METLIFE INC Quarterly Report for Q1 Ended Mar 31, 2009

Summary

MetLife Inc. reported a net loss attributable to common shareholders of $(574) million, or $(0.71) per diluted share, for the first quarter of 2009, a significant decline from the $(544) million net loss attributable to MetLife, Inc. in the prior year period. This was primarily driven by a substantial decrease in net investment income, which fell 24% to $3,263 million, largely due to lower yields across various investment categories and a higher allocation to cash and short-term investments due to market uncertainty. Other expenses also increased by 18% to $3,002 million, driven by higher DAC amortization, increased pension costs, and restructuring charges, although some segments saw expense reductions. Despite these challenges, the company maintained strong liquidity with $21.3 billion in cash, cash equivalents, and short-term investments, and initiated strategic actions such as the sale of its Texas Life Insurance Company subsidiary, generating a $32 million gain. The company's operations were significantly impacted by the prevailing economic crisis, leading to increased investment losses, particularly in fixed maturity securities, equity securities, and limited partnerships, exacerbated by a widening of credit spreads and reduced market liquidity. While the company has hedged a substantial portion of its exposure to equity market and interest rate risks related to its guaranteed annuity products, the overall financial market volatility continued to pressure investment income and valuations. MetLife's capital position remained robust, with statutory surplus exceeding regulatory requirements, and the company indicated no immediate plans to raise additional capital, although credit ratings outlooks were negative.

Key Highlights

• 1MetLife reported a net loss of $(574) million for Q1 2009, a significant decrease from a net income of $615 million in Q1 2008, primarily due to lower net investment income and increased other expenses.
• 2Net investment income decreased by 24% to $3,263 million, largely driven by lower yields across various asset classes and an increased allocation to cash and short-term investments due to market volatility.
• 3Other expenses increased by 18% to $3,007 million, influenced by higher DAC amortization, increased pension costs, and restructuring charges.
• 4The company's total revenues declined by 12% to $10,216 million, impacted by lower premiums and fees, particularly in the Institutional and International segments.
• 5MetLife maintained a strong liquidity position with $21.3 billion in cash, cash equivalents, and short-term investments as of March 31, 2009, reflecting a strategic decision to hold higher liquidity due to market distress.
• 6The company completed the sale of Texas Life Insurance Company for $134 million, resulting in a $32 million gain on disposal.
• 7Significant unrealized losses were present in the investment portfolio, particularly in fixed maturity securities, with total unrealized losses of $(13,469) million attributable to MetLife, Inc. at March 31, 2009.

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