Q2 2023 Reinsurance Group of America Incorporated Earnings Call
[music].
Good day and welcome to the reinsurance group of America incorporated second quarter 'twenty 'twenty earnings Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing Star then detail.
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Please note this event is being recorded.
I would now like to turn the conference over to Todd Larson Senior Executive Vice President and Chief Financial Officer. Please go ahead.
Thank you.
Welcome to Rga's second quarter 2023 conference call.
I'm joined on the call. This morning, with Anna Manning Rga's, Chief Executive Officer.
Tony Chang President.
Leslie Barbie, Chief Investment Officer, Jonathan Porter, Chief Risk Officer.
As a quick reminder, before we get started regarding forward looking information and non-GAAP financial measures.
Some of our comments or answers to your questions may contain forward looking statements.
Actual results could differ materially from expected results.
Please refer to the earnings release, we issued yesterday for a list of important factors that could cause actual results to.
To differ materially from expected results.
Additionally, during the course of this call.
The information we provide may include non-GAAP financial measures.
Please see our earnings release earnings presentation.
And quarterly financial supplement all of which are posted on our website for further discussion of these terms and reconciliations to GAAP measures.
And now I'll turn the call over to Anna for her comments.
Thank you John Good morning, and thank you for joining our call today.
Last night, we reported second quarter adjusted operating earnings of $4 40 per share.
This was a strong quarter with many regions and business lines performing very well.
It was also another quarter demonstrating the power of the underlying earnings engine in our business as well as the ongoing success of our growth strategy that is adding meaningful long term value to that engine.
Let me turn to a few of the highlights in the quarter, which include favorable mortality experience in our U S individual business as well as favorable performance in our U S group and individual health businesses.
Our Asia traditional business also benefited from favorable claims experience as well as higher yields.
Our global financial solutions business had another strong quarter with contributions from both spreads and favorable longevity experience continuing the trend of excellent performance over a number of years.
Investment performance in the quarter was good as new money rates remained attractive and impairments were minimal.
We believe our investment portfolio is well positioned to withstand any ongoing economic uncertainties.
And strong new business momentum in our organic business continued through the quarter and notably picked up in Asia.
In a few minutes, Tony will expand on the quarter's activities and on our future growth opportunities.
We had another very successful quarter on the capital management front deploying $190 million into enforced and other transactions.
In the year to date total to $384 million of capital put to work.
I am pleased with the start of the year and with the state of our transactions pipelines, which are at very healthy levels with opportunities across many geographies and risks.
In the quarter, we also repurchased $50 million of shares bringing the year to date total to $100 million in share repurchases.
And we increased our quarterly dividend to <unk> 85 cents per share representing a six 3% increase to our shareholder dividends.
This has been a very busy six months of active capital management.
At our recent Investor day, we highlighted the earnings power in our business and the reasons for the excitement we have about our growth opportunities.
We talked about favorable industry dynamics driving stronger demand for what we do so well.
Whether that is to help clients find new ways or better ways to reach consumers or to underwrite products in a more efficient and effective manner.
We also see strong demand for new products to better meet the changing needs of consumers.
And increasing demand to help our clients better manage their risk and capital needs.
We are very well positioned to benefit from all of those opportunities.
The breadth and depth of capabilities technical expertise.
And crucially the risk discipline necessary to thrive in this highly complex industry.
We got the collaborative culture strong client partnerships global scale and a proven and successful strategy that is delivering substantial long term value to our clients and for our shareholders.
It gives me a great deal of confidence in Rga's future and our ability to continue to deliver growth and attractive returns to our shareholders over many years to come.
Thank you for your continued support and interest in RGA.
I will now hand, it over to Tony to provide additional thoughts on our business momentum.
Thank you.
I did mention we see favorable industry dynamics, and we are well positioned to benefit from these many opportunities.
During our recent Investor day, we highlighted four areas with particularly good growth opportunity there.
These all areas off longevity M. P O T Asia traditional.
As your asset intensive and our U S traditional business.
We are seeing strong success across all fall in 2023.
Our longevity business is experiencing strong volumes in Europe , and we are delighted with the announcement earlier this week.
5 billion U K pound longevity swap transaction.
We continue to see a strong pipeline of business in the region.
Our U S. PRT business continues to gain momentum and we are increasingly confident of our prospects in this sizable and growing market.
In Asia, there is a strong recovery in economic activity driving the demand for new products, we have launched with our partners.
We see strong momentum in all our businesses with particular success this quarter in South Korea.
During Investor Day, we spoke of a new product we launched in China in late 2022.
We are pleased with the reception of this product in the market and are actively working with other market leading insurers on similar product ideas.
And our Hong Kong business has the additional tailwind.
The rebound of mainland Chinese visitors to closer to pre pandemic level.
These visitors are a material source of business for the Hong Kong insurance market.
These new product initiatives.
Much examples of how we grow by partnering with clients to.
Help grow underlying insurance market.
Yeah.
Well the Asia asset intensive business, we are partnering with multiple clients to optimize their risk and capital management.
This is best exhibited by another important transaction this quarter in Japan with the new client.
A number about previous coinsurance transactions were with the international companies with Japanese operation.
This new transaction was sizable in nature and with one of the largest domestic companies.
As an example of how we grow by expanding the use of reinsurance within a market, which is an important element of our strategy as we expressed during investor day.
As Asia regulators adopt new capital standards. Our teams are providing first to market capital solutions that lead to exclusive transaction around the region.
Finally in our U S. Traditional business, we continue to see strong demand for a broad range of underwriting programs.
These programs not only directly generate reinsurance business, but also strengthen our value proposition.
Combining this value proposition without relentless client focus has led to RJ being chosen for significant share in many major reinsurance pool over the past 12 months.
As you can see we are pleased with the volume and the breadth of our business wins.
What is just that's pleasing is how we are winning a large part of this new business.
We communicated previously that RJ its business model is to provide risk and capital solutions to address the complex business needs about clients.
Examples I have just by that show the power of our underwriting product development and capital management expertise.
When they are all combined with proactive business development, we increase the chance of winning exclusive business.
We are particularly pleased with the positive results from exclusive transactions. This year and are confident this can continue going forward.
These transactions generate greater value for RJ, and our partners and ultimately benefit the insurance industry and consumers through innovation.
In addition, we can replicate these successes in other market through our strong teams worldwide.
Thank you for your interest in O J I will now turn it over to Todd to discuss the financial results.
Thanks, Tony now turning to the quarter's results RGA reported pretax adjusted operating income of $376 million for the quarter and adjusted operating earnings per share of $4.40, which.
Which includes a foreign currency headwind of seven cents per share.
The trailing 12 months adjusted operating return on equity was 10, 9%.
Excluding the 2020 to assumption changes refer to as notable items.
Trailing 12 months adjusted operating return on equity was 13%.
We are pleased with the strong quarterly results.
As well as new business production capital deployment in the in force and other transactions and investment results.
Reported premiums were up three 3% for the quarter.
After adjusting for adverse foreign currency impacts.
Premiums were up four 7% in the quarter and seven 7% year to date, both on a constant currency basis.
As Tony and Ana mentioned, we have strong momentum in the business activity and we expect this to continue to contribute to premium growth overtime.
Turning to the quarterly segment results on slide six in our earnings presentation that can be found on Rga's Investor Relations website.
The U S and Latin America traditional segment reflected favorable mortality experience in our individual mortality business. Good results in group and individual health.
Partially offset by some one time items of approximately $12 million.
The favorable individual mortality experience was widespread and driven by lower large claims and better than expected older age mortality.
This experience occurred and both are capped and uncapped cohorts.
As we've previously discussed under L. D. T. I current period mortality experience has a modest impact on the bottom line on the uncapped cohorts as part of the results are spread into the future.
And that is what we saw in this quarter were favorable mortality results were spread into the future periods.
The one time items reflect certain actions that together had an adverse impact in the second quarter, but are expected to be favorable to long term future cash flows.
The U S asset intensive business results were strong, reflecting improved investment spreads, including higher yields on floating rate securities.
And our U S capital solutions business continues to perform in line with our expectations.
Canada traditional results reflected slightly favorable mortality experience and the fed.
Financial solutions business reflected favorable longevity experience.
In the Europe , Middle East and Africa segment, the traditional business results reflected moderately unfavorable mortality experience in the U K.
Consistent with excess mortality general population trends.
The immediate financial solutions business results reflected favorable longevity experience.
Turning to our Asia Pacific traditional business.
Results reflected favorable claims experience most of which came through in the second quarter due to the L. D T I cohorts impacted.
The Asia Pacific Financial solutions business performed well, reflecting favorable investment spreads and claims experience.
The corporate and other segment reported pretax adjusted operating loss of $55 million.
More than the expected quarterly range, primarily due to higher financing costs and the timing of some general expenses.
Year to date results were in line with the expected run rate.
Moving onto investments on slides eight through 11.
The non spread portfolio yield for the quarter was $4 four 2%.
Collecting the lower contribution from variable investment income primarily in limited partnerships.
Our non spread business, our new money rate rose to 6.09%.
Reflecting higher available market yields with select opportunities in structured securities and private assets.
Credit impairments were minimal and we believe the portfolio is well positioned as we move through any ongoing economic uncertainties.
Moving onto capital management as shown on slides 12, and 13, our capital and liquidity position remains strong.
And we ended the quarter with excess capital of approximately $1.2 billion.
In the quarter, we deployed 190 million of capital and to enforce and other transactions.
In the year to date total to $384 million.
We also returned a total of $104 million of capital to shareholders through $50 million of share repurchases and $54 million in dividends.
We expect to remain active in deploying capital into in force and other transactions and returning excess capital to shareholders through dividends and share repurchases.
Okay.
As shown on slide 14, we have a long track record of increasing book value per share over many periods.
Including at a compounded annual growth rate of 10, 5% since the beginning of 2021.
To summarize we are very pleased with our second quarter performance with.
Which follows the strong first quarter.
Our business is resilient with substantial underlying earnings power.
Momentum is strong and we see good opportunities across our geographies and business lines.
Looking forward, we are well positioned for the future and expected to deliver attractive returns to shareholders over time.
This concludes our prepared remarks.
I'd now like to open it up for questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys is that any Dan. Your question has been actress and you would like to withdraw your question. Please press Star then two.
In the interest of time, please limit yourself to one question and one follow up and you maybe Q4 more follow up question at.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Jimmy <unk> with J P. Morgan. Please go ahead.
Hey, good morning.
I had a couple of questions first on your new money yield.
It went up a lot faster than it has gone up in the past several quarters at slightly over 50 basis points and goodbye.
And by a greater magnitude that I think what the rise in interest rates would suggest so just wondering if you think that it. This is a normal level to think about as you as we think about your investment income or was it mostly allocation into certain securities that lifted it beyond what it would have normally been the score.
Sure.
And then.
Oh, sorry go ahead.
Why don't you go ahead and then the other question later.
Then I don't have to remember for us okay.
Yeah. Thanks for the question give me a call.
Barbie, Yeah, so our new money rate did go up quite a bit as you know market yields went up I think the investment grade index went up 31 basis points. We did have some mix shift because we had some very attractive opportunities in select private assets and structured securities.
So there's some of both but I think that that you know.
It's 6% ballpark is not a bad expectation, so it'll come off a little bit but.
Now going back to the normal mix won't send it down tremendously.
Okay, and then just on the tax rate.
It was a it was lower than it normally has been in what we had expected.
Was there any one timers, there and what's your expectation for the tax rate going forward.
No.
No the tax rate will move.
No move around.
A little bit quarter to quarter, but what we saw this quarter was one where the mix of earnings emanated from from around the world and how that translated in.
The taxes and also this is the time of year.
When we have filed a various tax returns and we true up provision through the tax return filings and that resulted in that.
Positive to the reduction to the tax rate I should say.
Okay. Thank you.
The next question comes from John Barnidge with Piper Sandler. Please go ahead.
Yeah.
Good morning, and thanks for opportunity can you talk about the investment yield ex VII I know that's a gross figure. So there may be some expenses, but maybe talk about the roll off could portfolio yield gap a little bit.
Sure. Thanks.
This is Leslie again, so on the portfolio yield you're right. The it came off a little bit ex VII and that was really due to some extent.
Timing in the quarter that tends to vary so all all things equal we expect the portfolio yields continue to rise and you know versus things that are rolling off will probably picking up about 150 basis points right now so any money.
So we'll continue to be additive to the portfolio yield.
Okay.
Thank you very much and my follow up question EMEA mortality has had a bit of an unfavorable tail I know the NHS is challenged in that country is that a repricing opportunity or is that something that.
I need some structural addressing to improve profitability. Thank you.
Yeah, Hi, John it's Jonathan here.
Yeah, certainly we are reflecting our current expectations for the tightening in mortality environment in the U K in our pricing. So I think we have taken appropriate action there from a new business perspective.
A reminder, that we do have a.
Very sizable longevity book of business as well in the U K. So the higher general population mortality, although it is providing a headwind to the mortality business, which was accounted for it's also providing a tailwind to longevity business and we saw that come through our results in the current period to where our longevity gains in our financial solutions line actually a little bit more than offset the mortality drags in.
The traditional business.
Okay.
Thanks for the answer.
The next question comes from Ross Carmichael with Wells Fargo. Please go ahead.
Hey, good morning, just hoping you guys could provide some color on the pipeline and the outlook for pension risk transfer transactions in the U S. I just kind of wondering what's what's kind of your sweet spot in terms of size and maybe timing of the rest of 2023 with its looking like thank you.
Yeah.
Hi, Thanks This is Tony.
As we've shared previously look we're very pleased with the progress.
We're making in the PRT.
The market and we're actively quoting and then there is a very strong pipeline of opportunity.
We strategically now that you know we are the natural home for longevity, given out very very sizable block of mortality.
We've got the expertise now in the U S that webex border from other parts of the World. That's of size, we tend to focus on the upper end of the market.
In partnership.
Because we feel there is less competition in that area. So.
Unfortunately, we havent closed the transaction this quarter, but with.
Closed the transaction earlier this year and we're eagerly anticipating a future transactions in the future.
Thanks, Tony and I'm, just wondering did you have any impact.
Impacting the quarter from enforce pricing actions. They think I think there was a little bit of maybe benefit in the first quarter results. So I'm. Just wondering if there was any of that came through in the second quarter results.
Yeah, Hi, Tracy it's Jonathan.
Yeah.
I won't comment specifically at the product level like once you start to really drill down and parse the enforce book of business the credibility.
False falls quite a bit.
But in total as was mentioned sort of in our prepared remarks, we have seen favorable experience this quarter for sure. It's mostly driven by fewer large claims in the current period.
Is concentrated more in the older ages, where it's been more favorable for us.
And.
Just again reminder, for video L. Specifically.
We ensured the mortality risk on that book of business again to Stuart.
Sure.
Yeah totally got it I was just asking about the margin Hey last quarter, you shared that you come from repricing effort.
Was that done this quarter as well.
Yeah.
Todd you want to take that.
Hi, Tracy it's Todd Yeah, No. We did do some re pricing activity in the first quarter, but as I mentioned, a little while ago.
During the second quarter there was not.
Any specific new repricing activity.
Thank you.
Yeah.
The next question comes from Erik Bass with Autonomous Research. Please go ahead.
Hi, Thank you relative to the guidance you provided at Investor Day Asia earnings this quarter came in well above expectations with this just favorable experience this quarter, whereas the earnings power improved given the business' growth and macro environment, you're saying.
Oh, Hi, Eric It's Todd Yeah, you know we provided the.
Stated.
Financial targets and run rates back at Investor Day in mid June . So we're not updating any of that at this point you know where it's great to see the results that we've seen in that segment, especially in the second quarter and a lot of that was favorable.
Experience that came through in the current quarter.
Got it and then maybe could you provide some more color on the Oh I'm sorry.
It's just that I made.
Yeah.
Strategically and in Asia, We're obviously very bullish.
Bullish about both the traditional and the asset intensive business. The pipelines are very very full and income.
As long as the number of exclusive so they're all very good signs that our strategy is working.
In many many places and that obviously makes sense more more and more positive about the future.
Thank you and maybe just to follow up on that can you provide a little bit more color on the premium growth drivers in Asia and sort of how much is coming from new business versus block deals.
Okay.
I'd say I'll focus I mean, you know as the best measure Paul.
Gross when we look at growth in Asia.
And you know.
It's really the traditional business all the.
Organic business when we look at premium crops that we focus more on side.
Uh huh.
Yes, Paul block transactions, sometimes premium is not the best indicator.
I would say.
Just in general, we're seeing great growth opportunities across both lines of businesses for different reasons.
But.
Driver of that premium.
We focus on is mainly on the organic side on the traditional business.
Got it thank you.
Our next question comes from Simeon Gutman with Jefferies. Please go ahead.
Yeah. Thanks, Toni you you'd mentioned a deal that you did with a traditional Japanese insurance company and it sounds like this is the first of that type of transaction.
Just any color in terms of what the motivation was for the cedent there and are you expecting that ESR I know, it's a couple of years away is that going to create some additional opportunities for you guys.
Yeah, Let me let me.
Sorry about that I mean, yeah.
Yeah, absolutely this well its a very important transaction as I mentioned in the prepared remarks.
Japan has as many math, it's once you you.
Sort of get a breakthrough of sorts then others follow so this funding so I can't go into too much details, but it is important because the walls with a domestic and we would anticipate other domestics are watching very carefully and hopefully following suit.
<unk> is a very big driver of.
The opportunities matching in Japan.
Absolutely.
The capital management side companies, even though it's out to 2025 companies are obviously very much preparing parts.
Yeah, just listening to.
Some of the other calls that you all being part of that in the last few days you can see the intersection let's say new products and the growth in Japan.
But maybe I saw potentially having.
An adverse effect on the capital side of that so we're perfectly positioned to solve both problems, which is obviously, a new product development and combining that with capital solutions and that's absolutely why we are very.
Oh crisp on that intersection of those two strong capabilities that we have.
Got it makes sense and then I guess for Todd is the.
50 million pace of share repurchases that we saw in the quarter should we sort of think about that as a run rate going forward or.
Are you expecting that to change.
Oh hi.
You know, we'll continue to manage capital over time, I think as we've talked about you know we sort of have the.
Three levers one is we like deploying the capital back into the business and the transactions, where we get a good return for the risk that we're taking and are maintaining our dividend and then we go overtime, we balance it out with no share repurchases and so I think you'll see us continue to be.
You know active in managing the capital levels and we like our current position because I think we're in a position to capitalize.
On opportunities that we see in a very healthy pipeline and if those don't develop then we'll certainly continue to manage the other levers. So I think you know we don't have actual you'll see there's a stated program for share repurchase in place, but I think you'll see us continue to use that as the you know one of the levers of how we effectively.
You know manage the capital level.
Okay. Thanks.
The next question comes from Ryan Krueger with a BW. Please go ahead.
Hey, good morning could you provide some more quantification on the favorable U S mortality experience in the quarter, perhaps or perhaps maybe the actual to expected results because I think under <unk>, it's a little bit more challenging to quant.
Quantify how much how favorable mortality is given this smoothing impact.
Hey, Hi, Ryan Scott, Yeah, I L. T. I S. I guess it has made it a little bit.
More difficult to see the actual underlying experience as a reminder, you know.
For the.
Captain floored.
Contracts under L. D T I D experience.
It all flows through in the current quarter.
And for uncapped cohorts.
Some comes through currently in some as a spread out into the end of the future are specifically.
Specifically, you know for U S mortality.
In the quarter.
Good way to think of it is that the underlying experience was favorable by around $25 million based on our expectation and above.
$5 million of that came through in the second quarter and then the remaining 20 will be.
Red are going in the future periods.
Great. Thanks, that's very helpful and then on the large.
European longevity transaction can you give a rough sense of how much capital that will deploy in the quarter.
We normally don't provide.
Pacific transaction, our capital numbers.
Okay got it thank you.
Our next question comes from Tom Gallagher with Evercore. Please go ahead.
Good morning can you square the $24 million Remeasurement loss in the quarter for U S. Traditional with the comments of favorable mortality, what what drove the remeasurement loss.
Oh, Hi, this is Todd again, yeah. So the.
The numbers I provided.
You know related to claims experience in.
In the Remeasurement gain or loss that includes more than just a claims activity. It can be just the adjustments to expected premium it could be you know anything that impacts.
The future cash flows and usually a lot of the.
Impact that comes through in that Remeasurement gain or loss relates to lost in <unk>.
Floored a contract and it relates and it doesn't.
It mainly relates to.
The impact of any changes in experience or cash flows premiums that type of thing from the transition date or the treaty inception date to the current period, it's not including sort of all the future.
You know impacts that that you would take into account.
Okay.
And how was the underlying within the U S traditional business.
Long term care performing I think some peers had had experienced some elevated claims did you see the same.
Sure. This is this is Todd again.
Just maybe taking a step back and as a reminder, our long term care block is relatively recent.
It was not in the ore that's I guess considered some of the legacy blocks a lot of ours was issued like 2009 onwards thoughts to your underlying product terms I think or <unk>.
Much more fair the way I always describe it fair between the policyholder and the insurance company versus some of the older type long term care, where you might hear a little bit more about the.
Elevated claims or reserve strengthening and that type of thing, but we're seeing a continued performance within our expectations on our block I'd say no I cannot.
<unk> at this point based on the experience that we've been seeing so we're happy.
We're happy with our our specific block.
Got you and then just final one the $12 million of one time items in U S trends that you mentioned were negatively affecting earnings this quarter can you.
Elaborate a little bit on that what were those and why.
Why is it going to improve future.
Cash flows or earnings.
Sure sure Yeah, So we had some.
Recaptures of some retro sessions on that we were we had retro ceded business. We added some recaptures and then we had.
Our recapture on the from the or client perspective, and so when we recaptured the.
Our retro treaties, we had to reestablish some reserves on that business. So that primarily you know created the velocity adverse impact in the current quarter.
But we would expect that.
To produce positive impacts.
Going forward and I would size it about the positive impact of around $4 million on an annual basis, you know amortizing down overtime so economically.
It was a good decision the bacon like everything we're constantly.
Managing our overall enforce book and this was what we viewed as a good decision to bake a from an overall economic perspective.
Gotcha, so that that 4 million should be additive I presume to the segment's guidance when we think about I mean, its small but its.
Modest upward adjustment is that fair.
That's fair you know, there's always things that go both ways, but yes, it should be a.
A positive over time.
Thank you.
Yeah.
Our next question comes from Alex Scott with Goldman Sachs. Please go ahead.
Hi, yes.
I guess a lot of my questions have been answered, but I thought I'd ask about the.
Transaction volume, we've seen in the U S year to date and just what your take is on the competitive environment. So we you know we didn't see RGA participate.
Some of these bigger deals that were announced.
Yes.
Some of the Counterparties involved.
Not quite as well known as RGA.
What was your perspective on that.
And how do you see that pipeline through the end of the year.
Yeah. Thanks, Alex.
You know we were you absolutely.
Very active in this market and we pick our spots we saw in the transactions that we feel we can add the most value to that.
That pipeline.
That that's probably the area of our company that gain the most attention with regard to the competition.
But we are you know.
Very confident we've got all the capabilities to assess the blocks.
In an appropriate manner and then.
Yeah, it'd be ready to pounce when the opportunity arises yes, there are meaningful opportunities in the.
The pipeline in that area.
And.
We're optimistic of closing transactions I Wanna say when these big transactions get them out we do participate at times around the edges, but its still very meaningful at times it could be a y T mortality transaction at times it could be a capital financing part of a transaction then.
And they are very meaningful.
Transactions for us so I just wanted to share that color also.
Got it very helpful. And then maybe just going back to net investment income I mean can you talk at all about how much you all benefited from in the floating rate portfolio. You do have an yeah, I guess I'm just thinking through the lift in NII.
<unk> been had there, but it may slow down as well.
<unk> potentially.
We're not raised as much at the fed fund's level anyway.
Hey, Alex it's likely yeah, so on the the benefit to NII.
You know that the benefit we had in the quarter was really a combination of things.
Extension trades and other relative value transactions and there has still been a little bit of a boost from a cash and floating but when you look at the non spread in total.
All of the assets that are.
Net of floating liabilities, we've actually had some of that risk out from floating to fixed so there's really not much impact last there, they're still a little bit more in a spread business. So we keep an eye on that whether it's a you know we thought rates were to fall more than than the forward teammate hedged.
More but but certainly that total sensitivity is coming down it's been done extension trade matching.
Yeah.
Got it thank you.
Our next question comes from Mike Ward with Citi. Please go ahead.
Thanks, guys good morning.
I don't know if you if you quantify this but wondering if you could.
Help us kind of size the favorability in Asia.
In a similar way as you did for the U S.
I like it is Todd no I guess, the best way to respond to that right. Now is that if you look in the aggregate across those.
The rest of our business segments.
Most of the favorable experience in the quarter did come through.
In the end.
In the second quarter.
Very little of it was.
A deferred into the future of spread into the future.
Okay. So.
So the U S. Traditional you mentioned there was like $25 million of favorable do you have that for Asia.
No maybe one way to put it is if you look at Asia.
The entire Asia Pacific.
Segment.
The I would say see the favorable variance to the range of run rates a lot of that was due to.
Some experience and some other.
Hum Treaty Treaty true ups.
Okay.
And then.
On the recapture activity.
Just wondering if you can sort of help us understand what's driving that and if we should.
More in fact going forward.
Well, it's just that you know, it's part of our ongoing overall management of our.
Business, and where we see there.
Appropriate opportunities to take some actions we will do that so there's really no.
Wait for me to sort of quantify any future.
Activity.
Okay.
Yes.
Yeah.
Our next question is a follow up from best Carmichael with Wells Fargo. Please go ahead.
Hey, Thanks for taking my question and one housekeeping item I think on corporate you guys mentioned that there might be some expense timing. So I just wanted to kind of confirm like do you think corporate velocity, there should pick back to kind of that 30% to 35 million or $35 million to $40 million loss range from the 55 in the second quarter.
Yeah, So what we saw in the second quarter.
With some there was some higher financing costs and some timing of some.
General expenses, if you look year to date for corporate we're pretty much.
On the on the run rate, what what I would probably maybe suggest or point to that as we go forward are probably might be towards the higher end of the run rate for our corporate hopefully we can manage that as tightly as possible, but maybe that's the best guidance or information I can give to that.
A couple of calls and in this.
On excess capital it did tick down a bit to a two 1.2 billion I just wanted to get your view on.
Should we expect you to kind of manage that lower and it seems like you know transaction volume has been pretty healthy and it seems like it will continue into the.
Second half of the year. So so just kind of any view on where we should think about excess capital going going forward sure now as we mentioned earlier, we we like our position currently because I think we're in a good position to take advantage of.
The healthy pipeline transactions that we're seeing across the various.
Jacob geographies, and you'll work very comfortable bringing that excess capital level down again through transactional activity or other ways.
No return capital to the shareholders. So you got $1 2 billion at the end of the quarter.
Comfortable bringing it down and look forward to deploying it into some good transaction.
Thank you very much.
This concludes our question and answer session I would like to turn the conference back over to Anna <unk> for any closing remarks.
Thank you.
Hi, Thank you for your questions and for your continued interest in RGA. This was another strong quarter on further.
Further demonstrating the substantial earnings power in our business, we're a global leader, we're very well positioned to capitalize on the many growth opportunities ahead and that you've heard about it through the course of the last hour and we are confident in our ability to continue to deliver attractive returns to our investors.
So thank you everyone and that concludes our second quarter call.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.