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MetLife beats analysts’ estimates as profit advances in Asia

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(Bloomberg) – MetLife Inc., the largest U.S. life insurer, posted profit that exceeded analysts’ estimates as results improved in Asia, fueled by growth in Japan and sales of accident-and-health coverage.

Net income slipped 18 percent to $1.12 billion from $1.37 billion a year earlier on losses tied to derivatives, New York- based MetLife said in a statement Wednesday. Operating profit, which excludes some investment results, was $1.56 a share, compared with the $1.49 average in a Bloomberg survey of 18 analysts.

MetLife has sought to boost sales in segments such as disability, dental and accident-and-health insurance after scaling back on retirement products such as variable annuities to reduce risks tied to financial markets. The company expanded in Asia with the 2010 purchase of American Life Insurance Co.

“The Japanese market is a good market,” Steven Schwartz, an analyst at Raymond James & Associates Inc., said in a phone interview before results were announced. “It gets a little bit more competitive every year but it’s a reasonable market, a very, very large market,”

MetLife rose 1.7 percent to $57.22 as of 4:05 p.m. in New York, extending its gain for the year to 5.8 percent. That compares with the 5.5 percent increase of the 21-company Standard & Poor’s 500 Insurance Industry Index. Results were released after the close of regular trading.

Japan Taxes

Book value, a measure of assets minus liabilities, fell to $60.27 per share from $64.37 at the end of the first quarter. Insurers including Hartford Financial Services Group Inc. and Aflac Inc. have reported that their bond portfolios lost value in the period as interest rates climbed.

In the Asia region, led by Christopher Townsend, profit climbed 31 percent to $425 million, which included a $61 million gain tied to Japan taxes.

Operating earnings for the Americas division, MetLife’s largest, rose 4.2 percent to $1.44 billion. At the region’s retail unit, operating income rose 1.9 percent to $690 million, while the segment selling workplace coverage reported $231 million, an increase of 11 percent. Latin America contributed $116 million, down 15 percent.

William Wheeler announced in April that he would retire in August as head of the Americas to “pursue other interests.”

The government cited MetLife’s holdings of less liquid securities and reliance on derivatives when it designated the firm as a systemically important financial institution, a title that the insurer has sought to overturn through a lawsuit. MetLife along with American International Group Inc., Prudential Financial Inc. and General Electric Co.’s finance arm are the four non-banks designated as SIFIs, which would make them subject to additional oversight.

Prudential, the second-largest U.S. life insurer, will report earnings on Aug. 5. The Newark, New Jersey-based company’s shares slipped about 1 percent this year.