Reinsurance Gr Q3 2026 Earnings Call Transcript

Reinsurance Gr (NYSE:RGA) reported third-quarter financial results on Friday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Reinsurance Gr reported strong Q3 2026 financial results with pre-tax adjusted operating income of $736 million, translating to $8.49 per share after tax.

The company highlighted robust performance across regions, with strong investment income and favorable economic claims experience driving results.

Strategic priorities include sustainable returns, risk management, and capital deployment in high-value markets such as the U.S. PRT and UK longevity markets.

The company completed several pension risk transfer transactions totaling over $800 million in premiums, indicating strong business momentum in the Americas.

Reinsurance Gr emphasized its biometric risk expertise and use of third-party capital, successfully deploying Rubyre Capital fully this quarter.

The company maintained a strong balance sheet with $1.8 billion in excess capital, deploying $119 million into in-force transactions and returning $139 million to shareholders.

Reinsurance Gr plans to simplify its reporting into four segments in the next quarter and announced leadership changes, with Merrick Douglas set to become Chief Risk Officer in 2027.

Overall, the company expressed confidence in its strategic direction and the durability of its competitive advantages, aiming to meet or exceed financial targets.

Full Transcript

OPERATOR

Welcome to Reinsurance Gr’s third quarter 2026 earnings call. Participants have been placed on a listen-only mode. Your lines will be open for questions following the presentation. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s prepared remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two.

Today’s call is being recorded. If you have any objections, you may disconnect at this time. Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more detail on the risks and uncertainties, please refer to the risk factors discussed in Reinsurance Gr’s periodic reports to the SEC. For reconciliation of the non-GAAP measures discussed on this call, as well as other information regarding these measures, please refer to the earnings release and other materials in the Investor Relations section of the company’s website.

There will be references to the earnings presentation slides throughout the call. I will now turn the floor over to Tony Chang for his opening remarks.

Shun Kin Tony Cheng (President and CEO)

Good morning everyone, and thank you for joining us today. We appreciate your continued interest in Reinsurance Gr. I am pleased to share that we delivered excellent results this quarter with strong performance across all regions. Investment performance was robust and economic claims experience was favorable to expectations, demonstrating our success on both sides of the balance sheet. These results were another proof point on the importance of our strategy and core differentiators: deep biometric expertise, strong asset management capabilities, a global platform of local offices, a market-leading brand, and flexibility to partner across the industry.

They also demonstrate our ability to generate attractive risk-adjusted returns across a range of market environments. So with this strong foundation in place, our priorities moving forward remain clear: deliver attractive, sustainable returns, manage risk well, and deploy capital where we see the best long-term value. Before I turn to the results, let me highlight three items from the quarter and how they tie to our strategy. First, our pipeline for both in-force and flow business remains attractive this quarter. The U.S. PRT and UK longevity markets picked up after a slow start to the year.

We were active in both, completing several transactions, and we are encouraged by the outlook for the fourth quarter and into 2027. Beyond these two markets, our other business segments continue to benefit from attractive opportunities, building on our strong market presence. Second, a key element of our biometric risk expertise is the rigor of our assumption-setting process. This quarter we completed our annual assumption review. This resulted in no net impact on consolidated pre-tax adjusted operating income. The completion of the review gives us added confidence in both our in-force business and the new business we are writing.

Finally, third-party capital remains a core element of our capital management strategy. These structures provide an opportunity for third-party investors to participate in the returns of our business while generating incremental fee income over time and enhancing our flexibility to fund growth and return capital to shareholders. In the quarter, I’m very pleased that we showed the continued execution of this strategy with the full deployment of Rubyre Capital.

Turning now to the regional results, in the Americas, the results for the quarter were driven by strong investment income, sound underwriting experience, and the continued favorable impact of in-force actions executed in prior periods. New business momentum continued, and we were particularly pleased with the completion of four pension risk transfer transactions totaling over $800 million in combined premium. The overall pipeline for the region is encouraging, and we are seeing a wide range of opportunities across the spectrum of underwriting, product development, and asset-intensive transactions with biometric risk.

In EMEA, earnings outperformed our expectations, benefiting from favorable claims experience and higher investment income. After a slower start to the year, largely due to a quiet UK longevity market, we have now completed a number of transactions in this core growth area covering lives in both the UK and continental Europe. We are also encouraged by the momentum we are seeing in the market and in our pipeline. Asia Pacific delivered another strong quarter driven by the earnings contribution from recent new business and strong investment income. Leading with biometric expertise, local experience, and long-standing client relationships, we closed several flow deals in the region, notably in Hong Kong and Japan. These deals were in our sweet spot, leveraging both sides of the balance sheet and showcased the expertise of our exceptional local teams.

Our ability to deploy capital across all our regions and a range of products gives us a significant advantage. Just as important, we remain selective, maintaining discipline in pricing, underwriting, and capital deployment. Let me emphasize that our capital deployment into in-force transactions and flow business this year has been focused on exclusive arrangements with attractive risk-adjusted returns, and we are very pleased with the high-quality nature of this business.

Taking a step back, what connects these results to our strategy are our strengths in four key areas. First, win-win transactions. We pursue transactions that deliver strong returns for Reinsurance Gr and real benefits for our clients. Our five decades of experience, global presence, and local market knowledge let us focus where we are best positioned. We focus on both sides of the balance sheet, pairing deep biometric expertise with diversified investment capabilities.

Second, scaling our global platform. Demand for risk and capital solutions continues to grow, and our strong balance sheet and global brand make us a trusted counterparty. Third, optimizing our balance sheet. We do this through in-force management, improved risk-adjusted investment returns, and both internal and third-party sources of capital. And finally, disciplined capital stewardship. We balance investing in attractive opportunities with returning capital to shareholders.

Here are some examples from this quarter of how we are putting this approach to work around the world. In the U.S., our underwriting capabilities continue to set us apart. Case volumes remain significantly above prior-year levels. Our strategic underwriting program accounted for almost half of this quarter’s cases and is the largest source of growth in our underwriting products. These programs will further entrench our strategic partnership with the client, including new product development, creating exclusive business that is very durable.

In Asia, our underwriting and product development capabilities supported client wins across the region. In Japan, we supported the launch of a simplified underwriting mortality product for the corporate-owned life market. In Hong Kong, one of our embedded digital underwriting capabilities was highlighted by a client for its role in accelerating medical underwriting decisions, widening consumer access to cover, and improving the new business experience.

In India, our electronic underwriting system has moved into early client development, with one client now live and another implementation progressing well. Just like in the U.S., expanding our underwriting capabilities allows us to help clients reach more customers and make more, better-informed risk decisions. That deeper partnership is a differentiator for Reinsurance Gr and helps us continue to grow in these key markets. Turning to capital allocation, we have deployed $119 million into in-force transactions in the quarter, and we returned $139 million to shareholders, including $75 million in share repurchases and $64 million of dividends. We maintained a strong balance sheet, ending the quarter with $1.8 billion of excess capital balance. Use of excess capital is a key part of how we build long-term shareholder value. So as we look ahead, our fundamentals remain strong, and our pipeline for both in-force and flow business is healthy.

Our confidence in 2026 and beyond remains high. Our advantages are durable, and our strategy builds on a proven track record of creating long-term value for our shareholders. We are confident we will meet or exceed our intermediate-term financial targets and continue to deliver long-term value for our shareholders. Before I close, I’d like to recognize Jonathan Porter, who plans to retire in early 2027. I congratulate Jonathan on a successful career and thank him for the lasting impact he has made at Reinsurance Gr. On a personal note, Jonathan has been an invaluable partner to me and to many leaders across Reinsurance Gr. I am grateful for his many contributions and excited for him as he begins this well-deserved next chapter. Following a thorough search, we’re pleased to announce that Merrick Douglas will join Reinsurance Gr in the fourth quarter and take over as Chief Risk Officer on January 1, 2027.

Merrick brings decades of leadership experience spanning all aspects of the risk function, most recently at Prudential and Morgan Stanley. He and Jonathan will have the opportunity to work closely during a transitional period. With that, I’ll turn the call over to Laura to share her comments on the quarter.

OPERATOR

Thank you. We will now begin the question-and-answer session. Please limit yourself to one question and a single follow-up. If you have additional questions, you can rejoin the queue. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we’ll pause momentarily to assemble our roster.

The first question will come from Alex Scott with Barclays. Please go ahead.

Alex Scott (Analyst at Barclays)

Hey, good morning. I wanted to see if you could give a little more color on the in-force actions on uncapped cohorts and maybe just a broad update, but also to what degree some of the actions that flowed through this quarter improve go-forward earnings. Very helpful, thanks. Second one on APAC growth. Can you just talk about maybe in some of your bigger geographies how you’re viewing the competitive landscape, where the opportunities are, just how we should think about momentum of the growth in that business over the next year or two.

OPERATOR

If you have a question, please press star then one. The next question will come from Joel Hurwitz with Dowling Partners. Please go ahead.

Joel Hurwitz (Analyst)

Hey, good morning. I also wanted to touch on top line and I know there’s a lot of moving dynamics and Laura, you highlighted some of those in your prepared remarks. But I wanted to focus on organic growth. Can you guys just help size what you’re seeing from an organic growth standpoint? And then I think a couple years ago you guys sized the capital need to support the organic growth at about 400 million annually. Is that still the case or has that grown?

Laura Cockrill (EVP & Chief Strategy Officer)

Let me first start with the organic growth. I think if you look at the new slide we included, that is total premium growth for the regions not split between traditional and financial solutions. The growth we have is about 8.2% after adjusting for PRT as well as currency. And that continues to be in line with our expectations as we expect growth across our multiple different regions. As it relates to the second part of your question on about 400 million of capital to support that organic growth. I believe that the question. That was your question. Yeah. Thanks, Joel. So I don’t know that we’ve. Sorry, sorry. Clarity around kind of the specific how much capital we need to deploy the organic flow business we’ve highlighted in the past. We have numerous different levers to achieve our 8 to 10% EPS growth which does provide us flexibility.

We can do the capital deployment into in force transactions as well as organic flow business, notably at returns that meet or exceed our expectations. And we also have positive contributions from our investment portfolio, effective in force management, balance sheet optimization actions and the return of capital to shareholders, which includes higher share repurchases when they make sense. So we can and do use a combination of those levers to really achieve our targets.

Joel Hurwitz (Analyst)

Okay, thanks for that. And then just shifting gears with Ruby Re now fully deployed. I wanted to see if you have any updates on your thinking for future sidecar launches.

Laura Cockrill (EVP & Chief Strategy Officer)

Yeah, I don’t have a comment on our next vehicle at this time other than to reiterate that third party capital is a priority for us and we will discuss more when appropriate.

OPERATOR

The next question will come from Tom Gallagher with Evercore. Please go ahead.

Tom Gallagher (Analyst at Evercore)

First question, just more checking. Do you guys have much US group disability exposure and if so, how was the performance this quarter and how would those be structured? Would you see it mainly now or could there be a lag?

Jonathan Porter (EVP)

Yeah. Hi Tom, this is Jonathan. I’ll take that one. So our exposure to group disability in the Americas, which includes both the US and Canada, is relatively modest. It’s about 2% of our total traditional business as measured by premium across those two markets. Our experience across the blocks has been in line with expectations in both the current quarter and year to date. And we continue to monitor that claims experience with our clients. But we would expect any financial impact of deviations in that to not be that material given the small size of the business.

Tom Gallagher (Analyst at Evercore)

Got you. Thanks for that Jonathan and best of luck. My follow up is just an accounting question from slide 9 on biometric experience. I get the unfavorable accounting experiences driven by the cap cohorts and the uncapped or deferred. But how should we think about. You’ve now had cumulative, we’ll call it net favorable biometric experience of 230 million since the new LDTI was put into place. At what point do you take that favorable experience and embed that into your Aaron?

I guess that wouldn’t be an unlocking of prior experience. It would be prospective assumptions would be changed. But is it at the level now where it would cause you to take a second look at your prospective assumptions or not or is that just. You would have to wait longer. Can you help us think through how that process works? Thanks.

Jonathan Porter (EVP)

Yeah, thanks for the question. Tom, this is Jonathan again. So yeah, I mean the difference between what we’ve seen economically and what we’ve seen in accounting is actually it’s the 442 on that slide plus the 209. It’s actually been a negative result in the earnings. So it’s the combination of those two or over 600. We do take in our actual experience as it emerges into account in our assumption updates. So that together with our go forward process where we look at both our own data and industry data.

So that is a factor that we consider when we set our assumptions. Again, we’re in a very long term business so we’d like to take a measured approach, recognize any experience and assumption updates and to the extent there’s something that is material and appropriate, we would recognize it at that time.

OPERATOR

The next question will come from Wilma Burdes with Raymond James. Please go ahead.

Wilma Burdes (Analyst at Raymond James)

Hey, good morning. 19% ROE on a trailing 12 month basis is a strong result, but it’s definitely higher than a lot of the other underwriting companies we cover. Maybe just give us a little bit of color here on the sustainability. Is it a function of the nature of your business? Is there anything unusual driving that result, recaptures, alts, et cetera? And how sustainable is it going forward? Thanks.

Laura Cockrill (EVP & Chief Strategy Officer)

Sure. Thanks, Wilma. So first let me note that we are very proud of the team’s effort to achieve our ROE. It does show our focus on pursuing high quality deals with returns that meet or exceed our thresholds as well as our focus on continued in force management actions to improve the overall profitability of the portfolio. I think as far as the sustainability, one of the reasons we provide the key considerations on the earnings presentation slide is just to give you a sense of how we look at the core earnings of the portfolio. So while we do expect to continue to deliver strong results across new business in force actions, our investment portfolio, et cetera, there will be some one time items that we do call out there.

Wilma Burdes (Analyst at Raymond James)

Okay, thank you. And then could you talk about what comprises your new investments driving a 6.3% new money rate in 3Q26? Thanks.

Jayson Bronchetti (EVP)

Sure. Well, this is Jason. I’m happy to take that. So the composition of the portfolio as you imagine is oriented towards high quality fixed income with an average rating in the A category. We have a relatively high allocation to public corporates as a way to get duration into the portfolio, but really maintain a very diversified portfolio. During the quarter we did take the opportunity to add incremental duration as we saw higher yields during the period and we continue to move up in quality.

OPERATOR

The next question will come from Sunit Kamath with Jefferies. Please go ahead.

Sunit Kamath (Analyst at Jefferies)

Thanks. Good morning and congratulations to Jonathan. Best of luck. I realize that group disability is a small percentage of your mix, but I was hoping to lean a little bit in on your expertise, Jonathan, because we’re seeing some very different results from primary writers here. Some companies are saying third quarter is a blip, other companies are saying they don’t really know just based on what you guys see, as one of the leading underwriters, do you have any thoughts in terms of what’s driving some of the volatility that we’re seeing across the industry?

Jonathan Porter (EVP)

Yeah, thanks. And thanks for your comments as well. So the short answer is nothing that I would communicate. I can’t comment on experience that our clients are seeing or what the rest of the industry is seeing. What I can say, again, just to reiterate, is for our book of business, it’s relatively small and it’s been performing in line with our expectations.

Sunit Kamath (Analyst at Jefferies)

Okay. And then I guess for Laura, I appreciate the move to create more simplicity in terms of your reporting, but I also think that as it comes to sources of earnings, the investors that I speak to are sort of all over the place in terms of how you guys actually make your money. So we took a stab at it, and I just wanted to pressure test that with you for a second, if I could. So some of the work that we’ve done would suggest something like 60% earnings from underwriting, 35% from spread, and maybe 5% from fee.

I know you’re not going to give me the specifics, but is that ballpark reasonable based on kind of your business mix today?

Laura Cockrill (EVP & Chief Strategy Officer)

Sure. Thanks, Suneet. So, as I have discussed, one of my priorities is continuing to improve how we communicate with external stakeholders and provide greater clarity into the business. This quarter we did announce the change in the segment reporting, as you mentioned, and we intend to continue building on that effort by providing greater transparency into the business mix. One of our key differentiators is our biometric expertise, and we’re evaluating how to best provide greater visibility into the portion of the earnings that are driven by underwriting income.

So we will plan on sharing additional details at an appropriate time.

OPERATOR

The next question will come from Wes Carmichael with Wells Fargo. Please go ahead.

Wes Carmichael (Analyst at Wells Fargo)

Hey, good morning. Thanks. The first question was just on in-force action. Laura, I think you mentioned that actions this quarter were at least there were some on uncapped cohorts. I guess I was just trying to figure out with the 57 million that you called out, was that in capped or uncapped? And then have you changed any of your philosophy around those actions?

Laura Cockrill (EVP & Chief Strategy Officer)

Sure. Thanks for the question. So the entire 57 million this quarter was in uncapped cohorts. And no, we have not changed our philosophy around in force management actions. They continue to be a key part of our ongoing strategy. And again, one of the levers that I mentioned in achieving our growth targets.

Wes Carmichael (Analyst at Wells Fargo)

Great, thank you. And then second question, I think Equitable had mentioned reinsurance true up around mortality. I know that had at least something to do with the RGA transaction. I’m just wondering, is there any impact to RGA from that true up or is that just an Equitable thing?

Laura Cockrill (EVP & Chief Strategy Officer)

Yeah, thanks. It was just an Equitable thing. I am aware that they did mention it, but the accounting true up did not have an impact to RGA’s reported financial results.

OPERATOR

Our last question of the day comes from Mike Ward with UBS. Please go ahead.

Mike Ward (Analyst at UBS)

Thanks. Good morning. I was just wondering if you could sort of comment on the medical excess business. And I think you’re getting out of it largely by January 1st. But just wondering if you could discuss how it’s performed more recently.

Jonathan Porter (EVP)

Yeah, Hi Mike, this is Jonathan. Yeah, so that business has been performing in line with our expectations. You’re right. We took the strategic decision to exit that market in early 2026. And as that business rolls off starting in 2027, it will become be outside of our income statement, balance sheet and our risk profile. But today it’s performed in line with what we had thought after our repricing activities.

Mike Ward (Analyst at UBS)

Okay, thanks. And then kind of a broader long term question, but it seems like the NAIC is increasingly looking at onshore and offshore reinsurance. Just wondering if you see potential kind of longer term activity for new business or is it. What they’re looking at is it sounds kind of more focused on asset intensive business that maybe you don’t really go after. But just curious how you see this long term.

Shun Kin Tony Cheng (President and CEO)

Yeah, Mike, thanks for the question. Appreciate it. We always are going to support regulatory frameworks that promote the long term strength and resilience of the life insurance industry and its ability to provide financial protection to people around the world. As a global reinsurer, we operate across a wide range of regulatory environments and those frameworks continue to evolve. And you mentioned the NAIC discussions. Regulatory change can also create opportunities for RJ as clients look for solutions to manage capital risk and evolving requirements.

Our strong rating, solid balance sheet and deep expertise make us a trusted partner in these times of change.

OPERATOR

This concludes our question and answer session. I would like to turn the conference back over to Tony Chang for any closing remarks.

Shun Kin Tony Cheng (President and CEO)

Well, thank you again for joining us today and for your continued interest in Reinsurance Gr. Reinsurance Gr is well positioned across the globe. Given the strength of our global platform and the tailwinds in our markets. We look forward to meeting or exceeding our intermediate term targets and to your continued partnership. This concludes today’s third quarter call.

OPERATOR

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.