Reinsurance Group of America Inc. RGA reported first-quarter 2015 operating income of $1.77 per share, missing the Zacks Consensus Estimate of $1.85 by 4.3% and improving 9.9% year over year.
The quarterly results reflected higher-than-expected mortality claims in North America, offset, in part, by favorable results in the Asia Pacific. A relatively stronger U.S. dollar also dragged down the earnings.
Reinsurance Group of America Inc. - Earnings Surprise | FindTheCompany
Reinsurance Group's total revenue of $2.52 billion decreased 5.1% year over year.
Net premiums of $2 billion declined 3.7% year over year due to the negative effects of the Pacific Life retrocession agreement announced in Dec 2014 and a stronger U.S. dollar.
Investment income was up 5.6% from the prior-year quarter to $426.9 million.
Total benefits and expenses of Reinsurance Group declined 4.9% year over year to $2.34 billion. The decline was attributable to lower claims and other policy benefits and policy acquisition costs.
Quarterly Segment Update
U.S. and Latin America Operations: The segment reported pre-tax operating income of $73 million, down 28% year over year reflecting an adverse mortality experience.
Canada Operations: The Canada Non-Traditional business segment posted pre-tax operating income of $21.3 million, down 3.7% year over year. Results reflected the effect of higher-than-expected individual mortality claims and a weaker Canadian dollar.
Asia Pacific Operations: Pre-tax operating income was $62.8 million against $24.7 million in the year-ago quarter. Strong results in Australia, Hong Kong & Southeast Asia, and Japan boosted the segment’s earnings.
The EMEA region reported pre-tax operating income of $29.1 million, more than double from $14 million in the year-earlier quarter led by fFavorable claims across the U.K. markets and GFS transactions closed in 2014.
Financial Update
As of Mar 31, 2015, Reinsurance Group had assets worth $44.7 billion, up 10.2% year over year.
As of Mar 31, 2015, book value – a measure of Reinsurance Group’s net worth – was $79.26 per share, up 10.8% year over year.
Dividend and Share Buyback
Reinsurance Group’s board of directors declared a quarterly dividend of 33 cents per share, payable on May 28.
In the reported quarter, the company repurchased approximately 2.5 million shares for a total cost of $230 million.
Reinsurance Group carries a Zacks Rank #3 (Hold). Some better-ranked stocks are American Equity Investment Life Holding Company AEL , Manulife Financial Corp. MFC and Universal American Corp. UAM. While American Equity carries a Zacks Rank #1(Strong Buy), the other two carry a Zacks Rank # 2 (Buy).
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