Reinsurance Group of America Reports Third-Quarter Results
ST. LOUIS, Oct 23, 2006 (BUSINESS WIRE) -- Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported net income for the third quarter of $74.0 million, or $1.17 per diluted share, compared to $67.6 million, or $1.06 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 $74.7 million, or $1.18 per diluted share, from $71.8 million, or $1.13 per diluted share in the year-ago quarter. Third-quarter net premiums rose 11 percent, to $1,076.2 million, from $973.5 million a year ago. Net investment income totaled $183.4 million versus $166.5 million the year before.
A. Greig Woodring, president and chief executive officer, commented, "We are pleased with the results for the quarter. Each of our operating segments contributed to solid top and bottom-line results and our international operations continue to increase their contribution to the consolidated results.
"The U.S. segment reported solid earnings with pre-tax net income totaling $84.8 million for the quarter versus $85.8 million the year before. Pre-tax operating income totaled $84.9 million versus $86.7 million the year before. Prior-year results were quite strong, with favorable mortality. Mortality experience for the current quarter was within our range of expectations. Net premiums were up 6 percent to $648.1 million from $611.4 million in the prior-year quarter, when premium levels were quite strong. Through nine months, premiums increased 10 percent, at the top end of our expected range."
For the first nine months of 2006, consolidated net income totaled $206.7 million, or $3.29 per diluted share, compared to $156.0 million, or $2.45 per diluted share, in the year-ago period. Operating income increased 39 percent to $212.2 million, or $3.38 per diluted share, from $152.3 million, or $2.39 per diluted share in the prior-year period. Consolidated premiums were up 12 percent, to $3,145.2 million from $2,806.7 million. Woodring commented, "Year-to-date results are tracking well as we enter the fourth quarter. We do not anticipate any meaningful changes in competition or the pricing environment during the remainder of the year.
"Turning back to the third-quarter results, our Canada operations reported pre-tax net income of $13.5 million compared to $11.7 million a year ago. Pre-tax operating income increased to $12.1 million from $11.1 million. Claims flow returned to more normalized levels compared to the first six months of the year. Net premiums increased 16 percent to $103.3 million from $89.1 million. Net premiums and pre-tax operating income for the 2006 period benefited from a favorable currency exchange rate relative to the prior year by approximately $6.8 million and $1.2 million, respectively.
"Other International operations, which include our Asia Pacific and Europe and South Africa segments, were mixed, with strong results in Asia Pacific more than offsetting weaker-than-expected results in Europe and South Africa.
"Asia Pacific reported pre-tax net income and pre-tax operating income of $20.4 million compared with $1.4 million in the year-ago quarter. Segment-wide claims experience was good during the current quarter, while the prior-year quarter claims experience was unfavorable which led to the increased earnings level. Stronger premium flow also contributed to the bottom line as net premiums increased 32 percent to $178.5 million from $135.3 million. Foreign currency fluctuations favorably affected net premiums and pre-tax operating income by approximately $1.7 million and $0.1 million, respectively.
"Europe and South Africa results were down for the quarter, with pre-tax net income totaling $8.8 million compared to $15.7 million a year ago, when mortality experience was quite favorable. Pre-tax operating income totaled $8.9 million versus $15.7 million last year. Net premiums increased 6 percent for the quarter to $145.8 million. Foreign currency exchange fluctuations favorably affected reported net premiums and pre-tax operating income by approximately $4.6 million and $0.3 million, respectively. Year-to-date, however, Europe and South Africa results were very strong."
Woodring concluded, "Our performance so far this year has been very gratifying and reflects RGA's continued evolution toward a global leadership franchise in life reinsurance. We have also created significant shareholder value with year-over-year book value per share growth that exceeds 12 percent."
The company also announced that its board of directors declared a regular quarterly dividend of $0.09, payable November 29 to shareholders of record as of November 8.
A conference call to discuss the company's third-quarter results will begin at 9 a.m. Eastern Time on Tuesday, October 24. Interested parties may access the call by dialing 800-210-9006 (domestic) or 719-457-2621 (international). The access code is 1559244. 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 October 31 at 888-203-1112 (domestic) or 719-457-0820, access code 1559244.
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 $18.5 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 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 Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
GAAP net income-continuing
operations $ 75,574 $ 73,519 $209,943 $165,943
Investment related
(gains)/losses 185 (2,014) 3,267 (16,740)
Change in value of embedded
derivatives (2,776) (2,298) 1,463 (4,017)
DAC offset for embedded
derivatives and investment
related (gains)/losses, net 1,706 2,613 (2,463) 7,162
Operating income $ 74,689 $ 71,820 $212,210 $152,348
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 September 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 $ 75,757 $ (200) $ -- $ 75,557
Asset Intensive 5,277 1,736(1) (1,386)(2) 5,627
Financial Reinsurance 3,768 (4) -- 3,764
Total U.S. 84,802 1,532 (1,386) 84,948
Canada Operations 13,462 (1,312) -- 12,150
Asia Pacific Operations 20,378 46 -- 20,424
Europe & South Africa 8,813 91 -- 8,904
Other Intl Operations 29,191 137 -- 29,328
Corporate & Other (9,886) (387) -- (10,273)
Consolidated $117,569 $ (30) $ (1,386) $116,153
(1) Asset Intensive is net of $(262) DAC offset.
(2) Asset Intensive is net of DAC offsets of $2,886 included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(Unaudited) Three Months Ended September 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 $ 79,676 $ 861 $ -- $ 80,537
Asset Intensive 2,702 (243)(1) 322(2) 2,781
Financial Reinsurance 3,413 3 -- 3,416
Total U.S. 85,791 621 322 86,734
Canada Operations 11,690 (618) -- 11,072
Asia Pacific Operations 1,416 (21) -- 1,395
Europe & South Africa 15,727 16 -- 15,743
Other Intl Operations 17,143 (5) -- 17,138
Corporate & Other (1,062) (2,435) -- (3,497)
Consolidated $113,562 $ (2,437) $ 322 $111,447
(1) Asset Intensive is net of $162 DAC offset
(2) Asset Intensive is net of DAC offsets of $3,858 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) Nine Months Ended September 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 $212,487 $ 3,535 $ -- $216,022
Asset Intensive 12,284 6,391(1) (88)(2) 18,587
Financial Reinsurance 11,302 (4) -- 11,298
Total U.S. 236,073 9,922 (88) 245,907
Canada Operations 32,967 (3,307) -- 29,660
Asia Pacific Operations 34,717 123 -- 34,840
Europe & South Africa 40,879 238 -- 41,117
Other Intl Operations 75,596 361 -- 75,957
Corporate & Other (21,433) (3,362) -- (24,795)
Consolidated $323,203 $ 3,614 $ (88) $326,729
(1) Asset Intensive is net of $(1,451) DAC offset.
(2) Asset Intensive is net of DAC offsets of $(2,339) included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(Unaudited) Nine Months Ended September 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 $158,366 $ 4,525 $ -- $162,891
Asset Intensive 12,828 (1,672)(1) (218)(2) 10,938
Financial Reinsurance 10,355 10 -- 10,365
Total U.S. 181,549 2,863 (218) 184,194
Canada Operations 38,149 (2,901) -- 35,248
Asia Pacific Operations 15,702 (75) -- 15,627
Europe & South Africa 23,396 182 -- 23,578
Other Intl Operations 39,098 107 -- 39,205
Corporate & Other (12,090) (16,163)(3) -- (28,253)
Consolidated $246,706 $(16,094) $ (218) $230,394
(1) Asset Intensive is net of $367 DAC offset.
(2) Asset Intensive is net of DAC offsets of $5,962 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 Nine Months Ended
(Unaudited) September 30, September 30,
2006 2005 2006 2005
Revenues:
Net premiums $1,076,191 $ 973,532 $3,145,236 $2,806,706
Investment income, net
of related expenses 183,357 166,456 538,903 469,793
Investment related
gains/(losses), net (125) 2,659 (4,807) 19,588
Change in value of
embedded derivatives 4,272 3,536 (2,251) 6,180
Other revenues 18,788 12,234 47,035 43,698
Total revenues 1,282,483 1,158,417 3,724,116 3,345,965
Benefits and expenses:
Claims and other
policy benefits 846,908 774,336 2,532,952 2,340,319
Interest credited 43,582 59,919 149,843 153,587
Policy acquisition
costs and other
insurance expenses 188,731 158,698 513,235 460,529
Change in deferred
acquisition cost
associated with
change in value of
embedded derivatives 2,886 3,858 (2,339) 5,962
Other operating expenses 54,568 37,992 146,925 109,030
Collateral finance
facilities expense 13,136 -- 13,413 --
Interest expense 15,103 10,052 46,884 29,832
Total benefits
and expenses 1,164,914 1,044,855 3,400,913 3,099,259
Income from continuing
operations before
income taxes 117,569 113,562 323,203 246,706
Provision for income
taxes 41,995 40,043 113,260 80,763
Income from continuing
operations 75,574 73,519 209,943 165,943
Discontinued operations:
Loss from discontinued
accident and health
operations, net of
income taxes (1,539) (5,890) (3,207) (9,940)
Net income $ 74,035 $ 67,629 $ 206,736 $ 156,003
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Nine Months Ended
(Unaudited) September 30, September 30,
2006 2005 2006 2005
Earnings per share from
continuing operations:
Basic earnings per share $ 1.23 $ 1.17 $ 3.43 $ 2.65
Diluted earnings per share $ 1.20 $ 1.15 $ 3.34 $ 2.60
Diluted earnings before
investment related gains/
(losses), change in value
of embedded derivatives,
and related deferred
acquisition costs $ 1.18 $ 1.13 $ 3.38 $ 2.39
Earnings per share from
net income:
Basic earnings per share $ 1.21 $ 1.08 $ 3.38 $ 2.49
Diluted earnings per share $ 1.17 $ 1.06 $ 3.29 $ 2.45
Weighted average number of
common and common equivalent
shares outstanding
63,105 63,653 62,811 63,756
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Nine Months Ended
(Unaudited) September 30,
2006 2005
Gross life reinsurance in force (in billions)
North American business $ 1,299.7 $ 1,189.5
International business $ 599.4 $ 467.7
Gross life reinsurance written (in billions)
North American business $ 160.8 $ 161.4
International business $ 118.8 $ 101.6
Consolidated cash and invested assets
(in millions) $ 14,351.3 $ 11,756.1
Invested asset book yield - trailing
three months excluding funds withheld 5.79% 5.89%
Investment portfolio mix
Cash and short-term investments 2.05% 1.50%
Fixed maturity securities 57.77% 55.29%
Mortgage loans 4.67% 5.39%
Policy loans 6.72% 7.95%
Funds withheld at interest 27.26% 27.88%
Other invested assets 1.53% 1.99%
Collateral finance facilities (in millions)$ 850.3 $ --
Short-term debt (in millions) $ 28.1 $ 126.6
Long-term debt (in millions) $ 674.7 $ 276.4
Company-obligated mandatorily
redeemable preferred securities
of subsidiary (in millions) $ 158.7 $ 158.5
Book value per share outstanding $ 45.22 $ 40.33
Book value per share outstanding, before
impact of FAS 115(a) $ 39.29 $ 34.81
Total stockholders' equity (in millions) 2,775.0 2,526.3
Total stockholders' equity, before
impact of FAS 115(a) (in millions) 2,411.0 2,180.7
Treasury shares 1,761,365 487,640
Common stock outstanding 61,366,908 62,640,633
(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 September 30, 2006
Asset Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $ 646,529 $ 1,559 $ -- $ 648,088
Investment income, net
of related expenses 76,900 48,473 (7) 125,366
Investment related
gains/(losses), net 200 (1,998) 4 (1,794)
Change in value of
embedded derivatives -- 4,272 -- 4,272
Other revenues 271 7,263 7,584 15,118
Total revenues 723,900 59,569 7,581 791,050
Benefits and expenses:
Claims and other
policy benefits 514,259 1,069 3 515,331
Interest credited 12,337 30,824 -- 43,161
Policy acquisition costs
and other insurance
expenses 109,213 17,644 2,392 129,249
Change in deferred ac-
quisition cost associated
with change in value
of embedded derivatives -- 2,886 -- 2,886
Other operating expenses 12,334 1,869 1,418 15,621
Total benefits
and expenses 648,143 54,292 3,813 706,248
Income before
income taxes $ 75,757 $ 5,277 $ 3,768 $ 84,802
(Unaudited) Three Months Ended September 30, 2005
Asset Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $ 610,242 $ 1,147 $ -- $ 611,389
Investment income, net
of related expenses 69,011 59,776 157 128,944
Investment related
gains/(losses),net (861) 405 (3) (459)
Change in value of
embedded derivatives -- 3,536 -- 3,536
Other revenues 185 2,116 6,654 8,955
Total revenues 678,577 66,980 6,808 752,365
Benefits and expenses:
Claims and other
policy benefits 484,493 860 3 485,356
Interest credited 13,553 45,828 -- 59,381
Policy acquisition costs
and other insurance
expenses 90,696 12,559 2,105 105,360
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- 3,858 -- 3,858
Other operating expenses 10,159 1,173 1,287 12,619
Total benefits
and expenses 598,901 64,278 3,395 666,574
Income before
income taxes $ 79,676 $ 2,702 $ 3,413 $ 85,791
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Dollars in thousands)
(Unaudited) Nine Months Ended September 30, 2006
Asset Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $1,920,667 $ 4,638 $ -- $1,925,305
Investment income, net
of related expenses 222,599 167,794 (162) 390,231
Investment related
gains/(losses), net (3,535) (7,842) 4 (11,373)
Change in value of
embedded derivatives -- (2,251) -- (2,251)
Other revenues 227 14,460 22,390 37,077
Total revenues 2,139,958 176,799 22,232 2,338,989
Benefits and expenses:
Claims and other
policy benefits 1,568,045 927 4 1,568,976
Interest credited 35,620 112,291 -- 147,911
Policy acquisition
costs and other
insurance expenses 292,614 48,578 7,052 348,244
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- (2,339) -- (2,339)
Other operating expenses 31,192 5,058 3,874 40,124
Total benefits and
expenses 1,927,471 164,515 10,930 2,102,916
Income before
income taxes $ 212,487 $ 12,284 $ 11,302 $ 236,073
(Unaudited) Nine Months Ended September 30, 2005
Asset Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
Net premiums $1,751,731 $ 3,488 $ -- $1,755,219
Investment income, net
of related expenses 198,508 157,471 319 356,298
Investment related
gains/(losses),net (4,525) 2,039 (10) (2,496)
Change in value of
embedded derivatives -- 6,180 -- 6,180
Other revenues 896 5,960 20,299 27,155
Total revenues 1,946,610 175,138 20,608 2,142,356
Benefits and expenses:
Claims and other
policy benefits 1,464,774 4,109 5 1,468,888
Interest credited 41,863 109,809 -- 151,672
Policy acquisition
costs and other
insurance expenses 252,151 38,683 6,179 297,013
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- 5,962 -- 5,962
Other operating expenses 29,456 3,747 4,069 37,272
Total benefits and
expenses 1,788,244 162,310 10,253 1,960,807
Income before
income taxes $ 158,366 $12,828 $ 10,355 $ 181,549
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CANADIAN OPERATIONS
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $103,316 $ 89,074
Investment income, net of related expenses 27,578 22,728
Investment related gains, net 1,419 678
Other revenues (452) (319)
Total revenues 131,861 112,161
Benefits and expenses:
Claims and other policy benefits 95,854 73,810
Interest credited 211 266
Policy acquisition costs and other
insurance expenses 18,146 22,474
Other operating expenses 4,188 3,921
Total benefits and expenses 118,399 100,471
Income before income taxes $ 13,462 $ 11,690
Nine Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $294,838 $239,684
Investment income, net of related expenses 78,881 67,637
Investment related gains, net 3,565 2,980
Other revenues 315 (266)
Total revenues 377,599 310,035
Benefits and expenses:
Claims and other policy benefits 280,382 216,707
Interest credited 623 875
Policy acquisition costs and other
insurance expenses 51,735 43,304
Other operating expenses 11,892 11,000
Total benefits and expenses 344,632 271,886
Income before income taxes $ 32,967 $ 38,149
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe & South Africa
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $145,769 $137,145
Investment income, net of related expenses 4,210 3,184
Investment related losses, net (91) (16)
Other revenues 206 88
Total revenues 150,094 140,401
Benefits and expenses:
Claims and other policy benefits 101,492 97,039
Interest credited 133 109
Policy acquisition costs and other
insurance expenses 28,110 20,262
Other operating expenses 11,546 7,264
Total benefits and expenses 141,281 124,674
Income before income taxes $ 8,813 $ 15,727
Nine Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $436,993 $411,475
Investment income, net of related expenses 11,475 8,214
Investment related losses, net (238) (182)
Other revenues 119 258
Total revenues 448,349 419,765
Benefits and expenses:
Claims and other policy benefits 308,172 305,488
Interest credited 479 662
Policy acquisition costs and other
insurance expenses 69,188 70,177
Other operating expenses 29,631 20,042
Total benefits and expenses 407,470 396,369
Income before income taxes $ 40,879 $ 23,396
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $178,550 $135,336
Investment income, net of related expenses 7,036 5,409
Investment related gains/(losses), net (46) 21
Other revenues 1,243 699
Total revenues 186,783 141,465
Benefits and expenses:
Claims and other policy benefits 134,177 114,059
Policy acquisition costs and other
insurance expenses 20,658 18,758
Other operating expenses 11,570 7,232
Total benefits and expenses 166,405 140,049
Income before income taxes $ 20,378 $ 1,416
Nine Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $486,615 $398,562
Investment income, net of related expenses 20,354 15,418
Investment related gains/(losses), net (123) 75
Other revenues 4,734 2,647
Total revenues 511,580 416,702
Benefits and expenses:
Claims and other policy benefits 376,399 315,336
Policy acquisition costs and other
insurance expenses 70,230 66,599
Other operating expenses 30,234 19,065
Total benefits and expenses 476,863 401,000
Income before income taxes $ 34,717 $ 15,702
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CORPORATE AND OTHER
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $ 468 $ 588
Investment income, net of related expenses 19,167 6,191
Investment related gains, net 387 2,435
Other revenues 2,673 2,811
Total revenues 22,695 12,025
Benefits and expenses:
Claims and other policy benefits 54 4,072
Interest credited 77 163
Policy acquisition costs and other
insurance expenses (7,432) (8,156)
Other operating expenses 11,643 6,956
Collateral finance facilities expense 13,136 --
Interest expense 15,103 10,052
Total benefits and expenses 32,581 13,087
Income before income taxes $ (9,886) $ (1,062)
Nine Months Ended
(Unaudited) September 30,
2006 2005
Revenues:
Net premiums $ 1,485 $ 1,766
Investment income, net of related expenses 37,962 22,226
Investment related gains, net 3,362 19,211
Other revenues 4,790 13,904
Total revenues 47,599 57,107
Benefits and expenses:
Claims and other policy benefits (977) 33,900
Interest credited 830 378
Policy acquisition costs and other
insurance expenses (26,162) (16,564)
Other operating expenses 35,044 21,651
Collateral finance facilities expense 13,413 --
Interest expense 46,884 29,832
Total benefits and expenses 69,032 69,197
Income before income taxes $(21,433) $(12,090)
SOURCE: Reinsurance Group of America, Incorporated
Reinsurance Group of America, Incorporated
Executive Vice President and Chief Financial Officer:
Jack B. Lay, 636-736-7000