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http://www.metlife.com/
MetLife reports quarterly net loss; shares slip in late actionRelated
stories
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Story Quotes Comments Screener (5) Alert Email Print ShareBy Alistair
Barr, MarketWatch
SAN FRANCISCO (MarketWatch) -- MetLife Inc. reported a $650 million
quarterly net loss late Thursday as the insurance and annuities giant
recorded the impact of an improvement in its creditworthiness.
On an operating basis, which excludes net realized investment gains
and losses, MetLife /quotes/comstock/13*!met/quotes/nls/met (MET
33.46, +0.24, +0.72%) met earnings expectations.
MetLife shares slipped 2% to $36.10 during after-hours trading. During
regular action on Thursday, the stock had closed up almost 8%.
Hot Stocks: Mortgage, Life Insurers ClimbShares of mortgage and life
insurers jump, with shares of Genworth Financial and optimism about
the extension of the home-buyer tax credit driving financial-sector
gains. MarketWatch's Greg Morcroft reports in New York.
MetLife reported a third-quarter net loss of $650 million, or 79 cents
a share, versus net income of $600 million, or 83 cents a share, a
year earlier.
The latest result reflected net realized investment losses of $1.4
billion, which were partly due to an improvement in MetLife's credit
spread during the quarter.
MetLife said operating earnings, which exclude net realized investment
gains and losses, came in at $718 million, or 87 cents a share.
MetLife was expected to make 87 cents a share, according to the
average estimate of 19 analyst surveyed by Thomson Reuters.
MetLife sells life insurance policies and invests the premiums it
collects in fixed-income and equity markets. The company also offers
retirement and savings products that are tied to the stock market,
such as variable annuities. That makes the company's results sensitive
to the ups and downs of the market.
When the financial crisis hit last year, MetLife suffered some big
investment losses, but the company was among the first insurers that
was able to raise capital by selling new shares. That gave it an
advantage over some rivals, which had been hit by bigger losses and
were struggling to raise new capital.
However, some of that advantage has ebbed in recent months as markets
rebounded and rivals also raised capital. Indeed, life insurance
analysts at Keefe, Bruyette & Woods downgraded MetLife shares earlier
this month arguing the company no longer had unique financial strength
and unique access to capital markets.
MetLife's third-quarter net loss was driven by $1.4 billion in
realized investment losses. Roughly $582 million of that came from an
improvement in the perceived creditworthiness of the insurer.
The creditworthiness of MetLife dictates how the insurer values some
of its liabilities, such as guarantees on variable annuities it has
sold.
When the cost of protection against a MetLife default increases in the
derivatives market, as it did in the midst of the financial crisis,
the insurer's perceived creditworthiness falls. That makes some of
MetLife's liabilities worth less. For example, if the insurer is
deemed to be less capable of standing by its variable annuity
guarantees, the value of those liabilities falls. That results in a
derivatives gain.
When the cost of protecting against a MetLife default falls, the
opposite happens, producing a derivatives loss.
The non-derivative investment losses realized by MetLife during the
third quarter came from "credit-related losses and impairments across
a broad range of asset classes," the insurer said. It didn't provide
more details, but added that the losses were expected.
Insurers also report losses on investments that haven't been realized,
mainly because the holdings haven't been sold. MetLife said late
Thursday that net unrealized losses on fixed maturities dropped to
$1.4 billion at the end of September from $13.9 billion at the end of
June.
That big decline was driven by improved credit spreads and lower
interest rates, MetLife noted. MetLife's book value per share jumped
27% during the quarter to $38.95.
Premiums, fees and other revenues came in at $8.46 billion during the
third quarter, MetLife reported. That was down 1% versus a year ago,
but up slightly from the second quarter.
"Our businesses are performing well, as evidenced by increased sales
in a number of product areas in both the U.S. and internationally,"
MetLife Chief Executive C. Robert Henrikson said in a statement.
MetLife collected $4 billion of annuity deposits in the U.S. during
the third quarter. Variable annuity deposits were "strong," while
fixed annuity deposits were up 19% versus the same period a year ago.
------------------------------------------------------------------------------------
Published online May 1, 2009
insurance
MetLife suffers first loss in eight years
Profit down 22% at Warwick-based auto, home insurance unit
By PBN Staff
COURTESY WIKIMEDIAMETLIFE SWUNG TO A LOSS of $544 million in the first
quarter compared with a profit of $648 million in the same period last
year.
NEW YORK – MetLife Inc., the largest life insurer in the U.S. and a
major Rhode Island employer, suffered its first quarterly loss since
2001 during the first three months of this year due to writedowns and
falling investment returns.
MetLife (NYSE: MET) posted a net loss of $544 million, or 71 cents a
share, in the quarter ended March 31, down from a profit of $648
million, or 84 cents a share, in the same quarter a year earlier. The
company’s revenue fell 12 percent to $10.22 billion, as income from
premiums slipped 2.7 percent to $6.12 billion.
The insurer said it paid out $6.6 billion to policyholders and
claimants in the first quarter, nearly unchanged from last year.
MetLife said it had operating earnings of 20 cents a share when some
investment results are excluded, down from $1.46 a share a year ago
and missing by nearly 40 percent analysts’ average earnings forecast
of 33 cents a share, Bloomberg News reported.
C. Robert Henrikson, MetLife’s chairman, president and CEO, described
it as “a solid result in what continued to be a challenging economic
environment.” For good news, he pointed to increased revenue in the
insurer’s U.S. annuity and international businesses.
MetLife’s results came on the same day that the insurer Hartford
Financial Group posted its third quarterly loss in a row.
Profit was sharply lower at MetLife’s Warwick-based car and
homeowners’ insurance division, where first-quarter net income fell 22
percent to $76 million, compared with $98 million a year ago. The
division’s net written premiums declined 2 percent to $699 million.
Its expense ratio improved to 26 percent, MetLife said.
MetLife is one of 19 financial institutions that have undergone the
U.S. Treasury Department’s stress tests, the results of which are
expected to be released early next week.
MetLife has said it does not need government money from the Troubled
Asset Relief Program (TARP), and Henrikson emphasized that “MetLife
has a strong excess capital position, diversified investment portfolio
and ample liquidity, and we remain well positioned for the future.”
On a conference call this morning, Bloomberg said, Henrikson declared:
“I don’t spend any time thinking about TARP.”
MetLife Inc. (NYSE: MET) – the nation’s largest life insurer based on
policies in force – is a provider of insurance and financial services
to more than 70 million customers in the United States, Latin America,
Europe and the Asia-Pacific region. Its Rhode Island-based MetLife
Home & Auto division employs more than 2,000 people at its offices in
Warwick. Additional information is available at MetLife.com. |
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