MetLife, Inc. reported results for the first quarter of 2014.
MetLife reported operating earnings of $1.6 billion , down 4 percent over the first quarter of 2013. On a per share basis, operating earnings were $1.37 , down 7 percent over the prior year quarter. Operating earnings in the Americas grew 3 percent. Operating earnings in Asia decreased 2 percent on a reported basis but increased 8 percent on a constant currency basis. Operating earnings in Europe, the Middle East and Africa (EMEA) increased 1 percent on a reported basis and 2 percent on a constant currency basis. Offsetting these results were larger losses in Corporate & Other.
In a release on April 30 , the Company noted that first quarter 2014 operating earnings included the following items:
-variable investment income above the company's 2014 quarterly plan range by $63 million , or $0.06 per share, after tax and the impact of deferred policy acquisition costs (DAC)
-previously announced New York legal settlement costs, which reduced operating earnings by $57 million or $0.05 per share, after tax
Premiums, fees & other revenues were $12 billion , up 2 percent (5 percent on a constant currency basis) over the first quarter of 2013.
Book value, excluding accumulated other comprehensive income (AOCI), was $49.34 per share, up from $47.37 in the first quarter of 2013.
" MetLife had a solid quarter," said Steven A. Kandarian, chairman, president and chief executive officer of MetLife, Inc. "While our legal settlement with New York had an impact on earnings, strong investment income and significant cost savings helped the bottom line. MetLife's commitment to enhancing long-term shareholder value was demonstrated by the recently announced 27 percent increase in our common stock dividend."
BUSINESS DISCUSSIONS
All comparisons of the results for the first quarter 2014 in the business discussions that follow are with the first quarter of 2013, unless otherwise noted. All comparisons on a constant currency basis are calculated using the average foreign currency exchange rates for the current period and are applied to the prior period.
THE AMERICAS
Total operating earnings for the Americas were $1.3 billion , up 3 percent, driven by Corporate Benefit Funding and Latin America. Premiums, fees & other revenues were $8.9 billion , up 4 percent, and excluding pension closeouts, up 5 percent.
Retail
Operating earnings for Retail were $612 million , down 2 percent primarily due to lower underwriting results. Premiums, fees & other revenues were $3.2 billion , up 9 percent due to higher fixed income annuity sales and variable annuity fee growth.
Group, Voluntary & Worksite Benefits
Operating earnings for Group, Voluntary & Worksite Benefits were $188 million , down 18 percent with lower group life, disability and property and casualty underwriting results, partially offset by higher dental, long term care and other health results. Premiums, fees & other revenues were $4.3 billion , up 3 percent due to an increase in sales and better persistency.
Corporate Benefit Funding
Operating earnings for Corporate Benefit Funding were $355 million , up 21 percent due to higher interest margins and improved underwriting. Premiums, fees & other revenues were $426 million , down 24 percent due to lower pension closeouts and structured settlements.
Latin America
Operating earnings for Latin America were $183 million , up 28 percent, reflecting the ProVida acquisition, and favorable market and tax impacts. Operating earnings were up 43 percent on a constant currency basis. Premiums, fees & other revenues were $986 million , up 9 percent, and were up 22 percent on a constant currency basis. Total sales for the region increased 19 percent, driven by group medical in Chile and Mexico.
Operating earnings for Asia were $328 million , down 2 percent on a reported basis. Adjusting for changes in foreign currencies, primarily the Japanese Yen, operating earnings were up 8 percent on a constant currency basis. Premiums, fees & other revenues were $2.3 billion , down 6 percent on a reported basis, but up 6 percent on a constant currency basis, due to business growth in Japan, Korea and Australia. Total sales for the region increased 2 percent, with a rebound in Japan retirement sales and growth in China being partially offset by a decline of Yen life sales in Japan.
EMEA
Operating earnings for EMEA were $88 million , up 1 percent on a reported basis, and 2 percent on a constant currency basis. The prior period benefited by $8 million from both a tax-related and a reserve adjustment in Greece. Adjusting for these prior period items, operating earnings were up 12 percent on a constant currency basis. Premiums, fees & other revenues were $722 million , up 5 percent on both a reported and constant currency basis. Total sales for the region increased 4 percent driven by growth in emerging markets of 9 percent led by the Gulf, Turkey and Poland.
INVESTMENTS
Net investment income was unchanged at $5.1 billion . Variable investment income was $429 million ( $274 million , after tax and DAC), compared with $337 million ( $216 million , after tax and DAC) in the first quarter of 2013.
Investment portfolio net gains were $131 million , after tax, compared with net gains of $160 million , after tax, in the first quarter of 2013.
Declines in interest rates, changes in foreign currencies and the impact of MetLife's credit spreads during the quarter contributed to derivative net gains of $78 million , after tax and other adjustments. Derivative net losses in the first quarter of 2013 were $591 million , after tax and other adjustments. Derivative gains or losses related to MetLife's credit spreads do not have an economic impact on the company.
CORPORATE & OTHER
Corporate & Other had an operating loss of $192 million compared with an operating loss of $86 million in the first quarter of 2013, reflecting $57 million in after-tax New York legal settlement costs and lower net investment income.
MetLife, Inc., through its subsidiaries and affiliates ("MetLife"), is a global provider of insurance, annuities and employee benefit programs.
More information: metlife.com
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