<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------------
FORM 10-Q
---------------------
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000,
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO .
FOR THE QUARTER ENDED SEPTEMBER 30, 2000 COMMISSION FILE NUMBER 1-11688
------------------------
AMERICAN RE CORPORATION
(Exact name of registrant as specified in its charter)
------------------------
<TABLE>
<S> <C>
DELAWARE 13-3672116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
555 COLLEGE ROAD EAST
PRINCETON, NEW JERSEY 08543-5241
(Address of principal executive offices) (zip code)
</TABLE>
------------------------
Registrant's telephone number, including area code: (609) 243-4200
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES /X/ NO / /
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK AS OF THE LATEST PRACTICABLE DATE.
<TABLE>
<S> <C> <C>
COMMON STOCK--$.01 PAR VALUE 149.49712
Description of Class Shares Outstanding
as of November 13,
2000
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
AMERICAN RE CORPORATION
INDEX TO FORM 10-Q
<TABLE>
<S> <C>
PART I FINANCIAL INFORMATION
Item 1--
PAGE
--
<S> <C>
Consolidated balance sheets at September 30, 2000
(unaudited), and December 31, 1999...................... 1
Consolidated statements of income for the three-month
and nine-month periods ended September 30, 2000, and
1999 (unaudited)....................................... 2
Consolidated statements of cash flows for the nine-month
periods ended September 30, 2000, and 1999
(unaudited)............................................ 3
Notes to consolidated interim financial statements...... 4
Item 2--
Management's discussion and analysis of the Company's
Results of Operations and Financial Condition.......... 10
PART II OTHER INFORMATION.................................. 15
</TABLE>
<PAGE>
AMERICAN RE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Investments
Fixed Maturities
Bonds available for sale, at fair value (amortized cost:
September 30, 2000 -- $6,659.4; December 31, 1999 --
$6,511.6)............................................. $ 6,570.0 $ 6,315.2
Preferred stock available for sale, at fair value
(amortized cost:
September 30, 2000 -- $87.7; December 31, 1999 --
$84.4)................................................ 86.7 84.6
Equity securities available for sale, at fair value (cost:
September 30, 2000 -- $425.3; December 31, 1999 --
$367.1)................................................. 410.3 402.1
Other invested assets..................................... 13.5 40.5
Cash and cash equivalents................................... 682.2 597.5
--------- ---------
Total investments and cash............................ 7,762.7 7,439.9
Accrued investment income................................... 89.3 83.5
Premiums and other receivables.............................. 1,157.9 1,181.2
Deferred policy acquisition costs........................... 330.8 324.5
Reinsurance recoverables on paid and unpaid losses.......... 3,184.9 3,034.9
Funds held by ceding companies.............................. 648.3 609.7
Prepaid reinsurance premiums................................ 129.6 138.8
Deferred federal income taxes............................... 400.7 376.0
Other assets................................................ 1,162.9 1,090.3
--------- ---------
Total assets.......................................... $14,867.1 $14,278.8
========= =========
LIABILITIES
Loss and loss adjustment expense reserves................... $ 8,598.3 $ 8,369.0
Unearned premium reserve.................................... 1,243.1 1,223.4
--------- ---------
Total insurance reserves.............................. 9,841.4 9,592.4
Loss balances payable....................................... 356.7 421.3
Funds held under reinsurance treaties....................... 467.5 322.6
Senior bank debt............................................ 75.0 75.0
Senior notes................................................ 498.5 498.5
Other liabilities........................................... 839.0 642.5
--------- ---------
Total liabilities..................................... 12,078.1 11,552.3
--------- ---------
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust holding as all of its
assets Junior Subordinated Debentures..................... 237.5 237.5
STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01 per share; authorized: 1,000
shares; issued and outstanding: September 30, 2000, and
December 31, 1999 -- 149.49712 shares..................... -- --
Additional paid-in capital.................................. 1,332.4 1,332.4
Retained earnings........................................... 1,273.9 1,296.6
Accumulated other comprehensive income (loss)............... (54.8) (140.0)
--------- ---------
Total stockholder's equity............................ 2,551.5 2,489.0
--------- ---------
Total liabilities, Company-obligated mandatorily
redeemable preferred securities of subsidiary trust
and stockholder's equity............................ $14,867.1 $14,278.8
========= =========
</TABLE>
See accompanying notes to consolidated interim financial statements.
1
<PAGE>
AMERICAN RE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUE:
Premiums written....................................... $815.7 $757.7 $2,333.8 $2,182.4
Change in unearned premium reserve..................... (14.4) 35.2 (21.0) (132.9)
------ ------ -------- --------
Premiums earned...................................... 801.3 792.9 2,312.8 2,049.5
Net investment income.................................. 117.7 104.7 336.4 313.4
Net realized capital gains............................. 14.7 16.3 46.0 74.5
Other income........................................... 6.8 2.9 22.9 19.7
------ ------ -------- --------
Total revenue........................................ 940.5 916.8 2,718.1 2,457.1
------ ------ -------- --------
LOSSES AND EXPENSES:
Losses and loss adjustment expenses.................... 626.4 677.3 1,913.3 1,585.3
Commission expense..................................... 184.9 138.3 558.7 437.5
Operating expense...................................... 63.1 71.5 180.0 196.4
Interest expense....................................... 10.6 10.8 31.9 31.3
Other expense.......................................... 29.6 22.3 71.5 64.4
------ ------ -------- --------
Total losses and expenses............................ 914.6 920.2 2,755.4 2,314.9
------ ------ -------- --------
Income (loss) before income taxes and distributions
on preferred securities of subsidiary trust........ 25.9 (3.4) (37.3) 142.2
Federal and foreign income taxes....................... 8.6 (11.1) (24.4) 25.3
------ ------ -------- --------
Income (loss) before distributions on preferred
securities of subsidiary trust..................... 17.3 7.7 (12.9) 116.9
Distributions on preferred securities of subsidiary
trust, net of applicable income tax of $1.7 and $5.3,
respectively......................................... (3.3) (3.3) (9.8) (9.8)
------ ------ -------- --------
Net income (loss) to common stockholder.............. $ 14.0 $ 4.4 $ (22.7) $ 107.1
====== ====== ======== ========
</TABLE>
See accompanying notes to consolidated interim financial statements.
2
<PAGE>
AMERICAN RE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE-MONTH PERIOD
ENDED SEPTEMBER 30,
---------------------
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ (22.7) $ 107.1
Adjustments to reconcile net income to net cash provided
by operating activities:
Decrease (increase) in accrued investment income........ (5.8) (6.1)
Decrease (increase) in premiums and other receivables... 23.3 47.6
Decrease (increase) in deferred policy acquisition
costs................................................. (6.3) (19.9)
Increase in reinsurance recoverables.................... (150.0) (132.5)
Increase in insurance reserves.......................... 249.0 245.8
Decrease (increase) in current and deferred federal and
foreign income tax assets............................. (4.4) (25.8)
Change in other assets and liabilities, net............. 97.2 (190.5)
Depreciation expense on property and equipment.......... 7.9 7.4
Net realized capital gains.............................. (46.0) (74.5)
Change in other, net.................................... 109.6 9.5
--------- ---------
Net cash provided by (used in) operating activities... 251.8 (31.9)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments available for sale:
Purchases............................................... (2,620.6) (2,535.9)
Maturities.............................................. 349.5 277.1
Sales................................................... 2,093.3 2,572.8
Other investments:
Purchases............................................... (1.2) (20.9)
Sales................................................... 28.3 14.7
Cost of additions to property and equipment............... (8.7) (7.9)
--------- ---------
Net cash provided by (used in) investing activities... (159.4) 299.9
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS............................................... (7.7) (0.4)
--------- ---------
Net increase in cash and cash equivalents............. 84.7 267.6
Cash and cash equivalents, beginning of period.............. 597.5 274.9
--------- ---------
Cash and cash equivalents, end of period.................... $ 682.2 $ 542.5
========= =========
</TABLE>
See accompanying notes to consolidated interim financial statements.
3
<PAGE>
AMERICAN RE CORPORATION
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(DOLLARS IN MILLIONS)
(UNAUDITED)
1. BASIS OF PRESENTATION
American Re Corporation ("American Re" or the "Company") primarily acts as
the holding company for American Re-Insurance Company ("American Re-Insurance").
American Re-Insurance underwrites property and casualty reinsurance on a direct
basis in both the domestic and international markets. The Company is a
wholly-owned subsidiary of Munich-American Holding Corporation, a Delaware
holding company ("MAHC"), 100% owned by Munich Reinsurance Company ("Munich
Re"), a company organized under the laws of Germany. Munich Re contributed the
outstanding stock of American Re to MAHC as of September 30, 2000.
The information for the interim periods ended September 30, 2000, and 1999,
is unaudited. The interim consolidated financial statements have been prepared
on the basis of generally accepted accounting principles and, in the opinion of
management, reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of results for such periods. The results of
operations and cash flows for any interim period are not necessarily indicative
of results for the full year. Intercompany accounts and transactions have been
eliminated. These financial statements should be read in conjunction with the
financial statements and related notes in the Company's 1999 Form 10-K.
2. COMPREHENSIVE INCOME
The Company had comprehensive income of $80.0 million for the three-month
period ended September 30, 2000, compared to a comprehensive loss of
$52.2 million for the same period in 1999, and comprehensive income of
$62.5 million for the nine-month period ended September 30, 2000, compared to a
comprehensive loss of $118.6 million for the same period in 1999.
The components of accumulated other comprehensive income (loss) are as
follows:
<TABLE>
<CAPTION>
NET UNREALIZED
APPRECIATION NET UNREALIZED
(DEPRECIATION) OF LOSS ON FOREIGN
INVESTMENTS EXCHANGE TOTAL
----------------- --------------- --------
<S> <C> <C> <C>
Balance at December 31, 1998............................ $ 158.9 $(35.8) $ 123.1
Period change......................................... (278.3) 5.5 (272.8)
Tax effect........................................ 97.4 (1.9) 95.5
Reclassification adjustment for gain/loss included in
net income.......................................... (74.5) -- (74.5)
Tax effect........................................ 26.1 -- 26.1
------- ------ -------
Balance at September 30, 1999........................... $ (70.4) $(32.2) $(102.6)
======= ====== =======
Balance at December 31, 1999............................ $(104.8) $(35.2) $(140.0)
Period change......................................... 101.9 75.2 177.1
Tax effect........................................ (35.7) (26.3) (62.0)
Reclassification adjustment for gain/loss included in
net income.......................................... (46.0) -- (46.0)
Tax effect........................................ 16.1 -- 16.1
------- ------ -------
Balance at September 30, 2000........................... $ (68.5) $ 13.7 $ (54.8)
======= ====== =======
</TABLE>
4
<PAGE>
AMERICAN RE CORPORATION
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(DOLLARS IN MILLIONS)
(UNAUDITED) (CONTINUED)
3. REINSURANCE
The Company reinsures certain risks to limit its exposure to catastrophes
and large or unusually hazardous risks. Although reinsurance agreements
contractually obligate the Company's reinsurers to reimburse it for the
agreed-upon portion of its gross paid losses, they do not discharge the primary
liability of the Company. The income statement amounts for premiums written,
premiums earned and losses and loss adjustment expenses are net of reinsurance.
Direct, assumed, ceded and net amounts for these items are as follows:
<TABLE>
<CAPTION>
THREE-MONTH PERIOD NINE-MONTH PERIOD
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
----------------------- -----------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Premiums written:
Direct.......................... $104.9 $ 85.4 $ 231.1 $ 204.9
Assumed......................... 883.1 816.6 2,482.2 2,469.9
Ceded........................... (172.3) (144.3) (379.5) (492.4)
------ ------ -------- --------
Net........................... 815.7 757.7 2,333.8 2,182.4
====== ====== ======== ========
Premiums earned:
Direct.......................... 96.0 80.1 222.0 198.1
Assumed......................... 871.5 878.3 2,459.9 2,358.3
Ceded........................... (166.2) (165.5) (369.1) (506.9)
------ ------ -------- --------
Net........................... 801.3 792.9 2,312.8 2,049.5
====== ====== ======== ========
Losses incurred:
Direct.......................... 54.7 32.0 135.4 131.1
Assumed......................... 726.0 661.9 2,216.8 1,747.4
Ceded........................... (154.3) (16.6) (438.9) (293.2)
------ ------ -------- --------
Net........................... $626.4 $677.3 $1,913.3 $1,585.3
====== ====== ======== ========
</TABLE>
4. SEGMENT REPORTING
American Re's Domestic Insurance Company Operations ("DICO") serves U.S.
insurance companies by providing them with customized, integrated treaty,
facultative and finite risk reinsurance programs on a direct basis. American
Re's alternative market strategic business unit, Munich-American RiskPartners
("RiskPartners") provides customized risk transfer, risk sharing, and risk
management solutions to self-insured clients worldwide. International Operations
("International") provides treaty, facultative and finite risk reinsurance along
with a range of other customized products and services to insurance companies
and other entities worldwide. American Re Financial Products ("ARFP") provides
clients with an array of highly customized financial risk management products
and services, including credit enhancement and integrated risk management.
American Re HealthCare ("HealthCare") integrates risk transfer products and
specialized services to help insurance companies and self-insureds predict,
prevent, and manage catastrophic medical events. In addition to its core
reinsurance business, American Re, through various subsidiaries, offers a broad
array of related services including actuarial
5
<PAGE>
AMERICAN RE CORPORATION
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(DOLLARS IN MILLIONS)
(UNAUDITED) (CONTINUED)
4. SEGMENT REPORTING (CONTINUED)
and financial analysis, due diligence consulting for mergers and acquisitions,
rent-a-captive facilities, and reinsurance and insurance brokerage. The
financial results of these subsidiaries have been aggregated along with holding
company operations for presentation of segment results. Segment information for
the three months and nine months ended September 30, 1999, as filed in the
Company's September 1999 Form 10-Q, has been restated to reflect management's
increased focus on the Company's ARFP and HealthCare segments.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------
TOTAL
REINSURANCE/ HOLDING
INSURANCE COMPANY
DICO RISKPARTNERS INTERNATIONAL HEALTHCARE ARFP OPERATIONS & OTHER TOTAL
-------- ------------ ------------- ---------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
GROSS PREMIUMS
WRITTEN.............. $486.2 $226.2 $171.6 $90.4 $13.5 $987.9 $0.1 $988.0
------ ------ ------ ----- ----- ------ --- ------
NET PREMIUMS WRITTEN... 427.0 154.7 134.0 87.5 12.4 815.6 0.1 815.7
------ ------ ------ ----- ----- ------ --- ------
PREMIUMS EARNED........ 448.2 135.5 126.0 87.8 3.8 801.3 -- 801.3
Net investment income.. 111.1 6.6 117.7
Net realized capital
gains................ 14.8 (0.1) 14.7
Other income........... (0.6) 7.4 6.8
------ --- ------
Total revenue........ 926.6 13.9 940.5
------ --- ------
LOSSES AND EXPENSES:
LOSSES AND LAE......... 343.9 104.6 115.0 70.2 (7.3) 626.4 -- 626.4
UNDERWRITING EXPENSE... 134.5 43.3 42.0 26.2 1.9 247.9 0.1 248.0
Interest expense....... -- 10.6 10.6
Other expense.......... 5.7 23.9 29.6
------ --- ------
Total losses and
expenses........... 880.0 34.6 914.6
------ --- ------
Income (loss) before
income taxes....... 25.9
======
UNDERWRITING GAIN
(LOSS)................. (30.2) (12.4) (31.0) (8.6) 9.2 (73.0) (0.1) (73.1)
====== ====== ====== ===== ===== ====== === ======
LOSS AND LAE RATIO....... 76.7% 77.2% 91.3% 80.0% N/M 78.1% N/M 78.1%
UNDERWRITING EXPENSE
RATIO.................. 30.0 32.0 33.3 30.0 48.2 31.0 N/M 31.0
------ ------ ------ ----- ----- ------ --- ------
COMBINED RATIO........... 106.7% 109.2% 124.6% 110.0% N/M 109.1% N/M 109.1%
====== ====== ====== ===== ===== ====== === ======
</TABLE>
6
<PAGE>
AMERICAN RE CORPORATION
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------
TOTAL
REINSURANCE/ HOLDING
INSURANCE COMPANY
DICO RISKPARTNERS INTERNATIONAL HEALTHCARE ARFP OPERATIONS & OTHER TOTAL
-------- ------------ ------------- ---------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
GROSS PREMIUMS
WRITTEN.............. $587.0 $140.2 $154.7 $10.1 $8.9 $900.9 $1.2 $902.1
------ ------ ------ ----- ---- ------ --- ------
NET PREMIUMS WRITTEN... 511.2 90.4 135.3 10.9 8.7 756.5 1.2 757.7
------ ------ ------ ----- ---- ------ --- ------
PREMIUMS EARNED........ 508.0 114.4 143.9 23.5 2.2 792.0 0.9 792.9
Net investment
income............... 100.0 4.7 104.7
Net realized capital
gains................ 16.3 -- 16.3
Other income......... (1.6) 4.5 2.9
------ --- ------
Total revenue.......... 906.7 10.1 916.8
------ --- ------
LOSSES AND EXPENSES:
LOSSES AND LAE......... 420.8 85.1 154.9 16.2 0.2 677.2 0.1 677.3
UNDERWRITING EXPENSE... 118.3 40.7 47.7 0.5 1.4 208.6 1.2 209.8
Interest expense....... -- 10.8 10.8
Other expense.......... 3.2 19.1 22.3
------ --- ------
Total losses and
expenses........... 889.0 31.2 920.2
------ --- ------
Income (loss) before
income taxes....... (3.4)
======
UNDERWRITING GAIN
(LOSS)................. (31.1) (11.4) (58.7) 6.8 0.6 (93.8) (0.4) (94.2)
====== ====== ====== ===== ==== ====== === ======
LOSS AND LAE RATIO....... 82.8% 74.4% 107.6% 68.9% 7.0% 85.5% N/M 85.4%
UNDERWRITING EXPENSE
RATIO.................. 23.3 35.6 33.1 2.1 62.4 26.3 N/M 26.5
------ ------ ------ ----- ---- ------ --- ------
COMBINED RATIO........... 106.1% 110.0% 140.7% 71.0% 69.4% 111.8% N/M 111.9%
====== ====== ====== ===== ==== ====== === ======
</TABLE>
7
<PAGE>
AMERICAN RE CORPORATION
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 2000
------------------------------------
TOTAL
REINSURANCE/ HOLDING
INSURANCE COMPANY
DICO RISKPARTNERS INTERNATIONAL HEALTHCARE ARFP OPERATIONS & OTHER TOTAL
-------- ------------ ------------- ---------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
GROSS PREMIUMS
WRITTEN............ $1,376.4 $582.8 $467.5 $223.9 $62.5 $2,713.1 $0.2 $2,713.3
-------- ------ ------ ------ ----- -------- --- --------
NET PREMIUMS
WRITTEN............ 1,248.9 403.1 420.5 213.9 47.2 2,333.6 0.2 2,333.8
-------- ------ ------ ------ ----- -------- --- --------
PREMIUMS EARNED...... 1,291.4 388.1 397.8 214.5 20.8 2,312.6 0.2 2,312.8
Net investment
income............. 317.7 18.7 336.4
Net realized capital
gains.............. 46.1 (0.1) 46.0
Other income......... (0.1) 23.0 22.9
-------- --- --------
Total revenue...... 2,676.3 41.8 2,718.1
-------- --- --------
LOSSES AND EXPENSES:
LOSSES AND LAE....... 1,068.5 311.2 367.2 159.7 6.7 1,913.3 -- 1,913.3
UNDERWRITING
EXPENSE............ 424.0 120.9 124.4 63.4 5.4 738.1 0.6 738.7
Interest expense..... -- 31.9 31.9
Other expense........ 18.5 53.0 71.5
-------- --- --------
Total losses and
expenses......... 2,669.9 85.5 2,755.4
-------- --- --------
Income (loss)
before income
taxes............ (37.3)
========
UNDERWRITING GAIN
(LOSS)............... (201.1) (44.0) (93.8) (8.6) 8.7 (338.8) (0.4) (339.2)
======== ====== ====== ====== ===== ======== === ========
LOSS AND LAE RATIO..... 82.7% 80.2% 92.3% 74.5% 32.2% 82.7% N/M 82.7%
UNDERWRITING EXPENSE
RATIO................ 32.8 31.2 31.3 29.5 25.9 32.0 N/M 32.0
-------- ------ ------ ------ ----- -------- --- --------
COMBINED RATIO......... 115.5% 111.4% 123.6% 104.0% 58.1% 114.7% N/M 114.7%
======== ====== ====== ====== ===== ======== === ========
</TABLE>
8
<PAGE>
AMERICAN RE CORPORATION
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2000
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999
------------------------------------
TOTAL
REINSURANCE/ HOLDING
INSURANCE COMPANY
DICO RISKPARTNERS INTERNATIONAL HEALTHCARE ARFP OPERATIONS & OTHER TOTAL
-------- ------------ ------------- ---------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
GROSS PREMIUMS
WRITTEN............ $1,550.5 $562.6 $448.5 $80.7 $23.2 $2,665.5 $9.4 $2,674.9
-------- ------ ------ ----- ----- -------- --- --------
NET PREMIUMS
WRITTEN............ 1,307.7 363.4 402.3 77.4 22.2 2,173.0 9.4 2,182.4
-------- ------ ------ ----- ----- -------- --- --------
PREMIUMS EARNED...... 1,238.5 343.7 387.4 61.6 9.2 2,040.4 9.1 2,049.5
Net investment
income............. 304.8 8.6 313.4
Net realized capital
gains.............. 74.5 -- 74.5
Other income......... (1.9) 21.6 19.7
-------- --- --------
Total revenue...... 2,417.8 39.3 2,457.1
-------- --- --------
LOSSES AND EXPENSES:
LOSSES AND LAE....... 941.9 253.4 337.6 42.2 2.0 1,577.1 8.2 1,585.3
UNDERWRITING
EXPENSE............ 376.0 108.6 124.0 18.1 6.4 633.1 0.8 633.9
Interest expense..... -- 31.3 31.3
Other expense........ 6.7 57.7 64.4
-------- --- --------
Total losses and
expenses......... 2,216.9 98.0 2,314.9
-------- --- --------
Income (loss)
before income
taxes............ 142.2
========
UNDERWRITING GAIN
(LOSS)............... (79.4) (18.3) (74.2) 1.3 0.8 (169.8) 0.1 (169.7)
======== ====== ====== ===== ===== ======== === ========
LOSS AND LAE RATIO..... 76.1% 73.7% 87.1% 68.5% 21.4% 77.3% N/M 77.4%
UNDERWRITING EXPENSE
RATIO................ 30.3 31.6 32.0 29.4 69.6 31.0 N/M 30.9
-------- ------ ------ ----- ----- -------- --- --------
COMBINED RATIO......... 106.4% 105.3% 119.1% 97.9% 91.0% 108.3% N/M 108.3%
======== ====== ====== ===== ===== ======== === ========
</TABLE>
Elements of underwriting result are BOLD.
The Company does not allocate certain items of revenues and expenses, nor
are they included in the assessment of the segment results as reviewed by the
Company's management. The assets and liabilities of the Company are generally
not maintained on a segment or geographical basis. An allocation of such assets
and liabilities is considered by the Company to be impracticable.
9
<PAGE>
MANAGEMENTS' DISCUSSION AND ANALYSIS OF THE COMPANY'S RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
QUARTER ENDED SEPTEMBER 30, 2000, COMPARED WITH QUARTER ENDED SEPTEMBER 30, 1999
The Company's net premiums written increased 7.7% to $815.7 million for the
quarter ended September 30, 2000, from $757.7 million for the same period in
1999.
RiskPartners experienced a 71.1% increase in net premiums written to
$154.7 million for the third quarter of 2000, from $90.4 million for the same
period in 1999. This increase was primarily attributable to a $50.3 million
increase in RiskPartners' treaty business and a $25.7 million increase in its
direct business, partially offset by a $9.4 million decrease in finite risk
writings. HealthCare experienced an increase in treaty net premiums written to
$87.5 million for the third quarter of 2000, from $10.9 million for the same
period in 1999. These increases were partially offset by a 16.5% decrease in net
premiums written in DICO to $427.0 million for the third quarter of 2000, from
$511.2 million for the same period in 1999. This decrease was attributable to a
$78.7 million decrease in DICO's finite risk business and a $45.1 million
decrease in its treaty business, partially offset by a $33.3 million increase in
facultative writings.
The Company's net premiums earned increased 1.1% to $801.3 million for the
quarter ended September 30, 2000, from $792.9 million for the same period in
1999. The increase in premiums earned was primarily attributable to the increase
in net premiums written, offset by the timing of premiums earned on business in
force.
Net losses and LAE incurred decreased 7.5% to $626.4 million for the quarter
ended September 30, 2000, from $677.3 million for the same period in 1999. This
decrease is primarily attributable to lower catastrophe losses of $7.9 million
incurred during the quarter ended September 30, 2000, compared to $86.5 million
incurred during the 1999 period, offset in part by additional loss provisions on
several contracts, primarily from prior accident years, as well as increases in
the Company's ultimate current accident year loss ratios for certain types of
business.
Underwriting expense, consisting of commission expense plus operating
expense, increased 18.2% to $248.0 million for the quarter ended September 30,
2000, from $209.8 million for the same period in 1999. This increase was due to
a 33.7% increase in commission expense to $184.9 million for the third quarter
of 2000 from $138.3 million for the same period in 1999. This increase was
primarily attributable to a lower commission ratio on several large,
retrospectively rated contracts in the third quarter of 1999. Operating expenses
decreased 11.7% to $63.1 million for the third quarter of 2000 from
$71.5 million for the third quarter of 1999, due primarily to a decrease in
overhead costs related to underwriting activities.
The Company experienced an underwriting loss (net premiums earned minus
losses and LAE incurred and underwriting expenses) of $73.1 million for the
quarter ended September 30, 2000, compared to an underwriting loss of
$94.2 million for the same period in 1999. On a GAAP basis, the Company's loss
ratio decreased to 78.1% for the third quarter of 2000 from 85.4% for the same
period in 1999, while the underwriting expense ratio increased to 31.0% for the
third quarter of 2000 from 26.5% for the same period in 1999. As a result of
these changes, the combined ratio for the quarter ended September 30, 2000,
decreased to 109.1% from 111.9% for the same period in 1999.
Pre-tax net investment income increased 12.4% to $117.7 million for the
quarter ended September 30, 2000, from $104.7 million for the same period in
1999. This increase is primarily attributable to a larger asset base and the
repositioning of the investment portfolio into higher yielding taxable
securities. The Company's after-tax net investment income increased 2.0% to
$78.0 million for the quarter ended September 30, 2000, from $76.5 million for
the same period in 1999.
10
<PAGE>
The Company realized net capital gains of $14.7 million for the quarter
ended September 30, 2000, compared to net capital gains of $16.3 million for the
same period in 1999. The 2000 period included capital gains of $8.5 million on
the sale of bonds and $6.2 million on the sale of common equities. The 1999
period included capital gains of $21.3 million on the sale of common equities,
offset by capital losses of $4.7 million on the sale of bonds.
Other income increased to $6.8 million for the quarter ended September 30,
2000, from $2.9 million for the same period in 1999. This increase was primarily
attributable to an increase in revenues from fee subsidiaries. Other expenses
increased 32.7% to $29.6 million for the third quarter of 2000 from
$22.3 million for the same period in 1999. This increase was primarily
attributable to an increase in overhead costs related to non-underwriting
activities.
Income before income taxes and distributions on preferred securities
increased to $25.9 million for the quarter ended September 30, 2000, from a loss
of $3.4 million for the same period in 1999.
NINE MONTHS ENDED SEPTEMBER 30, 2000, COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1999
The Company's net premiums written increased 6.9% to $2,333.8 million for
the nine months ended September 30, 2000, from $2,182.4 million for the same
period in 1999. This increase is partially attributable to decreased ceded
premiums resulting from long-term changes in the Company's retrocessional
programs.
RiskPartners experienced a 10.9% increase in net premiums written to
$403.1 million for the nine months ended September 30, 2000, from
$363.4 million for the same period in 1999. This increase was primarily
attributable to a $40.9 million increase in RiskPartners' direct business, a
$20.0 million increase in its facultative business, and a $19.8 million increase
in its treaty business, offset by a $41.0 million increase in its finite risk
business. International experienced a 4.5% increase in net premiums written to
$420.5 million for the nine months ended September 30, 2000, from
$402.3 million for the same period in 1999. This increase was primarily
attributable to a $72.2 million increase in International's treaty business,
offset by a $50.5 million decline in its finite risk business. HealthCare
experienced a substantial increase in treaty net premiums written to
$213.9 million for the nine months ended September 30, 2000, from $77.4 million
for the same period in 1999. ARFP experienced an increase in net premiums
written to $47.2 million for the nine months ended September 30, 2000, from
$22.2 million for the same period in 1999. These increases were partially offset
by a 4.5% decrease in DICO's net premiums written to $1,248.9 million for the
nine months ended September 30, 2000, from $1,307.7 million for the same period
in 1999. This decrease was attributable to a $82.7 million decrease in DICO's
finite risk business and a $76.1 million decrease in its treaty business,
partially offset by a $90.3 million increase in facultative writings.
The Company's net premiums earned increased 12.8% to $2,312.8 million for
the nine months ended September 30, 2000, from $2,049.5 million for the same
period in 1999. The increase in premiums earned was primarily attributable to
the increase in net premiums written and the timing of premiums earned on
business in force.
Net losses and LAE incurred increased 20.7% to $1,913.3 million for the nine
months ended September 30, 2000, from $1,585.3 million for the same period in
1999. This increase included provisions for increased losses for the current
accident year to reflect adverse market conditions. The 2000 period also
included additional loss provisions on several contracts, primarily from prior
accident years. By contrast, the Company incurred $59.6 million of catastrophe
losses during the nine months ended September 30, 2000, compared to
$114.0 million incurred during the 1999 period.
Underwriting expense, consisting of commission expense plus operating
expense, increased 16.5% to $738.7 million for the nine months ended
September 30, 2000, from $633.9 million for the same period in 1999. This
increase was due to a 27.7% increase in commission expense to $558.7 million for
11
<PAGE>
the nine months ended September 30, 2000 from $437.5 million for the same period
in 1999. This increase was primarily attributable to the increase in net
premiums earned, in addition to a lower commission ratio on several large,
retrospectively rated contracts in the 1999 period. Operating expenses decreased
8.4% to $180.0 million for the nine months ended September 30, 2000 from
$196.4 million for the nine months ended September 30, 1999, due primarily to a
decrease in overhead costs related to underwriting activities.
The Company experienced an underwriting loss (net premiums earned minus
losses and LAE incurred and underwriting expenses) of $339.2 million for the
nine months ended September 30, 2000, compared to an underwriting loss of
$169.7 million for the same period in 1999. On a GAAP basis, the Company's loss
ratio increased to 82.7% for the nine months ended September 30, 2000 from 77.4%
for the same period in 1999, while the underwriting expense ratio increased to
32.0% for the nine months ended September 30, 2000 from 30.9% for the same
period in 1999. As a result of these changes, the combined ratio for the nine
months ended September 30, 2000, increased to 114.7% from 108.3% for the same
period in 1999.
Pre-tax net investment income increased 7.3% to $336.4 million for the nine
months ended September 30, 2000, from $313.4 million for the same period in
1999. This increase is primarily attributable to a larger asset base and the
repositioning of the investment portfolio into higher yielding taxable
securities. The Company's after-tax net investment income increased slightly to
$232.0 million for the nine months ended September 30, 2000, from
$230.8 million for the same period in 1999.
The Company realized net capital gains of $46.0 million for the nine months
ended September 30, 2000, compared to net capital gains of $74.5 million for the
same period in 1999. The 2000 period included capital gains of $54.1 million on
the sale of common equities, offset by net capital losses of $8.0 million on the
sale of bonds. The 1999 period included capital gains of $5.6 million on the
sale of bonds and $69.8 million on the sale of common equities.
Other income increased 16.2% to $22.9 million for the nine months ended
September 30, 2000, from $19.7 million for the same period in 1999. This
increase was primarily attributable to an increase in revenues from fee
subsidiaries. Other expenses increased 11.0% to $71.5 million for the nine
months ended September 30, 2000 from $64.4 million for the same period in 1999.
The Company experienced a loss before income taxes and distributions on
preferred securities of $37.3 million for the nine months ended September 30,
2000, compared to income of $142.2 million for the same period in 1999.
FINANCIAL CONDITION
Total consolidated assets increased 4.1% to $14,867.1 million at
September 30, 2000, from $14,278.8 million at December 31, 1999. Total
consolidated liabilities increased 4.6% to $12,078.1 million at September 30,
2000, from $11,552.3 million at December 31, 1999.
The total financial statement value of investments and cash increased 4.3%
to $7,762.7 million at September 30, 2000, from $7,439.9 million at
December 31, 1999, primarily due to cash flow from operations for the period.
The financial statement value of the investment portfolio at September 30, 2000,
included a net decrease from amortized cost to fair value of $105.3 million for
debt and equity investments, compared to a net decrease of $161.2 million at
December 31, 1999. At September 30, 2000, the Company recognized a cumulative
unrealized loss of $68.5 million due to the net adjustment to fair value on debt
and equity investments, after applicable income tax effects, which was reflected
in stockholder's equity as a component of accumulated other comprehensive
income. This represents a net increase to stockholder's equity of $36.3 million
from the cumulative unrealized loss on debt and equity securities of
$104.8 million recognized at December 31, 1999.
12
<PAGE>
Common stockholder's equity increased slightly to $2,551.5 million at
September 30, 2000, from $2,489.0 million at December 31, 1999. This increase
was attributable to the net loss of $22.7 million for the nine months ended
September 30, 2000, offset by the $36.3 million unrealized gain on investments
and a $48.9 million unrealized gain on foreign exchange for the period, after
applicable income taxes.
The Company's insurance/reinsurance subsidiaries' statutory surplus
decreased to $2,038.7 million at September 30, 2000, from $2,166.0 million at
December 31, 1999. This decrease was primarily attributable to statutory net
operating losses of $37.9 million for the nine months ended September 30, 2000,
in addition to unrealized losses on investments of $91.7 million. Operating
leverage, as measured by such subsidiaries' premiums-to-surplus ratio, on an
annualized basis was 1.48 to 1 and 1.31 to 1 at September 30, 2000, and
December 31, 1999, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company is an insurance holding company whose only material investment
is in the capital stock of American Re-Insurance. The Company is dependent on
dividends and tax allocation payments, primarily from American Re-Insurance, to
meet its short- and long-term liquidity requirements, including its debt service
obligations.
The Company's cash flow from operations may be influenced by a variety of
other factors, including cyclical changes in the property and casualty
reinsurance market, insurance regulatory initiatives, and changes in general
economic conditions. Liquidity requirements are met on a short- and long-term
basis by funds provided by operations and from the maturity and the sale of
investments. Cash provided by operations primarily consists of premiums
collected, investment income, and reinsurance recoverable balances collected,
less paid claims (including payments made to commute or settle reinsurance
arrangements), retrocession payments, underwriting and interest expenses, QUIPS
distributions, and income tax payments. Cash flows provided by operations for
the Company were $251.8 million for the nine-month period ended September 30,
2000, compared to cash flows used in operation of $31.9 million for the same
period in 1999. The increase in the 2000 period is attributable to increased net
premiums collected, favorable changes in assumed and ceded funds held balances,
and federal income tax refunds received resulting from the net loss recognized
in 1999.
Cash and cash equivalents were $682.2 million and $597.5 million at
September 30, 2000, and December 31, 1999, respectively. Cash and short-term
investments are maintained for liquidity purposes and represented 8.8% and 8.0%,
respectively, of total financial statement investments and cash on such dates.
The increase in the level of cash and cash equivalents reflects a repositioning
of the investment portfolio.
MARKET AND INTEREST RATE RISK
The Company is subject to market risk arising from the potential change in
the value of its various financial instruments. These changes may be due to
fluctuations in interest and foreign exchange rate and equity prices. The major
components of market risk affecting the Company are interest rate, foreign
currency and equity risk.
The Company has both fixed and variable (including mortgage backed
securities and collateralized mortgage obligations) income investments with a
value of $6,656.7 million at September 30, 2000 that are subject to changes in
value due to market interest rates. The Company also has Senior Bank Debt of
$75.0 million, Senior Notes of $498.5 million, and QUIPS of $237.5 million. The
Senior Bank Debt is a variable rate loan, while the Senior Notes and QUIPS are
fixed rate instruments.
The Company has exposure to movements in various currencies around the
world, particularly the British pound, the Euro and the Australian dollar.
Changes in currency exchange rates primarily affect
13
<PAGE>
the international components of the Company's balance sheet, income statement,
and statement of cash flows. This exposure is somewhat offset because the
Company's reinsurance premiums and invested assets are partially offset by
losses incurred and loss reserves, respectively, generally denominated in the
same currency.
In addition to interest rate and foreign exchange risk, the Company's common
equity portfolio of $410.3 million at September 30, 2000 is subject to changes
in value based on changes in equity prices, predominately from the United
States.
In November 1999, American Re Capital Markets, Inc. ("ARCM"), a subsidiary
of the Company, entered into certain index-based catastrophe-related swaps.
Under the terms of the catastrophe swaps, ARCM may receive approximately
$182.1 million of potential payments in the event of three types of certain
catastrophic events: California earthquakes, Midwest earthquakes, or Eastern and
Gulf Coast windstorms. The Company adjusts the catastrophe swaps to fair value
using a model pricing based upon interest rate spreads above comparable U.S.
Treasury investments, applied to a notional value of $182.1 million. The fair
value adjustment at September 30, 2000 was $0.7 million.
SAFE HARBOR DISCLOSURE
The Company has disclosed certain forward-looking statements concerning its
operations, economic performance and financial condition, including, in
particular the likelihood of the Company's success in developing and expanding
its business and the risks related thereto. These statements are based upon a
number of assumptions and estimates that are inherently subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Company, and reflect future business decisions that are subject to change. Some
of these assumptions inevitably will not materialize, and unanticipated events
will occur which will affect the Company's results. Such statements may include,
but are not limited to, projections of premium revenue, investment income, other
revenue, losses, expenses, earnings, cash flows, plans for future operations,
common stockholder's equity, investments, capital plans, dividends, plans
relating to products or services of American Re, estimates concerning the
effects of litigation or other disputes, adverse state or federal legislation or
regulation, adverse publicity or news coverage or changes in general economic
factors as well as the assumptions for any of the foregoing and are generally
expressed with words, such as "believes," "estimates," "expects," "anticipates,"
"plans," "projects," "forecasts," "goals," "could have," "may have" and similar
expressions.
14
<PAGE>
AMERICAN RE CORPORATION
PART II OTHER INFORMATION
ITEMS 1 - 4 HAVE BEEN OMITTED AS THEY ARE EITHER INAPPLICABLE OR THE ANSWER IS
NEGATIVE.
ITEM 5. OTHER INFORMATION.
HOLOCAUST VICTIMS INSURANCE LAWS. Several states (including California,
Maryland, Minnesota, New York, and Washington) have enacted legislation
pertaining to insurance policies that were issued in Europe to Holocaust victims
during the period 1920 through 1945, and legislation on this subject matter is
under consideration in other states (including New Jersey). Insurance regulators
in some of these states have taken actions or threatened to take actions to
sanction insurance companies licensed in such states for alleged failure to
comply with such laws. Most state insurance regulators have subscribed to a
private, non-governmental, voluntary organization named the International
Commission on Holocaust Era Insurance Claims ("Holocaust Commission") that is
dedicated to identifying and resolving outstanding insurance claims from the
Holocaust era for its members. Under some of the recently enacted state laws, an
insurer's participation in the Holocaust Commission confers certain statutory
benefits.
CALIFORNIA. California has two Holocaust era insurance related statutes.
The first purports to permit the suspension of an insurer's license if it or any
of its affiliates has failed to pay any claim of Holocaust victims proven to be
valid and unpaid. This statute also authorizes the Commissioner to include
consideration of whether an insurer is participating in the Holocaust Commission
in deciding whether to suspend the insurer's license. In July, 1999, the
California Insurance Department ("CID") initiated an examination and hearing
involving the Company's California licensed insurers and Munich Re in order to
investigate whether these companies or affiliated companies in Europe had
outstanding Holocaust era insurance claims. While the licensees named in the
examination and hearing process either were not in existence or did not do
business in Europe during the Holocaust era, and Munich Re, as a reinsurer,
never issued any insurance policies, the CID sought information on Holocaust era
insurance from European insurers in which Munich Re has an indirect investment
interest. The hearing and examination are pending.
The second California statute is the Holocaust Victim Insurance Relief Act
of 1999 ("California Registry Law") designed to create a publicly accessible
registry of Holocaust era policyholder information. The California Registry Law
requires California licensed insurers to report Holocaust era policyholder
information in their possession or in the possession of their "related
companies," as that term is defined in the California Registry Law. The CID
interprets this statute to require information even from companies that are not
controlled by the licensed insurers or their parent companies. In March 2000,
American Re-Insurance and the American Insurance Association, an insurance trade
association, many of whose members are California licensed insurers, initiated
litigation in California challenging the validity of the California Registry Law
on constitutional and other grounds. In June 2000, the U.S. District Court for
the Eastern District of California issued a preliminary injunction against the
CID from enforcing the California Registry Law. The CID has appealed the
decision to the United States Court of Appeals for the 9th Circuit.
FLORIDA. Florida has enacted a statute ("Florida Holocaust Law") that seeks
reports of information on Holocaust era insurance. The Florida Holocaust Law
requires Florida licensed insurers to report certain information on insurance
policies issued in Europe during the Holocaust era by such licensees and their
affiliates. American Re-Insurance and American Alternative have no information
to report because they did not issue insurance policies in Europe during the
relevant time period. However, the companies have timely filed reports
disclosing information voluntarily provided by European insurers in which Munich
Re has an investment interest. The Florida Insurance Department
15
<PAGE>
AMERICAN RE CORPORATION
has issued subpoenas to American Re-Insurance, American Alternative, and
approximately 40 other insurance companies seeking policyholder information in
connection with the Florida Holocaust Law. An unaffiliated company initiated
litigation against the Florida Insurance Department challenging the validity of
the subpoenas and the constitutionality of the Florida Holocaust Law. That
litigation is pending.
NEW YORK. New York has enacted a statute ("New York Holocaust Law") similar
to the Florida Holocaust Law. American Re-Insurance and American Alternative
timely filed reports responsive to the New York Holocaust Law disclosing
information voluntarily provided by European insurers in which Munich Re has an
investment interest. The New York Insurance Department subsequently requested
additional information in connection with Holocaust era insurance, and American
Re promptly forwarded these requests to the European insurers which responded
directly to the Department. Notwithstanding this, the Department has threatened
to attempt to fine American Re up to $1,000 per day for alleged reporting
violations unless Munich Re joins the Holocaust Commission, or agrees to pay
alleged Holocaust claims involving companies that Munich Re does not control, or
contributes to a humanitarian fund for the benefit of Holocaust survivors, and
American Re-Insurance has received a letter from the Department's Disciplinary
Unit that disciplinary action against American Re-Insurance and/or its officers
is being considered. However, no formal action has been taken by the Department
to date.
WASHINGTON. Washington has enacted a statute similar to the California
Registry Law. American Re-Insurance and American Alternative have reported to
the Washington Insurance Department that they have nothing to report under the
statute. The Department has asserted that the companies' report is not in
compliance with the law and has indicated that it may initiate enforcement
action against American Re, although no action has been commenced to date.
* * * * *
American Re believes that it has fully complied with the requirements of
these statutes. However, there can be no assurance that insurance regulators
will not initiate administrative or other actions against American Re under
these laws. American Re does not believe that the ultimate resolution of these
matters will have a material adverse effect on the business, financial condition
or results of operations of American Re and its subsidiaries taken as a whole.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27--Financial Data Schedule is filed as part of this report.
16
<PAGE>
AMERICAN RE CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<CAPTION>
AMERICAN RE CORPORATION
(Registrant)
<S> <C>
/s/ GEORGE T. O'SHAUGHNESSY, JR.
--------------------------------------------
George T. O'Shaughnessy, Jr.
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL AND ACCOUNTING OFFICER
</TABLE>
Dated: November 14, 2000
