AM Best Assigns Credit Ratings to RGA Life and Annuity Insurance Company; Affirms Credit Ratings of Reinsurance Group of America, Incorporated and Its Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)--
AM Best has 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 assigned to these Credit Rating (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, CA) and RGA Atlantic Reinsurance Company, Ltd. (Barbados). These companies are collectively referred to as RGA. AM Best also has affirmed the Long-Term ICR of “a-” (Excellent) and all existing Long-Term Issue Credit Ratings (Long-Term IR) on the debt securities and indicative shelf ratings of Reinsurance Group of America, Incorporated (Chesterfield, MO) [NYSE: RGA]. The outlook of these ratings is stable. (See below for a detailed listing of the Long-Term IRs.)

The ratings reflect RGA’s balance sheet strength, which AM Best assesses 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 underpinned by its consolidated risk-adjusted capitalization, which has consistently been at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Liquidity measures remain strong and financial leverage remains well within AM Best guidelines for the current ratings. In addition, RGA maintains a high-quality investment portfolio, which has experienced only a modest amount of impairments during the last several 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 last few years. Premium growth has been driven by growth in all geographic areas. RGA’s extensive risk management framework, which includes a strong focus on operational and strategic risks in addition to performing stress testing and continual monitoring of risks, are key factors in its very strong ERM assessment.

Partially offsetting these positive rating factors is the volatility of earnings in recent periods within certain core segments, including its U.S. individual mortality segment and its Australian business segment, which was primarily driven by 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 has shown improvement in 2022 and 2023. Earnings generated from its other core businesses generally have been increasing. The mortality losses were partially offset by profits in the longevity business. AM Best expects that earnings will continue to improve as COVID-19 moves into an endemic phase. RGA also has increased its exposure to higher-risk product lines, including annuities and longevity reinsurance, as well as maintains a moderate-sized block of long-term care business that may add to its operating volatility over the mid-to-long term.

The following Long-Term IRs have been affirmed with a stable outlook:

Reinsurance Group of America, Incorporated—

— “a-” (Excellent) on $400 million 3.95% senior unsecured notes, due 2026

— “a-” (Excellent) on $600 million 3.9% senior unsecured notes, due 2029

— “a-” (Excellent) on $600 million 3.15% senior unsecured notes, due 2030

— “a-” (Excellent) on $600 million 6% senior unsecured notes, due 2033

— “bbb+” (Good) on $700 million 7.125% fixed to floating subordinated debentures, due 2052

— “bbb+” (Good) on $400 million 5.75% fixed to floating rate subordinated debentures, due 2056

— “bbb” (Good) on $400 million variable rate junior subordinated debentures, due 2065

The following indicative Long-Term IRs available under shelf registrations have been affirmed with a stable outlook:

Reinsurance Group of America, Incorporated—

— “a-” (Excellent) on senior unsecured debt

— “bbb+” (Good) on subordinated debt

— “bbb” (Good) on preferred stock

RGA Capital Trust III and IV—

— “bbb” (Good) on trust preferred securities

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Louis Silvers
Senior Financial Analyst

+1 908 882 2316

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Michael Adams
Associate Director

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Christopher Sharkey
Associate Director, Public Relations

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Al Slavin
Senior Public Relations Specialist

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Source: AM Best