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Reinsurance Group of America Inc. (RGA - Analyst Report) 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 billion.
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 policy benefits.

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 year.  

Quarterly Segment Update
U.S. Operations: 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.
Canada Operations: 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 million.
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.
Financial Update
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.
Dividend Update
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.

Other Stocks

While Reinsurance Group retains a Zacks Rank #3 (Hold), other better-ranked stocks worth considering are Aspen Insurance Holdings Ltd. (AHL - Snapshot Report), Endurance Specialty Holdings Ltd. (ENH - Snapshot Report) and Navigators Group Inc. (NAVG - Snapshot Report). All these companies with a Zacks Rank #1 (Strong Buy) are due to release their fourth-quarter and full year earnings in early February.

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