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Segment Information
 12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Segment Information
2. Segment Information
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 (“RIS”) and Property & Casualty.
•
The Group Benefits business offers 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 ASO arrangements to some employers.
•
The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, tort settlements, and capital markets investment products, as well as solutions for funding 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 to 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 to other institutions, and their respective employees, which include whole and term life, endowments, universal and variable life, accident & health insurance and fixed and variable annuities.
Latin America
The Latin America segment offers a broad range of products to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, retirement and savings products, accident & health insurance and credit insurance.
EMEA
The EMEA segment offers a broad range of products to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, accident & health insurance, retirement and savings products and credit insurance.
MetLife Holdings
The MetLife Holdings segment consists of operations relating to products and businesses that the Company no longer actively markets in the United States, such as variable, universal, term and whole life insurance, variable, fixed and index-linked annuities, and 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 and developing businesses (including the investment management business through which the Company, as a manager of assets such as global fixed income and real estate, provides differentiated investment solutions to institutional investors worldwide). Additionally, Corporate & Other includes run-off businesses. 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, investment expenses and intersegment loans, which bear interest rates commensurate with related borrowings. As a result of the Separation, for the year ended 2016, 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 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 equity securities, (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (v) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP; and
•
Other revenues is adjusted for settlements of foreign currency earnings hedges and excludes fees received in association with services provided under transition service agreements (“TSA fees”).
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 certain amounts related to net investment income earned on contractholder-directed equity securities;
•
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. Other expenses includes TSA fees.
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, 2018, 2017 and 2016 and at December 31, 2018 and 2017. 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, 2018
 
U.S.
 
Asia
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
Adjustments
 
Total
Consolidated
 
 
(In millions)
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
28,186

 
$
6,766

 
$
2,760

 
$
2,131

 
$
3,879

 
$
118

 
$
43,840

 
$
—

 
$
43,840

Universal life and investment-type product policy fees
 
1,053

 
1,630

 
1,050

 
431

 
1,218

 
—

 
5,382

 
120

 
5,502

Net investment income
 
6,977

 
3,317

 
1,239

 
293

 
5,379

 
178

 
17,383

 
(1,217
)
 
16,166

Other revenues
 
821

 
51

 
35

 
66

 
250

 
333

 
1,556

 
324

 
1,880

Net investment gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(298
)
 
(298
)
Net derivative gains (losses)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
851

 
851

Total revenues
 
37,037

 
11,764

 
5,084

 
2,921

 
10,726

 
629

 
68,161

 
(220
)
 
67,941

Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims and policyholder dividends
 
27,765

 
5,326

 
2,602

 
1,127

 
6,833

 
80

 
43,733

 
174

 
43,907

Interest credited to policyholder account balances
 
1,790

 
1,465

 
394

 
100

 
944

 
—

 
4,693

 
(680
)
 
4,013

Capitalization of DAC
 
(449
)
 
(1,915
)
 
(377
)
 
(468
)
 
(36
)
 
(8
)
 
(3,253
)
 
(1
)
 
(3,254
)
Amortization of DAC and VOBA
 
477

 
1,302

 
209

 
434

 
332

 
6

 
2,760

 
215

 
2,975

Amortization of negative VOBA
 
—

 
(39
)
 
(1
)
 
(15
)
 
—

 
—

 
(55
)
 
(1
)
 
(56
)
Interest expense on debt
 
12

 
—

 
6

 
—

 
9

 
1,032

 
1,059

 
63

 
1,122

Other expenses
 
3,902

 
3,840

 
1,421

 
1,378

 
1,081

 
907

 
12,529

 
398

 
12,927

Total expenses
 
33,497

 
9,979

 
4,254

 
2,556

 
9,163

 
2,017

 
61,466

 
168

 
61,634

Provision for income tax expense (benefit)
 
736

 
548

 
238

 
88

 
308

 
(825
)
 
1,093

 
86

 
1,179

Adjusted earnings
 
$
2,804

 
$
1,237

 
$
592

 
$
277

 
$
1,255

 
$
(563
)
 
5,602

 
 
 
 
Adjustments to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
 
(220
)
 
 
 
 
Total expenses
 
(168
)
 
 
 
 
Provision for income tax (expense) benefit
 
(86
)
 
 
 
 
Income (loss) from continuing operations, net of income tax
 
$
5,128

 
 
 
$
5,128

At December 31, 2018
 
U.S.
 
Asia (1)
 
Latin
America
 
EMEA
 
MetLife
Holdings
 
Corporate
& Other
 
Total
 
 
(In millions)
Total assets
 
$
248,174

 
$
146,278

 
$
70,417

 
$
27,829

 
$
166,872

 
$
27,968

 
$
687,538

Separate account assets
 
$
71,436

 
$
8,849

 
$
47,757

 
$
5,306

 
$
42,208

 
$
—

 
$
175,556

Separate account liabilities
 
$
71,436

 
$
8,849

 
$
47,757

 
$
5,306

 
$
42,208

 
$
—

 
$
175,556

__________________
(1)
Total assets includes $120.0 billion of assets from the Japan operations which represents 17% of total consolidated assets.
 
 
 
 
 
 
 
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

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,
 
2018
 
2017
 
2016
 
(In millions)
Life insurance
$
20,550

 
$
20,330

 
$
20,436

Accident & health insurance
14,489

 
14,002

 
14,128

Annuities
10,990

 
6,999

 
5,552

Property and casualty insurance
3,651

 
3,613

 
3,560

Other
1,542

 
899

 
694

Total
$
51,222

 
$
45,843

 
$
44,370

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,
 
2018
 
2017
 
2016
 
(In millions)
U.S.
$
36,078

 
$
30,971

 
$
29,166

Foreign:
 
 
 
 
 
Japan
6,435

 
6,444

 
7,089

Other
8,709

 
8,428

 
8,115

Total
$
51,222

 
$
45,843

 
$
44,370

Revenues derived from one U.S. segment customer were $6.0 billion for the year ended December 31, 2018, which represented 12% of consolidated premiums, universal life and investment-type product policy fees and other revenues. The revenue was from a single premium received for a pension risk transfer. Revenues derived from any other 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, 2018, 2017 and 2016.