Segment Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

2. Segment Information

MetLife is organized into six segments, reflecting three broad geographic regions: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, the “Americas”); Asia; and EMEA. In addition, the Company reports certain of its results of operations in Corporate & Other.

Americas

The Americas consists of the following segments:

Retail

The Retail segment offers a broad range of protection products and services and a variety of annuities to individuals and employees of corporations and other institutions, and is organized into two businesses: Life & Other and Annuities. Life & Other insurance products and services include variable life, universal life, term life and whole life products. Additionally, through broker-dealer affiliates, the Company offers a full range of mutual funds and other securities products. Life & Other products and services also include individual disability income products and personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance. Annuities includes a variety of variable and fixed annuities which provide for both asset accumulation and asset distribution needs.

Group, Voluntary & Worksite Benefits

The Group, Voluntary & Worksite Benefits segment offers a broad range of protection products and services to individuals and corporations, as well as other institutions and their respective employees, and is organized into two businesses: Group and Voluntary & Worksite. Group insurance products and services include variable life, universal life and term life products. Group insurance products and services also include dental, group short- and long-term disability and accidental death & dismemberment (“AD&D”) coverages. The Voluntary & Worksite business includes personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance offered to employees on a voluntary basis. The Voluntary & Worksite business also includes long-term care, prepaid legal plans and critical illness products.

Corporate Benefit Funding

The Corporate Benefit Funding segment offers a broad range of annuity and investment products, including guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment management of defined benefit and defined contribution plan assets. This segment also includes structured settlements and certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance non-qualified benefit programs for executives.

Latin America

The Latin America segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident and health insurance, group medical, dental, credit insurance, endowment and retirement & savings products written in Latin America. Starting in the first quarter of 2013, the Latin America segment includes U.S. sponsored direct business, comprised of group and individual products sold through sponsoring organizations and affinity groups. Products included are life, dental, group short- and long-term disability, AD&D coverages, property & casualty and other accident and health coverages, as well as non-insurance products such as identity protection.

Asia

The Asia segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include whole life, term life, variable life, universal life, accident and health insurance, fixed and variable annuities, credit insurance and endowment products.

EMEA

The EMEA segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident and health insurance, credit insurance, annuities, endowment and retirement & savings products.

Corporate & Other

Corporate & Other contains the excess capital not allocated to the segments, external integration costs, internal resource costs for associates committed to acquisitions, enterprise-wide strategic initiative restructuring charges, and various business activities including start-up and certain run-off businesses. Start-up businesses include expatriate benefits insurance, as well as direct and digital marketing products. Corporate & Other also includes assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan. Under this in-force reinsurance agreement, the Company reinsures living and death benefit guarantees issued in connection with variable annuity products. Corporate & Other also includes the investment management business through which the Company offers fee-based investment management services to institutional clients. Additionally, Corporate & Other includes interest expense related to the majority of the Company’s outstanding debt and expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes the elimination of intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings.

Financial Measures and Segment Accounting Policies

Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is the Company’s measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for income (loss) from continuing operations, net of income tax. The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.

Operating earnings is defined as operating revenues less operating expenses, both net of income tax.

Operating revenues and operating expenses exclude results of discontinued operations and other businesses that have been or will be sold or exited by MetLife (“Divested Businesses”). Operating revenues also excludes net investment gains (losses) and net derivative gains (losses). Operating expenses also excludes goodwill impairments.

The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating revenues:

• Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIBs”) fees (“GMIB Fees”);

• Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

• Other revenues are adjusted for settlements of foreign currency earnings hedges.

The following additional adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses:

• Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through adjustments, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);

• Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances (“PABs”) but do not qualify for hedge accounting treatment and excludes amounts related to net investment income earned on contractholder-directed unit-linked investments;

• Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;

• Amortization of negative VOBA excludes amounts related to Market Value Adjustments;

• Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

• Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) acquisition and integration costs.

Operating earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

In the first quarter of 2014, MetLife, Inc. began reporting the operations of MAL as divested business. See Note 3. Consequently, the results for Corporate Benefit Funding and Corporate & Other have decreased by $5 million, net of $3 million of income tax, and $3 million, net of $2 million of income tax, respectively, for the three months ended March 31, 2013.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the three months endedMarch 31, 2014 and 2013. The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except for operating earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below.

Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in the Company’s business.

The Company’s economic capital model aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon and applying an industry standard method for the inclusion of diversification benefits among risk types.

For the Company’s domestic segments, net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, operating earnings or income (loss) from continuing operations, net of income tax.

Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.

	Operating Earnings
	Americas
Three Months Ended March 31, 2014	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,724		$	4,002		$	301		$	668		$	6,695		$	1,890		$	597		$	35		$	9,217		$	2		$	9,219
Universal life and investment-type product policy fees	1,247			177			57			311			1,792			389			109			33			2,323			98			2,421
Net investment income	2,014			453			1,410			325			4,202			693			123			67			5,085			(50		)	5,035
Other revenues	245			107			68			7			427			27			16			21			491			(13		)	478
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			(411		)	(411		)
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			343			343
Total revenues	5,230			4,739			1,836			1,311			13,116			2,999			845			156			17,116			(31		)	17,085
Expenses
Policyholder benefits and claims and policyholder dividends	2,407			3,781			888			604			7,680			1,397			261			35			9,373			254			9,627
Interest credited to policyholder account balances	555			40			278			98			971			387			34			9			1,401			68			1,469
Capitalization of DAC	(234		)	(34		)	(1		)	(89		)	(358		)	(494		)	(176		)	(18		)	(1,046		)	—			(1,046		)
Amortization of DAC and VOBA	429			36			4			79			548			338			164			—			1,050			8			1,058
Amortization of negative VOBA	—			—			—			—			—			(94		)	(9		)	—			(103		)	(12		)	(115		)
Interest expense on debt	—			—			2			—			2			—			—			292			294			18			312
Other expenses	1,142			628			120			402			2,292			990			456			213			3,951			3			3,954
Total expenses	4,299			4,451			1,291			1,094			11,135			2,524			730			531			14,920			339			15,259
Provision for income tax expense (benefit)	319			100			190			34			643			147			27			(213		)	604			(120		)	484
Operating earnings	$	612		$	188		$	355		$	183		$	1,338		$	328		$	88		$	(162	)	1,592
Adjustments to:
Total revenues																									(31		)
Total expenses																									(339		)
Provision for income tax (expense) benefit																									120
Income (loss) from continuing operations, net of income tax																									$	1,342					$	1,342

	Operating Earnings
	Americas
Three Months Ended March 31, 2013	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,547		$	3,874		$	416		$	675		$	6,512		$	1,998		$	567		$	26		$	9,103		$	48		$	9,151
Universal life and investment-type product policy fees	1,167			180			68			225			1,640			444			91			36			2,211			80			2,291
Net investment income	1,961			453			1,390			277			4,081			732			128			141			5,082			995			6,077
Other revenues	243			108			73			4			428			13			27			13			481			(1		)	480
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			314			314
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			(630		)	(630		)
Total revenues	4,918			4,615			1,947			1,181			12,661			3,187			813			216			16,877			806			17,683
Expenses
Policyholder benefits and claims and policyholder dividends	2,153			3,640			1,017			554			7,364			1,415			237			9			9,025			683			9,708
Interest credited to policyholder account balances	579			39			343			104			1,065			442			35			12			1,554			1,036			2,590
Capitalization of DAC	(374		)	(33		)	(17		)	(105		)	(529		)	(546		)	(177		)	(4		)	(1,256		)	—			(1,256		)
Amortization of DAC and VOBA	331			34			11			74			450			401			165			—			1,016			(192		)	824
Amortization of negative VOBA	—			—			—			(1		)	(1		)	(113		)	(17		)	—			(131		)	(15		)	(146		)
Interest expense on debt	—			—			2			(1		)	1			—			1			286			288			33			321
Other expenses	1,278			588			139			372			2,377			1,094			448			164			4,083			312			4,395
Total expenses	3,967			4,268			1,495			997			10,727			2,693			692			467			14,579			1,857			16,436
Provision for income tax expense (benefit)	325			117			158			41			641			161			34			(195		)	641			(389		)	252
Operating earnings	$	626		$	230		$	294		$	143		$	1,293		$	333		$	87		$	(56	)	1,657
Adjustments to:
Total revenues																									806
Total expenses																									(1,857		)
Provision for income tax (expense) benefit																									389
Income (loss) from continuing operations, net of income tax																									$	995					$	995

The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:

	March 31, 2014		December 31, 2013
	(In millions)
Retail	$	354,461	$	349,516
Group, Voluntary & Worksite Benefits	44,346		43,404
Corporate Benefit Funding	223,163		220,612
Latin America	71,778		69,874
Asia	121,088		119,717
EMEA	30,522		33,382
Corporate & Other	45,545		48,791
Total	$	890,903	$	885,296