REINSURANCE GROUP OF AMERICA, INC. (RGA, Financial) filed Quarterly Report for the period ended 2012-09-30.
Reinsurance Group Of America Inc has a market cap of $3.88 billion; its shares were traded at around $53.51 with a P/E ratio of 8.2 and P/S ratio of 0.4. The dividend yield of Reinsurance Group Of America Inc stocks is 1.8%. Reinsurance Group Of America Inc had an annual average earning growth of 7.5% over the past 10 years.
In the third quarter of 2012, the change in fair value of the embedded derivative increased revenues by $54.3 million and related deferred acquisition expenses increased benefits and expenses by $37.6 million, for a positive pre-tax income impact of $16.7 million. During the third quarter of 2011, the change in fair value of the embedded derivative decreased revenues by $103.9 million and related deferred acquisition expenses decreased benefits and expenses by $68.1 million, for a negative pre-tax income impact of $35.8 million, primarily due to an increase in investment credit spreads. In the first nine months of 2012, the change in fair value of the embedded derivative increased revenues by $40.3 million and related deferred acquisition expenses increased benefits and expenses by $24.7 million, for a positive pre-tax income impact of $15.6 million, primarily due to an increase in investment credit spreads. During the first nine months of 2011, the change in fair value of the embedded derivative decreased revenues by $2.9 million and related deferred acquisition expenses increased benefits and expenses by $2.4 million, for a negative pre-tax income impact of $0.5 million, primarily due to an increase in investment credit spreads.
In the third quarter of 2012, the change in the fair value of the guaranteed minimum benefits, after allowing for changes in the associated free standing derivatives, increased revenues by $22.6 million and related deferred acquisition expenses increased benefits and expenses by $15.8 million for a negative pre-tax income impact of $6.8 million. In the third quarter of 2011, the change in the fair value of the guaranteed minimum benefits after allowing for changes in the associated free-standing derivatives increased revenues by $39.0 million and related deferred acquisition expenses increased benefits and expenses by $21.7 million for a positive pre-tax income impact of $17.2 million. In the first nine months of 2012, the change in the fair value of the guaranteed minimum benefits, after allowing for changes in the associated free standing derivatives, increased revenues by $44.2 million and related deferred acquisition expenses increased benefits and expenses by $27.7 million for a positive pre-tax income impact of $16.6 million. In the first nine months of 2011, the change in the fair value of the guaranteed minimum benefits after allowing for changes in the associated hedge instruments increased revenues by $25.0 million and related deferred acquisition expenses increased benefits and expenses by $12.8 million for a positive pre-tax income impact of $12.2 million.
Income before income taxes decreased $52.3 million, or 119.1%, and $77.9 million, or 128.5% for the three and nine months ended September 30, 2012, as compared to the same periods in 2011. The decrease for the third quarter was primarily due to a $46.6 million decrease in other revenue and a $4.9 million decrease in investment income. The decrease for the first nine months is primarily due to a $49.8 million decrease in other revenue and a $22.5 million decrease in investment income.
Total revenues decreased $42.1 million, or 61.0%, and $73.2 million, or 47.9%, for the three and nine months ended September 30, 2012, as compared to the same periods in 2011. The decrease for the third quarter was primarily due to a $46.6 million decrease in other revenue due to gains on the repurchase of collateral finance facility securities of $50.9 million in the prior period and a $4.9 million decrease in investment income due to lower investment yields. The decrease in revenues for the first nine months was largely due to a $49.8 million decrease in other revenue due to gains on the repurchase of collateral finance facility securities of $55.8 million in the prior period and a $22.5 million decrease in investment income due to lower investment yields.
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Reinsurance Group Of America Inc has a market cap of $3.88 billion; its shares were traded at around $53.51 with a P/E ratio of 8.2 and P/S ratio of 0.4. The dividend yield of Reinsurance Group Of America Inc stocks is 1.8%. Reinsurance Group Of America Inc had an annual average earning growth of 7.5% over the past 10 years.
Highlight of Business Operations:
Embedded Derivatives - modco/Funds Withheld Treaties - Represents the change in the fair value of embedded derivatives on funds withheld at interest associated with treaties written on a modco or funds withheld basis. The fair value changes of embedded derivatives on funds withheld at interest associated with treaties written on a modco or funds withheld basis are reflected in revenues, while the related impact on deferred acquisition expenses is reflected in benefits and expenses. Changes in the fair value of the embedded derivative are driven by changes in investment credit spreads, including the Companys own credit spread. Generally, an increase in investment credit spreads, ignoring changes in the Companys own credit spread, will have a negative impact on the fair value of the embedded derivative (decrease in income). Changes in fair values of these embedded derivatives are net of an increase (decrease) in revenues of $(6.2) million and $25.4 million for the three months and $(63.4) million and $1.1 million for the nine months ended September 30, 2012 and 2011, respectively, associated with the Companys own credit risk. A 10% increase in the Companys own credit risk rate would have increased revenues by approximately $0.2 million for the nine months ended September 30, 2012. Conversely, a 10% decrease in the Companys own credit risk rate would have decreased revenues by approximately $0.2 million for the nine months ended September 30, 2012.In the third quarter of 2012, the change in fair value of the embedded derivative increased revenues by $54.3 million and related deferred acquisition expenses increased benefits and expenses by $37.6 million, for a positive pre-tax income impact of $16.7 million. During the third quarter of 2011, the change in fair value of the embedded derivative decreased revenues by $103.9 million and related deferred acquisition expenses decreased benefits and expenses by $68.1 million, for a negative pre-tax income impact of $35.8 million, primarily due to an increase in investment credit spreads. In the first nine months of 2012, the change in fair value of the embedded derivative increased revenues by $40.3 million and related deferred acquisition expenses increased benefits and expenses by $24.7 million, for a positive pre-tax income impact of $15.6 million, primarily due to an increase in investment credit spreads. During the first nine months of 2011, the change in fair value of the embedded derivative decreased revenues by $2.9 million and related deferred acquisition expenses increased benefits and expenses by $2.4 million, for a negative pre-tax income impact of $0.5 million, primarily due to an increase in investment credit spreads.
In the third quarter of 2012, the change in the fair value of the guaranteed minimum benefits, after allowing for changes in the associated free standing derivatives, increased revenues by $22.6 million and related deferred acquisition expenses increased benefits and expenses by $15.8 million for a negative pre-tax income impact of $6.8 million. In the third quarter of 2011, the change in the fair value of the guaranteed minimum benefits after allowing for changes in the associated free-standing derivatives increased revenues by $39.0 million and related deferred acquisition expenses increased benefits and expenses by $21.7 million for a positive pre-tax income impact of $17.2 million. In the first nine months of 2012, the change in the fair value of the guaranteed minimum benefits, after allowing for changes in the associated free standing derivatives, increased revenues by $44.2 million and related deferred acquisition expenses increased benefits and expenses by $27.7 million for a positive pre-tax income impact of $16.6 million. In the first nine months of 2011, the change in the fair value of the guaranteed minimum benefits after allowing for changes in the associated hedge instruments increased revenues by $25.0 million and related deferred acquisition expenses increased benefits and expenses by $12.8 million for a positive pre-tax income impact of $12.2 million.
Income before income taxes decreased $52.3 million, or 119.1%, and $77.9 million, or 128.5% for the three and nine months ended September 30, 2012, as compared to the same periods in 2011. The decrease for the third quarter was primarily due to a $46.6 million decrease in other revenue and a $4.9 million decrease in investment income. The decrease for the first nine months is primarily due to a $49.8 million decrease in other revenue and a $22.5 million decrease in investment income.
Total revenues decreased $42.1 million, or 61.0%, and $73.2 million, or 47.9%, for the three and nine months ended September 30, 2012, as compared to the same periods in 2011. The decrease for the third quarter was primarily due to a $46.6 million decrease in other revenue due to gains on the repurchase of collateral finance facility securities of $50.9 million in the prior period and a $4.9 million decrease in investment income due to lower investment yields. The decrease in revenues for the first nine months was largely due to a $49.8 million decrease in other revenue due to gains on the repurchase of collateral finance facility securities of $55.8 million in the prior period and a $22.5 million decrease in investment income due to lower investment yields.
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