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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 23, 1997
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Reinsurance Group of America, Incorporated
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(Exact Name of Registrant as Specified in Its Charter)
Missouri
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(State or Other Jurisdiction of Incorporation)
1-11848 43-1627032
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(Commission File Number) (I.R.S. Employer Identification No.)
660 Mason Ridge Center Drive, St. Louis, Missouri 63141
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(Address of Principal Executive Offices) (Zip Code)
(314) 453-7300
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On July 23, 1997, the Board of Directors declared a 3-for-2 stock split
of the registrant's Common Stock. The stock split will be in the form of a
stock dividend payable August 29, 1997 to stockholders of record on August 8,
1997. Fractional share interests will be settled in cash. As a result of the
stock split, the number of shares outstanding will increase from 16,936,996
(as of July 28, 1997) to approximately 25,405,000. The Board also declared a
quarterly cash dividend on post-split shares of $0.06 per share, payable
August 29, 1997 to stockholders of record on August 8, 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 99.1 - Press Release dated July 24, 1997.
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 hereunto duly authorized.
REINSURANCE GROUP OF AMERICA, INCORPORATED
Date: July 28, 1997 By: /s/ Jack B. Lay
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Jack B. Lay
Executive Vice President and Chief
Financial Officer
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<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<C> <S>
99.1 Press Release dated July 24, 1997
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[letterhead of RGA]
NEWS
For further information, contact
Jack B. Lay
Executive Vice President and
Chief Financial Officer
314/453-7439
FOR IMMEDIATE RELEASE
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REINSURANCE GROUP OF AMERICA REPORTS 15 PERCENT GAIN
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IN SECOND QUARTER OPERATING EARNINGS;
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3-FOR-2 STOCK SPLIT, DIVIDEND INCREASE
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ST. LOUIS, July 24, 1997 - Reinsurance Group of America, Incorporated
(NYSE:RGA) reported second quarter operating income rose 15 percent, to $14.8
million, or $0.86 per share, from $12.8 million, or $0.75 per share, the year
before. Second quarter earnings, including realized capital gains and
losses, increased 12 percent, to $0.88 per share from $0.79 per share the
year before.
At the same time, the company announced that the board of directors
increased the quarterly dividend and declared a 3-for-2 stock split to
shareholders of record August 8. The dividend, which will total $0.06 per
share after the split and will be payable August 29, represents a 13-percent
increase over the previous dividend rate.
On a post-split basis, the company's operating income represents $0.57 per
share for the quarter, compared with $0.50 for 1996. Reported earnings on a
post-split basis, including realized capital gains and losses, total $0.58
per share compared with $0.53 for 1996.
Net premiums increased 23 percent, to $201.6 million, from $163.4 million
in 1996. Net investment income increased 39 percent, to $46.0 million from
$33.1 million, as the company's asset base continued to expand, due in part
to further growth of asset-intensive reinsurance arrangements. Total
revenues increased 26 percent, to $252.9 million, from $201.5 million in
1996.
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Add One
A. Greig Woodring, president and chief executive officer, commented, "The
second quarter results, from the standpoint of premiums, total revenues and
operating earnings, continued well-established growth trends. Our U.S.
operations exhibit solid growth as the market continues to present a number
of niche opportunities in addition to traditional reinsurance. Revenues for
the U.S. operating segment increased 15 percent over the second quarter of
1996, and 18 percent for the year-to-date. We expect continued growth in the
U.S. reinsurance market."
Woodring also noted, "Other segments of our operations also reported
encouraging results. Premiums grew at a 12 percent rate in the Canadian
segment compared with the second quarter of 1996, and almost 26 percent for
the year-to-date. Other international operations, consisting of our Latin
American and Asia Pacific businesses, had a premium increase of $15.3 million
for the quarter, and $25.7 million for the year. Those increases primarily
reflected higher annuity production in Chile and a gradual increase in
several Asian markets, including the Australian operation initiated in 1996.
The Latin American operations produced a modest profit, while operations in
the Asia Pacific region are still operating below the break-even level. In
addition, our accident and health segment produced a slight profit on
premiums of $36.6 million."
Woodring further observed, "The company's consolidated earnings were
generally in line with our operating plan, as were policy lapses and
allowance levels. The mortality experience was moderately higher than we
would have anticipated, although we believe this reflects a normal
fluctuation. Quote activity and other business opportunities continue at
strong levels, and we remain optimistic regarding our ongoing growth
prospects. As a result, we are in a position to increase our dividend for
the third year in a row. Additionally, the company's stock repurchase
program, suspended briefly in anticipation of its earnings announcement, will
be re-activated."
First-half operating earnings rose to $27.7 million, from $23.0 million
a year ago. These results exclude the $10.4 million after-tax, nonoperating
charge taken in the first quarter of 1997 in connection with the company's
decision to exit all accident and health pools in which it didn't control the
underwriting process. Pre-split operating earnings per share increased 19
percent, to $1.61 from $1.35. On a post-split basis, first-half operating
earnings per share total $1.07 compared with $0.90 in the first half of 1996.
For the first half, revenues increased $102.8 million, or 26 percent,
and net premiums rose $75.6 million, or 23 percent. Investment income
totaled $87.8 million, an increase of 44 percent over the first half of 1996.
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Add Two
Reinsurance Group of America, Incorporated, through its U.S. and
Canadian subsidiaries, RGA Reinsurance Company and RGA Life Reinsurance
Company of Canada, is among the largest providers of life reinsurance in
North America. In addition to its North American operations, Reinsurance
Group of America, Incorporated has subsidiary companies or branch offices in
Argentina, Australia, Barbados, Bermuda, Chile, Hong Kong, Japan and the
United Kingdom. Worldwide, it has more than $182 billion of life reinsurance
in force. General American Life Insurance Company owns approximately 63
percent of RGA's outstanding shares.
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Add Three
<TABLE>
REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
<CAPTION>
($ in thousands, except per share data)
Three Months Ended Six Months Ended
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(Unaudited) June 30, June 30,
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1997 1996 1997 1996
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Revenues:
Net premiums $201,568 $163,423 $406,940 $331,315
Net investment income 45,995 33,050 87,844 60,925
Realized capital gains 532 1,233 919 1,795
Other income 4,836 3,785 8,991 7,878
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Total revenue 252,931 201,491 504,694 401,913
Benefits and Expenses:
Policyholder benefits 129,813 104,367 241,124 202,202
Accident and health
pool charge --- --- 18,000 ---
Policy reserve increases 37,170 33,200 103,741 79,050
Underwriting, acquisition
and insurance expenses 47,801 30,621 88,268 61,046
Other expenses 12,210 9,747 22,729 18,740
Interest expense 1,956 1,948 3,904 2,239
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Total benefits and
expenses 228,950 179,883 477,766 363,277
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Income before taxes and
minority interest 23,981 21,608 26,928 38,636
Income taxes 8,757 7,998 8,756 14,247
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Income before minority
interest 15,224 13,610 18,172 24,389
Minority interest 129 150 249 393
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Net income $ 15,095 $ 13,460 $ 17,923 $ 23,996
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Earnings per share information
(Pre-stock split):
Earnings per common and
common equivalent share
before net realized
investment gains: 0.86 0.75 1.01 1.35
Earnings per common and
common equivalent share: 0.88 0.79 1.04 1.41
Weighted average number of
common and common equivalent
shares outstanding
(in thousands) 17,186 17,004 17,169 16,994
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Income
($ in thousands, except per share data)
Three Months Ended Six Months Ended
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(Unaudited) June 30, June 30,
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1997 1996 1997 1996
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Earnings per share information
(Post-stock split):
Earnings per common and
common equivalent share
before net realized
investment gains 0.57 0.50 0.67 0.90
Earnings per common and
common equivalent share: 0.58 0.53 0.70 0.94
Weighted average number of
common and common
equivalent shares
outstanding (in thousands) 25,779 25,506 25,754 25,491
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Add Five
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REINSURANCE GROUP OF AMERICA, INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Business Summary
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Six Months Ended
(Unaudited) June 30,
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1997 1996
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Gross life reinsurance in force (in billions)
North American business $172.0 $148.9
International business 10.5 10.6
Gross life reinsurance written (in billions)
North American business 20.7 13.6
International business 1.2 2.6
Consolidated cash and invested assets
(in millions) 2,598.5 1,932.3
Invested asset yield 7.26% 7.31%
Investment portfolio mix
Cash and short-term investments 2.88% 3.21%
Fixed maturity securities 69.88% 69.23%
Mortgage loans 4.35% 1.25%
Policy loans 16.33% 19.62%
Funds withheld at interest 6.08% 6.49%
Other invested assets 0.48% 0.20%
Pre-stock split:
Book value per share outstanding $25.99 $22.14
Book value per share outstanding, before
impact of FAS 115 23.99 21.73
Treasury stock at June 30 429,254 536,454
Post-stock split:
Book value per share outstanding 17.33 14.76
Book value per share outstanding, before
impact of FAS 115 15.99 14.49
Treasury stock at June 30 643,881 804,681
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