RGA's 220.6% Volume Surge to $320M Propels 396th Rank Amid Earnings Miss and Dividend Hike

Reinsurance Group of America (RGA) closed August 1, 2025, with a 7.86% decline in share price, trading at $170.89 after-hours, following a 220.6% surge in daily trading volume to $0.32 billion. The stock ranked 396th in trading activity, reflecting heightened investor scrutiny after the company reported second-quarter earnings that fell short of expectations. Non-GAAP earnings per share (EPS) came in at $4.72, a 13.9% decline year-over-year and below the $5.55 analyst consensus, driven by elevated claims in the U.S. Individual Life and Healthcare Excess segments. Despite the earnings miss, RGA announced a 4.5% increase in its quarterly dividend to $0.93 per share, effective July 29, 2025, signaling confidence in its capital position.

The earnings shortfall was attributed to unfavorable claims experience, particularly in the U.S. market, where large claims offset gains from international operations. Net premiums rose 5.9% year-over-year to $4.15 billion, with Asia Pacific and EMEA regions showing resilience. However, the U.S. and Latin America traditional business reported adjusted operating income before taxes falling sharply from $167 million to $4 million. The company’s effective tax rate spiked to 47% in Q2, far exceeding its 23–24% guidance range, due to valuation allowances on foreign tax credits and restructuring costs. Despite these challenges, RGA’s excess capital nearly doubled to $3.8 billion, bolstered by the Equitable Holdings transaction, which is projected to add $160–170 million in annual pre-tax operating income by 2026.

Management emphasized strategic initiatives, including the “Creation Re” strategy, which focuses on tailored risk and capital solutions, particularly in Asia and the U.S. The company’s financial solutions segment, including longevity and asset-intensive reinsurance, contributed to growth, with Asia Pacific Financial Solutions net premiums more than doubling year-over-year. RGA also highlighted its improved balance sheet, with book value per share rising to $182.37 and deployable capital reaching $3.4 billion. Executives expressed optimism about the pipeline for new reinsurance deals, particularly in Asia Pacific and EMEA, and reiterated confidence in achieving long-term return on equity (ROE) targets of 13–15%.

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