AM Best Affirms Credit Ratings of Reinsurance Group of America, Incorporated and Its Subsidiaries
September 30 2021 - 5:02PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A+
(Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR)
of “aa-” (Superior) of RGA Reinsurance Company (Chesterfield, MO),
RGA Americas Reinsurance Company, Ltd (Bermuda) and its
subsidiaries, RGA Life Reinsurance Company of Canada (Toronto,
Canada) and RGA Atlantic Reinsurance Company, Ltd. (Barbados).
These companies collectively are referred to as RGA. AM Best also
has affirmed the Long-Term ICR of “a-” (Excellent) and all
Long-Term Issue Credit Ratings (Long-Term IR) on the debt
securities and indicative shelf ratings of Reinsurance Group of
America, Incorporated (Chesterfield, MO) [NYSE: RGA]. The outlook
of these Credit Ratings (ratings) is stable. (See below for a
detailed listing of the Long-Term IRs.)
The ratings reflect RGA’s balance sheet strength, which AM Best
assesses as very strong, as well as its strong operating
performance, favorable business profile and very strong enterprise
risk management.
RGA’s balance sheet strength remains solid, and its consolidated
risk-adjusted capitalization remains at the strongest level, as
measured by Best’s Capital Adequacy Model (BCAR), despite impacts
from the COVID-19 pandemic. RGA had bolstered its balance sheet
strength over the past year by ceasing share repurchases and
completing a $500 million common stock offering, resulting in a
record level of cash and cash equivalents within the organization
at year-end 2020. As a result, financial leverage declined over the
past year to approximately 22%, which is well within AM Best’s
guidelines for the current rating. Additional factors supporting
RGA’s very strong balance sheet strength assessment are its
significant operating cash flows, good financial flexibility and a
high quality investment portfolio. AM Best notes that RGA
experienced only modest amount of impairments and downgrades within
its investment portfolio during the past year.
RGA also benefits from its leading market positions in the
United States, Canada, Europe and Asia with approximately 45% of
revenues coming from international operations. While overall new
business production was negatively impacted by the pandemic, AM
Best notes that overall premiums and assumed life insurance inforce
have increased in each of the past five years, primarily driven by
growth in all geographic areas of its traditional reinsurance
segment, and particularly in Asia. The company’s innovative culture
and track record of providing new innovative solutions to the
insurance industry is also a factor in its favorable business
profile assessment.
Partially offsetting these positive rating factors is the
volatility of earnings in recent periods within certain core
segments, including its U.S. individual mortality segment and its
Australian business segment. AM Best notes that mortality increased
materially in 2020 and continued through the first part of 2021 due
to the COVID-19 pandemic, leading to losses in the individual life
insurance segment. However, earnings generated from its other core
businesses generally have been increasing in recent periods and
mortality has shown improvement in more recent months. While some
earnings volatility may continue over the near term, AM Best
expects that earnings will gradually improve as mortality rates
continue to decline with the roll out of vaccines. RGA also has
increased its exposure to higher-risk product lines, including
annuities and longevity reinsurance, and maintains a moderate-sized
block of long-term care business that may add to operating
volatility over the mid-to-long term. Partially mitigating this
concern is RGA’s comprehensive risk management framework, which is
an integral part of its corporate culture.
The following Long-Term IRs have been affirmed with a stable
outlook:
Reinsurance Group of America, Incorporated— -- “a-” (Excellent)
on $400 million 4.7% senior unsecured notes, due 2023 -- “a-”
(Excellent) on $400 million 3.95% senior unsecured notes, due 2026
-- “a-” (Excellent) on $600 million 3.9% senior unsecured notes,
due 2029 -- “a-” (Excellent) on $600 million 3.15% senior unsecured
notes, due 2030 -- “bbb+” (Good) on $400 million 6.2% fixed to
floating subordinated debentures, due 2042 -- “bbb+” (Good) on $400
million 5.75% fixed to floating rate subordinated debentures, due
2056 -- “bbb” (Good) on $400 million variable rate junior
subordinated debentures, due 2065
The following indicative Long-Term IRs available under shelf
registrations have been affirmed with a stable outlook:
Reinsurance Group of America, Incorporated— -- “a-” (Excellent)
on senior unsecured debt -- “bbb+” (Good) on subordinated debt --
“bbb” (Good) on preferred stock
RGA Capital Trust III and IV— -- “bbb” (Good) on trust preferred
securities
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best's
Credit Ratings. For information on the proper use of Best’s Credit
Ratings, Best’s Preliminary Credit Assessments and AM Best press
releases, please view Guide to Proper Use of Best’s Ratings &
Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210930005984/en/
Michael Adams Associate Director +1 908 439
2200, ext. 5133 michael.adams@ambest.com Michael
Porcelli Director +1 908 439 2200, ext. 5548
michael.porcelli@ambest.com Christopher Sharkey Manager,
Public Relations +1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com Jim Peavy Director,
Communications +1 908 439 2200, ext. 5644
james.peavy@ambest.com
Reinsurance Group of Ame... (NYSE:RGA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Reinsurance Group of Ame... (NYSE:RGA)
Historical Stock Chart
From Apr 2023 to Apr 2024