Reinsurance Group of America, Incorporated (‘RGA’), an insurance holding company, provides traditional life and health reinsurance, as well as financial solutions, with operations in the U.S., Latin America, Canada, Europe, the Middle East, Africa, Asia, and Australia.
Segments
The company has the following geographic-based and business-based operational segments: the U.S. and Latin America; Canada; Europe, Middle East, and Africa (‘EMEA’); Asia Pacific; and Corporate and Other.
The company’s...
Reinsurance Group of America, Incorporated (‘RGA’), an insurance holding company, provides traditional life and health reinsurance, as well as financial solutions, with operations in the U.S., Latin America, Canada, Europe, the Middle East, Africa, Asia, and Australia.
Segments
The company has the following geographic-based and business-based operational segments: the U.S. and Latin America; Canada; Europe, Middle East, and Africa (‘EMEA’); Asia Pacific; and Corporate and Other.
The company’s segments primarily write traditional reinsurance and financial solutions business that is wholly or partially retained in one or more of RGA’s reinsurance subsidiaries.
Traditional Reinsurance
Traditional reinsurance includes individual and group life and health, disability, long-term care, and critical illness reinsurance, as further described below:
Life reinsurance primarily refers to reinsurance of individual or group-issued term, whole life, universal life, and joint and last survivor insurance policies.
Health and disability reinsurance primarily refers to reinsurance of individual or group health policies.
Long-term care reinsurance provides benefits in the event a person is no longer able to perform some specified activities of daily living.
Critical illness reinsurance provides a benefit in the event of the diagnosis of a pre-defined critical illness.
Financial Solutions
Financial solutions include asset-intensive reinsurance, longevity reinsurance, stable value products, pension risk transfer (‘PRT’) transactions, and capital solutions.
Asset-Intensive Reinsurance
Asset-intensive reinsurance refers to transactions with a significant investment component, which qualify as reinsurance under the U.S. generally accepted accounting principles (‘GAAP’). Asset-intensive reinsurance allows the company’s clients to manage their investment risk and available capital to pursue new growth opportunities.
An ongoing partnership with clients is important with asset-intensive reinsurance because of the active management involved in this type of reinsurance. This active management include investment decisions, investment and claims management, and the determination of non-guaranteed elements. Some examples of asset-intensive reinsurance are fixed deferred annuities, indexed products, unit-linked variable annuities, universal life, corporate-owned life insurance, bank-owned life insurance, unit-linked variable life, immediate/payout annuities, whole life, disabled life reserves, and extended term insurance.
Longevity Reinsurance
RGA’s longevity reinsurance products are reinsurance contracts from which the company earns premium for assuming the longevity risk of pension plans and other annuity products that have been insured by third parties. In many countries, companies are increasingly interested in reducing their exposure to longevity risk related to employee retirement benefits and individual annuities. This concern comes from both the absolute size of the risk and also through the volatility that changes in life expectancy can have on their reported earnings. In addition, insurance companies that offer lifetime annuities are seeking ways to manage their current exposure, while also recognizing the potential to take on more risk from employers and individuals.
The company has entered into reinsurance transactions on existing longevity business for clients in the U.S., Europe, and Canada. These have been arrangements with traditional insurance companies, as well as customized arrangements for companies with pension plan liabilities. The company also works with partners to provide pension plan sponsors solutions that enable them to diversify and protect the benefits provided to the annuitants.
Stable Value Products
The company provides guaranteed investment contracts to retirement plans that include investment-only, stable value wrap products. The assets are owned by the trustees of such plans, who invest the assets under the terms of investment guidelines to which the company agrees. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements.
Capital Solutions
Capital solutions include financial reinsurance and fee-based transactions that assist ceding companies in meeting applicable regulatory requirements by enhancing the ceding companies’ financial strength and regulatory surplus position. While low risk, these transactions do meet the risk transfer guidelines under National Association of Insurance Commissioners (‘NAIC’) reporting rules, providing protection against significantly adverse changes in the business. Financial reinsurance and fee-based transactions do not qualify as reinsurance under GAAP due to the remote-risk nature of the transactions and are reported in accordance with deposit accounting guidelines or other applicable accounting guidelines.
The company obtains substantially all of its revenues through reinsurance agreements that cover a portfolio of life and health insurance products, including term life, credit life, universal life, whole life, group life and health, joint and last survivor insurance, critical illness, disability, longevity, as well as asset-intensive (e.g., annuities), financial reinsurance, and other capital motivated solutions. Generally, the company, through various subsidiaries, has provided reinsurance for mortality, morbidity, lapse, and investment-related risks associated with such products. With respect to asset-intensive products, the company has also provided reinsurance for investment-related risks.
The U.S. and Latin America Operations
The U.S. and Latin America operations market traditional life and health reinsurance, reinsurance of asset-intensive products, financial reinsurance, and other capital motivated solutions, primarily to the U.S. life insurance companies.
Traditional Reinsurance
The U.S. and Latin America Traditional segment provides individual and group life and health reinsurance, including long-term care, to domestic clients for a variety of products through yearly renewable term agreements, coinsurance, and modified coinsurance. This business has been accepted under many different rate scales, with rates often tailored to suit the underlying product and the needs of the ceding company. Premiums typically vary for smokers and non-smokers, males and females, and include a preferred underwriting class discount. Reinsurance premiums are paid in accordance with the treaty, regardless of the premium mode for the underlying primary insurance. This business is made up of facultative and automatic treaty business.
Automatic business is generated pursuant to treaties that generally require the underlying policies to meet the ceding company’s underwriting criteria, although in certain cases such policies rated substandard. In contrast to facultative reinsurance, reinsurers do not engage in underwriting assessments of each risk assumed through an automatic treaty.
The U.S. and Latin America facultative reinsurance operation involves the assessment of the risks inherent in multiple impairments, such as heart disease, high blood pressure, and diabetes; cases involving large policy face amounts; and financial risk cases (i.e., cases involving policies disproportionately large in relation to the financial characteristics of the proposed insured). The U.S. and Latin America operations’ marketing efforts have focused on developing facultative relationships with client companies.
Only a portion of approved facultative applications ultimately result in reinsurance, as applicants for impaired risk policies often submit applications to several primary insurers, which in turn seek facultative reinsurance from several reinsurers. Ultimately, only one insurance company and one reinsurer are likely to obtain the business. The company tracks the percentage of declined and placed facultative applications on a client-by-client basis and generally works with clients to seek to maintain such percentages at levels deemed acceptable. As the company applies its underwriting standards to each application submitted to it facultatively, it generally does not require ceding companies to retain a portion of the underlying risk when business is written on a facultative basis.
Financial Solutions – Asset-Intensive Reinsurance
The company’s U.S. and Latin America Asset-Intensive operations primarily concentrate on the investment risk within underlying annuities and other investment-oriented products. These reinsurance agreements are mostly structured as coinsurance, with some on a coinsurance with funds withheld, or modified coinsurance of primarily investment risk such that the company recognizes profits or losses primarily from the spread between the investment earnings and amounts credited on the underlying contract liabilities.
The company also provides guaranteed investment contracts to retirement plans that include investment-only, stable value wrap products. The assets are owned by the trustees of such plans, who invest the assets under the terms of investment guidelines to which the company agrees. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements.
The company primarily targets highly rated, financially secure companies as clients for asset-intensive business. These companies may wish to limit their own exposure to certain products or blocks of business. Ongoing asset/liability analysis is required for the management of asset-intensive business. The company’s analysis is a cross-discipline analysis between the company’s underwriting, actuarial, investment, and other departments throughout the organization and is completed in conjunction with an asset/liability analysis performed by the ceding companies.
The company, working with partners, provides pension plan sponsors solutions that enable them to diversify and protect the benefits provided to the annuitants.
Financial Solutions – Capital Solutions
The company’s U.S. and Latin America Capital Solutions operations assist ceding companies in meeting applicable regulatory requirements while enhancing their financial strength and regulatory surplus position. The company assumes regulatory insurance liabilities from the ceding companies. In addition, the company has committed to provide statutory reserve or asset support to third parties by funding loans or assuming real estate leases if certain defined events occur. Generally, such amounts are offset by receivables from ceding companies that are repaid by the future regulatory profits from the reinsured block of business. The company structures its financial reinsurance and other capital solution transactions so that the projected future profits of the underlying reinsured business significantly exceed the amount of regulatory surplus provided to the ceding company.
The company primarily targets highly rated insurance companies for capital solutions business. A careful analysis is performed before providing any regulatory surplus enhancement to the ceding company. This analysis is intended to ensure that the company understands the risks of the underlying insurance product and that the transaction has a high likelihood of being repaid through the future regulatory profits of the underlying business. If the future regulatory profits of the business are not sufficient to repay the company or if the ceding company becomes financially distressed and is unable to make payments under the treaty, the company may incur losses. A staff of actuaries and accountants track experience for each treaty on a quarterly basis in comparison to models of expected results.
Customer Base
The U.S. and Latin America operations market life reinsurance and financial solutions primarily to the U.S. life insurance companies. The treaties underlying this business generally are terminable by either party on 90 days written notice, but only with respect to future new business. Existing business generally is not terminable, unless the underlying policies terminate or are recaptured. In 2024, excluding premiums from single premium pension risk transfer transactions, the five largest clients generated approximately 23% of the U.S. and Latin America operation’s gross premiums and other revenues. In addition, 51 other clients each generated annual gross premiums and other revenues, and the aggregate gross premiums from these clients represented approximately 67% of the U.S. and Latin America operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
Canada Operations
The company operates in Canada primarily through RGA Canada. RGA Canada employs its own underwriting, actuarial, claims, pricing, accounting, systems, marketing, and administrative staff in offices located in Montreal and Toronto.
Traditional Reinsurance
RGA Canada assists clients with capital management and mortality and morbidity risk management and is primarily engaged in individual life reinsurance, and to a lesser extent creditor, group life and health, critical illness, and disability reinsurance, through yearly renewable term and coinsurance agreements. Creditor insurance covers the outstanding balance on personal, mortgage, or commercial loans in the event of death, disability, or critical illness and is generally shorter in duration than individual life insurance.
The business is generally composed of facultative and automatic treaty business. Automatic business is generated pursuant to treaties that generally require the underlying policies to meet the ceding company’s underwriting criteria, although in certain cases such policies may be rated substandard. In contrast to facultative reinsurance, reinsurers do not engage in underwriting assessments of each risk assumed through an automatic treaty.
RGA Canada generally requires ceding companies to retain a portion of the business written on an automatic basis, thereby increasing the ceding companies’ incentives to underwrite risks with due care and, when appropriate, to contest claims diligently.
Facultative reinsurance involves the assessment of the risks from a medical and financial perspective. RGA Canada is recognized as a leader in facultative reinsurance, and this has served to maintain a strong market share on automatic business.
Financial Solutions
The company’s Canada Financial Solutions operations primarily concentrate on the investment and longevity risk within underlying annuities and other investment-oriented products. These reinsurance agreements are mostly structured as coinsurance, with some on a coinsurance with funds withheld, or modified coinsurance of primarily investment risk such that the company recognizes profits or losses primarily from the spread between the investment earnings and amounts credited on the underlying contract liabilities. Canada’s Financial Solutions operations also provide capital solutions to assist ceding companies in meeting applicable regulatory requirements while enhancing their financial strength and regulatory position.
The company primarily targets highly rated, financially secure companies as clients for its financial solutions business. These companies may wish to limit their own exposure to certain products or blocks of business. Ongoing asset/liability analysis is required for the management of asset-intensive business. The company’s analysis is a cross-discipline analysis between the company’s underwriting, actuarial, investment, and other departments throughout the organization and is completed in conjunction with an asset/liability analysis performed by the ceding companies.
Customer Base
Clients include most of the life insurers in Canada, although the number of life insurers is much smaller compared to the U.S. In 2024, the five largest clients generated approximately 59% of Canada operation’s gross premiums and other revenues. In addition, 10 other clients each generated annual gross premiums and other revenues, and the aggregate gross premiums and other revenues from these clients represented approximately 35% of Canada operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
Europe, Middle East, and Africa Operations
The Europe, Middle East, and Africa (‘EMEA’) operations serve clients from subsidiaries, licensed branch offices, and/or representative offices primarily located in the UK, Continental Europe, the Middle East, and South Africa. EMEA’s office in the Middle East is located in the United Arab Emirates (‘UAE’).
EMEA’s operations in the UK, Continental Europe, South Africa, and the Middle East employ their own underwriting, actuarial, claims, pricing, accounting, marketing, and administration staffs, with additional support services provided by the company’s staff in other geographical locations.
Traditional Reinsurance
The principal types of reinsurance for this segment include individual and group life and health, critical illness, disability, and underwritten annuities. Traditional reinsurance in the UK, South Africa, Italy, and Germany consists predominantly of long-term contracts, which are not terminable for existing risk without recapture or natural expiry, whereas in other markets within the region, contracts are predominantly short-term, renewing annually.
Financial Solutions
The company’s EMEA Financial Solutions segment includes longevity, asset-intensive, and financial reinsurance. Longevity reinsurance takes the form of closed block annuity reinsurance and longevity swap structures. Asset-intensive business for this segment consists of coinsurance of payout annuities. Financial reinsurance assists ceding companies in meeting applicable regulatory requirements while enhancing their financial strength. Financial reinsurance transactions do not qualify as reinsurance under the U.S. GAAP, due to the low-risk nature of the transactions and are reported in accordance with deposit accounting guidelines.
Customer Base
In 2024, the five largest clients generated approximately 41% of EMEA operation’s gross premiums and other revenues. In addition, 23 other clients each generated annual gross premiums and other revenues, and the aggregate gross premiums and other revenues from these clients represented approximately 41% of EMEA operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
Asia Pacific Operations
The Asia Pacific operations serve clients from subsidiaries, licensed branch offices, and/or representative offices throughout Asia and Australia.
The Asian offices provide full reinsurance services, with additional support services provided by the company’s staff in the U.S. and Canada. In addition, a regional team based in Hong Kong has been established to provide support to the Asian offices to accommodate business growth in the region. RGA Australia employs its own underwriting, actuarial, claims, pricing, accounting, systems, marketing, and administration service.
Traditional Reinsurance
The principal types of reinsurance for this segment written through yearly renewable term and coinsurance treaties include: Individual and group life and health; Critical illness, which provides a benefit in the event of the diagnosis of pre-defined critical illness; Disability, which provides income replacement benefits in the event the policyholder becomes disabled due to accident or illness; Superannuation, which is the Australian government-mandated compulsory retirement savings program. Superannuation funds accumulate retirement funds for employees, and, in addition, typically offer life and disability insurance coverage.
Reinsurance agreements may be either facultative or automatic agreements covering primarily individual risks and, in some markets, group risks.
Financial Solutions
The Asia Pacific Financial Solutions segment includes financial reinsurance, asset-intensive, and certain disability, and life and health blocks that contain material investment risks. Financial reinsurance assists ceding companies in meeting applicable regulatory requirements while enhancing their financial strength. Financial reinsurance transactions do not qualify as reinsurance under GAAP, due to the remote-risk nature of the transactions and are reported in accordance with deposit accounting guidelines. Asset-intensive business for this segment primarily concentrates on the investment risk within underlying annuities and life insurance policies. Asset-intensive transactions are mostly structured to take on investment risk such that the company recognizes profits or losses primarily from the spread between the investment earnings and the interest credited on the underlying annuity contract liabilities.
Customer Base
In 2024, the five largest clients generated approximately 44% of Asia Pacific operation’s gross premiums and other revenues. In addition, 27 other clients each generated annual gross premiums and other revenues, and the aggregate gross premiums and other revenues from these clients represented approximately 42% of Asia Pacific operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
Corporate and Other
Corporate and Other revenues primarily include investment income from unallocated invested assets, investment-related gains and losses, and service fees. Corporate and Other expenses consist of the offset to capital charges allocated to the operating segments within the policy acquisition costs and other insurance income line item, unallocated overhead and executive costs, interest expense related to debt, and service business expenses. Additionally, Corporate and Other includes results from certain wholly-owned subsidiaries that, among other activities, develop and market technology and provide consulting and outsourcing solutions for the insurance and reinsurance industries. The company invests in this area in an effort to both support its clients and accelerate the development of innovative solutions and services to increase consumer engagement within the life insurance industry and hence generate new future revenue streams.
Regulations
RGA Reinsurance, Aurora National, Chesterfield Re, and RGA Life and Annuity are subject to the state of Missouri’s adoption of the National Association of Insurance Commissioners (‘NAIC’) Model Audit Rule, which requires an insurer to have an annual audit by an independent certified public accountant, provide an annual management report of internal control over financial reporting, file the resulting reports with the Director of Insurance, and maintain an audit committee under certain conditions.
The Insurance Holding Company System Regulatory Acts in the U.S. permit the Missouri regulator to request and consider similar information in its regulation of the solvency of, and capital standards for, RGA Reinsurance, Aurora National, Chesterfield Re, and RGA Life and Annuity.
In addition, RGA is subject to a supervisory college, conducted by its group supervisor, the Missouri Department of Commerce and Insurance (‘MDCI’).
RGA Reinsurance is the primary subsidiary of the company subject to Regulation U.S. Valuation of Life Policies Model Regulation (commonly referred to as Regulation XXX).
The company’s subsidiaries domiciled in Bermuda are licensed for long-term business and are classified as Class E insurers, and are therefore subject to extensive regulation and supervision by the Bermuda Monetary Authority (‘BMA’).
The company’s subsidiaries domiciled in Barbados are subject to regulation and supervision by the Financial Services Commission in Barbados.
Additionally, RGA International, operating in the European Economic Area (‘EEA’), is subject to the Solvency II measures developed by the European Insurance and Occupational Pensions Authority and will be required to abide by the evolving risk management practices, capital standards, and disclosure requirements of the Solvency II framework.
Customer Base
The company provides reinsurance products primarily to the largest life insurance companies in the world. In 2024, excluding premiums from single premium pension risk transfer transactions, the company’s five largest clients generated approximately 18% of the company’s gross premiums and other revenues. In addition, 40 other clients each generated annual gross premiums and other revenues, and the aggregate gross premiums and other revenues from these clients represented approximately 48% of the company’s gross premiums and other revenues.
History
Reinsurance Group of America, Incorporated was founded in 1973.
