Global life reinsurance provider Reinsurance Group of America (NYSE: RGA) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 9.4% year on year to $5.60 billion. Its non-GAAP profit of $4.72 per share was 15% below analysts’ consensus estimates.
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Reinsurance Group of America (RGA) Q2 CY2025 Highlights:
- Net Premiums Earned: $4.15 billion vs analyst estimates of $4.30 billion (5.9% year-on-year growth, 3.6% miss)
- Revenue: $5.60 billion vs analyst estimates of $5.62 billion (9.4% year-on-year growth, in line)
- Pre-Tax Profit Margin: 6.1% (flat year on year)
- Adjusted EPS: $4.72 vs analyst expectations of $5.55 (15% miss)
- Market Capitalization: $12.72 billion
Tony Cheng, President and Chief Executive Officer, commented, “After a very strong first quarter, the second quarter operating results were below expectations, primarily reflecting claims volatility in our U.S. Individual Life business. However, we continue to execute successfully on our strategy, maintaining very good momentum overall and benefiting from the earnings diversity that comes from our global platform. New business in the quarter remained strong, and our Creation Re strategy continues to perform above expectations."
Company Overview
Operating behind the scenes of the insurance industry since 1973, Reinsurance Group of America (NYSE: RGA) provides life and health reinsurance services to insurance companies, helping them manage risk and meet regulatory requirements.
Revenue Growth
Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third.
Luckily, Reinsurance Group of America’s revenue grew at a solid 9% compounded annual growth rate over the last five years. Its growth beat the average insurance company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Reinsurance Group of America’s annualized revenue growth of 13.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Reinsurance Group of America grew its revenue by 9.4% year on year, and its $5.60 billion of revenue was in line with Wall Street’s estimates.
Net premiums earned made up 78% of the company’s total revenue during the last five years, meaning insurance operations are Reinsurance Group of America’s largest source of revenue.
Markets consistently prioritize net premiums earned growth over investment and fee income, recognizing its superior quality as a core indicator of the company’s underwriting success and market penetration.
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Book Value Per Share (BVPS)
Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.
We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.
Reinsurance Group of America’s BVPS was flat over the last five years. However, BVPS growth has accelerated recently, growing by 24.4% annually over the last two years from $117.88 to $182.37 per share.
Over the next 12 months, Consensus estimates call for Reinsurance Group of America’s BVPS to grow by 1.4% to $163.45, inadequate growth rate.
Key Takeaways from Reinsurance Group of America’s Q2 Results
We were impressed by how significantly Reinsurance Group of America blew past analysts’ book value per share expectations this quarter. On the other hand, its net premiums earned and EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $192.45 immediately following the results.
Reinsurance Group of America underperformed this quarter, but does that create an opportunity to invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
