Reinsurance Group of America (RGA) has announced its financial results for the first quarter of 2024, reporting a net income of $210 million, or $3.16 per diluted share.
This is a decrease from $252 million, or $3.72 per diluted share, recorded in the same period last year. However, the company's adjusted operating income rose to $401 million, or $6.02 per diluted share, up from $349 million, or $5.16 per diluted share, in the previous year.
Net foreign currency fluctuations positively impacted net income to RGA shareholders by $0.07 per diluted share and adjusted operating income by $0.01 per diluted share compared to the prior year.
During the quarter, RGA's consolidated net premiums reached $5.4 billion, marking a 58.8% increase from the first quarter of 2023, despite a $12 million adverse net foreign currency effect.
When excluding this currency impact, consolidated net premiums saw a 59.2% rise. This quarter's performance included a notable $1.9 billion from a single premium pension risk transfer transaction in the US financial solutions business.
Investment income, excluding spread-based businesses, grew by 7.0% primarily due to new business. The average investment yield remained steady at 4.70%, closely matching the 4.71% from the previous year's first quarter. This stability was due to higher new money rates balancing out a decrease in variable investment income.
The effective tax rate for the quarter stood at 22.0% on pre-tax income, which was slightly below the anticipated range of 23% to 24%, mainly attributed to tax benefits in foreign jurisdictions. Similarly, the tax rate on pre-tax adjusted operating income was 22.4%, also below the expected range.
Tony Cheng, president and CEO of RGA, remarked on the quarter's performance, highlighting the group‘s “excellent results” which heralded a great start to the year.
“Our traditional business performed very well and the financial solutions business also had a good quarter. On our in-force transactions, we had a record quarter of $737 million deployed, and we continued to see strong momentum in organic new business activity. Our balance sheet remains strong, and we ended the quarter with excess capital of approximately $0.6 billion. Based on favorable business conditions and RGA's global leadership position, we are optimistic about the future and expect to continue to deliver attractive financial results over time,” Cheng said.
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