Segment Information

12 Months Ended

Dec. 31, 2020

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.

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. The Company has increased its investment and expenditures in this area in an effort to both support its clients and accelerate the development of new solutions and services to increase consumer engagement within the life industry.

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,	2020		2019		2018
Revenues:
U.S. and Latin America:
Traditional	$	6,560	$	6,500	$	6,296
Financial Solutions	1,220		1,279		907
Total	7,780		7,779		7,203
Canada:
Traditional	1,260		1,286		1,224
Financial Solutions	92		99		49
Total	1,352		1,385		1,273
Europe, Middle East and Africa:
Traditional	1,633		1,520		1,495
Financial Solutions	471		450		350
Total	2,104		1,970		1,845
Asia Pacific:
Traditional	2,806		2,681		2,417
Financial Solutions	309		228		54
Total	3,115		2,909		2,471
Corporate and Other	245		257		84
Total	$	14,596	$	14,300	$	12,876

For the years ended December 31,	2020		2019		2018
Income (loss) before income taxes:
U.S. and Latin America:
Traditional	$	(298)	$	265	$	286
Financial Solutions	295		398		251
Total	(3)		663		537
Canada:
Traditional	134		168		112
Financial Solutions	21		15		10
Total	155		183		122
Europe, Middle East and Africa:
Traditional	27		80		55
Financial Solutions	258		223		197
Total	285		303		252
Asia Pacific:
Traditional	174		105		178
Financial Solutions	59		23		(6)
Total	233		128		172
Corporate and Other	(117)		(145)		(237)
Total	$	553	$	1,132	$	846

For the years ended December 31,	2020		2019		2018
Interest expense:
Corporate and Other	$	170	$	173	$	147
Total	$	170	$	173	$	147

For the years ended December 31,	2020		2019		2018
Depreciation and amortization:
U.S. and Latin America:
Traditional	$	291	$	291	$	273
Financial Solutions	90		143		95
Total	381		434		368
Canada:
Traditional	24		20		22
Financial Solutions	—		—		—
Total	24		20		22
Europe, Middle East and Africa:
Traditional	46		56		45
Financial Solutions	1		1		—
Total	47		57		45
Asia Pacific:
Traditional	94		60		115
Financial Solutions	20		16		2
Total	114		76		117
Corporate and Other	23		22		22
Total	$	589	$	609	$	574

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

For the years ended December 31,	2020		2019
Assets:
U.S. and Latin America:
Traditional	$	20,071	$	19,353
Financial Solutions	25,433		25,117
Total	45,504		44,470
Canada:
Traditional	4,682		4,361
Financial Solutions	13		64
Total	4,695		4,425
Europe, Middle East and Africa:
Traditional	4,763		4,032
Financial Solutions	7,292		6,502
Total	12,055		10,534
Asia Pacific:
Traditional	8,197		6,800
Financial Solutions	4,299		2,557
Total	12,496		9,357
Corporate and Other	9,906		7,945
Total	$	84,656	$	76,731

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 2020, 2019 and 2018. For the purpose of this disclosure, companies that are within the same insurance holding company structure are combined.