RGA Posts Record Quarter on Strong Investment Returns and New Business Growth
The reinsurer reported $8.89 per share in adjusted operating income as it deployed nearly $500 million into in-force transactions while maintaining disciplined capital allocation.
Record Performance Across All Regions
Reinsurance Group of America reported pretax adjusted operating income of $761 million for the second quarter, translating to $8.89 per share after tax, what CEO Tony Cheng called "a record result" (earnings call, 2026-08-07). The company's adjusted operating return on equity reached 18.4% over the trailing 12 months, excluding accumulated other comprehensive income and notable items.
The St. Louis-based reinsurer benefited from "strong investment returns and modestly favorable claims," extending a trend of steady performance across its global operations, Cheng said (earnings call, 2026-08-07).
Investment Income Drives Outperformance
CFO Laura Cockrill, recently promoted to the role after 26 years with the company, highlighted two key drivers of the quarter's success. "Investment results were excellent due to higher new money yields and strong variable investment income," she said, while "earnings continued to benefit from new business we wrote in recent years" (earnings call, 2026-08-07).
The company's variable investment income delivered annualized returns of 15% for the quarter and 11% year-to-date, significantly exceeding the planned 7% return for 2026. Cockrill said the outperformance came from "a combination of realized gains and broad-based alternative equity outperformance" (earnings call, 2026-08-07).
RGA's new money rate reached 6.2%, up from the prior quarter due to higher market yields and increased allocation to investment-grade private assets. This remains above the core portfolio yield of 4.96%, excluding variable investment income.
Geographic Performance and Deal Activity
Asia Pacific produced "another excellent quarter," driven by earnings from new business and additional investment income, with notable deals completed in Hong Kong and Japan (earnings call, 2026-08-07). In EMEA, earnings outperformed expectations with higher investment income and continued new business momentum. U.S. results reflected "meaningful contributions from new business and investment income," with Group business benefiting from earlier pricing actions (earnings call, 2026-08-07).
On an economic basis, claims came in $31 million better than expectations, with $14 million benefiting current period earnings. Since 2023, economic claims have run favorable by $375 million, primarily driven by U.S. Individual Life and Asia Traditional.
Capital Deployment and Shareholder Returns
RGA deployed $158 million into in-force transactions during the quarter, bringing year-to-date investment to nearly $500 million. The company returned $111 million to shareholders, including $50 million in share repurchases and $61 million in dividends, and announced a 5.4% dividend increase for the third quarter (earnings call, 2026-08-07).
The reinsurer ended the quarter with approximately $2.2 billion in excess capital. Total buybacks have reached $225 million since the company restarted its repurchase program in the third quarter of 2025.
Traditional premiums grew 2.2%, or 0.9% on a constant currency basis, impacted in part by in-force management actions. Total premiums excluding pension risk transfer grew 10.5%, or 9.3% constant currency year-to-date.
Cheng expressed confidence in meeting or exceeding intermediate-term financial targets, citing "strong fundamentals" and a "healthy pipeline" (earnings call, 2026-08-07). According to MarginX data, RGA is expected to report third-quarter 2026 results on November 5, 2026.
This article was generated by MarginX from the earnings call on 2026-08-07. It is not investment advice.