Business Segment Information

12 Months Ended

Dec. 31, 2011

Business Segment Information [Abstract]

Business Segment Information

22.  Business Segment Information

MetLife is organized into six segments: Insurance Products, Retirement Products, Corporate Benefit Funding and Auto & Home (collectively, “U.S. Business”), and Japan and Other International Regions (collectively, “International”). The assets, liabilities and operating results relating to the Acquisition are included in the Japan and Other International Regions segments. Prior year results have been adjusted to conform to the current year presentation. In addition, the Company reports certain of its results of operations in Corporate & Other, which includes MetLife Bank and other business activities. On November 21, 2011, MetLife, Inc. announced that it will be reorganizing its business into three broad geographic regions: The Americas; Europe, the Middle East and Africa (“EMEA”); and Asia, and creating a global employee benefits business to better reflect its global reach. While the Company has initiated certain changes in response to this announcement, management continued to evaluate the performance of the operating segments under the existing segment structure as of December 31, 2011.

Insurance Products offers a broad range of protection products and services to individuals and corporations, as well as other institutions and their respective employees, and is organized into three distinct businesses: Group Life, Individual Life and Non-Medical Health. Group Life insurance products and services include variable life, universal life and term life products. Individual Life insurance products and services include variable life, universal life, term life and whole life products. Non-Medical Health products and services include dental insurance, group short- and long-term disability, individual disability income, LTC, critical illness and accidental death & dismemberment coverages. Retirement Products offers a variety of variable and fixed annuities. Corporate Benefit Funding offers pension risk solutions, structured settlements, stable value and investment products and other benefit funding products. Auto & Home provides personal lines property and casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance.

Japan life insurance products include whole life, term life, variable life and universal life products. Japan also provides accident and health insurance, fixed and variable annuities and endowment products. These products are offered to both individuals and groups. Other International Regions provides life insurance, accident and health insurance, credit life insurance, annuities, endowment and retirement & savings products to both individuals and groups.

Corporate & Other contains the excess capital not allocated to the segments, external integration costs, internal resource costs for associates committed to acquisitions and various start-up and run-off entities. Additionally, Corporate & Other includes interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings, the financial results of MetLife Bank (see Note 2) and income tax audit issues. Corporate & Other also includes the elimination of intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings.

Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP accounting guidance for segment reporting, operating earnings is the Company’s measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for GAAP income (loss) from continuing operations, net of income tax. The Company believes the presentation of operating 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.

Operating earnings is defined as operating revenues less operating expenses, both net of income tax.

Operating revenues and operating expenses exclude results of discontinued operations and other businesses that have been or will be sold or exited by MetLife, Inc. (“Divested Businesses”). Operating revenues also excludes net investment gains (losses) and net derivative gains (losses).

The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating 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 GMIB fees (“GMIB Fees”);

• Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iv) excludes certain amounts related to contractholder-directed unit-linked investments, and (v) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

• Other revenues are adjusted for settlements of foreign currency earnings hedges.

The following additional adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses:

• Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) 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, (iii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);

• Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of PABs but do not qualify for hedge accounting treatment and excludes amounts related to net investment income earned on contractholder-directed unit-linked investments;

• Amortization of DAC and 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 costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements, and (iii) business combinations.

In 2011, management modified its definition of operating earnings to exclude the impacts of Divested Businesses, which includes certain operations of MetLife Bank and the Caribbean Business, as these results are not relevant to understanding the Company’s ongoing operating results. Consequently, prior years’ results for Corporate & Other and total consolidated operating earnings have been decreased by $111 million, net of $66 million of income tax, and $211 million, net of $139 million of income tax, for the years ended December 31, 2010 and 2009, respectively.

In addition, in 2011, management modified its definition of operating earnings to exclude impacts related to certain variable annuity guarantees and Market Value Adjustments to better conform to the way it manages and assesses its business. Accordingly, such results are no longer reported in operating earnings. Consequently, prior years’ results for Retirement Products and total consolidated operating earnings have been increased by $64 million, net of $34 million of income tax, and $90 million, net of $49 million of income tax, for the years ended December 31, 2010 and 2009, respectively.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other for the years ended December 31, 2011, 2010 and 2009 and at December 31, 2011 and 2010. The accounting policies of the segments are the same as those of the Company, except for operating earnings adjustments as defined above, the method of capital allocation and the accounting for gains (losses) from intercompany sales, which are eliminated in consolidation.

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.

Effective January 1, 2011, the Company updated its economic capital model to align segment allocated equity with emerging standards and consistent risk principles. Such changes to the Company’s economic capital model are applied prospectively. Segment net investment income is also 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, operating earnings or income (loss) from continuing operations, net of income tax.

	Operating Earnings																														Adjustments			Total Consolidated
	U.S. Business															International									Corporate & Other			Total
Year Ended December 31, 2011	Insurance Products			Retirement Products			Corporate Benefit Funding			Auto & Home			Total			Japan			Other International Regions			Total
	(In millions)
Revenues
Premiums	$	16,949		$	1,141		$	2,418		$	3,000		$	23,508		$	6,325		$	6,426		$	12,751		$	10		$	36,269		$	92		$	36,361
Universal life and investment-type product policy fees		2,264			2,463			231			—			4,958			824			1,746			2,570			—			7,528			278			7,806
Net investment income		6,107			3,195			5,181			205			14,688			2,079			1,995			4,074			914			19,676			(70	)		19,606
Other revenues		829			307			249			33			1,418			22			152			174			319			1,911			621			2,532
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			—			(867	)		(867	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			—			4,824			4,824
Total revenues		26,149			7,106			8,079			3,238			44,572			9,250			10,319			19,569			1,243			65,384			4,878			70,262
Expenses
Policyholder benefits and claims and policyholder dividends		18,707			1,846			4,594			2,375			27,522			3,973			4,724			8,697			8			36,227			676			36,903
Interest credited to policyholder account balances		997			1,595			1,321			—			3,913			1,561			583			2,144			—			6,057			(454	)		5,603
Capitalization of DAC		(864	)		(1,612	)		(27	)		(453	)		(2,956	)		(2,250	)		(1,643	)		(3,893	)		—			(6,849	)		(9	)		(6,858	)
Amortization of DAC and VOBA		897			1,004			17			448			2,366			1,312			1,120			2,432			1			4,799			592			5,391
Amortization of negative VOBA		—			—			—			—			—			(555	)		(64	)		(619	)		—			(619	)		(78	)		(697	)
Interest expense on debt		—			2			8			—			10			—			1			1			1,294			1,305			324			1,629
Other expenses		4,143			3,143			487			792			8,565			3,398			4,164			7,562			627			16,754			1,511			18,265
Total expenses		23,880			5,978			6,400			3,162			39,420			7,439			8,885			16,324			1,930			57,674			2,562			60,236
Provision for income tax expense (benefit)		794			395			588			(28	)		1,749			635			398			1,033			(552	)		2,230			845			3,075
Operating earnings	$	1,475		$	733		$	1,091		$	104		$	3,403		$	1,176		$	1,036		$	2,212		$	(135	)		5,480
Adjustments to:
Total revenues																													4,878
Total expenses																													(2,562	)
Provision for income tax (expense) benefit																													(845	)
Income (loss) from continuing operations, net of income tax																												$	6,951					$	6,951
	U.S. Business															International									Corporate & Other			Total
At December 31, 2011	Insurance Products			Retirement Products			Corporate Benefit Funding			Auto & Home			Total			Japan			Other International Regions			Total
	(In millions)
Total assets	$	149,563		$	196,160		$	188,525		$	5,915		$	540,163		$	104,563		$	63,947		$	168,510		$	90,952		$	799,625
Separate account assets	$	8,425		$	120,285		$	64,828		$	—		$	193,538		$	—		$	9,485		$	9,485		$	—		$	203,023
Separate account liabilities	$	8,425		$	120,285		$	64,828		$	—		$	193,538		$	—		$	9,485		$	9,485		$	—		$	203,023

	Operating Earnings																														Adjustments			Total Consolidated
	U.S. Business															International									Corporate & Other			Total
Year Ended December 31, 2010	Insurance Products			Retirement Products			Corporate Benefit Funding			Auto & Home			Total			Japan			Other International Regions			Total
	(In millions)
Revenues
Premiums	$	17,200		$	875		$	1,938		$	2,923		$	22,936		$	499		$	3,625		$	4,124		$	11		$	27,071		$	—		$	27,071
Universal life and investment-type product policy fees		2,247			2,024			226			—			4,497			55			1,265			1,320			—			5,817			211			6,028
Net investment income		6,068			3,395			4,954			209			14,626			145			1,466			1,611			643			16,880			631			17,511
Other revenues		761			220			246			22			1,249			7			28			35			391			1,675			653			2,328
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			—			(408	)		(408	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			—			(265	)		(265	)
Total revenues		26,276			6,514			7,364			3,154			43,308			706			6,384			7,090			1,045			51,443			822			52,265
Expenses
Policyholder benefits and claims and policyholder dividends		19,075			1,487			4,041			2,021			26,624			309			3,053			3,362			(14	)		29,972			698			30,670
Interest credited to policyholder account balances		963			1,612			1,445			—			4,020			123			554			677			—			4,697			222			4,919
Capitalization of DAC		(841	)		(1,067	)		(19	)		(448	)		(2,375	)		(149	)		(775	)		(924	)		—			(3,299	)		—			(3,299	)
Amortization of DAC and VOBA		966			808			16			439			2,229			82			490			572			1			2,802			41			2,843
Amortization of negative VOBA		—			—			—			—			—			(49	)		(8	)		(57	)		—			(57	)		(7	)		(64	)
Interest expense on debt		1			3			6			—			10			—			3			3			1,126			1,139			411			1,550
Other expenses		4,080			2,437			460			769			7,746			244			2,233			2,477			467			10,690			1,044			11,734
Total expenses		24,244			5,280			5,949			2,781			38,254			560			5,550			6,110			1,580			45,944			2,409			48,353
Provision for income tax expense (benefit)		711			431			495			73			1,710			52			148			200			(366	)		1,544			(379	)		1,165
Operating earnings	$	1,321		$	803		$	920		$	300		$	3,344		$	94		$	686		$	780		$	(169	)		3,955
Adjustments to:
Total revenues																													822
Total expenses																													(2,409	)
Provision for income tax (expense) benefit																													379
Income (loss) from continuing operations, net of income tax																												$	2,747					$	2,747
	U.S. Business															International									Corporate & Other			Total
At December 31, 2010	Insurance Products			Retirement Products			Corporate Benefit Funding			Auto & Home			Total			Japan			Other International Regions			Total
	(In millions)
Total assets	$	141,366		$	177,045		$	172,929		$	5,541		$	496,881		$	87,416		$	77,579		$	164,995		$	69,030		$	730,906
Separate account assets	$	9,567		$	107,335		$	56,571		$	—		$	173,473		$	—		$	9,665		$	9,665		$	—		$	183,138
Separate account liabilities	$	9,567		$	107,335		$	56,571		$	—		$	173,473		$	—		$	9,665		$	9,665		$	—		$	183,138

	Operating Earnings																													Adjustments			Total Consolidated
	U.S. Business															International								Corporate & Other			Total
Year Ended December 31, 2009	Insurance Products			Retirement Products			Corporate Benefit Funding			Auto & Home			Total			Japan		Other International Regions			Total
	(In millions)
Revenues
Premiums	$	17,168		$	920		$	2,264		$	2,902		$	23,254		$	—	$	2,884		$	2,884		$	19		$	26,157		$	—		$	26,157
Universal life and investment-type product policy fees		2,281			1,543			176			—			4,000			—		1,055			1,055			—			5,055			142			5,197
Net investment income		5,614			3,098			4,527			180			13,419			—		1,111			1,111			70			14,600			141			14,741
Other revenues		779			173			238			33			1,223			—		14			14			236			1,473			856			2,329
Net investment gains (losses)		—			—			—			—			—			—		—			—			—			—			(2,901	)		(2,901	)
Net derivative gains (losses)		—			—			—			—			—			—		—			—			—			—			(4,866	)		(4,866	)
Total revenues		25,842			5,734			7,205			3,115			41,896			—		5,064			5,064			325			47,285			(6,628	)		40,657
Expenses
Policyholder benefits and claims and policyholder dividends		19,111			1,486			4,245			1,932			26,774			—		2,326			2,326			4			29,104			548			29,652
Interest credited to policyholder account balances		952			1,688			1,632			—			4,272			—		577			577			—			4,849			(4	)		4,845
Capitalization of DAC		(873	)		(1,067	)		(14	)		(435	)		(2,389	)		—		(587	)		(587	)		—			(2,976	)		—			(2,976	)
Amortization of DAC and VOBA		725			610			15			436			1,786			—		397			397			3			2,186			(897	)		1,289
Amortization of negative VOBA		—			—			—			—			—			—		—			—			—			—			—			—
Interest expense on debt		6			—			3			—			9			—		8			8			1,027			1,044			—			1,044
Other expenses		4,206			2,403			456			764			7,829			—		1,737			1,737			586			10,152			1,012			11,164
Total expenses		24,127			5,120			6,337			2,697			38,281			—		4,458			4,458			1,620			44,359			659			45,018
Provision for income tax expense (benefit)		573			216			288			96			1,173			—		155			155			(756	)		572			(2,597	)		(2,025	)
Operating earnings	$	1,142		$	398		$	580		$	322		$	2,442		$	—	$	451		$	451		$	(539	)		2,354
Adjustments to:
Total revenues																												(6,628	)
Total expenses																												(659	)
Provision for income tax (expense) benefit																												2,597
Income (loss) from continuing operations, net of income tax																											$	(2,336	)				$	(2,336	)

Net investment income is based upon the actual results of each segment’s specifically identifiable asset portfolio 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.

Operating revenues derived from any customer did not exceed 10% of consolidated operating revenues for the years ended December 31, 2011, 2010 and 2009. Operating revenues from U.S. operations were $44.7 billion, $43.7 billion and $41.4 billion for the years ended December 31, 2011, 2010 and 2009, respectively, which represented 68%, 85% and 88%, respectively, of consolidated operating revenues.