Exhibit 99.1
[RGA logo]
NEWS
For further information, contact
Jack B. Lay
Executive Vice President and
Chief Financial Officer
(636) 736-7439
FOR IMMEDIATE RELEASE
- ---------------------
REINSURANCE GROUP OF AMERICA REPORTS
------------------------------------
STRONG INCREASE IN FIRST-QUARTER EARNINGS
-----------------------------------------
ST. LOUIS, April 24, 2003 - Reinsurance Group of America,
Incorporated (NYSE:RGA), one of North America's leading providers of life
reinsurance, reported net income for the first quarter of $32.7 million, or
$0.66 per diluted share, compared with net income of $27.8 million, or $0.56
per diluted share in the prior year, an 18 percent increase on a per share
basis. Operating income* from continuing operations increased 20 percent on a
per share basis and totaled $38.9 million, or $0.78 per diluted share.
Operating income for the quarter excluded $5.8 million, after tax, in net
capital losses and related deferred acquisition costs and a $0.4 million
after-tax loss associated with the company's discontinued accident and health
segment. Operating income from continuing operations in the prior year totaled
$32.4 million, or $0.65 per diluted share, and excluded $2.6 million, after
tax, in net capital losses and related deferred acquisition costs, a $0.7
million after-tax goodwill write-off and a $1.3 million after-tax loss
associated with the company's discontinued accident and health segment.
First-quarter net premiums increased 16 percent, to $545.2 million
from $469.1 million in 2002. Consolidated net investment income increased 22
percent, to $107.1 million from $88.0 million in 2002, due to a 30 percent
increase in invested assets.
"Consolidated results for the quarter were strong, in terms of both
top- and bottom-line performance," said A. Greig Woodring, president and chief
executive officer. "The strong business volume that we experienced in the
latter part of 2002 continued this quarter."
- more -
Add One
Woodring continued, "For the quarter, net premiums in the U.S.
increased to $369.9 million, or 6 percent. This rate of increase is below our
full-year expectation. We still anticipate our full-year growth rate to
approximate 10 percent. Mortality experience for the quarter was approximately
$4.0 million favorable on a pre-tax basis compared to expectation. The
favorable mortality was somewhat offset by a reduction in spreads on our
asset-intensive business totaling approximately $1.5 million on a pretax
basis. Pre-tax operating income* for the quarter totaled $50.2 million
compared with $40.4 million in the prior-year quarter. Pre-tax operating
income excludes $7.5 million and $2.0 million in net capital losses and
related deferred acquisition costs in the current and prior-period quarter,
respectively. Business activity in the U.S. remains strong.
"Canada reported pre-tax operating income* of $10.9 million for the
first quarter compared with $8.9 million in the prior year, a 22 percent
increase. Operating income excludes an immaterial amount of net capital losses
in both periods. Net premiums increased 4 percent for the quarter and
mortality experience was slightly favorable. We are pleased with the segment's
results for the quarter.
"International operations continued to grow at a strong pace, with
net premiums increasing 72 percent to $126.3 million. We experienced steady
growth across all our markets. Pre-tax operating income* for the quarter
totaled $3.3 million, which excludes $0.4 million in net capital gains. This
represents a 43 percent increase over prior-period pre-tax operating income of
$2.3 million, excluding $0.3 million in net capital losses. Earnings were
somewhat dampened by higher-than-expected claim levels in the current period.
We expect expanding profits from these operations going forward as our base of
business in force increases; however, results are likely to be less consistent
than our more established operations in North America due to the smaller
relative size of this segment's base of business."
Effective in the first quarter of 2003, the company's Other
International reporting segment no longer includes the results of its Latin
America business. Ongoing traditional reinsurance business originating in
Latin America is now included within the U.S. segment results, since it is now
managed and supported by the U.S. division's staff. The majority of this
reinsurance is written in Mexico. The run-off results from reinsurance of the
privatized pension program in Argentina are reflected in the Corporate segment
along with an immaterial amount of direct life business written in Argentina.
Prior-period amounts have been reclassified to conform to the current period
presentation to enhance comparability.
- more -
Add Two
Woodring concluded, "We are pleased to be off to a strong start in
2003. The results this quarter and last year demonstrate the strength of our
operations and favored position within the life reinsurance market."
* Operating income before and after tax is a non-GAAP financial measure that
management believes better measures the ongoing profitability of the company's
continuing operations. Management believes operating income and operating
income per share are measures widely used by investors, rating agencies and
securities analysts. However, the definition of operating income can vary by
company and is not considered a substitute for GAAP net income. Historically,
the company's operating income has differed from GAAP net income due to the
exclusion of net capital gains and losses and related deferred acquisition
costs and any net loss from the company's discontinued accident and health
segment. Reconciliations of operating income to GAAP net income are provided
within the text of this press release.
The company announced that its board of directors declared a regular
quarterly dividend of $0.06 per share, payable May 28 to shareholders of
record as of May 7.
A conference call to discuss the company's first-quarter results will
begin at 9:00 a.m. Eastern Time on Friday, April 25. Interested parties may
access the call by dialing 800-210-9006 (domestic) or 719-457-2621
(international). The access code is 211628. A live audio webcast of the
conference call will be available on the company's investor relations web page
at www.rgare.com. A replay of the conference call will be available at the
same address for 10 days following the conference call. A replay of the
conference call will also be available via telephone through May 2 at
888-203-1112 (domestic) or 719-457-0820, access code 211628.
Reinsurance Group of America, Incorporated, through its subsidiaries,
RGA Reinsurance Company and RGA Life Reinsurance Company of Canada, is among
the largest providers of life reinsurance in North America. In addition to its
North American operations, Reinsurance Group of America, Incorporated has
subsidiary companies, offices or joint ventures in Argentina, Australia,
Barbados, Hong Kong, India, Japan, Mexico, South Africa, South Korea, Spain,
Taiwan and the United Kingdom. Worldwide, the company has approximately $797
billion of life reinsurance in force, and assets of $9.6 billion. MetLife,
Inc. is the beneficial owner of approximately 59 percent of RGA's outstanding
shares.
- more -
Add Three
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including, among others,
statements relating to projections of the earnings, revenues, income or loss,
future financial performance and growth potential of Reinsurance Group of
America, Incorporated and its subsidiaries (which we refer to in the following
paragraphs as "we," "us" or "our"). The words "intend," "expect," "project,"
"estimate," "predict," "anticipate," "should," "believe," and other similar
expressions also are intended to identify forward-looking statements.
Forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified. Future events and actual
results, performance and achievements could differ materially from those set
forth in, contemplated by or underlying the forward-looking statements.
Numerous important factors could cause actual results and events to differ
materially from those expressed or implied by forward-looking statements
including, without limitation, (1) adverse changes in mortality and claims
experience, (2) market or economic conditions that adversely affect our
ability to make timely sales of investment securities, (3) competitive factors
and competitors' responses to our initiatives, (4) general economic conditions
affecting the demand for insurance and reinsurance in our current and planned
markets, (5) changes in our financial strength and credit ratings or those of
Metropolitan Life Insurance Company ("MetLife") or its subsidiaries, and the
effect of such changes on our future results of operations and financial
condition, (6) fluctuations in U.S. or foreign currency exchange rates,
interest rates, or securities and real estate markets, (7) changes in
investment portfolio yields due to interest rate or credit quality changes,
(8) the stability of governments and economies in the markets in which we
operate, (9) adverse litigation or arbitration results, (10) the success of
our clients, (11) successful execution of our entry into new markets, (12)
successful development and introduction of new products, (13) regulatory
action that may be taken by state Departments of Insurance with respect to us,
MetLife, or its subsidiaries, (14) changes in laws, regulations, and
accounting standards applicable to us, our subsidiaries, or our business, and
(15) other risks and uncertainties described in this document and in our other
filings with the Securities and Exchange Commission.
- more -
Add Four
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. You are cautioned not to place undue reliance on the
forward-looking statements, which 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.
- tables attached -
Add Five
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
Three Months Ended
----------------------
(Unaudited) March 31,
- -----------------------------------------------------------------
2003 2002
-------- --------
Revenues:
Net premiums $545,215 $469,105
Investment income, net of
related expenses 107,145 88,013
Realized investment losses, net (9,828) (3,591)
Other revenues 11,017 6,685
-------- --------
Total revenues 653,549 560,212
Benefits and expenses:
Claims and other policy benefits 423,605 387,726
Interest credited 40,796 27,725
Policy acquisition costs and other
insurance expenses 104,581 71,499
Other operating expenses 25,755 19,517
Interest expense 8,959 8,554
-------- --------
Total benefits and expenses 603,696 515,021
-------- --------
Income from continuing operations
before income taxes 49,853 45,191
Provision for income taxes 16,693 16,155
-------- --------
Income from continuing operations 33,160 29,036
Discontinued operations:
Loss from discontinued accident
and health operations, net
of income taxes (418) (1,256)
-------- --------
Net income $ 32,742 $ 27,780
======== ========
- more -
Add Six
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share data)
Three Months Ended
------------------
(Unaudited) March 31,
- -----------------------------------------------------------------
2003 2002
------- -------
Earnings per share from continuing
operations:
Basic earnings per share $ 0.67 $ 0.59
Diluted earnings per share $ 0.67 $ 0.58
Diluted earnings before realized
investment losses and
goodwill write-off in 2002 $ 0.78 $ 0.65
Earnings per share from net income:
Basic earnings per share $ 0.66 $ 0.56
Diluted earnings per share $ 0.66 $ 0.56
Weighted average number of common
and common equivalent shares
outstanding (in thousands) 49,731 49,750
- more -
Add Seven
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Three Months Ended
(Unaudited) March 31,
- --------------------------------------------------------------------
2003 2002
--------- ---------
Gross life reinsurance in force (in billions)
North American business $ 627.4 $ 559.7
International business 170.0 92.2
Gross life reinsurance written (in billions)
North American business 28.4 38.6
International business 15.3 3.4
Consolidated cash and invested assets
(in millions) 7,197.3 5,557.9
Invested asset book yield - trailing
three months excluding funds withheld 6.67% 6.64%
Investment portfolio mix
Cash and short-term investments 1.90% 2.38%
Fixed maturity securities 51.09% 53.60%
Mortgage loans 3.68% 3.11%
Policy loans 11.69% 13.94%
Funds withheld at interest 29.89% 25.02%
Other invested assets 1.75% 1.95%
Book value per share outstanding $ 25.18 $ 20.17
Book value per share outstanding, before
impact of FAS 115* 23.42 21.10
Treasury stock 1,415,276 1,751,230
- more -
<FN>
* Book value per share outstanding, before impact of FAS 115, is a
non-GAAP financial measure that management believes is important in
evaluating the balance sheet ignoring the effect of mark-to-market
adjustments that primarily relate to changes in interest rates and
credit spreads on investment securities since they were acquired.
Add Eight
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Dollars in thousands)
Three Months Ended March 31, 2003
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
----------- --------- ----------- --------
Revenues:
Net premiums $368,807 $ 1,098 $ -- $369,905
Investment income,
net of related
expenses 42,701 36,334 -- 79,035
Realized investment
losses, net (5,244) (2,861) -- (8,105)
Other revenues 1,813 1,247 6,911 9,971
-------- ------- ------- --------
Total revenues 408,077 35,818 6,911 450,806
Benefits and expenses:
Claims and other
policy benefits 293,726 1,619 -- 295,345
Interest credited 15,319 25,141 -- 40,460
Policy acquisition
costs and other
insurance expenses 50,805 8,028 2,520 61,353
Other operating
expenses 8,455 1,112 1,443 11,010
-------- ------- ------- --------
Total benefits
and expenses 368,305 35,900 3,963 408,168
Income/(loss) before
income taxes $ 39,772 $ (82) $ 2,948 $ 42,638
======== ======= ======= ========
Three Months Ended March 31, 2002
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
----------- --------- ----------- --------
Revenues:
Net premiums $346,830 $ 868 $ -- $347,698
Investment income,
net of related
expenses 37,155 23,718 103 60,976
Realized investment
gains/(losses), net (2,045) 564 -- (1,481)
Other revenues 120 261 6,151 6,532
-------- ------- ------- --------
Total revenues 382,060 25,411 6,254 413,725
Benefits and expenses:
Claims and other
policy benefits 287,753 6,001 -- 293,754
Interest credited 14,032 13,693 -- 27,725
Policy acquisition
costs and other
insurance expenses 41,493 1,845 1,900 45,238
Other operating
expenses 6,418 200 1,932 8,550
-------- ------- ------- --------
Total benefits
and expenses 349,696 21,739 3,832 375,267
Income before
income taxes $ 32,364 $ 3,672 $ 2,422 $ 38,458
======== ======= ======= ========
- more -
Add Nine
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CANADIAN OPERATIONS
(Dollars in thousands)
Three Months Ended
March 31,
2003 2002
------- -------
Revenues:
Net premiums $48,586 $46,533
Investment income, net of related expenses 19,766 15,605
Realized investment losses, net (263) (81)
Other revenues (65) (29)
------- -------
Total revenues 68,024 62,028
Benefits and expenses:
Claims and other policy benefits 49,130 45,723
Interest credited 289 --
Policy acquisition costs and other
insurance expenses 5,593 5,217
Other operating expenses 2,385 2,243
------- -------
Total benefits and expenses 57,397 53,183
Income before income taxes $10,627 $ 8,845
======= =======
- more -
Add Ten
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
OTHER INTERNATIONAL
(Dollars in thousands)
Three Months Ended March 31, 2003
Europe Total
Asia & South Inter-
Pacific Africa national
------- ------ --------
Revenues:
Net premiums $42,410 $83,877 $126,287
Investment income,
net of related expenses 2,727 840 3,567
Realized investment gains/
(losses), net (387) 825 438
Other revenues 200 (176) 24
------- ------- --------
Total revenues 44,950 85,366 130,316
Benefits and expenses:
Claims and other policy benefits 27,264 53,783 81,047
Interest credited -- -- --
Policy acquisition costs and
other insurance expenses 11,522 25,534 37,056
Other operating expenses 4,527 3,440 7,967
Interest expense 269 200 469
------- ------- --------
Total benefits and expenses 43,582 82,957 126,539
Income before income taxes $ 1,368 $ 2,409 $ 3,777
======= ======= ========
Three Months Ended March 31, 2002
Europe Total
Asia & South Inter-
Pacific Africa national
------- ------ --------
Revenues:
Net premiums $33,152 $40,213 $ 73,365
Investment income,
net of related expenses 1,369 231 1,600
Realized investment losses, net (50) (295) (345)
Other revenues 696 6 702
------- ------- --------
Total revenues 35,167 40,155 75,322
Benefits and expenses:
Claims and other policy benefits 22,568 25,190 47,758
Interest credited -- -- --
Policy acquisition costs and
other insurance expenses 8,224 11,948 20,172
Other operating expenses 2,731 2,487 5,218
Interest expense 173 78 251
------- ------- --------
Total benefits and expenses 33,696 39,703 73,399
Income before income taxes $ 1,471 $ 452 $ 1,923
======= ======= ========
Add Eleven
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CORPORATE AND OTHER
(Dollars in thousands)
Three Months Ended
March 31,
- ---------------------------------------------------------------------
2003 2002
-------- --------
Revenues:
Net premiums $ 437 $ 1,509
Investment income, net of related expenses 4,777 9,832
Realized investment losses, net (1,898) (1,684)
Other revenues 1,087 (520)
-------- --------
Total revenues 4,403 9,137
Benefits and expenses:
Claims and other policy benefits (1,917) 491
Interest credited 47 --
Policy acquisition costs and other
insurance expenses 579 872
Other operating expenses 4,393 3,506
Interest expense 8,490 8,303
-------- --------
Total benefits and expenses 11,592 13,172
Loss before income taxes $ (7,189) $ (4,035)
======== ========
# # #