Metlife, Inc. · NYSE:MET
Metlife — Investor Day (September 2014)
133 slides from Metlife's investor day presentation, Sep 16, 2014
Slide 1: Asia Investor Day 2014
Edward A. Spehar Senior Vice President & Head of Investor Relations September 17, 2014 ASIA INVESTOR DAY 2014
Slide 2: Cautionary Statement on Forward-Looking Statements and Non-GAAP Financial Information
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,” “expe
Slide 3: Agenda
Agenda Update on MetLife & Importance of Asia John C.R. Hele Chief Financial Officer, MetLife, Inc. Asia: Overview Christopher G. Townsend President, Asia Asia: Financial Overview Toby Brown Chief Financial Officer, Asia Asia: Digital Strategy Kathy Awanis Vice President, Direct & e-Business, Asia A
Slide 4: John C.R. Hele
John C.R. Hele Chief Financial Officer MetLife, Inc. September 17, 2014 ASIA INVESTOR DAY 2014
Slide 5: Asia is an Important Business for MetLife
Asia is an Important Business for MetLife 1H14 Operating Earnings1 ($ in millions) Corporate Benefit Funding 20% Retail 36% Asia 18% EMEA 5% Group, Voluntary & Latin America Worksite Benefits 10% 11% Excludes Corporate & Other. See Appendix for non-GAAP financial information, definitions, and/or rec
Slide 6: Asia Top-Line Growth Reflects Yen Weakness
Asia Top-Line Growth Reflects Yen Weakness Operating Premiums, Fees & Other Revenues (PFOs) ($ in millions) CAGR CAGR (Reported) (Constant Currency) $47,323 $48,622 $44,463 $9,861 $9,615 3% 7% Asia $9,095 Rest of $37,462 $39,007 5% 5% MetLife $35,368 2011 2012 2013 See Appendix for non-GAAP financia
Slide 7: Substantial Increase in Asia Operating Earnings
Substantial Increase in Asia Operating Earnings Operating Earnings ($ in millions) CAGR CAGR $6,261 (Reported) (Constant Currency) $5,649 $1,244 19% 26% $4,654 $1,037 Asia $880 $5,017 15% 16% $4,612 Rest of $3,774 2011 2012 2013 See Appendix for non-GAAP financial information, definitions, and/or re
Slide 8: Japan Key Driver of ALICO Achieving Expectations
Japan Key Driver of ALICO Achieving Expectations Cumulative Target Cumulative Results Metrics vs. Expectations (2011-2013) (2011-2013) $2.8B reported Japan $4.0B Operating $3.9B without Earnings accounting change1 Capital Release $1.5B $4.0B ALICO ($1.7B Japan) Investment $0.6B ALICO Losses $1.2B—$1
Slide 9: Long-term Story is More than Japan
Long-term Story is More than Japan High single to low double digit operating earnings growth from Asia over long term Anticipate rapid growth outside Japan over long term Improving cash generation in Japan is key objective See Appendix for non-GAAP financial information, definitions, and/or reconcil
Slide 10: Key Takeaways
Key Takeaways Asia is an important market for Japan results favorable relative to ALICO pricing expectations Continued success in Japan, strong growth from rest of Asia
Slide 11: MetLife
MetLife
Slide 12: Christopher G. Townsend
Christopher G. Townsend President Asia September 17, 2014 ASIA INVESTOR DAY 2014
Slide 13: Current Asia Life Market and Growth Dynamics
Current Asia Life Market and Growth Dynamics Life Insurance Gross Written Premiums ($ in billions) CAGR $1,998 2% $497 $225 7% $1,062 $843 $802 14% $436 Japan $415 $132 Korea China $105 $288 $283 16% India $181 Selected Designated $54 $96 $191 7% Markets1 $88 $110 2013 2016 2024 Selected Designated
Slide 14: MetLife Enterprise and Asia Strategy
MetLife Enterprise and Asia Strategy Secure maximum operating earnings Build Global from Japan and Korea Refocus the U.S. Employee Business Benefits Business Build a value growth platform in China and India beyond 2016 GLOBAL * WORLD-CLASS * SCALE Ensure solid operating earnings contribution from De
Slide 15: Asia: Our Well Balanced Business Dynamics
Asia: Our Well Balanced Business Dynamics Country Product Distribution Channel Korea Life: Accident & 17% Designated Savings Health MetLife Agency Markets 29% 25% Independent 27% 10% Agency Japan 37% China 63% Retirement Bancassurance 7% Life: 18% 16% Protection India 20% Group1 Direct Group 3% 8% 8
Slide 16: Korea and Designated Markets Overview
Korea and Designated Markets Overview Operating Earnings1 ($ in millions) $90 $64 1H11 1H14 Operating Earnings1 ($ in millions) $25 $30 1H11 1H14 Korea Strengthen MetLife agency Expand independent agency Drive Accident & Health (A&H) sales Designated Markets Broaden Australia distribution Maintain B
Slide 17: China and India Overview
China and India Overview Sales1 ($ in millions) $177 $101 1H11 1H14 Sales1 ($ in millions) $56 $35 1H11 1H14 China Maintain telemarketing leadership Scale the high productivity agency Expand digital and A&H India Leverage Punjab National Bank Transform agency Optimize geographical footprint 1 Presen
Slide 18: Areas of Focus to Drive Value
Areas of Focus to Drive Value Transform distribution to drive productivity Increase product profitability Focus on customer experience Improve efficiency and leverage scale
Slide 19: Leverage Strengths and Invest in the Future
Leverage Strengths and Invest in the Future Leveraging Existing Strengths Building Differentiators Global Employee Benefits Expand A&H offering across Asia Cross channel digital capabilities Develop advanced data analytics Creation of Innovation Centre
Slide 20: Asia: Strong Overall Growth
Asia: Strong Overall Growth Operating Earnings ($ in millions) $647 $400 1H11 1H14 See Appendix for non-GAAP financial information, definitions, and/or reconciliations.
Slide 21: Key Takeaways
Key Takeaways Asia – the industry’s most attractive growth opportunity Clear strategy and strong execution Proven capabilities to be leveraged across Asia Meaningful contributor to the MetLife Enterprise
Slide 22: MetLife
MetLife
Slide 23: Toby Brown
Toby Brown Chief Financial Officer Asia September 17, 2014 ASIA INVESTOR DAY 2014
Slide 24: Introduction
Introduction Solid year-to-date results Focus on operating efficiency Improve cash generation Drive value creation through product mix, pricing discipline and capital management
Slide 25: Asia: Solid Financial Results Across Key Metrics
Asia: Solid Financial Results Across Key Metrics ($ in millions) 1H13 1H14 Change Change (Constant Currency) Operating Earnings $663 $647 (2)% 3% Operating PFOs $4,905 $4,643 (5)% 2% Growth Premiums, Deposits and Other Considerations (PDOC)1 $8,898 $10,071 13% 20% Sales2 $1,500 $1,416 (6)% (6)% Valu
Slide 26: Asia: Capital and Cash
Asia: Solid Financial Results Across Key Metrics ($ in millions) 2013 1H14 Subsidiary Dividends $78 $268 Capital Capital Contributions $(146) $(277) and Cash Japan Solvency Margin Ratio (SMR)1 945% 1,018% Calculated as of December 31, 2013 (fiscal 3Q13) and June 30, 2014 (fiscal 1Q14), respectively,
Slide 27: Asia: Underlying Operating Earnings Growth is Strong
Asia: Underlying Operating Earnings Growth is Strong ($ in millions) 1H13 1H14 Change Operating Earnings $663 $647 (2)% Noteworthy Items: FX changes $(35) Japan – Variable investment income $(8) Japan – Temporary increase in fixed annuity surrenders $(61) $(7) Japan – One-time tax benefit $(17) Base
Slide 28: Top Line Mixed, Sales Managed for Value
Top Line Mixed, Sales Managed for Value1 Operating PFOs PDOC Sales2 Reported: 15% Reported: (9)% (14)% Constant: 26% Constant: 0% $898 $7,882 $3,829 $6,826 $772 $3,480 Japan 1H13 1H14 1H13 1H14 1H13 1H14 Reported: 6% Reported: 8% Constant: 2% 7% Constant: 8% $2,072 $2,189 $602 $644 $1,163 $1,076 Res
Slide 29: Asia: Aggressive Expense Management
Asia: Aggressive Expense Management Expenses ($ in millions) $1,406 $1,267 $1,080 $1,015 $741 $699 $(951) $(1,068) 1H13 1H14 Acquisition Expense Administrative Expense Deferred Acquisition Cost Net Operating Expense1 Change (Constant Currency) Guidance Sales2 (6)% Commensurate Acquisition Expense (4
Slide 30: Improving Cash Generation in Asia
Improving Cash Generation in Asia Target to increase distributions to holding company 30% of Japan operating earnings in near-term and 50% long-term Net positive cash flow from the rest of Asia, excluding inorganic growth See Appendix for non-GAAP financial information, definitions, and/or reconcili
Slide 31: Strategic Objective is to Optimize Use of Cash
Strategic Objective is to Optimize Use of Cash Mature Businesses “Maximize Cash Distribution” Japan Korea Bangladesh Growth Businesses “Self-Funding” China India Malaysia Vietnam Hong Kong Australia
Slide 32: Levers to Increase Distributable Earnings
Levers to Increase Distributable Earnings Revenue Growth New business Persistency Cross sell/up sell Value Efficiency Cash Remittance and Capital Product mix and pricing discipline Distribution efficiency Operational efficiency Reinsurance Subordinated debt Distributable Earnings
Slide 33: Value Driven by Product Mix and Pricing Discipline
Value Driven by Product Mix and Pricing Discipline Example of Profit Emergence (Japan Life: Savings)1 Profit Duration (years) Statutory U.S. GAAP Statutory reporting more conservative than U.S. GAAP Also need additional capital for solvency purposes For illustrative purposes only.
Slide 34: Goal is to Improve Statutory Breakeven Period
Goal is to Improve Statutory Breakeven Period Average Local Statutory Breakeven Periods1 Breakeven (Years) Japan A&H2 3 Japan Life 9 Japan Retirement 8 Korea A&H 6 Korea Life 10 Korea Retirement 8 Compensation Structure Changes Lower first year compensation, higher renewals in Japan and Korea Target
Slide 35: Effective Use of Reinsurance in Japan
Effective Use of Reinsurance in Japan Executed transactions in 2011 and 2012 to accelerate the emergence of profits and cash flows in Japan Utilized deferred tax assets of ~$450M and funded material cash remittance of ~$1.6B Low cost of capital Annual cost ~$200M today, declines to ~$100M in 2016 an
Slide 36: Effective Use of Subordinated Debt in China
Effective Use of Subordinated Debt in China Need to fund new business growth and plan for uncertainty of new solvency regime in China Subordinated debt issued by MetLife joint venture in China in 2Q14 10-year issue, 8% coupon, callable at the end of year 5 Key benefits Lower cost of capital Tax effi
Slide 37: Key Takeaways
Key Takeaways Solid year-to-date results Focus on operating efficiency Improve cash generation Drive value creation through product mix, pricing discipline and capital management
Slide 38: MetLife
MetLife
Slide 39: Kathy Awanis
Kathy Awanis Vice President, Direct & e-Business Asia September 17, 2014 ASIA INVESTOR DAY 2014
Slide 40: Introduction
Introduction Digital in Asia is a significant opportunity Consumer digital behavior is impacting offline purchasing Digital provides cross channel engagement to customers Digital is a differentiator for MetLife
Slide 41: What is Digital?
What is Digital? Automation and augmentation of offline activities Ease and speed of access Integration of physical and digital operations Customer data richness, transparency, big data analytics, social media
Slide 42: Digital in Asia is Real
Digital in Asia is Real % of Global Internet Users, 4Q131 Social Network Users 2013 (Monthly Active Users Estimated)2 EMEA Asia 32% 46% Americas EMEA Asia Americas 400M 560M 780M 22% Source: Website of Internet World Stats, “Internet Users in the World,” December 2013. Source: Website of Statista, “
Slide 43: Growing e-Commerce Sales
Growing e-Commerce Sales Business to Consumer e-Commerce Sales1($ in billions) $2,500 $2,000 $570 $ 529 $1,500 $ 487 $735 $ 439 $ 669 $ 389 $1,000 $ 603 $ 340 $ 540 $ 479 $500 $ 417 $1,053 $ 856 $ 681 $ 525 $ 301 $ 384 $0 2012 2013 2014 2015 2016 2017 Asia Americas EMEA 1 Source: Website of Emarkete
Slide 44: Digital Vision is Supported by Three Key Pillars
Digital Vision is Supported by Three Key Pillars Digital Vision To become the leading digital life insurer in Asia Revenue Growth Value Efficiency Build the Localized sales Deploy in new foundation and service markets
Slide 45: Connecting Consumers with MetLife
Connecting Consumers with MetLife Customer choice, information and multiple access points across life stages Sales & service: once and done End-to-end automation; no manual touch points Automated underwriting, real-time fulfilment and policy distribution Social channel access and integration – sales
Slide 46: Engaged & Empowered Consumers
Engaged & Empowered Consumers Dedicated self-service portal supporting all distribution channels Secure access to all information through consumer dashboards Self-service tools and real-time alerts on preferred devices/channels Full integration with sales, service and social platforms Education and
Slide 47: Mobile Enablers—Connecting Consumers & Distribution Partners with MetLife
Mobile Enablers—Connecting Consumers & Distribution Partners with MetLife Award-winning mobile applications Engagement through social media MetLife MULAN MetLife MOS MetLife Infinity WeChat Korea Korea | China | HK | India | China | Hong Kong China Vietnam 2013 Asia Insurance 2012 Asia Insurance Tec
Slide 48: Key Takeaways
Key Takeaways Digital in Asia is a significant opportunity Consumer digital behavior is impacting offline purchasing Digital provides cross channel engagement to customers Digital is a differentiator for MetLife
Slide 49: MetLife
MetLife
Slide 50: Dr. Nirmala Menon
Dr. Nirmala Menon Head of Designated Markets & Health Asia September 17, 2014 ASIA INVESTOR DAY 2014
Slide 51: Introduction
Introduction A&H is an attractive business opportunity MetLife is well positioned in this market Strong track record Customer focused strategy
Slide 52: Asia: A&H is an Attractive Business Opportunity
Asia: A&H is an Attractive Business Opportunity Large and Growing Market Changing Demographics and Rising Consumer Awareness Limitations in Public Healthcare Coverage Creating Opportunities Axco database, 2013. Asia A&H Market1 Gross Written Premiums (GWP) ($ in billions) Total= $74 23% Markets 77%
Slide 53: Asia: A&H Financial Results and Overview
Asia: A&H Financial Results and Overview Financial Contribution to Asia $980M Sales 48% Operating PFOs1 47% Operating Earnings1,2 A&H Overview Strong presence in Japan Sales growth in Korea and China Multi-channel distribution Proven expertise in product development Percentage represents component o
Slide 54: Customer-focused Strategy Driving Growth
Customer-focused Strategy Driving Growth Understand customer needs across the range of health benefits Conduct customer preference research Use data analytics to complement and validate findings Target attractive customer segments Early insights show that Women, Families and Children will be an area
Slide 55: Leveraging our Expertise for Successful Delivery
Leveraging our Expertise for Successful Delivery Focus on profitable markets across Asia Selected A&H Markets: Korea Share best practices across chosen markets Implement a fast-to-market product development Malaysia Japan China process Drive customer engagement through digital innovation India
Slide 56: Early Success from our A&H Strategy
Early Success from our A&H Strategy Sales1 2011 2013 Sales1,2 2011 2013 Presented on a constant currency basis using MetLife Plan FX rates. 2 China is a non-consolidating joint venture. The sales information above reflects 100% of sales activity and does not reflect our 50% ownership in the China jo
Slide 57: Key Takeaways
Key Takeaways A&H is an attractive business opportunity MetLife is well positioned to make the most of this opportunity Drive profitable growth in our five key markets by creating a distinctive value proposition which is in line with customer needs
Slide 58: MetLife
MetLife
Slide 59: Sachin N. Shah
Sachin N. Shah Chairman, President & Chief Executive Officer MetLife Japan September 17, 2014 ASIA INVESTOR DAY 2014
Slide 60: Introduction
Introduction MetLife Japan is unique platform with significant opportunities for sustainable profitable growth We have a track record of outperforming the market We are accelerating value creation through improved persistency, cost and capital management These factors are steadily improving dividend
Slide 61: Japan: Consistently Outperformed the Market
Japan: Consistently Outperformed the Market GWP Growth CAGR (%) Top 10 of 2008-2013 GWP Growth 2008-2013 Foreigner A 10 Foreigner B 7 Domestic C 6 Domestic D 6 MetLife Japan 5 Domestic E 4 Domestic F 0 Domestic G (1) Domestic H (1) Domestic I (6) Industry Average: 0 Source: MetLife internal analysis
Slide 62: Japan: Macro Trends Driving Profitable Growth Opportunities
Japan: Macro Trends Driving Profitable Growth Opportunities Social safety net under pressure Growing reliance on private sector solutions Increasing affluent and senior population Shifting consumer purchasing patterns Potential growth opportunities from Abenomics
Slide 63: Japan: Social Safety Net Costs are Rising
Japan: Social Safety Net Costs are Rising Medical Expenditure1,2 ($ in billions) Pension Expenditure1,3 ($ in billions) $400 12% $550 15% $350 $500 $450 12% $300 9% $400 $250 $350 9% $300 $200 6% $250 $150 $200 6% $100 3% $150 $100 3% $50 $50 $0 0% $0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008
Slide 64: Need for Private Sector Cancer and Medical Insurance is Growing
Need for Private Sector Cancer and Medical Insurance is Growing Cancer/Medical Insurance 40% 33% 30% 23% 20% 10% 2004 2007 2010 2013 Penetration rate of private cancer insurance 90% 88% 88% 86% 86% 84% 82% 2004 2007 2010 2013 Penetration rate of private insurance with sickness hospitalization benefi
Slide 65: Consumers Changing Providers to Better Meet Needs
Consumers Changing Providers to Better Meet Needs Medical Standalone New Business 10% Other 9% Added new insurance 28% It’s my first insurance 22% Surrendered rider 31% Switchers Surrendered standalone Highlights Market historically focused on riders Customers shifting to standalone medical products
Slide 66: Japan: Annuities Increasingly Important to Retirement Planning
Japan: Annuities Increasingly Important to Retirement Planning Annuities 18% 17% 16% 14% 12% 11% 10% 8% 6% 4% % 2004 2007 2010 2013 Penetration rate Highlights Strong interest in annuities for retirement planning Overall penetration is growing MetLife Japan is focused on profitable foreign currency
Slide 67: Major Demographic Shifts Create Opportunities
Major Demographic Shifts Create Opportunities Japan Customer Segment # of Households 2010 2020 Change (In millions) Senior Age 65+ 16.2 20.1 24% Family Age 30 – 65 14.6 13.9 (5)% Married w/child(ren) Age Couple Age 30 – 65 4.5 4.2 (7)% Middle Married w/o child(ren) Single Age 30 – 65 8.1 8.3 2% Sing
Slide 68: Well Positioned Diverse Distribution
Well Positioned Diverse Distribution New Business Sales by Distribution Highlights Independent Bancassurance Agency 31% 34% Direct MetLife 10% Agency 25% 1H14 MetLife Japan Consumers value seamless multi-channel experience Online information gathering often followed by face-to-face sale MetLife Japa
Slide 69: Broad, Diversified Product Portfolio
Broad, Diversified Product Portfolio 1Q14 PDOC by Product1 Life: Foreign Life: Yen 31% 27% Group A&H Retirement 1% 27% 14% Japan statutory financial statements for 1Q14 (April-June). See Appendix for non-GAAP financial information, definitions, and/or reconciliations. 1Q14 Sales by Product1 5% 24% 1
Slide 70: Balancing Value and Volume
Balancing Value and Volume Sales Breakdown1 ($ in millions) Why are A&H Sales Down? Change 1H13 1H14 (Constant Currency) Life: Yen $417 $213 (49)% Life: Foreign $136 $129 (5)% A&H $245 $196 (20)% Retirement $89 $223 151% Group $12 $11 (8)% Total $899 $772 (14)% Lower package sales due to life re-pri
Slide 71: Re-establishing our Leadership in Medical
Re-establishing our Leadership in Medical New Flexi Product Features Improved Base Policy Pricing Enhanced Core Riders New Comprehensive Rider Options Age-based segmented pricing Simplified surgical benefits and expanded disease coverage for females Most comprehensive rider options flexibly tailored
Slide 72: New Product Launch Driving Cancer Sales Growth
Cancer, cardiac and cerebral vessel diseases. New Product Launch Driving Cancer Sales Growth Cancer Sales1 ($ in millions) $40 $30 $20 $10 $0 1H13 1H14 Hospitalization Lump sum Presented on a constant currency basis using MetLife Plan FX rates. See Appendix for non-GAAP financial information, defini
Slide 73: Foreign Currency Products Drive Strong Growth
Foreign Currency Products Drive Strong Growth Foreign Currency Sales1 ($ in millions) $400 $300 $200 $100 $0 1H13 1H14 Single payment Level payment Highlights Strong interest in foreign currency products due to – Higher yield – Yen depreciation – Inflation concern Broad product suite Sold through mu
Slide 74: Key Takeaways
Key Takeaways Significant opportunities for profitable growth Differentiated channel and product portfolio More focus on value and volume Growing in cancer and foreign currency products Re-establishing our leadership in medical
Slide 75: MetLife
MetLife
Slide 76: Koichiro Yamaguchi
Koichiro Yamaguchi Chief Distribution Officer MetLife Japan September 17, 2014 ASIA INVESTOR DAY 2014
Slide 77: Consumer Behavior Leading the Channel Shift
Consumer Behavior Leading the Channel Shift1 Consumer channel preferences are increasingly diverse Direct growing rapidly, and is often used for information gathering prior to purchasing in other channels Bancassurance and independent agency projected to grow by mid-single digits Career agency and “
Slide 78: Broad Reach to Multiple Consumer Segments
Broad Reach to Multiple Consumer Segments A&H Sales Age-band by Channel ($ in millions) $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 Below 30 30-50 50-65 65+ Retirement Sales Age-band by Channel ($ in millions) $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 Below 30 30-50 50-65 65+ See Appendix for non-GAAP
Slide 79: Japan: Well Positioned Diverse Distribution
Japan: Well Positioned Diverse Distribution 1H14 New Business Sales by Distribution 10% 24% 26% 31% 25% 65% 74% 34% 11% MetLife Japan Foreigner A Foreigner B Independent Agency Career Agency Bancassurance Direct See Appendix for non-GAAP financial information, definitions, and/or reconciliations. Hi
Slide 80: Unique Independent Agency Model Drives Productivity
Unique Independent Agency Model Drives Productivity Key Metrics 20131 Non- Federation Federation # of agents2 4,993 4,312 Total sales share 70% 30% Productivity $9,872 $6,766 A&H sales 30% 19% share MetLife Federation Established in 1992 Provides marketing intelligence Million dollar round table-lik
Slide 81: MetLife Agency's Professionalization Growing Value
MetLife Agency’s Professionalization Growing Value Key Metrics 2010-2013 2010 2013 Change Net field force1 4,921 4,684 (5%) Productivity2 $7,620 $8,604 13% 13th month retention1 60.7% 69.1% 840 bps Expense efficiency3 137.0% 124.3% (1,270) bps Lapse and surrender2 11.3% 7.8% (350) bps 1 As of Novemb
Slide 82: Competitive Advantages from Bancassurance
Competitive Advantages from Bancassurance Partner Financial Institutions1 Non-MetLife Partners 8% Regional Tier 2 5% Regional Tier 1 24% Others 5% Mega banks 27% Japan post 31% Others 5% Mega Banks 27% Japan Post 31% MetLife Partners Non-MetLife Partners Highlights 100+ partner financial institution
Slide 83: Broad Presence in Direct Marketing
Broad Presence in Direct Marketing Key Markets Traditional Media Digital Media Credit card companies Sponsor Catalogue Comparison sites Direct companies Banks TV Online binding Own Newspaper Internet ads Direct In/outbound calls Highlights 38-year direct marketing history Dedicated in-house telemark
Slide 84: Key Takeaways
Key Takeaways Diversified multi-channel platform offers consumers choice Steady growth in direct marketing, both on- and offline High productivity from differentiated independent agency Professionalizing career agency to create value Accessing senior affluent market through bancassurance
Slide 85: MetLife
MetLife
Slide 86: Atsushi Yagai
Atsushi Yagai Chief Customer Marketing Officer MetLife Japan September 17, 2014 ASIA INVESTOR DAY 2014
Slide 87: Rebranding to MetLife Accelerates Global Leverage
Rebranding to MetLife Accelerates Global Leverage Bolshoi Ballet tour sponsorship Ladies Professional Golf Association sponsorship Major League Baseball signage MetLife Badminton World Federation World Super Series
Slide 88: Leveraging Snoopy's Popularity in Japan
Leveraging Snoopy’s Popularity in Japan Newly designed Blimp Blimp crew truck July 1, 2014 newspaper ad Company InfoPack for customer Facebook ad
Slide 89: Commercial—Medical Insurance Flexi
Commercial—Medical Insurance Flexi The full video is available at http://investor.metlife.com. All other information contained on MetLife’s website is not a part of this presentation.
Slide 90: Commercial—Flexi Gold
Commercial—Flexi Gold The full video is available at http://investor.metlife.com. All other information contained on MetLife’s website is not a part of this presentation.
Slide 91: Customer Centricity Driving Improved Persistency
Customer Centricity Driving Improved Persistency Persistency Ratio1 94.5% 93.8% 93.4% 91.8% 92.0% 90.8% 1H12 1H13 1H14 1H12 1H13 1H14 Key Initiatives Lapse notification system to agent Easy to do business by introducing payment by credit card Orphan customer management Persistency-based commissions
Slide 92: Key Takeaways
Key Takeaways Intense focus on improving persistency Persistency improving faster than the industry1 Room for further persistency improvements Rebranding better leverages our global brand assets Consumer affinity with Snoopy driving brand awareness 1 Source: Hoken Kenkyujo Ltd. Statistics of Life In
Slide 93: MetLife
MetLife
Slide 94: Greg Brennan
Greg Brennan Chief Financial Officer MetLife Japan September 17, 2014 ASIA INVESTOR DAY 2014
Slide 95: Introduction
Introduction Core business performing solidly Medical revenue growth driven by persistency Operating expense ratio continues to improve Japan SMR sound and well above minimum Interest rate sensitivities actively managed See Appendix for non-GAAP financial information, definitions and/or reconciliati
Slide 96: Japan: Sales Down but Value Up
Japan: Sales Down but Value Up Change ($ in millions) 1H13 1H14 Change (Constant Currency) Operating Earnings $596 $554 (7)% (1)% Growth Operating PFOs $3,829 $3,480 (9)% 0% PDOC $6,826 $7,882 15% 26% Sales1 $898 $772 (14)% (14)% Value First Year Commission Ratio2 66% 61% (500) bps (500) bps Operati
Slide 97: Japan: Renewal Premium Driving PFO Growth
Japan: Renewal Premium Driving PFO Growth A&H PFO Breakdown ($ in millions) Change 1H13 1H14 Change (Constant Currency) Single $287 $161 (44)% (39)% premium (SP) First year $236 $202 (14)% (5)% premium Renewal $1,511 $1,437 (5)% 5% premium PFOs $2,034 $1,800 (12)% (3)% PFOs w/o SP $1,747 $1,639 (6)%
Slide 98: Japan: Operating Expense Ratio Improving
Japan: Operating Expense Ratio Improving Operating Expense Ratio Trend 29% 27% 25.2% 25% 23.2% 23% 21.0% 21% 20.5% 19% 17% 15% 2011 2012 2013 1H 14 Highlights Investing in IT infrastructure Outsourcing business processes Leveraging global scale Driving operational efficiencies See Appendix for non-G
Slide 99: Commissions Restructured in December 2013
Commissions Restructured in December 20131 First Year Commission Trends 92.0% 90% 81.1% 80% 70% 65.9% 60% 56.4% 57.5% 50.1% 50% 40% Life A&H Group Renewal Commission Trends 14% 12% 10.7% 10% 8.0% 8% 4.9% 6% 4.4% 4.8% 4% 3.0% 2% 0% Life A&H Group 1H13 1H14 Japan Highlights First year commissions redu
Slide 100: Rising Interest Rate Risk Actively Managed
Rising Interest Rate Risk Actively Managed Interest Rate Sensitivity
Slide 101: SMR Insensitive to FX Variation
SMR Insensitive to FX Variation Foreign Exchange Rate Sensitivity
Slide 102: Key Takeaways
Key Takeaways Core business performing solidly Medical revenue growth driven by persistency Operating expense ratio continues to improve Japan SMR sound and well above minimum Interest rate sensitivities actively managed See Appendix for non-GAAP financial information, definitions and/or reconciliat
Slide 103: MetLife
MetLife
Slide 104: Christopher G. Townsend
Christopher G. Townsend President Asia September 17, 2014 ASIA INVESTOR DAY 2014
Slide 105: Closing Remarks
Closing Remarks Asia is the growth engine for the Industry Well positioned in Japan; strong growth in key markets Investment in capabilities to win Consistent performance and improving cash generation
Slide 106: MetLife
MetLife
Slide 107: Appendix
Appendix September 17, 2014 ASIA INVESTOR DAY 2014
Slide 108: Safe Harbor Statement
Safe Harbor Statement This presentation may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events
Slide 109: Safe Harbor Statement (Continued)
Safe Harbor Statement (Continued) policies and procedures; (20) catastrophe losses; (21) increasing cost and limited market capacity for statutory life insurance reserve financings; (22) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributor
Slide 110: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information Any references in this presentation (except in this Explanatory Note on Non-GAAP Financial Information slide and this Appendix) to net income (loss), net income (loss) per share, operating earnings, operating earnings per share, book value per share
Slide 111: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) The following additional adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses: Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividen
Slide 112: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) MetLife believes the presentation of operating earnings and operating earnings available to common shareholders as MetLife measures it for management purposes enhances the understanding of the company’s performance by highlighting the re
Slide 113: Definitions
MetLife Definitions
Slide 114: Definitions
Definitions Sales/Annualized New Premiums: 10% of single-premium deposits (mainly from retirement products such as variable annuity, fixed annuity and pensions) and 20% of single-premium deposits from credit insurance. 100% of annualized full year premiums and fees from recurring-premium policy sale
Slide 115: Reconciliations
MetLife Reconciliations
Slide 116: Reconciliation of Operating Earnings to Net Income – Total Company 1H14
Reconciliation of Operating Earnings Available to Common Shareholders to Net Income (Loss) Available to MetLife, Inc.’s Common Shareholders – Total Company Six Months Ended June 30, 2014 Group, Voluntary Corporate Total Company & Worksite Benefit Latin Corporate Total excluding Retail Benefits Fundi
Slide 117: Reconciliation of Operating Earnings to Net Income – Total Company 2011-2013
Reconciliation of Operating Earnings Available to Common Shareholders to Net Income (Loss) Available to MetLife, Inc.’s Common Shareholders – Total Company 2013 2012 2011 Total Rest of Total Rest of Total Rest of Company Asia MetLife Company Asia MetLife Company Asia MetLife ($ in millions) Operatin
Slide 118: Reconciliation of Operating Earnings to Net Income – Asia 1H14
Reconciliation of Operating Earnings Available to Common Shareholders to Net Income (Loss) Available to MetLife, Inc.’s Common Shareholders – Asia Six Months Ended June 30, 2014 Total Designated Asia Japan Korea Markets1 ($ in millions) Operating earnings available to common shareholders, as present
Slide 119: Reconciliation of Operating Earnings to Net Income – Asia 1H13 and 1H11
Reconciliation of Operating Earnings Available to Common Shareholders to Net Income (Loss) Available to MetLife, Inc.’s Common Shareholders – Asia Six Months Ended Six Months Ended June 30, 2011 June 30, 2013 Total Total Designated Asia Japan Asia Korea Markets1 ($ in millions) Operating earnings av
Slide 120: Reconciliation of Operating Earnings to Net Income – Japan
Reconciliation of Operating Earnings Available to Common Shareholders to Net Income (Loss) Available to MetLife, Inc.’s Common Shareholders – Japan 2013 2012 2011 Cumulative 2011-2013 ($ in millions) Operating earnings available to common shareholders $ 1,153 $ 923 $ 772 $ 2,848 Adjustments from ope
Slide 121: Reconciliation of Premiums, Fees & Other Revenues – Total Company
Reconciliation of Premiums, Fees & Other Revenues (Operating) to Premiums, Fees & Other Revenues (GAAP) – Total Company 2013 2012 2011 Total Rest of Total Rest of Total Rest of Company Asia MetLife Company Asia MetLife Company Asia MetLife ($ in millions) Premiums, fees & other revenues (operating)
Slide 122: Reconciliation of Premiums, Fees & Other Revenues – Asia
Reconciliation of Premiums, Fees & Other Revenues (Operating) to Premiums, Fees & Other Revenues (GAAP) – Asia Six Months Ended June 30, 2014 Six Months Ended June 30, 2013 Total Asia Total Asia Total excluding excluding ($ in millions) Asia Japan Japan Total Japan Japan Premiums, fees & other reven
Slide 123: MetLife
MetLife
Slide 124: John C. R. Hele
John C. R. Hele Executive Vice President & Chief Financial Officer MetLife, Inc. John Hele is executive vice president & chief financial officer for MetLife, Inc. and a member of the company’s executive group. Appointed to this position in September 2012, Hele oversees all financial management matte
Slide 125: Christopher G. Townsend
Christopher G. Townsend President, Asia MetLife, Inc. Christopher Townsend is president of MetLife’s Asia region and a member of the company’s executive group. Appointed to this position in August 2012, Townsend oversees all of MetLife’s businesses in Asia. In 2013, the Asia region generated $1.2 bi
Slide 126: Toby Brown
Toby Brown Chief Financial Officer, Asia MetLife Toby Brown is senior vice president and chief financial officer of MetLife’s Asia region. He was appointed to this position in May 2011. As chief financial officer for Asia, Brown is responsible for the overall financial leadership of MetLife’s busine
Slide 127: Kathy Awanis
Kathy Awanis Vice President Direct and e-Business, Asia MetLife Kathy Awanis joined MetLife as vice president, direct and e-business for Asia in February 2013. She is responsible for the development and execution of regional direct sales and e-business strategy across the region. She works closely w
Slide 128: Dr. Nirmala Menon
Dr. Nirmala Menon Head of Designated Markets & Health, Asia MetLife Dr. Nirmala Menon joined MetLife in May 2013 and currently serves as executive vice president and head of designated markets & health for MetLife’s Asia region. In this role she is responsible for leading and driving the regional bu
Slide 129: Sachin N. Shah
Sachin N. Shah Chairman, President & Chief Executive Officer MetLife Insurance K.K. (MetLife Japan) Sachin Shah is chairman, president and chief executive officer of MetLife Japan. He is also a member of the board of directors and representative statutory executive officer of MetLife Japan. Shah has
Slide 130: Koichiro (Koichi) Yamaguchi
Koichiro (Koichi) Yamaguchi Chief Distribution Officer MetLife Insurance K.K. (MetLife Japan) Koichi Yamaguchi is statutory executive vice president and chief distribution officer at MetLife Japan, where he is responsible for the company’s sales and distribution channels. Yamaguchi has extensive exp
Slide 131: Atsushi Yagai
Atsushi Yagai Chief Customer Marketing Officer MetLife Insurance K.K. (MetLife Japan) Atsushi Yagai is statutory executive vice president and chief customer marketing officer at MetLife Japan, where his responsibilities include marketing and the company’s direct response business. In this role, Yaga
Slide 132: Greg Brennan
Greg Brennan Chief Financial Officer MetLife Insurance K.K. (MetLife Japan) Greg Brennan joined MetLife Japan in July 2013 as executive vice president, strategic finance, and became statutory executive vice president and chief financial officer in October 2013. Before he joined MetLife Japan, Brenna
Slide 133: Edward A. Spehar
Edward A. Spehar Senior Vice President, Investor Relations MetLife Edward Spehar is a senior vice president and head of investor relations of MetLife, Inc., a global provider of life insurance, annuities, employee benefits and asset management, serving approximately 100 million customers. Appointed