Reinsurance Group of America Reports Fourth-Quarter Results
ST. LOUIS--(BUSINESS WIRE)--Jan. 29, 2007--Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported net income for the fourth quarter of $81.5 million, or $1.28 per diluted share, compared to $68.2 million, or $1.07 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 to $81.0 million, or $1.27 per diluted share, from $73.1 million, or $1.15 per diluted share in the year-ago quarter, reflecting strong international results and solid contributions from the U.S. and Canadian segments. Fourth-quarter net premiums rose 13 percent, to $1,200.7 million, from $1,060.1 million a year ago. Net investment income totaled $240.8 million versus $169.4 million the year before.
For the full-year 2006, consolidated net income totaled $288.2 million, or $4.57 per diluted share, compared to $224.2 million, or $3.52 per diluted share for 2005. Operating income increased 30 percent to $293.2 million, or $4.65 per diluted share, from $225.5 million, or $3.54 per diluted share, the year before. Consolidated premiums were up 12 percent, to $4,346.0 million from $3,866.8 million.
A. Greig Woodring, president and chief executive officer, commented, "We are pleased with the results for the quarter and the year. Contributions from our international operations were substantial and our more established operations in the U.S. and Canada continue to be among the leaders in their markets.
"The U.S. segment reported solid earnings with pre-tax net income totaling $86.3 million for the quarter versus $82.2 million the year before. Pre-tax operating income totaled $84.9 million versus $88.7 million the year before, when results were quite strong. The quarter capped off a solid year for the U.S. segment with $330.8 million of pre-tax operating earnings, a 21 percent increase from 2005. Mortality experience for the quarter, and the year as a whole, was within our range of expectations. Net premiums were up 7 percent to $728.2 million from $678.3 million in the prior-year quarter. For the year, premiums increased 9 percent, at the midpoint of our expected range.
"For the quarter, our Canada operations reported pre-tax net income of $12.8 million compared to $12.1 million a year ago. Pre-tax operating income totaled $11.0 million compared to $11.6 million a year ago. Claims flow improved from earlier in the year, but was still slightly higher-than-expected. Net premiums increased 30 percent to $134.6 million from $103.4 million in the prior year. A significant portion of that growth was driven by one group creditor treaty. Net premiums and pre-tax operating income for the fourth quarter of 2006 benefited from a favorable currency exchange rate relative to the prior year by approximately $3.5 million and $0.4 million, respectively.
"Other International operations, which include our Asia Pacific and Europe and South Africa segments, were strong across the board. Asia Pacific reported pre-tax net income of $23.9 million compared with $15.6 million in the year-ago quarter. Pre-tax operating income totaled $24.1 million compared with $15.9 million a year ago. Segment-wide claims experience was good during the current quarter, which was also the case in the prior-year quarter. Stronger premium flow also contributed to the bottom line as net premiums increased 37 percent to $186.6 million from $136.4 million. Foreign currency fluctuations favorably affected net premiums and pre-tax operating income by approximately $7.0 million and $1.2 million, respectively. Results for the full year were very strong with pre-tax operating income increasing 87 percent to $59.0 million.
"Europe and South Africa results were also strong for the quarter, due primarily to favorable claims experience, with pre-tax net income rising to $17.4 million from $12.1 million a year ago. Pre-tax operating income increased to $17.4 million versus $12.3 million last year. Net premiums increased 7 percent for the quarter to $150.9 million. That rate of growth has slowed compared to previous years, reflecting the considerable level of competition, most notably in the UK, our largest market in this segment. Foreign currency exchange fluctuations favorably affected reported net premiums and pre-tax operating income by approximately $9.5 million and $1.6 million, respectively. For the year, Europe and South Africa results were very strong with pre-tax operating income increasing 63 percent to $58.6 million."
Woodring continued, "Fourth-quarter results mark the completion of a very successful year. Of particular note is the contribution from our international operations, which in total generated $117.5 million in pre-tax operating income, or approximately 26 percent of our consolidated amount. Looking ahead for 2007, we expect continued strong growth in select international markets, particularly in Asia, while our North American operations will continue to grow at a more moderate pace. On a consolidated basis, we expect premiums to increase in a range of 10 percent to 13 percent. The North American operations will likely grow in the high single digits, while the international operations are expected to grow in a range of 12 to 15 percent. In terms of earnings per share, we expect 2007 to be within a range of $4.80 to $5.40 per diluted share."
Woodring concluded, "Further, we head into 2007 with strong operations across the globe. We have made significant progress over the past several years in running off the ancillary businesses that were problematic and non-core to our broader life reinsurance businesses, and are in better shape than ever to focus our attention on continuing to build our core businesses."
The board of directors elected Steven A. Kandarian, Executive Vice President and Chief Investment Officer of MetLife, Inc., as a director and chairman of the board to fill the vacancies created by the resignation on January 18, 2007, of Leland C. Launer, Jr.
The company also announced that its board of directors declared a regular quarterly dividend of $0.09, payable February 26 to shareholders of record as of February 5.
A conference call to discuss the company's fourth-quarter results will begin at 9 a.m. Eastern Time on Tuesday, January 30. Interested parties may access the call by dialing 800-210-9006 (domestic) or 719-457-2621 (international). The access code is 6804032. 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 6 at 888-203-1112 (domestic) or 719-457-0820, access code 6804032.
Reinsurance Group of America, Incorporated, through its various operating subsidiaries, is among the largest global providers of life reinsurance. Reinsurance Group of America, Incorporated has subsidiary companies or offices in Australia, Barbados, Bermuda, Canada, China, Hong Kong, India, Ireland, Japan, Mexico, Poland, South Africa, South Korea, Spain, Taiwan, the United Kingdom and the United States. Worldwide, the company has approximately $2.0 trillion of life reinsurance in force, and assets of $19.0 billion. MetLife, Inc. is the beneficial owner of approximately 53 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) inadequate risk analysis and underwriting, (4) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in our current and planned markets, (5) the availability and cost of collateral necessary for regulatory reserves and capital, (6) market or economic conditions that adversely affect our ability to make timely sales of investment securities, (7) risks inherent in our risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (8) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (9) adverse litigation or arbitration results, (10) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (11) the stability of and actions by governments and economies in the markets in which we operate, (12) competitive factors and competitors' responses to our initiatives, (13) the success of our clients, (14) successful execution of our entry into new markets, (15) successful development and introduction of new products and distribution opportunities, (16) our ability to successfully integrate and operate reinsurance business that we acquire, (17) regulatory action that may be taken by state Departments of Insurance with respect to us, MetLife, or its subsidiaries, (18) our dependence on third parties, including those insurance companies and reinsurers to which we cede some reinsurance, third-party investment managers and others, (19) the threat of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics anywhere in the world where we or our clients do business, (20) changes in laws, regulations, and accounting standards applicable to us, our subsidiaries, or our business, (21) the effect of our status as a holding company and regulatory restrictions on our ability to pay principal of and interest on our debt obligations, and (22) 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 investment related 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)
(Unaudited) Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
GAAP net income-continuing
operations $ 83,318 $ 69,665 $293,261 $235,608
Investment related
(gains)losses (523) 3,942 2,744 (12,798)
Change in value of embedded
derivatives (5,716) (822) (4,253) (4,839)
DAC offset for embedded
derivatives and investment
related losses, net 3,916 341 1,453 7,503
Operating income $ 80,995 $ 73,126 $293,205 $225,474
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, 2006
Investment Change in
Pre-tax related value of Pre-tax
net (gains) embedded operating
income losses, derivatives, income
(loss) net net (loss)
U.S. Operations:
Traditional $ 74,635 $ 542 $ -- $ 75,177
Asset Intensive 7,903 815(1) (2,720)(2) 5,998
Financial Reinsurance 3,737 -- -- 3,737
Total U.S. 86,275 1,357 (2,720) 84,912
Canada Operations 12,799 (1,830) -- 10,969
Asia Pacific Operations 23,874 249 -- 24,123
Europe & South Africa 17,362 84 -- 17,446
Other Intl Operations 41,236 333 -- 41,569
Corporate & Other (12,125) (652) -- (12,777)
Consolidated $128,185 $ (792) $(2,720) $124,673
(1) Asset Intensive is net of $(49) DAC offset.
(2) Asset Intensive is net of DAC offsets of $6,074 included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(Unaudited) Three Months Ended December 31, 2005
Investment Change in
Pre-tax related value of Pre-tax
net (gains) embedded operating
income losses, derivatives, income
(loss) net net (loss)
U.S. Operations:
Traditional $ 74,005 $ 4,078 $ -- $ 78,083
Asset Intensive 3,489 2,613(1) (254)(2) 5,848
Financial Reinsurance 4,709 11 -- 4,720
Total U.S. 82,203 6,702 (254) 88,651
Canada Operations 12,050 (464) -- 11,586
Asia Pacific Operations 15,566 344 -- 15,910
Europe & South Africa 12,124 136 -- 12,260
Other Intl Operations 27,690 480 -- 28,170
Corporate & Other (12,303) (1,152) -- (13,455)
Consolidated $109,640 $ 5,566 $ (254) $114,952
(1) Asset Intensive is net of $(485) DAC offset
(2) Asset Intensive is net of DAC offsets of $1,010 included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
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, 2006
Pre-tax Investment Change in Pre-tax
net related value of operating
income (gains) embedded income
(loss) losses, net derivative (loss)
U.S. Operations:
Traditional $287,122 $ 4,077 $ -- $291,199
Asset Intensive 20,187 7,206(1) (2,808)(2) 24,585
Financial Reinsurance 15,039 (4) -- 15,035
Total U.S. 322,348 11,279 (2,808) 330,819
Canada Operations 45,766 (5,137) -- 40,629
Asia Pacific Operations 58,591 372 -- 58,963
Europe & South Africa 58,241 322 -- 58,563
Other Intl Operations 116,832 694 -- 117,526
Corporate & Other (33,558) (4,014) -- (37,572)
Consolidated $451,388 $ 2,822 $(2,808) $451,402
(1) Asset Intensive is net of $(1,500) DAC offset.
(2) Asset Intensive is net of DAC offsets of $3,735 included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(Unaudited) Twelve Months Ended December 31, 2005
Pre-tax Investment Change in Pre-tax
net related value of operating
income (gains) embedded income
(loss) losses, net derivative (loss)
U.S. Operations:
Traditional $232,371 $ 8,603 $ -- $240,974
Asset Intensive 16,317 941(1) (472)(2) 16,786
Financial Reinsurance 15,064 21 -- 15,085
Total U.S. 263,752 9,565 (472) 272,845
Canada Operations 50,199 (3,365) -- 46,834
Asia Pacific Operations 31,268 269 -- 31,537
Europe & South Africa 35,520 318 -- 35,838
Other Intl Operations 66,788 587 -- 67,375
Corporate & Other (24,393) (17,315)(3) -- (41,708)
Consolidated $356,346 $(10,528) $ (472) $345,346
(1) Asset Intensive is net of $(118) DAC offset.
(2) Asset Intensive is net of DAC offsets of $6,972 included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(3) Corporate & Other is net of DAC offsets of $3,048 included in
policy acquisition costs and other insurance expenses.
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,
2006 2005 2006 2005
Revenues:
Net premiums $1,200,733 $1,060,069 $4,345,969 $3,866,775
Investment income, net
of related expenses 240,752 169,372 779,655 639,165
Investment related
gains(losses), net 854 (5,998) (3,953) 13,590
Change in value of
embedded derivatives 8,794 1,264 6,543 7,444
Other revenues 18,442 14,093 65,477 57,791
Total revenues 1,469,575 1,238,800 5,193,691 4,584,765
Benefits and expenses:
Claims and other
policy benefits 955,436 847,583 3,488,388 3,187,902
Interest credited 94,928 54,789 244,771 208,376
Policy acquisition
costs and other
insurance expenses 199,333 168,830 712,568 629,359
Change in deferred
acquisition cost
associated with
change in value of
embedded derivatives 6,074 1,010 3,735 6,972
Other operating
expenses 57,455 45,352 204,380 154,382
Collateral finance
facilities expense 13,015 -- 26,428 --
Interest expense 15,149 11,596 62,033 41,428
Total benefits
and expenses 1,341,390 1,129,160 4,742,303 4,228,419
Income from continuing
operations before
income taxes 128,185 109,640 451,388 356,346
Provision for
income taxes 44,867 39,975 158,127 120,738
Income from continuing
operations 83,318 69,665 293,261 235,608
Discontinued
operations:
Loss from
discontinued
accident and
health operations,
net of income
taxes (1,844) (1,488) (5,051) (11,428)
Net income $ 81,474 $ 68,177 $ 288,210 $ 224,180
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
(Unaudited) December 31, December 31,
2006 2005 2006 2005
Earnings per share from
continuing operations:
Basic earnings per share $ 1.36 $ 1.12 $ 4.79 $ 3.77
Diluted earnings per share $ 1.31 $ 1.09 $ 4.65 $ 3.70
Diluted earnings per share
before investment related
gains/(losses), change in
value of embedded
derivatives, and related
deferred acquisition costs $ 1.27 $ 1.15 $ 4.65 $ 3.54
Earnings per share from
net income:
Basic earnings per share $ 1.33 $ 1.09 $ 4.71 $ 3.58
Diluted earnings per share $ 1.28 $ 1.07 $ 4.57 $ 3.52
Weighted average number of
common and common equivalent
shares outstanding 63,815 63,653 63,062 63,724
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Twelve Months Ended
(Unaudited) December 31,
2006 2005
Gross life reinsurance in force (in billions)
North American business $ 1,315.2 $ 1,211.1
International business $ 665.1 $ 525.5
Gross life reinsurance written (in billions)
North American business $ 211.9 $ 218.9
International business $ 158.5 $ 135.2
Consolidated cash and invested assets
(in millions) $14,773.3 $12,460.1
Invested asset book yield - trailing
three months excluding funds withheld 5.92% 5.92%
Investment portfolio mix
Cash and short-term investments 2.04% 2.05%
Fixed maturity securities 56.67% 55.17%
Mortgage loans 4.98% 5.20%
Policy loans 6.87% 7.92%
Funds withheld at interest 27.95% 27.77%
Other invested assets 1.49% 1.89%
Collateral finance facilities (in millions) $ 850.4 $ --
Short-term debt (in millions) $ 29.4 $ 125.6
Long-term debt (in millions) $ 676.2 $ 674.4
Company-obligated mandatorily
redeemable preferred securities
of subsidiary (in millions) $ 158.7 $ 158.6
Book value per share outstanding $ 45.85 $ 41.38
Book value per share outstanding, before
impact of FAS 115(a) $ 40.38 $ 35.46
Total stockholders' equity (in millions) 2,815.4 2,527.5
Total stockholders' equity, before
impact of FAS 115(a)(in millions) 2,479.8 2,165.7
Treasury shares 1,717,722 2,052,316
Common stock outstanding 61,410,551 61,075,957
(a) Book value per share outstanding and total stockholders' equity,
before impact of FAS 115, are non-GAAP financial measures that
management believes are 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
(Dollars in thousands)
(Unaudited) Three Months Ended December 31, 2006
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $726,655 $ 1,552 $ -- $728,207
Investment income, net
of related expenses 82,622 99,317 (51) 181,888
Investment related
losses, net (542) (864) -- (1,406)
Change in value of
embedded derivatives -- 8,794 -- 8,794
Other revenues 42 5,571 7,478 13,091
Total revenues 808,777 114,370 7,427 930,574
Benefits and expenses:
Claims and other
policy benefits 606,097 (346) 1 605,752
Interest credited 14,439 79,801 -- 94,240
Policy acquisition costs
and other insurance
expenses 102,917 18,883 2,232 124,032
Change in deferred
acquisition cost
associated
with change in value
of embedded derivatives -- 6,074 -- 6,074
Other operating expenses 10,689 2,055 1,457 14,201
Total benefits
and expenses 734,142 106,467 3,690 844,299
Income before
income taxes $ 74,635 $ 7,903 $3,737 $ 86,275
(Unaudited) Three Months Ended December 31, 2005
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $677,159 $ 1,182 $ -- $678,341
Investment income, net
of related expenses 70,023 57,470 148 127,641
Investment related
losses, net (4,078) (3,098) (11) (7,187)
Change in value of
embedded derivatives -- 1,264 -- 1,264
Other revenues 422 2,661 8,094 11,177
Total revenues 743,526 59,479 8,231 811,236
Benefits and expenses:
Claims and other
policy benefits 543,763 761 1 544,525
Interest credited 12,095 42,157 -- 54,252
Policy acquisition costs
and other insurance
expenses 102,830 10,753 2,179 115,762
Change in deferred
acquisition cost
associated
with change in value
of embedded
derivatives -- 1,010 -- 1,010
Other operating
expenses 10,833 1,309 1,342 13,484
Total benefits
and expenses 669,521 55,990 3,522 729,033
Income before
income taxes $ 74,005 $ 3,489 $4,709 $ 82,203
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Dollars in thousands)
(Unaudited) Twelve Months Ended December 31, 2006
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $2,647,322 $ 6,190 $ -- $2,653,512
Investment income, net
of related expenses 305,221 267,111 (213) 572,119
Investment related
gains(losses), net (4,077) (8,706) 4 (12,779)
Change in value of
embedded derivatives -- 6,543 -- 6,543
Other revenues 269 20,031 29,868 50,168
Total revenues 2,948,735 291,169 29,659 3,269,563
Benefits and expenses:
Claims and other
policy benefits 2,174,142 581 5 2,174,728
Interest credited 50,059 192,092 -- 242,151
Policy acquisition
costs and other
insurance expenses 395,531 67,461 9,284 472,276
Change in deferred
acquisition cost
associated
with change in value
of embedded
derivatives -- 3,735 -- 3,735
Other operating
expenses 41,881 7,113 5,331 54,325
Total benefits and
expenses 2,661,613 270,982 14,620 2,947,215
Income before
income taxes $ 287,122 $ 20,187 $15,039 $ 322,348
(Unaudited) Twelve Months Ended December 31, 2005
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $2,428,890 $ 4,670 $ -- $2,433,560
Investment income, net
of related expenses 268,531 214,941 467 483,939
Investment related
losses, net (8,603) (1,059) (21) (9,683)
Change in value of
embedded derivatives -- 7,444 -- 7,444
Other revenues 1,318 8,621 28,393 38,332
Total revenues 2,690,136 234,617 28,839 2,953,592
Benefits and expenses:
Claims and other
policy benefits 2,008,537 4,870 6 2,013,413
Interest credited 53,958 151,966 -- 205,924
Policy acquisition
costs and other
insurance expenses 354,981 49,436 8,358 412,775
Change in deferred
acquisition cost
associated
with change in value
of embedded
derivatives -- 6,972 -- 6,972
Other operating
expenses 40,289 5,056 5,411 50,756
Total benefits and
expenses 2,457,765 218,300 13,775 2,689,840
Income before
income taxes $ 232,371 $ 16,317 $15,064 $ 263,752
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CANADIAN OPERATIONS
(Dollars in thousands)
Three Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $134,600 $103,447
Investment income, net of related expenses 28,092 25,372
Investment related gains, net 1,941 517
Other revenues (155) (13)
Total revenues 164,478 129,323
Benefits and expenses:
Claims and other policy benefits 105,839 91,252
Interest credited 208 230
Policy acquisition costs and other
insurance expenses 41,201 21,617
Other operating expenses 4,431 4,174
Total benefits and expenses 151,679 117,273
Income before income taxes $ 12,799 $ 12,050
Twelve Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $429,438 $343,131
Investment income, net of related expenses 106,973 93,009
Investment related gains, net 5,506 3,497
Other revenues 160 (279)
Total revenues 542,077 439,358
Benefits and expenses:
Claims and other policy benefits 386,221 307,959
Interest credited 831 1,105
Policy acquisition costs and other
insurance expenses 92,936 64,921
Other operating expenses 16,323 15,174
Total benefits and expenses 496,311 389,159
Income before income taxes $ 45,766 $ 50,199
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe & South Africa
(Dollars in thousands)
Three Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $150,910 $141,217
Investment income, net of related expenses 4,836 3,280
Investment related losses, net (84) (136)
Other revenues 739 41
Total revenues 156,401 144,402
Benefits and expenses:
Claims and other policy benefits 106,683 99,633
Interest credited 285 220
Policy acquisition costs and other
insurance expenses 20,910 24,676
Other operating expenses 11,161 7,749
Total benefits and expenses 139,039 132,278
Income before income taxes $ 17,362 $ 12,124
Twelve Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $587,903 $552,692
Investment income, net of related expenses 16,311 11,494
Investment related losses, net (322) (318)
Other revenues 858 299
Total revenues 604,750 564,167
Benefits and expenses:
Claims and other policy benefits 414,855 405,121
Interest credited 764 882
Policy acquisition costs and other
insurance expenses 90,098 94,853
Other operating expenses 40,792 27,791
Total benefits and expenses 546,509 528,647
Income before income taxes $ 58,241 $ 35,520
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Three Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $186,564 $136,365
Investment income, net of related expenses 7,751 6,355
Investment related losses, net (249) (344)
Other revenues 1,731 1,946
Total revenues 195,797 144,322
Benefits and expenses:
Claims and other policy benefits 136,341 104,599
Policy acquisition costs and other
insurance expenses 23,384 15,785
Other operating expenses 12,198 8,372
Total benefits and expenses 171,923 128,756
Income before income taxes $ 23,874 $ 15,566
Twelve Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $673,179 $534,927
Investment income, net of related expenses 28,105 21,773
Investment related losses, net (372) (269)
Other revenues 6,465 4,593
Total revenues 707,377 561,024
Benefits and expenses:
Claims and other policy benefits 512,740 419,935
Policy acquisition costs and other
insurance expenses 93,614 82,384
Other operating expenses 42,432 27,437
Total benefits and expenses 648,786 529,756
Income before income taxes $ 58,591 $ 31,268
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CORPORATE AND OTHER
(Dollars in thousands)
Three Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $ 452 $ 699
Investment income, net of related expenses 18,185 6,724
Investment related gains, net 652 1,152
Other revenues 3,036 942
Total revenues 22,325 9,517
Benefits and expenses:
Claims and other policy benefits 821 7,574
Interest credited 195 87
Policy acquisition costs and other
insurance expenses (10,194) (9,010)
Other operating expenses 15,464 11,573
Collateral finance facilities expense 13,015 --
Interest expense 15,149 11,596
Total benefits and expenses 34,450 21,820
Loss before income taxes $(12,125) $(12,303)
Twelve Months Ended
(Unaudited) December 31,
2006 2005
Revenues:
Net premiums $ 1,937 $ 2,465
Investment income, net of related expenses 56,147 28,950
Investment related gains, net 4,014 20,363
Other revenues 7,826 14,846
Total revenues 69,924 66,624
Benefits and expenses:
Claims and other policy benefits (156) 41,474
Interest credited 1,025 465
Policy acquisition costs and other
insurance expenses (36,356) (25,574)
Other operating expenses 50,508 33,224
Collateral finance facilities expense 26,428 --
Interest expense 62,033 41,428
Total benefits and expenses 103,482 91,017
Loss before income taxes $(33,558) $(24,393)
CONTACT: Reinsurance Group of America, Incorporated
Jack B. Lay, 636-736-7000
Executive Vice President and Chief Financial Officer
SOURCE: Reinsurance Group of America, Incorporated