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Reinsurance Group (RGA) Q1 Earnings Top Estimates, Rise Y/Y

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Reinsurance Group of America, Incorporated (RGA - Free Report) reported first-quarter 2022 adjusted operating earnings of 47 cents per share against the Zacks Consensus Estimate of a loss of 61 cents. In the year-ago quarter, RGA had reported a loss of $1.24 per share.

Net foreign currency fluctuations had an immaterial effect on adjusted operating income.

Reinsurance Group witnessed solid performance in the Asia/Pacific, U.S. and Latin America and Europe, Middle East and Africa (EMEA) segments, offset by soft results in Canada.

Reinsurance Group's operating revenues of $4 billion beat the Zacks Consensus Estimate by 2.7%. The top line also improved 6.3% year over year.

Net premiums of $3.1 billion rose 8.3% year over year. Investment income, net of related expenses, decreased 0.2% from the prior-year quarter to $810 million. The average investment yield was down 38 basis points to 5.29%.

Total benefits and expenses at Reinsurance Group increased 1.4% year over year to $3.9 billion on higher claims and other policy benefits, policy acquisition costs and other insurance expenses and other operating expenses.

Quarterly Segment Update

U.S. and Latin America: Total pre-tax loss was $82 million in the quarter, narrower than a pre-tax loss of $272 million in the year-ago quarter.

The Traditional segment reported a pre-tax adjusted operating loss of $181 million, narrower than the year-ago loss of $344 million. Results reflected nearly $272 million of COVID-19 claim costs, of which $260 million was related to individual mortality. Net premiums rose 8.6% from the year-ago quarter to $1.5 billion.

The Asset Intensive segment’s pre-tax adjusted operating income improved about 53.1% to $75 million. The Capital Solutions business reported pre-tax adjusted operating income of $24 million, up 4.3% year over year.

Canada: Total pre-tax income decreased 37.9% to $18 million.

The traditional segment’s pre-tax adjusted operating income decreased 78.3% year over year to $5 million. The results reflected unfavorable individual life experience, due to nearly $20 million of COVID-19 claim costs, as well as excess mortality claims that were driven by higher large claims. Net premiums increased 8.6% to $304 million.

The financial Solutions segment’s pre-tax adjusted operating income doubled year over year to $13 million, attributable to favorable longevity experience.

Europe, Middle East and Africa (EMEA): Total pre-tax income was $73 million against the prior-year quarter’s loss of $26 million.

Pre-tax adjusted operating loss of the traditional segment was $6 million narrower than the pre-tax adjusted operating loss of $68 million in the year-ago quarter, reflecting a moderate level of COVID-19 claims of $10 million and higher non-COVID-19 large claims in the U.K. Premiums increased 2.9% to $451 million in the quarter. Foreign currency exchange rates had an adverse effect of $16 million on net premiums.

The Financial Solutions segment delivered pre-tax adjusted operating income of $79 million, up 88.1% from the year-ago quarter, reflecting business growth and favorable longevity experience.

Asia/Pacific: Total pre-tax income of $72 million increased 20% from the prior-year quarter.

The Traditional segment’s pre-tax adjusted operating income of $51 million was up 24.4%, attributable to favorable overall underwriting experience in Asia and a profit in Australia. Premiums increased 6.7% to $650 million. Foreign currency exchange rates had an adverse effect of $23 million on net premiums.

The Financial Solutions segment’s pre-tax adjusted operating income increased 10.5% to $21 million. Net premiums decreased 18.9% to $43 million.

Corporate and Other: Pre-tax adjusted operating loss was $22 million against the year-ago income of $94 million in the prior-year period.

Financial Update

As of Mar 31, 2022, Reinsurance Group had assets worth $89.7 billion, up 5.8% from the level at 2021 end.

As of Mar 31, 2022, Reinsurance Group’s book value per share, excluding accumulated other comprehensive income, increased 3.1% year over year to $137.89.

The adjusted return on equity was 2.1%. Reinsurance Group exited the quarter with $1 billion in excess capital.

Capital Deployment

The board of directors approved a dividend of 73 cents per share to be paid out on May 31 to shareholders of record as of May 17.

On Feb 25, 2022, the board authorized a share repurchase program for up to $400 million of shares.

Zacks Rank

Reinsurance Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Voya Financial, Inc. (VOYA - Free Report) reported first-quarter 2022 adjusted operating earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased 42.7% year over year.

Total revenues amounted to $1.5 billion against ($2 billion) in the year-ago quarter. Net investment income declined 11.7% year over year to $630 million. Meanwhile, fee income of $433 million decreased 5.4% year over year. Premiums totaled $613 million versus ($5 billion) in the year-ago quarter. Total expenses were $1.4 billion versus a benefit of $3 million in the year-ago quarter. As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $707.3 billion.

Lincoln National Corporation (LNC - Free Report) reported first-quarter 2022 adjusted earnings of $1.66 per share, which missed the Zacks Consensus Estimate of $1.97. Also, the bottom line declined from the prior-year figure of $1.82 per share.

Adjusted operating revenues decreased to $4,718 million in the first quarter from $4,762 million a year ago. Also, it missed the consensus mark of $4,768 million.

Aon plc (AON - Free Report) reported first-quarter 2022 operating earnings of $4.83 per share, which missed the Zacks Consensus Estimate of $4.86. However, the bottom line climbed 13% year over year.

Total revenues improved 4% year over year to $3,670 million, which comprised organic revenue growth of 8%, partially offset by a 1% unfavorable impact from divestitures and a 3% unfavorable impact from foreign currency translation. The top line missed the consensus mark of $3,747 million.


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