METLIFE INC – 10-Q – Management’s Discussion and Analysis of Financial Position and Results of Operations
Index to the management report and analysis of the financial situation and results
Page Forward-Looking Statements and Other Financial Information 87 Executive Summary 87 Industry Trends 91 Summary of Critical Accounting Estimates 93
Economic Capital94 Acquisitions and Dispositions 95 Results of Operations 96 Investments 123 Derivatives 137 Off-Balance Sheet Arrangements 139 Policyholder Liabilities 140 Liquidity and Capital Resources 147 Adoption of New Accounting Pronouncements 156 Future Adoption of New Accounting Pronouncements 157 Non-GAAP and Other Financial Disclosures 157 86
-------------------------------------------------------------------------------- Table of Contents Forward-Looking Statements and Other Financial Information For purposes of this discussion, "
MetLife," the "Company," "we," "our" and "us" refer to MetLife, Inc., a Delawarecorporation incorporated in 1999, its subsidiaries and affiliates. This discussion should be read in conjunction with MetLife, Inc.'sAnnual Report on Form 10-K for the year ended December 31, 2020(the "2020 Annual Report"), the cautionary language regarding forward-looking statements included below, the "Risk Factors" set forth in Part II, Item 1A, and the additional risk factors referred to therein, "Quantitative and Qualitative Disclosures About Market Risk" and the Company's interim condensed consolidated financial statements included elsewhere herein. This Management's Discussion and Analysis of Financial Condition and Results of Operations may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See "Note Regarding Forward-Looking Statements" for cautionary language regarding forward-looking statements. This Management's Discussion and Analysis of Financial Condition and Results of Operations includes references to our performance measures, adjusted earnings and adjusted earnings available to common shareholders, that are not based on accounting principles generally accepted in the United States of America("GAAP"). See "- Non-GAAP and Other Financial Disclosures" for definitions and a discussion of these and other financial measures, and "- Results of Operations" and "- Investments" for reconciliations of historical non-GAAP financial measures to the most directly comparable GAAP measures. Executive Summary Overview MetLifeis one of the world's leading financial services companies, providing insurance, annuities, employee benefits and asset management. MetLifeis organized into five segments: U.S.; Asia; Latin America; Europe, the Middle Eastand Africa("EMEA"); and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other. See Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for further information on the Company's segments and Corporate & Other. COVID-19 Pandemic We continue to closely monitor developments relating to the novel coronavirus COVID-19 pandemic (the "COVID-19 Pandemic") and assess its impact on our business. The COVID-19 Pandemic continues to impact the global economy and financial markets and has caused volatility in the global equity, credit and real estate markets. See "- Industry Trends - Financial and Economic Environment." We have implemented risk management and business continuity plans and taken preventive measures and other precautions, such as employee business travel restrictions and remote work arrangements which, to date, have enabled us to maintain our critical business processes, customer service levels, relationships with key vendors, financial reporting systems, internal controls over financial reporting and disclosure controls and procedures. We continue to grant certain accommodations to our customers and borrowers, including (i) relaxing claim documentation requirements for disability claims and (ii) payment deferrals and other loan modifications on certain commercial, agricultural and residential mortgage loans. See Note 6 of the Notes to the Interim Condensed Consolidated Financial Statements for further information regarding COVID-19 Pandemic-related mortgage loan concessions. See also "- Results of Operations - Segment Results and Corporate & Other" for further information regarding the effect of the COVID-19 Pandemic on our businesses. Current Period Highlights During the three months ended September 30, 2021, adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased compared to the prior period driven by the disposition of MetLife Property and Casualty Insurance Companyand certain of its wholly-owned subsidiaries (collectively, " MetLifeP&C"). Growth in our Group Benefits business in our U.S.segment was driven by the acquisition of Versant Health, Inc.(" Versant Health"). Strong returns in our private equity portfolio resulted in improved investment yields and changes in key equity indexes and long-term interest rates drove a favorable change in net derivative gains (losses). In addition, results in both periods included a charge due to the impact of our annual actuarial assumption review. Underwriting experience was unfavorable and reflected impacts from the COVID-19 Pandemic. 87
The following represents segment level results and percentage contributions to
total segment-adjusted profit available to common shareholders for the
three months ended
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(1) Excludes adjusted loss of head office and others available to common shareholders of
(2) In accordance with GAAP guidelines for segment reporting, adjusted profit is our
GAAP measure of sector performance. For more information, see note 2 of
the notes to the condensed consolidated interim financial statements.