Education
About Us
Working with TipRanks
Follow Us
Reinsurance Group Of America (RGA)
:RGA
Top Page
Reinsurance Group
(NYSE:RGA)75Outperform
Positive Factors
Earnings
RGA expects the reinsurance deal with MFC for $1.9bn of LTC liabilities and $2.2bn of structured settlements to be accretive to 2025 earnings.
Strategic Deals
The reinsurance deal is another positive milestone for the LTC risk transfer space and for other life companies with legacy LTC blocks.
Negative Factors
Liability Exposure
Adjustments for excess capital, liability exposures, and investments are considered in the price target analysis, indicating potential negative impacts on valuation.
Reinsurance Group (RGA) vs. S&P 500 (SPY)
Market Cap
$12.75B
Dividend Yield1.77%
Average Volume (3M)578.67K
Price to Earnings (P/E)18.0
Beta (1Y)0.46
Revenue Growth19.29%
EPS Growth-19.91%
CountryUS
Employees3,900
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)10.70
Shares Outstanding66,024,445
10 Day Avg. Volume548,596
30 Day Avg. Volume578,666
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.59
Price to Cash Flow (P/CF)0.20
P/FCF Ratio0.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$249.67Price Target Upside29.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Reinsurance Group Business Overview & Revenue Model
Company DescriptionReinsurance Group of America, Incorporated (RGA) is a leading global provider of traditional life and health reinsurance, financial solutions, and asset-intensive solutions. The company operates in various sectors, including individual mortality, longevity, asset management, and health reinsurance. RGA's core products and services revolve around offering risk management solutions to insurance companies, helping them to manage financial risk, improve capital efficiency, and enhance product offerings.
How the Company Makes MoneyRGA makes money primarily through the sale of reinsurance contracts to insurance companies. Reinsurance involves the transfer of risk from the primary insurer to RGA in exchange for premiums. The company earns revenue from these premiums while assuming the underlying risks from the primary insurers' portfolios. RGA also generates income through investment activities, as it manages and invests the premiums collected to generate returns. Additionally, RGA provides financial solutions that help insurance companies manage their balance sheets, optimize capital, and achieve regulatory compliance. Significant partnerships with major insurance firms and strategic market positioning contribute to its earnings by enhancing its ability to offer tailored solutions and expand its market reach.
Reinsurance Group Financial Statement Overview
Summary
Reinsurance Group demonstrates strong revenue growth and cash generation capabilities, providing a solid financial foundation. Despite some pressure on net margins and ROE, the company maintains a stable balance sheet and impressive cash flow performance, suggesting resilience and the ability to capitalize on revenue growth.Income Statement
The income statement shows a strong revenue growth with a TTM revenue increase of 19.75% compared to the previous year. The gross profit margin is excellent at 96.20% for TTM, indicating efficient cost management. However, the net profit margin has decreased to 3.27% from 4.92% in the previous year, highlighting some profitability challenges. The EBIT margin stands at 5.21%, with the EBITDA margin reduced to 2.09% due to increased expenses.75
Positive
Balance Sheet
The balance sheet is stable with a debt-to-equity ratio of 0.47, which is reasonable for the insurance industry. The company's equity ratio is healthy at 9.12%, though there's room for improvement. Return on equity has decreased to 6.63%, down from last year's 9.93%, reflecting a decline in efficiency in generating profits from shareholders' equity.82
Very Positive
Cash Flow
Cash flow metrics are robust, with a significant operating cash flow increase to $7.77 billion in TTM. Free cash flow growth is strong at 92.16% year-over-year, indicating excellent cash generation. The operating cash flow to net income ratio is high at 10.84, demonstrating efficient conversion of income into cash.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 21.51B | 18.34B | 16.26B | 16.66B | 14.60B | Gross Profit |
| 21.51B | 17.48B | 15.25B | 15.72B | 13.78B | EBIT |
| 691.00M | 0.00 | 940.00M | 244.00M | 193.00M | EBITDA |
| 691.00M | 1.46B | 947.00M | 1.57B | 772.00M | Net Income Common Stockholders |
| 717.00M | 902.00M | 517.00M | 617.00M | 415.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 80.94B | 12.07B | 55.98B | 63.78B | 60.37B | Total Assets |
| 118.67B | 97.62B | 84.71B | 92.17B | 84.66B | Total Debt |
| 5.04B | 4.43B | 4.36B | 3.85B | 3.96B | Net Debt |
| 1.72B | 1.46B | 1.43B | 899.00M | 553.00M | Total Liabilities |
| 107.77B | 88.45B | 80.47B | 6.73B | 70.30B | Stockholders Equity |
| 10.82B | 9.08B | 4.14B | 13.01B | 14.35B |
| Cash Flow | Free Cash Flow | |||
| 9.37B | 4.04B | 1.32B | 4.16B | 3.29B | Operating Cash Flow |
| 9.37B | 4.04B | 1.34B | 4.18B | 3.32B | Investing Cash Flow |
| -12.54B | -4.07B | -5.69B | -4.63B | -2.68B | Financing Cash Flow |
| 3.66B | 78.00M | 4.44B | 20.00M | 1.25B |
Reinsurance Group Technical Analysis
Negative
193.05
Price Trends
212.11
Negative
215.14
Negative
211.95
Negative
Market Momentum
-5.30
Negative
39.79
Neutral
41.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGA, the sentiment is Negative. The current price of 193.05 is below the 20-day moving average (MA) of 201.81, below the 50-day MA of 212.11, and below the 200-day MA of 211.95, indicating a bearish trend. The MACD of -5.30 indicates Negative momentum. The RSI at 39.79 is Neutral, neither overbought nor oversold. The STOCH value of 41.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RGA.
Reinsurance Group Risk Analysis
Reinsurance Group disclosed 37 risk factors in its most recent earnings report. Reinsurance Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Reinsurance Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $34.48B | 8.21 | 22.02% | ― | 26.24% | -3.87% | |
79 Outperform | $85.90B | 51.88 | 7.25% | 0.70% | 15.21% | 46.99% | |
75 Outperform | $12.75B | 18.01 | 7.21% | 1.77% | 19.29% | -19.91% | |
73 Outperform | $12.05B | 6.95 | 17.69% | 0.65% | 28.22% | -31.48% | |
71 Outperform | $47.38B | 15.77 | -3.30% | 1.95% | -28.56% | 1.14% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
RGA
Reinsurance Group
195.55
15.73
8.75%
AIG
American International Group
81.31
8.03
10.96%
ACGL
Arch Capital Group
91.35
6.89
8.16%
AJG
Arthur J Gallagher & Co
340.79
93.76
37.95%
RNR
Renaissancere Holdings
244.00
17.30
7.63%
Reinsurance Group Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -15.87% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance for RGA in 2024, with record earnings, increased financial targets, and robust new business growth across multiple regions. Despite some unfavorable biometric claims experience and challenges in the US Financial Solutions segment, the positive momentum and strategic achievements indicate a promising outlook.Highlights
Record Operating Earnings
RGA reported adjusted operating earnings of $4.99 per share and record operating EPS of $22.57 per share for the year, up 14% from 2023.
Strong Capital Deployment
For the full year, RGA deployed nearly $1.7 billion into transactions, up 80% from 2023, marking the highest in RGA's history.
Increased Financial Targets
The intermediate-term operating ROE target was increased to 13% to 15%, up from the previous 12% to 14%.
Robust New Business Pipeline
RGA enters 2025 with a strong pipeline and has raised targets for earnings run rate and reaffirmed an 8% to 10% intermediate-term growth target.
Successful In-Force Transactions
Fourth quarter in-force transactions were solid, with $250 million of capital deployed, contributing to long-term financial benefits.
Positive Impact from Balance Sheet Optimization
Record balance sheet optimization delivered $2.1 billion of long-term value.
Lowlights
Unfavorable Biometric Claims Experience
The biometric claims experience was unfavorable by $52 million on an underlying claims experience basis, with a financial impact of $58 million unfavorable.
Challenges in US Financial Solutions
The US Financial Solutions results were below expectations due to the combined runoff of existing annuity business and the slower earnings emergence from new transactions.
Adverse Claims Experience in Asia Pacific
Adverse high net worth claims on fraud contracts in Asia Pacific negatively impacted results.
Company Guidance
In the Reinsurance Group of America's fourth quarter 2024 earnings call, several key financial metrics and strategic goals were highlighted. The company reported adjusted operating earnings of $4.99 per share, with an adjusted operating return on equity (ROE) of 15.4%, excluding notable items. For the full year, RGA deployed nearly $1.7 billion into transactions, surpassing any previous year in the company’s history and achieving record operating EPS of $22.57 per share, a 14% increase from 2023. The company raised its intermediate-term operating ROE target to 13%-15%, up from 12%-14%, and reaffirmed its 8%-10% intermediate-term growth target. RGA highlighted strong momentum in various geographies, particularly in Asia and the US, with significant achievements in the pension risk transfer (PRT) and longevity markets. Additionally, RGA's focus on balance sheet optimization yielded $2.1 billion in long-term value. The company enters 2025 with a robust pipeline, supported by a strategic platform and disciplined risk management approach, with deployable capital estimated at $1.7 billion.Reinsurance Group Corporate Events
Executive/Board ChangesShareholder Meetings
Reinsurance Group Announces Board Member Departure
Neutral
Feb 28, 2025
On February 25, 2025, George Nichols III announced he would not seek re-election to the Reinsurance Group of America’s board of directors at the upcoming annual meeting on May 21, 2025. His decision is not due to any disagreements with the company, its management, or board, indicating a smooth transition without operational disruptions.
Business Operations and Strategy
Reinsurance Group Expands Partnership with Equitable Holdings
Positive
Feb 24, 2025
On February 24, 2025, RGA Reinsurance Company, a subsidiary of Reinsurance Group of America, announced an agreement with Equitable Holdings to reinsure 75% of Equitable’s in-force life insurance liabilities, totaling $32 billion. This transaction, expected to close in mid-2025, broadens RGA’s strategic partnership with Equitable and is anticipated to contribute significantly to RGA’s earnings and operational capabilities. The transaction will involve deploying $1.5 billion of capital and is expected to enhance RGA’s earnings per share with attractive returns.
DividendsFinancial Disclosures
Reinsurance Group Reports Q4 2025 Financial Results
Neutral
Feb 6, 2025
On February 6, 2025, Reinsurance Group of America reported its fourth quarter and full year results, revealing a net income of $148 million for the fourth quarter, or $2.22 per diluted share, compared to $158 million, or $2.37 per share, in the previous year. The company deployed a record $1,676 million into in-force transactions over the year and increased its in-force business margins by $4.6 billion. Despite a favorable impact from foreign currency fluctuations, the full year’s net income of $717 million was below the previous year’s $902 million. However, adjusted operating income excluding notable items reached $1,510 million, indicating strong performance and growth in new business, supported by exclusive opportunities. The board declared a quarterly dividend of $0.89 per share, reflecting continued positive business conditions and financial optimism.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.