NU Online News Service, Aug. 4, 2003, 8:53 p.m. EDT – Steady sales, reduced investment losses and the merger of two subsidiaries in Mexico helped MetLife Inc., New York, increase earnings in the second quarter in spite of a decrease in investment yields.
MetLife is reporting $611 million in net income for the latest quarter on $8.9 billion in revenue, up from $387 million in net income on $8.2 billion in revenue for the second quarter of 2002.
Although the group life and health unit generated $260 million in operating earnings on $3.6 billion in revenue, up from $250 million in operating earnings on $3.5 billion in revenue, the individual life and health unit earned $182 million on $3.1 billion in revenue, down from $196 million on $3.1 billion in revenue.
But the net loss on investments sold, written down or written off during the quarter fell to $54 million, from $185 million.
The international operations earned $102 million on $618 million in revenue, up from $2 million on $379 million in revenue.
The international operations did so well partly because MetLife merged a newly acquired Mexican subsidiary with an older Mexican subsidiary. International operating earnings include $62 million freed when MetLife changed the way it computes policyholder reserve liabilities, MetLife says in a footnote in its financial supplement.
Like many other life insurers, MetLife is enjoying big gains in sales of variable annuities.
Deposits to fixed annuities increased to $340 million during the latest quarter, up from $283 million during the second quarter of 2002. But deposits to variable annuities jumped to $2.6 billion, from $1.6 billion.
The average annuity spread, or difference between the rate MetLife credited fixed annuity holders and the rate it earned on its own investments, narrowed to 1.95 percentage points, from 2.14 percentage points.
The company’s gross investment income yield fell to 6.76 percentage points, from 7.46 percentage points, according to the financial supplement.