Reinsurance Group of America, Incorporated

Welcome to the Reinsurance Group of America Second Quarter 2020 Results Conference Call. Today's call is being recorded. At this time, I would like to introduce Mr. Todd Larson, Senior Executive Vice President and Chief Financial Officer, and Ms. Anna Manning, President and Chief Executive Officer. Please go ahead, Mr. Larson.

Thank you. Good morning, and welcome to RGA's Second Quarter 2020 Conference Call. With me this morning on the call are Anna Manning, RGA's President and Chief Executive Officer, Elaine Nimi, Chief Operating Officer, Leslie Barbee, Chief Investment Officer, Jonathan Porter, Global Chief Risk Officer, and Jeff Hobson, Head of our Investor Relations. We will discuss the second quarter results after a quick reminder about forward-looking information and non-GAAP financial measures. Following our prepared remarks, we'll be happy to take your questions. Some of our comments or answers to your questions may contain forward-looking statements. Actual results could differ materially from expected results. Please refer to the earnings release we issued yesterday for a list of important factors that could cause actual results to differ materially from expected results. Additionally, During the course of this call, information we provide may include non-GAAP financial measures. Please see our earnings release, earnings presentation, quarterly financial supplement, and website for discussion of these terms and reconciliations to GAAP measures. And now, I'll turn the call over to Anna for her comments.

Thank you, Todd. Good morning, and welcome to everyone on the call. I hope you are all well and staying healthy. Let me take a moment to express my heartfelt sympathy to everyone who has lost a member of their family or friends, and to all who are suffering from the devastating economic consequences of this pandemic. The health and safety of RGA's employees and their families continues to be a top priority. and I would like to express my ongoing appreciation for their dedication and commitment to ensuring that our global operations continue to run smoothly and productively. Throughout the quarter, RGA's teams provided uninterrupted and seamless services and support to our clients. We shared our expertise and knowledge through numerous webinars, virtual meetings, and published articles, all of which were well received and much appreciated. We are proud of these ongoing contributions to thought leadership during this crisis. Turning to the quarter results, we reported adjusted operating EPS of $1.36 for the quarter and are pleased with these results in the context of this pandemic environment. Specifically reported COVID-19 claims in the quarter totaled 161 million, of which 128 million were in the U.S. Adjusting for cause of deaths reporting legs and IBNR, total COVID-19 related claim costs in the quarter are estimated to be $300 million globally, of which $240 million were in the U.S. individual mortality business. The remaining $60 million claim costs were mainly in the U.K. and Canada. COVID-19 claims outside of the U.S. individual business were in large part offset by favorable morbidity and non-COVID-19 related mortality experience. We have revised our mortality model assumptions and scenarios to reflect our own emerging experience, updated information and data on the pandemic, and in consideration of the ongoing uncertainty on the future path of the virus. These updates have resulted in an overall modest decrease in the estimated impact on our results despite projecting a higher ultimate level of U.S. population deaths, reflecting some of the conservatism we previously highlighted when describing our model. Jonathan Porter, our Global Chief Risk Officer, will provide additional information on the model updates shortly. Beyond the effects of COVID-19, We were pleased with the performance of our business as results for most operations were in line or better than expected and some operations performed particularly well. We have long highlighted the power of the earnings engine that has been built over the last five decades and highlighted the diversification benefits from our global platform. This quarter again reinforced the resilience and the value of that platform. We completed several capital-motivated financial reinsurance transactions in the quarter. This quarter, we deployed a minimal amount of capital into in-force transactions, in part reflecting increasing competition, especially on U.S. asset intensive opportunities. We continue to see opportunities in North America, Europe, and Asia. We're taking a prudent, balanced, and disciplined approach to capital deployment during this crisis by carefully weighing opportunities against long-term financial and strategic value. We have been and will continue to be very good long-term stewards of our investors' capital. Although there remain some challenges and unknowns, RGA entered the pandemic in a position of strength. During the quarter, we took proactive and measured actions to raise capital to further strengthen our balance sheet and build additional buffers. We also reduced risk in our investment portfolio, increased our liquidity, and ended the quarter with excess capital of $1.4 billion. I think there's plenty of evidence in our results this quarter to demonstrate that our underlying earnings power is largely intact and that we are well positioned to successfully manage through a period of continuing uncertainty for the virus and the global economy. We are well-placed to emerge from this pandemic in good shape to capitalize on opportunities and to continue to build on our strong track record of creating long-term value. I remain confident in the long-term value of our business, in the RGA team, and in the strength of the RGA franchise. We are leaders in the life and health reinsurance industry and expect to remain so for many years to come. Thank you for your interest in RGA. and I hope you all remain safe and well. Let me now turn it back over to Todd to go over the detailed financial results.