SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 24, 2006
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact name of registrant as specified in its charter)
Missouri
(State or other jurisdiction of incorporation)
1-11848 43-1627032
(Commission File Number) (I.R.S. Employer Identification No.)
1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017-6039
(Address of principal executive offices) (zip code)
(636) 736-7000
(Registrant's telephone number, including area code)
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))
1
ITEM 2.02 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION
As disclosed in the Company's quarterly report on Form 10-Q for the period
ending March 31, 2006, during the first quarter of 2006, the Company changed its
method of allocating capital to its reportable segments from a method based upon
regulatory capital requirements ("RBC") to one based on underlying economic
capital ("EC") levels. The economic capital model is an internally developed
risk capital model, the purpose of which is to measure the risk in the business
and to provide a basis upon which capital is deployed. The economic capital
model considers the unique and specific nature of the risks inherent in RGA's
businesses. This is in contrast to the standardized regulatory risk based
capital formula, which is not as refined in its risk calculations with respect
to each of the Company's businesses. As a result of the economic capital
allocation process, a portion of investment income and investment related gains
(losses) is credited or charged to the reportable segments based on the level of
allocated equity. In addition, the reportable segments are charged for excess
capital utilized above the allocated economic capital basis. This charge is
included in policy acquisition costs and other insurance expenses.
Management believes that the change from the RBC to EC basis of allocating
capital is considered a change in measurement of segment results, not
composition. The Company's segment results by quarter for 2005 and 2004 have
been revised in this report giving effect to this change. The consolidated
financial statements are not affected by this change. See "Non-GAAP Financial
Measures" below.
The information in Item 2.02 of this Current Report on Form 8-K shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of
such section, nor shall such information be deemed incorporated by reference in
any filing under the Securities Act of 1933 or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing.
ITEM 7.01 - REGULATION FD DISCLOSURE
As disclosed in the Company's quarterly report on Form 10-Q for the period
ending March 31, 2006, during the first quarter of 2006, the Company changed its
method of allocating capital to its reportable segments from a method based upon
RBC requirements to one based on underlying EC levels. The economic capital
model is an internally developed risk capital model, the purpose of which is to
measure the risk in the business and to provide a basis upon which capital is
deployed. The economic capital model considers the unique and specific nature of
the risks inherent in RGA's businesses. This is in contrast to the standardized
regulatory risk based capital formula, which is not as refined in its risk
calculations with respect to each of the Company's businesses. As a result of
the economic capital allocation process, a portion of investment income and
investment related gains (losses) is credited or charged to the reportable
segments based on the level of allocated equity. In addition, the reportable
segments are charged for excess capital utilized above the allocated economic
capital basis. This charge is included in policy acquisition costs and other
insurance expenses.
Management believes that the change from the RBC to EC basis of allocating
capital is considered a change in measurement of segment results, not
composition. The Company's segment results by quarter for 2005 and 2004 have
been revised in this report giving effect to this change. The consolidated
financial statements are not affected by this change. See "Non-GAAP Financial
Measures" below.
The information in Item 7.01 of this Current Report on Form 8-K shall not be
deemed to be "filed" for the purposes of Section 18 of the Exchange Act, or
otherwise subject to the liabilities of such section, nor shall such information
be deemed incorporated by reference in any filing under the Securities Act of
1933 or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
NON-GAAP FINANCIAL MEASURES
The segment results include information on operating income before income taxes
which is considered a non-GAAP financial measure. Management uses this measure
to analyze financial results and establish target levels and awards under RGA's
management incentive programs. Management believes that operating income, on a
pre-tax and after-tax basis, better measures the ongoing profitability and
underlying trends of the Company's continuing operations, primarily because that
measure excludes the effect of net realized capital gains and losses, as well as
changes in the fair value of embedded derivatives and related deferred
acquisition costs. These items tend to be highly variable, primarily due to the
credit market and interest rate environment and are not necessarily indicative
of the performance of the Company's underlying businesses. Additionally,
operating income excludes any net gain or loss from discontinued operations and
the cumulative effect of any accounting changes, which management believes are
not indicative of the Company's ongoing operations. The definition of operating
income can vary by company and is not considered a substitute for GAAP net
income.
2
U.S. OPERATIONS SEGMENT
(000's)
YEAR ENDED DECEMBER 31, 2005
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $568,018 $575,812 $611,389 $678,341 $2,433,560
Investment income, net of related expenses 120,049 107,305 128,944 127,641 483,939
Investment related gains (losses), net 2,483 (4,520) (459) (7,187) (9,683)
Change in value of embedded derivatives 22,561 (19,917) 3,536 1,264 7,444
Other revenue 8,251 9,949 8,955 11,177 38,332
-------- -------- -------- -------- ----------
Total revenues 721,362 668,629 752,365 811,236 2,953,592
BENEFITS AND EXPENSES:
Claims and other policy benefits 481,580 501,952 485,356 544,525 2,013,413
Interest credited 54,258 38,033 59,381 54,252 205,924
Policy acquisition costs and other insurance expenses 89,286 102,367 105,360 115,762 412,775
Change in DAC associated with change in value
of embedded derivatives 15,708 (13,604) 3,858 1,010 6,972
Other operating expenses 12,034 12,619 12,619 13,484 50,756
-------- -------- -------- -------- ----------
Total benefits and expenses 652,866 641,367 666,574 729,033 2,689,840
Income before income taxes $ 68,496 $ 27,262 $ 85,791 $ 82,203 $ 263,752
-------- -------- -------- -------- ----------
Investment related (gains) losses, net (1) (1,956) 4,198 621 6,702 9,565
Change in value of embedded derivatives, net (2) (6,853) 6,313 322 (254) (472)
-------- -------- -------- -------- ----------
Operating income before income taxes $ 59,687 $ 37,773 $ 86,734 $ 88,651 $ 272,845
-------- -------- -------- -------- ----------
(1) U.S. Operations is net of DAC offsets of $527, $(322), $162 and $(485) for
the four quarters of 2005, respectively.
(2) U.S. Operations is net of DAC offsets included in change in deferred
acquisition cost associated with change in value of embedded derivative of
$15,708, $(13,604), $3,858 and $1,010 for the four quarters of 2005,
respectively.
YEAR ENDED DECEMBER 31, 2004
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $532,381 $531,331 $539,750 $609,088 $2,212,550
Investment income, net of related expenses 103,288 103,548 110,618 132,355 449,809
Investment related gains (losses), net 14,417 4,225 (1,192) (6,519) 10,931
Change in value of embedded derivatives 1,522 17,472 (18,610) 25,720 26,104
Other revenue 9,249 9,429 9,776 10,758 39,212
-------- -------- -------- -------- -----------
Total revenues 660,857 666,005 640,342 771,402 2,738,606
BENEFITS AND EXPENSES:
Claims and other policy benefits 429,855 432,684 422,946 485,812 1,771,297
Interest credited 46,572 43,821 46,725 59,652 196,770
Policy acquisition costs and other insurance expenses 89,454 86,649 100,677 122,614 399,394
Change in DAC associated with change in value
of embedded derivatives 4,200 13,293 (13,209) 18,612 22,896
Other operating expenses 14,582 13,598 14,179 11,768 54,127
-------- -------- -------- -------- -----------
Total benefits and expenses 584,663 590,045 571,318 698,458 2,444,484
Income before income taxes $ 76,194 $ 75,960 $ 69,024 $ 72,944 $ 294,122
-------- -------- -------- -------- -----------
Investment related (gains) losses, net (1) (14,360) (4,658) 299 7,938 (10,781)
Change in value of embedded derivatives, net (2) (3) 2,678 (4,179) 5,434 (1,979) 1,954
-------- -------- -------- -------- -----------
Operating income before income taxes $ 64,512 $ 67,123 $ 74,757 $ 78,903 $ 285,295
-------- -------- -------- -------- -----------
(1) U.S. Operations is net of DAC offsets of $57, $(433), $(893) and $1,419 for
the four quarters of 2004, respectively.
(2) U.S. Operations is net of DAC offsets included in change in deferred
acquisition cost associated with change in value of embedded derivative of
$4,200, $13,293, $(13,209) and $18,612 for the four quarters of 2004,
respectively.
(3) U.S. Operations is net of DAC offsets included in policy acquisition costs
and other insurance expenses of $(20,782) for the fourth quarter of 2004
and investment income offsets of $33 and $25,911 for the third and fourth
quarters of 2004, respectively.
3
U.S. OPERATIONS SEGMENT
SUBSEGMENT - TRADITIONAL REINSURANCE
(000's)
YEAR ENDED DECEMBER 31, 2005
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $566,794 $574,695 $610,242 $677,159 $2,428,890
Investment income, net of related expenses 63,325 66,172 69,011 70,023 268,531
Investment related losses, net (1,031) (2,633) (861) (4,078) (8,603)
Other revenue 566 145 185 422 1,318
-------- -------- -------- -------- ----------
Total revenues 629,654 638,379 678,577 743,526 2,690,136
BENEFITS AND EXPENSES:
Claims and other policy benefits 483,262 497,019 484,493 543,763 2,008,537
Interest credited 14,007 14,303 13,553 12,095 53,958
Policy acquisition costs and other insurance expenses 73,638 87,817 90,696 102,830 354,981
Other operating expenses 9,259 10,038 10,159 10,833 40,289
-------- -------- -------- -------- ----------
Total benefits and expenses 580,166 609,177 598,901 669,521 2,457,765
Income before income taxes $ 49,488 $ 29,202 $ 79,676 $ 74,005 $ 232,371
-------- -------- -------- -------- ----------
Investment related losses, net 1,031 2,633 861 4,078 8,603
Change in value of embedded derivatives, net -- -- -- -- --
-------- -------- -------- -------- ----------
Operating income before income taxes $ 50,519 $ 31,835 $ 80,537 $ 78,083 $ 240,974
-------- -------- -------- -------- ----------
YEAR ENDED DECEMBER 31, 2004
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $531,199 $530,140 $538,524 $607,854 $2,207,717
Investment income, net of related expenses 58,587 56,680 58,702 63,303 237,272
Investment related gains (losses), net 14,301 5,028 (443) (769) 18,117
Other revenue 1,281 651 704 580 3,216
-------- -------- -------- -------- ----------
Total revenues 605,368 592,499 597,487 670,968 2,466,322
BENEFITS AND EXPENSES:
Claims and other policy benefits 430,875 430,303 414,249 486,117 1,761,544
Interest credited 12,078 12,117 12,073 14,022 50,290
Policy acquisition costs and other insurance expenses 79,119 75,517 91,459 95,170 341,265
Other operating expenses 12,001 11,041 11,691 9,214 43,947
-------- -------- -------- -------- ----------
Total benefits and expenses 534,073 528,978 529,472 604,523 2,197,046
Income before income taxes $ 71,295 $ 63,521 $ 68,015 $ 66,445 $ 269,276
-------- -------- -------- -------- ----------
Investment related (gains) losses, net (14,301) (5,028) 443 769 (18,117)
Change in value of embedded derivatives, net -- -- -- -- --
-------- -------- -------- -------- ----------
Operating income before income taxes $ 56,994 $ 58,493 $ 68,458 $ 67,214 $ 251,159
-------- -------- -------- -------- ----------
4
U.S. OPERATIONS SEGMENT
SUBSEGMENT - ASSET-INTENSIVE REINSURANCE
(000's)
YEAR ENDED DECEMBER 31, 2005
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $ 1,224 $ 1,117 $ 1,147 $ 1,182 $ 4,670
Investment income, net of related expenses 56,654 41,041 59,776 57,470 214,941
Investment related gains (losses), net 3,516 (1,882) 405 (3,098) (1,059)
Change in value of embedded derivatives 22,561 (19,917) 3,536 1,264 7,444
Other revenue 1,047 2,797 2,116 2,661 8,621
-------- -------- -------- -------- --------
Total revenues 85,002 23,156 66,980 59,479 234,617
BENEFITS AND EXPENSES:
Claims and other policy benefits (1,684) 4,933 860 761 4,870
Interest credited 40,251 23,730 45,828 42,157 151,966
Policy acquisition costs and other insurance expenses 13,687 12,437 12,559 10,753 49,436
Change in DAC associated with change in value
of embedded derivatives 15,708 (13,604) 3,858 1,010 6,972
Other operating expenses 1,338 1,236 1,173 1,309 5,056
-------- -------- -------- -------- --------
Total benefits and expenses 69,300 28,732 64,278 55,990 218,300
Income (loss) before income taxes $15,702 $ (5,576) $ 2,702 $ 3,489 $ 16,317
-------- -------- -------- -------- --------
Investment related (gains)/losses, net (1) (2,989) 1,560 (243) 2,613 941
Change in value of embedded derivatives, net (2) (6,853) 6,313 322 (254) (472)
-------- -------- -------- -------- --------
Operating income before income taxes $ 5,860 $ 2,297 $ 2,781 $ 5,848 $ 16,786
-------- -------- -------- -------- --------
(1) Asset Intensive is net of DAC offsets of $527, $(322), $162 and $(485) for
the four quarters of 2005, respectively.
(2) Asset Intensive is net of DAC offsets included in change in deferred
acquisition cost associated with change in value of embedded derivative of
$15,708, $(13,604), $3,858 and $1,010 for the four quarters of 2005,
respectively.
YEAR ENDED DECEMBER 31, 2004
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $ 1,182 $ 1,191 $ 1,226 $ 1,234 $ 4,833
Investment income, net of related expenses 44,628 46,700 51,738 68,882 211,948
Investment related gains (losses), net 87 (824) (748) (5,747) (7,232)
Change in value of embedded derivatives 1,522 17,472 (18,610) 25,720 26,104
Other revenue 1,670 1,906 2,645 3,514 9,735
------- ------- -------- ------- --------
Total revenues 49,089 66,445 36,251 93,603 245,388
BENEFITS AND EXPENSES:
Claims and other policy benefits (1,021) 3,248 7,829 (305) 9,751
Interest credited 34,494 31,704 34,652 45,630 146,480
Policy acquisition costs and other insurance expenses 8,050 8,883 7,599 25,305 49,837
Change in DAC associated with change in value
of embedded derivatives 4,200 13,293 (13,209) 18,612 22,896
Other operating expenses 1,159 1,029 1,294 1,232 4,714
------- ------- -------- ------- --------
Total benefits and expenses 46,882 58,157 38,165 90,474 233,678
Income (loss) before income taxes $ 2,207 $ 8,288 $ (1,914) $ 3,129 $ 11,710
------- ------- -------- ------- --------
Investment related (gains)/losses, net (1) (30) 391 (145) 7,166 7,382
Change in value of embedded derivatives, net (2) (3) 2,678 (4,179) 5,434 (1,979) 1,954
------- ------- -------- ------- --------
Operating income before income taxes $ 4,855 $ 4,500 $ 3,375 $ 8,316 $ 21,046
------- ------- -------- ------- --------
(1) Asset Intensive is net of DAC offsets of $57, $(433), $(893) and $1,419 for
the four quarters of 2004, respectively.
(2) Asset Intensive is net of DAC offsets included in change in deferred
acquisition cost associated with change in value of embedded derivative of
$4,200, $13,293, $(13,209) and $18,612 for the four quarters of 2004,
respectively.
(3) Asset Intensive is net of DAC offsets included in policy acquisition costs
and other insurance expenses of $(20,782) for the fourth quarter of 2004
and investment income offsets of $33 and $25,911 for the third and fourth
quarters of 2004, respectively.
5
U.S. OPERATIONS SEGMENT
SUBSEGMENT - FINANCIAL REINSURANCE
(000's)
YEAR ENDED DECEMBER 31, 2005
-----------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------- ------- ------- ------- -------
REVENUES:
Investment income, net of related expenses 70 92 157 148 467
Investment related losses, net (2) (5) (3) (11) (21)
Other revenue 6,638 7,007 6,654 8,094 28,393
------ ------ ------ ------ -------
Total revenues 6,706 7,094 6,808 8,231 28,839
BENEFITS AND EXPENSES:
Claims and other policy benefits 2 0 3 1 6
Policy acquisition costs and other insurance expenses 1,961 2,113 2,105 2,179 8,358
Other operating expenses 1,437 1,345 1,287 1,342 5,411
------ ------ ------ ------ -------
Total benefits and expenses 3,400 3,458 3,395 3,522 13,775
Income before income taxes $3,306 $3,636 $3,413 $4,709 $15,064
------ ------ ------ ------ -------
Investment related losses, net 2 5 3 11 21
Change in value of embedded derivatives, net -- -- -- -- --
------ ------ ------ ------ -------
Operating income before income taxes $3,308 $3,641 $3,416 $4,720 $15,085
------ ------ ------ ------ -------
YEAR ENDED DECEMBER 31, 2004
-----------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------- ------- ------- ------- -------
REVENUES:
Investment income, net of related expenses 73 168 178 170 589
Investment related gains (losses), net 29 21 (1) (3) 46
Other revenue 6,298 6,872 6,427 6,664 26,261
------ ------ ------ ------ -------
Total revenues 6,400 7,061 6,604 6,831 26,896
BENEFITS AND EXPENSES:
Claims and other policy benefits 1 (867) 868 -- 2
Policy acquisition costs and other insurance expenses 2,285 2,249 1,619 2,139 8,292
Other operating expenses 1,422 1,528 1,194 1,322 5,466
------ ------ ------ ------ -------
Total benefits and expenses 3,708 2,910 3,681 3,461 13,760
Income before income taxes $2,692 $4,151 $2,923 $3,370 $ 13,136
------ ------ ------ ------ -------
Investment related (gains) losses, net (29) (21) 1 3 (46)
Change in value of embedded derivatives, net -- -- -- -- --
------ ------ ------ ------ -------
Operating income before income taxes $2,663 $4,130 $2,924 $3,373 $ 13,090
------ ------ ------ ------ -------
6
CANADA SEGMENT
(000's)
YEAR ENDED DECEMBER 31, 2005
---------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------- -------- -------- -------- --------
REVENUES:
Net premiums $73,756 $ 76,854 $ 89,074 $103,447 $343,131
Investment income, net of related expenses 22,537 22,372 22,728 25,372 93,009
Investment related gains, net 635 1,667 678 517 3,497
Other revenue 34 19 (319) (13) (279)
------- -------- -------- -------- --------
Total revenues 96,962 100,912 112,161 129,323 439,358
BENEFITS AND EXPENSES:
Claims and other policy benefits 68,645 74,252 73,810 91,252 307,959
Interest credited 357 252 266 230 1,105
Policy acquisition costs and other insurance expenses 8,838 11,992 22,474 21,617 64,921
Other operating expenses 3,460 3,619 3,921 4,174 15,174
------- -------- -------- -------- --------
Total benefits and expenses 81,300 90,115 100,471 117,273 389,159
Income before income taxes $15,662 $ 10,797 $ 11,690 $ 12,050 $ 50,199
------- -------- -------- -------- --------
Investment related gains, net (635) (1,648) (618) (464) (3,365)
Change in value of embedded derivatives, net -- -- -- -- --
------- -------- -------- -------- --------
Operating income before income taxes $15,027 $ 9,149 $ 11,072 $ 11,586 $ 46,834
------- -------- -------- -------- --------
YEAR ENDED DECEMBER 31, 2004
------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
------- ------- ------- ------- --------
REVENUES:
Net premiums $60,147 $61,831 $59,230 $72,645 $253,853
Investment income, net of related expenses 19,055 18,636 19,583 21,489 78,763
Investment related gains, net 414 5,219 2 2,464 8,099
Other revenue 38 31 (31) (6) 32
------- ------- ------- ------- --------
Total revenues 79,654 85,717 78,784 96,592 340,747
BENEFITS AND EXPENSES:
Claims and other policy benefits 59,366 59,499 59,568 72,109 250,542
Interest credited 377 418 530 515 1,840
Policy acquisition costs and other insurance expenses 9,268 10,528 8,049 10,094 37,939
Other operating expenses 2,728 2,761 2,719 2,952 11,160
------- ------- ------- ------- --------
Total benefits and expenses 71,739 73,206 70,866 85,670 301,481
Income before income taxes $ 7,915 $12,511 $ 7,918 $10,922 $ 39,266
------- ------- ------- ------- --------
Investment related gains, net (414) (5,219) (2) (2,464) (8,099)
Change in value of embedded derivatives, net -- -- -- -- --
------- ------- ------- ------- --------
Operating income before income taxes $ 7,501 $ 7,292 $ 7,916 $ 8,458 $ 31,167
------- ------- ------- ------- --------
7
ASIA-PACIFIC SEGMENT
(000's)
YEAR ENDED DECEMBER 31, 2005
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $118,208 $145,018 $135,336 $136,365 $534,927
Investment income, net of related expenses 4,740 5,269 5,409 6,355 21,773
Investment related gains (losses), net (47) 101 21 (344) (269)
Other revenue (187) 2,135 699 1,946 4,593
-------- -------- -------- -------- --------
Total revenues 122,714 152,523 141,465 144,322 561,024
BENEFITS AND EXPENSES:
Claims and other policy benefits 90,660 110,617 114,059 104,599 419,935
Policy acquisition costs and other insurance expenses 24,470 23,371 18,758 15,785 82,384
Other operating expenses 4,674 7,159 7,232 8,372 27,437
-------- -------- -------- -------- --------
Total benefits and expenses 119,804 141,147 140,049 128,756 529,756
Income before income taxes $ 2,910 $ 11,376 $ 1,416 $ 15,566 $ 31,268
-------- -------- -------- -------- --------
Investment related (gains) losses, net 47 (101) (21) 344 269
Change in value of embedded derivatives, net -- -- -- -- --
-------- -------- -------- -------- --------
Operating income before income taxes $ 2,957 $ 11,275 $ 1,395 $ 15,910 $ 31,537
-------- -------- -------- -------- --------
YEAR ENDED DECEMBER 31, 2004
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $103,539 $84,178 $103,363 $108,041 $399,121
Investment income, net of related expenses 2,802 2,404 3,343 3,933 12,482
Investment related gains (losses), net 216 (193) 190 142 355
Other revenue 635 2,950 (423) 1,959 5,121
-------- ------- -------- -------- --------
Total revenues 107,192 89,339 106,473 114,075 417,079
BENEFITS AND EXPENSES:
Claims and other policy benefits 74,845 67,380 84,612 103,307 330,144
Policy acquisition costs and other insurance expenses 22,261 12,602 18,196 2,067 55,126
Other operating expenses 4,742 5,672 6,476 7,471 24,361
-------- ------- -------- -------- --------
Total benefits and expenses 101,848 85,654 109,284 112,845 409,631
Income (loss) before income taxes $ 5,344 $ 3,685 $ (2,811) $ 1,230 $ 7,448
-------- ------- -------- -------- --------
Investment related (gains) losses, net (216) 193 (190) (142) (355)
Change in value of embedded derivatives, net -- -- -- -- --
-------- ------- -------- -------- --------
Operating income (loss) before income taxes $ 5,128 $ 3,878 $ (3,001) $ 1,088 $ 7,093
-------- ------- -------- -------- --------
8
EUROPE & SOUTH AFRICA SEGMENT
(000's)
YEAR ENDED DECEMBER 31, 2005
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $141,358 $132,972 $137,145 $141,217 $552,692
Investment income, net of related expenses 2,528 2,502 3,184 3,280 11,494
Investment related gains (losses), net 14 (180) (16) (136) (318)
Other revenue 101 69 88 41 299
-------- -------- -------- -------- --------
Total revenues 144,001 135,363 140,401 144,402 564,167
BENEFITS AND EXPENSES:
Claims and other policy benefits 96,332 112,117 97,039 99,633 405,121
Interest credited 363 190 109 220 882
Policy acquisition costs and other insurance expenses 27,133 22,782 20,262 24,676 94,853
Other operating expenses 5,660 7,118 7,264 7,749 27,791
-------- -------- -------- -------- --------
Total benefits and expenses 129,488 142,207 124,674 132,278 528,647
Income (loss) before income taxes $ 14,513 $ (6,844) $ 15,727 $ 12,124 $ 35,520
-------- -------- -------- -------- --------
Investment related (gains) losses, net (14) 180 16 136 318
Change in value of embedded derivatives, net -- -- -- -- --
-------- -------- -------- -------- --------
Operating income (loss) before income taxes $ 14,499 $ (6,664) $ 15,743 $ 12,260 $ 35,838
-------- -------- -------- -------- --------
YEAR ENDED DECEMBER 31, 2004
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $117,203 $118,951 $116,872 $125,580 $478,606
Investment income, net of related expenses 1,171 1,534 1,751 2,051 6,507
Investment related gains, net 1,294 676 150 236 2,356
Other revenue 412 399 627 (63) 1,375
-------- -------- -------- -------- --------
Total revenues 120,080 121,560 119,400 127,804 488,844
BENEFITS AND EXPENSES:
Claims and other policy benefits 81,997 73,811 76,088 82,177 314,073
Interest credited 0 0 0 0 0
Policy acquisition costs and other insurance expenses 29,585 30,122 28,253 35,711 123,671
Other operating expenses 4,682 5,524 5,479 5,787 21,472
-------- -------- -------- -------- --------
Total benefits and expenses 116,264 109,457 109,820 123,675 459,216
Income before income taxes $ 3,816 $ 12,103 $ 9,580 $ 4,129 $ 29,628
-------- -------- -------- -------- --------
Investment related gains, net (1,294) (676) (150) (236) (2,356)
Change in value of embedded derivatives, net -- -- -- -- --
-------- -------- -------- -------- --------
Operating income before income taxes $ 2,522 $ 11,427 $ 9,430 $ 3,893 $ 27,272
-------- -------- -------- -------- --------
9
CORPORATE & OTHER SEGMENT
(000's)
YEAR ENDED DECEMBER 31, 2005
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $ 480 $ 698 $ 588 $ 699 $ 2,465
Investment income, net of related expenses 7,199 8,836 6,191 6,724 28,950
Investment related gains, net 894 15,882 2,435 1,152 20,363
Other revenue 2,604 8,489 2,811 942 14,846
-------- -------- -------- -------- --------
Total revenues 11,177 33,905 12,025 9,517 66,624
BENEFITS AND EXPENSES:
Claims and other policy benefits 836 28,992 4,072 7,574 41,474
Interest credited 75 140 163 87 465
Policy acquisition costs and other insurance expenses (5,751) (2,657) (8,156) (9,010) (25,574)
Other operating expenses 7,178 7,517 6,956 11,573 33,224
Interest expense 9,885 9,895 10,052 11,596 41,428
-------- -------- -------- -------- --------
Total benefits and expenses 12,223 43,887 13,087 21,820 91,017
Loss before income taxes $(1,046) $ (9,982) $(1,062) $(12,303) $(24,393)
-------- -------- -------- -------- --------
Investment related gains, net (1) (894) (12,834) (2,435) (1,152) (17,315)
Change in value of embedded derivatives, net -- -- -- -- --
-------- -------- -------- -------- --------
Operating loss before income taxes $(1,940) $(22,816) $(3,497) $(13,455) $(41,708)
-------- -------- -------- -------- --------
(1) Corporate & Other is net of DAC offsets of $3,048 included in policy
acquisition costs and other insurance expenses for the second quarter of
2005.
YEAR ENDED DECEMBER 31, 2004
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- -----------
REVENUES:
Net premiums $ 604 $ 1,017 $ 239 $ 1,458 $ 3,318
Investment income, net of related expenses 7,244 8,063 9,287 8,373 32,967
Investment related gains, net 2,075 2,764 1,514 1,379 7,732
Other revenue 1,516 1,950 3,425 2,735 9,626
-------- -------- -------- -------- --------
Total revenues 11,439 13,794 14,465 13,945 53,643
BENEFITS AND EXPENSES:
Claims and other policy benefits 991 1,428 (1,596) 11,658 12,481
Interest credited 69 93 81 78 321
Policy acquisition costs and other insurance expenses (7,500) (5,744) (7,085) (4,772) (25,101)
Other operating expenses 6,795 7,341 8,015 6,625 28,776
Interest expense 9,538 9,542 9,655 9,702 38,437
-------- -------- -------- -------- --------
Total benefits and expenses 9,893 12,660 9,070 23,291 54,914
Income (loss) before income taxes $ 1,546 $ 1,134 $ 5,395 $ (9,346) $ (1,271)
-------- -------- -------- -------- --------
Investment related gains, net (2,075) (2,764) (1,514) (1,379) (7,732)
Change in value of embedded derivatives, net -- -- -- -- --
-------- -------- -------- -------- --------
Operating income (loss) before income taxes $ (529) $(1,630) $ 3,881 $(10,725) $ (9,003)
-------- -------- -------- -------- --------
10
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, 2006 By: /s/ Jack B. Lay
------------------------------------
Jack B. Lay
Executive Vice President and Chief
Financial Officer
