Good day everyone and welcome to today's Reinsurance Group of America's Third Quarter 2014 Results Conference Call. Today’s call is being recorded. At this time, I would like to introduce the President and Chief Executive Officer, Mr. Greig Woodring, and Senior Executive Vice President and Chief Financial Officer, Mr. Jack Lay. Please go ahead, Mr. Lay.

Okay. Thank you. Good morning to everyone and welcome to RGA's third quarter 2014 conference call. Joining me in St. Louis this morning is Greig Woodring, RGA's Chief Executive Officer. Greig and I will discuss the third quarter results after a quick reminder about forward-looking information and non-GAAP financial measures. Following our prepared remarks, we’ll be happy to take some questions. To help you better understand RGA's business, we will make certain statements and discuss certain subjects during this call that will contain forward looking information, including among other things, investment performance, statements related to projections of revenue or earnings, and future financial performance and growth potential of RGA and its subsidiaries. Keep in mind that actual results could differ materially from expected results. A list of important factors that could cause actual results to differ materially from expected results is included in the earnings release we issued yesterday. In addition, during the course of this call, we will make comments on a pre-tax and after-tax operating income, which is considered a non-GAAP financial measure under SEC regulations. We believe this measure better reflects the ongoing profitability and underlying trends of our business. Please refer to the tables in our press release and quarterly financial supplement for more information on this measure and reconciliations of operating income to net income for our various business segments. These documents and additional financial information may be found on our Investor Relations Web site at rgare.com. With that, I'll turn the call over to Greig.

Thank you, Jack. Good morning, everyone and thanks for joining us this morning. I will provide some general overview comments on the quarter, Jack will go over the financial results and then we'll open it up for Q&A. Our third quarter results were strong and were in many ways consistent with that of the year-to-date results in the sense that our global diversified model is working well as our International segments and Global Financial Solutions businesses performed at a high level, and we are a compliment to our traditional North American businesses that have a faced a period of higher claims. Operating EPS were $2.31 per share and ROE exceeded 12%. Premium growth was a solid 7% in both the current quarter and year-to-date, and our new business activity remains solid. Underwriting experience on a global basis was moderately negative as both our Asia and EMEA regions had broadly favorable results, providing an offset to the weaker North American results. Jack will give some further details, but suffice to say that our extensive analysis of the higher claims in North America do not reveal anything indicative of a systemic trend. Global Financial Solutions had strong results across products and geographies. New business momentum there continues to be vibrant. Our Australian operation had another quarter where the bottom line results were modestly positive and the conditions there continue to show signs of improvement, gradual improvement. We continue to be active and disciplined in our management of deployable capital and with the announcement of the Aurora transaction last week, we have announced pretty significant transactions and a smaller one this year that we have closed or will close by early 2015. We've talked about the potential for block transactions and M&A opportunities for a few years now, given regulatory changes and other…

Okay. Thank you. We reported operating income of 160 million this quarter or 2.31 per diluted share versus 2.14 per diluted share last year. Both periods were quite strong and our diverse lines of business and geographies continue to provide a benefit to the consolidated results. Net premium growth was solid again this quarter at 7% in both U.S. dollars and original currencies. For the quarter we had a very slight benefit to premiums and a slight negative to operating income from currency effects. Excluding spread business, our average investment yield was 4.8% this period. Slightly higher than last year's third quarter and roughly even with the second quarter of this year. Our new money yield is about 4% and continues to trail and put downward pressure on our overall portfolio yield. But this has been somewhat offset by higher variable items such as bond and mortgage loan prepayments. We repurchased another 263,000 RGA common shares this quarter for roughly $21 million, continuing our balance capital management strategy of deploying capital into the business and returning excess capital to shareholders. As Greig indicated, we have announced some significant transactions this year, and we expect to deploy about 300 million of capital towards the transactions that have not yet closed. Our current excess capital position exceeds $600 million. And of course should grow somewhat between now and the closing of those transactions, such that we expect to be in a position going forward to execute a balance and effective capital management strategy. Now, turning to our segment results. The U.S. and Latin America traditional sub-segment reported pretax operating income of $79 million versus $90 million last year, reflecting relatively higher claims experience in the current period. Individual mortality claims had some adverse deviation, as we saw a higher frequency of claims…

(Operator Instructions) And we'll take our first question from Colin Devine at Jefferies.

Good morning. Greig, I was wondering if you could speak a little bit about where you’re seeing the greatest opportunities right now going forward in terms of potential transactions?

Colin, in terms of potential transactions, we’re seeing the biggest opportunities in Europe which is a market adjusting to the advent Solvency II in 2016. We did a Solvency II friendly transaction with Delta Lloyd, which was as far as I know, one of the first, if not the first, of those sorts of transactions. And we think there is a lot of interest in those transactions going forward. So of all places in the world, that's probably the place with the biggest transactions, if you put it that way. In terms of organic growth of course Asia is where the momentum is right now and we have a lot of strong momentum in that marketplace as middle class gross and insurance is a growth industry there.

Following up on the Solvency II question, is there possibility of some spillover into the U.S. from European companies, looking to rebalance the U.S. operations?

Yeah. Solvency II is a capital regime that has a global perspective. And so whether they are -- the operations are located in Europe or America or Asia or any other market, it doesn’t matter. They still have a capital charge associated with them that is Solvency II based, and so it could well be that there are some U.S. blocks of business that would come to market or would -- good possibilities for some transaction of some sort.

Okay. Thank you.

Next we'll go to Ryan Krueger with KBW. Ryan Krueger - Keefe, Bruyette & Woods: Hey, good morning. I was hoping you could talk a little bit about your earnings expectations for the Voya Term Life block and the Aurora National deal and also if you'd expect any sort of ramp up period or if [indiscernible] would emerge right away?

Ryan, this is Jack. We don't typically get into specific discussions of earnings expectations but I can direct you towards relative returns that we expect overtime. And I'll remind you that Voya, we deployed roughly 100 million of capital and Aurora, we will deploy about 100 million of capital and Aurora we expect to deploy about 200 million of capital. And in terms of returns, you can think of those in the 14% to 15% roughly expected range. That's kind of a run rate, there is a little bit of build up to get there but not much. So hopefully that helps in terms of what to expect in those two transactions. Ryan Krueger - Keefe, Bruyette & Woods: Okay. So 14% to 15% kind of total on the two combined?

That's right. That's right. Ryan Krueger - Keefe, Bruyette & Woods : Thanks. And then I guess given your statements that you don’t see any kind of underlying trends and the issues you've seen in North American mortality, I was hoping you could give us maybe some sense of how mortality has been so far in October?

Mortality has been okay in October Ryan, but I caution you that, that doesn't mean very much with respect to the quarter. You know, either mortality can swing in a three day or four day period very strongly because of large claims and we just have to write it out to the end. You're right that, the mortality experience has been disappointing. It's been real choppy this year. Bad first quarter with a lot of large claims, and a lot of facultative business. The third quarter -- the second quarter was fine and the third quarter has been almost the flip of that more frequency than it is severity and smaller policies, very little facultative excess. So we are unfortunately in a period where we've had two quarters that are not good this year but, we've always had situation mortality smoothes out overtime and we expect this to be the same thing. And if you look at it over a two-three year period, we'll find mortality to be a nice steady haul.

Now we'll go to Sean Dargan with Macquarie.

Thank you. Just following up on Ryan's question about mortality, it seems for primary carriers mortality has been less favorable in recent quarters, and they've typically chalked it up to severity and volatility. But is there anything you've identified in underwriting in certain vintages that maybe causing this kind of industry wide backtracking in mortality?

Sean no, no we haven't. We've looked at it very carefully and I'm talking about the U.S. now and I think same thing would apply to Canada as well. But, I mean talking about the U.S. for example, our block issued from '99 to '04 which is the most difficult return block for us actually had a pretty good third quarter. The prior and the after that had all the fluctuations in this particular case. So things just have been very choppy as I said, there is really no pattern to it, that persists.

Okay. Thank you. And then I'm just thinking about the returns you're going to generate on the acquired blocks 14% to 15% implies something higher than the sellers were able to generate. I'm just wondering why you're able to generate higher returns than the prior owners?

This is Jack. Let me take a stab at that. I guess, when you talk about returns, often times some organizations will comment on returns on a statutory basis in terms of the statutory capital. When we talk about returns, we are talking about our own GAAP capital that we feel we need to put behind these businesses. So that's one reason that the returns can differ from buyer to seller. We also have to come up with new assumptions on all the underlying issues and certainly our assumptions would be different perhaps than some of the assumptions used in terms of developing a return by the selling companies. So I think that's the best way to say, you shouldn't necessarily expect the returns to be identical particularly as it relates to the underlying capital that is required to back the business.

But are your capital requirements different, your GAAP capital requirements different than the sellers?

It could be, our overall mix of business is different. The limiting capital maybe a little different. Generally speaking, we have the ability to re-characterize the transaction when we make an acquisition and we're pretty confident in our delivery of this sort of return.

Now we'll go to Jimmy Bhullar with JPMorgan.

Hi. First on just your expectation for share buybacks given recent, the deals that you've done. Should we assume that buyback activity will slow relative to the last few quarters? Then I have another follow-up as well.

Yes. Jimmy, I think you saw it slow in the third quarter compared to the first half of the year and I think you should presume that you will see a continuation. What would cause that to change if the stock traded off dramatically, so that we started with a terrific buy opportunity or if -- some of the ongoing discussions in terms of deals on the pipeline dissipated for a variety of reasons. But those sorts of discussions continue, we've already announced a couple of deals so you shouldn't expect any sort of an acceleration of buybacks in the fourth quarter.

So you'll be active but maybe not as much as you've been doing, right? Are you ruling out buybacks completely?

We could be active. I'll stop short of saying we will be active. We could be active, but even if we are active, it would probably be at a diminished level.

Okay. And then on the Australia business, could you just discuss like how much of the business has lapsed from maybe two years ago? And the treaties you mentioned you've renewed couple a large treaties. Have you gotten the full price hikes and what type of returns do you expect on those or do you think you'll need to go through another round of price hikes down the road?

Yes. Jimmy, we've lapped up some of the big transactions and others we have preserved through large rate increases and they’re substantial rate increases, because that was needed and recognized by everybody in the marketplace. And so while there wasn’t enough time to go through full negotiations and negotiate all terms and conditions between the super funds, the direct writers and the reinsures that we would have liked to see and we’ll ultimately expect. We did see rate increases of a very large character flowing through and we got comfortable enough that we expect regular returns on that business with those sort of premium increases. And so we did renew or we extended, renewed or extended those contracts necessarily for a new full three year period. But we had basically taken these as one off decisions as they've come to us.

And then as you think about your reserves in Australia, obviously you took the large charge last year. Is it reasonable to assume that -- I'm assuming that you’re comfortable with your reserves already, but the trends seemed like they've been better the last few quarters than what we would have expected. So is there a possibility of a reserve release down the road or you need to see a lot more data before you get comfortable?

Jimmy, this is Jack. We would need to see a lot more data because there is a longer tail than you would expect on that business. So it’s pretty much playing out roughly as we expected. We have no reason to believe that we need additional reserves there. We’re comfortable where we are at this point, but it will have to play out over several years.

Next we'll take a question from Humphrey Lee with UBS.

Good morning, guys. I just want to follow-up on the mortality in Canada. So there seems to be elevated number of loss claims. But can you talk about how the number of claims have transferred in the first quarter?

Humphrey, we're talking about large claims in the range of 14 to 18 days instead of maybe an expected 10. So it’s very difficult to see, there is no pattern to speak of, sometimes it’s up and sometimes it’s down. But with those kind of limited numbers you’re really not expecting to see a pattern like that except over a long period of time. Canada has had a very rough string of experience this year. I’ll remind everybody that follows a long stretch, many-many years of exceedingly good mortality. In some cases more than a standard deviation away from expected on the good side. So we’re a little bit puzzled by persistence of this current string on the negative side, but we hope that it's going to turnaround pretty soon, and we expect that over the long course, things in Canada are just fine.

Okay. And then on asset intensive even when excluding the pre-payment income, this quarter is still very strong when you look at how equity markets have performed in the quarter. So you mentioned favorable experience and breadth in the quarter. Can you kind of elaborate the impact of some of this progress and how should we think about on a run rate basis going forward assuming [indiscernible].

Humphrey, this is Jack. Let me take a crack at that. First of all in terms of the run rate going forward, we had kind of guided towards roughly 40 million pre-tax per quarter. As we continue to build that business and it’s performed pretty well, I certainly would be disappointed if we didn't hit that 40 million. So we think that's probably a good benchmark and with some opportunity to exceed it. Now this past quarter, we exceeded it fairly substantially. Everything seemed to kind of fall our way in that business. We already mentioned the prepayments of commercial loans kind of added. Even though we have that phenomenon every quarter, it was a little more dramatic and particularly we had a fairly large loan pay-off that contributed there so that went our way. Our equity index, annuity, spreads widened a little bit and the fixed annuity spreads widened. It’s really pretty much across the board. So everything kind of fell our way which kind of as a testament to the earnings power of that business.

I guess I am just a little bit surprised with widening credit spreads for fixed annuities and the index annuities like being such a huge impact in the quarter. Is there something different that you guys are doing or how much of additional leverage that you can pull for these blocks?

There's nothing dramatic that we’re doing. We continue to look at the investment portfolio and try to take advantage of opportunities we see there and we’ve been able to tick-up the spread a little bit in that respect. But it hasn’t been dramatic, it’s just been little bit around the edges inversely all of the businesses within that asset intensive group.

I'll remind you Humphrey. Most of that business is closed block, so we can manage it effectively and lock in essentially the spreads for duration of those contracts if we're good with our modeling. And so we don't have a situation where we're open for new business and getting new flows a lot of [indiscernible].

(Operator Instructions). We'll next go to Steven Schwartz with Raymond James.

Hey, good morning everybody. First a couple of follow-ups Jack, just on Humphrey's questions with regard to spread. My assumption has always been when you show these big gains in asset intensive that what we're really looking at here to some extent is the difference -- the different GAAP accounting for index annuities with regards to both the hedge assets and then how you account for the liability that's being hedged. Is that the case this quarter?

No, I won't look at it that way because most of that hedging comes out of operating income. So, that's not the way I'll look at, I think you can think of it more as around the edges just adding to the spread through some of the investment repositioning that we've been able to do and so on.

Okay alright. And then a follow up to Jimmy's question with regards to share repurchase activity. Was your commentary with regards to fourth quarter or going into 2015 as well?

Well, my comment was really related to the fourth quarter, but if you wanted to look beyond that into 2015, a lot would depend on what the pipeline looks like in terms of other ways to deploy capital. So we always go into… I'm sorry go ahead.

No I was saying, I was going to guess, I was asking to what extent the capital can be replenished either you've got 600 million north of 600 million you are, 300 million for these two deals. I mean can capital be replenished?

Yes well, you can think that ordinarily we would, in terms of redundant capital, would add 300 million to 350 million kind of a run-rate per year. So yes, certainly we expect it to be replenished and it's fairly predictable in that respect. So, we think we will have the capital available to continue to deploy as we've done this year.

Okay and then one for Greig, maybe two for Greig. On U.S. traditional, you assumed reinsurance business in the quarter went down to 16 billion, it'd been kind of steady in that 21 billion to 22 billion range Greig, what's the takeaway there?

We are seeing the business drop off a bit, some of that is reduced market share just depending on certain specific situations not overall increase in competition in the marketplace. And some of it is -- some companies retaining a little bit more business. We do expect that business flow in the U.S. market will continue to go downward next year. There's some disagreement among reinsurers, whether that's really the case or not. But, I think that that's kind of what we believe.

Okay. So you're thinking penetration is going to continue to drop?

Yes.

Okay. And then one more if I can, the adverse experience in the group business -- was that health insurance again like it was in the second quarter?

Yes it was, but it was different. We've four lines in the group business. We have life and accident. We have excess medical and we have quarter share medical, and we have disability. It was the other medical line this time. It was the excess line that had the problem. Again that...

Okay. What was it in the first quarter or in the second quarter excuse me, this excess?

It was a quarter share medical.

It was a quarter share medical. Okay all right. Thank you guys.

Now we'll go to John Nadel with Sterne Agee.

Hey thanks good morning. This is Mike Ward on for John Nadel. Just a question on FX. It looks like foreign exchange did not have a meaningful impact overall on third quarter results, but based on where things stand currently it seems it might be more pronounced in the fourth quarter and into next year. We're just wondering if you would agree with that assessment?

Yes, this is Jack. I would agree with that. If you just look at the translation rates now, it would had -- not a dramatic effect but a more significant effect than we saw in the first quarter. I think it was $0.02 or so, I'm sorry in the third quarter. I think it was $0.02 or so and it would be probably three times or more carefully used current spot rates.

Great and thanks, that's all I had.

And we'll take our last question from Edward Williams with Capital Returns Management.

Not to spend too much more time on Q4 buyback expectations, but in response to Jimmy's question, it sounded like you haven't repurchased any shares post-quarter close Q4 to-date, is that a safe assumption? And also, could you just remind me how you think about utilizing 10b5 plans if applicable, not just surrounding quarterly blackout periods, but also negotiating potential acquisitions? Thanks.

We have not been in the market since September 30th and we do use 10b5 plans in terms of really just to have a plan in place and not end up in a position where we’re tripped up by blackout periods and that’s sort of things. So we have certainly used that sort of plan in the past. And to the extent we’re back in the market, we’d likely use that sort of plan in the future.

Thanks very much.

We actually have one more question queue up from Steven Schwartz at Raymond James.

Hey, one more guys. Jack, could you, with regards to the returns you expected particularly on Aurora. Now, you paid I guess $200 million. There was I believe statutory capital of about 350. How does that work in generating the returns that you're expecting to get?

Steven the returns that I mentioned are based on the underlying capital that we feel we need to back that business. We don’t really want to comment on the purchase price on that deal. But in terms of the capital we need to back the business what we expect in that range of 14% to 15% in terms of return. To the extent that that differs from statutory capital level, we can finance that in some respects to be comfortable that we are getting and we’ll be able to continue to get the return based on the GAAP capital that we have back in the transaction.

So, the $200 million would be over and above what you paid. Is that correct?

No. Think if it is -- once that risk is on the books, how much capital do we need to back that business.

Okay. All right I'll think about it. Thanks.

You do have a few more callers re-queued. We'll take our next one from Ryan Krueger with KBW. Ryan Krueger - Keefe, Bruyette & Woods: Thanks just a quick one. If interest rates stay at around current level, can you give us a sense of what type of earnings headwind that would present as we go into 2015?

Ryan. This is Jack I think our best estimate is if rates were around the level at the end of Q3, it would likely present about $0.10 per share in terms of headwind on operating earnings. Ryan Krueger - Keefe, Bruyette & Woods: Okay great. That's all I have.

(Operator Instructions) We'll go to Sean Dargan with Macquarie.

Thanks. Just I guess continuing on Steven’s question, can you just maybe breakout for us how you have 600 million of excess capital here? I’m just trying to tie this to what you presented at your Investor Day in May. So you ended 2013 with the 600 million. You’ve bought back 200 million of your stock. Can you just remind us how much capital you're deploying for each of these block acquisitions that you’ve made?

Let's start with the two acquisitions that we haven’t closed yet, we would plan to deploy roughly 300 million into those -- between the two of them. We announced the transaction earlier this year where we deployed roughly 75 million. As you state, you already know what we've done in terms of buybacks and dividends and so on and so forth, which I think more difficult for an investor or analyst to have a view is kind of what additional capital we have backing the business versus the earnings power of the company. But probably the easiest way to look at that as I stated earlier is we should probably generate about 300 million to 350 million of excess that is redundant capital above and beyond what we need just for the generic business.

Okay. So, I guess, the capital generation that you're talking about at our Investor Day, you’re still on that ballpark for what do you think you’re going to do this year?

Yeah, definitely and as we add transactions, that additional generation would tend to grow a little bit.

Okay. And just one related question, where will the earnings from these acquisitions sit on your income statement. What segments will they reside in?

That will affect both the U.S. and the EMEA, the Europe and Middle East and Africa segments.

There are no further questions at this time. So I'd like to turn it back over to our speakers for any additional remarks.

Nothing other than thanks to everyone who joined us here this morning and to the extent any other questions come up, feel free to give us a call here in St. Louis. And with that, we'll end the call.

And that does conclude today’s conference. We thank everyone again for their participation.