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): October 17, 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))

 

 

 

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Item 2.02

Results of Operations and Financial Condition

On October 17, 2012, Reinsurance Group of America, Incorporated (the “Company”) issued (1) a press release announcing its earnings for the three-month period ended September 30, 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 September 30, 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 October 18, 2012 to discuss the financial and operating results for the three-month period ended September 30, 2012.

 

Item 9.01

Financial Statements and Exhibits

 

(d)

Exhibits.

 

Exhibit No.		Exhibit
99.1		Press Release of Reinsurance Group of America, Incorporated dated October 17, 2012
99.2		Quarterly Financial Supplement for the quarter ended September 30, 2012

The information contained in this Current Report on Form 8-K (this “Current Report”), including the accompanying Exhibit 99.1 and Exhibit 99.2, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this Current Report, including the accompanying Exhibit 99.1 and Exhibit 99.2, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

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 17, 2012				By:		/s/ Jack B. Lay
						Jack B. Lay
						Senior Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release dated October 17, 2012
99.2		Quarterly Financial Supplement for the quarter ended September 30, 2012

Exhibit 99.1

 

PRESS RELEASE

REINSURANCE GROUP OF AMERICA REPORTS THIRD-QUARTER RESULTS

 

•

Higher-than-expected U.S. and Australia claims significantly reduced income levels

•

Earnings per diluted share: net income $1.95, operating income* $1.35

•

Net premiums up eight percent to $1.9 billion

•

Year-to-date operating return on equity* 10 percent

ST. LOUIS, October 17, 2012 – Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported third-quarter net income of $144.5 million, or $1.95 per diluted share, compared to $134.6 million, or $1.81 per diluted share in the prior-year quarter. Operating income* of $99.9 million, or $1.35 per diluted share, decreased from last year’s $138.8 million, or $1.87 per diluted share, primarily due to higher-than-expected claims in the U.S. and Australia markets as well as a claims liability increase in Australia. Certain amounts for 2011 have been adjusted for the retrospective adoption of new accounting guidance for deferred acquisition costs.

 

		Quarterly Results								Year-to-Date Results
($ in thousands, except per share data)		2012				2011				2012				2011
Net premiums		$	1,912,746			$	1,776,165			$	5,726,889			$	5,300,971
Net income			144,475				134,602				408,904				407,466
Net income per diluted share			1.95				1.81				5.52				5.49
Operating income*			99,902				138,837				334,552				364,824
Operating income per diluted share*			1.35				1.87				4.52				4.92
Book value per share			91.18				73.15
Book value per share (excl. Accumulated Other Comprehensive Income “AOCI”)*			62.05				55.47
Total assets			39,924,013				30,736,591

 

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

Consolidated net premiums increased eight percent to $1,912.7 million from $1,776.2 million in the prior-year quarter, including an adverse effect of $26.0 million from changes in foreign currency exchange rates in the current period. Investment income increased significantly to $396.8 million from $268.2 million in the year-earlier quarter, primarily attributable to a $96.2 million increase in fair value of option contracts, which are included in funds withheld at interest and support the crediting rates for equity-indexed annuities. Additionally, investment income associated with a large fixed deferred annuity coinsurance agreement, which became effective April 1, 2012, contributed to the increase.

 

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Excluding the effect of spread-based investment income and changes in value of associated derivatives, investment income increased slightly compared with the third quarter of 2011, with declining new money yields mostly offsetting a growing invested asset base. The average book value of non-spread-based invested assets was up approximately $1.3 billion to $17.0 billion, and the average portfolio yield decreased to 4.98 percent from 5.29 percent in the third quarter of 2011. In addition to the impact from the lower interest rate environment, the current-quarter average yield was adversely affected by a higher average amount of short-term investments in the third quarter, partly due to the timing of investing the proceeds from the $400 million subordinated debt offering in August. The portfolio yield averaged about 5.05 percent over the first two quarters of 2012. Net foreign currency fluctuations adversely affected operating income by $2.7 million after taxes, or $0.04 per diluted share.

A. Greig Woodring, president and chief executive officer, commented, “Our operating earnings were depressed this quarter, primarily as a result of high claims in the U.S. and Australia, including a large claim liability increase for our Australian group business. The combined after-tax adverse effect of these items, relative to expectations, was about $0.66 per diluted share. Aside from these businesses, our other operations generally performed as expected or better during the third quarter.

“In Australia, adverse individual mortality and disability claims contributed to a poor quarter. We continue to monitor that business closely. Additionally, we have performed a detailed review of our Australian group reinsurance business and, as a result of the emerging experience, strengthened Australia’s group business claim liabilities by $27.9 million. Those group contracts typically have a duration of three years.

“In the U.S., both the individual mortality and group reinsurance businesses were adversely affected this quarter by higher-than-expected claims. A thorough analysis of the individual mortality experience revealed claims frequency was more prominent than severity this quarter. We expect the volatility in recent quarters to level out over longer horizons. Our U.S. group reinsurance business also experienced higher-than-expected claims in its disability, medical / managed care and life coverages. That business has mostly performed in line with expectations on a year-to-date basis with the exception of the medical / managed care line, which is prone to large claim volatility.

“Consolidated premium growth was solid, rising eight percent on a reported basis and over nine percent in original currencies. Consolidated operating income totaled $99.9 million, or $1.35 per diluted share. Our operating effective tax rate was lower than anticipated this quarter, primarily due to tax-related adjustments for claims experience on certain treaties and other refinements of tax accruals. Book value per share increased to $91.18, including AOCI, and totaled $62.05, excluding AOCI. Our net unrealized capital gains are now $1.9 billion, up 20 percent since June 30, 2012. A relatively stronger equity market helped our asset-intensive operations this quarter as well.

“Annualized operating return on equity was nine percent for the quarter and 10 percent year-to-date. Both of those return levels are lower than our expected rate of return. Historically, our returns have been fairly stable, and we face some degree of headwinds from the current investment environment. Our balance sheet remains strong as does our level of deployable capital. We continue to evaluate a significant number of block and other reinsurance opportunities across the globe.”

 

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SEGMENT RESULTS

U.S.

The U.S. Traditional sub-segment pre-tax net income decreased to $70.6 million from $85.2 million in last year’s third quarter. Pre-tax operating income totaled $72.5 million, a 10 percent decrease from $80.2 million the year before. Current-quarter results included higher-than-expected claims in both individual mortality and group reinsurance operations. Individual mortality claims experience was approximately $14.2 million, pre-tax, adverse, and group reinsurance results were approximately $12.0 million, pre-tax, below expected levels. The adverse results in group reinsurance included disability, medical/managed care and life coverages. Net premiums rose eight percent, to $1,045.8 million from $971.2 million a year ago, benefiting in part from a 2012 in force transaction.

The U.S. Asset-Intensive business reported pre-tax income of $78.0 million this quarter versus a pre-tax loss of $60.5 million last year, which reflected unfavorable changes in the fair values of various free-standing and embedded derivatives. Pre-tax operating income, which excludes the impact of those derivatives, increased to $27.1 million from $1.5 million last year. The current-period result benefited from favorable equity market performance and the addition of a large block of fixed deferred annuities, effective April 1, 2012.

The U.S. Financial Reinsurance business added pre-tax operating income of $8.3 million this quarter, up about 30 percent from $6.4 million last year. This business continues to contribute strong fee income to the bottom line.

Canada

Canadian operations reported pre-tax net income of $37.5 million compared with $43.7 million in the third quarter of 2011. Pre-tax operating income was $28.1 million this quarter, compared with $35.0 million in the prior-year period. Claims experience was in line with expectations this quarter and was better than expected in the third quarter of 2011. Reported net premiums were up 23 percent to $227.9 million from $185.8 million last year, including an adverse foreign currency effect of $3.4 million. On a Canadian dollar basis, net premiums increased 25 percent.

Asia Pacific

Asia Pacific reported a $16.5 million pre-tax loss this quarter compared with a pre-tax gain of $25.6 million in last year’s third quarter. Pre-tax operating losses totaled $20.7 million compared with pre-tax operating income of $27.3 million last year. Current-period results reflect adverse individual and group claims experience in Australia as well as a $27.9 million increase in claim liabilities for Australia’s group reinsurance operations. That increase was recorded to address emerging adverse claims experience. Net premiums were up slightly to $330.4 million from $328.3 million in the prior year. Foreign currency fluctuations adversely affected premiums and pre-tax operating income by approximately $5.4 million and $1.3 million, respectively, this period. Original currency premiums rose two percent over the third quarter of 2011.

 

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Europe & South Africa

Europe & South Africa reported pre-tax net income of $32.2 million, up from $12.0 million in the year-ago quarter. Pre-tax operating income was $25.1 million, more than doubling the $10.0 million result a year ago. Nearly all markets in this segment outperformed expectations, including the largest operation in the U.K., which reported favorable mortality and morbidity experience. Foreign currency fluctuations adversely affected pre-tax operating income by approximately $3.0 million. Net premiums totaled $303.1 million, up six percent from $286.1 million the year before, including an adverse currency effect of $17.2 million. On a local currency basis, net premiums increased 12 percent.

Corporate and Other

The Corporate and Other segment reported a pre-tax net loss of $8.4 million in the third quarter, contrasted with pre-tax net income of $43.9 million in the year-ago period. Pre-tax operating losses were $5.9 million in the current period compared with pre-tax operating income of $4.2 million last year. Interest expense for the quarter includes the impact of the $400 million, 6.2 percent, subordinated debt offering in August. The prior-year period pre-tax net income included a $50.9 million gain associated with the repurchase of collateral finance facility securities.

Dividend Declaration

The board of directors declared a regular quarterly dividend of $0.24, payable November 30 to shareholders of record as of November 9.

Earnings Conference Call

The Company’s conference call, previously scheduled for October 23, will be held tomorrow, October 18, at 9 a.m. Eastern Time. Interested parties may access the call by dialing 877-857-6144 (domestic) or 719-325-4819 (international). The access code is 7423266. 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 October 26 at 888-203-1112 (domestic) or 719-457-0820 (international), access code 7423266.

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

 

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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 $2.9 trillion of life reinsurance in force, and assets of $39.9 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 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,

 

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(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.

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 Annual Report on Form 10-K for the year ended December 31, 2011.

Investor Contact

John W. Hayden

Senior Vice President – Controller and Investor Relations

(636) 736-7000

 

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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Net Income to Operating Income

(Dollars in thousands)

 

(Unaudited)		Three Months Ended September 30,								Nine Months Ended September 30,
		2012				2011				2012				2011
GAAP net income		$	144,475			$	134,602			$	408,904			$	407,466
Reconciliation to operating income:
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net			(11,972	)			(144,834	)			(18,617	)			(171,005	)
Capital (gains) losses on funds withheld:
Included in investment income			(4,160	)			(6,374	)			(6,944	)			(3,218	)
Included in policy acquisition costs and other insurance expenses			79				672				314				586
Embedded derivatives:
Included in investment related (gains) losses, net			(37,320	)			235,828				(74,737	)			165,723
Included in interest credited			(108	)			24,400				24,302				20,669
Included in policy acquisition costs and other insurance expenses			—				(2,381	)			—				(1,815	)
DAC offset, net			8,908				(70,011	)			1,330				(20,140	)
Gain on repurchase of collateral finance facility securities			—				(33,065	)			—				(36,296	)
Loss on retirement of Preferred Income Equity Redeemable Securities (“PIERS”)			—				—				—				2,854
Operating income		$	99,902			$	138,837			$	334,552			$	364,824

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

(Dollars in thousands)

 

(Unaudited)		Three Months Ended September 30,								Nine Months Ended September 30,
		2012				2011				2012				2011
Income before income taxes		$	201,479			$	156,396			$	598,134			$	570,320
Reconciliation to pre-tax operating income:
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net			(16,940	)			(221,194	)			(25,026	)			(260,247	)
Capital (gains) losses on funds withheld:
Included in investment income			(6,400	)			(9,806	)			(10,683	)			(4,950	)
Included in policy acquisition costs and other insurance expenses			122				1,034				483				902
Embedded derivatives:
Included in investment related (gains) losses, net			(57,415	)			362,813				(114,980	)			254,959
Included in interest credited			(167	)			37,539				37,387				31,799
Included in policy acquisition costs and other insurance expenses			—				(3,664	)			—				(2,793	)
DAC offset, net			13,705				(107,709	)			2,047				(30,984	)
Gain on repurchase of collateral finance facility securities			—				(50,869	)			—				(55,840	)
Loss on retirement of PIERS			—				—				—				4,391
Pre-tax operating income		$	134,384			$	164,540			$	487,362			$	507,557

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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

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

(Dollars in thousands)

 

		Three Months Ended September 30, 2012
(Unaudited)
		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		$	70,556			$	2,506			$	(579	)		$	72,483
Asset Intensive			77,986				(32,792	) (1)			(18,075	) (2)			27,119
Financial Reinsurance			8,136				146				—				8,282
Total U.S.			156,678				(30,140	)			(18,654	)			107,884
Canada Operations			37,520				(9,378	)			—				28,142
Europe & South Africa			32,166				(7,111	)			—				25,055
Asia Pacific Operations			(16,483	)			(4,265	)			—				(20,748	)
Corporate and Other			(8,402	)			2,453				—				(5,949	)
Consolidated		$	201,479			$	(48,441	)		$	(18,654	)		$	134,384

 

(1)	Asset Intensive is net of $(25,223) DAC offset.

(2)	Asset Intensive is net of $38,928 DAC offset.

 

		Three Months Ended September 30, 2011
(Unaudited)
		Pre-tax net income (loss)				Capital (gains) losses, derivatives and other, net				Change in value of embedded derivatives, net				Net (gain) loss on repurchase and retirement of securities				Pre-tax operating income
U.S. Operations:
Traditional		$	85,229			$	(3,681	)		$	(1,375	)			—			$	80,173
Asset Intensive			(60,530	)			(25,501	) (1)			87,553	(2)			—				1,522
Financial Reinsurance			6,392				13				—				—				6,405
Total U.S.			31,091				(29,169	)			86,178				—				88,100
Canada Operations			43,711				(8,729	)			—				—				34,982
Europe & South Africa			12,029				(2,000	)			—				—				10,029
Asia Pacific Operations			25,644				1,625				—				—				27,269
Corporate and Other			43,921				11,108				—				(50,869	)			4,160
Consolidated		$	156,396			$	(27,165	)		$	86,178			$	(50,869	)		$	164,540

 

(1)	Asset Intensive is net of $202,801 DAC offset.

(2)	Asset Intensive is net of $(310,510) DAC offset.

 

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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

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

(Dollars in thousands)

 

		Nine Months Ended September 30, 2012
(Unaudited)
		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		$	216,734			$	14,900			$	(678	)		$	230,956
Asset Intensive			149,178				(65,622	) (1)			(15,313	) (2)			68,243
Financial Reinsurance			24,097				253				—				24,350
Total U.S.			390,009				(50,469	)			(15,991	)			323,549
Canada Operations			127,613				(22,305	)			—				105,308
Europe & South Africa			58,363				(10,249	)			—				48,114
Asia Pacific Operations			39,443				(10,555	)			—				28,888
Corporate and Other			(17,294	)			(1,203	)			—				(18,497	)
Consolidated		$	598,134			$	(94,781	)		$	(15,991	)		$	487,362

 

(1)	Asset Intensive is net of $(59,555) DAC offset.

(2)	Asset Intensive is net of $61,602 DAC offset.

 

		Nine Months Ended September 30, 2011
(Unaudited)
		Pre-tax net income				Capital (gains) losses, derivatives and other, net				Change in value of embedded derivatives, net				Net (gain) loss on repurchase and retirement of securities				Pre-tax operating income
U.S. Operations:
Traditional		$	251,381			$	(12,761	)		$	(1,375	)		$	—			$	237,245
Asset Intensive			22,047				(27,742	) (1)			48,543	(2)			—				42,848
Financial Reinsurance			19,509				41				—				—				19,550
Total U.S.			292,937				(40,462	)			47,168				—				299,643
Canada Operations			117,712				(15,253	)			—				—				102,459
Europe & South Africa			47,089				(3,049	)			—				—				44,040
Asia Pacific Operations			51,946				2,253				—				—				54,199
Corporate and Other			60,636				(1,971	)			—				(51,449	)			7,216
Consolidated		$	570,320			$	(58,482	)		$	47,168			$	(51,449	)		$	507,557

 

(1)	Asset Intensive is net of $205,813 DAC offset.

(2)	Asset Intensive is net of $(236,797) DAC offset.

 

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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Per Share and Shares Data

(In thousands, except per share data)

 

(Unaudited)		Three Months Ended September 30,								Nine Months Ended September 30,
		2012				2011				2012				2011
Diluted earnings per share from operating income			$1.35				$1.87				$4.52				$4.92
Earnings per share from net income:
Basic earnings per share			$1.96				$1.82				$5.55				$5.53
Diluted earnings per share			$1.95				$1.81				$5.52				$5.49
Weighted average number of common and common equivalent shares outstanding			74,138				74,254				74,078				74,207
(Unaudited)		At or For the Nine Months Ended September 30,
		2012				2011
Treasury shares			5,286				5,871
Common shares outstanding			73,852				73,267
Book value per share outstanding			$91.18				$73.15
Book value per share outstanding, before impact of AOCI			$62.05				$55.47

 

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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollars in thousands)

 

(Unaudited)		Three Months Ended September 30,								Nine Months Ended September 30,
		2012				2011				2012				2011
Revenues:
Net premiums		$	1,912,746			$	1,776,165			$	5,726,889			$	5,300,971
Investment income, net of related expenses			396,781				268,210				1,066,055				976,686
Investment related gains (losses), net:
Other-than-temporary impairments on fixed maturity securities			(1,996	)			(11,911	)			(11,562	)			(19,049	)
Other-than-temporary impairments on fixed maturity securities transferred to (from) accumulated other comprehensive income			(559	)			3,089				(7,618	)			3,381
Other investment related gains (losses), net			78,608				(130,778	)			162,554				27,076
Total investment related gains (losses), net			76,053				(139,600	)			143,374				11,408
Other revenue			63,501				90,132				181,491				192,254
Total revenues			2,449,081				1,994,907				7,117,809				6,481,319
Benefits and expenses:
Claims and other policy benefits			1,662,625				1,514,765				4,868,220				4,504,227
Interest credited			130,341				35,251				285,080				237,510
Policy acquisition costs and other insurance expenses			318,106				164,372				961,679				785,138
Other operating expenses			103,786				94,029				319,425				297,340
Interest expense			29,749				27,025				76,431				77,412
Collateral finance facility expense			2,995				3,069				8,840				9,372
Total benefits and expenses			2,247,602				1,838,511				6,519,675				5,910,999
Income before income taxes			201,479				156,396				598,134				570,320
Income tax expense			57,004				21,794				189,230				162,854
Net income		$	144,475			$	134,602			$	408,904			$	407,466

 

# # #

Exhibit 99.2

 

Financial Supplement

Third 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".

 

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Reinsurance Group of America, Incorporated

Financial Supplement

3rd 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

 

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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 shareholders’ equity excluding AOCI.

 

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Reinsurance Group of America, Incorporated

Financial Highlights (1)

 

(USD thousands, except inforce & per share data)		Three Months Ended or As of																				Current Qtr vs. PY Quarter				Year-to-Date
		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Net premiums		$	1,912,746			$	1,950,661			$	1,863,482			$	2,034,716			$	1,776,165			$	136,581			$	5,726,889			$	5,300,971			$	425,918
Net income			144,475				141,111				123,318				138,579				134,602				9,873				408,904				407,466				1,438
Operating income			99,902				122,273				112,377				120,772				138,837				(38,935	)			334,552				364,824				(30,272	)
Operating return on equity (ex AOCI) - annualized			8.9	%			11.2	%			10.6	%			11.7	%			13.8	%			-4.9	%
Operating return on equity (ex AOCI) - trailing 12 months			10.5	%			11.8	%			12.0	%			12.2	%			13.2	%			-2.7	%
Total assets			39,924,013				38,344,323				32,286,082				31,633,973				30,736,591				9,187,422
Assumed Life Reinsurance in Force (in billions)
U.S.		$	1,403.3			$	1,405.8			$	1,406.1			$	1,348.5			$	1,347.9			$	55.4
Canada			384.8				365.1				364.5				344.9				329.5				55.3
Europe & South Africa			559.4				525.2				529.7				513.4				515.0				44.4
Asia Pacific			533.5				486.2				470.7				457.6				422.8				110.7
Total Life Reinsurance in Force		$	2,881.0			$	2,782.3			$	2,771.0			$	2,664.4			$	2,615.2			$	265.8
Assumed New Business Production (in billions)
U.S.		$	23.1			$	24.2			$	84.9			$	24.8			$	30.1			$	(7.0	)		$	132.2			$	85.7			$	46.5
Canada			11.3				12.6				13.1				11.3				14.0				(2.7	)			37.0				39.8				(2.8	)
Europe & South Africa			37.3				25.5				14.8				24.9				38.7				(1.4	)			77.6				123.4				(45.8	)
Asia Pacific			47.2				24.5				5.7				74.0				27.9				19.3				77.4				45.0				32.4
Total New Business Production		$	118.9			$	86.8			$	118.5			$	135.0			$	110.7			$	8.2			$	324.2			$	293.9			$	30.3
Per Share and Shares Data
Basic earnings per share
Net income		$	1.96			$	1.91			$	1.68			$	1.89			$	1.82			$	0.14			$	5.55			$	5.53			$	0.02
Operating income		$	1.35			$	1.66			$	1.53			$	1.65			$	1.88			$	(0.53	)		$	4.54			$	4.95			$	(0.41	)
Diluted earnings per share
Net income		$	1.95			$	1.91			$	1.67			$	1.88			$	1.81			$	0.14			$	5.52			$	5.49			$	0.03
Operating income		$	1.35			$	1.65			$	1.52			$	1.64			$	1.87			$	(0.52	)		$	4.52			$	4.92			$	(0.40	)
Wgt. average common shares outstanding (basic)			73,776				73,718				73,575				73,304				73,856				(80	)			73,690				73,680				10
Wgt. average common shares outstanding (diluted)			74,138				74,054				74,043				73,812				74,254				(116	)			74,078				74,207				(129	)
Common shares issued			79,138				79,138				79,138				79,138				79,138				—				79,138				79,138				—
Treasury shares			5,286				5,416				5,426				5,770				5,871				(585	)			5,286				5,871				(585	)
Common shares outstanding			73,852				73,722				73,712				73,368				73,267				585				73,852				73,267				585
Book value per share		$	91.18			$	84.75			$	80.44			$	79.31			$	73.15
Per share effect of accumulated other comprehensive income (AOCI)		$	29.13			$	24.41			$	21.87			$	22.06			$	17.68
Book value per share, excluding AOCI		$	62.05			$	60.34			$	58.57			$	57.25			$	55.47
Shareholder dividends paid		$	17,696.2			$	13,268.6			$	13,255.3			$	13,189.3			$	13,336.6			$	4,359.6			$	44,220.1			$	31,039.4			$	13,180.7

 

(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.

 

 

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Reinsurance Group of America, Incorporated

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

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	1,912,746			$	1,950,661			$	1,863,482			$	2,034,716			$	1,776,165			$	136,581			$	5,726,889			$	5,300,971			$	425,918
Investment income, net of related expenses			396,781				328,334				340,940				304,511				268,210				128,571				1,066,055				976,686				89,369
Investment related gains (losses), net
OTTI on fixed maturity securities			(1,996	)			(1,959	)			(7,607	)			(11,824	)			(11,911	)			9,915				(11,562	)			(19,049	)			7,487
OTTI on fixed maturity securities transferred to/from AOCI			(559	)			162				(7,221	)			543				3,089				(3,648	)			(7,618	)			3,381				(10,999	)
Other investment related gains (losses), net			78,608				25,598				58,348				(36,183	)			(130,778	)			209,386				162,554				27,076				135,478
Total investment related gains (losses), net			76,053				23,801				43,520				(47,464	)			(139,600	)			215,653				143,374				11,408				131,966
Other revenue			63,501				72,957				45,033				56,456				90,132				(26,631	)			181,491				192,254				(10,763	)
Total revenues			2,449,081				2,375,753				2,292,975				2,348,219				1,994,907				454,174				7,117,809				6,481,319				636,490
Benefits and expenses:
Claims and other policy benefits			1,662,625				1,625,446				1,580,149				1,720,956				1,514,765				147,860				4,868,220				4,504,227				363,993
Interest credited			130,341				66,697				88,042				78,884				35,251				95,090				285,080				237,510				47,570
Policy acquisition costs and other insurance expenses			318,106				335,939				307,634				204,883				164,372				153,734				961,679				785,138				176,541
Other operating expenses			103,786				105,541				110,098				122,000				94,029				9,757				319,425				297,340				22,085
Interest expense			29,749				23,360				23,322				25,226				27,025				2,724				76,431				77,412				(981	)
Collateral finance facility expense			2,995				2,878				2,967				3,019				3,069				(74	)			8,840				9,372				(532	)
Total benefits and expenses			2,247,602				2,159,861				2,112,212				2,154,968				1,838,511				409,091				6,519,675				5,910,999				608,676
Income before income taxes			201,479				215,892				180,763				193,251				156,396				45,083				598,134				570,320				27,814
Income tax expense			57,004				74,781				57,445				54,672				21,794				35,210				189,230				162,854				26,376
Net income		$	144,475			$	141,111			$	123,318			$	138,579			$	134,602			$	9,873			$	408,904			$	407,466			$	1,438
Pre-tax Operating Income Reconciliation:
Income before income taxes			201,479				215,892				180,763				193,251				156,396				45,083				598,134				570,320				27,814
Investment and derivative losses (gains) - non-operating (2)			(16,940	)			(102,184	)			94,098				(5,360	)			(221,194	)			204,254				(25,026	)			(260,247	)			235,221
Change in value of modified coinsurance and funds withheld embedded derivatives (2)			(54,836	)			4,453				9,428				85,722				102,574				(157,410	)			(40,955	)			1,514				(42,469	)
GMXB embedded derivatives (2)			(2,579	)			74,929				(146,375	)			(29,261	)			260,239				(262,818	)			(74,025	)			253,445				(327,470	)
Funds withheld losses (gains) - investment income			(6,400	)			(5,323	)			1,040				(194	)			(9,806	)			3,406				(10,683	)			(4,950	)			(5,733	)
Funds withheld losses (gains) - policy acq. costs			122				152				209				47				1,034				(912	)			483				902				(419	)
EIA embedded derivatives - interest credited			(167	)			(1,685	)			39,239				9,490				37,539				(37,706	)			37,387				31,799				5,588
EIA embedded derivatives - policy acq. costs			—				—				—				6,908				(3,664	)			3,664				—				(2,793	)			2,793
DAC offset, net			13,705				1,490				(13,148	)			(82,837	)			(107,709	)			121,414				2,047				(30,984	)			33,031
Gain on repurchase of collateral finance facility securities			—				—				—				(9,725	)			(50,869	)			50,869				—				(55,840	)			55,840
Loss on retirement of Preferred Income Equity Redeemable Securities (“PIERS”)			—				—				—				—				—				—				—				4,391				(4,391	)
Operating Income Before Income Taxes		$	134,384			$	187,724			$	165,254			$	168,041			$	164,540			$	(30,156	)		$	487,362			$	507,557			$	(20,195	)
After-tax Operating Income Reconciliation:
Net Income			144,475				141,111				123,318				138,579				134,602				9,873				408,904				407,466				1,438
Investment and derivative losses (gains) - non-operating (2)			(11,972	)			(66,949	)			60,304				(4,906	)			(144,834	)			132,862				(18,617	)			(171,005	)			152,388
Change in value of modified coinsurance and funds withheld embedded derivatives (2)			(35,644	)			2,895				6,128				55,719				66,673				(102,317	)			(26,621	)			984				(27,605	)
GMXB embedded derivatives (2)			(1,676	)			48,704				(95,144	)			(19,019	)			169,155				(170,831	)			(48,116	)			164,739				(212,855	)
Funds withheld losses (gains) - investment income			(4,160	)			(3,460	)			676				(126	)			(6,374	)			2,214				(6,944	)			(3,218	)			(3,726	)
Funds withheld losses (gains) - policy acq. costs			79				99				136				31				672				(593	)			314				586				(272	)
EIA embedded derivatives - interest credited			(108	)			(1,095	)			25,505				6,169				24,400				(24,508	)			24,302				20,669				3,633
EIA embedded derivatives - policy acq. costs			—				—				—				4,490				(2,381	)			2,381				—				(1,815	)			1,815
DAC offset, net			8,908				968				(8,546	)			(53,844	)			(70,011	)			78,919				1,330				(20,140	)			21,470
Gain on repurchase of collateral finance facility securities			—				—				—				(6,321	)			(33,065	)			33,065				—				(36,296	)			36,296
Loss on retirement of PIERS			—				—				—				—				—				—				—				2,854				(2,854	)
Operating Income		$	99,902			$	122,273			$	112,377			$	120,772			$	138,837			$	(38,935	)		$	334,552			$	364,824			$	(30,272	)

 

(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

 

				Page 3

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Reinsurance Group of America, Incorporated

Consolidated Operating Income Statement (1)

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
(USD thousands, except per share data)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	1,912,746			$	1,950,661			$	1,863,482			$	2,034,716			$	1,776,165			$	136,581			$	5,726,889			$	5,300,971			$	425,918
Investment income, net of related expenses			390,381				323,011				341,980				304,317				258,404				131,977				1,055,372				971,736				83,636
Investment related gains (losses), net			1,698				999				671				3,637				2,019				(321	)			3,368				6,120				(2,752	)
Other revenue			63,501				72,957				45,033				46,731				39,263				24,238				181,491				136,414				45,077
Total revenues			2,368,326				2,347,628				2,251,166				2,389,401				2,075,851				292,475				6,967,120				6,415,241				551,879
Benefits and expenses:
Claims and other policy benefits			1,662,625				1,625,446				1,580,149				1,720,956				1,514,765				147,860				4,868,220				4,504,227				363,993
Interest credited			130,508				68,382				48,803				69,394				(2,288	)			132,796				247,693				205,711				41,982
Policy acquisition costs and other insurance expenses			304,279				334,297				320,573				280,765				274,711				29,568				959,149				818,013				141,136
Other operating expenses			103,786				105,541				110,098				122,000				94,029				9,757				319,425				292,949				26,476
Interest expense			29,749				23,360				23,322				25,226				27,025				2,724				76,431				77,412				(981	)
Collateral finance facility expense			2,995				2,878				2,967				3,019				3,069				(74	)			8,840				9,372				(532	)
Total benefits and expenses			2,233,942				2,159,904				2,085,912				2,221,360				1,911,311				322,631				6,479,758				5,907,684				572,074
Operating income before income taxes			134,384				187,724				165,254				168,041				164,540				(30,156	)			487,362				507,557				(20,195	)
Operating income tax expense			34,482				65,451				52,877				47,269				25,703				8,779				152,810				142,733				10,077
Operating income		$	99,902			$	122,273			$	112,377			$	120,772			$	138,837			$	(38,935	)		$	334,552			$	364,824			$	(30,272	)
Wgt. Average Common Shares Outstanding (Diluted)			74,138				74,054				74,043				73,812				74,254				(116	)			74,078				74,207				(129	)
Diluted Earnings Per Share - Operating Income		$	1.35			$	1.65			$	1.52			$	1.64			$	1.87			$	(0.52	)		$	4.52			$	4.92			$	(0.40	)
Foreign currency effect (2):
Net premiums		$	(25,972	)		$	(45,800	)		$	(4,924	)		$	(5,509	)		$	53,399			$	(79,371	)		$	(76,696	)		$	173,163			$	(249,859	)
Operating income before income taxes		$	(4,165	)		$	(3,471	)		$	(387	)		$	(2,407	)		$	6,846			$	(11,011	)		$	(8,023	)		$	17,193			$	(25,216	)

 

(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

 

				Page 4

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Reinsurance Group of America, Incorporated

Consolidated Balance Sheets (1)

 

(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011
Assets
Fixed maturity securities, available-for-sale		$	21,658,414			$	17,244,192			$	16,794,057			$	16,200,950			$	15,557,032
Mortgage loans on real estate			2,256,881				1,157,049				1,040,733				991,731				934,694
Policy loans			1,243,498				1,250,238				1,260,070				1,260,400				1,228,890
Funds withheld at interest			5,608,640				5,457,888				5,472,532				5,410,424				5,445,886
Short-term investments			90,789				49,981				75,425				88,566				81,747
Investment receivable			—				5,406,898				—				—				—
Other invested assets			1,236,616				940,605				867,507				1,012,541				1,020,043
Total investments			32,094,838				31,506,851				25,510,324				24,964,612				24,268,292
Cash and cash equivalents			1,603,730				957,341				873,933				962,870				802,651
Accrued investment income			250,048				182,586				173,629				144,334				190,298
Premiums receivable and other reinsurance balances			1,179,687				1,104,176				1,131,334				1,059,572				1,060,631
Reinsurance ceded receivables			623,954				626,734				597,508				626,194				727,290
Deferred policy acquisition costs			3,630,877				3,605,008				3,629,424				3,543,925				3,340,394
Other assets			540,879				361,627				369,930				332,466				347,035
Total assets		$	39,924,013			$	38,344,323			$	32,286,082			$	31,633,973			$	30,736,591
Liabilities and Stockholders’ Equity
Future policy benefits		$	11,093,483			$	10,725,096			$	10,413,361			$	9,903,886			$	9,445,222
Interest-sensitive contract liabilities			13,254,859				13,352,601				8,252,995				8,394,468				8,378,159
Other policy claims and benefits			3,132,526				3,026,467				2,984,681				2,841,373				2,826,297
Other reinsurance balances			218,057				249,336				132,389				118,219				136,298
Deferred income taxes			1,806,186				1,785,614				1,728,765				1,679,834				1,518,990
Other liabilities			1,217,788				890,687				777,678				810,775				776,239
Short-term debt			—				—				—				—				199,997
Long-term debt			1,815,111				1,414,969				1,414,829				1,414,688				1,414,546
Collateral finance facility			651,968				651,936				652,029				652,032				681,004
Total liabilities			33,189,978				32,096,706				26,356,727				25,815,275				25,376,752
Stockholders’ Equity:
Common stock, at par value			791				791				791				791				791
Additional paid-in-capital			1,743,822				1,740,415				1,736,184				1,727,774				1,719,683
Retained earnings			3,154,317				3,033,505				2,906,310				2,818,429				2,695,680
Treasury stock			(316,542	)			(326,292	)			(325,732	)			(346,449	)			(352,106	)
Accumulated other comprehensive income (AOCI):
Accumulated currency translation adjustment, net of income taxes			273,258				237,010				253,875				229,795				189,347
Unrealized appreciation of securities, net of income taxes			1,907,512				1,591,647				1,388,597				1,419,318				1,119,724
Pension and postretirement benefits, net of income taxes			(29,123	)			(29,459	)			(30,670	)			(30,960	)			(13,280	)
Total stockholders’ equity			6,734,035				6,247,617				5,929,355				5,818,698				5,359,839
Total liabilities and stockholders’ equity		$	39,924,013			$	38,344,323			$	32,286,082			$	31,633,973			$	30,736,591
Total stockholders’ equity, excluding AOCI		$	4,582,388			$	4,448,419			$	4,317,553			$	4,200,545			$	4,064,048

 

(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.

 

				Page 5

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Reinsurance Group of America, Incorporated

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

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	1,045,767			$	1,082,400			$	1,021,507			$	1,099,409			$	971,190			$	74,577			$	3,149,674			$	2,880,080			$	269,594
Investment income, net of related expenses			135,532				133,652				132,417				125,528				123,686				11,846				401,601				370,122				31,479
Other revenue			764				401				1,003				1,571				599				165				2,168				1,830				338
Total revenues			1,182,063				1,216,453				1,154,927				1,226,508				1,095,475				86,588				3,553,443				3,252,032				301,411
Benefits and expenses:
Claims and other policy benefits			917,264				934,807				907,461				952,609				844,090				73,174				2,759,532				2,505,670				253,862
Interest credited			14,637				14,555				15,054				15,174				15,166				(529	)			44,246				44,717				(471	)
Policy acquisition costs and other insurance expenses			156,995				150,958				145,485				152,246				135,747				21,248				453,438				403,265				50,173
Other operating expenses			20,684				20,586				24,001				23,971				20,299				385				65,271				61,135				4,136
Total benefits and expenses			1,109,580				1,120,906				1,092,001				1,144,000				1,015,302				94,278				3,322,487				3,014,787				307,700
Operating income before income taxes			72,483				95,547				62,926				82,508				80,173				(7,690	)			230,956				237,245				(6,289	)
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			72,483				95,547				62,926				82,508				80,173				(7,690	)			230,956				237,245				(6,289	)
Investment and derivative (losses) gains - non-operating			(1,927	)			789				(13,084	)			30,075				5,056				(6,983	)			(14,222	)			14,136				(28,358	)
Income before income taxes		$	70,556			$	96,336			$	49,842			$	112,583			$	85,229			$	(14,673	)		$	216,734			$	251,381			$	(34,647	)
Loss and Expense Ratios:
Claims and other policy benefits			87.7	%			86.4	%			88.8	%			86.6	%			86.9	%			0.8	%			87.6	%			87.0	%			0.6	%
Policy acquisition costs and other insurance expenses			15.0	%			13.9	%			14.2	%			13.8	%			14.0	%			1.0	%			14.4	%			14.0	%			0.4	%
Other operating expenses			2.0	%			1.9	%			2.3	%			2.2	%			2.1	%			-0.1	%			2.1	%			2.1	%			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.

 

				Page 6

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Reinsurance Group of America, Incorporated

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

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	3,623			$	3,355			$	3,596			$	3,619			$	2,786			$	837			$	10,574			$	9,570			$	1,004
Investment income, net of related expenses			154,789				90,527				111,501				79,604				20,361				134,428				356,817				277,974				78,843
Investment related gains (losses), net			—				(18	)			(30	)			(82	)			(14	)			14				(48	)			(50	)			2
Other revenue			31,976				29,254				19,893				20,154				19,827				12,149				81,123				67,364				13,759
Total revenues			190,388				123,118				134,960				103,295				42,960				147,428				448,466				354,858				93,608
Benefits and expenses:
Claims and other policy benefits			2,828				5,102				1,902				2,766				4,431				(1,603	)			9,832				11,511				(1,679	)
Interest credited			115,645				53,611				33,511				53,965				(17,733	)			133,378				202,767				160,100				42,667
Policy acquisition costs and other insurance expenses			42,200				44,955				72,004				16,858				52,854				(10,654	)			159,159				134,616				24,543
Other operating expenses			2,596				2,807				3,062				2,434				1,886				710				8,465				5,783				2,682
Total benefits and expenses			163,269				106,475				110,479				76,023				41,438				121,831				380,223				312,010				68,213
Operating income before income taxes			27,119				16,643				24,481				27,272				1,522				25,597				68,243				42,848				25,395
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			27,119				16,643				24,481				27,272				1,522				25,597				68,243				42,848				25,395
Investment and derivative gains (losses) - non-operating (2)			2,039				92,008				(96,355	)			(23,077	)			219,530				(217,491	)			(2,308	)			229,507				(231,815	)
Change in value of modified coinsurance and funds withheld embedded derivatives (2)			54,257				(4,593	)			(9,387	)			(86,759	)			(103,949	)			158,206				40,277				(2,889	)			43,166
GMXB embedded derivatives (2)			2,579				(74,929	)			146,375				29,261				(260,239	)			262,818				74,025				(253,445	)			327,470
Funds withheld gains (losses) - investment income			5,652				5,430				(2,224	)			194				9,806				(4,154	)			8,858				4,950				3,908
Funds withheld gains (losses) - policy acq. costs			(122	)			(152	)			(209	)			(47	)			(1,034	)			912				(483	)			(902	)			419
EIA embedded derivatives - interest credited			167				1,685				(39,239	)			(9,490	)			(37,539	)			37,706				(37,387	)			(31,799	)			(5,588	)
EIA embedded derivatives - policy acq. costs			—				—				—				(6,908	)			3,664				(3,664	)			—				2,793				(2,793	)
DAC offset, net			(13,705	)			(1,490	)			13,148				82,837				107,709				(121,414	)			(2,047	)			30,984				(33,031	)
Income (loss) before income taxes		$	77,986			$	34,602			$	36,590			$	13,283			$	(60,530	)		$	138,516			$	149,178			$	22,047			$	127,131

 

(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

 

				Page 7

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Reinsurance Group of America, Incorporated

U.S. Asset Intensive Sub-segment

(Cont’d)

 

		Three Months Ended
(USD millions)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011
Annuity account values:
Fixed annuities (deferred)		$	5,815			$	5,942			$	897			$	879			$	856
Net interest spread (fixed annuities):			1.1	%			1.0	%			2.4	%			2.8	%			2.7	%
Equity-indexed annuities		$	4,882			$	4,867			$	4,895			$	4,881			$	4,327
Variable annuities:
No riders		$	957			$	944			$	1,040			$	986			$	979
GMDB only			80				79				82				85				76
GMIB only			6				6				6				6				5
GMAB only			55				54				57				55				54
GMWB only			1,667				1,620				1,704				1,538				1,524
GMDB / WB			461				451				460				498				428
Other			31				30				32				31				30
Total VA account values		$	3,257			$	3,184			$	3,381			$	3,199			$	3,096
Fair value of liabilities associated with living benefit riders		$	203			$	205			$	130			$	277			$	306
Interest-sensitive contract liabilities associated with:
Guaranteed investment contracts		$	200			$	200			$	198			$	198			$	199
Bank-owned life insurance (BOLI)		$	519			$	515			$	512			$	508			$	505
Other asset-intensive business		$	76			$	77			$	78			$	78			$	79

 

				Page 8

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Reinsurance Group of America, Incorporated

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

 

		Three Months Ended																				Current Qtr vs.  PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Investment income, net of related expenses		$	364			$	179			$	164			$	131			$	168			$	196			$	707			$	33			$	674
Other revenue			11,565				11,734				8,910				9,558				8,619				2,946				32,209				26,815				5,394
Total revenues			11,929				11,913				9,074				9,689				8,787				3,142				32,916				26,848				6,068
Benefits and expenses:
Policy acquisition costs and other insurance expenses			2,012				704				770				743				798				1,214				3,486				2,448				1,038
Other operating expenses			1,635				1,593				1,852				2,025				1,584				51				5,080				4,850				230
Total benefits and expenses			3,647				2,297				2,622				2,768				2,382				1,265				8,566				7,298				1,268
Operating income before income taxes			8,282				9,616				6,452				6,921				6,405				1,877				24,350				19,550				4,800
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			8,282				9,616				6,452				6,921				6,405				1,877				24,350				19,550				4,800
Investment and derivative gains (losses) - non-operating			(146	)			32				(139	)			(87	)			(13	)			(133	)			(253	)			(41	)			(212	)
Income before income taxes		$	8,136			$	9,648			$	6,313			$	6,834			$	6,392			$	1,744			$	24,097			$	19,509			$	4,588

 

				Page 9

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Reinsurance Group of America, Incorporated

Canadian Segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	227,944			$	221,167			$	218,210			$	224,763			$	185,790			$	42,154			$	667,321			$	610,535			$	56,786
Investment income, net of related expenses			46,016				46,349				47,716				42,604				53,698				(7,682	)			140,081				145,700				(5,619	)
Investment related gains (losses), net			1,003				995				1,323				1,579				1,267				(264	)			3,321				3,619				(298	)
Other revenue			3,288				3,205				(30	)			(9	)			440				2,848				6,463				5,442				1,021
Total revenues			278,251				271,716				267,219				268,937				241,195				37,056				817,186				765,296				51,890
Benefits and expenses:
Claims and other policy benefits			191,275				184,857				160,625				165,456				162,734				28,541				536,757				507,649				29,108
Interest credited			22				—				—				—				—				22				22				—				22
Policy acquisition costs and other insurance expenses			49,790				47,476				50,285				52,140				34,350				15,440				147,551				128,572				18,979
Other operating expenses			9,022				8,876				9,650				10,645				9,129				(107	)			27,548				26,616				932
Total benefits and expenses			250,109				241,209				220,560				228,241				206,213				43,896				711,878				662,837				49,041
Operating income before income taxes			28,142				30,507				46,659				40,696				34,982				(6,840	)			105,308				102,459				2,849
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			28,142				30,507				46,659				40,696				34,982				(6,840	)			105,308				102,459				2,849
Investment and derivative gains (losses) - non-operating			8,630				4,630				7,220				6,545				8,729				(99	)			20,480				15,253				5,227
Funds withheld gains (losses) - investment income			748				(107	)			1,184				—				—				748				1,825				—				1,825
Income before income taxes		$	37,520			$	35,030			$	55,063			$	47,241			$	43,711			$	(6,191	)		$	127,613			$	117,712			$	9,901
Loss and Expense Ratios:
Loss ratios (creditor business)			40.4	%			38.0	%			34.1	%			36.3	%			38.4	%			2.0	%			37.7	%			38.6	%			-0.9	%
Loss ratios (excluding creditor business)			96.8	%			95.5	%			83.8	%			85.5	%			96.9	%			-0.1	%			92.1	%			94.4	%			-2.3	%
Claims and other policy benefits / (net premiums + investment income)			69.8	%			69.1	%			60.4	%			61.9	%			68.0	%			1.8	%			66.5	%			67.1	%			-0.6	%
Policy acquisition costs and other insurance expenses (creditor business)			58.2	%			58.5	%			57.1	%			59.2	%			52.8	%			5.4	%			58.0	%			55.4	%			2.6	%
Policy acquisition costs and other insurance expenses (excluding creditor business)			11.1	%			11.8	%			14.2	%			10.9	%			10.9	%			0.2	%			12.4	%			11.5	%			0.9	%
Other operating expenses			4.0	%			4.0	%			4.4	%			4.7	%			4.9	%			-0.9	%			4.1	%			4.4	%			-0.3	%
Foreign currency effect (2):
Net premiums		$	(3,413	)		$	(9,838	)		$	(3,328	)		$	(2,669	)		$	10,269			$	(13,682	)		$	(16,579	)		$	33,926			$	(50,505	)
Operating income before income taxes		$	919			$	(2,905	)		$	(554	)		$	(641	)		$	2,571			$	(1,652	)		$	(2,540	)		$	6,045			$	(8,585	)
Creditor reinsurance net premiums		$	52,038			$	45,883			$	44,810			$	54,227			$	29,895			$	22,143			$	142,731			$	123,092			$	19,639

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

 

				Page 10

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Reinsurance Group of America, Incorporated

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

 

		Three Months Ended																				Current Qtr vs.  PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	303,101			$	310,075			$	292,771			$	356,284			$	286,054			$	17,047			$	905,947			$	838,193			$	67,754
Investment income, net of related expenses			11,437				11,248				11,331				11,709				11,242				195				34,016				32,642				1,374
Other revenue			1,576				1,464				2,253				1,035				1,196				380				5,293				3,996				1,297
Total revenues			316,114				322,787				306,355				369,028				298,492				17,622				945,256				874,831				70,425
Benefits and expenses:
Claims and other policy benefits			251,553				263,992				261,484				293,126				248,890				2,663				777,029				708,795				68,234
Policy acquisition costs and other insurance expenses			14,697				13,550				15,052				13,329				15,004				(307	)			43,299				45,888				(2,589	)
Other operating expenses			24,809				26,810				25,195				29,511				24,569				240				76,814				76,108				706
Total benefits and expenses			291,059				304,352				301,731				335,966				288,463				2,596				897,142				830,791				66,351
Operating income before income taxes			25,055				18,435				4,624				33,062				10,029				15,026				48,114				44,040				4,074
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			25,055				18,435				4,624				33,062				10,029				15,026				48,114				44,040				4,074
Investment and derivative gains (losses) - non-operating			7,111				1,156				1,982				2,951				2,000				5,111				10,249				3,049				7,200
Income before income taxes		$	32,166			$	19,591			$	6,606			$	36,013			$	12,029			$	20,137			$	58,363			$	47,089			$	11,274
Loss and Expense Ratios:
Claims and other policy benefits			83.0	%			85.1	%			89.3	%			82.3	%			87.0	%			-4.0	%			85.8	%			84.6	%			1.2	%
Policy acquisition costs and other insurance expenses			4.8	%			4.4	%			5.1	%			3.7	%			5.2	%			-0.4	%			4.8	%			5.5	%			-0.7	%
Other operating expenses			8.2	%			8.6	%			8.6	%			8.3	%			8.6	%			-0.4	%			8.5	%			9.1	%			-0.6	%
Foreign currency effect (2):
Net premiums		$	(17,157	)		$	(22,973	)		$	(11,362	)		$	(9,136	)		$	9,234			$	(26,391	)		$	(51,492	)		$	40,386			$	(91,878	)
Operating income before income taxes		$	(2,989	)		$	(1,013	)		$	(1,417	)		$	(1,605	)		$	669			$	(3,658	)		$	(5,419	)		$	2,614			$	(8,033	)
Critical illness net premiums		$	58,793			$	62,001			$	61,548			$	61,564			$	59,679			$	(886	)		$	182,342			$	183,260			$	(918	)

 

(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

 

				Page 11

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Reinsurance Group of America, Incorporated

Asia Pacific Segment Pre-tax Operating Income (1)

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	330,415			$	331,945			$	325,350			$	348,358			$	328,259			$	2,156			$	987,710			$	956,132			$	31,578
Investment income, net of related expenses			19,316				20,711				22,578				21,666				21,472				(2,156	)			62,605				63,171				(566	)
Investment related gains (losses), net			468				(164	)			(809	)			1,237				1,452				(984	)			(505	)			2,721				(3,226	)
Other revenue			10,052				24,109				7,408				9,741				8,557				1,495				41,569				24,332				17,237
Total revenues			360,251				376,601				354,527				381,002				359,740				511				1,091,379				1,046,356				45,023
Benefits and expenses:
Claims and other policy benefits			299,782				236,733				248,620				306,802				254,739				45,043				785,135				770,031				15,104
Interest Credited			204				216				238				254				280				(76	)			658				895				(237	)
Policy acquisition costs and other insurance expenses			52,779				89,996				50,847				58,713				49,854				2,925				193,622				142,417				51,205
Other operating expenses			28,234				26,929				27,913				30,254				27,598				636				83,076				78,814				4,262
Total benefits and expenses			380,999				353,874				327,618				396,023				332,471				48,528				1,062,491				992,157				70,334
Operating income (loss) before income taxes			(20,748	)			22,727				26,909				(15,021	)			27,269				(48,017	)			28,888				54,199				(25,311	)
Operating to U.S. GAAP Reconciliation:
Operating income before income taxes			(20,748	)			22,727				26,909				(15,021	)			27,269				(48,017	)			28,888				54,199				(25,311	)
Investment and derivative gains (losses) - non-operating			4,265				1,132				5,158				5,309				(1,625	)			5,890				10,555				(2,253	)			12,808
Income (loss) before income taxes		$	(16,483	)		$	23,859			$	32,067			$	(9,712	)		$	25,644			$	(42,127	)		$	39,443			$	51,946			$	(12,503	)
Loss and Expense Ratios:
Claims and other policy benefits			90.7	%			71.3	%			76.4	%			88.1	%			77.6	%			13.1	%			79.5	%			80.5	%			-1.0	%
Policy acquisition costs and other insurance expenses			16.0	%			27.1	%			15.6	%			16.9	%			15.2	%			0.8	%			19.6	%			14.9	%			4.7	%
Other operating expenses			8.5	%			8.1	%			8.6	%			8.7	%			8.4	%			0.1	%			8.4	%			8.2	%			0.2	%
Foreign currency effect (2):
Net premiums		$	(5,401	)		$	(12,998	)		$	9,756			$	6,296			$	33,908			$	(39,309	)		$	(8,643	)		$	98,955			$	(107,598	)
Operating income before income taxes		$	(1,280	)		$	(614	)		$	1,529			$	325			$	3,379			$	(4,659	)		$	(365	)		$	5,491			$	(5,856	)
Critical illness net premiums		$	68,356			$	46,700			$	40,333			$	40,566			$	30,135			$	38,221			$	155,389			$	116,760			$	38,629

 

(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

 

				Page 12

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Reinsurance Group of America, Incorporated

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

 

		Three Months Ended																				Current Qtr vs.  PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Revenues:
Net premiums		$	1,896			$	1,719			$	2,048			$	2,283			$	2,086			$	(190	)		$	5,663			$	6,461			$	(798	)
Investment income, net of related expenses			22,927				20,345				16,273				23,075				27,777				(4,850	)			59,545				82,094				(22,549	)
Investment related gains (losses), net			227				186				187				903				(686	)			913				600				(170	)			770
Other revenue			4,280				2,790				5,596				4,681				25				4,255				12,666				6,635				6,031
Total revenues			29,330				25,040				24,104				30,942				29,202				128				78,474				95,020				(16,546	)
Benefits and expenses:
Claims and other policy benefits			(77	)			(45	)			57				197				(119	)			42				(65	)			571				(636	)
Interest credited			—				—				—				1				(1	)			1				—				(1	)			1
Policy acquisition costs and other insurance expenses			(14,194	)			(13,342	)			(13,870	)			(13,264	)			(13,896	)			(298	)			(41,406	)			(39,193	)			(2,213	)
Other operating expenses			16,806				17,940				18,425				23,160				8,964				7,842				53,171				39,643				13,528
Interest expense			29,749				23,360				23,322				25,226				27,025				2,724				76,431				77,412				(981	)
Collateral finance facility expense			2,995				2,878				2,967				3,019				3,069				(74	)			8,840				9,372				(532	)
Total benefits and expenses			35,279				30,791				30,901				38,339				25,042				10,237				96,971				87,804				9,167
Operating income (loss) before income taxes			(5,949	)			(5,751	)			(6,797	)			(7,397	)			4,160				(10,109	)			(18,497	)			7,216				(25,713	)
Operating to U.S. GAAP Reconciliation:
Operating income (loss) before income taxes			(5,949	)			(5,751	)			(6,797	)			(7,397	)			4,160				(10,109	)			(18,497	)			7,216				(25,713	)
Investment and derivative gains (losses) - non-operating			(2,453	)			2,577				1,079				(15,319	)			(11,108	)			8,655				1,203				1,971				(768	)
Gain on repurchase of collateral finance facility securities			—				—				—				9,725				50,869				(50,869	)			—				55,840				(55,840	)
Loss on retirement of PIERS			—				—				—				—				—				—				—				(4,391	)			4,391
Income (loss) before income taxes		$	(8,402	)		$	(3,174	)		$	(5,718	)		$	(12,991	)		$	43,921			$	(52,323	)		$	(17,294	)		$	60,636			$	(77,930	)
Foreign currency effect (2):
Net premiums		$	(1	)		$	9			$	10			$	—			$	(12	)		$	11			$	18			$	(104	)		$	122
Operating income before income taxes		$	(815	)		$	1,061			$	55			$	(486	)		$	227			$	(1,042	)		$	301			$	3,043			$	(2,742	)

 

(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

 

				Page 13

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Reinsurance Group of America, Incorporated

Summary of Pre-tax Segment Operating Income (1)

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
U.S. Traditional		$	72,483			$	95,547			$	62,926			$	82,508			$	80,173			$	(7,690	)		$	230,956			$	237,245			$	(6,289	)
U.S. Asset Intensive			27,119				16,643				24,481				27,272				1,522				25,597				68,243				42,848				25,395
U.S. Financial Reinsurance			8,282				9,616				6,452				6,921				6,405				1,877				24,350				19,550				4,800
Total U.S. Segment			107,884				121,806				93,859				116,701				88,100				19,784				323,549				299,643				23,906
Canadian Segment			28,142				30,507				46,659				40,696				34,982				(6,840	)			105,308				102,459				2,849
Europe & South Africa Segment			25,055				18,435				4,624				33,062				10,029				15,026				48,114				44,040				4,074
Asia Pacific Segment			(20,748	)			22,727				26,909				(15,021	)			27,269				(48,017	)			28,888				54,199				(25,311	)
Corporate and Other			(5,949	)			(5,751	)			(6,797	)			(7,397	)			4,160				(10,109	)			(18,497	)			7,216				(25,713	)
Consolidated		$	134,384			$	187,724			$	165,254			$	168,041			$	164,540			$	(30,156	)		$	487,362			$	507,557			$	(20,195	)

 

(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.

 

				Page 14

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Reinsurance Group of America, Incorporated

Investments

 

Cash and Invested Assets
(USD thousands)		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011
Fixed maturity securities, available-for-sale		$	21,658,414			$	17,244,192			$	16,794,057			$	16,200,950			$	15,557,032
Mortgage loans on real estate			2,256,881				1,157,049				1,040,733				991,731				934,694
Policy loans			1,243,498				1,250,238				1,260,070				1,260,400				1,228,890
Funds withheld at interest			5,608,640				5,457,888				5,472,532				5,410,424				5,445,886
Short-term investments			90,789				49,981				75,425				88,566				81,747
Investment Receivable			—				5,406,898				—				—				—
Other invested assets			1,236,616				940,605				867,507				1,012,541				1,020,043
Cash and cash equivalents			1,603,730				957,341				873,933				962,870				802,651
Total cash and invested assets		$	33,698,568			$	32,464,192			$	26,384,257			$	25,927,482			$	25,070,943

Investment Income and Yield Summary

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Average invested assets at amortized cost (1)		$	17,030,794			$	16,539,380			$	16,342,741			$	15,792,721			$	15,779,896			$	1,250,898			$	16,432,165			$	15,321,870			$	1,110,295
Net investment income (1)		$	208,346			$	205,471			$	202,603			$	200,702			$	204,719			$	3,627			$	616,420			$	605,954			$	10,466
Annualized investment yield (ratio of net investment income to average invested assets) (1)			4.98	%			5.06	%			5.05	%			5.18	%			5.29	%			-0.31	%			5.03	%			5.31	%			-0.28	%

 

(1)	Excludes funds withheld and other spread related business (e.g. coinsurance of annuities).

 

				Page 15

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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)

 

		September 30, 2012
		Amortized Cost				Unrealized Gains				Unrealized Losses				Estimated Fair Value				% of Total				Other-than- temporary Impairment in AOCI
Available-for-sale:
Corporate securities		$	10,885,071			$	1,059,275			$	44,624			$	11,899,722				55.0	%		$	—
Canadian and Canadian provincial governments			2,653,761				1,438,124				2				4,091,883				18.9	%			—
Residential mortgage-backed securities			980,655				80,614				5,461				1,055,808				4.9	%			(477	)
Asset-backed securities			588,851				18,050				34,201				572,700				2.6	%			(2,295	)
Commercial mortgage-backed securities			1,663,493				137,153				60,255				1,740,391				8.0	%			(6,111	)
U.S. government and agencies			251,417				33,458				18				284,857				1.3	%			—
State and political subdivisions			254,845				38,784				6,212				287,417				1.3	%			—
Other foreign government, supranational, and foreign government-sponsored enterprises			1,627,190				100,539				2,093				1,725,636				8.0	%			—
Total fixed maturity securities		$	18,905,283			$	2,905,997			$	152,866			$	21,658,414				100.0	%		$	(8,883	)
Non-redeemable preferred stock			69,182				6,332				834				74,680				35.7	%
Other equity securities			133,037				1,555				—				134,592				64.3	%
Total equity securities		$	202,219			$	7,887			$	834			$	209,272				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	%

 

				Page 16

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Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Corporate Securities by Sector (Fixed Maturities and Equities)

(Excludes Funds Withheld Portfolios)

 

		September 30, 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		$	2,118,048			$	2,236,653				18.5	%		A		$	1,477,638			$	1,454,124				19.2	%		A
Brokerage			87,137				97,478				0.8	%		A			59,288				63,101				0.8	%		A
Finance Comp.			211,751				225,109				1.9	%		A			158,271				161,992				2.1	%		A
Insurance			591,559				648,986				5.4	%		A-			391,092				413,339				5.5	%		A-
REITs			476,487				517,964				4.3	%		BBB			300,401				316,192				4.2	%		BBB+
Other Finance			268,619				286,033				2.4	%		A+			130,984				135,812				1.8	%		A-
Total Financial Institutions			3,753,601				4,012,223				33.3	%					2,517,674				2,544,560				33.6	%
Industrials
Basic			769,994				822,844				6.8	%		BBB			367,323				402,225				5.3	%		BBB+
Capital Goods			592,007				645,392				5.3	%		BBB+			360,309				396,150				5.2	%		BBB+
Communications			995,240				1,118,108				9.2	%		BBB+			674,182				745,064				9.8	%		BBB+
Consumer Cyclical			715,321				780,013				6.4	%		BBB+			407,873				438,034				5.8	%		BBB+
Consumer Noncyclical			920,933				1,040,701				8.6	%		BBB+			691,245				784,819				10.4	%		A-
Energy			719,572				792,312				6.5	%		BBB+			405,317				454,727				6.0	%		BBB+
Technology			395,658				425,991				3.5	%		BBB			245,954				269,301				3.6	%		BBB+
Transportation			369,964				406,829				3.4	%		BBB+			219,605				234,822				3.1	%		BBB+
Other Industrial			104,851				113,879				0.9	%		BBB+			41,266				46,053				0.6	%		BBB
Total Industrials			5,583,540				6,146,069				50.6	%					3,413,074				3,771,195				49.8	%
Utilities
Electric			1,010,795				1,125,780				9.3	%		BBB+			673,725				756,033				10.0	%		BBB+
Natural Gas			642,651				715,671				5.9	%		BBB			398,648				447,617				5.9	%		BBB
Other Utility			62,067				73,358				0.6	%		A-			43,377				51,921				0.7	%		A-
Total Utilities			1,715,513				1,914,809				15.8	%					1,115,750				1,255,571				16.6	%
Other Sectors			34,636				35,893				0.3	%		AA-			3,300				3,680				0.0	%		AA-
Total		$	11,087,290			$	12,108,994				100.0	%		BBB+		$	7,049,798			$	7,575,006				100.0	%		BBB+

 

				Page 17

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Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Ratings of Fixed Maturity Securities

(Excludes Funds Withheld Portfolios)

 

				September 30, 2012												June 30, 2012												March 31, 2012												December 31, 2011												September 30, 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		$	2,222,818			$	2,364,081				10.9	%		$	1,979,353			$	2,092,043				12.1	%		$	2,090,606			$	2,196,118				13.1	%		$	2,205,406			$	2,304,991				14.2	%		$	2,375,876			$	2,459,503				15.8	%
1		AA			5,265,613				6,572,815				30.4	%			4,578,944				5,708,472				33.1	%			4,727,343				5,764,579				34.3	%			4,675,653				5,815,846				35.9	%			4,351,791				5,254,456				33.8	%
1		A			4,666,113				5,525,476				25.5	%			3,919,020				4,705,816				27.3	%			3,646,110				4,263,802				25.4	%			3,206,553				3,822,796				23.6	%			3,231,583				3,736,883				24.0	%
2		BBB			5,716,281				6,185,558				28.6	%			3,667,640				3,974,486				23.1	%			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		BB			583,622				608,439				2.8	%			421,128				428,875				2.5	%			428,543				430,002				2.6	%			446,610				436,001				2.7	%			444,042				423,559				2.7	%
4		B			322,040				306,871				1.4	%			269,970				248,850				1.4	%			240,603				220,924				1.3	%			244,645				210,222				1.3	%			229,658				196,617				1.3	%
5		CCC and lower			92,149				68,193				0.3	%			89,665				64,812				0.4	%			106,637				80,660				0.5	%			95,128				71,410				0.4	%			78,310				60,014				0.4	%
6		In or near default			36,647				26,981				0.1	%			31,445				20,838				0.1	%			35,050				23,605				0.1	%			24,948				17,273				0.1	%			28,343				23,007				0.1	%
		Total		$	18,905,283			$	21,658,414				100.0	%		$	14,957,165			$	17,244,192				100.0	%		$	14,814,859			$	16,794,057				100.0	%		$	14,182,880			$	16,200,950				100.0	%		$	13,926,899			$	15,557,032				100.0	%

 

Structured Fixed Maturity Securities

 

		September 30, 2012								June 30, 2012								March 31, 2012								December 31, 2011								September 30, 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		$	511,887			$	571,894			$	511,985			$	571,821			$	523,206			$	576,045			$	561,156			$	619,010			$	596,072			$	660,833
Non-agency			468,768				483,914				495,808				506,741				551,867				562,183				606,109				608,224				642,791				646,941
Total residential mortgage-backed securities			980,655				1,055,808				1,007,793				1,078,562				1,075,073				1,138,228				1,167,265				1,227,234				1,238,863				1,307,774
Commercial mortgage-backed securities			1,663,493				1,740,391				1,308,668				1,348,047				1,302,734				1,342,421				1,233,958				1,242,219				1,330,302				1,326,994
Asset-backed securities			588,851				572,700				469,616				441,051				448,688				414,527				443,974				401,991				412,468				372,957
Total		$	3,232,999			$	3,368,899			$	2,786,077			$	2,867,660			$	2,826,495			$	2,895,176			$	2,845,197			$	2,871,444			$	2,981,633			$	3,007,725

 

				Page 18

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Reinsurance Group of America, Incorporated

Investments

(USD thousands)

CMBS Exposure

(Includes Funds Withheld Portfolios)

 

		September 30, 2012
		AAA								AA								A
Underwriting Year		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
2005 & Prior		$	210,908			$	218,327			$	132,108			$	143,785			$	97,311			$	99,438
2006			245,431				273,176				60,760				67,989				78,858				84,663
2007			177,192				194,352				19,048				21,752				109,263				121,310
2008			7,750				7,821				48,514				61,261				14,330				16,690
2009			1,647				1,778				17,307				19,229				3,450				5,414
2010			27,968				29,778				45,882				52,122				13,270				14,466
2011			16,848				17,372				16,060				18,282				35,419				36,708
2012			20,009				20,617				27,226				27,553				24,892				25,389
Total		$	707,753			$	763,221			$	366,905			$	411,973			$	376,793			$	404,078
		BBB								Below Investment Grade								Total
Underwriting Year		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
2005 & Prior		$	118,379			$	119,048			$	45,671			$	39,819			$	604,377			$	620,417
2006			83,778				81,072				47,481				42,885				516,308				549,785
2007			99,814				114,742				116,312				87,728				521,629				539,884
2008			—				—				22,210				15,903				92,804				101,675
2009			3,821				5,070				—				—				26,225				31,491
2010			—				—				—				—				87,120				96,366
2011			6,100				6,379				—				—				74,427				78,741
2012			7,637				7,910				—				—				79,764				81,469
Total		$	319,529			$	334,221			$	231,674			$	186,335			$	2,002,654			$	2,099,828

NOTE: Totals include directly held investments with amortized cost of $1,663.5 million and fair value of $1,740.4 million as well as

investments in funds withheld with amortized cost of $339.2 million and fair value of $359.4 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.

 

 

				Page 19

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Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Gross Unrealized Losses Aging

Fixed Maturity Securities

 

		September 30, 2012								June 30, 2012								March 31, 2012								December 31, 2011								September 30, 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%		$	55,097				35.9	%		$	75,539				38.5	%		$	88,526				41.3	%		$	126,250				43.1	%		$	139,671				46.1	%
20% or more for less than six months			509				0.3	%			5,924				3.0	%			9,803				4.6	%			46,386				15.9	%			49,034				16.2	%
20% or more for six months or greater			97,260				63.3	%			112,362				57.2	%			111,830				52.2	%			109,330				37.4	%			105,170				34.7	%
Total		$	152,866				99.5	%		$	193,825				98.7	%		$	210,159				98.1	%		$	281,966				96.4	%		$	293,875				97.0	%
Equity Securities
		September 30, 2012								June 30, 2012								March 31, 2012								December 31, 2011								September 30, 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%		$	833				0.5	%		$	1,659				0.9	%		$	3,511				1.6	%		$	4,905				1.7	%		$	4,774				1.6	%
20% or more for less than six months			—				0.0	%			815				0.4	%			183				0.1	%			5,117				1.7	%			4,142				1.4	%
20% or more for six months or greater			1				0.0	%			—				0.0	%			499				0.2	%			498				0.2	%			49				0.0	%
Total		$	834				0.5	%		$	2,474				1.3	%		$	4,193				1.9	%		$	10,520				3.6	%		$	8,965				3.0	%

 

				Page 20

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Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Fixed Maturities and Equity Securities Below Amortized Cost

(Excludes Funds Withheld Portfolios)

 

		As of September 30, 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		$	436,908			$	7,947			$	168,366			$	26,006			$	605,274			$	33,953
Canadian and Canadian provincial governments			589				2				—				—				589				2
Residential mortgage-backed securities			21,365				113				21,236				4,763				42,601				4,876
Asset-backed securities			55,260				1,286				101,691				20,960				156,951				22,246
Commercial mortgage-backed securities			117,736				1,350				40,110				9,546				157,846				10,896
U.S. government and agencies			6,715				18				—				—				6,715				18
State and political subdivisions			2,885				1,272				18,409				4,940				21,294				6,212
Other foreign government, supranational, and foreign government-sponsored enterprises			53,671				1,068				16,589				1,025				70,260				2,093
Investment grade securities			695,129				13,056				366,401				67,240				1,061,530				80,296
Non-investment grade securities:
Corporate securities			133,893				4,330				63,817				6,341				197,710				10,671
Residential mortgage-backed securities			7,774				55				4,304				530				12,078				585
Asset-backed securities			—				—				18,244				11,955				18,244				11,955
Commercial mortgage-backed securities			12,157				492				60,373				48,867				72,530				49,359
State and political subdivisions			—				—				—				—				—				—
Other foreign government, supranational, and foreign government-sponsored enterprises			—				—				—				—				—				—
Non-investment grade securities			153,824				4,877				146,738				67,693				300,562				72,570
Total fixed maturity securities		$	848,953			$	17,933			$	513,139			$	134,933			$	1,362,092			$	152,866
Non-redeemable preferred stock			734				6				6,744				828				7,478				834
Total Equity securities		$	734			$	6			$	6,744			$	828			$	7,478			$	834

 

		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

 

				Page 21

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Reinsurance Group of America, Incorporated

Investments

(USD thousands)

Consolidated Investment Related Gains and Losses

 

		Three Months Ended																				Current Qtr vs. PY Quarter				Year-to-Date
		Sept. 30, 2012				June 30, 2012				March 31, 2012				Dec. 31, 2011				Sept. 30, 2011								Sept. 30, 2012				Sept. 30, 2011				Change
Fixed Maturity and Equity Securities:
Other-than-temporary impairment losses on fixed maturities		$	(1,996	)		$	(1,959	)		$	(7,607	)		$	(11,824	)		$	(11,911	)		$	9,915			$	(11,562	)		$	(19,049	)		$	7,487
Portion of loss recognized in accumulated other comprehensive income (before taxes)			(559	)			162				(7,221	)			543				3,089				(3,648	)			(7,618	)			3,381				(10,999	)
Net other-than-temporary impairment losses on fixed maturities recognized in earnings			(2,555	)			(1,797	)			(14,828	)			(11,281	)			(8,822	)			6,267				(19,180	)			(15,668	)			(3,512	)
Impairment losses on equity securities			—				(2,186	)			(839	)			(436	)			—				—				(3,025	)			(3,680	)			655
Gain on investment activity			53,173				26,593				22,312				39,622				34,840				18,333				102,078				92,423				9,655
Loss on investment activity			(6,668	)			(8,918	)			(7,504	)			(6,247	)			(7,182	)			514				(23,090	)			(20,749	)			(2,341	)
Net gain/(loss) on fixed maturity and equity securities			43,950				13,692				(859	)			21,658				18,836				25,114				56,783				52,326				4,457
Other impairment losses and change in mortgage loan provision			(10,301	)			1,762				(5,843	)			(5,258	)			(2,370	)			(7,931	)			(14,382	)			(4,980	)			(9,402	)
Other non-derivative gain/(loss), net			5,563				5,628				6,641				7,318				5,698				(135	)			17,832				15,039				2,793
Free-standing Derivatives:
Credit Default Swaps			7,819				(4,794	)			11,813				8,075				(10,018	)			17,837				14,838				(8,138	)			22,976
Interest Rate Swaps - non-hedged			(1,437	)			73,342				(47,352	)			20,818				142,907				(144,344	)			24,553				157,520				(132,967	)
Interest Rate Swaps - hedged			(4	)			29				(26	)			28				258				(262	)			(1	)			589				(590	)
Futures			(3,977	)			11,073				(17,408	)			(22,866	)			36,217				(40,194	)			(10,312	)			21,921				(32,233	)
CPI Swaps			422				(1,431	)			(802	)			726				(219	)			641				(1,811	)			1,095				(2,906	)
Equity options			(23,916	)			3,367				(37,983	)			(22,063	)			30,530				(54,446	)			(58,532	)			29,881				(88,413	)
Currency Forwards			519				515				(1,608	)			561				1,374				(855	)			(574	)			1,114				(1,688	)
Total free-standing derivatives			(20,574	)			82,101				(93,366	)			(14,721	)			201,049				(221,623	)			(31,839	)			203,982				(235,821	)
Embedded Derivatives:
Modified coinsurance and funds withheld treaties			54,836				(4,453	)			(9,428	)			(85,722	)			(102,574	)			157,410				40,955				(1,514	)			42,469
GMXB			2,579				(74,929	)			146,375				29,261				(260,239	)			262,818				74,025				(253,445	)			327,470
Total embedded derivatives			57,415				(79,382	)			136,947				(56,461	)			(362,813	)			420,228				114,980				(254,959	)			369,939
Net gain/(loss) on total derivatives			36,841				2,719				43,581				(71,182	)			(161,764	)			198,605				83,141				(50,977	)			134,118
Total investment related gains / (losses), net		$	76,053			$	23,801			$	43,520			$	(47,464	)		$	(139,600	)		$	215,653			$	143,374			$	11,408			$	131,966

 

				Page 22