Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

16. 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; Group, Voluntary & 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. The Retail 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. Additionally, through our broker-dealer affiliates, we offer a full range of mutual funds and other securities products.

•     Group, Voluntary & Worksite Benefits. The Group, Voluntary & 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. This segment also includes certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance non-qualified benefit programs for executives.

•     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 of certain variable annuity products from the Company’s former operating joint venture in Japan. This in-force reinsurance agreement reinsures 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 the 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 $15 million of income tax, and $54 million, net of $31 million of income tax, for the three months and six months ended June 30, 2011, respectively. Also, prior period results for Latin America have been decreased by $3 million, net of $1 million of income tax, and $7 million, net of $3 million of income tax, for the three months and six months ended June 30, 2011, respectively. As a result of the modified definition, prior period consolidated operating earnings increased by $24 million, net of $14 million of income tax, and $47 million, net of $28 million of income tax, for the three months and six months ended June 30, 2011, 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 three months and six months ended June 30, 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 June 30, 2012	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate &  Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,081		$	4,178		$	523		$	652		$	6,434		$	2,011		$	680		$	14		$	9,139		$	22		$	9,161
Universal life and investment-type product policy fees		1,119			165			57			196			1,537			315			108			39			1,999			98			2,097
Net investment income		1,839			494			1,431			283			4,047			730			157			253			5,187			(468	)		4,719
Other revenues		213			116			65			3			397			(3	)		27			43			464			(71	)		393
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(64	)		(64	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			2,092			2,092
Total revenues		4,252			4,953			2,076			1,134			12,415			3,053			972			349			16,789			1,609			18,398
Expenses
Policyholder benefits and claims and policyholder dividends		1,837			3,766			1,131			568			7,302			1,374			404			52			9,132			131			9,263
Interest credited to policyholder account balances		590			43			338			90			1,061			426			26			12			1,525			(503	)		1,022
Capitalization of DAC		(367	)		(112	)		(8	)		(71	)		(558	)		(538	)		(217	)		—			(1,313	)		(2	)		(1,315	)
Amortization of DAC and VOBA		407			98			4			54			563			404			195			—			1,162			317			1,479
Amortization of negative VOBA		—			—			—			(1	)		(1	)		(127	)		(36	)		—			(164	)		(17	)		(181	)
Interest expense on debt		—			—			2			—			2			4			1			292			299			43			342
Other expenses		1,201			724			120			323			2,368			1,097			478			170			4,113			337			4,450
Total expenses		3,668			4,519			1,587			963			10,737			2,640			851			526			14,754			306			15,060
Provision for income tax expense (benefit)		204			139			171			36			550			138			39			(149	)		578			460			1,038
Operating earnings	$	380		$	295		$	318		$	135		$	1,128		$	275		$	82		$	(28	)		1,457
Adjustments to:
Total revenues																										1,609
Total expenses																										(306	)
Provision for income tax (expense) benefit																										(460	)
Income (loss) from continuing operations, net of income tax																									$	2,300					$	2,300

	Operating Earnings
	The Americas
Three Months Ended June 30, 2011	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate &  Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	1,135		$	4,028		$	874		$	647		$	6,684		$	1,884		$	689		$	13		$	9,270		$	24		$	9,294
Universal life and investment-type product policy fees		1,032			155			58			194			1,439			296			135			38			1,908			61			1,969
Net investment income		1,827			505			1,408			272			4,012			596			178			225			5,011			83			5,094
Other revenues		187			99			61			2			349			8			29			72			458			134			592
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(155	)		(155	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			352			352
Total revenues		4,181			4,787			2,401			1,115			12,484			2,784			1,031			348			16,647			499			17,146
Expenses
Policyholder benefits and claims and policyholder dividends		1,876			3,725			1,446			534			7,581			1,272			395			24			9,272			223			9,495
Interest credited to policyholder account balances		595			45			331			94			1,065			398			45			—			1,508			(66	)		1,442
Capitalization of DAC		(499	)		(123	)		(5	)		(78	)		(705	)		(467	)		(193	)		—			(1,365	)		(2	)		(1,367	)
Amortization of DAC and VOBA		368			119			5			62			554			401			181			—			1,136			118			1,254
Amortization of negative VOBA		—			—			—			(2	)		(2	)		(141	)		(20	)		—			(163	)		(20	)		(183	)
Interest expense on debt		—			—			3			1			4			(1	)		—			325			328			92			420
Other expenses		1,324			692			122			339			2,477			1,063			514			118			4,172			403			4,575
Total expenses		3,664			4,458			1,902			950			10,974			2,525			922			467			14,888			748			15,636
Provision for income tax expense (benefit)		184			101			174			36			495			88			45			(107	)		521			(73	)		448
Operating earnings	$	333		$	228		$	325		$	129		$	1,015		$	171		$	64		$	(12	)		1,238
Adjustments to:
Total revenues																										499
Total expenses																										(748	)
Provision for income tax (expense) benefit																										73
Income (loss) from continuing operations, net of income tax																									$	1,062					$	1,062

	Operating Earnings
	The Americas
Six Months Ended June 30, 2012	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate &  Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	2,217		$	8,251		$	1,030		$	1,338		$	12,836		$	3,958		$	1,424		$	28		$	18,246		$	44		$	18,290
Universal life and investment-type product policy fees		2,233			331			108			392			3,064			638			227			79			4,008			167			4,175
Net investment income		3,695			985			2,832			582			8,094			1,383			342			453			10,272			647			10,919
Other revenues		418			228			129			8			783			13			63			94			953			37			990
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(174	)		(174	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			114			114
Total revenues		8,563			9,795			4,099			2,320			24,777			5,992			2,056			654			33,479			835			34,314
Expenses
Policyholder benefits and claims and policyholder dividends		3,739			7,405			2,223			1,160			14,527			2,643			838			63			18,071			639			18,710
Interest credited to policyholder account balances		1,186			85			677			190			2,138			853			61			12			3,064			515			3,579
Capitalization of DAC		(772	)		(214	)		(15	)		(155	)		(1,156	)		(1,099	)		(420	)		—			(2,675	)		(4	)		(2,679	)
Amortization of DAC and VOBA		740			199			14			109			1,062			759			359			—			2,180			13			2,193
Amortization of negative VOBA		—			—			—			(3	)		(3	)		(257	)		(41	)		—			(301	)		(35	)		(336	)
Interest expense on debt		—			—			4			1			5			5			1			601			612			88			700
Other expenses		2,457			1,440			248			649			4,794			2,219			1,018			373			8,404			814			9,218
Total expenses		7,350			8,915			3,151			1,951			21,367			5,123			1,816			1,049			29,355			2,030			31,385
Provision for income tax expense (benefit)		425			281			332			86			1,124			297			82			(329	)		1,174			(411	)		763
Operating earnings	$	788		$	599		$	616		$	283		$	2,286		$	572		$	158		$	(66	)		2,950
Adjustments to:
Total revenues																										835
Total expenses																										(2,030	)
Provision for income tax (expense) benefit																										411
Income (loss) from continuing operations, net of income tax																									$	2,166					$	2,166

	Operating Earnings
	The Americas
Six Months Ended June 30, 2011	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Latin America			Total			Asia			EMEA			Corporate &  Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	2,160		$	8,004		$	1,297		$	1,241		$	12,702		$	3,687		$	1,386		$	27		$	17,802		$	46		$	17,848
Universal life and investment-type product policy fees		2,023			314			112			383			2,832			593			239			76			3,740			118			3,858
Net investment income		3,635			990			2,794			438			7,857			1,109			351			477			9,794			612			10,406
Other revenues		369			200			121			6			696			20			55			155			926			232			1,158
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(254	)		(254	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			37			37
Total revenues		8,187			9,508			4,324			2,068			24,087			5,409			2,031			735			32,262			791			33,053
Expenses
Policyholder benefits and claims and policyholder dividends		3,655			7,319			2,466			958			14,398			2,470			803			40			17,711			393			18,104
Interest credited to policyholder account balances		1,186			88			666			185			2,125			778			84			—			2,987			379			3,366
Capitalization of DAC		(920	)		(245	)		(17	)		(153	)		(1,335	)		(918	)		(374	)		—			(2,627	)		(4	)		(2,631	)
Amortization of DAC and VOBA		706			233			10			109			1,058			730			345			—			2,133			60			2,193
Amortization of negative VOBA		—			—			—			(4	)		(4	)		(287	)		(35	)		—			(326	)		(40	)		(366	)
Interest expense on debt		—			—			5			1			6			—			1			644			651			184			835
Other expenses		2,521			1,384			248			648			4,801			2,053			972			236			8,062			696			8,758
Total expenses		7,148			8,779			3,378			1,744			21,049			4,826			1,796			920			28,591			1,668			30,259
Provision for income tax expense (benefit)		365			228			332			74			999			188			92			(194	)		1,085			(277	)		808
Operating earnings	$	674		$	501		$	614		$	250		$	2,039		$	395		$	143		$	9			2,586
Adjustments to:
Total revenues																										791
Total expenses																										(1,668	)
Provision for income tax (expense) benefit																										277
Income (loss) from continuing operations, net of income tax																									$	1,986					$	1,986

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

	June 30, 2012		December 31, 2011
	(In millions)
Retail	$	310,874	$	295,012
Group, Voluntary & Worksite Benefits		52,459		51,776
Corporate Benefit Funding		211,619		195,217
Latin America		23,426		20,315
Asia		118,073		112,955
EMEA		33,615		32,891
Corporate & Other		75,122		88,060
Total	$	825,188	$	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.