REINSURANCE GROUP OF AMERICA INC

The Asia Pacific operations include business generated by its offices throughout Asia and Australia. The Traditional segment’s principal types of reinsurance include individual and group life and health, critical illness, disability and superannuation. Reinsurance agreements may be facultative or automatic agreements covering primarily individual risks, and in some markets, group risks. Superannuation is the Australian government mandated compulsory retirement savings program. Superannuation funds accumulate retirement funds for employees, and, in addition, typically offer life and disability insurance coverage. The Financial Solutions segment includes financial reinsurance, asset-intensive and certain disability and life blocks.

The increase in income before income taxes in 2023 was primarily due to increased net investment income related to an increase in the asset base from new asset-intensive transactions in the Financial Solutions segment, increased net premiums, and future policy benefits remeasurement gains, as compared to future policy benefits remeasurement losses in 2022.

Foreign currency fluctuations can result in variances in the financial statement line items. Foreign currency fluctuations resulted in a $10 million decrease in income before income taxes in 2023. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations.

The increase in income before income taxes in 2022 was primarily due to favorable claims experience, increases in net investment income, and a decrease in future policy benefit remeasurement losses, partially offset by unfavorable fluctuations in the fair value of derivatives within the Financial Solutions segment.

(1) Includes Claims and other policy benefits and Future policy benefits remeasurement (gains) losses

The increase in income before income taxes in 2023 was primarily the result of higher net investment income and favorable underwriting results.

•The increase in net premiums was primarily due to continued business growth in the segment.

•The segment added new life business production, measured by face amount of reinsurance in force, of $43.0 billion and $45.3 billion during 2023 and 2022, respectively.

•The increase in net investment income was attributable to an increase in investment yield due to an increase in interest rates.

•The decrease in the loss ratio for 2023 was primarily due to future policy benefits remeasurement gains recognized in 2023.

•During 2023 and 2022, the Company updated its mortality and morbidity assumptions which resulted in a future policy benefits remeasurement gain of $2 million in 2023, compared to a future policy benefits remeasurement loss of $75 million in 2022.

The increase in income before income taxes in 2022 was primarily due to favorable claims experience and a decrease in future policy benefits remeasurement losses as compared to 2021.

The increase in income before income taxes in 2023 was attributable to new business growth and an increase in investment income, primarily from new asset-intensive transactions.

The invested asset base supporting asset-intensive transactions increased to $15.0 billion as of December 31, 2023, from $12.2 billion as of December 31, 2022, primarily due to approximately $2.0 billion in additional assets from recently executed transactions and net organic growth of $0.8 billion from existing in-force blocks. The amount of reinsurance assumed from client companies, as measured by pre-tax statutory surplus, risk based capital and other financial reinsurance structures was $1.2 billion and $1.1 billion for the year ended December 31, 2023 and 2022, respectively. Fees earned from this business can vary significantly depending on the size, complexity and timing of the transactions and, therefore, can fluctuate from period to period.

•The decrease in net premiums was driven by lower contributions from single premium asset-intensive transactions, partially offset by contributions from recently executed asset-intensive transactions.

•The increase in net investment income was the result of a growing asset base and improved yields from increased interest rates.

•The decrease in investment related losses, net was attributable to an increase in the fair value of derivatives of $75 million and investment losses associated with higher lapses in the prior year. Investment losses associated with higher lapses in the prior year were offset by surrender and market value adjustment charges.

•The decrease in other revenues was primarily due to surrender and market value adjustment charges associated with higher lapses in the prior year.

•The increase in interested credited was driven by liabilities associated with the growing asset base.

•The increase in policy acquisition costs and other insurance expenses was the result of recently executed asset-intensive transactions, partially offset by lower contributions from single premium asset-intensive transactions.

The decrease in income before income taxes in 2022 was attributable to unfavorable fluctuations in the fair value of derivatives, partially offset by new business growth.