RGA reports higher revenues in 2021 as COVID-19 claims decline
Global life reinsurance carrier Reinsurance Group of America, Incorporated (RGA) reported higher, year-over-year net income in second quarter and first half of the year, as premiums rose 11% to $ 3.1 billion.
Overall, RGA reported net income of $ 344 million for the second quarter of 2021, up from $ 158 million a year earlier, as adjusted operating income fell from $ 87 million to $ 274 million.
Year-to-date, RGA reported second quarter 2021 net income of $ 483 million compared to $ 70 million in first quarter 2020, while first half adjusted operating income also improved by a year over year, from $ 176 million to $ 190 million.
In the second quarter of 2021, consolidated net premiums increased 11% and included a favorable net foreign exchange impact of $ 124 million.
The COVID-19 pandemic continued to impact RGA during the second quarter, resulting in impacts estimated at around $ 130 million.
RGA explains that this estimate includes mortality and morbidity claims of around $ 168 million, with offsetting longevity impacts of around $ 38 million.
“We are very pleased with the strong performance of the company in the second quarter, as the contribution to earnings was broadly distributed by geography and industry, the impact of COVID-19 was significantly reduced and our results d investment have been very favorable. In particular, our US Traditional segment had a very good quarter, and our GFS business performed extremely well in all of our regions and business lines. The growth in reported premiums has been very good, organic growth has been solid and the new business momentum has accelerated and is encouraging. We have deployed approximately $ 200 million of capital in active transactions, and the pipeline is active, ”said Anna Manning, President and CEO (CEO) of RGA.
“Our balance sheet remains strong and we ended the quarter with approximately $ 1.2 billion in excess capital. We expect our results to continue to reflect some additional claims related to COVID-19, but at manageable and declining levels. We expect our underlying earnings capacity to be sustained and to continue to deliver attractive financial results over time. “
The life reinsurer’s COVID-19 impact has declined from the $ 474 million seen in the first quarter of 2021 and also the $ 300 million in pandemic claims seen a year earlier.
In the company’s business line in the United States and Latin America, claims related to COVID-19 totaled $ 57 million. This part of the business posted a net profit of $ 135 million in the second quarter of 2021 compared to a net loss of $ 158 million a year earlier. While net premiums have gone from $ 1.45 billion to $ 1.58 billion.
In Canada, COVID-19 related claims amounted to approximately $ 21 million, while the non-COVID experience was favorable for RGA in the second quarter of 2021. Pre-tax profit from RGA’s operations in Canada edged down declined year-over-year, from $ 44 million in the second quarter of 2020 to $ 32 million this year. While net premiums have gone from $ 254 million to $ 301 million.
In Europe, the Middle East and Africa (EMEA), RGA announced an estimated COVID-19 impact of around $ 35 million, mostly from the UK and South Africa. This segment fell to a loss of $ 12 million in the second quarter of 2021 from a profit of $ 16 million a year earlier, while net premiums rose to $ 433 million.
In Asia-Pacific, RGA witnessed COVID-19 claims estimated at $ 55 million in the second quarter of 2021, of which $ 51 million came from India. This segment recorded a loss of $ 12 million for the second quarter of 2021 compared to a gain of $ 47 million a year earlier, while net premiums edged up to $ 616 million.