UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): July 24, 2014
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
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Missouri | | 1-11848 | | 43-1627032 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (IRS Employer Identification Number) |
1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017
(Address of Principal Executive Office)
Registrant’s telephone number, including area code: (636) 736-7000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02 | Results of Operations and Financial Condition. |
On July 24, 2014, Reinsurance Group of America, Incorporated (the “Company”) issued (1) a press release (the “Press Release”) announcing its earnings for the three-month period ended June 30, 2014, and providing certain additional information, a copy of which is furnished with this report as Exhibit 99.1, and (2) a Quarterly Financial Supplement for the quarter ended June 30, 2014, a copy of which is attached hereto as Exhibit 99.2. The Press Release also notes that a conference call will be held on July 25, 2014 to discuss the financial and operating results for the three-month period ended June 30, 2014. The Press Release and Quarterly Financial Supplement are furnished and are not filed pursuant to Instruction B.2 of Form 8-K.
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Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
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Exhibit No. | | Exhibit |
99.1 | | Press Release of Reinsurance Group of America, Incorporated dated July 24, 2014 |
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99.2 | | Quarterly Financial Supplement for the quarter ended June 30, 2014 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | REINSURANCE GROUP OF AMERICA, INCORPORATED |
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Date: July 24, 2014 | | | By: | | /s/ Jack B. Lay |
| | | | | Jack B. Lay |
| | | | | Senior Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
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Exhibit Number | | Description |
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99.1 | | Press Release dated July 24, 2014 |
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99.2 | | Quarterly Financial Supplement for the quarter ended June 30, 2014 |
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS SECOND-QUARTER RESULTS
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• | Earnings per diluted share: operating income* $2.23, net income $2.84 |
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• | Net premiums rose seven percent quarter over quarter; up eight percent in original currencies |
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• | Strong results were driven by international segments, both EMEA and Asia Pacific, and continued momentum in Global Financial Solutions (GFS) |
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• | Quarterly dividend raised 10 percent |
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• | Approximately 0.8 million shares repurchased for $64.1 million during the quarter |
ST. LOUIS, July 24, 2014 – Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported operating income* of $155.1 million, or $2.23 per diluted share, compared with a net operating loss of $71.8 million, or $0.99 per diluted share, in the prior-year quarter. Net income totaled $198.3 million, or $2.84 per diluted share, compared with a net loss of $49.6 million, or $0.69 per diluted share, in the prior-year quarter. The prior-year period included an after-tax charge of approximately $184 million, or $2.53 per diluted share, to increase claims liabilities in Australia. A generally weaker U.S. dollar benefited the current quarter by less than $0.01 per share.
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| | | | | | | | | | | | | | | | |
| | Quarterly Results | | Year-to-Date Results |
($ in thousands, except per share data) | | 2014 | | 2013 | | 2014 | | 2013 |
Net premiums | | $ | 2,183,160 |
| | $ | 2,035,156 |
| | $ | 4,283,797 |
| | $ | 4,014,849 |
|
Net income (loss) | | 198,296 |
| | (49,612 | ) | | 334,960 |
| | 135,923 |
|
Net income (loss) per diluted share | | 2.84 |
| | (0.69 | ) | | 4.75 |
| | 1.85 |
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Operating income (loss)* | | 155,131 |
| | (71,797 | ) | | 269,938 |
| | 51,050 |
|
Operating income (loss) per diluted share* | | 2.23 |
| | (0.99 | ) | | 3.83 |
| | 0.69 |
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Book value per share | | 97.21 |
| | 82.97 |
| | | | |
Book value per share (excl. Accumulated Other Comprehensive Income “AOCI”)* | | 73.54 |
| | 66.31 |
| | | | |
Total assets | | 43,171,051 |
| | 38,790,621 |
| | | | |
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* | See ‘Use of Non-GAAP Financial Measures’ below |
Consolidated net premiums increased seven percent to $2.2 billion. On an original currency basis, net premiums rose eight percent over the second quarter of 2013. Investment income decreased eight percent to $410.6 million from $444.2 million in the year-earlier quarter, primarily attributable to a $45.1 million reduction in the fair value of options contracts underlying equity indexed annuities.
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Excluding spread-based businesses and the value of associated derivatives, investment income increased 12 percent over year-ago levels, continuing to reflect a growing average invested asset base. The average investment yield increased two basis points to 4.79 percent this period compared to last year’s second quarter.
The company’s effective tax rate on operating income was 34.6 percent this quarter, and 33 percent year to date. The estimated effective tax rate on operating income is approximately 33 percent to 34 percent going forward.
Greig Woodring, president and chief executive officer, commented, “We are pleased to report strong operating results this quarter, as our diversified source of earnings by geography and product line continues to serve us well. Operating income rose to $155.1 million, or $2.23 per diluted share, premiums grew seven percent over the prior-year period and our annualized operating return on equity exceeded 12 percent this quarter. Our international segments saw strength in both the top line and bottom line, while GFS experienced strong new business trends and profitability across the board. Underwriting results were in line on a global basis, with EMEA particularly strong, U.S. individual mortality basically back in line, but claims in Canada remained elevated. Like the first quarter, the claims in Canada were driven by large claims, those exceeding $1 million, but the experience improved in June, and we continue to believe that these results represent normal volatility as opposed to a systemic trend. We are encouraged by the results overall, our new business activity is strong, and we continue to be optimistic about the opportunities that we see before us.
“We continue to focus on executing our capital management strategy that entails deploying excess capital into attractive block acquisitions, share repurchases and shareholder dividends. During the quarter, we repurchased approximately 818,000 shares for a total cost of $64.1 million, leaving $123.3 million under the current share repurchase authorization. The cumulative effect of shares repurchased over the past 12 months has reduced the weighted average diluted share count by more than four percent compared to the prior-year quarter. We also increased our quarterly shareholder dividend by ten percent to $0.33 per share. Our deployable, excess capital position still exceeds $500 million. Ending book value per share this quarter was $97.21 including AOCI, and increased $2.03 during the second quarter to $73.54, excluding AOCI.”
SEGMENT RESULTS
U.S. and Latin America
Traditional
The U.S. and Latin America Traditional segment reported a slight increase in pre-tax operating income to $89.0 million from $86.5 million in the prior-year second quarter. Individual mortality results rebounded from the weak first quarter, while results from the Group business reflected adverse experience in the current quarter. Traditional net premiums rose five percent to $1,189.8 million from $1,136.7 million a year ago, reflecting growth in all traditional product lines. Pre-tax net income totaled $94.0 million for the quarter, compared with $90.2 million in the second quarter of 2013.
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Non-Traditional
The Asset Intensive business reported another strong quarter with pre-tax operating income totaling $44.0 million compared with $40.2 million last year. Results were elevated in both periods with the current quarter benefiting from favorable net interest rate spread performance on fixed annuities and favorable equity markets. Pre-tax net income increased to $81.8 million from $69.2 million a year ago, including the favorable effects above as well as changes in the fair value of certain embedded derivatives and realized capital gains, net of DAC offsets.
The Financial Reinsurance business continues to perform well and reported pre-tax operating income of $13.6 million, up from $11.9 million last year, reflecting ongoing growth in underlying treaties. Pre-tax net income totaled $13.7 million this quarter and $11.8 million in the prior-year period.
Canada
Canadian operations reported pre-tax operating income of $30.7 million this quarter, down from $31.7 million in the prior-year period. Higher-than-expected individual mortality claims, particularly large claims exceeding $1 million, contributed to the adverse results this quarter. Additionally, a relatively weaker Canadian dollar adversely affected pre-tax operating income by approximately $1.9 million for the quarter. Reported net premiums increased six percent over the prior-year quarter and totaled $253.6 million. In Canadian dollars, premiums rose 13 percent. Pre-tax net income totaled $35.0 million compared with $35.7 million in the second quarter of 2013.
Europe, Middle East and Africa (EMEA)
EMEA’s pre-tax operating income increased sharply to $44.7 million from last year’s $11.5 million, reflecting very favorable mortality and morbidity results, particularly in the U.K. Net foreign currency fluctuations improved pre-tax operating income by approximately $3.7 million. Net reported premiums increased 17 percent and totaled $340.9 million, compared with $292.2 million last year. Original currency premiums increased nine percent over the prior-year level. Pre-tax net income totaled $61.3 million versus $11.9 million in the year-ago quarter. Revenues in the U.K. were boosted by a transaction announced in May, while the bottom-line impact of that transaction in this quarter was not significant.
Asia Pacific
Asia Pacific pre-tax operating income was very strong and totaled $29.3 million versus a pre-tax operating loss of $282.6 million last year due to the previously noted charge. The strong results this period reflect continued momentum of top- and bottom-line results across most regions, along with higher fee income of approximately $11.6 million, pre-tax, from the reinstatement and conversion of an existing treaty in Japan. Results from operations in Australia were just above break-even this period. Premiums in Australia were flat for the period, reflecting the net effect of some run-off of treaties offset by rate increases. Segment-wide reported net premiums rose 11 percent to $393.7 million from $355.2 million in the prior-year period.
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Corporate and Other
The Corporate and Other segment reported pre-tax operating losses of $14.1 million and $7.5 million for the second quarter of 2014 and 2013, respectively. Current quarter expenses were higher, partly due to higher compensation expenses and an increase in interest expense associated with the $400 million senior note offering last September. This segment reported a pre-tax net loss of $20.2 million this quarter compared with $6.2 million in the prior-year period.
Dividend Declaration
The board of directors increased the quarterly dividend 10 percent, to $0.33 from $0.30, payable August 29 to shareholders of record as of August 8.
Earnings Conference Call
A conference call to discuss second-quarter results will begin at 9 a.m. Eastern Time on Friday, July 25. Interested parties may access the call by dialing 877-340-7912 (domestic) or 719-325-4853 (international). The access code is 1123197. A live audio webcast of the conference call will be available on the company’s investor relations website at www.rgare.com. A replay of the conference call will be available at the same address for 90 days following the conference call. A telephonic replay will also be available through August 2 at 888-203-1112 (domestic) or 719-457-0820 (international), access code 1123197.
The company has posted to its website a Quarterly Financial Supplement that includes financial information for all segments as well as information on its investment portfolio. Additionally, the company posts periodic reports, press releases and other useful information on its investor relations website.
Use of Non-GAAP Financial Measures
RGA uses a non-GAAP financial measure called operating income as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs. Management believes that operating income, on a pre-tax and after‑tax basis, better measures the ongoing profitability and underlying trends of the company’s continuing operations, primarily because that measure excludes substantially all of the effect of net investment related gains and losses, as well as changes in the fair value of certain embedded derivatives and related deferred acquisition costs. These items can be volatile, primarily due to the credit market and interest rate environment, and are not necessarily indicative of the performance of the company’s underlying businesses. Additionally, operating income excludes any net gain or loss from discontinued operations, the cumulative effect of any accounting changes, and other items that management believes are not indicative of the company’s ongoing operations. The definition of operating income can vary by company and is not considered a substitute for GAAP net income.
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Reconciliations to GAAP net income are provided in the following tables. Additional financial information can be found in the Quarterly Financial Supplement on RGA’s Investor Relations website at www.rgare.com in the “Quarterly Results” tab and in the “Featured Report” section.
Book value per share outstanding before impact of AOCI is a non-GAAP financial measure that management believes is important in evaluating the balance sheet in order to ignore the effects of unrealized amounts primarily associated with mark-to-market adjustments on investments and foreign currency translation.
Operating return on equity is a non-GAAP financial measure calculated as operating income divided by average shareholders’ equity excluding AOCI.
About RGA
Reinsurance Group of America, Incorporated is among the largest global providers of life reinsurance, with operations in Australia, Barbados, Bermuda, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Singapore, South Africa, South Korea, Spain, Taiwan, Turkey, the United Arab Emirates, the United Kingdom and the United States. Worldwide, the company has approximately $3.0 trillion of life reinsurance in force, and assets of $43.2 billion.
Cautionary Statement Regarding Forward-looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements relating to projections of the earnings, revenues, income or loss, 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 capital and credit market conditions and their impact on the Company’s liquidity, access to capital and cost of capital, (2) the impairment of other financial institutions and its effect on the Company’s business, (3) requirements to post collateral or make payments due to declines in market value of assets subject to the Company’s collateral arrangements, (4) the fact that the determination of allowances and impairments taken on the Company’s investments is highly subjective, (5) adverse changes in mortality, morbidity, lapsation or claims experience, (6) changes in the Company’s financial strength and credit ratings and the effect of such changes on the Company’s future results of operations and financial condition, (7) inadequate risk analysis and underwriting, (8) general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in the Company’s current and planned markets, (9) the availability and cost of collateral necessary for regulatory reserves and capital, (10) market or economic conditions that adversely affect the value of the Company’s
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investment securities or result in the impairment of all or a portion of the value of certain of the Company’s investment securities, that in turn could affect regulatory capital, (11) market or economic conditions that adversely affect the Company’s ability to make timely sales of investment securities, (12) risks inherent in the Company’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes, (13) fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets, (14) adverse litigation or arbitration results, (15) the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business, (16) the stability of and actions by governments and economies in the markets in which the Company operates, including ongoing uncertainties regarding the amount of United States sovereign debt and the credit ratings thereof, (17) competitive factors and competitors’ responses to the Company’s initiatives, (18) the success of the Company’s clients, (19) successful execution of the Company’s entry into new markets, (20) successful development and introduction of new products and distribution opportunities, (21) the Company’s ability to successfully integrate and operate reinsurance business that the Company acquires, (22) action by regulators who have authority over the Company’s reinsurance operations in the jurisdictions in which it operates, (23) the Company’s dependence on third parties, including those insurance companies and reinsurers to which the Company cedes some reinsurance, third-party investment managers and others, (24) the threat of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics anywhere in the world where the Company or its clients do business, (25) interruption or failure of the Company’s telecommunication, information technology or other operational systems, or the Company’s failure to maintain adequate security to protect the confidentiality or privacy of personal or sensitive data stored on such systems, (26) changes in laws, regulations, and accounting standards applicable to the Company, its subsidiaries, or its business, (27) the effect of the Company’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations, and (28) other risks and uncertainties described in this document and in the Company’s other filings with the SEC.
Forward-looking statements should be evaluated together with the many risks and uncertainties that affect our business, including those mentioned in this document and described in the periodic reports we file with the Securities and Exchange Commission. These forward-looking statements speak only as of the date on which they are made. We do not undertake any obligations to update these forward-looking statements, even though our situation may change in the future. We qualify all of our forward-looking statements by these cautionary statements. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, you are advised to review the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2013.
Investor Contact
Jeff Hopson
Senior Vice President – Investor Relations
(636) 736-7000
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Consolidated Net Income to Operating Income
(Dollars in thousands)
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| | | | | | | | | | | | | | | |
(Unaudited) | Three Months Ended June 30, | | Six Months Ended June 30, |
| 2014 | | 2013 | | 2014 | | 2013 |
GAAP net income (loss) | $ | 198,296 |
| | $ | (49,612 | ) | | $ | 334,960 |
| | $ | 135,923 |
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Reconciliation to operating income (loss): | | | | | | | |
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | (26,820 | ) | | 23,726 |
| | (43,827 | ) | | 55,160 |
|
Capital (gains) losses on funds withheld, included in investment income | (3,870 | ) | | (7,625 | ) | | (4,123 | ) | | (8,946 | ) |
Embedded derivatives: | | | | | | | |
Included in investment related (gains) losses, net | (47,873 | ) | | (54,291 | ) | | (82,700 | ) | | (146,313 | ) |
Included in interest credited | 4,495 |
| | (20,905 | ) | | 231 |
| | (33,457 | ) |
DAC offset, net | 30,903 |
| | 36,910 |
| | 65,397 |
| | 78,912 |
|
Gain on repurchase of collateral finance facility securities | — |
| | — |
| | — |
| | (30,229 | ) |
Operating income (loss) | $ | 155,131 |
| | $ | (71,797 | ) | | $ | 269,938 |
| | $ | 51,050 |
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Reconciliation of Consolidated Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
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| | | | | | | | | | | | | | | |
(Unaudited) | Three Months Ended June 30, | | Six Months Ended June 30, |
| 2014 | | 2013 | | 2014 | | 2013 |
Income (loss) before income taxes | $ | 300,535 |
| | $ | (74,758 | ) | | $ | 499,975 |
| | $ | 204,069 |
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Reconciliation to pre-tax operating income (loss): | | | | | | | |
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net | (38,136 | ) | | 37,057 |
| | (64,442 | ) | | 85,899 |
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Capital (gains) losses on funds withheld, included in investment income | (5,954 | ) | | (11,733 | ) | | (6,343 | ) | | (13,764 | ) |
Embedded derivatives: | | | | | | | |
Included in investment related (gains) losses, net | (73,652 | ) | | (83,525 | ) | | (127,232 | ) | | (225,097 | ) |
Included in interest credited | 6,916 |
| | (32,161 | ) | | 356 |
| | (51,472 | ) |
DAC offset, net | 47,543 |
| | 56,786 |
| | 100,611 |
| | 121,404 |
|
Gain on repurchase of collateral finance facility securities | — |
| | — |
| | — |
| | (46,506 | ) |
Pre-tax operating income (loss) | $ | 237,252 |
| | $ | (108,334 | ) | | $ | 402,925 |
| | $ | 74,533 |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
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(Unaudited) | Three Months Ended June 30, 2014 |
| Pre-tax net income (loss) | | Capital (gains) losses, derivatives and other, net | | Change in value of embedded derivatives, net | | Pre-tax operating income (loss) |
U.S. and Latin America Operations: | | | | | | | |
Traditional | $ | 93,988 |
| | $ | (5,967 | ) | | $ | 933 |
| | $ | 88,954 |
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Non-Traditional: | | | | | | | |
Asset Intensive | 81,797 |
| | (22,813 | ) | (1) | (14,957 | ) | (2) | 44,027 |
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Financial Reinsurance | 13,677 |
| | (68 | ) | | — |
| | 13,609 |
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Total U.S. and Latin America | 189,462 |
| | (28,848 | ) | | (14,024 | ) | | 146,590 |
|
Canada Operations | 35,020 |
| | (4,294 | ) | | — |
| | 30,726 |
|
Europe, Middle East and Africa | 61,322 |
| | (16,641 | ) | | — |
| | 44,681 |
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Asia Pacific Operations | 34,928 |
| | (5,601 | ) | | — |
| | 29,327 |
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Corporate and Other | (20,197 | ) | | 6,125 |
| | — |
| | (14,072 | ) |
Consolidated | $ | 300,535 |
| | $ | (49,259 | ) | | $ | (14,024 | ) | | $ | 237,252 |
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(1) | Asset Intensive is net of $(5,169) DAC offset. |
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(2) | Asset Intensive is net of $52,712 DAC offset. |
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(Unaudited) | Three Months Ended June 30, 2013 |
| Pre-tax net income (loss) | | Capital (gains) losses, derivatives and other, net | | Change in value of embedded derivatives, net | | Pre-tax operating income (loss) |
U.S. and Latin America Operations: | | | | | | | |
Traditional | $ | 90,213 |
| | $ | (2,320 | ) | | $ | (1,391 | ) | | $ | 86,502 |
|
Non-Traditional: | | | | | | | |
Asset Intensive | 69,209 |
| | 48,499 |
| (1) | (77,478 | ) | (2) | 40,230 |
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Financial Reinsurance | 11,787 |
| | 100 |
| | — |
| | 11,887 |
|
Total U.S. and Latin America | 171,209 |
| | 46,279 |
| | (78,869 | ) | | 138,619 |
|
Canada Operations | 35,659 |
| | (3,970 | ) | | — |
| | 31,689 |
|
Europe, Middle East and Africa | 11,949 |
| | (440 | ) | | — |
| | 11,509 |
|
Asia Pacific Operations | (287,345 | ) | | 4,707 |
| | — |
| | (282,638 | ) |
Corporate and Other | (6,230 | ) | | (1,283 | ) | | — |
| | (7,513 | ) |
Consolidated | $ | (74,758 | ) | | $ | 45,293 |
| | $ | (78,869 | ) | | $ | (108,334 | ) |
| |
(1) | Asset Intensive is net of $19,969 DAC offset. |
| |
(2) | Asset Intensive is net of $36,817 DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
|
| | | | | | | | | | | | | | | |
(Unaudited) | Six Months Ended June 30, 2014 |
| Pre-tax net income (loss) | | Capital (gains) losses, derivatives and other, net | | Change in value of embedded derivatives, net | | Pre-tax operating income (loss) |
U.S. and Latin America Operations: | | | | | | | |
Traditional | $ | 144,960 |
| | $ | (10,191 | ) | | $ | 2,388 |
| | $ | 137,157 |
|
Non-Traditional: | | | | | | | |
Asset Intensive | 152,412 |
| | (42,052 | ) | (1) | (25,328 | ) | (2) | 85,032 |
|
Financial Reinsurance | 26,186 |
| | (151 | ) | | — |
| | 26,035 |
|
Total U.S. and Latin America | 323,558 |
| | (52,394 | ) | | (22,940 | ) | | 248,224 |
|
Canada Operations | 55,084 |
| | (2,235 | ) | | — |
| | 52,849 |
|
Europe, Middle East and Africa | 76,527 |
| | (17,870 | ) | | — |
| | 58,657 |
|
Asia Pacific Operations | 61,239 |
| | (7,254 | ) | | — |
| | 53,985 |
|
Corporate and Other | (16,433 | ) | | 5,643 |
| | — |
| | (10,790 | ) |
Consolidated | $ | 499,975 |
| | $ | (74,110 | ) | | $ | (22,940 | ) | | $ | 402,925 |
|
| |
(1) | Asset Intensive is net of $(3,325) DAC offset. |
| |
(2) | Asset Intensive is net of $103,936 DAC offset. |
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| | | | | | | | | | | | | | | | | | | |
(Unaudited) | Six Months Ended June 30, 2013 |
| Pre-tax net income (loss) | | Capital (gains) losses, derivatives and other, net | | Change in value of embedded derivatives, net | | Gain on debt repurchase | | Pre-tax operating income (loss) |
U.S. and Latin America Operations: | | | | | | | | | |
Traditional | $ | 169,756 |
| | $ | (9,573 | ) | | $ | (1,447 | ) | | $ | — |
| | $ | 158,736 |
|
Non-Traditional: | | | | | | | | | |
Asset Intensive | 158,732 |
| | 63,387 |
| (1) | (136,293 | ) | (2) | — |
| | 85,826 |
|
Financial Reinsurance | 19,828 |
| | 66 |
| | — |
| | — |
| | 19,894 |
|
Total U.S. and Latin America | 348,316 |
| | 53,880 |
| | (137,740 | ) | | — |
| | 264,456 |
|
Canada Operations | 71,967 |
| | (7,401 | ) | | — |
| | — |
| | 64,566 |
|
Europe, Middle East and Africa | 22,912 |
| | (2,212 | ) | | — |
| | — |
| | 20,700 |
|
Asia Pacific Operations | (269,103 | ) | | 9,528 |
| | — |
| | — |
| | (259,575 | ) |
Corporate and Other | 29,977 |
| | 915 |
| | — |
| | (46,506 | ) | | (15,614 | ) |
Consolidated | $ | 204,069 |
| | $ | 54,710 |
| | $ | (137,740 | ) | | $ | (46,506 | ) | | $ | 74,533 |
|
| |
(1) | Asset Intensive is net of $(17,425) DAC offset. |
| |
(2) | Asset Intensive is net of $138,829 DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share data)
|
| | | | | | | | | | | | | | | |
(Unaudited) | Three Months Ended June 30, | | Six Months Ended June 30, |
| 2014 | | 2013 | | 2014 | | 2013 |
Diluted earnings per share from operating income (loss) | $ | 2.23 |
| | $ | (0.99 | ) | | $ | 3.83 |
| | $ | 0.69 |
|
Earnings per share from net income (loss): | | | | | | | |
Basic earnings per share | $ | 2.87 |
| | $ | (0.69 | ) | | $ | 4.80 |
| | $ | 1.86 |
|
Diluted earnings per share (1) | $ | 2.84 |
| | $ | (0.69 | ) | | $ | 4.75 |
| | $ | 1.85 |
|
Weighted average number of common and common equivalent shares outstanding | 69,718 |
| | 72,769 |
| | 70,489 |
| | 73,573 |
|
|
| | | | | | | |
(Unaudited) | At or for the Six Months Ended June 30, |
| 2014 | | 2013 |
Treasury shares | 10,328 |
| | 8,170 |
|
Common shares outstanding | 68,810 |
| | 70,968 |
|
Book value per share outstanding | $ | 97.21 |
| | $ | 82.97 |
|
Book value per share outstanding, before impact of AOCI | $ | 73.54 |
| | $ | 66.31 |
|
|
| |
(1) | As a result of anti-dilutive impact, in periods of a loss, weighted average common shares outstanding (basic) are used in the calculation of diluted earnings per share. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
|
| | | | | | | | | | | | | | | |
(Unaudited) | Three Months Ended June 30, | | Six Months Ended June 30, |
| 2014 | | 2013 | | 2014 | | 2013 |
Revenues: | | | | | | | |
Net premiums | $ | 2,183,160 |
| | $ | 2,035,156 |
| | $ | 4,283,797 |
| | $ | 4,014,849 |
|
Investment income, net of related expenses | 410,607 |
| | 444,234 |
| | 814,982 |
| | 869,365 |
|
Investment related gains (losses), net: | | | | | | | |
Other-than-temporary impairments on fixed maturity securities | (870 | ) | | (9,803 | ) | | (1,173 | ) | | (10,005 | ) |
Other-than-temporary impairments on fixed maturity securities transferred to (from) accumulated other comprehensive income | — |
| | (306 | ) | | — |
| | (306 | ) |
Other investment related gains (losses), net | 119,397 |
| | 58,352 |
| | 204,271 |
| | 152,925 |
|
Total investment related gains (losses), net | 118,527 |
| | 48,243 |
| | 203,098 |
| | 142,614 |
|
Other revenue | 120,726 |
| | 63,009 |
| | 188,316 |
| | 164,916 |
|
Total revenues | 2,833,020 |
| | 2,590,642 |
| | 5,490,193 |
| | 5,191,744 |
|
Benefits and expenses: | | | | | | | |
Claims and other policy benefits | 1,841,885 |
| | 2,030,574 |
| | 3,685,562 |
| | 3,719,484 |
|
Interest credited | 115,962 |
| | 118,345 |
| | 226,556 |
| | 243,828 |
|
Policy acquisition costs and other insurance expenses | 409,374 |
| | 370,505 |
| | 764,247 |
| | 727,862 |
|
Other operating expenses | 127,462 |
| | 113,408 |
| | 238,398 |
| | 232,909 |
|
Interest expense | 35,211 |
| | 29,918 |
| | 70,295 |
| | 58,404 |
|
Collateral finance facility expense | 2,591 |
| | 2,650 |
| | 5,160 |
| | 5,188 |
|
Total benefits and expenses | 2,532,485 |
| | 2,665,400 |
| | 4,990,218 |
| | 4,987,675 |
|
Income (loss) before income taxes | 300,535 |
| | (74,758 | ) | | 499,975 |
| | 204,069 |
|
Income tax expense | 102,239 |
| | (25,146 | ) | | 165,015 |
| | 68,146 |
|
Net income (loss) | $ | 198,296 |
| | $ | (49,612 | ) | | $ | 334,960 |
| | $ | 135,923 |
|
# # #
Exhibit 99.2
Financial Supplement
Second Quarter 2014
(Unaudited)
|
| | | | |
World Headquarters | | Internet address | | Contacts: |
1370 Timberlake Manor Parkway | | www.rgare.com | | Jack B. Lay |
Chesterfield, Missouri 63017 U.S.A. | | | | Senior Executive Vice President |
| | | | and Chief Financial Officer |
| | | | Phone: (636) 736-7000 e-mail: jlay@rgare.com |
| | | | Jeff Hopson |
| | | | Sr. Vice President, Investor Relations |
| | | | Phone: (636) 300-6106 e-mail: jhopson@rgare.com |
|
| | | | | | |
Current Ratings |
| | | |
| | Standard & Poor’s | | A.M. Best | | Moody’s |
Financial Strength Ratings | | | | | | |
RGA Reinsurance Company | | AA- | | A+ | | A1 |
RGA Life Reinsurance Company of Canada | | AA- | | A+ | | NR |
RGA International Reinsurance Company Limited | | AA- | | NR | | NR |
RGA Global Reinsurance Company Limited | | AA- | | NR | | NR |
RGA Reinsurance Company of Australia Limited | | AA- | | NR | | NR |
RGA Americas Reinsurance Company, Ltd. | | AA- | | 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”.
Reinsurance Group of America, Incorporated
Financial Supplement
2nd Quarter 2014
Table of Contents
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Consolidated | |
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Segment Pre-tax Operating Income Summaries and Reconciliations to U.S. GAAP | |
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Investments | |
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Reinsurance Group of America, Incorporated
Financial Supplement
This Financial Supplement is for information purposes only and includes unaudited figures. This report should be read in conjunction with documents filed by Reinsurance Group of America, Incorporated ("RGA") with the SEC.
Non-GAAP Disclosures
RGA uses a non-GAAP financial measure called operating income as a basis for analyzing financial results. This measure also serves as a basis for establishing target levels and awards under RGA’s management incentive programs. Management believes that operating income, on a pre-tax and after-tax basis, better measures the ongoing profitability and underlying trends of the company’s continuing operations, primarily because that measure excludes substantially all of the effect of net investment related gains and losses, as well as changes in the fair value of certain embedded derivatives and related deferred acquisition costs. These items can be volatile, primarily due to the credit market and interest rate environment and are not necessarily indicative of the performance of the company’s underlying businesses. Additionally, operating income excludes any net gain or loss from discontinued operations, the cumulative effect of any accounting changes, and other items that management believes are not indicative of the company’s ongoing operations. The definition of operating income can vary by company and is not considered a substitute for GAAP net income. A reconciliation of income before income taxes of the operating segments to pre-tax operating income (loss) is presented herein.
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.
Additionally, RGA uses a non-GAAP financial measure called operating return on equity, which is calculated as operating income divided by average shareholders’
equity excluding AOCI.
Reinsurance Group of America, Incorporated
SEGMENT RESTRUCTURING
The Company realigned certain operations and management responsibilities to better fit within its geographic-based segments. Mexico and Latin America operations were moved from Europe & South Africa to the U.S. segment, which has been renamed U.S. and Latin America. India operations have been moved from Europe & South Africa to the Asia Pacific segment. Europe & South Africa has been renamed Europe, Middle East and Africa. Prior-period figures have been adjusted to conform to the new reporting alignment.
PRIOR PERIOD RECLASSIFICATIONS
The Company has reclassified the presentation of certain prior-period information to conform to the current presentation.
Reinsurance Group of America, Incorporated Financial Highlights (1) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to Date |
(USD thousands, except inforce & per share data) | | June 30, | | March 31, | | Dec. 31, | | Sept. 30, | | June 30, | | | | | June 30, | | June 30, | | |
| | 2014 | | 2014 | | 2013 | | 2013 | | 2013 | | | | | 2014 | | 2013 | | Change |
Net premiums | | $ | 2,183,160 |
| | $ | 2,100,637 |
| | $ | 2,212,998 |
| | $ | 2,026,180 |
| | $ | 2,035,156 |
| | $ | 148,004 |
| | | | $ | 4,283,797 |
| | $ | 4,014,849 |
| | $ | 268,948 |
|
Net income (loss) | | 198,296 |
| | 136,664 |
| | 144,959 |
| | 137,955 |
| | (49,612 | ) | | 247,908 |
| | | | 334,960 |
| | 135,923 |
| | 199,037 |
|
Operating income (loss) | | 155,131 |
| | 114,807 |
| | 154,509 |
| | 152,887 |
| | (71,797 | ) | | 226,928 |
| | | | 269,938 |
| | 51,050 |
| | 218,888 |
|
Operating return on equity (ex AOCI) - | | | | | | | | | | | | | | | | | | | | |
annualized | | 12.4 | % | | 9.3 | % | | 12.7 | % | | 12.9 | % | | (6.0 | )% | | 18.4 | % | | | | | | | | |
trailing 12 months | | 11.8 | % | | 7.2 | % | | 7.4 | % | | 8.1 | % | | 7.1 | % | | 4.7 | % | | | | | | | | |
Total assets | | 43,171,051 |
| | 40,541,581 |
| | 39,674,473 |
| | 39,526,555 |
| | 38,790,621 |
| | 4,380,430 |
| | | | | | | | |
Assumed Life Reinsurance in Force (in billions) | | | | | | | | | | | | | | | | | | | | |
U.S. and Latin America Traditional | | $ | 1,393.1 |
| | $ | 1,393.2 |
| | $ | 1,397.0 |
| | $ | 1,400.4 |
| | $ | 1,399.6 |
| | $ | (6.5 | ) | | | | | | | | |
U.S. and Latin America Non-Traditional | | 2.2 |
| | 2.2 |
| | 2.2 |
| | 2.2 |
| | 2.2 |
| | — |
| | | | | | | | |
Canada | | 395.8 |
| | 376.7 |
| | 386.4 |
| | 391.1 |
| | 376.4 |
| | 19.4 |
| | | | | | | | |
Europe, Middle East and Africa | | 626.1 |
| | 587.6 |
| | 556.7 |
| | 555.1 |
| | 514.3 |
| | 111.8 |
| | | | | | | | |
Asia Pacific | | 617.2 |
| | 595.6 |
| | 547.6 |
| | 555.0 |
| | 531.3 |
| | 85.9 |
| | | | | | | | |
Total Life Reinsurance in Force | | $ | 3,034.4 |
| | $ | 2,955.3 |
| | $ | 2,889.9 |
| | $ | 2,903.8 |
| | $ | 2,823.8 |
| | $ | 210.6 |
| | | |
|
| |
|
| |
|
|
Assumed New Business Production (in billions) | | | | | | | | | | | | | | | | | | | | |
U.S. and Latin America Traditional | | $ | 21.8 |
| | $ | 20.4 |
| | $ | 21.1 |
| | $ | 22.3 |
| | $ | 22.8 |
| | $ | (1.0 | ) | | | | $ | 42.2 |
| | $ | 52.2 |
| | $ | (10.0 | ) |
U.S. and Latin America Non-Traditional | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | — |
| | — |
| | — |
|
Canada | | 10.4 |
| | 12.4 |
| | 10.4 |
| | 11.6 |
| | 11.1 |
| | (0.7 | ) | | | | 22.8 |
| | 24.0 |
| | (1.2 | ) |
Europe, Middle East and Africa | | 67.7 |
| | 46.5 |
| | 24.6 |
| | 21.4 |
| | 22.3 |
| | 45.4 |
| | | | 114.2 |
| | 60.2 |
| | 54.0 |
|
Asia Pacific | | 18.5 |
| | 19.6 |
| | 22.8 |
| | 36.3 |
| | 47.8 |
| | (29.3 | ) | | | | 38.1 |
| | 63.5 |
| | (25.4 | ) |
Total New Business Production | | $ | 118.4 |
| | $ | 98.9 |
| | $ | 78.9 |
| | $ | 91.6 |
| | $ | 104.0 |
| | $ | 14.4 |
| | | | $ | 217.3 |
| | $ | 199.9 |
| | $ | 17.4 |
|
Per Share and Shares Data | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 2.87 |
| | $ | 1.94 |
| | $ | 2.05 |
| | $ | 1.95 |
| | $ | (0.69 | ) | | $ | 3.56 |
| | | | $ | 4.80 |
| | $ | 1.86 |
| | $ | 2.94 |
|
Operating income | | $ | 2.25 |
| | $ | 1.63 |
| | $ | 2.19 |
| | $ | 2.16 |
| | $ | (0.99 | ) | | $ | 3.24 |
| | | | $ | 3.87 |
| | $ | 0.70 |
| | $ | 3.17 |
|
Diluted earnings per share | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 2.84 |
| | $ | 1.92 |
| | $ | 2.03 |
| | $ | 1.93 |
| | $ | (0.69 | ) | | $ | 3.53 |
| | | | $ | 4.75 |
| | $ | 1.85 |
| | $ | 2.90 |
|
Operating income | | $ | 2.23 |
| | $ | 1.61 |
| | $ | 2.17 |
| | $ | 2.14 |
| | $ | (0.99 | ) | | $ | 3.22 |
| | | | $ | 3.83 |
| | $ | 0.69 |
| | $ | 3.14 |
|
| | | | | | | | | | | | | | | | | | | | |
Wgt. average common shares outstanding | | | | | | | | | | | | | | | | | | | | |
(basic) | | 69,076 |
| | 70,574 |
| | 70,650 |
| | 70,865 |
| | 72,350 |
| | (3,274 | ) | | | | 69,823 |
| | 73,089 |
| | (3,266 | ) |
(diluted) | | 69,718 |
| | 71,264 |
| | 71,332 |
| | 71,391 |
| | 72,769 |
| | (3,051 | ) | | | | 70,489 |
| | 73,573 |
| | (3,084 | ) |
| | | | | | | | | | | | | | | | | | | | |
Common shares issued | | 79,138 |
| | 79,138 |
| | 79,138 |
| | 79,138 |
| | 79,138 |
| | — |
| | | | 79,138 |
| | 79,138 |
| | — |
|
Treasury shares | | 10,328 |
| | 9,624 |
| | 8,370 |
| | 8,595 |
| | 8,170 |
| | 2,158 |
| | | | 10,328 |
| | 8,170 |
| | 2,158 |
|
Common shares outstanding | | 68,810 |
| | 69,514 |
| | 70,768 |
| | 70,543 |
| | 70,968 |
| | (2,158 | ) | | | | 68,810 |
| | 70,968 |
| | (2,158 | ) |
| | | | | | | | | | | | | | | | | | | | |
Book value per share | | $ | 97.21 |
| | $ | 89.92 |
| | $ | 83.87 |
| | $ | 83.58 |
| | $ | 82.97 |
| | | | | | | | | | |
Per share effect of accumulated other | | | | | | | | | | | | | | | | | | | | |
comprehensive income (AOCI) | | $ | 23.67 |
| | $ | 18.41 |
| | $ | 14.21 |
| | $ | 15.60 |
| | $ | 16.66 |
| | | | | | | | | | |
Book value per share, excluding AOCI | | $ | 73.54 |
| | $ | 71.51 |
| | $ | 69.66 |
| | $ | 67.98 |
| | $ | 66.31 |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Shareholder dividends paid | | $ | 20,711.1 |
| | $ | 21,243.6 |
| | $ | 21,177.3 |
| | $ | 21,296.2 |
| | $ | 17,415.9 |
| | $ | 3,295.2 |
| | | | $ | 41,954.7 |
| | $ | 35,168.6 |
| | $ | 6,786.1 |
|
(1) The company realigned certain operations and management responsibilities to better fit within its geographic-based segments. Mexico and Latin America operations were moved from Europe & South Africa to the U.S. segment, which has been renamed U.S. and Latin America. India operations have been moved from Europe & South Africa to the Asia Pacific segment. Europe & South Africa has been renamed Europe, Middle East and Africa. Prior-period figures have been adjusted to conform to the new reporting alignment.
|
(2) As a result of anti-dilutive impact, in periods of a loss, weighted average common shares outstanding (basic) are used in the calculation of diluted earnings per share |
Reinsurance Group of America, Incorporated Consolidated GAAP Income Statement (incl. Operating Income Reconciliations) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr | | | | Year-to Date |
| | June 30, | | March 31, | | Dec. 31, | | Sept. 30, | | June 30, | | vs. PY | | | | June 30, | | June 30, | | |
(USD thousands) | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 | | Quarter | | | | 2014 | | 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 2,183,160 |
| | $ | 2,100,637 |
| | $ | 2,212,998 |
| | $ | 2,026,180 |
| | $ | 2,035,156 |
| | $ | 148,004 |
| | | | $ | 4,283,797 |
| | $ | 4,014,849 |
| | $ | 268,948 |
|
Investment income, net of related expenses | | 410,607 |
| | 404,375 |
| | 461,134 |
| | 369,366 |
| | 444,234 |
| | (33,627 | ) | | | | 814,982 |
| | 869,365 |
| | (54,383 | ) |
Investment related gains (losses), net | | | | | | | | | | | | | | | | | | | | |
OTTI on fixed maturity securities | | (870 | ) | | (303 | ) | | (2,258 | ) | | (391 | ) | | (9,803 | ) | | 8,933 |
| | | | (1,173 | ) | | (10,005 | ) | | 8,832 |
|
OTTI on fixed maturity securities transferred | | | | | | | | | | | | | | | | | | | | |
to/from AOCI | | — |
| | — |
| | — |
| | 59 |
| | (306 | ) | | 306 |
| | | | — |
| | (306 | ) | | 306 |
|
Other investment related gains (losses), net | | 119,397 |
| | 84,874 |
| | 99 |
| | (76,133 | ) | | 58,352 |
| | 61,045 |
| | | | 204,271 |
| | 152,925 |
| | 51,346 |
|
Total investment related gains (losses), net | | 118,527 |
| | 84,571 |
| | (2,159 | ) | | (76,465 | ) | | 48,243 |
| | 70,284 |
| | | | 203,098 |
| | 142,614 |
| | 60,484 |
|
Other revenue | | 120,726 |
| | 67,590 |
| | 64,821 |
| | 70,734 |
| | 63,009 |
| | 57,717 |
| | | | 188,316 |
| | 164,916 |
| | 23,400 |
|
Total revenues | | 2,833,020 |
| | 2,657,173 |
| | 2,736,794 |
| | 2,389,815 |
| | 2,590,642 |
| | 242,378 |
| | | | 5,490,193 |
| | 5,191,744 |
| | 298,449 |
|
Benefits and expenses: | | | | | | | | | | | |
|
| | | | | | | | |
Claims and other policy benefits | | 1,841,885 |
| | 1,843,677 |
| | 1,869,949 |
| | 1,714,899 |
| | 2,030,574 |
| | (188,689 | ) | | | | 3,685,562 |
| | 3,719,484 |
| | (33,922 | ) |
Interest credited | | 115,962 |
| | 110,594 |
| | 172,747 |
| | 59,939 |
| | 118,345 |
| | (2,383 | ) | | | | 226,556 |
| | 243,828 |
| | (17,272 | ) |
Policy acquisition costs and other insurance expenses | | 409,374 |
| | 354,873 |
| | 304,837 |
| | 268,081 |
| | 370,505 |
| | 38,869 |
| | | | 764,247 |
| | 727,862 |
| | 36,385 |
|
Other operating expenses | | 127,462 |
| | 110,936 |
| | 122,136 |
| | 111,672 |
| | 113,408 |
| | 14,054 |
| | | | 238,398 |
| | 232,909 |
| | 5,489 |
|
Interest expense | | 35,211 |
| | 35,084 |
| | 35,072 |
| | 30,831 |
| | 29,918 |
| | 5,293 |
| | | | 70,295 |
| | 58,404 |
| | 11,891 |
|
Collateral finance facility expense | | 2,591 |
| | 2,569 |
| | 2,563 |
| | 2,698 |
| | 2,650 |
| | (59 | ) | | | | 5,160 |
| | 5,188 |
| | (28 | ) |
Total benefits and expenses | | 2,532,485 |
| | 2,457,733 |
| | 2,507,304 |
| | 2,188,120 |
| | 2,665,400 |
| | (132,915 | ) | | | | 4,990,218 |
| | 4,987,675 |
| | 2,543 |
|
Income (loss) before income taxes | | 300,535 |
| | 199,440 |
| | 229,490 |
| | 201,695 |
| | (74,758 | ) | | 375,293 |
| | | | 499,975 |
| | 204,069 |
| | 295,906 |
|
Income tax expense (benefit) | | 102,239 |
| | 62,776 |
| | 84,531 |
| | 63,740 |
| | (25,146 | ) | | 127,385 |
| | | | 165,015 |
| | 68,146 |
| | 96,869 |
|
Net income (loss) | | $ | 198,296 |
| | $ | 136,664 |
| | $ | 144,959 |
| | $ | 137,955 |
| | $ | (49,612 | ) | | $ | 247,908 |
| | | | $ | 334,960 |
| | $ | 135,923 |
| | $ | 199,037 |
|
Pre-tax Operating Income (Loss) Reconciliation: | | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | 300,535 |
| | 199,440 |
| | 229,490 |
| | 201,695 |
| | (74,758 | ) | | 375,293 |
| | | | 499,975 |
| | 204,069 |
| | 295,906 |
|
Investment and derivative losses (gains)— | | | | | | | | | | | | | | | | | | | | |
non-operating (1) | | (38,136 | ) | | (26,306 | ) | | 45,090 |
| | 30,513 |
| | 37,057 |
| | (75,193 | ) | | | | (64,442 | ) | | 85,899 |
| | (150,341 | ) |
Change in value of modified coinsurance and | | | | | | | | | | | | | | | | | | | | |
funds withheld embedded derivatives (1) | | (78,835 | ) | | (77,241 | ) | | 337 |
| | 67,460 |
| | (47,716 | ) | | (31,119 | ) | | | | (156,076 | ) | | (137,974 | ) | | (18,102 | ) |
GMXB embedded derivatives (1) | | 5,183 |
| | 23,661 |
| | (35,098 | ) | | (19,829 | ) | | (35,809 | ) | | 40,992 |
| | | | 28,844 |
| | (87,123 | ) | | 115,967 |
|
Funds withheld losses (gains)—investment income | | (5,954 | ) | | (389 | ) | | (2,540 | ) | | 3,465 |
| | (11,733 | ) | | 5,779 |
| | | | (6,343 | ) | | (13,764 | ) | | 7,421 |
|
EIA embedded derivatives—interest credited | | 6,916 |
| | (6,560 | ) | | 2,795 |
| | (30,292 | ) | | (32,161 | ) | | 39,077 |
| | | | 356 |
| | (51,472 | ) | | 51,828 |
|
DAC offset, net | | 47,543 |
| | 53,068 |
| | 4,334 |
| | (27,330 | ) | | 56,786 |
| | (9,243 | ) | | | | 100,611 |
| | 121,404 |
| | (20,793 | ) |
Gain on repurchase of collateral finance facility securities | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | — |
| | (46,506 | ) | | 46,506 |
|
Operating Income (Loss) Before Income Taxes | | $ | 237,252 |
| | $ | 165,673 |
| | $ | 244,408 |
| | $ | 225,682 |
| | $ | (108,334 | ) | | $ | 345,586 |
| | | | $ | 402,925 |
| | $ | 74,533 |
| | $ | 328,392 |
|
After-tax Operating Income (Loss) Reconciliation: | | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) | | 198,296 |
| | 136,664 |
| | 144,959 |
| | 137,955 |
| | (49,612 | ) | | 247,908 |
| | | | 334,960 |
| | 135,923 |
| | 199,037 |
|
Investment and derivative losses (gains)— | | | | | | | | | | | | | | | | | | | | |
non-operating (1) | | (26,820 | ) | | (17,007 | ) | | 29,161 |
| | 19,174 |
| | 23,726 |
| | (50,546 | ) | | | | (43,827 | ) | | 55,160 |
| | (98,987 | ) |
Change in value of modified coinsurance | | | | | | | | | | | | | | | | | | | | |
and funds withheld embedded derivatives (1) | | (51,242 | ) | | (50,207 | ) | | 219 |
| | 43,849 |
| | (31,015 | ) | | (20,227 | ) | | | | (101,449 | ) | | (89,683 | ) | | (11,766 | ) |
GMXB embedded derivatives (1) | | 3,369 |
| | 15,380 |
| | (22,814 | ) | | (12,889 | ) | | (23,276 | ) | | 26,645 |
| | | | 18,749 |
| | (56,630 | ) | | 75,379 |
|
Funds withheld losses (gains)—investment income | | (3,870 | ) | | (253 | ) | | (1,651 | ) | | 2,252 |
| | (7,625 | ) | | 3,755 |
| | | | (4,123 | ) | | (8,946 | ) | | 4,823 |
|
EIA embedded derivatives—interest credited | | 4,495 |
| | (4,264 | ) | | 1,817 |
| | (19,690 | ) | | (20,905 | ) | | 25,400 |
| | | | 231 |
| | (33,457 | ) | | 33,688 |
|
DAC offset, net | | 30,903 |
| | 34,494 |
| | 2,818 |
| | (17,764 | ) | | 36,910 |
| | (6,007 | ) | | | | 65,397 |
| | 78,912 |
| | (13,515 | ) |
Gain on repurchase of collateral finance facility securities | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | — |
| | (30,229 | ) | | 30,229 |
|
Operating Income (Loss) | | $ | 155,131 |
| | $ | 114,807 |
| | $ | 154,509 |
| | $ | 152,887 |
| | $ | (71,797 | ) | | $ | 226,928 |
| | | | $ | 269,938 |
| | $ | 51,050 |
| | $ | 218,888 |
|
| | | | | | | | | | | | | | | | | | | | |
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement
|
Reinsurance Group of America, Incorporated Consolidated Operating Income Statement |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-Date |
| | June 30, | | March 31, | | Dec. 31, | | Sept. 30, | | June 30, | | | | | June 30, | | June 30, | | |
(USD thousands, except per share data) | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 | | | | | 2014 | | 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 2,183,160 |
| | $ | 2,100,637 |
| | $ | 2,212,998 |
| | $ | 2,026,180 |
| | $ | 2,035,156 |
| | $ | 148,004 |
| | | | $ | 4,283,797 |
| | $ | 4,014,849 |
| | $ | 268,948 |
|
Investment income, net of related expenses | | 404,653 |
| | 403,986 |
| | 458,594 |
| | 372,831 |
| | 432,501 |
| | (27,848 | ) | | | | 808,639 |
| | 855,601 |
| | (46,962 | ) |
Investment related gains (losses), net | | 6,739 |
| | 4,685 |
| | 8,170 |
| | 1,679 |
| | 1,775 |
| | 4,964 |
| | | | 11,424 |
| | 3,416 |
| | 8,008 |
|
Other revenue | | 120,726 |
| | 67,590 |
| | 64,821 |
| | 70,734 |
| | 63,009 |
| | 57,717 |
| | | | 188,316 |
| | 118,410 |
| | 69,906 |
|
Total revenues | | 2,715,278 |
| | 2,576,898 |
| | 2,744,583 |
| | 2,471,424 |
| | 2,532,441 |
| | 182,837 |
| | | | 5,292,176 |
| | 4,992,276 |
| | 299,900 |
|
| | | | | | | | | | | | | | | | | | | | |
Benefits and expenses: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | 1,841,885 |
| | 1,843,677 |
| | 1,869,949 |
| | 1,714,899 |
| | 2,030,574 |
| | (188,689 | ) | | | | 3,685,562 |
| | 3,719,484 |
| | (33,922 | ) |
Interest credited | | 109,046 |
| | 117,154 |
| | 169,952 |
| | 90,231 |
| | 150,506 |
| | (41,460 | ) | | | | 226,200 |
| | 295,300 |
| | (69,100 | ) |
Policy acquisition costs and other insurance expenses | | 361,831 |
| | 301,805 |
| | 300,503 |
| | 295,411 |
| | 313,719 |
| | 48,112 |
| | | | 663,636 |
| | 606,458 |
| | 57,178 |
|
Other operating expenses | | 127,462 |
| | 110,936 |
| | 122,136 |
| | 111,672 |
| | 113,408 |
| | 14,054 |
| | | | 238,398 |
| | 232,909 |
| | 5,489 |
|
Interest expense | | 35,211 |
| | 35,084 |
| | 35,072 |
| | 30,831 |
| | 29,918 |
| | 5,293 |
| | | | 70,295 |
| | 58,404 |
| | 11,891 |
|
Collateral finance facility expense | | 2,591 |
| | 2,569 |
| | 2,563 |
| | 2,698 |
| | 2,650 |
| | (59 | ) | | | | 5,160 |
| | 5,188 |
| | (28 | ) |
Total benefits and expenses | | 2,478,026 |
| | 2,411,225 |
| | 2,500,175 |
| | 2,245,742 |
| | 2,640,775 |
| | (162,749 | ) | | | | 4,889,251 |
| | 4,917,743 |
| | (28,492 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) before income taxes | | 237,252 |
| | 165,673 |
| | 244,408 |
| | 225,682 |
| | (108,334 | ) | | 345,586 |
| | | | 402,925 |
| | 74,533 |
| | 328,392 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating income tax expense (benefit) | | 82,121 |
| | 50,866 |
| | 89,899 |
| | 72,795 |
| | (36,537 | ) | | 118,658 |
| | | | 132,987 |
| | 23,483 |
| | 109,504 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | $ | 155,131 |
| | $ | 114,807 |
| | $ | 154,509 |
| | $ | 152,887 |
| | $ | (71,797 | ) | | $ | 226,928 |
| | | | $ | 269,938 |
| | $ | 51,050 |
| | $ | 356,884 |
|
| | | | | | | | | | | | | | | | | | | | |
Wgt. Average Common Shares Outstanding (Diluted) | | 69,718 |
| | 71,264 |
| | 71,332 |
| | 71,391 |
| | 72,769 |
| | (3,051) |
| | | | 70,489 |
| | 73,573 |
| | (3,084) |
|
| | | | | | | | | | | | | | | | | | | | |
Diluted Earnings Per Share—Operating Income | | $ | 2.23 |
| | $ | 1.61 |
| | $ | 2.17 |
| | $ | 2.14 |
| | $ | (0.99 | ) | | $ | 3.22 |
| | | | $ | 3.83 |
| | $ | 0.69 |
| | $ | 3.14 |
|
| | | | | | | | | | | | | | | | | | | | |
Foreign currency effect (1): | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | (4,964 | ) | | $ | (50,225 | ) | | $ | (49,448 | ) | | $ | (51,810 | ) | | $ | (21,551 | ) | | $ | 16,587 |
| | | | $ | (55,189 | ) | | $ | (41,281 | ) | | $ | (13,908 | ) |
Operating income before income taxes | | $ | (809 | ) | | $ | (6,605 | ) | | $ | (8,679 | ) | | $ | (4,959 | ) | | $ | 13,640 |
| | $ | (14,449 | ) | | | | $ | (7,414 | ) | | $ | 10,849 |
| | (18,263 | ) |
| | | | | | | | | | | | | | | | | | | | |
(1) Compared to comparable prior year period |
Reinsurance Group of America, Incorporated Consolidated Balance Sheets |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
(USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 |
Assets | | | | | | | | | | |
Fixed maturity securities, available-for-sale | | $ | 24,480,396 |
| | $ | 22,157,182 |
| | $ | 21,474,136 |
| | $ | 21,289,108 |
| | $ | 21,284,216 |
|
Mortgage loans on real estate | | 2,555,800 |
| | 2,526,228 |
| | 2,486,680 |
| | 2,488,582 |
| | 2,377,246 |
|
Policy loans | | 1,250,635 |
| | 1,296,897 |
| | 1,244,469 |
| | 1,244,878 |
| | 1,245,252 |
|
Funds withheld at interest | | 5,940,521 |
| | 5,814,231 |
| | 5,771,467 |
| | 5,739,872 |
| | 5,777,395 |
|
Short-term investments | | 45,596 |
| | 118,789 |
| | 139,395 |
| | 44,192 |
| | 38,601 |
|
Other invested assets | | 1,128,375 |
| | 1,234,779 |
| | 1,324,960 |
| | 1,116,391 |
| | 1,035,809 |
|
Total investments | | 35,401,323 |
| | 33,148,106 |
| | 32,441,107 |
| | 31,923,023 |
| | 31,758,519 |
|
Cash and cash equivalents | | 1,378,117 |
| | 1,127,132 |
| | 923,647 |
| | 1,423,235 |
| | 973,619 |
|
Accrued investment income | | 279,368 |
| | 233,816 |
| | 267,908 |
| | 262,330 |
| | 233,153 |
|
Premiums receivable and other reinsurance balances | | 1,559,526 |
| | 1,454,959 |
| | 1,439,528 |
| | 1,252,610 |
| | 1,314,004 |
|
Reinsurance ceded receivables | | 614,203 |
| | 594,794 |
| | 594,515 |
| | 592,948 |
| | 585,555 |
|
Deferred policy acquisition costs | | 3,368,343 |
| | 3,450,523 |
| | 3,517,796 |
| | 3,533,932 |
| | 3,453,513 |
|
Other assets | | 570,171 |
| | 532,251 |
| | 489,972 |
| | 538,477 |
| | 472,258 |
|
Total assets | | $ | 43,171,051 |
| | $ | 40,541,581 |
| | $ | 39,674,473 |
| | $ | 39,526,555 |
| | $ | 38,790,621 |
|
| | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | |
Future policy benefits | | $ | 13,785,532 |
| | $ | 11,887,951 |
| | $ | 11,866,776 |
| | $ | 11,873,306 |
| | $ | 11,491,692 |
|
Interest-sensitive contract liabilities | | 12,686,025 |
| | 12,809,003 |
| | 12,947,557 |
| | 12,868,425 |
| | 12,991,981 |
|
Other policy claims and benefits | | 3,996,737 |
| | 3,899,004 |
| | 3,571,761 |
| | 3,440,371 |
| | 3,316,727 |
|
Other reinsurance balances | | 258,023 |
| | 283,249 |
| | 275,138 |
| | 264,023 |
| | 254,815 |
|
Deferred income taxes | | 2,232,821 |
| | 2,023,588 |
| | 1,837,577 |
| | 1,975,819 |
| | 1,839,909 |
|
Other liabilities | | 716,157 |
| | 638,967 |
| | 541,035 |
| | 510,079 |
| | 584,488 |
|
Short-term debt | | 110,000 |
| | 50,000 |
| | — |
| | — |
| | 120,000 |
|
Long-term debt | | 2,214,705 |
| | 2,214,526 |
| | 2,214,350 |
| | 2,214,170 |
| | 1,815,533 |
|
Collateral finance facility | | 482,092 |
| | 484,747 |
| | 484,752 |
| | 484,712 |
| | 487,556 |
|
Total liabilities | | 36,482,092 |
| | 34,291,035 |
| | 33,738,946 |
| | 33,630,905 |
| | 32,902,701 |
|
| | | | | | | | | | |
Stockholders’ Equity: | | | | | | | | | | |
Common stock, at par value | | 791 |
| | 791 |
| | 791 |
| | 791 |
| | 791 |
|
Additional paid-in-capital | | 1,783,856 |
| | 1,782,838 |
| | 1,777,906 |
| | 1,778,307 |
| | 1,772,811 |
|
Retained earnings | | 3,941,777 |
| | 3,772,776 |
| | 3,659,938 |
| | 3,544,632 |
| | 3,428,646 |
|
Treasury stock | | (666,125 | ) | | (585,358 | ) | | (508,715 | ) | | (528,081 | ) | | (496,462 | ) |
Accumulated other comprehensive income (AOCI): | | | | | | | | | | |
Accumulated currency translation adjustment, net of income taxes | | 207,043 |
| | 164,400 |
| | 207,083 |
| | 191,677 |
| | 164,538 |
|
Unrealized appreciation of securities, net of income taxes | | 1,442,324 |
| | 1,136,079 |
| | 820,245 |
| | 942,337 |
| | 1,052,126 |
|
Pension and postretirement benefits, net of income taxes | | (20,707 | ) | | (20,980 | ) | | (21,721 | ) | | (34,013 | ) | | (34,530 | ) |
Total stockholders’ equity | | 6,688,959 |
| | 6,250,546 |
| | 5,935,527 |
| | 5,895,650 |
| | 5,887,920 |
|
Total liabilities and stockholders’ equity | | $ | 43,171,051 |
| | $ | 40,541,581 |
| | $ | 39,674,473 |
| | $ | 39,526,555 |
| | $ | 38,790,621 |
|
| | | | | | | | | | |
Total stockholders’ equity, excluding AOCI | | $ | 5,060,299 |
| | $ | 4,971,047 |
| | $ | 4,929,920 |
| | $ | 4,795,649 |
| | $ | 4,705,786 |
|
| | | | | | | | | | |
| | | | | | | | | | |
Reinsurance Group of America, Incorporated U.S. and Latin America Traditional Segment Pre-tax Operating Income (1) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
| | (USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
| | Revenues: | | | | | | | | | | | | | | | | | | | | |
| | Net premiums | | $ | 1,189,822 |
| | $ | 1,141,905 |
| | $ | 1,246,137 |
| | $ | 1,124,183 |
| | $ | 1,136,742 |
| | $ | 53,080 |
| | | | $ | 2,331,727 |
| | $ | 2,193,170 |
| | $ | 138,557 |
|
| | Investment income, net of related expenses | | 137,404 |
| | 133,376 |
| | 139,281 |
| | 138,464 |
| | 133,544 |
| | 3,860 |
| | | | 270,780 |
| | 266,079 |
| | 4,701 |
|
| | Other revenue | | 767 |
| | 642 |
| | 840 |
| | 880 |
| | 1,334 |
| | (567 | ) | | | | 1,409 |
| | 1,986 |
| | (577 | ) |
| | Total revenues | | 1,327,993 |
| | 1,275,923 |
| | 1,386,258 |
| | 1,263,527 |
| | 1,271,620 |
| | 56,373 |
| | | | 2,603,916 |
| | 2,461,235 |
| | 142,681 |
|
| | | | | | | | | | | | | | | | | | | | | | |
| | Benefits and expenses: | | | | | | | | | | | | | | | | | | | |
|
| | Claims and other policy benefits | | 1,045,030 |
| | 1,033,707 |
| | 1,071,733 |
| | 972,786 |
| | 981,768 |
| | 63,262 |
| | | | 2,078,737 |
| | 1,918,649 |
| | 160,088 |
|
| | Interest credited | | 12,818 |
| | 12,272 |
| | 9,886 |
| | 13,659 |
| | 13,590 |
| | (772 | ) | | | | 25,090 |
| | 29,740 |
| | (4,650 | ) |
| | Policy acquisition costs and other insurance expenses | | 156,270 |
| | 156,000 |
| | 156,447 |
| | 162,710 |
| | 166,742 |
| | (10,472 | ) | | | | 312,270 |
| | 306,814 |
| | 5,456 |
|
| | Other operating expenses | | 24,921 |
| | 25,741 |
| | 24,550 |
| | 24,085 |
| | 23,018 |
| | 1,903 |
| | | | 50,662 |
| | 47,296 |
| | 3,366 |
|
| | Total benefits and expenses | | 1,239,039 |
| | 1,227,720 |
| | 1,262,616 |
| | 1,173,240 |
| | 1,185,118 |
| | 53,921 |
| | | | 2,466,759 |
| | 2,302,499 |
| | 164,260 |
|
| | | | | | | | | | | | | | | | | | | | | | |
| | Operating income before income taxes | | 88,954 |
| | 48,203 |
| | 123,642 |
| | 90,287 |
| | 86,502 |
| | 2,452 |
| | | | 137,157 |
| | 158,736 |
| | (21,579 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| | Operating to U.S. GAAP Reconciliation: | | | | | | | | | | | | | | | | | | | |
|
| | Operating income before income taxes | | 88,954 |
| | 48,203 |
| | 123,642 |
| | 90,287 |
| | 86,502 |
| | 2,452 |
| | | | 137,157 |
| | 158,736 |
| | (21,579 | ) |
| | Investment and derivative (losses) gains - non-operating | | 5,034 |
| | 2,769 |
| | (850 | ) | | (5,249 | ) | | 3,711 |
| | 1,323 |
| | | | 7,803 |
| | 11,020 |
| | (3,217 | ) |
| | Income before income taxes | | $ | 93,988 |
| | $ | 50,972 |
| | $ | 122,792 |
| | $ | 85,038 |
| | $ | 90,213 |
| | $ | 3,775 |
| | | | $ | 144,960 |
| | $ | 169,756 |
| | $ | (24,796 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| | Loss and Expense Ratios: | | | | | | | | | | | | | | | | | | | | |
| | Claims and other policy benefits | | 87.8 | % | | 90.5 | % | | 86.0 | % | | 86.5 | % | | 86.4 | % | | 1.4 | % | | | | 89.2 | % | | 87.5 | % | | 1.7 | % |
| | Policy acquisition costs and other insurance expenses | | 13.1 | % | | 13.7 | % | | 12.6 | % | | 14.5 | % | | 14.7 | % | | (1.6 | )% | | | | 13.4 | % | | 14.0 | % | | (0.6 | )% |
| | Other operating expenses | | 2.1 | % | | 2.3 | % | | 2.0 | % | | 2.1 | % | | 2.0 | % | | 0.1 | % | | | | 2.2 | % | | 2.2 | % | | 0.0 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| | (1) The company realigned certain operations and management responsibilities to better fit within its geographic-based segments. Mexico and Latin America operations were moved from Europe & South Africa to the U.S. segment, which has been renamed U.S. and Latin America. India operations have been moved from Europe & South Africa to the Asia Pacific segment. Europe & South Africa has been renamed Europe, Middle East and Africa. Prior-period figures have been adjusted to conform to the new reporting alignment.
|
| |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment—Asset Intensive Reinsurance Pre-tax Operating Income |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
(USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2013 | | June 30, 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 4,984 |
| | $ | 5,180 |
| | $ | 3,754 |
| | $ | 3,800 |
| | $ | 11,129 |
| | $ | (6,145 | ) | | | | $ | 10,164 |
| | $ | 14,967 |
| | $ | (4,803 | ) |
Investment income, net of related expenses | | 143,927 |
| | 158,619 |
| | 209,847 |
| | 128,563 |
| | 190,296 |
| | (46,369 | ) | | | | 302,546 |
| | 369,015 |
| | (66,469 | ) |
Investment related gains (losses), net | | 1 |
| | — |
| | — |
| | — |
| | — |
| | 1 |
| | | | 1 |
| | — |
| | 1 |
|
Other revenue | | 29,376 |
| | 28,276 |
| | 26,761 |
| | 28,519 |
| | 29,937 |
| | (561 | ) | | | | 57,652 |
| | 58,818 |
| | (1,166 | ) |
Total revenues | | 178,288 |
| | 192,075 |
| | 240,362 |
| | 160,882 |
| | 231,362 |
| | (53,074 | ) | | | | 370,363 |
| | 442,800 |
| | (72,437 | ) |
| | | | | | | | | | | | | | | | | | | | |
Benefits and expenses: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | 4,713 |
| | 4,260 |
| | 4,674 |
| | 8,899 |
| | 11,083 |
| | (6,370 | ) | | | | 8,973 |
| | 14,671 |
| | (5,698 | ) |
Interest credited | | 90,037 |
| | 101,644 |
| | 153,501 |
| | 76,097 |
| | 136,424 |
| | (46,387 | ) | | | | 191,681 |
| | 264,520 |
| | (72,839 | ) |
Policy acquisition costs and other insurance expenses | | 35,698 |
| | 41,072 |
| | 36,819 |
| | 33,642 |
| | 40,747 |
| | (5,049 | ) | | | | 76,770 |
| | 70,792 |
| | 5,978 |
|
Other operating expenses | | 3,813 |
| | 4,094 |
| | 3,102 |
| | 4,198 |
| | 2,878 |
| | 935 |
| | | | 7,907 |
| | 6,991 |
| | 916 |
|
Total benefits and expenses | | 134,261 |
| | 151,070 |
| | 198,096 |
| | 122,836 |
| | 191,132 |
| | (56,871 | ) | | | | 285,331 |
| | 356,974 |
| | (71,643 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income before income taxes | | 44,027 |
| | 41,005 |
| | 42,266 |
| | 38,046 |
| | 40,230 |
| | 3,797 |
| | | | 85,032 |
| | 85,826 |
| | (794 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating to U.S. GAAP Reconciliation: | | | | | | | | | | | | | | | | | | | | |
Operating income before income taxes | | 44,027 |
| | 41,005 |
| | 42,266 |
| | 38,046 |
| | 40,230 |
| | 3,797 |
| | | | 85,032 |
| | 85,826 |
| | (794 | ) |
Investment and derivative gains (losses) - non-operating (1) | | 12,412 |
| | 21,300 |
| | (40,727 | ) | | (33,190 | ) | | (39,071 | ) | | 51,483 |
| | | | 33,712 |
| | (92,003 | ) | | 125,715 |
|
Change in value of modified coinsurance and funds withheld embedded derivatives (1) | | 79,768 |
| | 78,696 |
| | 462 |
| | (68,703 | ) | | 46,325 |
| | 33,443 |
| | | | 158,464 |
| | 136,527 |
| | 21,937 |
|
GMXB embedded derivatives (1) | | (5,183 | ) | | (23,661 | ) | | 35,098 |
| | 19,829 |
| | 35,809 |
| | (40,992 | ) | | | | (28,844 | ) | | 87,123 |
| | (115,967 | ) |
Funds withheld gains (losses) - investment income | | 5,232 |
| | (217 | ) | | 1,797 |
| | (3,755 | ) | | 10,541 |
| | (5,309 | ) | | | | 5,015 |
| | 11,191 |
| | (6,176 | ) |
EIA embedded derivatives - interest credited | | (6,916 | ) | | 6,560 |
| | (2,795 | ) | | 30,292 |
| | 32,161 |
| | (39,077 | ) | | | | (356 | ) | | 51,472 |
| | (51,828 | ) |
DAC offset, net | | (47,543 | ) | | (53,068 | ) | | (4,334 | ) | | 27,330 |
| | (56,786 | ) | | 9,243 |
| | | | (100,611 | ) | | (121,404 | ) | | 20,793 |
|
Income before income taxes | | 81,797 |
| | 70,615 |
| | 31,767 |
| | 9,849 |
| | 69,209 |
| | 12,588 |
| | | | 152,412 |
| | 158,732 |
| | (6,320 | ) |
| | | | | | | | | | | | | | | | | | | | |
(1) Included in “Investment related gains (losses), net” on Consolidated GAAP Income Statement
|
| | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment—Asset Intensive Reinsurance Pre-tax Operating Income (Cont’d)
|
| | | | | | | | | | | | | | | | | | | | |
| | |
| | Three Months Ended |
(USD millions) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 |
Annuity account values: | | | | | | | | | | |
| | | | | | | | | | |
Fixed annuities (deferred) | | $ | 5,030 |
| | $ | 5,156 |
| | $ | 5,079 |
| | $ | 5,180 |
| | $ | 5,264 |
|
| | | | | | | | | | |
Net interest spread (fixed annuities): | | 2.3 | % | | 2.5 | % | | 2.3 | % | | 2.5 | % | | 2.3 | % |
| | | | | | | | | | |
Equity-indexed annuities | | $ | 4,725 |
| | $ | 4,741 |
| | $ | 4,768 |
| | $ | 4,724 |
| | $ | 4,795 |
|
| | | | | | | | | | |
Variable annuities: | | | | | | | | | | |
No riders | | $ | 941 |
| | $ | 943 |
| | $ | 961 |
| | $ | 950 |
| | $ | 946 |
|
GMDB only | | 84 |
| | 85 |
| | 86 |
| | 83 |
| | 56 |
|
GMIB only | | 6 |
| | 6 |
| | 6 |
| | 6 |
| | 6 |
|
GMAB only | | 50 |
| | 51 |
| | 52 |
| | 52 |
| | 52 |
|
GMWB only | | 1,741 |
| | 1,733 |
| | 1,752 |
| | 1,704 |
| | 1,660 |
|
GMDB / WB | | 462 |
| | 459 |
| | 467 |
| | 459 |
| | 450 |
|
Other | | 30 |
| | 30 |
| | 31 |
| | 31 |
| | 30 |
|
Total VA account values | | $ | 3,314 |
| | $ | 3,307 |
| | $ | 3,355 |
| | $ | 3,285 |
| | $ | 3,200 |
|
| | | | | | | | | | |
Fair value of liabilities associated with living benefit riders | | $ | 59 |
| | $ | 54 |
| | $ | 30 |
| | $ | 65 |
| | $ | 85 |
|
| | | | | | | | | | |
Interest-sensitive contract liabilities associated with: | | | | | | | | | | |
| | | | | | | | | | |
Guaranteed investment contracts | | $ | 301 |
| | $ | 301 |
| | $ | 297 |
| | $ | 236 |
| | $ | 200 |
|
| | | | | | | | | | |
Bank-owned life insurance (BOLI) | | $ | 541 |
| | $ | 538 |
| | $ | 534 |
| | $ | 531 |
| | $ | 529 |
|
| | | | | | | | | | |
Other asset-intensive business | | $ | 71 |
| | $ | 71 |
| | $ | 72 |
| | $ | 73 |
| | $ | 73 |
|
Reinsurance Group of America, Incorporated U.S. and Latin America Non-Traditional Segment—Financial Reinsurance Pre-tax Operating Income |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
| | June 30, | | March 31, | | Dec. 31, | | Sept. 30, | | June 30, | | | | | June 30, | | June 30, | | |
(USD thousands) | | 2014 | | 2014 | | 2013 | | 2013 | | 2013 | | | | | 2014 | | 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Investment income, net of related expenses | | $ | 1,086 |
| | $ | 1,247 |
| | $ | 2,048 |
| | $ | 1,160 |
| | $ | 819 |
| | $ | 267 |
| | | | $ | 2,333 |
| | $ | 1,416 |
| | $ | 917 |
|
Other revenue | | 21,777 |
| | 19,098 |
| | 16,191 |
| | 15,599 |
| | 16,306 |
| | 5,471 |
| | | | 40,875 |
| | 29,103 |
| | 11,772 |
|
Total revenues | | 22,863 |
| | 20,345 |
| | 18,239 |
| | 16,759 |
| | 17,125 |
| | 5,738 |
| | | | 43,208 |
| | 30,519 |
| | 12,689 |
|
| | | | | | | | | | | |
| | | | | | | | |
Benefits and expenses: | | | | | | | | | | | |
| | | | | | | | |
Policy acquisition costs and other insurance expenses | | 6,944 |
| | 5,742 |
| | 2,501 |
| | 3,228 |
| | 3,602 |
| | 3,342 |
| | | | 12,686 |
| | 7,042 |
| | 5,644 |
|
Other operating expenses | | 2,310 |
| | 2,177 |
| | 1,462 |
| | 2,008 |
| | 1,636 |
| | 674 |
| | | | 4,487 |
| | 3,583 |
| | 904 |
|
Total benefits and expenses | | 9,254 |
| | 7,919 |
| | 3,963 |
| | 5,236 |
| | 5,238 |
| | 4,016 |
| | | | 17,173 |
| | 10,625 |
| | 6,548 |
|
| | | | | | | | | | | |
|
| | | | | | | | |
Operating income before income taxes | | 13,609 |
| | 12,426 |
| | 14,276 |
| | 11,523 |
| | 11,887 |
| | 1,722 |
| | | | 26,035 |
| | 19,894 |
| | 6,141 |
|
| | | | | | | | | | | |
|
| | | | | | | | |
Operating to U.S. GAAP Reconciliation: | | | | | | | | | | | |
| | | | | | | | |
Operating income before income taxes | | 13,609 |
| | 12,426 |
| | 14,276 |
| | 11,523 |
| | 11,887 |
| | 1,722 |
| | | | 26,035 |
| | 19,894 |
| | 6,141 |
|
Investment and derivative gains (losses) - non-operating | | 68 |
| | 83 |
| | (5 | ) | | (321 | ) | | (100 | ) | | 168 |
| | | | 151 |
| | (66 | ) | | 217 |
|
Income before income taxes | | $ | 13,677 |
| | $ | 12,509 |
| | $ | 14,271 |
| | $ | 11,202 |
| | $ | 11,787 |
| | $ | 1,890 |
| | | | $ | 26,186 |
| | $ | 19,828 |
| | $ | 6,358 |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated Canadian Segment Pre-tax Operating Income |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
(USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 253,577 |
| | $ | 230,844 |
| | $ | 243,340 |
| | $ | 236,067 |
| | $ | 239,633 |
| | $ | 13,944 |
| | | | $ | 484,421 |
| | $ | 482,904 |
| | $ | 1,517 |
|
Investment income, net of related expenses | | 49,358 |
| | 46,997 |
| | 51,750 |
| | 49,871 |
| | 50,450 |
| | (1,092 | ) | | | | 96,355 |
| | 99,624 |
| | (3,269 | ) |
Investment related gains (losses), net | | 621 |
| | 1,006 |
| | 1,149 |
| | 866 |
| | 970 |
| | (349 | ) | | | | 1,627 |
| | 1,975 |
| | (348 | ) |
Other revenue | | 1,263 |
| | 961 |
| | 531 |
| | (196 | ) | | 302 |
| | 961 |
| | | | 2,224 |
| | 510 |
| | 1,714 |
|
Total revenues | | 304,819 |
| | 279,808 |
| | 296,770 |
| | 286,608 |
| | 291,355 |
| | 13,464 |
| | | | 584,627 |
| | 585,013 |
| | (386 | ) |
| | | | | | | | | | | | | | | | | | | | |
Benefits and expenses: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | 203,293 |
| | 194,756 |
| | 187,226 |
| | 185,011 |
| | 196,584 |
| | 6,709 |
| | | | 398,049 |
| | 386,282 |
| | 11,767 |
|
Interest credited | | 9 |
| | — |
| | 9 |
| | 19 |
| | 6 |
| | 3 |
| | | | 9 |
| | 18 |
| | (9 | ) |
Policy acquisition costs and other insurance expenses | | 60,837 |
| | 53,104 |
| | 53,119 |
| | 55,553 |
| | 52,134 |
| | 8,703 |
| | | | 113,941 |
| | 112,966 |
| | 975 |
|
Other operating expenses | | 9,954 |
| | 9,825 |
| | 9,263 |
| | 10,052 |
| | 10,942 |
| | (988 | ) | | | | 19,779 |
| | 21,181 |
| | (1,402 | ) |
Total benefits and expenses | | 274,093 |
| | 257,685 |
| | 249,617 |
| | 250,635 |
| | 259,666 |
| | 14,427 |
| | | | 531,778 |
| | 520,447 |
| | 11,331 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating income before income taxes | | 30,726 |
| | 22,123 |
| | 47,153 |
| | 35,973 |
| | 31,689 |
| | (963 | ) | | | | 52,849 |
| | 64,566 |
| | (11,717 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating to U.S. GAAP Reconciliation: | | | | | | | | | | | | | | | | | | | | |
Operating income before income taxes | | 30,726 |
| | 22,123 |
| | 47,153 |
| | 35,973 |
| | 31,689 |
| | (963 | ) | | | | 52,849 |
| | 64,566 |
| | (11,717 | ) |
Investment and derivative gains (losses) - non-operating | | 3,572 |
| | (2,665 | ) | | 2,586 |
| | 5,606 |
| | 2,778 |
| | 794 |
| | | | 907 |
| | 4,828 |
| | (3,921 | ) |
Funds withheld gains (losses) - investment income | | 722 |
| | 606 |
| | 743 |
| | 290 |
| | 1,192 |
| | (470 | ) | | | | 1,328 |
| | 2,573 |
| | (1,245 | ) |
Income before income taxes | | $ | 35,020 |
| | $ | 20,064 |
| | $ | 50,482 |
| | $ | 41,869 |
| | $ | 35,659 |
| | $ | (639 | ) | | | | $ | 55,084 |
| | $ | 71,967 |
| | $ | (16,883 | ) |
| | | | | | | | | | | | | | | | | | | | |
Loss and Expense Ratios: | | | | | | | | | | | | | | | | | | | | |
Loss ratios (creditor business) | | 29.2 | % | | 31.5 | % | | 18.3 | % | | 30.5 | % | | 33.0 | % | | (3.8 | )% | | | | 29.2 | % | | 32.8 | % | | (3.6 | )% |
Loss ratios (excluding creditor business) | | 97.2 | % | | 98.0 | % | | 89.4 | % | | 92.3 | % | | 94.5 | % | | 2.7 | % | | | | 97.2 | % | | 93.9 | % | | 3.3 | % |
Claims and other policy benefits / (net premiums + investment income) | | 67.1 | % | | 70.1 | % | | 63.4 | % | | 64.7 | % | | 67.8 | % | | (0.7 | )% | | | | 68.5 | % | | 66.3 | % | | 2.2 | % |
Policy acquisition costs and other insurance expenses (creditor business) | | 62.9 | % | | 58.1 | % | | 70.7 | % | | 61.3 | % | | 59.0 | % | | 3.9 | % | | | | 62.9 | % | | 60.1 | % | | 2.8 | % |
Policy acquisition costs and other insurance expenses (excluding creditor business) | | 12.3 | % | | 13.9 | % | | 11.5 | % | | 12.5 | % | | 12.3 | % | | 0.0 | % | | | | 12.3 | % | | 12.6 | % | | (0.3 | )% |
Other operating expenses | | 3.9 | % | | 4.3 | % | | 3.8 | % | | 4.3 | % | | 4.6 | % | | (0.7 | )% | | | | 4.1 | % | | 4.4 | % | | (0.3 | )% |
| | | | | | | | | | | | | | | | | | | | |
Foreign currency effect (1): | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | (16,444 | ) | | $ | (21,718 | ) | | $ | (14,338 | ) | | $ | (10,348 | ) | | $ | (3,144 | ) | | $ | (13,300 | ) | | | | $ | (38,162 | ) | | $ | (4,706 | ) | | $ | (33,456 | ) |
Operating income before income taxes | | $ | (1,943 | ) | | $ | (2,333 | ) | | $ | (3,315 | ) | | $ | (1,819 | ) | | $ | (434 | ) | | $ | (1,509 | ) | | | | $ | (4,276 | ) | | $ | (955 | ) | | $ | (3,321 | ) |
| | | | | | | | | | | |
|
| | | | | | | | |
Creditor reinsurance net premiums | | $ | 60,013 |
| | $ | 47,344 |
| | $ | 42,558 |
| | $ | 53,021 |
| | $ | 48,618 |
| | $ | 11,395 |
| | | | $ | 107,357 |
| | $ | 109,732 |
| | $ | (2,375 | ) |
| | | | | | | | | | | | | | | | | | | | |
Note: The loss ratios on creditor reinsurance business are normally lower than traditional reinsurance, while allowances are normally higher as a percentage of premiums. |
(1) Compared to comparable prior year period | | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated Europe, Middle East and Africa Segment Pre-tax Operating Income (1) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
(USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 340,884 |
| | $ | 340,743 |
| | $ | 332,495 |
| | $ | 303,259 |
| | $ | 292,180 |
| | $ | 48,704 |
| | | | $ | 681,627 |
| | $ | 584,989 |
| | $ | 96,638 |
|
Investment income, net of related expenses | | 20,671 |
| | 13,369 |
| | 14,122 |
| | 12,860 |
| | 13,623 |
| | 7,048 |
| | | | 34,040 |
| | 25,052 |
| | 8,988 |
|
Investment related gains, net | | 5,183 |
| | 2,593 |
| | 5,495 |
| | — |
| | — |
| | 5,183 |
| | | | 7,776 |
| | — |
| | 7,776 |
|
Other revenue | | 7,939 |
| | 7,923 |
| | 5,347 |
| | 12,409 |
| | 3,926 |
| | 4,013 |
| | | | 15,862 |
| | 5,503 |
| | 10,359 |
|
Total revenues | | 374,677 |
| | 364,628 |
| | 357,459 |
| | 328,528 |
| | 309,729 |
| | 64,948 |
| | | | 739,305 |
| | 615,544 |
| | 123,761 |
|
| | | | | | | | | | | | | | | | | | | | |
Benefits and expenses: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | 282,546 |
| | 307,341 |
| | 293,181 |
| | 250,965 |
| | 262,443 |
| | 20,103 |
| | | | 589,887 |
| | 522,701 |
| | 67,186 |
|
Interest credited | | 5,750 |
| | 2,786 |
| | 6,114 |
| | — |
| | — |
| | 5,750 |
| | | | 8,536 |
| | — |
| | 8,536 |
|
Policy acquisition costs and other insurance expenses | | 11,492 |
| | 13,265 |
| | 17,883 |
| | 13,348 |
| | 9,396 |
| | 2,096 |
| | | | 24,757 |
| | 21,003 |
| | 3,754 |
|
Other operating expenses | | 30,208 |
| | 27,260 |
| | 28,250 |
| | 25,874 |
| | 26,381 |
| | 3,827 |
| | | | 57,468 |
| | 51,140 |
| | 6,328 |
|
Total benefits and expenses | | 329,996 |
| | 350,652 |
| | 345,428 |
| | 290,187 |
| | 298,220 |
| | 31,776 |
| | | | 680,648 |
| | 594,844 |
| | 85,804 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating income before income taxes | | 44,681 |
| | 13,976 |
| | 12,031 |
| | 38,341 |
| | 11,509 |
| | 33,172 |
| | | | 58,657 |
| | 20,700 |
| | 37,957 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating to U.S. GAAP Reconciliation: | | | | | | | | | | | | | | | | | | | | |
Operating income before income taxes | | 44,681 |
| | 13,976 |
| | 12,031 |
| | 38,341 |
| | 11,509 |
| | 33,172 |
| | | | 58,657 |
| | 20,700 |
| | 37,957 |
|
Investment and derivative gains (losses) - non-operating | | 16,641 |
| | 1,229 |
| | (54 | ) | | 1,323 |
| | 440 |
| | 16,201 |
| | | | 17,870 |
| | 2,212 |
| | 15,658 |
|
Income before income taxes | | $ | 61,322 |
| | $ | 15,205 |
| | $ | 11,977 |
| | $ | 39,664 |
| | $ | 11,949 |
| | $ | 49,373 |
| | | | $ | 76,527 |
| | $ | 22,912 |
| | $ | 53,615 |
|
| | | | | | | | | | | | | | | | | | | | |
Loss and Expense Ratios: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | 82.9 | % | | 90.2 | % | | 88.2 | % | | 82.8 | % | | 89.8 | % | | (6.9 | )% | | | | 86.5 | % | | 89.4 | % | | (2.9 | )% |
Policy acquisition costs and other insurance expenses | | 3.4 | % | | 3.9 | % | | 5.4 | % | | 4.4 | % | | 3.2 | % | | 0.2 | % | | | | 3.6 | % | | 3.6 | % | | 0.0 | % |
Other operating expenses | | 8.9 | % | | 8.0 | % | | 8.5 | % | | 8.5 | % | | 9.0 | % | | (0.1 | )% | | | | 8.4 | % | | 8.7 | % | | (0.3 | )% |
| | | | | | | | | | | | | | | | | | | | |
Foreign currency effect (2): | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 21,204 |
| | $ | 8,690 |
| | $ | 148 |
| | $ | (6,548 | ) | | $ | (9,877 | ) | | $ | 31,081 |
| | | | $ | 29,894 |
| | $ | (18,295 | ) | | $ | 48,189 |
|
Operating income before income taxes | | $ | 3,710 |
| | $ | 394 |
| | $ | (164 | ) | | $ | (301 | ) | | $ | (755 | ) | | $ | 4,465 |
| | | | $ | 4,104 |
| | $ | (1,094 | ) | | $ | 5,198 |
|
| | | | | | | | | | | |
|
| | | | | | | |
|
|
Critical illness net premiums | | $ | 66,257 |
| | $ | 65,678 |
| | $ | 65,082 |
| | $ | 62,404 |
| | $ | 63,685 |
| | $ | 2,572 |
| | | | $ | 131,935 |
| | $ | 126,945 |
| | $ | 4,990 |
|
| | | | | | | | | | | | | | | | | | | | |
(1) The company realigned certain operations and management responsibilities to better fit within its geographic-based segments. Mexico and Latin America operations were moved from Europe & South Africa to the U.S. segment, which has been renamed U.S. and Latin America. India operations have been moved from Europe & South Africa to the Asia Pacific segment. Europe & South Africa has been renamed Europe, Middle East and Africa. Prior-period figures have been adjusted to conform to the new reporting alignment. |
(2) Compared to comparable prior year period |
Reinsurance Group of America, Incorporated Asia Pacific Segment Pre-tax Operating Income (1) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
(USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 393,687 |
| | $ | 381,750 |
| | $ | 387,803 |
| | $ | 357,867 |
| | $ | 355,211 |
| | $ | 38,476 |
| | | | $ | 775,437 |
| | $ | 739,535 |
| | $ | 35,902 |
|
Investment income, net of related expenses | | 26,325 |
| | 24,642 |
| | 26,860 |
| | 22,889 |
| | 21,951 |
| | 4,374 |
| | | | 50,967 |
| | 44,581 |
| | 6,386 |
|
Investment related gains, net | | 684 |
| | 861 |
| | 1,287 |
| | 576 |
| | 570 |
| | 114 |
| | | | 1,545 |
| | 952 |
| | 593 |
|
Other revenue | | 56,874 |
| | 6,123 |
| | 10,472 |
| | 7,804 |
| | 10,953 |
| | 45,921 |
| | | | 62,997 |
| | 18,289 |
| | 44,708 |
|
Total revenues | | 477,570 |
| | 413,376 |
| | 426,422 |
| | 389,136 |
| | 388,685 |
| | 88,885 |
| | | | 890,946 |
| | 803,357 |
| | 87,589 |
|
Benefits and expenses: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | 306,320 |
| | 303,596 |
| | 313,132 |
| | 297,208 |
| | 578,808 |
| | (272,488 | ) | | | | 609,916 |
| | 877,209 |
| | (267,293 | ) |
Interest Credited | | 234 |
| | 246 |
| | 263 |
| | 270 |
| | 274 |
| | (40 | ) | | | | 480 |
| | 585 |
| | (105 | ) |
Policy acquisition costs and other insurance expenses | | 107,909 |
| | 54,289 |
| | 53,267 |
| | 47,284 |
| | 60,171 |
| | 47,738 |
| | | | 162,198 |
| | 122,257 |
| | 39,941 |
|
Other operating expenses | | 33,780 |
| | 30,587 |
| | 32,819 |
| | 30,116 |
| | 32,070 |
| | 1,710 |
| | | | 64,367 |
| | 62,881 |
| | 1,486 |
|
Total benefits and expenses | | 448,243 |
| | 388,718 |
| | 399,481 |
| | 374,878 |
| | 671,323 |
| | (223,080 | ) | | | | 836,961 |
| | 1,062,932 |
| | (225,971 | ) |
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) before income taxes | | 29,327 |
| | 24,658 |
| | 26,941 |
| | 14,258 |
| | (282,638 | ) | | 311,965 |
| | | | 53,985 |
| | (259,575 | ) | | 313,560 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating to U.S. GAAP Reconciliation: | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) before income taxes | | 29,327 |
| | 24,658 |
| | 26,941 |
| | 14,258 |
| | (282,638 | ) | | 311,965 |
| | | | 53,985 |
| | (259,575 | ) | | 313,560 |
|
Investment and derivative gains (losses) - non-operating | | 5,601 |
| | 1,653 |
| | (3,282 | ) | | 4,521 |
| | (4,707 | ) | | 10,308 |
| | | | 7,254 |
| | (9,528 | ) | | 16,782 |
|
Income (loss) before income taxes | | $ | 34,928 |
| | $ | 26,311 |
| | $ | 23,659 |
| | $ | 18,779 |
| | $ | (287,345 | ) | | $ | 322,273 |
| | | | $ | 61,239 |
| | $ | (269,103 | ) | | $ | 330,342 |
|
| | | | | | | | | | | | | | | | | | | | |
Loss and Expense Ratios: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | 77.8 | % | | 79.5 | % | | 80.7 | % | | 83.0 | % | | 162.9 | % | | (85.1 | )% | | | | 78.7 | % | | 118.6 | % | | (39.9 | )% |
Policy acquisition costs and other insurance expenses | | 27.4 | % | | 14.2 | % | | 13.7 | % | | 13.2 | % | | 16.9 | % | | 10.5 | % | | | | 20.9 | % | | 16.5 | % | | 4.4 | % |
Other operating expenses | | 8.6 | % | | 8.0 | % | | 8.5 | % | | 8.4 | % | | 9.0 | % | | (0.4 | )% | | | | 8.3 | % | | 8.5 | % | | (0.2 | )% |
| | | | | | | | | | | | | | | | | | | |
|
Foreign currency effect (2): | | | | | | | | | | | | | | | | | | | |
|
Net premiums | | $ | (9,724 | ) | | $ | (37,197 | ) | | $ | (35,258 | ) | | $ | (34,914 | ) | | $ | (8,530 | ) | | $ | (1,194 | ) | | | | $ | (46,921 | ) | | $ | (18,280 | ) | | $ | (28,641 | ) |
Operating income before income taxes | | $ | (1,313 | ) | | $ | (2,960 | ) | | $ | (5,298 | ) | | $ | (2,348 | ) | | $ | 14,924 |
| | $ | (16,237 | ) | | | | $ | (4,273 | ) | | $ | 12,853 |
| | $ | (17,126 | ) |
| | | | | | | | | | | | | | | | | | | |
|
|
Critical illness net premiums | | $ | 71,928 |
| | $ | 60,398 |
| | $ | 66,980 |
| | $ | 74,220 |
| | $ | 51,478 |
| | $ | 20,450 |
| | | | $ | 132,326 |
| | $ | 106,361 |
| | $ | 25,965 |
|
| | | | | | | | | | | | | | | | | | | | |
(1) The company realigned certain operations and management responsibilities to better fit within its geographic-based segments. Mexico and Latin America operations were moved from Europe & South Africa to the U.S. segment, which has been renamed U.S. and Latin America. India operations have been moved from Europe & South Africa to the Asia Pacific segment. Europe & South Africa has been renamed Europe, Middle East and Africa. Prior-period figures have been adjusted to conform to the new reporting alignment. |
(2) Compared to comparable prior year period |
| | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated Corporate and Other Segment Pre-tax Operating Income |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
(USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
Revenues: | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | 206 |
| | $ | 215 |
| | $ | (531 | ) | | $ | 1,004 |
| | $ | 261 |
| | $ | (55 | ) | | | | $ | 421 |
| | $ | (716 | ) | | $ | 1,137 |
|
Investment income, net of related expenses | | 25,882 |
| | 25,736 |
| | 14,686 |
| | 19,024 |
| | 21,818 |
| | 4,064 |
| | | | 51,618 |
| | 49,834 |
| | 1,784 |
|
Investment related gains (losses), net | | 250 |
| | 225 |
| | 239 |
| | 237 |
| | 235 |
| | 15 |
| | | | 475 |
| | 489 |
| | (14 | ) |
Other revenue | | 2,730 |
| | 4,567 |
| | 4,679 |
| | 5,719 |
| | 251 |
| | 2,479 |
| | | | 7,297 |
| | 4,201 |
| | 3,096 |
|
Total revenues | | 29,068 |
| | 30,743 |
| | 19,073 |
| | 25,984 |
| | 22,565 |
| | 6,503 |
| | | | 59,811 |
| | 53,808 |
| | 6,003 |
|
| | | | | | | | | | | | | | | | | | | | |
Benefits and expenses: | | | | | | | | | | | | | | | | | | | | |
Claims and other policy benefits | | (17 | ) | | 17 |
| | 3 |
| | 30 |
| | (112 | ) | | 95 |
| | | | — |
| | (28 | ) | | 28 |
|
Interest credited | | 198 |
| | 206 |
| | 179 |
| | 186 |
| | 212 |
| | (14 | ) | | | | 404 |
| | 437 |
| | (33 | ) |
Policy acquisition costs and other insurance expenses | | (17,319 | ) | | (21,667 | ) | | (19,533 | ) | | (20,354 | ) | | (19,073 | ) | | 1,754 |
| | | | (38,986 | ) | | (34,416 | ) | | (4,570 | ) |
Other operating expenses | | 22,476 |
| | 11,252 |
| | 22,690 |
| | 15,339 |
| | 16,483 |
| | 5,993 |
| | | | 33,728 |
| | 39,837 |
| | (6,109 | ) |
Interest expense | | 35,211 |
| | 35,084 |
| | 35,072 |
| | 30,831 |
| | 29,918 |
| | 5,293 |
| | | | 70,295 |
| | 58,404 |
| | 11,891 |
|
Collateral finance facility expense | | 2,591 |
| | 2,569 |
| | 2,563 |
| | 2,698 |
| | 2,650 |
| | (59 | ) | | | | 5,160 |
| | 5,188 |
| | (28 | ) |
Total benefits and expenses | | 43,140 |
| | 27,461 |
| | 40,974 |
| | 28,730 |
| | 30,078 |
| | 13,062 |
| | | | 70,601 |
| | 69,422 |
| | 1,179 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating income (loss) before income taxes | | (14,072 | ) | | 3,282 |
| | (21,901 | ) | | (2,746 | ) | | (7,513 | ) | | (6,559 | ) | | | | (10,790 | ) | | (15,614 | ) |
| 4,824 |
|
| | | | | | | | | | | | | | | | | | | | |
Operating to U.S. GAAP Reconciliation: | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) before income taxes | | (14,072 | ) | | 3,282 |
| | (21,901 | ) | | (2,746 | ) | | (7,513 | ) | | (6,559 | ) | | | | (10,790 | ) | | (15,614 | ) | | 4,824 |
|
Investment and derivative gains (losses) - non-operating | | (6,125 | ) | | 482 |
| | (3,557 | ) | | (1,960 | ) | | 1,283 |
| | (7,408 | ) | | | | (5,643 | ) | | (915 | ) | | (4,728 | ) |
Gain on repurchase of collateral finance facility securities | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | — |
| | 46,506 |
| | (46,506 | ) |
Income (loss) before income taxes | | $ | (20,197 | ) | | $ | 3,764 |
| | $ | (25,458 | ) | | $ | (4,706 | ) | | $ | (6,230 | ) | | $ | (13,967 | ) | | | | $ | (16,433 | ) | | $ | 29,977 |
| | $ | (46,410 | ) |
| | | | | | | | | | | | | | | | | | | | |
Foreign currency effect (1): | | | | | | | | | | | | | | | | | | | | |
Net premiums | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | | | $ | — |
| | $ | — |
| | $ | — |
|
Operating income before income taxes | | $ | (1,263 | ) | | $ | (1,706 | ) | | $ | 98 |
| | $ | (491 | ) | | $ | (95 | ) | | $ | (1,168 | ) | | | | $ | (2,969 | ) | | $ | 45 |
| | $ | (3,014 | ) |
| | | | | | | | | | | | | | | | | | | | |
(1) Compared to comparable prior year period |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated Summary of Pre-tax Segment Operating Income (1) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
(USD thousands) | | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
U.S. and Latin America: | | | | | | | | | | | | | | | | | | | | |
Traditional | | $ | 88,954 |
| | $ | 48,203 |
| | $ | 123,642 |
| | $ | 90,287 |
| | $ | 86,502 |
| | $ | 2,452 |
| | | | $ | 137,157 |
| | $ | 158,736 |
| | $ | (21,579 | ) |
Non-Traditional: | | | | | | | | | | | |
| | | | | | | |
|
Asset Intensive | | 44,027 |
| | 41,005 |
| | 42,266 |
| | 38,046 |
| | 40,230 |
| | 3,797 |
| | | | 85,032 |
| | 85,826 |
| | (794 | ) |
Financial Reinsurance | | 13,609 |
| | 12,426 |
| | 14,276 |
| | 11,523 |
| | 11,887 |
| | 1,722 |
| | | | 26,035 |
| | 19,894 |
| | 6,141 |
|
Total U.S. and Latin America Segment | | 146,590 |
| | 101,634 |
| | 180,184 |
| | 139,856 |
| | 138,619 |
| | 7,971 |
| | | | 248,224 |
| | 264,456 |
| | (16,232 | ) |
Canadian Segment | | 30,726 |
| | 22,123 |
| | 47,153 |
| | 35,973 |
| | 31,689 |
| | (963 | ) | | | | 52,849 |
| | 64,566 |
| | (11,717 | ) |
Europe, Middle East and Africa | | 44,681 |
| | 13,976 |
| | 12,031 |
| | 38,341 |
| | 11,509 |
| | 33,172 |
| | | | 58,657 |
| | 20,700 |
| | 37,957 |
|
Asia Pacific Segment | | 29,327 |
| | 24,658 |
| | 26,941 |
| | 14,258 |
| | (282,638 | ) | | 311,965 |
| | | | 53,985 |
| | (259,575 | ) | | 313,560 |
|
Corporate and Other | | (14,072 | ) | | 3,282 |
| | (21,901 | ) | | (2,746 | ) | | (7,513 | ) | | (6,559 | ) | | | | (10,790 | ) | | (15,614 | ) | | 4,824 |
|
Consolidated | | $ | 237,252 |
| | $ | 165,673 |
| | $ | 244,408 |
| | $ | 225,682 |
| | $ | (108,334 | ) | | $ | 345,586 |
| | | | $ | 402,925 |
| | $ | 74,533 |
| | $ | 328,392 |
|
| | | | | | | | | | | | | | | | | | | | |
(1) The company realigned certain operations and management responsibilities to better fit within its geographic-based segments. Mexico and Latin America operations were moved from Europe & South Africa to the U.S. segment, which has been renamed U.S. and Latin America. India operations have been moved from Europe & South Africa to the Asia Pacific segment. Europe & South Africa has been renamed Europe, Middle East and Africa. Prior-period figures have been restated to conform to the new reporting alignment.
|
| | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated Investments (USD thousands)
Cash and Invested Assets |
| | | | | | | | | | | | | | | | | | | | |
| | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 |
Fixed maturity securities, available-for-sale | | $ | 24,480,396 |
| | $ | 22,157,182 |
| | $ | 21,474,136 |
| | $ | 21,289,108 |
| | $ | 21,284,216 |
|
Mortgage loans on real estate | | 2,555,800 |
| | 2,526,228 |
| | 2,486,680 |
| | 2,488,582 |
| | 2,377,246 |
|
Policy loans | | 1,250,635 |
| | 1,296,897 |
| | 1,244,469 |
| | 1,244,878 |
| | 1,245,252 |
|
Funds withheld at interest | | 5,940,521 |
| | 5,814,231 |
| | 5,771,467 |
| | 5,739,872 |
| | 5,777,395 |
|
Short-term investments | | 45,596 |
| | 118,789 |
| | 139,395 |
| | 44,192 |
| | 38,601 |
|
Other invested assets | | 1,128,375 |
| | 1,234,779 |
| | 1,324,960 |
| | 1,116,391 |
| | 1,035,809 |
|
Cash and cash equivalents | | 1,378,117 |
| | 1,127,132 |
| | 923,647 |
| | 1,423,235 |
| | 973,619 |
|
Total cash and invested assets | | $ | 36,779,440 |
| | $ | 34,275,238 |
| | $ | 33,364,754 |
| | $ | 33,346,258 |
| | $ | 32,732,138 |
|
Investment Income and Yield Summary |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-Date |
| | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
Average invested assets at amortized cost (1) | | $ | 20,121,261 |
| | $ | 19,726,037 |
| | $ | 18,954,561 |
| | $ | 18,263,880 |
| | $ | 18,112,841 |
| | $ | 2,008,420 |
| | | | $ | 19,807,087 |
| | $ | 17,946,154 |
| | $ | 1,860,933 |
|
Net investment income (1) | | $ | 236,604 |
| | $ | 229,644 |
| | $ | 217,928 |
| | $ | 213,318 |
| | $ | 212,047 |
| | $ | 24,557 |
| | | | $ | 466,248 |
| | $ | 425,369 |
| | $ | 40,879 |
|
Annualized investment yield (ratio of net investment income to average invested assets) (1) | | 4.79 | % | | 4.74 | % | | 4.68 | % | | 4.75 | % | | 4.77 | % | | 0.02 | % | | | | 4.76 | % | | 4.80 | % | | (0.04 | )% |
| | | | | | | | | | | | | | | | | | | | |
(1) Excludes spread related business (e.g. coinsurance of annuities). |
| | | | | | | | | | | | | | | | | | | | |
Reinsurance Group of America, Incorporated Investments (USD thousands)
Amortized cost, gross unrealized gains and losses, and estimated fair values of fixed maturity and equity securities (Excludes Funds Withheld Portfolios) |
| | | | | | | | | | | | | | | | | | | | | | | |
June 30, 2014 |
| | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Estimated Fair Value | | % of Total | | Other-than- temporary Impairment in AOCI |
Available-for-sale: | | | | | | | | | | | | |
Corporate securities | | $ | 13,280,721 |
| | $ | 932,793 |
| | $ | 62,103 |
| | $ | 14,151,411 |
| | 57.8 | % | | $ | — |
|
Canadian and Canadian provincial governments | | 2,786,873 |
| | 964,710 |
| | 3,945 |
| | 3,747,638 |
| | 15.3 | % | | — |
|
Residential mortgage-backed securities | | 946,431 |
| | 49,676 |
| | 9,968 |
| | 986,139 |
| | 4.1 | % | | (300 | ) |
Asset-backed securities | | 993,116 |
| | 24,314 |
| | 9,055 |
| | 1,008,375 |
| | 4.1 | % | | 354 |
|
Commercial mortgage-backed securities | | 1,380,622 |
| | 103,032 |
| | 9,034 |
| | 1,474,620 |
| | 6.0 | % | | (1,609 | ) |
U.S. government and agencies | | 429,215 |
| | 20,987 |
| | 1,696 |
| | 448,506 |
| | 1.8 | % | | — |
|
State and political subdivisions | | 369,515 |
| | 42,553 |
| | 4,581 |
| | 407,487 |
| | 1.7 | % | | — |
|
Other foreign government, supranational, and foreign | | | | | | | | | | | | |
government-sponsored enterprises | | 2,186,853 |
| | 78,730 |
| | 9,363 |
| | 2,256,220 |
| | 9.2 | % | | — |
|
Total fixed maturity securities | | $ | 22,373,346 |
| | $ | 2,216,795 |
| | $ | 109,745 |
| | $ | 24,480,396 |
| | 100.0 | % | | $ | (1,555 | ) |
| | | | | | | | | | | | |
Non-redeemable preferred stock | | 81,240 |
| | 7,165 |
| | 1,567 |
| | 86,838 |
| | 61.7 | % | | |
Other equity securities | | 53,833 |
| | 1,063 |
| | 990 |
| | 53,906 |
| | 38.3 | % | | |
Total equity securities | | $ | 135,073 |
| | $ | 8,228 |
| | $ | 2,557 |
| | $ | 140,744 |
| | 100.0 | % | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2013 |
| | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Estimated Fair Value | | % of Total | | Other-than- temporary Impairment in AOCI |
Available-for-sale: | | | | | | | | | | | | |
Corporate securities | | $ | 11,697,394 |
| | $ | 616,147 |
| | $ | 202,786 |
| | $ | 12,110,755 |
| | 56.4 | % | | $ | — |
|
Canadian and Canadian provincial governments | | 2,728,111 |
| | 669,762 |
| | 16,848 |
| | 3,381,025 |
| | 15.7 | % | | — |
|
Residential mortgage-backed securities | | 970,434 |
| | 38,126 |
| | 18,917 |
| | 989,643 |
| | 4.6 | % | | (300 | ) |
Asset-backed securities | | 891,751 |
| | 18,893 |
| | 15,812 |
| | 894,832 |
| | 4.2 | % | | (2,259 | ) |
Commercial mortgage-backed securities | | 1,314,782 |
| | 91,651 |
| | 17,487 |
| | 1,388,946 |
| | 6.5 | % | | (1,609 | ) |
U.S. government and agencies | | 489,631 |
| | 16,468 |
| | 4,748 |
| | 501,351 |
| | 2.3 | % | | — |
|
State and political subdivisions | | 313,252 |
| | 21,907 |
| | 14,339 |
| | 320,820 |
| | 1.5 | % | | — |
|
Other foreign government, supranational, and foreign | | | | | | | | | | | | |
government-sponsored enterprises | | 1,865,379 |
| | 45,347 |
| | 23,962 |
| | 1,886,764 |
| | 8.8 | % | | — |
|
Total fixed maturity securities | | $ | 20,270,734 |
| | $ | 1,518,301 |
| | $ | 314,899 |
| | $ | 21,474,136 |
| | 100.0 | % | | $ | (4,168 | ) |
| | | | | | | | | | | | |
Non-redeemable preferred stock | | 81,993 |
| | 5,342 |
| | 5,481 |
| | 81,854 |
| | 20.2 | % | | |
Other equity securities | | 327,479 |
| | 618 |
| | 4,220 |
| | 323,877 |
| | 79.8 | % | | |
Total equity securities | | $ | 409,472 |
| | $ | 5,960 |
| | $ | 9,701 |
| | $ | 405,731 |
| | 100.0 | % | | |
Reinsurance Group of America, Incorporated Investments (USD thousands)
Corporate Securities by Sector (Fixed Maturities and Equities) (Excludes Funds Withheld Portfolios) |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, 2014 | | December 31, 2013 |
| | Amortized Cost | | Estimated Fair Value | | % of Total | | Average Credit Ratings (1) | | Amortized Cost | | Estimated Fair Value | | % of Total | | Average Credit Ratings (1) |
Financial Institutions | | | | | | | | | | | | | | | | |
Banking | | $ | 2,854,828 |
| | $ | 2,998,740 |
| | 21.0 | % | | A- | | $ | 2,328,148 |
| | $ | 2,408,741 |
| | 19.2 | % | | A- |
Brokerage/Asset Managers/Exchanges | | 248,460 |
| | 270,182 |
| | 1.9 | % | | A- | | 206,986 |
| | 218,477 |
| | 1.7 | % | | A- |
Finance Comp. | | 163,019 |
| | 174,496 |
| | 1.2 | % | | A | | 151,129 |
| | 158,859 |
| | 1.3 | % | | A |
Insurance | | 692,811 |
| | 758,835 |
| | 5.3 | % | | A- | | 665,252 |
| | 693,516 |
| | 5.5 | % | | A- |
REITs | | 535,714 |
| | 568,832 |
| | 4.0 | % | | BBB+ | | 476,830 |
| | 491,058 |
| | 3.9 | % | | BBB+ |
Other Finance | | 137,556 |
| | 143,248 |
| | 1.0 | % | | BBB | | 406,613 |
| | 407,106 |
| | 3.3 | % | | BBB- |
Total Financial Institutions | | $ | 4,632,388 |
| | $ | 4,914,333 |
| | 34.4 | % | | | | $ | 4,234,958 |
| | $ | 4,377,757 |
| | 34.9 | % | | |
Industrials | | | | | | | | | | | | | | | | |
Basic | | 823,627 |
| | 869,222 |
| | 6.1 | % | | BBB | | 847,764 |
| | 858,886 |
| | 6.9 | % | | BBB |
Capital Goods | | 614,093 |
| | 652,060 |
| | 4.6 | % | | BBB | | 574,108 |
| | 596,150 |
| | 4.8 | % | | BBB |
Communications | | 1,449,164 |
| | 1,559,744 |
| | 10.9 | % | | BBB+ | | 1,234,343 |
| | 1,278,710 |
| | 10.2 | % | | BBB+ |
Consumer Cyclical | | 655,065 |
| | 692,828 |
| | 4.8 | % | | BBB+ | | 631,196 |
| | 649,019 |
| | 5.2 | % | | BBB |
Consumer Noncyclical | | 1,282,180 |
| | 1,364,650 |
| | 9.6 | % | | BBB+ | | 1,062,238 |
| | 1,107,972 |
| | 8.9 | % | | BBB+ |
Energy | | 1,422,170 |
| | 1,535,544 |
| | 10.7 | % | | BBB+ | | 1,326,476 |
| | 1,380,762 |
| | 11.0 | % | | BBB |
Technology | | 477,944 |
| | 500,211 |
| | 3.5 | % | | BBB+ | | 455,081 |
| | 456,505 |
| | 3.6 | % | | BBB+ |
Transportation | | 415,118 |
| | 444,504 |
| | 3.1 | % | | A- | | 365,233 |
| | 380,249 |
| | 3.0 | % | | A- |
Other Industrial | | 106,911 |
| | 116,628 |
| | 0.8 | % | | A- | | 114,520 |
| | 119,353 |
| | 1.0 | % | | A- |
Total Industrials | | $ | 7,246,272 |
| | $ | 7,735,391 |
| | 54.1 | % | | | | $ | 6,610,959 |
| | $ | 6,827,606 |
| | 54.6 | % | | |
Utilities | | | | | | | | | | | | | | | | |
Electric | | 1,187,719 |
| | 1,279,101 |
| | 8.9 | % | | BBB+ | | 1,077,167 |
| | 1,121,373 |
| | 9.0 | % | | BBB+ |
Natural Gas | | 205,121 |
| | 211,661 |
| | 1.5 | % | | BBB | | 109,789 |
| | 111,515 |
| | 0.9 | % | | A- |
Other Utility | | 133,131 |
| | 140,183 |
| | 1.0 | % | | A- | | 62,768 |
| | 67,471 |
| | 0.5 | % | | BBB+ |
Total Utilities | | $ | 1,525,971 |
| | $ | 1,630,945 |
| | 11.4 | % | | | | $ | 1,249,724 |
| | $ | 1,300,359 |
| | 10.4 | % | | |
Other Sectors | | 11,163 |
| | 11,486 |
| | 0.1 | % | | AA | | 11,225 |
| | 10,764 |
| | 0.1 | % | | AA |
Total | | $ | 13,415,794 |
| | $ | 14,292,155 |
| | 100.0 | % | | BBB+ | | $ | 12,106,866 |
| | $ | 12,516,486 |
| | 100.0 | % | | BBB+ |
| | | | | | | | | | | | | | | | |
(1) The Average Credit Rating designations are based on the weighted average ratings from nationally recognized rating organizations, primarily those assigned by S&P. In instances where a S&P rating is not available, the Company will reference the rating provided by Moody’s, and in the absence of both the Company will assign equivalent ratings based on information from the NAIC. |
Reinsurance Group of America, Incorporated
Investments
(USD thousands)
Ratings of Fixed Maturity Securities (Excludes Funds Withheld Portfolios)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | | September 30, 2013 | | June 30, 2013 |
NAIC Designation (1) | | Rating Agency Designation (2) | | Amortized Cost | | Estimated Fair Value | | % of Total | | Amortized Cost | | Estimated Fair Value | | % of Total | | Amortized Cost | | Estimated Fair Value | | % of Total | | Amortized Cost | | Estimated Fair Value | | % of Total | | Amortized Cost | | Estimated Fair Value | | % of Total |
1 | | AAA/AA/A | | $ | 14,646,888 |
| | $ | 16,304,796 |
| | 66.6 | % | | $ | 13,519,276 |
| | $ | 14,859,087 |
| | 67.0 | % | | $ | 12,868,061 |
| | $ | 13,867,584 |
| | 64.6 | % | | $ | 12,460,380 |
| | $ | 13,643,495 |
| | 64.1 | % | | $ | 12,307,880 |
| | $ | 13,643,772 |
| | 64.1 | % |
2 | | BBB | | 6,527,092 |
| | 6,942,290 |
| | 28.3 | % | | 5,882,308 |
| | 6,177,731 |
| | 27.9 | % | | 6,072,604 |
| | 6,255,451 |
| | 29.1 | % | | 6,117,081 |
| | 6,298,628 |
| | 29.6 | % | | 5,997,232 |
| | 6,189,030 |
| | 29.1 | % |
3 | | BB | | 669,569 |
| | 706,926 |
| | 2.9 | % | | 637,814 |
| | 666,571 |
| | 3.0 | % | | 725,733 |
| | 740,465 |
| | 3.4 | % | | 652,300 |
| | 655,000 |
| | 3.1 | % | | 723,316 |
| | 728,014 |
| | 3.4 | % |
4 | | B | | 362,960 |
| | 364,395 |
| | 1.5 | % | | 379,529 |
| | 379,688 |
| | 1.7 | % | | 387,687 |
| | 400,775 |
| | 1.9 | % | | 499,580 |
| | 512,325 |
| | 2.4 | % | | 519,789 |
| | 530,990 |
| | 2.5 | % |
5 | | CCC | | 143,292 |
| | 142,805 |
| | 0.6 | % | | 60,003 |
| | 60,427 |
| | 0.3 | % | | 106,619 |
| | 106,873 |
| | 0.5 | % | | 87,364 |
| | 86,644 |
| | 0.4 | % | | 90,970 |
| | 84,157 |
| | 0.4 | % |
6 | | In or near default | | 23,545 |
| | 19,184 |
| | 0.1 | % | | 18,594 |
| | 13,678 |
| | 0.1 | % | | 110,030 |
| | 102,988 |
| | 0.5 | % | | 100,645 |
| | 93,016 |
| | 0.4 | % | | 118,134 |
| | 108,253 |
| | 0.5 | % |
| | Total | | $ | 22,373,346 |
| | $ | 24,480,396 |
|
| 100.0 | % |
| $ | 20,497,524 |
|
| $ | 22,157,182 |
|
| 100.0 | % |
| $ | 20,270,734 |
|
| $ | 21,474,136 |
|
| 100.0 | % |
| $ | 19,917,350 |
|
| $ | 21,289,108 |
|
| 100.0 | % |
| $ | 19,757,321 |
|
| $ | 21,284,216 |
|
| 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) Effective January 1, 2014, structured securities held by the Company’s insurance subsidiaries that maintain the National Association of Insurance Commissioners (NAIC) statutory basis of accounting that meet the definition of SSAP No. 43R began utilizing the NAIC rating methodology. All other securities will continue to utilize the Nationally Recognized Statistical Rating Organizations (NRSRO) ratings, as available, or equivalent rating based on information from the NAIC. |
(2) The Rating Agency Designation includes all “+” or “-” at that rating level (e. g. ‘BBB’ includes ‘BBB+’, ‘BBB’, and ‘BBB-’). |
Structured Fixed Maturity Securities |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | | September 30, 2013 | | June 30, 2013 |
| | Amortized Cost | | Estimated Fair Value | | Amortized Cost | | Estimated Fair Value | | Amortized Cost | | Estimated Fair Value | | Amortized Cost | | Estimated Fair Value | | Amortized Cost | | Estimated Fair Value |
Residential mortgage-backed securities: | | | | | | | | | | | | | | | | | | | | |
Agency | | $ | 564,397 |
| | $ | 594,042 |
| | $ | 569,064 |
| | $ | 591,515 |
| | $ | 567,113 |
| | $ | 580,855 |
| | $ | 517,517 |
| | $ | 541,870 |
| | $ | 546,603 |
| | $ | 579,317 |
|
Non-agency | | 382,034 |
| | 392,097 |
| | 400,880 |
| | 410,356 |
| | 403,321 |
| | 408,788 |
| | 405,064 |
| | 409,968 |
| | 468,552 |
| | 475,651 |
|
Total residential mortgage-backed securities | | 946,431 |
| | 986,139 |
| | 969,944 |
| | 1,001,871 |
| | 970,434 |
| | 989,643 |
| | 922,581 |
| | 951,838 |
| | 1,015,155 |
| | 1,054,968 |
|
Commercial mortgage-backed securities | | 1,380,622 |
| | 1,474,620 |
| | 1,367,205 |
| | 1,450,503 |
| | 1,314,782 |
| | 1,388,946 |
| | 1,371,473 |
| | 1,453,114 |
| | 1,564,924 |
| | 1,638,632 |
|
Asset-backed securities | | 993,116 |
| | 1,008,375 |
| | 933,130 |
| | 944,579 |
| | 891,751 |
| | 894,832 |
| | 883,495 |
| | 885,278 |
| | 789,849 |
| | 790,310 |
|
Total | | $ | 3,320,169 |
| | $ | 3,469,134 |
| | $ | 3,270,279 |
| | $ | 3,396,953 |
| | $ | 3,176,967 |
| | $ | 3,273,421 |
| | $ | 3,177,549 |
| | $ | 3,290,230 |
| | $ | 3,369,928 |
| | $ | 3,483,910 |
|
Reinsurance Group of America, Incorporated Investments (USD thousands)
Gross Unrealized Losses Aging
Fixed Maturity Securities |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | | September 30, 2013 | | June 30, 2013 |
| | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total |
Less than 20% | | $ | 96,330 |
| | 85.8 | % | | $ | 157,050 |
| | 87.6 | % | | $ | 287,032 |
| | 88.4 | % | | $ | 279,211 |
| | 87.6 | % | | $ | 261,628 |
| | 84.2 | % |
20% or more for less than six months | | 2,479 |
| | 2.2 | % | | 163 |
| | 0.1 | % | | 6,444 |
| | 2.0 | % | | 6,325 |
| | 2.0 | % | | 5,629 |
| | 1.8 | % |
20% or more for six months or greater | | 10,936 |
| | 9.7 | % | | 17,771 |
| | 9.9 | % | | 21,423 |
| | 6.6 | % | | 25,940 |
| | 8.1 | % | | 37,338 |
| | 12.0 | % |
Total | | $ | 109,745 |
|
| 97.7 | % |
| $ | 174,984 |
|
| 97.6 | % |
| $ | 314,899 |
|
| 97.0 | % |
| $ | 311,476 |
|
| 97.7 | % |
| $ | 304,595 |
|
| 98.0 | % |
Equity Securities |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | June 30, 2014 | | March 31, 2014 | | December 31, 2013 | | September 30, 2013 | | June 30, 2013 |
| | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total | | Gross Unrealized Losses | | % of Total |
Less than 20% | | $ | 2,555 |
| | 2.3 | % | | $ | 4,321 |
| | 2.4 | % | | $ | 9,699 |
| | 3.0 | % | | $ | 7,383 |
| | 2.3 | % | | $ | 6,137 |
| | 2.0 | % |
20% or more for less than six months | | — |
| | 0.0 | % | | — |
| | 0.0 | % | | — |
| | 0.0 | % | | — |
| | 0.0 | % | | — |
| | 0.0 | % |
20% or more for six months or greater | | 2 |
| | 0.0 | % | | 2 |
| | 0.0 | % | | 2 |
| | 0.0 | % | | 2 |
| | 0.0 | % | | 2 |
| | 0.0 | % |
Total | | $ | 2,557 |
|
| 2.3 | % |
| $ | 4,323 |
|
| 2.4 | % |
| $ | 9,701 |
|
| 3.0 | % |
| $ | 7,385 |
|
| 2.3 | % |
| $ | 6,139 |
|
| 2.0 | % |
Reinsurance Group of America, Incorporated Investments (USD thousands) Fixed Maturities and Equity Securities Below Amortized Cost (Excludes Funds Withheld Portfolios)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | As of June 30, 2014 |
| | Less than 12 months | | Equal to or greater than 12 months | | Total |
| | Estimated Fair Value | | Gross Unrealized Losses | | Estimated Fair Value | | Gross Unrealized Losses | | Estimated Fair Value | | Gross Unrealized Losses |
Investment grade securities: | | | | | | | | | | | | |
Corporate securities | | $ | 1,624,031 |
| | $ | 21,638 |
| | $ | 1,062,513 |
| | $ | 36,925 |
| | $ | 2,686,544 |
| | $ | 58,563 |
|
Canadian and Canadian provincial governments | | 20,728 |
| | 413 |
| | 74,864 |
| | 3,532 |
| | 95,592 |
| | 3,945 |
|
Residential mortgage-backed securities | | 74,009 |
| | 2,365 |
| | 122,444 |
| | 7,337 |
| | 196,453 |
| | 9,702 |
|
Asset-backed securities | | 133,606 |
| | 1,137 |
| | 130,015 |
| | 5,083 |
| | 263,621 |
| | 6,220 |
|
Commercial mortgage-backed securities | | 28,099 |
| | 206 |
| | 39,222 |
| | 4,191 |
| | 67,321 |
| | 4,397 |
|
U.S. government and agencies | | 10,819 |
| | 9 |
| | 75,730 |
| | 1,687 |
| | 86,549 |
| | 1,696 |
|
State and political subdivisions | | 13,426 |
| | 600 |
| | 45,879 |
| | 3,981 |
| | 59,305 |
| | 4,581 |
|
Other foreign government, supranational, and foreign | | | | | | | | | | | | |
government-sponsored enterprises | | 367,176 |
| | 2,339 |
| | 187,073 |
| | 7,023 |
| | 554,249 |
| | 9,362 |
|
Investment grade securities | | 2,271,894 |
| | 28,707 |
| | 1,737,740 |
| | 69,759 |
| | 4,009,634 |
| | 98,466 |
|
| | | | | | | | | | | | |
Non-investment grade securities: | | | | | | | | | | | | |
Corporate securities | | 165,552 |
| | 2,181 |
| | 19,206 |
| | 1,359 |
| | 184,758 |
| | 3,540 |
|
Residential mortgage-backed securities | | 16,411 |
| | 137 |
| | 3,576 |
| | 129 |
| | 19,987 |
| | 266 |
|
Asset-backed securities | | 11,334 |
| | 183 |
| | 10,747 |
| | 2,652 |
| | 22,081 |
| | 2,835 |
|
Commercial mortgage-backed securities | | — |
| | — |
| | 6,406 |
| | 4,637 |
| | 6,406 |
| | 4,637 |
|
Other foreign government, supranational, and foreign government-sponsored enterprises | | 2,261 |
| | 1 |
| | — |
| | — |
| | 2,261 |
| | 1 |
|
Non-investment grade securities | | 195,558 |
| | 2,502 |
| | 39,935 |
| | 8,777 |
| | 235,493 |
| | 11,279 |
|
Total fixed maturity securities | | $ | 2,467,452 |
| | $ | 31,209 |
| | $ | 1,777,675 |
| | $ | 78,536 |
| | $ | 4,245,127 |
| | $ | 109,745 |
|
| | | | | | | | | | | | |
Non-redeemable preferred stock | | 6,705 |
| | 487 |
| | 14,902 |
| | 1,080 |
| | 21,607 |
| | 1,567 |
|
Other equity securities | | — |
| | — |
| | 32,463 |
| | 990 |
| | 32,463 |
| | 990 |
|
Total Equity securities | | $ | 6,705 |
| | $ | 487 |
| | $ | 47,365 |
| | $ | 2,070 |
| | $ | 54,070 |
| | $ | 2,557 |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | As of December 31, 2013 |
| | Less than 12 months | | Equal to or greater than 12 months | | Total |
| | Estimated Fair Value | | Gross Unrealized Losses | | Estimated Fair Value | | Gross Unrealized Losses | | Estimated Fair Value | | Gross Unrealized Losses |
Investment grade securities: | | | | | | | | | | | | |
Corporate securities | | $ | 3,141,179 |
| | $ | 148,895 |
| | $ | 301,303 |
| | $ | 40,548 |
| | $ | 3,442,482 |
| | $ | 189,443 |
|
Canadian and Canadian provincial governments | | 188,491 |
| | 14,419 |
| | 12,029 |
| | 2,429 |
| | 200,520 |
| | 16,848 |
|
Residential mortgage-backed securities | | 283,967 |
| | 15,900 |
| | 23,068 |
| | 1,688 |
| | 307,035 |
| | 17,588 |
|
Asset-backed securities | | 255,656 |
| | 4,916 |
| | 56,668 |
| | 4,983 |
| | 312,324 |
| | 9,899 |
|
Commercial mortgage-backed securities | | 219,110 |
| | 3,725 |
| | 20,068 |
| | 5,745 |
| | 239,178 |
| | 9,470 |
|
U.S. government and agencies | | 133,697 |
| | 4,469 |
| | 4,406 |
| | 279 |
| | 138,103 |
| | 4,748 |
|
State and political subdivisions | | 120,193 |
| | 9,723 |
| | 15,202 |
| | 4,616 |
| | 135,395 |
| | 14,339 |
|
Other foreign government, supranational, and foreign government-sponsored enterprises | | 665,313 |
| | 21,075 |
| | 36,212 |
| | 2,847 |
| | 701,525 |
| | 23,922 |
|
Investment grade securities | | 5,007,606 |
| | 223,122 |
| | 468,956 |
| | 63,135 |
| | 5,476,562 |
| | 286,257 |
|
| | | | | | | | | | | | |
Non-investment grade securities: | | | | | | | | | | | | |
Corporate securities | | 283,603 |
| | 9,451 |
| | 38,256 |
| | 3,892 |
| | 321,859 |
| | 13,343 |
|
Residential mortgage-backed securities | | 62,146 |
| | 1,075 |
| | 3,945 |
| | 254 |
| | 66,091 |
| | 1,329 |
|
Asset-backed securities | | 28,670 |
| | 415 |
| | 32,392 |
| | 5,498 |
| | 61,062 |
| | 5,913 |
|
Commercial mortgage-backed securities | | 15,762 |
| | 81 |
| | 10,980 |
| | 7,936 |
| | 26,742 |
| | 8,017 |
|
Other foreign government, supranational, and foreign government-sponsored enterprises | | 9,403 |
| | 40 |
| | — |
| | — |
| | 9,403 |
| | 40 |
|
Non-investment grade securities | | 399,584 |
| | 11,062 |
| | 85,573 |
| | 17,580 |
| | 485,157 |
| | 28,642 |
|
Total fixed maturity securities | | $ | 5,407,190 |
| | $ | 234,184 |
| | $ | 554,529 |
| | $ | 80,715 |
| | $ | 5,961,719 |
| | $ | 314,899 |
|
| | | | | | | | | | | | |
Non-redeemable preferred stock | | 51,386 |
| | 5,479 |
| | 1 |
| | 2 |
| | 51,387 |
| | 5,481 |
|
Other equity securities | | 218,834 |
| | 1,748 |
| | 32,550 |
| | 2,472 |
| | 251,384 |
| | 4,220 |
|
Total Equity securities | | $ | 270,220 |
| | $ | 7,227 |
| | $ | 32,551 |
| | $ | 2,474 |
| | $ | 302,771 |
| | $ | 9,701 |
|
Reinsurance Group of America, Incorporated Investments (USD thousands)
Consolidated Investment Related Gains and Losses |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | Three Months Ended | | Current Qtr vs. PY Quarter | | | | Year-to-date |
| | June 30, 2014 | | March 31, 2014 | | Dec. 31, 2013 | | Sept. 30, 2013 | | June 30, 2013 | | | | | June 30, 2014 | | June 30, 2013 | | Change |
Fixed Maturity and Equity Securities: | | | | | | | | | | | | | | | | | | | | |
Other-than-temporary impairment losses on fixed maturities | | $ | (870 | ) | | $ | (303 | ) | | $ | (2,258 | ) | | $ | (391 | ) | | $ | (9,803 | ) | | $ | 8,933 |
| | | | $ | (1,173 | ) | | $ | (10,005 | ) | | $ | 8,832 |
|
Portion of loss recognized in accumulated other comprehensive income (before taxes) | | — |
| | — |
| | — |
| | 59 |
| | (306 | ) | | 306 |
| | | | — |
| | (306 | ) | | 306 |
|
Net other-than-temporary impairment losses on fixed maturities recognized in earnings | | (870 | ) | | (303 | ) | | (2,258 | ) | | (332 | ) | | (10,109 | ) | | 9,239 |
| | | | (1,173 | ) | | (10,311 | ) | | 9,138 |
|
Gain on investment activity | | 34,887 |
| | 8,067 |
| | 12,659 |
| | 21,560 |
| | 26,845 |
| | 8,042 |
| | | | 42,954 |
| | 48,525 |
| | (5,571 | ) |
Loss on investment activity | | (6,877 | ) | | (6,583 | ) | | (12,169 | ) | | (30,434 | ) | | (6,760 | ) | | (117 | ) | | | | (13,460 | ) | | (17,972 | ) | | 4,512 |
|
Net gain/(loss) on fixed maturity and equity securities | | 27,140 |
| | 1,181 |
| | (1,768 | ) | | (9,206 | ) | | 9,976 |
| | 17,164 |
| | | | 28,321 |
| | 20,242 |
| | 8,079 |
|
| | | | | | | | | | | | | | | | | | | | |
Other impairment losses and change in mortgage loan provision | | (5,309 | ) | | 1,664 |
| | (5,665 | ) | | 233 |
| | 125 |
| | (5,434 | ) | | | | (3,645 | ) | | (1,501 | ) | | (2,144 | ) |
Other non-derivative gain/(loss), net | | 9,197 |
| | 8,368 |
| | 10,536 |
| | 4,594 |
| | 6,962 |
| | 2,235 |
| | | | 17,565 |
| | 11,551 |
| | 6,014 |
|
| | | | | | | | | | | | | | | | | | | | |
Free-standing Derivatives: | | | | | | | | | | | | | | | | | | | | |
Credit Default Swaps | | 4,783 |
| | (2,114 | ) | | 7,051 |
| | 10,805 |
| | 2,428 |
| | 2,355 |
| | | | 2,669 |
| | 6,332 |
| | (3,663 | ) |
Interest Rate Swaps - non-hedged | | 22,244 |
| | 29,659 |
| | (15,498 | ) | | (8,221 | ) | | (38,414 | ) | | 60,658 |
| | | | 51,903 |
| | (60,679 | ) | | 112,582 |
|
Interest Rate Swaps - hedged | | 7 |
| | (6 | ) | | (5 | ) | | (3 | ) | | 31 |
| | (24 | ) | | | | 1 |
| | 14 |
| | (13 | ) |
Futures | | (7,684 | ) | | (1,584 | ) | | (3,851 | ) | | (1,139 | ) | | 714 |
| | (8,398 | ) | | | | (9,268 | ) | | (6,167 | ) | | (3,101 | ) |
CPI Swaps | | 115 |
| | 352 |
| | 85 |
| | (39 | ) | | (1,117 | ) | | 1,232 |
| | | | 467 |
| | (1,988 | ) | | 2,455 |
|
Equity options | | (8,800 | ) | | (8,965 | ) | | (19,447 | ) | | (24,112 | ) | | (5,049 | ) | | (3,751 | ) | | | | (17,765 | ) | | (35,672 | ) | | 17,907 |
|
Currency Forwards | | 1,178 |
| | 1,154 |
| | (5,213 | ) | | 629 |
| | (2,958 | ) | | 4,136 |
| | | | 2,332 |
| | (8,617 | ) | | 10,949 |
|
Interest Rate Options | | 2,004 |
| | 1,282 |
| | (3,145 | ) | | (2,375 | ) | | (7,980 | ) | | 9,984 |
| | | | 3,286 |
| | (5,998 | ) | | 9,284 |
|
Total free-standing derivatives | | 13,847 |
| | 19,778 |
| | (40,023 | ) | | (24,455 | ) | | (52,345 | ) | | 66,192 |
| | | | 33,625 |
| | (112,775 | ) | | 146,400 |
|
| | | | | | | | | | | | | | | | | | | | |
Embedded Derivatives: | | | | | | | | | | | | | | | | | | | | |
Modified coinsurance and funds withheld treaties | | 78,835 |
| | 77,241 |
| | (337 | ) | | (67,460 | ) | | 47,716 |
| | 31,119 |
| | | | 156,076 |
| | 137,974 |
| | 18,102 |
|
GMXB | | (5,183 | ) | | (23,661 | ) | | 35,098 |
| | 19,829 |
| | 35,809 |
| | (40,992 | ) | | | | (28,844 | ) | | 87,123 |
| | (115,967 | ) |
Total embedded derivatives | | 73,652 |
| | 53,580 |
| | 34,761 |
| | (47,631 | ) | | 83,525 |
| | (9,873 | ) | | | | 127,232 |
| | 225,097 |
| | (97,865 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net gain/(loss) on total derivatives | | 87,499 |
| | 73,358 |
| | (5,262 | ) | | (72,086 | ) | | 31,180 |
| | 56,319 |
| | | | 160,857 |
| | 112,322 |
| | 48,535 |
|
| | | | | | | | | | | | | | | | | | | | |
Total investment related gains / (losses), net | | $ | 118,527 |
| | $ | 84,571 |
| | $ | (2,159 | ) | | $ | (76,465 | ) | | $ | 48,243 |
| | $ | 70,284 |
| | | | $ | 203,098 |
| | $ | 142,614 |
| | $ | 60,484 |
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
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