Reinsurance Group of America reports dip in Q3 net income

Reinsurance Group of America, a global provider of life reinsurance, has reported third quarter net income of $262.8 million down from $301.2 million reported for the prior-year quarter.

Adjusted operating income was also lower at $256.3 million in Q3 2019 compared with $259.4 million the year before.

In the third quarter, consolidated net premiums totalled $2.8 billion, up 10 percent from last year’s third quarter of $2.6 billion, with adverse net foreign currency effects of $34.9 million. Excluding spread-based businesses and the value of associated derivatives, investment income increased 13 percent versus a year ago, reflecting asset growth of 7 percent and higher variable investment income. The average investment yield, excluding spread business, was up 26 basis points from the third quarter of 2018 to 4.83 percent primarily due to higher variable investment income.

The effective tax rate this quarter was 24.3 percent on pre-tax income. The effective tax rate was 23.5 percent on pre-tax adjusted operating income for the quarter, at the higher end of the expected range of 21 percent to 24 percent.

Anna Manning, president and chief executive officer, commented: “This was a very good quarter for us in many respects, as bottom-line results, premium growth and capital deployment were all strong. We continue to benefit from earnings diversity that comes from our global operating platform. Outstanding performances by several of our key businesses helped us to deliver strong bottom-line results in spite of earnings variability by segment and ongoing macroeconomic headwinds including lower interest rates and a strong US dollar.

“Highlights for the quarter included strong results in EMEA, Canada and US asset Intensive, and the US Group business performed above expectations. Investment results were very good, as alternative investments produced strong returns. These areas of strength more than offset a loss in Australia and unfavourable US individual mortality experience.

“We had another successful quarter with $150 million of capital deployed into in-force and other transactions, bringing the year-to-date total to $385 million. We also repurchased $30 million of common shares during the quarter for a year-to-date total of $80 million. We ended the quarter with an excess capital position of approximately $1.0 billion.

“Looking forward, we remain optimistic about the future and our business prospects, as RGA is well positioned in its markets, and we have a proven strategy. Ours is a long-term business and can be best judged by results over longer periods of time. We point to a long track record of successful execution and strong financial results, and we expect to continue to deliver attractive financial returns into the future.”

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