Insurance Journal  Aug 6  Comment 
Blend Labs Inc., a startup that first became known by helping big banks make it easier for homebuyers to get a mortgage online, is branching out into a new industry: insurance. The San Francisco-based company is launching Blend Insurance Agency. …
Motley Fool  Aug 2  Comment 
MET earnings call for the period ending June 30, 2018.
Yahoo  Aug 1  Comment 
The New York-based company said it had net income of 83 cents per share. Earnings, adjusted for non-recurring costs, came to $1.30 per share. The results surpassed Wall Street expectations. The average ...
The Hindu Business Line  Jul 28  Comment 
PNB Metlife India Insurance Co.( PNB MetLife) has filed a draft red herring prospectus (DRHP) with market regulator SEBI for an initial public offeri
The Economic Times  Jul 28  Comment 
The Economic Times  Jul 27  Comment 
​The offer is of up to 49,58,98,076 shares of face value of Rs 10 each by way of an offer for sale.
The Economic Times  Jul 19  Comment 
PSU bank will also buy stake in financial technology firm CapitaWorld along with other lenders.
The Economic Times  Jun 26  Comment 
Back to business at hand, Das is judiciously drafting the digital roadmap of PNB Metlife and architecting the private life insurer’s systems to solve specific business problems.


MetLife (NYSE: MET) is one of the largest insurance and financial services companies in the U.S; the company collected $26.5 billion in premiums for 2009.[1] It has a very diverse range of products and services, including many different kinds of insurance, savings plans, and retirement plans.

MetLife's main source of revenue comes from insurance premiums. The company takes the money paid by those who buy insurance policies and invests it in a number of different ways. If the return on investment (the "spread") plus the premiums is greater than the payout to policy holders, the company profits. This business model while common in the insurance industry is especially vulnerable to natural disasters and swings in the equity markets. The former in form of hurricanes, earthquakes and forest fires, can result in hundreds of millions to billions of dollars in losses in a single year. The company paid out $333 million in homeowners insurance in 2006 related to Hurricane Katrina. A poorly preforming market on the other hand can result in a loss of investment income which is often a crucial component of profitability.

Over the past several years, MetLife has focused on organic growth and cost reduction. While it has experienced some success in this area its expenses still continue to be high compared to those of the insurance industry.

Corporate Overview

The Metropolitan Life Insurance Company, MetLife, began in 1863 to insure "life and limb" with only $100,000. It has since expanded to a multi-billion dollar diverse financial institution. MetLife provides insurance and financial services for individuals and institutions throughout the US, and is currently pursuing international opportunities. Services include life, auto and home insurance, annuities, and retirement and savings planning.

Business Financials

In 2009, MET earned a total of $41 billion in total revenues.[1] This was a decline from its 2008 total revenues of $dsdsds51 billion. This had a negative impact on MET's net income. Between 2008 and 2009, MET's net income went from a net profit of $3.3 billion in 2008 to a net loss of $2.3 billion in 2009.

Business Segments

Metlife breaks its operations into four segments.

Institutional Insurance

Insurance sold to businesses as group plans makes up about half of MetLife's revenue. This category includes group life insurance, retirement plans, and savings services sold to third parties, rather than directly to the customer. Insurance in this category generates less revenue per unit than individual insurance, but each plan has multiple units leading to greater overall revenue. This portion of MetLife's business has remained relatively stable over the past few years.

Individual Insurance

This is MetLife's retail department. The company sells individual life insurance plans and annuities directly to the end consumer. Although second in terms of revenue generated, this business is number one in terms of net income. It is MetLife's most profitable business. For more discussion of what might effect sales of individual policies, see the Trends and Forces section.

Auto and Home Insurance

Although this is a smaller portion of MetLife's business, auto and home insurance are still significant to the company's profits. Plans are bought by the individual consumer, like individual insurance, but for homes and cars. A booming economy with higher sales of new cars and homes, as well as state laws mandating auto or home insurance increase revenues in this category.

International Services

MetLife has a large operation in Mexico and several businesses in Korea and Japan selling financial services. MetLife also recently acquired Travelers Life & Annuity (mid-2005) which helped to open up channels for sales in Europe. As part of its plan for further international expansion the company is targeting developing economies such as China. Typically it will "seed" these countries by offering a few services on a small scale. Based on the outcome MetLife will than make a decision to expand its service offering or shut down its operations in that country.

Trends and Forces

Diversification & Scale Economies

Due to shifting demand and inherent risk in insuring and investment, diversification is essential to provide a "buffer" for market shocks. If each business area accounts for only a small portion of a company's revenue, the effects of fluctuations will be minimized. MetLife has a very diversified mix of businesses that are[spread-based, protection-based, and fee-based. This means that it is collecting revenues through different types of plans. MetLife's subsidiaries focus on institutional businesses, retail customers, as well as global interests.

In addition to diversification of products, economies of scale are essential to success in the insurance industry by providing a large number of services companies like MetLife can spread the fixed costs of running a business, such as technology, advertising, compliance, over multiple streams of revenue.MetLife is similar in theory to a conglomerate of many small businesses which have merged in order to share an office. Each additional customer or business is less of a proportional risk, and thus expansion of MetLife's business incurs little incremental cost.

Recognition and Brand Loyalty

Insurance and financial companies can easily be perceived as cold and uncompassionate; Over the years, movies and news stories, about insurance companies' attempts to defraud their customers have only strengthened this portrayal. MetLife has tried to combat this image with an innovative marketing campaign involving Snoopy and the MetLife Blimp. MetLife uses characters from the Peanuts cartoon strip in many of its advertisements, creating brand recognition that is associated with warmth. In addition, the company leases two blimps, Snoopy One and Two, which fly around the country to different events throughout the year. This combination of tactics creates name recognition and urges consumers to consider managing uncertainties today rather than waiting until problems arise. Brand recognition is very important, as there can often be little else to distinguish financial service companies, and so MetLife's friendly advertising campaign is definitely an innovative way to build recognition and then loyalty.

Market Pressures

  • Aging US Population: Over the next decade, aging baby boomers are expected to create robust demand for various insurance and wealth accumulation products. Increased longevity means that that this group will need to generate enough wealth to last decades into retirement. As a top insurance company with strong brand recognition and a diversified portfolio of products, MetLife is very well positioned to take advantage of this demographic shift.
  • Hurricanes: Natural disasters such as hurricanes can severely impact the profitability of insurance companies. One of the basic premises of insurance is that in most cases an insurance company will not have to pay out most of its policies at once. For instance if an insurance company insures 100,000 people in New Jersey, the expectation is that while there may be some claims each year, the company and most people will be fine. This means that insurance companies are able to not only continue receiving premiums over time, but are able to invest these premiums. Hurricane Katrina resulted in over $333MM in home insurance policy payouts in 2006. There were also smaller but still significant payouts on auto insurance policies.

I do agree with all of the ideas you have introduced to your post. They're relaly convincing and can definitely work. Still, the posts are very brief for starters. May just you please prolong them a bit from subsequent time? Thanks for the post.

Comparison to Competitors

In the insurance industry there are three main determinants of profitability: premiums collected, investment performance, and losses incurred. Increasing the amount of premiums collected equals higher revenue. This revenue can then be invested, hopefully at a profit. Each year the company has to pay claims against the premiums that it has collected. The fewer payouts a firm has in a given year, the more money remains for investment. Ironically, in some years the payouts are greater than premiums received, and the firm has to rely on its investments for profitability.

Some of MetLife's top competitors are Allstate, Progressive, and Liberty Mutual.


  1. 1.0 1.1 MET 10-K 2009 Item 6 Pg. 61
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki