Segment Information

12 Months Ended

Dec. 31, 2019

SEGMENT INFORMATION

The Company has geographic-based and business-based operational segments. Geographic-based operations are further segmented into traditional and financial solutions businesses.

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, financial reinsurance, and capital solutions 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, and to a lesser extent 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 provides capital solutions to assist clients in meeting applicable regulatory requirements while enhancing their financial strength and regulatory surplus position through financial reinsurance and other capital solutions 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 revenues primarily include investment income from unallocated invested assets, investment related gains and losses and service fees. Corporate and Other expenses consist of the offset to capital charges allocated to the operating segments within the policy acquisition costs and other insurance income line item, unallocated overhead and executive costs, interest expense related to debt, and the investment income and expense associated with the Company’s collateral finance and securitization transactions and service business expenses. Additionally, Corporate and Other includes results from certain wholly-owned subsidiaries, such as RGAx, and joint ventures that, among other activities, develop and market technology, and provide consulting and outsourcing solutions for the insurance and reinsurance industries. In the past two years, the Company has increased its investment and expenditures in this area in an effort to both support its clients and generate new future revenue streams.

The accounting policies of the segments are the same as those described in Note 2 – “Significant Accounting Policies and Pronouncements.” 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 millions):



For the years ended December 31,	2019		2018		2017
Revenues:
U.S. and Latin America:
Traditional	$	6,500	$	6,296	$	6,100
Financial Solutions	1,279		907		1,151
Total	7,779		7,203		7,251
Canada:
Traditional	1,286		1,224		1,103
Financial Solutions	99		49		49
Total	1,385		1,273		1,152
Europe, Middle East and Africa:
Traditional	1,520		1,495		1,362
Financial Solutions	450		350		311
Total	1,970		1,845		1,673
Asia Pacific:
Traditional	2,681		2,417		2,210
Financial Solutions	228		54		74
Total	2,909		2,471		2,284
Corporate and Other	257		84		156
Total	$	14,300	$	12,876	$	12,516



For the years ended December 31,	2019			2018			2017
Income (loss) before income taxes:
U.S. and Latin America:
Traditional	$	265		$	286		$	373
Financial Solutions	398			251			402
Total	663			537			775
Canada:
Traditional	168			112			120
Financial Solutions	15			10			17
Total	183			122			137
Europe, Middle East and Africa:
Traditional	80			55			70
Financial Solutions	223			197			124
Total	303			252			194
Asia Pacific:
Traditional	105			178			149
Financial Solutions	23			(6		)	13
Total	128			172			162
Corporate and Other	(145		)	(237		)	(125		)
Total	$	1,132		$	846		$	1,143



For the years ended December 31,	2019		2018		2017
Interest expense:
Corporate and Other	$	173	$	147	$	146
Total	$	173	$	147	$	146



For the years ended December 31,	2019		2018		2017
Depreciation and amortization:
U.S. and Latin America:
Traditional	$	291	$	273	$	285
Financial Solutions	143		95		209
Total	434		368		494
Canada:
Traditional	20		22		24
Financial Solutions	—		—		—
Total	20		22		24
Europe, Middle East and Africa:
Traditional	56		45		35
Financial Solutions	1		—		—
Total	57		45		35
Asia Pacific:
Traditional	60		115		114
Financial Solutions	16		2		1
Total	76		117		115
Corporate and Other	22		22		38
Total	$	609	$	574	$	706

The table above includes amortization of DAC, including the effect from investment related gains and losses.



For the years ended December 31,	2019		2018
Assets:
U.S. and Latin America:
Traditional	$	19,353	$	19,236
Financial Solutions	25,117		19,870
Total	44,470		39,106
Canada:
Traditional	4,361		4,201
Financial Solutions	64		154
Total	4,425		4,355
Europe, Middle East and Africa:
Traditional	4,032		3,643
Financial Solutions	6,502		4,738
Total	10,534		8,381
Asia Pacific:
Traditional	6,800		5,681
Financial Solutions	2,557		1,181
Total	9,357		6,862
Corporate and Other	7,945		5,831
Total	$	76,731	$	64,535

Companies in which the Company 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 and other revenues on a consolidated basis in 2019, 2018 and 2017. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.