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On Jan 9, we upgraded our recommendation on Reinsurance Group of America Inc. (RGA - Analyst Report) to Outperform from Neutral, reflecting the company’s strong performance in the first nine months of 2013. We also believe that the company will benefit from improving operating conditions in 2014.

Why the Upgrade?

Our improved outlook on this Zacks Rank #1 (Strong Buy) stock comes on the back of Reinsurance Group’s sturdy top and bottom-line performance across all operating segments. The company shows healthy signs of retaining this momentum going into 2014 as well.

Reinsurance Group holds a significant position in the U.S. and Canada. Further, the company is fully geared to maintain its competitive position in the North American reinsurance market by growing its Facultative Reinsurance, Automatic Reinsurance and In Force Block Reinsurance.

In a bid to maintain its market position, the company is also focusing on its underwriting standards, prompt response on quotes, competitive pricing as well as its capacity and flexibility to meet its customer needs.

Additionally, the company is growing its international operations to reap the benefits of diversification.  The company achieves superior stability through geographic operational diversity and a strategic mix of products and services.

Reinsurance Group also expects to benefit from an increase in interest rates anticipated this year.

Moreover, the ongoing execution of the company’s capital management strategy continues to enhance key profitability and return measures. The company carries an investment grade rating from leading rating agencies.  

Other Stocks to Consider

Other insurance stocks that warrant a look include Protective Life Corp. (PL - Analyst Report), Lincoln National Corp. (LNC - Analyst Report), Prudential Financial Inc. (PRU - Analyst Report). All these stocks carry a Zacks Rank #2 (Buy).

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