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UPDATE 2-MetLife quarterly profit doubles on derivative gains

By Bharath ManjeshR and Suzanne Barlyn

(Adds details on regional units and new CEO)

By Bharath ManjeshR and Suzanne Barlyn

July 31 (Reuters) - U.S. insurer MetLife Inc on Wednesday reported quarterly profit that doubled from a year ago, boosted by strong derivative gains.

MetLife recorded $724 million in derivative gains in the second quarter, reflecting changes in equity markets and interest rates. In the year-ago quarter, the company had a derivative loss of $59 million.

Premiums and fees dropped 29% to $12.02 billion, from a year earlier when the insurer inked a deal to provide pension benefits for about 41,000 FedEx Corp retirees and beneficiaries through an annuity.

The 2018 deal was the first "jumbo-sized” U.S. transfer of pension obligations to an insurer, measured by premium, since 2013, an analyst said at the time. A comparable deal, which included about $6 billion in pension obligations and the premium generated, did not occur during the 2019 quarter.

MetLife's adjusted earnings were $1.3 billion, the same as the prior year quarter.

Claims fell 33% to about $10 billion.

Adjusted earnings for MetLife's U.S. business were up 9%, spurred partly by lower expenses and favorable underwriting. MetLife's group benefits business largely drove the increase with adjusted earnings of $311 million, rising 19% over the prior year period.

In Latin America, adjusted earnings were up 10%, boosted partly by higher sales in Chile and Mexico.

Adjusted earnings for MetLife's Asia business were down 1%, driven partly by a 12% decline in Japan of annuities tied to foreign currency.

The insurer's Europe, Middle East and Africa business saw a 10% decline in adjusted earnings, after more favorable expense margins in the prior-year period offset favorable underwriting, investment margins and volume growth.

Net investment income rose 5% to $4.69 billion, from a year earlier. Life insurers make money by investing premiums they receive for coverage, hoping to earn more than what they pay in claims.

Net income available to MetLife common shareholders rose to $1.68 billion, or $1.77 per share, in the second quarter ended June 30, from $845 million, or 83 cents per share, a year earlier.

On an adjusted basis, the company earned $1.38 per share.

Analysts on average had expected a quarterly profit of $1.34 per share, according to Refinitiv data. It was not immediately clear if the numbers were comparable.

This is MetLife's first quarter under Chief Executive Officer Michel Khalaf.

Khalaf replaced Steven Kandarian who held the role for eight years and helped the company ride through intense regulatory oversight in the wake of the financial crisis. (Reporting by Bharath ManjeshR in Bengaluru and Suzanne Barlyn in New York; Editing by Cynthia Osterman and Grant McCool)