Client-Focused Investment Strategy Supports Strong Business Results
RGA is a long-term investor focused on profitable growth while managing downside risk. This approach requires an investment portfolio strategically built to weather economic cycles and strengthened through diligence in investment selections and ongoing surveillance to achieve target returns. By producing strong credit performance and steady investment income, the Investments team helps solidify RGA’s financial position and enables new business growth – both for RGA and its client partners.
To meet insurers’ growing need for more complex financial solutions, RGA has expanded and diversified investment capabilities to make such solutions possible. In 2021, the Investments team collaborated with colleagues in Global Financial Solutions (GFS) to facilitate a range of transactions around the world, helping produce an exceptional year for GFS. Investment professionals based across all regions developed and executed liability-driven investment strategies, including portfolio construction and repositioning to support the acquisition of new reinsurance business.
While public investment-grade corporate bonds remain the largest asset allocation in RGA’s portfolio, expansion into private asset classes and derivative solutions continued to gain momentum in 2021. Private Debt & Equity expanded capabilities while growing the business, investing $889 million in direct debt and equity in private companies across North America, which more than doubled the previous record set in 2020. ReCap, RGA’s fully integrated commercial mortgage loan and real estate group, supported and augmented the organization’s commercial mortgage loan investments, which reached $6.3 billion at the end of 2021.
By producing strong credit performance and steady investment income, the Investments team helps solidify RGA’s financial position and enables new business growth – both for RGA and its client partners.
The Investments team also developed a future-focused investment strategy in 2021 to align with RGA’s enterprise growth strategy. It calls for scaling and accessing investments that provide additional risk-adjusted yield premium to enhance new business competitiveness and in-force returns. The multi-channel approach to asset sourcing is designed to provide access to key assets at favorable economics. Critical to its success is continued investment in people, processes, and partnerships that leverage existing capabilities to build on a track record of extending the investment platform and creating value for RGA and its clients.
Responsible Investing Advances RGA’s Social Purpose
RGA’s diversified investment portfolio backs the many long-term commitments RGA has made to clients and the families those clients serve. For this reason, maintaining financial strength through sound investment practices ultimately supports the enterprise’s social purpose: to make financial protection accessible to all.
An integrated environmental, social, and governance (ESG) philosophy informs our decision-making at RGA and drives rigorous research, analysis, and ongoing monitoring of investments. The Investments team understands that ESG factors are core to evaluating a company’s long-term viability, profit potential, and return on investment. Through a sector-by-sector and investment-by-investment approach, RGA empowers its investees, engaging in evaluation of both their current ESG activities and their efforts to transition to more sustainable practices.
RGA’s long-term ESG investment strategy made these key advances in 2021:
- Committed to complete annual TCFD (Task Force on Climate-related Financial Disclosures) reports starting in 2022.
- Explored more granular ESG metrics for evaluating investment opportunities in accordance with RGA’s mission and purpose.
- Conducted a benchmarking study to gain greater understanding of current methodologies and industry best practices.
- Expanded ESG training and education for corporate credit group, including in-depth sector presentations.
RGA remains committed to discovering new ways for its investment portfolio to both fuel business growth and support healthier and more sustainable communities.