Reinsurance Group of America (RGA) CEO Anna Manning on Q3 2019 Results - Earnings Call Transcript

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Reinsurance Group of America (NYSE:RGA) Q3 2019 Earnings Conference Call October 31, 2019 11:00 AM ET

Reinsurance Group of America (NYSE:RGA) Q3 2019 Earnings Conference Call October 31, 2019 11:00 AM ET

公司参与者

Todd Larson - Senior Executive Vice President and Chief Financial Officer
Anna Manning - President and Chief Executive Officer

  • Todd Larson - Senior Executive Vice President and Chief Financial Officer
  • Anna Manning - President and Chief Executive Officer

电话会议参与者

Jimmy Bhullar - JPMorgan
Andrew Kligerman - Credit Suisse
Ryan Krueger - KBW
Dan Bergman - Citi
Humphrey Lee - Dowling & Partners
Erik Bass - Autonomous Research
Alex Scott - Goldman Sachs
John Nadel - UBS

  • Jimmy Bhullar - JPMorgan
  • Andrew Kligerman - Credit Suisse
  • Ryan Krueger - KBW
  • Dan Bergman - Citi
  • Humphrey Lee - Dowling

会议主持员

Good day and welcome to the Reinsurance Group of America Third Quarter 2019 Results Conference Call. Today’s call is being recorded.
At this time, I would like to introduce Mr. Todd Larson, Senior Executive Vice President and Chief Financial Officer; Ms. Anna Manning, President and Chief Executive Officer. Please go ahead, Mr. Larson.

Good day and welcome to the Reinsurance Group of America Third Quarter 2019 Results Conference Call. Today’s call is being recorded.

At this time, I would like to introduce Mr. Todd Larson, Senior Executive Vice President and Chief Financial Officer; Ms. Anna Manning, President and Chief Executive Officer. Please go ahead, Mr. Larson.

Todd Larson

Todd Larson

Thank you. Good morning, everyone and welcome to RGA’s third quarter 2019 conference call. With me this morning in St. Louis is Anna Manning, RGA’'s President and Chief Executive Officer. Anna and I will discuss the third quarter results after a quick reminder about forward-looking information and non-GAAP financial measures. Following our prepared remarks, we will be happy to take your questions.
To help you better understand RGA’s business, we’ll make certain statements and discuss certain subjects during this call that will contain forward-looking information, including among other things, investment performance, statements relating to projections of revenues, premiums or earnings and future financial performance and growth potential of RGA and its subsidiaries.
Keep in mind that actual results could differ materially from expected results. A list of important factors that could cause actual results to differ materially from expected results is included in the earnings release we issued yesterday.
In addition during the course of this call, we’ll make comments on pre-tax and after-tax adjusted operating income, which is considered a non-GAAP financial measure under SEC regulations. We believe this measure better reflects the ongoing profitability and underlying trends of our business.
Please refer the tables in the press release and quarterly financial supplement for more information on this measure and reconciliations of net income to adjusted operating income for our various business segments. These documents and additional information may be found on our investor website at rgare.com.
And now, I’ll turn the call over to Anna for her comments.

Thank you. Good morning, everyone and welcome to RGA’s third quarter 2019 conference call. With me this morning in St. Louis is Anna Manning, RGA’'s President and Chief Executive Officer. Anna and I will discuss the third quarter results after a quick reminder about forward-looking information and non-GAAP financial measures. Following our prepared remarks, we will be happy to take your questions.

To help you better understand RGA’s business, we’ll make certain statements and discuss certain subjects during this call that will contain forward-looking information, including among other things, investment performance, statements relating to projections of revenues, premiums or earnings and future financial performance and growth potential of RGA and its subsidiaries.

Keep in mind that actual results could differ materially from expected results. A list of important factors that could cause actual results to differ materially from expected results is included in the earnings release we issued yesterday.

In addition during the course of this call, we’ll make comments on pre-tax and after-tax adjusted operating income, which is considered a non-GAAP financial measure under SEC regulations. We believe this measure better reflects the ongoing profitability and underlying trends of our business.

Please refer the tables in the press release and quarterly financial supplement for more information on this measure and reconciliations of net income to adjusted operating income for our various business segments. These documents and additional information may be found on our investor website at rgare.com.

And now, I’ll turn the call over to Anna for her comments.

Anna Manning

Anna Manning

Thank you, Todd and good morning. As indicated in our press release last evening, we reported adjusted operating EPS of $4.02 for the quarter compared to $4.03 a year ago. This was a very good quarter in many respects, as the bottom line was above expectations, organic growth remained strong and we had another successful quarter for transactions.
The very favorable performance by certain key business units more than offset shortfalls and others resulting in strong consolidated results, which continues to demonstrate the benefits of earnings diversification arising from our global platform. Further, we were able to deliver these results in the face of ongoing macroeconomic headwinds, including low interest rates and weak foreign currencies.
Let me touch on a few highlights and points of interest in the quarter. Top line momentum continued in the quarter as both reported premiums and organic growth were strong. Our strategy of providing broad-based solutions to our clients through our risk expertise and capital solutions expertise continues to deliver.
Bottom line results were above expectations with contributions from many of our businesses. The Canadian business had another strong quarter, reflecting favorable mortality. This is the fourth quarter in a row of favorable large case mortality.
Our Global Financial Solutions business continues to perform very well with strong bottom line results and continuing success in the in-force transactions business. We deployed approximately $150 million into in-force transactions in the quarter, bringing the year-to-date deployment to $385 million.
This quarter’s deployment included deals in every region, including asset-intensive deals in the US, UK and Asia. With the successful deployment of considerable capital since 2018, the incremental earnings contribution from these transactions is becoming more meaningful. The pipeline is robust, we remain active and we hope to close 2019 on a strong note.
The US Traditional segment performed well in the quarter as we had good performance from our US Group business and we also had favorable variable investment income. The combination of these helped offset some of the unfavorable experience in individual mortality.
In EMEA, both the Traditional and Financial Solutions businesses had very good quarters as we saw favorable mortality in the Traditional business and favorable longevity in the Financial Solutions business. Again, we were also active on the transaction spread in EMEA on both longevity and asset-intensive opportunities.
Asia continues to be a success story for us as our top line growth remained strong, given our solid overall franchise and leadership position in product development. When we combine our capabilities in product developments and Financial Solutions, we were able to deliver broad-based solutions to our clients, and with lower interest rates and their impact to local statutory capital levels, we’re seeing increasing demand in this region for those solutions.

Thank you, Todd and good morning. As indicated in our press release last evening, we reported adjusted operating EPS of $4.02 for the quarter compared to $4.03 a year ago. This was a very good quarter in many respects, as the bottom line was above expectations, organic growth remained strong and we had another successful quarter for transactions.

The very favorable performance by certain key business units more than offset shortfalls and others resulting in strong consolidated results, which continues to demonstrate the benefits of earnings diversification arising from our global platform. Further, we were able to deliver these results in the face of ongoing macroeconomic headwinds, including low interest rates and weak foreign currencies.

Let me touch on a few highlights and points of interest in the quarter. Top line momentum continued in the quarter as both reported premiums and organic growth were strong. Our strategy of providing broad-based solutions to our clients through our risk expertise and capital solutions expertise continues to deliver.

Bottom line results were above expectations with contributions from many of our businesses. The Canadian business had another strong quarter, reflecting favorable mortality. This is the fourth quarter in a row of favorable large case mortality.

Our Global Financial Solutions business continues to perform very well with strong bottom line results and continuing success in the in-force transactions business. We deployed approximately $150 million into in-force transactions in the quarter, bringing the year-to-date deployment to $385 million.

This quarter’s deployment included deals in every region, including asset-intensive deals in the US, UK and Asia. With the successful deployment of considerable capital since 2018, the incremental earnings contribution from these transactions is becoming more meaningful. The pipeline is robust, we remain active and we hope to close 2019 on a strong note.

The US Traditional segment performed well in the quarter as we had good performance from our US Group business and we also had favorable variable investment income. The combination of these helped offset some of the unfavorable experience in individual mortality.

In EMEA, both the Traditional and Financial Solutions businesses had very good quarters as we saw favorable mortality in the Traditional business and favorable longevity in the Financial Solutions business. Again, we were also active on the transaction spread in EMEA on both longevity and asset-intensive opportunities.

Asia continues to be a success story for us as our top line growth remained strong, given our solid overall franchise and leadership position in product development. When we combine our capabilities in product developments and Financial Solutions, we were able to deliver broad-based solutions to our clients, and with lower interest rates and their impact to local statutory capital levels, we’re seeing increasing demand in this region for those solutions.

Longevity experience overall was very good across the organization in EMEA, Canada and the US. And we completed several new transactions in EMEA. We remain optimistic about the potential in this market and believe that we are well positioned to take advantage of the many opportunities on a global basis.
Investment performance was good due to strong performance of our alternative investments, in large part from gains in our real estate joint ventures and private partnerships. We made a strategic decision to expand our investments in these alternative categories a number of years ago and we are benefiting from that decision.
These are cash gains, money in our pocket and we expect to continue to generate good returns going forward, although the quarterly amounts will fluctuate. There are many highlights in the quarter and year-to-date and reasons for optimism about our business going forward. That’s not to say that we don’t have challenges. In Australia, we had a larger loss than we’d experienced in recent quarters.
The industry remains under scrutiny by the public and regulators, and the overall industry dynamics continue to be challenging. We have a strong local team with the support of global expertise throughout RGA focused on the actions to remediate this business.
In summary, we view this as a very good quarter with many highlights. Looking forward, RGA is well positioned, we have a proven strategy, our business is in good shape and we remain optimistic about the future and our business prospects.
Ours is a long-term business and can best be judged by results over longer periods of time. We can point to a track record, a long track record of successful execution, a long track record of delivering strong financial results, and we expect to continue to deliver attractive financial results into the future.
With that, I’ll hand it back to Todd to provide more detail on our results.

Longevity experience overall was very good across the organization in EMEA, Canada and the US. And we completed several new transactions in EMEA. We remain optimistic about the potential in this market and believe that we are well positioned to take advantage of the many opportunities on a global basis.

Investment performance was good due to strong performance of our alternative investments, in large part from gains in our real estate joint ventures and private partnerships. We made a strategic decision to expand our investments in these alternative categories a number of years ago and we are benefiting from that decision.

These are cash gains, money in our pocket and we expect to continue to generate good returns going forward, although the quarterly amounts will fluctuate. There are many highlights in the quarter and year-to-date and reasons for optimism about our business going forward. That’s not to say that we don’t have challenges. In Australia, we had a larger loss than we’d experienced in recent quarters.

The industry remains under scrutiny by the public and regulators, and the overall industry dynamics continue to be challenging. We have a strong local team with the support of global expertise throughout RGA focused on the actions to remediate this business.

In summary, we view this as a very good quarter with many highlights. Looking forward, RGA is well positioned, we have a proven strategy, our business is in good shape and we remain optimistic about the future and our business prospects.

Ours is a long-term business and can best be judged by results over longer periods of time. We can point to a track record, a long track record of successful execution, a long track record of delivering strong financial results, and we expect to continue to deliver attractive financial results into the future.

With that, I’ll hand it back to Todd to provide more detail on our results.

Todd Larson

Todd Larson

Thank you, Anna. I’ll touch on a few financial metrics and provide some highlights of our segment results. Our adjusted operating return on equity for the trailing 12 months was 10.7%, which is within our guidance range of 10% to 12%. Our excess capital position at the end of the quarter was approximately $1 billion.
Considering the Anna’s comments on the active pipeline, this has us in a good position to continue to execute on opportunities. The foreign currency fluctuations had an adverse effect of $0.02 per diluted share on earnings as compared with the prior year. The effective tax rate on pre-tax adjusted operating income was 23.5% for the quarter, at the high end of our expected range of 21% to 24%. On our year-to-date basis, the effective tax rate on pre-tax adjusted operating income was 22.2%, well within our expected range.
The average investment yield, excluding our spread business was 4.83%, up 26 basis points from a year ago, primarily due to higher variable income this quarter. Our money rate was 3.82%, down from 4.02% in the second quarter. We continue to maintain a high quality investment portfolio and have been selective with new money investments in the current environment.
I would also like to add some context to Anna’s previous comments around alternative investments and the expectation that they will continue to add incremental returns over time, although subject to variability in the short-term. As these investments season, we expect embedded gains to be realized over time. The point is that we expect to continue to generate higher returns from this source into the future, and we view them as recurring in nature, but certainly will be some volatility from quarter-to-quarter.
And turning to our business segments, the US and Latin America Traditional business reported pre-tax adjusted operating income of $122.1 million, compared to $116.4 million a year ago. There were a number of items that affected results this quarter. Group experience was favorable and we had strong variable investment income. These were offset by unfavorable individual mortality experience as we experienced volatility from large claims this quarter.
The asset-intensive business reported pre-tax adjusted operating income of $65.6 million this quarter, above the expected range, benefiting from addition of new business and favorable longevity experience on a block of payout annuities. Our financial reinsurance line reported pre-tax adjusted operating income of $19.2 million this period in line with our expectations.
Moving to Canada, the Traditional segment had another strong quarter, with pre-tax adjusted operating income of $44.3 million. This reflects continued favorable individual mortality experience, the fourth quarter in a row. Premiums were up 11% on a reported basis and 13% on a constant currency basis primarily due to in-force transactions we entered into in 2018.
Canada Financial Solutions reported pre-tax adjusted operating income of $3.1 million compared to $1.6 million in the year ago quarter, with the current year quarter reflecting favorable longevity experience.

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谢谢你,安娜。我将介绍一些财务指标,并重点介绍我们的细分结果。我们过去12个月的调整后经营净资产收益率为10.7%,处于我们10%至12%的指导范围内。在本季度末,我们的多余资本头寸约为10亿美元。

考虑到安娜对有效管道的评论,这使我们处于继续执行机会的良好位置。与上年同期相比,外币汇率波动对每股摊薄收益产生了0.02美元的不利影响。该季度税前调整后营业收入的有效税率为23.5%,处于我们预期的21%至24%范围的高端。从年初至今,税前调整后营业收入的有效税率为22.2%,完全在我们的预期范围内。

除去我们的点差业务,平均投资收益率为4.83%,比去年同期增长了26个基点,这主要是由于本季度的可变收入增加了。我们的货币利率为3.82%,低于第二季度的4.02%。我们将继续保持高质量的投资组合,并在当前环境中选择新资金投资。

我还想在Anna先前关于另类投资的评论中添加一些背景信息,并期望它们会随着时间的推移继续增加增量收益,尽管短期内会有所变化。随着这些投资季节的到来,我们预计随着时间的推移会实现嵌入式收益。关键是我们希望从该来源到将来继续产生更高的回报,并且我们将其视为自然而然的回报,但是从季度到季度肯定会有所波动。

再来看我们的业务部门,美国和拉丁美洲传统业务的税前调整后营业收入为1.221亿美元,而去年同期为1.164亿美元。有许多因素影响了本季度的业绩。团队经验是有利的,我们拥有强劲的可变投资收入。这些被不利的个人死亡率经验所抵消,因为我们在本季度因大量索赔而经历了波动。

资产密集型业务本季度的税前调整后营业收入为6560万美元,高于预期范围,这得益于新业务的增加以及部分年金带来的有利的长寿经验。我们的金融再保险业务本季度的税前调整后营业收入为1,920万美元,符合我们的预期。

搬到加拿大后,传统分部又有了一个强劲的季度,税前调整后营业收入为4,430万美元。这反映出连续第四季度持续的个人死亡经验良好。按报告基础,保费增长11%,按固定汇率计算,增长13%,这主要归因于我们在2018年进行的有效交易。

加拿大金融解决方案部报告的税前调整后营业收入为310万美元,而去年同期为160万美元,本季度反映了长寿的良好经验。

In the Europe, Middle East and Africa segment, our Traditional business reported pre-tax adjusted operating income of $25.5 million, reflecting favorable underwriting experience across the region. Currency negatively influenced the bottom line by approximately $1 million.
Reported premium totaled $359.4 million, up 6% on a reported basis versus a year ago and up 11% on a constant currency basis. EMEA’s Financial Solutions business, which includes asset-intensive, longevity and fee-based transactions reported pre-tax adjusted operating income of $59 million compared to last year’s $56.4 million. Both periods were above our expectations, reflecting favorable asset-intensive and longevity experience. Currency had a negative impact of approximately $3 million.
Now to our Asia Pacific business. On the Traditional side, our pre-tax adjusted operating income had totaled $21.5 million compared to $62 million in the year ago period. This quarter reflects results in Asia that were modestly unfavorable and a loss in our Australia business of approximately $24 million.
The Australia results included one-time claims catch-up of about $6 million from one of our clients. Both the Group and the individual business in Australia underperformed this quarter as the runoff of closed treaties continues to be more extended and unfavorable than what we had expected.
Some of our open treaties underperformed this quarter, and we plan to continue to take rate actions to remediate these remaining open treaties. The year ago period had favorable underwriting experience in Asia and a smaller loss in Australia. Reported Asia Pacific Traditional premiums were up 19%, reflecting 29% growth in Asia offset by a decline in Australia.
Our Asia Pacific Financial Solutions business reported pre-tax adjusted operating income of $4.6 million, up from $1.3 million in the year ago quarter, reflecting the addition of several new treaties this year.
Anna mentioned how we are combining our capabilities in product development and Financial Solutions to help our clients. This is producing some nice growth opportunities in Asia. These broad-based solutions have resulted in new treaties this year, generating $30 million of premium in the current quarter.
The corporate segment reported a pre-tax adjusted operating loss of $29.9 million, higher than the expected run rate, primarily due to costs related to higher incentive-based compensation accruals and our strategic initiatives in service businesses. In conclusion, we view this as a very good quarter with many positives to highlight. We have continued to deliver strong organic growth and successfully executed on in-force transactions.
Our bottom line continues to benefit from a diversity of earning sources by both geography and product. As Anna mentioned, the financial impact of recent transactions has become more meaningful, and thus we are seeing higher earnings run rates in the US asset-intensive and EMEA segment. Based on the strong business fundamentals, despite some ongoing headwinds and challenges, we expect to continue to deliver attractive finance results over time into the future.

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在欧洲,中东和非洲部分,传统业务的税前调整后营业收入为2550万美元,反映出整个地区的良好承保经验。货币对底线产生了约100万美元的负面影响。

报告的保费总额为3.594亿美元,较去年同期增长6%,按固定汇率计算增长11%。欧洲,中东和非洲地区的金融解决方案业务(包括资产密集型,寿命长和收费交易)报告的税前调整后营业收入为5900万美元,而去年为5640万美元。两个时期均高于我们的预期,反映出良好的资产密集型和长寿经验。货币产生了大约300万美元的负面影响。

现在到我们的亚太业务。在传统方面,我们的税前调整后营业收入总计为2150万美元,而去年同期为6200万美元。本季度反映了亚洲的业绩不佳,澳大利亚业务亏损约2400万美元。

澳大利亚的结果包括从我们的一位客户处获得的一次性索赔约600万澳元。本集团和澳大利亚的个人业务在本季度均表现不佳,因为已达成的封闭条约的争端继续比我们预期的更广泛和不利。

我们的一些开放条约在本季度表现不佳,我们计划继续采取加息行动来补救这些剩余的开放条约。一年前,亚洲地区承保业务良好,而澳大利亚则亏损较小。报告的亚太地区传统保费增长了19%,反映出亚洲增长了29%,但被澳大利亚的下降所抵消。

我们的亚太金融解决方案业务报告的税前调整后营业收入为460万美元,高于去年同期的130万美元,反映了今年新增的几项条约。

安娜提到了我们如何结合我们在产品开发和财务解决方案方面的能力来为客户提供帮助。这在亚洲产生了一些不错的增长机会。这些基础广泛的解决方案在今年产生了新条约,在本季度产生了3,000万美元的保费。

公司部门报告了2990万美元的税前调整后经营亏损,高于预期的运行率,这主要是由于与基于激励的报酬增加有关的成本以及我们在服务业务方面的战略举措。总之,我们认为这是一个非常好的季度,需要强调很多积极因素。我们继续实现强劲的有机增长,并成功执行了有效交易。

我们的底线继续受益于地理和产品来源的多样化。如Anna所述,最近交易的财务影响变得更加有意义,因此,我们看到美国资产密集型和EMEA部门的收益运行率更高。基于强大的业务基础,尽管存在一些持续的不利因素和挑战,我们预计未来一段时间内将继续提供有吸引力的财务业绩。

We thank you and appreciate your support and interest in RGA, and now we’ll open the call for questions.

We thank you and appreciate your support and interest in RGA, and now we’ll open the call for questions.

问答环节

Thank you. [Operator Instructions] We’ll go first to Jimmy Bhullar with JPMorgan.

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谢谢。 [操作员说明]我们将首先与JPMorgan一起去Jimmy Bhullar。

Jimmy Bhullar

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吉米·布拉拉

Hi, good morning. So I had a question on the US business. So any insight into or color into what drove the weak results on the individual life block? And then on group business, you’ve had sort of volatile margins and it’s been a business that I think you were in the process of repricing. So the improvement this quarter obviously better than normal, but to what extent is it the result of your repricing actions taking effect and flowing through results versus just maybe a positive aberration in terms of claims?

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早上好。因此,我不得不对美国贸易方面的问题。因此,任何见解或颜色到什么驱使个体生命块上的薄弱结果吗? 然后在集团业务中,您的利润空间有些波动,我认为这是您正在重新定价的业务。 因此,本季度的改善明显好于正常情况,但是在多大程度上是您的重新定价措施生效并流经结果而不是索赔方面的正偏差?

Todd Larson

Todd Larson

Yeah. Overall the US Traditional segment had a good quarter compared to our expectations. And maybe it’d be good for me to break it down a little bit to the major pieces. You’re right, on the group side, which we have been in the process of a repricing over the course of the last several quarters and that’s basically done at this point so, and that this business has produced some good results throughout 2019. Now as far as the results of the repricing efforts, that will continue to emerge over time as those underwriting years develop.
And then taking a step back for the overall US Traditional segment, the US mortality markets business did have negative underwriting experience of $45 million, which was related primarily to large claims in the quarter and we did end up having really a handful of fully retained claims in this quarter on that line.
Now, offsetting that was the strong variable investment income that we mentioned in our prepared comments. And I would sort of measure that at about $23 million above our normal run rate for that segment. And then overall for the group and health line, I would say their overall underwriting experience was about $15 million favorable. And then we had as we always do some – across the segments, some model refinements and some client reporting catch ups that went to the good or favorable for us for the quarter of about $15 million.

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是的总体而言,与我们的预期相比,美国传统细分市场表现良好。也许对我来说将其分解成主要部分是一件好事。您是对的,在集团方面,最近几个季度我们一直在进行重新定价,目前基本上已经完成,因此,该业务在整个2019年都取得了不错的成绩。现在就重新定价工作的结果而言,随着承保年的增加,这种结果将随着时间的推移而不断出现。

然后退后一步,进入整个美国传统分部,美国死亡市场业务确实有4,500万美元的负承保经验,这主要与本季度的大额索赔有关,而我们最终确实只有少量完全保留的索赔在这个季度的那条线上。

现在,抵消的是我们在准备好的评论中提到的强劲的可变投资收入。我的估算是,与该细分市场的正常运营率相比,该收入要高出约2300万美元。然后,总体而言,对于集团和健康部门而言,他们的整体承保经验约为1500万美元。然后我们一如既往地进行工作–在各个细分市场中,对模型进行了一些改进,并对一些客户报告进行了跟进,这些季度对我们有利或有利,约为1500万美元。

Jimmy Bhullar

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吉米·布拉拉

And then in Australia like what’s – and then I think it was individual disability that caused the issues. To what extent are some of these issues ongoing versus maybe just contained to this quarter?

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然后在澳大利亚这样-然后我认为是个人残疾导致了问题。 这些问题中有哪些正在持续到本季度?

Todd Larson

Todd Larson

Yeah. Well – yeah, on the individual side, we have continued to see some poor experience there. There for the open treaties that we have, we will continue to pursue repricing efforts to remediate the experience on that business going forward. And you know we’re very focused on managing the in-force block that we have there, both on the individual side and on the group side and you know on the individual side, we’re really not and have not been quoting much in the way for new business.

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是的 好吧-是的,就个人而言,我们继续在那看到一些糟糕的经历。 对于我们拥有的开放条约,我们将继续努力进行定价,以补救今后的业务经验。 而且您知道我们非常专注于管理我们在那里存在的有效区块,无论是在个人方面还是在团队方面,并且您都知道在个人方面,我们实际上并没有在其中引用过多 新业务的方式。

Anna Manning

Anna Manning

Yeah, Jimmy I would add that we feel that some of the performance in this quarter is volatility related, but there is that ongoing persisting underperformance that as Todd just mentioned, we are addressing through rate actions and also a really keen focus on claims management.

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是的,吉米,我要补充一点,我们认为本季度的某些绩效与波动性有关,但是正如托德刚才提到的那样,持续存在的绩效持续不佳,我们正在通过费率行动来解决,并且也非常热衷于理赔管理。

会议主持员

We’ll now take our next question from Andrew Kligerman with Credit Suisse.

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现在,我们将听取瑞士信贷的Andrew Kligerman的下一个问题。

Andrew Kligerman

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安德鲁·克里格曼

Hey, good morning. Just thought of looking at your invested assets to equity. I think it’s roughly 7 times right now in terms of that leverage figure. The question is, how high would you be willing to let that leverage ratio go? I think the average for a life company is around 8.5 times. Is that where you want to be? Maybe a little color on that.

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嗨,早上好。 只是考虑将您的投资资产转换为权益。 就目前的杠杆率而言,我认为目前约为7倍。 问题是,您愿意将杠杆率提高多少? 我认为人寿公司的平均水平约为8.5倍。 那是你想去的地方吗? 也许有点颜色。

Todd Larson

Todd Larson

Yeah, Andrew I would not say we have a target of where we want to be as far as that metric, but it’s certainly something that we pay close attention to throughout our entire risk management process and approach.
And also you need to look at it by the underlying types of liabilities as well. For the most part, if you look at our Traditional mortality side, there’s not a lot of liquidity concerns on that business as premiums come in and we pay the claims outflows.
And then on the asset-intensive side that’s in the Financial Solutions business, most of those blocks we’ve brought on, on an in-force basis. So we can do a very good job with asset liability management sort of right off the bat and minimize some of the – sort of like any mismatch we might have there.
And there’s not a lot of situations, even if when you drill down into those underlying liabilities that there’s a lot of sort of liquidity or force selling events where we’d be forced to sell those investments in a bad environment.
So I guess it’s a long-winded way of saying that the market value of the assets can go up and down, and we definitely need to be considered around the overall asset leverage that we have in the enterprise. But the way the scenarios we look at, there’s not a lot that would end up with us having to liquidate in a bad environment.

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是的,安德鲁,我不会说我们有一个目标要达到该指标,但是在整个风险管理过程和方法中,我们肯定会密切注意这一点。

而且,您还需要通过负债的基本类型来查看它。在大多数情况下,如果您查看传统死亡率方面的信息,那么随着保费收入的增加,该业务没有太多的流动性问题,而我们将支付索赔费用。

然后,在金融解决方案业务的资产密集型方面,我们有效实施了其中的大部分障碍。因此,我们可以立即进行资产负债管理,并且将其中的某些问题(例如可能存在的任何不匹配)最小化,从而做得很好。

而且,情况并不多,即使当您深入研究这些潜在负债时,也存在大量流动性或强行抛售事件,在这种情况下,我们将不得不在恶劣的环境中出售这些投资。

因此,我想说资产的市值可能会涨跌可能是一个漫长的说法,我们绝对需要考虑企业中整体资产杠杆的影响。但是,从我们所观察的场景的角度来看,并没有很多结果使我们不得不在恶劣的环境中进行清算。

Anna Manning

Anna Manning

And Andrew, sorry just I’d like to add one thought in that. Having Langhorne is going to be helpful in this respect as well.

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和安德鲁,对不起,我想在此添加一个想法。 在这方面,拥有Langhorne也将有所帮助。

Andrew Kligerman

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安德鲁·克里格曼

And just to kind of wrap that question. So you would be comfortable growing the asset-intensive business, if that pushed the invested asset to equity ratio up a little bit. That would be something okay given your comfort with your asset liability matching?

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只是为了解决这个问题。 因此,如果将资产密集型业务推高一点,您会感到很自在。 如果您对资产负债匹配感到满意,那还好吗?

Todd Larson

Todd Larson

No we certainly would – are interested and will pursue asset-intensive related deals that we like. We’re fairly opportunistic and go hard after the underlying liability profiles that we’re comfortable with and certainly stay away from maybe underlying annuity-type products or asset-intensive products that might be a little bit more liquid like for example, that were sold through a brokerage chain and that type of thing.

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不,我们当然不会–会感兴趣,并且会追求我们喜欢的资产密集型相关交易。 我们相当投机,会努力应对我们熟悉的基本负债状况,并且一定要远离可能流动性更高的基本年金类产品或资产密集型产品,例如已售出的产品。 通过经纪链之类的东西。

会议主持员

[Operator Instructions] We’ll take our next question from Ryan Krueger with KBW.

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[操作员说明]我们将与KBW一起回答Ryan Krueger的下一个问题。

Ryan Krueger

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瑞安·克鲁格(Ryan Krueger)

Hi, thanks. Good morning. On the variable investment income to $23 million above normal, does the normal expectation reflect your comments that you expect kind of better earnings to emerge from this portfolio over time or would that be on top of kind of what you view at this point as a more normal level?

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你好谢谢。 早上好。 在可变投资收益比正常水平高出2300万美元的情况下,正常预期是否反映了您的意见,即您希望该投资组合随着时间的推移会带来更好的收益,或者这是您目前认为的更多收益? 正常水平?

Todd Larson

Todd Larson

I’m not sure I – Ryan, exactly understand your question. And maybe I’ll start responding this way and then maybe you can follow-up. That portfolio of alternative investments that made up of real estate equity ventures as well as some private partnerships. And we began investing in that several years ago, and now it’s gotten to a size and the underlying investments are getting to a little bit more of a mature stage.
So we are seeing our ability to generate some income from those increase over time and be a little bit more predictable. Although I’ll say, it’s still hard to predict quarter-to-quarter how much we might see in those. But we do expect the alternative assets, again, the real estate equity and the private partnerships to produce double-digit returns over time, albeit it’s going to be lumpy.

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我不确定我–瑞安(Ryan)是否完全理解您的问题。 也许我会开始以这种方式做出回应,然后您可以继续进行下去。 由房地产股权投资以及一些私人合伙企业组成的另类投资组合。 几年前,我们就开始进行投资,现在规模已经到了极限,基础投资也已经进入成熟阶段。

因此,我们看到了从中获得收入的能力,这些收入会随着时间的推移而增长,并且更具可预测性。 尽管我会说,但仍然很难季度到季度地预测我们将在其中看到多少。 但是我们确实希望替代资产,房地产股权和私人合伙企业将随着时间的推移产生两位数的回报,尽管这将是块状的。

Ryan Krueger

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瑞安·克鲁格(Ryan Krueger)

Got it. Yeah, my question was just, you said it was $23 million above your normal expectation, but then you also said, it sounded like your expectation is rising. So I wasn’t sure if the kind of that already incorporated your rising expectation or you think that could just perform above kind of normal over time now?

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得到它了。 是的,我的问题是,你说这比正常的期望值高出2300万美元,但随后你又说,听起来你的期望值正在上升。 因此,我不确定这种类型是否已经包含了您不断上升的期望,或者您认为随着时间的推移,这种表现是否会超出正常水平?

Todd Larson

Todd Larson

You’re right that our expectation is – has increased over time. And again, as those investments have gotten more seasoned and ready to harvest some of those underlying line gains.

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您是对的,我们的期望是正确的–随着时间的推移,它已经增加。 再者,随着这些投资变得更加成熟,并准备收获一些潜在的线收益。

Ryan Krueger

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瑞安·克鲁格(Ryan Krueger)

Got it. And then just on Australia as you continue to have some volatility there. I just wanted to just confirm that you’re still viewing this as more of an earnings issue and you still feel okay about the reserves?

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得到它了。 然后就在澳大利亚,因为那里继续存在一些动荡。 我只是想确认一下,您仍然将其视为收入问题,并且对储备金仍然感到满意吗?

Todd Larson

Todd Larson

We do. We view it as an earnings headwind. One we don’t like, but one that we feel is manageable. And as you look at our overall operations within the RGA Enterprise, we make pre-tax well over $1 billion. So this is not a material amount overall to our earnings, although clearly, we don’t like the experience that we’re seeing. And yet at this time, we see no material causes to increase reserves. So we’re still comfortable with the balance sheet.

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我们的确是。 我们将其视为收益不利因素。 我们不喜欢的一种,但我们认为可以控制的一种。 当您查看我们在RGA Enterprise中的整体运营时,我们的税前收入超过10亿美元。 因此,尽管显然,我们不喜欢所看到的经历,但这对我们的收入而言并不是一个整体。 但是目前,我们没有发现增加储备的重大原因。 因此,我们仍然对资产负债表感到满意。

会议主持员

Our next question will come from Dan Bergman with Citi.

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我们的下一个问题将来自花旗集团的丹·伯格曼。

Dan Bergman

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和伯格曼

Thanks. Good morning. I guess to start in terms of EMEA. I think the latest guidance you’ve given for the region was a $50 million to $55 million quarterly run rate in terms of earnings. With results generally strong in that business and some of the recent top line growth, I just wanted to see if that’s still a reasonable range or has your expectation be a little bit higher?

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谢谢。 早上好。 我想从欧洲,中东和非洲开始。 我认为您为该地区提供的最新指导意见是按收入计算的季度运行率在5000万至5500万美元之间。 总体而言,该业务的业绩强劲,并且最近的收入增长了一些,所以我只是想看看这是否还在合理范围内,或者您的期望更高?

Todd Larson

Todd Larson

No, our expectation is a little bit higher. We have been growing that business very nicely. And I would look at sort of a run rate going forward for the entire EMEA segment in the $55 million to $60 million range.

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不,我们的期望更高。 我们一直在很好地发展该业务。 而且,我将考察整个EMEA市场在5500万美元至6000万美元之间的运行速度。

Dan Bergman

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和伯格曼

Got it. Thanks. And then maybe just moving ahead to follow-up on Australia. Just in terms of the repricing actions and the runoff of some treaties, how soon should we expect some of the actions to have an effect on the earnings trajectory? Could that business return to profitability near medium-term or will any improvement likely take longer? Really just any thoughts around the earnings trajectory and pace of improvement would be helpful.

得到它了。 谢谢。 然后也许只是继续跟进澳大利亚。 就重新定价行为和某些条约的径流而言,我们应该期望多长时间这些行为会对收益轨迹产生影响? 该业务是否可以在中期恢复盈利,或者改善时间可能会更长? 实际上,关于收入轨迹和改善速度的任何想法都会有所帮助。

Todd Larson

Todd Larson

The repricing treaties as they come up for renewal on the group side and also as we can on the individual side it’s going to be, I think improvement more over time versus an immediate or short-term increase like we see in the US group business, this will take a little bit more time.

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在集团方面以及在我们个人方面可以续订的重新定价条约中,我认为随着时间的推移,改进的幅度会更大,而不是像我们在美国的团体业务中看到的那样,即刻增加或短期增加, 这将花费更多时间。

会议主持员

Our next question will come from Humphrey Lee with Dowling & Partners.

我们的下一个问题将来自Dowling&Partners的Humphrey Lee。

Humphrey Lee

汉弗莱·李

Good morning and thank you for taking my question. Just want to follow-up back on US group. You talked about this quarter was roughly $15 million favorable relative to your expectation. But at the same time, you’re going through the repricing. So I guess, from this quarter’s perspective, do you feel like it would be kind of comparable to a normal quarter of earnings power for the group or I mean would there still be kind of room to grow as you kind of continue to go through the – I mean, for the repricing to emerge?

早上好,谢谢您提出我的问题。 只想跟进美国小组。 您谈到本季度的收益大约比您的预期多了1,500万美元。 但同时,您要进行重新定价。 因此,我想从本季度的角度来看,您觉得这可以与该集团正常的季度盈利能力相提并论吗?或者,我的意思是,随着您继续努力,该行业仍有一定的增长空间。 –我是说,要重新定价?

Todd Larson

Todd Larson

Yeah. Well one maybe a slight clarification. The $15 million related to the group and our health line, albeit the majority of that number relates to the group business. Now, and this quarter was a good quarter for the US group line. It’s good to see it back to some solid profitability after we experienced the underperformance last year in 2018.
And as long as our efforts continue to play out as we expect them to, we’ll expect the earnings of that – the US group line to be in the range of, call it, $35 million to $40 million as I think I mentioned last quarter, once it gets back to full profitability and all the rate increases have kicked in.

是的 好吧,也许有一点澄清。 这笔1500万美元与该集团及我们的医疗部门有关,尽管其中大部分与该集团业务有关。 现在,这个季度对美国集团公司来说是一个好季度。 在我们经历了2018年表现不佳之后,很高兴看到它恢复了稳固的盈利能力。

只要我们继续努力,如我们所愿,我们就可以期望它的收益–我认为我提到的美国集团收益在3500万至4000万美元之间 一个季度,一旦它恢复了全部盈利,所有的加息都开始了。

Humphrey Lee

汉弗莱·李

So for this quarter, are you below that or were you above that?

因此,在本季度中,您是低于该数字还是高于该数字?

Todd Larson

Todd Larson

For the quarter for the US group line, they performed a little bit better than what we were – better than what we expect. It’s hard to – that’s just for the quarter. Humphrey, I’m not sure exactly what you – the question is trying to get to.

在美国集团的季度业绩中,他们的业绩好于我们的预期,好于我们的预期。 很难-仅针对该季度。 汉弗莱,我不确定您到底是什么,这个问题正在试图解决。

Humphrey Lee

汉弗莱·李

No, I just want to try to get a sense of for the performance this quarter relative to, I guess, a full earnings power of that business line but I think you got it –

不,我只是想对本季度的业绩有所了解,相对于我认为该业务部门的全部盈利能力,但我想您已经明白了–

Todd Larson

Todd Larson

Is it that – yeah, for the quarter, it’s probably towards the high end, but again, like all of our businesses just looking at one quarter, it’s hard to draw run rate conclusions. Again, we’d like to look at it over longer period of time. So the group line is performing well, better than it has last year and mediation efforts seem to be going in the right direction.

是的-是的,对于本季度而言,可能接近高端,但是就像我们所有企业仅关注一个季度一样,很难得出运行率结论。 同样,我们希望在更长的时间内进行研究。 因此,小组会议表现良好,比去年好,调解工作似乎朝着正确的方向发展。

会议主持员

And our next question will come from Erik Bass with Autonomous Research.

我们的下一个问题将来自自主研究的Erik Bass。

Erik Bass

埃里克·巴斯

Hi, thank you. Big picture, just given the volume of in-force transactions over the past two years. Can you just help us think about the incremental earnings contribution you expect? Where we should see this come through? And the timing of the earnings emerging?

嗨,谢谢你。 纵观过去两年的有效交易量,这是一个大局。你能不能帮我们想想增量盈利贡献你期待? 我们应该在哪里看到这种情况? 以及盈利的时间出现了吗?

Todd Larson

Todd Larson

Well, I think yeah on the capital deployment side, we’re happy with what we’re seeing as far as the opportunities and the actual deployment. Most of the larger activities and opportunities we’re seeing are have been on the US asset-intensive side, where we closed a couple of nice transactions this year, and also over in EMEA, primarily in the UK. And we price for sort of lower double-digit returns, 12%, 13% range and the way US GAAP works, it takes a little bit of time for the new treaties or new blocks to get up to that level. But overall, I think that’s a good way to look at it.

好吧,我认为是的,在资本部署方面,对于机会和实际部署,我们感到满意。 我们看到的大多数大型活动和机遇都集中在美国资产密集型方面,今年我们完成了几笔不错的交易,在欧洲,中东和非洲(EMEA)也完成了交易,主要是在英国。 我们为较低的两位数回报率,12%,13%的范围以及美国GAAP的运作方式定价,新条约或新条款要花一点时间才能达到该水平。 但总的来说,我认为这是一个很好的观察方法。

Erik Bass

埃里克·巴斯

Got it. I guess maybe asking it a different way. When you’ve given run rates for asset-intensive for the US, I guess I think it’s $55 million to $60 million per quarter. And EMEA, you were talking about something in a similar range. So does that contemplate the contribution from recently closed blocks or could that move those ranges higher as they start to fully earn in?

得到它了。 我想也许会以不同的方式询问。 当您给出美国资产密集型的运转率时,我想我认为它是每季度5500万至6,000万美元。 和EMEA一样,您在谈论的范围也差不多。 那么,这是否考虑了最近关闭的区块的贡献,还是可以在这些区域开始完全赚取收益时将这些范围推高?

Todd Larson

Todd Larson

Okay. Yeah, sure. Yeah, it does although I would say since we have been successful with some of those blocks more recently, we expect that to be towards the higher end of those ranges and hopefully over time, exceed them.

好的。 当然可以。 是的,虽然的确如此,但我会说,由于我们最近在某些区块中取得了成功,因此我们希望它会朝着这些区间的高端发展,并希望随着时间的推移会超越它们。

Erik Bass

埃里克·巴斯

Our next question will come from Alex Scott with Goldman Sachs.

我们的下一个问题将来自高盛(Goldman Sachs)的亚历克斯·斯科特(Alex Scott)。

Alex Scott

亚历克斯·斯科特

Hey, good morning. First question I had was on US [technical difficulty]. So I guess, when I go through some of these building blocks that were outlined before, it gets me up somewhere in like the $125 million to $130 million range, I think, is what I was getting to. So I’d just be interested in understanding like that I guess as a percentage of the sort of the $350 million that you’ve communicated in the past as a run rate.
Is that a good way to think about like how much of the earnings is concentrated in 3Q? And it seems like that’s become more concentrated over time. And just any color you can give around as sort of the seasonality increases, as the policyholders are aging, how that will change things in 2020 and 2021?

嗨,早上好。 我的第一个问题是关于美国的[技术难度]。 因此,我想,当我仔细研究一下之前概述的一些构建基块时,我的目标就是要达到1.25亿美元至1.3亿美元的范围。 因此,我只是想了解一下您过去交流的3.5亿美元(作为运行率)的百分比。

这是思考将多少收入集中在第三季度的好方法吗? 随着时间的流逝,这似乎变得越来越集中。 随着季节性的增长,随着投保人的老龄化,您所能提供的任何颜色,这将如何改变2020年和2021年的情况?

Todd Larson

Todd Larson

Yeah. So – maybe to start out that you quoted the $350 million the run rate for the Traditional segment. I think that’s still a good run rate to benchmark off of. Yeah, this quarter, we were about all in right around $120 million-ish, $122 million for the quarter for that segment, which there is some seasonality there quarter-to-quarter, which generally the third quarter has been a very fairly good quarter.

是的 因此–也许您一开始就引用了传统分部3.5亿美元的运营率。 我认为这仍然是一个不错的运行基准。 是的,这个季度,我们的收入大约在1.2亿美元左右,该细分市场的季度为1.22亿美元,季度间存在一些季节性因素,通常第三季度是一个相当不错的季度 。

Anna Manning

Anna Manning

Alex, I would add, we would expect and I think we’ve spoken about this in prior quarters, we would expect that as the mortality business ages that we would see more seasonality. And when we think of seasonality, really, we think about first and second quarters tend to be lighter and then third and fourth quarters tend to be heavier in respect of earnings.
Now the only additional element that I would add is, as we continue to be successful on organic business, new organic business and in-force blocks and here it’s mortality blocks I’m referencing not the asset-intensive, that can put a little bit of pressure in the other direction. But given the scale of our business, I would expect seasonality to increase steadily as we go forward.

亚历克斯,我想补充一点,我们希望并且我想我们已经在之前的季度中谈到过这一点,我们希望随着死亡率业务的增长,我们会看到更多季节性。 实际上,当我们考虑季节性因素时,我们认为第一季度和第二季度趋于减轻,然后第三季度和第四季度趋向于增加收入。

现在,我要添加的唯一附加要素是,由于我们在有机业务,新的有机业务和有效部门方面继续取得成功,在这里,死亡率是指我所指的不是资产密集型部门,因此可以说 另一个方向的压力。 但是鉴于我们的业务规模,我预计随着我们的发展,季节性会稳定增长。

Alex Scott

亚历克斯·斯科特

That’s all helpful. Thank you. And then maybe just to follow-up on Langhorne and the deal pipeline for the kind of deals you’d be targeting in there. Does the interest rate environment just make it too difficult to achieve the kind of returns that you all want to hit here or is it still pretty active?

都是有帮助的。 谢谢。 然后也许只是针对Langhorne和您打算在那里定位的交易类型的交易管道进行跟进。 利率环境是否会使获得所有人都想在这里获得的那种回报变得太困难了,还是仍然很活跃?

Anna Manning

Anna Manning

The way I would describe our Langhorne pipeline is, it’s a promising pipeline and it has transactions in it that are US-based transactions and European-based transactions. UK, Netherlands, those type of countries. It’s a really – it’s a very highly competitive market as you can appreciate for those deals. We’re talking about very large deal sizes.
I’m pleased with the progress and the process we’ve been following; we’re not chasing deals. We’re not relaxing our risk disciplines to chase deals. We’re being responsible. And although it’s taking time, we remain – I remain optimistic. I think interest rates are a factor. But they’re not the only factor. And as I said, we think this pipeline is promising.

我描述Langhorne管道的方式是,这是一个很有前途的管道,并且其中包含基于美国的交易和基于欧洲的交易。 英国,荷兰,那些类型的国家/地区。 的确如此-这是一个竞争非常激烈的市场,您可以从中受益。 我们正在谈论非常大的交易。

我对我们所遵循的进度和过程感到高兴; 我们不追求交易。 我们不会放松风险纪律以追求交易。 我们有责任。 尽管需要时间,但我们仍然会保持乐观的态度。 我认为利率是一个因素。 但是,它们并不是唯一的因素。 正如我所说,我们认为这一管道很有希望。

会议主持员

[Operator instructions] We’ll go next to John Nadel with UBS.

[操作员说明]我们将在瑞银(UBS)旁边紧随约翰·纳德(John Nadel)。

John Nadel

约翰·纳德尔

Hey, good morning. So we’ve seen – or we’ve – I guess we’ve heard from some companies now over the last couple of quarters. And most specifically, just before your call on the Lincoln Call, some adjustments for the primary underwriters to reflect higher reinsurance costs. Anna have – I think in the past, you’ve indicated that RGA really has not raised prices in any material way on in-force treaties. But can you just sort of update us on that?

嗨,早上好。 因此,我想我们已经(或者已经)在过去的两个季度中收到了一些公司的来信。 最具体地说,就在您致电“林肯电话”之前,对主要承销商进行了一些调整,以反映出更高的再保险成本。 安娜(Anna)–我认为您过去曾表示,RGA确实并未在有效条约上以任何实质性方式提高价格。 但是,您可以在这方面进行一些更新吗?

Anna Manning

Anna Manning

Yeah. Yeah, we do not have a broad-based repricing strategy. We’re not following that approach as others in the market have followed, because we think this is a long-term business. We have long-term relationships. What we do, do and have been doing is, we take a look at the balance of our relationship with the client across all their business across all countries.
And if we see that, that balance of relationship is tilted to extreme, then we will sit down and we will work with clients to come up with ways for us to rebalance that. Now we’ll also look at things like, are there systemic issues with the client?
For example, has there been really poor underwriting practices? And so in those instances, if there has been that type of activity, we do take action. But again, it’s through working with our clients to realign those relationships. RGA strategy is really – we’re in it for the long haul, and we’re in it in a partnership with our clients for the long haul.

是的 是的,我们没有广泛的定价策略。 我们不遵循市场上其他公司的做法,因为我们认为这是一项长期业务。 我们有长期的关系。 我们所做的事情,做过的事情以及一直在做的事情是,我们了解了我们与客户在所有国家/地区的业务之间的平衡。

如果我们看到这种关系的平衡变得极端,那么我们将坐下来,与客户合作,为我们找到重新平衡的方式。 现在,我们还将研究客户端是否存在系统性问题?

例如,承保方式是否真的很差? 因此,在那种情况下,如果有这种活动,我们就会采取行动。 但同样,这是通过与我们的客户合作来重新调整这些关系的。 RGA策略确实是–我们长期参与其中,并且我们与客户建立长期合作伙伴关系。

John Nadel

约翰·纳德尔

Got you, that’s helpful. Thank you. And then I know there’s an awful lot of moving parts to earnings growth, whether it’s capital deployment organically, inorganically, seasoning of various blocks, et cetera. But just focusing in on how much long-term interest rates have declined here.
I just wanted to get a sense if we thought about your intermediate term, 5% to 8% annual operating EPS growth, and we isolate it on interest rates, is – are we low enough on rates that all else equal, that 5% to 8% growth objective is pressured to the downside?

知道了,对您有帮助。 谢谢。 然后,我知道有很多推动收益增长的因素,无论是有机地,非自然地,各种区块的调味等资本配置。 但是,只关注这里的长期利率下降了多少。

我只是想知道一下,如果我们考虑到您的中期,即5%至8%的年度运营EPS增长,并且将其与利率隔离开来,那就是–我们的利率是否足够低,而其他所有利率都等于5%, 8%的增长目标是否面临下行压力?

Todd Larson

Todd Larson

Hey, John, this is Todd. As you know, we generally update comprehensively our guidance in January when we go through year end. But just specifically on interest rates, we have been looking at that. And it’s – if you look at, say, 1% or so decrease in rates from where we are today, that would have an impact clearly on our earnings power going forward and create a headwind and sort of on our Traditional business, these aren’t exact numbers.
But I’d say, 1% decline from here could impact next year earnings by in the neighborhood of $20 million of pre-tax. That being said, we’re still going to do our best to overcome any of that headwind through our business operations. And also, currency has an impact, too. That can go both ways.

嘿,约翰,这是托德。 如您所知,我们通常会在年底进行的1月份全面更新我们的指南。 但是,仅就利率而言,我们一直在研究。 这就是-如果您将利率从今天的水平降低1%左右,那显然会对我们未来的盈利能力产生影响,并给我们的传统业务造成不利影响,而这些并非' t确切数字。

但我要说,从这里下降1%可能会影响明年的税前收入约2,000万美元。 话虽如此,我们仍将尽我们最大的努力克服我们业务运营中的任何不利因素。 而且,货币也有影响。 这可以双向进行。

会议主持员

We’ll now take questions from Andrew Kligerman with Credit Suisse.

现在,我们将听取瑞士信贷银行(Andrew Kligerman)的提问。

Andrew Kligerman

www.

安德鲁·克里格曼

Hey, thanks. Going back to Australia, just hoping for kind of a recap on the geography of the losses, I guess most of it was individual disability, maybe the mix of group and individual and then where you think that – what are you thinking for 2020 in terms of these different product areas?

嘿,谢谢。 回到澳大利亚,只是希望对损失的地理位置进行回顾,我想其中大部分是个人残障,也许是群体残障和个人残障的结合,然后您认为呢– 2020年您的想法 这些不同的产品领域?

Todd Larson

Todd Larson

Yeah, Andrew, for the quarter, the loss was really across the product lines, both the group and the individual lines experienced poor performance. And I think as we mentioned and Anna also mentioned, on the group side, we had some volatility related to some catch-up on claims from one of our clients.
So going forward, projecting out what we expect for 2020, it’s difficult given the experience. But again, we are actively managing that in-force block. But I would say, for 2020, we’ll likely be in a loss position, although as I mentioned earlier, I think it will be a manageable loss given RGA’s overall operations and just the size of the business in Australia.

是的,安德鲁(Andrew),在本季度中,损失实际上是整个产品线,集团和单个产品线都表现不佳。 我认为,正如我们提到的和安娜也提到的那样,在集团方面,我们的波动与追赶一位客户的索赔有关。

因此,展望未来,规划出我们对2020年的期望,鉴于这一经验,这很难。 但是,再次,我们正在积极管理这一有效措施。 但我要说的是,到2020年,我们可能会处于亏损状态,尽管正如我前面提到的那样,鉴于RGA的整体运营以及澳大利亚业务的规模,我认为这将是可控的亏损。

Andrew Kligerman

www.

安德鲁·克里格曼

Is this a market that you would consider exiting or is it just you need to work through the issues?

您会考虑退出这个市场,还是只是需要解决这些问题?

Anna Manning

Anna Manning

Yeah. Andrew, maybe I’ll take that. So first, we’re concentrating obviously on managing the in-force on rehabilitation. But let’s take a step back for a minute. Our group business has been profitable since 2014, albeit with some ups and downs. And the group reinsurance market in Australia is one of the largest markets in the world. Now, we want to support our global clients and that is part of our strategy, part of the strategy that has been successful.
This is an industry problem. It’s not just a problem isolated to RGA and it’s a well-recognized industry problem and it’s in everyone’s best interest to have a viable, a sustainable market. And it’s in everyone’s best interest to work together to get us there. There’s not going to be a quick fix.
And so for us, as Todd mentioned, it’s an earnings headwind, it’s a manageable earnings headwind in the context of the global operations. And certainly given the strength in all of our other areas, but we think that we can continue to remediate this and work with the other participants in the industry to fix the industry and then, we believe we can continue to make money over the long run.

是的安德鲁,也许我会接受。因此,首先,我们显然要集中精力管理有效的康复服务。但是,让我们退后一分钟。自2014年以来,尽管出现了一些起伏,我们的集团业务仍实现了盈利。澳大利亚的团体再保险市场是世界上最大的市场之一。现在,我们希望为全球客户提供支持,这是我们战略的一部分,也是成功战略的一部分。

这是一个行业问题。这不仅是RGA隔离的问题,而且是公认的行业问题,拥有一个可行的,可持续的市场符合每个人的最大利益。共同努力使我们到达那里符合每个人的最大利益。不会很快解决。

正如托德(Todd)所言,对我们而言,这是一项收益阻力,这是在全球运营范围内可控制的收益阻力。当然,鉴于我们在所有其他领域的实力,但我们认为我们可以继续进行补救,并与该行业的其他参与者合作以修复该行业,然后,我们相信从长远来看我们可以继续赚钱。

会议主持员

We’ll now take the question from Alex Scott with Goldman Sachs.

现在,我们将与高盛的Alex Scott一起提问。

Alex Scott

亚历克斯·斯科特

Hi. Thanks for taking the follow-up. I just thought that I’d ask about expenses, just thinking through some of the initiatives that are going on. The current expense base which maybe had something in there for a little more deployment activity recently. I mean, how should I think about how that will trend sort of overall for expenses? And maybe, I guess specifically the corporate segment?

你好 感谢您的跟进。 我只是想问一下费用,只是考虑一些正在进行的计划。 当前的费用基础可能在其中包含一些用于最近的更多部署活动的费用。 我的意思是,我应该如何考虑总支出趋势? 也许,我想特别是公司部门?

Todd Larson

Todd Larson

Overall, expenses enterprise-wide, like every company, I guess will go through pretty diligent process and budgeting expenses, and compared to our overall budget for the enterprise on operating expenses, we’re doing fairly well against that benchmark.
Now if you look at it year-over-year, there can be some fluctuations as we’ve acquired some businesses that brought in expenses that maybe were in ‘19, but not ‘18. But compared to our expectation, our budget overall so far through the year, we’re doing okay.
Now, switching to the corporate segment, there you see a little bit more volatility and we’re running a little bit high compared to the $25 million average loss in the quarter. And that’s an overall loss for the corporate segment, not necessarily targeted directly to just the expenses, because we have the operations of Langhorne in there and some of our RGAx and service businesses that go through the corporate line.
But as of right now, I think through the first three quarters, the average corporate loss for the segment is about $27 million. So maybe running a little bit higher from that $25 million, but that $25 million right now is, I think, still a fairly good estimate.

总体而言,我想像每个公司一样,整个企业范围内的支出都将经过相当勤奋的流程和预算支出,并且与我们的企业总体预算的运营支出相比,我们在该基准方面做得还不错。

现在,如果您逐年查看,则可能会有一些波动,因为我们收购了一些业务,这些业务的费用可能在'19,而在'18中却没有。但是与我们的预期相比,我们到目前为止的总预算还是不错的。

现在,转到公司部门,您会发现波动性有所增加,并且与该季度的平均损失2500万美元相比,我们的运行情况略高。这是公司业务的整体亏损,不一定直接针对支出,因为我们在那里拥有Langhorne的运营以及我们通过公司业务线进行的某些RGAx和服务业务。

但就目前而言,我认为在前三个季度中,该部门的平均公司亏损约为2700万美元。因此,也许是从这2500万美元中拿出一些钱,但我认为,现在的2500万美元仍然是一个相当不错的估计。

Alex Scott

亚历克斯·斯科特

All right, thank you.

好哒。谢谢你们。

会议主持员

And it appears there are no further questions at this time. Mr. Larson, I’d like to turn the conference back to you for any additional or closing remarks.

看来目前没有其他问题了。 拉森先生,如果您有其他任何补充意见,我想将会议转回给您。

Todd Larson

Todd Larson

So everyone, thank you for joining us this morning for the call and your continued support for RGA. Thank you very much.

因此,每个人,感谢您今天上午加入我们的电话会议以及您对RGA的持续支持。 非常感谢你。

会议主持员

This concludes today’s call. Thank you for your participation. You may now disconnect.

今天的电话到此结束。 感谢您的参与。 您现在可以断开连接。

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