On Mar 5, 2014, Reinsurance Group of America Inc. (RGA) touched a 52-week high of $77.61 per share. The momentum in the stock was driven by strong fourth-quarter earnings, rating affirmation by A.M. Best Co. as well as a new deal signed with Synodex. The 1-year return from the came in at 34.9%, much ahead of the S&P’s return of 23.4%.
Reinsurance Group made a strong exit to the year 2013 by reporting fourth-quarter operating income of $2.17 per share, which significantly exceeded the Zacks Consensus Estimate by 10.7%. Total revenue of $2.74 billion increased 1.5% year over year and was slightly ahead of the Zacks Consensus Estimate of $2.73 billion.
Reinsurance Group showed a sturdy top and bottom-line performance across all operating segments. The company has a well developed reinsurance franchise in the global reinsurance market.
The company is reflecting healthy signs of retaining this momentum going into 2014 as well, given its expanding international business along with a developing U.S based asset sensitive business.
Led by the company’s stable and growing business, .A.M. Best affirmed the investment grade rating of the parent as well as its subsidiaries. Such an action testifies the company’s robust operating model.
Last month, Reinsurance Group announced a strategic partnership with Synodex, a subsidiary of Innodata Inc. (INOD), to use Synodex’s data computing to assess life insurance risk and investigate claims. This deal will take Reinsurance Group a step further toward making accurate decisions, have greater control over the underwriting process and superior claims investigation. This will result in writing more business through improved operational efficiency and by saving on underwriting time.
Reinsurance Group’s stable risk-adjusted capitalization, favorable debt servicing capabilities, consistent cashflow and moderate financial leverage ratios provide inherent strength.
Reinsurance Group of America carries a Zacks Rank #2 (Buy). Some other insurers with the same rank worth considering include Protective Life Corp. (PL) and Lincoln National Corp. (LNC).
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment