Reinsurance Group Of America (RGA 1.17%), a global leader in life and health reinsurance, reported its second quarter 2025 earnings on July 31, 2025. The company’s earnings were the focus of attention as both profit and revenue missed Wall Street expectations. It reported non-GAAP earnings per share of $4.72, notably lower than the analyst estimate of $5.55, while the $5,676.37 million analyst consensus was not met. The period saw net income and earnings per share drop due to unfavorable claims in key business segments. The overall quarter reflected a mix of strength from international and financial solutions segments, while higher-than-expected claims in its largest U.S. division weighed on profit. Despite these setbacks, the company’s capital position improved, and it raised its quarterly dividend, showing confidence in future cash flows.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $4.72 | $5.55 | $5.48 | (13.9%) |
| EPS (GAAP) | $2.70 | $3.03 | (10.9%) | |
| Revenue (GAAP) | $4.15 billion | $5.68 billion | $4.88 billion | −15.0% |
| Net Premiums | $4.15 billion | $3.92 billion | 5.9% | |
| Book Value per Share | $182.37 | $147.90 | 23.3% |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
Reinsurance Group Of America is one of the world’s largest life and health reinsurers. It provides insurance companies with coverage that protects against significant claims, such as life insurance payouts and health-related benefits, across markets in North America, Asia Pacific, Europe, and beyond.
The company’s ability to succeed depends on several critical factors. Regulatory compliance stands out as a constant challenge as rules change and differ by region. Strong credit ratings are central to winning new business and maintaining trust. Its business is also shaped by diversification, both geographically and in product mix – offering traditional reinsurance (life and health risk protection) and financial solutions (capital management and longevity products). A concentrated client base can amplify risk, so expanding partnerships remains important. Innovation, particularly in financial solutions such as asset-intensive and longevity reinsurance, helps RGA stay relevant amid client demands for smarter risk management and investment products.
Quarter Highlights: Results and Operational Developments
The quarter’s most significant development was its earnings shortfall, mainly because of higher-than-expected large claims in its U.S. Individual Life business. Non-GAAP earnings per share were $4.72. 14.96% below the $5.55 analyst consensus (non-GAAP), marking a decline of 13.9% year over year. GAAP net income per share also slipped to $2.70 from $3.03 year over year, tracking the hit from U.S. claims volatility and a higher effective tax rate.
Net premiums, which represent insurance premiums earned minus what is paid to other insurers for coverage, rose 5.9% to $4.2 billion. International results were a bright spot. In Asia Pacific, net premiums from traditional reinsurance rose 15.3% year over year, and Asia Pacific Financial Solutions net premiums more than doubled year over year, highlighting growing demand for capital and longevity products in the region. The EMEA (Europe, Middle East, and Africa) region’s traditional net premiums rose 15.3% year over year. with improved profitability on the back of better claims experience and healthier investment margins. The U.S. and Latin America’s traditional business, RGA’s largest, saw net premiums grow 10.5% year over year. yet adjusted operating income before taxes fell sharply from $167 million to $4 million due to elevated claim payouts. Other segments in Canada and EMEA Financial Solutions also showed growth, but unfavorable group experience in Canada muted some of these gains.
One unusual feature of the quarter was the company’s effective tax rate, which climbed to 47% on GAAP pre-tax income, far above its expected 23–24 % range. This jump was due to valuation allowances on foreign tax credits and expenses tied to legal entity restructuring. On an adjusted operating basis, the rate was still above expectations at 25.2%, weighing down net results. A favorable foreign currency shift helped earnings slightly, adding $0.12 per diluted share to adjusted operating results.
Financial strength was a key takeaway. Estimated excess capital nearly doubled from $1.9 billion to $3.8 billion, reflecting additional regulatory credits and the closure of the Equitable Holdings transaction. Deployable capital also jumped, now at $3.4 billion. The company responded to this stronger capital base by raising its quarterly dividend 4.5 % to $0.93 per share. Book value per share was $182.37 as of June 30, 2025, signaling a healthier balance sheet. The company’s investment yield, excluding spread-based business, increased to 5.31%. benefiting from improved invested assets and new money rates. No major one-time adverse events or write-downs were reported during the quarter.
Product innovation continues to play a role in new business wins. The Creation Re strategy -- a tailored approach to partnering with clients on exclusive, often innovative risk and capital solutions – was highlighted as a driver, particularly successful in Asia and in winning large mortality block transactions. Financial solutions product lines, such as asset-intensive and longevity reinsurance, have fueled growth and diversified income sources.
Looking Ahead: Guidance and Key Watch Points
Management struck an optimistic tone for future periods. While no concrete financial guidance for the next quarter or full year was provided, forward-looking comments point to a robust pipeline of new reinsurance deals, especially in Asia Pacific and EMEA. The recently closed Equitable Holdings block transaction is expected to contribute an additional $160–170 million in annual pre-tax operating income in 2026, demonstrating continued ambition for larger, repeatable U.S. block transactions and international expansion. Capital deployment is expected to remain active, with management highlighting opportunities for both traditional and financial solutions growth.
Investors should watch trends in U.S. Individual Life claims experience, which proved volatile and significantly affected quarterly profit. The company’s ability to price risk correctly, expand its client base beyond key large customers, and execute efficient capital management will be important themes. Going forward, the increased dividend and rising book value per share point to management’s ongoing confidence in cash generation and long-term earnings growth. However, analysts are watching for any sustained negative impacts from segment concentration or major shifts in tax and regulatory conditions that could influence profit recovery.
The quarterly dividend was raised 4.5% to $0.93 per share, effective July 29, 2025.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
