Segment Information

9 Months Ended

Sep. 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 and 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 & 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 & 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 & 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 & health insurance, credit insurance, annuities, endowment and retirement & savings products.

Corporate & Other

Corporate & Other contains the excess capital, as well as certain charges and activities, not allocated to the segments, including external integration costs, internal resource costs for associates committed to acquisitions, enterprise-wide strategic initiative restructuring charges, and various business activities such as 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 addition to the tax impact of the adjustments mentioned above, provision for income tax expense (benefit) also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.

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 $2 million, net of $0 of income tax, and $11 million, net of $5 million of income tax, for the three months and nine months endedSeptember 30, 2013, respectively. Also, the results for Corporate & Other decreased by $3 million, net of $2 million of income tax, and $10 million, net of $6 million of income tax, for the three months and nine months endedSeptember 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 nine months endedSeptember 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 September 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	$	1,869		$	4,010		$	451		$	794		$	7,124		$	1,939		$	581		$	41		$	9,685		$	18		$	9,703
Universal life and investment-type product policy fees	1,311			180			60			328			1,879			487			127			29			2,522			106			2,628
Net investment income	1,983			473			1,493			346			4,295			730			131			37			5,193			217			5,410
Other revenues	275			103			71			7			456			27			22			13			518			—			518
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			109			109
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			478			478
Total revenues	5,438			4,766			2,075			1,475			13,754			3,183			861			120			17,918			928			18,846
Expenses
Policyholder benefits and claims and policyholder dividends	2,555			3,729			1,033			719			8,036			1,535			252			31			9,854			5			9,859
Interest credited to policyholder account balances	567			38			279			97			981			394			43			8			1,426			391			1,817
Capitalization of DAC	(239		)	(37		)	(11		)	(97		)	(384		)	(507		)	(165		)	(15		)	(1,071		)	—			(1,071		)
Amortization of DAC and VOBA	335			38			5			101			479			367			152			1			999			55			1,054
Amortization of negative VOBA	—			—			—			—			—			(89		)	(7		)	—			(96		)	(11		)	(107		)
Interest expense on debt	(1		)	—			2			—			1			—			—			291			292			3			295
Other expenses	1,156			634			139			417			2,346			1,026			454			177			4,003			44			4,047
Total expenses	4,373			4,402			1,447			1,237			11,459			2,726			729			493			15,407			487			15,894
Provision for income tax expense (benefit)	366			127			220			86			799			151			36			(330		)	656			202			858
Operating earnings	$	699		$	237		$	408		$	152		$	1,496		$	306		$	96		$	(43	)	1,855
Adjustments to:
Total revenues																									928
Total expenses																									(487		)
Provision for income tax (expense) benefit																									(202		)
Income (loss) from continuing operations, net of income tax																									$	2,094					$	2,094

	Operating Earnings
	Americas
Three Months Ended September 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	$	1,607		$	3,767		$	450		$	692		$	6,516		$	1,922		$	586		$	30		$	9,054		$	40		$	9,094
Universal life and investment-type product policy fees	1,257			171			54			222			1,704			438			100			34			2,276			96			2,372
Net investment income	1,928			459			1,384			354			4,125			696			124			53			4,998			28			5,026
Other revenues	267			103			68			—			438			22			21			5			486			(10		)	476
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			(85		)	(85		)
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			(546		)	(546		)
Total revenues	5,059			4,500			1,956			1,268			12,783			3,078			831			122			16,814			(477		)	16,337
Expenses
Policyholder benefits and claims and policyholder dividends	2,234			3,527			1,071			637			7,469			1,506			243			25			9,243			541			9,784
Interest credited to policyholder account balances	582			38			292			106			1,018			407			37			10			1,472			128			1,600
Capitalization of DAC	(318		)	(37		)	(2		)	(103		)	(460		)	(515		)	(173		)	(5		)	(1,153		)	—			(1,153		)
Amortization of DAC and VOBA	315			37			4			63			419			393			166			1			979			(138		)	841
Amortization of negative VOBA	—			—			—			(1		)	(1		)	(99		)	(13		)	—			(113		)	(13		)	(126		)
Interest expense on debt	(1		)	—			3			—			2			—			—			286			288			29			317
Other expenses	1,245			595			129			395			2,364			1,040			443			179			4,026			72			4,098
Total expenses	4,057			4,160			1,497			1,097			10,811			2,732			703			496			14,742			619			15,361
Provision for income tax expense (benefit)	343			114			161			38			656			89			43			(241		)	547			(544		)	3
Operating earnings	$	659		$	226		$	298		$	133		$	1,316		$	257		$	85		$	(133	)	1,525
Adjustments to:
Total revenues																									(477		)
Total expenses																									(619		)
Provision for income tax (expense) benefit																									544
Income (loss) from continuing operations, net of income tax																									$	973					$	973

	Operating Earnings
	Americas
Nine Months Ended September 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	$	5,405		$	12,050		$	1,438		$	2,242		$	21,135		$	5,742		$	1,762		$	116		$	28,755		$	40		$	28,795
Universal life and investment-type product policy fees	3,814			538			172			956			5,480			1,276			353			96			7,205			302			7,507
Net investment income	5,960			1,384			4,346			1,003			12,693			2,140			388			152			15,373			331			15,704
Other revenues	785			314			214			23			1,336			78			49			39			1,502			(16		)	1,486
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			(427		)	(427		)
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			1,132			1,132
Total revenues	15,964			14,286			6,170			4,224			40,644			9,236			2,552			403			52,835			1,362			54,197
Expenses
Policyholder benefits and claims and policyholder dividends	7,400			11,299			3,194			2,066			23,959			4,357			784			91			29,191			680			29,871
Interest credited to policyholder account balances	1,683			117			844			295			2,939			1,175			112			26			4,252			743			4,995
Capitalization of DAC	(722		)	(107		)	(30		)	(279		)	(1,138		)	(1,458		)	(511		)	(41		)	(3,148		)	(1		)	(3,149		)
Amortization of DAC and VOBA	1,142			109			15			261			1,527			1,067			476			4			3,074			100			3,174
Amortization of negative VOBA	—			—			—			(1		)	(1		)	(275		)	(22		)	—			(298		)	(35		)	(333		)
Interest expense on debt	(1		)	—			6			—			5			—			—			880			885			34			919
Other expenses	3,475			1,900			393			1,231			6,999			2,992			1,356			586			11,933			59			11,992
Total expenses	12,977			13,318			4,422			3,573			34,290			7,858			2,195			1,546			45,889			1,580			47,469
Provision for income tax expense (benefit)	1,024			338			611			156			2,129			425			80			(756		)	1,878			38			1,916
Operating earnings	$	1,963		$	630		$	1,137		$	495		$	4,225		$	953		$	277		$	(387	)	5,068
Adjustments to:
Total revenues																									1,362
Total expenses																									(1,580		)
Provision for income tax (expense) benefit																									(38		)
Income (loss) from continuing operations, net of income tax																									$	4,812					$	4,812

	Operating Earnings
	Americas
Nine Months Ended September 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	$	4,735		$	11,438		$	1,369		$	2,077		$	19,619		$	5,900		$	1,711		$	84		$	27,314		$	89		$	27,403
Universal life and investment-type product policy fees	3,662			521			187			682			5,052			1,324			287			105			6,768			266			7,034
Net investment income	5,876			1,384			4,176			912			12,348			2,151			372			266			15,137			1,248			16,385
Other revenues	767			316			208			9			1,300			63			82			22			1,467			(21		)	1,446
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			339			339
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			(2,866		)	(2,866		)
Total revenues	15,040			13,659			5,940			3,680			38,319			9,438			2,452			477			50,686			(945		)	49,741
Expenses
Policyholder benefits and claims and policyholder dividends	6,659			10,681			3,168			1,792			22,300			4,354			736			52			27,442			1,339			28,781
Interest credited to policyholder account balances	1,750			116			940			313			3,119			1,286			109			33			4,547			1,489			6,036
Capitalization of DAC	(1,036		)	(105		)	(25		)	(316		)	(1,482		)	(1,583		)	(542		)	(14		)	(3,621		)	—			(3,621		)
Amortization of DAC and VOBA	1,042			104			21			220			1,387			1,186			526			1			3,100			(477		)	2,623
Amortization of negative VOBA	—			—			—			(2		)	(2		)	(325		)	(41		)	—			(368		)	(42		)	(410		)
Interest expense on debt	—			1			7			—			8			—			—			855			863			96			959
Other expenses	3,788			1,761			384			1,157			7,090			3,188			1,351			489			12,118			471			12,589
Total expenses	12,203			12,558			4,495			3,164			32,420			8,106			2,139			1,416			44,081			2,876			46,957
Provision for income tax expense (benefit)	971			370			507			115			1,963			412			73			(641		)	1,807			(1,499		)	308
Operating earnings	$	1,866		$	731		$	938		$	401		$	3,936		$	920		$	240		$	(298	)	4,798
Adjustments to:
Total revenues																									(945		)
Total expenses																									(2,876		)
Provision for income tax (expense) benefit																									1,499
Income (loss) from continuing operations, net of income tax																									$	2,476					$	2,476

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

	September 30, 2014		December 31, 2013
	(In millions)
Retail	$	354,857	$	349,516
Group, Voluntary & Worksite Benefits	44,797		43,404
Corporate Benefit Funding	231,996		220,612
Latin America	73,317		69,874
Asia	124,127		119,717
EMEA	29,713		33,382
Corporate & Other	49,820		48,791
Total	$	908,627	$	885,296