Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Investor Day (June 2018)
102 slides from Reinsurance Group Of America's investor day presentation, Jun 7, 2018
Slide 1: Investor Day 2018
RGA THE SECURITY OF EXPERIENCE. THE POWER OF INNOVATIONINVESTOR DAY 2018 REINSURANCE GRUP OF AMERICA, INCORPORATED JUNE 7, 2018
Slide 2: Investor Day 2018 - Jeff Hopson, Investor Relations
Investor Day 2018 Jeff Hopson Senior Vice President, Investor Relations May 18, 2017
Slide 3: Safe Harbor
Safe Harbor This presentation contains forward -looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements relating to projections of the strategies, earnings, revenues, income or loss, ratios, future financial performance and g
Slide 4: Use of Non-GAAP Financial Measures
Use of Non -GAAP Financial Measures RGA uses a non-GAAP financial measure called adjusted operating income as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs. Management believes that adj
Slide 5: Agenda
Agenda Opening Remarks Jeff Hopson, Senior Vice President, Investor Relations Introduction and Overview Anna Manning, President and Chief Executive Officer Geographic Overview Alain Néemeh, Senior Executive Vice President andChief Operating Officer 15-Minute Break Global Financial Solutions John Lau
Slide 6: Introduction and Overview
Introduction and Overview Anna Manning President and Chief Executive Officer May 18, 2017
Slide 7: Key Messages
Introduction and Overview Key Messages Well-positioned Trusted ? Partner • A leading brand, experienced management team • Differentiated global franchise ? Proven strategy • Deep technical expertise, consistent and Focused disciplined approach Execution • Innovative services and solutions ? Attracti
Slide 8: Evolution of Our Diversified Global Platform
Introduction and Overview Evolution of Our Diversified Global Platform Region 1 Product 1 Canada, 10% 1992 $0.4 Billion 2 U.S. & Mortality, 100% LA, 90% GFS, 6% Asia Pacific, 11% Morbidity, 9% EMEA, 12% 2004 Canada, 8% 2 $3.9 Billion U.S. & LA, 69% Mortality, 85% Asia Pacific, 19% GFS, 10% Morbidity
Slide 9: Well-Positioned
Well -Positioned Global life and health reinsurance revenues Revenues Rank Reinsurer ($ in millions) 2017 1 Swiss Reinsurance Company 13,963 2 Munich Re1 13,425 3 Reinsurance Group of America 2 12,332 4 SCOR Global Life Re 9,368 5 Hannover Re 7,952 6 China Life Re 4,993 7 General Re3 3,932 8 Pacific
Slide 10: Best-in-Class Capabilities
Introduction and Overview Best -in-Class Capabilities NMG Consulting Studies, Business Capability Index (BCI) – 2017 Global “RGA continued the ‘lock out’ in 2017, extending its unbroken run of capturing the leading BCI ratings across a global scope.” Mark Prichard CEO, Partner, NMG Consulting penetr
Slide 11: Experienced Team and Deep Bench Strength
Introduction and Overview Experienced Team and Deep Bench Strength Years of Name Position Experience 23 Management team average Industry 1 RGA2 yrs industry experience Anna Manning President and CEO 37 11 Todd Larson Senior EVP, Chief Financial Officer 24 23 Management team average Alain Néemeh Seni
Slide 12: Proven Strategy, Exceptional Strengths
Introduction and Overview Proven Strategy, Exceptional Strengths Client Focus Innovation ? Strong multi-level client ? Creative mindset relationships? Entrepreneurial orientation? Comprehensive solutions ? Nimble, agile, and flexible provider? Partnership approach, emphasis on long-term value creati
Slide 13: Success in Continually Growing Book Value Per Share
Introduction and Overview Success in Continually Growing Book Value Per Share Book value per share (ex-AOCI)1 total return growth 2 15-Year 12.3% CAGR 10-Year 12.1% CAGR 5-Year 14.0% CAGR $116.46 $92.59 $83.23 $78.03 $69.66 $64.95 $57.25 $52.80 $41.01 $45.86 $40.36 $34.06 $36.59 $31.08 $27.73 $22.63
Slide 14: RGA Shares Have Performed Well Historically
Introduction and Overview RGA Shares Have Performed Well Historically RGA IPO (1993) to Date 10 Years 1400% 250% 1200% 200% 1000% 150% 800% 600% 100% 400% 50% 200% 0% 0% RGA SNL SNL Global SNL S&P 500 RGA SNL SNL Global SNL S&P 500 U.S. L/H Reins U.S. P/C U.S. L/H Reins U.S. P/C 5 Years 1 Year 140%
Slide 15: Global Trends Create Broad Opportunities
Introduction and Overview Global Trends Create Broad Opportunities Macro Environment Client & Consumer ? Balance sheet restructuring? Customer engagement? Regulatory change? Shifting demographics? Low interest rates? Digital distribution Product / Risk Capabilities & Services ? Living benefits? Data
Slide 16: Expanding Capabilities
Introduction and Overview Expanding Capabilities ? Developing solutions across industry value chain to respond to opportunities? Partnering with clients to create shared value? Delivering additional sources of revenue? Positioned to lead the industry through future innovation 16
Slide 17: Vision for the Future
Introduction and Overview Vision for the Future We see an abundance of opportunities and RGA has what it takes to succeed ? High-performing global platform, with nice balance The security of experience of risks ? Full range of capabilities and solutions ? Strong teams, consistent approach, patience
Slide 18: Key Messages
Introduction and Overview Key Messages Well-positioned Trusted ? Partner • A leading brand, experienced management team • Differentiated global franchise ? Proven strategy • Deep technical expertise, consistent and Focused disciplined approach Execution • Innovative services and solutions ? Attracti
Slide 19: Geographic Overview
Geographic Overview Alain Néemeh Senior Executive Vice President and Chief Operating Officer May 18, 2017
Slide 20: Key Messages
Key Messages ? Well-positioned • Leading global brand • Strong local franchises • Well-diversified business Geographic Overview Trusted Partner ? Proven strategy Focused • Leader in business capability rankings Execution Facultative underwriting leader Leading market share ? Attractive financial pro
Slide 21: Experienced Team and Deep Bench Strength
Geographic Overview Experienced Team and Deep Bench Strength Management team average Name industry experience Alain Néemeh Paula Boswell -Beier Tony Cheng Management team average Olav Cuiper 17yrs Michael Emerson years with RGA Alka Gautam Douglas Knowling Paul Nitsou Suzanne Scanlon Mark Stewart Da
Slide 22: Established Global Brand
Geographic Overview Established Global Brand Exceptional capabilities leading to solid market share Reputation United Asia Global States Canada EMEA Pacific Relationships 2017 Business Capability Ranking #1 #1 #1 #1 #1 (BCI) 1 2017 New Business Individual #2 #3 / #4 #2 / #1 #2 #2 Premiums 2 / Sum As
Slide 23: Diversified Global Platform
Geographic Overview Diversified Global Platform Steady and consistent growth $ in millions $12,000 Premiums $10,000 $8,000 $6,000 $4,000 $2,000 $0 1993 … 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U.S. & Latin America Canada Asia Pacific EMEA Office Openings Sout
Slide 24: Diversified Product Offering
Geographic Overview Diversified Product Offering Expanded capabilities respond to client needs Percent of Adjusted Operating Revenues 1 1992 GFS, 6% 2004 2017 GFS, 10% Morbidity, 9% Morbidity, 22% Mortality, 100% Mortality, 85% Mortality, 68% Total: $0.4 Billion Total: $3.9 Billion Total: $12.3 Bill
Slide 25: Underwriting Innovation Track Record
Geographic Overview Underwriting Innovation Track Record Key Messages ? Global leader in innovation and underwriting 1: ? #1 for innovation and product innovation? #1 for underwriting capabilities? #1 for facultative underwriting ? Over 670,000 cases assessed globally through our facultative and str
Slide 26: Growth Opportunities: Closing the insurance gap
Growth Opportunities Closing the insurance gap Seizing the Opportunity ? Globally ~ 4 billion people are uninsured 1? ~ 60 million underinsured U.S. households, of which 15 million earning ? $100,000 per year2? Underinsured U.S. market is estimated at $12 trillion and growing $300 billion per year2?
Slide 27: Sample of RGA Capabilities in Underwriting
Geographic Overview Sample of RGA Capabilities in Underwriting AURA ® ? Automated decision ? Reflexive sets? Evidence evaluation? Business reporting
Slide 28: Steady Growth in Mortality
Geographic Overview Steady Growth in Mortality Core business growing steadily Key Messages Net Premiums Individual and Group Mortality ? Growth in mature markets driven by strong recurring production coupled with in-force opportunities ? Wealth creation in emerging markets driving demand for life in
Slide 29: Mortality Improvement Over the Past Years
Geographic Overview Mortality Improvement Over the Past 50 Years Key Messages ? Population mortality continues to improve despite short-term volatility ? Over a shorter timeframe, population mortality trends cannot be easily generalized ? Medical and health advances should continue to drive mortalit
Slide 30: Attractive Opportunities in Morbidity
Geographic Overview Attractive Opportunities in Morbidity Well-positioned to benefit from favorable macro trends Key Messages Net Premiums Individual and Group Morbidity ? Aging population and growing middle class heighten the need for morbidity products ? Greater pressure on government finances and
Slide 31: U.S. & Latin America Adjusted Operating Revenue
Adjusted Operating Revenue 3 Geographic Overview $ in millions U.S. & Latin America $9,000 4.2% CAGR 3 –6% CAGR $7,500 Key Messages $6,000 $4,500 ? #1 in Business Capability Index (BCI) in 2017: $3,000 • U.S. Individual Mortality 1 $1,500 Projection • U.S. Group Life and Disability 2 $0 • Mexico 1 2
Slide 32: U.S. & Latin America: U.S. Individual Health
Geographic Overview U.S. & Latin America U.S. individual health ? LTC business is written primarily in 2010 and after, and on products with more limited benefits? Portfolio contains no legacy in-force blocks ? Experience is consistent with our original assumptions ? Comfortable with our reserves? Se
Slide 33: Traditional Mortality Is Improving Yet Remains Seasonal
Geographic Overview U.S. & Latin America Traditional Mortality is improving yet remains seasonal Seasonal Mortality Trend in the U.S. Population 1 125% Key Messages Relative Mortality 100% ? Clear seasonal pattern leading to Monthly more deaths, December to March 75% ? Clear positive trend over last
Slide 34: U.S. & Latin America Traditional Long-term Stability
Geographic Overview U.S. & Latin America Traditional Long-term stability despite quarterly volatility U.S. & Latin America Traditional Pre-tax Adjusted Key Messages Operating Income1 $ in millions ? Generally consistent annual $400 results despite interest rate headwinds $350 $300 ? Q1 generally a w
Slide 35: Value Embedded in Traditional In-Force
Geographic Overview U. S. & Latin America Traditional Value embedded in U.S. & Latin America traditional in-force Actuarial Liabilities –U.S. GAAP vs. Best Estimate $ in billions $10 $7 $4 Projected Future Value U.S. GAAP Liabilities Best Estimate Liabilities $1 -$2 2017 2027 2037 2047 2057 2067 207
Slide 36: Reinsurance Penetration Has Increased Since 2015
Geographic Overview U.S. & Latin America Traditional Reinsurance penetration has increased since 2015 Overview of U.S. Individual Life Mortality Market $ in billions $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 28% 27% 28% 27% 25% 28% 30% $200 $0 2011 2012 2013 2014 2015 2016 2017 Amount Reinsu
Slide 37: Canada
Canada Key Messages ? A leading franchise • Individual new business recurring production leader since 20071 • #1 in BCI since 20082 ? Sustainable long-term profit stream ? Potential growth opportunities • Delivering client solutions for a changing regulatory environment • Growing longevity market •
Slide 38: Europe, the Middle East and Africa
Geographic Overview Europe, the Middle East and Africa Key Messages ? A leading franchise with #1 BCI rating1 in: • EMEA region in aggregate for the 5th consecutive year • South Africa for the 8th consecutive year • Middle East and CEE2 markets ? Stable outlook for traditional business? Selective gr
Slide 39: Australia
Australia Key Messages Positive 2017 results Improved claims experience and client recaptures Meaningful reduction in future individual disability new business and in-force premiums Repricing continues where necessary Lumpy claims, disabled life reserves, and IBNR lead to quarterly volatility Select
Slide 40: Asia
Geographic Overview Asia 1 Adjusted Operating Revenue 4 $ in millions 19.1% CAGR $2,500 Key Messages 10 –15% CAGR Constant currency 21.5% CAGR $2,000 ? A leading franchise • #1 in BCI and market share for past six $1,500 years 2 $1,000 • #1 in new business individual premium $500 • 2017 Life Reinsur
Slide 41: Asia: Favorable Demographics and Global Middle Class
Geographic Overview Asia Favorable demographics and macro trends –global middle class In millions Key Messages 4,000 ? By 2020, middle class will become the majority of the global population for the first time ever ? Global middle class to grow yearly by ~ 160 million people through 2030 ? Asia will
Slide 42: Asia: Well-Diversified Product Mix and Client Base
Geographic Overview Asia Well-diversified product mix and client base Key Messages 2017 Operating Revenue – Distribution by Product ? Individual life represents 42% of Group1 2017 revenues Global Financial Solutions 6% 3% ? Top 20 clients account for 65% of 2017 premiums Health 2 12% ? Multinational
Slide 43: Asia - Product Development Track Record
Geographic Overview Asia – Product Development Track Record Approximately half of new business driven by exclusive arrangements ?“As-charged” medical ?Predictive underwriting reimbursement product in Indonesia Comprehensive initiative in Asia?Wellness program linked to disease early CI product ?Clou
Slide 44: RGA Presence in Key Asian Markets
Asia RGA presence in key Asian markets Hong Kong ? Office opened in 1995 ? #1 BCI for five consecutive years ? #1 market share ? Top-rated for product innovation and CI expertise Southeast Asia ? First office opened in 1997? #1 BCI for six consecutive years? #1 BCI in Malaysia, Singapore, Thailand,?
Slide 45: Vision for the Future
Geographic Overview Vision for the Future ? Insurance and reinsurance remain important and The security desirable products of experience? Trend of digital transformation and accelerated underwriting will continue ? Favorable demographics and macro trends will continue in emerging markets The power o
Slide 46: Key Messages
Key Messages ? Well-positioned • Leading global brand • Strong local franchises • Well-diversified business Geographic Overview Trusted Partner ? Proven strategy Focused • Leader in business capability rankings Execution • Facultative underwriting leader • Leading market share ? Attractive financial
Slide 47: Break
RGA the security of experience. the power of innovation. break
Slide 48: Global Financial Solutions (GFS)
Global Financial Solutions (GFS) John Laughlin Executive Vice President, Global Financial Solutions
Slide 49: Global Financial Solutions Key Messages
Global Financial Solutions Key Messages ? Well-positioned • Strong brand, reputation, and market prominence • Changing landscape creates opportunities • Unique strengths create competitive advantages Trusted Partner ? Proven strategy Focused • A recognized leader in large and complex Execution trans
Slide 50: Established Product Lines, Long Track Record of Earnings Growth
Established Product Lines, Long Track Record Global Financial Solutions of Earnings Growth Capital -Motivated Since 1983 1 Stable, Diversified Growth Asset -Intensive Since 1997 Longevity Since 2008 Global Acquisitions Since 2011 Langhorne Re 2018 Capital -Motivated Asset-Intensive Longevity Strong
Slide 51: Long Track Record of Innovation
Global Financial Solutions Long Track Record of Innovation Major U.S. stock First First First fixed First First First LICAT First fixed $5B asset- acquisition mass lapse capital-index longevity longevity transaction annuity intensive of life and shock motivated annuity transaction shock in Canada1 t
Slide 52: Environmental Changes Continue to Create Opportunities
Global Financial Solutions Environmental Changes Continue to Create Opportunities LICAT Solvency PBR II Interest Rates1 Tax C-ROSS Reform IFRS17 1 SAM 1 Global effects. 52
Slide 53: Core Strengths Driving Success
Core Strengths Driving Success Client Focus ? Market leadership documented in industry surveys? Long-standing, deep partnerships across client organizations? Historical understanding of clients’ products and objectives Reputation ? Long track record of credibility with clients and regulators? A reco
Slide 54: Experienced Team and Deep Bench Strength
Global Financial Solutions Experienced Team and Deep Bench Strength Years of Name Position Experience GFS management team 1 2 Industry RGA average John Laughlin EVP, Global Financial Solutions 37 23 industry experience David Boettcher EVP, Chief Operating Officer 35 20 Lawrence Carson SVP, Chief Act
Slide 55: GFS Results by Region
Global Financial Solutions GFS Results by Region Key Messages ? Strong adjusted operating income; important contributor to RGA’s results? Proven track record of consistent and dependable earnings? Attractive returns ? Transaction flow can vary by region from year to year? A single run-off treaty in
Slide 56: GFS Results by Product Line
Global Financial Solutions GFS Results by Product Line Diversified earnings, risk, and product mix Key Messages ? Insurance and structuring expertise is valued by clients? Highly valued reputation for execution? Asset-Intensive block continues to grow; results aided by better-than-expected variable
Slide 57: Asset-Intensive Reinsurance - Executing Strategies
Global Financial Solutions Asset-Intensive Reinsurance – Executing Strategies Strategies ? Build a balanced portfolio of income and risks through: • Reinsuring in-force blocks repriced for current market conditions • Selectively participating in profitable flow deals ? Target well-designed products
Slide 58: Asset-Intensive Reinsurance
Global Financial Solutions Asset -Intensive Reinsurance Consistent, stable earnings; low sensitivity to market and policyholder behavior risks Pre-tax Adjusted Operating Income1 Key Messages $ in millions 10% CAGR ? Reinsuring annuities or interest—$250 sensitive life products that fit RGA’s risk pr
Slide 59: Asset-Intensive Reinsurance - Optionality Profile
Global Financial Solutions Asset -Intensive Reinsurance – Optionality Profile Significant portion of asset-intensive business has lower policyholder behavior risk Reserves Profile OPTIONALITY PROFILE March 31, 2018 No policyholder $24.1 Billion Locked -in longevity in payout behavior risk Verylow po
Slide 60: Asset-Intensive Reinsurance Illustrative Sensitivities
Global Financial Solutions Asset -Intensive Reinsurance Illustrative sensitivities for 2017 pre-tax adjusted operating income 1 Low Sensitivity to Interest Rate Movements Low Sensitivity to Equity Movements $ in millions $ in millions $251 $262 $251 $262 $241 $239 [Graphic Appears Here] [Graphic App
Slide 61: Longevity - Executing Strategies
Longevity – Executing Strategies Strategies ? Leverage mortality expertise to establish position as longevity expert? Deliver non-correlated risk and diversified profit stream? Focus on markets where sound underlying experience data exists? Diversify by structures and by geographies? Provide support
Slide 62: Longevity Reinsurance
Global Financial Solutions Longevity Reinsurance Key Messages ? Continued strong income growth from new business ? Favorable experience in 2017 ? Selective participation in target markets ? Strong demand expected to continue Pre-tax Adjusted Operating Income 1 $ in millions $120 33% CAGR $100 $80 $6
Slide 63: Capital-Motivated Reinsurance - Executing Strategies
Global Financial Solutions Capital -Motivated Reinsurance – Executing Strategies Strategies Advantages Execution ? Leverage expertise to address changing regulations? Combine financial structuring expertise with strong local client relationships? Expand strategic accounts in developed markets? Lead
Slide 64: Capital-Motivated Reinsurance
Global Financial Solutions Capital -Motivated Reinsurance Key Messages ? Stable, fee-based contributor to income ? Established presence in North America, EMEA, and Asia ? Diverse distribution of mortality, morbidity, credit, and other risks ? Recognized leader in this highly specialized market ? Inc
Slide 65: Well-Positioned in the Acquisitions Market
Global Financial Solutions Well-Positioned in the Acquisitions Market ? Expertise to analyze and accept all biometric and market risks ? RGA brings strengths and advantages to each opportunity • Strong client relationships, broad solution set, strong capital position, strong structuring skills, mark
Slide 66: Significant Capital Deployed
Global Financial Solutions Significant Capital Deployed Key Messages ? Deployed over $1.7 billion of capital since 2011 • Includes life, annuity, and longevity run-off blocks in the U.S., U.K., Canada, Europe, and Asia Pacific ? Asset portfolios have been repositioned to better align with our invest
Slide 67: Langhorne Re Expands the Solution Set
Global Financial Solutions Langhorne Re Expands the Solution Set ? Created a Bermuda -based, third-party reinsurance vehicle along with co-sponsor Renaissance Re ? Natural extension of RGA skills and capabilities ? Langhorne Re provides a platform to invest in larger blocks of attractive business ?
Slide 68: Vision for the Future
Global Financial Solutions Vision for the Future RGA has what it takes to succeed ? Regulatory and capital changes will continue to drive need for solutions ? Opportunities to deploy capital into attractive blocks will continue ? Seasoned expertise, creativity, innovation, and strong client relation
Slide 69: Key Messages
Global Financial Solutions Key Messages ? Well-positioned • Strong brand, reputation, and market prominence • Changing landscape creates opportunities • Unique strengths create competitive advantages Trusted Partner ? Proven strategy Focused • A recognized leader in large and complex Execution trans
Slide 70: Financial Overview
Financial Overview Todd Larson Senior Executive Vice President and Chief Financial Officer
Slide 71: Key Messages
Financial Overview Key Messages Strong ? Proven strategy Track • Record Strong financial track record • Continued organic growth and in-force transactions • Effective capital management ? Well-positioned Unique • Conventional investment profile Profile • Stable liability structure • Well-established
Slide 72: Experienced Team and Deep Bench Strength
Financial Overview Experienced Team and Deep Bench Strength Years of Name Position Experience Management team average Industry 1 RGA2 industry experience Todd Larson Senior EVP, Chief Financial Officer 24 23 William Hutton EVP, General Counsel and Secretary 20 20 John Hayden SVP, Controller 29 22 Br
Slide 73: Solid Growth of Adjusted Operating Revenues
Financial Overview Solid Growth of Adjusted Operating Revenues 1 $ in millions Key Messages 4.8% CAGR Constant currency 6.7% CAGR ? Demonstrated growth over time, despite foreign currency headwinds? Global platform provides a diversified source of revenues? GFS produces a combination of premiums, fe
Slide 74: Attractive Growth Rate of Adjusted Operating EPS
Financial Overview Attractive Growth Rate of Adjusted Operating EPS 1 Key Messages 9.7% CAGR $10.84 ? Strong track record $9.73 $9.12 $8.43 ? Above the 5%-8% $7.48 intermediate -term guidance ? Impact to EPS CAGR: • Foreign currencies: -2.3% • Interest rates: -2.5% to -3.5% • Capital management: +2.
Slide 75: Solid Adjusted Operating ROE Despite Macro Headwinds
Solid Adjusted Operating ROE 1 Despite Macro Financial Overview Environment Headwinds 5-year Key Messages average 10.5% ? Favorable results in the face of lower interest rates and weak foreign currencies ? 5-year average is 11.2% 12.5% 11.2% without Australia charge 10.6% 11.0% 7.4% 2013 2 2014 2015
Slide 76: Demonstrated Success in Continually Growing Book Value Per Share
Demonstrated Success in Continually Growing Financial Overview Book Value Per Share Book value per share (ex-AOCI)1 total return growth 2 15-Year 12.3% CAGR 10-Year 12.1% CAGR 5-Year 14.0% CAGR Proven Strategy $116.46 $92.59 $83.23 $78.03 $64.95 $69.66 $57.25 $52.80 Consistent $40.36 $41.01 $45.86 $
Slide 77: Book Value Growth Among U.S. Life & Health Peers
Financial Overview Book Value Growth 1 Among U. S. Life & Health Peers Book value per share (ex-AOCI) total return growth 1 15 Years 10 Years 40% 40% 30% 30% 20% 20% 10% 10% RGA RGA 0% 0% -10% -10% -20% -20% 40% 5 Years 40% 1 Year 30% 30% 20% 20% 10% 10% RGA RGA 0% 0% -10% -10% -20% -20% 1 Please re
Slide 78: Tax Reform
Tax Reform ? Key Messages ? Tax reform is a net positive for RGA ? Added approximately $900 million to capital, and $600 million to excess capital ? Lower consolidated effective tax rate • Expect to be within the 21%-24% range ? More level playing field with competitors ? Ongoing evaluation of the B
Slide 79: Balanced Capital Management Approach
Financial Overview Balanced Capital Management Approach ? Maintain an efficient mix of capital? Balance expectations of shareholders, bondholders, clients, regulators, and rating agencies? Preference to deploy into business/block acquisitions? Proven ability to efficiently raise capital? Track recor
Slide 80: Efficient Capital Management
Financial Overview Efficient Capital Management Capital structure includes equity (ex-AOCI) 1, debt, hybrid securities $ in millions 1 $12,000 Shareholders’ Equity (ex-AOCI) Debt 45.0% Hybrid Capital Debt+Hybrid to Total Capital $10,369 $10,295 $10,000 $1,119 $1,119 40.0% $9,043 $7,681 $7,725 $1,119
Slide 81: Effective Capital Management
Financial Overview Effective Capital Management Balanced capital management approach Balanced approach toward 4-year excess capital roll-forward capital deployment $ in millions $ in millions $1,200 $1,000 2018 $147M $600 Share Repurchases $800 $90M $500 Block ($2,350) Acquisitions $470 $600 ($720)
Slide 82: Five-Year Dividend Per Share
Financial Overview Five -Year Dividend Per Share CAGR = 17% Consistent double -digit dividend increases Dividend Payout Ratio 1 Total Payout Ratio 2 30% 90% 80% 25% 70% 20% 60% 50% 15% 40% 10% 30% 20% 5% 10% 0% 3 0% 3 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Industry Average 4 RGA Industry
Slide 83: RGA Has an Attractive Operating Model
Financial Overview RGA Has an Attractive Operating Model ? Balance and diversity of profits by geography and product? High-quality earnings, less sensitivity to financial market volatility? Considerable projected value embedded in the in-force business? Stable liability profile? Conventional investm
Slide 84: Global Platform Delivers Balance and Diversity
Financial Overview Global Platform Delivers Balance and Diversity Pre-tax Adjusted Operating Income 1 (excl. Corporate) 2014 2015 2016 2017 11% 14% 11% 13% 26% 15% 37% 15% 36% 33% 16% 16% 10% 13% 11% 16% 28% 27% 25% 27% Total: $941.9 Million Total: $848.1 Million Total: $948.8 Million Total: $1,038.
Slide 85: Stable Liability Profile
Stable Liability Profile Relatively low liquidity risk due to liability profile Consolidated Reserves Profile March 31, 2018 No policyholder $39.3 Billion behavior risk Verylow policyholder 11% 17% behavior risk Lower policyholder behavior risk 32% 40% Higher policyholder behavior risk Financial Ove
Slide 86: Investment Objectives and Strategy
Financial Overview Investment Objectives and Strategy ? Maintain conventional life insurance investment portfolio? Manage balance sheet strength and investment income ? Dedicated Investment Solutions team to support Global Financial Solutions transactions? Most assets are managed using internal port
Slide 87: Investment Portfolio Is Conventional: Asset Allocation
Financial Overview Investment Portfolio Is Conventional Asset allocation March 31, 2018 Market Value $ 49.4B Book Value $46.7B Cash & Short Term 0.8% Investment Grade 92.8% Corporate Bonds and Bank Loans 46.7% Government Bonds 17.7% Structured Bonds 14.1% Commercial Mortgage Loans 9.8% Emerging Mark
Slide 88: Investment Portfolio Is Conventional: Rating Distribution
Financial Overview Investment Portfolio Is Conventional Rating distribution March 31, 2018 Rating Market Value % AAA-AA $ 16.7B 33.9% A 15.4 31.1% BBB 14.0 28.3% < BBB 2.6 5.2% Not Rated 0.7 1.5% Total1 $ 49.4B 100.0% ? No significant changes since 2012? Average credit rating is single-A? We see les
Slide 89: Enterprise Risk Management Framework
Financial Overview Enterprise Risk Management Framework ? Well-established, robust ERM framework • Identify, assess, measure, and monitor risks quarterly • Quarterly risk reporting at all levels of management, including to the Board • Aligns and integrates risk appetites and limits with business str
Slide 90: Well-Established Enterprise Risk Management Framework
Financial Overview Well-Established Enterprise Risk Management Framework ? Risk profile has become more diversified over time? Insurance liability profiles are diversified and well-understood? Demonstrated ability to manage regulatory changes ? Quarterly earnings volatility by product line is not un
Slide 91: Attractive Growth Rate of Adjusted Operating EPS
Financial Overview Attractive Growth Rate of Adjusted Operating EPS 1 Key Messages 5 –8% CAGR ? Intermediate -term guidance is 9.7% CAGR 5%-8% $10.84 $9.12 $9.73 ? Headwinds are ongoing but $8.43 $7.48 manageable? Expect: Projection • Solid organic growth • Transactional opportunities 2013 2014 2015
Slide 92: Solid Adjusted Operating ROE Despite Macro Headwinds
Solid Adjusted Operating ROE 1 Despite Macro Financial Overview Environment Headwinds 5-year Key Messages average 10.5% ? Intermediate target of 10%-12% 12.0%? Potential positive influences: 10.0% • Higher interest rates • Weaker U.S. dollar 12.5% 11.2% 11.0% 10.6% • Growth of international 7.4% bus
Slide 93: Vision for the Future
Financial Overview Vision for the Future ? Financial outlook is favorable ? Strong strategic position leads to solid organic growth The security ? Continue to pursue in-force and other transactions of experience? Effective capital management adds to shareholder returns ? RGA’s operating model is att
Slide 94: Key Messages
Financial Overview Key Messages Strong ? Proven strategy Track • Record Strong financial track record • Continued organic growth and in-force transactions • Effective capital management ? Well-positioned Unique • Conventional investment profile Profile • Stable liability structure • Well-established
Slide 95: Appendix: Reconciliations of Non-GAAP Measures
Appendix Reconciliations of Non-GAAP Measures
Slide 96: Reconciliations of Non-GAAP Measures
Reconciliations of Non -GAAP Measures $ in millions U.S. & LATIN AMERICA TRADITIONAL OPERATIONS Full Year Full Year Full Year Full Year Full Year QTD QTD QTD QTD QTD QTD QTD QTD 2013 2014 2015 2016 2017 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 GAAP Pre-Tax Income $ 377.6 $ 351.6 $ 235.8 $ 371.1 $ 373
Slide 97: Reconciliations of Non-GAAP Measures
Reconciliations of Non -GAAP Measures $ in millions EUROPE, MIDDLE EAST & AFRICA TRADITIONAL OPERATIONS Full Year Full Year Full Year Full Year Full Year QTD QTD QTD QTD QTD QTD QTD QTD 2013 2014 2015 2016 2017 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 GAAP Pre-Tax Income $ 31.4 $ 60.3 $ 48.4 $ 30.1 $
Slide 98: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ in millions GFS ? Asset?Intensive 2012 2013 2014 2015 2016 2017 GAAP Pre?Tax Income ? Cont Ops 231.9 192.5 274.9 189.1 274.8 358.6 Realized Capital (Gains) / Losses(1) (79.0) 142.3 53.7 (45.2) (72.7) 65.8 Change in MV of Embedded Derivatives (1) (45.7) (165.2)
Slide 99: Reconciliations of Non-GAAP Measures
Reconciliations of Non -GAAP Measures $ in millions RGA CONSOLIDATED Full Year Full Year Full Year Full Year Full Year QTD QTD QTD QTD QTD QTD QTD QTD 2013 2014 2015 2016 2017 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 GAAP Pre-Tax Income $ 635.3 $ 1,008.5 $ 744.8 $ 1,043.9 $ 1,142.8 $ 107.6 $ 353.2 $
Slide 100: Reconciliations of Non-GAAP Measures
Reconciliations of Non -GAAP Measures $ in millions US & LATIN AMERICA OPERATIONS SEGMENT 2013 2014 2015 2016 2017 GAAP Revenue $ 6,078.8 $ 6,297.4 $ 6,108.9 $ 6,805.4 $ 7,250.5 Realized Capital (Gains) / Losses 154.1 (95.3) (25.9) 27.8 19.2 Change in MV of Embedded Derivatives (212.2) (69.1) 132.0
Slide 101: Reconciliations of Non-GAAP Measures
Reconciliations of Non -GAAP Measures $ in millions RGA Consolidated 2013 2014 2015 2016 2017 GAAP Revenue $ 10,318.3 $ 10,904.2 $ 10,418.2 $ 11,521.5 $ 12,515.8 Realized Capital (Gains) / Losses 148.7 (108.5) 33.2 (50.3) (46.4) Change in MV of Embedded Derivatives (212.2) (69.1) 132.0 (62.0) (126.0
Slide 102: RGA
RGA
Reinsurance Group of America — Investor Day (June 2018) on 6ix