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November 03, 2007 at 12:58 AM
International operations helped MetLife Inc. hold profits steady during the third quarter.
MetLife, New York, is reporting $1 billion in net income for the latest quarter on $13 billion in revenue, compared with $1 billion in net income on $12.5 billion in revenue for the third quarter of 2006.
U.S. life profit margins shrank, but rising separate account fee income contributed to a 22% increase in annuity operating earnings, to $235 million, MetLife says.
Due in part to business growth in Latin America and the Pacific region, international operating income increased to $134 million, from $72 million.
In Japan, MetLife attracted the equivalent of $1.7 billion in annuity deposits, up 10% from the total for the third quarter of 2006.
At the corporate level, “MetLife took advantage of higher interest rates to improve its investment portfolio return,” the company says.
The portfolio realignment led to the realization of $339 million investment losses, MetLife says.
In other earnings news:
- Prudential Financial Inc., Newark, N.J., is reporting $867 million in net income for the third quarter on $8.4 billion in revenue, compared with $1.2 billion in net income on $8.4 billion in revenue for the third quarter of 2006.
Sales of term life and universal life increased to $94 million from $69 million, and net annuity sales increased to $444 million from $197 million, Prudential says.
Group life and disability sales fell to $54 million, from $127 million.
When Prudential reports financial results, it prefers to separate results for its “closed block business” from the results of its “financial services business.”
Prudential says after-tax adjusted operating income for the financial services businesses increased to $905 million, from $828 million, Prudential says.
Adjusted operating income excludes the effects of changes in the investment climate.
Investment gains on trading account assets fell to $36 million, from $257 million, and Prudential realized $109 million in net investment losses during the quarter.
The company realized $257 million in investment gains during the third quarter of 2006, the company says.
“Net realized investment losses in the current quarter include $44 million of losses from impairments and sales of credit-impaired securities and $67 million from disposals of asset-backed securities collateralized by subprime mortgages, Prudential says.
At the end of the third quarter, “gross unrealized losses on general account fixed maturity investments of the financial services businesses” amounted to $1.5 billion, including $1.3 billion on investment-grade securities and $318 million related to asset-backed securities collateralized by subprime mortgages, Prudential says.
- Lincoln National Corp., Philadelphia, is reporting $1.1 billion in net income for the third quarter on $8.1 billion in revenue, compared with $934 million in net income on $6.4 billion in revenue for the third quarter of 2006.
The net flow of cash into individual variable annuities increased 49% during the quarter, to $1.5 billion, but individual annuity operating income fell to $107 million, from $129 million, primarily because of “hedge program performance and the impact of fair value accounting on liabilities … related to indexed annuity products,” Lincoln National says.
Individual life income increased to $174 million, from $123 million, and group protection income increased to $33 million, from $29 million.
- Principal Financial Group Inc., Des Moines, Iowa, is reporting $240 million in net income for the third quarter on $2.8 billion in revenue, compared with $259 million in net income on $2.4 billion in revenue for the third quarter of 2006.
