RGA profits plummet 52% on 'significant' COVID-19 mortality claims
Reinsurance Group of America (RGA) posted lower-than-expected profits in both the fourth quarter and full-year 2020 as its results were negatively impacted by a "significant level" of COVID-19 mortality claim costs.
The global life and health reinsurer reported a full-year 2020 net profit of $415 million, down 52.3 percent compared to the $870 million it generated in 2019. For Q4 2020, it made a net profit of $132 million, 43.8 percent lower than the prior-year quarter ($235 million).
RGA saw a premium growth of 3.5 percent and 9 percent in the full-year and fourth quarter, respectively. Its consolidated net premiums totalled $11.694 billion in 2020 and $3.3 billion in Q4 2020, compared with $11.297 billion in 2019 and $3 billion in Q4 2019.
The company's global estimated COVID-19 claim cost was approximately $300 million for the fourth quarter and $720 million for the full-year.
RGA ended the quarter with excess capital of approximately $1.3 billion.
Anna Manning, president and chief executive officer of RGA, highlighted that the company's "balance sheet remains strong", thanks to its diversified global platform, but warned that its short term results will continue to be affected by COVID-19.
She said: “Our fourth quarter and full-year results were negatively impacted by a significant level of COVID-19 mortality claim costs, resulting in earnings that were lower than would have been expected in a normal quarter and year.
“While we expect our results to continue to be affected by COVID-19 in the short term, the RGA franchise has shown resilience and produced very good results in many respects. We believe that our strong financial condition and global business platform position us to both successfully manage through the immediate challenges and create substantial long-term value.”
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