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Reinsurance Group (RGA) Q2 Earnings and Revenues Beat
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Reinsurance Group of America, Incorporated (RGA - Free Report) reported second-quarter 2024 adjusted operating earnings of $5.48 per share, which beat the Zacks Consensus Estimate by 10.9%. The bottom line increased 24.5% from the year-ago quarter. Net foreign currency fluctuations had a favorable effect of 6 cents per share on adjusted operating income compared with the prior year.
Reinsurance Group witnessed a solid performance in the U.S. and Latin America, Europe, Middle East and Africa (EMEA) and Asia/Pacific segments, partially offset by weakness in the Canada segment.
RGA's operating revenues of $5.1 billion improved 20.3% year over year, driven by higher net premiums, investment income, net of related expenses and other revenues. It beat the consensus estimate by 4.7%.
Net premiums of $3.9 billion jumped 17.5% year over year. Investment income and net of related expenses increased 26.3% from the prior-year quarter to $1.1 billion. The average investment yield increased 23 basis points to 4.65%, primarily due to higher new money rates.
Total benefits and expenses at Reinsurance Group climbed 18.5% year over year to $4.6 billion on higher claims and other policy benefits, interest credited, policy acquisition costs and other insurance expenses, other operating expenses and interest expense.
Reinsurance Group of America, Incorporated Price, Consensus and EPS Surprise
U.S. and Latin America: Total pre-tax adjusted operating income was $247 million in the quarter, which increased 43% year over year.
The Traditional segment reported a pre-tax adjusted operating income of $167 million in the quarter, which more than doubled year over year. Net premiums increased 4% from the year-ago quarter to $1.8 billion.
The Financial Solutions segment’s pre-tax adjusted operating income decreased 26.6% year over year to $80 million. The results were slightly below expectations due to lower variable investment income.
Canada: Total pre-tax adjusted operating income decreased 13.2% to $33 million.
The Traditional segment’s pre-tax adjusted operating income jumped 18.6% year over year to $26 million. Net premiums rose 6.2% to $326 million. Foreign currency exchange rates had an unfavorable effect on net premiums of $6 million.
The Financial Solutions segment’s pre-tax adjusted operating income decreased 16.7% year over year to $7 million. Foreign currency exchange rates had an immaterial effect on pre-tax adjusted operating income.
EMEA: Total pre-tax adjusted operating income was $85 million, which increased 21.4% year over year.
Pre-tax adjusted operating loss of the Traditional segment was $1 million against a profit of $4 million in the year-ago period. Foreign currency exchange rates had an immaterial effect on pre-tax adjusted operating income. Premiums rose 15.8% to $497 million in the quarter. Foreign currency exchange rates had a favorable effect on net premiums of $1 million for the quarter.
The Financial Solutions segment delivered pre-tax adjusted operating income of $86 million, up 30.3% year over year. Foreign currency exchange rates had a favorable effect on pre-tax adjusted operating income.
Asia/Pacific: Total pre-tax adjusted operating income was $170 million, up 12.6% year over year.
The Traditional segment’s pre-tax adjusted operating income was $99 million, up 11.2% year over year. Foreign currency exchange rates had an adverse effect of $2 million on pre-tax adjusted operating income.
Premiums increased 4.6% to $708 million. Foreign currency exchange rates had an adverse effect on net premiums of $23 million.
The Financial Solutions segment’s pre-tax adjusted operating income climbed 14.5% to $71 million. Net premiums increased 13.6% to $50 million. Foreign currency exchange rates had an adverse effect of $2 million on pre-tax adjusted operating income.
Corporate and Other: Pre-tax adjusted operating loss was $44 million, narrower than the year-ago loss of $55 million.
Financial Update
As of Jun 30, 2024, Reinsurance Group had assets worth $109.9 billion and $3.8 trillion of life reinsurance in force.
As of Jun 30, 2024, RGA’s book value per share, excluding accumulated other comprehensive income, rose 6.6% year over year to $148.19.
Adjusted operating return on equity, excluding accumulated other comprehensive income, was 15.3. Reinsurance Group exited the quarter with $1 billion in excess capital.
Capital Deployment
RGA deployed $307 million for in-force transactions.
The board approved a 4.7% increase in its dividend to 89 cents. The dividend will be paid out on Aug 27, 2024, to shareholders of record as of Aug 13, 2024.
Voya Financial, Inc. (VOYA - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.27 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line, however, decreased 1.7% year over year. Adjusted operating revenues amounted to $324 million, down 6.6% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Net investment income declined 5% year over year to $518 million. Premiums totaled $790 million, up 16.7% from the year-ago quarter. As of Jun 30, 2024, VOYA’s assets under management, assets under administration and advisement totaled $861.3 billion.
Unum Group’s (UNM - Free Report) second-quarter 2024 operating net income of $2.16 per share beat the Zacks Consensus Estimate by 6.9%. The bottom line increased 4.8% year over year. Total operating revenues of Unum Group were $3.2 billion, up 4.2% year over year, driven by higher premium income, other income and improved net investment income. The top line beat the Zacks Consensus Estimate by 0.5%.
Premiums increased 4.7% from the prior-year quarter to $2.6 billion. The figure matched our estimate as well as the Zacks Consensus Estimate. Riding on the solid first half of 2024, UNM increased the outlook for after-tax adjusted operating income per share to 10-15% from the earlier guidance of 7-9%.
Lincoln National Corporation’s (LNC - Free Report) second-quarter 2024 adjusted earnings of $1.84 per share beat the Zacks Consensus Estimate by 3.4%. However, the bottom line declined 8.9% year over year. Adjusted operating revenues of $4.5 billion dropped 4.3% year over year in the quarter under review. The top line lagged the consensus mark by 2.7%.
Fee income declined 1.9% year over year to $1.3 billion, which missed the Zacks Consensus Estimate by 2.1%. Insurance premiums of $1.6 billion rose 0.8% year over year. The metric beat the consensus mark by 0.7%. Net investment income of $1.3 billion dipped 11.7% year over year and missed the consensus mark by 1.7%. Meanwhile, other revenues fell 5.9% year over year.
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Reinsurance Group (RGA) Q2 Earnings and Revenues Beat
Reinsurance Group of America, Incorporated (RGA - Free Report) reported second-quarter 2024 adjusted operating earnings of $5.48 per share, which beat the Zacks Consensus Estimate by 10.9%. The bottom line increased 24.5% from the year-ago quarter. Net foreign currency fluctuations had a favorable effect of 6 cents per share on adjusted operating income compared with the prior year.
Reinsurance Group witnessed a solid performance in the U.S. and Latin America, Europe, Middle East and Africa (EMEA) and Asia/Pacific segments, partially offset by weakness in the Canada segment.
RGA's operating revenues of $5.1 billion improved 20.3% year over year, driven by higher net premiums, investment income, net of related expenses and other revenues. It beat the consensus estimate by 4.7%.
Net premiums of $3.9 billion jumped 17.5% year over year. Investment income and net of related expenses increased 26.3% from the prior-year quarter to $1.1 billion. The average investment yield increased 23 basis points to 4.65%, primarily due to higher new money rates.
Total benefits and expenses at Reinsurance Group climbed 18.5% year over year to $4.6 billion on higher claims and other policy benefits, interest credited, policy acquisition costs and other insurance expenses, other operating expenses and interest expense.
Reinsurance Group of America, Incorporated Price, Consensus and EPS Surprise
Reinsurance Group of America, Incorporated price-consensus-eps-surprise-chart | Reinsurance Group of America, Incorporated Quote
Quarterly Segment Update
U.S. and Latin America: Total pre-tax adjusted operating income was $247 million in the quarter, which increased 43% year over year.
The Traditional segment reported a pre-tax adjusted operating income of $167 million in the quarter, which more than doubled year over year. Net premiums increased 4% from the year-ago quarter to $1.8 billion.
The Financial Solutions segment’s pre-tax adjusted operating income decreased 26.6% year over year to $80 million. The results were slightly below expectations due to lower variable investment income.
Canada: Total pre-tax adjusted operating income decreased 13.2% to $33 million.
The Traditional segment’s pre-tax adjusted operating income jumped 18.6% year over year to $26 million. Net premiums rose 6.2% to $326 million. Foreign currency exchange rates had an unfavorable effect on net premiums of $6 million.
The Financial Solutions segment’s pre-tax adjusted operating income decreased 16.7% year over year to $7 million. Foreign currency exchange rates had an immaterial effect on pre-tax adjusted operating income.
EMEA: Total pre-tax adjusted operating income was $85 million, which increased 21.4% year over year.
Pre-tax adjusted operating loss of the Traditional segment was $1 million against a profit of $4 million in the year-ago period. Foreign currency exchange rates had an immaterial effect on pre-tax adjusted operating income. Premiums rose 15.8% to $497 million in the quarter. Foreign currency exchange rates had a favorable effect on net premiums of $1 million for the quarter.
The Financial Solutions segment delivered pre-tax adjusted operating income of $86 million, up 30.3% year over year. Foreign currency exchange rates had a favorable effect on pre-tax adjusted operating income.
Asia/Pacific: Total pre-tax adjusted operating income was $170 million, up 12.6% year over year.
The Traditional segment’s pre-tax adjusted operating income was $99 million, up 11.2% year over year. Foreign currency exchange rates had an adverse effect of $2 million on pre-tax adjusted operating income.
Premiums increased 4.6% to $708 million. Foreign currency exchange rates had an adverse effect on net premiums of $23 million.
The Financial Solutions segment’s pre-tax adjusted operating income climbed 14.5% to $71 million. Net premiums increased 13.6% to $50 million. Foreign currency exchange rates had an adverse effect of $2 million on pre-tax adjusted operating income.
Corporate and Other: Pre-tax adjusted operating loss was $44 million, narrower than the year-ago loss of $55 million.
Financial Update
As of Jun 30, 2024, Reinsurance Group had assets worth $109.9 billion and $3.8 trillion of life reinsurance in force.
As of Jun 30, 2024, RGA’s book value per share, excluding accumulated other comprehensive income, rose 6.6% year over year to $148.19.
Adjusted operating return on equity, excluding accumulated other comprehensive income, was 15.3. Reinsurance Group exited the quarter with $1 billion in excess capital.
Capital Deployment
RGA deployed $307 million for in-force transactions.
The board approved a 4.7% increase in its dividend to 89 cents. The dividend will be paid out on Aug 27, 2024, to shareholders of record as of Aug 13, 2024.
Zacks Rank
Reinsurance Group currently carries a Zacks Rank #2 (Buy). 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 second-quarter 2024 adjusted operating earnings of $2.27 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line, however, decreased 1.7% year over year. Adjusted operating revenues amounted to $324 million, down 6.6% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Net investment income declined 5% year over year to $518 million. Premiums totaled $790 million, up 16.7% from the year-ago quarter. As of Jun 30, 2024, VOYA’s assets under management, assets under administration and advisement totaled $861.3 billion.
Unum Group’s (UNM - Free Report) second-quarter 2024 operating net income of $2.16 per share beat the Zacks Consensus Estimate by 6.9%. The bottom line increased 4.8% year over year. Total operating revenues of Unum Group were $3.2 billion, up 4.2% year over year, driven by higher premium income, other income and improved net investment income. The top line beat the Zacks Consensus Estimate by 0.5%.
Premiums increased 4.7% from the prior-year quarter to $2.6 billion. The figure matched our estimate as well as the Zacks Consensus Estimate. Riding on the solid first half of 2024, UNM increased the outlook for after-tax adjusted operating income per share to 10-15% from the earlier guidance of 7-9%.
Lincoln National Corporation’s (LNC - Free Report) second-quarter 2024 adjusted earnings of $1.84 per share beat the Zacks Consensus Estimate by 3.4%. However, the bottom line declined 8.9% year over year. Adjusted operating revenues of $4.5 billion dropped 4.3% year over year in the quarter under review. The top line lagged the consensus mark by 2.7%.
Fee income declined 1.9% year over year to $1.3 billion, which missed the Zacks Consensus Estimate by 2.1%. Insurance premiums of $1.6 billion rose 0.8% year over year. The metric beat the consensus mark by 0.7%. Net investment income of $1.3 billion dipped 11.7% year over year and missed the consensus mark by 1.7%. Meanwhile, other revenues fell 5.9% year over year.