Metlife, Inc. · NYSE:MET
Metlife — Insurance Conference (February 2013)
23 slides from Metlife's conference presentation, Feb 14, 2013
Slide 1: Cautionary Statement on Forward Looking Statements and Non-GAAP Financial Information
This presentation may contain or incorporate by reference forward-looking statements. Forward-looking statements give expectations or forecasts of future events and use words such as “anticipate,” “estimate,” “expect,” “project” and other terms of similar meaning. Any or all forward - looking statem
Slide 2: Strong Year in a Challenging Environment
($ in millions, except per share data) 2011 2012 Variance A Strong Year in a Challenging Environment See Appendix for non-GAAP financial information, definitions and/or reconciliations. Operating Earnings $4,677 $5,686 22% Operating Earnings Per Share $4.38 $5.28 21% Premiums, Fees & Other Revenues
Slide 3: Strategy to Become a World-Class Company
Drive Toward Customer Centricity and a Global Brand Grow Emerging Markets Build Global Employee Benefits Business Refocus the U.S. Business Strategy to Become a World-Class Company GLOBAL * WORLD-CLASS * SCALE
Slide 4: Executing on our Strategy
Refocus the U.S. business – VA strategy Grow emerging markets – Provida acquisition Creating shareholder value – Increase operating ROE, lower cost of equity capital (COEC) Executing on our Strategy See Appendix for non-GAAP financial information, definitions and/or reconciliations.
Slide 5: Managing for Another Material Drop in VA Sales
MetLife U.S. Variable Annuity Sales ¹ Managing for Another Material Drop in VA Sales Statutory premiums, direct and assumed, excluding company sponsored internal exchanges. Represents midpoint of the guidance range of $10 to $11 billion. ($ in Billions) $15.3 $13.9 $15.4 $18.3 $28.4 $17.7 $10.5 2013
Slide 6: Further Actions to Improve Annuity Risk/Return Profile
Introduced new guaranteed minimum income benefit (GMIB) variable annuity effective February 4, 2013 – Reduced roll-up rate from 5.0% to 4.0% – Reduced withdrawal rate from range of 4.5%-5.0% to 4.0% Products under consideration would further improve annuity risk profile Competitive landscape has cha
Slide 7: More Favorable Return on Investment for New VA Product
61% 75% Distribution of Potential Return Scenarios 1 More Favorable Return on Investment for New VA Product GMIB MAX IV (5% Rollup) launched on Aug. 20, and GMIB Max V (4% Rollup) launched on Feb. 4, 2013. The pricing results were based on market conditions as of December 31, 2012 . Incidences of RO
Slide 8: Executing on our Strategy
Refocus the U.S. business – VA strategy Grow emerging markets – Provida acquisition Creating shareholder value – Increase operating ROE, lower cost of equity capital (COEC) Executing on our Strategy See Appendix for non-GAAP financial information, definitions and/or reconciliations.
Slide 9: Provida Acquisition a Positive for Shareholder Value
Acquiring AFP Provida for approximately $2 billion in cash, funded with on balance sheet resources Price is approximately 10x forward earnings expectation, expect operating EPS accretion of approximately $0.05 in 2013, $0.15 in Acquisition creates value assuming 75% equity, 25% debt funding mix Free
Slide 10: Provida: A Growth Opportunity in an Attractive Market
Chile Economics of the Pension Business AFP Market Provida: A Growth Opportunity in an Attractive Market Highest rated country in region , government surplus position 5-year projected GDP growth rate of 4.7% Provida ranked #1 (29% market share) in concentrated market Employees required to contribute
Slide 11: Provida Deal Aligns with Strategic Goals
Pre-Tax Expense Savings Grow Emerging Markets to 20%+ of Operating Earnings Shift from Market Sensitive to Protection Products Operating ROE Expansion Provida Deal Aligns with Strategic Goals Based on 5-year projected average PGAAP ROE assuming 75% equity / 25% debt capital structure. See Appendix f
Slide 12: Executing on our Strategy
Refocus the U.S. business – VA strategy Grow emerging markets – Provida acquisition Creating shareholder value – Increase operating ROE, lower cost of equity capital (COEC) Executing on our Strategy See Appendix for non-GAAP financial information, definitions and/or reconciliations.
Slide 13: Expect to Achieve 12% Operating ROE by 2016 Even if Interest Rates Remain Low
Expect to Achieve 12% Operating ROE by 2016 Even if Interest Rates Remain Low 1 Goal is to Expand Operating ROE The bars represent mid-points of ranges. See Appendix for non-GAAP financial information, definitions and/or reconciliations. 12.0% - 14.0% 10.2% - 10.9% 2013P 2016 Target
Slide 14: MetLife Operating ROE Spread to Cost of Equity Capital
MetLife Operating ROE Spread to Cost of Equity Capital Sources: BofA Merrill Lynch and Professor Aswath Damodaran, Stern School of Business (NYU). See Appendix for non-GAAP financial information, definitions and/or reconciliations. -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8%
Slide 15: Working on Both Sides of Value Creation
Working on Both Sides of Value Creation Valuation is a function of both return on equity and cost of equity capital We are committed to increase operating ROE and decrease COEC over time We believe our VA strategy and the Provida acquisition lower COEC and increase operating ROE See Appendix for non
Slide 16: Key Takeaways
Key Takeaways Strong financial performance in 2012 Continue to execute on strategic initiatives despite macro and regulatory uncertainty Improving operating ROE and lowering cost of equity capital should drive shareholder value over time See Appendix for non-GAAP financial information, definitions a
Slide 17: MetLife
MetLife
Slide 18: Appendix
Appendix 2 0 1 3 INSURANCE CONFERENCE
Slide 19: Reconciliations
Reconciliations 2 0 1 3 INSURANCE CONFERENCE
Slide 20: Reconciliation of Operating Earnings Available to Common Shareholders to Income from Continuing Operations
2012 2011 Reconciliation of Operating Earnings Available to Common Shareholders to Income (Loss) from Continuing Operations, Net of Income Tax (In millions, except per share data) Operating earnings available to common shareholders 5,686 $ $ 5.28 4,677 $ $ 4.38 Add: Preferred stock dividends 0.11 0.
Slide 21: Reconciliation of Premiums, Fees & Other Revenues (Operating) to GAAP
2012 2011 Reconciliation of Premiums, Fees & Other Revenues (Operating) to Premiums, Fees & Other Revenues (GAAP) (In millions) Premiums, fees & other revenues (operating) 47,879 $ 45,449 $ Adjustments from premiums, fees & other revenues (operating) to premiums, fees & other revenues (GAAP): Add: P
Slide 22: Reconciliation of Return on Common Equity
2012 2011 Reconciliation of Return on Common Equity Return on MetLife, Inc.'s Common Equity Operating return on MetLife, Inc.'s common equity, excluding AOCI (1) 11.3% 10.1% Operating return on MetLife, Inc.'s common equity (1) 9.6% 9.3% Return on MetLife, Inc.'s common equity, excluding AOCI (2) 2.
Slide 23: MetLife
MetLife