Reinsurance Group of America NYSE: RGA reported a record operating quarter in the second quarter of 2026, supported by investment income, recent new business, and modestly favorable claims experience across its global operations.
President and CEO Tony Cheng said results were strong across regions and business lines, with contributions from both biometric underwriting and asset management. The company deployed capital in in-force transactions and organic flow business across the U.S., Asia Pacific, and Europe, the Middle East and Africa, while maintaining its return standards.
“We were selective, declining opportunities that did not fit our risk-return profile,” Cheng said. “For the new business closed both year-to-date and for the quarter, the expected returns met or exceeded our targets.”
Record operating income and investment performance
New CFO Laura Cockrill said RGA generated pretax adjusted operating income of $761 million, or $8.89 per share after tax. Its trailing-12-month adjusted operating return on equity was 18.4%, excluding accumulated other comprehensive income and notable items.
Investment results were a major contributor. The yield on RGA’s core investment portfolio, excluding variable investment income, was 4.96% during the quarter. Its new-money rate increased to 6.02%, reflecting higher market yields and a greater allocation to investment-grade private assets.
Annualized returns on variable investment income were 15% for the quarter and 11% year to date, above the company’s 7% planned return for 2026. Chief Investment Officer Jayson Bronchetti said the results were driven by realized gains and broad-based outperformance among alternative equity investments.
RGA maintained its 7% variable investment income target for the remainder of the year but said strong results through the first half increased its confidence that it could meet or potentially exceed that level.
Regional results and claims trends
In the U.S. and Latin America, traditional business results benefited from favorable individual life claims experience and strong variable investment income. U.S. group claims were in line with the company’s updated expectations, while repricing actions were on track to produce solid results through 2026, Cockrill said.
Financial Solutions results in the U.S. were favorable due to variable investment income, in-force actions, and longevity experience. Cockrill said the Equitable transaction remained on track with its expected financial results, with claims experience on the acquired block in line with expectations since the transaction closed.
In Canada, traditional earnings met expectations and Financial Solutions benefited from strong variable investment income. EMEA traditional results were favorable due to one-time items, while its Financial Solutions results were aided by higher investment income. Asia Pacific delivered another healthy traditional quarter, driven by new business, while Financial Solutions benefited from favorable variable investment income and new-business contributions.
On an economic basis, claims were $31 million better than expectations, producing a $14 million benefit to current-period earnings. Since 2023, economic claims experience has been favorable by $375 million, primarily reflecting U.S. individual life, Asia traditional business, and Financial Solutions.
Jonathan Porter, executive vice president and global chief risk officer, said U.S. individual mortality experience was in line with expectations during the quarter, including large claims. Year-to-date U.S. individual claims experience was favorable by about $70 million, he said.
Premium growth and in-force management
Traditional premiums increased 2.2%, or 0.9% on a constant-currency basis, as in-force management actions affected reported growth. Total premiums excluding pension risk transfer business rose 10.5% year to date, or 9.3% in constant currency.
Cockrill said that excluding nonrecurring in-force actions, U.S. traditional and total traditional premiums grew 3% year to date. Total U.S. premiums excluding pension risk transfer growth rose about 8% for both the quarter and year to date.
Cheng highlighted growth in the company’s Strategic Underwriting Programs, saying volumes were on track to double from the prior year. He said the programs can create direct reinsurance opportunities and lead to broader client relationships, including in-force transactions.
RGA also continued managing its exposure to “capped cohorts” in the U.S. The company said such exposure has declined 25% since it adopted long-duration targeted improvements accounting standards about three and a half years ago. Cockrill said the reduction resulted in part from in-force management initiatives, as well as natural runoff and growth in newer business.
Capital deployment, returns and outlook
RGA deployed $158 million into in-force transactions during the quarter and nearly $500 million year to date. It returned $111 million to shareholders, including $50 million in share repurchases and $61 million in dividends. The company also announced a 5.4% dividend increase to be paid in the third quarter.
Total buybacks reached $225 million since RGA resumed its repurchase program in the third quarter of the prior year. RGA ended the quarter with approximately $2.2 billion of excess capital and expects to use $400 million of excess capital to pay down debt in September.
Book value per share, excluding AOCI and B36 effects, rose to $174.11. Cockrill said this represented a 10.1% compound growth rate since the start of 2021.
Management reiterated its intermediate-term targets of 8% to 10% earnings-per-share growth, a 13% to 15% return on equity, and a 20% to 30% payout ratio. Cheng said the company’s pipeline remained healthy and diversified, though transaction timing can vary by quarter.
Regarding legacy universal life secondary guarantee and long-term care liabilities, Cheng said RGA would remain “very selective and disciplined.” Those liabilities account for less than 10% of RGA’s balance sheet, and the company expects that proportion to remain at that level going forward.
About Reinsurance Group of America (NYSE:RGA)
Reinsurance Group of America, Incorporated NYSE: RGA is a leading global provider of life and health reinsurance solutions. Headquartered in St. Louis, Missouri, RGA partners with primary insurance companies to help them manage risk, improve capital efficiency and develop innovative products. The company's offerings span traditional risk transfer, financial solutions and facultative underwriting services, enabling clients to address a wide range of mortality, longevity, morbidity and critical-illness exposures.
RGA's product suite includes life reinsurance, living benefits reinsurance, structured reinsurance and financial solutions that support product innovation and capital management.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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