While its name evolved from "metropolitan," MetLife's policies are found in villages, towns, and huge cities around the world. Operating through its Metropolitan Life Insurance subsidiary, MetLife is the largest life insurer in the US. Its Insurance Products segment includes all of its group and individual life insurance and non-medical health insurance products (dental, disability, illness). Its Retirement Products segment includes annuity products. MetLife's Auto & Home segment works through subsidiary Metropolitan Property and Casualty. MetLife is a big player in Japan, and growing in more than 50 other countries, especially in Latin America. MetLife plans to split off much of its US life business.
MetLife is organized into six segments: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; Latin America (the Americas); Asia; and Europe, the Middle East, and Africa (EMEA). Certain results are also reported in the operations of the Corporate & Other segment, including MetLife Home Loans.
In the US, MetLife provides a range of insurance and financial services offerings including life, property/casualty, disability, dental, guaranteed interest, and annuities. These are distributed through both in-house and independent retail channels and in the workplace. Internationally, the company provides life, accident, medical, dental, and other insurance, as well as annuities and other retirement and savings products to individuals and groups.
The company's Retail segment is organized into two businesses: life and other (variable life products, universal life products, term life products, whole life products, disability products, property & casualty); and annuities (variable annuities and fixed annuities). In 2015 retail sales accounted for 30% of total revenue.
The Group, Voluntary & Worksite Benefits segment is organized into Group and Voluntary and Worksite. Group insurance products and services include life, dental, group short- and long-term disability and accidental death and dismemberment coverages. That segment accounted for 28% of revenue in 2015.
The Corporate Benefit Funding segment handles investment management for large employers that offer retirement benefits, including pension closeouts and specialized life insurance products used to fund such benefit plans. Corporate Benefit Funding accounted for 13% of revenue in 2015.
The company also services a number of long-term care insurance policies.
The company operates in the Americas and Asia, and in Europe, the Middle East, and Africa (EMEA). In Latin America it operates in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, and Uruguay (with the bulk of regional revenues coming from Mexico, Chile, and Argentina).
The company operates in 10 countries in Asia, with its largest operations in Japan and Korea. It also does business in Australia, Bangladesh, Hong Kong, and Nepal, and through a joint venture in China, Malaysia, and Vietnam.
MetLife operates in 26 countries across EMEA. The segment's biggest operations are in Poland, the Persian Gulf, and Russia.
While the US remains its largest overall market, international sales accounted for about 30% of MetLife's revenues.
Sales and Marketing
Policies and other products are sold to some 100 million customers through a vast network of targeted marketing and sales forces, financial advisors, consultants, agency distribution groups, captive agents, independent agents, affiliated broker-dealers, and direct marketing (including direct response television, web-based lead generation, telemarketing, as well as through third parties and e-commerce). In addition, MetLife sells some products through affinity groups and through employers.
Revenue, which has been fluctuating over the past few years, fell 5% to $70 billion in 2015. This was due to negative impacts of foreign currency exchange rates and a decline in investment earnings. However, this was partially offset by growth in the US market and in corporate benefit funding.
Net income has been even more unsteady, taking a huge dip in 2012, recovering for the next two years, and then dropping 16% to $5.3 billion in 2015. That latest decline was caused by the lower revenue but was offset by lower operating expenses including policyholder benefits. Following suit, cash flow from operations fell 14% to $14.1 billion that year.
In 2016, MetLife announced plans to spin off much of its US retail operations into a new company named Brighthouse Financial. Its MetLife Insurance Company USA, General American Life Insurance Company, Metropolitan Tower Life Insurance Company, and several other units will be included in the transaction, whether that be in the form of an initial public offering or a spin-off. Together, those units have represented about 20% of MetLife's total earnings.
In mid-2016MassMutual bought MetLife's US retail captive agency distribution channel MetLife Premier Client Group and broker dealer MetLife Securities. (US retail businesses that were not divested include the closed-block life insurance, property/casualty, and Metropolitan Life Insurance Company's life and annuity operations.)
The move to divest part of its core operations comes in the wake of the financial crisis and subsequent changes in the regulatory landscape. US regulators had designated MetLife one of four non-bank systemically important financial institutions (meaning it would pose a risk to the economy if it should collapse), but MetLife fought the designation, winning its case in a federal court in 2016. Regardless, the pending separation of its US life insurance business should calm any unrest over the group's size. The newly created company will also benefit from having a lower capital and compliance burden.
This is not the first major shuffling of MetLife's operations in recent years. It is exiting the bulk of its banking operations to avoid the increased scrutiny of banks under Dodd-Frank financial regulations. The company is working to surrender its status as a bank holding company. It has already sold its MetLife Bank depository operations and has stopped writing new residential mortgages and reverse mortgages.
Going forward, MetLife plans to focus on pension and retirement products, insurance sold to employers, and non-US life insurance. The company has pinned much of its growth efforts on emerging markets by increasing its already strong presence in the Asia/Pacific region and in Latin America through acquisitions and new product introductions. To support this growth, the company has organized its operations along geographic lines: The Americas; Europe, the Middle East and Africa (EMEA); and Asia.
Some of the individual and group products MetLife sells overseas include life insurance, accident and health insurance, credit insurance, and annuities and retirement products. It has also created a global employee benefits business to reach into new markets. To focus on core international businesses Metlife has been selling off select foreign assets. In 2014 it sold its UK annuity business to Goldman Sachs Group company Rothesay Life Ltd. for $5 billion.
MetLife is focused on growing its annuity business through a range of products. One example is its new guaranteed minimum withdrawal benefit VA, FlexChoice.
In 2014 the company launched its MetLife SecureFlex Universal Life product.
Additionally, MetLife has been working to cuts its expenses, and is on track to meet its goal of achieving $1 billion in gross expense savings.
Mergers and Acquisitions
The company has been diversifying its real estate equity holdings. In 2014 it acquired the Fairmont Hotel in Washington, DC, for $180 million. It also acquired a couple of retail centers that year.