RZB Q4 2025 Earnings Call Summary

Operating EPS: Reported at $7.75 per share, marking a record for the second consecutive quarter.
Return on Equity (ROE): Adjusted operating ROE for the trailing 12 months was 15.7%, exceeding the target range of 13% to 15%.
Pretax Adjusted Operating Income: $515 million for the quarter.
Capital Deployment: $2.5 billion into in-force transactions for the year, with $98 million in Q4.
Excess Capital: Ended the quarter with $2.7 billion in excess capital and $3.4 billion in deployable capital.
Share Repurchases: $50 million in Q4, totaling $125 million for the year.

Strong performance across all regions:
- U.S.: Benefited from management actions and variable investment income; individual life mortality met expectations.
- EMEA: Experienced strong volume growth and favorable results.
- APAC: Continued growth momentum with successful in-force actions.
Balance Sheet Optimization: Continued contributions from management actions improved earnings and risk profiles.
New Business Contributions: The Equitable block is performing as expected, with anticipated earnings of $160 million to $170 million in 2026.
Group Health Care Exit: Following a strategic review, RGA will exit the group health care lines of business after 2026, with a significant rate increase implemented.

2026 Expectations:
- Anticipated EPS growth of 8% to 10%.
- Projected variable investment income return of 7%.
- Expected capital deployment of approximately $1.5 billion into in-force transactions.
- Corporate segment losses projected at $50 million to $55 million per quarter.
Tax Rate: Expected to be in the range of 22% to 23%.

Unfavorable Claims Experience: Economic claims experience was unfavorable by $51 million in Q4, primarily driven by the U.S. group business.
Group Health Care Business: The decision to exit this segment indicates challenges in profitability, with only $25 million in pretax earnings expected in a typical year.
Market Competition: Increased competition in the Japanese market and potential pricing pressures from multiline reinsurers due to regulatory changes.

Capital Allocation: RGA maintains a balanced approach to capital deployment, targeting a 20% to 30% payout ratio while remaining flexible to market opportunities.
Equitable Block Performance: Differences in mortality experience between RGA and Equitable were discussed, with RGA benefiting from repricing and operational efficiencies.
Long-Term Care (LTC) Business: RGA is selective in LTC exposure, maintaining a focus on risk appetite and return expectations.
Investment Portfolio: Minimal exposure to software-related companies, with ongoing assessments of AI's impact on the portfolio.
Japan Market: RGA remains optimistic about growth opportunities in Japan, despite macroeconomic volatility, leveraging strong local relationships and expertise.

This summary encapsulates the key points from RGA's Q4 2025 earnings call, highlighting both successes and challenges faced by the company.

RZB — Reinsurance Group of America, Incorporated