Reinsurance Group of America (RZC) Q3 2026 earnings review
Reinsurer RGA's profit jumped, but its life cover barely grew
RGA, which takes on life insurers' risks, earned far more, while its traditional life business hardly grew. Profit per share excluding one-offs rose 33%, helped by low claims and strong investment returns. About half of the gain came from its newer pension and annuity business. Chief executive Tony Cheng reported "excellent results", but finance chief Laura Cockrill expects fund returns to cool.
| Profit per share, excluding one-offs | $8.49 +33% from $6.37 a year ago |
|---|---|
| Premiums, excluding pension buyouts | $4.55 billion +6% from a year ago, by our math |
| Life cover in force | $4.38 trillion +1% from a year ago |
| Full-year outlook for fund and property returns | Raised 10–12% expected, against a 7% plan |
⚖️ Verdict: 🟢 Bullish
The story got better because the newer business kept growing once the big 2025 Equitable purchase dropped out of the comparison. The yearly review of its reserves also cost nothing. One caution: about a sixth of profit came from items RGA cannot count on. Its holdings of lower-rated bonds kept climbing too.
The question now is how much of this profit RGA can keep. Either the larger portfolio and new bonds' higher yields hold earnings near this level, or profit drops back as one-off gains fade. Fourth-quarter results will tell.
🐂 Bull Case
A Bigger Portfolio Lifted Investment Income
RGA invests the premiums it collects until claims come due, so investment returns are its second source of profit after underwriting. Outside the deals where it earns a set margin over what it pays clients, the reinsurer's investment income grew 17.5% from a year ago. Part of that gain, though, came from property sales that RGA does not expect to repeat.
- Average assets invested outside those deals: $50.4 billion, up 5.7%
- Income excluding private-fund and property returns: up 7.6%, by our math
- Yield on new bond purchases: 6.31%, finance chief Laura Cockrill said
- Yield on the existing book, excluding fund returns: 4.96%
This matters because each maturing bond gets replaced at a better rate, so income climbs without any new deals. But the lift is slow: the yield on the existing book moved up only 0.04 percentage points in a year. A bigger asset base, not better rates, did most of the work.
What to watch: the existing-book yield excluding fund returns in RGA's annual report. A reading above 5% would show the new-money rates finally reaching the whole portfolio.
Death Claims Came In Below RGA's Pricing
RGA's traditional business pays insurers when the people they cover die or fall ill, so its profit depends on claims staying below what it priced. Finance chief Laura Cockrill said claims ran $67 million better than expected in economic terms. Since 2023 that favourable gap has passed $400 million, she said.
The yearly review of the assumptions behind RGA's reserves also ended without a net charge, after costing $149 million a year ago. Chief executive Tony Cheng said: "The completion of the review gives us added confidence in both our in-force business and the new business we are writing." The review's effects did cancel out, ranging from a $31 million cost in Europe to a $22 million gain in Canada.
- Claims as a share of premiums, US: 90.9%, from 91.5%
- Europe, Middle East and Africa: 94.4%, from 130.2% when last year's review hit
- Asia Pacific: 84.9%, from 81.8%
Cheng's "strong performance across all regions" skips Asia Pacific, where traditional profit excluding one-offs fell 19% on what the company called "unfavorable underwriting experience". In the US, Cheng said, RGA's own underwriting service now handles almost half of client cases, but premiums show no lift from it yet.
What to watch: the gap between economic and reported claims results next quarter. A narrowing gap would mean the favourable experience is reaching profit, as Cockrill said it will over the life of the policies.
Pension and Annuity Business Kept Growing
RGA's Financial Solutions arm takes over annuities, pension promises and other savings blocks from insurers, and earns the gap between investment returns and what it owes. In July 2025 it took over 75% of Equitable's life policies. Doubters argue that this one purchase, not new business, carried the arm's growth.
- Pre-tax profit excluding one-offs: $391 million, up 33% by our math
- US annuity assets: $46.7 billion, up 17%
- Asia Pacific annuity assets: $40.5 billion, up 41%
- US pension buyouts this quarter: four, with over $800 million of premiums
This quarter compared three months of the Equitable block with two months a year ago, so the purchase explains little of the rise. New deals did the work instead. Cheng said the US pension market and the UK longevity market, where pension funds insure against retirees living longer, "picked up after a slow start to the year".
What to watch: the restated history RGA plans to publish before its fourth-quarter call. The new regional reports will stop showing this arm on its own, so that history may be the last clean read on its growth.
RGA Raised Its Buybacks to $75 Million
RGA hands spare capital back to shareholders through dividends and share repurchases. The reinsurer bought back $75 million of shares this quarter, up from $50 million in each of the three quarters before.
- Buybacks so far this year: $175 million, against $75 million a year earlier
- Diluted share count: down 1.1% from a year ago
- Quarterly dividend: $0.98, up 5.4%
It also kept two dated promises. RGA repaid a $400 million bond in September, and it fully invested the money in Ruby Re, a reinsurer that outside investors fund and RGA sponsors for fees. That frees RGA's own capital for deals or buybacks.
What to watch: fourth-quarter buybacks, against about $325 million left under the current authority. A further step-up would suggest RGA sees fewer deals worth its capital than its own shares.
🐻 Bear Case
Traditional Life Premiums Hardly Grew
Finance chief Laura Cockrill wants investors to judge growth by total premiums excluding pension buyouts, up 8.2% this year after currency effects. Traditional premium growth, she said, "is no longer a good indicator of biometric growth at the company", meaning growth in risks tied to people's lives and health.
The traditional book tells a weaker story: its premiums rose about 1% from a year ago, by our math. Life cover in force, the sum RGA would pay if every insured person died, grew 1.3% in a year.
The total measure includes annuity and longevity blocks that RGA takes on in large lumps, so it can climb while the life book stands still. RGA also has not said how much of Asia Pacific comes from Hong Kong, where a tax change could slow sales.
What to watch: whether the new four-region reports, starting next quarter, still show life premiums on their own. Cockrill said RGA will "no longer call out Traditional and Financial Solutions business separately".
Lower-Rated Bonds Kept Growing in RGA's Portfolio
RGA invests about $142 billion, mostly in bonds, to pay future claims. Its credit risk sits in bonds rated below investment grade. Holdings rated B, two notches below that line, reached $2.65 billion at cost, up from $714 million in December.
Jayson Bronchetti, who spoke for the investment team on the call, said RGA continues to "move up in quality". The total below investment grade did shrink since June, but RGA has not said whether it bought the B-rated bonds or saw others downgraded.
- Bonds rated B: $2.65 billion, up 30% from June
- All holdings below investment grade: $5.77 billion, from $6.31 billion in June
- Write-downs and credit-loss provisions: $71 million, against $35 million a year ago
This matters because riskier bonds pay more only until defaults arrive. RGA also sold bonds at a $102 million loss to buy higher-yielding ones, and it leaves such losses out of adjusted profit while keeping the extra income. Cockrill said write-downs "remained favorable to longer-term expectations year-to-date", yet they doubled from a year ago.
What to watch: the bond rating table in RGA's annual report. Another jump in B-rated holdings without an explanation would mean the reinsurer is buying yield with credit risk.
One-Off Gains Supplied a Sixth of Profit
RGA lists "key considerations", items it cannot count on every quarter. Finance chief Laura Cockrill said claims, fund returns, reworked contracts and other items beat expectations by $117 million. By our math, that is about 16% of the $736 million pre-tax operating profit.
Returns on private funds and property, which RGA calls variable investment income, ran at about 15% a year against a 7% plan. Cockrill said "we aren't expecting to repeat the same high level of returns delivered in this quarter in Q4". Changes to existing contracts added $57 million, and she called their timing hard to predict.
This matters because next year's profit rests on the repeatable part. Claims add a second swing: on reported numbers they cost $9 million even though the economics ran favourable, because accounting books losses on already-unprofitable policy groups at once. Cockrill again declined to split profit between underwriting and investments, saying RGA "will plan on sharing additional details at an appropriate time".
What to watch: the fourth-quarter list of key considerations. A total near zero would show the core business earns close to this quarter's pace on its own.
Deals Used Far Less Capital Than Assumed
RGA grows partly by spending capital to take over blocks of existing policies from insurers. Its planning assumption for 2026 was about $1.5 billion of such deals. It put in $119 million this quarter, and by our math $615 million so far this year.
Cockrill said "We continue to be disciplined in our capital deployment", and this quarter's deals met return targets. But excess capital, the money above what ratings and regulators require, fell to $1.8 billion from $2.2 billion in June. Some derivative contracts end if RGA's ratings drop below set levels, which limits how thin it can run.
What to watch: the excess-capital figure with fourth-quarter results, which RGA recalculates once a year. A further drop without matching deals would mean buybacks are carrying the earnings target.
👓 Other Themes
Higher Bond Yields Cut Reported Book Value
Market interest rates and credit spreads moved up, so the bonds RGA holds lost market value. Unrealized losses on them reached $13.6 billion, nearly double December's figure. Reported book value per share fell to $178.89 from $209.73 in June. These are paper losses: RGA said it can hold such bonds until they recover, and new bonds now pay more.
💲 Other KPIs
Rose 2.6% from June and 11.7% from a year ago. This measure strips out paper gains and losses on bonds and certain derivatives, so it tracks retained profit. Quarterly growth has stayed in a narrow band for a year. Cockrill put the yearly compound rate since 2021 at 10.2%.
Fell 7.4% from a year ago after the reinsurer paid off a maturing bond in September. The average rate on what remains rose to 5.49% from 5.33% in December. RGA retired cheaper bonds this year and issued new 30-year debt at 6.375% in March. Interest cost came to $96 million this quarter, against $98 million a year ago.
Up 45.5% from the first nine months of 2025, against a 21% rise in total revenue. Cash from operations means premiums, fees and investment income minus claims and costs. RGA reinvests it in bonds and loans that back future claims, so the gain feeds next year's investment income.
🔮 Guidance
Unchanged. RGA still expects the same range for the full year. By our math, that leaves 17% to 21% for the fourth quarter. The reinsurer paid 24.1% this quarter, the third straight reading above the range. It blamed "the jurisdictional mix of earnings" and a larger reserve against foreign tax credits.
Raised. Finance chief Laura Cockrill now expects the full-year return to land in RGA's long-term range, not the 7% plan. With the year so far near 12%, the fourth quarter can drop to about 4% a year and still meet it, by our math. She does not expect the third quarter's level again.
Unchanged. Chief executive Tony Cheng said RGA will meet or exceed its medium-term targets. Profit per share excluding one-offs has grown 45% so far this year, by our math. The target has no end date, so this year's pace says little about any single year ahead.
Unchanged. Return on equity measures yearly profit against shareholders' funds. RGA earned 19.1% over the past twelve months, excluding one-offs and paper swings on bonds. That sits well above the target, but it includes fund returns that Cockrill does not expect to repeat.
Unchanged. Cockrill reaffirmed the range "but will remain opportunistic". Dividends and buybacks so far this year came to about 22% of adjusted operating income, by our math. That leaves room to step up returns if deals stay scarce.
❓ Key Questions
Did RGA buy B-rated bonds, or did agencies downgrade them?
B-rated holdings nearly quadrupled since December while write-downs doubled from a year ago. Investors need to know whether this is a chosen trade for yield or a slide in credit quality.
How much profit comes from underwriting versus investments?
Cockrill again deferred a split. With fund returns and one-off items supplying a large share of recent profit, the split decides how much of this year's pace can last.
Does the $1.5 billion deal assumption for 2026 still stand?
Deals have used about $615 million so far, by our math, while excess capital fell. If the figure no longer holds, investors need to know how much buybacks will substitute.
Will the new regional reports still show life premiums?
From the fourth quarter RGA drops the split between traditional and Financial Solutions business. Without a life premium line, outsiders cannot check whether the life book grows.
What brings the tax rate back into its range?
The rate on adjusted profit has run above 22–23% for three quarters. Hitting the full-year range now needs a fourth-quarter rate near 17–21%, by our math.