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): May 18, 2015
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) |
16600 Swingley Ridge Road, Chesterfield, Missouri 63017
(Address of Principal Executive Office)
Registrant’s telephone number, including area code: (636) 736-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
As previously reported in Reinsurance Group of America, Incorporated’s Currents Report on Form 8-K furnished on May 14, 2015, the company announced that it will host a conference for institutional investors and analysts at the Plaza Hotel in New York City on Tuesday, May 19, 2015, from 8:30 a.m. to 12:00 p.m. Eastern Time. A live audio webcast of the presentation will be available online at http://edge.media-server.com/m/p/wway9fka and on RGA’s website at www.rgare.com. Copies of the slides used in the presentation will be available on the company’s web site at www.rgare.com (through the link on the Investor Relations page) and are attached as Exhibit 99.1 and incorporated herein by reference.
The information in this Item 7.01 and the exhibit attached hereto will not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor will such information or exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits. The following documents are filed as exhibits to this report: |
| 99.1 | Copy of slide presentation for RGA 2015 Investor Day | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| REINSURANCE GROUP OF AMERICA, INCORPORATED | ||||
| Date: May 18, 2015 | By: | /s/ Jack B. Lay | ||
| Jack B. Lay | ||||
| Senior Executive Vice President and Chief Financial Officer | ||||
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Copy of slide presentation for RGA 2015 Investor Day | |
| Exhibit 99.1
|
RGA Investor Day 2015
Global Growing Balanced Unique
Jeff Hopson
Senior Vice President, Investor Relations
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Safe Harbor
This presentation 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 strategies, earnings, revenues, income or loss, ratios, 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 the Company’s liquidity, access to capital and cost of capital, (2) the impairment of other financial institutions and its effect on the Company’s business, (3) requirements to post collateral or make payments due to declines in market value of assets subject to the Company’s collateral arrangements, (4) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (5) adverse changes in mortality, morbidity, lapsation or claims experience, (6) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s 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 the Company’s 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 the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities, that in turn could affect regulatory capital, (11) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (12) risks inherent in the Company’s 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 the Company operates, including ongoing uncertainties regarding the amount of United States sovereign debt and the credit ratings thereof, (17) competitive factors and competitors’ responses to the Company’s initiatives, (18) the success of the Company’s clients, (19) successful execution of the Company’s entry into new markets, (20) successful development and introduction of new products and distribution opportunities, (21) the Company’s ability to successfully integrate acquired blocks of business and entities, (22) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (23) the Company’s dependence on third parties, including those insurance companies and reinsurers to
which the Company cedes 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 the Company or its clients do business, (25) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data stored on such systems, (26) changes in laws, regulations, and accounting standards applicable to the Company, its subsidiaries, or its business, (27) the effect of the Company’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, and (28) other risks and uncertainties described in this document and in the Company’s 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 most recent Form 10-K.
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Non-GAAP Measures
RGA uses a non-GAAP financial measure called “operating income” as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs.
Management believes that operating income, on a pre-tax and after-tax basis, better measures the ongoing profitability and underlying trends of the company’s continuing operations because that measure excludes the effects of net realized capital gains and losses, changes in the fair value of certain embedded derivatives and related deferred acquisition costs. These items tend to be highly variable primarily due to the credit market and interest rate environment and are not necessarily indicative of the performance of our underlying businesses. Additionally, operating income excludes any net gain or loss from discontinued operations, which management believes is 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 second non-GAAP financial measure called “operating revenues” is used as a basis for measuring performance and excludes the effects of net realized capital gains and losses, and changes in the fair value of certain embedded derivatives. This financial measure is not considered a substitute for GAAP revenues.
Additionally, the Company evaluates its stockholder equity position excluding the impact of “Other Comprehensive Income.” This is also considered a non-GAAP measure. The Company believes it is important to evaluate its stockholders’ equity position to exclude the effect of Other Comprehensive Income since the net unrealized gains or losses included in Other Comprehensive Income 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.
Reconciliations of non-GAAP measures to the nearest GAAP measures are provided in the Appendix at the end of this presentation.
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Agenda
Opening Remarks Jeff Hopson, Senior Vice President, Investor Relations
Introduction, Strategic Overview A. Greig Woodring, President and Chief Executive Officer
Global Structured Solutions Anna Manning, Senior Executive Vice President, Global Structured Solutions
Global Financial Solutions John P. Laughlin, Executive Vice President, Global Financial Solutions
Global Acquisitions Scott Cochran, Executive Vice President, Global Acquisitions
10-Minute Break
Geographic Overview Alain Néemeh, Senior Executive Vice President, Global Life and Health Markets
Spotlight on Asia Allan O’Bryant, Executive Vice President, Head of Asia Markets
Investments Timothy Matson, Executive Vice President, Chief Investment Officer
Financial Overview Jack Lay, Senior Executive Vice President and Chief Financial Officer
Q&A Session
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RGA Investor Day 2015
Global Growing Balanced Unique
Introduction and Strategic Overview
A. Greig Woodring
President and Chief Executive Officer
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Key Points
RGA is a leading global life reinsurer that is well-positioned in all key markets
RGA has unique strengths and leverages them across the platform
RGA sees abundant opportunities and is executing its strategy
RGA’s goal is to deliver an attractive combination of growth, profitability and shareholder returns
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Results Show the Success of RGA’s Strategy
A very strong 2014 provides good momentum
Solid organic growth; in-force transactions; effective capital management
2015 first quarter is not an indication of full-year potential
International and transactional businesses highlighted 2014 growth
Asia continued to deliver strong organic growth and consistency
EMEA expanded its market presence through innovative solutions
Global Financial Solutions (GFS) and Global Acquisitions (GA) seized opportunities
Embedded value and U.S. retrocession transactions paved new paths
Global operating model working well; balance and diversity in both geography and products
Leveraging skills and capabilities across markets
Diverse sources of earnings by geography, products
Flexibility to put incremental efforts toward best opportunities
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The Evolution of RGA
Geographic and product line expansion over the last 25 years Supporting clients globally through multifaceted relationships Exporting the RGA culture to other markets and products
Exceptional client focus
Deep knowledge, skills and technical expertise
Collaboration and innovation
Major geographic expansion work now complete; focusing on execution of strategy
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The Evolution of RGA – Diversification
1 Geographic
U.S. Canada Australia Asia EMEA Emerging Markets
2 Risk
Mortality Capital-Motivated Reinsurance Morbidity Group Asset Intensive Longevity
3 Business Model
Traditional Business Fee Business Transactional Business (GFS and GA)
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Expanding RGA’s Global Presence
A key component of growth
Europe, Middle East and Africa Asia Pacific Canada
Non-U.S. Premiums % of Total
0% 10% 20% 30% 40% 50%
1992
1993 10%
1994 11%
1995 10%
1996 4% 11%
1997 5% 12%
1998 6% 16%
1999 7% 13%
2000 7% 13%
2001 6% 8% 11%
2002 11% 8% 9%
2003 14% 10% 8%
2004 14% 12% 8%
2005 14% 14% 9%
2006 14% 15% 10%
2007 14% 18% 10%
2008 13% 19% 10% 2009 13% 18% 11% 2010 13% 18% 12%
2011 15% 19% 11%
2012 15% 18% 12%
2013 15% 18% 12%
2014 16% 18% 11%
50%
Non-U.S. Premiums % of Total 45% 45%
42% 43% 41% 42% 43%
40% 37%
30% 31%
22% 22%
20% 17%
13% 15%
12% South Africa
10% Hong Kong United Kingdom South Korea France
Spain Japan Australia Malaysia Mexico Taiwan India China Poland Italy Germany Netherlands U.A.E. Turkey
0% Canada
1992 1994 1995 1996 1997 1998 1999 2002 2005 2006 2007 2008 2009 2011 2013 2014
Year of Office Opening
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How We Got There – Evolution of RGA
Balance and diversity by product
2005
Percent of Revenues
3% 6%
6% Individual Mortality
3% 85%
Group Mortality
Individual Morbidity
9%
Group Morbidity
82%
6% GFS
2010
Percent of Revenues
12% Individual Mortality
74%
7% Group Mortality
7% Individual Morbidity
5% 14%
69% Group Morbidity
12% GFS
2014
Percent of Revenues
14% Individual Mortality
67%
7% Group Mortality
Individual Morbidity
12% 19%
61% Group Morbidity
6%
14% GFS
Year of Product Introductions (Non-Mortality)
1995 1997 1998 1999 2000 2001 2002 2007 2008 2009 2010 2013 2014
Entered capital motivated reinsurance business
First asset intensive business in the U.S.
First capital motivated reinsurance treaty in Japan
Critical illness business in the U.K.
Co-insurance of indexed annuities
LTC in the U.S. market
Impaired annuities in the U.K.
Acquired group reinsurance business from ING
Early state critical illness (ESCI) in Singapore
Wellness
-linked products in Malaysia
First longevity swap in the Netherlands
First group treaty in Australia
Whole life medical products in Taiwan
Critical illness in Korean market
First longevity treaty in Canada
First longevity transaction in the U.K.
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Leading Global Life Reinsurer
Geographic reach
Established market positions Extensive solution set Flexible and opportunistic Able to work across markets
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Established in Key Markets Globally
Canada
Ireland
United Kingdom
Netherlands and Nordics Poland Germany/CEE
France Italy United States T urkey China Japan South Korea Spain/Portugal Taiwan Hong Kong
United Arab Emirates India Singapore Malaysia Bermuda Australia New Zealand Barbados Mexico South Africa Brazil
RGA is a global leader serving multinational and domestic clients in more than 80 countries
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Global Life and Health Reinsurers*
Ranked by 2014 net earned premiums
$ Millions as of December 31, 2014
Rank Reinsurer Net Earned Premiums
1 Munich Re1 12,023
2 Swiss Reinsurance Company 11,212
3 Reinsurance Group of America2 8,670
4 SCOR Global Life Re 6,925
5 Hannover Re 6,578
6 General Re3 3,161
7 China Life Re4 2,989
8 London Life 2,889
9 Assicurazioni Generali 1,743
10 PartnerRe Ltd. 1,222
* These are the preliminary estimates. Final ranking will be released after all companies publish annual results.
1 Does not include Munich Health.
2 Net Premiums.
3 Does not include BHRG.
4 2013 data used. Annual results for 2014 not yet available.
Please note, exchange rate conversions are based on currency rates provided by each company in their Annual Reports. Source: Annual filings for each reinsurer.
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RGA’s Unique Strengths
Leveraged across the global platform
Client focus
Customized delivery of solutions
Support of clients in multiple geographies
Knowledge, skills, technical expertise
Value-added services
Active product development support, notably in emerging markets
Data solutions
Culture of collaboration, innovation
Tenured management team, engaged associates, consistent approach
RGA brand and reputation
History of delivering value
Integrity, commitment, trust, continuity
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RGA’s Unique Strengths
NMG Consulting Studies, Business Capability Index (BCI) – 2014
Market Penetration (%)
100% 90% 80% 70% 60% 50% 40% 30% 30% 20% 10% 0%
Average BCI Score
A B C D E
65 70 75
For the 3rd consecutive year, RGA is the top-rated reinsurer globally
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RGA’s Unique Strengths
Experienced executive management team
Years of Experience
Name Position
In Industry With RGA
A. Greig Woodring President and Chief Executive Officer 40 35
Jack B. Lay Sr. EVP and Chief Financial Officer 23 23
Donna H. Kinnaird Sr. EVP and Chief Operating Officer 31 3
Anna Manning Sr. EVP, Global Structured Solutions 34 8
Alain P. Neemeh Sr. EVP, Global Life and Health Markets 18 18
Paul A. Schuster Sr. EVP, Head of Europe, Middle East and Africa 38 24
Scott D. Cochran EVP, Global Acquisitions 19 10
Todd C. Larson EVP, Global Chief Risk Officer 20 19
John P. Laughlin EVP, Global Financial Solutions 34 20
Allan O’Bryant EVP, Head of Asia Markets 27 5
Paul Nitsou EVP, Global Accounts 29 18
1 Includes experience in life insurance and life reinsurance industries.
2 Includes experience with RGA’s predecessor, the reinsurance division of General American Life Insurance Company.
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RGA’s Opportunities
Focused on execution
Environment is attractive – demand is strong
Regulatory changes, economic uncertainty
Insurance/financial services industry realignment, de-risking
Developing markets – strong growth, low reinsurance penetration
Growing economies, growing wealth, growing reinsurance use
Core protection needs, growing living benefit demand
Mature markets – provide strong cash flow, excess capital, select opportunities
Significant transactional opportunities in the U.S. and EMEA
Increasing reinsurance penetration
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RGA’s Opportunities
Focused on execution
Transactional businesses see continued activity Emerging organic opportunities
Longevity – significant, sustained opportunity; life reinsurers well-positioned
Living benefits – demographically driven
Alternative distribution, delivery, data and analytics, predictive modeling
RGA’s disciplined approach
Pricing, actuarial, financial, ERM
Best practices across products, geographies
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Attractive Investment Opportunity
Strong financial results
Attractive strategic positioning, leading global franchise Diversified source of earnings by geography, product Balanced, effective use of excess capital
Solid Organic Growth + Transactional Opportunities + Capital Management
= Attractive EPS Growth Potential, Total Returns
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What This Means for Investors
Historical total returns vs. global peers
0% 50% 100% 150% 200%
ACE
RGA
SNL P/C
PRU
S&P 500
SNL L/H
Global Reins
AFL
PFG 10
U.S. FIG Years
PFG
SNL L/H
RGA
U.S. FIG
PRU
SNL P/C
Global Reins
S&P 500
AFL
3
ACE Years
ACE
PFG
Global Reins
RGA
S&P 500
SNL P/C
U.S. FIG
SNL L/H
5
PRU
Years
AFL
0% 5% 10% 15% 20% 25%
RGA
SNL U.S. FIG
PFG
SNL P/C
S&P 500
ACE
Global Reins
SNL L/H
PRU
1
AFL Year
1 Source: SNL., All returns reflect pricing as of May 8, 2015.
The SNL Global Reinsurance index includes Munich Re, Swiss Re, Hannover Re and SCOR as significant components, contributing 23.9%, 22.0%, 8.6%, and 4.7% of the index respectively.
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Executing the Strategy Today, Planning for Tomorrow
Building on our practice of looking forward, anticipating and adapting Positioning for the future
Changing life insurance distribution and delivery
Big data, predictive modeling
Trends in life expectancy, health and health care technology
Large mortality block has embedded and strategic value
Evidenced by third-party interest in mortality blocks and expertise
Expertise and insights provide platform for growth in numerous directions
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RGA Investor Day 2015
Global Growing Balanced Unique Global Structured Solutions
Anna Manning
Senior Executive Vice President, Global Structured Solutions
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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RGA’s Transactional Business
Supporting growth and value creation
Key Messages
Strong momentum, healthy pipelines, well-positioned, creating value Transactions are an important part of our business model Transactions leverage our core skills and capabilities
Global Structured Solutions
Global Financial Solutions (GFS)
Global Acquisitions (GA)
Global Analytics & In-Force Management (GAIM)
Global Financial Solutions
Global Businesses
Global
Analytics Global
& In-Force Acquisitions Management
Globally managed while closely integrated with the local business units
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Recent Transactions
Financial Solutions
RGA Partners with Sun Life in Longevity Insurance Transaction
“RGA will reinsure the longevity risks associated with a significant share of a C$5 billion block of pension obligations, ultimately reducing longevity risks for BCE.”
March 3, 2015
Acquisitions
RGA Acquires In-Force Mortality Block from Voya Financial
“This transaction leverages RGA’s deep expertise and understanding of the U.S. mortality market, and aligns well with our disciplined Global Acquisitions strategy.”
August 15, 2014
In-Force Management
RGA Retrocedes Block of U.S. Mortality Business to Pacific Life
“This transaction highlights the attractiveness of mortality blocks to entities with complementary risk profiles.”
December 29, 2014
RGA Partners with Royal London for Life Annuity Risk Transfer
“RGA will reinsure a £1 billion block of annuities comprising approximately 70,000 policies, reducing asset and longevity risks for Royal London.”
May 14, 2014
RGA Acquires Aurora National Life Assurance Company
“We are pleased to announce this transaction which follows our strategy to deploy capital into attractive, closed block opportunities.”
October 21, 2014
RGA Announces Embedded Value Securitization
“We are continually looking for ways to enhance our capital flexibility and efficiency, and this transaction is an attractive option in that regard.”
December 16, 2014
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Environment
Realigning of the financial services industry; de-risking, de-leveraging and consolidating
Increasing regulatory change, both scope and pace
Persisting low interest rates putting pressure on earnings industry-wide Continuing demand for capital and risk management solutions Increasing focus on active in-force management
Change provides fertile ground for transactional opportunities
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Strengths & Opportunities – Transactional Business
Strengths
Client focus
Deep technical and structuring expertise
Strong balance sheet and ratings Long track record of success
Culture of collaboration and innovation
Extensive internal data Brand and reputation
Opportunities
Capital-motivated reinsurance (including Solvency II capital solutions) Redundant reserve financing Longevity, annuity and pension liability risk transfer solutions
Acquisition transactions
Embedded value transactions
Active management of in-force business
We deploy our capital to opportunities of greatest demand and highest risk-adjusted return
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RGA Investor Day 2015
Global Growing Balanced Unique
Global Financial Solutions
John P. Laughlin
Executive Vice President, Global Financial Solutions
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Continued Momentum
Growth opportunities triggered by changing environments
Global Financial Solutions (GFS) has delivered stable, high-quality earnings and superior returns since 1995
Unique strengths support a sustainable competitive advantage
GFS is an important contributor to RGA’s success
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Environmental Change Driving Growth
Growth opportunities triggered by changing environment
Regulatory changes Solvency and accounting changes Low interest rate environment
New opportunities for innovative reinsurance solutions Need for more capital and more stability of capital Demand for long-term biometric protection
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Advantages
Client Focus
Long, deep partnerships across client organizations
Historical understanding of clients’ products and objectives
Strong collaboration and integration with RGA global footprint
Risk Appetite
Robust solution set; ability and willingness to accept and retain biometric and investment risks Consistent, disciplined approach; thorough product and counterparty analysis
Reputation
Long track record of credibility with clients and regulators Execution Dependability, long-term partner Recognized leader in large and complex transactions
Expertise
Seasoned experience (20+ years in many cases) across all regions and products High degree of intellectual capital – risk assessment, risk transfer, structuring and investments
Unique strengths support sustainable competitive advantage
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Senior Management Team
Name Position Years of Experience
In Industry With RGA
John Laughlin EVP, Global Financial Solutions 34 20
David Boettcher EVP & Chief Operating Officer, GFS 32 17
Larry Carson SVP, Chief Actuary 22 17
Dustin Hetzler SVP, Chief Pricing Actuary 22 21
Gary Seifert SVP, North America 26 20
Greg Goodfliesh SVP, Asia Pacific 21 17
Paul Sauvé SVP, Europe, Middle East, Africa 23 9
Hamish Galloway SVP, United Kingdom 28 16
Darlene Desroches VP, Treaties 27 20
Highly experienced team – difficult to replicate
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Financial Results
Strong operating income growth across products and regions Proven track record of consistent and dependable earnings
Above-average returns
Balanced mix of business; important contributor to
RGA’s results
Insurance and structuring expertise is valued by clients and is reflected in higher margins
Large, selective transactions can drive growth rates over time
GFS has delivered stable, high-quality earnings and superior returns since 1995
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Financial Results
All Regions
($ in Millions) Pre-tax Operating Income1
600
500
400
300
200
100
Projection
0
2010 2011 2012 2013 2014 — 2017
US EMEA AP Canada
All Products
($ in Millions) Pre-tax Operating Income1
600
500
400
300
200
100
Projection
0
2010 2011 2012 2013 2014 — 2017
Asset Intensive Capital Motivated Longevity
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Capital-Motivated Reinsurance
Current State
Seasoned experts well-positioned in
North America, Asia and Europe
Leading presence in U.S. and Japan; strong momentum in Europe Pressure on efficient capital management
Deep understanding of clients’ products from decades of reinsuring Significant barriers to entry
Strategies
Expand strategic accounts in developed markets: U.S., Japan and Canada
Continue to implement Solvency II structures in Europe Combine financial structuring expertise with strong local client relationships in targeted markets
Expanding market-leading expertise into targeted global markets
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Capital-Motivated Reinsurance
Key Messages
Broad income growth, balanced across regions Recognized leader in this highly specialized market Intellectual capital is essential due to complexity of transactions Generally a fee-based business for RGA
Recent growth attributable to AXXX/XXX in U.S. and Solvency II in EMEA
($ in Millions) Pre-tax Operating Income1
140
120
100
80
60
40
20
0
2010 2011 2012 2013 2014
US Canada AP EMEA
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Asset Intensive Reinsurance
Current State
High-quality, strong returns; 15-20% returns each of last five years
Strong pricing and risk management skills Ability to review and support all investment products
Doesn’t require distribution force or fixed administration expenses Defined appetite allows selective participation in profitable opportunities Flexibility as economics change
Strategies
Target well-designed products from quality insurers Expand in established markets: U.S., U.K. and Japan Deploy resources into new markets in Asia and Continental Europe Actively manage in-force to maximize profitability Create balanced portfolio of income, risks and duration
Optimally positioned to deliver profitable growth
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Asset Intensive Reinsurance
All Regions
($ in Millions) Pre-tax Operating Income1
250
200
150
100
50
-
2010 2011 2012 2013 2014
US EMEA AP
All Product Categories
($ in Millions) Pre-tax Operating Income1
250
200
150
100
50
-
2010 2011 2012 2013 2014
FA/BOLI FIA VA Other
FA/BOLI – Fixed Annuities/Bank Owned Life Insurance FIA – Fixed Indexed Annuities VA – Variable Annuities Other – Asset Transfer Longevity
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Asset Intensive Business
Impact on 2014 asset intensive pre-tax operating income1
Low Sensitivity to Interest Rate Movements
($ in Millions)
213 216 222
(1%) or ($3M) 3% or $6M
-100 bps 2014 Actual +100 bps
Interest rate shocks applied instantaneously have
immaterial impact on Asset Intensive’s pre-tax
operating income1
Low Sensitivity to Equity Movements
($ in Millions)
216 220
203
(6%) or ($13M) 2% or $4M
-10% 2014 Actual +10%
Equity shocks are also manageable, with slightly higher
sensitivity to the negative shock (applied as one-year
instantaneous shock)
Continued stability under stressed market scenarios
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Longevity
Current State
Leverages RGA’s deep understanding of mortality improvement
Established provider in the U.K. and Canada Solid analytical and risk management expertise
Strong current and projected demand will outpace supply Good diversification of risk and earnings
Strategies
Leverage mortality and structuring expertise into longevity solutions Expand into targeted markets: U.S. and the Netherlands Continued production and profits in established markets Combine Longevity and Asset Intensive solutions
Strong expertise, strong demand and profitable growth
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Longevity
Key Messages
Strong income growth on in-force and new business
Primarily U.K. and Canada to date Executed innovative Netherlands transaction in 2014
Executed large Canadian transaction in first quarter of 2015 Diversification of risk and earnings from mortality
($ in Millions) Pre-tax Operating Income1
90
80
70
60
50
40
30
20
10
0
2010 2011 2012 2013 2014
EMEA Canada
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Summary
Environmental changes generate continued demand across products and geographies
Seasoned expertise coupled with strong client relationships create competitive advantage Strong structuring and biometric capabilities enable broad solution alternatives for clients Continued discipline and selective participation in high-return opportunities where clients value expertise and counterparty
Stable earnings from in-force and new opportunities expected to provide steady profit growth
Environmental Changes + Client Relationships + Seasoned Expertise + Risk Capabilities + Discipline = Continued Growth
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RGA Investor Day 2015
Global Growing Balanced Unique
Global Acquisitions
Scott Cochran
Executive Vice President, Global Acquisitions
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Overview
Strategy is to deploy capital into attractive in-force blocks
Desire to increase in-force block activity compared to RGA’s long history of less frequent acquisitions
Leverages RGA’s strengths in risk assessment, structuring, relationships, investments and market credibility
Activities are integrated and closely aligned with RGA’s other business units
Considerable past, current and expected future dislocation from numerous market and economic pressures Solution set ranges from modest risk and capital relief to full-scale divestiture of businesses Unlike many competitors, RGA seeks a more balanced basket of risks and looks to retain the blocks through their natural expiration
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2014 Results
Key Messages
Approximately $400 million GAAP capital deployed
Transactions closed in 2014 and 2015
2014 activities are providing strong earnings power and market momentum
Differentiated by a combination of the following:
Historical knowledge of underlying businesses
Structuring/capital management
High certainty of closing transactions (e.g., credibility with sellers)
Solid investment strategy without undue risk taking
($ in Millions) GAAP Capital Deployed
450
400
350
300
250
200
150
100
50
0
2010 2011 2012 2013 2014 4/15 YTD
Data shown in year transactions closed
Solid year of capital deployed into attractive opportunities
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Current Environment
Pipeline continues to be attractive and diverse
Market dislocation, such as regulatory change, and strategic realignments leading to continual yet diverse flow of opportunities
North American and European opportunities dominate
Life and annuity blocks
RGA’s approach
Pursue a subset of opportunities based on fit within RGA strategy, risk philosophies, capabilities and competitive positioning Difficult to predict wins in terms of timing, size, market and product lines Flexible in pursuing opportunities alone or with a strategic partner Customized transaction structures benefit seller and RGA
Will continue to be selective and willing to walk away if we can not get to an attractive risk/reward proposition
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Summary
Integrating opportunities won and building on successful 2014
Well-positioned to take advantage of market dislocations while providing value to our clients
Difficult to predict pace and timing of capital deployment; managed closely alongside group capital management
Acquisition strategy is an expected key contributor to RGA’s future growth
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RGA Investor Day 2015
Global Growing Balanced Unique
Global Analytics & In-Force Management
Anna Manning
Senior Executive Vice President, Global Structured Solutions
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Global Analytics & In-Force Management
A comprehensive analytical framework for measuring performance Drives focus and consistency across the organization Leads to improved understanding of key performance drivers Identifies opportunities to enhance risk-adjusted performance
Team works closely with local business units to create solutions to enhance in-force performance
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Enhancing Risk-Adjusted Performance
Phase
Measure
Identify Opportunity
Understand Business Drivers
Execute
Description
Measure relative performance through analytical framework
Framework will lead to identifiable opportunities
Work closely with the local business units and other functions to develop solutions
Execute on the solutions
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Analytical Framework
Performance High Low Maximize Scale Scale Improve Performance Low High Optimize Capital Usage Reform Blocks
Capital Usage
Maximize Scale – overweight, invest, grow
Improve Performance – strategic review, maximize efficiency Improve Capital Usage – optimize capital efficiency Reform Blocks—underweight, rehabilitate, divest
Measure and identify opportunities
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In-Force Management Action
Key Messages
Deep dive of performance of U.S. mortality business (USMM) Relative performance of sub-blocks analyzed Underperforming block and drivers of underperformance identified (USMM ’99—’04) Solutions generated and potential structures evaluated Partners selected, negotiations pursued Transaction executed in late 2014 resulting in capital released from underperforming block, available to be redeployed to attractive opportunities
Before Transaction
Performance High Low USMM Pre-99 USMM 2005+
Total RGA TotalUSMM
USMM 99-04
Low High Capital Usage
After Transaction Assuming Capital Deployed
Performance High Low USMM Pre-99 USMM 2005+
Total RGA Total USMM
USMM 99-04
Low High Capital Usage
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Summary
Applying our analytical performance framework to both in-force and new business to help steer the business
Leveraging our skills and capabilities to create solutions aimed at improving the performance of our business
Improving the alignment of strategy, risk and capital management, and market opportunities
Enhancing returns through timely decisions and management actions
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RGA Investor Day 2015
Global Growing Balanced Unique
Geographic Overview
Alain Néemeh
Senior Executive Vice President, Global Life and Health Markets
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Leveraging Our Successful Global Franchise
Well-established brand
Exceptional at client focus
Leading global underwriting franchise Delivering innovative solutions Common guiding principles
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Status Update
Australia turnaround on target
North America claims
Recently above our expectations
Q1 experience consistent with industry
Growth opportunities around the globe
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Well-Established Brand
Best-in-class capabilities leading to solid market share
2014 New Business
Region 2014 Business
Capability Ranking1 Individual3
Group4
(Premium/Sum Assured)
United States #12 #3 / #2 #2
Canada #1 #2 / #1 #2
EMEA #1 #2 / NA #3
Asia #1 #1 / NA #4
1 2014 business capability as independently assessed by NMG Consulting’s Business Capability Index (globally).
2 U.S. market also ranked #1 by Flaspöhler Research Group.
3 2014 individual ranking by new business premium as provided by NMG Consulting and total production (recurring and in-force) by face amount provided by SOA survey.
4 2014 group ranking by total business premium as provided by NMG Consulting.
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Exceptional Client Focus
Sampling of Worldwide Accolades
“RGA reached out to us and showed what “Excellent product and market research”
value they could add”
“Thanks for partnering with us. Let’s continue to work
“RGA is more innovative on special claims” together to be successful”
“I have confidence that I can work out issues
“Our go-to reinsurer…easy to deal with” because I know the people I am partnering with”
“Great company – standard bearer for other
reinsurers” “RGA is very active in promoting new ideas”
“Terrific client-facing team, very open to helping
us solve our business needs” “RGA is good at coming up with solutions”
“RGA is better in underwriting decisions – first
time around” “Proven itself to be an outstanding partner”
“RGA understands our goals and how to help us “Faster turnaround on claims decisions”
achieve them”
“The premier reinsurer out there. Very friendly. “Continues to offer the best expertise in the industry”
Always willing to help out”
Source: 2014 NMG Consulting and Flaspöhler Research Group.
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Common Guiding Principles
Thinking globally, acting locally
Leveraging our global expertise
Enhancing and refining our product offering
Developing and retaining talent
Striking the right balance between profitable growth and risk management
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Leading Global Underwriting Franchise
Consistently rated highest by independent industry surveys 550,000+ case submissions globally in 2014 In the U.S., ~95% of cases are completed within 24 hours
50+ electronic underwriting installations globally and 40+ active projects In North America, more than $22 billion in facultative production in 2014 > 90,000 monthly client logins to electronic underwriting manual
Technical Expertise Lead Generation Financial Contribution
We are the best in the business We open doors that create opportunities We directly generate revenue for RGA
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Delivering Innovative Solutions
ROSE®
Multifaceted cost savings program
Served 83 clients in 2014
$158M+ client savings since 2004 $79M in approximate RGA savings
Post Level Term
Joint study with the SOA
Expert analysis and advice
Effective in-force management
Improving client cash flows
ASAP®
Immediate decisions on facultative cases
Instant auto-bind with RGA $25B in in-force production
TransUnion ® TRL
Next step towards no exam Underwriting
Click-fee revenue generator
Enhancing risk selection Optimizing in-force business
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U.S. Markets
Key Messages
Client-preferred reinsurer for tenth consecutive year
Well-diversified profit stream GFS contributes a significant share of profits
Individual mortality continues to contribute considerable earnings
Lower investment yields impacting growth
($ in Millions) Operating Revenue1
7,500
6,000
4,500
3,000
1,500
Projection
0
2010 2011 2012 2013 2014 … 2017
US Mortality US Group LTC Latin America GFS
($ in Millions) Pre-Tax Operating Income1
800
600
400
200 Projection
0
2010 2011 2012 2013 2014 … 2017
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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U.S. & Latin America Traditional Quarterly Results
Short-term volatility, long-term value
Pre-tax Operating Income1
($ in Millions) ($ in Millions)
$190
$380
$150
$300
$110
$220
Quarterly $70 $140 Annual
$30 $60
($10) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ($20)
2010 2011 2012 2013 2014
Individual Mortality LTC Group Latin America Annual (right axis)
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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U.S. – Value Embedded in In-force
Key Messages
Sizeable in-force Significant future earnings embedded in the in-force Future new business expected to contribute additional value
Actuarial Liabilities – U.S. GAAP vs. Best Estimate
(In-force as of December 31, 2014)
($ in Billions)
Considerable
projected
future value
$9
$6
$3 $0 2014 2024 2034 2044 2054 2064 2074
Projected Future Value US GAAP Liabilities Best Estimate Liabilities
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U.S. Group
Leadership position in group life and disability
Ranked #1 in BCI in latest NMG survey
21% market share
Key opportunities
Health care reform
Voluntary market
Value added services
Leveraging capabilities and relationships
Cross-selling with Individual Mortality and GFS
De-facto global leader as we expand group businesses internationally
Annually renewable business permits active management
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U.S. Long-Term Care
Primary market is evolving
RGA entered the business in 2007
Focused on new business, no legacy blocks Comfortable with our reserve levels Continue to evaluate emerging product designs
Lower inflation acts as a hedge against sustained low interest rates
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Canada
Key Messages
#1 in NMG BCI since 2007 Leading individual recurring new business market share by face amount for 8 consecutive years Strategic and disciplined diversification
Recent claims experience largely driven by severity following outperformance 9 of the last 13 years
Operating Revenue1
($ in Millions)
1,800
1,500
1,200
900
600
300
Projection
0
2010 2011 2012 2013 2014 … 2017
Individual Life Group Creditor Group Life & Health Individual Living Benefits Longevity
Pre-Tax Operating Income1
($ in Millions)
250
200
150
100
50
Projection
0
2010 2011 2012 2013 2014 … 2017
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Canada – Value Embedded in In-force
Key Messages
Sizeable in-force
Significant future earnings embedded in the in-force
Future new business expected to contribute additional value
Actuarial Liabilities – U.S. GAAP vs. Best Estimate
(In-force as of December 31, 2014)
($ in Billions)
$ 6
Considerable projected
future value
$ 3
$ 0
2013 2023 2033 2043 2053 2063 2073 2083
Projected Future Value US GAAP Liabilities Best Estimate Liabilities
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EMEA
Key Messages
#1 or #2 in NMG BCI ranking for each of the five largest European markets and South Africa GFS and GA transactional business leveraging our European footprint
Continuing to strengthen our brand as the client-focused and biometric experts
($ in Millions) Operating Revenue1
3,000
2,500
2,000
1,500
1,000
500
Projection
0
2010 2011 2012 2013 2014 … 2017
Traditional Non-Traditional
Pre-Tax Operating Income1
($ in Millions)
280
240
200
160
120
80
40
Projection
0
2010 2011 2012 2013 2014 … 2017
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Australia
Key Messages
Turnaround on target
Optimizing inforce profitability
Repricing continues
Committed to claims paradigm shift
Pursuing sustainable products
Selectively considering new group opportunities
Comfortable with current reserves
Claims and IBNR are lumpy; expecting quarterly volatility
Early days of industry rationalization
($ in Millions) Operating Revenue1
1,500
1,000
500
Projection
0
2010 2011 2012 2013 2014 … 2017
($ in Millions) Pre-Tax Operating Income1
50
0
2010 2011 2012 2013 2014 … 2017
-50
-100
-350
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Recent Articles in the Australian Press
Chance for insurance industry to get its house in order
“It has become clear through a series of reviews that reform in the sector is needed”
“It is up to the industry now to restore public confidence before time for industry leadership runs out.”
Federal Assistant treasurer
8 April 2015
“Centrepoint Alliance drops upfront commissions for life insurance”
Australian Financial Review
30 April 2015
AMP First Insurer to Mandate Commission Reduction
AMP will cap the commission payable (…) to all advisers, (…) reducing upfront commission to 80% with an ongoing commission of 20%. riskinfo, 29 April 2015
APRA Points to Group Life Structural Issues
“The Australian Prudential Regulation Authority
(APRA) has warned life companies that simply lifting group insurance premiums will not succeed in addressing the core structural issues impacting the industry.”
Super Review, 6 January 2015
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Summary
Executing on our Australia strategy; turnaround on target
North American businesses will continue to be important contributors of cash flow and value
Global platform providing for growth and diversification
Our brand has never been stronger
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RGA Investor Day 2015
Global Growing Balanced Unique
Asia
Allan O’Bryant
Executive Vice President, Head of Asia Markets
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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|
Key Points
RGA has a leading franchise in the region
The Asian market is attractive and RGA has an effective strategy in place
Asia is expected to continue to be a significant opportunity for RGA in terms of growth and profitability
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Market Environment
Middle class in emerging and maturing markets is expanding as personal wealth is increasing Strong growth in life and health markets creates demand for new and expanded line of products Low reinsurance penetration in mature markets, but recognition of the benefits of reinsurance is growing Increasing interest in protection, living benefits and high net worth products GFS market in Japan and Hong Kong continues to grow
Strong growth dynamics in Asia
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RGA in Asia
Operations commenced in 1994 6 offices plus joint venture in Malaysia
Hong Kong and Southeast Asia – serves Hong Kong, Singapore, Malaysia, Thailand, Indonesia, Philippines, Vietnam
Taiwan
Korea
Japan
India (including Sri Lanka)
China
Strong local teams and decentralized management “push decisions to where the knowledge is”
More than 350 employees – largest life reinsurance operation in Asia
China
Korea Hong Kong
Japan Thailand
India Taiwan Philippines Malaysia JV MLRe
Vietnam Singapore
Indonesia
Australia
New Zealand
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Market Share – Asia (incl. China)
Estimated Market Size and Shares – Individual and Group (Anticipated contestable cessions to 31 December 2015)
Contestable Individual New Cessions Asia
15% 6% 7% 7% 9% 14% 17% RGA24%
Contestable Group Total Cessions Asia
15% 4% 4% 7% 9% RGA10% 12% 16% 24%
RGA Local Foreign Others
Note that the figures provided are derived from insurer estimates drawn from a sample of 275 companies in Asia. The projection reflects the expectations of the insurance executives at a point in time with regards to the their reinsurance arrangements and the growth in their underlying business. [Source NMG Consulting.]
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Market Share – Asia (excl. China)
Estimated Market Size and Shares – Individual and Group (Anticipated contestable cessions to 31 December 2015)
Contestable Individual New Cessions Asia (ex-China)
12% 6% 6% 7% 9% 13% 17% RGA29%
Contestable Group Total Cessions Asia (ex-China)
15% 4% 4% 7% 8% 11% 13% 21% RGA22%
RGA Local Foreign Others
Note that the figures provided are derived from insurer estimates drawn from a sample of 275 companies in Asia. The projection reflects the expectations of the insurance executives at a point in time with regards to the their reinsurance arrangements and the growth in their underlying business. [Source NMG Consulting.]
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Asia Highlights
Key Messages
Flexible platform drives biometric success in mature and emerging markets Customer focus, product innovation and proactivity position RGA as the leading innovator, resulting in high profit margins Claims experience better than expected Avoiding commodity products maximizes returns RGA was ranked #1 in Business Capability Index
(BCI) in the Asia region in NMG Consulting’s
2014 regional and national studies of ceding companies
2014 Revenue
Financial Solutions 7% Group 8%
Living Benefits Life 13% 50%
Critical Illness 22%
Market leader with strong franchise
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Business Highlights
Korea
Commitment to serve clients during the product development process and after launch is creating a strong pipeline of opportunities
12 new specialized products launched
Japan
Underwriting expertise provides springboard for additional services and fosters new automatic treaties and Advantage Programs
The facultative leader in the market
China
Branch license; developing a strong team; approach is patient and prudent
Shanghai Branch opening
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Business Highlights
Hong Kong & SE Asia
RGA continues to deliver award-winning products and leadership in the high net worth market; the Hong Kong team widely viewed as integral to clients’ product development success
Developing award-winning products
India
Growth continues to exceed expectations due to RGA’s flexible delivery of solutions to the market despite regulatory changes and heavy market restrictions on distribution
Risk scoring matrix developed
Taiwan
Leveraged product development lessons learned in the region and launched two new product lines
Won the first senior cancer product
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Near-Term Opportunities
Strength of brand leading to continued opportunities, particularly in the areas of product development, specialized underwriting programs and high net worth
Award-winning new products support the industry, their distribution networks and market growth throughout region
Reputation for outstanding execution leads to sustaining cycle of product development and high net worth opportunities
Well positioned to grow GFS; teams are well integrated
Support multinational clients in the markets where they do business
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Near-Term Opportunities
Product
Country Traditional GFS
Development
Japan
Hong Kong &
SE Asia
Korea
Taiwan
China
India
Well-positioned in all markets
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Asia – A Significant Opportunity
Key Messages
Persistency of existing treaties support growth projections Innovation and pricing discipline lead to solid pipeline of new business opportunities New innovations continue to focus on client needs for products, underwriting solutions and capital management Favorable claims experience on high net worth, new products and Advantage Programs Sound margins allow for re-investment to increase our dominant market position
Operating Revenue1
($ in Millions)
1,500
1,250
1,000
750
500
250
Projection
0
2010 2011 2012 2013 2014 2017
Pre-Tax Operating Income1
Non-Traditional
Traditional
($ in Millions)
200
150
100
50
Projection
0
2010 2011 2012 2013 2014 … 2017
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Summary
Leading franchise in the region
Healthy underlying economics and market dynamics leading to growth opportunities in under-penetrated markets
Acknowledged leadership in product development and underwriting solutions
Known reputation for strong execution and leading edge innovations
Optimizing RGA’s global strengths by applying worldwide innovations and experience locally, aligning the best people to the right opportunities
Integrated approach of combining Traditional and GFS expertise to develop client solutions
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RGA Investor Day 2015
Global Growing Balanced Unique
Investments
Timothy Matson
Executive Vice President, Chief Investment Officer
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
|
|
Role of Investments Within RGA
Investments function manages assets for in-force businesses and helps price/structure new business opportunities Three key long-term objectives:
Manage balance sheet strength and investment income
Support business segments on new transaction flow
Enhance investment platform
Target
Best-in-class investment operation specializing in insurance-related activities
Third-party asset manager quality in all that we do, as well as mastery of capital, financial reporting and regulatory issues
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RGA’s Investment Philosophy
Achieve superior risk-adjusted returns relative to liabilities Maintain a diversified portfolio Take an agnostic approach to manager selection
Use both internal and external investment managers
Access best-in-class external managers; best long-term track record
Take advantage of scale and lower costs where opportunities exist
Gain flexibility as asset allocation or business mix change
Avoid frequent trading to minimize costs
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Manage Balance Sheet Strength and Income
St. Louis-based investment team
Manages investment grade credit, RMBS/CMBS, some alternatives (private equity funds/co-investments and mezzanine debt); 60 staff
Commercial mortgage group originates and services loans in the U.S. and Canada from six regional offices; 30 staff
London-based investment team
Manages investment-grade sterling and euro portfolios; five staff
External managers for domestic and international portfolios
Utilize top-tier, third-party managers for specialty asset classes
Eight managers cover domestic and emerging markets high-yield, senior bank loans and RMBS
Seven managers cover local currency portfolios in Canada, U.K., Australia, Korea and South Africa
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Support RGA Business Segments
Work closely with businesses to develop investment strategies that contribute to new business development
John Hancock
Voya
Aurora
Royal London
Active involvement in capital markets through in-force management aids in solutions capability, perspective and creativity
Ultimately create an environment where Investments not only finds asset solutions for liabilities, but also seeks liability solutions for assets
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New Business Development – Investment Process
Current RGA Target Plan and
Results Portfolio Strategy Execute
Portfolio interest rate
Evaluate new assets
Macro economic
Consolidated portfolio profile and liabilities outlook with desired
Credit risk position
Customize portfolio to
Interest rates characteristics cash flow match the
Credit spreads
Target portfolio fully
Asset allocation limits liabilities
Liquidity repositioned to achieve
Individual issuer
Asset class
Develop investment target quality, yield, exposure expectations guidelines and cash flow
Portfolio cash flows
Availability of bonds objectives
Assess impact on the Liability profile and Ratings expectations Robust performance consolidated portfolio potential cash flow Time execution to lock measurement needs Capital requirements in transaction
Capture ongoing and fit with RGA’s long
Rating distribution and economics opportunities for term strategic plan capital required portfolio enhancement Reposition target portfolio
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New Business Development – Key Differentiators
John Hancock Deferred Annuity Reinsurance Treaty
Deep real estate and credit expertise allowed RGA to effectively underwrite $1 billion of commercial mortgage loans (100 loans) and $450 million in private placements (50 issuers) acquired from JH
Voya Level Term Reinsurance Treaty
Investment policy expertise and flexibility allowed for effective negotiations to achieve mutual agreement for benefit of RGA and Voya
Aurora Legal Entity Acquisition
Expertise in capital market solutions enabled RGA to lock-in the economics of the deal early
Created customized solution to manage RGA’s risks while achieving various stakeholders’ objectives
Royal London Reinsurance Treaty
Strong internal collaboration allowed for thorough understanding of liabilities
Leveraged relationship with external manager to quickly execute repositioning strategy
New Asset Classes
Effectively utilized new asset classes and strategies to support new transaction liability characteristics
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Enhance RGA’s Investment Platform
Expanded credit staff, documented credit analysis process, and designed training program for new credit staff
Capture beta from investment-grade corporate bonds and minimize downside
Build strong credit culture
Develop staff for other asset classes
Commercial mortgage group becoming “brand name” manager with third-party asset management qualifications
Group has achieved critical mass to compete in market
Expect third-party capability by year-end
Developing mezzanine lending as a core competency
Leverage relationships with transaction sponsors
Reduce reliance on funds and associated management expense
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Identification of Key Metrics
Investment performance
Meet or exceed plan projection for net earned book yield
Total return measures – employ where needed
Cost structure
Target asset management expense/AUM of less than 10 basis points
Realized gain/loss
Low turnover commensurate with book yield approach
Compliance breaches
Expect 0%
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Asset Allocation
March 31 2015 (Book Value)
Total
($ in Thousands) Total U.S. Grand Total
International
Market Value $ 24,334,985 $ 11,024,739 $ 35,359,724
Book Value $ 22,685,265 $ 9,068,449 $ 31,753,714
Cash & Short Term 0.1% 2.9% 0.9%
Treasuries 1.5% 6.3% 2.9%
Other Government 2.3% 37.2% 12.2%
Municipal 6.0% 0.3% 4.4%
Corporate IG 37.5% 44.2% 39.4%
Corporate HY 3.0% 0.5% 2.3%
EMD IG 4.8% 3.5% 4.4%
EMD HY 1.4% 0.0% 1.0%
Bank Loan 1.5% 0.0% 1.1%
Hybrid 2.5% 1.5% 2.2%
ABS 7.0% 1.7% 5.5%
Agency MBS/CMO 4.0% 0.2% 2.9%
Non-Agency MBS/CMO 1.7% 0.1% 1.3%
CMBS 7.7% 0.7% 5.7%
CML 13.4% 0.1% 9.6%
Equity Real Estate 0.6% 0.0% 0.4%
Private Placement 3.4% 0.7% 2.7%
Alternatives 1.5% 0.1% 1.1%
Total 100% 100% 100%
Well-diversified portfolio
Investment Policy Statements define limits by asset type and issuer
Illiquid assets below policy limits
Allocations vs. Peers
No significant allocation differences
Higher foreign government exposure due to asset mix in Canada operation
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Credit Rating Distribution
Credit rating distribution
Average rating has been stable
Rating distribution has been stable
Distribution vs. peers
No significant difference with regard to peers
Excludes credit tenant loans, as most are rated by NRSRO and included in ratings above.
Notes: Includes asset-intensive funds withheld assets.
Excludes policy loans, other funds withheld assets, affiliated securities, derivatives, liability derivative portfolios and accrued interest
As of March 31, 2015 RGA Investments managed derivatives including credit default swaps, both single name and index, with total notional value of $870.7 million, market value of $9.5 million.
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Currency Distribution
CAD
AUD GBP
JPY EUR
Other
USD
Assets and liabilities are largely matched by currency Internal currency committee regularly monitors currency risks Some currency hedges in place to mitigate risk
($ in Thousands) March 31, 2015
Currency Market Value Percentage
USD $ 25,960,763 73.4%
CAD 4,922,714 13.9%
GBP 2,489,903 7.0%
AUD 971,077 2.8%
JPY 355,495 1.0%
EUR 335,416 1.0%
Other 324,356 0.9%
Total $ 35,359,724 100%
Total $35,359,724 100%
Notes: Includes asset-intensive funds withheld assets.
Excludes policy loans, other funds withheld assets, affiliated securities, derivatives, liability derivative portfolios and accrued interest.
As of March 31, 2015 RGA Investments managed derivatives including credit default swaps, both single name and index, with total notional value of $870.7 million, market value of $9.5 million.
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Commercial Mortgage Portfolio
Rating Distribution
(Book Value Basis)
C1 & C2 D1 & D2
3% 1% B2 A1
14%
22%
B1
33%
A2
27%
Property Type
(Book Value Basis)
OTHER HOTEL
7% 1% MULTI FAMILY
OFFICE 14% 32% INDUSTRIAL
16%
RETAIL 30%
By Region
30% 25% 20% 15% 10% 5% 0%
RGA ACLI
ACLI Regions
New Pacific England West North Middle Central Mountain Atlantic East North Central
East South South Atlantic West South Central Central
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Alternative Investments
As of March 31, 2015 Estimated Market
($ in Thousands) Book Value % of Total % of Total
Category Value
Private Equity Funds $135,511 27.9% $ 161,686 29.6%
Private Debt Funds 130,160 26.8% 132,953 24.4%
Direct Private Debt & Equity 66,604 13.7% 68,640 12.6%
Other Funds 9,215 1.9% 10,353 1.9%
Total Private Debt & Equity $341,490 70.3% $ 373,632 68.5%
Real Estate Investments 144,051 29.7% 172,001 31.5%
Total $485,541 100% $ 545,633 100%
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Investment Risk Management
Staff headed by mathematics Ph.D. with CFA/FSA/FRM designations
Deep quantitative background, years of financial industry experience, and CFA designation achieved or pending
Equipped with BlackRock’s Aladdin risk and analytics systems and supported with proprietary risk analysis, monitoring and reporting tools
Produce standard risk measures (e.g., WARF, spread VAR, PBEC, key rate durations) and proprietary stress tests
Actively monitor emerging risks, engage in risk discussions across the investment team, and think “out of the box” to find unexpected correlations
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Important Steps over Next Three Years
Improve efficiency
Enhance ability to price and execute deals on tight timeframes
Drive total asset management expenses to less than 10 basis points
Develop reputation as a best-in-class asset manager
Key for business development
Important to attract and retain top-level talent
Provide third-party asset management where appropriate
Enhance stability and scalability of investment technology platform
Improve data integrity and functionally for all applications
Enable more activity, such as third-party asset management and tailored solutions for block transactions
Continue automation of back-office activities
Build out investment platform in Asia Pacific region
Fastest-growing geographic region
Local presence for transaction support
Enhance asset management capabilities
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Financial Overview
RGA Investor Day 2015
Global Growing Balanced Unique
Jack B. Lay
Senior Executive Vice President and Chief Financial Officer
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Financial Overview
RGA’s Track Record – Strong Financial Results
Capital Management
Enterprise Risk Management
Attractive Investor Opportunity
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RGA’s Track Record –
Strong Financial Results
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Strong Financial History
5-Year Premium /
5-Year Average 5-Year Operating 1 5-Year BVPS
1 1 Operating Revenue 1
Operating ROE EPS CAGR (ex-AOCI) CAGR CAGR
11.3% 10.6% 8.7% / 8.9% 11.2%
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Strong Operating Revenue1 Growth
($ Millions)
Key Messages 12,000
Consistent growth 10,000
Ongoing headwinds from lower interest rates 8,000
Strong revenue growth in some
6,000
markets; adequate growth in others
Operating revenues1 expected to 4,000 grow 4% – 7% in the intermediate
term 2,000
2010 2011 2012 2013 2014
Premiums Other Revenues
Reflects strong organic growth
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Operating Income per Diluted Share1
Key Messages $12.00
Long track record of producing $10.00
$9.12
strong earnings
$8.00 2
2014 results were unusually strong $7.48
$6.55 $6.96
in part due to FIN48 tax effects and $6.23
$6.00
asset prepayments
$4.95
Intermediate projected growth rate $4.00 assumes continued low interest rate environment $2.00
Projection $0.00 2010 2011 2012 2013 2014 … 2017
Operating ROE1 13% 12% 12% 7% 13% 11%-12%
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
2 Full bar excludes 2Q13 Australia reserve strengthening.
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Operating Return on Equity1
Successful track record despite lower rate environment
Key Messages
14.0% 5-year average
2013 reflects significant charge in 12.0%
11.3%
Australian operation
10.0%
Intermediate target: 11%—12%
Reflects ongoing headwinds from 8.0% lower interest rates and generally 6.0% stronger U.S. dollar
4.0%
Potential future tailwinds
2.0%
Higher interest rates
Growth of international businesses 0.0%
2010 2011 2012 2013 2014
Effective capital management
Continued execution of in-force blocks
Industry recovery in Australia
1 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Long Track Record of Success
Book value per share (ex-AOCI)1
$78.03
$69.66
$64.95
$57.25
$52.80
$45.86
$40.36 $41.01
$36.59
$34.06
$31.08
4Q04 4Q05 4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14
1 Book value excludes other comprehensive income. Periods prior to 4Q06 not restated for 2012 DAC accounting change. Please refer to “Reconciliations of Non-GAAP
Measures” in the Appendix.
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Book Value Growth Ranking – Last Five Years1
Book value per share (ex-AOCI) total return growth2
%
16 14 12
10 RGA
8 6 4 2 0 -2 -4
1 CAGR growth of book value plus dividends. 2009-2014
Source: SNL. This group represents all companies in the SNL U.S. Life/Health index that were publicly traded over the period and which represent at least 1% of the index, and includes (in alphabetical order): AEL, AFL, AIZ, CNO, GNW, MET, LNC, PFG, PL, PRU, SYA, SFG, TMK, UNM.
2 Please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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RGA
Capital Management
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Capital Management Principles
Strength
Efficient
Balance Capital Flexibility
Management
Efficiency
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Capital Management
Strength
Solvency
Strong balance sheet, capitalization
Strong credit and financial strength ratings
Liquidity
Holding company funds: approximately $500 million at March 31, 2015
Target minimum: $300 million
Consolidated excess capital at March 31, 2015
$800 million (reflects April 1 deployment for Aurora National acquisition)
Target cushion: $300 million—$500 million
Expect to generate $300+ million annually
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Capital Management
Flexibility
Excess capital cushion available to fund attractive opportunities
Proven ability to raise capital
Strong track record of accessing traditional capital markets
Executed additional capital-generating transactions in 2014
Embedded-value securitization: $300 million generated capital o Mortality retrocession: $170 million generated capital
Ongoing assessment of shareholder dividend levels, opportunistic share repurchases and block acquisition deployments
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Capital Management
Efficiency
March 31, 2015 capitalization $7.6 billion1
Current Capital Structure Strategy
Maintain an efficient, appropriate mix of capital Excess
Access debt and hybrid markets periodically to Capital ladder maturities, minimize cost of capital and
11%
Hybrid increase liquidity
Capital 9%
Deploy capital in a disciplined manner over time
Shareholders’
Equity
Maintain coverage and leverage ratios within
(ex-AOCI)
Debt 59% target limits
21%
Consider various in-force management transactions
1 Excludes accumulated other comprehensive income; please refer to “Reconciliations of Non-GAAP Measures” in the Appendix.
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Capital Management – Efficiency (cont.)
Efficient laddering of debt and hybrid securities (schedule of maturities)
($ in Millions) 450
400
350
300 2022 2015 in
250 in
200 rate floating—rate rate rate floating to -
150—to Fixed—Fixed Fixed Fixed Fixed 100 Fixed 625% 45% 00% 70% 2% . 5 . . . 4 6 .
50 6 5 75% 6 .
0
2017 2018 2019 2020 2021 2022 2023 2042 2065
Senior Notes Hybrid Securities
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Capital Management
Balance
Capital management strategy affords balanced approach; considers opportunities to deploy or return excess capital
Well-demonstrated in 2014
Capital deployed into block opportunities: $195 million o Capital returned: $286 million
Preference to deploy capital in support of business opportunities / block acquisitions
Balanced objective to continue building the inherent value of the enterprise and provide attractive returns
Multiple liquidity sources for holding company needs and operating entity needs
Continue to meet capital-related expectations of shareholders, bondholders, regulators and rating agencies
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Capital Management
Balance
Dividend Payout Ratio
%
25
20
15
Industry Average 10 RGA
5
0
2009 2010 2011 2012 2013 2014
Total Payout Ratio
%
80 70 60 50
40 Industry Average
30 RGA
20
10
0
2010 2011 2012 2013 2014
Source: SNL
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Excess Capital – 2014 Roll-Forward
($ in Millions)
$2,000
$1,800
$1,600 ($269) $470 $1,400 ($198)
($87) $1,200
$1,000 $684 $1,200 $800
$600
$400 $600
$200
$0
2013 Generated Capital—Generated Capital—Deployed Capital Share Repurchases Shareholder Dividends 2014 Earnings Transactions
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Deployment of Excess Capital
($ in Millions) $500 $450 $400 $350 $300 $250 $200 $150 $100 $50
$0
2010 2011 2012 2013 2014 1Q15 Block Acquisitions Share Repurchases
2011: Excludes shares repurchased in association with the redemption of convertible securities. 1Q15: Includes acquisition of Aurora National, which closed April 1, 2015.
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Enterprise Risk Management
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Enterprise Risk Management
Formal ERM function
Quarterly risk reporting at all levels of management, including to the Board
Clear risk tolerances and limits control RGA’s risk exposures
Stress testing identifies potential threats to the company’s strategy
RGA’s risk exposures have become more diversified over time
Insurance, credit, market, operating
Regulatory risk – RGA has demonstrated its ability to adapt to regulatory change
Quarterly earnings volatility by line is not uncommon given the nature of our business
Tempered by enterprise-wide diversification
Tends to even out over longer time periods
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Attractive Investment Opportunity
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Attractive Investment Opportunity – Long-Term
Top three positioning in worldwide life reinsurance markets
International footprint complete – coverage of all important geographic markets
Expertise across the risk transfer spectrum (mortality, morbidity, longevity, structuring for regulatory compliance, etc.)
Expanding source of earnings by geography, product and structure
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Attractive Investment Opportunity – Short-Term
Good momentum following a strong 2014
Expected 5%—8% annual EPS growth rate over the intermediate term; 11%—12% annual operating ROE
Solid organic growth; environment for in-force blocks is favorable
Near-term headwinds from lower interest rates, foreign exchange
Excess capital position affords flexibility
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Key Points
RGA is a leading global life reinsurer that is well-positioned in all key markets
RGA’s goal is to deliver an attractive
RGA has unique strengths and leverages them combination of
across the platform growth, profitability and shareholder returns
RGA sees abundant opportunities and is executing its strategy
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RGA Investor Day 2015
Global Growing Balanced Unique
Appendix
Non-GAAP Reconciliations
Reinsurance Group of America, Incorporated | Tuesday, May 19, 2015
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Non-GAAP Reconciliations
($ in Millions)
U.S. & LATIN AMERICA TRADITIONAL
2010 2011 2012 2013 2014 GAAP Revenue 4,310.9 4,553.4 4,882.0 5,115.9 5,283.3 Realized Capital (Gains) / Losses (25.1) (41.8) 0.3 (3.0) (4.5) Change in MV of Embedded Derivatives — (2.4) 2.0 (1.9) 3.1 Operating Revenue 4,285.8 4,509.2 4,884.3 5,111.0 5,281.9
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 380.8 367.2 374.4 377.6 351.6 Realized Capital (Gains) / Losses (25.1) (41.8) 0.3 (3.0) (4.5) Change in MV of Embedded Derivatives (1) 0.0 (2.4) 2.0 (1.9) 3.1
Pre-tax Operating Income 355.7 323.0 376.7 372.7 350.2
TOTAL U.S. & LATIN AMERICA
2010 2011 2012 2013 2014 GAAP Revenue 4,966.4 4,915.1 5,722.6 6,031.5 6,297.4 Realized Capital (Gains) / Losses (80.7) (253.2) 3.7 154.1 (95.3) Change in MV of Embedded Derivatives (131.5) 311.4 (219.6) (212.2) (69.1) Operating Revenue 4,754.2 4,973.3 5,506.7 5,973.4 6,133.0
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 529.2 428.9 642.7 623.2 654.6 Realized Capital (Gains) / Losses (59.9) (84.0) (80.3) 128.3 56.6 Change in MV of Embedded Derivatives (1) (30.7) 74.7 (43.7) (167.1) (109.6)
Pre-tax Operating Income 438.6 419.6 518.7 584.4 601.6
GFS—ASSET-INTENSIVE
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 135.5 26.8 231.9 192.5 274.9 Realized Capital (Gains) / Losses (1) (31.0) (4.5) (67.3) 23.1 (14.1) Change in MV of Embedded Derivatives (1) (36.5) 41.1 (57.5) (46.0) (44.9)
Pre-tax Operating Income 68.0 63.4 107.1 169.6 215.9
(1) Net of DAC offset
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Non-GAAP Reconciliations
($ in Millions)
GFS—CAPITAL MOTIVATED REINSURANCE
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 34.6 48.4 57.3 78.5 90.9 Realized Capital (Gains) / Losses 0.1 0.1 0.2 0.4 0.3 Pre-tax Operating Income 34.7 48.5 57.5 78.9 91.2
GFS—LONGEVITY REINSURANCE
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 11.6 15.8 14.4 32.9 55.6 Realized Capital (Gains) / Losses (1) 0.0 (0.4) (0.6) (0.1) (1.7) Pre-tax Operating Income 11.6 15.4 13.8 32.8 53.9
TOTAL GFS
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 181.7 91.0 303.6 303.9 421.4 Realized Capital (Gains) / Losses (1) (30.9) (4.8) (67.7) 23.4 (15.5) Change in MV of Embedded Derivatives (1) (36.5) 41.1 (57.5) (46.0) (44.9)
Pre-tax Operating Income 114.3 127.3 178.4 281.3 361.0
(1) Net of DAC offset
CANADA OPERATIONS
2010 2011 2012 2013 2014 GAAP Revenue 980.2 1,056.0 1,140.3 1,185.0 1,181.9 Realized Capital (Gains) / Losses (8.7) (21.8) (27.6) (16.6) (3.2) Change in MV of Embedded Derivatives — — — — -Operating Revenue 971.5 1,034.2 1,112.7 1,168.4 1,178.7
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 121.7 165.0 187.0 164.3 101.7 Realized Capital (Gains) / Losses (8.7) (21.8) (27.7) (16.6) (3.2)
Change in MV of Embedded Derivatives (1) — — — — -
Pre-tax Operating Income 113.0 143.2 159.3 147.7 98.5
(1) Net of DAC offset
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Non-GAAP Reconciliations
($ in Millions)
EUROPE, MIDDLE EAST & AFRICA OPERATIONS
2010 2011 2012 2013 2014 GAAP Revenue 893.7 1,161.5 1,275.1 1,305.0 1,557.8 Realized Capital (Gains) / Losses (1.9) (5.9) (11.1) (3.5) (24.7) Change in MV of Embedded Derivatives — — — — -Loss on Non-investment Derivatives — — — — (0.5) Operating Revenue 891.8 1,155.6 1,264.0 1,301.5 1,532.6
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 62.0 69.3 61.0 74.6 161.6 Realized Capital (Gains) / Losses (1.9) (5.9) (11.1) (3.5) (24.7)
Non-investment derivatives — — — —(0.5)
Pre-tax Operating Income 60.1 63.4 49.9 71.1 136.4
ASIA-PACIFIC OPERATIONS
2010 2011 2012 2013 2014 GAAP Revenue 1,281.7 1,488.1 1,557.3 1,610.6 1,756.7 Realized Capital (Gains) / Losses (5.4) (3.1) (8.4) 8.3 4.4 Change in MV of Embedded Derivatives — — — — -Operating Revenue 1,276.3 1,485.0 1,548.9 1,618.9 1,761.1
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 80.9 52.7 52.0 (226.6) 102.3 Realized Capital (Gains) / Losses (5.4) (3.2) (8.4) 8.3 4.4
Pre-tax Operating Income 75.5 49.5 43.6 (218.3) 106.7
AUSTRALIA
2010 2011 2012 2013 2014 Australia GAAP Revenue 642.2 810.2 844.7 875.4 890.4 Asia (ex Australia) GAAP Revenue 634.1 674.8 704.2 743.5 870.7 Asia-Pacific GAAP Revenue 1,276.3 1,485.0 1,548.9 1,618.9 1,761.1
2010 2011 2012 2013 2014 Australia Pre-tax Operating Income 22.4 (11.8) (32.7) (302.5) (8.9) Asia (ex Australia) Pre-tax Operating Income 53.1 61.3 76.3 84.2 115.6 Asia-Pacific Pre-tax Operating Income 75.5 49.5 43.6 (218.3) 106.7
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Non-GAAP Reconciliations
($ in Millions)
CORPORATE & OTHER SEGMENT
2010 2011 2012 2013 2014 GAAP Revenue 111.4 178.1 110.2 138.8 110.4 Realized Capital (Gains) / Losses (0.1) 13.3 (2.1) 6.5 10.3 Change in MV of Embedded Derivatives — — — — -Gain on Debt Repurchase — (65.6) — (46.5) -Loss on Non-investment Derivatives — — — — 0.1
Operating Revenue 111.3 125.8 108.1 98.8 120.8
2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 12.4 47.7 (23.5) (0.2) (11.7) Realized Capital (Gains) / Losses (0.2) 13.4 (2.0) 6.4 10.3
Less Goodwill Write-off — — — — -Gain on Debt Repurchase — (65.6) — (46.5) -Loss on Retirement of PIERS — 4.4 — — -Non-investment derivatives — — — — 0.1
Pre-tax Operating Income 12.2 (0.1) (25.5) (40.3) (1.3)
RGA CONSOLIDATED
2009 2010 2011 2012 2013 2014 GAAP Revenue 7,066.8 8,261.7 8,829.5 9,840.9 10,318.3 10,904.2
Realized Capital (Gains) / Losses 303.4 (97.1) (270.8) (45.6) 148.7 (108.5) Change in MV of Embedded Derivatives (331.1) (131.5) 311.4 (219.6) (212.2) (69.1) Gain on Debt Repurchase (38.9) — (65.6) — (46.5) -2014 Loss on Non-investment Derivatives — — — — — (0.4)
Operating Revenue 7,000.2 8,033.1 8,804.5 9,575.7 10,208.3 10,726.2
2009 2010 2011 2012 2013 2014 GAAP Pre-Tax Income—Cont Ops 540.6 806.2 763.6 919.2 635.3 1,008.5 Realized Capital (Gains) / Losses (1) 69.3 (76.1) (101.5) (129.5) 122.9 43.4 Change in MV of Embedded Derivatives 21.4 (30.7) 74.7 (43.7) (167.1) (109.6)
Gain on Debt Repurchase (38.9) — (65.6) — (46.5) -Loss on Retirement of PIERS — — 4.4 — — -Non-Investment Derivatives — — — — — (0.4)
Pre-tax Operating Income 592.4 699.4 675.6 746.0 544.6 941.9
2009 2010 2011 2012 2013 2014 GAAP After-Tax Income—Cont Ops 373.0 535.7 546.0 631.9 418.8 684.0 Realized Capital (Gains) / Losses (1) 42.5 (50.3) (69.2) (87.1) 78.4 25.5 Change in MV of Embedded Derivatives (1) 14.0 (20.0) 48.6 (28.4) (108.6) (71.2)
Gain on Debt Repurchase (25.3) — (42.6) — (30.2) -Loss on Retirement of PIERS — — 2.8 — — -Non-Investment Derivatives — — — — — (0.3)
After-tax Operating Income 404.2 465.4 485.6 516.4 358.4 638.0
(1) Net of DAC offset
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Non-GAAP Reconciliations
($ in Millions)
CONSOLIDATED EPS RECONCILIATION
Per Diluted Share Basis
2009 2010 2011 2012 2013 2014 GAAP Net Income $ 5.09 $ 7.17 $ 7.37 $ 8.52 $ 5.78 $ 9.78
Realized Capital (Gains) / Losses 0.57 (0.67) (0.94) (1.18) 1.09 0.36 Change in MV of Embedded Derivatives 0.20 (0.27) 0.65 (0.38) (1.50) (1.02) Gain on Debt Repurchase (0.35) — (0.57) — (0.42) -Loss on Retirement of PIERS — — 0.04 — — -Non-Investment Derivatives — — — — — -Operating EPS from Cont. Operations $ 5.51 $ 6.23 $ 6.55 $ 6.96 $ 4.95 $ 9.12
2009 2010 2011 2012 2013 2014 GAAP Stockholders’ Equity $3,639.8 $4,765.4 $ 5,818.7 $ 6,910.2 $ 5,935.5 $ 7,023.5 FAS 115 Equity Adjustment 104.5 651.4 1,419.3 1,877.6 820.2 1,624.8 Foreign Currency Adjustment 204.0 255.3 229.8 267.5 207.1 81.8 Unrealized Pension (16.1) (14.6) (31.0) (36.2) (21.7) (49.5) Equity Excluding OCI $ 3,347.4 $ 3,873.3 $ 4,200.6 $ 4,801.3 $ 4,929.9 $ 5,366.4
2009 2010 2011 2012 2013 2014 GAAP Stockholders’ Average Equity $ 2,963.5 $ 4,254.6 $ 5,140.1 $ 6,328.0 $ 6,308.9 $ 6,515.7
FAS 115 Average Equity Adjustment (266.3) 462.4 914.6 1,636.9 1,290.2 1,282.3 Foreign Currency Adjustment 104.7 218.1 249.1 252.3 216.8 158.5 Unrealized Pension (14.6) (15.7) (17.4) (31.2) (32.4) (26.6)
Average Equity Excluding OCI $ 3,139.7 $ 3,589.8 $ 3,993.8 $ 4,470.0 $ 4,834.3 $ 5,101.5
Operating ROE—GAAP Stockholders’ Equity 14% 11% 9% 8% 6% 10% Operating ROE—Excluding OCI 13% 13% 12% 12% 7% 13%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Book value per share $ 36.50 $ 41.38 $ 43.64 $ 48.70 $ 33.54 $ 49.87 $ 64.96 $ 79.31 $ 93.47 $ 83.87 $ 102.53 Less: effect of FAS 115 3.92 5.92 5.46 5.05 (7.62) 1.43 8.88 19.35 25.40 11.59 23.63 Less: effect of CTA 1.50 1.40 1.77 3.43 0.35 2.80 3.48 3.13 3.62 2.93 1.19 Less: effect of Pension Benefit — — (0.18) (0.14) (0.20) (0.22) (0.20) (0.42) (0.50) (0.31) (0.32) Book value per share excluding OCI $ 31.08 $ 34.06 $ 36.59 $ 40.36 $ 41.01 $ 45.86 $ 52.80 $ 57.25 $ 64.95 $ 69.66 $ 78.03
Periods prior to 2006 not restated for 2012 DAC accounting change.
(1) Net of DAC offset
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RGA
©2015 RGA. All rights reserved.