Slide 1: Investor Presentation 2011
INVESTOR PRESENTATION 2 0 1 1 Agenda
Slide 2: Forward-looking statements
These materials 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. These statements can b
Slide 3: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information All references in this presentation to net income (loss), net income (loss) per share, operating earnings, operating earnings per share and book value per share should be read as net income (loss) available to MetLife, Inc.'s common shareholders, ne
Slide 4: 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 5: Agenda
Agenda Overview Overview Overview Steven A. Kandarian President & Chief Executive Officer Investments Investments Investments Steven J. Goulart Executive Vice President & Chief Investment Officer Finance Finance Finance William J. Wheeler President of the Americas Q&A Q&A Q&A Appendix Appendix Appen
Slide 6: MetLife
MetLife
Slide 7: Steven A. Kandarian, President & Chief Executive Officer
INVESTOR PRESENTATION 2 0 1 1 Steven A. Kandarian President & Chief Executive Officer
Slide 8: Positioned to Deliver Shareholder Value
2 Positioned to Deliver Shareholder Value Global Presence Leadership positions in large established markets Strong and growing presence in high growth markets with favorable demographics and high margins Brand Well established and expanding brand to drive preference for our products Diversified Prod
Slide 9: Leadership Positions in Markets of Today & Tomorrow
3 Leadership Positions in Markets of Today & Tomorrow Established Significant & Growing Emerging Global Life Insurance Markets United States Japan Mexico Korea Poland Chile Russia Brazil China India Turkey High Margins and Attractive Growth Prospects Largest Global Markets with Strong Cash Generatio
Slide 10: MetLife Brand Drives Customer Preference
4 MetLife Brand Drives Customer Preference Japan Increased "purchase consideration" from 20.6% to 28.6% (pre vs. post acquisition) "Snoopy J" has been seen personally by 10% of consumers Poland New advertising campaign increased brand awareness from 3% to 34% Russia First American company to sponsor
Slide 11: Broad and Diverse Distribution Platform
5 Broad and diverse distribution platform Face-to-face Bancassurance Broker Direct Worldwide distribution expertise Driving toward a customer centric organization Customers Do Business with MetLife Through Multiple Distribution Channels
Slide 12: Strong Capital Position and Generation
6 Strong capitalization at operating subsidiaries $3.5 billion of deployable capital at the holding companies by year-end 2011 Deployable capital generation even in a low interest rate environment ~40% of operating earnings is considered deployable capital Committed to returning capital to sharehold
Slide 13: Well Positioned for Low Interest Rate Environment
7 Proactive actions to protect earnings If Treasury rates remain low for 5 years earnings still grow 4% versus 8%2 Well Positioned for Low Interest Rate Environment 1For illustrative purposes only. 2This hypothetical scenario assumes U.S. Business and International & Other annual growth rates of 6%
Slide 14: Our Global Presence Creates Opportunities
8 Access to high growth markets Leverage our global scale Share expertise across the Enterprise Our Global Presence Creates Opportunities
Slide 15: Organized to Leverage Our Global Presence
9 Organized to Leverage Our Global Presence Asia Global Employee Benefits EMEA The Americas Create the foundation for a global company Focus on both mature and developing markets Drive collaboration and efficiencies
Slide 16: Building a Global Employee Benefits Franchise
10 MetLife is the leader in employee benefits for large employers in the United States We have a unique global footprint Opportunity to serve ~40 million employees outside of the U.S.2 Building a Global Employee Benefits Franchise Source: Fortune, MetLife, Dunn & Bradstreet, Annual reports, McKinsey
Slide 17: Sharing Expertise Across the Enterprise
11 Sharing Expertise Across the Enterprise Best in class Accident & Health capabilities in Japan Leveraging this expertise in the rest of the world Accident & Health Sales excluding Japan1 30% 20% 1Accident & Health sales are calculated as the annualized first year premiums and fees. ($ Millions)
Slide 18: Guiding Principles for Building on Our Strengths
12 Take a portfolio view of our businesses Continuously assess our strategy Balance growth, profitability and risk Optimize the use of capital Guiding Principles for Building on Our Strengths
Slide 19: MetLife is Positioned to Deliver Shareholder Value
13 Strong presence in established and high growth markets Well established and expanding brand Leveraging global organization Focused on profitable growth Strong capital generation to fuel growth and deliver shareholder value MetLife is Positioned to Deliver Shareholder Value
Slide 20: MetLife
MetLife
Slide 21: Steven J. Goulart, EVP & Chief Investment Officer
INVESTOR PRESENTATION 2 0 1 1 Steven J. Goulart Executive Vice President & Chief Investment Officer
Slide 22: Agenda
2 Agenda Current environment Portfolio highlights Summary
Slide 23: Global Macro Environment
3 Global Macro Environment Europe Americas Japan Latin America U.S. Asia EMEA Asia (Ex-Japan) Low growth, fiscal policy risks, managed rates Low growth, deflation, strong yen Cooling growth, inflation, commodity risk Cooling growth, inflation, sound fiscal policy Recession risk, fiscal union, moneta
Slide 24: Investments Global Reach
Investments Global Reach Investments headquartered in Morristown, New Jersey Regional offices in London, Tokyo, Hong Kong and Santiago Global team approach - 750+ person team Bangalore Sydney Hong Kong Hong Kong Taipei Shanghai Beijing Seoul Tokyo Morristown Hong Kong Santiago London 4
Slide 25: Overview: $457.7 Billion of Managed Assets
5 Overview Highly diversified portfolio Disciplined asset- liability management Deep credit expertise Risk management culture Inv Grade Corp Bonds Structured Finance Mortgage Loans Foreign Government U.S. Treasury/Agency Cash & Short-Term Below Inv Grade Credit Corp Equity RE Equity East 36.2 16.6 1
Slide 26: Low Net Realized Losses
6 URL FY 2010 YTD 9/30/2011 12/31/2008 3/31/2009 6/30/2009 9/30/2009 12/31/2009 9/30/2010 Gross Gains 1.2 1.115 782 571 263 327 288 212 Gross Losses & Impairments -1.393 -1.199 -1283 -1576 -1392 -1072 -501 -313 Net Realized Gains/(Losses) -0.2 -0.084 -501 -1005 -1129 -745 -213 -101 URL 12/31/2010 9/
Slide 27: High Quality Fixed Income Securities Portfolio
7 High Quality Fixed Income Securities Portfolio 91% investment grade Top down and bottom up fundamental credit selection U.S. Corporate Securities Foreign Corporate Securities Foreign Government Securities State and Political Subdivision Other Fixed Maturity Securities East 106575 63522 52959 13141
Slide 28: Declining European Bank Exposure
8 Declining European Bank Exposure 12/31/2010 9/30/2011 Non-Peripherals 8396 6376 Peripherals 883 481 U.S. GAAP Book Value $9,279 $6,857 Country of Domicile ($ Millions) 1Spain, Ireland, Portugal, Italy and Greece. 1 $8,396 $883 $6,376 $481
Slide 29: Low European Peripheral Sovereign Exposure
9 Low European Peripheral Sovereign Exposure U.S. GAAP Book Value 12/31/2010 9/30/2011 Greece 682 377 Italy 346 135 Portugal 330 29 Ireland 60 15 Spain 226 15 $1,644 $571 $15 ($ Millions) $29 $15
Slide 30: High Quality Structured Finance Portfolio
10 High Quality Structured Finance Portfolio 95% of combined portfolio is investment grade Collateral characteristics and tranche selection are critical ABS: $14.4B2 CMBS: $19.6B2 RMBS: $41.9B2 $75.9 Billion Portfolio1 Investment Grade Below Investment Grade 1Estimated fair value as of September 30,
Slide 31: Competitive Advantage in Private Assets
11 Competitive Advantage in Private Assets Real Estate Investments Agricultural Mortgages Private Corporates
Slide 32: Real Estate and Agricultural Investments
12 Real Estate and Agricultural Investments 17 regional offices; 200+ person team Focus on Class 'A' properties in primary markets Agricultural mortgages diversified by geography and sector Adequately Positioned Commercial Loans 41.5 Agricultural Mortgage Loans 13.4 Real Estate Equity 9.8 Residentia
Slide 33: Commercial Mortgages
13 Commercial Mortgages1 62% Loan to Value (LTV) 2.2x average Debt Service Coverage Ratio (DSCR) Two-year delinquency rate of 23 basis points LTV and DSCR Matrix Based on rolling four quarter valuation process. 1GAAP book value as of September 30, 2011.
Slide 34: Agricultural Mortgages
14 Agricultural Mortgages1 48% Loan to Value (LTV) Sector and geography diversification reduces risk LTV Matrix 1GAAP book value as of September 30, 2011.
Slide 35: Private Securities
15 Private Securities MetLife is a leading private placement investor Good downside protection via covenants and/or collateral Spread premium and lower losses versus public corporate bonds Adequately Positioned Private Corp. US 0.53 Private Corp. Non-US 0.35 Project Finance 0.05 Leasing and Tax Prod
Slide 36: Alternative Investments and Real Estate Funds and Other Joint Ventures
16 Alternative Investments and Real Estate Funds and Other Joint Ventures Private equity has driven performance in 2011 Real estate funds and other joint ventures projected to improve in 2012 $9.3 Billion Portfolio1 Hedge Funds Real Estate Funds and Other Joint Ventures LBO Funds Other Private Equit
Slide 37: Outlook for Variable Investment Income
17 Outlook for Variable Investment Income $150 to $250 Million per Quarter / $600 Million to $1.0 Billion FY Alternative Investments Real Estate Funds and Other Joint Ventures Prepayments ($ Millions) Range Variable Investment Income Components
Slide 38: Meaningful Low Rate Protection
18 Meaningful Low Rate Protection Approximately $47 billion notional2 to hedge against low rates Protection extending into next decade ($ Millions) Pre-Tax Derivative Income1 (+/-100bps Sensitivity) Total Derivatives (Swaps, Floors, Swaptions) +100bps - 100bps Flat 1Estimated based on August 31, 201
Slide 39: Summary
19 Summary Disciplined approach to investing and asset-liability management Meaningful reduction of European exposures Unique ability to source private assets Portfolio remains healthy and well positioned
Slide 40: MetLife
MetLife
Slide 41: William J. Wheeler
INVESTOR PRESENTATION 2 0 1 1 William J. Wheeler
Slide 42: Agenda
2 Agenda Review of estimated results 4th Quarter 2011 2011 estimated results MetLife's capital position Review of 2012 plan
Slide 43: 2011 Observations
3 2011 Observations A strong year in a challenging environment Alico performing as expected Earnings grew 10% year over year, despite: Low interest rates and volatile equity markets Record natural disasters Difficult regulatory environment
Slide 44: Fourth Quarter 2011 Estimate
Fourth Quarter 2011 Estimate 4 See Appendix for non-GAAP financial information definitions and/or reconciliations. ($ Millions, except per share data)
Slide 45: Full Year 2011 Financial Overview
5 Full Year 2011 Financial Overview See Appendix for non-GAAP financial information definitions and/or reconciliations. ($ Billions, except per share data)
Slide 46: Full Year 2011 Estimate
6 Full Year 2011 Estimate Operating Earnings per Share $4.43 $4.75 to $5.15 ($0.10) $4.83 to $4.93 $0.24 $0.11 $0.06 $5.14 to $5.24 10%1 1Calculated using mid-point of ranges. 2Adjustment in connection with the U.S. Social Security Administration's Death Master File. 3Includes DAC, Alico integration
Slide 47: 2011 MetLife Capital Position Year-End Estimate
1 2011 MetLife Capital Position Year-End Estimate Enterprise capital levels remain strong Combined U.S. RBC ratio 420% - 445% Japan new solvency margin ratio (SMR) 850% - 950%1 $4.5 billion cash and liquid assets at holding companies; $3.5 billion readily deployable Moody's leverage ratio2 of 26.0%
Slide 48: 2012 Deployable Capital Estimate at Holding Companies
8 2012 Deployable Capital Estimate at Holding Companies Deployable Capital Roll Forward1 $3.5 $6.0 to $7.0 $1.0 $1.0 $1.0 ($2.0) to ($2.5) $4.0 to $4.5 ($ Billions) 12011 deployable capital is post common stock dividends and any other capital actions; 2012 deployable capital is prior to common stock
Slide 49: Estimated Dividend Capacity & Capital Generation
2 Estimated Dividend Capacity & Capital Generation Estimated Run-Rate Subsidiary Dividends U.S. $2.0 - $2.5 International $1.2 - $1.4 Total $3.2 - $3.9 Total Net Uses $(~1.5) Net Increase $1.7 - $2.4 Deployable Capital Generation ($ Billions)
Slide 50: 2012 Plan Assumptions
10 2012 Plan Assumptions 5% S&P 500 growth1 U.S. interest rates based on consensus Exchange rates International regions at consensus exchange rates Yen/$ at 79.75 (hedged 80% of Japan earnings for 2012 at average of 82) No stock buybacks assumed Effective corporate tax rate of 28.5% Reflects impact
Slide 51: DAC: ASU 2010 - Estimated Impact in 2012
11 DAC: ASU 2010 - 26 Estimated Impact in 2012 $2.1 - $2.6 billion, after-tax impact to equity at adoption $375 - $475 million after-tax impact on operating earnings; most significant in Japan VOBA recorded in PGAAP is not impacted Not a cash charge; operating earnings impact will decline gradually
Slide 52: 2012 Plan
12 2012 Plan ($ Millions, except per share data) See Appendix for non-GAAP financial information definitions and/or reconciliations.
Slide 53: 2012 Operating Earnings Guidance
13 2012 Operating Earnings Guidance Operating Earnings per Share $4.64 to $4.74 $4.80 to $5.20 $0.24 $0.27 ($0.51) ($0.21) $5.14 to $5.24 7%2 1Represents mid-point of range. 2Calculated using mid-point of ranges. $0.01 See Appendix for non-GAAP financial information definitions and/or reconciliation
Slide 54: 2012 Premiums, Fees & Other Revenues Growth
14 2012 Premiums, Fees & Other Revenues Growth ($ Billions) 1Adjusted to represent the anticipated sale of MetLife Bank's forward mortgage and depository businesses. 2Calculated using mid-point of ranges before rounding. See Appendix for non-GAAP financial information definitions and/or reconciliati
Slide 55: 2012 Operating Expense Ratio
15 2012 Operating Expense Ratio See Appendix for non-GAAP financial information definitions and/or reconciliations. Operating Expense Ratio 1Reflects the DAC accounting change. Expense discipline continues Maintaining focus on Alico integration Pension/PRB cost has a negative impact of $90 million 1
Slide 56: 2012 Operating Earnings by Line of Business
16 2012 Operating Earnings by Line of Business ($ Millions) 1Adjusted to represent the anticipated sale of MetLife Bank's forward mortgage and depository businesses. 2Includes the estimate of the DAC accounting change. 3Calculated using mid-point of ranges before rounding. See Appendix for non-GAAP
Slide 57: Financial Summary
17 Financial Summary Despite macro headwinds, 2011 was a strong year with 10% year over year earnings growth Strong capital position and excess cash flow generation 2012: strong fundamentals drive earnings growth
Slide 58: MetLife
MetLife
Slide 59: Appendix
INVESTOR PRESENTATION 2 0 1 1 Appendix
Slide 60: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information All references in this presentation to net income (loss), net income (loss) per share, operating earnings, operating earnings per share and book value per share should be read as net income (loss) available to MetLife, Inc.'s common shareholders, ne
Slide 61: 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 62: Reconciliations
Reconciliations
Slide 63: Reconciliation of Net Income to Operating Earnings - Total Company
5 Reconciliation of Net Income (Loss) Available to MetLife, Inc.'s Common Shareholders to Operating Earnings Available to Common Shareholders - Total Company
Slide 64: Reconciliation of Operating Expenses and Operating Expense Ratio
6 Reconciliation of Operating Expenses, Premiums, Fees & Other Revenues, and Operating Expense Ratio - Total Company
Slide 65: Reconciliation of Return on Common Equity
7 Reconciliation of Return on Common Equity - Total Company
Slide 66: Reconciliation of Total Investments to Managed Assets
8 Reconciliation of Total Investments to Managed Assets
Slide 67: Reconciliation of Net Investment Gains (Losses) to Investment Portfolio Gains (Losses)
9 Reconciliation of Net Investment Gains (Losses) to Investment Portfolio Gains (Losses) - Total Company
Slide 68: Outlook
Outlook
Slide 69: MetLife Interest Rate Outlook
11 MetLife Interest Rate Outlook Current Plan Rates Plan Rates Plan Rates Plan Rates Plan Rates 11/28/11 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 U.S. Interest Rates U.S. Interest Rates U.S. Interest Rates U.S. Interest Rates Fed Funds Fed Funds Fed Funds 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 1-Month
Slide 70: Full Year 2011 Operating Earnings - Normalized Estimate
Full Year 2011 Operating Earnings - Normalized Estimate 12 1Adjusted to represent the anticipated sale of MetLife Bank's forward mortgage and depository businesses.
Slide 71: MetLife
MetLife