RGA grows but profits decline

Reinsurance Group of America (RGA) reported increased net premiums written in 2013 enjoying growth of 4.4 percent but the business’s profitability declined partly thanks to increased claim liabilities in its Australian business.

RGA’s net premiums written grew to $8.2 billion in 2013 compared with $7.9 billion in 2012. Its 2013 net income totalled $418.8 million, or $5.78 per diluted share, a 33 percent decrease from $631.9 million, or $8.52 per diluted share, in 2012. Its operating income decreased to $358.4 million, or $4.95 per diluted share, from $516.4 million, or $6.96 per diluted share, the year before.

The company said that excluding the $184 million after-tax increase in Australian claim liabilities during the second quarter of 2013, operating income per diluted share increased eight percent over 2012. Net foreign currency fluctuations also reduced 2013 operating income per share by $0.03.

Greig Woodring, president and chief executive officer, said: “Along with a very good third quarter, we finished the second half of 2013 on a high note, and have good momentum heading into 2014. Aside from the aforementioned second-quarter charge in Australia, full-year results were relatively strong in 2013, including record revenues in excess of $10 billion. Our ending book value per share for the quarter was $83.87 including AOCI, and $69.66 excluding AOCI.

“We will continue to execute our capital management strategy, which includes constant evaluation of opportunistic share repurchases along with block acquisition opportunities. We have more than $600 million in deployable, excess capital. We did not repurchase shares during the fourth quarter, leaving $138.7 million of capacity remaining under our current $400 million share repurchase authorisation. We will continue to evaluate the level of that authorization along with other capital deployment strategies.”