RGA Q1 results ‘below expectations’ due to claims volatility

Reinsurance Group of America (RGA) reported a drop in net income to $100.2 million in the first quarter of 2018 compared to $145.5 million in the same period a year earlier.

“Our operating results were below our expectations this quarter, but this reflects normal volatility of claims that is inherent in our business,” CEO Anna Manning commented the performance. “As we have pointed out in the past, the nature of our business is such that we can experience some volatility of claims, in both directions, in the short term. However, any volatility tends to even out over longer periods, and our diversified global platform has helped mitigate overall relative volatility in recent periods. We tend to see the highest claims in our first quarters when winter weather and influenza seasons can cause higher claims experience.

“In this quarter, the biggest source of variability was in our US individual mortality business where we had elevated claims, influenced by a severe influenza season and a difficult winter. We also experienced some volatility in the Asia Pacific Traditional segment, attributable to modest swings in underwriting results in a few different countries.  Our operations in EMEA and Canada performed well overall. Again, we view the claims experience in the quarter to be a normal part of our business and not indicative of any systemic issues.”

RGA is one of the largest global life and health reinsurance companies with approximately $3.3 trillion of life reinsurance in force and assets of $60.5 billion as of Dec. 31, 2017.

Net premiums grew to $2.58 billion in the first quarter of 2018 from $2.37 billion in the same period of 2017.

“Reported premium growth was 9 percent, favourably influenced by foreign currency, representing a solid quarter and continued good momentum,” Manning noted.

“We had a fairly active quarter as we deployed approximately $90 million of capital into in-force and other transactions, and we remain well positioned and optimistic about the environment and our pipeline. We ended the quarter with an excess capital position of approximately $1.3 billion, down from the previous quarter. We continue to pursue a balanced approach to capital management through deployment of capital into in-force and other attractive transactions, share repurchases and shareholder dividends,” Manning added.

Make sure you are GDPR compliant and  confirm your email address to keep getting our daily emails

More of today's news

Everest Re sees growing reinsurance demand from large cedants

Guy Carpenter CEO bullish on growth

Allianz partners with ParaZero for drone safety solutions

AXA teams up with Cobalt Underwriting for Sharia-compliant policy

Don't miss our insurtech email newsletter - sign up today