Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Investor Day (December 2021)
58 slides from Reinsurance Group Of America's investor day presentation, Dec 9, 2021
Slide 1: RGA Investor Day 2021
Exhibit 99.1 RGA INVESTOR DANG 2021 Reinsurance Group of America, Incorporated x THE SECURITY OF EXPERIENCE.” © THE OVATION. Loa
Slide 2: Anna Manning and Jonathan Porter biographies
Anna Manning is President and Chief Executive Officer of Reinsurance Group of America, Incorporated (RGA). She assumed the role of CEO on January 1, 2017, and of President in December 2015. Anna is also a member of RGA’s Board of Directors. She first joined RGA in 2007. From 2008 until 2011, she ser
Slide 3: Tony Cheng and Larry Carson biographies
Tony Cheng FIAA Executive Vice President, Head of Asia, Australia, and EMEA RGA Lawrence (Larry) S. Carson is Executive Vice President of the Global Financial Solutions (GFS) unit of Reinsurance Group of America, Incorporated (RGA). GFS is responsible for RGA’s asset-intensive, longevity, and capita
Slide 4: Todd Larson biography
Todd C. Larson is Senior Executive Vice President and Chief Financial Officer of Reinsurance Group of America, Incorporated (RGA). Named to this post in May 2016, he is responsible for RGA’s financial and capital management as well as for its financial reporting functions. These functions include: o
Slide 5: Jeff Hopson biography
J. Jeffrey (Jeff) Hopson is Senior Vice President, Investor Relations of Reinsurance Group of America, Incorporated (RGA). He is responsible for managing RGA’s financial communications with the investment community. Jeff, who came to RGA in September 2013, has several decades of experience in the fi
Slide 6: Welcome
WELCOME Jeff Hopson Senior Vice President, Investor Relations
Slide 7: Safe Harbor
Safe Harbor INVESTOR DAY 2021 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 future operations, strategies, earnings, revenues, income or loss, ratios,
Slide 8: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures INVESTOR DAY 2021 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
Slide 9: Agenda
Agenda INVESTOR DAY 2021 Welcome Jeff Hopson, Senior Vice President, Investor Relations Jeff Hopson, Senior Vice President, Investor Relations Introduction and Overview Anna Manning, President and Chief Executive Officer Anna Manning, President and Chief Executive Officer RGA’s View of Risk Jonathan
Slide 10: Introduction and Overview
INTRODUCTION AND OVERVIEW Anna Manning President and Chief Executive Officer
Slide 11: Key Messages
Key Messages INVESTOR DAY 2021 Well-Positioned to Deliver Differentiated and valuable global franchise A leading market position; deep technical expertise Strong culture of collaboration, creativity, and integrity COVID-19 Impacts Proven resilience of our business Reaffirmed valuable role of RGA Hig
Slide 12: Well-Positioned to Deliver
Well-Positioned to Deliver Well-diversified across geographies and products A leader in a highly concentrated global reinsurance industry Exclusively focused on life and health market Well-respected brand reflecting relentless client focus Strong balance sheet and financial strength ratings Empowere
Slide 13: Strong, Diversified Global Platform
Delivering material long-term value Strong, Diversified Global Platform INVESTOR DAY 2021 Region1 Product1 1 Percentage of adjusted operating revenue excluding Corporate and Other. 2 Total adjusted operating revenues. Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. 1992 $0.4
Slide 14: A Leader in Global Reinsurance Industry
A Leader in Global Reinsurance Industry Global life and health reinsurance revenues INVESTOR DAY 2021 A leader in a highly concentrated global life and health reinsurance industry, with high barriers to entry for large segments of the business Rank Reinsurer 2020 Revenues $ in millions 1 Swiss Reins
Slide 15: A Leading Market Position with Best-in-Class Capabilities
Leader on Global BCI for the 10th consecutive year1 A Leading Market Position with Best-in-Class Capabilities INVESTOR DAY 2021 1 NMG Consulting Global Life & Health Reinsurance Study 2020, Business Capability Index (BCI). NMG Consulting, Global Life & Health Reinsurance Study 2020 Business Capabili
Slide 16: Talent and Expertise Are Differentiators
86% employee engagement score in 2021, 9 points above global financial services peers1 27 years average industry experience for executive leadership team 33% of global workforce are in actuarial, underwriting, or medical roles Talent and Expertise Are Differentiators Leaders in underwriting, risk as
Slide 17: Financial Impacts of COVID-19
Financial Impacts of COVID-19 Favorable non-COVID-19 underwriting experience, strong global financial solutions and investment performance Underlying earnings power remained intact and has been increased by new business written and in-force transactions completed in the last two years Business is re
Slide 18: Responding to COVID-19
Responding to COVID-19 Applying internal and external expertise to inform ongoing modeling and risk actions Delivering solutions enabling clients to quickly adapt to evolving pandemic environment Sharing risk expertise and thought leadership to deepen client partnerships and further enhance growth o
Slide 19: Sustainability
Sustainability INVESTOR DAY 2021 Environment Targeting net-zero greenhouse gas emissions in operations1 by 2026 Further embedding ESG criteria in investment process Enhancing transparency though Task Force of Climate-Related Financial Disclosures (TCFD) and social responsibility reporting in 2022 So
Slide 20: Moving Forward
Moving Forward Increasing awareness and demand for insurance products Aging populations shifting product needs Growing middle classes requiring insurance products Continuing low interest rates impacting availability and affordability of products Increasing in-force block transactions from industry r
Slide 21: Driving Value
Capitalizing on opportunities Driving Value INVESTOR DAY 2021 Create Leading with expertise and innovation Combine product development, innovation, and new reinsurance structures to open or expand markets Leverage underwriting, data, analytics, and digital expertise to grow markets Deliver unique in
Slide 22: Looking Ahead
Looking Ahead Financially strong with a differentiated and diversified global franchise Strong brand, excellent reputation, and leading market positions Client-centric, capability-driven solutions provider Highly talented teams with innovative culture of collaboration and creativity Focused on long-
Slide 23: RGA's View of Risk
RGA’S VIEW OF RISK Jonathan Porter Executive Vice President and Global Chief Risk Officer
Slide 24: Key Messages
Key Messages INVESTOR DAY 2021 Strong Risk Management Robust framework and culture Proactive risk management Well-diversified risk profile COVID-19 Impact and Outlook Impacts persisting, remain manageable Short-term uncertainty, long-term optimism Well-Positioned for Opportunities Uncertainty create
Slide 25: Strong Risk Management
Strong Risk Management Robust framework and culture A strong risk culture underpins everything we do Strong governance practices starting at time of underwriting and pricing Alignment of risk appetites and limits with business strategy Stress testing and qualitative assessments identify emerging str
Slide 26: Well-Diversified Risk Profile
Well-Diversified Risk Profile INVESTOR DAY 2021 Current risk profile a result of steady diversification over past decades Mix of insurance and market and credit risks expected to remain stable over the next five years Biometric risks expected to become more balanced over the next five years, yieldin
Slide 27: COVID-19 Impact
COVID-19 Impact INVESTOR DAY 2021 Impact in context Produced $1.3 billion2 of pre-tax income over the course of the pandemic More than $1.5 billion3 of future pre-tax earnings expected from 2020 and 2021 new business Substantial long-term premiums expected to be received relative to pandemic claims
Slide 28: COVID-19 Outlook
COVID-19 Outlook INVESTOR DAY 2021 Higher short-term uncertainty Increased uncertainty in the short term as the pandemic runs its course, driven by: New variants, including Omicron Vaccination effectiveness and take-up rates Development and deployment of new antiviral therapeutics Actions of governm
Slide 29: Well-Positioned for Opportunities
Well-Positioned for Opportunities Just as we are navigating through COVID-19, so are our clients Heightened future uncertainty and market changes will require risk management solutions COVID-19 has clearly demonstrated the value of reinsurance as a risk management tool Areas of opportunity arising f
Slide 30: Business Panel Discussion
BUSINESS PANEL DISCUSSION Larry Carson Executive Vice President, Global Financial Solutions Tony Cheng Executive Vice President, Head of Asia, Australia, & EMEA Ron Herrmann Executive Vice President, Head of U.S. & Latin America Markets
Slide 31: Key Messages
Key Messages INVESTOR DAY 2021 Responding to COVID-19 Enhanced client support Acceleration of digital transformation Increased awareness of need for protection products Business Environment Favorable industry dynamics Accelerating regulatory, solvency, and accounting changes Increasing in-force blo
Slide 32: Responding to COVID-19
Responding to COVID-19 Enhanced client support Timely, actionable insight Thought leadership Research Webinars New underwriting guidelines Simplified underwriting processes Strong client support for digital transformation of underwriting Increased demand for RGA’s industry leading Facultative Underw
Slide 33: Favorable Conditions for Mortality and Morbidity Growth
Favorable Conditions for Mortality and Morbidity Growth INVESTOR DAY 2021 Industry trends Middle-class growth and wealth creation driving accelerated growth in underpenetrated insurance markets Increasing cession rates due to greater appreciation of strategic benefits of reinsurance Aging population
Slide 34: Global Underwriting Leadership
Global Underwriting Leadership INVESTOR DAY 2021 Industry trends Increased demand for digital and automated underwriting solutions, both accelerated by COVID-19 Dynamic risk assessment, including integration of engagement and wellness programs, is gaining traction Increased regulatory activity aroun
Slide 35: Favorable Conditions for Strong Financial Solutions Growth
Favorable Conditions for Strong Financial Solutions Growth Industry trends Strong and growing global pension risk transfer opportunities Continued client demand for in-force block de-risking transactions New accounting and solvency frameworks will drive continuing need for innovative capital solutio
Slide 36: Looking Ahead
Looking Ahead Market opportunities Increased demand for protection products and financial solutions Aging populations shifting product needs Growing demand for pension risk transfer solutions Increasing in-force block transactions from industry restructuring Changes in regulatory, accounting, and so
Slide 37: Break
INVESTOR DAY 2021 BREAK
Slide 38: Financial Overview
FINANCIAL OVERVIEW Todd Larson Senior Executive Vice President and Chief Financial Officer
Slide 39: Key Messages
Key Messages INVESTOR DAY 2021 Diversified Global Platform Attractive operating model Well-diversified earnings profile Strong Capital Position Balanced capital management and strong ratings Quality investment portfolio and stable liability profile Long-Term Value Creation Consistent book value grow
Slide 40: Key Financial Metrics
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. 2 COVID-19-related impact estimates include mortality and morbidity claims with offsetting impacts from longevity. Tax effected at 24%. Key Financial Metrics INVESTOR DAY 2021 Adjusted operating EPS1 Solid growth over time pri
Slide 41: Diversified Global Platform pre-tax adjusted operating income
Pre-tax adjusted operating income1,2 Global platform provides a diversified source of earnings Value of geographic diversification pronounced during the pandemic Sizeable book of insurance in-force expected to produce significant earnings Strong underlying earnings power excluding the effects of $1.
Slide 42: Strong Capital Position
Strong Capital Position INVESTOR DAY 2021 $ in billions Total capital Strong balance sheet with a stable capital mix over time Proven ability to raise capital in a variety of ways Consistent growth in shareholders’ equity ex-AOCI Leverage ratios Consistent leverage ratios within our targeted ranges
Slide 43: Balanced Capital Management
Balanced Capital Management INVESTOR DAY 2021 Consistent and balanced in deploying capital over time Efficient deployment Strong capital deployment year-to-date consistent with pre-pandemic levels Success over time in deploying capital into in-force blocks Excess capital of $1.0 billion at 3Q21 $ in
Slide 44: Alternative Funding and Capital Sources
Alternative Funding and Capital Sources Capital management strategy has proven effective over time, now looking to further supplement and add to existing toolkit RGA will enhance its use of alternative sources Embedded value and other securitizations Retrocessions Funding agreement backed notes (FAB
Slide 45: Investments Summary
Investments Summary Investment performance a strength across income and yield Investment yield and new money rates for non-spread portfolio supported by broad capabilities including private assets Variable investment income driven by limited partnership portfolio performance as well as real estate j
Slide 46: Investment Portfolio
Investment Portfolio Average portfolio credit rating: A 93.4% investment grade CML average LTV 57.6% CLO book value $2.1 billion1, AA average credit quality (88.1% A and above) Diversification and strong underwriting are core to our investment strategy Impairments and credit downgrades tracking well
Slide 47: Stable Liability Profile
Lower liquidity risk, lower disintermediation risk Stable Liability Profile INVESTOR DAY 2021 Lower overall policyholder behavior risk, strong asset-liability management No policyholder behavior risk Locked-in longevity in payout Very low policyholder behavior risk Mortality, Morbidity, Long term ca
Slide 48: Book Value Per Share (ex-AOCI)
Book Value Per Share (ex-AOCI)1 Demonstrated value from diversification of earnings sources and global platform Consistent book value growth over time, in a range of environments Investment strategy balances risk and return to weather cycles Balanced and consistent capital management approach INVEST
Slide 49: Five-year financial targets excluding COVID-19
Five-year financial targets excluding COVID-19 Opportunities Driving Financial Targets INVESTOR DAY 2021 Leverage creativity and expertise to create innovative products and structures that drive profitable growth Be partner of choice to enhance and scale innovation, capabilities, expertise, and capi
Slide 50: Long Duration Targeted Improvements (LDTI)
Long Duration Targeted Improvements (LDTI) INVESTOR DAY 2021 LDTI Impact Liability Calculation Best estimate assumptions Locked in discount rates for P&L Current discount rates for balance sheet Reduced earnings volatility from claims Increased earnings volatility from assumption updates Unlocking d
Slide 51: Closing Remarks
Closing Remarks We have a differentiated and valuable global franchise We have the resources to manage through short-term events The resilience of our business has been proven Strong underlying earnings power is evident Industry dynamics are providing many opportunities We are well-positioned to del
Slide 52: Appendix
APPENDIX
Slide 53: Ratings
Ratings Financial Strength Ratings1 S&P A.M. Best Moody’s RGA Reinsurance Company AA- Very Strong A+ Superior A1 Good RGA Americas Reinsurance Company, Ltd. AA- Very Strong A+ Superior RGA Life Reinsurance Company of Canada AA- Very Strong A+ Superior RGA Reinsurance Company of Australia Limited AA-
Slide 54: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures INVESTOR DAY 2021
Slide 55: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures INVESTOR DAY 2021
Slide 56: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures INVESTOR DAY 2021
Slide 57: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures INVESTOR DAY 2021
Slide 58: Copyright notice
©2021 RGA. All rights reserved. No part of this publication may be reproduced in any form without the prior permission of RGA. The information in this publication is for the exclusive, internal use of the recipient and may not be relied upon by any other party other than the recipient and its affili
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