Reinsurance Group of America Reports Third-Quarter Results
ST. LOUIS--(BUSINESS WIRE)--Oct. 22, 2007--Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported net income for the third quarter of $76.5 million, or $1.19 per diluted share, compared to $74.0 million, or $1.17 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 28 percent to $95.6 million, or $1.49 per diluted share, from $74.7 million, or $1.18 per diluted share, in the year-ago quarter. On a per share basis, operating income increased 26 percent. Third-quarter net premiums rose 14 percent, to $1,227.9 million, from $1,076.2 million a year ago. Net investment income totaled $190.5 million versus $183.4 million the year before.
For the first nine months of 2007, net income totaled $230.2 million or $3.59 per diluted share, compared to $206.7 million, or $3.29 per diluted share, in the year-ago period. Operating income totaled $262.3 million, or $4.08 per diluted share, compared to $212.2 million, or $3.38 per diluted share, in the prior-year period, a 21 percent increase on a per share basis. Consolidated net premiums were up 13 percent, to $3,561.0 million from $3,145.2 million.
A. Greig Woodring, president and chief executive officer, commented, "We reported solid earnings, with notably strong results in Canada and Asia Pacific more than offsetting slightly high claim levels in the Europe and South Africa operating segment. The U.S. segment reported pre-tax net income totaling $66.2 million for the quarter versus $84.8 million the year before. That decrease is primarily a result of a $13.8 million decrease, net of deferred acquisition costs, in the value of embedded derivatives due to the impact of widening credit spreads in the U.S. debt markets. Additionally, pre-tax net income includes $10.9 million in realized losses, primarily from the sales of investment securities as we refined duration on certain portfolios. Pre-tax operating income increased 6 percent to $89.9 million from $84.9 million the year before. Claim levels were within an expected range in the Traditional segment. Additionally, capital losses on securities sales within the funds withheld portfolios reduced net investment income within the Asset Intensive segment. Net premiums were up 7 percent to $691.9 million from $648.1 million in the prior-year quarter. On a year-to-date basis, net premiums have increased 8 percent.
"Our Canada operations reported another strong quarter on favorable mortality, with pre-tax net income of $22.8 million compared to $13.5 million a year ago. Pre-tax operating income totaled $20.3 million, up substantially from $12.1 million a year ago. Net premiums increased 20 percent to $123.7 million from $103.3 million in the prior year. On a year-to-date basis, premiums are up 17 percent. Net premiums for the third quarter of 2007 were favorably affected by currency exchange rates relative to the prior year by approximately $8.4 million, as the Canadian dollar strengthened relative to the U.S. dollar. The impact of foreign currency fluctuations favorably affected pre-tax operating income by approximately $1.9 million.
"Asia Pacific reported a good quarter as well with strong premium flow and favorable segment-wide claims experience. Pre-tax net income totaled $17.2 million compared with $20.4 million in the year-ago quarter while pre-tax operating income totaled $17.6 million compared with $20.4 million a year ago. The prior-quarter result was quite strong making for a challenging comparison. Net premiums increased 35 percent to $240.5 million from $178.5 million, with particularly strong premium flow in South Korea. Foreign currency fluctuations favorably affected net premiums and pre-tax operating income by approximately $13.6 million and $1.5 million, respectively.
"Europe and South Africa experienced slightly high claim levels. Pre-tax net income totaled $11.7 million compared to $8.8 million a year ago and pre-tax operating income totaled $12.6 million versus $8.9 million last year, a period in which we experienced unfavorable mortality. Net premiums increased 17 percent to $170.8 million. Foreign currency exchange fluctuations favorably affected reported net premiums and pre-tax operating income by approximately $11.4 million and $1.4 million, respectively, due primarily to a relatively strong British pound and euro.
"The Corporate and Other segment benefited by $9.4 million, pretax, primarily from the reversal of accrued interest expense associated with certain tax positions, as required under the accounting guidance commonly referred to as "FIN 48". Those tax positions were favorably resolved during the quarter. Additionally, our consolidated effective tax rate of 33.6 percent was below historical levels due to the resolution of these tax positions and various other tax accrual adjustments. We would expect our effective tax rate to return to a more normal level in the fourth quarter."
Woodring concluded, "We are pleased with the results for the quarter and the first nine months of the year. Each of our segments has performed very well on a year-to-date basis. The RGA franchise continues to be recognized as a preeminent player in the global life reinsurance market and we believe we are well positioned to take advantage of substantial growth opportunities in several international markets. Additionally, we believe we can enhance our already strong positions in the U.S. and Canadian markets through additional product offerings and increased market share."
The company also announced that its board of directors declared a regular quarterly dividend of $0.09, payable November 28 to shareholders of record as of November 7.
A conference call to discuss the company's third-quarter results will begin at 9 a.m. Eastern Time on Tuesday, October 23. Interested parties may access the call by dialing 800-210-9006 (domestic) or 719-457-2621 (international). The access code is 9614741. 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 30 at 888-203-1112 (domestic) or 719-457-0820, access code 9614741.
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 $2.2 trillion of life reinsurance in force, and assets of $21.1 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 Ended Nine Months Ended
September 30, September 30,
---------------------------------------
2007 2006 2007 2006
---- ---- ---- ----
GAAP net income-continuing
operations $ 80,797 $ 75,574 $236,771 $209,943
Investment related losses, net 6,413 185 16,733 3,267
Change in value of embedded
derivatives 34,434 (2,776) 37,221 1,463
DAC offset for embedded
derivatives and investment
related (gains)/losses, net (26,052) 1,706 (28,431) (2,463)
-------------------------------------
Operating income $ 95,592 $ 74,689 $262,294 $212,210
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, 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 $ 75,288 $ 5,457 $ -- $ 80,745
Asset Intensive (13,478) 4,493(1) 13,812(2) 4,827
Financial Reinsurance 4,342 2 -- 4,344
----------------------------------------------
Total U.S. 66,152 9,952 13,812 89,916
Canada Operations 22,798 (2,480) -- 20,318
Europe & South Africa 11,689 863 -- 12,552
Asia Pacific Operations 17,240 367 -- 17,607
Corporate and Other 3,851 (247) -- 3,604
----------------------------------------------
Consolidated $121,730 $ 8,455 $13,812 $143,997
==============================================
(1) Asset Intensive is net of $(916)DAC offset.
(2) Asset Intensive is net of DAC offsets of $(39,163) included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(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
Europe & South Africa 8,813 91 -- 8,904
Asia Pacific Operations 20,378 46 -- 20,424
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.
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) Nine Months Ended September 30, 2007
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 $240,397 $ 10,292 $ -- $250,689
Asset Intensive (4,905) 6,198(1) 14,662(2) 15,955
Financial Reinsurance 10,052 9 -- 10,061
--------------------------------------------
Total U.S. 245,544 16,499 14,662 276,705
Canada Operations 62,034 (6,648) -- 55,386
Europe & South Africa 44,659 1,717 -- 46,376
Asia Pacific Operations 43,181 937 -- 44,118
Corporate & Other (30,745) 11,568 -- (19,177)
---------------------------------------------
Consolidated $364,673 $ 24,073 $14,662 $403,408
=============================================
(1) Asset Intensive is net of $(1,138)DAC offset.
(2) Asset Intensive is net of DAC offsets of $(42,601)included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(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
Europe & South Africa 40,879 238 -- 41,117
Asia Pacific Operations 34,717 123 -- 34,840
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.
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
---------------------------------------------------------------------
2007 2006 2007 2006
---- ---- ----- ------
Revenues:
Net premiums $1,227,907 $1,076,191 $3,561,003 $3,145,236
Investment income, net
of related expenses 190,458 183,357 681,103 538,903
Investment related
losses, net (9,138) (125) (24,714) (4,807)
Change in value of
embedded derivatives (52,975) 4,272 (57,263) (2,251)
Other revenues 22,089 18,788 61,637 47,035
--------- --------- --------- ----------
Total revenues 1,378,341 1,282,483 4,221,766 3,724,116
Benefits and expenses:
Claims and other
policy benefits 1,006,864 846,908 2,890,012 2,532,952
Interest credited 30,475 43,582 205,193 149,843
Policy acquisition
costs and other
insurance expenses 178,244 188,731 542,679 513,235
Change in deferred
acquisition cost
associated with
change in value of
embedded derivatives (39,163) 2,886 (42,601) (2,339)
Other operating expenses 57,284 54,568 169,325 146,925
Interest expense 9,860 15,103 53,545 46,884
Collateral finance
facilities expense 13,047 13,136 38,940 13,413
--------------------- ----------------------
Total benefits
and expenses 1,256,611 1,164,914 3,857,093 3,400,913
--------------------- ----------------------
Income from continuing
operations before
income taxes 121,730 117,569 364,673 323,203
Provision for income
taxes 40,932 41,995 127,901 113,260
--------------------- ----------------------
Income from continuing
operations 80,798 75,574 236,772 209,943
Discontinued operations:
Loss from discontinued
accident and health
operations, net of
income taxes (4,277) (1,539) (6,524) (3,207)
------------------- -----------------------
Net income $76,521 $74,035 $ 230,248 $ 206,736
=================== ======================
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,
--------------------------------------------------------------------
2007 2006 2007 2006
---- ---- ----- -----
Earnings per share from
continuing operations:
Basic earnings per share $ 1.30 $ 1.23 $ 3.83 $ 3.43
Diluted earnings per share $ 1.26 $ 1.20 $ 3.69 $ 3.34
Diluted earnings before
investment related gains/
(losses), change in value
of embedded derivatives,
and related deferred
acquisition costs $ 1.49 $ 1.18 $ 4.08 $ 3.38
Earnings per share from
net income:
Basic earnings per share $ 1.23 $ 1.21 $ 3.73 $ 3.38
Diluted earnings per share $ 1.19 $ 1.17 $ 3.59 $ 3.29
Weighted average number of
common and common equivalent
shares outstanding 64,212 63,105 64,218 62,811
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Nine Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
---- ----
Gross life reinsurance in force (in billions)
U.S. $1,212.8 $1,145.7
Canada $ 211.3 $ 154.0
Europe & South Africa $ 370.9 $ 324.8
Asia Pacific $ 358.6 $ 274.6
Gross life reinsurance written (in billions)
U.S. $ 120.9 $ 132.7
Canada $ 33.7 $ 28.1
Europe & South Africa $ 42.2 $ 91.2
Asia Pacific $ 27.7 $ 27.6
Balance sheet information (in millions, except share
and per share figures)
Consolidated cash and invested assets $16,312.1 $14,351.3
Invested asset book yield - trailing
three months excluding funds withheld 6.00% 5.79%
Investment portfolio mix
Cash and short-term investments 3.71% 2.05%
Fixed maturity securities 54.76% 57.77%
Mortgage loans 5.07% 4.67%
Policy loans 6.24% 6.72%
Funds withheld at interest 28.53% 27.26%
Other invested assets 1.69% 1.53%
Collateral finance facilities $ 850.3 $ 850.3
Short-term debt $ 30.7 $ 28.1
Long-term debt $ 896.0 $ 674.7
Company-obligated mandatorily
redeemable preferred securities
of subsidiary $ 158.8 $ 158.7
Total stockholders' equity $3,040.0 $2,775.0
Less: Accumulated other comprehensive
income "AOCI"(a) 444.4 480.3
-------- --------
Total stockholders' equity, before
impact of AOCI(a) $2,595.6 $2,294.7
Treasury shares 1,129,184 1,761,365
Common shares outstanding 61,999,089 61,366,908
Book value per share outstanding $ 49.03 $ 45.22
Book value per share outstanding, before
impact of AOCI(a) $ 41.86 $ 37.39
(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
(Unaudited) (Dollars in thousands)
Three Months Ended September 30, 2007
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
---------- --------- ----------- -------
Net premiums $ 690,388 $ 1,555 $ -- $691,943
Investment income, net
of related expenses 89,221 28,870 (9) 118,082
Investment related
losses, net (5,457) (5,409) (2) (10,868)
Change in value of
embedded derivatives -- (52,975) -- (52,975)
Other revenues 242 11,095 7,205 18,542
---------------------------------------------
Total revenues 774,394 (16,864) 7,194 764,724
Benefits and expenses:
Claims and other
policy benefits 572,871 2,280 -- 575,151
Interest credited 14,845 15,457 -- 30,302
Policy acquisition costs
and other insurance
expenses 99,759 16,283 1,831 117,873
Change in deferred ac-
quisition cost associated
with change in value
of embedded derivatives -- (39,163) -- (39,163)
Other operating expenses 11,631 1,757 1,021 14,409
---------------------------------------------
Total benefits
and expenses 699,106 (3,386) 2,852 698,572
Income/(loss)before
income taxes $ 75,288 $ (13,478) $ 4,342 $ 66,152
========== ========= ======= ==========
(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
========== ========= ======== ==========
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Dollars in thousands)
(Unaudited) Nine Months Ended September 30, 2007
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
------------ --------- ----------- ---------
Net premiums $ 2,078,560 $ 4,779 $ -- $2,083,339
Investment income, net
of related expenses 261,300 214,141 110 475,551
Investment related
losses, net (10,292) (7,336) (9) (17,637)
Change in value of
embedded derivatives -- (57,263) -- (57,263)
Other revenues 648 28,209 18,940 47,797
-----------------------------------------------
Total revenues 2,330,216 182,530 19,041 2,531,787
Benefits and expenses:
Claims and other
policy benefits 1,710,076 6,250 1 1,716,327
Interest credited 43,694 159,939 -- 203,633
Policy acquisition
costs and other
insurance expenses 300,946 58,764 6,026 365,736
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- (42,601) -- (42,601)
Other operating expenses 35,103 5,083 2,962 43,148
--------------------------------------------
Total benefits and
expenses 2,089,819 187,435 8,989 2,286,243
Income/(loss)before
income taxes $ 240,397 $ (4,905) $ 10,052 $ 245,544
=========== ========= ======== ============
(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
=========== ========= ======== ===========
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Canada Operations
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
Revenues: ---- ----
Net premiums $ 123,676 $103,316
Investment income, net of related expenses 31,057 27,578
Investment related gains, net 2,713 1,419
Other revenues 1 (452)
--------- -------
Total revenues 157,447 131,861
Benefits and expenses:
Claims and other policy benefits 106,416 95,854
Interest credited 170 211
Policy acquisition costs and other
insurance expenses 23,118 18,146
Other operating expenses 4,945 4,188
--------- --------
Total benefits and expenses 134,649 118,399
Income before income taxes $ 22,798 $ 13,462
========= ========
Nine Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
---- ----
Revenues:
Net premiums $345,748 $294,838
Investment income, net of related expenses 89,852 78,881
Investment related gains, net 7,145 3,565
Other revenues 180 315
--------- --------
Total revenues 442,925 377,599
Benefits and expenses:
Claims and other policy benefits 303,231 280,382
Interest credited 541 623
Policy acquisition costs and other
insurance expenses 62,937 51,735
Other operating expenses 14,182 11,892
--------- -------
Total benefits and expenses 380,891 344,632
Income before income taxes $ 62,034 $ 32,967
========= ========
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe & South Africa
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
---- ----
Revenues:
Net premiums $170,774 $145,769
Investment income, net of related expenses 5,569 4,210
Investment related losses, net (863) (91)
Other revenues (43) 206
-------- --------
Total revenues 175,437 150,094
Benefits and expenses:
Claims and other policy benefits 127,281 101,492
Interest credited 3 133
Policy acquisition costs and other
insurance expenses 22,592 28,110
Other operating expenses 13,872 11,546
-------- ---------
Total benefits and expenses 163,748 141,281
Income before income taxes $ 11,689 $ 8,813
======== =========
Nine Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
---- ----
Revenues:
Net premiums $503,366 $436,993
Investment income, net of related expenses 18,446 11,475
Investment related losses, net (1,717) (238)
Other revenues 61 119
-------- --------
Total revenues 520,156 448,349
Benefits and expenses:
Claims and other policy benefits 370,263 308,172
Interest credited 1,019 479
Policy acquisition costs and other
insurance expenses 65,781 69,188
Other operating expenses 38,434 29,631
-------- --------
Total benefits and expenses 475,497 407,470
Income before income taxes $ 44,659 $ 40,879
======== =========
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
---- ----
Revenues:
Net premiums $240,476 $178,550
Investment income, net of related expenses 9,134 7,036
Investment related losses, net (367) (46)
Other revenues 2,105 1,243
-------- --------
Total revenues 251,348 186,783
Benefits and expenses:
Claims and other policy benefits 197,827 134,177
Policy acquisition costs and other
insurance expenses 22,833 20,658
Other operating expenses 13,448 11,570
------- --------
Total benefits and expenses 234,108 166,405
Income before income taxes $ 17,240 $ 20,378
======== ==========
Nine Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
---- ----
Revenues:
Net premiums $626,285 $486,615
Investment income, net of related expenses 26,407 20,354
Investment related losses, net (937) (123)
Other revenues 6,515 4,734
-------- --------
Total revenues 658,270 511,580
Benefits and expenses:
Claims and other policy benefits 499,974 376,399
Policy acquisition costs and other
insurance expenses 75,620 70,230
Other operating expenses 39,495 30,234
-------- ---------
Total benefits and expenses 615,089 476,863
Income before income taxes $ 43,181 $ 34,717
======== =========
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Corporate and Other
(Dollars in thousands)
Three Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
Revenues: ---- -----
Net premiums $ 1,038 $ 468
Investment income, net of related expenses 26,616 19,167
Investment related gains, net 247 387
Other revenues 1,484 2,673
-------- --------
Total revenues 29,385 22,695
Benefits and expenses:
Claims and other policy benefits 189 54
Interest credited -- 77
Policy acquisition costs and other
insurance expenses (8,172) (7,432)
Other operating expenses 10,610 11,643
Interest expense 9,860 15,103
Collateral finance facilities expense 13,047 13,136
------ -------
Total benefits and expenses 25,534 32,581
Income/(loss) before income taxes $ 3,851 $ (9,886)
======== =========
Nine Months Ended
(Unaudited) September 30,
---------------------------------------------------------------------
2007 2006
Revenues: ---- -----
Net premiums $ 2,265 $ 1,485
Investment income, net of related expenses 70,847 37,962
Investment related gains/(losses), net (11,568) 3,362
Other revenues 7,084 4,790
------ -------
Total revenues 68,628 47,599
Benefits and expenses:
Claims and other policy benefits 217 (977)
Interest credited -- 830
Policy acquisition costs and other
insurance expenses (27,395) (26,162)
Other operating expenses 34,066 35,044
Interest expense 53,545 46,884
Collateral finance facilities expense 38,940 13,413
------- --------
Total benefits and expenses 99,373 69,032
Loss before income taxes $(30,745) $(21,433)
========= =========
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