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Reinsurance Group of America Reports Third-Quarter Results
  • Earnings per diluted share: $3.07 from net income, $2.46 from operating income*
  • ROE 10 percent and Operating ROE* 12 percent for the trailing twelve months
  • Reported net premiums increased 8 percent

ST. LOUIS--(BUSINESS WIRE)--Oct. 26, 2016-- Reinsurance Group of America, Incorporated (NYSE: RGA), a leading global provider of life reinsurance, reported net income of $198.7 million, or $3.07 per diluted share, compared with $83.5 million, or $1.25 per diluted share, in the prior-year quarter. Operating income* totaled $159.4 million, or $2.46 per diluted share, compared to $127.1 million, or $1.90 per diluted share, the year before. Net foreign currency fluctuations had an adverse effect of $0.04 per diluted share on net income, and $0.03 per diluted share on operating income, primarily within the EMEA segment. Tax-related adjustments added $0.08 per share to the quarter.

      Quarterly Results     Year-to-Date Results
($ in thousands, except per share data) 2016     2015 2016     2015
Net premiums $ 2,251,758 $ 2,089,345 $ 6,755,708 $ 6,242,240
Net income 198,719 83,534 511,294 339,039
Net income per diluted share 3.07 1.25 7.87 5.01
Operating income* 159,361 127,086 461,339 379,134
Operating income per diluted share* 2.46 1.90 7.10 5.60
Book value per share 124.50 94.92
Book value per share, excluding Accumulated Other Comprehensive Income (AOCI)* 90.04 81.14
Total assets 54,832,498 47,581,959
 

* See ‘Use of Non-GAAP Financial Measures’ below

 

Consolidated net premiums totaled $2.3 billion this quarter, up 8 percent from last year’s third quarter. Current-period premiums reflected net adverse foreign currency effects of approximately $21.0 million. Excluding spread-based businesses and the value of associated derivatives, investment income rose 10 percent over year-ago levels, attributable to an increase in average invested assets of approximately 15 percent, offset in part by the impact of lower yield on new money and reinvested assets. The average investment yield, excluding spread businesses, was down 23 basis points to 4.43 percent from the third quarter of 2015, and 28 basis points lower than the second-quarter yield.

The effective tax rate was approximately 31 percent on both net income and operating income this quarter, below an expected range of 34 percent to 35 percent, largely due to the effective settlement of uncertain tax positions during the quarter that totaled $5.0 million, or $0.08 per share.

Greig Woodring, chief executive officer, commented, “This was another good quarter, and we are pleased that we have been able to continue delivering strong bottom-line results and solid overall momentum, despite ongoing macroeconomic uncertainties. It was another quarter in which diversified earnings sources, inherent in our global operating model, were key to a positive result.

“Highlights of the quarter included continued strong results from our Traditional business in Asia and Global Financial Solutions lines in the U.S. and EMEA. These areas more than offset normal claims volatility in our U.S. Individual Mortality business and seasonal weakness in Australia. Overall top-line premium growth was fairly vibrant again at 8 percent, or 9 percent in constant currencies, based upon solid organic growth and in-force transactions.

“We were less active in the quarter in terms of our share repurchases, buying back 4,700 shares as we continue to position ourselves to pursue a balanced approach to capital management over time. We closed some smaller in-force transactions during the quarter, and there continues to be an active pipeline of opportunities. Our deployable excess capital position was approximately $1.0 billion at September 30, and our ending book value per share this quarter was $124.50 including AOCI. Excluding AOCI, book value per share was $90.04, an 11 percent increase over that of a year ago.

“Looking forward, we continue to see good demand from clients for our risk mitigation solutions, and we expect to continue to execute well in both our traditional and transactional businesses.”

SEGMENT RESULTS

U.S. and Latin America

Traditional

The U.S. and Latin America Traditional segment reported pre-tax net income of $77.1 million, compared with $55.7 million in the third quarter of 2015. Pre-tax operating income totaled $80.5 million for the quarter, compared with $54.7 million in last year’s third quarter. Results for the current quarter reflect moderately unfavorable claims experience in the Individual Mortality business, offset in part by favorable experience in the Group and Individual Health business lines. Results in the year-ago quarter reflected unusually poor individual mortality experience.

Traditional net premiums increased a healthy 11 percent from last year’s third quarter to $1,277.5 million.

Non-Traditional

The Asset-Intensive business reported pre-tax net income of $88.7 million compared with $24.2 million last year. Third-quarter pre-tax operating income totaled $58.7 million compared with $55.2 million last year. Both periods’ operating income was strong due to favorable investment spreads, and the addition of new blocks.

The Financial Reinsurance business reported pre-tax net income and pre-tax operating income of $14.0 million, up from $12.1 million the year before, due to new business added in 2016.

Canada

Traditional

The Canada Traditional segment reported pre-tax net income of $34.3 million compared with $34.1 million the year before. Pre-tax operating income totaled $30.6 million compared with $37.8 million in the third quarter of 2015. Current-quarter results were in line with expectations, whereas last year’s quarter had better-than-expected claims experience.

Reported net premiums increased 16 percent to $231.2 million, attributable to strong growth in the creditor business and solid growth in individual mortality.

Non-Traditional

The Canada Non-Traditional business segment, which consists of longevity and fee-based transactions, reported pre-tax net income and pre-tax operating income declined to $1.2 million from $3.3 million a year ago, reflecting less-favorable longevity experience.

Europe, Middle East and Africa (EMEA)

Traditional

The EMEA Traditional segment reported pre-tax net income of $8.5 million versus $15.9 million in last year’s third quarter. Pre-tax operating income totaled $8.5 million, down from $15.6 million in the prior-year period. Current-period results included unfavorable claims experience in the U.K., while last year’s third quarter had favorable overall claims experience.

Reported net premiums decreased slightly to $275.5 million from $276.1 million in the prior-year period. Foreign currency exchange rates adversely affected net premiums by $32.6 million.

Non-Traditional

The EMEA Non-Traditional business segment includes longevity, asset-intensive and fee-based transactions. Pre-tax net income totaled $43.8 million compared with $29.2 million in the year-ago period. Pre-tax operating income increased to $33.9 million compared with $28.8 million the year before. Current-period results reflected continued favorable experience in both the asset-intensive and longevity businesses. Net foreign currency fluctuations adversely affected pre-tax net income by $6.2 million and pre-tax operating income by $4.7 million.

Asia Pacific

Traditional

The Asia Pacific Traditional segment reported pre-tax net income of $19.8 million, up from $11.3 million in the prior-year period. Pre-tax operating income totaled $19.8 million compared with $13.0 million a year ago. Underwriting experience was favorable across Asia with particularly strong results in Hong Kong, but was somewhat offset by seasonally high claims in Australia.

Reported net premiums rose modestly to $404.5 million from $400.3 million in the prior-year period, reflecting large offsetting variances in Australia and Asia. Australia premiums were down 20 percent, or 24 percent on a constant currency basis, due to the non-renewal of certain treaties and various premium refunds. Asia premiums were up 17 percent, or 11 percent in constant currency, reflecting healthy growth across the region.

Non-Traditional

The Asia Pacific Non-Traditional business segment includes asset-intensive, fee-based and other various transactions. Pre-tax net income totaled $7.5 million compared with pre-tax income of $5.4 million last year. Pre-tax operating income decreased to $2.3 million from $6.3 million in the prior-year quarter, primarily due to unfavorable results on one treaty that is running off. Net foreign currency exchange rate fluctuations had a favorable effect of $0.9 million on pre-tax net income and $0.5 million on pre-tax operating income.

Corporate and Other

The Corporate and Other segment’s pre-tax net losses totaled $7.3 million compared with a pre-tax net loss of $50.9 million the year before. Pre-tax operating losses were $19.0 million, versus the year-ago pre-tax loss of $19.7 million, in line with expectations.

Dividend Declaration

The board of directors declared a regular quarterly dividend of $0.41, payable November 29 to shareholders of record as of November 8.

Earnings Conference Call

A conference call to discuss third-quarter results will begin at 11 a.m. Eastern Time on Thursday, October 27. Interested parties may access the call by dialing 877-879-6174 (domestic) or 719-325-4849 (international). The access code is 1763380. 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 also will be available through Friday, November 4, at 888-203-1112 (domestic) or 719-457-0820 (international), access code 1763380.

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.

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 excluding the 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 income per diluted share is a non-GAAP financial measure calculated as operating income divided by weighted average diluted shares outstanding. 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, Brazil, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Singapore, South Africa, South Korea, Spain, Taiwan, the United Arab Emirates, the United Kingdom and the United States. Worldwide, RGA has assumed approximately $3.1 trillion of life reinsurance in force, and total assets of $54.8 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, ratios, future financial performance and growth potential of Reinsurance Group of America, Incorporated and its subsidiaries (which we refer to in the previous 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 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 acquired blocks of business and entities, (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 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 see Item 1A - “Risk Factors” in the 2015 Annual Report, as updated by Part II, Item 1A - “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2016.

       
 
 
 

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Consolidated Net Income to Operating Income

(Dollars in thousands)

 
(Unaudited) Three Months Ended
September 30,
Nine Months Ended
September 30,
2016     2015 2016     2015
Net income $ 198,719 $ 83,534 $ 511,294 $ 339,039
Reconciliation to operating income:
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net (19,745 ) (22,750 ) (87,962 ) (10,183 )
Capital (gains) losses on funds withheld, included in investment income, net of related expenses (2,159 ) (1,438 ) (12,975 ) (10,801 )
Embedded derivatives:
Included in investment related (gains) losses, net (37,093 ) 92,002 32,041 91,793
Included in interest credited 28 (7,147 ) 7,688 (7,261 )
DAC offset, net 20,719 (16,865 ) 12,830 (23,454 )
Investment income on unit-linked variable annuities (3,601 ) (5,794 )
Interest credited on unit-linked variable annuities 3,601 5,794
Non-investment derivatives (1,108 ) (250 ) (1,577 ) 1  
Operating income $ 159,361   $ 127,086   $ 461,339   $ 379,134  
 
       

Reconciliation of Consolidated Income before Income Taxes to Pre-tax Operating Income

(Dollars in thousands)

 
(Unaudited) Three Months Ended
September 30,
Nine Months Ended
September 30,
2016     2015 2016     2015
Income before income taxes $ 287,600 $ 140,137 $ 748,403 $ 538,052
Reconciliation to pre-tax operating income:
Capital (gains) losses, derivatives and other, included in investment related (gains) losses, net (26,958 ) (35,028 ) (126,026 ) (14,448 )
Capital (gains) losses on funds withheld, included in investment income, net of related expenses (3,322 ) (2,212 ) (19,962 ) (16,616 )
Embedded derivatives:
Included in investment related (gains) losses, net (57,066 ) 141,542 49,294 141,220
Included in interest credited 42 (10,995 ) 11,827 (11,170 )
DAC offset, net 31,876 (25,945 ) 19,739 (36,083 )
Investment income on unit-linked variable annuities (5,540 ) (8,914 )
Interest credited on unit-linked variable annuities 5,540 8,914
Non-investment derivatives (1,705 ) (383 ) (2,426 ) 2  
Pre-tax operating income $ 230,467   $ 207,116   $ 680,849   $ 600,957  
 
   

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Pre-tax Net Income to Pre-tax Operating Income

(Dollars in thousands)

 
(Unaudited) Three Months Ended September 30, 2016

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:
Traditional $ 77,081 $ (69 ) $ 3,463 $ 80,475
Non-Traditional:
Asset Intensive 88,732 (8,281 ) (1) (21,758 ) (2) 58,693
Financial Reinsurance 13,982       13,982  
Total U.S. and Latin America 179,795 (8,350 ) (18,295 ) 153,150
Canada Traditional 34,275 (3,651 ) 30,624
Canada Non-Traditional 1,160       1,160  
Total Canada 35,435 (3,651 ) 31,784
EMEA Traditional 8,515 8,515
EMEA Non-Traditional 43,786   (9,841 )   33,945  
Total EMEA 52,301 (9,841 ) 42,460
Asia Pacific Traditional 19,822 19,822
Asia Pacific Non-Traditional 7,549   (5,283 )   2,266  
Total Asia Pacific 27,371 (5,283 ) 22,088
Corporate and Other (7,302 ) (11,713 )   (19,015 )
Consolidated $ 287,600   $ (38,838 ) $ (18,295 ) $ 230,467  
 

(1)  Asset Intensive is net of $(6,853) DAC offset.

(2)  Asset Intensive is net of $38,729 DAC offset.

 
   
(Unaudited) Three Months Ended September 30, 2015

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:
Traditional $ 55,652 $ (1 ) $ (925 ) $ 54,726
Non-Traditional:
Asset Intensive 24,182 (164,382 ) (1) 195,430 (2) 55,230
Financial Reinsurance 12,073       12,073  
Total U.S. and Latin America 91,907 (164,383 ) 194,505 122,029
Canada Traditional 34,072 3,721 37,793
Canada Non-Traditional 3,257       3,257  
Total Canada 37,329 3,721 41,050
EMEA Traditional 15,910 (289 ) 15,621
EMEA Non-Traditional 29,234   (396 )   28,838  
Total EMEA 45,144 (685 ) 44,459
Asia Pacific Traditional 11,276 1,706 12,982
Asia Pacific Non-Traditional 5,412   881     6,293  
Total Asia Pacific 16,688 2,587 19,275
Corporate and Other (50,931 ) 31,234     (19,697 )
Consolidated $ 140,137   $ (127,526 ) $ 194,505   $ 207,116  
 

(1)  Asset Intensive is net of $(89,903) DAC offset.

(2)  Asset Intensive is net of $63,958 DAC offset.

 
   

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Reconciliation of Pre-tax Net Income to Pre-tax Operating Income

(Dollars in thousands)

 
(Unaudited) Nine Months Ended September 30, 2016

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:
Traditional $ 239,609 $ (3 ) $ 6,379 $ 245,985
Non-Traditional:
Asset Intensive 151,881 (88,640 ) (1) 95,043 (2) 158,284
Financial Reinsurance 44,791       44,791  
Total U.S. and Latin America 436,281 (88,643 ) 101,422 449,060
Canada Traditional 97,679 (6,784 ) 90,895
Canada Non-Traditional 3,880       3,880  
Total Canada 101,559 (6,784 ) 94,775
EMEA Traditional 14,233 (5 ) 14,228
EMEA Non-Traditional 96,679   (10,995 )   85,684  
Total EMEA 110,912 (11,000 ) 99,912
Asia Pacific Traditional 95,464 (16 ) 95,448
Asia Pacific Non-Traditional 16,029   (12,319 )   3,710  
Total Asia Pacific 111,493 (12,335 ) 99,158
Corporate and Other (11,842 ) (50,214 )   (62,056 )
Consolidated $ 748,403   $ (168,976 ) $ 101,422   $ 680,849  
 

(1)  Asset Intensive is net of $(20,562) DAC offset.

(2)  Asset Intensive is net of $40,301 DAC offset.

 
(Unaudited)     Nine Months Ended September 30, 2015

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:
Traditional $ 156,288 $ (2 ) $ (1,811 ) $ 154,475
Non-Traditional:
Asset Intensive 122,072 (162,035 ) (1) 191,929 (2) 151,966
Financial Reinsurance 39,081       39,081  
Total U.S. and Latin America 317,441 (162,037 ) 190,118 345,522
Canada Traditional 79,535 (810 ) 78,725
Canada Non-Traditional 10,482       10,482  
Total Canada 90,017 (810 ) 89,207
EMEA Traditional 35,551 (338 ) 35,213
EMEA Non-Traditional 80,300   (993 )   79,307  
Total EMEA 115,851 (1,331 ) 114,520
Asia Pacific Traditional 68,239 1,706 69,945
Asia Pacific Non-Traditional 14,152   2,916     17,068  
Total Asia Pacific 82,391 4,622 87,013
Corporate and Other (67,648 ) 32,343     (35,305 )
Consolidated $ 538,052   $ (127,213 ) $ 190,118   $ 600,957  
 

(1)  Asset Intensive is net of $(96,151) DAC offset.

(2)  Asset Intensive is net of $60,068 DAC offset.

 
       

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Per Share and Shares Data

(In thousands, except per share data)

 
(Unaudited) Three Months Ended
September 30,
Nine Months Ended
September 30,
2016     2015 2016     2015
Earnings per share from net income:
Basic earnings per share $ 3.10 $ 1.26 $ 7.95 $ 5.07
Diluted earnings per share $ 3.07 $ 1.25 $ 7.87 $ 5.01
 
Diluted earnings per share from operating income $ 2.46 $ 1.90 $ 7.10 $ 5.60
Weighted average number of common and common equivalent shares outstanding 64,815 66,882 64,944 67,644
 
 
(Unaudited) At September 30,
2016 2015
Treasury shares 14,932 13,389
Common shares outstanding 64,206 65,749
Book value per share outstanding $ 124.50 $ 94.92
Book value per share outstanding, before impact of AOCI $ 90.04 $ 81.14
 
       

REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(Dollars in thousands)

 
(Unaudited) Three Months Ended
September 30,
Nine Months Ended
September 30,
2016     2015 2016     2015
Revenues:
Net premiums $ 2,251,758 $ 2,089,345 $ 6,755,708 $ 6,242,240
Investment income, net of related expenses 489,727 389,597 1,414,659 1,267,027
Investment related gains (losses), net:
Other-than-temporary impairments on fixed maturity securities (23,111 ) (34,663 ) (29,775 )
Other investment related gains (losses), net 86,624   (88,235 ) 118,665   (90,166 )
Total investment related gains (losses), net 86,624 (111,346 ) 84,002 (119,941 )
Other revenue 72,468   71,038   197,844   200,261  
Total revenues 2,900,577   2,438,634   8,452,213   7,589,587  
Benefits and expenses:
Claims and other policy benefits 1,993,064 1,831,819 5,877,330 5,473,453
Interest credited 116,848 34,008 300,602 231,932
Policy acquisition costs and other insurance expenses 300,962 249,702 940,406 827,157
Other operating expenses 152,556 142,270 469,875 395,488
Interest expense 43,063 35,565 96,201 107,043
Collateral finance and securitization expense 6,484   5,133   19,396   16,462  
Total benefits and expenses 2,612,977   2,298,497   7,703,810   7,051,535  
Income before income taxes 287,600 140,137 748,403 538,052
Provision for income taxes 88,881   56,603   237,109   199,013  
Net income $ 198,719   $ 83,534   $ 511,294   $ 339,039  

Source: Reinsurance Group of America, Incorporated

Reinsurance Group of America, Incorporated
Jeff Hopson, 636-736-7000
Senior Vice President - Investor Relations