UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 27, 2017
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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
r | Emerging growth company |
r | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 2.02 | Results of Operations and Financial Condition. |
On July 27, 2017, Reinsurance Group of America, Incorporated issued (1) a press release (the "Press Release") announcing its earnings for the three-month period ended June 30, 2017, 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 June 30, 2017, a copy of which is attached hereto as Exhibit 99.2. The Press Release also notes that a conference call will be held on July 28, 2017 to discuss the financial and operating results for the three-month period ended June 30, 2017. 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 July 27, 2017 | |
99.2 | Quarterly Financial Supplement for the quarter ended June 30, 2017 | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
REINSURANCE GROUP OF AMERICA, INCORPORATED | ||||||
Date: July 27, 2017 | 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 July 27, 2017 | |
99.2 | Quarterly Financial Supplement for the quarter ended June 30, 2017 | |
Exhibit 99.1
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS SECOND-QUARTER RESULTS
• | Earnings per diluted share: $3.54 from net income, $2.95 from adjusted operating income* |
• | ROE 10 percent and adjusted operating ROE* 11 percent for the trailing twelve months |
• | Reported net premiums increased 6 percent in the second quarter |
• | Quarterly shareholder dividend raised 22 percent to $0.50 per quarter |
ST. LOUIS, July 27, 2017 - Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported second-quarter net income of $232.2 million, or $3.54 per diluted share, compared with $236.1 million, or $3.64 per diluted share, in the prior-year quarter. Adjusted operating income* totaled $193.7 million, or $2.95 per diluted share, compared with $181.2 million, or $2.80 per diluted share, the year before. Net foreign currency fluctuations had an adverse effect of $0.06 per diluted share on net income and on adjusted operating income. The resolution of uncertain tax positions added $0.10 per share in the quarter and $0.12 per share in the year-earlier quarter. Book value per share at June 30 was $123.60 including AOCI, and $97.68 excluding AOCI*.
Quarterly Results | Year-to-Date Results | |||||||||||||||
($ in thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net premiums | $ | 2,480,451 | $ | 2,346,945 | $ | 4,846,147 | $ | 4,503,950 | ||||||||
Net income | 232,190 | 236,103 | 377,702 | 312,575 | ||||||||||||
Net income per diluted share | 3.54 | 3.64 | 5.76 | 4.81 | ||||||||||||
Adjusted operating income* | 193,674 | 181,228 | 315,739 | 301,978 | ||||||||||||
Adjusted operating income per diluted share* | 2.95 | 2.80 | 4.81 | 4.65 | ||||||||||||
Book value per share | 123.60 | 118.32 | ||||||||||||||
Book value per share, excluding accumulated other comprehensive income (AOCI)* | 97.68 | 87.33 | ||||||||||||||
Total assets | 58,138,072 | 53,876,703 | ||||||||||||||
* | See ‘Use of Non-GAAP Financial Measures’ below |
Consolidated net premiums totaled $2.5 billion, up 6 percent from last year’s second quarter, with net adverse foreign currency effects of approximately $30.5 million. Excluding spread-based businesses and the value of associated derivatives, investment income rose 6 percent over year-ago levels, reflecting an 8 percent increase in average invested assets, offset in part by the impact of lower yields on new money and reinvested assets. The level of variable investment income was above average in this quarter and in the year-ago period. The average investment yield, excluding spread businesses, was down 11 basis points to 4.60 percent from the second quarter of 2016, reflecting the impact of lower yields on new money and reinvested assets. The average investment yield was 19 basis points higher than the first-quarter yield due primarily to a higher level of variable investment income.
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The effective tax rate was approximately 32 percent on pre-tax GAAP income and 31 percent on pre-tax adjusted operating income for the second quarter, below an expected range of 34 to 35 percent. The lower-than-expected income tax rate was primarily due to income earned in jurisdictions that have lower income tax rates than the U.S. statutory rate. Additionally, the $0.10 per diluted share tax item noted above was due to the reversal of interest expense as a result of the release of liabilities established for uncertain tax positions.
Anna Manning, president and chief executive officer, commented, “We are very pleased with the quarter as the bottom-line number was very strong, all key segments performed well, and we deployed a significant amount of capital both into block transactions and organic business growth. Further, in recognition of the strong, ongoing financial results, the board increased the common stock dividend by 22 percent, marking the seventh straight year of double-digit percentage increases.
“Highlights of the quarter included solid overall top-line growth, favorable U.S. individual mortality claims, and ongoing strength in our EMEA and Asia Pacific segments. Australia was profitable, and Asia was particularly strong.
“We ended the quarter with an excess capital position of approximately $1.0 billion, and thus we remain positioned to continue pursuing a balanced approach to capital management by deploying capital into in-force and other attractive transactions, share repurchases, and shareholder dividends.
“In summary, this was an excellent quarter, providing further evidence that we are successfully executing our strategy. Looking forward, we are well positioned in our markets, we have a proven approach, and we are optimistic about our ability to deliver attractive financial returns.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
The U.S. and Latin America Traditional segment reported pre-tax net income of $90.6 million, compared with $111.4 million in the second quarter of 2016. Pre-tax adjusted operating income totaled $91.2 million for the quarter, compared with a strong $112.3 million in last year’s second quarter. Results for the current quarter reflected favorable individual mortality experience, offset by unfavorable group experience. In the year-ago period, mortality experience was in line with expectations.
Traditional net premiums increased 2 percent from last year’s second quarter to $1,335.3 million.
Financial Solutions
The Asset-Intensive business reported pre-tax net income of $87.0 million compared with $94.0 million last year. Second-quarter pre-tax adjusted operating income totaled $49.9 million compared with $54.3 million last year, attributable to ongoing favorable investment spreads, offset somewhat by unfavorable experience on payout annuities.
The Financial Reinsurance business reported pre-tax net income and pre-tax adjusted operating income of $20.0 million, up from $14.9 million the year before due to strong new business activity in 2017.
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Canada
Traditional
The Canada Traditional segment reported pre-tax net income of $32.8 million, compared with $43.3 million the year before. Pre-tax adjusted operating income totaled $31.2 million, compared with $40.9 million in the second quarter of 2016. Mortality experience in the current quarter was in line with expectations while the year-ago quarter benefited from favorable mortality experience. Foreign currency exchange rates had an adverse effect of $1.3 million on pre-tax net income and $1.2 million on pre-tax adjusted operating income for the quarter.
Reported net premiums totaled $221.4 million for the quarter, down from $240.1 million in the year-ago period due to an expected reduction in creditor business. Net foreign currency fluctuations had an adverse effect of $9.5 million on net premiums for the quarter.
Financial Solutions
The Canada Financial Solutions business segment, which consists of longevity and fee-based transactions, reported second-quarter pre-tax net income and pre-tax adjusted operating income of $4.4 million, compared with $2.1 million a year ago, reflecting favorable longevity experience in the current-year quarter. Net foreign currency fluctuations adversely affected pre-tax net income and pre-tax adjusted operating income by $0.2 million.
Europe, Middle East and Africa (EMEA)
Traditional
The EMEA Traditional segment reported pre-tax net income and pre-tax adjusted operating income of $11.4 million, compared with $6.8 million in last year’s second quarter. The current-period results were in line with expectations, while unfavorable claims experience, most notably in the U.K., adversely affected the year-ago performance. Net foreign currency fluctuations adversely affected pre-tax net income and pre-tax adjusted operating income by $0.5 million.
Reported net premiums increased 15 percent from the prior-year period to $330.9 million, due to the impact of new treaties and growth on current treaties. Foreign currency exchange rates adversely affected net premiums by $17.2 million.
Financial Solutions
The EMEA Financial Solutions business segment includes longevity, asset-intensive, and fee-based transactions. Pre-tax net income totaled $28.9 million, compared with $27.5 million in the year-ago period. Pre-tax adjusted operating income was up slightly to $26.5 million, from $26.1 million the year before. Both periods reflected favorable longevity experience. Net foreign currency fluctuations adversely affected pre-tax net income by $3.3 million and pre-tax adjusted operating income by $3.0 million.
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Asia Pacific
Traditional
The Asia Pacific Traditional segment reported pre-tax net income and pre-tax adjusted operating income of $53.3 million, compared with $34.5 million in the prior-year period. Results for the current-year period were collectively strong across Asia due to the strong premium growth and favorable claims experience, including profitable results in Australia. Net foreign currency fluctuations had an adverse effect of $0.3 million on pre-tax net income and pre-tax adjusted operating income.
Reported net premiums rose 18 percent to $537.4 million, with strong growth across Asia, primarily from new and existing treaties in Hong Kong and Japan, offset by a reduction in premiums in Australia. Foreign currency exchange rates had a favorable effect of $1.3 million on net premiums.
Financial Solutions
The Asia Pacific Financial Solutions business segment includes asset-intensive and fee-based transactions. Pre-tax net income totaled $5.4 million, compared with pre-tax net losses totaling $0.1 million in the prior-year period. Pre-tax adjusted operating income totaled $2.6 million, compared with pre-tax operating losses of $6.0 million in the prior-year quarter. The improvement in pre-tax net income and pre-tax adjusted operating income was primarily attributable to improved performance on a treaty that is in runoff. Net foreign currency fluctuations had an adverse effect of $0.1 million on pre-tax net income and pre-tax adjusted operating income.
Corporate and Other
The Corporate and Other segment’s pre-tax net income totaled $5.5 million, compared with $18.8 million the year before. Pre-tax adjusted operating losses were $9.5 million, versus year-ago pre-tax adjusted operating losses of $12.8 million. The quarter's results benefited from the release of liabilities established for uncertain tax positions. As a result of that release, accrued interest expense of approximately $10.0 million pre-tax was reversed. The year-ago period results also benefited from a release of liabilities associated with uncertain tax positions, with a reversal in accrued interest expense of approximately $15.4 million pre-tax. Additionally, general expenses were lower than a year-ago due to reduced incentive compensation costs and other general expenses.
Dividend Declaration
The board of directors increased the quarterly dividend 22 percent, to $0.50 from $0.41, payable August 29 to shareholders of record as of August 8.
Earnings Conference Call
A conference call to discuss second-quarter results will begin at 11 a.m. Eastern Time on Friday, July 28. Interested parties may access the call by dialing 877-681-3372 (domestic) or 719-325-4820 (international). The access code is 538233. 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 Saturday, August 5, at 888-203-1112 (domestic) or 719-457-0820 (international), access code 538233. - more -
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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 adjusted operating income as a basis for analyzing financial results. Beginning with the announcement of first-quarter 2017 results, the Company is labeling its non-GAAP measure “operating income” to “adjusted operating income.” This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs. Management believes that adjusted 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, adjusted 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 adjusted operating income can vary by company and is not considered a substitute for GAAP net income.
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.
Adjusted operating income per diluted share is a non-GAAP financial measure calculated as adjusted operating income divided by weighted average diluted shares outstanding. Adjusted operating return on equity is a non-GAAP financial measure calculated as adjusted operating income divided by average shareholders’ equity excluding AOCI. Similar to adjusted operating income, management believes these non-GAAP financial measures better reflect the ongoing profitability and underlying trends of the Company’s continuing operations, they also serve as a basis for establishing target levels and awards under RGA’s management incentive programs.
Reconciliations from GAAP net income, book value per share, net income per diluted share and average stockholders’ equity 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 “Earnings” section.
About RGA
Reinsurance Group of America, Incorporated (RGA), a Fortune 500 company, is among the leading global providers of life reinsurance and financial solutions, with approximately $3.2 trillion of life reinsurance in force and assets of $58.1 billion as of June 30, 2017. Founded in 1973, RGA today is recognized for its deep technical expertise in risk and capital management, innovative solutions, and commitment to serving its clients. With headquarters in St. Louis, Missouri, and operations in 26 countries, RGA delivers expert
solutions in individual life reinsurance, individual living benefits reinsurance, group reinsurance, health
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reinsurance, facultative underwriting, product development, and financial solutions. To learn more about RGA and its businesses, visit the company’s website at www.rgare.com.
Cautionary Note 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
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
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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 2016 Annual Report.
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 Adjusted Operating Income
(Dollars in thousands, except per share data)
(Unaudited) | Three Months Ended June 30, | ||||||||||||||
2017 | 2016 | ||||||||||||||
Diluted Earnings Per Share | Diluted Earnings Per Share | ||||||||||||||
Net income | $ | 232,190 | $ | 3.54 | $ | 236,103 | $ | 3.64 | |||||||
Reconciliation to adjusted operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (25,420 | ) | (0.40 | ) | (46,490 | ) | (0.71 | ) | |||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (2,771 | ) | (0.04 | ) | (7,577 | ) | (0.12 | ) | |||||||
Embedded derivatives: | |||||||||||||||
Included in investment related gains/losses, net | (10,054 | ) | (0.15 | ) | (31,739 | ) | (0.49 | ) | |||||||
Included in interest credited | (4,771 | ) | (0.07 | ) | (11,287 | ) | (0.17 | ) | |||||||
DAC offset, net | 4,462 | 0.07 | 42,147 | 0.65 | |||||||||||
Investment (income) loss on unit-linked variable annuities | 189 | — | (1,928 | ) | (0.03 | ) | |||||||||
Interest credited on unit-linked variable annuities | (189 | ) | — | 1,928 | 0.03 | ||||||||||
Non-investment derivatives | 38 | — | 71 | — | |||||||||||
Adjusted operating income | $ | 193,674 | $ | 2.95 | $ | 181,228 | $ | 2.80 | |||||||
(Unaudited) | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | ||||||||||||||
Diluted Earnings Per Share | Diluted Earnings Per Share | ||||||||||||||
Income before income taxes | $ | 377,702 | $ | 5.76 | $ | 312,575 | $ | 4.81 | |||||||
Reconciliation to pre-tax adjusted operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (5,167 | ) | (0.08 | ) | (68,217 | ) | (1.04 | ) | |||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (3,196 | ) | (0.05 | ) | (10,816 | ) | (0.17 | ) | |||||||
Embedded derivatives: | |||||||||||||||
Included in investment related gains/losses, net | (69,246 | ) | (1.06 | ) | 69,134 | 1.06 | |||||||||
Included in interest credited | (22,944 | ) | (0.35 | ) | 7,660 | 0.12 | |||||||||
DAC offset, net | 38,483 | 0.59 | (7,889 | ) | (0.12 | ) | |||||||||
Investment (income) loss on unit-linked variable annuities | (2,484 | ) | (0.04 | ) | (2,193 | ) | (0.03 | ) | |||||||
Interest credited on unit-linked variable annuities | 2,484 | 0.04 | 2,193 | 0.03 | |||||||||||
Non-investment derivatives | 107 | — | (469 | ) | (0.01 | ) | |||||||||
Pre-tax adjusted operating income | $ | 315,739 | $ | 4.81 | $ | 301,978 | $ | 4.65 | |||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated Effective Income Tax Rates
(Dollars in thousands)
(Unaudited) | Three Months Ended June 30, 2017 | |||||||||
Pre-tax Income | Income Taxes | Effective Tax Rate | ||||||||
GAAP income | $ | 339,315 | $ | 107,125 | 31.6 | % | ||||
Reconciliation to adjusted operating income: | ||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (38,098 | ) | (12,679 | ) | ||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (4,263 | ) | (1,492 | ) | ||||||
Embedded derivatives: | ||||||||||
Included in investment related gains/losses, net | (15,468 | ) | (5,414 | ) | ||||||
Included in interest credited | (7,340 | ) | (2,569 | ) | ||||||
DAC offset, net | 6,865 | 2,403 | ||||||||
Investment (income) loss on unit-linked variable annuities | 291 | 102 | ||||||||
Interest credited on unit-linked variable annuities | (291 | ) | (102 | ) | ||||||
Non-investment derivatives | 58 | 20 | ||||||||
Adjusted operating income | $ | 281,069 | $ | 87,394 | 31.1 | % | ||||
Reconciliation of Consolidated Income before Income Taxes to Pre-tax Adjusted Operating Income
(Dollars in thousands)
(Unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income before income taxes | $ | 339,315 | $ | 353,223 | $ | 547,159 | $ | 460,803 | |||||||
Reconciliation to pre-tax adjusted operating income: | |||||||||||||||
Capital (gains) losses, derivatives and other, included in investment related gains/losses, net | (38,098 | ) | (67,100 | ) | (4,826 | ) | (99,068 | ) | |||||||
Capital (gains) losses on funds withheld, included in investment income, net of related expenses | (4,263 | ) | (11,657 | ) | (4,917 | ) | (16,640 | ) | |||||||
Embedded derivatives: | |||||||||||||||
Included in investment related gains/losses, net | (15,468 | ) | (48,829 | ) | (106,533 | ) | 106,360 | ||||||||
Included in interest credited | (7,340 | ) | (17,364 | ) | (35,298 | ) | 11,785 | ||||||||
DAC offset, net | 6,865 | 64,841 | 59,205 | (12,137 | ) | ||||||||||
Investment (income) loss on unit-linked variable annuities | 291 | (2,966 | ) | (3,822 | ) | (3,374 | ) | ||||||||
Interest credited on unit-linked variable annuities | (291 | ) | 2,966 | 3,822 | 3,374 | ||||||||||
Non-investment derivatives | 58 | 110 | 164 | (721 | ) | ||||||||||
Pre-tax adjusted operating income | $ | 281,069 | $ | 273,224 | $ | 454,954 | $ | 450,382 | |||||||
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income to Pre-tax Adjusted Operating Income
(Dollars in thousands)
(Unaudited) | Three Months Ended June 30, 2017 | ||||||||||||||
Pre-tax net income | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 90,594 | $ | (1 | ) | $ | 654 | $ | 91,247 | ||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 87,002 | (24,642 | ) | (1) | (12,469 | ) | (2) | 49,891 | |||||||
Financial Reinsurance | 19,983 | — | — | 19,983 | |||||||||||
Total U.S. and Latin America | 197,579 | (24,643 | ) | (11,815 | ) | 161,121 | |||||||||
Canada Traditional | 32,836 | (1,648 | ) | — | 31,188 | ||||||||||
Canada Financial Solutions | 4,425 | — | — | 4,425 | |||||||||||
Total Canada | 37,261 | (1,648 | ) | — | 35,613 | ||||||||||
EMEA Traditional | 11,354 | — | — | 11,354 | |||||||||||
EMEA Financial Solutions | 28,905 | (2,374 | ) | — | 26,531 | ||||||||||
Total EMEA | 40,259 | (2,374 | ) | — | 37,885 | ||||||||||
Asia Pacific Traditional | 53,322 | — | — | 53,322 | |||||||||||
Asia Pacific Financial Solutions | 5,377 | (2,750 | ) | — | 2,627 | ||||||||||
Total Asia Pacific | 58,699 | (2,750 | ) | — | 55,949 | ||||||||||
Corporate and Other | 5,517 | (15,016 | ) | — | (9,499 | ) | |||||||||
Consolidated | $ | 339,315 | $ | (46,431 | ) | $ | (11,815 | ) | $ | 281,069 | |||||
(1) | Asset-Intensive is net of $(4,128) DAC offset. |
(2) | Asset-Intensive is net of $10,993 DAC offset. |
(Unaudited) | Three Months Ended June 30, 2016 | ||||||||||||||
Pre-tax net income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 111,430 | $ | 1 | $ | 881 | $ | 112,312 | |||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 93,979 | (64,277 | ) | (1) | 24,621 | (2) | 54,323 | ||||||||
Financial Reinsurance | 14,875 | — | — | 14,875 | |||||||||||
Total U.S. and Latin America | 220,284 | (64,276 | ) | 25,502 | 181,510 | ||||||||||
Canada Traditional | 43,309 | (2,402 | ) | — | 40,907 | ||||||||||
Canada Financial Solutions | 2,128 | — | — | 2,128 | |||||||||||
Total Canada | 45,437 | (2,402 | ) | — | 43,035 | ||||||||||
EMEA Traditional | 6,834 | — | — | 6,834 | |||||||||||
EMEA Financial Solutions | 27,469 | (1,341 | ) | — | 26,128 | ||||||||||
Total EMEA | 34,303 | (1,341 | ) | — | 32,962 | ||||||||||
Asia Pacific Traditional | 34,482 | — | — | 34,482 | |||||||||||
Asia Pacific Financial Solutions | (73 | ) | (5,925 | ) | — | (5,998 | ) | ||||||||
Total Asia Pacific | 34,409 | (5,925 | ) | — | 28,484 | ||||||||||
Corporate and Other | 18,790 | (31,557 | ) | — | (12,767 | ) | |||||||||
Consolidated | $ | 353,223 | $ | (105,501 | ) | $ | 25,502 | $ | 273,224 | ||||||
(1) | Asset-Intensive is net of $(26,854) DAC offset. |
(2) | Asset-Intensive is net of $91,695 DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income to Pre-tax Adjusted Operating Income
(Dollars in thousands)
(Unaudited) | Six Months Ended June 30, 2017 | ||||||||||||||
Pre-tax net income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 120,554 | $ | (1 | ) | $ | (1,310 | ) | $ | 119,243 | |||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 172,772 | 34,828 | (1) | (106,072 | ) | (2) | 101,528 | ||||||||
Financial Reinsurance | 37,799 | — | — | 37,799 | |||||||||||
Total U.S. and Latin America | 331,125 | 34,827 | (107,382 | ) | 258,570 | ||||||||||
Canada Traditional | 52,164 | (4,210 | ) | — | 47,954 | ||||||||||
Canada Financial Solutions | 8,017 | — | — | 8,017 | |||||||||||
Total Canada | 60,181 | (4,210 | ) | — | 55,971 | ||||||||||
EMEA Traditional | 25,330 | (7 | ) | — | 25,323 | ||||||||||
EMEA Financial Solutions | 60,823 | (6,817 | ) | — | 54,006 | ||||||||||
Total EMEA | 86,153 | (6,824 | ) | — | 79,329 | ||||||||||
Asia Pacific Traditional | 95,010 | — | — | 95,010 | |||||||||||
Asia Pacific Financial Solutions | 11,249 | (9,074 | ) | — | 2,175 | ||||||||||
Total Asia Pacific | 106,259 | (9,074 | ) | — | 97,185 | ||||||||||
Corporate and Other | (36,559 | ) | 458 | — | (36,101 | ) | |||||||||
Consolidated | $ | 547,159 | $ | 15,177 | $ | (107,382 | ) | $ | 454,954 | ||||||
(1) | Asset-Intensive is net of $24,756 DAC offset. |
(2) | Asset-Intensive is net of $34,449 DAC offset. |
(Unaudited) | Six Months Ended June 30, 2016 | ||||||||||||||
Pre-tax net income (loss) | Capital (gains) losses, derivatives and other, net | Change in value of embedded derivatives, net | Pre-tax adjusted operating income (loss) | ||||||||||||
U.S. and Latin America: | |||||||||||||||
Traditional | $ | 162,528 | $ | 66 | $ | 2,916 | $ | 165,510 | |||||||
Financial Solutions: | |||||||||||||||
Asset-Intensive | 63,149 | (80,359 | ) | (1) | 116,801 | (2) | 99,591 | ||||||||
Financial Reinsurance | 30,809 | — | — | 30,809 | |||||||||||
Total U.S. and Latin America | 256,486 | (80,293 | ) | 119,717 | 295,910 | ||||||||||
Canada Traditional | 63,404 | (3,133 | ) | — | 60,271 | ||||||||||
Canada Financial Solutions | 2,720 | — | — | 2,720 | |||||||||||
Total Canada | 66,124 | (3,133 | ) | — | 62,991 | ||||||||||
EMEA Traditional | 5,718 | (5 | ) | — | 5,713 | ||||||||||
EMEA Financial Solutions | 52,893 | (1,154 | ) | — | 51,739 | ||||||||||
Total EMEA | 58,611 | (1,159 | ) | — | 57,452 | ||||||||||
Asia Pacific Traditional | 75,642 | (16 | ) | — | 75,626 | ||||||||||
Asia Pacific Financial Solutions | 8,480 | (7,036 | ) | — | 1,444 | ||||||||||
Total Asia Pacific | 84,122 | (7,052 | ) | — | 77,070 | ||||||||||
Corporate and Other | (4,540 | ) | (38,501 | ) | — | (43,041 | ) | ||||||||
Consolidated | $ | 460,803 | $ | (130,138 | ) | $ | 119,717 | $ | 450,382 | ||||||
(1) | Asset-Intensive is net of $(13,709) DAC offset. |
(2) | Asset-Intensive is net of $1,572 DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share data)
(Unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Earnings per share from net income: | |||||||||||||||
Basic earnings per share | $ | 3.60 | $ | 3.68 | $ | 5.86 | $ | 4.86 | |||||||
Diluted earnings per share | $ | 3.54 | $ | 3.64 | $ | 5.76 | $ | 4.81 | |||||||
Diluted earnings per share from adjusted operating income | $ | 2.95 | $ | 2.80 | $ | 4.81 | $ | 4.65 | |||||||
Weighted average number of common and common equivalent shares outstanding | 65,608 | 64,796 | 65,605 | 65,008 | |||||||||||
(Unaudited) | At June 30, | ||||||
2017 | 2016 | ||||||
Treasury shares | 14,646 | 15,068 | |||||
Common shares outstanding | 64,492 | 64,070 | |||||
Book value per share outstanding | $ | 123.60 | $ | 118.32 | |||
Book value per share outstanding, before impact of AOCI | $ | 97.68 | $ | 87.33 | |||
Reconciliation of Book Value Per Share to Book Value Per Share Excluding AOCI
(Unaudited) | At June 30, | ||||||
2017 | 2016 | ||||||
Book value per share outstanding | $ | 123.60 | $ | 118.32 | |||
Less effect of AOCI: | |||||||
Accumulated currency translation adjustments | (2.34 | ) | (1.46 | ) | |||
Unrealized appreciation of securities | 28.91 | 33.20 | |||||
Pension and postretirement benefits | (0.65 | ) | (0.75 | ) | |||
Book value per share outstanding, before impact of AOCI | $ | 97.68 | $ | 87.33 | |||
Reconciliation of Stockholders' Average Equity to Stockholders' Average Equity Excluding AOCI
(Dollars in thousands)
(Unaudited) | Twelve Months Ended | ||
June 30, 2017 | |||
Stockholders' average equity | $ | 7,611,679 | |
Less effect of AOCI: | |||
Accumulated currency translation adjustments | (146,734 | ) | |
Unrealized appreciation of securities | 1,857,189 | ||
Pension and postretirement benefits | (44,439 | ) | |
Stockholders' average equity, excluding AOCI | $ | 5,945,663 | |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
(Unaudited) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Net premiums | $ | 2,480,451 | $ | 2,346,945 | $ | 4,846,147 | $ | 4,503,950 | |||||||
Investment income, net of related expenses | 518,538 | 507,666 | 1,032,902 | 924,932 | |||||||||||
Investment related gains (losses), net: | |||||||||||||||
Other-than-temporary impairments on fixed maturity securities | (3,401 | ) | (846 | ) | (20,590 | ) | (34,663 | ) | |||||||
Other investment related gains (losses), net | 59,696 | 119,110 | 137,408 | 32,041 | |||||||||||
Total investment related gains (losses), net | 56,295 | 118,264 | 116,818 | (2,622 | ) | ||||||||||
Other revenue | 73,992 | 66,193 | 142,149 | 125,376 | |||||||||||
Total revenues | 3,129,276 | 3,039,068 | 6,138,016 | 5,551,636 | |||||||||||
Benefits and expenses: | |||||||||||||||
Claims and other policy benefits | 2,164,363 | 1,997,502 | 4,270,508 | 3,884,266 | |||||||||||
Interest credited | 115,285 | 95,849 | 222,969 | 183,754 | |||||||||||
Policy acquisition costs and other insurance expenses | 319,832 | 405,681 | 699,221 | 639,444 | |||||||||||
Other operating expenses | 154,356 | 159,895 | 312,862 | 317,319 | |||||||||||
Interest expense | 29,352 | 20,331 | 71,754 | 53,138 | |||||||||||
Collateral finance and securitization expense | 6,773 | 6,587 | 13,543 | 12,912 | |||||||||||
Total benefits and expenses | 2,789,961 | 2,685,845 | 5,590,857 | 5,090,833 | |||||||||||
Income before income taxes | 339,315 | 353,223 | 547,159 | 460,803 | |||||||||||
Provision for income taxes | 107,125 | 117,120 | 169,457 | 148,228 | |||||||||||
Net income | $ | 232,190 | $ | 236,103 | $ | 377,702 | $ | 312,575 | |||||||
# # #
Exhibit 99.2
Financial Supplement
Second Quarter 2017
(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 | ||||
Senior 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, Ltd. | AA- | NR | NR | |||
RGA Reinsurance Company of Australia Limited | AA- | NR | NR | |||
RGA Americas Reinsurance Company, Ltd. | AA- | A+ | NR | |||
RGA Atlantic Reinsurance Company Ltd. | NR | A+ | NR | |||
Senior Debt Ratings | ||||||
Reinsurance Group of America, Incorporated | A- | a- | Baa1 | |||
Our common stock is traded on the New York Stock Exchange under the symbol “RGA”.
Reinsurance Group of America, Incorporated
Financial Supplement
2nd Quarter 2017
Table of Contents
Page | |
Consolidated | |
Segment Summaries of GAAP Income Statements and Adjusted Operating Income Statements | |
Investments | |
Appendix | |
Reinsurance Group of America, Incorporated
Quarterly Financial Supplement
Non-GAAP Disclosures
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
Effective with the first quarter of 2017, the Company modified the labeling of its non-GAAP measure "operating income" to "adjusted operating income".
RGA uses a non-GAAP financial measure called adjusted 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 adjusted 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, adjusted 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 adjusted 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 adjusted operating income before income taxes is presented in the appendix.
RGA evaluates its shareholders' 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 adjusted operating return on equity, which is calculated as adjusted 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 Highlights | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to Date | ||||||||||||||||||||||||||||||||||||
(USD thousands, except in force & per share data) | June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | Change | |||||||||||||||||||||||||||||||
Net premiums | $ | 2,480,451 | $ | 2,365,696 | $ | 2,493,163 | $ | 2,251,758 | $ | 2,346,945 | $ | 133,506 | $ | 4,846,147 | $ | 4,503,950 | $ | 342,197 | ||||||||||||||||||||
Net income | 232,190 | 145,512 | 190,149 | 198,719 | 236,103 | (3,913 | ) | 377,702 | 312,575 | 65,127 | ||||||||||||||||||||||||||||
Adjusted operating income | 193,674 | 122,065 | 171,259 | 159,361 | 181,228 | 12,446 | 315,739 | 301,978 | 13,761 | |||||||||||||||||||||||||||||
Return on equity - annualized | 12.1 | % | 8.0 | % | 10.1 | % | 10.2 | % | 13.2 | % | (1.1 | )% | ||||||||||||||||||||||||||
Return on equity - trailing 12 months | 10.1 | % | 10.5 | % | 9.9 | % | 9.7 | % | 8.4 | % | 1.7 | % | ||||||||||||||||||||||||||
Adjusted operating return on equity (ex AOCI): | ||||||||||||||||||||||||||||||||||||||
Annualized | 12.5 | % | 8.1 | % | 11.7 | % | 11.2 | % | 13.2 | % | (0.7 | )% | ||||||||||||||||||||||||||
Trailing 12 months | 10.9 | % | 11.0 | % | 11.2 | % | 11.8 | % | 11.4 | % | (0.5 | )% | ||||||||||||||||||||||||||
Total assets | $ | 58,138,072 | $ | 53,805,820 | $ | 53,097,879 | $ | 54,832,498 | $ | 53,876,703 | $ | 4,261,369 | ||||||||||||||||||||||||||
Assumed Life Reinsurance In Force (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 1,612.2 | $ | 1,610.0 | $ | 1,609.3 | $ | 1,603.8 | $ | 1,612.9 | $ | (0.7 | ) | |||||||||||||||||||||||||
U.S. and Latin America Financial Solutions | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | — | ||||||||||||||||||||||||||||||||
Canada Traditional | 368.7 | 363.6 | 355.7 | 358.7 | 361.8 | 6.9 | ||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 688.2 | 642.6 | 603.0 | 612.8 | 608.3 | 79.9 | ||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 561.5 | 518.1 | 492.2 | 505.1 | 504.8 | 56.7 | ||||||||||||||||||||||||||||||||
Asia Pacific Financial Solutions | 0.4 | 0.4 | 0.2 | 0.3 | 0.4 | — | ||||||||||||||||||||||||||||||||
Total assumed life reinsurance in force | $ | 3,233.1 | $ | 3,136.8 | $ | 3,062.5 | $ | 3,082.8 | $ | 3,090.3 | $ | 142.8 | ||||||||||||||||||||||||||
Assumed New Business Production (in billions) | ||||||||||||||||||||||||||||||||||||||
U.S. and Latin America Traditional | $ | 23.5 | $ | 26.8 | $ | 33.4 | $ | 19.7 | $ | 32.0 | $ | (8.5 | ) | $ | 50.3 | $ | 73.3 | $ | (23.0 | ) | ||||||||||||||||||
Canada Traditional | 8.5 | 10.3 | 9.1 | 9.4 | 8.2 | 0.3 | 18.8 | 16.4 | 2.4 | |||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 53.4 | 42.1 | 44.3 | 31.7 | 49.1 | 4.3 | 95.5 | 93.8 | 1.7 | |||||||||||||||||||||||||||||
Asia Pacific Traditional | 37.1 | 12.4 | 21.6 | 20.5 | 18.0 | 19.1 | 49.5 | 31.6 | 17.9 | |||||||||||||||||||||||||||||
Total assumed new business production | $ | 122.5 | $ | 91.6 | $ | 108.4 | $ | 81.3 | $ | 107.3 | $ | 15.2 | $ | 214.1 | $ | 215.1 | $ | (1.0 | ) | |||||||||||||||||||
Per Share and Shares Data | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 3.60 | $ | 2.26 | $ | 2.96 | $ | 3.10 | $ | 3.68 | $ | (0.08 | ) | $ | 5.86 | $ | 4.86 | $ | 1.00 | |||||||||||||||||||
Adjusted operating income | $ | 3.01 | $ | 1.90 | $ | 2.67 | $ | 2.48 | $ | 2.83 | $ | 0.18 | $ | 4.90 | $ | 4.69 | $ | 0.21 | ||||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 3.54 | $ | 2.22 | $ | 2.92 | $ | 3.07 | $ | 3.64 | $ | (0.10 | ) | $ | 5.76 | $ | 4.81 | $ | 0.95 | |||||||||||||||||||
Adjusted operating income | $ | 2.95 | $ | 1.86 | $ | 2.63 | $ | 2.46 | $ | 2.80 | $ | 0.15 | $ | 4.81 | $ | 4.65 | $ | 0.16 | ||||||||||||||||||||
Wgt. average common shares outstanding | ||||||||||||||||||||||||||||||||||||||
Basic | 64,449 | 64,353 | 64,251 | 64,146 | 64,126 | 323 | 64,401 | 64,348 | 53 | |||||||||||||||||||||||||||||
Diluted | 65,608 | 65,671 | 65,124 | 64,815 | 64,796 | 812 | 65,605 | 65,008 | 597 | |||||||||||||||||||||||||||||
Common shares issued | 79,138 | 79,138 | 79,138 | 79,138 | 79,138 | — | 79,138 | 79,138 | — | |||||||||||||||||||||||||||||
Treasury shares | 14,646 | 14,749 | 14,835 | 14,932 | 15,068 | (422 | ) | 14,646 | 15,068 | (422 | ) | |||||||||||||||||||||||||||
Common shares outstanding | 64,492 | 64,389 | 64,303 | 64,206 | 64,070 | 422 | 64,492 | 64,070 | 422 | |||||||||||||||||||||||||||||
Book value per share | $ | 123.60 | $ | 115.24 | $ | 110.31 | $ | 124.50 | $ | 118.32 | $ | 5.28 | ||||||||||||||||||||||||||
Per share effect of AOCI | $ | 25.92 | $ | 20.52 | $ | 17.72 | $ | 34.46 | $ | 30.99 | $ | (5.07 | ) | |||||||||||||||||||||||||
Book value per share, excluding AOCI | $ | 97.68 | $ | 94.72 | $ | 92.59 | $ | 90.04 | $ | 87.33 | $ | 10.35 | ||||||||||||||||||||||||||
Shareholder dividends paid | $ | 26,433.9 | $ | 26,380.9 | $ | 26,337.3 | $ | 26,288.3 | $ | 23,727.2 | $ | 2,706.7 | $ | 52,814.8 | $ | 47,745.8 | $ | 5,069.0 | ||||||||||||||||||||
| Page 2 | |
Reinsurance Group of America, Incorporated Consolidated GAAP Income Statements (including Adjusted Operating Income Reconciliations) (USD in thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
Revenues: | 2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | |||||||||||||||||||||||||||||
Net premiums | $ | 2,480,451 | $ | 2,365,696 | $ | 2,493,163 | $ | 2,251,758 | $ | 2,346,945 | $ | 133,506 | $ | 4,846,147 | $ | 4,503,950 | $ | 342,197 | ||||||||||||||||||||
Investment income, net of related expenses | 518,538 | 514,364 | 497,227 | 489,727 | 507,666 | 10,872 | 1,032,902 | 924,932 | 107,970 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | ||||||||||||||||||||||||||||||||||||||
OTTI on fixed maturity securities | (3,401 | ) | (17,189 | ) | (4,142 | ) | — | (846 | ) | (2,555 | ) | (20,590 | ) | (34,663 | ) | 14,073 | ||||||||||||||||||||||
OTTI on fixed maturity securities transferred to OCI | — | — | 74 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other investment related gains (losses), net | 59,696 | 77,712 | 14,261 | 86,624 | 119,110 | (59,414 | ) | 137,408 | 32,041 | 105,367 | ||||||||||||||||||||||||||||
Total investment related gains (losses), net | 56,295 | 60,523 | 10,193 | 86,624 | 118,264 | (61,969 | ) | 116,818 | (2,622 | ) | 119,440 | |||||||||||||||||||||||||||
Other revenue | 73,992 | 68,157 | 68,715 | 72,468 | 66,193 | 7,799 | 142,149 | 125,376 | 16,773 | |||||||||||||||||||||||||||||
Total revenues | 3,129,276 | 3,008,740 | 3,069,298 | 2,900,577 | 3,039,068 | 90,208 | 6,138,016 | 5,551,636 | 586,380 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 2,164,363 | 2,106,145 | 2,116,045 | 1,993,064 | 1,997,502 | 166,861 | 4,270,508 | 3,884,266 | 386,242 | |||||||||||||||||||||||||||||
Interest credited | 115,285 | 107,684 | 64,089 | 116,848 | 95,849 | 19,436 | 222,969 | 183,754 | 39,215 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 319,832 | 379,389 | 370,134 | 300,962 | 405,681 | (85,849 | ) | 699,221 | 639,444 | 59,777 | ||||||||||||||||||||||||||||
Other operating expenses | 154,356 | 158,506 | 175,634 | 152,556 | 159,895 | (5,539 | ) | 312,862 | 317,319 | (4,457 | ) | |||||||||||||||||||||||||||
Interest expense | 29,352 | 42,402 | 41,422 | 43,063 | 20,331 | 9,021 | 71,754 | 53,138 | 18,616 | |||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,773 | 6,770 | 6,431 | 6,484 | 6,587 | 186 | 13,543 | 12,912 | 631 | |||||||||||||||||||||||||||||
Total benefits and expenses | 2,789,961 | 2,800,896 | 2,773,755 | 2,612,977 | 2,685,845 | 104,116 | 5,590,857 | 5,090,833 | 500,024 | |||||||||||||||||||||||||||||
Income before income taxes | 339,315 | 207,844 | 295,543 | 287,600 | 353,223 | (13,908 | ) | 547,159 | 460,803 | 86,356 | ||||||||||||||||||||||||||||
Provision for income taxes | 107,125 | 62,332 | 105,394 | 88,881 | 117,120 | (9,995 | ) | 169,457 | 148,228 | 21,229 | ||||||||||||||||||||||||||||
Net income | $ | 232,190 | $ | 145,512 | $ | 190,149 | $ | 198,719 | $ | 236,103 | $ | (3,913 | ) | $ | 377,702 | $ | 312,575 | $ | 65,127 | |||||||||||||||||||
Pre-tax Adjusted Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 339,315 | $ | 207,844 | $ | 295,543 | $ | 287,600 | $ | 353,223 | $ | (13,908 | ) | $ | 547,159 | $ | 460,803 | $ | 86,356 | |||||||||||||||||||
Investment and derivative losses (gains) (1) | (38,098 | ) | 33,272 | 103,944 | (26,958 | ) | (67,100 | ) | 29,002 | (4,826 | ) | (99,068 | ) | 94,242 | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (15,108 | ) | (68,702 | ) | (20,374 | ) | (49,078 | ) | (76,966 | ) | 61,858 | (83,810 | ) | 15,283 | (99,093 | ) | ||||||||||||||||||||||
GMXB embedded derivatives (1) | (360 | ) | (22,363 | ) | (90,923 | ) | (7,988 | ) | 28,137 | (28,497 | ) | (22,723 | ) | 91,077 | (113,800 | ) | ||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (4,263 | ) | (654 | ) | (8,238 | ) | (3,322 | ) | (11,657 | ) | 7,394 | (4,917 | ) | (16,640 | ) | 11,723 | ||||||||||||||||||||||
EIA embedded derivatives—interest credited | (7,340 | ) | (27,958 | ) | (39,964 | ) | 42 | (17,364 | ) | 10,024 | (35,298 | ) | 11,785 | (47,083 | ) | |||||||||||||||||||||||
DAC offset, net | 6,865 | 52,340 | 27,625 | 31,876 | 64,841 | (57,976 | ) | 59,205 | (12,137 | ) | 71,342 | |||||||||||||||||||||||||||
Investment (income) loss on unit-linked variable annuities | 291 | (4,113 | ) | (4,217 | ) | (5,540 | ) | (2,966 | ) | 3,257 | (3,822 | ) | (3,374 | ) | (448 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | (291 | ) | 4,113 | 4,217 | 5,540 | 2,966 | (3,257 | ) | 3,822 | 3,374 | 448 | |||||||||||||||||||||||||||
Non-investment derivatives | 58 | 106 | 289 | (1,705 | ) | 110 | (52 | ) | 164 | (721 | ) | 885 | ||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 281,069 | $ | 173,885 | $ | 267,902 | $ | 230,467 | $ | 273,224 | $ | 7,845 | $ | 454,954 | $ | 450,382 | $ | 4,572 | ||||||||||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
After-tax Adjusted Operating Income Reconciliation: | ||||||||||||||||||||||||||||||||||||||
Net Income | $ | 232,190 | $ | 145,512 | $ | 190,149 | $ | 198,719 | $ | 236,103 | $ | (3,913 | ) | $ | 377,702 | $ | 312,575 | $ | 65,127 | |||||||||||||||||||
Investment and derivative losses (gains) (1) | (25,419 | ) | 20,253 | 66,640 | (19,745 | ) | (46,490 | ) | 21,071 | (5,166 | ) | (68,217 | ) | 63,051 | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (9,821 | ) | (44,656 | ) | (13,243 | ) | (31,901 | ) | (50,028 | ) | 40,207 | (54,477 | ) | 9,934 | (64,411 | ) | ||||||||||||||||||||||
GMXB embedded derivatives (1) | (234 | ) | (14,536 | ) | (59,100 | ) | (5,192 | ) | 18,289 | (18,523 | ) | (14,770 | ) | 59,200 | (73,970 | ) | ||||||||||||||||||||||
Funds withheld losses (gains)—investment income | (2,771 | ) | (425 | ) | (5,355 | ) | (2,159 | ) | (7,577 | ) | 4,806 | (3,196 | ) | (10,816 | ) | 7,620 | ||||||||||||||||||||||
EIA embedded derivatives—interest credited | (4,771 | ) | (18,173 | ) | (25,977 | ) | 28 | (11,287 | ) | 6,516 | (22,944 | ) | 7,660 | (30,604 | ) | |||||||||||||||||||||||
DAC offset, net | 4,462 | 34,021 | 17,957 | 20,719 | 42,147 | (37,685 | ) | 38,483 | (7,889 | ) | 46,372 | |||||||||||||||||||||||||||
Investment (income) loss on unit-linked variable annuities | 189 | (2,673 | ) | (2,741 | ) | (3,601 | ) | (1,928 | ) | 2,117 | (2,484 | ) | (2,193 | ) | (291 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | (189 | ) | 2,673 | 2,741 | 3,601 | 1,928 | (2,117 | ) | 2,484 | 2,193 | 291 | |||||||||||||||||||||||||||
Non-investment derivatives | 38 | 69 | 188 | (1,108 | ) | 71 | (33 | ) | 107 | (469 | ) | 576 | ||||||||||||||||||||||||||
Adjusted operating income | $ | 193,674 | $ | 122,065 | $ | 171,259 | $ | 159,361 | $ | 181,228 | $ | 12,446 | $ | 315,739 | $ | 301,978 | $ | 13,761 | ||||||||||||||||||||
Wgt. average common shares outstanding (diluted) | 65,608 | 65,671 | 65,124 | 64,815 | 64,796 | 812 | 65,605 | 65,008 | 597 | |||||||||||||||||||||||||||||
Diluted earnings per share - adjusted operating income | $ | 2.95 | $ | 1.86 | $ | 2.63 | $ | 2.46 | $ | 2.80 | $ | 0.15 | $ | 4.81 | $ | 4.65 | $ | 0.16 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (30,464 | ) | $ | (5,173 | ) | $ | (35,247 | ) | $ | (21,049 | ) | $ | (45,665 | ) | $ | 15,201 | $ | (35,637 | ) | $ | (115,873 | ) | $ | 80,236 | |||||||||||||
Adjusted operating income before income taxes | $ | (6,057 | ) | $ | (2,266 | ) | $ | (7,911 | ) | $ | (3,236 | ) | $ | (4,247 | ) | $ | (1,810 | ) | $ | (8,323 | ) | $ | (14,009 | ) | $ | 5,686 | ||||||||||||
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 3 | |
Reinsurance Group of America, Incorporated Consolidated Balance Sheets (USD thousands) | ||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 36,345,426 | $ | 32,694,793 | $ | 32,093,625 | $ | 33,536,419 | $ | 33,160,976 | ||||||||||
Mortgage loans on real estate | 4,104,487 | 3,871,309 | 3,775,522 | 3,607,700 | 3,377,039 | |||||||||||||||
Policy loans | 1,406,774 | 1,402,940 | 1,427,602 | 1,414,963 | 1,445,410 | |||||||||||||||
Funds withheld at interest | 5,968,856 | 5,943,450 | 5,875,919 | 5,922,656 | 5,899,289 | |||||||||||||||
Short-term investments | 123,308 | 54,288 | 76,710 | 126,702 | 195,979 | |||||||||||||||
Other invested assets | 1,498,370 | 1,429,175 | 1,591,940 | 1,777,065 | 1,682,143 | |||||||||||||||
Total investments | 49,447,221 | 45,395,955 | 44,841,318 | 46,385,505 | 45,760,836 | |||||||||||||||
Cash and cash equivalents | 1,123,350 | 1,178,114 | 1,200,718 | 1,379,693 | 1,034,329 | |||||||||||||||
Accrued investment income | 388,008 | 360,225 | 347,173 | 391,837 | 368,926 | |||||||||||||||
Premiums receivable and other reinsurance balances | 2,205,631 | 2,008,409 | 1,930,755 | 1,834,362 | 1,917,844 | |||||||||||||||
Reinsurance ceded receivables | 798,365 | 760,715 | 683,972 | 694,906 | 681,425 | |||||||||||||||
Deferred policy acquisition costs | 3,334,094 | 3,300,548 | 3,338,605 | 3,406,093 | 3,401,935 | |||||||||||||||
Other assets | 841,403 | 801,854 | 755,338 | 740,102 | 711,408 | |||||||||||||||
Total assets | $ | 58,138,072 | $ | 53,805,820 | $ | 53,097,879 | $ | 54,832,498 | $ | 53,876,703 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Future policy benefits | $ | 20,665,256 | $ | 19,832,483 | $ | 19,581,573 | $ | 19,634,157 | $ | 19,605,021 | ||||||||||
Interest-sensitive contract liabilities | 16,440,873 | 14,039,919 | 14,029,354 | 14,217,831 | 14,024,012 | |||||||||||||||
Other policy claims and benefits | 4,809,780 | 4,649,192 | 4,263,026 | 4,304,491 | 4,305,219 | |||||||||||||||
Other reinsurance balances | 399,517 | 390,019 | 388,989 | 353,426 | 344,527 | |||||||||||||||
Deferred income taxes | 3,162,666 | 2,863,744 | 2,770,640 | 3,071,995 | 2,901,264 | |||||||||||||||
Other liabilities | 1,077,223 | 996,288 | 1,041,880 | 1,321,017 | 1,157,252 | |||||||||||||||
Long-term debt | 2,788,494 | 2,788,619 | 3,088,635 | 3,088,710 | 3,088,280 | |||||||||||||||
Collateral finance and securitization notes | 823,108 | 825,526 | 840,700 | 847,389 | 870,482 | |||||||||||||||
Total liabilities | 50,166,917 | 46,385,790 | 46,004,797 | 46,839,016 | 46,296,057 | |||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||
Common stock, at par value | 791 | 791 | 791 | 791 | 791 | |||||||||||||||
Additional paid-in-capital | 1,860,001 | 1,858,226 | 1,848,611 | 1,842,390 | 1,834,995 | |||||||||||||||
Retained earnings | 5,523,622 | 5,329,464 | 5,199,130 | 5,039,470 | 4,870,711 | |||||||||||||||
Treasury stock | (1,085,157 | ) | (1,089,606 | ) | (1,094,779 | ) | (1,101,495 | ) | (1,111,225 | ) | ||||||||||
Accumulated other comprehensive income (AOCI): | ||||||||||||||||||||
Accumulated currency translation adjustment, net of income taxes | (151,189 | ) | (194,754 | ) | (172,541 | ) | (121,709 | ) | (93,476 | ) | ||||||||||
Unrealized appreciation of securities, net of income taxes | 1,864,477 | 1,558,148 | 1,355,033 | 2,381,473 | 2,126,815 | |||||||||||||||
Pension and postretirement benefits, net of income taxes | (41,390 | ) | (42,239 | ) | (43,163 | ) | (47,438 | ) | (47,965 | ) | ||||||||||
Total stockholders’ equity | 7,971,155 | 7,420,030 | 7,093,082 | 7,993,482 | 7,580,646 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 58,138,072 | $ | 53,805,820 | $ | 53,097,879 | $ | 54,832,498 | $ | 53,876,703 | ||||||||||
Total stockholders’ equity, excluding AOCI | $ | 6,299,257 | $ | 6,098,875 | $ | 5,953,753 | $ | 5,781,156 | $ | 5,595,272 | ||||||||||
| Page 4 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,335,316 | $ | 1,304,345 | $ | 1,430,291 | $ | 1,277,491 | $ | 1,307,395 | $ | 27,921 | $ | 2,639,661 | $ | 2,541,789 | $ | 97,872 | ||||||||||||||||||||
Investment income, net of related expenses | 183,713 | 178,995 | 184,674 | 167,898 | 182,238 | 1,475 | 362,708 | 347,261 | 15,447 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | (654 | ) | 1,965 | 2,147 | (3,394 | ) | (882 | ) | 228 | 1,311 | (2,982 | ) | 4,293 | |||||||||||||||||||||||||
Other revenue | 4,323 | 3,198 | 8,119 | 2,922 | 5,252 | (929 | ) | 7,521 | 8,752 | (1,231 | ) | |||||||||||||||||||||||||||
Total revenues | 1,522,698 | 1,488,503 | 1,625,231 | 1,444,917 | 1,494,003 | 28,695 | 3,011,201 | 2,894,820 | 116,381 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,194,917 | 1,225,640 | 1,232,207 | 1,131,507 | 1,149,665 | 45,252 | 2,420,557 | 2,269,107 | 151,450 | |||||||||||||||||||||||||||||
Interest credited | 20,838 | 20,289 | 22,156 | 20,628 | 20,845 | (7 | ) | 41,127 | 42,245 | (1,118 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 186,375 | 180,810 | 205,358 | 184,766 | 182,285 | 4,090 | 367,185 | 359,363 | 7,822 | |||||||||||||||||||||||||||||
Other operating expenses | 29,974 | 31,804 | 34,018 | 30,935 | 29,778 | 196 | 61,778 | 61,577 | 201 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,432,104 | 1,458,543 | 1,493,739 | 1,367,836 | 1,382,573 | 49,531 | 2,890,647 | 2,732,292 | 158,355 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 90,594 | $ | 29,960 | $ | 131,492 | $ | 77,081 | $ | 111,430 | $ | (20,836 | ) | $ | 120,554 | $ | 162,528 | $ | (41,974 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 89.5 | % | 94.0 | % | 86.2 | % | 88.6 | % | 87.9 | % | 1.6 | % | 91.7 | % | 89.3 | % | 2.4 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14.0 | % | 13.9 | % | 14.4 | % | 14.5 | % | 13.9 | % | 0.1 | % | 13.9 | % | 14.1 | % | (0.2 | )% | ||||||||||||||||||||
Other operating expenses | 2.2 | % | 2.4 | % | 2.4 | % | 2.4 | % | 2.3 | % | (0.1 | )% | 2.3 | % | 2.4 | % | (0.1 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (199 | ) | $ | (959 | ) | $ | (1,372 | ) | $ | (1,135 | ) | $ | (2,243 | ) | $ | 2,044 | $ | (1,158 | ) | $ | (3,111 | ) | $ | 1,953 | |||||||||||||
Income before income taxes | $ | (84 | ) | $ | (160 | ) | $ | 159 | $ | (41 | ) | $ | (189 | ) | $ | 105 | $ | (244 | ) | $ | (210 | ) | $ | (34 | ) | |||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 5 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | Qtr vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,335,316 | $ | 1,304,345 | $ | 1,430,291 | $ | 1,277,491 | $ | 1,307,395 | $ | 27,921 | $ | 2,639,661 | $ | 2,541,789 | $ | 97,872 | ||||||||||||||||||||
Investment income, net of related expenses | 183,713 | 178,995 | 184,674 | 167,898 | 182,238 | 1,475 | 362,708 | 347,261 | 15,447 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | (1 | ) | 1 | — | — | — | (1 | ) | — | — | — | |||||||||||||||||||||||||||
Other revenue | 4,323 | 3,198 | 8,119 | 2,922 | 5,252 | (929 | ) | 7,521 | 8,752 | (1,231 | ) | |||||||||||||||||||||||||||
Total revenues | 1,523,351 | 1,486,539 | 1,623,084 | 1,448,311 | 1,494,885 | 28,466 | 3,009,890 | 2,897,802 | 112,088 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,194,917 | 1,225,640 | 1,232,207 | 1,131,507 | 1,149,665 | 45,252 | 2,420,557 | 2,269,107 | 151,450 | |||||||||||||||||||||||||||||
Interest credited | 20,838 | 20,289 | 22,156 | 20,628 | 20,845 | (7 | ) | 41,127 | 42,245 | (1,118 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 186,375 | 180,810 | 205,358 | 184,766 | 182,285 | 4,090 | 367,185 | 359,363 | 7,822 | |||||||||||||||||||||||||||||
Other operating expenses | 29,974 | 31,804 | 34,018 | 30,935 | 29,778 | 196 | 61,778 | 61,577 | 201 | |||||||||||||||||||||||||||||
Total benefits and expenses | 1,432,104 | 1,458,543 | 1,493,739 | 1,367,836 | 1,382,573 | 49,531 | 2,890,647 | 2,732,292 | 158,355 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 91,247 | $ | 27,996 | $ | 129,345 | $ | 80,475 | $ | 112,312 | $ | (21,065 | ) | $ | 119,243 | $ | 165,510 | $ | (46,267 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 89.5 | % | 94.0 | % | 86.2 | % | 88.6 | % | 87.9 | % | 1.6 | % | 91.7 | % | 89.3 | % | 2.4 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 14.0 | % | 13.9 | % | 14.4 | % | 14.5 | % | 13.9 | % | 0.1 | % | 13.9 | % | 14.1 | % | (0.2 | )% | ||||||||||||||||||||
Other operating expenses | 2.2 | % | 2.4 | % | 2.4 | % | 2.4 | % | 2.3 | % | (0.1 | )% | 2.3 | % | 2.4 | % | (0.1 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (199 | ) | $ | (959 | ) | $ | (1,372 | ) | $ | (1,135 | ) | $ | (2,243 | ) | $ | 2,044 | $ | (1,158 | ) | $ | (3,111 | ) | $ | 1,953 | |||||||||||||
Income before income taxes | $ | (84 | ) | $ | (160 | ) | $ | 159 | $ | (41 | ) | $ | (189 | ) | $ | 105 | $ | (244 | ) | $ | (210 | ) | $ | (34 | ) | |||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 6 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Asset Intensive GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 7,128 | $ | 4,635 | $ | 7,099 | $ | 5,369 | $ | 5,662 | $ | 1,466 | $ | 11,763 | $ | 11,881 | $ | (118 | ) | |||||||||||||||||||
Investment income, net of related expenses | 177,957 | 187,153 | 161,395 | 167,683 | 177,681 | 276 | 365,110 | 294,896 | 70,214 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 32,626 | 57,771 | 5,708 | 59,661 | 76,830 | (44,204 | ) | 90,397 | (51,721 | ) | 142,118 | |||||||||||||||||||||||||||
Other revenue | 26,211 | 23,214 | 22,808 | 23,417 | 24,555 | 1,656 | 49,425 | 47,389 | 2,036 | |||||||||||||||||||||||||||||
Total revenues | 243,922 | 272,773 | 197,010 | 256,130 | 284,728 | (40,806 | ) | 516,695 | 302,445 | 214,250 | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 24,503 | 17,536 | 23,593 | 18,927 | 19,507 | 4,996 | 42,039 | 39,340 | 2,699 | |||||||||||||||||||||||||||||
Interest credited | 87,664 | 79,157 | 33,511 | 86,742 | 68,436 | 19,228 | 166,821 | 130,994 | 35,827 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 38,211 | 83,653 | 60,306 | 56,497 | 97,078 | (58,867 | ) | 121,864 | 57,422 | 64,442 | ||||||||||||||||||||||||||||
Other operating expenses | 6,542 | 6,657 | 7,339 | 5,232 | 5,728 | 814 | 13,199 | 11,540 | 1,659 | |||||||||||||||||||||||||||||
Total benefits and expenses | 156,920 | 187,003 | 124,749 | 167,398 | 190,749 | (33,829 | ) | 343,923 | 239,296 | 104,627 | ||||||||||||||||||||||||||||
Income before income taxes | $ | 87,002 | $ | 85,770 | $ | 72,261 | $ | 88,732 | $ | 93,979 | $ | (6,977 | ) | $ | 172,772 | $ | 63,149 | $ | 109,623 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 7 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Asset Intensive Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 7,128 | $ | 4,635 | $ | 7,099 | $ | 5,369 | $ | 5,662 | $ | 1,466 | $ | 11,763 | $ | 11,881 | $ | (118 | ) | |||||||||||||||||||
Investment income, net of related expenses | 173,947 | 186,409 | 153,879 | 165,388 | 167,377 | 6,570 | 360,356 | 279,968 | 80,388 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | — | (1 | ) | 1 | (1 | ) | — | 1 | (1 | ) | ||||||||||||||||||||||||||
Other revenue | 26,211 | 23,214 | 22,808 | 23,417 | 24,555 | 1,656 | 49,425 | 47,389 | 2,036 | |||||||||||||||||||||||||||||
Total revenues | 207,286 | 214,258 | 183,786 | 194,173 | 197,595 | 9,691 | 421,544 | 339,239 | 82,305 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 24,503 | 17,536 | 23,593 | 18,927 | 19,507 | 4,996 | 42,039 | 39,340 | 2,699 | |||||||||||||||||||||||||||||
Interest credited | 95,004 | 107,115 | 73,475 | 86,700 | 85,800 | 9,204 | 202,119 | 119,209 | 82,910 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 31,346 | 31,313 | 32,681 | 24,621 | 32,237 | (891 | ) | 62,659 | 69,559 | (6,900 | ) | |||||||||||||||||||||||||||
Other operating expenses | 6,542 | 6,657 | 7,339 | 5,232 | 5,728 | 814 | 13,199 | 11,540 | 1,659 | |||||||||||||||||||||||||||||
Total benefits and expenses | 157,395 | 162,621 | 137,088 | 135,480 | 143,272 | 14,123 | 320,016 | 239,648 | 80,368 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 49,891 | $ | 51,637 | $ | 46,698 | $ | 58,693 | $ | 54,323 | $ | (4,432 | ) | $ | 101,528 | $ | 99,591 | $ | 1,937 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 8 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Asset Intensive (Continued) (USD millions) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
Annuity account values: | ||||||||||||||||||||
Fixed annuities (deferred) | $ | 6,762 | $ | 5,072 | $ | 5,091 | $ | 5,130 | $ | 5,189 | ||||||||||
Net interest spread (fixed annuities) | 1.8 | % | 2.2 | % | 2.4 | % | 2.6 | % | 2.5 | % | ||||||||||
Equity-indexed annuities | $ | 4,188 | $ | 4,238 | $ | 4,291 | $ | 4,374 | $ | 4,402 | ||||||||||
Variable annuities account values | ||||||||||||||||||||
No riders | $ | 939 | $ | 727 | $ | 731 | $ | 739 | $ | 732 | ||||||||||
GMDB only | 179 | 58 | 58 | 58 | 58 | |||||||||||||||
GMIB only | 23 | 5 | 5 | 5 | 5 | |||||||||||||||
GMAB only | 28 | 29 | 28 | 29 | 29 | |||||||||||||||
GMWB only | 1,358 | 1,354 | 1,334 | 1,370 | 1,367 | |||||||||||||||
GMDB / WB | 339 | 339 | 335 | 342 | 341 | |||||||||||||||
Other | 35 | 20 | 19 | 20 | 20 | |||||||||||||||
Total variable annuities account values | $ | 2,901 | $ | 2,532 | $ | 2,510 | $ | 2,563 | $ | 2,552 | ||||||||||
Fair value of liabilities associated with living benefit riders | $ | 162 | $ | 162 | $ | 185 | $ | 276 | $ | 284 | ||||||||||
Interest-sensitive contract liabilities associated with: | ||||||||||||||||||||
Guaranteed investment contracts | $ | 825 | $ | 675 | $ | 554 | $ | 456 | $ | 354 | ||||||||||
Bank-owned life insurance (BOLI) | $ | 577 | $ | 575 | $ | 571 | $ | 568 | $ | 565 | ||||||||||
Other asset-intensive business | $ | 64 | $ | 64 | $ | 65 | $ | 65 | $ | 66 | ||||||||||
Future policy benefits associated with: | ||||||||||||||||||||
Payout annuities | $ | 2,287 | $ | 1,950 | $ | 1,964 | $ | 1,974 | $ | 1,978 | ||||||||||
| Page 9 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Financial Reinsurance GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1,853 | $ | 1,664 | $ | 1,092 | $ | 1,038 | $ | 2,386 | $ | (533 | ) | $ | 3,517 | $ | 4,993 | $ | (1,476 | ) | ||||||||||||||||||
Other revenue | 26,201 | 24,409 | 22,227 | 18,967 | 17,963 | 8,238 | 50,610 | 36,544 | 14,066 | |||||||||||||||||||||||||||||
Total revenues | 28,054 | 26,073 | 23,319 | 20,005 | 20,349 | 7,705 | 54,127 | 41,537 | 12,590 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5,619 | 5,941 | 5,505 | 3,492 | 3,085 | 2,534 | 11,560 | 5,653 | 5,907 | |||||||||||||||||||||||||||||
Other operating expenses | 2,452 | 2,316 | 3,367 | 2,531 | 2,389 | 63 | 4,768 | 5,075 | (307 | ) | ||||||||||||||||||||||||||||
Total benefits and expenses | 8,071 | 8,257 | 8,872 | 6,023 | 5,474 | 2,597 | 16,328 | 10,728 | 5,600 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 19,983 | $ | 17,816 | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 5,108 | $ | 37,799 | $ | 30,809 | $ | 6,990 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 10 | |
Reinsurance Group of America, Incorporated U.S. and Latin America Financial Solutions - Financial Reinsurance Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Investment income, net of related expenses | $ | 1,853 | $ | 1,664 | $ | 1,092 | $ | 1,038 | $ | 2,386 | $ | (533 | ) | $ | 3,517 | $ | 4,993 | $ | (1,476 | ) | ||||||||||||||||||
Other revenue | 26,201 | 24,409 | 22,227 | 18,967 | 17,963 | 8,238 | 50,610 | 36,544 | 14,066 | |||||||||||||||||||||||||||||
Total revenues | 28,054 | 26,073 | 23,319 | 20,005 | 20,349 | 7,705 | 54,127 | 41,537 | 12,590 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 5,619 | 5,941 | 5,505 | 3,492 | 3,085 | 2,534 | 11,560 | 5,653 | 5,907 | |||||||||||||||||||||||||||||
Other operating expenses | 2,452 | 2,316 | 3,367 | 2,531 | 2,389 | 63 | 4,768 | 5,075 | (307 | ) | ||||||||||||||||||||||||||||
Total benefits and expenses | 8,071 | 8,257 | 8,872 | 6,023 | 5,474 | 2,597 | 16,328 | 10,728 | 5,600 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 19,983 | $ | 17,816 | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 5,108 | $ | 37,799 | $ | 30,809 | $ | 6,990 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 11 | |
Reinsurance Group of America, Incorporated Canada Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 221,380 | $ | 215,762 | $ | 241,918 | $ | 231,154 | $ | 240,107 | $ | (18,727 | ) | $ | 437,142 | $ | 455,570 | $ | (18,428 | ) | ||||||||||||||||||
Investment income, net of related expenses | 44,830 | 44,506 | 44,806 | 45,239 | 46,859 | (2,029 | ) | 89,336 | 88,882 | 454 | ||||||||||||||||||||||||||||
Investment related gains (losses), net | 2,598 | 3,843 | 2,771 | 3,832 | 2,285 | 313 | 6,441 | 3,925 | 2,516 | |||||||||||||||||||||||||||||
Other revenue | 465 | 164 | 638 | 734 | (339 | ) | 804 | 629 | (1,465 | ) | 2,094 | |||||||||||||||||||||||||||
Total revenues | 269,273 | 264,275 | 290,133 | 280,959 | 288,912 | (19,639 | ) | 533,548 | 546,912 | (13,364 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 181,197 | 191,052 | 182,912 | 175,618 | 176,478 | 4,719 | 372,249 | 348,879 | 23,370 | |||||||||||||||||||||||||||||
Interest credited | 5 | 4 | 2 | 8 | 7 | (2 | ) | 9 | 9 | — | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 47,597 | 45,682 | 60,074 | 61,019 | 60,021 | (12,424 | ) | 93,279 | 117,159 | (23,880 | ) | |||||||||||||||||||||||||||
Other operating expenses | 7,638 | 8,209 | 10,119 | 10,039 | 9,097 | (1,459 | ) | 15,847 | 17,461 | (1,614 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 236,437 | 244,947 | 253,107 | 246,684 | 245,603 | (9,166 | ) | 481,384 | 483,508 | (2,124 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 32,836 | $ | 19,328 | $ | 37,026 | $ | 34,275 | $ | 43,309 | $ | (10,473 | ) | $ | 52,164 | $ | 63,404 | $ | (11,240 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Loss ratios (creditor business) | 27.8 | % | 27.1 | % | 22.5 | % | 27.0 | % | 32.2 | % | (4.4 | )% | 27.4 | % | 29.1 | % | (1.7 | )% | ||||||||||||||||||||
Loss ratios (excluding creditor business) | 92.8 | % | 100.7 | % | 92.2 | % | 93.1 | % | 87.4 | % | 5.4 | % | 96.7 | % | 92.6 | % | 4.1 | % | ||||||||||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 68.1 | % | 73.4 | % | 63.8 | % | 63.5 | % | 61.5 | % | 6.6 | % | 70.7 | % | 64.1 | % | 6.6 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (creditor business) | 65.3 | % | 66.0 | % | 67.5 | % | 65.7 | % | 64.3 | % | 1.0 | % | 65.6 | % | 65.5 | % | 0.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (excluding creditor business) | 12.6 | % | 12.3 | % | 11.5 | % | 12.6 | % | 11.8 | % | 0.8 | % | 12.5 | % | 12.2 | % | 0.3 | % | ||||||||||||||||||||
Other operating expenses | 3.5 | % | 3.8 | % | 4.2 | % | 4.3 | % | 3.8 | % | (0.3 | )% | 3.6 | % | 3.8 | % | (0.2 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (9,540 | ) | $ | 7,551 | $ | (108 | ) | $ | 724 | $ | (11,615 | ) | $ | 2,075 | $ | (1,989 | ) | $ | (33,625 | ) | $ | 31,636 | |||||||||||||||
Income before income taxes | $ | (1,308 | ) | $ | 1,187 | $ | (483 | ) | $ | 104 | $ | (2,247 | ) | $ | 939 | $ | (121 | ) | $ | (5,376 | ) | $ | 5,255 | |||||||||||||||
Creditor reinsurance net premiums | $ | 37,299 | $ | 35,564 | $ | 57,471 | $ | 59,983 | $ | 60,275 | $ | (22,976 | ) | $ | 72,863 | $ | 115,129 | $ | (42,266 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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 12 | |
Reinsurance Group of America, Incorporated Canada Traditional Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 221,380 | $ | 215,762 | $ | 241,918 | $ | 231,154 | $ | 240,107 | $ | (18,727 | ) | $ | 437,142 | $ | 455,570 | $ | (18,428 | ) | ||||||||||||||||||
Investment income, net of related expenses | 44,577 | 44,596 | 44,084 | 44,212 | 45,506 | (929 | ) | 89,173 | 87,170 | 2,003 | ||||||||||||||||||||||||||||
Investment related gains, net | 1,203 | 1,191 | 1,221 | 1,208 | 1,236 | (33 | ) | 2,394 | 2,504 | (110 | ) | |||||||||||||||||||||||||||
Other revenue | 465 | 164 | 638 | 734 | (339 | ) | 804 | 629 | (1,465 | ) | 2,094 | |||||||||||||||||||||||||||
Total revenues | 267,625 | 261,713 | 287,861 | 277,308 | 286,510 | (18,885 | ) | 529,338 | 543,779 | (14,441 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 181,197 | 191,052 | 182,912 | 175,618 | 176,478 | 4,719 | 372,249 | 348,879 | 23,370 | |||||||||||||||||||||||||||||
Interest credited | 5 | 4 | 2 | 8 | 7 | (2 | ) | 9 | 9 | — | ||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 47,597 | 45,682 | 60,074 | 61,019 | 60,021 | (12,424 | ) | 93,279 | 117,159 | (23,880 | ) | |||||||||||||||||||||||||||
Other operating expenses | 7,638 | 8,209 | 10,119 | 10,039 | 9,097 | (1,459 | ) | 15,847 | 17,461 | (1,614 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 236,437 | 244,947 | 253,107 | 246,684 | 245,603 | (9,166 | ) | 481,384 | 483,508 | (2,124 | ) | |||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 31,188 | $ | 16,766 | $ | 34,754 | $ | 30,624 | $ | 40,907 | $ | (9,719 | ) | $ | 47,954 | $ | 60,271 | $ | (12,317 | ) | ||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Loss ratios (creditor business) | 27.8 | % | 27.1 | % | 22.5 | % | 27.0 | % | 32.2 | % | (4.4 | )% | 27.4 | % | 29.1 | % | (1.7 | )% | ||||||||||||||||||||
Loss ratios (excluding creditor business) | 92.8 | % | 100.7 | % | 92.2 | % | 93.1 | % | 87.4 | % | 5.4 | % | 96.7 | % | 92.6 | % | 4.1 | % | ||||||||||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 68.1 | % | 73.4 | % | 64.0 | % | 63.8 | % | 61.8 | % | 6.3 | % | 70.7 | % | 64.3 | % | 6.4 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (creditor business) | 65.3 | % | 66.0 | % | 67.5 | % | 65.7 | % | 64.3 | % | 1.0 | % | 65.6 | % | 65.5 | % | 0.1 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses (excluding creditor business) | 12.6 | % | 12.3 | % | 11.5 | % | 12.6 | % | 11.8 | % | 0.8 | % | 12.5 | % | 12.2 | % | 0.3 | % | ||||||||||||||||||||
Other operating expenses | 3.5 | % | 3.8 | % | 4.2 | % | 4.3 | % | 3.8 | % | (0.3 | )% | 3.6 | % | 3.8 | % | (0.2 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (9,540 | ) | $ | 7,551 | $ | (108 | ) | $ | 724 | $ | (11,615 | ) | $ | 2,075 | $ | (1,989 | ) | $ | (33,625 | ) | $ | 31,636 | |||||||||||||||
Adjusted operating income before income taxes | $ | (1,232 | ) | $ | 1,130 | $ | (505 | ) | $ | 104 | $ | (2,130 | ) | $ | 898 | $ | (102 | ) | $ | (5,831 | ) | $ | 5,729 | |||||||||||||||
Creditor reinsurance net premiums | $ | 37,299 | $ | 35,564 | $ | 57,471 | $ | 59,983 | $ | 60,275 | $ | (22,976 | ) | $ | 72,863 | $ | 115,129 | $ | (42,266 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted 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 13 | |
Reinsurance Group of America, Incorporated Canada Financial Solutions (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 9,314 | $ | 9,410 | $ | 9,612 | $ | 9,946 | $ | 10,192 | $ | (878 | ) | $ | 18,724 | $ | 19,143 | $ | (419 | ) | ||||||||||||||||||
Investment income, net of related expenses | 1,351 | 1,044 | 1,043 | 1,037 | 228 | 1,123 | 2,395 | 612 | 1,783 | |||||||||||||||||||||||||||||
Other revenue | 1,338 | 1,353 | 1,386 | 1,376 | 1,434 | (96 | ) | 2,691 | 2,783 | (92 | ) | |||||||||||||||||||||||||||
Total revenues | 12,003 | 11,807 | 12,041 | 12,359 | 11,854 | 149 | 23,810 | 22,538 | 1,272 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 7,099 | 7,619 | 7,270 | 10,567 | 8,834 | (1,735 | ) | 14,718 | 18,438 | (3,720 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 206 | 144 | 229 | 285 | 513 | (307 | ) | 350 | 717 | (367 | ) | |||||||||||||||||||||||||||
Other operating expenses | 273 | 452 | 477 | 347 | 379 | (106 | ) | 725 | 663 | 62 | ||||||||||||||||||||||||||||
Total benefits and expenses | 7,578 | 8,215 | 7,976 | 11,199 | 9,726 | (2,148 | ) | 15,793 | 19,818 | (4,025 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 4,425 | $ | 3,592 | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 2,297 | $ | 8,017 | $ | 2,720 | $ | 5,297 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (403 | ) | $ | 436 | $ | (3 | ) | $ | 33 | $ | (491 | ) | $ | 88 | $ | 33 | $ | (1,406 | ) | $ | 1,439 | ||||||||||||||||
Income before income taxes | $ | (185 | ) | $ | 244 | $ | 13 | $ | (9 | ) | $ | (106 | ) | $ | (79 | ) | $ | 59 | $ | (681 | ) | $ | 740 | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Canada Financial Solutions operations includes longevity and financial reinsurance transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 14 | |
Reinsurance Group of America, Incorporated Canada Financial Solutions (1) Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 9,314 | $ | 9,410 | $ | 9,612 | $ | 9,946 | $ | 10,192 | $ | (878 | ) | $ | 18,724 | $ | 19,143 | $ | (419 | ) | ||||||||||||||||||
Investment income, net of related expenses | 1,351 | 1,044 | 1,043 | 1,037 | 228 | 1,123 | 2,395 | 612 | 1,783 | |||||||||||||||||||||||||||||
Other revenue | 1,338 | 1,353 | 1,386 | 1,376 | 1,434 | (96 | ) | 2,691 | 2,783 | (92 | ) | |||||||||||||||||||||||||||
Total revenues | 12,003 | 11,807 | 12,041 | 12,359 | 11,854 | 149 | 23,810 | 22,538 | 1,272 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 7,099 | 7,619 | 7,270 | 10,567 | 8,834 | (1,735 | ) | 14,718 | 18,438 | (3,720 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 206 | 144 | 229 | 285 | 513 | (307 | ) | 350 | 717 | (367 | ) | |||||||||||||||||||||||||||
Other operating expenses | 273 | 452 | 477 | 347 | 379 | (106 | ) | 725 | 663 | 62 | ||||||||||||||||||||||||||||
Total benefits and expenses | 7,578 | 8,215 | 7,976 | 11,199 | 9,726 | (2,148 | ) | 15,793 | 19,818 | (4,025 | ) | |||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 4,425 | $ | 3,592 | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 2,297 | $ | 8,017 | $ | 2,720 | $ | 5,297 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (403 | ) | $ | 436 | $ | (3 | ) | $ | 33 | $ | (491 | ) | $ | 88 | $ | 33 | $ | (1,406 | ) | $ | 1,439 | ||||||||||||||||
Adjusted operating income before income taxes | $ | (185 | ) | $ | 244 | $ | 13 | $ | (9 | ) | $ | (106 | ) | $ | (79 | ) | $ | 59 | $ | (681 | ) | $ | 740 | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Canada Financial Solutions operations includes longevity and financial reinsurance transactions. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 15 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 330,850 | $ | 304,672 | $ | 301,252 | $ | 275,514 | $ | 286,861 | $ | 43,989 | $ | 635,522 | $ | 563,296 | $ | 72,226 | ||||||||||||||||||||
Investment income, net of related expenses | 13,585 | 12,720 | 11,745 | 13,067 | 13,321 | 264 | 26,305 | 25,489 | 816 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | 7 | — | — | — | — | 7 | 5 | 2 | |||||||||||||||||||||||||||||
Other revenue | 1,485 | 687 | 1,806 | 489 | 1,460 | 25 | 2,172 | 2,486 | (314 | ) | ||||||||||||||||||||||||||||
Total revenues | 345,920 | 318,086 | 314,803 | 289,070 | 301,642 | 44,278 | 664,006 | 591,276 | 72,730 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 295,004 | 266,401 | 253,663 | 241,763 | 252,336 | 42,668 | 561,405 | 503,579 | 57,826 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 15,349 | 15,163 | 17,383 | 14,133 | 17,550 | (2,201 | ) | 30,512 | 32,332 | (1,820 | ) | |||||||||||||||||||||||||||
Other operating expenses | 24,213 | 22,546 | 27,931 | 24,659 | 24,922 | (709 | ) | 46,759 | 49,647 | (2,888 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 334,566 | 304,110 | 298,977 | 280,555 | 294,808 | 39,758 | 638,676 | 585,558 | 53,118 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 11,354 | $ | 13,976 | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | 4,520 | $ | 25,330 | $ | 5,718 | $ | 19,612 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 89.2 | % | 87.4 | % | 84.2 | % | 87.7 | % | 88.0 | % | 1.2 | % | 88.3 | % | 89.4 | % | (1.1 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 4.6 | % | 5.0 | % | 5.8 | % | 5.1 | % | 6.1 | % | (1.5 | )% | 4.8 | % | 5.7 | % | (0.9 | )% | ||||||||||||||||||||
Other operating expenses | 7.3 | % | 7.4 | % | 9.3 | % | 9.0 | % | 8.7 | % | (1.4 | )% | 7.4 | % | 8.8 | % | (1.4 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (17,249 | ) | $ | (17,859 | ) | $ | (37,351 | ) | $ | (32,564 | ) | $ | (20,223 | ) | $ | 2,974 | $ | (35,108 | ) | $ | (43,232 | ) | $ | 8,124 | |||||||||||||
Income before income taxes | $ | (522 | ) | $ | (721 | ) | $ | (1,021 | ) | $ | 157 | $ | 45 | $ | (567 | ) | $ | (1,243 | ) | $ | (139 | ) | $ | (1,104 | ) | |||||||||||||
Critical illness net premiums | $ | 49,211 | $ | 45,976 | $ | 46,455 | $ | 49,531 | $ | 53,805 | $ | (4,594 | ) | $ | 95,187 | $ | 107,448 | $ | (12,261 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 16 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Traditional Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 330,850 | $ | 304,672 | $ | 301,252 | $ | 275,514 | $ | 286,861 | $ | 43,989 | $ | 635,522 | $ | 563,296 | $ | 72,226 | ||||||||||||||||||||
Investment income, net of related expenses | 13,585 | 12,720 | 11,745 | 13,067 | 13,321 | 264 | 26,305 | 25,489 | 816 | |||||||||||||||||||||||||||||
Other revenue | 1,485 | 687 | 1,806 | 489 | 1,460 | 25 | 2,172 | 2,486 | (314 | ) | ||||||||||||||||||||||||||||
Total revenues | 345,920 | 318,079 | 314,803 | 289,070 | 301,642 | 44,278 | 663,999 | 591,271 | 72,728 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 295,004 | 266,401 | 253,663 | 241,763 | 252,336 | 42,668 | 561,405 | 503,579 | 57,826 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 15,349 | 15,163 | 17,383 | 14,133 | 17,550 | (2,201 | ) | 30,512 | 32,332 | (1,820 | ) | |||||||||||||||||||||||||||
Other operating expenses | 24,213 | 22,546 | 27,931 | 24,659 | 24,922 | (709 | ) | 46,759 | 49,647 | (2,888 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 334,566 | 304,110 | 298,977 | 280,555 | 294,808 | 39,758 | 638,676 | 585,558 | 53,118 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 11,354 | $ | 13,969 | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | 4,520 | $ | 25,323 | $ | 5,713 | $ | 19,610 | ||||||||||||||||||||
Loss and expense ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 89.2 | % | 87.4 | % | 84.2 | % | 87.7 | % | 88.0 | % | 1.2 | % | 88.3 | % | 89.4 | % | (1.1 | )% | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 4.6 | % | 5.0 | % | 5.8 | % | 5.1 | % | 6.1 | % | (1.5 | )% | 4.8 | % | 5.7 | % | (0.9 | )% | ||||||||||||||||||||
Other operating expenses | 7.3 | % | 7.4 | % | 9.3 | % | 9.0 | % | 8.7 | % | (1.4 | )% | 7.4 | % | 8.8 | % | (1.4 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (17,249 | ) | $ | (17,859 | ) | $ | (37,351 | ) | $ | (32,564 | ) | $ | (20,223 | ) | $ | 2,974 | $ | (35,108 | ) | $ | (43,232 | ) | $ | 8,124 | |||||||||||||
Adjusted operating income before income taxes | $ | (522 | ) | $ | (721 | ) | $ | (1,021 | ) | $ | 157 | $ | 46 | $ | (568 | ) | $ | (1,243 | ) | $ | (148 | ) | $ | (1,095 | ) | |||||||||||||
Critical illness net premiums | $ | 49,211 | $ | 45,976 | $ | 46,455 | $ | 49,531 | $ | 53,805 | $ | (4,594 | ) | $ | 95,187 | $ | 107,448 | $ | (12,261 | ) | ||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 17 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Financial Solutions (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 38,520 | $ | 41,995 | $ | 54,163 | $ | 47,018 | $ | 43,484 | $ | (4,964 | ) | $ | 80,515 | $ | 79,090 | $ | 1,425 | |||||||||||||||||||
Investment income, net of related expenses | 28,029 | 29,681 | 29,994 | 33,187 | 33,417 | (5,388 | ) | 57,710 | 62,101 | (4,391 | ) | |||||||||||||||||||||||||||
Investment related gains (losses), net | 2,458 | 4,575 | 4,914 | 8,159 | 1,468 | 990 | 7,033 | 464 | 6,569 | |||||||||||||||||||||||||||||
Other revenue | 4,398 | 3,738 | 2,962 | 11,388 | 2,608 | 1,790 | 8,136 | 7,078 | 1,058 | |||||||||||||||||||||||||||||
Total revenues | 73,405 | 79,989 | 92,033 | 99,752 | 80,977 | (7,572 | ) | 153,394 | 148,733 | 4,661 | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 36,797 | 35,936 | 38,631 | 45,805 | 44,004 | (7,207 | ) | 72,733 | 80,447 | (7,714 | ) | |||||||||||||||||||||||||||
Interest credited | (291 | ) | 4,113 | 4,217 | 5,540 | 2,966 | (3,257 | ) | 3,822 | 3,374 | 448 | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 454 | 289 | (220 | ) | (304 | ) | 723 | (269 | ) | 743 | 530 | 213 | ||||||||||||||||||||||||||
Other operating expenses | 7,540 | 7,733 | 8,077 | 4,925 | 5,815 | 1,725 | 15,273 | 11,489 | 3,784 | |||||||||||||||||||||||||||||
Total benefits and expenses | 44,500 | 48,071 | 50,705 | 55,966 | 53,508 | (9,008 | ) | 92,571 | 95,840 | (3,269 | ) | |||||||||||||||||||||||||||
Income before income taxes | $ | 28,905 | $ | 31,918 | $ | 41,328 | $ | 43,786 | $ | 27,469 | $ | 1,436 | $ | 60,823 | $ | 52,893 | $ | 7,930 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (4,378 | ) | $ | (6,169 | ) | $ | (9,059 | ) | $ | (8,262 | ) | $ | (3,127 | ) | $ | (1,251 | ) | $ | (10,547 | ) | $ | (5,149 | ) | $ | (5,398 | ) | |||||||||||
Income before income taxes | $ | (3,327 | ) | $ | (4,730 | ) | $ | (9,274 | ) | $ | (6,193 | ) | $ | (1,991 | ) | $ | (1,336 | ) | $ | (8,057 | ) | $ | (3,915 | ) | $ | (4,142 | ) | |||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Europe, Middle East and Africa Financial Solutions operations includes asset intensive, financial reinsurance, capital motivated and longevity closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 18 | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Financial Solutions (1) Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2016 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 38,520 | $ | 41,995 | $ | 54,163 | $ | 47,018 | $ | 43,484 | $ | (4,964 | ) | $ | 80,515 | $ | 79,090 | $ | 1,425 | |||||||||||||||||||
Investment income, net of related expenses | 28,320 | 25,568 | 25,777 | 27,647 | 30,451 | (2,131 | ) | 53,888 | 58,727 | (4,839 | ) | |||||||||||||||||||||||||||
Other revenue | 4,482 | 3,870 | 3,276 | 9,706 | 2,735 | 1,747 | 8,352 | 6,388 | 1,964 | |||||||||||||||||||||||||||||
Total revenues | 71,322 | 71,433 | 83,216 | 84,371 | 76,670 | (5,348 | ) | 142,755 | 144,205 | (1,450 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 36,797 | 35,936 | 38,631 | 45,805 | 44,004 | (7,207 | ) | 72,733 | 80,447 | (7,714 | ) | |||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 454 | 289 | (220 | ) | (304 | ) | 723 | (269 | ) | 743 | 530 | 213 | ||||||||||||||||||||||||||
Other operating expenses | 7,540 | 7,733 | 8,077 | 4,925 | 5,815 | 1,725 | 15,273 | 11,489 | 3,784 | |||||||||||||||||||||||||||||
Total benefits and expenses | 44,791 | 43,958 | 46,488 | 50,426 | 50,542 | (5,751 | ) | 88,749 | 92,466 | (3,717 | ) | |||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 26,531 | $ | 27,475 | $ | 36,728 | $ | 33,945 | $ | 26,128 | $ | 403 | $ | 54,006 | $ | 51,739 | $ | 2,267 | ||||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (4,378 | ) | $ | (6,169 | ) | $ | (9,059 | ) | $ | (8,262 | ) | $ | (3,127 | ) | $ | (1,251 | ) | $ | (10,547 | ) | $ | (5,149 | ) | $ | (5,398 | ) | |||||||||||
Adjusted operating income before income taxes | $ | (3,043 | ) | $ | (4,006 | ) | $ | (8,168 | ) | $ | (4,742 | ) | $ | (1,819 | ) | $ | (1,224 | ) | $ | (7,049 | ) | $ | (3,797 | ) | $ | (3,252 | ) | |||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Europe, Middle East and Africa Financial Solutions operations includes asset intensive, financial reinsurance, capital motivated and longevity closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 19 | |
Reinsurance Group of America, Incorporated Asia Pacific Traditional GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 537,352 | $ | 483,307 | $ | 448,283 | $ | 404,451 | $ | 454,629 | $ | 82,723 | $ | 1,020,659 | $ | 828,771 | $ | 191,888 | ||||||||||||||||||||
Investment income, net of related expenses | 22,345 | 21,902 | 21,448 | 21,273 | 20,461 | 1,884 | 44,247 | 40,328 | 3,919 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | — | — | — | — | — | — | — | 14 | (14 | ) | ||||||||||||||||||||||||||||
Other revenue | 1,832 | 21 | 2,002 | 1,923 | 2,481 | (649 | ) | 1,853 | 2,657 | (804 | ) | |||||||||||||||||||||||||||
Total revenues | 561,529 | 505,230 | 471,733 | 427,647 | 477,571 | 83,958 | 1,066,759 | 871,770 | 194,989 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 423,294 | 355,439 | 368,091 | 365,115 | 338,447 | 84,847 | 778,733 | 612,745 | 165,988 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 51,259 | 72,857 | 46,604 | 4,157 | 67,908 | (16,649 | ) | 124,116 | 112,275 | 11,841 | ||||||||||||||||||||||||||||
Other operating expenses | 33,654 | 35,246 | 38,574 | 38,553 | 36,734 | (3,080 | ) | 68,900 | 71,108 | (2,208 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 508,207 | 463,542 | 453,269 | 407,825 | 443,089 | 65,118 | 971,749 | 796,128 | 175,621 | |||||||||||||||||||||||||||||
Income before income taxes | $ | 53,322 | $ | 41,688 | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 18,840 | $ | 95,010 | $ | 75,642 | $ | 19,368 | ||||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 78.8 | % | 73.5 | % | 82.1 | % | 90.3 | % | 74.4 | % | 4.4 | % | 76.3 | % | 73.9 | % | 2.4 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 9.5 | % | 15.1 | % | 10.4 | % | 1.0 | % | 14.9 | % | (5.4 | )% | 12.2 | % | 13.5 | % | (1.3 | )% | ||||||||||||||||||||
Other operating expenses | 6.3 | % | 7.3 | % | 8.6 | % | 9.5 | % | 8.1 | % | (1.8 | )% | 6.8 | % | 8.6 | % | (1.8 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,321 | $ | 11,810 | $ | 12,575 | $ | 20,095 | $ | (7,741 | ) | $ | 9,062 | $ | 13,131 | $ | (29,368 | ) | $ | 42,499 | ||||||||||||||||||
Income before income taxes | $ | (261 | ) | $ | 851 | $ | 1,143 | $ | 331 | $ | 506 | $ | (767 | ) | $ | 590 | $ | (2,229 | ) | $ | 2,819 | |||||||||||||||||
Critical illness net premiums | $ | 174,304 | $ | 141,883 | $ | 85,931 | $ | 100,641 | $ | 113,297 | $ | 61,007 | $ | 316,187 | $ | 211,686 | $ | 104,501 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 20 | |
Reinsurance Group of America, Incorporated Asia Pacific Traditional Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 537,352 | $ | 483,307 | $ | 448,283 | $ | 404,451 | $ | 454,629 | $ | 82,723 | $ | 1,020,659 | $ | 828,771 | $ | 191,888 | ||||||||||||||||||||
Investment income, net of related expenses | 22,345 | 21,902 | 21,448 | 21,273 | 20,461 | 1,884 | 44,247 | 40,328 | 3,919 | |||||||||||||||||||||||||||||
Investment related losses, net | — | — | — | — | — | — | — | (2 | ) | 2 | ||||||||||||||||||||||||||||
Other revenue | 1,832 | 21 | 2,002 | 1,923 | 2,481 | (649 | ) | 1,853 | 2,657 | (804 | ) | |||||||||||||||||||||||||||
Total revenues | 561,529 | 505,230 | 471,733 | 427,647 | 477,571 | 83,958 | 1,066,759 | 871,754 | 195,005 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 423,294 | 355,439 | 368,091 | 365,115 | 338,447 | 84,847 | 778,733 | 612,745 | 165,988 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 51,259 | 72,857 | 46,604 | 4,157 | 67,908 | (16,649 | ) | 124,116 | 112,275 | 11,841 | ||||||||||||||||||||||||||||
Other operating expenses | 33,654 | 35,246 | 38,574 | 38,553 | 36,734 | (3,080 | ) | 68,900 | 71,108 | (2,208 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 508,207 | 463,542 | 453,269 | 407,825 | 443,089 | 65,118 | 971,749 | 796,128 | 175,621 | |||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 53,322 | $ | 41,688 | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 18,840 | $ | 95,010 | $ | 75,626 | $ | 19,384 | ||||||||||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 78.8 | % | 73.5 | % | 82.1 | % | 90.3 | % | 74.4 | % | 4.4 | % | 76.3 | % | 73.9 | % | 2.4 | % | ||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 9.5 | % | 15.1 | % | 10.4 | % | 1.0 | % | 14.9 | % | (5.4 | )% | 12.2 | % | 13.5 | % | (1.3 | )% | ||||||||||||||||||||
Other operating expenses | 6.3 | % | 7.3 | % | 8.6 | % | 9.5 | % | 8.1 | % | (1.8 | )% | 6.8 | % | 8.6 | % | (1.8 | )% | ||||||||||||||||||||
Foreign currency effect on (1): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 1,321 | $ | 11,810 | $ | 12,575 | $ | 20,095 | $ | (7,741 | ) | $ | 9,062 | $ | 13,131 | $ | (29,368 | ) | $ | 42,499 | ||||||||||||||||||
Adjusted operating income before income taxes | $ | (261 | ) | $ | 851 | $ | 1,144 | $ | 331 | $ | 506 | $ | (767 | ) | $ | 590 | $ | (2,242 | ) | $ | 2,832 | |||||||||||||||||
Critical illness net premiums | $ | 174,304 | $ | 141,883 | $ | 85,931 | $ | 100,641 | $ | 113,297 | $ | 61,007 | $ | 316,187 | $ | 211,686 | $ | 104,501 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 21 | |
Reinsurance Group of America, Incorporated Asia Pacific Financial Solutions (1) GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 549 | $ | 1,526 | $ | 492 | $ | 743 | $ | (1,493 | ) | $ | 2,042 | $ | 2,075 | $ | 4,193 | $ | (2,118 | ) | ||||||||||||||||||
Investment income, net of related expenses | 8,570 | 5,536 | 5,562 | 5,827 | 5,885 | 2,685 | 14,106 | 12,259 | 1,847 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 3,582 | 7,185 | (4,886 | ) | 6,108 | 6,527 | (2,945 | ) | 10,767 | 8,214 | 2,553 | |||||||||||||||||||||||||||
Other revenue | 5,283 | 6,205 | 6,061 | 6,359 | 6,126 | (843 | ) | 11,488 | 12,450 | (962 | ) | |||||||||||||||||||||||||||
Total revenues | 17,984 | 20,452 | 7,229 | 19,037 | 17,045 | 939 | 38,436 | 37,116 | 1,320 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,565 | 6,495 | 9,693 | 3,777 | 8,237 | (6,672 | ) | 8,060 | 11,710 | (3,650 | ) | |||||||||||||||||||||||||||
Interest credited | 5,572 | 2,997 | 3,322 | 3,308 | 3,136 | 2,436 | 8,569 | 6,166 | 2,403 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1,541 | 1,917 | 1,635 | 1,482 | 1,667 | (126 | ) | 3,458 | 2,954 | 504 | ||||||||||||||||||||||||||||
Other operating expenses | 3,929 | 3,171 | 4,545 | 2,921 | 4,078 | (149 | ) | 7,100 | 7,806 | (706 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 12,607 | 14,580 | 19,195 | 11,488 | 17,118 | (4,511 | ) | 27,187 | 28,636 | (1,449 | ) | |||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 5,377 | $ | 5,872 | $ | (11,966 | ) | $ | 7,549 | $ | (73 | ) | $ | 5,450 | $ | 11,249 | $ | 8,480 | $ | 2,769 | ||||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (16 | ) | $ | 17 | $ | 71 | $ | 60 | $ | (225 | ) | $ | 209 | $ | 1 | $ | 18 | $ | (17 | ) | |||||||||||||||||
Income (loss) before income taxes | $ | (114 | ) | $ | 77 | $ | (464 | ) | $ | 917 | $ | 233 | $ | (347 | ) | $ | (37 | ) | $ | 1,011 | $ | (1,048 | ) | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Asia Pacific Financial Solutions operations includes asset intensive, financial reinsurance, and disabled life closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 22 | |
Reinsurance Group of America, Incorporated Asia Pacific Financial Solutions (1) Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 549 | $ | 1,526 | $ | 492 | $ | 743 | $ | (1,493 | ) | $ | 2,042 | $ | 2,075 | $ | 4,193 | $ | (2,118 | ) | ||||||||||||||||||
Investment income, net of related expenses | 8,570 | 5,536 | 5,562 | 5,827 | 5,885 | 2,685 | 14,106 | 12,259 | 1,847 | |||||||||||||||||||||||||||||
Investment related gains, net | 832 | 861 | 960 | 825 | 602 | 230 | 1,693 | 1,178 | 515 | |||||||||||||||||||||||||||||
Other revenue | 5,283 | 6,205 | 6,061 | 6,359 | 6,126 | (843 | ) | 11,488 | 12,450 | (962 | ) | |||||||||||||||||||||||||||
Total revenues | 15,234 | 14,128 | 13,075 | 13,754 | 11,120 | 4,114 | 29,362 | 30,080 | (718 | ) | ||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | 1,565 | 6,495 | 9,693 | 3,777 | 8,237 | (6,672 | ) | 8,060 | 11,710 | (3,650 | ) | |||||||||||||||||||||||||||
Interest credited | 5,572 | 2,997 | 3,322 | 3,308 | 3,136 | 2,436 | 8,569 | 6,166 | 2,403 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance expenses | 1,541 | 1,917 | 1,635 | 1,482 | 1,667 | (126 | ) | 3,458 | 2,954 | 504 | ||||||||||||||||||||||||||||
Other operating expenses | 3,929 | 3,171 | 4,545 | 2,921 | 4,078 | (149 | ) | 7,100 | 7,806 | (706 | ) | |||||||||||||||||||||||||||
Total benefits and expenses | 12,607 | 14,580 | 19,195 | 11,488 | 17,118 | (4,511 | ) | 27,187 | 28,636 | (1,449 | ) | |||||||||||||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | 2,627 | $ | (452 | ) | $ | (6,120 | ) | $ | 2,266 | $ | (5,998 | ) | $ | 8,625 | $ | 2,175 | $ | 1,444 | $ | 731 | |||||||||||||||||
Foreign currency effect on (2): | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | (16 | ) | $ | 17 | $ | 71 | $ | 60 | $ | (225 | ) | $ | 209 | $ | 1 | $ | 18 | $ | (17 | ) | |||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | (63 | ) | $ | (102 | ) | $ | 100 | $ | 451 | $ | (113 | ) | $ | 50 | $ | (165 | ) | $ | 210 | $ | (375 | ) | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Asia Pacific Financial Solutions operations includes asset intensive, financial reinsurance, and disabled life closed block business. | ||||||||||||||||||||||||||||||||||||||
(2) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 23 | |
Reinsurance Group of America, Incorporated Corporate and Other GAAP Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 42 | $ | 44 | $ | 53 | $ | 72 | $ | 108 | $ | (66 | ) | $ | 86 | $ | 217 | $ | (131 | ) | ||||||||||||||||||
Investment income, net of related expenses | 36,305 | 31,163 | 35,468 | 33,478 | 25,190 | 11,115 | 67,468 | 48,111 | 19,357 | |||||||||||||||||||||||||||||
Investment related gains (losses), net | 15,685 | (14,823 | ) | (461 | ) | 12,258 | 32,036 | (16,351 | ) | 862 | 39,459 | (38,597 | ) | |||||||||||||||||||||||||
Other revenue | 2,456 | 5,168 | 706 | 4,893 | 4,653 | (2,197 | ) | 7,624 | 6,702 | 922 | ||||||||||||||||||||||||||||
Total revenues | 54,488 | 21,552 | 35,766 | 50,701 | 61,987 | (7,499 | ) | 76,040 | 94,489 | (18,449 | ) | |||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | (13 | ) | 27 | (15 | ) | (15 | ) | (6 | ) | (7 | ) | 14 | 21 | (7 | ) | |||||||||||||||||||||||
Interest credited | 1,497 | 1,124 | 881 | 622 | 459 | 1,038 | 2,621 | 966 | 1,655 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (26,779 | ) | (27,067 | ) | (26,740 | ) | (24,565 | ) | (25,149 | ) | (1,630 | ) | (53,846 | ) | (48,961 | ) | (4,885 | ) | ||||||||||||||||||||
Other operating expenses | 38,141 | 40,372 | 41,187 | 32,414 | 40,975 | (2,834 | ) | 78,513 | 80,953 | (2,440 | ) | |||||||||||||||||||||||||||
Interest expense | 29,352 | 42,402 | 41,422 | 43,063 | 20,331 | 9,021 | 71,754 | 53,138 | 18,616 | |||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,773 | 6,770 | 6,431 | 6,484 | 6,587 | 186 | 13,543 | 12,912 | 631 | |||||||||||||||||||||||||||||
Total benefits and expenses | 48,971 | 63,628 | 63,166 | 58,003 | 43,197 | 5,774 | 112,599 | 99,029 | 13,570 | |||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 5,517 | $ | (42,076 | ) | $ | (27,400 | ) | $ | (7,302 | ) | $ | 18,790 | $ | (13,273 | ) | $ | (36,559 | ) | $ | (4,540 | ) | $ | (32,019 | ) | |||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (734 | ) | $ | 448 | $ | 401 | $ | 294 | $ | (1,941 | ) | $ | 1,207 | $ | (286 | ) | $ | (3,350 | ) | $ | 3,064 | ||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 24 | |
Reinsurance Group of America, Incorporated Corporate and Other Adjusted Operating Income Statements (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||
Net premiums | $ | 42 | $ | 44 | $ | 53 | $ | 72 | $ | 108 | $ | (66 | ) | $ | 86 | $ | 217 | $ | (131 | ) | ||||||||||||||||||
Investment income, net of related expenses | 36,305 | 31,163 | 35,468 | 33,478 | 25,190 | 11,115 | 67,468 | 48,111 | 19,357 | |||||||||||||||||||||||||||||
Investment related gains, net | 695 | 677 | 659 | 568 | 496 | 199 | 1,372 | 989 | 383 | |||||||||||||||||||||||||||||
Other revenue | 2,430 | 5,142 | 681 | 4,870 | 4,636 | (2,206 | ) | 7,572 | 6,671 | 901 | ||||||||||||||||||||||||||||
Total revenues | 39,472 | 37,026 | 36,861 | 38,988 | 30,430 | 9,042 | 76,498 | 55,988 | 20,510 | |||||||||||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||||||||||||
Claims and other policy benefits | (13 | ) | 27 | (15 | ) | (15 | ) | (6 | ) | (7 | ) | 14 | 21 | (7 | ) | |||||||||||||||||||||||
Interest credited | 1,497 | 1,124 | 881 | 622 | 459 | 1,038 | 2,621 | 966 | 1,655 | |||||||||||||||||||||||||||||
Policy acquisition costs and other insurance income | (26,779 | ) | (27,067 | ) | (26,740 | ) | (24,565 | ) | (25,149 | ) | (1,630 | ) | (53,846 | ) | (48,961 | ) | (4,885 | ) | ||||||||||||||||||||
Other operating expenses | 38,141 | 40,372 | 41,187 | 32,414 | 40,975 | (2,834 | ) | 78,513 | 80,953 | (2,440 | ) | |||||||||||||||||||||||||||
Interest expense | 29,352 | 42,402 | 41,422 | 43,063 | 20,331 | 9,021 | 71,754 | 53,138 | 18,616 | |||||||||||||||||||||||||||||
Collateral finance and securitization expense | 6,773 | 6,770 | 6,431 | 6,484 | 6,587 | 186 | 13,543 | 12,912 | 631 | |||||||||||||||||||||||||||||
Total benefits and expenses | 48,971 | 63,628 | 63,166 | 58,003 | 43,197 | 5,774 | 112,599 | 99,029 | 13,570 | |||||||||||||||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | (9,499 | ) | $ | (26,602 | ) | $ | (26,305 | ) | $ | (19,015 | ) | $ | (12,767 | ) | $ | 3,268 | $ | (36,101 | ) | $ | (43,041 | ) | $ | 6,940 | |||||||||||||
Foreign currency effect (1): | ||||||||||||||||||||||||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | (667 | ) | $ | 498 | $ | 367 | $ | 513 | $ | (442 | ) | $ | (225 | ) | $ | (169 | ) | $ | (1,310 | ) | $ | 1,141 | |||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
(1) Compared to comparable prior year period. | ||||||||||||||||||||||||||||||||||||||
| Page 25 | |
Reinsurance Group of America, Incorporated Summary of Segment GAAP Income (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | Change | |||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 90,594 | $ | 29,960 | $ | 131,492 | $ | 77,081 | $ | 111,430 | $ | (20,836 | ) | $ | 120,554 | $ | 162,528 | $ | (41,974 | ) | ||||||||||||||||||
Financial Solutions: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 87,002 | 85,770 | 72,261 | 88,732 | 93,979 | (6,977 | ) | 172,772 | 63,149 | 109,623 | ||||||||||||||||||||||||||||
Financial Reinsurance | 19,983 | 17,816 | 14,447 | 13,982 | 14,875 | 5,108 | 37,799 | 30,809 | 6,990 | |||||||||||||||||||||||||||||
Total U.S. and Latin America | 197,579 | 133,546 | 218,200 | 179,795 | 220,284 | (22,705 | ) | 331,125 | 256,486 | 74,639 | ||||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | 32,836 | 19,328 | 37,026 | 34,275 | 43,309 | (10,473 | ) | 52,164 | 63,404 | (11,240 | ) | |||||||||||||||||||||||||||
Canada Financial Solutions | 4,425 | 3,592 | 4,065 | 1,160 | 2,128 | 2,297 | 8,017 | 2,720 | 5,297 | |||||||||||||||||||||||||||||
Total Canada | 37,261 | 22,920 | 41,091 | 35,435 | 45,437 | (8,176 | ) | 60,181 | 66,124 | (5,943 | ) | |||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 11,354 | 13,976 | 15,826 | 8,515 | 6,834 | 4,520 | 25,330 | 5,718 | 19,612 | |||||||||||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions | 28,905 | 31,918 | 41,328 | 43,786 | 27,469 | 1,436 | 60,823 | 52,893 | 7,930 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 40,259 | 45,894 | 57,154 | 52,301 | 34,303 | 5,956 | 86,153 | 58,611 | 27,542 | |||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 53,322 | 41,688 | 18,464 | 19,822 | 34,482 | 18,840 | 95,010 | 75,642 | 19,368 | |||||||||||||||||||||||||||||
Asia Pacific Financial Solutions | 5,377 | 5,872 | (11,966 | ) | 7,549 | (73 | ) | 5,450 | 11,249 | 8,480 | 2,769 | |||||||||||||||||||||||||||
Total Asia Pacific | 58,699 | 47,560 | 6,498 | 27,371 | 34,409 | 24,290 | 106,259 | 84,122 | 22,137 | |||||||||||||||||||||||||||||
Corporate and Other | 5,517 | (42,076 | ) | (27,400 | ) | (7,302 | ) | 18,790 | (13,273 | ) | (36,559 | ) | (4,540 | ) | (32,019 | ) | ||||||||||||||||||||||
Consolidated income before income taxes | $ | 339,315 | $ | 207,844 | $ | 295,543 | $ | 287,600 | $ | 353,223 | $ | (13,908 | ) | $ | 547,159 | $ | 460,803 | $ | 86,356 | |||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 26 | |
Reinsurance Group of America, Incorporated Summary of Segment Adjusted Operating Income USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | Change | |||||||||||||||||||||||||||||||
U.S. and Latin America: | ||||||||||||||||||||||||||||||||||||||
Traditional | $ | 91,247 | $ | 27,996 | $ | 129,345 | $ | 80,475 | $ | 112,312 | $ | (21,065 | ) | $ | 119,243 | $ | 165,510 | $ | (46,267 | ) | ||||||||||||||||||
Financial Solutions: | ||||||||||||||||||||||||||||||||||||||
Asset Intensive | 49,891 | 51,637 | 46,698 | 58,693 | 54,323 | (4,432 | ) | 101,528 | 99,591 | 1,937 | ||||||||||||||||||||||||||||
Financial Reinsurance | 19,983 | 17,816 | 14,447 | 13,982 | 14,875 | 5,108 | 37,799 | 30,809 | 6,990 | |||||||||||||||||||||||||||||
Total U.S. and Latin America | 161,121 | 97,449 | 190,490 | 153,150 | 181,510 | (20,389 | ) | 258,570 | 295,910 | (37,340 | ) | |||||||||||||||||||||||||||
Canada: | ||||||||||||||||||||||||||||||||||||||
Canada Traditional | 31,188 | 16,766 | 34,754 | 30,624 | 40,907 | (9,719 | ) | 47,954 | 60,271 | (12,317 | ) | |||||||||||||||||||||||||||
Canada Financial Solutions | 4,425 | 3,592 | 4,065 | 1,160 | 2,128 | 2,297 | 8,017 | 2,720 | 5,297 | |||||||||||||||||||||||||||||
Total Canada | 35,613 | 20,358 | 38,819 | 31,784 | 43,035 | (7,422 | ) | 55,971 | 62,991 | (7,020 | ) | |||||||||||||||||||||||||||
Europe, Middle East and Africa: | ||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa Traditional | 11,354 | 13,969 | 15,826 | 8,515 | 6,834 | 4,520 | 25,323 | 5,713 | 19,610 | |||||||||||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions | 26,531 | 27,475 | 36,728 | 33,945 | 26,128 | 403 | 54,006 | 51,739 | 2,267 | |||||||||||||||||||||||||||||
Total Europe, Middle East and Africa | 37,885 | 41,444 | 52,554 | 42,460 | 32,962 | 4,923 | 79,329 | 57,452 | 21,877 | |||||||||||||||||||||||||||||
Asia Pacific: | ||||||||||||||||||||||||||||||||||||||
Asia Pacific Traditional | 53,322 | 41,688 | 18,464 | 19,822 | 34,482 | 18,840 | 95,010 | 75,626 | 19,384 | |||||||||||||||||||||||||||||
Asia Pacific Financial Solutions | 2,627 | (452 | ) | (6,120 | ) | 2,266 | (5,998 | ) | 8,625 | 2,175 | 1,444 | 731 | ||||||||||||||||||||||||||
Total Asia Pacific | 55,949 | 41,236 | 12,344 | 22,088 | 28,484 | 27,465 | 97,185 | 77,070 | 20,115 | |||||||||||||||||||||||||||||
Corporate and Other | (9,499 | ) | (26,602 | ) | (26,305 | ) | (19,015 | ) | (12,767 | ) | 3,268 | (36,101 | ) | (43,041 | ) | 6,940 | ||||||||||||||||||||||
Consolidated adjusted operating income before income taxes | $ | 281,069 | $ | 173,885 | $ | 267,902 | $ | 230,467 | $ | 273,224 | $ | 7,845 | $ | 454,954 | $ | 450,382 | $ | 4,572 | ||||||||||||||||||||
See appendix for reconciliation of GAAP income before income taxes to adjusted operating income before income taxes. | ||||||||||||||||||||||||||||||||||||||
| Page 27 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Cash and Invested Assets | ||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||||||
Fixed maturity securities, available-for-sale | $ | 36,345,426 | $ | 32,694,793 | $ | 32,093,625 | $ | 33,536,419 | $ | 33,160,976 | ||||||||||
Mortgage loans on real estate | 4,104,487 | 3,871,309 | 3,775,522 | 3,607,700 | 3,377,039 | |||||||||||||||
Policy loans | 1,406,774 | 1,402,940 | 1,427,602 | 1,414,963 | 1,445,410 | |||||||||||||||
Funds withheld at interest | 5,968,856 | 5,943,450 | 5,875,919 | 5,922,656 | 5,899,289 | |||||||||||||||
Short-term investments | 123,308 | 54,288 | 76,710 | 126,702 | 195,979 | |||||||||||||||
Other invested assets | 1,498,370 | 1,429,175 | 1,591,940 | 1,777,065 | 1,682,143 | |||||||||||||||
Cash and cash equivalents | 1,123,350 | 1,178,114 | 1,200,718 | 1,379,693 | 1,034,329 | |||||||||||||||
Total cash and invested assets | $ | 50,570,571 | $ | 46,574,069 | $ | 46,042,036 | $ | 47,765,198 | $ | 46,795,165 | ||||||||||
Investment Income and Yield Summary | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | Change | |||||||||||||||||||||||||||||||
Average invested assets at amortized cost (1) | $ | 25,172,367 | $ | 25,212,377 | $ | 24,621,939 | $ | 24,128,430 | $ | 23,216,459 | $ | 1,955,908 | $ | 25,052,849 | $ | 22,669,219 | $ | 2,383,630 | ||||||||||||||||||||
Net investment income (1) | $ | 284,884 | $ | 273,208 | $ | 283,484 | $ | 263,111 | $ | 268,747 | $ | 16,137 | $ | 558,092 | $ | 514,046 | $ | 44,046 | ||||||||||||||||||||
Annualized investment yield (ratio of net investment income to average invested assets at amortized cost) (1) | 4.60 | % | 4.41 | % | 4.69 | % | 4.43 | % | 4.71 | % | -0.11 | % | 4.50 | % | 4.59 | % | -0.09 | % | ||||||||||||||||||||
(1) Excludes spread-related business (e.g. coinsurance of annuities). | ||||||||||||||||||||||||||||||||||||||
| Page 28 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Fixed Maturity and Equity Securities (Excludes Funds Withheld Portfolios) | |||||||||||||||||||||||
June 30, 2017 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 21,252,180 | $ | 1,189,750 | $ | 100,269 | $ | 22,341,661 | 61.5 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,713,972 | 1,296,242 | 2,460 | 4,007,754 | 11.0 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 1,505,474 | 42,619 | 8,794 | 1,539,299 | 4.2 | % | — | ||||||||||||||||
Asset-backed securities | 1,630,499 | 17,266 | 5,924 | 1,641,841 | 4.5 | % | 275 | ||||||||||||||||
Commercial mortgage-backed securities | 1,558,035 | 28,928 | 4,935 | 1,582,028 | 4.4 | % | — | ||||||||||||||||
U.S. government and agencies | 1,738,419 | 15,193 | 32,048 | 1,721,564 | 4.7 | % | — | ||||||||||||||||
State and political subdivisions | 599,622 | 47,564 | 8,216 | 638,970 | 1.8 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,740,133 | 141,973 | 9,797 | 2,872,309 | 7.9 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 33,738,334 | $ | 2,779,535 | $ | 172,443 | $ | 36,345,426 | 100.0 | % | $ | 275 | |||||||||||
Non-redeemable preferred stock | $ | 34,545 | $ | 435 | $ | 3,021 | $ | 31,959 | 30.6 | % | |||||||||||||
Other equity securities | 75,413 | 522 | 3,617 | 72,318 | 69.4 | % | |||||||||||||||||
Total equity securities | $ | 109,958 | $ | 957 | $ | 6,638 | $ | 104,277 | 100.0 | % | |||||||||||||
December 31, 2016 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | % of Total | Other-than- temporary Impairment in AOCI | ||||||||||||||||||
Available-for-sale: | |||||||||||||||||||||||
Corporate securities | $ | 18,924,711 | $ | 911,618 | $ | 217,245 | $ | 19,619,084 | 61.1 | % | $ | — | |||||||||||
Canadian and Canadian provincial governments | 2,561,605 | 1,085,982 | 3,541 | 3,644,046 | 11.4 | % | — | ||||||||||||||||
Residential mortgage-backed securities | 1,258,039 | 33,917 | 13,380 | 1,278,576 | 4.0 | % | (375 | ) | |||||||||||||||
Asset-backed securities | 1,443,822 | 9,350 | 23,828 | 1,429,344 | 4.5 | % | 275 | ||||||||||||||||
Commercial mortgage-backed securities | 1,342,440 | 28,973 | 7,759 | 1,363,654 | 4.2 | % | — | ||||||||||||||||
U.S. government and agencies | 1,518,702 | 12,644 | 63,044 | 1,468,302 | 4.6 | % | — | ||||||||||||||||
State and political subdivisions | 566,761 | 37,499 | 12,464 | 591,796 | 1.8 | % | — | ||||||||||||||||
Other foreign government, supranational, and foreign | |||||||||||||||||||||||
government-sponsored enterprises | 2,595,707 | 123,054 | 19,938 | 2,698,823 | 8.4 | % | — | ||||||||||||||||
Total fixed maturity securities | $ | 30,211,787 | $ | 2,243,037 | $ | 361,199 | $ | 32,093,625 | 100.0 | % | $ | (100 | ) | ||||||||||
Non-redeemable preferred stock | $ | 55,812 | $ | 1,648 | $ | 6,337 | $ | 51,123 | 18.6 | % | |||||||||||||
Other equity securities | 229,767 | 1,792 | 7,321 | 224,238 | 81.4 | % | |||||||||||||||||
Total equity securities | $ | 285,579 | $ | 3,440 | $ | 13,658 | $ | 275,361 | 100.0 | % | |||||||||||||
| Page 29 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Corporate Fixed Maturity Securities by Sector (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||||
June 30, 2017 | December 31, 2016 | |||||||||||||||||||||||||
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 | $ | 4,490,743 | $ | 4,666,511 | 20.9 | % | A- | $ | 4,167,029 | $ | 4,255,932 | 21.9 | % | A- | ||||||||||||
Brokerage/asset managers/exchanges | 475,563 | 499,152 | 2.2 | % | A | 403,014 | 413,699 | 2.1 | % | A | ||||||||||||||||
Finance companies | 202,414 | 210,408 | 0.9 | % | A- | 120,782 | 127,327 | 0.6 | % | A- | ||||||||||||||||
Insurance | 1,657,899 | 1,757,134 | 7.9 | % | A- | 1,314,077 | 1,353,008 | 6.9 | % | A- | ||||||||||||||||
REITs | 720,889 | 743,942 | 3.3 | % | BBB+ | 582,157 | 598,366 | 3.0 | % | BBB+ | ||||||||||||||||
Other finance | 193,974 | 200,048 | 0.9 | % | A | 138,140 | 140,636 | 0.7 | % | A- | ||||||||||||||||
Total financial institutions | $ | 7,741,482 | $ | 8,077,195 | 36.1 | % | $ | 6,725,199 | $ | 6,888,968 | 35.2 | % | ||||||||||||||
Industrials | ||||||||||||||||||||||||||
Basic | $ | 1,052,688 | $ | 1,101,534 | 4.9 | % | BBB | $ | 887,179 | $ | 923,839 | 4.7 | % | BBB | ||||||||||||
Capital goods | 1,175,327 | 1,208,440 | 5.4 | % | BBB+ | 998,749 | 1,027,098 | 5.2 | % | BBB+ | ||||||||||||||||
Communications | 1,966,949 | 2,083,968 | 9.3 | % | BBB | 1,841,904 | 1,928,261 | 9.8 | % | BBB | ||||||||||||||||
Consumer cyclical | 1,117,398 | 1,163,944 | 5.2 | % | A- | 1,081,091 | 1,116,933 | 5.7 | % | BBB+ | ||||||||||||||||
Consumer noncyclical | 2,232,184 | 2,370,558 | 10.8 | % | A- | 1,957,052 | 2,050,927 | 10.5 | % | A- | ||||||||||||||||
Energy | 1,895,256 | 2,001,766 | 9.0 | % | BBB+ | 1,867,072 | 1,941,301 | 9.9 | % | BBB+ | ||||||||||||||||
Technology | 713,307 | 738,451 | 3.3 | % | A | 644,474 | 660,200 | 3.4 | % | A | ||||||||||||||||
Transportation | 928,137 | 981,056 | 4.4 | % | A- | 854,681 | 887,911 | 4.5 | % | A- | ||||||||||||||||
Other industrial | 134,046 | 142,947 | 0.6 | % | A | 96,611 | 103,143 | 0.5 | % | A- | ||||||||||||||||
Total industrials | $ | 11,215,292 | $ | 11,792,664 | 52.9 | % | $ | 10,228,813 | $ | 10,639,613 | 54.2 | % | ||||||||||||||
Utilities | ||||||||||||||||||||||||||
Electric | $ | 1,722,247 | $ | 1,839,241 | 8.2 | % | A- | $ | 1,432,641 | $ | 1,498,919 | 7.6 | % | A- | ||||||||||||
Natural gas | 334,018 | 359,895 | 1.6 | % | A- | 316,447 | 338,253 | 1.7 | % | A- | ||||||||||||||||
Other utility | 239,141 | 272,666 | 1.2 | % | A- | 221,611 | 253,331 | 1.3 | % | A- | ||||||||||||||||
Total utilities | $ | 2,295,406 | $ | 2,471,802 | 11.0 | % | $ | 1,970,699 | $ | 2,090,503 | 10.6 | % | ||||||||||||||
Total | $ | 21,252,180 | $ | 22,341,661 | 100.0 | % | A- | $ | 18,924,711 | $ | 19,619,084 | 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 30 | |
Reinsurance Group of America, Incorporated
Investments
(USD thousands)
Ratings of Fixed Maturity Securities (Excludes Funds Withheld Portfolios) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 22,039,025 | $ | 24,093,110 | 66.4 | % | $ | 19,816,139 | $ | 21,521,758 | 65.8 | % | $ | 19,813,653 | $ | 21,369,081 | 66.5 | % | $ | 19,794,556 | $ | 22,594,066 | 67.3 | % | $ | 19,755,011 | $ | 22,392,311 | 67.5 | % | ||||||||||||||||||||||||||
2 | BBB | 10,097,673 | 10,626,154 | 29.2 | % | 9,159,294 | 9,571,666 | 29.3 | % | 8,834,469 | 9,162,483 | 28.5 | % | 8,660,225 | 9,296,652 | 27.7 | % | 8,679,819 | 9,130,971 | 27.5 | % | ||||||||||||||||||||||||||||||||||||
3 | BB | 1,140,073 | 1,167,968 | 3.2 | % | 1,079,371 | 1,109,172 | 3.4 | % | 944,839 | 955,735 | 3.0 | % | 1,010,694 | 1,027,001 | 3.1 | % | 1,012,092 | 1,018,629 | 3.1 | % | ||||||||||||||||||||||||||||||||||||
4 | B | 358,668 | 369,794 | 1.0 | % | 383,254 | 377,469 | 1.2 | % | 414,087 | 411,138 | 1.3 | % | 451,456 | 441,887 | 1.3 | % | 456,457 | 431,649 | 1.3 | % | ||||||||||||||||||||||||||||||||||||
5 | CCC | 94,473 | 79,662 | 0.2 | % | 91,245 | 105,749 | 0.3 | % | 187,744 | 177,481 | 0.6 | % | 157,857 | 151,182 | 0.5 | % | 143,675 | 135,927 | 0.4 | % | ||||||||||||||||||||||||||||||||||||
6 | In or near default | 8,422 | 8,738 | — | % | 11,264 | 8,979 | — | % | 16,995 | 17,707 | 0.1 | % | 23,108 | 25,631 | 0.1 | % | 29,830 | 51,489 | 0.2 | % | ||||||||||||||||||||||||||||||||||||
Total | $ | 33,738,334 | $ | 36,345,426 | 100.0 | % | $ | 30,540,567 | $ | 32,694,793 | 100.0 | % | $ | 30,211,787 | $ | 32,093,625 | 100.0 | % | $ | 30,097,896 | $ | 33,536,419 | 100.0 | % | $ | 30,076,884 | $ | 33,160,976 | 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 | ||||||||||||||||||||||||||||||||||||||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | ||||||||||||||||||||||||||||||||||||
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 | $ | 784,648 | $ | 813,463 | $ | 584,067 | $ | 608,066 | $ | 579,686 | $ | 602,549 | $ | 590,881 | $ | 642,041 | $ | 601,728 | $ | 659,526 | ||||||||||||||||||||
Non-agency | 720,826 | 725,836 | 697,104 | 695,811 | 678,353 | 676,027 | 656,796 | 669,651 | 623,990 | 633,252 | ||||||||||||||||||||||||||||||
Total residential mortgage-backed securities | 1,505,474 | 1,539,299 | 1,281,171 | 1,303,877 | 1,258,039 | 1,278,576 | 1,247,677 | 1,311,692 | 1,225,718 | 1,292,778 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,558,035 | 1,582,028 | 1,272,020 | 1,289,338 | 1,342,440 | 1,363,654 | 1,402,249 | 1,475,033 | 1,441,091 | 1,507,693 | ||||||||||||||||||||||||||||||
Asset-backed securities | 1,630,499 | 1,641,841 | 1,379,251 | 1,380,590 | 1,443,822 | 1,429,344 | 1,388,263 | 1,382,574 | 1,377,736 | 1,356,677 | ||||||||||||||||||||||||||||||
Total | $ | 4,694,008 | $ | 4,763,168 | $ | 3,932,442 | $ | 3,973,805 | $ | 4,044,301 | $ | 4,071,574 | $ | 4,038,189 | $ | 4,169,299 | $ | 4,044,545 | $ | 4,157,148 | ||||||||||||||||||||
| Page 31 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Gross Unrealized Losses Aging Fixed Maturity Securities | |||||||||||||||||||||||||||||||||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||||||||||||||||||||||
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% | $ | 147,319 | 82.4 | % | $ | 245,923 | 88.6 | % | $ | 328,691 | 87.7 | % | $ | 85,446 | 62.2 | % | $ | 148,844 | 74.9 | % | |||||||||||||||
20% or more for less than six months | 5,051 | 2.8 | % | 4,113 | 1.5 | % | 18,733 | 5.0 | % | 12,551 | 9.1 | % | 7,248 | 3.7 | % | ||||||||||||||||||||
20% or more for six months or greater | 20,073 | 11.2 | % | 21,164 | 7.6 | % | 13,775 | 3.7 | % | 32,286 | 23.5 | % | 34,078 | 17.2 | % | ||||||||||||||||||||
Total | $ | 172,443 | 96.4 | % | $ | 271,200 | 97.7 | % | $ | 361,199 | 96.4 | % | $ | 130,283 | 94.8 | % | $ | 190,170 | 95.8 | % | |||||||||||||||
Equity Securities | |||||||||||||||||||||||||||||||||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | |||||||||||||||||||||||||||||||
Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | Gross Unrealized Losses | % of Total | ||||||||||||||||||||||||||
Less than 20% | $ | 3,443 | 1.8 | % | $ | 5,717 | 2.1 | % | $ | 9,140 | 2.4 | % | $ | 2,588 | 1.9 | % | $ | 1,794 | 0.9 | % | |||||||||||||||
20% or more for less than six months | 2,542 | 1.4 | % | — | — | % | 705 | 0.2 | % | — | — | % | 1,685 | 0.8 | % | ||||||||||||||||||||
20% or more for six months or greater | 653 | 0.4 | % | 688 | 0.2 | % | 3,813 | 1.0 | % | 4,472 | 3.3 | % | 4,903 | 2.5 | % | ||||||||||||||||||||
Total | $ | 6,638 | 3.6 | % | $ | 6,405 | 2.3 | % | $ | 13,658 | 3.6 | % | $ | 7,060 | 5.2 | % | $ | 8,382 | 4.2 | % | |||||||||||||||
| Page 32 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Fixed Maturity and Equity Securities Below Amortized Cost (Excludes Funds Withheld Portfolios) | ||||||||||||||||||||||||
As of June 30, 2017 | ||||||||||||||||||||||||
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 | $ | 2,895,605 | $ | 46,389 | $ | 399,546 | $ | 23,252 | $ | 3,295,151 | $ | 69,641 | ||||||||||||
Canadian and Canadian provincial governments | 116,719 | 2,457 | — | — | 116,719 | 2,457 | ||||||||||||||||||
Residential mortgage-backed securities | 471,933 | 6,872 | 100,785 | 1,918 | 572,718 | 8,790 | ||||||||||||||||||
Asset-backed securities | 285,211 | 1,451 | 204,154 | 3,916 | 489,365 | 5,367 | ||||||||||||||||||
Commercial mortgage-backed securities | 352,867 | 4,897 | 2,195 | 38 | 355,062 | 4,935 | ||||||||||||||||||
U.S. government and agencies | 1,378,976 | 31,962 | 13,763 | 86 | 1,392,739 | 32,048 | ||||||||||||||||||
State and political subdivisions | 125,465 | 5,098 | 13,558 | 3,118 | 139,023 | 8,216 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 440,670 | 7,189 | 29,234 | 1,616 | 469,904 | 8,805 | ||||||||||||||||||
Total investment grade securities | $ | 6,067,446 | $ | 106,315 | $ | 763,235 | $ | 33,944 | $ | 6,830,681 | $ | 140,259 | ||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 255,991 | $ | 4,547 | $ | 93,562 | $ | 26,081 | $ | 349,553 | $ | 30,628 | ||||||||||||
Canadian and Canadian provincial governments | 1,247 | 3 | — | — | 1,247 | 3 | ||||||||||||||||||
Residential mortgage-backed securities | — | — | 107 | 4 | 107 | 4 | ||||||||||||||||||
Asset-backed securities | — | — | 7,295 | 557 | 7,295 | 557 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 38,069 | 287 | 17,606 | 705 | 55,675 | 992 | ||||||||||||||||||
Total below investment grade securities | $ | 295,307 | $ | 4,837 | $ | 118,570 | $ | 27,347 | $ | 413,877 | $ | 32,184 | ||||||||||||
Total fixed maturity securities | $ | 6,362,753 | $ | 111,152 | $ | 881,805 | $ | 61,291 | $ | 7,244,558 | $ | 172,443 | ||||||||||||
Equity securities: | ||||||||||||||||||||||||
Non-redeemable preferred stock | $ | — | $ | — | $ | 24,807 | $ | 3,021 | $ | 24,807 | $ | 3,021 | ||||||||||||
Other equity securities | 64,990 | 3,617 | — | — | 64,990 | 3,617 | ||||||||||||||||||
Total equity securities | $ | 64,990 | $ | 3,617 | $ | 24,807 | $ | 3,021 | $ | 89,797 | $ | 6,638 | ||||||||||||
As of December 31, 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 | $ | 4,661,706 | $ | 124,444 | $ | 549,273 | $ | 43,282 | $ | 5,210,979 | $ | 167,726 | ||||||||||||
Canadian and Canadian provincial governments | 101,578 | 3,541 | — | — | 101,578 | 3,541 | ||||||||||||||||||
Residential mortgage-backed securities | 490,473 | 9,733 | 112,216 | 3,635 | 602,689 | 13,368 | ||||||||||||||||||
Asset-backed securities | 563,259 | 12,010 | 257,166 | 9,653 | 820,425 | 21,663 | ||||||||||||||||||
Commercial mortgage-backed securities | 368,465 | 6,858 | 10,853 | 166 | 379,318 | 7,024 | ||||||||||||||||||
U.S. government and agencies | 1,056,101 | 63,044 | — | — | 1,056,101 | 63,044 | ||||||||||||||||||
State and political subdivisions | 187,194 | 9,396 | 13,635 | 3,068 | 200,829 | 12,464 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 524,236 | 13,372 | 51,097 | 2,981 | 575,333 | 16,353 | ||||||||||||||||||
Total investment grade securities | $ | 7,953,012 | $ | 242,398 | $ | 994,240 | $ | 62,785 | $ | 8,947,252 | $ | 305,183 | ||||||||||||
Below investment grade securities: | ||||||||||||||||||||||||
Corporate securities | $ | 330,757 | $ | 7,914 | $ | 163,152 | $ | 41,605 | $ | 493,909 | $ | 49,519 | ||||||||||||
Residential mortgage-backed securities | — | — | 412 | 12 | 412 | 12 | ||||||||||||||||||
Asset-backed securities | 5,904 | 700 | 12,581 | 1,465 | 18,485 | 2,165 | ||||||||||||||||||
Commercial mortgage-backed securities | 5,815 | 735 | — | — | 5,815 | 735 | ||||||||||||||||||
Other foreign government, supranational, and foreign government-sponsored enterprises | 32,355 | 1,258 | 39,763 | 2,327 | 72,118 | 3,585 | ||||||||||||||||||
Total below investment grade securities | $ | 374,831 | $ | 10,607 | $ | 215,908 | $ | 45,409 | $ | 590,739 | $ | 56,016 | ||||||||||||
Total fixed maturity securities | $ | 8,327,843 | $ | 253,005 | $ | 1,210,148 | $ | 108,194 | $ | 9,537,991 | $ | 361,199 | ||||||||||||
Equity securities: | ||||||||||||||||||||||||
Non-redeemable preferred stock | $ | 10,831 | $ | 831 | $ | 21,879 | $ | 5,506 | $ | 32,710 | $ | 6,337 | ||||||||||||
Other equity securities | 202,068 | 7,020 | 6,751 | 301 | 208,819 | 7,321 | ||||||||||||||||||
Total equity securities | $ | 212,899 | $ | 7,851 | $ | 28,630 | $ | 5,807 | $ | 241,529 | $ | 13,658 | ||||||||||||
| Page 33 | |
Reinsurance Group of America, Incorporated Investments (USD thousands) Consolidated Investment Related Gains and Losses | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr vs. PY Quarter | Year-to-date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | ||||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | Change | |||||||||||||||||||||||||||||||
Fixed maturity and equity securities avail. for sale: | ||||||||||||||||||||||||||||||||||||||
Other-than-temporary impairment losses on fixed maturities | $ | (3,401 | ) | $ | (17,189 | ) | $ | (4,142 | ) | $ | — | $ | (846 | ) | $ | (2,555 | ) | $ | (20,590 | ) | $ | (34,663 | ) | $ | 14,073 | |||||||||||||
Portion of loss recognized in other comprehensive | ||||||||||||||||||||||||||||||||||||||
income (before taxes) | — | — | 74 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Net other-than-temporary impairment losses on fixed | ||||||||||||||||||||||||||||||||||||||
maturities recognized in earnings | (3,401 | ) | (17,189 | ) | (4,068 | ) | — | (846 | ) | (2,555 | ) | (20,590 | ) | (34,663 | ) | 14,073 | ||||||||||||||||||||||
Gain on investment activity | 54,220 | 17,893 | 27,217 | 46,346 | 53,615 | 605 | 72,113 | 80,807 | (8,694 | ) | ||||||||||||||||||||||||||||
Loss on investment activity | (10,471 | ) | (12,563 | ) | (6,568 | ) | (9,054 | ) | (22,556 | ) | 12,085 | (23,034 | ) | (34,343 | ) | 11,309 | ||||||||||||||||||||||
Net gains (losses) on fixed maturity & equity securities | ||||||||||||||||||||||||||||||||||||||
available for sale | 40,348 | (11,859 | ) | 16,581 | 37,292 | 30,213 | 10,135 | 28,489 | 11,801 | 16,688 | ||||||||||||||||||||||||||||
Other impairment losses and change in mortgage loan provision | (6,675 | ) | (99 | ) | (8,895 | ) | (262 | ) | 211 | (6,886 | ) | (6,774 | ) | (1,849 | ) | (4,925 | ) | |||||||||||||||||||||
Other non-derivative gaines (losses), net | 5,587 | 4,712 | 4,987 | 4,754 | 5,123 | 464 | 10,299 | 9,180 | 1,119 | |||||||||||||||||||||||||||||
Free-standing derivatives: | ||||||||||||||||||||||||||||||||||||||
Credit default swaps | 3,879 | 7,358 | 4,564 | 6,672 | 3,518 | 361 | 11,237 | 6,864 | 4,373 | |||||||||||||||||||||||||||||
Interest rate swaps - non-hedged | 14,289 | (2,612 | ) | (100,500 | ) | 4,122 | 41,500 | (27,211 | ) | 11,677 | 104,027 | (92,350 | ) | |||||||||||||||||||||||||
Interest rate swaps - hedged | (3 | ) | (8 | ) | — | — | — | (3 | ) | (11 | ) | — | (11 | ) | ||||||||||||||||||||||||
Foreign currency swaps - hedged (1) | (487 | ) | 1,031 | 5,766 | 1,606 | (2,395 | ) | 1,908 | 544 | (6,957 | ) | 7,501 | ||||||||||||||||||||||||||
Futures | (6,442 | ) | (12,775 | ) | (9,957 | ) | (11,677 | ) | (7,557 | ) | 1,115 | (19,217 | ) | (18,608 | ) | (609 | ) | |||||||||||||||||||||
CPI swaps | (4 | ) | (5 | ) | 223 | 76 | (520 | ) | 516 | (9 | ) | (700 | ) | 691 | ||||||||||||||||||||||||
Equity options | (9,273 | ) | (17,189 | ) | (8,694 | ) | (13,648 | ) | (3,225 | ) | (6,048 | ) | (26,462 | ) | (5,928 | ) | (20,534 | ) | ||||||||||||||||||||
Currency forwards | (351 | ) | 904 | (4,954 | ) | 507 | 3,577 | (3,928 | ) | 553 | 6,077 | (5,524 | ) | |||||||||||||||||||||||||
Bond forwards | (41 | ) | — | (225 | ) | 116 | (1,010 | ) | 969 | (41 | ) | (169 | ) | 128 | ||||||||||||||||||||||||
Total free-standing derivatives | 1,567 | (23,296 | ) | (113,777 | ) | (12,226 | ) | 33,888 | (32,321 | ) | (21,729 | ) | 84,606 | (106,335 | ) | |||||||||||||||||||||||
Embedded derivatives: | ||||||||||||||||||||||||||||||||||||||
Modified coinsurance and funds withheld treaties | 15,108 | 68,702 | 20,374 | 49,078 | 76,966 | (61,858 | ) | 83,810 | (15,283 | ) | 99,093 | |||||||||||||||||||||||||||
GMXB | 360 | 22,363 | 90,923 | 7,988 | (28,137 | ) | 28,497 | 22,723 | (91,077 | ) | 113,800 | |||||||||||||||||||||||||||
Total embedded derivatives | 15,468 | 91,065 | 111,297 | 57,066 | 48,829 | (33,361 | ) | 106,533 | (106,360 | ) | 212,893 | |||||||||||||||||||||||||||
Net gain (loss) on total derivatives | 17,035 | 67,769 | (2,480 | ) | 44,840 | 82,717 | (65,682 | ) | 84,804 | (21,754 | ) | 106,558 | ||||||||||||||||||||||||||
Total investment related gains (losses), net | $ | 56,295 | $ | 60,523 | $ | 10,193 | $ | 86,624 | $ | 118,264 | $ | (61,969 | ) | $ | 116,818 | $ | (2,622 | ) | $ | 119,440 | ||||||||||||||||||
(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 34 | |
Appendix | ||||
Reconciliations of GAAP Income to Adjusted Operating Income | ||||
| Page 35 | |
Reinsurance Group of America, Incorporated Reconciliations of GAAP Income to Adjusted Operating Income (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
U.S. & Latin America Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 90,594 | $ | 29,960 | $ | 131,492 | $ | 77,081 | $ | 111,430 | $ | (20,836 | ) | $ | 120,554 | $ | 162,528 | $ | (41,974 | ) | ||||||||||||||||||
Investment and derivative (gains) losses (1) | (1 | ) | — | (336 | ) | (69 | ) | 1 | (2 | ) | (1 | ) | 66 | (67 | ) | |||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | 654 | (1,964 | ) | (1,811 | ) | 3,463 | 881 | (227 | ) | (1,310 | ) | 2,916 | (4,226 | ) | ||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 91,247 | $ | 27,996 | $ | 129,345 | $ | 80,475 | $ | 112,312 | $ | (21,065 | ) | $ | 119,243 | $ | 165,510 | $ | (46,267 | ) | ||||||||||||||||||
U.S. & Latin America Asset Intensive | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 87,002 | $ | 85,770 | $ | 72,261 | $ | 88,732 | $ | 93,979 | $ | (6,977 | ) | $ | 172,772 | $ | 63,149 | $ | 109,623 | |||||||||||||||||||
Investment and derivative (gains) losses (1) | (16,504 | ) | 31,330 | 103,778 | 867 | (27,119 | ) | 10,615 | 14,826 | (51,722 | ) | 66,548 | ||||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (15,762 | ) | (66,738 | ) | (18,563 | ) | (52,541 | ) | (77,847 | ) | 62,085 | (82,500 | ) | 12,367 | (94,867 | ) | ||||||||||||||||||||||
GMXB embedded derivatives (1) | (360 | ) | (22,363 | ) | (90,923 | ) | (7,988 | ) | 28,137 | (28,497 | ) | (22,723 | ) | 91,077 | (113,800 | ) | ||||||||||||||||||||||
Funds withheld (gains) losses - investment income | (4,010 | ) | (744 | ) | (7,516 | ) | (2,295 | ) | (10,304 | ) | 6,294 | (4,754 | ) | (14,928 | ) | 10,174 | ||||||||||||||||||||||
EIA embedded derivatives - interest credited | (7,340 | ) | (27,958 | ) | (39,964 | ) | 42 | (17,364 | ) | 10,024 | (35,298 | ) | 11,785 | (47,083 | ) | |||||||||||||||||||||||
DAC offset, net | 6,865 | 52,340 | 27,625 | 31,876 | 64,841 | (57,976 | ) | 59,205 | (12,137 | ) | 71,342 | |||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 49,891 | $ | 51,637 | $ | 46,698 | $ | 58,693 | $ | 54,323 | $ | (4,432 | ) | $ | 101,528 | $ | 99,591 | $ | 1,937 | |||||||||||||||||||
U.S. & Latin America Financial Reinsurance | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 19,983 | $ | 17,816 | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 5,108 | $ | 37,799 | $ | 30,809 | $ | 6,990 | ||||||||||||||||||||
Adjusted operating income before income taxes | $ | 19,983 | $ | 17,816 | $ | 14,447 | $ | 13,982 | $ | 14,875 | $ | 5,108 | $ | 37,799 | $ | 30,809 | $ | 6,990 | ||||||||||||||||||||
Total U.S. & Latin America | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 197,579 | $ | 133,546 | $ | 218,200 | $ | 179,795 | $ | 220,284 | $ | (22,705 | ) | $ | 331,125 | $ | 256,486 | $ | 74,639 | |||||||||||||||||||
Investment and derivative (gains) losses (1) | (16,505 | ) | 31,330 | 103,442 | 798 | (27,118 | ) | 10,613 | 14,825 | (51,656 | ) | 66,481 | ||||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (15,108 | ) | (68,702 | ) | (20,374 | ) | (49,078 | ) | (76,966 | ) | 61,858 | (83,810 | ) | 15,283 | (99,093 | ) | ||||||||||||||||||||||
GMXB embedded derivatives (1) | (360 | ) | (22,363 | ) | (90,923 | ) | (7,988 | ) | 28,137 | (28,497 | ) | (22,723 | ) | 91,077 | (113,800 | ) | ||||||||||||||||||||||
Funds withheld (gains) losses - investment income | (4,010 | ) | (744 | ) | (7,516 | ) | (2,295 | ) | (10,304 | ) | 6,294 | (4,754 | ) | (14,928 | ) | 10,174 | ||||||||||||||||||||||
EIA embedded derivatives - interest credited | (7,340 | ) | (27,958 | ) | (39,964 | ) | 42 | (17,364 | ) | 10,024 | (35,298 | ) | 11,785 | (47,083 | ) | |||||||||||||||||||||||
DAC offset, net | 6,865 | 52,340 | 27,625 | 31,876 | 64,841 | (57,976 | ) | 59,205 | (12,137 | ) | 71,342 | |||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 161,121 | $ | 97,449 | $ | 190,490 | $ | 153,150 | $ | 181,510 | $ | (20,389 | ) | $ | 258,570 | $ | 295,910 | $ | (37,340 | ) | ||||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 36 | |
Reinsurance Group of America, Incorporated Reconciliations of GAAP Income to Adjusted Operating Income (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Canada Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 32,836 | $ | 19,328 | $ | 37,026 | $ | 34,275 | $ | 43,309 | $ | (10,473 | ) | $ | 52,164 | $ | 63,404 | $ | (11,240 | ) | ||||||||||||||||||
Investment and derivative (gains) losses (1) | (1,395 | ) | (2,652 | ) | (1,550 | ) | (2,624 | ) | (1,049 | ) | (346 | ) | (4,047 | ) | (1,421 | ) | (2,626 | ) | ||||||||||||||||||||
Funds withheld (gains) losses - investment income | (253 | ) | 90 | (722 | ) | (1,027 | ) | (1,353 | ) | 1,100 | (163 | ) | (1,712 | ) | 1,549 | |||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 31,188 | $ | 16,766 | $ | 34,754 | $ | 30,624 | $ | 40,907 | $ | (9,719 | ) | $ | 47,954 | $ | 60,271 | $ | (12,317 | ) | ||||||||||||||||||
Canada Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 4,425 | $ | 3,592 | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 2,297 | $ | 8,017 | $ | 2,720 | $ | 5,297 | ||||||||||||||||||||
Adjusted operating income before income taxes | $ | 4,425 | $ | 3,592 | $ | 4,065 | $ | 1,160 | $ | 2,128 | $ | 2,297 | $ | 8,017 | $ | 2,720 | $ | 5,297 | ||||||||||||||||||||
Europe, Middle East and Africa Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 11,354 | $ | 13,976 | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | 4,520 | $ | 25,330 | $ | 5,718 | $ | 19,612 | ||||||||||||||||||||
Investment and derivative (gains) losses (1) | — | (7 | ) | — | — | — | — | (7 | ) | (5 | ) | (2 | ) | |||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 11,354 | $ | 13,969 | $ | 15,826 | $ | 8,515 | $ | 6,834 | $ | 4,520 | $ | 25,323 | $ | 5,713 | $ | 19,610 | ||||||||||||||||||||
Europe, Middle East and Africa Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 28,905 | $ | 31,918 | $ | 41,328 | $ | 43,786 | $ | 27,469 | $ | 1,436 | $ | 60,823 | $ | 52,893 | $ | 7,930 | ||||||||||||||||||||
Investment and derivative (gains) losses (1) | (2,458 | ) | (4,575 | ) | (4,914 | ) | (8,159 | ) | (1,468 | ) | (990 | ) | (7,033 | ) | (464 | ) | (6,569 | ) | ||||||||||||||||||||
Investment (income) loss on unit-linked variable annuities | 291 | (4,113 | ) | (4,217 | ) | (5,540 | ) | (2,966 | ) | 3,257 | (3,822 | ) | (3,374 | ) | (448 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | (291 | ) | 4,113 | 4,217 | 5,540 | 2,966 | (3,257 | ) | 3,822 | 3,374 | 448 | |||||||||||||||||||||||||||
Non-investment derivatives | 84 | 132 | 314 | (1,682 | ) | 127 | (43 | ) | 216 | (690 | ) | 906 | ||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 26,531 | $ | 27,475 | $ | 36,728 | $ | 33,945 | $ | 26,128 | $ | 403 | $ | 54,006 | $ | 51,739 | $ | 2,267 | ||||||||||||||||||||
Asia Pacific Traditional | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 53,322 | $ | 41,688 | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 18,840 | $ | 95,010 | $ | 75,642 | $ | 19,368 | ||||||||||||||||||||
Investment and derivative (gains) losses (1) | — | — | — | — | — | — | — | (16 | ) | 16 | ||||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 53,322 | $ | 41,688 | $ | 18,464 | $ | 19,822 | $ | 34,482 | $ | 18,840 | $ | 95,010 | $ | 75,626 | $ | 19,384 | ||||||||||||||||||||
Asia Pacific Financial Solutions | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 5,377 | $ | 5,872 | $ | (11,966 | ) | $ | 7,549 | $ | (73 | ) | $ | 5,450 | $ | 11,249 | $ | 8,480 | $ | 2,769 | ||||||||||||||||||
Investment and derivative (gains) losses (1) | (2,750 | ) | (6,324 | ) | 5,846 | (5,283 | ) | (5,925 | ) | 3,175 | (9,074 | ) | (7,036 | ) | (2,038 | ) | ||||||||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | 2,627 | $ | (452 | ) | $ | (6,120 | ) | $ | 2,266 | $ | (5,998 | ) | $ | 8,625 | $ | 2,175 | $ | 1,444 | $ | 731 | |||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
| Page 37 | |
Reinsurance Group of America, Incorporated Reconciliations of GAAP Income to Adjusted Operating Income (USD thousands) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended | Current Qtr | Year-to-Date | ||||||||||||||||||||||||||||||||||||
June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | vs. PY | June 30, | June 30, | |||||||||||||||||||||||||||||||
2017 | 2017 | 2016 | 2016 | 2016 | Quarter | 2017 | 2016 | Change | ||||||||||||||||||||||||||||||
Corporate and Other Segment | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 5,517 | $ | (42,076 | ) | $ | (27,400 | ) | $ | (7,302 | ) | $ | 18,790 | $ | (13,273 | ) | $ | (36,559 | ) | $ | (4,540 | ) | $ | (32,019 | ) | |||||||||||||
Investment and derivative (gains) losses (1) | (14,990 | ) | 15,500 | 1,120 | (11,690 | ) | (31,540 | ) | 16,550 | 510 | (38,470 | ) | 38,980 | |||||||||||||||||||||||||
Non-investment derivatives | (26 | ) | (26 | ) | (25 | ) | (23 | ) | (17 | ) | (9 | ) | (52 | ) | (31 | ) | (21 | ) | ||||||||||||||||||||
Adjusted operating income (loss) before income taxes | $ | (9,499 | ) | $ | (26,602 | ) | $ | (26,305 | ) | $ | (19,015 | ) | $ | (12,767 | ) | $ | 3,268 | $ | (36,101 | ) | $ | (43,041 | ) | $ | 6,940 | |||||||||||||
Consolidated | ||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 339,315 | $ | 207,844 | $ | 295,543 | $ | 287,600 | $ | 353,223 | $ | (13,908 | ) | $ | 547,159 | $ | 460,803 | $ | 86,356 | |||||||||||||||||||
Investment and derivative (gains) losses (1) | (38,098 | ) | 33,272 | 103,944 | (26,958 | ) | (67,100 | ) | 29,002 | (4,826 | ) | (99,068 | ) | 94,242 | ||||||||||||||||||||||||
Change in value of modified coinsurance and | ||||||||||||||||||||||||||||||||||||||
funds withheld embedded derivatives (1) | (15,108 | ) | (68,702 | ) | (20,374 | ) | (49,078 | ) | (76,966 | ) | 61,858 | (83,810 | ) | 15,283 | (99,093 | ) | ||||||||||||||||||||||
GMXB embedded derivatives (1) | (360 | ) | (22,363 | ) | (90,923 | ) | (7,988 | ) | 28,137 | (28,497 | ) | (22,723 | ) | 91,077 | (113,800 | ) | ||||||||||||||||||||||
Funds withheld (gains) losses - investment income | (4,263 | ) | (654 | ) | (8,238 | ) | (3,322 | ) | (11,657 | ) | 7,394 | (4,917 | ) | (16,640 | ) | 11,723 | ||||||||||||||||||||||
EIA embedded derivatives - interest credited | (7,340 | ) | (27,958 | ) | (39,964 | ) | 42 | (17,364 | ) | 10,024 | (35,298 | ) | 11,785 | (47,083 | ) | |||||||||||||||||||||||
DAC offset, net | 6,865 | 52,340 | 27,625 | 31,876 | 64,841 | (57,976 | ) | 59,205 | (12,137 | ) | 71,342 | |||||||||||||||||||||||||||
Investment (income) loss on unit-linked variable annuities | 291 | (4,113 | ) | (4,217 | ) | (5,540 | ) | (2,966 | ) | 3,257 | (3,822 | ) | (3,374 | ) | (448 | ) | ||||||||||||||||||||||
Interest credited on unit-linked variable annuities | (291 | ) | 4,113 | 4,217 | 5,540 | 2,966 | (3,257 | ) | 3,822 | 3,374 | 448 | |||||||||||||||||||||||||||
Non-investment derivatives | 58 | 106 | 289 | (1,705 | ) | 110 | (52 | ) | 164 | (721 | ) | 885 | ||||||||||||||||||||||||||
Adjusted operating income before income taxes | $ | 281,069 | $ | 173,885 | $ | 267,902 | $ | 230,467 | $ | 273,224 | $ | 7,845 | $ | 454,954 | $ | 450,382 | $ | 4,572 | ||||||||||||||||||||
(1) Included in "Investment related gains (losses), net" on Consolidated GAAP Income Statement. | ||||||||||||||||||||||||||||||||||||||
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