Reinsurance Group of America Inc.

11/06/2026 | Press release | Distributed by Public on 11/06/2026 15:21

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and federal securities laws including, among others, statements relating to projections of the future operations, strategies, earnings, revenues, income or loss, ratios, financial performance, and growth potential of Reinsurance Group of America, Incorporated (the "Company"). Forward-looking statements often contain words and phrases such as "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "if," "intend," "likely," "may," "plan," "potential," "pro forma," "project," "should," "will," "would," and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all derivative forms. Forward-looking statements are based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements are not a guarantee of future performance and are subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance, and achievements could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements.
Factors that could also cause results or events to differ, possibly materially, from those expressed or implied by forward-looking statements, include, among others: (1) changes in mortality, morbidity, policyholder behavior, claims experience, investment returns, interest rates, expenses and other factors as compared to our pricing assumptions; (2) investment results, whether from changes in economic, capital- and credit-market conditions, asset selection, or otherwise, and their impact on the Company's investment securities, liquidity, portfolio yields, credit quality, access to capital, cost of capital, and amount of capital required for regulatory and contractual purposes; (3) changes in the Company's financial strength and credit ratings and the effect of such changes on the Company; (4) the availability, amount, cost, and market value of collateral necessary for regulatory reserves, capital, and client obligations; (5) changes in laws and regulations, tax policy and rates, accounting standards, and privacy, data security and cybersecurity regulations applicable to the Company, and actions by regulators with authority over the Company's operations, as well as regulatory restrictions on the ability of Company subsidiaries to pay dividends to the Company; (6) the impact of general economic conditions in the U.S. and globally, including as a result of inflation, interest rate levels, geopolitical instability, and impacts from the imposition of, or changes in tariffs, as well as the stability of and actions by governments, central banks, and economies in jurisdictions where the Company operates, affecting interest rates, markets generally, or the demand for insurance and reinsurance; (7) the stability and financial performance of clients, reinsurers, third-party investment managers and other institutions and the effects of the Company's dependence on such third parties; (8) the effectiveness of the Company's risk management strategy, policy, and procedures, whether relating to reinsurance, investment strategy, operations, or otherwise; (9) the impact of impairments of the value of the Company's investment securities on the Company's capital requirements and the fact that the determination of allowances and impairments taken on the Company's investments is highly subjective; (10) the threat of catastrophic events such as pandemics, epidemics, other major health issues, natural disasters, war, military actions (including conflicts in the Middle East), and terrorism or other acts of violence; (11) competitive factors and competitors' responses to the Company's initiatives; (12) development and introduction of new products and distribution opportunities and entry into new lines of business and markets; (13) the impact of the development and adoption of artificial intelligence; (14) the effect of acquisitions and other significant transactions, including risks related to the integration of acquired blocks of business and entities and the Company's ability to achieve the expected benefits of such transactions, including the transaction entered into with subsidiaries of Equitable Holdings, Inc. on July 31, 2025; (15) interruption or failure of the Company's telecommunication, information technology, or other operational systems, or the Company's failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data and intellectual property stored on such systems; (16) adverse developments with respect to litigation, arbitration, or regulatory investigations or actions; (17) risks associated with our international operations, including related to fluctuation in foreign currency exchange rates; and (18) other risks and uncertainties described in this document and in the Company's other filings with the Securities and Exchange Commission ("SEC").
Forward-looking statements should be evaluated together with the many risks and uncertainties that affect the Company's business, including those mentioned in this document and described in the periodic reports the Company files with the SEC. These forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update these forward-looking statements, even though the Company's situation may change in the future, except as required under applicable securities law. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to see Item 1A - "Risk Factors" in the 2025 Annual Report, as may be supplemented by Item 1A - "Risk Factors" in the Company's subsequent Quarterly Reports on Form 10-Q and in the Company's other periodic and current reports filed with the SEC.
Overview
The Company is among the leading global providers of life reinsurance and financial solutions, with $4.4 trillion of life reinsurance in force and assets of $169.5 billion as of September 30, 2026. Traditional reinsurance includes individual and
group life and health, disability, and critical illness reinsurance. Financial solutions includes longevity reinsurance, asset-intensive reinsurance, pension risk transfer, capital solutions, including financial reinsurance and stable value products. The Company derives revenues primarily from renewal premiums from existing reinsurance treaties, new business premiums from existing or new reinsurance treaties, fee income from financial solutions business and income earned on invested assets.
The Company's Traditional reinsurance business involves reinsuring life insurance policies that are often in force for the remaining lifetime of the underlying individuals insured, with premiums earned typically over a period of 10 to 30 years or longer. To a lesser extent, the Company also reinsures certain health business, typically for one to three years. Each year, however, a portion of the business under existing treaties terminates due to, among other things, lapses or voluntary surrenders of underlying policies, deaths of insured individuals, and the exercise of recapture options by ceding companies. The Company's Financial Solutions business, including significant asset-intensive and longevity risk transactions, allows its clients to take advantage of growth opportunities and manage their capital, longevity and investment risk. The Company also works with partners to provide pension solutions that enable plan sponsors to diversify and protect the benefits provided to the annuitants.
For its Traditional business, the Company's profitability largely depends on the volume and amount of death- and health-related claims incurred and the ability to adequately price the risks it assumes. While death claims are reasonably predictable over a period of many years, claims are less predictable over shorter periods and are subject to significant fluctuation from quarter to quarter and year to year. For longevity business, the Company's profitability depends on the lifespan of the underlying contract holders and the investment performance for certain contracts. Additionally, the Company generates profits on investment spreads associated with the reinsurance of investment type contracts and generates fees from financial reinsurance transactions, which are typically shorter duration than its traditional life reinsurance business. The Company believes that its sources of liquidity are sufficient to cover potential claims payments on both a short-term and long-term basis.
As is customary in the reinsurance business, clients continually update, refine and revise reinsurance information provided to the Company. The Company uses this revised information in preparing its condensed consolidated financial statements, and the resulting financial effects are reflected in the current period.
Segment Presentation
The Company has geographic-based and business-based operational segments. Geographic-based operations are further segmented into Traditional and Financial Solutions businesses. The Company allocates capital to its segments based on an internally developed economic capital model, the purpose of which is to measure the risk in the business and to provide a consistent basis upon which capital is deployed. The economic capital model considers the unique and specific nature of the risks inherent in RGA's businesses.
As a result of the economic capital allocation process, a portion of investment income is credited to the segments based on the level of allocated capital. In addition, the segments are charged for excess capital utilized above the allocated economic capital basis. This charge is included in policy acquisition costs and other insurance expenses. Segment investment performance varies with the composition of investments and the relative allocation of capital to the operating segments.
Segment revenue levels can be significantly influenced by currency fluctuations, large transactions, mix of business and reporting practices of ceding companies, and therefore may fluctuate from period to period. Although reasonably predictable over a period of years, segment claims experience can be volatile over shorter periods. See "Results of Operations by Segment" below for further information about the Company's segments.
Consolidated Results of Operations
Actuarial Assumptions Update
The Company's annual assumptions review, completed in the third quarter of 2026, did not have a material impact on the Company's pre-tax income. The 2025 pre-tax loss was primarily due to updated mortality assumptions in the U.K.
The following table summarizes the pre-tax impact, net of reinsurance, of assumptions updates for the nine months ended September 30, 2026 and 2025 for each segment's long-duration and other insurance business (dollars in millions):
September 30,
2026
2025
Long-duration business:
U.S. and Latin America - Traditional $ 12 $ 39
U.S. and Latin America - Financial Solutions (8) -
Canada - Traditional 22 9
Canada - Financial Solutions - -
Europe, Middle East and Africa - Traditional (31) (222)
Europe, Middle East and Africa - Financial Solutions - 24
Asia Pacific - Traditional 16 1
Asia Pacific - Financial Solutions (4) -
Impact of assumptions updates for long-duration business 7 (149)
Impact of assumptions updates for other insurance business (7) -
Total impact of assumptions updates $ - $ (149)
Consolidated income before income taxes
The following table summarizes the changes in net income for the periods presented (dollars in millions, except per share data):
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Revenues
Net premiums $ 5,352 $ 4,280 $ 1,072 $ 14,419 $ 12,450 $ 1,969
Net investment income 1,934 1,475 459 5,499 4,115 1,384
Investment related losses, net (85) 13 (98) (331) (110) (221)
Other revenues 349 436 (87) 1,094 608 486
Total revenues 7,550 6,204 1,346 20,681 17,063 3,618
Benefits and expenses
Claims and other policy benefits 5,420 4,356 1,064 14,519 12,223 2,296
Future policy benefits remeasurement (gains) losses (40) 85 (125) (41) 97 (138)
Market risk benefits remeasurement (gains) losses (26) (1) (25) (30) 11 (41)
Interest credited 533 547 (14) 1,630 1,160 470
Policy acquisition costs and other insurance expenses 586 471 115 1,606 1,321 285
Other operating expenses 357 328 29 1,031 953 78
Interest expense 96 98 (2) 296 268 28
Total benefits and expenses 6,926 5,884 1,042 19,011 16,033 2,978
Income before income taxes
624 320 304 1,670 1,030 640
Provision for income taxes 167 65 102 418 306 112
Net income $ 457 $ 255 $ 202 $ 1,252 $ 724 $ 528
Net income attributable to noncontrolling interest 1 2 (1) 4 5 (1)
Net income available to RGA, Inc. shareholders $ 456 $ 253 $ 203 $ 1,248 $ 719 $ 529
Earnings per share
Basic earnings per share $ 6.98 $ 3.85 $ 3.13 $ 19.09 $ 10.89 $ 8.20
Diluted earnings per share $ 6.92 $ 3.81 $ 3.11 $ 18.91 $ 10.78 $ 8.13
Consolidated results
Three months ended September 30, 2026 compared to three months ended September 30, 2025
Income before income taxes increased by $304 million for the three months ended September 30, 2026, compared with the same period in 2025. The increase was primarily attributable to the following:
•Higher net investment income, excluding variable investment income, from growth in invested assets and higher new money rates earned on recent investments.
•Higher variable investment income primarily from limited partnerships and real estate joint venture sales, which increased revenues and contributed to the improvement in income before income taxes.
•Favorable claims experience across all of the Company's operating segments, which reduced claims and other policy benefits relative to expected experience.
•The completion of the Company's annual assumption review during the third quarter of 2026 did not have an impact on the results for the current period. The 2025 assumption update resulted in a loss of $149 million. See Note 4 - "Future Policy Benefits" for additional information.
•Unrealized gains due to changes in fair value of funds withheld embedded derivative associated with reinsurance agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis.
The increase was partially offset by the following:
•Higher investment related losses due to realized losses from portfolio repositioning and unrealized losses due to changes in fair value of certain limited partnership investments.
•Net losses on freestanding derivatives.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
Income before income taxes increased by $640 million for the nine months ended September 30, 2026, compared with the same period in 2025. The increase was primarily attributable to:
•The Company executed reinsurance contracts with subsidiaries of Equitable Holdings, Inc. (the "Equitable Holdings Transaction") on July 31, 2025. Pursuant to these agreements, the Company's U.S. Financial Solutions segment assumed a 75% quota share of Equitable Holdings' in force individual life insurance liabilities on a coinsurance and modified coinsurance basis, consisting of a diversified mix of life products and account value liabilities, with total liabilities of approximately $12 billion. This transaction increased the U.S. Financial Solutions adjusted operating income before income taxes by $105 million during the nine month period ended September 30, 2026.
•Higher variable investment income primarily from limited partnerships and real estate joint venture sales, which increased revenues and contributed to the improvement in income before income taxes.
The increase was partially offset by the following:
•Higher investment related losses resulting from realized losses due to portfolio repositioning and unrealized losses due to changes in fair value of certain limited partnership investments.
Fluctuations in foreign currency to U.S. dollar exchange rates
Foreign currency exchange fluctuations can result in variances in the financial statement line items. Foreign currency exchange fluctuations did not have a material impact on income before income taxes for the three and nine months ended September 30, 2026. Unless otherwise stated, all amounts discussed below are net of foreign currency exchange fluctuations.
Investment related losses
The increase in investment related losses, net was due to the following:
•During the three and nine months ended September 30, 2026, the Company repositioned its investment portfolio to generate higher yields, resulting in net realized losses of $102 million and $296 million, respectively, compared to net capital gains of $31 million and net capital losses of $55 million for the three and nine months ended September 30, 2025, respectively.
•During the three and nine months ended September 30, 2026, the fair value of certain limited partnership investments decreased by $42 million and $71 million, respectively, compared to a decrease of $1 million and $22 million for the three and nine months ended September 30, 2025, respectively.
•For the three and nine months ended September 30, 2026, changes in the fair value of funds withheld embedded derivative associated with reinsurance agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis increased by $104 million and $147 million, respectively, compared to a decrease of $33 million and $41 million for the three and nine months ended September 30, 2025, respectively.
•The Company incurred $71 million and $150 million of changes in allowance for credit losses and impairments during the three and nine months ended September 30, 2026, respectively, compared to $35 million and $111 million during the three and nine months ended September 30, 2025, respectively.
The increase was partially offset by the following:
•For the three months ended September 30, 2026, changes in the fair value of free standing derivatives decreased by $29 million compared to an increase of $32 million for the three months ended September 30, 2025, respectively. For the nine months ended September 30, 2026, changes in the fair value of free standing derivatives increased by $2 million compared to an increase of $80 million for the nine months ended September 30, 2025, respectively.
See the Investment section within Management Discussion and Analysis, Note 10 - "Investments" and Note 11 - "Derivative Instruments" in the Notes to Condensed Consolidated Financial Statements for additional information on the changes in allowance for credit losses, impairment losses and derivatives.
Market risk benefits
Market risk benefits consist of guaranteed minimum benefits associated with the Company's reinsurance of variable and indexed annuities. The change in fair value of the freestanding derivatives purchased by the Company to hedge the liability is reflected in investment related gains (losses), net. The change in fair value of market risk benefits for guaranteed minimum benefits, after allowing for changes in the associated freestanding derivatives, decreased income before income taxes by $9 million and $22 million for the three and nine months ended September 30, 2026. The change in fair value of market risk benefits for guaranteed minimum benefits, after allowing for changes in the associated freestanding derivatives, decreased income before income taxes by $7 million and $9 million for the three and nine months ended September 30, 2025, respectively.
Non-economic changes in insurance liabilities
Non-economic changes in insurance liabilities include the initial loss on Pension Risk Transfer ("PRT") transactions, net of amortization, and changes in the fair value of embedded derivatives associated with the Company's reinsurance of equity-indexed annuity products. The initial loss at inception of a PRT transaction is the difference between the single premium received and the valuation of the initial reserve based on interest rates prescribed by U.S. GAAP. The Company non-economic losses were $16 million for the three and nine months ended September 30, 2026, compared to losses of $12 million and $41 million for the three and nine months ended September 30, 2025, respectively.
Income taxes
The effective tax rate was 26.8% and 25.1%, for the three and nine months ended September 30, 2026, respectively, compared to 20.3% and 29.7% for the three and nine months ended September 30, 2025. See Note 13 - "Income Tax" in the Notes to Condensed Consolidated Financial Statements for additional information on the Company's consolidated effective tax rate.
Consolidated adjusted operating income before income taxes
Non-GAAP Measure - Consolidated adjusted operating income before income taxes is not determined in accordance with U.S. GAAP. The Company principally uses consolidated adjusted operating income before income taxes in evaluating performance because the Company believes that such measure, when reviewed in conjunction with the relevant U.S. GAAP measure (income before income taxes), presents a clearer picture of its operating performance and assists the Company in the allocation of its resources.
The Company believes that this non-GAAP financial measure provides investors and other third parties with a better understanding of the Company's results of operations, financial statements and underlying profitability drivers and trends of the Company's businesses by excluding specified items that may not be indicative of the Company's ongoing operating performance and may fluctuate significantly from period to period. This measure should be considered supplementary to the Company's financial results that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for U.S. GAAP measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way the Company calculates such measures. Consequently, the Company's non-GAAP financial measures may not be comparable to similar measures used by other companies.
Adjusted operating income (loss) before income taxes is calculated as income (loss) before income taxes excluding, as applicable:
•Substantially all of the effect of net investment related gains and losses;
•Changes in the fair value of certain embedded derivatives;
•Changes in the fair value of contracts that provide market risk benefits;
•The Company's non-economic losses at contract inception for direct pension risk transfer single premium business (which are amortized into adjusted operating income within adjusted claims and other policy benefits over the estimated lives of the contracts);
•Any net gain or loss from discontinued operations;
•The cumulative effect of any accounting changes;
•The impact of certain tax related items; and
•Any other items the Company believes are not indicative of the Company's ongoing operations.
See "Segment Accounting Policies" within Note 15 - "Segment Information" in the Notes to Condensed Consolidated Financial Statements for additional information regarding the presentation of segment results and the Company's definition of adjusted operating income.
Reconciliation of income before income taxes to adjusted operating income (loss) before income taxes
The reconciliation of consolidated income before income taxes to consolidated adjusted operating income before income taxes is shown below for the periods presented (dollars in millions):
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Income before income taxes $ 624 $ 320 $ 304 $ 1,670 $ 1,030 $ 640
Investment and derivative (gains) losses 222 (1) 223 601 147 454
Market risk benefits remeasurement (gains) losses (26) (1) (25) (30) 11 (41)
Change in fair value of funds withheld embedded derivatives (104) 33 (137) (147) 41 (188)
Funds withheld (gains) losses - investment income (1) 19 (20) 5 17 (12)
Derivatives - interest credited 4 1 3 7 13 (6)
Investment income on unit-linked variable annuities - 1 (1) 1 1 -
Interest credited on unit-linked variable annuities - (1) 1 (1) (1) -
Interest expense on uncertain tax positions - - - 1 - 1
Other 17 14 3 1 32 (31)
Adjusted operating income before income taxes $ 736 $ 385 $ 351 $ 2,108 $ 1,291 $ 817
Three months ended September 30, 2026 compared to three months ended September 30, 2025
Adjusted operating income before income taxes increased by $351 million for the three months ended September 30, 2026, compared with the same period in 2025. The increase was primarily attributable to earnings from new transactions, growth in net investment income and favorable claims experience.
The increase in adjusted operating income before income taxes was primarily the result of the following:
•Higher net investment income from growth in invested assets and higher new money rates earned on recent investments.
•Favorable claims experience across all of the Company's operating segments, which reduced claims and other policy benefits relative to expected experience.
•The completion of the Company's annual assumption review during the third quarter of 2026 did not have an impact on the consolidated results for the current period. The 2025 assumption update resulted in a loss of $149 million. See Note 4 - "Future Policy Benefits" for additional information.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
The increase in adjusted operating income before income taxes was primarily the result of the following:
•Favorable impacts from the Equitable Holdings transaction completed in the third quarter of 2025.
•Variable investment income, excluding spread related business, was $144 million for the nine months ended September 30, 2026, compared to $53 million in the prior year.
•Higher net investment income from growth in invested assets and higher new money rates earned on recent investments.
•Favorable claims experience across all of the Company's operating segments.
•The completion of the Company's annual assumption review during the third quarter of 2026 did not have an impact on the consolidated results for the current period. The 2025 assumption update resulted in a loss of $149 million. See Note 4 - "Future Policy Benefits" for additional information.
Fluctuations in foreign currency to U.S. dollar exchange rates
Foreign currency exchange fluctuations can result in variances in the financial statement line items. Foreign currency exchange fluctuations did not have a material impact on income before income taxes for the three and nine months ended September 30, 2026. Unless otherwise stated, all amounts discussed below are net of foreign currency exchange fluctuations.
Premiums and business growth
The increases in net premiums for the three and nine months ended September 30, 2026, were primarily due to organic growth and new business production. Organic growth and new business production, measured by the face amount of life reinsurance in force, were $389.5 billion and $606.4 billion during the nine months ended September 30, 2026 and 2025, respectively. Consolidated assumed life reinsurance in force increased to $4,378.5 billion as of September 30, 2026, from $4,320.8 billion as of September 30, 2025, primarily due to new business production.
Net investment income
The increases in net investment income for the three and nine months ended September 30, 2026, were primarily due to an increase in the average invested asset base and higher risk-free rates earned on new investments, and an increase in variable investment income from limited partnerships and real estate joint ventures sales. The following summarizes the primary drivers contributing to the increases in net investment income for the three and nine months ended September 30, 2026:
•The average invested assets at amortized cost, excluding spread related business, totaled $49.4 billion and $45.1 billion, for the nine months ended September 30, 2026 and 2025, respectively.
•The average yield earned on investments, excluding spread related business, was 5.26% and 4.73% for the three months ended September 30, 2026 and 2025, respectively, and 5.17% and 4.91% for the nine months ended September 30, 2026 and 2025, respectively. The increase in investment yield for the three months ended September 30, 2026, in comparison with the same period in the prior year, was primarily due to an increase in variable investment income. The increase in investment yield for the nine months ended September 30, 2026, in comparison with the same period in the prior year, was primarily due to an increase in variable investment income from limited partnerships and real estate joint venture sales.
The average yield will vary from year to year depending on several variables, including the prevailing risk-free interest rate and credit spread environment, prepayment fees and make-whole premiums, changes in the mix of the underlying investments and cash and cash equivalents balances. Variable investment income from limited partnerships and real estate joint ventures will also vary from year to year and is highly dependent on the timing of dividends and distributions on certain investments, in addition to the sale of the underlying property in the case of real estate joint ventures. Investment income is allocated to the operating segments based upon average assets and related capital levels deemed appropriate to support segment operations.
Results of Operations by Segment
As noted above, adjusted operating income (loss) before income taxes, when presented at a segment level, is a measure reported to the Company's management for purposes of making decisions about allocating resources to the Company's business segments and assessing business segment performance. It is presented in the Company's financial statement footnotes in accordance with U.S. GAAP. The Company's significant segment expenses are (1) adjusted claims and other policy benefits, which excludes the non-economic losses at contract inception for direct pension risk transfer single premium business; (2) future policy benefits remeasurement gains and losses; (3) adjusted interest credited, which excludes the change in the fair value of embedded derivatives associated with equity-indexed annuity products; and (4) interest expense. See Note 15 - "Segment Information" in the Notes to Consolidated Financial Statements for additional information regarding the presentation of segment results and the Company's definition of adjusted operating income.
U.S. and Latin America Operations
U.S. and Latin America operations consist of two major segments: Traditional and Financial Solutions. The Traditional segment primarily specializes in the reinsurance of individual mortality risk, long-term care, universal life products and, to a lesser extent, group reinsurance. The Financial Solutions segment consists of Asset-Intensive and Capital Solutions. Asset-Intensive within the Financial Solutions segment includes coinsurance of products which primarily exhibit interest rate and market risks such as annuities, corporate-owned life insurance policies, PRT group annuity contracts and, to a lesser extent, fee-based synthetic guaranteed investment contracts, indexed and variable life insurance, investment only and stable value contracts. Effective January 1, 2025, newly issued FABN issuances are included in the U.S. Financial Solutions segment. Capital Solutions within the Financial Solutions segment primarily involves assisting ceding companies in meeting applicable regulatory requirements by enhancing the ceding companies' financial strength and regulatory surplus position through relatively low risk reinsurance and other transactions. Typically, these transactions do not qualify as reinsurance under U.S. GAAP due to the low-risk nature of the transactions; therefore, only the related net fees are reflected in other revenues.
On July 31, 2025, the Company executed reinsurance contracts with subsidiaries of Equitable Holdings. Pursuant to these agreements, the Company's U.S. Financial Solutions segment assumed a 75% quota share of Equitable Holdings' in force individual life insurance liabilities on a coinsurance and modified coinsurance basis, consisting of a diversified mix of life products and account value liabilities, with total liabilities of approximately $12 billion.
The following table sets forth the U.S. and Latin America operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Total segment revenues 4,151 3,260 891 10,961 8,686 2,275
Total adjusted benefits and expenses 3,856 3,024 832 10,091 8,142 1,949
Adjusted operating income before income taxes $ 295 $ 236 $ 59 $ 870 $ 544 $ 326
The increase in adjusted operating income before income taxes for the three months ended September 30, 2026, was primarily due to the favorable contributions from previously executed in-force actions in the Traditional segment and higher variable investment income in the current year, partially offset by less favorable impact of assumptions updates in the current year. The increase for the nine months ended September 30, 2026, was primarily due to favorable claims experience in the current year, higher variable investment income and the inclusion of a full nine months of the Equitable Holdings transaction, which was executed on July 31, 2025.
Traditional Reinsurance
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 1,930 $ 1,883 $ 47 $ 5,823 $ 5,823 $ -
Net investment income 303 282 21 893 835 58
Investment related gains (losses), net 4 14 (10) 24 20 4
Other revenues 11 11 - 44 23 21
Total segment revenues 2,248 2,190 58 6,784 6,701 83
Adjusted benefits and expenses
Adjusted claims and other policy benefits 1,745 1,769 (24) 5,340 5,464 (124)
Future policy benefits remeasurement (gains) losses 9 (46) 55 (18) 3 (21)
Adjusted interest credited 39 61 (22) 135 127 8
Policy acquisition costs and other insurance expenses 215 209 6 661 651 10
Other operating expenses 64 61 3 187 176 11
Total adjusted benefits and expenses 2,072 2,054 18 6,305 6,421 (116)
Adjusted operating income before income taxes $ 176 $ 136 $ 40 $ 479 $ 280 $ 199
Key metrics
Life reinsurance in force $1,938.3 billion $1,860.7 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ (12) $ (39) $ (12) $ (39)
Effect of actual variances from expected experience $ 21 $ (7) $ (6) $ 42
Loss ratio (1)
90.9 % 91.5 % 91.4 % 93.9 %
Policy acquisition costs and other insurance expenses as a percentage of net premiums 11.1 % 11.1 % 11.4 % 11.2 %
Other operating expenses as a percentage of net premiums 3.3 % 3.2 % 3.2 % 3.0 %
(1)Includes adjusted claims and other policy benefits and future policy benefits remeasurement (gains) losses.
The increases in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, were primarily due to favorable claims experience and variable investment income, partially offset by less favorable impact from the Company's annual assumptions review in the current period.
Three months ended September 30, 2026 compared to three months ended September 30, 2025
Segment revenues
•The increase in net premiums was due to organic growth.
•The increase in net investment income was primarily due to favorable investment yields, an increase in variable investment income and a higher asset base supporting the business.
Adjusted benefits and expenses
•During the three months ended September 30, 2026 and 2025, the Company completed its annual assumptions review resulting in net favorable assumptions updates totaling $12 million and $39 million, respectively, primarily due to updated mortality assumptions. See Note 4 - "Future Policy Benefits" for additional information.
•Adjusted interest credited is primarily associated with the reinsurance of equity-indexed life products. The effect on interest credited related to equity markets is substantially offset by a corresponding increase in the fair value of equity options reported in investment related gains (losses), net.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
Segment revenues
•The increase in net investment income was primarily due to favorable investment yields and a higher asset base supporting the business.
•The segment added new life business, measured by face amount of life reinsurance in force, of $155.3 billion and $135.1 billion during the nine months ended September 30, 2026 and 2025, respectively.
Adjusted benefits and expenses
•The future policy benefits remeasurement gain was due to favorable claims experience in the current period partially offset by lower remeasurement gains from the Company's annual assumptions review.
Financial Solutions
The following table sets forth the U.S. and Latin America Financial Solutions segment operating results for the periods indicated (dollars in millions):
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 1,007 $ 227 $ 780 $ 1,537 $ 331 $ 1,206
Net investment income 599 476 123 1,749 1,184 565
Investment related gains (losses), net 10 16 (6) 45 16 29
Other revenues 287 351 (64) 846 454 392
Total segment revenues 1,903 1,070 833 4,177 1,985 2,192
Adjusted benefits and expenses
Adjusted claims and other policy benefits 1,298 511 787 2,393 787 1,606
Future policy benefits remeasurement (gains) losses 1 2 (1) 8 (1) 9
Market risk benefits remeasurement (gains) losses - - - - - -
Adjusted interest credited 269 324 (55) 872 577 295
Policy acquisition costs and other insurance expenses 192 111 81 444 288 156
Other operating expenses 24 22 2 69 70 (1)
Total adjusted benefits and expenses 1,784 970 814 3,786 1,721 2,065
Adjusted operating income before income taxes $ 119 $ 100 $ 19 $ 391 $ 264 $ 127
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ 8 $ - $ 8 $ -
Effect of actual variances from expected experience $ (7) $ 2 $ - $ (1)
The increases in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, were primarily due to favorable variable investment income.
Three months ended September 30, 2026 compared to three months ended September 30, 2025
Segment revenues
•The increase in net premiums was primarily due to single-premium PRT transactions executed in the current quarter which is offset by an associated increase in reserves reflected in adjusted claims and other policy benefits.
•The increase in net investment income was primarily due to favorable variable investment income and an increase in the invested asset base supporting asset-intensive transactions.
◦The book value of the invested asset base supporting asset-intensive transactions increased to $46.7 billion as of September 30, 2026, from $39.8 billion as of September 30, 2025, resulting in higher net investment income. As of September 30, 2026 and September 30, 2025, $3.0 billion and $3.3 billion, respectively, of the invested assets were funds withheld at interest, of which 90% or more was associated with two clients.
◦The increase in the asset base was primarily due to $8.7 billion from new transactions and growth from treaties open to new business, offset by $1.8 billion in run-off of existing in force transactions.
•The decrease in other revenues was primarily due to a decrease in policy charges on universal life-type policies associated with the Equitable Holdings transaction.
Adjusted benefits and expenses
•The increase in adjusted claims and other policy benefits and policy acquisition costs and other insurance expenses was primarily due to the execution of PRT transactions in the current quarter.
•The increase in policy acquisition costs and other insurance expenses was primarily due to retrocession transactions executed in the current quarter. Net investment income ceded on retrocessions is reported within policy acquisition costs and other insurance expenses.
•During the three months ended September 30, 2026, the Company completed its annual assumptions review resulting in net unfavorable assumptions updates totaling $8 million, primarily due to updated mortality assumptions. See Note 4 - "Future Policy Benefits" for additional information.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
Segment revenues
•The increase in net premiums was primarily due to premiums received on the Equitable Holdings transaction in the current year.
•The increase in net investment income was primarily due to favorable variable investment income and an increase in the invested asset base supporting asset-intensive transactions.
•The increase in other revenues was primarily due to policy charges on universal life-type policies associated with the Equitable Holdings transaction.
Adjusted benefits and expenses
•The increases in adjusted claims and other policy benefits, adjusted interest credited and policy acquisition costs and other insurance expenses were primarily due to the Equitable Holdings transaction.
Reinsurance of separate accounts
•Certain of the Company's reinsurance contracts, including the Equitable Holdings transaction, reinsure the ceding company's separate account liabilities on a modified coinsurance basis. Under the terms of these arrangements, the ceding company retains the assets supporting the separate account liabilities. The Company receives a fee based on the policyholder's account value and is not directly exposed to the investment performance of the separate account assets. Periodic settlements between the Company and the ceding company are net settled. The Company, having the right of offset, has offset assumed separate account assets and liabilities in its consolidated balance sheet. As of September 30, 2026 and December 31, 2025, the Company assumed $15.3 billion, net of reinsurance of $1.0 billion, and $16.7 billion of separate account liabilities.
Canada Operations
Canada operations are primarily engaged in traditional reinsurance, which consists mainly of traditional individual life reinsurance, and to a lesser extent, creditor, group life and health, critical illness and disability reinsurance. Creditor insurance covers the outstanding balance on personal, mortgage or commercial loans in the event of death, disability or critical illness and is generally shorter in duration than traditional individual life insurance. The Canada Financial Solutions segment consists of longevity, asset-intensive and capital solutions.
The following table sets forth the Canada operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Total segment revenues 526 504 22 1,570 1,509 61
Total adjusted benefits and expenses 446 454 (8) 1,386 1,379 7
Adjusted operating income before income taxes $ 80 $ 50 $ 30 $ 184 $ 130 $ 54
The increases in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, were primarily due to the favorable impact from annual assumptions updates, an increase in variable investment income and favorable experience in Traditional business.
Foreign currency exchange fluctuations can result in variances in the financial statement line items. Foreign currency exchange fluctuations resulted in an increase in adjusted operating income before income taxes of $1 million for the nine months ended September 30, 2026. Unless otherwise stated, all amounts discussed below are net of foreign currency exchange fluctuations.
Traditional Reinsurance
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 346 $ 326 $ 20 $ 1,033 $ 984 $ 49
Net investment income 64 69 (5) 191 200 (9)
Investment related gains (losses), net - 2 (2) 3 3 -
Other revenues - 1 (1) 1 1 -
Total segment revenues 410 398 12 1,228 1,188 40
Adjusted benefits and expenses
Adjusted claims and other policy benefits 320 307 13 964 920 44
Future policy benefits remeasurement (gains) losses (23) (8) (15) (26) (3) (23)
Market risk benefits remeasurement (gains) losses - - - - - -
Adjusted interest credited - 1 (1) - 1 (1)
Policy acquisition costs and other insurance expenses 38 43 (5) 113 127 (14)
Other operating expenses 12 12 - 38 40 (2)
Total adjusted benefits and expenses 347 355 (8) 1,089 1,085 4
Adjusted operating income before income taxes $ 63 $ 43 $ 20 $ 139 $ 103 $ 36
Key metrics
Life reinsurance in force $523.8 billion $507.9 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ (22) $ (9) $ (22) $ (9)
Effect of actual variances from expected experience $ (1) $ 1 $ (4) $ 6
Loss ratio (1)
85.8 % 91.7 % 90.8 % 93.2 %
Policy acquisition costs and other insurance expenses as a percentage of net premiums 11.0 % 13.2 % 10.9 % 12.9 %
Other operating expenses as a percentage of net premiums 3.5 % 3.7 % 3.7 % 4.1 %
(1)Includes adjusted claims and other policy benefits and future policy benefits remeasurement (gains) losses.
The increase in adjusted operating income before income taxes for the three months ended September 30, 2026, was primarily due to the favorable impact from the annual assumptions updates and favorable experience in individual life business. The increase in adjusted operating income before income taxes for the nine months ended September 30, 2026, was primarily due to the favorable impact from the annual assumptions updates and favorable experience across all lines of business.
Three months ended September 30, 2026 compared to three months ended September 30, 2025
Segment revenues
•The increase in net premiums was primarily due to organic growth.
Adjusted benefits and expenses
•The decrease in the loss ratio was primarily due to favorable experience in individual life business.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
Segment revenues
•The increase in net premiums was primarily due to organic growth and favorable foreign currency exchange fluctuations.
•The segment added new life business production, measured by face amount of life reinsurance in force, of $40.4 billion and $39.8 billion during the nine months ended September 30, 2026 and 2025, respectively.
Adjusted benefits and expenses
•The decrease in the loss ratio was primarily due to favorable experience across all lines of business.
•During the three months ended September 30, 2026 and 2025, the Company completed its annual assumptions review resulting in net favorable assumptions updates totaling $22 million and $9 million, respectively, primarily due to updated mortality assumptions. See Note 4 - "Future Policy Benefits" for additional information.
Financial Solutions
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 46 $ 46 $ - $ 135 $ 143 $ (8)
Net investment income 68 58 10 201 167 34
Investment related gains (losses), net - (1) 1 (3) (1) (2)
Other revenues 2 3 (1) 9 12 (3)
Total segment revenues 116 106 10 342 321 21
Adjusted benefits and expenses
Claims and other policy benefits 92 92 - 276 276 -
Future policy benefits remeasurement (gains) losses (1) - (1) (1) - (1)
Market risk benefits remeasurement (gains) losses - - - - - -
Interest credited - - - - - -
Policy acquisition costs and other insurance expenses 6 5 1 17 14 3
Other operating expenses 2 2 - 5 4 1
Total adjusted benefits and expenses 99 99 - 297 294 3
Adjusted operating income before income taxes $ 17 $ 7 $ 10 $ 45 $ 27 $ 18
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ - $ - $ - $ -
Effect of actual variances from expected experience $ (1) $ - $ (1) $ -
The increase in adjusted operating income before income taxes for the three months ended September 30, 2026, was primarily due to higher variable investment income. The increase in adjusted operating income before income taxes for the nine months ended September 30, 2026, was primarily due to higher variable investment income, partially offset by less favorable experience in longevity business.
Europe, Middle East and Africa Operations
Europe, Middle East and Africa ("EMEA") operations consist of two major segments: Traditional and Financial Solutions. The Traditional segment primarily provides reinsurance through yearly renewable term and coinsurance agreements on a variety of life, health and critical illness products. Reinsurance agreements may be facultative or automatic agreements covering primarily individual risks and, in some markets, group risks. The Financial Solutions segment consists of reinsurance and other transactions associated with longevity closed blocks, payout annuities, capital management solutions and financial reinsurance.
The following table sets forth the EMEA operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Total segment revenues 1,129 984 145 3,381 2,813 568
Total adjusted benefits and expenses 957 1,036 (79) 2,855 2,591 264
Adjusted operating income before income taxes $ 172 $ (52) $ 224 $ 526 $ 222 $ 304
The increases in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, were primarily due to unfavorable assumptions updates in the prior year and growth in the underlying business.
Foreign currency exchange fluctuations can result in variances in the financial statement line items. Foreign currency exchange fluctuations resulted in decreases of $3 million on adjusted operating income before income taxes for the three months ended September 30, 2026, and increases of $10 million for the nine months ended September 30, 2026. Unless otherwise stated, all amounts discussed below are net of foreign currency exchange fluctuations.
Traditional Reinsurance
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 556 $ 562 $ (6) $ 1,729 $ 1,675 $ 54
Net investment income 36 30 6 106 92 14
Investment related gains (losses), net - - - (1) - (1)
Other revenues 6 5 1 12 10 2
Total segment revenues 598 597 1 1,846 1,777 69
Adjusted benefits and expenses
Adjusted claims and other policy benefits 517 516 1 1,569 1,532 37
Future policy benefits remeasurement (gains) losses 8 216 (208) (3) 214 (217)
Market risk benefits remeasurement (gains) losses - - - - - -
Adjusted interest credited - - - - - -
Policy acquisition costs and other insurance expenses 24 30 (6) 87 74 13
Other operating expenses 28 27 1 79 81 (2)
Total adjusted benefits and expenses 577 789 (212) 1,732 1,901 (169)
Adjusted operating income before income taxes $ 21 $ (192) $ 213 $ 114 $ (124) $ 238
Key metrics
Life reinsurance in force $1,060.3 billion $1,125.7 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ 31 $ 222 $ 31 $ 222
Effect of actual variances from expected experience $ (23) $ (6) $ (34) $ (8)
Loss ratio (1)
94.4 % 130.2 % 90.6 % 104.2 %
Policy acquisition costs and other insurance expenses as a percentage of net premiums 4.3 % 5.3 % 5.0 % 4.4 %
Other operating expenses as a percentage of net premiums 5.0 % 4.8 % 4.6 % 4.8 %
(1)Includes adjusted claims and other policy benefits and future policy benefits remeasurement (gains) losses.
The increases in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, were primarily due to unfavorable assumptions updates in the prior year.
Segment revenues
•The segment added new life business production, measured by face amount of life reinsurance in force, of $102.8 billion and $133.2 billion during the nine months ended September 30, 2026 and 2025, respectively.
Adjusted benefits and expenses
•The decreases in the loss ratios for the three and nine months ended September 30, 2026, were primarily due to a decrease in unfavorable assumptions updates and an improvement in mortality experience.
•During the three months ended September 30, 2026, the Company completed its annual assumptions review resulting in net unfavorable assumptions updates totaling $31 million, primarily due to updated mortality assumptions. The 2025 annual assumption update resulted in a loss of $222 million primarily due to updated mortality assumptions in the U.K. to reflect deterioration in mortality improvements and ongoing challenges within the healthcare system. See Note 4 - "Future Policy Benefits" for additional information.
Financial Solutions
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 367 $ 260 $ 107 $ 1,057 $ 696 $ 361
Net investment income 152 106 46 435 300 135
Investment related gains (losses), net 1 - 1 2 3 (1)
Other revenues 11 21 (10) 41 37 4
Total segment revenues 531 387 144 1,535 1,036 499
Adjusted benefits and expenses
Adjusted claims and other policy benefits 357 253 104 1,045 644 401
Future policy benefits remeasurement (gains) losses (9) (37) 28 (19) (43) 24
Market risk benefits remeasurement (gains) losses - - - - - -
Adjusted interest credited 5 7 (2) 19 20 (1)
Policy acquisition costs and other insurance expenses 4 3 1 11 6 5
Other operating expenses 23 21 2 67 63 4
Total adjusted benefits and expenses 380 247 133 1,123 690 433
Adjusted operating income before income taxes $ 151 $ 140 $ 11 $ 412 $ 346 $ 66
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ - $ (24) $ - $ (24)
Effect of actual variances from expected experience $ (9) $ (13) $ (19) $ (19)
The increases in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, were primarily due to increases in net premiums and net investment income, partially offset by an increase in adjusted claims and other policy benefits as a result of increased volumes of closed block longevity and asset-intensive business.
Segment revenues
•The increases in net premiums for the three and nine months ended September 30, 2026, were primarily due to increased volumes on new and existing treaties.
•The increases in net investment income for the three and nine months ended September 30, 2026, were primarily due to an increase in yields and an increase in invested assets supporting the segment.
Adjusted benefits and expenses
•The increases in adjusted claims and other policy benefits for the three and nine months ended September 30, 2026, were the result of increased volumes of closed block longevity and asset-intensive transactions.
•There were no changes to the segment actuarial assumptions as a result of the Company's 2026 annual assumptions review completed in the third quarter. The 2025 annual assumptions update resulted in a gain of $24 million, primarily due to updated longevity based mortality in the U.K. See Note 4 - "Future Policy Benefits" for additional information.
Asia Pacific Operations
Asia Pacific operations include business generated by the Company's 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 following table sets forth the Asia Pacific operating results for the periods indicated (dollars in millions). See additional information in the Traditional and Financial Solutions sections.
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Total segment revenues 1,633 1,321 312 4,590 3,755 835
Total adjusted benefits and expenses 1,422 1,112 310 3,940 3,200 740
Adjusted operating income before income taxes $ 211 $ 209 $ 2 $ 650 $ 555 $ 95
The adjusted operating income before income taxes for the three months ended September 30, 2026, was in line with the prior year period. The increase in the adjusted operating income before income taxes for the nine months ended September 30, 2026, was primarily due to higher net investment income and business growth in both traditional reinsurance and financial solutions.
Foreign currency exchange fluctuations can result in variances in the financial statement line items. Foreign currency exchange fluctuations resulted in decreases of $9 million and $18 million in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, respectively. Unless otherwise stated, all amounts discussed below are net of foreign currency exchange fluctuations.
Traditional Reinsurance
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 863 $ 880 $ (17) $ 2,573 $ 2,473 $ 100
Net investment income 89 73 16 256 216 40
Investment related gains (losses), net - - - 3 - 3
Other revenues 1 3 (2) 8 6 2
Total segment revenues 953 956 (3) 2,840 2,695 145
Adjusted benefits and expenses
Adjusted claims and other policy benefits 761 761 - 2,209 2,133 76
Future policy benefits remeasurement (gains) losses (28) (41) 13 (24) (67) 43
Market risk benefits remeasurement (gains) losses - - - - - -
Adjusted interest credited - - - - - -
Policy acquisition costs and other insurance expenses 39 43 (4) 111 117 (6)
Other operating expenses 62 55 7 171 164 7
Total adjusted benefits and expenses 834 818 16 2,467 2,347 120
Adjusted operating income before income taxes $ 119 $ 138 $ (19) $ 373 $ 348 $ 25
Key metrics
Life reinsurance in force $595.4 billion $546.1 billion
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ (16) $ (1) $ (16) $ (1)
Effect of actual variances from expected experience $ (12) $ (40) $ (8) $ (66)
Loss ratio (1)
84.9 % 81.8 % 84.9 % 83.5 %
Policy acquisition costs and other insurance expenses as a percentage of net premiums 4.5 % 4.9 % 4.3 % 4.7 %
Other operating expenses as a percentage of net premiums 7.2 % 6.3 % 6.6 % 6.6 %
(1)Includes adjusted claims and other policy benefits and future policy benefits remeasurement (gains) losses.
The decrease in adjusted operating income before income taxes for the three months ended September 30, 2026, was primarily due to a decrease in net premiums and a decrease in future policy benefits remeasurement gains, partially offset by an increase in net investment income. The increase in adjusted operating income before taxes for the nine months ended September 30, 2026, was primarily due to growth in traditional reinsurance business.
Three months ended September 30, 2026 compared to three months ended September 30, 2025
Segment revenues
•The decrease in segment revenues reflected a decrease in net premiums substantially offset by an increase in net investment income.
Adjusted benefits and expenses
•The increase in loss ratio was primarily due to unfavorable underwriting experience.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025
Segment revenues
•The increase in net premiums was primarily due to continued traditional reinsurance business growth.
•The segment added new life business production, measured by face amount of life reinsurance in force, of $74.3 billion and $41.5 billion during the nine months ended September 30, 2026 and 2025, respectively.
Adjusted benefits and expenses
•The increase in loss ratio was primarily due to unfavorable underwriting experience.
•During the three months ended September 30, 2026 and 2025, the Company completed its annual assumptions review resulting in net favorable assumptions updates totaling $16 million and $1 million, respectively, primarily due to updated mortality assumptions. See Note 4 - "Future Policy Benefits" for additional information.
Financial Solutions
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment revenues
Net premiums $ 237 $ 96 $ 141 $ 532 $ 325 $ 207
Net investment income 426 250 176 1,147 693 454
Investment related gains (losses), net 17 13 4 46 30 16
Other revenues - 6 (6) 25 12 13
Total segment revenues 680 365 315 1,750 1,060 690
Adjusted benefits and expenses
Adjusted claims and other policy benefits 318 135 183 714 438 276
Future policy benefits remeasurement (gains) losses 3 (1) 4 42 (6) 48
Market risk benefits remeasurement (gains) losses - - - - - -
Adjusted interest credited 170 107 63 464 284 180
Policy acquisition costs and other insurance expenses 85 42 43 216 105 111
Other operating expenses 12 11 1 37 32 5
Total adjusted benefits and expenses 588 294 294 1,473 853 620
Adjusted operating income before income taxes $ 92 $ 71 $ 21 $ 277 $ 207 $ 70
Key metrics
Future policy benefits remeasurement (gains) losses
Effect of changes in cash flow assumptions $ 4 $ - $ 4 $ -
Effect of actual variances from expected experience $ (1) $ (1) $ 38 $ (6)
The increases in adjusted operating income before income taxes for the three and nine months ended September 30, 2026, were due to higher net investment income and new business growth.
The invested asset base supporting asset-intensive transactions increased to $40.5 billion as of September 30, 2026, from $28.7 billion as of September 30, 2025. The increase in the asset base compared to September 30, 2025, was primarily due to approximately $7.1 billion from recently executed transactions and net organic growth of $4.7 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 $2.7 billion and $2.3 billion for the nine months ended September 30, 2026 and 2025, 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.
Segment revenues
•The increases in net premiums for the three and nine months ended September 30, 2026, were due to recently executed transactions and increased contributions from existing in force blocks.
•The increases in net investment income for the three and nine months ended September 30, 2026, were due to a growing asset base and favorable variable investment performance.
•Other revenues increased for the nine months ended September 30, 2026, due to higher surrender charges.
Adjusted benefits and expenses
•The increases in adjusted claims and other policy benefits for the three and nine months ended September 30, 2026, were due to the growth of asset-intensive business.
•The increases in future policy benefits remeasurement losses for the three and nine months ended September 30, 2026, were primarily due to a model implementation for an in-force block. Favorable results in adjusted claims and other policy benefits, driven by the release of accruals related to the same business block, more than offset this impact.
•Adjusted interest credited and policy acquisition costs and other insurance expenses increased for the three and nine months ended September 30, 2026, due to the growth of asset-intensive business.
Corporate and Other
Corporate and Other revenues primarily include investment income from unallocated invested assets and service fees. Corporate and Other expenses consist of the offset to capital charges allocated to the operating segments within the policy acquisition costs and other insurance income line item, unallocated overhead and executive costs, interest expense related to debt and service business expenses. Additionally, Corporate and Other includes results from the Company's FABNs issued prior to January 1, 2025. Effective January 1, 2025, newly issued FABN issuances are included in the U.S. Financial Solutions segment.
Three months ended September 30, Nine months ended September 30,
(dollars in millions) 2026 2025 2026 vs 2025 2026 2025 2026 vs 2025
Segment Revenues
Net premiums $ - $ - $ - $ - $ - $ -
Net investment income 196 151 45 527 446 81
Investment related gains (losses), net 1 1 - 4 7 (3)
Other revenues 33 29 4 100 52 48
Total segment revenues 230 181 49 631 505 126
Adjusted benefits and expenses
Adjusted claims and other policy benefits - - - - - -
Future policy benefits remeasurement (gains) losses - - - - - -
Adjusted interest credited 46 47 (1) 134 139 (5)
Policy acquisition costs and other insurance expenses (17) (15) (2) (54) (53) (1)
Other operating expenses 127 109 18 378 311 67
Interest expense 96 98 (2) 295 268 27
Total benefits and expenses 252 239 13 753 665 88
Adjusted operating income (loss) before income taxes $ (22) $ (58) $ 36 $ (122) $ (160) $ 38
The decrease in adjusted operating loss before income taxes for the three months ended September 30, 2026, was primarily due to an increase in net investment income, partially offset by an increase in other operating expenses. The decrease in adjusted operating loss before income taxes for the nine months ended September 30, 2026, was primarily due to increases in net investment income and other revenues, partially offset by increases in other operating expenses and interest expense.
Segment revenues
•The increases in net investment income for the three and nine months ended September 30, 2026, were primarily due to an increase in yield primarily due to an increase in variable investment income.
•The increase in other revenues for the nine months ended September 30, 2026, was primarily due to income earned on a note receivable.
Adjusted benefits and expenses
•The increases in other operating expenses for the three and nine months ended September 30, 2026, were primarily due to an increase in compensation expense.
•The increase in interest expense for the nine months ended September 30, 2026, was primarily due to an increase in outstanding debt and repurchase agreements.
Liquidity and Capital Resources
Overview
The Company believes that cash flows from the source of funds available to it will provide sufficient cash flows for the next twelve months and the foreseeable future thereafter to satisfy the current liquidity requirements of the Company under various scenarios that include the potential risk of early recapture of reinsurance treaties, market events and higher than expected claims. The Company performs periodic liquidity stress testing to ensure that its asset portfolio includes sufficient high quality liquid assets that could be utilized to bolster its liquidity position under stress scenarios. These assets could be utilized as collateral for secured borrowing transactions with various third parties or by selling the securities in the open market if needed. The Company's liquidity requirements have been and will continue to be funded through net cash flows from operations. However, in the event of significant unanticipated cash requirements beyond normal liquidity needs, the Company has multiple liquidity alternatives available based on market conditions and the amount and timing of the liquidity need. These alternatives include the sale of invested assets subject to market conditions, borrowings under committed credit facilities, secured borrowings, and if necessary, issuing long-term debt, preferred securities or common equity.
Current Market Environment
The Company's average investment yield, excluding spread related business, for the three months ended September 30, 2026, was 5.26%, 53 basis points above the same period in 2025. The average yield will vary from year to year depending on several variables, including the prevailing risk-free interest rate and credit spread environment, prepayment fees and make-whole premiums, changes in the mix of the underlying investments and cash and cash equivalents balances. Variable investment income from limited partnerships and real estate joint ventures will also vary from year to year and is highly dependent on the timing of dividends and distributions on certain investments, in addition to the sale of the underlying property in the case of real estate joint ventures. See additional discussion of investment yield under "Investments" below. Gross unrealized gains on fixed maturity securities available-for-sale decreased from $1.7 billion at December 31, 2025, to $464 million at September 30, 2026, and gross unrealized losses increased from $7.0 billion at December 31, 2025, to $13.6 billion at September 30, 2026.
The Company continues to be in a position to hold any investment security showing an unrealized loss until recovery, provided that it remains comfortable with the credit of the issuer. The Company does not rely on short-term funding or commercial paper and to date has experienced no liquidity pressure and does not anticipate such pressure in the foreseeable future.
The Company projects its reserves to be sufficient and does not expect to be required to take any actions to augment capital, even if interest rates remain at current levels for the next five years, assuming all other factors remain constant. To mitigate disintermediation risk, the Company purchased swaptions to protect it against a material increase in interest rates. While the Company has felt the pressures of sustained low interest rates, followed by significant increases in risk-free rates, and volatile equity markets, its business and results of operations are not overly sensitive to these risks. Mortality and morbidity risks continue to be the most significant risk for the Company. Although management believes that the Company's current capital base is adequate to support its business at current operating levels, it continues to monitor new business opportunities and any associated new capital needs that could arise from the changing financial landscape.
The Holding Company
RGA is an insurance holding company whose primary uses of liquidity include, but are not limited to, the immediate capital needs of its operating companies, dividends paid to its shareholders, repurchase of common stock and principal and interest payments on its indebtedness. The primary sources of RGA's liquidity include proceeds from its capital-raising efforts, interest income on undeployed corporate investments, interest income received on affiliated surplus notes with RGA Reinsurance, RGA Life and Annuity Insurance Company ("RGA Life and Annuity") and Rockwood Reinsurance Company ("Rockwood Re"), and dividends from operating subsidiaries. As the Company continues to operate its business and manage capital, RGA will continue to be dependent upon these sources of liquidity. The following tables present comparative information for RGA (dollars in millions):
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 2025
Interest and dividend income $ 503 $ 428 $ 1,054 $ 547
Interest expense 71 71 220 205
Capital contributions to subsidiaries 6 696 368 711
Issuance of unaffiliated debt - - 400 700
Repayment of unaffiliated debt 400 - 800 -
Dividends to shareholders 64 61 186 179
September 30, 2026 December 31, 2025
Cash and invested assets $ 1,054 $ 1,360
See Item 15, Schedule II - "Condensed Financial Information of the Registrant" in the 2025 Annual Report for additional financial information related to RGA.
The undistributed earnings of substantially all of the Company's foreign subsidiaries have been reinvested indefinitely in those non-U.S. operations, as described in Note 14 - "Income Tax" in the Notes to Consolidated Financial Statements in the 2025 Annual Report. As U.S. Tax Reform generally eliminates U.S. federal income taxes on dividends from foreign subsidiaries, the Company does not expect to incur material income taxes if these funds are repatriated.
RGA endeavors to maintain a capital structure that provides financial and operational flexibility to its subsidiaries, credit ratings that support its competitive position in the financial services marketplace, and shareholder returns. As part of the Company's capital deployment strategy, it has repurchased shares of RGA common stock and paid dividends to RGA shareholders, as authorized by the board of directors.
On January 29, 2026, RGA's board of directors authorized a share repurchase program for up to $500 million of RGA's outstanding common stock. The authorization was effective immediately and does not have an expiration date. During the nine
months ended September 30, 2026, the Company repurchased 765,739 shares of common stock under this program. As of September 30, 2026, the aggregate amount remaining under the Company's share repurchase authorization was approximately $325 million.
Repurchases will be made in accordance with applicable securities laws, through market transactions, block trades, privately negotiated transactions or other means, or a combination of these methods, with the timing and number of shares repurchased dependent on a variety of factors, including share price, corporate and regulatory requirements, and market and business conditions. Repurchases may be commenced or suspended from time to time without prior notice.
Details underlying dividend and share repurchase program activity were as follows (in millions, except share data):
Nine months ended September 30,
2026 2025
Dividends to shareholders $ 186 $ 179
Purchase of common stock (1)
175 75
Total amount paid to shareholders $ 361 $ 254
Number of common shares purchased (1)
765,739 406,337
Average price per share $ 228.54 $ 184.58
(1)Excludes shares utilized to execute and settle certain stock incentive awards.
In October 2026, RGA's board of directors declared a quarterly dividend of $0.98 per share. All future payments of dividends are at the discretion of RGA's board of directors and will depend on the Company's earnings, capital requirements, insurance regulatory conditions, operating conditions, and other such factors as the board of directors may deem relevant. The amount of dividends that RGA can pay will depend in part on the operations of its reinsurance subsidiaries. See Note 3 - "Equity" in the Notes to Condensed Consolidated Financial Statements for information on the Company's share repurchase program.
Debt
Certain of the Company's debt agreements contain financial covenant restrictions related to, among others, liens, the issuance and disposition of stock of restricted subsidiaries, minimum requirements of consolidated net worth, maximum ratios of debt to capitalization and change of control provisions. On March 13, 2023, the Company entered into a syndicated revolving credit facility with a five year term and an overall capacity of $850 million. As of September 30, 2026, the Company had no cash borrowings outstanding and no letters of credit issued under this facility. Under the terms of this facility, the Company is required to maintain a minimum consolidated net worth of $5.8 billion. Also, consolidated indebtedness, calculated as of the last day of each fiscal quarter, cannot exceed 35% of the sum of the Company's consolidated indebtedness plus adjusted RGA Inc.'s shareholders' equity. A material ongoing covenant default could require immediate payment of the amount due, including principal, under the Company's various debt agreements. Additionally, the Company's debt agreements contain cross-acceleration covenants, which would make outstanding borrowings immediately payable in the event of a material uncured covenant default under any of the agreements, including, but not limited to, non-payment of indebtedness when due for an amount in excess of the amounts set forth in those agreements, bankruptcy proceedings, or any other event that results in the acceleration of the maturity of indebtedness.
As of September 30, 2026 and December 31, 2025, the Company had $5.4 billion and $5.8 billion, respectively, in outstanding borrowings under its debt agreements and was in compliance with all covenants under those agreements. As of September 30, 2026 and December 31, 2025, the average interest rate on long-term debt outstanding was 5.49% and 5.33%, respectively. The ability of the Company to make debt principal and interest payments depends on the earnings and surplus of subsidiaries, investment earnings on undeployed capital proceeds, available liquidity at the holding company, and the Company's ability to raise additional funds.
The Company enters into derivative agreements with counterparties that reference either the Company's debt rating or its financial strength rating. If either rating is downgraded in the future, it could trigger certain terms in the Company's derivative agreements, which could negatively affect overall liquidity. For the majority of the Company's derivative agreements, there is a termination event should the long-term senior debt ratings drop below either BBB+ (S&P) or Baa1 (Moody's) or the financial strength ratings drop below either A- (S&P) or A3 (Moody's).
On March 3, 2026, the Company issued 6.375% fixed-rate reset subordinated debentures due 2056 with a face amount of $400 million and used the net proceeds for general corporate purposes. Capitalized issuance costs were $5 million.
On May 1, 2026, a notice of redemption was issued to the holders of all of the Company's outstanding $400 million aggregate principal amount 5.75% Fixed-to-Floating Rate Subordinated Debentures due 2056 (the "2056 Debentures") in accordance with the terms of the indenture governing the 2056 Debentures. The 2056 Debentures were redeemed in full on June 15, 2026, at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon.
The Company's $400 million 3.95% Senior Debentures due 2026 matured and were paid in full on September 15, 2026.
Based on the historic cash flows and the current financial results of the Company, management believes that RGA's cash flows will be sufficient to enable RGA to meet its obligations for at least the next twelve months.
Credit and Committed Facilities
The Company has obtained bank letters of credit in favor of various affiliated and unaffiliated insurance companies from which the Company assumes business. These letters of credit represent guarantees of performance under the reinsurance agreements and allow ceding companies to take statutory reserve credits. Certain of these letters of credit contain financial covenant restrictions similar to those described in the "Debt" discussion above. At September 30, 2026, there were approximately $295 million of outstanding bank letters of credit in favor of third parties. Additionally, in accordance with applicable regulations, the Company utilizes letters of credit to secure statutory reserve credits when it retrocedes business to its affiliated subsidiaries and support regulatory capital. The Company retrocedes business to its affiliates to help reduce the amount of regulatory capital required in certain jurisdictions, such as the U.S., Canada and U.K. The Company believes that the capital required to support the business retroceded to its affiliates reflects more realistic expectations than the original jurisdiction in which the business was written, where capital requirements are often considered to be quite conservative. As of September 30, 2026, $2.0 billion in letters of credit from various banks were outstanding, but undrawn, backing reinsurance between the various subsidiaries of the Company.
Cash Flows
The Company's principal cash inflows from its reinsurance operations include premiums and deposit funds received from ceding companies. The primary liquidity concerns with respect to these cash flows are early recapture of the reinsurance contract by the ceding company and lapses of annuity products reinsured by the Company. The Company's principal cash inflows from its invested assets result from investment income and the maturity and sales of invested assets. The primary liquidity concerns with respect to these cash inflows relates to the risk of default by debtors and interest rate volatility. The Company manages these risks very closely. See "Investments" below.
Additional sources of liquidity to meet unexpected cash outflows in excess of operating cash inflows and current cash and equivalents on hand includes the following:
•A revolving credit facility under which the Company had availability of $850 million as of September 30, 2026.
•$195 million of funds available through collateralized borrowings from the FHLB as of September 30, 2026.
•A 30-year facility agreement with a Delaware trust that gives the Company the right, from time to time, to issue up to $1.0 billion of its 6.722% senior notes due 2055 in exchange for a corresponding amount of U.S. Treasury securities held by the trust. The Company can redeem the 6.722% senior notes due 2055 at any time, in whole or in part, at a price equal to the greater of par or a make-whole redemption price. There have been no senior note issuances by the Company under this facility agreement.
In addition to these facilities, the Company's subsidiaries, RGA Reinsurance and RGA Americas Reinsurance Company, Ltd. ("RGA Americas"), maintain a $200 million committed credit facility to provide contingent capital to RGA Re and RGA Americas. As of September 30, 2026, the Company could have borrowed these additional amounts without violating any of its existing debt covenants.
The Company's principal cash outflows relate to the payment of claims liabilities, interest credited, operating expenses, income taxes, dividends to shareholders, purchases of treasury stock, and principal and interest under debt and other financing obligations. The Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance enterprises or reinsurers under excess coverage and coinsurance contracts. See Note 2 - "Significant Accounting Policies and Pronouncements" in the Notes to Consolidated Financial Statements in the 2025 Annual Report. The Company performs annual financial reviews of its retrocessionaires to evaluate financial stability and performance. The Company has never experienced a material default in connection with retrocession arrangements, nor has it experienced any difficulty in collecting claims recoverable from retrocessionaires; however, no assurance can be given as to the future performance of such retrocessionaires or the recoverability of future claims. The Company's management believes that its cash
and cash equivalents as well as its current sources of liquidity are adequate to meet its cash requirements for the next twelve months.
Summary of Primary Sources and Uses of Liquidity and Capital
The Company's primary sources and uses of liquidity and capital are for the nine months ended September 30, 2026 and 2025, respectively are summarized as follows (dollars in millions):
Nine months ended September 30,
2026 2025
Sources:
Net cash provided by operating activities $ 4,712 $ 3,239
Proceeds from long-term debt issuance, net 395 691
Treasury stock reissued 10 4
Change in cash collateral for derivative positions and other arrangements - 1,222
Change in deposit asset on reinsurance - 144
Net deposits to investment-type policies and contracts 6,740 5,047
Effect of exchange rate changes on cash - 71
Total sources 11,857 10,418
Uses:
Net cash used in investing activities 9,766 8,824
Dividends to shareholders 186 179
Principal payments of long-term debt 803 3
Purchase of treasury stock 228 113
Change in cash collateral for derivative positions and other arrangements 270 -
Change in deposit asset on reinsurance 114 -
Effect of exchange rate changes on cash 10 -
Total uses 11,377 9,119
Net change in cash and cash equivalents $ 480 $ 1,299
Cash Flows from Operations - The principal cash inflows from the Company's reinsurance activities come from premiums, investment and fee income, annuity considerations and deposit funds. The principal cash outflows relate to the liabilities associated with various life and health insurance, annuity and disability products, operating expenses, income tax payments and interest on outstanding debt obligations. The primary liquidity concern with respect to these cash flows is the risk of shortfalls in premiums and investment income, particularly in periods with abnormally high claims levels.
Cash Flows from Investments - The principal cash inflows from the Company's investment activities come from repayments of principal on invested assets, proceeds from maturities of invested assets, sales of invested assets and settlements of freestanding derivatives. The principal cash outflows relate to purchases of investments, issuances of policy loans and settlements of freestanding derivatives. The Company typically has a net cash outflow from investing activities because cash inflows from insurance operations are reinvested in accordance with its asset/liability management discipline to fund insurance liabilities. The Company closely monitors and manages these risks through its credit risk management process. The primary liquidity concerns with respect to these cash flows are the risk of default by debtors and market disruption, which could make it difficult for the Company to sell investments.
Financing Cash Flows - The principal cash inflows from the Company's financing activities come from issuances of RGA debt and equity securities, and deposit funds associated with universal life and other investment type policies and contracts. The principal cash outflows come from repayments of debt, payments of dividends to shareholders, purchases of treasury stock and withdrawals associated with universal life and other investment type policies and contracts. A primary liquidity concern with respect to these cash flows is the risk of early contractholder and policyholder withdrawal.
Contractual Obligations
There were no material changes in the Company's contractual obligations from those reported in the 2025 Annual Report, except for the following:
•The Company's contractual obligations associated with long-term debt, including interest, increased at September 30, 2026, due to the Company's issuance of $400 million in subordinated debentures on March 3, 2026. On June 15, 2026, the Company's outstanding $400 million aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Debentures due 2056 (the "2056 Debentures") were redeemed in full at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon. During the third quarter, the Company's $400 million 3.95% Senior Debentures due 2026 matured and were paid in full on September 15, 2026. See Note 16 - "Financing Activities" for further information.
Asset / Liability Management
The Company actively manages its cash and invested assets using an approach that is intended to balance quality, diversification, asset/liability matching, liquidity and investment return. The goals of the investment process are to optimize after tax, risk-adjusted investment income and after tax, risk-adjusted total return while managing the assets and liabilities on a cash flow and duration basis.
The Company has established target asset portfolios for its operating segments, which represent the investment strategies intended to profitably fund its liabilities within acceptable risk parameters. These strategies include objectives and limits for effective duration, yield curve sensitivity and convexity, liquidity, asset sector concentration and credit quality.
The Company's asset-intensive products are primarily supported by investments in fixed maturity securities reflected on the Company's balance sheet and under funds withheld arrangements with the ceding company. Investment guidelines are established to structure the investment portfolio based upon the type, duration and behavior of products in the liability portfolio so as to achieve targeted levels of profitability. The Company manages the asset-intensive business to provide a targeted spread between the interest rate earned on investments and the interest rate credited to the underlying interest-sensitive contract liabilities. The Company periodically reviews models projecting different interest rate scenarios and their effect on profitability. Certain of these asset-intensive agreements, primarily in the U.S. and Latin America Financial Solutions operating segment, are generally funded by fixed maturity securities that are withheld by the ceding company.
The Company's liquidity position (cash and cash equivalents and short-term investments) was $5.0 billion and $4.5 billion at September 30, 2026 and December 31, 2025, respectively. Liquidity needs are determined from valuation analyses conducted by operational units and are driven by product portfolios. Periodic evaluations of demand liabilities and short-term liquid assets are designed to adjust specific portfolios, as well as their durations and maturities, in response to anticipated liquidity needs.
See "Securities Borrowing, Lending and Repurchase/Reverse Repurchase Agreements" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for information related to the Company's securities borrowing, lending and repurchase/reverse repurchase programs. In addition to the Company's security agreements with third parties, certain RGA subsidiaries have entered into intercompany securities lending agreements to more efficiently source securities for lending to third parties and to provide for more efficient regulatory capital management.
The Company is a member of the FHLB and holds $64 million of FHLB common stock, which is included in other invested assets on the Company's condensed consolidated balance sheets. The Company has entered into funding agreements with the FHLB under guaranteed investment contracts whereby the Company has issued the funding agreements in exchange for cash and for which the FHLB has been granted a blanket lien on the Company's commercial and residential mortgage-backed securities and commercial mortgage loans used to collateralize the Company's obligations under the funding agreements. The Company maintains control over these pledged assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. The funding agreements and the related security agreements represented by this blanket lien provide that upon any event of default by the Company, the FHLB's recovery is limited to the amount of the Company's liability under the outstanding funding agreements. The amount of the Company's liability for the funding agreements with the FHLB was $1.2 billion and $1.3 billion at September 30, 2026 and December 31, 2025, respectively, which is included in interest-sensitive contract liabilities. The advances on these agreements are collateralized primarily by commercial and residential mortgage-backed securities, commercial mortgage loans, and U.S. Treasury and government agency securities. The amount of collateral exceeds the liability and is dependent on the type of assets collateralizing the guaranteed investment contracts.
Investments
Management of Investments
The Company's investment and derivative strategies involve matching the characteristics of its reinsurance products and other obligations. The Company seeks to closely approximate the interest rate sensitivity of the assets with estimated interest rate sensitivity of the reinsurance liabilities. The Company achieves its income objectives through strategic and tactical asset allocations, applying security and derivative strategies within asset/liability and disciplined risk management frameworks. Derivative strategies are employed within the Company's risk management framework to help manage duration, currency and other risks in assets and/or liabilities and to replicate the credit characteristics of certain assets.
The Company's portfolio management groups work with the Enterprise Risk Management function to develop the investment policies for the assets of the Company's domestic and international investment portfolios. All investments held by the Company, directly or in a funds withheld at interest reinsurance arrangement, are monitored for conformance with the Company's stated investment policy limits as well as any limits prescribed by the applicable jurisdiction's insurance laws and regulations. See Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for additional information regarding the Company's investments.
Portfolio Composition
The Company had total cash and invested assets of $142.4 billion and $134.6 billion as of September 30, 2026 and December 31, 2025, respectively, as illustrated below (dollars in millions):
September 30, 2026 % of Total December 31, 2025 % of Total
Fixed maturity securities available-for-sale - public $ 93,896 65.9 % $ 88,993 66.2 %
Fixed maturity securities available-for-sale - private 13,861 9.7 12,776 9.5
Equity securities 239 0.2 311 0.2
Mortgage loans 12,162 8.5 11,104 8.2
Policy loans 3,372 2.4 3,541 2.6
Funds withheld at interest 7,870 5.5 8,149 6.1
Limited partnerships and real estate joint ventures 4,427 3.1 3,747 2.8
Short-term investments 393 0.3 346 0.3
Other invested assets 1,547 1.1 1,514 1.1
Cash and cash equivalents 4,648 3.3 4,168 3.0
Total cash and invested assets $ 142,415 100.0 % $ 134,649 100.0 %
Investment Yield - Excluding Spread Related Business
The following table presents consolidated average invested assets at amortized cost, net investment income, investment yield, variable investment income ("VII") and investment yield excluding VII, which can vary significantly from period to period (dollars in millions). The table excludes spread related business. Spread related business is primarily associated with contracts on which the Company earns an interest rate spread between assets and liabilities. To varying degrees, fluctuations in the yield on other spread related business are generally subject to corresponding adjustments to the interest credited on the liabilities.
Three months ended September 30, Nine months ended September 30,
2026 2025 Increase /
(Decrease) 		2026 2025 Increase /
(Decrease)
Average invested assets at amortized cost $ 50,379 $ 47,662 $ 2,717 $ 49,400 $ 45,091 $ 4,309
Net investment income $ 650 $ 553 $ 97 $ 1,905 $ 1,650 $ 255
Annualized investment yield (ratio of net investment income to average invested assets at amortized cost) 5.26 % 4.73 % 53 bps 5.17 % 4.91 % 26 bps
VII (included in net investment income) $ 55 $ - $ 55 $ 144 $ 53 $ 91
Annualized investment yield excluding VII (ratio of net investment income, excluding VII, to average invested assets, excluding assets with only VII, at amortized cost) 4.96 % 4.92 % 4 bps 4.92 % 4.95 % (3) bps
Investment yield increased for the three months ended September 30, 2026, in comparison to the same period in the prior year, primarily due to increased variable income from real estate joint venture sales and limited partnerships. Investment yield increased for the nine months ended September 30, 2026, in comparison to the same period in the prior year, primarily due to increased variable income from real estate joint venture sales, limited partnerships and make-whole premiums, slightly offset by lower yield on cash and cash equivalents.
Fixed Maturity Securities Available-for-Sale
See "Fixed Maturity Securities Available-for-Sale" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for tables that provide the amortized cost, allowance for credit losses, unrealized gains and losses and estimated fair value of these securities by type as of September 30, 2026 and December 31, 2025.
Important factors in the selection of investments include diversification, quality, yield, call protection and total rate of return potential. The relative importance of these factors is determined by market conditions and the underlying reinsurance liability and existing portfolio characteristics. As of September 30, 2026 and December 31, 2025, approximately 94.7% and 94.3%, respectively, of total fixed maturity securities were investment grade.
The Company owns floating rate securities that represented approximately 8.4% and 8.9% of total fixed maturity securities as of September 30, 2026 and December 31, 2025, respectively. These investments have a higher degree of income variability than the other fixed income holdings in the portfolio due to fluctuations in interest payments. The Company holds floating rate investments to enhance asset management strategies and match certain interest-sensitive contract liabilities.
The largest asset class in which fixed maturity securities were invested was corporate securities, which represented approximately 69.4% and 68.5% of total fixed maturity securities as of September 30, 2026 and December 31, 2025, respectively. See "Corporate Fixed Maturity Securities" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for tables showing the major sector types, which comprise the corporate fixed maturity holdings as of September 30, 2026 and December 31, 2025.
As of September 30, 2026 and December 31, 2025, the Company's investments in Canadian government securities represented 4.3% and 5.1%, respectively, of total fixed maturity securities. These assets are primarily high quality, long duration provincial strip bonds, the valuation of which is closely linked to the interest rate curve. These assets are longer in duration and held primarily for asset/liability management to meet Canadian regulatory requirements.
As of September 30, 2026 and December 31, 2025, the Company's investments in Japanese government securities represented 6.2% and 4.6%, respectively, of total fixed maturity securities. These assets are primarily long duration government bonds matching the liability profile of the Company's Japanese business.
The Company references rating agency designations in some of its investments disclosures. These designations are based on the ratings from nationally recognized statistical rating organizations, primarily Moody's, S&P and Fitch. Structured securities held by the Company's insurance subsidiaries that maintain the NAIC statutory basis of accounting utilize the NAIC rating methodology. The NAIC assigns designations to publicly traded as well as privately placed securities. The designations assigned by the NAIC range from class 1 to class 6, with designations in classes 1 and 2 generally considered investment grade (BBB or higher rating agency designation). NAIC designations in classes 3 through 6 are generally considered below investment grade (BB or lower rating agency designation). If no rating is available from a rating agency or the NAIC, then an internally developed rating is used.
The quality of the Company's available-for-sale fixed maturity securities portfolio, as measured at fair value and by the percentage of fixed maturity securities invested in various ratings categories, relative to the entire available-for-sale fixed maturity securities portfolio, as of September 30, 2026 and December 31, 2025 was as follows (dollars in millions):
September 30, 2026 December 31, 2025
NAIC
Designation 		Rating Agency
Designation 		Amortized Cost Estimated
Fair Value 		% of Total Amortized Cost Estimated
Fair Value 		% of Total
1 AAA/AA/A $ 79,903 $ 69,917 64.9 % $ 69,007 $ 64,571 63.4 %
2 BBB 35,174 32,081 29.8 32,330 31,423 30.9
3 BB 2,680 2,579 2.4 4,815 4,823 4.8
4 B 2,654 2,626 2.4 714 632 0.6
5 CCC and lower 405 299 0.3 194 141 0.1
6 In or near default 30 19 - 42 26 -
Unrated Unrated 280 236 0.2 162 153 0.2
Total $ 121,126 $ 107,757 100.0 % $ 107,264 $ 101,769 100.0 %
The Company's fixed maturity portfolio includes structured securities. The following table shows the types of structured securities the Company held as of September 30, 2026 and December 31, 2025 (dollars in millions):
September 30, 2026 December 31, 2025
Amortized Cost Estimated
Fair Value 		% of Total Amortized Cost Estimated
Fair Value 		% of Total
ABS:
Collateralized loan obligations ("CLOs") $ 2,288 $ 2,279 18.5 % $ 2,486 $ 2,481 22.4 %
ABS, excluding CLOs 5,905 5,636 45.8 4,992 4,888 44.0
Total ABS 8,193 7,915 64.3 7,478 7,369 66.4
CMBS 2,609 2,518 20.4 2,179 2,162 19.5
RMBS:
Agency 334 284 2.3 359 324 2.9
Non-agency 1,696 1,598 13.0 1,256 1,245 11.2
Total RMBS 2,030 1,882 15.3 1,615 1,569 14.1
Total $ 12,832 $ 12,315 100.0 % $ 11,272 $ 11,100 100.0 %
The Company's ABS portfolio primarily consists of CLOs, rated note feeders and NAV loans. The principal risks in holding ABS are structural, credit, capital market and interest rate risks. Structural risks include the securities' cash flow priority in the capital structure and the inherent prepayment sensitivity of the underlying collateral. Credit risks include the adequacy and ability to realize proceeds from the collateral. Credit risks are mitigated by credit enhancements that include excess spread, over-collateralization and subordination. Capital market risks include general level of interest rates and the liquidity for these securities in the marketplace.
The Company's CMBS portfolio primarily consists of large pool securitizations that are diverse by property type, borrower and geographic dispersion. The principal risks in holding CMBS are structural and credit risks. Structural risks include the securities' cash flow priority in the capital structure and the inherent prepayment sensitivity of the underlying collateral. Credit risks include the adequacy and ability to realize proceeds from the collateral. The Company focuses on investment grade rated
tranches that provide additional credit support beyond the equity protection in the underlying loans. These assets are viewed as an attractive alternative to other fixed income asset classes.
The Company's RMBS portfolio includes agency-issued pass-through securities and collateralized mortgage obligations. Agency-issued pass-through securities are guaranteed or otherwise supported by the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, or the Government National Mortgage Association. The principal risks in holding RMBS are prepayment and extension risks, which will affect the timing of when cash will be received and are dependent on the level of mortgage interest rates. Prepayment risk is the unexpected increase in principal payments from the expected, primarily as a result of owner refinancing. Extension risk relates to the unexpected slowdown in principal payments from the expected. In addition, non-agency RMBS face credit risk should the borrower be unable to pay the contractual interest or principal on their obligation. The Company monitors its mortgage-backed securities to mitigate exposure to the cash flow uncertainties associated with these risks.
As of September 30, 2026 and December 31, 2025, the Company classified approximately 13.6% and 13.5%, respectively, of its fixed maturity securities in the Level 3 category. Refer to Note 12 - "Fair Value of Assets and Liabilities" in the Notes to Condensed Consolidated Financial Statements for additional information. These securities primarily consist of private placement corporate and asset-backed securities.
See "Securities Lending and Repurchase/Reverse Repurchase Agreements" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for information related to the Company's securities lending and repurchase/reverse repurchase agreements.
Mortgage Loans
The Company's mortgage loan portfolio consists of U.S., Canada and U.K. based investments primarily in retail locations, light industrial properties, and commercial offices. The mortgage loan portfolio is diversified by geographic region and property type as discussed further under "Mortgage Loans" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements. Mortgage loans in the Company's portfolio range in size up to $57 million, with an average mortgage loan investment as of September 30, 2026, of $7 million.
As of September 30, 2026 and December 31, 2025, the Company's recorded investments in mortgage loans, gross of unamortized deferred loan origination fees and expenses, discounts and allowance for credit losses, were distributed geographically as follows (dollars in millions):
September 30, 2026 December 31, 2025
Recorded
Investment 		% of Total Recorded
Investment 		% of Total
U.S. Region:
West $ 4,481 36.3 % $ 4,119 36.6 %
South 4,287 34.7 3,689 32.7
Midwest 1,876 15.2 1,677 14.9
Northeast 790 6.4 793 7.0
Subtotal - U.S.
11,434 92.6 10,278 91.2
Canada 726 5.9 758 6.7
United Kingdom 184 1.5 232 2.1
Total $ 12,344 100.0 % $ 11,268 100.0 %
See "Allowance for Credit Losses and Impairments" in Note 2 - "Significant Accounting Policies and Pronouncements" of the 2025 Annual Report and "Mortgage Loans" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for information regarding the Company's policy for allowance for credit losses on mortgage loans.
Allowance for Credit Losses and Impairments
The table below summarizes investment related gains (losses), net related to allowances for credit losses and impairments for the three and nine months ended September 30, 2026 and 2025 (dollars in millions):
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 2025
Change in allowance for credit losses on fixed maturity securities $ 30 $ (28) $ (6) $ (63)
Impairments on fixed maturity securities (45) (1) (46) (3)
Change in mortgage loan allowance for credit losses (15) (6) (25) (20)
Limited partnership and real estate joint ventures impairment losses (42) (1) (71) (22)
Other change in allowance for credit losses and impairments 1 1 (2) (3)
Investment related gains (losses) related to credit losses and impairments $ (71) $ (35) $ (150) $ (111)
The Company's determination of whether a decline in value necessitates the recording of an allowance for credit losses includes analyzing whether the issuer is current on its contractual payments, evaluating whether it is probable that the Company will be able to collect all amounts due according to the contractual terms of the security and analyzing the overall ability of the Company to recover the amortized cost of the investment. See "Allowance for Credit Losses and Impairments" in Note 2 - "Significant Accounting Policies and Pronouncements" of the Company's 2025 Annual Report for additional information.
As of September 30, 2026 and December 31, 2025, the Company had $13.6 billion and $7.0 billion, respectively, of gross unrealized losses related to its fixed maturity securities. The Company monitors its fixed maturity securities to determine impairments in value and evaluates factors such as financial condition of the issuer, payment performance, compliance with covenants, general market and industry sector conditions, current intent and ability to hold securities, and various other subjective factors. Based on management's judgment, an allowance for credit losses in the amount that fair value is less than the amortized cost is recorded for securities determined to have expected credit losses.
See "Unrealized Losses for Fixed Maturity Securities Available-for-Sale" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for tables that present the estimated fair value and gross unrealized losses for securities that have estimated fair values below amortized cost by class and grade, as well as the length of time the related estimated fair value has remained below amortized cost as of September 30, 2026 and December 31, 2025.
Funds Withheld at Interest
For reinsurance agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis, assets equal to the net statutory reserves are withheld by the ceding company and are legally owned by the ceding company. The Company reflects these assets on its balance sheet as funds withheld at interest. Interest accrues on the total funds withheld at rates defined by the terms of the applicable reinsurance agreement. The Company is subject to the investment performance on such assets, although the Company does not directly control them because such assets are legally owned by the ceding company. To mitigate this risk, investment guidelines are commonly set in the reinsurance agreements which restrict the ceding company's investment activity with respect to such assets. The Company monitors the ceding company's compliance with these contractual restrictions. These assets are primarily fixed maturity investment securities and pose investment risks similar to the fixed maturity securities owned by the Company. Ceding companies with funds withheld at interest had an average financial strength rating of "A" as of September 30, 2026 and December 31, 2025. Certain ceding companies maintain segregated portfolios for the benefit of the Company.
Other Invested Assets
Other invested assets primarily include lifetime mortgages, derivative contracts, FHLB common stock and real estate held for investment. See "Other Invested Assets" in Note 10 - "Investments" in the Notes to Condensed Consolidated Financial Statements for a table that presents the carrying value of the Company's other invested assets by type as of September 30, 2026 and December 31, 2025.
The Company utilizes derivative financial instruments to protect the Company against possible changes in the fair value of its investment portfolio as a result of interest rate changes, to hedge against risk of changes in the purchase price of securities, to hedge liabilities associated with the reinsurance of variable annuities with guaranteed living benefits and to manage the portfolio's effective yield, maturity and duration. In addition, the Company utilizes derivative financial instruments to reduce the risk associated with fluctuations in foreign currency exchange rates. The Company uses exchange-traded, centrally cleared, and customized over-the-counter derivative financial instruments.
See Note 11 - "Derivative Instruments" in the Notes to Condensed Consolidated Financial Statements for a table that presents the notional amounts and fair value of investment related derivative instruments held as of September 30, 2026 and December 31, 2025.
The Company may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. Generally, the credit exposure of the Company's derivative contracts is limited to the fair value and accrued interest of non-collateralized derivative contracts in an asset position at the reporting date. As of September 30, 2026, the Company had credit exposure of $15 million.
The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. As exchange-traded futures are affected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties. See Note 11 - "Derivative Instruments" in the Notes to Condensed Consolidated Financial Statements for more information regarding the Company's derivative instruments.
The Company holds $1,296 million and $1,197 million of beneficial interest in lifetime mortgages in the U.K., net of allowance for credit losses, as of September 30, 2026 and December 31, 2025, respectively. Investment income includes $18 million and $15 million in interest income earned on lifetime mortgages for the three months ended September 30, 2026 and 2025, respectively, and $52 million and $42 million in interest income earned on lifetime mortgages for the nine months ended September 30, 2026 and 2025, respectively. Lifetime mortgages represent loans provided to individuals 55 years of age and older secured by the borrower's residence. Lifetime mortgages are comparable to a home equity loan by allowing the borrower to utilize the equity in their home as collateral. The amount of the loan is dependent on the appraised value of the home at the time of origination, the borrower's age and interest rate. Unlike a home equity loan, no payment of principal or interest is required until the death of the borrower or sale of the home. Lifetime mortgages may also be either fully funded at origination, or the borrower can request periodic funding similar to a line of credit. Lifetime mortgages are subject to risks, including market, credit, interest rate, liquidity, operational, reputational and legal risks.
New Accounting Standards
Changes to the general accounting principles are established by the Financial Accounting Standards Board ("FASB") in the form of accounting standards updates to the FASB Accounting Standards CodificationTM.
See Note 17 - "New Accounting Standards" in the Notes to Condensed Consolidated Financial Statements for information on new accounting pronouncements and their impact, if any, on the Company's results of operations and financial position.
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