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Reinsurance Group (RGA) Q4 Earnings Miss, Revenues Top
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Reinsurance Group of America, Incorporated (RGA - Free Report) reported fourth-quarter 2021 adjusted operating loss of 56 cents per share against the Zacks Consensus Estimate of earnings of 83 cents per share. RGA had reported an operating income of $1.19 per share in the prior-year quarter. Higher COVID-19 mortality claims weighed on the performance.
Reinsurance Group of America, Incorporated Price, Consensus and EPS Surprise
Reinsurance Group's operating revenues of $4.3 billion increased 5.8% year over year. The top line beat the Zacks Consensus Estimate by 2.1%.
Net premiums of $3.4 billion rose 4.5% year over year.
Investment income increased 18%, reflecting a 5% higher average asset balance and strong variable investment income. Average investment yield increased 50 bps to 4.7% primarily due to higher variable investment income.
Total benefits and expenses at Reinsurance Group increased 8.3% year over year to $4.3 billion. Higher claims and other policy benefits, policy acquisition costs and other insurance expenses, interest expense and other operating expenses resulted in a cost increase.
Quarterly Segment Update
U.S. and Latin America: Total pre-tax adjusted operating loss was $17 million against an operating income of $4 million in the year-ago quarter.
The Traditional segment reported a pre-tax adjusted operating loss of $215 million, wider than $89 million loss incurred in the year-ago quarter due to higher mortality claims owing to COVID 19.
Net premiums rose 6.7% from the year-ago quarter to $1.7 billion.
The Asset Intensive segment’s pre-tax adjusted operating income increased 4.3% to $73 million, indicating favorable overall experience and variable investment income. The Capital Solutions business reported pre-tax adjusted operating income of $23 million, which increased 8.7% year over year.
Canada: Total pre-tax adjusted operating income decreased 21% to $34 million.
The Traditional segment’s pre-tax adjusted operating income decreased 17.7% to $29 million, due to unfavorable individual life mortality experience, including COVID-19 claim costs of $10 million.
Net premiums increased 14.1% to $324 million.
The Financial Solutions’ pre-tax adjusted operating income of $5 million declined 37.5%.
Europe, Middle East and Africa (EMEA): Total pre-tax adjusted operating income was $2 million, plunging from the year-ago income of $28 million.
The pre-tax adjusted operating loss of the traditional segment was $68 million, wider than $13 million loss incurred in the year-ago quarter, attributable to higher COVID-19 claim costs in South Africa and the U.K., as well as excess mortality claims in South Africa.
Premiums decreased 1.6% year over year to $435 million.
The Financial Solutions segment delivered pre-tax adjusted operating income of $70 million, up 70.7% from the year-ago quarter, indicating a favorable longevity experience and forex.
Asia/Pacific: Total pre-tax adjusted operating income was $86 million, down 79.2% year over year.
The Traditional segment’s pre-tax adjusted operating income was $57 million, which more than doubled year over year on favorable underwriting experience.
Premiums totaled $773 million, down 1.5% from the prior-year period.
The Financial Solutions segment’s pre-tax adjusted operating income increased 26.1% to $29 million, driven by favorable experience and growth in new business. Premiums increased 30% year over year to $52 million.
Corporate and Other: Pre-tax adjusted operating loss was $41 million, wider than the loss of $24 million incurred in the prior-year period.
Full-Year Update
Adjusted operating income totaled $1.13 per share, beating the Zacks Consensus Estimate of 83 cents per share. RGA had reported an operating income of $7.54 per share in the prior-year quarter.
Operating revenues of $16 billion increased 8% year over year. The top line was almost in line with the Zacks Consensus Estimate.
Financial Update
As of Dec 31, 2021, Reinsurance Group had assets worth $92.2 billion, up 8.9% from the level at 2020 end.
As of Dec 31, 2021, Reinsurance Group’s book value per share, excluding accumulated other comprehensive income, increased 5.4% year over year to $139.53.
Adjusted return on equity was 0.8%, reflecting a contraction of 490 basis points year over year.
Reinsurance Group exited the quarter with $1.3 billion in excess capital.
Capital Deployment
RGA deployed $106 million into in-force transactions and bought back shares worth $50 million.
The board of directors approved a dividend of 73 cents. The dividend will be paid out on Mar 1, 2022, to shareholders of record as of Feb 15.
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) and The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings while Lincoln National Corporation (LNC - Free Report) missed expectations.
Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.
Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.
Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.
Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.
Lincoln National’s fourth-quarter 2021 adjusted earnings of $1.56 per share missed the Zacks Consensus Estimate of $1.98 and declined from the prior-year figure of $1.78 per share. Adjusted operating revenues increased 2.4% year over year to $4.8 billion and beat the consensus mark of $4.7 billion.
Even though the ongoing pandemic is likely to continue hurting results, Lincoln National is expected to witness rising earnings per share on the back of its Spark Initiative.
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Reinsurance Group (RGA) Q4 Earnings Miss, Revenues Top
Reinsurance Group of America, Incorporated (RGA - Free Report) reported fourth-quarter 2021 adjusted operating loss of 56 cents per share against the Zacks Consensus Estimate of earnings of 83 cents per share. RGA had reported an operating income of $1.19 per share in the prior-year quarter. Higher COVID-19 mortality claims weighed on the performance.
Reinsurance Group of America, Incorporated Price, Consensus and EPS Surprise
Reinsurance Group of America, Incorporated price-consensus-eps-surprise-chart | Reinsurance Group of America, Incorporated Quote
Operational Update
Reinsurance Group's operating revenues of $4.3 billion increased 5.8% year over year. The top line beat the Zacks Consensus Estimate by 2.1%.
Net premiums of $3.4 billion rose 4.5% year over year.
Investment income increased 18%, reflecting a 5% higher average asset balance and strong variable investment income. Average investment yield increased 50 bps to 4.7% primarily due to higher variable investment income.
Total benefits and expenses at Reinsurance Group increased 8.3% year over year to $4.3 billion. Higher claims and other policy benefits, policy acquisition costs and other insurance expenses, interest expense and other operating expenses resulted in a cost increase.
Quarterly Segment Update
U.S. and Latin America: Total pre-tax adjusted operating loss was $17 million against an operating income of $4 million in the year-ago quarter.
The Traditional segment reported a pre-tax adjusted operating loss of $215 million, wider than $89 million loss incurred in the year-ago quarter due to higher mortality claims owing to COVID 19.
Net premiums rose 6.7% from the year-ago quarter to $1.7 billion.
The Asset Intensive segment’s pre-tax adjusted operating income increased 4.3% to $73 million, indicating favorable overall experience and variable investment income. The Capital Solutions business reported pre-tax adjusted operating income of $23 million, which increased 8.7% year over year.
Canada: Total pre-tax adjusted operating income decreased 21% to $34 million.
The Traditional segment’s pre-tax adjusted operating income decreased 17.7% to $29 million, due to unfavorable individual life mortality experience, including COVID-19 claim costs of $10 million.
Net premiums increased 14.1% to $324 million.
The Financial Solutions’ pre-tax adjusted operating income of $5 million declined 37.5%.
Europe, Middle East and Africa (EMEA): Total pre-tax adjusted operating income was $2 million, plunging from the year-ago income of $28 million.
The pre-tax adjusted operating loss of the traditional segment was $68 million, wider than $13 million loss incurred in the year-ago quarter, attributable to higher COVID-19 claim costs in South Africa and the U.K., as well as excess mortality claims in South Africa.
Premiums decreased 1.6% year over year to $435 million.
The Financial Solutions segment delivered pre-tax adjusted operating income of $70 million, up 70.7% from the year-ago quarter, indicating a favorable longevity experience and forex.
Asia/Pacific: Total pre-tax adjusted operating income was $86 million, down 79.2% year over year.
The Traditional segment’s pre-tax adjusted operating income was $57 million, which more than doubled year over year on favorable underwriting experience.
Premiums totaled $773 million, down 1.5% from the prior-year period.
The Financial Solutions segment’s pre-tax adjusted operating income increased 26.1% to $29 million, driven by favorable experience and growth in new business. Premiums increased 30% year over year to $52 million.
Corporate and Other: Pre-tax adjusted operating loss was $41 million, wider than the loss of $24 million incurred in the prior-year period.
Full-Year Update
Adjusted operating income totaled $1.13 per share, beating the Zacks Consensus Estimate of 83 cents per share. RGA had reported an operating income of $7.54 per share in the prior-year quarter.
Operating revenues of $16 billion increased 8% year over year. The top line was almost in line with the Zacks Consensus Estimate.
Financial Update
As of Dec 31, 2021, Reinsurance Group had assets worth $92.2 billion, up 8.9% from the level at 2020 end.
As of Dec 31, 2021, Reinsurance Group’s book value per share, excluding accumulated other comprehensive income, increased 5.4% year over year to $139.53.
Adjusted return on equity was 0.8%, reflecting a contraction of 490 basis points year over year.
Reinsurance Group exited the quarter with $1.3 billion in excess capital.
Capital Deployment
RGA deployed $106 million into in-force transactions and bought back shares worth $50 million.
The board of directors approved a dividend of 73 cents. The dividend will be paid out on Mar 1, 2022, to shareholders of record as of Feb 15.
Zacks Rank
Reinsurance Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) and The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings while Lincoln National Corporation (LNC - Free Report) missed expectations.
Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.
Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.
Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.
Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.
Lincoln National’s fourth-quarter 2021 adjusted earnings of $1.56 per share missed the Zacks Consensus Estimate of $1.98 and declined from the prior-year figure of $1.78 per share. Adjusted operating revenues increased 2.4% year over year to $4.8 billion and beat the consensus mark of $4.7 billion.
Even though the ongoing pandemic is likely to continue hurting results, Lincoln National is expected to witness rising earnings per share on the back of its Spark Initiative.