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What changed in REINSURANCE GROUP OF AMERICA INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of REINSURANCE GROUP OF AMERICA INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+510 added−532 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-24)

Top changes in REINSURANCE GROUP OF AMERICA INC's 2023 10-K

510 paragraphs added · 532 removed · 410 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

101 edited+12 added−12 removed176 unchanged
Biggest changeResults from the global engagement survey, together with the Company’s retention rates, highlight the commitment of the Company’s Board of Directors and executive leadership team to its employees and its employees’ commitment to the Company. 15 Table of Contents Talent Attraction, Retention and Development As a global reinsurer, the Company’s continued growth and vitality is built on attracting, selecting, developing and retaining exceptional talent in order to execute its strategy and to continue producing innovative solutions for its clients.
Biggest changeTalent Attraction, Retention and Development As a global reinsurer, the Company’s continued growth and vitality is built on attracting, selecting, developing and retaining exceptional talent in order to execute its strategy and to continue producing innovative solutions for its clients. The Company’s focus on employee retention has resulted in a three-year average annual voluntary attrition rate of approximately 7% globally.
Since the inception of the supervisory college in October 2012, the MDCI has conducted regular in-person supervisory college meetings in addition to numerous regulator-only conference calls. These meetings generate requests for information from RGA’s regulators as they monitor RGA’s solvency, governance and overall management.
Since the inception of the supervisory college in October 2012, the MDCI has conducted regular in-person supervisory college meetings in addition to numerous regulator-only conference calls. These meetings generate requests from RGA’s regulators for information as they monitor RGA’s solvency, governance and overall management.
The Company employs medical directors and medical consultants to assist its underwriters in making these assessments. Pricing The Company has pricing actuaries dedicated in every geographic market and in every product category who develop reinsurance treaty rates following the Company’s policies, procedures and standards.
The Company employs medical directors and medical consultants to assist its underwriters in making these assessments. Pricing The Company has pricing actuaries dedicated to every geographic market and to every product category who develop reinsurance treaty rates following the Company’s policies, procedures and standards.
These reinsurance agreements are mostly structured as coinsurance, with some on a coinsurance with funds withheld, or modified coinsurance of primarily investment risk such that the Company recognizes profits or losses primarily from the spread between the investment earnings and amounts credited on the underlying contract liabilities.
These reinsurance agreements are mostly structured as coinsurance, with some on a coinsurance with funds withheld, or modified coinsurance of primarily investment risk such that the Company recognizes profits or losses primarily from the spread between the investment earnings and amounts credited on the underlying contract liabilities.
These forced localization requirements have the impact of limiting the amount of reinsurance business RGA can conduct in those countries without the participation of a local reinsurer. RGA expects the scope and extent of regulation outside of the U.S., as well as group regulatory oversight generally, to continue to increase.
These forced localization requirements have the impact of limiting the amount of reinsurance business RGA can conduct in those countries without the participation of a local reinsurer. RGA expects the scope and extent of regulation outside of the U.S., as well as group regulatory oversight, to continue to increase.
It is not possible to predict the effect of such decisions or changes in law on the operation of the Company, but the Dodd-Frank Act makes it more likely than in the past that insurance or reinsurance may be to some extent become regulated at the federal level.
It is not possible to predict the effect of such decisions or changes in law on the operation of the Company, but the Dodd-Frank Act makes it more likely than in the past that insurance or reinsurance may to some extent become regulated at the federal level.
Reinsurers have historically utilized letters of credit for the benefit of the ceding company, or have placed assets in trust for the benefit of the ceding company, or have used other structures as the primary forms of collateral. An exception to this requirement is expected to exist for reinsurance ceded to reciprocal reinsurers.
Reinsurers have historically utilized letters of credit for the benefit of the ceding company, or have placed assets in trust for the benefit of the ceding company, or have used other structures as the primary forms of collateral. An exception to this requirement is expected to exist for reinsurance ceded to reciprocal jurisdiction reinsurers.
Asset-intensive transactions are mostly structured to take on investment risk such that the Company recognizes profits or losses primarily from the spread between the investment earnings and the interest credited on the underlying annuity contract liabilities. Customer Base In 2022, the five largest clients generated approximately $1.4 billion or 45% of Asia Pacific operation’s gross premiums and other revenues.
Asset-intensive transactions are mostly structured to take on investment risk such that the Company recognizes profits or losses primarily from the spread between the investment earnings and the interest credited on the underlying annuity contract liabilities. Customer Base In 2023, the five largest clients generated approximately $1.4 billion or 45% of Asia Pacific operation’s gross premiums and other revenues.
The Covered Agreements, coupled with new state credit for reinsurance laws, has the potential to lower the cost at which RGA Reinsurance’s competitors are able to provide reinsurance to U.S. insurers. Additionally, under the Dodd-Frank Act, one or more of RGA’s client ceding insurers domiciled in the U.S. may from time-to-time be designated systemically important by the Federal Reserve.
The Covered Agreements, coupled with new state credit for reinsurance laws, have the potential to lower the cost at which RGA Reinsurance’s competitors are able to provide reinsurance to U.S. insurers. Additionally, under the Dodd-Frank Act, one or more of RGA’s client ceding insurers domiciled in the U.S. may from time-to-time be designated systemically important by the Federal Reserve.
Federal Regulation Since the 2010 enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the U.S. federal government has paid greater attention to the manner in which insurance and reinsurance is regulated, particularly when U.S. insurers and reinsurers are doing business outside of the U.S. Under the Dodd-Frank Act, the Federal Insurance Office within the U.S.
Federal Regulation Since the 2010 enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the U.S. federal government has paid greater attention to the manner in which insurance and reinsurance is regulated, particularly when U.S. insurers and reinsurers are doing business outside of the U.S. Under the Dodd-Frank Act, the Federal Insurance Office within the U.S.
RGA’s ESG Report can be found in our Investor section of our website at www.rgare.com The contents of our ESG Report and related supplemental information are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document the Company files with the SEC. C.
RGA’s Sustainability Report can be found in our Investor section of our website at www.rgare.com The contents of our Sustainability Report and related supplemental information are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document the Company files with the SEC. C.
As a result, RGA Reinsurance may need to alter the type and volume of business it reinsures, increase prices on those products, raise additional capital to support higher regulatory reserves or implement higher cost strategies, primarily involving the use of a certified reinsurer as discussed below.
As a result, RGA Reinsurance may need to alter the type and volume of business it reinsures, increase prices on those products, raise additional capital to support higher regulatory reserves or implement higher cost strategies, primarily involving the use of a certified reinsurer or reciprocal jurisdiction reinsurer as discussed below.
While the insurance capital standard is a model for capital standards and not a standard that must be followed on its own in any jurisdiction, it is likely to influence capital requirements for insurers around the world and may lead to a need for additional capital in one or more of RGA’s subsidiaries.
While the ICS is a model for capital standards and not a standard that must be followed on its own in any jurisdiction, it is likely to influence capital requirements for insurers around the world and may lead to a need for additional capital in one or more of RGA’s subsidiaries.
In addition, 11 other clients each generated annual gross premiums and other revenues of $20 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 36% of Canada operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
In addition, 11 other clients each generated annual gross premiums and other revenues of $20 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 37% of Canada operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
Treasury Department has negotiated a “covered agreement” with the European Union, as well as a similar “covered agreement” with the United Kingdom (“UK”) (together, the “Covered Agreements”).
Department of the Treasury has negotiated a “covered agreement” with the European Union, as well as a similar “covered agreement” with the United Kingdom (“UK”) (together, the “Covered Agreements”).
Restrictions on Dividends and Distributions Current Missouri law, applicable to RGA Life and Annuity and its subsidiaries, RGA Reinsurance and Chesterfield Re, permits the payment of dividends or distributions by each company that together with dividends or distributions paid during the preceding twelve months by that company do not exceed the greater of (i) 10% of the insurer’s statutory capital and surplus 9 Table of Contents as of the preceding December 31, or (ii) the insurer’s statutory net gain from operations for the preceding calendar year.
Restrictions on Dividends and Distributions Current Missouri law, applicable to RGA Life and Annuity and its subsidiaries, RGA Reinsurance and Chesterfield Re, permits the payment of dividends or distributions by each company that together with dividends or distributions paid during the preceding twelve months by that company do not exceed the greater of (i) 10% of the insurer’s statutory capital and surplus as of the preceding December 31, or (ii) the insurer’s statutory net gain from operations for the preceding calendar year.
In addition, a regional team based in Hong Kong has been established in recent years to provide support to the Asian offices to accommodate business growth in the region. RGA Australia employs its own underwriting, actuarial, claims, pricing, accounting, systems, marketing, and administration service.
In addition, a regional team based in Hong Kong has been established to provide support to the Asian offices to accommodate business growth in the region. RGA Australia employs its own underwriting, actuarial, claims, pricing, accounting, systems, marketing, and administration service.
While no U.S. insurers or reinsurers are currently designated as systemically important entities, and the international designation of “Globally Systemically Important Insurers” has been suspended by the Financial Stability Board, it remains possible that one or more of RGA’s clients will be given this designation in the future leading to additional scrutiny of those clients’ reinsurance programs by the Federal Reserve.
While no U.S. insurers or reinsurers are currently designated as systemically important entities, and the international designation of “Globally Systemically Important Insurers” has been suspended by the 10 Table of Contents Financial Stability Board, it remains possible that one or more of RGA’s clients will be given this designation in the future leading to additional scrutiny of those clients’ reinsurance programs by the Federal Reserve.
The Covered Agreements, while promoting the recognition of U.S. state insurance regulators as group supervisors of U.S.-based global reinsurers such as RGA, also provides for an elimination of the collateral that has to be posted by reinsurers based in the European Union, and by NAIC’s anticipated extension of the rules, to those reinsurers based in additional jurisdictions that seek evaluation by the NAIC for treatment comparable to that given to members of the European Union under the U.S. – E.U.
The Covered Agreements, while promoting the recognition of U.S. state insurance regulators as group supervisors of U.S.-based global reinsurers such as RGA, also provides for an elimination of the collateral that has to be posted by reinsurers based in the European Union, the UK and by the NAIC’s anticipated extension of the rules, to those reinsurers based in additional jurisdictions that seek evaluation by the NAIC for treatment comparable to that given to members of the European Union and the UK.
The Company’s global team of approximately 3,800 employees consistently develop innovative solutions for its clients, deliver long-term returns for its investors, and create a meaningful impact in the communities where its employees live and work.
The Company’s global team of approximately 3,900 employees consistently develop innovative solutions for its clients, deliver long-term returns for its investors, and create a meaningful impact in the communities where its employees live and work.
Traditional reinsurance in the UK, South Africa, Italy and Germany consists predominantly of long term contracts, which are not terminable for existing risk without recapture or natural expiry, whereas in other markets within the region contracts are predominantly short term, renewing annually. Financial Solutions The Company’s EMEA Financial Solutions segment includes longevity, asset-intensive and financial reinsurance.
Traditional reinsurance in the UK, South Africa, Italy and Germany consists 19 Table of Contents predominantly of long term contracts, which are not terminable for existing risk without recapture or natural expiry, whereas in other markets within the region contracts are predominantly short term, renewing annually. Financial Solutions The Company’s EMEA Financial Solutions segment includes longevity, asset-intensive and financial reinsurance.
Longevity reinsurance takes the form of closed block annuity reinsurance and longevity swap structures. Asset-intensive business for this segment consists of coinsurance of payout annuities. Financial reinsurance assists ceding companies in meeting applicable regulatory requirements while enhancing their financial strength. Financial reinsurance transactions do not 19 Table of Contents qualify as reinsurance under U.S.
Longevity reinsurance takes the form of closed block annuity reinsurance and longevity swap structures. Asset-intensive business for this segment consists of coinsurance of payout annuities. Financial reinsurance assists ceding companies in meeting applicable regulatory requirements while enhancing their financial strength. Financial reinsurance transactions do not qualify as reinsurance under U.S.
An assessment of medical and financial history follows with decisions based on underwriting knowledge, manual review and consultation with the Company’s medical directors as necessary. Many facultative applications involve individuals with multiple medical impairments, such as heart disease, high blood pressure, and diabetes, which require a complex underwriting/mortality assessment.
An assessment of medical and financial history follows with decisions based on 14 Table of Contents underwriting knowledge, manual review and consultation with the Company’s medical directors as necessary. Many facultative applications involve individuals with multiple medical impairments, such as heart disease, high blood pressure, and diabetes, which require a complex underwriting/mortality assessment.
New capital standards (discussed below) are being developed and are likely to be applied to one or more of the Company’s subsidiaries to either require more capital and/or limit the extent to which some forms of existing capital may be counted in an evaluation of financial strength by its regulators. U.S.
New capital standards (discussed below) are being developed and are likely to be applied to one or more of the Company’s subsidiaries to either require more capital and/or limit the extent to which some forms of existing capital may be counted in an evaluation of financial strength by its regulators. 6 Table of Contents U.S.
Aurora National prepares its statutory financial statements in conformity with accounting practices prescribed or permitted by the State of California. Each of these states require domestic insurance companies to prepare their statutory financial statements in accordance with the NAIC Accounting Practices and Procedures manual subject to any deviations permitted by each state’s insurance commissioner.
Aurora 8 Table of Contents National prepares its statutory financial statements in conformity with accounting practices prescribed or permitted by the State of California. Each of these states require domestic insurance companies to prepare their statutory financial statements in accordance with the NAIC Accounting Practices and Procedures manual subject to any deviations permitted by each state’s insurance commissioner.
The U.S. and Latin America operations’ marketing efforts have focused on developing facultative relationships with client companies because management believes facultative reinsurance represents a substantial segment of the reinsurance activity of many large insurance companies and also serves as an effective means of expanding the U.S. and Latin America operations’ automatic business.
The U.S. and Latin America operations’ marketing efforts have focused on developing 17 Table of Contents facultative relationships with client companies because management believes facultative reinsurance represents a substantial segment of the reinsurance activity of many large insurance companies and also serves as an effective means of expanding the U.S. and Latin America operations’ automatic business.
These regulations includes minimum capital, solvency and governance requirements. The authority of RGA’s international operations to conduct business is subject to licensing requirements, inspections and approvals and these authorizations are subject to modification and revocation.
These regulations include minimum capital, solvency and governance requirements. The authority of RGA’s international operations to conduct business is subject to licensing requirements, inspections and approvals and these authorizations are subject to modification and revocation.
Automatic reinsurance treaties specify the ceding company’s binding limit, which is the maximum amount of risk on a given life that can be ceded automatically to the reinsurer and that the reinsurer must accept. The binding limit may be stated either as a multiple of the ceding company’s retention or as a stated dollar amount.
Automatic 4 Table of Contents reinsurance treaties specify the ceding company’s binding limit, which is the maximum amount of risk on a given life that can be ceded automatically to the reinsurer and that the reinsurer must accept. The binding limit may be stated either as a multiple of the ceding company’s retention or as a stated dollar amount.
Insurance laws and regulations, among other things, establish minimum capital requirements and 6 Table of Contents limit the amount of dividends, distributions, and intercompany payments that affiliates can make without regulatory approval. Additionally, insurance laws and regulations impose restrictions on the amounts and types of investments that insurance companies may hold.
Insurance laws and regulations, among other things, establish minimum capital requirements and limit the amount of dividends, distributions, and intercompany payments that affiliates can make without regulatory approval. Additionally, insurance laws and regulations impose restrictions on the amounts and types of investments that insurance companies may hold.
See Note 11 – “Financial Condition and Net Income on a Statutory Basis” in the Notes to Consolidated Financial Statements for additional information on the Company’s dividend restrictions.
See Note 16 – “Financial Condition and Net Income on a Statutory Basis” in the Notes to Consolidated Financial Statements for additional information on the Company’s dividend restrictions.
Further adoptions of laws patterned after the GDPR are expected around the world. Ratings Insurer financial strength ratings, sometimes referred to as claims paying ratings, represent the opinions of rating agencies regarding the financial ability of an insurance company to meet its obligations under an insurance policy.
Further adoptions of laws patterned after the GDPR are expected around the world. 13 Table of Contents Ratings Insurer financial strength ratings, sometimes referred to as claims paying ratings, represent the opinions of rating agencies regarding the financial ability of an insurance company to meet its obligations under an insurance policy.
Taking a risk-based approach to regulation that looks at the nature, scale and complexity of an insurer’s business, the Bermuda Monetary Authority (“BMA”) 11 Table of Contents typically applies less regulatory oversight to Class A captive insurers and greater regulatory oversight to Class E commercial insurers.
Taking a risk-based approach to regulation that looks at the nature, scale and complexity of an insurer’s business, the Bermuda Monetary Authority (“BMA”) typically applies less regulatory oversight to Class A captive insurers and greater regulatory oversight to Class E commercial insurers.
Additionally, dividends may be paid only to the extent the insurer has unassigned surplus (as opposed to contributed surplus). The regulatory limitations and other restrictions described herein could limit the Company’s financial flexibility in the future should it choose to or need to use subsidiary dividends as a funding source for its obligations.
Additionally, dividends may be paid only to the extent the insurer has unassigned surplus (as opposed to contributed surplus). 9 Table of Contents The regulatory limitations and other restrictions described herein could limit the Company’s financial flexibility in the future should it choose to or need to use subsidiary dividends as a funding source for its obligations.
Generally, the reinsurer is required to be licensed, accredited or certified in the insurer’s state of domicile or the reinsurer must be domiciled in a jurisdiction that is found by the U.S. regulators to observe the standards established in the U.S. – E.U. Covered Agreement.
Generally, the reinsurer is required to be licensed, accredited or certified in the insurer’s state of domicile or the reinsurer must be domiciled in a jurisdiction that is found by the U.S. regulators to observe the standards established in the U.S. – E.U. Covered Agreement, i.e., a “reciprocal jurisdiction reinsurer”.
Additional information regarding the operations of the Company’s segments and geographic operations is contained in Note 15 – “Segment Information” in the Notes to Consolidated Financial Statements.
Additional information regarding the operations of the Company’s segments and geographic operations is contained in Note 19 – “Segment Information” in the Notes to Consolidated Financial Statements.
To that end, the BMA has broad powers to regulate business activities of the Company’s Bermuda domiciled subsidiaries, mandate capital and surplus requirements, regulate trade and claims practices and require strong enterprise risk management and corporate governance activities.
To 11 Table of Contents that end, the BMA has broad powers to regulate business activities of the Company’s Bermuda domiciled subsidiaries, mandate capital and surplus requirements, regulate trade and claims practices and require strong enterprise risk management and corporate governance activities.
In addition, thirty-six other clients each generated annual gross premiums and other revenues of $100 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 50% of the Company’s gross premiums and other revenues. No individual client generated 10% or more of the Company’s total gross premiums and other revenues.
In addition, 36 other clients each generated annual gross premiums and other revenues of $100 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 50% of the Company’s gross premiums and other revenues. No individual client generated 10% or more of the Company’s total gross premiums and other revenues.
In addition, 23 other clients each generated annual gross premiums and other revenues of $20 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 41% of EMEA operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
In addition, 22 other clients each generated annual gross premiums and other revenues of $20 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 38% of EMEA operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
An ongoing partnership with clients is important with asset-intensive reinsurance because of the active management involved in this type of reinsurance. This active management includes investment decisions, investment and claims management, and the determination of non-guaranteed elements.
An ongoing partnership with clients is important with asset-intensive reinsurance because of the active management involved in this type of reinsurance. This active management may include investment decisions, investment and claims management, and the determination of non-guaranteed elements.
The Company’s insurer financial strength ratings as of the date of this filing are listed in the table below for each rating agency that meets with the Company’s management on a regular basis. As of the date of this filing, the Standard & Poor’s (“S&P”), A.M. Best Company (“A.M.
The Company’s insurer financial strength ratings and RGA’s senior debt ratings as of the date of this filing are listed in the table below for each rating agency that meets with the Company’s management on a regular basis. As of the date of this filing, the Standard & Poor’s (“S&P”), A.M. Best Company (“A.M.
For transactional business focusing on tail risk the Company has policies and procedures related to views on transaction-specific tail risk events. 14 Table of Contents A transaction process ensures that the business reflects the input of internal areas of expertise in deal teams and has procedures for escalation based on the size and nature of the risks.
For transactional business focusing on tail risk, the Company has policies and procedures related to views on transaction-specific tail risk events. A transaction process ensures that the business reflects the input of internal areas of expertise in transaction teams and has procedures for escalation based on the size and nature of the risks.
(“RGA Global”) Bermuda RGA Reinsurance Company of Australia Limited (“RGA Australia”) Australia RGA International Reinsurance Company dac (“RGA International”) Ireland RGA Reinsurance Company of South Africa, Limited (“RGA South Africa”) South Africa Aurora National Life Assurance Company (“Aurora National”) California Omnilife Insurance Company, Limited United Kingdom Hodge Life Assurance Company Limited United Kingdom Certain of the Company’s subsidiaries are subject to regulations in the other jurisdictions in which they are licensed or authorized to do business.
(“RGA Global”) Bermuda RGA Reinsurance Company of Australia Limited (“RGA Australia”) Australia RGA International Reinsurance Company dac (“RGA International”) Ireland Aurora National Life Assurance Company (“Aurora National”) California Omnilife Insurance Company, Limited United Kingdom Hodge Life Assurance Company Limited United Kingdom Certain of the Company’s subsidiaries and branches are subject to regulations in the other jurisdictions in which they are licensed or authorized to do business.
The NAIC Life and Health Reinsurance Agreements Model Regulation, which has been adopted in most states, including Missouri, imposes additional requirements for insurers to claim reserve credit for reinsurance ceded (excluding yearly renewable term reinsurance and non- 7 Table of Contents proportional reinsurance).
The NAIC Life and Health Reinsurance Agreements Model Regulation, which has been adopted in most states, including Missouri, imposes additional requirements for insurers to claim reserve credit for reinsurance ceded (excluding yearly renewable term reinsurance and non-proportional reinsurance).
The Company cannot predict the effect that any proposed or future legislation or rulemaking in the countries in which it operates may have on the financial condition or operations of the Company or its subsidiaries.
The Company cannot predict the effect that any proposed or future legislation or rule making in the countries in which it operates may have on the financial condition or operations of the Company or its subsidiaries.
The Company’s Environmental Social and Governance (ESG) Report offers additional information across the areas of: Business Ethics & Responsible Practices; Responsible Investment Approach; Sustainable Innovation for Social Impact; Culture of Care; and Environmental Stewardship.
The Company’s Sustainability Report offers additional information across the areas of: Business Ethics & Responsible Practices; Responsible Investment Approach; Sustainable Innovation for Social Impact; Culture of Care; and Environmental Stewardship.
Customer Base Clients include most of the life insurers in Canada, although the number of life insurers is much smaller compared to the U.S. In 2022, the five largest clients generated approximately $821 million or 59% of Canada operation’s gross premiums and other revenues.
Customer Base Clients include most of the life insurers in Canada, although the number of life insurers is much smaller compared to the U.S. In 2023, the five largest clients generated approximately $809 million or 59% of Canada operation’s gross premiums and other revenues.
Best”), and the Moody’s Investors Service (“Moody’s”) ratings listed below are on stable outlook. 13 Table of Contents Insurer Financial Strength Ratings A.M. Best (1) Moody’s (2) S&P (3) RGA Reinsurance Company A+ A1 AA- RGA Life Reinsurance Company of Canada A+ AA- RGA International Reinsurance Company dac AA- RGA Global Reinsurance Company, Ltd.
Best”), and the Moody’s Investors Service (“Moody’s”) ratings listed below are on stable outlook. Insurer Financial Strength Ratings A.M. Best (1) Moody’s (2) S&P (3) RGA Reinsurance Company A+ A1 AA- RGA Life and Annuity Insurance Company A+ AA- RGA Life Reinsurance Company of Canada A+ AA- RGA International Reinsurance Company dac AA- RGA Global Reinsurance Company, Ltd.
These conditions include change in control, level of capital or ratings of the subsidiary, insolvency, nonperformance under a treaty, or loss of the 8 Table of Contents subsidiary’s reinsurance license.
These conditions include change in control, level of capital or ratings of the subsidiary, insolvency, nonperformance under a treaty, or loss of the subsidiary’s reinsurance license.
GAAP, due to the low risk nature of the transactions and are reported in accordance with deposit accounting guidelines. Customer Base In 2022, the five largest clients generated approximately $1.0 billion or 43% of EMEA operation’s gross premiums and other revenues.
GAAP, due to the low risk nature of the transactions and are reported in accordance with deposit accounting guidelines. Customer Base In 2023, the five largest clients generated approximately $1.1 billion or 44% of EMEA operation’s gross premiums and other revenues.
Valuation of Life Policies Model Regulation (commonly referred to as Regulation XXX), implemented beginning in 2002 for various types of life insurance business, significantly increased the level of reserves that U.S. life insurance and life reinsurance companies must maintain on their statutory financial statements for various types of life insurance business, primarily certain level premium term life products.
Valuation of Life Policies Model Regulation (commonly referred to as Regulation XXX) for various types of life insurance business, significantly increased the level of reserves that U.S. life insurance and life reinsurance companies must maintain on their statutory financial statements for various types of life insurance business, primarily certain level premium 7 Table of Contents term life products.
Environmental, Social and Governance Insurance regulators are considering imposing new rules regarding how insurers incorporate and report about environmental, social, and governance (“ESG”) considerations into their operational decisions, underwriting, and investment decisions. Currently, efforts are aimed at enacting laws and regulations that focus on testing underwriting models for bias.
Environmental, Social and Governance Insurance regulators are considering imposing new rules regarding how insurers incorporate and report about environmental, social, and governance (“ESG”) considerations into their operational decisions, underwriting, and investment decisions. Currently, efforts are aimed at testing underwriting models for bias.
AA- RGA Reinsurance Company of Australia Limited AA- RGA Reinsurance Company (Barbados) Ltd. AA- RGA Americas Reinsurance Company, Ltd. A+ AA- RGA Atlantic Reinsurance Company Ltd. A+ AA- RGA Worldwide Reinsurance Company, Ltd. AA- Aurora National Life Assurance Company A+ Omnilife Insurance Company Limited A+ (1) An A.M.
AA- RGA Reinsurance Company of Australia Limited AA- RGA Reinsurance Company (Barbados) Ltd. AA- RGA Americas Reinsurance Company, Ltd. A+ AA- RGA Atlantic Reinsurance Company Ltd. A+ AA- RGA Worldwide Reinsurance Company, Ltd. AA- Aurora National Life Assurance Company A+ Omnilife Insurance Company Limited A+ Senior Debt Rating RGA a- Baal A (1) An A.M.
(2) A Moody’s insurer financial strength rating of “A1” (good) is the fifth highest rating out of twenty-one possible ratings and indicates that Moody’s believes the insurance company offers good financial security; however, elements may be present which suggest a susceptibility to impairment sometime in the future.
(2) A Moody’s insurer financial strength rating of “A1” (good) is the fifth highest rating out of twenty-one possible ratings and indicates that Moody’s believes the insurance company offers good financial security; however, elements may be present which suggest a susceptibility to impairment sometime in the future. Moody’s long-term issuer credit ratings range from “Aaa” (highest) to “C” (default).
Additionally, Corporate and Other includes results that, among other activities, develop and market technology, and provide consulting and outsourcing solutions for the insurance and reinsurance industries.
Additionally, Corporate and Other includes results from certain wholly-owned subsidiaries that, among other activities, develop and market technology and provide consulting and outsourcing solutions for the insurance and reinsurance industries.
Corporate and Other expenses consist of the offset to capital charges allocated to the operating segments within the policy acquisition costs and other insurance income line item, unallocated overhead and executive costs, interest expense related to debt, and the investment income and expense associated with the Company’s collateral finance and securitization transactions and service business expenses.
Corporate and Other expenses consist of the offset to capital charges allocated to the operating segments within the policy acquisition costs and other insurance income line item, unallocated overhead and executive costs, interest expense related to debt and service business expenses.
Corporate Social Responsibility, Diversity, Equity and Inclusion The Company believes that creating long-term value for its stakeholders implicitly requires enacting and executing sustainable business practices and strategies that, while delivering competitive returns, also take into account environmental, social and governance ("ESG") issues.
Corporate Social Responsibility, Diversity, Equity and Inclusion The Company believes that creating long-term value for its stakeholders implicitly requires enacting and executing sustainable business practices and strategies that, while delivering competitive returns.
The Company expects Solvency II to have a significant influence on not only the regulation of solvency measures applied to insurers and reinsurers operating within the EEA, but the Company also expects the solvency regulation measures to influence future regulatory structures of countries outside of the EEA, including Japan.
Solvency II has a significant influence on the regulation of solvency measures applied to insurers and reinsurers operating within the EEA, and the Company also expects the solvency regulation measures to 12 Table of Contents influence future regulatory structures of countries outside of the EEA, including Japan.
Best insurer financial strength rating of “A+” (superior) is the second highest out of sixteen possible ratings and is assigned to companies that have, in A.M. Best’s opinion, a superior ability to meet their ongoing insurance obligations.
Best insurer financial strength rating of “A+” (superior) is the second highest out of sixteen possible ratings and is assigned to companies that have, in A.M. Best’s opinion, a superior ability to meet their ongoing insurance obligations. A.M. Best long-term issuer credit ratings range from “aaa” (exceptional) to “c” (Poor).
The Company has integrated diversity, equity, and inclusion training into its leadership development offerings and expanded education offerings to include Mitigating Bias in Interviewing, Psychological Safety, and new manager training.
The Company has integrated diversity, equity, and inclusion training into its leadership development offerings and expanded education offerings to include Mitigating Bias in Interviewing, Psychological Safety, and new manager training. The Company’s education and accountability initiatives are the foundation of its efforts to promote diversity, equity, and inclusion.
RGA’s reinsurance subsidiaries are required to file statutory financial statements in each jurisdiction in which they are licensed and may be subject to onsite, periodic examinations by the insurance regulators of the jurisdictions in which each is licensed, authorized, or accredited. To date, none of the regulators’ reports related to the Company’s periodic examinations have contained material adverse findings.
RGA’s reinsurance subsidiaries and branches are required to file statutory financial statements in each jurisdiction in which they are licensed and may be subject to onsite, periodic examinations by the insurance regulators of the jurisdictions in which each is licensed, authorized, or accredited.
The Company understands that it has a responsibility to monitor and control its ecological and societal impact and adopt responsible practices on ESG issues in addition to its obligations regarding corporate strategy, risks, opportunities, and performance.
The Company understands that it has a responsibility to monitor and 16 Table of Contents control its ecological and societal impact in addition to its obligations regarding corporate strategy, risks, opportunities, and performance.
Financial Information About Foreign Operations The Company’s foreign operations are primarily in Canada, Asia Pacific, EMEA and Latin America. Revenue, income (loss) before income taxes, which include investment related gains (losses), interest expense, depreciation and amortization, and identifiable assets attributable to these geographic regions are identified in Note 15 – “Segment Information” in the Notes to Consolidated Financial Statements.
Revenue, income (loss) before income taxes, which include investment related gains (losses), interest expense, depreciation and amortization, and identifiable assets attributable to these geographic regions are identified in Note 19 – “Segment Information” in the Notes to Consolidated Financial Statements.
In 2022, the five largest clients generated approximately $1.7 billion or 24% of U.S. and Latin America operation’s gross premiums and other revenues.
In 2023, excluding premiums from single premium pension risk transfer transactions, the five largest clients generated approximately $1.7 billion or 24% of U.S. and Latin America operation’s gross premiums and other revenues.
The Company’s diversity, equity, and inclusion initiatives are focused in four areas: (i) enabling an inclusive workplace; (ii) attracting, retaining and engaging a diverse workforce; (iii) fostering diverse partnerships in the communities where the Company operates; and (iv) ensuring accountability and responsibility throughout the Company. 100% of the Company’s global employees have undertaken Everyday (Unconscious) Bias training and the Company has extended the Inclusive Leadership course to include all leaders.
The Company’s diversity, equity, and inclusion initiatives are focused in four areas: (i) fostering diverse talent and promoting an equitable culture; (ii) advancing diversity, equity and inclusion in the community and industry where the Company operates; (iii) establishing accountability and measurement throughout the Company; and (iv) building an inclusive workplace. 100% of the Company’s global employees have undertaken Everyday (Unconscious) Bias training and the Company has extended the Inclusive Leadership course to include all leaders.
In the U.S., a certified reinsurer designation provides an alternative way to manage regulatory reserves and collateral requirements. In 2014, RGA Americas was designated as a certified reinsurer by the MDCI. This designation allows the Company to retrocede business to RGA Americas in lieu of using captives for collateral requirements.
In the U.S., a certified reinsurer designation provides an alternative way to manage regulatory reserves and collateral requirements. In 2014, RGA Americas was designated as a certified reinsurer by the MDCI. In 2022, RGA Americas was designated as a reciprocal jurisdiction reinsurer by MDCI.
The Company is a leading global provider of traditional life and health reinsurance and financial solutions with operations in the U.S., Latin America, Canada, Europe, the Middle East, Africa, Asia and Australia.
See Note 3 – “Impact of New Accounting Standard” in the Notes to Consolidated Financial Statements for additional information. The Company is a leading global provider of traditional life and health reinsurance and financial solutions with operations in the U.S., Latin America, Canada, Europe, the Middle East, Africa, Asia and Australia.
Customer Base The Company provides reinsurance products primarily to the largest life insurance companies in the world. In 2022, the Company’s five largest clients generated approximately $2.6 billion or 18% of the Company’s gross premiums and other revenues.
Customer Base The Company provides reinsurance products primarily to the largest life insurance companies in the world. In 2023, excluding premiums from single premium pension risk transfer transactions, the Company’s five largest clients generated approximately $2.7 billion or 19% of the Company’s gross premiums and other revenues.
Automatic reinsurance treaties generally provide that the reinsurer will be liable for a portion of the risk associated with the specified policies written by the ceding company.
In contrast to facultative reinsurance, the reinsurer does not approve each individual policy being reinsured. Automatic reinsurance treaties generally provide that the reinsurer will be liable for a portion of the risk associated with the specified policies written by the ceding company.
While the NAIC is still developing its group capital calculation and has not yet articulated the ways in which it intends U.S. states to use the calculation, the calculation is expected to be used to assess the adequacy of capital within an insurance group domiciled in the U.S., particularly for groups such as RGA that are designated an IAIG by the group supervisor.
It is clear that the calculation is expected to be used to assess the adequacy of capital within an insurance group domiciled in the U.S., particularly for groups such as RGA that are designated an IAIG by the group supervisor.
Compensation and Benefits and Pay Equity The Company is committed to fostering a company culture that is inclusive, collaborative, and socially responsible. The Company is strengthened by its diverse workforce and recognizes that its employees are its greatest asset.
While technical expertise is critical, the Company also focuses on the development of highly effective interpersonal and leadership skills. Compensation and Benefits and Pay Equity The Company is committed to fostering a company culture that is inclusive, collaborative, and socially responsible. The Company is strengthened by its diverse workforce and recognizes that its employees are its greatest asset.
The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements.
The assets are owned by the trustees of such plans, who invest the assets under the terms of investment guidelines to which the Company agrees. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements.
Covered Agreement. A similar covered agreement is in place between the U.S. and the UK providing comparable results to both countries. The extension of the Covered Agreement treatment to additional jurisdictions will provide for the elimination of the collateral that reinsurers domiciled in those jurisdictions must currently post in favor of U.S. ceding insurers.
The extension of the Covered Agreements treatment to additional jurisdictions will provide for the elimination of the collateral that reinsurers domiciled in those jurisdictions must currently post in favor of U.S. ceding insurers.
RGA’s subsidiaries meet the minimum capital requirements in their respective jurisdictions. The International Association of Insurance Supervisors continues work on its insurance capital standard.
RGA’s subsidiaries meet the minimum capital requirements in their respective jurisdictions. The International Association of Insurance Supervisors continues to develop group-wide capital standard for IAIGs, the Insurance Capital Standard (“ICS”).
RGA Canada employs its own underwriting, actuarial, claims, pricing, accounting, systems, marketing and administrative staff in offices located in Montreal and Toronto. 18 Table of Contents Traditional Reinsurance RGA Canada assists clients with capital management and mortality and morbidity risk management and is primarily engaged in individual life reinsurance, and to a lesser extent creditor, group life and health, critical illness and disability reinsurance, through yearly renewable term and coinsurance agreements.
Traditional Reinsurance RGA Canada assists clients with capital management and mortality and morbidity risk management and is primarily engaged in individual life reinsurance, and to a lesser extent creditor, group life and health, critical illness and disability reinsurance, through yearly renewable term and coinsurance agreements.
An S&P insurer financial strength rating of “A+” (strong) is the fifth highest rating out of twenty-two possible ratings. According to S&P’s rating scale, a rating of “A+” means that, in S&P’s opinion, the insurer has strong financial security characteristics. The ability to write reinsurance partially depends on a reinsurer’s financial condition and its issuer financial strength ratings.
An S&P insurer financial strength rating of “A+” (strong) is the fifth highest rating out of twenty-two possible ratings. According to S&P’s rating scale, a rating of “A+” means that, in S&P’s opinion, the insurer has strong financial security characteristics. S&P’s long-term issuer credit ratings range from “AAA” (extremely strong) to “D” (default).
The Company’s employees describe RGA as a collaborative, results-driven, customer-centric, and an ethical organization. Work at the Company is undertaken in an environment of high collaboration, which encourages innovation and entrepreneurship and demands the highest integrity. The Company’s practice of combining technical expertise with curiosity and creativity, in partnership with its clients, defines the way it works internally and externally.
The Company’s employees describe RGA as a collaborative, results-driven, customer-centric, and an ethical organization. 15 Table of Contents Work at the Company is undertaken in an environment of high collaboration, which encourages innovation and entrepreneurship and demands the highest integrity.
These policies have generally been issued to fund deferred compensation plans and have been reinsured with the Company. Financial Solutions – Asset-Intensive Reinsurance The Company’s U.S. and Latin America Asset-Intensive operations primarily concentrate on the investment risk within underlying annuities and other investment oriented products.
Financial Solutions – Asset-Intensive Reinsurance The Company’s U.S. and Latin America Asset-Intensive operations primarily concentrate on the investment risk within underlying annuities and other investment oriented products.
For a further discussion of the risks, uncertainties and actions taken in response to COVID-19, refer to Item 1A "Risk Factors" and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations.” Traditional Reinsurance Traditional reinsurance includes individual and group life and health, disability, long-term care and critical illness reinsurance, as further described below: • Life reinsurance primarily refers to reinsurance of individual or group-issued term, whole life, universal life, and joint and last survivor insurance policies. • Health and disability reinsurance primarily refers to reinsurance of individual or group health policies. • Long-term care reinsurance provides benefits in the event a person is no longer able to perform some specified activities of daily living. • Critical illness reinsurance provides a benefit in the event of the diagnosis of a pre-defined critical illness. 4 Table of Contents Traditional reinsurance is written on a facultative or automatic treaty basis.
Traditional Reinsurance Traditional reinsurance includes individual and group life and health, disability, long-term care and critical illness reinsurance, as further described below: • Life reinsurance primarily refers to reinsurance of individual or group-issued term, whole life, universal life, and joint and last survivor insurance policies. • Health and disability reinsurance primarily refers to reinsurance of individual or group health policies. • Long-term care reinsurance provides benefits in the event a person is no longer able to perform some specified activities of daily living. • Critical illness reinsurance provides a benefit in the event of the diagnosis of a pre-defined critical illness.
In addition, 24 other clients each generated annual gross premiums and other revenues of $20 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 40% of Asia Pacific operation’s gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
In addition, 24 other clients each generated annual gross premiums and other revenues of $20 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 39% of Asia Pacific operation’s gross premiums and other revenues.
The Company invests in this area in an effort to both support its clients and accelerate the 20 Table of Contents development of new solutions and services to increase customer engagement within the life insurance industry and hence generate new future revenue streams. D.
The Company invests in this area in an effort to both support its clients and accelerate the development of innovative solutions and services to increase consumer engagement within the life insurance industry and hence generate new future revenue streams. D. Financial Information About Foreign Operations The Company’s foreign operations are primarily in Canada, Asia Pacific, EMEA and Latin America.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our financial performance significantly deteriorates to the point where a premium deficiency exists, a cumulative charge to current operations will be recorded, which may adversely affect our net income in a particular reporting period. 22 Table of Contents We utilize assumptions, estimates and models to evaluate our business, results of operations and financial condition, and develop scenarios to evaluate our potential exposure to mortality claims, potential investment portfolio losses and other risks associated with our assets and liabilities, both related to COVID-19 and otherwise.
Biggest changeIf our financial performance significantly deteriorates to the point where a premium deficiency exists, a cumulative charge to current operations will be recorded, which may adversely affect our net income in a particular reporting period.
These laws and regulations may apply heightened scrutiny to non-domestic companies, which can adversely affect our operations, liquidity, profitability and regulatory capital. Foreign governments and regulatory bodies from time to time consider legislation and regulations that could subject us to new or different requirements and such changes could negatively impact our operations in the relevant jurisdictions. See “Item 1.
These laws and regulations may apply heightened scrutiny to non-domestic companies, which can adversely affect our operations, liquidity, profitability and regulatory capital. From time to time, foreign governments and regulatory bodies consider legislation and regulations that could subject us to new or different requirements and such changes could negatively impact our operations in the relevant jurisdictions. See “Item 1.
Our failure to comply with the covenants in these facilities, or the failure of the lenders to meet their commitments, would restrict our ability to access these facilities when needed, adversely affecting our liquidity, financial condition and results of operations. 24 Table of Contents Changes in the equity markets, interest rates and volatility affect the profitability of variable annuities with guaranteed living benefits that we reinsure, which may have a material adverse effect on our business and profitability.
Our failure to comply with the covenants in these facilities, or the failure of the lenders to meet their commitments, would restrict our ability to access these facilities when needed, adversely affecting our liquidity, financial condition and results of operations. 24 Table of Contents Changes in equity markets, interest rates and volatility affect the profitability of variable annuities with guaranteed living benefits that we reinsure, which may have a material adverse effect on our business and profitability.
Conversely, a decrease in the equity markets along with a decrease in interest rates and an increase in volatility will generally result in an increase in the fair value of the liabilities underlying the benefits, which increases the amount of reserves that we must carry.
Conversely, a decrease in equity markets along with a decrease in interest rates and an increase in volatility will generally result in an increase in the fair value of the liabilities underlying the benefits, which increases the amount of reserves that we must carry.
Additionally, the COVID-19 pandemic and the response thereto caused significant disruption in the international and U.S. economies and financial markets and severely impacted, global economic conditions, which resulted in substantial volatility in the global financial markets, increased unemployment and operational challenges such as the temporary closures of businesses, sheltering-in-place directives and increased remote work protocols.
Additionally, COVID-19 and the response thereto caused significant disruption in the international and U.S. economies and financial markets and severely impacted, global economic conditions, which resulted in substantial volatility in the global financial markets, increased unemployment and operational challenges such as the temporary closures of businesses, sheltering-in-place directives and increased remote work protocols.
The Company’s consolidated financial statements are prepared in conformity with GAAP. If we are required to adopt revised accounting standards in the future, it may adversely affect our reported results of operations and financial condition.
Changes in accounting standards may adversely affect our reported results of operations and financial condition. The Company’s consolidated financial statements are prepared in conformity with GAAP. If we are required to adopt revised accounting standards in the future, it may adversely affect our reported results of operations and financial condition.
In our group life and disability businesses, premiums and claims cost may increase as compensation levels increase. However, during inflationary periods with rising interest rates, the value of fixed income investments falls which could increase realized and unrealized losses, resulting in additional deferred tax assets that may not be realizable.
In our group life and disability businesses, premiums and claims costs may increase as compensation levels increase. However, during inflationary periods with rising interest rates, the value of fixed income investments falls which could increase realized and unrealized losses, resulting in additional deferred tax assets that may not be realizable.
We cannot predict the long-term impacts of climate change for the Company and our clients, but such events may adversely impact our mortality and morbidity rates and also may impact asset prices, financial markets and general economic conditions. We operate in a highly competitive and dynamic industry and competition, tax law changes, and other factors could adversely affect our business.
We cannot predict the long-term impacts of climate change for the Company and our clients, but such events may adversely impact our mortality and morbidity rates and also may impact asset prices, financial markets and general economic conditions. 26 Table of Contents We operate in a highly competitive and dynamic industry and competition, tax law changes, and other factors could adversely affect our business.
Under certain circumstances, we may be contractually prohibited from paying dividends on our common stock due to restrictions associated with certain of our debt securities. Certain provisions in our articles of incorporation and bylaws, in Missouri law and in applicable insurance laws, may delay or prevent a change in control, which could adversely affect the price of our common stock.
Under certain circumstances, we may be contractually prohibited from paying dividends on our common stock due to restrictions associated with certain of our debt securities. 34 Table of Contents Certain provisions in our articles of incorporation and bylaws, in Missouri law and in applicable insurance laws, may delay or prevent a change in control, which could adversely affect the price of our common stock.
In addition, Missouri law also imposes some restrictions on mergers 34 Table of Contents and other business combinations between RGA and holders of 20% or more of our outstanding common stock. These provisions may have unintended anti-takeover effects, including to delay or prevent a change in control of RGA, which could adversely affect the price of our common stock.
In addition, Missouri law also imposes some restrictions on mergers and other business combinations between RGA and holders of 20% or more of our outstanding common stock. These provisions may have unintended anti-takeover effects, including to delay or prevent a change in control of RGA, which could adversely affect the price of our common stock.
We are a multi-national company with operations in numerous countries and, as a result, are exposed to foreign currency risk to the extent that exchange rates of foreign currencies are subject to adverse change over time.
We are a multi-national company with operations in numerous countries and, as a result, are exposed to foreign currency risk to the extent that exchange rates of foreign currencies are subject to adverse changes over time.
In a recession or during prolonged negative market events, such as the 2008-2010 global credit crisis, we could incur significant losses. Even in the absence of a market downturn, we are exposed to substantial risk of loss and ratings downgrades due to market volatility. 27 Table of Contents An increase in inflation could affect our business in several ways.
In a recession or during prolonged negative market events, such as the 2008-2010 global credit crisis, we could incur significant losses. Even in the absence of a market downturn, we are exposed to substantial risk of loss and ratings downgrades due to market volatility. An increase in inflation could affect our business in several ways.
The impact of an increase in global average temperatures could cause changes in weather patterns, resulting in more severe and more frequent natural disasters such as forest fires, hurricanes, tornadoes, floods and storm surges and may, over the 26 Table of Contents longer term, impact disease incidence and severity, food and water supplies and the general health of impacted populations.
The impact of an increase in global average temperatures could cause changes in weather patterns, resulting in more severe and more frequent natural disasters such as forest fires, hurricanes, tornadoes, floods and storm surges and may, over the longer term, impact disease incidence and severity, food and water supplies and the general health of impacted populations.
Any event reducing the value of these securities could have a material adverse effect on our business, financial condition or results of operations. 32 Table of Contents With respect to unrealized losses, we establish deferred tax assets for the tax benefit we may receive in the event that losses are realized.
Any event reducing the value of these securities could have a material adverse effect on our business, financial condition or results of operations. With respect to unrealized losses, we establish deferred tax assets for the tax benefit we may receive in the event that losses are realized.
Upon a disaster such as a natural catastrophe, epidemic, industrial accident, blackout, computer virus, terrorist attack or war, unanticipated problems with our disaster recovery systems could have a material adverse impact on our ability to conduct business and on our financial condition and results of operations, particularly if those problems affect our computer-based data processing, transmission, storage and retrieval systems and destroy valuable data.
Upon a disaster such as a natural catastrophe, pandemic, epidemic, industrial accident, blackout, computer virus, terrorist attack or war, unanticipated problems 29 Table of Contents with our disaster recovery systems could have a material adverse impact on our ability to conduct business and on our financial condition and results of operations, particularly if those problems affect our computer-based data processing, transmission, storage and retrieval systems and destroy valuable data.
Prolonged and elevated inflation could adversely affect the financial markets and the economy generally, and dispelling it may require governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit revenue growth and reduce the number of attractive investment opportunities.
Prolonged and elevated inflation could adversely affect the financial 27 Table of Contents markets and the economy generally and dispelling it may require governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit revenue growth and reduce the number of attractive investment opportunities.
Upon certain downgrade events, some of our reinsurance contracts would either permit our client 23 Table of Contents ceding insurers to terminate such reinsurance contracts or require us to post collateral to secure our obligations under these reinsurance contracts, either of which could negatively impact our ability to conduct business and our results of operations.
Upon certain downgrade events, some of our reinsurance contracts would either permit our client ceding insurers to terminate such reinsurance contracts or require us to post collateral to secure our obligations under these reinsurance contracts, either of which could negatively impact our ability to conduct business and our results of operations.
If we were forced to sell 33 Table of Contents certain of our assets in disruptive or volatile market conditions, there can be no assurance that we will be able to sell them for the prices at which we have recorded them and we may be forced to sell them at significantly lower prices.
If we were forced to sell certain of our assets in disruptive or volatile market conditions, there can be no assurance that we will be able to sell them for the prices at which we have recorded them, and we may be forced to sell them at significantly lower prices.
We make assumptions when pricing our products relating to mortality, morbidity, lapsation, investment returns and expenses, and significant deviations in experience could negatively affect our financial condition and results of operations. Our life reinsurance contracts expose us to mortality, morbidity and lapse risk.
Risks Related to Our Business We make assumptions when pricing our products relating to mortality, morbidity, lapsation, investment returns and expenses, and significant deviations in experience could negatively affect our financial condition and results of operations. Our life reinsurance contracts expose us to mortality, morbidity and lapse risk.
Ratings are subject to revision or withdrawal at any time by the assigning rating organization. A rating is not a recommendation to buy, sell or hold securities, and each rating should be evaluated independently of any other rating.
Ratings are subject to revision or withdrawal at any time by the assigning rating 23 Table of Contents organization. A rating is not a recommendation to buy, sell or hold securities, and each rating should be evaluated independently of any other rating.
Unexpected volatility or illiquidity in the markets in which we directly or indirectly hold positions could adversely affect us. 31 Table of Contents Interest rate fluctuations could negatively affect the income we derive from the difference between the interest rates we earn on our investments and interest we pay under our reinsurance contracts.
Unexpected volatility or illiquidity in the markets in which we directly or indirectly hold positions could adversely affect us. Interest rate fluctuations could negatively affect the income we derive from the difference between the interest rates we earn on our investments and interest we pay under our reinsurance contracts.
“Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 6 “ Fair Value of Assets and Liabilities”, we have categorized these securities into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique.
“Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 13 Fair Value of Assets and Liabilities,” we have categorized these securities into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique.
In addition to the regulatory and foreign currency risks identified above, other related risks include uncertainty arising out of foreign government sovereignty over our international operations, potentially uncertain or adverse tax consequences (including the repatriation of earnings from our non-U.S. subsidiaries) and potential reduction in opportunities resulting from market access restrictions. 25 Table of Contents Some of our international operations are in emerging markets where these risks are heightened, and we anticipate that we will continue to do business in such markets.
In addition to the regulatory and foreign currency risks identified above, other related risks include uncertainty arising out of foreign government sovereignty over our international operations, potentially uncertain or adverse tax consequences and potential reduction in opportunities resulting from market access restrictions. 25 Table of Contents Some of our international operations are in emerging markets where these risks are heightened, and we anticipate that we will continue to do business in such markets.
Additionally, our failure to adjust our strategies in response to changing economic conditions could impact our competitive position and have a material adverse effect on our business, financial condition and results of operations. If the U.S.
Additionally, our failure to adjust our strategies in response to changing economic conditions could impact our competitive position and have a material adverse effect on our business, financial condition and results of operations. Changes in U.S. tax law could have a material adverse effect on the Company’s business. If the U.S.
Depending on the length of the pandemic, future increases in COVID-19 cases or the severity of prevalent virus strains, the availability, effectiveness and use of treatments and vaccines, and the extent and success of actions by governments and central banks, the adverse mortality rates and impact on the global economy may deepen, and our results of operations and financial condition in future quarters will continue to be adversely affected.
Future increases in COVID-19 cases or the severity of prevalent virus strains, the availability, effectiveness and use of treatments and vaccines, and the extent and success of actions by governments and central banks, the adverse mortality rates and impact on the global economy may deepen, and our results of operations and financial condition in future quarters may be adversely affected.
A pandemic or other disaster could have a major impact on the global economy or the economies of particular countries or regions, including travel, trade, tourism, the health system, food supply, consumption, and overall economic output.
An epidemic or pandemic could have a major impact on the global economy or the economies of particular countries or regions, including travel, trade, tourism, the health system, food supply, consumption, and overall economic output.
“Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 12 Commitments, Contingencies and Guarantees .” Risks Related to Our Investments Adverse capital and credit market conditions and access to credit facilities may significantly affect our ability to meet liquidity needs, access to capital and cost of capital.
“Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 17 Commitments, Contingencies and Guarantees .” 30 Table of Contents Risks Related to Our Investments Adverse capital and credit market conditions and access to credit facilities may significantly affect our ability to meet liquidity needs, access to capital and cost of capital.
In addition, a pandemic or other disaster that affected our employees or the employees of companies with which we do business could disrupt our business operations. The effectiveness of external parties, including governmental and non-governmental organizations, in combating the spread and severity of such an event could have a material impact on the losses we experience.
In addition, an epidemic or pandemic that affected our employees or 22 Table of Contents the employees of companies with which we do business could disrupt our business operations. The effectiveness of external parties, including governmental and non-governmental organizations, in combating the spread and severity of such an event could have a material impact on the losses we experience.
Our international operations expose us to mortality and morbidity experience, and supply and demand for our products that are specific to these markets as well as altered exposure to epidemic and pandemic risks that may be difficult to anticipate.
Our international operations expose us to mortality and morbidity experience, and supply and demand for our products that are specific to these markets as well as altered exposure to biometric, credit and other risks that may be difficult to anticipate.
As a result of uncertainty regarding U.S. national debt, the market value of some of our investments may decrease, and our capital adequacy could be adversely affected.
Because of uncertainty regarding U.S. national debt, the market value of some of our investments may decrease, and our capital adequacy could be adversely affected.
As with all financial services companies, our ability to conduct business depends on consumer confidence in the industry and our financial strength. Actions of competitors, and financial difficulties of other companies in the industry, and related adverse publicity, could undermine consumer confidence and harm our reputation and business.
As with all financial services companies, our ability to conduct business depends on consumer confidence in the industry and our financial strength. Actions of competitors, and financial difficulties of other companies in the industry, and related adverse publicity, could undermine consumer confidence and harm our reputation and business. Catastrophic events could adversely affect our business, financial condition and operations.
Administrative and technical controls, security measures and other preventative actions we take to reduce the risk of such incidents and protect our information technology may not be sufficient to prevent physical and electronic break-ins, and similar disruptions from unauthorized tampering with our computer systems.
Administrative and technical controls, security measures and other preventative actions we take to reduce the risk of such incidents and protect our information technology may not be sufficient to prevent physical and electronic break-ins, and similar disruptions from unauthorized tampering with our computer systems. Despite our continued efforts, cybersecurity threats are becoming more frequent and sophisticated.
Treasury Department and the IRS continue to issue guidance under the U.S. Tax Cuts and Jobs Act of 2017 (“U.S. Tax Reform”) as well as the Inflation Reduction Act passed in August of 2022, that may result in interpretations different from ours. Foreign governments may enact tax laws in response to U.S.
Treasury Department and the IRS continue to issue guidance under the U.S. Tax Cuts and Jobs Act as well as the Inflation Reduction Act passed in August 2022, that may result in interpretations different from ours.
These events could cause a material adverse effect on our results of operations in any period and, depending on their severity, could also materially and adversely affect our financial condition.
These events could cause a material adverse effect on our results of operations in any period and, depending on their severity, could also materially and adversely affect our financial condition. COVID-19 increased mortality rates in certain jurisdictions and populations.
Changes in economic conditions may lead to changes in market interest rates or changes in our investment strategies, either of which could cause our actual investment returns and expenses to differ from our pricing and reserve assumptions. Our reinsurance subsidiaries are highly regulated, and changes in these regulations could negatively affect our business.
Changes in economic conditions may lead to changes in market interest rates or changes in our investment strategies, either of which could cause our actual investment returns and expenses to differ from our pricing and reserve assumptions.
While any investment carries some risk, the risks associated with lower-rated securities are greater than the risks associated with investment grade securities. The risk of loss of principal or interest through default is greater because lower-rated securities are usually unsecured and are often subordinated to an issuer’s other obligations.
The risk of loss of principal or interest through default is greater because lower-rated securities are usually unsecured and are often subordinated to an issuer’s other obligations.
Unanticipated withdrawal or surrender activity could, under some circumstances, require our reinsurance subsidiaries to dispose of assets on unfavorable terms, which could have an adverse effect on us. Reinsurance agreements may provide for recapture rights on the part of our insurance company customers.
Unanticipated withdrawal or surrender activity could, under some circumstances, require our reinsurance subsidiaries to dispose of assets on unfavorable terms, which could have an adverse effect on us.
The scenarios and related analyses are subject to various assumptions, professional judgment, uncertainties and the inherent limitations of any statistical analysis, including the use and quality of historical internal and industry data. Consequently, actual losses may differ materially from what the scenarios may illustrate.
The scenarios and related analyses are subject to various assumptions, professional judgment, uncertainties and the inherent limitations of any statistical analysis, including the use and quality of historical internal and industry data. Consequently, actual losses may differ materially from what the scenarios may illustrate. This potential difference could be even greater for events with limited or unmodelled annual frequency.
Our revenues may decline in such circumstances and our profit margins may erode. In addition, upon prolonged market events, such as the global credit crisis, we could incur significant investment-related losses. Even in the absence of a market downturn, we are exposed to substantial risk of loss due to market volatility.
Our revenues may decline in such circumstances and our profit margins may erode. In addition, upon prolonged market events, such as the global credit crisis, we could incur significant investment-related losses.
Recapture rights permit these customers to reassume all or a portion of the risk formerly ceded to us after an agreed-upon time, usually ten years, subject to various conditions.
Reinsurance agreements may provide for recapture rights on the part of our insurance company customers. 32 Table of Contents Recapture rights permit these customers to reassume all or a portion of the risk formerly ceded to us after an agreed-upon time, usually ten years, subject to various conditions.
We also rely on original underwriting decisions made by our clients and cannot assure you that our clients’ processes will adequately control business quality or establish appropriate pricing.
We may experience volatility in our earnings as a result of erroneous or untimely reporting from our clients. We also rely on original underwriting decisions made by our clients and cannot assure you that our clients’ processes will adequately control business quality or establish appropriate pricing.
We cannot assure you that we will be able to manage the risks associated with our international operations effectively or that these risks will not have an adverse effect on our business, financial condition or results of operations. We depend on the performance of others, and their failure to perform in a satisfactory manner would negatively affect us.
We cannot assure you that we will be able to manage the risks associated with our international operations effectively or that these risks will not have an adverse effect on our business, financial condition or results of operations.
Our service providers may be subject to cybersecurity attacks and may not sufficiently protect their information technology and related data, which may impact their ability to provide us services and protect our data, which may subject us to losses and harm our reputation. Poor performance on the part of these outside vendors could negatively affect our operations and financial performance.
Our service providers may be subject to cybersecurity attacks and may not sufficiently protect their information technology and related data, which may impact their ability to provide us services and protect our data, which may subject us to losses and harm our reputation.
Additionally, the long-term health consequences for individuals who have recovered from COVID-19 and the related impact, if any, on mortality and morbidity are all unknown.
Additionally, the long-term health consequences for individuals who have recovered from COVID-19 and the related impact, if any, on mortality and morbidity are all unknown. Our reinsurance subsidiaries are highly regulated, and changes in these regulations could negatively affect our business.
The ability of our subsidiaries to write reinsurance is influenced by their ratings.
The ability of our subsidiaries to write reinsurance is partially dependent on their financial condition and is also influenced by their ratings.
For a discussion of the impact of new long-duration insurance guidance and other new accounting pronouncements issued but not yet implemented, see “New Accounting Pronouncements” in Note 2 – “Significant Accounting Principles and Pronouncements” in the Notes to the Consolidated Financial Statements. 28 Table of Contents Acquisitions and significant transactions involve varying degrees of risk that could affect our profitability.
For a discussion of the impact of new accounting pronouncements issued but not yet implemented, see Item 8. “Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 21 New Accounting Standards Not Yet Adopted .” 28 Table of Contents Acquisitions and significant transactions involve varying degrees of risk that could affect our profitability.
Epidemics, pandemics, such as COVID-19, as well as natural disasters, climate change and terrorist attacks, and other catastrophes and events can adversely affect our business, financial condition and results of operations because they exacerbate mortality and morbidity risk. The likelihood, timing, and severity of these events cannot be predicted.
Our business, results of operations and financial condition have been, and may continue to be, adversely affected by epidemics and pandemics, such as COVID-19, and responses thereto. Epidemics and pandemics can adversely affect our business, financial condition and results of operations because they exacerbate mortality and morbidity risk. The likelihood, timing, and severity of these events cannot be predicted.
If our calculations with respect to these reinsurance liabilities are incorrect, or if we improperly structure our investments to match such liabilities, we could be forced to liquidate investments prior to maturity at a significant loss. Our investment guidelines limit non-investment grade fixed maturity securities in our investment portfolio.
We structure our investments to match our anticipated liabilities under reinsurance treaties to the extent we believe necessary. If our calculations with respect to these reinsurance liabilities are incorrect, or if we improperly structure our investments to match such liabilities, we could be forced to liquidate investments prior to maturity at a significant loss.
Our internal sources of liquidity may prove to be insufficient, and in such case, we may not be able to successfully obtain additional financing on favorable terms, or at all. 30 Table of Contents Disruptions, uncertainty or volatility in the capital and credit markets may limit our ability to replace maturing liabilities in a timely manner, satisfy statutory capital requirements, generate fee income and market-related revenue to meet liquidity needs and access the capital necessary to grow our business.
Disruptions, uncertainty or volatility in the capital and credit markets may limit our ability to replace maturing liabilities in a timely manner, satisfy statutory capital requirements, generate fee income and market-related revenue to meet liquidity needs and access the capital necessary to grow our business.
Our valuation of fixed maturity and equity securities and derivatives include methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may have a material adverse effect on our financial condition or results of operations.
Moreover, our ability to sell assets relating to such particular groups of related assets may be limited if other market participants are seeking to sell at the same time. 33 Table of Contents Our valuation of fixed maturity and equity securities and derivatives include methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may have a material adverse effect on our financial condition or results of operations.
Political and economic uncertainties and weakness and disruption of the financial markets around the world, such as geopolitical upheaval (including trade disputes) and deteriorating economic and political relationships between countries, the solvency of certain European Union member states and of financial institutions that have significant direct or indirect exposure to debt issued by such countries, have led and may continue to lead to concerns over capital markets access.
Political and economic uncertainties and weakness and disruption of the financial markets around the world, such as geopolitical upheaval and deteriorating economic and political relationships between countries have led and may continue to lead to concerns over capital markets access.
We are also subject to the risk that our clients will be unable to fulfill their obligations to us under our reinsurance agreements with them. We rely upon our insurance company clients to provide timely, accurate information. We may experience volatility in our earnings as a result of erroneous or untimely reporting from our clients.
We cannot assure you that these insurance enterprises or retrocessionaires will be able to fulfill their obligations to us. We are also subject to the risk that our clients will be unable to fulfill their obligations to us under our reinsurance agreements with them. We rely upon our insurance company clients to provide timely, accurate information.
In the normal course of business, we seek to limit our exposure to losses from our reinsurance contracts by ceding a portion of the reinsurance to other insurance enterprises or retrocessionaires. We cannot assure you that these insurance enterprises or retrocessionaires will be able to fulfill their obligations to us.
We rely significantly on third parties for various services, and we may be held responsible for obligations that arise from the acts or omissions of third parties. In the normal course of business, we seek to limit our exposure to losses from our reinsurance contracts by ceding a portion of the reinsurance to other insurance enterprises or retrocessionaires.
In addition, it is unclear what effect, if any, a ratings change would have on the price of our securities in the secondary market.
We cannot assure you that actions taken by ratings agencies would not result in a material adverse effect on our business, financial condition or results of operations. In addition, it is unclear what effect, if any, a ratings change would have on the price of our securities in the secondary market.
The NAIC has adopted an Insurance Data Security Model Law which is intended to establish the standards for data security and standards for the investigation and notification of data breaches applicable to insurance licensees in states adopting such law. Some of our employees have access to personal information of policy holders.
For example, the NAIC adopted the Insurance Data Security Model Law to establish standards for data security, the investigation and notification of data breaches and has also adopted principles to guide the use of artificial intelligence intended to apply to insurance licensees in states adopting such law.
Managing key employee attraction, retention and succession is critical to our success. Our success depends in large part upon our ability to identify, hire, retain and motivate highly skilled employees. We would be adversely affected if we fail to adequately plan for the succession of our senior management and other key employees.
We would be adversely affected if we fail to hire new talent, retain existing employees or adequately plan for the succession of our senior management and other key employees.
Risks Related to Ownership of Our Common Stock We may not pay dividends on our common stock. Our shareholders may not receive dividends.
Each of such asset classes is regularly evaluated for impairment under the accounting guidance appropriate to the respective asset class. Risks Related to Ownership of Our Common Stock We may not pay dividends on our common stock. Our shareholders may not receive dividends.
Similarly, our access to funds may be impaired if regulatory authorities or rating agencies take negative actions against us.
Similarly, our access to funds may be impaired if regulatory authorities or rating agencies take negative actions against us. Our internal sources of liquidity may prove to be insufficient, and in such case, we may not be able to successfully obtain additional financing on favorable terms, or at all.
Any such actions could have a material adverse impact on our earnings and financial condition or materially dilute our shareholders’ equity ownership interests. Any downgrade in the ratings of our reinsurance subsidiaries could adversely affect their ability to sell products, retain existing business, and compete for attractive acquisition opportunities.
Additionally, rating agencies may make changes in their capital models and rating methodologies, which could increase the amount of capital required to support our ratings. Any downgrade in the ratings of our reinsurance subsidiaries could adversely affect their ability to sell products, retain existing business, and compete for attractive acquisition opportunities.
These interruptions also may interfere with our clients’ ability to provide data and other information to us, and our employees’ ability to perform their job responsibilities. Failure to protect the confidentiality of information could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations.
In addition, if a significant number of our managers were unavailable upon a disaster, our ability to effectively conduct business could be severely compromised. These interruptions also may interfere with our clients’ ability to provide data and other information to us, and our employees’ ability to perform their job responsibilities.
While we maintain liability insurance for cybersecurity and network interruption losses, our insurance may not be sufficient to protect us against all losses. In addition, if a significant number of our 29 Table of Contents managers were unavailable upon a disaster, our ability to effectively conduct business could be severely compromised.
While we maintain liability insurance for cybersecurity and network interruption losses, our insurance may not be sufficient to protect us against all losses. We have engaged software vendors to support our disaster recovery systems.
This potential difference could be even greater for events with limited or unmodelled annual frequency, such as the COVID-19 pandemic and the response thereto. We regularly review our reserves and associated assumptions as part of our ongoing assessment of our business performance and risks.
We regularly review our reserves and associated assumptions as part of our ongoing assessment of our business performance and risks.
Many jurisdictions in which we operate have enacted laws to safeguard the privacy and security of personal information. Additionally, various government agencies have established rules protecting the privacy and security of such information. These laws and rules vary greatly by jurisdiction.
We store and process large amounts of consumer and client information and policy holder personal data in order to operate and better manage our business. Many jurisdictions in which we operate have enacted laws to safeguard the privacy and security of personal data.
Tax Reform that could result in further changes to global taxation and materially affect our financial position and results of operations. In addition, a number of countries are actively pursuing changes to their tax laws applicable to multinational corporations. Changes in accounting standards may adversely affect our reported results of operations and financial condition.
Furthermore, numerous foreign governments enacted a global minimum tax in December 2023, while others are expected to enact a global minimum tax within a year. Guidance is expected to continue that could result in further changes to global taxation and materially affect our financial position and results of operations.
If our investment strategy is unsuccessful, we could suffer losses. The success of our investment strategy is crucial to the success of our business. We structure our investments to match our anticipated liabilities under reinsurance treaties to the extent we believe necessary.
Even in the absence of a market downturn, we are exposed to substantial risk of loss due to market volatility. 31 Table of Contents If our investment strategy is unsuccessful, we could suffer losses. The success of our investment strategy is crucial to the success of our business.
Removed
Risks Related to Our Business Our business, results of operations and financial condition have been, and will likely continue to be, adversely affected by the COVID-19 pandemic, future epidemics and pandemics and the response thereto. The COVID-19 pandemic increased mortality rates in certain jurisdictions and populations.
Added
We utilize assumptions, estimates and models to evaluate our business, results of operations and financial condition, and develop scenarios to evaluate our potential exposure to mortality claims, potential investment portfolio losses and other risks associated with our assets and liabilities.
Removed
Governments and central banks around the world reacted to the economic crisis caused by the pandemic by implementing stimulus and liquidity programs and cutting interest rates. These reactions increased government liabilities and balance sheets, which has been partially responsible for inflation in the United States and other jurisdictions. As a result, the U.S.
Added
In turn, vendors of our service providers have and may in the future be subject to such attacks. Poor performance on the part of our service providers or any related outside vendors could negatively affect our operations and financial performance.
Removed
Federal Reserve and other central banks have raised interest rates and may elect to further raise interest rates in the future.
Added
Our operations are exposed to the risk of catastrophic events including natural disasters, war or other military action, and terrorism or other acts of violence. Claims resulting from such events could impact our ability to write new business, cause substantial volatility in our financial results or otherwise impact our business, financial condition and operations.
Removed
The ultimate number of claims and financial impact resulting from the COVID-19 pandemic, the response thereto or any future epidemic or pandemic is inherently uncertain.
Added
Additionally, our business operations may be adversely affected by such events to the extent they disrupt the physical infrastructure, systems that support our businesses and customers, or our employees.
Removed
Actual claims and financial impact from these events could vary materially from current estimates due to several factors, including the inherent uncertainties in making such determinations and the evolving nature of an epidemic or pandemic and the availability, effectiveness and use of treatments and vaccines.
Added
Failure to stay ahead of such advances has led to and could lead to the misappropriation, intentional or unintentional unauthorized disclosure or misuse of personal data that we or our vendors store and process.
Removed
Moreover, the effects of COVID-19, the response thereto and a future epidemic or pandemic will heighten the other risks described below and in any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K.
Added
If an unknown fourth party of ours, upon whom we and/or a significant third party of ours relies, experiences a disaster or prolonged unavailability, our ability to deploy our disaster recovery systems and effectively conduct business could be severely compromised.
Removed
Additionally, rating agencies may make changes in their capital models and rating methodologies, which could increase the amount of capital required to support our ratings. In December 2021 S&P announced proposed changes to its rating methodologies. The proposed changes have not been finalized. Thus, the impact, if any, that these changes may have on our ratings is unknown.
Added
Restrictions on the use of personal data and “big data” techniques could adversely affect our reputation and have a material adverse effect on our business, financial condition and results of operations. Our business is highly dependent upon the processing of large quantities of personal data.
Removed
Also, if there is a downgrade in the rating of RGA, or any of our rated subsidiaries, some of our reinsurance contracts would either permit our client ceding insurers to terminate such reinsurance contracts or require us to post additional collateral to secure our obligations under such reinsurance contracts.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES The Company’s corporate headquarters is located at an owned site in Chesterfield, Missouri. In addition, the Company leases office space in 49 locations throughout the world. Most of the Company’s leases have terms of three to five years; while some leases have longer terms, none exceed 15 years.
Biggest changeItem 2. PROPERTIES The Company’s corporate headquarters is located at an owned site in Chesterfield, Missouri. In addition, the Company leases office space in 47 locations throughout the world. Most of the Company’s leases have terms of three to five years; while some leases have longer terms, none exceed 15 years.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table summarizes RGA’s repurchase activity of its common stock during the quarter ended December 31, 2022: Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Program October 1, 2022 – October 31, 2022 5,617 $ 140.43 — $ 375,000,364 November 1, 2022 – November 30, 2022 189,660 $ 135.35 184,904 $ 350,001,793 December 1, 2022 – December 31, 2022 8,295 $ 142.20 — $ 350,001,793 (1) RGA repurchased 0, 184,904, and 0 shares of common stock under its share repurchase program in October, November and December 2022, respectively.
Biggest changeIssuer Purchases of Equity Securities The following table summarizes RGA’s repurchase activity of its common stock during the quarter ended December 31, 2023: Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Program October 1, 2023 – October 31, 2023 33,369 $ 148.89 — $ 200,003,862 November 1, 2023 – November 30, 2023 17,576 $ 151.43 — $ 200,003,862 December 1, 2023 – December 31, 2023 303,740 $ 165.01 303,018 $ 150,004,109 (1) RGA repurchased 303,018 shares of common stock under its share repurchase program in December 2023.
See Item 1 under the caption Regulation – “Restrictions on Dividends and Distributions.” See Item 8, Note 17 – “Equity” in the Notes to Consolidated Financial Statements for information regarding board-approved stock repurchase plans. See Item 12 for information about the Company’s compensation plans.
See Item 1 under the caption Regulation – “Restrictions on Dividends and Distributions.” See Item 8, Note 20 – “Equity” in the Notes to Consolidated Financial Statements for information regarding board approved stock repurchase plans. See Item 12 for information about the Company’s compensation plans.
The pace of repurchase activity depends on various factors such as the level of available cash, an evaluation of the costs and benefits associated with alternative uses of excess capital, such as acquisitions and in force reinsurance transactions, and RGA’s stock price. 36 Table of Contents Comparison of 5-Year Cumulative Total Return The graph below shows the performance of the Company’s common stock for the period beginning December 31, 2017, and ending December 31, 2022, assuming $100 was invested on December 31, 2017.
The pace of repurchase activity depends on various factors such as the level of available cash, an evaluation of the costs and benefits associated with alternative uses of excess capital, such as acquisitions and in force reinsurance transactions, and RGA’s stock price. 38 Table of Contents Comparison of 5-Year Cumulative Total Return The graph below shows the performance of the Company’s common stock for the period beginning December 31, 2018, and ending December 31, 2023, assuming $100 was invested on December 31, 2018.
On February 25, 2022, RGA’s board of directors authorized a share repurchase program for up to $400 million of RGA’s outstanding common stock. The authorization was effective immediately and does not have an expiration date. In connection with this authorization, the board of directors terminated the stock repurchase authority granted in 2019.
On January 23, 2024, RGA’s board of directors authorized a share repurchase program for up to $500 million of RGA’s outstanding common stock. The authorization was effective immediately and does not have an expiration date. In connection with this authorization, the board of directors terminated the stock repurchase authority granted in 2022.
Reinsurance Group of America, Incorporated common stock is traded on the New York Stock Exchange (NYSE) under the symbol “RGA”. On January 31, 2023, there were 21,353 stockholders of record of RGA’s common stock and 67 million shares outstanding.
Reinsurance Group of America, Incorporated common stock is traded on the New York Stock Exchange (NYSE) under the symbol “RGA”. On January 31, 2024, there were 15,629 stockholders of record of RGA’s common stock and 66 million shares outstanding.
The Company net settled – issuing 14,738, 16,650 and 21,514 shares from treasury and repurchased from recipients 5,617, 4,756 and 8,295 shares in October, November and December 2022, respectively, in settlement of income tax withholding requirements incurred by the recipients of equity incentive awards.
The Company net settled – issuing 66,921, 34,527 and 1,737 shares from treasury and repurchased from recipients 33,369, 17,576 and 722 shares in October, November and December 2023, respectively, in settlement of income tax withholding requirements incurred by the recipients of equity incentive awards.
Base Period Cumulative Total Return 12/17 12/18 12/19 12/20 12/21 12/22 Reinsurance Group of America, Incorporated $ 100.00 $ 91.28 $ 107.98 $ 78.76 $ 76.21 $ 101.38 S&P 500 100.00 95.62 125.72 148.85 191.58 156.88 S&P Life & Health Insurance 100.00 79.23 97.60 88.35 120.76 133.25
Base Period Cumulative Total Return 12/18 12/19 12/20 12/21 12/22 12/23 Reinsurance Group of America, Incorporated $ 100.00 $ 118.29 $ 86.28 $ 83.49 $ 111.06 $ 129.25 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 S&P Life & Health Insurance 100.00 123.18 111.51 152.41 168.18 176.00
Removed
On January 24, 2019, RGA’s board of directors authorized a share repurchase program for up to $400 million of RGA’s outstanding common stock. During the year ended December 31, 2022, the Company repurchased 219,116 shares of common stock under this program for $25 million.
Removed
During the year ended December 31, 2022, RGA repurchased 380,138 shares of common stock under this program for $50 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe Company manages its exposure to interest rates principally by managing the relative matching of the cash flows of its liabilities and assets. 78 Table of Contents The following table presents the account values, the weighted average interest-crediting rates and minimum guaranteed rate ranges for the contracts containing guaranteed rates by major class of interest-sensitive product as of December 31, 2022 and 2021 (dollars in millions): Account Value Current Weighted-Average Interest Crediting Rate Minimum Guaranteed Rate Ranges Interest Sensitive Contract Liability 2022 2021 2022 2021 2022 2021 Traditional individual fixed annuities $ 16,503 $ 15,094 3.22% 3.22% 0.01 – 5.50% 0.01 – 5.50% Equity-indexed annuities 2,725 3,117 (1.23) 2.10 1.00 – 3.00 0.10 – 3.00 Individual variable annuity contracts 113 116 3.01 2.98 1.00 – 3.00 1.50 – 3.00 Guaranteed investment contracts 1,296 1,406 1.92 0.76 0.47 – 5.14 0.31 – 3.32 Universal life – type policies 4,268 4,303 3.77 3.76 2.00 – 6.00 2.00 – 6.00 Funding agreement backed notes 906 500 1.03 2.00 2.00 – 2.70 2.00 – 2.00 The following table presents the account values by each minimum guaranteed rate, rounded to the nearest percentage, by class of interest-sensitive product as of December 31, 2022 and 2021 (dollars in millions): Account Value as of December 31, 2022 Interest Sensitive Contract Liability 1% 2% 3% 4% 5% 6% Total Traditional individual fixed annuities $ 1,537 $ 1,204 $ 5,175 $ 6,036 $ 2,531 $ 19 $ 16,502 Equity-indexed annuities 892 1,354 479 — — — 2,725 Individual variable annuity contracts — 2 111 — — — 113 Guaranteed investment contracts 50 119 77 105 945 — 1,296 Universal life – type policies — 727 318 3,165 48 10 4,268 Funding agreement backed notes — 501 405 — — — 906 Account Value as of December 31, 2021 Interest Sensitive Contract Liability 1% 2% 3% 4% 5% 6% Total Traditional individual fixed annuities $ 2,109 $ 1,057 $ 4,384 $ 5,106 $ 2,419 $ 19 $ 15,094 Equity-indexed annuities 943 1,614 560 — — — 3,117 Individual variable annuity contracts — 1 115 — — — 116 Guaranteed investment contracts 1,202 138 66 — — — 1,406 Universal life – type policies — 736 318 3,185 53 11 4,303 Funding agreement backed notes — 500 — — — — 500 The spread profits on the Company’s fixed annuity and interest-sensitive whole life, universal life (“UL”) and fixed portion of variable universal life insurance policies are at risk if interest rates decline and remain relatively low for a period of time.
Biggest changeThe Company manages its exposure to interest rates principally by managing the relative matching of the cash flows of its liabilities and assets. 83 Table of Contents The following table presents the account values, the weighted average interest-crediting rates and minimum guaranteed rate ranges for the contracts containing guaranteed rates by major class of interest-sensitive product as of December 31, 2023 and 2022 (dollars in millions): Account Value Current Weighted-Average Interest Crediting Rate Minimum Guaranteed Rate Ranges Policyholder Account Balances 2023 2022 2023 2022 2023 2022 Fixed annuities (deferred) $ 16,478 $ 16,940 3.44% 3.34% 0.01 - 5.50% 0.01 - 5.50% Equity-indexed annuities 2,354 2,817 1.94 1.94 1.00 – 3.00 1.00 – 3.00 Bank-owned life insurance (BOLI) and universal life-type products 4,608 4,183 3.98 3.79 2.00 – 4.50 2.00 – 4.00 The following table presents the account values by each range of minimum guaranteed rate and the related range of difference, in basis points, between being credited to policyholders and the respective guaranteed minimums by class of interest-sensitive product as of December 31, 2023 and 2022 (dollars in millions): Account Value as of December 31, 2023 Policyholder Account Balances Range of Guaranteed Minimum Crediting Rate At Guaranteed Minimum 1 Basis Point – 50 Basis Points Above 51 Basis Point – 100 Basis Points Above 101 Basis Point – 150 Basis Points Above Greater than 150 Basis Points Total Fixed annuities (deferred) Less than 1.00% $ 275 $ — $ — $ — $ — $ 275 1.00 – 1.99% 1,464 10 14 60 29 1,577 2.00 – 2.99% 938 8 23 — — 969 3.00 – 3.99% 5,200 10 7 1 — 5,218 4.00% and Greater 8,393 46 — — — 8,439 Total $ 16,270 $ 74 $ 44 $ 61 $ 29 $ 16,478 Equity-indexed annuities Less than 1.00% $ — $ — $ — $ — $ — $ — 1.00 – 1.99% 833 — — — — 833 2.00 – 2.99% 1,336 — — — — 1,336 3.00 – 3.99% 185 — — — — 185 4.00% and Greater — — — — — — Total $ 2,354 $ — $ — $ — $ — $ 2,354 Bank-owned life insurance (BOLI) and universal type products Less than 1.00% $ — $ — $ — $ — $ — $ — 1.00 – 1.99% — — — — — — 2.00 – 2.99% 1 7 16 663 83 770 3.00 – 3.99% 136 241 83 — — 460 4.00% and Greater 2,275 110 993 — — 3,378 Total $ 2,412 $ 358 $ 1,092 $ 663 $ 83 $ 4,608 84 Table of Contents Account Value as of December 31, 2022 Policyholder Account Balances Range of Guaranteed Minimum Crediting Rate At Guaranteed Minimum 1 Basis Point – 50 Basis Points Above 51 Basis Point – 100 Basis Points Above 101 Basis Point – 150 Basis Points Above Greater than 150 Basis Points Total Fixed annuities (deferred) Less than 1.00% $ 292 $ — $ — $ — $ — $ 292 1.00 – 1.99% 1,707 13 43 56 41 1,860 2.00 – 2.99% 1,032 1 23 1 — 1,057 3.00 – 3.99% 5,776 12 7 — 1 5,796 4.00% and Greater 7,886 49 — — — 7,935 Total $ 16,693 $ 75 $ 73 $ 57 $ 42 $ 16,940 Equity-indexed annuities Less than 1.00% $ — $ — $ — $ — $ — $ — 1.00 – 1.99% 925 — — — — 925 2.00 – 2.99% 1,671 — — — — 1,671 3.00 – 3.99% 221 — — — — 221 4.00% and Greater — — — — — — Total $ 2,817 $ — $ — $ — $ — $ 2,817 Bank-owned life insurance (BOLI) and universal life-type products Less than 1.00% $ — $ — $ — $ — $ — $ — 1.00 – 1.99% — — — — — — 2.00 – 2.99% 1 6 76 643 — 726 3.00 – 3.99% 90 228 57 — — 375 4.00% and Greater 2,053 1,029 — — — 3,082 Total $ 2,144 $ 1,263 $ 133 $ 643 $ — $ 4,183 The spread profits on the Company’s fixed annuity and interest-sensitive whole life, universal life (“UL”) and fixed portion of variable universal life insurance policies are at risk if interest rates decline and remain relatively low for a period of time.
The average yield will vary from year to year depending on several variables, including the prevailing risk-fee interest rate and credit spread environment, prepayment fees and make-whole premiums, changes in the mix of the underlying investments and cash and cash equivalents balances.
The average yield will vary from year to year depending on several variables, including the prevailing risk-fee interest rate and credit spread environment, prepayment fees and make-whole premiums, changes in the mix of the underlying investments and cash and cash equivalents balances.
Based on management’s judgment, an allowance for credit losses in the amount that fair value is less than the amortized cost is recorded for securities determined to have expected credit losses. Mortgage Loans The Company’s mortgage loan portfolio consists of U.S., Canada and UK based investments primarily in commercial offices, light industrial properties and retail locations.
Based on management’s judgment, an allowance for credit losses in the amount that fair value is less than the amortized cost is recorded for securities determined to have expected credit losses. Mortgage Loans The Company’s mortgage loan portfolio consists of U.S., Canada and UK based investments primarily in retail locations, light industrial properties, and commercial offices.
Real Estate Risk. Real estate risk is the risk that changes in the level and volatility of real estate market valuations may impact the profitability, value or solvency position of the Company. The Company has investments in direct real estate equity and debt instruments collateralized by real estate (“real estate loans”).
Real estate risk is the risk that changes in the level and volatility of real estate market valuations may impact the profitability, value or solvency position of the Company. The Company has investments in direct real estate equity and debt instruments collateralized by real estate (“real estate loans”).
The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination.
The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination.
Factors that could also cause results or events to differ, possibly materially, from those expressed or implied by forward-looking statements, include, among others: (1) adverse changes in mortality (whether related to COVID-19 or otherwise), morbidity, lapsation or claims experience, (2) inadequate risk analysis and underwriting, (3) adverse capital and credit market conditions and their impact on the Company’s liquidity, access to capital and cost of capital, (4) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (5) the availability and cost of collateral necessary for regulatory reserves and capital, (6) requirements to post collateral or make payments due to declines in the market value of assets subject to the Company’s collateral arrangements, (7) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (8) the effect of the Company parent’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, (9) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, (10) the impairment of other financial institutions and its effect on the Company’s business, (11) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (12) market or economic conditions that adversely affect the value of the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities that in turn could affect regulatory capital, (13) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (14) risks inherent in the Company’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (15) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (16) the stability of and actions by governments and economies in the markets in which the Company operates, including ongoing uncertainties regarding the amount of U.S. sovereign debt and the credit ratings thereof, (17) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes some reinsurance, third-party investment managers and others, (18) financial performance of the Company’s clients, (19) the threat of natural disasters, catastrophes, terrorist attacks, pandemics, epidemics or other major public health issues anywhere in the world where the Company or its clients do business, (20) competitive factors and competitors’ responses to the Company’s initiatives, (21) development and introduction of new products and distribution opportunities, (22) execution of the Company’s entry into new markets, (23) integration of acquired blocks of business and entities, (24) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data and intellectual property stored on such systems, (25) adverse developments with respect to litigation, arbitration or regulatory investigations or actions (26) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (27) changes in laws, regulations, and accounting standards applicable to the Company or its business, including Long Duration Targeted Improvement accounting changes and (28) other risks and uncertainties described in this document and in the Company’s other filings with the Securities and Exchange Commission (“SEC”).
Factors that could also cause results or events to differ, possibly materially, from those expressed or implied by forward-looking statements, include, among others: (1) adverse changes in mortality (whether related to COVID-19 or otherwise), morbidity, lapsation or claims experience, (2) inadequate risk analysis and underwriting, (3) adverse capital and credit market conditions and their impact on the Company’s liquidity, access to capital and cost of capital, (4) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (5) the availability and cost of collateral necessary for regulatory reserves and capital, (6) requirements to post collateral or make payments due to declines in the market value of assets subject to the Company’s collateral arrangements, (7) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (8) the effect of the Company parent’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, (9) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, (10) the impairment of other financial institutions and its effect on the Company’s business, (11) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (12) market or economic conditions that adversely affect the value of the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities that in turn could affect regulatory capital, (13) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (14) risks inherent in the Company’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (15) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (16) the stability of and actions by governments and economies in the markets in which the Company operates, 40 Table of Contents including ongoing uncertainties regarding the amount of U.S. sovereign debt and the credit ratings thereof, (17) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes some reinsurance, third-party investment managers and others, (18) financial performance of the Company’s clients, (19) the threat of natural disasters, catastrophes, terrorist attacks, pandemics, epidemics or other major public health issues anywhere in the world where the Company or its clients do business, (20) competitive factors and competitors’ responses to the Company’s initiatives, (21) development and introduction of new products and distribution opportunities, (22) execution of the Company’s entry into new markets, (23) integration of acquired blocks of business and entities, (24) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data and intellectual property stored on such systems, (25) adverse developments with respect to litigation, arbitration or regulatory investigations or actions (26) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (27) changes in laws, regulations, and accounting standards applicable to the Company or its business, including Long Duration Targeted Improvement accounting changes and (28) other risks and uncertainties described in this document and in the Company’s other filings with the Securities and Exchange Commission (“SEC”).
As such, certain management and monitoring processes are designed to minimize the effect of sudden and/or sustained changes in interest rates on fair value, cash flows, and net investment income. During 2022, the Company experienced a higher level of policyholder surrenders within the contracts with lower guaranteed minimum crediting rates due to the rising interest rate environment.
As such, certain management and monitoring processes are designed to minimize the effect of sudden and/or sustained changes in interest rates on fair value, cash flows, and net investment income. During 2023 and 2022, the Company experienced a higher level of policyholder surrenders within the contracts with lower guaranteed minimum crediting rates due to the rising interest rate environment.
The Company allocates capital to its segments based on an internally developed economic capital model, the purpose of which is to measure the risk in the business and to provide a consistent basis upon which capital is deployed. The economic capital model considers the unique and specific nature of the risks inherent in RGA’s businesses.
The Company allocates capital to its segments based on an internally developed economic capital model, the purpose of which is to measure the risk in the business and to provide a consistent basis upon which capital is deployed. The economic capital model considers the unique and specific nature of the risks inherent in RGA’s business.
The Company invests in this area in an effort to both support its clients and accelerate the development of new solutions and services to increase consumer engagement within the life insurance industry and hence generate new future revenue streams.
The Company invests in this area in an effort to both support its clients and accelerate the development of innovative solutions and services to increase consumer engagement within the life insurance industry and hence generate new future revenue streams.
In some cases, the ceding company is required to pay the Company a recapture fee. 66 Table of Contents Guarantees The Company has issued guarantees to third parties on behalf of its subsidiaries for the payment of amounts due under certain reinsurance treaties, securities borrowing arrangements, financing arrangements and office lease obligations, whereby if a subsidiary fails to meet an obligation, the Company or one of its other subsidiaries will make a payment to fulfill the obligation.
In some cases, the ceding company is required to pay the Company a recapture fee. 71 Table of Contents Guarantees The Company has issued guarantees to third parties on behalf of its subsidiaries for the payment of amounts due under certain reinsurance treaties, securities borrowing arrangements, financing arrangements and office lease obligations, whereby if a subsidiary fails to meet an obligation, the Company or one of its other subsidiaries will make a payment to fulfill the obligation.
See Note 10 – “Employee Benefit Plans” in the Notes to Consolidated Financial Statements for information related to the Company’s obligations and funding requirements for pension and other postretirement benefits. Asset / Liability Management The Company actively manages its cash and invested assets using an approach that is intended to balance quality, diversification, asset/liability matching, liquidity and investment return.
See Note 15 – “Employee Benefit Plans” in the Notes to Consolidated Financial Statements for information related to the Company’s obligations and funding requirements for pension and other postretirement benefits. Asset / Liability Management The Company actively manages its cash and invested assets using an approach that is intended to balance quality, diversification, asset/liability matching, liquidity and investment return.
As exchange-traded futures are affected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties. See Note 5 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for more information regarding the Company’s derivative instruments.
As exchange-traded futures are affected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties. See Note 12 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for more information regarding the Company’s derivative instruments.
However, based on the ability to carryback and carryforward tax capital losses and the Company’s ability and intention to hold available for sale fixed maturity securities showing an unrealized loss until recovery, as described in Note 4 – “Investments” the Company determined it is more likely than not to realize the remaining deferred tax asset.
However, based on the ability to carryback and carryforward tax capital losses and the Company’s ability and intention to hold available for sale fixed maturity securities showing an unrealized loss until recovery, as described in Note 11 – “Investments” the Company determined it is more likely than not to realize the remaining deferred tax asset.
Off-Balance Sheet Arrangements The Company has commitments to fund investments in limited partnerships, joint ventures, commercial mortgage loans, lifetime mortgages, private placement investments and bank loans, including revolving credit agreements. See Note 12 – “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial Statements for additional information on the Company’s commitments to fund investments and other off-balance sheet arrangements.
Off-Balance Sheet Arrangements The Company has commitments to fund investments in limited partnerships, joint ventures, commercial mortgage loans, lifetime mortgages, private placement investments and bank loans, including revolving credit agreements. See Note 17 – “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial Statements for additional information on the Company’s commitments to fund investments and other off-balance sheet arrangements.
See “Credit Risk” in Note 5 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for additional information on credit risk related to derivatives. Counterparty risk is the potential for the Company to incur losses due to a client, retrocessionaire, or partner becoming distressed or insolvent. This includes run-on-the-bank risk and collection risk.
See “Credit Risk” in Note 12 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for additional information on credit risk related to derivatives. Counterparty risk is the potential for the Company to incur losses due to a client, retrocessionaire, or partner becoming distressed or insolvent. This includes run-on-the-bank risk and collection risk.
Generally, the Company’s insurance subsidiaries retrocede amounts in excess of their retention to the Company’s other insurance subsidiaries. External retrocessions are arranged through the Company’s retrocession pools for amounts in excess of its retention. As of December 31, 2022, all retrocession pool members in this excess retention pool rated by the A.M. Best Company were rated “A-” or better.
Generally, the Company’s insurance subsidiaries retrocede amounts in excess of their retention to the Company’s other insurance subsidiaries. External retrocessions are arranged through the Company’s retrocession pools for amounts in excess of its retention. As of December 31, 2023, all retrocession pool members in this excess retention pool rated by the A.M. Best Company were rated “A-” or better.
To mitigate this risk, the Company helps set the investment guidelines followed by the ceding company and monitors compliance. Ceding companies with funds withheld at interest had an average financial strength rating of “A” as of December 31, 2022 and 2021. Certain ceding companies maintain segregated portfolios for the benefit of the Company.
To mitigate this risk, the Company helps set the investment guidelines followed by the ceding company and monitors compliance. Ceding companies with funds withheld at interest had an average financial strength rating of “A” as of December 31, 2023 and 2022. Certain ceding companies maintain segregated portfolios for the benefit of the Company.
The COVID-19 pandemic has highlighted the importance of insurance products in general and the value of reinsurance as a risk management tool.
The COVID-19 pandemic highlighted the importance of insurance products in general and the value of reinsurance as a risk management tool.
Based on data provided by the ceding companies as of December 31, 2022 and 2021, segregated portfolios contained investments similar to those directly owned by the Company; primarily fixed maturity securities as well as commercial mortgage loans and derivatives. These assets pose risks similar to the investments the Company directly owns.
Based on data provided by the ceding companies as of December 31, 2023 and 2022, segregated portfolios contained investments similar to those directly owned by the Company; primarily fixed maturity securities as well as commercial mortgage loans and derivatives. These assets pose risks similar to the investments the Company directly owns.
Consolidation and Reorganization within the Life Reinsurance and Life Insurance Industry . There are fewer competitors in the traditional life reinsurance industry as a result of consolidations in the industry. As a consequence, the Company believes there will be business opportunities for the remaining life reinsurers, particularly those with a significant market presence and strong ratings.
Consolidation and Reorganization within the Life Reinsurance and Life Insurance Industry . There are fewer competitors in the traditional life reinsurance industry as a result of consolidations in the industry. As a consequence, the Company believes this will result in business opportunities for the remaining life reinsurers, particularly those with a significant market presence and strong ratings.
During 2020, RGA established an intercompany derivative cash collateral pool where RGA and certain subsidiaries pool derivative cash collateral into a single concentration account. This derivative cash collateral pool allows RGA and its affiliates to lend or borrow cash from the concentration account in order to more efficiently meet its collateral obligations under their respective derivative transactions.
RGA established an intercompany derivative cash collateral pool where RGA and certain subsidiaries pool derivative cash collateral into a single concentration account. This derivative cash collateral pool allows RGA and its affiliates to lend or borrow cash from the concentration account in order to more efficiently meet its collateral obligations under their respective derivative transactions.
Critical Accounting Policies The Company’s accounting policies are described in Note 2 – “Significant Accounting Policies and Pronouncements” in the Notes to Consolidated Financial Statements.
Critical Accounting Estimates The Company’s accounting policies are described in Note 2 – “Significant Accounting Policies and Pronouncements” in the Notes to Consolidated Financial Statements.
The third-parties have recourse to RGA should the subsidiary fail to provide the required funding, however, as of December 31, 2022, the Company does not believe that it will be required to provide any funding under these commitments as the occurrence of the defined events is considered remote.
The third parties have recourse to RGA should the subsidiary fail to provide the required funding, however, as of December 31, 2023, the Company does not believe that it will be required to provide any funding under these commitments as the occurrence of the defined events is considered remote.
As of December 31, 2022 and 2021, the Company’s recorded investment in mortgage loans, gross of unamortized deferred loan origination fees and expenses and allowance for credit losses, were distributed geographically as follows (dollars in millions): 2022 2021 Recorded Investment % of Total Recorded Investment % of Total U.S.
As of December 31, 2023 and 2022, the Company’s recorded investment in mortgage loans, gross of unamortized deferred loan origination fees and expenses and allowance for credit losses, were distributed geographically as follows (dollars in millions): 2023 2022 Recorded Investment % of Total Recorded Investment % of Total U.S.
See Note 12 – “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial Statements for a table that presents the amounts for guarantees, by type, issued by the Company. In addition, the Company indemnifies its directors and officers pursuant to its charters and by-laws.
See Note 17 – “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial Statements for a table that presents the amounts for guarantees, by type, issued by the Company. In addition, the Company indemnifies its directors and officers pursuant to its charters and by-laws.
The amount of the loan is dependent on the appraised value of the home at the time of origination, the borrower's age and interest rate. Unlike a home equity loan, no payment of principal or interest is required until the death of 75 Table of Contents the borrower or sale of the home.
The amount of the loan is dependent on the appraised value of the home at the time of origination, the borrower's age and interest rate. Unlike a home equity loan, no payment of principal or interest is required until the death of 80 Table of Contents the borrower or sale of the home.
As of December 31, 2022, neither the Company nor its subsidiaries have been required to post additional collateral or have had a reinsurance treaty recaptured as a result of a credit downgrade or a defined statutory measure decline.
As of December 31, 2023, neither the Company nor its subsidiaries have been required to post additional collateral or have had a reinsurance treaty recaptured as a result of a credit downgrade or a defined statutory measure decline.
Excluded from the table above are net deferred income tax liabilities, unrecognized tax benefits, and accrued interest related to unrecognized tax benefits of $0.4 billion, for which the Company cannot reliably determine the timing of payment.
Excluded from the table above are net deferred income tax liabilities, unrecognized tax benefits, and accrued interest related to unrecognized tax benefits of $1.4 billion, for which the Company cannot reliably determine the timing of payment.
The intercompany revolving credit facility, which is a series of demand loans among RGA and its affiliates, is permitted under applicable insurance laws. This facility reduces overall borrowing costs by allowing RGA and its operating companies to access internal cash resources instead of incurring third-party transaction costs.
The intercompany revolving credit facility, which is a series of demand loans among RGA and its affiliates, is permitted under applicable insurance laws. This facility reduces overall borrowing costs by allowing RGA and its operating companies to access internal cash resources instead of 67 Table of Contents incurring third-party transaction costs.
The mortgage loan portfolio is diversified by geographic region and property type as discussed further under “Mortgage Loans” in Note 4 – “Investments” in the Notes to Consolidated Financial Statements.
The mortgage loan portfolio is diversified by geographic region and property type as discussed further under “Mortgage Loans” in Note 11 – “Investments” in the Notes to Consolidated Financial Statements.
The Company may borrow up to $850 million in cash and obtain letters of credit in multiple currencies on its syndicated revolving credit facility that matures in August 2023. As of December 31, 2022, the Company had no cash borrowings outstanding and $1 million in issued, but undrawn, letters of credit under this facility.
The Company may borrow up to $850 million in cash and obtain letters of credit in multiple currencies on its syndicated revolving credit facility that matures in August 2028. As of December 31, 2023, the Company had no cash borrowings outstanding and no issued, but undrawn, letters of credit under this facility.
Collateral Finance and Securitization Notes and Statutory Reserve Funding The Company uses various internal and third-party reinsurance arrangements and funding sources to manage statutory reserve strain, including reserves associated with the U.S. Valuation of Life Policies Model Regulation (commonly referred to as Regulation XXX) and principles-based reserves (commonly referred to PBR), and the associated collateral requirements.
Statutory Reserve Funding The Company uses various internal and third-party reinsurance arrangements and funding sources to manage statutory reserve strain, including reserves associated with the U.S. Valuation of Life Policies Model Regulation (commonly referred to as Regulation XXX) and principles-based reserves (commonly referred to PBR), and the associated collateral requirements.
In addition to loans associated with the intercompany revolving credit facility, RGA and its subsidiaries, RGA Americas and RGA International Division Sydney Office Pty Limited, provided loans to RGA Australian Holdings Pty Limited with a total outstanding balance of $41 million and $44 million as of December 31, 2022 and 2021, respectively.
In addition to loans associated with the intercompany revolving credit facility, RGA and its subsidiaries, RGA Americas and RGA International Division Sydney Office Pty Limited, provided loans to RGA Australian Holdings Pty Limited with a total outstanding balance of $41 million and $41 million as of December 31, 2023 and 2022, respectively.
The Company is a member of the FHLB and holds $65 million of FHLB common stock, which is included in other invested assets on the Company’s consolidated balance sheets.
The Company is a member of the FHLB and holds $63 million of FHLB common stock, which is included in other invested assets on the Company’s consolidated balance sheets.
See “Unrealized Losses for Fixed Maturity Securities Available-for-Sale” in Note 4 – “Investments” in the Notes to Consolidated Financial Statements for tables that present the estimated fair value and gross unrealized losses for securities that have estimated fair values below amortized cost by class and grade, as well as the length of time the related estimated fair value has remained below amortized cost as of December 31, 2022 and 2021.
See “Unrealized Losses for Fixed Maturity Securities Available-for-Sale” in Note 11 – “Investments” in the Notes to Consolidated Financial Statements for tables that present the estimated fair value and gross unrealized losses for securities that have estimated fair values below amortized cost by class and grade, as well as the length of time the related estimated fair value has remained below amortized cost as of December 31, 2023 and 2022.
The Company continues to actively assess the impacts of COVID-19 on its business and update and refine its COVID-19 projection and financial impact models to manage its insurance risk through the pandemic.
The Company continues to actively assess the impacts of COVID-19 on its business and update and refine its COVID-19 projection and financial impact models to manage its insurance risk.
As of December 31, 2022 and 2021, the Company classified approximately 10.8% and 8.5%, respectively, of its fixed maturity securities in the Level 3 category (refer to Note 6 – “Fair Value of Assets and Liabilities” in the Notes to Consolidated Financial Statements for additional information). These securities primarily consist of private placement corporate and asset-backed securities.
As of December 31, 2023 and 2022, the Company classified approximately 10.6% and 10.8%, respectively, of its fixed maturity securities in the Level 3 category (refer to Note 13 – “Fair Value of Assets and Liabilities” in the Notes to Consolidated Financial Statements for additional information). These securities primarily consist of private placement corporate and asset-backed securities.
The Company monitors capital risk exposure using relevant bases of measurement including but not limited to economic, rating agency, and regulatory methodologies. Additionally, the Company regularly assesses risk related to collateral, foreign currency, financing, liquidity and tax. 82 Table of Contents Collateral Risk.
The Company monitors capital risk exposure using relevant bases of measurement including, but not limited to economic, rating agency, and regulatory methodologies. Additionally, the Company regularly assesses risk related to collateral, foreign currency, financing, liquidity and tax. Collateral Risk.
Fees earned from this business can vary significantly depending on the size of the transactions and the timing of their completion and therefore can fluctuate from period to period.
Fees earned from this business can vary significantly depending on the size of the transaction and the timing of their completion and therefore can fluctuate from period to period.
(2) Interest-sensitive contract liabilities include amounts related to the Company’s reinsurance of asset-intensive products, primarily deferred annuities and corporate-owned life insurance. The amounts in the table above represent the estimated obligations as they become due both to and from ceding companies relating to activity of the underlying policyholders.
(2) Interest-sensitive contract liabilities include amounts related to the Company’s reinsurance of asset-intensive products, primarily deferred annuities, corporate-owned life insurance and funding agreement backed notes. The amounts in the table above represent the estimated obligations as they become due both to and from ceding companies relating to activity of the underlying policyholders.
See Note 5 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for a table that presents the notional amounts and fair value of investment related derivative instruments held as of December 31, 2022 and 2021. The Company may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments.
See Note 12 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for a table that presents the notional amounts and fair value of investment related derivative instruments held as of December 31, 2023 and 2022. The Company may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments.
Typically, capital solution transactions do not qualify as reinsurance under GAAP, due to the low-risk nature of the transactions, therefore only the related net fees are reflected in other revenues on the consolidated statements of income.
Typically, these transactions do not qualify as reinsurance under GAAP, due to the low-risk nature of the transactions, therefore only the related net fees are reflected in other revenues on the consolidated statements of income.
The statutory borrowing and lending limit for RGA’s Missouri-domiciled insurance subsidiaries is currently 3% of the insurance company’s admitted assets as of its most recent year-end. There were borrowings of $304 million and $192 million outstanding under the intercompany revolving credit facility as of December 31, 2022 and 2021, respectively.
The statutory borrowing and lending limit for RGA’s Missouri-domiciled insurance subsidiaries is currently 3% of the insurance company’s admitted assets as of its most recent year-end. There were borrowings of $128 million and $304 million outstanding under the intercompany revolving credit facility as of December 31, 2023 and 2022, respectively.
Fixed Maturity Securities Available-for-Sale See “Fixed Maturity Securities Available-for-Sale” in Note 4 – “Investments” in the Notes to Consolidated Financial Statements for tables that provide the amortized cost, allowance for credit losses, unrealized gains and losses and estimated fair value of these securities by type as of December 31, 2022 and 2021.
Fixed Maturity Securities Available-for-Sale See “Fixed Maturity Securities Available-for-Sale” in Note 11 – “Investments” in the Notes to Consolidated Financial Statements for tables that provide the amortized cost, allowance for credit losses, unrealized gains and losses and estimated fair value of these securities by type as of December 31, 2023 and 2022.
The Company will establish a valuation allowance if management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. The Company has deferred tax assets including those related to foreign tax credits, net operating and capital losses.
The Company will 47 Table of Contents establish a valuation allowance if management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. The Company has deferred tax assets including those related to foreign tax credits, net operating and capital losses.
RGA declared dividends totaling $3.06 per share in 2022. All future payments of dividends are at the discretion of RGA’s board of directors and will depend on the Company’s earnings, capital requirements, insurance regulatory conditions, operating conditions, and other such factors as the board of directors may deem relevant.
RGA declared dividends totaling $3.30 per share in 2023. All future payments of dividends are at the discretion of RGA’s board of directors and will depend on the Company’s earnings, capital requirements, insurance regulatory conditions, operating conditions, and other such factors as the board of directors may deem relevant.
See Note 12 – “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial Statements for a table that presents these commitments by period and maximum obligation. 62 Table of Contents RGA established an intercompany revolving credit facility where certain subsidiaries can lend to or borrow from each other and from RGA in order to manage capital and liquidity more efficiently.
See Note 17 – “Commitments, Contingencies and Guarantees” in the Notes to Consolidated Financial Statements for a table that presents these commitments by period and maximum obligation. RGA established an intercompany revolving credit facility where certain subsidiaries can lend to or borrow from each other and from RGA in order to manage capital and liquidity more efficiently.
Fluctuations occur period to period primarily due to changing investment conditions including, but not limited to, interest rate movements (including risk-free rates and credit spreads), implied volatility, the Company’s own credit risk and equity market performance, all of which are factors in the calculations of fair value.
Fluctuations occur period to period primarily due to changing investment conditions including, but not limited to, interest rate movements (including risk-free rates and credit spreads), implied volatility and equity market performance, all of which are factors in the calculations of fair value of assets and liabilities.
Additional sources of liquidity to meet unexpected cash outflows in excess of operating cash inflows and current cash and equivalents on hand also includes drawing funds under a syndicated revolving credit facility, under which the Company had availability of $849 million as of December 31, 2022.
Additional sources of liquidity to meet unexpected cash outflows in excess of operating cash inflows and current cash and equivalents on hand also includes drawing funds under a syndicated revolving credit facility, under which the Company had availability of $850 million as of December 31, 2023.
The net funded status of the Company’s qualified and nonqualified pension and other postretirement liabilities included within other liabilities has been excluded from the amounts presented in the table above. As of December 31, 2022, the Company had a net unfunded balance of $116 million related to qualified and nonqualified pension and other postretirement liabilities.
The net funded status of the Company’s qualified and nonqualified pension and other postretirement liabilities included within other liabilities has been excluded from the amounts presented in the table above. As of December 31, 2023, the Company had a net unfunded balance of $119 million related to qualified and nonqualified pension and other postretirement liabilities.
The Company has been able to utilize its certified reinsurer, RGA Americas, as a means of reducing the burden of financing PBR, Regulation XXX and other types of reserves.
The Company has been able to utilize RGA Americas, as a reciprocal jurisdiction reinsurer and as a certified reinsurer, as a means of reducing the burden of financing PBR, Regulation XXX and other types of reserves.
In addition to per-issuer limits, the Company also limits the total amounts of investments per rating category. An automated compliance system checks for compliance for all investment positions and sends warning messages when there is a breach.
The Company manages investment credit risk using per-issuer investment limits. In addition to per-issuer limits, the Company also limits the total amounts of investments per rating category. An automated compliance system checks for compliance for all investment positions and sends warning messages when there is a breach.
The amount of reinsurance assumed from client companies, as measured by pre-tax statutory surplus, risk based capital and other financial reinsurance structures was $1.1 billion and $1.6 billion for the year ended December 31, 2022 and 2021, respectively.
The amount of reinsurance assumed from client companies, as measured by pre-tax statutory surplus, risk based capital and other financial reinsurance structures was $1.2 billion and $1.1 billion for the year ended December 31, 2023 and 2022, respectively.
Certain of these asset-intensive agreements, primarily in the U.S. and Latin America Financial Solutions operating segment, are generally funded by fixed maturity securities that are withheld by the ceding company. 69 Table of Contents The Company’s liquidity position (cash and cash equivalents and short-term investments) was $3.1 billion and $3.0 billion at December 31, 2022 and 2021, respectively.
Certain of these asset-intensive agreements, primarily in the U.S. and Latin America Financial Solutions operating segment, are generally funded by fixed maturity securities that are withheld by the ceding company. 74 Table of Contents The Company’s liquidity position (cash and cash equivalents and short-term investments) was $3.2 billion and $3.1 billion at December 31, 2023 and 2022, respectively.
Interest accrues to the total funds withheld at rates defined by the treaty terms and the Company estimated the yields were approximately 4.55%, 6.34% and 5.40% for the years ended December 31, 2022, 2021 and 2020, respectively.
Interest accrues to the total funds withheld at rates defined by the treaty terms and the Company estimated the yields were approximately 5.12%, 4.55% and 6.34% for the years ended December 31, 2023, 2022 and 2021, respectively.
Given the scope of the Company’s business and the number of countries in which it operates, this set of risks has the potential to affect the business 83 Table of Contents locally, regionally, or globally.
Given the scope of the Company’s business and the number of countries in which it operates, this set of risks has the potential to affect the business locally, regionally, or globally.
Additionally, in many countries, companies are increasingly interested in reducing their exposure to longevity risk related to employee retirement plans, resulting in a growing demand for pension risk transfer solutions. Economic, Regulatory and Accounting Changes.
Additionally, in many countries, companies are increasingly interested in reducing their exposure to longevity risk related to employee retirement plans, resulting in a growing demand for pension risk transfer solutions. 43 Table of Contents Economic, Regulatory and Accounting Changes.
See “Other Invested Assets” in Note 4 – “Investments” in the Notes to Consolidated Financial Statements for a table that presents the carrying value of the Company’s other invested assets by type as of December 31, 2022 and 2021.
See “Other Invested Assets” in Note 11 – “Investments” in the Notes to Consolidated Financial Statements for a table that presents the carrying value of the Company’s other invested assets by type as of December 31, 2023 and 2022.
Generally, the credit exposure of the Company’s derivative contracts is limited to the fair value and accrued interest of non-collateralized derivative contracts in an asset position at the reporting date. As of December 31, 2022, the Company had credit exposure of $14 million.
Generally, the credit exposure of the Company’s derivative contracts is limited to the fair value and accrued interest of non-collateralized derivative contracts in an asset position at the reporting date. As of December 31, 2023, the Company had credit exposure of $15 million.
Certain of these letters of credit contain financial covenant restrictions similar to those described in the “Debt” discussion above. At December 31, 2022, there were approximately $128 million of outstanding bank letters of credit in favor of third parties.
Certain of these letters of credit contain financial covenant restrictions similar to those described in the “Debt” discussion above. At December 31, 2023, there were approximately $54 million of outstanding bank letters of credit in favor of third parties.
See “Corporate Fixed Maturity Securities” in Note 4 – “Investments” in the Notes to Consolidated Financial Statements for tables showing the major sector types, which comprise the corporate fixed maturity holdings as of December 31, 2022 and 2021.
See “Corporate Fixed Maturity Securities” in Note 11 – “Investments” in the Notes to Consolidated Financial Statements for tables showing the major sector types, which comprise the corporate fixed maturity holdings as of December 31, 2023 and 2022.
These factors, individually or collectively, may have a material adverse effect on the Company’s net income, financial condition or liquidity. The table below provides a summary of variable annuity account values and the fair value of the guaranteed benefits as December 31, 2022 and 2021.
These factors, individually or collectively, may have a material adverse effect on the Company’s net income, financial condition or liquidity. The table below provides a summary of variable annuity account values and the fair value of the guaranteed benefits as December 31, 2023 and 2022 (dollars in millions).
See “Securities Borrowing, Lending and Repurchase/Reverse Repurchase Agreements” in Note 4 – “Investments” in the Notes to Consolidated Financial Statements for information related to the Company’s securities borrowing, lending and repurchase/reverse repurchase agreements.
See “Securities Lending and Repurchase/Reverse Repurchase Agreements” in Note 11 – “Investments” in the Notes to Consolidated Financial Statements for information related to the Company’s securities lending and repurchase/reverse repurchase agreements.
Securities with an amortized cost of $3.7 billion were held in trust for the benefit of the Company’s subsidiaries to satisfy collateral requirements for reinsurance business at December 31, 2022. Additionally, securities with an amortized cost of $31.5 billion as of December 31, 2022, were held in trust to satisfy collateral requirements under certain third-party reinsurance treaties.
Securities with an amortized cost of $3.5 billion were held in trust for the benefit of the Company’s subsidiaries to satisfy collateral requirements for reinsurance business at December 31, 2023. Additionally, securities with an amortized cost of $32.8 billion as of December 31, 2023, were held in trust to satisfy collateral requirements under certain third-party reinsurance treaties.
As a result of terminations, fluctuations in foreign exchange rates and other changes, assumed in force amounts at risk decreased by $475.2 billion, $425.8 billion and $389.1 billion in 2022, 2021 and 2020, respectively. See “Results of Operations by Segment” below for further information about the Company’s segments.
As a result of terminations, fluctuations in foreign exchange rates and other changes, assumed in force amounts at risk decreased by $59.7 billion, $475.2 billion and $425.8 billion in 2023, 2022 and 2021, respectively. See “Results of Operations by Segment” below for further information about the Company’s segments.
Key relationships risk relates to areas of important interactions with parties external to the Company. The Company’s reputation is a critical asset in successfully conducting business and therefore relationships with its primary stakeholders (including but not limited to business partners, shareholders, clients, rating agencies, and regulators) are all carefully monitored. Political and Regulatory Risk.
Key relationships risk is the risk related to key relationships with parties external to the Company. The Company’s reputation is a critical asset in successfully conducting business and therefore relationships with its primary stakeholders (including but not limited to business partners, shareholders, clients, rating agencies, and regulators) are all carefully monitored. Political and Regulatory Risk.
As part of the Company’s capital deployment strategy, it has in recent years repurchased shares of RGA common stock and paid dividends to RGA shareholders, as authorized by the board of directors. On January 24, 2019, RGA’s board of directors authorized a share repurchase program for up to $400 million of RGA’s outstanding common stock.
As part of the Company’s capital deployment strategy, it has in recent years repurchased shares of RGA common stock and paid dividends to RGA shareholders, as authorized by the board of directors. On January 23, 2024, RGA’s board of directors authorized a share repurchase program for up to $500 million of RGA’s outstanding common stock.
The sum of the obligations shown for all years in the table of $39.0 billion exceeds the liability amount of $30.6 billion included on the consolidated balance sheets, and the difference is primarily related to the lack of discounting and to liabilities related to accounting conventions, which are not contractually due and are therefore excluded.
The sum of the obligations shown for all years in the table of $41.4 billion exceeds the liability amount of $30.3 billion included on the consolidated balance sheets, and the difference is primarily related to the lack of discounting and to liabilities related to accounting conventions, which are not contractually due and are therefore excluded.
Any dividends paid by RGA Reinsurance would be paid to RGA Life and Annuity, its parent company, which in turn has restrictions related to its ability to pay dividends to RGA. Chesterfield Re would pay dividends to its immediate parent Chesterfield Financial, which would in turn pay dividends to RGA Life and Annuity.
Any dividends paid by RGA Reinsurance would be paid to RGA Life and Annuity, its parent company, which in turn has restrictions related to its ability to pay dividends to RGA.
The Company also has $1.1 billion of funds available through collateralized borrowings from the Federal Home Loan Bank of Des Moines (“FHLB”) as of December 31, 2022. As of December 31, 2022, the Company could have borrowed these additional amounts without violating any of its existing debt covenants.
The Company also has $712 million of funds available through collateralized borrowings from the Federal Home Loan Bank of Des Moines (“FHLB”) as of December 31, 2023. As of December 31, 2023, the Company could have borrowed these additional amounts without violating any of its existing debt covenants.
All estimated cash payments presented in the table above are undiscounted as to interest and gross of any reinsurance recoverable. The discounted liability amount of $35.2 billion included on the consolidated balance sheets exceeds the sum of the undiscounted estimated cash flows of $28.9 billion shown above.
All estimated cash payments presented in the table above are undiscounted as to interest and gross of any reinsurance recoverable. The discounted liability amount of $41.2 billion included on the consolidated balance sheets exceeds the sum of the undiscounted estimated cash flows of $29.8 billion shown above.
The Company holds $868 million and $758 million of beneficial interest in lifetime mortgages in the UK, net of allowance for credit losses, as of December 31, 2022 and 2021, respectively. Investment income includes $38 million, $52 million and $44 million in interest income earned on lifetime mortgages for the years ended December 31, 2022, 2021 and 2020, respectively.
The Company holds $944 million and $868 million of beneficial interest in lifetime mortgages in the UK, net of allowance for credit losses, as of December 31, 2023 and 2022, respectively. Investment income includes $39 million, $38 million and $52 million in interest income earned on lifetime mortgages for the years ended December 31, 2023, 2022 and 2021, respectively.
The Company uses multiple approaches to managing insurance risk: active insurance risk assessment and pricing appropriately for the risks assumed, transferring undesired risks, and managing the retained exposure prudently. These strategies are explained below. The global impact of the COVID-19 pandemic and the response thereto has had a material adverse effect on the Company’s earnings and continues to develop.
The Company uses multiple approaches to managing insurance risk: active insurance risk assessment and pricing appropriately for the risks assumed, transferring undesired risks, and managing the retained exposure prudently. These strategies are explained below. The global impact of COVID-19 and the response thereto has had a material adverse effect on the Company’s earnings, primarily in the form of higher claims.
Asset-Intensive within the Financial Solutions segment includes coinsurance of annuities and corporate-owned life insurance policies and to a lesser extent, fee-based synthetic guaranteed investment contracts, which include investment-only, stable value contracts.
Asset-Intensive within the Financial Solutions segment includes coinsurance of annuities, corporate-owned life insurance policies, pension risk transfer (“PRT”) group annuity contracts and, to a lesser extent, fee-based synthetic guaranteed investment contracts, which include investment-only, stable value contracts.
As the cornerstone of the ERM framework, a culture of prudent risk management reinforced by senior management plays a preeminent role in the effective management of risks assumed by RGA. • Risk Appetite Statement: A general and high level overview of the risk profile RGA aims to achieve to meet its strategic objectives.
As the cornerstone of the ERM framework, a culture of prudent risk management reinforced by senior management plays a preeminent role in the effective management of risks assumed by RGA. • Risk Appetite Statement: The Company’s current Risk Appetite Statement, effective through December 31, 2023, is a general and high-level overview of the risk profile RGA aims to achieve to meet its strategic objectives.
As of December 31, 2022 and 2021, the Company’s investments in Canadian government securities represented 6.9% and 8.1%, respectively, of the fair value of total fixed maturity securities. These assets are primarily high quality, long duration provincial strip bonds, the valuation of which is closely linked to the interest rate curve.
As of December 31, 2023 and 2022, the Company’s investments in Canadian government securities represented 6.5% and 6.9%, respectively, of the fair value of total fixed maturity securities. These assets are primarily high quality, long duration 76 Table of Contents provincial strip bonds, the valuation of which is closely linked to the interest rate curve.
The largest asset class in which fixed maturity securities were invested was corporate securities, which represented approximately 64.2% and 62.8% of total fixed maturity securities as of December 31, 2022 and 2021, respectively.
The largest asset class in which fixed maturity securities were invested was corporate securities, which represented approximately 64.1% and 64.2% of total fixed maturity securities as of December 31, 2023 and 2022, respectively.
Strategy risk is the risk related to the design and execution of the Company’s strategic plan, including risks associated with merger and acquisition activity. Strategy risks are addressed by a robust multi-year planning process, regular business unit level assessments of strategy execution and active benchmarking of key performance and risk indicators across the Company’s portfolios of businesses.
Strategy risk is the risk related to the planning and execution of the Company’s strategic plan. Strategy risks are addressed by a robust multi-year planning process, regular business unit level assessments of strategy execution and active benchmarking of key performance and risk indicators across the Company’s portfolios of businesses.
The Company’s risk appetites and limits are set to be consistent with strategic objectives. External Environment Risk. External environment risk relates to external competition, macro trends, and client needs. Macro characteristics that drive market opportunities, risk and growth potential, the competitive landscape and client feedback are closely monitored. Key Relationships Risk.
The Company’s risk appetites and limits are set to be consistent with strategic objectives. External Environment Risk. External environment risk is the risk related to external competition, macro trends, and client needs. Macro characteristics that drive market opportunities, risk and growth potential, the competitive landscape and client feedback are closely monitored. 89 Table of Contents Key Relationships Risk.
Impact of certain derivatives Income from the asset-intensive business tends to be volatile due to changes in the fair value of certain derivatives, including embedded derivatives associated with reinsurance treaties structured on a modco or funds withheld basis, as well as embedded derivatives associated with the Company’s reinsurance of EIAs and variable annuities with guaranteed minimum benefit riders.
Income from the asset-intensive business tends to be volatile due to changes in the fair value of certain derivatives, including embedded derivatives associated with reinsurance treaties structured on a modco or funds withheld basis, embedded derivatives associated with the Company’s reinsurance of EIAs and changes in the fair value of market risk benefits associated with guaranteed minimum benefit riders.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information required by Item 7A is contained in Item 7 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market and Credit Risk”. 85 Table of Contents
Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information required by Item 7A is contained in Item 7 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market and Credit Risk”. 90 Table of Contents

Other RGA 10-K year-over-year comparisons