UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 26, 2016
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 October 26, 2016, Reinsurance Group of America, Incorporated issued (1) a press release (the "Press Release") announcing its earnings for the three-month period ended September 30, 2016, and providing certain additional information, a copy of which is furnished with this report as Exhibit 99.1, and (2) a quarterly financial supplement (the "Quarterly Financial Supplement") for the quarter ended September 30, 2016, a copy of which is attached hereto as Exhibit 99.2. The Press Release also notes that a conference call will be held on October 27, 2016 to discuss the financial and operating results for the three-month period ended September 30, 2016. The information set forth in this Current Report on Form 8-K, including the Press Release and Quarterly Financial Supplement, is being furnished and shall not be deemed to be "filed", as described in Instruction B.2 of Form 8-K.
Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
Exhibit No. | Exhibit | |
99.1 | Press Release of Reinsurance Group of America, Incorporated dated October 26, 2016 | |
99.2 | Quarterly Financial Supplement for the quarter ended September 30, 2016 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
REINSURANCE GROUP OF AMERICA, INCORPORATED | ||||||
Date: October 26, 2016 | By: | /s/ Todd C. Larson | ||||
Todd C. Larson | ||||||
Senior Executive Vice President and Chief Financial Officer | ||||||
EXHIBIT INDEX
Exhibit Number | Description | |
99.1 | Press Release dated October 26, 2016 | |
99.2 | Quarterly Financial Supplement for the quarter ended September 30, 2016 | |
Exhibit 99.1
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS THIRD-QUARTER RESULTS
• | Earnings per diluted share: $3.07 from net income, $2.46 from operating income* |
• | ROE 10 percent and Operating ROE* 12 percent for the trailing twelve months |
• | Reported net premiums increased 8 percent |
ST. LOUIS, October 26, 2016 - Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported net income of $198.7 million, or $3.07 per diluted share, compared with $83.5 million, or $1.25 per diluted share, in the prior-year quarter. Operating income* totaled $159.4 million, or $2.46 per diluted share, compared to $127.1 million, or $1.90 per diluted share, the year before. Net foreign currency fluctuations had an adverse effect of $0.04 per diluted share on net income, and $0.03 per diluted share on operating income, primarily within the EMEA segment. Tax-related adjustments added $0.08 per share to the quarter.
Quarterly Results | Year-to-Date Results | |||||||||||||||
($ in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net premiums | $ | 2,251,758 | $ | 2,089,345 | $ | 6,755,708 | $ | 6,242,240 | ||||||||
Net income | 198,719 | 83,534 | 511,294 | 339,039 | ||||||||||||
Net income per diluted share | 3.07 | 1.25 | 7.87 | 5.01 | ||||||||||||
Operating income* | 159,361 | 127,086 | 461,339 | 379,134 | ||||||||||||
Operating income per diluted share* | 2.46 | 1.90 | 7.10 | 5.60 | ||||||||||||
Book value per share | 124.50 | 94.92 | ||||||||||||||
Book value per share, excluding Accumulated Other Comprehensive Income (AOCI)* | 90.04 | 81.14 | ||||||||||||||
Total assets | 54,832,498 | 47,581,959 | ||||||||||||||
* | See ‘Use of Non-GAAP Financial Measures’ below |
Consolidated net premiums totaled $2.3 billion this quarter, up 8 percent from last year’s third quarter. Current-period premiums reflected net adverse foreign currency effects of approximately $21.0 million. Excluding spread-based businesses and the value of associated derivatives, investment income rose 10 percent over year-ago levels, attributable to an increase in average invested assets of approximately 15 percent, offset in part by the impact of lower yield on new money and reinvested assets. The average investment yield, excluding spread businesses, was down 23 basis points to 4.43 percent from the third quarter of 2015, and 28 basis points lower than the second-quarter yield.
The effective tax rate was approximately 31 percent on both net income and operating income this quarter, below an expected range of 34 percent to 35 percent, largely due to the effective settlement of uncertain tax positions during the quarter that totaled $5.0 million, or $0.08 per share.
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Greig Woodring, chief executive officer, commented, “This was another good quarter, and we are pleased that we have been able to continue delivering strong bottom-line results and solid overall momentum, despite ongoing macroeconomic uncertainties. It was another quarter in which diversified earnings sources, inherent in our global operating model, were key to a positive result.
“Highlights of the quarter included continued strong results from our Traditional business in Asia and Global Financial Solutions lines in the U.S. and EMEA. These areas more than offset normal claims volatility in our U.S. Individual Mortality business and seasonal weakness in Australia. Overall top-line premium growth was fairly vibrant again at 8 percent, or 9 percent in constant currencies, based upon solid organic growth and in-force transactions.
“We were less active in the quarter in terms of our share repurchases, buying back 4,700 shares as we continue to position ourselves to pursue a balanced approach to capital management over time. We closed some smaller in-force transactions during the quarter, and there continues to be an active pipeline of opportunities. Our deployable excess capital position was approximately $1.0 billion at September 30, and our ending book value per share this quarter was $124.50 including AOCI. Excluding AOCI, book value per share was $90.04, an 11 percent increase over that of a year ago.
“Looking forward, we continue to see good demand from clients for our risk mitigation solutions, and we expect to continue to execute well in both our traditional and transactional businesses.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
The U.S. and Latin America Traditional segment reported pre-tax net income of $77.1 million, compared with $55.7 million in the third quarter of 2015. Pre-tax operating income totaled $80.5 million for the quarter, compared with $54.7 million in last year’s third quarter. Results for the current quarter reflect moderately unfavorable claims experience in the Individual Mortality business, offset in part by favorable experience in the Group and Individual Health business lines. Results in the year-ago quarter reflected unusually poor individual mortality experience.
Traditional net premiums increased a healthy 11 percent from last year’s third quarter to $1,277.5 million.
Non-Traditional
The Asset-Intensive business reported pre-tax net income of $88.7 million compared with $24.2 million last year. Third-quarter pre-tax operating income totaled $58.7 million compared with $55.2 million last year. Both periods' operating income was strong due to favorable investment spreads, and the addition of new blocks.
The Financial Reinsurance business reported pre-tax net income and pre-tax operating income of $14.0 million, up from $12.1 million the year before, due to new business added in 2016.
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Canada
Traditional
The Canada Traditional segment reported pre-tax net income of $34.3 million compared with $34.1 million the year before. Pre-tax operating income totaled $30.6 million compared with $37.8 million in the third quarter of 2015. Current-quarter results were in line with expectations, whereas last year’s quarter had better-than-expected claims experience.
Reported net premiums increased 16 percent to $231.2 million, attributable to strong growth in the creditor business and solid growth in individual mortality.
Non-Traditional
The Canada Non-Traditional business segment, which consists of longevity and fee-based transactions, reported pre-tax net income and pre-tax operating income declined to $1.2 million from $3.3 million a year ago, reflecting less-favorable longevity experience.
Europe, Middle East and Africa (EMEA)
Traditional
The EMEA Traditional segment reported pre-tax net income of $8.5 million versus $15.9 million in last year’s third quarter. Pre-tax operating income totaled $8.5 million, down from $15.6 million in the prior-year period. Current-period results included unfavorable claims experience in the U.K., while last year’s third quarter had favorable overall claims experience.
Reported net premiums decreased slightly to $275.5 million from $276.1 million in the prior-year period. Foreign currency exchange rates adversely affected net premiums by $32.6 million.
Non-Traditional
The EMEA Non-Traditional business segment includes longevity, asset-intensive and fee-based transactions. Pre-tax net income totaled $43.8 million compared with $29.2 million in the year-ago period. Pre-tax operating income increased to $33.9 million compared with $28.8 million the year before. Current-period results reflected continued favorable experience in both the asset-intensive and
longevity businesses. Net foreign currency fluctuations adversely affected pre-tax net income by $6.2 million and pre-tax operating income by $4.7 million.
Asia Pacific
Traditional
The Asia Pacific Traditional segment reported pre-tax net income of $19.8 million, up from $11.3 million in the prior-year period. Pre-tax operating income totaled $19.8 million compared with $13.0 million a year ago. Underwriting experience was favorable across Asia with particularly strong results in Hong Kong, but was somewhat offset by seasonally high claims in Australia.
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Reported net premiums rose modestly to $404.5 million from $400.3 million in the prior-year period, reflecting large offsetting variances in Australia and Asia. Australia premiums were down 20 percent, or 24 percent on a constant currency basis, due to the non-renewal of certain treaties and various premium refunds. Asia premiums were up 17 percent, or 11 percent in constant currency, reflecting healthy growth across the region.
Non-Traditional
The Asia Pacific Non-Traditional business segment includes asset-intensive, fee-based and other various transactions. Pre-tax net income totaled $7.5 million compared with pre-tax income of $5.4 million last year. Pre-tax operating income decreased to $2.3 million from $6.3 million in the prior-year quarter, primarily due to unfavorable results on one treaty that is running off. Net foreign currency exchange rate fluctuations had a favorable effect of $0.9 million on pre-tax net income and $0.5 million on pre-tax operating income.
Corporate and Other
The Corporate and Other segment’s pre-tax net losses totaled $7.3 million compared with a pre-tax net loss of $50.9 million the year before. Pre-tax operating losses were $19.0 million, versus the year-ago pre-tax loss of $19.7 million, in line with expectations.
Dividend Declaration
The board of directors declared a regular quarterly dividend of $0.41, payable November 29 to shareholders of record as of November 8.
Earnings Conference Call
A conference call to discuss third-quarter results will begin at 11 a.m. Eastern Time on Thursday, October 27. Interested parties may access the call by dialing 877-879-6174 (domestic) or 719-325-4849 (international). The access code is 1763380. 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 Friday, November 4 at 888-203-1112 (domestic) or 719-457-0820 (international), access code 1763380.
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
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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 excluding the 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.
About RGA
Reinsurance Group of America, Incorporated is among the largest global providers of life reinsurance, with operations in Australia, Barbados, Bermuda, Brazil, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Singapore, South Africa, South Korea, Spain, Taiwan, the United Arab Emirates, the United Kingdom and the United States. Worldwide, RGA has assumed approximately $3.1 trillion of life reinsurance in force, and total assets of $54.8 billion.
Cautionary Statement Regarding Forward-looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements relating to projections of the earnings, revenues, income or loss, ratios, future financial performance and growth potential of Reinsurance Group of America, Incorporated and its subsidiaries (which we refer to in the previous 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
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taken on the Company’s investments is highly subjective, (5) adverse changes in mortality, morbidity, lapsation or claims experience, (6) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (7) inadequate risk analysis and underwriting, (8) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, (9) the availability and cost of collateral necessary for regulatory reserves and capital, (10) market or economic conditions that adversely affect the value of the Company’s investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities, that in turn could affect regulatory capital, (11) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (12) risks inherent in the Company’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (13) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (14) adverse litigation or arbitration results, (15) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (16) the stability of and actions by governments and economies in the markets in which the Company operates, including ongoing uncertainties regarding the amount of United States sovereign debt and the credit ratings thereof, (17) competitive factors and competitors’ responses to the Company’s initiatives, (18) the success of the Company’s clients, (19) successful execution of the Company’s entry into new markets, (20) successful development and introduction of new products and distribution opportunities, (21) the Company’s ability to successfully integrate acquired blocks of business and entities, (22) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (23) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes some reinsurance, third-party investment managers and others, (24) the threat of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics anywhere in the world where the Company or its clients do business, (25) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or
sensitive data stored on such systems, (26) changes in laws, regulations, and accounting standards
applicable to the Company, its subsidiaries, or its business, (27) the effect of the Company’s status as an
insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, and (28) other risks and uncertainties described in this document and in the Company’s other filings with the Securities and Exchange Commission.
Forward-looking statements should be evaluated together with the many risks and uncertainties that affect our business, including those mentioned in this document and described in the periodic reports we file
with the Securities and Exchange Commission. These forward-looking statements speak only as of the date on which they are made. We do not undertake any obligations to update these forward-looking statements, even though our situation may change in the future. We qualify all of our forward-looking statements by these cautionary statements. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to see Item 1A - “Risk Factors” in the 2015 Annual Report, as updated by Part II, Item 1A - “Risk Factors” in the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2016.
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 September 30, | Nine Months Ended September 30, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 198,719 | $ | 83,534 | $ | 511,294 | $ | 339,039 | |||||||
Reconciliation to operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | (19,745 | ) | (22,750 | ) | (87,962 | ) | (10,183 | ) | |||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (2,159 | ) | (1,438 | ) | (12,975 | ) | (10,801 | ) | |||||||
Embedded derivatives: | |||||||||||||||
Included in investment related (gains) losses, net | (37,093 | ) | 92,002 | 32,041 | 91,793 | ||||||||||
Included in interest credited | 28 | (7,147 | ) | 7,688 | (7,261 | ) | |||||||||
DAC offset, net | 20,719 | (16,865 | ) | 12,830 | (23,454 | ) | |||||||||
Investment income on unit-linked variable annuities | (3,601 | ) | — | (5,794 | ) | — | |||||||||
Interest credited on unit-linked variable annuities | 3,601 | — | 5,794 | — | |||||||||||
Non-investment derivatives | (1,108 | ) | (250 | ) | (1,577 | ) | 1 | ||||||||
Operating income | $ | 159,361 | $ | 127,086 | $ | 461,339 | $ | 379,134 | |||||||
Reconciliation of Consolidated Income before Income Taxes to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income before income taxes | $ | 287,600 | $ | 140,137 | $ | 748,403 | $ | 538,052 | |||||||
Reconciliation to pre-tax operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | (26,958 | ) | (35,028 | ) | (126,026 | ) | (14,448 | ) | |||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (3,322 | ) | (2,212 | ) | (19,962 | ) | (16,616 | ) | |||||||
Embedded derivatives: | |||||||||||||||
Included in investment related (gains) losses, net | (57,066 | ) | 141,542 | 49,294 | 141,220 | ||||||||||
Included in interest credited | 42 | (10,995 | ) | 11,827 | (11,170 | ) | |||||||||
DAC offset, net | 31,876 | (25,945 | ) | 19,739 | (36,083 | ) | |||||||||
Investment income on unit-linked variable annuities | (5,540 | ) | — | (8,914 | ) | — | |||||||||
Interest credited on unit-linked variable annuities | 5,540 | — | 8,914 | — | |||||||||||
Non-investment derivatives | (1,705 | ) | (383 | ) | (2,426 | ) | 2 | ||||||||
Pre-tax operating income | $ | 230,467 | $ | 207,116 | $ | 680,849 | $ | 600,957 | |||||||
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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 September 30, 2016 | ||||||||||||||
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 | $ | 77,081 | $ | (69 | ) | $ | 3,463 | $ | 80,475 | ||||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 88,732 | (8,281 | ) | (1) | (21,758 | ) | (2) | 58,693 | |||||||
Financial Reinsurance | 13,982 | — | — | 13,982 | |||||||||||
Total U.S. and Latin America | 179,795 | (8,350 | ) | (18,295 | ) | 153,150 | |||||||||
Canada Traditional | 34,275 | (3,651 | ) | — | 30,624 | ||||||||||
Canada Non-Traditional | 1,160 | — | — | 1,160 | |||||||||||
Total Canada | 35,435 | (3,651 | ) | — | 31,784 | ||||||||||
EMEA Traditional | 8,515 | — | — | 8,515 | |||||||||||
EMEA Non-Traditional | 43,786 | (9,841 | ) | — | 33,945 | ||||||||||
Total EMEA | 52,301 | (9,841 | ) | — | 42,460 | ||||||||||
Asia Pacific Traditional | 19,822 | — | — | 19,822 | |||||||||||
Asia Pacific Non-Traditional | 7,549 | (5,283 | ) | — | 2,266 | ||||||||||
Total Asia Pacific | 27,371 | (5,283 | ) | — | 22,088 | ||||||||||
Corporate and Other | (7,302 | ) | (11,713 | ) | — | (19,015 | ) | ||||||||
Consolidated | $ | 287,600 | $ | (38,838 | ) | $ | (18,295 | ) | $ | 230,467 | |||||
(1) | Asset Intensive is net of $(6,853) DAC offset. |
(2) | Asset Intensive is net of $38,729 DAC offset. |
(Unaudited) | Three Months Ended September 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 | $ | 55,652 | $ | (1 | ) | $ | (925 | ) | $ | 54,726 | |||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 24,182 | (164,382 | ) | (1) | 195,430 | (2) | 55,230 | ||||||||
Financial Reinsurance | 12,073 | — | — | 12,073 | |||||||||||
Total U.S. and Latin America | 91,907 | (164,383 | ) | 194,505 | 122,029 | ||||||||||
Canada Traditional | 34,072 | 3,721 | — | 37,793 | |||||||||||
Canada Non-Traditional | 3,257 | — | — | 3,257 | |||||||||||
Total Canada | 37,329 | 3,721 | — | 41,050 | |||||||||||
EMEA Traditional | 15,910 | (289 | ) | — | 15,621 | ||||||||||
EMEA Non-Traditional | 29,234 | (396 | ) | — | 28,838 | ||||||||||
Total EMEA | 45,144 | (685 | ) | — | 44,459 | ||||||||||
Asia Pacific Traditional | 11,276 | 1,706 | — | 12,982 | |||||||||||
Asia Pacific Non-Traditional | 5,412 | 881 | — | 6,293 | |||||||||||
Total Asia Pacific | 16,688 | 2,587 | — | 19,275 | |||||||||||
Corporate and Other | (50,931 | ) | 31,234 | — | (19,697 | ) | |||||||||
Consolidated | $ | 140,137 | $ | (127,526 | ) | $ | 194,505 | $ | 207,116 | ||||||
(1) | Asset Intensive is net of $(89,903) DAC offset. |
(2) | Asset Intensive is net of $63,958 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) | Nine Months Ended September 30, 2016 | ||||||||||||||
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 | $ | 239,609 | $ | (3 | ) | $ | 6,379 | $ | 245,985 | ||||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 151,881 | (88,640 | ) | (1) | 95,043 | (2) | 158,284 | ||||||||
Financial Reinsurance | 44,791 | — | — | 44,791 | |||||||||||
Total U.S. and Latin America | 436,281 | (88,643 | ) | 101,422 | 449,060 | ||||||||||
Canada Traditional | 97,679 | (6,784 | ) | — | 90,895 | ||||||||||
Canada Non-Traditional | 3,880 | — | — | 3,880 | |||||||||||
Total Canada | 101,559 | (6,784 | ) | — | 94,775 | ||||||||||
EMEA Traditional | 14,233 | (5 | ) | — | 14,228 | ||||||||||
EMEA Non-Traditional | 96,679 | (10,995 | ) | — | 85,684 | ||||||||||
Total EMEA | 110,912 | (11,000 | ) | — | 99,912 | ||||||||||
Asia Pacific Traditional | 95,464 | (16 | ) | — | 95,448 | ||||||||||
Asia Pacific Non-Traditional | 16,029 | (12,319 | ) | — | 3,710 | ||||||||||
Total Asia Pacific | 111,493 | (12,335 | ) | — | 99,158 | ||||||||||
Corporate and Other | (11,842 | ) | (50,214 | ) | — | (62,056 | ) | ||||||||
Consolidated | $ | 748,403 | $ | (168,976 | ) | $ | 101,422 | $ | 680,849 | ||||||
(1) | Asset Intensive is net of $(20,562) DAC offset. |
(2) | Asset Intensive is net of $40,301 DAC offset. |
(Unaudited) | Nine Months Ended September 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 | $ | 156,288 | $ | (2 | ) | $ | (1,811 | ) | $ | 154,475 | |||||
Non-Traditional: | |||||||||||||||
Asset Intensive | 122,072 | (162,035 | ) | (1) | 191,929 | (2) | 151,966 | ||||||||
Financial Reinsurance | 39,081 | — | — | 39,081 | |||||||||||
Total U.S. and Latin America | 317,441 | (162,037 | ) | 190,118 | 345,522 | ||||||||||
Canada Traditional | 79,535 | (810 | ) | — | 78,725 | ||||||||||
Canada Non-Traditional | 10,482 | — | — | 10,482 | |||||||||||
Total Canada | 90,017 | (810 | ) | — | 89,207 | ||||||||||
EMEA Traditional | 35,551 | (338 | ) | — | 35,213 | ||||||||||
EMEA Non-Traditional | 80,300 | (993 | ) | — | 79,307 | ||||||||||
Total EMEA | 115,851 | (1,331 | ) | — | 114,520 | ||||||||||
Asia Pacific Traditional | 68,239 | 1,706 | — | 69,945 | |||||||||||
Asia Pacific Non-Traditional | 14,152 | 2,916 | — | 17,068 | |||||||||||
Total Asia Pacific | 82,391 | 4,622 | — | 87,013 | |||||||||||
Corporate and Other | (67,648 | ) | 32,343 | — | (35,305 | ) | |||||||||
Consolidated | $ | 538,052 | $ | (127,213 | ) | $ | 190,118 | $ | 600,957 | ||||||
(1) | Asset Intensive is net of $(96,151) DAC offset. |
(2) | Asset Intensive is net of $60,068 DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share data)
(Unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Earnings per share from net income: | |||||||||||||||
Basic earnings per share | $ | 3.10 | $ | 1.26 | $ | 7.95 | $ | 5.07 | |||||||
Diluted earnings per share | $ | 3.07 | $ | 1.25 | $ | 7.87 | $ | 5.01 | |||||||
Diluted earnings per share from operating income | $ | 2.46 | $ | 1.90 | $ | 7.10 | $ | 5.60 | |||||||
Weighted average number of common and common equivalent shares outstanding | 64,815 | 66,882 | 64,944 | 67,644 | |||||||||||
(Unaudited) | At September 30, | ||||||
2016 | 2015 | ||||||
Treasury shares | 14,932 | 13,389 | |||||
Common shares outstanding | 64,206 | 65,749 | |||||
Book value per share outstanding | $ | 124.50 | $ | 94.92 | |||
Book value per share outstanding, before impact of AOCI | $ | 90.04 | $ | 81.14 | |||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
(Unaudited) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues: | |||||||||||||||
Net premiums | $ | 2,251,758 | $ | 2,089,345 | $ | 6,755,708 | $ | 6,242,240 | |||||||
Investment income, net of related expenses | 489,727 | 389,597 | 1,414,659 | 1,267,027 | |||||||||||
Investment related gains (losses), net: | |||||||||||||||
Other-than-temporary impairments on fixed maturity securities | — | (23,111 | ) | (34,663 | ) | (29,775 | ) | ||||||||
Other investment related gains (losses), net | 86,624 | (88,235 | ) | 118,665 | (90,166 | ) | |||||||||
Total investment related gains (losses), net | 86,624 | (111,346 | ) | 84,002 | (119,941 | ) | |||||||||
Other revenue | 72,468 | 71,038 | 197,844 | 200,261 | |||||||||||
Total revenues | 2,900,577 | 2,438,634 | 8,452,213 | 7,589,587 | |||||||||||
Benefits and expenses: | |||||||||||||||
Claims and other policy benefits | 1,993,064 | 1,831,819 | 5,877,330 | 5,473,453 | |||||||||||
Interest credited | 116,848 | 34,008 | 300,602 | 231,932 | |||||||||||
Policy acquisition costs and other insurance expenses | 300,962 | 249,702 | 940,406 | 827,157 | |||||||||||
Other operating expenses | 152,556 | 142,270 | 469,875 | 395,488 | |||||||||||
Interest expense | 43,063 | 35,565 | 96,201 | 107,043 | |||||||||||
Collateral finance and securitization expense | 6,484 | 5,133 | 19,396 | 16,462 | |||||||||||
Total benefits and expenses | 2,612,977 | 2,298,497 | 7,703,810 | 7,051,535 | |||||||||||
Income before income taxes | 287,600 | 140,137 | 748,403 | 538,052 | |||||||||||
Provision for income taxes | 88,881 | 56,603 | 237,109 | 199,013 | |||||||||||
Net income | $ | 198,719 | $ | 83,534 | $ | 511,294 | $ | 339,039 | |||||||
# # #
Exhibit 99.2
Financial Supplement
Third Quarter 2016
(Unaudited)
World Headquarters | Internet Address | Contacts | ||
16600 Swingley Ridge Road | www.rgare.com | Todd C. Larson | ||
Chesterfield, Missouri 63017 U.S.A. | Senior Executive Vice President | |||
and Chief Financial Officer | ||||
Phone: (636) 736-7000 | ||||
e-mail: tlarson@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 dac | 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
3rd Quarter 2016
Table of Contents
Page | |
Consolidated | |
Segment Summaries of GAAP Income Statements and Operating Income Statements | |
Investments | |
Appendix | |
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 operating income before income tax is presented in the appendix.
RGA evaluates its stockholders' 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.
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.
Additionally, RGA uses a non-GAAP financial measure called book value per share excluding the impact of AOCI 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.
| Page 1 | |
Reinsurance Group of America, Incorporated
Financial Supplement
2016 Notes
PRIOR PERIOD RECLASSIFICATIONS
Effective December 31, 2015, prior period balances were updated to reflect the adoption of the accounting standard update "Simplifying the Presentation of Debt Issuance Costs".
| Page 2 | |
Reinsurance Group of America, Incorporated Financial Highlights | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to Date | ||||||||||||||||||||||||||||||||||||
(USD thousands, except in force & per share data) | Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
Net premiums | $ | 2,251,758 | $ | 2,346,945 | $ | 2,157,005 | $ | 2,328,501 | $ | 2,089,345 | $ | 162,413 | $ | 6,755,708 | $ | 6,242,240 | $ | 513,468 | ||||||||||||||||||||
Net income | 198,719 | 236,103 | 76,472 | 163,127 | 83,534 | 115,185 | 511,294 | 339,039 | 172,255 | |||||||||||||||||||||||||||||
Operating income | 159,361 | 181,228 | 120,750 | 187,950 | 127,086 | 32,275 | 461,339 | 379,134 | 82,205 | |||||||||||||||||||||||||||||
Return on equity - annualized | 10.2 | % | 13.2 | % | 4.8 | % | 10.5 | % | 5.3 | % | 4.9 | % | ||||||||||||||||||||||||||
Return on equity - trailing 12 months | 9.7 | % | 8.4 | % | 6.9 | % | 7.6 | % | 7.8 | % | 1.9 | % | ||||||||||||||||||||||||||
Operating return on equity (ex AOCI): | ||||||||||||||||||||||||||||||||||||||
Annualized | 11.2 | % | 13.2 | % | 8.9 | % | 14.0 | % | 9.5 | % | 1.7 | % | ||||||||||||||||||||||||||
Trailing 12 months | 11.8 | % | 11.4 | % | 10.6 | % | 10.6 | % | 11.1 | % | 0.7 | % | ||||||||||||||||||||||||||
Total assets (1) | $ | 54,832,498 | $ | 53,876,703 | $ | 52,186,624 | $ | 50,383,152 | $ | 47,581,959 | $ | 7,250,539 | ||||||||||||||||||||||||||
Assumed Life Reinsurance In Force (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 1,603.8 | $ | 1,612.9 | $ | 1,609.3 | $ | 1,594.3 | $ | 1,476.1 | $ | 127.7 | ||||||||||||||||||||||||||
U.S. and Latin America Non-Traditional | 2.1 | 2.1 | 2.1 | 2.1 | 2.2 | (0.1 | ) | |||||||||||||||||||||||||||||||
Canada Traditional | 358.7 | 361.8 | 349.0 | 333.0 | 343.0 | 15.7 | ||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 612.8 | 608.3 | 624.2 | 602.7 | 566.0 | 46.8 | ||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 505.1 | 504.8 | 483.5 | 462.7 | 461.8 | 43.3 | ||||||||||||||||||||||||||||||||
Asia Pacific Non-Traditional | 0.3 | 0.4 | 0.3 | 0.3 | 0.3 | — | ||||||||||||||||||||||||||||||||
Total Assumed Life Reinsurance In Force | $ | 3,082.8 | $ | 3,090.3 | $ | 3,068.4 | $ | 2,995.1 | $ | 2,849.4 | $ | 233.4 | ||||||||||||||||||||||||||
Assumed New Business Production (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 19.7 | $ | 32.0 | $ | 41.3 | $ | 142.1 | (2) | $ | 26.4 | $ | (6.7 | ) | $ | 93.0 | $ | 61.8 | $ | 31.2 | ||||||||||||||||||
Canada Traditional | 9.4 | 8.2 | 8.2 | 8.7 | 9.1 | 0.3 | 25.8 | 29.9 | (4.1 | ) | ||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 31.7 | 49.1 | 44.7 | 66.0 | (2) | 24.7 | 7.0 | 125.5 | 105.6 | 19.9 | ||||||||||||||||||||||||||||
Asia Pacific Traditional | 20.5 | 18.0 | 13.6 | 12.1 | 24.4 | (3.9 | ) | 52.1 | 64.8 | (12.7 | ) | |||||||||||||||||||||||||||
Total Assumed New Business Production | $ | 81.3 | $ | 107.3 | $ | 107.8 | $ | 228.9 | $ | 84.6 | $ | (3.3 | ) | $ | 296.4 | $ | 262.1 | $ | 34.3 | |||||||||||||||||||
Per Share and Shares Data | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 3.10 | $ | 3.68 | $ | 1.18 | $ | 2.49 | $ | 1.26 | $ | 1.84 | $ | 7.95 | $ | 5.07 | $ | 2.88 | ||||||||||||||||||||
Operating income | $ | 2.48 | $ | 2.83 | $ | 1.87 | $ | 2.87 | $ | 1.92 | $ | 0.56 | $ | 7.18 | $ | 5.67 | $ | 1.51 | ||||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 3.07 | $ | 3.64 | $ | 1.17 | $ | 2.46 | $ | 1.25 | $ | 1.82 | $ | 7.87 | $ | 5.01 | $ | 2.86 | ||||||||||||||||||||
Operating income | $ | 2.46 | $ | 2.80 | $ | 1.85 | $ | 2.84 | $ | 1.90 | $ | 0.56 | $ | 7.10 | $ | 5.60 | $ | 1.50 | ||||||||||||||||||||
Wgt. average common shares outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 64,146 | 64,126 | 64,568 | 65,535 | 66,205 | (2,059 | ) | 64,281 | 66,895 | (2,614 | ) | |||||||||||||||||||||||||||
Diluted | 64,815 | 64,796 | 65,217 | 66,247 | 66,882 | (2,067 | ) | 64,944 | 67,644 | (2,700 | ) | |||||||||||||||||||||||||||
Common shares issued | 79,138 | 79,138 | 79,138 | 79,138 | 79,138 | — | 79,138 | 79,138 | — | |||||||||||||||||||||||||||||
Treasury shares | 14,932 | 15,068 | 15,073 | 13,933 | 13,389 | 1,543 | 14,932 | 13,389 | 1,543 | |||||||||||||||||||||||||||||
Common shares outstanding | 64,206 | 64,070 | 64,065 | 65,205 | 65,749 | (1,543 | ) | 64,206 | 65,749 | (1,543 | ) | |||||||||||||||||||||||||||
Book value per share | $ | 124.50 | $ | 118.32 | $ | 104.88 | $ | 94.09 | $ | 94.92 | ||||||||||||||||||||||||||||
Per share effect of AOCI | $ | 34.46 | $ | 30.99 | $ | 20.77 | $ | 10.86 | $ | 13.78 | ||||||||||||||||||||||||||||
Book value per share, excluding AOCI | $ | 90.04 | $ | 87.33 | $ | 84.11 | $ | 83.23 | $ | 81.14 | ||||||||||||||||||||||||||||
Shareholder dividends paid | $ | 26,288.3 | $ | 23,727.2 | $ | 24,018.6 | $ | 24,269.1 | $ | 24,592.1 | $ | 1,696.2 | $ | 74,034.1 | $ | 69,111.4 | $ | 4,922.7 | ||||||||||||||||||||
(1) Effective December 31, 2015, prior period balances have been updated to conform with current period presentation for the adoption of the accounting standard update "Simplifying the Presentation of Debt Issuance Costs". | ||||||||||||||||||||||||||||||||||||||
(2) Includes the effect of significant in force transactions. | ||||||||||||||||||||||||||||||||||||||
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Reinsurance Group of America, Incorporated Consolidated GAAP Income Statements (including Operating Income Reconciliations) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
(USD thousands) | 2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | |||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 2,251,758 | $ | 2,346,945 | $ | 2,157,005 | $ | 2,328,501 | $ | 2,089,345 | $ | 162,413 | $ | 6,755,708 | $ | 6,242,240 | $ | 513,468 | ||||||||||||||||||||
Investment income, net of related expenses | 489,727 | 507,666 | 417,266 | 467,468 | 389,597 | 100,130 | 1,414,659 | 1,267,027 | 147,632 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | ||||||||||||||||||||||||||||||||||||||
OTTI on fixed maturity securities | — | (846 | ) | (33,817 | ) | (27,605 | ) | (23,111 | ) | 23,111 | (34,663 | ) | (29,775 | ) | (4,888 | ) | ||||||||||||||||||||||
Other investment related gains (losses), net | 86,624 | 119,110 | (87,069 | ) | (17,204 | ) | (88,235 | ) | 174,859 | 118,665 | (90,166 | ) | 208,831 | |||||||||||||||||||||||||
Total investment related gains (losses), net | 86,624 | 118,264 | (120,886 | ) | (44,809 | ) | (111,346 | ) | 197,970 | 84,002 | (119,941 | ) | 203,943 | |||||||||||||||||||||||||
Other revenue | 72,468 | 66,193 | 59,183 | 77,431 | 71,038 | 1,430 | 197,844 | 200,261 | (2,417 | ) | ||||||||||||||||||||||||||||
Total revenues | 2,900,577 | 3,039,068 | 2,512,568 | 2,828,591 | 2,438,634 | 461,943 | 8,452,213 | 7,589,587 | 862,626 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,993,064 | 1,997,502 | 1,886,764 | 2,015,929 | 1,831,819 | 161,245 | 5,877,330 | 5,473,453 | 403,877 | |||||||||||||||||||||||||||||
Interest credited | 116,848 | 95,849 | 87,905 | 105,032 | 34,008 | 82,840 | 300,602 | 231,932 | 68,670 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 300,962 | 405,681 | 233,763 | 300,329 | 249,702 | 51,260 | 940,406 | 827,157 | 113,249 | |||||||||||||||||||||||||||||
Other operating expenses | 152,556 | 159,895 | 157,424 | 158,556 | 142,270 | 10,286 | 469,875 | 395,488 | 74,387 | |||||||||||||||||||||||||||||
Interest expense | 43,063 | 20,331 | 32,807 | 35,820 | 35,565 | 7,498 | 96,201 | 107,043 | (10,842 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,484 | 6,587 | 6,325 | 6,182 | 5,133 | 1,351 | 19,396 | 16,462 | 2,934 | |||||||||||||||||||||||||||||
Total benefits and expenses | 2,612,977 | 2,685,845 | 2,404,988 | 2,621,848 | 2,298,497 | 314,480 | 7,703,810 | 7,051,535 | 652,275 | |||||||||||||||||||||||||||||
Income before income taxes | 287,600 | 353,223 | 107,580 | 206,743 | 140,137 | 147,463 | 748,403 | 538,052 | 210,351 | |||||||||||||||||||||||||||||
Income tax expense | 88,881 | 117,120 | 31,108 | 43,616 | 56,603 | 32,278 | 237,109 | 199,013 | 38,096 | |||||||||||||||||||||||||||||
Net income | $ | 198,719 | $ | 236,103 | $ | 76,472 | $ | 163,127 | $ | 83,534 | $ | 115,185 | $ | 511,294 | $ | 339,039 | $ | 172,255 | ||||||||||||||||||||
Pre-tax Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 287,600 | $ | 353,223 | $ | 107,580 | $ | 206,743 | $ | 140,137 | $ | 147,463 | $ | 748,403 | $ | 538,052 | $ | 210,351 | ||||||||||||||||||||
Investment and derivative losses (gains)— | ||||||||||||||||||||||||||||||||||||||
non-operating (1) | (26,958 | ) | (67,100 | ) | (31,968 | ) | 64,034 | (35,028 | ) | 8,070 | (126,026 | ) | (14,448 | ) | (111,578 | ) | ||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (49,078 | ) | (76,966 | ) | 92,249 | 27,201 | 46,169 | (95,247 | ) | (33,795 | ) | 71,592 | (105,387 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | 95,373 | (103,361 | ) | 83,089 | 69,628 | 13,461 | ||||||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (3,322 | ) | (11,657 | ) | (4,983 | ) | 246 | (2,212 | ) | (1,110 | ) | (19,962 | ) | (16,616 | ) | (3,346 | ) | |||||||||||||||||||||
EIA embedded derivatives—interest credited | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (10,995 | ) | 11,037 | 11,827 | (11,170 | ) | 22,997 | |||||||||||||||||||||||||
DAC offset, net | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | (25,945 | ) | 57,821 | 19,739 | (36,083 | ) | 55,822 | |||||||||||||||||||||||||
Investment income on unit-linked variable annuities | (5,540 | ) | (2,966 | ) | (408 | ) | — | — | (5,540 | ) | (8,914 | ) | — | (8,914 | ) | |||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 5,540 | 2,966 | 408 | — | — | 5,540 | 8,914 | — | 8,914 | |||||||||||||||||||||||||||||
Non-investment derivatives | (1,705 | ) | 110 | (831 | ) | (120 | ) | (383 | ) | (1,322 | ) | (2,426 | ) | 2 | (2,428 | ) | ||||||||||||||||||||||
Operating Income Before Income Taxes | $ | 230,467 | $ | 273,224 | $ | 177,158 | $ | 247,113 | $ | 207,116 | $ | 23,351 | $ | 680,849 | $ | 600,957 | $ | 79,892 | ||||||||||||||||||||
After-tax Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Net Income | $ | 198,719 | $ | 236,103 | $ | 76,472 | $ | 163,127 | $ | 83,534 | $ | 115,185 | $ | 511,294 | $ | 339,039 | $ | 172,255 | ||||||||||||||||||||
Investment and derivative losses (gains)— | ||||||||||||||||||||||||||||||||||||||
non-operating (1) | (19,745 | ) | (46,490 | ) | (21,727 | ) | 40,203 | (22,750 | ) | 3,005 | (87,962 | ) | (10,183 | ) | (77,779 | ) | ||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (31,901 | ) | (50,028 | ) | 59,962 | 17,680 | 30,010 | (61,911 | ) | (21,967 | ) | 46,535 | (68,502 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | (5,192 | ) | 18,289 | 40,911 | (23,684 | ) | 61,992 | (67,184 | ) | 54,008 | 45,258 | 8,750 | ||||||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (2,159 | ) | (7,577 | ) | (3,239 | ) | 161 | (1,438 | ) | (721 | ) | (12,975 | ) | (10,801 | ) | (2,174 | ) | |||||||||||||||||||||
EIA embedded derivatives—interest credited | 28 | (11,287 | ) | 18,947 | (917 | ) | (7,147 | ) | 7,175 | 7,688 | (7,261 | ) | 14,949 | |||||||||||||||||||||||||
DAC offset, net | 20,719 | 42,147 | (50,036 | ) | (8,542 | ) | (16,865 | ) | 37,584 | 12,830 | (23,454 | ) | 36,284 | |||||||||||||||||||||||||
Investment income on unit-linked variable annuities | (3,601 | ) | (1,928 | ) | (265 | ) | — | — | (3,601 | ) | (5,794 | ) | — | (5,794 | ) | |||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 3,601 | 1,928 | 265 | — | — | 3,601 | 5,794 | — | 5,794 | |||||||||||||||||||||||||||||
Non-investment derivatives | (1,108 | ) | 71 | (540 | ) | (78 | ) | (250 | ) | (858 | ) | (1,577 | ) | 1 | (1,578 | ) | ||||||||||||||||||||||
Operating Income | $ | 159,361 | $ | 181,228 | $ | 120,750 | $ | 187,950 | $ | 127,086 | $ | 32,275 | $ | 461,339 | $ | 379,134 | $ | 82,205 | ||||||||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 4 | |
Reinsurance Group of America, Incorporated Consolidated Operating Income Statements | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||||||||||||||||||
(USD thousands, except per share data) | 2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 2,251,758 | $ | 2,346,945 | $ | 2,157,005 | $ | 2,328,501 | $ | 2,089,345 | $ | 162,413 | $ | 6,755,708 | $ | 6,242,240 | $ | 513,468 | ||||||||||||||||||||
Investment income, net of related expenses | 480,865 | 493,043 | 411,875 | 467,714 | 387,385 | 93,480 | 1,385,783 | 1,250,411 | 135,372 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 2,600 | 2,335 | 2,335 | 9,989 | (4,832 | ) | 7,432 | 7,270 | 6,831 | 439 | ||||||||||||||||||||||||||||
Other revenue | 70,763 | 66,303 | 58,352 | 77,311 | 70,655 | 108 | 195,418 | 200,263 | (4,845 | ) | ||||||||||||||||||||||||||||
Total revenues | 2,805,986 | 2,908,626 | 2,629,567 | 2,883,515 | 2,542,553 | 263,433 | 8,344,179 | 7,699,745 | 644,434 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,993,064 | 1,997,502 | 1,886,764 | 2,015,929 | 1,831,819 | 161,245 | 5,877,330 | 5,473,453 | 403,877 | |||||||||||||||||||||||||||||
Interest credited | 111,266 | 110,247 | 58,348 | 106,444 | 45,003 | 66,263 | 279,861 | 243,102 | 36,759 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 269,086 | 340,840 | 310,741 | 313,471 | 275,647 | (6,561 | ) | 920,667 | 863,240 | 57,427 | ||||||||||||||||||||||||||||
Other operating expenses | 152,556 | 159,895 | 157,424 | 158,556 | 142,270 | 10,286 | 469,875 | 395,488 | 74,387 | |||||||||||||||||||||||||||||
Interest expense | 43,063 | 20,331 | 32,807 | 35,820 | 35,565 | 7,498 | 96,201 | 107,043 | (10,842 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,484 | 6,587 | 6,325 | 6,182 | 5,133 | 1,351 | 19,396 | 16,462 | 2,934 | |||||||||||||||||||||||||||||
Total benefits and expenses | 2,575,519 | 2,635,402 | 2,452,409 | 2,636,402 | 2,335,437 | 240,082 | 7,663,330 | 7,098,788 | 564,542 | |||||||||||||||||||||||||||||
Operating income before income taxes | 230,467 | 273,224 | 177,158 | 247,113 | 207,116 | 23,351 | 680,849 | 600,957 | 79,892 | |||||||||||||||||||||||||||||
Operating income tax expense | 71,106 | 91,996 | 56,408 | 59,163 | 80,030 | (8,924 | ) | 219,510 | 221,823 | (2,313 | ) | |||||||||||||||||||||||||||
Operating income | $ | 159,361 | $ | 181,228 | $ | 120,750 | $ | 187,950 | $ | 127,086 | $ | 32,275 | $ | 461,339 | $ | 379,134 | $ | 82,205 | ||||||||||||||||||||
Wgt. average common shares outstanding (diluted) | 64,815 | 64,796 | 65,217 | 66,247 | 66,882 | (2,067) | 64,944 | 67,644 | (2,700) | |||||||||||||||||||||||||||||
Diluted earnings per share—operating income | $ | 2.46 | $ | 2.80 | $ | 1.85 | $ | 2.84 | $ | 1.90 | $ | 0.56 | $ | 7.10 | $ | 5.60 | $ | 1.50 | ||||||||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (19,914 | ) | $ | (43,422 | ) | $ | (69,340 | ) | $ | (106,556 | ) | $ | (145,047 | ) | $ | 125,133 | $ | (132,676 | ) | $ | (362,358 | ) | $ | 229,682 | |||||||||||||
Operating income before income taxes | $ | (3,195 | ) | $ | (4,057 | ) | $ | (9,742 | ) | $ | (18,726 | ) | $ | (15,526 | ) | $ | 12,331 | $ | (16,994 | ) | $ | (36,059 | ) | $ | 19,065 | |||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 5 | |
Reinsurance Group of America, Incorporated Consolidated Balance Sheets (USD thousands) | ||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | ||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 33,536,419 | $ | 33,160,976 | $ | 31,148,714 | $ | 29,642,905 | $ | 27,411,788 | ||||||||||
Mortgage loans on real estate | 3,607,700 | 3,377,039 | 3,292,496 | 3,129,951 | 3,170,002 | |||||||||||||||
Policy loans | 1,414,963 | 1,445,410 | 1,451,857 | 1,468,796 | 1,444,009 | |||||||||||||||
Funds withheld at interest | 5,922,656 | 5,899,289 | 5,797,183 | 5,880,203 | 5,675,174 | |||||||||||||||
Short-term investments | 126,702 | 195,979 | 431,535 | 558,284 | 58,200 | |||||||||||||||
Other invested assets | 1,777,065 | 1,682,143 | 1,368,544 | 1,298,120 | 1,187,504 | |||||||||||||||
Total investments | 46,385,505 | 45,760,836 | 43,490,329 | 41,978,259 | 38,946,677 | |||||||||||||||
Cash and cash equivalents | 1,379,693 | 1,034,329 | 1,502,082 | 1,525,275 | 1,747,692 | |||||||||||||||
Accrued investment income | 391,837 | 368,926 | 364,432 | 339,452 | 342,088 | |||||||||||||||
Premiums receivable and other reinsurance balances | 1,834,362 | 1,917,844 | 1,886,293 | 1,797,504 | 1,553,093 | |||||||||||||||
Reinsurance ceded receivables | 694,906 | 681,425 | 688,491 | 637,859 | 661,185 | |||||||||||||||
Deferred policy acquisition costs | 3,406,093 | 3,401,935 | 3,490,509 | 3,392,437 | 3,311,086 | |||||||||||||||
Other assets (1) | 740,102 | 711,408 | 764,488 | 712,366 | 1,020,138 | |||||||||||||||
Total assets (1) | $ | 54,832,498 | $ | 53,876,703 | $ | 52,186,624 | $ | 50,383,152 | $ | 47,581,959 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Future policy benefits | $ | 19,634,157 | $ | 19,605,021 | $ | 19,811,921 | $ | 19,612,251 | $ | 16,574,783 | ||||||||||
Interest-sensitive contract liabilities | 14,217,831 | 14,024,012 | 14,087,081 | 13,663,873 | 13,699,896 | |||||||||||||||
Other policy claims and benefits | 4,304,491 | 4,305,219 | 4,384,072 | 4,094,640 | 3,892,036 | |||||||||||||||
Other reinsurance balances | 353,426 | 344,527 | 397,375 | 296,899 | 280,093 | |||||||||||||||
Deferred income taxes | 3,071,995 | 2,901,264 | 2,483,584 | 2,218,328 | 2,285,066 | |||||||||||||||
Other liabilities | 1,321,017 | 1,157,252 | 1,106,531 | 1,165,071 | 1,405,675 | |||||||||||||||
Short-term debt | 299,876 | 299,807 | 299,739 | — | — | |||||||||||||||
Long-term debt (1) | 2,788,834 | 2,788,473 | 1,997,970 | 2,297,548 | 2,297,592 | |||||||||||||||
Collateral finance and securitization notes (1) | 847,389 | 870,482 | 899,482 | 899,161 | 905,752 | |||||||||||||||
Total liabilities (1) | 46,839,016 | 46,296,057 | 45,467,755 | 44,247,771 | 41,340,893 | |||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||
Common stock, at par value | 791 | 791 | 791 | 791 | 791 | |||||||||||||||
Additional paid-in-capital | 1,842,390 | 1,834,995 | 1,827,646 | 1,816,142 | 1,812,377 | |||||||||||||||
Retained earnings | 5,039,470 | 4,870,711 | 4,668,588 | 4,620,303 | 4,482,709 | |||||||||||||||
Treasury stock | (1,101,495 | ) | (1,111,225 | ) | (1,108,539 | ) | (1,010,139 | ) | (961,290 | ) | ||||||||||
Accumulated other comprehensive income (AOCI): | ||||||||||||||||||||
Accumulated currency translation adjustment, net of income taxes | (121,709 | ) | (93,476 | ) | (103,418 | ) | (181,151 | ) | (119,493 | ) | ||||||||||
Unrealized appreciation of securities, net of income taxes | 2,381,473 | 2,126,815 | 1,482,922 | 935,697 | 1,071,990 | |||||||||||||||
Pension and postretirement benefits, net of income taxes | (47,438 | ) | (47,965 | ) | (49,121 | ) | (46,262 | ) | (46,018 | ) | ||||||||||
Total stockholders’ equity | 7,993,482 | 7,580,646 | 6,718,869 | 6,135,381 | 6,241,066 | |||||||||||||||
Total liabilities and stockholders’ equity (1) | $ | 54,832,498 | $ | 53,876,703 | $ | 52,186,624 | $ | 50,383,152 | $ | 47,581,959 | ||||||||||
Total stockholders’ equity, excluding AOCI | $ | 5,781,156 | $ | 5,595,272 | $ | 5,388,486 | $ | 5,427,097 | $ | 5,334,587 | ||||||||||
(1) Effective December 31, 2015, prior period balances have been updated to conform with current period presentation for the adoption of the accounting standard update "Simplifying the Presentation of Debt | ||||||||||||||||||||
Issuance Costs". | ||||||||||||||||||||
| Page 6 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional Segment GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,277,491 | $ | 1,307,395 | $ | 1,234,394 | $ | 1,370,745 | $ | 1,150,936 | $ | 126,555 | $ | 3,819,280 | $ | 3,435,961 | $ | 383,319 | ||||||||||||||||||||
Investment income, net of related expenses | 167,898 | 182,238 | 165,023 | 176,174 | 154,210 | 13,688 | 515,159 | 460,605 | 54,554 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | (3,394 | ) | (882 | ) | (2,100 | ) | 493 | 926 | (4,320 | ) | (6,376 | ) | 1,813 | (8,189 | ) | |||||||||||||||||||||||
Other revenue | 2,922 | 5,252 | 3,500 | 7,438 | 6,566 | (3,644 | ) | 11,674 | 11,797 | (123 | ) | |||||||||||||||||||||||||||
Total revenues | 1,444,917 | 1,494,003 | 1,400,817 | 1,554,850 | 1,312,638 | 132,279 | 4,339,737 | 3,910,176 | 429,561 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,131,507 | 1,149,665 | 1,119,442 | 1,235,926 | 1,049,973 | 81,534 | 3,400,614 | 3,130,770 | 269,844 | |||||||||||||||||||||||||||||
Interest credited | 20,628 | 20,845 | 21,400 | 21,682 | 20,999 | (371 | ) | 62,873 | 55,818 | 7,055 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 184,766 | 182,285 | 177,078 | 187,277 | 158,452 | 26,314 | 544,129 | 486,054 | 58,075 | |||||||||||||||||||||||||||||
Other operating expenses | 30,935 | 29,778 | 31,799 | 30,482 | 27,562 | 3,373 | 92,512 | 81,246 | 11,266 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,367,836 | 1,382,573 | 1,349,719 | 1,475,367 | 1,256,986 | 110,850 | 4,100,128 | 3,753,888 | 346,240 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 77,081 | $ | 111,430 | $ | 51,098 | $ | 79,483 | $ | 55,652 | $ | 21,429 | $ | 239,609 | $ | 156,288 | $ | 83,321 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 88.6 | % | 87.9 | % | 90.7 | % | 90.2 | % | 91.2 | % | (2.6 | )% | 89.0 | % | 91.1 | % | (2.1 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14.5 | % | 13.9 | % | 14.3 | % | 13.7 | % | 13.8 | % | 0.7 | % | 14.2 | % | 14.1 | % | 0.1 | % | ||||||||||||||||||||
Other operating expenses | 2.4 | % | 2.3 | % | 2.6 | % | 2.2 | % | 2.4 | % | — | % | 2.4 | % | 2.4 | % | — | % | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 7 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional Segment Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,277,491 | $ | 1,307,395 | $ | 1,234,394 | $ | 1,370,745 | $ | 1,150,936 | $ | 126,555 | $ | 3,819,280 | $ | 3,435,961 | $ | 383,319 | ||||||||||||||||||||
Investment income, net of related expenses | 167,898 | 182,238 | 165,023 | 176,174 | 154,210 | 13,688 | 515,159 | 460,605 | 54,554 | |||||||||||||||||||||||||||||
Other revenue | 2,922 | 5,252 | 3,500 | 7,438 | 6,566 | (3,644 | ) | 11,674 | 11,797 | (123 | ) | |||||||||||||||||||||||||||
Total revenues | 1,448,311 | 1,494,885 | 1,402,917 | 1,554,357 | 1,311,712 | 136,599 | 4,346,113 | 3,908,363 | 437,750 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,131,507 | 1,149,665 | 1,119,442 | 1,235,926 | 1,049,973 | 81,534 | 3,400,614 | 3,130,770 | 269,844 | |||||||||||||||||||||||||||||
Interest credited | 20,628 | 20,845 | 21,400 | 21,682 | 20,999 | (371 | ) | 62,873 | 55,818 | 7,055 | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 184,766 | 182,285 | 177,078 | 187,277 | 158,452 | 26,314 | 544,129 | 486,054 | 58,075 | |||||||||||||||||||||||||||||
Other operating expenses | 30,935 | 29,778 | 31,799 | 30,482 | 27,562 | 3,373 | 92,512 | 81,246 | 11,266 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,367,836 | 1,382,573 | 1,349,719 | 1,475,367 | 1,256,986 | 110,850 | 4,100,128 | 3,753,888 | 346,240 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 80,475 | $ | 112,312 | $ | 53,198 | $ | 78,990 | $ | 54,726 | $ | 25,749 | $ | 245,985 | $ | 154,475 | $ | 91,510 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 88.6 | % | 87.9 | % | 90.7 | % | 90.2 | % | 91.2 | % | (2.6 | )% | 89.0 | % | 91.1 | % | (2.1 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14.5 | % | 13.9 | % | 14.3 | % | 13.7 | % | 13.8 | % | 0.7 | % | 14.2 | % | 14.1 | % | 0.1 | % | ||||||||||||||||||||
Other operating expenses | 2.4 | % | 2.3 | % | 2.6 | % | 2.2 | % | 2.4 | % | — | % | 2.4 | % | 2.4 | % | — | % | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 8 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment - Asset Intensive Reinsurance GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 5,369 | $ | 5,662 | $ | 6,219 | $ | 6,018 | $ | 5,177 | $ | 192 | $ | 17,250 | $ | 16,159 | $ | 1,091 | ||||||||||||||||||||
Investment income, net of related expenses | 167,683 | 177,681 | 117,215 | 153,445 | 104,055 | 63,628 | 462,579 | 407,256 | 55,323 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 59,661 | 76,830 | (128,551 | ) | (31,218 | ) | (68,990 | ) | 128,651 | 7,940 | (87,264 | ) | 95,204 | |||||||||||||||||||||||||
Other revenue | 23,417 | 24,555 | 22,834 | 23,238 | 28,973 | (5,556 | ) | 70,806 | 82,151 | (11,345 | ) | |||||||||||||||||||||||||||
Total revenues | 256,130 | 284,728 | 17,717 | 151,483 | 69,215 | 186,915 | 558,575 | 418,302 | 140,273 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 18,927 | 19,507 | 19,833 | 22,605 | 16,832 | 2,095 | 58,267 | 43,541 | 14,726 | |||||||||||||||||||||||||||||
Interest credited | 86,742 | 68,436 | 62,558 | 71,756 | 18,535 | 68,207 | 217,736 | 172,562 | 45,174 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 56,497 | 97,078 | (39,656 | ) | 19,957 | 4,773 | 51,724 | 113,919 | 65,803 | 48,116 | ||||||||||||||||||||||||||||
Other operating expenses | 5,232 | 5,728 | 5,812 | 6,291 | 4,893 | 339 | 16,772 | 14,324 | 2,448 | |||||||||||||||||||||||||||||
Total benefits and expenses | 167,398 | 190,749 | 48,547 | 120,609 | 45,033 | 122,365 | 406,694 | 296,230 | 110,464 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 88,732 | $ | 93,979 | $ | (30,830 | ) | $ | 30,874 | $ | 24,182 | $ | 64,550 | $ | 151,881 | $ | 122,072 | $ | 29,809 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 9 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment - Asset Intensive Reinsurance Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 5,369 | $ | 5,662 | $ | 6,219 | $ | 6,018 | $ | 5,177 | $ | 192 | $ | 17,250 | $ | 16,159 | $ | 1,091 | ||||||||||||||||||||
Investment income, net of related expenses | 165,388 | 167,377 | 112,591 | 153,504 | 103,052 | 62,336 | 445,356 | 397,138 | 48,218 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | (1 | ) | 1 | — | (1 | ) | 1 | (2 | ) | — | 1 | (1 | ) | |||||||||||||||||||||||||
Other revenue | 23,417 | 24,555 | 22,834 | 23,238 | 28,973 | (5,556 | ) | 70,806 | 82,151 | (11,345 | ) | |||||||||||||||||||||||||||
Total revenues | 194,173 | 197,595 | 141,644 | 182,759 | 137,203 | 56,970 | 533,412 | 495,449 | 37,963 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 18,927 | 19,507 | 19,833 | 22,605 | 16,832 | 2,095 | 58,267 | 43,541 | 14,726 | |||||||||||||||||||||||||||||
Interest credited | 86,700 | 85,800 | 33,409 | 73,168 | 29,530 | 57,170 | 205,909 | 183,732 | 22,177 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 24,621 | 32,237 | 37,322 | 33,099 | 30,718 | (6,097 | ) | 94,180 | 101,886 | (7,706 | ) | |||||||||||||||||||||||||||
Other operating expenses | 5,232 | 5,728 | 5,812 | 6,291 | 4,893 | 339 | 16,772 | 14,324 | 2,448 | |||||||||||||||||||||||||||||
Total benefits and expenses | 135,480 | 143,272 | 96,376 | 135,163 | 81,973 | 53,507 | 375,128 | 343,483 | 31,645 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 58,693 | $ | 54,323 | $ | 45,268 | $ | 47,596 | $ | 55,230 | $ | 3,463 | $ | 158,284 | $ | 151,966 | $ | 6,318 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 10 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment - Asset Intensive Reinsurance (Cont'd) (USD millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | ||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
Annuity account values: | ||||||||||||||||||||
Fixed annuities (deferred) | $ | 5,130 | $ | 5,189 | $ | 5,210 | $ | 4,843 | $ | 4,883 | ||||||||||
Net interest spread (fixed annuities) | 2.6 | % | 2.5 | % | 2.1 | % | 2.7 | % | 2.5 | % | ||||||||||
Equity-indexed annuities | $ | 4,374 | $ | 4,402 | $ | 4,448 | $ | 4,509 | $ | 4,536 | ||||||||||
Variable annuities account values | ||||||||||||||||||||
No riders | $ | 739 | $ | 732 | $ | 753 | $ | 782 | $ | 791 | ||||||||||
GMDB only | 58 | 58 | 60 | 62 | 63 | |||||||||||||||
GMIB only | 5 | 5 | 5 | 5 | 5 | |||||||||||||||
GMAB only | 29 | 29 | 31 | 33 | 33 | |||||||||||||||
GMWB only | 1,370 | 1,367 | 1,386 | 1,425 | 1,426 | |||||||||||||||
GMDB / WB | 342 | 341 | 349 | 359 | 361 | |||||||||||||||
Other | 20 | 20 | 21 | 22 | 22 | |||||||||||||||
Total variable annuities account values | $ | 2,563 | $ | 2,552 | $ | 2,605 | $ | 2,688 | $ | 2,701 | ||||||||||
Fair value of liabilities associated with living benefit riders | $ | 276 | $ | 284 | $ | 255 | $ | 192 | $ | 229 | ||||||||||
Interest-sensitive contract liabilities associated with: | ||||||||||||||||||||
Guaranteed investment contracts | $ | 456 | $ | 354 | $ | 368 | $ | 322 | $ | 313 | ||||||||||
Bank-owned life insurance (BOLI) | $ | 568 | $ | 565 | $ | 562 | $ | 559 | $ | 556 | ||||||||||
Other asset-intensive business | $ | 65 | $ | 66 | $ | 66 | $ | 66 | $ | 67 | ||||||||||
Future policy benefits associated with: | ||||||||||||||||||||
Payout annuities | $ | 1,974 | $ | 1,978 | $ | 1,949 | $ | 1,960 | $ | 1,919 | ||||||||||
| Page 11 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment - Financial Reinsurance GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1,038 | $ | 2,386 | $ | 2,607 | $ | 1,702 | $ | 1,438 | $ | (400 | ) | $ | 6,031 | $ | 3,777 | $ | 2,254 | |||||||||||||||||||
Other revenue | 18,967 | 17,963 | 18,581 | 19,133 | 16,446 | 2,521 | 55,511 | 49,468 | 6,043 | |||||||||||||||||||||||||||||
Total revenues | 20,005 | 20,349 | 21,188 | 20,835 | 17,884 | 2,121 | 61,542 | 53,245 | 8,297 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 3,492 | 3,085 | 2,568 | 2,720 | 2,535 | 957 | 9,145 | 7,473 | 1,672 | |||||||||||||||||||||||||||||
Other operating expenses | 2,531 | 2,389 | 2,686 | 2,179 | 3,276 | (745 | ) | 7,606 | 6,691 | 915 | ||||||||||||||||||||||||||||
Total benefits and expenses | 6,023 | 5,474 | 5,254 | 4,899 | 5,811 | 212 | 16,751 | 14,164 | 2,587 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | 12,073 | $ | 1,909 | $ | 44,791 | $ | 39,081 | $ | 5,710 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 12 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment - Financial Reinsurance Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1,038 | $ | 2,386 | $ | 2,607 | $ | 1,702 | $ | 1,438 | $ | (400 | ) | $ | 6,031 | $ | 3,777 | $ | 2,254 | |||||||||||||||||||
Other revenue | 18,967 | 17,963 | 18,581 | 19,133 | 16,446 | 2,521 | 55,511 | 49,468 | 6,043 | |||||||||||||||||||||||||||||
Total revenues | 20,005 | 20,349 | 21,188 | 20,835 | 17,884 | 2,121 | 61,542 | 53,245 | 8,297 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 3,492 | 3,085 | 2,568 | 2,720 | 2,535 | 957 | 9,145 | 7,473 | 1,672 | |||||||||||||||||||||||||||||
Other operating expenses | 2,531 | 2,389 | 2,686 | 2,179 | 3,276 | (745 | ) | 7,606 | 6,691 | 915 | ||||||||||||||||||||||||||||
Total benefits and expenses | 6,023 | 5,474 | 5,254 | 4,899 | 5,811 | 212 | 16,751 | 14,164 | 2,587 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | 12,073 | $ | 1,909 | $ | 44,791 | $ | 39,081 | $ | 5,710 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 13 | |
Reinsurance Group of America, Incorporated Canada Traditional Segment GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 231,154 | $ | 240,107 | $ | 215,463 | $ | 201,384 | $ | 200,000 | $ | 31,154 | $ | 686,724 | $ | 637,510 | $ | 49,214 | ||||||||||||||||||||
Investment income, net of related expenses | 45,239 | 46,859 | 42,023 | 42,938 | 44,492 | 747 | 134,121 | 139,683 | (5,562 | ) | ||||||||||||||||||||||||||||
Investment related gains (losses), net | 3,832 | 2,285 | 1,640 | 1,027 | (3,821 | ) | 7,653 | 7,757 | (2,530 | ) | 10,287 | |||||||||||||||||||||||||||
Other revenue | 734 | (339 | ) | (1,126 | ) | 1,131 | 767 | (33 | ) | (731 | ) | 1,869 | (2,600 | ) | ||||||||||||||||||||||||
Total revenues | 280,959 | 288,912 | 258,000 | 246,480 | 241,438 | 39,521 | 827,871 | 776,532 | 51,339 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 175,618 | 176,478 | 172,401 | 148,543 | 152,640 | 22,978 | 524,497 | 521,916 | 2,581 | |||||||||||||||||||||||||||||
Interest credited | 8 | 7 | 2 | 4 | 5 | 3 | 17 | 14 | 3 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 61,019 | 60,021 | 57,138 | 43,226 | 46,581 | 14,438 | 178,178 | 149,503 | 28,675 | |||||||||||||||||||||||||||||
Other operating expenses | 10,039 | 9,097 | 8,364 | 10,067 | 8,140 | 1,899 | 27,500 | 25,564 | 1,936 | |||||||||||||||||||||||||||||
Total benefits and expenses | 246,684 | 245,603 | 237,905 | 201,840 | 207,366 | 39,318 | 730,192 | 696,997 | 33,195 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 34,275 | $ | 43,309 | $ | 20,095 | $ | 44,640 | $ | 34,072 | $ | 203 | $ | 97,679 | $ | 79,535 | $ | 18,144 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Loss ratios (creditor business) | 27.0 | % | 32.2 | % | 25.8 | % | 28.2 | % | 34.4 | % | (7.4 | )% | 28.4 | % | 31.8 | % | (3.4 | )% | ||||||||||||||||||||
Loss ratios (excluding creditor business) | 93.1 | % | 87.4 | % | 98.5 | % | 82.5 | % | 86.6 | % | 6.5 | % | 92.8 | % | 94.7 | % | (1.9 | )% | ||||||||||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 63.5 | % | 61.5 | % | 67.0 | % | 60.8 | % | 62.4 | % | 1.1 | % | 63.9 | % | 67.2 | % | (3.3 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (creditor business) | 65.7 | % | 64.3 | % | 66.9 | % | 66.2 | % | 62.1 | % | 3.6 | % | 65.6 | % | 63.1 | % | 2.5 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (excluding creditor business) | 12.6 | % | 11.8 | % | 12.7 | % | 12.9 | % | 13.7 | % | (1.1 | )% | 12.4 | % | 13.3 | % | (0.9 | )% | ||||||||||||||||||||
Other operating expenses | 4.3 | % | 3.8 | % | 3.9 | % | 5.0 | % | 4.1 | % | 0.2 | % | 4.0 | % | 4.0 | % | — | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 724 | $ | (11,615 | ) | $ | (22,010 | ) | $ | (35,018 | ) | $ | (40,371 | ) | $ | 41,095 | $ | (32,901 | ) | $ | (95,342 | ) | $ | 62,441 | ||||||||||||||
Income before income taxes | $ | 104 | $ | (2,247 | ) | $ | (3,129 | ) | $ | (7,658 | ) | $ | (6,880 | ) | $ | 6,984 | $ | (5,272 | ) | $ | (12,680 | ) | $ | 7,408 | ||||||||||||||
Creditor reinsurance net premiums | $ | 59,983 | $ | 60,275 | $ | 54,854 | $ | 32,484 | $ | 39,462 | $ | 20,521 | $ | 175,112 | $ | 130,145 | $ | 44,967 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
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 14 | |
Reinsurance Group of America, Incorporated Canada Traditional Segment Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 231,154 | $ | 240,107 | $ | 215,463 | $ | 201,384 | $ | 200,000 | $ | 31,154 | $ | 686,724 | $ | 637,510 | $ | 49,214 | ||||||||||||||||||||
Investment income, net of related expenses | 44,212 | 45,506 | 41,664 | 43,125 | 43,283 | 929 | 131,382 | 133,185 | (1,803 | ) | ||||||||||||||||||||||||||||
Investment related gains, net | 1,208 | 1,236 | 1,268 | 1,286 | 1,109 | 99 | 3,712 | 3,158 | 554 | |||||||||||||||||||||||||||||
Other revenue | 734 | (339 | ) | (1,126 | ) | 1,131 | 767 | (33 | ) | (731 | ) | 1,869 | (2,600 | ) | ||||||||||||||||||||||||
Total revenues | 277,308 | 286,510 | 257,269 | 246,926 | 245,159 | 32,149 | 821,087 | 775,722 | 45,365 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 175,618 | 176,478 | 172,401 | 148,543 | 152,640 | 22,978 | 524,497 | 521,916 | 2,581 | |||||||||||||||||||||||||||||
Interest credited | 8 | 7 | 2 | 4 | 5 | 3 | 17 | 14 | 3 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 61,019 | 60,021 | 57,138 | 43,226 | 46,581 | 14,438 | 178,178 | 149,503 | 28,675 | |||||||||||||||||||||||||||||
Other operating expenses | 10,039 | 9,097 | 8,364 | 10,067 | 8,140 | 1,899 | 27,500 | 25,564 | 1,936 | |||||||||||||||||||||||||||||
Total benefits and expenses | 246,684 | 245,603 | 237,905 | 201,840 | 207,366 | 39,318 | 730,192 | 696,997 | 33,195 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 30,624 | $ | 40,907 | $ | 19,364 | $ | 45,086 | $ | 37,793 | $ | (7,169 | ) | $ | 90,895 | $ | 78,725 | $ | 12,170 | |||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Loss ratios (creditor business) | 27.0 | % | 32.2 | % | 25.8 | % | 28.2 | % | 34.4 | % | (7.4 | )% | 28.4 | % | 31.8 | % | (3.4 | )% | ||||||||||||||||||||
Loss ratios (excluding creditor business) | 93.1 | % | 87.4 | % | 98.5 | % | 82.5 | % | 86.6 | % | 6.5 | % | 92.8 | % | 94.7 | % | (1.9 | )% | ||||||||||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 63.8 | % | 61.8 | % | 67.0 | % | 60.8 | % | 62.7 | % | 1.1 | % | 64.1 | % | 67.7 | % | (3.6 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (creditor business) | 65.7 | % | 64.3 | % | 66.9 | % | 66.2 | % | 62.1 | % | 3.6 | % | 65.6 | % | 63.1 | % | 2.5 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (excluding creditor business) | 12.6 | % | 11.8 | % | 12.7 | % | 12.9 | % | 13.7 | % | (1.1 | )% | 12.4 | % | 13.3 | % | (0.9 | )% | ||||||||||||||||||||
Other operating expenses | 4.3 | % | 3.8 | % | 3.9 | % | 5.0 | % | 4.1 | % | 0.2 | % | 4.0 | % | 4.0 | % | — | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 724 | $ | (11,615 | ) | $ | (22,010 | ) | $ | (35,018 | ) | $ | (40,371 | ) | $ | 41,095 | $ | (32,901 | ) | $ | (95,342 | ) | $ | 62,441 | ||||||||||||||
Operating income before income taxes | $ | 104 | $ | (2,130 | ) | $ | (3,701 | ) | $ | (7,795 | ) | $ | (7,644 | ) | $ | 7,748 | $ | (5,727 | ) | $ | (12,856 | ) | $ | 7,129 | ||||||||||||||
Creditor reinsurance net premiums | $ | 59,983 | $ | 60,275 | $ | 54,854 | $ | 32,484 | $ | 39,462 | $ | 20,521 | $ | 175,112 | $ | 130,145 | $ | 44,967 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
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 15 | |
Reinsurance Group of America, Incorporated Canada Non-Traditional Segment (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 9,946 | $ | 10,192 | $ | 8,951 | $ | 9,002 | $ | 9,275 | $ | 671 | $ | 29,089 | $ | 28,967 | $ | 122 | ||||||||||||||||||||
Investment income, net of related expenses | 1,037 | 228 | 384 | 328 | 230 | 807 | 1,649 | 1,108 | 541 | |||||||||||||||||||||||||||||
Other revenue | 1,376 | 1,434 | 1,349 | 1,332 | 1,535 | (159 | ) | 4,159 | 4,297 | (138 | ) | |||||||||||||||||||||||||||
Total revenues | 12,359 | 11,854 | 10,684 | 10,662 | 11,040 | 1,319 | 34,897 | 34,372 | 525 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 10,567 | 8,834 | 9,604 | 6,708 | 7,340 | 3,227 | 29,005 | 22,543 | 6,462 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 285 | 513 | 204 | 145 | 152 | 133 | 1,002 | 407 | 595 | |||||||||||||||||||||||||||||
Other operating expenses | 347 | 379 | 284 | 389 | 291 | 56 | 1,010 | 940 | 70 | |||||||||||||||||||||||||||||
Total benefits and expenses | 11,199 | 9,726 | 10,092 | 7,242 | 7,783 | 3,416 | 31,017 | 23,890 | 7,127 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 3,257 | $ | (2,097 | ) | $ | 3,880 | $ | 10,482 | $ | (6,602 | ) | ||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 33 | $ | (491 | ) | $ | (915 | ) | $ | (1,570 | ) | $ | (1,872 | ) | $ | 1,905 | $ | (1,373 | ) | $ | (4,408 | ) | $ | 3,035 | ||||||||||||||
Income before income taxes | $ | (9 | ) | $ | (106 | ) | $ | (575 | ) | $ | (623 | ) | $ | (659 | ) | $ | 650 | $ | (690 | ) | $ | (1,307 | ) | $ | 617 | |||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) The Canada non-traditional segment includes longevity and financial reinsurance transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 16 | |
Reinsurance Group of America, Incorporated Canada Non-Traditional Segment (1) Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 9,946 | $ | 10,192 | $ | 8,951 | $ | 9,002 | $ | 9,275 | $ | 671 | $ | 29,089 | $ | 28,967 | $ | 122 | ||||||||||||||||||||
Investment income, net of related expenses | 1,037 | 228 | 384 | 328 | 230 | 807 | 1,649 | 1,108 | 541 | |||||||||||||||||||||||||||||
Other revenue | 1,376 | 1,434 | 1,349 | 1,332 | 1,535 | (159 | ) | 4,159 | 4,297 | (138 | ) | |||||||||||||||||||||||||||
Total revenues | 12,359 | 11,854 | 10,684 | 10,662 | 11,040 | 1,319 | 34,897 | 34,372 | 525 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 10,567 | 8,834 | 9,604 | 6,708 | 7,340 | 3,227 | 29,005 | 22,543 | 6,462 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 285 | 513 | 204 | 145 | 152 | 133 | 1,002 | 407 | 595 | |||||||||||||||||||||||||||||
Other operating expenses | 347 | 379 | 284 | 389 | 291 | 56 | 1,010 | 940 | 70 | |||||||||||||||||||||||||||||
Total benefits and expenses | 11,199 | 9,726 | 10,092 | 7,242 | 7,783 | 3,416 | 31,017 | 23,890 | 7,127 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 3,257 | $ | (2,097 | ) | $ | 3,880 | $ | 10,482 | $ | (6,602 | ) | ||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 33 | $ | (491 | ) | $ | (915 | ) | $ | (1,570 | ) | $ | (1,872 | ) | $ | 1,905 | $ | (1,373 | ) | $ | (4,408 | ) | $ | 3,035 | ||||||||||||||
Operating income before income taxes | $ | (9 | ) | $ | (106 | ) | $ | (575 | ) | $ | (623 | ) | $ | (659 | ) | $ | 650 | $ | (690 | ) | $ | (1,307 | ) | $ | 617 | |||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) The Canada non-traditional segment includes longevity and financial reinsurance transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 17 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Traditional Segment GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 275,514 | $ | 286,861 | $ | 276,435 | $ | 299,938 | $ | 276,111 | $ | (597 | ) | $ | 838,810 | $ | 821,602 | $ | 17,208 | |||||||||||||||||||
Investment income, net of related expenses | 13,067 | 13,321 | 12,168 | 14,123 | 12,066 | 1,001 | 38,556 | 37,247 | 1,309 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | 5 | 7,527 | (6,878 | ) | 6,878 | 5 | 870 | (865 | ) | |||||||||||||||||||||||||||
Other revenue | 489 | 1,460 | 1,026 | 5,380 | 3,051 | (2,562 | ) | 2,975 | 4,055 | (1,080 | ) | |||||||||||||||||||||||||||
Total revenues | 289,070 | 301,642 | 289,634 | 326,968 | 284,350 | 4,720 | 880,346 | 863,774 | 16,572 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 241,763 | 252,336 | 251,243 | 260,874 | 232,473 | 9,290 | 745,342 | 708,722 | 36,620 | |||||||||||||||||||||||||||||
Interest credited | — | — | — | 8,126 | (6,798 | ) | 6,798 | — | 1,503 | (1,503 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14,133 | 17,550 | 14,782 | 19,171 | 17,680 | (3,547 | ) | 46,465 | 43,871 | 2,594 | ||||||||||||||||||||||||||||
Other operating expenses | 24,659 | 24,922 | 24,725 | 25,938 | 25,085 | (426 | ) | 74,306 | 74,127 | 179 | ||||||||||||||||||||||||||||
Total benefits and expenses | 280,555 | 294,808 | 290,750 | 314,109 | 268,440 | 12,115 | 866,113 | 828,223 | 37,890 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 8,515 | $ | 6,834 | $ | (1,116 | ) | $ | 12,859 | $ | 15,910 | $ | (7,395 | ) | $ | 14,233 | $ | 35,551 | $ | (21,318 | ) | |||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 87.7 | % | 88.0 | % | 90.9 | % | 87.0 | % | 84.2 | % | 3.5 | % | 88.9 | % | 86.3 | % | 2.6 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5.1 | % | 6.1 | % | 5.3 | % | 6.4 | % | 6.4 | % | (1.3 | )% | 5.5 | % | 5.3 | % | 0.2 | % | ||||||||||||||||||||
Other operating expenses | 9.0 | % | 8.7 | % | 8.9 | % | 8.6 | % | 9.1 | % | (0.1 | )% | 8.9 | % | 9.0 | % | (0.1 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (32,564 | ) | $ | (20,223 | ) | $ | (23,009 | ) | $ | (24,499 | ) | $ | (29,879 | ) | $ | (2,685 | ) | $ | (75,796 | ) | $ | (94,735 | ) | $ | 18,939 | ||||||||||||
Income before income taxes | $ | 157 | $ | 45 | $ | (184 | ) | $ | (1,285 | ) | $ | (783 | ) | $ | 940 | $ | 18 | $ | (2,867 | ) | $ | 2,885 | ||||||||||||||||
Critical illness net premiums | $ | 49,531 | $ | 53,805 | $ | 53,643 | $ | 58,610 | $ | 58,069 | $ | (8,538 | ) | $ | 156,979 | $ | 174,566 | $ | (17,587 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 18 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Traditional Segment Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 275,514 | $ | 286,861 | $ | 276,435 | $ | 299,938 | $ | 276,111 | $ | (597 | ) | $ | 838,810 | $ | 821,602 | $ | 17,208 | |||||||||||||||||||
Investment income, net of related expenses | 13,067 | 13,321 | 12,168 | 14,123 | 12,066 | 1,001 | 38,556 | 37,247 | 1,309 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | — | 7,527 | (7,167 | ) | 7,167 | — | 532 | (532 | ) | |||||||||||||||||||||||||||
Other revenue | 489 | 1,460 | 1,026 | 5,380 | 3,051 | (2,562 | ) | 2,975 | 4,055 | (1,080 | ) | |||||||||||||||||||||||||||
Total revenues | 289,070 | 301,642 | 289,629 | 326,968 | 284,061 | 5,009 | 880,341 | 863,436 | 16,905 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 241,763 | 252,336 | 251,243 | 260,874 | 232,473 | 9,290 | 745,342 | 708,722 | 36,620 | |||||||||||||||||||||||||||||
Interest credited | — | — | — | 8,126 | (6,798 | ) | 6,798 | — | 1,503 | (1,503 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14,133 | 17,550 | 14,782 | 19,171 | 17,680 | (3,547 | ) | 46,465 | 43,871 | 2,594 | ||||||||||||||||||||||||||||
Other operating expenses | 24,659 | 24,922 | 24,725 | 25,938 | 25,085 | (426 | ) | 74,306 | 74,127 | 179 | ||||||||||||||||||||||||||||
Total benefits and expenses | 280,555 | 294,808 | 290,750 | 314,109 | 268,440 | 12,115 | 866,113 | 828,223 | 37,890 | |||||||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | 8,515 | $ | 6,834 | $ | (1,121 | ) | $ | 12,859 | $ | 15,621 | $ | (7,106 | ) | $ | 14,228 | $ | 35,213 | $ | (20,985 | ) | |||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 87.7 | % | 88.0 | % | 90.9 | % | 87.0 | % | 84.2 | % | 3.5 | % | 88.9 | % | 86.3 | % | 2.6 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5.1 | % | 6.1 | % | 5.3 | % | 6.4 | % | 6.4 | % | (1.3 | )% | 5.5 | % | 5.3 | % | 0.2 | % | ||||||||||||||||||||
Other operating expenses | 9.0 | % | 8.7 | % | 8.9 | % | 8.6 | % | 9.1 | % | (0.1 | )% | 8.9 | % | 9.0 | % | (0.1 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (32,564 | ) | $ | (20,223 | ) | $ | (23,009 | ) | $ | (24,499 | ) | $ | (29,879 | ) | $ | (2,685 | ) | $ | (75,796 | ) | $ | (94,735 | ) | $ | 18,939 | ||||||||||||
Operating income before income taxes | $ | 157 | $ | 46 | $ | (194 | ) | $ | (1,285 | ) | $ | (716 | ) | $ | 873 | $ | 9 | $ | (2,787 | ) | $ | 2,796 | ||||||||||||||||
Critical illness net premiums | $ | 49,531 | $ | 53,805 | $ | 53,643 | $ | 58,610 | $ | 58,069 | $ | (8,538 | ) | $ | 156,979 | $ | 174,566 | $ | (17,587 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 19 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Non-Traditional Segment (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 47,018 | $ | 43,484 | $ | 35,606 | $ | 47,152 | $ | 44,584 | $ | 2,434 | $ | 126,108 | $ | 124,678 | $ | 1,430 | ||||||||||||||||||||
Investment income, net of related expenses | 33,187 | 33,417 | 28,684 | 23,468 | 17,305 | 15,882 | 95,288 | 49,964 | 45,324 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 8,159 | 1,468 | (1,004 | ) | 9,261 | 8 | 8,151 | 8,623 | 909 | 7,714 | ||||||||||||||||||||||||||||
Other revenue | 11,388 | 2,608 | 4,470 | 6,863 | 7,341 | 4,047 | 18,466 | 24,371 | (5,905 | ) | ||||||||||||||||||||||||||||
Total revenues | 99,752 | 80,977 | 67,756 | 86,744 | 69,238 | 30,514 | 248,485 | 199,922 | 48,563 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 45,805 | 44,004 | 36,443 | 52,064 | 37,923 | 7,882 | 126,252 | 109,853 | 16,399 | |||||||||||||||||||||||||||||
Interest credited | 5,540 | 2,966 | 408 | — | — | 5,540 | 8,914 | — | 8,914 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | (304 | ) | 723 | (193 | ) | (325 | ) | (511 | ) | 207 | 226 | (775 | ) | 1,001 | ||||||||||||||||||||||||
Other operating expenses | 4,925 | 5,815 | 5,674 | 6,860 | 2,592 | 2,333 | 16,414 | 10,544 | 5,870 | |||||||||||||||||||||||||||||
Total benefits and expenses | 55,966 | 53,508 | 42,332 | 58,599 | 40,004 | 15,962 | 151,806 | 119,622 | 32,184 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 43,786 | $ | 27,469 | $ | 25,424 | $ | 28,145 | $ | 29,234 | $ | 14,552 | $ | 96,679 | $ | 80,300 | $ | 16,379 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (8,262 | ) | $ | (3,127 | ) | $ | (2,022 | ) | $ | (2,062 | ) | $ | (3,394 | ) | $ | (4,868 | ) | $ | (13,411 | ) | $ | (10,500 | ) | $ | (2,911 | ) | |||||||||||
Income before income taxes | $ | (6,193 | ) | $ | (1,991 | ) | $ | (1,924 | ) | $ | (1,807 | ) | $ | (2,854 | ) | $ | (3,339 | ) | $ | (10,108 | ) | $ | (9,465 | ) | $ | (643 | ) | |||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) The Europe, Middle East and Africa's Non-Traditional segment includes asset intensive, financial reinsurance, capital motivated and longevity closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 20 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Non-Traditional Segment (1) Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 47,018 | $ | 43,484 | $ | 35,606 | $ | 47,152 | $ | 44,584 | $ | 2,434 | $ | 126,108 | $ | 124,678 | $ | 1,430 | ||||||||||||||||||||
Investment income, net of related expenses | 27,647 | 30,451 | 28,276 | 23,468 | 17,305 | 10,342 | 86,374 | 49,964 | 36,410 | |||||||||||||||||||||||||||||
Other revenue | 9,706 | 2,735 | 3,653 | 6,758 | 6,953 | 2,753 | 16,094 | 24,287 | (8,193 | ) | ||||||||||||||||||||||||||||
Total revenues | 84,371 | 76,670 | 67,535 | 77,378 | 68,842 | 15,529 | 228,576 | 198,929 | 29,647 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 45,805 | 44,004 | 36,443 | 52,064 | 37,923 | 7,882 | 126,252 | 109,853 | 16,399 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | (304 | ) | 723 | (193 | ) | (325 | ) | (511 | ) | 207 | 226 | (775 | ) | 1,001 | ||||||||||||||||||||||||
Other operating expenses | 4,925 | 5,815 | 5,674 | 6,860 | 2,592 | 2,333 | 16,414 | 10,544 | 5,870 | |||||||||||||||||||||||||||||
Total benefits and expenses | 50,426 | 50,542 | 41,924 | 58,599 | 40,004 | 10,422 | 142,892 | 119,622 | 23,270 | |||||||||||||||||||||||||||||
Operating income before income taxes | $ | 33,945 | $ | 26,128 | $ | 25,611 | $ | 18,779 | $ | 28,838 | $ | 5,107 | $ | 85,684 | $ | 79,307 | $ | 6,377 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (8,262 | ) | $ | (3,127 | ) | $ | (2,022 | ) | $ | (2,062 | ) | $ | (3,394 | ) | $ | (4,868 | ) | $ | (13,411 | ) | $ | (10,500 | ) | $ | (2,911 | ) | |||||||||||
Operating income before income taxes | $ | (4,742 | ) | $ | (1,819 | ) | $ | (1,978 | ) | $ | (1,441 | ) | $ | (2,780 | ) | $ | (1,962 | ) | $ | (8,539 | ) | $ | (9,387 | ) | $ | 848 | ||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) The Europe, Middle East and Africa's non-traditional segment includes asset intensive, financial reinsurance, capital motivated and longevity closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 21 | |
Reinsurance Group of America, Incorporated Asia Pacific Traditional Segment GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 404,451 | $ | 454,629 | $ | 374,142 | $ | 388,663 | $ | 400,322 | $ | 4,129 | $ | 1,233,222 | $ | 1,162,923 | $ | 70,299 | ||||||||||||||||||||
Investment income, net of related expenses | 21,273 | 20,461 | 19,867 | 20,276 | 19,626 | 1,647 | 61,601 | 60,273 | 1,328 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | 14 | 1,706 | (1,706 | ) | 1,706 | 14 | (1,706 | ) | 1,720 | |||||||||||||||||||||||||||
Other revenue | 1,923 | 2,481 | 176 | 553 | 3,728 | (1,805 | ) | 4,580 | 5,669 | (1,089 | ) | |||||||||||||||||||||||||||
Total revenues | 427,647 | 477,571 | 394,199 | 411,198 | 421,970 | 5,677 | 1,299,417 | 1,227,159 | 72,258 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 365,115 | 338,447 | 274,298 | 284,269 | 333,739 | 31,376 | 977,860 | 924,715 | 53,145 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 4,157 | 67,908 | 44,367 | 49,747 | 41,982 | (37,825 | ) | 116,432 | 138,229 | (21,797 | ) | |||||||||||||||||||||||||||
Other operating expenses | 38,553 | 36,734 | 34,374 | 39,767 | 34,973 | 3,580 | 109,661 | 95,976 | 13,685 | |||||||||||||||||||||||||||||
Total benefits and expenses | 407,825 | 443,089 | 353,039 | 373,783 | 410,694 | (2,869 | ) | 1,203,953 | 1,158,920 | 45,033 | ||||||||||||||||||||||||||||
Income before income taxes | $ | 19,822 | $ | 34,482 | $ | 41,160 | $ | 37,415 | $ | 11,276 | $ | 8,546 | $ | 95,464 | $ | 68,239 | $ | 27,225 | ||||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 90.3 | % | 74.4 | % | 73.3 | % | 73.1 | % | 83.4 | % | 6.9 | % | 79.3 | % | 79.5 | % | (0.2 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1.0 | % | 14.9 | % | 11.9 | % | 12.8 | % | 10.5 | % | (9.5 | )% | 9.4 | % | 11.9 | % | (2.5 | )% | ||||||||||||||||||||
Other operating expenses | 9.5 | % | 8.1 | % | 9.2 | % | 10.2 | % | 8.7 | % | 0.8 | % | 8.9 | % | 8.3 | % | 0.6 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 20,095 | $ | (7,741 | ) | $ | (21,627 | ) | $ | (43,034 | ) | $ | (69,139 | ) | $ | 89,234 | $ | (9,273 | ) | $ | (155,139 | ) | $ | 145,866 | ||||||||||||||
Income before income taxes | $ | 331 | $ | 506 | $ | (2,735 | ) | $ | (4,686 | ) | $ | (119 | ) | $ | 450 | $ | (1,898 | ) | $ | (3,348 | ) | $ | 1,450 | |||||||||||||||
Critical illness net premiums | $ | 100,641 | $ | 113,297 | $ | 98,389 | $ | 81,271 | $ | 86,341 | $ | 14,300 | $ | 312,327 | $ | 231,328 | $ | 80,999 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 22 | |
Reinsurance Group of America, Incorporated Asia Pacific Traditional Segment Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 404,451 | $ | 454,629 | $ | 374,142 | $ | 388,663 | $ | 400,322 | $ | 4,129 | $ | 1,233,222 | $ | 1,162,923 | $ | 70,299 | ||||||||||||||||||||
Investment income, net of related expenses | 21,273 | 20,461 | 19,867 | 20,276 | 19,626 | 1,647 | 61,601 | 60,273 | 1,328 | |||||||||||||||||||||||||||||
Investment related losses, net | — | — | (2 | ) | — | — | — | (2 | ) | — | (2 | ) | ||||||||||||||||||||||||||
Other revenue | 1,923 | 2,481 | 176 | 553 | 3,728 | (1,805 | ) | 4,580 | 5,669 | (1,089 | ) | |||||||||||||||||||||||||||
Total revenues | 427,647 | 477,571 | 394,183 | 409,492 | 423,676 | 3,971 | 1,299,401 | 1,228,865 | 70,536 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 365,115 | 338,447 | 274,298 | 284,269 | 333,739 | 31,376 | 977,860 | 924,715 | 53,145 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 4,157 | 67,908 | 44,367 | 49,747 | 41,982 | (37,825 | ) | 116,432 | 138,229 | (21,797 | ) | |||||||||||||||||||||||||||
Other operating expenses | 38,553 | 36,734 | 34,374 | 39,767 | 34,973 | 3,580 | 109,661 | 95,976 | 13,685 | |||||||||||||||||||||||||||||
Total benefits and expenses | 407,825 | 443,089 | 353,039 | 373,783 | 410,694 | (2,869 | ) | 1,203,953 | 1,158,920 | 45,033 | ||||||||||||||||||||||||||||
Operating income before income taxes | $ | 19,822 | $ | 34,482 | $ | 41,144 | $ | 35,709 | $ | 12,982 | $ | 6,840 | $ | 95,448 | $ | 69,945 | $ | 25,503 | ||||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 90.3 | % | 74.4 | % | 73.3 | % | 73.1 | % | 83.4 | % | 6.9 | % | 79.3 | % | 79.5 | % | (0.2 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1.0 | % | 14.9 | % | 11.9 | % | 12.8 | % | 10.5 | % | (9.5 | )% | 9.4 | % | 11.9 | % | (2.5 | )% | ||||||||||||||||||||
Other operating expenses | 9.5 | % | 8.1 | % | 9.2 | % | 10.2 | % | 8.7 | % | 0.8 | % | 8.9 | % | 8.3 | % | 0.6 | % | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 20,095 | $ | (7,741 | ) | $ | (21,627 | ) | $ | (43,034 | ) | $ | (69,139 | ) | $ | 89,234 | $ | (9,273 | ) | $ | (155,139 | ) | $ | 145,866 | ||||||||||||||
Operating income before income taxes | $ | 331 | $ | 506 | $ | (2,748 | ) | $ | (4,204 | ) | $ | (601 | ) | $ | 932 | $ | (1,911 | ) | $ | (3,830 | ) | $ | 1,919 | |||||||||||||||
Critical illness net premiums | $ | 100,641 | $ | 113,297 | $ | 98,389 | $ | 81,271 | $ | 86,341 | $ | 14,300 | $ | 312,327 | $ | 231,328 | $ | 80,999 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 23 | |
Reinsurance Group of America, Incorporated Asia Pacific Non-Traditional Segment (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 743 | $ | (1,493 | ) | $ | 5,686 | $ | 5,487 | $ | 2,807 | $ | (2,064 | ) | $ | 4,936 | $ | 13,987 | $ | (9,051 | ) | |||||||||||||||||
Investment income, net of related expenses | 5,827 | 5,885 | 6,374 | 6,659 | 4,482 | 1,345 | 18,086 | 12,019 | 6,067 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 6,108 | 6,527 | 1,687 | 671 | (175 | ) | 6,283 | 14,322 | (1,202 | ) | 15,524 | |||||||||||||||||||||||||||
Other revenue | 6,359 | 6,126 | 6,324 | 5,698 | 4,306 | 2,053 | 18,809 | 13,262 | 5,547 | |||||||||||||||||||||||||||||
Total revenues | 19,037 | 17,045 | 20,071 | 18,515 | 11,420 | 7,617 | 56,153 | 38,066 | 18,087 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 3,777 | 8,237 | 3,473 | 4,951 | 903 | 2,874 | 15,487 | 11,344 | 4,143 | |||||||||||||||||||||||||||||
Interest credited | 3,308 | 3,136 | 3,030 | 3,095 | 1,023 | 2,285 | 9,474 | 1,376 | 8,098 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1,482 | 1,667 | 1,287 | 1,297 | 292 | 1,190 | 4,436 | 1,257 | 3,179 | |||||||||||||||||||||||||||||
Other operating expenses | 2,921 | 4,078 | 3,728 | 3,705 | 3,790 | (869 | ) | 10,727 | 9,937 | 790 | ||||||||||||||||||||||||||||
Total benefits and expenses | 11,488 | 17,118 | 11,518 | 13,048 | 6,008 | 5,480 | 40,124 | 23,914 | 16,210 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 7,549 | $ | (73 | ) | $ | 8,553 | $ | 5,467 | $ | 5,412 | $ | 2,137 | $ | 16,029 | $ | 14,152 | $ | 1,877 | |||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 60 | $ | (225 | ) | $ | 243 | $ | (373 | ) | $ | (392 | ) | $ | 452 | $ | 78 | $ | (2,234 | ) | $ | 2,312 | ||||||||||||||||
Income before income taxes | $ | 917 | $ | 233 | $ | 778 | $ | (587 | ) | $ | (1,624 | ) | $ | 2,541 | $ | 1,928 | $ | (2,320 | ) | $ | 4,248 | |||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(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 24 | |
Reinsurance Group of America, Incorporated Asia Pacific Non-Traditional Segment (1) Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 743 | $ | (1,493 | ) | $ | 5,686 | $ | 5,487 | $ | 2,807 | $ | (2,064 | ) | $ | 4,936 | $ | 13,987 | $ | (9,051 | ) | |||||||||||||||||
Investment income, net of related expenses | 5,827 | 5,885 | 6,374 | 6,659 | 4,482 | 1,345 | 18,086 | 12,019 | 6,067 | |||||||||||||||||||||||||||||
Investment related gains, net | 825 | 602 | 576 | 654 | 706 | 119 | 2,003 | 1,714 | 289 | |||||||||||||||||||||||||||||
Other revenue | 6,359 | 6,126 | 6,324 | 5,698 | 4,306 | 2,053 | 18,809 | 13,262 | 5,547 | |||||||||||||||||||||||||||||
Total revenues | 13,754 | 11,120 | 18,960 | 18,498 | 12,301 | 1,453 | 43,834 | 40,982 | 2,852 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 3,777 | 8,237 | 3,473 | 4,951 | 903 | 2,874 | 15,487 | 11,344 | 4,143 | |||||||||||||||||||||||||||||
Interest credited | 3,308 | 3,136 | 3,030 | 3,095 | 1,023 | 2,285 | 9,474 | 1,376 | 8,098 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1,482 | 1,667 | 1,287 | 1,297 | 292 | 1,190 | 4,436 | 1,257 | 3,179 | |||||||||||||||||||||||||||||
Other operating expenses | 2,921 | 4,078 | 3,728 | 3,705 | 3,790 | (869 | ) | 10,727 | 9,937 | 790 | ||||||||||||||||||||||||||||
Total benefits and expenses | 11,488 | 17,118 | 11,518 | 13,048 | 6,008 | 5,480 | 40,124 | 23,914 | 16,210 | |||||||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | 2,266 | $ | (5,998 | ) | $ | 7,442 | $ | 5,450 | $ | 6,293 | $ | (4,027 | ) | $ | 3,710 | $ | 17,068 | $ | (13,358 | ) | |||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 60 | $ | (225 | ) | $ | 243 | $ | (373 | ) | $ | (392 | ) | $ | 452 | $ | 78 | $ | (2,234 | ) | $ | 2,312 | ||||||||||||||||
Operating income before income taxes | $ | 451 | $ | (113 | ) | $ | 323 | $ | (774 | ) | $ | (1,719 | ) | $ | 2,170 | $ | 661 | $ | (2,784 | ) | $ | 3,445 | ||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(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 25 | |
Reinsurance Group of America, Incorporated Corporate and Other Segment GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 72 | $ | 108 | $ | 109 | $ | 112 | $ | 133 | $ | (61 | ) | $ | 289 | $ | 453 | $ | (164 | ) | ||||||||||||||||||
Investment income, net of related expenses | 33,478 | 25,190 | 22,921 | 28,355 | 31,693 | 1,785 | 81,589 | 95,095 | (13,506 | ) | ||||||||||||||||||||||||||||
Investment related gains (losses), net | 12,258 | 32,036 | 7,423 | (34,276 | ) | (30,710 | ) | 42,968 | 51,717 | (30,831 | ) | 82,548 | ||||||||||||||||||||||||||
Other revenue | 4,893 | 4,653 | 2,049 | 6,665 | (1,675 | ) | 6,568 | 11,595 | 3,322 | 8,273 | ||||||||||||||||||||||||||||
Total revenues | 50,701 | 61,987 | 32,502 | 856 | (559 | ) | 51,260 | 145,190 | 68,039 | 77,151 | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | (15 | ) | (6 | ) | 27 | (11 | ) | (4 | ) | (11 | ) | 6 | 49 | (43 | ) | |||||||||||||||||||||||
Interest credited | 622 | 459 | 507 | 369 | 244 | 378 | 1,588 | 659 | 929 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (24,565 | ) | (25,149 | ) | (23,812 | ) | (22,886 | ) | (22,234 | ) | (2,331 | ) | (73,526 | ) | (64,665 | ) | (8,861 | ) | ||||||||||||||||||||
Other operating expenses | 32,414 | 40,975 | 39,978 | 32,878 | 31,668 | 746 | 113,367 | 76,139 | 37,228 | |||||||||||||||||||||||||||||
Interest expense | 43,063 | 20,331 | 32,807 | 35,820 | 35,565 | 7,498 | 96,201 | 107,043 | (10,842 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,484 | 6,587 | 6,325 | 6,182 | 5,133 | 1,351 | 19,396 | 16,462 | 2,934 | |||||||||||||||||||||||||||||
Total benefits and expenses | 58,003 | 43,197 | 55,832 | 52,352 | 50,372 | 7,631 | 157,032 | 135,687 | 21,345 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (7,302 | ) | $ | 18,790 | $ | (23,330 | ) | $ | (51,496 | ) | $ | (50,931 | ) | $ | 43,629 | $ | (11,842 | ) | $ | (67,648 | ) | $ | 55,806 | ||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 294 | $ | (1,941 | ) | $ | (1,409 | ) | $ | (2,642 | ) | $ | (1,122 | ) | $ | 1,416 | $ | (3,056 | ) | $ | (3,436 | ) | $ | 380 | ||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 26 | |
Reinsurance Group of America, Incorporated Corporate and Other Segment Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Qtr vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 72 | $ | 108 | $ | 109 | $ | 112 | $ | 133 | $ | (61 | ) | $ | 289 | $ | 453 | $ | (164 | ) | ||||||||||||||||||
Investment income, net of related expenses | 33,478 | 25,190 | 22,921 | 28,355 | 31,693 | 1,785 | 81,589 | 95,095 | (13,506 | ) | ||||||||||||||||||||||||||||
Investment related gains, net | 568 | 496 | 493 | 523 | 519 | 49 | 1,557 | 1,426 | 131 | |||||||||||||||||||||||||||||
Other revenue | 4,870 | 4,636 | 2,035 | 6,650 | (1,670 | ) | 6,540 | 11,541 | 3,408 | 8,133 | ||||||||||||||||||||||||||||
Total revenues | 38,988 | 30,430 | 25,558 | 35,640 | 30,675 | 8,313 | 94,976 | 100,382 | (5,406 | ) | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | (15 | ) | (6 | ) | 27 | (11 | ) | (4 | ) | (11 | ) | 6 | 49 | (43 | ) | |||||||||||||||||||||||
Interest credited | 622 | 459 | 507 | 369 | 244 | 378 | 1,588 | 659 | 929 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (24,565 | ) | (25,149 | ) | (23,812 | ) | (22,886 | ) | (22,234 | ) | (2,331 | ) | (73,526 | ) | (64,665 | ) | (8,861 | ) | ||||||||||||||||||||
Other operating expenses | 32,414 | 40,975 | 39,978 | 32,878 | 31,668 | 746 | 113,367 | 76,139 | 37,228 | |||||||||||||||||||||||||||||
Interest expense | 43,063 | 20,331 | 32,807 | 35,820 | 35,565 | 7,498 | 96,201 | 107,043 | (10,842 | ) | ||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,484 | 6,587 | 6,325 | 6,182 | 5,133 | 1,351 | 19,396 | 16,462 | 2,934 | |||||||||||||||||||||||||||||
Total benefits and expenses | 58,003 | 43,197 | 55,832 | 52,352 | 50,372 | 7,631 | 157,032 | 135,687 | 21,345 | |||||||||||||||||||||||||||||
Operating income (loss) before income taxes | (19,015 | ) | (12,767 | ) | (30,274 | ) | (16,712 | ) | (19,697 | ) | 682 | (62,056 | ) | (35,305 | ) | (26,751 | ) | |||||||||||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Operating income before income taxes | $ | 513 | $ | (442 | ) | $ | (868 | ) | $ | (2,604 | ) | $ | (1,407 | ) | $ | 1,920 | $ | (797 | ) | $ | (3,108 | ) | $ | 2,311 | ||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 27 | |
Reinsurance Group of America, Incorporated Summary of Segment GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 77,081 | $ | 111,430 | $ | 51,098 | $ | 79,483 | $ | 55,652 | $ | 21,429 | $ | 239,609 | $ | 156,288 | $ | 83,321 | ||||||||||||||||||||
Non-Traditional: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 88,732 | 93,979 | (30,830 | ) | 30,874 | 24,182 | 64,550 | 151,881 | 122,072 | 29,809 | ||||||||||||||||||||||||||||
Financial Reinsurance | 13,982 | 14,875 | 15,934 | 15,936 | 12,073 | 1,909 | 44,791 | 39,081 | 5,710 | |||||||||||||||||||||||||||||
Total U.S. and Latin America | 179,795 | 220,284 | 36,202 | 126,293 | 91,907 | 87,888 | 436,281 | 317,441 | 118,840 | |||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | 34,275 | 43,309 | 20,095 | 44,640 | 34,072 | 203 | 97,679 | 79,535 | 18,144 | |||||||||||||||||||||||||||||
Canada Non-Traditional | 1,160 | 2,128 | 592 | 3,420 | 3,257 | (2,097 | ) | 3,880 | 10,482 | (6,602 | ) | |||||||||||||||||||||||||||
Total Canada | 35,435 | 45,437 | 20,687 | 48,060 | 37,329 | (1,894 | ) | 101,559 | 90,017 | 11,542 | ||||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 8,515 | 6,834 | (1,116 | ) | 12,859 | 15,910 | (7,395 | ) | 14,233 | 35,551 | (21,318 | ) | ||||||||||||||||||||||||||
Europe, Middle East and Africa Non-Traditional | 43,786 | 27,469 | 25,424 | 28,145 | 29,234 | 14,552 | 96,679 | 80,300 | 16,379 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 52,301 | 34,303 | 24,308 | 41,004 | 45,144 | 7,157 | 110,912 | 115,851 | (4,939 | ) | ||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 19,822 | 34,482 | 41,160 | 37,415 | 11,276 | 8,546 | 95,464 | 68,239 | 27,225 | |||||||||||||||||||||||||||||
Asia Pacific Non-Traditional | 7,549 | (73 | ) | 8,553 | 5,467 | 5,412 | 2,137 | 16,029 | 14,152 | 1,877 | ||||||||||||||||||||||||||||
Total Asia Pacific | 27,371 | 34,409 | 49,713 | 42,882 | 16,688 | 10,683 | 111,493 | 82,391 | 29,102 | |||||||||||||||||||||||||||||
Corporate and Other | (7,302 | ) | 18,790 | (23,330 | ) | (51,496 | ) | (50,931 | ) | 43,629 | (11,842 | ) | (67,648 | ) | 55,806 | |||||||||||||||||||||||
Consolidated Income before Income Taxes | $ | 287,600 | $ | 353,223 | $ | 107,580 | $ | 206,743 | $ | 140,137 | $ | 147,463 | $ | 748,403 | $ | 538,052 | $ | 210,351 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 28 | |
Reinsurance Group of America, Incorporated Summary of Segment Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 80,475 | $ | 112,312 | $ | 53,198 | $ | 78,990 | $ | 54,726 | $ | 25,749 | $ | 245,985 | $ | 154,475 | $ | 91,510 | ||||||||||||||||||||
Non-Traditional: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 58,693 | 54,323 | 45,268 | 47,596 | 55,230 | 3,463 | 158,284 | 151,966 | 6,318 | |||||||||||||||||||||||||||||
Financial Reinsurance | 13,982 | 14,875 | 15,934 | 15,936 | 12,073 | 1,909 | 44,791 | 39,081 | 5,710 | |||||||||||||||||||||||||||||
Total U.S. and Latin America | 153,150 | 181,510 | 114,400 | 142,522 | 122,029 | 31,121 | 449,060 | 345,522 | 103,538 | |||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | 30,624 | 40,907 | 19,364 | 45,086 | 37,793 | (7,169 | ) | 90,895 | 78,725 | 12,170 | ||||||||||||||||||||||||||||
Canada Non-Traditional | 1,160 | 2,128 | 592 | 3,420 | 3,257 | (2,097 | ) | 3,880 | 10,482 | (6,602 | ) | |||||||||||||||||||||||||||
Total Canada | 31,784 | 43,035 | 19,956 | 48,506 | 41,050 | (9,266 | ) | 94,775 | 89,207 | 5,568 | ||||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 8,515 | 6,834 | (1,121 | ) | 12,859 | 15,621 | (7,106 | ) | 14,228 | 35,213 | (20,985 | ) | ||||||||||||||||||||||||||
Europe, Middle East and Africa Non-Traditional | 33,945 | 26,128 | 25,611 | 18,779 | 28,838 | 5,107 | 85,684 | 79,307 | 6,377 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 42,460 | 32,962 | 24,490 | 31,638 | 44,459 | (1,999 | ) | 99,912 | 114,520 | (14,608 | ) | |||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 19,822 | 34,482 | 41,144 | 35,709 | 12,982 | 6,840 | 95,448 | 69,945 | 25,503 | |||||||||||||||||||||||||||||
Asia Pacific Non-Traditional | 2,266 | (5,998 | ) | 7,442 | 5,450 | 6,293 | (4,027 | ) | 3,710 | 17,068 | (13,358 | ) | ||||||||||||||||||||||||||
Total Asia Pacific | 22,088 | 28,484 | 48,586 | 41,159 | 19,275 | 2,813 | 99,158 | 87,013 | 12,145 | |||||||||||||||||||||||||||||
Corporate and Other | (19,015 | ) | (12,767 | ) | (30,274 | ) | (16,712 | ) | (19,697 | ) | 682 | (62,056 | ) | (35,305 | ) | (26,751 | ) | |||||||||||||||||||||
Consolidated Operating Income before Income Taxes | $ | 230,467 | $ | 273,224 | $ | 177,158 | $ | 247,113 | $ | 207,116 | $ | 23,351 | $ | 680,849 | $ | 600,957 | $ | 79,892 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 29 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Cash and Invested Assets | ||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | ||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 33,536,419 | $ | 33,160,976 | $ | 31,148,714 | $ | 29,642,905 | $ | 27,411,788 | ||||||||||
Mortgage loans on real estate | 3,607,700 | 3,377,039 | 3,292,496 | 3,129,951 | 3,170,002 | |||||||||||||||
Policy loans | 1,414,963 | 1,445,410 | 1,451,857 | 1,468,796 | 1,444,009 | |||||||||||||||
Funds withheld at interest | 5,922,656 | 5,899,289 | 5,797,183 | 5,880,203 | 5,675,174 | |||||||||||||||
Short-term investments | 126,702 | 195,979 | 431,535 | 558,284 | 58,200 | |||||||||||||||
Other invested assets | 1,777,065 | 1,682,143 | 1,368,544 | 1,298,120 | 1,187,504 | |||||||||||||||
Cash and cash equivalents | 1,379,693 | 1,034,329 | 1,502,082 | 1,525,275 | 1,747,692 | |||||||||||||||
Total cash and invested assets | $ | 47,765,198 | $ | 46,795,165 | $ | 44,992,411 | $ | 43,503,534 | $ | 40,694,369 | ||||||||||
Investment Income and Yield Summary | |||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | |||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||||
Average invested assets at amortized cost (1) | $ | 24,128,430 | $ | 23,216,459 | $ | 22,379,003 | $ | 21,552,560 | $ | 20,988,046 | $ | 3,140,384 | $ | 22,982,245 | $ | 20,783,655 | $ | 2,198,590 | |||||||||||||||||||||
Net investment income (1) | $ | 263,111 | $ | 268,747 | $ | 245,299 | $ | 262,660 | $ | 240,168 | $ | 22,943 | $ | 777,157 | $ | 739,538 | $ | 37,619 | |||||||||||||||||||||
Annualized investment yield (ratio of net investment income to average invested assets) (1) | 4.43 | % | 4.71 | % | 4.46 | % | 4.96 | % | (2 | ) | 4.66 | % | -0.23 | % | 4.53 | % | 4.77 | % | -0.24 | % | |||||||||||||||||||
(1) Excludes spread-related business (e.g. coinsurance of annuities). | |||||||||||||||||||||||||||||||||||||||
(2) Includes the cumulative effective of income related to a funds withheld transaction executed in the fourth quarter of 2015, retroactive to the beginning of the year. | |||||||||||||||||||||||||||||||||||||||
| Page 30 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Fixed Maturity and Equity Securities (Excludes Funds Withheld Portfolios) | |||||||||||||||||||||||
September 30, 2016 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 18,762,648 | $ | 1,498,816 | $ | 96,616 | $ | 20,164,848 | 60.2 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,598,625 | 1,541,754 | — | 4,140,379 | 12.3 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 1,247,677 | 67,854 | 3,839 | 1,311,692 | 3.9 | % | (300 | ) | |||||||||||||||
Asset-backed securities | 1,388,263 | 13,706 | 19,395 | 1,382,574 | 4.1 | % | 275 | ||||||||||||||||
Commercial mortgage-backed securities | 1,402,249 | 73,402 | 618 | 1,475,033 | 4.4 | % | (1,609 | ) | |||||||||||||||
U.S. government and agencies | 1,479,295 | 80,402 | 161 | 1,559,536 | 4.7 | % | — | ||||||||||||||||
State and political subdivisions | 549,669 | 72,598 | 4,418 | 617,849 | 1.8 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,669,470 | 220,274 | 5,236 | 2,884,508 | 8.6 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 30,097,896 | $ | 3,568,806 | $ | 130,283 | $ | 33,536,419 | 100.0 | % | $ | (1,634 | ) | ||||||||||
Non-redeemable preferred stock | $ | 56,944 | $ | 2,512 | $ | 6,604 | $ | 52,852 | 12.6 | % | |||||||||||||
Other equity securities | 360,839 | 7,013 | 456 | 367,396 | 87.4 | % | |||||||||||||||||
Total equity securities | $ | 417,783 | $ | 9,525 | $ | 7,060 | $ | 420,248 | 100.0 | % | |||||||||||||
December 31, 2015 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 17,575,507 | $ | 599,718 | $ | 467,069 | $ | 17,708,156 | 59.7 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,469,009 | 1,110,282 | 2,532 | 3,576,759 | 12.1 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 1,277,998 | 45,152 | 11,673 | 1,311,477 | 4.4 | % | (300 | ) | |||||||||||||||
Asset-backed securities | 1,219,000 | 12,052 | 18,376 | 1,212,676 | 4.1 | % | 354 | ||||||||||||||||
Commercial mortgage-backed securities | 1,456,848 | 37,407 | 11,168 | 1,483,087 | 5.0 | % | (1,609 | ) | |||||||||||||||
U.S. government and agencies | 1,423,791 | 15,586 | 57,718 | 1,381,659 | 4.7 | % | — | ||||||||||||||||
State and political subdivisions | 480,067 | 40,014 | 9,067 | 511,014 | 1.7 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,420,757 | 78,964 | 41,644 | 2,458,077 | 8.3 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 28,322,977 | $ | 1,939,175 | $ | 619,247 | $ | 29,642,905 | 100.0 | % | $ | (1,555 | ) | ||||||||||
Non-redeemable preferred stock | $ | 85,645 | $ | 7,837 | $ | 5,962 | $ | 87,520 | 69.5 | % | |||||||||||||
Other equity securities | 40,584 | — | 2,242 | 38,342 | 30.5 | % | |||||||||||||||||
Total equity securities | $ | 126,229 | $ | 7,837 | $ | 8,204 | $ | 125,862 | 100.0 | % | |||||||||||||
| Page 31 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Corporate Fixed Maturities Securities by Sector (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||||
September 30, 2016 | December 31, 2015 | |||||||||||||||||||||||||
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 | $ | 4,148,648 | $ | 4,363,327 | 21.8 | % | A- | $ | 3,557,406 | $ | 3,641,125 | 20.5 | % | A- | ||||||||||||
Brokerage/asset managers/exchanges | 400,252 | 428,406 | 2.1 | % | A | 315,848 | 327,477 | 1.8 | % | A | ||||||||||||||||
Finance companies | 121,742 | 130,694 | 0.6 | % | A- | 68,996 | 70,947 | 0.4 | % | BBB- | ||||||||||||||||
Insurance | 1,201,312 | 1,292,041 | 6.4 | % | A- | 877,691 | 908,752 | 5.1 | % | A- | ||||||||||||||||
REITs | 557,980 | 594,973 | 3.0 | % | BBB+ | 524,424 | 540,120 | 3.1 | % | BBB+ | ||||||||||||||||
Other finance | 100,824 | 106,754 | 0.5 | % | BBB+ | 64,426 | 66,623 | 0.4 | % | A- | ||||||||||||||||
Total financial institutions | $ | 6,530,758 | $ | 6,916,195 | 34.4 | % | $ | 5,408,791 | $ | 5,555,044 | 31.3 | % | ||||||||||||||
Industrials | ||||||||||||||||||||||||||
Basic | $ | 892,323 | $ | 951,840 | 4.7 | % | BBB | $ | 937,498 | $ | 894,466 | 5.1 | % | BBB | ||||||||||||
Capital goods | 1,002,552 | 1,057,647 | 5.2 | % | BBB+ | 1,090,670 | 1,091,523 | 6.2 | % | BBB+ | ||||||||||||||||
Communications | 1,828,975 | 1,999,455 | 9.9 | % | BBB | 1,891,983 | 1,912,375 | 10.8 | % | BBB | ||||||||||||||||
Consumer cyclical | 1,065,703 | 1,140,431 | 5.7 | % | BBB+ | 1,015,183 | 1,028,521 | 5.8 | % | BBB+ | ||||||||||||||||
Consumer noncyclical | 1,931,379 | 2,129,698 | 10.6 | % | A- | 1,762,018 | 1,805,347 | 10.2 | % | A- | ||||||||||||||||
Energy | 1,873,902 | 1,979,153 | 9.8 | % | BBB+ | 2,064,824 | 1,922,366 | 10.9 | % | BBB+ | ||||||||||||||||
Technology | 673,034 | 712,706 | 3.5 | % | A | 569,174 | 574,280 | 3.2 | % | A- | ||||||||||||||||
Transportation | 859,228 | 932,491 | 4.6 | % | A- | 763,055 | 777,939 | 4.4 | % | A- | ||||||||||||||||
Other industrial | 114,393 | 124,811 | 0.6 | % | BBB+ | 117,021 | 123,100 | 0.7 | % | BBB+ | ||||||||||||||||
Total industrials | $ | 10,241,489 | $ | 11,028,232 | 54.6 | % | $ | 10,211,426 | $ | 10,129,917 | 57.3 | % | ||||||||||||||
Utilities | ||||||||||||||||||||||||||
Electric | $ | 1,437,040 | $ | 1,581,464 | 7.8 | % | A- | $ | 1,395,335 | $ | 1,444,368 | 8.2 | % | BBB+ | ||||||||||||
Natural gas | 325,547 | 365,055 | 1.8 | % | A- | 315,826 | 323,206 | 1.8 | % | A- | ||||||||||||||||
Other utility | 227,814 | 273,902 | 1.4 | % | A- | 244,129 | 255,621 | 1.4 | % | A- | ||||||||||||||||
Total utilities | $ | 1,990,401 | $ | 2,220,421 | 11.0 | % | $ | 1,955,290 | $ | 2,023,195 | 11.4 | % | ||||||||||||||
Total | $ | 18,762,648 | $ | 20,164,848 | 100.0 | % | BBB+ | $ | 17,575,507 | $ | 17,708,156 | 100.0 | % | BBB+ | ||||||||||||
(1) The Average Credit Rating designations are based on the weighted average ratings from nationally recognized statistical rating organizations (NRSRO), 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 National | ||||||||||||||||||||||||||
Association of Insurance Commissioners (NAIC). | ||||||||||||||||||||||||||
| Page 32 | |
Reinsurance Group of America, Incorporated
Investments
(USD thousands)
Ratings of Fixed Maturity Securities (Excludes Funds Withheld Portfolios) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 19,794,556 | $ | 22,594,066 | 67.3 | % | $ | 19,755,011 | $ | 22,392,311 | 67.5 | % | $ | 18,511,837 | $ | 20,516,462 | 65.9 | % | $ | 17,801,017 | $ | 19,231,535 | 64.8 | % | $ | 16,479,884 | $ | 18,012,729 | 65.7 | % | ||||||||||||||||||||||||||
2 | BBB | 8,660,225 | 9,296,652 | 27.7 | % | 8,679,819 | 9,130,971 | 27.5 | % | 8,813,991 | 9,005,192 | 28.9 | % | 8,838,444 | 8,830,172 | 29.8 | % | 7,567,172 | 7,691,301 | 28.1 | % | ||||||||||||||||||||||||||||||||||||
3 | BB | 1,010,694 | 1,027,001 | 3.1 | % | 1,012,092 | 1,018,629 | 3.1 | % | 1,096,165 | 1,057,763 | 3.4 | % | 1,054,449 | 1,001,614 | 3.4 | % | 1,061,245 | 1,015,762 | 3.7 | % | ||||||||||||||||||||||||||||||||||||
4 | B | 451,456 | 441,887 | 1.3 | % | 456,457 | 431,649 | 1.3 | % | 402,872 | 372,795 | 1.2 | % | 399,417 | 359,591 | 1.2 | % | 414,775 | 389,089 | 1.4 | % | ||||||||||||||||||||||||||||||||||||
5 | CCC | 157,857 | 151,182 | 0.5 | % | 143,675 | 135,927 | 0.4 | % | 178,537 | 165,491 | 0.5 | % | 207,351 | 197,498 | 0.7 | % | 261,015 | 246,211 | 0.9 | % | ||||||||||||||||||||||||||||||||||||
6 | In or near default | 23,108 | 25,631 | 0.1 | % | 29,830 | 51,489 | 0.2 | % | 31,872 | 31,011 | 0.1 | % | 22,299 | 22,495 | 0.1 | % | 60,704 | 56,696 | 0.2 | % | ||||||||||||||||||||||||||||||||||||
Total | $ | 30,097,896 | $ | 33,536,419 | 100.0 | % | $ | 30,076,884 | $ | 33,160,976 | 100.0 | % | $ | 29,035,274 | $ | 31,148,714 | 100.0 | % | $ | 28,322,977 | $ | 29,642,905 | 100.0 | % | $ | 25,844,795 | $ | 27,411,788 | 100.0 | % | |||||||||||||||||||||||||||
(1) Structured securities held by the Company’s insurance subsidiaries that maintain the 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 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 | ||||||||||||||||||||||||||||||||||||||||
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | ||||||||||||||||||||||||||||||||||||
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 | $ | 590,881 | $ | 642,041 | $ | 601,728 | $ | 659,526 | $ | 593,662 | $ | 642,617 | $ | 602,524 | $ | 634,077 | $ | 614,272 | $ | 657,066 | ||||||||||||||||||||
Non-agency | 656,796 | 669,651 | 623,990 | 633,252 | 737,232 | 738,280 | 675,474 | 677,400 | 619,886 | 626,394 | ||||||||||||||||||||||||||||||
Total residential mortgage-backed securities | 1,247,677 | 1,311,692 | 1,225,718 | 1,292,778 | 1,330,894 | 1,380,897 | 1,277,998 | 1,311,477 | 1,234,158 | 1,283,460 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,402,249 | 1,475,033 | 1,441,091 | 1,507,693 | 1,466,500 | 1,508,183 | 1,456,848 | 1,483,087 | 1,441,845 | 1,491,951 | ||||||||||||||||||||||||||||||
Asset-backed securities | 1,388,263 | 1,382,574 | 1,377,736 | 1,356,677 | 1,319,616 | 1,289,381 | 1,219,000 | 1,212,676 | 1,055,760 | 1,061,372 | ||||||||||||||||||||||||||||||
Total | $ | 4,038,189 | $ | 4,169,299 | $ | 4,044,545 | $ | 4,157,148 | $ | 4,117,010 | $ | 4,178,461 | $ | 3,953,846 | $ | 4,007,240 | $ | 3,731,763 | $ | 3,836,783 | ||||||||||||||||||||
| Page 33 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Gross Unrealized Losses Aging Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||||||||||||||||||
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% | $ | 85,446 | 62.2 | % | $ | 148,844 | 74.9 | % | $ | 272,450 | 70.5 | % | $ | 458,676 | 73.1 | % | $ | 359,324 | 79.5 | % | |||||||||||||||
20% or more for less than six months | 12,551 | 9.1 | % | 7,248 | 3.7 | % | 68,067 | 17.6 | % | 140,568 | 22.4 | % | 69,197 | 15.3 | % | ||||||||||||||||||||
20% or more for six months or greater | 32,286 | 23.5 | % | 34,078 | 17.2 | % | 36,949 | 9.6 | % | 20,003 | 3.2 | % | 14,480 | 3.2 | % | ||||||||||||||||||||
Total | $ | 130,283 | 94.8 | % | $ | 190,170 | 95.8 | % | $ | 377,466 | 97.7 | % | $ | 619,247 | 98.7 | % | $ | 443,001 | 98.0 | % | |||||||||||||||
Equity Securities | |||||||||||||||||||||||||||||||||||
September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | September 30, 2015 | |||||||||||||||||||||||||||||||
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% | $ | 2,588 | 1.9 | % | $ | 1,794 | 0.9 | % | $ | 2,678 | 0.7 | % | $ | 4,433 | 0.7 | % | $ | 4,127 | 0.9 | % | |||||||||||||||
20% or more for less than six months | — | 0.0 | % | 1,685 | 0.8 | % | 1,672 | 0.4 | % | 1,927 | 0.3 | % | 3,687 | 0.8 | % | ||||||||||||||||||||
20% or more for six months or greater | 4,472 | 3.3 | % | 4,903 | 2.5 | % | 4,714 | 1.2 | % | 1,844 | 0.3 | % | 1,243 | 0.3 | % | ||||||||||||||||||||
Total | $ | 7,060 | 5.2 | % | $ | 8,382 | 4.2 | % | $ | 9,064 | 2.3 | % | $ | 8,204 | 1.3 | % | $ | 9,057 | 2.0 | % | |||||||||||||||
| Page 34 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Fixed Maturities and Equity Securities Below Amortized Cost (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||
As of September 30, 2016 | ||||||||||||||||||||||||
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 | $ | 775,973 | $ | 11,522 | $ | 567,398 | $ | 29,794 | $ | 1,343,371 | $ | 41,316 | ||||||||||||
Canadian and Canadian provincial governments | — | — | — | — | — | — | ||||||||||||||||||
Residential mortgage-backed securities | 85,970 | 593 | 107,240 | 3,236 | 193,210 | 3,829 | ||||||||||||||||||
Asset-backed securities | 341,260 | 4,816 | 314,518 | 11,488 | 655,778 | 16,304 | ||||||||||||||||||
Commercial mortgage-backed securities | 51,965 | 193 | 22,415 | 425 | 74,380 | 618 | ||||||||||||||||||
U.S. government and agencies | 86,499 | 161 | — | — | 86,499 | 161 | ||||||||||||||||||
State and political subdivisions | 53,229 | 841 | 13,141 | 3,577 | 66,370 | 4,418 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 131,702 | 1,077 | 51,862 | 2,340 | 183,564 | 3,417 | ||||||||||||||||||
Total investment grade securities | $ | 1,526,598 | $ | 19,203 | $ | 1,076,574 | $ | 50,860 | $ | 2,603,172 | $ | 70,063 | ||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 314,962 | $ | 9,132 | $ | 168,865 | $ | 46,168 | $ | 483,827 | $ | 55,300 | ||||||||||||
Residential mortgage-backed securities | — | — | 369 | 10 | 369 | 10 | ||||||||||||||||||
Asset-backed securities | 5,858 | 731 | 14,707 | 2,360 | 20,565 | 3,091 | ||||||||||||||||||
Commercial mortgage-backed securities | — | — | — | — | — | — | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 6,194 | 22 | 42,501 | 1,797 | 48,695 | 1,819 | ||||||||||||||||||
Total below investment grade securities | 327,014 | 9,885 | 226,442 | 50,335 | 553,456 | 60,220 | ||||||||||||||||||
Total fixed maturity securities | $ | 1,853,612 | $ | 29,088 | $ | 1,303,016 | $ | 101,195 | $ | 3,156,628 | $ | 130,283 | ||||||||||||
Equity securities: | ||||||||||||||||||||||||
Non-redeemable preferred stock | $ | 3,413 | $ | 96 | $ | 23,786 | $ | 6,508 | $ | 27,199 | $ | 6,604 | ||||||||||||
Other equity securities | 96,635 | 210 | 6,806 | 246 | 103,441 | 456 | ||||||||||||||||||
Total equity securities | $ | 100,048 | $ | 306 | $ | 30,592 | $ | 6,754 | $ | 130,640 | $ | 7,060 | ||||||||||||
As of December 31, 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 | $ | 6,388,148 | $ | 323,961 | $ | 294,755 | $ | 40,861 | $ | 6,682,903 | $ | 364,822 | ||||||||||||
Canadian and Canadian provincial governments | 122,746 | 2,532 | — | — | 122,746 | 2,532 | ||||||||||||||||||
Residential mortgage-backed securities | 452,297 | 7,036 | 82,314 | 4,057 | 534,611 | 11,093 | ||||||||||||||||||
Asset-backed securities | 581,701 | 9,825 | 199,298 | 7,100 | 780,999 | 16,925 | ||||||||||||||||||
Commercial mortgage-backed securities | 514,877 | 9,806 | 31,177 | 997 | 546,054 | 10,803 | ||||||||||||||||||
U.S. government and agencies | 1,010,387 | 57,718 | — | — | 1,010,387 | 57,718 | ||||||||||||||||||
State and political subdivisions | 157,837 | 5,349 | 13,016 | 3,718 | 170,853 | 9,067 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 702,962 | 18,279 | 38,379 | 4,206 | 741,341 | 22,485 | ||||||||||||||||||
Total investment grade securities | $ | 9,930,955 | $ | 434,506 | $ | 658,939 | $ | 60,939 | $ | 10,589,894 | $ | 495,445 | ||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 554,688 | $ | 71,171 | $ | 114,427 | $ | 31,076 | $ | 669,115 | $ | 102,247 | ||||||||||||
Residential mortgage-backed securities | 22,646 | 282 | 7,679 | 298 | 30,325 | 580 | ||||||||||||||||||
Asset-backed securities | 6,772 | 201 | 9,335 | 1,250 | 16,107 | 1,451 | ||||||||||||||||||
Commercial mortgage-backed securities | 3,253 | 248 | 767 | 117 | 4,020 | 365 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 60,668 | 7,356 | 31,693 | 11,803 | 92,361 | 19,159 | ||||||||||||||||||
Total below investment grade securities | 648,027 | 79,258 | 163,901 | 44,544 | 811,928 | 123,802 | ||||||||||||||||||
Total fixed maturity securities | $ | 10,578,982 | $ | 513,764 | $ | 822,840 | $ | 105,483 | $ | 11,401,822 | $ | 619,247 | ||||||||||||
Equity securities: | ||||||||||||||||||||||||
Non-redeemable preferred stock | $ | 12,331 | $ | 2,175 | $ | 12,191 | $ | 3,787 | $ | 24,522 | $ | 5,962 | ||||||||||||
Other equity securities | 38,327 | 2,242 | — | — | 38,327 | 2,242 | ||||||||||||||||||
Total equity securities | $ | 50,658 | $ | 4,417 | $ | 12,191 | $ | 3,787 | $ | 62,849 | $ | 8,204 | ||||||||||||
| Page 35 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Consolidated Investment Related Gains and Losses | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | Change | |||||||||||||||||||||||||||||||
Fixed maturity and equity securities: | ||||||||||||||||||||||||||||||||||||||
Other-than-temporary impairment losses on fixed maturities | $ | — | $ | (846 | ) | $ | (33,817 | ) | $ | (27,605 | ) | $ | (23,111 | ) | $ | 23,111 | $ | (34,663 | ) | $ | (29,775 | ) | $ | (4,888 | ) | |||||||||||||
Gain on investment activity | 46,346 | 53,615 | 27,192 | 20,077 | 13,792 | 32,554 | 127,153 | 53,002 | 74,151 | |||||||||||||||||||||||||||||
Loss on investment activity | (9,054 | ) | (22,556 | ) | (11,787 | ) | (21,636 | ) | (22,186 | ) | 13,132 | (43,397 | ) | (50,257 | ) | 6,860 | ||||||||||||||||||||||
Net gain (loss) on fixed maturity and equity securities | 37,292 | 30,213 | (18,412 | ) | (29,164 | ) | (31,505 | ) | 68,797 | 49,093 | (27,030 | ) | 76,123 | |||||||||||||||||||||||||
Other impairment losses and change in mortgage loan provision | (262 | ) | 211 | (2,060 | ) | (2,292 | ) | (636 | ) | 374 | (2,111 | ) | (4,661 | ) | 2,550 | |||||||||||||||||||||||
Other non-derivative gain (loss), net | 4,754 | 5,123 | 4,057 | 11,824 | (2,006 | ) | 6,760 | 13,934 | 16,345 | (2,411 | ) | |||||||||||||||||||||||||||
Free-standing derivatives: | ||||||||||||||||||||||||||||||||||||||
Credit default swaps | 6,672 | 3,518 | 3,346 | 1,253 | (8,407 | ) | 15,079 | 13,536 | (5,936 | ) | 19,472 | |||||||||||||||||||||||||||
Interest rate swaps - non-hedged | 4,122 | 41,500 | 62,527 | (9,271 | ) | 42,014 | (37,892 | ) | 108,149 | 29,629 | 78,520 | |||||||||||||||||||||||||||
Interest rate swaps - hedged | — | — | — | — | — | — | — | 7 | (7 | ) | ||||||||||||||||||||||||||||
Foreign currency swaps - hedged (1) | 1,606 | (2,395 | ) | (4,562 | ) | 2,983 | (2,135 | ) | 3,741 | (5,351 | ) | (2,135 | ) | (3,216 | ) | |||||||||||||||||||||||
Futures | (11,677 | ) | (7,557 | ) | (11,051 | ) | (6,822 | ) | 16,655 | (28,332 | ) | (30,285 | ) | 7,141 | (37,426 | ) | ||||||||||||||||||||||
CPI swaps | 76 | (520 | ) | (180 | ) | (55 | ) | (250 | ) | 326 | (624 | ) | (153 | ) | (471 | ) | ||||||||||||||||||||||
Equity options | (13,648 | ) | (3,225 | ) | (2,703 | ) | (21,376 | ) | 15,149 | (28,797 | ) | (19,576 | ) | 4,477 | (24,053 | ) | ||||||||||||||||||||||
Currency forwards | 507 | 3,577 | 2,500 | (214 | ) | 707 | (200 | ) | 6,584 | (946 | ) | 7,530 | ||||||||||||||||||||||||||
Bond forwards | 116 | (1,010 | ) | 841 | (911 | ) | 610 | (494 | ) | (53 | ) | 1,265 | (1,318 | ) | ||||||||||||||||||||||||
Interest rate options | — | — | — | — | — | — | — | 3,276 | (3,276 | ) | ||||||||||||||||||||||||||||
Total free-standing derivatives | (12,226 | ) | 33,888 | 50,718 | (34,413 | ) | 64,343 | (76,569 | ) | 72,380 | 36,625 | 35,755 | ||||||||||||||||||||||||||
Embedded derivatives: | ||||||||||||||||||||||||||||||||||||||
Modified coinsurance and funds withheld treaties | 49,078 | 76,966 | (92,249 | ) | (27,201 | ) | (46,169 | ) | 95,247 | 33,795 | (71,592 | ) | 105,387 | |||||||||||||||||||||||||
GMXB | 7,988 | (28,137 | ) | (62,940 | ) | 36,437 | (95,373 | ) | 103,361 | (83,089 | ) | (69,628 | ) | (13,461 | ) | |||||||||||||||||||||||
Total embedded derivatives | 57,066 | 48,829 | (155,189 | ) | 9,236 | (141,542 | ) | 198,608 | (49,294 | ) | (141,220 | ) | 91,926 | |||||||||||||||||||||||||
Net gain (loss) on total derivatives | 44,840 | 82,717 | (104,471 | ) | (25,177 | ) | (77,199 | ) | 122,039 | 23,086 | (104,595 | ) | 127,681 | |||||||||||||||||||||||||
Total investment related gains (losses), net | $ | 86,624 | $ | 118,264 | $ | (120,886 | ) | $ | (44,809 | ) | $ | (111,346 | ) | $ | 197,970 | $ | 84,002 | $ | (119,941 | ) | $ | 203,943 | ||||||||||||||||
(1) The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net gains (losses) on total derivatives. | ||||||||||||||||||||||||||||||||||||||
| Page 36 | |
Appendix | ||||
Reconciliations of GAAP Income Statements to Operating Income Statements | ||||
| Page 37 | |
Reinsurance Group of America, Incorporated Reconciliation of GAAP Income Statements to Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
U.S. & Latin America Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 77,081 | $ | 111,430 | $ | 51,098 | $ | 79,483 | $ | 55,652 | $ | 21,429 | $ | 239,609 | $ | 156,288 | $ | 83,321 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (69 | ) | 1 | 65 | 203 | (1 | ) | (68 | ) | (3 | ) | (2 | ) | (1 | ) | |||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | 3,463 | 881 | 2,035 | (696 | ) | (925 | ) | 4,388 | 6,379 | (1,811 | ) | 8,190 | ||||||||||||||||||||||||||
Operating income before income taxes | $ | 80,475 | $ | 112,312 | $ | 53,198 | $ | 78,990 | $ | 54,726 | $ | 25,749 | $ | 245,985 | $ | 154,475 | $ | 91,510 | ||||||||||||||||||||
U.S. & Latin America Asset Intensive | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 88,732 | $ | 93,979 | $ | (30,830 | ) | $ | 30,874 | $ | 24,182 | $ | 64,550 | $ | 151,881 | $ | 122,072 | $ | 29,809 | |||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | 867 | (27,119 | ) | (24,603 | ) | 39,757 | (73,476 | ) | 74,343 | (50,855 | ) | (55,766 | ) | 4,911 | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (52,541 | ) | (77,847 | ) | 90,214 | 27,897 | 47,094 | (99,635 | ) | (40,174 | ) | 73,403 | (113,577 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | 95,373 | (103,361 | ) | 83,089 | 69,628 | 13,461 | ||||||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (2,295 | ) | (10,304 | ) | (4,624 | ) | 59 | (1,003 | ) | (1,292 | ) | (17,223 | ) | (10,118 | ) | (7,105 | ) | |||||||||||||||||||||
EIA embedded derivatives - interest credited | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (10,995 | ) | 11,037 | 11,827 | (11,170 | ) | 22,997 | |||||||||||||||||||||||||
DAC offset, net | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | (25,945 | ) | 57,821 | 19,739 | (36,083 | ) | 55,822 | |||||||||||||||||||||||||
Operating income before income taxes | $ | 58,693 | $ | 54,323 | $ | 45,268 | $ | 47,596 | $ | 55,230 | $ | 3,463 | $ | 158,284 | $ | 151,966 | $ | 6,318 | ||||||||||||||||||||
U.S. & Latin America Financial Reinsurance | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | 12,073 | $ | 1,909 | $ | 44,791 | $ | 39,081 | $ | 5,710 | ||||||||||||||||||||
Operating income before income taxes | $ | 13,982 | $ | 14,875 | $ | 15,934 | $ | 15,936 | $ | 12,073 | $ | 1,909 | $ | 44,791 | $ | 39,081 | $ | 5,710 | ||||||||||||||||||||
Total U.S. & Latin America | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 179,795 | $ | 220,284 | $ | 36,202 | $ | 126,293 | $ | 91,907 | $ | 87,888 | $ | 436,281 | $ | 317,441 | $ | 118,840 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | 798 | (27,118 | ) | (24,538 | ) | 39,960 | (73,477 | ) | 74,275 | (50,858 | ) | (55,768 | ) | 4,910 | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (49,078 | ) | (76,966 | ) | 92,249 | 27,201 | 46,169 | (95,247 | ) | (33,795 | ) | 71,592 | (105,387 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | 95,373 | (103,361 | ) | 83,089 | 69,628 | 13,461 | ||||||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (2,295 | ) | (10,304 | ) | (4,624 | ) | 59 | (1,003 | ) | (1,292 | ) | (17,223 | ) | (10,118 | ) | (7,105 | ) | |||||||||||||||||||||
EIA embedded derivatives - interest credited | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (10,995 | ) | 11,037 | 11,827 | (11,170 | ) | 22,997 | |||||||||||||||||||||||||
DAC offset, net | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | (25,945 | ) | 57,821 | 19,739 | (36,083 | ) | 55,822 | |||||||||||||||||||||||||
Operating income before income taxes | $ | 153,150 | $ | 181,510 | $ | 114,400 | $ | 142,522 | $ | 122,029 | $ | 31,121 | $ | 449,060 | $ | 345,522 | $ | 103,538 | ||||||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 38 | |
Reinsurance Group of America, Incorporated Reconciliation of GAAP Income Statements to Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 34,275 | $ | 43,309 | $ | 20,095 | $ | 44,640 | $ | 34,072 | $ | 203 | $ | 97,679 | $ | 79,535 | $ | 18,144 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (2,624 | ) | (1,049 | ) | (372 | ) | 259 | 4,930 | (7,554 | ) | (4,045 | ) | 5,688 | (9,733 | ) | |||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (1,027 | ) | (1,353 | ) | (359 | ) | 187 | (1,209 | ) | 182 | (2,739 | ) | (6,498 | ) | 3,759 | |||||||||||||||||||||||
Operating income before income taxes | $ | 30,624 | $ | 40,907 | $ | 19,364 | $ | 45,086 | $ | 37,793 | $ | (7,169 | ) | $ | 90,895 | $ | 78,725 | $ | 12,170 | |||||||||||||||||||
Canada Non-Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 3,257 | $ | (2,097 | ) | $ | 3,880 | $ | 10,482 | $ | (6,602 | ) | ||||||||||||||||||
Operating income before income taxes | $ | 1,160 | $ | 2,128 | $ | 592 | $ | 3,420 | $ | 3,257 | $ | (2,097 | ) | $ | 3,880 | $ | 10,482 | $ | (6,602 | ) | ||||||||||||||||||
Europe, Middle East and Africa Traditional | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 8,515 | $ | 6,834 | $ | (1,116 | ) | $ | 12,859 | $ | 15,910 | $ | (7,395 | ) | $ | 14,233 | $ | 35,551 | $ | (21,318 | ) | |||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | — | — | (5 | ) | — | (289 | ) | 289 | (5 | ) | (338 | ) | 333 | |||||||||||||||||||||||||
Operating income (loss) before income taxes | $ | 8,515 | $ | 6,834 | $ | (1,121 | ) | $ | 12,859 | $ | 15,621 | $ | (7,106 | ) | $ | 14,228 | $ | 35,213 | $ | (20,985 | ) | |||||||||||||||||
Europe, Middle East and Africa Non-Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 43,786 | $ | 27,469 | $ | 25,424 | $ | 28,145 | $ | 29,234 | $ | 14,552 | $ | 96,679 | $ | 80,300 | $ | 16,379 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (8,159 | ) | (1,468 | ) | 1,004 | (9,261 | ) | (8 | ) | (8,151 | ) | (8,623 | ) | (909 | ) | (7,714 | ) | |||||||||||||||||||||
Investment income on unit-linked variable annuities | (5,540 | ) | (2,966 | ) | (408 | ) | — | — | (5,540 | ) | (8,914 | ) | — | (8,914 | ) | |||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 5,540 | 2,966 | 408 | — | — | 5,540 | 8,914 | — | 8,914 | |||||||||||||||||||||||||||||
Non-investment derivatives | (1,682 | ) | 127 | (817 | ) | (105 | ) | (388 | ) | (1,294 | ) | (2,372 | ) | (84 | ) | (2,288 | ) | |||||||||||||||||||||
Operating income before income taxes | $ | 33,945 | $ | 26,128 | $ | 25,611 | $ | 18,779 | $ | 28,838 | $ | 5,107 | $ | 85,684 | $ | 79,307 | $ | 6,377 | ||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 19,822 | $ | 34,482 | $ | 41,160 | $ | 37,415 | $ | 11,276 | $ | 8,546 | $ | 95,464 | $ | 68,239 | $ | 27,225 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | — | — | (16 | ) | (1,706 | ) | 1,706 | (1,706 | ) | (16 | ) | 1,706 | (1,722 | ) | ||||||||||||||||||||||||
Operating income before income taxes | $ | 19,822 | $ | 34,482 | $ | 41,144 | $ | 35,709 | $ | 12,982 | $ | 6,840 | $ | 95,448 | $ | 69,945 | $ | 25,503 | ||||||||||||||||||||
Asia Pacific Non-Traditional | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 7,549 | $ | (73 | ) | $ | 8,553 | $ | 5,467 | $ | 5,412 | $ | 2,137 | $ | 16,029 | $ | 14,152 | $ | 1,877 | |||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (5,283 | ) | (5,925 | ) | (1,111 | ) | (17 | ) | 881 | (6,164 | ) | (12,319 | ) | 2,916 | (15,235 | ) | ||||||||||||||||||||||
Operating income (loss) before income taxes | $ | 2,266 | $ | (5,998 | ) | $ | 7,442 | $ | 5,450 | $ | 6,293 | $ | (4,027 | ) | $ | 3,710 | $ | 17,068 | $ | (13,358 | ) | |||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 39 | |
Reinsurance Group of America, Incorporated Reconciliation of GAAP Income Statements to Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | vs. PY | Sept. 30, | Sept. 30, | |||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | Quarter | 2016 | 2015 | Change | ||||||||||||||||||||||||||||||
Corporate and Other Segment | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (7,302 | ) | $ | 18,790 | $ | (23,330 | ) | $ | (51,496 | ) | $ | (50,931 | ) | $ | 43,629 | $ | (11,842 | ) | $ | (67,648 | ) | $ | 55,806 | ||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (11,690 | ) | (31,540 | ) | (6,930 | ) | 34,799 | 31,229 | (42,919 | ) | (50,160 | ) | 32,257 | (82,417 | ) | |||||||||||||||||||||||
Non-investment derivatives | (23 | ) | (17 | ) | (14 | ) | (15 | ) | 5 | (28 | ) | (54 | ) | 86 | (140 | ) | ||||||||||||||||||||||
Operating income (loss) before income taxes | $ | (19,015 | ) | $ | (12,767 | ) | $ | (30,274 | ) | $ | (16,712 | ) | $ | (19,697 | ) | $ | 682 | $ | (62,056 | ) | $ | (35,305 | ) | $ | (26,751 | ) | ||||||||||||
Consolidated | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 287,600 | $ | 353,223 | $ | 107,580 | $ | 206,743 | $ | 140,137 | $ | 147,463 | $ | 748,403 | $ | 538,052 | $ | 210,351 | ||||||||||||||||||||
Investment and derivative gains (losses) - non-operating (1) | (26,958 | ) | (67,100 | ) | (31,968 | ) | 64,034 | (35,028 | ) | 8,070 | (126,026 | ) | (14,448 | ) | (111,578 | ) | ||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (49,078 | ) | (76,966 | ) | 92,249 | 27,201 | 46,169 | (95,247 | ) | (33,795 | ) | 71,592 | (105,387 | ) | ||||||||||||||||||||||||
GMXB embedded derivatives (1) | (7,988 | ) | 28,137 | 62,940 | (36,437 | ) | 95,373 | (103,361 | ) | 83,089 | 69,628 | 13,461 | ||||||||||||||||||||||||||
Funds withheld gains (losses) - investment income | (3,322 | ) | (11,657 | ) | (4,983 | ) | 246 | (2,212 | ) | (1,110 | ) | (19,962 | ) | (16,616 | ) | (3,346 | ) | |||||||||||||||||||||
EIA embedded derivatives - interest credited | 42 | (17,364 | ) | 29,149 | (1,412 | ) | (10,995 | ) | 11,037 | 11,827 | (11,170 | ) | 22,997 | |||||||||||||||||||||||||
DAC offset, net | 31,876 | 64,841 | (76,978 | ) | (13,142 | ) | (25,945 | ) | 57,821 | 19,739 | (36,083 | ) | 55,822 | |||||||||||||||||||||||||
Investment income on unit-linked variable annuities | (5,540 | ) | (2,966 | ) | (408 | ) | — | — | (5,540 | ) | (8,914 | ) | — | (8,914 | ) | |||||||||||||||||||||||
Interest credited on unit-linked variable annuities | 5,540 | 2,966 | 408 | — | — | 5,540 | 8,914 | — | 8,914 | |||||||||||||||||||||||||||||
Non-investment derivatives | (1,705 | ) | 110 | (831 | ) | (120 | ) | (383 | ) | (1,322 | ) | (2,426 | ) | 2 | (2,428 | ) | ||||||||||||||||||||||
Operating income before income taxes | $ | 230,467 | $ | 273,224 | $ | 177,158 | $ | 247,113 | $ | 207,116 | $ | 23,351 | $ | 680,849 | $ | 600,957 | $ | 79,892 | ||||||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 40 | |