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Reinsurance Group of America (RGA) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 8, 2026

Source: earnings call transcript

Executive summary

Reinsurance Group of America Q1 FY26 — Strong Start with Broad-Based Performance and Disciplined Capital Deployment

RGA delivered a strong Q1 FY26, marked by broad-based performance across regions and products, driven by disciplined execution and strong underlying fundamentals. The company continues to leverage its global platform and biometric expertise for attractive risk-adjusted returns, deploying capital selectively while maintaining a robust capital position and returning capital to shareholders.

Highlights

6

  • Reported pretax adjusted operating income of $611 million, or $6.97 per share after tax, reflecting strong performance.

  • Achieved a trailing 12 months adjusted operating return on equity (excluding notable items) of 16.2%.

  • Economic claims experience was favorable by $117 million in the quarter, with a corresponding favorable current period financial impact of $4 million.

  • Deployed $338 million into in-force transactions, primarily in Asia, demonstrating selective capital allocation.

  • Ended the quarter with estimated excess capital of $2.4 billion and estimated next 12 months deployable capital of $2.9 billion, maintaining a strong capital position.

  • Book value per share (excluding AOCI and B36 embedded derivatives) increased to $167.92, representing a compounded annual growth rate of 9.9% since 2021.

Concerns

3

  • The effective tax rate for the quarter was 24.4% on adjusted operating income, above the expected range due to jurisdictional mix of earnings and an increase in valuation allowance on tax credits.

  • The Corporate and Other segment reported an adjusted operating loss before tax of $65 million, primarily due to timing of compensation expenses and slightly unfavorable variable investment income.

  • Excess capital was negatively impacted by $200 million due to a correction in one subsidiary's regulatory capital calculations and annual assumption updates.

Guidance & targets

CategoryTargetConfidence
Variable investment income return
7%
medium materiality
High
Capital allocation for financial leverage reduction
$400 million
medium materiality
High
Ruby Re capital deployment
Fully deployed
medium materiality
High
Total shareholder return of capital
20% to 30% of after-tax operating earnings
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
U.S. and Latin America Traditional
Results reflected favorable claims experience in individual life and good individual health results. Experience in U.S. Group was in line with expectations.
Claims experience: Favorable in individual lifeIndividual health results: Good
————
Canada Traditional
Results reflected favorable individual life and group claims experience.
Claims experience: Favorable in individual life and group
————
EMEA Traditional
Results reflected a timing benefit on an annual premium treaty, partially offset by unfavorable claims experience in capped cohorts. Economic claims experience was favorable.
Claims experience: Unfavorable in capped cohorts (partially offset)Economic claims experience: Favorable
————
Asia Pacific Traditional
Had another good quarter, reflecting favorable overall experience and the benefit of ongoing growth.
Experience: Favorable overallGrowth: Ongoing
————
Corporate and Other
Reported an adjusted operating loss before tax of $65 million, primarily due to the timing of certain compensation expenses and slightly unfavorable variable investment income.
———-$65 million

Deals & partnerships

U.S. client Extended a long-standing U.S. client relationship into Canada for evolving product offerings.

Leveraged RGA's global platform, biometric expertise, and collaborative partnership model to secure an exclusive relationship.

Multiple counterparties Multiple coinsurance transactions in Asia.

Leveraged RGA's ability to reinsure both sides of the balance sheet, combining asset management and biometric expertise.

Insurance company Exclusive transaction in EMEA to unlock value from an in-force portfolio.

Leveraged RGA's biometric expertise. This model is expected to be replicated in EMEA and other parts of the world.

Risks & headwinds

Higher effective tax rate Q1 FY26

24.4%

Corporate and Other segment operating loss Q1 FY26

$65 million

Negative impact to excess capital Q1 FY26

$200 million

Variable investment income below expectations Q1 FY26

$8 million below 7% yearly return expectation

What to watch in Q2 FY26

Ruby Re deployment

FY26
Current Still expected this year
Target Fully deployed

Why it matters

Completion of Ruby Re deployment is key for capital management strategy and funding growth.

Our current focus is on fully deploying Ruby Re, which is still expected this year.

Find out whether RGA delivers this. Inve re-checks your case every morning.

Q&A highlights

Does RGA have enough opportunities to meet or exceed the $1.5 billion deployment target for 8-10% EPS growth, given current excess and deployable capital?

Axel Andre stated that capital deployment is tracking in line with expectations, prioritizing quality over quantity. He affirmed confidence in achieving financial targets through a combination of capital deployment and shareholder returns, leveraging strategic optionality.

“We believe that we can achieve our financial targets through this combination of capital deployment and return of capital to shareholders.”

asked by Suneet Kamath · answered by Axel Philippe Andre

2 min read 5 chapters

Detailed narrative

Global Platform and Strategic Optionality

RGA's diversified global platform enables strategic optionality, allowing capital deployment into the most compelling risk-adjusted opportunities worldwide. This was evidenced by notable transactions in Asia, particularly Japan, spanning both in-force and flow deals combining asset and biometric risk. The company also extended a U.S. client relationship into Canada and completed an exclusive EMEA transaction leveraging biometric expertise to unlock in-force portfolio value, a model expected to be replicated globally.

Capital Deployment and Returns

The company deployed $338 million into in-force transactions in the quarter, primarily in Asia, focusing on quality and expected returns that meet its risk-return trade-off. RGA also repurchased $50 million in shares this quarter, contributing to $175 million in total repurchases since Q3 2025. This is part of a balanced capital allocation strategy aiming for 20-30% total shareholder return of after-tax operating earnings over the long term, alongside an expected $400 million allocation to reduce financial leverage in 2026.

Biometric Claims Experience and Future Earnings Impact

Economic claims experience was favorable by $117 million in Q1, with a $4 million current period financial impact, primarily driven by U.S. individual life and favorable across all regions. Since the beginning of 2023, total economic claims experience has been favorable by $343 million. This deferred favorable experience is expected to be recognized over the remaining life of the business, with an estimated annual impact of approximately $20 million to future earnings.

Investment Portfolio and Private Credit Strategy

The nonspread book yield, excluding variable investment income, was 4.85% in Q1, with a new money rate of 5.64%, providing a continued tailwind to the overall book yield. Private credit represents approximately 9% of the total portfolio, highly diversified across many issuers and asset categories, with the majority rated investment grade. This exposure is managed through a rigorous asset-liability management framework, with credit performance remaining healthy and in line with expectations.

U.S. Traditional Business and Strategic Initiatives

U.S. Traditional premium growth was up approximately 1% YoY, impacted by strategic recaptures of lower-quality, less profitable blocks in the second half of 2025, which made year-over-year comparisons more challenging. Despite this, the company continues to see very strong momentum in its strategic underwriting initiatives, including record volumes, reinforcing RGA's biometric expertise advantage and improving the overall risk profile of the business.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.