What Happened?
Shares of global life reinsurance provider Reinsurance Group of America (NYSE: RGA) fell 5% in the afternoon session after the company reported underwhelming earnings.
The company's revenue grew 8.7% year over year to $6.20 billion, and its adjusted earnings per share of $6.37 beat consensus estimates. However, investors appeared to focus on weaker underlying trends. A key concern was the 2.5% year-over-year decline in net premiums earned to $4.28 billion, a core metric that also missed analyst forecasts. This drop suggested potential weakness in its main insurance operations. Furthermore, while book value per share saw strong growth in the quarter, analysts project it will shrink by 12.3% over the next 12 months, raising concerns about future shareholder value. These negative signals likely overshadowed the headline beats, leading to the stock's decline.
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What Is The Market Telling Us
Reinsurance Group of America’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Reinsurance Group of America is down 15.1% since the beginning of the year, and at $182.80 per share, it is trading 21.2% below its 52-week high of $231.95 from November 2024. Investors who bought $1,000 worth of Reinsurance Group of America’s shares 5 years ago would now be looking at an investment worth $1,783.
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