Segment Information

9 Months Ended

Sep. 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 nine months ended September 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 September 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	14,164	$	1,347	$	823	$	475	$	745	$	(7)	$	17,547	$	—	$	17,547
Universal life and investment-type product policy fees	286		421		290		62		232		(1)		1,290		12		1,302
Net investment income	1,716		827		399		40		1,118		63		4,163		(578)		3,585
Other revenues	516		21		10		8		39		96		690		40		730
Net investment gains (losses)	—		—		—		—		—		—		—		(414)		(414)
Net derivative gains (losses)	—		—		—		—		—		—		—		(480)		(480)
Total revenues	16,682		2,616		1,522		585		2,134		151		23,690		(1,420)		22,270
Expenses
Policyholder benefits and claims and policyholder dividends	14,265		1,257		874		239		1,659		(3)		18,291		(143)		18,148
Interest credited to policyholder account balances	478		497		89		16		202		—		1,282		(302)		980
Capitalization of DAC	(23)		(358)		(130)		(96)		(6)		(2)		(615)		—		(615)
Amortization of DAC and VOBA	15		190		68		79		(20)		3		335		(117)		218
Amortization of negative VOBA	—		(11)		—		(1)		—		—		(12)		—		(12)
Interest expense on debt	3		—		3		—		2		231		239		—		239
Other expenses	1,003		749		398		269		228		186		2,833		60		2,893
Total expenses	15,741		2,324		1,302		506		2,065		415		22,353		(502)		21,851
Provision for income tax expense (benefit)	197		95		49		19		10		(63)		307		(288)		19
Adjusted earnings	$	744	$	197	$	171	$	60	$	59	$	(201)	1,030
Adjustments to:
Total revenues													(1,420)
Total expenses													502
Provision for income tax (expense) benefit													288
Net income (loss)													$	400			$	400

Three Months Ended September 30, 2021	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	5,746	$	1,594	$	705	$	532	$	805	$	16	$	9,398	$	57	$	9,455
Universal life and investment-type product policy fees	279		477		274		128		279		—		1,437		84		1,521
Net investment income	2,098		1,354		306		46		1,771		93		5,668		(100)		5,568
Other revenues	383		17		9		10		57		108		584		79		663
Net investment gains (losses)	—		—		—		—		—		—		—		(84)		(84)
Net derivative gains (losses)	—		—		—		—		—		—		—		(218)		(218)
Total revenues	8,506		3,442		1,294		716		2,912		217		17,087		(182)		16,905
Expenses
Policyholder benefits and claims and policyholder dividends	6,118		1,220		885		268		1,611		9		10,111		181		10,292
Interest credited to policyholder account balances	362		513		63		17		212		—		1,167		120		1,287
Capitalization of DAC	(17)		(373)		(109)		(110)		(8)		(3)		(620)		(15)		(635)
Amortization of DAC and VOBA	26		470		62		118		80		2		758		58		816
Amortization of negative VOBA	—		(5)		—		(1)		—		—		(6)		—		(6)
Interest expense on debt	1		—		2		—		1		236		240		—		240
Other expenses	886		811		363		308		255		137		2,760		109		2,869
Total expenses	7,376		2,636		1,266		600		2,151		381		14,410		453		14,863
Provision for income tax expense (benefit)	235		237		(1)		22		155		(96)		552		(99)		453
Adjusted earnings	$	895	$	569	$	29	$	94	$	606	$	(68)	2,125
Adjustments to:
Total revenues													(182)
Total expenses													(453)
Provision for income tax (expense) benefit													99
Net income (loss)													$	1,589			$	1,589

Nine Months Ended September 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	29,582	$	4,295	$	2,381	$	1,476	$	2,281	$	(17)	$	39,998	$	41	$	40,039
Universal life and investment-type product policy fees	867		1,367		876		236		840		1		4,187		49		4,236
Net investment income	5,300		3,081		1,180		119		3,807		172		13,659		(2,207)		11,452
Other revenues	1,347		66		29		25		106		295		1,868		138		2,006
Net investment gains (losses)	—		—		—		—		—		—		—		(1,617)		(1,617)
Net derivative gains (losses)	—		—		—		—		—		—		—		(2,534)		(2,534)
Total revenues	37,096		8,809		4,466		1,856		7,034		451		59,712		(6,130)		53,582
Expenses
Policyholder benefits and claims and policyholder dividends	30,151		3,670		2,454		758		4,610		(12)		41,631		(109)		41,522
Interest credited to policyholder account balances	1,212		1,488		241		53		607		—		3,601		(1,499)		2,102
Capitalization of DAC	(60)		(1,120)		(363)		(305)		(21)		(7)		(1,876)		(11)		(1,887)
Amortization of DAC and VOBA	43		799		238		260		130		7		1,477		(106)		1,371
Amortization of negative VOBA	—		(27)		—		(4)		—		—		(31)		—		(31)
Interest expense on debt	6		—		10		—		5		669		690		—		690
Other expenses	2,931		2,349		1,122		863		706		506		8,477		206		8,683
Total expenses	34,283		7,159		3,702		1,625		6,037		1,163		53,969		(1,519)		52,450
Provision for income tax expense (benefit)	588		487		184		55		197		(243)		1,268		(1,348)		(80)
Adjusted earnings	$	2,225	$	1,163	$	580	$	176	$	800	$	(469)	4,475
Adjustments to:
Total revenues													(6,130)
Total expenses													1,519
Provision for income tax (expense) benefit													1,348
Net income (loss)													$	1,212			$	1,212

Nine Months Ended September 30, 2021	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	16,919	$	4,861	$	1,936	$	1,751	$	2,471	$	54	$	27,992	$	922	$	28,914
Universal life and investment-type product policy fees	858		1,371		831		302		826		1		4,189		145		4,334
Net investment income	6,106		3,776		913		171		4,960		153		16,079		83		16,162
Other revenues	1,159		54		30		39		188		303		1,773		185		1,958
Net investment gains (losses)	—		—		—		—		—		—		—		1,655		1,655
Net derivative gains (losses)	—		—		—		—		—		—		—		(2,032)		(2,032)
Total revenues	25,042		10,062		3,710		2,263		8,445		511		50,033		958		50,991
Expenses
Policyholder benefits and claims and policyholder dividends	17,999		3,750		2,370		944		4,683		36		29,782		921		30,703
Interest credited to policyholder account balances	1,080		1,498		182		66		632		—		3,458		695		4,153
Capitalization of DAC	(48)		(1,203)		(304)		(359)		(25)		(9)		(1,948)		(104)		(2,052)
Amortization of DAC and VOBA	50		1,080		205		274		190		7		1,806		137		1,943
Amortization of negative VOBA	—		(20)		—		(5)		—		—		(25)		—		(25)
Interest expense on debt	4		—		4		—		4		683		695		1		696
Other expenses	2,695		2,542		1,041		1,006		752		278		8,314		439		8,753
Total expenses	21,780		7,647		3,498		1,926		6,236		995		42,082		2,089		44,171
Provision for income tax expense (benefit)	681		703		46		78		449		(288)		1,669		(213)		1,456
Adjusted earnings	$	2,581	$	1,712	$	166	$	259	$	1,760	$	(196)	6,282
Adjustments to:
Total revenues													958
Total expenses													(2,089)
Provision for income tax (expense) benefit													213
Net income (loss)													$	5,364			$	5,364

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

	September 30, 2022		December 31, 2021
	(In millions)
U.S.	$	253,280	$	282,741
Asia	141,750		169,291
Latin America	54,991		59,763
EMEA	15,673		27,038
MetLife Holdings	149,134		179,551
Corporate & Other	35,276		41,324
Total	$	650,104	$	759,708

Revenues derived from one U.S. segment customer were $8.1 billion for both the three months and nine months ended September 30, 2022, which represented 42% and 18%, respectively, 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 three months and nine months ended September 30, 2022 and 2021.