Metlife, Inc. · NYSE:MET
Metlife — Tokyo Investor Conference 2008
60 slides from Metlife's conference presentation, Sep 9, 2008
Slide 1: Tokyo Investor Conference 2008
Conor Murphy Vice President Investor Relations September 10, 2008 TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 2: Safe Harbor Statement
Safe Harbor Statement These materials contain statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in the operations and financial results and the business and the products of MetLif
Slide 3: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information The historical and forward-looking financial information presented at this conference and contained in these presentations include performance measures which are based on methodologies other than Generally Accepted Accounting Principles ("GAAP"). Me
Slide 4: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) Operating return on common equity is calculated by dividing operating earnings available to common shareholders (as defined above) by average common equity for the period indicated, excluding accumulated other comprehensive income. For t
Slide 5: Agenda
Agenda Overview of MetLife International & MetLife Asia Pacific Eugene Marks Executive Vice President & Head of Regional Operations MetLife Korea Stuart Solomon Chief Executive Officer, MetLife Korea Jong Kim Chief Operating Officer, MetLife Korea Break MSI-MetLife Toshihiro Hirose Chief Operating O
Slide 6: Overview of MetLife International & MetLife Asia
Overview of MetLife International & MetLife Asia Eugene Marks Executive Vice President International TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 7: MetLife International - Increasingly Global
MetLife International - Increasingly Global Operations in 16 countries Mix of established companies, growing businesses and start-ups Transferable expertise in retirement and savings products Multi-channel distribution capabilities Sales, revenues and earnings growth engine
Slide 8: MetLife International - Access to 90%+ of the World's Market
EIMEA Region1: - - Belgium - - India - - Ireland - - Poland - - UK LatAm Region: - - Argentina - - Brazil - - Chile - - Mexico - - Uruguay Asia Pac Region: - - Australia - - China - - Hong Kong - - Japan - - South Korea - - Taiwan 1 Europe, India, Middle East and Africa Source: Swiss Re: World Insur
Slide 9: MetLife International - A Local Market Leader
1 Hoken Mainichi, June 6, 2008 edition 2 Korea Life Insurance Association 3 Estadistics AMIS 4 Chile: Superintendencia de Valores y Seguros (SVS), June 2008 5 Brazil: Brazilian Pension Association as of 1Q08 MetLife International - A Local Market Leader Japan 2nd in Variable Annuity Assets1 Korea 1s
Slide 10: MetLife International - Generating Top-line Growth
1 Premiums, Fees & Other Revenues Source: MetLife International Controller MetLife International - Generating Top-line Growth... 2004 2005 2006 2007 2008 1H Revenue 2.06 2.8 3.6 4.1 2.4 CAGR 26% MetLife International - Revenue1 ($ Billions)
Slide 11: While Growing Earnings Faster than Revenue
Source: MetLife International Controller See Appendix for non-GAAP financial information definitions and/or reconciliations. ....While Growing Earnings Faster than Revenue 2004 2005 2006 2007 2008 1H Normalized Earnings 139 216 288 417 270 CAGR 44% MetLife International - Normalized Earnings ($ Mill
Slide 12: Increasing our Contribution to the Growing Enterprise
Operating Earnings1 Full Year of 2004 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 20.4 27.4 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Operating Earnings1 First Half of 2008 MetLife International 14% MetLife International 6% ....and Increasing our Contribution to the Growing Enterprise 1Opera
Slide 13: MetLife Asia Pacific - A Closer Look
MetLife Asia Pacific - A Closer Look 5 profitable operations, plus 2 start-ups Expanding bank distribution and growing agent sales force Product innovator in Retirement & Savings products Korea and Japan largest earnings contributors
Slide 14: Growth Engine - Generating Top-line Growth
1Premiums, Fees & Other Revenues Asia Pacific: Australia, China, Hong Kong, Japan, South Korea and Taiwan Source: Company data Growth Engine - Generating Top-line Growth... 2004 2005 2006 2007 2008 1H Revenue 0.75 1.08 1.3 1.6 0.9 CAGR 29% MetLife International's Asia Pacific Region - Revenue1 ($ Bi
Slide 15: While Growing Earnings Faster than Revenue
....While Growing Earnings Faster than Revenue Source: MetLife International Controller 2004 2005 2006 2007 2008 1H Normalized Earnings 42 110 181 233 135 CAGR 77% MetLife International's Asia Pacific Region - Normalized Earnings ($ Millions)
Slide 16: MetLife
MetLife
Slide 17: MetLife Korea
MetLife Korea Stuart Solomon Chief Executive Officer MetLife Korea Jong Kim Chief Operating Officer MetLife Korea TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 18: Agenda - MetLife Korea Performance & Opportunity
Agenda MetLife Korea - Performance & Opportunity Where We Stand in the Market South Korea - Very Attractive Market - Growing Retirement Space - Untapped Retirement Asset Pool Approach to the Retirement Market Operating Revenues and Earnings Leading Innovator in Korea Expanding Agency while Maintaini
Slide 19: MetLife Korea - Performance and Opportunity
MetLife Korea - Performance and Opportunity Growth through innovation MetLife Korea sales1 growth - 47% CAGR since 2002 Market sales1 growth2 - 11% CAGR since 2002 Strong professional agency Focused on variable products A growth engine - then, now and in the future Expanding in the retirement market
Slide 20: MetLife Korea - Where We Stand in the Market
Very efficient 3rd in ROA (FY07) Very profitable 3rd in net income growth (FY03 - FY06) Growing fast 2nd in premium income growth (FY03 - FY07) 1st in new sales growth (FY06 - FY07)2 Still room to grow 9th in premium income (FY07), 3% Market Share Variable focused Product Mix - Variable 86%, Whole L
Slide 21: South Korea - Still an Attractive Market
Market Changes Potential Impact April 2007 Life insurers allowed to be listed on the Korean Stock Exchange Greater transparency, enhanced focus on profitability April 2009 Existing European-style solvency margin system replaced by a Risk Based Capital (RBC) system Competitors may seek external capit
Slide 22: South Korea - A Growing Retirement Market
1960 1970 1980 1990 2000 2005 2010 2020 2030 2050 0-14 0.423 0.425 0.34 0.256 0.211 0.191 0.163 0.126 0.112 0.09 15-64 0.548 0.544 0.622 0.693 0.717 0.718 0.728 0.717 0.647 0.537 65+ 0.029 0.031 0.038 0.051 0.072 0.091 0.109 0.157 0.241 0.373 ($ Billions) Profit/Loss Demographics - Growing Older Nat
Slide 23: South Korea - Untapped Retirement Asset Pool
Source: Korea National Statistical Office Source: Ministry of Strategy and Finance Financial Assets Composition2 Individual Assets1 South Korea - Untapped Retirement Asset Pool Over 85% of individuals' assets are in real estate or bank deposits Bank Bank Trust Investment Trust Insurance Retail Finan
Slide 24: MetLife Korea - Our Approach to the Retirement Market
Attract potential assets with market leading retirement products that exhibit principal guarantee benefits and greater expected return rates than from real estate / bank investments over long- run A leading provider of variable products Continue to innovate Agency: Positioned as highest quality reti
Slide 25: MetLife Korea - Strong Growth in Operating Revenues
MetLife Korea - Strong Growth in Operating Revenues 2003 2004 2005 2006 2007 Revenue 510 625 800 918 1000 CAGR 18% MetLife Korea - Revenue1 ($ Millions) 1Premiums, Fees & Other Revenues US GAAP, US$ converted at FX rate $1 = KRW 1000
Slide 26: MetLife Korea - Expanding Profitability
US GAAP, US$ converted at FX $1= KRW 1000 MetLife Korea - Expanding Profitability 2003 2004 2005 2006 2007 Normalized Earnings 24 38 71 106 130 CAGR 54% MetLife Korea - Normalized Operating Earnings ($ Millions)
Slide 27: MetLife Korea - A Leading Innovator
MetLife Korea - A Leading Innovator First company to introduce VUL (Variable Universal Life) Awards from 3 major economic publications in 2004 First company to introduce single payment variable annuity product with withdrawal feature (GMWB) Awards from 2 major economic publications for most innovati
Slide 28: MetLife Korea - An Expanding Agency Force
MetLife Korea - An Expanding Agency Force Agency force: Growing fast # of Financial Services Representatives: 50% growth in 18 months
Slide 29: MetLife Korea - Maintaining Industry Leading Quality
Source: MetLife research Monthly Initial Premium per Agent* MetLife Korea - Maintaining Industry Leading Quality Agency: 2007 Highest % of MDRT qualifiers = 37% (2007 qualifiers) Other foreign insurers between 10~20%, Local firms at about 10% Highest productivity (monthly initial premium) MetLife Co
Slide 30: MetLife Korea - Expanding Bank Distribution Network
SC First Bank Korea Exchange Bank Kookmin Bank Citibank HSBC Bank Shinhan Bank MetLife Korea - Expanding Bank Distribution Network Expanding bank partners by focusing on nation-wide banks Currently partnered with 6 of 9 national banks
Slide 31: Growth Plan
Growth Plan Future growth will be driven by opportunities in the retirement market with quality distribution Plan is to be a top 5 sales company in the Korea Life Insurance Market by 2012 Plan for 2007 - 2012: Operating earnings to grow at 14 -18% CAGR from $130 MM to $250 - 300 MM
Slide 32: MetLife
MetLife
Slide 33: Break
Break TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 34: Mitsui Sumitomo-MetLife
Mitsui Sumitomo-MetLife Toshihiro Hirose Chief Operating Officer MSI-MetLife TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 35: MSI-MetLife - A Leading Annuity Company
MSI-MetLife - A Leading Annuity Company Variable annuity AUM, $20 Billion1 Annuity sales2, $4.8 Billion in 2007 Strong bank and broker-dealer relationships 85 distribution partners 1 as of March 31, 2008 2 Annuity sales include all deposits paid into new and existing contracts.
Slide 36: MSI-MetLife - Value Added by Both Partners
MSI-MetLife - Value Added by Both Partners Mitsui Sumitomo Insurance Strong distribution relationships Broad brand recognition Domestic market knowledge MetLife Experience in the global annuity market Broad & deep product development resources Expertise in wholesaler model Global risk hedging
Slide 37: MSI-MetLife - Growing Faster than the Market
US$ converted at FX $1 = ¥112.25 AUM represents variable products only. Source: Hoken Mainichi CAGR 20% Japan Variable Annuity AUM ($ Billions) CAGR 23% MSI-MetLife Variable Annuity AUM ($ Billions) MSI-MetLife - Growing Faster than the Market
Slide 38: MSI-MetLife - Annuity Sales
CAGR 8% MSI-MetLife Annuity Sales1 (Fiscal Year2) ($ Millions) 1 Annuity sales include all deposits paid into new and existing contracts. 2 Fiscal Year April- March. MSI-MetLife - Annuity Sales
Slide 39: MSI-MetLife - Gaining Share in Challenging Year
MSI-MetLife - Gaining Share in Challenging Year 1 Annuity sales include all deposits paid into new and existing contracts. US$ converted at FX $1 = ¥112.25 Source : Nikkei Veritas July 13, 2008 edition 2007 Annuity Sales1 - Top 10 Companies ($ Billions) $37.1 $31.7
Slide 40: MSI-MetLife - 14% of the Market
Source : Hoken Mainichi Variable Annuity Market AUM (March 31, 2008) MSI-MetLife - 14% of the Market
Slide 41: MSI-MetLife - A Look Ahead
MSI-MetLife - A Look Ahead Aging population, with assets in low yielding bank deposits Japan Post Sales training, a core competency
Slide 42: Annuity Market Potential - $15.5 Trillion
Annuity Market Potential - $15.5 Trillion US $45.3 Japan $15.5 Deposit in Japan Post: 22% of Bank deposit or 12% of all Individual financial assets Bank Deposit Bank Deposit Equities + Bonds Mutual Funds Others Annuities East 22 32 12 2 31 1 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Bank Depo
Slide 43: MSI-MetLife - The Japan Post Opportunity
MSI-MetLife - The Japan Post Opportunity We are one of four selected annuity producers MSI-MetLife Single premium GMWB for Life Annuity payment in "Odd months" Sumitomo Life Single premium GMAB No step up ING Single premium GMAB Step up with 10%20%30% Alico Installment premium GMAB Japan Post Holdin
Slide 44: Japan Post - A Growing Sales Organization
234 branches 1,000 salaried sales staff $1.8 trillion in deposits All individual accounts 24,000 branches 60,000 salaried sales staff US$ converted at FX $1 = ¥112.25 Source: Japan Post Web 161 Japan Post Holdings Yucho Bank Post Office Company Number of branches to sell annuities May 2008 ~320 Oct
Slide 45: Japan Post - Sales Potential
Source: Japan Post Web End of June 2008 $ 11,251 million Japan Post Cumulative Investment Trusts Sales ($ Millions) Japan Post - Sales Potential Japan Post sold over $11 Billion of Investment Trusts in 33 months Similar potential for variable annuity products
Slide 46: MSI-MetLife - Competitive Advantages
Most popular product GMWB for Life Well accepted strategy "Sell annuities as annuities" Highly regarded distributor training program MSI-MetLife - Competitive Advantages
Slide 47: MSI-MetLife - Training as Competitive Advantage
Trained nearly 6,000 agents from distributors in FY 2007 (Training center in Kansai Branch) MSI-MetLife - Training as Competitive Advantage Initiatives for FY 2008 Develop improved curriculum Target 10,000 participants Kansai training center Training seminars held 227 Participants 5,911 Distributors
Slide 48: MSI-MetLife - Important Takeaways
MSI-MetLife - Important Takeaways VAs in Japan, still an emerging market Expected shift from bank deposits The Japan Post, a significant opportunity Distributor training, a key differentiator
Slide 49: MetLife
MetLife
Slide 50: Wrap Up
Wrap Up TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 51: MetLife Asia Pacific: Strategies for Growth
MetLife Asia Pacific: Strategies for Growth Objective: Grow sales & earnings at CAGR of 20 - 25% Import expertise and best practices Focus on products and solutions for our customers' retirement needs Expand bank distribution relationships Grow agent distribution in select markets Expand footprint w
Slide 52: MetLife China Sales
2004 2005 2006 2007 20081H Sales 4 17 46 499 236.2 Source: MetLife International Controllers Business Metrics Report ($ Millions) Sales1 MetLife in China has been a leader in Unit-Linked products to serve the rising middle class Expanding bank distribution in wealth concentrated cities and highly po
Slide 53: MetLife India Sales
Source: MetLife International Controllers Business Metrics Report MetLife India has been consistently ranked as one of Top 5 fastest growing insurance companies Innovative retirement & saving products Significant growth in agent sales force Bank distribution with Axis Bank, JK Bank & others 2004 200
Slide 54: Questions & Answers
Questions & Answers TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 55: MetLife
MetLife
Slide 56: Appendix
Appendix TOKYO INVESTOR CONFERENCE 2 0 0 8
Slide 57: Explanatory Note on Non-GAAP Financial Information
Explanatory Note on Non-GAAP Financial Information The historical and forward-looking financial information presented at this conference and contained in these presentations include performance measures which are based on methodologies other than Generally Accepted Accounting Principles ("GAAP"). Me
Slide 58: Explanatory Note on Non-GAAP Financial Information (Continued)
Explanatory Note on Non-GAAP Financial Information (Continued) Operating return on common equity is calculated by dividing operating earnings available to common shareholders (as defined above) by average common equity for the period indicated, excluding accumulated other comprehensive income. For t
Slide 59: Reconciliation of Net Income to Operating Earnings
Reconciliation of Net Income Available to Common Shareholders to Operating Earnings Available to Common Shareholders & Normalized Operating Earnings * Adjustments related to net investment gains (losses), net of income tax, includes amortization of unearned revenue and deferred policy acquisition co
Slide 60: MetLife
MetLife