Reinsurance Group of America gains as favorable mortality experience helps Q2 results

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Reinsurance Group of America (RGA) is trading ~9% higher after the insurer reported a non-GAAP EPS consensus beat in Q2 on favorable mortality experience.

The reinsurer's Q2 non-GAAP EPS of $5.78 beats by $3.00, while revenue of $3.89B (-6.0% Y/Y) misses by $140M.

Net premiums stood at $3.23B, up 4.3% from the year-ago $3.10B.

"COVID-19 claim costs came down substantially this quarter, and our underlying non-COVID-19 mortality was favorable in many markets," CEO Anna Manning said.

Here is a look at the Q2 U.S. general population mortality scenario:

Non-COVID-19 experience was favorable in the U.S., due to both lower frequency and lower average claim size. Meanwhile, COVID-19 claim costs were a net positive of $9M for teh company, according to its Q2 report.

The company saw strong earnings from the U.S., Asia and its global financial solutions unit.

Here is a look at the Q2 premiums by segment:

In June, Credit Suisse Analyst Andrew Kligerman had upgraded RGA to Neutral from Underperform on the basis of better COVID-19 conditions, as well as improving mortality trends.

Also, RGA was in the UBS top conviction picks for the financials and real estate sector.