Good day and welcome to the Reinsurance Group of America Q1 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Todd Larson, Senior Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you. Welcome to RGA’s first quarter 2024 conference call. I am joined on the call this morning with Tony Cheng, RGA’s President and Chief Executive Officer; Leslie Barbi, Chief Investment Officer; and Jonathan Porter, Chief Risk Officer. A quick reminder before we get started regarding forward-looking information and non-GAAP financial measures. Some of our comments or answers to your questions may contain forward-looking statements. Actual results could differ materially from expected results. Please refer to the earnings release we issued yesterday for a list of important factors that could cause actual results to differ materially from expected results. Additionally, during the course of this call, the information we provide may include non-GAAP financial measures. Please see our earnings release, earnings presentation and quarterly financial supplement, all of which are posted on our website for a discussion of these terms and reconciliations to GAAP measures. Throughout the call, we will be referencing slides from the earnings presentation which, again, is posted on our website. And now I’ll turn the call over to Tony for his comments.

Good morning, everyone, and thank you for joining our call. Last night, we reported adjusted operating earnings of $6.02 per share, which is our highest ever quarterly result. Our adjusted operating return on equity for the past 12 months was 14.8%, exceeding the intermediate targets we previously shared. The record earnings and attractive ROE is not solely from one or two areas of the company. All four geographic regions and both the Traditional and GFS businesses met or exceeded our run rates. In particular, our Traditional results stood out driven by strong underlying experience notably in the U.S. It was a quarter where many things came together and follows an excellent 2023 for RGA. I am very pleased that we just learned that RGA was rated number one for the 13th consecutive year on NMG Consulting’s Global all respondents Business Capability Index. This is based on 2023 feedback from the life and health insurance companies around the world. In addition to the outstanding earnings and external recognition, our new business activity was very strong. We deployed a record amount of capital into in-force transactions of $737 million. We have always shared a preference to redeploy our excess capital back into the business for both financial and strategic reasons. Successful transactions lead to favorable economics over the long run and can create repeat opportunities from these clients. In addition to the record quantity of new business, we are delighted with the quality of the new business as we continue to see a high percentage of transactions centered around exclusive arrangements with some of the leading life insurers in the world. These transactions are more innovative in nature and create greater value for RGA and its partners. When we see excellent earnings, ROE, new business performance across many parts of the enterprise and external recognition of our capabilities, we know our strategy is working. We know our brand and capabilities are strong, and I know our people and culture are second to none. Combining this incredibly strong foundation with macro tailwinds, we are highly confident in delivering long-term attractive results and shareholder returns. I have previously outlined four areas of notable growth in the company. Let me discuss some of the activities and successes in each of these areas, starting with our longevity and PRT business. Longevity not only diversifies our mortality exposure, but also provides favorable opportunities given the increased funding levels of pension funds around the world. In the U.S. PRT market, we announced deals with both of our partners, including our largest PRT transaction to date, and we remain optimistic about our prospects going forward. In the UK longevity space, where RGA is a market leader, we built on a very successful 2023 with additional transactions this quarter. The pipeline remains active in both the U.S. and the UK, and we expect 2024 to be another exciting year. Our second area of notable growth is the asset-intensive business in Asia. During the quarter, we executed a number of reported transactions in the region. As announced, we closed an approximately $4.7 billion deal in Japan. Our success shows the powerful position RGA has in many of our markets around the world. This is a client that we have shared a strong business relationship with for over a decade. This is an innovative solution being the first sizable longevity transaction in Japan, leveraging our strengths in the UK and the U.S. This transaction demonstrates our integrated approach with our investment and business teams working hand-in-hand to arrive at the right asset solution tailored for these liabilities, strong local relationships, coupled with worldwide expertise further enhanced by the collaboration amongst our teams is how we win at RGA. In our third area of notable growth, which is our Asia Traditional segment, we continue to see very positive results. Our focus is to package product development with capital and underwriting solutions to fuel our clients’ growth and success. In January, we adopted a product from Japan and launched with a major insurer in Korea. Given the success of this product launch, we expect multiple clients to launch with RGA in 2024. In China, we closed an in-force transaction, and we expect this success to lead to further opportunities in this space in the near future. Finally, in Hong Kong, which is our largest Asian market, we continue to be excited by the increased volume of Mainland Chinese visitors buying life insurance. Throughout the past few years, we have increased our share of key products and therefore, well positioned to benefit. And finally, in our U.S. Traditional segment, which is our home market and the largest reinsurance market in the world, we continue to strategically build our offerings in the underwriting space to act as our key differentiator. In the quarter, we launched a partnership to extend our digital underwriting offerings. This complements our full-service facultative and supplemental underwriting programs. It is this ability to offer the full breadth of the underwriting spectrum that positions RGA so well in this market. In addition, we see strong momentum and in-force activity as clients continue derisking their balance sheets which we believe is a leading indicator for future new business for RGA. Beyond these four areas of growth, we also continue to have tremendous success in other markets. You will have seen our announcements on the USD 4.4 billion transaction in Canada as well as our EUR 900 million asset transaction in Belgium. Both of these transactions create long-term value for the organization and is due to the tremendous work and effort of our local and global teams. You can see that we have won a lot of meaningful transactions this quarter. But what you have not seen are the transactions we have looked at and have chosen not to pursue. We remain disciplined and execute only when the risk return trade-off meets our requirements. This risk management focus is as important as any other part of our culture in delivering long-term sustainable performance. As proud as I am about all these accomplishments, I am even more excited about the future. My job as CEO is to make sure that we continue to execute today, but also make sure we are in an even better position tomorrow. It’s a true privilege to lead this organization and I am clearly confident in our ability to continue to deliver growth at attractive returns to our shareholders for many years to come. I will now turn it over to Todd to discuss the financial results in more detail.

Thanks, Tony. RGA reported pretax adjusted operating income of $516 million for the quarter and adjusted operating earnings per share of $6.02. For the trailing 12 months, adjusted operating return on equity was 14.8%. We are very pleased with the strong results as well as momentum in new business activity and in-force transactions. Reported premiums were up 58.8% for the quarter. This increase includes $1.9 million – or $1.9 billion from a single premium U.S. PRT transaction in our Financial Solutions business. Our Traditional business premium growth was a healthy 8.2% for the quarter on a constant currency basis. We are pleased with the premium growth that there are good results across all regions. The effective tax rate for the quarter was 22.4% on pretax adjusted operating income, slightly below the expected range, primarily due to tax benefits received in foreign jurisdictions. Before turning to the quarterly segment results, I would like to point out the addition of Slide 7 in our earnings presentation that displays the current period claims experience and the related financial statement impacts. For the period, underlying biometric experience, which includes experience on our mortality, morbidity and longevity risks was favorable by $138 million, of which $58 million was recognized in current quarter income. The remaining favorable claims experience will be recognized in income over the life of the underlying business. As we’ve discussed, under LDTI, the financial impacts from experience can vary based on the product, duration of the business and whether experience occurs in capped, uncapped or forward contracts. The U.S. and Latin America Traditional segment results reflected favorable individual life experience as well as favorable health and group results. The individual life favorable experience was broad-based and reflected a lower frequency of large claims. The U.S. Financial Solutions results were slightly below expectations due to lower variable investment income. As you’ll notice, starting this quarter, we have combined the U.S. Asset Intensive and U.S. Capital Solutions results into a single segment. This is consistent with our management of these businesses and the presentation for other regions. Canada Traditional results reflected favorable experience in both group and individual life businesses. The Financial Solutions business reflects longevity experience that was in line with expectations. In the Europe, Middle East and Africa segment, the Traditional business results reflected favorable timing impacts due to the earnings recognition on an annual premium treaty and positive contributions from new business. EMEA’s Financial Solutions business results were in line with expectations. Turning to our Asia-Pacific Traditional business, results reflected favorable experience across the region. The Asia Pacific Financial Solutions business results reflected favorable overall experience. The Corporate and Other segment reported a pretax adjusted operating loss of $38 million, in line with the expected quarterly average run rate. Moving on to investments on Slides 9 through 12. The non-spread portfolio yield for the quarter was 4.7%, including the impact of lower variable investment income. For non-spread business, our new money rate was 6.12%, still well above the portfolio yield, but lower than the prior quarter, primarily reflecting lower average yields available in the market. Credit impairments were modest, and we believe the portfolio is well positioned for the current environment. Related to capital management, as shown on Slides 13 and 14, our capital and liquidity positions remained strong, and we ended the quarter with excess capital of approximately $600 million. We have an active and balanced approach to capital management over time, and as we have communicated in the past, we are comfortable bringing down excess capital given the right opportunities. This was the case in the first quarter as we deployed a record $737 million of capital into in-force transactions. I will note that we do expect to retrocede a share of this to Ruby Re, which is expected to increase available capital by approximately $150 million. We remain well capitalized with access to multiple forms of capital, including debt capacity, retrocessions to Ruby Re and other forms of alternative capital. We expect to remain active in deploying capital into attractive growth opportunities while balancing returning excess capital to shareholders through dividends and share repurchases over time. During the quarter, we continued on track record of increasing book value per share. As shown on Slide 15, our book value per share, excluding AOCI and impacts from B36 embedded derivatives, increased to $146.96, which represents a compounded annual growth rate of 10.6% since the beginning of 2021. As we’ve discussed, the first quarter was a very strong start to the year for RGA. The primary drivers of the results were favorable experience across the globe, strong premium growth, emerging earnings power from active capital deployment in prior periods and the impact of higher interest rates. Overall, we continue to see very good opportunities across our geographies and business lines and are well positioned to execute on our strategic plan. Our business continues to demonstrate its resilience and underlying earnings power. We are very excited about the future and expect to deliver attractive returns to our shareholders. This concludes our prepared remarks. We would now like to open it up for questions.

[Operator Instructions] The first question comes from John Barnidge with Piper Sandler. Please go ahead.

Good morning. Thank you for the opportunity. In your comments, you talked about transactions not considered and talked about exclusive transactions. Can you maybe expound on that a little bit? How much of growth is coming from exclusive? And with others talking about a more competitive environment for certain parts of the institutional market, should exclusive continue to grow as I know you like creation REIT? Thank you.

Thanks, John. Exclusives have been part of our DNA really since the start of the organization. We used to call it entrepreneurial spirit, which is very much flowing through our veins right now. To answer your question, we’ve set higher goals on the exclusive proportion of business relative to last year and were definitely – there are internal metrics that we’re definitely performing extremely well against. And just to give you a bit more flavor, exclusives sound difficult, right? But that’s the power of RGA. That’s the power of our platform, is our ability to have that global team, to have that ability to take risks around the world and assess the right risk. So oftentimes, exclusives will come from either a new type of risk that we add to a product, or a new underwriting type of underwriting, or a new reinsurance structure. Exclusives can – RGA is quite uniquely positioned because we take both the asset and the biometric risk. A lot of reinsurers and competitors focus on the asset side, some focus on the biometric. Us being really the only U.S.-based global life and health reinsurer allows us to take both the asset and the biometric side. And that’s what we call our sweet spot. So we remain as bullish as ever in terms of the proportion of exclusives that we’re getting. It’s very much a North Star for us and an aspirational culture for us. And to me, that flywheel effect is starting to permeate throughout the whole organization and we’re relatively early stages of seeing the impact of that change.

Thank you for that. My follow-up question, I know there was record deployment of capital into in-force, and I think you said $150 million improvement in excess capital as that ceded. But how should we be thinking about buybacks within the framework of the capital allocation? Is it more of a timing with that ceding? Or can you talk about that a little bit? Thank you.

Hi, John, it’s Todd. Yes. No, we – as you know, we manage capital over time. And as Tony mentioned, we do like to deploy capital back into the business where we like the transaction, the risk return profile. We’ve maintained a pretty steady dividend over time. And we’ve always balanced it out with share repurchases when we didn’t see an active pipeline. As we’ve already discussed, we had a record deployment of capital in the transaction in the first quarter. And the pipeline continues to look pretty healthy in the transactions that we really like.

The next question comes from Bob Huang with Morgan Stanley. Please go ahead.

Hi, good morning. First is on your B36 derivative, and actually, not – so first one is really just the difference between net income and operating income, just to broadly think about the below the line overall. I understand that a lot of that came from central risk transfer deals this quarter because of the one-time impact. But as you think about future PRT deals, as you think about becoming more optimistic in that area, are there ways to further minimize the impact of the below the line from that particular line or no?

Yes. So specific to the PRT, it’s – that upfront loss, if you want to call it that, is – it’s really as a result of LDTI adoption and accounting because we have to discount the liabilities at a lower rate than what the investment yield is just the way the accounting standard is written. We certainly are looking at ways to see if we can address that somehow. But unfortunately, right now, we do see that upfront loss in net income. But from an operating income perspective, we’ll amortize it in over time with how the earnings emerge.

Alright. Thanks. Second one is really on your biometrics. Obviously, definitely a lot of tailwind and even potentially more tailwind coming up from biometrics. But can you maybe give us a little bit more details in terms of how you think about the potentials of the biometrics going forward and other potential risks there as well, either a specific geography where you think you can take more advantage of the biometrics? Or are there any regulatory risks that we should be aware of going forward?

Yes. Maybe I’ll start, and then I’ll hand it over to Jonathan to get into more specifics. I mentioned in my comments the many tailwinds we have. And I’ll sort of just share with you at a company level, just some of them. One is the interest rates that are higher than historic. One is some of the changing capital regulations that are creating opportunities around the world. But to answer your question on the biometric, the fact that there is still major underinsurance of the population around the world, which gets filled up over time as GDP and incomes grow as well as continued medical technology advances. So I’ll hand it over to Jonathan to – elaborating more on the biometric side.

Yes. Thanks, Tony. And I agree with you. I think we are seeing widespread opportunities around the world. So being specialists in all of the biometric risks really, so mortality, morbidity and longevity, gives us the flexibility to pursue the best opportunities globally. And then just to pick up on what Tony mentioned about technological advances and things. I think we remain encouraged by what we’re seeing in emerging data relative to weight loss drugs, as an example, GLP-1 type drugs. We think that, that could lead to measurable improvements in both mortality and morbidity over time. And it’s not just limited to that from a technology perspective. So, diagnostic tools like liquid biopsies for cancer, AI genetic editing and advances in protein activity as well in medical science. I think they’re all things that are just examples of things that we see that could be a tailwind for mortality going forward. And given our risk exposure and our weight to mortality overall, I think that would – that bodes well for the organization.

The next question comes from Jimmy Bhullar with JPMorgan. Please go ahead.

Hey, good morning. So first, just a question for Jonathan. If we look at industry or population that’s – it seems like based on CDC data that they’re still fairly elevated – improved from COVID times, but still elevated versus pre-COVID, but it seems like your results have actually been pretty good. So what is it that you’re seeing in your business that’s different than the general population trends?

Yes. Thanks for the question, Jimmy. And you’re right. I mean, what we see in the CDC data is that excess mortality is still elevated. I think it’s a single – mid-single-digit percentages in 2023 when you look at the actual experience in the population. I mean, as the excess mortality starts to come down, which is the trend definitely over the last couple of years, it starts to get more difficult to map that directly to between population and an insured book of business, so the differences are the absolute level of excess mortality is lower. What we saw this quarter, in particular, in the U.S. was favorable large claims experience, which, as you know, from prior quarters can be volatile period-over-period. So we run the – we benefited from favorable large claims experience this quarter. I’d say our expectations have not changed from when we reviewed our assumptions in Q3 of last year. We still expect some level of excess mortality for the intermediate term, which is reflected in our reserve assumptions, but we do expect that to decline over the next several years.

And then maybe for Tony, if there are improvements in life expectancy and mortality, you obviously would be a big beneficiary given that you’ve got a lot more exposure to mortality versus longevity. But it doesn’t seem like companies are pricing the longevity business and pension business based on expected improvements in mortality. And obviously, they’re not – it’s not a given that, that would happen as well. But how are you pricing your longevity business? Are you baking in the cushion for potential better life expectancy because if you were, then you’d have a hard time being competitive in the market or are you okay pricing based on the actual data given that you’ve got more exposure to mortality anyway?

Thank you, Jimmy, very much for the question. Look, first key point is the way we set our mortality and longevity assumptions are very consistent, right? I mean at the end of the day, they’re two sides of the same coin. They both form a mortality. So whatever we do on the mortality side, we’ll do on the longevity side. I would say we’re spending a lot of energy, as Jonathan shared, analyzing the data, but also doing a lot of medical R&D to get a stronger sense of appreciation of what could happen due to the medical advances. So – and obviously, any medical advances that we believe will occur and practical, once again, as you shared, would be net very good for RGA, given we are still way more materially longer on mortality and longevity.

One point maybe I would add on, Jimmy, is that our mortality average age – or mortality block average age is lower or younger than the longevity business. So the longevity block is – average age is higher or older. So there’s less room for the improvement to take effect, if you will.

Yes. Maybe further to add to that. To Todd’s point, there is also some socioeconomic differences. So the mortality block tends to be higher socioeconomics, obviously, the first to be able to afford these new medical advances in the drugs.

The next question comes from Joel Hurwitz with Dowling & Partners. Please go ahead.

Hey, good morning. So last quarter, you guys provided updated financial targets and earnings outlook, and you since followed it up with this record quarter of in-force transactions. I guess how much deployment did you factor into those targets? And was most of this actively known and factored into those earnings and growth outlooks? Are we looking at some solid upside to what you provided?

Yes, this is Todd. Yes, we did factor in deployment in the transactions into the intermediate financial targets that we provided back last quarter. I would say we’re off to a little bit faster start than we had anticipated. A lot of transactions that we had been working on came our way this quarter. So there is definitely some built into those projections, but we’re running a little bit – or intermediate targets, but we’re – I said, we got a fast start on to that.

Okay. And then, Todd, can you just talk about how to think about the earnings emergence from all these transactions? Like how long does it typically take for you guys to redeploy the assets and whatnot?

Yes. So overall, in the aggregate, we’re pricing to our targeted returns. So we’ll see that – those margins come in over time at our expected levels. But probably, depending on the transaction, it can take a year, maybe 2 years to ramp up to get to that – the level of overall return, as you mentioned, we do some asset repositioning early on, and there can be some other financial reporting impacts as well. But overall, we should be reaching a good level within a couple of years.

The next question comes from Wes Carmichael with Autonomous Research. Please go ahead.

Hey, good morning, thanks for the question. You talked about some of the capital relief from the Ruby Re retro session that’s planned. Should we continue to think about Ruby Re being effectively kind of a quota share for 50% of U.S. asset intensive? I know now that’s I think within U.S. Financial Solutions, but is there any change to the thinking there?

No. Yes. So for qualifying business, which is the U.S. Asset Intensive business, yes, I would think about it as a quota share of 50% or even up to 70% of new transactions that come in that are U.S. Asset Intensive, up to the capacity that Ruby Re has, which will probably be from an equity capital perspective, $450 million to $500 million or so.

Got it. Thanks, Todd. And then thanks for Slide 7, and I just had a question to clarify that. The favorable claim experience that wasn’t recognized in the period, is that recognized on a straight-line basis, basically evenly every quarter? Or is it more closer to the period, which declines over time?

It will come in over time of the underlying duration of the business, if you will. It will all depend on the net premium ratio and how that impacts the release of [indiscernible] over time.

Yes. And just maybe Todd, to add on to when we look at the weighted average duration of our business, our traditional business, in our GFS business, it’s probably in that 10 to 15-year range on average, just to give you a sense of the period over which those earnings would emerge.

The next question comes from Suneet Kamath with Jefferies. Please go ahead.

Thanks. Tony, I wanted to circle back to something you talked about in terms of the deals that you were looking at, but that you didn’t end up doing. I don’t expect you to give specifics, but just some color around what caused you guys to kind of walk away? Was it the liability profile or the pricing? And to the extent you can comment, were those deals eventually executed in the market?

Thanks for the question. Yes. Look, really, it’s more a general statement that we – it’s one thing that’s so embedded in our culture to have that discipline of making sure the risk return trade-off is right. So at times, there could be a liability is not perfectly fine. It’s just a question of – we pride ourselves on the ability to be able to price most liability types. And then the question is, is it the right thing to do for our shareholders. But I want to add on top, often these – transactions transact or oftentimes they don’t or oftentimes, clients have to change the way they do things. So if I point you towards just a few years ago, we had a spate of large longevity wins in the Netherlands, which sort of seemed like an overnight success, but that was an area where we had been pricing transactions probably for a number of years until once again, the risk return trade-off played out. And there’s other numerous examples of that.

Got it. And then just relatedly, long-term care is an area that I think historically you have been reluctant to pursue. Just wanted to get your current thoughts, obviously, we saw a transaction late last year, rates are higher. Does that change your appetite for that line of business?

Yes. I think definitely, firstly, our current book of business is the newer generations of long-term care. We believe it’s performed very, very well and continues to do so. However, once again, we pride ourselves on being the liability experts of the world in the life and space, which long-term care is one type of risk. And we will look at that type of risk and we will be selective and we will apply discipline. And I wouldn’t say it’s the top of our priority list. There are just so many opportunities for us to apply ourselves capital given the numerous headwinds that I – numerous tailwinds that I communicated earlier.

The next question comes from Ryan Krueger with KBW. Please go ahead.

Hey. Good morning. The – so recognizing that you just raised your ROE target to 12% to 14%, but I think if I take the results for the last few quarters and adjust for the actual to expected biometric results that you have provided, it looks like you are running closer to a 14% to 15% ROE. So, just is – I guess just wanted to give some more perspective on do you think you are kind of running more towards the higher end of that 12% to 14% or above at this point?

Hey Ryan, it’s Todd. I will start off with that. Yes, we have been performing quite well. Things – the work – quality and the biometric experience has been performing well. We have had some other positive impacts as well. We just recently put out 12% to 14%. Clearly, we are not ready to adjust that at this point, but we are glad to see that we are hitting that high end of the range.

Got it. And then Tony, could you talk more about the Japan opportunity? It seems like things are really starting to open up there, both for you and some of your competitors in terms of in-force transactions in Japan.

Yes. No, thanks for the question. We love Japan as a market, both on the traditional and the GFS side. You will – probably, your question centers more around the GFS side. We believe we were one of the pioneers in that market on the asset intensive side, probably the first transaction, just off the top of my head, probably 7 years, 8 years ago, and incredibly well positioned, given our local brand there, right. And the transaction we won was completed, and we were very delighted to win that transaction given the relationship we have with them given the size of the transaction. I raised the comment about being the – one of the pioneers and in many of the Asian markets, this is a case where if you look back 10 years, maybe even 20 years ago, we were the only one saying these things. And when competition comes in, it often validates or verifies to the whole market that these things are effective and efficient ways of managing capital or asset risk and so on. So, there is increased competition there. We feel very much, obviously, given Q1 that we are doing very well. We can appreciate some of the reasons given our – gosh, we started there in 1996, so nearly 30-year experience there. There were other transactions, which I won’t go into detail in Japan that we executed in Q1 that were strategic in nature also. So, we are very positive about that area of our business.

The next question comes from Nick Annitto with Wells Fargo. Please go ahead.

Hey. Thanks. Good morning. I am on for Elyse. Both of my questions center more towards Ruby Re. The first being, I guess should we think of Ruby Re and any subsequent sidecars raised as replacing any growth capital that RGA would have to raise on its own?

That’s right. I think you sort of stop – we look at overall opportunities in the market from a business perspective, and something like the alternative capital or committed capital provided by a vehicle like Ruby Re helps us with the overall capital need for the growth of that business as well as hopefully leverage up the capital that we apply to the transactions, leverage those returns up over time and also give us confidence that we have got the capital to go after some of these larger transactions.

Got it. That’s helpful. And then I guess as a follow-up, I think you guys had said that the PRT in the quarter didn’t go into Ruby Re. What was the reason for that? And should we be thinking about any sort of like impacts or reasons why there should be asset intensive business that doesn’t go into Ruby Re in the future?

Let’s just bring it back to – when we set up Ruby Re, we define what subject business would go into Ruby Re automatically subject to certain conditions. And the subject business is the U.S. asset and intensive business at this point.

The next question comes from Tom Gallagher with Evercore. Please go ahead.

Good morning. A few follow-ups on that similar theme. The – just want to understand what – of the deals that were publicly announced, there were several in Q1, how many of those showed up this quarter in that $737 million of in-force transactions have deployed capital into that? Are there a bunch more that – of those that didn’t close that will show up in the deployed capital in 2Q? Can you just give a sense for what the expectation should be based on what you have announced, but maybe not yet closed heading into 2Q? Thanks.

Yes. Hi Tom. Yes. So, all the announced transactions, except for the Canadian transaction, were in the $737 million capital deployment number in the first quarter.

And Tom, to add to your second comment on deals, we haven’t closed. All I could say there is the pipeline is incredibly active across the globe in all our businesses. So, we don’t sort of speculate on which deals we will be able to close. But as Todd mentioned, we spent so much energy obviously on the front end of our business, but absolutely on the capital management side and finding alternate sources of capital. So, we are very happy with our capital levels and believe we have plenty of capital to fund future growth.

Got it. And then, Tony, suffice to say, the 933 you did last year, you probably end up exceeding that, I am guessing, just based on the Canadian deal plus the – if you book a few more that are in the pipeline, is that – would you say that’s a fair assessment?

I think yes, that would be the expectation.

Thanks. And just from a – I just want to understand, I have your thought process behind funding all of that, or potentially funding the growth. The – you have Ruby Re, obviously, and it sounds like not much has gone into that or there is a lot of capacity there potentially to – as a source of capital. But then is there anything else we should be thinking about? Are you looking to do other fund-raising other sidecar capital on international or otherwise?

Yes. So, for Ruby Re, so far as we announced, I guess it was in December last year, we put what we call seed blocks in there, some existing blocks in the retro into Ruby Re late last year. Just due to the timing process and so on, nothing so far this year, but we will be retroing some more business in there as the year goes on. And then as far as other fund-raising, as I mentioned in my comments, we do have some debt capacity at the Holdco at some of the operating company levels. As you have seen in the past, we have issued some other alternative forms of capital. We did some surplus notes back in 2021 and 2023. We have done some embedded value securitizations over the years. The most recent one in 2003, which is pretty nice, it helps us bring forward some capital and also demonstrates the value of the business that we have on our books. And we can – as we have done in the past, we can also look at some strategic retro sessions where it makes sense as well.

Yes. And Tom, I mean yes, just to add to all of that, I mean that’s why it takes the energy and the passion to find the right source of capital that meets the underlying risk return trade-off of the deal and just maximize capital efficiency for our shareholders. So – but we are very active in it. And as Todd said, there is multiple opportunities and sources that over the years, we have built up those options, and we will obviously not hesitate to deploy those options as needed.

The next question comes from Mike Ward with Citi. Please go ahead.

Thanks guys. Good morning. Just hoping you could discuss the sort of the competitive landscape for whether it’s new business in PRT or Financial Solutions? Just kind of thinking how are you competing when you are sitting down with potential partners and there is competitors out there that might have things like bigger sort of Bermuda subsidiaries or more aggressive investment strategies. Clearly, you are winning new business and doing it very well. Just curious if you can help us think through this.

Yes. No. Thanks for the question. And once again, it just comes down to the breadth of our platform, the geography, the number of different types of risk types we can – we have available to take. The client base, the probably hundreds of clients we have over the globe where we have very close and intimate partnerships. So, we are really – the way we compete and as you mentioned, obviously, we are doing okay given the first quarter and last year, but we compete by not competing, right. We are really – as I have mentioned earlier, and I won’t go into all that detail again. We are really seeking those exclusivities. And we find when you do seek those exclusivities, you either, one, get the exclusivities. At times, maybe they have to call another reinsurer in to be part of it, but you are going to be in good shape. So, it’s really leveraging off all those capabilities. You may wonder, gee, why the huge deal flow over the last year and a bit. I would say there is probably multiple reasons. But really, RGA’s edge has always been around customer focus around serving our clients, and innovating. And those things are kind of harder to do over Zoom. But once – obviously, the environment changed and we were out there being able to leverage off one of our core strengths, you will start to see some of the success that comes from that.

Got it. Thanks Tony. That was all I have.

The next question comes from Wes Carmichael with Autonomous Research. Please go ahead.

Hey. Thanks for taking the follow-up. Just one quick one on Ruby Re, is there a good rule of thumb to think about the leverage there? I think Todd, you said that there is $450 million or $500 million of equity capacity there. Is there – can you lever that 15x? I am just trying to get a sense for the size of liabilities that might fit there? Is it $6 billion, $7.5 billion or is it something north of that?

To end on the underlying business and so on, I am not clear if you are asking from a liability perspective or…

I guess where I am going is I just wanted to figure out, if you do a bunch of big PRT deals, how much do you think you could possibly use that sidecar for?

Yes. I think for the current capacity, I am trying to think in my head, probably 15x is not far off.

Okay. That’s helpful. Thanks.

The next question comes from Tom Gallagher with Evercore. Please go ahead.

Thanks. Just a follow-up on the biometric slide, the – so the extra profit of $80 million for 1Q ‘24 that are getting deferred, when I think about GAAP versus your statutory cash flow, would you say most of that would be coming through in statutory, meaning not getting deferred the way it is under the new GAAP? And if so, are we potentially going to see a period where your GAAP earnings or your free cash flow, I should say, end up being like a very high percentage of your GAAP earnings as a result of that?

Yes. So, yes, depending on the – I guess the experience is favorable or unfavorable and what type of cohorts that falls under for LDTI, some of it – for GAAP basis will be deferred, where for regulatory purposes or statutory, most of that would come through like a down, old GAAP would come through currently.

Yes. And just to add on, Todd, to that, I mean, maybe it’s obvious, but clearly, there is also other material differences between GAAP and statutory accounting. So, there would be other drivers other than just the claims experience.

Yes. That was another thing I was wondering because you strengthened reserves under LDTI. You did not strengthen reserves under statutory. So, there is a different basis to measure the A to A, I guess, is the way I have thought about it. So, that might be an offset. Is that a fair way to think about it?

Yes. I mean I guess when you think about the reserves that would be released on death or claim, you are right, there could be a difference there, both plus or minus, right. I mean it depends on the – as Todd mentioned, there is – the basis is quite different. So, I don’t have a rule of thumb or a number I can point you to, but there would definitely be differences between the two.

Okay. Thanks.

This concludes our question-and-answer session. I would like to turn the conference back over to Tony Cheng for any closing remarks.

Thank you for your questions and your continued interest in RGA. This was a very strong quarter to start the year and a record in many ways, further demonstrating the substantial earning power in our business. We remain very well positioned to capitalize on the many growth opportunities ahead, and we are confident in our ability to continue to deliver attractive returns to our shareholders. I look forward to seeing you all once again in June during our Investor Day in New York City. This concludes our first quarter call. Thank you very much.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.