Reinsurance Group of America Inc. managed to increase net income and revenue in the fourth quarter in spite of the effects of low interest rates and volatility in foreign exchange rates.
The Chesterfield, Missouri-based life reinsurer is reporting $190 million in net income for the fourth quarter on $2.5 billion in revenue, up from $163 million in net income on $2.3 billion in revenue for the fourth quarter of 2015.
A reinsurer provides insurance for insurers. In some cases, it helps an insurer manage the risk involved with writing new business. In other cases, a reinsurer may assume responsibility for entire blocks of in-force policies.
RGA reinsures annuities as well as life insurance policies.
Currency fluctuations in RGA’s European, Middle Eastern and African business cut overall revenue by about $37 million, and low interest rates continued to hurt the average yield on RGA’s investment portfolios.
RGA’s annualized investment yield increased to 4.69 percent for the fourth quarter, from 4.43 percent in the third quarter. But the average was still lower than the very low average of 4.69 percent the company reported for the fourth quarter of 2015.