UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 23, 2008
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
| Missouri (State or Other Jurisdiction of Incorporation) |
1-11848 (Commission File Number) |
43-1627032 (IRS Employer Identification Number) |
1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017
(Address of Principal Executive Office)
(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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On October 23, 2008, Reinsurance Group of America, Incorporated (the “Company”) issued a press
release announcing its earnings for the three-month period ended September 30, 2008 and providing
certain additional information. The press release also notes that a conference call will be held
on October 24, 2008 to discuss the financial and operating results for the three-month period ended
September 30, 2008. A copy of the press release is furnished with this report as Exhibit 99.1 and
shall not be deemed filed pursuant to Instruction B.2 of Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Exhibit | |
99.1
|
Press Release of Reinsurance Group of America, Incorporated dated October 23, 2008 | |
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: October 23, 2008 | By: | /s/ Jack B. Lay | ||
| Jack B. Lay | ||||
| Senior Executive Vice President and Chief Financial Officer | ||||
Exhibit Index
| Exhibit No. | Exhibit | |
99.1
|
Press Release of Reinsurance Group of America, Incorporated dated October 23, 2008. |
Exhibit 99.1
For further information, contact
Jack B. Lay
Senior Executive Vice President
and Chief Financial Officer
(636) 736-7000
Jack B. Lay
Senior Executive Vice President
and Chief Financial Officer
(636) 736-7000
FOR IMMEDIATE RELEASE
REINSURANCE GROUP OF AMERICA REPORTS THIRD-QUARTER RESULTS;
OPERATING EARNINGS PER SHARE UP 25 PERCENT
OPERATING EARNINGS PER SHARE UP 25 PERCENT
ST. LOUIS, October 23, 2008 — Reinsurance Group of America, Incorporated (NYSE:RGA.A and
RGA.B), a leading global provider of life reinsurance, reported net income for the third quarter of
$25.2 million, or $0.40 per diluted share, compared to $76.5 million, or $1.19 per diluted share,
in the prior-year quarter. RGA uses a non-GAAP financial measure called operating income as a
basis for analyzing financial results. The definition of operating income and reconciliations to
GAAP net income are provided in the following tables. Operating income increased to $118.5
million, or $1.86 per diluted share, from $95.6 million, or $1.49 per diluted share in the year-ago
quarter, a 25 percent increase on a per share basis, with Canada, Asia Pacific, and Europe and
South Africa operations contributing to the strong performance. Third-quarter net premiums rose 6
percent, to $1,303.6 million, from $1,227.9 million a year ago. Net investment income totaled
$220.2 million versus $190.5 million the year before.
Net income for the quarter included approximately $99.8 million in net investment losses,
including impairments. This amount is pre-tax and before the impact of deferred acquisition costs
(DAC). After tax and DAC, the losses totaled $75.4 million, or approximately 3 percent of
shareholders’ equity. The losses were primarily associated with RGA’s investments in the financial
services sector, including Lehman Brothers, American International Group (AIG), Washington Mutual,
Fannie Mae, Freddie Mac and various mortgage-related structured securities. Additionally, net
income included unrealized losses of $21.1 million, after taxes and DAC, due to the decline in the
fair value of embedded derivatives associated with modified coinsurance and funds withheld
treaties. This non-cash, unrealized loss is due to widening credit spreads on the investment
portfolios underlying certain funds withheld annuity reinsurance treaties.
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On a year-to-date basis for 2008, net income totaled $167.4 million or $2.62 per diluted
share, compared to $230.2 million, or $3.59 per diluted share, for 2007. Operating income totaled
$299.2 million, or $4.68 per diluted share, compared to $262.3 million, or $4.08 per diluted share,
in the prior-year period, a 15 percent increase on a per share basis. Consolidated net premiums
were up 11 percent, to $3,960.2 million from $3,561.0 million.
A. Greig Woodring, president and chief executive officer, commented, “The extraordinary events
and issues affecting the global financial markets caused investment value deterioration and
resultant capital losses during the third quarter. We have taken an aggressive posture in
recording impairments in value of securities. In addition, we have selectively reduced exposure to
distressed names through securities sales. Although the environment remains extremely volatile, we
believe our portfolio is well-positioned.”
RGA’s investment profile includes 97 percent of its fixed maturity securities held in the
investment grade categories with an average credit rating of “A+”. The structured residential
mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) portfolios
continue to be highly rated with 99 percent and 84 percent of the RMBS and CMBS rated “AAA”,
respectively. Additionally, 8 percent of the CMBS portfolio is rated in the “AA” category. Gross
pre-tax unrealized losses on securities increased to $960.6 million from $486.7 million at June 30,
primarily due to spread widening. Net pre-tax unrealized losses totaled $596.3 million at
September 30. On an after-tax basis, gross unrealized losses represent approximately 22 percent of
total shareholders’ equity, excluding accumulated other comprehensive income.
RGA’s subprime mortgage exposure, including funds withheld portfolios, totals $239.6 million
in book value, or less than 2 percent of total invested assets, with 75 percent rated “AA” or
higher, including 28 percent in the “AAA” category. Approximately 9 percent of the subprime
mortgage exposure, or $20.9 million, is rated below investment grade. These figures include the
effect of $11.6 million, pre-tax, in write-downs during the quarter. RGA largely avoided investing
in securities originated in the second half of 2005 and beyond, which RGA believes was a period of
less rigorous underwriting. Exposure to “Alt-A” structured securities totaled $106.5 million,
which includes $13.3 million in write-downs during the quarter. Approximately 83 percent of these
securities are rated “AA” or better.
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RGA maintains a strong liquidity profile, positive cash flows from operations and access to
additional liquidity through its $750 million syndicated credit facility in addition to a Federal
Home Loan Bank borrowing program. RGA does not issue commercial paper and its participation in
securities lending programs is immaterial, with less than $20.0 million outstanding at September
30. RGA’s next scheduled senior debt maturity is in 2011.
Woodring continued, “Despite the very challenging financial markets, we reported a strong
operating quarter. Our operating segments outside the U.S. contributed approximately $82.5 million
in pre-tax operating income compared to $84.2 million for our U.S. operations, as we continue to
increase our geographic diversification. Our operating income is primarily driven by how well we
underwrite mortality risk and is only modestly affected by the financial markets.
“The U.S. reported a pre-tax loss of $11.3 million for the quarter versus income of $66.2
million the year before. The current-quarter results include approximately $68.0 million, pre-tax
and after DAC, in net realized investment losses, and $32.4 million, pre-tax and after DAC,
associated with the change in embedded derivatives associated with funds withheld treaties.
Pre-tax operating income totaled $84.2 million compared to $89.9 million the year before, a
reflection of approximately $20.0 million in adverse mortality experience in the current quarter.
That level of variance is not particularly unusual for that business in any quarter. Net premiums
were up 7 percent to $742.2 million from $691.9 million in the prior-year quarter. On a
year-to-date basis, net premiums have increased 7 percent, at the low end of our guidance range of
7 to 9 percent.
“Our Canada operations reported another strong quarter on very favorable mortality, with
pre-tax net income of $29.7 million compared to $22.8 million a year ago. Pre-tax operating income
totaled $32.0 million versus $20.3 million a year ago, representing a 58 percent increase. Net
premiums increased 4 percent to $128.9 million from $123.7 million in the prior year. On a
year-to-date basis, premiums were up 18 percent, ahead of our guidance range. The impact on the
current-quarter results from currency exchange rate changes relative to the prior year was
immaterial.
“Asia Pacific also reported a strong quarter with pre-tax net income of $21.2 million compared
with $17.2 million in the year-ago quarter. Pre-tax operating income totaled $25.0 million
compared with $17.6 million a year ago. We saw strong bottom-line results driven by favorable
mortality in our emerging markets, particularly Japan, South Korea and Taiwan.
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Net premiums totaled $254.5 million compared to $240.5 million. The prior-year amount was strong
due to the timing of client reporting, which is not unusual in our business. On a year-to-date
basis, net premiums have increased 23 percent. Foreign currency fluctuations positively affected
net premiums and pre-tax operating income by approximately $3.0 million and $1.1 million,
respectively, during the quarter.
“Europe and South Africa results were strong. Pre-tax net income increased to $20.8 million
from $11.7 million a year ago. Pre-tax operating income increased to $25.5 million versus $12.6
million last year, when we experienced high claim levels in the UK. Net premiums increased 3
percent to $176.2 million as we continue to confront a very competitive environment in the UK and a
relatively weak British pound. The year-to-date increase in premiums totaled 9 percent. Foreign
currency exchange fluctuations adversely affected reported net premiums and pre-tax operating
income for the quarter by approximately $9.4 million and $2.0 million, respectively.”
Woodring observed, “We are pleased with the operating results for the quarter. While we are
unable to avoid credit losses in the current environment, we believe our exposure and level of
unrealized losses are manageable and will not significantly affect our strong financial position.
Our investment portfolio remains appropriate to support our various businesses. As demonstrated by
our current-quarter and full-year operating results, our operations remain strong and have
consistently provided for increases in retained capital and positive cash flow. We continue to be
in a position to hold our investment securities until recovery, provided we are comfortable with
the credit. Our operations do not rely on short-term funding or commercial paper, and therefore,
to date, we have experienced no liquidity pressure, nor do we anticipate such pressure in the
foreseeable future.
“The current environment in the financial markets places a premium on capital adequacy,
stability of operations, and effective operating and financial strategies. RGA’s business model is
such that cash outflows are reasonably predictable and quite manageable from a liquidity
perspective. And, despite reporting what we consider to be an extraordinary amount of realized
capital losses for RGA, we still added to our base of retained earnings during the quarter. We
feel our current capital base is adequate to support our business at current operating levels, and
our credit ratings are currently stable. At the same time, we are seeing a number of new business
opportunities, as primary companies look to potentially remove risk from their balance sheets
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through block reinsurance transactions or entire company sales. Some of these transactions could
be sizable. To the extent we are successful in supporting transactions of this nature through
reinsurance structures, we would likely need to add to our equity capital base. We would price any
such block reinsurance opportunities for returns that would be accretive to shareholders. Despite
the uncertain economic environment, we are well-positioned to generate strong operating results,
and will continue to take advantage of opportunities presented by our market.
“On October 6, we announced that our board of directors has authorized and will recommend that
the holders of Class A common stock and Class B common stock approve a proposal to convert Class B
common stock into Class A common stock on a one-for-one basis, pursuant to the existing conversion
terms contained in RGA’s articles of incorporation. A special shareholders’ meeting to consider
the proposal is scheduled for November 25.”
The company also announced that its board of directors declared a regular quarterly dividend
of $0.09, payable November 28 to shareholders of record for both classes of stock as of November 7.
A conference call to discuss the company’s third-quarter results will begin at 9 a.m. Eastern
Time on Friday, October 24. Interested parties may access the call by dialing
877-874-1586 (domestic) or 719-325-4761 (international). The access code is 5022240. A live
audio webcast of the conference call will be available on the company’s investor relations web page
at www.rgare.com. A replay of the conference call will be available at the same address beginning
on Saturday, October 25, for 90 days following the conference call. A telephonic replay will also
be available from October 25 through October 31 at 888-203-1112 (domestic) or 719-457-0820, access
code 5022240.
Reinsurance Group of America, Incorporated is among the largest global providers of life
reinsurance with subsidiary companies or offices in Australia, Barbados, Bermuda, Canada, China,
France, Germany, Hong Kong, India, Ireland, Italy, Japan, Mexico, Poland, South Africa, South
Korea, Spain, Taiwan, the United Kingdom and the United States. Worldwide, the company has
approximately $2.2 trillion of life reinsurance in force, and assets of $21.8 billion.
CAUTIONARY STATEMENT 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
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projections of the earnings, revenues, income or loss, future financial performance and growth
potential of Reinsurance Group of America, Incorporated and its subsidiaries (which we refer to in
the following paragraphs as “we,” “us” or “our”). The words “intend,” “expect,” “project,”
“estimate,” “predict,” “anticipate,” “should,” “believe,” and other similar expressions also are
intended to identify forward-looking statements. Forward-looking statements are inherently subject
to risks and uncertainties, some of which cannot be predicted or quantified. Future events and
actual results, performance and achievements could differ materially from those set forth in,
contemplated by or underlying the forward-looking statements.
Numerous important factors could cause actual results and events to differ materially from
those expressed or implied by forward-looking statements including, without limitation, (1) adverse
changes in mortality, morbidity, lapsation or claims experience, (2) changes in our financial
strength and credit ratings and the effect of such changes on our future results of operations and
financial condition, (3) inadequate risk analysis and underwriting, (4) general economic conditions
or a prolonged economic downturn affecting the demand for insurance and reinsurance in our current
and planned markets, (5) the availability and cost of collateral necessary for regulatory reserves
and capital, (6) market or economic conditions that adversely affect the value of our investment
securities or result in the impairment of all or a portion of the value of certain of our
investment securities, (7) market or economic conditions that adversely affect our ability to make
timely sales of investment securities, (8) risks inherent in our risk management and investment
strategy, including changes in investment portfolio yields due to interest rate or credit quality
changes, (9) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities
and real estate markets, (10) adverse litigation or arbitration
results, (11) the adequacy of reserves, resources and accurate information relating to settlements,
awards and terminated and discontinued lines of business, (12) the stability of and actions by
governments and economies in the markets in which we operate, (13) competitive factors and
competitors’ responses to our initiatives, (14) the success of our clients, (15) successful
execution of our entry into new markets, (16) successful development and introduction of new
products and distribution opportunities, (17) our ability to successfully integrate and operate
reinsurance business that we acquire, (18) regulatory action that may be taken by state Departments
of Insurance with respect to us or our subsidiaries, (19) our dependence on third parties,
including
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those insurance companies and reinsurers to which we cede some reinsurance, third-party investment
managers and others, (20) the threat of natural disasters, catastrophes, terrorist attacks,
epidemics or pandemics anywhere in the world where we or our clients do business, (21) changes in
laws, regulations, and accounting standards applicable to us, our subsidiaries, or our business,
(22) the effect of our status as an insurance holding company and regulatory restrictions on our
ability to pay principal of and interest on our debt obligations, and (23) other risks and
uncertainties described in this document and in our other filings with the Securities and Exchange
Commission.
Forward-looking statements should be evaluated together with the many risks and uncertainties
that affect our business, including those mentioned in this document and described in the periodic
reports we file with the Securities and Exchange Commission. These forward-looking statements speak
only as of the date on which they are made. We do not undertake any obligations to update these
forward-looking statements, even though our situation may change in the future. We qualify all of
our forward-looking statements by these cautionary statements. For a discussion of the risks and
uncertainties that could cause actual results to differ materially from those contained in the
forward-looking statements, you are advised to review the risk factors in our 2007 Form 10-K and
our Form 10-Q for the period ending June 30, 2008.
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Operating Income
RGA uses a non-GAAP financial measure called operating income as
a basis for analyzing financial results. This measure also serves
as a basis for establishing target levels and awards under RGA’s
management incentive programs. Management believes that operating
income, on a pre-tax and after-tax basis, better measures the ongoing
profitability and underlying trends of the company’s continuing
operations, primarily because that measure excludes the effect of net investment related gains and
losses, as well as changes in the fair
value of certain embedded derivatives and related deferred acquisition
costs. These items can be volatile, primarily due to the credit
market and interest rate environment and are not necessarily
indicative of the performance of the company’s underlying businesses. Additionally, operating
income excludes any net gain or loss from
discontinued operations 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. A reconciliation of income before income taxes of the
operating segments to pre-tax operating income (loss) is presented
below their GAAP income statements included in this press release.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Net Income From Continuing Operations
to Operating Income
(Dollars in thousands)
Reconciliation of Net Income From Continuing Operations
to Operating Income
(Dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Unaudited) | 2008 | 2007 | 2008 | 2007 | ||||||||||||
GAAP net
income-continuing
operations |
$ | 25,250 | $ | 80,798 | $ | 172,645 | $ | 236,772 | ||||||||
Reconciliation to
operating
income: |
||||||||||||||||
Capital losses and
other, net
included in
investment
related losses, net |
64,967 | 6,412 | 66,798 | 16,732 | ||||||||||||
Embedded
Derivatives: |
||||||||||||||||
Included in
investment
related losses, net |
92,670 | 34,434 | 197,265 | 37,221 | ||||||||||||
Included in interest
credited |
(28,516 | ) | — | 7,389 | — | |||||||||||
Included in policy
acquisition costs
and
other insurance
expenses |
5,378 | — | (927 | ) | — | |||||||||||
DAC offset, net |
(41,207 | ) | (26,052 | ) | (143,983 | ) | (28,431 | ) | ||||||||
Operating income |
$ | 118,542 | $ | 95,592 | $ | 299,187 | $ | 262,294 | ||||||||
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Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
to Pre-tax Operating Income
(Dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (Unaudited) | 2008 | 2007 | 2008 | 2007 | ||||||||||||
Income from
continuing
operations before
income taxes |
$ | 32,546 | $ | 121,730 | $ | 260,198 | $ | 364,673 | ||||||||
Reconciliation to
pre-tax
operating income: |
||||||||||||||||
Capital losses and
other, net
included in
investment
related losses, net |
99,801 | 9,371 | 102,625 | 25,211 | ||||||||||||
Embedded
Derivatives: |
||||||||||||||||
Included in
investment
related losses, net |
142,569 | 52,975 | 303,484 | 57,263 | ||||||||||||
Included in interest
credited |
(43,871 | ) | — | 11,367 | — | |||||||||||
Included in policy
acquisition costs
and
other insurance
expenses |
8,274 | — | (1,426 | ) | — | |||||||||||
DAC offset, net |
(63,394 | ) | (40,079 | ) | (221,512 | ) | (43,739 | ) | ||||||||
Pre-tax operating
income |
$ | 175,925 | $ | 143,997 | $ | 454,736 | $ | 403,408 | ||||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
Condensed Consolidated Statements of Income
(Dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| (Unaudited) | September 30, | September 30, | ||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues: |
||||||||||||||||
Net premiums |
$ | 1,303,590 | $ | 1,227,907 | $ | 3,960,210 | $ | 3,561,003 | ||||||||
Investment income,
net
of related expenses |
220,248 | 190,458 | 674,642 | 681,103 | ||||||||||||
Investment related
losses, net |
(241,307 | ) | (62,113 | ) | (403,646 | ) | (81,977 | ) | ||||||||
Other revenues |
27,764 | 22,089 | 81,962 | 61,637 | ||||||||||||
Total revenues |
1,310,295 | 1,378,341 | 4,313,168 | 4,221,766 | ||||||||||||
Benefits and
expenses: |
||||||||||||||||
Claims and other
policy benefits |
1,062,948 | 1,006,864 | 3,311,287 | 2,890,012 | ||||||||||||
Interest credited |
9,293 | 30,475 | 146,190 | 205,193 | ||||||||||||
Policy acquisition
costs and other
insurance expenses |
124,836 | 139,081 | 330,370 | 500,078 | ||||||||||||
Other operating
expenses |
63,886 | 57,284 | 189,223 | 169,325 | ||||||||||||
Interest expense |
9,935 | 9,860 | 54,609 | 53,545 | ||||||||||||
Collateral finance
facility expense |
6,851 | 13,047 | 21,291 | 38,940 | ||||||||||||
Total benefits and
expenses |
1,277,749 | 1,256,611 | 4,052,970 | 3,857,093 | ||||||||||||
Income from
continuing
operations before
income taxes |
32,546 | 121,730 | 260,198 | 364,673 | ||||||||||||
Provision for income
taxes |
7,296 | 40,932 | 87,553 | 127,901 | ||||||||||||
Income from
continuing
operations |
25,250 | 80,798 | 172,645 | 236,772 | ||||||||||||
Discontinued
operations: |
||||||||||||||||
Loss from
discontinued
accident and health
operations, net of
income taxes |
(22 | ) | (4,277 | ) | (5,210 | ) | (6,524 | ) | ||||||||
Net income |
$ | 25,228 | $ | 76,521 | $ | 167,435 | $ | 230,248 | ||||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Condensed Consolidated Statements of Income
(In thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| (Unaudited) | September 30, | September 30, | ||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
Earnings per share
from
continuing
operations: |
||||||||||||||||
Basic earnings per
share |
$ | 0.41 | $ | 1.30 | $ | 2.77 | $ | 3.83 | ||||||||
Diluted earnings
per share |
$ | 0.40 | $ | 1.26 | $ | 2.70 | $ | 3.69 | ||||||||
Diluted earnings
per share from
operating income |
$ | 1.86 | $ | 1.49 | $ | 4.68 | $ | 4.08 | ||||||||
Earnings per share
from net income: |
||||||||||||||||
Basic earnings per
share |
$ | 0.40 | $ | 1.23 | $ | 2.69 | $ | 3.73 | ||||||||
Diluted earnings
per share |
$ | 0.40 | $ | 1.19 | $ | 2.62 | $ | 3.59 | ||||||||
Weighted average
number of
common and common
equivalent
shares outstanding |
63,607 | 64,212 | 63,940 | 64,218 | ||||||||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
Condensed Consolidated Business Summary
| At or For the | ||||||||
| Nine Months Ended | ||||||||
| (Unaudited) | September 30, | |||||||
| 2008 | 2007 | |||||||
Gross life reinsurance in force (in billions) |
||||||||
U.S. |
$ | 1,265.6 | $ | 1,212.8 | ||||
Canada |
$ | 231.4 | $ | 211.3 | ||||
Europe & South Africa |
$ | 368.9 | $ | 370.9 | ||||
Asia Pacific |
$ | 310.6 | $ | 319.7 | ||||
Gross life reinsurance written (in billions) |
||||||||
U.S. |
$ | 100.7 | $ | 120.9 | ||||
Canada |
$ | 39.1 | $ | 33.7 | ||||
Europe & South Africa |
$ | 59.3 | $ | 42.2 | ||||
Asia Pacific |
$ | 22.7 | $ | 27.7 | ||||
Balance sheet information (in millions,
except share and per share figures) |
||||||||
Consolidated cash and invested assets |
$ | 16,637.2 | $ | 16,312.1 | ||||
Invested asset book yield — trailing
three months excluding funds withheld |
6.01 | % | 6.00 | % | ||||
Investment portfolio mix |
||||||||
Cash and short-term investments |
2.68 | % | 3.71 | % | ||||
Fixed maturity securities |
54.83 | % | 54.76 | % | ||||
Mortgage loans |
4.70 | % | 5.07 | % | ||||
Policy loans |
6.30 | % | 6.24 | % | ||||
Funds withheld at interest |
28.89 | % | 28.53 | % | ||||
Other invested assets |
2.60 | % | 1.69 | % | ||||
Collateral finance facilities |
$ | 850.1 | $ | 850.3 | ||||
Short-term debt |
$ | 95.0 | $ | 30.7 | ||||
Long-term debt |
$ | 923.0 | $ | 896.0 | ||||
Company-obligated mandatorily
redeemable preferred securities
of subsidiary |
$ | 159.0 | $ | 158.8 | ||||
Total stockholders’ equity |
$ | 2,606.9 | $ | 3,040.0 | ||||
Less: Accumulated other comprehensive
income “AOCI”* |
(222.3 | ) | 444.4 | |||||
Total stockholders’ equity, before
impact of AOCI* |
$ | 2,829.2 | $ | 2,595.6 | ||||
Treasury shares |
802,922 | 1,129,184 | ||||||
Common shares outstanding |
62,325,351 | 61,999,089 | ||||||
Book value per share outstanding |
$ | 41.83 | $ | 49.03 | ||||
Book value per share outstanding, before
impact of AOCI* |
$ | 45.39 | $ | 41.86 | ||||
| * | Book value per share outstanding and total stockholders’ equity, before impact of AOCI, are non-GAAP financial measures that management believes are 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. |
-more-
12
Add Twelve
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Selected Invested Asset Data
(Dollars in thousands)
Selected Invested Asset Data
(Dollars in thousands)
The company had total cash and invested assets of $16.6 billion and
$16.8 billion at September 30, 2008 and December 31, 2007,
respectively, as illustrated below:
(Unaudited)
| September 30, | December 31, | |||||||
Fixed maturity securities,
available-for-sale |
$ | 9,121,953 | $ | 9,397,916 | ||||
Mortgage loans on real estate |
782,282 | 831,557 | ||||||
Policy loans |
1,048,517 | 1,059,439 | ||||||
Funds withheld at interest |
4,806,642 | 4,749,496 | ||||||
Short-term investments |
32,520 | 75,062 | ||||||
Other invested assets |
432,982 | 284,220 | ||||||
Cash and cash equivalents |
412,255 | 404,351 | ||||||
Total cash and invested assets |
$ | 16,637,151 | $ | 16,802,041 | ||||
The tables below show the major industry types and weighted average
credit ratings, which comprise the U.S. and foreign corporate fixed
maturity holdings at September 30, 2008 and December 31, 2007:
(Unaudited)
| Average | ||||||||||||||||
| Estimated | Credit | |||||||||||||||
| September 30, 2008 | Amortized Cost | Fair Value | % of Total | Ratings | ||||||||||||
Finance |
$ | 1,433,689 | $ | 1,176,929 | 28.1 | % | A- | |||||||||
Industrial |
1,161,833 | 1,043,016 | 24.9 | % | BBB | |||||||||||
Foreign (1) |
1,185,038 | 1,088,255 | 26.0 | % | A | |||||||||||
Utility |
531,564 | 487,337 | 11.6 | % | BBB | |||||||||||
Other |
437,988 | 394,038 | 9.4 | % | BBB+ | |||||||||||
Total |
$ | 4,750,112 | $ | 4,189,575 | 100.0 | % | A- | |||||||||
| Average | ||||||||||||||||
| Estimated | Credit | |||||||||||||||
| December 31, 2007 | Amortized Cost | Fair Value | % of Total | Ratings | ||||||||||||
Finance |
$ | 1,394,562 | $ | 1,343,539 | 30.8 | % | A | |||||||||
Industrial |
1,069,727 | 1,060,236 | 24.3 | % | BBB+ | |||||||||||
Foreign (1) |
1,040,817 | 1,050,005 | 24.1 | % | A | |||||||||||
Utility |
504,678 | 503,969 | 11.5 | % | BBB | |||||||||||
Other |
413,977 | 405,871 | 9.3 | % | BBB+ | |||||||||||
Total |
$ | 4,423,761 | $ | 4,363,620 | 100.0 | % | A- | |||||||||
| (1) | Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign investments. |
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13
Add Thirteen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Selected Invested Asset Data
(Dollars in thousands)
Selected Invested Asset Data
(Dollars in thousands)
The quality of the company’s available-for-sale fixed maturity
securities portfolio, as measured at fair value and by the percentage
of fixed maturity securities invested in various ratings categories,
relative to the entire available-for-sale fixed maturity security
portfolio, at September 30, 2008 and December 31, 2007 was as
follows:
(Unaudited)
September 30, 2008
| NAIC | Rating Agency | Amortized | Estimated | % of | ||||||||||
| Designation | Designation | Cost | Fair Value | Total | ||||||||||
| 1 | AAA/AA/A |
$ | 7,479,538 | $ | 7,183,940 | 78.8 | % | |||||||
| 2 | BBB |
1,817,281 | 1,632,806 | 17.9 | % | |||||||||
| 3 | BB |
253,665 | 231,706 | 2.5 | % | |||||||||
| 4 | B |
58,868 | 43,503 | 0.5 | % | |||||||||
| 5 | CCC and lower |
31,336 | 27,361 | 0.3 | % | |||||||||
| 6 | In or near default |
2,636 | 2,637 | — | % | |||||||||
Total |
$ | 9,643,324 | $ | 9,121,953 | 100.0 | % | ||||||||
December 31, 2007
| NAIC | Rating Agency | Amortized | Estimated | % of | ||||||||||
| Designation | Designation | Cost | Fair Value | Total | ||||||||||
| 1 | AAA/AA/A |
$ | 7,022,497 | $ | 7,521,177 | 80.0 | % | |||||||
| 2 | BBB |
1,628,431 | 1,617,983 | 17.2 | % | |||||||||
| 3 | BB |
201,868 | 198,487 | 2.1 | % | |||||||||
| 4 | B |
47,013 | 43,680 | 0.5 | % | |||||||||
| 5 | CCC and lower |
16,800 | 16,502 | 0.2 | % | |||||||||
| 6 | In or near default |
83 | 87 | — | % | |||||||||
Total |
$ | 8,916,692 | $ | 9,397,916 | 100.0 | % | ||||||||
The following table presents the total gross unrealized losses for
fixed maturity securities and equity securities as of September 30,
2008 and December 31, 2007 where the estimated fair value had
declined and remained below amortized cost by the indicated amount:
| September 30, 2008 | December 31, 2007 | |||||||||||||||
| Gross | Gross | |||||||||||||||
| Unrealized | % of | Unrealized | % of | |||||||||||||
| (Unaudited) | Losses | Total | Losses | Total | ||||||||||||
Less than 20% |
$ | 472,148 | 49.1 | % | $ | 159,563 | 80.5 | % | ||||||||
20% or more for
less than
six months |
381,221 | 39.7 | % | 35,671 | 18.0 | % | ||||||||||
20% or more for six
months
or greater |
107,273 | 11.2 | % | 2,981 | 1.5 | % | ||||||||||
Total |
$ | 960,642 | 100.0 | % | $ | 198,215 | 100.0 | % | ||||||||
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14
Add Fourteen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Dollars in thousands)
(Unaudited)
U.S. Operations
(Dollars in thousands)
(Unaudited)
| Three Months Ended September 30, 2008 | ||||||||||||||||
| Asset- | Financial | Total | ||||||||||||||
| Traditional | Intensive | Reinsurance | U.S. | |||||||||||||
Revenues: |
||||||||||||||||
Net premiums |
$ | 740,502 | $ | 1,719 | $ | — | $ | 742,221 | ||||||||
Investment income, net
of related expenses |
99,991 | 43,727 | 192 | 143,910 | ||||||||||||
Investment related
losses, net |
(62,065 | ) | (132,280 | ) | (136 | ) | (194,481 | ) | ||||||||
Other revenues |
(42 | ) | 15,051 | 3,644 | 18,653 | |||||||||||
Total revenues |
778,386 | (71,783 | ) | 3,700 | 710,303 | |||||||||||
Benefits and expenses: |
||||||||||||||||
Claims and other
policy benefits |
632,258 | 2,040 | — | 634,298 | ||||||||||||
Interest credited |
15,221 | (6,005 | ) | — | 9,216 | |||||||||||
Policy acquisition costs
and other insurance
expenses |
107,199 | (45,043 | ) | 252 | 62,408 | |||||||||||
Other operating expenses |
12,756 | 2,167 | 747 | 15,670 | ||||||||||||
Total benefits
and expenses |
767,434 | (46,841 | ) | 999 | 721,592 | |||||||||||
Income (loss) before
income taxes |
$ | 10,952 | $ | (24,942 | ) | $ | 2,701 | $ | (11,289 | ) | ||||||
Reconciliation to pre-tax
operating income: |
||||||||||||||||
Capital losses (gains) and
other, net included
in investment related
losses, net |
$ | 62,065 | $ | (10,289 | ) | $ | 136 | $ | 51,912 | |||||||
Embedded Derivatives: |
||||||||||||||||
Included in investment
related losses, net |
— | 142,569 | — | 142,569 | ||||||||||||
Included in interest
credited |
— | (43,871 | ) | — | (43,871 | ) | ||||||||||
Included in policy
acquisition costs and
other insurance
expenses |
— | 8,274 | — | 8,274 | ||||||||||||
DAC offset, net |
— | (63,394 | ) | — | (63,394 | ) | ||||||||||
Pre-tax operating income |
$ | 73,017 | $ | 8,347 | $ | 2,837 | $ | 84,201 | ||||||||
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15
Add Fifteen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Dollars in thousands)
(Unaudited)
U.S. Operations
(Dollars in thousands)
(Unaudited)
| Three Months Ended September 30, 2007 | ||||||||||||||||
| Asset- | Financial | Total | ||||||||||||||
| Traditional | Intensive | Reinsurance | U.S. | |||||||||||||
Revenues: |
||||||||||||||||
Net premiums |
$ | 690,388 | $ | 1,555 | $ | — | $ | 691,943 | ||||||||
Investment income, net
of related expenses |
89,221 | 28,870 | (9 | ) | 118,082 | |||||||||||
Investment related
losses, net |
(5,457 | ) | (58,384 | ) | (2 | ) | (63,843 | ) | ||||||||
Other revenues |
242 | 11,095 | 7,205 | 18,542 | ||||||||||||
Total revenues |
774,394 | (16,864 | ) | 7,194 | 764,724 | |||||||||||
Benefits and expenses: |
||||||||||||||||
Claims and other
policy benefits |
572,871 | 2,280 | — | 575,151 | ||||||||||||
Interest credited |
14,845 | 15,457 | — | 30,302 | ||||||||||||
Policy acquisition costs
and other insurance
expenses |
99,759 | (22,880 | ) | 1,831 | 78,710 | |||||||||||
Other operating expenses |
11,631 | 1,757 | 1,021 | 14,409 | ||||||||||||
Total benefits
and expenses |
699,106 | (3,386 | ) | 2,852 | 698,572 | |||||||||||
Income (loss) before
income taxes |
$ | 75,288 | $ | (13,478 | ) | $ | 4,342 | $ | 66,152 | |||||||
Reconciliation to pre-tax
operating income: |
||||||||||||||||
Capital losses and
other, net included
in investment related
losses, net |
$ | 5,457 | $ | 5,409 | $ | 2 | $ | 10,868 | ||||||||
Embedded Derivatives: |
||||||||||||||||
Included in investment
related losses, net |
— | 52,975 | — | 52,975 | ||||||||||||
DAC offset, net |
— | (40,079 | ) | — | (40,079 | ) | ||||||||||
Pre-tax operating income |
$ | 80,745 | $ | 4,827 | $ | 4,344 | $ | 89,916 | ||||||||
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16
Add Sixteen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Dollars in thousands)
(Unaudited)
U.S. Operations
(Dollars in thousands)
(Unaudited)
| Nine Months Ended September 30, 2008 | ||||||||||||||||
| Asset- | Financial | Total | ||||||||||||||
| Traditional | Intensive | Reinsurance | U.S. | |||||||||||||
Revenues: |
||||||||||||||||
Net premiums |
$ | 2,218,726 | $ | 4,974 | $ | — | $ | 2,223,700 | ||||||||
Investment income, net
of related expenses |
294,884 | 149,678 | 588 | 445,150 | ||||||||||||
Investment related
losses, net |
(65,210 | ) | (290,878 | ) | (139 | ) | (356,227 | ) | ||||||||
Other revenues |
570 | 40,757 | 10,702 | 52,029 | ||||||||||||
Total revenues |
2,448,970 | (95,469 | ) | 11,151 | 2,364,652 | |||||||||||
Benefits and expenses: |
||||||||||||||||
Claims and other
policy benefits |
1,908,418 | 3,090 | — | 1,911,508 | ||||||||||||
Interest credited |
44,935 | 100,958 | — | 145,893 | ||||||||||||
Policy acquisition costs
and other insurance
expenses |
296,480 | (149,707 | ) | 700 | 147,473 | |||||||||||
Other operating expenses |
38,115 | 6,341 | 2,160 | 46,616 | ||||||||||||
Total benefits
and expenses |
2,287,948 | (39,318 | ) | 2,860 | 2,251,490 | |||||||||||
Income (loss) before
income taxes |
$ | 161,022 | $ | (56,151 | ) | $ | 8,291 | $ | 113,162 | |||||||
Reconciliation to pre-tax
operating income: |
||||||||||||||||
Capital losses (gains) and
other, net included
in investment related
losses, net |
$ | 65,210 | $ | (12,606 | ) | $ | 139 | $ | 52,743 | |||||||
Embedded Derivatives: |
||||||||||||||||
Included in investment
related losses, net |
— | 303,484 | — | 303,484 | ||||||||||||
Included in interest
credited |
— | 11,367 | — | 11,367 | ||||||||||||
Included in policy
acquisition costs
and other insurance
expenses |
— | (1,426 | ) | — | (1,426 | ) | ||||||||||
DAC offset, net |
— | (221,512 | ) | — | (221,512 | ) | ||||||||||
Pre-tax operating income |
$ | 226,232 | $ | 23,156 | $ | 8,430 | $ | 257,818 | ||||||||
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17
Add Seventeen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Dollars in thousands)
(Unaudited)
U.S. Operations
(Dollars in thousands)
(Unaudited)
| Nine Months Ended September 30, 2007 | ||||||||||||||||
| Asset- | Financial | Total | ||||||||||||||
| Traditional | Intensive | Reinsurance | U.S. | |||||||||||||
Revenues: |
||||||||||||||||
Net premiums |
$ | 2,078,560 | $ | 4,779 | $ | — | $ | 2,083,339 | ||||||||
Investment income, net
of related expenses |
261,300 | 214,141 | 110 | 475,551 | ||||||||||||
Investment related
losses, net |
(10,292 | ) | (64,599 | ) | (9 | ) | (74,900 | ) | ||||||||
Other revenues |
648 | 28,209 | 18,940 | 47,797 | ||||||||||||
Total revenues |
2,330,216 | 182,530 | 19,041 | 2,531,787 | ||||||||||||
Benefits and expenses: |
||||||||||||||||
Claims and other
policy benefits |
1,710,076 | 6,250 | 1 | 1,716,327 | ||||||||||||
Interest credited |
43,694 | 159,939 | — | 203,633 | ||||||||||||
Policy acquisition costs
and other insurance
expenses |
300,946 | 16,163 | 6,026 | 323,135 | ||||||||||||
Other operating expenses |
35,103 | 5,083 | 2,962 | 43,148 | ||||||||||||
Total benefits
and expenses |
2,089,819 | 187,435 | 8,989 | 2,286,243 | ||||||||||||
Income (loss) before
income taxes |
$ | 240,397 | $ | (4,905 | ) | $ | 10,052 | $ | 245,544 | |||||||
Reconciliation to pre-tax
operating income: |
||||||||||||||||
Capital losses and
other, net included
in investment related
losses, net |
$ | 10,292 | $ | 7,336 | $ | 9 | $ | 17,637 | ||||||||
Embedded Derivatives: |
||||||||||||||||
Included in investment
related losses, net |
— | 57,263 | — | 57,263 | ||||||||||||
DAC offset, net |
— | (43,739 | ) | — | (43,739 | ) | ||||||||||
Pre-tax operating income |
$ | 250,689 | $ | 15,955 | $ | 10,061 | $ | 276,705 | ||||||||
- more -
18
Add Eighteen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Canada Operations
(Dollars in thousands)
Canada Operations
(Dollars in thousands)
| Three Months Ended | |||||||||||
| (Unaudited) | September 30, | ||||||||||
| 2008 | 2007 | ||||||||||
Revenues: |
|||||||||||
Net premiums |
$ | 128,930 | $ | 123,676 | |||||||
Investment income, net of related expenses |
35,836 | 31,057 | |||||||||
Investment related gains (losses), net |
(1,183 | ) | 2,713 | ||||||||
Other revenues |
4,289 | 1 | |||||||||
Total revenues |
167,872 | 157,447 | |||||||||
Benefits and expenses: |
|||||||||||
Claims and other policy benefits |
104,339 | 106,416 | |||||||||
Interest credited |
77 | 170 | |||||||||
Policy acquisition costs and other
insurance expenses |
27,591 | 23,118 | |||||||||
Other operating expenses |
6,132 | 4,945 | |||||||||
Total benefits and expenses |
138,139 | 134,649 | |||||||||
Income before income taxes |
$ | 29,733 | $ | 22,798 | |||||||
Reconciliation to pre-tax operating income: |
|||||||||||
Capital losses (gains) and
other, net included in investment
related gains (losses), net |
$ | 2,246 | $ | (2,480 | ) | ||||||
Pre-tax operating income |
$ | 31,979 | $ | 20,318 | |||||||
| Nine Months Ended | |||||||||||
| (Unaudited) | September 30, | ||||||||||
| 2008 | 2007 | ||||||||||
Revenues: |
|||||||||||
Net premiums |
$ | 407,452 | $ | 345,748 | |||||||
Investment income, net of related expenses |
107,561 | 89,852 | |||||||||
Investment related gains (losses), net |
(1,264 | ) | 7,145 | ||||||||
Other revenues |
17,506 | 180 | |||||||||
Total revenues |
531,255 | 442,925 | |||||||||
Benefits and expenses: |
|||||||||||
Claims and other policy benefits |
353,756 | 303,231 | |||||||||
Interest credited |
297 | 541 | |||||||||
Policy acquisition costs and other
insurance expenses |
79,543 | 62,937 | |||||||||
Other operating expenses |
17,477 | 14,182 | |||||||||
Total benefits and expenses |
451,073 | 380,891 | |||||||||
Income before income taxes |
$ | 80,182 | $ | 62,034 | |||||||
Reconciliation to pre-tax operating income: |
|||||||||||
Capital losses (gains) and
other, net included in investment
related gains (losses), net |
$ | 3,727 | $ | (6,648 | ) | ||||||
Pre-tax operating income |
$ | 83,909 | $ | 55,386 | |||||||
- more -
19
Add Nineteen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe & South Africa
(Dollars in thousands)
Europe & South Africa
(Dollars in thousands)
| Three Months Ended | ||||||||
| (Unaudited) | September 30, | |||||||
| 2008 | 2007 | |||||||
Revenues: |
||||||||
Net premiums |
$ | 176,184 | $ | 170,774 | ||||
Investment income, net of related expenses |
9,065 | 5,569 | ||||||
Investment related losses, net |
(4,703 | ) | (863 | ) | ||||
Other revenues |
33 | (43 | ) | |||||
Total revenues |
180,579 | 175,437 | ||||||
Benefits and expenses: |
||||||||
Claims and other policy benefits |
122,521 | 127,281 | ||||||
Interest credited |
— | 3 | ||||||
Policy acquisition costs and other
insurance expenses |
21,559 | 22,592 | ||||||
Other operating expenses |
15,708 | 13,872 | ||||||
Total benefits and expenses |
159,788 | 163,748 | ||||||
Income before income taxes |
$ | 20,791 | $ | 11,689 | ||||
Reconciliation to pre-tax operating income: |
||||||||
Capital losses and
other, net included in investment
related losses, net |
$ | 4,703 | $ | 863 | ||||
Pre-tax operating income |
$ | 25,494 | $ | 12,552 | ||||
| Nine Months Ended | ||||||||
| (Unaudited) | September 30, | |||||||
| 2008 | 2007 | |||||||
Revenues: |
||||||||
Net premiums |
$ | 550,870 | $ | 503,366 | ||||
Investment income, net of related expenses |
25,394 | 18,446 | ||||||
Investment related losses, net |
(4,089 | ) | (1,717 | ) | ||||
Other revenues |
161 | 61 | ||||||
Total revenues |
572,336 | 520,156 | ||||||
Benefits and expenses: |
||||||||
Claims and other policy benefits |
425,516 | 370,263 | ||||||
Interest credited |
— | 1,019 | ||||||
Policy acquisition costs and other
insurance expenses |
54,815 | 65,781 | ||||||
Other operating expenses |
48,130 | 38,434 | ||||||
Total benefits and expenses |
528,461 | 475,497 | ||||||
Income before income taxes |
$ | 43,875 | $ | 44,659 | ||||
Reconciliation to pre-tax operating income: |
||||||||
Capital losses and other, net included
in investment related losses, net |
$ | 4,089 | $ | 1,717 | ||||
Pre-tax operating income |
$ | 47,964 | $ | 46,376 | ||||
- more -
20
Add Twenty
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Asia Pacific
(Dollars in thousands)
| Three Months Ended | ||||||||
| (Unaudited) | September 30, | |||||||
| 2008 | 2007 | |||||||
Revenues: |
||||||||
Net premiums |
$ | 254,497 | $ | 240,476 | ||||
Investment income, net of related expenses |
12,272 | 9,134 | ||||||
Investment related losses, net |
(3,821 | ) | (367 | ) | ||||
Other revenues |
2,811 | 2,105 | ||||||
Total revenues |
265,759 | 251,348 | ||||||
Benefits and expenses: |
||||||||
Claims and other policy benefits |
201,707 | 197,827 | ||||||
Policy acquisition costs and other
insurance expenses |
25,053 | 22,833 | ||||||
Other operating expenses |
17,774 | 13,448 | ||||||
Total benefits and expenses |
244,534 | 234,108 | ||||||
Income before income taxes |
$ | 21,225 | $ | 17,240 | ||||
Reconciliation to pre-tax operating income: |
||||||||
Capital losses and
other, net included in investment
related losses, net |
$ | 3,821 | $ | 367 | ||||
Pre-tax operating income |
$ | 25,046 | $ | 17,607 | ||||
| Nine Months Ended | ||||||||
| (Unaudited) | September 30, | |||||||
| 2008 | 2007 | |||||||
Revenues: |
||||||||
Net premiums |
$ | 773,148 | $ | 626,285 | ||||
Investment income, net of related expenses |
36,083 | 26,407 | ||||||
Investment related losses, net |
(4,817 | ) | (937 | ) | ||||
Other revenues |
7,214 | 6,515 | ||||||
Total revenues |
811,628 | 658,270 | ||||||
Benefits and expenses: |
||||||||
Claims and other policy benefits |
620,387 | 499,974 | ||||||
Policy acquisition costs and other
insurance expenses |
81,520 | 75,620 | ||||||
Other operating expenses |
48,677 | 39,495 | ||||||
Total benefits and expenses |
750,584 | 615,089 | ||||||
Income before income taxes |
$ | 61,044 | $ | 43,181 | ||||
Reconciliation to pre-tax operating income: |
||||||||
Capital losses and
other, net included in investment
related losses, net |
$ | 4,817 | $ | 937 | ||||
Pre-tax operating income |
$ | 65,861 | $ | 44,118 | ||||
- more -
21
Add Twenty One
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Corporate and Other
(Dollars in thousands)
Corporate and Other
(Dollars in thousands)
| Three Months Ended | ||||||||
| (Unaudited) | September 30, | |||||||
| 2008 | 2007 | |||||||
Revenues: |
||||||||
Net premiums |
$ | 1,758 | $ | 1,038 | ||||
Investment income, net of related expenses |
19,165 | 26,616 | ||||||
Investment related gains (losses), net |
(37,119 | ) | 247 | |||||
Other revenues |
1,978 | 1,484 | ||||||
Total revenues |
(14,218 | ) | 29,385 | |||||
Benefits and expenses: |
||||||||
Claims and other policy benefits |
83 | 189 | ||||||
Policy acquisition costs and other
insurance expenses |
(11,775 | ) | (8,172 | ) | ||||
Other operating expenses |
8,602 | 10,610 | ||||||
Interest expense |
9,935 | 9,860 | ||||||
Collateral finance facility expense |
6,851 | 13,047 | ||||||
Total benefits and expenses |
13,696 | 25,534 | ||||||
Income (loss) before income taxes |
$ | (27,914 | ) | $ | 3,851 | |||
Reconciliation to pre-tax operating income: |
||||||||
Capital losses (gains) and
other, net included in investment
related gains (losses), net |
$ | 37,119 | $ | (247 | ) | |||
Pre-tax operating income |
$ | 9,205 | $ | 3,604 | ||||
| Nine Months Ended | ||||||||
| (Unaudited) | September 30, | |||||||
| 2008 | 2007 | |||||||
Revenues: |
||||||||
Net premiums |
$ | 5,040 | $ | 2,265 | ||||
Investment income, net of related expenses |
60,454 | 70,847 | ||||||
Investment related losses, net |
(37,249 | ) | (11,568 | ) | ||||
Other revenues |
5,052 | 7,084 | ||||||
Total revenues |
33,297 | 68,628 | ||||||
Benefits and expenses: |
||||||||
Claims and other policy benefits |
120 | 217 | ||||||
Policy acquisition costs and other
insurance expenses |
(32,981 | ) | (27,395 | ) | ||||
Other operating expenses |
28,323 | 34,066 | ||||||
Interest expense |
54,609 | 53,545 | ||||||
Collateral finance facility expense |
21,291 | 38,940 | ||||||
Total benefits and expenses |
71,362 | 99,373 | ||||||
Loss before income taxes |
$ | (38,065 | ) | $ | (30,745 | ) | ||
Reconciliation to pre-tax operating income: |
||||||||
Capital losses and
other, net included in investment
related losses, net |
$ | 37,249 | $ | 11,568 | ||||
Pre-tax operating loss |
$ | (816 | ) | $ | (19,177 | ) | ||
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