Of the major U.S. life insurance companies, MetLife (MET) has the broadest reach of international business. This focus on global business allows MetLife to sustain a pattern of steady growth despite the recent deep recession.
In the United States, MetLife offers a range of financial products, including individual and group life insurance, retirement plan products, corporate benefit products and home and auto insurance. The company generates about 60 percent of operating earnings domestically.
International business is focused on life and accident insurance, retirement products and group insurance. Japan accounts for about 20 percent of total operating earnings and the rest of MetLife's international business the remaining 20 percent. The company is the largest life insurance provider in Latin America.
For the fourth quarter, MetLife reported operating revenue of $1.4 billion, up 17 percent from a year earlier. Full year operating earnings came to $5.4 billion, up 40 percent.
Earnings per share based on operating results were $1.31 per share for the quarter and $5.02 for the year. Investors track operating earnings for life insurance companies since total earnings can fluctuate significantly on gains and losses in an insurer’s large investment portfolio.
In early 2010, MetLife purchased the foreign life insurance business ALICO from American International Group (AIG) for $15.5 billion.
ALICO is a major player in the Japanese insurance market and increased MetLife's exposure in more than 40 other countries. The purchase came as AIG was forced to sell off some of its better assets to raise cash to pay back government bailout loans.
MetLife management forecasts earnings growth of 4 percent per year if interest rates on Treasury securities remain at the current low levels. If rates increase, earnings growth could expand to as much as 8 percent per year.
A dividend is paid annually in November. The 74 cents distribution has been in effect since 2008.
Recently, Steven Schwartz, an analyst at Raymond James, lowered his rating on MetLife to market perform from strong buy. The reason for the downgrade, however, was a sharp, short-term increase in share value.
The company next reports in mid-May.
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