Reinsurance Group Of America Reports 17 Percent Gain In Operating Earnings For Fourth Quarter

January 28, 1998

ST. LOUIS, January 29, 1998 – Reinsurance Group of America, Incorporated (NYSE:RGA) reported a fourth quarter operating income increase of 17 percent, to $22.5 million, or $0.88 per share, from $19.1 million, or $0.75 per share, the year before, reflecting double-digit gains in net premium, net investment income, and total revenue. Fourth quarter earnings, including realized capital gains and losses, increased 21 percent, to $0.88 per share from $0.73 in the prior year.

Fourth quarter net premiums increased 20 percent, to $230.6 million, from $192.3 million in 1996. Net investment income increased 35 percent, to $54.0 million, from $40.0 million. Total revenues increased 35 percent, to $317.8 million.

A. Greig Woodring, president and chief executive officer, remarked, "We are pleased with our fourth quarter results, which represent a continuation of the positive momentum of the first nine months of 1997. We experienced strong core earnings from our U.S. and Canadian life segments. We continue to believe that opportunities for significant growth exist in the North American marketplace. This quarter’s strong performance can be attributed in part to growing activity in our financial and non-traditional reinsurance operations. The net result for the quarter, considering all operating segments, exceeded our original expectations."

Commenting on the company’s operations outside of North America, Woodring said, "We continue to be encouraged by our prospects in international markets, where we’ve begun to establish our presence as a life reinsurer. The turmoil in Asia has had little effect on our business due to our newness in the region; in fact, we believe that the economic situation may actually present us with opportunities during the coming months. While future business levels are impossible to predict, we don’t anticipate the need to make significant changes to our strategy for those markets.

"We continue to build our Latin American operations and see increasing premium levels from the region, particularly in annuity sales by our direct writing company in Chile. Our direct writing subsidiary in Argentina posted a respectable level of new premium; however, bottom line results for the Latin American segment fell below expectations because of an unfavorable level of group life claims.

"In contrast to the other business segments, results from most of our accident and health divisions again fell short of expectations and posted another loss for the year. Based on our lack of progress with this segment, we have placed our accident and health line into runoff and will cease marketing these services. This will allow us to focus our resources on growing our life reinsurance business. We have set aside a reserve to handle runoff claims experience and have written off all intangible assets associated with this line of business."

For the year, RGA reported operating earnings of $64.8 million, or $2.53 per share, compared with $54.6 million, or $2.15 per share, in 1996. These results exclude the $10.4 million after-tax, nonoperating accident and health pool charge taken in the first quarter of 1997. Earnings for the year, including realized capital gains and losses and nonoperating charges, totaled $2.13 per share, compared to $2.17 per share in 1996.

For the year, net premiums rose 24 percent to $835.5 million and revenues increased 29 percent to $1.1 billion. Investment income totaled $188.3 million, a 38 percent increase over 1996 results.

Commenting on the company’s performance for the year, Woodring said, "1997 has been a good year for the company, with encouraging signs of growth in both traditional and new life markets. We continue to position the company to better meet our clients’ needs and have re-directed our resources to better support our global expansion in life reinsurance markets. We’ve expanded our operations to include a local presence in Malaysia as a joint venture partner in that country’s first life reinsurance company. We’ve continued to leverage knowledge and expertise across the organization, supplemented by our recent strategic alliance with TBOi, a UK-based financial services distribution consulting firm."

The board of directors declared a regular quarterly dividend of $0.06 per share, payable February 27, 1998, to shareholders of record as of February 6, 1998.

Reinsurance Group of America, Incorporated, through its subsidiaries, RGA Reinsurance Company and RGA Life Reinsurance Company of Canada, is among the largest providers of life reinsurance in North America. In addition to its North American operations, Reinsurance Group of America, Incorporated has subsidiary companies or branch offices in Argentina, Australia, Barbados, Bermuda, Chile, Hong Kong, Japan and the United Kingdom. Worldwide, the Company has more than $200 billion of life reinsurance in force. General American Life Insurance Company owns approximately 64 percent of RGA’s outstanding shares.


Condensed Consolidated Statements of Income

                              ($ in thousands, except per share data)
                             Three Months Ended   Twelve Months Ended
   (Unaudited)                   December 31,          December 31,  
                                1997      1996       1997       1996 

  Net premiums                $230,610  $192,286   $835,460  $674,885
  Net investment income         53,957    40,030    188,333   136,828
  Realized capital
    gains (losses)                (232)     (992)       334       930
  Other income                  33,459     4,754     47,388    17,386
     Total revenue             317,794   236,078  1,071,515   830,029

Benefits and expenses:
  Claims and other policy
    benefits                   221,700   152,851    732,103   560,445
  Accident and health 
    pool charge                    ---       ---     18,000       ---
  Underwriting, acquisition
    and insurance expenses      41,774    42,830    176,482   136,509
  Other expenses                17,532    10,680     53,058    39,845
  Interest expense               1,948     1,971      7,801     6,169
     Total benefits and
       expenses                282,954   208,332    987,444   742,968

  Income before taxes and
    minority interest           34,840    27,746     84,071    87,061

     Income taxes               12,197     9,847     28,750    31,687

  Income before minority
     interest                   22,643    17,899     55,321    55,374

     Minority interest             319      (560)       702       302

  Net income                  $ 22,324  $ 18,459   $ 54,619  $ 55,072

Earnings per share information:
  Basic Earnings (1)              0.88      0.73       2.15      2.18
  Diluted Earnings (1)            0.88      0.73       2.13      2.17

Diluted earnings before 
  realized investment
    gains/(losses) (1)            0.88      0.75       2.13      2.15

Weighted average number of
  shares outstanding  (diluted)
  (in thousands)                25,512    25,434     25,604    25,410

(1)  All periods reflect adoption of SFAS 128.

Condensed Consolidated Business Summary

                                                Twelve Months Ended
   (Unaudited)                                       December 31,  
                                                  1997         1996

Gross life reinsurance in force (in billions)
     North American business                     $199.4       $160.0
     International business                        27.9          8.3

Gross life reinsurance written (in billions)
     North American business                       58.1         33.8
     International business                        17.8          4.1

Consolidated cash and invested assets
  (in millions)                                 3,671.4      2,285.2
     Invested asset yield                          7.23%        7.32%
     Investment portfolio mix
          Cash and short-term investments          8.58%        4.67%
          Fixed maturity securities               68.86%       66.40%
          Mortgage loans                           4.51%        4.30%
          Policy loans                            13.08%       18.66%
          Funds withheld at interest               4.51%        5.69%
          Other invested assets                    0.46%        0.28%

Book value per share outstanding                $ 19.62      $ 16.71
Book value per share outstanding, before
  impact of SFAS 115                              16.96        15.60

Treasury stock at December 31                   844,535      584,031

# # #