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): May 5, 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 May 5, 2020, Reinsurance Group of America, Incorporated (the "Company") issued (1) a press release (the "Press Release") announcing its earnings for the three-month period ended March 31, 2020, 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 March 31, 2020, 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 May 6, 2020 to discuss the financial and operating results for the three-month period ended March 31, 2020 (the "Earnings Call").
Item 7.01 | Regulation FD Disclosure. |
In connection with the Earnings Call, the Company has prepared a presentation, dated May 5, 2020 (the "Earnings Presentation"), a copy of which is furnished with this report as Exhibit 99.3 and incorporated in this Item 7.01 by reference.
The information set forth in this Current Report on Form 8-K, including the Press Release, Quarterly Financial Supplement and Earnings Presentation, 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: May 5, 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 FIRST QUARTER RESULTS
• | Net loss of $1.41 per diluted share |
• | Adjusted operating income* of $1.41 per diluted share |
• | ROE 5.8% and adjusted operating ROE* 9.5% for the trailing twelve months |
• | Deployed capital of $55 million into in-force and other transactions in the quarter |
ST. LOUIS, May 5, 2020 - Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported a first quarter net loss of $88 million, or $1.41 per diluted share, compared with net income of $170 million, or $2.65 per diluted share, in the prior-year quarter. Adjusted operating income* totaled $89 million, or $1.41 per diluted share, compared with $167 million, or $2.61 per diluted share, the year before. Net foreign currency fluctuations had a favorable effect of $0.05 per diluted share on net income and an adverse effect of $0.01 per diluted share on adjusted operating income as compared with the prior year.
Quarterly Results | ||||||||
($ in millions, except per share data) | 2020 | 2019 | ||||||
Net premiums | $ | 2,819 | $ | 2,738 | ||||
Net income (loss) | (88 | ) | 170 | |||||
Net income (loss) per diluted share | (1.41 | ) | 2.65 | |||||
Adjusted operating income* | 89 | 167 | ||||||
Adjusted operating income per diluted share* | 1.41 | 2.61 | ||||||
Book value per share | 150.88 | 154.61 | ||||||
Book value per share, excluding accumulated other comprehensive income (AOCI)* | 132.55 | 126.38 | ||||||
Total assets | 75,654 | 66,692 | ||||||
* | See ‘Use of Non-GAAP Financial Measures’ below |
In the first quarter, consolidated net premiums totaled $2.8 billion, up 3% from last year’s first quarter, with adverse net foreign currency effects of $33 million. Compared with the year-ago period, excluding spread-based businesses and the value of associated derivatives, investment income decreased 4% and average investment yield was down 41 basis points to 4.08%, attributable to below-average variable investment income.
The effective tax rate this quarter was 8.9% on the pre-tax loss. The effective tax rate was 24.7% on pre-tax adjusted operating income for the quarter, slightly above the expected range of 23% to 24% due to the geographic mix of earnings.
Anna Manning, President and Chief Executive Officer, commented, “These are extremely challenging times for all of us, particularly for those on the front lines of the crisis. Our thoughts are with those most
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affected by this crisis. At RGA, we are focused on the health and well-being of our employees, and on supporting our clients and communities. Millions of families around the world rely on the financial protection that insurance companies provide in times of uncertainty. Although we don’t know how this crisis will ultimately unfold, we are part of an industry that provides support in times like these. RGA remains committed to helping our clients meet our shared responsibilities.
“Moving to first quarter results, our operating results were below our expectations, reflecting the impact of the COVID-19 virus and the turmoil in the financial markets. The net loss was primarily due to the movement in embedded derivatives, which reflected the disruption in the financial markets and the impact on credit spreads. The U.S. Individual Mortality business had elevated claims, attributable to an above-average frequency of claims. While cause of death and definitive COVID-19 impacts are difficult to establish at this time, we believe that some of these additional claims may have been COVID-19 related. The Asia Pacific Traditional segment was negatively affected by some catch-up in reporting of morbidity claims, primarily from one client. On a positive note, many of our segments/businesses performed well, including the Traditional segments in Canada and EMEA, U.S. Group, and Asia financial solutions business. Our Australia business performed better than expected and produced a modest profit. Premium growth was 3%, negatively influenced by foreign currency and some slowdown of growth in Asia given the pandemic.
“Despite the challenging environment, we continue to support our clients, and we executed on a number of in-force transactions, deploying $55 million of capital during the quarter. We repurchased $153 million in stock earlier in the quarter. We ended the quarter with an excess capital position of approximately $700 million.
“COVID-19 and its related effects will present challenges in terms of the potential for higher claims and increased investment credit losses. While it is premature to accurately predict the ultimate impact of this virus on RGA, we believe that we can manage through the environment, given our strong balance sheet, excess capital, ample liquidity, and an investment portfolio that is defensively positioned.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
The U.S. and Latin America Traditional segment reported pre-tax loss of $62 million, compared with pre-tax income of $12 million in the first quarter of 2019. Pre-tax adjusted operating loss totaled $55 million, compared with pre-tax adjusted operating income of $18 million the year before. Results reflected unfavorable individual mortality experience due to a higher-than-expected claim count and minimal variable investment income. The excess claims were concentrated in the 70 and older age group.
Traditional net premiums were up 1% from last year’s first quarter to $1,373 million.
Financial Solutions
The Asset-Intensive business reported pre-tax loss of $38 million, compared with pre-tax income of $65 million last year. First quarter pre-tax adjusted operating income totaled $43 million, compared with
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$60 million a year ago. The current-year period results primarily reflected the impact of weak equity markets.
The Capital Solutions business reported pre-tax income and pre-tax adjusted operating income of $23 million, up from $18 million the year before due to new business added in the fourth quarter of 2019.
Canada
Traditional
The Canada Traditional segment reported pre-tax income of $23 million, compared with $51 million the year before. Pre-tax adjusted operating income totaled $36 million, compared with $45 million a year ago, reflecting favorable individual mortality experience. The year-ago period reflected favorable individual mortality experience to a greater extent than that of this quarter. Foreign currency exchange rates had a favorable effect of $1 million on pre-tax income and pre-tax adjusted operating income.
Reported net premiums totaled $260 million for the quarter, up 2% over the year-ago period. Net foreign currency fluctuations had an adverse effect of $3 million on net premiums.
Financial Solutions
The Canada Financial Solutions business segment, which consists of longevity and fee-based transactions, reported first quarter pre-tax income and pre-tax adjusted operating income of $3 million, compared with $1 million a year ago. Current-period results were relatively in line with expectations. 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 $17 million compared with $16 million in last year’s first quarter. Results reflected favorable underwriting experience, particularly in the U.K. Net foreign currency fluctuations had an immaterial effect on pre-tax income and pre-tax adjusted operating income.
Reported net premiums increased 7% to $390 million in the first quarter, reflecting growth in continental Europe. Foreign currency exchange rates adversely affected net premiums by $13 million.
Financial Solutions
The EMEA Financial Solutions business segment, which consists of longevity, asset-intensive and fee-based transactions, reported first quarter pre-tax income of $30 million, compared with $38 million in the year-ago period. Pre-tax adjusted operating income totaled $36 million, compared with $35 million in the year-ago period. The current-year period results reflected modestly unfavorable longevity experience. Net foreign currency fluctuations had an adverse effect of $1 million on pre-tax income and pre-tax adjusted operating income.
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Asia Pacific
Traditional
The Asia Pacific Traditional segment’s pre-tax income and pre-tax adjusted operating income totaled
$24 million, compared with $37 million in the prior-year period. The current-period results reflected reporting catch-ups on morbidity claims, primarily from one client in Asia. Australia reported a modest profit. Net foreign currency fluctuations had an adverse effect of $1 million on pre-tax income and pre-tax adjusted operating income.
Reported net premiums totaled $636 million, down slightly from the prior-year period due to a slowdown in Asia and lower premiums in Australia. Foreign currency exchange rates had an adverse effect of $16 million on net premiums.
Financial Solutions
The Asia Pacific Financial Solutions business segment, which consists of asset-intensive and fee-based transactions, reported first quarter pre-tax loss of $25 million, compared with pre-tax income of $6 million in the prior-year period. Pre-tax adjusted operating income totaled $10 million, compared with $3 million the year before, attributable to new business. Net foreign currency fluctuations had a favorable effect of $2 million on pre-tax income and an immaterial effect on pre-tax adjusted operating income.
Reported net premiums increased significantly to $74 million, attributable to new treaties added in 2019. 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 first quarter totaled $91 million, compared with pre-tax losses of $27 million the year before. Pre-tax adjusted operating losses totaled $19 million, compared with year-ago pre-tax adjusted operating losses of $20 million. The current-period loss was lower than the average expected run rate, primarily due to lower general expenses.
Dividend Declaration
The board of directors declared a regular quarterly dividend of $0.70, payable June 4 to shareholders of record as of May 21.
Earnings Conference Call
A conference call to discuss first quarter results will begin at 9 a.m. Eastern Time on Wednesday, May 6. Interested parties may access the call by dialing 800-458-4121 (domestic) or 323-794-2423 (international). The access code is 4450118. 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 an earnings presentation and a Quarterly Financial Supplement that includes financial information for all segments as well as information on its investment portfolio.
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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.
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 $3.4 trillion of life reinsurance in force and assets of $75.7 billion as of March 31, 2020. 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.
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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.
The effects of the COVID-19 pandemic and the response thereto on economic conditions, the financial markets and insurance risks, and the resulting effects on the Company’s financial results, liquidity, capital resources, financial metrics, investment portfolio and stock price, could cause actual results and events to differ materially from those expressed or implied by forward-looking statements. Additionally, numerous other important factors (whether related to, resulting from or exacerbated by the COVID-19 pandemic or otherwise) could also cause 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 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,
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(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 Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as may be supplemented by Item 1A - “Risk Factors” in the Company’s subsequent Quarterly Reports on Form 10-Q.
Investor Contact
Jeff Hopson
Senior Vice President - Investor Relations
(636) 736-2068
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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 March 31, | ||||||||||||||
2020 | 2019 | ||||||||||||||
Diluted Earnings Per Share | Diluted Earnings Per Share | ||||||||||||||
Net income (loss) | $ | (88 | ) | $ | (1.41 | ) | $ | 170 | $ | 2.65 | |||||
Reconciliation to adjusted operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (51 | ) | (0.81 | ) | 9 | 0.14 | |||||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (2 | ) | (0.03 | ) | 5 | 0.08 | |||||||||
Embedded derivatives: | |||||||||||||||
Included in investment related gains/losses, net | 283 | 4.49 | (13 | ) | (0.20 | ) | |||||||||
Included in interest credited | 9 | 0.14 | 2 | 0.03 | |||||||||||
DAC offset, net | (69 | ) | (1.09 | ) | (9 | ) | (0.14 | ) | |||||||
Investment (income) loss on unit-linked variable annuities | 13 | 0.21 | (9 | ) | (0.14 | ) | |||||||||
Interest credited on unit-linked variable annuities | (13 | ) | (0.21 | ) | 9 | 0.14 | |||||||||
Interest expense on uncertain tax positions | 3 | 0.05 | 2 | 0.03 | |||||||||||
Non-investment derivatives | (2 | ) | (0.03 | ) | — | — | |||||||||
Uncertain tax positions and other tax related items | 6 | 0.10 | 1 | 0.02 | |||||||||||
Adjusted operating income | $ | 89 | $ | 1.41 | $ | 167 | $ | 2.61 | |||||||
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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 March 31, 2020 | |||||||||
Pre-tax Income (loss) | Income Taxes | Effective Tax Rate | ||||||||
GAAP income (loss) | $ | (96,157 | ) | $ | (8,512 | ) | 8.9 | % | ||
Reconciliation to adjusted operating income: | ||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (67,450 | ) | (15,654 | ) | ||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (1,826 | ) | (383 | ) | ||||||
Embedded derivatives: | ||||||||||
Included in investment related gains/losses, net | 357,552 | 75,086 | ||||||||
Included in interest credited | 12,027 | 2,526 | ||||||||
DAC offset, net | (86,735 | ) | (18,214 | ) | ||||||
Investment (income) loss on unit-linked variable annuities | 16,389 | 3,442 | ||||||||
Interest credited on unit-linked variable annuities | (16,518 | ) | (3,469 | ) | ||||||
Interest expense on uncertain tax positions | 3,987 | 837 | ||||||||
Non-investment derivatives | (2,967 | ) | (623 | ) | ||||||
Uncertain tax positions and other tax related items | — | (5,823 | ) | |||||||
Adjusted operating income | $ | 118,302 | $ | 29,213 | 24.7 | % | ||||
Reconciliation of Consolidated Income before Income Taxes to Pre-tax Adjusted Operating Income
(Dollars in millions)
(Unaudited) | Three Months Ended March 31, | ||||||
2020 | 2019 | ||||||
Income (loss) before income taxes | $ | (96 | ) | $ | 217 | ||
Reconciliation to pre-tax adjusted operating income: | |||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (68 | ) | 13 | ||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (2 | ) | 6 | ||||
Embedded derivatives: | |||||||
Included in investment related gains/losses, net | 358 | (16 | ) | ||||
Included in interest credited | 12 | 2 | |||||
DAC offset, net | (87 | ) | (12 | ) | |||
Investment (income) loss on unit-linked variable annuities | 16 | (12 | ) | ||||
Interest credited on unit-linked variable annuities | (16 | ) | 12 | ||||
Interest expense on uncertain tax positions | 4 | 3 | |||||
Non-investment derivatives | (3 | ) | — | ||||
Pre-tax adjusted operating income | $ | 118 | $ | 213 | |||
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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 March 31, 2020 | ||||||||||||||
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 | $ | (62 | ) | $ | — | $ | 7 | $ | (55 | ) | |||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | (38 | ) | (190 | ) | (1) | 271 | (2) | 43 | |||||||
Capital Solutions | 23 | — | — | 23 | |||||||||||
Total U.S. and Latin America | (77 | ) | (190 | ) | 278 | 11 | |||||||||
Canada Traditional | 23 | 13 | — | 36 | |||||||||||
Canada Financial Solutions | 3 | — | — | 3 | |||||||||||
Total Canada | 26 | 13 | — | 39 | |||||||||||
EMEA Traditional | 17 | — | — | 17 | |||||||||||
EMEA Financial Solutions | 30 | 6 | — | 36 | |||||||||||
Total EMEA | 47 | 6 | — | 53 | |||||||||||
Asia Pacific Traditional | 24 | — | — | 24 | |||||||||||
Asia Pacific Financial Solutions | (25 | ) | 35 | — | 10 | ||||||||||
Total Asia Pacific | (1 | ) | 35 | — | 34 | ||||||||||
Corporate and Other | (91 | ) | 72 | — | (19 | ) | |||||||||
Consolidated | $ | (96 | ) | $ | (64 | ) | $ | 278 | $ | 118 | |||||
(1) | Asset-Intensive is net of $5 DAC offset. |
(2) | Asset-Intensive is net of $(92) DAC offset. |
(Unaudited) | Three Months Ended March 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 | $ | 12 | $ | — | $ | 6 | $ | 18 | |||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 65 | (4 | ) | (1) | (1 | ) | (2) | 60 | |||||||
Capital Solutions | 18 | — | — | 18 | |||||||||||
Total U.S. and Latin America | 95 | (4 | ) | 5 | 96 | ||||||||||
Canada Traditional | 51 | (6 | ) | — | 45 | ||||||||||
Canada Financial Solutions | 1 | — | — | 1 | |||||||||||
Total Canada | 52 | (6 | ) | — | 46 | ||||||||||
EMEA Traditional | 16 | — | — | 16 | |||||||||||
EMEA Financial Solutions | 38 | (3 | ) | — | 35 | ||||||||||
Total EMEA | 54 | (3 | ) | — | 51 | ||||||||||
Asia Pacific Traditional | 37 | — | — | 37 | |||||||||||
Asia Pacific Financial Solutions | 6 | (3 | ) | — | 3 | ||||||||||
Total Asia Pacific | 43 | (3 | ) | — | 40 | ||||||||||
Corporate and Other | (27 | ) | 7 | — | (20 | ) | |||||||||
Consolidated | $ | 217 | $ | (9 | ) | $ | 5 | $ | 213 | ||||||
(1) | Asset-Intensive is net of $(31) DAC offset. |
(2) | Asset-Intensive is net of $19 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 March 31, | ||||||
2020 | 2019 | ||||||
Earnings per share from net income: | |||||||
Basic earnings per share | $ | (1.41 | ) | $ | 2.70 | ||
Diluted earnings per share (1) | $ | (1.41 | ) | $ | 2.65 | ||
Diluted earnings per share from adjusted operating income | $ | 1.41 | $ | 2.61 | |||
Weighted average number of common and common equivalent shares outstanding | 63,001 | 64,027 | |||||
(1) | As a result of anti-dilutive impact, in periods of a loss, weighted average common shares outstanding (basic) are used in the calculation of diluted earnings per share. |
(Unaudited) | At March 31, | ||||||
2020 | 2019 | ||||||
Treasury shares | 17,492 | 16,594 | |||||
Common shares outstanding | 61,646 | 62,544 | |||||
Book value per share outstanding | $ | 150.88 | $ | 154.61 | |||
Book value per share outstanding, before impact of AOCI | $ | 132.55 | $ | 126.38 | |||
Reconciliation of Book Value Per Share to Book Value Per Share Excluding AOCI
(Unaudited) | At March 31, | ||||||
2020 | 2019 | ||||||
Book value per share outstanding | $ | 150.88 | $ | 154.61 | |||
Less effect of AOCI: | |||||||
Accumulated currency translation adjustments | (3.62 | ) | (2.36 | ) | |||
Unrealized appreciation of securities | 23.14 | 31.41 | |||||
Pension and postretirement benefits | (1.19 | ) | (0.82 | ) | |||
Book value per share outstanding, before impact of AOCI | $ | 132.55 | $ | 126.38 | |||
- more -
Add Eleven
Reconciliation of Stockholders' Average Equity to Stockholders' Average Equity Excluding AOCI
(Dollars in millions)
(Unaudited) | |||
Trailing Twelve Months Ended March 31, 2020: | Average Equity | ||
Stockholders' average equity | $ | 10,561 | |
Less effect of AOCI: | |||
Accumulated currency translation adjustments | (148 | ) | |
Unrealized appreciation of securities | 2,595 | ||
Pension and postretirement benefits | (60 | ) | |
Stockholders' average equity, excluding AOCI | $ | 8,174 | |
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 March 31, 2020: | Income | |||||
Net Income | $ | 612 | 5.8 | % | ||
Reconciliation to adjusted operating income: | ||||||
Capital (gains) losses, derivatives and other, net | (91 | ) | ||||
Change in fair value of embedded derivatives | 326 | |||||
Deferred acquisition cost offset, net | (85 | ) | ||||
Tax expense on uncertain tax positions | 13 | |||||
Adjusted operating income | $ | 775 | 9.5 | % | ||
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in millions)
(Unaudited) | Three Months Ended March 31, | ||||||
2020 | 2019 | ||||||
Revenues: | |||||||
Net premiums | $ | 2,819 | $ | 2,738 | |||
Investment income, net of related expenses | 594 | 580 | |||||
Investment related gains (losses), net: | |||||||
Other-than-temporary impairments on fixed maturity securities | (34 | ) | (9 | ) | |||
Other investment related gains (losses), net | (251 | ) | 17 | ||||
Total investment related gains (losses), net | (285 | ) | 8 | ||||
Other revenue | 76 | 94 | |||||
Total revenues | 3,204 | 3,420 | |||||
Benefits and expenses: | |||||||
Claims and other policy benefits | 2,664 | 2,508 | |||||
Interest credited | 146 | 133 | |||||
Policy acquisition costs and other insurance expenses | 248 | 312 | |||||
Other operating expenses | 195 | 202 | |||||
Interest expense | 41 | 40 | |||||
Collateral finance and securitization expense | 6 | 8 | |||||
Total benefits and expenses | 3,300 | 3,203 | |||||
Income (loss) before income taxes | (96 | ) | 217 | ||||
Provision for income taxes | (8 | ) | 47 | ||||
Net income (loss) | $ | (88 | ) | $ | 170 | ||
Exhibit 99.2
Quarterly Financial Supplement
First Quarter 2020
(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
1st Quarter 2020
Table of Contents
Page | |
Non-GAAP Disclosures | |
2020 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 Traditional | |
U.S. and Latin America Financial Solutions - Asset Intensive | |
U.S. and Latin America Financial Solutions - Capital Solutions | |
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 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. | ||||||||||||||||||||
Financial Instruments - Credit Losses | ||||||||||||||||||||
Effective January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses. Under the new guidance, the Company records an allowance for credit losses on fixed maturity securities available-for-sale. Prior to the adoption, the Company recorded credit losses as a direct reduction in the amortized cost of the securities. The changes to disclosures related to the adoption are reflected in the Investments section of this quarterly financial supplement beginning on page 30. | ||||||||||||||||||||
| Page 2 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | |||||||||||||||||||||||
(USD millions, except in force & per share data) | March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||
Net premiums | $ | 2,819 | $ | 2,986 | $ | 2,809 | $ | 2,764 | $ | 2,738 | $ | 81 | ||||||||||||
Net income (loss) | (88 | ) | 235 | 263 | 202 | 170 | (258 | ) | ||||||||||||||||
Adjusted operating income | 89 | 219 | 256 | 211 | 167 | (78 | ) | |||||||||||||||||
Return on equity - annualized | (3.4 | )% | 8.1 | % | 9.5 | % | 8.0 | % | 7.5 | % | (10.9 | )% | ||||||||||||
Return on equity - trailing 12 months | 5.8 | % | 8.4 | % | 7.6 | % | 8.5 | % | 8.9 | % | (3.1 | )% | ||||||||||||
Adjusted operating return on equity (ex AOCI): | ||||||||||||||||||||||||
Annualized | 4.3 | % | 10.5 | % | 12.6 | % | 10.6 | % | 8.5 | % | (4.2 | )% | ||||||||||||
Trailing 12 months | 9.5 | % | 10.5 | % | 10.7 | % | 11.0 | % | 11.0 | % | (1.5 | )% | ||||||||||||
Total assets | $75,654 | $76,731 | $75,774 | $72,044 | $66,692 | $8,962 | ||||||||||||||||||
Assumed Life Reinsurance In Force (in billions) | ||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 1,618.4 | $ | 1,619.6 | $ | 1,618.5 | $ | 1,623.0 | $ | 1,618.9 | $ | (0.5 | ) | |||||||||||
U.S. and Latin America Financial Solutions | 5.4 | 5.1 | 5.2 | 2.0 | 2.0 | 3.4 | ||||||||||||||||||
Canada Traditional | 389.5 | 417.1 | 401.7 | 406.1 | 394.1 | (4.6 | ) | |||||||||||||||||
Europe, Middle East and Africa Traditional | 763.1 | 776.4 | 707.8 | 715.8 | 726.1 | 37.0 | ||||||||||||||||||
Asia Pacific Traditional | 635.6 | 662.0 | 626.6 | 630.3 | 623.4 | 12.2 | ||||||||||||||||||
Asia Pacific Financial Solutions | 0.4 | — | — | — | 0.1 | 0.3 | ||||||||||||||||||
Total assumed life reinsurance in force | $ | 3,412.4 | $ | 3,480.2 | $ | 3,359.8 | $ | 3,377.2 | $ | 3,364.6 | $ | 47.8 | ||||||||||||
Assumed New Business Production (in billions) | ||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 34.0 | $ | 38.4 | $ | 23.9 | $ | 24.7 | $ | 28.8 | $ | 5.2 | ||||||||||||
U.S. and Latin America Financial Solutions | — | — | 3.2 | — | — | — | ||||||||||||||||||
Canada Traditional | 12.2 | 14.9 | 8.1 | 9.0 | 8.4 | 3.8 | ||||||||||||||||||
Europe, Middle East and Africa Traditional | 32.9 | 55.0 | 32.1 | 27.1 | 33.2 | (0.3 | ) | |||||||||||||||||
Asia Pacific Traditional | 15.7 | 20.2 | 31.0 | 9.6 | 8.9 | 6.8 | ||||||||||||||||||
Total assumed new business production | $ | 94.8 | $ | 128.5 | $ | 98.3 | $ | 70.4 | $ | 79.3 | $ | 15.5 | ||||||||||||
Per Share and Shares Data | ||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||
Net income (loss) | $ | (1.41 | ) | $ | 3.75 | $ | 4.19 | $ | 3.23 | $ | 2.70 | $ | (4.11 | ) | ||||||||||
Adjusted operating income | $ | 1.43 | $ | 3.49 | $ | 4.09 | $ | 3.36 | $ | 2.66 | $ | (1.23 | ) | |||||||||||
Diluted earnings per share (1) | ||||||||||||||||||||||||
Net income (loss) (1) | $ | (1.41 | ) | $ | 3.68 | $ | 4.12 | $ | 3.18 | $ | 2.65 | $ | (4.06 | ) | ||||||||||
Adjusted operating income | $ | 1.41 | $ | 3.43 | $ | 4.02 | $ | 3.31 | $ | 2.61 | $ | (1.20 | ) | |||||||||||
Wgt. average common shares outstanding | ||||||||||||||||||||||||
Basic | 62,138 | 62,633 | 62,666 | 62,678 | 62,758 | (620 | ) | |||||||||||||||||
Diluted | 63,001 | 63,774 | 63,789 | 63,698 | 64,027 | (1,026 | ) | |||||||||||||||||
Common shares issued | 79,138 | 79,138 | 79,138 | 79,138 | 79,138 | — | ||||||||||||||||||
Treasury shares | 17,492 | 16,482 | 16,529 | 16,380 | 16,594 | 898 | ||||||||||||||||||
Common shares outstanding | 61,646 | 62,656 | 62,609 | 62,758 | 62,544 | (898 | ) | |||||||||||||||||
Book value per share | $ | 150.88 | $ | 185.17 | $ | 184.06 | $ | 170.64 | $ | 154.61 | $ | (3.73 | ) | |||||||||||
Per share effect of AOCI | $ | 18.33 | $ | 50.07 | $ | 52.04 | $ | 42.10 | $ | 28.23 | $ | (9.90 | ) | |||||||||||
Book value per share, excluding AOCI | $ | 132.55 | $ | 135.10 | $ | 132.02 | $ | 128.54 | $ | 126.38 | $ | 6.17 | ||||||||||||
Stockholders’ dividends paid | $ | 43.6 | $ | 43.9 | $ | 43.9 | $ | 37.6 | $ | 37.7 | $ | 5.9 | ||||||||||||
(1) As a result of anti-dilutive impact, in periods of a loss, weighted average common shares outstanding (basic) are used in the calculation of diluted earnings per share. | ||||||||||||||||||||||||
| Page 3 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations) | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 2,819 | $ | 2,986 | $ | 2,809 | $ | 2,764 | $ | 2,738 | $ | 81 | ||||||||||||
Investment income, net of related expenses | 594 | 677 | 679 | 584 | 580 | 14 | ||||||||||||||||||
Investment related gains (losses), net | ||||||||||||||||||||||||
Impairments and change in allowance for credit losses on fixed maturity securities | (34 | ) | (13 | ) | (9 | ) | — | (9 | ) | (25 | ) | |||||||||||||
Other investment related gains (losses), net | (251 | ) | 35 | 58 | 12 | 17 | (268 | ) | ||||||||||||||||
Total investment related gains (losses), net | (285 | ) | 22 | 49 | 12 | 8 | (293 | ) | ||||||||||||||||
Other revenue | 76 | 100 | 91 | 107 | 94 | (18 | ) | |||||||||||||||||
Total revenues | 3,204 | 3,785 | 3,628 | 3,467 | 3,420 | (216 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 2,664 | 2,703 | 2,470 | 2,516 | 2,508 | 156 | ||||||||||||||||||
Interest credited | 146 | 180 | 226 | 158 | 133 | 13 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 248 | 310 | 322 | 260 | 312 | (64 | ) | |||||||||||||||||
Other operating expenses | 195 | 234 | 210 | 222 | 202 | (7 | ) | |||||||||||||||||
Interest expense | 41 | 44 | 46 | 43 | 40 | 1 | ||||||||||||||||||
Collateral finance and securitization expense | 6 | 6 | 7 | 8 | 8 | (2 | ) | |||||||||||||||||
Total benefits and expenses | 3,300 | 3,477 | 3,281 | 3,207 | 3,203 | 97 | ||||||||||||||||||
Income (loss) before income taxes | (96 | ) | 308 | 347 | 260 | 217 | (313 | ) | ||||||||||||||||
Provision for income taxes | (8 | ) | 73 | 84 | 58 | 47 | (55 | ) | ||||||||||||||||
Net income (loss) | $ | (88 | ) | $ | 235 | $ | 263 | $ | 202 | $ | 170 | $ | (258 | ) | ||||||||||
Pre-tax adjusted operating income reconciliation: | ||||||||||||||||||||||||
Income (loss) before income taxes | $ | (96 | ) | $ | 308 | $ | 347 | $ | 260 | $ | 217 | $ | (313 | ) | ||||||||||
Investment and derivative (gains) losses (1) | (68 | ) | 30 | (77 | ) | (22 | ) | 13 | (81 | ) | ||||||||||||||
Change in value of modified coinsurance and funds withheld embedded derivatives (1) | 230 | 1 | (9 | ) | (5 | ) | 2 | 228 | ||||||||||||||||
GMXB embedded derivatives (1) | 128 | (47 | ) | 42 | 18 | (18 | ) | 146 | ||||||||||||||||
Funds withheld (gains) losses - investment income | (2 | ) | — | — | (1 | ) | 6 | (8 | ) | |||||||||||||||
EIA embedded derivatives - interest credited | 12 | (10 | ) | 36 | 18 | 2 | 10 | |||||||||||||||||
DAC offset, net | (87 | ) | (4 | ) | (13 | ) | (3 | ) | (12 | ) | (75 | ) | ||||||||||||
Investment (income) loss on unit-linked variable annuities | 16 | 1 | (12 | ) | (3 | ) | (12 | ) | 28 | |||||||||||||||
Interest credited on unit-linked variable annuities | (16 | ) | (1 | ) | 12 | 3 | 12 | (28 | ) | |||||||||||||||
Interest expense on uncertain tax positions | 4 | 4 | 9 | 2 | 3 | 1 | ||||||||||||||||||
Non-investment derivatives | (3 | ) | 2 | — | — | — | (3 | ) | ||||||||||||||||
Adjusted operating income before income taxes | $ | 118 | $ | 284 | $ | 335 | $ | 267 | $ | 213 | $ | (95 | ) | |||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||
| Page 4 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations) | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
After-tax adjusted operating income reconciliation: | ||||||||||||||||||||||||
Net income (loss) | $ | (88 | ) | $ | 235 | $ | 263 | $ | 202 | $ | 170 | $ | (258 | ) | ||||||||||
Investment and derivative (gains) losses (1) | (51 | ) | 25 | (61 | ) | (15 | ) | 8 | (59 | ) | ||||||||||||||
Change in value of modified coinsurance and funds withheld embedded derivatives (1) | 182 | — | (7 | ) | (4 | ) | 2 | 180 | ||||||||||||||||
GMXB embedded derivatives (1) | 101 | (37 | ) | 33 | 14 | (14 | ) | 115 | ||||||||||||||||
Funds withheld (gains) losses - investment income | (2 | ) | — | — | (1 | ) | 5 | (7 | ) | |||||||||||||||
EIA embedded derivatives - interest credited | 9 | (8 | ) | 28 | 14 | 2 | 7 | |||||||||||||||||
DAC offset, net | (69 | ) | (3 | ) | (10 | ) | (3 | ) | (9 | ) | (60 | ) | ||||||||||||
Investment (income) loss on unit-linked variable annuities | 13 | — | (9 | ) | (3 | ) | (9 | ) | 22 | |||||||||||||||
Interest credited on unit-linked variable annuities | (13 | ) | — | 9 | 3 | 9 | (22 | ) | ||||||||||||||||
Interest expense on uncertain tax positions | 3 | 3 | 7 | 2 | 2 | 1 | ||||||||||||||||||
Non-investment derivatives | (2 | ) | 2 | — | — | — | (2 | ) | ||||||||||||||||
Uncertain tax positions and other tax related items | 6 | 2 | 3 | 2 | 1 | 5 | ||||||||||||||||||
Adjusted operating income | $ | 89 | $ | 219 | $ | 256 | $ | 211 | $ | 167 | $ | (78 | ) | |||||||||||
Wgt. average common shares outstanding (diluted) | 63,001 | 63,774 | 63,789 | 63,698 | 64,027 | (1,026 | ) | |||||||||||||||||
Diluted earnings per share - adjusted operating income | $ | 1.41 | $ | 3.43 | $ | 4.02 | $ | 3.31 | $ | 2.61 | $ | (1.20 | ) | |||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||
Net premiums | $ | (33 | ) | $ | (5 | ) | $ | (35 | ) | $ | (60 | ) | $ | (79 | ) | $ | 46 | |||||||
Adjusted operating income before income taxes | $ | (1 | ) | $ | 1 | $ | (2 | ) | $ | (5 | ) | $ | (9 | ) | $ | 8 | ||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||
| Page 5 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||
Consolidated Balance Sheets | ||||||||||||||||||||
(USD millions) | ||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 48,555 | $ | 51,121 | $ | 49,481 | $ | 46,189 | $ | 41,738 | ||||||||||
Equity securities | 112 | 320 | 135 | 147 | 90 | |||||||||||||||
Mortgage loans on real estate | 6,014 | 5,706 | 5,647 | 5,405 | 5,118 | |||||||||||||||
Policy loans | 1,314 | 1,319 | 1,290 | 1,320 | 1,312 | |||||||||||||||
Funds withheld at interest | 5,258 | 5,662 | 5,614 | 5,696 | 5,730 | |||||||||||||||
Short-term investments | 117 | 64 | 108 | 159 | 119 | |||||||||||||||
Other invested assets | 2,542 | 2,363 | 2,215 | 2,122 | 2,007 | |||||||||||||||
Total investments | 63,912 | 66,555 | 64,490 | 61,038 | 56,114 | |||||||||||||||
Cash and cash equivalents | 2,820 | 1,449 | 2,636 | 2,288 | 2,020 | |||||||||||||||
Accrued investment income | 510 | 493 | 520 | 470 | 443 | |||||||||||||||
Premiums receivable and other reinsurance balances | 2,836 | 2,940 | 2,818 | 2,945 | 2,858 | |||||||||||||||
Reinsurance ceded receivables | 889 | 904 | 863 | 851 | 815 | |||||||||||||||
Deferred policy acquisition costs | 3,622 | 3,512 | 3,411 | 3,440 | 3,404 | |||||||||||||||
Other assets | 1,065 | 878 | 1,036 | 1,012 | 1,038 | |||||||||||||||
Total assets | $ | 75,654 | $ | 76,731 | $ | 75,774 | $ | 72,044 | $ | 66,692 | ||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||
Future policy benefits | $ | 29,521 | $ | 28,672 | $ | 27,086 | $ | 26,996 | $ | 25,977 | ||||||||||
Interest-sensitive contract liabilities | 23,164 | 22,711 | 22,345 | 19,749 | 17,750 | |||||||||||||||
Other policy claims and benefits | 5,854 | 5,711 | 6,147 | 6,136 | 5,911 | |||||||||||||||
Other reinsurance balances | 596 | 557 | 513 | 513 | 517 | |||||||||||||||
Deferred income taxes | 2,163 | 2,712 | 2,762 | 2,444 | 2,145 | |||||||||||||||
Other liabilities | 1,505 | 1,188 | 1,406 | 1,481 | 1,278 | |||||||||||||||
Long-term debt | 2,981 | 2,981 | 3,381 | 3,381 | 2,788 | |||||||||||||||
Collateral finance and securitization notes | 569 | 598 | 610 | 635 | 656 | |||||||||||||||
Total liabilities | 66,353 | 65,130 | 64,250 | 61,335 | 57,022 | |||||||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Common stock, at par value | 1 | 1 | 1 | 1 | 1 | |||||||||||||||
Additional paid-in-capital | 1,942 | 1,937 | 1,928 | 1,920 | 1,906 | |||||||||||||||
Retained earnings | 7,802 | 7,952 | 7,766 | 7,550 | 7,412 | |||||||||||||||
Treasury stock | (1,574 | ) | (1,426 | ) | (1,429 | ) | (1,404 | ) | (1,415 | ) | ||||||||||
Accumulated other comprehensive income (AOCI): | ||||||||||||||||||||
Accumulated currency translation adjustment, net of income taxes | (223 | ) | (92 | ) | (157 | ) | (123 | ) | (147 | ) | ||||||||||
Unrealized appreciation of securities, net of income taxes | 1,426 | 3,299 | 3,472 | 2,816 | 1,964 | |||||||||||||||
Pension and postretirement benefits, net of income taxes | (73 | ) | (70 | ) | (57 | ) | (51 | ) | (51 | ) | ||||||||||
Total stockholders’ equity | 9,301 | 11,601 | 11,524 | 10,709 | 9,670 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 75,654 | $ | 76,731 | $ | 75,774 | $ | 72,044 | $ | 66,692 | ||||||||||
Total stockholders’ equity, excluding AOCI | $ | 8,171 | $ | 8,464 | $ | 8,266 | $ | 8,067 | $ | 7,904 | ||||||||||
See appendix for reconciliation of total stockholders' equity before and after impact of AOCI. | ||||||||||||||||||||
| Page 6 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
U.S. and Latin America Traditional | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 1,373 | $ | 1,558 | $ | 1,404 | $ | 1,410 | $ | 1,357 | $ | 16 | ||||||||||||
Investment income, net of related expenses | 161 | 200 | 210 | 173 | 186 | (25 | ) | |||||||||||||||||
Investment related gains (losses), net | (7 | ) | 2 | (10 | ) | (4 | ) | (6 | ) | (1 | ) | |||||||||||||
Other revenue | 6 | 5 | 6 | 5 | 4 | 2 | ||||||||||||||||||
Total revenues | 1,533 | 1,765 | 1,610 | 1,584 | 1,541 | (8 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 1,367 | 1,427 | 1,241 | 1,293 | 1,300 | 67 | ||||||||||||||||||
Interest credited | 19 | 19 | 20 | 19 | 20 | (1 | ) | |||||||||||||||||
Policy acquisition costs and other insurance expenses | 175 | 195 | 201 | 180 | 176 | (1 | ) | |||||||||||||||||
Other operating expenses | 34 | 39 | 35 | 37 | 33 | 1 | ||||||||||||||||||
Total benefits and expenses | 1,595 | 1,680 | 1,497 | 1,529 | 1,529 | 66 | ||||||||||||||||||
Income (loss) before income taxes | $ | (62 | ) | $ | 85 | $ | 113 | $ | 55 | $ | 12 | $ | (74 | ) | ||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 99.6 | % | 91.6 | % | 88.4 | % | 91.7 | % | 95.8 | % | 3.8 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 12.7 | % | 12.5 | % | 14.4 | % | 12.8 | % | 13.0 | % | (0.3 | )% | ||||||||||||
Other operating expenses | 2.5 | % | 2.5 | % | 2.5 | % | 2.6 | % | 2.4 | % | 0.1 | % | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | — | $ | 1 | $ | — | $ | — | $ | (1 | ) | $ | 1 | |||||||||||
Income (loss) 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 7 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
U.S. and Latin America Traditional | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | Qtr vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 1,373 | $ | 1,558 | $ | 1,404 | $ | 1,410 | $ | 1,357 | $ | 16 | ||||||||||||
Investment income, net of related expenses | 161 | 200 | 210 | 173 | 186 | (25 | ) | |||||||||||||||||
Other revenue | 6 | 5 | 6 | 5 | 4 | 2 | ||||||||||||||||||
Total revenues | 1,540 | 1,763 | 1,620 | 1,588 | 1,547 | (7 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 1,367 | 1,427 | 1,241 | 1,293 | 1,300 | 67 | ||||||||||||||||||
Interest credited | 19 | 19 | 20 | 19 | 20 | (1 | ) | |||||||||||||||||
Policy acquisition costs and other insurance expenses | 175 | 195 | 201 | 180 | 176 | (1 | ) | |||||||||||||||||
Other operating expenses | 34 | 39 | 35 | 37 | 33 | 1 | ||||||||||||||||||
Total benefits and expenses | 1,595 | 1,680 | 1,497 | 1,529 | 1,529 | 66 | ||||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | (55 | ) | $ | 83 | $ | 123 | $ | 59 | $ | 18 | $ | (73 | ) | ||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 99.6 | % | 91.6 | % | 88.4 | % | 91.7 | % | 95.8 | % | 3.8 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 12.7 | % | 12.5 | % | 14.4 | % | 12.8 | % | 13.0 | % | (0.3 | )% | ||||||||||||
Other operating expenses | 2.5 | % | 2.5 | % | 2.5 | % | 2.6 | % | 2.4 | % | 0.1 | % | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | — | $ | 1 | $ | — | $ | — | $ | (1 | ) | $ | 1 | |||||||||||
Adjusted operating income (loss) 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 Financial Solutions - Asset-Intensive | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 12 | $ | 11 | $ | 12 | $ | 9 | $ | 7 | $ | 5 | ||||||||||||
Investment income, net of related expenses | 233 | 272 | 254 | 204 | 197 | 36 | ||||||||||||||||||
Investment related gains (losses), net | (160 | ) | (1 | ) | 58 | 17 | 1 | (161 | ) | |||||||||||||||
Other revenue | 28 | 28 | 36 | 50 | 23 | 5 | ||||||||||||||||||
Total revenues | 113 | 310 | 360 | 280 | 228 | (115 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 53 | 51 | 49 | 49 | 48 | 5 | ||||||||||||||||||
Interest credited | 129 | 144 | 183 | 124 | 89 | 40 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | (38 | ) | 28 | 21 | 25 | 19 | (57 | ) | ||||||||||||||||
Other operating expenses | 7 | 9 | 7 | 10 | 7 | — | ||||||||||||||||||
Total benefits and expenses | 151 | 232 | 260 | 208 | 163 | (12 | ) | |||||||||||||||||
Income (loss) before income taxes | $ | (38 | ) | $ | 78 | $ | 100 | $ | 72 | $ | 65 | $ | (103 | ) | ||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||
| Page 9 | |
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 | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 12 | $ | 11 | $ | 12 | $ | 9 | $ | 7 | $ | 5 | ||||||||||||
Investment income, net of related expenses | 232 | 272 | 254 | 203 | 203 | 29 | ||||||||||||||||||
Other revenue | 25 | 28 | 36 | 50 | 23 | 2 | ||||||||||||||||||
Total revenues | 269 | 311 | 302 | 262 | 233 | 36 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 53 | 51 | 49 | 49 | 48 | 5 | ||||||||||||||||||
Interest credited | 117 | 154 | 147 | 106 | 87 | 30 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 49 | 32 | 34 | 28 | 31 | 18 | ||||||||||||||||||
Other operating expenses | 7 | 9 | 7 | 10 | 7 | — | ||||||||||||||||||
Total benefits and expenses | 226 | 246 | 237 | 193 | 173 | 53 | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 43 | $ | 65 | $ | 65 | $ | 69 | $ | 60 | $ | (17 | ) | |||||||||||
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 (continued) | ||||||||||||||||||||
(USD millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||
Annuity account values: | ||||||||||||||||||||
Fixed annuities (deferred) | $ | 11,022 | $ | 11,140 | $ | 11,149 | $ | 10,374 | $ | 8,311 | ||||||||||
Net interest spread (fixed annuities) | 1.4 | % | 1.5 | % | 1.4 | % | 1.5 | % | 1.6 | % | ||||||||||
Equity-indexed annuities | $ | 3,531 | $ | 3,589 | $ | 3,635 | $ | 3,656 | $ | 3,712 | ||||||||||
Variable annuities account values | ||||||||||||||||||||
No riders | $ | 718 | $ | 711 | $ | 1,471 | $ | 1,486 | $ | 702 | ||||||||||
GMDB only | 762 | 837 | 160 | 164 | 164 | |||||||||||||||
GMIB only | 20 | 23 | 22 | 22 | 22 | |||||||||||||||
GMAB only | 3 | 4 | 4 | 4 | 5 | |||||||||||||||
GMWB only | 937 | 1,123 | 1,100 | 1,127 | 1,132 | |||||||||||||||
GMDB / WB | 232 | 278 | 272 | 278 | 281 | |||||||||||||||
Other | 15 | 18 | 17 | 17 | 18 | |||||||||||||||
Total variable annuities account values | $ | 2,687 | $ | 2,994 | $ | 3,046 | $ | 3,098 | $ | 2,324 | ||||||||||
Fair value of liabilities associated with living benefit riders | $ | 291 | $ | 163 | $ | 210 | $ | 168 | $ | 150 | ||||||||||
Interest-sensitive contract liabilities associated with: | ||||||||||||||||||||
Guaranteed investment contracts | $ | 991 | $ | 907 | $ | 969 | $ | 1,003 | $ | 999 | ||||||||||
Bank-owned life insurance (BOLI) | $ | 2,435 | $ | 2,459 | $ | 2,452 | $ | 602 | $ | 599 | ||||||||||
Other asset-intensive business | $ | 128 | $ | 130 | $ | 133 | $ | 133 | $ | 136 | ||||||||||
Future policy benefits associated with: | ||||||||||||||||||||
Payout annuities | $ | 4,713 | $ | 4,776 | $ | 4,844 | $ | 4,906 | $ | 4,974 | ||||||||||
| Page 11 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
U.S. and Latin America Financial Solutions - Capital Solutions | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | — | ||||||||||||
Other revenue | 25 | 29 | 22 | 21 | 25 | — | ||||||||||||||||||
Total revenues | 26 | 30 | 23 | 22 | 26 | — | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | — | 1 | — | (1 | ) | 6 | (6 | ) | ||||||||||||||||
Other operating expenses | 3 | 3 | 4 | 3 | 2 | 1 | ||||||||||||||||||
Total benefits and expenses | 3 | 4 | 4 | 2 | 8 | (5 | ) | |||||||||||||||||
Income before income taxes | $ | 23 | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 5 | ||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||
| Page 12 | |
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 | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | — | ||||||||||||
Other revenue | 25 | 29 | 22 | 21 | 25 | — | ||||||||||||||||||
Total revenues | 26 | 30 | 23 | 22 | 26 | — | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | — | 1 | — | (1 | ) | 6 | (6 | ) | ||||||||||||||||
Other operating expenses | 3 | 3 | 4 | 3 | 2 | 1 | ||||||||||||||||||
Total benefits and expenses | 3 | 4 | 4 | 2 | 8 | (5 | ) | |||||||||||||||||
Adjusted operating income before income taxes | $ | 23 | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 5 | ||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||
| Page 13 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 260 | $ | 276 | $ | 271 | $ | 264 | $ | 255 | $ | 5 | ||||||||||||
Investment income, net of related expenses | 49 | 52 | 53 | 51 | 49 | — | ||||||||||||||||||
Investment related gains (losses), net | (12 | ) | 3 | 1 | 3 | 7 | (19 | ) | ||||||||||||||||
Other revenue | (1 | ) | — | — | — | 1 | (2 | ) | ||||||||||||||||
Total revenues | 296 | 331 | 325 | 318 | 312 | (16 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 220 | 235 | 216 | 206 | 200 | 20 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 45 | 56 | 57 | 57 | 54 | (9 | ) | |||||||||||||||||
Other operating expenses | 8 | 12 | 9 | 9 | 7 | 1 | ||||||||||||||||||
Total benefits and expenses | 273 | 303 | 282 | 272 | 261 | 12 | ||||||||||||||||||
Income before income taxes | $ | 23 | $ | 28 | $ | 43 | $ | 46 | $ | 51 | $ | (28 | ) | |||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 84.6 | % | 85.1 | % | 79.7 | % | 78.0 | % | 78.4 | % | 6.2 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 17.3 | % | 20.3 | % | 21.0 | % | 21.6 | % | 21.2 | % | (3.9 | )% | ||||||||||||
Other operating expenses | 3.1 | % | 4.3 | % | 3.3 | % | 3.4 | % | 2.7 | % | 0.4 | % | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | (3 | ) | $ | — | $ | (3 | ) | $ | (9 | ) | $ | (13 | ) | $ | 10 | ||||||||
Income before income taxes | $ | 1 | $ | — | $ | — | $ | (2 | ) | $ | (3 | ) | $ | 4 | ||||||||||
Creditor reinsurance net premiums | $ | 17 | $ | 27 | $ | 29 | $ | 27 | $ | 27 | $ | (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 14 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 260 | $ | 276 | $ | 271 | $ | 264 | $ | 255 | $ | 5 | ||||||||||||
Investment income, net of related expenses | 48 | 52 | 53 | 51 | 49 | (1 | ) | |||||||||||||||||
Investment related gains, net | 2 | 2 | 2 | 2 | 1 | 1 | ||||||||||||||||||
Other revenue | (1 | ) | — | — | — | 1 | (2 | ) | ||||||||||||||||
Total revenues | 309 | 330 | 326 | 317 | 306 | 3 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 220 | 235 | 216 | 206 | 200 | 20 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 45 | 56 | 57 | 57 | 54 | (9 | ) | |||||||||||||||||
Other operating expenses | 8 | 12 | 9 | 9 | 7 | 1 | ||||||||||||||||||
Total benefits and expenses | 273 | 303 | 282 | 272 | 261 | 12 | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 36 | $ | 27 | $ | 44 | $ | 45 | $ | 45 | $ | (9 | ) | |||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 84.6 | % | 85.1 | % | 79.7 | % | 78.0 | % | 78.4 | % | 6.2 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 17.3 | % | 20.3 | % | 21.0 | % | 21.6 | % | 21.2 | % | (3.9 | )% | ||||||||||||
Other operating expenses | 3.1 | % | 4.3 | % | 3.3 | % | 3.4 | % | 2.7 | % | 0.4 | % | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | (3 | ) | $ | — | $ | (3 | ) | $ | (9 | ) | $ | (13 | ) | $ | 10 | ||||||||
Adjusted operating income before income taxes | $ | 1 | $ | (1 | ) | $ | — | $ | (2 | ) | $ | (2 | ) | $ | 3 | |||||||||
Creditor reinsurance net premiums | $ | 17 | $ | 27 | $ | 29 | $ | 27 | $ | 27 | $ | (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 15 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Canada Financial Solutions (1) | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 21 | $ | 22 | $ | 22 | $ | 23 | $ | 22 | $ | (1 | ) | |||||||||||
Investment income, net of related expenses | 1 | 1 | 1 | — | 1 | — | ||||||||||||||||||
Other revenue | 2 | 4 | 1 | 1 | 1 | 1 | ||||||||||||||||||
Total revenues | 24 | 27 | 24 | 24 | 24 | — | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 20 | 19 | 20 | 20 | 21 | (1 | ) | |||||||||||||||||
Policy acquisition costs and other insurance expenses | — | 1 | — | 1 | — | — | ||||||||||||||||||
Other operating expenses | 1 | — | 1 | (1 | ) | 2 | (1 | ) | ||||||||||||||||
Total benefits and expenses | 21 | 20 | 21 | 20 | 23 | (2 | ) | |||||||||||||||||
Income before income taxes | $ | 3 | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | ||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||
Net premiums | $ | — | $ | — | $ | — | $ | (1 | ) | $ | (1 | ) | $ | 1 | ||||||||||
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 16 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Canada Financial Solutions (1) | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 21 | $ | 22 | $ | 22 | $ | 23 | $ | 22 | $ | (1 | ) | |||||||||||
Investment income, net of related expenses | 1 | 1 | 1 | — | 1 | — | ||||||||||||||||||
Other revenue | 2 | 4 | 1 | 1 | 1 | 1 | ||||||||||||||||||
Total revenues | 24 | 27 | 24 | 24 | 24 | — | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 20 | 19 | 20 | 20 | 21 | (1 | ) | |||||||||||||||||
Policy acquisition costs and other insurance expenses | — | 1 | — | 1 | — | — | ||||||||||||||||||
Other operating expenses | 1 | — | 1 | (1 | ) | 2 | (1 | ) | ||||||||||||||||
Total benefits and expenses | 21 | 20 | 21 | 20 | 23 | (2 | ) | |||||||||||||||||
Adjusted operating income before income taxes | $ | 3 | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | ||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||
Net premiums | $ | — | $ | — | $ | — | $ | (1 | ) | $ | (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) Canada Financial Solutions operations includes longevity and fee-based transactions. | ||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||
| Page 17 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 390 | $ | 368 | $ | 359 | $ | 351 | $ | 364 | $ | 26 | ||||||||||||
Investment income, net of related expenses | 19 | 19 | 17 | 18 | 19 | — | ||||||||||||||||||
Other revenue | (2 | ) | 1 | 2 | 1 | 1 | (3 | ) | ||||||||||||||||
Total revenues | 407 | 388 | 378 | 370 | 384 | 23 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 334 | 300 | 297 | 296 | 312 | 22 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 30 | 30 | 27 | 28 | 29 | 1 | ||||||||||||||||||
Other operating expenses | 26 | 35 | 29 | 30 | 27 | (1 | ) | |||||||||||||||||
Total benefits and expenses | 390 | 365 | 353 | 354 | 368 | 22 | ||||||||||||||||||
Income before income taxes | $ | 17 | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 1 | ||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 85.6 | % | 81.5 | % | 82.7 | % | 84.3 | % | 85.8 | % | (0.2 | )% | ||||||||||||
Policy acquisition costs and other insurance expenses | 7.7 | % | 8.2 | % | 7.4 | % | 7.9 | % | 8.2 | % | (0.5 | )% | ||||||||||||
Other operating expenses | 6.7 | % | 9.5 | % | 8.1 | % | 8.6 | % | 7.3 | % | (0.6 | )% | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | (13 | ) | $ | (4 | ) | $ | (17 | ) | $ | (23 | ) | $ | (33 | ) | $ | 20 | |||||||
Income before income taxes | $ | — | $ | (1 | ) | $ | (1 | ) | $ | (1 | ) | $ | (2 | ) | $ | 2 | ||||||||
Critical illness net premiums | $ | 42 | $ | 42 | $ | 49 | $ | 43 | $ | 44 | $ | (2 | ) | |||||||||||
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 18 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 390 | $ | 368 | $ | 359 | $ | 351 | $ | 364 | $ | 26 | ||||||||||||
Investment income, net of related expenses | 19 | 19 | 17 | 18 | 19 | — | ||||||||||||||||||
Other revenue | (2 | ) | 1 | 2 | 1 | 1 | (3 | ) | ||||||||||||||||
Total revenues | 407 | 388 | 378 | 370 | 384 | 23 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 334 | 300 | 297 | 296 | 312 | 22 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 30 | 30 | 27 | 28 | 29 | 1 | ||||||||||||||||||
Other operating expenses | 26 | 35 | 29 | 30 | 27 | (1 | ) | |||||||||||||||||
Total benefits and expenses | 390 | 365 | 353 | 354 | 368 | 22 | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 17 | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 1 | ||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 85.6 | % | 81.5 | % | 82.7 | % | 84.3 | % | 85.8 | % | (0.2 | )% | ||||||||||||
Policy acquisition costs and other insurance expenses | 7.7 | % | 8.2 | % | 7.4 | % | 7.9 | % | 8.2 | % | (0.5 | )% | ||||||||||||
Other operating expenses | 6.7 | % | 9.5 | % | 8.1 | % | 8.6 | % | 7.3 | % | (0.6 | )% | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | (13 | ) | $ | (4 | ) | $ | (17 | ) | $ | (23 | ) | $ | (33 | ) | $ | 20 | |||||||
Adjusted operating income before income taxes | $ | 1 | $ | (1 | ) | $ | (1 | ) | $ | (1 | ) | $ | (2 | ) | $ | 3 | ||||||||
Critical illness net premiums | $ | 42 | $ | 42 | $ | 49 | $ | 43 | $ | 44 | $ | (2 | ) | |||||||||||
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 Financial Solutions (1) | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 53 | $ | 54 | $ | 55 | $ | 57 | $ | 52 | $ | 1 | ||||||||||||
Investment income, net of related expenses | 28 | 45 | 55 | 47 | 48 | (20 | ) | |||||||||||||||||
Investment related gains (losses), net | (6 | ) | 1 | 2 | 3 | 3 | (9 | ) | ||||||||||||||||
Other revenue | 3 | 10 | 5 | 7 | 6 | (3 | ) | |||||||||||||||||
Total revenues | 78 | 110 | 117 | 114 | 109 | (31 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 53 | 19 | 34 | 47 | 49 | 4 | ||||||||||||||||||
Interest credited | (17 | ) | (1 | ) | 12 | 3 | 12 | (29 | ) | |||||||||||||||
Policy acquisition costs and other insurance expenses | 1 | 10 | — | 1 | 1 | — | ||||||||||||||||||
Other operating expenses | 11 | 10 | 10 | 11 | 9 | 2 | ||||||||||||||||||
Total benefits and expenses | 48 | 38 | 56 | 62 | 71 | (23 | ) | |||||||||||||||||
Income before income taxes | $ | 30 | $ | 72 | $ | 61 | $ | 52 | $ | 38 | $ | (8 | ) | |||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||
Net premiums | $ | (1 | ) | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (4 | ) | $ | 3 | ||||||||
Income before income taxes | $ | — | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (3 | ) | $ | 3 | |||||||||
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 20 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions (1) | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 53 | $ | 54 | $ | 55 | $ | 57 | $ | 52 | $ | 1 | ||||||||||||
Investment income, net of related expenses | 44 | 46 | 43 | 44 | 36 | 8 | ||||||||||||||||||
Investment related gains (losses), net | — | — | — | — | — | — | ||||||||||||||||||
Other revenue | 3 | 12 | 5 | 7 | 6 | (3 | ) | |||||||||||||||||
Total revenues | 100 | 112 | 103 | 108 | 94 | 6 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 53 | 19 | 34 | 47 | 49 | 4 | ||||||||||||||||||
Interest credited | (1 | ) | — | — | — | — | (1 | ) | ||||||||||||||||
Policy acquisition costs and other insurance expenses | 1 | 10 | — | 1 | 1 | — | ||||||||||||||||||
Other operating expenses | 11 | 10 | 10 | 11 | 9 | 2 | ||||||||||||||||||
Total benefits and expenses | 64 | 39 | 44 | 59 | 59 | 5 | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 36 | $ | 73 | $ | 59 | $ | 49 | $ | 35 | $ | 1 | ||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||
Net premiums | $ | (1 | ) | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (4 | ) | $ | 3 | ||||||||
Adjusted operating income before income taxes | $ | (1 | ) | $ | — | $ | (3 | ) | $ | (3 | ) | $ | (2 | ) | $ | 1 | ||||||||
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 | ||||||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 636 | $ | 659 | $ | 656 | $ | 606 | $ | 647 | $ | (11 | ) | |||||||||||
Investment income, net of related expenses | 27 | 27 | 27 | 24 | 26 | 1 | ||||||||||||||||||
Other revenue | 4 | 3 | 2 | 4 | — | 4 | ||||||||||||||||||
Total revenues | 667 | 689 | 685 | 634 | 673 | (6 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 555 | 618 | 585 | 568 | 546 | 9 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 49 | 13 | 40 | (12 | ) | 51 | (2 | ) | ||||||||||||||||
Other operating expenses | 39 | 46 | 38 | 44 | 39 | — | ||||||||||||||||||
Total benefits and expenses | 643 | 677 | 663 | 600 | 636 | 7 | ||||||||||||||||||
Income before income taxes | $ | 24 | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | (13 | ) | |||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 87.3 | % | 93.8 | % | 89.0 | % | 93.7 | % | 84.5 | % | 2.8 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 7.7 | % | 2.0 | % | 6.1 | % | (1.9 | )% | 7.8 | % | (0.1 | )% | ||||||||||||
Other operating expenses | 6.1 | % | 7.0 | % | 6.1 | % | 7.0 | % | 6.1 | % | — | % | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | (16 | ) | $ | (3 | ) | $ | (12 | ) | $ | (23 | ) | $ | (27 | ) | $ | 11 | |||||||
Income before income taxes | $ | (1 | ) | $ | 1 | $ | 3 | $ | 1 | $ | (2 | ) | $ | 1 | ||||||||||
Critical illness net premiums | $ | 256 | $ | 266 | $ | 294 | $ | 243 | $ | 252 | $ | 4 | ||||||||||||
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 22 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 636 | $ | 659 | $ | 656 | $ | 606 | $ | 647 | $ | (11 | ) | |||||||||||
Investment income, net of related expenses | 27 | 27 | 27 | 24 | 26 | 1 | ||||||||||||||||||
Other revenue | 4 | 3 | 2 | 4 | — | 4 | ||||||||||||||||||
Total revenues | 667 | 689 | 685 | 634 | 673 | (6 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 555 | 618 | 585 | 568 | 546 | 9 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 49 | 13 | 40 | (12 | ) | 51 | (2 | ) | ||||||||||||||||
Other operating expenses | 39 | 46 | 38 | 44 | 39 | — | ||||||||||||||||||
Total benefits and expenses | 643 | 677 | 663 | 600 | 636 | 7 | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 24 | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | (13 | ) | |||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 87.3 | % | 93.8 | % | 89.0 | % | 93.7 | % | 84.5 | % | 2.8 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 7.7 | % | 2.0 | % | 6.1 | % | (1.9 | )% | 7.8 | % | (0.1 | )% | ||||||||||||
Other operating expenses | 6.1 | % | 7.0 | % | 6.1 | % | 7.0 | % | 6.1 | % | — | % | ||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Net premiums | $ | (16 | ) | $ | (3 | ) | $ | (12 | ) | $ | (23 | ) | $ | (27 | ) | $ | 11 | |||||||
Adjusted operating income before income taxes | $ | (1 | ) | $ | 1 | $ | 3 | $ | 1 | $ | (2 | ) | $ | 1 | ||||||||||
Critical illness net premiums | $ | 256 | $ | 266 | $ | 294 | $ | 243 | $ | 252 | $ | 4 | ||||||||||||
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 Financial Solutions (1) | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 74 | $ | 38 | $ | 30 | $ | 44 | $ | 34 | $ | 40 | ||||||||||||
Investment income, net of related expenses | 17 | 15 | 10 | 11 | 10 | 7 | ||||||||||||||||||
Investment related gains (losses), net | (33 | ) | 7 | (1 | ) | (1 | ) | 4 | (37 | ) | ||||||||||||||
Other revenue | 10 | 8 | 7 | 5 | 7 | 3 | ||||||||||||||||||
Total revenues | 68 | 68 | 46 | 59 | 55 | 13 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 62 | 34 | 28 | 37 | 32 | 30 | ||||||||||||||||||
Interest credited | 13 | 11 | 7 | 6 | 7 | 6 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14 | 5 | 5 | 10 | 5 | 9 | ||||||||||||||||||
Other operating expenses | 4 | 5 | 4 | 4 | 5 | (1 | ) | |||||||||||||||||
Total benefits and expenses | 93 | 55 | 44 | 57 | 49 | 44 | ||||||||||||||||||
Income (loss) before income taxes | $ | (25 | ) | $ | 13 | $ | 2 | $ | 2 | $ | 6 | $ | (31 | ) | ||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||
Net premiums | $ | — | $ | — | $ | 1 | $ | — | $ | (1 | ) | $ | 1 | |||||||||||
Income (loss) before income taxes | $ | 2 | $ | — | $ | 1 | $ | — | $ | — | $ | 2 | ||||||||||||
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 24 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Asia Pacific Financial Solutions (1) | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 74 | $ | 38 | $ | 30 | $ | 44 | $ | 34 | $ | 40 | ||||||||||||
Investment income, net of related expenses | 17 | 15 | 10 | 11 | 10 | 7 | ||||||||||||||||||
Investment related gains, net | 2 | 2 | 2 | 1 | 1 | 1 | ||||||||||||||||||
Other revenue | 10 | 8 | 7 | 5 | 7 | 3 | ||||||||||||||||||
Total revenues | 103 | 63 | 49 | 61 | 52 | 51 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 62 | 34 | 28 | 37 | 32 | 30 | ||||||||||||||||||
Interest credited | 13 | 11 | 7 | 6 | 7 | 6 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14 | 5 | 5 | 10 | 5 | 9 | ||||||||||||||||||
Other operating expenses | 4 | 5 | 4 | 4 | 5 | (1 | ) | |||||||||||||||||
Total benefits and expenses | 93 | 55 | 44 | 57 | 49 | 44 | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 10 | $ | 8 | $ | 5 | $ | 4 | $ | 3 | $ | 7 | ||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||
Net premiums | $ | — | $ | — | $ | 1 | $ | — | $ | (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 25 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Corporate and Other | ||||||||||||||||||||||||
GAAP Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Investment income, net of related expenses | $ | 58 | $ | 45 | $ | 51 | $ | 55 | $ | 43 | $ | 15 | ||||||||||||
Investment related gains (losses), net | (67 | ) | 10 | (1 | ) | (6 | ) | (1 | ) | (66 | ) | |||||||||||||
Other revenue | 1 | 12 | 10 | 13 | 26 | (25 | ) | |||||||||||||||||
Total revenues | (8 | ) | 67 | 60 | 62 | 68 | (76 | ) | ||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Interest credited | 2 | 7 | 4 | 6 | 5 | (3 | ) | |||||||||||||||||
Policy acquisition costs and other insurance income | (28 | ) | (29 | ) | (29 | ) | (29 | ) | (29 | ) | 1 | |||||||||||||
Other operating expenses | 62 | 75 | 73 | 75 | 71 | (9 | ) | |||||||||||||||||
Interest expense | 41 | 44 | 46 | 43 | 40 | 1 | ||||||||||||||||||
Collateral finance and securitization expense | 6 | 6 | 7 | 8 | 8 | (2 | ) | |||||||||||||||||
Total benefits and expenses | 83 | 103 | 101 | 103 | 95 | (12 | ) | |||||||||||||||||
Loss before income taxes | $ | (91 | ) | $ | (36 | ) | $ | (41 | ) | $ | (41 | ) | $ | (27 | ) | $ | (64 | ) | ||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Loss before income taxes | $ | 2 | $ | — | $ | — | $ | — | $ | — | $ | 2 | ||||||||||||
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 26 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Corporate and Other | ||||||||||||||||||||||||
Adjusted Operating Income Statements | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Investment income, net of related expenses | $ | 58 | $ | 45 | $ | 51 | $ | 55 | $ | 43 | $ | 15 | ||||||||||||
Investment related gains, net | 1 | 2 | 1 | — | 3 | (2 | ) | |||||||||||||||||
Other revenue | 1 | 12 | 10 | 13 | 26 | (25 | ) | |||||||||||||||||
Total revenues | 60 | 59 | 62 | 68 | 72 | (12 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Interest credited | 2 | 7 | 4 | 6 | 5 | (3 | ) | |||||||||||||||||
Policy acquisition costs and other insurance income | (28 | ) | (29 | ) | (29 | ) | (29 | ) | (29 | ) | 1 | |||||||||||||
Other operating expenses | 62 | 75 | 73 | 75 | 71 | (9 | ) | |||||||||||||||||
Interest expense | 37 | 40 | 37 | 41 | 37 | — | ||||||||||||||||||
Collateral finance and securitization expense | 6 | 6 | 7 | 8 | 8 | (2 | ) | |||||||||||||||||
Total benefits and expenses | 79 | 99 | 92 | 101 | 92 | (13 | ) | |||||||||||||||||
Adjusted operating loss before income taxes | $ | (19 | ) | $ | (40 | ) | $ | (30 | ) | $ | (33 | ) | $ | (20 | ) | $ | 1 | |||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||
Adjusted operating 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 | ||||||||||||||||||||||||
Summary of Segment GAAP Income | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||
Traditional | $ | (62 | ) | $ | 85 | $ | 113 | $ | 55 | $ | 12 | $ | (74 | ) | ||||||||||
Financial Solutions: | ||||||||||||||||||||||||
Asset Intensive | (38 | ) | 78 | 100 | 72 | 65 | (103 | ) | ||||||||||||||||
Capital Solutions | 23 | 26 | 19 | 20 | 18 | 5 | ||||||||||||||||||
Total U.S. and Latin America | (77 | ) | 189 | 232 | 147 | 95 | (172 | ) | ||||||||||||||||
Canada: | ||||||||||||||||||||||||
Traditional | 23 | 28 | 43 | 46 | 51 | (28 | ) | |||||||||||||||||
Financial Solutions | 3 | 7 | 3 | 4 | 1 | 2 | ||||||||||||||||||
Total Canada | 26 | 35 | 46 | 50 | 52 | (26 | ) | |||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||
Traditional | 17 | 23 | 25 | 16 | 16 | 1 | ||||||||||||||||||
Financial Solutions | 30 | 72 | 61 | 52 | 38 | (8 | ) | |||||||||||||||||
Total Europe, Middle East and Africa | 47 | 95 | 86 | 68 | 54 | (7 | ) | |||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||
Traditional | 24 | 12 | 22 | 34 | 37 | (13 | ) | |||||||||||||||||
Financial Solutions | (25 | ) | 13 | 2 | 2 | 6 | (31 | ) | ||||||||||||||||
Total Asia Pacific | (1 | ) | 25 | 24 | 36 | 43 | (44 | ) | ||||||||||||||||
Corporate and Other | (91 | ) | (36 | ) | (41 | ) | (41 | ) | (27 | ) | (64 | ) | ||||||||||||
Consolidated income (loss) before income taxes | $ | (96 | ) | $ | 308 | $ | 347 | $ | 260 | $ | 217 | $ | (313 | ) | ||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||
| Page 28 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Summary of Segment Adjusted Operating Income | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||
Traditional | $ | (55 | ) | $ | 83 | $ | 123 | $ | 59 | $ | 18 | $ | (73 | ) | ||||||||||
Financial Solutions: | ||||||||||||||||||||||||
Asset Intensive | 43 | 65 | 65 | 69 | 60 | (17 | ) | |||||||||||||||||
Capital Solutions | 23 | 26 | 19 | 20 | 18 | 5 | ||||||||||||||||||
Total U.S. and Latin America | 11 | 174 | 207 | 148 | 96 | (85 | ) | |||||||||||||||||
Canada: | ||||||||||||||||||||||||
Traditional | 36 | 27 | 44 | 45 | 45 | (9 | ) | |||||||||||||||||
Financial Solutions | 3 | 7 | 3 | 4 | 1 | 2 | ||||||||||||||||||
Total Canada | 39 | 34 | 47 | 49 | 46 | (7 | ) | |||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||
Traditional | 17 | 23 | 25 | 16 | 16 | 1 | ||||||||||||||||||
Financial Solutions | 36 | 73 | 59 | 49 | 35 | 1 | ||||||||||||||||||
Total Europe, Middle East and Africa | 53 | 96 | 84 | 65 | 51 | 2 | ||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||
Traditional | 24 | 12 | 22 | 34 | 37 | (13 | ) | |||||||||||||||||
Financial Solutions | 10 | 8 | 5 | 4 | 3 | 7 | ||||||||||||||||||
Total Asia Pacific | 34 | 20 | 27 | 38 | 40 | (6 | ) | |||||||||||||||||
Corporate and Other | (19 | ) | (40 | ) | (30 | ) | (33 | ) | (20 | ) | 1 | |||||||||||||
Consolidated adjusted operating income before income taxes | $ | 118 | $ | 284 | $ | 335 | $ | 267 | $ | 213 | $ | (95 | ) | |||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||
| Page 29 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||
Investments | ||||||||||||||||||||
(USD millions) | ||||||||||||||||||||
Cash and Invested Assets | ||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||
Fixed maturity securities, available-for-sale (1) | $ | 48,555 | $ | 51,121 | $ | 49,481 | $ | 46,189 | $ | 41,738 | ||||||||||
Equity securities | 112 | 320 | 135 | 147 | 90 | |||||||||||||||
Mortgage loans on real estate | 6,014 | 5,706 | 5,647 | 5,405 | 5,118 | |||||||||||||||
Policy loans | 1,314 | 1,319 | 1,290 | 1,320 | 1,312 | |||||||||||||||
Funds withheld at interest | 5,258 | 5,662 | 5,614 | 5,696 | 5,730 | |||||||||||||||
Short-term investments | 117 | 64 | 108 | 159 | 119 | |||||||||||||||
Other invested assets | 2,542 | 2,363 | 2,215 | 2,122 | 2,007 | |||||||||||||||
Cash and cash equivalents | 2,820 | 1,449 | 2,636 | 2,288 | 2,020 | |||||||||||||||
Total cash and invested assets | $ | 66,732 | $ | 68,004 | $ | 67,126 | $ | 63,326 | $ | 58,134 | ||||||||||
(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 | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||
Average invested assets at amortized cost (1) | $ | 29,728 | $ | 29,513 | $ | 29,043 | $ | 28,487 | $ | 28,097 | $ | 1,631 | ||||||||||||
Net investment income (1) | $ | 299 | $ | 330 | $ | 344 | $ | 307 | $ | 310 | $ | (11 | ) | |||||||||||
Annualized investment yield (ratio of net investment income to average invested assets at amortized cost) (1) | 4.08 | % | 4.55 | % | 4.83 | % | 4.38 | % | 4.49 | % | (41) bps | |||||||||||||
(1) Excludes spread related business (e.g. coinsurance of annuities). | ||||||||||||||||||||||||
| Page 30 | |
Reinsurance Group of America, Incorporated | |||||||||||||||||||||||
Investments | |||||||||||||||||||||||
(USD millions) | |||||||||||||||||||||||
Amortized Cost, Allowance for Credit Losses, Gross Unrealized Gains and Losses, and Estimated Fair Values of Fixed Maturity Securities | |||||||||||||||||||||||
March 31, 2020 | |||||||||||||||||||||||
Amortized Cost | Allowance for Credit Losses | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate | $ | 29,203 | $ | 26 | $ | 1,294 | $ | 977 | $ | 29,494 | 60.8 | % | |||||||||||
Canadian government | 2,793 | — | 1,445 | 1 | 4,237 | 8.7 | % | ||||||||||||||||
RMBS | 2,241 | — | 77 | 27 | 2,291 | 4.7 | % | ||||||||||||||||
ABS | 2,940 | — | 4 | 277 | 2,667 | 5.5 | % | ||||||||||||||||
CMBS | 1,841 | — | 24 | 56 | 1,809 | 3.7 | % | ||||||||||||||||
U.S. government | 1,398 | — | 244 | — | 1,642 | 3.4 | % | ||||||||||||||||
State and political subdivisions | 1,071 | — | 108 | 10 | 1,169 | 2.4 | % | ||||||||||||||||
Other foreign government | 5,133 | 7 | 233 | 113 | 5,246 | 10.8 | % | ||||||||||||||||
Total fixed maturity securities | $ | 46,620 | $ | 33 | $ | 3,429 | $ | 1,461 | $ | 48,555 | 100.0 | % | |||||||||||
December 31, 2019 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Impairments in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate | $ | 29,205 | $ | 2,269 | $ | 81 | $ | 31,393 | 61.4 | % | $ | — | |||||||||||
Canadian government | 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 | % | $ | — | |||||||||||
| Page 31 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||||
Corporate Fixed Maturity Securities by Industry | ||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||
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 | $ | 5,365 | $ | 5,447 | 18.6 | % | A- | $ | 5,443 | $ | 5,804 | 18.6 | % | A- | ||||||||||||
Brokerage/asset managers/exchanges | 775 | 780 | 2.6 | % | A- | 756 | 811 | 2.6 | % | A- | ||||||||||||||||
Finance companies | 299 | 269 | 0.9 | % | BBB | 241 | 255 | 0.8 | % | BBB | ||||||||||||||||
Insurance | 3,280 | 3,302 | 11.2 | % | A- | 3,178 | 3,429 | 10.9 | % | A- | ||||||||||||||||
REITs | 701 | 693 | 2.3 | % | BBB+ | 716 | 760 | 2.4 | % | A- | ||||||||||||||||
Other finance | 559 | 565 | 1.9 | % | A- | 562 | 594 | 1.9 | % | A- | ||||||||||||||||
Total financial institutions | $ | 10,979 | $ | 11,056 | 37.5 | % | $ | 10,896 | $ | 11,653 | 37.2 | % | ||||||||||||||
Industrials | ||||||||||||||||||||||||||
Basic | $ | 1,800 | $ | 1,744 | 5.9 | % | BBB | $ | 1,790 | $ | 1,925 | 6.1 | % | BBB | ||||||||||||
Capital goods | 1,293 | 1,265 | 4.3 | % | BBB | 1,292 | 1,353 | 4.3 | % | BBB | ||||||||||||||||
Communications | 2,125 | 2,231 | 7.5 | % | BBB+ | 2,126 | 2,346 | 7.5 | % | BBB+ | ||||||||||||||||
Consumer cyclical | 1,467 | 1,447 | 4.9 | % | BBB+ | 1,477 | 1,571 | 5.0 | % | BBB+ | ||||||||||||||||
Consumer noncyclical | 2,909 | 3,087 | 10.4 | % | BBB+ | 2,898 | 3,147 | 10.0 | % | BBB+ | ||||||||||||||||
Energy | 1,895 | 1,726 | 5.9 | % | BBB+ | 1,939 | 2,099 | 6.7 | % | BBB+ | ||||||||||||||||
Technology | 1,002 | 1,051 | 3.6 | % | A- | 974 | 1,027 | 3.3 | % | A- | ||||||||||||||||
Transportation | 1,787 | 1,789 | 6.1 | % | A- | 1,791 | 1,919 | 6.1 | % | A- | ||||||||||||||||
Other industrial | 425 | 416 | 1.4 | % | BBB+ | 405 | 416 | 1.3 | % | BBB+ | ||||||||||||||||
Total industrials | $ | 14,703 | $ | 14,756 | 50.0 | % | $ | 14,692 | $ | 15,803 | 50.3 | % | ||||||||||||||
Utilities | ||||||||||||||||||||||||||
Electric | $ | 2,752 | $ | 2,868 | 9.7 | % | A- | $ | 2,810 | $ | 3,046 | 9.7 | % | A- | ||||||||||||
Natural gas | 415 | 435 | 1.5 | % | A- | 475 | 516 | 1.6 | % | A- | ||||||||||||||||
Other utility | 354 | 379 | 1.3 | % | BBB+ | 332 | 375 | 1.2 | % | A- | ||||||||||||||||
Total utilities | $ | 3,521 | $ | 3,682 | 12.5 | % | $ | 3,617 | $ | 3,937 | 12.5 | % | ||||||||||||||
Total | $ | 29,203 | $ | 29,494 | 100.0 | % | BBB+ | $ | 29,205 | $ | 31,393 | 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 32 | |
Reinsurance Group of America, Incorporated
Investments
(USD millions)
Ratings of Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 29,310 | $ | 31,660 | 65.2 | % | $ | 30,100 | $ | 33,284 | 65.2 | % | $ | 28,620 | $ | 32,128 | 64.9 | % | $ | 27,571 | $ | 30,513 | 66.1 | % | $ | 25,497 | $ | 27,674 | 66.3 | % | ||||||||||||||||||||||||||
2 | BBB | 14,810 | 14,665 | 30.2 | % | 14,366 | 15,514 | 30.3 | % | 14,130 | 15,213 | 30.7 | % | 12,942 | 13,705 | 29.7 | % | 11,873 | 12,245 | 29.3 | % | ||||||||||||||||||||||||||||||||||||
3 | BB | 1,877 | 1,727 | 3.6 | % | 1,706 | 1,748 | 3.4 | % | 1,586 | 1,611 | 3.3 | % | 1,389 | 1,408 | 3.0 | % | 1,319 | 1,319 | 3.2 | % | ||||||||||||||||||||||||||||||||||||
4 | B | 509 | 452 | 0.9 | % | 514 | 518 | 1.0 | % | 443 | 444 | 0.9 | % | 490 | 495 | 1.1 | % | 420 | 422 | 1.0 | % | ||||||||||||||||||||||||||||||||||||
5 | CCC | 101 | 41 | 0.1 | % | 36 | 23 | — | % | 30 | 29 | 0.1 | % | 15 | 16 | — | % | 13 | 14 | — | % | ||||||||||||||||||||||||||||||||||||
6 | In or near default | 13 | 10 | — | % | 31 | 34 | 0.1 | % | 51 | 56 | 0.1 | % | 51 | 52 | 0.1 | % | 67 | 64 | 0.2 | % | ||||||||||||||||||||||||||||||||||||
Total | $ | 46,620 | $ | 48,555 | 100.0 | % | $ | 46,753 | $ | 51,121 | 100.0 | % | $ | 44,860 | $ | 49,481 | 100.0 | % | $ | 42,458 | $ | 46,189 | 100.0 | % | $ | 39,189 | $ | 41,738 | 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 726 | $ | 796 | 11.8 | % | $ | 742 | $ | 777 | 10.6 | % | $ | 787 | $ | 834 | 11.9 | % | $ | 893 | $ | 929 | 14.2 | % | $ | 799 | $ | 815 | 14.4 | % | |||||||||||||||||||||||||
Non-agency | 1,515 | 1,495 | 22.1 | % | 1,597 | 1,621 | 22.3 | % | 1,574 | 1,606 | 22.8 | % | 1,322 | 1,348 | 20.7 | % | 1,171 | 1,179 | 20.8 | % | |||||||||||||||||||||||||||||||||||
Total RMBS | 2,241 | 2,291 | 33.9 | % | 2,339 | 2,398 | 32.9 | % | 2,361 | 2,440 | 34.7 | % | 2,215 | 2,277 | 34.9 | % | 1,970 | 1,994 | 35.2 | % | |||||||||||||||||||||||||||||||||||
ABS: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized loan obligations ("CLOs") | 1,725 | 1,558 | 23.0 | % | 1,750 | 1,743 | 24.0 | % | 1,590 | 1,581 | 22.4 | % | 1,443 | 1,434 | 22.0 | % | 1,323 | 1,311 | 23.1 | % | |||||||||||||||||||||||||||||||||||
ABS, excluding CLOs | 1,215 | 1,109 | 16.4 | % | 1,223 | 1,235 | 17.0 | % | 1,219 | 1,242 | 17.6 | % | 1,039 | 1,060 | 16.3 | % | 920 | 931 | 16.4 | % | |||||||||||||||||||||||||||||||||||
Total ABS | 2,940 | 2,667 | 39.4 | % | 2,973 | 2,978 | 41.0 | % | 2,809 | 2,823 | 40.0 | % | 2,482 | 2,494 | 38.3 | % | 2,243 | 2,242 | 39.5 | % | |||||||||||||||||||||||||||||||||||
CMBS | 1,841 | 1,809 | 26.7 | % | 1,841 | 1,899 | 26.1 | % | 1,698 | 1,782 | 25.3 | % | 1,687 | 1,747 | 26.8 | % | 1,405 | 1,432 | 25.3 | % | |||||||||||||||||||||||||||||||||||
Total | $ | 7,022 | $ | 6,767 | 100.0 | % | $ | 7,153 | $ | 7,275 | 100.0 | % | $ | 6,868 | $ | 7,045 | 100.0 | % | $ | 6,384 | $ | 6,518 | 100.0 | % | $ | 5,618 | $ | 5,668 | 100.0 | % | |||||||||||||||||||||||||
| Page 33 | |
Reinsurance Group of America, Incorporated | |||||||||||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||||||||||
(USD millions) | |||||||||||||||||||||||||||||||||||
Gross Unrealized Losses Aging | |||||||||||||||||||||||||||||||||||
Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||
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% | $ | 1,052 | 72.0 | % | $ | 76 | 69.1 | % | $ | 76 | 74.5 | % | $ | 73 | 76.1 | % | $ | 208 | 90.5 | % | |||||||||||||||
20% or more for less than six months | 409 | 28.0 | % | 20 | 18.2 | % | 10 | 9.8 | % | 22 | 22.9 | % | 21 | 9.1 | % | ||||||||||||||||||||
20% or more for six months or greater | — | — | % | 14 | 12.7 | % | 16 | 15.7 | % | 1 | 1.0 | % | 1 | 0.4 | % | ||||||||||||||||||||
Total | $ | 1,461 | 100.0 | % | $ | 110 | 100.0 | % | $ | 102 | 100.0 | % | $ | 96 | 100.0 | % | $ | 230 | 100.0 | % | |||||||||||||||
| Page 34 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Fixed Maturity Securities Below Amortized Cost | ||||||||||||||||||||||||
As of March 31, 2020 | ||||||||||||||||||||||||
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 | $ | 9,666 | $ | 729 | $ | 93 | $ | 18 | $ | 9,759 | $ | 747 | ||||||||||||
Canadian government | — | — | 6 | 1 | 6 | 1 | ||||||||||||||||||
RMBS | 1,047 | 25 | 41 | 2 | 1,088 | 27 | ||||||||||||||||||
ABS | 1,936 | 203 | 552 | 65 | 2,488 | 268 | ||||||||||||||||||
CMBS | 913 | 52 | 21 | 1 | 934 | 53 | ||||||||||||||||||
U.S. government | — | — | — | — | — | — | ||||||||||||||||||
State and political subdivisions | 158 | 9 | 12 | 1 | 170 | 10 | ||||||||||||||||||
Other foreign government | 1,813 | 94 | 7 | 4 | 1,820 | 98 | ||||||||||||||||||
Total investment grade securities | $ | 15,533 | $ | 1,112 | $ | 732 | $ | 92 | $ | 16,265 | $ | 1,204 | ||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate | $ | 1,106 | $ | 219 | $ | 66 | $ | 11 | $ | 1,172 | $ | 230 | ||||||||||||
ABS | 15 | 9 | — | — | 15 | 9 | ||||||||||||||||||
CMBS | 23 | 3 | — | — | 23 | 3 | ||||||||||||||||||
Other foreign government | 150 | 13 | 7 | 2 | 157 | 15 | ||||||||||||||||||
Total below investment grade securities | $ | 1,294 | $ | 244 | $ | 73 | $ | 13 | $ | 1,367 | $ | 257 | ||||||||||||
Total fixed maturity securities | $ | 16,827 | $ | 1,356 | $ | 805 | $ | 105 | $ | 17,632 | $ | 1,461 | ||||||||||||
| 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 government | — | — | — | — | — | — | ||||||||||||||||||
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) | ||||||||||||||||||||||||
Consolidated Investment Related Gains and Losses | ||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||
Fixed maturity securities available-for-sale: | ||||||||||||||||||||||||
Impairments and change in allowance for credit losses on fixed maturity securities | $ | (34 | ) | $ | (13 | ) | $ | (9 | ) | $ | — | $ | (9 | ) | $ | (25 | ) | |||||||
Gain on investment activity | 27 | 35 | 68 | 20 | 28 | (1 | ) | |||||||||||||||||
Loss on investment activity | (8 | ) | (11 | ) | (13 | ) | (7 | ) | (19 | ) | 11 | |||||||||||||
Net gains (losses) on fixed maturity securities available-for-sale | (15 | ) | 11 | 46 | 13 | — | (15 | ) | ||||||||||||||||
Net gains (losses) on equity securities | (23 | ) | 5 | 4 | 3 | 4 | (27 | ) | ||||||||||||||||
Other impairment losses and change in mortgage loan provision | (13 | ) | — | (4 | ) | (6 | ) | (2 | ) | (11 | ) | |||||||||||||
Other non-derivative gain (loss), net | 9 | (1 | ) | 4 | 5 | 5 | 4 | |||||||||||||||||
Free-standing derivatives: | ||||||||||||||||||||||||
Credit default swaps | (24 | ) | 8 | 2 | 5 | 15 | (39 | ) | ||||||||||||||||
Interest rate swaps - non-hedged | 106 | (32 | ) | 39 | 34 | 24 | 82 | |||||||||||||||||
Foreign currency swaps - non-hedged | (13 | ) | 4 | 1 | (6 | ) | 1 | (14 | ) | |||||||||||||||
Foreign currency swaps - hedged | (8 | ) | 2 | (2 | ) | (3 | ) | (1 | ) | (7 | ) | |||||||||||||
Financial futures | 44 | (16 | ) | — | (8 | ) | (22 | ) | 66 | |||||||||||||||
CPI swaps | (40 | ) | 6 | (8 | ) | (7 | ) | (9 | ) | (31 | ) | |||||||||||||
Equity options | 53 | (12 | ) | — | (5 | ) | (23 | ) | 76 | |||||||||||||||
Foreign currency forwards | (3 | ) | 1 | — | — | — | (3 | ) | ||||||||||||||||
Total free-standing derivatives | 115 | (39 | ) | 32 | 10 | (15 | ) | 130 | ||||||||||||||||
Embedded derivatives: | ||||||||||||||||||||||||
Modified coinsurance and funds withheld treaties | (230 | ) | (1 | ) | 9 | 5 | (2 | ) | (228 | ) | ||||||||||||||
GMXB | (128 | ) | 47 | (42 | ) | (18 | ) | 18 | (146 | ) | ||||||||||||||
Total embedded derivatives | (358 | ) | 46 | (33 | ) | (13 | ) | 16 | (374 | ) | ||||||||||||||
Net gain (loss) on total derivatives | (243 | ) | 7 | (1 | ) | (3 | ) | 1 | (244 | ) | ||||||||||||||
Total investment related gains (losses), net | $ | (285 | ) | $ | 22 | $ | 49 | $ | 12 | $ | 8 | $ | (293 | ) | ||||||||||
| Page 37 | |
Appendix | ||||
Reconciliations of GAAP to Non-GAAP Measures | ||||
| Page 38 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Reconciliations of GAAP Income to Adjusted Operating Income | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
U.S. & Latin America Traditional | ||||||||||||||||||||||||
Income (loss) before income taxes | $ | (62 | ) | $ | 85 | $ | 113 | $ | 55 | $ | 12 | $ | (74 | ) | ||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||
funds withheld embedded derivatives (1) | 7 | (2 | ) | 10 | 4 | 6 | 1 | |||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | (55 | ) | $ | 83 | $ | 123 | $ | 59 | $ | 18 | $ | (73 | ) | ||||||||||
U.S. & Latin America Asset-Intensive | ||||||||||||||||||||||||
Income (loss) before income taxes | $ | (38 | ) | $ | 78 | $ | 100 | $ | 72 | $ | 65 | $ | (103 | ) | ||||||||||
Investment and derivative (gains) losses (1) | (191 | ) | 45 | (81 | ) | (26 | ) | 21 | (212 | ) | ||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||
funds withheld embedded derivatives (1) | 223 | 3 | (19 | ) | (9 | ) | (4 | ) | 227 | |||||||||||||||
GMXB embedded derivatives (1) | 128 | (47 | ) | 42 | 18 | (18 | ) | 146 | ||||||||||||||||
Funds withheld (gains) losses - investment income | (1 | ) | — | — | (1 | ) | 6 | (7 | ) | |||||||||||||||
EIA embedded derivatives - interest credited | 12 | (10 | ) | 36 | 18 | 2 | 10 | |||||||||||||||||
DAC offset, net | (87 | ) | (4 | ) | (13 | ) | (3 | ) | (12 | ) | (75 | ) | ||||||||||||
Non-investment derivatives | (3 | ) | — | — | — | — | (3 | ) | ||||||||||||||||
Adjusted operating income before income taxes | $ | 43 | $ | 65 | $ | 65 | $ | 69 | $ | 60 | $ | (17 | ) | |||||||||||
U.S. & Latin America Capital Solutions | ||||||||||||||||||||||||
Income before income taxes | $ | 23 | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 5 | ||||||||||||
Adjusted operating income before income taxes | $ | 23 | $ | 26 | $ | 19 | $ | 20 | $ | 18 | $ | 5 | ||||||||||||
Canada Traditional | ||||||||||||||||||||||||
Income before income taxes | $ | 23 | $ | 28 | $ | 43 | $ | 46 | $ | 51 | $ | (28 | ) | |||||||||||
Investment and derivative (gains) losses (1) | 14 | (1 | ) | 1 | (1 | ) | (6 | ) | 20 | |||||||||||||||
Investment income - non-operating FWAI | (1 | ) | — | — | — | — | (1 | ) | ||||||||||||||||
Adjusted operating income before income taxes | $ | 36 | $ | 27 | $ | 44 | $ | 45 | $ | 45 | $ | (9 | ) | |||||||||||
Canada Financial Solutions | ||||||||||||||||||||||||
Income before income taxes | $ | 3 | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | ||||||||||||
Adjusted operating income before income taxes | $ | 3 | $ | 7 | $ | 3 | $ | 4 | $ | 1 | $ | 2 | ||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||
| Page 39 | |
Reinsurance Group of America, Incorporated | ||||||||||||||||||||||||
Reconciliations of GAAP Income to Adjusted Operating Income | ||||||||||||||||||||||||
(USD millions) | ||||||||||||||||||||||||
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | Quarter | |||||||||||||||||||
Europe, Middle East and Africa Traditional | ||||||||||||||||||||||||
Income before income taxes | $ | 17 | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 1 | ||||||||||||
Adjusted operating income before income taxes | $ | 17 | $ | 23 | $ | 25 | $ | 16 | $ | 16 | $ | 1 | ||||||||||||
Europe, Middle East and Africa Financial Solutions | ||||||||||||||||||||||||
Income before income taxes | $ | 30 | $ | 72 | $ | 61 | $ | 52 | $ | 38 | $ | (8 | ) | |||||||||||
Investment and derivative (gains) losses (1) | 6 | (1 | ) | (2 | ) | (3 | ) | (3 | ) | 9 | ||||||||||||||
Investment (income) loss on unit-linked variable annuities | 16 | 1 | (12 | ) | (3 | ) | (12 | ) | 28 | |||||||||||||||
Interest credited on unit-linked variable annuities | (16 | ) | (1 | ) | 12 | 3 | 12 | (28 | ) | |||||||||||||||
Non-investment derivatives | — | 2 | — | — | — | — | ||||||||||||||||||
Adjusted operating income before income taxes | $ | 36 | $ | 73 | $ | 59 | $ | 49 | $ | 35 | $ | 1 | ||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||
Income before income taxes | $ | 24 | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | (13 | ) | |||||||||||
Adjusted operating income before income taxes | $ | 24 | $ | 12 | $ | 22 | $ | 34 | $ | 37 | $ | (13 | ) | |||||||||||
Asia Pacific Financial Solutions | ||||||||||||||||||||||||
Income (loss) before income taxes | $ | (25 | ) | $ | 13 | $ | 2 | $ | 2 | $ | 6 | $ | (31 | ) | ||||||||||
Investment and derivative (gains) losses (1) | 35 | (5 | ) | 3 | 2 | (3 | ) | 38 | ||||||||||||||||
Adjusted operating income before income taxes | $ | 10 | $ | 8 | $ | 5 | $ | 4 | $ | 3 | $ | 7 | ||||||||||||
Corporate and Other | ||||||||||||||||||||||||
Loss before income taxes | $ | (91 | ) | $ | (36 | ) | $ | (41 | ) | $ | (41 | ) | $ | (27 | ) | $ | (64 | ) | ||||||
Investment and derivative (gains) losses (1) | 68 | (8 | ) | 2 | 6 | 4 | 64 | |||||||||||||||||
Interest expense on uncertain tax positions | 4 | 4 | 9 | 2 | 3 | 1 | ||||||||||||||||||
Adjusted operating loss before income taxes | $ | (19 | ) | $ | (40 | ) | $ | (30 | ) | $ | (33 | ) | $ | (20 | ) | $ | 1 | |||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||
| Page 40 | |
Reinsurance Group of America, Incorporated | |||||||||||||||||||||
Reconciliations of Stockholders’ Equity to Stockholders’ Equity Excluding AOCI | |||||||||||||||||||||
(USD millions except per share data) | |||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||||
Stockholders’ equity | $ | 9,301 | $ | 11,601 | $ | 11,524 | $ | 10,709 | $ | 9,670 | |||||||||||
Less effect of AOCI: | |||||||||||||||||||||
Accumulated currency translation adjustments | (223 | ) | (92 | ) | (157 | ) | (123 | ) | (147 | ) | |||||||||||
Unrealized appreciation of securities | 1,426 | 3,299 | 3,472 | 2,816 | 1,964 | ||||||||||||||||
Pension and postretirement benefits | (73 | ) | (70 | ) | (57 | ) | (51 | ) | (51 | ) | |||||||||||
Stockholders’ equity, excluding AOCI | $ | 8,171 | $ | 8,464 | $ | 8,266 | $ | 8,067 | $ | 7,904 | |||||||||||
Reconciliations of Book Value Per Share to Book Value Per Share Excluding AOCI | |||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||||||||||||
2020 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||||
Book value per share | $ | 150.88 | $ | 185.17 | $ | 184.06 | $ | 170.64 | $ | 154.61 | |||||||||||
Less effect of AOCI: | |||||||||||||||||||||
Accumulated currency translation adjustments | (3.62 | ) | (1.46 | ) | (2.51 | ) | (1.96 | ) | (2.36 | ) | |||||||||||
Unrealized appreciation of securities | 23.14 | 52.65 | 55.46 | 44.87 | 31.41 | ||||||||||||||||
Pension and postretirement benefits | (1.19 | ) | (1.12 | ) | (0.91 | ) | (0.81 | ) | (0.82 | ) | |||||||||||
Book value per share, excluding AOCI | $ | 132.55 | $ | 135.10 | $ | 132.02 | $ | 128.54 | $ | 126.38 | |||||||||||
| Page 41 | |
