EXHIBIT 99.2
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Reinsurance Group of America, Incorporated®
Financial Supplement
First Quarter 2009
(Unaudited)
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Reinsurance Group of America, Incorporated®
World Headquarters | Internet address | Contacts: | ||
1370 Timberlake Manor Parkway | www.rgare.com | Jack B. Lay | ||
Chesterfield, Missouri 63017 | Senior Executive Vice President | |||
U.S.A. | and Chief Financial Officer | |||
Phone: (636) 736-7000 | ||||
John Hayden | ||||
Vice President | ||||
Investor Relations | ||||
Phone: (636) 736-7243 |
Current Ratings
Standard & Poor’s | A.M. Best | Moody’s | ||||
Financial Strength Ratings | ||||||
RGA Reinsurance Company | AA- | A+ | A1 | |||
RGA Life Reinsurance Company of Canada | AA- | A+ | NR | |||
RGA International Reinsurance Company Limited | AA- | NR | NR | |||
RGA Global Reinsurance Company Limited | AA- | NR | NR | |||
Senior Debt Ratings | ||||||
Reinsurance Group of America, Incorporated | A- | a- | Baa1 |
Our common stock is traded on the New York Stock Exchange under the symbol “RGA.”
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Reinsurance Group of America, Incorporated
Financial Supplement
1st Quarter 2009
Table of Contents
Financial Supplement
1st Quarter 2009
Table of Contents
Page | ||||
Non-GAAP Disclosure | 1 | |||
Consolidated | ||||
Financial Highlights | 2 | |||
Consolidated Operating Income Statement | 3 | |||
Consolidated Income Statement (incl. Operating Income Reconciliation) | 4 | |||
Consolidated Balance Sheets | 5 | |||
Segment Pre-tax Operating Income Summaries | ||||
U.S. Operations | 6 | |||
Canada Operations | 10 | |||
Europe & South Africa Operations | 11 | |||
Asia Pacific Operations | 12 | |||
Corporate and Other | 13 | |||
Summary of Pre-tax Segment Operating Income | 14 | |||
Investments | ||||
Cash and Invested Assets, Yield Summary | 15 | |||
Amortized cost, Gross Unrealized Gains and Losses, Estimated Fair Values of Fixed Maturity and Equity Securities | 16 | |||
Corporate Securities by Sector (Fixed Maturities and Equities) | 17 | |||
Quality of Fixed Maturity Securities and Structured Fixed Maturity Securities | 18 | |||
Subprime Mortgage Exposure | 19 | |||
CMBS Exposure | 20 | |||
Gross Unrealized Losses Aging | 21 | |||
Fixed Maturity and Equity Securities Below Amortized Cost | 22 | |||
Consolidated Gross Gains and Losses | 23 |
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Reinsurance Group of America, Incorporated
Financial Supplement
Financial Supplement
This Financial Supplement is for information purposes only and includes unaudited figures. This report should be read in conjunction with documents filed by Reinsurance Group of America, Incorporated with the SEC.
Non-GAAP Disclosures
RGA uses a non-GAAP financial measure called operating income as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs. Management believes that operating income, on a pre-tax and after-tax basis, better measures the ongoing profitability and underlying trends of the company’s continuing operations, primarily because that measure excludes the effect of net investment related gains and losses, as well as changes in the fair value of certain embedded derivatives and related deferred acquisition costs. These items can be volatile, primarily due to the credit market and interest rate environment and are not necessarily indicative of the performance of the company’s underlying businesses. Additionally, operating income excludes any net gain or loss from discontinued operations and the cumulative effect of any accounting changes, which management believes are not indicative of the company’s ongoing operations. The definition of operating income can vary by company and is not considered a substitute for GAAP net income. A reconciliation of income before income taxes of the operating segments to pre-tax operating income (loss) is presented herein.
Additionally, RGA evaluates its stockholder equity position excluding the impact of Accumulated Other Comprehensive Income (“AOCI”) since the net unrealized gains or losses included in AOCI primarily relate to changes in interest rates, credit spreads on its investment securities and foreign currency fluctuations that are not permanent and can fluctuate significantly from period to period.
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Page 1
Reinsurance Group of America, Incorporated
Financial Highlights
First Quarter 2009
Financial Highlights
First Quarter 2009
Three Months Ended or As of | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands, except inforce & per share data) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Net premiums | $ | 1,346,047 | $ | 1,389,091 | $ | 1,303,590 | $ | 1,358,555 | $ | 1,298,065 | $ | 47,982 | ||||||||||||
Net income — continuing operations | 23,290 | 15,170 | 25,250 | 110,806 | 36,589 | (13,299 | ) | |||||||||||||||||
Operating income | 67,355 | 99,966 | 118,542 | 109,688 | 70,957 | (3,602 | ) | |||||||||||||||||
Total assets | 21,634,314 | 21,658,818 | 21,844,347 | 22,410,167 | 21,812,508 | (178,194 | ) | |||||||||||||||||
Assumed Ordinary Life Reinsurance in Force (in billions) | ||||||||||||||||||||||||
U.S. | $ | 1,285.6 | $ | 1,274.5 | $ | 1,265.6 | $ | 1,258.6 | $ | 1,247.0 | $ | 38.6 | ||||||||||||
Canada | 209.9 | 209.5 | 231.4 | 230.9 | 221.2 | (11.3 | ) | |||||||||||||||||
Europe & South Africa | 332.8 | 325.2 | 368.9 | 419.4 | 383.0 | (50.2 | ) | |||||||||||||||||
Asia Pacific | 293.0 | 298.9 | 310.6 | 330.6 | 351.6 | (58.6 | ) | |||||||||||||||||
Assumed New Business Production (in billions) | ||||||||||||||||||||||||
U.S. | $ | 35.5 | $ | 33.7 | $ | 30.5 | $ | 35.5 | $ | 34.7 | $ | 0.8 | ||||||||||||
Canada | 9.9 | 12.1 | 14.5 | 11.7 | 12.9 | (3.0 | ) | |||||||||||||||||
Europe & South Africa | 36.0 | 28.2 | 21.4 | 19.4 | 18.5 | 17.5 | ||||||||||||||||||
Asia Pacific | 3.8 | 9.2 | 7.5 | 4.9 | 10.3 | (6.5 | ) | |||||||||||||||||
Per Share and Shares Data | ||||||||||||||||||||||||
Basic earnings per share from continuing operations | ||||||||||||||||||||||||
Net income | $ | 0.32 | $ | 0.22 | $ | 0.41 | $ | 1.78 | $ | 0.59 | $ | (0.27 | ) | |||||||||||
Operating income | $ | 0.93 | $ | 1.45 | $ | 1.90 | $ | 1.76 | $ | 1.14 | $ | (0.21 | ) | |||||||||||
Diluted earnings per share from continuing operations | ||||||||||||||||||||||||
Net income | $ | 0.32 | $ | 0.22 | $ | 0.40 | $ | 1.73 | $ | 0.57 | $ | (0.25 | ) | |||||||||||
Operating income | $ | 0.92 | $ | 1.45 | $ | 1.86 | $ | 1.71 | $ | 1.10 | $ | (0.18 | ) | |||||||||||
Wgt. average common shares outstanding (basic) | 72,710 | 68,831 | 62,323 | 62,284 | 62,146 | 10,564 | ||||||||||||||||||
Wgt. average common shares outstanding (diluted) | 72,884 | 69,176 | 63,607 | 63,982 | 64,230 | 8,654 | ||||||||||||||||||
Common shares issued | 73,363 | 73,363 | 63,128 | 63,128 | 63,128 | 10,235 | ||||||||||||||||||
Treasury shares | 600 | 741 | 803 | 813 | 894 | (294 | ) | |||||||||||||||||
Common shares outstanding | 72,763 | 72,622 | 62,325 | 62,315 | 62,234 | 10,529 | ||||||||||||||||||
Book value per share | $ | 33.99 | $ | 36.03 | $ | 41.83 | $ | 49.13 | $ | 49.15 | ||||||||||||||
Per share effect of accumulated other comprehensive income (AOCI) | $ | (9.79 | ) | $ | (7.55 | ) | $ | (3.56 | ) | $ | 4.09 | $ | 5.83 | |||||||||||
Book value per share, excluding AOCI | $ | 43.78 | $ | 43.58 | $ | 45.39 | $ | 45.04 | $ | 43.32 |
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Reinsurance Group of America, Incorporated
Consolidated Operating Income Statement
Consolidated Operating Income Statement
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands, except per share data) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 1,346,047 | $ | 1,389,091 | $ | 1,303,590 | $ | 1,358,555 | $ | 1,298,065 | $ | 47,982 | ||||||||||||
Investment income, net of related expenses | 223,196 | 196,634 | 220,248 | 254,868 | 199,526 | 23,670 | ||||||||||||||||||
Investment related gains (losses), net | 1,262 | 1,419 | 1,063 | 978 | 422 | 840 | ||||||||||||||||||
Other revenue | 33,859 | 25,869 | 27,764 | 36,262 | 17,936 | 15,923 | ||||||||||||||||||
Total revenues | 1,604,364 | 1,613,013 | 1,552,665 | 1,650,663 | 1,515,949 | 88,415 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 1,169,744 | 1,150,645 | 1,062,948 | 1,128,827 | 1,119,512 | 50,232 | ||||||||||||||||||
Interest credited | 45,033 | 38,093 | 53,164 | 72,248 | 9,411 | 35,622 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 195,968 | 191,167 | 179,956 | 189,699 | 183,653 | 12,315 | ||||||||||||||||||
Other operating expenses | 66,749 | 53,694 | 63,886 | 61,997 | 63,340 | 3,409 | ||||||||||||||||||
Interest expense | 22,117 | 21,552 | 9,935 | 21,580 | 23,094 | (977 | ) | |||||||||||||||||
Collateral finance facility expense | 2,314 | 7,432 | 6,851 | 6,966 | 7,474 | (5,160 | ) | |||||||||||||||||
Total benefits and expenses | 1,501,925 | 1,462,583 | 1,376,740 | 1,481,317 | 1,406,484 | 95,441 | ||||||||||||||||||
Operating income before income taxes | 102,439 | 150,430 | 175,925 | 169,346 | 109,465 | (7,026 | ) | |||||||||||||||||
Operating income tax expense | 35,084 | 50,464 | 57,383 | 59,658 | 38,508 | (3,424 | ) | |||||||||||||||||
Operating income | $ | 67,355 | $ | 99,966 | $ | 118,542 | $ | 109,688 | $ | 70,957 | $ | (3,602 | ) | |||||||||||
Wgt. Average Common Shares Outstanding (Diluted) | 72,884 | 69,176 | 63,607 | 63,982 | 64,230 | 8,654 | ||||||||||||||||||
Diluted Earnings Per Share — Operating Income | $ | 0.92 | $ | 1.45 | $ | 1.86 | $ | 1.71 | $ | 1.10 | $ | (0.18 | ) | |||||||||||
Foreign currency effect on*: | ||||||||||||||||||||||||
Net premiums | $ | (144,690 | ) | $ | (111,668 | ) | $ | (5,676 | ) | $ | 20,565 | $ | 46,462 | $ | (191,152 | ) | ||||||||
Operating income before income taxes | $ | (11,202 | ) | $ | (17,349 | ) | $ | (1,337 | ) | $ | 5,608 | $ | 7,871 | $ | (19,073 | ) |
* | Represents effect as compared to comparable prior year period |
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Reinsurance Group of America, Incorporated
Consolidated GAAP Income Statement (incl. Operating Income Reconciliation)
Consolidated GAAP Income Statement (incl. Operating Income Reconciliation)
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 1,346,047 | $ | 1,389,091 | $ | 1,303,590 | $ | 1,358,555 | $ | 1,298,065 | $ | 47,982 | ||||||||||||
Investment income, net of related expenses | 223,196 | 196,634 | 220,248 | 254,868 | 199,526 | 23,670 | ||||||||||||||||||
Investment related gains (losses), net | (72,262 | ) | (243,559 | ) | (241,307 | ) | (7,079 | ) | (155,260 | ) | 82,998 | |||||||||||||
Other revenue | 33,859 | 25,869 | 27,764 | 36,262 | 17,936 | 15,923 | ||||||||||||||||||
Total revenues | 1,530,840 | 1,368,035 | 1,310,295 | 1,642,606 | 1,360,267 | 170,573 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 1,169,744 | 1,150,645 | 1,062,948 | 1,128,827 | 1,119,512 | 50,232 | ||||||||||||||||||
Interest credited | 36,909 | 86,989 | 9,293 | 63,000 | 73,897 | (36,988 | ) | |||||||||||||||||
Policy acquisition costs and other insurance expenses | 198,801 | 27,529 | 124,836 | 189,272 | 16,262 | 182,539 | ||||||||||||||||||
Other operating expenses | 66,749 | 53,694 | 63,886 | 61,997 | 63,340 | 3,409 | ||||||||||||||||||
Interest expense | 22,117 | 21,552 | 9,935 | 21,580 | 23,094 | (977 | ) | |||||||||||||||||
Collateral finance facility expense | 2,314 | 7,432 | 6,851 | 6,966 | 7,474 | (5,160 | ) | |||||||||||||||||
Total benefits and expenses | 1,496,634 | 1,347,841 | 1,277,749 | 1,471,642 | 1,303,579 | 193,055 | ||||||||||||||||||
Income before income taxes — continuing operations | 34,206 | 20,194 | 32,546 | 170,964 | 56,688 | (22,482 | ) | |||||||||||||||||
Income tax expense | 10,916 | 5,024 | 7,296 | 60,158 | 20,099 | (9,183 | ) | |||||||||||||||||
Income — continuing operations | 23,290 | 15,170 | 25,250 | 110,806 | 36,589 | (13,299 | ) | |||||||||||||||||
Loss from discontinued operations | — | (5,809 | ) | (22 | ) | (104 | ) | (5,084 | ) | 5,084 | ||||||||||||||
Net income | $ | 23,290 | $ | 9,361 | $ | 25,228 | $ | 110,702 | $ | 31,505 | $ | (8,215 | ) | |||||||||||
Pre-tax Operating Income Reconciliation: | ||||||||||||||||||||||||
Income before income taxes — continuing operations | 34,206 | 20,194 | 32,546 | 170,964 | 56,688 | (22,482 | ) | |||||||||||||||||
Investment and Derivative losses (gains) — non-operating(1) | 68,312 | (146,818 | ) | 99,801 | 1,962 | 862 | 67,450 | |||||||||||||||||
Change in value of B36 embedded derivatives(1) | 40,425 | 161,021 | 106,797 | 11,452 | 148,528 | (108,103 | ) | |||||||||||||||||
GMXB embedded derivatives(1) | (35,213 | ) | 230,775 | 35,772 | (5,357 | ) | 6,292 | (41,505 | ) | |||||||||||||||
EIA embedded derivatives — interest credited | (8,124 | ) | 48,896 | (43,871 | ) | (9,248 | ) | 64,486 | (72,610 | ) | ||||||||||||||
EIA embedded derivatives — policy acq. costs | 1,304 | (5,697 | ) | 8,274 | 2,390 | (12,090 | ) | 13,394 | ||||||||||||||||
DAC offset, net | 1,529 | (157,941 | ) | (63,394 | ) | (2,817 | ) | (155,301 | ) | 156,830 | ||||||||||||||
Operating Income Before Income Taxes | 102,439 | 150,430 | 175,925 | 169,346 | 109,465 | (7,026 | ) | |||||||||||||||||
After-tax Operating Income Reconciliation: | ||||||||||||||||||||||||
Income — continuing operations | 23,290 | 15,170 | 25,250 | 110,806 | 36,589 | (13,299 | ) | |||||||||||||||||
Investment and Derivative losses (gains) — non-operating(1) | 44,117 | (95,289 | ) | 64,967 | 1,207 | 624 | 43,493 | |||||||||||||||||
Change in value of B36 embedded derivatives(1) | 26,276 | 104,664 | 69,418 | 7,444 | 96,543 | (70,267 | ) | |||||||||||||||||
GMXB embedded derivatives(1) | (22,888 | ) | 150,003 | 23,252 | (3,482 | ) | 4,090 | (26,978 | ) | |||||||||||||||
EIA embedded derivatives — interest credited | (5,281 | ) | 31,782 | (28,516 | ) | (6,011 | ) | 41,916 | (47,197 | ) | ||||||||||||||
EIA embedded derivatives — policy acq. costs | 848 | (3,703 | ) | 5,378 | 1,554 | (7,859 | ) | 8,707 | ||||||||||||||||
DAC offset, net | 993 | (102,661 | ) | (41,207 | ) | (1,830 | ) | (100,946 | ) | 101,939 | ||||||||||||||
Operating Income | 67,355 | 99,966 | 118,542 | 109,688 | 70,957 | (3,602 | ) | |||||||||||||||||
(1) | Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement |
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Reinsurance Group of America, Incorporated
Consolidated Balance Sheets
Consolidated Balance Sheets
(USD thousands) | March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | |||||||||||||||
2009 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||
Assets | ||||||||||||||||||||
Fixed maturity securities (available for sale): | $ | 8,831,920 | $ | 8,531,804 | $ | 9,121,953 | $ | 9,667,961 | $ | 9,387,094 | ||||||||||
Mortgage loans on real estate | 764,038 | 775,050 | 782,282 | 798,896 | 812,539 | |||||||||||||||
Policy loans | 1,081,030 | 1,096,713 | 1,048,517 | 1,048,517 | 1,039,464 | |||||||||||||||
Funds withheld at interest | 4,505,054 | 4,520,398 | 4,806,642 | 4,825,297 | 4,650,948 | |||||||||||||||
Short-term investments | 54,552 | 58,123 | 32,520 | 47,081 | 46,336 | |||||||||||||||
Other invested assets | 582,784 | 628,649 | 432,982 | 418,864 | 389,437 | |||||||||||||||
Total investments | 15,819,378 | 15,610,737 | 16,224,896 | 16,806,616 | 16,325,818 | |||||||||||||||
Cash and cash equivalents | 586,542 | 875,403 | 412,255 | 362,689 | 304,083 | |||||||||||||||
Accrued investment income | 118,140 | 87,424 | 138,414 | 106,679 | 103,755 | |||||||||||||||
Premiums receivable and other reinsurance balances | 657,647 | 640,235 | 691,120 | 800,404 | 766,970 | |||||||||||||||
Reinsurance ceded receivables | 746,736 | 735,155 | 746,790 | 752,203 | 758,977 | |||||||||||||||
Deferred policy acquisition costs | 3,602,857 | 3,610,334 | 3,498,152 | 3,460,294 | 3,369,316 | |||||||||||||||
Other assets | 103,014 | 99,530 | 132,720 | 121,282 | 183,589 | |||||||||||||||
Total assets | $ | 21,634,314 | $ | 21,658,818 | $ | 21,844,347 | $ | 22,410,167 | $ | 21,812,508 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Future policy benefits | $ | 6,636,919 | $ | 6,431,530 | $ | 6,552,508 | $ | 6,619,084 | $ | 6,449,039 | ||||||||||
Interest-sensitive contract liabilities | 7,613,489 | 7,690,942 | 7,517,782 | 7,220,659 | 6,657,546 | |||||||||||||||
Other policy claims and benefits | 1,956,834 | 1,923,018 | 2,064,578 | 2,239,868 | 2,196,089 | |||||||||||||||
Other reinsurance balances | 197,695 | 173,645 | 127,021 | 173,162 | 240,137 | |||||||||||||||
Deferred income taxes | 251,261 | 310,360 | 399,669 | 561,912 | 707,963 | |||||||||||||||
Other liabilities | 577,909 | 585,199 | 548,844 | 599,034 | 567,854 | |||||||||||||||
Short-term debt | — | — | 95,000 | — | — | |||||||||||||||
Long-term debt | 917,913 | 918,246 | 922,994 | 926,095 | 925,893 | |||||||||||||||
Collateral finance facility | 850,019 | 850,035 | 850,094 | 850,000 | 850,210 | |||||||||||||||
Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated debentures of the Company | 159,081 | 159,035 | 158,990 | 158,946 | 158,904 | |||||||||||||||
Total liabilities | 19,161,120 | 19,042,010 | 19,237,480 | 19,348,760 | 18,753,635 | |||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||
Common stock, at par value | 734 | 734 | 631 | 631 | 631 | |||||||||||||||
Warrants | 66,912 | 66,914 | 66,915 | 66,915 | 66,915 | |||||||||||||||
Additional paid-in-capital | 1,455,022 | 1,450,041 | 1,118,288 | 1,115,540 | 1,112,977 | |||||||||||||||
Retained earnings | 1,691,292 | 1,682,087 | 1,679,568 | 1,660,041 | 1,556,127 | |||||||||||||||
Accumulated other comprehensive income (AOCI): | ||||||||||||||||||||
Accumulated currency translation adjustment, net of income taxes | (3,050 | ) | 19,794 | 143,729 | 215,582 | 203,662 | ||||||||||||||
Unrealized appreciation (depreciation) of securities, net of income taxes | (695,070 | ) | (553,407 | ) | (358,273 | ) | 47,478 | 167,174 | ||||||||||||
Pension and postretirement benefits, net of income taxes | (14,456 | ) | (14,658 | ) | (7,790 | ) | (8,082 | ) | (8,199 | ) | ||||||||||
Total stockholders’ equity before treasury stock | 2,501,384 | 2,651,505 | 2,643,068 | 3,098,105 | 3,099,287 | |||||||||||||||
Less treasury shares | (28,190 | ) | (34,697 | ) | (36,201 | ) | (36,698 | ) | (40,414 | ) | ||||||||||
Total stockholders’ equity | 2,473,194 | 2,616,808 | 2,606,867 | 3,061,407 | 3,058,873 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 21,634,314 | $ | 21,658,818 | $ | 21,844,347 | $ | 22,410,167 | $ | 21,812,508 | ||||||||||
Total stockholders’ equity, excluding AOCI | $ | 3,185,770 | $ | 3,165,079 | $ | 2,829,201 | $ | 2,806,429 | $ | 2,696,236 |
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Reinsurance Group of America, Incorporated
U.S. Traditional Sub-segment Operating Income
U.S. Traditional Sub-segment Operating Income
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 786,748 | $ | 874,348 | $ | 740,502 | $ | 752,831 | $ | 725,393 | $ | 61,355 | ||||||||||||
Investment income, net of related expenses | 102,561 | 100,033 | 99,991 | 97,462 | 97,431 | 5,130 | ||||||||||||||||||
Other revenue | 570 | (193 | ) | (42 | ) | 552 | 60 | 510 | ||||||||||||||||
Total revenues | 889,879 | 974,188 | 840,451 | 850,845 | 822,884 | 66,995 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 695,932 | 753,545 | 632,258 | 624,310 | 651,850 | 44,082 | ||||||||||||||||||
Interest credited | 15,233 | 15,513 | 15,221 | 14,924 | 14,790 | 443 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 91,533 | 118,637 | 107,199 | 103,231 | 86,050 | 5,483 | ||||||||||||||||||
Other operating expenses | 14,603 | 9,828 | 12,756 | 12,121 | 13,238 | 1,365 | ||||||||||||||||||
Total benefits and expenses | 817,301 | 897,523 | 767,434 | 754,586 | 765,928 | 51,373 | ||||||||||||||||||
Operating income before income taxes | 72,578 | 76,665 | 73,017 | 96,259 | 56,956 | 15,622 | ||||||||||||||||||
Operating to GAAP Reconciliation: | ||||||||||||||||||||||||
Operating income before income taxes | 72,578 | 76,665 | 73,017 | 96,259 | 56,956 | 15,622 | ||||||||||||||||||
Investment and Derivative (losses) gains — non-operating | (38,228 | ) | (6,694 | ) | (62,065 | ) | (637 | ) | (2,508 | ) | (35,720 | ) | ||||||||||||
Income before income taxes | $ | 34,350 | $ | 69,971 | $ | 10,952 | $ | 95,622 | $ | 54,448 | $ | (20,098 | ) | |||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 88.5 | % | 86.2 | % | 85.4 | % | 82.9 | % | 89.9 | % | -1.4 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 11.6 | % | 13.6 | % | 14.5 | % | 13.7 | % | 11.9 | % | -0.3 | % | ||||||||||||
Other operating expenses | 1.9 | % | 1.1 | % | 1.7 | % | 1.6 | % | 1.8 | % | 0.1 | % |
![(RGA LOGO)](https://capedge.com/proxy/8-K/0000950152-09-004086/c50694c5069402.gif)
Page 6
Reinsurance Group of America, Incorporated
U.S. Asset Intensive Sub-segment Operating Income
U.S. Asset Intensive Sub-segment Operating Income
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands except account values) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 1,709 | $ | 1,584 | $ | 1,719 | $ | 1,592 | $ | 1,663 | $ | 46 | ||||||||||||
Investment income, net of related expenses | 55,827 | 26,428 | 43,727 | 80,920 | 25,031 | 30,796 | ||||||||||||||||||
Other revenue | 15,123 | 16,018 | 15,051 | 14,211 | 11,495 | 3,628 | ||||||||||||||||||
Total revenues | 72,659 | 44,030 | 60,497 | 96,723 | 38,189 | 34,470 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 1,274 | 8,151 | 2,040 | 865 | 185 | 1,089 | ||||||||||||||||||
Interest credited | 29,752 | 22,512 | 37,866 | 57,243 | (5,518 | ) | 35,270 | |||||||||||||||||
Policy acquisition costs and other insurance expenses | 42,476 | 14,535 | 10,077 | 27,513 | 35,641 | 6,835 | ||||||||||||||||||
Other operating expenses | 2,898 | 1,649 | 2,167 | 1,840 | 2,334 | 564 | ||||||||||||||||||
Total benefits and expenses | 76,400 | 46,847 | 52,150 | 87,461 | 32,642 | 43,758 | ||||||||||||||||||
Operating income before income taxes | (3,741 | ) | (2,817 | ) | 8,347 | 9,262 | 5,547 | (9,288 | ) | |||||||||||||||
Operating to GAAP Reconciliation: | ||||||||||||||||||||||||
Operating income before income taxes | (3,741 | ) | (2,817 | ) | 8,347 | 9,262 | 5,547 | (9,288 | ) | |||||||||||||||
Investment and Derivative (losses) gains — non-operating(1) | (23,360 | ) | 159,276 | 10,289 | (2,949 | ) | 5,266 | (28,626 | ) | |||||||||||||||
Change in value of B36 embedded derivatives(1) | (40,425 | ) | (161,021 | ) | (106,797 | ) | (11,452 | ) | (148,528 | ) | 108,103 | |||||||||||||
GMXB embedded derivatives(1) | 35,213 | (230,775 | ) | (35,772 | ) | 5,357 | (6,292 | ) | 41,505 | |||||||||||||||
EIA embedded derivatives — interest credited | 8,124 | (48,896 | ) | 43,871 | 9,248 | (64,486 | ) | 72,610 | ||||||||||||||||
EIA embedded derivatives — policy acq. costs | (1,304 | ) | 5,697 | (8,274 | ) | (2,390 | ) | 12,090 | (13,394 | ) | ||||||||||||||
DAC offset, net | (1,529 | ) | 157,941 | 63,394 | 2,817 | 155,301 | (156,830 | ) | ||||||||||||||||
Income before income taxes | $ | (27,022 | ) | $ | (120,595 | ) | $ | (24,942 | ) | $ | 9,893 | $ | (41,102 | ) | $ | 14,080 | ||||||||
(1) | Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement |
![(RGA LOGO)](https://capedge.com/proxy/8-K/0000950152-09-004086/c50694c5069402.gif)
Page 7
Reinsurance Group of America, Incorporated
U.S. Asset Intensive Sub-segment
(Cont’d)
U.S. Asset Intensive Sub-segment
(Cont’d)
Three Months Ended | ||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||
2009 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||
Annuity account values (in millions): | ||||||||||||||||||||
Fixed annuities (deferred) | $ | 1,406 | $ | 1,625 | $ | 1,670 | $ | 1,527 | $ | 1,140 | ||||||||||
Net interest spread (fixed annuities): | 2.4 | % | 1.9 | % | 1.9 | % | 2.0 | % | 2.1 | % | ||||||||||
Equity-indexed annuities | $ | 3,813 | $ | 3,806 | $ | 3,677 | $ | 3,645 | $ | 3,540 | ||||||||||
Variable annuities: | ||||||||||||||||||||
No riders | $ | 1,041 | $ | 1,063 | $ | 1,251 | $ | 1,359 | $ | 1,355 | ||||||||||
GMDB only | 58 | 54 | 49 | 32 | 25 | |||||||||||||||
GMIB only | 4 | 4 | 4 | 4 | 3 | |||||||||||||||
GMAB only | 48 | 44 | 45 | 44 | 35 | |||||||||||||||
GMWB only | 1,180 | 795 | 708 | 537 | 379 | |||||||||||||||
GMDB / WB | 316 | 287 | 257 | 170 | 124 | |||||||||||||||
Other | 26 | 24 | 26 | 23 | 20 | |||||||||||||||
Total VA account values | $ | 2,673 | $ | 2,271 | $ | 2,340 | $ | 2,169 | $ | 1,941 | ||||||||||
Fair value of living benefit riders | $ | 241 | $ | 276 | $ | 46 | $ | 10 | $ | 16 | ||||||||||
Other annuities: | $ | 199 | $ | 199 | $ | 199 | $ | — | $ | — |
Page 8
Reinsurance Group of America, Incorporated
U.S. Financial Reinsurance Sub-segment Operating Income
U.S. Financial Reinsurance Sub-segment Operating Income
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Investment income, net of related expenses | $ | (65 | ) | $ | — | $ | 192 | $ | 356 | $ | 40 | $ | (105 | ) | ||||||||||
Other revenue | 6,571 | 4,578 | 3,644 | 4,314 | 2,744 | 3,827 | ||||||||||||||||||
Total revenues | 6,506 | 4,578 | 3,836 | 4,670 | 2,784 | 3,722 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | — | — | — | — | — | — | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 338 | 341 | 252 | 250 | 198 | 140 | ||||||||||||||||||
Other operating expenses | 679 | 577 | 747 | 767 | 646 | 33 | ||||||||||||||||||
Total benefits and expenses | 1,017 | 918 | 999 | 1,017 | 844 | 173 | ||||||||||||||||||
Operating income before income taxes | 5,489 | 3,660 | 2,837 | 3,653 | 1,940 | 3,549 | ||||||||||||||||||
Operating to GAAP Reconciliation: | ||||||||||||||||||||||||
Operating income before income taxes | 5,489 | 3,660 | 2,837 | 3,653 | 1,940 | 3,549 | ||||||||||||||||||
Investment and Derivative (losses) gains — non-operating | 32 | (110 | ) | (136 | ) | (2 | ) | (1 | ) | 33 | ||||||||||||||
Income before income taxes | $ | 5,521 | $ | 3,550 | $ | 2,701 | $ | 3,651 | $ | 1,939 | $ | 3,582 | ||||||||||||
![(RGA LOGO)](https://capedge.com/proxy/8-K/0000950152-09-004086/c50694c5069402.gif)
Page 9
Reinsurance Group of America, Incorporated
Canadian Segment Operating Income
Canadian Segment Operating Income
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 138,056 | $ | 126,819 | $ | 128,930 | $ | 139,530 | $ | 138,992 | $ | (936 | ) | |||||||||||
Investment income, net of related expenses | 30,360 | 32,873 | 35,836 | 35,692 | 36,033 | (5,673 | ) | |||||||||||||||||
Investment related gains (losses), net | 1,262 | 1,419 | 1,063 | 978 | 422 | 840 | ||||||||||||||||||
Other revenue | 1,697 | 826 | 4,289 | 13,204 | 13 | 1,684 | ||||||||||||||||||
Total revenues | 171,375 | 161,937 | 170,118 | 189,404 | 175,460 | (4,085 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 115,635 | 102,316 | 104,339 | 134,146 | 115,271 | 364 | ||||||||||||||||||
Interest credited | 48 | 68 | 77 | 81 | 139 | (91 | ) | |||||||||||||||||
Policy acquisition costs and other insurance expenses | 33,067 | 30,634 | 27,591 | 25,526 | 26,426 | 6,641 | ||||||||||||||||||
Other operating expenses | 4,868 | 5,591 | 6,132 | 5,899 | 5,446 | (578 | ) | |||||||||||||||||
Total benefits and expenses | 153,618 | 138,609 | 138,139 | 165,652 | 147,282 | 6,336 | ||||||||||||||||||
Operating income before income taxes | 17,757 | 23,328 | 31,979 | 23,752 | 28,178 | (10,421 | ) | |||||||||||||||||
Operating to GAAP Reconciliation: | ||||||||||||||||||||||||
Operating income before income taxes | 17,757 | 23,328 | 31,979 | 23,752 | 28,178 | (10,421 | ) | |||||||||||||||||
Investment and Derivative (losses) gains — non-operating | (1,571 | ) | (1,244 | ) | (2,246 | ) | 3,026 | (4,507 | ) | 2,936 | ||||||||||||||
Income before income taxes | $ | 16,186 | $ | 22,084 | $ | 29,733 | $ | 26,778 | $ | 23,671 | $ | (7,485 | ) | |||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||
Loss ratios (creditor business) | 41.2 | % | 35.5 | % | 42.3 | % | 90.4 | % | 40.7 | % | 0.5 | % | ||||||||||||
Loss ratios (excluding creditor business) | 99.4 | % | 91.4 | % | 89.1 | % | 97.3 | % | 93.2 | % | 6.2 | % | ||||||||||||
Claims and other policy benefits / (net premiums + investment income) | 68.7 | % | 64.1 | % | 63.3 | % | 76.6 | % | 65.9 | % | 2.8 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 24.0 | % | 24.2 | % | 21.4 | % | 18.3 | % | 19.0 | % | 5.0 | % | ||||||||||||
Other operating expenses | 3.5 | % | 4.4 | % | 4.8 | % | 4.2 | % | 3.9 | % | -0.4 | % | ||||||||||||
Note: The loss ratios on creditor reinsurance business are normally lower than traditional reinsurance, while allowances are normally higher as a percentage of premiums. | ||||||||||||||||||||||||
Foreign currency effect on*: | ||||||||||||||||||||||||
Net premiums | $ | (32,673 | ) | $ | (29,546 | ) | $ | 626 | $ | 11,315 | $ | 19,837 | $ | (52,510 | ) | |||||||||
Operating income before income taxes | $ | (5,477 | ) | $ | (6,164 | ) | $ | (264 | ) | $ | 2,397 | $ | 4,715 | $ | (10,192 | ) |
* | Represents effect as compared to comparable prior year period |
![(RGA LOGO)](https://capedge.com/proxy/8-K/0000950152-09-004086/c50694c5069402.gif)
Page 10
Reinsurance Group of America, Incorporated
Europe & South Africa Segment Operating Income
Europe & South Africa Segment Operating Income
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 173,256 | $ | 156,898 | $ | 176,184 | $ | 185,490 | $ | 189,196 | $ | (15,940 | ) | |||||||||||
Investment income, net of related expenses | 6,749 | 7,599 | 9,065 | 8,778 | 7,551 | (802 | ) | |||||||||||||||||
Other revenue | 260 | 240 | 33 | 68 | 60 | 200 | ||||||||||||||||||
Total revenues | 180,265 | 164,737 | 185,282 | 194,336 | 196,807 | (16,542 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 144,218 | 106,776 | 122,521 | 144,460 | 158,535 | (14,317 | ) | |||||||||||||||||
Interest credited | — | — | — | — | — | — | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 10,817 | 14,607 | 21,559 | 16,026 | 17,230 | (6,413 | ) | |||||||||||||||||
Other operating expenses | 17,117 | 16,945 | 15,708 | 16,678 | 15,744 | 1,373 | ||||||||||||||||||
Total benefits and expenses | 172,152 | 138,328 | 159,788 | 177,164 | 191,509 | (19,357 | ) | |||||||||||||||||
Operating income before income taxes | 8,113 | 26,409 | 25,494 | 17,172 | 5,298 | 2,815 | ||||||||||||||||||
Operating to GAAP Reconciliation: | ||||||||||||||||||||||||
Operating income before income taxes | 8,113 | 26,409 | 25,494 | 17,172 | 5,298 | 2,815 | ||||||||||||||||||
Investment and Derivative (losses) gains — non-operating | 422 | (4,598 | ) | (4,703 | ) | (131 | ) | 745 | (323 | ) | ||||||||||||||
Income before income taxes | $ | 8,535 | $ | 21,811 | $ | 20,791 | $ | 17,041 | $ | 6,043 | $ | 2,492 | ||||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 83.2 | % | 68.1 | % | 69.5 | % | 77.9 | % | 83.8 | % | -0.6 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 6.2 | % | 9.3 | % | 12.2 | % | 8.6 | % | 9.1 | % | -2.9 | % | ||||||||||||
Other operating expenses | 9.9 | % | 10.8 | % | 8.9 | % | 9.0 | % | 8.3 | % | 1.6 | % | ||||||||||||
Foreign currency effect on*: | ||||||||||||||||||||||||
Net premiums | $ | (56,890 | ) | $ | (43,150 | ) | $ | (9,380 | ) | $ | 588 | $ | 4,247 | $ | (61,137 | ) | ||||||||
Operating income before income taxes | $ | (3,991 | ) | $ | (7,816 | ) | $ | (2,015 | ) | $ | 606 | $ | 671 | $ | (4,662 | ) | ||||||||
Critical illness net premiums | $ | 46,323 | $ | 49,471 | $ | 59,227 | $ | 67,284 | $ | 60,442 | $ | (14,119 | ) |
* | Represents effect as compared to comparable prior year period |
![(RGA LOGO)](https://capedge.com/proxy/8-K/0000950152-09-004086/c50694c5069402.gif)
Page 11
Reinsurance Group of America, Incorporated
Asia Pacific Segment Operating Income
Asia Pacific Segment Operating Income
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 243,728 | $ | 227,666 | $ | 254,497 | $ | 277,716 | $ | 240,935 | $ | 2,793 | ||||||||||||
Investment income, net of related expenses | 12,697 | 11,317 | 12,272 | 12,397 | 11,414 | 1,283 | ||||||||||||||||||
Other revenue | 9,729 | 5,106 | 2,811 | 1,851 | 2,552 | 7,177 | ||||||||||||||||||
Total revenues | 266,154 | 244,089 | 269,580 | 291,964 | 254,901 | 11,253 | ||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 212,414 | 178,989 | 201,707 | 225,011 | 193,669 | 18,745 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | 30,429 | 25,556 | 25,053 | 28,386 | 28,081 | 2,348 | ||||||||||||||||||
Other operating expenses | 16,171 | 17,235 | 17,774 | 15,801 | 15,102 | 1,069 | ||||||||||||||||||
Total benefits and expenses | 259,014 | 221,780 | 244,534 | 269,198 | 236,852 | 22,162 | ||||||||||||||||||
Operating income before income taxes | 7,140 | 22,309 | 25,046 | 22,766 | 18,049 | (10,909 | ) | |||||||||||||||||
Operating to GAAP Reconciliation: | ||||||||||||||||||||||||
Operating income before income taxes | 7,140 | 22,309 | 25,046 | 22,766 | 18,049 | (10,909 | ) | |||||||||||||||||
Investment and Derivative (losses) gains — non-operating | (3,567 | ) | 2,156 | (3,821 | ) | (1,510 | ) | 514 | (4,081 | ) | ||||||||||||||
Income before income taxes | $ | 3,573 | $ | 24,465 | $ | 21,225 | $ | 21,256 | $ | 18,563 | $ | (14,990 | ) | |||||||||||
Loss and Expense Ratios: | ||||||||||||||||||||||||
Claims and other policy benefits | 87.2 | % | 78.6 | % | 79.3 | % | 81.0 | % | 80.4 | % | 6.8 | % | ||||||||||||
Policy acquisition costs and other insurance expenses | 12.5 | % | 11.2 | % | 9.8 | % | 10.2 | % | 11.7 | % | 0.8 | % | ||||||||||||
Other operating expenses | 6.6 | % | 7.6 | % | 7.0 | % | 5.7 | % | 6.3 | % | 0.3 | % | ||||||||||||
Foreign currency effect on*: | ||||||||||||||||||||||||
Net premiums | $ | (55,173 | ) | $ | (39,028 | ) | $ | 3,036 | $ | 8,629 | $ | 22,356 | $ | (77,529 | ) | |||||||||
Operating income before income taxes | $ | (246 | ) | $ | (1,972 | ) | $ | 1,078 | $ | 2,307 | $ | 2,116 | $ | (2,362 | ) | |||||||||
Critical illness net premiums | $ | 54,152 | $ | 48,591 | $ | 51,979 | $ | 67,348 | $ | 45,863 | $ | 8,289 |
* | Represents effect as compared to comparable prior year period |
![(RGA LOGO)](https://capedge.com/proxy/8-K/0000950152-09-004086/c50694c5069402.gif)
Page 12
Reinsurance Group of America, Incorporated
Corporate and Other Segment Operating Income
(Includes A&H beginning 1/1/09)
Corporate and Other Segment Operating Income
(Includes A&H beginning 1/1/09)
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Net premiums | $ | 2,550 | $ | 1,776 | $ | 1,758 | $ | 1,396 | $ | 1,886 | $ | 664 | ||||||||||||
Investment income, net of related expenses | 15,067 | 18,384 | 19,165 | 19,263 | 22,026 | (6,959 | ) | |||||||||||||||||
Other revenue | (91 | ) | (706 | ) | 1,978 | 2,062 | 1,012 | (1,103 | ) | |||||||||||||||
Total revenues | 17,526 | 19,454 | 22,901 | 22,721 | 24,924 | (7,398 | ) | |||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||
Claims and other policy benefits | 271 | 868 | 83 | 35 | 2 | 269 | ||||||||||||||||||
Policy acquisition costs and other insurance expenses | (12,692 | ) | (13,143 | ) | (11,775 | ) | (11,233 | ) | (9,973 | ) | (2,719 | ) | ||||||||||||
Other operating expenses | 10,413 | 1,869 | 8,602 | 8,891 | 10,830 | (417 | ) | |||||||||||||||||
Interest expense | 22,117 | 21,552 | 9,935 | 21,580 | 23,094 | (977 | ) | |||||||||||||||||
Collateral finance facility expense | 2,314 | 7,432 | 6,851 | 6,966 | 7,474 | (5,160 | ) | |||||||||||||||||
Total benefits and expenses | 22,423 | 18,578 | 13,696 | 26,239 | 31,427 | (9,004 | ) | |||||||||||||||||
Operating income before income taxes | (4,897 | ) | 876 | 9,205 | (3,518 | ) | (6,503 | ) | 1,606 | |||||||||||||||
Operating to GAAP Reconciliation: | ||||||||||||||||||||||||
Operating income before income taxes | (4,897 | ) | 876 | 9,205 | (3,518 | ) | (6,503 | ) | 1,606 | |||||||||||||||
Investment and Derivative (losses) gains — non-operating | (2,040 | ) | (1,968 | ) | (37,119 | ) | 241 | (371 | ) | (1,669 | ) | |||||||||||||
Income before income taxes | $ | (6,937 | ) | $ | (1,092 | ) | $ | (27,914 | ) | $ | (3,277 | ) | $ | (6,874 | ) | $ | (63 | ) | ||||||
Foreign currency effect on*: | ||||||||||||||||||||||||
Net premiums | $ | 46 | $ | 55 | $ | 42 | $ | 33 | $ | 23 | $ | 23 | ||||||||||||
Operating income before income taxes | $ | (1,279 | ) | $ | (1,396 | ) | $ | (136 | ) | $ | 298 | $ | 369 | $ | (1,648 | ) |
* | Represents effect as compared to comparable prior year period |
![(RGA LOGO)](https://capedge.com/proxy/8-K/0000950152-09-004086/c50694c5069402.gif)
Page 13
Reinsurance Group of America, Incorporated
Summary of Pre-tax Segment Operating Income
Summary of Pre-tax Segment Operating Income
Current | ||||||||||||||||||||||||
Three Months Ended | Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
U.S. Traditional | $ | 72,578 | $ | 76,665 | $ | 73,017 | $ | 96,259 | $ | 56,956 | $ | 15,622 | ||||||||||||
U.S. Asset Intensive | (3,741 | ) | (2,817 | ) | 8,347 | 9,262 | 5,547 | (9,288 | ) | |||||||||||||||
U.S. Financial Reinsurance | 5,489 | 3,660 | 2,837 | 3,653 | 1,940 | 3,549 | ||||||||||||||||||
Total U.S. Segment | 74,326 | 77,508 | 84,201 | 109,174 | 64,443 | 9,883 | ||||||||||||||||||
Canadian Segment | 17,757 | 23,328 | 31,979 | 23,752 | 28,178 | (10,421 | ) | |||||||||||||||||
Europe & South Africa Segment | 8,113 | 26,409 | 25,494 | 17,172 | 5,298 | 2,815 | ||||||||||||||||||
Asia Pacific Segment | 7,140 | 22,309 | 25,046 | 22,766 | 18,049 | (10,909 | ) | |||||||||||||||||
Corporate and Other | (4,897 | ) | 876 | 9,205 | (3,518 | ) | (6,503 | ) | 1,606 | |||||||||||||||
Consolidated | $ | 102,439 | $ | 150,430 | $ | 175,925 | $ | 169,346 | $ | 109,465 | $ | (7,026 | ) | |||||||||||
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Page 14
Reinsurance Group of America, Incorporated
Investments
Investments
Cash and Invested Assets
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | |||||||||||||||
Fixed maturity securities, available-for-sale | $ | 8,831,920 | $ | 8,531,804 | $ | 9,121,953 | $ | 9,667,961 | $ | 9,387,094 | ||||||||||
Mortgage loans on real estate | 764,038 | 775,050 | 782,282 | 798,896 | 812,539 | |||||||||||||||
Policy loans | 1,081,030 | 1,096,713 | 1,048,517 | 1,048,517 | 1,039,464 | |||||||||||||||
Funds withheld at interest | 4,505,054 | 4,520,398 | 4,806,642 | 4,825,297 | 4,650,948 | |||||||||||||||
Short-term investments | 54,552 | 58,123 | 32,520 | 47,081 | 46,336 | |||||||||||||||
Other invested assets | 582,784 | 628,649 | 432,982 | 418,864 | 389,437 | |||||||||||||||
Cash and cash equivalents | 586,542 | 875,403 | 412,255 | 362,689 | 304,083 | |||||||||||||||
Total cash and invested assets | $ | 16,405,920 | $ | 16,486,140 | $ | 16,637,151 | $ | 17,169,305 | $ | 16,629,901 | ||||||||||
Investment Income and Yield Summary
(Excludes Funds Withheld)
(Excludes Funds Withheld)
Three Months Ended | Current Qtr | |||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
(USD thousands) | 2009 | 2008 | 2008 | 2008 | 2008 | Quarter | ||||||||||||||||||
Average invested assets at amortized cost(1) | $ | 12,776,598 | $ | 12,245,727 | $ | 12,185,216 | $ | 11,696,386 | $ | 11,539,433 | $ | 1,237,165 | ||||||||||||
Net investment income(1) | $ | 174,300 | $ | 177,358 | $ | 179,193 | $ | 173,587 | $ | 170,899 | $ | 3,401 | ||||||||||||
Investment yield (ratio of net investment income to average invested assets) | 5.57 | % | 5.92 | % | 6.01 | % | 6.07 | % | 6.06 | % | -0.49 | % |
(1) | Excludes funds withheld |
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Page 15 |
Reinsurance Group of America, Incorporated
Investments
Investments
Amortized cost, gross unrealized gains and losses, and estimated fair values of fixed maturity and equity securities
March 31, 2009
Estimated | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | % of | ||||||||||||||||
(USD thousands) | Cost | Gains | Losses | Value | Total | |||||||||||||||
Available-for-sale: | ||||||||||||||||||||
U.S. corporate securities | $ | 3,779,317 | $ | 18,970 | $ | 696,017 | $ | 3,102,270 | �� | 35.1 | % | |||||||||
Canadian and Canadian provincial governments | 1,498,249 | 326,243 | 17,230 | 1,807,262 | 20.5 | % | ||||||||||||||
Residential mortgage-backed securities | 1,244,713 | 36,791 | 74,215 | 1,207,289 | 13.7 | % | ||||||||||||||
Foreign corporate securities | 1,293,068 | 15,836 | 160,432 | 1,148,472 | 13.0 | % | ||||||||||||||
Asset-backed securities | 511,088 | 4,538 | 130,421 | 385,205 | 4.3 | % | ||||||||||||||
Commercial mortgage-backed securities | 1,087,722 | 4,621 | 370,351 | 721,992 | 8.2 | % | ||||||||||||||
U.S. government and agencies | 3,306 | 465 | — | 3,771 | 0.0 | % | ||||||||||||||
State and political subdivisions | 46,440 | — | 11,859 | 34,581 | 0.4 | % | ||||||||||||||
Other foreign government securities | 409,546 | 14,019 | 2,487 | 421,078 | 4.8 | % | ||||||||||||||
Total fixed maturity securities | 9,873,449 | 421,483 | 1,463,012 | 8,831,920 | 100.0 | % | ||||||||||||||
Non-redeemable preferred stock | 175,594 | 94 | 86,463 | 89,225 | 70.7 | % | ||||||||||||||
Common stock | 40,200 | 75 | 3,344 | 36,931 | 29.3 | % | ||||||||||||||
Total equity securities | $ | 215,794 | $ | 169 | $ | 89,807 | $ | 126,156 | 100.0 | % | ||||||||||
December 31, 2008
Estimated | ||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | % of | ||||||||||||||||
(USD thousands) | Cost | Gains | Losses | Value | Total | |||||||||||||||
Available-for-sale: | ||||||||||||||||||||
U.S. corporate securities | $ | 3,577,116 | $ | 34,262 | $ | 598,745 | $ | 3,012,633 | 35.3 | % | ||||||||||
Canadian and Canadian provincial governments | 1,500,511 | 397,899 | 7,171 | 1,891,239 | 22.2 | % | ||||||||||||||
Residential mortgage-backed securities | 1,231,123 | 24,838 | 106,776 | 1,149,185 | 13.5 | % | ||||||||||||||
Foreign corporate securities | 1,112,018 | 14,335 | 152,920 | 973,433 | 11.4 | % | ||||||||||||||
Asset-backed securities | 484,577 | 2,098 | 147,297 | 339,378 | 4.0 | % | ||||||||||||||
Commercial mortgage-backed securities | 1,085,062 | 2,258 | 326,730 | 760,590 | 8.9 | % | ||||||||||||||
U.S. government and agencies | 7,555 | 876 | — | 8,431 | 0.1 | % | ||||||||||||||
State and political subdivisions | 46,537 | — | 7,883 | 38,654 | 0.4 | % | ||||||||||||||
Other foreign government securities | 338,349 | 20,062 | 150 | 358,261 | 4.2 | % | ||||||||||||||
Total fixed maturity securities | 9,382,848 | 496,628 | 1,347,672 | 8,531,804 | 100.0 | % | ||||||||||||||
Non-redeemable preferred stock | 187,510 | 49 | 64,160 | 123,399 | 77.4 | % | ||||||||||||||
Common stock | 40,582 | — | 4,607 | 35,975 | 22.6 | % | ||||||||||||||
Total equity securities | $ | 228,092 | $ | 49 | $ | 68,767 | $ | 159,374 | 100.0 | % | ||||||||||
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Page 16 |
Reinsurance Group of America, Incorporated
Investments
Investments
Corporate Securities by Sector (Fixed Maturities and Equities)
March 31, 2009 | December 31, 2008 | |||||||||||||||||||||||||||||||
Estimated Fair | Average Credit | Estimated | Average Credit | |||||||||||||||||||||||||||||
(USD thousands) | Amortized Cost | Value | % of Total | Ratings | Amortized Cost | Fair Value | % of Total | Ratings | ||||||||||||||||||||||||
Financial Institutions | ||||||||||||||||||||||||||||||||
Banking | $ | 1,154,761 | $ | 851,182 | 19.4 | % | A | $ | 1,138,663 | $ | 924,098 | 22.2 | % | A | ||||||||||||||||||
Brokerage | 88,727 | 68,618 | 1.6 | % | A- | 104,169 | 96,516 | 2.3 | % | A | ||||||||||||||||||||||
Finance Comp. | 282,021 | 210,325 | 4.8 | % | A+ | 278,132 | 228,659 | 5.5 | % | A+ | ||||||||||||||||||||||
Insurance | 312,709 | 204,335 | 4.7 | % | A- | 309,703 | 222,116 | 5.4 | % | A- | ||||||||||||||||||||||
REITs | 145,818 | 103,952 | 2.4 | % | BBB+ | 153,626 | 110,172 | 2.7 | % | BBB+ | ||||||||||||||||||||||
Other Finance | 213,542 | 163,881 | 3.7 | % | A | 191,650 | 140,161 | 3.4 | % | A | ||||||||||||||||||||||
Industrials | ||||||||||||||||||||||||||||||||
Basic | 225,742 | 188,080 | 4.3 | % | BBB+ | 213,540 | 173,826 | 4.2 | % | BBB+ | ||||||||||||||||||||||
Capital Goods | 200,870 | 183,968 | 4.2 | % | A- | 187,041 | 172,958 | 4.2 | % | A- | ||||||||||||||||||||||
Communications | 518,129 | 484,849 | 11.1 | % | BBB+ | 449,334 | 425,633 | 10.3 | % | BBB+ | ||||||||||||||||||||||
Consumer Cyclical | 248,146 | 202,625 | 4.6 | % | BBB+ | 244,476 | 198,485 | 4.8 | % | BBB+ | ||||||||||||||||||||||
Consumer Noncyclical | 399,034 | 383,053 | 8.8 | % | BBB+ | 341,126 | 323,239 | 7.8 | % | BBB+ | ||||||||||||||||||||||
Energy | 325,811 | 294,876 | 6.7 | % | BBB+ | 248,579 | 215,634 | 5.2 | % | BBB+ | ||||||||||||||||||||||
Technology | 95,458 | 86,304 | 2.0 | % | BBB+ | 55,043 | 43,998 | 1.1 | % | BBB+ | ||||||||||||||||||||||
Transportation | 223,448 | 192,655 | 4.4 | % | BBB+ | 217,515 | 190,303 | 4.6 | % | BBB+ | ||||||||||||||||||||||
Other Industrial | 60,337 | 32,542 | 0.7 | % | BBB+ | 55,898 | 28,314 | 0.7 | % | BBB+ | ||||||||||||||||||||||
Utilities | ||||||||||||||||||||||||||||||||
Electric | 486,831 | 447,186 | 10.2 | % | BBB+ | 446,048 | 399,235 | 9.6 | % | BBB+ | ||||||||||||||||||||||
Natural Gas | 224,739 | 205,849 | 4.7 | % | BBB+ | 200,636 | 174,308 | 4.2 | % | BBB+ | ||||||||||||||||||||||
Other Utility | 23,730 | 21,633 | 0.5 | % | A- | 22,320 | 20,447 | 0.5 | % | A- | ||||||||||||||||||||||
Other Sectors | 58,326 | 50,985 | 1.2 | % | AA | 59,728 | 57,338 | 1.3 | % | AA | ||||||||||||||||||||||
Total | $ | 5,288,179 | $ | 4,376,898 | 100.0 | % | $ | 4,917,227 | $ | 4,145,440 | 100.0 | % | ||||||||||||||||||||
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Page 17 |
Reinsurance Group of America, Incorporated
Investments
Investments
Ratings of Fixed Maturity Securities
(USD thousands) | March 31, 2009 | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rating Agency | Amortized | Estimated | Amortized | Estimated | Amortized | Estimated | Amortized | Estimated | % of | Amortized | Estimated | % of | ||||||||||||||||||||||||||||||||||||||||||||||||||||
NAIC Designation | Designation | Cost | Fair Value | % of Total | Cost | Fair Value | % of Total | Cost | Fair Value | % of Total | Cost | Fair Value | Total | Cost | Fair Value | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
1 | AAA | $ | 2,887,693 | $ | 2,631,984 | 29.8 | % | $ | 2,851,818 | $ | 2,594,429 | 30.4 | % | $ | 2,931,176 | $ | 2,780,454 | 30.5 | % | $ | 2,856,457 | $ | 2,777,642 | 28.7 | % | $ | 2,752,988 | $ | 2,710,839 | 28.9 | % | |||||||||||||||||||||||||||||||||
1 | AA | 2,205,621 | 2,188,305 | 24.8 | % | 2,147,187 | 2,161,537 | 25.3 | % | 2,601,007 | 2,624,357 | 28.8 | % | 2,572,375 | 2,809,406 | 29.1 | % | 2,447,193 | 2,754,675 | 29.3 | % | |||||||||||||||||||||||||||||||||||||||||||
1 | A | 1,952,386 | 1,777,195 | 20.1 | % | 2,002,963 | 1,851,764 | 21.7 | % | 1,947,355 | 1,779,129 | 19.5 | % | 2,012,559 | 2,028,840 | 21.0 | % | 1,926,854 | 1,970,574 | 21.0 | % | |||||||||||||||||||||||||||||||||||||||||||
2 | BBB | 2,284,836 | 1,877,063 | 21.3 | % | 1,991,276 | 1,649,513 | 19.3 | % | 1,817,281 | 1,632,806 | 17.9 | % | 1,812,894 | 1,730,612 | 17.9 | % | 1,725,432 | 1,676,870 | 17.8 | % | |||||||||||||||||||||||||||||||||||||||||||
3 | BB | 386,137 | 260,276 | 2.9 | % | 268,276 | 195,088 | 2.3 | % | 253,665 | 231,706 | 2.5 | % | 267,856 | 253,695 | 2.6 | % | 222,209 | 214,105 | 2.3 | % | |||||||||||||||||||||||||||||||||||||||||||
4 | B | 88,213 | 53,946 | 0.6 | % | 77,830 | 50,064 | 0.6 | % | 58,868 | 43,503 | 0.5 | % | 51,320 | 46,722 | 0.5 | % | 48,225 | 43,989 | 0.5 | % | |||||||||||||||||||||||||||||||||||||||||||
5 | CCC and lower | 61,502 | 36,804 | 0.4 | % | 33,945 | 22,538 | 0.3 | % | 31,336 | 27,361 | 0.3 | % | 18,375 | 17,250 | 0.2 | % | 16,860 | 15,987 | 0.2 | % | |||||||||||||||||||||||||||||||||||||||||||
6 | In or near default | 7,061 | 6,347 | 0.1 | % | 9,553 | 6,871 | 0.1 | % | 2,636 | 2,637 | 0.0 | % | 3,074 | 3,794 | 0.0 | % | 53 | 55 | 0.0 | % | |||||||||||||||||||||||||||||||||||||||||||
Total | $ | 9,873,449 | $ | 8,831,920 | $ | 9,382,848 | $ | 8,531,804 | $ | 9,643,324 | $ | 9,121,953 | $ | 9,594,910 | $ | 9,667,961 | $ | 9,139,814 | $ | 9,387,094 | ||||||||||||||||||||||||||||||||||||||||||||
Structured Fixed Maturity Securities
March 31, 2009 | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | ||||||||||||||||||||||||||||||||||||
Estimated Fair | Estimated Fair | Estimated Fair | Amortized | Estimated Fair | Amortized | Estimated Fair | ||||||||||||||||||||||||||||||||||
(USD thousands) | Amortized Cost | Value | Amortized Cost | Value | Amortized Cost | Value | Cost | Value | Cost | Value | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||||||||||||||||||
Agency | $ | 796,869 | $ | 829,447 | $ | 851,507 | $ | 868,479 | $ | 859,530 | $ | 857,249 | $ | 872,914 | $ | 871,337 | $ | 930,612 | $ | 942,931 | ||||||||||||||||||||
Non-agency | 447,844 | 377,842 | 379,616 | 280,706 | 443,461 | 405,466 | 428,089 | 401,199 | 401,824 | 382,700 | ||||||||||||||||||||||||||||||
Total residential mortgage-backed securities | 1,244,713 | 1,207,289 | 1,231,123 | 1,149,185 | 1,302,991 | 1,262,715 | 1,301,003 | 1,272,536 | 1,332,436 | 1,325,631 | ||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | 1,087,722 | 721,992 | 1,085,062 | 760,590 | 1,029,457 | 905,431 | 889,792 | 842,140 | 727,492 | 686,678 | ||||||||||||||||||||||||||||||
Asset-backed securities | 511,088 | 385,205 | 484,577 | 339,378 | 483,308 | 395,907 | 505,193 | 452,347 | 493,293 | 446,031 | ||||||||||||||||||||||||||||||
Total | $ | 2,843,523 | $ | 2,314,486 | $ | 2,800,762 | $ | 2,249,153 | $ | 2,815,756 | $ | 2,564,053 | $ | 2,695,988 | $ | 2,567,023 | $ | 2,553,221 | $ | 2,458,340 | ||||||||||||||||||||
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Page 18
Reinsurance Group of America, Incorporated
Investments
Investments
Subprime Mortgage Exposure
(Includes Funds Withheld Portfolios)
(Includes Funds Withheld Portfolios)
March 31, 2009 | ||||||||||||||||||||||||
(USD thousands) | AAA | AA | A | |||||||||||||||||||||
Estimated | ||||||||||||||||||||||||
Amortized | Estimated | Amortized | Fair | Amortized | Estimated | |||||||||||||||||||
Underwriting Year | Cost | Fair Value | Cost | Value | Cost | Fair Value | ||||||||||||||||||
2003 & Prior | $ | 10,616 | $ | 7,543 | $ | 1,102 | $ | 570 | $ | 1,748 | $ | 696 | ||||||||||||
2004 | — | — | 14,945 | 9,884 | 32,593 | 25,223 | ||||||||||||||||||
2005 | 25,386 | 19,843 | 32,779 | 23,779 | 13,972 | 7,730 | ||||||||||||||||||
2006 | — | — | — | — | 3,370 | 1,638 | ||||||||||||||||||
2007 | — | — | — | — | — | — | ||||||||||||||||||
2008 | — | — | — | — | — | — | ||||||||||||||||||
2009 | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 36,002 | $ | 27,386 | $ | 48,826 | $ | 34,233 | $ | 51,683 | $ | 35,287 | ||||||||||||
BBB | Below Investment Grade | Total | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||||
Amortized | Estimated | Amortized | Fair | Amortized | Estimated | |||||||||||||||||||
Underwriting Year | Cost | Fair Value | Cost | Value | Cost | Fair Value | ||||||||||||||||||
2003 & Prior | $ | 5,623 | $ | 3,230 | $ | 798 | $ | 80 | $ | 19,887 | $ | 12,119 | ||||||||||||
2004 | — | — | 3,371 | 3,367 | 50,909 | 38,474 | ||||||||||||||||||
2005 | 18,362 | 9,239 | 18,086 | 1,696 | 108,585 | 62,287 | ||||||||||||||||||
2006 | 4,500 | 2,081 | 579 | 575 | 8,449 | 4,294 | ||||||||||||||||||
2007 | 888 | 318 | 13,819 | 9,141 | 14,707 | 9,459 | ||||||||||||||||||
2008 | — | — | — | — | — | — | ||||||||||||||||||
2009 | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 29,373 | $ | 14,868 | $ | 36,653 | $ | 14,859 | $ | 202,537 | $ | 126,633 | ||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
(USD thousands) | AAA | AA | A | |||||||||||||||||||||
Estimated | ||||||||||||||||||||||||
Amortized | Estimated | Amortized | Fair | Amortized | Estimated | |||||||||||||||||||
Underwriting Year | Cost | Fair Value | Cost | Value | Cost | Fair Value | ||||||||||||||||||
2003 & Prior | $ | 11,007 | $ | 9,116 | $ | 6,509 | $ | 4,320 | $ | 1,813 | $ | 1,227 | ||||||||||||
2004 | — | — | 21,220 | 13,437 | 33,728 | 26,228 | ||||||||||||||||||
2005 | 37,134 | 27,793 | 36,424 | 26,471 | 6,514 | 2,582 | ||||||||||||||||||
2006 | 135 | 134 | 4,500 | 2,076 | 4,998 | 1,991 | ||||||||||||||||||
2007 | — | — | 888 | 283 | — | — | ||||||||||||||||||
2008 | — | — | — | — | — | — | ||||||||||||||||||
Total | $ | 48,276 | $ | 37,043 | $ | 69,541 | $ | 46,587 | $ | 47,053 | $ | 32,028 | ||||||||||||
BBB | Below Investment Grade | Total | ||||||||||||||||||||||
Estimated | ||||||||||||||||||||||||
Amortized | Estimated | Amortized | Fair | Amortized | Estimated | |||||||||||||||||||
Underwriting Year | Cost | Fair Value | Cost | Value | Cost | Fair Value | ||||||||||||||||||
2003 & Prior | $ | 413 | $ | 77 | $ | 807 | $ | 106 | $ | 20,549 | $ | 14,846 | ||||||||||||
2004 | — | — | 7,900 | 5,727 | 62,848 | 45,392 | ||||||||||||||||||
2005 | 11,908 | 6,529 | 17,905 | 5,739 | 109,885 | 69,114 | ||||||||||||||||||
2006 | 3,442 | 2,618 | 3,287 | 449 | 16,362 | 7,268 | ||||||||||||||||||
2007 | — | — | 19,588 | 10,880 | 20,476 | 11,163 | ||||||||||||||||||
2008 | — | — | — | — | — | — | ||||||||||||||||||
�� | ||||||||||||||||||||||||
Total | $ | 15,763 | $ | 9,224 | $ | 49,487 | $ | 22,901 | $ | 230,120 | $ | 147,783 | ||||||||||||
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Page 19
Reinsurance Group of America, Incorporated
Investments
Investments
CMBS Exposure
**Note: Includes Directly Held Investments & Funds Withheld Portfolios
**Note: Includes Directly Held Investments & Funds Withheld Portfolios
March 31, 2009 | ||||||||||||||||||||||||
(USD thousands) | AAA | AA | A | |||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||
Fair | Fair | Fair | ||||||||||||||||||||||
Underwriting Year | Amortized Cost | Value | Amortized Cost | Value | Amortized Cost | Value | ||||||||||||||||||
2003 & Prior | $ | 236,597 | $ | 241,379 | $ | 24,642 | $ | 19,591 | $ | 23,571 | $ | 14,142 | ||||||||||||
2004 | 50,560 | 45,563 | 2,352 | 1,124 | 11,528 | 4,296 | ||||||||||||||||||
2005 | 210,372 | 135,564 | 2,533 | 755 | 54,179 | 29,328 | ||||||||||||||||||
2006 | 292,923 | 210,546 | 21,888 | 10,352 | 32,905 | 21,502 | ||||||||||||||||||
2007 | 370,613 | 241,694 | 50,753 | 12,593 | 59,212 | 19,074 | ||||||||||||||||||
2008 | 38,522 | 36,068 | 19,108 | 8,919 | 16,570 | 8,943 | ||||||||||||||||||
2009 | 5,228 | 5,255 | — | — | — | — | ||||||||||||||||||
Total | $ | 1,204,815 | $ | 916,069 | $ | 121,276 | $ | 53,334 | $ | 197,965 | $ | 97,285 | ||||||||||||
BBB | Below Investment Grade | Total | ||||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||
Fair | Fair | Fair | ||||||||||||||||||||||
Underwriting Year | Amortized Cost | Value | Amortized Cost | Value | Amortized Cost | Value | ||||||||||||||||||
2003 & Prior | $ | 24,124 | $ | 13,836 | $ | — | $ | — | $ | 308,934 | $ | 288,948 | ||||||||||||
2004 | — | — | — | — | 64,440 | 50,983 | ||||||||||||||||||
2005 | 3,690 | 1,465 | — | — | 270,774 | 167,112 | ||||||||||||||||||
2006 | 13,824 | 7,768 | 18,130 | 10,379 | 379,670 | 260,547 | ||||||||||||||||||
2007 | — | — | — | — | 480,578 | 273,361 | ||||||||||||||||||
2008 | 12,842 | 7,777 | — | — | 87,042 | 61,707 | ||||||||||||||||||
2009 | — | — | — | — | 5,228 | 5,255 | ||||||||||||||||||
Total | $ | 54,480 | $ | 30,846 | $ | 18,130 | $ | 10,379 | $ | 1,596,666 | $ | 1,107,913 | ||||||||||||
NOTE: Totals include directly held investments with amortized cost of $1,087.7 million and fair value of $722.0 million as well as investments in funds withheld with amortized cost of $508.9 million and fair value of $385.9 million.
December 31, 2008 | ||||||||||||||||||||||||
(USD thousands) | AAA | AA | A | |||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||
Fair | Fair | Fair | ||||||||||||||||||||||
Underwriting Year | Amortized Cost | Value | Amortized Cost | Value | Amortized Cost | Value | ||||||||||||||||||
2003 & Prior | $ | 250,720 | $ | 254,690 | $ | 24,276 | $ | 17,518 | $ | 28,432 | $ | 16,744 | ||||||||||||
2004 | 50,245 | 46,737 | 2,147 | 999 | 10,603 | 3,835 | ||||||||||||||||||
2005 | 200,140 | 136,101 | 2,530 | 682 | 54,173 | 30,079 | ||||||||||||||||||
2006 | 306,478 | 234,575 | 16,219 | 6,074 | 45,346 | 31,379 | ||||||||||||||||||
2007 | 362,226 | 256,163 | 50,648 | 14,343 | 59,013 | 20,636 | ||||||||||||||||||
2008 | 30,017 | 28,501 | 23,387 | 10,698 | 18,342 | 11,186 | ||||||||||||||||||
Total | $ | 1,199,826 | $ | 956,767 | $ | 119,207 | $ | 50,314 | $ | 215,909 | $ | 113,859 | ||||||||||||
BBB | Below Investment Grade | Total | ||||||||||||||||||||||
Estimated | Estimated | Estimated | ||||||||||||||||||||||
Fair | Fair | Fair | ||||||||||||||||||||||
Underwriting Year | Amortized Cost | Value | Amortized Cost | Value | Amortized Cost | Value | ||||||||||||||||||
2003 & Prior | $ | 18,144 | $ | 11,938 | $ | — | $ | — | $ | 321,572 | $ | 300,890 | ||||||||||||
2004 | — | — | — | — | 62,995 | 51,571 | ||||||||||||||||||
2005 | 3,679 | 776 | — | — | 260,522 | 167,638 | ||||||||||||||||||
2006 | 15,283 | 8,709 | 1,305 | 941 | 384,631 | 281,678 | ||||||||||||||||||
2007 | — | — | — | — | 471,887 | 291,142 | ||||||||||||||||||
2008 | — | — | — | — | 71,746 | 50,385 | ||||||||||||||||||
Total | $ | 37,106 | $ | 21,423 | $ | 1,305 | $ | 941 | $ | 1,573,353 | $ | 1,143,304 | ||||||||||||
NOTE: Totals include directly held investments with amortized cost of $1,085.1 million and fair value of $760.6 million as well as investments in funds withheld with amortized cost of $488.3 million and fair value of $382.7 million.
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Reinsurance Group of America, Incorporated
Investments
Investments
Gross Unrealized Losses Aging
Fixed Maturity Securities
(USD thousands) | March 31, 2009 | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | |||||||||||||||||||||||||||||||||||
Gross Unrealized | Gross Unrealized | Gross Unrealized | Gross Unrealized | Gross Unrealized | ||||||||||||||||||||||||||||||||||||
Losses | % of Total | Losses | % of Total | Losses | % of Total | Losses | % of Total | Losses | % of Total | |||||||||||||||||||||||||||||||
Less than 20% | $ | 320,296 | 20.6 | % | $ | 322,159 | 22.7 | % | $ | 466,855 | 48.5 | % | $ | 315,350 | 64.7 | % | $ | 218,655 | 58.8 | % | ||||||||||||||||||||
20% or more for less than six months | 406,885 | 26.2 | % | 766,789 | 54.1 | % | 323,511 | 33.7 | % | 97,591 | 20.1 | % | 120,680 | 32.5 | % | |||||||||||||||||||||||||
20% or more for six months or greater | 735,831 | 47.4 | % | 258,724 | 18.3 | % | 94,982 | 9.9 | % | 38,715 | 8.0 | % | 10,222 | 2.8 | % | |||||||||||||||||||||||||
Total | $ | 1,463,012 | 94.2 | % | $ | 1,347,672 | 95.1 | % | $ | 885,348 | 92.1 | % | $ | 451,656 | 92.8 | % | $ | 349,557 | 94.1 | % | ||||||||||||||||||||
Equity Securities
(USD thousands) | March 31, 2009 | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | |||||||||||||||||||||||||||||||||||
Gross Unrealized | Gross Unrealized | Gross Unrealized | Gross Unrealized | Gross Unrealized | ||||||||||||||||||||||||||||||||||||
Losses | % of Total | Losses | % of Total | Losses | % of Total | Losses | % of Total | Losses | % of Total | |||||||||||||||||||||||||||||||
Less than 20% | $ | 1,070 | 0.1 | % | $ | 2,231 | 0.2 | % | $ | 5,293 | 0.6 | % | $ | 10,562 | 2.2 | % | $ | 11,470 | 3.1 | % | ||||||||||||||||||||
20% or more for less than six months | 10,675 | 0.7 | % | 29,958 | 2.1 | % | 57,710 | 6.0 | % | 21,904 | 4.5 | % | 10,274 | 2.8 | % | |||||||||||||||||||||||||
20% or more for six months or greater | 78,062 | 5.0 | % | 36,578 | 2.6 | % | 12,291 | 1.3 | % | 2,550 | 0.5 | % | 0 | 0.0 | % | |||||||||||||||||||||||||
Total | $ | 89,807 | 5.8 | % | $ | 68,767 | 4.9 | % | $ | 75,294 | 7.9 | % | $ | 35,016 | 7.2 | % | $ | 21,744 | 5.9 | % | ||||||||||||||||||||
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Reinsurance Group of America, Incorporated
Investments
Investments
Fixed Maturities and Equity Securities Below Amortized Cost
As of March 31, 2009 | ||||||||||||||||||||||||
(USD thousands) | Less than 12 months | Equal to or greater than 12 months | Total | |||||||||||||||||||||
Gross Unrealized | Gross Unrealized | Gross Unrealized | ||||||||||||||||||||||
Estimated Fair Value | Losses | Estimated Fair Value | Losses | Estimated Fair Value | Losses | |||||||||||||||||||
Investment grade securities: | ||||||||||||||||||||||||
U.S. corporate securities | $ | 1,137,224 | $ | 172,194 | $ | 1,141,332 | $ | 399,942 | $ | 2,278,556 | $ | 572,136 | ||||||||||||
Canadian and Canadian provincial governments | 242,153 | 8,484 | 106,505 | 8,746 | 348,658 | 17,230 | ||||||||||||||||||
Residential mortgage-backed securities | 105,818 | 21,388 | 275,684 | 37,384 | 381,502 | 58,772 | ||||||||||||||||||
Foreign corporate securities | 486,332 | 53,748 | 219,760 | 89,413 | 706,092 | 143,161 | ||||||||||||||||||
Asset-backed securities | 90,759 | 20,779 | 189,007 | 86,683 | 279,766 | 107,462 | ||||||||||||||||||
Commercial mortgage-backed securities | 419,538 | 212,518 | 234,307 | 156,252 | 653,845 | 368,770 | ||||||||||||||||||
U.S. government and agencies | — | — | — | — | — | — | ||||||||||||||||||
State and political subdivisions | 5,945 | 547 | 25,637 | 6,288 | 31,582 | 6,835 | ||||||||||||||||||
Other foreign government securities | 97,393 | 2,195 | 3,524 | 292 | 100,917 | 2,487 | ||||||||||||||||||
Investment grade securities | 2,585,162 | 491,853 | 2,195,756 | 785,000 | �� | 4,780,918 | 1,276,853 | |||||||||||||||||
Non-investment grade securities: | ||||||||||||||||||||||||
U.S. corporate securities | 128,276 | 36,070 | 120,981 | 87,811 | 249,257 | 123,881 | ||||||||||||||||||
Asset-backed securities | 7,853 | 5,788 | 10,407 | 17,171 | 18,260 | 22,959 | ||||||||||||||||||
Foreign corporate securities | 20,208 | 7,090 | 12,383 | 10,181 | 32,591 | 17,271 | ||||||||||||||||||
Residential mortgage-backed securities | 16,312 | 4,411 | 11,301 | 11,032 | 27,613 | 15,443 | ||||||||||||||||||
Commercial mortgage-backed securities | — | — | 213 | 1,581 | 213 | 1,581 | ||||||||||||||||||
State and political subdivisions | — | — | 3,000 | 5,024 | 3,000 | 5,024 | ||||||||||||||||||
Non-investment grade securities | 172,649 | 53,359 | 158,285 | 132,800 | 330,934 | 186,159 | ||||||||||||||||||
Total fixed maturity securities | $ | 2,757,811 | $ | 545,212 | $ | 2,354,041 | $ | 917,800 | $ | 5,111,852 | $ | 1,463,012 | ||||||||||||
Equity securities | $ | 49,880 | $ | 30,666 | $ | 48,636 | $ | 59,141 | $ | 98,516 | $ | 89,807 | ||||||||||||
Total number of securities in an unrealized loss position | 929 | 865 | 1,794 | |||||||||||||||||||||
As of December 31, 2008 | ||||||||||||||||||||||||
(USD thousands) | Less than 12 months | Equal to or greater than 12 months | Total | |||||||||||||||||||||
Gross Unrealized | Gross Unrealized | Gross Unrealized | ||||||||||||||||||||||
Estimated Fair Value | Losses | Estimated Fair Value | Losses | Estimated Fair Value | Losses | |||||||||||||||||||
Investment grade securities: | ||||||||||||||||||||||||
U.S. corporate securities | $ | 1,407,547 | $ | 240,299 | $ | 810,115 | $ | 281,947 | $ | 2,217,662 | $ | 522,246 | ||||||||||||
Canadian and Canadian provincial governments | 114,754 | 2,751 | 89,956 | 4,420 | 204,710 | 7,171 | ||||||||||||||||||
Residential mortgage-backed securities | 190,525 | 58,026 | 213,310 | 39,794 | 403,835 | 97,820 | ||||||||||||||||||
Foreign corporate securities | 508,102 | 82,490 | 140,073 | 59,816 | 648,175 | 142,306 | ||||||||||||||||||
Asset-backed securities | 118,608 | 40,139 | 173,505 | 99,147 | 292,113 | 139,286 | ||||||||||||||||||
Commercial mortgage-backed securities | 523,475 | 200,567 | 188,638 | 126,163 | 712,113 | 326,730 | ||||||||||||||||||
U.S. government and agencies | — | — | — | — | — | — | ||||||||||||||||||
State and political subdivisions | 20,403 | 1,947 | 18,250 | 5,936 | 38,653 | 7,883 | ||||||||||||||||||
Other foreign government securities | 16,419 | 33 | 4,125 | 117 | 20,544 | 150 | ||||||||||||||||||
Investment grade securities | 2,899,833 | 626,252 | 1,637,972 | 617,340 | 4,537,805 | 1,243,592 | ||||||||||||||||||
Non-investment grade securities: | ||||||||||||||||||||||||
U.S. corporate securities | 140,426 | 36,615 | 60,378 | 39,884 | 200,804 | 76,499 | ||||||||||||||||||
Asset-backed securities | 3,465 | 2,060 | 11,156 | 5,951 | 14,621 | 8,011 | ||||||||||||||||||
Foreign corporate securities | 24,637 | 7,227 | 2,032 | 3,387 | 26,669 | 10,614 | ||||||||||||||||||
Residential mortgage-backed securities | 8,089 | 5,944 | 4,496 | 3,012 | 12,585 | 8,956 | ||||||||||||||||||
Non-investment grade securities | 176,617 | 51,846 | 78,062 | 52,234 | 254,679 | 104,080 | ||||||||||||||||||
Total fixed maturity securities | $ | 3,076,450 | $ | 678,098 | $ | 1,716,034 | $ | 669,574 | $ | 4,792,484 | $ | 1,347,672 | ||||||||||||
Equity securities | $ | 61,180 | $ | 26,923 | $ | 61,249 | $ | 41,844 | $ | 122,429 | $ | 68,767 | ||||||||||||
Total number of securities in an unrealized loss position | 1,039 | 677 | 1,716 |
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Reinsurance Group of America, Incorporated
Investments
Investments
Consolidated Investment Related Gains and Losses
(USD thousands) | Three Months Ended | Current Qtr | ||||||||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | vs. PY | |||||||||||||||||||
2009 | 2008 | 2008 | 2008 | 2008 | Quarter | |||||||||||||||||||
Fixed Maturity and Equity Securities: | ||||||||||||||||||||||||
Gain on investment activity | $ | 12,230 | $ | 10,204 | $ | 6,169 | $ | 5,928 | $ | 10,080 | $ | 2,150 | ||||||||||||
Loss on investment activity | (19,649 | ) | (5,759 | ) | (8,564 | ) | (4,378 | ) | (5,360 | ) | (14,289 | ) | ||||||||||||
Impairments | (39,825 | ) | (15,563 | ) | (109,283 | ) | (548 | ) | (5,150 | ) | (34,675 | ) | ||||||||||||
Net gain/(loss) on fixed maturity and equity securities | (47,244 | ) | (11,118 | ) | (111,678 | ) | 1,002 | (430 | ) | (46,814 | ) | |||||||||||||
Other non-derivative gain/(loss), net | (2,409 | ) | (672 | ) | (64 | ) | (344 | ) | 369 | (2,778 | ) | |||||||||||||
Free-standing Derivatives: | ||||||||||||||||||||||||
Credit Default Swaps | (1,911 | ) | (6,732 | ) | (2,526 | ) | 1,413 | (6,486 | ) | 4,575 | ||||||||||||||
Interest Rate Swaps | (38,864 | ) | 152,098 | 7,681 | (6,462 | ) | 5,515 | (44,379 | ) | |||||||||||||||
Futures | 22,311 | 10,870 | 6,120 | 2,294 | (185 | ) | 22,496 | |||||||||||||||||
Other | 3,109 | 2,153 | 1,440 | 1,877 | — | 3,109 | ||||||||||||||||||
Currency Forwards | (2,042 | ) | 1,638 | 289 | (764 | ) | 777 | (2,819 | ) | |||||||||||||||
Total free-standing derivatives | (17,397 | ) | 160,027 | 13,004 | (1,642 | ) | (379 | ) | (17,018 | ) | ||||||||||||||
Embedded Derivatives: | ||||||||||||||||||||||||
B36 | (40,425 | ) | (161,021 | ) | (106,797 | ) | (11,452 | ) | (148,528 | ) | 108,103 | |||||||||||||
GMXB | 35,213 | (230,775 | ) | (35,772 | ) | 5,357 | (6,292 | ) | 41,505 | |||||||||||||||
Total embedded derivatives | (5,212 | ) | (391,796 | ) | (142,569 | ) | (6,095 | ) | (154,820 | ) | 149,608 | |||||||||||||
Net gain/(loss) on total derivatives | (22,609 | ) | (231,769 | ) | (129,565 | ) | (7,737 | ) | (155,199 | ) | 132,590 | |||||||||||||
Total investment related losses, net | $ | (72,262 | ) | $ | (243,559 | ) | $ | (241,307 | ) | $ | (7,079 | ) | $ | (155,260 | ) | $ | 82,998 | |||||||
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