VALUATION HIGHLIGHTS

1. U.S. Segment constitutes 40% of the Trefis price estimate for MetLife's stock.
2. Asia Segment constitutes 26% of the Trefis price estimate for MetLife's stock.
3. Metlife Holdings & Corporate constitutes 16% of the Trefis price estimate for MetLife's stock.

WHAT HAS CHANGED?

Latest Earnings

In Q3 2023, MetLife reported Total Revenues of $15.9 billion, which is 29% less than the year-ago figure. This was mainly due to a 35% drop in the total premiums, followed by an increase in net derivative losses from -$226 million to -$1.2 billion.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are the key drivers of MetLife with the potential upside or downside to the Travelers stock price.

• MetLife's Premiums From Asia MetLife's premiums from the international market increased substantially over the last few years, from $1.7 billion in 2010 to $5.57 billion in 2022. The company is expanding aggressively in high-growth markets in Asia. We expect MetLife to grow its premiums from the region to about $7.2 billion by the end of the Trefis forecast period. There is a 4% upside to the Trefis price estimate if MetLife's premiums from Asia reach $9 billion by the end of the Trefis forecast period.
• MetLife's Premiums From The U.S. MetLife has a market share of more than 11% in the group life insurance market. The growth in employment over the last couple of years has added a growth of 3-5% in group insurance premiums. Furthermore, we expect big things from the company's PRT business. PRT is growing at an impressive rate, and we anticipate the company to reap benefits from that. Moreover, increases in average premiums per policy in auto and homeowners policies should boost the P&C business. We expect MetLife to grow its premiums from the region to about $33.6 billion by the end of Trefis forecast period. There is a 8% upside to the Trefis price estimate if MetLife's premiums from Asia reach $43.9 billion by the end of Trefis forecast period.

BUSINESS SUMMARY

MetLife is a leading provider of insurance, employee benefits, and financial services with operations throughout the United States and Latin America, Asia Pacific and Europe, the Middle East, and India. MetLife offers life insurance, non-medical health insurance (disability, long-term care, dental), retirement products (fixed/variable annuities), property and casualty insurance (auto, home insurance), retail banking, and other financial services to individuals, groups, and institutions.

SOURCES OF VALUE

MetLife's international insurance business is the company's main source of value. This is due to the significance of the market, which we estimate will approach $20.6 billion by 2024. The acquisition of ALICO from AIG in 2010 allowed the company to expand into key markets in Asia and the Middle East.In the U.S., MetLife's most valuable business is collecting premiums and fees from its customers worldwide. The company invests insurance premiums collected across all its insurance products in assets such as bonds, equities, and mortgages. MetLife is the biggest life insurer in the U.S., with a market share of more than 11%.The company primarily invests in fixed-maturity securities like government and corporate bonds. Nearly 75% of the assets are invested in such securities. The company should, hence, benefit from a higher interest-rate environment.

KEY TRENDS

Modest Growth in Life and Health Insurance Market

Growth in the life and health insurance business continues to be impacted by the current macroeconomic conditions. However, the recovering job market is driving growth in the market.