Segment Information

9 Months Ended

Sep. 30, 2012

Segment Information [Abstract]

Segment Information

17. 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. As anticipated, in the third quarter of 2012, the Company continued to realign certain products and businesses among its existing segments as noted below. Prior period results have been revised in connection with these changes.

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 & Other and Annuities. Life & Other insurance products and services include variable life, universal life, term life and whole life products. Additionally, through broker-dealer affiliates, the Company offers a full range of mutual funds and other securities products. Life & Other products and services also include individual disability income products and personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance. Annuities include a variety of variable and fixed annuities which provide for both asset accumulation and asset distribution needs.

•     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 two businesses: Group and Voluntary & Worksite. Group insurance products and services include variable life, universal life and term life products. Group insurance products and services also include dental, group short- and long-term disability and accidental death & dismemberment coverages. The Voluntary & Worksite business includes personal lines property & casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance offered to employees on a voluntary basis. The Voluntary & Worksite business also includes long-term care, prepaid legal plans and critical illness products.

•     Corporate Benefit Funding. The Corporate Benefit Funding segment offers a broad range 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.

In addition, the Company reports certain of its results of operations in Corporate & Other, which includes MetLife Bank (see Note 2) and other business activities. 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 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.

As discussed above, in the third quarter of 2012, as anticipated as part of the November 2011 reorganization, management realigned certain individual disability income and property & casualty products and began reporting such product results in the Retail segment. As a result of the first quarter segment reorganization, these results had been reported in the Group, Voluntary & Worksite Benefits segment. In accordance with the third quarter 2012 realignment, prior period operating earnings for the Retail segment increased by $14 million, net of $6 million of income tax benefit, and $17 million, net of $29 million of income tax benefit, with a corresponding decrease in the Group, Voluntary & Worksite Benefits segment, for the three months and nine months ended September 30, 2011, respectively.

Also, as anticipated as part of the November 2011 reorganization, in the third quarter of 2012, management realigned the businesses in South Asia and India and began reporting such results in the Asia segment. As a result of the first quarter segment reorganization, these results had been reported in the EMEA segment. In accordance with the third quarter 2012 realignment, prior period operating earnings for the Asia segment increased by $0, net of $2 million of income tax, and $4 million, net of $5 million of income tax, with a corresponding decrease in the EMEA segment, for the three months and nine months ended September 30, 2011, respectively.

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). Operating expenses also excludes goodwill impairments.

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. In the third quarter of 2012, MetLife, Inc. began reporting additional MetLife Bank operations as Divested Businesses. See Note 2. Consequently, prior period results for Corporate & Other have decreased by $41 million, net of $25 million of income tax, and $44 million, net of $27 million of income tax, for the three months and nine months ended September 30, 2011, respectively. Also, prior period results for Latin America have decreased by $3 million, net of $2 million of income tax, and $10 million, net of $5 million of income tax, for the three months and nine months ended September 30, 2011, respectively. As a result of the modified definition, prior period consolidated operating earnings have decreased by $44 million, net of $27 million of income tax, and $54 million, net of $32 million of income tax, for the three months and nine months ended September 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 nine months ended September 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 September 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	$	1,604		$	3,753		$	450		$	610		$	6,417		$	2,112		$	536		$	15		$	9,080		$	16		$	9,096
Universal life and investment-type product policy fees		1,132			166			53			189			1,540			388			82			38			2,048			83			2,131
Net investment income		1,930			450			1,421			299			4,100			709			122			117			5,048			469			5,517
Other revenues		221			100			64			3			388			4			35			8			435			20			455
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			22			22
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			(718	)		(718	)
Total revenues		4,887			4,469			1,988			1,101			12,445			3,213			775			178			16,611			(108	)		16,503
Expenses
Policyholder benefits and claims and policyholder dividends		2,228			3,449			1,070			507			7,254			1,455			255			31			8,995			303			9,298
Interest credited to policyholder account balances		598			42			339			99			1,078			468			32			11			1,589			513			2,102
Goodwill impairment		—			—			—			—			—			—			—			—			—			1,868			1,868
Capitalization of DAC		(430	)		(38	)		(13	)		(83	)		(564	)		(579	)		(158	)		—			(1,301	)		(1	)		(1,302	)
Amortization of DAC and VOBA		438			40			4			42			524			396			130			1			1,051			(43	)		1,008
Amortization of negative VOBA		—			—			—			(1	)		(1	)		(128	)		(26	)		—			(155	)		(15	)		(170	)
Interest expense on debt		—			1			2			(4	)		(1	)		—			2			285			286			40			326
Other expenses		1,308			547			120			353			2,328			1,206			440			146			4,120			263			4,383
Total expenses		4,142			4,041			1,522			913			10,618			2,818			675			474			14,585			2,928			17,513
Provision for income tax expense (benefit)		253			145			163			36			597			136			38			(192	)		579			(632	)		(53	)
Operating earnings	$	492		$	283		$	303		$	152		$	1,230		$	259		$	62		$	(104	)		1,447
Adjustments to:
Total revenues																										(108	)
Total expenses																										(2,928	)
Provision for income tax (expense) benefit																										632
Income (loss) from continuing operations, net of income tax																									$	(957	)				$	(957	)

	Operating Earnings
	The Americas
Three Months Ended September 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	$	1,770		$	3,431		$	835		$	672		$	6,708		$	1,967		$	630		$	14		$	9,319		$	23		$	9,342
Universal life and investment-type product policy fees		1,027			159			69			188			1,443			357			67			39			1,906			92			1,998
Net investment income		1,842			448			1,375			289			3,954			643			151			213			4,961			(709	)		4,252
Other revenues		204			97			61			8			370			8			29			11			418			302			720
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(55	)		(55	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			4,196			4,196
Total revenues		4,843			4,135			2,340			1,157			12,475			2,975			877			277			16,604			3,849			20,453
Expenses
Policyholder benefits and claims and policyholder dividends		2,523			3,319			1,459			576			7,877			1,325			341			61			9,604			(202	)		9,402
Interest credited to policyholder account balances		617			46			327			95			1,085			414			35			—			1,534			(796	)		738
Goodwill impairment		—			—			—			—			—			—			—			—			—			—			—
Capitalization of DAC		(660	)		(47	)		(6	)		(78	)		(791	)		(576	)		(157	)		—			(1,524	)		(3	)		(1,527	)
Amortization of DAC and VOBA		521			43			4			45			613			407			142			—			1,162			556			1,718
Amortization of negative VOBA		—			—			—			—			—			(137	)		(13	)		—			(150	)		(20	)		(170	)
Interest expense on debt		—			—			2			—			2			—			—			325			327			98			425
Other expenses		1,527			547			136			333			2,543			1,213			423			153			4,332			420			4,752
Total expenses		4,528			3,908			1,922			971			11,329			2,646			771			539			15,285			53			15,338
Provision for income tax expense (benefit)		101			74			146			45			366			107			41			(190	)		324			1,349			1,673
Operating earnings	$	214		$	153		$	272		$	141		$	780		$	222		$	65		$	(72	)		995
Adjustments to:
Total revenues																										3,849
Total expenses																										(53	)
Provision for income tax (expense) benefit																										(1,349	)
Income (loss) from continuing operations, net of income tax																									$	3,442					$	3,442

	Operating Earnings
	The Americas
Nine Months Ended September 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	$	4,804		$	11,021		$	1,480		$	1,948		$	19,253		$	6,215		$	1,815		$	43		$	27,326		$	60		$	27,386
Universal life and investment-type product policy fees		3,365			497			161			581			4,604			1,102			233			117			6,056			250			6,306
Net investment income		5,735			1,325			4,253			881			12,194			2,150			406			547			15,297			1,139			16,436
Other revenues		647			320			193			11			1,171			17			98			27			1,313			132			1,445
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(152	)		(152	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			(604	)		(604	)
Total revenues		14,551			13,163			6,087			3,421			37,222			9,484			2,552			734			49,992			825			50,817
Expenses
Policyholder benefits and claims and policyholder dividends		6,668			10,153			3,293			1,667			21,781			4,250			941			94			27,066			942			28,008
Interest credited to policyholder account balances		1,784			127			1,016			289			3,216			1,323			91			23			4,653			1,028			5,681
Goodwill impairment		—			—			—			—			—			—			—			—			—			1,868			1,868
Capitalization of DAC		(1,352	)		(102	)		(28	)		(238	)		(1,720	)		(1,721	)		(535	)		—			(3,976	)		(5	)		(3,981	)
Amortization of DAC and VOBA		1,319			98			18			151			1,586			1,188			456			1			3,231			(30	)		3,201
Amortization of negative VOBA		—			—			—			(4	)		(4	)		(387	)		(65	)		—			(456	)		(50	)		(506	)
Interest expense on debt		—			1			6			(3	)		4			5			3			886			898			128			1,026
Other expenses		4,060			1,692			368			1,002			7,122			3,550			1,333			409			12,414			1,187			13,601
Total expenses		12,479			11,969			4,673			2,864			31,985			8,208			2,224			1,413			43,830			5,068			48,898
Provision for income tax expense (benefit)		703			401			495			122			1,721			437			116			(516	)		1,758			(1,048	)		710
Operating earnings	$	1,369		$	793		$	919		$	435		$	3,516		$	839		$	212		$	(163	)		4,404
Adjustments to:
Total revenues																										825
Total expenses																										(5,068	)
Provision for income tax (expense) benefit																										1,048
Income (loss) from continuing operations, net of income tax																									$	1,209					$	1,209

	Operating Earnings
	The Americas
Nine Months Ended September 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	$	4,907		$	10,458		$	2,132		$	1,913		$	19,410		$	5,774		$	1,896		$	41		$	27,121		$	69		$	27,190
Universal life and investment-type product policy fees		3,050			473			181			571			4,275			1,020			236			115			5,646			210			5,856
Net investment income		5,585			1,330			4,169			727			11,811			1,799			455			681			14,746			(88	)		14,658
Other revenues		583			287			182			14			1,066			28			84			54			1,232			646			1,878
Net investment gains (losses)		—			—			—			—			—			—			—			—			—			(309	)		(309	)
Net derivative gains (losses)		—			—			—			—			—			—			—			—			—			4,233			4,233
Total revenues		14,125			12,548			6,664			3,225			36,562			8,621			2,671			891			48,745			4,761			53,506
Expenses
Policyholder benefits and claims and policyholder dividends		7,013			9,803			3,925			1,534			22,275			3,931			1,008			101			27,315			191			27,506
Interest credited to policyholder account balances		1,803			134			993			280			3,210			1,193			118			—			4,521			(417	)		4,104
Goodwill impairment		—			—			—			—			—			—			—			—			—			—			—
Capitalization of DAC		(1,728	)		(144	)		(23	)		(231	)		(2,126	)		(1,530	)		(495	)		—			(4,151	)		(7	)		(4,158	)
Amortization of DAC and VOBA		1,363			140			14			154			1,671			1,163			461			—			3,295			616			3,911
Amortization of negative VOBA		—			—			—			(4	)		(4	)		(426	)		(46	)		—			(476	)		(60	)		(536	)
Interest expense on debt		—			—			7			1			8			—			1			969			978			282			1,260
Other expenses		4,340			1,639			384			981			7,344			3,371			1,290			358			12,363			1,147			13,510
Total expenses		12,791			11,572			5,300			2,715			32,378			7,702			2,337			1,428			43,845			1,752			45,597
Provision for income tax expense (benefit)		443			325			478			119			1,365			298			130			(417	)		1,376			1,105			2,481
Operating earnings	$	891		$	651		$	886		$	391		$	2,819		$	621		$	204		$	(120	)		3,524
Adjustments to:
Total revenues																										4,761
Total expenses																										(1,752	)
Provision for income tax (expense) benefit																										(1,105	)
Income (loss) from continuing operations, net of income tax																									$	5,428					$	5,428

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

	September 30, 2012		December 31, 2011
	(In millions)
Retail	$	325,294	$	301,591
Group, Voluntary & Worksite Benefits		44,834		45,197
Corporate Benefit Funding		222,963		195,217
Latin America		22,990		20,315
Asia		130,772		115,806
EMEA		22,927		30,040
Corporate & Other		76,505		88,060
Total	$	846,285	$	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.