e8vk
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 23, 2009
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
         
Missouri
(State or Other Jurisdiction of
Incorporation)
  1-11848
(Commission
File Number)
  43-1627032
(IRS Employer
Identification Number)
1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017
(Address of Principal Executive Office)
Registrant’s telephone number, including area code: (636) 736-7000
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 2.02 Results of Operations and Financial Condition
On April 23, 2009, Reinsurance Group of America, Incorporated (the “Company”) issued (1) a press release announcing its earnings for the three-month period ended March 31, 2009, and providing certain additional information, a copy of which is furnished with this report as Exhibit 99.1, and (2) a Quarterly Financial Supplement for the quarter ended March 31, 2009, a copy of which is attached hereto as Exhibit 99.2. The press release also notes that a conference call will be held on April 24, 2009 to discuss the financial and operating results for the three-month period ended March 31, 2009. The press release and Quarterly Financial Supplement are furnished and are not filed pursuant to Instruction B.2 of Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following documents are filed as exhibits to this report:
     
Exhibit No.   Exhibit
 
   
99.1
  Press Release of Reinsurance Group of America, Incorporated dated April 23, 2009
 
   
99.2
  Quarterly Financial Supplement for the quarter ended March 31, 2009

 


 

SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  REINSURANCE GROUP OF AMERICA, INCORPORATED
 
 
Date: April 23, 2009  By:   /s/ Jack B. Lay  
    Jack B. Lay   
    Senior Executive Vice President and Chief
Financial Officer 
 

 


 

EXHIBIT INDEX
     
Exhibit Number   Description
 
   
99.1
  Press Release dated April 23, 2009
 
   
99.2
  Quarterly Financial Supplement for the quarter ended March 31, 2009

 

exv99w1
Exhibit 99.1
(RGA LOGO)
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS FIRST-QUARTER RESULTS
    Net income of $0.32 per diluted share and operating income of $0.92 per diluted share adversely affected by high claims levels
 
    Net income adversely affected by investment impairments and embedded derivatives
 
    Liquidity and capital position remain strong despite difficult economic environment
ST. LOUIS, April 23, 2009 — Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported net income of $23.3 million, or $0.32 per diluted share, compared to $31.5 million, or $0.49 per diluted share in the prior-year quarter. Operating income* totaled $67.4 million, or $0.92 per diluted share, compared to $71.0 million, or $1.10 per diluted share in the year-ago quarter, decreases of 5 percent and 16 percent, respectively.
                 
    Quarterly Results
($ in thousands, except per share data)   2009   2008
Net premiums
  $ 1,346,047     $ 1,298,065  
Net income
    23,290       31,505  
Net income per diluted share
    0.32       0.49  
Operating income*
    67,355       70,957  
Operating income per diluted share*
    0.92       1.10  
Book value per share
    33.99       49.15  
Book value per share (excl. AOCI)*
    43.78       43.32  
Total assets
    21,634,314       21,812,508  
 
*   See ‘Use of Non-GAAP Financial Measures’ below
The 2009 quarter’s earnings per share include the effect of the company’s 10,235,000-share common stock offering in November 2008. Most of the $332 million of net proceeds from that offering have yet to be deployed in the business. Weaker foreign currencies negatively affected operating income by approximately $0.10 per share for the quarter. Consolidated net premiums, including translated foreign currency-denominated premiums, increased 4 percent. Excluding the effect of foreign currency translation, premiums increased approximately 15 percent.
Net income included approximately $55.6 million of pre-tax net realized capital losses, with $40.2 million in investment impairments. Additionally, net income included a pre-tax loss of $15.9 million, net of hedging activities and adjustments to deferred acquisition costs (DAC), due to the decline in the fair value of embedded derivatives associated with certain living benefit riders within variable annuity treaties.
A. Greig Woodring, president and chief executive officer, commented, “In many respects, we have started 2009 in a manner similar to the prior year, when adverse mortality experience depressed operating earnings. Claim levels were significantly higher-than-expected during the quarter in several of our markets, most notably the U.S and Asia Pacific. We are disappointed with the recent run of poor mortality results in the U.S.; however, we are in a long-term business and accept risks over periods up to 30 years. We will experience periods of both better-than- and worse-than-expected mortality experience along the way. For example, the stretch from third quarter 2005 to the fourth quarter 2007 was very favorable in terms of actual mortality experience. These periods of mortality variations tend to level out over longer-term horizons.
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Add One
“We have built a strong, profitable life reinsurance operation over time, and while it can be frustrating to experience these sorts of negative mortality fluctuations, we are quite confident in the longer-term performance expectations of our business. We have posted to our Web site a Quarterly Financial Supplement that includes financial information for all our segments as well as information on our investment portfolio. Our investment profile remains appropriately positioned, with 96 percent of our fixed maturity securities held in the investment-grade categories.”
The company’s conference call, previously scheduled for April 28, will be held tomorrow, April 24, at 9 a.m. Eastern Time. Telephone numbers and webcast information can be found later in this press release.
Capital and Liquidity
Despite the difficult quarter, operations continue to provide positive cash flows and increased retained earnings. RGA remains in a position to hold investment securities until the financial markets improve, and does not rely on short-term funding or commercial paper. The company’s capital and liquidity positions are strong and expected to remain strong for the foreseeable future.
Woodring continued, “We feel we are in good shape with respect to our level of capital. Opportunities for capital deployment remain interesting. We are currently reviewing a number of transactions and expect to see block transaction opportunities for some period of time, given ever-changing dynamics in the primary life insurance industry and in the reinsurance competitive landscape. We did not execute any block transactions during the quarter, remaining selective in light of the relatively high cost of replacing capital in the current environment. Even so, we are quite encouraged by market and competitive dynamics.”
SEGMENT RESULTS
U.S.
The U.S. division reported pre-tax income of $12.8 million for the quarter, down 16 percent from $15.3 million the year before. Pre-tax income was affected by $48.9 million of net realized capital losses on the investment portfolio, as well as losses of $15.9 million associated with certain living benefit riders within variable annuity treaties. Pre-tax operating income totaled $74.3 million compared to $64.4 million the year before, an increase of 15 percent. In the traditional mortality sub-segment, claim levels were approximately $20.0 million higher-than-expected due to the overall volume of claims as well as the number of large claims (greater than $1 million). Analysis of the claims indicates no unusual trends or systemic issues. Rather, the results reflect random volatility that is inherent in mortality risk. Net premiums were up more than 8 percent to $788.5 million from $727.1 million in the prior-year quarter.
The U.S. Asset Intensive business reported a pre-tax loss of $27.0 million compared to a pre-tax loss of $41.1 million a year ago. Net income was adversely affected by losses associated with variable annuity business. On an operating basis, this business reported a pre-tax loss of $3.7 million, reflecting the difficult environment for annuity reinsurance, compared to pre-tax income of $5.5 million a year ago.
Canada
Canadian operations reported pre-tax net income of $16.2 million compared to $23.7 million a year ago. Pre-tax operating income totaled $17.8 million versus $28.2 million a year ago, a result of slightly adverse mortality experience in the current quarter coupled with very favorable mortality experience a year ago. Foreign currency fluctuations negatively affected pre-tax operating income by approximately $5.5 million. On a Canadian dollar basis, net premiums increased approximately 23 percent. On a U.S. dollar basis, net premiums totaled $138.1 million for the current quarter, relatively unchanged from last year’s $139.0 million.
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Add Two
Asia Pacific
Asia Pacific reported pre-tax net income of $3.6 million compared with $18.6 million in the year-ago quarter. Pre-tax operating income decreased 61 percent to $7.1 million compared to $18.0 million a year ago, primarily as a result of adverse claims experience in Australia in the current quarter along with relatively favorable mortality in the year-ago period. Adverse foreign currency exchange of $0.2 million also hampered the current-quarter operating result. Net premiums totaled $243.7 million compared to $240.9 million. Current-period premiums were negatively affected by approximately $55.2 million due to foreign currency fluctuations.
Europe & South Africa
Europe & South Africa reported pre-tax net income of $8.5 million for the quarter compared to $6.0 million a year ago. Pre-tax operating income was $8.1 million versus $5.3 million last year. Both quarters included adverse claims experience in the U.K. and South Africa. Pre-tax operating income was also adversely affected by $4.0 million associated with foreign currency exchange rates. Net premiums declined to $173.3 million from $189.2 million due to weaker foreign currencies, which had a negative effect of $56.9 million.
Dividend Declaration
The company’s board of directors declared a regular quarterly dividend of $0.09, payable May 27 to shareholders of record as of May 6.
Earnings Conference Call
A conference call to discuss the company’s first-quarter results will begin at 9 a.m. Eastern Time on Friday, April 24. Interested parties may access the call by dialing 877-852-6543 (domestic) or 719-325-4760 (international). The access code is 3486951. 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 90 days following the conference call. A telephonic replay will also be available through May 1 at 888-203-1112 (domestic) or 719-457-0820, access code 3486951.
Use of Non-GAAP Financial Measures
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 certain embedded derivatives and related deferred acquisition costs. These items can be volatile, 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. Reconciliations to GAAP net income are provided in the following tables. Additional financial information can be found in the Quarterly Financial Supplement on RGA’s Investor Relations site at www.rgare.com in the “Quarterly Results” tab and in the “Featured Report” section.
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Add Three
Book value per share outstanding before impact of AOCI is a non-GAAP financial measure that management believes is 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.
About RGA
Reinsurance Group of America, Incorporated is among the largest global providers of life reinsurance with 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 $21.6 billion.
Investor Contact
Jack B. Lay
Senior Executive Vice President and Chief Financial Officer
(636) 736-7000
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 capital and credit market conditions and their impact on our liquidity, access to capital, and cost of capital, (2) the impairment of other financial institutions and its effect on our business, (3) requirements to post collateral or make payments due to declines in market value of assets subject to our collateral arrangements, (4) the fact that the determination of allowances and impairments taken on our investments is highly subjective, (5) adverse changes in mortality, morbidity, lapsation, or claims experience, (6) changes in our financial strength and credit ratings and the effect of such changes on our future results of operations and financial condition, (7) inadequate risk analysis and underwriting, (8) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in our current and planned markets, (9) the availability and cost of collateral necessary for regulatory reserves and capital, (10) market or economic conditions that adversely affect the value of our investment securities or result in the impairment of all or a portion of the value of certain of our investment securities, (11) market or economic conditions that adversely affect our ability to make timely sales of investment securities, (12) risks inherent in our risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (13) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (14) adverse litigation or arbitration results, (15) the adequacy of reserves, resources, and accurate information relating to settlements, awards, and terminated and discontinued lines of business, (16) the stability of and actions by governments and economies in the markets in which we operate, (17) competitive factors and competitors’ responses to our initiatives,
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Add Four
(18) the success of our clients, (19) successful execution of our entry into new markets, (20) successful development and introduction of new products and distribution opportunities, (21) our ability to successfully integrate and operate reinsurance business that we acquire, (22) regulatory action that may be taken by state Departments of Insurance with respect to us, (23) our dependence on third parties, including those insurance companies and reinsurers to which we cede some reinsurance, third-party investment managers, and others, (24) the threat of natural disasters, catastrophes, terrorist attacks, epidemics, or pandemics anywhere in the world where we or our clients do business, (25) changes in laws, regulations, and accounting standards applicable to us, our subsidiaries, or our business, (26) 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 (27) 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. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to review the risk factors in our 2008 Form 10-K.
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Add Five
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated Net Income From Continuing Operations
to Operating Income
(Dollars in thousands)
                 
    Three Months Ended
    March 31,
(Unaudited)   2009   2008
 
               
GAAP net income-continuing operations
  $ 23,290     $ 36,589  
Reconciliation to operating income:
               
Capital losses, derivatives and other, net included in investment related losses, net
    44,117       624  
Embedded Derivatives:
               
Included in investment related losses, net
    3,388       100,633  
Included in interest credited
    (5,281 )     41,916  
Included in policy acquisition costs and other insurance expenses
    848       (7,859 )
DAC offset, net
    993       (100,946 )
     
 
               
Operating income
  $ 67,355     $ 70,957  
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Add Six
Reconciliation of Consolidated Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
                 
    Three Months Ended
    March 31,
(Unaudited)   2009   2008
 
               
Income from continuing operations before income taxes
  $ 34,206     $ 56,688  
Reconciliation to pre-tax operating income:
               
Capital losses, derivatives and other, net included in investment related losses, net
    68,312       862  
Embedded Derivatives:
               
Included in investment related losses, net
    5,212       154,820  
Included in interest credited
    (8,124 )     64,486  
Included in policy acquisition costs and other insurance expenses
    1,304       (12,090 )
DAC offset, net
    1,529       (155,301 )
     
 
               
Pre-tax operating income
  $ 102,439     $ 109,465  
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Add Seven
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
                                 
    Three Months Ended March 31, 2009
            Capital        
            (gains)   Change in    
    Pre-tax   losses,   value of   Pre-tax
    net   derivatives   embedded   operating
    income   and other,   derivatives,   income
(Unaudited)   (loss)   net   net   (loss)
U.S. Operations:
                               
Traditional
  $ 34,350     $ 38,228     $     $ 72,578  
Asset Intensive
    (27,022 )     (16,032 )(1)     39,313 (2)     (3,741 )
Financial Reinsurance
    5,521       (32 )           5,489  
     
Total U.S.
    12,849       22,164       39,313       74,326  
Canada Operations
    16,186       1,571             17,757  
Europe & South Africa
    8,535       (422 )           8,113  
Asia Pacific Operations
    3,573       3,567             7,140  
Corporate and Other
    (6,937 )     2,040             (4,897 )
     
Consolidated
  $ 34,206     $ 28,920     $ 39,313     $ 102,439  
     
 
(1)   Asset Intensive is net of $(39,392) DAC offset.
 
(2)   Asset Intensive is net of $40,921 DAC offset.
                                 
    Three Months Ended March 31, 2008
            Capital        
            (gains)   Change in    
    Pre-tax   losses,   value of   Pre-tax
    net   derivatives   embedded   operating
    income   and other,   derivatives,   Income
(Unaudited)   (loss)   net   net   (loss)
U.S. Operations:
                               
Traditional
  $ 54,448     $ 2,508     $     $ 56,956  
Asset Intensive
    (41,102 )     1,746 (1)     44,903 (2)     5,547  
Financial Reinsurance
    1,939       1             1,940  
     
Total U.S.
    15,285       4,255       44,903       64,443  
Canada Operations
    23,671       4,507             28,178  
Europe & South Africa
    6,043       (745 )           5,298  
Asia Pacific Operations
    18,563       (514 )           18,049  
Corporate & Other
    (6,874 )     371             (6,503 )
     
Consolidated
  $ 56,688     $ 7,874     $ 44,903     $ 109,465  
     
 
(1)   Asset Intensive is net of $7,012 DAC offset.
 
(2)   Asset Intensive is net of $(162,313) DAC offset.
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Add Eight
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share data)
                 
    Three Months Ended
(Unaudited)   March 31,
    2009   2008
 
               
Earnings per share from continuing operations:
               
Basic earnings per share
  $ 0.32     $ 0.59  
Diluted earnings per share
  $ 0.32     $ 0.57  
 
               
Diluted earnings per share from operating income
  $ 0.92     $ 1.10  
 
               
Earnings per share from net income:
               
Basic earnings per share
  $ 0.32     $ 0.51  
Diluted earnings per share
  $ 0.32     $ 0.49  
 
               
Weighted average number of common and common equivalent shares outstanding
    72,884       64,230  
                 
    At or For the
    Three Months Ended
(Unaudited)   March 31,
    2009   2008
 
               
Treasury shares
    600       894  
Common shares outstanding
    72,763       62,235  
Book value per share outstanding
  $ 33.99     $ 49.15  
Book value per share outstanding, before impact of AOCI*
  $ 43.78     $ 43.32  
 
*   Book value per share outstanding before impact of AOCI is a non-GAAP financial measure that management believes is 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.
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Add Nine
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
                 
    Three Months Ended
(Unaudited)   March 31,
    2009   2008
 
               
Revenues:
               
Net premiums
  $ 1,346,047     $ 1,298,065  
Investment income, net of related expenses
    223,196       199,526  
Investment related losses, net
    (72,262 )     (155,260 )
Other revenues
    33,859       17,936  
     
Total revenues
    1,530,840       1,360,267  
 
               
Benefits and expenses:
               
Claims and other policy benefits
    1,169,744       1,119,512  
Interest credited
    36,909       73,897  
Policy acquisition costs and other insurance expenses
    198,801       16,262  
Other operating expenses
    66,749       63,340  
Interest expense
    22,117       23,094  
Collateral finance facility expense
    2,314       7,474  
     
Total benefits and expenses
    1,496,634       1,303,579  
     
 
               
Income from continuing operations before income taxes
    34,206       56,688  
 
               
Provision for income taxes
    10,916       20,099  
     
 
               
Income from continuing operations
    23,290       36,589  
 
               
Discontinued operations:
               
Loss from discontinued accident and health operations, net of income taxes
          (5,084 )
     
 
               
Net income
  $ 23,290     $ 31,505  
     
# # #

 

exv99w2
EXHIBIT 99.2
(RGA LOGO)
Reinsurance Group of America, Incorporated®
Financial Supplement
First Quarter 2009
(Unaudited)

 


 

(RGA LOGO)
Reinsurance Group of America, Incorporated®
         
World Headquarters
  Internet address   Contacts:
1370 Timberlake Manor Parkway
  www.rgare.com   Jack B. Lay
Chesterfield, Missouri 63017
      Senior Executive Vice President
U.S.A.
      and Chief Financial Officer
 
      Phone: (636) 736-7000
 
       
 
      John Hayden
 
      Vice President
 
      Investor Relations
 
      Phone: (636) 736-7243
Current Ratings
             
    Standard & Poor’s   A.M. Best   Moody’s
Financial Strength Ratings
           
RGA Reinsurance Company
  AA-   A+   A1
RGA Life Reinsurance Company of Canada
  AA-   A+   NR
RGA International Reinsurance Company Limited
  AA-   NR   NR
RGA Global Reinsurance Company Limited
  AA-   NR   NR
Senior Debt Ratings
           
Reinsurance Group of America, Incorporated
  A-   a-   Baa1
Our common stock is traded on the New York Stock Exchange under the symbol “RGA.”
(RGA LOGO)

 


 

Reinsurance Group of America, Incorporated
Financial Supplement
1st Quarter 2009
Table of Contents
         
    Page
Non-GAAP Disclosure
    1  
 
       
Consolidated
       
Financial Highlights
    2  
Consolidated Operating Income Statement
    3  
Consolidated Income Statement (incl. Operating Income Reconciliation)
    4  
Consolidated Balance Sheets
    5  
 
       
Segment Pre-tax Operating Income Summaries
       
U.S. Operations
    6  
Canada Operations
    10  
Europe & South Africa Operations
    11  
Asia Pacific Operations
    12  
Corporate and Other
    13  
Summary of Pre-tax Segment Operating Income
    14  
 
       
Investments
       
Cash and Invested Assets, Yield Summary
    15  
Amortized cost, Gross Unrealized Gains and Losses, Estimated Fair Values of Fixed Maturity and Equity Securities
    16  
Corporate Securities by Sector (Fixed Maturities and Equities)
    17  
Quality of Fixed Maturity Securities and Structured Fixed Maturity Securities
    18  
Subprime Mortgage Exposure
    19  
CMBS Exposure
    20  
Gross Unrealized Losses Aging
    21  
Fixed Maturity and Equity Securities Below Amortized Cost
    22  
Consolidated Gross Gains and Losses
    23  
(RGA LOGO)

 


 

Reinsurance Group of America, Incorporated
Financial Supplement
This Financial Supplement is for information purposes only and includes unaudited figures. This report should be read in conjunction with documents filed by Reinsurance Group of America, Incorporated with the SEC.
Non-GAAP Disclosures
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 certain embedded derivatives and related deferred acquisition costs. These items can be volatile, 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. A reconciliation of income before income taxes of the operating segments to pre-tax operating income (loss) is presented herein.
Additionally, RGA evaluates its stockholder equity position excluding the impact of Accumulated Other Comprehensive Income (“AOCI”) since the net unrealized gains or losses included in AOCI primarily relate to changes in interest rates, credit spreads on its investment securities and foreign currency fluctuations that are not permanent and can fluctuate significantly from period to period.
(RGA LOGO)

Page 1


 

Reinsurance Group of America, Incorporated
Financial Highlights
First Quarter 2009
                                                 
    Three Months Ended or As of   Current Qtr
    March 31,   Dec. 31,   Sept. 30,   June 30,   March 31,   vs. PY
(USD thousands, except inforce & per share data)   2009   2008   2008   2008   2008   Quarter
 
                                               
Net premiums
  $ 1,346,047     $ 1,389,091     $ 1,303,590     $ 1,358,555     $ 1,298,065     $ 47,982  
Net income — continuing operations
    23,290       15,170       25,250       110,806       36,589       (13,299 )
Operating income
    67,355       99,966       118,542       109,688       70,957       (3,602 )
Total assets
    21,634,314       21,658,818       21,844,347       22,410,167       21,812,508       (178,194 )
 
                                               
Assumed Ordinary Life Reinsurance in Force (in billions)
                                               
U.S.
  $ 1,285.6     $ 1,274.5     $ 1,265.6     $ 1,258.6     $ 1,247.0     $ 38.6  
Canada
    209.9       209.5       231.4       230.9       221.2       (11.3 )
Europe & South Africa
    332.8       325.2       368.9       419.4       383.0       (50.2 )
Asia Pacific
    293.0       298.9       310.6       330.6       351.6       (58.6 )
Assumed New Business Production (in billions)
                                               
U.S.
  $ 35.5     $ 33.7     $ 30.5     $ 35.5     $ 34.7     $ 0.8  
Canada
    9.9       12.1       14.5       11.7       12.9       (3.0 )
Europe & South Africa
    36.0       28.2       21.4       19.4       18.5       17.5  
Asia Pacific
    3.8       9.2       7.5       4.9       10.3       (6.5 )
 
                                               
Per Share and Shares Data
                                               
Basic earnings per share from continuing operations
                                               
Net income
  $ 0.32     $ 0.22     $ 0.41     $ 1.78     $ 0.59     $ (0.27 )
Operating income
  $ 0.93     $ 1.45     $ 1.90     $ 1.76     $ 1.14     $ (0.21 )
Diluted earnings per share from continuing operations
                                               
Net income
  $ 0.32     $ 0.22     $ 0.40     $ 1.73     $ 0.57     $ (0.25 )
Operating income
  $ 0.92     $ 1.45     $ 1.86     $ 1.71     $ 1.10     $ (0.18 )
 
                                               
Wgt. average common shares outstanding (basic)
    72,710       68,831       62,323       62,284       62,146       10,564  
Wgt. average common shares outstanding (diluted)
    72,884       69,176       63,607       63,982       64,230       8,654  
 
                                               
Common shares issued
    73,363       73,363       63,128       63,128       63,128       10,235  
Treasury shares
    600       741       803       813       894       (294 )
Common shares outstanding
    72,763       72,622       62,325       62,315       62,234       10,529  
 
                                               
Book value per share
  $ 33.99     $ 36.03     $ 41.83     $ 49.13     $ 49.15          
Per share effect of accumulated other comprehensive income (AOCI)
  $ (9.79 )   $ (7.55 )   $ (3.56 )   $ 4.09     $ 5.83          
Book value per share, excluding AOCI
  $ 43.78     $ 43.58     $ 45.39     $ 45.04     $ 43.32          
(RGA LOGO)

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Reinsurance Group of America, Incorporated
Consolidated Operating Income Statement
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands, except per share data)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Revenues:
                                               
Net premiums
  $ 1,346,047     $ 1,389,091     $ 1,303,590     $ 1,358,555     $ 1,298,065     $ 47,982  
Investment income, net of related expenses
    223,196       196,634       220,248       254,868       199,526       23,670  
Investment related gains (losses), net
    1,262       1,419       1,063       978       422       840  
Other revenue
    33,859       25,869       27,764       36,262       17,936       15,923  
 
                                   
Total revenues
    1,604,364       1,613,013       1,552,665       1,650,663       1,515,949       88,415  
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    1,169,744       1,150,645       1,062,948       1,128,827       1,119,512       50,232  
Interest credited
    45,033       38,093       53,164       72,248       9,411       35,622  
Policy acquisition costs and other insurance expenses
    195,968       191,167       179,956       189,699       183,653       12,315  
Other operating expenses
    66,749       53,694       63,886       61,997       63,340       3,409  
Interest expense
    22,117       21,552       9,935       21,580       23,094       (977 )
Collateral finance facility expense
    2,314       7,432       6,851       6,966       7,474       (5,160 )
 
                                   
Total benefits and expenses
    1,501,925       1,462,583       1,376,740       1,481,317       1,406,484       95,441  
 
                                               
Operating income before income taxes
    102,439       150,430       175,925       169,346       109,465       (7,026 )
 
                                               
Operating income tax expense
    35,084       50,464       57,383       59,658       38,508       (3,424 )
 
                                   
 
                                               
Operating income
  $ 67,355     $ 99,966     $ 118,542     $ 109,688     $ 70,957     $ (3,602 )
 
                                   
 
                                               
Wgt. Average Common Shares Outstanding (Diluted)
    72,884       69,176       63,607       63,982       64,230       8,654  
 
                                               
 
                                   
Diluted Earnings Per Share — Operating Income
  $ 0.92     $ 1.45     $ 1.86     $ 1.71     $ 1.10     $ (0.18 )
 
                                   
 
                                               
Foreign currency effect on*:
                                               
Net premiums
  $ (144,690 )   $ (111,668 )   $ (5,676 )   $ 20,565     $ 46,462     $ (191,152 )
Operating income before income taxes
  $ (11,202 )   $ (17,349 )   $ (1,337 )   $ 5,608     $ 7,871     $ (19,073 )
 
*   Represents effect as compared to comparable prior year period
(RGA LOGO)

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Reinsurance Group of America, Incorporated
Consolidated GAAP Income Statement (incl. Operating Income Reconciliation)
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Revenues:
                                               
Net premiums
  $ 1,346,047     $ 1,389,091     $ 1,303,590     $ 1,358,555     $ 1,298,065     $ 47,982  
Investment income, net of related expenses
    223,196       196,634       220,248       254,868       199,526       23,670  
Investment related gains (losses), net
    (72,262 )     (243,559 )     (241,307 )     (7,079 )     (155,260 )     82,998  
Other revenue
    33,859       25,869       27,764       36,262       17,936       15,923  
 
                                   
Total revenues
    1,530,840       1,368,035       1,310,295       1,642,606       1,360,267       170,573  
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    1,169,744       1,150,645       1,062,948       1,128,827       1,119,512       50,232  
Interest credited
    36,909       86,989       9,293       63,000       73,897       (36,988 )
Policy acquisition costs and other insurance expenses
    198,801       27,529       124,836       189,272       16,262       182,539  
Other operating expenses
    66,749       53,694       63,886       61,997       63,340       3,409  
Interest expense
    22,117       21,552       9,935       21,580       23,094       (977 )
Collateral finance facility expense
    2,314       7,432       6,851       6,966       7,474       (5,160 )
 
                                   
Total benefits and expenses
    1,496,634       1,347,841       1,277,749       1,471,642       1,303,579       193,055  
 
                                               
Income before income taxes — continuing operations
    34,206       20,194       32,546       170,964       56,688       (22,482 )
Income tax expense
    10,916       5,024       7,296       60,158       20,099       (9,183 )
 
                                   
Income — continuing operations
    23,290       15,170       25,250       110,806       36,589       (13,299 )
Loss from discontinued operations
          (5,809 )     (22 )     (104 )     (5,084 )     5,084  
 
                                   
Net income
  $ 23,290     $ 9,361     $ 25,228     $ 110,702     $ 31,505     $ (8,215 )
 
                                   
 
                                               
Pre-tax Operating Income Reconciliation:
                                               
Income before income taxes — continuing operations
    34,206       20,194       32,546       170,964       56,688       (22,482 )
Investment and Derivative losses (gains) — non-operating (1)
    68,312       (146,818 )     99,801       1,962       862       67,450  
Change in value of B36 embedded derivatives (1)
    40,425       161,021       106,797       11,452       148,528       (108,103 )
GMXB embedded derivatives (1)
    (35,213 )     230,775       35,772       (5,357 )     6,292       (41,505 )
EIA embedded derivatives — interest credited
    (8,124 )     48,896       (43,871 )     (9,248 )     64,486       (72,610 )
EIA embedded derivatives — policy acq. costs
    1,304       (5,697 )     8,274       2,390       (12,090 )     13,394  
DAC offset, net
    1,529       (157,941 )     (63,394 )     (2,817 )     (155,301 )     156,830  
 
                                   
Operating Income Before Income Taxes
    102,439       150,430       175,925       169,346       109,465       (7,026 )
 
                                   
 
                                               
After-tax Operating Income Reconciliation:
                                               
Income — continuing operations
    23,290       15,170       25,250       110,806       36,589       (13,299 )
Investment and Derivative losses (gains) — non-operating (1)
    44,117       (95,289 )     64,967       1,207       624       43,493  
Change in value of B36 embedded derivatives (1)
    26,276       104,664       69,418       7,444       96,543       (70,267 )
GMXB embedded derivatives (1)
    (22,888 )     150,003       23,252       (3,482 )     4,090       (26,978 )
EIA embedded derivatives — interest credited
    (5,281 )     31,782       (28,516 )     (6,011 )     41,916       (47,197 )
EIA embedded derivatives — policy acq. costs
    848       (3,703 )     5,378       1,554       (7,859 )     8,707  
DAC offset, net
    993       (102,661 )     (41,207 )     (1,830 )     (100,946 )     101,939  
 
                                   
 
                                               
Operating Income
    67,355       99,966       118,542       109,688       70,957       (3,602 )
 
                                   
 
(1)   Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement
(RGA LOGO)

Page 4


 

Reinsurance Group of America, Incorporated
Consolidated Balance Sheets
                                         
(USD thousands)   March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,  
    2009     2008     2008     2008     2008  
Assets
                                       
Fixed maturity securities (available for sale):
  $ 8,831,920     $ 8,531,804     $ 9,121,953     $ 9,667,961     $ 9,387,094  
Mortgage loans on real estate
    764,038       775,050       782,282       798,896       812,539  
Policy loans
    1,081,030       1,096,713       1,048,517       1,048,517       1,039,464  
Funds withheld at interest
    4,505,054       4,520,398       4,806,642       4,825,297       4,650,948  
Short-term investments
    54,552       58,123       32,520       47,081       46,336  
Other invested assets
    582,784       628,649       432,982       418,864       389,437  
 
                             
Total investments
    15,819,378       15,610,737       16,224,896       16,806,616       16,325,818  
Cash and cash equivalents
    586,542       875,403       412,255       362,689       304,083  
Accrued investment income
    118,140       87,424       138,414       106,679       103,755  
Premiums receivable and other reinsurance balances
    657,647       640,235       691,120       800,404       766,970  
Reinsurance ceded receivables
    746,736       735,155       746,790       752,203       758,977  
Deferred policy acquisition costs
    3,602,857       3,610,334       3,498,152       3,460,294       3,369,316  
Other assets
    103,014       99,530       132,720       121,282       183,589  
 
                             
Total assets
  $ 21,634,314     $ 21,658,818     $ 21,844,347     $ 22,410,167     $ 21,812,508  
 
                             
 
                                       
Liabilities and Stockholders’ Equity
                                       
Future policy benefits
  $ 6,636,919     $ 6,431,530     $ 6,552,508     $ 6,619,084     $ 6,449,039  
Interest-sensitive contract liabilities
    7,613,489       7,690,942       7,517,782       7,220,659       6,657,546  
Other policy claims and benefits
    1,956,834       1,923,018       2,064,578       2,239,868       2,196,089  
Other reinsurance balances
    197,695       173,645       127,021       173,162       240,137  
Deferred income taxes
    251,261       310,360       399,669       561,912       707,963  
Other liabilities
    577,909       585,199       548,844       599,034       567,854  
Short-term debt
                95,000              
Long-term debt
    917,913       918,246       922,994       926,095       925,893  
Collateral finance facility
    850,019       850,035       850,094       850,000       850,210  
Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated debentures of the Company
    159,081       159,035       158,990       158,946       158,904  
 
                             
Total liabilities
    19,161,120       19,042,010       19,237,480       19,348,760       18,753,635  
 
                                       
Stockholders’ Equity:
                                       
Common stock, at par value
    734       734       631       631       631  
Warrants
    66,912       66,914       66,915       66,915       66,915  
Additional paid-in-capital
    1,455,022       1,450,041       1,118,288       1,115,540       1,112,977  
Retained earnings
    1,691,292       1,682,087       1,679,568       1,660,041       1,556,127  
Accumulated other comprehensive income (AOCI):
                                       
Accumulated currency translation adjustment, net of income taxes
    (3,050 )     19,794       143,729       215,582       203,662  
Unrealized appreciation (depreciation) of securities, net of income taxes
    (695,070 )     (553,407 )     (358,273 )     47,478       167,174  
Pension and postretirement benefits, net of income taxes
    (14,456 )     (14,658 )     (7,790 )     (8,082 )     (8,199 )
 
                             
Total stockholders’ equity before treasury stock
    2,501,384       2,651,505       2,643,068       3,098,105       3,099,287  
Less treasury shares
    (28,190 )     (34,697 )     (36,201 )     (36,698 )     (40,414 )
 
                             
Total stockholders’ equity
    2,473,194       2,616,808       2,606,867       3,061,407       3,058,873  
 
                             
Total liabilities and stockholders’ equity
  $ 21,634,314     $ 21,658,818     $ 21,844,347     $ 22,410,167     $ 21,812,508  
 
                             
 
                                       
Total stockholders’ equity, excluding AOCI
  $ 3,185,770     $ 3,165,079     $ 2,829,201     $ 2,806,429     $ 2,696,236  
(RGA LOGO)

Page 5


 

Reinsurance Group of America, Incorporated
U.S. Traditional Sub-segment Operating Income
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Revenues:
                                               
Net premiums
  $ 786,748     $ 874,348     $ 740,502     $ 752,831     $ 725,393     $ 61,355  
Investment income, net of related expenses
    102,561       100,033       99,991       97,462       97,431       5,130  
Other revenue
    570       (193 )     (42 )     552       60       510  
 
                                   
Total revenues
    889,879       974,188       840,451       850,845       822,884       66,995  
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    695,932       753,545       632,258       624,310       651,850       44,082  
Interest credited
    15,233       15,513       15,221       14,924       14,790       443  
Policy acquisition costs and other insurance expenses
    91,533       118,637       107,199       103,231       86,050       5,483  
Other operating expenses
    14,603       9,828       12,756       12,121       13,238       1,365  
 
                                   
Total benefits and expenses
    817,301       897,523       767,434       754,586       765,928       51,373  
Operating income before income taxes
    72,578       76,665       73,017       96,259       56,956       15,622  
 
                                   
 
                                               
Operating to GAAP Reconciliation:
                                               
Operating income before income taxes
    72,578       76,665       73,017       96,259       56,956       15,622  
Investment and Derivative (losses) gains — non-operating
    (38,228 )     (6,694 )     (62,065 )     (637 )     (2,508 )     (35,720 )
 
                                   
Income before income taxes
  $ 34,350     $ 69,971     $ 10,952     $ 95,622     $ 54,448     $ (20,098 )
 
                                   
 
                                               
Loss and Expense Ratios:
                                               
Claims and other policy benefits
    88.5 %     86.2 %     85.4 %     82.9 %     89.9 %     -1.4 %
Policy acquisition costs and other insurance expenses
    11.6 %     13.6 %     14.5 %     13.7 %     11.9 %     -0.3 %
Other operating expenses
    1.9 %     1.1 %     1.7 %     1.6 %     1.8 %     0.1 %
(RGA LOGO)

Page 6


 

Reinsurance Group of America, Incorporated
U.S. Asset Intensive Sub-segment Operating Income
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands except account values)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Revenues:
                                               
Net premiums
  $ 1,709     $ 1,584     $ 1,719     $ 1,592     $ 1,663     $ 46  
Investment income, net of related expenses
    55,827       26,428       43,727       80,920       25,031       30,796  
Other revenue
    15,123       16,018       15,051       14,211       11,495       3,628  
 
                                   
Total revenues
    72,659       44,030       60,497       96,723       38,189       34,470  
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    1,274       8,151       2,040       865       185       1,089  
Interest credited
    29,752       22,512       37,866       57,243       (5,518 )     35,270  
Policy acquisition costs and other insurance expenses
    42,476       14,535       10,077       27,513       35,641       6,835  
Other operating expenses
    2,898       1,649       2,167       1,840       2,334       564  
 
                                   
Total benefits and expenses
    76,400       46,847       52,150       87,461       32,642       43,758  
 
                                               
Operating income before income taxes
    (3,741 )     (2,817 )     8,347       9,262       5,547       (9,288 )
 
                                   
 
                                               
Operating to GAAP Reconciliation:
                                               
Operating income before income taxes
    (3,741 )     (2,817 )     8,347       9,262       5,547       (9,288 )
Investment and Derivative (losses) gains — non-operating (1)
    (23,360 )     159,276       10,289       (2,949 )     5,266       (28,626 )
Change in value of B36 embedded derivatives (1)
    (40,425 )     (161,021 )     (106,797 )     (11,452 )     (148,528 )     108,103  
GMXB embedded derivatives (1)
    35,213       (230,775 )     (35,772 )     5,357       (6,292 )     41,505  
EIA embedded derivatives — interest credited
    8,124       (48,896 )     43,871       9,248       (64,486 )     72,610  
EIA embedded derivatives — policy acq. costs
    (1,304 )     5,697       (8,274 )     (2,390 )     12,090       (13,394 )
DAC offset, net
    (1,529 )     157,941       63,394       2,817       155,301       (156,830 )
 
                                   
Income before income taxes
  $ (27,022 )   $ (120,595 )   $ (24,942 )   $ 9,893     $ (41,102 )   $ 14,080  
 
                                   
 
(1)   Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement
(RGA LOGO)

Page 7


 

Reinsurance Group of America, Incorporated
U.S. Asset Intensive Sub-segment
(Cont’d)
                                         
    Three Months Ended
    March 31,   Dec. 31,   Sept. 30,   June 30,   March 31,
    2009   2008   2008   2008   2008
Annuity account values (in millions):
                                       
 
                                       
Fixed annuities (deferred)
  $ 1,406     $ 1,625     $ 1,670     $ 1,527     $ 1,140  
 
                                       
Net interest spread (fixed annuities):
    2.4 %     1.9 %     1.9 %     2.0 %     2.1 %
 
                                       
Equity-indexed annuities
  $ 3,813     $ 3,806     $ 3,677     $ 3,645     $ 3,540  
 
                                       
Variable annuities:
                                       
No riders
  $ 1,041     $ 1,063     $ 1,251     $ 1,359     $ 1,355  
GMDB only
    58       54       49       32       25  
GMIB only
    4       4       4       4       3  
GMAB only
    48       44       45       44       35  
GMWB only
    1,180       795       708       537       379  
GMDB / WB
    316       287       257       170       124  
Other
    26       24       26       23       20  
     
Total VA account values
  $ 2,673     $ 2,271     $ 2,340     $ 2,169     $ 1,941  
 
                                       
Fair value of living benefit riders
  $ 241     $ 276     $ 46     $ 10     $ 16  
 
                                       
Other annuities:
  $ 199     $ 199     $ 199     $     $  

Page 8


 

Reinsurance Group of America, Incorporated
U.S. Financial Reinsurance Sub-segment Operating Income
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Revenues:
                                               
Investment income, net of related expenses
  $ (65 )   $     $ 192     $ 356     $ 40     $ (105 )
Other revenue
    6,571       4,578       3,644       4,314       2,744       3,827  
 
                                   
Total revenues
    6,506       4,578       3,836       4,670       2,784       3,722  
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
                                   
Policy acquisition costs and other insurance expenses
    338       341       252       250       198       140  
Other operating expenses
    679       577       747       767       646       33  
 
                                   
Total benefits and expenses
    1,017       918       999       1,017       844       173  
 
                                               
Operating income before income taxes
    5,489       3,660       2,837       3,653       1,940       3,549  
 
                                   
 
                                               
Operating to GAAP Reconciliation:
                                               
Operating income before income taxes
    5,489       3,660       2,837       3,653       1,940       3,549  
Investment and Derivative (losses) gains — non-operating
    32       (110 )     (136 )     (2 )     (1 )     33  
 
                                   
Income before income taxes
  $ 5,521     $ 3,550     $ 2,701     $ 3,651     $ 1,939     $ 3,582  
 
                                   
(RGA LOGO)

Page 9


 

Reinsurance Group of America, Incorporated
Canadian Segment Operating Income
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Revenues:
                                               
Net premiums
  $ 138,056     $ 126,819     $ 128,930     $ 139,530     $ 138,992     $ (936 )
Investment income, net of related expenses
    30,360       32,873       35,836       35,692       36,033       (5,673 )
Investment related gains (losses), net
    1,262       1,419       1,063       978       422       840  
Other revenue
    1,697       826       4,289       13,204       13       1,684  
 
                                   
Total revenues
    171,375       161,937       170,118       189,404       175,460       (4,085 )
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    115,635       102,316       104,339       134,146       115,271       364  
Interest credited
    48       68       77       81       139       (91 )
Policy acquisition costs and other insurance expenses
    33,067       30,634       27,591       25,526       26,426       6,641  
Other operating expenses
    4,868       5,591       6,132       5,899       5,446       (578 )
 
                                   
Total benefits and expenses
    153,618       138,609       138,139       165,652       147,282       6,336  
 
                                               
Operating income before income taxes
    17,757       23,328       31,979       23,752       28,178       (10,421 )
 
                                   
 
                                               
Operating to GAAP Reconciliation:
                                               
Operating income before income taxes
    17,757       23,328       31,979       23,752       28,178       (10,421 )
Investment and Derivative (losses) gains — non-operating
    (1,571 )     (1,244 )     (2,246 )     3,026       (4,507 )     2,936  
 
                                   
Income before income taxes
  $ 16,186     $ 22,084     $ 29,733     $ 26,778     $ 23,671     $ (7,485 )
 
                                   
 
                                               
Loss and Expense Ratios:
                                               
Loss ratios (creditor business)
    41.2 %     35.5 %     42.3 %     90.4 %     40.7 %     0.5 %
Loss ratios (excluding creditor business)
    99.4 %     91.4 %     89.1 %     97.3 %     93.2 %     6.2 %
Claims and other policy benefits / (net premiums + investment income)
    68.7 %     64.1 %     63.3 %     76.6 %     65.9 %     2.8 %
Policy acquisition costs and other insurance expenses
    24.0 %     24.2 %     21.4 %     18.3 %     19.0 %     5.0 %
Other operating expenses
    3.5 %     4.4 %     4.8 %     4.2 %     3.9 %     -0.4 %
 
                                               
Note: The loss ratios on creditor reinsurance business are normally lower than traditional reinsurance, while allowances are normally higher as a percentage of premiums.
 
                                               
Foreign currency effect on*:
                                               
Net premiums
  $ (32,673 )   $ (29,546 )   $ 626     $ 11,315     $ 19,837     $ (52,510 )
Operating income before income taxes
  $ (5,477 )   $ (6,164 )   $ (264 )   $ 2,397     $ 4,715     $ (10,192 )
 
*   Represents effect as compared to comparable prior year period
(RGA LOGO)

Page 10


 

Reinsurance Group of America, Incorporated
Europe & South Africa Segment Operating Income
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Revenues:
                                               
Net premiums
  $ 173,256     $ 156,898     $ 176,184     $ 185,490     $ 189,196     $ (15,940 )
Investment income, net of related expenses
    6,749       7,599       9,065       8,778       7,551       (802 )
Other revenue
    260       240       33       68       60       200  
 
                                   
Total revenues
    180,265       164,737       185,282       194,336       196,807       (16,542 )
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    144,218       106,776       122,521       144,460       158,535       (14,317 )
Interest credited
                                   
Policy acquisition costs and other insurance expenses
    10,817       14,607       21,559       16,026       17,230       (6,413 )
Other operating expenses
    17,117       16,945       15,708       16,678       15,744       1,373  
 
                                   
Total benefits and expenses
    172,152       138,328       159,788       177,164       191,509       (19,357 )
 
                                               
Operating income before income taxes
    8,113       26,409       25,494       17,172       5,298       2,815  
 
                                   
 
                                               
Operating to GAAP Reconciliation:
                                               
Operating income before income taxes
    8,113       26,409       25,494       17,172       5,298       2,815  
Investment and Derivative (losses) gains — non-operating
    422       (4,598 )     (4,703 )     (131 )     745       (323 )
 
                                   
Income before income taxes
  $ 8,535     $ 21,811     $ 20,791     $ 17,041     $ 6,043     $ 2,492  
 
                                   
 
                                               
Loss and Expense Ratios:
                                               
Claims and other policy benefits
    83.2 %     68.1 %     69.5 %     77.9 %     83.8 %     -0.6 %
Policy acquisition costs and other insurance expenses
    6.2 %     9.3 %     12.2 %     8.6 %     9.1 %     -2.9 %
Other operating expenses
    9.9 %     10.8 %     8.9 %     9.0 %     8.3 %     1.6 %
 
                                               
Foreign currency effect on*:
                                               
Net premiums
  $ (56,890 )   $ (43,150 )   $ (9,380 )   $ 588     $ 4,247     $ (61,137 )
Operating income before income taxes
  $ (3,991 )   $ (7,816 )   $ (2,015 )   $ 606     $ 671     $ (4,662 )
 
                                               
Critical illness net premiums
  $ 46,323     $ 49,471     $ 59,227     $ 67,284     $ 60,442     $ (14,119 )
 
*   Represents effect as compared to comparable prior year period
(RGA LOGO)

Page 11


 

Reinsurance Group of America, Incorporated
Asia Pacific Segment Operating Income
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
Revenues:
                                               
Net premiums
  $ 243,728     $ 227,666     $ 254,497     $ 277,716     $ 240,935     $ 2,793  
Investment income, net of related expenses
    12,697       11,317       12,272       12,397       11,414       1,283  
Other revenue
    9,729       5,106       2,811       1,851       2,552       7,177  
 
                                   
Total revenues
    266,154       244,089       269,580       291,964       254,901       11,253  
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    212,414       178,989       201,707       225,011       193,669       18,745  
Policy acquisition costs and other insurance expenses
    30,429       25,556       25,053       28,386       28,081       2,348  
Other operating expenses
    16,171       17,235       17,774       15,801       15,102       1,069  
 
                                   
Total benefits and expenses
    259,014       221,780       244,534       269,198       236,852       22,162  
 
                                               
Operating income before income taxes
    7,140       22,309       25,046       22,766       18,049       (10,909 )
 
                                   
 
                                               
Operating to GAAP Reconciliation:
                                               
Operating income before income taxes
    7,140       22,309       25,046       22,766       18,049       (10,909 )
Investment and Derivative (losses) gains — non-operating
    (3,567 )     2,156       (3,821 )     (1,510 )     514       (4,081 )
 
                                   
Income before income taxes
  $ 3,573     $ 24,465     $ 21,225     $ 21,256     $ 18,563     $ (14,990 )
 
                                   
 
                                               
Loss and Expense Ratios:
                                               
Claims and other policy benefits
    87.2 %     78.6 %     79.3 %     81.0 %     80.4 %     6.8 %
Policy acquisition costs and other insurance expenses
    12.5 %     11.2 %     9.8 %     10.2 %     11.7 %     0.8 %
Other operating expenses
    6.6 %     7.6 %     7.0 %     5.7 %     6.3 %     0.3 %
 
                                               
Foreign currency effect on*:
                                               
Net premiums
  $ (55,173 )   $ (39,028 )   $ 3,036     $ 8,629     $ 22,356     $ (77,529 )
Operating income before income taxes
  $ (246 )   $ (1,972 )   $ 1,078     $ 2,307     $ 2,116     $ (2,362 )
 
                                               
Critical illness net premiums
  $ 54,152     $ 48,591     $ 51,979     $ 67,348     $ 45,863     $ 8,289  
 
*   Represents effect as compared to comparable prior year period
(RGA LOGO)

Page 12


 

Reinsurance Group of America, Incorporated
Corporate and Other Segment Operating Income

(Includes A&H beginning 1/1/09)
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
Revenues:
                                               
Net premiums
  $ 2,550     $ 1,776     $ 1,758     $ 1,396     $ 1,886     $ 664  
Investment income, net of related expenses
    15,067       18,384       19,165       19,263       22,026       (6,959 )
Other revenue
    (91 )     (706 )     1,978       2,062       1,012       (1,103 )
 
                                   
Total revenues
    17,526       19,454       22,901       22,721       24,924       (7,398 )
 
                                               
Benefits and expenses:
                                               
Claims and other policy benefits
    271       868       83       35       2       269  
Policy acquisition costs and other insurance expenses
    (12,692 )     (13,143 )     (11,775 )     (11,233 )     (9,973 )     (2,719 )
Other operating expenses
    10,413       1,869       8,602       8,891       10,830       (417 )
Interest expense
    22,117       21,552       9,935       21,580       23,094       (977 )
Collateral finance facility expense
    2,314       7,432       6,851       6,966       7,474       (5,160 )
 
                                   
Total benefits and expenses
    22,423       18,578       13,696       26,239       31,427       (9,004 )
 
                                               
Operating income before income taxes
    (4,897 )     876       9,205       (3,518 )     (6,503 )     1,606  
 
                                   
 
                                               
Operating to GAAP Reconciliation:
                                               
Operating income before income taxes
    (4,897 )     876       9,205       (3,518 )     (6,503 )     1,606  
Investment and Derivative (losses) gains — non-operating
    (2,040 )     (1,968 )     (37,119 )     241       (371 )     (1,669 )
 
                                   
Income before income taxes
  $ (6,937 )   $ (1,092 )   $ (27,914 )   $ (3,277 )   $ (6,874 )   $ (63 )
 
                                   
 
                                               
Foreign currency effect on*:
                                               
Net premiums
  $ 46     $ 55     $ 42     $ 33     $ 23     $ 23  
Operating income before income taxes
  $ (1,279 )   $ (1,396 )   $ (136 )   $ 298     $ 369     $ (1,648 )
 
*   Represents effect as compared to comparable prior year period
(RGA LOGO)

Page 13


 

Reinsurance Group of America, Incorporated
Summary of Pre-tax Segment Operating Income
                                                 
                                            Current  
    Three Months Ended     Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
                                               
U.S. Traditional
  $ 72,578     $ 76,665     $ 73,017     $ 96,259     $ 56,956     $ 15,622  
U.S. Asset Intensive
    (3,741 )     (2,817 )     8,347       9,262       5,547       (9,288 )
U.S. Financial Reinsurance
    5,489       3,660       2,837       3,653       1,940       3,549  
 
                                   
Total U.S. Segment
    74,326       77,508       84,201       109,174       64,443       9,883  
Canadian Segment
    17,757       23,328       31,979       23,752       28,178       (10,421 )
Europe & South Africa Segment
    8,113       26,409       25,494       17,172       5,298       2,815  
Asia Pacific Segment
    7,140       22,309       25,046       22,766       18,049       (10,909 )
Corporate and Other
    (4,897 )     876       9,205       (3,518 )     (6,503 )     1,606  
 
                                   
Consolidated
  $ 102,439     $ 150,430     $ 175,925     $ 169,346     $ 109,465     $ (7,026 )
 
                                   
(RGA LOGO)

Page 14


 

Reinsurance Group of America, Incorporated
Investments
Cash and Invested Assets
                                         
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,  
(USD thousands)   2009     2008     2008     2008     2008  
 
                                       
Fixed maturity securities, available-for-sale
  $ 8,831,920     $ 8,531,804     $ 9,121,953     $ 9,667,961     $ 9,387,094  
Mortgage loans on real estate
    764,038       775,050       782,282       798,896       812,539  
Policy loans
    1,081,030       1,096,713       1,048,517       1,048,517       1,039,464  
Funds withheld at interest
    4,505,054       4,520,398       4,806,642       4,825,297       4,650,948  
Short-term investments
    54,552       58,123       32,520       47,081       46,336  
Other invested assets
    582,784       628,649       432,982       418,864       389,437  
Cash and cash equivalents
    586,542       875,403       412,255       362,689       304,083  
 
                             
Total cash and invested assets
  $ 16,405,920     $ 16,486,140     $ 16,637,151     $ 17,169,305     $ 16,629,901  
 
                             
Investment Income and Yield Summary
(Excludes Funds Withheld)
                                                 
    Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
(USD thousands)   2009     2008     2008     2008     2008     Quarter  
 
                                               
Average invested assets at amortized cost (1)
  $ 12,776,598     $ 12,245,727     $ 12,185,216     $ 11,696,386     $ 11,539,433     $ 1,237,165  
Net investment income (1)
  $ 174,300     $ 177,358     $ 179,193     $ 173,587     $ 170,899     $ 3,401  
Investment yield (ratio of net investment income to average invested assets)
    5.57 %     5.92 %     6.01 %     6.07 %     6.06 %     -0.49 %
 
(1)   Excludes funds withheld
     
(RGA LOGO)
 
Page 15

 


 

Reinsurance Group of America, Incorporated
Investments
Amortized cost, gross unrealized gains and losses, and estimated fair values of fixed maturity and equity securities
March 31, 2009
                                         
                            Estimated    
    Amortized   Unrealized   Unrealized   Fair   % of
(USD thousands)   Cost   Gains   Losses   Value   Total
 
Available-for-sale:
                                       
U.S. corporate securities
  $ 3,779,317     $ 18,970     $ 696,017     $ 3,102,270       35.1 %
Canadian and Canadian provincial governments
    1,498,249       326,243       17,230       1,807,262       20.5 %
Residential mortgage-backed securities
    1,244,713       36,791       74,215       1,207,289       13.7 %
Foreign corporate securities
    1,293,068       15,836       160,432       1,148,472       13.0 %
Asset-backed securities
    511,088       4,538       130,421       385,205       4.3 %
Commercial mortgage-backed securities
    1,087,722       4,621       370,351       721,992       8.2 %
U.S. government and agencies
    3,306       465             3,771       0.0 %
State and political subdivisions
    46,440             11,859       34,581       0.4 %
Other foreign government securities
    409,546       14,019       2,487       421,078       4.8 %
     
Total fixed maturity securities
    9,873,449       421,483       1,463,012       8,831,920       100.0 %
     
 
                                       
 
                                       
Non-redeemable preferred stock
    175,594       94       86,463       89,225       70.7 %
Common stock
    40,200       75       3,344       36,931       29.3 %
     
Total equity securities
  $ 215,794     $ 169     $ 89,807     $ 126,156       100.0 %
     
December 31, 2008
                                         
                            Estimated    
    Amortized   Unrealized   Unrealized   Fair   % of
(USD thousands)   Cost   Gains   Losses   Value   Total
 
Available-for-sale:
                                       
U.S. corporate securities
  $ 3,577,116     $ 34,262     $ 598,745     $ 3,012,633       35.3 %
Canadian and Canadian provincial governments
    1,500,511       397,899       7,171       1,891,239       22.2 %
Residential mortgage-backed securities
    1,231,123       24,838       106,776       1,149,185       13.5 %
Foreign corporate securities
    1,112,018       14,335       152,920       973,433       11.4 %
Asset-backed securities
    484,577       2,098       147,297       339,378       4.0 %
Commercial mortgage-backed securities
    1,085,062       2,258       326,730       760,590       8.9 %
U.S. government and agencies
    7,555       876             8,431       0.1 %
State and political subdivisions
    46,537             7,883       38,654       0.4 %
Other foreign government securities
    338,349       20,062       150       358,261       4.2 %
     
Total fixed maturity securities
    9,382,848       496,628       1,347,672       8,531,804       100.0 %
     
 
                                       
 
                                       
Non-redeemable preferred stock
    187,510       49       64,160       123,399       77.4 %
Common stock
    40,582             4,607       35,975       22.6 %
     
Total equity securities
  $ 228,092     $ 49     $ 68,767     $ 159,374       100.0 %
     
     
(RGA LOGO)
 
   
  Page 16

 


 

Reinsurance Group of America, Incorporated
Investments
Corporate Securities by Sector (Fixed Maturities and Equities)
                                                                 
    March 31, 2009     December 31, 2008  
            Estimated Fair             Average Credit             Estimated             Average Credit  
(USD thousands)   Amortized Cost     Value     % of Total     Ratings     Amortized Cost     Fair Value     % of Total     Ratings  
 
                                                               
Financial Institutions
                                                               
Banking
  $ 1,154,761     $ 851,182       19.4 %     A     $ 1,138,663     $ 924,098       22.2 %     A  
Brokerage
    88,727       68,618       1.6 %     A-       104,169       96,516       2.3 %     A  
Finance Comp.
    282,021       210,325       4.8 %     A+       278,132       228,659       5.5 %     A+  
Insurance
    312,709       204,335       4.7 %     A-       309,703       222,116       5.4 %     A-  
REITs
    145,818       103,952       2.4 %   BBB+     153,626       110,172       2.7 %   BBB+
Other Finance
    213,542       163,881       3.7 %     A       191,650       140,161       3.4 %     A  
Industrials
                                                               
Basic
    225,742       188,080       4.3 %   BBB+     213,540       173,826       4.2 %   BBB+
Capital Goods
    200,870       183,968       4.2 %     A-       187,041       172,958       4.2 %     A-  
Communications
    518,129       484,849       11.1 %   BBB+     449,334       425,633       10.3 %   BBB+
Consumer Cyclical
    248,146       202,625       4.6 %   BBB+     244,476       198,485       4.8 %   BBB+
Consumer Noncyclical
    399,034       383,053       8.8 %   BBB+     341,126       323,239       7.8 %   BBB+
Energy
    325,811       294,876       6.7 %   BBB+     248,579       215,634       5.2 %   BBB+
Technology
    95,458       86,304       2.0 %   BBB+     55,043       43,998       1.1 %   BBB+
Transportation
    223,448       192,655       4.4 %   BBB+     217,515       190,303       4.6 %   BBB+
Other Industrial
    60,337       32,542       0.7 %   BBB+     55,898       28,314       0.7 %   BBB+
Utilities
                                                               
Electric
    486,831       447,186       10.2 %   BBB+     446,048       399,235       9.6 %   BBB+
Natural Gas
    224,739       205,849       4.7 %   BBB+     200,636       174,308       4.2 %   BBB+
Other Utility
    23,730       21,633       0.5 %     A-       22,320       20,447       0.5 %     A-  
Other Sectors
    58,326       50,985       1.2 %   AA     59,728       57,338       1.3 %   AA
 
                                                   
Total
  $ 5,288,179     $ 4,376,898       100.0 %           $ 4,917,227     $ 4,145,440       100.0 %        
 
                                                   
     
(RGA LOGO)
 
   
  Page 17

 


 

Reinsurance Group of America, Incorporated
Investments
Ratings of Fixed Maturity Securities
                                                                                                                                 
(USD thousands)         March 31, 2009     December 31, 2008     September 30, 2008     June 30, 2008     March 31, 2008  
        Rating Agency   Amortized     Estimated             Amortized     Estimated             Amortized     Estimated             Amortized     Estimated     % of     Amortized     Estimated     % of  
NAIC Designation     Designation   Cost     Fair Value     % of Total     Cost     Fair Value     % of Total     Cost     Fair Value     % of Total     Cost     Fair Value     Total     Cost     Fair Value     Total  
       
 
                                                                                                                       
1    
AAA
  $ 2,887,693     $ 2,631,984       29.8 %   $ 2,851,818     $ 2,594,429       30.4 %   $ 2,931,176     $ 2,780,454       30.5 %   $ 2,856,457     $ 2,777,642       28.7 %   $ 2,752,988     $ 2,710,839       28.9 %
1    
AA
    2,205,621       2,188,305       24.8 %     2,147,187       2,161,537       25.3 %     2,601,007       2,624,357       28.8 %     2,572,375       2,809,406       29.1 %     2,447,193       2,754,675       29.3 %
1    
A
    1,952,386       1,777,195       20.1 %     2,002,963       1,851,764       21.7 %     1,947,355       1,779,129       19.5 %     2,012,559       2,028,840       21.0 %     1,926,854       1,970,574       21.0 %
2    
BBB
    2,284,836       1,877,063       21.3 %     1,991,276       1,649,513       19.3 %     1,817,281       1,632,806       17.9 %     1,812,894       1,730,612       17.9 %     1,725,432       1,676,870       17.8 %
3    
BB
    386,137       260,276       2.9 %     268,276       195,088       2.3 %     253,665       231,706       2.5 %     267,856       253,695       2.6 %     222,209       214,105       2.3 %
4    
B
    88,213       53,946       0.6 %     77,830       50,064       0.6 %     58,868       43,503       0.5 %     51,320       46,722       0.5 %     48,225       43,989       0.5 %
5    
CCC and lower
    61,502       36,804       0.4 %     33,945       22,538       0.3 %     31,336       27,361       0.3 %     18,375       17,250       0.2 %     16,860       15,987       0.2 %
6    
In or near default
    7,061       6,347       0.1 %     9,553       6,871       0.1 %     2,636       2,637       0.0 %     3,074       3,794       0.0 %     53       55       0.0 %
       
 
                                                                                                   
       
Total
  $ 9,873,449     $ 8,831,920             $ 9,382,848     $ 8,531,804             $ 9,643,324     $ 9,121,953             $ 9,594,910     $ 9,667,961             $ 9,139,814     $ 9,387,094          
       
 
                                                                                                   
Structured Fixed Maturity Securities
                                                                                 
    March 31, 2009     December 31, 2008     September 30, 2008     June 30, 2008     March 31, 2008  
            Estimated Fair             Estimated Fair             Estimated Fair     Amortized     Estimated Fair     Amortized     Estimated Fair  
(USD thousands)   Amortized Cost     Value     Amortized Cost     Value     Amortized Cost     Value     Cost     Value     Cost     Value  
 
                                                                               
Residential mortgage-backed securities:
                                                                               
Agency
  $ 796,869     $ 829,447     $ 851,507     $ 868,479     $ 859,530     $ 857,249     $ 872,914     $ 871,337     $ 930,612     $ 942,931  
Non-agency
    447,844       377,842       379,616       280,706       443,461       405,466       428,089       401,199       401,824       382,700  
 
                                                           
Total residential mortgage-backed securities
    1,244,713       1,207,289       1,231,123       1,149,185       1,302,991       1,262,715       1,301,003       1,272,536       1,332,436       1,325,631  
Commercial mortgage-backed securities
    1,087,722       721,992       1,085,062       760,590       1,029,457       905,431       889,792       842,140       727,492       686,678  
Asset-backed securities
    511,088       385,205       484,577       339,378       483,308       395,907       505,193       452,347       493,293       446,031  
 
                                                           
Total
  $ 2,843,523     $ 2,314,486     $ 2,800,762     $ 2,249,153     $ 2,815,756     $ 2,564,053     $ 2,695,988     $ 2,567,023     $ 2,553,221     $ 2,458,340  
 
                                                           
(RGA LOGO)

Page 18


 

Reinsurance Group of America, Incorporated
Investments
Subprime Mortgage Exposure
(Includes Funds Withheld Portfolios)
                                                 
    March 31, 2009  
(USD thousands)   AAA     AA     A  
                            Estimated              
    Amortized     Estimated     Amortized     Fair     Amortized     Estimated  
Underwriting Year   Cost     Fair Value     Cost     Value     Cost     Fair Value  
 
                                               
2003 & Prior
  $ 10,616     $ 7,543     $ 1,102     $ 570     $ 1,748     $ 696  
2004
                14,945       9,884       32,593       25,223  
2005
    25,386       19,843       32,779       23,779       13,972       7,730  
2006
                            3,370       1,638  
2007
                                   
2008
                                   
2009
                                   
 
                                   
Total
  $ 36,002     $ 27,386     $ 48,826     $ 34,233     $ 51,683     $ 35,287  
 
                                   
                                                 
    BBB     Below Investment Grade     Total  
                            Estimated              
    Amortized     Estimated     Amortized     Fair     Amortized     Estimated  
Underwriting Year   Cost     Fair Value     Cost     Value     Cost     Fair Value  
 
                                               
2003 & Prior
  $ 5,623     $ 3,230     $ 798     $ 80     $ 19,887     $ 12,119  
2004
                3,371       3,367       50,909       38,474  
2005
    18,362       9,239       18,086       1,696       108,585       62,287  
2006
    4,500       2,081       579       575       8,449       4,294  
2007
    888       318       13,819       9,141       14,707       9,459  
2008
                                   
2009
                                   
 
                                   
Total
  $ 29,373     $ 14,868     $ 36,653     $ 14,859     $ 202,537     $ 126,633  
 
                                   
                                                 
    December 31, 2008  
(USD thousands)   AAA     AA     A  
                            Estimated              
    Amortized     Estimated     Amortized     Fair     Amortized     Estimated  
Underwriting Year   Cost     Fair Value     Cost     Value     Cost     Fair Value  
 
2003 & Prior
  $ 11,007     $ 9,116     $ 6,509     $ 4,320     $ 1,813     $ 1,227  
2004
                21,220       13,437       33,728       26,228  
2005
    37,134       27,793       36,424       26,471       6,514       2,582  
2006
    135       134       4,500       2,076       4,998       1,991  
2007
                888       283              
2008
                                   
 
                                   
Total
  $ 48,276     $ 37,043     $ 69,541     $ 46,587     $ 47,053     $ 32,028  
 
                                   
                                                 
    BBB     Below Investment Grade     Total  
                            Estimated              
    Amortized     Estimated     Amortized     Fair     Amortized     Estimated  
Underwriting Year   Cost     Fair Value     Cost     Value     Cost     Fair Value  
 
2003 & Prior
  $ 413     $ 77     $ 807     $ 106     $ 20,549     $ 14,846  
2004
                7,900       5,727       62,848       45,392  
2005
    11,908       6,529       17,905       5,739       109,885       69,114  
2006
    3,442       2,618       3,287       449       16,362       7,268  
2007
                19,588       10,880       20,476       11,163  
2008
                                   
 
                                   
Total
  $ 15,763     $ 9,224     $ 49,487     $ 22,901     $ 230,120     $ 147,783  
 
                                   
(RGA LOGO)

Page 19


 

Reinsurance Group of America, Incorporated
Investments
CMBS Exposure
**Note: Includes Directly Held Investments & Funds Withheld Portfolios
                                                 
    March 31, 2009  
(USD thousands)   AAA     AA     A  
            Estimated             Estimated             Estimated  
            Fair             Fair             Fair  
Underwriting Year   Amortized Cost     Value     Amortized Cost     Value     Amortized Cost     Value  
 
                                               
2003 & Prior
  $ 236,597     $ 241,379     $ 24,642     $ 19,591     $ 23,571     $ 14,142  
2004
    50,560       45,563       2,352       1,124       11,528       4,296  
2005
    210,372       135,564       2,533       755       54,179       29,328  
2006
    292,923       210,546       21,888       10,352       32,905       21,502  
2007
    370,613       241,694       50,753       12,593       59,212       19,074  
2008
    38,522       36,068       19,108       8,919       16,570       8,943  
2009
    5,228       5,255                          
 
                                   
Total
  $ 1,204,815     $ 916,069     $ 121,276     $ 53,334     $ 197,965     $ 97,285  
 
                                   
                                                 
    BBB     Below Investment Grade     Total  
            Estimated             Estimated             Estimated  
            Fair             Fair             Fair  
Underwriting Year   Amortized Cost     Value     Amortized Cost     Value     Amortized Cost     Value  
 
                                               
2003 & Prior
  $ 24,124     $ 13,836     $     $     $ 308,934     $ 288,948  
2004
                            64,440       50,983  
2005
    3,690       1,465                   270,774       167,112  
2006
    13,824       7,768       18,130       10,379       379,670       260,547  
2007
                            480,578       273,361  
2008
    12,842       7,777                   87,042       61,707  
2009
                            5,228       5,255  
 
                                   
Total
  $ 54,480     $ 30,846     $ 18,130     $ 10,379     $ 1,596,666     $ 1,107,913  
 
                                   
NOTE: Totals include directly held investments with amortized cost of $1,087.7 million and fair value of $722.0 million as well as investments in funds withheld with amortized cost of $508.9 million and fair value of $385.9 million.
                                                 
    December 31, 2008  
(USD thousands)   AAA     AA     A  
            Estimated             Estimated             Estimated  
            Fair             Fair             Fair  
Underwriting Year   Amortized Cost     Value     Amortized Cost     Value     Amortized Cost     Value  
 
                                               
2003 & Prior
  $ 250,720     $ 254,690     $ 24,276     $ 17,518     $ 28,432     $ 16,744  
2004
    50,245       46,737       2,147       999       10,603       3,835  
2005
    200,140       136,101       2,530       682       54,173       30,079  
2006
    306,478       234,575       16,219       6,074       45,346       31,379  
2007
    362,226       256,163       50,648       14,343       59,013       20,636  
2008
    30,017       28,501       23,387       10,698       18,342       11,186  
 
                                   
Total
  $ 1,199,826     $ 956,767     $ 119,207     $ 50,314     $ 215,909     $ 113,859  
 
                                   
                                                 
    BBB     Below Investment Grade     Total  
            Estimated             Estimated             Estimated  
            Fair             Fair             Fair  
Underwriting Year   Amortized Cost     Value     Amortized Cost     Value     Amortized Cost     Value  
 
                                               
2003 & Prior
  $ 18,144     $ 11,938     $     $     $ 321,572     $ 300,890  
2004
                            62,995       51,571  
2005
    3,679       776                   260,522       167,638  
2006
    15,283       8,709       1,305       941       384,631       281,678  
2007
                            471,887       291,142  
2008
                            71,746       50,385  
 
                                   
Total
  $ 37,106     $ 21,423     $ 1,305     $ 941     $ 1,573,353     $ 1,143,304  
 
                                   
NOTE: Totals include directly held investments with amortized cost of $1,085.1 million and fair value of $760.6 million as well as investments in funds withheld with amortized cost of $488.3 million and fair value of $382.7 million.
(RGA LOGO)

Page 20


 

Reinsurance Group of America, Incorporated
Investments
Gross Unrealized Losses Aging
Fixed Maturity Securities
                                                                                 
(USD thousands)   March 31, 2009     December 31, 2008     September 30, 2008     June 30, 2008     March 31, 2008  
    Gross Unrealized             Gross Unrealized             Gross Unrealized             Gross Unrealized             Gross Unrealized        
    Losses     % of Total     Losses     % of Total     Losses     % of Total     Losses     % of Total     Losses     % of Total  
 
Less than 20%
  $ 320,296       20.6 %   $ 322,159       22.7 %   $ 466,855       48.5 %   $ 315,350       64.7 %   $ 218,655       58.8 %
20% or more for less than six months
    406,885       26.2 %     766,789       54.1 %     323,511       33.7 %     97,591       20.1 %     120,680       32.5 %
20% or more for six months or greater
    735,831       47.4 %     258,724       18.3 %     94,982       9.9 %     38,715       8.0 %     10,222       2.8 %
 
                                                           
Total
  $ 1,463,012       94.2 %   $ 1,347,672       95.1 %   $ 885,348       92.1 %   $ 451,656       92.8 %   $ 349,557       94.1 %
 
                                                           
Equity Securities
                                                                                 
(USD thousands)   March 31, 2009     December 31, 2008     September 30, 2008     June 30, 2008     March 31, 2008  
    Gross Unrealized             Gross Unrealized             Gross Unrealized             Gross Unrealized             Gross Unrealized        
    Losses     % of Total     Losses     % of Total     Losses     % of Total     Losses     % of Total     Losses     % of Total  
 
Less than 20%
  $ 1,070       0.1 %   $ 2,231       0.2 %   $ 5,293       0.6 %   $ 10,562       2.2 %   $ 11,470       3.1 %
20% or more for less than six months
    10,675       0.7 %     29,958       2.1 %     57,710       6.0 %     21,904       4.5 %     10,274       2.8 %
20% or more for six months or greater
    78,062       5.0 %     36,578       2.6 %     12,291       1.3 %     2,550       0.5 %     0       0.0 %
 
                                                           
Total
  $ 89,807       5.8 %   $ 68,767       4.9 %   $ 75,294       7.9 %   $ 35,016       7.2 %   $ 21,744       5.9 %
 
                                                           
(RGA LOGO)

Page 21


 

Reinsurance Group of America, Incorporated
Investments
Fixed Maturities and Equity Securities Below Amortized Cost
                                                 
    As of March 31, 2009  
(USD thousands)   Less than 12 months     Equal to or greater than 12 months     Total  
            Gross Unrealized             Gross Unrealized             Gross Unrealized  
    Estimated Fair Value     Losses     Estimated Fair Value     Losses     Estimated Fair Value     Losses  
Investment grade securities:
                                               
U.S. corporate securities
  $ 1,137,224     $ 172,194     $ 1,141,332     $ 399,942     $ 2,278,556     $ 572,136  
Canadian and Canadian provincial governments
    242,153       8,484       106,505       8,746       348,658       17,230  
Residential mortgage-backed securities
    105,818       21,388       275,684       37,384       381,502       58,772  
Foreign corporate securities
    486,332       53,748       219,760       89,413       706,092       143,161  
Asset-backed securities
    90,759       20,779       189,007       86,683       279,766       107,462  
Commercial mortgage-backed securities
    419,538       212,518       234,307       156,252       653,845       368,770  
U.S. government and agencies
                                   
State and political subdivisions
    5,945       547       25,637       6,288       31,582       6,835  
Other foreign government securities
    97,393       2,195       3,524       292       100,917       2,487  
 
                                   
Investment grade securities
    2,585,162       491,853       2,195,756       785,000       4,780,918       1,276,853  
 
                                   
 
                                               
Non-investment grade securities:
                                               
U.S. corporate securities
    128,276       36,070       120,981       87,811       249,257       123,881  
Asset-backed securities
    7,853       5,788       10,407       17,171       18,260       22,959  
Foreign corporate securities
    20,208       7,090       12,383       10,181       32,591       17,271  
Residential mortgage-backed securities
    16,312       4,411       11,301       11,032       27,613       15,443  
Commercial mortgage-backed securities
                213       1,581       213       1,581  
State and political subdivisions
                3,000       5,024       3,000       5,024  
 
                                   
Non-investment grade securities
    172,649       53,359       158,285       132,800       330,934       186,159  
 
                                   
Total fixed maturity securities
  $ 2,757,811     $ 545,212     $ 2,354,041     $ 917,800     $ 5,111,852     $ 1,463,012  
 
                                   
 
                                               
Equity securities
  $ 49,880     $ 30,666     $ 48,636     $ 59,141     $ 98,516     $ 89,807  
Total number of securities in an unrealized loss position
    929               865               1,794          
 
                                               
    As of December 31, 2008  
(USD thousands)   Less than 12 months     Equal to or greater than 12 months     Total  
            Gross Unrealized             Gross Unrealized             Gross Unrealized  
    Estimated Fair Value     Losses     Estimated Fair Value     Losses     Estimated Fair Value     Losses  
 
                                               
Investment grade securities:
                                               
U.S. corporate securities
  $ 1,407,547     $ 240,299     $ 810,115     $ 281,947     $ 2,217,662     $ 522,246  
Canadian and Canadian provincial governments
    114,754       2,751       89,956       4,420       204,710       7,171  
Residential mortgage-backed securities
    190,525       58,026       213,310       39,794       403,835       97,820  
Foreign corporate securities
    508,102       82,490       140,073       59,816       648,175       142,306  
Asset-backed securities
    118,608       40,139       173,505       99,147       292,113       139,286  
Commercial mortgage-backed securities
    523,475       200,567       188,638       126,163       712,113       326,730  
U.S. government and agencies
                                   
State and political subdivisions
    20,403       1,947       18,250       5,936       38,653       7,883  
Other foreign government securities
    16,419       33       4,125       117       20,544       150  
 
                                   
Investment grade securities
    2,899,833       626,252       1,637,972       617,340       4,537,805       1,243,592  
 
                                   
 
                                               
Non-investment grade securities:
                                               
U.S. corporate securities
    140,426       36,615       60,378       39,884       200,804       76,499  
Asset-backed securities
    3,465       2,060       11,156       5,951       14,621       8,011  
Foreign corporate securities
    24,637       7,227       2,032       3,387       26,669       10,614  
Residential mortgage-backed securities
    8,089       5,944       4,496       3,012       12,585       8,956  
 
                                   
Non-investment grade securities
    176,617       51,846       78,062       52,234       254,679       104,080  
 
                                   
Total fixed maturity securities
  $ 3,076,450     $ 678,098     $ 1,716,034     $ 669,574     $ 4,792,484     $ 1,347,672  
 
                                   
 
                                               
Equity securities
  $ 61,180     $ 26,923     $ 61,249     $ 41,844     $ 122,429     $ 68,767  
Total number of securities in an unrealized loss position
    1,039               677               1,716          
(RGA GRAPHIC)

Page 22


 

Reinsurance Group of America, Incorporated
Investments
Consolidated Investment Related Gains and Losses
                                                 
(USD thousands)   Three Months Ended     Current Qtr  
    March 31,     Dec. 31,     Sept. 30,     June 30,     March 31,     vs. PY  
    2009     2008     2008     2008     2008     Quarter  
 
                                               
Fixed Maturity and Equity Securities:
                                               
Gain on investment activity
  $ 12,230     $ 10,204     $ 6,169     $ 5,928     $ 10,080     $ 2,150  
Loss on investment activity
    (19,649 )     (5,759 )     (8,564 )     (4,378 )     (5,360 )     (14,289 )
Impairments
    (39,825 )     (15,563 )     (109,283 )     (548 )     (5,150 )     (34,675 )
 
                                   
Net gain/(loss) on fixed maturity and equity securities
    (47,244 )     (11,118 )     (111,678 )     1,002       (430 )     (46,814 )
 
                                               
Other non-derivative gain/(loss), net
    (2,409 )     (672 )     (64 )     (344 )     369       (2,778 )
 
                                               
Free-standing Derivatives:
                                               
Credit Default Swaps
    (1,911 )     (6,732 )     (2,526 )     1,413       (6,486 )     4,575  
Interest Rate Swaps
    (38,864 )     152,098       7,681       (6,462 )     5,515       (44,379 )
Futures
    22,311       10,870       6,120       2,294       (185 )     22,496  
Other
    3,109       2,153       1,440       1,877             3,109  
Currency Forwards
    (2,042 )     1,638       289       (764 )     777       (2,819 )
 
                                   
Total free-standing derivatives
    (17,397 )     160,027       13,004       (1,642 )     (379 )     (17,018 )
 
                                               
Embedded Derivatives:
                                               
B36
    (40,425 )     (161,021 )     (106,797 )     (11,452 )     (148,528 )     108,103  
GMXB
    35,213       (230,775 )     (35,772 )     5,357       (6,292 )     41,505  
 
                                   
Total embedded derivatives
    (5,212 )     (391,796 )     (142,569 )     (6,095 )     (154,820 )     149,608  
 
                                               
Net gain/(loss) on total derivatives
    (22,609 )     (231,769 )     (129,565 )     (7,737 )     (155,199 )     132,590  
 
                                               
 
                                   
Total investment related losses, net
  $ (72,262 )   $ (243,559 )   $ (241,307 )   $ (7,079 )   $ (155,260 )   $ 82,998  
 
                                   
(RGA GRAPHIC)

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