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Reinsurance Group Q3 Earnings Top Estimates on Solid Investment Income
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Key Takeaways
RGA's adjusted operating EPS rose 3.9% to $6.37, topping estimates by 9.8%.
Revenues grew 8% to $6.2B, driven by higher investment income and other revenues.
Asia/Pacific income nearly tripled, offsetting EMEA losses and Corporate headwinds.
Reinsurance Group of America, Incorporated (RGA - Free Report) reported third-quarter 2025 adjusted operating earnings of $6.37 per share, which beat the Zacks Consensus Estimate by 9.8%. Moreover, the bottom line increased 3.9% from the year-ago quarter’s figure.
Net foreign currency fluctuations had an adverse effect of 1 cent per diluted share on net income available to RGA shareholders, and a favorable effect of 4 cents per diluted share on adjusted operating income, both as compared with the prior year.
Reinsurance Group witnessed a solid performance in the Asia/Pacific, U.S. and Latin America and Canada segments, offset by the soft result in the Europe, Middle East and Africa (EMEA) and Corporate and Other segments.
Reinsurance Group of America, Incorporated Price, Consensus and EPS Surprise
RGA's operating revenues of $6.2 billion beat the Zacks Consensus Estimate by 0.9%. The top line also improved 8% year over year due to higher net investment income and other revenues.
Net premiums of $4.3 billion declined 2.5% year over year. Investment income increased 24% from the prior-year quarter to $1.5 billion. The average investment yield decreased to 4.73% in the third quarter from 5.08% in the prior-year period due to lower variable investment income.
Total benefits and expenses at Reinsurance Group increased 8.2% year over year to $5.9 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 $236 million in the quarter under discussion, which increased 48.4% year over year.
The Traditional segment reported a pre-tax adjusted operating income of $136 million, which increased 72% year over year. Net premiums declined 1.5% from the year-ago quarter to $1.9 billion.
The Financial Solutions segment’s pre-tax adjusted operating income increased 25% to $100 million, which reflected the earnings contribution from the Equitable transaction, which was closed in the third quarter, partially offset by lower variable investment income.
Canada: Total pre-tax adjusted operating income rose 47% year over year to $50 million.
The traditional segment’s pre-tax adjusted operating income increased 43% year over year to $43 million. Net premiums increased 3.8% to $326 million. Foreign currency exchange rates had an adverse effect on net premiums of $3 million for the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income increased 75% year over year to $7 million. Foreign currency exchange rates had an immaterial effect on adjusted operating income before taxes.
EMEA: Total pre-tax adjusted operating loss was $52 million against the year-ago quarter’s adjusted operating income of $68 million.
Pre-tax adjusted operating loss of the traditional segment was $192 million, wider than the year-ago quarter’s loss of $18 million. Foreign currency exchange rates had an adverse effect of $7 million on adjusted operating income before taxes. Premiums increased 7.8% to $562 million in the quarter. Foreign currency exchange rates had a favorable effect on net premiums of $18 million for the quarter.
The Financial Solutions pre-tax adjusted operating income increased 62.8% year over year to $140 million. Foreign currency exchange rates had a favorable effect of $5 million on adjusted operating income before taxes.
Asia/Pacific: Total pre-tax adjusted operating income was $209 million, which surged nearly threefold from the year-ago quarter.
The Traditional segment’s pre-tax adjusted operating income was $138 million, which skyrocketed more than 12-fold from the year-ago quarter. Foreign currency exchange rates had a favorable effect of $6 million on adjusted operating income before taxes.
The Financial Solutions segment’s pre-tax adjusted operating income increased 18.3% to $71 million. Foreign currency exchange rates had an immaterial effect on adjusted operating income before taxes. Net premiums increased 48.3% to $92 million.
Corporate and Other: Pre-tax adjusted operating loss was $58 million, wider than the year-ago quarter’s loss of $18 million. The wider loss was primarily due to lower variable investment income and higher general expenses.
Financial Update
As of Sept. 30, 2025, the company had assets worth $152 billion, up 26.4% year over year.
As of Sept. 30, 2025, Reinsurance Group’s book value per share, excluding accumulated other comprehensive income, increased 6% year over year to $158.67.
The adjusted operating return on equity (excluding accumulated other comprehensive income) was 13.2%, which contracted 60 basis points year over year.
Capital Deployment
RGA deployed $1.7 billion into in-force block transactions, which include $1.5 billion deployed into the transaction with subsidiaries of Equitable Holdings, Inc.
Reinsurance Group repurchased shares of $75 million in the quarter.
The board of directors declared a quarterly dividend of 93 cents. Effective Oct. 28, 2025, the dividend will be paid out on Nov. 25 to shareholders of record as of Nov. 11.
Prudential Financial, Inc. (PRU - Free Report) reported third-quarter 2025 adjusted operating income of $4.26 per share, which beat the Zacks Consensus Estimate by 16.3%. The bottom line increased 28% year over year. Total revenues of $16.2 billion beat the Zacks Consensus Estimate by 16%. The top line, however, declined 16.6% year over year. The decrease in revenues was due to lower premiums.
Total benefits and expenses amounted to $14.3 billion, which declined 20.3% year over year in the third quarter. This decrease was due to lower insurance and annuity benefits and operating expenses. The figure was higher than our estimate of $12.4 billion.
Everest Group, Ltd.’s (EG - Free Report) third-quarter 2025 operating income of $7.54 per share missed the Zacks Consensus Estimate by 43.7%. The bottom line decreased 48.4% year over year. Everest Group’s total operating revenues of $4.3 billion climbed 0.7% year over year on higher net investment income. The top line, however, missed the consensus mark by 2.9%.
EG’s gross written premiums declined 1.1% year over year to $4.4 billion. Our estimate was $4.8 billion. Net investment income was $540 million, which increased 8.8% year over year. Our estimate was $490.5 million. The Zacks Consensus Estimate was pegged at $511 million. Total claims and expenses rose 9.2% to $4 billion. Our estimate was $3.8 billion.
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2025 operating net income of $2.10 per share missed the Zacks Consensus Estimate by 3.6%. Also, the bottom line increased 19% year over year. PFG’s operating revenues increased 6.2% year over year to $3.8 billion, driven by increased premiums and other considerations, fees, and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 4.1%.
Total expenses increased 3.8% year over year to $3.4 billion. The figure was lower than our estimate of $3.6 billion. As of Sept. 30, 2025, Principal Financial’s AUM amounted to $784.3 billion, which included $0.4 billion of net cash flow and assets under administration of $1.8 trillion. AUM improved 10.1% from 2024-end.
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Reinsurance Group Q3 Earnings Top Estimates on Solid Investment Income
Key Takeaways
Reinsurance Group of America, Incorporated (RGA - Free Report) reported third-quarter 2025 adjusted operating earnings of $6.37 per share, which beat the Zacks Consensus Estimate by 9.8%. Moreover, the bottom line increased 3.9% from the year-ago quarter’s figure.
Net foreign currency fluctuations had an adverse effect of 1 cent per diluted share on net income available to RGA shareholders, and a favorable effect of 4 cents per diluted share on adjusted operating income, both as compared with the prior year.
Reinsurance Group witnessed a solid performance in the Asia/Pacific, U.S. and Latin America and Canada segments, offset by the soft result in the Europe, Middle East and Africa (EMEA) and Corporate and Other segments.
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
RGA's operating revenues of $6.2 billion beat the Zacks Consensus Estimate by 0.9%. The top line also improved 8% year over year due to higher net investment income and other revenues.
Net premiums of $4.3 billion declined 2.5% year over year. Investment income increased 24% from the prior-year quarter to $1.5 billion. The average investment yield decreased to 4.73% in the third quarter from 5.08% in the prior-year period due to lower variable investment income.
Total benefits and expenses at Reinsurance Group increased 8.2% year over year to $5.9 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 $236 million in the quarter under discussion, which increased 48.4% year over year.
The Traditional segment reported a pre-tax adjusted operating income of $136 million, which increased 72% year over year. Net premiums declined 1.5% from the year-ago quarter to $1.9 billion.
The Financial Solutions segment’s pre-tax adjusted operating income increased 25% to $100 million, which reflected the earnings contribution from the Equitable transaction, which was closed in the third quarter, partially offset by lower variable investment income.
Canada: Total pre-tax adjusted operating income rose 47% year over year to $50 million.
The traditional segment’s pre-tax adjusted operating income increased 43% year over year to $43 million. Net premiums increased 3.8% to $326 million. Foreign currency exchange rates had an adverse effect on net premiums of $3 million for the quarter.
The Financial Solutions segment’s pre-tax adjusted operating income increased 75% year over year to $7 million. Foreign currency exchange rates had an immaterial effect on adjusted operating income before taxes.
EMEA: Total pre-tax adjusted operating loss was $52 million against the year-ago quarter’s adjusted operating income of $68 million.
Pre-tax adjusted operating loss of the traditional segment was $192 million, wider than the year-ago quarter’s loss of $18 million. Foreign currency exchange rates had an adverse effect of $7 million on adjusted operating income before taxes. Premiums increased 7.8% to $562 million in the quarter. Foreign currency exchange rates had a favorable effect on net premiums of $18 million for the quarter.
The Financial Solutions pre-tax adjusted operating income increased 62.8% year over year to $140 million. Foreign currency exchange rates had a favorable effect of $5 million on adjusted operating income before taxes.
Asia/Pacific: Total pre-tax adjusted operating income was $209 million, which surged nearly threefold from the year-ago quarter.
The Traditional segment’s pre-tax adjusted operating income was $138 million, which skyrocketed more than 12-fold from the year-ago quarter. Foreign currency exchange rates had a favorable effect of $6 million on adjusted operating income before taxes.
The Financial Solutions segment’s pre-tax adjusted operating income increased 18.3% to $71 million. Foreign currency exchange rates had an immaterial effect on adjusted operating income before taxes. Net premiums increased 48.3% to $92 million.
Corporate and Other: Pre-tax adjusted operating loss was $58 million, wider than the year-ago quarter’s loss of $18 million. The wider loss was primarily due to lower variable investment income and higher general expenses.
Financial Update
As of Sept. 30, 2025, the company had assets worth $152 billion, up 26.4% year over year.
As of Sept. 30, 2025, Reinsurance Group’s book value per share, excluding accumulated other comprehensive income, increased 6% year over year to $158.67.
The adjusted operating return on equity (excluding accumulated other comprehensive income) was 13.2%, which contracted 60 basis points year over year.
Capital Deployment
RGA deployed $1.7 billion into in-force block transactions, which include $1.5 billion deployed into the transaction with subsidiaries of Equitable Holdings, Inc.
Reinsurance Group repurchased shares of $75 million in the quarter.
The board of directors declared a quarterly dividend of 93 cents. Effective Oct. 28, 2025, the dividend will be paid out on Nov. 25 to shareholders of record as of Nov. 11.
Zacks Rank
Reinsurance Group currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Insurers
Prudential Financial, Inc. (PRU - Free Report) reported third-quarter 2025 adjusted operating income of $4.26 per share, which beat the Zacks Consensus Estimate by 16.3%. The bottom line increased 28% year over year. Total revenues of $16.2 billion beat the Zacks Consensus Estimate by 16%. The top line, however, declined 16.6% year over year. The decrease in revenues was due to lower premiums.
Total benefits and expenses amounted to $14.3 billion, which declined 20.3% year over year in the third quarter. This decrease was due to lower insurance and annuity benefits and operating expenses. The figure was higher than our estimate of $12.4 billion.
Everest Group, Ltd.’s (EG - Free Report) third-quarter 2025 operating income of $7.54 per share missed the Zacks Consensus Estimate by 43.7%. The bottom line decreased 48.4% year over year. Everest Group’s total operating revenues of $4.3 billion climbed 0.7% year over year on higher net investment income. The top line, however, missed the consensus mark by 2.9%.
EG’s gross written premiums declined 1.1% year over year to $4.4 billion. Our estimate was $4.8 billion. Net investment income was $540 million, which increased 8.8% year over year. Our estimate was $490.5 million. The Zacks Consensus Estimate was pegged at $511 million. Total claims and expenses rose 9.2% to $4 billion. Our estimate was $3.8 billion.
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2025 operating net income of $2.10 per share missed the Zacks Consensus Estimate by 3.6%. Also, the bottom line increased 19% year over year. PFG’s operating revenues increased 6.2% year over year to $3.8 billion, driven by increased premiums and other considerations, fees, and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 4.1%.
Total expenses increased 3.8% year over year to $3.4 billion. The figure was lower than our estimate of $3.6 billion. As of Sept. 30, 2025, Principal Financial’s AUM amounted to $784.3 billion, which included $0.4 billion of net cash flow and assets under administration of $1.8 trillion. AUM improved 10.1% from 2024-end.