Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Q4 2020 Earnings Presentation
24 slides from Reinsurance Group Of America's earnings presentation, Feb 9, 2021
Slide 1: 4Q20 Earnings Presentation
The security of experience. The power of innovation. 4Q20 Earnings Presentation Reinsurance Group of America, Incorporated February 8, 2021
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: Key Messages
Key Messages RGA is extremely proud of its employees, whose perseverance, dedication, and flexibility have allowed RGA to fulfill promises and support clients during these very difficult times. The company’s operations continue to run smoothly and remain well-positioned for the long-term. Results De
Slide 5: Estimated COVID-19 Impacts
Estimated COVID-19 Impacts Mortality claim costs are at the low end of Estimated Pre-tax COVID-19 Impacts1 4Q20 20202 RGA’s previously disclosed claim cost estimates relative to population deaths Mortality and Morbidity $(300) $(720) Continue to see lower insured population mortality relative to
Slide 6: Fourth Quarter Results
Fourth Quarter Results Pre-tax Adjusted Operating Adjusted Operating EPS1 Trailing 12 Month Adjusted Income1 Adjusted operating income of $81 Operating ROE1 Solid results, absorbing million Ongoing headwinds from approximately $259 million of Effective tax rate was 18.3% on COVID-19, low int
Slide 7: Full Year Results
Full Year Results Pre-tax Adjusted Operating Adjusted Operating EPS1 Trailing 12 Month Adjusted Income1 Adjusted operating income of Operating ROE1 Solid results, absorbing $496 million Ongoing headwinds from approximately $590 million of Effective tax rate was 20.9% on COVID-19, low interes
Slide 8: Fourth Quarter Results by Segment
Fourth Quarter Results by Segment Pre-tax Adjusted Operating Income U.S. and Latin America Traditional results reflect 4Q20 4Q19 estimated excess individual mortality claim costs of (Loss)1 approximately $230 million due to COVID-19; Individual Health and U.S. Group results were U.S. and Latin Ame
Slide 9: Full Year Results by Segment
Full Year Results by Segment Pre-tax Adjusted Operating Income Consolidated results for the year were solid, 2020 2019 (Loss)2 absorbing approximately $590 million of estimated COVID-19-related impacts1 U.S. and Latin America Traditional $(287) $283 Strong results from many businesses, despite U
Slide 10: U.S. Individual Mortality
U.S. Individual Mortality Favorable Q4 mortality, excluding COVID-19 Excluding COVID-19, overall favorable experience of approximately $30 million driven by lower large claims Approximately $230 million of estimated claim costs, including $100 million of claims incurred but not reported (IBNR),
Slide 11: Investments Summary
Investments Summary Our investment strategy strives to balance risk and return to build a portfolio to weather cycles; strong underwriting is foundational Investment portfolio credit performance continues to benefit from diligent selection; impairments remain below the low end of our previously
Slide 12: Non-Spread Investment Yield
Non-Spread Investment Yield1 Non-Spread Investment Yield1 New Money Rates2 Investment yield moved higher led by New money rate rose to 2.79% above average run rate for variable Purchase yields increased modestly, as we investment income took advantage of some spread sector and private market o
Slide 13: Capital and Liquidity
Capital and Liquidity Capital Leverage Ratios Ample Liquidity Available Strong balance sheet with a Leverage ratios within our targeted Continued to hold a high level of stable capital mix ranges liquidity throughout 2020 Excess capital position of $1.3 Pre-funded 2021 senior debt Access
Slide 14: COVID-19 Mortality Model Update
COVID-19 Mortality Model Update Aggregate COVID-19-attributed claim costs continue to be at the low end of our expected range based on levels of reported general population deaths – Continue to see lower insured population mortality relative to general population – U.S. accounted for over 80% of C
Slide 15: Consistent Execution Drives Track Record of Value Creation
Consistent Execution Drives Track Record of Value Creation Book value per share (ex-AOCI)1 total return growth2 15-Year 10.4% CAGR 10-Year 10.9% CAGR 5-Year 11.5% CAGR 3-Year 6.3% CAGR $132.33 $116.46 $83.23 $52.80 $34.06 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202
Slide 16: Outlook
Outlook Ongoing earnings power of the RGA franchise was demonstrated in 2020 and is intact for the future RGA has supported clients during COVID-19, reinforcing its position as a trusted and valued long-term partner COVID-19 has increased awareness and need for life insurance industry products
Slide 17: Appendix
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Slide 18: Diversified and High-Quality Portfolio
Diversified and High-Quality Portfolio Average portfolio credit rating: A 94.0% investment grade $75.8B Short-term, cash and cash equivalents 4.8%, up from 4.6% in Q3 CML average LTV 58.6% CLO book value $1.9 billion1, AA average credit quality (94.4% A and above) Diversification and str
Slide 19: Commercial Mortgage Loans (CML)
Commercial Mortgage Loans (CML) Team has managed through multiple real estate cycles; robust infrastructure to protect value in times of stress $5.9B Portfolio underwriting metrics provide significant downside support ‒ Loan to value of approximately 58%, significant borrower equity ahead of our
Slide 20: Pre-Tax Income (Loss) Reconciliation
Pre-Tax Income (Loss) Reconciliation Investment impairments have slowed due to $ in millions 1Q20 2Q20 3Q20 4Q20 2020 YTD various improvements in the financial Pre-tax income (loss) $ (96) 195 285 169 553 markets, while the allowance for commercial Investment-related mortgage loans and other impai
Slide 21: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP pre-tax income to pre-tax adjusted operating income In millions 4Q19 4Q20 2019 2020 U.S. & Latin America Traditional GAAP pre-tax income (loss) $ 85 $ (92) $ 265 $ (298) Capital (gains) losses, derivatives and other, net - - - - Change in M
Slide 22: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP pre-tax income to pre-tax adjusted operating income In millions 4Q19 4Q20 2019 2020 Asia Pacific Traditional GAAP pre-tax income $ 12 $ 25 $ 105 $ 174 Pre-tax adjusted operating income $ 12 $ 25 $ 105 $ 174 Asia Pacific Financial Solutions
Slide 23: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP stockholders' equity to stockholders' equity excluding AOCI In millions 2019 2020 GAAP stockholders' equity $ 11,602 $ 14,352 Less: Unrealized appreciation of securities 3,299 5,500 Less: Accumulated currency translation adjustments (92) (6
Slide 24: ©2021 RGA. All rights reserved.
©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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