Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Investor Day (March 2022)
40 slides from Reinsurance Group Of America's investor day presentation, Mar 7, 2022
Slide 1: Presenters: CFO, Chief Risk Officer, Investor Relations
Todd Larson Senior Executive Vice President and Chief Financial Officer Jonathan Porter Executive Vice President and Global Chief Risk Officer Jeff Hopson Senior Vice President, Investor Relations 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 future operations, strategies, earnings, revenues, income or loss, ratios, financial perform
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: Introduction and Overview
INTRODUCTION AND OVERVIEW
Slide 5: Key Messages
Key Messages 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 Highlighted value of
Slide 6: 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 7: Strong, Diversified Global Platform
Delivering material long-term value Strong, Diversified Global Platform Region1 Product1 1 Percentages exclude Corporate and Other. 2 Total adjusted operating revenues. Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. 1992 $0.4 Billion 2005 $4.6 Billion 2021 $16.1 Billion2 Dec
Slide 8: A Leader in Global Reinsurance Industry
A Leader in Global Reinsurance Industry Global life and health reinsurance revenues 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 Reinsurance Company 15,
Slide 9: 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 1 NMG Consulting Global Life & Health Reinsurance Study 2020, Business Capability Index (BCI). NMG Consulting, Global Life & Health Reinsurance Study 2020 Business Capability Index – All res
Slide 10: Financial Impacts of COVID-19
Financial Impacts of COVID-19 Strong global financial solutions and investment performance Underlying earnings power remained intact and is expected to be increased by new business written and in-force transactions completed in the last two years Business is resilient Value of platform and diversifi
Slide 11: Sustainability
Sustainability 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 Social Diversity, Eq
Slide 12: 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 13: Driving Value
Capitalizing on opportunities Driving Value 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 insights to gain com
Slide 14: 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 15: RGA's View of Risk
RGA’S VIEW OF RISK
Slide 16: Key Messages
Key Messages 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 creates need for risk so
Slide 17: Well-Diversified Risk Profile
Well-Diversified Risk Profile 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, yielding additional diver
Slide 18: COVID-19 Impact
COVID-19 Impact 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 COVID-19 impact re
Slide 19: COVID-19 Outlook
COVID-19 Outlook 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 governments and society I
Slide 20: 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 21: Financial Overview
FINANCIAL OVERVIEW
Slide 22: Key Messages
Key Messages 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 growth Positioned for
Slide 23: 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 Adjusted operating EPS1 Solid growth over time prior to the pandemic
Slide 24: Diversified source of earnings by region
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 25: Full Year Results by Segment
Full Year Results by Segment Underlying consolidated results for the year were strong, absorbing $1.4 billion of estimated COVID-19-related impacts2 Global Financial Solutions achieved record annual profits Pre-tax Adjusted Operating Income (Loss)1 2021 Reported 2021 COVID-19 Impact2 2020 Reported 2
Slide 26: Strong Capital Position
Strong Capital Position $ 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 Leverage ratios ma
Slide 27: Balanced Capital Management
Balanced Capital Management Effective and balanced capital deployment and capital management over time Efficient deployment Strong capital deployment in 2021 Success over time in deploying capital into in-force blocks $ in millions 2017-2021 Excess Capital Deployed Balanced approach Priority to depl
Slide 28: 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 29: Investment Portfolio
Investment Portfolio Diversification and strong underwriting are core to our investment strategy 94% investment grade Top 10 corporate credits comprise less than 4% of portfolio Portfolio benefits from broad platform and opportunity set Reduced public high yield in Q4 2021 because of relative value
Slide 30: Stable Liability Profile
Lower liquidity risk, lower disintermediation risk Stable Liability Profile 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 care (LTC), Bank-own
Slide 31: Long-term Business, Long-term Success
Long-term Business, Long-term Success 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 Effective and balanced capital management approach B
Slide 32: Opportunities Driving Financial Targets
Five-year financial targets excluding COVID-19 Opportunities Driving Financial Targets 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 capital Prioritize hig
Slide 33: Long Duration Targeted Improvements (LDTI)
Long Duration Targeted Improvements (LDTI) 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 discount rate impac
Slide 34: Looking Forward
Looking Forward 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 35: Appendix
APPENDIX
Slide 36: 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 37: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures
Slide 38: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures
Slide 39: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures
Slide 40: Copyright notice
©2022 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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