Profile: Reinsurance Group of America Inc (RGA.N)
17 May 2019
Reinsurance Group of America, Incorporated (RGA), incorporated on December 31, 1992, is an insurance holding company. The Company provides traditional life and health reinsurance and financial solutions with operations in the United States, Latin America, Canada, Europe, Africa, Asia and Australia. The Company has geographic-based and business-based operational segments, including U.S. and Latin America; Canada; Europe, Middle East and Africa; Asia Pacific, and Corporate and Other. Its geographic-based operations are segmented into traditional and financial solutions businesses. The Company's subsidiaries include Reinsurance Company of Missouri, Incorporated, RGA Americas Reinsurance Company, Ltd., RGA Reinsurance Company (Barbados) Ltd., Manor Reinsurance, Ltd., RGA Reinsurance Company of South Africa, Limited, Aurora National Life Assurance Company and RGA Reinsurance Company of Australia Limited. Traditional reinsurance includes individual and group life and health, disability, and critical illness reinsurance. 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. Critical illness reinsurance provides event of the diagnosis of a pre-defined critical illness.
U.S. and Latin America
The U.S. and Latin America operations offer traditional life and health reinsurance, reinsurance of asset-intensive products, and financial reinsurance, primarily to the United States life insurance companies. The U.S. and Latin America Traditional segment provides life and health reinsurance to domestic clients for a range of products through yearly renewable term agreements, coinsurance, and modified coinsurance. This business has been accepted under various 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 may 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. 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 policy face amounts, and financial risk cases. Automatic business is generated pursuant to treaties, which requires the underlying policies meet the ceding company's underwriting criteria, although in certain cases such policies may be rated substandard. In addition, several of its the United States and Latin America clients have purchased life insurance policies insuring the lives of their executives. These policies have been issued to fund deferred compensation plans and have been reinsured with the Company.
The Company's U.S. and Latin America Asset-Intensive segment primarily concentrates on the investment risk within underlying annuities and corporate-owned life insurance policies. These reinsurance agreements are structured as coinsurance, 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 the interest credited on the underlying annuity contract liabilities. Annuities are normally limited by the size of the deposit from any single depositor. The Company also reinsures certain indexed annuities, variable annuity products that contain guaranteed minimum death or living benefits and corporate-owned life insurance products. Corporate-owned life insurance normally involves a range of insureds associated with each deposit, and the Company's underwriting guidelines limit the size of any single deposit. The individual policies associated with any single deposit are issued within pre-set guaranteed issue parameters.
The Company's U.S. and Latin America Financial Reinsurance segment assists ceding companies in meeting applicable regulatory requirements, while managing their financial strength and regulatory position. The Company commits cash or assumes regulatory insurance liabilities from the ceding companies. Generally, such amounts are offset by receivables from ceding companies that are repaid by the future profits from the reinsured block of business. The Company structures its financial reinsurance transactions so that the future profits of the underlying reinsured business exceed the amount of regulatory surplus provided to the ceding company.
The Company operates in Canada primarily through its subsidiary, General American Life Reinsurance Company of Canada (RGA Canada). RGA Canada is a life reinsurer in Canada. It assists clients with capital management and mortality, and morbidity risk management, and is primarily engaged in traditional individual life reinsurance, as well as creditor, group life and health, critical illness and disability reinsurance, through yearly renewable term and coinsurance agreements. Creditor insurance covers the balance on personal, mortgage or commercial loans in an event of death, disability or critical illness and is generally shorter in duration than individual life insurance. It is generally composed of facultative and automatic treaty business. Facultative reinsurance involves the assessment of the risks from a medical and financial perspective. The Canada Financial Solutions segment concentrates on assisting clients with longevity risk transfer structures within underlying annuities and pension benefit obligations, and on assisting clients in meeting applicable regulatory requirements, while enhancing their financial strength and regulatory surplus position through financial reinsurance structures. The customers of this segment include life insurers in Canada.
Europe, Middle East and Africa Operations
The Europe, Middle East and Africa segment serves clients from subsidiaries primarily located in France, Germany, Ireland, Italy, the Netherlands, Poland, South Africa, Spain, the United Arab Emirates and the United Kingdom. The principal types of reinsurance for this segment include individual and group life and health, critical illness, disability and underwritten annuities. The Europe, Middle East and Africa Traditional segment provides individual and group life and health products through yearly renewable term and coinsurance agreements, reinsurance of critical illness coverage that provides an event of the diagnosis of a pre-defined critical illness and underwritten annuities. The reinsurance agreements of critical illness coverage occur primarily in the United Kingdom and South Africa and may be either facultative or automatic agreements. Premiums earned from critical illness coverage represented 17.8% of the total net premiums for this segment, as of December 31, 2016. The Europe, Middle East and Africa Financial Solutions segment provides longevity, asset-intensive and financial reinsurance.
Asia Pacific Operations
The Company has a presence in the Asia Pacific region with its offices located in China, Hong Kong, India, Japan, Malaysia, New Zealand, Singapore, South Korea and Taiwan. The Company also has a reinsurance subsidiary in Australia. The principal types of reinsurance for the Traditional Reinsurance segment includes individual and group life and health, critical illness, disability and superannuation through yearly renewable term and coinsurance agreements. The reinsurance of critical illness coverage provides an event of the diagnosis of pre-defined critical illness. Disability reinsurance provides income replacement in an event the policyholder becomes disabled due to accident or illness. Superannuation 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. Premiums earned from traditional reinsurance accounted for 99.7% of the total net premiums for the Asia Pacific operations, as of December 31, 2016. The Asia Pacific Financial Solutions segment provides financial reinsurance, asset-intensive and certain disability and life blocks.
Corporate and Other
The Corporate and Other operations include investment income from invested assets not allocated to support segment operations, proceeds from the Company's capital-raising efforts that have not been deployed and investment related gains or losses. Corporate and Other segment includes results associated with the Company's collateral finance and securitization notes and results from certain subsidiaries and joint ventures that, among other activities, develop and market technology solutions for the insurance industry.
The Company competes with Munich Re, Swiss Re, Hannover Re, SCOR Global Re, Pacific Life Re and Prudential Financial.
Reinsurance Group of America Inc
16600 Swingley Ridge Rd
CHESTERFIELD MO 63017-1706