Segment Information

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Information

2. Segment Information

The Company is organized into three segments: Retail; Group, Voluntary & Worksite Benefits; and Corporate Benefit Funding. In addition, the Company reports certain of its results of operations in Corporate & Other.

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. 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. Group, Voluntary & Worksite Benefits insurance products and services include life, dental, group short- and long-term disability and accidental death and dismemberment (“AD&D”) coverages. In addition, the Group, Voluntary & Worksite Benefits segment offers LTC, critical illness and accident & health coverages, as well as prepaid legal plans.

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 structured settlements and certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance non-qualified benefit programs for executives.

Corporate & Other

Corporate & Other contains the excess capital, as well as enterprise-wide strategic initiative restructuring charges, not allocated to the segments, various start-up businesses (including the investment management business through which the Company offers fee-based investment management services to institutional clients, as well as direct and digital marketing products), certain run-off businesses, the Company’s ancillary international operations and interest expense related to the majority of the Company’s outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. In addition, Corporate & Other includes ancillary U.S. sponsored direct business, comprised of group and individual products sold through sponsoring organizations and affinity groups. Additionally, Corporate & Other 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 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”); and

• 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, and (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP.

The following 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) 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;

• 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;

• Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

• Other expenses excludes costs related to noncontrolling interests and goodwill impairments.

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, 2014, 2013 and 2012 and at December 31, 2014 and 2013. 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 MetLife, Inc.’s and the Company’s business.

MetLife, Inc.’s economic capital model aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon and applying an industry standard method for the inclusion of diversification benefits among risk types. MetLife, Inc.’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.

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 portfolios 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.

Effective January 1, 2015, the Company implemented certain segment reporting changes related to the measurement of segment operating earnings, including revising the Company’s capital allocation methodology. The changes will be applied retrospectively beginning with the first quarter of 2015. The changes will not impact total consolidated operating earnings or net income.

	Operating Results
Year Ended December 31, 2014	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	4,081		$	14,381		$	2,794		$	128		$	21,384		$	—		$	21,384
Universal life and investment-type product policy fees	1,505			716			191			—			2,412			54			2,466
Net investment income	5,402			1,783			4,892			288			12,365			(472		)	11,893
Other revenues	430			415			287			676			1,808			—			1,808
Net investment gains (losses)	—			—			—			—			—			143			143
Net derivative gains (losses)	—			—			—			—			—			1,037			1,037
Total revenues	11,418			17,295			8,164			1,092			37,969			762			38,731
Expenses
Policyholder benefits and claims and policyholder dividends	6,379			13,823			4,771			77			25,050			45			25,095
Interest credited to policyholder account balances	988			155			1,020			—			2,163			11			2,174
Capitalization of DAC	(376		)	(17		)	(30		)	(1		)	(424		)	—			(424		)
Amortization of DAC and VOBA	536			26			17			—			579			116			695
Interest expense on debt	6			2			10			132			150			1			151
Other expenses	1,797			2,135			492			1,231			5,655			(6		)	5,649
Total expenses	9,330			16,124			6,280			1,439			33,173			167			33,340
Provision for income tax expense (benefit)	733			430			659			(500		)	1,322			210			1,532
Operating earnings	$	1,355		$	741		$	1,225		$	153		3,474
Adjustments to:
Total revenues													762
Total expenses													(167		)
Provision for income tax (expense) benefit													(210		)
Income (loss) from continuing operations, net of income tax													$	3,859					$	3,859

At December 31, 2014	Retail		Group, Voluntary & Worksite Benefits		Corporate Benefit Funding		Corporate & Other		Total
	(In millions)
Total assets	$	180,572	$	43,161	$	205,088	$	29,397	$	458,218
Separate account assets	$	59,710	$	669	$	78,956	$	—	$	139,335
Separate account liabilities	$	59,710	$	669	$	78,956	$	—	$	139,335

	Operating Results
Year Ended December 31, 2013	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	3,992		$	13,732		$	2,675		$	76		$	20,475		$	—		$	20,475
Universal life and investment-type product policy fees	1,397			688			211			—			2,296			67			2,363
Net investment income	5,385			1,790			4,611			431			12,217			(432		)	11,785
Other revenues	328			404			273			694			1,699			—			1,699
Net investment gains (losses)	—			—			—			—			—			48			48
Net derivative gains (losses)	—			—			—			—			—			(1,070		)	(1,070		)
Total revenues	11,102			16,614			7,770			1,201			36,687			(1,387		)	35,300
Expenses
Policyholder benefits and claims and  policyholder dividends	6,246			13,191			4,723			67			24,227			10			24,237
Interest credited to policyholder account balances	988			156			1,092			—			2,236			17			2,253
Capitalization of DAC	(517		)	(20		)	(25		)	—			(562		)	—			(562		)
Amortization of DAC and VOBA	447			25			19			—			491			(230		)	261
Interest expense on debt	5			1			10			134			150			3			153
Other expenses	2,280			1,988			489			1,348			6,105			31			6,136
Total expenses	9,449			15,341			6,308			1,549			32,647			(169		)	32,478
Provision for income tax expense (benefit)	579			446			512			(421		)	1,116			(435		)	681
Operating earnings	$	1,074		$	827		$	950		$	73		2,924
Adjustments to:
Total revenues													(1,387		)
Total expenses													169
Provision for income tax (expense) benefit													435
Income (loss) from continuing operations, net of income tax													$	2,141					$	2,141

At December 31, 2013	Retail		Group, Voluntary & Worksite Benefits		Corporate Benefit Funding		Corporate & Other		Total
	(In millions)
Total assets	$	174,853	$	41,059	$	188,960	$	27,911	$	432,783
Separate account assets	$	59,217	$	644	$	74,935	$	—	$	134,796
Separate account liabilities	$	59,217	$	644	$	74,935	$	—	$	134,796

	Operating Results
Year Ended December 31, 2012	Retail			Group, Voluntary & Worksite Benefits			Corporate Benefit Funding			Corporate & Other			Total			Adjustments			Total Consolidated
	(In millions)
Revenues
Premiums	$	3,997		$	13,274		$	2,608		$	1		$	19,880		$	—		$	19,880
Universal life and investment-type product policy fees	1,332			663			194			—			2,189			50			2,239
Net investment income	5,384			1,680			4,519			554			12,137			(285		)	11,852
Other revenues	265			398			252			815			1,730			—			1,730
Net investment gains (losses)	—			—			—			—			—			(330		)	(330		)
Net derivative gains (losses)	—			—			—			—			—			675			675
Total revenues	10,978			16,015			7,573			1,370			35,936			110			36,046
Expenses
Policyholder benefits and claims and policyholder dividends	6,294			12,580			4,552			(1		)	23,425			139			23,564
Interest credited to policyholder account balances	1,002			167			1,192			—			2,361			29			2,390
Capitalization of DAC	(584		)	(24		)	(24		)	—			(632		)	—			(632		)
Amortization of DAC and VOBA	656			29			12			2			699			292			991
Interest expense on debt	5			1			9			133			148			4			152
Other expenses	2,341			1,901			438			1,196			5,876			7			5,883
Total expenses	9,714			14,654			6,179			1,330			31,877			471			32,348
Provision for income tax expense (benefit)	442			477			488			(236		)	1,171			(116		)	1,055
Operating earnings	$	822		$	884		$	906		$	276		2,888
Adjustments to:
Total revenues													110
Total expenses													(471		)
Provision for income tax (expense) benefit													116
Income (loss) from continuing operations, net of income tax													$	2,643					$	2,643

The following table presents total premiums, universal life and investment-type product policy fees and other revenues by major product groups of the Company’s segments, as well as Corporate & Other:

	Years Ended December 31,
	2014		2013		2012
	(In millions)
Life insurance	$	13,865	$	13,482	$	13,424
Accident and health insurance	7,247		6,873		6,458
Annuities	4,352		4,007		3,800
Non-insurance	194		175		167
Total	$	25,658	$	24,537	$	23,849

Substantially all of the Company’s consolidated premiums, universal life & investment-type product policy fees and other revenues originated in the U.S.

Revenues derived from one Group, Voluntary & Worksite Benefits customer were $2.8 billion, $2.5 billion and $2.5 billion for the years ended December 31, 2014, 2013 and 2012, respectively, which represented 11%, 10% and 11%, respectively, of consolidated premiums, universal life and investment-type product policy fees and other revenues. Revenues derived from any other customer did not exceed 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2014, 2013 and 2012.