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Reinsurance Group Of America Reports First-Quarter Results

Reinsurance Group of America, Incorporated (NYSE:RGA), a leading global provider of life reinsurance, reported first-quarter net income of $123.3 million, or $1.67 per diluted share, compared to $148.9 million, or $2.02 per diluted share in the prior-year quarter. Operating income* increased five percent to $112.4 million, or $1.52 per diluted share, from $106.9 million, or $1.45 per diluted share, in the year-ago quarter. Amounts for 2011 have been adjusted for the retrospective adoption of new accounting guidance for deferred acquisition costs.
    Quarterly Results
($ in thousands, except per share data) 2012     2011
Net premiums $ 1,863,482 $ 1,736,130
Net income 123,318 148,920
Net income per diluted share 1.67 2.02
Operating income* 112,377 106,931
Operating income per diluted share* 1.52 1.45
Book value per share 80.44 64.14

Book value per share (excl. Accumulated Other Comprehensive Income “AOCI”)*


Total assets 32,286,082 29,079,805

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

Consolidated net premiums increased seven percent to $1,863.5 million from $1,736.1 million in the prior-year quarter, including an adverse effect of $4.9 million from changes in foreign currency exchange rates. Investment income decreased eight percent to $340.9 million from $371.0 million in the year-earlier quarter, attributable to a $49.1 million decline in fair value of option contracts, which are included in funds withheld at interest and support the crediting rates for equity-indexed annuities. Excluding the effect of those option contracts, investment income increased six percent. Excluding funds withheld assets, the average book value of invested assets was up approximately $1.6 billion to $18.3 billion, and the average portfolio yield decreased to 5.05 percent from 5.35 percent in the first quarter of 2011, and from 5.19 percent in the fourth quarter of 2011. The investment portfolio yield continues to be adversely affected by the lower interest rate environment. Net foreign currency fluctuations did not materially affect bottom-line results.

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