Reinsurance Group Of America, Incorporated · NYSE:RGA
Reinsurance Group Of America — Q3 2020 Earnings Presentation
18 slides from Reinsurance Group Of America's earnings presentation, Nov 6, 2020
Slide 1: 3Q20 Earnings Presentation
The security of experience. The power of innovation. 3Q20 Earnings Presentation Reinsurance Group of America, Incorporated November 5, 2020
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 top priorities continue to be the health and well-being of our employees and supporting our clients and communities. Our operations continue to run smoothly, which is a testament to our team’s focus and dedication during these very difficult circumstances. Q3 2020 Results Demonstr
Slide 5: Third Quarter Results
Third Quarter Results Pre-tax Adjusted Operating Adjusted Operating EPS1 Trailing 12 Month Adjusted Income1 ▪ Adjusted operating income of Operating ROE1 ▪ Consolidated results were strong $239 million ▪ Ongoing headwinds from low even after absorbing COVID-19 ▪ Effective tax rate was 20.4% on inter
Slide 6: Results by Segment
Results by Segment ▪ U.S. and Latin America Traditional results reflect excess Pre-tax Adjusted Operating Income (Loss)1 3Q20 3Q19 individual mortality claims and lower variable investment income; Individual Health and U.S. Group results, in total, were slightly ahead of our expectations U.S. and La
Slide 7: U.S. Individual Mortality
U.S. Individual Mortality Favorable Q3 mortality, excluding COVID-19 ▪ $60 million unfavorable mortality including US Population Excess Deaths COVID-19 25,000 100% 90% CDC Weekly Excess Deaths ▪ Approximately $100 million of excess claim 20,000 80% 70% costs attributed to COVID-19 based on known 15,
Slide 8: Investments Summary
Investments Summary ▪ Our investment strategy strives to balance risk and return to build a portfolio to weather cycles; strong underwriting is foundational ▪ Impairments tracking below the low end of our range – Q3 net impairments and change in allowances of approximately $5 million pre-tax ▪ Portf
Slide 9: Non-Spread Investment Yield
Non-Spread Investment Yield1 Non-Spread Investment Yield1 New Money Rates2 ▪ Lower investment yield, reflecting full ▪ New money rate was 2.53% in Q3 2020 quarter impact of higher cash balances ‒ Market yields were low throughout Q3 as from debt and equity issuances risk-free rates remained near his
Slide 10: 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 in Q3 ▪ Excess capital position of $1.5 ▪ Pre-funded 2021 senior note ▪ Access to $850 m
Slide 11: COVID-19 Mortality Model Update
COVID-19 Mortality Model Update ▪ COVID-19 attributed claim costs are 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 – Ongoing model refinements resulted in no material cha
Slide 12: Appendix
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Slide 13: Diversified and High-Quality Portfolio
Diversified and High-Quality Portfolio ▪ Average portfolio credit rating: A ▪ 94.8% investment grade $73.4B ▪ Short-term, cash and cash equivalents 4.6%, down from 6.1% in 2Q ▪ CML average LTV 58% ▪ CLO book value $1.8 billion1, AA average credit quality (94.3% A and above) ▪ We believe our BBB inve
Slide 14: Pre-Tax Income (Loss) Reconciliation
Pre-Tax Income (Loss) Reconciliation ▪ Investment impairments have slowed due to $ in millions 1Q20 2Q20 3Q20 3Q YTD various improvements in the financial Pre-tax income (loss) $ (96) 195 285 384 markets, while the allowance for commercial Investment-related mortgage loans and other impairments incr
Slide 15: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP pre-tax income to pre-tax adjusted operating income In millions 3Q19 3Q20 U.S. & Latin America Traditional GAAP pre-tax income (loss) $ 113 $ 14 Capital (gains) losses, derivatives and other, net - - 1 Change in MV of embedded derivatives 1
Slide 16: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP pre-tax income to pre-tax adjusted operating income In millions 3Q19 3Q20 Asia Pacific Traditional GAAP pre-tax income $ 22 $ 78 Pre-tax adjusted operating income $ 22 $ 78 Asia Pacific Financial Solutions GAAP pre-tax income (loss) $ 2 $ 1
Slide 17: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of GAAP stockholders' equity to stockholders' equity excluding AOCI In millions 3Q19 3Q20 GAAP stockholders' equity $ 11,524 $ 13,213 Less: Unrealized appreciation of securities 3,473 4,542 Less: Accumulated currency translation adjustments (157) (
Slide 18: ©2020 RGA. All rights reserved.
©2020 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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