Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Investor Presentation (February 2018)
46 slides from Reinsurance Group Of America's investor presentation, Feb 28, 2018
Slide 1: Investor Presentation
Investor Presentation Todd Larson Sr. EVP & Chief Financial Officer Jeff Hopson Sr. VP, Investor Relations May 18, 2017 February 28, 2018 Exhibit 99.1
Slide 2: 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 gr
Slide 3: 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 adju
Slide 4: Key Messages
Key Messages Strong brand, reputation, and market prominence Only global pure-play life and health reinsurer Valuable global platform Experienced management team Deep knowledge and expertise Best-in-class capabilities, services, and solutions Consistent and disciplined approach Diversified and balan
Slide 5: Timely Topics
Timely Topics 2017 was an excellent year Adjusted operating EPS of $10.84 vs $9.73, up 11.4% Adjusted operating ROE was 11.0%, solidly within our 10% - 12% expected range Organic premium growth was approximately 7.5% on a constant currency basis Outlook remains positive Asia and EMEA will help drive
Slide 6: Industry Outlook
Industry Outlook Global life insurance industry is facing several challenges Shifting demographics Changing consumer needs Regulatory and macroeconomic uncertainty Relatively low interest rates Increasing global volatility Life reinsurance industry dynamics are generally stable Concentrated sector C
Slide 7: Evolution of Our Geographic Platform
Evolution of Our Geographic Platform Percent1 of Adjusted Operating Revenues2 Office Locations 1992 2017 2004 Year Total: $12.3 Billion Total: $3.9 Billion Total: $0.4 Billion 1 Percentages exclude Corporate. 2 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
Slide 8: Evolution of Our Products
2017 2004 1992 Evolution of Our Products Year Product Year Product 1995 Entered capital-motivated reinsurance business 2008 First longevity transaction in the U.K. 1997 First asset-intensive business in the U.S. 2009 Acquired U.S. group reinsurance business from ING 1998 First capital-motivated rein
Slide 9: RGA Is Well-Positioned
RGA Is Well-Positioned 1 Does not include Munich Health. 2 Adjusted operating revenues. Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. 3 Does not include BHRG. Please note: exchange rate conversions are based on currency rates provided by each company in their Annual Reports
Slide 10: RGA Is Well-Positioned
RGA Is Well-Positioned Strong brand, reputation, and market prominence Top positions in new business market shares Well-established and valuable global platform Full range of capabilities and solutions Consistent and disciplined approach with focus on long-term value creation Balanced business portf
Slide 11: RGA Has Best-In-Class Capabilities
Business Capability Index – All respondents1 Market Penetration Indicates competitor position RGA Has Best-In-Class Capabilities NMG Consulting Studies, Business Capability Index (BCI) – 2016 RGA ranked #1 globally for five consecutive years Global 1 NMG Consulting’s Business Capability Index (Globa
Slide 12: Experienced Management Team, An Exceptional Strength
Experienced Management Team, An Exceptional Strength 1 Includes experience in life insurance and life reinsurance industries. 2 Includes experience with RGA’s predecessor, the reinsurance division of General American Life Insurance Company. Name Position Years of Experience In Industry1 With RGA2 An
Slide 13: RGA's Proven Strategy with Exceptional Strengths
RGA’s Proven Strategy with Exceptional Strengths RGA’s DNA Client-centric Deep and broad technical expertise Collaborative culture Innovative and creative mindset Entrepreneurial orientation Only pure-play global life and health reinsurer Comprehensive solutions provider Capabilities leveraged acros
Slide 14: Demonstrated Success in Continually Growing Book Value Per Share
Demonstrated Success in Continually Growing Book Value Per Share Book value per share (ex-AOCI)1 total return growth2 Book value per share excluding AOCI and tax reform total return growth: 15-Year CAGR 11.4%, 10-Year CAGR 10.9%, 5-Year CAGR 11.4%. 1 Periods prior to 4Q06 not restated for 2012 DAC a
Slide 15: Five-Year Book Value Growth Highest Among Peers
Five-Year Book Value Growth Highest Among Peers Book value per share (ex-AOCI)2 total return growth 1 CAGR growth of book value plus dividends. 2012-2017. Source: S&P Global Market Intelligence. This group represents all companies in the SNL U.S. Life/Health index that were publicly traded over the
Slide 16: RGA Shares Have Performed Well Historically
RGA Shares Have Performed Well Historically Source: S&P Global Market Intelligence, price change percent. Information as of 2/23/2018.
Slide 17: Vision for the Future
Vision for the Future Robust organic growth and transactional opportunities Full range of capabilities and solutions Strong teams, consistent approach, focused on execution High-performing global model, with good balance and diversity Mortality and morbidity trends constructive overall to RGA Innova
Slide 18: Financial Overview
Financial Overview
Slide 19: Key Messages
Key Messages Strong financial track record Continued organic growth and in-force transactions Effective capital management Conventional investment portfolio Less sensitivity to financial markets Stable liability structure Strong ratings Well-established Enterprise Risk Management framework Well-dive
Slide 20: RGA's Global Platform Results in Balance and Diversity of Earnings
RGA’s Global Platform Results in Balance and Diversity of Earnings 1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. Full Year Full Year Full Year Full Year Full Year QTD QTD QTD QTD QTD QTD QTD QTD (USD millions, except per share data) 2013 2014 2015 2016 2017 1Q16 2Q16 3Q16
Slide 21: Solid Growth of Adjusted Operating Revenues
Solid Growth of Adjusted Operating Revenues 1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. Consistent growth delivered over time Growth rates muted by weak foreign currencies Good balance across mature and higher-growth markets, products GFS produces a combination of premi
Slide 22: Attractive Growth Rate of Adjusted Operating EPS
Attractive Growth Rate of Adjusted Operating EPS 1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. 2 2Q13 Australia reserve strengthening impact adjusted operating EPS by $2.53. 3 2014 includes $0.47 of FIN 48 related tax benefits associated with closing five years of IRS exa
Slide 23: Solid Adjusted Operating ROE Despite Macro Environment Headwinds
Solid Adjusted Operating ROE Despite Macro Environment Headwinds 1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. 2 2013 results reflect charge for reserve strengthening in Australia. Favorable results in the face of lower interest rates and foreign currencies 5-year average
Slide 24: Efficient Capital Management
Efficient Capital Management Debt to Total Capital 20.9%20.8% 20.4% 21.8% 16.2% Debt + Hybrid to Total Capital 31.0%30.2% 29.7% 34.2% 27.1% Capital structure includes equity, debt, hybrid securities $ in millions
Slide 25: Effective Capital Management
Effective Capital Management 1 Transactions include embedded value securitization ($300 million) and mortality retrocession ($170 million) in 2014. 2 Deployed capital includes block acquisitions and organic growth. 4-year excess capital roll-forward Balanced approach toward excess capital deployment
Slide 26: Five-Year Dividend Per Share
Five-Year Dividend Per Share CAGR = 17% Source: S&P Global Market Intelligence & Company Filings. 1 Calculated as dividends divided by after-tax adjusted operating income. 2 Calculated as the dividend payout ratio plus buyback payout ratio. 3 Based upon normalized earnings in 2013 before charge for
Slide 27: Stable Liability Profile
Stable Liability Profile Reserves Profile March 31, 2017 Very low policyholder behavior risk: Mortality, LTC, Longevity, BOLI Lower policyholder behavior risk: Fixed and indexed annuity business with: High guarantees (typically 3-4%), Surrender charges, and/or Market-value adjustment (MVA) provision
Slide 28: Stable Earnings Under Market Movements
3% or $7M Stable Earnings Under Market Movements Illustrative sensitivities for 2016 pre-tax adjusted operating income1 Low Sensitivity to Interest Rate Movements Low Sensitivity to Equity Movements Interest rate shocks have immaterial effect on pre-tax adjusted operating income (3%) or ($7M) $ in m
Slide 29: RGA Produces High-Quality Earnings
RGA Produces High-Quality Earnings “Adjusted operating income” = net income over time Hedging and other “below”-the-line items equalize over time Less sensitivity to equity market volatility (less than 5% of pre-tax profits) Source: Autonomous Research US LP. Peer Companies include: AEL, AFL, AMP, C
Slide 30: Geographic Overview
Geographic Overview
Slide 31: Key Messages
Key Messages Established global brand Strong local franchises Global facultative underwriting leader Culture of innovation Consistent leader in business capability rankings Top 3 market share in key markets Locally managed, globally guided Disciplined and bottom-line focused Well-diversified busines
Slide 32: U.S. & Latin America
U.S. & Latin America 1 NMG Consulting Global Life & Health Reinsurance Programme – 2016. 2 Actual results shown. Refer to “Reconciliations of Non-GAAP Measures” in the Appendix. A leading franchise1 #1 U.S. Individual Mortality BCI ranking #1 “premier facultative underwriting” and #1 for “most innov
Slide 33: U.S. & Latin America Traditional
U.S. & Latin America Traditional 1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. Long-term stability despite quarterly volatility Annual Pre-tax Adjusted Operating Income1 Year $ in millions 2011 $323.0 2012 $376.7 2013 $372.7 2014 $350.3 2015 $233.5 2016 $375.3 2017 $375.0
Slide 34: Value Embedded in U.S. & Latin America Traditional In-Force
Value Embedded in U.S. & Latin America Traditional In-Force Actuarial Liabilities – U.S. GAAP vs. Best Estimate $ in billions
Slide 35: U.S. – Reinsurance Cession Rates
U.S. – Reinsurance Cession Rates Source: Society of Actuaries Reinsurance Market Surveys/LIMRA/SNL. Stable market environment $ in billions $ in billions
Slide 36: Canada
Canada Key Messages A leading franchise New business recurring production leader since 20071 BCI leader since 20082 Solid local currency revenue growth, adjusted for low margin treaty loss Stable stream of earnings Base earnings year of 2013 was particularly strong 1 Recurring production result as p
Slide 37: Europe, the Middle East and Africa
Europe, the Middle East and Africa Key Messages A leading franchise1 #1 in 2016 BCI ranking #2 in new business individual premiums Attractive revenue growth, strong earnings growth Ongoing demand for capital-motivated reinsurance, driven by Solvency II Traditional premium growth reflects geographic
Slide 38: Australia
$45 $30 $15 $0 -$15 -$30 -$305 Australia Key Messages Large and important reinsurance market, challenged by market conditions Group turnaround on track Disappointing individual disability (DI) performance in 2016 Continued repricing and other actions to improve profitability Prudent participation in
Slide 39: Asia
Asia1 Key Messages A leading franchise2 #1 in BCI for the 5th consecutive year #1 in new business individual premiums for the 5th consecutive year #1 in both underwriting and product development solutions Strong growth in revenues and earnings Expect margins to be fairly stable over the longer term
Slide 40: Appendix: Reconciliations of Non-GAAP Measures
Appendix Reconciliations of Non-GAAP Measures
Slide 41: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ in millions
Slide 42: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ in millions
Slide 43: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ in millions
Slide 44: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ in millions
Slide 45: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures $ in millions
Slide 46: (©2018 RGA. Alrghts reserved.
(©2018 RGA. Alrghts reserved.
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