Reinsurance

12 Months Ended

Dec. 31, 2024

9. Reinsurance

The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some pension products and insurance products issued by third parties. The Company purchases reinsurance in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth.

Under the terms of the reinsurance agreements, the reinsurer agrees to reimburse the Company for the ceded amount in the event a claim is paid. Cessions under reinsurance agreements do not discharge the Company’s obligation as the primary insurer. In the event that reinsurers do not meet their obligations under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible.

Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed in “ — Fixed Maturity Securities AFS — Evaluation of Fixed Maturity Securities AFS for Credit Loss” in Note 11.

Group Benefits

For its Group Benefits segment, the Company generally retains most of the risk, with the exception of its Group Term Life business and certain client arrangements.

The Company reinsures a 90% quota share of its Group Term Life business and a 50% quota share of its Group Dental business for capital management purposes. The majority of the Company’s other reinsurance activity within this segment relates to client agreements for employer sponsored captive programs, risk-sharing agreements and multinational pooling. The risks ceded under these agreements are generally quota shares of group life and disability policies. The cessions vary and the Company may cede up to 100% of all the risks of the policies.

RIS

The Company’s RIS segment has engaged in reinsurance activities on an opportunistic basis. The Company reinsures longevity risks for certain pension products issued by unaffiliated providers located in the U.K. The Company also cedes certain pension products to a third party.

Asia, Latin America and EMEA

For selected large corporate clients, the Company reinsures group employee benefits or credit insurance business with various client-affiliated reinsurance companies, covering policies issued to the employees or customers of the clients. Additionally, the Company cedes and assumes risk with other insurance companies when either company requires a business partner with the appropriate local licensing to issue certain types of policies in certain jurisdictions. In these cases, the assuming company typically underwrites the risks, develops the products and assumes most or all of the risk. The Company also has reinsurance agreements in-force that reinsure a portion of the living and death benefit guarantees issued in connection with variable annuity products. Under these agreements, the Company pays reinsurance fees associated with the guarantees collected from policyholders and receives reimbursement for benefits paid or accrued in excess of account values, subject to certain limitations. The Company may also reinsure certain risks with external reinsurers depending upon the nature of the risk and local regulatory requirements.

MetLife Holdings

For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or on a quota share basis. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified characteristics. The Company also assumes portions of the risk associated with certain whole life policies issued by a third party and reinsures certain term life policies and universal life policies with secondary death benefit guarantees to such third party. In 2023, the Company reinsured an in-force block of universal life, variable universal life, universal life with secondary guarantees and fixed annuities to a third party on a 100% quota share basis.

For its other products, the Company has a reinsurance agreement in-force to assume the living and death benefit guarantees issued in connection with certain variable annuity guarantees from a third party in Japan. Under this agreement, the Company receives reinsurance fees associated with the guarantees collected from policyholders, and provides reimbursement for benefits paid or accrued in excess of account values, subject to certain limitations.

Catastrophe Coverage

The Company has exposure to catastrophes which could contribute to significant fluctuations in the Company’s results of operations. For the Group Benefits and EMEA segments, the Company purchases catastrophe coverage to reinsure risks issued within territories that the Company believes are subject to the greatest catastrophic risks. For its other segments, the Company uses excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger risks. Excess of retention reinsurance agreements provide for a portion of a risk to remain with the direct writing company and quota share reinsurance agreements provide for the direct writing company to transfer a fixed percentage of all risks of a class of policies.

Reinsurance Recoverables

The Company reinsures its business through a diversified group of well-capitalized reinsurers. The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company generally secures large reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. These reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, which at December 31, 2024 and 2023, were not significant. A U.S. life insurance subsidiary of the Company also secured collateral from its counterparties to mitigate counterparty default risk related to its longevity reinsurance agreements.

The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $4.2 billion and $4.4 billion of unsecured reinsurance recoverable balances at December 31, 2024 and 2023, respectively.

At December 31, 2024, the Company had $17.6 billion of net ceded reinsurance recoverables. Of this total, $14.7 billion, or 84%, were with the Company’s five largest ceded reinsurers, including $2.4 billion of net ceded reinsurance recoverables which were unsecured. At December 31, 2023, the Company had $16.7 billion of net ceded reinsurance recoverables. Of this total, $14.1 billion, or 84%, were with the Company’s five largest ceded reinsurers, including $2.5 billion of net ceded reinsurance recoverables which were unsecured.

The Company has reinsured, with an unaffiliated third-party reinsurer, 59% of the closed block through a modified coinsurance agreement. The Company accounts for this agreement under the deposit method of accounting. The Company, having the right of offset, has offset the modified coinsurance deposit liability with the deposit recoverable.

The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows:


	Years Ended December 31,
	2024		2023		2022
	(In millions)
Premiums
Direct premiums	$	45,153	$	43,359	$	47,618
Reinsurance assumed	3,788		3,112		3,035
Reinsurance ceded	(3,996)		(2,188)		(2,143)
Net premiums	$	44,945	$	44,283	$	48,510
Universal life and investment-type product policy fees
Direct universal life and investment-type product policy fees	$	5,914	$	5,787	$	5,687
Reinsurance assumed	(3)		(19)		32
Reinsurance ceded	(937)		(616)		(494)
Net universal life and investment-type product policy fees	$	4,974	$	5,152	$	5,225
Policyholder benefits and claims
Direct policyholder benefits and claims	$	45,662	$	44,155	$	49,308
Reinsurance assumed	3,614		2,904		2,604
Reinsurance ceded	(4,548)		(2,469)		(2,405)
Net policyholder benefits and claims	$	44,728	$	44,590	$	49,507
Policyholder liability remeasurement (gains) losses
Direct policyholder liability remeasurement (gains) losses	$	(169)	$	(54)	$	94
Reinsurance assumed	(13)		(20)		9
Reinsurance ceded	(24)		29		11
Net policyholder liability remeasurement (gains) losses	$	(206)	$	(45)	$	114
Market risk benefits remeasurement (gains) losses
Direct market risk benefits remeasurement (gains) losses	$	(992)	$	(785)	$	(3,636)
Reinsurance assumed	(123)		(214)		(46)
Reinsurance ceded	6		5		8
Net market risk benefits remeasurement (gains) losses	$	(1,109)	$	(994)	$	(3,674)
Other expenses
Direct other expenses	$	13,054	$	12,760	$	11,854
Reinsurance assumed	202		235		268
Reinsurance ceded	(239)		(285)		(263)
Net other expenses	$	13,017	$	12,710	$	11,859

The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at:


	December 31,
	2024								2023
	Direct		Assumed		Ceded		Total Balance Sheet		Direct		Assumed		Ceded		Total Balance Sheet
	(In millions)
Assets
Premiums, reinsurance and other receivables	$	6,496	$	1,432	$	21,833	$	29,761	$	6,044	$	1,405	$	21,522	$	28,971
MRBs	365		7		—		372		279		7		—		286
DAC and VOBA	19,753		352		(478)		19,627		20,297		353		(499)		20,151
Total assets	$	26,614	$	1,791	$	21,355	$	49,760	$	26,620	$	1,765	$	21,023	$	49,408
Liabilities
FPBs	$	189,328	$	4,318	$	—	$	193,646	$	192,424	$	3,982	$	—	$	196,406
MRBs	2,566		15		—		2,581		3,141		38		—		3,179
Other policy-related balances	18,138		1,052		(291)		18,899		18,852		1,152		(268)		19,736
Other liabilities	26,722		1,863		8,258		36,843		27,125		1,892		6,788		35,805
Total liabilities	$	236,754	$	7,248	$	7,967	$	251,969	$	241,542	$	7,064	$	6,520	$	255,126

Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. Included in premiums, reinsurance and other receivables in the table above are deposit assets on reinsurance of $4.6 billion and $5.1 billion at December 31, 2024 and 2023, respectively. Also, included in other liabilities in the table above are deposit liabilities on reinsurance of $1.2 billion and $1.3 billion at December 31, 2024 and 2023, respectively.

In November 2023, the Company completed a risk transfer transaction with subsidiaries of Global Atlantic Financial Group (“Global Atlantic”), a retirement and life insurance company, to reinsure an in-force block of universal life, variable universal life, universal life with secondary guarantees, and fixed annuities, which are reported in the MetLife Holdings segment. The Company entered into reinsurance agreements on a coinsurance basis for the general account products and on a modified coinsurance basis for the separate account products. The Company recorded reinsurance recoverables and deposit receivables of $10.3 billion at December 31, 2023 reported in premiums, reinsurance and other receivables. At inception of the agreement, in addition to recording the amount recoverable, the Company (i) transferred to the reinsurer $9.5 billion of assets primarily consisting of fixed maturity securities AFS and mortgage loans supporting the general account liabilities reduced by a $2.2 billion pre-tax ceding commission, (ii) retained $5.0 billion separate account assets under the modified coinsurance arrangement and (iii) recorded the net cost of reinsurance of $770 million within other liabilities, related to universal life, variable universal life and universal life with secondary guarantees reinsured. The net cost of reinsurance will be amortized on a basis consistent with the methodologies and assumptions used for amortizing DAC related to the underlying reinsured contracts in policyholder benefits and claims.

As part of this transaction, the Company’s institutional investment management business entered into investment advisory and other agreements with subsidiaries of Global Atlantic to serve as the investment manager for certain of the transferred general account assets. With certain exceptions, the agreements contemplate a term of five years.