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8-K - FORM 8-K - REINSURANCE GROUP OF AMERICA INC | c60881e8vk.htm |
EX-99.2 - EX-99.2 - REINSURANCE GROUP OF AMERICA INC | c60881exv99w2.htm |
Exhibit 99.1
PRESS RELEASE
REINSURANCE GROUP OF AMERICA REPORTS THIRD-QUARTER RESULTS
| Third-quarter net income and operating* income per diluted share increase to $1.72 | ||
| Premiums up 17 percent to $1.6 billion |
ST. LOUIS, October 25, 2010 Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported third-quarter net income of $128.2 million,
or $1.72 per diluted share, compared to $118.2 million, or $1.61 per diluted share in the prior-year quarter. Operating income* totaled $127.7 million, or $1.72 per diluted share, compared to $114.6 million, or $1.56 per diluted share in the year-ago quarter. Operating income per diluted share increased 10 percent over a solid year-ago quarter.
Quarterly Results | Year-to-Date Results | |||||||||||||||
($ in thousands, except per share data) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Net premiums |
$ | 1,647,300 | $ | 1,405,179 | $ | 4,857,781 | $ | 4,126,407 | ||||||||
Net income |
128,232 | 118,208 | 377,690 | 294,677 | ||||||||||||
Net income per diluted share |
1.72 | 1.61 | 5.06 | 4.03 | ||||||||||||
Operating income* |
127,703 | 114,571 | 342,610 | 312,488 | ||||||||||||
Operating income per diluted share* |
1.72 | 1.56 | 4.59 | 4.28 | ||||||||||||
Book value per share |
68.30 | 51.83 | ||||||||||||||
Book value per share (excl.
Accumulated Other Comprehensive
Income AOCI)* |
53.82 | 47.47 | ||||||||||||||
Total assets |
28,934,028 | 24,162,113 |
* | See Use of Non-GAAP Financial Measures below |
Year-to-date net income increased to $377.7 million, or $5.06 per diluted share, from $294.7
million, or $4.03 per diluted share, in the year-ago period. Operating income* totaled $342.6
million, or $4.59 per diluted share, compared with $312.5 million, or $4.28 per diluted share, the
year before. Foreign currency fluctuations benefited year-to-date operating income per diluted
share by $0.14. Net premiums increased $731.4 million, or 18 percent, and net investment income
rose $76.1 million, or 9 percent, compared to the first nine months of 2009. Net premiums for the
group reinsurance business acquired at the beginning of the year totaled $227.6 million.
For the quarter, consolidated net premiums were up 17 percent, to $1,647.3 million, including $80.6
million from the group reinsurance business. Holding foreign exchange rates constant, premiums
rose 16 percent. Investment income decreased 4 percent to $287.5 million from $299.5 million in
the year-earlier quarter, with average investment yields of 5.66 percent and 5.71 percent,
respectively. Excluding the change in valuation of option contracts supporting equity-indexed
annuities, investment income increased $43.1 million, or 16 percent, to $313.3 million. Stronger
foreign currencies contributed approximately $1.2 million after taxes, or $0.02 per share, to
operating results when compared to 2009.
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Congress has not passed an extension of the existing active financing exception legislation this
year, so the company increased its tax provision by $5.0 million during the quarter, an adverse
effect of $0.07 and $0.20 per diluted share for the third quarter and first nine months,
respectively.
A. Greig Woodring, president and chief executive officer, commented, We are pleased with our
third-quarter operating results. Our overall claims experience approximated our expectations.
In addition, consolidated premiums continued to grow in line with expectations and our book value
continued to benefit from consistent earnings contributions and a strengthening investment
portfolio. Impairments for the quarter were not significant. Our net unrealized gain position
increased by $362.4 million and our book value improved by $555.1 million, or 12 percent, ending
the quarter at $68.30 per share.
Our annualized operating return on equity was 13 percent for the quarter. We continue to evaluate
business opportunities and believe we are well-positioned to serve our clients needs across the
globe. We remain confident in the longer-term performance expectations of our business.
SEGMENT RESULTS
U.S.
The U.S. Traditional sub-segment reported pre-tax income of $114.1 million for the quarter compared
with $63.8 million in the prior year. Pre-tax operating income increased to $101.1 million from
$84.7 million the year before, when higher-than-expected mortality experience adversely affected
results. Current-quarter mortality experience was generally in line with expectations. The
segments group business contributed to the increase over the prior-year period. Net premiums were
up 16 percent, to $930.1 million from $801.4 million in the prior-year quarter, with the U.S. group
reinsurance business accounting for $77.1 million. Excluding the effect of the group reinsurance
business, premiums were up 6 percent.
The U.S. Asset Intensive business reported a pre-tax loss of $6.6 million, primarily related to
changes in the value of embedded derivatives on funds withheld treaties. A pre-tax gain of $37.9
million was posted in the year-ago quarter. On an operating basis, the business contributed
pre-tax operating income of $14.0 million versus a very strong $19.7 million a year ago.
Canada
Canadian operations reported pre-tax net income of $33.5 million, compared to $18.8 million in the
third quarter of 2009. Pre-tax operating income increased 28 percent to $28.0 million from last
years $21.8 million, reflecting favorable mortality in the current quarter. Foreign currency
fluctuations benefited pre-tax operating income by approximately $0.3 million. On a Canadian
dollar basis, net premiums increased 27 percent. On a U.S. dollar basis, net premiums were up
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$52.2 million, or 34 percent, to $205.6 million from $153.4 million last year. The increase in net
premiums primarily reflected a new longevity transaction, which contributed $55.2 million,
including a one-time up-front premium of $43.3 million.
Asia Pacific
Asia Pacific reported strong pre-tax net income of $28.5 million compared with a slightly better
prior-year result of $30.9 million. Pre-tax operating income totaled $27.4 million compared with
$28.0 million a year ago, reflecting favorable claims experience in both periods. Favorable
foreign currency exchange of $1.0 million helped the current-quarter pre-tax operating result. Net
premiums increased to $273.8 million from $242.4 million in the prior year, with strong production
in Australia, Japan and Taiwan. Net premiums, when compared to the prior-year quarter, benefited
by approximately $17.7 million due to foreign currency fluctuations.
Europe & South Africa
Europe & South Africas third-quarter pre-tax net income increased to $17.5 million from $7.0
million in the year-ago quarter. Pre-tax operating income was $15.7 million compared with $6.7
million last year. Net premiums increased to $233.0 million from $204.2 million in the prior-year
quarter. Strong UK results were primarily responsible for the segments increases in pre-tax
operating income and net premiums. Foreign currency exchange rates had adverse effects totaling
$12.5 million and $1.2 million on net premiums and pre-tax operating income, respectively.
Corporate and Other
As indicated earlier, the companys third-quarter effective tax rate included a $5.0 million
provision related to the expiration of active financing exception tax rules. It is possible that
Congress will pass an extender package later this year, at which point the cumulative additional
tax provision of $14.9 million would be reversed. Interest expense totaled $25.2 million this
quarter compared with $5.2 million in the prior-year quarter. The increase is primarily due to a
reversal of interest expense in the prior-year period associated with the settlement of an
uncertain tax position in a previous tax year. There was no such settlement in the current
quarter, but the company expects a similar reversal in a future period when the next tax year is
settled.
Dividend Declaration
The companys board of directors declared a regular quarterly dividend of $0.12, payable November
26 to shareholders of record as of November 5.
Earnings Conference Call
A conference call to discuss the companys third-quarter results will begin at 9 a.m. Eastern Time
on Tuesday, October 26. Interested parties may access the call by dialing 877-723-9523 (domestic)
or 719-325-4904 (international). The access code is 8045459. A live audio webcast
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of the conference call will be available on the companys 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 November 3 at
888-203-1112 (domestic) or 719-457-0820 (international), access code 8045459.
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 RGAs
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 companys
continuing operations, primarily because that measure excludes the effect of net investment related
gains and losses, as well as changes in the fair value of certain embedded derivatives and related
deferred acquisition costs. These items can be volatile, primarily due to the credit market and
interest rate environment and are not necessarily indicative of the performance of the companys
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 companys ongoing operations. The definition of operating
income can vary by company and is not considered a substitute for GAAP net income. Reconciliations
to GAAP net income are provided in the following tables. Additional financial information can be
found in the Quarterly Financial Supplement on RGAs 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 subsidiary companies or offices in Australia, Barbados, Bermuda, Canada, China,
France, Germany, Hong Kong, India, Ireland, Italy, Japan, Mexico, the Netherlands, Poland, South
Africa, South Korea, Spain, Taiwan, the United Kingdom and the United States. Worldwide, the
company has approximately $2.5 trillion of life reinsurance in force, and assets of $28.9 billion.
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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 our liquidity, access to capital, and cost
of capital, (2) the impairment of other financial institutions and its effect on our business, (3)
requirements to post collateral or make payments due to declines in market value of assets subject
to our collateral arrangements, (4) the fact that the determination of allowances and impairments
taken on our investments is highly subjective, (5) adverse changes in mortality, morbidity,
lapsation, or claims experience, (6) changes in our financial strength and credit ratings and the
effect of such changes on our 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 our 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 our investment securities or result in the
impairment of all or a portion of the value of certain of our investment securities, (11) market or
economic conditions that adversely affect our ability to make timely sales of investment
securities, (12) risks inherent in our 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 we
operate, (17) competitive factors and competitors responses to our initiatives, (18) the success
of our clients, (19) successful execution of our entry into new markets, (20) successful
development and introduction of new products and distribution opportunities, (21) our ability to
successfully integrate and operate reinsurance business that we acquire, (22) regulatory action
that may be taken by state Departments of Insurance with respect to us, (23) our dependence on
third parties, including those insurance companies and reinsurers to which we cede 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 we or our
clients do business, (25) changes in laws, regulations, and accounting
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standards applicable to us, our subsidiaries, or our business, (26) 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 (27) 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. 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 2009 Form 10-K.
Investor Contact
Jack B. Lay
Senior Executive Vice President and Chief Financial Officer
(636) 736-7000
Senior Executive Vice President and Chief Financial Officer
(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)
Reconciliation of Consolidated Net Income to Operating Income
(Dollars in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(Unaudited) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
GAAP net income |
$ | 128,232 | $ | 118,208 | $ | 377,690 | $ | 294,677 | ||||||||
Reconciliation to operating income: |
||||||||||||||||
Capital (gains) losses, derivatives and other,
included in investment related (gains) losses,
net |
(25,041 | ) | 13,170 | (110,127 | ) | 153,378 | ||||||||||
Capital (gains) losses on funds withheld: |
||||||||||||||||
Included in investment income |
(4,221 | ) | | (7,920 | ) | | ||||||||||
Included in policy acquisition costs and
other insurance expenses |
621 | | 1,073 | | ||||||||||||
Embedded derivatives: |
||||||||||||||||
Included in investment related (gains)
losses, net |
35,676 | (40,027 | ) | 21,776 | (183,263 | ) | ||||||||||
Included in interest credited |
27,996 | (3,412 | ) | 23,165 | (16,994 | ) | ||||||||||
Included in policy acquisition costs and
other insurance expenses |
(2,723 | ) | 124 | (1,587 | ) | 2,108 | ||||||||||
DAC offset, net |
(32,837 | ) | 26,508 | 38,540 | 87,851 | |||||||||||
Gain on debt repurchase |
| | | (25,269 | ) | |||||||||||
Operating income |
$ | 127,703 | $ | 114,571 | $ | 342,610 | $ | 312,488 | ||||||||
Reconciliation of Consolidated Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
(Dollars in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(Unaudited) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Income before income taxes |
$ | 197,173 | $ | 182,551 | $ | 588,560 | $ | 432,180 | ||||||||
Reconciliation to pre-tax operating income: |
||||||||||||||||
Capital (gains) losses, derivatives and other,
included in investment related (gains) losses, net |
(37,747 | ) | 20,616 | (168,073 | ) | 237,722 | ||||||||||
Capital (gains) losses on funds withheld: |
||||||||||||||||
Included in investment income |
(6,494 | ) | | (12,184 | ) | | ||||||||||
Included in policy acquisition costs and
other insurance expenses |
954 | | 1,650 | | ||||||||||||
Embedded derivatives: |
||||||||||||||||
Included in investment related (gains)
losses, net |
54,885 | (61,581 | ) | 33,501 | (281,943 | ) | ||||||||||
Included in interest credited |
43,070 | (5,248 | ) | 35,638 | (26,144 | ) | ||||||||||
Included in policy acquisition costs and
other insurance expenses |
(4,189 | ) | 191 | (2,442 | ) | 3,243 | ||||||||||
DAC offset, net |
(50,519 | ) | 40,780 | 59,291 | 135,155 | |||||||||||
Gain on debt repurchase |
| | | (38,875 | ) | |||||||||||
Pre-tax operating income |
$ | 197,133 | $ | 177,309 | $ | 535,941 | $ | 461,338 | ||||||||
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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)
Reconciliation of Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
Three Months Ended September 30, 2010 | ||||||||||||||||
Capital | Change in | |||||||||||||||
Pre-tax net | (gains) losses, | value of | Pre-tax | |||||||||||||
income | derivatives | embedded | operating | |||||||||||||
(Unaudited) | (loss) | and other, net | derivatives, net | income | ||||||||||||
U.S. Operations: |
||||||||||||||||
Traditional |
$ | 114,075 | $ | (13,009 | ) | $ | | $ | 101,066 | |||||||
Asset Intensive |
(6,606 | ) | (19,935 | )(1) | 40,530 | (2) | 13,989 | |||||||||
Financial Reinsurance |
4,317 | 44 | | 4,361 | ||||||||||||
Total U.S. |
111,786 | (32,900 | ) | 40,530 | 119,416 | |||||||||||
Canada Operations |
33,468 | (5,431 | ) | | 28,037 | |||||||||||
Europe & South Africa |
17,494 | (1,808 | ) | | 15,686 | |||||||||||
Asia Pacific Operations |
28,483 | (1,094 | ) | | 27,389 | |||||||||||
Corporate and Other |
5,942 | 663 | | 6,605 | ||||||||||||
Consolidated |
$ | 197,173 | $ | (40,570 | ) | $ | 40,530 | $ | 197,133 | |||||||
(1) | Asset Intensive is net of $2,717 DAC offset. | |
(2) | Asset Intensive is net of $(53,236) DAC offset. |
Three Months Ended June 30, 2009 | ||||||||||||||||
Capital | Change in | |||||||||||||||
(gains) losses, | value of | Pre-tax | ||||||||||||||
Pre-tax net | derivatives | embedded | operating | |||||||||||||
(Unaudited) | income | and other, net | derivatives, net | income | ||||||||||||
U.S. Operations: |
||||||||||||||||
Traditional |
$ | 63,783 | $ | 20,880 | $ | | $ | 84,663 | ||||||||
Asset Intensive |
37,874 | 624 | (1) | (18,768 | )(2) | 19,730 | ||||||||||
Financial Reinsurance |
2,749 | (2 | ) | | 2,747 | |||||||||||
Total U.S. |
104,406 | 21,502 | (18,768 | ) | 107,140 | |||||||||||
Canada Operations |
18,847 | 2,975 | | 21,822 | ||||||||||||
Europe & South Africa |
6,981 | (268 | ) | | 6,713 | |||||||||||
Asia Pacific Operations |
30,925 | (2,954 | ) | | 27,971 | |||||||||||
Corporate and Other |
21,392 | (7,729 | ) | | 13,663 | |||||||||||
Consolidated |
$ | 182,551 | $ | 13,526 | $ | (18,768 | ) | $ | 177,309 | |||||||
(1) | Asset Intensive is net of $(7,090) DAC offset. | |
(2) | Asset Intensive is net of $47,870 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)
Reconciliation of Pre-tax Net Income to Pre-tax Operating Income
(Dollars in thousands)
Nine Months Ended September 30, 2010 | ||||||||||||||||
Capital | Change in | |||||||||||||||
(gains) losses, | value of | Pre-tax | ||||||||||||||
Pre-tax net | derivatives | embedded | operating | |||||||||||||
(Unaudited) | income | and other, net | derivatives, net | income | ||||||||||||
U.S. Operations: |
||||||||||||||||
Traditional |
$ | 276,714 | $ | (18,578 | ) | $ | | $ | 258,136 | |||||||
Asset Intensive |
75,517 | (48,184 | )(1) | 18,972 | (2) | 46,305 | ||||||||||
Financial
Reinsurance |
11,902 | 63 | | 11,965 | ||||||||||||
Total U.S. |
364,133 | (66,699 | ) | 18,972 | 316,406 | |||||||||||
Canada Operations |
86,189 | (9,201 | ) | | 76,988 | |||||||||||
Europe & South Africa |
50,477 | (3,614 | ) | | 46,863 | |||||||||||
Asia Pacific Operations |
78,689 | (3,051 | ) | | 75,638 | |||||||||||
Corporate and Other |
9,072 | 10,974 | | 20,046 | ||||||||||||
Consolidated |
$ | 588,560 | $ | (71,591 | ) | $ | 18,972 | $ | 535,941 | |||||||
(1) | Asset Intensive is net of $107,016 DAC offset. | |
(2) | Asset Intensive is net of $(47,725) DAC offset. |
Nine Months Ended September 30, 2009 | ||||||||||||||||||||
Capital | Change in | |||||||||||||||||||
(gains) losses, | value of | Gain on | Pre-tax | |||||||||||||||||
Pre-tax net | derivatives | embedded | debt | operating | ||||||||||||||||
(Unaudited) | income | and other, net | derivatives, net | repurchase | income | |||||||||||||||
U.S. Operations: |
||||||||||||||||||||
Traditional |
$ | 181,420 | $ | 76,042 | $ | | $ | | $ | 257,462 | ||||||||||
Asset Intensive |
30,797 | (24,982 | )(1) | 26,159 | (2) | | 31,974 | |||||||||||||
Financial
Reinsurance |
11,264 | (72 | ) | | | 11,192 | ||||||||||||||
Total U.S. |
223,481 | 50,988 | 26,159 | | 300,628 | |||||||||||||||
Canada Operations |
60,547 | (3,405 | ) | | | 57,142 | ||||||||||||||
Europe & South Africa |
27,879 | (676 | ) | | | 27,203 | ||||||||||||||
Asia Pacific Operations |
60,018 | (242 | ) | | | 59,776 | ||||||||||||||
Corporate and Other |
60,255 | (4,791 | ) | | (38,875 | ) | 16,589 | |||||||||||||
Consolidated |
$ | 432,180 | $ | 41,874 | $ | 26,159 | $ | (38,875 | ) | $ | 461,338 | |||||||||
(1) | Asset Intensive is net of $(195,848) DAC offset. | |
(2) | Asset Intensive is net of $331,003 DAC offset. |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Per Share and Shares Data
(In thousands, except per share data)
Per Share and Shares Data
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(Unaudited) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Diluted earnings per share from
operating income |
$ | 1.72 | $ | 1.56 | $ | 4.59 | $ | 4.28 | ||||||||
Earnings per share from net income: |
||||||||||||||||
Basic earnings per share |
$ | 1.75 | $ | 1.62 | $ | 5.17 | $ | 4.05 | ||||||||
Diluted earnings per share |
$ | 1.72 | $ | 1.61 | $ | 5.06 | $ | 4.03 | ||||||||
Weighted average number of common
and common equivalent shares
outstanding |
74,420 | 73,286 | 74,574 | 73,037 |
At or for the Nine Months | ||||||||
Ended September 30, | ||||||||
(Unaudited) | 2010 | 2009 | ||||||
Treasury shares |
192 | 573 | ||||||
Common shares outstanding |
73,172 | 72,790 | ||||||
Book value per share outstanding |
$ | 68.30 | $ | 51.83 | ||||
Book value per share outstanding,
before impact of AOCI |
$ | 53.82 | $ | 47.47 |
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Dollars in thousands)
Condensed Consolidated Statements of Income
(Dollars in thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(Unaudited) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Revenues: |
||||||||||||||||
Net premiums |
$ | 1,647,300 | $ | 1,405,179 | $ | 4,857,781 | $ | 4,126,407 | ||||||||
Investment income, net of related
expenses |
287,504 | 299,471 | 883,433 | 807,303 | ||||||||||||
Investment related gains (losses),
net: |
||||||||||||||||
Other-than-temporary
impairments on fixed
maturity securities |
(4,904 | ) | (16,945 | ) | (15,823 | ) | (88,282 | ) | ||||||||
Other-than-temporary
impairments on fixed
maturity securities
transferred to (from)
accumulated other
comprehensive income |
26 | (4,000 | ) | 2,231 | 12,135 | |||||||||||
Other investment related gains
(losses), net |
(11,902 | ) | 63,304 | 150,989 | 124,432 | |||||||||||
Total investment related
gains (losses), net |
(16,780 | ) | 42,359 | 137,397 | 48,285 | |||||||||||
Other revenue |
37,515 | 31,972 | 108,990 | 140,992 | ||||||||||||
Total revenues |
1,955,539 | 1,778,981 | 5,987,601 | 5,122,987 | ||||||||||||
Benefits and expenses: |
||||||||||||||||
Claims and other policy benefits |
1,393,891 | 1,155,811 | 4,076,310 | 3,449,251 | ||||||||||||
Interest credited |
94,776 | 85,153 | 230,879 | 194,959 | ||||||||||||
Policy acquisition costs and other
insurance expenses |
157,058 | 271,789 | 760,509 | 778,993 | ||||||||||||
Other operating expenses |
85,409 | 76,403 | 259,755 | 214,247 | ||||||||||||
Interest expense |
25,191 | 5,243 | 65,781 | 46,955 | ||||||||||||
Collateral finance facility expense |
2,041 | 2,031 | 5,807 | 6,402 | ||||||||||||
Total benefits and expenses |
1,758,366 | 1,596,430 | 5,399,041 | 4,690,807 | ||||||||||||
Income before income taxes |
197,173 | 182,551 | 588,560 | 432,180 | ||||||||||||
Income tax expense |
68,941 | 64,343 | 210,870 | 137,503 | ||||||||||||
Net income |
$ | 128,232 | $ | 118,208 | $ | 377,690 | $ | 294,677 | ||||||||
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