UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 30, 2012

 

 

REINSURANCE GROUP OF AMERICA, INCORPORATED

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Missouri		1-11848		43-1627032
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification Number)

1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017

(Address of Principal Executive Office)

Registrant’s telephone number, including area code: (636) 736-7000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

---

Item 2.02

Results of Operations and Financial Condition

On April 30, 2012, Reinsurance Group of America, Incorporated (the “Company”) issued (1) a press release announcing its earnings for the three-month period ended March 31, 2012, and providing certain additional information, a copy of which is furnished with this report as Exhibit 99.1, and (2) a Quarterly Financial Supplement for the quarter ended March 31, 2012, a copy of which is attached hereto as Exhibit 99.2. The press release also notes that a conference call will be held on May 1, 2012 to discuss the financial and operating results for the three-month period ended March 31, 2012. The press release and Quarterly Financial Supplement are furnished and are not 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 April 30, 2012
99.2		Quarterly Financial Supplement for the quarter ended March 31, 2012

---

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: April 30, 2012				By:		/s/ Jack B. Lay
						Jack B. Lay
						Senior Executive Vice President and Chief Financial Officer

---

EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release dated April 30, 2012
99.2		Quarterly Financial Supplement for the quarter ended March 31, 2012

Exhibit 99.1

 

PRESS RELEASE

REINSURANCE GROUP OF AMERICA REPORTS FIRST-QUARTER RESULTS

 

•

Earnings per diluted share: net income $1.67, operating income* $1.52

 

•

Net premiums up 7 percent to $1.9 billion

 

•

Trailing 12 months’ operating return on equity* 12 percent

ST. LOUIS, April 30, 2012 – Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported first-quarter net income of $123.3 million, or $1.67 per diluted share, compared to $148.9 million, or $2.02 per diluted share in the prior-year quarter. Operating income* increased five percent to $112.4 million, or $1.52 per diluted share, from $106.9 million, or $1.45 per diluted share, in the year-ago quarter. Amounts for 2011 have been adjusted for the retrospective adoption of new accounting guidance for deferred acquisition costs.

 

		Quarterly Results
($ in thousands, except per share data)		2012				2011
Net premiums		$	1,863,482			$	1,736,130
Net income			123,318				148,920
Net income per diluted share			1.67				2.02
Operating income*			112,377				106,931
Operating income per diluted share*			1.52				1.45
Book value per share			80.44				64.14
Book value per share (excl. Accumulated Other Comprehensive Income “AOCI”)*			58.57				52.20
Total assets			32,286,082				29,079,805

 

*	See ‘Use of Non-GAAP Financial Measures’ below

Consolidated net premiums increased seven percent to $1,863.5 million from $1,736.1 million in the prior-year quarter, including an adverse effect of $4.9 million from changes in foreign currency exchange rates. Investment income decreased eight percent to $340.9 million from $371.0 million in the year-earlier quarter, attributable to a $49.1 million decline in fair value of option contracts, which are included in funds withheld at interest and support the crediting rates for equity-indexed annuities. Excluding the effect of those option contracts, investment income increased six percent. Excluding funds withheld assets, the average book value of invested assets was up approximately $1.6 billion to $18.3 billion, and the average portfolio yield decreased to 5.05 percent from 5.35 percent in the first quarter of 2011, and from 5.19 percent in the fourth quarter of 2011. The investment portfolio yield continues to be adversely affected by the lower interest rate environment. Net foreign currency fluctuations did not materially affect bottom-line results.

The company’s effective tax rate of 32 percent was lower than the first quarter of 2011 due to benefits associated with the tax treatment of certain foreign transactions. Those benefits were offset, in part, by a $1.3 million increase to the total tax provision associated with the expiration of the active financing exception (AFE).

- more -

---

Add One

 

However, if Congress passes the tax extender package, which includes an extension of the AFE, during 2012, the additional tax burden will be reversed.

A. Greig Woodring, president and chief executive officer, commented, “Overall, we are pleased with our first-quarter results. Global claims experience was slightly adverse with strong results in Canada offset by higher-than-expected claims in the U.S. and UK. We are particularly pleased with the results in Canada, as well as our Asia Pacific and Asset Intensive businesses. In addition, overall net premium growth was good and our book value per share, excluding AOCI, is $58.57, including a reduction of $4.28 per share, as of January 1, 2012, associated with the retrospective adoption of new accounting guidance for deferred acquisition costs. Net of that change in reporting, our book value per share, excluding AOCI, was up $1.32.

“Our annualized operating return on equity was 11 percent for the quarter, and operating income per diluted share was up five percent over the first quarter of 2011. RGA’s balance sheet and capitalization remain strong, despite a $318.4 million reduction to equity, as of January 1, 2012, from the accounting changes on certain deferred acquisition costs. We continue to see opportunities arising from various global regulatory and accounting changes and are well positioned to provide solutions to help our clients overcome these challenges. We are looking forward to the remainder of 2012 and achieving continued growth in the value of the RGA franchise.”

SEGMENT RESULTS

U.S.

The U.S. Traditional sub-segment reported pre-tax net income of $49.8 million for the quarter, down from $74.9 million last year, primarily because of investment-related losses in the current period. Pre-tax operating income decreased to $62.9 million from $66.0 million the year before, reflecting somewhat higher-than-expected claims. Individual mortality claims were slightly above expectations this quarter and group disability reinsurance results were in line with expectations. Net premiums rose 9 percent to $1,021.5 million from $935.1 million a year ago, benefiting, in part, from a new in force transaction. The Society of Actuaries (SOA) released its 2011 North American reinsurance market survey this quarter and RGA again ranked first in U.S. recurring new business with a 22.4 percent market share.

The U.S. Asset-Intensive business reported pre-tax income of $36.6 million, down from $66.5 million a year ago, reflecting significant changes in the fair values of various free-standing and embedded derivatives. Pre-tax operating income, which excludes the impact of those derivatives, increased 17 percent to $24.5 million from $20.9 million a year ago. Both periods benefited from relatively strong equity market environments.

The U.S. Financial Reinsurance business added $6.3 million of pre-tax income versus $6.1 million last year, continuing the trend of strong fee income from continuing business. Pre-tax operating earnings were $6.5 million and $6.2 million for the first quarters of 2012 and 2011, respectively.

Canada

Canadian operations reported pre-tax net income of $55.1 million compared with $29.9 million in the first quarter of 2011. Pre-tax operating income increased significantly to $46.7 million from

 

- more -

---

Add Two

 

$25.5 million in the prior-year period, reflecting very favorable mortality experience. A slightly stronger U.S. dollar versus the Canadian dollar adversely affected pre-tax operating income by approximately $0.6 million compared to the prior-year period. Reported net premiums increased slightly to $218.2 million from $215.0 million last year, including an adverse foreign currency effect of $3.3 million. On a Canadian dollar basis, net premiums were up three percent. According to the SOA survey referenced above, RGA retained its leading position in Canada for recurring new business with a market share of 32.6 percent.

Asia Pacific

Asia Pacific reported pre-tax net income of $32.1 million, up 46 percent from $22.0 million in the first quarter of 2011. Pre-tax operating income rose to $26.9 million from $22.3 million. Favorable mortality experience contributed to the stronger results, and disability claims developed at expected levels. Foreign currency fluctuations increased current-period pre-tax operating income by $1.5 million. Net premiums were up 4 percent to $325.4 million from $311.5 million in the prior year, primarily due to favorable foreign currency movements, as original currency premiums rose one percent.

Europe & South Africa

Europe & South Africa reported pre-tax net income of $6.6 million, down from $22.5 million in the year-ago quarter. Pre-tax operating income was $4.6 million compared with $22.2 million last year. Higher-than-expected critical illness claims in the UK were primarily responsible for the lower results in the current quarter. Critical illness reinsurance provides a lump sum benefit in the event of the diagnosis of a pre-defined critical illness. Claims associated with critical illness business can be volatile over short-term periods. Adverse mortality experience in the UK contributed to the weak results to a lesser degree. Foreign currency fluctuations adversely affected pre-tax operating income by $1.4 million. Net premiums totaled $292.8 million, up 9 percent from $269.1 million the year before, including an adverse currency effect of $11.4 million. On a local currency basis, net premiums were up 13 percent.

Corporate and Other

The Corporate and Other segment reported a pre-tax net loss of $5.7 million in the first quarter contrasted with pre-tax net income of $4.8 million in the year-ago period. Investment income was approximately $10.3 million lower in the current quarter compared with last year, due, in part, to the lower interest rate environment. Pre-tax operating losses were $6.8 million in the current period and $0.2 million a year ago.

Dividend Declaration

The board of directors declared a regular quarterly dividend of $0.18, payable June 1 to shareholders of record as of May 11.

Earnings Conference Call

A conference call to discuss first-quarter results will begin at 9 a.m. Eastern Time on Tuesday, May 1. Interested parties may access the call by dialing 877-718-5111 (domestic) or 719-325-4933 (international).

 

- more -

---

Add Three

 

The access code is 7394354. A live audio webcast of the conference call will be available on the company’s investor relations website at www.rgare.com. A replay of the conference call will be available at the same address for 90 days following the conference call. A telephonic replay will also be available through May 9 at 888-203-1112 (domestic) or 719-457-0820 (international), access code 7394354.

The company has posted to its website a Quarterly Financial Supplement that includes financial information for all segments as well as information on its investment portfolio. Additionally, the company posts periodic reports, press releases and other useful information on its investor relations website.

Use of Non-GAAP Financial Measures

RGA uses a non-GAAP financial measure called 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. Reconciliations to GAAP net income are provided in the following tables. Additional financial information can be found in the Quarterly Financial Supplement on RGA’s Investor Relations website at www.rgare.com in the “Quarterly Results” tab and in the “Featured Report” section.

Book value per share outstanding before impact of AOCI is a non-GAAP financial measure that management believes is important in evaluating the balance sheet in order to ignore the effects of unrealized amounts primarily associated with mark-to-market adjustments on investments and foreign currency translation.

Operating return on equity is a non-GAAP financial measure calculated as operating income divided by average shareholders’ equity excluding AOCI.

About RGA

Reinsurance Group of America, Incorporated is among the largest global providers of life reinsurance, with operations in Australia, Barbados, Bermuda, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Singapore, South Africa, South Korea, Spain, Taiwan, the United Arab Emirates, the United Kingdom and the United States. Worldwide, the company has approximately $2.8 trillion of life reinsurance in force, and assets of $32.3 billion.

 

- more -

---

Add Four

 

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 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 capital and credit market conditions and their impact on our liquidity, access to capital, and cost of capital, (2) the impairment of other financial institutions and its effect on our business, (3) requirements to post collateral or make payments due to declines in market value of assets subject to our collateral arrangements, (4) the fact that the determination of allowances and impairments taken on our investments is highly subjective, (5) adverse changes in mortality, morbidity, lapsation, or claims experience, (6) changes in our financial strength and credit ratings and the effect of such changes on our future results of operations and financial condition, (7) inadequate risk analysis and underwriting, (8) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in our current and planned markets, (9) the availability and cost of collateral necessary for regulatory reserves and capital, (10) 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, (11) market or economic conditions that adversely affect our ability to make timely sales of investment securities, (12) risks inherent in our risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (13) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (14) adverse litigation or arbitration results, (15) the adequacy of reserves, resources, and accurate information relating to settlements, awards, and terminated and discontinued lines of business, (16) the stability of and actions by governments and economies in the markets in which we operate, including ongoing uncertainties regarding the amount of United States sovereign debt and the credit ratings thereof, (17) competitive factors and competitors’ responses to our initiatives, (18) the success of our clients, (19) successful execution of our entry into new markets, (20) successful development and introduction of new products and distribution opportunities, (21) our ability to successfully integrate and operate reinsurance business that we acquire, (22) action by regulators who have authority over our reinsurance operations in the jurisdictions in which we operate, (23) our dependence on third parties, including those insurance companies and reinsurers to which we cede some reinsurance, third-party investment managers, and others, (24) the threat of natural disasters, catastrophes, terrorist attacks, epidemics, or pandemics anywhere in the world where we or our clients do business, (25) changes in laws, regulations, and accounting standards applicable to us, our subsidiaries, or our business, (26) the effect of our status as an insurance holding company and regulatory restrictions on our ability to pay principal and interest on our debt obligations, and (27) other risks and uncertainties described in this document and in our other filings with the Securities and Exchange Commission.

 

- more -

---

Add Five

 

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 2011 Form 10-K.

Investor Contact

John W. Hayden

Senior Vice President – Controller and Investor Relations

(636) 736-7000

- tables below -

 

- more -

---

Add Six

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Net Income to Operating Income

(Dollars in thousands)

 

(Unaudited)		Three Months Ended March 31,
		2012				2011
GAAP net income		$	123,318			$	148,920
Reconciliation to operating income:
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net			60,304				191
Capital (gains) losses on funds withheld:
Included in investment income			676				7,827
Included in policy acquisition costs and other insurance expenses			136				(1,251	)
Embedded derivatives:
Included in investment related (gains) losses, net			(89,016	)			(80,073	)
Included in interest credited			25,505				(17,388	)
Included in policy acquisition costs and other insurance expenses			—				1,914
DAC offset, net			(8,546	)			47,168
Gain on repurchase of collateral finance facility securities			—				(3,231	)
Loss on retirement of Preferred Income Equity Redeemable Securities (“PIERS”)			—				2,854
Operating income		$	112,377			$	106,931

Reconciliation of Consolidated Pre-tax Net Income to Pre-tax Operating Income

(Dollars in thousands)

 

(Unaudited)		Three Months Ended March 31,
		2012				2011
Income before income taxes		$	180,763			$	226,755
Reconciliation to pre-tax operating income:
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net			94,098				1,099
Capital (gains) losses on funds withheld:
Included in investment income			1,040				12,041
Included in policy acquisition costs and other insurance expenses			209				(1,925	)
Embedded derivatives:
Included in investment related (gains) losses, net			(136,947	)			(123,189	)
Included in interest credited			39,239				(26,751	)
Included in policy acquisition costs and other insurance expenses			—				2,944
DAC offset, net			(13,148	)			72,567
Gain on repurchase of collateral finance facility securities			—				(4,971	)
Loss on retirement of PIERS			—				4,391
Pre-tax operating income		$	165,254			$	162,961

 

- more -

---

Add Seven

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Pre-tax Net Income to Pre-tax Operating Income

(Dollars in thousands)

 

(Unaudited)
		Three Months Ended March 31, 2012
		Pre-tax net income (loss)				Capital (gains)  losses, derivatives and other, net				Change in value of embedded derivatives, net				Pre-tax operating income (loss)
U.S. Operations:
Traditional		$	49,842			$	13,043			$	41			$	62,926
Asset Intensive			36,590				15,946	(1)			(28,055	)(2)			24,481
Financial Reinsurance			6,313				139				—				6,452
Total U.S.			92,745				29,128				(28,014	)			93,859
Canada Operations			55,063				(8,404	)			—				46,659
Europe & South Africa			6,606				(1,982	)			—				4,624
Asia Pacific Operations			32,067				(5,158	)			—				26,909
Corporate and Other			(5,718	)			(1,079	)			—				(6,797	)
Consolidated		$	180,763			$	12,505			$	(28,014	)		$	165,254

 

(1)	Asset Intensive is net of $(82,842) DAC offset.

(2)	Asset Intensive is net of $69,694 DAC offset.

 

		Three Months Ended March 31, 2011
(Unaudited)														Net (gain)
		Pre-tax net income				Capital (gains)  losses, derivatives and other, net				Change in value of embedded derivatives, net				loss on repurchase and retirement of securities				Pre-tax operating income (loss)
U.S. Operations:
Traditional		$	74,912			$	(8,875	)		$	—			$	—			$	66,037
Asset Intensive			66,537				6,136	(1)			(51,745	)(2)			—				20,928
Financial Reinsurance			6,120				35				—				—				6,155
Total U.S.			147,569				(2,704	)			(51,745	)			—				93,120
Canada Operations			29,912				(4,389	)			—				—				25,523
Europe & South Africa			22,535				(293	)			—				—				22,242
Asia Pacific Operations			21,976				330				—				—				22,306
Corporate and Other			4,763				(4,413	)			—				(580	)			(230	)
Consolidated		$	226,755			$	(11,469	)		$	(51,745	)			(580	)		$	162,961

 

(1)	Asset Intensive is net of $(22,684) DAC offset.

(2)	Asset Intensive is net of $95,251 DAC offset.

 

- more -

---

Add Eight

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Per Share and Shares Data

(In thousands, except per share data)

 

(Unaudited)		Three Months Ended
		March 31,
		2012				2011
Diluted earnings per share from operating income		$	1.52			$	1.45
Earnings per share from net income:
Basic earnings per share		$	1.68			$	2.03
Diluted earnings per share		$	1.67			$	2.02
Weighted average number of common and common equivalent shares outstanding			74,043				73,836
(Unaudited)		At or for the Three Months
		Ended March 31,
		2012				2011
Treasury shares			5,426				5,341
Common shares outstanding			73,712				73,797
Book value per share outstanding		$	80.44			$	64.14
Book value per share outstanding, before impact of AOCI		$	58.57			$	52.20

 

- more -

---

Add Nine

 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollars in thousands)

 

(Unaudited)		Three Months Ended
		March 31,
		2012				2011
Revenues:
Net premiums		$	1,863,482			$	1,736,130
Investment income, net of related expenses			340,940				371,040
Investment related gains (losses), net:
Other-than-temporary impairments on fixed maturity securities			(7,607	)			(1,556	)
Other-than-temporary impairments on fixed maturity securities transferred to (from) accumulated other comprehensive income			(7,221	)			—
Other investment related gains (losses), net			58,348				125,176
Total investment related gains (losses), net			43,520				123,620
Other revenue			45,033				51,645
Total revenues			2,292,975				2,282,435
Benefits and expenses:
Claims and other policy benefits			1,580,149				1,469,449
Interest credited			88,042				106,063
Policy acquisition costs and other insurance expenses			307,634				346,247
Other operating expenses			110,098				106,150
Interest expense			23,322				24,569
Collateral finance facility expense			2,967				3,202
Total benefits and expenses			2,112,212				2,055,680
Income before income taxes			180,763				226,755
Income tax expense			57,445				77,835
Net income		$	123,318			$	148,920

# # #

Exhibit 99.2

 

Financial Supplement

First Quarter 2012

(Unaudited)

---

 

World Headquarters		Internet address						Contacts:
1370 Timberlake Manor Parkway		www.rgare.com						Jack B. Lay
Chesterfield, Missouri 63017								Senior Executive Vice President
U.S.A.								and Chief Financial Officer
								Phone: (636) 736-7000
Current Ratings								e-mail: jlay@rgare.com
		Standard & Poor’s		A.M. Best		Moody’s		John Hayden Sr. Vice President Controller & Investor Relations Phone: (636) 300-8828 e-mail: jhayden@rgare.com
Financial Strength Ratings
RGA Reinsurance Company		AA-		A+		A1
RGA Life Reinsurance Company of Canada		AA-		A+		NR
RGA International Reinsurance Company Limited		AA-		NR		NR
RGA Global Reinsurance Company Limited		AA-		NR		NR
RGA Reinsurance Company of Australia Limited		AA-		NR		NR
Senior Debt Ratings
Reinsurance Group of America, Incorporated		A-		a-		Baa1

Our common stock is traded on the New York Stock Exchange under the symbol “RGA”.

    Quarterly Financial Supplement

---

Reinsurance Group of America, Incorporated

Financial Supplement

1st Quarter 2012

Table of Contents

 

		Page
Non-GAAP Disclosure			1
Consolidated
Financial Highlights			2
Consolidated Income Statement (incl. Operating Income Reconciliation)			3
Consolidated Operating Income Statement			4
Consolidated Balance Sheets			5
Segment Pre-tax Operating Income Summaries and Reconciliations to U.S. GAAP
U.S. Operations			6
Canada Operations			10
Europe & South Africa Operations			11
Asia Pacific Operations			12
Corporate and Other			13
Summary of Pre-tax Segment Operating Income			14
Investments
Cash and Invested Assets, Yield Summary			15
Amortized cost, Gross Unrealized Gains and Losses, Estimated Fair Values of Fixed Maturity and Equity Securities			16
Corporate Securities by Sector (Fixed Maturities and Equities)			17
Quality of Fixed Maturity Securities and Structured Fixed Maturity Securities			18
CMBS Exposure (Including Funds Withheld Portfolios)			19
Gross Unrealized Losses Aging			20
Fixed Maturity and Equity Securities Below Amortized Cost			21
Consolidated Gross Gains and Losses			22

    Quarterly Financial Supplement

---

Reinsurance Group of America, Incorporated

Financial Supplement

This Financial Supplement is for information purposes only and includes unaudited figures. This report should be read in conjunction with documents filed by Reinsurance Group of America, Incorporated with the SEC.

Non-GAAP Disclosures

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 herein.

RGA evaluates its stockholder equity position excluding the impact of Accumulated Other Comprehensive Income (“AOCI”) since the net unrealized gains or losses included in AOCI primarily relate to changes in interest rates, credit spreads on its investment securities and foreign currency fluctuations that are not permanent and can fluctuate significantly from period to period.

Additionally, RGA uses a non-GAAP financial measure called operating return on equity, which is calculated as operating income divided by average shareholder’s equity excluding AOCI.

 

		Quarterly Financial Supplement		Page 1

---

Reinsurance Group of America, Incorporated

Financial Highlights (1)

 

(USD thousands, except inforce & per share data)		Three Months Ended or As of																				Current Qtr
		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Net premiums		$	1,863,482			$	2,034,716			$	1,776,165			$	1,788,676			$	1,736,130			$	127,352
Net income			123,318				138,579				134,602				123,944				148,920				(25,602	)
Operating income			112,377				120,772				138,837				119,056				106,931				5,446
Operating return on equity (ex AOCI) - annualized			10.6	%			11.7	%			13.8	%			12.2	%			11.1	%			-0.5	%
Operating return on equity (ex AOCI) - trailing 12 months			12.0	%			12.2	%			13.2	%			13.0	%			13.2	%			-1.2	%
Total assets			32,286,082				31,633,973				30,736,591				30,212,717				29,079,805				3,206,277
Assumed Life Reinsurance in Force (in billions)
U.S.		$	1,406.1			$	1,348.5			$	1,347.9			$	1,343.2			$	1,343.2			$	62.9
Canada			364.5				344.9				329.5				350.3				339.2				25.3
Europe & South Africa			529.7				513.4				515.0				529.7				497.8				31.9
Asia Pacific			470.7				457.6				422.8				435.6				407.7				63.0
Total Life Reinsurance in Force		$	2,771.0			$	2,664.4			$	2,615.2			$	2,658.8			$	2,587.9			$	183.1
Assumed New Business Production (in billions)
U.S.		$	84.9			$	24.8			$	30.1			$	24.3			$	31.3			$	53.6
Canada			13.1				11.3				14.0				13.4				12.4				0.7
Europe & South Africa			14.8				24.9				38.7				47.6				37.1				(22.3	)
Asia Pacific			5.7				74.0				27.9				9.7				7.4				(1.7	)
Total New Business Production		$	118.5			$	135.0			$	110.7			$	95.0			$	88.2			$	30.3
Per Share and Shares Data
Basic earnings per share
Net income		$	1.68			$	1.89			$	1.82			$	1.68			$	2.03			$	(0.35	)
Operating income		$	1.53			$	1.65			$	1.88			$	1.61			$	1.46			$	0.07
Diluted earnings per share
Net income		$	1.67			$	1.88			$	1.81			$	1.66			$	2.02			$	(0.35	)
Operating income		$	1.52			$	1.64			$	1.87			$	1.60			$	1.45			$	0.07
Wgt. average common shares outstanding (basic)			73,575				73,304				73,856				73,971				73,213				362
Wgt. average common shares outstanding (diluted)			74,043				73,812				74,254				74,530				73,836				207
Common shares issued			79,138				79,138				79,138				79,138				79,138				—
Treasury shares			5,426				5,770				5,871				5,062				5,341				85
Common shares outstanding			73,712				73,368				73,267				74,076				73,797				(85	)
Book value per share		$	80.44			$	79.31			$	73.15			$	67.81			$	64.14
Per share effect of accumulated other comprehensive income (AOCI)		$	21.87			$	22.06			$	17.68			$	14.09			$	11.94
Book value per share, excluding AOCI		$	58.57			$	57.25			$	55.47			$	53.72			$	52.20
Shareholder dividends paid		$	13,255.3			$	13,189.3			$	13,336.6			$	8,870.7			$	8,832.2			$	4,423.1

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

 

		Quarterly Financial Supplement		Page 2

---

Reinsurance Group of America, Incorporated

Consolidated GAAP Income Statement (incl. Operating Income Reconciliations) (1)

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	1,863,482			$	2,034,716			$	1,776,165			$	1,788,676			$	1,736,130			$	127,352
Investment income, net of related expenses			340,940				304,511				268,210				337,436				371,040				(30,100	)
Investment related gains (losses), net
OTTI on fixed maturity securities			(7,607	)			(11,824	)			(11,911	)			(5,582	)			(1,556	)			(6,051	)
OTTI on fixed maturity securities transferred to/from AOCI			(7,221	)			543				3,089				292				—				(7,221	)
Other investment related gains (losses), net			58,348				(36,183	)			(130,778	)			32,678				125,176				(66,828	)
Total investment related gains (losses), net			43,520				(47,464	)			(139,600	)			27,388				123,620				(80,100	)
Other revenue			45,033				56,456				90,132				50,477				51,645				(6,612	)
Total revenues			2,292,975				2,348,219				1,994,907				2,203,977				2,282,435				10,540
Benefits and expenses:
Claims and other policy benefits			1,580,149				1,720,956				1,514,765				1,520,013				1,469,449				110,700
Interest credited			88,042				78,884				35,251				96,196				106,063				(18,021	)
Policy acquisition costs and other insurance expenses			307,634				204,883				164,372				274,519				346,247				(38,613	)
Other operating expenses			110,098				122,000				94,029				97,161				106,150				3,948
Interest expense			23,322				25,226				27,025				25,818				24,569				(1,247	)
Collateral finance facility expense			2,967				3,019				3,069				3,101				3,202				(235	)
Total benefits and expenses			2,112,212				2,154,968				1,838,511				2,016,808				2,055,680				56,532
Income before income taxes			180,763				193,251				156,396				187,169				226,755				(45,992	)
Income tax expense			57,445				54,672				21,794				63,225				77,835				(20,390	)
Net income		$	123,318			$	138,579			$	134,602			$	123,944			$	148,920			$	(25,602	)
Pre-tax Operating Income Reconciliation:
Income before income taxes			180,763				193,251				156,396				187,169				226,755				(45,992	)
Investment and derivative losses (gains) - non-operating (2)			94,098				(5,360	)			(221,194	)			(40,152	)			1,099				92,999
Change in value of modified coinsurance and funds withheld embedded derivatives (2)			9,428				85,722				102,574				(10,525	)			(90,535	)			99,963
GMXB embedded derivatives (2)			(146,375	)			(29,261	)			260,239				25,860				(32,654	)			(113,721	)
Funds withheld losses (gains) - investment income			1,040				(194	)			(9,806	)			(7,185	)			12,041				(11,001	)
Funds withheld losses (gains) - policy acq. costs			209				47				1,034				1,793				(1,925	)			2,134
EIA embedded derivatives - interest credited			39,239				9,490				37,539				21,011				(26,751	)			65,990
EIA embedded derivatives - policy acq. costs			—				6,908				(3,664	)			(2,073	)			2,944				(2,944	)
DAC offset, net			(13,148	)			(82,837	)			(107,709	)			4,158				72,567				(85,715	)
Gain on repurchase of collateral finance facility securities			—				(9,725	)			(50,869	)			—				(4,971	)			4,971
Loss on retirement of Preferred Income Equity Redeemable Securities (“PIERS”)			—				—				—				—				4,391				(4,391	)
Operating Income Before Income Taxes		$	165,254			$	168,041			$	164,540			$	180,056			$	162,961			$	2,293
After-tax Operating Income Reconciliation:
Net Income			123,318				138,579				134,602				123,944				148,920				(25,602	)
Investment and derivative losses (gains) - non-operating (2)			60,304				(4,906	)			(144,834	)			(26,362	)			191				60,113
Change in value of modified coinsurance and funds withheld embedded derivatives (2)			6,128				55,719				66,673				(6,841	)			(58,848	)			64,976
GMXB embedded derivatives (2)			(95,144	)			(19,019	)			169,155				16,809				(21,225	)			(73,919	)
Funds withheld losses (gains) - investment income			676				(126	)			(6,374	)			(4,671	)			7,827				(7,151	)
Funds withheld losses (gains) - policy acq. costs			136				31				672				1,165				(1,251	)			1,387
EIA embedded derivatives - interest credited			25,505				6,169				24,400				13,657				(17,388	)			42,893
EIA embedded derivatives - policy acq. costs			—				4,490				(2,381	)			(1,348	)			1,914				(1,914	)
DAC offset, net			(8,546	)			(53,844	)			(70,011	)			2,703				47,168				(55,714	)
Gain on repurchase of collateral finance facility securities			—				(6,321	)			(33,065	)			—				(3,231	)			3,231
Loss on retirement of PIERS			—				—				—				—				2,854				(2,854	)
Operating Income		$	112,377			$	120,772			$	138,837			$	119,056			$	106,931			$	5,446

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

(2)	Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement

 

		Quarterly Financial Supplement		Page 3

---

Reinsurance Group of America, Incorporated

Consolidated Operating Income Statement (1)

 

		Three Months Ended																				Current Qtr
(USD thousands, except per share data)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	1,863,482			$	2,034,716			$	1,776,165			$	1,788,676			$	1,736,130			$	127,352
Investment income, net of related expenses			341,980				304,317				258,404				330,251				383,081				(41,101	)
Investment related gains (losses), net			671				3,637				2,019				2,571				1,530				(859	)
Other revenue			45,033				46,731				39,263				50,477				46,674				(1,641	)
Total revenues			2,251,166				2,389,401				2,075,851				2,171,975				2,167,415				83,751
Benefits and expenses:
Claims and other policy benefits			1,580,149				1,720,956				1,514,765				1,520,013				1,469,449				110,700
Interest credited			48,803				69,394				(2,288	)			75,185				132,814				(84,011	)
Policy acquisition costs and other insurance expenses			320,573				280,765				274,711				270,641				272,661				47,912
Other operating expenses			110,098				122,000				94,029				97,161				101,759				8,339
Interest expense			23,322				25,226				27,025				25,818				24,569				(1,247	)
Collateral finance facility expense			2,967				3,019				3,069				3,101				3,202				(235	)
Total benefits and expenses			2,085,912				2,221,360				1,911,311				1,991,919				2,004,454				81,458
Operating income before income taxes			165,254				168,041				164,540				180,056				162,961				2,293
Operating income tax expense			52,877				47,269				25,703				61,000				56,030				(3,153	)
Operating income		$	112,377			$	120,772			$	138,837			$	119,056			$	106,931			$	5,446
Wgt. Average Common Shares Outstanding (Diluted)			74,043				73,812				74,254				74,530				73,836				207
Diluted Earnings Per Share - Operating Income		$	1.52			$	1.64			$	1.87			$	1.60			$	1.45			$	0.07
Foreign currency effect (2):
Net premiums		$	(4,924	)		$	(5,509	)		$	53,399			$	77,277			$	42,487			$	(47,411	)
Operating income before income taxes		$	(387	)		$	(2,407	)		$	6,846			$	5,713			$	4,634			$	(5,021	)

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

(2)	Compared to comparable prior year period

 

		Quarterly Financial Supplement		Page 4

---

Reinsurance Group of America, Incorporated

Consolidated Balance Sheets (1)

 

(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011
Assets
Fixed maturity securities, available-for-sale		$	16,794,057			$	16,200,950			$	15,557,032			$	15,153,807			$	14,531,154
Mortgage loans on real estate			1,040,733				991,731				934,694				908,048				906,869
Policy loans			1,260,070				1,260,400				1,228,890				1,229,663				1,222,016
Funds withheld at interest			5,472,532				5,410,424				5,445,886				5,671,844				5,595,146
Short-term investments			75,425				88,566				81,747				125,618				74,902
Other invested assets			867,507				1,012,541				1,020,043				799,341				756,377
Total investments			25,510,324				24,964,612				24,268,292				23,888,321				23,086,464
Cash and cash equivalents			873,933				962,870				802,651				710,973				467,672
Accrued investment income			173,629				144,334				190,298				160,436				155,182
Premiums receivable and other reinsurance balances			1,131,334				1,059,572				1,060,631				1,045,131				986,658
Reinsurance ceded receivables			597,508				626,194				727,290				781,006				807,929
Deferred policy acquisition costs			3,629,424				3,543,925				3,340,394				3,287,126				3,248,861
Other assets			369,930				332,466				347,035				339,724				327,039
Total assets		$	32,286,082			$	31,633,973			$	30,736,591			$	30,212,717			$	29,079,805
Liabilities and Stockholders’ Equity
Future policy benefits			10,413,361			$	9,903,886			$	9,445,222			$	9,642,814			$	9,438,432
Interest-sensitive contract liabilities			8,252,995				8,394,468				8,378,159				8,100,608				7,747,203
Other policy claims and benefits			2,984,681				2,841,373				2,826,297				2,774,031				2,728,122
Other reinsurance balances			132,389				118,219				136,298				159,340				184,958
Deferred income taxes			1,728,765				1,679,834				1,518,990				1,276,153				1,274,754
Other liabilities			777,678				810,775				776,239				784,291				701,799
Short-term debt			—				—				199,997				199,993				255,989
Long-term debt			1,414,829				1,414,688				1,414,546				1,414,406				1,016,510
Collateral finance facility			652,029				652,032				681,004				837,789				839,354
Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated debentures of the Company			—				—				—				—				159,455
Total liabilities			26,356,727				25,815,275				25,376,752				25,189,425				24,346,576
Stockholders’ Equity:
Common stock, at par value			791				791				791				791				791
Additional paid-in-capital			1,736,184				1,727,774				1,719,683				1,713,893				1,708,096
Retained earnings			2,906,310				2,818,429				2,695,680				2,575,240				2,467,044
Treasury stock			(325,732	)			(346,449	)			(352,106	)			(310,856	)			(323,689	)
Accumulated other comprehensive income (AOCI):
Accumulated currency translation adjustment, net of income taxes			253,875				229,795				189,347				291,189				279,702
Unrealized appreciation of securities, net of income taxes			1,388,597				1,419,318				1,119,724				767,023				615,631
Pension and postretirement benefits, net of income taxes			(30,670	)			(30,960	)			(13,280	)			(13,988	)			(14,346	)
Total stockholders’ equity			5,929,355				5,818,698				5,359,839				5,023,292				4,733,229
Total liabilities and stockholders’ equity		$	32,286,082			$	31,633,973			$	30,736,591			$	30,212,717			$	29,079,805
Total stockholders’ equity, excluding AOCI		$	4,317,553			$	4,200,545			$	4,064,048			$	3,979,068			$	3,852,242

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

 

		Quarterly Financial Supplement		Page 5

---

Reinsurance Group of America, Incorporated

U.S. Traditional Sub-segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	1,021,507			$	1,099,409			$	971,190			$	973,837			$	935,053			$	86,454
Investment income, net of related expenses			132,417				125,528				123,686				125,688				120,748				11,669
Other revenue			1,003				1,571				599				738				493				510
Total revenues			1,154,927				1,226,508				1,095,475				1,100,263				1,056,294				98,633
Benefits and expenses:
Claims and other policy benefits			907,461				952,609				844,090				839,173				822,407				85,054
Interest credited			15,054				15,174				15,166				14,967				14,584				470
Policy acquisition costs and other insurance expenses			145,485				152,246				135,747				135,602				131,916				13,569
Other operating expenses			24,001				23,971				20,299				19,486				21,350				2,651
Total benefits and expenses			1,092,001				1,144,000				1,015,302				1,009,228				990,257				101,744
Operating income before income taxes			62,926				82,508				80,173				91,035				66,037				(3,111	)
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			62,926				82,508				80,173				91,035				66,037				(3,111	)
Investment and derivative (losses) gains - non-operating			(13,084	)			30,075				5,056				205				8,875				(21,959	)
Income before income taxes		$	49,842			$	112,583			$	85,229			$	91,240			$	74,912			$	(25,070	)
Loss and Expense Ratios:
Claims and other policy benefits			88.8	%			86.6	%			86.9	%			86.2	%			88.0	%			0.8	%
Policy acquisition costs and other insurance expenses			14.2	%			13.8	%			14.0	%			13.9	%			14.1	%			0.1	%
Other operating expenses			2.3	%			2.2	%			2.1	%			2.0	%			2.3	%			0.0	%

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

 

		Quarterly Financial Supplement		Page 6

---

Reinsurance Group of America, Incorporated

U.S. Asset Intensive Sub-segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr
(USD thousands except account values)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	3,596			$	3,619			$	2,786			$	3,459			$	3,325			$	271
Investment income, net of related expenses			111,501				79,604				20,361				98,080				159,533				(48,032	)
Investment related gains (losses), net			(30	)			(82	)			(14	)			(20	)			(16	)			(14	)
Other revenue			19,893				20,154				19,827				23,536				24,001				(4,108	)
Total revenues			134,960				103,295				42,960				125,055				186,843				(51,883	)
Benefits and expenses:
Claims and other policy benefits			1,902				2,766				4,431				4,264				2,816				(914	)
Interest credited			33,511				53,965				(17,733	)			59,603				118,230				(84,719	)
Policy acquisition costs and other insurance expenses			72,004				16,858				52,854				39,047				42,715				29,289
Other operating expenses			3,062				2,434				1,886				1,743				2,154				908
Total benefits and expenses			110,479				76,023				41,438				104,657				165,915				(55,436	)
Operating income (loss) before income taxes			24,481				27,272				1,522				20,398				20,928				3,553
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			24,481				27,272				1,522				20,398				20,928				3,553
Investment and derivative (losses) gains - non-operating (2)			(96,355	)			(23,077	)			219,530				28,681				(18,704	)			(77,651	)
Change in value of modified coinsurance and funds withheld embedded derivatives (2)			(9,387	)			(86,759	)			(103,949	)			10,525				90,535				(99,922	)
GMXB embedded derivatives (2)			146,375				29,261				(260,239	)			(25,860	)			32,654				113,721
Funds withheld losses (gains) - investment income			(2,224	)			194				9,806				7,185				(12,041	)			9,817
Funds withheld losses (gains) - policy acq. costs			(209	)			(47	)			(1,034	)			(1,793	)			1,925				(2,134	)
EIA embedded derivatives - interest credited			(39,239	)			(9,490	)			(37,539	)			(21,011	)			26,751				(65,990	)
EIA embedded derivatives - policy acq. costs			—				(6,908	)			3,664				2,073				(2,944	)			2,944
DAC offset, net			13,148				82,837				107,709				(4,158	)			(72,567	)			85,715
Income (loss) before income taxes		$	36,590			$	13,283			$	(60,530	)		$	16,040			$	66,537			$	(29,947	)

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

(2)	Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement

 

		Quarterly Financial Supplement		Page 7

---

Reinsurance Group of America, Incorporated

U.S. Asset Intensive Sub-segment

(Cont’d)

 

		Three Months Ended
(USD millions)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011
Annuity account values:
Fixed annuities (deferred)		$	897			$	879			$	856			$	835			$	804
Net interest spread (fixed annuities):			2.4	%			2.8	%			2.7	%			2.2	%			2.7	%
Equity-indexed annuities		$	4,895			$	4,881			$	4,327			$	4,324			$	4,258
Variable annuities:
No riders		$	1,040			$	986			$	979			$	1,114			$	1,172
GMDB only			82				85				76				89				91
GMIB only			6				6				5				6				6
GMAB only			57				55				54				63				64
GMWB only			1,704				1,538				1,524				1,751				1,773
GMDB / WB			460				498				428				493				500
Other			32				31				30				35				36
Total VA account values		$	3,381			$	3,199			$	3,096			$	3,551			$	3,642
Fair value of liabilities associated with living benefit riders		$	130			$	277			$	306			$	46			$	20
Interest-sensitive contract liabilities associated with:
Guaranteed investment contracts		$	198			$	198			$	199			$	199			$	199
Bank-owned life insurance (BOLI)		$	512			$	508			$	505			$	502			$	498
Other asset-intensive business		$	78			$	78			$	79			$	85			$	87

 

		Quarterly Financial Supplement		Page 8

---

Reinsurance Group of America, Incorporated

U.S. Financial Reinsurance Sub-segment Pre-tax Operating Income

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Investment income, net of related expenses		$	164			$	131			$	168			$	62			$	(197	)		$	361
Other revenue			8,910				9,558				8,619				9,194				9,002				(92	)
Total revenues			9,074				9,689				8,787				9,256				8,805				269
Benefits and expenses:
Policy acquisition costs and other insurance expenses			770				743				798				797				853				(83	)
Other operating expenses			1,852				2,025				1,584				1,469				1,797				55
Total benefits and expenses			2,622				2,768				2,382				2,266				2,650				(28	)
Operating income before income taxes			6,452				6,921				6,405				6,990				6,155				297
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			6,452				6,921				6,405				6,990				6,155				297
Investment and derivative (losses) gains - non-operating			(139	)			(87	)			(13	)			7				(35	)			(104	)
Income before income taxes		$	6,313			$	6,834			$	6,392			$	6,997			$	6,120			$	193

 

		Quarterly Financial Supplement		Page 9

---

Reinsurance Group of America, Incorporated

Canadian Segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	218,210			$	224,763			$	185,790			$	209,717			$	215,028			$	3,182
Investment income, net of related expenses			47,716				42,604				53,698				46,083				45,919				1,797
Investment related gains (losses), net			1,323				1,579				1,267				1,183				1,169				154
Other revenue			(30	)			(9	)			440				4,980				22				(52	)
Total revenues			267,219				268,937				241,195				261,963				262,138				5,081
Benefits and expenses:
Claims and other policy benefits			160,625				165,456				162,734				165,860				179,055				(18,430	)
Interest credited			—				—				—				—				—				—
Policy acquisition costs and other insurance expenses			50,285				52,140				34,350				45,356				48,866				1,419
Other operating expenses			9,650				10,645				9,129				8,793				8,694				956
Total benefits and expenses			220,560				228,241				206,213				220,009				236,615				(16,055	)
Operating income before income taxes			46,659				40,696				34,982				41,954				25,523				21,136
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			46,659				40,696				34,982				41,954				25,523				21,136
Investment and derivative (losses) gains - non-operating			7,220				6,545				8,729				2,135				4,389				2,831
Funds withheld losses (gains) - investment income			1,184				—				—				—				—				1,184
Income before income taxes		$	55,063			$	47,241			$	43,711			$	44,089			$	29,912			$	25,151
Loss and Expense Ratios:
Loss ratios (creditor business)			34.1	%			36.3	%			38.4	%			39.7	%			37.7	%			-3.6	%
Loss ratios (excluding creditor business)			83.8	%			85.5	%			96.9	%			88.8	%			97.6	%			-13.8	%
Claims and other policy benefits / (net premiums + investment income)			60.4	%			61.9	%			68.0	%			64.8	%			68.6	%			-8.2	%
Policy acquisition costs and other insurance expenses (creditor business)			57.1	%			59.2	%			52.8	%			57.3	%			55.3	%			1.8	%
Policy acquisition costs and other insurance expenses (excluding creditor business)			14.2	%			10.9	%			10.9	%			12.2	%			11.3	%			2.9	%
Other operating expenses			4.4	%			4.7	%			4.9	%			4.2	%			4.0	%			0.4	%
Foreign currency effect (2):
Net premiums		$	(3,328	)		$	(2,669	)		$	10,269			$	12,409			$	11,248			$	(14,576	)
Operating income before income taxes		$	(554	)		$	(641	)		$	2,571			$	3,021			$	453			$	(1,007	)
Creditor reinsurance net premiums		$	44,810			$	54,227			$	29,895			$	41,613			$	51,584			$	(6,774	)

Note: The loss ratios on creditor reinsurance business are normally lower than traditional reinsurance, while allowances are normally higher as a percentage of premiums.

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

(2)	Compared to comparable prior year period

 

		Quarterly Financial Supplement		Page 10

---

Reinsurance Group of America, Incorporated

Europe & South Africa Segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	292,771			$	356,284			$	286,054			$	283,019			$	269,120			$	23,651
Investment income, net of related expenses			11,331				11,709				11,242				10,865				10,535				796
Other revenue			2,253				1,035				1,196				1,745				1,055				1,198
Total revenues			306,355				369,028				298,492				295,629				280,710				25,645
Benefits and expenses:
Claims and other policy benefits			261,484				293,126				248,890				242,973				216,932				44,552
Policy acquisition costs and other insurance expenses			15,052				13,329				15,004				14,360				16,524				(1,472	)
Other operating expenses			25,195				29,511				24,569				26,527				25,012				183
Total benefits and expenses			301,731				335,966				288,463				283,860				258,468				43,263
Operating income before income taxes			4,624				33,062				10,029				11,769				22,242				(17,618	)
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			4,624				33,062				10,029				11,769				22,242				(17,618	)
Investment and derivative (losses) gains - non-operating			1,982				2,951				2,000				756				293				1,689
Income before income taxes		$	6,606			$	36,013			$	12,029			$	12,525			$	22,535			$	(15,929	)
Loss and Expense Ratios:
Claims and other policy benefits			89.3	%			82.3	%			87.0	%			85.9	%			80.6	%			8.7	%
Policy acquisition costs and other insurance expenses			5.1	%			3.7	%			5.2	%			5.1	%			6.1	%			-1.0	%
Other operating expenses			8.6	%			8.3	%			8.6	%			9.4	%			9.3	%			-0.7	%
Foreign currency effect (2):
Net premiums		$	(11,362	)		$	(9,136	)		$	9,234			$	24,686			$	6,466			$	(17,828	)
Operating income before income taxes		$	(1,417	)		$	(1,605	)		$	669			$	1,712			$	233			$	(1,650	)
Critical illness net premiums		$	61,548			$	61,564			$	59,679			$	63,320			$	60,261			$	1,287

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

(2)	Compared to comparable prior year period

 

		Quarterly Financial Supplement		Page 11

---

Reinsurance Group of America, Incorporated

Asia Pacific Segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	325,350			$	348,358			$	328,259			$	316,356			$	311,517			$	13,833
Investment income, net of related expenses			22,578				21,666				21,472				21,756				19,943				2,635
Investment related gains (losses), net			(809	)			1,237				1,452				1,377				(108	)			(701	)
Other revenue			7,408				9,741				8,557				7,283				8,492				(1,084	)
Total revenues			354,527				381,002				359,740				346,772				339,844				14,683
Benefits and expenses:
Claims and other policy benefits			248,620				306,802				254,739				267,362				247,930				690
Interest Credited			238				254				280				615				—				238
Policy acquisition costs and other insurance expenses			50,847				58,713				49,854				48,082				44,481				6,366
Other operating expenses			27,913				30,254				27,598				26,089				25,127				2,786
Total benefits and expenses			327,618				396,023				332,471				342,148				317,538				10,080
Operating income (loss) before income taxes			26,909				(15,021	)			27,269				4,624				22,306				4,603
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			26,909				(15,021	)			27,269				4,624				22,306				4,603
Investment and derivative (losses) gains - non-operating			5,158				5,309				(1,625	)			(298	)			(330	)			5,488
Income (loss) before income taxes		$	32,067			$	(9,712	)		$	25,644			$	4,326			$	21,976			$	10,091
Loss and Expense Ratios:
Claims and other policy benefits			76.4	%			88.1	%			77.6	%			84.5	%			79.6	%			-3.2	%
Policy acquisition costs and other insurance expenses			15.6	%			16.9	%			15.2	%			15.2	%			14.3	%			1.3	%
Other operating expenses			8.6	%			8.7	%			8.4	%			8.2	%			8.1	%			0.5	%
Foreign currency effect (2):
Net premiums		$	9,756			$	6,296			$	33,908			$	40,222			$	24,825			$	(15,069	)
Operating income before income taxes		$	1,529			$	325			$	3,379			$	557			$	1,555			$	(26	)
Critical illness net premiums		$	40,333			$	40,566			$	30,135			$	41,003			$	45,622			$	(5,289	)

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

(2)	Compared to comparable prior year period

 

		Quarterly Financial Supplement		Page 12

---

Reinsurance Group of America, Incorporated

Corporate and Other Segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
Revenues:
Net premiums		$	2,048			$	2,283			$	2,086			$	2,288			$	2,087			$	(39	)
Investment income, net of related expenses			16,273				23,075				27,777				27,717				26,600				(10,327	)
Investment related gains (losses), net			187				903				(686	)			31				485				(298	)
Other revenue			5,596				4,681				25				3,001				3,609				1,987
Total revenues			24,104				30,942				29,202				33,037				32,781				(8,677	)
Benefits and expenses:
Claims and other policy benefits			57				197				(119	)			381				309				(252	)
Interest credited			—				1				(1	)			—				—				—
Policy acquisition costs and other insurance expenses			(13,870	)			(13,264	)			(13,896	)			(12,603	)			(12,694	)			(1,176	)
Other operating expenses			18,425				23,160				8,964				13,054				17,625				800
Interest expense			23,322				25,226				27,025				25,818				24,569				(1,247	)
Collateral finance facility expense			2,967				3,019				3,069				3,101				3,202				(235	)
Total benefits and expenses			30,901				38,339				25,042				29,751				33,011				(2,110	)
Operating income (loss) before income taxes			(6,797	)			(7,397	)			4,160				3,286				(230	)			(6,567	)
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			(6,797	)			(7,397	)			4,160				3,286				(230	)			(6,567	)
Investment and derivative (losses) gains - non-operating			1,079				(15,319	)			(11,108	)			8,666				4,413				(3,334	)
Gain on repurchase of collateral finance facility securities			—				9,725				50,869				—				4,971				(4,971	)
Loss on retirement of PIERS			—				—				—				—				(4,391	)			4,391
Income (loss) before income taxes		$	(5,718	)		$	(12,991	)		$	43,921			$	11,952			$	4,763			$	(10,481	)
Foreign currency effect (2):
Net premiums		$	10			$	—			$	(12	)		$	(40	)		$	(52	)		$	62
Operating income before income taxes		$	55			$	(486	)		$	227			$	423			$	2,393			$	(2,338	)

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

(2)	Compared to comparable prior year period

 

		Quarterly Financial Supplement		Page 13

---

Reinsurance Group of America, Incorporated

Summary of Pre-tax Segment Operating Income (1)

 

		Three Months Ended																				Current Qtr
(USD thousands)		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011				vs. PY Quarter
U.S. Traditional		$	62,926			$	82,508			$	80,173			$	91,035			$	66,037			$	(3,111	)
U.S. Asset Intensive			24,481				27,272				1,522				20,398				20,928				3,553
U.S. Financial Reinsurance			6,452				6,921				6,405				6,990				6,155				297
Total U.S. Segment			93,859				116,701				88,100				118,423				93,120				739
Canadian Segment			46,659				40,696				34,982				41,954				25,523				21,136
Europe & South Africa Segment			4,624				33,062				10,029				11,769				22,242				(17,618	)
Asia Pacific Segment			26,909				(15,021	)			27,269				4,624				22,306				4,603
Corporate and Other			(6,797	)			(7,397	)			4,160				3,286				(230	)			(6,567	)
Consolidated		$	165,254			$	168,041			$	164,540			$	180,056			$	162,961			$	2,293

 

(1)	Certain amounts in the prior periods have been revised in connection with the retrospective adoption of ASU 2010-26 in the first quarter of 2012.

 

		Quarterly Financial Supplement		Page 14

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

 

Cash and Invested Assets
		March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2012				2011				2011				2011				2011
Fixed maturity securities, available-for-sale		$	16,794,057			$	16,200,950			$	15,557,032			$	15,153,807			$	14,531,154
Mortgage loans on real estate			1,040,733				991,731				934,694				908,048				906,869
Policy loans			1,260,070				1,260,400				1,228,890				1,229,663				1,222,016
Funds withheld at interest			5,472,532				5,410,424				5,445,886				5,671,844				5,595,146
Short-term investments			75,425				88,566				81,747				125,618				74,902
Other invested assets			867,507				1,012,541				1,020,043				799,341				756,377
Cash and cash equivalents			873,933				962,870				802,651				710,973				467,672
Total cash and invested assets		$	26,384,257			$	25,927,482			$	25,070,943			$	24,599,294			$	23,554,136

Investment Income and Yield Summary

(Excludes Funds Withheld Portfolios)

 

		Three Months Ended																				Current Qtr
		March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,				vs. PY
		2012				2011				2011				2011				2011				Quarter
Average invested assets at amortized cost		$	18,347,561			$	17,765,960			$	17,683,301			$	17,446,168			$	16,762,725			$	1,584,836
Net investment income		$	227,370			$	226,077			$	229,373			$	228,728			$	219,908			$	7,463
Annualized investment yield (ratio of net investment income to average invested assets)			5.05	%			5.19	%			5.29	%			5.35	%			5.35	%			-0.30	%

 

		Quarterly Financial Supplement		Page 15

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Amortized cost, gross unrealized gains and losses, and estimated fair values of fixed maturity and equity securities

(Excludes Funds Withheld Portfolios)

 

March 31, 2012
		Amortized Cost				Unrealized Gains				Unrealized Losses				Estimated Fair Value				% of Total				Other-than- temporary Impairment in  AOCI
Available-for-sale:
Corporate securities		$	7,518,983			$	671,100			$	78,629			$	8,111,454				48.3	%		$	—
Canadian and Canadian provincial governments			2,610,735				1,229,402				797				3,839,340				22.9	%			—
Residential mortgage-backed securities			1,075,073				72,598				9,443				1,138,228				6.8	%			(710	)
Asset-backed securities			448,688				11,390				45,551				414,527				2.5	%			(4,512	)
Commercial mortgage-backed securities			1,302,734				104,586				64,899				1,342,421				8.0	%			(6,118	)
U.S. government and agencies			257,928				22,500				1,335				279,093				1.6	%			—
State and political subdivisions			191,113				27,873				4,982				214,004				1.3	%			—
Other foreign government, supranational, and foreign government-sponsored enterprises			1,409,605				49,908				4,523				1,454,990				8.6	%			—
Total fixed maturity securities		$	14,814,859			$	2,189,357			$	210,159			$	16,794,057				100.0	%		$	(11,340	)
Non-redeemable preferred stock			77,766				4,963				2,706				80,023				81.6	%
Other equity securities			16,046				3,446				1,487				18,005				18.4	%
Total equity securities		$	93,812			$	8,409			$	4,193			$	98,028				100.0	%
December 31, 2011
		Amortized Cost				Unrealized Gains				Unrealized Losses				Estimated Fair Value				% of Total				Other-than- temporary Impairment in AOCI
Available-for-sale:
Corporate securities		$	6,931,958			$	654,519			$	125,371			$	7,461,106				46.0	%		$	—
Canadian and Canadian provincial governments			2,507,802				1,362,160				29				3,869,933				23.9	%			—
Residential mortgage-backed securities			1,167,265				76,393				16,424				1,227,234				7.6	%			(1,042	)
Asset-backed securities			443,974				11,692				53,675				401,991				2.5	%			(5,256	)
Commercial mortgage-backed securities			1,233,958				87,750				79,489				1,242,219				7.7	%			(12,225	)
U.S. government and agencies			341,087				32,976				61				374,002				2.3	%			—
State and political subdivisions			184,308				24,419				3,341				205,386				1.3	%			—
Other foreign government, supranational, and foreign government-sponsored enterprises			1,372,528				50,127				3,576				1,419,079				8.7	%			—
Total fixed maturity securities		$	14,182,880			$	2,300,036			$	281,966			$	16,200,950				100.0	%		$	(18,523	)
Non-redeemable preferred stock			82,488				4,677				8,982				78,183				68.6	%
Other equity securities			35,352				1,903				1,538				35,717				31.4	%
Total equity securities		$	117,840			$	6,580			$	10,520			$	113,900				100.0	%

 

		Quarterly Financial Supplement		Page 16

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Corporate Securities by Sector (Fixed Maturities and Equities)

(Excludes Funds Withheld Portfolios)

 

		March 31, 2012																December 31, 2011
		Amortized Cost				Estimated Fair Value				% of Total				Average Credit Ratings				Amortized Cost				Estimated Fair Value				% of Total				Average Credit Ratings
Financial Institutions
Banking		$	1,569,223			$	1,611,640				19.6	%		A				$	1,477,638			$	1,454,124				19.2	%		A
Brokerage			72,828				78,900				1.0	%		A					59,288				63,101				0.8	%		A
Finance Comp.			147,647				153,363				1.9	%		A					158,271				161,992				2.1	%		A
Insurance			407,193				440,113				5.4	%		A-					391,092				413,339				5.5	%		A-
REITs			338,809				358,749				4.4	%		BBB+					300,401				316,192				4.2	%		BBB+
Other Finance			125,466				129,576				1.6	%		A-					130,984				135,812				1.8	%		A-
Total Financial Institutions			2,661,166				2,772,341				33.9	%							2,517,674				2,544,560				33.6	%
Industrials
Basic			425,014				461,980				5.6	%		BBB					367,323				402,225				5.3	%		BBB+
Capital Goods			400,181				434,770				5.3	%		BBB+					360,309				396,150				5.2	%		BBB+
Communications			722,080				797,566				9.7	%		BBB+					674,182				745,064				9.8	%		BBB+
Consumer Cyclical			519,532				559,491				6.8	%		BBB+					407,873				438,034				5.8	%		BBB+
Consumer Noncyclical			719,513				805,573				9.8	%		A-					691,245				784,819				10.4	%		A-
Energy			400,261				441,750				5.4	%		BBB+					405,317				454,727				6.0	%		BBB+
Technology			283,306				304,977				3.7	%		BBB+					245,954				269,301				3.6	%		BBB+
Transportation			235,940				252,700				3.1	%		BBB+					219,605				234,822				3.1	%		BBB+
Other Industrial			57,025				61,918				0.7	%		BBB					41,266				46,053				0.6	%		BBB
Total Industrials			3,762,852				4,120,725				50.1	%							3,413,074				3,771,195				49.8	%
Utilities
Electric			691,933				763,844				9.3	%		BBB+					673,725				756,033				10.0	%		BBB+
Natural Gas			435,266				483,337				5.9	%		BBB					398,648				447,617				5.9	%		BBB
Other Utility			52,759				60,112				0.7	%		A-					43,377				51,921				0.7	%		A-
Total Utilities			1,179,958				1,307,293				15.9	%							1,115,750				1,255,571				16.6	%
Other Sectors			8,819				9,123				0.1	%		AA-					3,300				3,680				0.0	%		AA-
Total		$	7,612,795			$	8,209,482				100.0	%		A-				$	7,049,798			$	7,575,006				100.0	%		BBB+

 

		Quarterly Financial Supplement		Page 17

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Ratings of Fixed Maturity Securities

(Excludes Funds Withheld Portfolios)

 

				March 31, 2012												December 31, 2011												September 30, 2011												June 30, 2011												March 31, 2011
NAIC Designation		Rating Agency Designation		Amortized Cost				Estimated Fair Value				% of Total				Amortized Cost				Estimated Fair Value				% of Total				Amortized Cost				Estimated Fair Value				% of Total				Amortized Cost				Estimated Fair Value				% of Total				Amortized Cost				Estimated Fair Value				% of Total
1		AAA		$	2,090,606			$	2,196,118				13.1	%		$	2,205,406			$	2,304,991				14.2	%		$	2,375,876			$	2,459,503				15.8	%		$	3,261,242			$	3,360,370				22.2	%		$	3,397,610			$	3,470,262				23.9	%
1		AA			4,727,343				5,764,579				34.3	%			4,675,653				5,815,846				35.9	%			4,351,791				5,254,456				33.8	%			3,593,909				4,103,688				27.0	%			3,369,423				3,765,275				25.9	%
1		A			3,646,110				4,263,802				25.4	%			3,206,553				3,822,796				23.6	%			3,231,583				3,736,883				24.0	%			3,250,321				3,587,885				23.7	%			3,206,317				3,480,683				24.0	%
2		BBB			3,539,967				3,814,367				22.7	%			3,283,937				3,522,411				21.8	%			3,187,296				3,402,993				21.9	%			3,129,518				3,330,600				22.0	%			2,863,853				3,041,200				20.9	%
3		BB			428,543				430,002				2.6	%			446,610				436,001				2.7	%			444,042				423,559				2.7	%			464,363				466,393				3.1	%			492,097				497,056				3.4	%
4		B			240,603				220,924				1.3	%			244,645				210,222				1.3	%			229,658				196,617				1.3	%			248,242				229,591				1.5	%			218,541				203,594				1.4	%
5		CCC and lower			106,637				80,660				0.5	%			95,128				71,410				0.4	%			78,310				60,014				0.4	%			65,181				49,540				0.3	%			67,395				50,231				0.3	%
6		In or near default			35,050				23,605				0.1	%			24,948				17,273				0.1	%			28,343				23,007				0.1	%			28,571				25,740				0.2	%			21,747				22,853				0.2	%
		Total		$	14,814,859			$	16,794,057				100.0	%		$	14,182,880			$	16,200,950				100.0	%		$	13,926,899			$	15,557,032				100.0	%		$	14,041,347			$	15,153,807				100.0	%		$	13,636,983			$	14,531,154				100.0	%

Structured Fixed Maturity Securities

 

		March 31, 2012								December 31, 2011								September 30, 2011								June 30, 2011								March 31, 2011
		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
Residential mortgage-backed securities:
Agency		$	523,206			$	576,045			$	561,156			$	619,010			$	596,072			$	660,833			$	637,806			$	674,599			$	662,505			$	690,577
Non-agency			551,867				562,183				606,109				608,224				642,791				646,941				682,952				691,185				712,661				725,551
Total residential mortgage-backed securities			1,075,073				1,138,228				1,167,265				1,227,234				1,238,863				1,307,774				1,320,758				1,365,784				1,375,166				1,416,128
Commercial mortgage-backed securities			1,302,734				1,342,421				1,233,958				1,242,219				1,330,302				1,326,994				1,333,832				1,359,105				1,344,194				1,365,715
Asset-backed securities			448,688				414,527				443,974				401,991				412,468				372,957				415,637				376,920				420,028				377,573
Total		$	2,826,495			$	2,895,176			$	2,845,197			$	2,871,444			$	2,981,633			$	3,007,725			$	3,070,227			$	3,101,809			$	3,139,388			$	3,159,416

 

		Quarterly Financial Supplement		Page 18

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

CMBS Exposure

(Includes Funds Withheld Portfolios)

 

		March 31, 2012
		AAA								AA								A
Underwriting Year		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
2006 & Prior		$	350,725			$	382,818			$	189,200			$	208,138			$	128,348			$	131,331
2007			176,584				191,124				13,319				15,423				116,968				125,339
2008			8,911				8,991				42,040				49,885				23,730				27,675
2009			1,651				1,737				17,063				18,748				7,132				9,930
2010			27,953				29,530				49,342				52,710				19,408				20,391
2011			21,148				21,196				16,064				17,643				7,532				7,892
2012			—				—				—				—				—				—
Total		$	586,972			$	635,396			$	327,028			$	362,547			$	303,118			$	322,558
		BBB								Below Investment Grade								Total
Underwriting Year		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
2006 & Prior		$	69,742			$	67,364			$	113,153			$	91,196			$	851,168			$	880,847
2007			102,847				112,334				114,238				82,700				523,956				526,920
2008			—				—				23,002				17,674				97,683				104,225
2009			—				—				—				—				25,846				30,415
2010			—				—				—				—				96,703				102,631
2011			—				—				—				—				44,744				46,731
2012			—				—				—				—				—				—
Total		$	172,589			$	179,698			$	250,393			$	191,570			$	1,640,100			$	1,691,769

NOTE: Totals include directly held investments with amortized cost of $1,302.7 million and fair value of $1,342.4 million as well as investments in funds withheld with amortized cost of $337.4 million and fair value of $349.3 million.

 

		December 31, 2011
		AAA								AA								A
Underwriting Year		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
2005 & Prior		$	92,275			$	98,213			$	130,890			$	143,609			$	32,504			$	31,187
2006			260,765				277,959				52,883				59,727				52,805				55,074
2007			201,228				214,510				23,565				18,700				116,898				122,945
2008			8,975				9,053				48,818				59,536				17,012				19,237
2009			1,664				1,709				12,367				13,684				7,060				9,515
2010			27,946				28,872				49,323				53,480				19,434				20,727
2011			20,047				20,002				11,146				12,079				7,563				7,594
Total		$	612,900			$	650,318			$	328,992			$	360,815			$	253,276			$	266,279
		BBB								Below Investment Grade								Total
Underwriting Year		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
2005 & Prior		$	24,750			$	24,295			$	52,475			$	40,753			$	332,894			$	338,057
2006			27,995				26,563				53,205				43,559				447,653				462,882
2007			102,604				108,047				113,946				77,718				558,241				541,920
2008			—				—				24,916				17,554				99,721				105,380
2009			—				—				—				—				21,091				24,908
2010			—				—				—				—				96,703				103,079
2011			—				—				—				—				38,756				39,675
Total		$	155,349			$	158,905			$	244,542			$	179,584			$	1,595,059			$	1,615,901

NOTE: Totals include directly held investments with amortized cost of $1,234.0 million and fair value of $1,242.2 million as well as investments in funds withheld with amortized cost of $361.1 million and fair value of $373.7 million.

 

		Quarterly Financial Supplement		Page 19

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Gross Unrealized Losses Aging

Fixed Maturity Securities

 

		March 31, 2012								December 31, 2011								September 30, 2011								June 30, 2011								March 31, 2011
		Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total
Less than 20%		$	88,526				41.3	%		$	126,250				43.1	%		$	139,671				46.1	%		$	120,770				51.7	%		$	142,936				53.4	%
20% or more for less than six months			9,803				4.6	%			46,386				15.9	%			49,034				16.2	%			7,742				3.3	%			7,229				2.7	%
20% or more for six months or greater			111,830				52.2	%			109,330				37.4	%			105,170				34.7	%			102,017				43.6	%			110,349				41.2	%
Total		$	210,159				98.1	%		$	281,966				96.4	%		$	293,875				97.0	%		$	230,529				98.6	%		$	260,514				97.3	%
Equity Securities
		March 31, 2012								December 31, 2011								September 30, 2011								June 30, 2011								March 31, 2011
		Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total				Gross Unrealized Losses				% of Total
Less than 20%		$	3,511				1.6	%		$	4,905				1.7	%		$	4,774				1.6	%		$	3,019				1.3	%		$	5,196				1.9	%
20% or more for less than six months			183				0.1	%			5,117				1.7	%			4,142				1.4	%			223				0.1	%			691				0.3	%
20% or more for six months or greater			499				0.2	%			498				0.2	%			49				0.0	%			48				0.0	%			1,304				0.5	%
Total		$	4,193				1.9	%		$	10,520				3.6	%		$	8,965				3.0	%		$	3,290				1.4	%		$	7,191				2.7	%

 

		Quarterly Financial Supplement		Page 20

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Fixed Maturities and Equity Securities Below Amortized Cost

(Excludes Funds Withheld Portfolios)

 

		As of March 31, 2012
		Less than 12 months								Equal to or greater than 12 months								Total
		Estimated Fair Value				Gross Unrealized Losses				Estimated Fair Value				Gross Unrealized Losses				Estimated Fair Value				Gross Unrealized Losses
Investment grade securities:
Corporate securities		$	862,016			$	21,354			$	257,018			$	39,896			$	1,119,034			$	61,250
Canadian and Canadian provincial governments			28,422				797				—				—				28,422				797
Residential mortgage-backed securities			73,291				1,148				49,221				6,875				122,512				8,023
Asset-backed securities			90,691				2,241				96,052				24,491				186,743				26,732
Commercial mortgage-backed securities			92,710				1,432				52,313				13,549				145,023				14,981
U.S. government and agencies			87,486				1,335				—				—				87,486				1,335
State and political subdivisions			27,839				3,462				12,020				1,520				39,859				4,982
Other foreign government, supranational, and foreign government-sponsored enterprises			221,491				2,401				17,336				2,122				238,827				4,523
Investment grade securities		$	1,483,946			$	34,170			$	483,960			$	88,453			$	1,967,906			$	122,623
Non-investment grade securities:
Corporate securities			147,646				9,931				47,308				7,448				194,954				17,379
Residential mortgage-backed securities			3,851				167				14,434				1,253				18,285				1,420
Asset-backed securities			11				30				25,023				18,789				25,034				18,819
Commercial mortgage-backed securities			32,637				1,201				61,562				48,717				94,199				49,918
State and political subdivisions			—				—				—				—				—				—
Other foreign government, supranational, and foreign government-sponsored enterprises			—				—				—				—				—				—
Non-investment grade securities		$	184,145			$	11,329			$	148,327			$	76,207			$	332,472			$	87,536
Total fixed maturity securities		$	1,668,091			$	45,499			$	632,287			$	164,660			$	2,300,378			$	210,159
Non-redeemable preferred stock			7,603				484				19,099				2,222				26,702				2,706
Other equity securities			20				183				5,537				1,304				5,557				1,487
Total Equity securities		$	7,623			$	667			$	24,636			$	3,526			$	32,259			$	4,193
Total number of securities in an unrealized loss position																			851
		As of December 31, 2011
		Less than 12 months								Equal to or greater than 12 months								Total
		Estimated Fair Value				Gross Unrealized Losses				Estimated Fair Value				Gross Unrealized Losses				Estimated Fair Value				Gross Unrealized Losses
Investment grade securities:
Corporate securities		$	790,758			$	40,180			$	286,244			$	63,117			$	1,077,002			$	103,297
Canadian and Canadian provincial governments			3,094				29				—				—				3,094				29
Residential mortgage-backed securities			128,622				3,549				58,388				10,382				187,010				13,931
Asset-backed securities			101,263				3,592				93,910				29,036				195,173				32,628
Commercial mortgage-backed securities			109,455				3,538				58,979				22,001				168,434				25,539
U.S. government and agencies			1,764				61				—				—				1,764				61
State and political subdivisions			21,045				1,845				12,273				1,268				33,318				3,113
Other foreign government, supranational, and foreign government-sponsored enterprises			148,416				1,085				16,588				2,491				165,004				3,576
Investment grade securities			1,304,417				53,879				526,382				128,295				1,830,799				182,174
Non-investment grade securities:
Corporate securities			212,795				10,852				47,310				11,222				260,105				22,074
Residential mortgage-backed securities			23,199				712				10,459				1,781				33,658				2,493
Asset-backed securities			2,363				940				21,275				20,107				23,638				21,047
Commercial mortgage-backed securities			34,918				7,220				62,357				46,730				97,275				53,950
State and political subdivisions			4,000				228				—				—				4,000				228
Non-investment grade securities			277,275				19,952				141,401				79,840				418,676				99,792
Total fixed maturity securities		$	1,581,692			$	73,831			$	667,783			$	208,135			$	2,249,475			$	281,966
Non-redeemable preferred stock			19,516				4,478				15,694				4,504				35,210				8,982
Other equity securities			1,662				602				5,905				936				7,567				1,538
Total Equity securities		$	21,178			$	5,080			$	21,599			$	5,440			$	42,777			$	10,520
Total number of securities in an unrealized loss position																			940

 

		Quarterly Financial Supplement		Page 21

---

Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Consolidated Investment Related Gains and Losses

 

		Three Months Ended																				Current Qtr vs. PY Quarter
		March 31, 2012				Dec. 31, 2011				Sept. 30, 2011				June 30, 2011				March 31, 2011
Fixed Maturity and Equity Securities:
Other-than-temporary impairment losses on fixed maturities		$	(7,607	)		$	(11,824	)		$	(11,911	)		$	(5,582	)		$	(1,556	)		$	(6,051	)
Portion of loss recognized in accumulated other comprehensive income (before taxes)			(7,221	)			543				3,089				292				—				(7,221	)
Net other-than-temporary impairment losses on fixed maturities recognized in earnings			(14,828	)			(11,281	)			(8,822	)			(5,290	)			(1,556	)			(13,272	)
Impairment losses on equity securities			(839	)			(436	)			—				(3,680	)			—				(839	)
Gain on investment activity			22,312				39,622				34,840				28,207				29,376				(7,064	)
Loss on investment activity			(7,504	)			(6,247	)			(7,182	)			(6,653	)			(6,914	)			(590	)
Net gain/(loss) on fixed maturity and equity securities			(859	)			21,658				18,836				12,584				20,906				(21,765	)
Other impairment losses and change in mortgage loan provision			(5,843	)			(5,258	)			(2,370	)			(3,186	)			576				(6,419	)
Other non-derivative gain/(loss), net			6,641				7,318				5,698				4,645				4,696				1,945
Free-standing Derivatives:
Credit Default Swaps			11,813				8,075				(10,018	)			988				892				10,921
Interest Rate Swaps - non-hedged			(47,352	)			20,818				142,907				25,343				(10,730	)			(36,622	)
Interest Rate Swaps - hedged			(26	)			28				258				205				126				(152	)
Futures			(17,408	)			(22,866	)			36,217				(2,873	)			(11,423	)			(5,985	)
CPI Swaps			(802	)			726				(219	)			503				811				(1,613	)
Equity options			(37,983	)			(22,063	)			30,530				3,919				(4,568	)			(33,415	)
Currency Forwards			(1,608	)			561				1,374				595				(855	)			(753	)
Total free-standing derivatives			(93,366	)			(14,721	)			201,049				28,680				(25,747	)			(67,619	)
Embedded Derivatives:
Modified coinsurance and funds withheld treaties			(9,428	)			(85,722	)			(102,574	)			10,525				90,535				(99,963	)
GMXB			146,375				29,261				(260,239	)			(25,860	)			32,654				113,721
Total embedded derivatives			136,947				(56,461	)			(362,813	)			(15,335	)			123,189				13,758
Net gain/(loss) on total derivatives			43,581				(71,182	)			(161,764	)			13,345				97,442				(53,861	)
Total investment related gains / (losses), net		$	43,520			$	(47,464	)		$	(139,600	)		$	27,388			$	123,620			$	(80,100	)

 

		Quarterly Financial Supplement		Page 22