Reinsurance Group of America, Incorporated's RGA Financial Solutions and longevity businesses have significant growth potential, with second-quarter 2026 results suggesting that these businesses are becoming increasingly important contributors to earnings. Growth is supported by insurers’ need for capital-efficient balance-sheet solutions, rising pension-risk-transfer demand and RGA’s ability to combine reinsurance expertise with asset-management capabilities.
RGA’s Financial Solutions business spans asset-intensive, longevity and other capital-efficient transactions. In the second quarter of 2026, adjusted operating income before taxes increased strongly across several regions, including the United States and Latin America, EMEA, Asia Pacific and Canada. For the first half of 2026, Financial Solutions’ adjusted operating income increased 42% year over year to $746 million, highlighting the growing contribution from these businesses.
The U.S. business benefited particularly from RGA’s 2025 transaction with Equitable Holdings, while EMEA benefited from new business and Asia Pacific from new business growth and strong variable investment income. These transactions can also provide RGA with long-duration assets that support investment income while generating fee and risk-management opportunities.
Longevity reinsurance represents another important growth avenue. Insurers and pension providers increasingly seek to transfer longevity risk to reinsurers to manage capital requirements and reduce exposure to longer-than-expected lifespans. RGA’s 2025 annual report highlighted strong momentum in the United Kingdom across longevity and asset-intensive solutions, while identifying continental Europe as a highly insured but relatively under-reinsured market where capital-efficient solutions remain an opportunity.
Financial Solutions and longevity could therefore become increasingly important sources of sustainable growth as traditional life-reinsurance markets mature. These businesses expand RGA’s addressable market beyond conventional life reinsurance, create opportunities to deploy capital into long-duration assets and allow the company to benefit from insurers’ growing demand for capital, balance-sheet management and risk-transfer solutions. The combination of new-business growth, longevity demand and asset-intensive transactions gives RGA a potentially substantial runway for diversifying earnings and expanding its role across the broader insurance risk-transfer market.
What About Its Peers?
Lincoln National Corporation’s LNC Annuities, Life Insurance and Retirement Plan Services businesses remain key earnings drivers, making the sustainability of their growth a major investor focus. Investors will want to know whether the shift toward spread-based annuity products can support more predictable earnings, whether improving mortality and strong life insurance sales can sustain the Life Insurance segment’s recovery, and whether Retirement Plan Services can reverse elevated net outflows while growing account balances. They will also closely monitor the impact of interest rates, equity-market performance and investment income on earnings, along with LNC’s ability to strengthen capital and balance growth investments with shareholder returns.
Brighthouse Financial, Inc.’s BHF Annuities and Life Insurance businesses remain central to its earnings profile, making the sustainability of growth a key investor focus. In the second quarter of 2026, Annuity sales rose 11% sequentially to $2.4 billion, driven by record Shield Level Annuity sales of $2.1 billion, while Annuities adjusted earnings increased to $349 million from $324 million in the first quarter. In Life Insurance, sales increased 22% sequentially to $39 million, while the segment’s adjusted loss narrowed to $4 million from $6 million. Investors will therefore focus on whether improving sales and underwriting can return the Life business to consistent profitability, while also monitoring investment income, capital strength and the impact of the pending acquisition.
RGA’s Price Performance
Shares of RGA have gained 31.5% in the past year, outperforming the industry.
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RGA’s Undervaluation
The stock is undervalued compared with its industry. Its forward price-to-book value of 1.16X is lower than the industry average of 2.33X. It carries a Value Score of A.
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Estimate Movement for RGA
The Zacks Consensus Estimate for RGA’s third-quarter and fourth-quarter 2026 EPS has moved up 1.9% and 1.2%, respectively, in the past 30 days. The same for full-year 2026 and 2027 EPS has moved up 5% and 0.7%, respectively, in the past 30 days.
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The consensus estimate for RGA’s 2026 EPS and revenues indicates a year-over-year increase, while that of 2027 revenues indicates a year-over-year rise.
RGA stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).