RGA Q3 profits slump 67%

by David Masters

Story link: RGA Q3 profits slump 67%

Reinsurance Group of America (RGA), a leading international life reinsurance provider, has reported its results for the third quarter, with profit down 67% on year.

Net income for the three months ending 30th September was $25.2 million, or $0.40 per diluted share. This is compared to $76.5 million, or $1.19 per diluted share, in the third quarter of 2007.

This fall occurred despite revenues increasing 5.6%

The company blamed the fall on profit on $99.8 million in pre-tax net investment losses, including impairments.

These losses were largely associated with RGA’s investment in the financial services sector, including its stakes in the failed Lehman’s Brother’s bank and the struggling American International Group.

After tax the losses were $75.4 million, equivalent to 3% of stakeholder’s equity.

Troubled investments were partly off-set by an increase in revenues to $1.3 billion, compared to $1.23 billion in the same period last year.

Operating income increased to $118.5 million, or $1.86 per diluted share, up from $95.6 million, or $1.49 per diluted share in the year ago quarter.

President and Chief Executive, Greig Woodring, said an ‘aggressive stance’ has helped to see the company safely through the recent ‘extraordinary events’ on the global financial markets.