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Segment Information
 12 Months Ended
Dec. 31, 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, 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 capital market investment products, institutional income annuities, stable value and pension risk transfer products. This business also includes products to fund tort settlements, as well as postretirement benefits and company-, bank- or trust-owned life insurance.
•
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 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, credit insurance 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 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, such as variable, universal, term and whole life insurance, variable, fixed and index-linked annuities, long-term care insurance, as well as the assumed variable annuity guarantees 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, for the years ended 2016 and 2015, Corporate & Other includes corporate overhead costs previously allocated to the former Brighthouse Financial segment.
Financial Measures and Segment Accounting Policies
Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company’s GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for income (loss) from continuing operations, net of income tax. The Company believes the presentation of adjusted 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. Adjusted earnings allows analysis of the Company’s performance relative to the Company’s business plan and facilitates comparisons to industry results.
Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax.
The financial measures of adjusted revenues and adjusted 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 year ended December 31, 2016, adjusted revenues and adjusted 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. Adjusted revenues also excludes net investment gains (losses) and net derivative gains (losses). Adjusted expenses also excludes goodwill impairments.
The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted 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 GMIB fees (“GMIB Fees”);
•
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 adjusted 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 adjusted 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 DAC and 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.
Adjusted 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 years ended December 31, 2017, 2016 and 2015 and at December 31, 2017 and 2016. The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except for adjusted 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 adjusted 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.
 
 
 
 
 
 
 
Year Ended December 31, 2017
 
U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
23,632

 
$
6,755

 
$
2,693

 
$
2,061

 
$
4,144

 
$
54

 
$
39,339

 
$
(347
)
 
$
38,992

Universal life and investment-type product policy fees
 
1,012

 
1,584

 
1,044

 
405

 
1,361

 
1

 
5,407

 
103

 
5,510

Net investment income
 
6,396

 
2,985

 
1,219

 
309

 
5,607

 
28

 
16,544

 
819

 
17,363

Other revenues
 
806

 
43

 
32

 
58

 
244

 
271

 
1,454

 
(113
)
 
1,341

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(308
)
 
(308
)
Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(590
)
 
(590
)
Total revenues
 
31,846

 
11,367

 
4,988

 
2,833

 
11,356

 
354

 
62,744

 
(436
)
 
62,308

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
23,627

 
5,075

 
2,535

 
1,077

 
7,000

 
26

 
39,340

 
204

 
39,544

Interest credited to policyholder account balances
 
1,474

 
1,351

 
369

 
100

 
1,018

 
1

 
4,313

 
1,294

 
5,607

Capitalization of DAC
 
(458
)
 
(1,710
)
 
(364
)
 
(414
)
 
(82
)
 
(8
)
 
(3,036
)
 
34

 
(3,002
)
Amortization of DAC and VOBA
 
459

 
1,300

 
224

 
357

 
302

 
6

 
2,648

 
33

 
2,681

Amortization of negative VOBA
 
—

 
(111
)
 
(1
)
 
(19
)
 
—

 
—

 
(131
)
 
(9
)
 
(140
)
Interest expense on debt
 
11

 
—

 
5

 
—

 
24

 
1,105

 
1,145

 
(16
)
 
1,129

Other expenses
 
3,682

 
3,613

 
1,479

 
1,376

 
1,365

 
894

 
12,409

 
544

 
12,953

Total expenses
 
28,795

 
9,518

 
4,247

 
2,477

 
9,627

 
2,024

 
56,688

 
2,084

 
58,772

Provision for income tax expense (benefit)
 
1,024

 
620

 
156

 
59

 
547

 
(688
)
 
1,718

 
(3,188
)
 
(1,470
)
Adjusted earnings
 
$
2,027

 
$
1,229

 
$
585

 
$
297

 
$
1,182

 
$
(982
)
 
4,338

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
(436
)
 
 
 
 
Total expenses
 
(2,084
)
 
 
 
 
Provision for income tax (expense) benefit
 
3,188

 
 
 
 
Income (loss) from continuing operations, net of income tax
 
$
5,006

 
 
 
$
5,006

At December 31, 2017
 
U.S.
 
Asia (1)
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
 
(In millions)
Total assets
 
$
255,428

 
$
136,928

 
$
79,670

 
$
30,500

 
$
183,160

 
$
34,206

 
$
719,892

Separate account assets
 
$
81,243

 
$
10,032

 
$
56,218

 
$
5,975

 
$
51,533

 
$
—

 
$
205,001

Separate account liabilities
 
$
81,243

 
$
10,032

 
$
56,218

 
$
5,975

 
$
51,533

 
$
—

 
$
205,001

__________________
(1)
Total assets includes $111.0 billion of assets from the Japan operations which represents 15% of total consolidated assets.
 
 
 
 
 
 
 
Year Ended December 31, 2016
 
U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
21,501

 
$
6,902

 
$
2,529

 
$
2,027

 
$
4,506

 
$
40

 
$
37,505

 
$
(303
)
 
$
37,202

Universal life and investment-type product policy fees
 
989

 
1,488

 
1,025

 
391

 
1,436

 
2

 
5,331

 
152

 
5,483

Net investment income
 
6,206

 
2,707

 
1,084

 
318

 
5,944

 
178

 
16,437

 
353

 
16,790

Other revenues
 
784

 
61

 
34

 
73

 
581

 
110

 
1,643

 
42

 
1,685

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
317

 
317

Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(690
)
 
(690
)
Total revenues
 
29,480

 
11,158

 
4,672

 
2,809

 
12,467

 
330

 
60,916

 
(129
)
 
60,787

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
21,591

 
5,211

 
2,443

 
1,067

 
7,523

 
41

 
37,876

 
(295
)
 
37,581

Interest credited to policyholder account balances
 
1,302

 
1,298

 
328

 
112

 
1,042

 
6

 
4,088

 
1,088

 
5,176

Capitalization of DAC
 
(471
)
 
(1,668
)
 
(321
)
 
(403
)
 
(281
)
 
(7
)
 
(3,151
)
 
(1
)
 
(3,152
)
Amortization of DAC and VOBA
 
471

 
1,236

 
184

 
408

 
736

 
8

 
3,043

 
(325
)
 
2,718

Amortization of negative VOBA
 
—

 
(208
)
 
(1
)
 
(13
)
 
—

 
—

 
(222
)
 
(47
)
 
(269
)
Interest expense on debt
 
9

 
—

 
2

 
—

 
57

 
1,139

 
1,207

 
(50
)
 
1,157

Other expenses
 
3,706

 
3,586

 
1,336

 
1,323

 
2,392

 
597

 
12,940

 
355

 
13,295

Total expenses
 
26,608

 
9,455

 
3,971

 
2,494

 
11,469

 
1,784

 
55,781

 
725

 
56,506

Provision for income tax expense (benefit)
 
976

 
479

 
158

 
42

 
292

 
(948
)
 
999

 
(306
)
 
693

Adjusted earnings
 
$
1,896

 
$
1,224

 
$
543

 
$
273

 
$
706

 
$
(506
)
 
4,136



 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
(129
)
 
 
 
 
Total expenses
 
(725
)
 
 
 
 
Provision for income tax (expense) benefit
 
306

 
 
 
 
Income (loss) from continuing operations, net of income tax
 
$
3,588

 
 
 
$
3,588

At December 31, 2016
 
U.S.
 
Asia (1)
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other (2)
 
Total
 
 
(In millions)
Total assets
 
$
253,926

 
$
120,656

 
$
67,233

 
$
25,596

 
$
183,832

 
$
247,521

 
$
898,764

Separate account assets
 
$
85,950

 
$
8,020

 
$
48,455

 
$
4,329

 
$
48,823

 
$
1

 
$
195,578

Separate account liabilities
 
$
85,950

 
$
8,020

 
$
48,455

 
$
4,329

 
$
48,823

 
$
1

 
$
195,578

__________________
(1)
Total assets includes $98.0 billion of assets from the Japan operations which represents 11% of total consolidated assets.
(2)
Includes assets of disposed subsidiary of $216,983 million at December 31, 2016.
 
 
 
 
 
 
 
Year Ended December 31, 2015
 
U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
20,861

 
$
6,937

 
$
2,581

 
$
2,036

 
$
4,545

 
$
(92
)
 
$
36,868

 
$
(465
)
 
$
36,403

Universal life and investment-type product policy fees
 
943

 
1,542

 
1,117

 
424

 
1,482

 
(4
)
 
5,504

 
66

 
5,570

Net investment income
 
6,183

 
2,675

 
1,038

 
326

 
6,189

 
260

 
16,671

 
(466
)
 
16,205

Other revenues
 
751

 
105

 
41

 
61

 
930

 
69

 
1,957

 
(30
)
 
1,927

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
609

 
609

Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
629

 
629

Total revenues
 
28,738

 
11,259

 
4,777

 
2,847

 
13,146

 
233

 
61,000

 
343

 
61,343

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
20,899

 
5,266

 
2,408

 
988

 
7,346

 
(114
)
 
36,793

 
(293
)
 
36,500

Interest credited to policyholder account balances
 
1,216

 
1,309

 
349

 
120

 
1,062

 
23

 
4,079

 
336

 
4,415

Capitalization of DAC
 
(493
)
 
(1,720
)
 
(341
)
 
(472
)
 
(410
)
 
(3
)
 
(3,439
)
 
120

 
(3,319
)
Amortization of DAC and VOBA
 
471

 
1,253

 
271

 
497

 
577

 
(1
)
 
3,068

 
116

 
3,184

Amortization of negative VOBA
 
—

 
(309
)
 
(1
)
 
(16
)
 
—

 
—

 
(326
)
 
(35
)
 
(361
)
Interest expense on debt
 
4

 
—

 
—

 
—

 
55

 
1,169

 
1,228

 
(60
)
 
1,168

Other expenses
 
3,685

 
3,611

 
1,429

 
1,469

 
2,694

 
935

 
13,823

 
282

 
14,105

Total expenses
 
25,782

 
9,410

 
4,115

 
2,586

 
11,324

 
2,009

 
55,226

 
466

 
55,692

Provision for income tax expense (benefit)
 
1,009

 
461

 
37

 
21

 
582

 
(366
)
 
1,744

 
(154
)
 
1,590

Adjusted earnings
 
$
1,947

 
$
1,388

 
$
625

 
$
240

 
$
1,240

 
$
(1,410
)
 
4,030

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
343

 
 
 
 
Total expenses
 
(466
)
 
 
 
 
Provision for income tax (expense) benefit
 
154

 
 
 
 
Income (loss) from continuing operations, net of income tax
 
$
4,061

 
 
 
$
4,061

The following table presents total premiums, universal life and investment-type product policy fees and other revenues by major product groups of the Company’s segments, as well as Corporate & Other:
 
Years Ended December 31,
 
2017
 
2016
 
2015
 
(In millions)
Life insurance
$
20,330

 
$
20,436

 
$
20,847

Accident & health insurance
14,002

 
14,128

 
13,109

Annuities
6,999

 
5,552

 
5,730

Property & casualty insurance
3,613

 
3,560

 
3,504

Non-insurance
899

 
694

 
710

Total
$
45,843

 
$
44,370

 
$
43,900

The following table presents total premiums, universal life and investment-type product policy fees and other revenues associated with the Company’s U.S. and foreign operations:
 
Years Ended December 31,
 
2017
 
2016
 
2015
 
(In millions)
U.S.
$
30,971

 
$
29,166

 
$
29,094

Foreign:
 
 
 
 
 
Japan
6,444

 
7,089

 
6,264

Other
8,428

 
8,115

 
8,542

Total
$
45,843

 
$
44,370

 
$
43,900

Revenues derived from any customer did not exceed 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2017, 2016 and 2015.