A.M. Best Affirms Ratings of Reinsurance Group of America, Incorporated and Its Subsidiaries

  A.M. Best Affirms Ratings of Reinsurance Group of America, Incorporated and
  Its Subsidiaries

Business Wire

OLDWICK, N.J. -- January 31, 2013

A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and
issuer credit ratings (ICR) of “aa-” of RGA Reinsurance Company (St. Louis,
MO) and RGA Life Reinsurance Company of Canada (Montreal, Canada). A.M. Best
also has affirmed the ICR of “a-” and all ratings on the existing debt
securities and indicative shelf ratings of Reinsurance Group of America,
Incorporated (RGA) (St. Louis, MO) [NYSE: RGA]. The outlook for all ratings is
stable. (See below for a detailed listing of the companies and ratings.)

The ratings of RGA and its two core North American insurance subsidiaries are
based upon its stable risk-adjusted capitalization, favorable GAAP earnings
trends, including those recorded through the third quarter of 2012 and strong
franchise in the global reinsurance market. Earnings are primarily driven by
both its U.S. and Canadian traditional (mortality) segments. The group’s
business profile is expanding from the continued growth and diversification
benefits it derived from its international market segment along with the
recent expansion of its U.S. based asset intensive business. RGA maintains a
leadership position in the reinsurance marketplace, utilizing its technology
infrastructure to provide facultative services to its client base. RGA
continues to be recognized favorably in industry surveys and has a
well-developed enterprise risk management program.

Offsetting rating factors include the potential challenges in the highly
competitive and consolidating reinsurance marketplace as reflected in
declining cession rates in RGA’s U.S. market and a business profile, which is
dependent on the utilization of operating leverage to secure reserve credits
for noneconomic Regulation AXXX and XXX reserves. With cession rates on the
decline in the U.S. marketplace, RGA has been able to capitalize on growth in
the international marketplace despite global economic challenges and some
recent adverse mortality and morbidity experience within its Asia Pacific
business segment. Low interest rates could pressure RGA’s balance sheet and
earnings, particularly in its asset intensive segment.

A.M. Best views RGA’s debt servicing capabilities favorably, with cash flows
supported by its consistently profitable operations and its financial leverage
ratios remain within A.M. Best’s guidelines for its current ratings. RGA also
maintains strong overall liquidity.

The company is well positioned at its current rating level. Key rating factors
that could result in negative rating actions include a sustained decline in
RGA and its subsidiaries risk-adjusted capital and /or operating performance
or a material adverse change in RGA’s market leadership position in its core
reinsurance markets.

The following debt ratings have been affirmed:

Reinsurance Group of America, Inc—
- “a-” on $300 million 5.625% senior unsecured notes, due 2017
- “a-” on $400 million 6.45% senior unsecured notes, due 2019
- “a-” on $400 million 5% senior unsecured notes, due 2021
-“bbb+” on $400 million 6.2% fixed to floating subordinated debentures, due
2042
- “bbb” on $400 million 6.75 % fixed to floating junior subordinated
debentures, due 2065

The following indicative ratings available under shelf registration have been
affirmed:

Reinsurance Group of America, Inc—
- “a-” on senior debt
- “bbb+” on subordinated debt
- “bbb” on preferred stock

RGA Capital Trust III and IV
“bbb” on trust preferred securities

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
visit www.ambest.com.

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contact:

A.M. Best Co.
Louis Savarese, 908-439-2200, ext. 5168
Senior Financial Analyst
louis.savarese@ambest.com
or
Rosemarie Mirabella, 908-439-2200, ext. 5892
Managing Senior Financial Analyst
rosemariemirabella@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
 
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