EMEA and Asia Pacific developments boost RGA growth in Q2
The Reinsurance Group of America’s (RGA) EMEA and Asia-Pacific segments had a favourable second quarter, although the group’s overall net income has slightly dipped compared with the prior-year quarter.
RGA's net premiums in the second quarter of 2017 were $2.48 billion, an increase from $2.35 billion year-on-year.
The reinsurer's Q2 net income was $232.2 million, down from $236.1 million in the prior-year quarter.
RGA's US and Latin America traditional segment reported a pre-tax net income of $90.6 million, down from $111.4 million year-on-year.
Net premiums for this segment increased 2 percent this quarter to $1.33 billion.
RGA's Canada traditional segment reported a pre-tax net income of $32.8 million, down from $43.3 million year-on-year. The group suggests foreign exchanged rates had an adverse effect of $1.3 million on pre-tax net income.
The reported net premiums in this segment totalled $221.4 million, down from $240.1 million year-on-year, which RGA attributed to an expected reduction in creditor business. The group also suggested net foreign currency fluctuations had an adverse effect of $9.5 million on net premiums for the quarter.
RGA's EMEA traditional segment's pre-tax net income was $11.4 million, up from $6.8 million year-on-year. The group said the results were in line with expectations while unfavourable claims experience, most notably in the UK, adversely affected performance last year.
The net premiums for EMEA increased 15 percent from the prior-year quarter to $330.9 million, which it attributes to the impact of new treaties and the growth on current treaties.
RGA's Asia-Pacific traditional segment's pre-tax net income was $53.3 million, up from $34.5 million year-on-year. The group suggested the results for this period were collectively strong across due to strong premium growth and favourable claims experience, and profitable results in Australia.
Asia-Pacific net premiums increased 18 percent to $537.4 million, with considerable growth across Asia, primarily from new and existing treaties in Hong Kong and Japan, offset by a reduction in premiums in Australia.
Anna Manning, president and CEO, commented: “We are very pleased with the quarter as the bottom-line number was very strong, all key segments performed well, and we deployed a significant amount of capital both into block transactions and organic business growth. Further, in recognition of the strong, ongoing financial results, the board increased the common stock dividend by 22 percent, marking the seventh straight year of double-digit percentage increases.
“Highlights of the quarter included solid overall top-line growth, favourable US individual mortality claims, and ongoing strength in our EMEA and Asia Pacific segments. Australia was profitable, and Asia was particularly strong.
“We ended the quarter with an excess capital position of approximately $1.0 billion, and thus we remain positioned to continue pursuing a balanced approach to capital management by deploying capital into in-force and other attractive transactions, share repurchases, and shareholder dividends.
“In summary, this was an excellent quarter, providing further evidence that we are successfully executing our strategy. Looking forward, we are well positioned in our markets, we have a proven approach, and we are optimistic about our ability to deliver attractive financial returns.”