NORTH AMERICA OPERATIONAL REVIEW Approximately 60 percent of new business written in the U.S. is reinsured—a number that seems to have leveled off over the last few years. Fewer life reinsurers, a hardening pricing environment, and possible new and unique competitors to the playing field could put downward pressure on this significant cession rate. RGA will be rising to the challenge of profitable new business growth in 2004 and beyond.  Two thousand three brought significant changes to the U.S.  reinsurance marketplace. Some of our competitors faced financial concerns, some were forced to take a more conservative stance toward pricing and others pared back their product offerings. The dynamics of these market changes provided RGA many opportunities to add new clients to its roster and to significantly expand its existing business relationships. As RGA’s competitors dealt with issues related to non-life business in 2003, RGA’s sole focus on life reinsurance allowed it to remain solid, with strong ratings. Two thousand four will find the U.S. Division executing its core competencies. It will look for innovative ways to grow its facultative business, using technology to make application submission easy and cost-effective. The Division will also look for new opportunities and products to fuel growth, focus on deepening relationships in existing accounts, and look to initiate business with targeted new clients. RGA Mexico proved itself a committed, experienced and expert player in the Mexican life insurance industry in 2003, in part  by reinforcing its reputation for excellent time service. The office provided turnaround of 95 percent of individual facultative quotes within 24 hours and 94 percent of facultative group quotes  within 48 hours. Despite operating in a country where life insurance remains underdeveloped, RGA Mexico significantly grew its 2003 revenue over 2002. In 2003, RGA took advantage of business opportunities created by the exit of some competitors while at the same time dealing with the capacity reduction of some large group life players, increased retention by others, and competition from new entrants. In 2004 RGA will continue to focus on individual life, opening more capacity for group life and bancassurance, and continuing to meet the capital-motivated reinsurance needs of its clients. What RGA Technology Partners does differently than other  technology providers is to place equal importance on both pieces of the automated underwriting solution—technology and the RGA Technology Partners met or exceeded all 2003 goals and objectives as the AURA (Automated Underwriting and Risk Analysis) system continued to be well received in the global life insurance marketplace. AURA is powered by a comprehensive set of rules that can underwrite virtually every type of life insurance product. It has been translated into five languages and is used in six countries, with two more implementations currently under way as RGA Technology Partners further expands its global reach.  In 2003, the company made significant strides in product  development by expanding the features of AURA and creating AURA Back Office, an underwriting case tracking and workflow system that interfaces with evidence providers. RGA Technology Partners—RGA’s business unit devoted to developing and implementing software solutions for the life insurance  industry—incorporated in 2003, ahead of the originally envisioned schedule due to the company’s rapid success and growth. RGA Financial Markets provides capital support to life insurance companies through reinsurance. These transactions create risk- sharing partnerships that reduce the insurance companies’ needs for both GAAP and statutory capital while potentially creating more efficient capital and financial structures. Financial Markets operates in two segments: capital-motivated reinsurance, also known as financial reinsurance, and asset-intensive reinsurance. Capital-motivated reinsurance transactions are designed to help insurance companies find sources of capital to support growth and acquisitions or higher returns on investment. Asset-intensive reinsurance includes the reinsurance of annuities and corporate- owned life insurance. Financial Markets had a solid year in 2003. At the end of the year, it managed over $1 billion of statutory surplus provided through financial reinsurance. Invested assets related to asset-intensive reinsurance grew from $2.4 billion to $3.1 billion during 2003. Revenues for all business increased to $214 million from $144 million in 2002, while pre-tax income reached $38 million.  One of Financial Markets’ key strengths is its ability to respond to client needs through sophisticated and detailed insurance risk analysis and modeling. This requires a strong understanding of the financial, regulatory and tax implications of its business, and is what makes RGA Financial Markets one of the largest capital- motivated reinsurance providers in the United States.  THIS IS RGA. 2003 ANNUAL REPORT 9 RGA Technology Partners, Inc. RGA Reinsurance Company Oficina de Representación RGA Financial Markets 