Reinsurance Group of America Reports Second-Quarter Results
ST. LOUIS--(BUSINESS WIRE)--July 24, 2006--Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported net income for the second quarter of $63.6 million, or $1.01 per diluted share, compared to $21.8 million, or $0.34 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 $69.1 million, or $1.10 per diluted share, from $20.1 million, or $0.32 per diluted share in the year-ago quarter. Second-quarter net premiums rose 16 percent, to $1,076.6 million, from $931.4 million a year ago. Net investment income totaled $168.6 million versus $146.3 million the year before.
A. Greig Woodring, president and chief executive officer, commented, "Our consolidated results were good, including strong premium growth. The U.S. segment reported solid earnings with pre-tax net income totaling $70.9 million for the quarter versus $27.3 million the year before. Pre-tax operating income rose to $78.5 million from $37.8 million the year before. Prior-year results were adversely affected by an unusually high dollar volume of large claims. Mortality experience for the current quarter was somewhat high, but within our range of expectations. Net premiums were up 15 percent to $663.9 million from $575.8 million. That rate of increase year-to-date totals 12 percent."
For the first half of 2006, net income totaled $132.7 million, or $2.12 per diluted share, compared to $88.4 million, or $1.39 per diluted share, in the year-ago period. Operating income totaled $137.5 million, or $2.19 per diluted share, compared to $80.5 million, or $1.26 per diluted share in the prior-year period. Consolidated premiums were up 13 percent, to $2,069.0 million from $1,833.2 million. Woodring commented, "We are pleased with the results in the first half of the year and believe the markets in which we operate will continue to offer attractive opportunities throughout the remainder of the year.
"Turning back to the second-quarter results, our Canada operations reported pre-tax net income of $11.1 million compared to $10.8 million a year ago. Pre-tax operating income was down 2 percent to $8.9 million from $9.1 million. Mortality experience was adversely affected by large claims, but we expect claims flow to return to more normalized levels in subsequent periods. Net premiums increased 26 percent to $97.1 million from $76.9 million. Current quarter net premiums and pre-tax operating income benefited from a favorable currency exchange rate relative to the prior year by approximately $9.4 million and $0.9 million, respectively.
"Other International operations, which include our Asia Pacific and Europe and South Africa segments, were mixed, with strong results in Europe and South Africa more than offsetting slightly weaker-than-expected results in Asia Pacific.
"Asia Pacific reported pre-tax net income of $7.7 million compared with pre-tax net income of $11.4 million in the year-ago quarter. Pre-tax operating income decreased to $7.8 million from $11.3 million. Segment-wide claims experience was somewhat higher-than-expected. Net premiums increased 16 percent to $168.9 million from $145.0 million. Foreign currency fluctuations relative to prior year adversely affected net premiums and pre-tax operating income by approximately $3.0 million and $0.3 million, respectively.
"As was the case in the first quarter of the year, bottom-line results in Europe and South Africa were strong, driven primarily by favorable mortality experience in the UK. Pre-tax net income totaled $17.3 million compared to a pre-tax net loss of $6.8 million a year ago, when we experienced unfavorable mortality fluctuations. Pre-tax operating income improved to $17.4 million from a pre-tax operating loss of $6.7 million. Net premiums increased 10 percent for the quarter to $146.1 million, a good result considering the slowdown in the UK's primary insurance market. Foreign currency exchange fluctuations adversely affected reported net premiums and pre-tax operating income by approximately $1.8 million and $0.3 million, respectively."
Woodring concluded, "During June, we announced a securitization transaction which locks in long-term financing for statutory-based U.S. term life reserves at a rate similar to our existing short-term financing rate. A newly formed subsidiary, Timberlake Financial, L.L.C., issued $850.0 million of 30-year, floating-rate notes. The notes are covered by a third-party financial guarantee insurance policy and there is no recourse to RGA or its other subsidiaries. The transaction helps diversify our statutory reserve funding sources and eliminates refinancing risk. We were very pleased with the terms and execution of this securitization."
The company also announced that its board of directors declared a regular quarterly dividend of $0.09, payable August 25 to shareholders of record as of August 4.
A conference call to discuss the company's second-quarter results will begin at 9 a.m. Eastern Time on Tuesday, July 25. Interested parties may access the call by dialing 800-210-9006 (domestic) or 719- 457-2621 (international). The access code is 5499974. 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 2 at 888-203-1112 (domestic) or 719-457-0820, access code 5499974.
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, Bermuda, China, Hong Kong, India, Ireland, Japan, Mexico, South Africa, South Korea, Spain, Taiwan, and the United Kingdom. Worldwide, the company has approximately $1.9 trillion of life reinsurance in force, and assets of $17.8 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 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)
(Unaudited) Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
GAAP net income-continuing
operations $63,789 $25,160 $134,369 $92,424
Investment related
(gains)/losses 3,643 (11,994) 3,082 (14,726)
Change in value of embedded
derivatives 7,198 12,945 4,239 (1,719)
DAC offset for embedded
derivatives and investment
related (gains)/losses, net (5,563) (6,004) (4,169) 4,549
Operating income $69,067 $20,107 $137,521 $80,528
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, 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
Asia Pacific Operations 7,725 92 -- 7,817
Europe & South Africa 17,269 181 -- 17,450
Other Intl Operations 24,994 273 -- 25,267
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.
(Unaudited) Three Months Ended June 30, 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 $29,202 $ 2,633 $ -- $ 31,835
Asset Intensive (5,576) 1,560(1) 6,313(2) 2,297
Financial Reinsurance 3,636 5 -- 3,641
Total U.S. 27,262 4,198 6,313 37,773
Canada Operations 10,797 (1,648) -- 9,149
Asia Pacific Operations 11,376 (101) -- 11,275
Europe & South Africa (6,844) 180 -- (6,664)
Other Intl Operations 4,532 79 -- 4,611
Corporate & Other (9,982) (12,834)(3) -- (22,816)
Consolidated $32,609 $(10,205) $6,313 $ 28,717
(1) Asset Intensive is net of $(322)DAC offset
(2) Asset Intensive is net of DAC offsets of $(13,604)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
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, 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
Asia Pacific Operations 14,339 77 -- 14,416
Europe & South Africa 32,066 147 -- 32,213
Other Intl Operations 46,405 224 -- 46,629
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.
(Unaudited) Six Months Ended June 30, 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 $ 78,690 $ 3,664 $ -- $ 82,354
Asset Intensive 10,126 (1,429)(1) (540)(2) 8,157
Financial Reinsurance 6,942 7 -- 6,949
Total U.S. 95,758 2,242 (540) 97,460
Canada Operations 26,459 (2,283) -- 24,176
Asia Pacific Operations 14,286 (54) -- 14,232
Europe & South Africa 7,669 166 -- 7,835
Other Intl Operations 21,955 112 -- 22,067
Corporate & Other (11,028) (13,728)(3) -- (24,756)
Consolidated $133,144 $(13,657) $ (540) $118,947
(1) Asset Intensive is net of $205 DAC offset.
(2) Asset Intensive is net of DAC offsets of $2,104 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 Six Months Ended
(Unaudited) June 30, June 30,
2006 2005 2006 2005
Revenues:
Net premiums $1,076,603 $ 931,354 $2,069,045 $1,833,174
Investment income, net
of related expenses 168,605 146,284 355,546 303,337
Investment related
gains/(losses), net (5,314) 12,950 (4,682) 16,929
Change in value of
embedded derivatives (11,075) (19,917) (6,523) 2,644
Other revenues 13,717 20,661 28,247 31,464
Total revenues 1,242,536 $1,091,332 2,441,633 2,187,548
Benefits and expenses:
Claims and other
policy benefits 874,531 827,930 1,686,044 1,565,983
Interest credited 44,732 38,615 106,261 93,668
Policy acquisition
costs and other
insurance expenses 172,700 157,855 324,504 301,831
Change in deferred
acquisition cost
associated with
change in value of
embedded derivatives (7,982) (13,604) (5,225) 2,104
Other operating expenses 45,830 38,032 92,357 71,038
Collateral finance
facilities expense 277 -- 277 --
Interest expense 15,014 9,895 31,781 19,780
Total benefits
and expenses 1,145,102 1,058,723 2,235,999 2,054,404
Income from continuing
operations before
income taxes 97,434 32,609 205,634 133,144
Provision for income
taxes 33,645 7,449 71,265 40,720
Income from continuing
operations 63,789 25,160 134,369 92,424
Discontinued operations:
Loss from discontinued
accident and health
operations, net of
income taxes (158) (3,343) (1,668) (4,050)
Net income $ 63,631 $ 21,817 $ 132,701 $ 88,374
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
2006 2005 2006 2005
Earnings per share from
continuing operations:
Basic earnings per share $ 1.04 $ 0.40 $ 2.20 $ 1.48
Diluted earnings per share $ 1.02 $ 0.39 $ 2.14 $ 1.45
Diluted earnings before
realized investment gains/
(losses), change in value
of embedded derivatives,
and related deferred
acquisition costs $ 1.10 $ 0.32 $ 2.19 $ 1.26
Earnings per share from
net income:
Basic earnings per share $ 1.04 $ 0.35 $ 2.17 $ 1.41
Diluted earnings per share $ 1.01 $ 0.34 $ 2.12 $ 1.39
Weighted average number of
common and common equivalent
shares outstanding
(in thousands) 62,709 63,764 62,663 63,806
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Six Months Ended
(Unaudited) June 30,
2006 2005
Gross life reinsurance in force (in billions)
North American business $ 1,269.9 $ 1,139.4
International business $ 594.5 $ 453.8
Gross life reinsurance written (in billions)
North American business $ 108.8 $ 96.8
International business $ 74.7 $ 69.5
Consolidated cash and invested assets
(in millions) $13,713.6 $11,341.2
Invested asset book yield - trailing
three months excluding funds withheld 5.72% 5.99%
Investment portfolio mix
Cash and short-term investments 8.45% 1.70%
Fixed maturity securities 50.68% 55.72%
Mortgage loans 4.74% 5.54%
Policy loans 7.16% 8.40%
Funds withheld at interest 27.48% 26.63%
Other invested assets 1.49% 2.01%
Collateral finance facilities (in millions) $ 850.3 $ --
Short-term debt (in millions) $ 27.7 $ 176.6
Long-term debt (in millions) $ 674.5 $ 226.8
Company-obligated mandatorily
redeemable preferred securities
of subsidiary (in millions) $ 158.6 $ 158.5
Book value per share outstanding $ 40.30 $ 39.60
Book value per share outstanding, before
impact of FAS 115(a) $ 38.16 $ 33.39
Total stockholders' equity (in millions) 2,466.0 2,480.7
Total stockholders' equity, before
impact of FAS 115(a)(in millions) 2,335.1 2,091.2
Treasury shares 1,940,109 489,640
Common stock outstanding 61,188,164 62,638,633
(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 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 ac-
quisition 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
(Unaudited) Three Months Ended June 30, 2005
Asset Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $574,695 $ 1,117 $ -- $575,812
Investment income, net
of related expenses 66,172 41,041 92 107,305
Investment related
losses, net (2,633) (1,882) (5) (4,520)
Change in value of
embedded derivatives -- (19,917) -- (19,917)
Other revenues 145 2,797 7,007 9,949
Total revenues 638,379 23,156 7,094 668,629
Benefits and expenses:
Claims and other
policy benefits 497,019 4,933 -- 501,952
Interest credited 14,303 23,730 -- 38,033
Policy acquisition costs
and other insurance
expenses 87,817 12,437 2,113 102,367
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- (13,604) -- (13,604)
Other operating expenses 10,038 1,236 1,345 12,619
Total benefits
and expenses 609,177 28,732 3,458 641,367
Income before
income taxes $ 29,202 $(5,576) $3,636 $ 27,262
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Dollars in thousands)
(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
Realized investment
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 ac-
quisition 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
(Unaudited) Six Months Ended June 30, 2005
Asset Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $1,141,489 $ 2,341 $ -- $1,143,830
Investment income, net
of related expenses 129,497 97,695 162 227,354
Realized investment
gain/(losses),net (3,664) 1,634 (7) (2,037)
Change in value of
embedded derivatives -- 2,644 -- 2,644
Other revenues 711 3,844 13,645 18,200
Total revenues 1,268,033 108,158 13,800 1,389,991
Benefits and expenses:
Claims and other
policy benefits 980,281 3,249 2 983,532
Interest credited 28,310 63,981 -- 92,291
Policy acquisition
costs and other
insurance expenses 161,455 26,124 4,074 191,653
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- 2,104 -- 2,104
Other operating expenses 19,297 2,574 2,782 24,653
Total benefits and
expenses 1,189,343 98,032 6,858 1,294,233
Income before
income taxes $ 78,690 $ 10,126 $6,942 $ 95,758
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CANADIAN OPERATIONS
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $ 97,120 $ 76,854
Investment income, net of related expenses 25,998 22,372
Investment related gains, net 2,345 1,667
Other revenues 767 19
Total revenues 126,230 100,912
Benefits and expenses:
Claims and other policy benefits 95,449 74,252
Interest credited 207 252
Policy acquisition costs and other
insurance expenses 15,769 11,992
Other operating expenses 3,731 3,619
Total benefits and expenses 115,156 90,115
Income before income taxes $ 11,074 $ 10,797
Six Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $191,522 $150,610
Investment income, net of related expenses 51,303 44,909
Realized investment gains, net 2,146 2,302
Other revenues 767 53
Total revenues 245,738 197,874
Benefits and expenses:
Claims and other policy benefits 184,528 142,897
Interest credited 412 609
Policy acquisition costs and other
insurance expenses 33,589 20,830
Other operating expenses 7,704 7,079
Total benefits and expenses 226,233 171,415
Income before income taxes $ 19,505 $ 26,459
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe & South Africa
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $146,073 $132,972
Investment income, net of related expenses 3,873 2,502
Investment related losses, net (181) (180)
Other revenues (178) 69
Total revenues 149,587 135,363
Benefits and expenses:
Claims and other policy benefits 101,034 112,117
Interest credited 156 190
Policy acquisition costs and other
insurance expenses 21,821 22,782
Other operating expenses 9,307 7,118
Total benefits and expenses 132,318 142,207
Income before income taxes $ 17,269 $ (6,844)
Six Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $291,224 $274,330
Investment income, net of related expenses 7,265 5,030
Realized investment losses, net (147) (166)
Other revenues (87) 170
Total revenues 298,255 279,364
Benefits and expenses:
Claims and other policy benefits 206,680 208,449
Interest credited 346 553
Policy acquisition costs and other
insurance expenses 41,078 49,915
Other operating expenses 18,085 12,778
Total benefits and expenses 266,189 271,695
Income before income taxes $ 32,066 $ 7,669
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $168,852 $145,018
Investment income, net of related expenses 6,822 5,269
Investment related gains/(losses), net (92) 101
Other revenues 1,581 2,135
Total revenues 177,163 152,523
Benefits and expenses:
Claims and other policy benefits 131,866 110,617
Policy acquisition costs and other
insurance expenses 27,567 23,371
Other operating expenses 10,005 7,159
Total benefits and expenses 169,438 141,147
Income before income taxes $ 7,725 $ 11,376
Six Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $308,065 $263,226
Investment income, net of related expenses 13,318 10,009
Realized investment gains/(losses), net (77) 54
Other revenues 3,491 1,948
Total revenues 324,797 275,237
Benefits and expenses:
Claims and other policy benefits 242,222 201,277
Policy acquisition costs and other
insurance expenses 49,572 47,841
Other operating expenses 18,664 11,833
Total benefits and expenses 310,458 260,951
Income before income taxes $ 14,339 $ 14,286
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CORPORATE AND OTHER
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $ 652 $ 698
Investment income, net of related expenses 8,983 8,836
Investment related gains/(losses), net (2,369) 15,882
Other revenues (97) 8,489
Total revenues 7,169 33,905
Benefits and expenses:
Claims and other policy benefits (185) 28,992
Interest credited 643 140
Policy acquisition costs and other
insurance expenses (10,551) (2,657)
Other operating expenses 11,540 7,517
Collateral finance facilities expense 277 --
Interest expense 15,014 9,895
Total benefits and expenses 16,738 43,887
Income before income taxes $(9,569) $(9,982)
Six Months Ended
(Unaudited) June 30,
2006 2005
Revenues:
Net premiums $ 1,017 $ 1,178
Investment income, net of related expenses 18,795 16,035
Realized investment gains, net 2,975 16,776
Other revenues 2,117 11,093
Total revenues 24,904 45,082
Benefits and expenses:
Claims and other policy benefits (1,031) 29,828
Interest credited 753 215
Policy acquisition costs and other
insurance expenses (18,730) (8,408)
Other operating expenses 23,401 14,695
Collateral finance facilities expense 277 --
Interest expense 31,781 19,780
Total benefits and expenses 36,451 56,110
Income before income taxes $(11,547) $(11,028)
CONTACT: Reinsurance Group of America, Incorporated
Jack B. Lay, 636-736-7439
SOURCE: Reinsurance Group of America, Incorporated