Reinsurance Group of America (NYSE: RGA) reported Q4 EPS of $3.46, $0.02 worse than the analyst estimate of $3.48. Revenue for the quarter came in at $3.28 billion versus the consensus estimate of $3.24 billion.

• Earnings per diluted share: $1.72 from net income, $3.46 from adjusted operating income*
• Full-year earnings per diluted share: $11.00 from net income, $12.12 from adjusted operating income*
• ROE 8.1 percent and adjusted operating ROE* 10.3 percent for the full year
• Deployed capital of $160 million into in-force and other transactions in the quarter

Anna Manning, President and Chief Executive Officer, commented, “On balance, this was a solid quarter, as we continued to benefit from earnings diversity that comes with our global operating platform, with strong results in EMEA, Asia and Canada, offsetting moderate weakness in the U.S. Traditional segment and Australia. Premiums were up a healthy 12 percent, and we had another quarter of significant capital deployment.

“The full year featured numerous highlights, including continued strong operating results from our operations in EMEA and Asia, good overall organic growth and a high level of capital deployment.

“Our strong capital position has allowed us to pursue and execute attractive in-force transactions and manage capital effectively through active share repurchases. For the year, we deployed approximately $440 million toward in-force transactions, including approximately $160 million in the fourth quarter. We also repurchased $284 million of common shares in 2018, including $25 million in the fourth quarter. Our Board approved a new authorization of $400 million, replacing the previous authorization. We ended the year with an excess capital position of approximately $1.0 billion.

“Looking forward, we remain optimistic about the future and our business prospects, and ability to deliver attractive financial returns. RGA is well positioned in its markets, we have a proven strategy and a long track record of successful execution. We anticipate ongoing change in the life insurance industry, and RGA expects to continue to innovate and add to its capabilities in order to help our clients successfully address these industry challenges and opportunities.”

Guidance

Over the intermediate term, the Company continues to target growth in adjusted operating earnings per share in the 5 to 8 percent range, and adjusted operating return on equity of 10 to 12 percent. It is presumed that there are no significant changes in the investment environment from current levels, and the Company will deploy $300 to $400 million of excess capital, on average, annually. These guidance ranges are based upon “normalized” results. The Company currently estimates its effective tax rate on adjusted operating income for 2019 and thereafter will be in the range of 21 percent to 24 percent.

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