Reinsurance Group (RGA) Q3 2026 Earnings Call Transcript

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DATE

Friday, Nov. 6, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Tony Cheng
• Chief Financial Officer - Laura Cockrill
• Chief Risk Officer - Jonathan Porter
• Chief Risk Officer - Meyrick Douglas

TAKEAWAYS

• Net Income -- $6.92 per diluted share, or $456 million, representing an increase from $3.81 per diluted share in the prior-year quarter.
• Adjusted Operating Income -- $8.49 per diluted share, or $558 million, compared with $4.66 per diluted share in the prior-year quarter.
• Net Premiums -- $5.35 billion, an increase of 25% year over year primarily driven by $800 million in single premium pension risk transfer transactions.
• Organic Premium Growth -- 8.2% on a constant currency basis, excluding pension risk transfer transactions, reflecting strong business momentum across global regions.
• Variable Investment Income Return -- 15% annualized for the quarter, driven by real estate joint venture gains and broad-based alternative equity returns.
• New Money Rate -- 6.31%, an increase from the prior quarter due to higher market yields and exceeding the core portfolio yield.
• Core Portfolio Yield -- 4.96%, reflecting the performance of the core investment portfolio excluding variable investment income.
• Excess Capital -- $1.8 billion, representing a decrease from the previous quarter primarily due to the retirement of $400 million in senior securities.
• Shareholder Returns -- $139 million, including $75 million in share repurchases and $64 million in dividends paid during the quarter.
• Share Repurchases -- $75 million, bringing the total year-to-date buybacks to $175 million.
• Dividends -- $64 million, representing a regular quarterly dividend of $0.98 per share.
• Book Value Per Share -- $178.59, excluding AOCI and B36 effects, reflecting a 10.2% compound growth rate since the start of 2021.
• Uncapped In-force Actions -- $57 million pretax impact, resulting from ongoing management strategy to improve the value of the in-force book across the U.S., EMEA, and APAC.
• In-force Management Run Rate -- $10 million to $15 million, representing the estimated increase to the ongoing earnings run rate from recent in-force actions.
• Economic Claims Experience -- $67 million favorable to expectations, primarily driven by U.S. Individual Life, Asia Traditional, and longevity business.
• Financial Claims Impact -- $9 million negative, reflecting the accounting impact of claims compared to economic expectations.
• Pretax Actuarial Review Impact -- zero net impact, as favorable and unfavorable adjustments across segments and business lines were largely offset during the annual review.
• EMEA Actuarial Impact -- $31 million unfavorable, resulting from the 2026 annual actuarial assumption review within the region's Traditional business.
• Canada Actuarial Impact -- $22 million favorable, reflecting positive adjustments from the annual assumption review.
• US Traditional Actuarial Impact -- $13 million favorable, driven by findings from the annual actuarial review process.
• US Financial Solutions Actuarial Impact -- $8 million unfavorable, resulting from the 2026 annual actuarial assumption review.
• Ruby Re Deployment -- full deployment of capital, marking a milestone in the third-party capital strategy to generate incremental fee income.
• Capital Deployment -- $119 million, invested into in-force transactions during the quarter at returns that meet or exceed standard targets.
• Group Disability Exposure -- 2% of total traditional business premium in the Americas, which management described as a modest exposure.
• Adjusted Operating Tax Rate -- 24.1%, modestly exceeding the expected range of 22% to 23% due to a greater mix of earnings in higher-tax jurisdictions.

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RISKS

• Laura Cockrill stated, "The effective tax rate for the quarter was 24.1% on adjusted operating income before taxes, modestly above our expected range of 22% to 23%, skewed by a slightly greater mix of earnings and higher tax rate jurisdictions," indicating a potential for continued tax volatility.
• Jonathan Porter warned that although economic claims were favorable, the accounting "financial impact was a negative $9 million" for the quarter, highlighting a disconnect between economic performance and reported financial results.

SUMMARY

Reinsurance Group of America, Incorporated (NYSE:RGA) reported a significant increase in adjusted operating income driven by robust investment performance and favorable biometric claims across global segments. Management highlighted the full deployment of the Ruby Re third-party capital vehicle and strong activity in the U.S. pension risk transfer market, completing four transactions totaling $800 million. The company announced a strategic plan to simplify reporting into four segments starting in the fourth quarter to better reflect internal management and the convergence of Traditional and Financial Solutions business. Management confirmed the company is maintaining its intermediate-term financial targets, supported by a healthy pipeline and a strong capital position with $1.8 billion in excess capital.

• Tony Cheng stated, "These results were another proof point on the importance of our strategy and core differentiators: deep biometric expertise, strong asset management capabilities, a global platform of local offices, a market-leading brand and flexibility to partner across the industry."
• Management plans to consolidate financial reporting starting in the fourth quarter, removing the distinction between Traditional and Financial Solutions to provide a clearer view of regional biometric growth.
• Strategic underwriting programs in the U.S. accounted for nearly half of the quarter's case volume and represent the company's largest source of underwriting growth.
• The company expanded digital and electronic underwriting capabilities in Hong Kong, Japan, and India to accelerate medical decisions and improve new business experiences for partners.
• CFO Laura Cockrill noted that recent in-force management actions in uncapped cohorts have contributed between $10 million to $15 million to the ongoing quarterly earnings run rate.

INDUSTRY GLOSSARY

• AOCI: Accumulated Other Comprehensive Income, which includes unrealized gains and losses on securities and effects of discount rate changes.
• B36: A reference to the accounting for the cumulative change in fair value of funds withheld embedded derivatives.
• Biometric Risk: Risks associated with human life, such as mortality, morbidity, and longevity.
• LDTI: Long-Duration Targeted Improvements, a U.S. GAAP accounting standard that changed how insurers measure and disclose long-duration insurance contracts.
• PRT: Pension Risk Transfer, a transaction where an employer transfers its pension plan's financial risks to an insurance company.
• Ruby Re: RGA's third-party capital sidecar vehicle designed to fund growth in asset-intensive reinsurance.
• VII: Variable Investment Income, income generated from non-fixed income assets such as private equity and real estate joint ventures.

Full Conference Call Transcript

Operator: Welcome to RGA's Third Quarter 2026 Earnings Call. [Operator Instructions] Today's call is being recorded. If you have any objections, you may disconnect at this time. Some of the comments made during this conference call, including answers given in response to questions, may constitute forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more detail on the risks and uncertainties, please refer to the risk factors discussed in RGA's periodic reports to the SEC.

For reconciliation of the non-GAAP measures discussed on this call as well as other information regarding these measures, please refer to the earnings release and other materials in the Investor Relations section of the company's website. There will be references to the earnings presentation slides throughout the call. I will now turn the floor over to Tony Cheng for his opening remarks.

Tony Cheng: Good morning, everyone, and thank you for joining us today. We appreciate your continued interest in RGA. I am pleased to share that we delivered excellent results this quarter, with strong performance across all regions. Investment performance was robust and economic claims experience was favorable to expectations, demonstrating our success on both sides of the balance sheet. These results were another proof point on the importance of our strategy and core differentiators: deep biometric expertise, strong asset management capabilities, a global platform of local offices, a market-leading brand and flexibility to partner across the industry. They also demonstrate our ability to generate attractive risk-adjusted returns across a range of market environments.

So with this strong foundation in place, our priorities moving forward remain clear: deliver attractive, sustainable returns, manage risk well and deploy capital where we see the best long-term value. Before I turn to the results, let me highlight 3 items from the quarter and how they tie to our strategy. First, our pipeline for both in-force and flow business remains attractive. This quarter, the U.S. PRT and U.K. longevity markets picked up after a slow start to the year. We were active in both completing several transactions, and we are encouraged by the outlook for the fourth quarter and into 2027.

Beyond these 2 markets, our other business segments continued to benefit from attractive opportunities, building on our strong market presence. Second, a key element of our biometric risk expertise is the rigor of our assumption-setting process. This quarter, we completed our annual assumption review. This resulted in no net impact on consolidated pretax adjusted operating income. The completion of the review gives us added confidence in both our in-force business and the new business we are writing. Finally, third-party capital remains a core element of our capital management strategy.

These structures provide an opportunity for third-party investors to participate in the returns of our business while generating incremental fee income over time and enhancing our flexibility to fund growth and return capital to shareholders. In the quarter, I'm very pleased that we showed the continued execution of this strategy with the full deployment of Ruby Re capital. Turning now to the regional results. In the Americas, the results for the quarter were driven by strong investment income, sound underwriting experience and the continued favorable impact of in-force actions executed in prior periods. New business momentum continued, and we were particularly pleased with the completion of 4 pension risk transfer transactions totaling over $800 million in combined premium.

The overall pipeline for the region is encouraging, and we are seeing a wide range of opportunities across the spectrum of underwriting, product development and asset-intensive transactions with biometric risk. In EMEA, earnings outperformed our expectations, benefiting from favorable claims experience and higher investment income. After a slower start to the year, largely due to a quiet U.K. longevity market, we have now completed a number of transactions in this core growth area, covering lives in both the U.K. and Continental Europe. We are also encouraged by the momentum we are seeing in the market and in our pipeline. Asia Pacific delivered another strong quarter, driven by the earnings contribution from recent new business and strong investment income.

Leading with biometric expertise, local experience and long-standing client relationships, we closed several flow deals in the region, notably in Hong Kong and Japan. These deals were in our sweet spot, leveraging both sides of the balance sheet and showcase the expertise of our exceptional local teams. Our ability to deploy capital across all our regions and the range of products gives us a significant advantage. Just as important, we remain selective, maintaining discipline in pricing, underwriting and capital deployment. Let me emphasize that our capital deployment into in-force transactions and flow business this year has been focused on exclusive arrangements with attractive risk-adjusted returns, and we are very pleased with the high-quality nature of this business.

Taking a step back, what connects these results to our strategy are our strengths in 4 key areas. First, win-win transactions. We pursue transactions that deliver strong returns for RGA and real benefits for our clients. Our 5 decades of experience, global presence and local market knowledge let us focus where we are best positioned. We focus on both sides of the balance sheet, pairing deep biometric expertise with diversified investment capabilities. Second, scaling our global platform. Demand for risk and capital solutions continue to grow, and our strong balance sheet and global brand make us a trusted counterparty. Third, optimizing our balance sheet.

We do this through in-force management, improved risk-adjusted investment returns and both internal and third-party sources of capital. And finally, disciplined capital stewardship. We balance investing in attractive opportunities with returning capital to shareholders. Here are some examples from this quarter of how we are putting this approach to work around the world. In the U.S., our underwriting capabilities continue to set us apart. Case volumes remained significantly above prior year levels. Our strategic underwriting program accounted for almost half of this quarter's cases and is the largest source of growth in our underwriting products. These programs will further entrench our strategic partnership with the client, including new product development, creating exclusive business that is very durable.

In Asia, our underwriting and product development capabilities supported client wins across the region. In Japan, we supported the launch of a simplified underwriting mortality product or the corporate-owned life market. In Hong Kong, one of our embedded digital underwriting capabilities was highlighted by a client for its role in accelerating medical underwriting decisions, widening consumer access to cover and improving the new business experience. In India, our electronic underwriting system has moved into early client development with 1 client now live and another implementation progressing well. Just like in the U.S., expanding our underwriting capabilities allows us to help clients reach more clients, more customers and more -- make more better-informed risk decisions.

That deeper partnership is a differentiator for RGA and helps us continue to grow in these key markets. Turning to capital allocation. We have deployed $119 million into in-force transactions in the quarter, and we returned $139 million to shareholders, including $75 million in share repurchases and $64 million of dividends. We maintained a strong balance sheet, ending the quarter with $1.8 billion of excess capital. Balance use of excess capital is a key part of how we build long-term shareholder value. So as we look ahead, our fundamentals remain strong, and our pipeline for both in-force and flow business is healthy. Our confidence in 2026 and beyond remains high.

Our advantages are durable and our strategy builds on a proven track record of creating long-term value for our shareholders. We are confident we will meet or exceed our intermediate-term financial targets and continue to deliver long-term value for our shareholders. Before I close, I'd like to recognize Jonathan Porter, who plans to retire in early 2027. I congratulate Jonathan on a successful career and thank him for the lasting impact he has made at RGA. On a personal note, Jonathan has been an invaluable partner to me and to many leaders across RGA. I am grateful for his many contributions and excited for him as he begins this well-deserved next chapter.

Following a thorough search, we're pleased to announce that Meyrick Douglas will join RGA in the fourth quarter and take over as Chief Risk Officer on January 1, 2027. Meyrick brings decades of leadership experience, spanning all aspects of the risk function, most recently at Prudential and Morgan Stanley. He and Jonathan will have the opportunity to work closely during a transitional period. With that, I'll turn the call over to Laura to share her comments on the quarter.

Laura Cockrill: Thanks, Tony, and good morning, everyone. Turning to the results. RGA earned pretax adjusted operating income of $736 million for the quarter or $8.49 per share after tax. Over the trailing 12 months, our adjusted operating return on equity was 19.1%, excluding AOCI and notable items. This was another excellent quarter for us built on disciplined execution across our businesses. Numerous items contributed to the strong results. First, investment results were excellent as our variable investment income and new money rate were very strong. Second, all regions performed well, demonstrating the breadth and depth of our earnings platform. And third, in-force actions delivered positive results, highlighting the value of the work we are doing to optimize our balance sheet.

This quarter is another proof point that we are using our strategic advantages to deliver consistent strong results, which gives us confidence in meeting or exceeding our targets. Now to the segment results. In the U.S. and Latin America, Traditional results reflected strong variable investment income and the favorable impacts of cumulative in-force actions executed over time, and individual mortality experience was in line with expectations on both an economic and financial basis. Financial Solutions results were favorable primarily due to VII. In Canada, Traditional earnings reflected favorable experience on individual life business and Financial Solutions earnings were favorable due to strong VII.

In EMEA, Traditional results reflected favorable claims experience, and Financial Solutions results reflected higher investment income and favorable onetime items. In APAC, Traditional results reflected a modestly unfavorable financial impact from claims, although economic claims experience was favorable, and Financial Solutions results reflected strong variable investment income. Finally, our Corporate and Other segment reported an adjusted operating loss before tax of $22 million. This was better than our expectations, primarily due, again, to strong VII. I'll now turn to the notable items in the quarter related to our annual review of actuarial assumptions.

At the consolidated level, the review had no net impact on pretax adjusted operating income for the quarter and is expected to have a de minimis impact on our go-forward earnings run rate. At the segment and business line level, the impacts were modest with favorable and unfavorable items largely offset across the regions. We are pleased with this result as it reconfirms our long-term pricing and modeling assumptions across the regions and the products. Now turning to premium growth. Total premiums excluding PRT year-to-date grew 8.9% or 8.2% constant currency, which reflects our strong business momentum.

As part of our effort to enhance our communications around RGA's business mix, and consistent with what I mentioned last quarter, we are focusing on total premiums, excluding PRT as summarized on Slide 8. This is because a growing number of deals within Financial Solutions are tied to biometric underwriting, so focusing on Traditional premium growth is no longer a good indicator of biometric growth at the company. Transitioning to claims. On an economic basis, claims came in $67 million better than expectations, while the financial impact was a negative $9 million. As indicated on Slide 9, since 2023, economic claims for the company have run favorable by over $400 million, primarily driven by U.S.

Individual Life, Asia Traditional and longevity business within Financial Solutions. As a reminder, the portion not yet reported in our results will flow into earnings over the life of the business. Turning to Slide 7, I'd like to highlight the key considerations for the quarter. These include claims experience, VII, in-force management actions and other items, which had a combined net impact of $117 million favorable for expectations in the quarter. The other bucket represents a mix of small adjustments across the portfolio that occur every quarter, none of which reflect a trend.

The effective tax rate for the quarter was 24.1% on adjusted operating income before taxes, modestly above our expected range of 22% to 23%, skewed by a slightly greater mix of earnings and higher tax rate jurisdictions. I'll now turn to investments. The yield on our core portfolio, excluding VII, was 4.96% in the quarter. Our new money rate was 6.31%, an increase from the prior quarter due to higher market yields. The new money rate remains above our portfolio yield, which should continue to provide a tailwind to investment income. Our strategic asset allocation is designed to take advantage of the higher reinvestment environment in a capital-efficient manner.

Q3 impairments and changes in allowances were $71 million, which remained favorable to longer-term expectations year-to-date. Annualized returns for VII were strong at approximately 15% for the quarter and approximately 12% year-to-date, at the high end of our long-term expectations of 10% to 12% and well above our 7% planned return for 2026. The outperformance this quarter was driven by real estate joint venture gains as well as solid broad-based alternative equity returns, and we are very pleased with the sustainable value creation from these portfolios over time.

While we aren't expecting to repeat the same high level of returns delivered in this quarter in Q4, we expect that our full 2026 returns will fall into the range of our longer-term expectations. Our globally integrated investment platform continues to leverage proprietary expertise and strategic asset manager partners to deliver excellent liability-driven returns. Now turning to capital. A highlight this quarter was the full deployment of Ruby Re's Capital. We are pleased with this milestone and what it demonstrates about our ability to incorporate third-party capital into our broader capital management strategy. It allows us to leverage our biometric expertise to participate in compelling opportunities and generate attractive returns for RGA and our third-party investors.

We deployed $119 million this quarter into in-force transactions. We continue to be disciplined in our capital deployment and focused on high-quality business where we provide differentiated solutions to our clients. These solutions provide returns at or above targets as was the case again for the capital deployed this quarter. We returned $139 million to shareholders in the quarter, including $75 million in share repurchases, that brought total buybacks to $175 million year-to-date. We closed the quarter with approximately $1.8 billion of excess capital, down from the previous quarter primarily due to the use of $400 million to retire a senior security. Our excess capital is calculated annually and adjusted periodically to reflect quarterly activity and updates to assumptions.

We manage capital through several lenses. These include our internal economic capital, regulatory and rating agency frameworks. We remain well capitalized across all our frameworks, supporting our counterparty strength and providing financial flexibility. We will continue balancing capital invested in the business with capital we return to shareholders through dividends and buybacks. Over the intermediate term, we continue to target a 20% to 30% payout ratio, but will remain opportunistic. Turning to book value. We extended our long record of growing book value per share. In the quarter, excluding AOCI and B36 effects, our book value per share rose to $178.59, reflecting a compound growth rate of 10.2% since the start of 2021.

To sum up, this was another very good quarter, driven by consistent execution of our strategy. Our business fundamentals remain strong and investment results continue to support our strong returns and earnings growth. New business momentum is healthy with high-quality opportunities that meet our return expectations. We remain disciplined in deploying capital, focusing on transactions and flow business that meet or exceed our return standards and fit within our risk limits. And our strong financial position allows us to invest capital into our business to deliver future earnings power while also returning capital to shareholders. Our priorities are unchanged: deliver attractive, sustainable returns, manage risk well and deploy capital where we see the best long-term value.

As a final note, I'd like to let you know that starting in the fourth quarter, we plan to simplify our reporting into 4 segments: Americas, EMEA, APAC and Corporate, and no longer call out Traditional and Financial Solutions business separately. We view this as another step in our ongoing effort to improve how we communicate with stakeholders, and this change will be consistent with how we manage the business internally. It supports my previous comments on the need to look at Traditional and Financial Solutions better when assessing premium growth. In support of this change, we plan to provide recasted historical financial results in advance of our fourth quarter earnings call. Thank you for your continued interest in RGA.

This concludes our prepared remarks. We would now like to open it up for questions.

Operator: [Operator Instructions] The first question will come from Alex Scott with Barclays.

Taylor Scott: I wanted to see if you could give a little more color on some of the work you've done on the in-force actions on capped cohorts? And maybe just a broad update, but also to what degree some of the actions that flowed through this quarter improved go-forward earnings?

Laura Cockrill: Sure. Thanks, Alex. So managing in-force business continues to be part of our ongoing strategy to find incremental ways to improve the value of our book. The impact this quarter was $57 million in total and included actions across the U.S., EMEA and APAC. Consistent with the past, we expect to remain active going forward, though the timing and size of these actions are difficult to predict. In the last several quarters, in-force actions have primarily occurred in uncapped cohorts and resulted in an increase of approximately $10 million to $15 million to the ongoing run rate. And again, these are a key part of our strategy that will continue.

Taylor Scott: Very helpful. Second one on APAC growth. Can you just talk about maybe in some of your bigger geographies, how you're viewing the competitive landscape, where the opportunities are, just how we should think about momentum of the growth in that business over the next year or 2?

Tony Cheng: Happy to take that. APAC continues to be very strong. Our 2 largest markets there are Japan and Hong Kong. As you know, Japan has had strong tailwinds from the recent regulatory changes, which result in considerable opportunity for RGA. And we're incredibly well positioned with our strong local presence, trusted client relationships and world-class expertise on both sides of the balance sheet. In Hong Kong, we continue to really do the product development incredibly well. We're complementing that with more and more electronic underwriting systems that can join up with the product development expertise, the capital management expertise to essentially white label products in partnership with our clients.

It's a strategy that we've had for now over 2 decades and continues to have a long runway going forward.

Operator: [Operator Instructions] The next question will come from Joel Hurwitz with Dowling & Partners.

Joel Hurwitz: I also wanted to touch on top line, and I know there's a lot of moving dynamics, and Laura, you highlighted some of those in your prepared remarks. But I wanted to focus on organic growth. Can you guys just help size what you're seeing from an organic growth standpoint? And then I think a couple of years ago, you guys sized the capital need for -- to support the organic growth at about $400 million annually. Is that still the case? Or has that grown?

Laura Cockrill: Let me first start with the organic growth. I think if you look at the new slide we included that has total premium growth for the regions not split between Traditional and Financial Solutions, the growth we have is about 8.2% after adjusting for PRT as well as currency, and that continues to be in line with our expectations as we expect growth across our multiple different regions. As it relates to the second part of your question on about $400 million of capital to support that organic growth, I believe that was the question, that was your question, yes. Thanks, Joel.

So I don't know that we've clarity around kind of the specific how much capital we need to deploy the organic flow business. We've highlighted in the past we have numerous different levers to achieve our 8% to 10% EPS growth, which does provide us flexibility. We can do the capital deployment into in-force transactions as well as organic flow business, notably at returns that meet or exceed our expectations. And we also have positive contributions from our investment portfolio, effective in-force management, balance sheet optimization actions and the return of capital to shareholders, which includes higher share repurchases when they make sense. So we can and do use a combination of those levers to really achieve our targets.

Joel Hurwitz: Okay. And then just shifting gears, with Ruby Re now fully deployed, I want to see if you have any updates on your thinking for future sidecar launches?

Laura Cockrill: Yes, I don't have a comment on our next vehicle at this time other than to reiterate that third-party capital is a priority for us, and we will discuss more when appropriate.

Operator: The next question will come from Tom Gallagher with Evercore.

Thomas Gallagher: First question, just more checking. Do you guys have much U.S. group disability exposure? And if so, how is the performance this quarter? And how would those be structured? Would you see it mainly now? Or could there be a lag?

Jonathan Porter: Yes. Tom, this is Jonathan. I'll take that one. So our exposure to group disability in the Americas, which includes both the U.S. and Canada, is relatively modest. It's about 2% of our total traditional business as measured by premium across those 2 markets. Our experience across the blocks has been in line with expectations in both the current quarter and year-to-date. And we continue to monitor that claims experience with our clients, but we would expect any financial impact of deviations in that to not be that material given the small size of the business.

Thomas Gallagher: Got you. The -- my follow-up is just an accounting question from Slide 9 on biometric experience. I get the unfavorable accounting experience is driven by the cap cohorts and the uncapped or deferred. But how should we think about -- you've now had cumulative, we'll call it, net favorable biometric experience of $230 million since the new LDTI was put into place. At what point do you take that favorable experience and embed that into your AAR? I guess that wouldn't be an unlocking of prior experience, it would be prospective assumptions would be changed. But is it at the level now where it would cause you to take a second look at your prospective assumptions or not?

Or is that just you would have to wait longer? Can you help us think through how that process works?

Jonathan Porter: Yes. Thanks for the question, Tom. This is Jonathan again. So yes, I mean, the difference between what we're seeing economically and what we're seeing in accounting is actually it's the $442 million on that slide, plus the $209 million, that's actually been a negative result in the earnings. So it's the combination of those 2 are over $600 million. We do take in our actual experience as it emerges into account in our assumption updates. So that, together with our go-forward process where we look at both our own data and industry data, so that is a factor that we consider when we set our assumptions. Again, we're in a very long-term business.

So we'd like to take a measured approach when we recognize any experience and assumption updates. And to the extent there's something that is material and appropriate, we would recognize it at that time.

Operator: Next question will come from Wilma Burdis with Raymond James.

Wilma Jackson Burdis: 19% ROE on a trailing 12-month basis is a strong result, but it's definitely higher than a lot of the other underwriting companies we cover. Maybe just give us a little bit of color here on the sustainability. Is it a function of the nature of your business? Is there anything unusual driving that result, recaptures all, et cetera? And how sustainable is it going forward?

Laura Cockrill: Sure. Thanks, Wilma. So first, let me note that we are very proud of the team's effort to achieve our ROE. It does show our focus on pursuing high-quality deals with returns that meet or exceed our thresholds as well as our focus on continued in-force management actions to improve the overall profitability of the portfolio. I think as far as the sustainability, one of the reasons we provide the key considerations on the earnings presentation slide is just to give you a sense of how we look at the core earnings of the portfolio.

So while we do expect to continue to deliver strong results across new business, in-force actions, our investment portfolio, et cetera, there will be some onetime items that we do call out there.

Wilma Jackson Burdis: Okay. And then could you talk about what comprises your new investments driving a 6.3% new money rate in 3Q '26?

Jayson Bronchetti: Sure, Wilma. This is Jayson. I'm happy to take that. So the composition of the portfolio, as you can imagine, is oriented towards high-quality fixed income with an average rating in the A category. We have a relatively high allocation to public corporates as a way to get duration into the portfolio, but really maintain a very diversified portfolio. And during the quarter, we did take the opportunity to add incremental duration as we saw higher yields during the period, and we continue to move up in quality.

Operator: The next question will come from Suneet Kamath with Jefferies.

Suneet Kamath: Congratulations to Jonathan, best of luck. I realize that group disability is a small percentage of your mix, but I was hoping to lean a little bit in on your expertise, Jonathan, because we're seeing some very different results from primary writers here. Some companies are saying third quarter is a blip, other companies are saying they don't really know. Just based on what you guys see as one of the leading underwriters, do you have any thoughts in terms of what's driving some of the volatility that we're seeing across the industry?

Jonathan Porter: Yes. Thanks, Suneet, and thanks for your comments as well. So the short answer is nothing that I would communicate. We -- I can't comment on experience that our clients are seeing or what the rest of the industry is seeing. What I can say, again, just to reiterate, is for our book of business. It's relatively small and it's been performing in line with our expectations.

Suneet Kamath: Okay. And then I guess for Laura, I appreciate the move to create more simplicity in terms of your reporting. But I also think that as it comes to sources of earnings, the investors that I speak to are sort of all over the place in terms of how you guys actually make your money. So we took a stab at it, and I just wanted to pressure test that with you for a second, if I could. So some of the work that we've done would suggest something like 60% earnings from underwriting, 35% from spread and maybe 5% from fee.

I know you're not going to give me the specifics, but is that ballpark reasonable based on kind of your business mix today?

Laura Cockrill: Sure. Thanks, Suneet. So as I have discussed, one of my priorities is continuing to improve how we communicate with external stakeholders and provide greater clarity into the business. This quarter, we did announce the change in the segment reporting, as you mentioned. And we intend to continue building on that effort by providing greater transparency into the business mix. One of our key differentiators is our biometric expertise, and we're evaluating how to best provide greater visibility into the portion of the earnings that are driven by underwriting income. So we will plan on sharing additional details at an appropriate time.

Operator: Next question will come from Wes Carmichael with Wells Fargo.

Wesley Carmichael: The first question was just on in-force actions. Laura, I think you mentioned that actions this quarter were -- at least, there were some on uncapped cohorts. I guess I was just trying to figure out with the $57 million that you called out, was that in capped or uncapped? And then have you changed any of your philosophy around those actions?

Laura Cockrill: Sure. Thanks for the question. So the entire $57 million this quarter was in uncapped cohorts. And no, we have not changed our philosophy around in-force management actions. They continue to be a key part of our ongoing strategy, and again, one of the levers that I mentioned in achieving our growth targets.

Wesley Carmichael: Great. And then second question, I think Equitable had mentioned reinsurance true-up around mortality. I know that had at least something to do with the RGA transaction. I'm just wondering, is there any impact to RGA from that true-up? Or is that just an Equitable thing?

Laura Cockrill: Yes, thanks. It was just an Equitable thing. I am aware that they did mention it, but the accounting true-up did not have an impact to RGA's reported financial results.

Operator: Our last question of the day comes from Mike Ward with UBS.

Michael Ward: I was just wondering if you could sort of comment on the medical excess business. And I think you're getting out of it largely by Jan 1. But just wondering if you could discuss like how it's performed more recently?

Jonathan Porter: Yes. Mike, this is Jonathan. Yes, so that business has been performing in line with our expectations. You are right, we took the strategic decision to exit that market in early 2026. And as that business rolls off starting in 2027, it will become a smaller -- it will be outside of our income statement, balance sheet and our risk profile. But today, it's performed in line with what we had thought after our repricing activities.

Michael Ward: Okay. And then kind of a broader long-term question, but it seems like the NAIC is increasingly looking at onshore and offshore reinsurance. Just wondering if you see potential kind of longer-term activity for new business? Or is that -- is it -- what they're looking at? Is it -- it sounds kind of more focused on asset-intensive business that maybe you don't really go after, but just curious how you kind of see this long term?

Tony Cheng: Yes, Mike, thanks for the question. Appreciate it. We always are going to support regulatory frameworks that promote the long-term strength and resilience of the life insurance industry and its ability to provide financial protection to people around the world. As a global reinsurer, we operate across a wide range of regulatory environments, and those frameworks continue to evolve and you mentioned the NAIC discussions. Regulatory change can also create opportunities for RGA. As clients look for solution to manage capital risk and evolving requirements, our strong rating, solid balance sheet and deep expertise make us a trusted partner in these times of change.

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: Well, thank you again for joining us today and for your continued interest in RGA. RGA is well positioned across the globe given the strength of our global platform and the tailwinds in our markets. We look forward to meeting or exceeding our intermediate-term targets and to your continued partnership. This concludes today's third quarter call.

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

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