RGA posts disappointing results
Reinsurance Group of America has posted a poor set of first quarter results, that according to the chief executive officer, did not live up to expectations.
RGA reported operating income of $114.8 million in the first quarter, or $1.61 per share, versus last years $122.8 million or $1.65 per share. Net income totalled $136.7 million, or $1.92 per diluted share, compared with $185.5 million, or $2.49 per diluted share in the prior-year quarter.
The company explained that its current quarter results were a reflection of the adverse mortality experience in several markets, partially offset by lower general expenses and a lower effective tax rate. A generally stronger US dollar reduced operating income by approximately $4.3 million after taxes, or $0.06 per diluted share.
A. Greig Woodring, president and chief executive officer, said: “Our overall operating results were somewhat below last year’s first quarter and below our expectations for this quarter, as we experienced adverse mortality volatility beyond the typical range, even when considering first-quarter seasonality. That volatility was partially offset by a lower effective tax rate, lower general expenses, and ongoing strong performance in our asset intensive and financial reinsurance businesses and in our Asia Pacific segment.
He explained that mortality claims experience in North America was considerably worse than expected, owing to a more extreme seasonal influence and a spike in large claims, which exceed $1.0 million.
“Claims fluctuations of the sort experienced during the quarter are an ongoing part of our business. We would expect a return to a more normal pattern as the year progresses.
“During the quarter, we repurchased approximately 1.45 million shares for a total cost of $112.6 million, leaving $187.4 million under the current share repurchase authorization. Our deployable, excess capital position exceeds $500 million, and we will continue to evaluate attractive capital deployment opportunities, which could include additional share repurchases, shareholder dividend increases, block acquisitions, or some combination of all of these. Our ending book value per share for the quarter was $89.92 including AOCI, and $71.51 excluding AOCI.”
