Segment Information

6 Months Ended

Jun. 30, 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. 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. Voluntary & Worksite products and services include 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. The Latin America segment also 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 and are referred to as 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 decreased by $4 million, net of $2 million of income tax, and $9 million, net of $5 million of income tax, for the three months and six months endedJune 30, 2013, respectively. Also, the results for Corporate & Other decreased by $4 million, net of $2 million of income tax, and $7 million, net of $4 million of income tax, for the three months and six months endedJune 30, 2013, respectively.

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 and six months endedJune 30, 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 June 30, 2014	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,812		$	4,038		$	686		$	780		$	7,316		$	1,913		$	584		$	40		$	9,853		$	20		$	9,873
Universal life and investment-type product policy fees	1,256			181			55			317			1,809			400			117			34			2,360			98			2,458
Net investment income	1,963			458			1,443			332			4,196			717			134			48			5,095			164			5,259
Other revenues	265			104			75			9			453			24			11			5			493			(3		)	490
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			(125		)	(125		)
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			311			311
Total revenues	5,296			4,781			2,259			1,438			13,774			3,054			846			127			17,801			465			18,266
Expenses
Policyholder benefits and claims and policyholder dividends	2,438			3,789			1,273			743			8,243			1,425			271			25			9,964			421			10,385
Interest credited to policyholder account balances	561			39			287			100			987			394			35			9			1,425			284			1,709
Capitalization of DAC	(249		)	(36		)	(18		)	(93		)	(396		)	(457		)	(170		)	(8		)	(1,031		)	(1		)	(1,032		)
Amortization of DAC and VOBA	378			35			6			81			500			362			160			3			1,025			37			1,062
Amortization of negative VOBA	—			—			—			(1		)	(1		)	(92		)	(6		)	—			(99		)	(12		)	(111		)
Interest expense on debt	—			—			2			—			2			—			—			297			299			13			312
Other expenses	1,177			638			134			412			2,361			976			446			196			3,979			12			3,991
Total expenses	4,305			4,465			1,684			1,242			11,696			2,608			736			522			15,562			754			16,316
Provision for income tax expense (benefit)	339			111			201			36			687			127			17			(213		)	618			(44		)	574
Operating earnings	$	652		$	205		$	374		$	160		$	1,391		$	319		$	93		$	(182	)	1,621
Adjustments to:
Total revenues																									465
Total expenses																									(754		)
Provision for income tax (expense) benefit																									44
Income (loss) from continuing operations, net of income tax																									$	1,376					$	1,376

	Operating Earnings
	Americas
Three Months Ended June 30, 2013	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,581		$	3,797		$	503		$	710		$	6,591		$	1,980		$	558		$	28		$	9,157		$	1		$	9,158
Universal life and investment-type product policy fees	1,238			170			65			235			1,708			442			96			35			2,281			90			2,371
Net investment income	1,987			472			1,402			281			4,142			723			120			72			5,057			225			5,282
Other revenues	257			105			67			5			434			28			34			4			500			(10		)	490
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			110			110
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			(1,690		)	(1,690		)
Total revenues	5,063			4,544			2,037			1,231			12,875			3,173			808			139			16,995			(1,274		)	15,721
Expenses
Policyholder benefits and claims and policyholder dividends	2,272			3,514			1,080			601			7,467			1,433			256			18			9,174			115			9,289
Interest credited to policyholder account balances	589			39			305			103			1,036			437			37			11			1,521			325			1,846
Capitalization of DAC	(344		)	(35		)	(6		)	(108		)	(493		)	(522		)	(192		)	(5		)	(1,212		)	—			(1,212		)
Amortization of DAC and VOBA	396			33			6			83			518			392			195			—			1,105			(147		)	958
Amortization of negative VOBA	—			—			—			—			—			(113		)	(11		)	—			(124		)	(14		)	(138		)
Interest expense on debt	1			1			2			1			5			—			(1		)	283			287			34			321
Other expenses	1,265			578			116			390			2,349			1,054			460			146			4,009			87			4,096
Total expenses	4,179			4,130			1,503			1,070			10,882			2,681			744			453			14,760			400			15,160
Provision for income tax expense (benefit)	303			139			188			36			666			162			(4		)	(205		)	619			(566		)	53
Operating earnings	$	581		$	275		$	346		$	125		$	1,327		$	330		$	68		$	(109	)	1,616
Adjustments to:
Total revenues																									(1,274		)
Total expenses																									(400		)
Provision for income tax (expense) benefit																									566
Income (loss) from continuing operations, net of income tax																									$	508					$	508

	Operating Earnings
	Americas
Six Months Ended June 30, 2014	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	3,536		$	8,040		$	987		$	1,448		$	14,011		$	3,803		$	1,181		$	75		$	19,070		$	22		$	19,092
Universal life and investment-type product policy fees	2,503			358			112			628			3,601			789			226			67			4,683			196			4,879
Net investment income	3,977			911			2,853			657			8,398			1,410			257			115			10,180			114			10,294
Other revenues	510			211			143			16			880			51			27			26			984			(16		)	968
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			(536		)	(536		)
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			654			654
Total revenues	10,526			9,520			4,095			2,749			26,890			6,053			1,691			283			34,917			434			35,351
Expenses
Policyholder benefits and claims and policyholder dividends	4,845			7,570			2,161			1,347			15,923			2,822			532			60			19,337			675			20,012
Interest credited to policyholder account balances	1,116			79			565			198			1,958			781			69			18			2,826			352			3,178
Capitalization of DAC	(483		)	(70		)	(19		)	(182		)	(754		)	(951		)	(346		)	(26		)	(2,077		)	(1		)	(2,078		)
Amortization of DAC and VOBA	807			71			10			160			1,048			700			324			3			2,075			45			2,120
Amortization of negative VOBA	—			—			—			(1		)	(1		)	(186		)	(15		)	—			(202		)	(24		)	(226		)
Interest expense on debt	—			—			4			—			4			—			—			589			593			31			624
Other expenses	2,319			1,266			254			814			4,653			1,966			902			409			7,930			15			7,945
Total expenses	8,604			8,916			2,975			2,336			22,831			5,132			1,466			1,053			30,482			1,093			31,575
Provision for income tax expense (benefit)	658			211			391			70			1,330			274			44			(426		)	1,222			(164		)	1,058
Operating earnings	$	1,264		$	393		$	729		$	343		$	2,729		$	647		$	181		$	(344	)	3,213
Adjustments to:
Total revenues																									434
Total expenses																									(1,093		)
Provision for income tax (expense) benefit																									164
Income (loss) from continuing operations, net of income tax																									$	2,718					$	2,718

	Operating Earnings
	Americas
Six Months Ended June 30, 2013	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	3,128		$	7,671		$	919		$	1,385		$	13,103		$	3,978		$	1,125		$	54		$	18,260		$	49		$	18,309
Universal life and investment-type product policy fees	2,405			350			133			460			3,348			886			187			71			4,492			170			4,662
Net investment income	3,948			925			2,792			558			8,223			1,455			248			213			10,139			1,220			11,359
Other revenues	500			213			140			9			862			41			61			17			981			(11		)	970
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			424			424
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			(2,320		)	(2,320		)
Total revenues	9,981			9,159			3,984			2,412			25,536			6,360			1,621			355			33,872			(468		)	33,404
Expenses
Policyholder benefits and claims and policyholder dividends	4,425			7,154			2,097			1,155			14,831			2,848			493			27			18,199			798			18,997
Interest credited to policyholder account balances	1,168			78			648			207			2,101			879			72			23			3,075			1,361			4,436
Capitalization of DAC	(718		)	(68		)	(23		)	(213		)	(1,022		)	(1,068		)	(369		)	(9		)	(2,468		)	—			(2,468		)
Amortization of DAC and VOBA	727			67			17			157			968			793			360			—			2,121			(339		)	1,782
Amortization of negative VOBA	—			—			—			(1		)	(1		)	(226		)	(28		)	—			(255		)	(29		)	(284		)
Interest expense on debt	1			1			4			—			6			—			—			569			575			67			642
Other expenses	2,543			1,166			255			762			4,726			2,148			908			310			8,092			399			8,491
Total expenses	8,146			8,398			2,998			2,067			21,609			5,374			1,436			920			29,339			2,257			31,596
Provision for income tax expense (benefit)	628			256			346			77			1,307			323			30			(400		)	1,260			(955		)	305
Operating earnings	$	1,207		$	505		$	640		$	268		$	2,620		$	663		$	155		$	(165	)	3,273
Adjustments to:
Total revenues																									(468		)
Total expenses																									(2,257		)
Provision for income tax (expense) benefit																									955
Income (loss) from continuing operations, net of income tax																									$	1,503					$	1,503

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

	June 30, 2014		December 31, 2013
	(In millions)
Retail	$	360,783	$	349,516
Group, Voluntary & Worksite Benefits	45,401		43,404
Corporate Benefit Funding	229,128		220,612
Latin America	74,437		69,874
Asia	124,475		119,717
EMEA	31,178		33,382
Corporate & Other	45,718		48,791
Total	$	911,120	$	885,296