Reinsurance Group of America, Incorporated (RGA) reported impressive financial results for the first quarter of 2024, showcasing the strength and resilience of its diversified business model. The company's net income for the full year 2023 reached $902 million on revenues of $18.577 billion, while operating cash flow and free cash flow stood at $4.044 billion and $4.121 billion, respectively.

Financials

In the first quarter of 2024, RGA reported pretax adjusted operating income of $516 million and adjusted operating earnings per share of $6.02. For the trailing 12 months, the company's adjusted operating return on equity was an impressive 14.8%. These results reflect the strong momentum across RGA's geographic regions and business segments.

Segment Performance

The company's U.S. and Latin America Traditional segment reported favorable individual life experience, as well as favorable health and group results. The U.S. Financial Solutions segment, however, was slightly below expectations due to lower variable investment income. Canada's Traditional business saw favorable experience in both group and individual life, while the Financial Solutions business reflected longevity experience in line with expectations.

In the Europe, Middle East, and Africa (EMEA) region, the Traditional business results reflected favorable timing impacts and positive contributions from new business, while the Financial Solutions segment's performance was in line with expectations. The Asia Pacific Traditional business reported favorable experience across the region, and the Financial Solutions segment also reflected favorable overall experience.

RGA's Corporate and Other segment reported a pretax adjusted operating loss of $38 million, in line with the expected quarterly average run rate.

Investment Portfolio

The company's investment portfolio continued to perform well, with the non-spread portfolio yield for the quarter at 4.7%, including the impact of lower variable investment income. RGA's new money rate was 6.12%, still well above the portfolio yield, but lower than the prior quarter, primarily reflecting lower average yields available in the market.

Liquidity

RGA's capital and liquidity positions remained strong, with the company ending the quarter with excess capital of approximately $600 million. The company has an active and balanced approach to capital management, and it deployed a record $737 million of capital into in-force transactions during the first quarter. RGA expects to retrocede a share of this to its subsidiary, Ruby Re, which is expected to increase available capital by approximately $150 million.

The company's book value per share, excluding accumulated other comprehensive income (AOCI) and impacts from Accounting Standards Update 2018-12 (ASU 2018-12) embedded derivatives, increased to $146.96, representing a compounded annual growth rate of 10.6% since the beginning of 2021.

Outlook

RGA's management remains confident in the company's ability to continue delivering attractive returns to shareholders. The primary drivers of the strong first-quarter results were favorable experience across the globe, strong premium growth, emerging earnings power from active capital deployment in prior periods, and the impact of higher interest rates.

The company sees very good opportunities across its geographies and business lines and is well-positioned to execute on its strategic plan. RGA's business continues to demonstrate its resilience and underlying earnings power, and the management team is excited about the future prospects of the company.

In terms of guidance, RGA has not provided any specific financial targets for 2024. However, the company's management has expressed confidence in its ability to deliver attractive returns to shareholders, driven by the strong performance across its geographic regions and business segments.

Conclusion

Overall, Reinsurance Group of America's impressive first-quarter results, coupled with its robust capital position and strategic initiatives, position the company well for continued growth and success in the years ahead.