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Introduction & Market Context
Reinsurance Group of America, Incorporated (NYSE:RGA) presented its first quarter 2025 earnings results on May 2, 2025, showcasing continued earnings growth and strong return on equity. The company reported adjusted operating income of $5.66 per diluted share, excluding notable items, maintaining its trajectory of consistent performance in a competitive reinsurance landscape.
RGA’s stock closed at $187.31 on May 1, 2025, and traded at $186.94 in after-hours trading, showing minimal change after the earnings release. The company’s shares have traded in a 52-week range of $159.25 to $233.81, indicating significant volatility over the past year despite the stable operational performance highlighted in the presentation.
Quarterly Performance Highlights
RGA reported adjusted operating income of $5.66 per diluted share for Q1 2025, excluding notable items, continuing a pattern of steady growth from previous quarters. The company’s adjusted operating return on equity reached 15.0% for the trailing twelve months, exceeding its target range of 13-15%.
As shown in the following chart of quarterly adjusted operating EPS and ROE trends:
The company highlighted favorable biometric claims experience across all segments, which contributed significantly to the quarter’s strong results. Premium growth was robust, with traditional premiums increasing by 11.2% year-to-date on a constant currency basis.
The following chart illustrates RGA’s premium growth trajectory:
RGA’s biometric experience showed favorable results in Q1 2025, with underlying claims experience of $58 million and a financial impact of $196 million. This represents a significant improvement from Q4 2024, which saw negative underlying claims experience of -$52 million.
The biometric experience trends are visualized in this chart:
Segment Performance
RGA’s Q1 2025 results showed solid performance across most business segments. The U.S. and Latin America Traditional segment generated $140 million in adjusted operating income before taxes, while the APAC Traditional segment contributed $106 million. Financial Solutions segments also performed well, with EMEA Financial Solutions delivering $90 million.
The breakdown of results by segment provides insight into the geographic diversification of RGA’s business:
The Corporate and Other segment reported a loss of $70 million, partially offsetting gains in other areas. Overall, the company’s total adjusted operating income before taxes reached $485 million for the quarter.
Investment Portfolio and Results
RGA’s investment strategy continues to emphasize quality and disciplined management. The company reported assets under management of approximately $111 billion, with over 94% of fixed maturity securities rated investment-grade. The portfolio remains well-diversified across asset classes.
The composition of RGA’s investment portfolio is illustrated in the following chart:
The non-spread new money rate for Q1 was 6.39%, well above the portfolio yield, reflecting higher yields and increased private asset sourcing. This favorable rate environment has positively impacted investment returns.
As shown in the following chart of investment yields and new money rates:
The company’s commercial mortgage loan portfolio, totaling $9.3 billion, maintains strong metrics with a loan-to-value ratio of 59% and a debt service coverage ratio of 1.76x. Over 95% of these loans carry CM1 & CM2 NAIC ratings, indicating high quality.
Capital Position and Deployment
RGA reported a strong capital position with estimated excess capital of $1.9 billion and deployable capital of $1.3 billion. The company deployed $418 million in capital during the quarter, demonstrating its ability to identify and execute on strategic opportunities.
The following chart illustrates RGA’s book value per share growth, which has shown consistent upward momentum since 2007:
The company’s leverage ratios remain manageable and are expected to stay within targeted ranges. RGA issued $0.7 billion of subordinated debentures at favorable pricing during the quarter, further strengthening its capital structure.
RGA’s capital deployment strategy focuses on in-force transactions and shareholder returns through dividends and share repurchases. The company positions itself as a recognized leader in large and complex transactions, with a strong pipeline of potential deals supported by its significant deployable capital.
Forward-Looking Statements
Looking ahead, RGA expressed confidence in its strategic positioning and growth prospects. The company highlighted its global leadership, diversified platform, proactive risk management approach, and effective capital deployment strategy as key factors supporting long-term success.
Management emphasized that Q1 results provide a solid start to 2025, with strong operating performance, favorable biometric claims experience, and robust new business momentum. The company also announced a strategic transaction with subsidiaries of Equitable Holdings (NYSE:EQH), Inc., though specific details were limited in the presentation.
RGA’s management believes the company is well-positioned for continued success, leveraging its global presence and expertise in complex reinsurance transactions. With significant deployable capital and a strong transaction pipeline, the company appears poised to pursue growth opportunities while maintaining financial discipline.
The presentation concluded with a summary of RGA’s positioning for the future:
While the presentation naturally emphasized positive aspects of performance, RGA’s Q1 2025 results demonstrate continued operational strength in a competitive reinsurance market, with solid earnings growth, strong capital position, and favorable claims experience across segments.
Full presentation:
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