REINSURANCE GROUP OF AMERICA INC – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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) adverse changes in mortality (whether related to COVID-19 or
otherwise), morbidity, lapsation or claims experience, (2) inadequate risk
analysis and underwriting, (3) adverse capital and credit market conditions and
their impact on the Company's liquidity, access to capital and cost of capital,
(4) changes in the Company's financial strength and credit ratings and the
effect of such changes on the Company's future results of operations and
financial condition, (5) the availability and cost of collateral necessary for
regulatory reserves and capital, (6) requirements to post collateral or make
payments due to declines in the market value of assets subject to the Company's
collateral arrangements, (7) action by regulators who have authority over the
Company's reinsurance operations in the jurisdictions in which it operates, (8)
the effect of the Company parent's status as an insurance holding company and
regulatory restrictions on its ability to pay principal of and interest on its
debt obligations, (9) general economic conditions or a prolonged economic
downturn affecting the demand for insurance and reinsurance in the Company's
current and planned markets, (10) the impairment of other financial institutions
and its effect on the Company's business, (11) fluctuations in U.S. or foreign
currency exchange rates, interest rates, or securities and real estate markets,
(12) market or economic conditions that adversely affect the value of the
Company's investment securities or result in the impairment of all or a portion
of the value of certain of the Company's investment securities that in turn
could affect regulatory capital, (13) market or economic conditions that
adversely affect the Company's ability to make timely sales of investment
securities, (14) risks inherent in the Company's risk management and investment
strategy, including changes in investment portfolio yields due to interest rate
or credit quality changes, (15) the fact that the determination of allowances
and impairments taken on the Company's investments is highly subjective, (16)
the stability of and actions by governments and economies in the markets in
which the Company operates, including ongoing uncertainties regarding the amount
of U.S. sovereign debt and the credit ratings thereof, (17) the Company's
dependence on third parties, including those insurance companies and reinsurers
to which the Company cedes some reinsurance, third-party investment managers and
others, (18) financial performance of the Company's clients, (19) the threat of
natural disasters, catastrophes, terrorist attacks, pandemics, epidemics or
other major public health issues anywhere in the world where the Company or its
clients do business, (20) competitive factors and competitors' responses to the
Company's initiatives, (21) development and introduction of new products and
distribution opportunities, (22) execution of the Company's entry into new
markets, (23) integration of acquired blocks of business and entities, (24)
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, (25) adverse
developments with respect to litigation, arbitration or regulatory
investigations or actions (26) the adequacy of reserves, resources and accurate
information relating to settlements, awards and terminated and discontinued
lines of business, (27) changes in laws, regulations, and accounting standards
applicable to the Company or its business, including Long Duration Targeted
Improvement accounting changes and (28) 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. For a discussion of these 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 the 2022 Annual
Report, as may be supplemented by Item 1A - "Risk Factors" in the Company's
subsequent Quarterly Reports on Form 10-Q.

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Overview

The Company is among the leading global providers of life reinsurance and
financial solutions, with $3.4 trillion of life reinsurance in force and assets
of $89.1 billion as of March 31, 2023. Traditional reinsurance includes
individual and group life and health, disability, and critical illness
reinsurance. Financial Solutions includes longevity reinsurance, asset-intensive
reinsurance, 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.

Historically, the Company's primary business has been traditional life
reinsurance, which 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. To a lesser extent,
the Company also reinsures health business typically reinsured 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 insureds, and the exercise of recapture options
by ceding companies. The Company has expanded its Financial Solutions business,
including significant asset-intensive and longevity risk transactions, which
allow its clients to take advantage of growth opportunities and manage their
capital, longevity and investment risk.

For its traditional business, the Company's 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 become 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 its sources of liquidity are sufficient to cover potential
claims payments on both a short-term and long-term basis.

As is customary in the reinsurance business, clients continually update, refine,
and revise reinsurance information provided to the Company. Such revised
information is used by the Company in preparation of its condensed consolidated
financial statements and the financial effects resulting from the incorporation
of revised data are reflected in the current period.

In the first quarter of 2023, the Company adopted Accounting Standards Update
("ASU"): ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted
Improvements to the Accounting for Long-Duration Contracts ("ASU 2018-12"). ASU
2018-12 updates certain requirements for the accounting for long-duration
insurance contracts. See Note 2 - "Impact of New Accounting Standard" in the
Notes to Condensed Consolidated Financial Statements for additional information.

Segment Presentation

The Company has geographic-based and business-based operational segments.
Geographic-based operations are further segmented into Traditional and Financial
Solutions businesses. 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 businesses.

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. Although reasonably
predictable over a period of years, segment claims experience can be volatile
over shorter periods. See "Results of Operations by Segment" below for further
information about the Company's segments.

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Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires the
application of accounting policies that often involve a significant degree of
judgment. Management, on an ongoing basis, reviews estimates and assumptions
used in the preparation of financial statements. If management determines that
modifications in assumptions and estimates are appropriate given current facts
and circumstances, results of operations and financial position as reported in
the condensed consolidated financial statements could change significantly.

Management believes the critical accounting policies relating to the following
areas are most dependent on the application of estimates and assumptions:

Premiums receivable;

Deferred policy acquisition costs;

Liabilities for future policy benefits and incurred but not reported claims;

Valuation of investments, allowance for credit losses and impairments to
specific investments;

Valuation of embedded derivatives and market risk benefits; and

Income taxes.

A discussion of each of the critical accounting policies may be found in the
Company's 2022 Annual Report under "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Critical Accounting Policies."
The critical accounting polices related to Deferred Policy Acquisition Costs,
estimating the Company's Liability for Future Policy Benefits and Valuation of
Embedded Derivatives and Market Risk Benefits presented below have been updated
to reflect the adoption of ASU 2018-12.

Deferred Policy Acquisition Costs

ASU 2018-12 simplified the accounting for deferred policy acquisition costs by
eliminating the requirement to test deferred policy acquisition costs for
impairment or recoverability, an interest component is no longer accrued, and
the requirement to adjust deferred policy acquisition costs for unrealized gains
and losses (i.e., "shadow adjustments") has been eliminated. ASU 2018-12 also
clarified that deferred policy acquisition costs should only include costs that
have been incurred and estimates of future contract renewal costs shall no
longer be included, and capitalized costs should be amortized using a simplified
method that approximates straight line amortization. As result of these
simplifications, the Company no longer considers the accounting for deferred
policy acquisition costs to be a critical accounting policy.

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, 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;
•Ceding company and other factors.

Given the unique risks and highly customized nature the Company's financial
reinsurance business, 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 the 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 that they should be revised. The Company has elected to lock-in claims
expense assumptions at contract inception and those assumptions are not
subsequently reviewed or updated.

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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.

Valuation of Market Risk Benefits and Embedded Derivatives

The Company reinsures certain annuity products that contain terms that are
deemed to be market risk benefits or embedded derivatives, primarily variable
annuities with guaranteed minimum benefits and equity-indexed annuities.

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 Company reinsures certain annuity products that contain terms that are
deemed to be embedded derivatives, primarily equity-indexed annuities and
variable annuities with guaranteed minimum benefits. 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 majority of which are subject to the general accounting
principles for Derivatives and Hedging related to embedded derivatives.
Management believes the embedded derivative feature in each of these reinsurance
treaties is similar to a total return swap on the assets held by the ceding
companies.

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 credit valuation
adjustment ("CVA"). The fair value calculation of an embedded derivative in an
asset position utilizes a CVA based on the ceding company'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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