Segment Information

6 Months Ended

Jun. 30, 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 and six months ended June 30, 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 June 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	8,254	$	1,395	$	826	$	492	$	760	$	(6)	$	11,721	$	—	$	11,721
Universal life and investment-type product policy fees	284		498		296		86		339		2		1,505		11		1,516
Net investment income	1,710		1,012		459		38		1,280		5		4,504		(921)		3,583
Other revenues	405		24		10		8		23		98		568		48		616
Net investment gains (losses)	—		—		—		—		—		—		—		(685)		(685)
Net derivative gains (losses)	—		—		—		—		—		—		—		(1,195)		(1,195)
Total revenues	10,653		2,929		1,591		624		2,402		99		18,298		(2,742)		15,556
Expenses
Policyholder benefits and claims and policyholder dividends	8,320		1,185		811		237		1,433		(2)		11,984		(1)		11,983
Interest credited to policyholder account balances	387		493		84		20		203		—		1,187		(695)		492
Capitalization of DAC	(14)		(370)		(120)		(108)		(8)		(2)		(622)		—		(622)
Amortization of DAC and VOBA	14		321		90		95		74		2		596		20		616
Amortization of negative VOBA	—		(8)		—		(2)		—		—		(10)		—		(10)
Interest expense on debt	1		—		4		—		2		219		226		—		226
Other expenses	949		763		370		298		242		184		2,806		67		2,873
Total expenses	9,657		2,384		1,239		540		1,946		401		16,167		(609)		15,558
Provision for income tax expense (benefit)	208		159		85		20		92		(88)		476		(616)		(140)
Adjusted earnings	$	788	$	386	$	267	$	64	$	364	$	(214)	1,655
Adjustments to:
Total revenues													(2,742)
Total expenses													609
Provision for income tax (expense) benefit													616
Net income (loss)													$	138			$	138

Three Months Ended June 30, 2021	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	5,474	$	1,582	$	636	$	621	$	839	$	(20)	$	9,132	$	—	$	9,132
Universal life and investment-type product policy fees	282		436		287		107		273		1		1,386		36		1,422
Net investment income	1,998		1,158		308		62		1,543		48		5,117		163		5,280
Other revenues	380		19		11		16		69		109		604		60		664
Net investment gains (losses)	—		—		—		—		—		—		—		1,605		1,605
Net derivative gains (losses)	—		—		—		—		—		—		—		421		421
Total revenues	8,134		3,195		1,242		806		2,724		138		16,239		2,285		18,524
Expenses
Policyholder benefits and claims and policyholder dividends	5,739		1,233		724		333		1,549		(13)		9,565		76		9,641
Interest credited to policyholder account balances	359		496		60		25		210		—		1,150		365		1,515
Capitalization of DAC	(13)		(395)		(100)		(122)		(9)		(3)		(642)		—		(642)
Amortization of DAC and VOBA	8		296		83		94		56		3		540		(3)		537
Amortization of negative VOBA	—		(8)		—		(2)		—		—		(10)		—		(10)
Interest expense on debt	2		—		1		—		2		223		228		—		228
Other expenses	898		832		343		349		244		34		2,700		68		2,768
Total expenses	6,993		2,454		1,111		677		2,052		244		13,531		506		14,037
Provision for income tax expense (benefit)	239		221		34		35		136		(81)		584		491		1,075
Adjusted earnings	$	902	$	520	$	97	$	94	$	536	$	(25)	2,124
Adjustments to:
Total revenues													2,285
Total expenses													(506)
Provision for income tax (expense) benefit													(491)
Net income (loss)													$	3,412			$	3,412

Six Months Ended June 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	15,418	$	2,948	$	1,558	$	1,001	$	1,536	$	(10)	$	22,451	$	41	$	22,492
Universal life and investment-type product policy fees	581		946		586		174		608		2		2,897		37		2,934
Net investment income	3,584		2,254		781		79		2,689		109		9,496		(1,629)		7,867
Other revenues	831		45		19		17		67		199		1,178		98		1,276
Net investment gains (losses)	—		—		—		—		—		—		—		(1,203)		(1,203)
Net derivative gains (losses)	—		—		—		—		—		—		—		(2,054)		(2,054)
Total revenues	20,414		6,193		2,944		1,271		4,900		300		36,022		(4,710)		31,312
Expenses
Policyholder benefits and claims and policyholder dividends	15,886		2,413		1,580		519		2,951		(9)		23,340		34		23,374
Interest credited to policyholder account balances	734		991		152		37		405		—		2,319		(1,197)		1,122
Capitalization of DAC	(37)		(762)		(233)		(209)		(15)		(5)		(1,261)		(11)		(1,272)
Amortization of DAC and VOBA	28		609		170		181		150		4		1,142		11		1,153
Amortization of negative VOBA	—		(16)		—		(3)		—		—		(19)		—		(19)
Interest expense on debt	3		—		7		—		3		438		451		—		451
Other expenses	1,928		1,600		724		594		478		320		5,644		146		5,790
Total expenses	18,542		4,835		2,400		1,119		3,972		748		31,616		(1,017)		30,599
Provision for income tax expense (benefit)	391		392		135		36		187		(180)		961		(1,060)		(99)
Adjusted earnings	$	1,481	$	966	$	409	$	116	$	741	$	(268)	3,445
Adjustments to:
Total revenues													(4,710)
Total expenses													1,017
Provision for income tax (expense) benefit													1,060
Net income (loss)													$	812			$	812

Six Months Ended June 30, 2021	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	11,173	$	3,267	$	1,231	$	1,219	$	1,666	$	38	$	18,594	$	865	$	19,459
Universal life and investment-type product policy fees	579		894		557		174		547		1		2,752		61		2,813
Net investment income	4,008		2,422		607		125		3,189		60		10,411		183		10,594
Other revenues	776		37		21		29		131		195		1,189		106		1,295
Net investment gains (losses)	—		—		—		—		—		—		—		1,739		1,739
Net derivative gains (losses)	—		—		—		—		—		—		—		(1,814)		(1,814)
Total revenues	16,536		6,620		2,416		1,547		5,533		294		32,946		1,140		34,086
Expenses
Policyholder benefits and claims and policyholder dividends	11,881		2,530		1,485		676		3,072		27		19,671		740		20,411
Interest credited to policyholder account balances	718		985		119		49		420		—		2,291		575		2,866
Capitalization of DAC	(31)		(830)		(195)		(249)		(17)		(6)		(1,328)		(89)		(1,417)
Amortization of DAC and VOBA	24		610		143		156		110		5		1,048		79		1,127
Amortization of negative VOBA	—		(15)		—		(4)		—		—		(19)		—		(19)
Interest expense on debt	3		—		2		—		3		447		455		1		456
Other expenses	1,809		1,731		678		698		497		141		5,554		330		5,884
Total expenses	14,404		5,011		2,232		1,326		4,085		614		27,672		1,636		29,308
Provision for income tax expense (benefit)	446		466		47		56		294		(192)		1,117		(114)		1,003
Adjusted earnings	$	1,686	$	1,143	$	137	$	165	$	1,154	$	(128)	4,157
Adjustments to:
Total revenues													1,140
Total expenses													(1,636)
Provision for income tax (expense) benefit													114
Net income (loss)													$	3,775			$	3,775

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

	June 30, 2022		December 31, 2021
	(In millions)
U.S.	$	251,436	$	282,741
Asia	148,549		169,291
Latin America	56,233		59,763
EMEA	16,907		27,038
MetLife Holdings	156,189		179,551
Corporate & Other	33,579		41,324
Total	$	662,893	$	759,708