Segment Information

3 Months Ended

Mar. 31, 2015

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.

As anticipated, in the first quarter of 2015, the Company implemented certain segment reporting changes related to the (i) measurement of segment operating earnings, which included revising the Company’s capital allocation methodology, and (ii) the realignment of consumer direct business. These changes were applied retrospectively and did not have an impact on total consolidated operating earnings or net income.

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, Voluntary & Worksite Benefits insurance products and services include life, dental, group short- and long-term disability and accidental death and dismemberment (“AD&D”) coverages. In addition, the Group, Voluntary & Worksite Benefits segment offers property & casualty insurance, including private passenger automobile, homeowners and personal excess liability, which is offered to employees on a voluntary basis, long-term care, critical illness and accident & health coverages, as well as prepaid legal plans.

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. direct business, comprised of group and individual products sold through sponsoring organizations, affinity groups and direct to consumer. 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, various start-up businesses (including expatriate benefits insurance and the investment management business through which the Company offers fee-based investment management services to institutional clients) and certain run-off businesses. 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. 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 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 2015, the Company implemented certain segment reporting changes related to the (i) measurement of segment operating earnings, which included revising the Company’s capital allocation methodology, and (ii) the realignment of consumer direct business. Consequently, prior period results for the three months endedMarch 31, 2014 were impacted as follows:

• Retail’s operating earnings increased by $24 million, net of $44 million of income tax benefit;

• Group, Voluntary & Worksite Benefits’ operating earnings increased by $2 million, net of $1 million of income tax;

• Corporate Benefit Funding’s operating earnings decreased by $15 million, net of $8 million of income tax benefit;

• Latin America’s operating earnings decreased by $25 million, net of $16 million of income tax benefit;

• Asia’s operating earnings increased by $5 million, net of $1 million of income tax;

• EMEA’s operating earnings decreased by $17 million, net of $7 million of income tax benefit; and

• Corporate & Other’s operating earnings increased by $26 million, net of $73 million of income tax.

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, 2015 and 2014. 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, coupled with considerations of local capital requirements, 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 while applying an industry standard method for the inclusion of diversification benefits among risk types.The Company’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.

Segment 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 Results
	Americas
Three Months Ended March 31, 2015	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,749		$	4,117		$	418		$	699		$	6,983		$	1,752		$	508		$	10		$	9,253		$	—		$	9,253
Universal life and investment-type product policy fees	1,236			188			54			294			1,772			397			102			23			2,294			100			2,394
Net investment income	1,980			478			1,430			218			4,106			684			83			109			4,982			479			5,461
Other revenues	251			113			71			10			445			28			10			20			503			(8		)	495
Net investment gains (losses)	—			—			—			—			—			—			—			—			—			286			286
Net derivative gains (losses)	—			—			—			—			—			—			—			—			—			821			821
Total revenues	5,216			4,896			1,973			1,221			13,306			2,861			703			162			17,032			1,678			18,710
Expenses
Policyholder benefits and claims and policyholder dividends	2,449			3,835			991			581			7,856			1,340			239			12			9,447			149			9,596
Interest credited to policyholder account balances	542			37			293			86			958			337			30			6			1,331			664			1,995
Capitalization of DAC	(247		)	(36		)	(6		)	(111		)	(400		)	(435		)	(133		)	—			(968		)	—			(968		)
Amortization of DAC and VOBA	375			41			5			78			499			326			128			—			953			72			1,025
Amortization of negative VOBA	—			—			—			—			—			(86		)	(4		)	—			(90		)	(10		)	(100		)
Interest expense on debt	(1		)	—			1			—			—			—			—			297			297			1			298
Other expenses	1,176			664			124			425			2,389			904			362			145			3,800			5			3,805
Total expenses	4,294			4,541			1,408			1,059			11,302			2,386			622			460			14,770			881			15,651
Provision for income tax expense (benefit)	269			127			196			31			623			148			11			(188		)	594			302			896
Operating earnings	$	653		$	228		$	369		$	131		$	1,381		$	327		$	70		$	(110	)	1,668
Adjustments to:
Total revenues																									1,678
Total expenses																									(881		)
Provision for income tax (expense) benefit																									(302		)
Income (loss) from continuing operations, net of income tax																									$	2,163					$	2,163

	Operating Results
	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		$	683		$	6,710		$	1,890		$	597		$	20		$	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	1,994			456			1,382			297			4,129			700			107			149			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	5,210			4,742			1,808			1,298			13,058			3,006			829			223			17,116			(31		)	17,085
Expenses
Policyholder benefits and claims and policyholder dividends	2,407			3,781			888			616			7,692			1,397			261			23			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		)	(107		)	(376		)	(494		)	(176		)	—			(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			115			436			2,321			991			464			175			3,951			3			3,954
Total expenses	4,299			4,451			1,286			1,122			11,158			2,525			738			499			14,920			339			15,259
Provision for income tax expense (benefit)	275			101			182			18			576			148			20			(140		)	604			(120		)	484
Operating earnings	$	636		$	190		$	340		$	158		$	1,324		$	333		$	71		$	(136	)	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

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

	March 31, 2015		December 31, 2014
	(In millions)
Retail	$	363,783	$	359,188
Group, Voluntary & Worksite Benefits	48,474		46,483
Corporate Benefit Funding	236,925		228,543
Latin America	72,074		72,259
Asia	116,278		117,894
EMEA	27,991		29,217
Corporate & Other	54,265		48,753
Total	$	919,790	$	902,337