MetLife reported strong profits in both the full year and the fourth quarter of 2011 despite a soft market, turmoil in Europe and an evolving regulatory environment.
Fourth quarter net income earnings were $1.1 billion, up from $51 million in the 4Q 2010. Full year net income was $6.7 billion up from 2.7 billion in 2010.
MetLife reported 4Q operating earnings of $1.4 billion, up 17% from 4Q 2010. Full year operating earnings of $5.4 billion were up 40% from 2010. Premiums, fees and other revenue sources totaled $45.7 billion for the full year 2011 up 32% over 2010 while total assets of $800 billion were up 9% compared to year end 2010.
MetLife’s business in the U.S. looked positive, spurred by strong underwriting results in group life as well as measured progression in non-medical health underwriting, most notably in the dental business. Retirement products and corporate benefit funding also helped drive revenues with premiums and fees totaling $7.6 billion, up 7%. U.S. business operating earnings of $932 million were up 4%. Upon review of deferred policy acquisition (DAC) costs, there was a $27 million after tax increase in U.S. business operations.
U.S. retirement products, which include annuity products, were at $216 million, down 5%. MetLife feels the decline can be attributed to the negative impact of DAC as well as a lower variable investment income. However, when compared with the 4Q 2010 and the third quarter 2011, total annuity sales increased 41% and declined 15% respectively.
On the heels of MetLife’s acquisition on Alico, which was announced in November of 2010, international operating earnings of $570 million were up 89%. Total international sales were up 12% when compared with MetLife and Alico fourth quarter 2010 results. Japan was a bright spot in the international spectrum with tenacity in selling accident and health insurance reaping rewards. Operating earnings in Japan were up 3% over the third quarter of 2011 at 326 million. Alico’s financial results were prior to November 2010 are not reflected in the statements given by MetLife.
Other international regions had operating results of $244 million, up 17%. Premiums, fees and various other revenues expanded to $2.0 billion. The increases were mostly attributed to the Alico acquisition and they were in some measure offset by the negative impact of foreign currency exchange rates. Premium increases in Mexico, Chile and Argentina propelled growth in Latin America. Eastern Europe and the Middle East also had a strong performance.
In November 2011, MetLife announced that it was going to break up its international business into three distinct regions: The Americas, EMEA (Europe, the Middle East and Africa) and Asia. Financial results under the new organization will begin in the first quarter of 2012.
Steven A. Kandarian, chairman, president, and chief executive officer said, “MetLife had a solid year and a strong fourth quarter, even in the face of some significant market pressures.”
MetLife lost more than $1 billion in the final quarter of 2010 on derivatives, in the most recent quarter it reported $351 million in derivate net gains. The company said those gains resulted from lower interest rates and from a variable annuity hedging program. MetLife’s total investment revenue grew 11 percent to $4.94 billion.