Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Q2 2021 Earnings Presentation
21 slides from Reinsurance Group Of America's earnings presentation, Aug 4, 2021
Slide 1: 2Q21 Earnings Presentation
The security of experience. The power of innovation. 2Q21 Earnings Presentation Reinsurance Group of America, Incorporated August 3, 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’s Strong Performance Reinforces Significantly Reduced COVID-19 Impact; Underlying Earnings Power Sizeable Longevity Benefit Strong adjusted operating EPS of $4.001, which Q2 COVID-19 claim costs of approximately $168 includes estimated COVID-19 impacts of $1.442 per million dilu
Slide 5: Estimated COVID-19 Earnings Impacts
Estimated COVID-19 Earnings Impacts Estimated Pre-tax COVID-19 Prior COVID-19 impacts decreased in our large 2Q21 Impacts1 Periods2 markets, the U.S., Canada and the U.K., reflecting increased population vaccination Mortality and Morbidity $(168) $(1,144) levels and lower general population deaths
Slide 6: Second Quarter Results
Second Quarter Results Pre-tax Adjusted Operating Adjusted Operating EPS1 Trailing 12 Month Adjusted Income1 Estimated COVID-19 impacts2 of Operating ROE1 Results include $130 million of $1.443 per diluted share Estimated COVID-19 impacts2 of estimated COVID-19 impacts2 Effective tax rate of
Slide 7: Second Quarter Results by Segment
Second Quarter Results by Segment 2Q21 U.S. and Latin America Traditional results reflect lower Pre-tax Adjusted Operating Income 2Q21 COVID-19 2Q20 than expected COVID-19 claim costs, favorable (Loss)1 Impact2 Group/Individual Health results and higher variable investment income; non-COVID-19 ind
Slide 8: U.S. Individual Mortality
U.S. Individual Mortality COVID-19 impact lower than expected, non-COVID-19 experience in-line COVID-19 claim costs of approximately $45 million1 were below our expected range2, primarily due to lower average claim size Excluding COVID-19, mortality experience was in-line for the quarter and cum
Slide 9: Investments Summary
Investments Summary Our investment strategy balances risk and return to build a portfolio to weather cycles; strong underwriting is foundational Investment portfolio credit performance continues to benefit from diligent selection Net impairments and change in allowances contributed $8 million
Slide 10: Non-Spread Investment Yield
Non-Spread Investment Yield1 Non-Spread Investment Yield1 New Money Rates2 Variable investment income driven by New money rate rose to 3.50% in Q2 2021 unrealized and realized gains on limited ‒ Private asset production within USD assets partnerships and real estate joint venture overcame lower
Slide 11: 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 Q2 Excess capital position of $1.2 Retired 2021 senior debt maturity in
Slide 12: COVID-19 Mortality Model and Expectations
COVID-19 Mortality Model and Expectations COVID-19 mortality claim costs were down significantly from the prior quarter as general population deaths declined in our major markets – U.S. represented approximately 30% of COVID-19 mortality claim costs and were below our estimated range – U.K. and Ca
Slide 13: 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% CAGR3 10-Year 10.9% CAGR3 5-Year 11.4% CAGR3 3-Year 6.9% CAGR3 $138.29 $132.33 $116.46 $83.23 $52.80 $34.06 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2
Slide 14: Appendix
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Slide 15: Diversified, Resilient and High-Quality Portfolio
Diversified, Resilient and High-Quality Portfolio Average portfolio credit rating: A 93.9% investment grade $79.6B CML average LTV 57.9% CLO book value $2.0 billion1, AA average credit quality (89.8% A and above) Diversification and strong underwriting are core to our investment strategy
Slide 16: 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 Portfolio underwriting metrics provide significant downside $6.6B support ‒ Loan-to-value (<58%), significant borrower equity ahead of our investment ‒
Slide 17: Pre-Tax Income (Loss) Reconciliation
Pre-Tax Income (Loss) Reconciliation Investment impairments have slowed due to various 2Q21 2Q20 improvements in the financial markets; Company decreased its valuation allowance on its commercial mortgage loan Pre-tax income (loss)1 $ 482 195 portfolio to reflect the updated economic outlook from
Slide 18: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP pre-tax income to pre-tax adjusted operating income In millions 2Q20 2Q21 U.S. & Latin America Traditional GAAP pre-tax income (loss) $ (158) $ 135 1 Change in MV of embedded derivatives (7) (1) Pre-tax adjusted operating income $ (165) $ 1
Slide 19: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP pre-tax income to pre-tax adjusted operating income In millions 2Q20 2Q21 Asia Pacific Traditional GAAP pre-tax income $ 47 $ (12) Pre-tax adjusted operating income $ 47 $ (12) Asia Pacific Financial Solutions GAAP pre-tax income (loss) $ 2
Slide 20: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP stockholders' equity to stockholders' equity excluding AOCI In millions 2Q20 2Q21 GAAP stockholders' equity $ 12,553 $ 13,444 Less: Unrealized appreciation of securities 4,089 4,133 Less: Accumulated currency translation adjustments (210) (
Slide 21: ©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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