RGA's Q4 2024 Earnings: Navigating Contradictions in Deployable Capital and Strategic Focus

These are the key contradictions discussed in Reinsurance Group of America's latest 2024Q4 earnings call, specifically including: Deployable Capital Definition, Capital Deployment Opportunities, Deployable Capital and Capital Deployment, and Exclusives as a North Star:



Record Financial Performance:
- Reinsurance Group of America, Incorporated (RGA) reported adjusted operating earnings of $4.99 per share for the fourth quarter of 2024, surpassing a record $22.57 per share for the full year, up 14% from the previous year.
- The company also deployed nearly $1.7 billion into transactions, exceeding any other year in RGA's history.
- This strong performance was driven by successful execution of balance sheet optimization strategies, significant new business transactions, and strategic growth in key markets worldwide.

In-force Transactions and New Business:
- RGA completed $250 million of capital deployment into in-force transactions in the fourth quarter, contributing to a full-year total of nearly $1.7 billion.
- Notable growth was observed in Asia Traditional business, particularly in Mainland China, and in the U.S. Traditional market, with significant transactions closed in both areas.
- The success was attributed to RGA's strategic focus on client relationships, innovative transaction structures, and its ability to reinsure both sides of clients' balance sheets.

Capital Management and Deployment:
- The company ended the year with $1.7 billion of deployable capital, reflecting management's estimate of capital available for deployment over the next 12 months.
- RGA continued to optimize its balance sheet, with another in-force management action reducing exposure to underperforming blocks and enhancing risk management.
- This strategy is supported by strong financial performance and a robust pipeline of new business opportunities.

Earnings and Growth Targets:
- RGA increased its intermediate-term operating ROE target to 13% to 15%, up from its previous target range of 12% to 14%.
- The company also reaffirmed its 8% to 10% intermediate-term earnings growth target on a higher run rate.
- These updates are based on strong quarterly and annual results, driven by significant new business acquisitions and strategic execution across all regions.