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 28, 2020
(Exact Name of Registrant as Specified in its Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||
(Address of Principal Executive Office)
Registrant’s telephone number, including area code: (636 ) 736-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
Emerging growth company | |
☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 2.02 | Results of Operations and Financial Condition. |
On January 28, 2020, Reinsurance Group of America, Incorporated issued (1) a press release (the "Press Release") announcing its earnings for the three-month period ended December 31, 2019, 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, 2019, a copy of which is furnished with this report as Exhibit 99.2. The Press Release also notes that a conference call will be held on January 29, 2020 to discuss the financial and operating results for the three-month period ended December 31, 2019. 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 | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL) | |
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 28, 2020 | By: | /s/ Todd C. Larson | ||||
Todd C. Larson | ||||||
Senior Executive Vice President and Chief Financial Officer | ||||||
Exhibit 99.1
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS FOURTH QUARTER RESULTS
• | Earnings per diluted share: $3.68 from net income, $3.43 from adjusted operating income* |
• | Full-year earnings per diluted share: $13.62 from net income, $13.35 from adjusted operating income* |
• | ROE 8.4% and adjusted operating ROE* 10.5% for the full year |
• | Deployed capital of $78 million into in-force and other transactions in the quarter, $465 million in the year |
ST. LOUIS, January 28, 2020 - Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported fourth quarter net income of $235 million, or $3.68 per diluted share, compared with $110 million, or $1.72 per diluted share, in the prior-year quarter. Adjusted operating income* totaled $219 million, or $3.43 per diluted share, compared with $222 million, or $3.46 per diluted share, the year before. Net foreign currency fluctuations had a favorable effect of $0.01 per diluted share on net income and adjusted operating income as compared with the prior year.
Quarterly Results | Year-to-Date Results | |||||||||||||||
($ in millions, except per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net premiums | $ | 2,986 | $ | 2,805 | $ | 11,297 | $ | 10,544 | ||||||||
Net income | 235 | 110 | 870 | 716 | ||||||||||||
Net income per diluted share | 3.68 | 1.72 | 13.62 | 11.00 | ||||||||||||
Adjusted operating income* | 219 | 222 | 853 | 789 | ||||||||||||
Adjusted operating income per diluted share* | 3.43 | 3.46 | 13.35 | 12.12 | ||||||||||||
Book value per share | 185.17 | 134.53 | ||||||||||||||
Book value per share, excluding accumulated other comprehensive income (AOCI)* | 135.10 | 124.39 | ||||||||||||||
Total assets | 76,731 | 64,535 | ||||||||||||||
* | See ‘Use of Non-GAAP Financial Measures’ below |
Full-year net income totaled $870 million, or $13.62 per diluted share, compared with $716 million, or $11.00 per diluted share in 2018. Adjusted operating income for the full year totaled $853 million, or $13.35 per diluted share, compared with $789 million, or $12.12 per diluted share the year before. Net foreign currency fluctuations had an adverse effect of $0.18 per diluted share on net income and adjusted operating income for the full year. Net premiums totaled $11.3 billion, increasing 7% in 2019. Full-year premiums reflected adverse foreign currency effects of $179 million.
In the fourth quarter, consolidated net premiums totaled $3.0 billion, up 6% from last year’s fourth quarter, with adverse net foreign currency effects of $5 million. Excluding spread-based businesses and the value of associated derivatives, investment income increased 10% versus a year ago, attributable to asset growth
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of 8% and higher variable investment income. The average investment yield, excluding spread business, was up 11 basis points from the fourth quarter of 2018 to 4.55%, primarily due to higher variable investment income.
The effective tax rate this quarter was 23.8% on pre-tax income. For the full year, the effective tax rate was 23.1% on pre-tax income. The effective tax rate was 23.1% on pre-tax adjusted operating income for the quarter. For the full year, the effective tax rate was 22.4% on pre-tax adjusted operating income, in line with the expected range of 21% to 24%.
Anna Manning, President and Chief Executive Officer, commented, “Our operating results were modestly below our expectations this quarter, while the full-year results were above our expectations. We can point to strong organic growth and active capital deployment as favorable indicators of the strength of our business, and we continue to benefit from the earnings diversity that comes from our global platform.
“In the quarter, we produced strong overall results in EMEA, excellent results from Financial Solutions across all geographies, and the U.S. Group business performed above expectations. These areas of strength partially offset a loss in Australia and unfavorable U.S. Individual Mortality experience.
“We had an active quarter as we deployed approximately $78 million of capital into in-force and other transactions, bringing the year-to-date total to $465 million. We remain well positioned and optimistic about the environment and our pipeline. We ended the quarter with an excess capital position of approximately $900 million.
“The full year featured numerous highlights, including excellent Financial Solutions results across all geographies, strong overall results in EMEA and Canada, a strong rebound in our U.S. Group operations, vibrant top-line growth and in-line adjusted operating income in Asia.
“Looking forward, we remain optimistic about the future and our business prospects, as RGA is well positioned in its markets and we are executing on our proven strategy. We have a long track record of successful execution and strong financial results, and our intermediate-term financial outlook remains unchanged.”
SEGMENT RESULTS
In the fourth quarter of 2019, the Company changed the name of the Financial Reinsurance business within the U.S. and Latin America Financial Solutions segment to “Capital Solutions”. The name change better describes the product offerings for this part of the U.S. and Latin America Financial Solutions segment. This name change does not affect any previously or future reported results for the U.S. and Latin America Financial Solutions segment.
U.S. and Latin America
Traditional
The U.S. and Latin America Traditional segment reported pre-tax income of $85 million, compared with $95 million in the fourth quarter of 2018. Pre-tax adjusted operating income totaled $83 million,
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compared with $92 million the year before. Results reflected above average variable investment income and favorable Group experience, offset by adverse individual mortality experience driven by large claims. For the full year, pre-tax income totaled $265 million, compared with $286 million a year ago, and pre-tax adjusted operating income totaled $283 million, compared with $278 million a year ago.
Traditional net premiums were up 4% from last year’s fourth quarter to $1,558 million. Full-year net premiums totaled $5,729 million, up 4% from 2018.
Financial Solutions
The Asset-Intensive business reported pre-tax income of $78 million compared with pre-tax losses of $6 million last year. Fourth quarter pre-tax adjusted operating income increased to $65 million, up from $53 million a year ago. The current-year period results reflected the effects of new and existing business, stable investment spreads, and favorable equity market impacts. The prior-year period was relatively in line with expectations. Full-year pre-tax income totaled $315 million, compared with $168 million in 2018. Pre-tax adjusted operating income for the full year totaled $259 million, compared with $216 million in the prior year.
The Capital Solutions business reported pre-tax income and pre-tax adjusted operating income of $26 million, up from $20 million the year before primarily due to new business. For the full year, pre-tax income and pre-tax adjusted operating income totaled $83 million, unchanged from the year before.
Canada
Traditional
The Canada Traditional segment reported pre-tax income of $28 million, compared with $45 million the year before. Pre-tax adjusted operating income totaled $27 million, compared with $50 million a year ago, reflecting modestly unfavorable individual mortality experience. The year-ago period reflected favorable individual mortality experience, and the contribution of income from in-force transactions written that year. Foreign currency exchange rates had an immaterial effect on pre-tax income and pre-tax adjusted operating income. Pre-tax income for the full year totaled $168 million, up from $112 million the year before and pre-tax adjusted operating income for the full year totaled $161 million, up from $118 million in the year before. Foreign currency exchange rates had an adverse effect of $5 million on pre-tax income and pre-tax adjusted operating income for the full year.
Reported net premiums totaled $276 million for the quarter, up 3% over the year-ago period. Net foreign currency fluctuations had an immaterial effect on net premiums. For the full year, net premiums totaled $1,066 million, up 4% from the prior year. Net foreign currency fluctuations had an adverse effect of $25 million on net premiums 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 income and pre-tax adjusted operating income of $7 million, compared with $2 million a year ago. The current period reflected income from a new fee-based transaction. Net foreign currency fluctuations had an immaterial effect on pre-tax income and pre-tax adjusted operating
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income. For the full year, pre-tax income and pre-tax adjusted operating income totaled $15 million, compared with $10 million in 2018. Net foreign currency fluctuations had an immaterial effect on pre-tax income and pre-tax adjusted operating income.
Europe, Middle East and Africa (EMEA)
Traditional
The EMEA Traditional segment reported pre-tax income and pre-tax adjusted operating income of $23 million compared with $15 million in last year’s fourth quarter. The strong results were attributable primarily to favorable underwriting experience across most of the region. Net foreign currency fluctuations adversely affected pre-tax income and pre-tax adjusted operating income by $1 million for the quarter. Full-year pre-tax income and pre-tax adjusted operating income totaled $80 million, compared with $55 million in the prior-year. For the year, foreign currency fluctuations adversely affected pre-tax income and pre-tax adjusted operating income by $5 million.
Reported net premiums increased 4% to $368 million in the fourth quarter. Foreign currency exchange rates adversely affected net premiums by $4 million. For the full year, net premiums totaled $1,442 million, with adverse foreign currency fluctuations of $77 million.
Financial Solutions
The EMEA Financial Solutions business segment, which consists of longevity, asset-intensive and fee-based transactions, reported fourth quarter pre-tax income of $72 million, compared with $36 million in the year-ago period. Pre-tax adjusted operating income totaled $73 million, compared with $45 million the year before. The current-year period reflected favorable longevity experience. Net foreign currency fluctuations had an immaterial effect on pre-tax income and pre-tax adjusted operating income. For the full year, pre-tax income totaled $223 million, compared with $197 million in the year before, and pre-tax adjusted operating income totaled $216 million, compared with $197 million in the year before. Net foreign currency fluctuations had an adverse effect of $9 million on pre-tax income and $8 million on pre-tax adjusted operating income for the year.
Asia Pacific
Traditional
The Asia Pacific Traditional segment’s pre-tax income and pre-tax adjusted operating income totaled
$12 million, compared with $34 million in the prior-year period. The current-period results were relatively in line with expectations for Asia, while Australia experienced a loss that was roughly similar to that of the third quarter of this year. Net foreign currency fluctuations had a favorable effect of $2 million on pre-tax income and pre-tax adjusted operating income. For the full year, pre-tax income and pre-tax adjusted operating income totaled $105 million, compared with $178 million in 2018. Net foreign currency fluctuations had a favorable effect of $3 million on pre-tax income and pre-tax adjusted operating income for the full year.
Reported net premiums increased 7% to $659 million, reflecting growth on new and existing treaties in Asia, slightly offset by a reduction in Australia. Foreign currency exchange rates had an adverse effect of
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$3 million on net premiums. For the full year, reported net premiums totaled $2,568 million, up 12% over the prior year. Foreign currency exchange rates had an adverse effect of $65 million on net premiums for the full year.
Financial Solutions
The Asia Pacific Financial Solutions business segment, which consists of asset-intensive and fee-based transactions, reported fourth quarter pre-tax income of $13 million, compared with pre-tax losses of $14 million in the prior-year period. Pre-tax adjusted operating income totaled $8 million, compared with $2 million the year before, attributable to new business in Asia. Net foreign currency fluctuations had an immaterial effect on pre-tax income and pre-tax adjusted operating income. Full-year pre-tax income totaled $23 million, compared with pre-tax losses of $6 million in the prior year. Full-year pre-tax adjusted operating income totaled $20 million, compared with $7 million in the prior year. Net foreign currency fluctuations had a favorable effect of $1 million on pre-tax income and an immaterial effect on pre-tax adjusted operating income.
Reported net premiums increased significantly to $38 million, attributable to new treaties added in 2019. Foreign currency exchange rates had a favorable effect of $1 million on net premiums. For the full year, reported net premiums totaled $146 million, a significant increase over the prior year. Foreign currency exchange rates had an immaterial effect on net premiums.
Corporate and Other
The Corporate and Other segment’s pre-tax losses for the fourth quarter totaled $36 million, compared with pre-tax losses of $89 million the year before. Pre-tax adjusted operating losses totaled $40 million, compared with year-ago pre-tax adjusted operating losses of $33 million. The current-period loss was higher than the average expected run rate due primarily to higher incentive compensation accruals and higher costs related to strategic initiatives. For the full year, pre-tax losses totaled $145 million, compared with pre-tax losses of $237 million, and pre-tax adjusted operating losses totaled $123 million, compared with pre-tax losses of $124 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 adjusted operating earnings per share for an upcoming year. This better reflects the long-term nature of the business, as 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, the Company'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 adjusted operating earnings per share in the 5% to 8% range, and adjusted operating return on equity of 10% to 12%. 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. The Company currently estimates its effective tax rate on adjusted operating income will be approximately 23% to 24%.
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Dividend Declaration
The board of directors declared a regular quarterly dividend of $0.70, payable February 27 to shareholders of record as of February 6.
Earnings Conference Call
A conference call to discuss fourth quarter results will begin at 11 a.m. Eastern Time on Wednesday, January 29. Interested parties may access the call by dialing 800-458-4121 (domestic) or 323-794-2093 (international). The access code is 4275261. 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.
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 adjusted 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 adjusted 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, adjusted operating income excludes any net gain or loss from discontinued operations, the cumulative effect of any accounting changes, tax reform and other items that management believes are not indicative of the Company’s ongoing operations. The definition of adjusted operating income can vary by company and is not considered a substitute for GAAP net income.
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.
Adjusted operating income per diluted share is a non-GAAP financial measure calculated as adjusted operating income divided by weighted average diluted shares outstanding. Adjusted operating return on equity is a non-GAAP financial measure calculated as adjusted operating income divided by average stockholders’ equity excluding AOCI. Similar to adjusted operating income, management believes these non-GAAP financial measures better reflect the ongoing profitability and underlying trends of the Company’s continuing operations, they also serve as a basis for establishing target levels and awards under RGA’s management incentive programs.
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Reconciliations from GAAP net income, book value per share, net income per diluted share and average stockholders’ equity 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 “Financial Information” section.
About RGA
Reinsurance Group of America, Incorporated (RGA), a Fortune 500 company, is among the leading global providers of life reinsurance and financial solutions, with approximately $3.5 trillion of life reinsurance in force and assets of $76.7 billion as of December 31, 2019. Founded in 1973, RGA today is recognized for its deep technical expertise in risk and capital management, innovative solutions, and commitment to serving its clients. With headquarters in St. Louis, Missouri, and operations around the world, RGA delivers expert solutions in individual life reinsurance, individual living benefits reinsurance, group reinsurance, health reinsurance, facultative underwriting, product development, and financial solutions. To learn more about RGA and its businesses, visit the Company’s website at www.rgare.com.
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 future operations, strategies, earnings, revenues, income or loss, ratios, financial performance and growth potential of the Company. Forward-looking statements often contain words and phrases such as “intend,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “should,” “believe” and other similar expressions. Forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Forward-looking statements are not a guarantee of future performance and are subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results, performance, and achievements could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.
Numerous important factors could cause actual results and events to differ materially from those expressed or implied by forward-looking statements including, without limitation: (1) adverse changes in mortality, morbidity, lapsation or claims experience, (2) inadequate risk analysis and underwriting, (3) adverse capital and credit market conditions and their impact on the Company’s liquidity, access to capital and cost of capital, (4) 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, (5) the availability and cost of collateral necessary for regulatory reserves and capital, (6) requirements to post collateral or make payments due to declines in market value of assets subject to the Company’s collateral arrangements, (7) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (8) the effect of the Company parent’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, (9) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, (10) the impairment of other financial institutions and its effect on the Company’s business, (11) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (12) 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, (13) market or economic conditions that adversely affect the Company’s ability to make
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timely sales of investment securities, (14) 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, (15) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (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 U.S. sovereign debt and the credit ratings thereof, (17) 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, (18) financial performance of the Company’s clients, (19) the threat of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics anywhere in the world where the Company or its clients do business, (20) competitive factors and competitors’ responses to the Company’s initiatives, (21) development and introduction of new products and distribution opportunities (22) execution of the Company’s entry into new markets, (23) integration of acquired blocks of business and entities, (24) 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, (25) adverse litigation or arbitration results, (26) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (27) changes in laws, regulations, and accounting standards applicable to the Company or its business, (28) the effects of the Tax Cuts and Jobs Act of 2017 may be different than expected and (29) other risks and uncertainties described in this document and in the Company’s other filings with the Securities and Exchange Commission (“SEC”).
Forward-looking statements should be evaluated together with the many risks and uncertainties that affect the Company’s business, including those mentioned in this document and described in the periodic reports the Company files with the SEC. These forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update these forward-looking statements, even though the Company’s situation may change in the future. For a discussion of these 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 2018 Annual Report.
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 Adjusted Operating Income
(Dollars in millions, except per share data)
(Unaudited) | Three Months Ended December 31, | ||||||||||||||
2019 | 2018 | ||||||||||||||
Diluted Earnings Per Share | Diluted Earnings Per Share | ||||||||||||||
Net income | $ | 235 | $ | 3.68 | $ | 110 | $ | 1.72 | |||||||
Reconciliation to adjusted operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | 25 | 0.40 | 25 | 0.38 | |||||||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | — | — | — | — | |||||||||||
Embedded derivatives: | |||||||||||||||
Included in investment related gains/losses, net | (37 | ) | (0.58 | ) | 87 | 1.36 | |||||||||
Included in interest credited | (8 | ) | (0.13 | ) | 10 | 0.15 | |||||||||
DAC offset, net | (3 | ) | (0.05 | ) | (10 | ) | (0.15 | ) | |||||||
Investment (income) loss on unit-linked variable annuities | — | — | 8 | 0.13 | |||||||||||
Interest credited on unit-linked variable annuities | — | — | (8 | ) | (0.13 | ) | |||||||||
Interest expense on uncertain tax positions | 3 | 0.05 | — | — | |||||||||||
Non-investment derivatives | 2 | 0.03 | — | — | |||||||||||
Uncertain tax positions and other tax related items | 2 | 0.03 | — | — | |||||||||||
Adjusted operating income | $ | 219 | $ | 3.43 | $ | 222 | $ | 3.46 | |||||||
(Unaudited) | Twelve Months Ended December 31, | ||||||||||||||
2019 | 2018 | ||||||||||||||
Diluted Earnings Per Share | Diluted Earnings Per Share | ||||||||||||||
Net income | $ | 870 | $ | 13.62 | $ | 716 | $ | 11.00 | |||||||
Reconciliation to adjusted operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (43 | ) | (0.68 | ) | 121 | 1.85 | |||||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | 4 | 0.06 | (2 | ) | (0.03 | ) | |||||||||
Embedded derivatives: | |||||||||||||||
Included in investment related gains/losses, net | (13 | ) | (0.20 | ) | 22 | 0.34 | |||||||||
Included in interest credited | 36 | 0.56 | (14 | ) | (0.21 | ) | |||||||||
DAC offset, net | (25 | ) | (0.39 | ) | 8 | 0.13 | |||||||||
Investment (income) loss on unit-linked variable annuities | (21 | ) | (0.33 | ) | 5 | 0.08 | |||||||||
Interest credited on unit-linked variable annuities | 21 | 0.33 | (5 | ) | (0.08 | ) | |||||||||
Interest expense on uncertain tax positions | 14 | 0.22 | — | — | |||||||||||
Non-investment derivatives | 2 | 0.03 | — | — | |||||||||||
Uncertain tax positions and other tax related items | 8 | 0.13 | (62 | ) | (0.96 | ) | |||||||||
Adjusted operating income | $ | 853 | $ | 13.35 | $ | 789 | $ | 12.12 | |||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated Effective Income Tax Rates
(Dollars in thousands)
(Unaudited) | Three Months Ended December 31, 2019 | |||||||||
Pre-tax Income | Income Taxes | Effective Tax Rate | ||||||||
GAAP income | $ | 308,131 | $ | 73,263 | 23.8 | % | ||||
Reconciliation to adjusted operating income: | ||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | 29,710 | 5,660 | ||||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | 63 | 13 | ||||||||
Embedded derivatives: | ||||||||||
Included in investment related gains/losses, net | (46,606 | ) | (9,787 | ) | ||||||
Included in interest credited | (9,553 | ) | (2,006 | ) | ||||||
DAC offset, net | (3,563 | ) | (749 | ) | ||||||
Investment (income) loss on unit-linked variable annuities | 291 | 61 | ||||||||
Interest credited on unit-linked variable annuities | (291 | ) | (61 | ) | ||||||
Interest expense on uncertain tax positions | 3,916 | 822 | ||||||||
Non-investment derivatives | 2,241 | 471 | ||||||||
Uncertain tax positions and other tax related items | — | (1,932 | ) | |||||||
Adjusted operating income | $ | 284,339 | $ | 65,755 | 23.1 | % | ||||
Reconciliation of Consolidated Income before Income Taxes to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited) | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Income before income taxes | $ | 308 | $ | 138 | $ | 1,132 | $ | 846 | |||||||
Reconciliation to pre-tax adjusted operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | 30 | 32 | (56 | ) | 153 | ||||||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | — | — | 5 | (2 | ) | ||||||||||
Embedded derivatives: | |||||||||||||||
Included in investment related gains/losses, net | (46 | ) | 110 | (16 | ) | 28 | |||||||||
Included in interest credited | (10 | ) | 13 | 46 | (17 | ) | |||||||||
DAC offset, net | (4 | ) | (13 | ) | (32 | ) | 10 | ||||||||
Investment (income) loss on unit-linked variable annuities | — | 11 | (26 | ) | 7 | ||||||||||
Interest credited on unit-linked variable annuities | — | (11 | ) | 26 | (7 | ) | |||||||||
Interest expense on uncertain tax positions | 4 | — | 18 | — | |||||||||||
Non-investment derivatives | 2 | — | 2 | — | |||||||||||
Pre-tax adjusted operating income | $ | 284 | $ | 280 | $ | 1,099 | $ | 1,018 | |||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Income to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited) | Three Months Ended December 31, 2019 | ||||||||||||||
Pre-tax income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 85 | $ | — | $ | (2 | ) | $ | 83 | ||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 78 | 60 | (1) | (73 | ) | (2) | 65 | ||||||||
Capital Solutions | 26 | — | — | 26 | |||||||||||
Total U.S. and Latin America | 189 | 60 | (75 | ) | 174 | ||||||||||
Canada Traditional | 28 | (1 | ) | — | 27 | ||||||||||
Canada Financial Solutions | 7 | — | — | 7 | |||||||||||
Total Canada | 35 | (1 | ) | — | 34 | ||||||||||
EMEA Traditional | 23 | — | — | 23 | |||||||||||
EMEA Financial Solutions | 72 | 1 | — | 73 | |||||||||||
Total EMEA | 95 | 1 | — | 96 | |||||||||||
Asia Pacific Traditional | 12 | — | — | 12 | |||||||||||
Asia Pacific Financial Solutions | 13 | (5 | ) | — | 8 | ||||||||||
Total Asia Pacific | 25 | (5 | ) | — | 20 | ||||||||||
Corporate and Other | (36 | ) | (4 | ) | — | (40 | ) | ||||||||
Consolidated | $ | 308 | $ | 51 | $ | (75 | ) | $ | 284 | ||||||
(1) | Asset-Intensive is net of $15 DAC offset. |
(2) | Asset-Intensive is net of $(19) DAC offset. |
(Unaudited) | Three Months Ended December 31, 2018 | ||||||||||||||
Pre-tax income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 95 | $ | — | $ | (3 | ) | $ | 92 | ||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | (6 | ) | 7 | (1) | 52 | (2) | 53 | ||||||||
Capital Solutions | 20 | — | — | 20 | |||||||||||
Total U.S. and Latin America | 109 | 7 | 49 | 165 | |||||||||||
Canada Traditional | 45 | 5 | — | 50 | |||||||||||
Canada Financial Solutions | 2 | — | — | 2 | |||||||||||
Total Canada | 47 | 5 | — | 52 | |||||||||||
EMEA Traditional | 15 | — | — | 15 | |||||||||||
EMEA Financial Solutions | 36 | 9 | — | 45 | |||||||||||
Total EMEA | 51 | 9 | — | 60 | |||||||||||
Asia Pacific Traditional | 34 | — | — | 34 | |||||||||||
Asia Pacific Financial Solutions | (14 | ) | 16 | — | 2 | ||||||||||
Total Asia Pacific | 20 | 16 | — | 36 | |||||||||||
Corporate and Other | (89 | ) | 56 | — | (33 | ) | |||||||||
Consolidated | $ | 138 | $ | 93 | $ | 49 | $ | 280 | |||||||
(1) | Asset-Intensive is net of $61 DAC offset. |
(2) | Asset-Intensive is net of $(74) DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Income to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited) | Twelve Months Ended December 31, 2019 | ||||||||||||||
Pre-tax income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 265 | $ | — | $ | 18 | $ | 283 | |||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 315 | (81 | ) | (1) | 25 | (2) | 259 | ||||||||
Capital Solutions | 83 | — | — | 83 | |||||||||||
Total U.S. and Latin America | 663 | (81 | ) | 43 | 625 | ||||||||||
Canada Traditional | 168 | (7 | ) | — | 161 | ||||||||||
Canada Financial Solutions | 15 | — | — | 15 | |||||||||||
Total Canada | 183 | (7 | ) | — | 176 | ||||||||||
EMEA Traditional | 80 | — | — | 80 | |||||||||||
EMEA Financial Solutions | 223 | (7 | ) | — | 216 | ||||||||||
Total EMEA | 303 | (7 | ) | — | 296 | ||||||||||
Asia Pacific Traditional | 105 | — | — | 105 | |||||||||||
Asia Pacific Financial Solutions | 23 | (3 | ) | — | 20 | ||||||||||
Total Asia Pacific | 128 | (3 | ) | — | 125 | ||||||||||
Corporate and Other | (145 | ) | 22 | — | (123 | ) | |||||||||
Consolidated | $ | 1,132 | $ | (76 | ) | $ | 43 | $ | 1,099 | ||||||
(1) | Asset-Intensive is net of $(45) DAC offset. |
(2) | Asset-Intensive is net of $13 DAC offset. |
(Unaudited) | Twelve Months Ended December 31, 2018 | ||||||||||||||
Pre-tax income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 286 | $ | — | $ | (8 | ) | $ | 278 | ||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 168 | 72 | (1) | (24 | ) | (2) | 216 | ||||||||
Capital Solutions | 83 | — | — | 83 | |||||||||||
Total U.S. and Latin America | 537 | 72 | (32 | ) | 577 | ||||||||||
Canada Traditional | 112 | 6 | — | 118 | |||||||||||
Canada Financial Solutions | 10 | — | — | 10 | |||||||||||
Total Canada | 122 | 6 | — | 128 | |||||||||||
EMEA Traditional | 55 | — | — | 55 | |||||||||||
EMEA Financial Solutions | 197 | — | — | 197 | |||||||||||
Total EMEA | 252 | — | — | 252 | |||||||||||
Asia Pacific Traditional | 178 | — | — | 178 | |||||||||||
Asia Pacific Financial Solutions | (6 | ) | 13 | — | 7 | ||||||||||
Total Asia Pacific | 172 | 13 | — | 185 | |||||||||||
Corporate and Other | (237 | ) | 113 | — | (124 | ) | |||||||||
Consolidated | $ | 846 | $ | 204 | $ | (32 | ) | $ | 1,018 | ||||||
(1) | Asset-Intensive is net of $53 DAC offset. |
(2) | Asset-Intensive is net of $(43) DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In millions, except per share data)
(Unaudited) | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Earnings per share from net income: | |||||||||||||||
Basic earnings per share | $ | 3.75 | $ | 1.75 | $ | 13.88 | $ | 11.25 | |||||||
Diluted earnings per share | $ | 3.68 | $ | 1.72 | $ | 13.62 | $ | 11.00 | |||||||
Diluted earnings per share from adjusted operating income | $ | 3.43 | $ | 3.46 | $ | 13.35 | $ | 12.12 | |||||||
Weighted average number of common and common equivalent shares outstanding | 63,774 | 64,156 | 63,882 | 65,094 | |||||||||||
(Unaudited) | At December 31, | ||||||
2019 | 2018 | ||||||
Treasury shares | 16,482 | 16,324 | |||||
Common shares outstanding | 62,656 | 62,814 | |||||
Book value per share outstanding | $ | 185.17 | $ | 134.53 | |||
Book value per share outstanding, before impact of AOCI | $ | 135.10 | $ | 124.39 | |||
Reconciliation of Book Value Per Share to Book Value Per Share Excluding AOCI
(Unaudited) | At December 31, | ||||||
2019 | 2018 | ||||||
Book value per share outstanding | $ | 185.17 | $ | 134.53 | |||
Less effect of AOCI: | |||||||
Accumulated currency translation adjustments | (1.46 | ) | (2.69 | ) | |||
Unrealized appreciation of securities | 52.65 | 13.63 | |||||
Pension and postretirement benefits | (1.12 | ) | (0.80 | ) | |||
Book value per share outstanding, before impact of AOCI | $ | 135.10 | $ | 124.39 | |||
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Add Thirteen
Reconciliation of Stockholders' Average Equity to Stockholders' Average Equity Excluding AOCI
(Dollars in millions)
(Unaudited) | |||
Trailing Twelve Months Ended December 31, 2019: | Average Equity | ||
Stockholders' average equity | $ | 10,391 | |
Less effect of AOCI: | |||
Accumulated currency translation adjustments | (137 | ) | |
Unrealized appreciation of securities | 2,481 | ||
Pension and postretirement benefits | (56 | ) | |
Stockholders' average equity, excluding AOCI | $ | 8,103 | |
Reconciliation of Trailing Twelve Months of Consolidated Net Income to Adjusted Operating Income and
Related Return on Equity
(Dollars in millions)
(Unaudited) | Return on Equity | |||||
Trailing Twelve Months Ended December 31, 2019: | Income | |||||
Net Income | $ | 870 | 8.4 | % | ||
Reconciliation to adjusted operating income: | ||||||
Capital (gains) losses, derivatives and other, net | (23 | ) | ||||
Change in fair value of embedded derivatives | 23 | |||||
Deferred acquisition cost offset, net | (25 | ) | ||||
Statutory tax rate changes and subsequent effects | 8 | |||||
Adjusted operating income | $ | 853 | 10.5 | % | ||
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in millions)
(Unaudited) | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues: | |||||||||||||||
Net premiums | $ | 2,986 | $ | 2,805 | $ | 11,297 | $ | 10,544 | |||||||
Investment income, net of related expenses | 677 | 522 | 2,520 | 2,139 | |||||||||||
Investment related gains (losses), net: | |||||||||||||||
Other-than-temporary impairments on fixed maturity securities | (13 | ) | (14 | ) | (31 | ) | (28 | ) | |||||||
Other investment related gains (losses), net | 35 | (125 | ) | 122 | (142 | ) | |||||||||
Total investment related gains (losses), net | 22 | (139 | ) | 91 | (170 | ) | |||||||||
Other revenue | 100 | 91 | 392 | 363 | |||||||||||
Total revenues | 3,785 | 3,279 | 14,300 | 12,876 | |||||||||||
Benefits and expenses: | |||||||||||||||
Claims and other policy benefits | 2,703 | 2,468 | 10,197 | 9,319 | |||||||||||
Interest credited | 180 | 92 | 697 | 425 | |||||||||||
Policy acquisition costs and other insurance expenses | 310 | 335 | 1,204 | 1,323 | |||||||||||
Other operating expenses | 234 | 200 | 868 | 786 | |||||||||||
Interest expense | 44 | 39 | 173 | 147 | |||||||||||
Collateral finance and securitization expense | 6 | 7 | 29 | 30 | |||||||||||
Total benefits and expenses | 3,477 | 3,141 | 13,168 | 12,030 | |||||||||||
Income before income taxes | 308 | 138 | 1,132 | 846 | |||||||||||
Provision for income taxes | 73 | 28 | 262 | 130 | |||||||||||
Net income | $ | 235 | $ | 110 | $ | 870 | $ | 716 | |||||||
Exhibit 99.2
Quarterly Financial Supplement
Fourth Quarter 2019
(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 | ||||
Senior 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, Ltd. | AA- | NR | NR | |||
RGA Reinsurance Company of Australia Limited | AA- | NR | NR | |||
RGA Americas Reinsurance Company, Ltd. | AA- | A+ | NR | |||
RGA Reinsurance Company (Barbados) Ltd. | AA- | NR | NR | |||
RGA Atlantic Reinsurance Company Ltd. | NR | A+ | NR | |||
Omnilife Insurance Company Limited | A+ | NR | NR | |||
Senior Debt Ratings | ||||||
Reinsurance Group of America, Incorporated | A | a- | Baa1 | |||
Our common stock is traded on the New York Stock Exchange under the symbol “RGA”.
Reinsurance Group of America, Incorporated
4th Quarter 2019
Table of Contents
Page | |
Non-GAAP Disclosures | |
2020 Guidance | |
2019 Notes | |
Consolidated | |
Financial Highlights | |
Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations) | |
Consolidated Balance Sheets | |
Segment Summaries of GAAP Income Statements and Adjusted Operating Income Statements | |
U.S. and Latin America Operations | |
Canada Traditional | |
Canada Financial Solutions | |
Europe, Middle East and Africa Traditional | |
Europe, Middle East and Africa Financial Solutions | |
Asia Pacific Traditional | |
Asia Pacific Financial Solutions | |
Corporate and Other | |
Summary of Segment GAAP Income | |
Summary of Segment Adjusted Operating Income | |
Investments | |
Cash and Invested Assets and Investment Income and Yield Summary | |
Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Fixed Maturity Securities | |
Corporate Fixed Maturity Securities by Industry | |
Ratings of Fixed Maturity Securities and Structured Fixed Maturity Securities | |
Gross Unrealized Losses Aging - Fixed Maturity Securities | |
Fixed Maturity Securities Below Amortized Cost | |
Consolidated Investment Related Gains and Losses | |
Appendix | |
Reconciliations of GAAP to Non-GAAP Measures | |
Reinsurance Group of America, Incorporated
Non-GAAP Disclosures
This Quarterly 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. The consolidated financial information herein include the assets, liabilities, and results of operations of RGA and its subsidiaries, all of which are wholly owned (collectively, the “Company”).
Non-GAAP Disclosures
RGA uses a non-GAAP financial measure called adjusted 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 adjusted 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, adjusted operating income excludes any net gain or loss from discontinued operations, the cumulative effect of any accounting changes, tax reform and other items that management believes are not indicative of the Company’s ongoing operations. The definition of adjusted 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 adjusted operating income before income tax is presented in the appendix.
RGA evaluates its shareholders’ 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 adjusted operating return on equity, which is calculated as adjusted 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. A reconciliation of shareholders’ equity before and after the impact of AOCI is presented in the appendix.
| Page 1 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||
2020 Guidance | ||||||||||||||||||||
On an annual basis, the Company provides financial guidance based upon the intermediate term rather than giving a range of annual adjusted operating earnings per share for an upcoming year. This better reflects the long-term nature of the business, as 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, the Company'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 adjusted operating earnings per share in the 5% to 8% range, and adjusted operating return on equity of 10% to 12%. 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. The Company currently estimates its effective tax rate on adjusted operating income will be approximately 23% to 24%. | ||||||||||||||||||||
| Page 2 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||
2019 Notes | ||||||||||||||||||||
Name Change | ||||||||||||||||||||
In the fourth quarter of 2019, the Company changed the name of the Financial Reinsurance business within the U.S. and Latin America Financial Solutions segment to “Capital Solutions”. The name change better describes the product offerings for this part of the U.S. and Latin America Financial Solutions segment. This name change does not affect any previously or future reported results for the U.S. and Latin America Financial Solutions segment. | ||||||||||||||||||||
| Page 3 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to Date | ||||||||||||||||||||||||||||||||||||
(USD millions, except in force & per share data) | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | Change | |||||||||||||||||||||||||||||||
Net premiums | $ | 2,986 | $ | 2,809 | $ | 2,764 | $ | 2,738 | $ | 2,805 | $ | 181 | $ | 11,297 | $ | 10,544 | $ | 753 | ||||||||||||||||||||
Net income | 235 | 263 | 202 | 170 | 110 | 125 | 870 | 716 | 154 | |||||||||||||||||||||||||||||
Adjusted operating income | 219 | 256 | 211 | 167 | 222 | (3 | ) | 853 | 789 | 64 | ||||||||||||||||||||||||||||
Return on equity - annualized | 8.1 | % | 9.5 | % | 8.0 | % | 7.5 | % | 5.2 | % | 2.9 | % | ||||||||||||||||||||||||||
Return on equity - trailing 12 months | 8.4 | % | 7.6 | % | 8.5 | % | 8.9 | % | 8.1 | % | 0.3 | % | ||||||||||||||||||||||||||
Adjusted operating return on equity (ex AOCI): | ||||||||||||||||||||||||||||||||||||||
Annualized | 10.5 | % | 12.6 | % | 10.6 | % | 8.5 | % | 11.4 | % | (0.9 | )% | ||||||||||||||||||||||||||
Trailing 12 months | 10.5 | % | 10.7 | % | 11.0 | % | 11.0 | % | 10.3 | % | 0.2 | % | ||||||||||||||||||||||||||
Total assets | $76,731 | $75,774 | $72,044 | $66,692 | $64,535 | $12,196 | ||||||||||||||||||||||||||||||||
Assumed Life Reinsurance In Force (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 1,619.6 | $ | 1,618.5 | $ | 1,623.0 | $ | 1,618.9 | $ | 1,610.1 | $ | 9.5 | ||||||||||||||||||||||||||
U.S. and Latin America Financial Solutions | 5.1 | 5.2 | 2.0 | 2.0 | 2.1 | 3.0 | ||||||||||||||||||||||||||||||||
Canada Traditional | 417.1 | 401.7 | 406.1 | 394.1 | 383.5 | 33.6 | ||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 776.4 | 707.8 | 715.8 | 726.1 | 716.3 | 60.1 | ||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 662.0 | 626.6 | 630.3 | 623.4 | 616.9 | 45.1 | ||||||||||||||||||||||||||||||||
Asia Pacific Financial Solutions | — | — | — | 0.1 | 0.3 | (0.3 | ) | |||||||||||||||||||||||||||||||
Total assumed life reinsurance in force | $ | 3,480.2 | $ | 3,359.8 | $ | 3,377.2 | $ | 3,364.6 | $ | 3,329.2 | $ | 151.0 | ||||||||||||||||||||||||||
Assumed New Business Production (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 38.4 | $ | 23.9 | $ | 24.7 | $ | 28.8 | $ | 26.3 | $ | 12.1 | $ | 115.8 | $ | 106.5 | $ | 9.3 | ||||||||||||||||||||
U.S. and Latin America Financial Solutions | — | 3.2 | — | — | — | — | 3.2 | — | 3.2 | |||||||||||||||||||||||||||||
Canada Traditional | 14.9 | 8.1 | 9.0 | 8.4 | 9.4 | 5.5 | 40.4 | 43.1 | (2.7 | ) | ||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 55.0 | 32.1 | 27.1 | 33.2 | 58.6 | (3.6 | ) | 147.4 | 190.2 | (42.8 | ) | |||||||||||||||||||||||||||
Asia Pacific Traditional | 20.2 | 31.0 | 9.6 | 8.9 | 20.3 | (0.1 | ) | 69.7 | 66.9 | 2.8 | ||||||||||||||||||||||||||||
Total assumed new business production | $ | 128.5 | $ | 98.3 | $ | 70.4 | $ | 79.3 | $ | 114.6 | $ | 13.9 | $ | 376.5 | $ | 406.7 | $ | (30.2 | ) | |||||||||||||||||||
Per Share and Shares Data | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 3.75 | $ | 4.19 | $ | 3.23 | $ | 2.70 | $ | 1.75 | $ | 2.00 | $ | 13.88 | $ | 11.25 | $ | 2.63 | ||||||||||||||||||||
Adjusted operating income | $ | 3.49 | $ | 4.09 | $ | 3.36 | $ | 2.66 | $ | 3.53 | $ | (0.04 | ) | $ | 13.61 | $ | 12.39 | $ | 1.22 | |||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 3.68 | $ | 4.12 | $ | 3.18 | $ | 2.65 | $ | 1.72 | $ | 1.96 | $ | 13.62 | $ | 11.00 | $ | 2.62 | ||||||||||||||||||||
Adjusted operating income | $ | 3.43 | $ | 4.02 | $ | 3.31 | $ | 2.61 | $ | 3.46 | $ | (0.03 | ) | $ | 13.35 | $ | 12.12 | $ | 1.23 | |||||||||||||||||||
Wgt. average common shares outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 62,633 | 62,666 | 62,678 | 62,758 | 62,815 | (182 | ) | 62,684 | 63,658 | (974 | ) | |||||||||||||||||||||||||||
Diluted | 63,774 | 63,789 | 63,698 | 64,027 | 64,156 | (382 | ) | 63,882 | 65,094 | (1,212 | ) | |||||||||||||||||||||||||||
Common shares issued | 79,138 | 79,138 | 79,138 | 79,138 | 79,138 | — | 79,138 | 79,138 | — | |||||||||||||||||||||||||||||
Treasury shares | 16,482 | 16,529 | 16,380 | 16,594 | 16,324 | 158 | 16,482 | 16,324 | 158 | |||||||||||||||||||||||||||||
Common shares outstanding | 62,656 | 62,609 | 62,758 | 62,544 | 62,814 | (158 | ) | 62,656 | 62,814 | (158 | ) | |||||||||||||||||||||||||||
Book value per share | $ | 185.17 | $ | 184.06 | $ | 170.64 | $ | 154.61 | $ | 134.53 | $ | 50.64 | ||||||||||||||||||||||||||
Per share effect of AOCI | $ | 50.07 | $ | 52.04 | $ | 42.10 | $ | 28.23 | $ | 10.14 | $ | 39.93 | ||||||||||||||||||||||||||
Book value per share, excluding AOCI | $ | 135.10 | $ | 132.02 | $ | 128.54 | $ | 126.38 | $ | 124.39 | $ | 10.71 | ||||||||||||||||||||||||||
Stockholders’ dividends paid | $ | 43.9 | $ | 43.9 | $ | 37.6 | $ | 37.7 | $ | 37.7 | $ | 6.2 | $ | 163.1 | $ | 140.1 | $ | 23.0 | ||||||||||||||||||||
| Page 4 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations) | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 2,986 | $ | 2,809 | $ | 2,764 | $ | 2,738 | $ | 2,805 | $ | 181 | $ | 11,297 | $ | 10,544 | $ | 753 | ||||||||||||||||||||
Investment income, net of related expenses | 677 | 679 | 584 | 580 | 522 | 155 | 2,520 | 2,139 | 381 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | ||||||||||||||||||||||||||||||||||||||
OTTI on fixed maturity securities | (13 | ) | (9 | ) | — | (9 | ) | (14 | ) | 1 | (31 | ) | (28 | ) | (3 | ) | ||||||||||||||||||||||
Other investment related gains (losses), net | 35 | 58 | 12 | 17 | (125 | ) | 160 | 122 | (142 | ) | 264 | |||||||||||||||||||||||||||
Total investment related gains (losses), net | 22 | 49 | 12 | 8 | (139 | ) | 161 | 91 | (170 | ) | 261 | |||||||||||||||||||||||||||
Other revenue | 100 | 91 | 107 | 94 | 91 | 9 | 392 | 363 | 29 | |||||||||||||||||||||||||||||
Total revenues | 3,785 | 3,628 | 3,467 | 3,420 | 3,279 | 506 | 14,300 | 12,876 | 1,424 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 2,703 | 2,470 | 2,516 | 2,508 | 2,468 | 235 | 10,197 | 9,319 | 878 | |||||||||||||||||||||||||||||
Interest credited | 180 | 226 | 158 | 133 | 92 | 88 | 697 | 425 | 272 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 310 | 322 | 260 | 312 | 335 | (25 | ) | 1,204 | 1,323 | (119 | ) | |||||||||||||||||||||||||||
Other operating expenses | 234 | 210 | 222 | 202 | 200 | 34 | 868 | 786 | 82 | |||||||||||||||||||||||||||||
Interest expense | 44 | 46 | 43 | 40 | 39 | 5 | 173 | 147 | 26 | |||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6 | 7 | 8 | 8 | 7 | (1 | ) | 29 | 30 | (1 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 3,477 | 3,281 | 3,207 | 3,203 | 3,141 | 336 | 13,168 | 12,030 | 1,138 | |||||||||||||||||||||||||||||
Income before income taxes | 308 | 347 | 260 | 217 | 138 | 170 | 1,132 | 846 | 286 | |||||||||||||||||||||||||||||
Provision for income taxes | 73 | 84 | 58 | 47 | 28 | 45 | 262 | 130 | 132 | |||||||||||||||||||||||||||||
Net income | $ | 235 | $ | 263 | $ | 202 | $ | 170 | $ | 110 | $ | 125 | $ | 870 | $ | 716 | $ | 154 | ||||||||||||||||||||
Pre-tax adjusted operating income reconciliation: | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 308 | $ | 347 | $ | 260 | $ | 217 | $ | 138 | $ | 170 | $ | 1,132 | $ | 846 | $ | 286 | ||||||||||||||||||||
Investment and derivative (gains) losses (1) | 30 | (77 | ) | (22 | ) | 13 | 32 | (2 | ) | (56 | ) | 153 | (209 | ) | ||||||||||||||||||||||||
Change in value of modified coinsurance and funds withheld embedded derivatives (1) | 1 | (9 | ) | (5 | ) | 2 | 33 | (32 | ) | (11 | ) | 13 | (24 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | (47 | ) | 42 | 18 | (18 | ) | 77 | (124 | ) | (5 | ) | 15 | (20 | ) | ||||||||||||||||||||||||
Funds withheld (gains) losses - investment income | — | — | (1 | ) | 6 | — | — | 5 | (2 | ) | 7 | |||||||||||||||||||||||||||
EIA embedded derivatives - interest credited | (10 | ) | 36 | 18 | 2 | 13 | (23 | ) | 46 | (17 | ) | 63 | ||||||||||||||||||||||||||
DAC offset, net | (4 | ) | (13 | ) | (3 | ) | (12 | ) | (13 | ) | 9 | (32 | ) | 10 | (42 | ) | ||||||||||||||||||||||
Investment (income) loss on unit-linked variable annuities | 1 | (12 | ) | (3 | ) | (12 | ) | 11 | (10 | ) | (26 | ) | 7 | (33 | ) | |||||||||||||||||||||||
Interest credited on unit-linked variable annuities | (1 | ) | 12 | 3 | 12 | (11 | ) | 10 | 26 | (7 | ) | 33 | ||||||||||||||||||||||||||
Interest expense on uncertain tax positions | 4 | 9 | 2 | 3 | — | 4 | 18 | — | 18 | |||||||||||||||||||||||||||||
Non-investment derivatives | 2 | — | — | — | — | 2 | 2 | — | 2 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 284 | $ | 335 | $ | 267 | $ | 213 | $ | 280 | $ | 4 | $ | 1,099 | $ | 1,018 | $ | 81 | ||||||||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 5 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations) | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
After-tax adjusted operating income reconciliation: | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 235 | $ | 263 | $ | 202 | $ | 170 | $ | 110 | $ | 125 | $ | 870 | $ | 716 | $ | 154 | ||||||||||||||||||||
Investment and derivative (gains) losses (1) | 25 | (61 | ) | (15 | ) | 8 | 24 | 1 | (43 | ) | 120 | (163 | ) | |||||||||||||||||||||||||
Change in value of modified coinsurance and funds withheld embedded derivatives (1) | — | (7 | ) | (4 | ) | 2 | 26 | (26 | ) | (9 | ) | 10 | (19 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | (37 | ) | 33 | 14 | (14 | ) | 61 | (98 | ) | (4 | ) | 12 | (16 | ) | ||||||||||||||||||||||||
Funds withheld (gains) losses - investment income | — | — | (1 | ) | 5 | — | — | 4 | (2 | ) | 6 | |||||||||||||||||||||||||||
EIA embedded derivatives - interest credited | (8 | ) | 28 | 14 | 2 | 11 | (19 | ) | 36 | (13 | ) | 49 | ||||||||||||||||||||||||||
DAC offset, net | (3 | ) | (10 | ) | (3 | ) | (9 | ) | (10 | ) | 7 | (25 | ) | 8 | (33 | ) | ||||||||||||||||||||||
Investment (income) loss on unit-linked variable annuities | — | (9 | ) | (3 | ) | (9 | ) | 9 | (9 | ) | (21 | ) | 6 | (27 | ) | |||||||||||||||||||||||
Interest credited on unit-linked variable annuities | — | 9 | 3 | 9 | (9 | ) | 9 | 21 | (6 | ) | 27 | |||||||||||||||||||||||||||
Interest expense on uncertain tax positions | 3 | 7 | 2 | 2 | — | 3 | 14 | — | 14 | |||||||||||||||||||||||||||||
Non-investment derivatives | 2 | — | — | — | — | 2 | 2 | — | 2 | |||||||||||||||||||||||||||||
Uncertain tax positions and other tax related items | 2 | 3 | 2 | 1 | — | 2 | 8 | (62 | ) | 70 | ||||||||||||||||||||||||||||
Adjusted operating income | $ | 219 | $ | 256 | $ | 211 | $ | 167 | $ | 222 | $ | (3 | ) | $ | 853 | $ | 789 | $ | 64 | |||||||||||||||||||
Wgt. average common shares outstanding (diluted) | 63,774 | 63,789 | 63,698 | 64,027 | 64,156 | (382 | ) | 63,882 | 65,094 | (1,212 | ) | |||||||||||||||||||||||||||
Diluted earnings per share - adjusted operating income | $ | 3.43 | $ | 4.02 | $ | 3.31 | $ | 2.61 | $ | 3.46 | $ | (0.03 | ) | $ | 13.35 | $ | 12.12 | $ | 1.23 | |||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (5 | ) | $ | (35 | ) | $ | (60 | ) | $ | (79 | ) | $ | (44 | ) | $ | 39 | $ | (179 | ) | $ | 43 | $ | (222 | ) | |||||||||||||
Adjusted operating income before income taxes | $ | 1 | $ | (2 | ) | $ | (5 | ) | $ | (9 | ) | $ | (5 | ) | $ | 6 | $ | (15 | ) | $ | 8 | $ | (23 | ) | ||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 6 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||||||
(USD millions) | ||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 51,121 | $ | 49,481 | $ | 46,189 | $ | 41,738 | $ | 39,992 | ||||||||||
Equity securities | 320 | 135 | 147 | 90 | 82 | |||||||||||||||
Mortgage loans on real estate | 5,706 | 5,647 | 5,405 | 5,118 | 4,966 | |||||||||||||||
Policy loans | 1,319 | 1,290 | 1,320 | 1,312 | 1,345 | |||||||||||||||
Funds withheld at interest | 5,662 | 5,614 | 5,696 | 5,730 | 5,761 | |||||||||||||||
Short-term investments | 64 | 108 | 159 | 119 | 143 | |||||||||||||||
Other invested assets | 2,363 | 2,215 | 2,122 | 2,007 | 1,915 | |||||||||||||||
Total investments | 66,555 | 64,490 | 61,038 | 56,114 | 54,204 | |||||||||||||||
Cash and cash equivalents | 1,449 | 2,636 | 2,288 | 2,020 | 1,890 | |||||||||||||||
Accrued investment income | 493 | 520 | 470 | 443 | 428 | |||||||||||||||
Premiums receivable and other reinsurance balances | 2,940 | 2,818 | 2,945 | 2,858 | 3,018 | |||||||||||||||
Reinsurance ceded receivables | 904 | 863 | 851 | 815 | 758 | |||||||||||||||
Deferred policy acquisition costs | 3,512 | 3,411 | 3,440 | 3,404 | 3,398 | |||||||||||||||
Other assets | 878 | 1,036 | 1,012 | 1,038 | 839 | |||||||||||||||
Total assets | $ | 76,731 | $ | 75,774 | $ | 72,044 | $ | 66,692 | $ | 64,535 | ||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||
Future policy benefits | $ | 28,672 | $ | 27,086 | $ | 26,996 | $ | 25,977 | $ | 25,285 | ||||||||||
Interest-sensitive contract liabilities | 22,711 | 22,345 | 19,749 | 17,750 | 18,005 | |||||||||||||||
Other policy claims and benefits | 5,711 | 6,147 | 6,136 | 5,911 | 5,643 | |||||||||||||||
Other reinsurance balances | 557 | 513 | 513 | 517 | 487 | |||||||||||||||
Deferred income taxes | 2,712 | 2,762 | 2,444 | 2,145 | 1,799 | |||||||||||||||
Other liabilities | 1,188 | 1,406 | 1,481 | 1,278 | 1,396 | |||||||||||||||
Long-term debt | 2,981 | 3,381 | 3,381 | 2,788 | 2,788 | |||||||||||||||
Collateral finance and securitization notes | 598 | 610 | 635 | 656 | 682 | |||||||||||||||
Total liabilities | 65,130 | 64,250 | 61,335 | 57,022 | 56,085 | |||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Common stock, at par value | 1 | 1 | 1 | 1 | 1 | |||||||||||||||
Additional paid-in-capital | 1,937 | 1,928 | 1,920 | 1,906 | 1,899 | |||||||||||||||
Retained earnings | 7,952 | 7,766 | 7,550 | 7,412 | 7,285 | |||||||||||||||
Treasury stock | (1,426 | ) | (1,429 | ) | (1,404 | ) | (1,415 | ) | (1,371 | ) | ||||||||||
Accumulated other comprehensive income (AOCI): | ||||||||||||||||||||
Accumulated currency translation adjustment, net of income taxes | (92 | ) | (157 | ) | (123 | ) | (147 | ) | (169 | ) | ||||||||||
Unrealized appreciation of securities, net of income taxes | 3,299 | 3,472 | 2,816 | 1,964 | 856 | |||||||||||||||
Pension and postretirement benefits, net of income taxes | (70 | ) | (57 | ) | (51 | ) | (51 | ) | (51 | ) | ||||||||||
Total stockholders’ equity | 11,601 | 11,524 | 10,709 | 9,670 | 8,450 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 76,731 | $ | 75,774 | $ | 72,044 | $ | 66,692 | $ | 64,535 | ||||||||||
Total stockholders’ equity, excluding AOCI | $ | 8,464 | $ | 8,266 | $ | 8,067 | $ | 7,904 | $ | 7,814 | ||||||||||
See appendix for reconciliation of total stockholders' equity before and after impact of AOCI. | ||||||||||||||||||||
| Page 7 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | ||||||||||||||||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,558 | $ | 1,404 | $ | 1,410 | $ | 1,357 | $ | 1,501 | $ | 57 | $ | 5,729 | $ | 5,534 | $ | 195 | ||||||||||||||||||||
Investment income, net of related expenses | 200 | 210 | 173 | 186 | 185 | 15 | 769 | 730 | 39 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 2 | (10 | ) | (4 | ) | (6 | ) | 3 | (1 | ) | (18 | ) | 8 | (26 | ) | |||||||||||||||||||||||
Other revenue | 5 | 6 | 6 | 3 | 5 | — | 20 | 24 | (4 | ) | ||||||||||||||||||||||||||||
Total revenues | 1,765 | 1,610 | 1,585 | 1,540 | 1,694 | 71 | 6,500 | 6,296 | 204 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,427 | 1,241 | 1,293 | 1,300 | 1,347 | 80 | 5,261 | 5,049 | 212 | |||||||||||||||||||||||||||||
Interest credited | 19 | 20 | 19 | 20 | 21 | (2 | ) | 78 | 82 | (4 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 195 | 201 | 179 | 177 | 195 | — | 752 | 739 | 13 | |||||||||||||||||||||||||||||
Other operating expenses | 39 | 35 | 39 | 31 | 36 | 3 | 144 | 140 | 4 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,680 | 1,497 | 1,530 | 1,528 | 1,599 | 81 | 6,235 | 6,010 | 225 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 85 | $ | 113 | $ | 55 | $ | 12 | $ | 95 | $ | (10 | ) | $ | 265 | $ | 286 | $ | (21 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 91.6 | % | 88.4 | % | 91.7 | % | 95.8 | % | 89.8 | % | 1.8 | % | 91.8 | % | 91.2 | % | 0.6 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 12.5 | % | 14.4 | % | 12.8 | % | 13.0 | % | 13.0 | % | (0.5 | )% | 13.1 | % | 13.3 | % | (0.2 | )% | ||||||||||||||||||||
Other operating expenses | 2.5 | % | 2.5 | % | 2.6 | % | 2.4 | % | 2.4 | % | 0.1 | % | 2.5 | % | 2.5 | % | — | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1 | $ | — | $ | — | $ | (1 | ) | $ | (1 | ) | $ | 2 | $ | — | $ | (1 | ) | $ | 1 | |||||||||||||||||
Income before income taxes | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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 | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Qtr vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,558 | $ | 1,404 | $ | 1,410 | $ | 1,357 | $ | 1,501 | $ | 57 | $ | 5,729 | $ | 5,534 | $ | 195 | ||||||||||||||||||||
Investment income, net of related expenses | 200 | 210 | 173 | 186 | 185 | 15 | 769 | 730 | 39 | |||||||||||||||||||||||||||||
Other revenue | 5 | 6 | 6 | 3 | 5 | — | 20 | 24 | (4 | ) | ||||||||||||||||||||||||||||
Total revenues | 1,763 | 1,620 | 1,589 | 1,546 | 1,691 | 72 | 6,518 | 6,288 | 230 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,427 | 1,241 | 1,293 | 1,300 | 1,347 | 80 | 5,261 | 5,049 | 212 | |||||||||||||||||||||||||||||
Interest credited | 19 | 20 | 19 | 20 | 21 | (2 | ) | 78 | 82 | (4 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 195 | 201 | 179 | 177 | 195 | — | 752 | 739 | 13 | |||||||||||||||||||||||||||||
Other operating expenses | 39 | 35 | 39 | 31 | 36 | 3 | 144 | 140 | 4 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,680 | 1,497 | 1,530 | 1,528 | 1,599 | 81 | 6,235 | 6,010 | 225 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 83 | $ | 123 | $ | 59 | $ | 18 | $ | 92 | $ | (9 | ) | $ | 283 | $ | 278 | $ | 5 | |||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 91.6 | % | 88.4 | % | 91.7 | % | 95.8 | % | 89.8 | % | 1.8 | % | 91.8 | % | 91.1 | % | 0.7 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 12.5 | % | 14.4 | % | 12.8 | % | 13.0 | % | 13.0 | % | (0.5 | )% | 13.1 | % | 13.4 | % | (0.3 | )% | ||||||||||||||||||||
Other operating expenses | 2.5 | % | 2.5 | % | 2.6 | % | 2.4 | % | 2.4 | % | 0.1 | % | 2.5 | % | 2.5 | % | — | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1 | $ | — | $ | — | $ | (1 | ) | $ | (1 | ) | $ | 2 | $ | — | $ | (1 | ) | $ | 1 | |||||||||||||||||
Adjusted operating income before income taxes | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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 millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 11 | $ | 12 | $ | 9 | $ | 7 | $ | 8 | $ | 3 | $ | 39 | $ | 27 | $ | 12 | ||||||||||||||||||||
Investment income, net of related expenses | 272 | 254 | 204 | 197 | 170 | 102 | 927 | 700 | 227 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | (1 | ) | 58 | 17 | 1 | (59 | ) | 58 | 75 | (57 | ) | 132 | ||||||||||||||||||||||||||
Other revenue | 28 | 36 | 50 | 23 | 27 | 1 | 137 | 128 | 9 | |||||||||||||||||||||||||||||
Total revenues | 310 | 360 | 280 | 228 | 146 | 164 | 1,178 | 798 | 380 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 51 | 49 | 49 | 48 | 45 | 6 | 197 | 130 | 67 | |||||||||||||||||||||||||||||
Interest credited | 144 | 183 | 124 | 89 | 72 | 72 | 540 | 312 | 228 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 28 | 21 | 25 | 19 | 29 | (1 | ) | 93 | 159 | (66 | ) | |||||||||||||||||||||||||||
Other operating expenses | 9 | 7 | 10 | 7 | 6 | 3 | 33 | 29 | 4 | |||||||||||||||||||||||||||||
Total benefits and expenses | 232 | 260 | 208 | 163 | 152 | 80 | 863 | 630 | 233 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 78 | $ | 100 | $ | 72 | $ | 65 | $ | (6 | ) | $ | 84 | $ | 315 | $ | 168 | $ | 147 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 10 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Financial Solutions - Asset-Intensive | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 11 | $ | 12 | $ | 9 | $ | 7 | $ | 8 | $ | 3 | $ | 39 | $ | 27 | $ | 12 | ||||||||||||||||||||
Investment income, net of related expenses | 272 | 254 | 203 | 203 | 170 | 102 | 932 | 698 | 234 | |||||||||||||||||||||||||||||
Other revenue | 28 | 36 | 50 | 23 | 27 | 1 | 137 | 128 | 9 | |||||||||||||||||||||||||||||
Total revenues | 311 | 302 | 262 | 233 | 205 | 106 | 1,108 | 853 | 255 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 51 | 49 | 49 | 48 | 45 | 6 | 197 | 130 | 67 | |||||||||||||||||||||||||||||
Interest credited | 154 | 147 | 106 | 87 | 59 | 95 | 494 | 329 | 165 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 32 | 34 | 28 | 31 | 42 | (10 | ) | 125 | 149 | (24 | ) | |||||||||||||||||||||||||||
Other operating expenses | 9 | 7 | 10 | 7 | 6 | 3 | 33 | 29 | 4 | |||||||||||||||||||||||||||||
Total benefits and expenses | 246 | 237 | 193 | 173 | 152 | 94 | 849 | 637 | 212 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 65 | $ | 65 | $ | 69 | $ | 60 | $ | 53 | $ | 12 | $ | 259 | $ | 216 | $ | 43 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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, | ||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||
Annuity account values: | ||||||||||||||||||||
Fixed annuities (deferred) | $ | 11,140 | $ | 11,149 | $ | 10,374 | $ | 8,311 | $ | 8,461 | ||||||||||
Net interest spread (fixed annuities) | 1.5 | % | 1.4 | % | 1.5 | % | 1.6 | % | 1.5 | % | ||||||||||
Equity-indexed annuities | $ | 3,589 | $ | 3,635 | $ | 3,656 | $ | 3,712 | $ | 3,782 | ||||||||||
Variable annuities account values | ||||||||||||||||||||
No riders | $ | 711 | $ | 1,471 | $ | 1,486 | $ | 702 | $ | 797 | ||||||||||
GMDB only | 837 | 160 | 164 | 164 | 159 | |||||||||||||||
GMIB only | 23 | 22 | 22 | 22 | 21 | |||||||||||||||
GMAB only | 4 | 4 | 4 | 5 | 7 | |||||||||||||||
GMWB only | 1,123 | 1,100 | 1,127 | 1,132 | 1,090 | |||||||||||||||
GMDB / WB | 278 | 272 | 278 | 281 | 272 | |||||||||||||||
Other | 18 | 17 | 17 | 18 | 19 | |||||||||||||||
Total variable annuities account values | $ | 2,994 | $ | 3,046 | $ | 3,098 | $ | 2,324 | $ | 2,365 | ||||||||||
Fair value of liabilities associated with living benefit riders | $ | 163 | $ | 210 | $ | 168 | $ | 150 | $ | 168 | ||||||||||
Interest-sensitive contract liabilities associated with: | ||||||||||||||||||||
Guaranteed investment contracts | $ | 907 | $ | 969 | $ | 1,003 | $ | 999 | $ | 991 | ||||||||||
Bank-owned life insurance (BOLI) | $ | 2,459 | $ | 2,452 | $ | 602 | $ | 599 | $ | 596 | ||||||||||
Other asset-intensive business | $ | 130 | $ | 133 | $ | 133 | $ | 136 | $ | 58 | ||||||||||
Future policy benefits associated with: | ||||||||||||||||||||
Payout annuities | $ | 4,776 | $ | 4,844 | $ | 4,906 | $ | 4,974 | $ | 4,943 | ||||||||||
| Page 12 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Financial Solutions - Capital Solutions | ||||||||||||||||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | — | $ | 4 | $ | 6 | $ | (2 | ) | |||||||||||||||||||
Other revenue | 29 | 22 | 20 | 26 | 26 | 3 | 97 | 103 | (6 | ) | ||||||||||||||||||||||||||||
Total revenues | 30 | 23 | 21 | 27 | 27 | 3 | 101 | 109 | (8 | ) | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1 | — | — | 5 | 4 | (3 | ) | 6 | 16 | (10 | ) | |||||||||||||||||||||||||||
Other operating expenses | 3 | 4 | 1 | 4 | 3 | — | 12 | 10 | 2 | |||||||||||||||||||||||||||||
Total benefits and expenses | 4 | 4 | 1 | 9 | 7 | (3 | ) | 18 | 26 | (8 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 20 | $ | 6 | $ | 83 | $ | 83 | $ | — | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 13 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Financial Solutions - Capital Solutions | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | — | $ | 4 | $ | 6 | $ | (2 | ) | |||||||||||||||||||
Other revenue | 29 | 22 | 20 | 26 | 26 | 3 | 97 | 103 | (6 | ) | ||||||||||||||||||||||||||||
Total revenues | 30 | 23 | 21 | 27 | 27 | 3 | 101 | 109 | (8 | ) | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1 | — | — | 5 | 4 | (3 | ) | 6 | 16 | (10 | ) | |||||||||||||||||||||||||||
Other operating expenses | 3 | 4 | 1 | 4 | 3 | — | 12 | 10 | 2 | |||||||||||||||||||||||||||||
Total benefits and expenses | 4 | 4 | 1 | 9 | 7 | (3 | ) | 18 | 26 | (8 | ) | |||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 20 | $ | 6 | $ | 83 | $ | 83 | $ | — | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 14 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 276 | $ | 271 | $ | 264 | $ | 255 | $ | 268 | $ | 8 | $ | 1,066 | $ | 1,024 | $ | 42 | ||||||||||||||||||||
Investment income, net of related expenses | 52 | 53 | 51 | 49 | 49 | 3 | 205 | 199 | 6 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 3 | 1 | 3 | 7 | (3 | ) | 6 | 14 | (1 | ) | 15 | |||||||||||||||||||||||||||
Other revenue | — | — | — | 1 | — | — | 1 | 2 | (1 | ) | ||||||||||||||||||||||||||||
Total revenues | 331 | 325 | 318 | 312 | 314 | 17 | 1,286 | 1,224 | 62 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 235 | 216 | 206 | 200 | 201 | 34 | 857 | 848 | 9 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 56 | 57 | 57 | 54 | 60 | (4 | ) | 224 | 231 | (7 | ) | |||||||||||||||||||||||||||
Other operating expenses | 12 | 9 | 9 | 7 | 8 | 4 | 37 | 33 | 4 | |||||||||||||||||||||||||||||
Total benefits and expenses | 303 | 282 | 272 | 261 | 269 | 34 | 1,118 | 1,112 | 6 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 28 | $ | 43 | $ | 46 | $ | 51 | $ | 45 | $ | (17 | ) | $ | 168 | $ | 112 | $ | 56 | |||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 85.1 | % | 79.7 | % | 78.0 | % | 78.4 | % | 75.0 | % | 10.1 | % | 80.4 | % | 82.8 | % | (2.4 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 20.3 | % | 21.0 | % | 21.6 | % | 21.2 | % | 22.4 | % | (2.1 | )% | 21.0 | % | 22.6 | % | (1.6 | )% | ||||||||||||||||||||
Other operating expenses | 4.3 | % | 3.3 | % | 3.4 | % | 2.7 | % | 3.0 | % | 1.3 | % | 3.5 | % | 3.2 | % | 0.3 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | (3 | ) | $ | (9 | ) | $ | (13 | ) | $ | (11 | ) | $ | 11 | $ | (25 | ) | $ | — | $ | (25 | ) | ||||||||||||||
Income before income taxes | $ | — | $ | — | $ | (2 | ) | $ | (3 | ) | $ | (2 | ) | $ | 2 | $ | (5 | ) | $ | (1 | ) | $ | (4 | ) | ||||||||||||||
Creditor reinsurance net premiums | $ | 27 | $ | 29 | $ | 27 | $ | 27 | $ | 30 | $ | (3 | ) | $ | 110 | $ | 123 | $ | (13 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 15 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 276 | $ | 271 | $ | 264 | $ | 255 | $ | 268 | $ | 8 | $ | 1,066 | $ | 1,024 | $ | 42 | ||||||||||||||||||||
Investment income, net of related expenses | 52 | 53 | 51 | 49 | 49 | 3 | 205 | 199 | 6 | |||||||||||||||||||||||||||||
Investment related gains, net | 2 | 2 | 2 | 1 | 2 | — | 7 | 5 | 2 | |||||||||||||||||||||||||||||
Other revenue | — | — | — | 1 | — | — | 1 | 2 | (1 | ) | ||||||||||||||||||||||||||||
Total revenues | 330 | 326 | 317 | 306 | 319 | 11 | 1,279 | 1,230 | 49 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 235 | 216 | 206 | 200 | 201 | 34 | 857 | 848 | 9 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 56 | 57 | 57 | 54 | 60 | (4 | ) | 224 | 231 | (7 | ) | |||||||||||||||||||||||||||
Other operating expenses | 12 | 9 | 9 | 7 | 8 | 4 | 37 | 33 | 4 | |||||||||||||||||||||||||||||
Total benefits and expenses | 303 | 282 | 272 | 261 | 269 | 34 | 1,118 | 1,112 | 6 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 27 | $ | 44 | $ | 45 | $ | 45 | $ | 50 | $ | (23 | ) | $ | 161 | $ | 118 | $ | 43 | |||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 85.1 | % | 79.7 | % | 78.0 | % | 78.4 | % | 75.0 | % | 10.1 | % | 80.4 | % | 82.8 | % | (2.4 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 20.3 | % | 21.0 | % | 21.6 | % | 21.2 | % | 22.4 | % | (2.1 | )% | 21.0 | % | 22.6 | % | (1.6 | )% | ||||||||||||||||||||
Other operating expenses | 4.3 | % | 3.3 | % | 3.4 | % | 2.7 | % | 3.0 | % | 1.3 | % | 3.5 | % | 3.2 | % | 0.3 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | (3 | ) | $ | (9 | ) | $ | (13 | ) | $ | (11 | ) | $ | 11 | $ | (25 | ) | $ | — | $ | (25 | ) | ||||||||||||||
Adjusted operating income before income taxes | $ | (1 | ) | $ | — | $ | (2 | ) | $ | (2 | ) | $ | (2 | ) | $ | 1 | $ | (5 | ) | $ | (1 | ) | $ | (4 | ) | |||||||||||||
Creditor reinsurance net premiums | $ | 27 | $ | 29 | $ | 27 | $ | 27 | $ | 30 | $ | (3 | ) | $ | 110 | $ | 123 | $ | (13 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 16 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Canada Financial Solutions (1) | ||||||||||||||||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 22 | $ | 22 | $ | 23 | $ | 22 | $ | 10 | $ | 12 | $ | 89 | $ | 43 | $ | 46 | ||||||||||||||||||||
Investment income, net of related expenses | 1 | 1 | — | 1 | 1 | — | 3 | 2 | 1 | |||||||||||||||||||||||||||||
Other revenue | 4 | 1 | 1 | 1 | 1 | 3 | 7 | 4 | 3 | |||||||||||||||||||||||||||||
Total revenues | 27 | 24 | 24 | 24 | 12 | 15 | 99 | 49 | 50 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 19 | 20 | 20 | 21 | 10 | 9 | 80 | 37 | 43 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1 | — | 1 | — | — | 1 | 2 | 1 | 1 | |||||||||||||||||||||||||||||
Other operating expenses | — | 1 | (1 | ) | 2 | — | — | 2 | 1 | 1 | ||||||||||||||||||||||||||||
Total benefits and expenses | 20 | 21 | 20 | 23 | 10 | 10 | 84 | 39 | 45 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | $ | 5 | $ | 15 | $ | 10 | $ | 5 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | — | $ | (1 | ) | $ | (1 | ) | $ | — | $ | — | $ | (2 | ) | $ | — | $ | (2 | ) | ||||||||||||||||
Income before income taxes | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Canada Financial Solutions operations includes longevity and fee-based transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 17 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Canada Financial Solutions (1) | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 22 | $ | 22 | $ | 23 | $ | 22 | $ | 10 | $ | 12 | $ | 89 | $ | 43 | $ | 46 | ||||||||||||||||||||
Investment income, net of related expenses | 1 | 1 | — | 1 | 1 | — | 3 | 2 | 1 | |||||||||||||||||||||||||||||
Other revenue | 4 | 1 | 1 | 1 | 1 | 3 | 7 | 4 | 3 | |||||||||||||||||||||||||||||
Total revenues | 27 | 24 | 24 | 24 | 12 | 15 | 99 | 49 | 50 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 19 | 20 | 20 | 21 | 10 | 9 | 80 | 37 | 43 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1 | — | 1 | — | — | 1 | 2 | 1 | 1 | |||||||||||||||||||||||||||||
Other operating expenses | — | 1 | (1 | ) | 2 | — | — | 2 | 1 | 1 | ||||||||||||||||||||||||||||
Total benefits and expenses | 20 | 21 | 20 | 23 | 10 | 10 | 84 | 39 | 45 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | $ | 5 | $ | 15 | $ | 10 | $ | 5 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | — | $ | (1 | ) | $ | (1 | ) | $ | — | $ | — | $ | (2 | ) | $ | — | $ | (2 | ) | ||||||||||||||||
Adjusted operating income before income taxes | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Canada Financial Solutions operations includes longevity and fee-based 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 millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 368 | $ | 359 | $ | 351 | $ | 364 | $ | 353 | $ | 15 | $ | 1,442 | $ | 1,424 | $ | 18 | ||||||||||||||||||||
Investment income, net of related expenses | 19 | 17 | 18 | 19 | 17 | 2 | 73 | 66 | 7 | |||||||||||||||||||||||||||||
Other revenue | 1 | 2 | 1 | 1 | 2 | (1 | ) | 5 | 5 | — | ||||||||||||||||||||||||||||
Total revenues | 388 | 378 | 370 | 384 | 372 | 16 | 1,520 | 1,495 | 25 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 300 | 297 | 296 | 312 | 305 | (5 | ) | 1,205 | 1,233 | (28 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 30 | 27 | 28 | 29 | 22 | 8 | 114 | 99 | 15 | |||||||||||||||||||||||||||||
Other operating expenses | 35 | 29 | 30 | 27 | 30 | 5 | 121 | 108 | 13 | |||||||||||||||||||||||||||||
Total benefits and expenses | 365 | 353 | 354 | 368 | 357 | 8 | 1,440 | 1,440 | — | |||||||||||||||||||||||||||||
Income before income taxes | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 15 | $ | 8 | $ | 80 | $ | 55 | $ | 25 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 81.5 | % | 82.7 | % | 84.3 | % | 85.8 | % | 86.5 | % | (5.0 | )% | 83.6 | % | 86.7 | % | (3.1 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 8.2 | % | 7.4 | % | 7.9 | % | 8.2 | % | 6.1 | % | 2.1 | % | 7.9 | % | 7.0 | % | 0.9 | % | ||||||||||||||||||||
Other operating expenses | 9.5 | % | 8.1 | % | 8.6 | % | 7.3 | % | 8.4 | % | 1.1 | % | 8.4 | % | 7.5 | % | 0.9 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (4 | ) | $ | (17 | ) | $ | (23 | ) | $ | (33 | ) | $ | (12 | ) | $ | 8 | $ | (77 | ) | $ | 41 | $ | (118 | ) | |||||||||||||
Income before income taxes | $ | (1 | ) | $ | (1 | ) | $ | (1 | ) | $ | (2 | ) | $ | (1 | ) | $ | — | $ | (5 | ) | $ | 2 | $ | (7 | ) | |||||||||||||
Critical illness net premiums | $ | 42 | $ | 49 | $ | 43 | $ | 44 | $ | 45 | $ | (3 | ) | $ | 178 | $ | 188 | $ | (10 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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 | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 368 | $ | 359 | $ | 351 | $ | 364 | $ | 353 | $ | 15 | $ | 1,442 | $ | 1,424 | $ | 18 | ||||||||||||||||||||
Investment income, net of related expenses | 19 | 17 | 18 | 19 | 17 | 2 | 73 | 66 | 7 | |||||||||||||||||||||||||||||
Other revenue | 1 | 2 | 1 | 1 | 2 | (1 | ) | 5 | 5 | — | ||||||||||||||||||||||||||||
Total revenues | 388 | 378 | 370 | 384 | 372 | 16 | 1,520 | 1,495 | 25 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 300 | 297 | 296 | 312 | 305 | (5 | ) | 1,205 | 1,233 | (28 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 30 | 27 | 28 | 29 | 22 | 8 | 114 | 99 | 15 | |||||||||||||||||||||||||||||
Other operating expenses | 35 | 29 | 30 | 27 | 30 | 5 | 121 | 108 | 13 | |||||||||||||||||||||||||||||
Total benefits and expenses | 365 | 353 | 354 | 368 | 357 | 8 | 1,440 | 1,440 | — | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 15 | $ | 8 | $ | 80 | $ | 55 | $ | 25 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 81.5 | % | 82.7 | % | 84.3 | % | 85.8 | % | 86.5 | % | (5.0 | )% | 83.6 | % | 86.7 | % | (3.1 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 8.2 | % | 7.4 | % | 7.9 | % | 8.2 | % | 6.1 | % | 2.1 | % | 7.9 | % | 7.0 | % | 0.9 | % | ||||||||||||||||||||
Other operating expenses | 9.5 | % | 8.1 | % | 8.6 | % | 7.3 | % | 8.4 | % | 1.1 | % | 8.4 | % | 7.5 | % | 0.9 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (4 | ) | $ | (17 | ) | $ | (23 | ) | $ | (33 | ) | $ | (12 | ) | $ | 8 | $ | (77 | ) | $ | 41 | $ | (118 | ) | |||||||||||||
Adjusted operating income before income taxes | $ | (1 | ) | $ | (1 | ) | $ | (1 | ) | $ | (2 | ) | $ | (1 | ) | $ | — | $ | (5 | ) | $ | 2 | $ | (7 | ) | |||||||||||||
Critical illness net premiums | $ | 42 | $ | 49 | $ | 43 | $ | 44 | $ | 45 | $ | (3 | ) | $ | 178 | $ | 188 | $ | (10 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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 millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 54 | $ | 55 | $ | 57 | $ | 52 | $ | 49 | $ | 5 | $ | 218 | $ | 195 | $ | 23 | ||||||||||||||||||||
Investment income, net of related expenses | 45 | 55 | 47 | 48 | 24 | 21 | 195 | 134 | 61 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 1 | 2 | 3 | 3 | (8 | ) | 9 | 9 | 1 | 8 | ||||||||||||||||||||||||||||
Other revenue | 10 | 5 | 7 | 6 | 4 | 6 | 28 | 20 | 8 | |||||||||||||||||||||||||||||
Total revenues | 110 | 117 | 114 | 109 | 69 | 41 | 450 | 350 | 100 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 19 | 34 | 47 | 49 | 34 | (15 | ) | 149 | 123 | 26 | ||||||||||||||||||||||||||||
Interest credited | (1 | ) | 12 | 3 | 12 | (11 | ) | 10 | 26 | (7 | ) | 33 | ||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 10 | — | 1 | 1 | 1 | 9 | 12 | 4 | 8 | |||||||||||||||||||||||||||||
Other operating expenses | 10 | 10 | 11 | 9 | 9 | 1 | 40 | 33 | 7 | |||||||||||||||||||||||||||||
Total benefits and expenses | 38 | 56 | 62 | 71 | 33 | 5 | 227 | 153 | 74 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 72 | $ | 61 | $ | 52 | $ | 38 | $ | 36 | $ | 36 | $ | 223 | $ | 197 | $ | 26 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (4 | ) | $ | (2 | ) | $ | 2 | $ | (10 | ) | $ | 6 | $ | (16 | ) | ||||||||||||||
Income before income taxes | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (3 | ) | $ | (1 | ) | $ | 1 | $ | (9 | ) | $ | 6 | $ | (15 | ) | ||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Europe, Middle East and Africa Financial Solutions operations includes longevity, asset-intensive and fee-based transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 21 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions (1) | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 54 | $ | 55 | $ | 57 | $ | 52 | $ | 49 | $ | 5 | $ | 218 | $ | 195 | $ | 23 | ||||||||||||||||||||
Investment income, net of related expenses | 46 | 43 | 44 | 36 | 35 | 11 | 169 | 141 | 28 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | — | — | 1 | (1 | ) | — | 1 | (1 | ) | |||||||||||||||||||||||||||
Other revenue | 12 | 5 | 7 | 6 | 4 | 8 | 30 | 20 | 10 | |||||||||||||||||||||||||||||
Total revenues | 112 | 103 | 108 | 94 | 89 | 23 | 417 | 357 | 60 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 19 | 34 | 47 | 49 | 34 | (15 | ) | 149 | 123 | 26 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 10 | — | 1 | 1 | 1 | 9 | 12 | 4 | 8 | |||||||||||||||||||||||||||||
Other operating expenses | 10 | 10 | 11 | 9 | 9 | 1 | 40 | 33 | 7 | |||||||||||||||||||||||||||||
Total benefits and expenses | 39 | 44 | 59 | 59 | 44 | (5 | ) | 201 | 160 | 41 | ||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 73 | $ | 59 | $ | 49 | $ | 35 | $ | 45 | $ | 28 | $ | 216 | $ | 197 | $ | 19 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (4 | ) | $ | (2 | ) | $ | 2 | $ | (10 | ) | $ | 6 | $ | (16 | ) | ||||||||||||||
Adjusted operating income before income taxes | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (2 | ) | $ | (1 | ) | $ | 1 | $ | (8 | ) | $ | 5 | $ | (13 | ) | ||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Europe, Middle East and Africa Financial Solutions operations includes longevity, asset-intensive and fee-based transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 22 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 659 | $ | 656 | $ | 606 | $ | 647 | $ | 616 | $ | 43 | $ | 2,568 | $ | 2,296 | $ | 272 | ||||||||||||||||||||
Investment income, net of related expenses | 27 | 27 | 24 | 26 | 24 | 3 | 104 | 96 | 8 | |||||||||||||||||||||||||||||
Other revenue | 3 | 2 | 4 | — | 14 | (11 | ) | 9 | 25 | (16 | ) | |||||||||||||||||||||||||||
Total revenues | 689 | 685 | 634 | 673 | 654 | 35 | 2,681 | 2,417 | 264 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 618 | 585 | 568 | 546 | 523 | 95 | 2,317 | 1,885 | 432 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 13 | 40 | (12 | ) | 51 | 57 | (44 | ) | 92 | 195 | (103 | ) | ||||||||||||||||||||||||||
Other operating expenses | 46 | 38 | 44 | 39 | 40 | 6 | 167 | 159 | 8 | |||||||||||||||||||||||||||||
Total benefits and expenses | 677 | 663 | 600 | 636 | 620 | 57 | 2,576 | 2,239 | 337 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | 34 | $ | (22 | ) | $ | 105 | $ | 178 | $ | (73 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 93.8 | % | 89.0 | % | 93.7 | % | 84.5 | % | 84.8 | % | 9.0 | % | 90.2 | % | 82.1 | % | 8.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 2.0 | % | 6.1 | % | (1.9 | )% | 7.8 | % | 9.1 | % | (7.1 | )% | 3.6 | % | 8.5 | % | (4.9 | )% | ||||||||||||||||||||
Other operating expenses | 7.0 | % | 6.1 | % | 7.0 | % | 6.1 | % | 6.6 | % | 0.4 | % | 6.5 | % | 6.9 | % | (0.4 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (3 | ) | $ | (12 | ) | $ | (23 | ) | $ | (27 | ) | $ | (18 | ) | $ | 15 | $ | (65 | ) | $ | (3 | ) | $ | (62 | ) | ||||||||||||
Income before income taxes | $ | 1 | $ | 3 | $ | 1 | $ | (2 | ) | $ | 1 | $ | — | $ | 3 | $ | 3 | $ | — | |||||||||||||||||||
Critical illness net premiums | $ | 266 | $ | 294 | $ | 243 | $ | 252 | $ | 198 | $ | 68 | $ | 1,055 | $ | 806 | $ | 249 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 23 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 659 | $ | 656 | $ | 606 | $ | 647 | $ | 616 | $ | 43 | $ | 2,568 | $ | 2,296 | $ | 272 | ||||||||||||||||||||
Investment income, net of related expenses | 27 | 27 | 24 | 26 | 24 | 3 | 104 | 96 | 8 | |||||||||||||||||||||||||||||
Other revenue | 3 | 2 | 4 | — | 14 | (11 | ) | 9 | 25 | (16 | ) | |||||||||||||||||||||||||||
Total revenues | 689 | 685 | 634 | 673 | 654 | 35 | 2,681 | 2,417 | 264 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 618 | 585 | 568 | 546 | 523 | 95 | 2,317 | 1,885 | 432 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 13 | 40 | (12 | ) | 51 | 57 | (44 | ) | 92 | 195 | (103 | ) | ||||||||||||||||||||||||||
Other operating expenses | 46 | 38 | 44 | 39 | 40 | 6 | 167 | 159 | 8 | |||||||||||||||||||||||||||||
Total benefits and expenses | 677 | 663 | 600 | 636 | 620 | 57 | 2,576 | 2,239 | 337 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | 34 | $ | (22 | ) | $ | 105 | $ | 178 | $ | (73 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 93.8 | % | 89.0 | % | 93.7 | % | 84.5 | % | 84.8 | % | 9.0 | % | 90.2 | % | 82.1 | % | 8.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 2.0 | % | 6.1 | % | (1.9 | )% | 7.8 | % | 9.1 | % | (7.1 | )% | 3.6 | % | 8.5 | % | (4.9 | )% | ||||||||||||||||||||
Other operating expenses | 7.0 | % | 6.1 | % | 7.0 | % | 6.1 | % | 6.6 | % | 0.4 | % | 6.5 | % | 6.9 | % | (0.4 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (3 | ) | $ | (12 | ) | $ | (23 | ) | $ | (27 | ) | $ | (18 | ) | $ | 15 | $ | (65 | ) | $ | (3 | ) | $ | (62 | ) | ||||||||||||
Adjusted operating income before income taxes | $ | 1 | $ | 3 | $ | 1 | $ | (2 | ) | $ | 1 | $ | — | $ | 3 | $ | 3 | $ | — | |||||||||||||||||||
Critical illness net premiums | $ | 266 | $ | 294 | $ | 243 | $ | 252 | $ | 198 | $ | 68 | $ | 1,055 | $ | 806 | $ | 249 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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 millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 38 | $ | 30 | $ | 44 | $ | 34 | $ | — | $ | 38 | $ | 146 | $ | 1 | $ | 145 | ||||||||||||||||||||
Investment income, net of related expenses | 15 | 10 | 11 | 10 | 9 | 6 | 46 | 40 | 6 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 7 | (1 | ) | (1 | ) | 4 | (15 | ) | 22 | 9 | (10 | ) | 19 | |||||||||||||||||||||||||
Other revenue | 8 | 7 | 5 | 7 | 6 | 2 | 27 | 23 | 4 | |||||||||||||||||||||||||||||
Total revenues | 68 | 46 | 59 | 55 | — | 68 | 228 | 54 | 174 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 34 | 28 | 37 | 32 | 3 | 31 | 131 | 14 | 117 | |||||||||||||||||||||||||||||
Interest credited | 11 | 7 | 6 | 7 | 6 | 5 | 31 | 26 | 5 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5 | 5 | 10 | 5 | — | 5 | 25 | 3 | 22 | |||||||||||||||||||||||||||||
Other operating expenses | 5 | 4 | 4 | 5 | 5 | — | 18 | 17 | 1 | |||||||||||||||||||||||||||||
Total benefits and expenses | 55 | 44 | 57 | 49 | 14 | 41 | 205 | 60 | 145 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 13 | $ | 2 | $ | 2 | $ | 6 | $ | (14 | ) | $ | 27 | $ | 23 | $ | (6 | ) | $ | 29 | ||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Income (loss) before income taxes | $ | — | $ | 1 | $ | — | $ | — | $ | — | $ | — | $ | 1 | $ | — | $ | 1 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Asia Pacific Financial Solutions operations includes asset-intensive and fee-based transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 25 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Financial Solutions (1) | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 38 | $ | 30 | $ | 44 | $ | 34 | $ | — | $ | 38 | $ | 146 | $ | 1 | $ | 145 | ||||||||||||||||||||
Investment income, net of related expenses | 15 | 10 | 11 | 10 | 9 | 6 | 46 | 40 | 6 | |||||||||||||||||||||||||||||
Investment related gains, net | 2 | 2 | 1 | 1 | 1 | 1 | 6 | 3 | 3 | |||||||||||||||||||||||||||||
Other revenue | 8 | 7 | 5 | 7 | 6 | 2 | 27 | 23 | 4 | |||||||||||||||||||||||||||||
Total revenues | 63 | 49 | 61 | 52 | 16 | 47 | 225 | 67 | 158 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 34 | 28 | 37 | 32 | 3 | 31 | 131 | 14 | 117 | |||||||||||||||||||||||||||||
Interest credited | 11 | 7 | 6 | 7 | 6 | 5 | 31 | 26 | 5 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5 | 5 | 10 | 5 | — | 5 | 25 | 3 | 22 | |||||||||||||||||||||||||||||
Other operating expenses | 5 | 4 | 4 | 5 | 5 | — | 18 | 17 | 1 | |||||||||||||||||||||||||||||
Total benefits and expenses | 55 | 44 | 57 | 49 | 14 | 41 | 205 | 60 | 145 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 8 | $ | 5 | $ | 4 | $ | 3 | $ | 2 | $ | 6 | $ | 20 | $ | 7 | $ | 13 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | — | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Adjusted operating income before income taxes | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Asia Pacific Financial Solutions operations includes asset-intensive and fee-based transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 26 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Corporate and Other | ||||||||||||||||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 45 | $ | 51 | $ | 55 | $ | 43 | $ | 42 | $ | 3 | $ | 194 | $ | 166 | $ | 28 | ||||||||||||||||||||
Investment related gains (losses), net | 10 | (1 | ) | (6 | ) | (1 | ) | (57 | ) | 67 | 2 | (111 | ) | 113 | ||||||||||||||||||||||||
Other revenue | 12 | 10 | 13 | 26 | 6 | 6 | 61 | 29 | 32 | |||||||||||||||||||||||||||||
Total revenues | 67 | 60 | 62 | 68 | (9 | ) | 76 | 257 | 84 | 173 | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Interest credited | 7 | 4 | 6 | 5 | 4 | 3 | 22 | 12 | 10 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (29 | ) | (29 | ) | (29 | ) | (29 | ) | (33 | ) | 4 | (116 | ) | (124 | ) | 8 | ||||||||||||||||||||||
Other operating expenses | 75 | 73 | 75 | 71 | 63 | 12 | 294 | 256 | 38 | |||||||||||||||||||||||||||||
Interest expense | 44 | 46 | 43 | 40 | 39 | 5 | 173 | 147 | 26 | |||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6 | 7 | 8 | 8 | 7 | (1 | ) | 29 | 30 | (1 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 103 | 101 | 103 | 95 | 80 | 23 | 402 | 321 | 81 | |||||||||||||||||||||||||||||
Loss before income taxes | $ | (36 | ) | $ | (41 | ) | $ | (41 | ) | $ | (27 | ) | $ | (89 | ) | $ | 53 | $ | (145 | ) | $ | (237 | ) | $ | 92 | |||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Loss before income taxes | $ | — | $ | — | $ | — | $ | — | $ | (1 | ) | $ | 1 | $ | — | $ | — | $ | — | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 27 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Corporate and Other | ||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 45 | $ | 51 | $ | 55 | $ | 43 | $ | 42 | $ | 3 | $ | 194 | $ | 166 | $ | 28 | ||||||||||||||||||||
Investment related gains (losses), net | 2 | 1 | — | 3 | (1 | ) | 3 | 6 | 2 | 4 | ||||||||||||||||||||||||||||
Other revenue | 12 | 10 | 13 | 26 | 6 | 6 | 61 | 29 | 32 | |||||||||||||||||||||||||||||
Total revenues | 59 | 62 | 68 | 72 | 47 | 12 | 261 | 197 | 64 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Interest credited | 7 | 4 | 6 | 5 | 4 | 3 | 22 | 12 | 10 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (29 | ) | (29 | ) | (29 | ) | (29 | ) | (33 | ) | 4 | (116 | ) | (124 | ) | 8 | ||||||||||||||||||||||
Other operating expenses | 75 | 73 | 75 | 71 | 63 | 12 | 294 | 256 | 38 | |||||||||||||||||||||||||||||
Interest expense | 40 | 37 | 41 | 37 | 39 | 1 | 155 | 147 | 8 | |||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6 | 7 | 8 | 8 | 7 | (1 | ) | 29 | 30 | (1 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 99 | 92 | 101 | 92 | 80 | 19 | 384 | 321 | 63 | |||||||||||||||||||||||||||||
Adjusted operating loss before income taxes | $ | (40 | ) | $ | (30 | ) | $ | (33 | ) | $ | (20 | ) | $ | (33 | ) | $ | (7 | ) | $ | (123 | ) | $ | (124 | ) | $ | 1 | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Adjusted operating loss before income taxes | $ | — | $ | — | $ | — | $ | — | $ | (1 | ) | $ | 1 | $ | — | $ | (1 | ) | $ | 1 | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 28 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Summary of Segment GAAP Income | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 85 | $ | 113 | $ | 55 | $ | 12 | $ | 95 | $ | (10 | ) | $ | 265 | $ | 286 | $ | (21 | ) | ||||||||||||||||||
Financial Solutions: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 78 | 100 | 72 | 65 | (6 | ) | 84 | 315 | 168 | 147 | ||||||||||||||||||||||||||||
Capital Solutions | 26 | 19 | 20 | 18 | 20 | 6 | 83 | 83 | — | |||||||||||||||||||||||||||||
Total U.S. and Latin America | 189 | 232 | 147 | 95 | 109 | 80 | 663 | 537 | 126 | |||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Traditional | 28 | 43 | 46 | 51 | 45 | (17 | ) | 168 | 112 | 56 | ||||||||||||||||||||||||||||
Financial Solutions | 7 | 3 | 4 | 1 | 2 | 5 | 15 | 10 | 5 | |||||||||||||||||||||||||||||
Total Canada | 35 | 46 | 50 | 52 | 47 | (12 | ) | 183 | 122 | 61 | ||||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Traditional | 23 | 25 | 16 | 16 | 15 | 8 | 80 | 55 | 25 | |||||||||||||||||||||||||||||
Financial Solutions | 72 | 61 | 52 | 38 | 36 | 36 | 223 | 197 | 26 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 95 | 86 | 68 | 54 | 51 | 44 | 303 | 252 | 51 | |||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Traditional | 12 | 22 | 34 | 37 | 34 | (22 | ) | 105 | 178 | (73 | ) | |||||||||||||||||||||||||||
Financial Solutions | 13 | 2 | 2 | 6 | (14 | ) | 27 | 23 | (6 | ) | 29 | |||||||||||||||||||||||||||
Total Asia Pacific | 25 | 24 | 36 | 43 | 20 | 5 | 128 | 172 | (44 | ) | ||||||||||||||||||||||||||||
Corporate and Other | (36 | ) | (41 | ) | (41 | ) | (27 | ) | (89 | ) | 53 | (145 | ) | (237 | ) | 92 | ||||||||||||||||||||||
Consolidated income before income taxes | $ | 308 | $ | 347 | $ | 260 | $ | 217 | $ | 138 | $ | 170 | $ | 1,132 | $ | 846 | $ | 286 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 29 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Summary of Segment Adjusted Operating Income | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
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, | ||||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | Change | |||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 83 | $ | 123 | $ | 59 | $ | 18 | $ | 92 | $ | (9 | ) | $ | 283 | $ | 278 | $ | 5 | |||||||||||||||||||
Financial Solutions: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 65 | 65 | 69 | 60 | 53 | 12 | 259 | 216 | 43 | |||||||||||||||||||||||||||||
Capital Solutions | 26 | 19 | 20 | 18 | 20 | 6 | 83 | 83 | — | |||||||||||||||||||||||||||||
Total U.S. and Latin America | 174 | 207 | 148 | 96 | 165 | 9 | 625 | 577 | 48 | |||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Traditional | 27 | 44 | 45 | 45 | 50 | (23 | ) | 161 | 118 | 43 | ||||||||||||||||||||||||||||
Financial Solutions | 7 | 3 | 4 | 1 | 2 | 5 | 15 | 10 | 5 | |||||||||||||||||||||||||||||
Total Canada | 34 | 47 | 49 | 46 | 52 | (18 | ) | 176 | 128 | 48 | ||||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Traditional | 23 | 25 | 16 | 16 | 15 | 8 | 80 | 55 | 25 | |||||||||||||||||||||||||||||
Financial Solutions | 73 | 59 | 49 | 35 | 45 | 28 | 216 | 197 | 19 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 96 | 84 | 65 | 51 | 60 | 36 | 296 | 252 | 44 | |||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Traditional | 12 | 22 | 34 | 37 | 34 | (22 | ) | 105 | 178 | (73 | ) | |||||||||||||||||||||||||||
Financial Solutions | 8 | 5 | 4 | 3 | 2 | 6 | 20 | 7 | 13 | |||||||||||||||||||||||||||||
Total Asia Pacific | 20 | 27 | 38 | 40 | 36 | (16 | ) | 125 | 185 | (60 | ) | |||||||||||||||||||||||||||
Corporate and Other | (40 | ) | (30 | ) | (33 | ) | (20 | ) | (33 | ) | (7 | ) | (123 | ) | (124 | ) | 1 | |||||||||||||||||||||
Consolidated adjusted operating income before income taxes | $ | 284 | $ | 335 | $ | 267 | $ | 213 | $ | 280 | $ | 4 | $ | 1,099 | $ | 1,018 | $ | 81 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 30 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||
Investments | ||||||||||||||||||||
(USD millions) | ||||||||||||||||||||
Cash and Invested Assets | ||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||
Fixed maturity securities, available-for-sale (1) | $ | 51,121 | $ | 49,481 | $ | 46,189 | $ | 41,738 | $ | 39,992 | ||||||||||
Equity securities | 320 | 135 | 147 | 90 | 82 | |||||||||||||||
Mortgage loans on real estate | 5,706 | 5,647 | 5,405 | 5,118 | 4,966 | |||||||||||||||
Policy loans | 1,319 | 1,290 | 1,320 | 1,312 | 1,345 | |||||||||||||||
Funds withheld at interest | 5,662 | 5,614 | 5,696 | 5,730 | 5,761 | |||||||||||||||
Short-term investments | 64 | 108 | 159 | 119 | 143 | |||||||||||||||
Other invested assets | 2,363 | 2,215 | 2,122 | 2,007 | 1,915 | |||||||||||||||
Cash and cash equivalents | 1,449 | 2,636 | 2,288 | 2,020 | 1,890 | |||||||||||||||
Total cash and invested assets | $ | 68,004 | $ | 67,126 | $ | 63,326 | $ | 58,134 | $ | 56,094 | ||||||||||
(1) The Company holds various types of fixed maturity securities available-for-sale and classifies them as corporate securities (“Corporate”), Canadian and Canadian provincial government securities (“Canadian government”), residential mortgage-backed securities (“RMBS”), asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), U.S. government and agencies (“U.S. government”), state and political subdivisions, and other foreign government, supernational and foreign government-sponsored enterprises (“Other foreign government”). | ||||||||||||||||||||
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, | ||||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | Change | |||||||||||||||||||||||||||||||
Average invested assets at amortized cost (1) | $ | 29,513 | $ | 29,043 | $ | 28,487 | $ | 28,097 | $ | 27,388 | $ | 2,125 | $ | 28,300 | $ | 26,641 | $ | 1,659 | ||||||||||||||||||||
Net investment income (1) | $ | 330 | $ | 344 | $ | 307 | $ | 310 | $ | 299 | $ | 31 | $ | 1,291 | $ | 1,185 | $ | 106 | ||||||||||||||||||||
Annualized investment yield (ratio of net investment income to average invested assets at amortized cost) (1) | 4.55 | % | 4.83 | % | 4.38 | % | 4.49 | % | 4.44 | % | 11 bps | 4.56 | % | 4.45 | % | 11 bps | ||||||||||||||||||||||
(1) Excludes spread related business (e.g. coinsurance of annuities). | ||||||||||||||||||||||||||||||||||||||
| Page 31 | |
Reinsurance Group of America, Incorporated | |||||||||||||||||||||||
Investments | |||||||||||||||||||||||
(USD millions) | |||||||||||||||||||||||
Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Fixed Maturity Securities | |||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate | $ | 29,205 | $ | 2,269 | $ | 81 | $ | 31,393 | 61.4 | % | $ | — | |||||||||||
Canadian governments | 3,016 | 1,596 | — | 4,612 | 9.0 | % | — | ||||||||||||||||
RMBS | 2,339 | 62 | 3 | 2,398 | 4.7 | % | — | ||||||||||||||||
ABS | 2,973 | 19 | 14 | 2,978 | 5.8 | % | — | ||||||||||||||||
CMBS | 1,841 | 61 | 3 | 1,899 | 3.7 | % | — | ||||||||||||||||
U.S. government | 2,096 | 57 | 1 | 2,152 | 4.2 | % | — | ||||||||||||||||
State and political subdivisions | 1,074 | 93 | 3 | 1,164 | 2.3 | % | — | ||||||||||||||||
Other foreign government | 4,209 | 321 | 5 | 4,525 | 8.9 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 46,753 | $ | 4,478 | $ | 110 | $ | 51,121 | 100.0 | % | $ | — | |||||||||||
December 31, 2018 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate | $ | 24,006 | $ | 531 | $ | 555 | $ | 23,982 | 59.9 | % | $ | — | |||||||||||
Canadian governments | 2,768 | 1,126 | 2 | 3,892 | 9.7 | % | — | ||||||||||||||||
RMBS | 1,872 | 22 | 25 | 1,869 | 4.7 | % | — | ||||||||||||||||
ABS | 2,172 | 11 | 33 | 2,150 | 5.4 | % | — | ||||||||||||||||
CMBS | 1,428 | 9 | 18 | 1,419 | 3.5 | % | — | ||||||||||||||||
U.S. government | 2,234 | 10 | 58 | 2,186 | 5.5 | % | — | ||||||||||||||||
State and political subdivisions | 721 | 40 | 9 | 752 | 1.9 | % | — | ||||||||||||||||
Other foreign government | 3,681 | 109 | 48 | 3,742 | 9.4 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 38,882 | $ | 1,858 | $ | 748 | $ | 39,992 | 100.0 | % | $ | — | |||||||||||
| Page 32 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||
Corporate Fixed Maturity Securities by Industry | ||||||||||||||||||||||||||
December 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||
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 | $ | 5,443 | $ | 5,804 | 18.6 | % | A- | $ | 4,854 | $ | 4,835 | 20.1 | % | A- | ||||||||||||
Brokerage/asset managers/exchanges | 756 | 811 | 2.6 | % | A- | 582 | 583 | 2.4 | % | A- | ||||||||||||||||
Finance companies | 241 | 255 | 0.8 | % | BBB | 185 | 179 | 0.7 | % | BBB | ||||||||||||||||
Insurance | 3,178 | 3,429 | 10.9 | % | A- | 2,294 | 2,264 | 9.4 | % | BBB+ | ||||||||||||||||
REITs | 716 | 760 | 2.4 | % | A- | 639 | 639 | 2.7 | % | BBB+ | ||||||||||||||||
Other finance | 562 | 594 | 1.9 | % | A- | 240 | 231 | 1.0 | % | A- | ||||||||||||||||
Total financial institutions | $ | 10,896 | $ | 11,653 | 37.2 | % | $ | 8,794 | $ | 8,731 | 36.3 | % | ||||||||||||||
Industrials | ||||||||||||||||||||||||||
Basic | $ | 1,790 | $ | 1,925 | 6.1 | % | BBB | $ | 1,297 | $ | 1,288 | 5.4 | % | BBB | ||||||||||||
Capital goods | 1,292 | 1,353 | 4.3 | % | BBB | 1,198 | 1,185 | 4.9 | % | BBB | ||||||||||||||||
Communications | 2,126 | 2,346 | 7.5 | % | BBB+ | 1,904 | 1,917 | 8.0 | % | BBB | ||||||||||||||||
Consumer cyclical | 1,477 | 1,571 | 5.0 | % | BBB+ | 1,188 | 1,188 | 5.0 | % | A- | ||||||||||||||||
Consumer noncyclical | 2,898 | 3,147 | 10.0 | % | BBB+ | 2,584 | 2,581 | 10.8 | % | BBB+ | ||||||||||||||||
Energy | 1,939 | 2,099 | 6.7 | % | BBB+ | 1,800 | 1,815 | 7.6 | % | BBB+ | ||||||||||||||||
Technology | 974 | 1,027 | 3.3 | % | A- | 767 | 769 | 3.2 | % | A- | ||||||||||||||||
Transportation | 1,791 | 1,919 | 6.1 | % | A- | 1,321 | 1,320 | 5.5 | % | A- | ||||||||||||||||
Other industrial | 405 | 416 | 1.3 | % | BBB+ | 278 | 279 | 1.2 | % | BBB+ | ||||||||||||||||
Total industrials | $ | 14,692 | $ | 15,803 | 50.3 | % | $ | 12,337 | $ | 12,342 | 51.6 | % | ||||||||||||||
Utilities | ||||||||||||||||||||||||||
Electric | $ | 2,810 | $ | 3,046 | 9.7 | % | A- | $ | 2,245 | $ | 2,255 | 9.4 | % | A- | ||||||||||||
Natural gas | 475 | 516 | 1.6 | % | A- | 359 | 365 | 1.5 | % | A- | ||||||||||||||||
Other utility | 332 | 375 | 1.2 | % | A- | 271 | 289 | 1.2 | % | A- | ||||||||||||||||
Total utilities | $ | 3,617 | $ | 3,937 | 12.5 | % | $ | 2,875 | $ | 2,909 | 12.1 | % | ||||||||||||||
Total | $ | 29,205 | $ | 31,393 | 100.0 | % | BBB+ | $ | 24,006 | $ | 23,982 | 100.0 | % | BBB+ | ||||||||||||
(1) The Average Credit Rating designations are based on the ratings from nationally recognized statistical rating organizations (NRSRO), primarily those assigned by Moody’s, S&P and Fitch. | ||||||||||||||||||||||||||
| Page 33 | |
Reinsurance Group of America, Incorporated
Investments
(USD millions)
Ratings of Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 30,100 | $ | 33,284 | 65.2 | % | $ | 28,620 | $ | 32,128 | 64.9 | % | $ | 27,571 | $ | 30,513 | 66.1 | % | $ | 25,497 | $ | 27,674 | 66.3 | % | $ | 24,904 | $ | 26,180 | 65.5 | % | ||||||||||||||||||||||||||
2 | BBB | 14,366 | 15,514 | 30.3 | % | 14,130 | 15,213 | 30.7 | % | 12,942 | 13,705 | 29.7 | % | 11,873 | 12,245 | 29.3 | % | 12,142 | 12,023 | 30.1 | % | ||||||||||||||||||||||||||||||||||||
3 | BB | 1,706 | 1,748 | 3.4 | % | 1,586 | 1,611 | 3.3 | % | 1,389 | 1,408 | 3.0 | % | 1,319 | 1,319 | 3.2 | % | 1,409 | 1,371 | 3.4 | % | ||||||||||||||||||||||||||||||||||||
4 | B | 514 | 518 | 1.0 | % | 443 | 444 | 0.9 | % | 490 | 495 | 1.1 | % | 420 | 422 | 1.0 | % | 396 | 386 | 1.0 | % | ||||||||||||||||||||||||||||||||||||
5 | CCC | 36 | 23 | — | % | 30 | 29 | 0.1 | % | 15 | 16 | — | % | 13 | 14 | — | % | 13 | 13 | — | % | ||||||||||||||||||||||||||||||||||||
6 | In or near default | 31 | 34 | 0.1 | % | 51 | 56 | 0.1 | % | 51 | 52 | 0.1 | % | 67 | 64 | 0.2 | % | 18 | 19 | — | % | ||||||||||||||||||||||||||||||||||||
Total | $ | 46,753 | $ | 51,121 | 100.0 | % | $ | 44,860 | $ | 49,481 | 100.0 | % | $ | 42,458 | $ | 46,189 | 100.0 | % | $ | 39,189 | $ | 41,738 | 100.0 | % | $ | 38,882 | $ | 39,992 | 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 ratings 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, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||
RMBS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Agency | $ | 742 | $ | 777 | 10.6 | % | $ | 787 | $ | 834 | 11.9 | % | $ | 893 | $ | 929 | 14.2 | % | $ | 799 | $ | 815 | 14.4 | % | $ | 811 | $ | 814 | 15.0 | % | |||||||||||||||||||||||||
Non-agency | 1,597 | 1,621 | 22.3 | % | 1,574 | 1,606 | 22.8 | % | 1,322 | 1,348 | 20.7 | % | 1,171 | 1,179 | 20.8 | % | 1,061 | 1,055 | 19.4 | % | |||||||||||||||||||||||||||||||||||
Total RMBS | 2,339 | 2,398 | 32.9 | % | 2,361 | 2,440 | 34.7 | % | 2,215 | 2,277 | 34.9 | % | 1,970 | 1,994 | 35.2 | % | 1,872 | 1,869 | 34.4 | % | |||||||||||||||||||||||||||||||||||
ABS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized loan obligations ("CLOs") | 1,750 | 1,743 | 24.0 | % | 1,590 | 1,581 | 22.4 | % | 1,443 | 1,434 | 22.0 | % | 1,323 | 1,311 | 23.1 | % | 1,212 | 1,184 | 21.8 | % | |||||||||||||||||||||||||||||||||||
ABS, excluding CLOs | 1,223 | 1,235 | 17.0 | % | 1,219 | 1,242 | 17.6 | % | 1,039 | 1,060 | 16.3 | % | 920 | 931 | 16.4 | % | 960 | 966 | 17.7 | % | |||||||||||||||||||||||||||||||||||
Total ABS | 2,973 | 2,978 | 41.0 | % | 2,809 | 2,823 | 40.0 | % | 2,482 | 2,494 | 38.3 | % | 2,243 | 2,242 | 39.5 | % | 2,172 | 2,150 | 39.5 | % | |||||||||||||||||||||||||||||||||||
CMBS | $ | 1,841 | $ | 1,899 | 26.1 | % | $ | 1,698 | $ | 1,782 | 25.3 | % | $ | 1,687 | $ | 1,747 | 26.8 | % | $ | 1,405 | $ | 1,432 | 25.3 | % | $ | 1,428 | $ | 1,419 | 26.1 | % | |||||||||||||||||||||||||
Total | $ | 7,153 | $ | 7,275 | 100.0 | % | $ | 6,868 | $ | 7,045 | 100.0 | % | $ | 6,384 | $ | 6,518 | 100.0 | % | $ | 5,618 | $ | 5,668 | 100.0 | % | $ | 5,472 | $ | 5,438 | 100.0 | % | |||||||||||||||||||||||||
| Page 34 | |
Reinsurance Group of America, Incorporated | |||||||||||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||||||||
(USD millions) | |||||||||||||||||||||||||||||||||||
Gross Unrealized Losses Aging | |||||||||||||||||||||||||||||||||||
Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||
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% | $ | 76 | 69.1 | % | $ | 76 | 74.5 | % | $ | 73 | 76.1 | % | $ | 208 | 90.5 | % | $ | 721 | 96.4 | % | |||||||||||||||
20% or more for less than six months | 20 | 18.2 | % | 10 | 9.8 | % | 22 | 22.9 | % | 21 | 9.1 | % | 21 | 2.8 | % | ||||||||||||||||||||
20% or more for six months or greater | 14 | 12.7 | % | 16 | 15.7 | % | 1 | 1.0 | % | 1 | 0.4 | % | 6 | 0.8 | % | ||||||||||||||||||||
Total | $ | 110 | 100.0 | % | $ | 102 | 100.0 | % | $ | 96 | 100.0 | % | $ | 230 | 100.0 | % | $ | 748 | 100.0 | % | |||||||||||||||
| Page 35 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Fixed Maturity Securities Below Amortized Cost | ||||||||||||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||
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 | $ | 1,936 | $ | 29 | $ | 293 | $ | 7 | $ | 2,229 | $ | 36 | ||||||||||||
Canadian governments | — | — | — | — | — | — | ||||||||||||||||||
RMBS | 367 | 2 | 84 | 1 | 451 | 3 | ||||||||||||||||||
ABS | 773 | 5 | 739 | 9 | 1,512 | 14 | ||||||||||||||||||
CMBS | 253 | 3 | — | — | 253 | 3 | ||||||||||||||||||
U.S. government | 49 | 1 | — | — | 49 | 1 | ||||||||||||||||||
State and political subdivisions | 103 | 2 | 12 | 1 | 115 | 3 | ||||||||||||||||||
Other foreign government | 278 | 4 | — | — | 278 | 4 | ||||||||||||||||||
Total investment grade securities | $ | 3,759 | $ | 46 | $ | 1,128 | $ | 18 | $ | 4,887 | $ | 64 | ||||||||||||
Below-investment grade securities: | ||||||||||||||||||||||||
Corporate | $ | 220 | $ | 38 | $ | 100 | $ | 7 | $ | 320 | $ | 45 | ||||||||||||
Other foreign government | — | — | 10 | 1 | 10 | 1 | ||||||||||||||||||
Total below investment grade securities | $ | 220 | $ | 38 | $ | 110 | $ | 8 | $ | 330 | $ | 46 | ||||||||||||
Total fixed maturity securities | $ | 3,979 | $ | 84 | $ | 1,238 | $ | 26 | $ | 5,217 | $ | 110 | ||||||||||||
| Page 36 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Fixed Maturity Securities Below Amortized Cost | ||||||||||||||||||||||||
As of December 31, 2018 | ||||||||||||||||||||||||
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 | $ | 8,505 | $ | 302 | $ | 3,612 | $ | 195 | $ | 12,117 | $ | 497 | ||||||||||||
Canadian governments | — | — | 132 | 2 | 132 | 2 | ||||||||||||||||||
RMBS | 270 | 2 | 836 | 23 | 1,106 | 25 | ||||||||||||||||||
ABS | 1,102 | 24 | 382 | 9 | 1,484 | 33 | ||||||||||||||||||
CMBS | 384 | 4 | 415 | 14 | 799 | 18 | ||||||||||||||||||
U.S. government | — | — | 1,086 | 58 | 1,086 | 58 | ||||||||||||||||||
State and political subdivisions | 104 | 2 | 157 | 7 | 261 | 9 | ||||||||||||||||||
Other foreign government | 790 | 25 | 473 | 17 | 1,263 | 42 | ||||||||||||||||||
Total investment grade securities | $ | 11,155 | $ | 359 | $ | 7,093 | $ | 325 | $ | 18,248 | $ | 684 | ||||||||||||
Below-investment grade securities: | ||||||||||||||||||||||||
Corporate | $ | 756 | $ | 43 | $ | 123 | $ | 15 | $ | 879 | $ | 58 | ||||||||||||
Other foreign government | 129 | 6 | — | — | 129 | 6 | ||||||||||||||||||
Total below investment grade securities | $ | 885 | $ | 49 | $ | 123 | $ | 15 | $ | 1,008 | $ | 64 | ||||||||||||
Total fixed maturity securities | $ | 12,040 | $ | 408 | $ | 7,216 | $ | 340 | $ | 19,256 | $ | 748 | ||||||||||||
| Page 37 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
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, | ||||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | Change | |||||||||||||||||||||||||||||||
Fixed maturity securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||
Other-than-temporary impairment losses on fixed maturities | $ | (13 | ) | $ | (9 | ) | $ | — | $ | (9 | ) | $ | (14 | ) | $ | 1 | $ | (31 | ) | $ | (28 | ) | $ | (3 | ) | |||||||||||||
Gain on investment activity | 35 | 68 | 20 | 28 | 13 | 22 | 151 | 65 | 86 | |||||||||||||||||||||||||||||
Loss on investment activity | (11 | ) | (13 | ) | (7 | ) | (19 | ) | (65 | ) | 54 | (50 | ) | (159 | ) | 109 | ||||||||||||||||||||||
Net gains (losses) on fixed maturity securities available-for-sale | 11 | 46 | 13 | — | (66 | ) | 77 | 70 | (122 | ) | 192 | |||||||||||||||||||||||||||
Net gains (losses) on equity securities | 5 | 4 | 3 | 4 | (16 | ) | 21 | 16 | (20 | ) | 36 | |||||||||||||||||||||||||||
Other impairment losses and change in mortgage loan provision | — | (4 | ) | (6 | ) | (2 | ) | (4 | ) | 4 | (12 | ) | (12 | ) | — | |||||||||||||||||||||||
Other non-derivative gain (loss), net | (1 | ) | 4 | 5 | 5 | 4 | (5 | ) | 13 | 20 | (7 | ) | ||||||||||||||||||||||||||
Free-standing derivatives: | ||||||||||||||||||||||||||||||||||||||
Credit default swaps | 8 | 2 | 5 | 15 | (8 | ) | 16 | 30 | (2 | ) | 32 | |||||||||||||||||||||||||||
Interest rate swaps - non-hedged | (32 | ) | 39 | 34 | 24 | 25 | (57 | ) | 65 | (21 | ) | 86 | ||||||||||||||||||||||||||
Interest rate swaps - hedged | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Foreign currency swaps - non-hedged | 4 | 1 | (6 | ) | 1 | (4 | ) | 8 | — | (4 | ) | 4 | ||||||||||||||||||||||||||
Foreign currency swaps - hedged | 2 | (2 | ) | (3 | ) | (1 | ) | (3 | ) | 5 | (4 | ) | 1 | (5 | ) | |||||||||||||||||||||||
Financial futures | (16 | ) | — | (8 | ) | (22 | ) | 29 | (45 | ) | (46 | ) | 21 | (67 | ) | |||||||||||||||||||||||
CPI swaps | 6 | (8 | ) | (7 | ) | (9 | ) | (9 | ) | 15 | (18 | ) | (10 | ) | (8 | ) | ||||||||||||||||||||||
Equity options | (12 | ) | — | (5 | ) | (23 | ) | 23 | (35 | ) | (40 | ) | 7 | (47 | ) | |||||||||||||||||||||||
Foreign currency forwards | 1 | — | — | — | — | 1 | 1 | — | 1 | |||||||||||||||||||||||||||||
Total free-standing derivatives | (39 | ) | 32 | 10 | (15 | ) | 53 | (92 | ) | (12 | ) | (8 | ) | (4 | ) | |||||||||||||||||||||||
Embedded derivatives: | ||||||||||||||||||||||||||||||||||||||
Modified coinsurance and funds withheld treaties | (1 | ) | 9 | 5 | (2 | ) | (33 | ) | 32 | 11 | (13 | ) | 24 | |||||||||||||||||||||||||
GMXB | 47 | (42 | ) | (18 | ) | 18 | (77 | ) | 124 | 5 | (15 | ) | 20 | |||||||||||||||||||||||||
Total embedded derivatives | 46 | (33 | ) | (13 | ) | 16 | (110 | ) | 156 | 16 | (28 | ) | 44 | |||||||||||||||||||||||||
Net gain (loss) on total derivatives | 7 | (1 | ) | (3 | ) | 1 | (57 | ) | 64 | 4 | (36 | ) | 40 | |||||||||||||||||||||||||
Total investment related gains (losses), net | $ | 22 | $ | 49 | $ | 12 | $ | 8 | $ | (139 | ) | $ | 161 | $ | 91 | $ | (170 | ) | $ | 261 | ||||||||||||||||||
| Page 38 | |
Appendix | ||||
Reconciliations of GAAP to Non-GAAP Measures | ||||
| Page 39 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Reconciliations of GAAP Income to Adjusted Operating Income | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
U.S. & Latin America Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 85 | $ | 113 | $ | 55 | $ | 12 | $ | 95 | $ | (10 | ) | $ | 265 | $ | 286 | $ | (21 | ) | ||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (2 | ) | 10 | 4 | 6 | (3 | ) | 1 | 18 | (8 | ) | 26 | ||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 83 | $ | 123 | $ | 59 | $ | 18 | $ | 92 | $ | (9 | ) | $ | 283 | $ | 278 | $ | 5 | |||||||||||||||||||
U.S. & Latin America Asset-Intensive | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 78 | $ | 100 | $ | 72 | $ | 65 | $ | (6 | ) | $ | 84 | $ | 315 | $ | 168 | $ | 147 | |||||||||||||||||||
Investment and derivative (gains) losses (1) | 45 | (81 | ) | (26 | ) | 21 | (54 | ) | 99 | (41 | ) | 21 | (62 | ) | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | 3 | (19 | ) | (9 | ) | (4 | ) | 36 | (33 | ) | (29 | ) | 21 | (50 | ) | |||||||||||||||||||||||
GMXB embedded derivatives (1) | (47 | ) | 42 | 18 | (18 | ) | 77 | (124 | ) | (5 | ) | 15 | (20 | ) | ||||||||||||||||||||||||
Funds withheld (gains) losses - investment income | — | — | (1 | ) | 6 | — | — | 5 | (2 | ) | 7 | |||||||||||||||||||||||||||
EIA embedded derivatives - interest credited | (10 | ) | 36 | 18 | 2 | 13 | (23 | ) | 46 | (17 | ) | 63 | ||||||||||||||||||||||||||
DAC offset, net | (4 | ) | (13 | ) | (3 | ) | (12 | ) | (13 | ) | 9 | (32 | ) | 10 | (42 | ) | ||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 65 | $ | 65 | $ | 69 | $ | 60 | $ | 53 | $ | 12 | $ | 259 | $ | 216 | $ | 43 | ||||||||||||||||||||
U.S. & Latin America Capital Solutions | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 20 | $ | 6 | $ | 83 | $ | 83 | $ | — | ||||||||||||||||||||
Adjusted operating income before income taxes | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 20 | $ | 6 | $ | 83 | $ | 83 | $ | — | ||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 28 | $ | 43 | $ | 46 | $ | 51 | $ | 45 | $ | (17 | ) | $ | 168 | $ | 112 | $ | 56 | |||||||||||||||||||
Investment and derivative (gains) losses (1) | (1 | ) | 1 | (1 | ) | (6 | ) | 5 | (6 | ) | (7 | ) | 6 | (13 | ) | |||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 27 | $ | 44 | $ | 45 | $ | 45 | $ | 50 | $ | (23 | ) | $ | 161 | $ | 118 | $ | 43 | |||||||||||||||||||
Canada Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | $ | 5 | $ | 15 | $ | 10 | $ | 5 | ||||||||||||||||||||
Adjusted operating income before income taxes | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | $ | 5 | $ | 15 | $ | 10 | $ | 5 | ||||||||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 40 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||||||||||||||
Reconciliations of GAAP Income to Adjusted Operating Income | ||||||||||||||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | vs. PY | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | Quarter | 2019 | 2018 | Change | ||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 15 | $ | 8 | $ | 80 | $ | 55 | $ | 25 | ||||||||||||||||||||
Adjusted operating income before income taxes | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 15 | $ | 8 | $ | 80 | $ | 55 | $ | 25 | ||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 72 | $ | 61 | $ | 52 | $ | 38 | $ | 36 | $ | 36 | $ | 223 | $ | 197 | $ | 26 | ||||||||||||||||||||
Investment and derivative (gains) losses (1) | (1 | ) | (2 | ) | (3 | ) | (3 | ) | 9 | (10 | ) | (9 | ) | — | (9 | ) | ||||||||||||||||||||||
Investment (income) loss on unit-linked variable annuities | 1 | (12 | ) | (3 | ) | (12 | ) | 11 | (10 | ) | (26 | ) | 7 | (33 | ) | |||||||||||||||||||||||
Interest credited on unit-linked variable annuities | (1 | ) | 12 | 3 | 12 | (11 | ) | 10 | 26 | (7 | ) | 33 | ||||||||||||||||||||||||||
Non-investment derivatives | 2 | — | — | — | — | 2 | 2 | — | 2 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 73 | $ | 59 | $ | 49 | $ | 35 | $ | 45 | $ | 28 | $ | 216 | $ | 197 | $ | 19 | ||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | 34 | $ | (22 | ) | $ | 105 | $ | 178 | $ | (73 | ) | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | 34 | $ | (22 | ) | $ | 105 | $ | 178 | $ | (73 | ) | ||||||||||||||||||
Asia Pacific Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 13 | $ | 2 | $ | 2 | $ | 6 | $ | (14 | ) | $ | 27 | $ | 23 | $ | (6 | ) | $ | 29 | ||||||||||||||||||
Investment and derivative (gains) losses (1) | (5 | ) | 3 | 2 | (3 | ) | 16 | (21 | ) | (3 | ) | 13 | (16 | ) | ||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 8 | $ | 5 | $ | 4 | $ | 3 | $ | 2 | $ | 6 | $ | 20 | $ | 7 | $ | 13 | ||||||||||||||||||||
Corporate and Other | ||||||||||||||||||||||||||||||||||||||
Loss before income taxes | $ | (36 | ) | $ | (41 | ) | $ | (41 | ) | $ | (27 | ) | $ | (89 | ) | $ | 53 | $ | (145 | ) | $ | (237 | ) | $ | 92 | |||||||||||||
Investment and derivative (gains) losses (1) | (8 | ) | 2 | 6 | 4 | 56 | (64 | ) | 4 | 113 | (109 | ) | ||||||||||||||||||||||||||
Interest expense on uncertain tax positions | 4 | 9 | 2 | 3 | — | 4 | 18 | — | 18 | |||||||||||||||||||||||||||||
Adjusted operating loss before income taxes | $ | (40 | ) | $ | (30 | ) | $ | (33 | ) | $ | (20 | ) | $ | (33 | ) | $ | (7 | ) | $ | (123 | ) | $ | (124 | ) | $ | 1 | ||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
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Reinsurance Group of America, Incorporated | |||||||||||||||||||||
Reconciliations of Stockholders’ Equity to Stockholders’ Equity Excluding AOCI | |||||||||||||||||||||
(USD millions except per share data) | |||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||||
Stockholders’ equity | $ | 11,601 | $ | 11,524 | $ | 10,709 | $ | 9,670 | $ | 8,450 | |||||||||||
Less effect of AOCI: | |||||||||||||||||||||
Accumulated currency translation adjustments | (92 | ) | (157 | ) | (123 | ) | (147 | ) | (169 | ) | |||||||||||
Unrealized appreciation of securities | 3,299 | 3,472 | 2,816 | 1,964 | 856 | ||||||||||||||||
Pension and postretirement benefits | (70 | ) | (57 | ) | (51 | ) | (51 | ) | (51 | ) | |||||||||||
Stockholders’ equity, excluding AOCI | $ | 8,464 | $ | 8,266 | $ | 8,067 | $ | 7,904 | $ | 7,814 | |||||||||||
Reconciliations of Book Value Per Share to Book Value Per Share Excluding AOCI | |||||||||||||||||||||
Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||||
Book value per share | $ | 185.17 | $ | 184.06 | $ | 170.64 | $ | 154.61 | $ | 134.53 | |||||||||||
Less effect of AOCI: | |||||||||||||||||||||
Accumulated currency translation adjustments | (1.46 | ) | (2.51 | ) | (1.96 | ) | (2.36 | ) | (2.69 | ) | |||||||||||
Unrealized appreciation of securities | 52.65 | 55.46 | 44.87 | 31.41 | 13.63 | ||||||||||||||||
Pension and postretirement benefits | (1.12 | ) | (0.91 | ) | (0.81 | ) | (0.82 | ) | (0.80 | ) | |||||||||||
Book value per share, excluding AOCI | $ | 135.10 | $ | 132.02 | $ | 128.54 | $ | 126.38 | $ | 124.39 | |||||||||||
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