RZC — Reinsurance Group of America, Incorporated

Summary of RGA's Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• 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%.
• Full Year Performance:
  • Record operating EPS for 2025.
  • Increased value of in-force business margins by 18%.
  • Capital deployment of $2.5 billion into in-force transactions.
  • Share repurchases totaled $125 million since reinstating buybacks in Q3 2025.
• Excess Capital: Maintained a strong balance sheet with $2.7 billion in excess capital.

2. Strategic Updates and Business Highlights

• Regional Performance:
  • Strong results in the U.S. driven by management actions and variable investment income.
  • EMEA showed strong volume growth and favorable experience.
  • APAC continued to gain momentum with ongoing in-force actions.
• Balance Sheet Optimization: Continued contributions from management actions improved earnings and risk profiles.
• Investment Performance: Benefited from favorable variable investment income, particularly from the alternative investment portfolio.
• Business Focus: Emphasis on proactive business approaches, balance sheet optimization, and capital stewardship.

3. Forward Guidance and Outlook

• 2026 Expectations:
  • Anticipated tax rate between 22% to 23%.
  • Projected capital deployment into in-force transactions around $1.5 billion.
  • Expected total shareholder return of capital to range between 20% to 30% of after-tax operating earnings.
  • Intermediate-term targets of 8% to 10% annual EPS growth and a continued ROE of 13% to 15%.
• Market Opportunities: Continued optimism in Asia and the U.K. longevity market, with a strong pipeline of opportunities across regions.

4. Bad News, Challenges, or Points of Concern

• U.S. Group Business: Experienced unfavorable claims experience, particularly in the excess medical sector, leading to a decision to exit group health care lines after 2026.
• Economic Claims Experience: Unfavorable by $51 million in Q4, primarily impacting the U.S. group business.
• Variable Investment Income: Projected to be lower in 2026 (7%) compared to 2025 (6%), below long-term expectations of 10% to 12%.
• Unpredictability of In-Force Management Actions: Anticipated reduced financial impact from in-force management actions compared to recent years.

5. Notable Q&A Insights

• Capital Allocation: Management confirmed a balanced approach to capital deployment, maintaining flexibility while targeting a 20% to 30% payout ratio.
• Equitable Block Performance: The transaction is expected to generate $160 million to $170 million in earnings for 2026, with ongoing benefits from strategic relationships.
• Long-Term Care (LTC) Business: Management expressed satisfaction with LTC performance but did not disclose specific ROE metrics.
• Japan Market: Higher interest rates are viewed positively for earnings, with limited exposure to disintermediation risk.
• Regulatory Changes in Europe: Management is monitoring the evolving regulatory landscape but does not foresee significant competitive pressures from multiline reinsurers.

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