Segment Information

3 Months Ended

Mar. 31, 2022

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 two businesses: Group Benefits and Retirement and Income Solutions (“RIS”).

•The Group Benefits business offers products such as term, variable and universal life insurance, dental, group and individual disability, vision and accident & health insurance.

•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, structured settlements, longevity reinsurance solutions, benefit funding solutions and capital markets investment products.

Asia

The Asia segment offers a broad range of products and services to both individuals and corporations, as well as to other institutions, and their respective employees, which include life insurance, accident & health insurance and retirement and savings.

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, accident & health insurance and credit insurance.

EMEA

The EMEA segment offers products to individuals, corporations, other institutions, and their respective employees, which include life insurance, accident & health insurance, retirement and savings 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. These include variable, universal, term and whole life insurance, variable, fixed and index-linked annuities and long-term care insurance.

Corporate & Other

Corporate & Other contains various start-up, developing and run-off businesses. Also included in Corporate & Other are: 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 and enterprise-wide strategic initiative restructuring charges), interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings and income tax audit issues, the elimination of intersegment amounts (which generally relate to affiliated reinsurance, investment expenses and intersegment loans bearing interest rates commensurate with related borrowings), and the Company’s investment management business (through which the Company provides public fixed income, private capital and real estate investment solutions to institutional investors worldwide).

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 net income (loss). 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 include 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. 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 guaranteed minimum income benefits (“GMIBs”) fees (“GMIB fees”);

•Net investment income: (i) includes adjustments for 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) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (iii) 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, (iv) benefits and hedging costs related to GMIBs (“GMIB costs”) and (v) 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 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: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements costs, 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 three months ended March 31, 2022 and 2021. The segment accounting policies are the same as those used to prepare the Company’s interim condensed 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, net income (loss) 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.

Three Months Ended March 31, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	7,164	$	1,553	$	732	$	509	$	776	$	(4)	$	10,730	$	41	$	10,771
Universal life and investment-type product policy fees	297		448		290		88		269		—		1,392		26		1,418
Net investment income	1,874		1,242		322		41		1,409		104		4,992		(708)		4,284
Other revenues	426		21		9		9		44		101		610		50		660
Net investment gains (losses)	—		—		—		—		—		—		—		(518)		(518)
Net derivative gains (losses)	—		—		—		—		—		—		—		(859)		(859)
Total revenues	9,761		3,264		1,353		647		2,498		201		17,724		(1,968)		15,756
Expenses
Policyholder benefits and claims and policyholder dividends	7,566		1,228		769		282		1,518		(7)		11,356		35		11,391
Interest credited to policyholder account balances	347		498		68		17		202		—		1,132		(502)		630
Capitalization of DAC	(23)		(392)		(113)		(101)		(7)		(3)		(639)		(11)		(650)
Amortization of DAC and VOBA	14		288		80		86		76		2		546		(9)		537
Amortization of negative VOBA	—		(8)		—		(1)		—		—		(9)		—		(9)
Interest expense on debt	2		—		3		—		1		219		225		—		225
Other expenses	979		837		354		296		236		136		2,838		79		2,917
Total expenses	8,885		2,451		1,161		579		2,026		347		15,449		(408)		15,041
Provision for income tax expense (benefit)	183		233		50		16		95		(92)		485		(444)		41
Adjusted earnings	$	693	$	580	$	142	$	52	$	377	$	(54)	1,790
Adjustments to:
Total revenues													(1,968)
Total expenses													408
Provision for income tax (expense) benefit													444
Net income (loss)													$	674			$	674

Three Months Ended March 31, 2021	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	5,699	$	1,685	$	595	$	598	$	827	$	58	$	9,462	$	865	$	10,327
Universal life and investment-type product policy fees	297		458		270		67		274		—		1,366		25		1,391
Net investment income	2,010		1,264		299		63		1,646		12		5,294		20		5,314
Other revenues	396		18		10		13		62		86		585		46		631
Net investment gains (losses)	—		—		—		—		—		—		—		134		134
Net derivative gains (losses)	—		—		—		—		—		—		—		(2,235)		(2,235)
Total revenues	8,402		3,425		1,174		741		2,809		156		16,707		(1,145)		15,562
Expenses
Policyholder benefits and claims and policyholder dividends	6,142		1,297		761		343		1,523		40		10,106		664		10,770
Interest credited to policyholder account balances	359		489		59		24		210		—		1,141		210		1,351
Capitalization of DAC	(18)		(435)		(95)		(127)		(8)		(3)		(686)		(89)		(775)
Amortization of DAC and VOBA	16		314		60		62		54		2		508		82		590
Amortization of negative VOBA	—		(7)		—		(2)		—		—		(9)		—		(9)
Interest expense on debt	1		—		1		—		1		224		227		1		228
Other expenses	911		899		335		349		253		107		2,854		262		3,116
Total expenses	7,411		2,557		1,121		649		2,033		370		14,141		1,130		15,271
Provision for income tax expense (benefit)	207		245		13		21		158		(111)		533		(605)		(72)
Adjusted earnings	$	784	$	623	$	40	$	71	$	618	$	(103)	2,033
Adjustments to:
Total revenues													(1,145)
Total expenses													(1,130)
Provision for income tax (expense) benefit													605
Net income (loss)													$	363			$	363

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

	March 31, 2022		December 31, 2021
	(In millions)
U.S.	$	271,448	$	282,741
Asia	162,336		169,291
Latin America	62,509		59,763
EMEA	23,039		27,038
MetLife Holdings	169,126		179,551
Corporate & Other	35,826		41,324
Total	$	724,284	$	759,708