Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers, and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related S harehold er Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
Glossary of Selected Terms
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Item 1. BUSINESS
Overview
Reinsurance Group of America, Incorporated (“RGA”) is an insurance holding company that was formed on December 31, 1992. The consolidated financial statements herein include the assets, liabilities, and results of operations of RGA and its subsidiaries, all of which are wholly owned. The terms “Company”, “we”, “us” and “our” in this Annual Report on Form 10-K refer to RGA and its subsidiaries.
The Company is a leading global provider of traditional life and health, and asset-intensive reinsurance, with operations in the U.S., Latin America, Canada, Europe, the Middle East, Africa, Asia and Australia. Reinsurance is an arrangement under which an insurance company, the “reinsurer,” agrees to indemnify another insurance company, the “ceding company,” for all or a portion of the insurance and/or investment risks underwritten by the ceding company. Reinsurance is designed to:
i. reduce the net amount at risk on individual risks, thereby enabling the ceding company to increase the volume of business it can underwrite, as well as increase the maximum risk it can underwrite on a single risk;
ii. enhance the ceding company’s financial strength and surplus position;
iii. stabilize operating results by leveling fluctuations in the ceding company’s loss experience; and
iv. assist the ceding company in meeting applicable regulatory requirements.
The Company has the following geographic-based and business-based operational segments:
• U.S. and Latin America;
• Canada;
• Europe, Middle East and Africa (“EMEA”);
• Asia Pacific; and
• Corporate and Other.
Geographic-based operations are further segmented into traditional and financial solutions businesses. The Company’s segments primarily write traditional reinsurance and financial solutions business that is wholly or partially retained in one or more of RGA’s insurance subsidiaries. See “Segments” for more information concerning the Company’s operating segments.
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.
Traditional reinsurance is written on a facultative or automatic treaty basis. Facultative reinsurance is individually underwritten by the reinsurer for each policy to be reinsured, with the pricing and other terms established based upon rates negotiated in advance. Facultative reinsurance is normally purchased by ceding companies for medically impaired lives, unusual risks, or liabilities in excess of the binding limits specified in their automatic reinsurance treaties.
An automatic reinsurance treaty provides that the ceding company will cede risks to a reinsurer on specified blocks of policies where the underlying policies meet the ceding company’s underwriting criteria. 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. 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.
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Facultative and automatic reinsurance may be written as yearly renewable term, coinsurance, modified coinsurance or coinsurance with funds withheld, as further described below:
• Yearly renewable term treaty – The reinsurer assumes primarily the mortality or morbidity risk.
• Coinsurance arrangement – Depending upon the terms of the contract, the reinsurer may share in the risk of loss due to mortality or morbidity, lapses and the investment risk, if any, inherent in the underlying policy.
• Modified coinsurance and coinsurance with funds withheld agreements – Unlike coinsurance arrangements, the assets supporting the reserves are retained by the ceding company.
Generally, the amount of life and health reinsurance ceded is stated on an excess or a quota share basis. Reinsurance on an excess basis covers amounts in excess of an agreed-upon retention limit. Retention limits vary by ceding company and also may vary by the age or underwriting classification of the insured, the product, and other factors. Under quota share reinsurance, the ceding company states its retention in terms of a fixed percentage of the risk with the remainder to be ceded to one or more reinsurers up to the maximum binding limit.
Many reinsurance agreements include recapture rights that permit the ceding company to reassume all or a portion of the risk formerly ceded to the reinsurer after an agreed-upon period of time or in some cases due to deterioration in the financial condition or ratings of the reinsurer. Recapture of business previously ceded does not affect premiums ceded prior to the recapture of such business but would reduce premiums in subsequent periods. The potential adverse effects of recapture rights are mitigated by the following factors: (i) recapture rights vary by treaty and the risk of recapture is a factor that is considered when pricing a reinsurance agreement; (ii) ceding companies generally may exercise their recapture rights only to the extent that they have increased their retention limits for the reinsured policies; (iii) ceding companies generally must recapture all of the policies eligible for recapture under the agreement in a particular year if any are recaptured, which prevents a ceding company from recapturing only the most profitable policies; and (iv) the ceding company is sometimes required to pay a fee to the reinsurer upon recapture. In addition, when a ceding company recaptures reinsured policies, the reinsurer releases the reserves it maintained to support the recaptured portion of the policies.
Financial Solutions
Financial solutions include asset-intensive reinsurance, longevity reinsurance, stable value products, pension risk transfer (“PRT”) transactions and capital solutions.
Asset-Intensive Reinsurance
Asset-intensive reinsurance refers to transactions with a significant investment component, which qualify as reinsurance under U.S. generally accepted accounting principles (“GAAP”). Asset-intensive reinsurance allows the Company’s clients to manage their investment risk and available capital to pursue new growth opportunities.
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. Some examples of asset-intensive reinsurance are fixed deferred annuities, indexed products, unit-linked variable annuities, universal life, corporate-owned life insurance and bank-owned life insurance, unit-linked variable life, immediate/payout annuities, whole life, disabled life reserves and extended term insurance.
Longevity Reinsurance
RGA’s longevity reinsurance products are reinsurance contracts from which the Company earns premium for assuming the longevity risk of pension plans and other annuity products that have been insured by third parties. In many countries, companies are increasingly interested in reducing their exposure to longevity risk related to employee retirement benefits and individual annuities. This concern comes from both the absolute size of the risk and the volatility that changes in life expectancy can have on companies’ reported earnings. In addition, insurance companies that offer lifetime annuities are seeking ways to manage their current exposure, while also recognizing the potential to take on more risk from employers and individuals.
The Company has entered into reinsurance transactions on existing longevity business for clients in the U.S., Europe and Canada. These have been arrangements with traditional insurance companies, as well as customized arrangements for companies with pension plan liabilities. The Company also works with partners to provide pension plan sponsors solutions that enable them to diversify and protect the benefits provided to the annuitants.
Stable Value Products
The Company provides guaranteed investment contracts to retirement plans that include investment-only, stable value wrap products. The assets are owned by the trustees of such plans, who invest the assets under the terms of investment
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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.
Pension Risk Transfer
The Company participates in the U.S. Pension Risk Transfer (“PRT”) market and works with partners to provide pension plan sponsors solutions that enable them to diversify and protect the benefits to the plan participants. The Company issues an annuity insurance contract to the plan sponsor, under which the Company assumes all investment and biometric risk. The Company typically receives a single premium at inception of the contract.
Capital Solutions
Capital solutions includes financial reinsurance and fee-based transactions which assist ceding companies in meeting applicable regulatory requirements by enhancing the ceding companies’ financial strength and regulatory surplus position. While low risk, these transactions do meet the risk transfer guidelines under National Association of Insurance Commissioners (“NAIC”) reporting rules, providing protection against significantly adverse changes in the business. Financial reinsurance and fee-based transactions do not qualify as reinsurance under GAAP due to the remote-risk nature of the transactions and are reported in accordance with deposit accounting guidelines or other applicable accounting guidelines.
Corporate Structure
As a holding company, RGA is separate and distinct from its subsidiaries and has no significant business operations of its own. Therefore, it relies on capital raising efforts, interest income on undeployed corporate investments and dividends from its insurance companies and other subsidiaries as the principal source of cash flow to meet its obligations, pay dividends and repurchase common stock. Information regarding the cash flow and liquidity needs of RGA may be found in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.
Regulation
The following table provides the jurisdiction of the regulatory authority for RGA’s primary operating and captive subsidiaries:
Subsidiary
Regulatory Authority Jurisdiction
RGA Reinsurance Company (“RGA Reinsurance”)
Missouri
Rockwood Reinsurance Company (“Rockwood Re”)
Missouri
Castlewood Reinsurance Company (“Castlewood Re”)
Missouri
Chesterfield Reinsurance Company (“Chesterfield Re”)
Missouri
RGA Life and Annuity Insurance Company (“RGA Life and Annuity”)
Missouri
Aurora National Life Assurance Company (“Aurora National”)
Missouri
RGA Life Reinsurance Company of Canada (“RGA Canada”)
Canada
RGA Americas Reinsurance Company, Ltd. (“RGA Americas”)
Bermuda
RGA Global Reinsurance Company, Ltd. (“RGA Global”)
Bermuda
Manor Reinsurance, Ltd. (“Manor Re”)
Barbados
RGA Worldwide Reinsurance Company, Ltd. (“RGA Worldwide”)
Barbados
RGA Reinsurance Company (Barbados) Ltd. (“RGA Barbados”)
Barbados
RGA Reinsurance Company of Australia Limited (“RGA Australia”)
Australia
RGA International Reinsurance Company dac (“RGA International”)
Ireland
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. 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. New capital standards (discussed below) are being developed and are likely to be applied to one or more of the Company’s subsidiaries and branches 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.
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U.S. Regulation
Insurance Regulation
The insurance laws and regulations, as well as the level of supervisory authority that may be exercised by the various state insurance departments, vary by jurisdiction. These laws and regulations generally:
• Grant broad powers to supervisory agencies or regulators to examine and supervise insurance companies and insurance holding companies with respect to every significant aspect of the conduct of the insurance business. This includes the power to pre-approve the execution or modification of contractual arrangements.
• Require insurance companies to meet certain capital, solvency standards and asset tests, to maintain minimum standards of financial strength and to file certain reports with regulatory authorities (including information concerning their capital structure, ownership and financial condition).
• Subject insurers to potential assessments for amounts paid by guarantee funds.
RGA Reinsurance, Aurora National, Chesterfield Re and RGA Life and Annuity are subject to the state of Missouri’s adoption of the National Association of Insurance Commissioners (“NAIC”) Model Audit Rule, which requires an insurer to have an annual audit by an independent certified public accountant, provide an annual management report of internal control over financial reporting, file the resulting reports with the Director of Insurance and maintain an audit committee under certain conditions.
The Insurance Holding Company System Regulatory Act in the state of Missouri permits the Missouri insurance regulator, the Missouri Department of Commerce and Insurance (“MDCI”) to request and consider similar information in its regulation of the solvency of and capital standards for RGA Reinsurance, Aurora National, Chesterfield Re and RGA Life and Annuity. The MDCI may also request and consider information about the operations of other subsidiaries of RGA and the extent to which contagion risk posed by those operations may also exist.
In addition, the MDCI, RGA’s group supervisor, has organized a supervisory college comprised of insurance regulators of the major jurisdictions in which RGA has established insurance branches and subsidiaries. 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. While the supervisory college has the ability to impose limitations on the activities of the insurance subsidiaries of RGA, particularly since RGA has been designated by its group supervisor as an Internationally Active Insurance Group (“IAIG”), no such limitations have been imposed to date. The existence of the supervisory college generally helps regulators understand RGA’s business to a greater degree and encourages a more global view by RGA of its own regulation.
RGA’s insurance 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 to do business, or accredited. To date, none of the regulators’ reports related to the Company’s periodic examinations have contained material adverse findings.
Although some of the rates and policy terms of U.S. direct insurance agreements are regulated by state insurance departments, the rates, policy terms, and conditions of reinsurance agreements generally are not subject to regulation by any regulatory authority, which is also true outside of the U.S. In the U.S., however, the NAIC Model Law on Credit for Reinsurance, which has been adopted in most states, including Missouri, imposes certain requirements for an insurer to take reserve credit for risk ceded to a reinsurer. 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”. Otherwise, the reinsurer must post security for reserves transferred to the reinsurer in the form of letters of credit or assets placed in trust. Insurers ceding business to reciprocal jurisdiction reinsurers are permitted to take reserve credit without the reinsurer having to establish security. 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 (with limited exclusions for reinsurance written on either a yearly renewable term or non-proportional reinsurance basis). These requirements include bona fide risk transfer, an insolvency clause, written agreements, and filing of reinsurance agreements involving in business, among other things. Outside of the U.S., rules for reinsurance and requirements for minimum risk transfer are less specific and are less likely to be published as rules, but nevertheless standards can be imposed to varying extents.
U.S. 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 term life products. The reserve levels required under Regulation XXX are normally in excess of reserves required under GAAP.
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In situations where primary insurers have reinsured business to reinsurers that are unlicensed and unaccredited in the U.S., the reinsurer must provide collateral equal to its reinsurance reserves in order for the ceding company to receive statutory financial statement credit. Reinsurers have historically utilized letters of credit for the benefit of the ceding company, 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 exists for reinsurance ceded to reciprocal jurisdiction reinsurers.
RGA Reinsurance is the primary subsidiary of the Company subject to Regulation XXX. In order to manage the effect of Regulation XXX on its statutory financial statements, RGA Reinsurance has retroceded a majority of Regulation XXX reserves to unaffiliated and affiliated unlicensed reinsurers and special purpose reinsurers, or captives. RGA Reinsurance’s statutory capital may be significantly reduced if the unaffiliated or affiliated reinsurer is unable to provide the required collateral to support RGA Reinsurance’s statutory reserve credits and RGA Reinsurance cannot find an alternative source for the collateral. The NAIC has requirements for life insurers using special purpose reinsurers. Current standards addressing the use of captive reinsurers allow captives organized prior to 2016 to continue in accordance with their currently approved plans. State insurance regulators that regulate domestic insurance companies have placed additional restrictions on the use captive reinsurers established after 2015, which may increase costs and add complexity. While RGA Reinsurance’s reserve financing arrangements using special purpose reinsurers or “captive reinsurers” are permitted, the limitations imposed upon such arrangements following 2016 do limit RGA Reinsurance’s ability to utilize captive reinsurers to finance reserve growth related to future business. 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 if it is to effectively utilize captive reinsurers in support of its reserve financing.
Based on the growth of the Company’s business and the pattern of reserve levels under Regulation XXX associated with term life business and other statutory reserve requirements, the amount of ceded reserve credits is expected to grow, albeit, with the implementation of principles-based reserves in the U.S., reserve growth has proceeded at slower rates than in the immediate past. This growth will continue to require the Company to retrocede business to affiliated or unaffiliated parties, to obtain additional letters of credit, put additional assets in trust, or utilize other funding mechanisms to support reserve credits. If the Company is unable to support the reserve credits, the regulatory capital levels of several of its subsidiaries may be significantly reduced, while the regulatory capital requirements for these subsidiaries would not change. The reduction in regulatory capital could affect the Company’s ability to write new business and retain existing business.
Affiliated captives are commonly used in the insurance industry to help manage statutory reserve and collateral requirements and are often domiciled in the same state as the insurance company that sponsors the captive. The NAIC has analyzed the insurance industry’s use of affiliated captive reinsurers to satisfy certain reserve requirements and has adopted measures to promote uniformity in both the approval and supervision of such reinsurers. Current standards addressing the use of captive reinsurers allow captives organized prior to 2016 to continue in accordance with their currently approved plans. Standards imposed upon the use of captive insurers for transactions after 2015 increase costs and add complexity to the use of captive insurers. Additionally, regulators continue to examine the use of captive and similar special purpose reinsurers by insurers in regard to the reinsurance of business that is asset-intensive by its nature. As a result, the Company 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.
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 the MDCI. These designations, which are periodically reviewed for renewal, allow certain of the Company’s U.S. domiciled operating company subsidiaries to retrocede business to RGA Americas in lieu of using captives for collateral requirements. Beginning in 2017, the NAIC approved principles-based reserving (“PBR”) for U.S. insurers. The Company adopted PBR in 2020, and PBR reserves are determined based on the terms of the reinsurance agreement which may differ from those of the direct policies.
Reinsurers may place assets in trust to satisfy collateral requirements for certain treaties. In addition, the Company holds securities in trust to satisfy collateral requirements under certain third-party reinsurance treaties. Under certain conditions in some treaties, the Company may be obligated to move reinsurance from one subsidiary of RGA to another subsidiary, post additional collateral for the ceding insurer or allow the ceding insurer to cancel the reinsurance. 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. If the Company is ever required to perform under these obligations, the risk to the consolidated company under the reinsurance treaties would not change; however, additional capital may be required due to the change in jurisdiction of the subsidiary reinsuring the business and may create a strain on liquidity, possibly causing a reduction in dividend payments or hampering the Company’s ability to write new business or retain existing business. In the event that a treaty is , the future profits related to the treaty may be .
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RGA Reinsurance, Aurora National, Chesterfield Re, Rockwood Re, Castlewood Re and RGA Life and Annuity prepare statutory financial statements in conformity with accounting practices prescribed or permitted by the State of Missouri. The state of Missouri requires 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 Company’s non-U.S. subsidiaries are subject to the regulations and reporting requirements of their respective countries of domicile.
Capital Requirements
Risk-Based Capital (“RBC”) guidelines promulgated by the NAIC are applicable to RGA Reinsurance, RGA Life and Annuity, Aurora National, and Chesterfield Re, and identify minimum capital requirements based upon business levels and asset mix. These subsidiaries maintain capital levels in excess of the amounts required by the applicable guidelines. Rockwood Re and Castlewood Re’s capital requirements are determined solely by their licensing orders issued by the MDCI and are not subject to the RBC guidelines. As to RGA Reinsurance, RGA Life and Annuity, Aurora National and Chesterfield Re, a decline in the RBC of one or more of the Company’s U.S. insurers can cause the appearance of less capitalization in its U.S. insurers, individually, or when considered as a group.
RGA, as a U.S.-based insurance group, annually files an annual Group Capital Calculation (“GCC”) with the MDCI. The GCC is currently 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 as an IAIG by the group supervisor. The Company cannot currently predict the effect that any proposed or future group capital standard will have on its financial condition or operations or the financial condition or operations of its subsidiaries.
Regulations in international jurisdictions also require certain minimum capital levels and subject the companies operating in such jurisdictions to oversight by the applicable regulatory bodies. RGA’s subsidiaries meet the minimum capital requirements in their respective jurisdictions. In December 2024, the International Association of Insurance Supervisors (“IAIS”) found that the U.S.’s aggregation method, utilized in the GCC, would produce comparable outcomes to those produced by the IAIS’ Insurance Capital Standard, thus obviating the need for RGA to calculate the Insurance Capital Standard in addition to the GCC. As a result of this finding, RGA is not expected to be required to calculate the Insurance Capital Standard in the future. The Insurance Capital Standard, nevertheless, is a model for capital standards and while the Insurance Capital Standard is 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. 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.
Insurance Holding Company Regulations
RGA Reinsurance, Aurora National, Chesterfield Re and RGA Life and Annuity are subject to regulation under the insurance and insurance holding company statutes of Missouri. The Missouri insurance holding company laws and regulations generally require insurance subsidiaries of insurance holding companies to register and file with the MDCI certain reports describing, among other information, capital structure, ownership, financial condition, certain intercompany transactions, and general business operations. The insurance holding company statutes and regulations also require prior approval of, or in certain circumstances, prior notice to the home state regulator of, certain material intercompany transfers of assets, as well as certain transactions between insurance companies, their parent companies and affiliates.
Under current Missouri insurance laws and regulations, no person may acquire any voting security or security convertible into a voting security of an insurance holding company, such as RGA, if as a result of the acquisition such person would “control” the insurance holding company. “Control” is presumed to exist under Missouri law if a person directly or indirectly owns or controls 10% or more of the voting securities of another person. Changes in control of an insurer are not permitted under Missouri law unless: (i) certain filings are made with the MDCI as the home state regulator, (ii) certain requirements are met, including a public hearing, and (iii) approval or exemption is granted by the MDCI. Additionally, revisions to the insurance holding company regulations of Missouri require increased disclosure to regulators of matters within the RGA group of companies.
Restrictions on Dividends and Distributions
Missouri law, applicable to RGA Life and Annuity and its subsidiaries, RGA Reinsurance, Aurora National 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. Any proposed dividend in excess of this amount is considered an “extraordinary dividend” and may not be paid until it has been approved, or a 30-day waiting period has passed during which it has not been disapproved, by the Director of the MDCI. Additionally, dividends may be paid only to the extent that the insurer has unassigned surplus (as
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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. See Note 16 – “Financial Condition and Net Income on a Statutory Basis – Significant Subsidiaries” in the Notes to Consolidated Financial Statements for additional information on the Company’s dividend restrictions.
In contrast to the Missouri Insurance Holding Company Act, the NAIC Model Insurance Holding Company System Regulatory Act defines an extraordinary dividend as a dividend or distribution, that together with dividends or distributions paid during the preceding twelve months exceeds the lesser of (i) 10% of statutory capital and surplus as of the preceding December 31, or (ii) statutory net gain from operations for the preceding calendar year. The Company is unable to predict whether, when, or if, Missouri will enact a new regulation for extraordinary dividends.
Missouri insurance laws and regulations also require that the statutory surplus of Chesterfield Re, Aurora National, RGA Life and Annuity and RGA Reinsurance following any dividend or distribution be reasonable in relation to their outstanding liabilities and adequate to meet their financial needs. The Director of the MDCI may call for a rescission of the payment of a dividend or distribution by these entities that would cause their statutory surplus to be inadequate under the standards of the Missouri insurance regulations.
Dividend payments from non-U.S. operations are subject to similar restrictions established by local regulators. The non-U.S. regulatory regimes also commonly limit the dividend payments to the parent to a portion of the prior year’s statutory income, as determined by the local accounting principles. The regulators of the Company’s non-U.S. operations may also limit or prohibit profit repatriations or other transfers of funds to the U.S. if such transfers are deemed to be detrimental to the solvency or financial strength of the non-U.S. operations, or for other reasons. Most of the non-U.S. operating subsidiaries are second tier subsidiaries that are owned by various non-U.S. holding companies. The capital and rating considerations applicable to the first tier subsidiaries may also impact the dividends paid to RGA.
Default or Liquidation
In the event that RGA defaults on any of its debt or other obligations, or becomes the subject of bankruptcy, liquidation, or reorganization proceedings, the creditors and shareholders of RGA will have no right to proceed against the assets of any of the subsidiaries of RGA. If any of RGA’s insurance subsidiaries were to be liquidated or dissolved, the liquidation or dissolution would be conducted in accordance with the rules and regulations of the appropriate governing body in the state or country of the subsidiary’s domicile. The creditors of any such company would be entitled to payment in full from such assets before RGA, as a direct or indirect shareholder, would be entitled to receive any distributions or other payments from the remaining assets of the liquidated or dissolved subsidiary.
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. Department of the Treasury has negotiated a “covered agreement” with the European Union, as well as a similar “covered agreement” with the United Kingdom (“U.K.”) (together, the “Covered Agreements”). 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 provide for an elimination of the collateral that has to be posted by reinsurers based in the European Union, U.K. 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 U.K. 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. 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.
Insurers that are designated systemically important can be subject to the imposition of an additional layer of regulation over existing state regulation. No RGA entity has been deemed to be systemically important; however, if RGA were to be designated as systemically important, it would be subject to scrutiny by the Federal Reserve. Moreover, if insurers reinsured by RGA were to be designated as systemically important, the reinsurance programs that RGA maintains with those insurers could be subject to scrutiny 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 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.
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With the potential regulation of some U.S. domiciled insurers by the U.S. government, it is possible that the scope of the federal government’s ability to regulate insurers and reinsurers will be expanded. 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. A shift in regulation from the state to the federal level may bring into question the continued validity of the McCarran-Ferguson Act, which exempts the “business of insurance” from most federal laws, including anti-trust laws. With the McCarran-Ferguson Act exemption for the business of insurance, a reinsurer may set rate, underwriting and claims handling standards for its ceding company clients to follow.
Environmental Considerations Related to Real Property Ownership, Development and Mortgage Investment
Federal, state and local environmental laws and regulations apply to the Company’s ownership and operation of real property. Inherent in owning and operating real property are the risks of hidden environmental liabilities and the costs of any required clean-up. Under the laws of certain states, contamination of a property may give rise to a lien on the property to secure recovery of the costs of clean-up. In several states, this lien has priority over the lien of an existing mortgage against such property. In addition, in some states and under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), the Company may be liable, in certain circumstances, as an “owner” or “operator,” for costs of cleaning-up releases or threatened releases of hazardous substances at a property mortgaged to it. The Company also risks environmental liability when it forecloses on a property mortgaged to it, although federal legislation provides for a safe harbor from CERCLA liability for secured lenders that foreclose and sell the mortgaged real estate, provided that certain requirements are met. However, there are circumstances in which actions taken could still expose the Company to CERCLA liability. Application of various other federal and state environmental laws could also result in the imposition of liability on the Company for costs associated with environmental .
In addition to conducting an environmental assessment while underwriting mortgage loans, the Company routinely conducts environmental assessments prior to taking title to real estate through foreclosure on real estate collateralizing mortgages that it holds. Although unexpected environmental liabilities can always arise, the Company seeks to minimize this risk by undertaking these environmental assessments and complying with its internal procedures, and as a result, the Company believes that any costs associated with compliance with environmental laws and regulations or any clean-up of properties would not have a material adverse effect on the Company’s results of operations.
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. Insurers are now required in some jurisdictions to test underwriting models for bias. Other current ESG initiatives are aimed at reviewing the investment portfolios of insurers and requiring discussions regarding ESG topics between insurers and their regulators. It is possible that rules governing insurance underwriting and factors utilized by insurers in the selection of risks may be altered in the future in a way that impacts the profitability of RGA’s business. The extent to which ESG concerns may impact RGA in the future is uncertain, but RGA has incorporated sustainability factors and goals into its current strategic plan, operations, and risk assessment processes.
Unfair Discrimination and Bias Regulation
Federal and state regulators are increasing their scrutiny of insurers’ underwriting and pricing practices, including the use of artificial intelligence, predictive models, and non-traditional data sources due to concerns that such practices may create unfair discrimination or disparate impacts on certain groups. Regulatory standards in this area are rapidly evolving and may be subject to differing interpretations. As a result, the Company may be required to change the Company’s models, data sources, or underwriting practices, incur significant compliance and governance costs, or face regulatory examinations, investigations, enforcement actions, penalties, litigation, or reputational harm, any of which could adversely affect the Company’s business, financial condition, and results of operations.
International Regulation
RGA’s international insurance operations are principally regulated by insurance regulatory authorities in the jurisdictions in which they are located or operate branch offices. 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. Periodic examinations of the insurance company books and records, financial reporting requirements, risk management processes and governance procedures are among the techniques used by regulators to supervise RGA’s non-U.S. insurance businesses. The regulators of RGA’s non-U.S. insurance companies are also invited to be part of the supervisory college held by the MDCI, RGA’s group supervisor.
Bermuda’s Insurance Act 1978 (the “Bermuda Insurance Act”) distinguishes between insurers carrying on long-term business, insurers carrying on special purpose business and insurers carrying on general business. There are five classifications
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of insurers carrying on long-term business, ranging from Class A insurers to Class E 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. The Company’s subsidiaries domiciled in Bermuda are licensed for long-term business and are classified as Class E insurers and are therefore subject to extensive regulation and supervision by the BMA. Such regulation includes rules regarding anti-corruption, compliance with internationals sanctions regimes, foreign asset control, corporate governance, financial conduct and cybersecurity in addition to prudential insurance regulation. 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.
The Company’s Bermuda subsidiaries, as Class E insurers, file annual statutory financial statements and annual audited financial statements prepared in accordance with accounting principles generally accepted in the U.S. within four months of the end of each fiscal year, unless such deadline is specifically extended. The Bermuda Insurance Act prescribes rules for the preparation of the statutory financial statements. In addition, the Company’s Bermuda subsidiaries are required to file with the BMA a capital and solvency return along with its annual statutory financial return, as well as quarterly financial returns.
The Company’s Bermuda subsidiaries must at all times maintain a minimum solvency margin (“MSM”) and an enhanced capital requirement (“ECR”) in accordance with the provisions of the Bermuda Insurance Act. If either the minimum MSM or ECR is not met, then the Bermuda Insurance Act mandates certain actions and filings with the BMA, including the filing of a written report detailing the circumstances giving rise to the failure and the manner and time within which the insurer intends to rectify the failure. The BMA has embedded an economic balance sheet (“EBS”) framework as part of the Bermuda Solvency Capital Requirement (“BSCR”) that forms the basis for an insurer’s ECR. As Class E insurers, the Company’s Bermuda subsidiaries’ ECR is established by reference to the Class E BSCR model, which provides a risk-based method for determining an insurer’s capital requirements by taking into account the risk characteristics of different aspects of the insurer’s business. The BSCR formula establishes capital requirements for different categories of risk such as fixed income investment risk, equity investment risk, long-term interest rate/liquidity risk, currency risk, concentration risk, credit risk, operational risk and nine categories of long-term insurance risk. Depending on the risk category, the capital requirement is either determined by applying shocks or by applying prescribed factors, where such shocks and factors were developed by the BMA and were calibrated at 99% Tail Value-at-Risk (“TVaR”) over a one-year time horizon.
Under the Bermuda Insurance Act, the Company’s Bermuda subsidiaries are prohibited from declaring or paying a dividend if they are not meeting their ECR or MSM requirements or if the declaration or payment of the dividend would cause such a breach. Failing to meet the MSM requirement on the last day of any financial year prohibits a company from declaring or paying any dividends during the next financial year without the approval of the BMA. Additional actions and filings may be required before a company can declare and pay a dividend depending on its prior year statutory capital and surplus. The restrictions on declaring or paying dividends and distributions under the Bermuda Insurance Act are in addition to those under Bermuda’s Companies Act 1981 (the “Companies Act”). Under the Companies Act, the Company’s Bermuda subsidiaries may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that: (1) the company is, or would after the payment be, unable to pay its liabilities as they become due, or (2) the realizable value of the company’s assets would thereby be less than its liabilities. Additionally, the BMA oversees reinsurance transactions, including agreements involving the reinsurance of in-force business which are generally subject to advance review and prior approval, particularly where such transactions involve asset-intensive business.
The Company’s subsidiaries domiciled in Barbados are subject to regulation and supervision by the Financial Services Commission in Barbados.
Economic substance requirements and enhanced prudential regulation rules adopted in Bermuda in recent years place additional requirements, including operational and reporting requirements, on the Company’s subsidiaries domiciled in that country in order to demonstrate purpose, governance, and an increase in substantive activities than previously required. Similar requirements in Barbados may also require the Company’s subsidiaries domiciled in Barbados to evidence aspects of their operations and governance in a more structured manner than was historically required.
Much like the adoption of the Dodd-Frank Act in the U.S., regulators around the world continue to consider ways to avoid a recurrence of the causes of the 2008 – 2009 financial crisis. A group leading this effort is the Financial Stability Board (“FSB”). The FSB consists of representatives of national financial authorities of the G20 nations. The G20, the FSB and related governmental bodies have developed proposals to address issues such as group supervision, capital and solvency standards, systemic economic risk and corporate governance, including executive compensation and many other related issues associated with the financial crisis. At the direction of the FSB, the IAIS has developed a model framework for the supervision of IAIGs that contemplates “group-wide supervision” across national boundaries. The GCC has been accepted as the group-wide risk and solvency assessment to monitor and manage RGA’s overall solvency. RGA cannot predict what additional capital requirements,
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compliance costs or other burdens may be imposed on it in the future, including the potential for inconsistent or conflicting regulation of the RGA group of companies.
Additionally, RGA International, operating in the European Economic Area (“EEA”), is subject to the Solvency II measures developed by the European Insurance and Occupational Pensions Authority and will be required to abide by the evolving risk management practices, capital standards and disclosure requirements of the Solvency II framework. Additionally, the Company’s clients located in the EEA also abide by these standards in operating their insurance businesses, including the management of their ceded reinsurance. 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 influence future regulatory structures of countries outside of the EEA, including Japan. Influences of the Solvency II-type framework are already present in the insurance regulation of Bermuda and China and currently influence the solvency measures imposed upon RGA Global and RGA Americas.
Additionally, some countries limit the amount of insurance business that can be ceded to foreign reinsurers. Requirements of this type are proposed from time-to-time in developing markets. 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.
Privacy and Cybersecurity Regulation
Various jurisdictions in which the Company’s subsidiaries and their clients operate have established laws protecting the privacy and handling of consumers’ personal data. The area of cybersecurity has also come under increased scrutiny from insurance regulators. These laws and regulations vary country to country and state to state, but they generally require the establishment of programs related to personal data processing, including but not limited to programs to detect and prevent unauthorized access to personal data. They also may require the Company, among other things, to notify client insurers or individuals of any security breach involving protected data, and to provide individuals with data subject rights, such as the right to access personal data and with the right to be forgotten.
In the U.S., the NAIC adopted the Insurance Data Security Model Law, which establishes standards for data security and for the investigation of and notification of insurance regulators of cybersecurity events involving unauthorized access to certain private information belonging to insureds. To date, this Model Law has been adopted by twenty eight jurisdictions. The Company expects further adoption in the future or potential revision of the Model Law so that it may be adopted in a broader number of states. The cybersecurity regulation in New York is applicable to Aurora National and many of the Company’s clients, and requires the Company to demonstrate the existence and soundness of its cybersecurity program to those clients. Various U.S. state privacy laws, such as the California Consumer Privacy Act and regulations similar to the New York cybersecurity regulation, as well as measures similar to the NAIC’s Insurance Data Security Model Law, are likely to be adopted by more U.S. states in the near future, if not by the U.S. federal government.
In addition, privacy and cybersecurity laws and regulations in many European and Asian countries restrict RGA’s ability to transfer data and impose other requirements on holders of data. In Europe, the General Data Protection Regulation (“GDPR”), which establishes uniform data privacy laws across the European Union (“EU”) is effective for all EU member states and is extraterritorial in that it applies to EU entities, as well as entities established in the EU, that offer goods or services to data subjects in the EU or monitor consumer behavior that takes place in the EU. The GDPR anticipates the processing of data for reinsurance and other purposes and applies standards and rules that covered entities must establish and monitor with respect to such processing and use. Many of the restrictions enacted by jurisdictions outside of the EU either do not anticipate the processing of data for reinsurance purposes at all or place costly restrictions on the ability of a reinsurer to service its business by requiring processing to be done within the borders of the country in which the insured consumer resides. 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. Credit ratings, sometimes referred to as senior debt ratings, represent the opinions of rating agencies regarding RGA’s ability to meet the terms of its debt obligations. Each rating should be evaluated independently of any other rating. Ratings are not a recommendation to buy, sell or hold any security, contract or policy. 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”) and A.M. Best Company (“A.M. Best”) ratings listed below are on stable outlook, and the Moody’s Ratings (“Moody’s”) ratings listed below are on negative outlook.
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Insurer Financial Strength Ratings
A.M. Best (1)
Moody’s (2)
RGA Reinsurance Company
RGA Life and Annuity Insurance Company
RGA Life Reinsurance Company of Canada
RGA International Reinsurance Company dac
RGA Global Reinsurance Company, Ltd.
RGA Reinsurance Company of Australia Limited
RGA Reinsurance Company (Barbados) Ltd.
RGA Americas Reinsurance Company, Ltd.
RGA Worldwide Reinsurance Company, Ltd.
Aurora National Life Assurance Company
Omnilife Insurance Company Limited
Senior Debt Rating
RGA
Baal
(1) An A.M. 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).
(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 that 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).
(3) An S&P insurer financial strength rating of “AA-” (very strong) is the fourth highest rating out of twenty-two possible ratings. According to S&P’s rating scale, a rating of “AA-” means that, in S&P’s opinion, the insurer has very strong financial security characteristics. 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 ability to write reinsurance partially depends on a reinsurer’s financial condition and its issuer financial strength ratings. These ratings are based on a company’s ability to pay policyholder obligations and are not directed toward the protection of investors. Credit ratings are important for the Company’s ability to raise capital through the issuance of debt and for the cost of such financing. A ratings downgrade could adversely affect the Company’s ability to compete. See Item 1A – “Risk Factors” for more on the potential effects of a ratings downgrade.
Underwriting
Automatic . The Company’s management determines whether to write automatic reinsurance business by considering many factors, including the types of risks to be covered; the ceding company’s retention limit and binding authority, product, and pricing assumptions; and the ceding company’s underwriting standards, financial strength and distribution systems. For automatic business, the Company ensures that the underwriting standards, procedures and guidelines of its ceding companies are priced appropriately and consistent with the Company’s expectations. To this end, the Company conducts periodic reviews of the ceding companies’ underwriting and claims personnel and procedures.
Facultative. The Company has developed underwriting policies, procedures and standards with the objective of controlling the quality of business written as well as its pricing. The Company’s underwriting process emphasizes close collaboration between its underwriting, actuarial, and administration departments. Management periodically updates these underwriting policies, procedures, and standards to account for changing industry conditions, market developments, and changes occurring in the field of medical technology. These policies, procedures, and standards are documented in electronic underwriting manuals made available to all the Company’s underwriters. The Company regularly performs internal reviews of both its underwriters and underwriting process.
The Company’s management determines whether to accept facultative reinsurance business on a prospective insured by reviewing the application, medical information and other underwriting information appropriate to the age of the prospective insured and the face amount of the application. 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. 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. Biometric assumptions are based primarily on the Company’s own mortality, morbidity and persistency experience, reflecting industry and client-specific
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experience. Economic and asset-related pricing assumptions are based on current and long-term market conditions and are developed by actuarial and investment personnel with appropriate experience and expertise. The Company’s view of short- and long-term risks are reflected in pricing consistent with its internal capital model. For transactional business with material day-one invested assets, diligence on the expected asset portfolio that is reflected in the pricing assumption. 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. Management has established a high-level oversight of the processes and results of these activities, which includes peer reviews in every market as well as centralized procedures and processes for reviewing and auditing pricing activities.
Operations
The Company’s business has been primarily obtained directly, rather than through brokers. The Company has an experienced sales and marketing staff that works to provide responsive service and maintain existing relationships.
The Company’s administration, auditing, valuation and finance departments are responsible for treaty compliance auditing, financial analysis of results, generation of internal management reports, and periodic audits of administrative and underwriting practices. A significant effort is focused on periodic audits of administrative and underwriting practices, and treaty compliance of clients.
The Company’s claims departments review and verify reinsurance claims, obtain the information necessary to evaluate claims, and arrange for timely claims payments. Claims are subjected to a detailed review process to ensure that the risk was properly ceded, the claim complies with the contract provisions, and the ceding company is current in the payment of reinsurance premiums to the Company. In addition, the claims departments monitor both specific claims and the overall claims handling procedures of ceding companies.
Customer Base
The Company provides reinsurance solutions primarily to the largest life insurance companies in the world. In 2025, excluding premiums from single premium pension risk transfer transactions, the Company’s five largest clients generated approximately $3.9 billion or 21% of the Company’s 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 46% 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. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
Competition
New reinsurance opportunities continue to be highly price competitive; however, companies that consistently win business are financially strong, provide flexible terms and conditions, have a positive reputation, deliver excellent service, and demonstrate execution certainty and a long-term commitment to the business underwritten. The Company competes globally with other reinsurance companies, traditional insurance providers, private equity firms and other financial services companies.
Human Capital Resources
The Company continuously strives to fulfill its purpose: to make financial protection accessible to all . The Company’s global team of approximately 4,300 employees as of December 31, 2025, 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. Driving the Company’s success is a shared commitment to pursue work that matters, to serve an industry with a strong social mission, and to create sustainable long-term value for all its stakeholders.
The Company’s Culture
The Company’s people, the way they work, and the culture they cultivate are all key differentiators. The Company fosters a purpose-driven culture of care and concern, with client-centricity, trustworthiness, innovation, inclusivity and accountability. Teamwork and mutual support are highly valued under our core values and collaborative environment. Employees are encouraged to work together across departments and regions to achieve common goals and drive the Company's growth and continued success. Innovation is at the heart of RGA’s culture. The Company is committed to continuous improvement, high-performance, execution excellence and encourages employees to think creatively and explore new ideas. This innovative mindset helps the Company stay ahead in the competitive reinsurance industry.
The Company is dedicated to the professional growth and development of its employees, offering various learning options, mentorship opportunities, and career development resources that encourage continuous learning to help employees reach their full potential. The Company strives to create a workplace where everyone feels valued and respected. This inclusive
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culture helps attract and retain a diverse workforce, which is essential for driving innovation and growth in all of the markets in which we operate.
Talent Attraction, Development and Retention
As a global reinsurer, the Company’s continued growth and vitality are built on attracting, developing and retaining exceptional, world-class talent. The Company prides itself on creating a positive environment and experience for all employees, while remaining disciplined in its pursuit of achieving enterprise goals to enable execution of our business strategy and continue offering innovative solutions for its clients.
The Company prioritizes the development and growth of its employees, with development being central to the performance management approach. New global values and competencies introduced in 2023 preceded the 2024 launch of a refreshed performance management approach that emphasizes continuous coaching and quality feedback to inspire and motivate a higher level of performance across the enterprise. This more meaningful approach aligns individual career conversations and development plans with the Company’s enterprise strategy, fostering a purpose-driven culture of client-centricity, trustworthiness, innovation, inclusivity and accountability.
To retain top talent, the Company offers competitive rewards packages and ensures employees feel valued and respected. Their retention strategy focuses on aligning rewards with demonstrated performance, contributions and impact, which helps maintain high employee engagement and supports the execution of their enterprise strategy. Additionally, the Company offers ample benefits to support wellbeing broadly for employees and their families.
The Company’s approach is designed to attract the best talent, foster and support their development, and inspire exceptional performance throughout the Company, creating a sense of belonging and purpose for all employees.
Compensation, Benefits and Pay Equity
The Company is committed to fostering a 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 Company’s compensation programs, comprised of salary together with short and long-term incentives, strike a balance between external market competitiveness and internal equity, balancing global consistency with local market variations. This balance is achieved through consistent application of program standards on a global basis, while targeting compensation at competitive levels in the markets where the Company competes for talent.
The Company’s benefit programs are an integral part of its employees’ total rewards package. Benefits are aligned with local market practices and include healthcare, retirement and savings, education assistance, flexible work programs, employee assistance programs, wellness programs, and parental leave programs, amongst others.
The Company has long been committed to ensuring equal pay for equal work. The annual pay equity study, conducted by a third-party consultant, considered the average pay of females to males in comparable roles. The study analyzed the pay practices of all U.S. and non-U.S. employees in countries with more than 50 employees, representing approximately 95.6% of the Company’s employees worldwide, comparing the average base salary, base salary plus target bonus, and base salary plus target bonus plus target long-term incentive (where applicable) of females to males in comparable roles. Each year the results vary slightly due to changes in the employee population. Results decreased slightly this year with women paid on average 98.1% of what men are paid for comparable jobs for base salary, 97.9% for base salary plus target bonus and 97.9% for base salary plus target bonus plus target long-term incentive basis. In addition, in the U.S., when using the same methodology of comparable roles, the average non-Caucasian to Caucasian pay ratio was 100.9% for comparable jobs for base salary which represented a slight decrease, and 101.4% for both base salary plus target bonus and 101.3% base salary plus target bonus plus target long-term incentives which remained stable from the previous year.
The Company is committed to gender and racial pay equity and will continue to review pay equity annually, and take action as required, to ensure its compensation programs remain aligned with its commitment to diversity, equity and inclusion. Ensuring the Company’s compensation practices are equitable is imperative to maintain the Company’s culture and to ensure fair treatment of its employees.
Corporate Citizenship and Inclusion
The Company believes that creating long-term value for its stakeholders implicitly requires enacting and executing sustainable business practices and strategies while delivering competitive returns. The Company strives to govern itself in a sustainable manner that recognizes the need for strong governance, effective management systems and robust controls alongside its long-term operational goals and strategies. The Company understands that it has a responsibility to monitor and control its ecological and societal impact in addition to its obligations regarding corporate strategy, risks, opportunities and performance.
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The Company strives to cultivate an inclusive environment in which diverse experiences and perspectives are welcomed and employees feel comfortable and encouraged to share their viewpoints, ideas and solutions. The Company’s inclusion initiatives are focused in four areas: (i) fostering diverse talent; (ii) advancing diversity and inclusion in the industry and communities where the Company operates; (iii) establishing accountability throughout the Company; and (iv) building an inclusive workplace. Additionally, employees are offered a variety of development experiences to strengthen dignity and respect in the workplace. Training offerings include Unconscious Bias, Communicating with Dignity and Fearless Futures. The Company has integrated training into its leadership development offerings and has expanded educational resources to include Growth Mindset and Mitigating Bias in Interviews.
The Company’s Global Inclusion Council and Global Employee Resource Groups proactively leverage diverse teams around the world and serve as thought leaders for the Company to advance workplace practices, benefits, and programs. These include caregiver benefits, employee wellbeing, mental health advocacy and career development for employees. They work to support the Company’s recruitment plans, offer community for variety of affinity groups, and contribute to charitable giving and volunteerism. Importantly, these Councils foster unity, celebration and engagement across our globally distributed workforce.
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. RGA’s Sustainability Report can be found in the Company’s Investor section of its website at www.rgare.com. The contents of the Company’s 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 that the Company files with the SEC.
Segments
The Company obtains substantially all of its revenues through reinsurance agreements that cover a portfolio of life and health insurance products, including term life, credit life, universal life, whole life, group life and health, joint and last survivor insurance, critical illness, disability, longevity as well as asset-intensive (e.g., annuities), financial reinsurance and other capital motivated solutions. Generally, the Company, through various subsidiaries, has provided reinsurance for mortality, morbidity, lapse and investment-related risks associated with such products. With respect to asset-intensive products, the Company has also provided reinsurance for investment-related risks.
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.
U.S. and Latin America Operations
The U.S. and Latin America operations includes traditional life and health reinsurance, asset-intensive transactions, financial reinsurance, a funding agreement backed note program and other capital motivated solutions, primarily to U.S. life insurance companies.
Traditional Reinsurance
The U.S. and Latin America Traditional segment provides individual and group life and health reinsurance, including long-term care, to domestic clients for a variety of products through yearly renewable term agreements, coinsurance, and modified coinsurance. This business has been accepted under many different rate scales, with rates often tailored to suit the underlying product and the needs of the ceding company. Premiums typically vary for smokers and non-smokers, males and females, and may include a preferred underwriting class discount. Reinsurance premiums are paid in accordance with the treaty, regardless of the premium mode for the underlying primary insurance. This business is made up of facultative and automatic treaty business.
Automatic business is generated pursuant to treaties that generally require the underlying policies to meet the ceding company’s underwriting criteria, although in certain cases such policies may be rated substandard. In contrast to facultative reinsurance, reinsurers do not engage in underwriting assessments of each risk assumed through an automatic treaty.
As the Company does not apply its underwriting standards to each policy ceded to it under automatic treaties, the U.S. and Latin America operations generally require ceding companies to retain a portion of the business written on an automatic basis, thereby increasing the ceding companies’ incentives to underwrite risks with due care and, when appropriate, to contest claims diligently.
The U.S. and Latin America facultative reinsurance operation involves the assessment of the risks inherent in (i) multiple impairments, such as heart disease, high blood pressure, and diabetes; (ii) cases involving large policy face amounts; and (iii) financial risk cases (i.e., cases involving policies disproportionately large in relation to the financial characteristics of the proposed insured). 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
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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.
Only a portion of approved facultative applications ultimately result in reinsurance, as applicants for impaired risk policies often submit applications to several primary insurers, which in turn seek facultative reinsurance from several reinsurers. Ultimately, only one insurance company and one reinsurer are likely to obtain the business. The Company tracks the percentage of declined and placed facultative applications on a client-by-client basis and generally works with clients to seek to maintain such percentages at levels deemed acceptable. As the Company applies its underwriting standards to each application submitted to it facultatively, it generally does not require ceding companies to retain a portion of the underlying risk when business is written on a facultative basis.
Financial Solutions – Asset-Intensive Transactions
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. 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.
The Company also provides guaranteed investment contracts to retirement plans that include investment-only, stable value wrap products. 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.
The Company primarily targets highly rated, financially secure companies as clients for asset-intensive business. These companies may wish to limit their own exposure to certain products or blocks of business. Ongoing asset/liability analysis is required for the management of asset-intensive business. The Company’s analysis is a cross discipline analysis between the Company’s underwriting, actuarial, investment and other departments throughout the organization and is completed in conjunction with an asset/liability analysis performed by the ceding companies.
The Company, working with partners, provides pension plan sponsors solutions that enable them to diversify and protect the benefits provided to the annuitants.
Financial Solutions – Capital Solutions
The Company’s U.S. and Latin America Capital Solutions operations assist ceding companies in meeting applicable regulatory requirements while enhancing their financial strength and regulatory surplus position. The Company assumes regulatory insurance liabilities from the ceding companies. In addition, the Company has committed to provide statutory reserve or asset support to third parties by funding loans or assuming real estate leases if certain defined events occur. Generally, such amounts are offset by receivables from ceding companies that are repaid by the future regulatory profits from the reinsured block of business. The Company structures its financial reinsurance and other capital solution transactions so that the projected future profits of the underlying reinsured business significantly exceed the amount of regulatory surplus provided to the ceding company.
The Company primarily targets highly rated insurance companies for capital solutions business. A careful analysis is performed before providing any regulatory surplus enhancement to the ceding company. This analysis is intended to ensure that the Company understands the risks of the underlying insurance product and that the transaction has a high likelihood of being repaid through the future regulatory profits of the underlying business. If the future regulatory profits of the business are not sufficient to repay the Company or if the ceding company becomes financially distressed and is unable to make payments under the treaty, the Company may incur losses.
Financial Solutions – Funding Agreement Backed Note Program
The Company has a Funding Agreement Backed Note (“FABN”) program, which allows RGA Global Funding, a special-purpose, unaffiliated statutory trust, to offer its senior secured medium-term notes. The notes are underwritten and marketed by major investment banks’ broker-dealer operations and are sold to institutional investors. RGA Global Funding uses the net proceeds from each sale to purchase one or more funding agreements from the Company with matching interest and maturity payment terms. Similar to a guaranteed investment contract, the Company earns an investment spread between the investment earnings and the interest credited on the funding agreement liabilities.
Customer Base
In 2025, excluding premiums from single premium pension risk transfer transactions, the five largest clients generated approximately $2.6 billion or 28% of U.S. and Latin America operations’ gross premiums and other revenues. In addition, 53 other clients each generated annual gross premiums and other revenues of $25 million or more, and the aggregate gross
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premiums from these clients represented approximately 62% of U.S. and Latin America 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.
Canada Operations
The Canada operations market traditional life and health reinsurance and the reinsurance of asset-intensive products, primarily to Canadian life insurance companies.
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. Creditor insurance covers the outstanding balance on personal, mortgage or commercial loans in the event of death, disability or critical illness and is generally shorter in duration than individual life insurance.
The business is generally composed of facultative and automatic treaty business. Automatic business is generated pursuant to treaties that generally require the underlying policies to meet the ceding company’s underwriting criteria, although in certain cases such policies may be rated substandard. In contrast to facultative reinsurance, reinsurers do not engage in underwriting assessments of each risk assumed through an automatic treaty.
RGA Canada generally requires ceding companies to retain a portion of the business written on an automatic basis, thereby increasing the ceding companies’ incentives to underwrite risks with due care and, when appropriate, to contest claims diligently.
Facultative reinsurance involves the assessment of the risks from a medical and financial perspective. RGA Canada is recognized as a leader in facultative reinsurance, and this has served to maintain a strong market share on automatic business.
Financial Solutions
The Company’s Canada Financial Solutions operations primarily concentrates on the investment and longevity risk within underlying annuities and other investment oriented products. 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. Canada’s Financial Solutions operations also provide capital solutions to assist ceding companies in meeting applicable regulatory requirements while enhancing their financial strength and regulatory position.
The Company primarily targets highly rated, financially secure companies as clients for its financial solutions business. These companies may wish to limit their own exposure to certain products or blocks of business. Ongoing asset/liability analysis is required for the management of asset-intensive business. The Company’s analysis is a cross discipline analysis between the Company’s underwriting, actuarial, investment and other departments throughout the organization and is completed in conjunction with an asset/liability analysis performed by the ceding companies.
Customer Base
In 2025, the five largest clients generated approximately $921 million or 58% of Canada operations’ gross premiums and other revenues. In addition, 11 other clients each generated annual gross premiums and other revenues of $25 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.
Europe, Middle East and Africa Operations
EMEA operations serve clients from subsidiaries, licensed branch offices and/or representative offices primarily located in the U.K., Continental Europe, Middle East, and South Africa. EMEA’s office in the Middle East is located in the United Arab Emirates (“UAE”).
EMEA’s operations in the U.K., Continental Europe, South Africa and Middle East employ their own underwriting, actuarial, claims, pricing, accounting, marketing and administration staffs with additional support services provided by the Company’s staff in other geographical locations.
Traditional Reinsurance
The principal types of reinsurance for this segment include individual and group life and health, critical illness, disability and underwritten annuities. Traditional reinsurance in the U.K., South Africa, Italy and Germany consists
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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 qualify as reinsurance under U.S. GAAP, due to the low risk nature of the transactions and are reported in accordance with deposit accounting guidelines.
Customer Base
In 2025, the five largest clients generated approximately $1.6 billion or 45% of EMEA operations’ gross premiums and other revenues. In addition, 23 other clients each generated annual gross premiums and other revenues of $25 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 40% of EMEA operations’ gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
Asia Pacific Operations
The Asia Pacific operations serve clients from subsidiaries, licensed branch offices and/or representative offices throughout Asia and Australia.
The Asian offices provide full reinsurance services with additional support services provided by the Company’s staff in the U.S. and Canada. 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.
Traditional Reinsurance
The principal types of reinsurance for this segment written through yearly renewable term and coinsurance treaties include:
• Individual and group life and health;
• Critical illness, which provides a benefit in the event of the diagnosis of pre-defined critical illness;
• Disability, which provides income replacement benefits in the event the policyholder becomes disabled due to accident or illness and;
• Superannuation which is the Australian government mandated compulsory retirement savings program. Superannuation funds accumulate retirement funds for employees, and, in addition, typically offer life and disability insurance coverage.
Reinsurance agreements may be either facultative or automatic agreements covering primarily individual risks and, in some markets, group risks.
Financial Solutions
The Asia Pacific Financial Solutions segment includes financial reinsurance, asset-intensive and certain disability, and life and health blocks that contain material investment risks. Financial reinsurance assists ceding companies in meeting applicable regulatory requirements while enhancing their financial strength. Financial reinsurance transactions do not qualify as reinsurance under GAAP, due to the remote risk nature of the transactions and are reported in accordance with deposit accounting guidelines. Asset-intensive business for this segment primarily concentrates on the investment risk within underlying annuities and life insurance policies. 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 2025, the five largest clients generated approximately $1.8 billion or 46% of Asia Pacific operations’ gross premiums and other revenues. In addition, 27 other clients each generated annual gross premiums and other revenues of $25 million or more, and the aggregate gross premiums and other revenues from these clients represented approximately 39% of Asia Pacific operations’ gross premiums and other revenues. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.
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Corporate and Other
Corporate and Other revenues primarily include investment income from unallocated invested assets and service fees. 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 corporate overhead and executive costs, interest expense related to debt and service business expenses. Additionally, Corporate and Other includes results from the Company’s FABNs issued prior to January 1, 2025. Effective January 1, 2025, new FABN issuances are included in the U.S. Financial Solutions segment.
Financial Information About Foreign Operations
The Company’s foreign operations are primarily in Canada, Asia Pacific, EMEA and Latin America. Revenue, adjusted operating income (loss) before income taxes, attributable to these geographic regions are identified in Note 19 – “Segment Information” in the Notes to Consolidated Financial Statements. Although there are risks inherent to foreign operations, such as currency fluctuations and restrictions on the movement of funds, as described in Item 1A – “Risk Factors”, the Company’s financial position and results of operations have not been materially adversely affected thereby to date.
Available Information
Copies of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports are available free of charge through the Company’s website ( www.rgare.com ) as soon as reasonably practicable after the Company electronically files such reports with the Securities and Exchange Commission ( www.sec.gov ). Information provided on such websites does not constitute part of this Annual Report on Form 10-K.
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Item 1A. RISK FACTORS
In the Risk Factors below, we refer to the Company as “we,” “us,” or “our.” Investing in our securities involves certain risks. Any of the following risks could materially adversely affect our business, financial condition or results of operations. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Cautionary Note Regarding Forward-Looking Statements” in Item 7 below and the risks of our business described elsewhere in this Annual Report on Form 10-K. Many of these risks are interrelated and occur under similar business and economic conditions, and the occurrence of certain of them may in turn cause the emergence, or exacerbate the effect, of others. Such a combination could materially increase the severity of the impact on our business, liquidity, financial condition and results of operations.
Risks Related to Our Business
We make assumptions when pricing our business relating to mortality, morbidity, lapsation, investment returns, expenses and other factors, and significant deviations in experience compared to our initial expectations could negatively affect our financial condition and results of operations.
Our business exposes us to mortality, morbidity, lapse and other risks. Our risk analysis and underwriting processes are designed with the objective of controlling the quality of the business and establishing appropriate pricing for the risks we assume. Among other things, these processes rely heavily on our underwriting and due diligence, our analysis of mortality, longevity and morbidity trends, lapse rates, investment returns, and expenses and our understanding of medical impairments and their effect on mortality, longevity or morbidity.
We expect mortality, longevity, morbidity and lapse experience to fluctuate somewhat from period to period but believe that they should remain reasonably predictable over a period of many years. For example, mortality, longevity, morbidity or lapse experience that is less favorable than the rates that we used in pricing a reinsurance agreement may cause our net income to be less than otherwise expected because the premiums we receive for the risks we assume may not be sufficient to cover the claims and expected profit margin. Furthermore, even if the total benefits paid over the life of the contract do not exceed the expected amount, unexpected increases in the incidence of deaths or illness can cause us to pay more benefits in a given reporting period than expected, adversely affecting our net income in any particular reporting period.
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. 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.
We regularly review our reserves and associated assumptions as well as actual compared to expected experience as part of our ongoing assessment of our business performance and risks. If we determine that our reserves are insufficient to cover actual or expected policy and contract benefits and claims as a result of changes in experience, assumptions or otherwise, we would be required to increase our reserves and incur charges in the period in which our assumptions are updated. The impacts of assumption updates and variances from expected experience are reflected as future policy benefits remeasurement gains or losses, and may result in income statement volatility. Income statement volatility related to assumption updates and variances from expected experience may cause income statement volatility primarily in capped and floored cohorts.
Unfavorable assumption updates and variances from expected experience may be significant, and this could materially adversely affect our financial condition and results of operations and may require us to generate or fund additional capital in our businesses.
As discussed in more detail below, our financial condition and results of operations may also be adversely affected if our actual investment returns and expenses differ from our pricing and reserve assumptions. 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 materially from our pricing and reserve assumptions.
Our business, results of operations and financial condition have been, and may continue to be, adversely affected by epidemics and pandemics 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. 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. Any such event could have a material negative impact on the financial markets, potentially impacting the value and liquidity of our invested assets, access to capital markets and credit and the business of our clients. In addition, an epidemic or pandemic that affects our employees or
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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. 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.
A future epidemic, pandemic or an increase in the number of future COVID-19 cases may again impact mortality rates in certain jurisdictions and populations and cause additional disruptions in international and U.S. economies and financial markets, which could severely impact our business, results of operations and financial condition. 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 unknown.
Acquisitions and significant transactions involve varying degrees of risk that could affect our profitability.
We have made, and may in the future make, acquisitions, either of selected blocks of business or other companies, such as our reinsurance transaction with subsidiaries of Equitable Holdings, Inc. that closed on July 31, 2025. In connection with these transactions our employees, outside consultants and legal advisors evaluated important and complex actuarial, investment, business, finance, tax, accounting, legal and regulatory issues. Our due diligence efforts may not have been complete or accurate and may not have identified all relevant facts, which could prevent us from realizing the anticipated benefits of any such transaction. To the extent that our assumptions about a transaction prove to be materially inaccurate, our counterparties to those transactions do not meet their obligations to us, or we experience difficulty in integrating the risks assumed, our business, financial condition and results of operations could be adversely affected.
The success of these acquisitions depends on, among other factors, our ability to appropriately price and evaluate the risks of the acquired business through our due diligence efforts, as well as the availability and cost of funding sufficient to meet increased capital needs, the ability to fund cash flow shortages that may occur if anticipated revenues are not realized or are delayed and the possibility that the value of investments acquired in an acquisition may be lower than expected or may diminish due to credit defaults or changes in interest rates and that liabilities assumed may be greater than expected (due to, among other factors, less favorable than expected mortality or morbidity experience). Depending on our excess capital position and ratings profile and market conditions at the time, in connection with acquisitions, we may from time to time seek long-term debt, preferred security or common equity financing. Additionally, acquisitions may expose us to other operational challenges and various risks, including the ability to integrate the acquired business operations and data with our systems. A to manage the operational and risks associated with or resulting from significant transactions, including acquisitions, could affect our business, financial condition or results of operations.
Our insurance subsidiaries are highly regulated, and changes in these regulations could negatively affect our business.
Our insurance subsidiaries are subject to government regulation in each of the jurisdictions where they are licensed or authorized to do business. Governmental agencies have broad administrative power to regulate many aspects of the reinsurance business, which may include reinsurance terms and capital adequacy. These agencies are concerned primarily with the protection of policyholders and their direct insurers rather than shareholders or holders of debt securities of reinsurance companies. Moreover, insurance laws and regulations, among other things, establish minimum capital requirements and limit the amount of dividends, tax distributions and other payments our insurance subsidiaries can make without prior regulatory approval, and impose restrictions on the amount and type of investments we may hold. Changes in any laws applicable to us could negatively affect our business.
We operate in the U.S. and in many jurisdictions around the world. Our operations in international jurisdictions are subject to insurance, tax and other laws and regulations that 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. Business – B. Corporate Structure – Regulation” for a summary of certain laws and regulations applicable to our business. Our failure to comply with these and other laws and regulations could subject us to penalties from governmental or self-regulatory authorities, costs associated with remedying any such failure or related claims, harm to our business relationships and reputation, or interrupt our operations, any of which could impact our financial position and results of operations.
A downgrade in our ratings or in the ratings of our insurance subsidiaries could adversely affect our ability to compete.
Our financial strength and credit ratings are important factors in our competitive position. Rating organizations periodically review the financial performance and condition of insurers, including our insurance subsidiaries. The rating of each or our insurance companies is based on its ability to pay its obligations and is not directed toward the protection of investors. Rating organizations assign ratings based upon several factors. While most of the factors considered relate to the rated company, some of the factors relate to general economic conditions, market volatility and circumstances outside the rated company’s control. The various rating agencies periodically review and evaluate our capital adequacy in accordance with their
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established guidelines and capital models. In order to maintain our existing ratings, we may commit from time to time to manage our capital at levels commensurate with such guidelines and models. If our capital levels are insufficient to fulfill any such commitments, we could be required to reduce our risk profile by, for example, retroceding some of our business or by raising additional capital by issuing debt, or hybrid or equity securities. 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 insurance subsidiaries could adversely affect their ability to sell products, retain existing business, and compete for attractive acquisition opportunities. The ability of our subsidiaries to write reinsurance is partially dependent on their financial condition and is also influenced by their ratings. 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. 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.
We believe that the rating agencies consider the financial strength and flexibility of a parent company and its consolidated operations when assigning a rating to a particular subsidiary of that company. A downgrade in the rating or outlook of RGA, among other factors, could adversely affect our ability to raise and then contribute capital to our subsidiaries for the purpose of facilitating their operations and growth. A downgrade could also increase our own cost of capital. For example, the facility fees and interest rates for our syndicated revolving credit facility and certain other credit facilities are based on our senior long-term debt ratings. A decrease in those ratings could result in an increase in costs under those credit facilities.
Actions taken by ratings agencies may cause a material adverse effect on our business, financial condition or results of operations. In addition, a ratings change may have a negative impact on the price of our securities in the secondary market.
The availability and cost of collateral, including letters of credit, asset trusts and other credit facilities, as well as regulatory changes relating to the use of captive insurance companies, could adversely affect our business, financial condition or results of operations.
Regulatory reserve requirements in various jurisdictions in which we operate may be significantly higher than the reserves required under GAAP. Accordingly, we reinsure, or retrocede, business to affiliated and unaffiliated reinsurers to reduce the amount of regulatory reserves and capital we are required to hold in certain jurisdictions.
As described in “Item 1. Business – B. Corporate Structure – U.S. Regulation”, Regulation XXX and principles-based reserves (commonly referred to as PBR) requires U.S. life insurance companies to hold a relatively high level of regulatory reserves on their financial statements for various types of life insurance business. Based on the assumed growth rate in our current business plan and the increased level of regulatory reserves associated with some of this business, we expect the amount of our required regulatory reserves and our need to finance these reserves may continue to grow. Changes in laws and regulations and our ability to retrocede certain business may impact our reserving requirements and thus our financial condition and results of operations.
In many cases, for us to reduce regulatory reserves on business that we retrocede, the affiliated or unaffiliated reinsurer must provide an equal amount of regulatory-compliant collateral. The availability of collateral and the related cost of such collateral in the future could affect the type and volume of business we reinsure and could increase our costs. We may need to raise additional capital to support higher regulatory reserves, which could increase our overall cost of capital. If we, or our retrocessionaires, are unable to obtain or provide sufficient collateral to support our statutory ceded reserves, we may be required to increase regulatory reserves. In turn, this reserve increase could significantly reduce our statutory capital levels and adversely affect our ability to satisfy required regulatory capital levels, unless we are able to raise additional capital to contribute to our operating subsidiaries. Furthermore, term life insurance is a particularly price-sensitive product, and any increase in insurance premiums charged on these products by life insurance companies, in order to compensate them for the increased statutory reserve requirements or higher costs of insurance they face, may result in a significant loss of volume in their life insurance operations, which could, in turn, adversely affect our life reinsurance operations. We may not be to implement actions to mitigate the effect of increasing regulatory reserve requirements.
In addition, we maintain credit and letter of credit facilities with various financial institutions as a potential source of collateral and excess liquidity. Our ability to utilize these facilities is conditioned on our satisfaction of covenants and other requirements contained in the facilities. Our ability to utilize these facilities is also subject to the continued willingness and ability of the lenders to provide funds or issue letters of credit. 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.
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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.
We reinsure variable annuity products that include guaranteed minimum living benefits (“GMLB”). GMLB include guaranteed minimum withdrawal benefits, guaranteed minimum accumulation benefits and guaranteed minimum income benefits. The amount of reserves related to GMLB is based on their fair value and is affected by changes in equity markets, interest rates and volatility. Accordingly, strong equity markets, increases in interest rates and decreases in volatility will generally decrease the fair value of the liabilities underlying the benefits.
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. Such an increase in reserves would result in a charge to our earnings in the quarter in which we increase our reserves. We maintain a customized dynamic hedging program that is designed to mitigate the risks associated with income volatility around the change in reserves on guaranteed benefits. However, hedge positions may not be effective to fully offset changes in the carrying value of the guarantees due to, among other things, the time lag between changes in such values and corresponding changes in the hedge positions, high levels of volatility in the equity and derivatives markets, extreme swings in interest rates, unexpected contract holder behavior, and divergence between the performance of the underlying funds and hedging indices. These factors, individually or collectively, may have a material adverse effect on our liquidity, capital levels, financial condition or results of operations.
Changes in interest rates may also affect our business in other ways. Higher interest rates may result in increased surrenders on interest-based products of our clients, which may affect our fees and earnings on those products. Lower interest rates may result in lower sales of certain insurance and investment products of our clients, which would reduce the demand for our reinsurance of these products. If interest rates remain low for an extended period, it may adversely affect our cash flows, financial condition and results of operations.
RGA is an insurance holding company, and our ability to pay principal, interest and dividends on securities is limited.
RGA is an insurance holding company, with our principal assets consisting of the stock of our insurance subsidiaries, and substantially all of our income is derived from those subsidiaries. Our ability to pay principal and interest on any debt securities or dividends on any preferred or common stock depends, in part, on the ability of our insurance subsidiaries, our principal sources of cash flow, to declare and distribute dividends or advance money to RGA. We are not permitted to pay common stock dividends or make payments of interest or principal on securities that rank equal or junior to our subordinated debentures and junior subordinated debentures, until we pay any accrued and unpaid interest on such debentures. Our insurance subsidiaries are subject to various statutory and regulatory restrictions, applicable to insurance companies generally, that limit the amount of cash dividends, loans and advances that those subsidiaries may pay to us. Covenants contained in certain of our debt agreements also restrict the ability of certain subsidiaries to pay dividends and make other distributions or loans to us. In addition, more stringent dividend restrictions may be adopted, as discussed above under “Our insurance subsidiaries are highly regulated, and changes in these regulations could negatively affect our business.”
As a result of our insurance holding company structure, upon the insolvency, liquidation, reorganization, dissolution or other winding-up of one of our insurance subsidiaries, all creditors of that subsidiary would be entitled to payment in full out of the assets of such subsidiary before we, as shareholder, would be entitled to any payment. Our subsidiaries would have to pay their direct creditors in full before our creditors and investors, including holders of common stock, preferred stock or debt securities of RGA, could receive any payment from the assets of such subsidiaries.
Our international operations involve inherent risks.
A significant portion of our net premiums comes from our operations outside of the U.S. In addition to the risks we are exposed to in our U.S.-based operations, our non-U.S. based insurance subsidiaries are highly regulated and changes in these regulations could negatively affect our business. Our international operations expose us to other risks, which may vary substantially by country, including political, financial or social instability or conditions, exposure to the macroeconomic environment in international markets, the regulatory environment and actions of non-U.S. governmental authorities, 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.
We are exposed to foreign currency risk to the extent that exchange rates of foreign currencies are subject to adverse changes over time. The U.S. dollar value of our net investments in foreign operations, our foreign currency transaction settlements and the periodic conversion of the foreign-denominated earnings to U.S. dollars (our reporting currency) are each subject to adverse foreign exchange rate movements. A significant portion of our revenues and our fixed maturity securities available-for-sale are denominated in currencies other than the U.S. dollar. Our efforts to mitigate foreign currency risks may not be successful.
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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. Our pricing assumptions may be less predictable in emerging markets, and deviations in actual experience from these assumptions could impact our profitability in these markets. Additionally, lack of legal certainty and stability in the emerging markets exposes us to increased risk of disruption and adverse or unpredictable actions by regulators and may make it more difficult for us to enforce our contracts, which may negatively impact our business.
We may not be able to manage the risks associated with our international operations effectively and these risks may have an adverse effect on our business, financial condition or results of operations.
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. These insurance enterprises or retrocessionaires may not 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. 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 our clients’ processes may not adequately control business quality or establish appropriate pricing.
For some reinsurance agreements, the ceding company withholds and legally owns and manages assets equal to the net statutory reserves, and we reflect these assets as funds withheld on reinsurance assumed on our balance sheet. We are subject to the investment performance on the withheld assets, although we do not directly control them. We help to set, and monitor compliance with, the investment guidelines followed by these ceding companies. However, to the extent that such investment guidelines are not appropriate, or to the extent that the ceding companies do not adhere to such guidelines, our risk of loss could increase, which could materially adversely affect our financial condition and results of operations. Upon the insolvency of a ceding company, we may not be able to apply such assets to our reserve liabilities. For additional information on funds withheld at interest, see “Investments – Funds Withheld at Interest” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.
We use the services of third parties such as asset managers, software vendors and administrators to perform various functions that are important to our business. For instance, we have engaged third party investment managers to manage certain assets where our investment management expertise is limited, who we rely on to provide investment advice and execute investment transactions that are within our investment policy guidelines. Our third-party service providers rely on their computer and information security systems and their ability to maintain the security, confidentiality, integrity and privacy of those systems and the data residing on such systems. Our service providers have been and may in the future 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. 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.
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.
We operate in a highly competitive and dynamic industry and competition and other factors could adversely affect our business.
The reinsurance industry is highly competitive, and we encounter significant competition in all lines of business from other reinsurance companies, as well as competition from other providers of financial services. Our competitors vary by geographic market, and many of our competitors have greater financial resources and greater financial flexibility than we do. Our ability to compete depends on, among other things, pricing and other terms and conditions of reinsurance agreements, our ability to maintain strong financial strength ratings, and our service and experience in the types of business that we underwrite.
We compete based on the strength of our underwriting operations, insights on mortality trends, our ability to efficiently execute transactions, our client relationships and our responsive service. We believe our quick response time to client requests for individual underwriting quotes, our underwriting expertise and our ability to structure solutions to meet clients’ needs are important elements to our strategy and lead to other business opportunities with our clients. Our business will be adversely affected if we are unable to maintain these competitive advantages.
The insurance and reinsurance industries are subject to ongoing changes from market pressures brought about by customer demands, changes in law, changes in economic conditions such as interest rates and investment performance, technological innovation, marketing practices and new providers of insurance and reinsurance solutions. Failure to anticipate
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market trends or to differentiate our products and services may affect our ability to grow or maintain our current position in the industry. Federal and state regulators are increasing their scrutiny of insurers’ underwriting, and pricing practices, including the use of artificial intelligence, predictive models, and non-traditional data sources, due to concerns that such practices may create unfair discrimination or disparate impacts on certain groups. Regulatory standards in this area are rapidly evolving and may be subject to differing interpretations. As a result, we may be required to change our models, data sources, underwriting practices, incur significant compliance and governance costs, or face regulatory examinations, investigations, enforcement actions, penalties, litigation, or reputational harm, any of which could adversely affect our financial performance over the long-term. Additionally, our failure to adapt our strategies in response to changing economic conditions or changing competitive dynamics could impact our competitive position and have a material adverse effect on our business, financial condition and results of operations.
Weak conditions in global capital markets and the economy, as well as inflation, may materially adversely affect our business and results of operations.
Our results of operations, financial condition, cash flows and statutory capital position are materially affected by conditions in global capital markets and the economy. A general economic downturn or a downturn in the capital markets could adversely affect the market for many life insurance and annuity products. Factors such as consumer spending, business investment, government spending, the volatility and strength of the capital markets, deflation and inflation affect the economic environment and thus the profitability of our business. An economic downturn may yield higher unemployment and lower family income, corporate earnings, business investment and consumer spending, and could result in decreased demand for life insurance and annuity products. As we obtain substantially all our revenues through reinsurance arrangements that cover a portfolio of life insurance products and annuities, our business would be harmed if the market for annuities or life insurance was adversely affected. Therefore, adverse changes in the economy such as a could affect our business, financial condition and results of operations.
Additionally, increased economic uncertainty and increased unemployment resulting from a recession or negative economic conditions may result in policyholders seeking sources of liquidity and withdrawing from, or cancelling, their policies at rates greater than expected. If policyholder lapse and surrender rates significantly exceed expectations, it could have a material adverse effect on our business, results of operations and financial condition.
Inflationary conditions could affect our business in several ways. In our group life and disability businesses, premiums and claims costs may increase as compensation levels increase. However, during inflationary periods with elevated 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. Inflation may also increase our compensation expenses and other costs, potentially putting pressure on profitability.
We could be subject to additional income tax liabilities.
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. We may, from time to time, have deferred tax assets including those related to foreign tax credits, net operating and capital losses, which could result in a valuation allowance if future projections cannot demonstrate an ability to utilize these taxes. Furthermore, we establish deferred tax assets to the extent that our portfolio of fixed maturity securities is in an unrealized loss position. Realization of these losses could result in the inability to recover all of the tax benefits, resulting in a valuation allowance against the deferred tax asset. Realized losses may have a material adverse impact on our results.
Changes in U.S. tax laws could have a material adverse effect on our business. If the U.S. Internal Revenue Code is revised to reduce benefits associated with the tax-deferred status of certain life insurance and annuity products, or increase the tax-deferred status of competing products, all life insurance companies would be adversely affected with respect to their ability to sell such products, and, depending on grandfathering provisions, by the surrenders of existing annuity contracts and life insurance policies. In addition, life insurance products are often used to fund estate tax obligations. If Congress adopts legislation to reduce or eliminate the estate tax, our U.S. life insurance company customers could face reduced demand for some of their life insurance products, which in turn could negatively affect our reinsurance business.
The U.S. Treasury Department and the IRS continue to issue guidance under the U.S. Tax Cuts and Jobs Act, the Inflation Reduction Act, and the One Big Beautiful Bill Act, that may result in interpretations different from ours. Furthermore, Bermuda enacted the Corporate Income Tax of 2023 and the majority of the foreign jurisdictions in which we operate enacted a global minimum tax. In addition, the Organization for Economic Cooperation and Development (“OECD”) has developed Model Global Anti-Base Erosion rules under Pillar II legislation, and additional countries in which we operate may also enact such legislation. These developments have resulted in increased tax expense and additional tax compliance burdens, and future guidance is expected which could result in further changes to taxation that materially affect our financial position and results of operations.
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Changes in accounting standards may adversely affect our reported results of operations and financial condition.
Our consolidated financial statements are prepared in conformity with GAAP. If we are required to adopt revised accounting standards, it may adversely affect our reported results of operations and financial condition. 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 3 New Accounting Standards .”
Our risk management policies and procedures could leave us exposed to unidentified or unanticipated risk, which could negatively affect our business, financial condition or results of operations.
Our risk management policies and procedures, designed to identify, monitor and manage both internal and external risks, may not adequately predict future exposures, which could be significantly greater than expected. In addition, these identified risks may not be the only risks facing us. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may adversely affect our business, financial condition or results of operations.
There are inherent limitations to risk management strategies because there may exist, or develop in the future, risks that we have not appropriately anticipated or identified. If our risk management framework proves ineffective, we may suffer unexpected losses and could be materially adversely affected. As our businesses change and the markets in which we operate evolve, our risk management framework may not evolve at the same pace as those changes. As a result, there is a risk that new business strategies may present risks that are not appropriately identified, monitored or managed. In times of market stress, unanticipated market movements or unanticipated claims experience resulting from adverse mortality, morbidity or policyholder behavior, the effectiveness of our risk management strategies may be limited, resulting in losses. In addition, under or less liquid market conditions, our risk management strategies may be less and/or more expensive because other market participants may be using the same or similar strategies to manage risk under the same market conditions.
Past or future misconduct by our employees or employees of our vendors could result in violations of law, regulatory sanctions and serious reputational or financial harm and the precautions we take to prevent and detect this activity may not be effective. There can be no assurance that our controls and procedures designed to monitor associates’ business decisions and prevent us from taking excessive or inappropriate risks will be effective. We review our compensation policies and practices as part of our overall risk management program, but it is possible that our compensation policies and practices could inadvertently incentivize excessive or inappropriate risk taking, which could harm our reputation and have a material adverse effect on our results of operations or financial condition.
The failure in cyber or other information security systems, including a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems, as well as the occurrence of unanticipated events affecting our disaster recovery systems and business continuity planning, could impair our ability to conduct business effectively.
Our business is highly dependent upon the effective operation of our information security systems. The failure of our information security systems or disaster recovery capabilities for any reason could cause significant interruptions in our operations and result in a failure to maintain the security, confidentiality, integrity or privacy of sensitive or personal data related to our customers, insured individuals or employees. Like other global companies, we are regularly the target of cybersecurity attacks and other attempts to gain unauthorized access to, or breach our data and systems and cybersecurity threats are becoming more frequent and sophisticated. In addition, the rapid evolution and increased adoption of artificial intelligence technologies may heighten our cybersecurity risks by making cybersecurity attacks more difficult to detect, contain and mitigate. Administrative and technical controls, security measures and other preventative actions we take to reduce the risk of such and protect our information technology may not be sufficient to prevent physical and electronic -ins, and similar from tampering with our computer and information security systems. our continued efforts, we have experienced security from time to time. Any in our security measures could lead to the , or disclosure or of personal data that we or our vendors store and process. If our information security systems or the information systems of any third parties with which we interact, are or compromised, in a manner which impacts us or our information security systems, as a result of a cybersecurity attack, a security , including a data , or other security could result in liabilities and , have an impact on our financial results and growth prospects, cause of normal business operations, cause us to incur substantial costs, our reputation, subject us to , , regulatory sanctions and other and expenses, lead to of customers and revenues and otherwise affect our business, financial condition or results of operations. Additionally, we are subject to cybersecurity reporting obligations in different jurisdictions that vary in their scope and application, which may create reporting obligations and inhibit our ability to quickly provide complete and reliable information to business relations and regulators, as well as the public.
We rely on our computer and our information security systems for a variety of business functions across our global operations, including for the administration of our business, underwriting, claims, performing actuarial analysis and maintaining
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financial records. We depend heavily upon these computer systems to provide reliable service, data and reports. Upon a disaster such as a natural catastrophe, pandemic, 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. 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 recovery systems. If an unknown fourth party of ours, upon whom we and/or a significant third party of ours relies, experiences a or , our ability to deploy our recovery systems and effectively conduct business could be compromised. In addition, if a significant number of our managers were upon a , our ability to effectively conduct business could be compromised. These also may with our clients’ ability to provide data and other information to us, and our employees’ ability to perform their job responsibilities.
The development and adoption of artificial intelligence and its use and anticipated use by us or by third parties on whom we rely, may increase the operational risks discussed above or create new operational risks that we are not currently anticipating, which may otherwise adversely impact us .
Artificial intelligence technologies offer potential benefits in areas such as customer service personalization and process automation, and we use, and expect to increasingly use, artificial intelligence to help deliver products and services and support critical functions. We also expect third parties on whom we rely to do the same. While we maintain processes to evaluate, manage and oversee risks related to the use of these artificial intelligence systems, they are developed, designed, and operated outside of our direct control. There are significant risks involved in developing and deploying artificial intelligence and there can be no assurance that using artificial intelligence will benefit our operations. Our efforts to integrate artificial intelligence technologies into our operations may result in unanticipated consequences and complications, and if we do not successfully implement artificial intelligence technologies, this could result in legal and regulatory risk, and otherwise adversely affect us. Moreover, artificial intelligence may be misused by us or by third-party service providers, and that risk is increased by the relative newness of the technology, and the speed at which it is being adopted. Such could us to legal or regulatory risk, customer relationships or cause reputational .
Further, if these systems fail, are compromised, or operate in ways that are inconsistent with our expectations, we could experience operational disruptions, incur liabilities, or suffer regulatory or reputational harm. Additionally, our ability to continue to develop and efficiently deploy artificial intelligence technologies depends on our ability to attract and retain skilled talent as well as access to specific third-party equipment and other physical infrastructure, such as processing hardware and network capacity, for which we cannot control the availability or pricing, especially in a highly competitive environment.
In addition, the legal and regulatory framework with respect to artificial intelligence is evolving and remains uncertain. We expect that additional laws, regulations, and policies related to artificial intelligence will be enacted, and existing laws and regulations may be interpreted in new ways, which could affect our operations. Further, there is uncertainty regarding the impact of state laws related to artificial intelligence as the result of an executive order issued by the current presidential administration in December 2025, which directs federal regulators to challenge and preempt state laws that the administration views as obstructive to artificial intelligence innovation. If we are unable to use artificial intelligence technology in our operations as a result of such legal restrictions, or if regulations on artificial intelligence require additional compliance or reporting obligations, our business operations in certain regions could be adversely impacted. Further, any failure or perceived failure by us to comply with legal requirements related to artificial intelligence could result in proceedings, investigations or actions against us, and which may otherwise impact us.
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. 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. The U.S. lacks a comprehensive federal privacy regulation and as such, states, trade organizations and some federal regulators have adopted laws, regulations and guidelines, which may be conflicting or inconsistent. 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.
There has been increased scrutiny, including from U.S. state and foreign regulators, regarding the use of “big data” techniques, including machine learning. For instance, the New York State Department of Financial Services (“NYDFS”) Part 500 Cybersecurity Regulation (the “Cybersecurity Regulation”) applies to us because one of our insurance subsidiaries is licensed in New York. Additionally, the Cybersecurity Regulation also applies to many of our clients. The Cybersecurity
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Regulation requires companies to implement written policies and procedures designed to ensure the existence and soundness of their cybersecurity programs and the security of information systems and nonpublic information that are accessible to, or held by, third party service providers. The NYDFS has increased enforcement of its Cybersecurity Regulation in recent years and has proposed amendments thereto which include enhanced data protection, governance, monitoring and planning, notification and technical requirements. Further, all U.S. states have enacted breach notification laws and over a dozen states have enacted comprehensive privacy regulations. These comprehensive privacy regulations provide certain exemptions we expect will continue to apply to a significant portion of our business. Many of these regulations either do not anticipate the processing of personal data for reinsurance purposes at all or place costly restrictions on the ability of a reinsurer to service its business by requiring processing to be done within that country’s borders.
It is possible that we will be subject to new or changing regulations that could impose restrictions and limitations on the way we implement the use of personal data, “big data” or machine learning. Our failure to adhere to any existing or new guidelines could subject us to litigation, investigation, sanctions, and enforcement actions, resulting in reputational harm or otherwise have a material impact on new and existing business, our financial condition and results of operations.
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 hire new talent, retain existing employees or adequately plan for the succession of our senior management and other key employees. While we have succession plans and long-term compensation plans designed to retain our existing employees and attract and retain additional qualified personnel in the future, our succession plans may not operate effectively, and our compensation plans cannot guarantee that the services of these employees will continue to be available to us.
Catastrophic events could adversely affect our business, financial condition and operations.
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. An increase in policyholder claims resulting from such events could cause substantial volatility in our financial results or otherwise impact our business, financial condition and operations. Catastrophic events could also disrupt the economies in the affected area, which could impact our ability to write new business, value of our investments, changes in interest rates and other market factors.
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. These climate change trends are expected to continue and may impact nearly all sectors of the economy to varying degrees. We cannot predict the long-term impacts of climate change for us and our clients, but such trends may adversely impact our mortality and morbidity rates and also may impact asset prices, financial markets and general economic conditions.
Litigation and regulatory investigations and actions may result in financial losses or harm our reputation.
We are, and in the future may be, subject to litigation and regulatory investigations or actions from time to time. A substantial legal liability or a significant federal, state or other regulatory action against us, as well as regulatory inquiries or investigations, could harm our reputation, result in material fines or penalties, result in significant legal costs and otherwise have a material adverse effect on our business, financial condition and results of operations. Likewise, such liabilities, actions, inquiries or investigations directed against our clients could have similar consequences to them and indirect consequences to us. Regulatory inquiries and litigation may also cause volatility in the price of stocks of companies in our industry or in our stock price. For additional information, see Item 8. “Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 17 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.
The capital and credit markets experience varying degrees of volatility and disruption. In some periods, the markets have exerted downward pressure on availability of liquidity and credit capacity for certain issuers. We need liquidity to make our benefit payments, to pay our operating expenses, interest on our debt and dividends on our capital stock and to replace certain maturing liabilities. Without sufficient liquidity, we will be forced to curtail our operations, and our business will be adversely affected. The principal sources of our liquidity are reinsurance premiums under reinsurance treaties and cash flows from our investment portfolio and other assets. Sources of liquidity in normal markets also include proceeds from the issuance of a variety of short- and long-term instruments, including medium- and long-term debt, subordinated and junior subordinated debt securities, capital securities and common stock.
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If current resources do not satisfy our needs, we may have to seek additional financing. The availability of additional financing will depend on a variety of factors such as market conditions, the general availability of equity and credit, the volume of trading activities, the overall availability of credit to the financial services industry, our credit ratings and credit capacity, as well as the possibility that customers or lenders could develop a negative perception of our long- or short-term financial prospects. 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.
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. As such, we may be forced to delay raising capital, issue shorter tenor securities than we prefer, or bear an unattractive cost of capital, which could decrease our profitability and significantly reduce our financial flexibility. Further, our ability to finance our statutory reserve requirements depends on market conditions. If market capacity is limited for a prolonged period, our ability to obtain new funding for such purposes may be hindered and, as a result, our ability to write additional business in a cost-effective manner may be limited or otherwise adversely affected.
We also rely on our unsecured credit facilities, including our $850 million syndicated credit facility, as potential sources of liquidity. Our credit facilities contain administrative, reporting, legal and financial covenants, and our syndicated credit facility includes requirements to maintain a specified minimum consolidated net worth and a minimum ratio of consolidated indebtedness to total capitalization. If we were unable to access our credit facilities, it could materially impact our capital position. The availability of these facilities could be critical to our credit and financial strength ratings and our ability to meet our obligations as they come due in a market when alternative sources of credit are unavailable.
Difficult conditions in the global capital markets and the economy generally may materially adversely affect our business, financial condition and results of operations.
Our results of operations, financial condition, cash flows and statutory capital position are materially affected by conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere around the world. A recession in the U.S. or other countries, poor economic conditions, major central bank policy decisions, prolonged or elevated inflation, volatility and disruptions in capital markets or financial asset classes and geopolitical upheaval (including trade disputes) can have an adverse effect on our business because of our exposure to credit and equity markets and because our investment portfolio and some of our liabilities are sensitive to changing market factors. Additionally, disruptions in one market or asset class can also spread to other markets or asset classes.
Concerns over U.S. fiscal policy and the trajectory of the U.S. national debt could have severe repercussions to the U.S. and global credit and financial markets, further exacerbate concerns over sovereign debt and disrupt economic activity in the U.S. and elsewhere. As a result, our access to, or cost of, liquidity may deteriorate. 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. 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. In addition, there may be ongoing risks around the world related to interest rate fluctuations, slowing global growth, commodity prices and the devaluation of certain currencies. These events and continuing market upheavals may have an effect on us, in part because we have a large investment portfolio and are also dependent upon customer behavior. Our revenues may in such circumstances and our profit margins may . In addition, upon market events, such as a global credit , we could incur significant investment-related . Even in the of a market , we are to substantial risk of due to market .
Our investments and derivative financial instruments are subject to risks of credit defaults, changes in foreign exchange rates, and changes in market values. Periods of macroeconomic weakness or recession, heightened volatility or disruption in the financial and credit markets could increase these risks, potentially resulting in other-than-temporary impairment of assets in our investment portfolio. We are also subject to the risk that cash flows generated from the collateral underlying the structured products we own may differ from our expectations in timing or amount. In addition, many of our classes of investments, but in particular our alternative investments, may produce investment income that fluctuates significantly from period to period. Any event reducing the estimated fair value of these securities, other than on a temporary basis, could have a material and adverse effect on our business, results of operations, financial condition, liquidity and cash flows. Difficult financial, economic and geopolitical conditions could cause our investment portfolio to incur material losses.
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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 that 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 investment guidelines limit non-investment grade fixed maturity securities in our investment portfolio. 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. Additionally, the issuers of these securities frequently have relatively high debt levels and are thus more sensitive to difficult economic conditions, specific corporate developments and rising interest rates, which could impair an issuer’s capacity or willingness to meet its financial commitment on such lower-rated securities. As a result, the market price of these securities may be quite volatile, and the risk of loss is greater.
We include equity and alternative assets (including private equity, hedge funds and real estate joint ventures) in our portfolio constructions, as these asset classes can provide an increase in returns over longer periods of time, aligning with the long-term nature of certain of our liabilities. Private debt and equity investments and real estate joint ventures have less price transparency than publicly traded securities. As these investments typically do not trade on public markets and indications of realizable market value may not be readily available, valuations can be infrequent or more volatile.
The success of any investment activity is affected by general economic conditions, including the level and volatility of interest rates and the extent and timing of investor participation in such markets, which may adversely affect the markets for interest rate sensitive securities, mortgages and equity securities. Unexpected volatility or illiquidity in the markets in which we directly or indirectly hold positions could adversely affect us. A sustained decline in public equity and alternative markets may reduce the returns earned by our investment portfolio through lower-than-expected investment income, thereby adversely impacting earnings, capital, and pricing assumptions.
Interest rate fluctuations and economic disruptions 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.
Significant changes in interest rates expose reinsurance companies to the risk of reduced investment income or actual losses based on the difference between the interest rates earned on investments and the credited interest rates paid on outstanding reinsurance contracts. Both rising and declining interest rates can negatively affect the income we derive from these interest rate spreads. During periods of rising interest rates, we may be contractually obligated to reimburse our clients for the greater amounts they credit on certain interest-sensitive products. However, we may not have the ability to immediately acquire investments with interest rates sufficient to offset the increased crediting rates on our reinsurance contracts. During periods of falling interest rates, our investment earnings will be lower because new investments in fixed maturity securities will likely bear lower interest rates. We may not be able to fully offset the decline in investment earnings with lower crediting rates on underlying annuity products related to certain of our reinsurance contracts. Our asset/liability management programs and procedures may not reduce the volatility of our income when interest rates are rising or falling, and thus changes in interest rates may affect our interest rate spreads.
Changes in interest rates, reduced liquidity in the financial markets or a slowdown in U.S. or global economic conditions have adversely affected, and, in the future, may also adversely affect the values and cash flows of the assets in our investment portfolio. Our corporate fixed income portfolio has been, and in the future may be, adversely impacted by delayed principal or interest payments, ratings downgrades, increased bankruptcies and credit spreads widening in distressed industries and individual companies. Our investments in mortgage loans and mortgage-backed securities have been, and in the future could be, negatively affected by delays or failures of borrowers to make payments of principal and interest when due or delays or moratoriums on foreclosures or enforcement actions with respect to or mortgages. Market dislocations, decreases in observable market activity or of information may restrict our access to key inputs used to derive certain estimates and assumptions made in connection with financial reporting or otherwise, including estimates and changes in long-term macro-economic assumptions relating to estimated expected credit .
The liquidity and value of some of our investments may become significantly diminished.
There may be illiquid markets for certain investments we hold in our investment portfolio as result of changes in interest rates, reduced liquidity in the financial markets or a slow down in the U.S. or global economy. These investments include privately-placed fixed maturity securities, options and other derivative instruments, mortgage loans, policy loans, limited partnership interests, and real estate equity, such as real estate joint ventures and funds. Additionally, markets for certain of our investments that are currently liquid may experience reduced liquidity during periods of market volatility or disruption. If we were forced to sell certain of our investments into illiquid markets, prices may be lower than our carrying value in such
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investments. This could result in realized losses which could have a material adverse effect on our results of operations and financial condition, as well as our financial ratios, which could affect compliance with our credit instruments and rating agency capital adequacy measures.
We could be forced to sell investments at a loss to cover policyholder withdrawals, recaptures of reinsurance treaties or other events.
Some of the products offered by our insurance company customers allow policyholders and contract holders to withdraw their funds under defined circumstances. Our insurance subsidiaries manage their liabilities and configure their investment portfolios to provide and maintain sufficient liquidity to support anticipated withdrawal demands and contract benefits and maturities under reinsurance treaties with these customers. While our insurance subsidiaries own a significant amount of liquid assets, a portion of their assets are relatively illiquid. Unanticipated withdrawal or surrender activity could, under some circumstances, require our insurance 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. 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.
Recapture of business previously ceded does not affect premiums ceded prior to the recapture but may result in immediate payments to our insurance company customers and a charge to income for costs that we deferred when we acquired the business but are unable to recover upon recapture. Under some circumstances, payments to our insurance company customers could require our insurance subsidiaries to dispose of assets on unfavorable terms.
Defaults, downgrades or other events impairing the value of our fixed maturity securities portfolio may reduce our earnings.
We are subject to the risk that the issuers, or guarantors, of fixed maturity securities we own may default on principal and interest payments they owe us. Fixed maturity securities represent a substantial portion of our total cash and invested assets. The occurrence of a major or prolonged economic downturn, acts of corporate malfeasance, widening risk spreads, or other events that adversely affect the issuers or guarantors of these securities could cause the value of our fixed maturity securities portfolio and our net income to decline and the default rate of the fixed maturity securities in our investment portfolio to increase. A ratings downgrade affecting issuers or guarantors of particular securities, or similar trends that could worsen the credit quality of issuers, such as the corporate issuers of securities in our investment portfolio, could also have a similar effect. With economic uncertainty, credit quality of issuers or guarantors could be adversely affected. Any event reducing the value of these securities could have a material 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. The realization of significant realized losses could result in an inability to recover the tax benefits and may result in the establishment of valuation allowances against our deferred tax assets. Realized losses or impairments may have a material adverse impact on our results of operations and financial condition.
The defaults or deteriorating credit of other financial institutions could adversely affect us.
We have exposure to many different industries and counterparties and routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, insurance companies, commercial banks, investment banks, investment funds and other institutions. Many of these transactions expose us to credit risk upon default of our counterparty. In addition, with respect to secured and other transactions that provide for us to hold collateral posted by the counterparty, our credit risk may be exacerbated when the collateral we hold cannot be liquidated at prices sufficient to recover the full amount of our exposure. We also have exposure to these financial institutions in the form of unsecured debt instruments, derivative transactions and equity investments. There can be no assurance that losses or impairments to the carrying value of these assets would not materially and adversely affect our business, financial condition or results of operations.
Defaults on our mortgage loans or the mortgage loans underlying our investments in mortgage-backed securities and volatility in performance of our investments in real estate related assets may adversely affect our profitability.
A portion of our investment portfolio consists of assets linked to real estate, including mortgage loans on commercial properties, lifetime mortgages, investments in commercial mortgage-backed securities (“CMBS”) and residential mortgage-backed securities (“RMBS”). Delinquency and defaults by third parties in the payment or performance of their obligations underlying these assets could reduce our investment income and realized investment gains or result in the recognition of investment losses. Mortgage loans are stated on our balance sheet at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of valuation allowances established as of the balance sheet date. Such valuation allowances are based on the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan’s original effective interest rate, the value of the loan’s collateral if the loan is in the process of foreclosure or is otherwise collateral-dependent, or the loan’s market value if the loan is being sold. CMBS and RMBS are
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stated on our balance sheet at fair value. The performance of our mortgage loan investments and our investments in CMBS and RMBS, however, may fluctuate in the future. An increase in the default rate of our mortgage loan investments or the mortgage loans underlying our investments in CMBS and RMBS could have a material adverse effect on our financial condition or results of operations.
Further, any geographic or sector concentration of our mortgage loans or the mortgage loans underlying our investments in CMBS and RMBS may have adverse effects on our investment portfolios and consequently on our consolidated results of operations or financial condition. Events or developments that have a negative effect on any particular geographic region or sector may have a greater adverse effect on our investment portfolios to the extent that the portfolios are concentrated. 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.
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.
Fixed maturity, equity securities and short-term investments, which are primarily reported at fair value on the consolidated balance sheets, represent the majority of our total cash and invested assets. As described in Item 8. “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.
During periods of market disruption, including periods of significantly rising or high interest rates, rapidly widening credit spreads or illiquidity, it may be difficult to value certain of our securities if trading becomes less frequent or market data becomes less observable. There may be certain asset classes that were in active markets with significant observable data that become illiquid due to the financial environment. As such, valuations may include inputs and assumptions that are less observable or require greater estimation resulting in values that may be different than the value at which the investments may be ultimately sold. Further, rapidly changing or disruptive credit and equity market conditions could materially impact the valuation of securities as reported within our consolidated financial statements and the period-to-period changes in value could vary significantly. Decreases in value may have a material adverse effect on our financial condition or results of operations.
The reported value of our investments, including our relatively illiquid asset classes and, at times, our high-quality, generally liquid asset classes, do not necessarily reflect the lowest current market price for the asset. 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.
The determination of the amount of allowances and impairments taken on our investments is highly subjective and could materially affect our financial condition or results of operations.
The determination of the amount of allowances and impairments vary by investment type and is based upon our periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. Management updates its evaluations regularly and reflects changes in allowances and impairments in operations as such evaluations are revised. For example, the cost of our fixed maturity securities is adjusted for impairments in value deemed to be impaired in the period in which the determination is made. The assessment of whether impairments have occurred is based on management’s case-by-case evaluation of the underlying reasons for the decline in fair value. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. There can be no assurance that our management has accurately assessed the level of impairments taken, or allowances reflected in our financial statements and their potential impact on regulatory capital. Furthermore, additional impairments or additional allowances may be needed in the future.
Our investments are reflected within the consolidated financial statements utilizing different accounting bases and accordingly we may not have recognized differences, which may be significant, between cost and fair value in our consolidated financial statements.
Certain of our principal investments are in fixed maturity securities, short-term investments, mortgage loans, policy loans, funds withheld at interest and other invested assets. The carrying value of such investments is described in “Investments” in Note 2 – “Significant Accounting Polices and Pronouncements” in the Notes to Consolidated Financial Statements. Investments not carried at fair value in our consolidated financial statements – principally, mortgage loans, policy loans, real estate joint ventures and other limited partnerships – may have fair values that are substantially higher or lower than the carrying value reflected in our consolidated financial statements. Each of such asset classes is regularly evaluated for impairment under the accounting guidance appropriate to the respective asset class.
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Risks Related to Ownership of Our Common Stock
We may not pay dividends on our common stock.
Our shareholders may not receive dividends. All future payments of dividends are at the discretion of our board of directors and will depend on our earnings, capital requirements, insurance regulatory conditions, operating conditions and such other factors as our board of directors may deem relevant. The amount of dividends that we can pay will depend in part on the operations of our insurance subsidiaries. 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.
Certain provisions in our articles of incorporation and bylaws, as well as Missouri corporate law and state insurance laws, may delay or prevent a change of control of RGA, which could adversely affect the price of our common stock. Our articles of incorporation and bylaws contain some provisions that may make the acquisition of control of RGA without the approval of our board of directors more difficult, including provisions relating to the nomination, election and removal of directors and limitations on actions by our shareholders. 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.
Before a person can acquire control of a U.S. insurance company, prior written approval must be obtained from the insurance commission of the state where the domestic insurer is domiciled. Under U.S. state insurance laws and regulations, any person acquiring 10% or more of the outstanding voting securities of a corporation, such as our common stock, is presumed to have acquired control of that corporation and its subsidiaries. Similar laws in other countries where we operate limit our ability to effect changes of control for subsidiaries organized in such jurisdictions without the approval of local insurance regulatory officials. Prior to granting approval of an application to directly or indirectly acquire control of a domestic or foreign insurer, an insurance regulator in any jurisdiction may consider such factors as the financial strength of the applicant, the integrity of the applicant’s board of directors and executive officers, the applicant’s plans for the future operations of the domestic insurer and any anti-competitive results that may arise from the consummation of the acquisition of control.
Issuing additional shares may dilute the value or affect the price of our common stock.
Our board of directors has the authority, without action or vote of the shareholders, to issue any or all authorized but unissued shares of our common stock, including securities convertible into, or exchangeable for, our common stock and authorized but unissued shares under our equity compensation plans. In the future, we may issue such additional securities, through public or private offerings, in order to raise additional capital. Any such issuance will dilute the percentage ownership of shareholders and may dilute the per share projected earnings or book value of our common stock. In addition, option holders may exercise their options at any time when we would otherwise be able to obtain additional equity capital on more favorable terms.
The occurrence of various events may adversely affect the ability of RGA and its subsidiaries to fully utilize any net operating losses (“NOLs”) and other tax attributes.
RGA and its subsidiaries may, from time to time, have a substantial amount of NOLs and other tax attributes, for U.S. federal income tax purposes, to offset taxable income and gains. If a corporation experiences an ownership change, it is generally subject to an annual limitation, which limits its ability to use its NOLs and other tax attributes. Events outside of our control may cause RGA (and, consequently, its subsidiaries) to experience an “ownership change” under Sections 382 and 383 of the Internal Revenue Code and the related Treasury regulations and limit the ability of RGA and its subsidiaries to utilize fully such NOLs and other tax attributes. If we were to experience an ownership change, we could potentially have higher U.S. federal income tax liabilities than we would otherwise have had, which would negatively impact our financial condition and results of operations.
Item 1B. UNRESOLVED STAFF COMMENTS
The Company has no unresolved staff comments from the Securities and Exchange Commission.
Item 1C. CYBERSECURITY
The Company is susceptible to a variety of risks as an inherent part of serving our clients’ needs, including risks related to cybersecurity, data privacy and technology. The Company maintains a cybersecurity program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats. The program, which balances serving the interest of our clients, their policyholders and customers, regulatory bodies, our investors, our employees and other relevant constituencies, is integrated within the Company’s Enterprise Risk Management (“ERM”) program.
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The underlying controls of the cybersecurity program are based on recognized practices and standards for cybersecurity and information technology and is aligned with the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework and the International Organization Standardization (“ISO”) 27001 Information Security Management System Requirements. RGA periodically engages a third party to perform an assessment of the Company’s cybersecurity risk management program against the NIST Cybersecurity Framework.
The Company utilizes third-party partners, including leading national and international companies specializing in cybersecurity and software development, to supplement its security operations team to provide monitoring of its global cybersecurity environment and to coordinate the investigation and remediation of alerts. The Company also engages third party partners to assist in evaluating and testing the Company’s cybersecurity infrastructure, and partners with leading cybersecurity and software firms to support operations, monitor global threats, assist with investigations and remediations, and test the Company’s infrastructure. These partners are subject to the Company’s third party due diligence process that includes security and privacy assessments, legal reviews, and ongoing assessments and performance reviews to ensure compliance with the Company’s policies and standards.
Both the board of directors and management have an active and ongoing role overseeing, assessing, identifying and managing material risks from cybersecurity threats.
The board of directors, directly and through its Risk Committee and Cybersecurity and Technology Committee (the “Cybersecurity Committee”) , oversees the Company’s enterprise risk management programs, cybersecurity, data privacy, technology and resiliency risks and provides oversight of ongoing investments in cybersecurity and technology. The Company’s Chief Risk Officer (“CRO”) provides regular reports to the Risk Committee regarding the Company’s general risks, including risks relating to cybersecurity threats, and responses thereto. The Cybersecurity Committee oversees the Company’s cybersecurity, customer privacy, and technology risks and monitors the Company’s strategy and progress to achieve its planned cybersecurity objectives. The Chief Information Officer (“CIO”) and Global Chief Information Security Officer (“CISO”) provide quarterly updates to the Cybersecurity Committee regarding cybersecurity, and information technology strategy and programs. In addition, both the Risk Committee and Cybersecurity Committee meet as needed outside of the normal quarterly reporting cycle to discuss particular cybersecurity issues.
The Company’s risk management process and strategy, including cybersecurity risks, is the responsibility of the CRO and is supported by the Company’s Risk Management Steering Committee (“RMSC”), which includes senior management executives, including the President and Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) and the Chief Investment Officer, among others. The RMSC provides oversight and advises the CRO on the Company’s enterprise risk management framework and strategic risk exposures including cybersecurity risks. The Company’s CISO and CRO provide updates through quarterly meetings with the RMSC.
The CRO, CIO and CISO each have over 15 years experience in managing cybersecurity, information technology and other risk management processes. The following is a summary of the CRO, CIO and CISO’s experience:
• The CRO, a member of the Company’s Executive Committee, has held various positions in the Company and is responsible for oversight of operational risks, which includes cybersecurity. The CRO has more than 30 years of experience and has held various positions including serving as the Company’s Global Chief Risk Officer. In addition to overseeing the overall risk governance structure of the Company’s Enterprise Risk Management program, the CRO has extensive experience leading a number of cybersecurity programs at the Company such as enhancing the Company’s cybersecurity systems to ensure compliance with Privacy and Security Regulations.
• The CIO, a member of RGA’s Executive Committee, leads the strategic direction of the Company’s information technology resources and management of the Company’s global information technology operations. The CIO has held various positions of responsibility at other companies for all aspects of technology and he has deep knowledge in organizational change, digital transformation, core platform and data analytics modernization.
• The CISO, who is responsible for implementing the Company’s cybersecurity risk management strategy, oversees the Company’s global security team ensuring broad awareness of emerging risks and cybersecurity threats. The CISO has significant cybersecurity experience including executive management responsibility in cybersecurity, operational risk management, and information technology, including regulatory compliance and risk quantification.
A cross functional team, including Finance, Legal, Risk and the Information Technology departments, in conjunction with others as needed, are involved in the materiality assessment of cybersecurity threats and incidents. The factors considered in the assessment of materiality include, but are not limited to, the probability of an adverse outcome, actual and expected direct and indirect costs stemming from the incident, the possibility of litigation or regulatory investigations, and the nature and extent of harm to policyholders, cedants, vendor relationships, and the Company’s reputation and competitiveness. Conclusions are reviewed and approved by the Company’s CEO, CFO and CRO.
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We have experienced, and may in the future experience, whether directly or through third parties, cybersecurity incidents. While prior incidents have not materially affected our results of operations or financial condition, we cannot assure that they will not be materially affected in the future by such incidents. Additionally, although our processes are designed to help prevent, detect, respond to, and mitigate the impact of such incidents, there is no guarantee that a future cybersecurity incident would not materially affect us, including our results of operations, financial condition or business strategy. For more information on our cybersecurity related risks, see Item 1A – “Risk Factors.”
Item 2. PROPERTIES
The Company’s corporate headquarters is located at an owned site in Chesterfield, Missouri. In addition, the Company leases office space in various locations throughout the world. The Company believes that its existing facilities, including both owned and leased, are in good operating condition and suitable for the conduct of its business.
Item 3. LEGAL PROCEEDINGS
The Company is subject to litigation in the normal course of its business. The Company currently has no material litigation. A legal reserve is established when the Company is notified of an arbitration demand or litigation or is notified that an arbitration demand or litigation is imminent, it is probable that the Company will incur a loss as a result and the amount of the probable loss is reasonably capable of being estimated.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Insurance companies are subject to statutory regulations that restrict the payment of dividends. 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.
Reinsurance Group of America, Incorporated common stock is traded on the New York Stock Exchange (NYSE) under the symbol “RGA”. On January 30, 2026, there were 14,306 shareholders of record of RGA’s common stock and 66 million shares outstanding.
Issuer Purchases of Equity Securities
The following table summarizes RGA’s repurchase activity of its common stock during the quarter ended December 31, 2025:
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, 2025 – October 31, 2025
November 1, 2025 – November 30, 2025
December 1, 2025 – December 31, 2025
(1) The Company repurchased 266,777 shares of common stock under its share repurchase program in November 2025. The Company net settled – issuing 52,657, 1,015 and 25,739 shares from treasury and repurchased from recipients 48,262, 394 and 9,753 shares in October, November and December 2025, respectively, in settlement of income tax withholding requirements incurred by the recipients of equity incentive awards.
On January 23, 2024, the Company’s board of directors authorized a share repurchase program for up to $500 million of RGA’s outstanding common stock. As of December 31, 2025, the aggregate amount remaining under the Company’s share repurchase authorization was $375 million. During the year ended December 31, 2025, the Company repurchased 673,114 shares of common stock under this program.
On January 29, 2026, the 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. This authorization replaces the stock repurchase authorization granted by the board in 2024.
Repurchases will be made in accordance with applicable securities laws and would be made through market transactions, block trades, privately negotiated transactions or other means, or a combination of these methods, with the timing and number of shares repurchased dependent on a variety of factors, including share price, corporate and regulatory requirements, and market and business conditions. Repurchases may be commenced or suspended from time to time without prior notice.
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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, 2020, and ended December 31, 2025, assuming $100 was invested on December 31, 2020. The graph compares the cumulative total return on the Company’s common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the cumulative total return of companies in the S&P 500 Stock Index and the S&P Life and Health Insurance Index. The indices are included for comparative purposes only. They do not necessarily reflect management’s opinion that such indices are an appropriate measure of the relative performance of the Company’s common stock and are not intended to forecast or be indicative of future performance of the common stock.
Base Period
Cumulative Total Return
Reinsurance Group of America, Incorporated
S&P Life & Health Insurance
Item 6. (RESERVED)
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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations
Page
Cautionary Note Regarding Forward-Looking Statements
Overview
Industry Trends
Critical Accounting Estimates
Consolidated Results of Operations
Results of Operations by Segment
U.S. and Latin America Operations
Canada Operations
Europe, Middle East and Africa Operations
Asia Pacific Operations
Corporate and Other
Liquidity and Capital Resources
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and federal securities laws including, among others, statements relating to projections of the future operations, strategies, earnings, revenues, income or loss, ratios, financial performance and growth potential of the Company. Forward-looking statements often contain words and phrases such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,” “plan,” “potential,” “pro forma,” “project,” “should,” “will,” “would,” and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all derivative forms. Forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements are not a guarantee of future performance and are subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance, and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.
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) changes in mortality, morbidity, policyholder behavior, claims experience, investment returns, interest rates, expenses and other factors as compared to our pricing assumptions; (2) investment results, whether from changes in economic, capital- and credit-market conditions, asset selection, or otherwise, and their impact on the Company’s investment securities, liquidity, portfolio yields, credit quality, access to capital, cost of capital, and amount of capital required for regulatory and contractual purposes; (3) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company; (4) the availability, amount, cost, and market value of collateral necessary for regulatory reserves, capital, and client obligations; (5) changes in laws and regulations, tax policy and rates, accounting standards, and privacy, data security and cybersecurity regulations applicable to the Company and actions by regulators with authority over the Company’s operations, as well as regulatory restrictions on the ability of Company subsidiaries to pay dividends to the Company; (6) the impact of general economic conditions in the U.S. and globally, including as a result of inflation, interest rate levels, geopolitical instability, and impacts from the imposition of, or changes in tariffs, as well as the stability of and actions by governments, central banks, and economies in jurisdictions where the Company operates, affecting interest rates, markets generally, or the demand for insurance and reinsurance; (7) the and financial performance of clients, reinsurers, third-party investment managers and other institutions and the effects of the Company’s dependence on such third parties; (8) the effectiveness of the Company’s risk management strategy, policy, and procedures, whether relating to reinsurance, investment strategy, operations, or otherwise; (9) the impact of of the value of the Company’s investment securities on the Company’s capital requirements and the fact that the determination of allowances and taken on the Company’s investments is highly subjective; (10) the of events such as pandemics,
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epidemics, other major health issues, natural disasters, war, military actions, and terrorism or other acts of violence; (11) competitive factors and competitors’ responses to the Company’s initiatives; (12) development and introduction of new products and distribution opportunities and entry into new lines of business and markets; (13) the impact of the development and adoption of artificial intelligence; (14) the effect of acquisitions and other significant transactions, including risks related to the integration of acquired blocks of business and entities and the Company’s ability to achieve the expected benefits of such transactions, including the transaction entered into with subsidiaries of Equitable Holdings, Inc. on July 31, 2025; (15) 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; (16) adverse developments with respect to litigation, arbitration, or regulatory or actions; (17) risks associated with our international operations, including related to fluctuation in foreign currency exchange rates; and (18) other risks and uncertainties described in this document and in the Company’s other filings with the Securities and Exchange Commission (“SEC”).
Forward-looking statements should be evaluated together with the many risks and uncertainties that affect the Company’s business, including those mentioned in this document and described in the periodic reports the Company files with the SEC. These forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update these forward-looking statements, even though the Company’s situation may change in the future, except as required under applicable securities law. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to see Item 1A – “Risk Factors” in this Annual Report on Form 10-K, as may be supplemented by Item 1A – “Risk Factors” in the Company’s subsequent Quarterly Reports on Form 10-Q and in our other periodic and current reports filed with the SEC.
Overview
The Company is among the leading global providers of life reinsurance and financial solutions, with $4.3 trillion of life reinsurance in force and assets of $156.6 billion as of December 31, 2025. Traditional reinsurance includes individual and group life and health, disability, and critical illness reinsurance. Financial solutions includes longevity reinsurance, asset-intensive reinsurance, pension risk transfer, capital solutions, including financial reinsurance and stable value products. The Company derives revenues primarily from renewal premiums from existing reinsurance treaties, new business premiums from existing or new reinsurance treaties, fee income from financial solutions business and income earned on invested assets.
The Company’s underwriting expertise and industry knowledge allowed it to expand into international markets around the world including locations in Canada, the Asia Pacific region, Europe, the Middle East, Africa and Latin America. Based on the compilation of information from competitors’ annual reports, the Company believes that it is the largest global life and health reinsurer in the world based on 2024 life and health reinsurance revenues. The Company has also developed its capacity and expertise in the reinsurance of longevity risks, asset-intensive products (primarily annuities and corporate-owned life insurance) and financial reinsurance.
The Company’s Traditional reinsurance business involves reinsuring life insurance policies that are often in force for the remaining lifetime of the underlying individuals insured, with premiums earned typically over a period of 10 to 30 years or longer. To a lesser extent, the Company also reinsures certain health business, typically, for one to three years. Each year, however, a portion of the business under existing treaties terminates due to, among other things, lapses or voluntary surrenders of underlying policies, deaths of the insured, and the exercise of recapture options by ceding companies. The Company’s Financial Solutions business, including significant asset-intensive and longevity risk transactions, allows its clients to take advantage of growth opportunities and manage their capital, longevity and investment risk. The Company also works with partners to provide pension solutions that enable plan sponsors to diversify and protect the benefits provided to the annuitants.
The Company’s long-term profitability largely depends on the volume and amount of death- and health-related claims incurred and the ability to adequately price the risks it assumes. While death claims are reasonably predictable over a period of many years, claims are less predictable over shorter periods and are subject to significant fluctuation from quarter to quarter and year to year. For longevity business, the Company’s profitability depends on the lifespan of the underlying contract holders and the investment performance for certain contracts. Additionally, the Company generates profits on investment spreads associated with the reinsurance of investment type contracts and generates fees from financial reinsurance transactions, which are typically shorter duration than its traditional life reinsurance business. The Company believes that its sources of liquidity are sufficient to cover potential claims payments on both a short-term and long-term basis.
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Segment Presentation
The Company has geographic-based and business-based operational segments. Geographic-based operations are further segmented into traditional and financial solutions businesses. See “Business – Segments” in Item 1 for more information.
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. As a result of the economic capital allocation process, a portion of investment income is credited to the segments based on the level of allocated capital. In addition, the segments are charged for excess capital utilized above the allocated economic capital basis. This charge is included in policy acquisition costs and other insurance expenses. Segment investment performance varies with the composition of investments and the relative allocation of capital to the operating segments.
Segment revenue levels can be significantly influenced by currency fluctuations, large transactions, mix of business and reporting practices of ceding companies, and therefore may fluctuate from period to period.
The following table sets forth the Company’s premiums attributable to each of its segments for the periods presented on both a gross assumed basis and net of premiums ceded to third parties:
Gross and Net Premiums by Segment
(in millions)
Year Ended December 31,
Gross
Net
Gross
Net
Gross
Net
U.S. and Latin America:
Traditional
Financial Solutions
Total U.S. and Latin America
Canada:
Traditional
Financial Solutions
Total Canada
Europe, Middle East and Africa:
Traditional
Financial Solutions
Total Europe, Middle East and Africa
Asia Pacific:
Traditional
Financial Solutions
Total Asia Pacific
Corporate and Other
Total
The following table sets forth selected information concerning assumed life reinsurance business in force and assumed new business volume by segment for the periods presented. The terms “in force” and “new business” refer to insurance policy face amounts or net amounts at risk.
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Reinsurance Business In Force and New Business by Segment
(in billions)
As of December 31,
In Force
New Business
In Force
New Business
In Force
New Business
U.S. and Latin America:
Traditional
Financial Solutions
Total U.S. and Latin America
Canada:
Traditional
Financial Solutions
Total Canada
Europe, Middle East and Africa:
Traditional
Financial Solutions
Total Europe, Middle East and Africa
Asia Pacific:
Traditional
Financial Solutions
Total Asia Pacific
Total
Reinsurance business in force reflects the addition or acquisition of new life reinsurance business, offset by terminations (e.g., life and group contract terminations, lapses of underlying policies, deaths of insureds and recaptures), changes in foreign currency exchange and any other changes in the amount of insurance in force. As a result of terminations, fluctuations in foreign exchange rates and other changes, assumed in force amounts at risk decreased by $277.6 billion, $330.8 billion and $59.7 billion in 2025, 2024 and 2023, respectively.
See “Results of Operations by Segment” below for further information about the Company’s segments.
Industry Trends
The Company believes life and health insurance companies will continue to partner with reinsurance companies to manage risk, achieve new growth, assist with capital efficiency, develop solutions across the value chain and to help navigate through changes in regulatory and accounting standards. In addition, the Company believes reinsurers will continue to be an integral part of the life and health insurance market due to their ability to efficiently aggregate a significant volume of life insurance in force, creating economies of scale and greater diversification of risk. As a result of having larger amounts of mortality and morbidity experience data at their disposal compared to primary life insurance companies, reinsurers tend to have more comprehensive insights into mortality and morbidity trends, creating more efficient pricing for mortality and morbidity risk. The Company also believes that the following trends in the life and health insurance industry will continue to create demand for both traditional reinsurance and financial solutions.
Cession Rates. The percentage of new life and health business being reinsured in North America has continued to increase following a period of decline, due to strong recurring production coupled with in force opportunities and an aging population, which increases the need for living benefit morbidity products. Cession rates in the Company’s international markets are expected to continue increasing as middle-class growth and wealth creation drive additional insurance growth.
Insured Populations. The aging population in North America and elsewhere, and the growth in the emerging global middle class, are increasing demand for protection products and for retirement, senior protection, and savings products for an aging population who are concerned about protecting their peak income and are considering retirement and estate planning. This trend is likely to result in continuing demand for annuity products and life insurance policies, larger face amounts of life insurance policies and higher mortality and longevity risk taken by life insurers, all of which should fuel the need for insurers to seek reinsurance coverage. 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. Regulatory, accounting, and economic changes across the globe are creating opportunities for reinsurance and innovative capital solutions to:
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• manage risk-based capital by shifting mortality and other risks to reinsurers, thereby reducing amounts of reserves and capital that life and health insurance companies need to maintain;
• release capital to pursue new business initiatives;
• unlock the capital supporting, and value embedded in, non-core product lines; and
• exit certain lines of business.
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 that this will result in business opportunities for the remaining life reinsurers, particularly those with a significant market presence and strong ratings. However, competition from new entrants for large in force blocks, particularly for asset-intensive blocks, has increased in recent years. Additionally, merger and acquisition and other restructuring transactions within the life insurance industry will likely continue to occur, which the Company believes will increase the demand for reinsurance products to facilitate these transactions and manage risk.
The Company continues to lead with expertise and innovation by prioritizing speed, impact, scale and sustainability, which enables it to deliver on its purpose to make financial protection accessible to all. The Company is well positioned to meet its clients’ needs through the following initiatives.
Leading with Expertise and Innovation
• Combine product development, innovation and new reinsurance structures to open or expand markets and relationships with clients.
• Leverage underwriting, data, analytics and digital expertise to grow markets.
• Deliver unique insights to gain competitive advantage and leverage thought leadership to drive growth.
Succeeding Together
• Broaden and deepen global, regional, and local client relationships to be the preferred reinsurance partner.
• Foster third-party partnerships to accelerate innovation, capabilities and access to efficient capital.
• Strengthen leadership in industry organizations to actively promote and advance industry purpose.
Prioritizing Agility, Impact and Scale
• Prioritize high-growth, capability-driven opportunities that best fit risk appetites.
• Prioritize opportunities that recognize competitive differentiators and value proposition.
• Capitalize on operating model to increase local markets responsiveness and agility.
Building for Future Generations
• Pursue a balanced approach to in force management, portfolio optimization and new business generation.
• Foster an engaging and inclusive culture to attract and retain diverse, world-class talent.
• Behave as a responsible global citizen by taking action to address social and environmental issues.
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 Company believes that its most critical accounting estimates include the establishment of premiums receivable; the establishment of liabilities for future policy benefits and incurred but not reported claims; the valuation of investments, investment allowance for credit losses and investment impairments; the valuation of market risk benefits and embedded derivatives; and accounting for income taxes. The balances of these accounts require extensive use of assumptions and estimates, particularly related to the future performance of the underlying business.
Computations of prospective effects of hypothetical changes in assumptions and estimates discussed below are based on numerous assumptions and should not be relied on as indicative of future results. Further, the computations do not contemplate any actions management could undertake in response to changes in interest rates, actuarial assumptions, or other factors. Additionally, the illustrations of the potential financial statement impact of changes in the assumptions used to measure the Company’s insurance liabilities reflect a parallel change in the assumptions across the Company; however, assumption changes may be non-parallel in practice and are only applicable to specific blocks of business. Certain shortcomings are inherent in the method of analysis presented of the estimated changes in the Company’s liability for future policy benefits and the fair value of fixed maturity securities, which constitute forward-looking statements. Actual values may differ materially
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from those projections presented due to a number of factors, including, without limitation, actual assumptions used to measure the liability for future benefits and market conditions varying from assumptions used in the calculations as well as the sensitivity of blocks of business to individual assumptions. See Note 2 – “Significant Accounting Policies and Pronouncements,” Note 5 – “Future Policy Benefits” and Note 13 – “Fair Value of Assets and Liabilities” in the Notes to Consolidated Financial Statements for additional information regarding the valuation of the Company’s reserves and investments, respectively.
Differences in experience compared with the assumptions and estimates utilized in establishing premiums receivable, in estimating the reserves for future policy benefits and claim liabilities, or in the determination of fair value and related impairments to investments can have a material effect on the Company’s results of operations and financial condition.
Premiums Receivable
Premiums are accrued when due and in accordance with information received from the ceding company. When the Company enters into a new reinsurance agreement, it records accruals based on the terms of the reinsurance treaty. Similarly, when a ceding company fails to report information on a timely basis, the Company records accruals based on the terms of the reinsurance treaty as well as historical experience. Other management estimates include adjustments for increased insurance in force on existing treaties, lapsed premiums given historical experience, the financial health of specific ceding companies, collateral value and the legal right of offset on related amounts (i.e., allowances and claims) owed to the ceding company. Under the legal right of offset provisions in its reinsurance treaties, the Company can withhold payments for allowances and claims from unpaid premiums.
Liabilities for Future Policy Benefits and Incurred but not Reported Claims
The liability for future policy benefits is estimated using the Company’s mortality, morbidity and persistency assumptions that reflect the Company’s historical experience, industry data, cedant specific experience and discount rates based on the current yields of upper-medium grade fixed income instruments (A rated credit). These assumptions vary with the characteristics of the reinsurance contract, the year the risk was assumed, the age of the insured and other appropriate factors.
The liability for annuities in the payout phase is calculated using expected mortality, discount rates and other assumptions. These assumptions vary with the characteristics of the plan of insurance, year of issue, age of insured and other appropriate factors. The mortality assumptions are based on the Company’s experience as well as industry experience and standards.
For the purpose of calculating the liability for future policy benefits, the Company’s reinsurance contracts for its Traditional business are grouped into annual cohorts based on the effective date of the reinsurance contract. The annual groupings are further disaggregated based on:
• How the reinsurance contracts are priced and managed;
• Geographical locations;
• Underlying currency of the contract; and
• Ceding company and other factors.
Given the unique risks and highly customized nature of the Company’s financial reinsurance business, insurance and reinsurance contracts for the Financial Solutions business are not aggregated with other contracts for the purpose of calculating the liability for future policy benefits.
With the exception of claim expense assumptions, the Company reviews actual and anticipated experience compared to the assumptions used to establish policy benefits on a quarterly basis and will update those assumptions if evidence suggests the assumptions should be revised. During the third quarter of 2025, the Company completed its annual assumption review resulting in an increase in its total liability for future polity benefits. The increase was primarily the result of updated mortality assumptions, which had an unfavorable impact on the liability for future policy benefits for the Company’s Traditional business and a favorable impact on the Company’s Financial Solutions business. Updates may occur in other quarters if information becomes available during the quarter that indicates that an assumption update is necessary. The Company has elected to lock-in claims expense assumptions at contract inception and those assumptions are not subsequently reviewed or updated.
The discount rates used to estimate the liability are based on upper-medium grade fixed-income instruments (A rated credit) with similar tenor to the expected liability cash flows. The discount rate assumption is updated quarterly and used to remeasure the liability at the reporting date, with the resulting change reflected in other comprehensive income (loss). For unobservable discount rates, the Company uses estimates consistent with fair value guidance, maximizing the use of relevant, observable market prices and minimizing the use of unobservable inputs.
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The Company’s liabilities for future policy benefits are sensitive to changes in interest rates and actuarial assumptions such as mortality and morbidity. The following table summarizes the sensitivities of hypothetical changes in significant assumptions related to the Company’s long-duration non-participating and limited pay contracts, for products included in the disaggregated rollforwards in Note 5 – “Future Policy Benefits” in the Notes to Consolidated Financial Statements.
December 31, 2025 (dollars in millions)
Assumptions
Liability for Future Policy Benefits
Pre-tax Income
Other Comprehensive Income (Loss)
Discount Rate
Effect of an increase by 100 bps
Effect of an increase by 50 bps
Effect of a decrease by 50 bps
Effect of a decrease by 100 bps
Mortality
Effect of an increase by 1%
Effect of a decrease by 1%
Morbidity
Effect of an increase by 5%
Effect of a decrease by 5%
Lapse
Effect of an increase by 10%
Effect of a decrease by 10%
Valuation of Market Risk Benefits and Embedded Derivatives
The Company reinsures certain insurance products that contain terms that are deemed to be market risk benefits or embedded derivatives.
Variable annuities with guaranteed minimum benefits have been identified as market risk benefits. Market risk benefits are contracts or contract features that both provide protection to the contract holder from other-than-nominal capital market risk and expose the Company to other-than-nominal capital market risk. Market risk benefits are measured at fair value using an option-based valuation model based on current net amounts at risk, market data, Company experience and other factors. Changes in fair value are recognized in net income each period with the exception of the portion of the change in fair value due to a change in the liability’s credit valuation adjustment (“CVA”), which is recognized in other comprehensive income (loss). The liability for market risk benefits totaled $234 million and $223 million as of December 31, 2025 and 2024, respectively.
The Company reinsures certain insurance products that contain terms that are deemed to be embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated under the general accounting principles for Derivatives and Hedging. If the instrument would not be reported in its entirety at fair value and it is determined that the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract, and that a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative. Such embedded derivatives are carried on the consolidated balance sheets at fair value with the host contract.
Additionally, reinsurance treaties written on a modified coinsurance or funds withheld basis are subject to the general accounting principles for Derivatives and Hedging related to embedded derivatives. The majority of the Company’s funds withheld at interest balances are associated with its reinsurance of annuity contracts.
The valuation of the various embedded derivatives requires complex calculations based on actuarial and capital markets inputs and assumptions related to estimates of future cash flows and interpretations of the primary accounting guidance continue to evolve in practice. The valuation of embedded derivatives is sensitive to the investment credit spread environment. Changes in investment credit spreads are also affected by the application of a CVA. The fair value calculation of an embedded derivative in an asset position utilizes a CVA based on the ceding company’s retrocessionaire’s credit risk. Conversely, the fair value calculation of an embedded derivative in a liability position utilizes a CVA based on the Company’s credit risk. Generally, an increase in investment credit spreads, ignoring changes in the CVA, will have a negative impact on the fair value of the embedded derivative (decrease in income).
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Valuation of Investments, Allowance for Credit Losses and Impairments
The Company primarily invests in fixed maturity securities, mortgage loans, short-term investments, and other invested assets. For investments reported at fair value, the Company utilizes, when available, fair values based on quoted prices in active markets that are regularly and readily obtainable. Generally, these are very liquid investments, and the valuation does not require management judgment. When quoted prices in active markets are not available, fair value is based on market valuation techniques, market comparable pricing and the income approach. The Company may utilize information from third parties, such as pricing services and brokers, to assist in determining the fair value for certain investments; however, management is ultimately responsible for all fair values presented in the Company’s consolidated financial statements. This includes responsibility for monitoring the fair value process, ensuring objective and reliable valuation practices and pricing of assets and liabilities, and approving changes to valuation methodologies and pricing sources. The selection of the valuation technique(s) to apply considers the definition of an exit price and the nature of the investment being valued and significant expertise and judgment is required.
In addition, investments are subject to impairment reviews to identify when a decline in value necessitates the recording of an allowance for credit losses or an impairment for non-credit factors. Impairment losses for non-credit factors are recognized in AOCI whereas allowances for credit losses are recognized in investment related gains (losses), net. See “Allowance for Credit Losses and Impairments” in Note 2 – “Significant Accounting Policies and Pronouncements” in the Notes to Consolidated Financial Statements for a discussion of the policies regarding allowance for credit losses and impairments.
Fixed maturity securities are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on fixed maturity securities classified as available-for-sale, less applicable deferred income taxes, are recognized in other comprehensive income.
The interest rate sensitivity relating to the Company’s fixed maturity securities is assessed using hypothetical scenarios that assume positive and negative 50 and 100 basis point parallel shifts in the yield curves. This analysis assumes that the U.S., Canada and other pertinent countries’ yield curve shifts are of equal direction and magnitude. Change in value of individual securities is estimated consistently under each scenario using a commercial valuation tool. The Company’s actual experience may differ from the results noted below particularly due to assumptions utilized or if events differ from those included in the methodology. The following table summarizes the results of this analysis for fixed maturity securities in the Company’s investment portfolio as of December 31, 2025 (dollars in millions):
Interest Rate Analysis of Estimated Fair Value of Fixed Maturity Securities
-100 bps
-50 bps
+50 bps
+100 bps
Total estimated fair value
% Change in estimated fair value from base
$ Change in estimated fair value from base
Interest rate sensitivity analysis is also used to measure the Company’s interest rate risk related to floating rate securities by computing estimated changes in pretax income for floating rate assets and liabilities over a one year period following an instantaneous, parallel, hypothetical 100 basis point change in market interest rates. The Company’s projected decrease in pretax income associated with floating rate instruments in the event of an instantaneous 100 basis point decrease in market interest rates for its fiscal year ended December 31, 2025, was $107 million.
Mortgage loans are carried at unpaid principal balances, net of any unamortized premium or discount and valuation allowances. For a discussion regarding the valuation allowance for mortgage loans see “Allowance for Credit Losses and Impairments” in Note 2 – “Significant Accounting Policies and Pronouncements” in the Notes to Consolidated Financial Statements.
Income Taxes
The U.S. consolidated tax return includes the operations of RGA and all eligible subsidiaries. The Company’s foreign subsidiaries are taxed under applicable local statutes.
The Company provides for federal, state and foreign income taxes currently payable, as well as those deferred due to temporary differences between the tax basis of assets and liabilities and the reported amounts and are recognized in net income or in certain cases in other comprehensive income (loss). The Company’s accounting for income taxes represents management’s best estimate of various events and transactions considering the laws enacted as of the reporting date.
Deferred tax assets and liabilities are measured by applying the relevant jurisdictions’ enacted tax rate for the period in which the temporary differences are expected to reverse to the temporary difference change for that period. The Company will establish a valuation allowance if management determines, based on available information, that it is more likely than not that
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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 has projected its ability to utilize its deferred tax assets and established a valuation allowance on the portion of the deferred tax assets that the Company believes more likely than not will not be realized.
Significant judgment is required in determining whether valuation allowances should be established as well as the amount of such allowances. When making such a determination, consideration is given to, among other things, the following:
(i) taxable income in prior carryback years;
(ii) future reversals of existing taxable temporary differences;
(iii) future taxable income exclusive of reversing temporary differences and carryforwards; and
(iv) tax planning strategies.
Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur.
The Company’s policy is to account for global intangible low-taxed income (“GILTI”) as a period cost.
The Company reports uncertain tax positions in accordance with generally accepted accounting principles. In order to recognize the benefit of an uncertain tax position, the position must meet the more likely than not criteria of being sustained. Unrecognized tax benefits due to tax uncertainties that do not meet the more likely than not criteria are included within liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest related to tax uncertainties as interest expense whereas penalties related to tax uncertainties are classified as a component of income tax.
See Note 14 – “Income Tax” in the Notes to Consolidated Financial Statements for further discussion.
Consolidated Results of Operations
A discussion of the Company’s financial condition and results of operations for the year ended December 31, 2025, compared to the year ended December 31, 2024, is presented below. A discussion of the Company’s financial condition and results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, can be found under Item 7 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 21, 2025, which is available free of charge on the SEC’s website at ww.sec.gov and the Company’s Investor Relations website at www.rgare.com. Information provided on such website does not constitute part of this Annual Report on Form 10-K.
Actuarial Assumptions Update
The Company uses best estimate assumptions for future cash flows for its long-duration insurance business, and the impact of assumption updates is reflected as liability remeasurement gains or losses in the income statement based on treaty issue-year cohorts. As a result, best estimate assumption updates, as well as actual versus expected experience, on these long-duration contracts may result in current period income statement volatility.
The relative impact on current period income statement results from assumptions updates and actual versus expected experience will vary based on the net premium ratio of the affected cohort. The net premium ratio represents the portion of the gross premiums allocated to reserves to provide for all benefits and certain expenses in long-duration business.
• Capped cohorts – Cohorts with a net premium ratio equal to or greater than 100%. Capped cohorts are approximately 9% of the Company’s cohorts and are predominantly associated with business in the Company’s U.S. and Latin America Traditional segment from 1999 to 2004.
• Floored cohorts – Cohorts with reserves floored at zero as reserves cannot be negative. Floored cohorts are approximately 27% of the Company’s cohorts and are predominately associated with longevity business in the Company’s EMEA Financial Solutions business.
• Uncapped cohorts – Cohorts with a net premium ratio under 100% are 64% of the Company’s cohorts.
Actual versus expected experience variances in the Company’s capped and floored cohorts and assumption updates in the Company’s capped cohorts are expected to create more income statement volatility than the Company’s uncapped cohorts. This is because the full impact of the experience variance, for both capped and floored cohorts, and assumption updates, for capped cohorts is recognized in current period earnings due to the net premium ratio exceeding 100% or the reserve floored at zero. For uncapped cohorts, only a portion of the impact, based on the adjusted net premium ratio, is reflected in current period results and the remaining impact is recognized over the life of the cohort based on the net premium ratio and future expected cash flows.
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During the third quarter of 2025 and 2024, the Company completed its annual assumptions review resulting in a pre-tax loss of $149 million and $194 million, respectively. The pre-tax loss recognized in 2025 was primarily due to updated mortality assumptions in the U.K. The 2024 pre-tax loss, which was comprised of a $219 million loss related to long-duration business and a $25 million gain on other business, was the result of the Company increasing its retention limit from $8 million to $30 million resulting in a pre-tax loss of $136 million, and updated mortality and lapse assumptions resulting in a pre-tax loss of $58 million.
The following table summarizes the pre-tax impact of assumption updates for the years ended December 31, 2025 and 2024 for each segment’s long-duration insurance business (amounts in millions).
For the year ended December 31,
Segment impact of assumptions updates
U.S. and Latin America – Traditional
U.S. and Latin America – Financial Solutions
Canada – Traditional
Canada – Financial Solutions
Europe, Middle East and Africa – Traditional
Europe, Middle East and Africa – Financial Solutions
Asia Pacific – Traditional
Asia Pacific – Financial Solutions
Total impact of assumptions updates
Consolidated income before income taxes
The following table summarizes the changes in net income for the periods presented (dollars in millions, except per share data):
For the year ended December 31,
Revenues
Net premiums
Net investment income
Investment related gains, net
Other revenues
Total revenues
Benefits and expenses
Claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Market risk benefits remeasurement (gains) losses
Interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Interest expense
Total benefits and expenses
Income before income taxes
Provision for income taxes
Net income
Net income attributable to noncontrolling interest
Net income available to RGA, Inc. shareholders
Earnings per share
Basic earnings per share
Diluted earnings per share
The increase in net income and income before income taxes during 2025 was primarily the result of the following:
• The execution of reinsurance contracts with subsidiaries of Equitable Holdings, Inc. (“Equitable Holdings”) on July 31, 2025. Pursuant to these agreements, the Company’s U.S. Financial Solutions segment assumed a 75% quota share of Equitable Holdings’ in force individual life insurance liabilities on a coinsurance and modified coinsurance basis, consisting of a diversified mix of life products and account value liabilities, with total liabilities of approximately $12 billion. This transaction increased income before income taxes by $68 million. In addition, pursuant to these
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agreements, Equitable Holdings recaptured risks previously assumed by the Company’s U.S. Traditional segment resulting in a gain of $21 million recognized in the current period.
• Strong growth in the Company’s Traditional business in Asia and Financial Solutions business in the U.K.
• An increase in investment income due to an increase in invested assets and higher yields, partially offset by an increase in interest credited.
• A decrease in investment related losses resulting from lower realized losses from portfolio repositioning and freestanding derivatives.
• The Company recognized a non-economic loss at the inception of a single premium PRT transaction completed during 2024. The non-economic loss at inception is the difference between the single premium received and the valuation of the initial reserve based on interest rates prescribed by U.S. GAAP.
• During the third quarter of 2025 and 2024, the Company completed its annual assumptions review resulting in a pre-tax loss of $149 million and $194 million, respectively. The pre-tax loss recognized in 2025 was primarily due to updated mortality assumptions in the U.K. The 2024 pre-tax loss was the result of the Company increasing its retention limit from $8 million to $30 million resulting in a pre-tax loss of $136 million, and updated mortality and lapse assumptions resulting in a pre-tax loss of $58 million.
The increase in income during 2025 was partially offset by the following:
• Adverse claim experience in the U.S. Traditional segment, both individual life and group health, and lower future policy benefits remeasurement gains due to management actions in the current year in the U.S. Traditional segment.
Fluctuations in foreign currency to U.S. dollar exchange rates
Foreign currency fluctuations can result in variances in the financial statement line items. Foreign currency fluctuations increased income before income taxes by $10 million primarily due to the strengthening of the British Pound and Euro compared to the U.S. Dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.
Investment related gains and losses
The decrease in investment related losses, net is due to the following:
• During 2025 and 2024, the Company repositioned its investment portfolio to generate higher yields which led to net capital losses of $125 million and $617 million, respectively.
• Changes in the fair value of freestanding derivatives decreased investment related losses, net by $57 million in 2025, compared to an increase in investment related losses of $229 million in 2024.
• The Company incurred $181 million and $76 million of impairments and change in allowance for credit losses during the years ended December 31, 2025, and 2024, respectively.
See the Investment section within Management Discussion and Analysis, Note 11 – “Investments” and Note 12 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for additional information on the changes in allowance for credit losses, impairment losses and derivatives.
Market risk benefits
Market risk benefits consist of guaranteed minimum benefits associated with the Company’s reinsurance of variable and indexed annuities. The change in fair value of the freestanding derivatives purchased by the Company to hedge the liability is reflected in investment related gains (losses), net. The change in fair value of market risk benefits for guaranteed minimum benefits, after allowing for changes in the associated freestanding derivatives, decreased income before income taxes by $14 million and $21 million for the years ended December 31, 2025, and 2024, respectively.
Non-economic changes in insurance liabilities
Non-economic changes in insurance liabilities include the initial loss on PRT transactions, net of amortization and changes in the fair value of embedded derivatives associated with the Company’s reinsurance of indexed products. The initial loss at inception of a PRT transaction is the difference between the single premium received and the valuation of the initial reserve based on interest rates prescribed by U.S. GAAP. During 2025 and 2024, the Company incurred non-economic losses of $49 million and $127 million, respectively.
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Income taxes
The effective tax rate was 22.9% and 26.3% for 2025 and 2024, respectively. See Note 14 – “Income Tax” in the Notes to Consolidated Financial Statements for additional information.
Consolidated adjusted operating income before income taxes
Non-GAAP Financial Measure – Consolidated adjusted operating income before income taxes is not determined in accordance with U.S. GAAP. The Company principally uses consolidated adjusted operating income before income taxes in evaluating performance because the Company believes that such measure, when reviewed in conjunction with relevant U.S. GAAP measure (i.e., income before income taxes), presents a clearer picture of its operating performance and is used by the Company in the allocation of its resources. The Company believes that this non-GAAP financial measure provides investors and other third parties with a better understanding of the Company’s results of operations, financial statements and the underlying profitability drivers and trends of the Company’s businesses by excluding specified items which may not be indicative of the Company’s ongoing operating performance and may fluctuate significantly from period to period. This non-GAAP financial measure should be considered supplementary to the Company’s financial results that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for U.S. GAAP measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way the Company calculates such measures. Consequently, this non-GAAP financial measure may not be comparable to similar measures used by other companies.
Adjusted operating income (loss) before taxes is calculated as income (loss) before income taxes excluding, as applicable:
• Substantially all of the effect of net investment related gains and losses;
• Changes in the fair value of embedded derivatives;
• Changes in the fair value of contracts that provide market risk benefits;
• Non-economic losses at contract inception for direct pension risk transfer single premium business (which are amortized into adjusted operating income within claims and other policy benefits over the estimated lives of the contracts);
• Any net gain or loss from discontinued operations;
• The cumulative effect of any accounting changes;
• The impact of certain tax related items; and
• Any other items that the Company believes are not indicative of the Company’s ongoing operations.
Adjusted operating income (loss) before income taxes, when presented at a segment level, is a measure reported to management for purposes of making decisions about allocating resources to the Company’s business segments and assessing the performance of the business segments, and is presented in the Company’s financial statement footnotes in accordance with U.S. GAAP. For additional information, including regarding the presentation of segment results and the Company’s definition of adjusted operating income at a segment level, see Note 19 – “Segment Information” in the Notes to Consolidated Financial Statements. Adjusted operating income before income taxes, when presented on a consolidated basis, is a non-GAAP financial measure.
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Reconciliation of income before taxes to adjusted operating income (loss) before taxes
The reconciliation of consolidated income (loss) before income taxes to consolidated adjusted operating income before income taxes is shown below for the periods presented (dollars in millions):
For the year ended December 31,
Income (loss) before income taxes
Investment and derivative (gains) losses
Market risk benefits remeasurement gains (losses)
Change in fair value of funds withheld embedded derivatives
Funds withheld (gains) losses – investment income
Derivatives – interest credited
Investment income on unit-linked variable annuities
Interest credited on unit-linked variable annuities
Interest expense on uncertain tax positions
Other
Adjusted operating income before income taxes
Year ended December 31, 2025, compared to the year ended December 31, 2024
The increase in adjusted operating income before income taxes was primarily the result of the following:
• The transaction with Equitable Holdings executed in the current year increased adjustable operating income before income taxes by $68 million.
• An increase in investment income due to an increase in invested assets and higher new money rates.
• Strong growth in the Company’s Traditional business in Asia and Financial Solutions business in the U.K.
• A future policy benefits remeasurement loss of $136 million was recognized in the third quarter of 2024 as a result of the Company increasing its per life retention limit from $8 million to $30 million during the third quarter of 2024.
The increases in adjusted operating income were partially offset by the following:
• During the third quarter of 2025, the Company completed its annual assumptions review resulting in a loss of $149 million, primarily driven by updated mortality assumptions in the U.K. The 2024 assumptions update resulted in a loss of $58 million. See Note 5 – “Future Policy Benefits” for additional information.
• Adverse claim experience in the U.S. Traditional segment, both individual life and group health, and lower future policy benefits remeasurement gains due to management actions in the current year in the U.S Traditional segment.
• An increase in policy acquisition costs and other insurance expenses due to new business growth.
• An increase in operating and financing costs to support new business growth, compliance requirements and information technology security.
See “Results of Operations by Segment” for additional discussion of current and prior period results of operations.
Foreign currency fluctuations can result in variances in the financial statement line items. Foreign currency fluctuations increased adjusted operating income before income taxes by $12 million primarily due to the strengthening of the British Pound and Japanese Yen compared to the U.S. Dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.
Premiums and business growth
The decrease in premiums was due to a decrease in single premium PRT transactions during 2025. The single premiums received were offset by increases in reserves. The decrease in premium was partially offset by organic growth on existing treaties and new business production, measured by the face amount of reinsurance in force, of $733.5 billion during 2025 compared to $505.4 billion during 2024. Consolidated assumed life reinsurance in force increased to $4,334.6 billion as of December 31, 2025, from $3,878.7 billion as of December 31, 2024, due to new business production and changes in foreign exchange rates.
Net investment income
The increase in net investment income was primarily due to an increase in the average invested asset base and higher risk-free rates earned on new investments, higher yields earned on alternative and private asset classes and an increase in variable investment income associated with joint venture and limited partnership investments:
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• The average invested assets at amortized cost, excluding spread related business, totaled $45.6 billion and $38.5 billion in 2025 and 2024, respectively.
• The average yield earned on investments, excluding spread related business, was 4.99% and 4.82% in 2025 and 2024, respectively. The increase in yield for the year ended December 31, 2025, compared to the prior year was primarily due to higher risk-free rates earned on new investments, an increase in variable investment income associated with joint venture and limited partnership investments, and higher yields on alternative investments.
The average yield will vary from year to year depending on several variables, including the prevailing risk-free 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. Variable investment income from joint ventures and limited partnerships will also vary from year to year and is highly dependent on the timing of dividends and distributions on certain investments. Investment income is allocated to the operating segments based upon average assets and related capital levels deemed appropriate to support segment operations.
Results of Operations by Segment
As noted above, adjusted operating income (loss) before income taxes, when presented at a segment level, is a measure reported to the Company’s management for purposes of making decisions about allocating resources to the Company’s business segments and assessing the performance of the business segments, and is presented in the Company’s financial statement footnotes in accordance with U.S. GAAP. The Company’s significant segment expenses are (1) adjusted claims and other policy benefits, which exclude the non-economic losses at contract inception for direct pension risk transfer single premium business, (2) future policy benefits remeasurement gains and losses, (3) adjusted interest credited, which excludes the change in the fair value of embedded derivatives associated with indexed products and (4) interest expense. See Note 19 – “Segment Information” in the Notes to Consolidated Financial Statements for additional information regarding the presentation of segment results and the Company’s definition of adjusted operating income.
U.S. and Latin America Operations
The U.S. and Latin America operations consist of two major segments: Traditional and Financial Solutions. The Traditional segment primarily specializes in the reinsurance of individual mortality risk, long-term care, universal life products and, to a lesser extent, group life reinsurance. The Financial Solutions segment consists of Asset-Intensive and Capital Solutions. Asset-Intensive within the Financial Solutions segment includes coinsurance of products which primarily exhibit interest rate and market risks such as annuities, corporate-owned life insurance policies, PRT group annuity contracts, indexed and variable life insurance and, to a lesser extent, fee-based synthetic guaranteed investment contracts, which include investment-only, stable value contracts. Capital Solutions within the Financial Solutions segment primarily involves assisting ceding companies in meeting applicable regulatory requirements by enhancing the ceding companies’ financial strength and regulatory surplus position through relatively low risk reinsurance and other transactions. 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.
On July 31, 2025, the Company’s U.S. and Latin America Financial Solutions segment executed reinsurance contracts with subsidiaries of Equitable Holdings, pursuant to which it assumed a 75% quota share of Equitable Holding’s in-force individual life insurance liabilities on a coinsurance and modified coinsurance basis, consisting of approximately $12 billion, of a diversified mix of life products and account value liabilities.
The following table sets forth the U.S. and Latin America operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
For the year ended December 31,
Total segment revenues
Total adjusted benefits and expenses
Adjusted operating income before income taxes
The increase in adjusted operating income before income taxes was primarily due to the contribution from the third quarter transaction with Equitable Holdings, partially offset by the decrease in the Traditional segment resulting from less favorable management actions, compared to the prior year, and the unfavorable financial impact of claims experience in the current year.
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Traditional Reinsurance
The following table sets forth the U.S. and Latin America Traditional segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains, net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Life reinsurance in force
$1,893.4 billion
$1,837.1 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Loss ratio (1)
Policy acquisition costs and other insurance expenses as a percentage of net premiums
Other operating expenses as a percentage of net premiums
(1) Includes Adjusted claims and other policy benefits and Future policy benefits remeasurements (gains) losses.
The decrease in adjusted operating income before income taxes for the U.S. and Latin America Traditional segment was primarily the result of less favorable management actions and unfavorable claims experience in individual life and group health business in the current year.
Segment revenues
• The increase in net premiums and net investment income was primarily due to new business growth from recently executed in force transactions.
• The segment added new life business production, measured by face amount of reinsurance in force, of $210.4 billion and $267.9 billion during 2025 and 2024, respectively.
Adjusted benefits and expenses
• The increase in adjusted claims and other policy benefits was primarily due to new business growth from recently executed in force transactions and unfavorable claims experience in individual life and group health business.
• During the third quarter of 2025, the Company completed its annual assumptions review resulting in a net favorable assumption update totaling $39 million, primarily due to updated mortality assumptions. The 2024 annual assumption update resulted in a net loss of $53 million in the third quarter of 2024. The 2024 assumption update included the impact of increasing the Company’s per life retention limit from $8 million to $30 million which resulted in a remeasurement loss of $83 million. See Note 5 – “Future Policy Benefits” for additional information.
• The reduction in future policy benefits remeasurement gains was due to lower remeasurement gains recognized in the current year as a result of management in force actions, offset by the unfavorable impact of the change in the Company’s per life retention limit in the prior year.
• The increases in adjusted interest credited and policy acquisition costs and other insurance expenses were due to new business growth from recently executed in force transactions.
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Financial Solutions
The following table sets forth the U.S. and Latin America Financial Solutions segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
The increase in adjusted operating income was primarily the result of the transaction with Equitable Holdings during the year. This transaction increased the U.S. Financial Solutions adjusted operating income before income taxes by $68 million during 2025, which was offset by the run-off of existing in force transactions.
Segment revenues
• The decrease in net premiums was primarily driven by larger single premium PRT transactions executed in the prior year, partially offset by premiums related to the Equitable Holdings transaction in the current period.
• The increase in net investment income was primarily due to an increase in the invested asset base supporting asset-intensive transactions.
◦ The book value of the invested asset base supporting asset-intensive transactions increased to $33.7 billion as of December 31, 2025, from $22.0 billion as of December 31, 2024, resulting in an increase in investment income. As of December 31, 2025 and December 31, 2024, $3.2 billion and $3.3 billion, respectively, of the invested assets were funds withheld at interest, of which approximately 90% was associated with two clients.
◦ The increase in the asset base was primarily due to $14.5 billion from new transactions and growth from treaties open to new business, offset by $1.0 billion in run-off of existing in force transactions.
• The increase in other revenues was primarily due to policy charges on universal life-type policies associated with the Equitable Holdings transaction.
Adjusted benefits and expenses
• The decrease in adjusted claims and other policy benefits was primarily due to the PRT transactions executed in the prior year, partially offset by benefits related to the Equitable Holdings transaction in the current period.
• The increase in adjusted interest credited was due to the Equitable Holdings transaction.
Reinsurance of separate accounts
Certain of the Company’s reinsurance contracts, including the Equitable Holdings transaction, reinsure separate account liabilities on a modified coinsurance basis. Under the terms of these arrangements, the ceding companies retain the assets supporting the separate account liabilities. The Company receives a fee based on the policyholders’ account value and is not directly exposed to the investment performance of the separate account assets. Periodic settlements between the Company and the ceding companies are net settled. The Company, having the right of offset, has offset assumed separate account assets and liabilities on its consolidated balance sheet. As of December 31, 2025, and 2024, the Company assumed $16.7 billion and
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$2.5 billion of separate account liabilities. The increase in liabilities in the current year is primarily due to the Equitable Holdings transaction.
Canada Operations
The Canada operations are primarily engaged in traditional reinsurance, which consists mainly of traditional individual life reinsurance, and to a lesser extent creditor, group life and health, critical illness and disability reinsurance. Creditor insurance covers the outstanding balance on personal, mortgage or commercial loans in the event of death, disability or critical illness and is generally shorter in duration than traditional individual life insurance. The Canada Financial Solutions segment consists of longevity, asset-intensive and capital solutions.
The following table sets forth the Canada operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
For the year ended December 31,
Total segment revenues
Total adjusted benefits and expenses
Adjusted operating income before income taxes
The increase in adjusted operating income before income taxes was primarily due to favorable experience in individual life and longevity business, partially offset by unfavorable experience in group business in 2025 as compared to favorable experience in 2024 and lower future policy benefits remeasurement gains.
Foreign currency fluctuations can result in variances in the financial statement line items. Foreign currency fluctuations in the Canadian dollar resulted in a $4 million decrease in adjusted operating income before income taxes in 2025. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.
Traditional Reinsurance
The following table sets forth the Canada Traditional segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Life reinsurance in force
$521.5 billion
$474.2 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Loss ratio (1)
Policy acquisition costs and other insurance expenses as a percentage of net premiums
Other operating expenses as a percentage of net premiums
(1) Includes Adjusted claims and other policy benefits and Future policy benefits remeasurements (gains) losses.
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The increase in adjusted operating income before income taxes in 2025 was primarily due to favorable experience in individual life business as compared to 2024, and organic growth, which was partially offset by unfavorable experience in group business in 2025 as compared to favorable experience group business in 2024 and lower future policy benefits remeasurement gains.
Segment revenues
• The increase in net premiums was primarily due to organic growth, partially offset by unfavorable foreign currency fluctuations.
• The segment added new life business production, measured by face amount of reinsurance in force, of $52.6 billion and $48.0 billion during 2025 and 2024, respectively. In addition to new business, the total reinsurance in force, measured by face amount, increased by $23.1 billion in 2025 due to changes in foreign exchange rates.
• The increase in net investment income was primarily due to increased yield on new investments and an increase in the invested asset base.
Adjusted benefits and expenses
• During the third quarter of 2025, the Company completed its annual assumptions review resulting in a gain of $9 million, primarily due to updated lapse assumptions. The 2024 annual assumptions update resulted in a gain of $2 million in the third quarter of 2024. See Note 5 – “Future Policy Benefits” for additional information.
• The increase in total adjusted benefits and expenses was primarily due to organic growth and unfavorable experience in group business in 2025 as compared to favorable experience in 2024 and lower future policy benefits remeasurement gains, partially offset by favorable experience in individual life business as compared to 2024.
Financial Solutions
The following table sets forth the Canada Financial Solutions segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
The increase in adjusted operating income before income taxes for 2025 was primarily due to more favorable experience in longevity and asset-intensive business. The increases in net premiums, net investment income, adjusted claims and other policy benefits and policy acquisitions costs and other insurance expenses were due to a new transaction executed in the second quarter of 2024.
Europe, Middle East and Africa Operations
EMEA operations consist of two major segments: Traditional and Financial Solutions. The Traditional segment primarily provides reinsurance through yearly renewable term and coinsurance agreements on a variety of life, health and critical illness products. Reinsurance agreements may be facultative or automatic agreements covering primarily individual risks and, in some markets, group risks. The Financial Solutions segment consists of reinsurance and other transactions associated with longevity closed blocks, payout annuities, capital management solutions and financial reinsurance.
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The following table sets forth the EMEA operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
For the year ended December 31,
Total segment revenues
Total adjusted benefits and expenses
Adjusted operating income before income taxes
The decrease in adjusted operating income before income taxes was primarily due to the unfavorable impact of the Company’s annual assumptions update which resulted in a future policy benefits remeasurement loss of $185 million.
Traditional Reinsurance
The following table sets forth the EMEA Traditional segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Life reinsurance in force
$1,113.1 billion
$970.4 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Loss ratio (1)
Policy acquisition costs and other insurance expenses as a percentage of net premiums
Other operating expenses as a percentage of net premiums
(1) Includes Adjusted claims and other policy benefits and Future policy benefits remeasurements (gains) losses.
The decrease in adjusted operating income before income taxes in 2025 was primarily due to the unfavorable impacts of the Company’s annual assumptions review discussed below.
Segment revenues
• The increase in net premiums was due to increases in business volume on new and existing treaties.
• The segment added new life business production, measured by face amount of life reinsurance in force, of $171.8 billion and $119.5 billion during 2025 and 2024, respectively.
Adjusted benefits and expenses
• The increase in the loss ratio was primarily due to unfavorable assumption updates attributable to updated long-term mortality assumptions in the U.K.
• During the third quarter of 2025, the Company completed its annual assumptions review resulting in a net unfavorable assumption update totaling $222 million, primarily due to updated mortality assumptions in the U.K. to reflect deterioration in mortality improvements and ongoing challenges within the healthcare system. The 2024 annual assumptions update resulted in a loss of $5 million in the third quarter of 2024. See Note 5 – “Future Policy Benefits” for additional information.
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Financial Solutions
The following table sets forth the EMEA Financial Solutions segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
The increase in adjusted operating income before income taxes in 2025 was primarily due to increases in net investment income, growth in closed blocks longevity business and increases in future policy benefits remeasurement gains as a result of the Company’s annual assumptions update discussed below.
Segment revenues
• The increase in net premiums was primarily due to increased volumes on new and existing treaties.
• The increase in net investment income was primarily due to an increase in invested assets supporting the segment.
Adjusted benefits and expenses
• The increase in adjusted claims and other policy benefits was the result of increased volumes of closed block longevity business and asset-intensive transactions.
• During the third quarter of 2025 and 2024, the Company completed its annual assumptions review resulting in a net favorable assumption update totaling $24 million in the third quarter of 2025, primarily due to updated longevity based mortality in the U.K. The 2024 annual assumptions update resulted in a loss of $3 million in the third quarter of 2024. See Note 5 – “Future Policy Benefits” for more information.
Asia Pacific Operations
The Asia Pacific operations include business generated by the Company’s offices throughout Asia and Australia. The Traditional segment’s principal types of reinsurance include individual and group life and health, critical illness, disability and superannuation. Reinsurance agreements may be facultative or automatic agreements covering primarily individual risks, and in some markets, group risks. Superannuation is the Australian government mandated compulsory retirement savings program. Superannuation funds accumulate retirement funds for employees, and, in addition, typically offer life and disability insurance coverage. The Financial Solutions segment includes financial reinsurance, asset-intensive and certain disability and life blocks.
The following table sets forth the Asia Pacific operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
For the year ended December 31,
Total segment revenues
Total adjusted benefits and expenses
Adjusted operating income before income taxes
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The increase in adjusted operating income before income taxes in 2025 was primarily due to business growth and a future policy benefits remeasurement gain of $1 million, compared to a future policy benefits remeasurement loss of $118 million in 2024, as a result of the Company’s annual assumptions review.
Traditional Reinsurance
The following table sets forth the Asia Pacific Traditional segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Life reinsurance in force
$552.5 billion
$567.6 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
Loss ratio (1)
Policy acquisition costs and other insurance expenses as a percentage of net premiums
Other operating expenses as a percentage of net premiums
(1) Includes Adjusted claims and other policy benefits and Future policy benefits remeasurements (gains) losses.
The increase in adjusted operating income before income taxes in 2025 was primarily the result of continuous growth in traditional reinsurance business and increase in future policy benefits remeasurement gains due to favorable underwriting experience and a future policy benefits remeasurement loss in the amount of $109 million recognized in 2024 as result of the Company’s annual assumptions review.
Segment revenues
• The increase in net premiums was primarily due to continued business growth in the segment.
• The segment added new life business production, measured by face amount of reinsurance in force, of $63.0 billion and $60.7 billion during 2025 and 2024, respectively.
• The increase in net investment income was due to an increase in investment yield and an increase in invested assets.
Adjusted benefits and expenses
• The decrease in the loss ratio for 2025 was primarily due to favorable underwriting experience.
• During 2025 and 2024, the Company updated its actuarial assumptions which resulted in a net favorable assumption update totaling $1 million in 2025, primarily due to updated mortality assumptions. The 2024 annual assumptions update resulted in a loss of $109 million primarily due to updated lapse assumptions in India and an increase in the Company’s per life retention limit. See Note 5 – “Future Policy Benefits” for more information.
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Financial Solutions
The following table sets forth the Asia Pacific Financial Solutions segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Total adjusted benefits and expenses
Adjusted operating income before income taxes
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions
Effect of actual variances from expected experience
The increase in adjusted operating income before income taxes in 2025 was due to new business growth and an increase in investment income, primarily from new asset-intensive transactions.
The invested asset base supporting asset-intensive transactions increased to $29.4 billion as of December 31, 2025, from $22.2 billion as of December 31, 2024, primarily due to approximately $3.0 billion in additional assets from recently executed transactions and net organic growth of $4.2 billion from existing in force blocks. The amount of reinsurance assumed from client companies, as measured by pre-tax statutory surplus, risk based capital and other financial reinsurance structures was $2.4 billion and $2.1 billion for the year ended December 31, 2025 and 2024, respectively. Fees earned from this business can vary significantly depending on the size, complexity and timing of the transactions and, therefore, can fluctuate from period to period.
Segment revenues
• The increase in net investment was due to an increase in yields and invested assets.
• The decrease in other revenues was primarily due to lower surrender charges and lapses compared to the prior period.
Adjusted benefits and expenses
• The increase in total adjusted benefits and expenses was due to the growth of asset-intensive business partially offset by future policy benefits remeasurement gains in the current year compared to future policy benefits remeasurement losses in the prior year.
Corporate and Other
Corporate and Other revenues primarily include investment income from unallocated invested assets and service fees. 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. Additionally, Corporate and Other includes results from the Company’s FABNs issued prior to January 1, 2025. Effective January 1, 2025, newly issued FABN issuances are included in the U.S. Financial Solutions segment.
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The following table sets forth the Corporate and Other segment operating results for the periods indicated (dollars in millions):
For the year ended December 31,
Segment revenues
Net premiums
Net investment income
Investment related gains (losses), net
Other revenues
Total segment revenues
Adjusted benefits and expenses
Adjusted claims and other policy benefits
Future policy benefits remeasurement (gains) losses
Adjusted interest credited
Policy acquisition costs and other insurance expenses
Other operating expenses
Interest expense
Total adjusted benefits and expenses
Adjusted operating loss before income taxes
The increase in adjusted operating loss before income taxes in 2025 was primarily due to an increase in interest expense, policy acquisition costs and other insurance expenses, adjusted interest credited and other operating expenses, partially offset by an increase in net investment income.
Segment revenues
• The increase in net investment income was primarily due to a higher invested asset base.
• The increase in other revenues is the result of foreign exchange gains and other fee income.
Adjusted expenses
• The increase in interest expense was primarily due to an increase in outstanding debt.
• The increase in policy acquisition costs and other insurance expenses was primarily due to a decrease in charges to the segments for excess capital utilized above the allocated economic capital basis.
• The increase in adjusted interest credited was primarily due to new FABN issuances in the second half of 2024.
• The increase in other operating expenses was primarily due to an increase in compensation expense, compliance costs and information technology expense.
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Liquidity and Capital Resources
Overview
The Company believes that cash flows from the source of funds available to it will provide sufficient cash flows for the next twelve months and the foreseeable future thereafter to satisfy the current liquidity requirements of the Company under various scenarios that include the potential risk of early recapture of reinsurance treaties, market events and higher than expected claims. The Company performs periodic liquidity stress testing to ensure that its asset portfolio includes sufficient high quality liquid assets that could be utilized to bolster its liquidity position under stress scenarios. These assets could be utilized as collateral for secured borrowing transactions with various third parties or by selling the securities in the open market if needed. The Company’s liquidity requirements have been and will continue to be funded through net cash flows from operations. However, in the event of significant unanticipated cash requirements beyond normal liquidity needs, the Company has multiple liquidity alternatives available based on market conditions and the amount and timing of the liquidity need. These alternatives include the sale of invested assets subject to market conditions, borrowings under committed credit facilities, secured borrowings, and if necessary, issuing long-term debt, preferred securities or common equity.
Current Market Environment
The Company’s average investment yield, excluding spread related business, for 2025 was 4.99%, 17 basis points higher than the same period in 2024, primarily attributable to higher new money rates and increased allocation to higher yielding private and alternative assets. The average yield will vary from year to year depending on several variables, including the prevailing risk-free 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. Variable investment income from joint ventures and limited partnerships will also vary from year to year and is highly dependent on the timing of dividends and distributions on certain investments. Gross unrealized gains on fixed maturity securities available-for-sale increased from $1.2 billion as of December 31, 2024, to $1.7 billion as of December 31, 2025. Additionally, gross unrealized losses increased from $6.4 billion as of December 31, 2024, to $7.0 billion as of December 31, 2025.
The Company continues to be in a position to hold any investment security showing an unrealized loss until recovery, provided that it remains comfortable with the credit of the issuer. The Company does not rely on short-term funding or commercial paper and to date has experienced no liquidity pressure and does not anticipate such pressure in the foreseeable future.
The Company projects its reserves to be sufficient and does not expect to be required to take any actions to augment capital, even if interest rates remain at current levels for the next five years, assuming all other factors remain constant. To mitigate disintermediation risk, the Company purchased swaptions to protect it against a material increase in interest rates. While the Company has felt the pressures of sustained low interest rates, followed by the significant increases in risk-free rates, and volatile equity markets, its business and results of operations are not overly sensitive to these risks. Mortality and morbidity risks continue to be the most significant risk for the Company. Although management believes that the Company’s current capital base is adequate to support its business at current operating levels, it continues to monitor new business opportunities and any associated new capital needs that could arise from the changing financial landscape.
The Holding Company
RGA is an insurance holding company whose primary uses of liquidity include, but are not limited to, the immediate capital needs of its operating companies, dividends paid to its shareholders, repurchase of common stock and interest payments on its indebtedness. The primary sources of RGA’s liquidity include proceeds from its capital-raising efforts, interest income on undeployed corporate investments, interest income received on surplus notes with RGA Reinsurance, RGA Life and Annuity and Rockwood Re, and dividends from operating subsidiaries. As the Company continues its growth efforts, RGA will continue to be dependent upon these sources of liquidity. See “Part IV – Item 15(a)(2) Financial Statement Schedules – Schedule II – Condensed Financial Information of Registrant” for more information regarding RGA’s financial information.
RGA, through wholly-owned subsidiaries, has committed to provide statutory reserve support to third parties, in exchange for a fee, by funding loans if certain defined events occur. Such statutory reserves are required under the U.S. Valuation of Life Policies Model Regulation (commonly referred to as Regulation XXX for term life insurance policies and Regulation A-XXX for universal life secondary guarantees). The third parties have recourse to RGA should the subsidiary fail to provide the required funding, however, as of December 31, 2025, 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. 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 maintains 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. The intercompany revolving credit facility,
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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 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 no borrowings outstanding under the intercompany revolving credit facility as of December 31, 2025 and 2024. 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 $6 million as of December 31, 2025 and 2024. Additionally, RGA and its subsidiary, RGA Americas, provided loans to RGA International Reinsurance Company dac with a total outstanding balance of $136 million and $120 million as of December 31, 2025 and 2024, respectively.
RGA maintains 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. Cash surplus in RGA or its affiliates accounts is transferred to the concentration account and any deficit is funded by the concentration account, thereby creating a loan balance. RGA and its subsidiaries participating in the pool are paid or charged an arm’s length interest rate based on the net loan balance with the concentration account.
Undistributed earnings of RGA’s foreign subsidiaries are generally targeted for reinvestment outside of the U.S. As of December 31, 2025, the amount of cash and cash equivalents and short-term investments held by the Company’s subsidiaries that are taxed in a foreign jurisdiction was $981 million. The Global Intangible Low-Taxed Income (“GILTI”) and Subpart F provisions hereof generally eliminate U.S. federal income tax deferral on earnings of foreign subsidiaries, while the dividend received deduction generally allows for tax-free repatriation of any untaxed earnings. Therefore, the Company does not expect to incur any material incremental U.S. federal income tax on repatriation of these earnings. Incremental foreign withholding taxes are not expected to be material.
RGA endeavors to maintain a capital structure that provides financial and operational flexibility to its subsidiaries, credit ratings that support its competitive position in the financial services marketplace, and shareholder returns. As part of the Company’s capital deployment strategy, RGA has 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. During the year ended December 31, 2025, the Company repurchased 673,114 shares of common stock under this program.
On January 29, 2026, the 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. This authorization replaces the stock repurchase authorization granted by the board in 2024.
Repurchases will be made in accordance with applicable securities laws and would be made through market transactions, block trades, privately negotiated transactions or other means, or a combination of these methods, with the timing and number of shares repurchased dependent on a variety of factors, including share price, corporate and regulatory requirements, and market and business conditions. Repurchases may be commenced or suspended from time to time without prior notice.
Details underlying dividend and share repurchase program activity were as follows (in millions, except share data):
Dividends to shareholders
Purchase of common stock (1)
Total amount paid to shareholders
Number of common shares purchased (1)
Average price per share
(1) Excludes shares utilized to execute and settle certain equity-based compensation awards.
RGA declared dividends totaling $3.64 per share in 2025. 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. The amount of dividends that RGA can pay will depend in part on the operations of its insurance subsidiaries.
See Note 18 – “Financing Activities” and Note 20 – “Equity” in the Notes to Consolidated Financial Statements for additional information regarding the Company’s securities transactions.
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Statutory Dividend Limitations
RGA Life and Annuity, RGA Reinsurance, Aurora National and Chesterfield Re are subject to Missouri statutory provisions that restrict the payment of dividends. They may not pay dividends in any 12-month period in excess of the greater of the prior year’s statutory net gain from operations or 10% of statutory capital and surplus at the preceding year-end, without regulatory approval. The applicable statutory provisions only permit an insurer to pay a shareholder dividend from unassigned surplus. 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 MDCI allows RGA Life and Annuity to pay a dividend to RGA to the extent that RGA Life and Annuity received the dividend from its subsidiaries, without limitation related to the level of unassigned surplus. Dividend payments from other subsidiaries are subject to regulations in the jurisdiction of domicile, which are generally based on their earnings and/or capital level.
The dividend limitations for RGA Life and Annuity, RGA Reinsurance, Aurora National and Chesterfield Re are based on their statutory financial results. Statutory accounting practices differ in certain respects from accounting principles used in financial statements prepared in conformity with GAAP. Significant differences include the treatment of deferred acquisition costs, deferred income taxes, required investment reserves, reserve calculation assumptions and surplus notes.
Dividend payments from non-U.S. subsidiaries are subject to similar restrictions established by local regulators. The non-U.S. regulatory regimes also commonly limit the dividend payments to the parent to a portion of the subsidiary’s prior year’s statutory income, as determined by the local accounting principles. The regulators of the Company’s non-U.S. subsidiaries may also limit or prohibit profit repatriations or other transfers of funds to the U.S. if such transfers are deemed to be detrimental to the solvency or financial strength of the non-U.S. subsidiaries, or for other reasons. Most of the non-U.S. operating subsidiaries are second tier subsidiaries that are owned by various non-U.S. holding companies. The capital and rating considerations applicable to the first tier subsidiaries may also impact the dividends paid to RGA.
Debt
Certain of the Company’s debt agreements contain financial covenant restrictions related to, among others, liens, the issuance and disposition of stock of restricted subsidiaries, minimum requirements of consolidated net worth, maximum ratios of debt to capitalization and change of control provisions. The Company may borrow up to $850 million in cash and obtain letters of credit in multiple currencies on its syndicated credit facility that matures in August 2028. Under the terms of this facility the Company is required to maintain a minimum consolidated net worth, as defined in the debt agreements, of $5.8 billion. Also, consolidated indebtedness, calculated as of the last day of each fiscal quarter, cannot exceed 35% of the sum of the Company’s consolidated indebtedness plus adjusted RGA Inc’s shareholders’ equity. A material ongoing covenant default could require immediate payment of the amount due, including principal, under the Company’s various debt agreements. Additionally, the Company’s debt agreements contain cross-acceleration covenants, which would make outstanding borrowings immediately payable in the event of a material uncured covenant default under any of the agreements, including, but not limited to, non-payment of indebtedness when due for an amount in excess of the amounts set forth in those agreements, bankruptcy proceedings, or any other event that results in the acceleration of the maturity of indebtedness.
As of December 31, 2025 and 2024, the Company had $5.8 billion and $5.1 billion, respectively, in outstanding borrowings under its debt agreements and was in compliance with all covenants under those agreements. As of December 31, 2025 and 2024, the average interest rate on long-term debt outstanding was 5.33% and 5.16%, respectively. The ability of the Company to make debt principal and interest payments depends on the earnings and surplus of its subsidiaries, investment earnings on undeployed capital proceeds, available liquidity at the holding company, and the Company’s ability to raise additional funds.
On March 3, 2025, the Company issued 6.65% fixed-rate reset subordinated debentures due 2055 with a face amount of $700 million, proceeds were used for general corporate purposes, including funding the Company’s obligations with respect to the reinsurance transaction executed with Equitable Holdings which was completed on July 31, 2025. Capitalized issuance costs were $9 million.
On May 13, 2024, the Company issued 5.75% fixed rate Senior Notes due 2034 with a face amount of $650 million, proceeds were used for general corporate purposes. Capitalized issuance costs were $6 million.
The Company enters into derivative agreements with counterparties that reference either the Company’s debt rating or its financial strength rating. If either rating is downgraded in the future, it could trigger certain terms in the Company’s derivative agreements, which could negatively affect overall liquidity. For the majority of the Company’s derivative agreements, there is a termination event, should the long-term senior debt ratings drop below either BBB+ (S&P) or Baa1 (Moody’s) or the financial strength ratings drop below either A- (S&P) or A3 (Moody’s).
Based on the historic cash flows and the current financial results of the Company, management believes that RGA’s cash flows will be sufficient to enable RGA to meet its obligations for at least the next twelve months.
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Credit and Committed Facilities
The Company has obtained bank letters of credit in favor of various affiliated and unaffiliated insurance companies from which the Company assumes business. These letters of credit represent guarantees of performance under the reinsurance agreements and allow ceding companies to take statutory reserve credits. Certain of these letters of credit contain financial covenant restrictions similar to those described in the “Debt” discussion above. At December 31, 2025, there were approximately $398 million of outstanding bank letters of credit in favor of third parties. Additionally, in accordance with applicable regulations, the Company utilizes letters of credit to secure statutory reserve credits when it retrocedes business to its affiliated subsidiaries. The Company retrocedes business to its affiliates to help reduce the amount of regulatory capital required in certain jurisdictions, such as the U.S., Canada and U.K. The Company believes that the capital required to support the business retroceded to its affiliates reflects more realistic expectations than the original jurisdiction in which the business was written, where capital requirements are often considered to be conservative. As of December 31, 2025, $673 million in letters of credit from various banks were outstanding, but undrawn, backing reinsurance between various subsidiaries of the Company. See Note 18 – “Financing Activities” in the Notes to Consolidated Financial Statements for information regarding the Company’s letter of credit facilities.
On March 13, 2023, the Company entered into a syndicated revolving credit facility with a five-year term and an overall capacity of $850 million. See Note 18 – “Financing Activities” in the Notes to Consolidated Financial Statements for further information.
On June 4, 2025, the Company entered into a 30-year facility agreement with a Delaware trust that gives the Company the right, from time to time, to issue up to $1.0 billion of its 6.722% senior notes due 2055 in exchange for a corresponding amount of U.S. Treasury securities held by the trust. The Company can redeem the 6.722% senior notes due 2055 at any time, in whole or in part, at a price equal to the greater of par or a make-whole redemption price. There have been no senior note issuances by the Company under this facility agreement. See Note 18 – “Financing Activities” in the Notes to Condensed Consolidated Financial Statements for additional information.
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. Assets in trust and letters of credit are often used as collateral in these arrangements.
Regulation XXX, implemented in the U.S. for various types of life insurance business beginning January 1, 2000, significantly increased the level of reserves that U.S. life insurance and life reinsurance companies must hold on their statutory financial statements for various types of life insurance business, primarily certain level premium term life products. The reserve levels required under Regulation XXX increase over time and are normally in excess of reserves required under GAAP. In situations where primary insurers have reinsured business to reinsurers that are neither licensed nor accredited nor recognized as certified or reciprocal reinsurers in the U.S., the reinsurer must provide collateral equal to its reinsurance reserves in order for the ceding company to receive statutory financial statement credit. In order to manage the effect of Regulation XXX on its statutory financial statements, RGA Reinsurance has retroceded a majority of Regulation XXX reserves to affiliated reinsurers, both licensed and unlicensed.
The NAIC amended the standard valuation law to adopt life PBR which became effective on January 1, 2017, and allowed a three-year adoption period. Under PBR, which was adopted in 2020, reserves are determined based on terms of the reinsurance agreement which may differ from those of the direct policies.
Statutory capital of an insurer may be significantly reduced if it cedes business to an unlicensed, uncertified or non-reciprocal jurisdiction reinsurer regardless of affiliation with the insurer, and that reinsurer is unable to provide the required collateral to support its statutory reserve credits and it cannot find an alternative source for collateral. The demand for financing of the ceded reserve credits associated with the Company’s assumed term life business has grown at a slower rate in recent years. 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. The Company’s PBR and Regulation XXX statutory reserve requirements associated with term life business and other statutory reserve requirements continue to require the Company to obtain additional letters of credit, put additional assets in trust, or utilize other funding mechanisms to support reserve credits of its U.S. domiciled operating company subsidiaries. If the Company is unable to support the reserve credits, the regulatory capital levels of several of its subsidiaries may be significantly reduced, while the regulatory capital requirements for these subsidiaries would not change. The reduction in regulatory capital would not directly affect the Company’s consolidated shareholders’ equity under GAAP; however, it could affect the Company’s ability to write new business and retain existing business.
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Affiliated captives are commonly used in the insurance industry to help manage statutory reserve and collateral requirements. The NAIC analyzed the insurance industry’s use of affiliated captive reinsurers to satisfy certain reserve requirements and in 2014 adopted measures to promote uniformity in both the approval and supervision of such captives reinsuring business subject to Regulation XXX, allowing current captives to continue in accordance with their currently approved plans. Reinsuring business subject to the additional provisions of Actuarial Guideline 48 increases costs and adds complexity.
It is possible that the NAIC could place limits on the recognition of the Company’s capital held in related party captives with respect to its group calculation. Doing so would adversely impact the amount of capital that the group would otherwise be able to recognize and report as capital resident in the group, potentially requiring the Company to restructure or change the financing of its captives.
In the U.S., the introduction of the certified jurisdiction reinsurer has provided an alternative way to manage collateral requirements. In 2014, RGA Americas was designated as a certified jurisdiction reinsurer by the MDCI. In addition, the introduction of the reciprocal jurisdiction reinsurer has provided another way to manage collateral requirements. In 2022, RGA Americas was designated as a reciprocal jurisdiction reinsurer by the MDCI. These designations allow the Company to retrocede business to RGA Americas in lieu of using captives for collateral requirements. In 2024, RGA Americas’ status as a reciprocal jurisdiction reinsurer has been approved by 21 states. In 2024, RGA International was also approved as a reciprocal jurisdiction reinsurer effective January 1, 2025.
Assets in Trust
The Company enters into reinsurance treaties in the ordinary course of business. In some cases, if the credit rating and/or defined statutory measures of the Company declines to certain levels, the reinsurance treaty would require the Company to post collateral or additional collateral to secure the Company’s obligations under such reinsurance treaty, obtain guarantees, permit the ceding company to recapture such reinsurance treaty, or some other negotiated remedy. As of December 31, 2025, 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.
In addition, certain reinsurance treaties require the Company to place assets in trust at the time of closing to collateralize its obligations to the ceding company. Assets placed in trust continue to be owned by the Company, but their beneficial ownership and use are restricted by the terms of the trust agreement. Securities with an amortized cost of $2.0 billion were held in trust for the benefit of the Company’s subsidiaries to satisfy collateral requirements for reinsurance business as of December 31, 2025. Additionally, securities with an amortized cost of $68.2 billion as of December 31, 2025, were held in trust to satisfy collateral requirements under certain third-party reinsurance treaties. Under certain conditions, the Company may be obligated to move reinsurance from one subsidiary to another subsidiary, post additional collateral or make payments under a given reinsurance treaty. These conditions include change in control or ratings of the subsidiary, insolvency, nonperformance under a reinsurance treaty, or loss of license or other regulatory authorization of such subsidiary. If the Company was ever required to move reinsurance from one subsidiary to another subsidiary, the risk to the Company on a consolidated basis under the reinsurance treaties would not change; however, additional collateral may need to be posted or additional capital may be required due to the change in jurisdiction of the subsidiary reinsuring the business, which could lead to a on liquidity.
Reinsurance Operations
Reinsurance agreements generally provide for recapture of the policy risk assumed by the Company, whether due to a reinsurer default or insolvency or based on the type of product reinsured. Many reinsurance agreements where policy risk is assumed on a continual basis include the ability to terminate the agreement for future business while remaining in effect for policies already assumed. Recapture of business previously ceded does not affect premiums ceded prior to the recapture of such business but would reduce premiums in subsequent periods. Upon recapture, the Company would reflect a net gain or loss on the settlement of the assets and liabilities associated with the reinsurance treaty. In some cases, the ceding company is required to pay the Company a recapture fee. In some situations, the Company has the right to place assets in trust for the benefit of the ceding company in lieu of recapture. Additionally, certain treaties may grant recapture rights to ceding companies in the event of a significant decrease in RGA Reinsurance’s NAIC RBC ratio or financial strength rating. The RBC ratio trigger varies by treaty. Financial strength rating triggers vary by reinsurance treaty with the majority of the triggers reached if the Company’s financial rating falls five notches from its current rating of “AA-” to the “BBB” level on the S&P scale. Recapture of business previously ceded does not affect premiums ceded prior to the recapture of such business but would reduce premiums in subsequent periods. Upon recapture, the Company would reflect a net or on the settlement of the assets and liabilities associated with the reinsurance treaty. In some cases, the ceding company is required to pay the Company a recapture fee.
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Guarantees
The Company has issued guarantees and or other forms of capital support to third parties, including state insurance regulators, 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 limited circumstances, treaty guarantees are granted to ceding companies in order to provide additional security, particularly in cases where the Company’s subsidiary is relatively new, unrated, or not of significant size, relative to the ceding company. Potential guaranteed amounts of future payments will vary depending on production levels and underwriting results. Guarantees related to borrowed securities provide additional security to third parties should a subsidiary fail to return the borrowed securities when due. The Company has issued payment guarantees on behalf of two of its subsidiaries in the event the subsidiaries fail to make payment under their office lease obligations.
RGA, Inc. and several of its subsidiaries, are obligors to various capital maintenance agreements with its subsidiaries. Under these agreements, the obligor guarantees for specified periods of time (depending on jurisdiction) that the applicable subsidiary will meet specified capital and surplus levels. Given the amount of business that has been and is expected to be written by the applicable subsidiaries benefiting from these agreements, the Company anticipates that the obligors will have sufficient liquidity and capital to meet any obligations under these agreements.
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. Since this indemnity generally is not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount due under this indemnity in the future.
Off-Balance Sheet Arrangements
The Company has commitments to fund investments in limited partnerships, joint ventures, 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.
The Company has not engaged in trading activities involving non-exchange-traded contracts reported at fair value, nor has it engaged in relationships or transactions with persons or entities that derive benefits from their non-independent relationship with the Company.
Cash Flows
The Company’s principal cash inflows from its reinsurance operations include premiums and deposit funds received from ceding companies. The primary liquidity concerns with respect to these cash inflows are early recapture of the reinsurance contract by the ceding company and lapses of annuity products reinsured by the Company. The Company’s principal cash inflows from its invested assets result from investment income and the maturity and sales of invested assets. The primary liquidity concerns with respect to these cash inflows relate to the risk of default by issuers and interest rate volatility. The Company manages these risks very closely. See “Investments” and “Interest Rate Risk” below.
Additional sources of liquidity to meet unexpected cash outflows in excess of operating cash inflows and current cash and equivalents on hand include the following:
• Revolving credit facility – Drawing funds under a syndicated revolving credit facility, under which the Company had availability of $850 million as of December 31, 2025. As of December 31, 2025, the Company had no amounts outstanding under the revolving credit facility.
• Federal Home Loan Bank (“FHLB”) – The Company has $566 million of funds available through collateralized borrowings from the FHLB of Des Moines as of December 31, 2025.
• Facility Agreement for Senior Notes Issuances – On June 4, 2025, the Company entered into a facility agreement with a Delaware trust that gives the Company the right to issue to the trust, from time to time, over a 30-year period, up to $1 billion of its 6.722% senior notes due 2055 in exchange for a corresponding amount of U.S. Treasury securities held by the trust. By agreeing to purchase the senior notes in exchange for U.S. Treasury securities upon exercise of the issuance right, the trust will provide a source of liquid assets for the Company. There have been no senior note issuances by the Company under this facility agreement as of December 31, 2025.
• Committed Credit Facility – The Company’s subsidiaries, RGA Reinsurance Company and RGA Americas Reinsurance Company, Ltd. maintain a $200 million committed credit facility with a third-party financial institution to provide contingent capital to these entities.
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As of December 31, 2025, the Company could have borrowed these additional amounts without violating any of its existing debt covenants. For additional information, including with respect to the Company’s four committed credit facilities and eight uncommitted letter of credit facilities, see Note 18 – “Financing Activities” in the Notes to Consolidated Financial Statements.
The Company’s principal cash outflows relate to the payment of claims liabilities, interest credited, operating expenses, income taxes, dividends to shareholders, share repurchases, and principal and interest under debt and other financing obligations. The Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance enterprises or reinsurers under excess coverage and coinsurance contracts (See Note 2 – “Significant Accounting Policies and Pronouncements” in the Notes to Consolidated Financial Statements). The Company performs annual financial reviews of its retrocessionaires to evaluate financial stability and performance. The Company has never experienced a material default in connection with retrocession arrangements, nor has it experienced any difficulty in collecting claims recoverable from retrocessionaires; however, no assurance can be given as to the future performance of, or the recoverability of future claims from such retrocessionaires. The Company’s management believes that its cash and cash equivalents along with its current sources of liquidity are adequate to meet its cash requirements for the next twelve months.
Summary of Primary Sources and Uses of Liquidity and Capital
The Company’s primary sources and uses of liquidity and capital are summarized as follows (dollars in millions):
For the years ended December 31,
Sources:
Net cash provided by operating activities
Proceeds from long-term debt issuance, net
Treasury stock reissued
Change in cash collateral for derivatives and repurchase/reverse repurchase agreements
Change in deposit asset on reinsurance
Net deposits from investment-type policies and contracts
Effect of exchange rate changes on cash
Total sources
Uses:
Net cash used in investing activities
Dividends to shareholders
Principal payments of long-term debt
Purchases of treasury stock
Net withdrawals from investment-type policies and contracts
Effect of exchange rate changes on cash
Total uses
Net change in cash and cash equivalents
Cash Flows from Operations – The principal cash inflows from the Company’s reinsurance activities come from premiums, investment and fee income, annuity considerations and deposit funds. The principal cash outflows relate to the liabilities associated with various life and health insurance, annuity and disability products, operating expenses, income tax and interest on outstanding debt obligations. The primary liquidity concern with respect to these cash flows is the risk of shortfalls in premiums and investment income, particularly in periods with abnormally high claims levels.
Cash Flows from Investments – The principal cash inflows from the Company’s investment activities come from repayments of principal on invested assets, proceeds from sales and maturities of invested assets, and settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments, issuances of policy loans and settlements of freestanding derivatives. The Company typically has a net cash outflow from investing activities because cash inflows from insurance operations are reinvested in accordance with its asset/liability management discipline to fund insurance liabilities. The Company closely monitors and manages these risks through its credit risk management process. The primary liquidity concerns with respect to these cash flows are the risk of default by issuers and market disruption, which could make it difficult for the Company to sell investments.
Financing Cash Flows – The principal cash inflows from the Company’s financing activities come from issuances of debt and equity securities, and deposit funds associated with universal life and other investment type policies and contracts. The principal financing cash outflows are the repayments of debt and securitization notes, payments of dividends to shareholders,
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purchases of treasury stock, and withdrawals associated with universal life and other investment type policies and contracts. A primary liquidity concern with respect to these cash flows is the risk of early contractholder and policyholder withdrawal.
Contractual Obligations
The following table summarizes the Company’s contractual obligations, including obligations arising from its reinsurance business (in millions):
Payment Due by Period
Total
Less than 1 Year
1 – 3 Years
4 – 5 Years
After 5 Years
Future policy benefits (1)
Interest-sensitive contract liabilities (2)
Long-term debt, including interest
Other policy claims and benefits
Operating leases
Limited partnership interests and real estate joint ventures
Payables for collateral received under derivative transactions
Other investment related commitments
Total
(1) Future policy benefits are primarily related to the Company’s reinsurance of life and health insurance products. The amounts presented in the table above represent the estimated benefit obligations as they become due, and also include estimated future premiums on policies in force, allowances and other amounts due to or from the ceding companies as the result of the Company’s assumptions of mortality, morbidity, policy lapse and surrender risk as appropriate to the respective product. 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 $66.4 billion included on the consolidated balance sheets is less than the sum of the undiscounted estimated cash flows of $82.0 billion shown above. The difference is substantially due to net obligations including estimated future premiums exceeding estimated policy benefit payments and allowances due to the nature of certain reinsurance treaties, which generally have increasing premium rates that exceed the increasing benefit payments. In addition, differences will arise due to changes in the projection of future benefit payments compared with those developed when the reserve was established. Total payments may vary materially from prior years due to the assumption of new reinsurance treaties or as a result of changes in projections of future experience.
(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. All amounts presented above are undiscounted as to interest, and include assumptions related to surrenders, withdrawals, premium persistency, partial withdrawals, surrender charges, annuitizations, mortality, future interest credited rates and policy loan utilization. The sum of the obligations shown for all years in the table of $139.6 billion exceeds the liability amount of $52.1 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.
Excluded from the table above are net deferred income tax liabilities, unrecognized tax benefits, and accrued interest related to unrecognized tax benefits of $2.6 billion, for which the Company cannot reliably determine the timing of payment.
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, 2025, the Company had a net unfunded balance of $49 million related to qualified and nonqualified pension and other postretirement liabilities. 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. The goals of the investment process are to optimize after-tax, risk-adjusted investment income and after-tax, risk-adjusted total return while managing the assets and liabilities on a cash flow and duration basis.
The Company has established target asset portfolios for its operating segments, which represent the investment strategies intended to profitably fund its liabilities within acceptable risk parameters. These strategies include objectives and limits for effective duration, yield curve sensitivity and convexity, liquidity, asset sector concentration and credit quality.
The Company’s asset-intensive products are primarily supported by investments in fixed maturity securities reflected on the Company’s consolidated balance sheets and under funds withheld arrangements with the ceding company. Investment guidelines are established to structure the investment portfolio based upon the type, duration and behavior of products in the liability portfolio so as to achieve targeted levels of profitability. The Company manages the asset-intensive business to provide a targeted spread between the interest rate earned on investments and the interest rate credited to the underlying interest-sensitive contract liabilities. The Company periodically reviews models projecting different interest rate scenarios and their effect on profitability. Certain of these asset-intensive agreements, primarily in the U.S. and Latin America and EMEA
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Financial Solutions operating segments, are generally funded by fixed maturity securities that are withheld by the ceding company.
The Company’s liquidity position (cash and cash equivalents and short-term investments) was $4.5 billion and $3.7 billion as of December 31, 2025 and 2024, respectively. Liquidity needs are determined from valuation analysis conducted by operational units and are driven by product portfolios. Periodic evaluations of demand liabilities and short-term liquid assets are designed to adjust specific portfolios, as well as their durations and maturities, in response to anticipated liquidity needs.
The Company’s security agreements with third parties, certain RGA subsidiaries have entered into intercompany securities lending agreements to more efficiently source securities for lending to third parties and to provide for more efficient regulatory capital management. 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.
The Company is a member of the FHLB and holds $68 million of FHLB common stock, which is included in other invested assets on the Company’s consolidated balance sheets. The Company has entered into funding agreements with the FHLB under guaranteed investment contracts whereby the Company has issued the funding agreements in exchange for cash and for which the FHLB has been granted a blanket lien on the Company’s commercial and residential mortgage-backed securities and commercial mortgage loans used to collateralize the Company’s obligations under the funding agreements. The Company maintains control over these pledged assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. The funding agreements and the related security agreements represented by this blanket lien provide that upon any event of default by the Company, the FHLB’s recovery is limited to the amount of the Company’s liability under the outstanding funding agreements. The amount of the Company’s liability for the funding agreements with the FHLB was $1.3 billion as of December 31, 2025 and 2024, which is included in interest sensitive contract liabilities on the Company’s condensed consolidated balance sheets. The on these agreements are collateralized primarily by commercial and residential mortgage-backed securities, commercial mortgage loans, and U.S. Treasury and government agency securities. The amount of collateral exceeds the liability and is dependent on the type of assets collateralizing the guaranteed investment contracts.
Investments
Management of Investments
The Company’s investment and derivative strategies involve matching the characteristics of its reinsurance products and other obligations. The Company seeks to closely approximate the interest rate sensitivity of the assets with estimated interest rate sensitivity of the reinsurance liabilities. The Company achieves its income objectives through strategic and tactical asset allocations, applying security and derivative strategies within asset/liability and disciplined risk management frameworks. Derivative strategies are employed within the Company’s risk management framework to help manage duration, currency, and other risks in assets and/or liabilities and to replicate the credit characteristics of certain assets. For a discussion of the Company’s risk management process, see “Market and Credit Risk” in the “Enterprise Risk Management” section below.
The Company’s portfolio management groups work with the Enterprise Risk Management function to develop the investment policies for the assets of the Company’s domestic and international investment portfolios. All investments held by the Company, directly or in a funds withheld at interest reinsurance arrangement, are monitored for conformance with the Company’s stated investment policy limits as well as any limits prescribed by the applicable jurisdiction’s insurance laws and regulations. See Note 11 – “Investments” in the Notes to Consolidated Financial Statements for additional information regarding the Company’s investments.
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Portfolio Composition
The Company had total cash and invested assets of $134.6 billion and $101.4 billion as of December 31, 2025 and 2024, respectively, as illustrated below (dollars in millions):
% of Total
% of Total
Fixed maturity securities available-for-sale
Equity securities
Mortgage loans
Policy loans
Funds withheld at interest
Limited partnerships and real estate joint ventures
Short-term investments
Other invested assets
Cash and cash equivalents
Total cash and invested assets
Investment Yield – Excluding Spread Related Business
The following table presents consolidated average invested assets at amortized cost, net investment income, investment yield, variable investment income (“VII”), and investment yield excluding VII, which can vary significantly from period to period (dollars in millions) for the years ended December 31, 2025, 2024 and 2023. The table excludes spread related business. Spread related business is primarily associated with contracts on which the Company earns an interest rate spread between assets and liabilities. To varying degrees, fluctuations in the yield on other spread related business are generally subject to corresponding adjustments to the interest credited on the liabilities.
Average invested assets at amortized cost
Net investment income
Annualized investment yield (ratio of net investment income to average invested assets at amortized cost)
17 bps
14 bps
VII (included in net investment income)
Annualized investment yield excluding VII (ratio of net investment income, excluding VII, to average invested assets, excluding assets with only VII, at amortized cost)
14 bps
32 bps
Investment yield increased between 2024 and 2025 primarily due to increased variable income from limited partnerships along with higher new money rates relative to the existing portfolio yield. Investment yield also increased between 2023 and 2024, primarily due to higher new money rates relative to the existing portfolio yield partially offset by decreased variable income from real estate joint ventures.
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, 2025 and 2024.
Important factors in the selection of investments include diversification, quality, yield, call protection and total rate of return potential. The relative importance of these factors is determined by market conditions and the underlying reinsurance liability and existing portfolio characteristics. As of December 31, 2025 and 2024, approximately 94.3% and 94.6% of total fixed maturity securities were investment grade.
The Company owns floating rate securities that represented approximately 8.9% and 8.1% of total fixed maturity securities as of December 31, 2025 and 2024, respectively. These investments have a higher degree of income variability than the other fixed income holdings in the portfolio due to fluctuations in interest payments. The Company holds floating rate investments to enhance asset management strategies and match certain interest-sensitive contract liabilities.
The largest asset class in which fixed maturity securities were invested was corporate securities, which represented approximately 68.5% and 65.7% of total fixed maturity securities as of December 31, 2025 and 2024, respectively. 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, 2025 and 2024.
As of December 31, 2025 and 2024, the Company’s investments in Canadian government securities represented 5.1% and 6.5%, respectively, of total fixed maturity securities. These assets are primarily high quality, long duration provincial strip
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bonds, the valuation of which is closely linked to the interest rate curve. These assets are longer in duration and held primarily for asset/liability management to meet Canadian regulatory requirements.
As of December 31, 2025 and 2024, the Company’s investments in Japanese government securities represented 4.6% and 5.7%, respectively, of total fixed maturity securities. These assets are primarily long duration government bonds matching the liability profile of the Company’s Japanese business.
The Company references rating agency designations in some of its investments disclosures. These designations are based on the ratings from nationally recognized statistical rating organizations, primarily Moody’s, S&P and Fitch. Structured securities held by the Company’s insurance subsidiaries that maintain the NAIC statutory basis of accounting utilize the NAIC rating methodology. The NAIC assigns designations to publicly traded as well as privately placed securities. The designations assigned by the NAIC range from class 1 to class 6, with designations in classes 1 and 2 generally considered investment grade (BBB or higher rating agency designation). NAIC designations in classes 3 through 6 are generally considered below investment grade (BB or lower rating agency designation). If no rating is available from a rating agency or the NAIC, then an internally developed rating is used.
The quality of the Company’s available-for-sale fixed maturity securities portfolio, as measured at fair value and by the percentage of fixed maturity securities invested in various ratings categories, relative to the entire available-for-sale fixed maturity securities portfolio as of December 31, 2025 and 2024 was as follows (dollars in millions):
NAIC
Designation
Rating Agency
Designation
Amortized Cost
Estimated Fair Value
% of Total
Amortized Cost
Estimated Fair Value
% of Total
AAA/AA/A
BBB
CCC and lower
In or near default
Total
The Company’s fixed maturity portfolio includes structured securities. The following table shows the types of structured securities the Company held as of December 31, 2025 and 2024 (dollars in millions):
Estimated
Fair Value
% of Total
Estimated
Fair Value
% of Total
Amortized Cost
Amortized Cost
ABS:
Collateralized loan obligations (“CLOs”)
ABS, excluding CLOs
Total ABS
CMBS
RMBS:
Agency
Non-agency
Total RMBS
Total
The Company’s ABS portfolio primarily consists of CLOs, aircraft and NAV loans. The principal risks in holding ABS are structural, credit, capital market and interest rate risks. Structural risks include the securities’ cash flow priority in the capital structure and the inherent prepayment sensitivity of the underlying collateral. Credit risks include the adequacy and ability to realize proceeds from the collateral. Credit risks are mitigated by credit enhancements that include excess spread, over-collateralization and subordination. Capital market risks include general level of interest rates and the liquidity for these securities in the marketplace.
The Company’s CMBS portfolio primarily consists of large pool securitizations that are diverse by property type, borrower and geographic dispersion. The principal risks in holding CMBS are structural and credit risks. Structural risks include the securities’ cash flow priority in the capital structure and the inherent prepayment sensitivity of the underlying collateral. Credit risks include the adequacy and ability to realize proceeds from the collateral. The Company focuses on investment grade rated tranches that provide additional credit support beyond the equity protection in the underlying loans. These assets are viewed as an attractive alternative to other fixed income asset classes.
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The Company’s RMBS portfolio includes agency-issued pass-through securities and collateralized mortgage obligations. Agency-issued pass-through securities are guaranteed or otherwise supported by the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, or the Government National Mortgage Association. The principal risks in holding RMBS are prepayment and extension risks, which will affect the timing of when cash will be received and are dependent on the level of mortgage interest rates. Prepayment risk is the unexpected increase in principal payments from the expected, primarily as a result of owner refinancing. Extension risk relates to the unexpected slowdown in principal payments from the expected. In addition, non-agency RMBS face credit risk should the borrower be unable to pay the contractual interest or principal on their obligation. The Company monitors its mortgage-backed securities to mitigate exposure to the cash flow uncertainties associated with these risks.
As of December 31, 2025 and 2024, the Company classified approximately 13.5% and 11.2%, 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.
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.
Mortgage Loans
The Company’s mortgage loan portfolio consists of U.S., Canada and U.K. based investments primarily in retail locations, light industrial properties, and commercial offices. 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. Mortgage loans in the Company’s portfolio range in size up to $57 million, with the average mortgage loan investment as of December 31, 2025, of $7 million.
As of December 31, 2025 and 2024, the Company’s recorded investments in mortgage loans, gross of unamortized deferred loan origination fees and expenses, discounts and allowance for credit losses, were distributed geographically as follows (dollars in millions):
Recorded
Investment
% of Total
Recorded
Investment
% of Total
U.S. Region:
West
South
Midwest
Northeast
Subtotal – U.S.
Canada
United Kingdom
Total
See “Allowance for Credit Losses and Impairments” in Note 2 – “Significant Accounting Policies and Pronouncements” and “Mortgage Loans” in Note 11 – “Investments” in the Notes to Consolidated Financial Statements for information regarding the Company’s policy for allowance for credit losses on mortgage loans.
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Allowance for Credit Losses and Impairments
The table below summarizes investment related gains (losses), net, related to allowances for credit losses and impairments for the years ended December 31, 2025 and 2024 (dollars in millions):
Change in allowance for credit losses on fixed maturity securities
Impairments on fixed maturity securities
Change in mortgage loan allowance for credit losses
Limited partnership and real estate joint ventures impairment losses
Other change in allowance for credit losses and impairments
Investment related gains (losses) related to credit losses and impairments
The Company’s determination of whether a decline in value necessitates the recording of an allowance for credit losses includes an analysis of whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment. See “Allowance for Credit Losses and Impairments” in Note 2 – “Significant Accounting Policies and Pronouncements” for additional information.
As of December 31, 2025 and 2024, the Company had $7.0 billion and $6.4 billion, respectively, of gross unrealized losses related to its fixed maturity securities. The Company monitors its fixed maturity securities to determine impairments in value and evaluates factors such as financial condition of the issuer, payment performance, compliance with covenants, general market and industry sector conditions, current intent and ability to hold securities, and various other subjective factors. 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.
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, 2025 and 2024.
Funds Withheld at Interest
For reinsurance agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis, assets equal to the net statutory reserves are withheld by the ceding company and are legally owned by the ceding company. The Company reflects these assets on its balance sheet as funds withheld at interest. Interest accrues on the total funds withheld at rates defined by the terms of the applicable reinsurance agreement. The Company is subject to the investment performance on such assets, although the Company does not directly control them because such assets are legally owned by the ceding company. To mitigate this risk, investment guidelines are commonly set in the reinsurance agreements which restrict the ceding company’s investment activity with respect to such assets. The Company monitors the ceding company’s compliance with these contractual restrictions. These assets are primarily fixed maturity investment securities and pose investment risks similar to the fixed maturity securities owned by the Company. Ceding companies with funds withheld at interest had an average financial strength rating of “A” as of December 31, 2025 and 2024. Certain ceding companies maintain segregated portfolios for the benefit of the Company.
The majority of the Company’s funds withheld at interest balances are associated with its reinsurance of annuity contracts. The funds withheld receivable balance for segregated portfolios is subject to the general accounting principles for Derivatives and Hedging related to embedded derivatives. Under these principles, the Company’s funds withheld receivable under certain reinsurance arrangements incorporate credit risk exposures that are unrelated or only partially related to the creditworthiness of the obligor and include an embedded derivative feature that is not clearly and closely related to the host contract. Therefore, the embedded derivative feature must be measured at fair value on the consolidated balance sheets and changes in fair value reported in income. See “Embedded Derivatives” in Note 2 – “Significant Accounting Policies and Pronouncements” in the Notes to Consolidated Financial Statements for further discussion.
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Based on data provided by ceding companies as of December 31, 2025 and 2024, funds withheld at interest totaled (dollars in millions):
Underlying Security Type:
Carrying Value
Estimated
Fair Value
Carrying Value
Estimated
Fair Value
Segregated portfolios
Non-segregated portfolios
Embedded derivatives (1)
Total funds withheld at interest
(1) Represents the fair value of embedded derivatives related to reinsurance written on a modco or funds withheld basis and subject to the general accounting principles for Derivatives and Hedging related to embedded derivatives for the segregated portfolios. When the segregated portfolios are presented on a fair value basis in the “Estimated Fair Value” column, the calculation of a separate embedded derivative is not applicable.
Based on data provided by the ceding companies as of December 31, 2025 and 2024, 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. Derivatives consist primarily of S&P 500 options that are used to hedge liabilities and interest credited for EIAs reinsured by the Company. The securities held within the segregated portfolios are primarily investment-grade, with an average rating of “A.” The average maturity for investments held within the segregated portfolios of funds withheld at interest is ten years or more. Interest accrues to the total funds withheld at rates defined by the treaty terms and the Company estimated the yields were approximately 5.11%, 5.85% and 5.12% for the years ended December 31, 2025, 2024 and 2023, respectively. Changes in these estimated yields are affected by changes in the fair value of equity options held in the funds withheld portfolio associated with EIAs. Additionally, under certain treaties the Company is subject to the investment performance on the withheld assets, although it does not directly control them. To mitigate this risk, the Company helps set the investment guidelines followed by the ceding companies and monitors compliance.
Other Invested Assets
Other invested assets primarily include lifetime mortgages, derivative contracts, FHLB common stock and real estate held for investment. 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, 2025 and 2024.
The Company holds $1,197 million and $984 million of beneficial interest in lifetime mortgages in the U.K., net of allowance for credit losses, as of December 31, 2025 and 2024, respectively. Investment income includes $58 million, $48 million and $39 million in interest income earned on lifetime mortgages for the years ended December 31, 2025, 2024 and 2023, respectively. Lifetime mortgages represent loans provided to individuals 55 years of age and older secured by the borrower’s residence. Lifetime mortgages are comparable to a home equity loan by allowing the borrower to utilize the equity in their home as collateral. 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 the borrower or sale of the home. Lifetime mortgages may also be either fully funded at origination, or the borrower can request periodic funding similar to a line of credit. Lifetime mortgages are subject to risks, including market, credit, interest rate, liquidity, operational, reputational and legal risks.
The Company utilizes derivative financial instruments to protect the Company against possible changes in the fair value of its investment portfolio as a result of interest rate changes, to hedge against risk of changes in the purchase price of securities, to hedge liabilities associated with the reinsurance of variable annuities with guaranteed living benefits and to manage the portfolio’s effective yield, maturity and duration. In addition, the Company utilizes derivative financial instruments to reduce the risk associated with fluctuations in foreign currency exchange rates. The Company uses exchange-traded, centrally cleared and customized over-the-counter 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, 2025 and 2024.
The Company may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. 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, 2025, the Company had credit exposure of $16 million.
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. As exchange-traded futures are affected through regulated exchanges, and positions are marked to market on a daily basis, the Company has
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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.
Enterprise Risk Management
RGA maintains a dedicated Enterprise Risk Management (“ERM”) function that is responsible for analyzing and reporting the Company’s risks on an aggregated basis; facilitating monitoring to ensure the Company’s risks remain within its appetites and limits; and ensuring, on an ongoing basis, that RGA’s ERM objectives are met. This includes ensuring proper risk controls are in place; risks are effectively identified, assessed, and managed; and key risks to which the Company is exposed are disclosed to appropriate stakeholders. The ERM function plays an important role in fostering the Company’s risk management culture and practices.
Enterprise Risk Management Structure and Governance
The board of directors (“the Board”) oversees enterprise risk through its Risk Committee, which oversees the management of the Company’s ERM program and policies. The Risk Committee receives regular reports and assessments that describe the Company’s key risk exposures and include quantitative and qualitative assessments and information about breaches, exceptions, and waivers.
The Company’s Global Chief Risk Officer (“CRO”) reports to the Chief Executive Officer (“CEO”) and has direct access to the Board through the Risk Committee with formal reporting occurring quarterly. The CRO leads the dedicated ERM function and is supported by a dedicated risk management staff as well as a network of Business Unit Chief Risk Officers and Risk Owners throughout the business unit who are responsible for the analysis and management of risks within their scope. A Lead Risk Owner is assigned to each risk to take overall responsibility to monitor and assess the risk consistently across all markets.
In addition to leading the ERM function, the CRO also chairs the Company’s Risk Management Steering Committee (“RMSC”), which includes senior management executives, including the CEO, the Chief Financial Officer (“CFO”), Chief Legal Officer, and the Chief Investment Officer, among others. The RMSC provides oversight for the Insurance, Market and Credit, Capital, and Operational, and Sustainability risk committees and retains direct risk oversight responsibilities for the following:
• Company’s global ERM framework, activities and issues.
• Identification, assessments and management of all established and emerging strategic risk exposures.
• Risk appetite statement, including the ongoing alignment of the risk appetite statement with the Company’s strategy and capital plans.
• Review, revise and approve RGA group-level strategic risk limits consistent with the risk appetite statement.
The Insurance, Market and Credit, Capital, Operational, and Sustainability risk committees have direct oversight accountability for their respective risk areas including the identification, assessments, and management of established and emerging risk exposures and the review and approval of RGA group-level risk limits.
To ensure appropriate oversight of enterprise-wide risk management issues without unnecessary duplication, as well as to foster cross-committee communication and coordination regarding risk issues, chairs of the risk committees attend the RMSC meetings. In addition to the risk committees, their sub-committees and working groups, some RGA operating entities have risk management committees that oversee relevant risks related to segment-level risk limits.
Enterprise Risk Management Framework
RGA’s ERM framework provides a platform to assess the risk / return profiles of risks throughout the organization to enable enhanced decision making by business leaders. The ERM framework also guides the development and implementation of mitigation strategies to reduce exposures to these risks to acceptable levels.
RGA’s ERM framework includes the following elements:
• Risk Culture: Risk management is an integral part of the Company’s culture and is embedded in RGA’s business processes in accordance with RGA’s risk philosophy. 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 and Tolerance Framework (“framework”) reflects the Company’s strategy and key aspects of its business. It defines the Company’s willingness and capacity to take on risk, considers the skills, resources and technology required to manage risk exposures in the context of risk appetite, and is
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inclusive of tolerance for loss or negative events that can be reasonably quantified. This framework also defines company-wide risk appetite and tolerance statements, details risk tolerance metrics and provides guidance in relation to risk tolerance utilization monitoring, breaches, and actions. It is then supported by more granular risk limits guiding the businesses to achieve the risk appetite.
• Risk Limits: Risk Limits establish the maximum amount of defined risk that the Company is willing to assume to remain within the Company’s overall risk appetite. These risks have been identified by the management of the Company as relevant to managing the overall risk profile of the Company while allowing the achievement of strategic objectives.
• Risk Assessment Process: RGA uses qualitative and quantitative methods to assess key risks through a portfolio approach, which analyzes established and emerging risks in conjunction with other risks.
• Business Specific Limits/Controls: These limits/controls provide additional safeguards against undesired risk exposures and are embedded in business processes. Examples include maximum retention limits, pricing and underwriting reviews, per issuer limits, concentration limits and standard treaty language.
Proactive risk monitoring and reporting enable early detection and mitigation of emerging risks. The RMSC and its subcommittees monitor adherence to risk limits through the ERM function, which reports regularly to the RMSC and the Board Risk Committee. The frequency of monitoring is tailored to the volatility assessment and relative priority of each risk. Risk escalation channels coupled with open communication lines enhance the mitigations explained above. The Company has devoted significant resources to developing its ERM program and expects to continue to do so in the future. Nonetheless, the Company’s policies and procedures to identify, manage, and monitor risks may not be fully effective. Many of the Company’s methods for managing risk are based on historical information, which may not be a good predictor of future risk exposures, such as the risk of a pandemic causing a large number of deaths. Management of operational, legal, and regulatory risk relies on policies and procedures that may not be fully effective under all scenarios.
Risk Categorie s – The Company groups its risks into the following categories: Insurance risk, Market and Credit risk, Capital risk, Operational risk and Strategic risk. Sustainability risks are integrated across all risk categories within RGA’s ERM framework. Specific risk assessments and descriptions can be found below and in Item 1A – “Risk Factors.”
Insurance Risk
Insurance risk is the risk of lower or negative earnings and potentially a reduction in enterprise value due to a greater amount of benefits and related expenses paid than expected, or from non-market related adverse policyholder or client behavior. 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 Company has developed extensive expertise in assessing insurance risks that ultimately forms an integral part of ensuring that it is compensated commensurately for the risks it assumes and that it does not overpay for the risks it transfers to third parties. This expertise includes a vast array of market and product knowledge supported by a large information database of historical experience that is closely monitored. Analysis and experience studies derived from this database help form the basis for the Company’s pricing assumptions that are used in developing rates for new risks. If actual mortality or morbidity experience is materially adverse, some reinsurance treaties allow for increases to future premium rates.
Misestimation of any key risk can threaten the long-term viability of the enterprise. Further, the pricing process is a key operational risk and significant effort is applied to ensuring the appropriateness of pricing assumptions. Some of the safeguards the Company uses to ensure proper pricing are: experience studies, prudent underwriting, sensitivity and scenario testing, pricing guidelines and controls, authority limits and internal and external pricing reviews. In addition, the ERM function provides pricing oversight that includes periodic pricing audits.
To minimize volatility in financial results and reduce the impact of large losses, the Company transfers some of its insurance risk to third parties using vehicles such as retrocession and catastrophe coverage.
In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of claims paid by ceding reinsurance to other insurance enterprises (or retrocessionaires) under excess coverage and coinsurance contracts. In individual life markets, the Company retains a maximum of $30 million of coverage per individual life. The Company enters into agreements with other reinsurers to mitigate the residual risk related to the over-retained policies. Additionally, in certain limited situations due to some lower face amount reinsurance coverages provided by the Company in addition to individual life, such as group life, disability and health, under certain circumstances, the Company could potentially incur claims totaling more than $30 million per individual life.
The Company seeks to limit its exposure to loss on its assumed catastrophic excess of loss reinsurance agreements by ceding a portion of its exposure to multiple retrocessionaires through retrocession line slips or directly to retrocession markets.
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The Company’s policy is to retain a maximum of $30 million of catastrophic loss exposure per agreement and to retrocede up to $30 million additional loss exposures to the retrocession markets. The Company limits its exposure on a country-by-country (and state-by-state in the U.S.) basis by managing its total exposure to all catastrophic excess of loss agreements bound within a given country to established maximum aggregate exposures. The maximum exposures are established and managed both on gross amounts issued prior to including retrocession and for amounts net of exposures retroceded.
The Company accesses the markets each year for annual catastrophic coverage and reviews current coverage and pricing of current and alternate designs. The coverage may vary from year to year based on the Company’s perceived value of such protection. The current policy covers events involving five or more insured deaths from a single occurrence and covers $100 million of claims in excess of the Company’s $25 million deductible.
The Company retains most of the inbound insurance risk. The Company manages the retained exposure proactively using various mitigating factors such as diversification and limits. Diversification is the primary mitigating factor of short-term volatility risk, but it also mitigates adverse impacts of changes in long-term trends and catastrophic events. The Company’s insured populations are dispersed globally, diversifying the insurance exposure because factors that cause actual experience to deviate materially from expectations do not affect all areas uniformly and synchronously or in close sequence. A variety of limits mitigate retained insurance risk. Examples of these limits include geographic exposure limits, which set the maximum amount of business that can be written in a given country, and jumbo limits, which prevent excessive coverage on a given individual.
In the event that mortality or morbidity experience develops in excess of expectations, some reinsurance treaties allow for increases to future premium rates. Other treaties include experience refund provisions, which may also help reduce RGA’s mortality and morbidity risk.
RGA has various methods to manage its insurance risks, including access to the capital and reinsurance markets.
Market and Credit Risk
Market and Credit risk is the risk of lower or negative earnings and potentially a reduction in enterprise value due to changes in the market prices of asset and liabilities.
Interest Rate Risk. Interest Rate risk is the risk that changes in the level and volatility of nominal interest rates affect the profitability, value or solvency position of the Company. This includes credit spread changes and inflation but excludes credit quality deterioration. This risk arises from many of the Company’s primary activities, as the Company invests substantial funds in interest-sensitive assets, primarily fixed maturity securities, and has certain interest-sensitive contract liabilities. A prolonged period where market yields are significantly below the book yields of the Company’s asset portfolio puts downward pressure on portfolio book yields. The Company has been proactive in its investment strategies, reinsurance structures and overall asset-liability management practices to reduce the risk of unfavorable consequences in this type of environment.
The Company manages interest rate risk to optimize the return on the Company’s capital and to preserve the value created by its business operations within certain constraints. For example, 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. The Company manages its exposure to interest rates principally by managing the relative matching of the cash flows of its liabilities and assets as well as their relative variability.
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, 2025 and 2024 (dollars in millions):
Account Value
Current Weighted Average
Interest Crediting Rate
Minimum Guaranteed
Rate Ranges
Policyholder Account Balances
Fixed annuities (deferred)
Equity-indexed annuities
Bank-owned life insurance and universal life-type products
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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, 2025 and 2024 (dollars in millions):
Account Value as of December 31, 2025
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%
4.00% and Greater
Total
Equity-indexed annuities
Less than 1.00%
4.00% and Greater
Total
Bank-owned life insurance and universal type products
Less than 1.00%
4.00% and Greater
Total
Account Value as of December 31, 2024
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%
4.00% and Greater
Total
Equity-indexed annuities
Less than 1.00%
4.00% and Greater
Total
Bank-owned life insurance and universal type products
Less than 1.00%
4.00% and Greater
Total
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
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time. Should portfolio yields decline, the spreads between investment portfolio yields and the interest rate credited to contract holders would deteriorate as the Company’s ability to manage spreads can become limited by minimum guaranteed rates on annuity and UL policies. In 2025, minimum guaranteed rates generally range from 0.01% to 12.00%, with an average guaranteed rate of approximately 3.53%. In 2024, minimum guaranteed rates range from 0.01% to 12.00%, with an average guaranteed rate of approximately 3.43%.
Interest rate spreads are managed for near term income through a combination of crediting rate actions and portfolio management. Certain annuity products contain crediting rates that reset annually, of which $21.6 billion and $16.0 billion of account balances are not subject to surrender charges as of December 31, 2025 and 2024, respectively, with substantially all of these already at their minimum guaranteed rates. 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 2025 and 2024, 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, although the volume of contracts with lower guaranteed minimum crediting rates is small relative to contracts with higher guaranteed minimum crediting rates.
The Company’s exposure to interest rate price risk and interest rate cash flow risk is reviewed on a quarterly basis. Interest rate price risk exposure is measured using interest rate sensitivity analysis to determine the change in fair value of the Company’s financial instruments in the event of a hypothetical change in interest rates. Interest rate cash flow risk exposure is measured using interest rate sensitivity analysis to determine the Company’s variability in cash flows in the event of a hypothetical change in interest rates.
The calculation of fair value is based on the net present value of estimated discounted cash flows expected over the life of the market risk sensitive instruments, using market prepayment assumptions and market rates of interest provided by independent broker quotations and other public sources, with adjustments made to reflect the shift in the treasury yield curve as appropriate. See “Critical Accounting Estimates” for interest rate sensitivity related to the Company’s fixed maturity securities.
In order to reduce the exposure to changes in fair values from interest rate fluctuations, the Company has developed strategies to manage the net interest rate sensitivity of its assets and liabilities. In addition, from time to time, the Company has utilized the swap market to manage the sensitivity of fair values to interest rate fluctuations.
Inflation can also have direct effects on the Company’s assets and liabilities. The primary direct effect of inflation is the increase in operating expenses. A large portion of the Company’s operating expenses consists of salaries, which are subject to wage increases at least partly affected by the rate of inflation.
The Company reinsures annuities with benefits indexed to the cost of living. Some of these benefits are hedged with a combination of CPI swaps and indexed bonds when material.
Long-term care products have an inflation component linked to the future cost of such services. If health care costs increase at a much larger rate than what is prevalent in the nominal interest rates available in the markets, the Company may not earn enough investment yield to pay future claims on such products.
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 equity risks include significant reduction in valuations, which could be caused by downturns in the broad economy or in specific geographic regions or sectors. In addition, real estate loan risks include defaults, borrower or tenant bankruptcy and reduced liquidity. Real estate loan risks are partially mitigated by the excess of the value of the property over the loan principle, which provides a buffer should the value of the real estate decrease. The Company manages its real estate loan risk by diversifying by property type and geography and through exposure limits.
Equity Risk. Equity risk is the risk that changes in the level and volatility of equity market valuations affect the profitability, value or solvency position of the Company. This risk includes variable annuity and other equity linked exposures and asset related equity exposure. The Company assumes equity risk from alternative investments, fixed indexed annuities and variable annuities. The Company uses derivatives to hedge its exposure to movements in equity markets that have a direct correlation with certain of its reinsurance products.
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Alternative investments are investments in non-traditional asset classes that primarily back the Company’s capital and surplus as well as certain long-term illiquid liability portfolios. Alternative investments generally include hedge funds, emerging markets debt, distressed debt, commodities, infrastructure, tax credits, and equities, both public and private. The Company mitigates its exposure to alternative investments by limiting the size of the alternative investments holding and using per-issuer investment limits.
The Company reinsures fixed indexed annuities (“FIAs”). Credits to FIA contracts are affected by changes in equity markets. Thus, the fair value of the benefit is primarily a function of index returns and volatility. The Company hedges most of the underlying FIA equity exposure with derivatives.
The Company reinsures variable annuities including those with guaranteed minimum death benefits (“GMDB”), guaranteed minimum income benefits (“GMIB”), guaranteed minimum accumulation benefits (“GMAB”) and guaranteed minimum withdrawal benefits (“GMWB”). Strong equity markets, increases in interest rates and decreases in equity market volatility will generally decrease the fair value of the liabilities underlying the benefits. Conversely, a decrease in the equity markets along with a decrease in interest rates and an increase in equity market volatility will generally result in an increase in the fair value of the liabilities underlying the benefits, which has the effect of increasing reserves and lowering earnings. The Company maintains a customized dynamic hedging program that is designed to substantially mitigate the risks associated with income volatility around the change in reserves on guaranteed benefits, ignoring the Company’s own credit risk assessment. However, the hedge positions may not fully offset the changes in the carrying value of the guarantees due to, among other things, time lags, high levels of volatility in the equity and derivative markets, extreme changes in interest rates, unexpected contract holder behavior, and divergence between the performance of the underlying funds and hedging indices. These factors, individually or collectively, may have a material 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, 2025 and 2024 (dollars in millions).
December 31,
No guaranteed minimum benefits
GMDB only
GMIB only
GMAB only
GMWB only
GMDB / WB
Other
Total variable annuity account values
Market risk benefits associated with living benefit riders
Credit risk is the risk that an individual asset may lose value due to credit quality deterioration or default. This includes impairments resulting from accounting rules. Credit quality deterioration may or may not be accompanied by a ratings downgrade. Generally, the credit exposure for an asset is limited to the fair value, net of any collateral received, at the reporting date.
Investment credit risk is credit risk related to invested assets. 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 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. As futures are transacted 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 to such derivative instruments.
The Company enters into various collateral arrangements, which require both the posting and accepting of collateral in connection with its derivative instruments. Collateral agreements contain attachment thresholds that vary depending on the posting party’s financial strength ratings. Additionally, a decrease in the Company’s financial strength rating to a specified level results in potential settlement of the derivative positions under the Company’s agreements with its counterparties. A committee is responsible for setting rules and approving and overseeing all transactions requiring collateral. See “Credit Risk” in Note 12 – “Derivative Instruments” in the Notes to Consolidated Financial Statements for additional information on credit risk related to derivatives.
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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.
Run-on-the-Bank is the potential risk that a client’s in force block incurs substantial surrenders and/or lapses due to credit impairment, reputation damage or other market changes affecting the counterparty. Policyholder surrenders and/or lapses substantially higher than expected could result in inadequate in force business to recover cash paid out for acquisition costs.
For clients and retrocessionaires, collection risk includes their inability to satisfy a reinsurance agreement because the right of offset is disallowed by the receivership court; the reinsurance contract is rejected by the receiver, resulting in a premature termination of the contract; and/or the security supporting the transaction becomes unavailable to the Company.
The Company manages counterparty risk by limiting the total exposure to a single counterparty and by only initiating contracts with creditworthy counterparties. In addition, some of the counterparties have set up trusts and letters of credit, reducing the Company’s exposure to these counterparties.
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, 2025, all retrocession pool members in this excess retention pool rated by the A.M. Best Company were rated “B++ (good)” or better. A rating of “B++” is the fifth highest rating out of sixteen possible ratings. For a majority of the retrocessionaires that were not rated, letters of credit or trust assets have been received by the Company as additional security. In addition, the Company performs annual financial and in force reviews of its retrocessionaires to evaluate financial stability and performance.
The Company retrocedes certain in force blocks and asset-intensive transactions, including retrocessions to Ruby Re, on a funds withheld basis. While the economic benefits of the funds withheld assets are passed on to the assuming company, the Company retains legal ownership of the assets within the funds withheld account and establishes a funds withheld liability.
The Company has never experienced a material default in connection with retrocession arrangements, nor has it experienced any material difficulty in collecting claims recoverable from retrocessionaires; however, no assurance can be given as to the future performance of, or the recoverability of future claims from such retrocessionaires .
In addition to investment credit limits and counterparty limits, the Company maintains aggregate counterparty risk limits that include counterparty exposures from reinsurance, financing and investment activities at an aggregated level to control total exposure to a single counterparty. Counterparty risk aggregation is important because it enables the Company to capture risk exposures at a comprehensive level and under more extreme circumstances compared to analyzing the components individually.
All counterparty exposures are calculated on a quarterly basis, reviewed by management and monitored by the ERM function.
Foreign Currency Risk. Foreign currency risk is the risk of changes in level and volatility of currency exchange rates affect the profitability, value or solvency position of the Company. The Company manages its exposure to foreign currency risk principally by currency matching invested assets with the underlying liabilities to the extent practical. The Company has in place net investment hedges for a portion of its investments in its Canadian operations to reduce excess exposure to that currency. Translation differences resulting from translating foreign subsidiary balances to U.S. dollars are reflected in equity on the consolidated balance sheets.
The Company generally does not hedge the foreign currency exposure of its subsidiaries transacting business in currencies other than their functional currency (transaction exposure). However, the Company has entered into cross currency swaps to manage exposure to specific currencies. The majority of the Company’s foreign currency transactions are denominated in Australian dollars, British pounds, Canadian dollars, Euros, Japanese yen, Korean won, and the South African rand. The maximum amount of assets held in a specific currency (with the exception of the U.S. dollar) is measured relative to risk targets and is monitored regularly.
The Company does not hedge the income statement risk associated with translating foreign currencies. The foreign exchange risk sensitivity of the Company’s consolidated pre-tax income is assessed using hypothetical test scenarios. Actual results may differ from the results noted below particularly due to assumptions utilized or if events occur that were not included in the methodology. For more information on this risk, see “Item 1A – Risk Factors – Risks Related to Our Business.” In general, a weaker U.S. dollar relative to foreign currencies has a favorable impact on the Company’s income before income taxes. Conversely, the recent strength of the U.S. Dollar relative to certain foreign currencies has had a negative impact on the Company’s income before income taxes. The following tables summarize the impact on the Company’s reported income before income taxes of an immediate favorable or unfavorable change in each of the foreign exchange rates to which the Company has exposure (dollars in millions):
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Unfavorable
Favorable
Year Ended December 31, 2025
Income before income taxes
% change of income before income taxes from base
$ change of income before income taxes from base
Unfavorable
Favorable
Year Ended December 31, 2024
Income before income taxes
% change of income before income taxes from base
$ change of income before income taxes from base
Capital Risk
Capital risk taxonomy encompasses six distinct risk categories that are evaluated on a quarterly basis to ensure comprehensive capital risk management. The risk categories, defined below, are capital, client recapture, collateral, financing, liquidity and tax.
Capital Risk. Capital risk is the risk of not having the appropriate amount of group or entity-level capital to conduct business today or in the future. 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. Collateral risk is the risk that collateral will not be available at expected costs or in the capacity required to meet current and future needs. The Company monitors risks related to interest rate movement, collateral requirements and position and capital markets environment. Collateral demands and resources continue to be actively managed with available collateral sources being more than sufficient to cover stress level collateral demands.
Financing Risk. Financing risk is the risk that capital will not be available at expected costs or in the capacity required. The Company continues to monitor financing risks related to regulatory financing, contingency financing, and debt capital and sees no immediate issues with its current structures, capacity and plans.
Liquidity Risk. Liquidity risk is the risk that the Company is unable to meet payment obligations at expected costs or in the capacity required. The Company’s traditional liquidity demands include items such as claims, expenses, debt financing and investment purchases, which are largely known or can be reasonably forecasted. The Company regularly performs liquidity risk modeling, including both market and Company specific stresses, to assess the sufficiency of available resources.
Tax Risk. Tax risk is the risk that current and future tax positions are different than expected. The Company monitors tax risks related to the evolving tax and regulatory environment, business transactions, legal entity reorganizations, tax compliance obligations and financial reporting.
Operational Risk
Operational risk is the risk of lower/negative earnings and a potential reduction in enterprise value caused by unexpected losses associated with inadequacy or failure on the part of internal processes, people and systems, or from external events.
The Company regularly monitors and assesses the risks related to client services, conduct, cyber and technology, financial operations, human capital, legal, model and resilience and third parties. Various insurance, market and credit, capital, sustainability and strategic risk obligations and concerns often intersect with the Company’s core operational process risk areas. 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. Operational risks are core to managing the Company’s brand and market confidence as well as maintaining its ability to acquire and retain the appropriate expertise to execute and operate the business.
Client Services Risk. Client services risks are associated with all client services provided as part of a business relationship including business development, claims, pricing, and underwriting.
Conduct Risk. Conduct risk is the risk that RGA does not conduct business ethically and in compliance with laws and regulations. It includes bribery and corruption, corporate compliance, economic sanctions, ethics, fraud, and privacy matters. The Company’s Compliance Risk Management Program facilitates a proactive evaluation of present and potential compliance risks associated with local and enterprise-wide regulatory requirements and compliance with Company policies and procedures. Ongoing monitoring and an annual fraud risk assessment enable the Company to continually evaluate potential fraud risks within the organization. The Company’s privacy program, processes, and procedures are designed to protect personal
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information related to its customers, insured individuals or its employees. The program includes facilitating a proactive evaluation of present and potential privacy risks associated with both local and enterprise-wide regulatory requirements as well as compliance with Company policies and procedures.
Cyber and Technology Risk. Cyber and technology risk is the risk that the IT landscape does not adequately support current and future business needs and strategic objectives. Risk exposure areas related to cyber and technology include cybersecurity, data integrity, data availability, and system delivery. The Company’s cybersecurity program, processes, and procedures are designed to prevent unauthorized physical and electronic theft and the disclosure of confidential and personal data related to its customers, insured individuals, or its employees. The Company employs technology, administrative related processes and procedural controls, security measures and other preventative actions to reduce the risk of such incidents.
Resilience and Third Parties Risk. Resilience and third parties risk is the risk associated with maintaining critical business operations and the selection and management of services provided by third parties. The Company’s global operational resilience process enables associates to identify potential impacts that threaten operations by providing the framework, policies and procedures for how the Company will maintain resilience within the defined impact tolerances.
Financial Operations Risk. Financial operations risk is the risk associated with the accuracy and timeliness of financial reporting and decision-making. Financial operations risk areas include administration, finance, investments and valuations.
Human Capital Risk. Human capital risk is related to workforce management, including talent acquisition, development, retention, and employment relations/regulations. The Company actively monitors human capital risks using multiple practices that include but are not limited to human resource and compliance policies and procedures, regularly reviewing key risk indicators, performance evaluations, compensation and benefits benchmarking, succession planning, employee engagement surveys and associate exit interviews.
Legal Risk . Legal risk is the risk arising from failing to identify and mitigate legal exposures to RGA, including those arising from contracts and treaties, dispute resolution, interpretation and counsel, non-disclosure agreements, and transaction review.
Model Risk. Model risk is the risk of material deviations or actual losses different than the models and estimates used by the Company to evaluate its business, results of operations and financial condition, and to develop scenarios to evaluate the Company’s exposure to policyholder claims, potential investment portfolio losses and other risks. Model risk areas include governance and process failures, improper use and human error, infrastructure, and structure and design. The Company’s Model Risk Management Policy reflects company-wide guidance, standards, and framework. It actively manages and monitors risk through the framework’s governance processes, model lifecycle monitoring and inventory, model validation, risk assessments and risk reporting.
Strategic Risk
Strategic risk relates to the planning, implementation, and management of the Company’s business plans and strategies, including the risks associated with the global environment in which it operates; future law and regulation changes; political risks; and relationships with key external parties.
Strategy Risk. 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 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.
Key Relationships 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. Political and regulatory risk is the risk related to adverse future law and regulation changes as well as the risk that governments could become unwilling/unable to meet commitments. Regulatory and political developments and related risks that may affect the Company are identified, assessed and monitored as part of regular oversight activities.
New Accounting Standards
Changes to the general accounting principles are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates to the FASB Accounting Standards Codification TM .
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See Note 3 – “New Accounting Standards” in the Notes to Consolidated Financial Statements for information on new accounting standards adopted and not yet adopted and their impact, if any, on the Company’s results of operations and financial position.
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