RGA tops Q3 profit estimates as earnings reach $8.49

Reinsurance Group of America (RGA) topped third-quarter estimates, with adjusted operating income of $8.49 per diluted share against the $6.98 consensus.

Shares were little changed at 9:48 a.m. ET, from a $261.96 close.

Net income available to RGA shareholders was $456 million, against $253 million a year earlier.

Here's how the company did:

• Adjusted operating income per diluted share: $8.49, vs. $4.66 a year earlier and $6.98 expected
• Total revenue: $7.55 billion vs. $6.20 billion a year earlier and $6.75 billion expected
• Net premiums: $5.35 billion vs. $4.28 billion a year earlier
• Net income per diluted share: $6.92 vs. $3.81 a year earlier

Net premiums rose 25.0% to $5.35 billion, including about $800 million from single premium pension risk transfer transactions that contributed nothing a year earlier.

Investment income, excluding spread-based businesses, rose 17.5% on higher variable income and accretive new money rates. The average investment yield was 5.26%, compared with 4.73% a year earlier.

Segment results

U.S. and Latin America Traditional adjusted operating income before taxes was $176 million, up from $136 million. Results excluding notable items rose on more favorable claims experience and in-force actions executed in prior periods.

Financial Solutions in the same region reported $119 million, against $100 million a year earlier, with results excluding notable items rising primarily on variable investment income.

Europe, Middle East and Africa Traditional swung to $21 million from a loss of $192 million a year earlier. The segment absorbed $31 million of unfavorable impacts from the 2026 annual actuarial assumption review, classed as notable items.

EMEA Financial Solutions rose to $151 million from $140 million, primarily on new business and higher investment income.

Asia Pacific Traditional adjusted operating income before taxes fell to $119 million from $138 million. Results excluding notable items decreased on less favorable claims experience.

Asia Pacific Financial Solutions rose to $92 million from $71 million, on new business growth and variable investment income. Canada Traditional rose to $63 million from $43 million.

Corporate and Other posted a loss of $22 million, against a $58 million loss a year earlier.

Costs, charges and tax

The annual actuarial assumption review had no net impact on consolidated pre-tax adjusted operating income.

The effective tax rate was 26.8% on pre-tax income, above the expected range of 22% to 23%, reflecting the jurisdictional mix of earnings and a higher valuation allowance.

Net foreign currency fluctuations had an unfavorable effect of 11 cents per diluted share on net income available to RGA shareholders and 15 cents per diluted share on adjusted operating income, both compared with the prior-year quarter.

Capital returns

RGA returned $139 million to shareholders in the quarter, including $75 million in share repurchases and $64 million in dividends paid.

The board declared a regular quarterly dividend of 98 cents per share, payable Dec. 1 to shareholders of record as of Nov. 17.

President and Chief Executive Officer Tony Cheng said the company continued “to maintain our disciplined approach to capital deployment.”

Book value per share was $178.89 at the end of the quarter, compared with $197.52 a year earlier. Total assets were $169.5 billion as of Sept. 30.