RGA sees Q3 2018 income boost

Reinsurance Group of America (RGA) has reported third-quarter net income of $301.2 million, up on the $227.6 million it made in the prior-year quarter.

Adjusted operating income totalled $259.4 million, again up on the $226 million it reported in the third quarter of 2017.

RGA said that third quarter 2018 consolidated net premiums totalled $2.6 billion, up 3 percent from last year’s third quarter of $2.5 billion, with adverse net foreign currency effects of $33.4 million. Excluding spread-based businesses and the value of associated derivatives, investment income decreased slightly versus a year ago, as a 4 percent increase in average assets was more than offset by year-over-year decline in variable investment income.

The average investment yield, excluding spread businesses, was down 24 basis points from the third quarter of 2017 to 4.57 percent, as variable investment income was above-average in both periods, but especially strong in the year-ago period. The average investment yield was up 25 basis points from the second-quarter yield, primarily due to a higher level of variable investment income in the third quarter.

“This was a very strong quarter for us, with this quarter’s performance offsetting some softness in the first two quarters of the year,” said Anna Manning, president and chief executive officer. “I want to reiterate a few key points that this quarter’s results reinforce. First, our global operating platform, which is diversified by both geography and product, continues to serve us well. Second, the nature of our business is such that we expect short-term volatility by segment, but we expect this volatility to even out over longer periods of time. Finally, we continue to use a balanced approach to effectively manage our capital over time, and this quarter’s deployment and share repurchases demonstrate our discipline toward this end.

“Highlights for the quarter include a strong result for our US individual mortality business due to very favourable mortality experience and strong performances from EMEA and Asia. Strength in these areas more than offset the unfavourable experience in the US group business and in Australia.

“We deployed $190 million of our excess capital into in-force and other transactions, and we repurchased $109 million of shares, bringing year-to-date deployment and repurchases to $280 million and $259 million, respectively. We ended the quarter with an excess capital position of approximately $1.1 billion, down from the previous quarter.”

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