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Segment Information
 9 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
Segment Information
2. Segment Information
Following the Separation and the elimination of the Brighthouse Financial segment, as described in Note 3, MetLife is organized into five segments: U.S.; Asia; Latin America; EMEA; and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other.
U.S.
The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into three businesses: Group Benefits, Retirement and Income Solutions and Property & Casualty.
•
The Group Benefits business offers insurance products and services which include life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, critical illness, vision and accident & health coverages, as well as prepaid legal plans. This business also sells administrative services-only arrangements to some employers.
•
The Retirement and Income Solutions business offers a broad range of annuity and investment products, including guaranteed interest contracts and other stable value products, institutional income annuities and separate account contracts for the investment management of defined benefit and defined contribution plan assets. This business also includes structured settlements and certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance nonqualified benefit programs for executives.
•
The Property & Casualty business offers personal and commercial lines of property and casualty insurance, including private passenger automobile, homeowners’ and personal excess liability insurance. In addition, Property & Casualty offers small business owners property, liability and business interruption insurance.
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.
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 and savings 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 and savings products.
MetLife Holdings
The MetLife Holdings segment consists of operations relating to products and businesses no longer actively marketed by the Company in the United States. These products and businesses include variable, universal, term and whole life, as well as variable, fixed and index-linked annuities. The MetLife Holdings segment also includes the Company’s discontinued long-term care business and the assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan.
Corporate & Other
Corporate & Other contains the excess capital, as well as certain charges and activities, not allocated to the segments, including external integration and disposition costs, internal resource costs for associates committed to acquisitions and dispositions, enterprise-wide strategic initiative restructuring charges and 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, as well as the direct to consumer portion of the U.S. Direct business). Corporate & Other also includes interest expense related to the majority of the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. In addition, Corporate & Other includes the elimination of intersegment amounts, which generally relate to affiliated reinsurance and intersegment loans, which bear interest rates commensurate with related borrowings. As a result of the Separation, Corporate & Other includes corporate overhead costs previously allocated to the former Brighthouse Financial segment.
Financial Measures and Segment Accounting Policies
Operating earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is also the Company’s GAAP 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 allows analysis of the Company’s performance relative to the Company’s business plan and facilitates comparisons to industry results.
Operating earnings is defined as operating revenues less operating expenses, both net of income tax.
The financial measures of operating revenues and operating expenses focus on the Company’s primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP and other businesses that have been or will be sold or exited by MetLife but do not meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also includes the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MetLife that do not meet the criteria to be included in results of discontinued operations under GAAP. In addition, for the three months ended March 31, 2016 and the nine months ended September 30, 2016, operating revenues and operating expenses exclude the financial impact of converting the Company’s Japan operations to calendar year-end reporting without retrospective application of this change to prior periods and is referred to as lag elimination. 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 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”); and
•
Net investment income: (i) includes earned income on derivatives 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) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to contractholder-directed unit-linked investments and (iv) 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 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 earned income on derivatives 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, integration and other 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.
The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.
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 ended September 30, 2017 and 2016. 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, income (loss) from continuing operations, net of income tax or operating earnings.
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
 
 
 
 
Three Months Ended September 30, 2017
 
U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
6,987

 
$
1,696

 
$
701

 
$
527

 
$
989

 
$
13

 
$
10,913

 
$
(37
)
 
$
10,876

Universal life and investment-type product policy fees
 
247

 
458

 
229

 
109

 
349

 
—

 
1,392

 
36

 
1,428

Net investment income
 
1,602

 
762

 
299

 
77

 
1,390

 
26

 
4,156

 
139

 
4,295

Other revenues
 
197

 
11

 
7

 
(2
)
 
37

 
65

 
315

 
(14
)
 
301

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(606
)
 
(606
)
Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(190
)
 
(190
)
Total revenues
 
9,033

 
2,927

 
1,236

 
711

 
2,765

 
104

 
16,776

 
(672
)
 
16,104

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
6,904

 
1,223

 
640

 
282

 
1,661

 
7

 
10,717

 
230

 
10,947

Interest credited to policyholder account balances
 
376

 
349

 
99

 
26

 
255

 
—

 
1,105

 
233

 
1,338

Capitalization of DAC
 
(126
)
 
(420
)
 
(94
)
 
(109
)
 
(14
)
 
(2
)
 
(765
)
 
4

 
(761
)
Amortization of DAC and VOBA
 
118

 
424

 
—

 
78

 
(70
)
 
3

 
553

 
73

 
626

Amortization of negative VOBA
 
—

 
(24
)
 
(1
)
 
(5
)
 
—

 
—

 
(30
)
 
(2
)
 
(32
)
Interest expense on debt
 
2

 
—

 
1

 
—

 
2

 
279

 
284

 
—

 
284

Other expenses
 
933

 
905

 
377

 
347

 
322

 
237

 
3,121

 
80

 
3,201

Total expenses
 
8,207

 
2,457

 
1,022

 
619

 
2,156

 
524

 
14,985

 
618

 
15,603

Provision for income tax expense (benefit)
 
280

 
156

 
51

 
21

 
199

 
(90
)
 
617

 
(1,009
)
 
(392
)
Operating earnings
 
$
546

 
$
314

 
$
163

 
$
71

 
$
410

 
$
(330
)
 
1,174

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
(672
)
 
 
 
 
Total expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
(618
)
 
 
 
 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
 
 
 
 
 
 
1,009

 
 
 
 
Income (loss) from continuing operations, net of income tax
 
 
 
 
 
 
 
 
 
 
 
 
 
$
893

 
 
 
$
893

 
 
Operating Results
 
 
 
 
Three Months Ended September 30, 2016
 
U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
5,936

 
$
1,822

 
$
653

 
$
500

 
$
1,093

 
$
41

 
$
10,045

 
$
(206
)
 
$
9,839

Universal life and investment-type product policy fees
 
245

 
394

 
227

 
104

 
357

 
—

 
1,327

 
14

 
1,341

Net investment income
 
1,590

 
707

 
311

 
81

 
1,537

 
53

 
4,279

 
330

 
4,609

Other revenues
 
192

 
12

 
11

 
17

 
105

 
22

 
359

 
(3
)
 
356

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
231

 
231

Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(543
)
 
(543
)
Total revenues
 
7,963

 
2,935

 
1,202

 
702

 
3,092

 
116

 
16,010

 
(177
)
 
15,833

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
5,894

 
1,363

 
681

 
257

 
1,853

 
31

 
10,079

 
(165
)
 
9,914

Interest credited to policyholder account balances
 
322

 
331

 
85

 
28

 
261

 
(1
)
 
1,026

 
518

 
1,544

Capitalization of DAC
 
(124
)
 
(440
)
 
(83
)
 
(103
)
 
(44
)
 
1

 
(793
)
 
23

 
(770
)
Amortization of DAC and VOBA
 
117

 
331

 
(2
)
 
106

 
219

 
1

 
772

 
(112
)
 
660

Amortization of negative VOBA
 
—

 
(46
)
 
(1
)
 
(3
)
 
—

 
—

 
(50
)
 
(5
)
 
(55
)
Interest expense on debt
 
2

 
—

 
1

 
—

 
15

 
275

 
293

 
(13
)
 
280

Other expenses
 
912

 
930

 
335

 
332

 
401

 
85

 
2,995

 
106

 
3,101

Total expenses
 
7,123

 
2,469

 
1,016

 
617

 
2,705

 
392

 
14,322

 
352

 
14,674

Provision for income tax expense (benefit)
 
288

 
142

 
53

 
11

 
121

 
(288
)
 
327

 
(192
)
 
135

Operating earnings
 
$
552

 
$
324

 
$
133

 
$
74

 
$
266

 
$
12

 
1,361

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
(177
)
 
 
 
 
Total expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
(352
)
 
 
 
 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
 
 
 
 
 
 
192

 
 
 
 
Income (loss) from continuing operations, net of income tax

 
 
 
 
 
 
 
 
 
 
 
 
 
$
1,024

 
 
 
$
1,024



Operating Results




Nine Months Ended September 30, 2017

U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated


(In millions)
Revenues


















Premiums

$
18,049


$
5,063


$
1,993


$
1,534


$
3,070


$
59


$
29,768


$
(347
)

$
29,421

Universal life and investment-type product policy fees

763


1,199


764


296


1,056


—


4,078


74


4,152

Net investment income

4,789


2,193


891


229


4,232


107


12,441


468


12,909

Other revenues

600


32


24


43


170


185


1,054


(119
)

935

Net investment gains (losses)

—


—


—


—


—


—


—


(439
)

(439
)
Net derivative gains (losses)

—


—


—


—


—


—


—


(663
)

(663
)
Total revenues

24,201

 
8,487

 
3,672

 
2,102

 
8,528

 
351

 
47,341

 
(1,026
)
 
46,315

Expenses









 



 



 
Policyholder benefits and claims and policyholder dividends

18,017


3,785


1,869


821


5,117


33


29,642


206


29,848

Interest credited to policyholder account balances

1,086


1,003


275


75


767


1


3,207


874


4,081

Capitalization of DAC

(342
)

(1,268
)

(264
)

(301
)

(71
)

(6
)

(2,252
)

34


(2,218
)
Amortization of DAC and VOBA

346


1,005


146


260


143


5


1,905


40


1,945

Amortization of negative VOBA

—


(91
)

(1
)

(13
)

—


—


(105
)

(8
)

(113
)
Interest expense on debt

8


—


4


—


22


833


867


(16
)

851

Other expenses

2,756


2,675


1,060


995


1,032


649


9,167


272


9,439

Total expenses

21,871

 
7,109

 
3,089

 
1,837

 
7,010

 
1,515

 
42,431

 
1,402

 
43,833

Provision for income tax expense (benefit)

782


459


123


47


488


(642
)

1,257


(1,405
)

(148
)
Operating earnings

$
1,548

 
$
919

 
$
460

 
$
218

 
$
1,030

 
$
(522
)

3,653





Adjustments to:













 



 
Total revenues













(1,026
)



 
Total expenses













(1,402
)



 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
 
 
 
 
 

1,405




 
Income (loss) from continuing operations, net of income tax
 
 
 
 
 
 
 
 
 
 
 
 

$
2,630




$
2,630


 
 
Operating Results
 
 
 
 
Nine Months Ended September 30, 2016
 
U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
16,127

 
$
5,161

 
$
1,885

 
$
1,519

 
$
3,312

 
$
50

 
$
28,054

 
$
(98
)
 
$
27,956

Universal life and investment-type product policy fees
 
743

 
1,114

 
764

 
294

 
1,073

 
2

 
3,990

 
137

 
4,127

Net investment income
 
4,615

 
2,003

 
809

 
244

 
4,489

 
141

 
12,301

 
226

 
12,527

Other revenues
 
589

 
45

 
26

 
56

 
512

 
70

 
1,298

 
11

 
1,309

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
598

 
598

Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,438

 
1,438

Total revenues
 
22,074

 
8,323

 
3,484

 
2,113

 
9,386

 
263

 
45,643

 
2,312

 
47,955

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
16,210

 
3,923

 
1,814

 
801

 
5,603

 
23

 
28,374

 
(56
)
 
28,318

Interest credited to policyholder account balances
 
967

 
974

 
249

 
87

 
780

 
5

 
3,062

 
757

 
3,819

Capitalization of DAC
 
(356
)
 
(1,251
)
 
(236
)
 
(310
)
 
(240
)
 
(7
)
 
(2,400
)
 
(22
)
 
(2,422
)
Amortization of DAC and VOBA
 
353

 
921

 
127

 
311

 
636

 
7

 
2,355

 
(303
)
 
2,052

Amortization of negative VOBA
 
—

 
(167
)
 
(1
)
 
(10
)
 
—

 
—

 
(178
)
 
(43
)
 
(221
)
Interest expense on debt
 
7

 
—

 
1

 
—

 
43

 
862

 
913

 
(38
)
 
875

Other expenses
 
2,772

 
2,658

 
968

 
1,001

 
1,861

 
401

 
9,661

 
351

 
10,012

Total expenses
 
19,953

 
7,058

 
2,922

 
1,880

 
8,683

 
1,291

 
41,787

 
646

 
42,433

Provision for income tax expense (benefit)
 
720

 
377

 
141

 
32

 
203

 
(658
)
 
815

 
438

 
1,253

Operating earnings
 
$
1,401

 
$
888

 
$
421

 
$
201

 
$
500

 
$
(370
)
 
3,041

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
2,312

 
 
 
 
Total expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
(646
)
 
 
 
 
Provision for income tax (expense) benefit
 
 
 
 
 
 
 
 
 
 
 
 
 
(438
)
 
 
 
 
Income (loss) from continuing operations, net of income tax
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,269

 
 
 
$
4,269

The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:
 
 
September 30, 2017
 
December 31, 2016
 
 
(In millions)
U.S.
 
$
258,651

 
$
253,683

Asia
 
134,070

 
120,656

Latin America
 
77,617

 
67,233

EMEA
 
30,244

 
25,596

MetLife Holdings
 
185,054

 
184,276

Corporate & Other (1)
 
34,879

 
247,320

Total
 
$
720,515

 
$
898,764


__________________
(1)
Includes assets of disposed subsidiary of $216,983 million at December 31, 2016.