MetLife's fourth quarter bottom line outperformed the Zacks
Consensus estimate and improved year over year. Results reflected
improved sales and earnings across the Americas and Asia along with
higher derivative gains, leading to improved book value per share.
These were partially offset by higher expenses and a lower return
on equity (ROE). ROE achieved the low end of 2016 target of 12% to
14%. The company also achieved net expense savings targets of $600
million. It strengthened its balance sheet by improving cash
balance and lowering debt level. Looking ahead, MetLife expects
total annuity sales to increase by more than a 50% increase in 2015
and realize $1 billion gross savings. Consistent focus on
international growth should enhance operating leverage increasing
MetLife's potential to outperform the peer group. However,
challenging interest rates, currency fluctuations, receipt of SIFI
status and competition remain lingering concerns. We remain neutral
Founded in 1868 and headquartered in New York, MetLife, Inc. is
a leading provider of insurance and financial services to a broad
spectrum of individual and institutional customers. Through its
various subsidiaries and affiliates, the company provides
individual insurance, annuities, and investment products. The
company also offers group insurance as well as retirement &
savings products and services to corporations and other
institutions. Through its domestic and international subsidiaries
and affiliates, MetLife serves more than 90 million customers in
over 60 countries around the world. Based on life insurance
in-force, it is the largest life insurer in the U.S. Some of its
prominent subsidiaries and affiliates include Gen America, State
Street Research, Metropolitan Property and Casualty, and Texas
Life. Outside the U.S., the company serves customers through direct
insurance operations in Japan, Latin America, Asia Pacific, Europe
and the Middle East.
Since the first quarter of 2012, MetLife reported results under
its new regionally distributed segments: The Americas (including
the U.S. and Latin America) contributed 76% to the revenues in
2013, while Asia and EMEA (Europe, the Middle East and Africa)
contributed 18% and 5%, respectively. The new segregation is based
on the company's expansion into 64 countries with the ALICO
acquisition, up from 17 countries previously. Additionally, MetLife
is also creating a new global employees benefits unit under the
Corporate & Other segment (1%).
Significantly, on Nov 1, 2010, the company acquired American
Life Insurance Company (ALICO), a unit of AIG, for $16.4 billion.
The payment made to AIG consisted of $7.2 billion in cash and $9.0
billion in MetLife equity and other debt securities. ALICO is a
leading provider of life insurance, accident and health insurance,
retirement and wealth management solutions to consumers and
Further, on Apr 1, 2011, MetLife sold half of its stake in
Japan-based Mitsui Sumitomo MetLife Insurance Co. to its joint
venture partner MS&AD Insurance Group Holdings Inc. for $267
million ( 22.5 billion) in cash. Alongside, on Nov 1, 2011, MetLife
disposed of MetLife Taiwan Insurance Company Limited, in a
third-party sale, for $180 million. Further, on Nov 9, 2011,
MetLife approved the sale of its Caribbean operations to
Pan-American Life Insurance Group, which was closed in 2012.
Additionally, MetLife divested its banking business in parts,
based on the stringent regulations attached and a consistent
operating underperformance. Accordingly, on Jan 10, 2012, MetLife
announced the closure of its forward residential mortgage business,
which originated under MetLife Home Loans. The termination in turn
is projected to lay off about 4,300 employees associated with this
On Jan 30, 2012, MetLife announced a contract to acquire the
life insurance and pension businesses of London-based Aviva plc in
Eastern Europe regions of Hungary, Romania and Czech Republic.
These three European units had total assets of 57 million ($75
million) and accounted for less than 0.5% of total profits of Aviva
at Jun 2011-end. The transaction was culminated in Aug 2012.
On Feb 9, 2012, MetLife further agreed to vend its Warehouse
Finance business to the financial firm EverBank Financial Corp. The
deal was culminated in the first half of 2012 with undisclosed
terms and conditions.
On Apr 26, 2012, Nationstar Mortgage LLC agreed to purchase
MetLife Bank's reverse mortgage servicing portfolio for net worth
of $25 million. The transaction was closed in Jun 2012. Further, in
Jan 2013, MetLife Bank closed the long-pending deal with General
Electric Co.'s financial services unit GE Capital Retail Bank and
sold its bank deposits worth $6.4 billion, which included
certificates of deposit and money market accounts. MetLife also
vended its mortgage-servicing portfolio to JPMorganChase Bank.
In Feb 2013, MetLife de-registered itself as a bank holding
company after receiving due approval from the Federal Reserve and
the Federal Deposit Insurance Corp. (FDIC). Henceforth, MetLife
Bank has been a divested operation.
In Sep 2013, MetLife formed a life insurance joint venture (JV)
with Bank for Investment & Development of Vietnam (BIDV) and
Bank for Investment and Development of Vietnam Insurance
Corporation (BIC). The JV is scheduled to be functional in
In Oct 2013, MetLife culminated the purchase of 64.3% of the
pension-management wing of Banco Bilbao Vizcaya Argentaria SA
(BBVA) AFP Provida SA based in Chile. The transaction was valued at
$1.3 billion along with dividends from AFP of about $230 million.
Net capital gains of about 500 million euros ($676.28 million) are
also projected from the deal.
In May 2014, MetLife completed the divestment of its leading
specialist bulk annuity pension provider in U.K., MetLife Assurance
Ltd., to Rothesay Life Ltd. MetLife Assurance was armed with over
20,000 member and assets under management worth 3 billion. However,
MetLife will continue to conduct its European operations, primarily
the UK wealth management and employee benefits business (MetLife
Europe Ltd.) and MetLife's U.S. pension risk transfer business. The
divestment was announced in Feb 2014.
MetLife Inc. (MET): Read the Full Research
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
METLIFE INC (MET): Free Stock Analysis Report
To read this article on Zacks.com click here.