Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Investor Day (June 2019)
113 slides from Reinsurance Group Of America's investor day presentation, Jun 6, 2019
Slide 1: Investor Day 2019
Exhibit 99.1 The security of experience. The power of innovation. Investor Day 2019 Reinsurance Group of America, Incorporated
Slide 2: RGA: A Global Leader
RGA: A Global Leader Reinsurance Group of America, Incorporated (NYSE: RGA) is a FORTUNE 500 company with approximately $3.3 trillion of life reinsurance in force and assets of $64.5 billion as of December 31, 2018. RGA is one of the largest life reinsurers in the world. From our beginnings in 1973
Slide 3: Global Presence
Global Presence RGA has achieved stability through geographic operational diversity and a strategic mix of products and services. Allocation of 2018 net premiums1: 53% derived from U.S. and Latin America operations Worldwide Operations RGA maintains operating subsidiaries, branches, or representativ
Slide 4: Ratings
Ratings Financial Strength Ratings RGA Reinsurance Company RGA’s principal operating subsidiary in the United States A+ Superior A.M. Best Company A1 Good Moody’s Investors Service AA- Very Strong S&P Global Ratings RGA Life Reinsurance Company of Canada RGA’s Canadian operating subsidiary A+ Superi
Slide 5: Awards and Recognitions
Awards and Recognitions RGA leads various industry rankings in terms of client satisfaction and reputation. Recent awards and recognitions include: Life Reinsurer of the Year RGA was recognized by Asia Insurance Review as “Life Reinsurer of the Year” at the 2018 Asia Insurance Industry Awards. #1 in
Slide 6: Anna Manning, President and CEO
Anna Manning FSA, FCIA President and Chief Executive Officer Reinsurance Group of America, Incorporated 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 i
Slide 7: Tony Cheng, Executive Vice President, Head of Asia
Tony Cheng FIAA Executive Vice President, Head of Asia Reinsurance Group of America, Incorporated As Executive Vice President, Head of Asia, Tony Cheng has executive oversight of all of RGA’s Asian operations. Tony, who joined RGA in 1997, has more than 20 years of experience in the life insurance i
Slide 8: John Laughlin, EVP Global Financial Solutions
John Laughlin Executive Vice President, Global Financial Solutions Reinsurance Group of America, Incorporated President RGA Financial Group, L.L.C. John P. Laughlin is Executive Vice President of Global Financial Solutions (GFS), a unit of Reinsurance Group of America, Incorporated (RGA), and Presid
Slide 9: Jeffrey Hopson, SVP Investor Relations
J. Jeffrey Hopson CFA Senior Vice President, Investor Relations Reinsurance Group of America, Incorporated 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
Slide 10: Investor Day 2019: Jeff Hopson
Investor Day 2019 Jeff Hopson Senior Vice President, Investor Relations May 18, 2017
Slide 11: 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 12: 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 13: 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 and Chief Operating Officer Tony Cheng, Executive Vice President, Head of Asia RGAX D
Slide 14: Introduction and Overview
Introduction and Overview Anna Manning President and Chief Executive Officer
Slide 15: Key Messages
Attractive financial prospects Track record of value creation Robust organic growth and active transaction pipeline Earnings diversity by geography and product Effective capital management Key Messages Well-positioned for expanding opportunities A leading global brand and experienced management team
Slide 16: RGAX, Timely Topics, Asia
RGAX Expanding capabilities across the value chain RGAX well-positioned, well-regarded, and delivering innovative offerings Business model expanding to include fees for services Timely Topics Mortality Seasonality Short-term volatility Long-term mortality improvements Medical and scientific advancem
Slide 17: Evolution of Our Diversified Global Platform
Evolution of Our Diversified Global Platform 1992 $13.1 Billion2 $4.6 Billion $0.4 Billion 2005 2018 Region1 Product1 1 Percentage of adjusted operating revenue excluding Corporate. 2 Total adjusted operating revenues. Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix. Agenda |
Slide 18: Well-Positioned Global Life and Health Reinsurance Revenues
Well-Positioned Global Life and Health Reinsurance Revenues Rank Reinsurer 2018 Revenues $ in millions 1 Swiss Reinsurance Company 14,455 2 Reinsurance Group of America1 13,061 3 Munich Re2 11,427 4 SCOR Global Life Re 10,227 5 Hannover Re 8,243 6 China Life Re 5,302 7 General Re3,4 3,932 8 Pacific
Slide 19: Best-in-Class Capabilities
Best-in-Class Capabilities NMG Consulting, Global Life & Health Reinsurance Study 2018 1 NMG Consulting Global Life & Health Reinsurance Study 2018. 2 NMG Consulting’s Business Capability Index (Globally). NMG Consulting notes that RGA’s sources of differentiation and notable success in 2018 include
Slide 20: Experienced Team and Deep Bench Strength
Experienced Team and Deep Bench Strength Years of Experience Industry1 RGA2 Anna Manning, President and CEO 38 12 Todd Larson, SEVP, Chief Financial Officer 25 24 Alain Néemeh, SEVP, Chief Operating Officer 22 22 Dennis Barnes, EVP, RGA and CEO, RGAX 2 2 Gay Burns, EVP, Chief Human Resources Officer
Slide 21: Proven Strategy, Exceptional Strengths
Proven Strategy, Exceptional Strengths Traditional Reinsurance Diversified global platform and product offering Strong mortality and morbidity growth with favorable demographic trends Global underwriting leadership Deep risk knowledge Financial Solutions Established product lines, long track record
Slide 22: Success in Continually Growing Book Value Per Share
Success in Continually Growing Book Value Per Share Enviable track record Double-digit returns Consistent execution over time, in a range of environments Balance sheet integrity is high Long-term value 15-Year 11.3% CAGR 10-Year 12.7% CAGR 5-Year 13.7% CAGR Book value per share (ex-AOCI)1 total retu
Slide 23: RGA Shares Have Performed Well Historically
RGA Shares Have Performed Well Historically Source: S&P Global Market Intelligence, price change percent. Information as of 5/29/2019. 3 Years 5 Years Consistent management team Consistent approach Consistent underwriting, pricing Consistent value creation Agenda | Introduction and Overview | Geogra
Slide 24: Global Trends Create Broad Opportunities
Capabilities and Services Value chain expansion Data and analytics Next-generation underwriting Global Trends Create Broad Opportunities Macro Environment Regulatory change Balance sheet restructuring Low interest rates Client and Consumer Shifting demographics driving new products Digital distribut
Slide 25: Expanding Capabilities Across the Value Chain
Expanding Capabilities Across the Value Chain Claims Product Development Agent/ Advisor Marketing and Distribution Underwriting Administration Consumer Engagement Developing solutions across industry value chain to respond to opportunities Partnering with clients to create shared value Delivering ad
Slide 26: Vision for the Future
Vision for the Future We see an abundance of opportunities: RGA has what it takes to succeed High-performing global platform, with nice balance of risks Full range of capabilities and solutions Innovative culture, focused on long-term value creation Strong teams, consistent approach, patience and di
Slide 27: Geographic Overview
Geographic Overview May 18, 2017 Alain Néemeh Senior Executive Vice President and Chief Operating Officer Tony Cheng Executive Vice President, Head of Asia
Slide 28: Key Messages
Attractive financial prospects Disciplined and bottom-line focused Steady growth in mortality Attractive opportunities in morbidity Key Messages Well-positioned for expanding opportunities A leading global brand Strong local franchises Well-diversified business Proven strategy, proven execution Lead
Slide 29: Experienced Team and Deep Bench Strength
Experienced Team and Deep Bench Strength Years of Experience Industry1 RGA2 Alain Néemeh, SEVP, Chief Operating Officer 22 22 Paula Boswell-Beier, SVP, Global Services 26 18 Tony Cheng, EVP, Head of Asia 24 22 Olav Cuiper, EVP, Head of EMEA 33 12 Michael Emerson, EVP, U.S., Latin and South America 3
Slide 30: Established Global Brand
Established Global Brand Exceptional capabilities leading to solid market share Global United States Canada EMEA Asia Pacific1 2018 Business Capability Ranking (BCI)2 #1 #23 / #14 #1 #1 #1 2018 New Business Individual Premiums5 / Sum Assured6 #2 #3 / #2 #2 / #2 #3 #2 2018 Group Total Premiums7 #2 #3
Slide 31: Proven Business Model
Proven Business Model Guiding Principles Think globally, act locally Leverage our global expertise Continually innovate and refine our product offerings Develop and retain talent Strike the right balance between profitable growth and risk management Strategies Maintain and strengthen leading presenc
Slide 32: Prudent and Disciplined Approach
Prudent and Disciplined Approach Diversified Global Platform Geographic Build-out Largely Complete Steady and Consistent Growth Premiums 1992 Canada 1994 Spain 1995 Hong Kong Japan Barbados 1996 Australia New Zealand 1997 Malaysia 1998 South Africa United Kingdom Mexico 1999 Taiwan 2002 South Korea
Slide 33: Diversified Product Offering
2018 2005 1992 Diversified Product Offering Innovation and expanded capabilities respond to client needs Year Product Year Product Year Product 1995 Entered capital-motivated reinsurance business 2002 Critical illness business in South Korea 2011 Early critical illness product in Indonesia 1997 Firs
Slide 34: Global Cession Rates
Global Cession Rates U.S. and Canada life cession rates have stabilized and recently increased following a period of decline EMEA cession rates vary by country Cession rates in Asia expected to increase New products and distribution (e.g., accelerated underwriting, insurtech) driving desire to reins
Slide 35: Solid Mortality and Morbidity Growth
Morbidity Greater pressure on government finances and increased treatment costs drive private solutions Leading product development capabilities position RGA favorably Solid Mortality and Morbidity Growth Industry Trends Mature market growth driven by strong recurring production coupled with in-forc
Slide 36: Mortality Overview
Mortality Overview Mortality is seasonal, short-term volatile, and long-term improving Seasonality impacts claims distribution throughout a year Short-term volatility is mainly due to large claim amounts Volatility over the long term has been muted Mortality improvement is not linear and we expect c
Slide 37: Mortality is seasonal
Mortality is seasonal Consistent seasonal pattern observed across populations, leading to more deaths in winter Magnitude varies by age with older ages more impacted by winter months Seasonality impacts how deaths are distributed throughout the year but does not represent a deterioration in trend Mo
Slide 38: Mortality is short-term volatile
Mortality Overview Mortality is short-term volatile 1RGA U.S. individual mortality claims 2008-2018, deviation from linear trend. All Claims1, Monthly Large Claims1, Monthly All Claims1, Annual Short-term volatility from the amount of large claims can be substantial Over the longer term, volatility
Slide 39: Mortality has improved over the long term
Mortality has improved over the long term Clear positive trend in all-cause mortality rate improvement Improvement observed from countries with both high and low absolute mortality levels Mortality improvement varies by age over intermediate periods due to cause-specific factors Younger ages tend to
Slide 40: Mortality Overview
Mortality Overview Seasonality Seasonal trends in mortality are consistent Older ages more impacted than younger ages As RGA’s block has aged, we would expect an increase in seasonal effects This does not represent a deterioration in mortality, simply a timing issue of when deaths occur during the y
Slide 41: U.S. and Latin America Traditional
Pre-Tax Adjusted Operating Income2 Well-diversified and sustainable long-term profit stream 2018 PTAOI would be $50M higher with 2014 book yields of 5.09% vs. 4.69% U.S. and Latin America A Leading Franchise Leader in All Respondents Business Capability Index (BCI)1 #2 - U.S. Individual Mortality #1
Slide 42: U.S. and Latin America Traditional
U.S. and Latin America Traditional Reinsurance cessions have increased since 2015 Overview of U.S. Individual Life Mortality Market Source: SOA Life Reinsurance Survey/ S&P Global Market Intelligence. Excludes portfolio (in-force) production. U.S. Market remains the largest individual mortality mark
Slide 43: U.S. group remediation effort
U.S. and Latin America Traditional U.S. group remediation effort Remediation of certain underperforming excess health and disability blocks is proceeding as expected, producing a satisfactory Q1 2019 Those lines of business represent approximately 25% of Group’s annual premium As of Q1 2019, approxi
Slide 44: U.S. individual health
U.S. and Latin America Traditional U.S. individual health LTC business reinsured written primarily after 2009, and on products with more limited benefits Portfolio contains no legacy in-force blocks Comfortable with our reserves Selective and prudent regarding new business opportunities Agenda | Int
Slide 45: Canada
Pre-Tax Adjusted Operating Income3 Expect sustainable long-term profit stream Canada A Leading Franchise Leader in All Respondents Business Capability Index (BCI) since 20081 Dominant market share of individual new business production2 Adjusted Operating Revenues3 Potential growth opportunities Deli
Slide 46: Europe, the Middle East, and Africa
Pre-Tax Adjusted Operating Income2 Developing solutions to help clients address regulatory challenges Pursuing opportunities through technology-driven innovation with clients Europe, the Middle East, and Africa A Leading Franchise Leader in All Respondents Business Capability Index (BCI)1 #1 in EMEA
Slide 47: Australia
Pre-Tax Adjusted Operating Income2 Disappointing 2018 PTAOI mainly due to unfavorable claims from legacy group and individual treaties 2014 and later new treaties have been profitable Australia Overview of Industry Australia and New Zealand remain the largest group reinsurance market in the world1 R
Slide 48: Asia: Strong Track Record and Exciting Future
Pre-Tax Adjusted Operating Income2 Innovation leading to new treaty wins, exclusive treaties, and stronger margins GFS expected to increase in importance over time as markets mature Asia1 Strong Track Record and Exciting Future A market-leading position and brand Quality, depth, diversity, and size
Slide 49: Market-Leading Brand
Market-Leading Brand Asian clients tend to be loyal as long as we continue to deliver RGA’s strong brand is a major strength and differentiator Strength 1: A Market-Leading Position and Brand Strong Capabilities #1 in BCI and market share for the past seven consecutive years1 2017 and 2018 Life Rein
Slide 50: Quality, Depth, Diversity, and Size of the Team
Strength 2: Quality, Depth, Diversity, and Size of the Team Experienced leadership team High percentage of team with actuarial, underwriting, and medical backgrounds Combine sciences with commercial, teamwork, cultural, and language skills Complemented by regional team and supported by global team I
Slide 51: Culture of Innovation and Success
Strength 3: Culture of Innovation and Success Track record of launching many “market firsts” in new products and reinsurance structures New innovations generate growth and maintain strong margins New products designed for local consumer needs drive the need for strong local teams Market firsts in on
Slide 52: Tailwinds: Favorable Macro Trends
Tailwinds: Favorable Macro Trends Macro Trends Strengthen RGA’s Position Emerging middle class, aging and wealthier populations Clients shifting towards a higher mix of health and protection given massive insurance gap in Asia Capital regimes planned for Asia moving towards Solvency II These macro t
Slide 53: Asia: Vision for the Future
Asia: Vision for the Future Early stages of a long-term journey Our brand, culture, team, and track record are our greatest strengths Macro trends support the growth of the underlying life and health reinsurance market Macro trends moving the environment favorably towards RGA, creating demand for pr
Slide 54: Global Underwriting Leadership
Global Underwriting Leadership A Sample of RGA’s Underwriting Services Facultative underwriting – in 2018 assessed over 655,000 cases globally with 24-hour turnaround on 83% of cases Strategic services including process efficiency advisory Global Underwriting Manual – recorded almost 600,000 client
Slide 55: Vision for the Future
Vision for the Future Insurance and reinsurance remain important and needed products Favorable demographics and macro trends expected to continue to generate opportunities in emerging markets RGA remains optimistic on mortality improvement over the long term RGA is well-positioned to continue being
Slide 56: RGAX
Dennis Barnes Chief Executive Officer, RGAX RGAX
Slide 57: Key Messages
Attractive financial prospects Broad base of clients around the world Large addressable market opportunities Earnings diversity with non-reinsurance income Key Messages Well-positioned for expanding opportunities Strong foundation from RGA culture, relationships, and core capabilities Diverse and ex
Slide 58: Strategic Pillars
Strategic Pillars Build Upon and Accelerate RGA’s Legacy of Innovation Deliver recurring fee-based revenue streams Align with RGA core strengths and strategy Supplement and enhance core reinsurance business Expand Client Services Across the Value Chain Enhance RGA’s suite of solutions to meet evolvi
Slide 59: Areas of Focus
Areas of Focus Data Analytics Advanced tools including machine learning and artificial intelligence Improve speed, efficiency, and quality of predictions for applications across the value chain Digital Distribution Scalable approaches for customer acquisition Optimize satisfaction throughout custome
Slide 60: Expanding Capabilities Across the Value Chain
Expanding Capabilities Across the Value Chain Claims Product Development Agent/ Advisor Marketing and Distribution Underwriting Administration Consumer Engagement Agenda | Introduction and Overview | Geographic Overview | RGAX | Global Financial Solutions | Financial Overview | Appendix
Slide 61: Case Study: APEXA
Impact Reduces contracting and screening process from 15-30 days to 48 hours APEXA receives platform fee from insurance companies and general agents Case Study: APEXA Opportunity Redundant and inefficient processes exist to assess and monitor life insurance advisor suitability and compliance Solutio
Slide 62: Case Study: Everplans
Impact Improved engagement between advisors and customers Recurring revenue from platform licensing Case Study: Everplans Opportunity People often do a poor job of preparing their loved ones to manage the complexities of their death Grieving family members are often left with the burden of piecing t
Slide 63: Case Study: Next-Generation Risk Assessment
Impact Increased speed of underwriting decisions RGA will collect processing fees and should acquire relevant data to drive future product development Case Study: Next-Generation Risk Assessment Opportunity Insurers are seeking ways to offer differentiated products and services, reduce costs, and st
Slide 64: Vision for the Future
Vision for the Future Deepen and broaden client relationships and engage earlier in the innovation and product development cycle Help the industry serve the needs of broader consumer segments Deliver a wide range of services and solutions across the value chain Contribute diversified income streams
Slide 65: Break
The security of experience. The power of innovation. Break
Slide 66: Global Financial Solutions (GFS)
Global Financial Solutions (GFS) John Laughlin Executive Vice President, Global Financial Solutions Larry Carson Executive Vice President, Chief Actuary, Global Financial Solutions
Slide 67: Key Messages
Attractive financial prospects Demand continues for capital and risk solutions Good diversification of earnings and risk Expected continued strong financial results Key Messages Well-positioned for expanding opportunities Strong brand, reputation, and market prominence Changing landscape creates opp
Slide 68: GFS Product Lines
Capital-Motivated Remote-risk solutions allowing companies to manage regulatory capital at a low-cost fee Includes relief for redundant reserves or solvency capital as well as other structured reinsurance solutions GFS Product Lines Asset-Intensive Full-risk coverage of investment or accumulation pr
Slide 69: Diversified Earnings and Risk
Diversified Earnings and Risk Established Product Lines, Long Track Record of Growth History of Success Strong Growth $ in millions Pre-Tax Adjusted Operating Income2 2018 $512M2 1 Began reinsurance operations as ITT Lyndon in 1983; RGA acquired an ownership stake in 1995; wholly owned by RGA since
Slide 70: Long Track Record of Innovation
Fixed annuity asset-intensive Bank-Owned Life Insurance (BOLI) asset-intensive Long Track Record of Innovation Innovation is critical to maintaining healthy margins in a competitive environment XXX (level term) financial reins. Fixed index annuity asset-intensive Variable annuity asset-intensive Lon
Slide 71: Regulatory, Accounting, and Economic Changes Create Opportunities
Regulatory, Accounting, and Economic Changes Continue to Create Opportunities IFRS17 Interest Rates Changes are driving increased capital and volatility RGA is well-positioned to provide solutions RGA has implemented solutions that address these changes Continuing RGA’s long track record of innovati
Slide 72: 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 Robust Solution Set Ability and willingness to accept and retain both biometric and i
Slide 73: Experienced GFS Team and Deep Bench Strength
Experienced GFS Team and Deep Bench Strength Management team average years with RGA 29 years 14 years Management team average industry experience Associates in actuarial roles 66% 91% Associates with professional designations or advanced degrees Agenda | Introduction and Overview | Geographic Overvi
Slide 74: GFS Results
GFS Results Pre-Tax Adjusted Operating Income1 by Region Proven track record of consistent and strong earnings with attractive returns Important contributor to RGA’s results Transaction flow can vary by region from year to year Pre-Tax Adjusted Operating Income1 by Product Asset-intensive continues
Slide 75: Asset-Intensive Reinsurance – Executing Strategies
Asset-Intensive Reinsurance – Executing Strategies Execution Strong in-force management and ALM discipline optimize results Selective participation in well-designed products Liabilities are well-matched to ensure low sensitivity to market and policyholder behavior risks Balanced portfolio of product
Slide 76: Asset-Intensive Reinsurance – Results
Increasing Global Presence Strong U.S. presence; solid growth in Europe and Asia Asset-Intensive Reinsurance – Results Consistent, Stable Earnings Reinsuring annuities or interest-sensitive life products that fit RGA’s risk profile Low sensitivity to market and policyholder behavior risks Well-Diver
Slide 77: Asset-Intensive Reinsurance – Policyholder Behavior Risk
Asset-Intensive Reinsurance – Policyholder Behavior Risk Optionality Profile Significant portion of asset-intensive business has lower policyholder behavior risk No policyholder behavior risk Payout annuity business with locked-in longevity Very low policyholder behavior risk Bank-Owned Life Insuran
Slide 78: Asset-Intensive Reinsurance – Market Risks
Low Equity Market Sensitivity Effects of equity market movements are manageable Asset-Intensive Reinsurance – Market Risks Illustrative Sensitivities Stresses are designed to show the effects of interest rate or equity market changes on January 1, 2018, with no recovery for 12 months All shocks are
Slide 79: Longevity Reinsurance – Executing Strategies
Longevity Reinsurance – Executing Strategies Execution Transacted in U.S., U.K., Canada, Netherlands, France Executed swaps, asset transfers, and stop-loss solutions Primarily focused on advanced ages Inception to date (ITD), performance has been favorable Executed flow agreements on longevity swaps
Slide 80: Longevity Reinsurance – Results
Increasing Global Presence Selective participation in target markets Longevity Reinsurance – Results Continued Strong Growth Consistent strong income growth from new business Strong favorable experience ITD; increased in 2017 and 2018 Well-Diversified Products Completed first-ever U.S. longevity swa
Slide 81: Capital-Motivated Reinsurance – Executing Strategies
Execution Thought partner for LICAT solutions in Canada, Solvency II in Europe, RBC changes in Asia A leading presence in key markets around the globe Broad variety of solutions for continually changing capital and reserve frameworks Solvency II-driven solutions in Asia, Continental Europe, the U.K.
Slide 82: Capital-Motivated Reinsurance – Results
Increasing Global Presence Established presence in North America, EMEA, and Asia Capital-Motivated Reinsurance – Results Consistent, Stable Earnings Stable, fee-based contributor to income Recognized leader in this highly specialized market Income volatility by region driven by evolving regulatory l
Slide 83: Significant Capital Deployed into In-force Transactions
Favorable Results Overall, transactions have performed favorably Asset portfolios have been repositioned to better align with our investment strengths and risk philosophies Significant Capital Deployed into In-force Transactions Successful Execution Transactions include in-force life, annuity, and l
Slide 84: Langhorne Re Expands the Solution Set
Langhorne Re Expands the Solution Set Natural extension of RGA skills and capabilities Langhorne Re provides a platform to invest in larger blocks of attractive business Expected to generate long-term fees from providing origination, risk management, and administrative services Increases relevance t
Slide 85: Vision for the Future
Vision for the Future Regulatory, accounting, and economic changes drive continued need for solutions Opportunities to deploy capital into attractive blocks expected to continue Strong client relationships, strong counterparty, seasoned expertise, and innovative culture create advantages Combination
Slide 86: Financial Overview
Financial Overview Todd Larson Senior Executive Vice President and Chief Financial Officer
Slide 87: Key Messages
Attractive financial prospects Attractive operating model Strong balance sheet and well-diversified earnings profile Intermediate guidance unchanged Key Messages Proven strategy, proven execution Strong financial track record Consistent book value growth Effective capital management Well-positioned
Slide 88: Experienced Team and Deep Bench Strength
Experienced Team and Deep Bench Strength Years of Experience Industry1 RGA2 Todd Larson, SEVP, Chief Financial Officer 25 24 John Hayden, EVP, Controller 30 23 William Hutton, EVP, General Counsel and Secretary 21 21 Jim Kellett, EVP, Valuation & Financial Analysis 35 11 Brian Haynes, SVP, Corporate
Slide 89: Proven Strategy, Proven Results
Proven Strategy, Proven Results EPS Growth Consistent growth from diversified global platform Strong track record Earnings Quality High-quality earnings Less sensitive to financial markets Capital Strategy Balanced approach Maximize return opportunities Book Value Growth Attractive operating model S
Slide 90: Strong Financial Track Record
Adjusted Operating ROE1 Favorable results despite lower interest rates and weak foreign currencies Global platform and capital strategy deliver consistent returns Strong Financial Track Record Adjusted Operating Revenues1 Global platform provides a diversified source of revenues Demonstrated growth
Slide 91: Strategy Execution Drives Book Value Per Share Growth
Strategy Execution Drives Book Value Per Share Growth Strong, consistent growth over varying time periods Long-term results deliver strong track record Investors recognize value in RGA Stock price generally follows growth in BVPS ex-AOCI over time 12.3% 5-Year CAGR 12.6% 5-Year CAGR 1 1 Periods prio
Slide 92: Book Value Growth Among U.S. Life and Health Group
Book Value Growth Among U.S. Life and Health Group Strong Growth Strong book value growth despite headwinds Strategy is working RGA has delivered strong growth following the financial crisis Consistent book value growth over the long term Book value per share ex-AOCI1, annualized returns 1 Please re
Slide 93: Effective Capital Management
Excess Capital Maintain buffer of $300-$500 million for consolidated RGA Willing to go below the buffer for the right opportunity Effective Capital Management Balanced Capital Management Appropriate level of capital available at operating legal entities, holding company, consolidated level Efficient
Slide 94: Excess Capital Deployed
Excess Capital Deployed Consistent growth in shareholder dividends Timing of in-force block transactions can be lumpy, but RGA has been successful over time Efficient Use of Capital Excess Capital Strong net income generation Regularly deploying capital back into the business Regular return to share
Slide 95: Consistently Increasing Shareholder Dividends
Total Payout Ratio2 Increased share buybacks in 2018 Balanced with in-force transaction opportunities Consistently Increasing Shareholder Dividends Shareholder Dividends Consistent growth over time Regular return to shareholders Dividend Payout Ratio1 History of increasing dividend each year Approac
Slide 96: RGA Produces High-Quality Earnings
Consistent Over Long and Short Term RGA’s average over a three-year period is 104%, and is 102% over a five-year period RGA Produces High-Quality Earnings High Ranking Relative to Peers Investment-related gains and losses, embedded derivatives, and other “below-the-line” items equalize over time Low
Slide 97: Well-Positioned With Financial Strength
Well-Positioned With Financial Strength Attractive Operating Model Global platform is balanced and diversified Appropriate capital structure Strong credit ratings Balance sheet strength Enterprise Risk Management (ERM) Framework Strong risk culture Investment Portfolio Conventional High-quality inve
Slide 98: Balanced Global Platform
Balanced Global Platform Deliberate build-out of RGA’s global platform over 25-plus years Selective on opportunities to ensure the right fit for RGA Global Platform Delivers Balance and Diversity Consistently Delivering Global mix of business reduces volatility Diversified by geography and by produc
Slide 99: Appropriate Capital Structure
Leverage Ratios Leverage ratios within our targeted ranges 1Q19 proforma for May debt issuance of $600 million and retirement of $400 million (net $200 million debt increase) Appropriate Capital Structure Financial Strength Ratings Strong ratings from rating agencies with stable outlook Total Capita
Slide 100: Investment Portfolio Is Conventional
December 31, 2018 Total cash and invested assets $56.1 B Investment grade bonds 68.1% Corporate 40.0% Government 18.4% Structured 9.7% High-yield bonds 3.3% Corporate 2.8% Government 0.4% Structured 0.1% Equity securities 0.2% Mortgage loans on real estate 8.9% Policy loans 2.4% Funds withheld at in
Slide 101: BBB Exposure
BBB Exposure RGA invests in BBB securities to fulfill investment objectives Smaller exposure compared to peers Investment Portfolio Conventional Portfolio We see less value in public BBB-rated and below investment grade sectors Rating Distribution Average credit rating is single ‘A’ New money alloca
Slide 102: Stable Liability Profile
Stable Liability Profile Optionality Profile Lower liquidity risk due to liability profile No policyholder behavior risk Locked-in longevity in payout Very low policyholder behavior risk Mortality, Morbidity, LTC, BOLI Lower policyholder behavior risk Fixed and indexed annuity business with: Higher
Slide 103: Proactive Risk Management
Proactive Risk Management Leverage ERM capabilities and risk analysis into actionable decisions Regular reporting and metrics to ensure early identification, assessment, and management of emerging issues Continuous improvement to keep pace with new opportunities Enterprise Risk Management Robust ERM
Slide 104: Attractive Financial Prospects
Adjusted Operating ROE Potential positive influences Higher interest rates Weaker U.S. dollar Growth of international businesses Execution of in-force blocks Effective capital management Attractive Financial Prospects Long-Term Value Creation Attractive operating model Balance and diversity of profi
Slide 105: Vision for the Future
Vision for the Future Continue to deliver strong financial results Invest in new initiatives and developing new services Well-positioned to take advantage of in-force block and other transaction opportunities Effective capital management Continue attractive growth of book value Agenda | Introduction
Slide 106: Appendix: Reconciliations of Non-GAAP Measures
Appendix Reconciliations of Non-GAAP Measures
Slide 107: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Agenda | Introduction and Overview | Geographic Overview | RGAX | Global Financial Solutions | Financial Overview | Appendix
Slide 108: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Agenda | Introduction and Overview | Geographic Overview | RGAX | Global Financial Solutions | Financial Overview | Appendix
Slide 109: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Agenda | Introduction and Overview | Geographic Overview | RGAX | Global Financial Solutions | Financial Overview | Appendix
Slide 110: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Agenda | Introduction and Overview | Geographic Overview | RGAX | Global Financial Solutions | Financial Overview | Appendix
Slide 111: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Agenda | Introduction and Overview | Geographic Overview | RGAX | Global Financial Solutions | Financial Overview | Appendix
Slide 112: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Agenda | Introduction and Overview | Geographic Overview | RGAX | Global Financial Solutions | Financial Overview | Appendix
Slide 113: Slide 113
Reinsurance Group of America — Investor Day (June 2019) on 6ix