AM Best assigns credit ratings to RGA Life and Annuity Insurance Company; Affirms the credit ratings of Reinsurance Group of America, Incorporated and its subsidiaries

ALDUICK, NJ, December 8, 2023—(BUSINESS WIRE)–AM Best assigned a Financial Strength Rating (FSR) of A+ (Superior) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) to RGA Life and Annuity Insurance Company (RLAC) (Chesterfield, MO). The outlook given to these credit ratings (ratings) is stable. In addition, AM Best has affirmed the FSR of A+ (Superior) and the long-term ICRs of “aa-” (Superior) of RGA Reinsurance Company (Chesterfield, MO), RGA Americas Reinsurance Company Ltd (Bermuda), RGA Life Reinsurance Company of Canada (Toronto , Canada), Aurora National Life Assurance Company (Los Angeles, California) and RGA Atlantic Reinsurance Company, Ltd. (Barbados). These companies are collectively called RGA. AM Best also affirmed the Long-Term ICR of ‘a-‘ (Excellent) and all existing Long-Term IRs on the debt securities and indicative shelf ratings of Reinsurance Group of America, Incorporated (Chesterfield, MO) [NYSE: RGA]. The outlook for these ratings is stable. (See below for a detailed list of long-term IRs.)

The ratings reflect RGA’s strong balance sheet, which AM Best rates as very strong, as well as its strong operating performance, favorable business profile and very strong enterprise risk management (ERM).

RGA’s balance sheet strength remains very strong, supported by its risk-adjusted consolidated capitalization, which has consistently been at its strongest level as measured by Best’s Capital Adequacy Ratio (BCAR). Liquidity measures remain strong and financial leverage remains within AM Best’s guidance for current ratings. In addition, RGA maintains a high-quality investment portfolio that has experienced only a modest amount of impairment over the past few years.

RGA also benefits from its leading market positions in the United States, Canada, Europe and Asia with approximately 40%-50% of revenues coming from international operations. Overall, net premiums have increased steadily over the past few years. Premium growth was driven by growth across all geographies. RGA’s extensive risk management framework, which includes a strong focus on operational and strategic risks in addition to stress testing and continuous risk monitoring, are key factors in its very strong ERM rating.

Partially offsetting these positive rating factors is earnings volatility in recent periods in certain core segments, including the US Personal Mortality segment and the Australian Business segment, which were primarily due to the adverse impacts of the COVID-19 pandemic. AM Best notes that mortality increased in 2020 and 2021 due to COVID-19, leading to losses in the individual life insurance segment. Mortality showed improvement in 2022 and 2023. Profits generated by its other core businesses are generally increasing. Mortality losses were partially offset by gains in the longevity business. AM Best expects revenue to continue to improve as COVID-19 moves into an endemic phase. RGA has also increased its exposure to higher-risk product lines, including annuities and longevity reinsurance, and maintains a moderate-sized block of long-term care business, which could increase its operating volatility over the medium to long term.

The following long-term IRs are affirmed with a stable outlook:

Reinsurance Group of America, Incorporated—
— “a-” (Excellent) for $400 million 3.95% senior unsecured notes due 2026.
— ‘a-‘ (Excellent) for $600 million 3.9% senior unsecured notes due 2029.
— ‘a-‘ (Excellent) for $600 million 3.15% senior unsecured notes due 2030.
— ‘a-‘ (Excellent) for $600 million 6% senior unsecured notes due 2033.
— “bbb+” (Good) on $700 million 7.125% fixed to floating subordinated notes due 2052.
— “bbb+” (Good) on $400 million 5.75% fixed-to-floating subordinated notes due 2056.
— “bbb” (Good) on $400 million of junior subordinated floating rate notes due 2065.

The following indicative long-term IRs available on shelf registrations are confirmed with a stable outlook:

Reinsurance Group of America, Incorporated—
— “a-” (Excellent) for senior unsecured debt
— ‘bbb+’ (Good) for subordinated debt
— “bbb” (Good) for preferred stock

RGA Capital Trust III and IV—
— “bbb” (Good) for trust preferred securities

This press release refers to the credit ratings that are published on the AM Best website. For all rating information relating to the release and related disclosures, including details of the agency responsible for issuing each of the individual ratings mentioned in this release, please see AM Best’s web page for recent rating activities. For further information on the use and limitations of credit score opinions, please see Best’s Guide to Credit Scores. For information on the proper use of Best Credit Ratings, Best Performance Ratings, Best Preliminary Credit Ratings, and AM Best Press Releases, please see the Guide to the Proper Use of Best Ratings and Ratings.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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