Reinsurance Group of America, Incorporated

Hello and welcome to the Reinsurance Group of America's fourth 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 from the question queue, please press star and then two. As a reminder, today's conference is being recorded. I would now like to hand the call to Jeff Hopson, Head of Investor Relations. Please go ahead.

Thank you. Welcome to RGA's fourth quarter 2024 conference call. I'm joined on the call this morning with Tony Chang, RGA's President and CEO, Axel Andre, Chief Financial Officer, Leslie Barbee, Chief Investment Officer, and Jonathan Porter, Chief Risk Officer. A quick reminder before we get started regarding forward-looking information and 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 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 $4.99 per share. Our adjusted operating return on equity, excluding notable items, for the past year was 15.4%. The fourth quarter capped off a great year for RGA as we delivered record operating earnings and many other achievements across our organizations. In the quarter, our in-force transactions were solid at $250 million of capital deployed, and this was accompanied by continued strong momentum in organic business activity in all our key markets around the world. We once again successfully executed our balance sheet optimization strategy with various in-force actions. These actions resulted in not only favorable near-term results, continued long-term financial benefits, but also simultaneously reduced risk for RGA. Such actions are very much part of our business strategy, although lumpy in their nature. For the full year, we deployed just shy of $1.7 billion into transactions, which far exceeded any other year in RGA's history. Moreover, we entered 2025 with a robust pipeline and are excited about our business prospects across the globe. This strong and sustainable business momentum is a result of the RGA strategic platform and demonstrated discipline that we exhibit in both risk management and capital deployment. Based upon the strong quarterly and annual results and our confidence in the strong fundamentals of our business, we have increased our intermediate term operating ROE target to 13% to 15%, up from the previous 12% to 14%. In addition, we have raised our targets for earnings run rates and reaffirmed our 8% to 10% intermediate term growth target on this higher run rate. Let me now provide further details of some of our new business activities in the quarter focused on our four areas of notable growth. Commencing with our Asia traditional business, we have previously shared a number of important transactions where we play to our strengths and our ability to reinsure both the asset and biometric sides of the balance sheet. This has been predominantly in Hong Kong, which is where we first established our strong product development capabilities. In Q4 2024, we extended this strategy with four important transactions in mainland China that generated a meaningful value uplift. These transactions not only help our clients improve their asset liability management profiles, but also optimize our own ALM profile, providing further diversification for RGA. This is a great example of how our teams are finding creative ways to produce new opportunities to help our clients generate additional value for RGA whilst reducing our risk profile at the same time. In our second area of notable growth, U.S. traditional, the fourth quarter was another good quarter for new business after a very strong Q3 as the U.S. market is presenting increasingly attractive opportunities that align with RGA's underwriting strength complemented by the increasing use of technology and data. In addition, as previously reported, we closed the transaction with a key global client that included LTC and a block of structured settlements at an attractive risk-return trade-off. The block of LTC represented less than 2% of RJ's total liabilities with a consistent risk profile to our existing LTC-enforced block that has performed strongly for many years. Our third area of notable growth is the PRT and the longevity market. In the US PRT market, we completed a small transaction this quarter. The pipeline remains strong and we are optimistic about our prospects going forward. In the UK, we had a very active quarter to close out a record year as we completed a number of strategic transactions leveraging the strength of our client relationships. This included another large UK director plan longevity swap, where the client valued RGA's execution certainty. With this strong quarter, we surpassed 2023's new business performance, which was a record year for RGA. Finally, in Canada, we closed our first funded reinsurance PRT transaction, which was done with a strategic partner. We have done a few longevity swap reinsurance deals over the years, but this was the first deal where we reinsured risk from both sides of the balance sheet to bring new solutions to the market. Every dollar of longevity risk has the potential to diversify the overall risk of RJ given our substantial mortality business. Just like the earlier examples from China, we can generate profitable business and diversify our risk at the same time. Our final area of notable growth is in our Asia asset intensive business, where we completed a modest number of transactions to cap off a great year. In Japan, we finalized a landmark transaction with one of our key global clients. This is a material biometric asset intensive opportunity with an initial reserve of about 200 million US dollars. This, once again, demonstrates our ability to reinsure both sides of the balance sheet. As you can see in each example in all four areas of notable growth, we have been successful in winning exclusive transactions in our sweet spot. That is, we are able to combine our strong local market presence, biometric capabilities, asset management platform, and ability to reinsure both sides of the balance sheet for key clients around the globe. These are very much examples of what we call creation re-deals. These transactions create greater value for RGA and its clients and lead to a virtuous cycle of repeat deals within the same market or in other markets around the vast RGA network. This strategy is now fully being executed. This quarter and for the past two years, we are proud to say that the majority of the new business embedded value comes from creation re-deals. As previously mentioned, in addition to new business, we are able to enhance ROE and earnings through our balance sheet optimization strategy. This quarter, we completed another reinforced management action, which resulted in a client recapturing several blocks from the 1999-04 era, reducing our exposure to this underperforming period. Just like the Chinese New Business and the longevity transactions, this is yet another example of where we can create financial value and simultaneously diversify our enterprise risk. As I step back and review the full year's results, it was a tremendous year from both a financial and strategic perspective. Record operating EPS of $22.57 per share, up 14% from a strong 2023. Record capital deployment into transactions of $1.7 billion, up 80% from 2023. Record balance sheet optimization delivering $2.1 billion of long-term value. Record new business value up 70% from 2023, driven by creation redeals. To put a finer point on how historic 2024 was in terms of business activity, we completed the first, third, and fourth largest transactions in our history. Finally, we were able to deliver this success and business performance at an ROE for 2025 of 15.4%, which is above our intermediate target range. I am most proud of many things at RGA, but I'm most proud of the fact that everything we do at RGA is with a disciplined and balanced approach. We are not only about growth and winning new business, but just as much about being disciplined and patient for the right risk return trade-off. We are not only focused on the U.S., but also just as focused on Asia and EMEA, which represents over 50% of our earnings. We are not only about biometric risk, but as adept in reinsuring the asset side of the balance sheet. We achieve this balance by having an environment for an entrepreneurial spirit to flourish, but also instilling in each of our associates the vital importance of discipline and strong technical expertise. The true heart of the organization is that we are a group of risk managers focused on only one thing, which is life and health risk. By continuing to execute this proven formula for over 50 years, we have substantially grown our book value per share and have been able to raise ROE and earnings targets in each of the past two years. Therefore, no matter how proud I am of what we achieved in 2024, I am fully confident that the best is yet to come. I will now turn it over to our CFO, Axel Andre, to discuss the financial results in more detail.