RGA Q1 2026 Earnings Transcript

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DATE

Friday, May 8, 2026 at 10:00 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Tony Cheng
• Executive Vice President and Chief Financial Officer — Axel Philippe Andre
• Executive Vice President, Global Chief Risk and Insurance Officer — Jonathan William Porter

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TAKEAWAYS

• Pretax Adjusted Operating Income -- $611 million reported for the quarter.
• Adjusted Operating EPS -- $6.97 per share after tax for the quarter.
• Adjusted Operating ROE (TTM, ex-notable items) -- 16.2% for the trailing twelve months.
• Traditional Premium Growth -- 5% increase, with EMEA and Asia Pacific as primary contributors.
• U.S. Traditional Premium Growth -- 1% increase, as prior-year strategic recaptures impacted the comparison.
• Share Repurchases -- $50 million this quarter; $175 million since buyback reinstatement in Q3 of last year.
• Excess Capital -- Estimated at $2.4 billion at quarter-end.
• Next Twelve Months Deployable Capital -- Estimated at $2.9 billion.
• Capital Deployment to In-Force Transactions -- $338 million deployed during the quarter.
• Economic Claims Experience -- Favorable by $117 million, with $4 million recognized in current-period income.
• Unrecognized Favorable Economic Claims -- $343 million to be recognized in future periods, with approximately $20 million annual future income impact.
• Book Value per Share (ex-AOCI and B36 embedded derivatives) -- Increased to $167.92; represents a 9.9% CAGR since the beginning of 2021.
• Effective Tax Rate -- 24.4% on adjusted operating income before taxes, above expectations due to jurisdictional mix and tax credit valuation allowance.
• Variable Investment Income -- Slightly below 7% target by approximately $8 million, reflecting a muted real estate market.
• Non-Spread Book Yield (excluding variable investment income) -- 4.85% this quarter.
• New Money Rate -- 5.64% for the quarter, driven by allocation to high-quality public corporate bonds.
• Private Credit Portfolio Allocation -- Approximately 9% of the total portfolio; majority investment grade and highly diversified.
• Dividend and Buyback Target -- Management expects to return 20%-30% of after-tax operating earnings to shareholders over the long term.
• Planned Debt Reduction -- $400 million of excess capital targeted to reduce financial leverage during 2026.
• Asia Pacific Activity -- Notable transaction closures in Japan covered both in-force and flow deals combining asset and biometric risk.
• EMEA Longevity Transactions -- Additional deals completed leveraging client relationships, with model expected to scale.
• Run-Rate EPS Estimate -- Management views first-quarter run-rate at approximately $6.70 per share, after adjusting for non-core impacts.

SUMMARY

The transcript reveals management’s ongoing focus on deploying capital into high-quality, risk-adjusted opportunities and returning excess to shareholders through both buybacks and dividends. Speakers described significant flexibility in global capital allocation, highlighted by selective in-force deal activity in Asia and scalable solutions in EMEA. The call clarified that no material changes in underlying mortality or claims trends require new assumptions, and favorable claims outcomes have not yet fully flowed through financial results. Management stated planned completion of Ruby Re sidecar deployment, with ULSG and long-term care risk exposures remaining under 10% of the balance sheet. Executives reiterated that U.K. regulatory changes and U.S. asset adequacy testing developments are not expected to have a material impact on the company’s structures or financial results.

• The company stated it will remain “opportunistic” with share repurchases as part of its overall capital return framework.
• Executives noted that most of the favorable economic claims experience for the quarter was generated by U.S. individual life business, while capped cohorts in EMEA partially offset current-period results.
• Management clarified the pattern of EMEA earnings tied to an annual premium treaty, with first-quarter accounting recognition followed by claims emerging throughout the year.
• Speakers explained that the correction of $200 million to subsidiary regulatory capital did not impact aggregate capital strength or flexibility to pursue growth or repurchases.
• Executives stated their preference for transactions involving both asset and biometric risk, highlighting this as a market “sweet spot” with less competitive pressure than pure asset-intensive deals.

INDUSTRY GLOSSARY

• B36 embedded derivatives: Derivatives related to policyholder contracts, whose fair value must be reported in compliance with GAAP, affecting book value metrics.
• Uncapped/capped cohorts: In reinsurance, blocks of business grouped by different caps on claim experience; “uncapped” means no upper limit to claim impact, “capped” applies a maximum.
• Ruby Re: RGA’s dedicated third-party reinsurance vehicle (“sidecar”) designed for capital deployment in complex life and health reinsurance blocks.
• ULSG: Universal Life with Secondary Guarantees, a life insurance product with embedded minimum benefit guarantees.
• LDTI: Long-Duration Targeted Improvements, a U.S. accounting standard changing how insurers recognize and disclose liability and profit patterns for long-duration insurance contracts.

Full Conference Call Transcript

Tony Cheng: Good morning, everyone, and thank you for joining us for today’s call. We appreciate your continued interest in Reinsurance Group of America, Incorporated. As you have seen from our first quarter results, we delivered a strong start to the year with excellent performance across many regions and businesses. The quarter reflects disciplined execution, strong underlying fundamentals, and the benefits of the diversified global platform we have built over time. Building on our strong 2025 performance, we believe our results this quarter further demonstrate that we are successfully executing on our strategy. Our focus remains on well-balanced earnings growth, capital allocation, and delivering attractive returns over the long term.

Looking at the financial results, the strength in the quarter was broad-based across our regions and products. I will highlight a few specifics in the quarter. Asia Pacific had another strong quarter, driven by ongoing growth and strong execution. We closed a number of notable transactions in the region, particularly in Japan, spanning both in-force and flow deals that include both asset and biometric risk. EMEA’s earnings continue to reflect good new business, with results exceeding expectations. Performance was supported by favorable overall experience and continued momentum in longevity. We closed additional longevity transactions during the quarter by leveraging deep, long-standing client relationships, and we remain optimistic given our leadership position and differentiated competitive strengths.

In the U.S., adjusted operating performance was strong, supported by favorable claims experience and the contribution from recent new business. Activity in U.S. individual life remains robust, demonstrating sustained momentum in large part driven by our strategic underwriting initiative. I am pleased with our U.S. group results, which are in line with our 2026 expectations. Moving to claims experience in the quarter, our economic claims experience was favorable across all regions. While one quarter of claims experience should not be overly emphasized, when considered as part of the cumulative experience since 2023, the favorable experience demonstrates the strength of our pricing, underwriting, and risk selection.

Additionally, we continue to see profit emergence from business written and capital deployed over recent years. This profit emergence is tracking in line with expectations as asset portfolios are repositioned prudently over time and claims continue to be in line with expectations. This quarter was another demonstration of the strategic optionality in our global platform. Most of the deployment into in-force transactions was in Asia, where we saw the most attractive opportunities from a risk-reward perspective, primarily driven by our range of innovative solutions. Additionally, we continue to have very good momentum with our flow business in the U.S., where our value-added underwriting solutions and outsourcing efforts set us apart from competitors.

Equally important to our flexibility is that we are comfortable not proceeding with transactions that do not meet our risk-return trade-off. That discipline continues to be a key feature of both our strategy and our culture. Now I want to take a brief step back from the details of the quarter and reinforce how we think about Reinsurance Group of America, Incorporated’s positioning and strategy. At its core, our approach is straightforward. We focus on life and health risk. We operate globally, and we deploy capital selectively where we believe we have competitive advantages and can earn attractive risk-adjusted returns.

Specifically, Reinsurance Group of America, Incorporated has several unique strengths, including strong biometric expertise, asset management capabilities, a global platform, a market-leading brand, and flexibility to partner across the industry. What is critical is that these strengths do not operate in isolation. They reinforce one another, creating a competitive advantage that is difficult to replicate. When we combine this competitive advantage with a proactive business approach, we create win-win transactions, generating higher returns for Reinsurance Group of America, Incorporated and greater value for our clients. Let me share a few examples from this quarter. In North America, we extended a long-standing U.S. client relationship into Canada, where the client was seeking a reinsurer to partner on evolving product offerings.

Our global platform enabled an exclusive relationship while our biometric expertise and collaborative partnership model differentiated us and drove a successful outcome. In Asia, we closed multiple coinsurance transactions by leveraging our ability to reinsure both sides of the balance sheet, combining asset management and biometric expertise. These wins across both flow and in-force transactions reflect the strength of our local presence and our position as a trusted counterparty. Lastly, in EMEA, we completed an exclusive transaction with an insurance company that leveraged our biometric expertise to unlock value from its in-force portfolio. The structure generates incremental capital to support the partner’s growth, and we expect to replicate this model in EMEA and other parts of the world going forward.

On the capital front, we again repurchased shares, allocating $50 million this quarter. A balanced use of excess capital is an important part of our strategy to generate long-term shareholder value. Looking ahead, our confidence in the outlook for 2026 and beyond remains high. The fundamentals of our business are strong. Our pipeline is healthy. Our competitive advantages are durable. And our strategy is consistent with what has driven value creation at Reinsurance Group of America, Incorporated for the past five decades. We are confident that our disciplined execution of our strategy will enable us to deliver on our intermediate-term financial targets and long-term value for shareholders.

With that, I will turn the call over to Axel Philippe Andre to walk through the financials in more detail.

Axel Philippe Andre: Thanks, Tony. Reinsurance Group of America, Incorporated reported pretax adjusted operating income of $611 million for the quarter, or $6.97 per share after tax. For the trailing twelve months, adjusted operating return on equity, excluding notable items, was 16.2%. We delivered another strong quarter, reflecting disciplined execution across our businesses. Results were driven by continued earnings emergence from business written in recent years, favorable underlying experience, and solid investment performance. As Tony mentioned, we continue to leverage our strategic advantages, reinforcing our confidence in delivering on our targets in 2026 and beyond. We deployed $338 million into in-force transactions in the quarter.

We remain selective in our capital deployment and are pleased with the quality and expected returns of new business generated. On the traditional side, our premium growth was 5% compared to prior year, which benefited from good growth across EMEA and APAC. In the U.S., traditional premium growth was up approximately 1% over prior year, as the strategic recapture of certain treaties as a result of management actions in 2025 impacted results. Overall, we continue to see very strong momentum in our strategic underwriting initiatives, including record volumes in the quarter and pipeline opportunities for block transactions, which reinforce Reinsurance Group of America, Incorporated’s biometric expertise advantage.

It is worth reminding everyone that the premium generated from the Equitable transaction last year is included in our Financial Solutions results and not reflected in the traditional premium growth metrics. We completed $50 million of share repurchases in the quarter, bringing total repurchases to $175 million since we reinstated buybacks in the third quarter of last year. Our capital position remains strong, and we ended the quarter with estimated excess capital of $2.4 billion and estimated next twelve months deployable capital of $2.9 billion.

The effective tax rate for the quarter was 24.4% on adjusted operating income before taxes, above the expected range due to the jurisdictional mix of earnings and an increase in the valuation allowance on tax credits. Turning to biometric claims experience, economic claims experience was favorable by $117 million in the quarter, with a corresponding favorable current-period financial impact of $4 million. Over half of the economic experience was driven by U.S. individual life, and every region had favorable experience. Most of this experience was deferred to future periods due to uncapped cohorts, and the portion included in the current-period income was partially offset by unfavorable experience in EMEA traditional capped cohorts.

Claims experience in U.S. group was in line with updated expectations, and we continue to believe that our remedial actions taken last year will generate solid results in 2026. Taking a step back, since the beginning of 2023, economic claims experience for the total company has been favorable by $343 million. As a reminder, the favorable economic experience that has not yet been recognized through the accounting results will be recognized over the remaining life of the business. On slide seven, we highlight certain key considerations for the quarter, including actual-to-expected biometric claims experience, variable investment income, and other key items. After considering these impacts, we view run-rate EPS for the first quarter at approximately $6.70 per share.

As a reminder, for 2026, we are assuming a 7% variable investment income return. This is below our longer-term expectations of 10% to 12%, primarily due to a still muted environment for real estate sales, which is when income from these investments is recognized. As indicated in this table, there were no material in-force management actions in the quarter. We remain active in managing our in-force blocks, but the timing and size of these actions is difficult to predict. Moving to the quarterly segment results, the U.S. and Latin America Traditional results reflected favorable claims experience in individual life and good individual health results. As mentioned, experience in U.S. group was in line with expectations. The U.S.

Financial Solutions results were in line with our expectations. Canada Traditional results reflected favorable individual life and group claims experience, while the Canada Financial Solutions results were in line with expectations. In the Europe, Middle East, and Africa region, the Traditional results reflected the timing benefit on an annual premium treaty, partially offset by unfavorable claims experience in capped cohorts. Economic claims experience was favorable. EMEA Financial Solutions results reflected the contribution from recent new business and favorable overall experience. Turning to our Asia Pacific region, Traditional had another good quarter, reflecting favorable overall experience and the benefits of ongoing growth. Financial Solutions results reflected the timing impact of new business portfolio repositioning and unfavorable foreign currency impacts.

Finally, the Corporate and Other segment reported an adjusted operating loss before tax of $65 million, primarily due to the timing of certain compensation expenses and slightly unfavorable variable investment income. Moving to investments, the non-spread book yield, excluding variable investment income, was 4.85% in the first quarter. While the new money rate was lower at 5.64% in the quarter, primarily driven by tactical allocation towards high-quality public corporates, it remains above our portfolio yield, thus providing a continued tailwind to our overall book yield. Total company variable investment income was modestly below our 7% yearly return expectations, by around $8 million. Overall, our portfolio quality remains high, and credit impairments are favorable relative to our long-term expectations.

Before moving on, I want to spend a couple of minutes discussing our private credit strategy. We included updated information on our portfolio in the earnings presentation. Our allocation to private credit has been a measured and important part of our long-term investment strategy for many years, and we manage this exposure through a rigorous asset-liability management framework. We invest selectively in a diverse range of private credit assets when they are a good match for our stable liability profile and deliver attractive risk-adjusted returns through incremental illiquidity premiums with greater downside protection.

Private credit represents approximately 9% of our total portfolio and is highly diversified across many issuers and multiple asset categories, including investment-grade private placements, private asset-backed securities, fund finance, infrastructure debt, and middle market loans. The majority of our private assets are rated investment grade. In addition, the vast majority of our below-investment-grade private assets are comprised of first-lien senior secured loans underwritten by our experienced internal team, which provides better visibility into underwriting, tighter covenants, stronger downside protection, and more control over credit selection. Overall, fundamentals across the portfolio remain healthy. Credit performance has been in line with expectations, and we manage this portfolio with the risk discipline you expect from Reinsurance Group of America, Incorporated.

Turning now to capital, our excess capital ended the quarter at an estimated $2.4 billion, and our next twelve months deployable capital was an estimated $2.9 billion. It is important to note that we manage capital across multiple frameworks, including internal economic capital, regulatory capital, and rating agency capital frameworks. We maintain ample regulatory capital across jurisdictions we operate in while supporting strong ratings that underpin our counterparty strength. Across these frameworks, we remain very well capitalized. Additionally, we will continue to balance capital deployed into the business with returning capital to shareholders through quarterly dividends and share repurchases.

We intend to remain opportunistic with share repurchases and expect total shareholder return of capital to range between 20% to 30% of after-tax operating earnings over the long term. We also expect to allocate $400 million of excess capital to reduce financial leverage during 2026. During the quarter, we continued our long track record of increasing book value per share. As shown on slide 16, our book value per share excluding AOCI and the impact from B36 embedded derivatives increased to $167.92, representing a compounded annual growth rate of 9.9% since the beginning of 2021. To summarize, this was another strong quarter for us, and we are confident in our ability to achieve our intermediate-term financial targets.

The underlying fundamentals across our business are solid, new business momentum is healthy, and investment performance continues to support earnings growth. Capital deployment remains disciplined, focused on transactions that meet our return thresholds and fit our risk framework, while continuing to return capital to shareholders. Our priorities are unchanged: deliver attractive, sustainable returns while appropriately managing risk and deploying capital where we see the best long-term value. This concludes our prepared remarks. We will now open the call for questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. Please limit yourself to only one question and one follow-up. At this time, we will pause momentarily to assemble our roster. The first question comes from Suneet Kamath with Jefferies. Please go ahead.

Suneet Kamath: Great. Just wanted to start on capital deployment. In the past, we have spoken about needing $1 billion of deployment to hit the 8% to 10% EPS growth. Considering the debt maturity that is coming, your excess is $2 billion, your deployable is $2.5 billion. Do you think you have enough opportunities to meet or exceed that $1.5 billion, or is that still the base case for this year?

Axel Philippe Andre: Thanks, Suneet. When we look at capital deployment for the quarter, we are tracking right in line with our expectations. As always, we will continue prioritizing quality over quantity, just as we did this quarter. We are pleased with the types of transactions and the return expectations that we are generating. We have strategic optionality embedded in our platform, and we will continue to allocate capital towards the most compelling opportunities across the globe, as well as returning capital to shareholders. We believe that we can achieve our financial targets through this combination of capital deployment and return of capital to shareholders.

Suneet Kamath: Okay. And then on the Equitable transaction, now that Equitable and Corebridge are planning to merge, does that impact your flow reinsurance agreement that you have with Equitable, and are there any other concentration issues that we should think about as those two companies come together?

Axel Philippe Andre: Thank you for the question. We do not want to comment too much on any one client. Obviously, we have a strong partnership with Equitable and expect this to continue. We remain very pleased with the transaction executed last year and do not expect any impacts as a result of this news, either on the in-force or the flow transaction.

Tony Cheng: To bring it up a level, for the U.S. overall, we remain very confident as we continue to benefit from our strategic positioning around our biometric and underwriting strengths.

Operator: The next question comes from Analyst with UBS. Please go ahead.

Analyst: Hi. Thank you. Good morning. Just wondering if you could dig into the mortality favorability in the U.S. It has persistently been surprisingly favorable. I feel like you must have among the best data across the space in terms of the underlying trend. Could we dig into that a little bit?

Jonathan William Porter: Hi. I am happy to address that. Speaking to our own experience, our Q1 claims experience was favorable, and that was due to a lower frequency of claims, both large claims and non-large claims. Uncapped cohorts were favorable and capped cohorts were in line. I would say there are no other significant trends to call out in our own data or experience that we saw in the quarter. Bringing it up to a population level, the flu season was more moderate this year than last year based on CDC data and peaked in December. Population mortality, when you look over 2024–2025, continues to be modest. We are seeing reasonable trends there.

Analyst: What I really mean is, over a longer-term period, Axel mentioned a $300 million economic benefit that you have not recognized yet. I know there is probably an element of COVID pull-forward and there are GLP-1s coming on. That was more of what I meant.

Jonathan William Porter: Certainly, we are pleased to see that there are some favorable tailwinds in the future on the horizon. You mentioned GLP-1s specifically. To reiterate, we have not made any material changes to our assumptions due to GLP-1s, but the benefit we expect to see does give us more confidence that our existing mortality improvement assumptions will be realized in the future. We continue to see signs of positive momentum related to GLP-1s in 2026, including the recent approval of oral GLP-1s reducing prices and broadening access, including Medicare and Medicaid coverage in the U.S. That is a trend we continue to follow and, if and when appropriate, we would reflect that in our assumptions.

Analyst: Thanks. And on the excess capital, I saw in the slide deck you mentioned there was a $200 million negative impact from a correction to subsidiary regulatory capital. Could you run through that math and what drove it?

Axel Philippe Andre: Happy to take that. Each year, we update our excess capital estimates as part of the completion of our annual regulatory and rating agency capital models. The adjustment discussed on the slide reflects, first, a correction in one of our subsidiary regulatory capital calculations; second, annual experience and assumptions updates; and third, changes to subsidiary excess capital from finalizing year-end calculations as well as additions to the entities included in the analysis. Importantly, we remain very well capitalized across all our legal entities and capital frameworks. That provides us with significant financial flexibility to deploy capital into the business and return capital to shareholders.

Operator: The next question comes from Wesley Collin Carmichael with Wells Fargo. Please go ahead.

Wesley Collin Carmichael: Good morning. My first question is on earnings seasonality. In the past, especially before LDTI, we thought about the first quarter as being weaker from an earnings perspective, particularly from mortality in the U.S. In a post-LDTI world, how should we think about the seasonality in terms of the first quarter versus the rest of the year?

Jonathan William Porter: Thanks for the question. We do expect some higher claims in the winter months, as you point out, both from the flu and from other causes. Our assumptions reflect the seasonality, which is incorporated into our reserves. An average flu season is essentially built in as a higher Q1 claims expectation. Under LDTI, we would expect any differences to that higher expectation to be partially offset from an earnings perspective, although this is dependent on how the experience emerges by type of cohort. This seasonality assumption is something we routinely review as part of our annual assumption process.

Because we take the seasonality into account, it largely levelizes what you would expect from an earnings perspective, other than potentially some seasonality that comes through on uncapped cohorts. Under LDTI, there should be less earnings impact from that than you would have seen in the past.

Operator: The next question comes from Wilma Jackson Burdis with Raymond James. Please go ahead.

Wilma Jackson Burdis: Good morning. Just to make sure I understand correctly, the $26 million benefit will slip to be negative, ending the year at zero. Is that correct on the margin? And then will it come out evenly across the next three quarters? Help us understand that piece a little bit. Thanks.

Axel Philippe Andre: Hi, Wilma. For the EMEA segment, this relates to an annual premium treaty where the premium from an accounting perspective is recognized all in the first quarter, while the claims come through the four quarters. This is something that we had already last year and before. Assuming those treaties stay in place, that pattern of earnings would continue in the future.

Wilma Jackson Burdis: Thank you. And could you talk a little about what you are seeing on new in-force block transactions? There has been a lot of strong interest in the market in general, but maybe some ebbs and flows. What are you seeing on spread expectations and the level of interest in more complex deal structures?

Tony Cheng: Sure. There is a lot there. Let me start with our pipeline. We see the pipeline remain strong, high quality, and, very importantly, diversified across the globe. In Asia, activity continues to be strong both in product development—serving the middle class—and in Financial Solutions as clients adjust to new capital frameworks in markets such as Japan and Korea. In the U.K. longevity market, we continue to be a market leader and are seeing continued business momentum driven by our immensely strong team. In the U.S., we continue to benefit from strategically repositioning around our biometric and underwriting strengths, as well as the industry realignment that is taking place.

I want to reiterate that our focus is very much on our sweet spot, which combines both biometric and asset capabilities, and we will not hesitate to walk away from any transactions that do not meet our risk-return trade-off.

Operator: The next question comes from Thomas George Gallagher with Evercore ISI. Please go ahead.

Thomas George Gallagher: Good morning. First question is on the slower growth you saw in U.S. Traditional. Can you talk about what is going on in that market more broadly? Is the market slowing somewhat? Are companies ceding less, or has that been stable? I am wondering if the broader industry is becoming more constructive on mortality and whether companies might look to retain more themselves. Thanks.

Axel Philippe Andre: Hi, Tom. I can get started and pass it to Tony for more color. In 2025, we had some strategic recaptures as part of management actions that reduced ongoing premiums, making the year-over-year comparison more challenging. This is a good thing, because the recaptures tended to be lower quality and less profitable blocks, and this also reduces volatility. Let me remind you that the premiums associated with the Equitable block are now reported in the Financial Solutions segment. Ultimately, we are pleased with our U.S. Traditional business as we continue to improve the overall risk profile and as we see strong momentum in our strategic underwriting initiatives.

We are confident that this performance will be reflected in our results over time.

Tony Cheng: Not much to add to what Axel said, except that we had a very strong 2025 in U.S. Traditional. The type of transactions we focus on leverage our underwriting and biometric capabilities. That momentum continues into 2026. We remain very optimistic about our prospects in U.S. Traditional—winning very high-quality business at very good returns and adding a lot of value to our client partnerships.

Thomas George Gallagher: Do you have any sense of cession rates for the industry more broadly? Has that been stable or changing?

Tony Cheng: We do not have that at our fingertips. We focus on delivering comprehensive solutions—product development, underwriting solutions, and more. By focusing on solving our clients’ problems and creating win-win solutions, we feel we can control our own destiny, independent of broad cession rate trends.

Operator: The next question comes from Joel Robert Hurwitz with Dowling Partners. Please go ahead.

Joel Robert Hurwitz: Earlier this year, you brought up the prospect of potentially launching a sidecar for complex liabilities like long-term care and universal life with secondary guarantees. Could you provide an update on that potential vehicle and whether you are seeing parties interested in committing capital to it?

Axel Philippe Andre: Thanks, Joel. Third-party capital remains a core element of our capital management strategy. It enhances our flexibility to fund growth and return capital to shareholders, while also generating incremental fee income for shareholders over time. Our current focus is on fully deploying Ruby Re, which is still expected this year. There are pros and cons to various sidecar structures and types of liabilities, but it is too early to be specific as we focus on completing Ruby Re capital deployment. We will update you as appropriate. As it relates to ULSG and long-term care risks, these risks are less than 10% of our balance sheet today, and we expect it to remain this way going forward.

Joel Robert Hurwitz: On Ruby Re, how much capital do you have left to deploy this year?

Axel Philippe Andre: We have the last piece of capital identified in terms of the blocks of business that are going to go to the sidecar, and we are in the process of getting that approved by the investors and working through the process with our regulator.

Operator: The next question comes from Analyst with JPMorgan. Please go ahead.

Analyst: Thank you. First, there is a widely held view that as the P&C cycle softens, the large multiline European reinsurers tend to be more competitive on the life side. Do you agree with that view? If so, how do you think competition from that part of the market unfolds given price softening in P&C?

Tony Cheng: I have heard both sides of that view as P&C cycles soften or harden. Addressing competition more broadly, in our sweet spot—transactions with both biometric and asset risk—competition continues to be very stable. We focus on this area by leveraging our key strengths, our strong local presence and relationships. In some ways, we feel Reinsurance Group of America, Incorporated is unique—one of one—in that space. In addition, with our global platform, we have strategic optionality to pursue the best risk-adjusted opportunities around the world. With that in mind, we remain very excited about our business momentum and disciplined positioning in the reinsurance market.

Analyst: My second question is also about competition but from a different angle. An increasing number of U.S. primary insurers are setting up internal reinsurance captives to generate capital efficiencies, and some have started writing third-party business. Some have set up sidecars not that different from Ruby Re. What is your view on this trend? Is it just enormous market opportunity, or is it an ambiguous sign of more competition entering this space?

Tony Cheng: We have definitely seen increased competition in various markets, but that competition is really more for vanilla asset-intensive transactions. That is what many of those vehicles are being set up for. Our sweet spot is transactions that have both asset and biometric risk. We feel we are uniquely positioned to do that. Whether in Japan, where the market is large, or in the U.S., we are very optimistic about our ongoing momentum. Q1 was a strong proof point of our success in executing on our strategy in this area.

Operator: The next question comes from Analyst with Barclays. Please go ahead.

Analyst: Good morning. On in-force management actions you have done over time, it felt like there was a heightened element over the last few years. Where are we in that time frame—still more to do, or more normal course now? Specifically on older-age experience, are you still seeing the need to do actions on those blocks?

Axel Philippe Andre: Managing our in-force business is a core part of our strategy and will continue to be. We have had very good success with these efforts over the past several years. In the first quarter, we did not have any notable in-force management actions. We expect to remain active going forward, but the timing and size of these actions are unpredictable. We are projecting a more limited financial impact compared to recent experience in the near term.

Analyst: Thanks. Second, in the U.K., there is proposed regulation around captive reinsurance and limiting some uses of that. Is there anything around that could be an opportunity or a risk to your structures? How might that impact you?

Jonathan William Porter: I believe you are referring to the recent PRA information related to counterparty charges. It is very new, but at this point we do not expect it to have a big impact on our business. It is related to funded reinsurance, and the majority of our longevity business in the U.K. is done on a swap basis, where we take just the longevity risk and not the asset risk. About 90% of our in-force longevity block is on a swap basis.

Initial industry takeaways are that there might be a compression of overall economics for ceding companies due to the higher charge, but there will also be increased linkage to reinsurer credit quality and collateral strength that should favor strong counterparties like Reinsurance Group of America, Incorporated.

Operator: There is a follow-up question from Wesley Collin Carmichael with Wells Fargo. Please go ahead.

Wesley Collin Carmichael: Apologies. Can you hear me? My follow-up is on the economic biometric experience—the $343 million that is going to be recognized in future periods. Is it material over the next twelve months? How much of that comes in, or is the duration longer so that it is probably pretty small?

Axel Philippe Andre: Thanks for the question. The difference between the economic claims experience that has not yet been recognized through the accounting results has grown in recent periods and will come through the accounting results over a long time period. The current annual impact to future earnings is baked into our expectations. It is approximately $20 million a year.

Wesley Collin Carmichael: Got it. Thanks, Axel. And a regulatory follow-up: over the past year and a half, the NAIC has worked on Actuarial Guideline 55 on asset adequacy testing for reinsurance. I think it is disclosure only, but is there any impact to Reinsurance Group of America, Incorporated? Is this material for the industry?

Axel Philippe Andre: In the U.S., our standard business practice utilizes our flagship U.S. entity, RGA Re, as a reinsurer facing clients. As an onshore entity, our clients can confidently transact with a AA-rated counterparty and be exempt from AG 55. We believe that is an attractive option for our clients, especially combined with our broader solutions and the partnership mindset that we bring to long-term reinsurance relationships. We constantly model transactions across a variety of accounting and capital frameworks and have an open dialogue with our regulators on the expected impact of any regulations.

Our business model does not rely on any particular regulatory regime, so the additional requirements of AG 55 are really just an extension of our existing practices from a regulatory perspective. We do not expect it to have a material impact for Reinsurance Group of America, Incorporated.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Tony Cheng for any closing remarks.

Tony Cheng: Thank you for your continued interest in Reinsurance Group of America, Incorporated. We are pleased with the strong start to the year, and we look forward to continuing to deliver in the future. This concludes our Q1 conference call. Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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