Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company has geographic-based and business-based operational segments. Geographic-based operations are further segmented into traditional and financial solutions businesses. In the fourth quarter of 2016, the Company changed the name of its Non-Traditional segments to Financial Solutions. The name change better aligns external reports to internally used terminology. This name change does not affect any previously reported results for the Financial Solutions segments. The Company’s reporting segments are as follows:

The U.S. and Latin America Traditional segment provides individual and group life and health reinsurance to domestic clients for a variety of products through yearly renewable term agreements, coinsurance, and modified coinsurance. The U.S. and Latin America Financial Solutions segment includes asset-intensive products that concentrate on the investment risk within underlying annuities and corporate-owned life insurance policies, and financial reinsurance that assists ceding companies in meeting applicable regulatory requirements while enhancing their financial strength and regulatory surplus position.

The Canada Traditional segment is primarily engaged in individual life reinsurance, as well as creditor, group life and health, critical illness and disability reinsurance, through yearly renewable term and coinsurance agreements. The Canada Financial Solutions segment concentrates on assisting clients with longevity risk transfer structures within underlying annuities and pension benefit obligations, and on assisting clients in meeting applicable regulatory requirements while enhancing their financial strength and regulatory surplus position through financial reinsurance structures.

The Europe, Middle East and Africa Traditional segment provides individual and group life and health products through yearly renewable term and coinsurance agreements, reinsurance of critical illness coverage that provides a benefit in the event of the diagnosis of a pre-defined critical illness and underwritten annuities. The Europe, Middle East and Africa Financial Solutions segment provides longevity, asset-intensive and financial reinsurance. Longevity reinsurance takes the form of closed block annuity reinsurance and longevity swap structures.

The Asia Pacific Traditional segment provides individual and group life and health reinsurance, critical illness coverage, disability and superannuation through yearly renewable term and coinsurance agreements. The Asia Pacific Financial Solutions segment provides financial reinsurance, asset-intensive and certain disability and life blocks.

Corporate and Other operations include investment income from invested assets not allocated to support segment operations and proceeds from the Company’s capital-raising efforts that have not been deployed yet, in addition to investment related gains or losses. Additionally, Corporate and Other includes results associated with the Company’s collateral finance and securitization notes and results from certain wholly-owned subsidiaries and joint ventures that, among other activities, develop and market technology solutions for the insurance industry.

The accounting policies of the segments are the same as those described in Note 2 – “Summary of Significant Accounting Policies.” The Company measures segment performance primarily based on profit or loss from operations before income taxes. There are no intersegment reinsurance transactions and the Company does not have any material long-lived assets.

The Company allocates capital to its segments based on an internally developed economic capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model considers the unique and specific nature of the risks inherent in the Company’s businesses. As a result of the economic capital allocation process, a portion of investment income is attributed to the segments based on the level of allocated capital. In addition, the segments are charged for excess capital utilized above the allocated economic capital basis. This charge is included in policy acquisition costs and other insurance expenses.

Information related to revenues, income (loss) before income taxes, interest expense, depreciation and amortization, and assets of the Company’s operations are summarized below (dollars in thousands).

For the years ended December 31,	2016		2015		2014
Revenues:
U.S. and Latin America:
Traditional	$	5,964,968	$	5,465,026	$	5,283,268
Financial Solutions	840,446		643,865		1,014,143
Total	6,805,414		6,108,891		6,297,411
Canada:
Traditional	1,118,004		1,023,012		1,153,515
Financial Solutions	46,938		45,034		28,350
Total	1,164,942		1,068,046		1,181,865
Europe, Middle East and Africa:
Traditional	1,195,149		1,190,742		1,235,049
Financial Solutions	340,518		286,666		322,798
Total	1,535,667		1,477,408		1,557,847
Asia Pacific:
Traditional	1,771,150		1,638,357		1,686,436
Financial Solutions	63,382		56,581		70,282
Total	1,834,532		1,694,938		1,756,718
Corporate and Other	180,956		68,895		110,353
Total	$	11,521,511	$	10,418,178	$	10,904,194

For the years ended December 31,	2016			2015			2014
Income (loss) before income taxes:
U.S. and Latin America:
Traditional	$	371,101		$	235,771		$	351,645
Financial Solutions	283,380			207,963			302,944
Total	654,481			443,734			654,589
Canada:
Traditional	134,705			124,175			95,435
Financial Solutions	7,945			13,902			6,265
Total	142,650			138,077			101,700
Europe, Middle East and Africa:
Traditional	30,059			48,410			60,305
Financial Solutions	138,007			108,445			101,337
Total	168,066			156,855			161,642
Asia Pacific:
Traditional	113,928			105,654			90,602
Financial Solutions	4,063			19,619			11,693
Total	117,991			125,273			102,295
Corporate and Other	(39,242		)	(119,144		)	(11,693		)
Total	$	1,043,946		$	744,795		$	1,008,533

For the years ended December 31,	2016		2015		2014
Interest expense:
Corporate and Other	$	137,623	$	142,863	$	96,700
Total	$	137,623	$	142,863	$	96,700

For the years ended December 31,	2016		2015		2014
Depreciation and amortization:
U.S. and Latin America:
Traditional	$	271,732	$	218,974	$	558,404
Financial Solutions	155,560		44,275		232,348
Total	427,292		263,249		790,752
Canada:
Traditional	22,170		23,887		204,229
Financial Solutions	11		—		—
Total	22,181		23,887		204,229
Europe, Middle East and Africa:
Traditional	46,562		60,193		57,291
Financial Solutions	72		—		—
Total	46,634		60,193		57,291
Asia Pacific:
Traditional	45,562		31,955		94,763
Financial Solutions	1,492		217		409
Total	47,054		32,172		95,172
Corporate and Other	13,894		16,495		3,644
Total	$	557,055	$	395,996	$	1,151,088

The table above includes amortization of DAC, including the effect from investment related gains and losses. During 2015, the Company enhanced its process to track certain DAC components. See Note 8 - “Deferred Policy Acquisition Costs” for additional information.

For the years ended December 31,	2016		2015
Assets:
U.S. and Latin America:
Traditional	$	18,140,825	$	16,554,509
Financial Solutions	13,712,106		13,405,878
Total	31,852,931		29,960,387
Canada:
Traditional	3,846,682		3,604,344
Financial Solutions	85,405		27,543
Total	3,932,087		3,631,887
Europe, Middle East and Africa:
Traditional	2,559,124		2,757,593
Financial Solutions	3,876,131		4,162,703
Total	6,435,255		6,920,296
Asia Pacific:
Traditional	3,968,081		3,227,530
Financial Solutions	676,281		742,528
Total	4,644,362		3,970,058
Corporate and Other	6,233,244		5,900,524
Total	$	53,097,879	$	50,383,152

Companies in which RGA has significant influence over the operating and financing decisions but are not required to be consolidated, are reported on the equity basis of accounting. The equity in the net income of such investments is not material to the results of operations or financial position of individual segments or the Company taken as a whole. Capital expenditures of each reporting segment were immaterial in the periods noted.

No individual client generated 10% or more of the Company’s total gross premiums on a consolidated basis in 2016, 2015 and 2014. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.