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): March 17, 2015
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
| Missouri | 1-11848 | 43-1627032 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
16600 Swingley Ridge Road, 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):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
As previously reported in Reinsurance Group of America, Incorporated’s Current Report on Form 8-K furnished on March 13, 2015, Jack B. Lay, the company’s Senior Executive Vice President and Chief Financial Officer will make a presentation to investors at the J.P. Morgan 2015 Insurance Conference on Wednesday, March 18, 2015. Copies of the slides used in the presentation will be available on the company’s web site at www.rgare.com (through the link on the Investor Relations page) and are attached as Exhibit 99.1 and incorporated herein by reference.
The information in this Item 7.01 and the exhibit attached hereto will not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor will such information or exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits. The following documents are filed as exhibits to this report: |
| 99.1 | Copy of slide presentation for the J.P. Morgan 2015 Insurance Conference |
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: March 17, 2015 | By: | /s/ John W. Hayden | ||||
| John W. Hayden | ||||||
| Senior Vice President, Controller | ||||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Copy of slide presentation for the J.P. Morgan 2015 Insurance Conference | |
| Exhibit 99.1
|
Reinsurance Group of America, Incorporated
Investor Presentation for the J.P. Morgan Insurance Conference
March 2015
Safe Harbor
This presentation contains forward -looking statements, including among other things, investment performance, statements relating to projections of the revenue or earnings, and future financial performance and growth potential of RGA and its subsidiaries. Important fact or scould cause actual results and events to differ materially from those expressed or implied by such 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, that in turn could affect regulatory capital, (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, including ongoing uncertainties regarding the amount of United States sovereign debt and the credit rating thereof, (17) competitive factors and competitors’ responses to our initiatives, (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) action by regulators who have author it y over our reinsurance operations in the jurisdictions in which we operate, (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 and interest onour debt obligations, and (27) other risks and uncertainties described in this presentation and in our other filings with the SEC, including the “Risk Factors set forth in our filings with the Securities and Exchange Commission. Any forward -looking statements speak only as of the date hereof. We do not undertake any obligations to update these forward -looking statements, even though our situation may change in the future.
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Capital Allocation
Effective in 1Q 2006, the Company changed its capital allocation methodology from a regulatory -based approach to an economic -based approach. To enhance comparability, all prior period segment results in this presentation havebeen adjusted to reflect the new methodology. This change in capital allocation does not affect the Company “s reported consolidated financial results.
Non-GAAP 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 because that measure excludes the effect of net realized capital gains and losses, changes in the fair valueofcertain embedded derivatives and related deferred acquisition costs.Theseitems tendto behighly variable primarily due to the credit market and interest rate environment and are not necessarily indicative of the performance of our underlying businesses. Additionally, operating income excludes any net gain or loss from discontinued operations, which management believes is 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.
Additionally, the Company evaluates its stockholder equity position excluding theimpactof “Other Comprehensive Income “. This is also considered a non-GAAP measure. The Company believes it is important to evaluate its stockholders “equity position to exclude the effect of Other Comprehensive Income since the net unrealized gains or losses included in Other Comprehensive Income 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.
Reconciliations ofnon-GAAP measures to the nearest GAAP measures are provided attheendofthis presentation.
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RGA at a Glance
§ RGA is recognized as a high-quality, global provider of risk-transfer and other financial solutions§ RGA helps clients manage risk and capital efficiently & effectively§ RGA is unique as the only pure-play, global life reinsurer§ RGA is a global leader in a concentrated sector top 5 players control 80% of global premiums § RGA has proven expertise in mortality, morbidity, longevity, and structured solutions§ RGA has a unique culture client centric, innovative, collaborative
2014 Operating Income 2014 Premiums
11% 11% U.S. Trad
U.S.
38% USFS 16%
15% APAC
Canada
55% EMEA
11% EMEA
Canada
Asia 18% 25%
RGA is a leader; in reputation, size, market presence, innovation, and client satisfaction
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Key Points
“RGA is a major global competitor
Significant presence in all key markets
Leveraging capabilities and expertise across the global platform
“Growth opportunities still abundant
Complex and dynamic regulatory and macroeconomic environment for clients
RGA offers a full solution set to clients
RGA is a unique company
Unique culture client centric, innovative, focused expertise
Large mortality block has strategic and embedded value (EV)
Solid organic growth + excess capital deployment
Flexibility to put “marginal capitalto use in areas with highest returns
RGA is a unique investment
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RGA is a Major Global Competitor
One of the top-tier reinsurers that dominate the global landscape
Established in 1973, emerged as a leader in the early expansion period of the industry (1985-2000)
International expansion over 20 years now a well established, seasoned operation
RGA is now leveraging scale, capabilities, and expertise across its global platform
Flexibility to put marginal capital and emphasis in areas with the best opportunities for growth and highest returns
RGA is well-positioned in key markets
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Top 10 Global Life and Health Reinsurers
Ranked by 2014 Net Earned Premiums
($ Millions as of December 31, 2014)
Net Earned Rank Reinsurer Premiums
1 Munich Re1 12,707
2 Swiss Reinsurance Company 11,265
3 Reinsurance Group of America 2 8,669
4 SCOR Global Life Re 7,529
5 Hanove r Re 7,130
6 London Re4 3,862
7 General Re3 3,161
8 China Life Re4 2,524
9 Partner Re 1,222
10 PacificLife4 896
1Does not include Munich Health
2Net premiums
3Does not include BHRG results
4 Due to unavailability of 2013 data, we have used 2012 results
5Gross written premiums
Sources: Annual filings, A. M. Best insurance reports
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Estimated Market Size and Shares Individual and Group
Contestable Cessions to June 30, 2013
Tier 1 Reinsurers
Includes RGA
Defined by:
§ Global servicing capacity§ Ability to lead at global accounts§ Proposition breadth
Tier 2 Reinsurers
Defined by:
§ Nearly global, multi-regional
§ Ability to service complex buyers
Tier 3 Reinsurers
Defined by:
§ Relative size§ Narrower proposition§ Limited coverage
Tier 1 reinsurers account for 60% of contestable cessions for individual business within our sample, with broadly equal shares. The “Global Sixaccount for ~85% of global contestable individual new cessions, and nearly 80% of total contestable group cessions. Tier 2 competitors saw a lift in retail share.
Anticipated market share by reinsurer tier was derived from contestable cessions ceded by insurers within the sample.
Source: NMG Consulting, Life & Health Reinsurance Programme 2011-12, Global Overview. 8
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Clients face a complex and dynamic regulatory and macro-economic environment
RGA “s robust “solution sethelps serve clients holistically
RGA “s Global Financial Solutions (GFS) unit is a distinct growth driver, and a complementary part of the solution set
Select opportunities in mature markets through product expansion (LTC, Group) and deeper client relationships
Developing markets have growing populations and protection needs, low reinsurance penetration, demand for product development
Emerging opportunities: longevity, alternative distribution support
In the right places, with the necessary skills
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ATruly Global Competitor
Substantial presence in markets where our multinational clients have significant operations
Canada
Ireland
United Kingdom
Netherlands
Poland
Germany
France
Italy
United States
Turkey
China
Japan
South Korea
Spain
Taiwan
Hong Kong
United Arab Emirates
India
Singapore
Malaysia
Bermuda
Australia
New Zealand
Barbados
Mexico
SouthAfrica
RGA is a global leader serving multinational and domestic clients in more than 60 countries
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Expanding Global Presence
Non-U.S. and Latin America Premiums as a % of RGA
50%
45% 45% 45% 45% 45% 42% 42% 43% 42% 40% 39% 37% 10% 10% 11% 12% 11% 12% 12% 11% 35% 34% 32% 10% 9% 30% 28% 8% 8% 25% 19% 18% 18% 18%
9% 18%
12% 14% 15% 19% 18% 18% 20% 10% 15% 8% 10%
11% 14% 14% 14% 14% 14% 13% 15% 15% 15% 16% 13% 13% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Europe, Middle East & Africa Asia Pacific Canada
Note: Figures exclude Corporate segment.
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Global Financial Solutions (GFS)
For clients, GFS helps manage financial risks and capital
Financial reinsurance, asset intensive, and longevity
Complex structured transactions that consider local regulator, tax, issues
“RGA has a 20+ year track record in the business
A key part of RGA“s solution set, well integrated into the global platform; demand is strong worldwide
For RGA GFS , delivers strong returns, high-quality earnings
Asset Intensive business is mostly closed blocks, well matched
Capital efficient, low incremental capital needed
Uncorrelated with Mortality/Morbidity lines
Longevity is a significant market opportunity
Life reinsurers have a unique position given their in-force, data, expertise
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Asia “A Significant Opportunity
Mature markets such as Japan have low reinsurance penetration
Developing markets have favorable demographics, emerging insurance needs
High net worth demand also increasingly important
Competition known global players
RGA has a leading market share across the region
2014 premiums were up 6 ( %) terms 11% in constant currency , helped by acceleration in Japan and Korea
Margins and returns are attractive
RGA has a leading franchise, strong reputation, established footprint I Asia
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EMEA More Transactional, But Vibrant
§ Premiums up 13% in 2014 (10% in constant currency), reflecting increases in both biometric and longevity transactions
§ GFS transactions are driving premiums in advance of Solvency II
§ Biometric risk opportunities are situational in Continental Europe
§ Continued support of large multi-national clients is important
§ U.K. protection market has stabilized, is producing solid profits, but remains competitive
§ UK Longevity market is very active, RGA is a recognized player
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RGA is a Unique Company
The only pure-play, publicly traded life/health reinsurer
High client satisfaction, value-added services (facultative & automated underwriting)
Deep and experienced management team
Entrepreneurial, innovative, collaborative culture
Technology -driven solutions, leading edge actuarial/medical research
Large mortality block is a valuable asset intrinsically (embedded value) and strategically (hedge to client longevity exposure)
Pure-play, global risk transfer leader
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NMG Consulting Studies, Business Capability Index 2013
Average: 67.8 (2012); 69.4 (2013)
D E
B A
C
As at December 31, 2013 RGA was again the top-rated reinsurer on BCI globally. The average BCI rating lifted by 1.5 points (significant given the size of the respondent sample) .
Two competitors now have a BCI rating above 70 points.
65 70 75
[2013: 1162 (862)]
Note: Figuresin[ ] show no.of respondents andno.of insurers in(), respectively. 16
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Experienced Executive Management Team
Years Experience
Name Postion In Industry(1) With RGA(2) A. Greig Woodring President, Chief Executive Officer, and Director 38 35
Jack B. Lay Sr. EVP and Chief Financial Officer 23 20 Donna H. Kinnaird Sr. EVP and Chief Operating Officer 30 2 Anna Manning Sr. EVP, Global Structured Solutions 32 7 Alain P. Neemeh Sr. EVP, Global Life and Health Markets 17 17 Paul A. Schuster Sr. EVP, Head of Europe, Middle East & Africa 37 23 Scott D. Cochran EVP, Global Acquistions 19 9 Brendan J. Galligan EVP, Alternative Distribution 35 23 Todd C. Larson EVP, Global Chief Risk Officer 20 19 John P. Laughlin EVP, Global Financial Solutions 31 19 Robert M. Musen EVP, Chief of Staff 36 14 Allan O’Bryant EVP, Head of Asia Markets & TOM 26 4 Paul Nitsou EVP, Global Accounts 29 18 Mark Showers EVP, Chief Information Officer 5 5 Gay Burns EVP, Chief Human Resources Officer 21 3
(1) Includes experience in life insurance and life reinsurance industries
(2) Includes experience with RGA’s predecessor, the reinsurance division of General American Life Insurance Company
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Timely Topics
Q4 and 2014 results were strong
Diversity of profits by geography and product
Balanced capital deployment and return of excess to shareholders
Organic premium growth of 7% (in constant currency)
Organic growth andnew business activity is strong
Asia “flowbusiness remains vibrant
EMEA growth is more “transactional”, in advance of Solvency II
Global Financial Solutions (GFS) has strong momentum across products/regions
RGA“s recent global acquisition and capital management activity
Recent in-force blocks meet return expectations, are within areas of expertise
Excess capital position at year-end 2014 rose to $1.2 billion from $600 mil. at Q3
Embedded value and retrocession transactions increase capital flexibility and efficiency
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Timely Topics
Competitive dynamics
U.S. Traditional market competitive but rational
Canada cession rates holding, competition is organized
EMEA strong transactional activity
Asia flows strong, margins attractive
Macro challenges likely to be more pervasive in 2015
Low interest rates likely to further pressure portfolio yields
Variable income, including bond & mortgage prepayments, are unlikely to match the recent run-rate
Weak foreign currencies are expected to be a negative influence
Alternative capital “not expected to be a significant threat
Australia “is developing in line
“RGA is working to improve financial results, force change in industry, prepare for opportunities
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Attractive EPS Growth, Financial Returns
Core North American business provides a solid base of predictable earnings, moderate growth, excess capital generation
Higher growth areas, Asia, GFS, EMEA, collectively provide organic growth of 10%
RGA—solid organic growth, stable gross margins, excess capital deployment
EPS growth 2009-2014 was 9.3%
Headwinds (interest rates, FX, Australia) have had a negative effect on EPS and ROE
Excess capital generation provides a boost to returns through deployment or return of capital
ROE expected to be 11%—12% over the intermediate term
Above-average return potential
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Strong Revenue Growth
($ Millions)
Key Messages
12,000
§ Consistent growth
§ Some headwinds 10,000 remain from lower interest rates
8,000
§ Total revenues reflect strong growth in Global
Financial Solutions 6,000
4,000
2,000
“
2010 2011 2012 2013 2014
Premiums Other Revenues
Reflects strong organic growth.
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Consolidated Operating Income per Share1
Key Messages
§ Long track record of producing strong earnings§ 2013 reflects charge in Australia§ Intermediate projected growth rate of 5%—8% assumes continued low interest rate environment
$10.00 $9.12 $9.00
$8.00 $7.48**
$7.48 2
$6.96 $7.00 $6.55 harge $6.23 C $6.00 AUS
2Q
$5.00 $4.95 $4.00
$3.00 $2.00 $1.00
$0.00
2010 2011 2012 2013 2014
* 4-year CAGR 8.4% assuming normalized EPS (2014 $8.30; 2010 $5.88)
** Excludes Australia reserve charge
1Please refer to “Reconciliations of Non-GAAP Measuresat the end of this presentation. 2Excludes $184 million after-tax charge in Australia (2Q13) .
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Operating Return on Equity 1
Key Messages
14%
§ Strong, stable operating 12% ROE trend except 2013§ 2013 reflects charge in
10%
Australia
§ Intermediate target range 8% 11% -12%§ Potential tailwinds 6%§ GFS transactions
4%
§ International growth
§ Improving portfolio 2% yields
0%
2009 2010 2011 2012 2013 2014
1Please refer to “Reconciliations of Non-GAAP Measuresat the end of this presentation. 23
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RGA “A Long Track Record of Success
Book Value Per Share (ex-AOCI) 1
$90 $78.03 $80 $69.66 $70 $64.95 $60 $57.25 $52.80 $50 $41.01 $45.86 $40.36 $40 $36.59 $34.06 $31.08 $30 $20 $10 $0 4Q04 4Q05 4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14
1Book value excludes other comprehensive income. Periods prior to 4Q06 not restated for 2012 DAC accounting change. Please refer to “Reconciliations of Non-GAAP Measuresat the end of this presentation.
Continuous increase in value
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Book Value Growth Ranking Five Years
Book Value Per Share (ex-AOCI) Total Return Growth 1
16%
AFL 14%
12% GA R
PL
10% AIZ
CNO SFG
8% SYA TMK UNM LNC
PRU
6% PFG MET
4% 2% 0%
1Cagr growth of book value plus dividends. 12/31/09 12/31/14
Source: SNL
Please refer to “Reconciliations of Non-GAAP Measuresat the end of this presentation
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Total Payout Ratio RGA vs. Life Insurance Industry
80.0%
70.0%
60.0%
RGA $320M 50.0% return of capital would 40.0% match projected 30.0% industry ratio
20.0%
10.0%
0.0%
2010 2011 2012 2013* 2014
Industry Average RGA
Excess capital generation is more prominent
Source: SNL
1Excludes $184 million Australia charge in 2Q13; based upon “normalizedEPS of $8.20 in 2014 26
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Summary
“RGA is well-positioned in key global markets, and we see strong overall demand for our products and services
RGA is leveraging its unique combination of knowledge, skills, and full solution set across its global platform
RGA can be opportunistic and flexible in shifting marginal capital and emphasis to areas of greatest demand and highest returns
RGA is intent on delivering an attractive, balanced combination of growth, profitability, and shareholder returns
RGA is a unique investment
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Appendix Reconciliation of Non-GAAP Measures
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Financial Performance
Reconciliation of Pre-Tax Income to Pre-Tax Operating Income ($ in millions)
U.S. & LATIN AMERICA TRADITIONAL OPERATIONS
2010 2011 2012 2013 2014
GAAP Pre-Tax Income—Cont Ops 380.8 367.3 374.4 377.6 351.6 Realized Capital (Gains) / Losses (25.1) (41.8) 0.3 (3.1) (4.5) Change in MV of Embedded Derivatives(1) - (2.4) 2.0 (1.9) 3.1
Pre-tax Operating Income 355.7 323.1 376.7 372.6 350.2
U.S. & LATIN AMERICA ASSET -INTENSIVE
2010 2011 2012 2013 2014
GAAP Pre-Tax Income—Cont Ops 130.9 35.3 235.6 200.3 250.7 Realized Capital (Gains) / Losses (1) (34.9) (42.3) (80.8) 131.0 61.0 Change in MV of Embedded Derivatives(1) (30.7) 77.1 (45.7) (165.2) (112.7) Pre-tax Operating Income 65.3 70.1 109.1 166.1 199.0
U.S. & LATIN AMERICA FINANCIAL REINSURANCE
2010 2011 2012 2013 2014
GAAPPre-Tax Income -ContOps 17.5 26.3 32.7 45.3 52.3 Realized Capital (Gains) / Losses 0.1 0.1 0.2 0.4 0.1 Pre-tax Operating Income 17.6 26.4 32.9 45.7 52.4
TOTAL US & LATIN AMERICA OPERATIONS SEGMENT
2010 2011 2012 2013 2014
GAAP Pre-Tax Income—Cont Ops 529.2 428.9 642.7 623.2 654.6 Realized Capital (Gains) / Losses(1) (59.9) (84.0) (80.3) 128.3 56.6 Change in MV of Embedded Derivatives(1) (30.7) 74.7 (43.7) (167.1) (109.6)
Pre-tax Operating Income 438.6 419.6 518.7 584.4 601.6
(1) Net of DAC offset
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Financial Performance
Reconciliation of Pre-Tax Income to Pre-Tax Operating Income ($ in millions)
CANADA OPERATIONS
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 121.7 165.0 187.0 164.3 101.7 Realized Capital (Gains) / Losses (8.7) (21.8) (27.7) (16.6) (3.2) Pre-tax Operating Income 113.0 143.2 159.3 147.7 98.5
EUROPE, MIDDLE EAST & AFRICA OPERATIONS
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 62.0 69.3 61.0 74.6 161.6 Realized Capital (Gains) / Losses (1.9) (5.9) (11.1) (3.5) (24.7) Non-investment derivatives (0.5) Pre-tax Operating Income 60.1 63.4 49.9 71.1 136.4
ASIA-PACIFIC OPERATIONS
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 80.9 52.7 52.0 (226.6) 102.3 Realized Capital (Gains) / Losses (5.4) (3.2) (8.4) 8.3 4.4 Pre-tax Operating Income 75.5 49.5 43.6 (218.3) 106.7
CORPORATE & OTHER SEGMENT
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 12.4 47.7 (23.5) (0.2) (11.7) Realized Capital (Gains) / Losses (0.2) 13.4 (2.0) 6.4 10.3 Gain on Debt Repurchase - (65.6)—(46.5) -Loss on Retirement of PIERS - 4.4 — -Non-investment derivatives — — 0.1
Pre-tax Operating Income 12.2 (0.1) (25.5) (40.3) (1.3)
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Financial Performance
GAAP / Operating Income and EPS Reconciliations ($ in millions)
RGA CONSOLIDATED
2010 2011 2012 2013 2014
GAAP Pre-Tax Income—Cont Ops 806.2 763.6 919.2 635.3 1,008.5 Realized Capital (Gains) / Losses(1) (76.1) (101.5) (129.5) 122.9 43.4 Change in MV of Embedded Derivatives(1) (30.7) 74.7 (43.7) (167.1) (109.6) Gain on Debt Repurchase - (65.6)—(46.5) -Loss on Retirement of PIERS - 4.4 — -Non-Investment Derivatives — — (0.4)
Pre-tax Operating Income 699.4 675.6 746.0 544.6 941.9
2010 2011 2012 2013 2014
GAAP After-Tax Income—Cont Ops 535.7 546.0 631.9 418.8 684.0 Realized Capital (Gains) / Losses(1) (50.3) (69.2) (87.1) 78.4 25.5 Change in MV of Embedded Derivatives(1) (20.0) 48.6 (28.4) (108.6) (71.2) Gain on Debt Repurchase - (42.6) (30.2) -Loss on Retirement of PIERS - 2.8 -Non-Investment Derivatives (0.3) After-tax Operating Income 465.4 485.6 516.4 358.4 638.0
(1) Net of DAC offset
CONSOLIDATED EPS RECONCILIATION
Per Diluted Share Basis
2010 2011 2012 2013 2014
GAAP Net Income $ 7.17 $ 7.37 $ 8.52 $ 5.78 $ 9.78
Realized Capital (Gains) / Losses (0.67) (0.94) (1.18) 1.09 0.36 Change in MV of Embedded Derivatives (0.27) 0.65 (0.38) (1.50) (1.02) Gain on Debt Repurchase - (0.57)—(0.42) -Loss on Retirement of PIERS - 0.04 -Non-Investment Derivatives -Operating EPS from Cont. Operations $ 6.23 $ 6.55 $ 6.96 $ 4.95 $ 9.12
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Financial Performance
StockholdersEquity Reconciliation ($ in millions)
2010 2011 2012 2013 2014
GAAP Stockholders’ Equity $4,765.4 $ 5,818.7 $ 6,910.2 $ 5,935.5 $ 7,051.3 FAS 115 Equity Adjustment 651.4 1,419.3 1,877.6 820.2 1,624.8
Foreign Currency Adjustment 255.3 229.8 267.5 207.1 81.8
Unrealized Pension (14.6) (31.0) (36.2) (21.7) (21.7) Equity Excluding OCI $ 3,873.3 $ 4,200.6 $ 4,801.3 $ 4,929.9 $ 5,366.4
GAAP Stockholders’ Average Equity $ 4,254.6 $ 5,140.1 $ 6,328.0 $ 6,308.9 $ 6,521.3
FAS 115 Average Equity Adjustment 462.4 914.6 1,636.9 1,290.2 1,282.3 Foreign Currency Adjustment 218.1 249.1 252.3 216.8 158.5
Unrealized Pension (15.7) (17.4) (31.2) (32.4) (21.1) Average Equity Excluding OCI $ 3,589.8 $ 3,993.8 $ 4,470.0 $ 4,834.3 $ 5,101.6
Operating ROE—GAAP Stockholders’ Equity 11% 9% 8% 6% 10% Operating ROE—Excluding OCI 13% 12% 12% 7% 13%
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Financial Performance
Pre-Tax Operating Income ($ in millions)
Book Value per Share Reconciliation
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 1993 Book value per share $ 102.53 $ 83.87 $ 93.47 $ 79.31 $ 64.96 $49.87 $ 33.54 $48.70 $43.64 $41.38 $ 36.50 $ 31.33 $24.72 $20.30 $7.15 Less: effect of FAS 115 23.63 11.59 25.40 19.35 8.88 1.43 (7.62) 5.05 5.46 5.92 3.92 2.74 2.08 (0.01) (0.08) Less: effect of CTA 1.19 2.93 3.62 3.13 3.48 2.80 0.35 3.43 1.77 1.40 1.50 0.86 0.01 (0.12) 0.01 Less: effect of Pension Benefit (0.32) (0.31) (0.50) (0.42) (0.20) (0.22) (0.20) (0.14) (0.18) Book value per share excluding OCI $ 78.03 $ 69.66 $ 64.95 $ 57.25 $ 52.80 $45.86 $ 41.01 $40.36 $36.59 $34.06 $ 31.08 $ 27.73 $22.63 $20.43 $7.22
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Reinsurance Group of America, Incorporated