While its name evolved from "metropolitan," MetLife's policies are found in villages, towns, and huge cities around the world. Its companies offer life, accident, and health insurance, as well as retirement and savings products around the world. The group is a big force in Japan, and growing in more than 50 other countries, especially in Latin America. It distributes its products to retail, corporate, and government customers through agents, third-party distributors including banks and brokers, and direct marketing channels. About half of its revenue comes from the US, but in mid-2017, MetLife split off much of its US life business.
MetLife is organized into five primary segments: US; Latin America; Asia; Europe, the Middle East, and Africa (EMEA); and MetLife Holdings. Certain results are also reported in the operations of the Corporate & Other segment, including MetLife Home Loans. The US segment is MetLife's largest, accounting for about half of total sales. Asia accounts for nearly 20% of revenue, and Latin America and EMEA each account for more than 5%. MetLife Holdings brings in more than 15% of revenue.
In the US, MetLife provides a range of insurance and financial services offerings including renewable term 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, credit, and other insurance, as well as annuities and other retirement and savings products to individuals and groups.
MetLife Holdings comprises businesses no longer actively promoted in the US, including variable life and universal life products, term and whole life products, and annuities. It also includes the group's discontinued long-term care business.
MetLife 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, Uruguay, and Mexico (with the bulk of regional revenues coming from Mexico and Chile).
The company does business in about 10 countries in Asia, with its largest operations in Japan. It has an innovation center in Singapore (it is testing an automated insurance solution using blockchain and electronic medical records) and a data analytics center in Malaysia. It also does business in Australia, Bangladesh, Hong Kong, and Nepal, and through a joint venture in China, Korea, India, Malaysia, and Vietnam.
MetLife is active in more than 25 countries across EMEA. The segment's biggest operations are in the UK, the Persian Gulf, Poland, and Turkey.
Sales and Marketing
MetLife's 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, and print media). In addition, MetLife sells some products through affinity groups and through employers.
MetLife's revenue peaked at $73.3 billion in 2014 but has been been somewhat lower (above $60 billion) since then. Net income has been fluctuating, reaching $6.3 billion in 2014 but falling to $850 million in 2016. The company's cash levels have also fluctuated recently.
In 2017 revenue increased 3% to $62.3 billion. Growth in the retirement and income solutions business and the group benefits business drove that increase. International sales also rose overall. Midway through the year, MetLife spun much of its US life and annuity operations, which resulted in a decline in those revenue lines.
Net income rose 371% to $4 billion in 2017. A number of factors led to that jump, including favorable changes in discontinued operations and a $1.3 billion benefit related to US tax reform.
The company ended 2017 with $12.7 billion in net cash, some $5 billion less than it had at the end of 2016. Operating activities provided $12.3 billion, while investing activities used $16.9 billion and financing activities used $906 million.
In 2017, MetLife spun off much of its US retail operations into a new company named Brighthouse Financial. Its MetLife Insurance Company USA, Metropolitan Tower Life Insurance Company, General American Life Insurance Company (which is being merged into Metropolitan Tower Life), and several other units were included in the transaction, which took the form of an initial public offering. Together, those units represented about 20% of MetLife's total earnings.
MetLife's move to divest part of its core operations came 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 separation of its US life insurance business should calm any unrest over the group's size. The newly created company also benefits from having a lower capital and compliance burden.
In another divestiture, in mid-2016 MassMutual bought MetLife's US retail captive agency distribution channel MetLife Premier Client Group and broker dealer MetLife Securities. (US retail businesses that were not sold in the deal included the closed-block life insurance, property/casualty, and Metropolitan Life Insurance Company's life and annuity operations.)
These moves were not the first major shufflings 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. In a shift away from market-sensitive products, it will only invest in businesses that have strong rates of return, require less capital, and offer a higher ratio of free cash flow to operating earnings. 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: US; Latin America; Asia; and Europe, the Middle East, and Africa (EMEA).
Other strategic areas of focus include creating a high-performance operation with competitive prices, transforming distribution channels (especially through digital means), and connecting customers with the most appropriate products and services.
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.
Mergers and Acquisitions
In 2017, MetLife acquired Logan Circle Partners from Fortress Investment Group for some $250 million. Logan was the traditional fixed income asset management business of Fortress; it serves institutional investors and has more than $33 billion in assets under management. The purchase helped expand MetLife's investment management business for third-party customers.
Metropolitan Life Insurance was established as a stock company in 1868. It became a mutual company (owned by its policyholders) in 1915. Starting off serving mutual assistance societies for German immigrants, the company began offering auto and homeowners insurance in 1974 and entered the life insurance and annuities business in the 1980s.
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