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MetLife Beats Analyst Expectations on Strong Premiums, Fees

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(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.

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  • 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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