How Much Did Metlife’s Investment Yields Fall In Q1 2016?

+6.18%
Upside
74.11
Market
78.69
Trefis
MET: MetLife logo
MET
MetLife

MetLife (NYSE:MET) announced disappointing first quarter results, with low interest rates pressuring the company’s total revenues and operating profit. In Q1 2016, total operating revenues fell 2.5% year-over-year (y-o-y) to $16.6 billion and operating earnings declined 19% to $1.3 billion. The company attributed this decline in operating earnings to the sharp fall in its Net Investment Income, down 5.5% y-o-y to $4.7 billion.

MetLife’s net investment income yields improved from 4.74% in Q1 2015 to 4.93% in Q2 2015 but declined to 4.52% in Q4 2015 and 4.39% in Q1 2016. The yield on fixed maturity securities, which account for most of MetLife’s investments, dropped from 4.64% in Q1 2015 and 4.55% in Q4 2015 to 4.43% in Q1 2016 as a consequence of the persistent low interest rate environment.

Fixed maturity securities and mortgage loans contributed almost 98% of Metlife’s net investment income in Q1 2016. The company’s other investments include mortgage loans, real estate and real estate joint ventures, policy loans, equity securities, cash and short-term investments.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Metlife
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