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): January 30, 2017
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):
r | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
r | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
r | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
r | 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 January 30, 2017, Reinsurance Group of America, Incorporated issued (1) a press release (the "Press Release") announcing its earnings for the three-month period ended December 31, 2016, and providing certain additional information, a copy of which is furnished with this report as Exhibit 99.1, and (2) a quarterly financial supplement (the "Quarterly Financial Supplement") for the quarter ended December 31, 2016, a copy of which is attached hereto as Exhibit 99.2. The Press Release also notes that a conference call will be held on January 31, 2017 to discuss the financial and operating results for the three-month period ended December 31, 2016. The information set forth in this Current Report on Form 8-K, including the Press Release and Quarterly Financial Supplement, is being furnished and shall not be deemed to be "filed", as described in Instruction B.2 of Form 8-K.
Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
Exhibit No. | Exhibit | |
99.1 | Press Release of Reinsurance Group of America, Incorporated dated January 30, 2017 | |
99.2 | Quarterly Financial Supplement for the quarter ended December 31, 2016 | |
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: January 30, 2017 | By: | /s/ Todd C. Larson | ||||
Todd C. Larson | ||||||
Senior Executive Vice President and Chief Financial Officer | ||||||
EXHIBIT INDEX
Exhibit Number | Description | |
99.1 | Press Release dated January 30, 2017 | |
99.2 | Quarterly Financial Supplement for the quarter ended December 31, 2016 | |
Exhibit 99.1
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS FOURTH-QUARTER RESULTS
• | Earnings per diluted share: $2.92 from net income, $2.63 from operating income* |
• | ROE 10 percent and Operating ROE* 11 percent for the full year |
• | Reported net premiums increased 7 percent in the fourth quarter |
ST. LOUIS, January 30, 2017 - Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported fourth-quarter net income of $190.1 million, or $2.92 per diluted share, compared with $163.1 million, or $2.46 per diluted share, in the prior-year quarter. Operating income* totaled $171.3 million, or $2.63 per diluted share, compared with $188.0 million, or $2.84 per diluted share, the year before. Net foreign currency fluctuations had an adverse effect of $0.10 per diluted share on net income, and $0.08 per diluted share on operating income.
Quarterly Results | Year-to-Date Results | |||||||||||||||
($ in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net premiums | $ | 2,493,163 | $ | 2,328,501 | $ | 9,248,871 | $ | 8,570,741 | ||||||||
Net income | 190,149 | 163,127 | 701,443 | 502,166 | ||||||||||||
Net income per diluted share | 2.92 | 2.46 | 10.79 | 7.46 | ||||||||||||
Operating income* | 171,259 | 187,950 | 632,598 | 567,084 | ||||||||||||
Operating income per diluted share* | 2.63 | 2.84 | 9.73 | 8.43 | ||||||||||||
Book value per share | 110.31 | 94.09 | ||||||||||||||
Book value per share, excluding accumulated other comprehensive income (AOCI)* | 92.59 | 83.23 | ||||||||||||||
Total assets | 53,097,879 | 50,383,152 | ||||||||||||||
* | See ‘Use of Non-GAAP Financial Measures’ below |
Full-year 2016 net income totaled $701.4 million, or $10.79 per diluted share, versus $502.2 million, or $7.46 per diluted share, in 2015. Operating income for the full year increased to $632.6 million, or $9.73 per diluted share, from $567.1 million, or $8.43 per diluted share, the year before. Net adverse foreign currency fluctuations reduced 2016 net income by $0.29 per diluted share, and operating income by $0.25 per diluted share. Net premiums increased 8 percent in 2016. Full-year premiums reflected net adverse foreign currency effects of approximately $172.2 million.
For the fourth quarter, consolidated net premiums totaled $2.5 billion, up 7 percent from last year’s fourth quarter. Current-period premiums reflected net adverse foreign currency effects of approximately $35.2 million. Excluding spread-based businesses and the value of associated derivatives, investment income rose 8 percent over year-ago levels, attributable to an increase in average invested assets of approximately 14 percent and strong variable investment income, offset in part by the impact of lower yield on new money and reinvested assets. The average investment yield, excluding spread businesses, was down 27 basis points to 4.69 percent from the fourth quarter of 2015, mainly attributable to a 2015 fourth-quarter
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transaction with investment income retroactive to January 1. The average investment yield was 26 basis points higher than the third-quarter yield due to stronger variable investment income.
The effective tax rate was approximately 36 percent on both pre-tax GAAP income and operating income this quarter, above an expected range of 34 to 35 percent, due to a greater balance of income from jurisdictions with higher tax rates. For the full year, the effective tax rate on pre-tax GAAP income and operating income was approximately 33 percent.
Anna Manning, president and chief executive officer, commented, “This was another good quarter for RGA, and it closed out a very successful year. The fourth-quarter results continued a pattern of good overall momentum and favorable diversification of earnings by geography and product. Most key business segments posted good results, with a notably strong performance for the U.S. Traditional segment. EMEA, Asia Traditional and Canada also performed well, while Australia underperformed. Overall top-line premium growth was fairly strong again up 7 percent, or 9 percent in constant currencies, based primarily upon solid organic growth and modest contributions from in-force transactions.
“For the year, net income per share of $10.79 and operating earnings per share of $9.73 also reflected strong results across most key segments. Our overall strategy and global operating model continued to produce solid returns as we serve our clients with solutions spanning across geographies and product areas. We achieved these strong results despite ongoing macroeconomic headwinds including lower interest rates and weak foreign currencies. In 2016, our return on equity was 10 percent and operating return on equity was 11 percent. Importantly, RGA's balance sheet remains strong.
“We executed a number of in-force and other transactions during the year, but the size of the deals on average was smaller than in recent years. We ended the year with an excess capital position of $1.1 billion and our board approved a new share repurchase authorization of $400 million, replacing the previous authorization. We are well positioned to continue to pursue a balanced approach to capital management in terms of deployment into in-force and other attractive transactions, share repurchases and shareholder dividend increases. Book value per share at year-end 2016 was $110.31 including AOCI, and $92.59 excluding AOCI.
“Looking forward, we remain optimistic about our ability to serve clients, execute on our strategies and deliver attractive financial returns.”
SEGMENT RESULTS
In the fourth quarter, RGA changed the name of its Non-Traditional segments to Financial Solutions. The name change better aligns our external reports with internally used terminology. This name change does not affect any previously reported results for the Financial Solutions segments.
U.S. and Latin America
Traditional
The U.S. and Latin America Traditional segment reported pre-tax net income of $131.5 million, compared with $79.5 million in the fourth quarter of 2015. Pre-tax operating income totaled $129.3 million for the quarter, compared with $79.0 million in last year’s fourth quarter. Results for the current quarter benefited
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from higher variable investment income and modestly favorable claims results in the Individual Mortality business. Results in the year-ago quarter reflected poor experience in the Group business, and unfavorable claims in the Individual Mortality business. For the full year, pre-tax net income increased to $371.1 million from $235.8 million and pre-tax operating income increased to $375.3 million versus $233.5 million in 2015.
Traditional net premiums increased 4 percent from last year’s fourth quarter to $1,430.3 million and 9 percent to $5,249.6 million for the full year.
Financial Solutions
The Asset-Intensive business reported pre-tax net income of $72.3 million compared with $30.9 million last year. Fourth-quarter pre-tax operating income totaled $46.7 million compared with $47.6 million last year. Both periods' operating income reflected favorable investment spreads. Full-year pre-tax net income totaled $224.1 million versus $152.9 million in 2015. Pre-tax operating income totaled $205.0 million for the full year versus $199.6 million in 2015, with both periods benefiting from favorable interest rate spreads.
The Financial Reinsurance business reported pre-tax net income and pre-tax operating income of $14.4 million for the fourth quarter compared with $15.9 million the year before, performing in line with expectations. For the year, pre-tax net income and pre-tax operating income rose to $59.2 million from $55.0 million in the prior year.
Canada
Traditional
The Canada Traditional segment reported pre-tax net income of $37.0 million compared with $44.6 million the year before. Pre-tax operating income totaled $34.8 million compared with $45.1 million in the fourth quarter of 2015. The year-ago quarter was driven by particularly favorable individual mortality claims experience, while the 2016 quarter reflected modestly favorable individual mortality claims. The effect of net foreign currency fluctuations was immaterial to pre-tax net income and pre-tax operating income in the quarter. For the full year, pre-tax net income increased to $134.7 million from $124.2 million in 2015. Pre-tax operating income for the year rose to $125.6 million from $123.8 million the year before. Foreign currency exchange rates adversely affected pre-tax net income by $5.8 million and pre-tax operating income by $6.2 million for the full year.
Reported net premiums increased 20 percent to $241.9 million for the quarter, attributable to solid growth in individual mortality and a one-time amendment in 2016 on a creditor treaty. Net premiums for the full year increased to $928.6 million compared with $838.9 million in 2015. Net foreign currency fluctuations adversely affected net premiums by $33.0 million for the full year.
Financial Solutions
The Canada Financial Solutions business segment, which consists of longevity and fee-based transactions, reported fourth-quarter pre-tax net income and pre-tax operating income of $4.1 million compared with $3.4 million a year ago, reflecting favorable longevity experience. The effect of net foreign currency
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fluctuations was immaterial to pre-tax net income and pre-tax operating income in the quarter. Pre-tax net income and pre-tax operating income totaled $7.9 million for the full year compared with $13.9 million in 2015, as 2015 experience was particularly good. For the full year, foreign currency exchange rates adversely affected pre-tax net income and pre-tax operating income by $0.7 million.
Europe, Middle East and Africa (EMEA)
Traditional
The EMEA Traditional segment reported pre-tax net income and pre-tax operating income of $15.8 million, up from $12.9 million in last year’s fourth quarter. Current-period results included higher premiums and a favorable adjustment associated with improved client reporting, somewhat offset by modestly unfavorable mortality and morbidity experience in the U.K. Last year’s fourth quarter was generally in line with expectations. Net foreign currency fluctuations adversely affected pre-tax net income and pre-tax operating income by $1.0 million. For the full year, pre-tax net income decreased to $30.1 million from $48.4 million in 2015, and pre-tax operating income decreased to $30.1 million from $48.1 million in the prior year. Full-year net foreign currency fluctuations adversely affected pre-tax net income and pre-tax operating income by $1.0 million.
Reported net premiums increased to $301.3 million from $299.9 million in the prior-year period primarily due to the impact of new treaties. Foreign currency exchange rates adversely affected net premiums by $37.4 million. For the full year, net premiums totaled $1,140.1 million, with an adverse effect of $113.1 million from foreign currency fluctuations.
Financial Solutions
The EMEA Financial Solutions business segment includes longevity, asset-intensive and fee-based transactions. Pre-tax net income totaled $41.3 million compared with $28.1 million in the year-ago period. Pre-tax operating income increased to $36.7 million compared with $18.8 million the year before. Current-period results reflected continued favorable experience in both the asset-intensive and
longevity businesses, along with the impact of new business. Net foreign currency fluctuations adversely affected pre-tax net income by $9.3 million and pre-tax operating income by $8.2 million. For the full year, pre-tax net income totaled $138.0 million compared with $108.4 million in 2015. Pre-tax operating income for the year was $122.4 million, up from $98.1 million the year before. Net foreign currency fluctuations adversely affected full-year pre-tax net income by $19.4 million and pre-tax operating income by $16.7 million.
Asia Pacific
Traditional
The Asia Pacific Traditional segment reported pre-tax net income of $18.5 million, down from $37.4 million in the prior-year period. Pre-tax operating income totaled $18.5 million compared with a very strong $35.7 million a year ago. Underwriting experience was favorable across Asia with particularly strong results in Hong Kong and Japan, but was offset by high claims on individual disability business in Australia. Net foreign currency fluctuations had a favorable effect of $1.1 million on pre-tax net income
and pre-tax operating income. For the full year, pre-tax net income and pre-tax operating income totaled
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$113.9 million compared with $105.7 million in 2015. The effect of net foreign currency fluctuations was immaterial to pre-tax net income and pre-tax operating income for the full year.
Reported net premiums rose to $448.3 million from $388.7 million in the prior-year period, reflecting solid growth in Asia. Foreign currency exchange rates had a favorable effect of $12.6 million on net premiums. For the year, net premiums totaled $1,681.5 million, up 8 percent over the prior year. Net foreign currency fluctuations had a favorable effect of $3.3 million on net premiums for the full year.
Financial Solutions
The Asia Pacific Financial Solutions business segment includes asset-intensive and fee-based transactions. Pre-tax net losses totaled $12.0 million compared with pre-tax net income of $5.5 million last year. Pre-tax operating losses totaled $6.1 million compared with a pre-tax operating income of $5.4 million in the prior-year quarter. The losses in the current period are primarily due to unfavorable results on one treaty that continues to run off. The effect of net foreign currency fluctuations was immaterial to pre-tax net income and pre-tax operating income in the quarter. For the full year, pre-tax net income totaled $4.1 million compared with $19.6 million in 2015. Pre-tax operating losses were $2.4 million for the year, down from pre-tax operating income of $22.5 million a year ago. Foreign currency exchange rates had a favorable effect of $1.5 million on pre-tax net income and $0.8 million on pre-tax operating income for the full year.
Corporate and Other
The Corporate and Other segment’s pre-tax net losses totaled $27.4 million compared with a pre-tax net loss of $51.5 million the year before. Pre-tax operating losses were $26.3 million, versus the year-ago pre-tax loss of $16.7 million. Current-period results reflected higher compensation, including annual incentive accrual adjustments. For the full year, pre-tax net losses totaled $39.2 million compared with $119.1 million in 2015. Pre-tax operating losses were $88.4 million versus $52.0 million in the prior year.
Company Guidance
On an annual basis, the Company provides financial guidance based upon the intermediate term rather than giving a range of annual earnings per share for an upcoming year. This better reflects the long-term nature of the business and the difficulty in predicting the timing of shorter-term or periodic events such as block transactions. The Company accepts risks over very long periods of time, up to 30 years or longer in some cases. While more predictable over longer-term horizons, RGA’s business is subject to inherent short-term volatility, primarily due to mortality and morbidity experience.
Over the intermediate term, the Company continues to target growth in operating income per share in the 5 to 8 percent range, and operating return on equity of 10 to 12 percent. It is presumed that there are no significant changes in the investment environment from current levels, and the Company will deploy $300 to $400 million of excess capital, on average, annually. These guidance ranges are based upon “normalized” results. Both the operating EPS target range and the ROE ranges are unchanged from a year ago.
Todd C. Larson, chief financial officer, commented, “We believe that our EPS range is appropriate, and we expect the combination of organic growth, execution of block transactions and efficient capital
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management to allow us to reach our financial targets. We have faced significant macro headwinds in terms of weak foreign currencies and sustained low interest rates over the past several years, and we assume that there will be some level of ongoing headwinds for the foreseeable future. Nevertheless, we expect that we can overcome these challenges and achieve our goals.”
Stock Repurchase Authorization
The board of directors authorized a share repurchase program for up to $400 million of the company's outstanding common stock, replacing the previous share repurchase authorization. This new authorization is effective immediately and does not have an expiration date. Repurchases would be made in accordance with applicable securities laws and would be made through market transactions, block trades, privately negotiated transactions or other means, or a combination of these methods, with the timing and number of shares repurchased dependent on a variety of factors, including share price, corporate and regulatory requirements, and market and business conditions. Repurchases may be commenced or suspended from time to time without prior notice.
Dividend Declaration
The board of directors declared a regular quarterly dividend of $0.41, payable March 2 to shareholders of record as of February 9.
Earnings Conference Call
A conference call to discuss fourth-quarter results will begin at 11 a.m. Eastern Time on Tuesday, January 31. Interested parties may access the call by dialing 877-879-6174 (domestic) or 719-325-4849 (international). The access code is 1763380. A live audio webcast of the conference call will be available
on the Company’s Investor Relations website 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 also will be available through Wednesday, February 8 at 888-203-1112 (domestic) or 719-457-0820 (international), access code 1763380.
The Company has posted to its website a Quarterly Financial Supplement that includes financial information for all segments as well as information on its investment portfolio. Additionally, the Company posts periodic reports, press releases and other useful information on its Investor Relations website.
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 substantially all of 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,
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the cumulative effect of any accounting changes, and other items that 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
website at www.rgare.com in the “Earnings” section.
Book value per share excluding the 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.
Operating income per diluted share is a non-GAAP financial measure calculated as operating income divided by weighted average diluted shares outstanding. Operating return on equity is a non-GAAP financial measure calculated as operating income divided by average shareholders’ equity excluding AOCI.
About RGA
Reinsurance Group of America, Incorporated is among the largest global providers of life reinsurance, with operations in Australia, Barbados, Bermuda, Brazil, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Singapore, South Africa, South Korea, Spain, Taiwan, the United Arab Emirates, the United Kingdom and the United States. Worldwide, RGA has assumed approximately $3.1 trillion of life reinsurance in force, and total assets of $53.1 billion.
Cautionary Note 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, ratios, future financial performance and growth potential of Reinsurance Group of America, Incorporated and its subsidiaries (which we refer to in the previous 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 the Company’s liquidity, access to capital and cost
of capital, (2) the impairment of other financial institutions and its effect on the Company’s business,
(3) requirements to post collateral or make payments due to declines in market value of assets subject to the Company’s collateral arrangements, (4) the fact that the determination of allowances and impairments
taken on the Company’s investments is highly subjective, (5) adverse changes in mortality, morbidity, lapsation or claims experience, (6) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (7)
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inadequate risk analysis and underwriting, (8) general economic conditions or a prolonged economic
downturn affecting the demand for insurance and reinsurance in the Company’s 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 the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities, that in turn could affect regulatory capital, (11) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (12) risks inherent in the Company’s 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 the Company operates, including ongoing uncertainties regarding the amount of United States sovereign debt and the credit ratings thereof, (17) competitive factors and competitors’ responses to the Company’s initiatives, (18) the success of the Company’s clients, (19) successful execution of the Company’s entry into new markets, (20) successful development and introduction of new products and distribution opportunities, (21) the Company’s ability to successfully integrate acquired blocks of business and entities, (22) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (23) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes 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 the Company or its clients do business, (25) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or
sensitive data stored on such systems, (26) changes in laws, regulations, and accounting standards
applicable to the Company, its subsidiaries, or its business, (27) the effect of the Company’s status as an
insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, and (28) other risks and uncertainties described in this document and in the Company’s 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 see Item 1A - “Risk Factors” in the 2015 Annual Report, as updated by Part II, Item 1A - “Risk Factors” in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2016.
Investor Contact
Jeff Hopson
Senior Vice President - Investor Relations
(636) 736-7000
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated Net Income to Operating Income
(Dollars in thousands)
(Unaudited) | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 190,149 | $ | 163,127 | $ | 701,443 | $ | 502,166 | |||||||
Reconciliation to operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | 66,640 | 40,203 | (21,322 | ) | 30,020 | ||||||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (5,355 | ) | 161 | (18,330 | ) | (10,640 | ) | ||||||||
Embedded derivatives: | |||||||||||||||
Included in investment related (gains) losses, net | (72,343 | ) | (6,004 | ) | (40,302 | ) | 85,789 | ||||||||
Included in interest credited | (25,977 | ) | (917 | ) | (18,289 | ) | (8,178 | ) | |||||||
DAC offset, net | 17,957 | (8,542 | ) | 30,787 | (31,996 | ) | |||||||||
Investment income on unit-linked variable annuities | (2,741 | ) | — | (8,535 | ) | — | |||||||||
Interest credited on unit-linked variable annuities | 2,741 | — | 8,535 | — | |||||||||||
Non-investment derivatives | 188 | (78 | ) | (1,389 | ) | (77 | ) | ||||||||
Operating income | $ | 171,259 | $ | 187,950 | $ | 632,598 | $ | 567,084 | |||||||
Reconciliation of Consolidated Income before Income Taxes to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income before income taxes | $ | 295,543 | $ | 206,743 | $ | 1,043,946 | $ | 744,795 | |||||||
Reconciliation to pre-tax operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | 103,944 | 64,034 | (22,082 | ) | 49,586 | ||||||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (8,238 | ) | 246 | (28,200 | ) | (16,370 | ) | ||||||||
Embedded derivatives: | |||||||||||||||
Included in investment related (gains) losses, net | (111,297 | ) | (9,236 | ) | (62,003 | ) | 131,984 | ||||||||
Included in interest credited | (39,964 | ) | (1,412 | ) | (28,137 | ) | (12,582 | ) | |||||||
DAC offset, net | 27,625 | (13,142 | ) | 47,364 | (49,225 | ) | |||||||||
Investment income on unit-linked variable annuities | (4,217 | ) | — | (13,131 | ) | — | |||||||||
Interest credited on unit-linked variable annuities | 4,217 | — | 13,131 | — | |||||||||||
Non-investment derivatives | 289 | (120 | ) | (2,137 | ) | (118 | ) | ||||||||
Pre-tax operating income | $ | 267,902 | $ | 247,113 | $ | 948,751 | $ | 848,070 | |||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) | Three Months Ended December 31, 2016 | ||||||||||||||
Pre-tax net income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 131,492 | $ | (336 | ) | $ | (1,811 | ) | $ | 129,345 | |||||
Financial Solutions: | |||||||||||||||
Asset Intensive | 72,261 | 35,800 | (1) | (61,363 | ) | (2) | 46,698 | ||||||||
Financial Reinsurance | 14,447 | — | — | 14,447 | |||||||||||
Total U.S. and Latin America | 218,200 | 35,464 | (63,174 | ) | 190,490 | ||||||||||
Canada Traditional | 37,026 | (2,272 | ) | — | 34,754 | ||||||||||
Canada Financial Solutions | 4,065 | — | — | 4,065 | |||||||||||
Total Canada | 41,091 | (2,272 | ) | — | 38,819 | ||||||||||
EMEA Traditional | 15,826 | — | — | 15,826 | |||||||||||
EMEA Financial Solutions | 41,328 | (4,600 | ) | — | 36,728 | ||||||||||
Total EMEA | 57,154 | (4,600 | ) | — | 52,554 | ||||||||||
Asia Pacific Traditional | 18,464 | — | — | 18,464 | |||||||||||
Asia Pacific Financial Solutions | (11,966 | ) | 5,846 | — | (6,120 | ) | |||||||||
Total Asia Pacific | 6,498 | 5,846 | — | 12,344 | |||||||||||
Corporate and Other | (27,400 | ) | 1,095 | — | (26,305 | ) | |||||||||
Consolidated | $ | 295,543 | $ | 35,533 | $ | (63,174 | ) | $ | 267,902 | ||||||
(1) | Asset Intensive is net of $(60,462) DAC offset. |
(2) | Asset Intensive is net of $88,087 DAC offset. |
(Unaudited) | Three Months Ended December 31, 2015 | ||||||||||||||
Pre-tax net income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 79,483 | $ | 203 | $ | (696 | ) | $ | 78,990 | ||||||
Financial Solutions: | |||||||||||||||
Asset Intensive | 30,874 | 124,163 | (1) | (107,441 | ) | (2) | 47,596 | ||||||||
Financial Reinsurance | 15,936 | — | — | 15,936 | |||||||||||
Total U.S. and Latin America | 126,293 | 124,366 | (108,137 | ) | 142,522 | ||||||||||
Canada Traditional | 44,640 | 446 | — | 45,086 | |||||||||||
Canada Financial Solutions | 3,420 | — | — | 3,420 | |||||||||||
Total Canada | 48,060 | 446 | — | 48,506 | |||||||||||
EMEA Traditional | 12,859 | — | — | 12,859 | |||||||||||
EMEA Financial Solutions | 28,145 | (9,366 | ) | — | 18,779 | ||||||||||
Total EMEA | 41,004 | (9,366 | ) | — | 31,638 | ||||||||||
Asia Pacific Traditional | 37,415 | (1,706 | ) | — | 35,709 | ||||||||||
Asia Pacific Financial Solutions | 5,467 | (17 | ) | — | 5,450 | ||||||||||
Total Asia Pacific | 42,882 | (1,723 | ) | — | 41,159 | ||||||||||
Corporate and Other | (51,496 | ) | 34,784 | — | (16,712 | ) | |||||||||
Consolidated | $ | 206,743 | $ | 148,507 | $ | (108,137 | ) | $ | 247,113 | ||||||
(1) | Asset Intensive is net of $84,347 DAC offset. |
(2) | Asset Intensive is net of $(97,489) DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) | Twelve Months Ended December 31, 2016 | ||||||||||||||
Pre-tax net income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 371,101 | $ | (339 | ) | $ | 4,568 | $ | 375,330 | ||||||
Financial Solutions: | |||||||||||||||
Asset Intensive | 224,142 | (52,840 | ) | (1) | 33,680 | (2) | 204,982 | ||||||||
Financial Reinsurance | 59,238 | — | — | 59,238 | |||||||||||
Total U.S. and Latin America | 654,481 | (53,179 | ) | 38,248 | 639,550 | ||||||||||
Canada Traditional | 134,705 | (9,056 | ) | — | 125,649 | ||||||||||
Canada Financial Solutions | 7,945 | — | — | 7,945 | |||||||||||
Total Canada | 142,650 | (9,056 | ) | — | 133,594 | ||||||||||
EMEA Traditional | 30,059 | (5 | ) | — | 30,054 | ||||||||||
EMEA Financial Solutions | 138,007 | (15,595 | ) | — | 122,412 | ||||||||||
Total EMEA | 168,066 | (15,600 | ) | — | 152,466 | ||||||||||
Asia Pacific Traditional | 113,928 | (16 | ) | — | 113,912 | ||||||||||
Asia Pacific Financial Solutions | 4,063 | (6,473 | ) | — | (2,410 | ) | |||||||||
Total Asia Pacific | 117,991 | (6,489 | ) | — | 111,502 | ||||||||||
Corporate and Other | (39,242 | ) | (49,119 | ) | — | (88,361 | ) | ||||||||
Consolidated | $ | 1,043,946 | $ | (133,443 | ) | $ | 38,248 | $ | 948,751 | ||||||
(1) | Asset Intensive is net of $(81,024) DAC offset. |
(2) | Asset Intensive is net of $128,388 DAC offset. |
(Unaudited) | Twelve Months Ended December 31, 2015 | ||||||||||||||
Pre-tax net income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 235,771 | $ | 201 | $ | (2,507 | ) | $ | 233,465 | ||||||
Financial Solutions: | |||||||||||||||
Asset Intensive | 152,946 | (37,872 | ) | (1) | 84,488 | (2) | 199,562 | ||||||||
Financial Reinsurance | 55,017 | — | — | 55,017 | |||||||||||
Total U.S. and Latin America | 443,734 | (37,671 | ) | 81,981 | 488,044 | ||||||||||
Canada Traditional | 124,175 | (364 | ) | — | 123,811 | ||||||||||
Canada Financial Solutions | 13,902 | — | — | 13,902 | |||||||||||
Total Canada | 138,077 | (364 | ) | — | 137,713 | ||||||||||
EMEA Traditional | 48,410 | (338 | ) | — | 48,072 | ||||||||||
EMEA Financial Solutions | 108,445 | (10,359 | ) | — | 98,086 | ||||||||||
Total EMEA | 156,855 | (10,697 | ) | — | 146,158 | ||||||||||
Asia Pacific Traditional | 105,654 | — | — | 105,654 | |||||||||||
Asia Pacific Financial Solutions | 19,619 | 2,899 | — | 22,518 | |||||||||||
Total Asia Pacific | 125,273 | 2,899 | — | 128,172 | |||||||||||
Corporate and Other | (119,144 | ) | 67,127 | — | (52,017 | ) | |||||||||
Consolidated | $ | 744,795 | $ | 21,294 | $ | 81,981 | $ | 848,070 | |||||||
(1) | Asset Intensive is net of $(11,804) DAC offset. |
(2) | Asset Intensive is net of $(37,421) DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share data)
(Unaudited) | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Earnings per share from net income: | |||||||||||||||
Basic earnings per share | $ | 2.96 | $ | 2.49 | $ | 10.91 | $ | 7.55 | |||||||
Diluted earnings per share | $ | 2.92 | $ | 2.46 | $ | 10.79 | $ | 7.46 | |||||||
Diluted earnings per share from operating income | $ | 2.63 | $ | 2.84 | $ | 9.73 | $ | 8.43 | |||||||
Weighted average number of common and common equivalent shares outstanding | 65,124 | 66,247 | 64,989 | 67,292 | |||||||||||
(Unaudited) | At December 31, | ||||||
2016 | 2015 | ||||||
Treasury shares | 14,835 | 13,933 | |||||
Common shares outstanding | 64,303 | 65,205 | |||||
Book value per share outstanding | $ | 110.31 | $ | 94.09 | |||
Book value per share outstanding, before impact of AOCI | $ | 92.59 | $ | 83.23 | |||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
(Unaudited) | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Net premiums | $ | 2,493,163 | $ | 2,328,501 | $ | 9,248,871 | $ | 8,570,741 | |||||||
Investment income, net of related expenses | 497,227 | 467,468 | 1,911,886 | 1,734,495 | |||||||||||
Investment related gains (losses), net: | |||||||||||||||
Other-than-temporary impairments on fixed maturity securities | (4,142 | ) | (27,605 | ) | (38,805 | ) | (57,380 | ) | |||||||
Other-than-temporary impairments on fixed maturity securities transferred to accumulated other comprehensive income | 74 | — | 74 | — | |||||||||||
Other investment related gains (losses), net | 14,261 | (17,204 | ) | 132,926 | (107,370 | ) | |||||||||
Total investment related gains (losses), net | 10,193 | (44,809 | ) | 94,195 | (164,750 | ) | |||||||||
Other revenue | 68,715 | 77,431 | 266,559 | 277,692 | |||||||||||
Total revenues | 3,069,298 | 2,828,591 | 11,521,511 | 10,418,178 | |||||||||||
Benefits and expenses: | |||||||||||||||
Claims and other policy benefits | 2,116,045 | 2,015,929 | 7,993,375 | 7,489,382 | |||||||||||
Interest credited | 64,089 | 105,032 | 364,691 | 336,964 | |||||||||||
Policy acquisition costs and other insurance expenses | 370,134 | 300,329 | 1,310,540 | 1,127,486 | |||||||||||
Other operating expenses | 175,634 | 158,556 | 645,509 | 554,044 | |||||||||||
Interest expense | 41,422 | 35,820 | 137,623 | 142,863 | |||||||||||
Collateral finance and securitization expense | 6,431 | 6,182 | 25,827 | 22,644 | |||||||||||
Total benefits and expenses | 2,773,755 | 2,621,848 | 10,477,565 | 9,673,383 | |||||||||||
Income before income taxes | 295,543 | 206,743 | 1,043,946 | 744,795 | |||||||||||
Provision for income taxes | 105,394 | 43,616 | 342,503 | 242,629 | |||||||||||
Net income | $ | 190,149 | $ | 163,127 | $ | 701,443 | $ | 502,166 | |||||||
# # #
Exhibit 99.2
Financial Supplement
Fourth Quarter 2016
(Unaudited)
World Headquarters | Internet Address | Contacts | ||
16600 Swingley Ridge Road | www.rgare.com | Todd C. Larson | ||
Chesterfield, Missouri 63017 U.S.A. | Senior Executive Vice President | |||
and Chief Financial Officer | ||||
Phone: (636) 736-7000 | ||||
e-mail: tlarson@rgare.com | ||||
Jeff Hopson | ||||
Sr. Vice President, Investor Relations | ||||
Phone: (636) 736-2068 | ||||
e-mail: jhopson@rgare.com | ||||
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 dac | AA- | NR | NR | |||
RGA Global Reinsurance Company, Limited | AA- | NR | NR | |||
RGA Reinsurance Company of Australia Limited | AA- | NR | NR | |||
RGA Americas Reinsurance Company, Ltd. | AA- | A+ | NR | |||
RGA Atlantic Reinsurance Company Ltd. | NR | A+ | 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”.
Reinsurance Group of America, Incorporated
Financial Supplement
4th Quarter 2016
Table of Contents
Page | |
Consolidated | |
Segment Summaries of GAAP Income Statements and Operating Income Statements | |
Investments | |
Appendix | |
Reinsurance Group of America, Incorporated
Quarterly Financial Supplement
Non-GAAP Disclosures
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 ("RGA") 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 substantially all of 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, the cumulative effect of any accounting changes, and other items that 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 operating income before income tax is presented in the appendix.
RGA evaluates its stockholders' 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 uses a non-GAAP financial measure called operating return on equity, which is calculated as operating income divided by average shareholders’ equity excluding AOCI.
Additionally, RGA uses a non-GAAP financial measure called book value per share excluding the impact of AOCI 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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Reinsurance Group of America, Incorporated
Financial Supplement
2016 Notes
Segment Name Change
In the fourth quarter of 2016, RGA changed the name of its Non-Traditional segments to Financial Solutions. The name change better aligns our external reports to internally used
terminology. This name change does not affect any previously or future reported results for the Financial Solutions segments.
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Reinsurance Group of America, Incorporated
Financial Supplement
2017 Guidance
On an annual basis, the Company provides financial guidance based upon the intermediate term rather than giving a range of annual earnings per share for an upcoming year. This better reflects the long-term nature of the business and the difficulty in predicting the timing of shorter-term or periodic events such as block transactions. The Company accepts risks over very long periods of time, up to 30 years or longer in some cases. While more predictable over longer-term horizons, RGA’s business is subject to inherent short-term volatility, primarily due to mortality and morbidity experience.
Over the intermediate term, the Company continues to target growth in operating income per share in the 5 to 8 percent range, and operating return on equity of 10 to 12 percent. It is presumed that there are no significant changes in the investment environment from current levels, and the company will deploy $300 million to $400 million of excess capital, on average, annually. These guidance ranges are based upon “normalized” results. Both the operating EPS target range and the ROE ranges are unchanged from a year ago.
| Page 3 | |
Reinsurance Group of America, Incorporated Financial Highlights | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to Date | ||||||||||||||||||||||||||||||||||||
(USD thousands, except in force & per share data) | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
Net premiums | $ | 2,493,163 | $ | 2,251,758 | $ | 2,346,945 | $ | 2,157,005 | $ | 2,328,501 | $ | 164,662 | $ | 9,248,871 | $ | 8,570,741 | $ | 678,130 | ||||||||||||||||||||
Net income | 190,149 | 198,719 | 236,103 | 76,472 | 163,127 | 27,022 | 701,443 | 502,166 | 199,277 | |||||||||||||||||||||||||||||
Operating income | 171,259 | 159,361 | 181,228 | 120,750 | 187,950 | (16,691 | ) | 632,598 | 567,084 | 65,514 | ||||||||||||||||||||||||||||
Return on equity - annualized | 10.1 | % | 10.2 | % | 13.2 | % | 4.8 | % | 10.5 | % | (0.4 | )% | ||||||||||||||||||||||||||
Return on equity - trailing 12 months | 9.9 | % | 9.7 | % | 8.4 | % | 6.9 | % | 7.6 | % | 2.3 | % | ||||||||||||||||||||||||||
Operating return on equity (ex AOCI): | ||||||||||||||||||||||||||||||||||||||
Annualized | 11.7 | % | 11.2 | % | 13.2 | % | 8.9 | % | 14.0 | % | (2.3 | )% | ||||||||||||||||||||||||||
Trailing 12 months | 11.2 | % | 11.8 | % | 11.4 | % | 10.6 | % | 10.6 | % | 0.6 | % | ||||||||||||||||||||||||||
Total assets | $ | 53,097,879 | $ | 54,832,498 | $ | 53,876,703 | $ | 52,186,624 | $ | 50,383,152 | $ | 2,714,727 | ||||||||||||||||||||||||||
Assumed Life Reinsurance In Force (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 1,609.3 | $ | 1,603.8 | $ | 1,612.9 | $ | 1,609.3 | $ | 1,594.3 | $ | 15.0 | ||||||||||||||||||||||||||
U.S. and Latin America Financial Solutions | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | — | ||||||||||||||||||||||||||||||||
Canada Traditional | 355.7 | 358.7 | 361.8 | 349.0 | 333.0 | 22.7 | ||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 603.0 | 612.8 | 608.3 | 624.2 | 602.7 | 0.3 | ||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 492.2 | 505.1 | 504.8 | 483.5 | 462.7 | 29.5 | ||||||||||||||||||||||||||||||||
Asia Pacific Financial Solutions | 0.2 | 0.3 | 0.4 | 0.3 | 0.3 | (0.1 | ) | |||||||||||||||||||||||||||||||
Total Assumed Life Reinsurance In Force | $ | 3,062.5 | $ | 3,082.8 | $ | 3,090.3 | $ | 3,068.4 | $ | 2,995.1 | $ | 67.4 | ||||||||||||||||||||||||||
Assumed New Business Production (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 33.4 | $ | 19.7 | $ | 32.0 | $ | 41.3 | $ | 142.1 | (1) | $ | (108.7 | ) | $ | 126.4 | $ | 203.9 | $ | (77.5 | ) | |||||||||||||||||
Canada Traditional | 9.1 | 9.4 | 8.2 | 8.2 | 8.7 | 0.4 | 34.9 | 38.6 | (3.7 | ) | ||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 44.3 | 31.7 | 49.1 | 44.7 | 66.0 | (1) | (21.7 | ) | 169.8 | 171.6 | (1.8 | ) | ||||||||||||||||||||||||||
Asia Pacific Traditional | 21.6 | 20.5 | 18.0 | 13.6 | 12.1 | 9.5 | 73.7 | 76.9 | (3.2 | ) | ||||||||||||||||||||||||||||
Total Assumed New Business Production | $ | 108.4 | $ | 81.3 | $ | 107.3 | $ | 107.8 | $ | 228.9 | $ | (120.5 | ) | $ | 404.8 | $ | 491.0 | $ | (86.2 | ) | ||||||||||||||||||
Per Share and Shares Data | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 2.96 | $ | 3.10 | $ | 3.68 | $ | 1.18 | $ | 2.49 | $ | 0.47 | $ | 10.91 | $ | 7.55 | $ | 3.36 | ||||||||||||||||||||
Operating income | $ | 2.67 | $ | 2.48 | $ | 2.83 | $ | 1.87 | $ | 2.87 | $ | (0.20 | ) | $ | 9.84 | $ | 8.52 | $ | 1.32 | |||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 2.92 | $ | 3.07 | $ | 3.64 | $ | 1.17 | $ | 2.46 | $ | 0.46 | $ | 10.79 | $ | 7.46 | $ | 3.33 | ||||||||||||||||||||
Operating income | $ | 2.63 | $ | 2.46 | $ | 2.80 | $ | 1.85 | $ | 2.84 | $ | (0.21 | ) | $ | 9.73 | $ | 8.43 | $ | 1.30 | |||||||||||||||||||
Wgt. average common shares outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 64,251 | 64,146 | 64,126 | 64,568 | 65,535 | (1,284 | ) | 64,274 | 66,553 | (2,279 | ) | |||||||||||||||||||||||||||
Diluted | 65,124 | 64,815 | 64,796 | 65,217 | 66,247 | (1,123 | ) | 64,989 | 67,292 | (2,303 | ) | |||||||||||||||||||||||||||
Common shares issued | 79,138 | 79,138 | 79,138 | 79,138 | 79,138 | — | 79,138 | 79,138 | — | |||||||||||||||||||||||||||||
Treasury shares | 14,835 | 14,932 | 15,068 | 15,073 | 13,933 | 902 | 14,835 | 13,933 | 902 | |||||||||||||||||||||||||||||
Common shares outstanding | 64,303 | 64,206 | 64,070 | 64,065 | 65,205 | (902 | ) | 64,303 | 65,205 | (902 | ) | |||||||||||||||||||||||||||
Book value per share | $ | 110.31 | $ | 124.50 | $ | 118.32 | $ | 104.88 | $ | 94.09 | ||||||||||||||||||||||||||||
Per share effect of AOCI | $ | 17.72 | $ | 34.46 | $ | 30.99 | $ | 20.77 | $ | 10.86 | ||||||||||||||||||||||||||||
Book value per share, excluding AOCI | $ | 92.59 | $ | 90.04 | $ | 87.33 | $ | 84.11 | $ | 83.23 | ||||||||||||||||||||||||||||
Shareholder dividends paid | $ | 26,337.3 | $ | 26,288.3 | $ | 23,727.2 | $ | 24,018.6 | $ | 24,269.1 | $ | 2,068.2 | $ | 100,371.4 | $ | 93,380.5 | $ | 6,990.9 | ||||||||||||||||||||
(1) Includes the effect of significant in force transactions. | ||||||||||||||||||||||||||||||||||||||
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Reinsurance Group of America, Incorporated Consolidated GAAP Income Statements (including Operating Income Reconciliations) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to Date | ||||||||||||||||||||||||||||||||||||
(USD thousands) | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||||||
Revenues: | 2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | |||||||||||||||||||||||||||||
Net premiums | $ | 2,493,163 | $ | 2,251,758 | $ | 2,346,945 | $ | 2,157,005 | $ | 2,328,501 | $ | 164,662 | $ | 9,248,871 | $ | 8,570,741 | $ | 678,130 | ||||||||||||||||||||
Investment income, net of related expenses | 497,227 | 489,727 | 507,666 | 417,266 | 467,468 | 29,759 | 1,911,886 | 1,734,495 | 177,391 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | ||||||||||||||||||||||||||||||||||||||
OTTI on fixed maturity securities | (4,142 | ) | — | (846 | ) | (33,817 | ) | (27,605 | ) | 23,463 | (38,805 | ) | (57,380 | ) | 18,575 | |||||||||||||||||||||||
OTTI on fixed maturity securities transferred to AOCI | 74 | — | — | — | — | 74 | 74 | — | 74 | |||||||||||||||||||||||||||||
Other investment related gains (losses), net | 14,261 | 86,624 | 119,110 | (87,069 | ) | (17,204 | ) | 31,465 | 132,926 | (107,370 | ) | 240,296 | ||||||||||||||||||||||||||
Total investment related gains (losses), net | 10,193 | 86,624 | 118,264 | (120,886 | ) | (44,809 | ) | 55,002 | 94,195 | (164,750 | ) | 258,945 | ||||||||||||||||||||||||||
Other revenue | 68,715 | 72,468 | 66,193 | 59,183 | 77,431 | (8,716 | ) | 266,559 | 277,692 | (11,133 | ) | |||||||||||||||||||||||||||
Total revenues | 3,069,298 | 2,900,577 | 3,039,068 | 2,512,568 | 2,828,591 | 240,707 | 11,521,511 | 10,418,178 | 1,103,333 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 2,116,045 | 1,993,064 | 1,997,502 | 1,886,764 | 2,015,929 | 100,116 | 7,993,375 | 7,489,382 | 503,993 | |||||||||||||||||||||||||||||
Interest credited | 64,089 | 116,848 | 95,849 | 87,905 | 105,032 | (40,943 | ) | 364,691 | 336,964 | 27,727 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 370,134 | 300,962 | 405,681 | 233,763 | 300,329 | 69,805 | 1,310,540 | 1,127,486 | 183,054 | |||||||||||||||||||||||||||||
Other operating expenses | 175,634 | 152,556 | 159,895 | 157,424 | 158,556 | 17,078 | 645,509 | 554,044 | 91,465 | |||||||||||||||||||||||||||||
Interest expense | 41,422 | 43,063 | 20,331 | 32,807 | 35,820 | 5,602 | 137,623 | 142,863 | (5,240 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,431 | 6,484 | 6,587 | 6,325 | 6,182 | 249 | 25,827 | 22,644 | 3,183 | |||||||||||||||||||||||||||||
Total benefits and expenses | 2,773,755 | 2,612,977 | 2,685,845 | 2,404,988 | 2,621,848 | 151,907 | 10,477,565 | 9,673,383 | 804,182 | |||||||||||||||||||||||||||||
Income before income taxes | 295,543 | 287,600 | 353,223 | 107,580 | 206,743 | 88,800 | 1,043,946 | 744,795 | 299,151 | |||||||||||||||||||||||||||||
Income tax expense | 105,394 | 88,881 | 117,120 | 31,108 | 43,616 | 61,778 | 342,503 | 242,629 | 99,874 | |||||||||||||||||||||||||||||
Net income | $ | 190,149 | $ | 198,719 | $ | 236,103 | $ | 76,472 | $ | 163,127 | $ | 27,022 | $ | 701,443 | $ | 502,166 | $ | 199,277 | ||||||||||||||||||||
Pre-tax Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 295,543 | $ | 287,600 | $ | 353,223 | $ | 107,580 | $ | 206,743 | $ | 88,800 | $ | 1,043,946 | $ | 744,795 | $ | 299,151 | ||||||||||||||||||||
Investment and derivative losses (gains)— | ||||||||||||||||||||||||||||||||||||||
non-operating (1) | 103,944 | (26,958 | ) | (67,100 | ) | (31,968 | ) | 64,034 | 39,910 | (22,082 | ) | 49,586 | (71,668 | ) | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (20,374 | ) | (49,078 | ) | (76,966 | ) | 92,249 | 27,201 | (47,575 | ) | (54,169 | ) | 98,793 | (152,962 | ) | |||||||||||||||||||||||
GMXB embedded derivatives (1) | (90,923 | ) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | (54,486 | ) | (7,834 | ) | 33,191 | (41,025 | ) | |||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (8,238 | ) | (3,322 | ) | (11,657 | ) | (4,983 | ) | 246 | (8,484 | ) | (28,200 | ) | (16,370 | ) | (11,830 | ) | |||||||||||||||||||||
EIA embedded derivatives—interest credited | (39,964 | ) | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (38,552 | ) | (28,137 | ) | (12,582 | ) | (15,555 | ) | ||||||||||||||||||||||
DAC offset, net | 27,625 | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | 40,767 | 47,364 | (49,225 | ) | 96,589 | ||||||||||||||||||||||||||
Investment income on unit-linked variable annuities | (4,217 | ) | (5,540 | ) | (2,966 | ) | (408 | ) | — | (4,217 | ) | (13,131 | ) | — | (13,131 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 4,217 | 5,540 | 2,966 | 408 | — | 4,217 | 13,131 | — | 13,131 | |||||||||||||||||||||||||||||
Non-investment derivatives | 289 | (1,705 | ) | 110 | (831 | ) | (120 | ) | 409 | (2,137 | ) | (118 | ) | (2,019 | ) | |||||||||||||||||||||||
Operating Income Before Income Taxes | $ | 267,902 | $ | 230,467 | $ | 273,224 | $ | 177,158 | $ | 247,113 | $ | 20,789 | $ | 948,751 | $ | 848,070 | $ | 100,681 | ||||||||||||||||||||
After-tax Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Net Income | $ | 190,149 | $ | 198,719 | $ | 236,103 | $ | 76,472 | $ | 163,127 | $ | 27,022 | $ | 701,443 | $ | 502,166 | $ | 199,277 | ||||||||||||||||||||
Investment & derivative losses (gains)— | ||||||||||||||||||||||||||||||||||||||
non-operating (1) | 66,640 | (19,745 | ) | (46,490 | ) | (21,727 | ) | 40,203 | 26,437 | (21,322 | ) | 30,020 | (51,342 | ) | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (13,243 | ) | (31,901 | ) | (50,028 | ) | 59,962 | 17,680 | (30,923 | ) | (35,210 | ) | 64,215 | (99,425 | ) | |||||||||||||||||||||||
GMXB embedded derivatives (1) | (59,100 | ) | (5,192 | ) | 18,289 | 40,911 | (23,684 | ) | (35,416 | ) | (5,092 | ) | 21,574 | (26,666 | ) | |||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (5,355 | ) | (2,159 | ) | (7,577 | ) | (3,239 | ) | 161 | (5,516 | ) | (18,330 | ) | (10,640 | ) | (7,690 | ) | |||||||||||||||||||||
EIA embedded derivatives—interest credited | (25,977 | ) | 28 | (11,287 | ) | 18,947 | (917 | ) | (25,060 | ) | (18,289 | ) | (8,178 | ) | (10,111 | ) | ||||||||||||||||||||||
DAC offset, net | 17,957 | 20,719 | 42,147 | (50,036 | ) | (8,542 | ) | 26,499 | 30,787 | (31,996 | ) | 62,783 | ||||||||||||||||||||||||||
Investment income on unit-linked variable annuities | (2,741 | ) | (3,601 | ) | (1,928 | ) | (265 | ) | — | (2,741 | ) | (8,535 | ) | — | (8,535 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 2,741 | 3,601 | 1,928 | 265 | — | 2,741 | 8,535 | — | 8,535 | |||||||||||||||||||||||||||||
Non-investment derivatives | 188 | (1,108 | ) | 71 | (540 | ) | (78 | ) | 266 | (1,389 | ) | (77 | ) | (1,312 | ) | |||||||||||||||||||||||
Operating Income | $ | 171,259 | $ | 159,361 | $ | 181,228 | $ | 120,750 | $ | 187,950 | $ | (16,691 | ) | $ | 632,598 | $ | 567,084 | $ | 65,514 | |||||||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 5 | |
Reinsurance Group of America, Incorporated Consolidated Operating Income Statements (USD thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 2,493,163 | $ | 2,251,758 | $ | 2,346,945 | $ | 2,157,005 | $ | 2,328,501 | $ | 164,662 | $ | 9,248,871 | $ | 8,570,741 | $ | 678,130 | ||||||||||||||||||||
Investment income, net of related expenses | 484,772 | 480,865 | 493,043 | 411,875 | 467,714 | 17,058 | 1,870,555 | 1,718,125 | 152,430 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 2,840 | 2,600 | 2,335 | 2,335 | 9,989 | (7,149 | ) | 10,110 | 16,820 | (6,710 | ) | |||||||||||||||||||||||||||
Other revenue | 69,004 | 70,763 | 66,303 | 58,352 | 77,311 | (8,307 | ) | 264,422 | 277,574 | (13,152 | ) | |||||||||||||||||||||||||||
Total revenues | 3,049,779 | 2,805,986 | 2,908,626 | 2,629,567 | 2,883,515 | 166,264 | 11,393,958 | 10,583,260 | 810,698 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 2,116,045 | 1,993,064 | 1,997,502 | 1,886,764 | 2,015,929 | 100,116 | 7,993,375 | 7,489,382 | 503,993 | |||||||||||||||||||||||||||||
Interest credited | 99,836 | 111,266 | 110,247 | 58,348 | 106,444 | (6,608 | ) | 379,697 | 349,546 | 30,151 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 342,509 | 269,086 | 340,840 | 310,741 | 313,471 | 29,038 | 1,263,176 | 1,176,711 | 86,465 | |||||||||||||||||||||||||||||
Other operating expenses | 175,634 | 152,556 | 159,895 | 157,424 | 158,556 | 17,078 | 645,509 | 554,044 | 91,465 | |||||||||||||||||||||||||||||
Interest expense | 41,422 | 43,063 | 20,331 | 32,807 | 35,820 | 5,602 | 137,623 | 142,863 | (5,240 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,431 | 6,484 | 6,587 | 6,325 | 6,182 | 249 | 25,827 | 22,644 | 3,183 | |||||||||||||||||||||||||||||
Total benefits and expenses | 2,781,877 | 2,575,519 | 2,635,402 | 2,452,409 | 2,636,402 | 145,475 | 10,445,207 | 9,735,190 | 710,017 | |||||||||||||||||||||||||||||
Operating income before income taxes | 267,902 | 230,467 | 273,224 | 177,158 | 247,113 | 20,789 | 948,751 | 848,070 | 100,681 | |||||||||||||||||||||||||||||
Operating income tax expense | 96,643 | 71,106 | 91,996 | 56,408 | 59,163 | 37,480 | 316,153 | 280,986 | 35,167 | |||||||||||||||||||||||||||||
Operating income | $ | 171,259 | $ | 159,361 | $ | 181,228 | $ | 120,750 | $ | 187,950 | $ | (16,691 | ) | $ | 632,598 | $ | 567,084 | $ | 65,514 | |||||||||||||||||||
Wgt. average common shares outstanding (diluted) | 65,124 | 64,815 | 64,796 | 65,217 | 66,247 | (1,123) | 64,989 | 67,292 | (2,303) | |||||||||||||||||||||||||||||
Diluted earnings per share—operating income | $ | 2.63 | $ | 2.46 | $ | 2.80 | $ | 1.85 | $ | 2.84 | $ | (0.21 | ) | $ | 9.73 | $ | 8.43 | $ | 1.30 | |||||||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (35,247 | ) | $ | (21,049 | ) | $ | (45,665 | ) | $ | (70,207 | ) | $ | (107,975 | ) | $ | 72,728 | $ | (172,168 | ) | $ | (473,539 | ) | $ | 301,371 | |||||||||||||
Operating income before income taxes | $ | (7,911 | ) | $ | (3,236 | ) | $ | (4,247 | ) | $ | (9,762 | ) | $ | (18,672 | ) | $ | 10,761 | $ | (25,156 | ) | $ | (55,164 | ) | $ | 30,008 | |||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 6 | |
Reinsurance Group of America, Incorporated Consolidated Balance Sheets (USD thousands) | ||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | ||||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 32,093,625 | $ | 33,536,419 | $ | 33,160,976 | $ | 31,148,714 | $ | 29,642,905 | ||||||||||
Mortgage loans on real estate | 3,775,522 | 3,607,700 | 3,377,039 | 3,292,496 | 3,129,951 | |||||||||||||||
Policy loans | 1,427,602 | 1,414,963 | 1,445,410 | 1,451,857 | 1,468,796 | |||||||||||||||
Funds withheld at interest | 5,875,919 | 5,922,656 | 5,899,289 | 5,797,183 | 5,880,203 | |||||||||||||||
Short-term investments | 76,710 | 126,702 | 195,979 | 431,535 | 558,284 | |||||||||||||||
Other invested assets | 1,591,940 | 1,777,065 | 1,682,143 | 1,368,544 | 1,298,120 | |||||||||||||||
Total investments | 44,841,318 | 46,385,505 | 45,760,836 | 43,490,329 | 41,978,259 | |||||||||||||||
Cash and cash equivalents | 1,200,718 | 1,379,693 | 1,034,329 | 1,502,082 | 1,525,275 | |||||||||||||||
Accrued investment income | 347,173 | 391,837 | 368,926 | 364,432 | 339,452 | |||||||||||||||
Premiums receivable and other reinsurance balances | 1,930,755 | 1,834,362 | 1,917,844 | 1,886,293 | 1,797,504 | |||||||||||||||
Reinsurance ceded receivables | 683,972 | 694,906 | 681,425 | 688,491 | 637,859 | |||||||||||||||
Deferred policy acquisition costs | 3,338,605 | 3,406,093 | 3,401,935 | 3,490,509 | 3,392,437 | |||||||||||||||
Other assets | 755,338 | 740,102 | 711,408 | 764,488 | 712,366 | |||||||||||||||
Total assets | $ | 53,097,879 | $ | 54,832,498 | $ | 53,876,703 | $ | 52,186,624 | $ | 50,383,152 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Future policy benefits | $ | 19,581,573 | $ | 19,634,157 | $ | 19,605,021 | $ | 19,811,921 | $ | 19,612,251 | ||||||||||
Interest-sensitive contract liabilities | 14,029,354 | 14,217,831 | 14,024,012 | 14,087,081 | 13,663,873 | |||||||||||||||
Other policy claims and benefits | 4,263,026 | 4,304,491 | 4,305,219 | 4,384,072 | 4,094,640 | |||||||||||||||
Other reinsurance balances | 388,989 | 353,426 | 344,527 | 397,375 | 296,899 | |||||||||||||||
Deferred income taxes | 2,770,640 | 3,071,995 | 2,901,264 | 2,483,584 | 2,218,328 | |||||||||||||||
Other liabilities | 1,041,880 | 1,321,017 | 1,157,252 | 1,106,531 | 1,165,071 | |||||||||||||||
Long-term debt (1) | 3,088,635 | 3,088,710 | 3,088,280 | 2,297,709 | 2,297,548 | |||||||||||||||
Collateral finance and securitization notes | 840,700 | 847,389 | 870,482 | 899,482 | 899,161 | |||||||||||||||
Total liabilities | 46,004,797 | 46,839,016 | 46,296,057 | 45,467,755 | 44,247,771 | |||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||
Common stock, at par value | 791 | 791 | 791 | 791 | 791 | |||||||||||||||
Additional paid-in-capital | 1,848,611 | 1,842,390 | 1,834,995 | 1,827,646 | 1,816,142 | |||||||||||||||
Retained earnings | 5,199,130 | 5,039,470 | 4,870,711 | 4,668,588 | 4,620,303 | |||||||||||||||
Treasury stock | (1,094,779 | ) | (1,101,495 | ) | (1,111,225 | ) | (1,108,539 | ) | (1,010,139 | ) | ||||||||||
Accumulated other comprehensive income (AOCI): | ||||||||||||||||||||
Accumulated currency translation adjustment, net of income taxes | (172,541 | ) | (121,709 | ) | (93,476 | ) | (103,418 | ) | (181,151 | ) | ||||||||||
Unrealized appreciation of securities, net of income taxes | 1,355,033 | 2,381,473 | 2,126,815 | 1,482,922 | 935,697 | |||||||||||||||
Pension and postretirement benefits, net of income taxes | (43,163 | ) | (47,438 | ) | (47,965 | ) | (49,121 | ) | (46,262 | ) | ||||||||||
Total stockholders’ equity | 7,093,082 | 7,993,482 | 7,580,646 | 6,718,869 | 6,135,381 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 53,097,879 | $ | 54,832,498 | $ | 53,876,703 | $ | 52,186,624 | $ | 50,383,152 | ||||||||||
Total stockholders’ equity, excluding AOCI | $ | 5,953,753 | $ | 5,781,156 | $ | 5,595,272 | $ | 5,388,486 | $ | 5,427,097 | ||||||||||
(1) The balance of long-term debt at December 31, 2016 includes current maturities of $299,945, which were previously included in short-term debt. The comparable prior periods have been revised to conform to the December 2016 presentation. | ||||||||||||||||||||
| Page 7 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,430,291 | $ | 1,277,491 | $ | 1,307,395 | $ | 1,234,394 | $ | 1,370,745 | $ | 59,546 | $ | 5,249,571 | $ | 4,806,706 | $ | 442,865 | ||||||||||||||||||||
Investment income, net of related expenses | 184,674 | 167,898 | 182,238 | 165,023 | 176,174 | 8,500 | 699,833 | 636,779 | 63,054 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 2,147 | (3,394 | ) | (882 | ) | (2,100 | ) | 493 | 1,654 | (4,229 | ) | 2,306 | (6,535 | ) | ||||||||||||||||||||||||
Other revenue | 8,119 | 2,922 | 5,252 | 3,500 | 7,438 | 681 | 19,793 | 19,235 | 558 | |||||||||||||||||||||||||||||
Total revenues | 1,625,231 | 1,444,917 | 1,494,003 | 1,400,817 | 1,554,850 | 70,381 | 5,964,968 | 5,465,026 | 499,942 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,232,207 | 1,131,507 | 1,149,665 | 1,119,442 | 1,235,926 | (3,719 | ) | 4,632,821 | 4,366,696 | 266,125 | ||||||||||||||||||||||||||||
Interest credited | 22,156 | 20,628 | 20,845 | 21,400 | 21,682 | 474 | 85,029 | 77,500 | 7,529 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 205,358 | 184,766 | 182,285 | 177,078 | 187,277 | 18,081 | 749,487 | 673,331 | 76,156 | |||||||||||||||||||||||||||||
Other operating expenses | 34,018 | 30,935 | 29,778 | 31,799 | 30,482 | 3,536 | 126,530 | 111,728 | 14,802 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,493,739 | 1,367,836 | 1,382,573 | 1,349,719 | 1,475,367 | 18,372 | 5,593,867 | 5,229,255 | 364,612 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 131,492 | $ | 77,081 | $ | 111,430 | $ | 51,098 | $ | 79,483 | $ | 52,009 | $ | 371,101 | $ | 235,771 | $ | 135,330 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 86.2 | % | 88.6 | % | 87.9 | % | 90.7 | % | 90.2 | % | (4.0 | )% | 88.3 | % | 90.8 | % | (2.5 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14.4 | % | 14.5 | % | 13.9 | % | 14.3 | % | 13.7 | % | 0.7 | % | 14.3 | % | 14.0 | % | 0.3 | % | ||||||||||||||||||||
Other operating expenses | 2.4 | % | 2.4 | % | 2.3 | % | 2.6 | % | 2.2 | % | 0.2 | % | 2.4 | % | 2.3 | % | 0.1 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (1,372 | ) | $ | (1,135 | ) | $ | (2,243 | ) | $ | (867 | ) | $ | (1,419 | ) | $ | 47 | $ | (5,617 | ) | $ | (4,625 | ) | $ | (992 | ) | ||||||||||||
Income before income taxes | $ | 159 | $ | (41 | ) | $ | (189 | ) | $ | (21 | ) | $ | 54 | $ | 105 | $ | (92 | ) | $ | (379 | ) | $ | 287 | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 8 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,430,291 | $ | 1,277,491 | $ | 1,307,395 | $ | 1,234,394 | $ | 1,370,745 | $ | 59,546 | $ | 5,249,571 | $ | 4,806,706 | $ | 442,865 | ||||||||||||||||||||
Investment income, net of related expenses | 184,674 | 167,898 | 182,238 | 165,023 | 176,174 | 8,500 | 699,833 | 636,779 | 63,054 | |||||||||||||||||||||||||||||
Other revenue | 8,119 | 2,922 | 5,252 | 3,500 | 7,438 | 681 | 19,793 | 19,235 | 558 | |||||||||||||||||||||||||||||
Total revenues | 1,623,084 | 1,448,311 | 1,494,885 | 1,402,917 | 1,554,357 | 68,727 | 5,969,197 | 5,462,720 | 506,477 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,232,207 | 1,131,507 | 1,149,665 | 1,119,442 | 1,235,926 | (3,719 | ) | 4,632,821 | 4,366,696 | 266,125 | ||||||||||||||||||||||||||||
Interest credited | 22,156 | 20,628 | 20,845 | 21,400 | 21,682 | 474 | 85,029 | 77,500 | 7,529 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 205,358 | 184,766 | 182,285 | 177,078 | 187,277 | 18,081 | 749,487 | 673,331 | 76,156 | |||||||||||||||||||||||||||||
Other operating expenses | 34,018 | 30,935 | 29,778 | 31,799 | 30,482 | 3,536 | 126,530 | 111,728 | 14,802 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,493,739 | 1,367,836 | 1,382,573 | 1,349,719 | 1,475,367 | 18,372 | 5,593,867 | 5,229,255 | 364,612 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 129,345 | $ | 80,475 | $ | 112,312 | $ | 53,198 | $ | 78,990 | $ | 50,355 | $ | 375,330 | $ | 233,465 | $ | 141,865 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 86.2 | % | 88.6 | % | 87.9 | % | 90.7 | % | 90.2 | % | (4.0 | )% | 88.3 | % | 90.8 | % | (2.5 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14.4 | % | 14.5 | % | 13.9 | % | 14.3 | % | 13.7 | % | 0.7 | % | 14.3 | % | 14.0 | % | 0.3 | % | ||||||||||||||||||||
Other operating expenses | 2.4 | % | 2.4 | % | 2.3 | % | 2.6 | % | 2.2 | % | 0.2 | % | 2.4 | % | 2.3 | % | 0.1 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (1,372 | ) | $ | (1,135 | ) | $ | (2,243 | ) | $ | (867 | ) | $ | (1,419 | ) | $ | 47 | $ | (5,617 | ) | $ | (4,625 | ) | $ | (992 | ) | ||||||||||||
Income before income taxes | $ | 159 | $ | (41 | ) | $ | (189 | ) | $ | (21 | ) | $ | 54 | $ | 105 | $ | (92 | ) | $ | (379 | ) | $ | 287 | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 9 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Asset Intensive GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 7,099 | $ | 5,369 | $ | 5,662 | $ | 6,219 | $ | 6,018 | $ | 1,081 | $ | 24,349 | $ | 22,177 | $ | 2,172 | ||||||||||||||||||||
Investment income, net of related expenses | 161,395 | 167,683 | 177,681 | 117,215 | 153,445 | 7,950 | 623,974 | 560,701 | 63,273 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 5,708 | 59,661 | 76,830 | (128,551 | ) | (31,218 | ) | 36,926 | 13,648 | (118,482 | ) | 132,130 | ||||||||||||||||||||||||||
Other revenue | 22,808 | 23,417 | 24,555 | 22,834 | 23,238 | (430 | ) | 93,614 | 105,389 | (11,775 | ) | |||||||||||||||||||||||||||
Total revenues | 197,010 | 256,130 | 284,728 | 17,717 | 151,483 | 45,527 | 755,585 | 569,785 | 185,800 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 23,593 | 18,927 | 19,507 | 19,833 | 22,605 | 988 | 81,860 | 66,146 | 15,714 | |||||||||||||||||||||||||||||
Interest credited | 33,511 | 86,742 | 68,436 | 62,558 | 71,756 | (38,245 | ) | 251,247 | 244,318 | 6,929 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 60,306 | 56,497 | 97,078 | (39,656 | ) | 19,957 | 40,349 | 174,225 | 85,760 | 88,465 | ||||||||||||||||||||||||||||
Other operating expenses | 7,339 | 5,232 | 5,728 | 5,812 | 6,291 | 1,048 | 24,111 | 20,615 | 3,496 | |||||||||||||||||||||||||||||
Total benefits and expenses | 124,749 | 167,398 | 190,749 | 48,547 | 120,609 | 4,140 | 531,443 | 416,839 | 114,604 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 72,261 | $ | 88,732 | $ | 93,979 | $ | (30,830 | ) | $ | 30,874 | $ | 41,387 | $ | 224,142 | $ | 152,946 | $ | 71,196 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 10 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Asset Intensive Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 7,099 | $ | 5,369 | $ | 5,662 | $ | 6,219 | $ | 6,018 | $ | 1,081 | $ | 24,349 | $ | 22,177 | $ | 2,172 | ||||||||||||||||||||
Investment income, net of related expenses | 153,879 | 165,388 | 167,377 | 112,591 | 153,504 | 375 | 599,235 | 550,642 | 48,593 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | (1 | ) | 1 | — | (1 | ) | 1 | — | — | — | |||||||||||||||||||||||||||
Other revenue | 22,808 | 23,417 | 24,555 | 22,834 | 23,238 | (430 | ) | 93,614 | 105,389 | (11,775 | ) | |||||||||||||||||||||||||||
Total revenues | 183,786 | 194,173 | 197,595 | 141,644 | 182,759 | 1,027 | 717,198 | 678,208 | 38,990 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 23,593 | 18,927 | 19,507 | 19,833 | 22,605 | 988 | 81,860 | 66,146 | 15,714 | |||||||||||||||||||||||||||||
Interest credited | 73,475 | 86,700 | 85,800 | 33,409 | 73,168 | 307 | 279,384 | 256,900 | 22,484 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 32,681 | 24,621 | 32,237 | 37,322 | 33,099 | (418 | ) | 126,861 | 134,985 | (8,124 | ) | |||||||||||||||||||||||||||
Other operating expenses | 7,339 | 5,232 | 5,728 | 5,812 | 6,291 | 1,048 | 24,111 | 20,615 | 3,496 | |||||||||||||||||||||||||||||
Total benefits and expenses | 137,088 | 135,480 | 143,272 | 96,376 | 135,163 | 1,925 | 512,216 | 478,646 | 33,570 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 46,698 | $ | 58,693 | $ | 54,323 | $ | 45,268 | $ | 47,596 | $ | (898 | ) | $ | 204,982 | $ | 199,562 | $ | 5,420 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 11 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Asset Intensive (Continued) (USD millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | ||||||||||||||||
Annuity account values: | ||||||||||||||||||||
Fixed annuities (deferred) | $ | 5,091 | $ | 5,130 | $ | 5,189 | $ | 5,210 | $ | 4,843 | ||||||||||
Net interest spread (fixed annuities) | 2.4 | % | 2.6 | % | 2.5 | % | 2.1 | % | 2.7 | % | ||||||||||
Equity-indexed annuities | $ | 4,291 | $ | 4,374 | $ | 4,402 | $ | 4,448 | $ | 4,509 | ||||||||||
Variable annuities account values | ||||||||||||||||||||
No riders | $ | 731 | $ | 739 | $ | 732 | $ | 753 | $ | 782 | ||||||||||
GMDB only | 58 | 58 | 58 | 60 | 62 | |||||||||||||||
GMIB only | 5 | 5 | 5 | 5 | 5 | |||||||||||||||
GMAB only | 28 | 29 | 29 | 31 | 33 | |||||||||||||||
GMWB only | 1,334 | 1,370 | 1,367 | 1,386 | 1,425 | |||||||||||||||
GMDB / WB | 335 | 342 | 341 | 349 | 359 | |||||||||||||||
Other | 19 | 20 | 20 | 21 | 22 | |||||||||||||||
Total variable annuities account values | $ | 2,510 | $ | 2,563 | $ | 2,552 | $ | 2,605 | $ | 2,688 | ||||||||||
Fair value of liabilities associated with living benefit riders | $ | 185 | $ | 276 | $ | 284 | $ | 255 | $ | 192 | ||||||||||
Interest-sensitive contract liabilities associated with: | ||||||||||||||||||||
Guaranteed investment contracts | $ | 554 | $ | 456 | $ | 354 | $ | 368 | $ | 322 | ||||||||||
Bank-owned life insurance (BOLI) | $ | 571 | $ | 568 | $ | 565 | $ | 562 | $ | 559 | ||||||||||
Other asset-intensive business | $ | 65 | $ | 65 | $ | 66 | $ | 66 | $ | 66 | ||||||||||
Future policy benefits associated with: | ||||||||||||||||||||
Payout annuities | $ | 1,964 | $ | 1,974 | $ | 1,978 | $ | 1,949 | $ | 1,960 | ||||||||||
| Page 12 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Financial Reinsurance GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1,092 | $ | 1,038 | $ | 2,386 | $ | 2,607 | $ | 1,702 | $ | (610 | ) | $ | 7,123 | $ | 5,479 | $ | 1,644 | |||||||||||||||||||
Other revenue | 22,227 | 18,967 | 17,963 | 18,581 | 19,133 | 3,094 | 77,738 | 68,601 | 9,137 | |||||||||||||||||||||||||||||
Total revenues | 23,319 | 20,005 | 20,349 | 21,188 | 20,835 | 2,484 | 84,861 | 74,080 | 10,781 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5,505 | 3,492 | 3,085 | 2,568 | 2,720 | 2,785 | 14,650 | 10,193 | 4,457 | |||||||||||||||||||||||||||||
Other operating expenses | 3,367 | 2,531 | 2,389 | 2,686 | 2,179 | 1,188 | 10,973 | 8,870 | 2,103 | |||||||||||||||||||||||||||||
Total benefits and expenses | 8,872 | 6,023 | 5,474 | 5,254 | 4,899 | 3,973 | 25,623 | 19,063 | 6,560 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | (1,489 | ) | $ | 59,238 | $ | 55,017 | $ | 4,221 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 13 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Financial Reinsurance Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1,092 | $ | 1,038 | $ | 2,386 | $ | 2,607 | $ | 1,702 | $ | (610 | ) | $ | 7,123 | $ | 5,479 | $ | 1,644 | |||||||||||||||||||
Other revenue | 22,227 | 18,967 | 17,963 | 18,581 | 19,133 | 3,094 | 77,738 | 68,601 | 9,137 | |||||||||||||||||||||||||||||
Total revenues | 23,319 | 20,005 | 20,349 | 21,188 | 20,835 | 2,484 | 84,861 | 74,080 | 10,781 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5,505 | 3,492 | 3,085 | 2,568 | 2,720 | 2,785 | 14,650 | 10,193 | 4,457 | |||||||||||||||||||||||||||||
Other operating expenses | 3,367 | 2,531 | 2,389 | 2,686 | 2,179 | 1,188 | 10,973 | 8,870 | 2,103 | |||||||||||||||||||||||||||||
Total benefits and expenses | 8,872 | 6,023 | 5,474 | 5,254 | 4,899 | 3,973 | 25,623 | 19,063 | 6,560 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | (1,489 | ) | $ | 59,238 | $ | 55,017 | $ | 4,221 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 14 | |
Reinsurance Group of America, Incorporated Canada Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 241,918 | $ | 231,154 | $ | 240,107 | $ | 215,463 | $ | 201,384 | $ | 40,534 | $ | 928,642 | $ | 838,894 | $ | 89,748 | ||||||||||||||||||||
Investment income, net of related expenses | 44,806 | 45,239 | 46,859 | 42,023 | 42,938 | 1,868 | 178,927 | 182,621 | (3,694 | ) | ||||||||||||||||||||||||||||
Investment related gains (losses), net | 2,771 | 3,832 | 2,285 | 1,640 | 1,027 | 1,744 | 10,528 | (1,503 | ) | 12,031 | ||||||||||||||||||||||||||||
Other revenue | 638 | 734 | (339 | ) | (1,126 | ) | 1,131 | (493 | ) | (93 | ) | 3,000 | (3,093 | ) | ||||||||||||||||||||||||
Total revenues | 290,133 | 280,959 | 288,912 | 258,000 | 246,480 | 43,653 | 1,118,004 | 1,023,012 | 94,992 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 182,912 | 175,618 | 176,478 | 172,401 | 148,543 | 34,369 | 707,409 | 670,459 | 36,950 | |||||||||||||||||||||||||||||
Interest credited | 2 | 8 | 7 | 2 | 4 | (2 | ) | 19 | 18 | 1 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 60,074 | 61,019 | 60,021 | 57,138 | 43,226 | 16,848 | 238,252 | 192,729 | 45,523 | |||||||||||||||||||||||||||||
Other operating expenses | 10,119 | 10,039 | 9,097 | 8,364 | 10,067 | 52 | 37,619 | 35,631 | 1,988 | |||||||||||||||||||||||||||||
Total benefits and expenses | 253,107 | 246,684 | 245,603 | 237,905 | 201,840 | 51,267 | 983,299 | 898,837 | 84,462 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 37,026 | $ | 34,275 | $ | 43,309 | $ | 20,095 | $ | 44,640 | $ | (7,614 | ) | $ | 134,705 | $ | 124,175 | $ | 10,530 | |||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Loss ratios (creditor business) | 22.5 | % | 27.0 | % | 32.2 | % | 25.8 | % | 28.2 | % | (5.7 | )% | 26.9 | % | 31.1 | % | (4.2 | )% | ||||||||||||||||||||
Loss ratios (excluding creditor business) | 92.2 | % | 93.1 | % | 87.4 | % | 98.5 | % | 82.5 | % | 9.7 | % | 92.6 | % | 91.7 | % | 0.9 | % | ||||||||||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 63.8 | % | 63.5 | % | 61.5 | % | 67.0 | % | 60.8 | % | 3.0 | % | 63.9 | % | 65.6 | % | (1.7 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (creditor business) | 67.5 | % | 65.7 | % | 64.3 | % | 66.9 | % | 66.2 | % | 1.3 | % | 66.1 | % | 63.7 | % | 2.4 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (excluding creditor business) | 11.5 | % | 12.6 | % | 11.8 | % | 12.7 | % | 12.9 | % | (1.4 | )% | 12.2 | % | 13.2 | % | (1.0 | )% | ||||||||||||||||||||
Other operating expenses | 4.2 | % | 4.3 | % | 3.8 | % | 3.9 | % | 5.0 | % | (0.8 | )% | 4.1 | % | 4.0 | % | 0.1 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (108 | ) | $ | 724 | $ | (11,615 | ) | $ | (22,010 | ) | $ | (35,018 | ) | $ | 34,910 | $ | (33,009 | ) | $ | (130,360 | ) | $ | 97,351 | ||||||||||||||
Income before income taxes | $ | (483 | ) | $ | 104 | $ | (2,247 | ) | $ | (3,129 | ) | $ | (7,658 | ) | $ | 7,175 | $ | (5,755 | ) | $ | (20,338 | ) | $ | 14,583 | ||||||||||||||
Creditor reinsurance net premiums | $ | 57,471 | $ | 59,983 | $ | 60,275 | $ | 54,854 | $ | 32,484 | $ | 24,987 | $ | 232,583 | $ | 162,629 | $ | 69,954 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
Note: The loss ratios on creditor reinsurance business are normally lower than traditional reinsurance, while allowances are normally higher as a percentage of premiums. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 15 | |
Reinsurance Group of America, Incorporated Canada Traditional Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 241,918 | $ | 231,154 | $ | 240,107 | $ | 215,463 | $ | 201,384 | $ | 40,534 | $ | 928,642 | $ | 838,894 | $ | 89,748 | ||||||||||||||||||||
Investment income, net of related expenses | 44,084 | 44,212 | 45,506 | 41,664 | 43,125 | 959 | 175,466 | 176,310 | (844 | ) | ||||||||||||||||||||||||||||
Investment related gains, net | 1,221 | 1,208 | 1,236 | 1,268 | 1,286 | (65 | ) | 4,933 | 4,444 | 489 | ||||||||||||||||||||||||||||
Other revenue | 638 | 734 | (339 | ) | (1,126 | ) | 1,131 | (493 | ) | (93 | ) | 3,000 | (3,093 | ) | ||||||||||||||||||||||||
Total revenues | 287,861 | 277,308 | 286,510 | 257,269 | 246,926 | 40,935 | 1,108,948 | 1,022,648 | 86,300 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 182,912 | 175,618 | 176,478 | 172,401 | 148,543 | 34,369 | 707,409 | 670,459 | 36,950 | |||||||||||||||||||||||||||||
Interest credited | 2 | 8 | 7 | 2 | 4 | (2 | ) | 19 | 18 | 1 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 60,074 | 61,019 | 60,021 | 57,138 | 43,226 | 16,848 | 238,252 | 192,729 | 45,523 | |||||||||||||||||||||||||||||
Other operating expenses | 10,119 | 10,039 | 9,097 | 8,364 | 10,067 | 52 | 37,619 | 35,631 | 1,988 | |||||||||||||||||||||||||||||
Total benefits and expenses | 253,107 | 246,684 | 245,603 | 237,905 | 201,840 | 51,267 | 983,299 | 898,837 | 84,462 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 34,754 | $ | 30,624 | $ | 40,907 | $ | 19,364 | $ | 45,086 | $ | (10,332 | ) | $ | 125,649 | $ | 123,811 | $ | 1,838 | |||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Loss ratios (creditor business) | 22.5 | % | 27.0 | % | 32.2 | % | 25.8 | % | 28.2 | % | (5.7 | )% | 26.9 | % | 31.1 | % | (4.2 | )% | ||||||||||||||||||||
Loss ratios (excluding creditor business) | 92.2 | % | 93.1 | % | 87.4 | % | 98.5 | % | 82.5 | % | 9.7 | % | 92.6 | % | 91.7 | % | 0.9 | % | ||||||||||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 64.0 | % | 63.8 | % | 61.8 | % | 67.0 | % | 60.8 | % | 3.2 | % | 64.1 | % | 66.0 | % | (1.9 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (creditor business) | 67.5 | % | 65.7 | % | 64.3 | % | 66.9 | % | 66.2 | % | 1.3 | % | 66.1 | % | 63.7 | % | 2.4 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (excluding creditor business) | 11.5 | % | 12.6 | % | 11.8 | % | 12.7 | % | 12.9 | % | (1.4 | )% | 12.2 | % | 13.2 | % | (1.0 | )% | ||||||||||||||||||||
Other operating expenses | 4.2 | % | 4.3 | % | 3.8 | % | 3.9 | % | 5.0 | % | (0.8 | )% | 4.1 | % | 4.2 | % | (0.1 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (108 | ) | $ | 724 | $ | (11,615 | ) | $ | (22,010 | ) | $ | (35,018 | ) | $ | 34,910 | $ | (33,009 | ) | $ | (130,360 | ) | $ | 97,351 | ||||||||||||||
Operating income before income taxes | $ | (505 | ) | $ | 104 | $ | (2,130 | ) | $ | (3,701 | ) | $ | (7,795 | ) | $ | 7,290 | $ | (6,232 | ) | $ | (20,651 | ) | $ | 14,419 | ||||||||||||||
Creditor reinsurance net premiums | $ | 57,471 | $ | 59,983 | $ | 60,275 | $ | 54,854 | $ | 32,484 | $ | 24,987 | $ | 232,583 | $ | 162,629 | $ | 69,954 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
Note: The loss ratios on creditor reinsurance business are normally lower than traditional reinsurance, while allowances are normally higher as a percentage of premiums. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 16 | |
Reinsurance Group of America, Incorporated Canada Financial Solutions (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 9,612 | $ | 9,946 | $ | 10,192 | $ | 8,951 | $ | 9,002 | $ | 610 | $ | 38,701 | $ | 37,969 | $ | 732 | ||||||||||||||||||||
Investment income, net of related expenses | 1,043 | 1,037 | 228 | 384 | 328 | 715 | 2,692 | 1,436 | 1,256 | |||||||||||||||||||||||||||||
Other revenue | 1,386 | 1,376 | 1,434 | 1,349 | 1,332 | 54 | 5,545 | 5,629 | (84 | ) | ||||||||||||||||||||||||||||
Total revenues | 12,041 | 12,359 | 11,854 | 10,684 | 10,662 | 1,379 | 46,938 | 45,034 | 1,904 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 7,270 | 10,567 | 8,834 | 9,604 | 6,708 | 562 | 36,275 | 29,251 | 7,024 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 229 | 285 | 513 | 204 | 145 | 84 | 1,231 | 552 | 679 | |||||||||||||||||||||||||||||
Other operating expenses | 477 | 347 | 379 | 284 | 389 | 88 | 1,487 | 1,329 | 158 | |||||||||||||||||||||||||||||
Total benefits and expenses | 7,976 | 11,199 | 9,726 | 10,092 | 7,242 | 734 | 38,993 | 31,132 | 7,861 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 645 | $ | 7,945 | $ | 13,902 | $ | (5,957 | ) | |||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (3 | ) | $ | 33 | $ | (491 | ) | $ | (915 | ) | $ | (1,570 | ) | $ | 1,567 | $ | (1,376 | ) | $ | (5,978 | ) | $ | 4,602 | ||||||||||||||
Income before income taxes | $ | 13 | $ | (9 | ) | $ | (106 | ) | $ | (575 | ) | $ | (623 | ) | $ | 636 | $ | (677 | ) | $ | (1,930 | ) | $ | 1,253 | ||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Canada Financial Solutions operations includes longevity and financial reinsurance transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 17 | |
Reinsurance Group of America, Incorporated Canada Financial Solutions (1) Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 9,612 | $ | 9,946 | $ | 10,192 | $ | 8,951 | $ | 9,002 | $ | 610 | $ | 38,701 | $ | 37,969 | $ | 732 | ||||||||||||||||||||
Investment income, net of related expenses | 1,043 | 1,037 | 228 | 384 | 328 | 715 | 2,692 | 1,436 | 1,256 | |||||||||||||||||||||||||||||
Other revenue | 1,386 | 1,376 | 1,434 | 1,349 | 1,332 | 54 | 5,545 | 5,629 | (84 | ) | ||||||||||||||||||||||||||||
Total revenues | 12,041 | 12,359 | 11,854 | 10,684 | 10,662 | 1,379 | 46,938 | 45,034 | 1,904 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 7,270 | 10,567 | 8,834 | 9,604 | 6,708 | 562 | 36,275 | 29,251 | 7,024 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 229 | 285 | 513 | 204 | 145 | 84 | 1,231 | 552 | 679 | |||||||||||||||||||||||||||||
Other operating expenses | 477 | 347 | 379 | 284 | 389 | 88 | 1,487 | 1,329 | 158 | |||||||||||||||||||||||||||||
Total benefits and expenses | 7,976 | 11,199 | 9,726 | 10,092 | 7,242 | 734 | 38,993 | 31,132 | 7,861 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 645 | $ | 7,945 | $ | 13,902 | $ | (5,957 | ) | |||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (3 | ) | $ | 33 | $ | (491 | ) | $ | (915 | ) | $ | (1,570 | ) | $ | 1,567 | $ | (1,376 | ) | $ | (5,978 | ) | $ | 4,602 | ||||||||||||||
Operating income before income taxes | $ | 13 | $ | (9 | ) | $ | (106 | ) | $ | (575 | ) | $ | (623 | ) | $ | 636 | $ | (677 | ) | $ | (1,930 | ) | $ | 1,253 | ||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Canada Financial Solutions operations includes longevity and financial reinsurance transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 18 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 301,252 | $ | 275,514 | $ | 286,861 | $ | 276,435 | $ | 299,938 | $ | 1,314 | $ | 1,140,062 | $ | 1,121,540 | $ | 18,522 | ||||||||||||||||||||
Investment income, net of related expenses | 11,745 | 13,067 | 13,321 | 12,168 | 14,123 | (2,378 | ) | 50,301 | 51,370 | (1,069 | ) | |||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | — | 5 | 7,527 | (7,527 | ) | 5 | 8,397 | (8,392 | ) | |||||||||||||||||||||||||||
Other revenue | 1,806 | 489 | 1,460 | 1,026 | 5,380 | (3,574 | ) | 4,781 | 9,435 | (4,654 | ) | |||||||||||||||||||||||||||
Total revenues | 314,803 | 289,070 | 301,642 | 289,634 | 326,968 | (12,165 | ) | 1,195,149 | 1,190,742 | 4,407 | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 253,663 | 241,763 | 252,336 | 251,243 | 260,874 | (7,211 | ) | 999,005 | 969,596 | 29,409 | ||||||||||||||||||||||||||||
Interest credited | — | — | — | — | 8,126 | (8,126 | ) | — | 9,629 | (9,629 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 17,383 | 14,133 | 17,550 | 14,782 | 19,171 | (1,788 | ) | 63,848 | 63,042 | 806 | ||||||||||||||||||||||||||||
Other operating expenses | 27,931 | 24,659 | 24,922 | 24,725 | 25,938 | 1,993 | 102,237 | 100,065 | 2,172 | |||||||||||||||||||||||||||||
Total benefits and expenses | 298,977 | 280,555 | 294,808 | 290,750 | 314,109 | (15,132 | ) | 1,165,090 | 1,142,332 | 22,758 | ||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | (1,116 | ) | $ | 12,859 | $ | 2,967 | $ | 30,059 | $ | 48,410 | $ | (18,351 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 84.2 | % | 87.7 | % | 88.0 | % | 90.9 | % | 87.0 | % | (2.8 | )% | 87.6 | % | 86.5 | % | 1.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5.8 | % | 5.1 | % | 6.1 | % | 5.3 | % | 6.4 | % | (0.6 | )% | 5.6 | % | 5.6 | % | — | % | ||||||||||||||||||||
Other operating expenses | 9.3 | % | 9.0 | % | 8.7 | % | 8.9 | % | 8.6 | % | 0.7 | % | 9.0 | % | 8.9 | % | 0.1 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (37,351 | ) | $ | (32,564 | ) | $ | (20,223 | ) | $ | (23,009 | ) | $ | (24,499 | ) | $ | (12,852 | ) | $ | (113,147 | ) | $ | (119,234 | ) | $ | 6,087 | ||||||||||||
Income (loss) before income taxes | $ | (1,021 | ) | $ | 157 | $ | 45 | $ | (184 | ) | $ | (1,285 | ) | $ | 264 | $ | (1,003 | ) | $ | (4,152 | ) | $ | 3,149 | |||||||||||||||
Critical illness net premiums | $ | 46,455 | $ | 49,531 | $ | 53,805 | $ | 53,643 | $ | 58,610 | $ | (12,155 | ) | $ | 203,434 | $ | 233,176 | $ | (29,742 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 19 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Traditional Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 301,252 | $ | 275,514 | $ | 286,861 | $ | 276,435 | $ | 299,938 | $ | 1,314 | $ | 1,140,062 | $ | 1,121,540 | $ | 18,522 | ||||||||||||||||||||
Investment income, net of related expenses | 11,745 | 13,067 | 13,321 | 12,168 | 14,123 | (2,378 | ) | 50,301 | 51,370 | (1,069 | ) | |||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | — | — | 7,527 | (7,527 | ) | — | 8,059 | (8,059 | ) | |||||||||||||||||||||||||||
Other revenue | 1,806 | 489 | 1,460 | 1,026 | 5,380 | (3,574 | ) | 4,781 | 9,435 | (4,654 | ) | |||||||||||||||||||||||||||
Total revenues | 314,803 | 289,070 | 301,642 | 289,629 | 326,968 | (12,165 | ) | 1,195,144 | 1,190,404 | 4,740 | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 253,663 | 241,763 | 252,336 | 251,243 | 260,874 | (7,211 | ) | 999,005 | 969,596 | 29,409 | ||||||||||||||||||||||||||||
Interest credited | — | — | — | — | 8,126 | (8,126 | ) | — | 9,629 | (9,629 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 17,383 | 14,133 | 17,550 | 14,782 | 19,171 | (1,788 | ) | 63,848 | 63,042 | 806 | ||||||||||||||||||||||||||||
Other operating expenses | 27,931 | 24,659 | 24,922 | 24,725 | 25,938 | 1,993 | 102,237 | 100,065 | 2,172 | |||||||||||||||||||||||||||||
Total benefits and expenses | 298,977 | 280,555 | 294,808 | 290,750 | 314,109 | (15,132 | ) | 1,165,090 | 1,142,332 | 22,758 | ||||||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | (1,121 | ) | $ | 12,859 | $ | 2,967 | $ | 30,054 | $ | 48,072 | $ | (18,018 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 84.2 | % | 87.7 | % | 88.0 | % | 90.9 | % | 87.0 | % | (2.8 | )% | 87.6 | % | 86.5 | % | 1.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5.8 | % | 5.1 | % | 6.1 | % | 5.3 | % | 6.4 | % | (0.6 | )% | 5.6 | % | 5.6 | % | — | % | ||||||||||||||||||||
Other operating expenses | 9.3 | % | 9.0 | % | 8.7 | % | 8.9 | % | 8.6 | % | 0.7 | % | 9.0 | % | 8.9 | % | 0.1 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (37,351 | ) | $ | (32,564 | ) | $ | (20,223 | ) | $ | (23,009 | ) | $ | (24,499 | ) | $ | (12,852 | ) | $ | (113,147 | ) | $ | (119,234 | ) | $ | 6,087 | ||||||||||||
Operating (loss) income before income taxes | $ | (1,021 | ) | $ | 157 | $ | 46 | $ | (194 | ) | $ | (1,285 | ) | $ | 264 | $ | (1,012 | ) | $ | (4,072 | ) | $ | 3,060 | |||||||||||||||
Critical illness net premiums | $ | 46,455 | $ | 49,531 | $ | 53,805 | $ | 53,643 | $ | 58,610 | $ | (12,155 | ) | $ | 203,434 | $ | 233,176 | $ | (29,742 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 20 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Financial Solutions (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 54,163 | $ | 47,018 | $ | 43,484 | $ | 35,606 | $ | 47,152 | $ | 7,011 | $ | 180,271 | $ | 171,830 | $ | 8,441 | ||||||||||||||||||||
Investment income, net of related expenses | 29,994 | 33,187 | 33,417 | 28,684 | 23,468 | 6,526 | 125,282 | 73,432 | 51,850 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 4,914 | 8,159 | 1,468 | (1,004 | ) | 9,261 | (4,347 | ) | 13,537 | 10,170 | 3,367 | |||||||||||||||||||||||||||
Other revenue | 2,962 | 11,388 | 2,608 | 4,470 | 6,863 | (3,901 | ) | 21,428 | 31,234 | (9,806 | ) | |||||||||||||||||||||||||||
Total revenues | 92,033 | 99,752 | 80,977 | 67,756 | 86,744 | 5,289 | 340,518 | 286,666 | 53,852 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 38,631 | 45,805 | 44,004 | 36,443 | 52,064 | (13,433 | ) | 164,883 | 161,917 | 2,966 | ||||||||||||||||||||||||||||
Interest credited | 4,217 | 5,540 | 2,966 | 408 | — | 4,217 | 13,131 | — | 13,131 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | (220 | ) | (304 | ) | 723 | (193 | ) | (325 | ) | 105 | 6 | (1,100 | ) | 1,106 | ||||||||||||||||||||||||
Other operating expenses | 8,077 | 4,925 | 5,815 | 5,674 | 6,860 | 1,217 | 24,491 | 17,404 | 7,087 | |||||||||||||||||||||||||||||
Total benefits and expenses | 50,705 | 55,966 | 53,508 | 42,332 | 58,599 | (7,894 | ) | 202,511 | 178,221 | 24,290 | ||||||||||||||||||||||||||||
Income before income taxes | $ | 41,328 | $ | 43,786 | $ | 27,469 | $ | 25,424 | $ | 28,145 | $ | 13,183 | $ | 138,007 | $ | 108,445 | $ | 29,562 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (9,059 | ) | $ | (8,262 | ) | $ | (3,127 | ) | $ | (2,022 | ) | $ | (2,062 | ) | $ | (6,997 | ) | $ | (22,470 | ) | $ | (12,562 | ) | $ | (9,908 | ) | |||||||||||
Income before income taxes | $ | (9,274 | ) | $ | (6,193 | ) | $ | (1,991 | ) | $ | (1,924 | ) | $ | (1,807 | ) | $ | (7,467 | ) | $ | (19,382 | ) | $ | (11,272 | ) | $ | (8,110 | ) | |||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Europe, Middle East and Africa Financial Solutions operations includes asset intensive, financial reinsurance, capital motivated and longevity closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 21 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Financial Solutions (1) Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 54,163 | $ | 47,018 | $ | 43,484 | $ | 35,606 | $ | 47,152 | $ | 7,011 | $ | 180,271 | $ | 171,830 | $ | 8,441 | ||||||||||||||||||||
Investment income, net of related expenses | 25,777 | 27,647 | 30,451 | 28,276 | 23,468 | 2,309 | 112,151 | 73,432 | 38,719 | |||||||||||||||||||||||||||||
Other revenue | 3,276 | 9,706 | 2,735 | 3,653 | 6,758 | (3,482 | ) | 19,370 | 31,045 | (11,675 | ) | |||||||||||||||||||||||||||
Total revenues | 83,216 | 84,371 | 76,670 | 67,535 | 77,378 | 5,838 | 311,792 | 276,307 | 35,485 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 38,631 | 45,805 | 44,004 | 36,443 | 52,064 | (13,433 | ) | 164,883 | 161,917 | 2,966 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | (220 | ) | (304 | ) | 723 | (193 | ) | (325 | ) | 105 | 6 | (1,100 | ) | 1,106 | ||||||||||||||||||||||||
Other operating expenses | 8,077 | 4,925 | 5,815 | 5,674 | 6,860 | 1,217 | 24,491 | 17,404 | 7,087 | |||||||||||||||||||||||||||||
Total benefits and expenses | 46,488 | 50,426 | 50,542 | 41,924 | 58,599 | (12,111 | ) | 189,380 | 178,221 | 11,159 | ||||||||||||||||||||||||||||
Operating income before income taxes | $ | 36,728 | $ | 33,945 | $ | 26,128 | $ | 25,611 | $ | 18,779 | $ | 17,949 | $ | 122,412 | $ | 98,086 | $ | 24,326 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (9,059 | ) | $ | (8,262 | ) | $ | (3,127 | ) | $ | (2,022 | ) | $ | (2,062 | ) | $ | (6,997 | ) | $ | (22,470 | ) | $ | (12,562 | ) | $ | (9,908 | ) | |||||||||||
Operating income before income taxes | $ | (8,168 | ) | $ | (4,742 | ) | $ | (1,819 | ) | $ | (1,978 | ) | $ | (1,441 | ) | $ | (6,727 | ) | $ | (16,707 | ) | $ | (10,828 | ) | $ | (5,879 | ) | |||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Europe, Middle East and Africa's Financial Solutions operations includes asset intensive, financial reinsurance, capital motivated and longevity closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 22 | |
Reinsurance Group of America, Incorporated Asia Pacific Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 448,283 | $ | 404,451 | $ | 454,629 | $ | 374,142 | $ | 388,663 | $ | 59,620 | $ | 1,681,505 | $ | 1,551,586 | $ | 129,919 | ||||||||||||||||||||
Investment income, net of related expenses | 21,448 | 21,273 | 20,461 | 19,867 | 20,276 | 1,172 | 83,049 | 80,549 | 2,500 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | — | 14 | 1,706 | (1,706 | ) | 14 | — | 14 | ||||||||||||||||||||||||||||
Other revenue | 2,002 | 1,923 | 2,481 | 176 | 553 | 1,449 | 6,582 | 6,222 | 360 | |||||||||||||||||||||||||||||
Total revenues | 471,733 | 427,647 | 477,571 | 394,199 | 411,198 | 60,535 | 1,771,150 | 1,638,357 | 132,793 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 368,091 | 365,115 | 338,447 | 274,298 | 284,269 | 83,822 | 1,345,951 | 1,208,984 | 136,967 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 46,604 | 4,157 | 67,908 | 44,367 | 49,747 | (3,143 | ) | 163,036 | 187,976 | (24,940 | ) | |||||||||||||||||||||||||||
Other operating expenses | 38,574 | 38,553 | 36,734 | 34,374 | 39,767 | (1,193 | ) | 148,235 | 135,743 | 12,492 | ||||||||||||||||||||||||||||
Total benefits and expenses | 453,269 | 407,825 | 443,089 | 353,039 | 373,783 | 79,486 | 1,657,222 | 1,532,703 | 124,519 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 41,160 | $ | 37,415 | $ | (18,951 | ) | $ | 113,928 | $ | 105,654 | $ | 8,274 | |||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 82.1 | % | 90.3 | % | 74.4 | % | 73.3 | % | 73.1 | % | 9.0 | % | 80.0 | % | 77.9 | % | 2.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 10.4 | % | 1.0 | % | 14.9 | % | 11.9 | % | 12.8 | % | (2.4 | )% | 9.7 | % | 12.1 | % | (2.4 | )% | ||||||||||||||||||||
Other operating expenses | 8.6 | % | 9.5 | % | 8.1 | % | 9.2 | % | 10.2 | % | (1.6 | )% | 8.8 | % | 8.7 | % | 0.1 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 12,575 | $ | 20,095 | $ | (7,741 | ) | $ | (21,627 | ) | $ | (43,034 | ) | $ | 55,609 | $ | 3,302 | $ | (198,173 | ) | $ | 201,475 | ||||||||||||||||
Income before income taxes | $ | 1,143 | $ | 331 | $ | 506 | $ | (2,735 | ) | $ | (4,686 | ) | $ | 5,829 | $ | (755 | ) | $ | (8,034 | ) | $ | 7,279 | ||||||||||||||||
Critical illness net premiums | $ | 85,931 | $ | 100,641 | $ | 113,297 | $ | 98,389 | $ | 81,271 | $ | 4,660 | $ | 398,258 | $ | 312,599 | $ | 85,659 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 23 | |
Reinsurance Group of America, Incorporated Asia Pacific Traditional Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 448,283 | $ | 404,451 | $ | 454,629 | $ | 374,142 | $ | 388,663 | $ | 59,620 | $ | 1,681,505 | $ | 1,551,586 | $ | 129,919 | ||||||||||||||||||||
Investment income, net of related expenses | 21,448 | 21,273 | 20,461 | 19,867 | 20,276 | 1,172 | 83,049 | 80,549 | 2,500 | |||||||||||||||||||||||||||||
Investment related losses, net | — | — | — | (2 | ) | — | — | (2 | ) | — | (2 | ) | ||||||||||||||||||||||||||
Other revenue | 2,002 | 1,923 | 2,481 | 176 | 553 | 1,449 | 6,582 | 6,222 | 360 | |||||||||||||||||||||||||||||
Total revenues | 471,733 | 427,647 | 477,571 | 394,183 | 409,492 | 62,241 | 1,771,134 | 1,638,357 | 132,777 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 368,091 | 365,115 | 338,447 | 274,298 | 284,269 | 83,822 | 1,345,951 | 1,208,984 | 136,967 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 46,604 | 4,157 | 67,908 | 44,367 | 49,747 | (3,143 | ) | 163,036 | 187,976 | (24,940 | ) | |||||||||||||||||||||||||||
Other operating expenses | 38,574 | 38,553 | 36,734 | 34,374 | 39,767 | (1,193 | ) | 148,235 | 135,743 | 12,492 | ||||||||||||||||||||||||||||
Total benefits and expenses | 453,269 | 407,825 | 443,089 | 353,039 | 373,783 | 79,486 | 1,657,222 | 1,532,703 | 124,519 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 41,144 | $ | 35,709 | $ | (17,245 | ) | $ | 113,912 | $ | 105,654 | $ | 8,258 | |||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 82.1 | % | 90.3 | % | 74.4 | % | 73.3 | % | 73.1 | % | 9.0 | % | 80.0 | % | 77.9 | % | 2.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 10.4 | % | 1.0 | % | 14.9 | % | 11.9 | % | 12.8 | % | (2.4 | )% | 9.7 | % | 12.1 | % | (2.4 | )% | ||||||||||||||||||||
Other operating expenses | 8.6 | % | 9.5 | % | 8.1 | % | 9.2 | % | 10.2 | % | (1.6 | )% | 8.8 | % | 8.7 | % | 0.1 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 12,575 | $ | 20,095 | $ | (7,741 | ) | $ | (21,627 | ) | $ | (43,034 | ) | $ | 55,609 | $ | 3,302 | $ | (198,173 | ) | $ | 201,475 | ||||||||||||||||
Operating income before income taxes | $ | 1,144 | $ | 331 | $ | 506 | $ | (2,748 | ) | $ | (4,204 | ) | $ | 5,348 | $ | (767 | ) | $ | (8,034 | ) | $ | 7,267 | ||||||||||||||||
Critical illness net premiums | $ | 85,931 | $ | 100,641 | $ | 113,297 | $ | 98,389 | $ | 81,271 | $ | 4,660 | $ | 398,258 | $ | 312,599 | $ | 85,659 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 24 | |
Reinsurance Group of America, Incorporated Asia Pacific Financial Solutions (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 492 | $ | 743 | $ | (1,493 | ) | $ | 5,686 | $ | 5,487 | $ | (4,995 | ) | $ | 5,428 | $ | 19,474 | $ | (14,046 | ) | |||||||||||||||||
Investment income, net of related expenses | 5,562 | 5,827 | 5,885 | 6,374 | 6,659 | (1,097 | ) | 23,648 | 18,678 | 4,970 | ||||||||||||||||||||||||||||
Investment related gains (losses), net | (4,886 | ) | 6,108 | 6,527 | 1,687 | 671 | (5,557 | ) | 9,436 | (531 | ) | 9,967 | ||||||||||||||||||||||||||
Other revenue | 6,061 | 6,359 | 6,126 | 6,324 | 5,698 | 363 | 24,870 | 18,960 | 5,910 | |||||||||||||||||||||||||||||
Total revenues | 7,229 | 19,037 | 17,045 | 20,071 | 18,515 | (11,286 | ) | 63,382 | 56,581 | 6,801 | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 9,693 | 3,777 | 8,237 | 3,473 | 4,951 | 4,742 | 25,180 | 16,295 | 8,885 | |||||||||||||||||||||||||||||
Interest credited | 3,322 | 3,308 | 3,136 | 3,030 | 3,095 | 227 | 12,796 | 4,471 | 8,325 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1,635 | 1,482 | 1,667 | 1,287 | 1,297 | 338 | 6,071 | 2,554 | 3,517 | |||||||||||||||||||||||||||||
Other operating expenses | 4,545 | 2,921 | 4,078 | 3,728 | 3,705 | 840 | 15,272 | 13,642 | 1,630 | |||||||||||||||||||||||||||||
Total benefits and expenses | 19,195 | 11,488 | 17,118 | 11,518 | 13,048 | 6,147 | 59,319 | 36,962 | 22,357 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (11,966 | ) | $ | 7,549 | $ | (73 | ) | $ | 8,553 | $ | 5,467 | $ | (17,433 | ) | $ | 4,063 | $ | 19,619 | $ | (15,556 | ) | ||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 71 | $ | 60 | $ | (225 | ) | $ | 243 | $ | (373 | ) | $ | 444 | $ | 149 | $ | (2,607 | ) | $ | 2,756 | |||||||||||||||||
Income before income taxes | $ | (464 | ) | $ | 917 | $ | 233 | $ | 778 | $ | (587 | ) | $ | 123 | $ | 1,464 | $ | (2,907 | ) | $ | 4,371 | |||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Asia Pacific Financial Solutions operations includes asset intensive, financial reinsurance, and disabled life closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 25 | |
Reinsurance Group of America, Incorporated Asia Pacific Financial Solutions (1) Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 492 | $ | 743 | $ | (1,493 | ) | $ | 5,686 | $ | 5,487 | $ | (4,995 | ) | $ | 5,428 | $ | 19,474 | $ | (14,046 | ) | |||||||||||||||||
Investment income, net of related expenses | 5,562 | 5,827 | 5,885 | 6,374 | 6,659 | (1,097 | ) | 23,648 | 18,678 | 4,970 | ||||||||||||||||||||||||||||
Investment related gains, net | 960 | 825 | 602 | 576 | 654 | 306 | 2,963 | 2,368 | 595 | |||||||||||||||||||||||||||||
Other revenue | 6,061 | 6,359 | 6,126 | 6,324 | 5,698 | 363 | 24,870 | 18,960 | 5,910 | |||||||||||||||||||||||||||||
Total revenues | 13,075 | 13,754 | 11,120 | 18,960 | 18,498 | (5,423 | ) | 56,909 | 59,480 | (2,571 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 9,693 | 3,777 | 8,237 | 3,473 | 4,951 | 4,742 | 25,180 | 16,295 | 8,885 | |||||||||||||||||||||||||||||
Interest credited | 3,322 | 3,308 | 3,136 | 3,030 | 3,095 | 227 | 12,796 | 4,471 | 8,325 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1,635 | 1,482 | 1,667 | 1,287 | 1,297 | 338 | 6,071 | 2,554 | 3,517 | |||||||||||||||||||||||||||||
Other operating expenses | 4,545 | 2,921 | 4,078 | 3,728 | 3,705 | 840 | 15,272 | 13,642 | 1,630 | |||||||||||||||||||||||||||||
Total benefits and expenses | 19,195 | 11,488 | 17,118 | 11,518 | 13,048 | 6,147 | 59,319 | 36,962 | 22,357 | |||||||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | (6,120 | ) | $ | 2,266 | $ | (5,998 | ) | $ | 7,442 | $ | 5,450 | $ | (11,570 | ) | $ | (2,410 | ) | $ | 22,518 | $ | (24,928 | ) | |||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 71 | $ | 60 | $ | (225 | ) | $ | 243 | $ | (373 | ) | $ | 444 | $ | 149 | $ | (2,607 | ) | $ | 2,756 | |||||||||||||||||
Operating income before income taxes | $ | 100 | $ | 451 | $ | (113 | ) | $ | 323 | $ | (774 | ) | $ | 874 | $ | 761 | $ | (3,558 | ) | $ | 4,319 | |||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Asia Pacific Financial Solutions operations includes asset intensive, financial reinsurance, and disabled life closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 26 | |
Reinsurance Group of America, Incorporated Corporate and Other GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 53 | $ | 72 | $ | 108 | $ | 109 | $ | 112 | $ | (59 | ) | $ | 342 | $ | 565 | $ | (223 | ) | ||||||||||||||||||
Investment income, net of related expenses | 35,468 | 33,478 | 25,190 | 22,921 | 28,355 | 7,113 | 117,057 | 123,450 | (6,393 | ) | ||||||||||||||||||||||||||||
Investment related gains (losses), net | (461 | ) | 12,258 | 32,036 | 7,423 | (34,276 | ) | 33,815 | 51,256 | (65,107 | ) | 116,363 | ||||||||||||||||||||||||||
Other revenue | 706 | 4,893 | 4,653 | 2,049 | 6,665 | (5,959 | ) | 12,301 | 9,987 | 2,314 | ||||||||||||||||||||||||||||
Total revenues | 35,766 | 50,701 | 61,987 | 32,502 | 856 | 34,910 | 180,956 | 68,895 | 112,061 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | (15 | ) | (15 | ) | (6 | ) | 27 | (11 | ) | (4 | ) | (9 | ) | 38 | (47 | ) | ||||||||||||||||||||||
Interest credited | 881 | 622 | 459 | 507 | 369 | 512 | 2,469 | 1,028 | 1,441 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (26,740 | ) | (24,565 | ) | (25,149 | ) | (23,812 | ) | (22,886 | ) | (3,854 | ) | (100,266 | ) | (87,551 | ) | (12,715 | ) | ||||||||||||||||||||
Other operating expenses | 41,187 | 32,414 | 40,975 | 39,978 | 32,878 | 8,309 | 154,554 | 109,017 | 45,537 | |||||||||||||||||||||||||||||
Interest expense | 41,422 | 43,063 | 20,331 | 32,807 | 35,820 | 5,602 | 137,623 | 142,863 | (5,240 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,431 | 6,484 | 6,587 | 6,325 | 6,182 | 249 | 25,827 | 22,644 | 3,183 | |||||||||||||||||||||||||||||
Total benefits and expenses | 63,166 | 58,003 | 43,197 | 55,832 | 52,352 | 10,814 | 220,198 | 188,039 | 32,159 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (27,400 | ) | $ | (7,302 | ) | $ | 18,790 | $ | (23,330 | ) | $ | (51,496 | ) | $ | 24,096 | $ | (39,242 | ) | $ | (119,144 | ) | $ | 79,902 | ||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 401 | $ | 294 | $ | (1,941 | ) | $ | (1,409 | ) | $ | (2,642 | ) | $ | 3,043 | $ | (2,655 | ) | $ | (6,079 | ) | $ | 3,424 | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 27 | |
Reinsurance Group of America, Incorporated Corporate and Other Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 53 | $ | 72 | $ | 108 | $ | 109 | $ | 112 | $ | (59 | ) | $ | 342 | $ | 565 | $ | (223 | ) | ||||||||||||||||||
Investment income, net of related expenses | 35,468 | 33,478 | 25,190 | 22,921 | 28,355 | 7,113 | 117,057 | 123,450 | (6,393 | ) | ||||||||||||||||||||||||||||
Investment related gains, net | 659 | 568 | 496 | 493 | 523 | 136 | 2,216 | 1,949 | 267 | |||||||||||||||||||||||||||||
Other revenue | 681 | 4,870 | 4,636 | 2,035 | 6,650 | (5,969 | ) | 12,222 | 10,058 | 2,164 | ||||||||||||||||||||||||||||
Total revenues | 36,861 | 38,988 | 30,430 | 25,558 | 35,640 | 1,221 | 131,837 | 136,022 | (4,185 | ) | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | (15 | ) | (15 | ) | (6 | ) | 27 | (11 | ) | (4 | ) | (9 | ) | 38 | (47 | ) | ||||||||||||||||||||||
Interest credited | 881 | 622 | 459 | 507 | 369 | 512 | 2,469 | 1,028 | 1,441 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (26,740 | ) | (24,565 | ) | (25,149 | ) | (23,812 | ) | (22,886 | ) | (3,854 | ) | (100,266 | ) | (87,551 | ) | (12,715 | ) | ||||||||||||||||||||
Other operating expenses | 41,187 | 32,414 | 40,975 | 39,978 | 32,878 | 8,309 | 154,554 | 109,017 | 45,537 | |||||||||||||||||||||||||||||
Interest expense | 41,422 | 43,063 | 20,331 | 32,807 | 35,820 | 5,602 | 137,623 | 142,863 | (5,240 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,431 | 6,484 | 6,587 | 6,325 | 6,182 | 249 | 25,827 | 22,644 | 3,183 | |||||||||||||||||||||||||||||
Total benefits and expenses | 63,166 | 58,003 | 43,197 | 55,832 | 52,352 | 10,814 | 220,198 | 188,039 | 32,159 | |||||||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | (26,305 | ) | $ | (19,015 | ) | $ | (12,767 | ) | $ | (30,274 | ) | $ | (16,712 | ) | $ | (9,593 | ) | $ | (88,361 | ) | $ | (52,017 | ) | $ | (36,344 | ) | |||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | $ | 367 | $ | 513 | $ | (442 | ) | $ | (868 | ) | $ | (2,604 | ) | $ | 2,971 | $ | (430 | ) | $ | (5,712 | ) | $ | 5,282 | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 28 | |
Reinsurance Group of America, Incorporated Summary of Segment GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 131,492 | $ | 77,081 | $ | 111,430 | $ | 51,098 | $ | 79,483 | $ | 52,009 | $ | 371,101 | $ | 235,771 | $ | 135,330 | ||||||||||||||||||||
Financial Solutions: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 72,261 | 88,732 | 93,979 | (30,830 | ) | 30,874 | 41,387 | 224,142 | 152,946 | 71,196 | ||||||||||||||||||||||||||||
Financial Reinsurance | 14,447 | 13,982 | 14,875 | 15,934 | 15,936 | (1,489 | ) | 59,238 | 55,017 | 4,221 | ||||||||||||||||||||||||||||
Total U.S. and Latin America | 218,200 | 179,795 | 220,284 | 36,202 | 126,293 | 91,907 | 654,481 | 443,734 | 210,747 | |||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | 37,026 | 34,275 | 43,309 | 20,095 | 44,640 | (7,614 | ) | 134,705 | 124,175 | 10,530 | ||||||||||||||||||||||||||||
Canada Financial Solutions | 4,065 | 1,160 | 2,128 | 592 | 3,420 | 645 | 7,945 | 13,902 | (5,957 | ) | ||||||||||||||||||||||||||||
Total Canada | 41,091 | 35,435 | 45,437 | 20,687 | 48,060 | (6,969 | ) | 142,650 | 138,077 | 4,573 | ||||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 15,826 | 8,515 | 6,834 | (1,116 | ) | 12,859 | 2,967 | 30,059 | 48,410 | (18,351 | ) | |||||||||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions | 41,328 | 43,786 | 27,469 | 25,424 | 28,145 | 13,183 | 138,007 | 108,445 | 29,562 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 57,154 | 52,301 | 34,303 | 24,308 | 41,004 | 16,150 | 168,066 | 156,855 | 11,211 | |||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 18,464 | 19,822 | 34,482 | 41,160 | 37,415 | (18,951 | ) | 113,928 | 105,654 | 8,274 | ||||||||||||||||||||||||||||
Asia Pacific Financial Solutions | (11,966 | ) | 7,549 | (73 | ) | 8,553 | 5,467 | (17,433 | ) | 4,063 | 19,619 | (15,556 | ) | |||||||||||||||||||||||||
Total Asia Pacific | 6,498 | 27,371 | 34,409 | 49,713 | 42,882 | (36,384 | ) | 117,991 | 125,273 | (7,282 | ) | |||||||||||||||||||||||||||
Corporate and Other | (27,400 | ) | (7,302 | ) | 18,790 | (23,330 | ) | (51,496 | ) | 24,096 | (39,242 | ) | (119,144 | ) | 79,902 | |||||||||||||||||||||||
Consolidated Income before Income Taxes | $ | 295,543 | $ | 287,600 | $ | 353,223 | $ | 107,580 | $ | 206,743 | $ | 88,800 | $ | 1,043,946 | $ | 744,795 | $ | 299,151 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 29 | |
Reinsurance Group of America, Incorporated Summary of Segment Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 129,345 | $ | 80,475 | $ | 112,312 | $ | 53,198 | $ | 78,990 | $ | 50,355 | $ | 375,330 | $ | 233,465 | $ | 141,865 | ||||||||||||||||||||
Financial Solutions: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 46,698 | 58,693 | 54,323 | 45,268 | 47,596 | (898 | ) | 204,982 | 199,562 | 5,420 | ||||||||||||||||||||||||||||
Financial Reinsurance | 14,447 | 13,982 | 14,875 | 15,934 | 15,936 | (1,489 | ) | 59,238 | 55,017 | 4,221 | ||||||||||||||||||||||||||||
Total U.S. and Latin America | 190,490 | 153,150 | 181,510 | 114,400 | 142,522 | 47,968 | 639,550 | 488,044 | 151,506 | |||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | 34,754 | 30,624 | 40,907 | 19,364 | 45,086 | (10,332 | ) | 125,649 | 123,811 | 1,838 | ||||||||||||||||||||||||||||
Canada Financial Solutions | 4,065 | 1,160 | 2,128 | 592 | 3,420 | 645 | 7,945 | 13,902 | (5,957 | ) | ||||||||||||||||||||||||||||
Total Canada | 38,819 | 31,784 | 43,035 | 19,956 | 48,506 | (9,687 | ) | 133,594 | 137,713 | (4,119 | ) | |||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 15,826 | 8,515 | 6,834 | (1,121 | ) | 12,859 | 2,967 | 30,054 | 48,072 | (18,018 | ) | |||||||||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions | 36,728 | 33,945 | 26,128 | 25,611 | 18,779 | 17,949 | 122,412 | 98,086 | 24,326 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 52,554 | 42,460 | 32,962 | 24,490 | 31,638 | 20,916 | 152,466 | 146,158 | 6,308 | |||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 18,464 | 19,822 | 34,482 | 41,144 | 35,709 | (17,245 | ) | 113,912 | 105,654 | 8,258 | ||||||||||||||||||||||||||||
Asia Pacific Financial Solutions | (6,120 | ) | 2,266 | (5,998 | ) | 7,442 | 5,450 | (11,570 | ) | (2,410 | ) | 22,518 | (24,928 | ) | ||||||||||||||||||||||||
Total Asia Pacific | 12,344 | 22,088 | 28,484 | 48,586 | 41,159 | (28,815 | ) | 111,502 | 128,172 | (16,670 | ) | |||||||||||||||||||||||||||
Corporate and Other | (26,305 | ) | (19,015 | ) | (12,767 | ) | (30,274 | ) | (16,712 | ) | (9,593 | ) | (88,361 | ) | (52,017 | ) | (36,344 | ) | ||||||||||||||||||||
Consolidated Operating Income before Income Taxes | $ | 267,902 | $ | 230,467 | $ | 273,224 | $ | 177,158 | $ | 247,113 | $ | 20,789 | $ | 948,751 | $ | 848,070 | $ | 100,681 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 30 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Cash and Invested Assets | ||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | ||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 32,093,625 | $ | 33,536,419 | $ | 33,160,976 | $ | 31,148,714 | $ | 29,642,905 | ||||||||||
Mortgage loans on real estate | 3,775,522 | 3,607,700 | 3,377,039 | 3,292,496 | 3,129,951 | |||||||||||||||
Policy loans | 1,427,602 | 1,414,963 | 1,445,410 | 1,451,857 | 1,468,796 | |||||||||||||||
Funds withheld at interest | 5,875,919 | 5,922,656 | 5,899,289 | 5,797,183 | 5,880,203 | |||||||||||||||
Short-term investments | 76,710 | 126,702 | 195,979 | 431,535 | 558,284 | |||||||||||||||
Other invested assets | 1,591,940 | 1,777,065 | 1,682,143 | 1,368,544 | 1,298,120 | |||||||||||||||
Cash and cash equivalents | 1,200,718 | 1,379,693 | 1,034,329 | 1,502,082 | 1,525,275 | |||||||||||||||
Total cash and invested assets | $ | 46,042,036 | $ | 47,765,198 | $ | 46,795,165 | $ | 44,992,411 | $ | 43,503,534 | ||||||||||
Investment Income and Yield Summary | |||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | |||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||||
Average invested assets at amortized cost (1) | $ | 24,621,939 | $ | 24,128,430 | $ | 23,216,459 | $ | 22,379,003 | $ | 21,552,560 | $ | 3,069,379 | $ | 23,188,717 | $ | 20,784,941 | $ | 2,403,776 | |||||||||||||||||||||
Net investment income (1) | $ | 283,484 | $ | 263,111 | $ | 268,747 | $ | 245,299 | $ | 262,660 | $ | 20,824 | $ | 1,060,641 | $ | 1,002,197 | $ | 58,444 | |||||||||||||||||||||
Annualized investment yield (ratio of net investment income to average invested assets at amortized cost) (1) | 4.69 | % | 4.43 | % | 4.71 | % | 4.46 | % | 4.96 | % | (2 | ) | -0.27 | % | 4.57 | % | 4.82 | % | -0.25 | % | |||||||||||||||||||
(1) Excludes spread-related business (e.g. coinsurance of annuities). | |||||||||||||||||||||||||||||||||||||||
(2) Includes the cumulative effective of income related to a funds withheld transaction executed in the fourth quarter of 2015, retroactive to the beginning of the year. | |||||||||||||||||||||||||||||||||||||||
| Page 31 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Fixed Maturity and Equity Securities (Excludes Funds Withheld Portfolios) | |||||||||||||||||||||||
December 31, 2016 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 18,924,711 | $ | 911,618 | $ | 217,245 | $ | 19,619,084 | 61.1 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,561,605 | 1,085,982 | 3,541 | 3,644,046 | 11.4 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 1,258,039 | 33,917 | 13,380 | 1,278,576 | 4.0 | % | (375 | ) | |||||||||||||||
Asset-backed securities | 1,443,822 | 9,350 | 23,828 | 1,429,344 | 4.5 | % | 275 | ||||||||||||||||
Commercial mortgage-backed securities | 1,342,440 | 28,973 | 7,759 | 1,363,654 | 4.2 | % | — | ||||||||||||||||
U.S. government and agencies | 1,518,702 | 12,644 | 63,044 | 1,468,302 | 4.6 | % | — | ||||||||||||||||
State and political subdivisions | 566,761 | 37,499 | 12,464 | 591,796 | 1.8 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,595,707 | 123,054 | 19,938 | 2,698,823 | 8.4 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 30,211,787 | $ | 2,243,037 | $ | 361,199 | $ | 32,093,625 | 100.0 | % | $ | (100 | ) | ||||||||||
Non-redeemable preferred stock | $ | 55,812 | $ | 1,648 | $ | 6,337 | $ | 51,123 | 18.6 | % | |||||||||||||
Other equity securities | 229,767 | 1,792 | 7,321 | 224,238 | 81.4 | % | |||||||||||||||||
Total equity securities | $ | 285,579 | $ | 3,440 | $ | 13,658 | $ | 275,361 | 100.0 | % | |||||||||||||
December 31, 2015 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 17,575,507 | $ | 599,718 | $ | 467,069 | $ | 17,708,156 | 59.7 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,469,009 | 1,110,282 | 2,532 | 3,576,759 | 12.1 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 1,277,998 | 45,152 | 11,673 | 1,311,477 | 4.4 | % | (300 | ) | |||||||||||||||
Asset-backed securities | 1,219,000 | 12,052 | 18,376 | 1,212,676 | 4.1 | % | 354 | ||||||||||||||||
Commercial mortgage-backed securities | 1,456,848 | 37,407 | 11,168 | 1,483,087 | 5.0 | % | (1,609 | ) | |||||||||||||||
U.S. government and agencies | 1,423,791 | 15,586 | 57,718 | 1,381,659 | 4.7 | % | — | ||||||||||||||||
State and political subdivisions | 480,067 | 40,014 | 9,067 | 511,014 | 1.7 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,420,757 | 78,964 | 41,644 | 2,458,077 | 8.3 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 28,322,977 | $ | 1,939,175 | $ | 619,247 | $ | 29,642,905 | 100.0 | % | $ | (1,555 | ) | ||||||||||
Non-redeemable preferred stock | $ | 85,645 | $ | 7,837 | $ | 5,962 | $ | 87,520 | 69.5 | % | |||||||||||||
Other equity securities | 40,584 | — | 2,242 | 38,342 | 30.5 | % | |||||||||||||||||
Total equity securities | $ | 126,229 | $ | 7,837 | $ | 8,204 | $ | 125,862 | 100.0 | % | |||||||||||||
| Page 32 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Corporate Fixed Maturities Securities by Sector (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | % of Total | Average Credit Ratings (1) | Amortized Cost | Estimated Fair Value | % of Total | Average Credit Ratings (1) | |||||||||||||||||||
Financial institutions | ||||||||||||||||||||||||||
Banking | $ | 4,167,029 | $ | 4,255,932 | 21.9 | % | A- | $ | 3,557,406 | $ | 3,641,125 | 20.5 | % | A- | ||||||||||||
Brokerage/asset managers/exchanges | 403,014 | 413,699 | 2.1 | % | A | 315,848 | 327,477 | 1.8 | % | A | ||||||||||||||||
Finance companies | 120,782 | 127,327 | 0.6 | % | A- | 68,996 | 70,947 | 0.4 | % | BBB- | ||||||||||||||||
Insurance | 1,314,077 | 1,353,008 | 6.9 | % | A- | 877,691 | 908,752 | 5.1 | % | A- | ||||||||||||||||
REITs | 582,157 | 598,366 | 3.0 | % | BBB+ | 524,424 | 540,120 | 3.1 | % | BBB+ | ||||||||||||||||
Other finance | 138,140 | 140,636 | 0.7 | % | A- | 64,426 | 66,623 | 0.4 | % | A- | ||||||||||||||||
Total financial institutions | $ | 6,725,199 | $ | 6,888,968 | 35.2 | % | $ | 5,408,791 | $ | 5,555,044 | 31.3 | % | ||||||||||||||
Industrials | ||||||||||||||||||||||||||
Basic | $ | 887,179 | $ | 923,839 | 4.7 | % | BBB | $ | 937,498 | $ | 894,466 | 5.1 | % | BBB | ||||||||||||
Capital goods | 998,749 | 1,027,098 | 5.2 | % | BBB+ | 1,090,670 | 1,091,523 | 6.2 | % | BBB+ | ||||||||||||||||
Communications | 1,841,904 | 1,928,261 | 9.8 | % | BBB | 1,891,983 | 1,912,375 | 10.8 | % | BBB | ||||||||||||||||
Consumer cyclical | 1,081,091 | 1,116,933 | 5.7 | % | BBB+ | 1,015,183 | 1,028,521 | 5.8 | % | BBB+ | ||||||||||||||||
Consumer noncyclical | 1,957,052 | 2,050,927 | 10.5 | % | A- | 1,762,018 | 1,805,347 | 10.2 | % | A- | ||||||||||||||||
Energy | 1,867,072 | 1,941,301 | 9.9 | % | BBB+ | 2,064,824 | 1,922,366 | 10.9 | % | BBB+ | ||||||||||||||||
Technology | 644,474 | 660,200 | 3.4 | % | A | 569,174 | 574,280 | 3.2 | % | A- | ||||||||||||||||
Transportation | 854,681 | 887,911 | 4.5 | % | A- | 763,055 | 777,939 | 4.4 | % | A- | ||||||||||||||||
Other industrial | 96,611 | 103,143 | 0.5 | % | A- | 117,021 | 123,100 | 0.7 | % | BBB+ | ||||||||||||||||
Total industrials | $ | 10,228,813 | $ | 10,639,613 | 54.2 | % | $ | 10,211,426 | $ | 10,129,917 | 57.3 | % | ||||||||||||||
Utilities | ||||||||||||||||||||||||||
Electric | $ | 1,432,641 | $ | 1,498,919 | 7.6 | % | A- | $ | 1,395,335 | $ | 1,444,368 | 8.2 | % | BBB+ | ||||||||||||
Natural gas | 316,447 | 338,253 | 1.7 | % | A- | 315,826 | 323,206 | 1.8 | % | A- | ||||||||||||||||
Other utility | 221,611 | 253,331 | 1.3 | % | A- | 244,129 | 255,621 | 1.4 | % | A- | ||||||||||||||||
Total utilities | $ | 1,970,699 | $ | 2,090,503 | 10.6 | % | $ | 1,955,290 | $ | 2,023,195 | 11.4 | % | ||||||||||||||
Total | $ | 18,924,711 | $ | 19,619,084 | 100.0 | % | BBB+ | $ | 17,575,507 | $ | 17,708,156 | 100.0 | % | BBB+ | ||||||||||||
(1) The Average Credit Rating designations are based on the weighted average ratings from nationally recognized statistical rating organizations (NRSRO), primarily those assigned by S&P. In instances | ||||||||||||||||||||||||||
where a S&P rating is not available, the Company will reference the rating provided by Moody’s, and in the absence of both the Company will assign equivalent ratings based on information from the National | ||||||||||||||||||||||||||
Association of Insurance Commissioners (NAIC). | ||||||||||||||||||||||||||
| Page 33 | |
Reinsurance Group of America, Incorporated
Investments
(USD thousands)
Ratings of Fixed Maturity Securities (Excludes Funds Withheld Portfolios) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
NAIC Designation (1) | Rating Agency Designation (2) | Amortized Cost | Estimated Fair Value | % of Total | Amortized Cost | Estimated Fair Value | % of Total | Amortized Cost | Estimated Fair Value | % of Total | Amortized Cost | Estimated Fair Value | % of Total | Amortized Cost | Estimated Fair Value | % of Total | |||||||||||||||||||||||||||||||||||||||||
1 | AAA/AA/A | $ | 19,813,653 | $ | 21,369,081 | 66.5 | % | $ | 19,794,556 | $ | 22,594,066 | 67.3 | % | $ | 19,755,011 | $ | 22,392,311 | 67.5 | % | $ | 18,511,837 | $ | 20,516,462 | 65.9 | % | $ | 17,801,017 | $ | 19,231,535 | 64.8 | % | ||||||||||||||||||||||||||
2 | BBB | 8,834,469 | 9,162,483 | 28.5 | % | 8,660,225 | 9,296,652 | 27.7 | % | 8,679,819 | 9,130,971 | 27.5 | % | 8,813,991 | 9,005,192 | 28.9 | % | 8,838,444 | 8,830,172 | 29.8 | % | ||||||||||||||||||||||||||||||||||||
3 | BB | 944,839 | 955,735 | 3.0 | % | 1,010,694 | 1,027,001 | 3.1 | % | 1,012,092 | 1,018,629 | 3.1 | % | 1,096,165 | 1,057,763 | 3.4 | % | 1,054,449 | 1,001,614 | 3.4 | % | ||||||||||||||||||||||||||||||||||||
4 | B | 414,087 | 411,138 | 1.3 | % | 451,456 | 441,887 | 1.3 | % | 456,457 | 431,649 | 1.3 | % | 402,872 | 372,795 | 1.2 | % | 399,417 | 359,591 | 1.2 | % | ||||||||||||||||||||||||||||||||||||
5 | CCC | 187,744 | 177,481 | 0.6 | % | 157,857 | 151,182 | 0.5 | % | 143,675 | 135,927 | 0.4 | % | 178,537 | 165,491 | 0.5 | % | 207,351 | 197,498 | 0.7 | % | ||||||||||||||||||||||||||||||||||||
6 | In or near default | 16,995 | 17,707 | 0.1 | % | 23,108 | 25,631 | 0.1 | % | 29,830 | 51,489 | 0.2 | % | 31,872 | 31,011 | 0.1 | % | 22,299 | 22,495 | 0.1 | % | ||||||||||||||||||||||||||||||||||||
Total | $ | 30,211,787 | $ | 32,093,625 | 100.0 | % | $ | 30,097,896 | $ | 33,536,419 | 100.0 | % | $ | 30,076,884 | $ | 33,160,976 | 100.0 | % | $ | 29,035,274 | $ | 31,148,714 | 100.0 | % | $ | 28,322,977 | $ | 29,642,905 | 100.0 | % | |||||||||||||||||||||||||||
(1) Structured securities held by the Company’s insurance subsidiaries that maintain the NAIC statutory basis of accounting that meet the definition of SSAP No. 43R utilize the NAIC rating methodology. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All other securities will continue to utilize the NRSRO ratings, as available, or equivalent rating based on information from the NAIC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) The Rating Agency Designation includes all “+” or “-” at that rating level (e. g. ‘BBB’ includes ‘BBB+’, ‘BBB’, and ‘BBB-’). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Structured Fixed Maturity Securities | ||||||||||||||||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | |||||||||||||||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||||||
Agency | $ | 579,686 | $ | 602,549 | $ | 590,881 | $ | 642,041 | $ | 601,728 | $ | 659,526 | $ | 593,662 | $ | 642,617 | $ | 602,524 | $ | 634,077 | ||||||||||||||||||||
Non-agency | 678,353 | 676,027 | 656,796 | 669,651 | 623,990 | 633,252 | 737,232 | 738,280 | 675,474 | 677,400 | ||||||||||||||||||||||||||||||
Total residential mortgage-backed securities | 1,258,039 | 1,278,576 | 1,247,677 | 1,311,692 | 1,225,718 | 1,292,778 | 1,330,894 | 1,380,897 | 1,277,998 | 1,311,477 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,342,440 | 1,363,654 | 1,402,249 | 1,475,033 | 1,441,091 | 1,507,693 | 1,466,500 | 1,508,183 | 1,456,848 | 1,483,087 | ||||||||||||||||||||||||||||||
Asset-backed securities | 1,443,822 | 1,429,344 | 1,388,263 | 1,382,574 | 1,377,736 | 1,356,677 | 1,319,616 | 1,289,381 | 1,219,000 | 1,212,676 | ||||||||||||||||||||||||||||||
Total | $ | 4,044,301 | $ | 4,071,574 | $ | 4,038,189 | $ | 4,169,299 | $ | 4,044,545 | $ | 4,157,148 | $ | 4,117,010 | $ | 4,178,461 | $ | 3,953,846 | $ | 4,007,240 | ||||||||||||||||||||
| Page 34 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Gross Unrealized Losses Aging Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||
Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | ||||||||||||||||||||||||||
Less than 20% | $ | 328,691 | 87.7 | % | $ | 85,446 | 62.2 | % | $ | 148,844 | 74.9 | % | $ | 272,450 | 70.5 | % | $ | 458,676 | 73.1 | % | |||||||||||||||
20% or more for less than six months | 18,733 | 5.0 | % | 12,551 | 9.1 | % | 7,248 | 3.7 | % | 68,067 | 17.6 | % | 140,568 | 22.4 | % | ||||||||||||||||||||
20% or more for six months or greater | 13,775 | 3.7 | % | 32,286 | 23.5 | % | 34,078 | 17.2 | % | 36,949 | 9.6 | % | 20,003 | 3.2 | % | ||||||||||||||||||||
Total | $ | 361,199 | 96.4 | % | $ | 130,283 | 94.8 | % | $ | 190,170 | 95.8 | % | $ | 377,466 | 97.7 | % | $ | 619,247 | 98.7 | % | |||||||||||||||
Equity Securities | |||||||||||||||||||||||||||||||||||
December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||
Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | ||||||||||||||||||||||||||
Less than 20% | $ | 9,140 | 2.4 | % | $ | 2,588 | 1.9 | % | $ | 1,794 | 0.9 | % | $ | 2,678 | 0.7 | % | $ | 4,433 | 0.7 | % | |||||||||||||||
20% or more for less than six months | 705 | 0.2 | % | — | 0.0 | % | 1,685 | 0.8 | % | 1,672 | 0.4 | % | 1,927 | 0.3 | % | ||||||||||||||||||||
20% or more for six months or greater | 3,813 | 1.0 | % | 4,472 | 3.3 | % | 4,903 | 2.5 | % | 4,714 | 1.2 | % | 1,844 | 0.3 | % | ||||||||||||||||||||
Total | $ | 13,658 | 3.6 | % | $ | 7,060 | 5.2 | % | $ | 8,382 | 4.2 | % | $ | 9,064 | 2.3 | % | $ | 8,204 | 1.3 | % | |||||||||||||||
| Page 35 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Fixed Maturities and Equity Securities Below Amortized Cost (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||
As of December 31, 2016 | ||||||||||||||||||||||||
Less than 12 months | Equal to or greater than 12 months | Total | ||||||||||||||||||||||
Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | |||||||||||||||||||
Investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 4,661,706 | $ | 124,444 | $ | 549,273 | $ | 43,282 | $ | 5,210,979 | $ | 167,726 | ||||||||||||
Canadian and Canadian provincial governments | 101,578 | 3,541 | — | — | 101,578 | 3,541 | ||||||||||||||||||
Residential mortgage-backed securities | 490,473 | 9,733 | 112,216 | 3,635 | 602,689 | 13,368 | ||||||||||||||||||
Asset-backed securities | 563,259 | 12,010 | 257,166 | 9,653 | 820,425 | 21,663 | ||||||||||||||||||
Commercial mortgage-backed securities | 368,465 | 6,858 | 10,853 | 166 | 379,318 | 7,024 | ||||||||||||||||||
U.S. government and agencies | 1,056,101 | 63,044 | — | — | 1,056,101 | 63,044 | ||||||||||||||||||
State and political subdivisions | 187,194 | 9,396 | 13,635 | 3,068 | 200,829 | 12,464 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 524,236 | 13,372 | 51,097 | 2,981 | 575,333 | 16,353 | ||||||||||||||||||
Total investment grade securities | $ | 7,953,012 | $ | 242,398 | $ | 994,240 | $ | 62,785 | $ | 8,947,252 | $ | 305,183 | ||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 330,757 | $ | 7,914 | $ | 163,152 | $ | 41,605 | $ | 493,909 | $ | 49,519 | ||||||||||||
Residential mortgage-backed securities | — | — | 412 | 12 | 412 | 12 | ||||||||||||||||||
Asset-backed securities | 5,904 | 700 | 12,581 | 1,465 | 18,485 | 2,165 | ||||||||||||||||||
Commercial mortgage-backed securities | 5,815 | 735 | — | — | 5,815 | 735 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 32,355 | 1,258 | 39,763 | 2,327 | 72,118 | 3,585 | ||||||||||||||||||
Total below investment grade securities | 374,831 | 10,607 | 215,908 | 45,409 | 590,739 | 56,016 | ||||||||||||||||||
Total fixed maturity securities | $ | 8,327,843 | $ | 253,005 | $ | 1,210,148 | $ | 108,194 | $ | 9,537,991 | $ | 361,199 | ||||||||||||
Equity securities: | ||||||||||||||||||||||||
Non-redeemable preferred stock | $ | 10,831 | $ | 831 | $ | 21,879 | $ | 5,506 | $ | 32,710 | $ | 6,337 | ||||||||||||
Other equity securities | 202,068 | 7,020 | 6,751 | 301 | 208,819 | 7,321 | ||||||||||||||||||
Total equity securities | $ | 212,899 | $ | 7,851 | $ | 28,630 | $ | 5,807 | $ | 241,529 | $ | 13,658 | ||||||||||||
As of December 31, 2015 | ||||||||||||||||||||||||
Less than 12 months | Equal to or greater than 12 months | Total | ||||||||||||||||||||||
Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | |||||||||||||||||||
Investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 6,388,148 | $ | 323,961 | $ | 294,755 | $ | 40,861 | $ | 6,682,903 | $ | 364,822 | ||||||||||||
Canadian and Canadian provincial governments | 122,746 | 2,532 | — | — | 122,746 | 2,532 | ||||||||||||||||||
Residential mortgage-backed securities | 452,297 | 7,036 | 82,314 | 4,057 | 534,611 | 11,093 | ||||||||||||||||||
Asset-backed securities | 581,701 | 9,825 | 199,298 | 7,100 | 780,999 | 16,925 | ||||||||||||||||||
Commercial mortgage-backed securities | 514,877 | 9,806 | 31,177 | 997 | 546,054 | 10,803 | ||||||||||||||||||
U.S. government and agencies | 1,010,387 | 57,718 | — | — | 1,010,387 | 57,718 | ||||||||||||||||||
State and political subdivisions | 157,837 | 5,349 | 13,016 | 3,718 | 170,853 | 9,067 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 702,962 | 18,279 | 38,379 | 4,206 | 741,341 | 22,485 | ||||||||||||||||||
Total investment grade securities | $ | 9,930,955 | $ | 434,506 | $ | 658,939 | $ | 60,939 | $ | 10,589,894 | $ | 495,445 | ||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 554,688 | $ | 71,171 | $ | 114,427 | $ | 31,076 | $ | 669,115 | $ | 102,247 | ||||||||||||
Residential mortgage-backed securities | 22,646 | 282 | 7,679 | 298 | 30,325 | 580 | ||||||||||||||||||
Asset-backed securities | 6,772 | 201 | 9,335 | 1,250 | 16,107 | 1,451 | ||||||||||||||||||
Commercial mortgage-backed securities | 3,253 | 248 | 767 | 117 | 4,020 | 365 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 60,668 | 7,356 | 31,693 | 11,803 | 92,361 | 19,159 | ||||||||||||||||||
Total below investment grade securities | 648,027 | 79,258 | 163,901 | 44,544 | 811,928 | 123,802 | ||||||||||||||||||
Total fixed maturity securities | $ | 10,578,982 | $ | 513,764 | $ | 822,840 | $ | 105,483 | $ | 11,401,822 | $ | 619,247 | ||||||||||||
Equity securities: | ||||||||||||||||||||||||
Non-redeemable preferred stock | $ | 12,331 | $ | 2,175 | $ | 12,191 | $ | 3,787 | $ | 24,522 | $ | 5,962 | ||||||||||||
Other equity securities | 38,327 | 2,242 | — | — | 38,327 | 2,242 | ||||||||||||||||||
Total equity securities | $ | 50,658 | $ | 4,417 | $ | 12,191 | $ | 3,787 | $ | 62,849 | $ | 8,204 | ||||||||||||
| Page 36 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Consolidated Investment Related Gains and Losses | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
Fixed maturity and equity securities avail. for sale: | ||||||||||||||||||||||||||||||||||||||
Other-than-temporary impairment losses on fixed maturities | $ | (4,142 | ) | $ | — | $ | (846 | ) | $ | (33,817 | ) | $ | (27,605 | ) | $ | 23,463 | $ | (38,805 | ) | $ | (57,380 | ) | $ | 18,575 | ||||||||||||||
Portion of loss recognized in accumulated other | ||||||||||||||||||||||||||||||||||||||
comprehensive income (before taxes) | 74 | — | — | — | — | 74 | 74 | — | 74 | |||||||||||||||||||||||||||||
Net other-than-temporary impairment losses on fixed | ||||||||||||||||||||||||||||||||||||||
maturities recognized in earnings | (4,068 | ) | — | (846 | ) | (33,817 | ) | (27,605 | ) | 23,537 | (38,731 | ) | (57,380 | ) | 18,649 | |||||||||||||||||||||||
Gain on investment activity | 27,217 | 46,346 | 53,615 | 27,192 | 20,077 | 7,140 | 154,370 | 73,079 | 81,291 | |||||||||||||||||||||||||||||
Loss on investment activity | (6,568 | ) | (9,054 | ) | (22,556 | ) | (11,787 | ) | (21,636 | ) | 15,068 | (49,965 | ) | (71,893 | ) | 21,928 | ||||||||||||||||||||||
Net gains (losses) on fixed maturity & equity securities | ||||||||||||||||||||||||||||||||||||||
available for sale | 16,581 | 37,292 | 30,213 | (18,412 | ) | (29,164 | ) | 45,745 | 65,674 | (56,194 | ) | 121,868 | ||||||||||||||||||||||||||
Other impairment losses and change in mortgage loan provision | (8,895 | ) | (262 | ) | 211 | (2,060 | ) | (2,292 | ) | (6,603 | ) | (11,006 | ) | (6,953 | ) | (4,053 | ) | |||||||||||||||||||||
Other non-derivative gaines (losses), net | 4,987 | 4,754 | 5,123 | 4,057 | 11,824 | (6,837 | ) | 18,921 | 28,169 | (9,248 | ) | |||||||||||||||||||||||||||
Free-standing derivatives: | ||||||||||||||||||||||||||||||||||||||
Credit default swaps | 4,564 | 6,672 | 3,518 | 3,346 | 1,253 | 3,311 | 18,100 | (4,683 | ) | 22,783 | ||||||||||||||||||||||||||||
Interest rate swaps - non-hedged | (100,500 | ) | 4,122 | 41,500 | 62,527 | (9,271 | ) | (91,229 | ) | 7,649 | 20,358 | (12,709 | ) | |||||||||||||||||||||||||
Interest rate swaps - hedged | — | — | — | — | — | — | — | 7 | (7 | ) | ||||||||||||||||||||||||||||
Foreign currency swaps - hedged (1) | 5,766 | 1,606 | (2,395 | ) | (4,562 | ) | 2,983 | 2,783 | 415 | 848 | (433 | ) | ||||||||||||||||||||||||||
Futures | (9,957 | ) | (11,677 | ) | (7,557 | ) | (11,051 | ) | (6,822 | ) | (3,135 | ) | (40,242 | ) | 319 | (40,561 | ) | |||||||||||||||||||||
CPI swaps | 223 | 76 | (520 | ) | (180 | ) | (55 | ) | 278 | (401 | ) | (208 | ) | (193 | ) | |||||||||||||||||||||||
Equity options | (8,694 | ) | (13,648 | ) | (3,225 | ) | (2,703 | ) | (21,376 | ) | 12,682 | (28,270 | ) | (16,899 | ) | (11,371 | ) | |||||||||||||||||||||
Currency forwards | (4,954 | ) | 507 | 3,577 | 2,500 | (214 | ) | (4,740 | ) | 1,630 | (1,160 | ) | 2,790 | |||||||||||||||||||||||||
Bond forwards | (225 | ) | 116 | (1,010 | ) | 841 | (911 | ) | 686 | (278 | ) | 354 | (632 | ) | ||||||||||||||||||||||||
Interest rate options | — | — | — | — | — | — | — | 3,276 | (3,276 | ) | ||||||||||||||||||||||||||||
Total free-standing derivatives | (113,777 | ) | (12,226 | ) | 33,888 | 50,718 | (34,413 | ) | (79,364 | ) | (41,397 | ) | 2,212 | (43,609 | ) | |||||||||||||||||||||||
Embedded derivatives: | ||||||||||||||||||||||||||||||||||||||
Modified coinsurance and funds withheld treaties | 20,374 | 49,078 | 76,966 | (92,249 | ) | (27,201 | ) | 47,575 | 54,169 | (98,793 | ) | 152,962 | ||||||||||||||||||||||||||
GMXB | 90,923 | 7,988 | (28,137 | ) | (62,940 | ) | 36,437 | 54,486 | 7,834 | (33,191 | ) | 41,025 | ||||||||||||||||||||||||||
Total embedded derivatives | 111,297 | 57,066 | 48,829 | (155,189 | ) | 9,236 | 102,061 | 62,003 | (131,984 | ) | 193,987 | |||||||||||||||||||||||||||
Net gain (loss) on total derivatives | (2,480 | ) | 44,840 | 82,717 | (104,471 | ) | (25,177 | ) | 22,697 | 20,606 | (129,772 | ) | 150,378 | |||||||||||||||||||||||||
Total investment related gains (losses), net | $ | 10,193 | $ | 86,624 | $ | 118,264 | $ | (120,886 | ) | $ | (44,809 | ) | $ | 55,002 | $ | 94,195 | $ | (164,750 | ) | $ | 258,945 | |||||||||||||||||
(1) The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net gains (losses) on total derivatives. | ||||||||||||||||||||||||||||||||||||||
| Page 37 | |
Appendix | ||||
Reconciliations of GAAP Income Statements to Operating Income Statements | ||||
| Page 38 | |
Reinsurance Group of America, Incorporated Reconciliation of GAAP Income Statements to Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
U.S. & Latin America Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 131,492 | $ | 77,081 | $ | 111,430 | $ | 51,098 | $ | 79,483 | $ | 52,009 | $ | 371,101 | $ | 235,771 | $ | 135,330 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (336 | ) | (69 | ) | 1 | 65 | 203 | (539 | ) | (339 | ) | 201 | (540 | ) | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (1,811 | ) | 3,463 | 881 | 2,035 | (696 | ) | (1,115 | ) | 4,568 | (2,507 | ) | 7,075 | |||||||||||||||||||||||||
Operating income before income taxes | $ | 129,345 | $ | 80,475 | $ | 112,312 | $ | 53,198 | $ | 78,990 | $ | 50,355 | $ | 375,330 | $ | 233,465 | $ | 141,865 | ||||||||||||||||||||
U.S. & Latin America Asset Intensive | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 72,261 | $ | 88,732 | $ | 93,979 | $ | (30,830 | ) | $ | 30,874 | $ | 41,387 | $ | 224,142 | $ | 152,946 | $ | 71,196 | |||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | 103,778 | 867 | (27,119 | ) | (24,603 | ) | 39,757 | 64,021 | 52,923 | (16,009 | ) | 68,932 | ||||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (18,563 | ) | (52,541 | ) | (77,847 | ) | 90,214 | 27,897 | (46,460 | ) | (58,737 | ) | 101,300 | (160,037 | ) | |||||||||||||||||||||||
GMXB embedded derivatives (1) | (90,923 | ) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | (54,486 | ) | (7,834 | ) | 33,191 | (41,025 | ) | |||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (7,516 | ) | (2,295 | ) | (10,304 | ) | (4,624 | ) | 59 | (7,575 | ) | (24,739 | ) | (10,059 | ) | (14,680 | ) | |||||||||||||||||||||
EIA embedded derivatives - interest credited | (39,964 | ) | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (38,552 | ) | (28,137 | ) | (12,582 | ) | (15,555 | ) | ||||||||||||||||||||||
DAC offset, net | 27,625 | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | 40,767 | 47,364 | (49,225 | ) | 96,589 | ||||||||||||||||||||||||||
Operating income before income taxes | $ | 46,698 | $ | 58,693 | $ | 54,323 | $ | 45,268 | $ | 47,596 | $ | (898 | ) | $ | 204,982 | $ | 199,562 | $ | 5,420 | |||||||||||||||||||
U.S. & Latin America Financial Reinsurance | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | (1,489 | ) | $ | 59,238 | $ | 55,017 | $ | 4,221 | |||||||||||||||||||
Operating income before income taxes | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | (1,489 | ) | $ | 59,238 | $ | 55,017 | $ | 4,221 | |||||||||||||||||||
Total U.S. & Latin America | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 218,200 | $ | 179,795 | $ | 220,284 | $ | 36,202 | $ | 126,293 | $ | 91,907 | $ | 654,481 | $ | 443,734 | $ | 210,747 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | 103,442 | 798 | (27,118 | ) | (24,538 | ) | 39,960 | 63,482 | 52,584 | (15,808 | ) | 68,392 | ||||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (20,374 | ) | (49,078 | ) | (76,966 | ) | 92,249 | 27,201 | (47,575 | ) | (54,169 | ) | 98,793 | (152,962 | ) | |||||||||||||||||||||||
GMXB embedded derivatives (1) | (90,923 | ) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | (54,486 | ) | (7,834 | ) | 33,191 | (41,025 | ) | |||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (7,516 | ) | (2,295 | ) | (10,304 | ) | (4,624 | ) | 59 | (7,575 | ) | (24,739 | ) | (10,059 | ) | (14,680 | ) | |||||||||||||||||||||
EIA embedded derivatives - interest credited | (39,964 | ) | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (38,552 | ) | (28,137 | ) | (12,582 | ) | (15,555 | ) | ||||||||||||||||||||||
DAC offset, net | 27,625 | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | 40,767 | 47,364 | (49,225 | ) | 96,589 | ||||||||||||||||||||||||||
Operating income before income taxes | $ | 190,490 | $ | 153,150 | $ | 181,510 | $ | 114,400 | $ | 142,522 | $ | 47,968 | $ | 639,550 | $ | 488,044 | $ | 151,506 | ||||||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 39 | |
Reinsurance Group of America, Incorporated Reconciliation of GAAP Income Statements to Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 37,026 | $ | 34,275 | $ | 43,309 | $ | 20,095 | $ | 44,640 | $ | (7,614 | ) | $ | 134,705 | $ | 124,175 | $ | 10,530 | |||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (1,550 | ) | (2,624 | ) | (1,049 | ) | (372 | ) | 259 | (1,809 | ) | (5,595 | ) | 5,947 | (11,542 | ) | ||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (722 | ) | (1,027 | ) | (1,353 | ) | (359 | ) | 187 | (909 | ) | (3,461 | ) | (6,311 | ) | 2,850 | ||||||||||||||||||||||
Operating income before income taxes | $ | 34,754 | $ | 30,624 | $ | 40,907 | $ | 19,364 | $ | 45,086 | $ | (10,332 | ) | $ | 125,649 | $ | 123,811 | $ | 1,838 | |||||||||||||||||||
Canada Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 645 | $ | 7,945 | $ | 13,902 | $ | (5,957 | ) | |||||||||||||||||||
Operating income before income taxes | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 645 | $ | 7,945 | $ | 13,902 | $ | (5,957 | ) | |||||||||||||||||||
Europe, Middle East and Africa Traditional | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | (1,116 | ) | $ | 12,859 | $ | 2,967 | $ | 30,059 | $ | 48,410 | $ | (18,351 | ) | ||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | — | — | — | (5 | ) | — | — | (5 | ) | (338 | ) | 333 | ||||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | (1,121 | ) | $ | 12,859 | $ | 2,967 | $ | 30,054 | $ | 48,072 | $ | (18,018 | ) | ||||||||||||||||||
Europe, Middle East and Africa Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 41,328 | $ | 43,786 | $ | 27,469 | $ | 25,424 | $ | 28,145 | $ | 13,183 | $ | 138,007 | $ | 108,445 | $ | 29,562 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (4,914 | ) | (8,159 | ) | (1,468 | ) | 1,004 | (9,261 | ) | 4,347 | (13,537 | ) | (10,170 | ) | (3,367 | ) | ||||||||||||||||||||||
Investment income on unit-linked variable annuities | (4,217 | ) | (5,540 | ) | (2,966 | ) | (408 | ) | — | (4,217 | ) | (13,131 | ) | — | (13,131 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 4,217 | 5,540 | 2,966 | 408 | — | 4,217 | 13,131 | — | 13,131 | |||||||||||||||||||||||||||||
Non-investment derivatives | 314 | (1,682 | ) | 127 | (817 | ) | (105 | ) | 419 | (2,058 | ) | (189 | ) | (1,869 | ) | |||||||||||||||||||||||
Operating income before income taxes | $ | 36,728 | $ | 33,945 | $ | 26,128 | $ | 25,611 | $ | 18,779 | $ | 17,949 | $ | 122,412 | $ | 98,086 | $ | 24,326 | ||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 41,160 | $ | 37,415 | $ | (18,951 | ) | $ | 113,928 | $ | 105,654 | $ | 8,274 | |||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | — | — | — | (16 | ) | (1,706 | ) | 1,706 | (16 | ) | — | (16 | ) | |||||||||||||||||||||||||
Operating income before income taxes | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 41,144 | $ | 35,709 | $ | (17,245 | ) | $ | 113,912 | $ | 105,654 | $ | 8,258 | |||||||||||||||||||
Asia Pacific Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (11,966 | ) | $ | 7,549 | $ | (73 | ) | $ | 8,553 | $ | 5,467 | $ | (17,433 | ) | $ | 4,063 | $ | 19,619 | $ | (15,556 | ) | ||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | 5,846 | (5,283 | ) | (5,925 | ) | (1,111 | ) | (17 | ) | 5,863 | (6,473 | ) | 2,899 | (9,372 | ) | |||||||||||||||||||||||
Operating income (loss) before income taxes | $ | (6,120 | ) | $ | 2,266 | $ | (5,998 | ) | $ | 7,442 | $ | 5,450 | $ | (11,570 | ) | $ | (2,410 | ) | $ | 22,518 | $ | (24,928 | ) | |||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
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Reinsurance Group of America, Incorporated Reconciliation of GAAP Income Statements to Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2016 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Corporate and Other Segment | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (27,400 | ) | $ | (7,302 | ) | $ | 18,790 | $ | (23,330 | ) | $ | (51,496 | ) | $ | 24,096 | $ | (39,242 | ) | $ | (119,144 | ) | $ | 79,902 | ||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | 1,120 | (11,690 | ) | (31,540 | ) | (6,930 | ) | 34,799 | (33,679 | ) | (49,040 | ) | 67,056 | (116,096 | ) | |||||||||||||||||||||||
Non-investment derivatives | (25 | ) | (23 | ) | (17 | ) | (14 | ) | (15 | ) | (10 | ) | (79 | ) | 71 | (150 | ) | |||||||||||||||||||||
Operating income (loss) before income taxes | $ | (26,305 | ) | $ | (19,015 | ) | $ | (12,767 | ) | $ | (30,274 | ) | $ | (16,712 | ) | $ | (9,593 | ) | $ | (88,361 | ) | $ | (52,017 | ) | $ | (36,344 | ) | |||||||||||
Consolidated | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 295,543 | $ | 287,600 | $ | 353,223 | $ | 107,580 | $ | 206,743 | $ | 88,800 | $ | 1,043,946 | $ | 744,795 | $ | 299,151 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | 103,944 | (26,958 | ) | (67,100 | ) | (31,968 | ) | 64,034 | 39,910 | (22,082 | ) | 49,586 | (71,668 | ) | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (20,374 | ) | (49,078 | ) | (76,966 | ) | 92,249 | 27,201 | (47,575 | ) | (54,169 | ) | 98,793 | (152,962 | ) | |||||||||||||||||||||||
GMXB embedded derivatives (1) | (90,923 | ) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | (54,486 | ) | (7,834 | ) | 33,191 | (41,025 | ) | |||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (8,238 | ) | (3,322 | ) | (11,657 | ) | (4,983 | ) | 246 | (8,484 | ) | (28,200 | ) | (16,370 | ) | (11,830 | ) | |||||||||||||||||||||
EIA embedded derivatives - interest credited | (39,964 | ) | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (38,552 | ) | (28,137 | ) | (12,582 | ) | (15,555 | ) | ||||||||||||||||||||||
DAC offset, net | 27,625 | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | 40,767 | 47,364 | (49,225 | ) | 96,589 | ||||||||||||||||||||||||||
Investment income on unit-linked variable annuities | (4,217 | ) | (5,540 | ) | (2,966 | ) | (408 | ) | — | (4,217 | ) | (13,131 | ) | — | (13,131 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 4,217 | 5,540 | 2,966 | 408 | — | 4,217 | 13,131 | — | 13,131 | |||||||||||||||||||||||||||||
Non-investment derivatives | 289 | (1,705 | ) | 110 | (831 | ) | (120 | ) | 409 | (2,137 | ) | (118 | ) | (2,019 | ) | |||||||||||||||||||||||
Operating income before income taxes | $ | 267,902 | $ | 230,467 | $ | 273,224 | $ | 177,158 | $ | 247,113 | $ | 20,789 | $ | 948,751 | $ | 848,070 | $ | 100,681 | ||||||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
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