RGA’s profits dip on COVID claims but CEO highlights resilience

Life reinsurer Reinsurance Group of America’s profits dipped in the third quarter though its new premiums enjoyed some growth.

The company posted a third quarter net profit of $213 million compared with $263 million in the prior-year quarter. Its adjusted operating income was $239 million compared with $256 million the year before.

In the third quarter, consolidated net premiums totalled $2.8 billion, an increase of 1 percent over last year’s third quarter, with a favourable net foreign currency effect of $11 million.

Anna Manning, president and chief executive officer, said: “We are very pleased with our third quarter results and we continue to be proud of the resilience of our business in this challenging environment. While we experienced a material level of COVID-19 claims, the impact was manageable, and many of our segments reported strong results. Excluding COVID-19 claim costs, our US individual mortality performance was very favorable in the quarter driven by positive large claims volatility.

“Estimated COVID-19 individual mortality claim costs in the US were $100 million, at the low end of our range, while COVID-19 claim costs elsewhere totaled $40 million. This was partially offset by an estimated $30 million of favorable longevity experience, which is believed to be COVID-19 related.

“Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $1.5 billion. While there remains uncertainty as to the ongoing and ultimate impact of COVID-19 on our business, we believe that our strong financial condition and global business platform position us to successfully manage through this period.”