Reinsurance Group of America Inc.
) reported fourth-quarter 2013 operating income of $2.17 per
share, significantly exceeding the Zacks Consensus Estimate of
$1.96. Results were, however, down 11.1% year over year.
Total revenue of $2.74 billion increased 1.5% year over year and
was slightly ahead of the Zacks Consensus Estimate of $2.73
Total premium of $2.2 billion rose 1.5% year over year.
Total benefits and expense of Reinsurance Group escalated 4.4%
year over year to $2.51 billion due to higher interest credited
claims, higher interest expense and increased claims and other
Full year Update
For full year 2013, Reinsurance Group's core operating earnings
of $4.95 exceeded the Zacks Consensus Estimate of $4.74 per share
but fell 28.9% year over year.
Full year total revenue was $10.32 billion, which beat the Zacks
Consensus Estimate of $10.1 billion and improved 4.9% year over
Quarterly Segment Update
: The U.S. Traditional sub-segment net premium written increased
year over year by 6.6% to $1.24 billion. However, the segment's
underwriting profitability suffered, as reflected by pre-tax
operating income which declined 13.1% due to unfavorable
mortality experience relative to the year-ago quarter.
Another sub segment - the U.S. Asset Intensive business reported
pre-tax operating income of $42.3 million, up 3.7% year over year
driven by strong equity markets and favorable credit spreads.
Pretax operating income in the U.S. Financial Reinsurance
business was $14.3 million, up 68.2% year over year.
: Pre-tax operating income was $47.2 million, down 12.6% year
over year. The results in the year-ago period benefited from
$16.2 million of pre-tax reserve development.
Asia Pacific Operations
: Pre-tax operating income was $27.0 million, up 3 times year
over year. Net premiums increased 3% year over year to $372.7
Europe & South Africa Operations
: The segment reported pre-tax operating income of $14.3 million,
flat with the year-ago quarter. Net premiums decreased 10.9% year
over year to $358.6 million, led by adverse currency effect.
As of Dec 31, 2013, Reinsurance Group had assets worth $39.67
billion, down 1.7% year over year.
As of Dec 31, 2013, book value, a measure of the company's net
worth was $69.66 up 7.3% year over year.
Reinsurance Group declared a regular quarterly dividend of 30
cents per share to be paid on Mar 7, 2014.
Guidance for 2014
Over the medium term, Reinsurance Group targets growth in
operating income per share in the 5% to 8% range, and operating
return on equity of 11% to 12%. The company also expects to
deploy $200 million to $400 million of excess capital, on
average, annually. In 2014, the company expects tax rate to
decline to 34% from 35% currently which reflects a slight shift
in earnings contribution from lower tax rate jurisdictions.
While Reinsurance Group retains a Zacks Rank #3 (Hold), other
better-ranked stocks worth considering are
Aspen Insurance Holdings Ltd.
Endurance Specialty Holdings Ltd.
Navigators Group Inc.
). All these companies with a Zacks Rank #1 (Strong Buy) are due
to release their fourth-quarter and full year earnings in early
ASPEN INS HLDGS (AHL): Free Stock Analysis
ENDURANCE SPLTY (ENH): Free Stock Analysis
NAVIGATORS GRP (NAVG): Free Stock Analysis
REINSURANCE GRP (RGA): Free Stock Analysis
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