Reinsurance Group of America Inc. says the impact of the COVID-19 pandemic is manageable, but material.
Executives at RGA (NYSE: RGA) spent much of 2020 saying that RGA was well-prepared to handle a pandemic like the COVID-19 pandemic.
RGA’s CEO Anna Manning emphasized Monday that RGA has been reporting profits in spite of facing “a significant level of COVID-19 mortality claim costs.”
“While we expect our results to continue to be affected by COVID-19 in the short term, the RGA franchise has shown resilience and produced very good results in many respects,” Manning said, in a comment included in the earnings announcement. “I am proud of how our organization has performed in this challenging environment.”
A reinsurer helps insurers manage insurance and annuity risk.
RGA is reporting $132 million in net income for the fourth quarter of 2020 on $4.1 billion in revenue, compared with $235 million on $3.8 billion in revenue for the fourth quarter of 2019.
RGA’s U.S. and Latin America business is reporting an $89 million adjusted operating income before income taxes for the latest quarter on $1.8 billion in revenue, compared with $22 million in pretax adjusted operating income on $1.8 billion in revenue for the year-earlier quarter.
Here’s what happened to the value of certain types of annuities RGA reinsures between the fourth quarter of 2019 and the latest quarter:
- Deferred Fixed Annuities: $10.8 billion (down from $11.1 billion)
- Indexed Annuities: $3.5 billion (down from $3.6 billion)
- Variable Annuities: $3 billion (about the same)
The average rate on newly invested money was 2.79%. That was up from 2.53% in the third quarter but down from 3.7% in the fourth quarter of 2019.