Zacks Investment Research downgraded shares of Reinsurance Group of America Inc. (RGA) from NEUTRAL to UNDERPERFORM on September 20, 2013, with a target price of $60.00.
We are downgrading our recommendation on the shares of Reinsurance Group to Underperform from Neutral following second quarter earnings release. The company's operating loss in the second quarter was disappointing compared with the Zacks Consensus earnings estimate as well as the year ago results. Results suffered due to high claims liability in the company's Australia business. Headwinds such as reliance on retrocession, increased retention, compliance with Solvency II requirements in the European region and underperforming Australia business remain a concern. Also foreign exchange exposure imparts earnings volatility. Nevertheless, a stable balance sheet, stable franchise and continued focus to enhance shareholder value are some of the positives.
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