Segment Information

6 Months Ended

Jun. 30, 2023

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 initiatives), 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.

The adoption of LDTI impacted the Company’s calculation of adjusted earnings. With the adoption of LDTI, the measurement model was simplified for DAC and VOBA, and most embedded derivatives were reclassified as MRBs. As a result, the Company updated its calculation of adjusted earnings to remove certain adjustments related to the amortization of DAC, VOBA and related intangibles and adjusted for changes in measurement of certain guarantees. Under LDTI, adjusted earnings excludes changes in fair value associated with MRBs, changes in discount rates on certain annuitization guarantees, losses at contract inception for certain single premium business, and asymmetrical accounting associated with in-force reinsurance. All periods presented herein reflect the updated calculation of adjusted earnings.

Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax.

These financial measures focus on the Company’s primary businesses principally by excluding the impact of (i) market volatility which could distort trends, (ii) asymmetrical and non-economic accounting, and (iii) revenues and costs related to divested businesses, non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP.

Market volatility can have a significant impact on the Company’s financial results. Adjusted earnings excludes net investment gains (losses), net derivative gains (losses), MRBs remeasurement gains (losses) and goodwill impairments. Further, policyholder benefits and claims exclude (i) changes in the discount rate on certain annuitization guarantees accounted for as additional liabilities and (ii) market value adjustments.

Asymmetrical and non-economic accounting adjustments are made to the line items indicated in calculating adjusted earnings:

•Net investment income 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.

•Other revenues include settlements of foreign currency earnings hedges.

•Policyholder benefits and claims excludes (i) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments, and (iii) non-economic losses incurred at contract inception for certain single premium annuity business. These losses are amortized into adjusted earnings within policyholder benefits and claims over the estimated lives of the contracts.

•Interest credited to PABs excludes amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass-through adjustments.

Divested businesses are those that have been or will be sold or exited by MetLife but do not meet the discontinued operations criteria under GAAP. 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.

Other adjustments are made to the line items indicated in calculating adjusted earnings:

•Net investment income and interest credited to PABs excludes certain amounts related to contractholder-directed equity securities.

•Other revenues include fee revenue on synthetic guaranteed interest contracts (“GICs”) accounted for as freestanding derivatives.

•Other revenues exclude and other expenses include fees received in connection with services provided under transition service agreements.

•Other expenses exclude (i) implementation of new insurance regulatory requirements and other costs, and (ii) acquisition, integration and other related costs. Other expenses include (i) deductions for net income attributable to noncontrolling interests, and (ii) benefits accrued on synthetic GICs accounted for as freestanding derivatives.

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, 2023 and 2022. 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. The adoption of LDTI resulted in changes to the economic capital model. The changes related to this adoption do not represent a change in the composition of the segments and, in accordance with GAAP guidance for segment reporting, the Company will apply the changes to the economic capital model prospectively and did not update the economic model for 2022 and 2021.

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. With the adoption of LDTI, net investment income was reallocated for certain segments to reflect the impact of the change to certain liability balances, with no impact to consolidated net investment income. 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, 2023	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	8,108	$	1,310	$	1,023	$	499	$	719	$	19	$	11,678	$	—	$	11,678
Universal life and investment-type product policy fees	294		396		352		75		170		1		1,288		—		1,288
Net investment income	2,275		1,050		418		47		1,170		80		5,040		32		5,072
Other revenues	434		21		10		8		49		106		628		(7)		621
Net investment gains (losses)	—		—		—		—		—		—		—		(1,039)		(1,039)
Net derivative gains (losses)	—		—		—		—		—		—		—		(997)		(997)
Total revenues	11,111		2,777		1,803		629		2,108		206		18,634		(2,011)		16,623
Expenses
Policyholder benefits and claims and policyholder dividends	8,307		1,057		976		237		1,341		12		11,930		30		11,960
Policyholder liability remeasurement (gains) losses	(9)		(27)		3		2		15		—		(16)		—		(16)
Market risk benefit remeasurement (gains) losses	—		—		—		—		—		—		—		(817)		(817)
Interest credited to policyholder account balances	750		570		105		19		198		—		1,642		291		1,933
Capitalization of DAC	(55)		(397)		(148)		(119)		(6)		(4)		(729)		—		(729)
Amortization of DAC and VOBA	19		190		117		85		64		4		479		—		479
Amortization of negative VOBA	—		(5)		—		(1)		—		—		(6)		—		(6)
Interest expense on debt	5		—		4		—		3		244		256		—		256
Other expenses	1,096		778		465		314		231		229		3,113		20		3,133
Total expenses	10,113		2,166		1,522		537		1,846		485		16,669		(476)		16,193
Provision for income tax expense (benefit)	209		180		62		22		51		(83)		441		(419)		22
Adjusted earnings	$	789	$	431	$	219	$	70	$	211	$	(196)	1,524
Adjustments to:
Total revenues													(2,011)
Total expenses													476
Provision for income tax (expense) benefit													419
Net income (loss)													$	408			$	408

Three Months Ended June 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	8,094	$	1,393	$	822	$	493	$	760	$	(6)	$	11,556	$	—	$	11,556
Universal life and investment-type product policy fees	283		420		294		77		296		2		1,372		—		1,372
Net investment income	1,710		1,012		459		38		1,268		17		4,504		(921)		3,583
Other revenues	404		24		10		8		23		98		567		48		615
Net investment gains (losses)	—		—		—		—		—		—		—		(682)		(682)
Net derivative gains (losses)	—		—		—		—		—		—		—		(970)		(970)
Total revenues	10,491		2,849		1,585		616		2,347		111		17,999		(2,525)		15,474
Expenses
Policyholder benefits and claims and policyholder dividends	8,115		1,123		812		226		1,354		(2)		11,628		181		11,809
Policyholder liability remeasurement (gains) losses	(7)		(10)		6		6		4		—		(1)		—		(1)
Market risk benefit remeasurement (gains) losses	—		—		—		—		—		—		—		(757)		(757)
Interest credited to policyholder account balances	453		493		84		20		203		—		1,253		(726)		527
Capitalization of DAC	(23)		(381)		(116)		(108)		(7)		(2)		(637)		—		(637)
Amortization of DAC and VOBA	15		182		101		88		70		2		458		—		458
Amortization of negative VOBA	—		(5)		—		(2)		—		—		(7)		—		(7)
Interest expense on debt	1		—		4		—		2		219		226		—		226
Other expenses	949		763		364		298		242		184		2,800		68		2,868
Total expenses	9,503		2,165		1,255		528		1,868		401		15,720		(1,234)		14,486
Provision for income tax expense (benefit)	208		198		79		22		97		(92)		512		(439)		73
Adjusted earnings	$	780	$	486	$	251	$	66	$	382	$	(198)	1,767
Adjustments to:
Total revenues													(2,525)
Total expenses													1,234
Provision for income tax (expense) benefit													439
Net income (loss)													$	915			$	915

Six Months Ended June 30, 2023	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	14,060	$	2,687	$	2,048	$	995	$	1,442	$	35	$	21,267	$	—	$	21,267
Universal life and investment-type product policy fees	591		793		687		152		353		1		2,577		—		2,577
Net investment income	4,399		1,931		797		92		2,297		130		9,646		71		9,717
Other revenues	882		41		22		16		102		207		1,270		(10)		1,260
Net investment gains (losses)	—		—		—		—		—		—		—		(1,723)		(1,723)
Net derivative gains (losses)	—		—		—		—		—		—		—		(1,087)		(1,087)
Total revenues	19,932		5,452		3,554		1,255		4,194		373		34,760		(2,749)		32,011
Expenses
Policyholder benefits and claims and policyholder dividends	14,526		2,187		1,942		498		2,710		28		21,891		100		21,991
Policyholder liability remeasurement (gains) losses	(42)		(16)		(1)		(1)		35		—		(25)		—		(25)
Market risk benefit remeasurement (gains) losses	—		—		—		—		—		—		—		(629)		(629)
Interest credited to policyholder account balances	1,442		1,106		204		35		397		—		3,184		613		3,797
Capitalization of DAC	(106)		(798)		(299)		(227)		(12)		(5)		(1,447)		—		(1,447)
Amortization of DAC and VOBA	36		383		223		170		132		5		949		—		949
Amortization of negative VOBA	—		(11)		—		(2)		—		—		(13)		—		(13)
Interest expense on debt	8		—		6		—		6		491		511		—		511
Other expenses	2,174		1,585		895		614		469		406		6,143		47		6,190
Total expenses	18,038		4,436		2,970		1,087		3,737		925		31,193		131		31,324
Provision for income tax expense (benefit)	398		305		150		38		88		(186)		793		(599)		194
Adjusted earnings	$	1,496	$	711	$	434	$	130	$	369	$	(366)	2,774
Adjustments to:
Total revenues													(2,749)
Total expenses													(131)
Provision for income tax (expense) benefit													599
Net income (loss)													$	493			$	493

Six Months Ended June 30, 2022	U.S.		Asia		Latin America		EMEA		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
	(In millions)
Revenues
Premiums	$	15,099	$	2,945	$	1,560	$	1,002	$	1,536	$	(10)	$	22,132	$	41	$	22,173
Universal life and investment-type product policy fees	581		823		583		160		524		2		2,673		11		2,684
Net investment income	3,584		2,254		781		79		2,661		137		9,496		(1,629)		7,867
Other revenues	830		45		19		17		67		199		1,177		98		1,275
Net investment gains (losses)	—		—		—		—		—		—		—		(1,199)		(1,199)
Net derivative gains (losses)	—		—		—		—		—		—		—		(1,921)		(1,921)
Total revenues	20,094		6,067		2,943		1,258		4,788		328		35,478		(4,599)		30,879
Expenses
Policyholder benefits and claims and policyholder dividends	15,532		2,394		1,592		502		2,836		(9)		22,847		335		23,182
Policyholder liability remeasurement (gains) losses	(30)		(34)		(8)		10		20		—		(42)		—		(42)
Market risk benefit remeasurement (gains) losses	—		—		—		—		—		—		—		(2,197)		(2,197)
Interest credited to policyholder account balances	859		991		152		37		405		—		2,444		(1,291)		1,153
Capitalization of DAC	(55)		(769)		(227)		(209)		(13)		(5)		(1,278)		(11)		(1,289)
Amortization of DAC and VOBA	32		376		201		167		145		4		925		8		933
Amortization of negative VOBA	—		(12)		—		(3)		—		—		(15)		—		(15)
Interest expense on debt	3		—		7		—		3		438		451		—		451
Other expenses	1,928		1,600		713		594		478		320		5,633		147		5,780
Total expenses	18,269		4,546		2,430		1,098		3,874		748		30,965		(3,009)		27,956
Provision for income tax expense (benefit)	382		436		127		39		184		(180)		988		(619)		369
Adjusted earnings	$	1,443	$	1,085	$	386	$	121	$	730	$	(240)	3,525
Adjustments to:
Total revenues													(4,599)
Total expenses													3,009
Provision for income tax (expense) benefit													619
Net income (loss)													$	2,554			$	2,554

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

	June 30, 2023		December 31, 2022
	(In millions)
U.S.	$	249,706	$	252,219
Asia	150,784		148,305
Latin America	70,048		63,687
EMEA	17,654		16,860
MetLife Holdings	149,965		148,749
Corporate & Other	39,122		33,252
Total	$	677,279	$	663,072