Business Segment Information

3 Months Ended

Mar. 31, 2012

Business Segment Information [Abstract]

Business Segment Information

15.  Business Segment Information

As announced in November 2011, the Company reorganized its business from its former U.S. Business and International structure into three broad geographic regions to better reflect its global reach. As a result, in the first quarter of 2012, the Company reorganized into six segments, reflecting these broad geographic regions: Retail Products; Group, Voluntary and Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, “The Americas”); Asia; and EMEA. In addition, the Company reports certain of its results of operations in Corporate & Other, which includes MetLife Bank and other business activities. Prior period results have been revised in connection with this reorganization.

The Americas. The Americas consists of the following segments:

• Retail Products. The Retail Products segment offers a broad range of protection products and services and a variety of annuities to individuals and employees of corporations and other institutions, and is organized into two businesses: Life and Annuities. Life insurance products and services include variable life, universal life, term life and whole life products. Annuities include a variety of variable and fixed annuities which provide for both asset accumulation and asset distribution needs.

• Group, Voluntary and Worksite Benefits. The Group, Voluntary and Worksite Benefits segment 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 businesses: Group Life, Non-Medical Health and Property & Casualty. Group Life insurance products and services include variable life, universal life and term life products. Non-Medical Health products and services include dental insurance, group short- and long-term disability, individual disability income, long-term care, critical illness and accidental death & dismemberment coverages. Property & Casualty provides personal lines property and casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance.

• Corporate Benefit Funding. The Corporate Benefit Funding segment includes an array of annuity and investment products, including guaranteed interest products and other stable value products, income annuities, and separate account contracts for the investment management of defined benefit and defined contribution plan assets.

• Latin America. The Latin America segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident and health insurance, group medical, dental, credit life insurance, annuities, endowment and retirement & savings products.

Asia. The Asia segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include whole life, term life, variable life, universal life, accident and health insurance, fixed and variable annuities and endowment products.

EMEA. The EMEA segment offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include life insurance, accident and health insurance, credit life insurance, annuities, endowment and retirement & savings products.

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 certain run-off entities. Corporate & Other also includes assumed reinsurance for a Japan domiciled life insurance company, a former joint venture of the Company. These in-force reinsurance agreements reinsure a portion of the living and death benefit guarantees issued in connection with variable annuity products. 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) acquisition and integration costs.

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 period results for Corporate & Other have been increased by $27 million, net of $16 million of income tax, and prior period results for Latin America have been decreased by $4 million, net of $2 million of income tax, respectively, for the three months ended March 31, 2011. As a result of the modified definition, prior period consolidated operating earnings increased by $23 million, net of $14 million of income tax, for the three months ended March 31, 2011.

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 ended March 31, 2012 and 2011. The segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except for operating 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 aligns segment allocated equity with emerging standards and consistent risk principles. 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, operating earnings or income (loss) from continuing operations, net of income tax.

	Operating Earnings
	The Americas
Three Months Ended March 31, 2012	Retail Products			Group, Voluntary and Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,136		$	4,073		$	507		$	686		$	6,402		$	1,947		$	744		$	14		$	9,107		$	22		$	9,129
Universal life and investment-type product policy fees		1,114			166			51			196			1,527			323			119			40			2,009			69			2,078
Net investment income		1,856			491			1,401			299			4,047			653			185			200			5,085			1,115			6,200
Other revenues		205			112			64			5			386			16			36			51			489			108			597
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(110	)		(110	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			(1,978	)		(1,978	)
Total revenues		4,311			4,842			2,023			1,186			12,362			2,939			1,084			305			16,690			(774	)		15,916
Expenses
Policyholder benefits and claims and policyholder dividends		1,902			3,639			1,092			592			7,225			1,269			434			11			8,939			508			9,447
Interest credited to policyholder account balances		596			42			339			100			1,077			427			35			—			1,539			1,018			2,557
Capitalization of DAC		(405	)		(102	)		(7	)		(84	)		(598	)		(561	)		(203	)		—			(1,362	)		(2	)		(1,364	)
Amortization of DAC and VOBA		333			101			10			55			499			355			164			—			1,018			(304	)		714
Amortization of negative VOBA		—			—			—			(2	)		(2	)		(130	)		(5	)		—			(137	)		(18	)		(155	)
Interest expense on debt		—			—			2			1			3			1			—			309			313			45			358
Other expenses		1,256			716			128			326			2,426			1,122			540			203			4,291			477			4,768
Total expenses		3,682			4,396			1,564			988			10,630			2,483			965			523			14,601			1,724			16,325
Provision for income tax expense (benefit)		221			142			161			50			574			159			43			(180	)		596			(871	)		(275	)
Operating earnings	$	408		$	304		$	298		$	148		$	1,158		$	297		$	76		$	(38	)		1,493
Adjustments to:
Total revenues																										(774	)
Total expenses																										(1,724	)
Provision for income tax (expense) benefit																										871
Income (loss) from continuing operations, net of income tax																									$	(134	)				$	(134	)

	Operating Earnings
	The Americas
Three Months Ended March 31, 2011	Retail Products			Group, Voluntary and Work site Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate & Other			Total			Adjustments			Total Consolidated
																(In millions)
Revenues
Premiums	$	1,025		$	3,976		$	423		$	594		$	6,018		$	1,803		$	697		$	14		$	8,532		$	22		$	8,554
Universal life and investment-type product policy fees		991			159			54			189			1,393			297			104			38			1,832			57			1,889
Net investment income		1,808			485			1,386			166			3,845			513			173			252			4,783			530			5,313
Other revenues		182			101			60			4			347			12			26			83			468			98			566
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(99	)		(99	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			(315	)		(315	)
Total revenues		4,006			4,721			1,923			953			11,603			2,625			1,000			387			15,615			293			15,908
Expenses
Policyholder benefits and claims and policyholder dividends		1,779			3,594			1,020			424			6,817			1,198			408			16			8,439			170			8,609
Interest credited to policyholder account balances		591			43			335			91			1,060			380			39			—			1,479			445			1,924
Capitalization of DAC		(421	)		(122	)		(12	)		(75	)		(630	)		(451	)		(181	)		—			(1,262	)		(2	)		(1,264	)
Amortization of DAC and VOBA		338			114			5			47			504			329			164			—			997			(58	)		939
Amortization of negative VOBA		—			—			—			(2	)		(2	)		(146	)		(15	)		—			(163	)		(20	)		(183	)
Interest expense on debt		—			—			2			—			2			1			1			319			323			92			415
Other expenses		1,197			692			126			309			2,324			990			458			118			3,890			293			4,183
Total expenses		3,484			4,321			1,476			794			10,075			2,301			874			453			13,703			920			14,623
Provision for income tax expense (benefit)		181			127			158			38			504			100			47			(87	)		564			(203	)		361
Operating earnings	$	341		$	273		$	289		$	121		$	1,024		$	224		$	79		$	21			1,348
Adjustments to:
Total revenues																										293
Total expenses																										(920	)
Provision for income tax (expense) benefit																										203
Income (loss) from continuing operations, net of income tax																									$	924					$	924

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

	March 31, 2012		December 31, 2011
	(In millions)
Retail Products	$	309,594	$	295,012
Group, Voluntary and Worksite Benefits		50,927		51,776
Corporate Benefit Funding		202,750		195,217
Latin America		23,270		20,315
Asia		114,875		112,955
EMEA		34,927		32,891
Corporate & Other		83,261		88,060
Total	$	819,604	$	796,226

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 from U.S. operations were $11.3 billion and $10.9 billion for the three months ended March 31, 2012 and 2011, respectively, which represented 68% and 70%, respectively, of consolidated operating revenues.