Q1 2025 Reinsurance Group of America Inc Earnings Call

Unknown Executive: Good day and welcome to Reinsurance Group of America first quarter 2025 earnings conference call.

Good day and welcome to reinsurance group of America fourth quarter 2025 earnings Conference call.

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Unknown Executive: I would now like to turn the conference over to Jeff Hobson, Senior Vice President of Investor Relations. Please go ahead. Thank you.

Jeff Hopson: I would now like to turn the conference over to Jeff Hopson Senior Vice President of Investor Relations. Please go ahead. Thank you welcome to Rga's first quarter 2025 conference call I'm joined on the call. This morning by Tony Chang Rga's, President and CEO, and so Andre Chief Financial Officer Leslie Barbie.

Tony Cheng: Welcome to RGA's first quarter 2025 conference.

Tony Cheng: I'm joined on the call this morning by Tony Cheng, RGA's President and CEO, Axel Andr, Chief Financial Officer, Leslie Barbi, Chief Investment Officer, and Jonathan Porter, Chief Risk Officer.

Jonathan Porter: <unk> investment officer, and Jonathan Porter, Chief Risk Officer.

Unknown Executive: A quick reminder before we get going regarding forward-looking information and non-GAAP financial measures. Some of our comments today 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 differ from expected results.

Jonathan Porter: A quick reminder, before we get going regarding forward looking information and non-GAAP financial measures. Some of our comments today 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.

Jonathan Porter: To differ 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 a discussion of these terms and reconciliations to GAAP measures.

Unknown Executive: 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 a discussion of these terms and reconciliations to GAAP measures. Throughout the call, we will be referencing slides from the earnings presentation, which again is posted on our website.

Jonathan Porter: The call, we will be referencing slides from the earnings presentation, which again is posted on our website.

Tony Cheng: And now I'll turn the call over to Tony for his comment. Good morning everyone and thank you for joining our call. Last night we reported adjusted operating earnings of $5.66 per share. Our adjusted operating return on equity, excluding notable items, was 15%. I consider this to be a very good quarter and it provides a strong start to the year. We achieved these results through a balance of strong performances across many of our geographic regions and products. The most significant driver of the results was the favourable claims experience, which is a continuation of our strong underwriting results over the past couple of years.

Tony: Now I'll turn the call over to Tony for his comments.

Tony: Good morning, everyone and thank you for joining our call.

Last night, we reported adjusted operating earnings of $5.66 per share.

Tony: Adjusted operating return on equity excluding notable items was 15%.

Tony: I consider this to be a very good quarter and it provides a strong start to the year.

Tony: We achieved these results through a balance of strong performances across many of our geographic regions and products.

Tony: Most significant driver of the results was the favorable claims experience, which is a continuation of our strong underwriting results over the past couple of years.

Tony Cheng: Despite ongoing macroeconomic uncertainties, we are not seeing a significant impact on our business. Our asset portfolio remains well-positioned, and our capital position remains strong. Therefore, we are highly confident we can successfully navigate the current environment without losing any of our strong momentum.

Tony: Despite ongoing macroeconomic uncertainties, we are not seeing a significant impact on our business our asset portfolio remains well positioned and our capital position remains strong.

Tony: Therefore, we are highly confident we can successfully navigate the current environment without losing any about strong momentum.

Tony Cheng: I am very proud to announce that for the 14th year in a row, RJ was number one in terms of the NMG Consulting's Business Capability Index, with particular strength in underwriting, actuarial, product innovation, and relationship management. We believe the backbone to our success is our biometric expertise. In other words, we are second to none in terms of pricing, underwriting, and ongoing risk management of mortality, morbidity, and longevity. As you know, this expertise either directly leads to more biometric re-insurance or indirectly is our key differentiator in the asset-intensive blocks that we pursue. Our biometric expertise has also led to strong claims experience over RJA's history.

Tony: I am very proud to announce that for the 14th year in the row RJ was number one in terms of the N M. G consulting business capability index with particular strength in underwriting actuarial product innovation and relationship management.

Tony: What do you believe the backbone to our success is our biometric expertise.

Tony: In other words, we are second to none in terms of pricing underwriting and ongoing risk management of mortality morbidity and longevity risks.

Tony: As you know this expertise ease that directly leads to more biometric reinsurance or indirectly is our key differentiator in the asset intensive blocks that we pursue.

Tony: Al biometric expertise has also led to strong claims experience.

Tony: <unk> history.

Tony Cheng: Since the end of 2022, our cumulative underwriting claims experience has been highly favorable compared to expectations. And finally, with regards to this quarter, all of our key geographic regions reported favourable claims experience on both an economic and gap income statement basis. In terms of in-force transactions, we had a strong quarter with $418 million of capital deployed. This includes the previously announced Manulife deal that closed at the beginning of the quarter, as well as two more modest-sized strategic transactions in Asia. Additionally, in February, we announced a strategic transaction with Equitable. The actual capital deployment for this deal will be recorded when it closes, which is expected mid-year.

Tony: Since the end of 2022 our cumulative underwriting claims experience has been highly favorable compared to expectations and finally with regards to this quarter all of our key geographic regions reported favorable claims experienced on both an economic and GAAP income.

Tony: Statement basis.

Tony: In terms of in force transactions, we had a strong quarter with $418 million of capital deployed.

Tony: This includes the previously announced Manulife deal that closed at the beginning of the quarter as well as to more modest sized strategic transactions in Asia.

Tony: Additionally, in February we announced the strategic transaction with equitable.

Tony: The actual capital deployment, probably still will be recorded when it closes which is expected mid year.

Tony Cheng: As a reminder, this transaction is in our wheelhouse of mortality risk and we expect the financial returns to be within our targeted range.

Tony: As a reminder, this transaction is in our wheelhouse of mortality risk and where do you expect the financial returns to be within our targeted range.

Tony Cheng: I will now provide details on some of our new business activities in the quarter focused on our four areas of notable growth. In Asia traditional, we had a strong quarter in terms of new treaties with all markets performing well. Importantly, nearly all this success is related to creationary product development initiatives. Creationry refers to our ability to partner with clients on a more exclusive basis to deliver new products and create greater value for both our clients and RGA. These partnerships have allowed RJA to grow together with our clients and in many cases help them win industry awards and gain market leadership.

Tony: I will now provide details on some of our new business activities in the quarter focused on our four areas of notable growth.

Tony: In Asia traditional we had a strong quarter in terms of new treaty with all markets performing well.

Tony: Importantly, nearly all of its success is related to creation rate product development initiatives.

Tony: Creation rate refers to our ability to partner with clients on a more exclusive basis to deliver new products and create greater value for both our clients and a J.

Tony: These partnerships have allowed RJ to grow together with our clients and in many cases help them win industry awards and gain market leadership.

Tony Cheng: For RJ, this leads to quality repeat business and also larger transactions as our clients grow in scale. This is best illustrated by the fact that since 2021 The new business embedded value per transaction for Asia has tripled in size. This is due not only to larger sized transactions, but also due to higher expected underwriting profitability as we create new products with little competition. More strategically, each new product not only leads to more business, more data and a stronger brand, but also deepens our library of solutions. These solutions are then adapted and replicated across different markets, creating further new products, and the creation refly will continue.

Tony: Or RJ this leads to quality repeat business and also larger transactions as our clients grow in scale.

Tony: This is best illustrated by the fact that since 2021.

Tony: The new business embedded value or <unk>.

Tony: Transaction for Asia has tripled in size.

Tony: This is due not only to larger sized transactions, but also due to higher expected underwriting profitability as we create new products with little competition.

Tony: More strategically each new product not only leads to more business more data and a stronger brand, but also deepens our library of solutions.

Tony: These solutions are then adapted and replicated across different markets, creating further new products and the creation rate flywheel continues.

Tony Cheng: Let me highlight this with our largest traditional business in Asia. The Hong Kong underlying life insurance market remains very strong, achieving record sales in 2024, increasing over 21% from 2023. This is due to the rapid growth in mainland Chinese visitors buying insurance, the aging population and Hong Kong being a major high net worth wealth management centre.

Tony: Let me highlight this without largest traditional business in Asia.

Tony: So Hong Kong underlying life insurance market remains very strong achieving record sales in 2024, increasing 21% from 2023.

Tony: This is due to the rapid growth in mainland Chinese visitors buying insurance, the aging population and Hong Kong being a major high net worth wealth management Center.

Tony Cheng: In response to these trends, we recently launched three new initiatives. The first is our simplified issue critical illness product catered to the senior market. Second, we continue to be highly successful in delivering the more complex underwriting services needed for the high net worth sector. And third, we developed the MedScreen Plus underwriting. which simplifies the process for mainland Chinese visitors coming to Hong Kong. This underwriting system won its second award during the quarter and is fast being recognised as a competitive advantage for our clients. These innovations drive the creation rate business in Hong Kong, lead to deeper market penetration and further create our library of solutions that we tailor for other markets with similar needs across Asia.

Tony: In response to these trends, we recently launched three new initiatives.

Tony: The first is our simplified issue critical illness product tied to the senior market.

Tony: Second we continue to be highly successful in delivering the more complex underwriting services needed for the high net worth segment.

Tony: And third we develop the med screen, plus underwriting system, which simplifies the process well mainland Chinese visitors.

Tony: Coming to Hong Kong.

Tony: This underwriting system wanted second award during the quarter and his thoughts being recognized as a competitive advantage for our clients.

Tony: These innovations drive the creation rate business in Hong Kong data deeper market penetration and further create our library of solutions that we tailor for other markets with similar needs across Asia.

Tony Cheng: Moving to Asia Financial Solutions, our second area of notable growth. We closed two block transactions in Japan. For both these transactions, RGA has had a long-standing relationship for more than a decade.

Tony: Moving to Asia financial solutions, our second area of notable growth we closed two block transactions in Japan.

Tony: Well both of these transactions RGA has had a long standing relationship well more than a decade.

Tony Cheng: Japan is one of our most exciting business opportunities as a result of the new ESR Capital Framework. Our local teams not only provide quotes on a timely manner, but also provide the after-sales service in the local language and adhering to local culture. We feel this gives RJ a distinct edge in this market segment. Tremendously value the large marquee transactions.

Tony: Japan is one of our most exciting business opportunities as a result of the new ESI capital framework.

Tony: Our local teams not only provide quotes on a timely manner, but also to provide the after sales service and the local language and adhering to local cultures.

Tony: What do you feel this gives RJ a distinct edge in this market segment.

Tony: We of course tremendously value the large marquee transaction.

Tony Cheng: But as important are these more frequent modest size blocks that play towards our sweet spot of biometric expertise and strong local teams. These more modest-sized transactions are often completed without an intense bidding process, and RJ, with its many touchpoints and long-standing relationships, is best positioned to benefit.

Tony: But as important are these more frequent modest size blocks that play well to our sweet spot of biometric expertise and strong local teams.

Tony: These more modest sized transactions are often completed without an intense bidding process and I'll, let jay with its many touch points and long standing relationships is best positioned to benefit.

Tony Cheng: Our third area of notable growth is the longevity and PRT market. Starting with the UK, we expect strong levels of PRT sales once again during the year. Similar to Japan, our local UK team has, in my view, a comparable combination of expertise, data, relationships and experience in the longevity market, which is why they have long been the market leader. Similar to Hong Kong, we have a market-leading underwriting system for the individual retail annuity segment that ensures we win more than our fair share of business. Our pipeline remains very strong and we expect another successful year.

Tony: Our third area of notable growth is the longevity and PRT market.

Starting with the U K, we expect strong levels of payout T cells once again during the year.

Tony: Similar to Japan, our local U K team has in my view any comparable chemo combination of expertise data relationships and experience in the longevity market, which is why that has long been the market leader.

Tony: Similar to Hong Kong, we have a market leading underwriting system for the individual retail annuity segment that ensures we win more than our fair share of business.

Tony: Our pipeline remains very strong and we expect another successful year.

Tony Cheng: The US PRT market has been less vibrant recently, which may be reflecting the effects of market uncertainty resulting in less deal activity at the upper end of the market. We do expect this to be temporary and for the market to recover and we remain very bullish on this business line.

Tony: The U S. P O T market has been less vibrant recently, which may be reflecting the effects of market uncertainty, resulting in less deal activity at the upper end of the market.

We do expect this to be temporary and for the market to recover and we remain very bullish on this business line.

Tony Cheng: Finally, in the US traditional area, our fourth area of notable growth, we had another active quarter as we added a number of new treaties, most of them related to our underwriting As demonstrated with the Equitable Transaction, we not only do large block transactions, but we also provide product development and underwriting outsourcing services to support new business . When you couple this with our partners that provide distribution, technology, and other services... It is clear that together we bring holistic solutions generating exclusive business for RGA. I trust you can see our business playbook of creating and perpetuating the Creation Reap flywheel.

Tony: Finally in the U S traditional area our fourth area of notable growth we had another active quarter as we added a number of new treaties most of them related to our underwriting initiatives.

Tony: As demonstrated with the equitable transaction, we not only do large block transactions, but we also provide product development and underwriting outsourcing services to support new business.

Tony: When you couple this with our partners that provide distribution technology and other services.

Tony: It is clear that together, we bring a holistic solution generating exclusive business right Jay.

Tony: I Trust you can see our business playbook of creating and perpetuating the creation rate flywheel is very consistent across the world.

Tony Cheng: very consistent across the world. Strong local teams that learn from each other and are empowered to partner and deliver unique solutions for our clients such that we can grow together and become market leaders. Through our global network and often with the same global client, we then spread and adapt these new solutions to different markets, creating more new solutions, and the virtuous cycle continues. This business generates greater value for our clients and higher returns for RGA. We have executed this strategy ahead of schedule over the past two years, resulting in greater than 50% of our new business coming from Creation Re over this period of time.

Tony: Strong local teams can learn from each other and are empowered to partner and deliver unique solutions for our clients such that we can grow together and become market leaders.

Tony: Through our global network and often with the same global client, we then spread and adopt these new solutions to different market, creating more new solutions and the virtuous cycle continues.

Tony: This business generates greater value for our clients and higher returns for Iga.

Tony: We have executed this strategy ahead of schedule over the past two years, resulting in greater than 50% of our new business coming from creation rate over this period of time.

Tony Cheng: Continuing this success will provide a tailwind to our current ROE levels once the earnings power from this new business Fully materialized.

Tony: Continuing this success will provide a tailwind to our current ROE levels once the earning earnings power from this new business fully materializes.

Tony Cheng: With regards to In-Force Management Action As we have discussed previously, in addition to attractive new business, we are able to enhance ROE and earnings through our balance sheet optimization strategy and other management actions and levers. This is very much part of our business, but is lumpy in nature. The impact of in-force actions was modest in Q1, but we continue to move forward on a number of initiatives that we expect to help drive higher returns over time. Looking forward, we continue to be very optimistic about our business due to our strong focus on being disciplined. We have strong strategic discipline of sticking to what we know and what we are great at.

Tony: With regards to enforce management action as we have discussed previously in addition to attractive new business, we are able to enhance our away and earnings through our balance sheet optimization strategy and other management actions and levers.

Tony: This is very much part of our business, but it is lumpy in nature.

Tony: The impact the impact of infill sections was modest in Q1, but we continue to move forward on a number of initiatives that we expect to help drive higher returns over time.

Tony: Looking forward, we continue to be very optimistic about our business due to our strong focus on being disciplined.

Tony: We have strong strategic discipline of sticking to what we know and what we are great at <unk>.

Tony Cheng: Just as important is our risk-taking and being patient for the right risk-return trade-off to emerge. And the third important area of discipline is in capital management and finding efficient new sources of capital.

Tony: Just as important is our risk taking and being patient for the risk for the right risk return trade off so much.

Tony: And the third important area of disciplined capital management, and finding efficient new sources of capital.

Tony Cheng: As we know, building a sustainably successful business takes a total company effort, and by applying this disciplined approach with our culture of collaboration and innovation, we are very optimistic that we will continue to deliver on both growth and attractive ROEs. This is even more important during the current period of heightened uncertainties in the macro environment. Our disciplined, proactive business approach and acceleration of the creation reflywheel means RJ continues to be nimble and we are well positioned to take advantage of the new opportunities that often arise during uncertain times. Thus, it is without doubt that I remain fully confident that the best is yet to come.

Tony: As we know building a sustainably successful business takes a total company effort and by applying this disciplined approach with our culture of collaboration and innovation. We are very optimistic that we will continue to deliver on both growth and attractive rois.

Tony: This is even more important during the current period of heightened uncertainty in the macro environment.

Tony: Al disciplined proactive business approach and acceleration of the creation rate flywheel means RJ continues to be nimble and we are well positioned to take advantage of the new opportunities that often arise during uncertain times.

Tony: Thus it is without doubt that I remain fully confident that the best is yet to come.

Axel Andr: I will now turn it over to our CFO, Axel Andr, to discuss the financial results in more detail. Thank you, Tony. RGA reported pre-tax adjusted operating income of $485 million for the quarter of $5.66 per share after tax. For the trading 12 months, adjusted operating return on equity, excluding notable items, was 15%. We delivered strong overall results for the quarter. We deployed $418 million into in-force transactions. have excess capital of $1.9 billion before the equitable transaction and our deployable capital is an estimated $1.3 billion at the end of the quarter. The economic impact in our biometric claims experience was favorable by $196 million and positive across all regions, and the financial impact was favorable by $58 million.

Tony: I will now turn it over to our CFO ask Andre to discuss the financial results in more detail.

Andre: Thank you Tony.

Speaker Change: Oh Gee eight reported pretax adjusted operating income of $485 million for the quarter of $5 66 per share after tax.

Andre: For the trailing 12 months adjusted operating return on equity excluding notable items was 15%.

Andre: We delivered strong overall results for the quarter.

Andre: We deployed $418 million into in force transactions.

Andre: Excess capital of $1 $9 billion before the equitable transaction and our deployable capital is an estimated $1 3 billion at the end of the quarter.

Andre: The economic impact biometric claims experience was favorable by $196 million and positive across all regions and the financial impact was favorable by $58 million.

Axel Andr: Our non-spread portfolio yield excluding variable investment income was 4.9% in Q1, up 10 basis points from the fourth quarter. Variable Investment Income was below our expectation by approximately $30 million, primarily due to lower mark-to-market adjustments on our limited partnerships and timing of real estate joint ventures. The effective tax rate for the quarter was 21.9% on adjusted operating income before taxes, below the expected range of 23 to 24%, primarily due to U.S. tax benefits. from taxes paid in foreign jurisdictions. We are still expecting a tax rate of 23 to 24% for the remainder of the year.

Andre: Our non spread portfolio yield excluding variable investment income was four 9% in Q1 up 10 basis points from the fourth quarter.

Andre: Investment income was below our expectation by approximately $30 million, primarily due to lower mark to market adjustments on our limited partnerships and timing of real estate joint venture sales.

Andre: The effective tax rate for the quarter was 21, 9% on adjusted operating income before taxes below the expected range of 23% to 24% primarily due to U S tax benefits received from taxes paid in foreign jurisdictions.

Andre: We are still expecting a tax rate of 23% to 24% for the remainder of the year.

Axel Andr: New business was strong and contributed around $1.1 billion to the value of in-force business margins. Consolidated net premiums were up 13% year-over-year when adjusted for the impact from US PRT transactions, which can cause premiums to fluctuate. Our traditional business premium growth was 11.2% for the quarter on a constant currency basis. which benefited from strong growth in the U.S. and Asia. Premiums are a good indicator of the ongoing strength of our traditional business and we continue to have strong momentum across our region.

Andre: New business was strong and contributed around $1 $1 billion to the value of in force business margins.

Andre: Consolidated net premiums were up 13% year over year when adjusted for the impact from U S PRT transactions, which can coast premiums to fluctuate.

Andre: Our traditional business premium growth was 11, 2% for the quarter on a constant currency basis, which benefited from strong growth in the U S and Asia.

Andre: Premiums are a good indicator of the ongoing strength of our traditional business and we continue to have strong momentum across all regions.

Axel Andr: Turning to biometric claims experience, as outlined on slide 8 of our earnings presentation. This displays the total company claims experience and the related financial statement impact on a quarterly basis. As mentioned earlier, claims experience was favorable in the quarterly results. Economic claims experience was favorable by $196 million, with a corresponding $58 million favorable current period financial impact. The remaining favorable experience will be recognized in income over the life of the underlying business. Claims experience was particularly strong in the U.S., primarily due to lower-than-expected large claims. It is also noteworthy that there was favorable economic experience in every geographic region.

Andre: Turning to biometric claims experience.

Andre: On slide eight of our earnings presentation.

Andre: This displays the total company claims experience and the related financial statement impact on a quarterly basis.

Andre: As mentioned earlier claims experience was favorable in the quarterly results.

Andre: Economic claims experience was favorable by $196 million with a corresponding $58 million favorable current period financial impact.

Andre: The remaining favorable experience will be recognized in income over the life of the underlying business.

Andre: Claims experience was particularly strong in the U S primarily due to lower than expected large claims.

Andre: It is also noteworthy that there was favorable economic experience in every geographic region.

Axel Andr: I'll point out that some volatility on a quarterly basis, both positive and negative, is normal and does not necessarily indicate a mature trend.

Andre: Point out that some volatility on a quarterly basis, both positive and negative is normal and does not necessarily indicate immaterial trend.

Axel Andr: Turning now to capital, our excess capital is estimated to be approximately $1.9 billion at the end of Q1 2025. Based on rolling forward our year-end excess capital of $1.3 billion as previously disclosed, and considering capital generation, capital deployed, and debt financing activities during the quarter. As a reminder, this is before taking into account the announced transaction with Equitable, which is expected to close mid-year 2025. Note that the excess capital considers our three main capital lenses corresponding to RGA's internal economic capital model, local regulatory capital across our main legal entities, and rating agency capital methodology. Our deployable capital at Q1 2025 is estimated to be $1.3 billion and represents management's estimate of the capital available to be deployed into transactions or return to shareholders over the next 12 months.

Andre: Turning now to capital our excess capital is estimated to be approximately $1 $9 billion at the end of Q1 2025.

Andre: Based on the rolling forward, our year end excess capital of $1 $3 billion as previously disclosed and considering capital generation capital deployed and debt financing activities during the quarter.

Andre: As a reminder, this is before taking into account the announced transaction with equitable which is expected to close mid year of 2025.

Andre: Note that the excess capital considers all three main capital lenses corresponding to Rga's internal economic capital model local regulatory capital across all main legal entities and rating agency capital methodology.

Andre: Our deployable capital.

Andre: Q1, 2025 is estimated to be $1 3 billion and represents management's estimates of the capital available to be deployed into transactions or returned to shareholders over the next 12 months.

Axel Andr: Taking into account estimated capital sources and committed uses over that forward-looking 12-month period, including the impact of the equitable transaction. We are always looking to efficiently manage risks and capital across our different frameworks. This includes utilizing tools such as third-party capital, strategic retrocession, internal retrocession, and recognition of the significance of our enforced business. As demonstrated during the first quarter, this enabled us to efficiently fund the capital expected to be deployed into the equitable transaction with a mix of excess capital and hybrid debt financing. Our strong balance sheet, capital management toolkit, and current levels of excess and deployable capital positions as well to continue to support an attractive new business pipeline across the various business sectors.

Andre: Taking into account estimated capital sources and committed uses over that's forward looking 12 months period, including the impact of the equitable transaction.

Andre: We are always looking to efficiently manage risks and capital across our different frameworks. This includes utilizing tools such as third party capital.

Andre: Strategic retrocession.

Andre: Internal retrocession and recognition of the significance of our enforced business.

Andre: As demonstrated during the first quarter. This enabled us to efficiently fund the capital expected to be deployed into the equitable transaction with a mix of excess capital and hybrid debt financing.

Andre: Our strong balance sheet capital management toolkit, and current levels of excess and deployable capital positions us well to continue to support an attractive new business pipeline across the various business segments.

Axel Andr: Turning to the quarterly segment results on slide 6. The U.S. and Latin America traditional results reflected favorable individual life claims experience driven by a lower than expected number of large claims. Other experience in the segment was in line with expectations.

Andre: Turning to the quarterly segment results on slide six.

Andre: The U S and Latin America traditional results reflected favorable individual life claims experience driven by lower than expected number of large claims.

Andre: Other experience in the segment was in line with expectations.

Axel Andr: The U.S. financial solutions results were at the low end of the expected range due to lower variable investment income of roughly $7 million. As a reminder, the equitable transaction is expected to be recorded within this segment once closed. Assuming a mid-year close, we expect pre-tax operating income contributions of approximately $70 million in 2025 and $160 to $170 million in 2026, as previously estimated.

Andre: The U S financial solutions results were at the low end of the expected range due to lower variable investment income of roughly $7 million.

Andre: As a reminder, the equitable transaction is expected to be recorded within this segment once closed.

Andre: Assuming a midyear close we expect pre tax operating income contributions of approximately $17 million in 2025.

Andre: And it's $160 million to $117 million in 2026 as previously disclosed.

Axel Andr: Canada traditional results reflected modestly unfavorable lapse experience, partially offset by favorable claims. The financial solutions results reflected favorable longevity. In the Europe, Middle East, and Africa region, the traditional results reflected modestly favorable claims experience, as well as favorable timing impacts from the earnings recognition of an annual premium treatment. EMEA's financial solutions results were above expectations, reflecting favorable overall experience.

Andre: Canada traditional results reflected modestly unfavorable lapse experience, partially offset by favorable claims experience.

Andre: The financial solutions results reflected favorable longevity experience.

Andre: In the Europe, Middle East and Africa region.

Andre: The traditional results reflected modestly favorable claims experience as well as favorable timing impacts from the earnings recognition of an annual premium treaty.

Andre: Emea's financial solutions results were above expectations, reflecting favorable overall experience.

Axel Andr: Turning to our Asia-Pacific... The traditional results were good, reflecting favorable overall experience and contributions from new business. Underlying claims experience was again favorable in the quarter. Financial solutions results were slightly lower than expected, primarily due to lower variable investment income of around $6 million. We expect the segment results to increase over the course of the year, reflecting the earnings emergence from recent transactions and planned timing of new business.

Andre: Turning to our Asia Pacific region. The traditional results were good reflecting favorable overall experience and contributions from new business.

Andre: Underlying claims experience was again favorable in the quarter.

Andre: Financial solutions results were slightly lower than expected, primarily due to lower variable investment income of around $6 million.

Andre: We expect the segment segment results to increase over the course of the year, reflecting the earnings emergence from recent transactions and planned timing of new business.

Axel Andr: Finally, the corporate and other... reported an adjusted operating loss before tax of $70 million, unfavorable compared to the expected quarterly average run rate. This was primarily due to lower-than-expected variable investment income of around $15 million and a few other smaller one-time items. Overall, we are pleased with the results this quarter, and we remain confident in our ability to deliver on our intermediate-term financial targets.

Andre: Finally, the corporate and other segment reported an adjusted operating loss before tax of $17 million unfavorable compared to the expected quarterly average run rate.

Andre: This was primarily due to lower than expected variable investment income of around $15 million and a few other smaller one time items.

Andre: Overall, we are pleased with the results this quarter and we remain confident in our ability to deliver on our intermediate term financial targets.

Axel Andr: Moving to investments on slides 9 through 12. The non-spread book yield, excluding variable investment income, rose to 4.9%, primarily due to higher new money rates, which increased to 6.39%, and remains well above the portfolio yield. The total non-spread portfolio yield for the quarter was 4.64%, down slightly from last quarter, reflecting lower variable investment income and a higher balance of cash and cash equivalents, partially offset by higher new money rates.

Andre: Moving to investments on slides nine through 12.

Andre: The non spread book yield excluding variable investment income rose to four 9%, primarily due to higher new money rates, which increased to $6 three 9% and remains well above the portfolio yield.

Andre: The total non spread portfolio yield for the quarter was 46, 4% down slightly from last quarter, reflecting lower variable investment income and a higher balance of cash and cash equivalents, partially offset by higher new money rates.

Axel Andr: Variable investment income was modestly negative for the period and approximately $30 million below expectations, driven by lower valuations on limited partnerships and timing of real estate joint venture sales. I'll note that we still hold an above-average level of cash that we look to deploy opportunistically over the coming quarters. Importantly, portfolio quality remains high, and credit impairments were, again, minimal. And we believe the portfolio remains well positioned.

Andre: Variable investment income was modestly negative for the period and approximately $13 million below expectations, driven by lower valuations on limited partnerships and timing of real estate joint venture sales.

Andre: I'll note that we still hold an above average level of cash that we look to deploy opportunistically over the coming quarters importantly portfolio quality remains high and credit impairments were again minimal and we believe the portfolio remains well positioned.

Axel Andr: During the quarter, we continued our long track record of increasing book value per share. As shown on slide 16, our book value per share excluding AOCI and impacts from B36 embedded derivatives increased to $154.60. which represents a compounded annual growth rate of 9.8% since the beginning of 2021.

Andre: During the quarter, we continued our long track record of increasing book value per share as shown on slide 16, our book value per share excluding a OCI and in fact from beef 36 embedded derivatives increased to $154 60.

Andre: Which represents a compounded annual growth rate of nine 8% since the beginning of 2021.

Andre: Yeah.

Axel Andr: To summarize, a strong first quarter is a good start for the year, following a record 2024. We continue to see very good opportunities across our geographies and businesses. We are well positioned and remain appropriately capitalized to execute on our strategic plan.

Andre: To summarize a strong first quarter is a good start for the year following a record 2024.

Andre: We continue to see very good opportunities across our geographies and business lines, we are well positioned and remain appropriately capitalized to execute on our strategic plan.

Unknown Executive: With that, I would like to thank everyone for your continued interest in RGA.

Andre: With that I would like to thank everyone for your continued interest in RGA. This concludes our prepared remarks, we would now like to open it up for questions.

Unknown Executive: This concludes our prepared remarks. We would 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 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. A request to all the participants, please restrict yourself to one question and one follow-up. If you have any further questions, you may rejoin the queue.

Andre: We will now begin the question and answer session.

Andre: To ask a question you May press Star then one on your telephone keypad.

Andre: If youre using a speakerphone please pick up your handset before pressing the keys.

Andre: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Andre: I request to all the participants please restrict yourselves to one question and one follow up if you have any further questions you may rejoin the queue.

Unknown Executive: As at this time, we will pause momentarily to assemble a roster.

Andre: At this time, we will pause momentarily to assemble our roster.

Suneet Kamath: Our first question comes from Suneet Kamath from Jeffries, please go ahead. Great, thank you. I was hoping you could help us understand the mortality experience, particularly in the U.S. Obviously, you know, we've seen the flu season data. We know that there was a single large case in the first quarter. We're seeing it at other companies, yet you're showing very strong underwriting experience, and then there's a disconnect there that I'd like to try to understand, if you can comment.

Speaker Change: Our first question comes from Puneet <unk> from Jefferies. Please go ahead.

puneet: Great. Thank you I was hoping you could help us understand the the mortality experience, particularly in the U S.

Speaker Change: You know we've seen the flu season data.

Speaker Change: We know that there was a single large case that are in the first quarter.

Speaker Change: We're seeing it at other companies, yet you're showing very strong underwriting experience and then there's a disconnect there that I'd like to try to understand.

Speaker Change: If you can comment thanks.

Jonathan Porter: Sure. I can get started on that. So we saw a large positive experience in particular driven by lower than expected large claims in the U.S. I want to remind you that some volatility on claims experience is expected, both to the positive and the negative. Excluding the large claims experience, so for smaller claims experience, our overall U.S. mortality claims were slightly higher than expected, consistent with a flu season, an elevated flu season. In terms of, obviously, our process, you know, we are, of course, very confident in our claims process. In fact, this quarter, we perform extra due diligence to ensure that all claims are collected.

Sure I can get started on that.

Speaker Change: So we saw large supposedly his.

Speaker Change: Experience.

Speaker Change: In particular, driven by lower than expected large claims.

Speaker Change: In the U S.

Speaker Change: To remind you that some volatility on the claims experience is expected both to the positive and the negative.

Speaker Change: The large claims experiments so for smaller claims experience overall U S mortality claims were slightly higher than.

Speaker Change: Than expected consistent with a flu season, an elevated flu season.

Speaker Change: In terms of obviously our process.

Speaker Change: We are of course very confident you know claims process. In fact this quarter, we performed extra due diligence to ensure that all claims are collected.

Jonathan Porter: As you can imagine, for large claims, there's an extra incentive for students to notify us. And, of course, we hear from companies, from students, whenever they experience large claims, and ensure that we verify whether we see the similar data in our data.

Speaker Change: As you can imagine for large claims there's an extra incentive for students to notify us.

Speaker Change: And and of course, we ear from from companies from Cedent whenever they experienced large claims and ensure that we verify whether we see the similar data in our data.

Jonathan Porter: Yeah, and this is Jonathan, Suneet, maybe just to add specifically on that large case you referenced that's been mentioned on other calls, that experience is reflected in our Q1 report. Got it. Okay. All right.

Jonathan Porter: Yeah, and this is Jonathan maybe just to add specifically I'm at large KC referenced that's been mentioned on other calls that.

Jonathan Porter: That experience is reflected in our Q1 results.

Jonathan Porter: Got it Okay, Alright, and then I guess the other question I had been struggling with this since you announced the equitable deal.

Suneet Kamath: And then I guess the other question, I've been struggling with this since you announced the equitable deal, you know, for those of us that cover equitable, we look at that business. And it's, you know, I think the fair way to describe it would be challenged. Then all of a sudden, you take it over, and you're able to turn it into, you know, 13 to 15% ROE business per your comments about it being in line with your target. So I'm just trying to understand how does that happen? Is there an expense piece or a capital piece or something?

Speaker Change: For those of us that cover equitable, we look at that business and it's you know I think a fair way to describe it would be challenged.

Speaker Change: And then all of a sudden you take it over and you're able to turn it into a 13% to 15% ROE business per your comments about it being in line with your target. So I'm just trying to understand how does that happen is there an expense piece or a capital piece or something because the earnings should be the same I would think other than what you do on the investment portfolio. So how how do you take this challenge.

Tony Cheng: Because the earnings should be the same, I would think, other than what you do on the investment portfolio. So how do you take this challenge business and make it a good return business? Thanks.

Speaker Change: Business and make it a good return business. Thanks.

Axel Andr: Suneet, let me just kick it off strategically. I'm sure others have areas to involve. I mean, obviously, like I said, in my comments or previous comments, I mean, the big block, obviously, is a big part of the transaction. And, you know, we feel that's totally priced appropriately. And then there are other components that made this transaction so strategically valuable for both parties and then adds to the value we create.

Speaker Change: Now let me see let me just kick it off strategically I'm sure all of those areas.

Speaker Change: And it was doing well I mean, obviously like like I said in my comments or previous comments I mean, the big block, obviously is a big part of the transaction.

Speaker Change: And you know what.

Jonathan: We feel that's totally priced appropriately and then there are other components that made the transaction so strategically valuable for both parties and and then that adds to the value we create but let me hand, it over to to accent Jonathan to provide any further comments on your question.

Axel Andr: But let me hand it over to Axel and Jonathan to provide any further comments on your question. So I think a few things just to remind you, you know, when we announce a transaction, obviously this is a large block of business, mortality business, however we have, you know, we've been in business for over 50 years and so when we look at our total mortality exposure across the globe, the impact of the transaction is to increase that exposure by about 5%. as point number one. Point number two, like Tony said, we of course, when we execute a transaction, get to reprice the business.

Speaker Change: So I think a few things just to remind you when we announced the transaction we see this as a large block of business mortality business. However, we have you know we've been a we've been in business for over 50 years and so when we look at our total mortality exposure across the globe. The impact of the transaction is to increase that exposure by about 5%.

Jonathan: <unk>.

Jonathan: That's probably number one but number two it actually when he said we of course, when we execute the transaction get to reprice the business fundamentally we benefit from all of our experience sort of the treasurer of data that we havent available on that and also the specific experience for that block of business that is part of the due diligence that we perform.

Axel Andr: Fundamentally, we benefit from all of our experience, all of the treasure of data that we have available on that, and also the specific experience for that block of business that is part of the due diligence that we perform when we underwrite the block. We expect some volatility of claims on the business, but we believe that is very manageable given our balance sheet and our estimates. And I think just to add further, I think the synergies you do. highlight I mean, whether it's capital, or whether it's expense or whether it's the asset side, I think they all play parts.

Jonathan: When we underwrite the block.

Jonathan: We expect some volatility of claims on the business, but that is a we believe that is very manageable given our balance sheet and our expertise.

Jonathan: And I think just to add further I think the synergies you do.

Jonathan: Highlight I mean, whether it's capital or whether it's expense or whether it's.

Jonathan: Asset side I think they all play Pops of it it's very hard for us to opine given you know, we obviously don't know exactly what equity we used to do with this business, but you know for us United Once again, it fits very well within our wheelhouse. It's it's all risk and operations that we have established already a to manage going forward.

Axel Andr: And it's very hard for us to pine given, you know, we obviously don't know exactly what what Ecuador used to do with this business, but, you know, for us, you know, once again, it fits very well within our wheelhouse. It's all risks and operations that we have established already to manage going forward. You know, very comfortable with the pricing as we look through it all. Thank you.

Jonathan: I'm very comfortable with the pricing as we look through it all.

Jonathan: Thank you.

Elyse Greenspan: Our next question comes from Elyse Greenspan from Wells Fargo, please go ahead. Hi, thanks. Good morning.

Speaker Change: Our next question comes from and he screen span from Wells Fargo. Please go ahead.

Speaker Change: Hi, Thanks and.

Tony Cheng: My first question, I was hoping that you guys could just talk about just the current pipeline of transactions and, you know, where you guys are, you know, seeing the most opportunity. Sure, happy to do that. Thank you for the question. Look, you know, I think in our comments, we've described it as attractive. you know, when I think it's the appropriate word, because we look at when we think of attractive, you know, the quantity is nice. But really, our word is trying to characterize more the quality of the pipeline. So obviously, since the recently announced transactions and RJ's brand and history, you know, we've been in the enviable position to work with many, many great companies.

Speaker Change: Good morning. My first question I was hoping that you guys could just talk about the current pipeline of transactions and you know where you guys are seeing the most opportunity.

Speaker Change: Sure happy to do that thank you for the question look.

Speaker Change: I think in our comments were described as attractive and.

Speaker Change: So I think that's the appropriate what because we look at when we think are attractive.

Speaker Change: The quantity is is is nice, but really al al what he's trying to characterize more the quality of the pipeline. So obviously since the recently announced transactions in our adjacent.

Speaker Change: Jason brand and history, United, but with with being in the enviable position to work with many many great company. So you know the way we describe the quality of the pipeline is really around you know who are the partners are the longtime partners are they ideally sizable but you know as long as they're really longtime partnership mentality out there.

Tony Cheng: So, you know, the way we describe the quality of the pipeline is really around, you know, who are the partners? You know, are they long term partners? Are they ideally sizable? But you know, as long as they're really long term partnership mentality.

Tony Cheng: To answer your question on the breadth, I mean, we run our business, you know, with a heavy focus in all the three major regions of EMEA, Asia and North America. And it's each of those pipelines are very robust and strong. So it's across the board breadth is is great.

Speaker Change: I'll answer your question on the breadth I mean, we run our business.

Speaker Change: With a heavy focus in all the three major regions of EMEA or Asia, and North America and it's it's each of those pipelines are very robust and strong so its across the board breath. It is great and then the third element.

Tony Cheng: And then the third element you know, as I've alluded to is, you know, does it fit within our strategy? And, you know, our strategy is very simple. I mean, we call it creation rate. Well, you know, but really, it's a focus on getting not only repeat business, but repeat exclusive business. Because if we're able to solve a client's opportunity or problem, or hopefully even an industry opportunity or problem, then others will come to us, you know, to solve that same issue. And then we can use our global network to just spread that around the world.

Speaker Change: You know as I've alluded to is does it fit within our strategy and.

Speaker Change: Our strategy is very simple I mean, we called out creation right.

Speaker Change: But really it's a focus on getting not only repeat business by repeat exclusive business, because if we're able to solve our clients opportunity you'll problem or hopefully even an industry opportunity. A problem then others will come to us to solve that same issue and then we can use our global network to just spread that around that.

Elyse Greenspan: Because, you know, life insurance markets around the world seem different. But to be honest, the underlying drivers are very, very similar, the underlying needs. So our global platform allows us to really solve these, you know, across the board. Thanks.

Speaker Change: Because you know life insurance markets around the world seem different but to be honest. The underlying drivers are very very similar underlying needs of our global platform allows us to really solve days across the board.

Tony Cheng: And then my follow up, you know, in your prepared remarks, you were talking about PRT and just, you know, there being an impact of, you know, some of the market uncertainty there. You know, how do you expect? Do you expect that? And I know you said it would be temporary. Do you see this as, you know, becoming an opportunity, a greater opportunity later this year? Or just how do you see things, you know, playing out on the PRT side, just given the volatility we're dealing with right now? Yeah, absolutely. You know, this is, as you've suggested, a longer term story that's already started.

Speaker Change: And then my follow up you know in your prepared remarks, you were talking about P. R. T until you know what the all in part of some of the Murphy uncertainty there.

Speaker Change: How do you expect do you expect that or I know you said it would be temporary do you see that as well.

Speaker Change: A greater opportunity later this year or just how do you see things no call out on the PR and Keith I'll, just given the volatility we're dealing with right now.

Speaker Change: Yeah absolutely.

Speaker Change: As a joke suggested are a longer term story, that's already started I'm sorry.

Tony Cheng: So absolutely, do we believe that this is a temporary pause, let's say, you know, that there's uncertainty in the macro environment in general, you know, a lot of these, the biggest schemes, would have been down this journey of de-risking for many years already, so it's not a question of stopping, it's a question of really pausing it perhaps. But we're very bullish on this. We're looking at some other strategies also to highlight our strengths in other segments of the market that really have not paused at all, that was part of our broader strategic direction anyway. So we're very bullish about this market in the medium term and the longer term, and we do expect it to pick up in the second half of the year.

Speaker Change: Absolutely the way believe that this is a temporary pause, let's say you know that there's uncertainty in the macro environment in general you know a lot of these are the biggest schemes.

Speaker Change: Would have been.

Speaker Change: Being part.

Speaker Change: Down this journey of Derisking for many years already so you know it's not a question of stopping its a question of really pulling it perhaps.

Speaker Change: But we're very bullish on this look we're looking at some other strategies.

It's also too high.

Speaker Change: A highlight of our strengths.

Speaker Change: And in other segments of the market that you know I really have not opposed at all and that was part of a broader strategic direction anyway. So we're very bullish about this market and in the medium term and the longer term and you know we do expect that to pick up in the second half of the year.

Speaker Change: Thank you.

Unknown Executive: Thank you.

Speaker Change: Thank you.

John Barnidge: Our next question comes from John Barnidge from Piper Sandlow. Please go ahead. Good morning. Thank you for the opportunity.

Speaker Change: Our next question comes from John Barnidge from Piper Sandler. Please go ahead.

Speaker Change: Good morning, Thank you for the opportunity with portfolio investing ahead for that elevated cash balance can you talk about how those new money rate maybe trended so far in the second quarter for you. Thank you.

Leslie Barbi: With portfolio investing ahead for that elevated cash balance, can you talk about how those new money rates maybe have trended so far in the second quarter for you? Thank you.

Leslie Barbi: Hey, John, this is Leslie Barbi. Thanks for the question. Yeah, so as you know, there's been a lot of movement up and down. But really, the the rates currently are similar to the first quarter. I guess only time will tell if that plays out. But, you know, yields came down, but spreads widened. So there's still a good opportunity set to put that cash to work.

Speaker Change: Hey, John This is Leslie Barbie thanks for the question.

Speaker Change: Yeah. So.

Speaker Change: As you know there's been a lot of moving up and down but.

Speaker Change: Really the the rates currently are similar to the first quarter I.

Speaker Change: I guess, the only time will tell if that plays out but you.

Speaker Change: Yields came down but spreads widen so there's still a good opportunity set.

Speaker Change: That cash to work.

Leslie Barbi: My follow-up question, sticking with the portfolio, you talked about increased private asset sourcing, has that also continued to be favorable as well? Thank you. Thanks. Yeah, so we have a very broad platform across many public and private asset types. And we've been building that private asset capability for over 20 years. And we had attractive opportunities in the first quarter. And I'll just note that those are also a good match for our stable liabilities. And given the portfolio growth overall, we've had some room to invest. I think your question also got to the fact that with market volatility, issuance had paused in public markets and maybe slower in privates.

Speaker Change: My follow up question sticking with the portfolio you talked about increased private asset sourcing has that also continued to be favorable as well. Thank you.

Speaker Change: Thanks.

Speaker Change: Yeah. So we have we have a very broad platform across many public and private asset types that we've been building that private asset capability for over 20 years, and we had attractive opportunities in the first quarter.

Speaker Change: And I'll just note that does they're also a good match for our stable liability needs and given the portfolio growth overall, we had some room to invest.

Speaker Change: I think your question also got to the fact that with market volatility.

Speaker Change: And Ted paused in public markets, and maybe slower in privates, it certainly coming back in public and we still had a good pipeline in place for private so I still think there'll be a good set of opportunities. Although you know if volatility continues it may be somewhat slower.

Leslie Barbi: It's certainly coming back in publics, and we still had a good pipeline in place for privates. So I still think there'll be a good set of opportunities, although, you know, if volatility continues, it may be somewhat slower.

Unknown Executive: Thanks. I'm not hearing any questions.

Speaker Change: Thanks.

Speaker Change: Yeah.

Speaker Change: We're not hearing any questions.

Unknown Executive: Operator, we're ready for the next question. Apologize everybody, please hang tight, we are finding the operator. Thank you for your patience. We should be getting there shortly.

Speaker Change: Operator, we're ready for the next question.

Speaker Change: Yes.

Speaker Change: Okay.

Okay.

Speaker Change: Yeah.

Speaker Change: [laughter].

Speaker Change: I apologize everybody. Please hang tight we're finding the operator.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Thank you for your patience, we should be getting there shortly.

Jimmy Buller: The next question comes from the line of Jimmy Buller. Please go ahead. Hey, good morning. So first, I had a question for Tony just on, if you could just talk about competition across your various businesses. Many of your competitors are P&C companies, or have P&C reinsurance businesses as well. And it seems like the market's a little softer there. When it was hardening a lot, there were comments from RGA that that might actually improve things in life reinsurance as well, as some of those companies would be focusing more on the P&C side of their business. Are you seeing the reverse of that now?

Speaker Change: The next question comes from the line of Jimmy Buhler. Please go ahead.

Speaker Change: Yeah.

Speaker Change: Hey, good morning, So first I had a question for Tony just on if you can.

Speaker Change: Could just talk about competition across your various businesses.

Speaker Change: Many of your competitors are P&C companies, but Jim or have P&C reinsurance businesses as well and it seems like the market's a little softer there when it was hardening. The lock there were there were comments from RGA that that might actually improve things in life reinsurance as well as some of those companies would be focusing more.

Speaker Change: On the P&C side of their business are you seeing the reverse of that now and how our competition competitive conditions across various markets given that dynamic and also the fact that.

Tony Cheng: And how are competitive conditions across various markets given that dynamic and also the fact that in some of the product lines, you're seeing a lot more activity by some of the PE-backed companies? Sure. Thanks, Jimmy, for the question. You know, I guess I'll kick it off with the obvious, which is, you know, our focus and strategy is this creation race, so we honestly look at our competition, you know, observe what they do and, you know, any great things they're doing that are successful, we obviously, you know, consider. But, you know, our focus is really not to compete, but I've sort of shared with you that view in the past.

Speaker Change: And some of the product lines Youre seeing a lot more.

Speaker Change: Activity by some of the <unk> companies.

Jimmy: Sure. Thanks, Jimmy for the question.

Speaker Change: I guess I'll kick it off with the obvious switches.

Jimmy: I'll focus on strategy as this creation racer honestly.

Speaker Change: Look at our competition observe what they do and any any.

Speaker Change: Great things they are doing that is successful we obviously consider.

Speaker Change: But our focus is really not to compete but sort of shared with you that view in the past.

Tony Cheng: To answer your question more directly, you know, I think around the fringes, you could say, you know, it's always hard and I think the different property and casualty companies may act differently depending on a softening and hardening market. So, I don't think it's particularly conclusive as to how the PNC market hardness or softness impacts. their attitudes necessarily to life and health. What I would say is that what it does show is we are consistently in the market, right? We're not in and out or even having any view towards it or any consideration because that's all we do is life and health.

Speaker Change: So asking your question more directly I think around the fringes you could say is.

Speaker Change: It's always hard and I think the different property and casualty companies May act differently, depending on the softening and hardening market.

Speaker Change: I don't think its particularly conclusive.

Speaker Change: How the P&C market hardness softness impacts.

Speaker Change: Their attitude is not necessarily to life and health, what I would say is that.

Speaker Change: What it does show is we are consistently in the market right, we're not in and out.

Speaker Change: Even having any view towards that or any consideration because that's all we do is life and health.

Tony Cheng: And that means we can just consistently build our platform, right? such that right at this point, the competition intensity, whether it's with the traditional business which is more the PNC company. So, you know, before we don't feel it's particularly overwhelming level of competition. Okay, just wanted to let you know, I think there's some issue with the call because your comments were paused for a few minutes. I don't know. Can you hear me? Okay. Can you hear me? Okay. we can hear you. Yeah, so there might be some issue we could you could address that later as well.

Speaker Change: And that means we can just consistently build out platform alright and such.

Speaker Change: Such that right at this point the competition intensity, whether it's with the traditional business, which is more of the PNC com.

Speaker Change: But felt before we don't feel it's particularly.

Speaker Change: Our level of competition.

Speaker Change: Okay.

Wanted to let you know I think there is some issue with the call because.

Your comments were paused for a few minutes I don't know can you hear me. Okay can you hear me Okay alright.

Speaker Change: We can hear you, yes, so there might be some issue we could you could address that later as well.

Unknown Executive: The I don't know, but maybe go on with your answer if you're Now? Uh, just the word now. Okay, can I try it now? Sure, go ahead. All right, okay. So, I mean, Jimmy, to answer your question, like I said, look, our focus really is not to compete. That's the creationary focus. The fact that we can continuously stay in the life and health market, given that's all we do in reinsurance, you know, we don't believe the level or intensity of competition has increased materially or noticeably with regards to the blocks or the traditional business that we see from the more PNC-orientated reinsurers.

Speaker Change: I don't know, but maybe go on with your answer if youre going to.

Speaker Change: Now.

Speaker Change: Just the word now.

Speaker Change: Sure.

Speaker Change: Okay can I try it now.

Speaker Change: Go ahead.

Speaker Change: Alright, thanks, guys.

Speaker Change: Jamie to answer your question like I said look our focus really is not to compete that's the creation refocused.

Speaker Change: Fact that we can continually sleep stay in the life and health market given that's all we do in reinsurance.

Speaker Change: We don't believe the level of intensity of competition has increased materially on noticeably with regards to the blocks all the traditional business that we see.

Speaker Change: From the mall pay NCR entitled re insurers.

Tony Cheng: You know, the hardness or the softness of the market, you know, if it impacts their attitude towards life and health, it really is around the fringes. We continue to just strengthen our platform. We believe that we're in a very, very strong position. That's why we're so, you know, optimistic about our future.

Speaker Change: The hard thats the softness of the market.

Speaker Change: If it impacts their attitude towards life and health. It really is around the fringes. We continue to strengthen our platform. We believe we're in a very very strong position.

Speaker Change: That's why we're so optimistic about our future.

Unknown Executive: Okay.

Speaker Change: Okay.

Unknown Executive: And then just another one on the equitable transaction along the lines of the question previously. They're basically losing around $100 million of income per year, and you've said that you could pick up close to $200 million eventually from that block. And I think a big chunk of that is just you guys repositioning the portfolio. So since Leslie's on the call, what is it actually that you're doing with the portfolio that's different than how they've invested it? Because I think there's a lot of confusion in the market about how one company is losing a lot less business than the other one's picking up from the same block.

Speaker Change: And then just another one on the.

Speaker Change: The equitable transaction along the lines of the question previously.

Speaker Change: They're basically losing around $100 million of income per year, and you've said that you could pick up close to 200 million eventually from that block.

Speaker Change: And I think a big chunk of that is just do you guys repositioning the portfolio. So since Leslie on the call what does it actually that youre doing with the portfolio that is different than how they've invested it.

Speaker Change: I think theres a lot of confusion in the market about how one company is losing a lot less business than the other ones picking up from the same blocks.

Speaker Change: Well I know others will want to jump in it's not all asset portfolio and we're sticking to our discipline and there will be a reasonable amount of risk.

Speaker Change: There'll also be some of the assets still.

Speaker Change: Managed by Alliance Bernstein, but at the crux of it where we will be adding value. We do have quite a broad platform, including a broad private asset platform. So that is where some of the values coming in but it's not the entire value for the transaction.

Axel Andr: And Leslie, I would just add, I mean, of course, the expense footprint is, of course, going to be very different from for Equitable versus us. That, of course, could explain some of that difference. And then the very last piece would be the accounting, the underlying accounting for that block of business as a reinsurer. You know, it also looks different to the way that it's more of an emergence point, an earnings emergence point, rather than the, of course, underlying economics. But all of these factors probably play in.

Speaker Change: And literally I would just add I mean of course the <unk>.

Speaker Change: Expense footprint is of course going to be very different from <unk> for accretable versus us fixed of course could explain.

Speaker Change: Some of that difference and in the very last piece would be.

Speaker Change: The accounting the underlying accounting for that brokerage business as a reinsurer.

Speaker Change: Also.

Speaker Change: Looks different to the way that it's more of an emergence points earnings emergence points, rather than the of course underlying economic splits.

Speaker Change: Although these factors probably plane.

Unknown Executive: Thank you.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: Thank you.

Wes Carmichael: The next question comes from the line of Wes Carmichael from Autonomous Research. Please go ahead. Hey, good morning. I wanted to follow up on the point on equitable and in the accounting. And I think there's probably good reason to think that that might exhibit less volatility. Is that because when you reprice the business and it changes hands, the I think the way I understand it is with LBTI accounting, the net premium ratio may be Reset, and then you have less of the capped cohort volatility coming through. Is that basically the dynamic? Do I have that right?

Speaker Change: Your next question comes from the line of Wes Carmichael from Autonomous Research. Please go ahead.

Wes Carmichael: Hey, good morning, I wanted to follow up on the point on equitable in the accounting.

Wes Carmichael: I think there is probably a good reason to think that that might be a bit less volatility as that because when you re priced the business changes hands.

Wes Carmichael: I think the way I understand it is with <unk> accounting net premium ratio maybe.

Wes Carmichael: Reset and then you have less of the captive cohort volatility coming through is that basically the dynamic don't have that right.

Axel Andr: Thank you, Wes, for the question. So just to clarify, there's some part of the business may be subject to LDTI, but a big part of it will not be subject to LDTI. So that's not that's not certainly the driver. I think there could be some, some smoothing of claims experience through reinsurance accounting. It's not directly related to LDTI, but it's kind of some something like that, essentially something along Okay, thanks.

Speaker Change: Thank you for the question.

Wes Carmichael: Just to clarify this.

Wes Carmichael: Some parts of the business.

Wes Carmichael: May be subject to end DTI, but it's a big part of it will not be subject to DTI.

Wes Carmichael: So.

Wes Carmichael: So that's not that's not 30 to driver.

Wes Carmichael: I think there could be some some smoothing of claims experience through reinsurance accounting, it's not directly related to ALLETE, yet, but it is kind of some something like that to essentially something along those lines.

Wes Carmichael: Okay. Thanks.

Wes Carmichael: And I guess we saw a pretty material long term care reinsurance transaction since the last call. And I believe our European reinsurer took the morbidity risk with an alt-backed reinsurer taking the assets.

Wes Carmichael: We saw a pretty material long term care reinsurance transactions since the last call and I believe our European Reinsurer took the morbidity risk with an oil cut back reinsurer, taking the asset.

Tony Cheng: Does RGA have appetite for structures like that? Because LTC is obviously a gigantic liability set for the industry and the potential Thanks, Wes, for the question. Let me take that. You know, look, our attitude to long-term care is very clear. Number one, obviously, given our market position, we do see, I would believe, every opportunity that arises in the market. So that's point number one. But point number two, as I emphasized, you know, real critical, one of the, if not the most important reasons for our success is our discipline. So I think I've shared, you know, sort of five criteria, at least, that we look at with regards to long-term care blocks.

Wes Carmichael: RGA have appetite for structures like that because ltc's, obviously gigantic liability set for the industry and that potential opportunity.

Wes Carmichael: Thanks for the question, let me take that.

Wes Carmichael: No.

Wes Carmichael: Our attitude.

Speaker Change: Frankly, I was very clear number one obviously given our market position.

Wes Carmichael: We do see I would believe every opportunity that arises.

Wes Carmichael: And in the market. So that's point number one but point number two as I emphasized.

Wes Carmichael: The real critical one of the if not the most important reasons for success is our discipline.

Wes Carmichael: I think I've shared sort of.

By criteria that.

Wes Carmichael: We look at with regards to long term care blocks.

Tony Cheng: You know, the first one would be, you know, is it a strategically important, you know, or valued or long-term partner? So that's point number one. Point number two would be, you know, the risk-return trade-off within the block. But also, you know, being, you know, being paid appropriately for any risk that we take, obviously. Point number three, does any other blocks of business, non-long-term care, come along with the transaction?

Wes Carmichael: The first one would be is that a strategically important.

Wes Carmichael: Valued a longtime partner so that's point number one.

Wes Carmichael: Point number two would be the <unk>.

Wes Carmichael: Return tradeoff within the block, but also.

Wes Carmichael: Yes.

Wes Carmichael: That being.

Wes Carmichael: Being paid appropriately for any any risks that we take obviously upon on birth rates does any other block.

Wes Carmichael: Blocks of business non long term kind of come along with the transaction.

Tony Cheng: Point number four is really critical. Look, we have done long-term care for a number of years. We've got a very modest-sized block. But it's within, you know, it's the newer type of business because, you know, that's the business that we have the risk tolerance for. We stayed out of the market for many years until the products moved that way. And that's the only time that we started entering the market many years ago. So the fourth element of it all is the risk tolerance. And then the final is the size. You know, yes, we like diversification, but the size of the long-term care block, you know, I characterize it as, you know, new blocks that if and when we do potentially take it with those other criteria, you know, it would be modest in size.

Wes Carmichael: Number four is really critical is look we have gone long term hurtful.

Wes Carmichael: <unk> is we've got a very modest sized block, but it's within.

Wes Carmichael: It's the newest type of business because that's.

Wes Carmichael: That's the business that we have the risk tolerance for we stayed out of the market for many years into the products.

Wes Carmichael: Move that way and Thats, the only time that we started entering the market.

Wes Carmichael: Many years ago. So the fourth element of it always the risk tolerance and then the final size.

Wes Carmichael: Yes, we like diversification.

Wes Carmichael: The size of the long term care block.

Wes Carmichael: I'd characterize it as new blocks that if and when we do potentially taken with those other criteria would be modest in size.

Tony Cheng: So hopefully that gives you a bit of clarity. You know, the across the wires recently, we obviously did not have a share of that block of business. Thanks, Eric.

Wes Carmichael: Hopefully that gives you a bit of clarity.

Speaker Change: Yes, the one that crossed the wires recently, we obviously did not have a share of that block of business.

Thanks Marni.

Unknown Executive: Thank you.

Marni: Thank you.

Ryan Krueger: The next question comes from Ryan Krueger from KBW, please go ahead. Hey, thanks. Good morning. In the deployable capital disclosures, it looks like the capital sources increased at least a few hundred million from what you had laid out in the equitable transaction slides. Can you give some more color on what drove that higher? Yeah, hi, Ryan, thanks for the question. So just, I mean, just first to take a step back, you know, we did, we we updated both metrics this quarter, excess capital and deployable capital. I want to give some clarity why we're doing that.

Speaker Change: The next question comes from Ryan Krueger from <unk>. Please go ahead.

Ryan Krueger: Hey, Thanks, good morning.

Ryan Krueger: And the deployable capital disclosures it looks like the capital sources increased at least a few hundred million from what you had laid out and the equitable transaction slides can you give some more color on what drove that higher.

Speaker Change: Yeah, Hi, Ryan Thanks for the question.

Ryan Krueger: So just I mean, just first to take a step back.

Ryan Krueger: We updated both metrics this quarter excess capital and deployable capital I wanted to give some clarity why are we doing that.

Axel Andr: We think really of these two metrics as kind of serving two different purposes. Excess capital is kind of the defensive metric, points in time, strength of the balance sheet, resilience under stress, you know, etc. Deployable capital then looks forward, of course, starting from excess capital and taking into account, how much are we, how much capital are we organically generating over the next 12 months, sources of third party capital, and what committed uses do we have against that, that gives us the idea of, okay, how much can we deploy over the next 12 months into a pipeline of opportunities.

Ryan Krueger: Think radio used to matrix is kind of serving two different purposes excess capital, it's kind of a defensive metric pointing time strength of the balance sheets resilient some distress.

Ryan Krueger: Et cetera.

Ryan Krueger: Deployable capital and looks forward of course, starting from excess capital and taking into account how much are we how much capital are we organically generating over the next 12 months sources of third party capital and then what's committed uses do we have against that that gives us the D of okay. How much can we deploy over the next 12 months into a pipeline of opportunities.

Ryan Krueger: Yes.

Axel Andr: So on slide 15, we have reconciliation, you correct to pick up that the capital sources and uses is a little bit bigger than what we had in the equitable disclosure. That's really a reflection of two things as you roll forward. We're now picking up, over the next 12 months, we're picking up Q1-26 and we dropped off Q1-25. So given our momentum, business momentum, and our earnings growth, we're picking up that incremental earnings. And then the rest is really kind of model updates, if you will, refinement of our projections, which will be part of our update.

Ryan Krueger: So on slide 15, we have <unk>.

Ryan Krueger: A reconciliation you're correct to pick up that the capital sources and uses.

Ryan Krueger: Little bit bigger than what we had in the Accretable disclosure, that's really a reflection of so do you think as you roll forward.

Ryan Krueger: We're now picking up over the next 12 months, we're picking up Q1 dollars 26, and we dropped off to $1 25, so given our momentum business momentum and our earnings growth were picking up that incremental earnings.

Ryan Krueger: The rest is really kind of model updates if you will refine with all of our projections, which will be part of our updates on this.

Axel Andr: Thanks, and then I think the value of in-force is one thing you've been working to get included with rating age For for capital sources in the future. Is there a material amount that is currently included for that? Or? And how has the progress been with talking to with this this with the rate of need? Yes, so thanks for that. Yes, so the value of enforcement is an important concept, right? Because as you know, depending on the framework, it is recognized or it's not recognized. And we have a substantial value of enforce as measured, for example, by our value of enforced business margins.

Ryan Krueger: Thanks, and then.

Ryan Krueger: I think.

Ryan Krueger: With the value of in force is one thing <unk> been working to get included with rating agencies.

Ryan Krueger: For capital sources in the future is there a material amount that is currently included for that or.

Ryan Krueger: And how has the progress been with top two.

Ryan Krueger: This with the rating agencies.

Ryan Krueger: Yes, so thanks for that yeah. So the value of in force is an important concept right because as you know depends.

Ryan Krueger: Depending on the framework it is recognize though it is not recognized.

Ryan Krueger: And we have a substantial value of in force as measured for example by by our value of in force business margins.

Axel Andr: We have a track record of actually execution of securitization of value of enforced blocks. So we can really demonstrate that there's actual analysis that backs it, but ultimately we can get a third party to lend us money against it, for example, or take a piece of it. So that's very important, because that's really a validator of what we see. And from a rating agency perspective, that enables rating agencies to use that. So we actually have that already on the portion of our business. And then what we're doing is really just maintaining our dialogue with rating agencies to continue to increase that portion that is recognized within the frameworks.

Ryan Krueger: We have a track record of actually execution of securitization of value of in force blocks, where we can really demonstrate that it's.

This is extra olin that assist that backs it but ultimately we can get a third party to lend us money against it for example, or take take a piece of it.

Ryan Krueger: So that's very important because thats really a valid data of of what we see.

Ryan Krueger: And from a reaching as he perspective that enables the rating agencies to choose that so.

Ryan Krueger: So we actually have that's already on the portion of our business and then what we're doing is really just maintaining our dialog with rating agencies to continue to increase to increase that portion that is recognized within the frameworks.

Unknown Executive: And so we're working on that. It's part of the actions that we're constantly pursuing in terms of. Transcription by Transcription Outsourcing, LLC.

Ryan Krueger: So we're working on that you know it's part of the actions that we're constantly pursuing in terms of.

Our position and so at the appropriate time, we will.

Ryan Krueger: We'll update you if there is a significant change there.

Unknown Executive: Great, thank you. Thank you.

Ryan Krueger: Great. Thank you.

Ryan Krueger: Thank you.

Tom Gallagher: Your next question comes from Tom Gallagher from Evercore. Please go ahead. Morning, just a couple of quick ones.

Speaker Change: Your next question comes from Tom Gallagher from Evercore. Please go ahead.

Speaker Change: Good morning, just a couple of quick ones.

Jonathan Porter: First on that, you said you booked part of that industry syndicated contract, the 200 million, you know, large claim, how much was your share of that? And then, secondly, can you unpack some of the underlying experience in US trad, between mortality, long term care, any other risks like medical stop loss, just a little bit behind the scenes, how things trended? Thanks.

Speaker Change: First on that you said you booked part of that industry.

Speaker Change: Syndicated contract the $200 million.

Speaker Change: Large claim how much was your share of that and then secondly can you unpack some of the underlying experience in U S. Trad between mortality long term care any other risks like medical stop loss, just a little bit.

Speaker Change: Behind the scenes how things trended thanks.

Speaker Change: Yes.

Jonathan Porter: Jonathan, you want to take that? Yeah, thanks, Axel. Tom, we're not we're not going to give out specifics on the claim. Again, I'll just reiterate that the full impact of that syndicated claim that you talked about was recognized in our Q1 statement. So it's hard to With respect to the experience within the traditional business, as Axel's already mentioned, really the key driver is the large claims favorability in the U.S. individual line. There were some other pluses and minuses across Latin America Group and U.S. individual health, but they were all relative. Okay, okay, thanks.

Speaker Change: Jonathan do you want to take that.

Speaker Change: Yeah. Thanks Axel.

Speaker Change: Tom we're not we're not going to give out specifics on the claim again I'll just reiterate that the full impact of that syndicated claim that you talked about was recognized in our Q1 statements. So it's already been recorded.

Speaker Change: With respect to the.

Speaker Change: The experience within the traditional business as <unk> already mentioned really the key driver is the large claims.

Speaker Change: Hey variability in the U S. Individual lines, there were some other pluses and minuses across.

Speaker Change: Latin America group and.

Speaker Change: Our individual health, but theyre all relatively small.

Speaker Change: Okay. Okay. Thanks, and then sorry, Tom on the longtime comment broadly, yes, we didnt say anything I mean that was just normal on track experience.

Jonathan Porter: And then, sorry, Tom, on the long term, I mean, broadly, yeah, we didn't see anything. I mean, that was just normal on track experience. Gotcha. Thanks, Tony.

Speaker Change: Got you thanks, Tony.

Tom Gallagher: One other one for you on the equitable transaction, you know, and Axel, you had mentioned, the majority of that book was is not captured under LDTI. And the majority of your business is. So I presume that means on a proportionate basis, that's going to increase your earnings volatility somewhat. And I know equitables had a pretty high level of earnings volatility in that block. How much of a consideration was that for you? Or did you kind of ignore the earnings volatility and just focus more on the economic returns?

Speaker Change: One other one for you on the equitable transaction.

Speaker Change: Actual you had mentioned.

Speaker Change: The majority of that book is not captured under LD Ti.

Speaker Change: And the majority of your business is so.

Speaker Change: I presume that means on a proportionate basis thats going to increase your earnings volatility somewhat and I know Equitable's had.

Speaker Change: Pretty high level of earnings volatility in that block how.

Speaker Change: How much of a consideration was that for you or did you kind of ignore the earnings volatility and just focus more on the economic returns.

Tony Cheng: Let me get started on that. So look, Tommy, of course, as I said, we repriced the transaction, right? So that's absolutely critical. Repricing means, of course, we assess the underlying economic risks, but of course, the earnings signature and the accounting impact, including, you know, not just base case, but stress analysis and evaluation of the potential volatility. Ultimately, like I said, the overall mortality risk was increased by about 5%, even if the accounting may be more volatile. For example, our balance sheet is very large and our sources of earnings perfectly can accommodate that level of volatility.

Speaker Change: So let me get started on that so look of course, we as I said, we repriced the transaction right. So that's absolutely critical repricing mean to of course, we assess the underlying economic risks, but of course, the earnings signature and the accounting impact, including not just base case, but stress analysis.

Speaker Change: Evaluation of the potential volatility.

Speaker Change: Ultimately like I said, the overall mortality risk where was increased by about 5%, even if the accounting maybe more volatile for example.

Speaker Change: Our balance sheet is very very.

Speaker Change: Large or sources of earnings.

Speaker Change: Perfect can accommodate that level of productivity.

Axel Andr: So not really a concern, something that we entered into with open eyes and, you know, not particularly worried about it.

Speaker Change: What are you concerned something thats, we entered into with with open eyes.

Speaker Change: No not particularly worried about it.

Axel Andr: I don't know if you've got further to add. Go ahead. Yeah, sorry, maybe just one more thing to add on to that. You know, when you think about, you know, the equitable block being added into our existing book of mortality business, we do get a diversification, a broader diversification benefit across the whole book, which will help from a relative volatility perspective.

Speaker Change: Hey, Chuck I don't know if you've got further.

Speaker Change: Go ahead, yeah, sorry, maybe just one more thing to add on to that.

Speaker Change: When you think about the equitable block being added into our existing book of mortality business would you get a diversification of broader diversification benefit across the whole book, which will help.

Speaker Change: From a relative volatility perspective.

Unknown Executive: Okay, thanks. Thank you.

Speaker Change: Okay. Thanks.

Speaker Change: Okay.

Speaker Change: Thank you.

Joel Hurwitz: The next question comes from the line of Joel Hurwitz from Dowling Partners. Please go ahead. Hey, good morning. So first one to touch on variable investment income. And can you just walk through what sort of embedded in your operating earnings targets? And did the earnings targets outline last quarter assume 6% returns or your long term 10 to 12? And then just I think some of your alternative income flows through operating and some flows through net. Can you just provide some color on what pieces flow to the operating versus net income?

Speaker Change: The next question comes from the line of Joel <unk> from Dowling <unk> partners. Please go ahead.

Speaker Change: Hey, good morning, So first wanted to touch on variable investment income and can you just walk through what sort of embedded in your operating earnings targets and ended the earnings targets outlined last quarter assumes 6% returns or your long term 10 to 12, and then just I think some of your alternative income flows through operator.

Speaker Change: And some flows through that can you just provide some color on what pieces flow to the operating versus net income.

Axel Andr: Sure. Thank you for the question, Joel. So to start with, in the targets that we put out recently that start from the 2025 run rate, the VII expectation that's built in there is a 6% return. So that is, of course, it reflected what we understood of the market environment, our expectation about realizations on LPs and of course the real estate joint venture sales. And that 6% relative to what our long-term return of 12%. Like we said, when we look forward from here for the next, you know, next 12 months, we're looking forward, a 6% return for that VII is our expectation, continues to be our expectation.

Speaker Change: Sure. Thank you for the question Joe.

Speaker Change: So to start with.

Speaker Change: In the the targets that we put out recently that start from the 2025 run rate.

Speaker Change: Our expectation that's built in there is a 6% return so that is of course.

Speaker Change: It reflected what we understood the market environment, our expectation about realizations on Lps and and of course, the real estate joint venture sales.

Speaker Change: That 6% relative to what our long term return of 10% to 12% would be.

Speaker Change: Like we said the when we look forward from here.

Speaker Change: The next next 12 months, we're looking forward a 6% return for that VII is is our is our expectation continues to be our expectation.

Axel Andr: And then lastly, in terms of the accounting, it's really to do with a portion of the limited partnerships are accounted such that the unrealized portion of it would be below the line, non-operating, but I want to make it clear that when there's a realization, all realizations flow through operating income. return will flow through operating Okay, very helpful.

Speaker Change: And then lastly in terms of the accounting, it's really to do with a portion of the limited partnerships.

Speaker Change: Our talented such that to the unrealized portion of it would be would be below the line nonoperating, but I wanted to make it clear that windows of realization all realizations flow through operating income. So ultimately all of the ultimate return.

Speaker Change: Will flow through operating income.

Speaker Change: Okay very helpful. And then Tony I know you said in your prepared remarks that enforce actions were modest in the quarter, but you sounded pretty positive on.

Tony Cheng: And then Tony, I know you said in your prepared remarks that Enforce Actions were modest in the quarter, but you sounded pretty positive on a number of initiatives. Could you just elaborate on some of these initiatives and how much of a potential benefit there could be? Yeah, no, I mean, it is just part of our business.

Speaker Change: <unk> initiatives can you just elaborate on some of these initiatives and how much of a potential benefit there could be.

Speaker Change: Yes.

Speaker Change: It is just part of our business so.

Unknown Executive: So, you know, and it's an area anything we © The Bulletproof Executive 2013 Okay, thank you. Thank you.

Speaker Change: And it's an area of anything we.

Speaker Change: Explore then we're interested and excited by <unk>.

Speaker Change: Yes.

Speaker Change: <unk> works on that and we've got teams dedicated on that.

Speaker Change: Purely to enforce our rights in the treaty and a win win fashion.

Speaker Change: Yes.

Speaker Change: I wanted to highlight as I've said previously it is lumpy in nature.

Speaker Change: But you know what.

Speaker Change: We continue to explore it in.

Speaker Change: What would be helpful.

Speaker Change: Some some false or by the end of the year.

Speaker Change: But it's business as usual for us on that.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Wilma Burdis: Your next question comes from the line of Wilma Burdis from Raymond James. Please go ahead. Hey, could you just give us an update on your outlook for mortality now? It seems like, you know, one thing I've been hearing is that it's a little bit better at younger ages, below 90 or so, and then at older ages, a little bit worse than pre-COVID. And then, are you seeing any changes with GLP-1s or others now that we have a little bit more experience? Thanks.

Speaker Change: Your next question comes from the line of William <unk> from Raymond James. Please go ahead.

Speaker Change: Could you just give us an update on your outlook for mortality now it seems like Youre lumping I've been hearing is that it's a little bit better.

Speaker Change: At younger ages below 90, or so and then an older age a little bit worse than pre COVID-19.

Speaker Change: And then are you seeing any.

Speaker Change: Pages with DLP ones or others, now we have a little bit more experience. Thanks.

Speaker Change: Okay.

Jonathan Porter: Hi, this is Jonathan. Yeah, certainly we're encouraged by what we're seeing in the general population. So if you look at 2024 experience, as reported by the CDC, excess mortality was down to about 1% in the US, relative to about 3.5% excess in 2023. That's across all ages. So that's a positive trend. That's good to see coming out of COVID. Specifically on GLP-1s, I think we continue to be very encouraged by the potential benefits given data that is emerging, and anticipation of improvements in both effectiveness and accessibility. So, you know, recently there was just a news article about an oral version of GLP-1 drugs that can further enhance that accessibility and take up rates as an example.

Hi, This is Jonathan.

Speaker Change: Yes, certainly we're encouraged by what we're seeing in the general population. So if you look at 2024 experience as reported by the CDC.

Speaker Change: Excess mortality was down to about 1% in the U S relative to about three 5% access in 2023, that's across all ages.

Speaker Change: That's a positive trend.

Speaker Change: Good to see coming out of Covid.

Speaker Change: Specifically on <unk> I think we continue to be very encouraged by the potential benefits given data that is emerging and anticipation of improvements in both effectiveness and accessibility. So recently there was just a news article about an oral version of <unk> drugs that can further enhance that accessibility and take up rates as an example.

Jonathan Porter: Um, you know, we continue to devote significant resources for ongoing analysis and looking at data and clinical literature and, you know, our expectation would be to incorporate any of those impacts into our assumptions when appropriate, but at this point, we have not explicitly reflected. Thank you.

Speaker Change: We continue to devote significant resources for ongoing analysis, and looking at data and clinical literature, and our expectation would be to incorporate any of those impacts into.

Speaker Change: Our assumptions when appropriate but at this point, we have not explicitly reflected those impacts.

Wilma Burdis: At the end of the talk, we'll discuss a little bit more detail on the ability to reply, reprice, and how that changes depending on how much you think about speaking. I'm really sorry to interrupt. Wilma, we are not getting audio correctly from your end. It was breaking. Your line was breaking. If you can repeat the question. Oh, yeah, sure.

Speaker Change: Okay.

Speaker Change: More telling me.

Speaker Change: Thank you.

Speaker Change: It.

Speaker Change: Really sorry to interrupt our whether or not we are not getting audio correctly from urine.

Speaker Change: Breaking your line was breaking if you can repeat the question.

Speaker Change: Oh, yes sure on the political Bob could you give us more detail on the ability to reprice and how that changes post acquisition. Thanks.

Wilma Burdis: On the equitable block, could you give us more detail on the ability to reprice and how that changes post acquisition? Thanks. Thank you Wilma for the question. These blocks of business was written by Equitable in the past, you know, we get to do a fresh look and use our pricing assumptions, you know, and as we price the transaction, obviously, when we do that, we look at their data, we also look at our data. And you know, there's many actuarial techniques to co-mingle the data and work out what we think is the right price, not only in the short term, but don't forget, these are longer term businesses that, you know, we have to make assumptions for the future.

Speaker Change: Thank you, we'll now for the question, yes, I mean, well.

Speaker Change: Definitely on the right REIT prices, while we're referring to there is predominantly the initial great price.

Speaker Change: Obviously.

Speaker Change: Yes.

Speaker Change: These blocks of business is written by equitable and the path.

Speaker Change: We get to do a fresh look in and use our pricing assumptions.

Speaker Change: As we priced the transaction obviously when we do that we look at that data. We also look at our data.

Speaker Change: And there's many actuarial techniques co mingled the data and what kind of what we think is the right price not only in the short term, but that forget these are longer term businesses that you.

Speaker Change: We have to make assumptions for the future, but thats really the bread and butter business that we've been doing for over 50 years now.

Tony Cheng: But that's really the bread and butter business that we've been doing for over 50 years now, and doing very well. Thank you.

Doing very well.

Speaker Change: Thank you.

Speaker Change: Thank you.

Mike Ward: The next question comes from Mike Ward from UBS, please go ahead. Thanks. Good morning.

Speaker Change: The next question comes from Mike Ward from UBS. Please go ahead.

Mike Ward: Thanks, Good morning.

Tony Cheng: I'm just wondering on the new business pipeline that you guys do see, is there any areas where you see more or less opportunity? And did the does the equitable deal sort of like ratchet you up on the US side? So we should expect more deals on the international side, or is that do not sort of set that framework? Thanks for the question, Mike. Yeah, no, sort of repeating a bit. I mean, it really is across the board, that the three, three regions are just each and every one of them strong. So you know, different size type transactions, as I mentioned, in Asia.

Mike Ward: I was just wondering on the new business pipeline that you guys do see.

Mike Ward: Is there any areas, where you see more or less opportunity and did the does the equitable deal sort of like Ratchet do you up on the U S side. So we should expect more deals on the international side or is that do not sort of set that framework.

Mike Ward: Thanks for the question Mike Yes.

Mike Ward: Sort of repeating a bit I mean is it really.

Mike Ward: He is across the board.

Mike Ward: The three three regions just each and every one of them is strong.

Mike Ward: So yes.

Mike Ward: Yes different size type transactions as I mentioned in Asia.

Tony Cheng: And, you know, and even in EMEA, there's probably more regular flow of not only the new business sort of traditional business, but even the blocks, more modest in size, but, you know, we just leverage off the fact that we have these incredibly strong local partnerships. You know, in the US, obviously, the equitable transaction is strategically significant for the market. So obviously, you know, we've had a lot of inquiries and, you know, talking to clients potentially about how we can also assist them strategically in fulfilling those endeavors. These things take time, you know, the equitable transaction was a particularly sizable one.

Mike Ward: And even in EMEA, there's <unk>.

Mike Ward: More regular flow of not only the new business soda traditional business, but even the blocks are more modest in size, but.

Mike Ward: We just leverage off the fact that we have these incredibly strong.

Mike Ward: Local partnerships.

Mike Ward: In the U S. Obviously, the equitable transaction.

Mike Ward: Is strategically significant for the market. So we.

Mike Ward: <unk> had a lot of inquiries.

Mike Ward: <unk>.

Mike Ward: Talking to clients potentially about how we can also assist them strategically.

Mike Ward: Fulfilling those endeavors.

Mike Ward: These things take time.

Mike Ward: The equitable transaction was a particularly sizable one.

Tony Cheng: So once again, in the US, we're very excited also about the pipeline there. And all three are very strong and all three learn from each other. So there's no reason why some of the things we've done in the US or in Asia, are not absolutely being transplanted into the other regions. Because, you know, that's what we do is make sure our global platform is very well connected strategically, and find those new solutions that work for those different markets.

Mike Ward: So once again in the U S. We're very excited also about the pipeline there.

Mike Ward: And all three are very strong in all three learn from each other.

Mike Ward: There's no reason why some of the things we have done in the U S or in Asia.

Mike Ward: Absolutely being transplanted into the other regions.

Mike Ward: Because.

Mike Ward: Yes, that's what we do is make sure our global platform is very well connected strategically.

Mike Ward: And find those new solutions that work for those.

Mike Ward: Mark.

Tony Cheng: Thank you, Tony.

Mark: Thank you Tony.

Axel Andr: Um, and then just back to the sources of capital, I'm curious how active is the third party capital, you know, I guess, pipeline and your ability to establish more Ruby Rees. And then just confirming there was a slide deck mentioned potential capital markets issuances, but just wanted to confirm that common equity is low on the on the totem pole and, you know, in terms of capital sources. Great, thank you for the question. So let me start with Sidecar. So Ruby Ray, we're of course very focused on, you know, fulfilling our commitment to those investors. We didn't see business in the first quarter, it's really waiting for year-end financial, year-end statutory financials to be available, but we're constantly working on that.

Speaker Change: And then just back to the sources of capital I'm curious how active is.

Mark: As the third party capital.

Mark: I guess pipeline and your ability to establish more Ruby <unk> and then just confirming there was the <unk>.

Mark: Slide deck mentioned potential capital market issuances, but just wanted to confirm that.

Mark: Common equity is low on the totem pole.

Mark: In terms of capital.

Mark: <unk> sources.

Mark: Great. Thank you for the question. So let me start with costs of Ruby re we're of course very focused on.

Mark: Fulfilling our commitment to those investors.

Mark: We did that we didn't see business in the first quarter and its really waiting for yearend financial year insurgency financials to be available, but we're constantly working on that and we expect again, we continue to be optimistic that the majority of that capital will be deployed by the end of the year.

Axel Andr: And we expect, again, we continue to be optimistic that the majority of that capital will be deployed by the end of the year. And so that enables us to really build upon that. It's a nice track record, it's a nice supplement to our own capital in enabling us to access the global pipeline of opportunities that we have. And so certainly we're interested in continuing to build on that track record. In terms of, you know, the footnote that kind of describes sources of capital, potential capital issuance, that's a catch-all, it's not kind of signaling anything specific and imminent.

Mark: And so that enables us to really build upon that it's a nice track record, it's a nice supplement to our own capital, enabling us to access the global pipeline of opportunities that we have and.

And so we're certainly we're interested in continuing to build on that track record.

Mark: In terms of.

Mark: The footnote that kind of describes sources of capital potential capital issuance debt. That's a catch all is not the kind of signaling anything specific and imminent Andrew viewpoints on common equity one of the things that we look at and of course it requires.

Axel Andr: And to your point on common equity, it's one of the things that we look at, and of course it requires, you know, a high hurdle rate for it to make sense. Thank you, Axel. Thank you.

Mark: High hurdle rate for it to make sense.

Axel: Thank you Axel.

Mark: Okay.

Mark: Thank you.

Bob Huang: Our next question comes from Bob Huang from Morgan Stanley, please go ahead. Hi, good morning. I know we're at time so I'll keep it to one question. Maybe if you can give us a little bit more color on the Japan reinsurance opportunities. I know you touched on it in your prepared remarks. It feels a little bit. Not just like a new opportunity for you, but a broader set of opportunity for the industry and the addressable market seems to be very large. Can you maybe, one, talk about that opportunity, but also, two, talk about just the competitive environment from that area?

Speaker Change: Our next question comes from Bob Wang from Morgan Stanley. Please go ahead hi.

Speaker Change: Good morning, I know, we're at time, so I'll keep it to one question, maybe if you can give us a little bit more color on the Japan reinsurance opportunities I know you touched on it in your prepared remarks it feels.

Speaker Change: Not just like a new opportunity for you, but a broader set of opportunity for the industry and the addressable market seems to be very large.

Can you maybe want to talk about that opportunity, but also to talk about the competitive environment.

Speaker Change: From that area.

Tony Cheng: I'm happy to, um, you know, the way things work in Japan is, um... you know, number one, yes, it's very exciting. Number two, I think we believe, we're still relatively early in the cycle. I mean, you know, they don't, the Japanese clients don't tend to do everything at once, right? They'll do many, many tranches of business. You know, one client, we've done numerous tranches with over numerous years. So every year, it's sort of one more tranche. So that's point number one. Point number two, in terms of competitiveness, we don't go after everything. I mean, there is a particularly material asset only type market there with very little what we call biometric risk.

Speaker Change: Sure happy to.

Speaker Change: The way things work in Japan.

Yes.

Speaker Change: Number one yes, it's a very exciting number two I think we believe.

Speaker Change: Still relatively early in the cycle I mean data the Japanese clients don't tend to do everything at once right I'll do many many tranches of business.

Speaker Change: One client.

Speaker Change: Numerous tranches with over numerous years. So every year, it's sort of one more tranche.

Speaker Change: So that's point number one point number two in terms of competitiveness. We don't go after everything I mean, there is.

Speaker Change: And particularly material asset only type.

Speaker Change: Market, there with very little what we call biometric risks.

Tony Cheng: And you know, we don't particularly pursue that. We don't think we would be particularly competitive in that. So where we, you know, really focus is our sweet spot, which is those asset transactions with very long term loyal clients that may be more modest in right, but they're more bilateral in nature. And they have that biometric risk that helps us distinguish ourselves. So they're in a very exciting market, it does take time to play out. And it also takes some after sales service. You know, there's one thing doing the transaction, we all get excited by that.

Speaker Change: Don't particularly pursue that we've done I think we would be particularly competitive in that.

Speaker Change: We.

Speaker Change: It really focuses our sweet spot, which is those asset transactions with very long term loyal clients.

Speaker Change: That may be more modest in size right, but then more bilateral in nature.

Speaker Change: And they have that biometric risks that helps us distinguish ourselves.

Speaker Change: They're not very exciting market. It does take time to play out.

Speaker Change: And it also takes some off the sales service you know, there's one thing doing the transaction when we all get excited by that the web brought over I believe that was 100 people based in Tokyo.

Tony Cheng: But we've got over, I believe, over 100 people based in Tokyo now, that would also assist in the after sales service in the local language with long term relationships there. So we really do believe that's a critical edge, medium, longer term, as these transactions, firstly get consummated, and secondly, get over decades. You know, that's what it's going to take to be sustainably successful in this business.

Speaker Change: That would also assist in the after sales service in the local language with long term relationships. So we really do believe that.

Speaker Change: That's a critical edge medium longer term is as these transactions firstly get consummated and secondly get them started.

Speaker Change: Decades.

Speaker Change: That's what it's going to take to be sustainably successful.

Speaker Change: In this business.

Speaker Change: Yeah.

Unknown Executive: Excellent. I really appreciate it. Thank you.

Speaker Change: Excellent I really appreciate it thank you.

Speaker Change: Yeah.

Speaker Change: Thank you okay.

Unknown Executive: Yes, this concludes our question and answer session.

Speaker Change: This concludes our question and answer session I would now like to turn the conference back over to Tony Cheng for closing remarks.

Tony Cheng: I would now like to turn the conference back over to Tony Cheng for closing remarks. Well, thank you all very much for your questions and your very strong interest and continued interest in RJ. This was a very good quarter, and the start of what we believe will be a great year, further demonstrating our very strong and continued momentum and substantial earnings power.

Speaker Change: Well. Thank you all very much for your questions and your very strong interest and continued interest in RJ.

Speaker Change: This was a very good quarter and the size of what we believe will be a great year.

Speaker Change: Demonstrating our very strong and continued momentum and substantial earnings power. So have a great day, and we look forward to talking to you next time bye bye.

Tony Cheng: So have a great day, and we look forward to talking to you next time. Bye-bye.

Yeah.

Unknown Executive: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: Okay.

Speaker Change: Uh huh.

Speaker Change: Okay.

Speaker Change: Okay.

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