美国再保险集团（RGA）：首席执行官看到上行潜力，市盈率表明市场存在担忧

USA | Life Insurance Reinsurance Group of America CEO Sees Levers for Upside, RGA's P/E Says theMarket Sees Cause for Concern We recently hosted investor meetings with RGA's CEO Tony Cheng. RGA'scurrent P/E is ~8x, consistent with its P/E at the time of its 6/2020 equity raise,despite $4B of capital deployment and increases to its targets since then. In ourmeetings, RGA noted multiple levers that could drive growth and returns aboveits targets. As RGA executes against this plan, we expect its P/E to re-rate closerto its ~10x historical average or higher. We reiterate our Buy. Setting the stage: RGA's ~8x P/E is consistent with its level at the time of its 6/2020 equity raise,which occurred amid COVID uncertainty. Since then, RGA has deployed ~$4B of capital, upped itsfinancial targets and delivered strong results. To us, this disconnect is due, in part, to concerns over:1) if RGA needs to take on more risk to hit its new targets, 2) access to "growth capital" and 3)competition, which RGA addressed in our meetings. Levers for upside: While Mr. Cheng's biggest priority is maintaining business momentum / CreationRe, given recent success here, his focus is currently on: 1) balance sheet optimization, 2) operationalefficiency and 3) talent development. RGA feels it can hit its 8-10% EPS growth and 13-15% ROEtargets by just maintaining current momentum. If it gets these other 3 levers right, it could seeupside. B/S optimization: Of the 3, we feel optimization is likely the most significant and near term. Perits CEO, RGA has a historical pattern of "over prudence". One example is its low allocation to lessliquid / private assets, which is currently ~20% vs a comparable allocation to less liquid liabilitiesof ~50%. Assuming privates go to 35%, PTI could increase by $140M, or 7%. Another example istapping latent capital (e.g., value of in-force (VIF) credits, which would have minimal cost). Lastly,any update to mortality assumptions (e.g., GLP-1), which RGA is currently reviewing, could unlockmeaningful economic value / capital, given $100B of PV of future mortality claims. Why do MFC LTC?: RGA cited: 1) the block was newer vintage LTC, 2) future business opportunitieswith MFC, 3) the deal came with non-LTC business (i.e., structured settlements) and 4) the LTCblock's size was modest. RGA has no intention of becoming an LTC reinsurer writ large. How can RGA improve EQH's PS ROE?: RGA cited: 1) it revalued the business at pricing, reflectingEQH's known historical mortality experience, 2) low incremental costs vs what EQH was incurring,3) asset repositioning, 4) a capital efficient reinsurance structure and 5) use of its own mortalityassumptions. RGA is not concerned with EQH's weak 2Q:25 mortality, given it re-underwrote thebusiness at pricing with current experience and the deal does not have a retroactive feature. Bottom line: RGA's ~8x P/E is well below its historical average of ~10x and doesn't reflect itsmultiple levers of upside. As RGA meets / exceeds its targets, we expect the stock to re-rate. Thatsaid, RGA investors will need to get used to its new approach. Suneet Kamath, CFA * | Equity Analyst(212) 778-8602 | skamath@jefferies.comNathan Satterfield * | Equity Associate+1 (212) 778-8954 | nsatterfield@jefferies.com The Long View: Reinsurance Group of America Investment Thesis / Where We Differ We rate RGA Buy. We continue to have a positive outlook on the lifereinsurance market (i.e. vs. primary life), given its market concentration/structure, barriers to entry, and solid global growth profile. We expect RGA'sstrong top line growth to continue to be driven by Asia, bio-metric risktransfer, and PRT. The company has ample deployable capital to capitalize onprofitable new business growth. Downside Scenario,$169, -15% Upside Scenario,$322, +63% Base Case,$284, +43% •Slightly unfavorable US mortality•Reversion to mid-to-high single-digit organicpremium growth•Regular capital deployment,including blockacquisitions•2026E EPS of $26.50 * 10.7x Target P/E = $284Price Target •Favorablemortalityexperiencebenefitsunderwriting earnings•Faster reversion to high single-digit organicpremium growth•Above-expected share repurchases / capitaldeployment•Sentiment improves due to the favorableconditions above•2026E EPS of $28.10 * 11.5x Target P/E = $322Price Target •Worse-than-projectedmortalitypressuresunderwriting earnings•Premium growth remains somewhat subduednear term•Below-expected share repurchases/capitaldeployment•Sentiment deteriorates due to the unfavorableconditions above•2026E EPS of $22.50 * 7.5x Target P/E = $169Price Target Sustainability Matters Catalysts Top Material Issue(s): 1) Business Model Resilience:The U.S. Life Insurance industry represents asignificant economic power with over $8 trillion in assets. It will be crucial for the industry to incorporateESG into its asset/investment manager selection process while also minimizing risk.2) Diversity,Inclusion, & Employee Engagement:Fo