MetLife 2016 In Review: Investment Income In Focus

MetLife (NYSE:MET) announced mixed financial results in 2016. Despite single-digit growth in premiums earned, the company’s revenues declined 3% to $51.4 billion and operating earnings declined 11% to $3.7 billion in the first three quarters of 2016. MetLife’s net income tumbled 35% to $2.9 billion in the same period on a goodwill impairment charge of $223 million (after tax) in Q3 2016 related to the spin-off of Brighthouse Financial and net derivative losses reflecting changes in interest rates, equity markets and foreign currencies. The company’s net investment income declined about 2% year over year to $14.8 billion in the first nine months of 2016.

MetLife’s net investment income yields declined from 4.76% in the first three quarters of 2015 to 4.51% in the same period of 2016. The yield on fixed maturity securities, which account for most of MetLife’s investments, dropped from 4.66% in the nine month period ended September 2015 to 4.40% in the nine month period ended September 2016 as a consequence of the persistent low interest rate environment.

Fixed maturity securities and mortgage loans contributed almost 90% of MetLife’s net investment income in the first three quarters of 2016, up from 87% in 2015. The company’s other investments include mortgage loans, real estate and real estate joint ventures, policy loans, equity securities, cash and short-term investments.
See our complete analysis for MetLife here.

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