Reinsurance Group of America Reports Second-Quarter Results
ST. LOUIS--(BUSINESS WIRE)--July 23, 2007--Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported net income for the second quarter of $77.5 million, or $1.20 per diluted share, compared to $63.6 million, or $1.01 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 22 percent to $84.6 million, or $1.31 per diluted share, from $69.1 million, or $1.10 per diluted share in the year-ago quarter. On a per share basis, operating income increased 19 percent. Second-quarter net premiums rose 12 percent, to $1,207.6 million, from $1,076.6 million a year ago. Net investment income totaled $274.9 million versus $168.6 million the year before.
For the first half of 2007, net income totaled $153.7 million or $2.39 per diluted share, compared to $132.7 million, or $2.12 per diluted share, in the year-ago period. Operating income totaled $166.7 million, or $2.60 per diluted share, compared to $137.5 million, or $2.19 per diluted share in the prior-year period, a 19 percent increase on a per share basis. Consolidated premiums were up 13 percent, to $2,333.1 million from $2,069.0 million.
A. Greig Woodring, president and chief executive officer, commented, "We reported solid results, with notably strong results in Canada and Asia Pacific more than offsetting somewhat higher claim levels in the UK. The U.S. segment reported pre-tax net income totaling $86.2 million for the quarter versus $70.9 million the year before. Pre-tax operating income increased 19 percent to $93.3 million from $78.5 million the year before. Net premiums were up 9 percent to $720.4 million from $663.9 million in the prior-year quarter.
"Our Canada operations reported a strong quarter with pre-tax net income of $24.2 million compared to $11.1 million a year ago. Pre-tax operating income totaled $22.6 million, up substantially from $8.9 million a year ago, when claims were higher-than-expected. Mortality experience during the current quarter was favorable. Net premiums increased 26 percent to $122.6 million from $97.1 million in the prior year. On a year-to-date basis, premiums are up 16 percent. Net premiums for the second quarter of 2007 were favorably affected by currency exchange rates relative to the prior year by approximately $2.7 million, as the Canadian dollar strengthened slightly. The impact of foreign currency fluctuations on operating income was not significant.
"Asia Pacific reported pre-tax net income of $15.6 million compared with $7.7 million in the year-ago quarter. Pre-tax operating income totaled $16.1 million compared with $7.8 million a year ago. Segment-wide claims experience was slightly favorable, while the year-ago quarter reflected poor mortality in our South Korean operations. Net premium flow was good, increasing 18 percent to $199.0 million from $168.9 million. Foreign currency fluctuations favorably affected net premiums by approximately $8.5 million, primarily due to the strength of the Australian dollar. The impact of foreign currency fluctuations on operating income was not significant.
"Europe and South Africa results were off slightly due primarily to high claim levels in the UK, with pre-tax net income of $11.8 million compared to $17.3 million a year ago. Pre-tax operating income totaled $12.5 million versus $17.4 million last year, a period in which we experienced favorable mortality. Net premiums increased 13 percent to $164.8 million. Foreign currency exchange fluctuations favorably affected reported net premiums by approximately $10.0 million due to relatively strong British pound and euro currencies. The impact of foreign currency fluctuations on operating income was not significant."
Woodring concluded, "We are pleased with the results for the quarter and the first half of the year. Each of our operations has good momentum going into the second half of the year. We continue to see substantial growth opportunities internationally, both near-term and longer-term, and have recently established representative offices in Germany, France and Poland as we look to expand our European presence. We believe we are well-positioned to take advantage of opportunities across the globe in all the key life insurance markets."
The company also announced that its board of directors declared a regular quarterly dividend of $0.09, payable August 24 to shareholders of record as of August 3.
A conference call to discuss the company's second-quarter results will begin at 9 a.m. Eastern Time on Tuesday, July 24. Interested parties may access the call by dialing 800-210-9006 (domestic) or 719-457-2621 (international). The access code is 8600471. 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 August 1 at 888-203-1112 (domestic) or 719-457-0820, access code 8600471.
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, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Mexico, Poland, South Africa, South Korea, Spain, Taiwan, the United Kingdom and the United States. Worldwide, the company has approximately $2.1 trillion of life reinsurance in force, and assets of $20.3 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, lapsation 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 an insurance 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 Six Months Ended
Ended
June 30, June 30,
----------------------------------------------------------------------
2007 2006 2007 2006
---------------------------------
GAAP net income-continuing
operations $79,037 $63,789 $155,973 $134,369
Investment related losses, net 4,666 3,643 10,321 3,082
Change in value of embedded
derivatives 4,632 7,198 2,787 4,239
DAC offset for embedded derivatives
and investment related gains, net
(3,717) (5,563) (2,379) (4,169)
---------------------------------
Operating income $84,618 $69,067 $166,702 $137,521
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 June 30, 2007
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 $ 79,098 $ 4,497 $ -- $ 83,595
Asset Intensive 4,111 971(1) 1,581(2) 6,663
Financial Reinsurance 3,006 7 -- 3,013
------------------------------------------
Total U.S. 86,215 5,475 1,581 93,271
Canada Operations 24,202 (1,642) -- 22,560
Europe & South Africa 11,846 630 -- 12,476
Asia Pacific Operations 15,609 499 -- 16,108
Corporate and Other (14,159) 1,963 -- (12,196)
------------------------------------------
Consolidated $123,713 $ 6,925 $ 1,581 $132,219
==========================================
(1) Asset Intensive is net of $(173)DAC offset.
(2) Asset Intensive is net of DAC offsets of $(5,545) included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(Unaudited) Three Months Ended June 30, 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 $67,331 $ 2,506 $ -- $ 69,837
Asset Intensive (276) 1,935(1) 3,093(2) 4,752
Financial Reinsurance 3,880 -- -- 3,880
-----------------------------------------
Total U.S. 70,935 4,441 3,093 78,469
Canada Operations 11,074 (2,194) -- 8,880
Europe & South Africa 17,269 181 -- 17,450
Asia Pacific Operations 7,725 92 -- 7,817
Corporate & Other (9,569) 2,369 -- (7,200)
-----------------------------------------
Consolidated $97,434 $ 4,889 $ 3,093 $105,416
=========================================
(1) Asset Intensive is net of $(576)DAC offset.
(2) Asset Intensive is net of DAC offsets of$(7,982)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, except per share data)
(Unaudited) Six Months Ended June 30, 2007
Pre-tax Investment Change in Pre-tax
net related value of operating
income (gains)/ embedded income
(loss) losses, derivative (loss)
net
-----------------------------------------
U.S. Operations:
Traditional $165,109 $ 4,835 $ -- $169,944
Asset Intensive 8,573 1,705(1) 850(2) 11,128
Financial Reinsurance 5,710 7 -- 5,717
-----------------------------------------
Total U.S. 179,392 6,547 850 186,789
Canada Operations 39,236 (4,168) -- 35,068
Europe & South Africa 32,970 854 -- 33,824
Asia Pacific Operations 25,941 570 -- 26,511
Corporate & Other (34,596) 11,815 -- (22,781)
-----------------------------------------
Consolidated $242,943 $ 15,618 $ 850 $259,411
=========================================
(1) Asset Intensive is net of $(222)DAC offset.
(2) Asset Intensive is net of DAC offsets of $(3,438)included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(Unaudited) Six Months Ended June 30, 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 $ 136,730 $ 3,735 $ -- $ 140,465
Asset Intensive 7,007 4,655(1) 1,298(2) 12,960
Financial Reinsurance 7,534 -- -- 7,534
---------------------------------------------
Total U.S. 151,271 8,390 1,298 160,959
Canada Operations 19,505 (1,995) -- 17,510
Europe & South Africa 32,066 147 -- 32,213
Asia Pacific Operations 14,339 77 -- 14,416
Corporate & Other (11,547) (2,975) -- (14,522)
---------------------------------------------
Consolidated $ 205,634 $ 3,644 $ 1,298 $ 210,576
=============================================
(1) Asset Intensive is net of $(1,189)DAC offset.
(2) Asset Intensive is net of DAC offsets of $(5,225)included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
----------------------------------------------------------------------
2007 2006 2007 2006
-----------------------------------------------
Revenues:
Net premiums $1,207,646 $1,076,603 $2,333,096 $2,069,045
Investment income,
net of related
expenses 274,902 168,605 490,645 355,546
Investment related
losses, net (7,092) (5,314) (15,576) (4,682)
Change in value of
embedded
derivatives (7,126) (11,075) (4,288) (6,523)
Other revenues 20,446 13,717 39,548 28,247
----------------------------------------------
Total revenues 1,488,776 1,242,536 2,843,425 2,441,633
Benefits and expenses:
Claims and other
policy benefits 980,338 874,531 1,883,148 1,686,044
Interest credited 113,652 44,732 174,718 106,261
Policy acquisition
costs and other
insurance expenses 183,561 172,700 364,435 324,504
Change in deferred
acquisition cost
associated with
change in value of
embedded
derivatives (5,545) (7,982) (3,438) (5,225)
Other operating
expenses 56,619 45,830 112,041 92,357
Interest expense 23,232 15,014 43,685 31,781
Collateral finance
facilities expense 13,206 277 25,893 277
----------------------------------------------
Total benefits
and expenses 1,365,063 1,145,102 2,600,482 2,235,999
----------------------------------------------
Income from
continuing
operations before
income taxes 123,713 97,434 242,943 205,634
Provision for
income taxes 44,676 33,645 86,969 71,265
----------------------------------------------
Income from
continuing
operations 79,037 63,789 155,974 134,369
Discontinued
operations:
Loss from
discontinued
accident and
health operations,
net of income
taxes (1,562) (158) (2,247) (1,668)
----------------------------------------------
Net income $ 77,475 $ 63,631 $ 153,727 $ 132,701
==============================================
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Six Months
Ended Ended
(Unaudited) June 30, June 30,
------------------------------------- -------------------------------
2007 2006 2007 2006
------ --------------- -------
Earnings per share from continuing
operations:
Basic earnings per share $ 1.28 $ 1.04 $ 2.53 $ 2.20
Diluted earnings per share $ 1.22 $ 1.02 $ 2.43 $ 2.14
Diluted earnings before investment
related gains/ (losses), change
in value of embedded derivatives,
and related deferred acquisition
costs $ 1.31 $ 1.10 $ 2.60 $ 2.19
Earnings per share from net
income:
Basic earnings per share $ 1.25 $ 1.04 $ 2.49 $ 2.17
Diluted earnings per share $ 1.20 $ 1.01 $ 2.39 $ 2.12
Weighted average number of common
and common equivalent shares
outstanding 64,541 62,709 64,219 62,663
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Six Months Ended
(Unaudited) June 30,
-------------------------------------------- -------------------------
2007 2006
----------- -----------
Gross life reinsurance in force (in
billions)
U.S. $ 1,202.8 $ 1,121.7
Canada $ 187.6 $ 148.2
Europe & South Africa $ 361.8 $ 347.2
Asia Pacific $ 329.1 $ 247.3
Gross life reinsurance written (in billions)
U.S. $ 84.4 $ 89.7
Canada $ 21.8 $ 19.1
Europe & South Africa $ 30.8 $ 67.9
Asia Pacific $ 6.5 $ 6.8
Balance sheet information (in millions,
except share and per share figures)
Consolidated cash and invested assets $ 15,911.8 $ 13,713.6
Invested asset book yield - trailing
three months excluding funds withheld 5.90% 5.72%
Investment portfolio mix
Cash and short-term investments 3.73% 2.23%
Fixed maturity securities 54.78% 50.68%
Mortgage loans 5.04% 4.74%
Policy loans 6.40% 7.16%
Funds withheld at interest 28.27% 27.48%
Other invested assets 1.78% 7.71%
Collateral finance facilities $ 850.3 $ 850.3
Short-term debt $ 30.1 $ 27.7
Long-term debt $ 908.7 $ 674.5
Company-obligated mandatorily redeemable
preferred securities of subsidiary $ 158.8 $ 158.6
Total stockholders' equity $ 2,894.6 $ 2,466.0
Less: Accumulated other comprehensive income
"AOCI"(a) 374.5 248.8
----------- -----------
Total stockholders' equity, before impact of
AOCI(a) $ 2,520.1 $ 2,217.2
Treasury shares 1,135,134 1,940,109
Common shares outstanding 61,993,139 61,188,164
Book value per share outstanding $ 46.69 $ 40.30
Book value per share outstanding, before
impact of AOCI(a) $ 40.65 $ 36.24
(a) Book value per share outstanding and total stockholders' equity,
before impact of AOCI, are non-GAAP financial measures that
management believes are important in evaluating the balance sheet
in order to ignore the effects of unrealized amounts primarily
associated with mark-to-market adjustments on investments and foreign
currency translation.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Dollars in thousands)
(Unaudited) Three Months Ended June 30, 2007
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
-------------------------------------------
Revenues:
Net premiums $718,753 $ 1,598 $ -- $720,351
Investment income, net of
related expenses 87,151 117,319 99 204,569
Investment related losses,
net (4,497) (1,144) (7) (5,648)
Change in value of
embedded derivatives -- (7,126) -- (7,126)
Other revenues 300 9,690 5,846 15,836
---------------------------------------
Total revenues 801,707 120,337 5,938 927,982
Benefits and expenses:
Claims and other policy
benefits 594,619 (553) -- 594,066
Interest credited 14,579 98,324 -- 112,903
Policy acquisition costs
and other insurance
expenses 101,807 22,295 2,001 126,103
Change in deferred
acquisition cost
associated with change in
value of embedded
derivatives -- (5,545) -- (5,545)
Other operating expenses 11,604 1,705 931 14,240
----------------------------------------
Total benefits and
expenses 722,609 116,226 2,932 841,767
Income before income
taxes $ 79,098 $ 4,111 $3,006 $ 86,215
========================================
(Unaudited) Three Months Ended June 30, 2006
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
-------------------------------------------
Net premiums $662,301 $ 1,605 $ -- $663,906
Investment income, net of
related expenses 74,657 48,424 (152) 122,929
Investment related losses,
net (2,506) (2,511) -- (5,017)
Change in value of
embedded derivatives -- (11,075) -- (11,075)
Other revenues 276 3,908 7,460 11,644
----------------------------------------
Total revenues 734,728 40,351 7,308 782,387
Benefits and expenses:
Claims and other policy
benefits 545,640 727 -- 546,367
Interest credited 11,796 31,930 -- 43,726
Policy acquisition costs
and other insurance
expenses 101,229 14,539 2,326 118,094
Change in deferred
acquisition cost
associated with change in
value of embedded
derivatives -- (7,982) -- (7,982)
Other operating expenses 8,732 1,413 1,102 11,247
----------------------------------------
Total benefits and
expenses 667,397 40,627 3,428 711,452
Income before
income taxes $ 67,331 $ (276) $3,880 $ 70,935
========================================
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Dollars in thousands)
(Unaudited) Six Months Ended June 30, 2007
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
---------------------------------------------
Revenues:
Net premiums $1,388,172 $ 3,224 $ -- $1,391,396
Investment income, net
of related expenses 172,079 185,271 119 357,469
Investment related
losses, net (4,835) (1,927) (7) (6,769)
Change in value of
embedded derivatives -- (4,288) -- (4,288)
Other revenues 406 17,114 11,735 29,255
--------------------------------------------
Total revenues 1,555,822 199,394 11,847 1,767,063
Benefits and expenses:
Claims and other policy
benefits 1,137,205 3,970 1 1,141,176
Interest credited 28,849 144,482 -- 173,331
Policy acquisition costs
and other insurance
expenses 201,187 42,481 4,195 247,863
Change in deferred
acquisition cost
associated with change
in value of embedded
derivatives -- (3,438) -- (3,438)
Other operating expenses 23,472 3,326 1,941 28,739
--------------------------------------------
Total benefits and
expenses 1,390,713 190,821 6,137 1,587,671
Income before income
taxes $ 165,109 $ 8,573 $5,710 $ 179,392
============================================
(Unaudited) Six Months Ended June 30, 2006
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
----------- --------- ----------- -----------
Net premiums $1,274,138 $ 3,079 $ -- $1,277,217
Investment income, net
of related expenses 145,699 119,321 (155) 264,865
Investment related
losses, net (3,735) (5,844) -- (9,579)
Change in value of
embedded derivatives -- (6,523) -- (6,523)
Other revenues (44) 7,197 14,806 21,959
--------------------------------------------
Total revenues 1,416,058 117,230 14,651 1,547,939
Benefits and expenses:
Claims and other policy
benefits 1,053,786 (142) 1 1,053,645
Interest credited 23,283 81,467 -- 104,750
Policy acquisition costs
and other insurance
expenses 183,401 30,934 4,660 218,995
Change in deferred
acquisition cost
associated with change
in value of embedded
derivatives -- (5,225) -- (5,225)
Other operating expenses 18,858 3,189 2,456 24,503
--------------------------------------------
Total benefits and
expenses 1,279,328 110,223 7,117 1,396,668
Income before income
taxes $ 136,730 $ 7,007 $7,534 $ 151,271
============================================
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Canada Operations
(Dollars in thousands)
Three Months
Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2007 2006
----------------
Revenues:
Net premiums $122,580 $ 97,120
Investment income, net of related expenses 32,363 25,998
Investment related gains, net 1,648 2,345
Other revenues 93 767
----------------
Total revenues 156,684 126,230
Benefits and expenses:
Claims and other policy benefits 105,667 95,449
Interest credited 185 207
Policy acquisition costs and other insurance
expenses 21,343 15,769
Other operating expenses 5,287 3,731
----------------
Total benefits and expenses 132,482 115,156
Income before income taxes $ 24,202 $ 11,074
================
Six Months Ended
(Unaudited) June 30,
2007 2006
----------------
Revenues:
Net premiums $222,072 $191,522
Investment income, net of related expenses 58,795 51,303
Investment related gains, net 4,432 2,146
Other revenues 179 767
----------------
Total revenues 285,478 245,738
Benefits and expenses:
Claims and other policy benefits 196,815 184,528
Interest credited 371 412
Policy acquisition costs and other insurance
expenses 39,819 33,589
Other operating expenses 9,237 7,704
----------------
Total benefits and expenses 246,242 226,233
Income before income taxes $ 39,236 $ 19,505
================
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe & South Africa
(Dollars in thousands)
Three Months Ended
----------------------------------------------------------------------
(Unaudited) June 30,
2007 2006
-----------------
Revenues:
Net premiums $164,796 $146,073
Investment income, net of related expenses 7,103 3,873
Investment related losses, net (630) (181)
Other revenues (27) (178)
-----------------
Total revenues 171,242 149,587
Benefits and expenses:
Claims and other policy benefits 128,828 101,034
Interest credited 564 156
Policy acquisition costs and other insurance
expenses 17,129 21,821
Other operating expenses 12,875 9,307
-----------------
Total benefits and expenses 159,396 132,318
Income before income taxes $ 11,846 $ 17,269
=================
Six Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2007 2006
-----------------
Revenues:
Net premiums $332,592 $291,224
Investment income, net of related expenses 12,877 7,265
Investment related losses, net (854) (147)
Other revenues 104 (87)
-----------------
Total revenues 344,719 298,255
Benefits and expenses:
Claims and other policy benefits 242,982 206,680
Interest credited 1,016 346
Policy acquisition costs and other insurance
expenses 43,189 41,078
Other operating expenses 24,562 18,085
-----------------
Total benefits and expenses 311,749 266,189
Income before income taxes $ 32,970 $ 32,066
=================
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2007 2006
------------------
Revenues:
Net premiums $198,971 $168,852
Investment income, net of related expenses 8,610 6,822
Investment related losses, net (499) (92)
Other revenues 2,583 1,581
------------------
Total revenues 209,665 177,163
Benefits and expenses:
Claims and other policy benefits 151,664 131,866
Policy acquisition costs and other insurance
expenses 28,173 27,567
Other operating expenses 14,219 10,005
------------------
Total benefits and expenses 194,056 169,438
Income before income taxes $ 15,609 $ 7,725
==================
Six Months Ended
(Unaudited) June 30,
2007 2006
------------------
Revenues:
Net premiums $385,809 $308,065
Investment income, net of related expenses 17,273 13,318
Investment related losses, net (570) (77)
Other revenues 4,410 3,491
------------------
Total revenues 406,922 324,797
Benefits and expenses:
Claims and other policy benefits 302,147 242,222
Policy acquisition costs and other insurance
expenses 52,787 49,572
Other operating expenses 26,047 18,664
------------------
Total benefits and expenses 380,981 310,458
Income before income taxes $ 25,941 $ 14,339
==================
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Corporate and Other
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2007 2006
-----------------
Revenues:
Net premiums $ 948 $ 652
Investment income, net of related expenses 22,257 8,983
Investment related losses, net (1,963) (2,369)
Other revenues 1,961 (97)
-----------------
Total revenues 23,203 7,169
Benefits and expenses:
Claims and other policy benefits 113 (185)
Interest credited -- 643
Policy acquisition costs and other insurance
expenses (9,187) (10,551)
Other operating expenses 9,998 11,540
Interest expense 23,232 15,014
Collateral finance facilities expense 13,206 277
-----------------
Total benefits and expenses 37,362 16,738
Income before income taxes $(14,159)$ (9,569)
=================
Six Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2007 2006
-----------------
Revenues:
Net premiums $ 1,227 $ 1,017
Investment income, net of related expenses 44,231 18,795
Investment related gains/(losses), net (11,815) 2,975
Other revenues 5,600 2,117
-----------------
Total revenues 39,243 24,904
Benefits and expenses:
Claims and other policy benefits 28 (1,031)
Interest credited -- 753
Policy acquisition costs and other insurance
expenses (19,223) (18,730)
Other operating expenses 23,456 23,401
Interest expense 43,685 31,781
Collateral finance facilities expense 25,893 277
-----------------
Total benefits and expenses 73,839 36,451
Income before income taxes $(34,596)$(11,547)
=================
CONTACT: Reinsurance Group of America, Incorporated
Jack B. Lay, 636-736-7000
Senior Executive Vice President
and Chief Financial Officer
SOURCE: Reinsurance Group of America, Incorporated