RGA sees Q2’25 net income decline despite net premium increase

Reinsurance Group of America (RGA), a provider of life and health reinsurance, has announced its financial results for the second quarter of 2025, reporting net income available to shareholders of $180 million, a decrease compared to last year’s $203 million.

RGA adjusted operating income and adjusted operating income, excluding notable items, for the second quarter totalled $315 million, compared with $365 million the year before.

At $4.2 billion, net premiums saw a 5.9% increase in Q2 2025 from the $3.9 billion reported in the same period last year, with a favourable net foreign currency effect of $45 million.

According to the reinsurer, net premiums for the prior-year quarter included a contribution of approximately $280 million from a single premium pension transfer transaction in the U.S. Financial Solutions business.

Net foreign currency fluctuations had a favourable effect of $0.08 per diluted share on net income available to RGA shareholders, and $0.12 per diluted share on adjusted operating income, both as compared with the prior year.

Tony Cheng, President and Chief Executive Officer, attributed the lower-than-expected operating result to “claims volatility in our U.S. Individual Life business.”

He elaborated that the U.S. Individual Life segment experienced a high level of large claims, which offset the favourable performance seen in the first quarter.

Cheng added: “However, we continue to execute successfully on our strategy, maintaining very good momentum overall and benefiting from the earnings diversity that comes from our global platform. New business in the quarter remained strong, and our Creation Re strategy continues to perform above expectations.

“Additionally, we continue to benefit from our balance sheet optimization efforts, as our estimated excess capital increased from $1.9 billion to $3.8 billion in the quarter, reflecting additional capital credit received on the value of a portion of our in force business.

“When factoring in the transaction with subsidiaries of Equitable Holdings, Inc., which closed earlier today, our pro forma excess capital is estimated to be $2.3 billion. Considering this, and our estimated deployable capital of $3.4 billion, we are well positioned to continue to fund our growth and return capital to shareholders through dividends and share repurchases.”

The company’s Asia-Pacific (APAC) and Europe, Middle East and Africa (EMEA) segments, along with its U.S. Financial Solutions business, delivered strong results.

The CEO added: “U.S. Individual Life experience reflected a high level of large claims, offsetting the favourable experience in the first quarter. U.S. Group business saw higher than expected claims in the healthcare excess line, consistent with industry trends.

“We deployed $276 million into in force transactions, with good diversification across products and geographies. Our pipeline remains attractive. As mentioned earlier, the Equitable transaction has closed, and we are excited about the long-term value that this transaction is expected to provide RGA.”

Cheng concluded: “Looking forward, we remain optimistic about our business prospects. RGA is well positioned in its markets, with a proven strategy. We point to a long track record of successful execution, which has produced strong financial results, and we expect to continue to deliver attractive financial results in the future.”