Reinsurance Group Of America Reports Fourth-Quarter Results; Provides Earnings Guidance For 2005
ST. LOUIS--(BUSINESS WIRE)--Jan. 27, 2005--Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported net income for the fourth quarter of $55.4 million, or $0.87 per diluted share, compared to net income of $56.1 million, or $0.99 per diluted share in the prior-year quarter. RGA uses a non-GAAP financial measure called operating income as a basis for analyzing financial results. The definition of operating income and reconciliations to GAAP net income are provided in the following tables. Operating income increased 15 percent to $55.5 million from $48.2 million, while diluted earnings per share rose 2 percent to $0.87 from $0.85 in the year-ago quarter. Fourth-quarter net income and operating income were both adversely affected by $7.5 million in pre-tax claims and reserves associated with the Indian Ocean tsunami, or approximately $0.08 per diluted share, after tax. Additionally, both net income and operating income in the current quarter include the negative effect of a $10.0 million pre-tax, or approximately $0.10 per diluted share after tax, increase in reserves associated with the reinsurance of Argentine pension obligations currently in run-off.
Fourth-quarter net premiums totaled $916.8 million compared to $942.4 million a year ago, reflecting the inclusion in the 2003 quarter of six months of results from the company's transaction with Allianz Life Insurance Company of North America (Allianz). Net investment income totaled $168.2 million versus $120.3 million the year before. Approximately $14.6 million of that increase was offset by additional amortization of deferred acquisition costs, a result of the conversion of a large annuity treaty from a funds-withheld structure to a coinsurance structure.
A. Greig Woodring, president and chief executive officer, commented, "We are pleased with the fourth-quarter results, particularly when you consider that they included our estimate of the impact of the devastating tsunami and the Argentine pension reserve strengthening. The U.S. segment reported good results for the quarter and year. Pre-tax net income totaled $71.8 million for the quarter compared with $72.4 million in the prior-year quarter. Pre-tax operating income totaled $77.5 million for the quarter compared with $58.0 million in the prior-year quarter, a 34 percent increase. Mortality experience for the quarter and the year as a whole was within our range of expectations. Pre-tax operating income in the U.S. Asset Intensive sub-segment benefited by approximately $3.2 million, pre-tax, from the aforementioned conversion of a large annuity treaty from a funds-withheld structure to a coinsurance structure. For the year, the U.S. reported more than $2.2 billion in net premiums, a 23 percent increase over the prior year, attributable in part to an entire year of premium production from the Allianz block of business. Pre-tax operating income for the year totaled $289.5 million, up from $210.6 million in 2003.
"For the quarter, our Canada operations reported pre-tax net income of $20.5 million compared to $16.0 million a year ago. Pre-tax operating income was up 17 percent to $17.2 million from $14.7 million. The 2004 quarter includes a $1.6 million, pre-tax, provision for tsunami claims. Mortality experience continues to be favorable. Net premiums increased $11.6 million, or 19 percent for the quarter, and totaled $72.6 million. Approximately $5.2 million of the increase in net premiums and approximately $1.3 million of the increase in pre-tax operating income were the result of a favorable currency exchange rate. For the year, pre-tax operating income totaled $62.0 million, up 34 percent from $46.1 million in 2003.
"Other International operations, which include our Asia Pacific and Europe and South Africa segments, reported 18 percent growth in net premiums, increasing to $233.7 million from $197.5 million. Stronger foreign currencies contributed approximately $12.7 million to the premium growth. However, pre-tax net income and pre-tax operating income decreased from the prior year. Pre-tax net income totaled $6.5 million compared to $17.7 million in the prior-year quarter, which benefited from unusually high premium flows and favorable mortality results. Pre-tax operating income for the quarter totaled $5.9 million, a decline from $15.7 million in the prior-year period. Bottom-line results were adversely affected by $5.3 million, pre-tax, due to the tsunami in Southeast Asia. Additionally, adverse mortality in the UK and parts of Asia Pacific and various adjustments related to enhancements of our business administration process in Australia totaled approximately $4.0 million, pre-tax. The enhancements to our business administration process were a reaction to the increasing levels of business within that segment and our desire to improve the reliability of that administration function. Foreign currency appreciation contributed approximately $0.5 million to current quarter pre-tax operating income. As previously indicated, quarterly results in these newer operations may be more volatile than our North American operations due to the smaller size and relative aging of this business. For the year, our international operations reported pre-tax operating income of $38.5 million, up from $36.3 million in 2003.
"The Corporate segment reported a pre-tax net operating loss of $18.9 million. That amount includes the impact of the $10.0 million in additional reserves for the Argentine pension business. We thought it was appropriate to add to our Argentine pension reserves given the pattern of claims development to date. This business will likely be in a run-off status for another two years or so."
Fourth-quarter results benefited from a lower effective tax rate as a result of reduced federal income taxes associated with the favorable resolution of a tax position taken by the company. The related reduction in tax liabilities amounted to $1.9 million, or $0.03 per diluted share.
For the year, consolidated net income totaled $221.9 million, or $3.52 per diluted share, compared to $173.1 million, or $3.36 per diluted share, in the year-ago period. Operating income increased to $224.6 million, or $3.57 per diluted share, from $166.2 million, or $3.22 per diluted share the year before, an 11 percent increase on a per-share basis. Operating income in 2004 benefited from stronger foreign currencies by approximately $4.6 million, after tax, compared to the prior year, or approximately $0.07 per diluted share. Consolidated net premiums were up 27 percent, to $3,347.4 million from $2,643.2 million.
Woodring concluded, "We have completed what we consider to be a very successful year. The $3.57 per diluted share in operating earnings exceeds the midpoint of the guidance range that we provided last January, and we had a strong year in terms of premium growth. Our success in 2004 is a continuation of the good results that we have seen for several years, and we head into 2005 on solid footing in terms of our market position and financial strength. Specifically, for 2005, we expect consolidated operating earnings per diluted share to be within a range of $3.85 to $4.15 and consolidated net premium growth of 15 percent to 20 percent."
The company also announced that its board of directors declared a regular quarterly dividend of $0.09, payable February 28 to shareholders of record as of February 7.
A conference call to discuss the company's fourth-quarter results will begin at 9 a.m. Eastern Time on Friday, January 28. Interested parties may access the call by dialing 800-231-9012 (domestic) or 719-457-2617 (international). The access code is 292650. A live audio webcast of the conference call will be available on the company's investor relations web page at www.rgare.com. A replay of the conference call will be available at the same address for three months following the conference call. A replay of the conference call will also be available via telephone through February 4 at 888-203-1112 (domestic) or 719-457-0820, access code 292650.
Reinsurance Group of America, Incorporated, through its subsidiaries, RGA Reinsurance Company and RGA Life Reinsurance Company of Canada, is among the largest global providers of life reinsurance. In addition to its U.S. and Canadian operations, Reinsurance Group of America, Incorporated has subsidiary companies or offices in Australia, Barbados, Hong Kong, India, Ireland, Japan, Mexico, South Africa, South Korea, Spain, Taiwan, and the United Kingdom. Worldwide, the company has approximately $1.5 trillion of life reinsurance in force, and assets of $14.0 billion. MetLife, Inc. is the beneficial owner of approximately 52 percent of RGA's outstanding shares.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements relating to projections of the earnings, revenues, income or loss, future financial performance and growth potential of Reinsurance Group of America, Incorporated and its subsidiaries (which we refer to in the following paragraphs as "we," "us" or "our"). The words "intend," "expect," "project," "estimate," "predict," "anticipate," "should," "believe," and other similar expressions also are intended to identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.
Numerous important factors could cause actual results and events to differ materially from those expressed or implied by forward-looking statements including, without limitation, (1) adverse changes in mortality, morbidity or claims experience, (2) changes in our financial strength and credit ratings or those of MetLife, Inc. ("MetLife"), the beneficial owner of a majority of our common shares, or its subsidiaries, and the effect of such changes on our future results of operations and financial condition, (3) general economic conditions affecting the demand for insurance and reinsurance in our current and planned markets, (4) market or economic conditions that adversely affect our ability to make timely sales of investment securities, (5) risks inherent in our risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (6) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (7) adverse litigation or arbitration results, (8) the adequacy of reserves relating to settlements, awards and terminated and discontinued lines of business, (9) the stability of governments and economies in the markets in which we operate, (10) competitive factors and competitors' responses to our initiatives, (11) the success of our clients, (12) successful execution of our entry into new markets, (13) successful development and introduction of new products, (14) our ability to successfully integrate and operate reinsurance business that we acquire, including without limitation, the traditional life reinsurance business of Allianz Life, (15) regulatory action that may be taken by state Departments of Insurance with respect to us, MetLife, or its subsidiaries, (16) our dependence on third parties, including those insurance companies and reinsurers to which we cede some reinsurance, third-party investment managers and others, (17) changes in laws, regulations, and accounting standards applicable to us, our subsidiaries, or our business, and (18) other risks and uncertainties described in this document and in our other filings with the Securities and Exchange Commission.
Forward-looking statements should be evaluated together with the many risks and uncertainties that affect our business, including those mentioned in this document and described in the periodic reports we file with the Securities and Exchange Commission. These forward-looking statements speak only as of the date on which they are made. We do not undertake any obligations to update these forward-looking statements, even though our situation may change in the future. We qualify all of our forward-looking statements by these cautionary statements.
Operating Income
RGA uses a non-GAAP financial measure called operating income as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA's management incentive programs. Management believes that operating income, on a pre-tax and after-tax basis, better measures the ongoing profitability and underlying trends of the company's continuing operations, primarily because that measure excludes the effect of net realized capital gains and losses, as well as changes in the fair value of embedded derivatives and related deferred acquisition costs. These items tend to be highly variable, primarily due to the credit market and interest rate environment and are not necessarily indicative of the performance of the company's underlying businesses. Additionally, operating income excludes any net gain or loss from discontinued operations and the cumulative effect of any accounting changes, which management believes are not indicative of the company's ongoing operations. The definition of operating income can vary by company and is not considered a substitute for GAAP net income.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Net Income From Continuing Operations
to Operating Income
(Dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
(Unaudited) 2004 2003 2004 2003
GAAP net income-continuing
operations $55,917 $59,349 $245,300 $178,319
Realized investment
(gains)/losses (36) (2,930) (22,044) (3,786)
Change in value of
embedded derivatives 146 (28,337) (104) (28,337)
DAC offsets for embedded
derivatives and realized
investment (gains) /
losses, net (509) 20,084 1,472 19,997
Operating income $55,518 $48,166 $224,624 $166,193
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) Three Months Ended December 31, 2004
Realized Change in
Pre-tax investment value of Pre-tax
net (gains)/ embedded operating
income losses, derivatives, income
(loss) net net (loss)
U.S. Operations:
Traditional $ 63,927 $ 642 $ -- $ 64,569
Asset Intensive 4,599 6,972 (1) (1,979)(2) 9,592
Financial Reinsurance 3,310 -- -- 3,310
Total U.S. 71,836 7,614 (1,979) 77,471
Canada Operations 20,519 (3,349) -- 17,170
Asia Pacific Operations 2,520 (228) -- 2,292
Europe & South Africa 4,016 (437) -- 3,579
Other Intl Operations 6,536 (665) -- 5,871
Corporate & Other (19,012) 117 -- (18,895)
Consolidated $ 79,879 $ 3,717 $ (1,979) $ 81,617
(1) Asset Intensive is net of $1,419 DAC offset.
(2) Asset Intensive is net of DAC offsets of $18,612 included in
change in deferred acquisition cost associated with change in
value of embedded derivative, ($20,782) DAC offset included in
policy acquisition costs and other insurance expenses, and $25,911
investment income offset.
Three Months Ended December 31, 2003
Realized Change in
Pre-tax investment value of Pre-tax
net (gains)/ embedded operating
income losses, derivatives, income
(loss) net net (loss)
U.S. Operations:
Traditional $ 54,324 $ (1,302) $ -- $ 53,022
Asset Intensive 14,631 (173)(1) (12,931)(2) 1,527
Financial Reinsurance 3,431 -- -- 3,431
Total U.S. 72,386 (1,475) (12,931) 57,980
Canada Operations 15,979 (1,265) -- 14,714
Asia Pacific Operations 6,838 139 -- 6,977
Europe & South Africa 10,863 (2,111) -- 8,752
Other Intl Operations 17,701 (1,972) -- 15,729
Corporate & Other (14,325) 361 -- (13,964)
Consolidated $ 91,741 $ (4,351) $ (12,931) $ 74,459
(1) Asset Intensive is net of $233 DAC offset.
(2) Asset Intensive is net of $30,665 DAC offset.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) Twelve Months Ended December 31, 2004
Realized Change in
Pre-tax investment value of Pre-tax
net (gains)/ embedded operating
income losses, derivatives, income
(loss) net net (loss)
U.S. Operations:
Traditional $260,067 $ (9,738) $ -- $250,329
Asset Intensive 17,254 7,346 (1) 1,954(2) 26,554
Financial Reinsurance 12,603 -- -- 12,603
Total U.S. 289,924 (2,392) 1,954 289,486
Canada Operations 73,485 (11,508) -- 61,977
Asia Pacific Operations 12,605 (670) -- 11,935
Europe & South Africa 31,682 (5,080) -- 26,602
Other Intl Operations 44,287 (5,750) -- 38,537
Corporate & Other (38,503) (9,673) -- (48,176)
Consolidated $369,193 $(29,323) $ 1,954 $341,824
(1) Asset Intensive is net of $150 DAC offset.
(2) Asset Intensive is net of DAC offsets of $22,896 included in
change in deferred acquisition cost associated with change in
value of embedded derivative, ($20,782) DAC offset included in
policy acquisition costs and other insurance expenses, and
$25,944 investment income offset.
Twelve Months Ended December 31, 2003
Realized Change in
Pre-tax investment value of Pre-tax
net (gains)/ embedded operating
income losses, derivatives, income
(loss) net net (loss)
U.S. Operations:
Traditional $178,314 $ 5,715 $ -- $184,029
Asset Intensive 25,395 1,774(1) (12,931)(2) 14,238
Financial Reinsurance 12,379 -- -- 12,379
Total U.S. 216,088 7,489 (12,931) 210,646
Canada Operations 59,564 (13,423) -- 46,141
Asia Pacific Operations 19,262 761 -- 20,023
Europe & South Africa 20,272 (3,999) -- 16,273
Other Intl Operations 39,534 (3,238) -- 36,296
Corporate & Other (43,576) 3,912 -- (39,664)
Consolidated $271,610 $ (5,260) $(12,931) $253,419
(1) Asset Intensive is net of $100 DAC offset.
(2) Asset Intensive is net of $30,665 DAC offset.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
Three Months Ended Twelve Months Ended
(Unaudited) December 31, December 31,
2004 2003 2004 2003
Revenues:
Net premiums $ 916,812 $ 942,417 $3,347,448 $2,643,163
Investment income, net
of related expenses 168,201 120,345 580,528 465,579
Realized investment
gains (losses), net (2,298) 4,584 29,473 5,360
Change in value of
embedded derivatives 25,720 43,596 26,104 43,596
Other revenues 15,383 13,630 55,366 47,300
Total revenues 1,123,818 1,124,572 4,038,919 3,204,998
Benefits and expenses:
Claims and other
policy benefits 755,063 774,350 2,678,537 2,108,431
Interest credited 60,245 48,788 198,931 179,702
Policy acquisition
costs and other
insurance expenses 165,714 127,262 591,029 458,165
Change in deferred
acquisition cost
associated with
change in value of
embedded derivatives 18,612 30,665 22,896 30,665
Other operating expenses 34,603 42,361 139,896 119,636
Interest expense 9,702 9,405 38,437 36,789
Total benefits
and expenses 1,043,939 1,032,831 3,669,726 2,933,388
Income from continuing
operations before
income taxes 79,879 91,741 369,193 271,610
Provision for income
taxes 23,962 32,392 123,893 93,291
Income from continuing
operations 55,917 59,349 245,300 178,319
Discontinued operations:
Loss from discontinued
accident and health
operations, net of
income taxes (497) (3,805) (23,048) (5,723)
Cumulative effect of
change in accounting
principle -- 545 (361) 545
Net income $ 55,420 $ 56,089 $ 221,891 $ 173,141
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
(Unaudited) December 31, December 31,
2004 2003 2004 2003
Earnings per share from
continuing operations:
Basic earnings per share $ 0.90 $ 1.06 $ 3.94 $ 3.47
Diluted earnings per share $ 0.88 $ 1.05 $ 3.90 $ 3.46
Diluted earnings before
realized investment gains/
(losses), change in value
of embedded derivatives,
and related deferred
acquisition costs $ 0.87 $ 0.85 $ 3.57 $ 3.22
Earnings per share from
net income:
Basic earnings per share $ 0.89 $ 1.00 $ 3.56 $ 3.37
Diluted earnings per share $ 0.87 $ 0.99 $ 3.52 $ 3.36
Weighted average number of
common and common equivalent
shares outstanding
(in thousands) 63,632 56,516 62,964 51,598
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Twelve Months Ended
(Unaudited) December 31,
2004 2003
Gross life reinsurance in force (in billions)
North American business $1,095.7 $ 976.1
International business 363.2 276.1
Gross life reinsurance written (in billions)
North American business 188.1 434.3
International business 91.0 110.1
Consolidated cash and invested assets
(in millions) 10,716.3 8,968.0
Invested asset book yield - trailing
three months excluding funds withheld 5.93% 6.06%
Investment portfolio mix
Cash and short-term investments 1.72% 1.27%
Fixed maturity securities 56.21% 51.02%
Mortgage loans 5.69% 5.34%
Policy loans 8.93% 10.07%
Funds withheld at interest 25.52% 30.30%
Other invested assets 1.93% 2.00%
Book value per share outstanding $ 36.50 $ 31.33
Book value per share outstanding, before
impact of FAS 115(a) $ 32.58 $ 28.59
Treasury stock 683,245 967,927
(a) Book value per share outstanding, before impact of FAS 115, is a
non-GAAP financial measure that management believes is important
in evaluating the balance sheet ignoring the effect of
mark-to-market adjustments that primarily relate to changes in
interest rates and credit spreads on investment securities since
they were acquired.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Unaudited) (Dollars in thousands)
Three Months Ended December 31, 2004
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $ 607,953 $ 1,234 $ -- $609,187
Investment income, net
of related expenses 58,748 69,766 44 128,558
Realized investment
losses, net (642) (5,553) -- (6,195)
Change in value of
embedded derivatives -- 25,720 -- 25,720
Other revenues 964 3,514 7,185 11,663
Total revenues 667,023 94,681 7,229 768,933
Benefits and expenses:
Claims and other
policy benefits 486,117 (305) -- 485,812
Interest credited 14,022 45,630 -- 59,652
Policy acquisition costs
and other insurance
expenses 93,740 24,913 2,598 121,251
Change in deferred ac-
quisition cost associated
with change in value
of embedded derivatives -- 18,612 -- 18,612
Other operating expenses 9,217 1,232 1,321 11,770
Total benefits
and expenses 603,096 90,082 3,919 697,097
Income before
income taxes $ 63,927 $ 4,599 $ 3,310 $ 71,836
Three Months Ended December 31, 2003
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $ 682,118 $ 1,118 $ -- $683,236
Investment income, net
of related expenses 46,651 41,204 8 87,863
Realized investment
gains, net 1,302 406 -- 1,708
Change in value of
embedded derivatives -- 43,596 -- 43,596
Other revenues 734 1,489 7,123 9,346
Total revenues 730,805 87,813 7,131 825,749
Benefits and expenses:
Claims and other
policy benefits 568,981 (1,190) -- 567,791
Interest credited 13,148 35,197 -- 48,345
Policy acquisition costs
and other insurance
expenses 77,620 7,530 2,453 87,603
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- 30,665 -- 30,665
Other operating expenses 16,732 980 1,247 18,959
Total benefits
and expenses 676,481 73,182 3,700 753,363
Income before
income taxes $ 54,324 $ 14,631 $ 3,431 $ 72,386
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Unaudited) (Dollars in thousands)
Twelve Months Ended December 31, 2004
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $2,207,817 $ 4,833 $ -- $2,212,650
Investment income, net
of related expenses 220,080 215,862 173 436,115
Realized investment
gain/(losses),net 9,738 (7,196) -- 2,542
Change in value of
embedded derivatives -- 26,104 -- 26,104
Other revenues 4,157 9,735 27,419 41,311
Total revenues 2,441,792 249,338 27,592 2,718,722
Benefits and expenses:
Claims and other
policy benefits 1,758,452 9,751 2 1,768,205
Interest credited 50,290 146,480 -- 196,770
Policy acquisition costs
and other insurance
expenses 329,006 48,243 9,521 386,770
Change in deferred acqui-
sition costs associated
with change in value of
embedded derivatives -- 22,896 -- 22,896
Other operating
expenses 43,977 4,714 5,466 54,157
Total benefits
and expenses 2,181,725 232,084 14,989 2,428,798
Income before
income taxes $ 260,067 $ 17,254 $ 12,603 $ 289,924
Twelve Months Ended December 31, 2003
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $1,797,478 $ 4,315 $ -- $1,801,793
Investment income, net
of related expenses 181,897 164,127 105 346,129
Realized investment
losses, net (5,715) (1,674) -- (7,389)
Change in value of
embedded derivatives -- 43,596 -- 43,596
Other revenues 3,920 6,524 27,302 37,746
Total revenues 1,977,580 216,888 27,407 2,221,875
Benefits and expenses:
Claims and other
policy benefits 1,457,886 2,976 -- 1,460,862
Interest credited 58,317 119,621 -- 177,938
Policy acquisition
costs and other
insurance expenses 241,877 34,422 9,900 286,199
Change in deferred acqui-
sition costs associated
with change in value of
embedded derivatives -- 30,665 -- 30,665
Other operating expenses 41,186 3,809 5,128 50,123
Total benefits
and expenses 1,799,266 191,493 15,028 2,005,787
Income before
income taxes $ 178,314 $ 25,395 $ 12,379 $ 216,088
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CANADIAN OPERATIONS
(Unaudited) (Dollars in thousands)
Three Months Ended
December 31,
2004 2003
Revenues:
Net premiums $ 72,643 $ 60,991
Investment income, net of related expenses 27,582 23,693
Realized investment gains, net 3,349 1,265
Other revenues (6) (21)
Total revenues 103,568 85,928
Benefits and expenses:
Claims and other policy benefits 72,109 61,964
Interest credited 515 399
Policy acquisition costs and other
insurance expenses 7,472 4,579
Other operating expenses 2,953 3,007
Total benefits and expenses 83,049 69,949
Income before income taxes $ 20,519 $ 15,979
Twelve Months Ended
December 31,
2004 2003
Revenues:
Net premiums $253,852 $214,738
Investment income, net of related expenses 100,141 87,212
Realized investment gains, net 11,508 13,423
Other revenues 32 (212)
Total revenues 365,533 315,161
Benefits and expenses:
Claims and other policy benefits 250,542 223,375
Interest credited 1,840 1,488
Policy acquisition costs and other
insurance expenses 28,505 20,293
Other operating expenses 11,161 10,441
Total benefits and expenses 292,048 255,597
Income before income taxes $ 73,485 $ 59,564
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe and South Africa
(Unaudited) (Dollars in thousands)
Three Months Ended
December 31,
2004 2003
Revenues:
Net premiums $125,617 $104,374
Investment income, net of related expenses 1,328 1,061
Realized investment gains, net 437 2,111
Other revenues (14) 1,049
Total revenues 127,368 108,595
Benefits and expenses:
Claims and other policy benefits 82,233 69,227
Policy acquisition costs and other
insurance expenses 35,083 23,546
Other operating expenses 5,786 4,638
Interest expense 250 321
Total benefits and expenses 123,352 97,732
Income before income taxes $ 4,016 $ 10,863
Twelve Months Ended
December 31,
2004 2003
Revenues:
Net premiums $478,580 $364,203
Investment income, net of related expenses 5,125 3,869
Realized investment gains, net 5,080 3,999
Other revenues 1,541 1,067
Total revenues 490,326 373,138
Benefits and expenses:
Claims and other policy benefits 314,128 230,895
Policy acquisition costs and other
insurance expenses 121,708 105,062
Other operating expenses 21,472 15,866
Interest expense 1,336 1,043
Total benefits and expenses 458,644 352,866
Income before income taxes $ 31,682 $20,272
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Unaudited) (Dollars in thousands)
Three Months Ended
December 31,
2004 2003
Revenues:
Net premiums $108,043 $ 93,174
Investment income, net of related expenses 4,951 2,494
Realized investment gains/(losses), net 228 (139)
Other revenues 1,959 295
Total revenues 115,181 95,824
Benefits and expenses:
Claims and other policy benefits 103,308 69,803
Policy acquisition costs and other
insurance expenses 1,378 14,112
Other operating expenses 7,470 4,817
Interest expense 505 254
Total benefits and expenses 112,661 88,986
Income before income taxes $ 2,520 $ 6,838
Twelve Months Ended
December 31,
2004 2003
Revenues:
Net premiums $399,122 $259,010
Investment income, net of related expenses 16,113 10,692
Realized investment gains/(losses), net 670 (761)
Other revenues 5,121 1,191
Total revenues 421,026 270,132
Benefits and expenses:
Claims and other policy benefits 330,144 185,358
Policy acquisition costs and other
insurance expenses 52,300 47,513
Other operating expenses 24,363 16,903
Interest expense 1,614 1,096
Total benefits and expenses 408,421 250,870
Income before income taxes $ 12,605 $ 19,262
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CORPORATE AND OTHER
(Dollars in thousands)
(Unaudited)
Three Months Ended
December 31,
2004 2003
Revenues:
Net premiums $ 1,322 $ 642
Investment income, net of related expenses 5,782 5,234
Realized investment losses, net (117) (361)
Other revenues 1,781 2,961
Total revenues 8,768 8,476
Benefits and expenses:
Claims and other policy benefits 11,601 5,565
Interest credited 78 44
Policy acquisition costs and other
insurance expenses 530 (2,578)
Other operating expenses 6,624 10,940
Interest expense 8,947 8,830
Total benefits and expenses 27,780 22,801
Loss before income taxes $(19,012) $(14,325)
Twelve Months Ended
December 31,
2004 2003
Revenues:
Net premiums $ 3,244 $ 3,419
Investment income, net of related expenses 23,034 17,677
Realized investment gains/(losses), net 9,673 (3,912)
Other revenues 7,361 7,508
Total revenues 43,312 24,692
Benefits and expenses:
Claims and other policy benefits 15,518 7,941
Interest credited 321 276
Policy acquisition costs and other
insurance expenses 1,746 (902)
Other operating expenses 28,743 26,303
Interest expense 35,487 34,650
Total benefits and expenses 81,815 68,268
Loss before income taxes $(38,503) $ (43,576)
CONTACT: Reinsurance Group of America, Incorporated
Jack B. Lay, 636-736-7439
SOURCE: Reinsurance Group of America, Incorporated