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MetLife Beats Analyst Expectations on Strong Premiums, Fees

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Max Reyes
·1 min read
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  • MET-PE

(Bloomberg) -- MetLife Inc., the biggest U.S. life insurer, reported earnings results that beat analyst estimates with premiums and fees strong even as the rate environment weighed on investing profitability.

Most Read from Bloomberg

  • Adjusted second-quarter earnings of $2 a share exceeded the $1.45 average estimate of 16 analysts surveyed by Bloomberg. Profit was $2.37 per share a year ago.

Key Insights

  • Net income dropped 97% to $103 million, with losses tied to derivatives and investments driving the decline. The company also booked gains from the sale of its property and casualty business in the prior-year quarter.

  • Higher pension risk-transfer sales helped drive premiums, fees and other revenues up 23% from a year earlier to $13.9 billion.

  • Net investment income fell 32% to $3.58 billion as private equity returns weakened.

  • Net derivative losses were $1.2 billion, primarily resulting from rising long-term interest rates and the stronger dollar. The company uses derivatives to hedge risks.

  • “MetLife reported strong financial results in the second quarter despite a challenging environment,” Chief Executive Officer Michel Khalaf said in the statement. “Underlying business performance remains robust, supported by solid capitalization and ample liquidity.”

  • Covid-19 life insurance claims declined in the group benefits business, which reported adjusted earnings of $400 million. The company’s Latin America unit also saw a decline in claims linked to the pandemic.

Get More

  • MetLife’s statement is here.

(Updates with hedging strategy in the fourth bullet of ‘key insights.’ A previous version of this story was corrected to say gains from a sale were a year ago.)

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©2022 Bloomberg L.P.

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