Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information [Abstract]

Segment Information

2. Segment Information

MetLife is organized into six segments, reflecting three 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, National Association (“MetLife Bank”) (see Note 3) and other business activities.

As anticipated, in the third quarter of 2012, the Company continued to realign certain products and businesses among its existing segments. Management realigned certain individual disability income and property & casualty products, which were previously reported in the Group, Voluntary & Worksite Benefits segment and began reporting such product results in the Retail segment. In accordance with this realignment, prior period operating earnings for the Retail segment increased by $28 million, net of $6 million of income tax, and $89 million, net of $25 million of income tax, with a corresponding decrease in the Group, Voluntary & Worksite Benefits segment, for the three months and six months ended June 30, 2012, respectively. Management also realigned the businesses in South Asia and India, which were previously reported in the EMEA segment and began reporting such results in the Asia segment. In accordance with this realignment, prior period operating earnings for the Asia segment increased by $4 million, net of $2 million of income tax, and $8 million, net of $4 million of income tax, with a corresponding decrease in the EMEA segment, for the three months and six months ended June 30, 2012, respectively.

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 includes 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 insurance, endowment and retirement & savings products written in Latin America. Starting in the first quarter of 2013, the Latin America segment includes U.S. sponsored direct business, comprised of group products sold through sponsoring organizations and affinity groups. Products included are life, dental, group short- and long-term disability, accidental death & dismemberment coverages, property & casualty and critical illness.

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 insurance, annuities, endowment and retirement & savings products.

Corporate & Other

Corporate & Other contains the excess capital not allocated to the segments, external integration costs, internal resource costs for associates committed to acquisitions, enterprise-wide strategic initiative restructuring charges, and various start-up and certain run-off businesses. Start-up businesses include expatriate benefits insurance, as well as direct and digital marketing products. Corporate & Other also includes assumed reinsurance of certain variable annuity products from the Company’s former operating joint venture in Japan. Under this in-force reinsurance agreement, the Company 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 and 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.

Financial Measures and Segment Accounting Policies

Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP 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 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 (“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 guaranteed minimum income benefits (“GMIBs”) 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 or that are used to replicate certain 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 policyholder account balances (“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 deferred policy acquisition costs (“DAC”) and value of business acquired (“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.

Operating earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

In the third quarter of 2012, MetLife began reporting additional MetLife Bank operations as Divested Businesses. See Note 3 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report. Consequently, prior period results for Corporate & Other have increased by $6 million, net of $5 million of income tax, and $7 million, net of $5 million of income tax, for the three months and six months ended June 30, 2012, 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, 2013 and 2012. 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.

Net investment income is based upon the actual results of each segment’s specifically identifiable investment 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 Earnings
	Americas
Three Months Ended June 30, 2013	Retail		Group, Voluntary  & Worksite  Benefits		Corporate  Benefit Funding		Latin   America		Total		Asia		EMEA		Corporate   & Other		Total		Adjustments		Total  Consolidated
	(In millions)
Revenues
Premiums		$    1,581		$  3,797		$      503		$      710		$      6,591		$  1,980		$      558		$      28		$  9,157	$	1		$  9,158
Universal life and investment-type product policy fees		1,238		170		65		235		1,708		442		96		35		2,281		90		2,371
Net investment income		1,987		472		1,443		281		4,183		723		120		78		5,104		178		5,282
Other revenues		257		105		67		5		434		28		34		4		500		(10)		490
Net investment gains (losses)		—		—		—		—		—		—		—		—		—		110		110
Net derivative gains (losses)		—		—		—		—		—		—		—		—		—		(1,690)		(1,690)
Total revenues		5,063		4,544		2,078		1,231		12,916		3,173		808		145		17,042		(1,321)		15,721
Expenses
Policyholder benefits and claims and policyholder dividends		2,272		3,514		1,110		601		7,497		1,433		256		18		9,204		85		9,289
Interest credited to policyholder account balances		589		39		305		103		1,036		437		37		11		1,521		325		1,846
Capitalization of DAC		(344)		(35)		(6)		(108)		(493)		(522)		(192)		(5)		(1,212)		—		(1,212)
Amortization of DAC and VOBA		396		33		6		83		518		392		195		—		1,105		(147)		958
Amortization of negative VOBA		—		—		—		—		—		(113)		(11)		—		(124)		(14)		(138)
Interest expense on debt		1		1		2		1		5		—		(1)		283		287		34		321
Other expenses		1,265		578		121		390		2,354		1,054		460		146		4,014		82		4,096
Total expenses		4,179		4,130		1,538		1,070		10,917		2,681		744		453		14,795		365		15,160
Provision for income tax expense (benefit)		303		139		190		36		668		162		(4)		(203)		623		(570)		53
Operating earnings		$581	$	275	$	350	$	125	$	1,331	$	330	$	68	$	(105)		1,624
Adjustments to:
Total revenues																		(1,321)
Total expenses																		(365)
Provision for income tax (expense) benefit																		570
Income (loss) from continuing operations, net of income tax																	$	508			$	508

	Operating Earnings
	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	$	1,576	$	3,683	$	523	$	652	$	6,434	$	2,064	$	627	$	14	$	9,139	$	22	$	9,161
Universal life and investment-type product policy fees		1,119		165		57		196		1,537		352		71		39		1,999		98		2,097
Net investment income		1,894		439		1,431		283		4,047		760		127		238		5,172		(453)		4,719
Other revenues		217		112		65		3		397		(3)		27		5		426		(33)		393
Net investment gains (losses)		—		—		—		—		—		—		—		—		—		(64)		(64)
Net derivative gains (losses)		—		—		—		—		—		—		—		—		—		2,092		2,092
Total revenues		4,806		4,399		2,076		1,134		12,415		3,173		852		296		16,736		1,662		18,398
Expenses
Policyholder benefits and claims and policyholder dividends		2,212		3,391		1,131		568		7,302		1,435		343		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		(446)		(33)		(8)		(71)		(558)		(555)		(200)		—		(1,313)		(2)		(1,315)
Amortization of DAC and VOBA		477		28		4		54		563		419		180		—		1,162		317		1,479
Amortization of negative VOBA		—		—		—		(1)		(1)		(128)		(35)		—		(164)		(17)		(181)
Interest expense on debt		—		—		2		—		2		4		1		290		297		45		342
Other expenses		1,355		570		120		323		2,368		1,153		422		108		4,051		399		4,450
Total expenses		4,188		3,999		1,587		963		10,737		2,754		737		462		14,690		370		15,060
Provision for income tax expense (benefit)		210		133		171		36		550		140		37		(144)		583		455		1,038
Operating earnings	$	408	$	267	$	318	$	135	$	1,128	$	279	$	78	$	(22)		1,463
Adjustments to:
Total revenues																		1,662
Total expenses																		(370)
Provision for income tax (expense) benefit																		(455)
Income (loss) from continuing operations, net of income tax																	$	2,300			$	2,300

	Operating Earnings
	Americas
Six Months Ended June 30, 2013	Retail		Group, Voluntary  & Worksite  Benefits		Corporate  Benefit Funding		Latin   America		Total		Asia		EMEA		Corporate   & Other		Total		Adjustments		Total  Consolidated
	(In millions)
Revenues
Premiums	$	3,128	$	7,671	$	967	$	1,385	$	13,151	$	3,978	$	1,125	$	54	$	18,308	$	1	$	18,309
Universal life and investment-type product policy fees		2,405		350		133		460		3,348		886		187		71		4,492		170		4,662
Net investment income		3,948		925		2,878		558		8,309		1,455		248		224		10,236		1,123		11,359
Other revenues		500		213		140		9		862		41		61		17		981		(11)		970
Net investment gains (losses)		—		—		—		—		—		—		—		—		—		424		424
Net derivative gains (losses)		—		—		—		—		—		—		—		—		—		(2,320)		(2,320)
Total revenues		9,981		9,159		4,118		2,412		25,670		6,360		1,621		366		34,017		(613)		33,404
Expenses
Policyholder benefits and claims and policyholder dividends		4,425		7,154		2,208		1,155		14,942		2,848		493		27		18,310		687		18,997
Interest credited to policyholder account balances		1,168		78		648		207		2,101		879		72		23		3,075		1,361		4,436
Capitalization of DAC		(718)		(68)		(23)		(213)		(1,022)		(1,068)		(369)		(9)		(2,468)		—		(2,468)
Amortization of DAC and VOBA		727		67		17		157		968		793		360		—		2,121		(339)		1,782
Amortization of negative VOBA		—		—		—		(1)		(1)		(226)		(28)		—		(255)		(29)		(284)
Interest expense on debt		1		1		4		—		6		—		—		569		575		67		642
Other expenses		2,543		1,166		264		762		4,735		2,148		908		310		8,101		390		8,491
Total expenses		8,146		8,398		3,118		2,067		21,729		5,374		1,436		920		29,459		2,137		31,596
Provision for income tax expense (benefit)		628		256		351		77		1,312		323		30		(396)		1,269		(964)		305
Operating earnings	$	1,207	$	505	$	649	$	268	$	2,629	$	663	$	155	$	(158)		3,289
Adjustments to:
Total revenues																		(613)
Total expenses																		(2,137)
Provision for income tax (expense) benefit																		964
Income (loss) from continuing operations, net of income tax																	$	1,503			$	1,503

	Operating Earnings
	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	$	3,200	$	7,268	$	1,030	$	1,338	$	12,836	$	4,103	$	1,279	$	28	$	18,246	$	44	$	18,290
Universal life and investment-type product policy fees		2,233		331		108		392		3,064		714		151		79		4,008		167		4,175
Net investment income		3,805		875		2,832		582		8,094		1,441		284		430		10,249		670		10,919
Other revenues		426		220		129		8		783		13		63		19		878		112		990
Net investment gains (losses)		—		—		—		—		—		—		—		—		—		(174)		(174)
Net derivative gains (losses)		—		—		—		—		—		—		—		—		—		114		114
Total revenues		9,664		8,694		4,099		2,320		24,777		6,271		1,777		556		33,381		933		34,314
Expenses
Policyholder benefits and claims and policyholder dividends		4,440		6,704		2,223		1,160		14,527		2,795		686		63		18,071		639		18,710
Interest credited to policyholder account balances		1,186		85		677		190		2,138		855		59		12		3,064		515		3,579
Capitalization of DAC		(922)		(64)		(15)		(155)		(1,156)		(1,142)		(377)		—		(2,675)		(4)		(2,679)
Amortization of DAC and VOBA		881		58		14		109		1,062		792		326		—		2,180		13		2,193
Amortization of negative VOBA		—		—		—		(3)		(3)		(259)		(39)		—		(301)		(35)		(336)
Interest expense on debt		—		—		4		1		5		5		1		601		612		88		700
Other expenses		2,752		1,145		248		649		4,794		2,344		893		263		8,294		924		9,218
Total expenses		8,337		7,928		3,151		1,951		21,367		5,390		1,549		939		29,245		2,140		31,385
Provision for income tax expense (benefit)		450		256		332		86		1,124		301		78		(324)		1,179		(416)		763
Operating earnings	$	877	$	510	$	616	$	283	$	2,286	$	580	$	150	$	(59)		2,957
Adjustments to:
Total revenues																		933
Total expenses																		(2,140)
Provision for income tax (expense) benefit																		416
Income (loss) from continuing operations, net of income tax																	$	2,166			$	2,166

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

	June 30, 2013		December 31, 2012
	(In millions)
Retail	$	336,021	$	332,387
Group, Voluntary & Worksite Benefits		43,441		44,138
Corporate Benefit Funding		219,978		217,352
Latin America		23,300		23,272
Asia		118,197		131,138
EMEA		23,293		23,474
Corporate & Other		51,432		65,020
Total	$	815,662	$	836,781