Reinsurance Group of America, Incorporated (NYSE: RGA) is an insurance holding company. The company is primarily engaged in traditional individual and group life, asset-intensive, critical illness and financial reinsurance. RGA and its predecessor, the Reinsurance Division of General American, have been engaged in the business of life reinsurance since 1973. The company’s more established operations in the US and Canada contributed approximately 68% of its consolidated net premiums during 2008.
The company also has its operations in the international markets and has subsidiaries, branch operations, or representative offices in Australia, Barbados, Bermuda, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Mexico, Poland, South Africa, South Korea, Spain, Taiwan and the UK. RGA is considered to be one of the leading life re-insurers in the North American market based on premiums and the amount of life reinsurance in force. As of December 31, 2008, the company had approximately $2.1 trillion of life reinsurance in force and $21.7 billion in consolidated assets.
Revenue break-up
The company obtains all of its revenues through tradition reinsurance business and non-traditional reinsurance business. The traditional re insurance premiums cover a portfolio of life insurance products, including term life, credit life, universal life, and whole life, joint and last survivor insurance, insurance on critical illness. The non-traditional re insurance business include direct premiums on asset intensive re-insurance and financial re-insurance. The company generates its revenue from five main geographic regions: the US, Canada, Europe & South Africa, Asia Pacific and others.
Financial performance
For the year ended December 31, 2008, RGA Reinsurance reported total revenue of $5,681.2 million compared with $5,718.3 million for the fiscal year ended 2007, a decrease of 0.7%. This is primarily related to the company’s investment related losses of $647.2 million compared to an investment loss of $178 million in 2007. While the company’s net premiums increased from $4,909.1 million in 2007 to $5,349.3 million in 2008.
The company’s net income totaled $176.8 million in 2008, compared with $293.8 million in 2007. The diluted earnings per share was $2.71 for the year ended Dec. 31, 2008, compared with $4.57 per share during the corresponding period in 2007. The company’s financial performance is not very weak considering the economic slowdown and the weak financial performance of the overall financial sector in the market
Fourth-quarter net premiums also rose by 3% to $1,389.1 million, from $1,348 million a year ago. Excluding the impact of foreign currency translation, premiums increased approximately 11% for the quarter. Net investment income totaled $196.6 million versus $226.8 million the year before.
