestly favorable experience.
- Foreign currency exchange rates had an adverse effect of $6
million on pre-tax income and $10 million on pre-tax adjusted
operating income.
Full Year Results
- Results reflected modestly favorable experience.
- Foreign currency exchange rates had an adverse effect of $17
million on pre-tax income and $28 million on pre-tax adjusted
operating income.
Asia Pacific
Traditional
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Net premiums
$
700
$
773
$
2,650
$
2,624
Pre-tax income (loss)
67
57
294
(10
)
Pre-tax adjusted operating income
(loss)
67
57
294
(10
)
Net Premiums
- Foreign currency exchange rates had an adverse effect on net
premiums of $61 million and $172 million for the quarter and full
year, respectively.
Quarterly Results
- Results reflected favorable underwriting experience, absorbing
$13 million of COVID-19 claim costs.
- Australia reported a profit due to favorable Group
experience.
- Foreign currency exchange rates had an adverse effect of $3
million on pre-tax income and $2 million on pre-tax adjusted
operating income.
Full Year Results
- Results reflected favorable underwriting experience, absorbing
$39 million of COVID-19 claim costs.
- Australia reported a profit driven by favorable Group
experience.
- Foreign currency exchange rates had an adverse effect of $12
million on pre-tax income and pre-tax adjusted operating
income.
Financial Solutions
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Net premiums
$
64
$
52
$
236
$
218
Pre-tax income (loss)
106
33
(18
)
98
Pre-tax adjusted operating income
35
29
97
93
Quarterly Results
- Results reflected strong new business and favorable investment
spreads.
- Foreign currency exchange rates had an adverse effect of $18
million on pre-tax income and $3 million on pre-tax adjusted
operating income.
Full Year Results
- Results reflected strong new business and favorable investment
spreads, offset by COVID-19 claim costs related to medical
hospitalization claims in Japan.
- Foreign currency exchange rates had a favorable effect of $24
million on pre-tax loss and an adverse effect of $3 million on
pre-tax adjusted operating income.
Corporate and Other
Quarterly Results
Full Year Results
($ in millions)
2022
2021
2022
2021
Pre-tax income (loss)
$
(50
)
$
20
$
(236
)
$
421
Pre-tax adjusted operating loss
(89
)
(41
)
(172
)
(13
)
Quarterly Results
- Pre-tax adjusted operating loss was unfavorable compared with
the quarterly average run rate, primarily due to higher general
expenses, including recurring year-end expense accruals, and higher
financing costs.
Full Year Results
- Results reflected higher general expenses and financing
costs.
- As previously reported, 2021 pre-tax income reflected a
one-time adjustment of $162 million recorded in the first quarter
associated with prior periods, which includes $92 million to
correct the accounting for equity method limited partnership
investments to reflect unrealized gains in investment income that
were previously reflected in accumulated other comprehensive
income, and $70 million reflected in investment related
gains/losses associated with unrealized gains on cost method
limited partnership investments. 2021 pre-tax income also reflected
gains on the sale of investments and additional unrealized gains on
limited partnership investments.
Long Duration Targeted Improvements
In the first quarter of 2023, the Company will adopt Accounting
Standards Update 2018-12, Financial Services – Insurance (Topic
944): Targeted Improvements to the Accounting for Long-Duration
Contracts (“LDTI”).
The Company estimates the adoption of LDTI will:
- decrease retained earnings by $0.5 billion to $0.8 billion, net
of tax assumed at 24%, as of September 30, 2022; and
- increase accumulated other comprehensive income by $2.1 billion
to $4.1 billion, net of tax assumed at 24%, as of September 30,
2022.
The LDTI adjustments as of January 1 and December 31, 2021, are
consistent with previously provided ranges. All LDTI adjustments
are estimates and subject to change. Please see the Company’s
quarterly earnings presentation furnished as Exhibit 99.3 to the
Company’s Current Report on Form 8-K filed with the U.S. Securities
and Exchange Commission on February 2, 2023, for additional
details.
Dividend Declaration
Effective January 31, 2023, the board of directors declared a
regular quarterly dividend of $0.80, payable February 28, 2023, to
shareholders of record as of February 14, 2023.
Earnings Conference Call
A conference call to discuss fourth quarter results will begin
at 10 a.m. Eastern Time on Friday, February 3. Interested parties
may access the call by dialing 1-844-481-2753 (412-317-0669
international) and asking to be joined into the Reinsurance Group
of America, Incorporated (RGA) call. A live audio webcast of the
conference call will be available on the Company’s Investor
Relations website at www.rgare.com. A replay of the conference call
will be available at the same address for 90 days following the
conference call.
The Company has posted to its website an earnings presentation
and a Quarterly Financial Supplement that includes financial
information for all segments as well as information on its
investment portfolio. Additionally, the Company posts periodic
reports, press releases and other useful information on its
Investor Relations website.
Use of Non-GAAP Financial Measures
RGA uses a non-GAAP financial measure called adjusted operating
income as a basis for analyzing financial results. This measure
also serves as a basis for establishing target levels and awards
under RGA’s management incentive programs. Management believes that
adjusted operating income, on a pre-tax and after-tax basis, better
measures the ongoing profitability and underlying trends of the
Company’s continuing operations, primarily because that measure
excludes substantially all of the effect of net investment related
gains and losses, as well as changes in the fair value of certain
embedded derivatives and related deferred acquisition costs. These
items can be volatile, primarily due to the credit market and
interest rate environment, and are not necessarily indicative of
the performance of the Company’s underlying businesses.
Additionally, adjusted operating income excludes any net gain or
loss from discontinued operations, the cumulative effect of any
accounting changes, tax reform and other items that management
believes are not indicative of the Company’s ongoing operations.
The definition of adjusted operating income can vary by company and
is not considered a substitute for GAAP net income.
Book value per share excluding the impact of AOCI is a non-GAAP
financial measure that management believes is important in
evaluating the balance sheet in order to ignore the effects of
unrealized amounts primarily associated with mark-to-market
adjustments on investments and foreign currency translation.
Adjusted operating income per diluted share is a non-GAAP
financial measure calculated as adjusted operating income divided
by weighted average diluted shares outstanding. Adjusted operating
return on equity is a non-GAAP financial measure calculated as
adjusted operating income divided by average stockholders’ equity
excluding AOCI. Similar to adjusted operating income, management
believes these non-GAAP financial measures better reflect the
ongoing profitability and underlying trends of the Company’s
continuing operations, they also serve as a basis for establishing
target levels and awards under RGA’s management incentive
programs.
Reconciliations from GAAP net income, book value per share, net
income per diluted share and average stockholders’ equity are
provided in the following tables. Additional financial information
can be found in the Quarterly Financial Supplement on RGA’s
Investor Relations website at www.rgare.com in the “Financial
Information” section.
About RGA
Reinsurance Group of America, Incorporated (NYSE: RGA) is a
global industry leader specializing in life and health reinsurance
and financial solutions that help clients effectively manage risk
and optimize capital. Founded in 1973, RGA celebrates its 50th
anniversary in 2023. Over the past five decades, RGA has become one
of the world’s largest and most respected reinsurers and is listed
among Fortune's World's Most Admired Companies. The global
organization is guided by a fundamental purpose: to make financial
protection accessible to all. RGA is widely recognized for superior
risk management and underwriting expertise, innovative product
design, and dedicated client focus. RGA serves clients and partners
in key markets around the world and has approximately $3.4 trillion
of life reinsurance in force and assets of $84.7 billion as of
December 31, 2022. To learn more about RGA and its businesses,
visit www.rgare.com. Follow RGA on LinkedIn and Facebook.
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
including, among others, statements relating to projections of the
future operations, strategies, earnings, revenues, income or loss,
ratios, financial performance and growth potential of the Company.
Forward-looking statements often contain words and phrases such as
“anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,”
“expect,” “if,” “intend,” “likely,” “may,” “plan,” “potential,”
“project,” “should,” “will,” “would,” and other words and terms of
similar meaning or that are otherwise tied to future periods or
future performance, in each case in all derivative forms.
Forward-looking statements are based on management’s current
expectations and beliefs concerning future developments and their
potential effects on the Company. Forward-looking statements are
not a guarantee of future performance and are subject to risks and
uncertainties, some of which cannot be predicted or quantified.
Future events and actual results, performance, and achievements
could differ materially from those set forth in, contemplated by or
underlying the forward-looking statements.
Factors that could also cause results or events to differ,
possibly materially, from those expressed or implied by
forward-looking statements, include, among others: (1) adverse
changes in mortality (whether related to COVID-19 or otherwise),
morbidity, lapsation or claims experience, (2) inadequate risk
analysis and underwriting, (3) adverse capital and credit market
conditions and their impact on the Company’s liquidity, access to
capital and cost of capital, (4) changes in the Company’s financial
strength and credit ratings and the effect of such changes on the
Company’s future results of operations and financial condition, (5)
the availability and cost of collateral necessary for regulatory
reserves and capital, (6) requirements to post collateral or make
payments due to declines in the market value of assets subject to
the Company’s collateral arrangements, (7) action by regulators who
have authority over the Company’s reinsurance operations in the
jurisdictions in which it operates, (8) the effect of the Company
parent’s status as an insurance holding company and regulatory
restrictions on its ability to pay principal of and interest on its
debt obligations, (9) general economic conditions or a prolonged
economic downturn affecting the demand for insurance and
reinsurance in the Company’s current and planned markets, (10) the
impairment of other financial institutions and its effect on the
Company’s business, (11) fluctuations in U.S. or foreign currency
exchange rates, interest rates, or securities and real estate
markets, (12) market or economic conditions that adversely affect
the value of the Company’s investment securities or result in the
impairment of all or a portion of the value of certain of the
Company’s investment securities that in turn could affect
regulatory capital, (13) market or economic conditions that
adversely affect the Company’s ability to make timely sales of
investment securities, (14) risks inherent in the Company’s risk
management and investment strategy, including changes in investment
portfolio yields due to interest rate or credit quality changes,
(15) the fact that the determination of allowances and impairments
taken on the Company’s investments is highly subjective, (16) the
stability of and actions by governments and economies in the
markets in which the Company operates, including ongoing
uncertainties regarding the amount of U.S. sovereign debt and the
credit ratings thereof, (17) the Company’s dependence on third
parties, including those insurance companies and reinsurers to
which the Company cedes some reinsurance, third-party investment
managers and others, (18) financial performance of the Company’s
clients, (19) the threat of natural disasters, catastrophes,
terrorist attacks, pandemics, epidemics or other major public
health issues anywhere in the world where the Company or its
clients do business, (20) competitive factors and competitors’
responses to the Company’s initiatives, (21) development and
introduction of new products and distribution opportunities, (22)
execution of the Company’s entry into new markets, (23) integration
of acquired blocks of business and entities, (24) interruption or
failure of the Company’s telecommunication, information technology
or other operational systems, or the Company’s failure to maintain
adequate security to protect the confidentiality or privacy of
personal or sensitive data and intellectual property stored on such
systems, (25) adverse litigation or arbitration results, (26) the
adequacy of reserves, resources and accurate information relating
to settlements, awards and terminated and discontinued lines of
business, (27) changes in laws, regulations, and accounting
standards applicable to the Company or its business, including Long
Duration Targeted Improvement accounting changes and (28) other
risks and uncertainties described in this document and in the
Company’s other filings with the Securities and Exchange Commission
(“SEC”).
Forward-looking statements should be evaluated together with the
many risks and uncertainties that affect the Company’s business,
including those mentioned in this document and described in the
periodic reports the Company files with the SEC. These
forward-looking statements speak only as of the date on which they
are made. The Company does not undertake any obligation to update
these forward-looking statements, even though the Company’s
situation may change in the future. For a discussion of these risks
and uncertainties that could cause actual results to differ
materially from those contained in the forward-looking statements,
you are advised to see Item 1A – “Risk Factors” in the Company's
2021 Annual Report on Form 10-K, as may be supplemented by Item 1A
- “Risk Factors” in the Company’s subsequent Quarterly Reports on
Form 10-Q.
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated
Net Income to Adjusted Operating Income
(Dollars in millions, except per
share data)
(Unaudited)
Three Months Ended December
31,
2022
2021
Diluted
Earnings Per
Share
Diluted
Earnings Per
Share
Net income available to RGA
shareholders
$
204
$
3.02
$
156
$
2.30
Reconciliation to adjusted operating
income:
Capital (gains) losses, derivatives and
other, included in investment related gains/losses, net
(11
)
(0.15
)
(24
)
(0.36
)
Capital (gains) losses on funds withheld,
included in investment income, net of related expenses
1
0.01
(1
)
(0.01
)
Embedded derivatives:
Included in investment related
gains/losses, net
41
0.60
(39
)
(0.57
)
Included in interest credited
1
0.01
(8
)
(0.12
)
DAC offset, net
(28
)
(0.41
)
21
0.31
Investment (income) loss on unit-linked
variable annuities
2
0.03
(4
)
(0.06
)
Interest credited on unit-linked variable
annuities
(2
)
(0.03
)
4
0.06
Interest expense on uncertain tax
positions
—
—
(27
)
(0.40
)
Non-investment derivatives and other
1
0.01
4
0.06
Uncertain tax positions and other tax
related items
(9
)
(0.13
)
(120
)
(1.77
)
Net income attributable to noncontrolling
interest
2
0.03
—
—
Adjusted operating income (loss)
$
202
$
2.99
$
(38
)
$
(0.56
)
(Unaudited)
Twelve Months Ended December
31,
2022
2021
Diluted
Earnings Per
Share
Diluted
Earnings Per
Share
Net income available to RGA
shareholders
$
623
$
9.21
$
617
$
9.04
Reconciliation to adjusted operating
income:
Capital (gains) losses, derivatives and
other, included in investment related gains/losses, net
354
5.22
(338
)
(4.94
)
Capital (gains) losses on funds withheld,
included in investment income, net of related expenses
18
0.27
(4
)
(0.06
)
Embedded derivatives:
Included in investment related
gains/losses, net
107
1.58
(79
)
(1.16
)
Included in interest credited
(42
)
(0.62
)
(36
)
(0.53
)
DAC offset, net
(21
)
(0.31
)
30
0.44
Investment (income) loss on unit-linked
variable annuities
19
0.28
(3
)
(0.04
)
Interest credited on unit-linked variable
annuities
(19
)
(0.28
)
3
0.04
Interest expense on uncertain tax
positions
1
0.01
(21
)
(0.31
)
Non-investment derivatives and other
(62
)
(0.92
)
(2
)
(0.03
)
Uncertain tax positions and other tax
related items
(5
)
(0.07
)
(90
)
(1.32
)
Net income attributable to noncontrolling
interest
4
0.06
—
—
Adjusted operating income
$
977
$
14.43
$
77
$
1.13
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated
Effective Income Tax Rates
(Dollars in millions)
(Unaudited)
Three Months Ended
December 31, 2022
Twelve Months Ended
December 31, 2022
Pre-tax
Income
(Loss)
Income
Taxes
Effective
Tax Rate (1)
Pre-tax
Income
(Loss)
Income
Taxes
Effective
Tax Rate (1)
GAAP income
$
271
$
65
23.9
%
$
831
$
204
24.6
%
Reconciliation to adjusted operating
income:
Capital (gains) losses, derivatives and
other, included in investment related gains/losses, net
(45
)
(34
)
430
76
Capital (gains) losses on funds withheld,
included in investment income, net of related expenses
1
—
23
5
Embedded derivatives:
Included in investment related
gains/losses, net
52
11
135
28
Included in interest credited
1
—
(53
)
(11
)
DAC offset, net
(36
)
(8
)
(27
)
(6
)
Investment (income) loss on unit-linked
variable annuities
2
—
24
5
Interest credited on unit-linked variable
annuities
(2
)
—
(24
)
(5
)
Interest expense on uncertain tax
positions
—
—
1
—
Non-investment derivatives and other
1
—
(79
)
(17
)
Uncertain tax positions and other tax
related items
—
9
—
5
Adjusted operating income
$
245
$
43
17.5
%
$
1,261
$
284
22.5
%
(1)
The Company rounds amounts in the
financial statements to millions and calculates the effective tax
rate from the underlying whole-dollar amounts. Thus certain amounts
may not recalculate based on the numbers due to rounding.
Reconciliation of Consolidated
Income before Income Taxes to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Income before income taxes
$
271
$
57
$
831
$
691
Reconciliation to pre-tax adjusted
operating income:
Capital (gains) losses, derivatives and
other, included in investment related gains/losses, net
(45
)
(31
)
430
(429
)
Capital (gains) losses on funds withheld,
included in investment income, net of related expenses
1
(1
)
23
(5
)
Embedded derivatives:
Included in investment related
gains/losses, net
52
(49
)
135
(100
)
Included in interest credited
1
(9
)
(53
)
(45
)
DAC offset, net
(36
)
26
(27
)
38
Investment (income) loss on unit-linked
variable annuities
2
(5
)
24
(4
)
Interest credited on unit-linked variable
annuities
(2
)
5
(24
)
4
Interest expense on uncertain tax
positions
—
(34
)
1
(26
)
Non-investment derivatives and other
1
5
(79
)
(3
)
Pre-tax adjusted operating income
(loss)
$
245
$
(36
)
$
1,261
$
121
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Income
to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited)
Three Months Ended December 31,
2022
Pre-tax income
(loss)
Capital
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax adjusted
operating
income (loss)
U.S. and Latin America:
Traditional
$
21
$
1
$
(7
)
$
15
Financial Solutions:
Asset-Intensive
2
56
(1)
22
(2)
80
Capital Solutions
22
—
—
22
Total U.S. and Latin America
45
57
15
117
Canada Traditional
32
(4
)
—
28
Canada Financial Solutions
11
—
—
11
Total Canada
43
(4
)
—
39
EMEA Traditional
13
—
—
13
EMEA Financial Solutions
47
16
—
63
Total EMEA
60
16
—
76
Asia Pacific Traditional
67
—
—
67
Asia Pacific Financial Solutions
106
(71
)
—
35
Total Asia Pacific
173
(71
)
—
102
Corporate and Other
(50
)
(39
)
—
(89
)
Consolidated
$
271
$
(41
)
$
15
$
245
(1)
Asset-Intensive is net of $2 DAC
offset.
(2)
Asset-Intensive is net of $(38) DAC
offset.
(Unaudited)
Three Months Ended December 31,
2021
Pre-tax income
(loss)
Capital
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax adjusted
operating
income (loss)
U.S. and Latin America:
Traditional
$
(211
)
$
—
$
(4
)
$
(215
)
Financial Solutions:
Asset-Intensive
93
30
(1)
(50
)
(2)
73
Capital Solutions
25
—
—
25
Total U.S. and Latin America
(93
)
30
(54
)
(117
)
Canada Traditional
28
1
—
29
Canada Financial Solutions
5
—
—
5
Total Canada
33
1
—
34
EMEA Traditional
(68
)
—
—
(68
)
EMEA Financial Solutions
75
(5
)
—
70
Total EMEA
7
(5
)
—
2
Asia Pacific Traditional
57
—
—
57
Asia Pacific Financial Solutions
33
(4
)
—
29
Total Asia Pacific
90
(4
)
—
86
Corporate and Other
20
(61
)
—
(41
)
Consolidated
$
57
$
(39
)
$
(54
)
$
(36
)
(1)
Asset-Intensive is net of $22 DAC
offset.
(2)
Asset-Intensive is net of $4 DAC
offset.
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Income
to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited)
Twelve Months Ended December 31,
2022
Pre-tax income
(loss)
Capital
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax adjusted
operating
income (loss)
U.S. and Latin America:
Traditional
$
268
$
—
$
(48
)
$
220
Financial Solutions:
Asset-Intensive
59
191
(1)
43
(2)
293
Capital Solutions
140
—
—
140
Total U.S. and Latin America
467
191
(5
)
653
Canada Traditional
86
4
—
90
Canada Financial Solutions
32
—
—
32
Total Canada
118
4
—
122
EMEA Traditional
10
—
—
10
EMEA Financial Solutions
196
61
—
257
Total EMEA
206
61
—
267
Asia Pacific Traditional
294
—
—
294
Asia Pacific Financial Solutions
(18
)
115
—
97
Total Asia Pacific
276
115
—
391
Corporate and Other
(236
)
64
—
(172
)
Consolidated
$
831
$
435
$
(5
)
$
1,261
(1)
Asset-Intensive is net of $60 DAC
offset.
(2)
Asset-Intensive is net of $(87) DAC
offset.
(Unaudited)
Twelve Months Ended December 31,
2021
Pre-tax income
(loss)
Capital
(gains) losses,
derivatives
and other, net
Change in
value of
embedded
derivatives, net
Pre-tax adjusted
operating
income (loss)
U.S. and Latin America:
Traditional
$
(540
)
$
—
$
(6
)
$
(546
)
Financial Solutions:
Asset-Intensive
422
(2
)
(1)
(79
)
(2)
341
Capital Solutions
93
—
—
93
Total U.S. and Latin America
(25
)
(2
)
(85
)
(112
)
Canada Traditional
128
2
—
130
Canada Financial Solutions
15
—
—
15
Total Canada
143
2
—
145
EMEA Traditional
(239
)
—
—
(239
)
EMEA Financial Solutions
303
(46
)
—
257
Total EMEA
64
(46
)
—
18
Asia Pacific Traditional
(10
)
—
—
(10
)
Asia Pacific Financial Solutions
98
(5
)
—
93
Total Asia Pacific
88
(5
)
—
83
Corporate and Other
421
(434
)
—
(13
)
Consolidated
$
691
$
(485
)
$
(85
)
$
121
(1)
Asset-Intensive is net of $(22) DAC
offset.
(2)
Asset-Intensive is net of $60 DAC
offset.
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share
data)
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2022
2021
2022
2021
Earnings per share from net income
(loss):
Basic earnings per share
$
3.07
$
2.32
$
9.31
$
9.10
Diluted earnings per share (1)
$
3.02
$
2.30
$
9.21
$
9.04
Diluted earnings per share from adjusted
operating income (1)
$
2.99
$
(0.56
)
$
14.43
$
1.13
Weighted average number of common and
common equivalent shares outstanding
67,793
67,930
67,703
68,286
(1)
As a result of anti-dilutive impact, in
periods of a loss, weighted average common shares outstanding
(basic) are used in the calculation of diluted earnings per
share
(Unaudited)
At December 31,
2022
2021
Treasury shares
18,635
18,140
Common shares outstanding
66,676
67,171
Book value per share outstanding
$
62.16
$
193.75
Book value per share outstanding, before
impact of AOCI
$
146.22
$
139.53
Reconciliation of Book Value Per
Share to Book Value Per Share Excluding AOCI
(Unaudited)
At December 31,
2022
2021
Book value per share outstanding
$
62.16
$
193.75
Less effect of AOCI:
Accumulated currency translation
adjustments
(2.56
)
(0.13
)
Unrealized appreciation (depreciation) of
securities
(81.10
)
55.09
Pension and postretirement benefits
(0.40
)
(0.74
)
Book value per share outstanding, before
impact of AOCI
$
146.22
$
139.53
Reconciliation of Stockholders'
Average Equity to Stockholders' Average Equity Excluding AOCI
(Dollars in millions)
(Unaudited)
Trailing Twelve Months Ended December 31,
2022:
Average Equity
Stockholders' average equity
$
7,167
Less effect of AOCI:
Accumulated currency translation
adjustments
(86
)
Unrealized depreciation of securities
(2,176
)
Pension and postretirement benefits
(46
)
Stockholders' average equity, excluding
AOCI
$
9,475
Reconciliation of Trailing Twelve
Months of Consolidated Net Income to Adjusted Operating Income
and
Related Return on Equity
(Dollars in millions)
(Unaudited)
Return on
Equity
Trailing Twelve Months Ended December 31,
2022:
Income
Net income available to RGA
shareholders
$
623
8.7
%
Reconciliation to adjusted operating
income:
Capital (gains) losses, derivatives and
other, net
311
Change in fair value of embedded
derivatives
65
Deferred acquisition cost offset, net
(21
)
Tax expense on uncertain tax positions
(5
)
Net income attributable to noncontrolling
interest
4
Adjusted operating income
$
977
10.3
%
REINSURANCE GROUP OF AMERICA,
INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements
of Income
(Dollars in millions)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Revenues:
Net premiums
$
3,446
$
3,407
$
13,078
$
12,513
Investment income, net of related
expenses
828
771
3,161
3,138
Investment related gains (losses), net
8
88
(506
)
560
Other revenue
93
93
525
447
Total revenues
4,375
4,359
16,258
16,658
Benefits and expenses:
Claims and other policy benefits
3,191
3,482
12,046
12,776
Interest credited
214
159
682
700
Policy acquisition costs and other
insurance expenses
355
406
1,499
1,416
Other operating expenses
289
253
1,009
936
Interest expense
54
(2
)
184
127
Collateral finance and securitization
expense
1
4
7
12
Total benefits and expenses
4,104
4,302
15,427
15,967
Income before income taxes
271
57
831
691
Provision for income taxes
65
(99
)
204
74
Net income
206
156
627
617
Net income attributable to noncontrolling
interest
2
—
4
—
Net income available to RGA
shareholders
$
204
$
156
$
623
$
617
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230125005837/en/
Investor Contact Jeff Hopson Senior Vice President -
Investor Relations (636) 736-2068
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