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Reinsurance Group's Q4 Earnings Miss Estimates, Revenues Beat
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Reinsurance Group of America, Incorporated (RGA - Free Report) reported fourth-quarter 2024 adjusted operating earnings of $4.99 per share, which missed the Zacks Consensus Estimate by 4.8%. The bottom line increased 5.5% from the year-ago quarter’s figure. Net foreign currency fluctuations had a favorable effect of 7 cents per share on adjusted operating income.
Reinsurance Group witnessed solid performance in the U.S. and Latin America and Canada segments, offset by soft results in the and Asia/Pacific and Europe, Middle East and Africa (EMEA) segments.
The quarter benefited from strong momentum in organic business activity in the traditional business.
RGA's operating revenues of $5.5 billion beat the Zacks Consensus Estimate by 0.5%. The top line also improved 6.3% year over year due to higher net premiums and net investment income.
Reinsurance Group of America, Incorporated Price, Consensus and EPS Surprise
Net premiums of $4.2 billion rose 1.2% year over year.
Investment income increased 24% from the prior-year quarter to $1.2 billion on higher average invested assets. The average investment yield decreased to 4.83% from 4.86% in the year-ago quarter, reflecting higher investment expenses and lower variable investment income, partially offset by the favorable impacts from new money rates exceeding portfolio yields.
Total benefits and expenses at Reinsurance Group increased 3.8% year over year to $5 billion on higher claims and other policy benefits, interest credited, policy acquisition costs and other insurance expenses, other operating expenses and interest expense.
Quarterly Segment Update
U.S. and Latin America: Total pre-tax adjusted operating income was $227 million in the quarter under discussion, which increased 80.1% year over year.
The Traditional segment reported a pre-tax adjusted operating income of $151 million, which increased more than six-fold year over year, reflecting favorable impacts of in-force management actions, partially offset by unfavorable Group experience. Net premiums rose 7% from the year-ago quarter to $2 billion.
The Financial Solutions segment’s pre-tax adjusted operating income of $76 million decreased 24.8% year over year due to the continued runoff of existing annuity business and the earnings emergence from new transactions.
Canada: Total pre-tax adjusted operating income increased 185% year over year to $40 million.
The Traditional segment’s pre-tax adjusted operating income surged 60% year over year to $32 million. Net premiums increased 7.1% to $333 million. Foreign currency exchange rates had an adverse effect on net premiums of $10 million for the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income increased 33.3% year over year to $8 million. Foreign currency exchange rates had an adverse effect of $1 million on pre-tax adjusted operating income.
EMEA: Total pre-tax adjusted operating income was $107 million, down 10.9% year over year.
Pre-tax adjusted operating loss of the traditional segment was $11 million, up 37.5% year over year. Premiums increased 5.9% to $488 million in the quarter. Foreign currency exchange rates had a favorable effect on net premiums of $8 million for the quarter.
Financial Solutions pre-tax adjusted operating income decreased 14.3% year over year to $96 million. Foreign currency exchange rates had a favorable effect of $1 million on pre-tax adjusted operating income.
Asia/Pacific: Total pre-tax adjusted operating income was $128 million, which decreased 6.6% from the year-ago quarter.
The Traditional segment’s pre-tax adjusted operating income was $63 million, which increased 16.7% from the year-ago quarter. Foreign currency exchange rates had a favorable effect of $9 million on pre-tax adjusted operating income. Premiums increased 17.9% to $834 million in the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income decreased 1.5% to $66 million. Foreign currency exchange rates had a favorable effect of $6 million on pre-tax adjusted operating income. Premiums increased 40.4% to $66 million in the quarter.
Corporate and Other: Pre-tax adjusted operating loss was $71 million, wider than the year-ago quarter’s loss of $23 million. The higher loss was primarily due to higher general expenses, primarily related to projects, initiatives, incentive compensation accrual true-up and higher financing costs.
Full-Year Highlights
Adjusted operating earnings were $22.57 per share, which beat the Zacks Consensus Estimate of $21.19. The bottom line increased 13.5% from the year-ago quarter’s figure.
Revenues of $22.9 billon increased 10% over 2023. Top line beat the consensus estimate of $22.4 billion.
Net premiums totaled $17.8 billion, an increase of 18.3% from 2023.
Financial Update
As of Dec. 31, 2024, the company had assets worth $118.72 billion, up 21.6% year over year.
As of Dec. 31, 2024, Reinsurance Group’s book value per share, excluding accumulated other comprehensive income, increased 5.1% year over year to $151.31.
The adjusted operating return on equity (excluding accumulated other comprehensive income) was 13.8%, which contracted 70 basis points year over year. RGA raised the adjusted operating ROE target to 13% to 15% to reflect the expectation of continued strong fundamentals of its business in the foreseeable future.
Capital Deployment
RGA deployed capital of $1.676 billion into in-force block transactions in 2024.
The board of directors declared a quarterly dividend of 89 cents. The dividend will be paid out on March 14 to shareholders of record as of Feb. 18.
Voya Financial, Inc. (VOYA - Free Report) reported fourth-quarter 2024 adjusted operating earnings of $1.50 per share, which beat the Zacks Consensus Estimate by 111.3%. The bottom line decreased 23.8% year over year. The decline was due to higher loss ratios in Stop Loss in Health Solutions and lower spread-based assets in Wealth Solutions. The decline was partially offset by growth in fee-based revenues in Wealth Solutions and Investment Management and higher alternative investment income.
Adjusted operating revenues amounted to $1.9 billion, which increased 12.5% year over year. As of Dec. 31, 2024, VOYA’s assets under management and assets under administration and advisement totaled $893.5 million.
Unum Group’s (UNM - Free Report) fourth-quarter 2024 operating net income of $2.03 per share missed the Zacks Consensus Estimate by 4.7%. The bottom line increased 13.4% year over year. Total operating revenues of Unum Group were $3.2 billion, up 2.5% year over year, driven by higher premium income, other income and improved net investment income. The top line missed the consensus estimate by 1.5%.
Premium increased 3.1% from the prior-year quarter to $2.6 billion, which matched the Zacks Consensus Estimate. UNM expects after-tax adjusted operating income per share to grow 8-12% in 2025. Core operations premium growth is expected between 4% and 7%.
Lincoln National Corporation (LNC - Free Report) reported fourth-quarter 2024 adjusted earnings per share of $1.91, which beat the Zacks Consensus Estimate by 9.8%. The bottom line advanced nearly 30% year over year. Adjusted operating revenues were $4.6 billion, which more than doubled year over year. However, the top line fell short of the consensus mark by 1%.
LNC’s estimated RBC ratio rose to more than 430% at fourth-quarter end. Insurance premiums totaled $1.59 billion, while the metric was recorded at a negative figure of $1.1 billion in the year-ago quarter. However, the metric was lower than the Zacks Consensus Estimate of $1.62 billion.
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Reinsurance Group's Q4 Earnings Miss Estimates, Revenues Beat
Reinsurance Group of America, Incorporated (RGA - Free Report) reported fourth-quarter 2024 adjusted operating earnings of $4.99 per share, which missed the Zacks Consensus Estimate by 4.8%. The bottom line increased 5.5% from the year-ago quarter’s figure. Net foreign currency fluctuations had a favorable effect of 7 cents per share on adjusted operating income.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Reinsurance Group witnessed solid performance in the U.S. and Latin America and Canada segments, offset by soft results in the and Asia/Pacific and Europe, Middle East and Africa (EMEA) segments.
The quarter benefited from strong momentum in organic business activity in the traditional business.
RGA's operating revenues of $5.5 billion beat the Zacks Consensus Estimate by 0.5%. The top line also improved 6.3% year over year due to higher net premiums and net investment income.
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
Net premiums of $4.2 billion rose 1.2% year over year.
Investment income increased 24% from the prior-year quarter to $1.2 billion on higher average invested assets. The average investment yield decreased to 4.83% from 4.86% in the year-ago quarter, reflecting higher investment expenses and lower variable investment income, partially offset by the favorable impacts from new money rates exceeding portfolio yields.
Total benefits and expenses at Reinsurance Group increased 3.8% year over year to $5 billion on higher claims and other policy benefits, interest credited, policy acquisition costs and other insurance expenses, other operating expenses and interest expense.
Quarterly Segment Update
U.S. and Latin America: Total pre-tax adjusted operating income was $227 million in the quarter under discussion, which increased 80.1% year over year.
The Traditional segment reported a pre-tax adjusted operating income of $151 million, which increased more than six-fold year over year, reflecting favorable impacts of in-force management actions, partially offset by unfavorable Group experience. Net premiums rose 7% from the year-ago quarter to $2 billion.
The Financial Solutions segment’s pre-tax adjusted operating income of $76 million decreased 24.8% year over year due to the continued runoff of existing annuity business and the earnings emergence from new transactions.
Canada: Total pre-tax adjusted operating income increased 185% year over year to $40 million.
The Traditional segment’s pre-tax adjusted operating income surged 60% year over year to $32 million. Net premiums increased 7.1% to $333 million. Foreign currency exchange rates had an adverse effect on net premiums of $10 million for the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income increased 33.3% year over year to $8 million. Foreign currency exchange rates had an adverse effect of $1 million on pre-tax adjusted operating income.
EMEA: Total pre-tax adjusted operating income was $107 million, down 10.9% year over year.
Pre-tax adjusted operating loss of the traditional segment was $11 million, up 37.5% year over year. Premiums increased 5.9% to $488 million in the quarter. Foreign currency exchange rates had a favorable effect on net premiums of $8 million for the quarter.
Financial Solutions pre-tax adjusted operating income decreased 14.3% year over year to $96 million. Foreign currency exchange rates had a favorable effect of $1 million on pre-tax adjusted operating income.
Asia/Pacific: Total pre-tax adjusted operating income was $128 million, which decreased 6.6% from the year-ago quarter.
The Traditional segment’s pre-tax adjusted operating income was $63 million, which increased 16.7% from the year-ago quarter. Foreign currency exchange rates had a favorable effect of $9 million on pre-tax adjusted operating income. Premiums increased 17.9% to $834 million in the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income decreased 1.5% to $66 million. Foreign currency exchange rates had a favorable effect of $6 million on pre-tax adjusted operating income. Premiums increased 40.4% to $66 million in the quarter.
Corporate and Other: Pre-tax adjusted operating loss was $71 million, wider than the year-ago quarter’s loss of $23 million. The higher loss was primarily due to higher general expenses, primarily related to projects, initiatives, incentive compensation accrual true-up and higher financing costs.
Full-Year Highlights
Adjusted operating earnings were $22.57 per share, which beat the Zacks Consensus Estimate of $21.19. The bottom line increased 13.5% from the year-ago quarter’s figure.
Revenues of $22.9 billon increased 10% over 2023. Top line beat the consensus estimate of $22.4 billion.
Net premiums totaled $17.8 billion, an increase of 18.3% from 2023.
Financial Update
As of Dec. 31, 2024, the company had assets worth $118.72 billion, up 21.6% year over year.
As of Dec. 31, 2024, Reinsurance Group’s book value per share, excluding accumulated other comprehensive income, increased 5.1% year over year to $151.31.
The adjusted operating return on equity (excluding accumulated other comprehensive income) was 13.8%, which contracted 70 basis points year over year. RGA raised the adjusted operating ROE target to 13% to 15% to reflect the expectation of continued strong fundamentals of its business in the foreseeable future.
Capital Deployment
RGA deployed capital of $1.676 billion into in-force block transactions in 2024.
The board of directors declared a quarterly dividend of 89 cents. The dividend will be paid out on March 14 to shareholders of record as of Feb. 18.
Zacks Rank
RGA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Voya Financial, Inc. (VOYA - Free Report) reported fourth-quarter 2024 adjusted operating earnings of $1.50 per share, which beat the Zacks Consensus Estimate by 111.3%. The bottom line decreased 23.8% year over year. The decline was due to higher loss ratios in Stop Loss in Health Solutions and lower spread-based assets in Wealth Solutions. The decline was partially offset by growth in fee-based revenues in Wealth Solutions and Investment Management and higher alternative investment income.
Adjusted operating revenues amounted to $1.9 billion, which increased 12.5% year over year. As of Dec. 31, 2024, VOYA’s assets under management and assets under administration and advisement totaled $893.5 million.
Unum Group’s (UNM - Free Report) fourth-quarter 2024 operating net income of $2.03 per share missed the Zacks Consensus Estimate by 4.7%. The bottom line increased 13.4% year over year. Total operating revenues of Unum Group were $3.2 billion, up 2.5% year over year, driven by higher premium income, other income and improved net investment income. The top line missed the consensus estimate by 1.5%.
Premium increased 3.1% from the prior-year quarter to $2.6 billion, which matched the Zacks Consensus Estimate. UNM expects after-tax adjusted operating income per share to grow 8-12% in 2025. Core operations premium growth is expected between 4% and 7%.
Lincoln National Corporation (LNC - Free Report) reported fourth-quarter 2024 adjusted earnings per share of $1.91, which beat the Zacks Consensus Estimate by 9.8%. The bottom line advanced nearly 30% year over year. Adjusted operating revenues were $4.6 billion, which more than doubled year over year. However, the top line fell short of the consensus mark by 1%.
LNC’s estimated RBC ratio rose to more than 430% at fourth-quarter end. Insurance premiums totaled $1.59 billion, while the metric was recorded at a negative figure of $1.1 billion in the year-ago quarter. However, the metric was lower than the Zacks Consensus Estimate of $1.62 billion.