Strong MetLife Q1 Led by International Growth

MetLife ( MET ) reported a 64% jump year over year (y-o-y) in its operating earnings to $1.4 billion in Q1 2011. Its net income also increase by 3% y-o-y to $830 million. The rise in income was supported by a healthy rise in premiums, fees and other revenues which increased by 27% in Q1. Compared to Q4 10, operating income grew about 17% while premiums, fees and other revenues increased by about 15%. The international insurance division was the prime contributor to the increase in MetLife's revenues and earnings. MetLife is the largest insurer in the U.S. and competes with AIG ( AIG ), The Hartford ( HIG ) and Prudential Financial ( PRU ).

International Insurance Revenues Jumped after ALICO Acquisition

MetLife's operating revenues from international insurance jumped to $4.6 billion in Q1 2011 from $1.5 billion in the same quarter last year because of the acquisition of ALICO from AIG last year. ALICO is a major provider of life and health insurance in Japan and was purchased by MetLife for about $16.2 billion.

ALICO has significantly boosted MetLife's presence in the international insurance market outside of the US. MetLife's share of international market increased from 0.19% in 2010 to an estimated 0.43% in 2011. MetLife's insurance business in Latin America and Asia Pacific also witnessed strong growth. Growth in institutional business in Mexico, group life and dental insurance in Brazil and accident & health insurance in Chile and Argentina contributed to MetLife's strong results. In Asia-Pacific, growth was driven by strong life insurance sales in Korea.

We estimate MetLife's share of international insurance market to reach 0.45% by the end of our forecast period. However, MetLife could continue to expand its footprint in the international market and grow its market share could to about 0.6%. This would result in 8% upside to our price estimate for MetLife.

The international insurance division is the second largest source of value for MetLife after the U.S. life and health insurance division and constitutes almost 26% of the $49.04 Trefis price estimate for MetLife's stock which is roughly 5-6% above the current market price.

See our full analysis of MetLife here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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