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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: January 17, 2002
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
MISSOURI 1-11848 43-1627032
(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification Number)
Incorporation)
1370 Timberlake Manor Parkway
Chesterfield, Missouri 63017
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (636) 736-7000
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) The following exhibits are filed as part of this report on Form 8-K.
Exhibit
Number Description
99.1 Press Release dated January 17, 2002
ITEM 9. REGULATION FD DISCLOSURE
On January 17, 2002, Reinsurance Group of America, Incorporated issued
a press release regarding, among other things, certain financial results. The
press release is attached hereto as Exhibit 99.1, and incorporated by reference
herein.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Reinsurance Group Of America, Incorporated
Date: January 17, 2002 By:
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Name: Jack B. Lay
Title: Executive Vice President and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release issued January 17, 2002
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[RGA LOGO]
EXHIBIT 99.1
NEWS
For further information, contact
Jack B. Lay
Executive Vice President and
Chief Financial Officer
(636) 736-7439
FOR IMMEDIATE RELEASE
REINSURANCE GROUP OF AMERICA REPORTS ADVERSE EARNINGS EFFECT
OF HIGH CLAIMS LEVELS IN U.S.
ST. LOUIS, January 17, 2002 - Reinsurance Group of America,
Incorporated (NYSE:RGA) reported today that fourth-quarter operating earnings
will fall significantly short of comparable prior-year levels, primarily due to
high claims levels in its U.S. operating segment, lower returns on its
investment portfolio, and the previously announced reserve additions for its
Argentine pension business.
Based upon its preliminary review of the fourth-quarter operating
results, the company expects to report operating results, which exclude the
effect of capital gains and losses and discontinued operations, in the range of
$0.01 to $0.05 per share, compared to $0.72 per share in the comparable quarter
last year. Including the effect of capital gains and losses and discontinued
operations, the company expects to report a net loss of $0.55 to $0.59 per
share compared to net income of $0.19 per share in the prior-year fourth
quarter. While the majority of the operating earnings shortfall relates to $35
million, pretax, or $0.45 per share, after tax, of reserve additions
attributable to the Argentine pension situation, preliminary estimates show
claims in the U.S. operating segment will exceed the expected claims level by
$15-$20 million, pretax, or between $0.19 and $0.25 per share, after tax. The
company's first quarter 2001 results were also affected by unexpectedly high
claims levels, so the full-year results will reflect a significant negative
impact from higher-than-expected claims levels. The continuation of lower
investment yields resulted in lower investment portfolio returns for 2001. Those
lower investment yields are expected to adversely affect the fourth-quarter
results by approximately $4 million, pretax, or $0.05 per share, after tax, when
compared to the prior-year fourth quarter.
A. Greig Woodring, president and chief executive officer, commented,
"We are especially disappointed by the level of claims received within our U.S.
operating segment in the fourth quarter, particularly late in December. While
mortality fluctuations over short periods are part of our business, the fact
that we had two difficult quarters this year was unexpected. Because of the
long-term nature of our business, and the dynamics of estimating mortality flows
over extended periods of time, it is always difficult to predict longer-term
margins or earnings growth rates with any degree of precision. We are conducting
a thorough review of the business generating these claims levels to identify any
particular trends and give us a better insight on the recent claims experience
and any potential impact on our longer-term expectations."
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The company also expects to report approximately $33 million, pretax,
of net capital losses for the quarter. Included in that amount is $11 million of
capital losses relating to liquidation of Argentine securities, $4 million of
which originally backed the company's pension portfolio and $7 million of which
relate to portfolio activity in the company's Argentine life insurance
subsidiary. RGA also wrote down approximately $17 million in its collateralized
bond obligation portfolio to reflect declines in value of those securities, and
sustained losses of $9 million on its holdings of Enron-related securities.
A conference call to discuss items reported herein is scheduled at 9:00
a.m. Eastern Time on Friday, January 18. Interested parties may access the call
by dialing 1-800-310-1961. The access code is 771105. Participants are asked to
call the assigned number approximately ten minutes before the conference call
begins. A live audio webcast of that conference call will be available on RGA's
website at www.rgare.com. A replay will be available at the same address for ten
days following the conference call.
RGA is scheduled to report its fourth-quarter results on Thursday,
January 24, at approximately 5:00 p.m. Eastern Time. The release will be issued
via newswire and will also be available through RGA's website. A conference call
is scheduled on Friday, January 25, at 9:00 a.m. Eastern Time. A live audio
webcast of that call will be available on the company's website, as will a
replay of that call for 10 days thereafter.
Reinsurance Group of America, Incorporated, through its subsidiaries,
RGA Reinsurance Company and RGA Life Reinsurance Company of Canada, is among the
largest providers of life reinsurance in North America. In addition to its North
American operations, Reinsurance Group of America, Incorporated has subsidiary
companies or branch offices in Argentina, Australia, Barbados, Spain, Mexico,
Hong Kong, Japan, Taiwan, South Africa, and the United Kingdom. Worldwide, the
Company has approximately $586 billion of life reinsurance in force, and assets
of $6.5 billion. Metropolitan Life Insurance Company is the beneficial owner of
approximately 58 percent of RGA's outstanding shares.
Forward-Looking Statements
This news release is based on preliminary financial results, which are
subject to further review and adjustment. Statements in this press release
regarding our business which are not historical facts, including, without
limitation, statements and information relating to our future financial
performance, growth rates and potential, increases in premiums, the effect of
mortality rates and experience, claims levels, our views on the life reinsurance
industry and other statements related to our business are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The words "intend," "expect," "project," "estimate," "predict,"
"anticipate," "should," "believe," and other similar expressions also are
intended to identify forward-looking statements. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be predicted
or quantified. Future events and actual results, performance and achievements
could differ materially from those set forth in, contemplated by or underlying
the forward-looking statements.
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Numerous factors could cause actual results and events to differ
materially from those expressed or implied by forward-looking statements
including, without limitation, (1) material changes in mortality and claims
experience, (2) market conditions and the timing of sales of investment
securities, (3) competitive factors and competitors' responses to our
initiatives, (4) general economic conditions affecting the demand for insurance
and reinsurance in our current and planned markets, (5) changes in the financial
strength and credit ratings of RGA and its subsidiaries and of Metropolitan Life
Insurance Company ("MetLife"), General American Life Insurance Company ("General
American"), and their respective affiliates, and the effect of such changes on
our future results of operations and financial condition, (6) fluctuations in
U.S. and foreign currency exchange rates, interest rates, and securities and
real estate markets, (7) the stability of governments and economies in the
markets in which we operate, (8) the success of our clients, (9) successful
execution of our entry into new markets, (10) successful development and
introduction of new products, (11) regulatory action that may be taken by state
Departments of Insurance with respect to MetLife, General American, or RGA and
its subsidiaries, (12) changes in laws, regulations, and accounting standards
applicable to us and our subsidiaries, and (13) other risks and uncertainties
described in our Annual Report and in our other filings with the Securities and
Exchange Commission.
You are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date on which they are made. We do not
undertake any obligations to update these forward-looking statements, even
though our situation may change in the future. We qualify all of our
forward-looking statements by these cautionary statements.
Forward-looking statements should be evaluated together with the many
risks and uncertainties that affect our business, including those mentioned in
this document and the cautionary statements described in the periodic reports we
file with the Securities and Exchange Commission. For a discussion of these
risks and uncertainties, which could cause actual results to differ materially
from those contained in the forward-looking statements, you are advised to
consult the sections named "Risk Factors" and "Cautionary Statement Regarding
Forward-Looking Statements" contained in our prospectus dated December 3, 2001,
filed with our prospectus supplements, each dated December 12, 2001 and filed
with the Securities and Exchange Commission, which discussions are incorporated
by reference into this document.
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