Exhibit 99.1
[RGA logo]
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
------------------------------------
SECOND-QUARTER RESULTS; ADVERSE EFFECT OF HIGH CLAIMS
-----------------------------------------------------
LEVELS AND INCREASE IN OTHER RESERVES
-------------------------------------
ST. LOUIS, JULY 21, 2005 - Reinsurance Group of America,
Incorporated (NYSE:RGA), a leading global provider of life reinsurance,
reported net income for the second quarter of $21.8 million, or $0.34 per
diluted share, compared to net income of $65.3 million, or $1.04 per diluted
share, in the prior-year quarter. RGA uses a non-GAAP financial measure
called operating income as a basis for analyzing financial results. The
definition of operating income and reconciliations to GAAP net income are
provided in the following tables. Operating income decreased to $20.1
million, or $0.32 per diluted share, from $57.2 million, or $0.91 per
diluted share, in the year-ago quarter. Second-quarter net premiums totaled
$931.4 million compared to $797.3 million a year ago. Net investment income
totaled $146.3 million versus $134.2 million the year before. The company's
conference call, previously scheduled for July 26, will be held tomorrow,
July 22, at 9 a.m. Eastern Time. Telephone numbers and webcast information
can be found later in this press release.
A. Greig Woodring, president and chief executive officer,
commented, "We are obviously disappointed with the results for the quarter.
High claims levels in the U.S. and the UK along with an increase to reserves
for the Argentine pension business, which is currently in run-off, were the
primary contributing factors to the sub-par earnings. The level of claims in
both the U.S. and UK operations during the quarter is well above the
expected levels generated by our
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business models, and as such, is not expected to continue on an ongoing
basis. This is a long- term business, which can be subject to volatility
over shorter-term periods. Net premiums met our expected growth rate,
increasing 17 percent over the prior-year quarter.
"The U.S. segment reported pre-tax net income of $30.6 million
compared with $75.8 million in the prior-year quarter, while pre-tax
operating income decreased to $36.8 million from $68.4 million. We have
performed an extensive review of the claims experience during the quarter
relative to expected levels. While the number of claims was at anticipated
levels, we experienced an unusually high dollar volume of claims in excess
of $1.0 million per life during the quarter. The dollar amount of such
claims was approximately $32.0 million higher than the prior-year quarter.
We also experienced a higher-than-expected flow of large claims in the first
quarter, although to a lesser extent than occurred in the current quarter.
Net premiums in the U.S. segment rose 8 percent to $575.9 million from
$531.3 million in the prior year, compared with our expected full-year
growth rate of at least 10 percent.
"Our Canada operations reported another strong quarter with pre-tax
net income of $20.3 million compared to $21.2 million a year ago. The
prior-year period included $6.9 million in net realized investment gains
compared to $2.4 million net realized investment gains in the current
quarter. Pre-tax operating income was up 25 percent to $17.9 million from
$14.3 million. Net premiums increased $15.1 million, or 24 percent, for the
quarter, and totaled $76.9 million. Approximately $6.4 million of the
increase in net premiums and approximately $1.5 million of the increase in
pre-tax operating income were the result of a favorable currency exchange
rate. Mortality experience for the segment continues to be favorable.
"Other International operations, which include Asia Pacific and
Europe and South Africa, reported mixed results. Asia Pacific reported a
strong quarter with pre-tax net income of $13.8 million compared with $4.7
million in the year-ago quarter. Pre-tax operating income totaled $13.7
million compared to the prior-year quarter total of $4.8 million. Asia
Pacific benefited from strong premium levels across all countries, as net
premiums increased to $145.0 million from $84.2 million in the year-earlier
quarter. Stronger foreign currencies contributed approximately $10.5 million
to the premium growth and approximately $1.4 million to the growth in
pre-tax operating income.
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Results in our Europe and South Africa segment were adversely
affected by high claim levels in the UK. After an unusually strong first
quarter, the segment reported a second-quarter pre-tax net loss of $6.6
million compared to pre-tax net income of $11.8 million in the year before,
which was also a particularly strong quarter. The pre-tax operating loss
totaled $6.5 million compared with $10.7 million operating income in the
prior-year quarter. Claims from several large treaties in the UK were
unusually high during the quarter, due in part to a lag in client claim
reporting. However, those treaties are performing within our pricing
expectations on an inception-to-date basis. Net premium flow for the segment
was good, totaling $133.0 million compared to $118.9 million a year ago.
Foreign currency fluctuations did not have a significant impact on the
quarter's results.
"Results in the Corporate and Other segment include a pre-tax
charge of $24.0 million, or about $0.24 per diluted share on an after-tax
basis, to increase the reserves associated with our reinsurance of Argentine
pension accounts. We commuted our treaty with one of our larger clients
during the quarter and are in discussions with the remaining clients
regarding settlement of all our obligations under the remaining treaties. We
believe the additional $24.0 million in reserves should eliminate any future
negative impact on our earnings, thereby reducing the uncertainty associated
with this run-off business."
For the first half of 2005, net income totaled $88.4 million, or
$1.39 per diluted share, compared to $127.1 million, or $2.03 per diluted
share, in the year-ago period. Operating income totaled $80.5 million, or
$1.26 per diluted share, compared to $109.3 million, or $1.74 per diluted
share in the prior-year period. Consolidated premiums were up 14 percent, to
$1,833.2 million from $1,611.2 million.
Woodring concluded, "Our extensive analysis to date leads us to
expect that the claims experience will revert to more normal levels,
although we cannot reasonably expect to recoup all of the current quarter
shortfall in earnings during the remainder of this year. The nature of our
business is such that our results will continue to be subject to volatility.
Our treaties are very long-term in duration, and the level of death claims
is subject to significant volatility on a monthly, quarterly and even on an
annual basis. We will continue to analyze the recent claims experience as we
develop our intermediate-term operating and financial goals later this
quarter. Based upon the analysis to date, we do not expect to materially
change our intermediate growth
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expectations. Market fundamentals are very good right now in North America
and growth prospects are very strong internationally. We remain well
positioned to take advantage of attractive opportunities on a global basis."
The company also announced that its board of directors declared a
regular quarterly dividend of $0.09 per share, payable August 26 to
shareholders of record as of August 5.
A conference call to discuss the company's second-quarter results
will begin at 9 a.m. Eastern Time on Friday, July 22. Interested parties may
access the call by dialing 888-569-5033 (domestic) or 719-457-2653
(international). The access code is 838240. 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 15 days following the conference call. A replay of the
conference call will also be available via telephone through July 29 at
888-203-1112 (domestic) or 719-457-0820, access code 838240.
Reinsurance Group of America, Incorporated, through its
subsidiaries, is among the largest global providers of life reinsurance. In
addition to its U.S. and Canadian operations, Reinsurance Group of America,
Incorporated has subsidiary companies or offices in Australia, Barbados,
Hong Kong, India, Ireland, Japan, Mexico, South Africa, South Korea, Spain,
Taiwan, and the United Kingdom. Worldwide, the company has approximately
$1.6 trillion of life reinsurance in force, and assets of $15.0 billion.
MetLife, Inc. is the beneficial owner of approximately 51 percent of RGA's
outstanding shares.
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
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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,
morbidity or claims experience, (2) changes in our financial strength and
credit ratings or those of MetLife, Inc. ("MetLife"), the beneficial owner
of a majority of our common shares, or its subsidiaries, and the effect of
such changes on our future results of operations and financial condition,
(3) inadequate risk analysis and underwriting, (4) general economic
conditions or a prolonged economic downturn affecting the demand for
insurance and reinsurance in our current and planned markets, (5) the
availability and cost of collateral necessary for regulatory reserves and
capital, (6) market or economic conditions that adversely affect our ability
to make timely sales of investment securities, (7) risks inherent in our
risk management and investment strategy, including changes in investment
portfolio yields due to interest rate or credit quality changes, (8)
fluctuations in U.S. or foreign currency exchange rates, interest rates, or
securities and real estate markets, (9) adverse litigation or arbitration
results, (10) the adequacy of reserves, resources and accurate information
relating to settlements, awards and terminated and discontinued lines of
business, (11) the stability of and actions by governments and economies in
the markets in which we operate, (12) competitive factors and competitors'
responses to our initiatives, (13) the success of our clients, (14)
successful execution of our entry into new markets, (15) successful
development and introduction of new products and distribution opportunities,
(16) our ability to successfully integrate and operate reinsurance business
that we acquire, (17) regulatory action that may be taken by state
Departments of Insurance with respect to us, MetLife, or its subsidiaries,
(18) our dependence on third parties, including those insurance companies
and reinsurers to which we cede some reinsurance, third-party investment
managers and others, (19) the threat of natural disasters or terrorist
attacks anywhere in the world where we or our clients do business, (20)
changes in laws, regulations, and accounting standards applicable to us, our
subsidiaries, or our business, (21) the effect of our status as a holding
company and regulatory restrictions on our ability to pay principal of and
interest on our debt obligations, and (22) other risks and uncertainties
described in this document and in our other filings with the Securities and
Exchange Commission.
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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.
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Operating Income
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 certain net investment related gains and
losses, as well as changes in the fair value of embedded derivatives and
related deferred acquisition costs. These items tend to be highly variable,
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.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Net Income From Continuing Operations
to Operating Income
(Dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-----------------------------------------------
2005 2004 2005 2004
---- ---- ---- ----
GAAP net income-continuing
operations $ 25,160 $ 68,390 $ 92,424 $131,384
Investment related
(gains)/losses (11,994) (8,175) (14,726) (20,859)
Change in value of embedded
derivatives 12,945 (11,356) (1,719) (12,345)
DAC offset for embedded
derivatives and investment
related (gains)/losses, net (6,004) 8,359 4,549 11,126
-----------------------------------------------
Operating income $ 20,107 $ 57,218 $ 80,528 $109,306
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) Three Months Ended June 30, 2005
Investment Change in
Pre-tax related value of Pre-tax
net (gains)/ embedded operating
income losses, derivatives, income
(loss) net net (loss)
------- ---------- ------------ ---------
U.S. Operations:
Traditional $ 30,740 $ (1,632) $ -- $ 29,108
Asset Intensive (3,739) 1,522(1) 6,313(2) 4,096
Financial Reinsurance 3,555 -- -- 3,555
-----------------------------------------------
Total U.S. 30,556 (110) 6,313 36,759
Canada Operations 20,279 (2,361) -- 17,918
Asia Pacific Operations 13,831 (133) -- 13,698
Europe & South Africa (6,641) 107 -- (6,534)
----------------------------------------------
Other Intl Operations 7,190 (26) -- 7,164
Corporate & Other (25,416) (7,707)(3) -- (33,123)
-----------------------------------------------
Consolidated $ 32,609 $(10,204) $ 6,313 $ 28,718
===============================================
<FN>
(1) Asset Intensive is net of $(322) DAC offset.
(2) Asset Intensive is net of DAC offsets of $(13,604) included in change in
deferred acquisition cost associated with change in value of embedded
derivative.
(3) Corporate & Other is net of DAC offsets of $3,048 included in Policy
acquisition costs and other insurance expenses.
Three Months Ended June 30, 2004
Pre-tax Investment Change in Pre-tax
net related value of operating
income (gains)/ embedded income
(loss) losses, net derivative (loss)
------- ----------- ---------- ---------
U.S. Operations:
Traditional $ 63,101 $ (3,662) $ -- $ 59,439
Asset Intensive 9,488 388(1) (4,179)(2) 5,697
Financial Reinsurance 3,221 -- -- 3,221
---------------------------------------------
Total U.S. 75,810 (3,274) (4,179) 68,357
Canada Operations 21,211 (6,869) -- 14,342
Asia Pacific Operations 4,694 149 -- 4,843
Europe & South Africa 11,829 (1,143) -- 10,686
---------------------------------------------
Other Intl Operations 16,523 (994) -- 15,529
Corporate & Other (8,151) (1,987) -- (10,138)
---------------------------------------------
Consolidated $105,393 $(13,124) $(4,179) $ 88,090
=============================================
<FN>
(1) Asset Intensive is net of $(433) DAC offset.
(2) Asset Intensive is net of DAC offsets of $13,293 included in change in
deferred acquisition cost associated with change in value of embedded
derivative.
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands, except per share data)
Six Months Ended June 30, 2005
Pre-tax Investment Change in Pre-tax
net related value of operating
income (gains)/ embedded income
(loss) losses, net derivative (loss)
------- ----------- ---------- ---------
U.S. Operations:
Traditional $ 75,816 $ (1,209) $ -- $ 74,607
Asset Intensive 13,887 (1,455)(1) (540)(2) 11,892
Financial Reinsurance 6,837 -- -- 6,837
----------------------------------------------
Total U.S. 96,540 (2,664) (540) 93,336
Canada Operations 44,488 (3,195) -- 41,293
Asia Pacific Operations 18,603 (54) -- 18,549
Europe & South Africa 8,117 64 -- 8,181
----------------------------------------------
Other Intl Operations 26,720 10 -- 26,730
Corporate & Other (34,604) (7,807)(3) -- (42,411)
----------------------------------------------
Consolidated $133,144 $(13,656) $(540) $118,948
==============================================
(1) Asset Intensive is net of $205 DAC offset.
(2) Asset Intensive is net of DAC offsets of $2,104 included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
(3) Corporate & Other is net of DAC offsets of $3,048 included in
Policy acquisition costs and other insurance expenses.
Six Months Ended June 30, 2004
Pre-tax Investment Change in Pre-tax
net related value of operating
income (gains)/ embedded income
(loss) losses, net derivative (loss)
------- ----------- ---------- ---------
U.S. Operations:
Traditional $127,133 $(11,220) $ -- $115,913
Asset Intensive 12,996 301(1) (1,501)(2) 11,796
Financial Reinsurance 5,928 -- -- 5,928
-----------------------------------------------
Total U.S. 146,057 (10,919) (1,501) 133,637
Canada Operations 37,131 (8,178) -- 28,953
Asia Pacific Operations 11,491 (198) -- 11,293
Europe & South Africa 18,089 (4,302) -- 13,787
-----------------------------------------------
Other Intl Operations 29,580 (4,500) -- 25,080
Corporate & Other (12,560) (7,886) -- (20,446)
-----------------------------------------------
Consolidated $200,208 $(31,483) $(1,501) $167,224
===============================================
(1) Asset Intensive is net of $(376) DAC offset.
(2) Asset Intensive is net of DAC offsets of $17,493 included in
change in deferred acquisition cost associated with change in
value of embedded derivative.
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
- -----------------------------------------------------------------------------
2005 2004 2005 2004
---- ---- ---- ----
Revenues:
Net premiums $ 931,354 $797,308 $1,833,174 $1,611,182
Investment income, net
of related expenses 146,284 134,185 303,337 267,745
Investment related
gains/(losses), net 12,950 12,691 16,929 31,107
Change in value of
embedded derivatives (19,917) 17,472 2,644 18,994
Other revenues 20,661 14,759 31,464 26,609
--------------------- -----------------------
Total revenues 1,091,332 976,415 2,187,548 1,955,637
Benefits and expenses:
Claims and other
policy benefits 827,930 634,802 1,565,983 1,281,856
Interest credited 38,615 44,332 93,668 91,350
Policy acquisition
costs and other
insurance expenses 157,855 134,157 301,831 277,225
Change in deferred
acquisition cost
associated with
change in value of
embedded derivatives (13,604) 13,293 2,104 17,493
Other operating expenses 38,032 34,896 71,038 68,425
Interest expense 9,895 9,542 19,780 19,080
--------------------- -----------------------
Total benefits
and expenses 1,058,723 871,022 2,054,404 1,755,429
--------------------- -----------------------
Income from continuing
operations before
income taxes 32,609 105,393 133,144 200,208
Provision for income
taxes 7,449 37,003 40,720 68,824
--------------------- -----------------------
Income from continuing
operations 25,160 68,390 92,424 131,384
Discontinued operations:
Loss from discontinued
accident and health
operations, net of
income taxes (3,343) (3,053) (4,050) (3,947)
Cumulative effect of
change in accounting
principle -- -- -- (361)
--------------------- -----------------------
Net income $ 21,817 65,337 $ 88,374 $ 127,076
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
- --------------------------------------------------------------------------
2005 2004 2005 2004
---- ---- ---- ----
Earnings per share from
continuing operations:
Basic earnings per share $ 0.40 $ 1.10 $ 1.48 $ 2.11
Diluted earnings per share $ 0.39 $ 1.09 $ 1.45 $ 2.09
Diluted earnings before
realized investment gains/
(losses), change in value
of embedded derivatives,
and related deferred
acquisition costs $ 0.32 $ 0.91 $ 1.26 $ 1.74
Earnings per share from
net income:
Basic earnings per share $ 0.35 $ 1.05 $ 1.41 $ 2.04
Diluted earnings per share $ 0.34 $ 1.04 $ 1.39 $ 2.03
Weighted average number of
common and common equivalent
shares outstanding
(in thousands) 63,764 62,755 63,806 62,723
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Six Months Ended
(Unaudited) June 30,
- --------------------------------------------------------------------------
2005 2004
---- ----
Gross life reinsurance in force (in billions)
North American business $ 1,139.4 $ 1,047.3
International business $ 453.8 $ 309.4
Gross life reinsurance written (in billions)
North American business $ 96.8 $ 103.2
International business $ 69.5 $ 55.3
Consolidated cash and invested assets
(in millions) $ 11,341.2 $ 9,502.9
Invested asset book yield - trailing
three months excluding funds withheld 5.99% 5.79%
Investment portfolio mix
Cash and short-term investments 1.70% 1.42%
Fixed maturity securities 55.72% 49.11%
Mortgage loans 5.54% 5.70%
Policy loans 8.40% 9.48%
Funds withheld at interest 26.63% 31.82%
Other invested assets 2.01% 2.47%
Short-term debt (in millions) $ 176.6 $ 27.3
Long-term debt (in millions) $ 226.8 $ 374.1
Book value per share outstanding $ 39.60 $ 31.38
Book value per share outstanding, before
impact of FAS 115* $ 33.39 $ 30.17
Total stockholders' equity (in millions) 2,480.7 1,955.2
Total stockholders' equity, before
impact of FAS 115* (in millions) 2,091.2 1,880.1
Treasury shares 489,640 814,122
Common stock outstanding 62,638,633 62,314,151
<FN>
* Book value per share outstanding and total stockholders' equity, 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.
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Unaudited) (Dollars in thousands)
Three Months Ended June 30, 2005
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
----------- -------- ----------- -----
Revenues:
Net premiums $574,795 $ 1,117 $ -- $575,912
Investment income, net
of related expenses 59,475 42,545 (8) 102,012
Realized investment
gains/(losses), net 1,632 (1,844) -- (212)
Change in value of
embedded derivatives -- (19,917) -- (19,917)
Other revenues 933 2,797 7,854 11,584
-------------------------------------------------
Total revenues 636,835 24,698 7,846 669,379
Benefits and expenses:
Claims and other
policy benefits 497,019 4,934 -- 501,953
Interest credited 14,303 23,730 -- 38,033
Policy acquisition costs
and other insurance
expenses 84,732 12,141 2,946 99,819
Change in deferred ac-
quisition cost associated
with change in value
of embedded derivatives -- (13,604) -- (13,604)
Other operating expenses 10,041 1,236 1,345 12,622
-------------------------------------------------
Total benefits
and expenses 606,095 28,437 4,291 638,823
Income before
income taxes $ 30,740 $ (3,739) $3,555 $ 30,556
======== ======== ====== ========
Three Months Ended June 30, 2004
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
----------- --------- ----------- ------
Revenues:
Net premiums $530,129 $ 1,190 $ -- $531,319
Investment income, net
of related expenses 53,974 47,495 72 101,541
Realized investment
gains/(losses), net 3,662 (821) -- 2,841
Change in value of
embedded derivatives -- 17,472 -- 17,472
Other revenues 931 1,907 6,958 9,796
-------- ------- ------ --------
Total revenues 588,696 67,243 7,030 662,969
Benefits and expenses:
Claims and other
policy benefits 429,423 3,246 -- 432,669
Interest credited 12,117 31,704 -- 43,821
Policy acquisition
costs and other
insurance expenses 72,714 8,484 2,280 83,478
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- 13,293 -- 13,293
Other operating
expenses 11,341 1,028 1,529 13,898
-------- ------- ------ --------
Total benefits and
expenses 525,595 57,755 3,809 587,159
Income before
income taxes $ 63,101 $ 9,488 $3,221 $ 75,810
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. OPERATIONS
(Dollars in thousands)
Six Months Ended June 30, 2005
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
----------- --------- ----------- -----
Revenues:
Net premiums $1,141,689 $ 2,341 $ -- $1,144,030
Investment income, net
of related expenses 114,706 100,817 33 215,556
Realized investment
gain/(losses),net 1,209 1,660 -- 2,869
Change in value of
embedded derivatives -- 2,644 -- 2,644
Other revenues 1,854 3,844 15,158 20,856
-----------------------------------------------
Total revenues 1,259,458 111,306 15,191 1,385,955
Benefits and expenses:
Claims and other
policy benefits 980,280 3,250 2 983,532
Interest credited 28,310 63,981 -- 92,291
Policy acquisition
costs and other
insurance expenses 155,749 25,510 5,570 186,829
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- 2,104 -- 2,104
Other operating expenses 19,303 2,574 2,782 24,659
-----------------------------------------------
Total benefits and
expenses 1,183,642 97,419 8,354 1,289,415
Income before
income taxes $ 75,816 $ 13,887 $ 6,837 $ 96,540
========== ======== ======= ==========
Six Months Ended June 30, 2004
Asset- Financial Total
Traditional Intensive Reinsurance U.S.
----------- --------- ----------- -----
Revenues:
Net premiums $1,061,340 $ 2,372 $ -- $1,063,712
Investment income, net
of related expenses 108,027 92,962 115 201,104
Realized investment
gain/(losses),net 11,220 (677) -- 10,543
Change in value of
embedded derivatives -- 18,994 -- 18,994
Other revenues 2,265 3,577 13,338 19,180
---------- -------- ------- ----------
Total revenues 1,182,852 117,228 13,453 1,313,533
Benefits and expenses:
Claims and other
policy benefits 860,314 2,225 -- 862,539
Interest credited 24,195 66,198 -- 90,393
Policy acquisition
costs and other
insurance expenses 148,145 16,129 4,574 168,848
Change in deferred ac-
quisition cost associated
with change in value of
embedded derivatives -- 17,493 -- 17,493
Other operating expenses 23,065 2,187 2,951 28,203
-------- -------- ------- ----------
Total benefits and
expenses 1,055,719 104,232 7,525 1,167,476
Income before
income taxes $ 127,133 $ 12,996 $ 5,928 $ 146,057
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
CANADIAN OPERATIONS
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
- -------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $ 76,854 $61,830
Investment income, net of related expenses 28,813 23,437
Realized investment gains, net 2,381 6,869
Other revenues 19 31
-------- -------
Total revenues 108,067 92,167
Benefits and expenses:
Claims and other policy benefits 74,251 59,499
Interest credited 252 418
Policy acquisition costs and other
insurance expenses 9,665 8,278
Other operating expenses 3,620 2,761
-------- -------
Total benefits and expenses 87,788 70,956
Income before income taxes $ 20,279 $21,211
======== =======
Six Months Ended
(Unaudited) June 30,
- --------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $150,610 $121,978
Investment income, net of related expenses 57,573 47,417
Realized investment gains, net 3,215 8,178
Other revenues 53 69
-------- --------
Total revenues 211,451 177,642
Benefits and expenses:
Claims and other policy benefits 142,897 118,865
Interest credited 609 795
Policy acquisition costs and other
insurance expenses 16,378 15,361
Other operating expenses 7,079 5,490
-------- --------
Total benefits and expenses 166,963 140,511
Income before income taxes $ 44,488 $ 37,131
======== ========
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Add Fifteen
Europe & South Africa
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
- ---------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $132,972 $118,887
Investment income, net of related expenses 2,353 863
Realized investment gains, net (107) 1,143
Other revenues 69 444
--------- ---------
Total revenues 135,287 121,337
Benefits and expenses:
Claims and other policy benefits 112,117 73,809
Interest credited 190 --
Policy acquisition costs and other
insurance expenses 22,120 29,842
Other operating expenses 7,118 5,524
Interest expense 383 333
-------- ---------
Total benefits and expenses 141,928 109,508
Income before income taxes $ (6,641) $ 11,829
======== ========
Six Months Ended
(Unaudited) June 30,
- ---------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $274,330 $236,090
Investment income, net of related expenses 4,908 2,407
Realized investment gains, net (64) 4,302
Other revenues 121 882
-------- --------
Total revenues 279,295 243,681
Benefits and expenses:
Claims and other policy benefits 208,449 155,806
Interest credited 553 --
Policy acquisition costs and other
insurance expenses 48,516 58,873
Other operating expenses 12,778 10,206
Interest expense 882 707
-------- ---------
Total benefits and expenses 271,178 225,592
Income before income taxes $ 8,117 $ 18,089
======== ========
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Add Sixteen
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
- --------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $145,019 $ 84,178
Investment income, net of related expenses 7,310 3,029
Realized investment gains/(losses), net 133 (149)
Other revenues 2,135 2,950
--------- --------
Total revenues 154,597 90,008
Benefits and expenses:
Claims and other policy benefits 110,617 67,380
Policy acquisition costs and other
insurance expenses 22,549 11,878
Other operating expenses 7,159 5,673
Interest expense 441 383
-------- --------
Total benefits and expenses 140,766 85,314
Income before income taxes $ 13,831 $ 4,694
======== ========
Six Months Ended
(Unaudited) June 30,
- --------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $263,226 $187,717
Investment income, net of related expenses 13,538 6,764
Realized investment gains/(losses), net 54 198
Other revenues 1,948 3,585
-------- --------
Total revenues 278,766 198,264
Benefits and expenses:
Claims and other policy benefits 201,277 142,225
Policy acquisition costs and other
insurance expenses 46,204 33,408
Other operating expenses 11,833 10,415
Interest expense 849 725
-------- --------
Total benefits and expenses 260,163 186,773
Income before income taxes $ 18,603 $ 11,491
======== ========
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Add Seventeen
CORPORATE AND OTHER
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
- --------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $ 597 $ 1,094
Investment income, net of related expenses 5,796 5,315
Realized investment gains, net 10,755 1,987
Other revenues 6,854 1,538
-------- --------
Total revenues 24,002 9,934
Benefits and expenses:
Claims and other policy benefits 28,992 1,445
Interest credited 140 93
Policy acquisition costs and other
insurance expenses 3,702 681
Other operating expenses 7,513 7,040
Interest expense 9,071 8,826
-------- --------
Total benefits and expenses 49,418 18,085
Income before income taxes $(25,416) $ (8,151)
======== ========
Six Months Ended
(Unaudited) June 30,
- --------------------------------------------------------------------
2005 2004
---- ----
Revenues:
Net premiums $ 978 $ 1,685
Investment income, net of related expenses 11,762 10,053
Realized investment gains, net 10,855 7,886
Other revenues 8,486 2,893
-------- --------
Total revenues 32,081 22,517
Benefits and expenses:
Claims and other policy benefits 29,828 2,421
Interest credited 215 162
Policy acquisition costs and other
insurance expenses 3,904 735
Other operating expenses 14,689 14,111
Interest expense 18,049 17,648
-------- --------
Total benefits and expenses 66,685 35,077
Income before income taxes $(34,604) $(12,560)
======== ========
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