Robust new business growth, a strong rebound in group business, and exceptional financial solutions results helped generate $663 million in pre-tax income for U.S. and Latin America operations in 2019, a 24% increase over the previous year. In a year of higher-than-expected individual mortality claims, this significant earnings growth demonstrates the strength and resilience to market volatility built into RGA’s diversified portfolio of business. Principal business lines in this operating segment, RGA’s largest, include individual life and health; group life, health, and disability; and asset-intensive, capital-solutions, and longevity reinsurance.
Assumed new business volume totaled $119 billion in the region overall, a 12% increase over 2018. Industry leadership in facultative underwriting accounted for more than $16 billion in life reinsurance placed as U.S. underwriters reviewed more than 100,000 facultative cases for the 13th consecutive year.
RGA solidified its position as the market’s risk assessment leader with the launch of innovative data-driven solutions. A breakthrough Digital Health Data (DHD) Risk Scoring service offered clients a real-time platform to derive actionable underwriting risk scores from structured electronic medical records and medical claims data. The U.S. team also brought a new prescription history risk scoring model to market in 2019. Both solutions were integrated into RGA’s RiskDimensionsSM portfolio of risk assessment tools, which work together to provide clients with a more comprehensive view of an applicant’s risk profile.
In U.S. group business, RGA’s strong partnerships and value-added services remained a competitive advantage. Active portfolio management in response to market changes produced a solid year financially, with healthcare and disability excess lines delivering improved underwriting results. The Healthcare Stop Loss Turnkey solution launched in 2018 added multiple clients while generating significant cross-sell opportunities.
Global Financial Solutions (GFS) enjoyed unprecedented success in the U.S. in 2019, achieving a record-high $398 million in pre-tax income, an increase of 59% over 2018. Clients’ capital optimization and business growth needs required innovative financial solutions RGA was uniquely equipped to deliver. Earnings reflected excellent results in both new and in-force business, particularly within asset-intensive blocks. After executing the first-ever U.S. longevity swap in 2018, RGA continued to develop capabilities in the emerging U.S. pension risk transfer reinsurance market. Through additional data sources and dedicated resources, GFS is exploring opportunities to leverage RGA’s global expertise in longevity risk management.
Latin America operations’ traditional reinsurance business surpassed $100 million in total annual revenues for the first time in 2019. Innovation continued to drive new business as the team integrated digital tools into new products to help reach underserved consumers. Health initiatives, from condition-specific protection products to employer stop loss solutions, provided business expansion opportunities for clients and positioned RGA for continued growth in the region.
U.S. and Latin America Operations Net Premiums
(in millions USD)