Reinsurance Group of America, Incorporated

Good day and welcome to the Reinsurance Group of America Incorporated second quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jeff Hobson, Head of Investor Relations. Please go ahead.

Thank you. Welcome to RGA's second quarter 2024 conference call. I'm joined on the call this morning by Tony Chang, RGA's Chief Executive Officer, Todd Larson, Chief Financial Officer, Leslie Barbee, Chief Investment Officer, in Jonathan Porter, Chief Risk Officer. A quick reminder before we get started regarding forward-looking information in non-GAAP financial measures. 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 from the expected results. Additionally, during the course of this call, the information we provide may include non-GAAP financial measures. Please see our earnings release, earnings presentation, and quarterly financial supplement, all of which are posted on our website for discussion of these terms and reconciliations to GAAP measures. Throughout the call, we will be referencing slides from the earnings presentation, which again is posted on our website. And now I'll turn the call over to Tony for his comments.

Good morning, everyone, and thank you for joining our call. Last night, we reported adjusted operating earnings of $5.48 per share, continuing our trend of strong bottom line results. In addition, we continue to have strong momentum across all our business lines and geographies worldwide. The pipeline remains robust, reflecting RGA's unique positioning in the market and the dedication of our teams. Our adjusted operating return on equity for the past 12 months was 15.3%, exceeding the intermediate term targets we previously shared. Underwriting results on an economic basis were in line with our expectations across the company. This is also generally the case across each of our business segments. It is pleasing to note that we have now had five straight quarters of positive underwriting results. We have a world-class investment platform that is integral to our business and strategy. We continue to put new money to work at returns well above the current portfolio yield, benefiting from our broad asset completion platform. In terms of new business activity, our recent momentum continued this quarter and our internal measure, new business and better value, strongly exceeded our goals for both the quarter and the year to date. This was driven by both the number of transactions and the expected returns on these transactions. At our Investor Day, we shared many recent examples of innovative forms of new business. These transactions do generate a higher expected return for RJ given the greater value created for all parties. We continue to see the percentage of these transactions well ahead of our internal goals, leading to greater long-term value for RGA. In relation to this, we deployed a material amount of capital into in-force transactions at $307 million, which was a solid follow-up to an especially strong first quarter. We have always shared a preference to redeploy our excess capital back into the business for both financial and strategic reasons. As we know, successful transactions lead to favorable economics and repeat transactions over time. Let's now share some more specifics from our four areas of notable growth, starting with our longevity and PRT business. In the US PRT market, we completed another transaction this quarter, and we remain optimistic about our prospects going forward. In the UK longevity space, where RJ is a market leader, we continue to be highly successful on longevity swaps of all sizes, as well as funded reinsurance transactions. The pipeline remains active in both the US and UK and we expect the rest of the year to be productive. This follows a strong Q1 where we closed the first material longevity deal in Japan and our largest USPRT transaction to date. Our second area of notable growth is the asset-intensive business in Asia. RGA's multifaceted client partnership means we have deep relationships with our clients in many ways. With a large Japanese client, we closed their first asset-intensive transaction after enjoying a long-standing relationship on the biometric side over many years. The client highlighted the numerous positives from this transaction, including risk reduction and the increase of their long-term value. This further strengthens the view that reinsurance is a key tool for capital management reinforcing our positive view towards future opportunities. In addition, in Korea, we closed one of the first asset-intensive transactions in the market, and we are optimistic about further opportunities. This transaction continues RJA's long track record of being a pioneer in asset-intensive reinsurance around the world. In our third area of notable growth, which is our Asia traditional business, we continue to see very positive results. Our focus has long been to package product development with capital and underwriting solutions to fuel our clients' growth and success. This quarter, we have added a technology solution to this package. This is a market-first digital underwriting solution to address the lengthy onboarding process for mainland Chinese visitors buying insurance in Hong Kong. We have successfully launched this with a key client and it is generating strong interest in the market. Finally, our fourth area of notable growth is the U.S. traditional business. Here, RJA has worked in partnership with one of our clients, one of the largest distributors in the U.S., and another reinsurer to develop a new proprietary life product. Each partner brought their own strengths to the table with RJ providing mortality expertise as well as performing all the case underwriting for the business. We expect this will stimulate future growth for RJ in these exclusive transactions. Outside our four areas, we continue to have strong success. In South Africa, we launched a new effort with a large growing bank assurer to offer simplified issue policies to the mass market. This uses RJA's proprietary model and technology to enhance the underwriting journey for customers. This is an important transaction with strategic significance, as we can leverage this solution elsewhere around the world. Finally, as I expressed at Investor Day, in addition to new business activities, we also have other levers to help grow ROE and PTAOI. This quarter, we executed and enforce actions across multiple regions, as well as asset repositioning into higher-yielding investments. These actions in aggregate generated positive PTAOI this quarter and also on an ongoing basis. All in all, I am delighted with yet another quarter where we are firing on all cylinders. Strong financial results in terms of PTAOI and ROE Strong success in the four areas of notable growth continues and other areas are also contributing with strategic transactions. We are increasingly using technology to deploy our intellectual property as we saw in South Africa and Hong Kong. Finally, we saw the successful use of the other levers RJ has available to unlock value in our balance sheet and positively impact profit and ROE. We are the only global reinsurer exclusively focused on life and health business, and thus our platform is unique. In my view, our capabilities are second to none. Success breeds success as the virtuous innovation cycle continues. I am fully confident in our ability to continue to deliver growth at attractive returns to our shareholders for many years to come. I will now turn it over to Todd to discuss the financial results in more detail.