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): July 23, 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):
r | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
r | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
r | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
r | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On July 23, 2015, Reinsurance Group of America, Incorporated (the “Company”) issued (1) a press release (the “Press Release”) announcing its earnings for the three-month period ended June 30, 2015, 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 June 30, 2015, a copy of which is attached hereto as Exhibit 99.2. The Press Release also notes that a conference call will be held on July 24, 2015 to discuss the financial and operating results for the three-month period ended June 30, 2015. The Press Release and Quarterly Financial Supplement are furnished and are not filed pursuant to Instruction B.2 of Form 8-K.
Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
Exhibit No. | Exhibit | |
99.1 | Press Release of Reinsurance Group of America, Incorporated dated July 23, 2015 | |
99.2 | Quarterly Financial Supplement for the quarter ended June 30, 2015 | |
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: July 23, 2015 | By: | /s/ Jack B. Lay | ||||
Jack B. Lay | ||||||
Senior Executive Vice President and Chief Financial Officer | ||||||
EXHIBIT INDEX
Exhibit Number | Description | |
99.1 | Press Release dated July 23, 2015 | |
99.2 | Quarterly Financial Supplement for the quarter ended June 30, 2015 | |
Exhibit 99.1
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS SECOND-QUARTER RESULTS
• | Earnings per diluted share: $1.94 from operating income* and net income |
• | Higher tax provision and adverse foreign currency translation had a negative impact of $0.14 and $0.08 per diluted share, respectively |
• | Strong results in EMEA and Asia offset by weakness in U.S. Traditional and Australia; Global Financial Solutions (GFS) continues strong performance trend |
• | Reported net premiums decreased 2 percent; up 8 percent net of foreign currency and the effect of fourth-quarter 2014 retrocession transaction |
• | Quarterly shareholder dividend raised 12 percent |
• | Share repurchase authorization increased to $450 million |
ST. LOUIS, July 23, 2015 - Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported operating income* of $130.3 million, or $1.94 per diluted share, compared with $155.1 million, or $2.23 per diluted share, in the prior-year quarter. Net income totaled $130.4 million, or $1.94 per diluted share, compared with $198.3 million, or $2.84 per diluted share, the year before. In addition to the higher effective tax rate and foreign currency effects noted above, the current period reflects higher claims in the U.S. and Australia, partially offset by better-than-expected overall results in EMEA and Asia; the year-ago period benefited from the positive effect of a treaty reinstatement and conversion in Asia, which contributed $0.11 per share.
Quarterly Results | Year-to-Date Results | |||||||||||||||
($ in thousands, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Net premiums | $ | 2,129,043 | $ | 2,183,160 | $ | 4,152,895 | $ | 4,283,797 | ||||||||
Net income | 130,391 | 198,296 | 255,505 | 334,960 | ||||||||||||
Net income per diluted share | 1.94 | 2.84 | 3.76 | 4.75 | ||||||||||||
Operating income* | 130,270 | 155,131 | 252,048 | 269,938 | ||||||||||||
Operating income per diluted share* | 1.94 | 2.23 | 3.70 | 3.83 | ||||||||||||
Book value per share | 97.61 | 97.21 | ||||||||||||||
Book value per share (excl. Accumulated Other Comprehensive Income “AOCI”)* | 80.30 | 73.54 | ||||||||||||||
Total assets | 47,460,271 | 43,171,051 | ||||||||||||||
* See "Use of Non-Gaap Financial Measures" below | ||||||||||||||||
Consolidated net premiums totaled $2.1 billion this quarter, down 2 percent from last year’s second quarter. Current-period premiums reflect a $114 million reduction associated with the previously announced fourth-quarter 2014 U.S. retrocession agreement, along with adverse foreign currency effects of approximately $122 million. Excluding those effects, premiums increased 8 percent versus the prior-year quarter. Investment income increased 10 percent to $450.5 million this period, primarily due to a larger average invested asset base. Excluding spread-based businesses and the value of associated derivatives, investment income increased 7 percent over year-ago levels. The average investment yield was 4.88 percent, nine basis points over the second quarter of 2014, and 10 basis points higher than the first-quarter yield.
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The effective tax rate on operating income was 38.9 percent this quarter, well above management’s expected range of 33 percent to 34 percent, and the comparable prior-year rate of 34.6 percent. Although an extension is expected later this year, Congress has not extended the Active Financing Exception (AFE) legislation, and as a result, the company increased its tax provision nearly $10 million in the second quarter, an adverse effect of $0.14 per diluted share. This amount would be reversed upon extension of the AFE.
Greig Woodring, president and chief executive officer, commented, “Operating income was $130.3 million, or $1.94 per diluted share in the second quarter, compared to $155.1 million a year ago or $2.23 per share. The results this quarter were negatively affected by the higher tax rate and foreign currency weakness. Otherwise, the results generally reflect a continuation of recent trends of balance and diversity of earnings by geography and product line, but with some volatility in segment and business line results consistent with the nature of our business. Most of our international operations continued a pattern of very good results, with the EMEA segment particularly strong, but Australia had a weak quarter, a reversal of some of the experience in the first quarter. The operating income of the Australia operation is essentially in line with expectations on a year-to-date basis. Our Global Financial Solutions business was again a highlight, with the U.S. Asset-Intensive business generating very favorable results. The U.S. Traditional business was weaker than expected, as the elevated mortality claims experienced in the first quarter extended into April before showing some seasonal recovery as the quarter progressed. On a positive note, the Canadian business saw slightly favorable mortality experience, after a string of unfavorable quarters. Therefore, while we continue to see some variability in our businesses from quarter to quarter and line to line, we are pleased that our global operating model has helped us produce favorable financial results over time.
“We continue to pursue a capital management strategy that entails deploying excess capital into attractive block acquisitions, share repurchases and shareholder dividends. After aggressively repurchasing shares in the first quarter of this year, we slowed this activity in the second quarter as we continued to pursue a range of potential block acquisition opportunities. Going forward, we expect to remain active but disciplined as we consider a range of options in terms of capital usage. We announced a dividend increase of 12 percent, and our board also increased the existing share repurchase authorization from $300 million to $450 million, making the current capacity under that authorization nearly $200 million. Our deployable, excess capital position exceeds $750 million. Ending book value per share this quarter was $97.61 including AOCI, and $80.30 excluding AOCI, an 11 percent increase over that of a year ago, when adding back dividends paid over that period.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
The U.S. and Latin America Traditional segment reported pre-tax operating income of $79.4 million, compared with $89.0 million in the second quarter of 2014. The current-period results were lower than expected due primarily to elevated individual mortality claims, particularly older-age policies, and to a lesser extent, adverse group results. Traditional net premiums decreased 2 percent from last year's second
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quarter to $1,170.9 million, including the retrocession agreement effective in last year’s fourth quarter, and increased 8 percent excluding that agreement. Pre-tax net income totaled $82.8 million for the quarter, compared with $94.0 million in last year’s second quarter.
Non-Traditional
The Asset-Intensive business reported pre-tax operating income of $56.4 million compared with $44.0 million last year. Results were strong in both periods with the current quarter benefiting primarily from favorable net interest rate spread performance on fixed annuities, as well as the addition of earnings from the Aurora National acquisition. Pre-tax net income decreased to $55.8 million from $81.8 million a year ago, attributable to changes in the fair value of various embedded derivatives.
The Financial Reinsurance business continued to perform well, increasing pre-tax operating income 8 percent to $14.6 million in the second quarter. Pre-tax net income also totaled $14.6 million in the current period compared with $13.7 million in the prior-year quarter.
Canada
Traditional
The Canada Traditional business reported pre-tax operating income of $23.8 million this quarter, down from $27.7 million the year before. Individual mortality claims experience improved relative to that of recent quarters and was slightly favorable this period, but that experience was mostly offset by weaker results in other products and a weaker Canadian dollar. Reported net premiums decreased 9 percent to $225.0 million, primarily due to the weaker currency. Pre-tax net income totaled $22.7 million compared with $32.0 million in the second quarter of 2014.
Non-Traditional
The Canada Non-Traditional business segment, which consists of longevity and fee-based transactions, posted pre-tax operating income and pre-tax net income of $3.1 million this quarter compared with $3.0 million in the prior-year quarter.
In total, a relatively weaker Canadian dollar lowered net premiums and pre-tax operating income by approximately $30.1 million and $3.5 million, respectively, during the quarter. In Canadian dollars, premiums increased 4 percent over the second quarter of 2014.
Europe, Middle East and Africa (EMEA)
Traditional
The EMEA Traditional segment reported pre-tax operating income of $9.2 million compared with $23.1 million in last year’s second quarter, a difficult comparison given the very favorable mortality and morbidity results in last year’s quarter. Current-period claims experience was at expected levels. Net reported premiums decreased 4 percent and totaled $275.7 million, compared with $286.4 million in the prior-year quarter. Net foreign currency fluctuations adversely affected pre-tax operating income and premiums again this quarter. Pre-tax net income totaled $9.2 million versus $26.8 million in the year-ago quarter.
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Non-Traditional
The EMEA Non-Traditional segment includes asset-intensive, longevity and fee-based transactions. Pre-tax operating income increased sharply to $31.8 million from $21.6 million a year ago, primarily due to the execution of two longevity transactions this quarter and favorable experience on existing longevity business. Pre-tax net income totaled $31.4 million this quarter, compared with $34.5 million in last year’s second quarter.
In total, adverse foreign currency fluctuations reduced net premiums and pre-tax operating income by $40.2 million and $5.0 million, respectively. EMEA premiums based in local currencies increased 7 percent over the second quarter of 2014.
Asia Pacific
Traditional
Asia Pacific’s Traditional business reported pre-tax operating income of $4.3 million, down from $26.3 million in the prior-year quarter. The Australia operation posted poor results in its individual and group morbidity product lines, contributing to a pre-tax operating loss of approximately $20 million in that market. That performance follows an unusually strong first quarter result. For the first six months, results in Australia were still profitable, in line with expected levels. Outside of Australia, Traditional businesses performed very well, with particularly strong results from our operations in Hong Kong & Southeast Asia, Japan and South Korea.
Traditional net premiums were even with the prior-year period at $390.5 million, including significant adverse foreign currency fluctuations compared with the prior year. Pre-tax net income totaled $4.3 million compared with $28.2 million in last year’s second quarter.
Non-Traditional
Asia Pacific’s Non-Traditional business includes asset-intensive, fee-based and various other transactions. Pre-tax operating income in this segment decreased to $0.7 million from $3.1 million last year due to lower volume and less favorable experience on certain treaties. Pre-tax net losses were $1.4 million this quarter versus pre-tax net income of $6.7 million in the year-ago period.
In total, Asia Pacific premiums included an adverse foreign currency effect of $51.0 million compared to the prior-year quarter. Local currency premiums increased 12 percent over the prior-year quarter. Pre-tax operating income benefited by $0.9 million from currency fluctuations, reflecting favorable effects on the losses incurred in Australia.
Corporate and Other
The Corporate and Other segment reported pre-tax operating losses of $9.9 million this period and $14.1 million in the second quarter of 2014. Current-quarter results were in line with expectations. Pre-tax net losses were $8.7 million this quarter and $20.2 million a year ago.
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Dividend Declaration
The board of directors increased the quarterly dividend 12 percent, to $0.37 from $0.33, payable August 26 to shareholders of record as of August 5.
Earnings Conference Call
A conference call to discuss second-quarter results will begin at 9 a.m. Eastern Time on Friday, July 24. Interested parties may access the call by dialing 1-877-741-4240 (domestic) or 719-325-4784 (international). The access code is 5926650. 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 also will be available through August 1 at 888-203-1112 (domestic) or 719-457-0820 (international), access code 5926650.
The company has posted to its website a Quarterly Financial Supplement that includes financial information for all segments as well as information on its investment portfolio. Additionally, the company posts periodic reports, press releases and other useful information on its investor relations website.
Use of Non-GAAP Financial Measures
RGA uses a non-GAAP financial measure called operating income as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs. Management believes that operating income, on a pre-tax and after‑tax basis, better measures the ongoing profitability and underlying trends of the company’s continuing operations, primarily because that measure excludes substantially all of 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, the cumulative effect of any accounting changes, and other items that 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 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 income per diluted share is a non-GAAP financial measure calculated as operating income divided by weighted average diluted shares outstanding. Operating return on equity is a non-GAAP financial measure calculated as operating income divided by average shareholders’ equity excluding AOCI.
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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, Turkey, 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 $47.5 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 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
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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 SEC.
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, 2014.
Investor Contact
Jeff Hopson
Senior Vice President - 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 June 30, | Six Months Ended June 30, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
GAAP net income | $ | 130,391 | $ | 198,296 | $ | 255,505 | $ | 334,960 | |||||||
Reconciliation to operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | 27,152 | (26,820 | ) | 12,567 | (43,827 | ) | |||||||||
Capital (gains) losses on funds withheld, included in investment income | (1,951 | ) | (3,870 | ) | (9,363 | ) | (4,123 | ) | |||||||
Embedded derivatives: | |||||||||||||||
Included in investment related (gains) losses, net | (18,056 | ) | (47,873 | ) | (209 | ) | (82,700 | ) | |||||||
Included in interest credited | (6,817 | ) | 4,495 | (114 | ) | 231 | |||||||||
DAC offset, net | (770 | ) | 30,903 | (6,589 | ) | 65,397 | |||||||||
Non-investment derivatives | 321 | — | 251 | — | |||||||||||
Operating income | $ | 130,270 | $ | 155,131 | $ | 252,048 | $ | 269,938 | |||||||
Reconciliation of Consolidated Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Income before income taxes | $ | 213,790 | $ | 300,535 | $ | 397,915 | $ | 499,975 | |||||||
Reconciliation to pre-tax operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | 41,526 | (38,136 | ) | 20,580 | (64,442 | ) | |||||||||
Capital (gains) losses on funds withheld, included in investment income | (3,002 | ) | (5,954 | ) | (14,404 | ) | (6,343 | ) | |||||||
Embedded derivatives: | |||||||||||||||
Included in investment related (gains) losses, net | (27,780 | ) | (73,652 | ) | (322 | ) | (127,232 | ) | |||||||
Included in interest credited | (10,488 | ) | 6,916 | (175 | ) | 356 | |||||||||
DAC offset, net | (1,187 | ) | 47,543 | (10,138 | ) | 100,611 | |||||||||
Non-investment derivatives | 493 | — | 385 | — | |||||||||||
Pre-tax operating income | $ | 213,352 | $ | 237,252 | $ | 393,841 | $ | 402,925 | |||||||
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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)
(Unaudited) | Three Months Ended June 30, 2015 | ||||||||||||||
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. and Latin America: | |||||||||||||||
Traditional | $ | 82,793 | $ | (2 | ) | $ | (3,358 | ) | $ | 79,433 | |||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 55,750 | 25,739 | (1) | (25,087 | ) | (2) | 56,402 | ||||||||
Financial Reinsurance | 14,643 | — | — | 14,643 | |||||||||||
Total U.S. and Latin America | 153,186 | 25,737 | (28,445 | ) | 150,478 | ||||||||||
Canada Traditional | 22,736 | 1,023 | — | 23,759 | |||||||||||
Canada Non-Traditional | 3,094 | — | — | 3,094 | |||||||||||
Total Canada | 25,830 | 1,023 | — | 26,853 | |||||||||||
EMEA Traditional | 9,159 | — | — | 9,159 | |||||||||||
EMEA Non-Traditional | 31,432 | 402 | — | 31,834 | |||||||||||
Total EMEA | 40,591 | 402 | — | 40,993 | |||||||||||
Asia Pacific Traditional | 4,315 | — | — | 4,315 | |||||||||||
Asia Pacific Non-Traditional | (1,405 | ) | 2,056 | — | 651 | ||||||||||
Total Asia Pacific | 2,910 | 2,056 | — | 4,966 | |||||||||||
Corporate and Other | (8,727 | ) | (1,211 | ) | — | (9,938 | ) | ||||||||
Consolidated | $ | 213,790 | $ | 28,007 | $ | (28,445 | ) | $ | 213,352 | ||||||
(1) | Asset Intensive is net of $(11,010) DAC offset. |
(2) | Asset Intensive is net of $9,823 DAC offset. |
(Unaudited) | Three Months Ended June 30, 2014 | ||||||||||||||
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. and Latin America: | |||||||||||||||
Traditional | $ | 93,988 | $ | (5,967 | ) | $ | 933 | $ | 88,954 | ||||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 81,797 | (22,813 | ) | (1) | (14,957 | ) | (2) | 44,027 | |||||||
Financial Reinsurance | 13,677 | (68 | ) | — | 13,609 | ||||||||||
Total U.S. and Latin America | 189,462 | (28,848 | ) | (14,024 | ) | 146,590 | |||||||||
Canada Traditional | 32,009 | (4,266 | ) | — | 27,743 | ||||||||||
Canada Non-Traditional | 3,011 | (28 | ) | — | 2,983 | ||||||||||
Total Canada | 35,020 | (4,294 | ) | — | 30,726 | ||||||||||
EMEA Traditional | 26,787 | (3,737 | ) | — | 23,050 | ||||||||||
EMEA Non-Traditional | 34,535 | (12,904 | ) | — | 21,631 | ||||||||||
Total EMEA | 61,322 | (16,641 | ) | — | 44,681 | ||||||||||
Asia Pacific Traditional | 28,213 | (1,950 | ) | — | 26,263 | ||||||||||
Asia Pacific Non-Traditional | 6,715 | (3,651 | ) | — | 3,064 | ||||||||||
Total Asia Pacific | 34,928 | (5,601 | ) | — | 29,327 | ||||||||||
Corporate and Other | (20,197 | ) | 6,125 | — | (14,072 | ) | |||||||||
Consolidated | $ | 300,535 | $ | (49,259 | ) | $ | (14,024 | ) | $ | 237,252 | |||||
(1) | Asset Intensive is net of $(5,169) DAC offset. |
(2) | Asset Intensive is net of $52,712 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)
(Unaudited) | Six Months Ended June 30, 2015 | ||||||||||||||
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. and Latin America: | |||||||||||||||
Traditional | $ | 100,636 | $ | (1 | ) | $ | (886 | ) | $ | 99,749 | |||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 97,890 | 2,347 | (1) | (3,501 | ) | (2) | 96,736 | ||||||||
Financial Reinsurance | 27,008 | — | — | 27,008 | |||||||||||
Total U.S. and Latin America | 225,534 | 2,346 | (4,387 | ) | 223,493 | ||||||||||
Canada Traditional | 45,463 | (4,531 | ) | — | 40,932 | ||||||||||
Canada Non-Traditional | 7,225 | — | — | 7,225 | |||||||||||
Total Canada | 52,688 | (4,531 | ) | — | 48,157 | ||||||||||
EMEA Traditional | 19,641 | (49 | ) | — | 19,592 | ||||||||||
EMEA Non-Traditional | 51,066 | (597 | ) | — | 50,469 | ||||||||||
Total EMEA | 70,707 | (646 | ) | — | 70,061 | ||||||||||
Asia Pacific Traditional | 56,963 | — | — | 56,963 | |||||||||||
Asia Pacific Non-Traditional | 8,740 | 2,035 | — | 10,775 | |||||||||||
Total Asia Pacific | 65,703 | 2,035 | — | 67,738 | |||||||||||
Corporate and Other | (16,717 | ) | 1,109 | — | (15,608 | ) | |||||||||
Consolidated | $ | 397,915 | $ | 313 | $ | (4,387 | ) | $ | 393,841 | ||||||
(1) | Asset Intensive is net of $(6,248) DAC offset. |
(2) | Asset Intensive is net of $(3,890) DAC offset. |
(Unaudited) | Six Months Ended June 30, 2014 | ||||||||||||||
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. and Latin America: | |||||||||||||||
Traditional | $ | 144,960 | $ | (10,191 | ) | $ | 2,388 | $ | 137,157 | ||||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 152,412 | (42,052 | ) | (1) | (25,328 | ) | (2) | 85,032 | |||||||
Financial Reinsurance | 26,186 | (151 | ) | — | 26,035 | ||||||||||
Total U.S. and Latin America | 323,558 | (52,394 | ) | (22,940 | ) | 248,224 | |||||||||
Canada Traditional | 51,442 | (2,166 | ) | — | 49,276 | ||||||||||
Canada Non-Traditional | 3,642 | (69 | ) | — | 3,573 | ||||||||||
Total Canada | 55,084 | (2,235 | ) | — | 52,849 | ||||||||||
EMEA Traditional | 25,795 | (4,868 | ) | — | 20,927 | ||||||||||
EMEA Non-Traditional | 50,732 | (13,002 | ) | — | 37,730 | ||||||||||
Total EMEA | 76,527 | (17,870 | ) | — | 58,657 | ||||||||||
Asia Pacific Traditional | 47,080 | (2,070 | ) | — | 45,010 | ||||||||||
Asia Pacific Non-Traditional | 14,159 | (5,184 | ) | — | 8,975 | ||||||||||
Total Asia Pacific | 61,239 | (7,254 | ) | — | 53,985 | ||||||||||
Corporate and Other | (16,433 | ) | 5,643 | — | (10,790 | ) | |||||||||
Consolidated | $ | 499,975 | $ | (74,110 | ) | $ | (22,940 | ) | $ | 402,925 | |||||
(1) | Asset Intensive is net of $(3,325) DAC offset. |
(2) | Asset Intensive is net of $103,936 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 June 30, | Six Months Ended June 30, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Diluted earnings per share from operating income | $ | 1.94 | $ | 2.23 | $ | 3.70 | $ | 3.83 | |||||||
Earnings per share from net income: | |||||||||||||||
Basic earnings per share | $ | 1.97 | $ | 2.87 | $ | 3.80 | $ | 4.80 | |||||||
Diluted earnings per share | $ | 1.94 | $ | 2.84 | $ | 3.76 | $ | 4.75 | |||||||
Weighted average number of common and common equivalent shares outstanding | 67,120 | 69,718 | 68,030 | 70,489 | |||||||||||
(Unaudited) | At or for the Six Months Ended June 30, | ||||||
2015 | 2014 | ||||||
Treasury shares | 12,716 | 10,328 | |||||
Common shares outstanding | 66,422 | 68,810 | |||||
Book value per share outstanding | $ | 97.61 | $ | 97.21 | |||
Book value per share outstanding, before impact of AOCI | $ | 80.30 | $ | 73.54 | |||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
(Unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues: | |||||||||||||||
Net premiums | $ | 2,129,043 | $ | 2,183,160 | $ | 4,152,895 | $ | 4,283,797 | |||||||
Investment income, net of related expenses | 450,539 | 410,607 | 877,430 | 814,982 | |||||||||||
Investment related gains (losses), net: | |||||||||||||||
Other-than-temporary impairments on fixed maturity securities | (4,137 | ) | (870 | ) | (6,664 | ) | (1,173 | ) | |||||||
Other investment related gains (losses), net | (12,041 | ) | 119,397 | (1,931 | ) | 204,271 | |||||||||
Total investment related gains (losses), net | (16,178 | ) | 118,527 | (8,595 | ) | 203,098 | |||||||||
Other revenue | 66,936 | 120,726 | 129,223 | 188,316 | |||||||||||
Total revenues | 2,630,340 | 2,833,020 | 5,150,953 | 5,490,193 | |||||||||||
Benefits and expenses: | |||||||||||||||
Claims and other policy benefits | 1,866,183 | 1,841,885 | 3,641,634 | 3,685,562 | |||||||||||
Interest credited | 77,246 | 115,962 | 197,924 | 226,556 | |||||||||||
Policy acquisition costs and other insurance expenses | 300,412 | 409,374 | 577,455 | 764,247 | |||||||||||
Other operating expenses | 131,600 | 127,462 | 253,218 | 238,398 | |||||||||||
Interest expense | 35,851 | 35,211 | 71,478 | 70,295 | |||||||||||
Collateral finance and securitization expense | 5,258 | 2,591 | 11,329 | 5,160 | |||||||||||
Total benefits and expenses | 2,416,550 | 2,532,485 | 4,753,038 | 4,990,218 | |||||||||||
Income before income taxes | 213,790 | 300,535 | 397,915 | 499,975 | |||||||||||
Provision for income taxes | 83,399 | 102,239 | 142,410 | 165,015 | |||||||||||
Net income | $ | 130,391 | $ | 198,296 | $ | 255,505 | $ | 334,960 | |||||||
# # #
Exhibit 99.2
Financial Supplement
Second Quarter 2015
(Unaudited)
World Headquarters | Internet address | Contacts: | ||
16600 Swingley Ridge Road | www.rgare.com | Jack B. Lay | ||
Chesterfield, Missouri 63017 U.S.A. | Senior Executive Vice President | |||
and Chief Financial Officer | ||||
Phone: (636) 736-7000 | ||||
e-mail: jlay@rgare.com | ||||
Jeff Hopson | ||||
Sr. Vice President, Investor Relations | ||||
Phone: (636) 736-2068 | ||||
e-mail: jhopson@rgare.com | ||||
Current Ratings | ||||||
Standard & Poor’s | A.M. Best | Moody’s | ||||
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 | |||
RGA Americas Reinsurance Company, Ltd. | AA- | A+ | NR | |||
RGA Atlantic Reinsurance Company Ltd. | NR | A+ | 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”.
Reinsurance Group of America, Incorporated
Financial Supplement
2nd Quarter 2015
Table of Contents
Page | |
Consolidated | |
Segment Pre-tax Operating Income Summaries and Reconciliations to U.S. GAAP | |
Investments | |
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 ("RGA") 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 substantially all of 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, the cumulative effect of any accounting changes, and other items that 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.
| Page 1 | |
Reinsurance Group of America, Incorporated
PRIOR PERIOD RECLASSIFICATIONS
Effective January 1, 2015, the Company further segmented the Canada; Europe, Middle East and Africa; and Asia Pacific segments into traditional and non-traditional businesses to reflect the expanded product offerings within its geographic-based segments. The prior-period presentation has been adjusted to conform to the new segment reporting structure.
| Page 2 | |
Reinsurance Group of America, Incorporated Financial Highlights | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to Date | ||||||||||||||||||||||||||||||||||||
(USD thousands, except inforce & per share data) | June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | |||||||||||||||||||||||||||||||
Net premiums | $ | 2,129,043 | $ | 2,023,852 | $ | 2,217,772 | $ | 2,168,285 | $ | 2,183,160 | $ | (54,117 | ) | $ | 4,152,895 | $ | 4,283,797 | $ | (130,902 | ) | ||||||||||||||||||
Net income | 130,391 | 125,114 | 191,091 | 157,996 | 198,296 | (67,905 | ) | 255,505 | 334,960 | (79,455 | ) | |||||||||||||||||||||||||||
Operating income | 130,270 | 121,778 | 208,288 | 159,823 | 155,131 | (24,861 | ) | 252,048 | 269,938 | (17,890 | ) | |||||||||||||||||||||||||||
Operating return on equity (ex AOCI) - | ||||||||||||||||||||||||||||||||||||||
annualized | 9.8 | % | 9.2 | % | 15.8 | % | 12.5 | % | 12.4 | % | (2.6 | )% | ||||||||||||||||||||||||||
trailing 12 months | 11.8 | % | 12.5 | % | 12.5 | % | 11.7 | % | 11.8 | % | — | % | ||||||||||||||||||||||||||
Total assets | 47,460,271 | 44,691,268 | 44,679,611 | 42,910,363 | 43,171,051 | 4,289,220 | ||||||||||||||||||||||||||||||||
Assumed Life Reinsurance in Force (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 1,475.6 | $ | 1,479.4 | $ | 1,483.9 | $ | 1,387.2 | $ | 1,393.1 | $ | 82.5 | ||||||||||||||||||||||||||
U.S. and Latin America Non-Traditional | 2.1 | 2.1 | 1.4 | 2.2 | 2.2 | (0.1 | ) | |||||||||||||||||||||||||||||||
Canada Traditional | 360.7 | 349.0 | 402.8 | 383.9 | 395.8 | (35.1 | ) | |||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 573.9 | 553.3 | 561.1 | 573.0 | 626.1 | (52.2 | ) | |||||||||||||||||||||||||||||||
Asia Pacific Traditional | 512.7 | 460.6 | 494.0 | 577.0 | 616.9 | (104.2 | ) | |||||||||||||||||||||||||||||||
Asia Pacific Non-Traditional | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | — | ||||||||||||||||||||||||||||||||
Total Life Reinsurance in Force | $ | 2,925.3 | $ | 2,844.7 | $ | 2,943.5 | $ | 2,923.6 | $ | 3,034.4 | $ | (109.1 | ) | |||||||||||||||||||||||||
Assumed New Business Production (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 15.7 | $ | 19.7 | $ | 118.1 | (1) | $ | 16.6 | $ | 21.8 | $ | (6.1 | ) | $ | 35.4 | $ | 42.2 | $ | (6.8 | ) | |||||||||||||||||
Canada Traditional | 11.1 | 9.7 | 13.9 | 11.6 | 10.4 | 0.7 | 20.8 | 22.8 | (2.0 | ) | ||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 32.3 | 48.6 | 38.5 | 22.5 | 67.7 | (35.4 | ) | 80.9 | 114.2 | (33.3 | ) | |||||||||||||||||||||||||||
Asia Pacific Traditional | 12.6 | 27.8 | 22.4 | 21.1 | 18.5 | (5.9 | ) | 40.4 | 38.1 | 2.3 | ||||||||||||||||||||||||||||
Total New Business Production | $ | 71.7 | $ | 105.8 | $ | 192.9 | $ | 71.8 | $ | 118.4 | $ | (46.7 | ) | $ | 177.5 | $ | 217.3 | $ | (39.8 | ) | ||||||||||||||||||
Per Share and Shares Data | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 1.97 | $ | 1.84 | $ | 2.78 | $ | 2.30 | $ | 2.87 | $ | (0.90 | ) | $ | 3.80 | $ | 4.80 | $ | (1.00 | ) | ||||||||||||||||||
Operating income | $ | 1.96 | $ | 1.79 | $ | 3.03 | $ | 2.33 | $ | 2.25 | $ | (0.29 | ) | $ | 3.75 | $ | 3.87 | $ | (0.12 | ) | ||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 1.94 | $ | 1.81 | $ | 2.75 | $ | 2.28 | $ | 2.84 | $ | (0.90 | ) | $ | 3.76 | $ | 4.75 | $ | (0.99 | ) | ||||||||||||||||||
Operating income | $ | 1.94 | $ | 1.77 | $ | 2.99 | $ | 2.31 | $ | 2.23 | $ | (0.29 | ) | $ | 3.70 | $ | 3.83 | $ | (0.13 | ) | ||||||||||||||||||
Wgt. average common shares outstanding | ||||||||||||||||||||||||||||||||||||||
(basic) | 66,351 | 68,141 | 68,718 | 68,642 | 69,076 | (2,725 | ) | 67,246 | 69,823 | (2,577 | ) | |||||||||||||||||||||||||||
(diluted) | 67,120 | 68,942 | 69,550 | 69,335 | 69,718 | (2,598 | ) | 68,030 | 70,489 | (2,459 | ) | |||||||||||||||||||||||||||
Common shares issued | 79,138 | 79,138 | 79,138 | 79,138 | 79,138 | — | 79,138 | 79,138 | — | |||||||||||||||||||||||||||||
Treasury shares | 12,716 | 12,699 | 10,365 | 10,472 | 10,328 | 2,388 | 12,716 | 10,328 | 2,388 | |||||||||||||||||||||||||||||
Common shares outstanding | 66,422 | 66,439 | 68,773 | 68,666 | 68,810 | (2,388 | ) | 66,422 | 68,810 | (2,388 | ) | |||||||||||||||||||||||||||
Book value per share | $ | 97.61 | $ | 107.62 | $ | 102.13 | $ | 97.28 | $ | 97.21 | ||||||||||||||||||||||||||||
Per share effect of accumulated other | ||||||||||||||||||||||||||||||||||||||
comprehensive income (AOCI) | $ | 17.31 | $ | 28.36 | $ | 24.10 | $ | 21.84 | $ | 23.67 | ||||||||||||||||||||||||||||
Book value per share, excluding AOCI | $ | 80.30 | $ | 79.26 | $ | 78.03 | $ | 75.44 | $ | 73.54 | ||||||||||||||||||||||||||||
Shareholder dividends paid | $ | 21,850.5 | $ | 22,668.8 | $ | 22,669.4 | $ | 22,632.1 | $ | 20,711.1 | $ | 1,139.4 | $ | 44,519.3 | $ | 41,954.7 | $ | 2,564.6 | ||||||||||||||||||||
(1) Increase in new business production related to the Voya Financial transaction that closed during the 4th quarter. | ||||||||||||||||||||||||||||||||||||||
| Page 3 | |
Reinsurance Group of America, Incorporated Consolidated GAAP Income Statement (incl. Operating Income Reconciliations) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | Quarter | 2015 | 2014 | Change | |||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 2,129,043 | $ | 2,023,852 | $ | 2,217,772 | $ | 2,168,285 | $ | 2,183,160 | $ | (54,117 | ) | $ | 4,152,895 | $ | 4,283,797 | $ | (130,902 | ) | ||||||||||||||||||
Investment income, net of related expenses | 450,539 | 426,891 | 451,603 | 447,106 | 410,607 | 39,932 | 877,430 | 814,982 | 62,448 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | ||||||||||||||||||||||||||||||||||||||
OTTI on fixed maturity securities | (4,137 | ) | (2,527 | ) | (6,347 | ) | (246 | ) | (870 | ) | (3,267 | ) | (6,664 | ) | (1,173 | ) | (5,491 | ) | ||||||||||||||||||||
OTTI on fixed maturity securities transferred | ||||||||||||||||||||||||||||||||||||||
to/from AOCI | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other investment related gains (losses), net | (12,041 | ) | 10,110 | (32,876 | ) | 22,564 | 119,397 | (131,438 | ) | (1,931 | ) | 204,271 | (206,202 | ) | ||||||||||||||||||||||||
Total investment related gains (losses), net | (16,178 | ) | 7,583 | (39,223 | ) | 22,318 | 118,527 | (134,705 | ) | (8,595 | ) | 203,098 | (211,693 | ) | ||||||||||||||||||||||||
Other revenue | 66,936 | 62,287 | 67,261 | 78,879 | 120,726 | (53,790 | ) | 129,223 | 188,316 | (59,093 | ) | |||||||||||||||||||||||||||
Total revenues | 2,630,340 | 2,520,613 | 2,697,413 | 2,716,588 | 2,833,020 | (202,680 | ) | 5,150,953 | 5,490,193 | (339,240 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,866,183 | 1,775,451 | 1,866,042 | 1,855,037 | 1,841,885 | 24,298 | 3,641,634 | 3,685,562 | (43,928 | ) | ||||||||||||||||||||||||||||
Interest credited | 77,246 | 120,678 | 103,523 | 120,952 | 115,962 | (38,716 | ) | 197,924 | 226,556 | (28,632 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 300,412 | 277,043 | 290,775 | 336,411 | 409,374 | (108,962 | ) | 577,455 | 764,247 | (186,792 | ) | |||||||||||||||||||||||||||
Other operating expenses | 131,600 | 121,618 | 166,280 | 133,737 | 127,462 | 4,138 | 253,218 | 238,398 | 14,820 | |||||||||||||||||||||||||||||
Interest expense | 35,851 | 35,627 | (9,660 | ) | 36,065 | 35,211 | 640 | 71,478 | 70,295 | 1,183 | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 5,258 | 6,071 | 3,710 | 2,571 | 2,591 | 2,667 | 11,329 | 5,160 | 6,169 | |||||||||||||||||||||||||||||
Total benefits and expenses | 2,416,550 | 2,336,488 | 2,420,670 | 2,484,773 | 2,532,485 | (115,935 | ) | 4,753,038 | 4,990,218 | (237,180 | ) | |||||||||||||||||||||||||||
Income before income taxes | 213,790 | 184,125 | 276,743 | 231,815 | 300,535 | (86,745 | ) | 397,915 | 499,975 | (102,060 | ) | |||||||||||||||||||||||||||
Income tax expense | 83,399 | 59,011 | 85,652 | 73,819 | 102,239 | (18,840 | ) | 142,410 | 165,015 | (22,605 | ) | |||||||||||||||||||||||||||
Net income | $ | 130,391 | $ | 125,114 | $ | 191,091 | $ | 157,996 | $ | 198,296 | $ | (67,905 | ) | $ | 255,505 | $ | 334,960 | $ | (79,455 | ) | ||||||||||||||||||
Pre-tax Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | 213,790 | 184,125 | 276,743 | 231,815 | 300,535 | (86,745 | ) | 397,915 | 499,975 | (102,060 | ) | |||||||||||||||||||||||||||
Investment and derivative losses (gains)— | ||||||||||||||||||||||||||||||||||||||
non-operating (1) | 41,526 | (20,946 | ) | (22,453 | ) | (8,413 | ) | (38,136 | ) | 79,662 | 20,580 | (64,442 | ) | 85,022 | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | 23,098 | 2,325 | 14,523 | (56,812 | ) | (78,835 | ) | 101,933 | 25,423 | (156,076 | ) | 181,499 | ||||||||||||||||||||||||||
GMXB embedded derivatives (1) | (50,878 | ) | 25,133 | 52,901 | 47,479 | 5,183 | (56,061 | ) | (25,745 | ) | 28,844 | (54,589 | ) | |||||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (3,002 | ) | (11,402 | ) | (1,371 | ) | (5,501 | ) | (5,954 | ) | 2,952 | (14,404 | ) | (6,343 | ) | (8,061 | ) | |||||||||||||||||||||
EIA embedded derivatives—interest credited | (10,488 | ) | 10,313 | (362 | ) | (415 | ) | 6,916 | (17,404 | ) | (175 | ) | 356 | (531 | ) | |||||||||||||||||||||||
DAC offset, net | (1,187 | ) | (8,951 | ) | (15,253 | ) | 26,521 | 47,543 | (48,730 | ) | (10,138 | ) | 100,611 | (110,749 | ) | |||||||||||||||||||||||
Non-investment derivatives | 493 | (108 | ) | (472 | ) | 28 | — | 493 | 385 | — | 385 | |||||||||||||||||||||||||||
Operating Income Before Income Taxes | $ | 213,352 | $ | 180,489 | $ | 304,256 | $ | 234,702 | $ | 237,252 | $ | (23,900 | ) | $ | 393,841 | $ | 402,925 | $ | (9,084 | ) | ||||||||||||||||||
After-tax Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Net Income | 130,391 | 125,114 | 191,091 | 157,996 | 198,296 | (67,905 | ) | 255,505 | 334,960 | (79,455 | ) | |||||||||||||||||||||||||||
Investment and derivative losses (gains)— | ||||||||||||||||||||||||||||||||||||||
non-operating (1) | 27,152 | (14,585 | ) | (15,281 | ) | (5,517 | ) | (26,820 | ) | 53,972 | 12,567 | (43,827 | ) | 56,394 | ||||||||||||||||||||||||
Change in value of modified coinsurance | ||||||||||||||||||||||||||||||||||||||
and funds withheld embedded derivatives (1) | 15,014 | 1,511 | 9,440 | (36,928 | ) | (51,242 | ) | 66,256 | 16,525 | (101,449 | ) | 117,974 | ||||||||||||||||||||||||||
GMXB embedded derivatives (1) | (33,070 | ) | 16,336 | 34,386 | 30,861 | 3,369 | (36,439 | ) | (16,734 | ) | 18,749 | (35,483 | ) | |||||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (1,951 | ) | (7,412 | ) | (891 | ) | (3,576 | ) | (3,870 | ) | 1,919 | (9,363 | ) | (4,123 | ) | (5,240 | ) | |||||||||||||||||||||
EIA embedded derivatives—interest credited | (6,817 | ) | 6,703 | (236 | ) | (269 | ) | 4,495 | (11,312 | ) | (114 | ) | 231 | (345 | ) | |||||||||||||||||||||||
DAC offset, net | (770 | ) | (5,819 | ) | (9,914 | ) | 17,238 | 30,903 | (31,673 | ) | (6,589 | ) | 65,397 | (71,986 | ) | |||||||||||||||||||||||
Non-investment derivatives | 321 | (70 | ) | (307 | ) | 18 | — | 321 | 251 | — | 251 | |||||||||||||||||||||||||||
Operating Income | $ | 130,270 | $ | 121,778 | $ | 208,288 | $ | 159,823 | $ | 155,131 | $ | (24,861 | ) | $ | 252,048 | $ | 269,938 | $ | (17,890 | ) | ||||||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement | ||||||||||||||||||||||||||||||||||||||
| Page 4 | |
Reinsurance Group of America, Incorporated Consolidated Operating Income Statement | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands, except per share data) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 2,129,043 | $ | 2,023,852 | $ | 2,217,772 | $ | 2,168,285 | $ | 2,183,160 | $ | (54,117 | ) | $ | 4,152,895 | $ | 4,283,797 | $ | (130,902 | ) | ||||||||||||||||||
Investment income, net of related expenses | 447,537 | 415,489 | 450,232 | 441,605 | 404,653 | 42,884 | 863,026 | 808,639 | 54,387 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | (2,432 | ) | 14,095 | 5,748 | 4,572 | 6,739 | (9,171 | ) | 11,663 | 11,424 | 239 | |||||||||||||||||||||||||||
Other revenue | 67,429 | 62,179 | 66,789 | 78,907 | 120,726 | (53,297 | ) | 129,608 | 188,316 | (58,708 | ) | |||||||||||||||||||||||||||
Total revenues | 2,641,577 | 2,515,615 | 2,740,541 | 2,693,369 | 2,715,278 | (73,701 | ) | 5,157,192 | 5,292,176 | (134,984 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,866,183 | 1,775,451 | 1,866,042 | 1,855,037 | 1,841,885 | 24,298 | 3,641,634 | 3,685,562 | (43,928 | ) | ||||||||||||||||||||||||||||
Interest credited | 87,734 | 110,365 | 103,885 | 121,367 | 109,046 | (21,312 | ) | 198,099 | 226,200 | (28,101 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 301,599 | 285,994 | 306,028 | 309,890 | 361,831 | (60,232 | ) | 587,593 | 663,636 | (76,043 | ) | |||||||||||||||||||||||||||
Other operating expenses | 131,600 | 121,618 | 166,280 | 133,737 | 127,462 | 4,138 | 253,218 | 238,398 | 14,820 | |||||||||||||||||||||||||||||
Interest expense | 35,851 | 35,627 | (9,660 | ) | 36,065 | 35,211 | 640 | 71,478 | 70,295 | 1,183 | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 5,258 | 6,071 | 3,710 | 2,571 | 2,591 | 2,667 | 11,329 | 5,160 | 6,169 | |||||||||||||||||||||||||||||
Total benefits and expenses | 2,428,225 | 2,335,126 | 2,436,285 | 2,458,667 | 2,478,026 | (49,801 | ) | 4,763,351 | 4,889,251 | (125,900 | ) | |||||||||||||||||||||||||||
Operating income before income taxes | 213,352 | 180,489 | 304,256 | 234,702 | 237,252 | (23,900 | ) | 393,841 | 402,925 | (9,084 | ) | |||||||||||||||||||||||||||
Operating income tax expense | 83,082 | 58,711 | 95,968 | 74,879 | 82,121 | 961 | 141,793 | 132,987 | 8,806 | |||||||||||||||||||||||||||||
Operating income | $ | 130,270 | $ | 121,778 | $ | 208,288 | $ | 159,823 | $ | 155,131 | $ | (24,861 | ) | $ | 252,048 | $ | 269,938 | $ | (17,890 | ) | ||||||||||||||||||
Wgt. Average Common Shares Outstanding (Diluted) | 67,120 | 68,942 | 69,550 | 69,335 | 69,718 | (2,598) | 68,030 | 70,489 | (2,459) | |||||||||||||||||||||||||||||
Diluted Earnings Per Share—Operating Income | $ | 1.94 | $ | 1.77 | $ | 2.99 | $ | 2.31 | $ | 2.23 | $ | (0.29 | ) | $ | 3.70 | $ | 3.83 | $ | (0.13 | ) | ||||||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (121,287 | ) | $ | (96,024 | ) | $ | (61,093 | ) | $ | 5,906 | $ | (4,964 | ) | $ | (116,323 | ) | $ | (217,311 | ) | $ | (55,189 | ) | $ | (162,122 | ) | ||||||||||||
Operating income before income taxes | $ | (8,700 | ) | $ | (11,833 | ) | $ | (9,276 | ) | $ | (2,016 | ) | $ | (809 | ) | $ | (7,891 | ) | $ | (20,533 | ) | $ | (7,414 | ) | $ | (13,119 | ) | |||||||||||
(1) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 5 | |
Reinsurance Group of America, Incorporated Consolidated Balance Sheets | ||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | |||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 28,063,975 | $ | 25,801,223 | $ | 25,480,972 | $ | 24,475,451 | $ | 24,480,396 | ||||||||||
Mortgage loans on real estate | 3,073,313 | 2,913,486 | 2,712,238 | 2,617,091 | 2,555,800 | |||||||||||||||
Policy loans | 1,438,156 | 1,284,085 | 1,284,284 | 1,249,948 | 1,250,635 | |||||||||||||||
Funds withheld at interest | 5,840,076 | 5,841,554 | 5,922,561 | 5,969,006 | 5,940,521 | |||||||||||||||
Short-term investments | 76,118 | 89,136 | 97,694 | 44,437 | 45,596 | |||||||||||||||
Other invested assets | 1,110,107 | 1,243,033 | 1,198,319 | 1,165,021 | 1,128,375 | |||||||||||||||
Total investments | 39,601,745 | 37,172,517 | 36,696,068 | 35,520,954 | 35,401,323 | |||||||||||||||
Cash and cash equivalents | 1,335,661 | 1,083,179 | 1,645,669 | 1,118,745 | 1,378,117 | |||||||||||||||
Accrued investment income | 322,069 | 283,665 | 261,096 | 305,880 | 279,368 | |||||||||||||||
Premiums receivable and other reinsurance balances | 1,518,208 | 1,509,810 | 1,527,729 | 1,491,993 | 1,559,526 | |||||||||||||||
Reinsurance ceded receivables | 711,463 | 665,797 | 578,206 | 596,704 | 614,203 | |||||||||||||||
Deferred policy acquisition costs | 3,299,541 | 3,286,348 | 3,342,575 | 3,297,616 | 3,368,343 | |||||||||||||||
Other assets | 671,584 | 689,952 | 628,268 | 578,471 | 570,171 | |||||||||||||||
Total assets | $ | 47,460,271 | $ | 44,691,268 | $ | 44,679,611 | $ | 42,910,363 | $ | 43,171,051 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Future policy benefits | $ | 16,773,035 | $ | 14,152,780 | $ | 14,476,637 | $ | 13,541,687 | $ | 13,785,532 | ||||||||||
Interest-sensitive contract liabilities | 13,516,059 | 12,508,201 | 12,591,497 | 12,638,117 | 12,686,025 | |||||||||||||||
Other policy claims and benefits | 3,857,610 | 3,822,699 | 3,824,069 | 3,861,060 | 3,996,737 | |||||||||||||||
Other reinsurance balances | 311,388 | 320,950 | 306,915 | 276,314 | 258,023 | |||||||||||||||
Deferred income taxes | 2,246,086 | 2,529,733 | 2,365,817 | 2,149,076 | 2,232,821 | |||||||||||||||
Other liabilities | 1,032,980 | 1,118,645 | 994,230 | 967,303 | 716,157 | |||||||||||||||
Short-term debt | — | — | — | — | 110,000 | |||||||||||||||
Long-term debt | 2,313,470 | 2,313,884 | 2,314,293 | 2,314,693 | 2,214,705 | |||||||||||||||
Collateral finance and securitization notes | 926,410 | 774,351 | 782,701 | 482,115 | 482,092 | |||||||||||||||
Total liabilities | 40,977,038 | 37,541,243 | 37,656,159 | 36,230,365 | 36,482,092 | |||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||
Common stock, at par value | 791 | 791 | 791 | 791 | 791 | |||||||||||||||
Additional paid-in-capital | 1,805,858 | 1,802,774 | 1,798,279 | 1,784,818 | 1,783,856 | |||||||||||||||
Retained earnings | 4,425,302 | 4,339,028 | 4,239,647 | 4,074,047 | 3,941,777 | |||||||||||||||
Treasury stock | (898,082 | ) | (876,804 | ) | (672,394 | ) | (679,265 | ) | (666,125 | ) | ||||||||||
Accumulated other comprehensive income (AOCI): | ||||||||||||||||||||
Accumulated currency translation adjustment, net of income taxes | (13,989 | ) | (35,924 | ) | 81,847 | 131,936 | 207,043 | |||||||||||||
Unrealized appreciation of securities, net of income taxes | 1,211,056 | 1,968,697 | 1,624,773 | 1,387,957 | 1,442,324 | |||||||||||||||
Pension and postretirement benefits, net of income taxes | (47,703 | ) | (48,537 | ) | (49,491 | ) | (20,286 | ) | (20,707 | ) | ||||||||||
Total stockholders’ equity | 6,483,233 | 7,150,025 | 7,023,452 | 6,679,998 | 6,688,959 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 47,460,271 | $ | 44,691,268 | $ | 44,679,611 | $ | 42,910,363 | $ | 43,171,051 | ||||||||||
Total stockholders’ equity, excluding AOCI | $ | 5,333,869 | $ | 5,265,789 | $ | 5,366,323 | $ | 5,180,391 | $ | 5,060,299 | ||||||||||
| Page 6 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional Segment Pre-tax Operating Income | |||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | |||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | |||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,170,931 | $ | 1,114,094 | $ | 1,221,862 | $ | 1,171,916 | $ | 1,189,822 | $ | (18,891 | ) | $ | 2,285,025 | $ | 2,331,727 | $ | (46,702 | ) | |||||||||||||||||||
Investment income, net of related expenses | 163,390 | 143,005 | 142,753 | 139,272 | 137,404 | 25,986 | 306,395 | 270,780 | 35,615 | ||||||||||||||||||||||||||||||
Other revenue | 4,567 | 664 | 1,323 | 783 | 767 | 3,800 | 5,231 | 1,409 | 3,822 | ||||||||||||||||||||||||||||||
Total revenues | 1,338,888 | 1,257,763 | 1,365,938 | 1,311,971 | 1,327,993 | 10,895 | 2,596,651 | 2,603,916 | (7,265 | ) | |||||||||||||||||||||||||||||
Benefits and expenses: | |||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,041,390 | 1,039,407 | 1,021,046 | 1,030,525 | 1,045,030 | (3,640 | ) | 2,080,797 | 2,078,737 | 2,060 | |||||||||||||||||||||||||||||
Interest credited | 21,875 | 12,944 | 13,101 | 12,993 | 12,818 | 9,057 | 34,819 | 25,090 | 9,729 | ||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 169,035 | 158,567 | 168,395 | 161,120 | 156,270 | 12,765 | 327,602 | 312,270 | 15,332 | ||||||||||||||||||||||||||||||
Other operating expenses | 27,155 | 26,529 | 29,276 | 28,408 | 24,921 | 2,234 | 53,684 | 50,662 | 3,022 | ||||||||||||||||||||||||||||||
Total benefits and expenses | 1,259,455 | 1,237,447 | 1,231,818 | 1,233,046 | 1,239,039 | 20,416 | 2,496,902 | 2,466,759 | 30,143 | ||||||||||||||||||||||||||||||
Operating income before income taxes | 79,433 | 20,316 | 134,120 | 78,925 | 88,954 | (9,521 | ) | 99,749 | 137,157 | (37,408 | ) | ||||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | |||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 79,433 | 20,316 | 134,120 | 78,925 | 88,954 | (9,521 | ) | 99,749 | 137,157 | (37,408 | ) | ||||||||||||||||||||||||||||
Investment and derivative (losses) gains - non-operating | 3,360 | (2,473 | ) | (5,268 | ) | (1,092 | ) | 5,034 | (1,674 | ) | 887 | 7,803 | (6,916 | ) | |||||||||||||||||||||||||
Income before income taxes | $ | 82,793 | $ | 17,843 | $ | 128,852 | $ | 77,833 | $ | 93,988 | $ | (11,195 | ) | $ | 100,636 | $ | 144,960 | $ | (44,324 | ) | |||||||||||||||||||
Loss and Expense Ratios: | |||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 88.9 | % | 93.3 | % | 83.6 | % | 87.9 | % | 87.8 | % | 1.1 | % | 91.1 | % | 89.2 | % | 1.9 | % | |||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14.4 | % | 14.2 | % | 13.8 | % | 13.7 | % | 13.1 | % | 1.3 | % | 14.3 | % | 13.4 | % | 0.9 | % | |||||||||||||||||||||
Other operating expenses | 2.3 | % | 2.4 | % | 2.4 | % | 2.4 | % | 2.1 | % | 0.2 | % | 2.3 | % | 2.2 | % | 0.1 | % | |||||||||||||||||||||
| Page 7 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment—Asset Intensive Reinsurance Pre-tax Operating Income | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 5,941 | $ | 5,041 | $ | 4,747 | $ | 5,168 | $ | 4,984 | $ | 957 | $ | 10,982 | $ | 10,164 | $ | 818 | ||||||||||||||||||||
Investment income, net of related expenses | 152,616 | 141,470 | 155,557 | 170,608 | 143,927 | 8,689 | 294,086 | 302,546 | (8,460 | ) | ||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | 1 | (2 | ) | 1 | (1 | ) | — | 1 | (1 | ) | ||||||||||||||||||||||||||
Other revenue | 26,634 | 26,544 | 28,436 | 28,944 | 29,376 | (2,742 | ) | 53,178 | 57,652 | (4,474 | ) | |||||||||||||||||||||||||||
Total revenues | 185,191 | 173,055 | 188,741 | 204,718 | 178,288 | 6,903 | 358,246 | 370,363 | (12,117 | ) | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 19,983 | 6,726 | 5,289 | 5,586 | 4,713 | 15,270 | 26,709 | 8,973 | 17,736 | |||||||||||||||||||||||||||||
Interest credited | 69,530 | 84,672 | 86,294 | 104,985 | 90,037 | (20,507 | ) | 154,202 | 191,681 | (37,479 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 34,163 | 37,005 | 36,380 | 31,960 | 35,698 | (1,535 | ) | 71,168 | 76,770 | (5,602 | ) | |||||||||||||||||||||||||||
Other operating expenses | 5,113 | 4,318 | 4,764 | 4,211 | 3,813 | 1,300 | 9,431 | 7,907 | 1,524 | |||||||||||||||||||||||||||||
Total benefits and expenses | 128,789 | 132,721 | 132,727 | 146,742 | 134,261 | (5,472 | ) | 261,510 | 285,331 | (23,821 | ) | |||||||||||||||||||||||||||
Operating income before income taxes | 56,402 | 40,334 | 56,014 | 57,976 | 44,027 | 12,375 | 96,736 | 85,032 | 11,704 | |||||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 56,402 | 40,334 | 56,014 | 57,976 | 44,027 | 12,375 | 96,736 | 85,032 | 11,704 | |||||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (39,497 | ) | 21,787 | 28,086 | 18,001 | 12,412 | (51,909 | ) | (17,710 | ) | 33,712 | (51,422 | ) | |||||||||||||||||||||||||
Change in value of modified coinsurance and funds withheld embedded derivatives (1) | (26,456 | ) | 147 | (13,490 | ) | 56,490 | 79,768 | (106,224 | ) | (26,309 | ) | 158,464 | (184,773 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | 50,878 | (25,133 | ) | (52,901 | ) | (47,479 | ) | (5,183 | ) | 56,061 | 25,745 | (28,844 | ) | 54,589 | ||||||||||||||||||||||||
Funds withheld gains (losses) - investment income | 2,748 | 6,367 | 1,154 | 4,914 | 5,232 | (2,484 | ) | 9,115 | 5,015 | 4,100 | ||||||||||||||||||||||||||||
EIA embedded derivatives - interest credited | 10,488 | (10,313 | ) | 362 | 415 | (6,916 | ) | 17,404 | 175 | (356 | ) | 531 | ||||||||||||||||||||||||||
DAC offset, net | 1,187 | 8,951 | 15,253 | (26,521 | ) | (47,543 | ) | 48,730 | 10,138 | (100,611 | ) | 110,749 | ||||||||||||||||||||||||||
Income before income taxes | $ | 55,750 | $ | 42,140 | $ | 34,478 | $ | 63,796 | $ | 81,797 | $ | (26,047 | ) | $ | 97,890 | $ | 152,412 | $ | (54,522 | ) | ||||||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement | ||||||||||||||||||||||||||||||||||||||
| Page 8 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment—Asset Intensive Reinsurance Pre-tax Operating Income (Cont’d) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
(USD millions) | 2015 | 2015 | 2014 | 2014 | 2014 | |||||||||||||||
Annuity account values: | ||||||||||||||||||||
Fixed annuities (deferred) | $ | 5,004 | $ | 4,779 | $ | 4,859 | $ | 4,919 | $ | 5,030 | ||||||||||
Net interest spread (fixed annuities): | 2.5 | % | 2.3 | % | 3.5 | % | 3.2 | % | 2.3 | % | ||||||||||
Equity-indexed annuities | $ | 4,622 | $ | 4,666 | $ | 4,695 | $ | 4,716 | $ | 4,725 | ||||||||||
Variable annuities: | ||||||||||||||||||||
No riders | $ | 843 | $ | 864 | $ | 881 | $ | 899 | $ | 941 | ||||||||||
GMDB only | 69 | 71 | 75 | 79 | 84 | |||||||||||||||
GMIB only | 5 | 5 | 5 | 6 | 6 | |||||||||||||||
GMAB only | 38 | 41 | 44 | 46 | 50 | |||||||||||||||
GMWB only | 1,540 | 1,600 | 1,636 | 1,676 | 1,741 | |||||||||||||||
GMDB / WB | 391 | 410 | 427 | 427 | 462 | |||||||||||||||
Other | 24 | 26 | 27 | 28 | 30 | |||||||||||||||
Total VA account values | $ | 2,910 | $ | 3,017 | $ | 3,095 | $ | 3,161 | $ | 3,314 | ||||||||||
Fair value of liabilities associated with living benefit riders | $ | 134 | $ | 184 | $ | 159 | $ | 106 | $ | 59 | ||||||||||
Interest-sensitive contract liabilities associated with: | ||||||||||||||||||||
Guaranteed investment contracts | $ | 325 | $ | 336 | $ | 336 | $ | 336 | $ | 301 | ||||||||||
Bank-owned life insurance (BOLI) | $ | 554 | $ | 551 | $ | 548 | $ | 544 | $ | 541 | ||||||||||
Other asset-intensive business | $ | 67 | $ | 68 | $ | 69 | $ | 69 | $ | 71 | ||||||||||
Future policy benefits associated with: | ||||||||||||||||||||
Payout annuities | $ | 1,952 | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Page 9 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment—Financial Reinsurance Pre-tax Operating Income | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1,194 | $ | 1,145 | $ | 1,155 | $ | 1,003 | $ | 1,086 | $ | 108 | $ | 2,339 | $ | 2,333 | $ | 6 | ||||||||||||||||||||
Other revenue | 17,717 | 15,305 | 18,363 | 23,581 | 21,777 | (4,060 | ) | 33,022 | 40,875 | (7,853 | ) | |||||||||||||||||||||||||||
Total revenues | 18,911 | 16,450 | 19,518 | 24,584 | 22,863 | (3,952 | ) | 35,361 | 43,208 | (7,847 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 2,522 | 2,416 | 4,112 | 8,458 | 6,944 | (4,422 | ) | 4,938 | 12,686 | (7,748 | ) | |||||||||||||||||||||||||||
Other operating expenses | 1,746 | 1,669 | 2,876 | 2,322 | 2,310 | (564 | ) | 3,415 | 4,487 | (1,072 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 4,268 | 4,085 | 6,988 | 10,780 | 9,254 | (4,986 | ) | 8,353 | 17,173 | (8,820 | ) | |||||||||||||||||||||||||||
Operating income before income taxes | 14,643 | 12,365 | 12,530 | 13,804 | 13,609 | 1,034 | 27,008 | 26,035 | 973 | |||||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 14,643 | 12,365 | 12,530 | 13,804 | 13,609 | 1,034 | 27,008 | 26,035 | 973 | |||||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | — | — | (162 | ) | (100 | ) | 68 | (68 | ) | — | 151 | (151 | ) | |||||||||||||||||||||||||
Income before income taxes | $ | 14,643 | $ | 12,365 | $ | 12,368 | $ | 13,704 | $ | 13,677 | $ | 966 | $ | 27,008 | $ | 26,186 | $ | 822 | ||||||||||||||||||||
| Page 10 | |
Reinsurance Group of America, Incorporated Canada Traditional Segment Pre-tax Operating Income | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 224,960 | $ | 212,550 | $ | 240,409 | $ | 239,645 | $ | 248,031 | $ | (23,071 | ) | $ | 437,510 | $ | 473,335 | $ | (35,825 | ) | ||||||||||||||||||
Investment income, net of related expenses | 45,497 | 44,405 | 47,442 | 49,060 | 48,703 | (3,206 | ) | 89,902 | 94,976 | (5,074 | ) | |||||||||||||||||||||||||||
Investment related gains (losses), net | 1,110 | 939 | 937 | 907 | 621 | 489 | 2,049 | 1,627 | 422 | |||||||||||||||||||||||||||||
Other revenue | (454 | ) | 1,556 | 569 | 761 | (220 | ) | (234 | ) | 1,102 | 741 | 361 | ||||||||||||||||||||||||||
Total revenues | 271,113 | 259,450 | 289,357 | 290,373 | 297,135 | (26,022 | ) | 530,563 | 570,679 | (40,116 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 185,742 | 183,534 | 200,620 | 195,162 | 199,084 | (13,342 | ) | 369,276 | 388,655 | (19,379 | ) | |||||||||||||||||||||||||||
Interest credited | 5 | 4 | 14 | 10 | 9 | (4 | ) | 9 | 9 | — | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 53,371 | 49,551 | 60,699 | 60,260 | 60,687 | (7,316 | ) | 102,922 | 113,640 | (10,718 | ) | |||||||||||||||||||||||||||
Other operating expenses | 8,236 | 9,188 | 9,826 | 10,086 | 9,612 | (1,376 | ) | 17,424 | 19,099 | (1,675 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 247,354 | 242,277 | 271,159 | 265,518 | 269,392 | (22,038 | ) | 489,631 | 521,403 | (31,772 | ) | |||||||||||||||||||||||||||
Operating income before income taxes | 23,759 | 17,173 | 18,198 | 24,855 | 27,743 | (3,984 | ) | 40,932 | 49,276 | (8,344 | ) | |||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 23,759 | 17,173 | 18,198 | 24,855 | 27,743 | (3,984 | ) | 40,932 | 49,276 | (8,344 | ) | |||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | (1,277 | ) | 519 | 1,418 | (1,282 | ) | 3,544 | (4,821 | ) | (758 | ) | 838 | (1,596 | ) | ||||||||||||||||||||||||
Funds withheld gains (losses) - investment income | 254 | 5,035 | 217 | 587 | 722 | (468 | ) | 5,289 | 1,328 | 3,961 | ||||||||||||||||||||||||||||
Income before income taxes | $ | 22,736 | $ | 22,727 | $ | 19,833 | $ | 24,160 | $ | 32,009 | $ | (9,273 | ) | $ | 45,463 | $ | 51,442 | $ | (5,979 | ) | ||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Loss ratios (creditor business) | 31.8 | % | 29.5 | % | 31.3 | % | 28.0 | % | 27.5 | % | 4.3 | % | 30.7 | % | 29.2 | % | 1.5 | % | ||||||||||||||||||||
Loss ratios (excluding creditor business) | 95.9 | % | 101.2 | % | 100.6 | % | 98.3 | % | 97.1 | % | (1.2 | )% | 98.5 | % | 97.6 | % | 0.9 | % | ||||||||||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 68.7 | % | 71.4 | % | 69.7 | % | 67.6 | % | 67.1 | % | 1.6 | % | 70.0 | % | 68.4 | % | 1.6 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (creditor business) | 64.0 | % | 63.0 | % | 65.8 | % | 65.2 | % | 66.6 | % | (2.6 | )% | 63.5 | % | 62.9 | % | 0.6 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (excluding creditor business) | 13.2 | % | 12.9 | % | 11.9 | % | 12.5 | % | 11.0 | % | 2.2 | % | 13.1 | % | 12.6 | % | 0.5 | % | ||||||||||||||||||||
Other operating expenses | 3.7 | % | 4.3 | % | 4.1 | % | 4.2 | % | 3.9 | % | (0.2 | )% | 4.0 | % | 4.0 | % | 0.0 | % | ||||||||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (28,850 | ) | $ | (26,121 | ) | $ | (18,820 | ) | $ | (11,917 | ) | $ | (16,401 | ) | $ | (12,449 | ) | $ | (54,971 | ) | $ | (38,051 | ) | $ | (16,920 | ) | |||||||||||
Operating income before income taxes | $ | (3,065 | ) | $ | (2,147 | ) | $ | (1,750 | ) | $ | (1,556 | ) | $ | (1,743 | ) | $ | (1,322 | ) | $ | (5,212 | ) | $ | (4,015 | ) | $ | (1,197 | ) | |||||||||||
Creditor reinsurance net premiums | $ | 46,629 | $ | 44,054 | $ | 59,451 | $ | 57,412 | $ | 60,013 | $ | (13,384 | ) | $ | 90,683 | $ | 107,357 | $ | (16,674 | ) | ||||||||||||||||||
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) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 11 | |
Reinsurance Group of America, Incorporated Canada Non-Traditional Segment Pre-tax Operating Income (1) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 9,725 | $ | 9,967 | $ | 4,615 | $ | 5,491 | $ | 5,546 | $ | 4,179 | $ | 19,692 | $ | 11,086 | $ | 8,606 | ||||||||||||||||||||
Investment income, net of related expenses | 328 | 550 | 616 | 600 | 655 | (327 | ) | 878 | 1,379 | (501 | ) | |||||||||||||||||||||||||||
Other revenue | 1,405 | 1,357 | 1,432 | 1,568 | 1,483 | (78 | ) | 2,762 | 1,483 | 1,279 | ||||||||||||||||||||||||||||
Total revenues | 11,458 | 11,874 | 6,663 | 7,659 | 7,684 | 3,774 | 23,332 | 13,948 | 9,384 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 7,904 | 7,299 | 4,451 | 6,271 | 4,209 | 3,695 | 15,203 | 9,394 | 5,809 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 148 | 107 | 131 | 149 | 150 | (2 | ) | 255 | 301 | (46 | ) | |||||||||||||||||||||||||||
Other operating expenses | 312 | 337 | 350 | 358 | 342 | (30 | ) | 649 | 680 | (31 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 8,364 | 7,743 | 4,932 | 6,778 | 4,701 | 3,663 | 16,107 | 10,375 | 5,732 | |||||||||||||||||||||||||||||
Operating income before income taxes | 3,094 | 4,131 | 1,731 | 881 | 2,983 | 111 | 7,225 | 3,573 | 3,652 | |||||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 3,094 | 4,131 | 1,731 | 881 | 2,983 | 111 | 7,225 | 3,573 | 3,652 | |||||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | — | — | 8 | 3 | 28 | (28 | ) | — | 69 | (69 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 3,094 | $ | 4,131 | $ | 1,739 | $ | 884 | $ | 3,011 | $ | 83 | $ | 7,225 | $ | 3,642 | $ | 3,583 | ||||||||||||||||||||
Foreign currency effect (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (1,234 | ) | $ | (1,302 | ) | $ | (1,390 | ) | $ | (29 | ) | $ | (43 | ) | $ | (1,191 | ) | $ | (2,536 | ) | $ | (111 | ) | $ | (2,425 | ) | |||||||||||
Operating income (loss) before income taxes | $ | (397 | ) | $ | (251 | ) | $ | (146 | ) | $ | (49 | ) | $ | (200 | ) | $ | (197 | ) | $ | (648 | ) | $ | (261 | ) | $ | (387 | ) | |||||||||||
(1) The Canadian non-traditional segment includes longevity and financial reinsurance. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 12 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Traditional Segment Pre-tax Operating Income | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 275,745 | $ | 269,746 | $ | 288,191 | $ | 291,015 | $ | 286,403 | $ | (10,658 | ) | $ | 545,491 | $ | 578,201 | $ | (32,710 | ) | ||||||||||||||||||
Investment income, net of related expenses | 13,092 | 12,089 | 15,099 | 13,050 | 12,113 | 979 | 25,181 | 23,937 | 1,244 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | (4,509 | ) | 12,208 | 3,678 | 2,550 | 5,183 | (9,692 | ) | 7,699 | 7,776 | (77 | ) | ||||||||||||||||||||||||||
Other revenue | (136 | ) | 1,140 | (582 | ) | 2,878 | (336 | ) | 200 | 1,004 | 68 | 936 | ||||||||||||||||||||||||||
Total revenues | 284,192 | 295,183 | 306,386 | 309,493 | 303,363 | (19,171 | ) | 579,375 | 609,982 | (30,607 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 240,942 | 235,307 | 247,959 | 244,010 | 236,540 | 4,402 | 476,249 | 505,791 | (29,542 | ) | ||||||||||||||||||||||||||||
Interest credited | (4,048 | ) | 12,349 | 4,076 | 2,959 | 5,750 | (9,798 | ) | 8,301 | 8,536 | (235 | ) | ||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14,183 | 12,008 | 14,038 | 17,205 | 11,994 | 2,189 | 26,191 | 25,729 | 462 | |||||||||||||||||||||||||||||
Other operating expenses | 23,956 | 25,086 | 30,414 | 25,028 | 26,029 | (2,073 | ) | 49,042 | 48,999 | 43 | ||||||||||||||||||||||||||||
Total benefits and expenses | 275,033 | 284,750 | 296,487 | 289,202 | 280,313 | (5,280 | ) | 559,783 | 589,055 | (29,272 | ) | |||||||||||||||||||||||||||
Operating income (loss) before income taxes | 9,159 | 10,433 | 9,899 | 20,291 | 23,050 | (13,891 | ) | 19,592 | 20,927 | (1,335 | ) | |||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 9,159 | 10,433 | 9,899 | 20,291 | 23,050 | (13,891 | ) | 19,592 | 20,927 | (1,335 | ) | |||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | — | 49 | 3,330 | 990 | 3,737 | (3,737 | ) | 49 | 4,868 | (4,819 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 9,159 | $ | 10,482 | $ | 13,229 | $ | 21,281 | $ | 26,787 | $ | (17,628 | ) | $ | 19,641 | $ | 25,795 | $ | (6,154 | ) | ||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 87.4 | % | 87.2 | % | 86.0 | % | 83.8 | % | 82.6 | % | 4.8 | % | 87.3 | % | 87.5 | % | (0.2 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5.1 | % | 4.5 | % | 4.9 | % | 5.9 | % | 4.2 | % | 0.9 | % | 4.8 | % | 4.4 | % | 0.4 | % | ||||||||||||||||||||
Other operating expenses | 8.7 | % | 9.3 | % | 10.6 | % | 8.6 | % | 9.1 | % | (0.4 | )% | 9.0 | % | 8.5 | % | 0.5 | % | ||||||||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (35,426 | ) | $ | (29,430 | ) | $ | (24,435 | ) | $ | 13,415 | $ | 20,767 | $ | (56,193 | ) | $ | (64,856 | ) | $ | 30,069 | $ | (94,925 | ) | ||||||||||||||
Operating income (loss) before income taxes | $ | (770 | ) | $ | (1,301 | ) | $ | (905 | ) | $ | 1,157 | $ | 2,031 | $ | (2,801 | ) | $ | (2,071 | ) | $ | 1,191 | $ | (3,262 | ) | ||||||||||||||
Critical illness net premiums | $ | 58,278 | $ | 58,219 | $ | 62,511 | $ | 63,303 | $ | 66,257 | $ | (7,979 | ) | $ | 116,497 | $ | 131,935 | $ | (15,438 | ) | ||||||||||||||||||
(1) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 13 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Non-Traditional Segment Pre-tax Operating Income (1) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 50,234 | $ | 29,860 | $ | 57,694 | $ | 55,442 | $ | 54,481 | $ | (4,247 | ) | $ | 80,094 | $ | 103,426 | $ | (23,332 | ) | ||||||||||||||||||
Investment income, net of related expenses | 15,782 | 16,877 | 28,799 | 16,141 | 8,558 | 7,224 | 32,659 | 10,103 | 22,556 | |||||||||||||||||||||||||||||
Other revenue | 9,694 | 7,640 | 8,725 | 10,640 | 8,275 | 1,419 | 17,334 | 15,794 | 1,540 | |||||||||||||||||||||||||||||
Total revenues | 75,710 | 54,377 | 95,218 | 82,223 | 71,314 | 4,396 | 130,087 | 129,323 | 764 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 39,849 | 32,081 | 66,032 | 53,982 | 46,006 | (6,157 | ) | 71,930 | 84,096 | (12,166 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 266 | (530 | ) | (646 | ) | (738 | ) | (502 | ) | 768 | (264 | ) | (972 | ) | 708 | |||||||||||||||||||||||
Other operating expenses | 3,761 | 4,191 | 5,948 | 5,290 | 4,179 | (418 | ) | 7,952 | 8,469 | (517 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 43,876 | 35,742 | 71,334 | 58,534 | 49,683 | (5,807 | ) | 79,618 | 91,593 | (11,975 | ) | |||||||||||||||||||||||||||
Operating income before income taxes | 31,834 | 18,635 | 23,884 | 23,689 | 21,631 | 10,203 | 50,469 | 37,730 | 12,739 | |||||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 31,834 | 18,635 | 23,884 | 23,689 | 21,631 | 10,203 | 50,469 | 37,730 | 12,739 | |||||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | 50 | 851 | 2,314 | 206 | 12,904 | (12,854 | ) | 901 | 13,002 | (12,101 | ) | |||||||||||||||||||||||||||
Non-investment derivatives | (452 | ) | 148 | 512 | — | — | (452 | ) | (304 | ) | — | (304 | ) | |||||||||||||||||||||||||
Income before income taxes | $ | 31,432 | $ | 19,634 | $ | 26,710 | $ | 23,895 | $ | 34,535 | $ | (3,103 | ) | $ | 51,066 | $ | 50,732 | $ | 334 | |||||||||||||||||||
Foreign currency effect (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (4,779 | ) | $ | (2,327 | ) | $ | 9,345 | $ | 1,026 | $ | 437 | $ | (5,216 | ) | $ | (7,106 | ) | $ | (175 | ) | $ | (6,931 | ) | ||||||||||||||
Operating income before income taxes | $ | (4,214 | ) | $ | (2,393 | ) | $ | (1,510 | ) | $ | 929 | $ | 1,679 | $ | (5,893 | ) | $ | (6,607 | ) | $ | 2,913 | $ | (9,520 | ) | ||||||||||||||
(1) The Europe, Middle East and Africa non-traditional segment includes asset intensive, financial reinsurance, capital motivated and longevity closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 14 | |
Reinsurance Group of America, Incorporated Asia Pacific Traditional Segment Pre-tax Operating Income | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 390,456 | $ | 372,145 | $ | 390,652 | $ | 393,665 | $ | 390,494 | $ | (38 | ) | $ | 762,601 | $ | 756,593 | $ | 6,008 | |||||||||||||||||||
Investment income, net of related expenses | 20,043 | 20,604 | 20,785 | 21,899 | 21,502 | (1,459 | ) | 40,647 | 41,805 | (1,158 | ) | |||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | (1 | ) | 1 | (1 | ) | 1 | — | — | — | |||||||||||||||||||||||||||
Other revenue | 815 | 1,126 | 3,363 | 2,776 | 51,593 | (50,778 | ) | 1,941 | 51,959 | (50,018 | ) | |||||||||||||||||||||||||||
Total revenues | 411,314 | 393,875 | 414,799 | 418,341 | 463,588 | (52,274 | ) | 805,189 | 850,357 | (45,168 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 325,667 | 265,309 | 312,540 | 309,648 | 299,747 | 25,920 | 590,976 | 586,423 | 4,553 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 49,335 | 46,912 | 46,691 | 51,249 | 107,293 | (57,958 | ) | 96,247 | 160,872 | (64,625 | ) | |||||||||||||||||||||||||||
Other operating expenses | 31,997 | 29,006 | 37,541 | 32,818 | 30,285 | 1,712 | 61,003 | 58,052 | 2,951 | |||||||||||||||||||||||||||||
Total benefits and expenses | 406,999 | 341,227 | 396,772 | 393,715 | 437,325 | (30,326 | ) | 748,226 | 805,347 | (57,121 | ) | |||||||||||||||||||||||||||
Operating income before income taxes | 4,315 | 52,648 | 18,027 | 24,626 | 26,263 | (21,948 | ) | 56,963 | 45,010 | 11,953 | ||||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 4,315 | 52,648 | 18,027 | 24,626 | 26,263 | (21,948 | ) | 56,963 | 45,010 | 11,953 | ||||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | — | — | 1,193 | (324 | ) | 1,950 | (1,950 | ) | — | 2,070 | (2,070 | ) | ||||||||||||||||||||||||||
Income before income taxes | $ | 4,315 | $ | 52,648 | $ | 19,220 | $ | 24,302 | $ | 28,213 | $ | (23,898 | ) | $ | 56,963 | $ | 47,080 | $ | 9,883 | |||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 83.4 | % | 71.3 | % | 80.0 | % | 78.7 | % | 76.8 | % | 6.6 | % | 77.5 | % | 77.5 | % | — | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 12.6 | % | 12.6 | % | 12.0 | % | 13.0 | % | 27.5 | % | (14.9 | )% | 12.6 | % | 21.3 | % | (8.7 | )% | ||||||||||||||||||||
Other operating expenses | 8.2 | % | 7.8 | % | 9.6 | % | 8.3 | % | 7.8 | % | 0.4 | % | 8.0 | % | 7.7 | % | 0.3 | % | ||||||||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (50,842 | ) | $ | (35,158 | ) | $ | (23,238 | ) | $ | 3,459 | $ | (9,483 | ) | $ | (41,359 | ) | $ | (86,000 | ) | $ | (46,059 | ) | $ | (39,941 | ) | ||||||||||||
Operating income before income taxes | $ | 1,533 | $ | (4,762 | ) | $ | (2,414 | ) | $ | (658 | ) | $ | (1,193 | ) | $ | 2,726 | $ | (3,229 | ) | $ | (3,451 | ) | $ | 222 | ||||||||||||||
Critical illness net premiums | $ | 75,120 | $ | 69,867 | $ | 76,231 | $ | 67,105 | $ | 71,928 | $ | 3,192 | $ | 144,987 | $ | 132,326 | $ | 12,661 | ||||||||||||||||||||
(1) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 15 | |
Reinsurance Group of America, Incorporated Asia Pacific Non-Traditional Segment Pre-tax Operating Income (1) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 898 | $ | 10,282 | $ | 9,429 | $ | 5,757 | $ | 3,193 | $ | (2,295 | ) | $ | 11,180 | $ | 18,844 | $ | (7,664 | ) | ||||||||||||||||||
Investment income, net of related expenses | 3,888 | 3,649 | 4,264 | 4,546 | 4,823 | (935 | ) | 7,537 | 9,162 | (1,625 | ) | |||||||||||||||||||||||||||
Investment related gains (losses), net | 507 | 501 | 665 | 645 | 685 | (178 | ) | 1,008 | 1,545 | (537 | ) | |||||||||||||||||||||||||||
Other revenue | 3,839 | 5,117 | 5,539 | 6,174 | 5,281 | (1,442 | ) | 8,956 | 11,038 | (2,082 | ) | |||||||||||||||||||||||||||
Total revenues | 9,132 | 19,549 | 19,897 | 17,122 | 13,982 | (4,850 | ) | 28,681 | 40,589 | (11,908 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 4,706 | 5,735 | 8,103 | 9,859 | 6,573 | (1,867 | ) | 10,441 | 23,493 | (13,052 | ) | |||||||||||||||||||||||||||
Interest credited | 169 | 184 | 195 | 221 | 234 | (65 | ) | 353 | 480 | (127 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 419 | 546 | 367 | 603 | 616 | (197 | ) | 965 | 1,326 | (361 | ) | |||||||||||||||||||||||||||
Other operating expenses | 3,187 | 2,960 | 4,006 | 3,621 | 3,495 | (308 | ) | 6,147 | 6,315 | (168 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 8,481 | 9,425 | 12,671 | 14,304 | 10,918 | (2,437 | ) | 17,906 | 31,614 | (13,708 | ) | |||||||||||||||||||||||||||
Operating income before income taxes | 651 | 10,124 | 7,226 | 2,818 | 3,064 | (2,413 | ) | 10,775 | 8,975 | 1,800 | ||||||||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | 651 | 10,124 | 7,226 | 2,818 | 3,064 | (2,413 | ) | 10,775 | 8,975 | 1,800 | ||||||||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | (2,056 | ) | 21 | (5,803 | ) | (6,707 | ) | 3,651 | (5,707 | ) | (2,035 | ) | 5,184 | (7,219 | ) | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (1,405 | ) | $ | 10,145 | $ | 1,423 | $ | (3,889 | ) | $ | 6,715 | $ | (8,120 | ) | $ | 8,740 | $ | 14,159 | $ | (5,419 | ) | ||||||||||||||||
Foreign currency effect (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (156 | ) | $ | (1,686 | ) | $ | (2,555 | ) | $ | (48 | ) | $ | (241 | ) | $ | 85 | $ | (1,842 | ) | $ | (862 | ) | $ | (980 | ) | ||||||||||||
Operating income (loss) before income taxes | $ | (614 | ) | $ | (451 | ) | $ | (1,355 | ) | $ | (436 | ) | $ | (120 | ) | $ | (494 | ) | $ | (1,065 | ) | $ | (822 | ) | $ | (243 | ) | |||||||||||
(1) The Asia Pacific non-traditional segment includes asset intensive, financial reinsurance, and disabled life closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 16 | |
Reinsurance Group of America, Incorporated Corporate and Other Segment Pre-tax Operating Income | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 153 | $ | 167 | $ | 173 | $ | 186 | $ | 206 | $ | (53 | ) | $ | 320 | $ | 421 | $ | (101 | ) | ||||||||||||||||||
Investment income, net of related expenses | 31,707 | 31,695 | 33,762 | 25,426 | 25,882 | 5,825 | 63,402 | 51,618 | 11,784 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 460 | 447 | 468 | 471 | 250 | 210 | 907 | 475 | 432 | |||||||||||||||||||||||||||||
Other revenue | 3,348 | 1,730 | (379 | ) | 802 | 2,730 | 618 | 5,078 | 7,297 | (2,219 | ) | |||||||||||||||||||||||||||
Total revenues | 35,668 | 34,039 | 34,024 | 26,885 | 29,068 | 6,600 | 69,707 | 59,811 | 9,896 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | — | 53 | 2 | (6 | ) | (17 | ) | 17 | 53 | — | 53 | |||||||||||||||||||||||||||
Interest credited | 203 | 212 | 205 | 199 | 198 | 5 | 415 | 404 | 11 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (21,843 | ) | (20,588 | ) | (24,139 | ) | (20,376 | ) | (17,319 | ) | (4,524 | ) | (42,431 | ) | (38,986 | ) | (3,445 | ) | ||||||||||||||||||||
Other operating expenses | 26,137 | 18,334 | 41,279 | 21,595 | 22,476 | 3,661 | 44,471 | 33,728 | 10,743 | |||||||||||||||||||||||||||||
Interest expense | 35,851 | 35,627 | (9,660 | ) | 36,065 | 35,211 | 640 | 71,478 | 70,295 | 1,183 | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 5,258 | 6,071 | 3,710 | 2,571 | 2,591 | 2,667 | 11,329 | 5,160 | 6,169 | |||||||||||||||||||||||||||||
Total benefits and expenses | 45,606 | 39,709 | 11,397 | 40,048 | 43,140 | 2,466 | 85,315 | 70,601 | 14,714 | |||||||||||||||||||||||||||||
Operating income (loss) before income taxes | (9,938 | ) | (5,670 | ) | 22,627 | (13,163 | ) | (14,072 | ) | 4,134 | (15,608 | ) | (10,790 | ) | (4,818 | ) | ||||||||||||||||||||||
Operating to U.S. GAAP Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Operating income (loss) before income taxes | (9,938 | ) | (5,670 | ) | 22,627 | (13,163 | ) | (14,072 | ) | 4,134 | (15,608 | ) | (10,790 | ) | (4,818 | ) | ||||||||||||||||||||||
Investment and derivative gains (losses) - non-operating | 1,252 | (2,280 | ) | (3,696 | ) | (960 | ) | (6,125 | ) | 7,377 | (1,028 | ) | (5,643 | ) | 4,615 | |||||||||||||||||||||||
Non-investment derivatives | (41 | ) | (40 | ) | (40 | ) | (28 | ) | — | (41 | ) | (81 | ) | — | (81 | ) | ||||||||||||||||||||||
Income (loss) before income taxes | $ | (8,727 | ) | $ | (7,990 | ) | $ | 18,891 | $ | (14,151 | ) | $ | (20,197 | ) | $ | 11,470 | $ | (16,717 | ) | $ | (16,433 | ) | $ | (284 | ) | |||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | (1,173 | ) | $ | (528 | ) | $ | (1,196 | ) | $ | (1,403 | ) | $ | (1,263 | ) | $ | 90 | $ | (1,701 | ) | $ | (2,969 | ) | $ | 1,268 | |||||||||||||
(1) Compared to comparable prior year period | ||||||||||||||||||||||||||||||||||||||
| Page 17 | |
Reinsurance Group of America, Incorporated Summary of Pre-tax Segment Operating Income | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
(USD thousands) | 2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | ||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 79,433 | $ | 20,316 | $ | 134,120 | $ | 78,925 | $ | 88,954 | $ | (9,521 | ) | $ | 99,749 | $ | 137,157 | $ | (37,408 | ) | ||||||||||||||||||
Non-Traditional: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 56,402 | 40,334 | 56,014 | 57,976 | 44,027 | 12,375 | 96,736 | 85,032 | 11,704 | |||||||||||||||||||||||||||||
Financial Reinsurance | 14,643 | 12,365 | 12,530 | 13,804 | 13,609 | 1,034 | 27,008 | 26,035 | 973 | |||||||||||||||||||||||||||||
Total U.S. and Latin America | 150,478 | 73,015 | 202,664 | 150,705 | 146,590 | 3,888 | 223,493 | 248,224 | (24,731 | ) | ||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | 23,759 | 17,173 | 18,198 | 24,855 | 27,743 | (3,984 | ) | 40,932 | 49,276 | (8,344 | ) | |||||||||||||||||||||||||||
Canada Non-Traditional | 3,094 | 4,131 | 1,731 | 881 | 2,983 | 111 | 7,225 | 3,573 | 3,652 | |||||||||||||||||||||||||||||
Total Canada | 26,853 | 21,304 | 19,929 | 25,736 | 30,726 | (3,873 | ) | 48,157 | 52,849 | (4,692 | ) | |||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 9,159 | 10,433 | 9,899 | 20,291 | 23,050 | (13,891 | ) | 19,592 | 20,927 | (1,335 | ) | |||||||||||||||||||||||||||
Europe, Middle East and Africa Non-Traditional | 31,834 | 18,635 | 23,884 | 23,689 | 21,631 | 10,203 | 50,469 | 37,730 | 12,739 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 40,993 | 29,068 | 33,783 | 43,980 | 44,681 | (3,688 | ) | 70,061 | 58,657 | 11,404 | ||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 4,315 | 52,648 | 18,027 | 24,626 | 26,263 | (21,948 | ) | 56,963 | 45,010 | 11,953 | ||||||||||||||||||||||||||||
Asia Pacific Non-Traditional | 651 | 10,124 | 7,226 | 2,818 | 3,064 | (2,413 | ) | 10,775 | 8,975 | 1,800 | ||||||||||||||||||||||||||||
Total Asia Pacific | 4,966 | 62,772 | 25,253 | 27,444 | 29,327 | (24,361 | ) | 67,738 | 53,985 | 13,753 | ||||||||||||||||||||||||||||
Corporate and Other | (9,938 | ) | (5,670 | ) | 22,627 | (13,163 | ) | (14,072 | ) | 4,134 | (15,608 | ) | (10,790 | ) | (4,818 | ) | ||||||||||||||||||||||
Consolidated | $ | 213,352 | $ | 180,489 | $ | 304,256 | $ | 234,702 | $ | 237,252 | $ | (23,900 | ) | $ | 393,841 | $ | 402,925 | $ | (9,084 | ) | ||||||||||||||||||
| Page 18 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Cash and Invested Assets | ||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | ||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 28,063,975 | $ | 25,801,223 | $ | 25,480,972 | $ | 24,475,451 | $ | 24,480,396 | ||||||||||
Mortgage loans on real estate | 3,073,313 | 2,913,486 | 2,712,238 | 2,617,091 | 2,555,800 | |||||||||||||||
Policy loans | 1,438,156 | 1,284,085 | 1,284,284 | 1,249,948 | 1,250,635 | |||||||||||||||
Funds withheld at interest | 5,840,076 | 5,841,554 | 5,922,561 | 5,969,006 | 5,940,521 | |||||||||||||||
Short-term investments | 76,118 | 89,136 | 97,694 | 44,437 | 45,596 | |||||||||||||||
Other invested assets | 1,110,107 | 1,243,033 | 1,198,319 | 1,165,021 | 1,128,375 | |||||||||||||||
Cash and cash equivalents | 1,335,661 | 1,083,179 | 1,645,669 | 1,118,745 | 1,378,117 | |||||||||||||||
Total cash and invested assets | $ | 40,937,406 | $ | 38,255,696 | $ | 38,341,737 | $ | 36,639,699 | $ | 36,779,440 | ||||||||||
Investment Income and Yield Summary | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | |||||||||||||||||||||||||||||||
Average invested assets at amortized cost (1) | $ | 21,029,197 | $ | 21,073,262 | $ | 20,672,245 | $ | 20,424,141 | $ | 20,121,261 | $ | 907,936 | $ | 20,926,385 | $ | 19,807,087 | $ | 1,119,298 | ||||||||||||||||||||
Net investment income (1) | $ | 252,131 | $ | 247,239 | $ | 250,757 | $ | 240,877 | $ | 236,604 | $ | 15,527 | $ | 499,369 | $ | 466,248 | $ | 33,121 | ||||||||||||||||||||
Annualized investment yield (ratio of net investment income to average invested assets) (1) | 4.88 | % | 4.78 | % | 4.94 | % | 4.80 | % | 4.79 | % | 0.09 | % | 4.83 | % | 4.76 | % | 0.07 | % | ||||||||||||||||||||
(1) Excludes spread-related business (e.g. coinsurance of annuities) | ||||||||||||||||||||||||||||||||||||||
| Page 19 | |
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) | |||||||||||||||||||||||
June 30, 2015 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 16,000,887 | $ | 730,409 | $ | 241,890 | $ | 16,489,406 | 58.8 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,655,763 | 1,140,904 | 2,860 | 3,793,807 | 13.5 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 1,154,732 | 47,241 | 11,094 | 1,190,879 | 4.2 | % | (300 | ) | |||||||||||||||
Asset-backed securities | 1,051,093 | 19,915 | 8,384 | 1,062,624 | 3.8 | % | 354 | ||||||||||||||||
Commercial mortgage-backed securities | 1,471,419 | 63,699 | 9,649 | 1,525,469 | 5.4 | % | (1,609 | ) | |||||||||||||||
U.S. government and agencies | 1,332,518 | 18,149 | 86,669 | 1,263,998 | 4.5 | % | — | ||||||||||||||||
State and political subdivisions | 478,262 | 38,891 | 10,981 | 506,172 | 1.8 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,160,658 | 88,674 | 17,712 | 2,231,620 | 8.0 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 26,305,332 | $ | 2,147,882 | $ | 389,239 | $ | 28,063,975 | 100.0 | % | $ | (1,555 | ) | ||||||||||
Non-redeemable preferred stock | 91,717 | 2,477 | 3,620 | 90,574 | 70.9 | % | |||||||||||||||||
Other equity securities | 37,642 | 434 | 982 | 37,094 | 29.1 | % | |||||||||||||||||
Total equity securities | $ | 129,359 | $ | 2,911 | $ | 4,602 | $ | 127,668 | 100.0 | % | |||||||||||||
December 31, 2014 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 14,010,604 | $ | 965,523 | $ | 90,544 | $ | 14,885,583 | 58.4 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,668,852 | 1,196,420 | 7 | 3,865,265 | 15.2 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 991,867 | 52,640 | 6,611 | 1,037,896 | 4.1 | % | (300 | ) | |||||||||||||||
Asset-backed securities | 1,059,660 | 20,301 | 10,375 | 1,069,586 | 4.2 | % | 354 | ||||||||||||||||
Commercial mortgage-backed securities | 1,453,657 | 87,593 | 8,659 | 1,532,591 | 6.0 | % | (1,609 | ) | |||||||||||||||
U.S. government and agencies | 501,352 | 25,014 | 515 | 525,851 | 2.0 | % | — | ||||||||||||||||
State and political subdivisions | 378,457 | 51,117 | 3,498 | 426,076 | 1.7 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,041,148 | 110,065 | 13,089 | 2,138,124 | 8.4 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 23,105,597 | $ | 2,508,673 | $ | 133,298 | $ | 25,480,972 | 100.0 | % | $ | (1,555 | ) | ||||||||||
Non-redeemable preferred stock | 93,540 | 7,350 | 1,527 | 99,363 | 78.3 | % | |||||||||||||||||
Other equity securities | 26,994 | 597 | 94 | 27,497 | 21.7 | % | |||||||||||||||||
Total equity securities | $ | 120,534 | $ | 7,947 | $ | 1,621 | $ | 126,860 | 100.0 | % | |||||||||||||
| Page 20 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Corporate Fixed Maturities Securities by Sector (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||||
June 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | % of Total | Average Credit Ratings (1) | Amortized Cost | Estimated Fair Value | % of Total | Average Credit Ratings (1) | |||||||||||||||||||
Financial Institutions | ||||||||||||||||||||||||||
Banking | $ | 3,354,601 | $ | 3,456,457 | 21.0 | % | A- | $ | 3,085,645 | $ | 3,227,988 | 21.6 | % | A- | ||||||||||||
Brokerage/Asset Managers/Exchanges | 289,357 | 302,967 | 1.8 | % | A | 247,955 | 268,439 | 1.8 | % | A | ||||||||||||||||
Finance Comp. | 190,315 | 200,090 | 1.2 | % | A+ | 187,055 | 199,781 | 1.3 | % | A+ | ||||||||||||||||
Insurance | 769,652 | 803,390 | 4.9 | % | A- | 692,464 | 758,825 | 5.1 | % | A- | ||||||||||||||||
REITs | 574,008 | 592,462 | 3.6 | % | BBB+ | 513,412 | 544,302 | 3.7 | % | BBB+ | ||||||||||||||||
Other Finance | 60,467 | 64,055 | 0.4 | % | A- | 63,037 | 67,073 | 0.5 | % | BBB+ | ||||||||||||||||
Total Financial Institutions | $ | 5,238,400 | $ | 5,419,421 | 32.9 | % | $ | 4,789,568 | $ | 5,066,408 | 34.0 | % | ||||||||||||||
Industrials | ||||||||||||||||||||||||||
Basic | 977,044 | 992,267 | 6.0 | % | BBB | 893,754 | 921,843 | 6.2 | % | BBB | ||||||||||||||||
Capital Goods | 867,563 | 880,992 | 5.3 | % | BBB | 657,388 | 694,700 | 4.7 | % | BBB | ||||||||||||||||
Communications | 1,683,665 | 1,737,788 | 10.5 | % | BBB | 1,448,054 | 1,572,181 | 10.6 | % | BBB+ | ||||||||||||||||
Consumer Cyclical | 827,727 | 858,219 | 5.2 | % | BBB+ | 665,675 | 709,100 | 4.8 | % | BBB+ | ||||||||||||||||
Consumer Noncyclical | 1,490,610 | 1,533,919 | 9.3 | % | BBB+ | 1,299,879 | 1,397,510 | 9.4 | % | BBB+ | ||||||||||||||||
Energy | 2,028,256 | 2,056,070 | 12.5 | % | BBB+ | 1,647,847 | 1,699,885 | 11.2 | % | BBB | ||||||||||||||||
Technology | 520,085 | 530,159 | 3.2 | % | BBB+ | 465,256 | 485,833 | 3.3 | % | BBB+ | ||||||||||||||||
Transportation | 560,474 | 582,725 | 3.5 | % | A- | 453,106 | 486,736 | 3.3 | % | A- | ||||||||||||||||
Other Industrial | 101,858 | 109,123 | 0.7 | % | BBB+ | 108,371 | 118,279 | 0.8 | % | A- | ||||||||||||||||
Total Industrials | $ | 9,057,282 | $ | 9,281,262 | 56.2 | % | $ | 7,639,330 | $ | 8,086,067 | 54.3 | % | ||||||||||||||
Utilities | ||||||||||||||||||||||||||
Electric | 1,302,632 | 1,366,480 | 8.3 | % | BBB+ | 1,192,487 | 1,309,874 | 8.8 | % | BBB+ | ||||||||||||||||
Natural Gas | 240,582 | 249,089 | 1.5 | % | A- | 234,761 | 251,110 | 1.7 | % | A- | ||||||||||||||||
Other Utility | 161,991 | 173,154 | 1.1 | % | BBB+ | 154,458 | 172,124 | 1.2 | % | A- | ||||||||||||||||
Total Utilities | $ | 1,705,205 | $ | 1,788,723 | 10.9 | % | $ | 1,581,706 | $ | 1,733,108 | 11.7 | % | ||||||||||||||
Total | $ | 16,000,887 | $ | 16,489,406 | 100.0 | % | BBB+ | $ | 14,010,604 | $ | 14,885,583 | 100.0 | % | BBB+ | ||||||||||||
(1) The Average Credit Rating designations are based on the weighted average ratings from nationally recognized rating organizations, primarily those assigned by S&P. In instances where a S&P rating is not available, the Company will reference the rating provided by Moody’s, and in the absence of both the Company will assign equivalent ratings based on information from the NAIC. | ||||||||||||||||||||||||||
| Page 21 | |
Reinsurance Group of America, Incorporated
Investments
(USD thousands)
Ratings of Fixed Maturity Securities (Excludes Funds Withheld Portfolios) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
NAIC Designation (1) | Rating Agency Designation (2) | 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/AA/A | $ | 16,880,974 | $ | 18,443,284 | 65.7 | % | $ | 14,515,363 | $ | 16,887,466 | 65.4 | % | $ | 14,855,946 | $ | 16,866,777 | 66.1 | % | $ | 14,590,478 | $ | 16,236,196 | 66.3 | % | $ | 14,646,888 | $ | 16,304,796 | 66.6 | % | ||||||||||||||||||||||||||
2 | BBB | 7,686,514 | 7,881,514 | 28.1 | % | 6,957,089 | 7,450,140 | 28.9 | % | 6,880,383 | 7,258,299 | 28.5 | % | 6,530,399 | 6,895,202 | 28.2 | % | 6,527,092 | 6,942,290 | 28.3 | % | ||||||||||||||||||||||||||||||||||||
3 | BB | 932,629 | 950,069 | 3.4 | % | 799,090 | 825,796 | 3.2 | % | 750,152 | 760,531 | 3.0 | % | 729,311 | 751,110 | 3.1 | % | 669,569 | 706,926 | 2.9 | % | ||||||||||||||||||||||||||||||||||||
4 | B | 510,894 | 504,272 | 1.8 | % | 419,277 | 404,081 | 1.6 | % | 387,456 | 372,375 | 1.5 | % | 425,094 | 421,100 | 1.7 | % | 362,960 | 364,395 | 1.5 | % | ||||||||||||||||||||||||||||||||||||
5 | CCC | 246,203 | 242,930 | 0.9 | % | 219,271 | 214,370 | 0.8 | % | 212,905 | 208,346 | 0.8 | % | 152,363 | 150,845 | 0.6 | % | 143,292 | 142,805 | 0.6 | % | ||||||||||||||||||||||||||||||||||||
6 | In or near default | 48,118 | 41,906 | 0.1 | % | 23,626 | 19,370 | 0.1 | % | 18,755 | 14,644 | 0.1 | % | 25,296 | 20,998 | 0.1 | % | 23,545 | 19,184 | 0.1 | % | ||||||||||||||||||||||||||||||||||||
Total | $ | 26,305,332 | $ | 28,063,975 | 100.0 | % | $ | 22,933,716 | $ | 25,801,223 | 100.0 | % | $ | 23,105,597 | $ | 25,480,972 | 100.0 | % | $ | 22,452,941 | $ | 24,475,451 | 100.0 | % | $ | 22,373,346 | $ | 24,480,396 | 100.0 | % | |||||||||||||||||||||||||||
(1) Structured securities held by the Company’s insurance subsidiaries that maintain the National Association of Insurance Commissioners (NAIC) statutory basis of accounting that meet the definition of SSAP No. 43R utilize the NAIC rating methodology. All other securities will continue to utilize the Nationally Recognized Statistical Rating Organizations (NRSRO) ratings, as available, or equivalent rating based on information from the NAIC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) The Rating Agency Designation includes all “+” or “-” at that rating level (e. g. ‘BBB’ includes ‘BBB+’, ‘BBB’, and ‘BBB-’). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Structured Fixed Maturity Securities | ||||||||||||||||||||||||||||||||||||||||
June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | ||||||||||||||||||||||||||||||||||||
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 | $ | 626,139 | $ | 656,940 | $ | 644,367 | $ | 692,101 | $ | 639,936 | $ | 677,352 | $ | 597,413 | $ | 625,070 | $ | 564,397 | $ | 594,042 | ||||||||||||||||||||
Non-agency | 528,593 | 533,939 | 428,048 | 435,573 | 351,931 | 360,544 | 367,023 | 375,647 | 382,034 | 392,097 | ||||||||||||||||||||||||||||||
Total residential mortgage-backed securities | 1,154,732 | 1,190,879 | 1,072,415 | 1,127,674 | 991,867 | 1,037,896 | 964,436 | 1,000,717 | 946,431 | 986,139 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,471,419 | 1,525,469 | 1,448,372 | 1,534,274 | 1,453,657 | 1,532,591 | 1,404,648 | 1,481,822 | 1,380,622 | 1,474,620 | ||||||||||||||||||||||||||||||
Asset-backed securities | 1,051,093 | 1,062,624 | 1,082,883 | 1,098,112 | 1,059,660 | 1,069,586 | 993,028 | 1,006,048 | 993,116 | 1,008,375 | ||||||||||||||||||||||||||||||
Total | $ | 3,677,244 | $ | 3,778,972 | $ | 3,603,670 | $ | 3,760,060 | $ | 3,505,184 | $ | 3,640,073 | $ | 3,362,112 | $ | 3,488,587 | $ | 3,320,169 | $ | 3,469,134 | ||||||||||||||||||||
| Page 22 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Gross Unrealized Losses Aging Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||
June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | |||||||||||||||||||||||||||||||
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% | $ | 369,658 | 94.0 | % | $ | 71,886 | 72.3 | % | $ | 110,346 | 81.8 | % | $ | 107,731 | 89.1 | % | $ | 96,330 | 85.8 | % | |||||||||||||||
20% or more for less than six months | 9,253 | 2.3 | % | 14,581 | 14.7 | % | 13,698 | 10.1 | % | 683 | 0.6 | % | 2,479 | 2.2 | % | ||||||||||||||||||||
20% or more for six months or greater | 10,328 | 2.6 | % | 11,546 | 11.6 | % | 9,254 | 6.9 | % | 9,510 | 7.9 | % | 10,936 | 9.7 | % | ||||||||||||||||||||
Total | $ | 389,239 | 98.9 | % | $ | 98,013 | 98.6 | % | $ | 133,298 | 98.8 | % | $ | 117,924 | 97.6 | % | $ | 109,745 | 97.7 | % | |||||||||||||||
Equity Securities | |||||||||||||||||||||||||||||||||||
June 30, 2015 | March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | |||||||||||||||||||||||||||||||
Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | ||||||||||||||||||||||||||
Less than 20% | $ | 3,654 | 0.9 | % | $ | 712 | 0.7 | % | $ | 1,619 | 1.2 | % | $ | 2,926 | 2.4 | % | $ | 2,555 | 2.3 | % | |||||||||||||||
20% or more for less than six months | 948 | 0.2 | % | 737 | 0.7 | % | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | ||||||||||||||||||||
20% or more for six months or greater | — | 0.0 | % | — | 0.0 | % | 2 | 0.0 | % | 2 | 0.0 | % | 2 | 0.0 | % | ||||||||||||||||||||
Total | $ | 4,602 | 1.1 | % | $ | 1,449 | 1.4 | % | $ | 1,621 | 1.2 | % | $ | 2,928 | 2.4 | % | $ | 2,557 | 2.3 | % | |||||||||||||||
| Page 23 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Fixed Maturities and Equity Securities Below Amortized Cost (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||
As of June 30, 2015 | ||||||||||||||||||||||||
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 | $ | 4,719,168 | $ | 194,881 | $ | 299,379 | $ | 17,451 | $ | 5,018,547 | $ | 212,332 | ||||||||||||
Canadian and Canadian provincial governments | 117,996 | 2,860 | — | — | 117,996 | 2,860 | ||||||||||||||||||
Residential mortgage-backed securities | 309,772 | 6,659 | 64,855 | 3,772 | 374,627 | 10,431 | ||||||||||||||||||
Asset-backed securities | 294,220 | 3,101 | 126,602 | 3,504 | 420,822 | 6,605 | ||||||||||||||||||
Commercial mortgage-backed securities | 220,262 | 4,376 | 22,831 | 1,392 | 243,093 | 5,768 | ||||||||||||||||||
U.S. government and agencies | 862,953 | 86,669 | — | — | 862,953 | 86,669 | ||||||||||||||||||
State and political subdivisions | 157,210 | 7,399 | 13,180 | 3,582 | 170,390 | 10,981 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 402,345 | 13,050 | 33,829 | 1,988 | 436,174 | 15,038 | ||||||||||||||||||
Investment grade securities | 7,083,926 | 318,995 | 560,676 | 31,689 | 7,644,602 | 350,684 | ||||||||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | 553,615 | 23,667 | 58,910 | 5,891 | 612,525 | 29,558 | ||||||||||||||||||
Residential mortgage-backed securities | 31,443 | 268 | 11,779 | 395 | 43,222 | 663 | ||||||||||||||||||
Asset-backed securities | 5,305 | 84 | 12,102 | 1,695 | 17,407 | 1,779 | ||||||||||||||||||
Commercial mortgage-backed securities | 6,523 | 534 | 7,544 | 3,347 | 14,067 | 3,881 | ||||||||||||||||||
State and political subdivisions | — | — | — | — | — | — | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 62,974 | 2,502 | 3,921 | 172 | 66,895 | 2,674 | ||||||||||||||||||
Below investment grade securities | 659,860 | 27,055 | 94,256 | 11,500 | 754,116 | 38,555 | ||||||||||||||||||
Total fixed maturity securities | $ | 7,743,786 | $ | 346,050 | $ | 654,932 | $ | 43,189 | $ | 8,398,718 | $ | 389,239 | ||||||||||||
Non-redeemable preferred stock | 39,466 | 2,178 | 6,225 | 1,442 | 45,691 | 3,620 | ||||||||||||||||||
Other equity securities | 26,791 | 982 | — | — | 26,791 | 982 | ||||||||||||||||||
Total equity securities | $ | 66,257 | $ | 3,160 | $ | 6,225 | $ | 1,442 | $ | 72,482 | $ | 4,602 | ||||||||||||
As of December 31, 2014 | ||||||||||||||||||||||||
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 | $ | 1,225,767 | $ | 27,784 | $ | 614,294 | $ | 30,040 | $ | 1,840,061 | $ | 57,824 | ||||||||||||
Canadian and Canadian provincial governments | — | — | 1,235 | 7 | 1,235 | 7 | ||||||||||||||||||
Residential mortgage-backed securities | 78,864 | 846 | 135,414 | 5,247 | 214,278 | 6,093 | ||||||||||||||||||
Asset-backed securities | 332,785 | 4,021 | 109,411 | 4,289 | 442,196 | 8,310 | ||||||||||||||||||
Commercial mortgage-backed securities | 78,632 | 564 | 28,375 | 2,461 | 107,007 | 3,025 | ||||||||||||||||||
U.S. government and agencies | 81,317 | 89 | 32,959 | 426 | 114,276 | 515 | ||||||||||||||||||
State and political subdivisions | 13,780 | 17 | 18,998 | 3,438 | 32,778 | 3,455 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 156,725 | 7,007 | 76,111 | 2,946 | 232,836 | 9,953 | ||||||||||||||||||
Investment grade securities | 1,967,870 | 40,328 | 1,016,797 | 48,854 | 2,984,667 | 89,182 | ||||||||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | 415,886 | 29,316 | 32,567 | 3,404 | 448,453 | 32,720 | ||||||||||||||||||
Residential mortgage-backed securities | 22,836 | 293 | 6,284 | 225 | 29,120 | 518 | ||||||||||||||||||
Asset-backed securities | 12,448 | 274 | 7,108 | 1,791 | 19,556 | 2,065 | ||||||||||||||||||
Commercial mortgage-backed securities | 3,288 | 249 | 5,580 | 5,385 | 8,868 | 5,634 | ||||||||||||||||||
State and political subdivisions | 964 | 43 | — | — | 964 | 43 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 13,986 | 3,136 | — | — | 13,986 | 3,136 | ||||||||||||||||||
Below investment grade securities | 469,408 | 33,311 | 51,539 | 10,805 | 520,947 | 44,116 | ||||||||||||||||||
Total fixed maturity securities | $ | 2,437,278 | $ | 73,639 | $ | 1,068,336 | $ | 59,659 | $ | 3,505,614 | $ | 133,298 | ||||||||||||
Non-redeemable preferred stock | 11,619 | 235 | 19,100 | 1,292 | 30,719 | 1,527 | ||||||||||||||||||
Other equity securities | — | — | 3,545 | 94 | 3,545 | 94 | ||||||||||||||||||
Total equity securities | $ | 11,619 | $ | 235 | $ | 22,645 | $ | 1,386 | $ | 34,264 | $ | 1,621 | ||||||||||||
| Page 24 | |
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 | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
2015 | 2015 | 2014 | 2014 | 2014 | 2015 | 2014 | Change | |||||||||||||||||||||||||||||||
Fixed Maturity and Equity Securities: | ||||||||||||||||||||||||||||||||||||||
Other-than-temporary impairment losses on fixed maturities | $ | (4,137 | ) | $ | (2,527 | ) | $ | (6,347 | ) | $ | (246 | ) | $ | (870 | ) | $ | (3,267 | ) | $ | (6,664 | ) | $ | (1,173 | ) | $ | (5,491 | ) | |||||||||||
Portion of loss recognized in accumulated other comprehensive income (before taxes) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Net other-than-temporary impairment losses on fixed maturities recognized in earnings | (4,137 | ) | (2,527 | ) | (6,347 | ) | (246 | ) | (870 | ) | (3,267 | ) | (6,664 | ) | (1,173 | ) | (5,491 | ) | ||||||||||||||||||||
Gain on investment activity | 20,009 | 19,201 | 13,662 | 8,819 | 34,887 | (14,878 | ) | 39,210 | 42,954 | (3,744 | ) | |||||||||||||||||||||||||||
Loss on investment activity | (14,475 | ) | (13,596 | ) | (11,480 | ) | (6,355 | ) | (6,877 | ) | (7,598 | ) | (28,071 | ) | (13,460 | ) | (14,611 | ) | ||||||||||||||||||||
Net gain/(loss) on fixed maturity and equity securities | 1,397 | 3,078 | (4,165 | ) | 2,218 | 27,140 | (25,743 | ) | 4,475 | 28,321 | (23,846 | ) | ||||||||||||||||||||||||||
Other impairment losses and change in mortgage loan provision | 143 | (4,168 | ) | 371 | (2,041 | ) | (5,309 | ) | 5,452 | (4,025 | ) | (3,645 | ) | (380 | ) | |||||||||||||||||||||||
Other non-derivative gain/(loss), net | 976 | 17,375 | 2,759 | 2,298 | 9,197 | (8,221 | ) | 18,351 | 17,565 | 786 | ||||||||||||||||||||||||||||
Free-standing Derivatives: | ||||||||||||||||||||||||||||||||||||||
Credit default swaps | (187 | ) | 2,658 | 2,658 | (1,389 | ) | 4,783 | (4,970 | ) | 2,471 | 2,669 | (198 | ) | |||||||||||||||||||||||||
Interest rate swaps - non-hedged | (41,729 | ) | 29,344 | 33,812 | 9,114 | 22,244 | (63,973 | ) | (12,385 | ) | 51,903 | (64,288 | ) | |||||||||||||||||||||||||
Interest rate swaps - hedged | — | 7 | 10 | 8 | 7 | (7 | ) | 7 | 1 | 6 | ||||||||||||||||||||||||||||
Futures | (2,183 | ) | (7,331 | ) | (6,728 | ) | 6,446 | (7,684 | ) | 5,501 | (9,514 | ) | (9,268 | ) | (246 | ) | ||||||||||||||||||||||
CPI swaps | 168 | (71 | ) | (536 | ) | (274 | ) | 115 | 53 | 97 | 467 | (370 | ) | |||||||||||||||||||||||||
Equity options | (2,605 | ) | (8,067 | ) | (5,724 | ) | 1,017 | (8,800 | ) | 6,195 | (10,672 | ) | (17,765 | ) | 7,093 | |||||||||||||||||||||||
Currency forwards | (1,433 | ) | (220 | ) | (5,746 | ) | (5,277 | ) | 1,178 | (2,611 | ) | (1,653 | ) | 2,332 | (3,985 | ) | ||||||||||||||||||||||
Bond forwards | 1,495 | (840 | ) | — | — | — | 1,495 | 655 | — | 655 | ||||||||||||||||||||||||||||
Interest rate options | — | 3,276 | 11,490 | 865 | 2,004 | (2,004 | ) | 3,276 | 3,286 | (10 | ) | |||||||||||||||||||||||||||
Total free-standing derivatives | (46,474 | ) | 18,756 | 29,236 | 10,510 | 13,847 | (60,321 | ) | (27,718 | ) | 33,625 | (61,343 | ) | |||||||||||||||||||||||||
Embedded Derivatives: | ||||||||||||||||||||||||||||||||||||||
Modified coinsurance and funds withheld treaties | (23,098 | ) | (2,325 | ) | (14,523 | ) | 56,812 | 78,835 | (101,933 | ) | (25,423 | ) | 156,076 | (181,499 | ) | |||||||||||||||||||||||
GMXB | 50,878 | (25,133 | ) | (52,901 | ) | (47,479 | ) | (5,183 | ) | 56,061 | 25,745 | (28,844 | ) | 54,589 | ||||||||||||||||||||||||
Total embedded derivatives | 27,780 | (27,458 | ) | (67,424 | ) | 9,333 | 73,652 | (45,872 | ) | 322 | 127,232 | (126,910 | ) | |||||||||||||||||||||||||
Net gain/(loss) on total derivatives | (18,694 | ) | (8,702 | ) | (38,188 | ) | 19,843 | 87,499 | (106,193 | ) | (27,396 | ) | 160,857 | (188,253 | ) | |||||||||||||||||||||||
Total investment related gains / (losses), net | $ | (16,178 | ) | $ | 7,583 | $ | (39,223 | ) | $ | 22,318 | $ | 118,527 | $ | (134,705 | ) | $ | (8,595 | ) | $ | 203,098 | $ | (211,693 | ) | |||||||||||||||
| Page 25 | |