Filed by Reinsurance Group of America, Incorporated
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Reinsurance Group of America, Incorporated
Commission File No.: 333-151390
Subject Company: MetLife, Inc.
Commission File No.: 001-15787
[RGA logo]
For further information, contact
Jack B. Lay
Senior Executive Vice President
and Chief Financial Officer
(636) 736-7000
FOR IMMEDIATE RELEASE
---------------------
REINSURANCE GROUP OF AMERICA REPORTS SECOND-QUARTER RESULTS;
------------------------------------------------------------
OPERATING EARNINGS PER SHARE UP 31 PERCENT
------------------------------------------
ST. LOUIS, July 21, 2008 - Reinsurance Group of America, Incorporated
(NYSE:RGA), a leading global provider of life reinsurance, reported net income
for the second quarter of $110.7 million, or $1.73 per diluted share, compared
to $77.5 million, or $1.20 per diluted share, in the prior-year quarter. RGA
uses a non-GAAP financial measure called operating income as a basis for
analyzing financial results. The definition of operating income and
reconciliations to GAAP net income are provided in the following tables.
Operating income increased to $109.7 million, or $1.71 per diluted share, from
$84.6 million, or $1.31 per diluted share in the year-ago quarter, a 31
percent increase on a per share basis. Second-quarter net premiums rose 12
percent, to $1,358.6 million, from $1,207.6 million a year ago. Net investment
income totaled $254.9 million versus $274.9 million the year before.
For the first half of 2008, net income totaled $142.2 million or
$2.22 per diluted share, compared to $153.7 million, or $2.39 per diluted
share, in the year-ago period. Operating income totaled $180.6 million, or
$2.82 per diluted share, compared to $166.7 million, or $2.60 per diluted
share in the prior-year period, an 8 percent increase on a per share basis.
Consolidated net premiums were up 14 percent, to $2,656.6 million from
$2,333.1 million.
A. Greig Woodring, president and chief executive officer, commented,
"We reported a strong quarter with solid contributions from all our operating
segments. The U.S. segment reported pre-tax net income totaling $109.2 million
for the quarter versus $86.2 million the year before. Pre-tax operating income
in that segment increased 17 percent to $109.2 million from $93.3 million the
year before. Mortality experience rebounded from the first quarter as claims
were at expected levels. Net premiums were up 5 percent to $754.4 million from
$720.4 million
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in the prior-year quarter. On a year-to-date basis, net premiums have
increased 6 percent, slightly below the low end of our guidance range of 7 to
9 percent.
"Our Canada operations reported a solid quarter, with pre-tax net
income of $26.8 million compared to $24.2 million a year ago. Pre-tax
operating income totaled $23.8 million versus $22.6 million a year ago. The
prior-year result was characterized by very favorable mortality. Mortality
experience in the current-year quarter was slightly favorable. Net premiums
increased 14 percent to $139.5 million from $122.6 million in the prior year.
Net premiums and pre-tax operating income for the second quarter of 2008 were
favorably affected by currency exchange rates relative to the prior year by
approximately $11.3 million and $2.4 million, respectively, as the Canadian
dollar has strengthened since last-year's second quarter.
"Asia Pacific reported a strong quarter with pre-tax net income of
$21.3 million compared with $15.6 million in the year-ago quarter. Pre-tax
operating income totaled $22.8 million compared with $16.1 million a year ago.
Claims experience was favorable in our three largest markets, Australia, Japan
and South Korea. Net premium flow was robust, increasing 40 percent, to $277.7
million from $199.0 million. South Korea, in particular, reported strong
premiums, as our efforts in this emerging reinsurance market continue to
produce excellent results. On a year-to-date basis, South Korea is our fifth
largest market, behind the U.S., UK, Canada and Australia markets, based on
net premiums. Foreign currency fluctuations positively affected net premiums
and pre-tax operating income by approximately $8.6 million and $2.3 million,
respectively, primarily due to a stronger Australian dollar and Japanese yen.
"Europe and South Africa results rebounded from recent poor
mortality, with pre-tax net income increasing to $17.0 million from $11.8
million a year ago. Pre-tax operating income increased to $17.2 million versus
$12.5 million last year, when we experienced somewhat higher claim levels in
the UK. Net premiums increased 13 percent to $185.5 million. Foreign currency
exchange fluctuations favorably affected both reported net premiums and
pre-tax operating income by approximately $0.6 million and $0.6 million,
respectively, due to a stronger euro somewhat offset by a weaker British pound
sterling.
"Our investment portfolio continues to perform well.
Investment-related write-downs were less than $1.0 million. Those write-downs
were largely due to our intent to sell certain securities in an unrealized
loss position. Our subprime mortgage exposure remains modest at $256.8 million
in book value, or less than 2 percent of total invested assets, with 66
percent rated
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"AA" or higher, including 26 percent in the "AAA" category. Approximately 13
percent of the subprime mortgage exposure, or $34.2 million, is rated below
investment grade. We largely avoided investing in securities originated in the
second half of 2005 and beyond, which we believe was a period of lessened
underwriting quality. Unlike most companies in the financial services and life
insurance sectors, our profits are primarily driven by mortality results. We
do not stretch for investment yield and therefore our investment profile is
conservative with 97 percent of our securities held in the investment grade
categories."
Woodring concluded, "Results were very strong during the quarter,
offsetting in part the weaker first-quarter results. Our results so far this
year reflect the short-term volatility that is a part of our business.
However, we continue to successfully execute our business plan, with our book
value per share growing in the 13 to 14 percent range on a compound basis
since our initial public offering in 1993. Additionally, at this time there
are no arbitrations or claims disputes associated with our discontinued
accident and health operations, and the remaining runoff activity of that
business is not significant.
"On June 2, MetLife and RGA jointly announced a proposed transaction
that could lead to MetLife disposing of its majority position in RGA. We
believe the transaction will benefit our shareholders by, among other things,
increasing the liquidity and public float of RGA's common stock and allowing
management greater flexibility to deal with opportunities and challenges
specific to our business. The transaction is subject to various conditions,
including shareholder and regulatory approvals, and could be completed as
early as the third quarter of this year."
The company also announced that its board of directors declared a
regular quarterly dividend of $0.09, payable August 25 to shareholders of
record as of August 4.
A conference call to discuss the company's second-quarter results
will begin at 9 a.m. Eastern Time on Tuesday, July 22. Interested parties may
access the call by dialing 877-856-1965 (domestic) or 719-325-4793
(international). The access code is 5790642. A live audio webcast of the
conference call will be available on the company's investor relations web page
at www.rgare.com. A replay of the conference call will be available at the
same address beginning on Wednesday, July 23, for 90 days following the
conference call. A telephonic replay will also be available from July 23
through July 29 at 888-203-1112 (domestic) or 719-457-0820, access code
5790642.
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Reinsurance Group of America, Incorporated, through its various
operating subsidiaries, is among the largest global providers of life
reinsurance. Reinsurance Group of America, Incorporated has subsidiary
companies or offices in Australia, Barbados, Bermuda, Canada, China, France,
Germany, Hong Kong, India, Ireland, Italy, Japan, Mexico, Poland, South
Africa, South Korea, Spain, Taiwan, the United Kingdom and the United States.
Worldwide, the company has approximately $2.2 trillion of life reinsurance in
force, and assets of $22.4 billion. MetLife, Inc. is the beneficial owner of
approximately 52 percent of RGA's outstanding shares.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
---------------------------------------------------------
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including, among others,
statements relating to projections of the earnings, revenues, income or loss,
future financial performance and growth potential of Reinsurance Group of
America, Incorporated and its subsidiaries (which we refer to in the following
paragraphs as "we," "us" or "our"). The words "intend," "expect," "project,"
"estimate," "predict," "anticipate," "should," "believe," and other similar
expressions also are intended to identify forward-looking statements.
Forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified. Future events and actual
results, performance and achievements could differ materially from those set
forth in, contemplated by or underlying the forward-looking statements.
Numerous important factors could cause actual results and events to differ
materially from those expressed or implied by forward-looking statements
including, without limitation, (1) adverse changes in mortality, morbidity,
lapsation or claims experience, (2) changes in our financial strength and
credit ratings or those of MetLife, Inc. ("MetLife"), the beneficial owner of
a majority of our common shares, or its subsidiaries, and the effect of such
changes on our future results of operations and financial condition, (3)
inadequate risk analysis and underwriting, (4) general economic conditions or
a prolonged economic downturn affecting the demand for insurance and
reinsurance in our current and planned markets, (5) the availability and cost
of collateral necessary for regulatory reserves and capital, (6) market or
economic conditions that adversely affect our ability to make timely sales of
investment securities, (7) risks inherent in our risk management and
investment strategy, including changes in investment portfolio yields due to
interest rate or credit quality changes, (8) fluctuations in U.S. or foreign
currency exchange rates, interest rates, or securities and real estate
markets, (9) adverse litigation or arbitration
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results, (10) the adequacy of reserves, resources and accurate information
relating to settlements, awards and terminated and discontinued lines of
business, (11) the stability of and actions by governments and economies in
the markets in which we operate, (12) competitive factors and competitors'
responses to our initiatives, (13) the success of our clients, (14) successful
execution of our entry into new markets, (15) successful development and
introduction of new products and distribution opportunities, (16) our ability
to successfully integrate and operate reinsurance business that we acquire,
(17) regulatory action that may be taken by state Departments of Insurance
with respect to us, MetLife, or its subsidiaries, (18) our dependence on third
parties, including those insurance companies and reinsurers to which we cede
some reinsurance, third-party investment managers and others, (19) the threat
of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics
anywhere in the world where we or our clients do business, (20) changes in
laws, regulations, and accounting standards applicable to us, our
subsidiaries, or our business, (21) the effect of our status as an insurance
holding company and regulatory restrictions on our ability to pay principal of
and interest on our debt obligations, and (22) other risks and uncertainties
described in this document and in our other filings with the Securities and
Exchange Commission.
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.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with MetLife's proposed divestiture of its stake in
RGA, RGA has filed with the U.S. Securities and Exchange Commission (SEC) a
registration statement on Form S-4 (File No. 333-151390), which includes a
preliminary proxy statement/prospectus related to the Recapitalization and a
preliminary prospectus relating to the Split-Off. At the appropriate time,
MetLife will file with the SEC a statement on Schedule TO. Investors and
holders of RGA and MetLife securities are strongly encouraged to read the
registration statement and any other relevant documents filed with the SEC,
including the final proxy statement/prospectus relating to the
Recapitalization, the final prospectus relating to the Split-Off and related
Split-Off materials
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and the tender offer statement on Schedule TO (when available), as well as any
amendments and supplements to those documents, because they will contain
important information about RGA, MetLife, and the proposed transactions. The
final proxy statement/prospectus relating to the Recapitalization and related
transactions will be mailed to shareholders of RGA and the final prospectus
relating to the Split-Off, related Split-Off materials and the tender offer
statement on Schedule TO will be mailed to stockholders of MetLife. Investors
and security holders will be able to obtain free copies of the registration
statement, the final proxy statement/prospectus relating to the
Recapitalization and the final prospectus relating to the Split-Off and
related Split-Off materials and the tender offer statement on Schedule TO
(when available) as well as other filed documents containing information about
MetLife and RGA, without charge, at the SEC's web site (www.sec.gov). Free
copies of RGA's filings also may be obtained by directing a request to RGA,
Investor Relations, by phone to (636) 736-7243, in writing to Mr. John Hayden,
Vice President-Investor Relations, Reinsurance Group of America, Incorporated,
1370 Timberlake Manor Parkway, Chesterfield, Missouri, 63017, or by email to
investrelations@rgare.com. Free copies of MetLife's filings may be obtained by
directing a request to MetLife, Investor Relations, by phone to (212)
578-2211, in writing to MetLife, Inc., 1 MetLife Plaza, Long Island City, NY
11101, or by email to metir@metlife.com. Neither RGA, MetLife nor any of their
respective directors or executive officers or any dealer manager, if any, that
may be appointed with respect to the Split-Off makes any recommendation as to
whether you should participate in the Split-Off.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of
securities in any jurisdiction in which such solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
such jurisdiction. Such an offer may be made solely by a prospectus meeting
the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Accordingly, neither the proxy solicitation for the Recapitalization nor the
Offer for the outstanding shares of MetLife common stock pursuant to the
Split-Off described in this communication has commenced. At the time that the
contemplated Split-Off is commenced, MetLife will file a statement on Schedule
TO with the SEC. The distribution of this communication may, in some
countries, be restricted by law or regulation. Accordingly, persons who come
into possession of this document should inform themselves of and observe these
restrictions.
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PARTICIPANTS IN THE SOLICITATION
RGA, MetLife and their respective directors and executive officers
may be deemed, under included in its definitive proxy statement for its 2008
Annual Meeting of Shareholders filed with SEC rules, to be participants in the
solicitation of proxies from RGA's shareholders with respect the SEC on April
9, 2008. Information regarding the directors and officers of MetLife is
included to the proposed transaction. Information regarding the directors and
executive officers of RGA is in the definitive proxy statement for MetLife's
2008 Annual Meeting of Shareholders filed with the SEC on March 18, 2008. More
detailed information regarding the identity of potential participants, and
their direct or indirect interests, by securities holdings or otherwise, is
set forth in the amended registration statement filed with the SEC on July 10,
2008, as may be further amended from time to time, the proxy
statement/prospectus relating to the Recapitalization, the prospectus relating
to the Split-Off and other materials to be filed with the SEC in connection
with the proposed transactions.
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Operating Income
RGA uses a non-GAAP financial measure called operating income as a basis for
analyzing financial results. This measure also serves as a basis for
establishing target levels and awards under RGA's management incentive
programs. Management believes that operating income, on a pre-tax and
after-tax basis, better measures the ongoing profitability and underlying
trends of the company's continuing operations, primarily because that measure
excludes the effect of 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 tend to be highly variable, primarily due to
the credit market and interest rate environment and are not necessarily
indicative of the performance of the company's underlying businesses.
Additionally, operating income excludes any net gain or loss from discontinued
operations and the cumulative effect of any accounting changes, which
management believes are not indicative of the company's ongoing operations.
The definition of operating income can vary by company and is not considered a
substitute for GAAP net income.
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Net Income From Continuing Operations
to Operating Income
(Dollars in thousands)
(Unaudited) Three Months Ended Six Months Ended
June 30, June 30,
-----------------------------------------------------------------------
2008 2007 2008 2007
---- ---- ---- ----
GAAP net income-continuing
operations $110,806 $ 79,037 $147,395 $155,974
Capital losses and other, net 1,207 4,666 1,831 10,320
Embedded Derivatives:
Included in investment
related losses, net 3,962 4,632 104,595 2,787
Included in interest
credited/policy acquisition
costs and other
insurance expenses, net (4,457) -- 29,600 --
DAC offset, net (1,830) (3,717) (102,776) (2,379)
----------------------------------------
Operating income $109,688 $ 84,618 $180,645 $166,702
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) Three Months Ended June 30, 2008
Capital Change in
Pre-tax (gains) value of Pre-tax
net losses embedded operating
income and other, derivatives, income
(loss) net net (loss)
------- ---------- ------------ --------
U.S. Operations:
Traditional $ 95,622 $ 637 $ -- $ 96,259
Asset Intensive 9,893 (3,252)(1) 2,621(2) 9,262
Financial Reinsurance 3,651 2 -- 3,653
---------------------------------------------
Total U.S. 109,166 (2,613) 2,621 109,174
Canada Operations 26,778 (3,026) -- 23,752
Europe & South Africa 17,041 131 -- 17,172
Asia Pacific Operations 21,256 1,510 -- 22,766
Corporate and Other (3,277) (241) -- (3,518)
---------------------------------------------
Consolidated $170,964 $(4,239) $ 2,621 $169,346
=============================================
(1) Asset Intensive is net of $(6,201) DAC offset.
(2) Asset Intensive is net of DAC offsets of $3,384.
(Unaudited) Three Months Ended June 30, 2007
Capital Change in
Pre-tax (gains) value of Pre-tax
net losses embedded operating
income and other, derivatives, income
(loss) net net (loss)
------- ---------- ------------ --------
U.S. Operations:
Traditional $ 79,098 $ 4,497 $ -- $ 83,595
Asset Intensive 4,111 971(1) 1,581(2) 6,663
Financial Reinsurance 3,006 7 -- 3,013
---------------------------------------------
Total U.S. 86,215 5,475 1,581 93,271
Canada Operations 24,202 (1,642) -- 22,560
Europe & South Africa 11,846 630 -- 12,476
Asia Pacific Operations 15,609 499 -- 16,108
Corporate & Other (14,159) 1,963 -- (12,196)
---------------------------------------------
Consolidated $123,713 $ 6,925 $ 1,581 $132,219
=============================================
(1) Asset Intensive is net of $(173) DAC offset.
(2) Asset Intensive is net of DAC offsets of $(5,545).
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Reconciliation of Pre-tax Net Income From Continuing Operations
to Pre-tax Operating Income
(Dollars in thousands)
(Unaudited) Six Months Ended June 30, 2008
Capital Change in
Pre-tax (gains) value of Pre-tax
net losses embedded operating
income and other, derivatives, income
(loss) net net (loss)
------- ---------- ------------ --------
U.S. Operations:
Traditional $150,070 $ 3,145 $ -- $153,215
Asset Intensive (31,209) (1,506)(1) 47,524(2) 14,809
Financial Reinsurance 5,590 3 -- 5,593
---------------------------------------------
Total U.S. 124,451 1,642 47,524 173,617
Canada Operations 50,449 1,481 -- 51,930
Europe & South Africa 23,084 (614) -- 22,470
Asia Pacific Operations 39,819 996 -- 40,815
Corporate and Other (10,151) 130 -- (10,021)
---------------------------------------------
Consolidated $227,652 $ 3,635 $47,524 $278,811
=============================================
(1) Asset Intensive is net of $811 DAC offset.
(2) Asset Intensive is net of DAC offsets of $(158,929).
(Unaudited) Six Months Ended June 30, 2007
Capital Change in
Pre-tax (gains) value of Pre-tax
net losses embedded operating
income and other, derivatives, income
(loss) net net (loss)
------- ---------- ------------ --------
U.S. Operations:
Traditional $165,109 $ 4,835 $ -- $169,944
Asset Intensive 8,573 1,705(1) 850(2) 11,128
Financial Reinsurance 5,710 7 -- 5,717
---------------------------------------------
Total U.S. 179,392 6,547 850 186,789
Canada Operations 39,236 (4,168) -- 35,068
Europe & South Africa 32,970 854 -- 33,824
Asia Pacific Operations 25,941 570 -- 26,511
Corporate & Other (34,596) 11,815 -- (22,781)
---------------------------------------------
Consolidated $242,943 $15,618 $ 850 $259,411
=============================================
(1) Asset Intensive is net of $(222) DAC offset.
(2) Asset Intensive is net of DAC offsets of $(3,438).
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
---------------------------------------------------------------------------
2008 2007 2008 2007
---- ---- ---- ----
Revenues:
Net premiums $1,358,555 $1,207,646 $2,656,620 $2,333,096
Investment income, net
of related expenses 254,868 274,902 454,394 490,645
Investment related
losses, net (7,079) (14,218) (162,339) (19,864)
Other revenues 36,262 20,446 54,198 39,548
-----------------------------------------------
Total revenues 1,642,606 1,488,776 3,002,873 2,843,425
Benefits and expenses:
Claims and other
policy benefits 1,128,827 980,338 2,248,339 1,883,148
Interest credited 63,000 113,652 136,897 174,718
Policy acquisition
costs and other
insurance expenses 189,272 178,016 205,534 360,997
Other operating expenses 61,997 56,619 125,337 112,041
Interest expense 21,580 23,232 44,674 43,685
Collateral finance
facility expense 6,966 13,206 14,440 25,893
----------------------------------------------
Total benefits and
expenses 1,471,642 1,365,063 2,775,221 2,600,482
----------------------------------------------
Income from continuing
operations before
income taxes 170,964 123,713 227,652 242,943
Provision for income
taxes 60,158 44,676 80,257 86,969
----------------------------------------------
Income from continuing
operations 110,806 79,037 147,395 155,974
Discontinued operations:
Loss from discontinued
accident and health
operations, net of
income taxes (104) (1,562) (5,188) (2,247)
----------------------------------------------
Net income $ 110,702 $ 77,475 $ 142,207 $ 153,727
==============================================
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
----------------------------------------------------------------------------
2008 2007 2008 2007
---- ---- ---- ----
Earnings per share from
continuing operations:
Basic earnings per share $ 1.78 $ 1.28 $ 2.37 $ 2.53
Diluted earnings per share $ 1.73 $ 1.22 $ 2.30 $ 2.43
Diluted earnings per share from
operating income $ 1.71 $ 1.31 $ 2.82 $ 2.60
Earnings per share from net income:
Basic earnings per share $ 1.78 $ 1.25 $ 2.29 $ 2.49
Diluted earnings per share $ 1.73 $ 1.20 $ 2.22 $ 2.39
Weighted average number of
common and common equivalent
shares outstanding 63,982 64,541 64,106 64,219
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
At or For the
Six Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Gross life reinsurance in force (in billions)
U.S. $1,258.6 $1,202.8
Canada $ 230.9 $ 187.6
Europe & South Africa $ 419.4 $ 361.8
Asia Pacific $ 330.6 $ 290.2
Gross life reinsurance written (in billions)
U.S. $ 70.2 $ 84.4
Canada $ 24.6 $ 21.8
Europe & South Africa $ 37.9 $ 30.8
Asia Pacific $ 15.2 $ 6.5
Balance sheet information (in millions,
except share and per share figures)
Consolidated cash and invested assets $17,169.3 $15,911.8
Invested asset book yield - trailing
three months excluding funds withheld 6.07% 5.90%
Investment portfolio mix
Cash and short-term investments 2.39% 3.73%
Fixed maturity securities 56.31% 54.78%
Mortgage loans 4.65% 5.04%
Policy loans 6.11% 6.40%
Funds withheld at interest 28.10% 28.27%
Other invested assets 2.44% 1.78%
Collateral finance facilities $ 850.0 $ 850.3
Short-term debt $ -- $ 30.1
Long-term debt $ 926.1 $ 908.7
Company-obligated mandatorily
redeemable preferred securities
of subsidiary $ 158.9 $ 158.8
Total stockholders' equity $3,061.4 $2,894.6
Less: Accumulated other comprehensive
income "AOCI"* 255.0 374.5
-------- --------
Total stockholders' equity, before
impact of AOCI* $2,806.4 $2,520.1
Treasury shares 812,722 1,135,134
Common shares outstanding 62,315,551 61,993,139
Book value per share outstanding $ 49.13 $ 46.69
Book value per share outstanding, before
impact of AOCI* $ 45.04 $ 40.65
* Book value per share outstanding and total stockholders' equity, before
impact of AOCI, are non-GAAP financial measures that management believes are
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.
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Unaudited) (Dollars in thousands)
Three Months Ended June 30, 2008
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
----------- --------- ----------- -------
Net premiums $ 752,831 $ 1,592 $ -- $754,423
Investment income, net
of related expenses 97,462 80,920 356 178,738
Investment related
losses, net (637) (9,044) (2) (9,683)
Other revenues 552 14,211 4,314 19,077
--------------------------------------------
Total revenues 850,208 87,679 4,668 942,555
Benefits and expenses:
Claims and other
policy benefits 624,310 865 -- 625,175
Interest credited 14,924 47,995 -- 62,919
Policy acquisition costs
and other insurance
expenses 103,231 27,086 250 130,567
Other operating expenses 12,121 1,840 767 14,728
--------------------------------------------
Total benefits
and expenses 754,586 77,786 1,017 833,389
Income before
income taxes $ 95,622 $ 9,893 $ 3,651 $109,166
========== ========== ======== ========
(Unaudited) Three Months Ended June 30, 2007
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
----------- --------- ----------- -------
Net premiums $ 718,753 $ 1,598 $ -- $720,351
Investment income, net
of related expenses 87,151 117,319 99 204,569
Investment related
losses, net (4,497) (8,270) (7) (12,774)
Other revenues 300 9,690 5,846 15,836
--------------------------------------------
Total revenues 801,707 120,337 5,938 927,982
Benefits and expenses:
Claims and other
policy benefits 594,619 (553) -- 594,066
Interest credited 14,579 98,324 -- 112,903
Policy acquisition costs
and other insurance
expenses 101,807 16,750 2,001 120,558
Other operating expenses 11,604 1,705 931 14,240
--------------------------------------------
Total benefits
and expenses 722,609 116,226 2,932 841,767
Income before
income taxes $ 79,098 $ 4,111 $ 3,006 $ 86,215
========== ========= ======== ========
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
U.S. Operations
(Unaudited) (Dollars in thousands)
Six Months Ended June 30, 2008
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
----------- --------- ----------- -------
Net premiums $1,478,224 $ 3,255 $ -- $1,481,479
Investment income, net
of related expenses 194,893 105,951 396 301,240
Investment related
losses, net (3,145) (158,598) (3) (161,746)
Other revenues 612 25,706 7,058 33,376
--------------------------------------------
Total revenues 1,670,584 (23,686) 7,451 1,654,349
Benefits and expenses:
Claims and other
policy benefits 1,276,160 1,050 -- 1,277,210
Interest credited 29,714 106,963 -- 136,677
Policy acquisition costs
and other insurance
expenses 189,281 (104,664) 448 85,065
Other operating expenses 25,359 4,174 1,413 30,946
--------------------------------------------
Total benefits
and expenses 1,520,514 7,523 1,861 1,529,898
Income(loss)before
income taxes $ 150,070 $ (31,209) $ 5,590 $ 124,451
========== ========= ======== ==========
(Unaudited) Six Months Ended June 30, 2007
Asset- Financial Total
Revenues: Traditional Intensive Reinsurance U.S.
----------- --------- ----------- -------
Net premiums $1,388,172 $ 3,224 $ -- $1,391,396
Investment income, net
of related expenses 172,079 185,271 119 357,469
Investment related
losses, net (4,835) (6,215) (7) (11,057)
Other revenues 406 17,114 11,735 29,255
--------------------------------------------
Total revenues 1,555,822 199,394 11,847 1,767,063
Benefits and expenses:
Claims and other
policy benefits 1,137,205 3,970 1 1,141,176
Interest credited 28,849 144,482 -- 173,331
Policy acquisition costs
and other insurance
expenses 201,187 39,043 4,195 244,425
Other operating expenses 23,472 3,326 1,941 28,739
--------------------------------------------
Total benefits
and expenses 1,390,713 190,821 6,137 1,587,671
Income before
income taxes $ 165,109 $ 8,573 $ 5,710 $ 179,392
========== ========= ======== ==========
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Canada Operations
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $ 139,530 $ 122,580
Investment income, net of related expenses 35,692 32,363
Investment related gains, net 4,004 1,648
Other revenues 13,204 93
--------- ---------
Total revenues 192,430 156,684
Benefits and expenses:
Claims and other policy benefits 134,146 105,667
Interest credited 81 185
Policy acquisition costs and other
insurance expenses 25,526 21,343
Other operating expenses 5,899 5,287
--------- ---------
Total benefits and expenses 165,652 132,482
Income before income taxes $ 26,778 $ 24,202
========= =========
Six Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $278,522 $222,072
Investment income, net of related expenses 71,725 58,795
Investment related gains(losses), net (81) 4,432
Other revenues 13,217 179
-------- --------
Total revenues 363,383 285,478
Benefits and expenses:
Claims and other policy benefits 249,417 196,815
Interest credited 220 371
Policy acquisition costs and other
insurance expenses 51,952 39,819
Other operating expenses 11,345 9,237
-------- --------
Total benefits and expenses 312,934 246,242
Income before income taxes $ 50,449 $ 39,236
======== ========
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Europe & South Africa
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $185,490 $164,796
Investment income, net of related expenses 8,778 7,103
Investment related losses, net (131) (630)
Other revenues 68 (27)
-------- ----------
Total revenues 194,205 171,242
Benefits and expenses:
Claims and other policy benefits 144,460 128,828
Interest credited -- 564
Policy acquisition costs and other
insurance expenses 16,026 17,129
Other operating expenses 16,678 12,875
-------- --------
Total benefits and expenses 177,164 159,396
Income before income taxes $ 17,041 $ 11,846
======== ========
Six Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $374,686 $332,592
Investment income, net of related expenses 16,329 12,877
Investment related gains(losses), net 614 (854)
Other revenues 128 104
-------- --------
Total revenues 391,757 344,719
Benefits and expenses:
Claims and other policy benefits 302,995 242,982
Interest credited -- 1,016
Policy acquisition costs and other
insurance expenses 33,256 43,189
Other operating expenses 32,422 24,562
-------- --------
Total benefits and expenses 368,673 311,749
Income before income taxes $ 23,084 $ 32,970
======== ========
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REINSURANCE GROUP OF AMERICA INCORPORATED AND SUBSIDIARIES
Asia Pacific
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $277,716 $198,971
Investment income, net of related expenses 12,397 8,610
Investment related losses, net (1,510) (499)
Other revenues 1,851 2,583
-------- --------
Total revenues 290,454 209,665
Benefits and expenses:
Claims and other policy benefits 225,011 151,664
Policy acquisition costs and other
insurance expenses 28,386 28,173
Other operating expenses 15,801 14,219
-------- --------
Total benefits and expenses 269,198 194,056
Income before income taxes $ 21,256 $ 15,609
======== ========
Six Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $518,651 $385,809
Investment income, net of related expenses 23,811 17,273
Investment related losses, net (996) (570)
Other revenues 4,403 4,410
-------- --------
Total revenues 545,869 406,922
Benefits and expenses:
Claims and other policy benefits 418,680 302,147
Policy acquisition costs and other
insurance expenses 56,467 52,787
Other operating expenses 30,903 26,047
-------- --------
Total benefits and expenses 506,050 380,981
Income before income taxes $ 39,819 $ 25,941
======== ========
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Corporate and Other
(Dollars in thousands)
Three Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $ 1,396 $ 948
Investment income, net of related expenses 19,263 22,257
Investment related gains(losses), net 241 (1,963)
Other revenues 2,062 1,961
-------- --------
Total revenues 22,962 23,203
Benefits and expenses:
Claims and other policy benefits 35 113
Policy acquisition costs and other
insurance expenses (11,233) (9,187)
Other operating expenses 8,891 9,998
Interest expense 21,580 23,232
Collateral finance facility expense 6,966 13,206
-------- --------
Total benefits and expenses 26,239 37,362
Loss before income taxes $ (3,277) $(14,159)
======== ========
Six Months Ended
(Unaudited) June 30,
----------------------------------------------------------------------
2008 2007
---- ----
Revenues:
Net premiums $ 3,282 $ 1,227
Investment income, net of related expenses 41,289 44,231
Investment related losses, net (130) (11,815)
Other revenues 3,074 5,600
-------- --------
Total revenues 47,515 39,243
Benefits and expenses:
Claims and other policy benefits 37 28
Policy acquisition costs and other
insurance expenses (21,206) (19,223)
Other operating expenses 19,721 23,456
Interest expense 44,674 43,685
Collateral finance facility expense 14,440 25,893
-------- --------
Total benefits and expenses 57,666 73,839
Loss before income taxes $(10,151) $(34,596)
======== ========
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