MetLife Annual Report 2014

FY2014 Annual Report · MetLife

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ANNUAL REPORT

| MetLife, Inc. 2014

CHAIRMAN’S LETTER

To My Fellow Shareholders:

One of the great strengths of MetLife’s business is diversification. Today, we
are one of the world’s most broadly diversified life insurance companies — by
geography, by product, and by distribution channel. What this means in
practice is that softness in one part of our business is often offset by strength
in another, resulting in overall performance that is more even than if our
business were highly concentrated.

The benefits of geographic diversification were clearly evident in 2014. While
economic growth in various parts of the world suffered, a relatively healthy
U.S. economy helped lift MetLife’s business results in our largest market. The
benefits of product diversification were also evident last year as soft
underwriting margins were offset by better-than-expected investment spreads
and favorable equity markets.

The strength of our business model enabled MetLife to generate full-year
2014 operating earnings of $6.6 billion, a 5 percent increase over 2013, and
operating earnings per share of $5.74, up 2 percent from the prior-year
period. Our operating return on equity (ROE) for all of 2014 was 12 percent,
the second year in a row that we achieved an operating ROE at the low end of
our 2016 target range of 12 percent to 14 percent.1

“Today, we are one

of the world’s most

broadly diversified life

Multi-Year Performance

insurance companies

— by geography, by

product, and by

distribution channel.”

Earnings Growth
2011-2014

(cid:129) 12.1 percent in

Operating Earnings

As pleased as we are with MetLife’s 2014 performance, the success of a long-
term business should be gauged over a multi-year period. Here too MetLife is
performing well.

From 2011, when I became CEO, through 2014, the company’s operating
earnings grew at a compound annual rate of 12.1 percent. Over the same
period, operating earnings per share (EPS) grew at a compound annual rate of
9.6 percent. In addition, since the introduction of MetLife’s corporate strategy
in 2012, the company’s operating ROE has averaged 11.8 percent, only
slightly below the bottom of our 2016 target range. I am not attributing all of
the company’s recent performance to our strategy work — in the life
insurance business, profits emerge slowly over time — but I am confident that
our decisions have improved risk-adjusted returns to shareholders.

Delivering close to double-digit operating EPS growth and a 12 percent
operating ROE during the past three years is especially noteworthy given that
the 10-year Treasury yield has averaged 2.2 percent since the summer of 2011
and our capital management actions have been conservative due to regulatory
uncertainty.

A Commitment to Cash Flow

I am less satisfied with MetLife’s level of free cash flow generation, which is
the most important business metric in determining the company’s ability to

(cid:129) 9.6 percent in Operating

Earnings Per Share

“Operating ROE” refers to operating return on equity excluding accumulated other comprehensive income
other than foreign currency translation adjustments. See “Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Non-GAAP and Other Financial Disclosures” for this and
other non-GAAP definitions and reconciliations.

MetLife 2014 Annual Report i

Expense Reductions

(cid:129) $600 million in net saves

in 2014

(cid:129) On track for $1 billion in

gross saves in 2015

CHAIRMAN’S LETTER

return capital to shareholders. While the ratio of free cash flow to operating
earnings has shown improvement, reaching 44 percent in 2014, it is still
below the level we think is necessary to maximize shareholder value. We are
striving to increase the amount of cash generated by the business and believe
that our target of 45 percent to 55 percent for 2015 to 2017 is achievable,
assuming we have a reasonable regulatory environment and gradually rising
interest rates.

Over time, the performance of life insurance stocks has become more closely
correlated with the ratio of free cash flow to operating earnings. Since the
financial crisis, investors have shown increasing skepticism toward reported
earnings for life insurers. Unlike metrics whose correlation to stock price
performance can vary based on the macro environment and investor
sentiment, nothing is more fundamental than cash. Growing free cash flow by
investing capital at attractive risk-adjusted returns is the surest way to
maximize shareholder value over time. That is why free cash flow generation
has become an enterprisewide imperative at MetLife and will be informing all
of our major business decisions in the months and years ahead.

“Nothing is more fundamental than cash. ... That is why free cash flow

generation has become an enterprisewide imperative at MetLife and will be

informing all of our major business decisions in the months and years ahead.”

Strategy Highlights

Helping to drive MetLife’s success in 2014 was the notable progress we made
on the company’s strategic initiatives.

We are pleased to have reached our goal of $600 million in net expense saves
ahead of schedule, and we remain on track to achieve $1 billion in gross
expense saves by the end of 2015. Both parts of this strategic initiative are
important — delivering cost savings that fall to the bottom line, and
reinvesting in the business to drive future growth. We will continue to invest a
significant portion of our reinvestment dollars in technology improvements
that make it easier to do business with MetLife.

Managing the amount of risk we take on is another critical element in
MetLife’s business strategy. From a high of $28.4 billion in 2011, MetLife
reduced sales of variable annuities (VAs) to $6.3 billion in 2014. We believe
our strategic initiative to Refocus the U.S. Business is essentially complete, and
in 2015 we are looking to resume growth in our annuity business through a
range of products. For example, our new guaranteed minimum withdrawal
benefit VA, “FlexChoice,” has a better risk profile while still offering
customers a competitive benefit. We believe the design of the new product
will contribute to a more than 50 percent increase in total annuity sales in
2015.

Even with a rebound in annuity sales, we anticipate that VA risk will moderate
over time. We continue to emphasize growth in less capital-intensive
protection products, and expect the related businesses to grow at a faster rate

ii MetLife 2014 Annual Report

Capital Returns
in 2014

(cid:129) 27 percent dividend

increase

(cid:129) $2 billion in share

buybacks announced

CHAIRMAN’S LETTER

than Retail Annuities. As a result, the demands that the annuity business
places on our overall capital base should go down over time.

Much of our anticipated growth in protection-oriented products will take
place outside of the United States, consistent with MetLife’s strategic
initiative to Grow Emerging Markets. MetLife’s emerging market sales grew
by a healthy 24 percent in 2014, or 14 percent excluding a large Mexico
group contract. We believe emerging markets will remain a growth engine
for the company over the longer term, even as a strong dollar dampens the
earnings contribution from non-U.S. markets in the near term.

Returning Capital

MetLife’s strong business performance has allowed the company to
significantly increase the amount of capital it returns to shareholders.

MetLife increased its quarterly dividend payment to common shareholders by
27 percent in 2014, on top of a 49 percent increase in 2013. The current
annual dividend is $1.40 per common share, up from 74 cents in 2012.

MetLife also announced $2 billion in share buybacks in 2014, our first since
the financial crisis in 2008. MetLife announced an initial $1 billion in share
buybacks in June of 2014, which we completed before year-end. In
December, we announced an additional $1 billion in share buybacks for
2015. As a result of weakness in MetLife’s stock price in the early part of this
year, we aggressively repurchased shares, and our second $1 billion program
is nearly complete.

We believe it is prudent to hold an elevated amount of capital until there is
greater clarity on the prudential standards that will apply to MetLife. As of
year-end 2014, MetLife held $6.1 billion in cash and liquid assets at its
holding companies.

Interest Rates and Return on Equity

Low interest rates continue to be a headwind for the life insurance industry.
In our view, the current rate environment is largely explained by
unprecedented market intervention from central banks and a sluggish global
economy. Over the long term, we believe the 10-year Treasury yield should
be 4.0–4.5 percent based on the Federal Reserve’s 2 percent inflation target
and expectations for long-term economic growth. We assume the 10-year
Treasury yield normalizes by year-end 2017, but also see risk of a lower-for-
longer environment for interest rates.

MetLife’s strategy of shifting our product mix toward less interest-sensitive
products has helped mitigate the impact of a low-rate scenario. However, if
interest rates remain low indefinitely, it would likely be difficult to sustain our
2014 operating ROE of 12 percent over the long term. This is not a MetLife-
specific challenge. Maintaining current return targets in a long-term low rate
scenario would likely be a challenge for most businesses, particularly those in
the financial services industry.

Fortunately, absolute returns do not tell the whole story. It is also important to
consider relative returns. If interest rates remain low indefinitely, there would
likely be a downward reset in return expectations across all asset classes.

MetLife 2014 Annual Report iii

“In addition to a solid

performance relative to

the risk-free rate, the

quality of the

company’s operating

ROE has improved....”

CHAIRMAN’S LETTER

Because equity returns are measured against the risk-free rate, the spread
between MetLife’s operating ROE and the 10-year Treasury yield is a key
metric. For example, if investors consider a 12 percent operating ROE
acceptable when the risk-free rate is 4 percent, they should consider a 10
percent operating ROE acceptable when the risk-free rate is 2 percent. In each
case the spread over the risk-free rate is an identical 800 basis points. On this
basis, there is reason to be optimistic about MetLife’s prospects even if interest
rates stay low.

If you look at the spread between MetLife’s operating ROE and the 10-year
Treasury yield going back to 2000, the year we went public, you can see that
the company’s recent performance has been comparatively strong (see chart,
p. iv). During the past three years, from 2012 to 2014, the spread between
MetLife’s operating ROE and the 10-year Treasury yield has averaged 960 basis
points, close to pre-financial crisis levels.

In addition to a solid performance relative to the risk free rate, the quality of
the company’s operating ROE has improved — largely due to lower leverage
and de-risking in the U.S. business. MetLife also has a better business mix as a
result of our 2010 acquisition of Alico and our strategy of focusing on the sale
of less capital-intensive protection-oriented products. This favorable shift in the
company’s product mix should continue to improve our operating ROE relative
to the risk-free rate and reduce our cost of equity capital over time.

Operating ROE1 Spread over 10-Year Treasury Yield2

Returns relative to risk-free rate are near pre-crisis levels

12%

10%

‘00

‘01

‘02

‘03

‘04

‘05

‘06

‘07

‘08

‘09

‘10

‘11

‘12

‘13

‘14

1 Excludes accumulated other comprehensive income other than foreign currency translation adjustments.

2 10-year Treasury yield is average in each period. Historical reported results for the years 2000 through 2007
have not been modified for current period events such as the adoption of new accounting pronouncements
and subsequent events, including acquisitions and dispositions, discontinued operations and divested business.

Regulatory Matters

As is well known by now, MetLife has filed a legal challenge to its designation
as a Systemically Important Financial Institution by the Financial Stability
Oversight Council (FSOC).

iv MetLife 2014 Annual Report

“We believe we have
a strong legal case to

present to the court

and look forward to

its eventual decision.”

CHAIRMAN’S LETTER

When we filed the challenge in January, I said we had hoped to avoid
litigation in light of the substantial and compelling evidence we presented to
FSOC demonstrating that MetLife is not systemically important. The Dodd-
Frank Act is clear that size alone does not make a company systemic. We
believe we have a strong legal case to present to the court and look forward
to its eventual decision.

As a former regulator, I want to emphasize that MetLife has always supported
appropriate regulation of the life insurance industry and has operated under a
stringent state regulatory system for decades. However, adding a new federal
standard for just the largest life insurers while retaining a different standard
for everyone else will harm competition and drive up the cost of financial
protection without making the financial system safer.

We believe the government should preserve a level playing field in the life
insurance industry. If additional regulation is necessary, the government has a
superior tool at its disposal — an approach that focuses on potentially
systemic activities regardless of the size of the firm. FSOC has already
embraced this activities-based approach for the asset management industry.

Litigation takes time to resolve, and in the meantime, the Federal Reserve is
now one of MetLife’s regulators. We are cooperating fully with representatives
from the Federal Reserve Bank of New York as they carry out their supervisory
duties. At the same time, we continue to discuss with regulators and
lawmakers in Washington the need for capital rules that reflect the business of
insurance. With the enactment of the Insurance Capital Standards Clarification
Act in December of 2014, the Federal Reserve now has the flexibility it needs
to appropriately tailor capital rules for life insurers.

Conclusion

MetLife is committed to creating long-term value for shareholders. Since
2011, we have made progress on this commitment by growing operating
earnings per share at close to a double digit rate and improving operating ROE
from 10 percent to 12 percent. Also, we are beginning to see better free cash
flow performance, as the ratio of free cash flow to operating earnings
improved to 44 percent in 2014. Finally, the improvement in earnings,
operating ROE and cash flow has occurred while we have continued to reduce
the level of risk in the business.

On behalf of MetLife’s Board of Directors, management, associates and
advisors, I want to say thank you for the trust you have placed in us to run
your company. We will continue to strive every day to earn it.

Sincerely,

Steven A. Kandarian
Chairman of the Board, President and Chief Executive Officer
MetLife, Inc.

March 12, 2015

MetLife 2014 Annual Report v

TABLE OF CONTENTS

Note Regarding Forward-Looking Statements ........................................

Selected Financial Data ......................................................................

Business ..........................................................................................

Management’s Discussion and Analysis of Financial Condition
and Results of Operations...................................................................

Quantitative and Qualitative Disclosures About Market Risk .....................

Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure ................................................

Management’s Annual Report on
Internal Control Over Financial Reporting ..............................................

Report of the Company’s Registered Public Accounting Firm....................

Financial Statements and Supplementary Data .......................................

Board of Directors ............................................................................. 242

Executive Officers.............................................................................. 242

Contact Information .......................................................................... 243

Corporate Information ....................................................................... 243

As used in this Annual Report, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation
incorporated in 1999, its subsidiaries and affiliates.

Note Regarding Forward-Looking Statements

This Annual Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, 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 be identified by
the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,”
“plan,” “believe” and other words and terms of similar meaning, or are tied to future periods, in connection with a discussion of future operating or
financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or
results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in
operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown
risks and uncertainties. Many such factors will be important in determining the actual future results of MetLife, Inc., its subsidiaries and affiliates.
These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that
are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or
implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties
and other factors identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission. These factors include: (1) difficult
conditions in the global capital markets; (2) increased volatility and disruption of the capital and credit markets, which may affect our ability to meet
liquidity needs and access capital, including through our credit facilities, generate fee income and market-related revenue and finance statutory
reserve requirements and may require us to pledge collateral or make payments related to declines in value of specified assets, including assets
supporting risks ceded to certain of our captive reinsurers or hedging arrangements associated with those risks; (3) exposure to financial and
capital market risks, including as a result of the disruption in Europe and possible withdrawal of one or more countries from the Euro zone;
(4) impact of comprehensive financial services regulation reform on us, as a non-bank systemically important financial
institution, or otherwise;
(5) numerous rulemaking initiatives required or permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act which may impact
how we conduct our business, including those compelling the liquidation of certain financial institutions; (6) regulatory, legislative or tax changes
relating to our insurance, international, or other operations that may affect the cost of, or demand for, our products or services, or increase the cost
or administrative burdens of providing benefits to employees; (7) adverse results or other consequences from litigation, arbitration or regulatory
investigations; (8) potential
liquidity and other risks resulting from our participation in a securities lending program and other transactions;
(9) investment losses and defaults, and changes to investment valuations; (10) changes in assumptions related to investment valuations, deferred
policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (11) impairments of goodwill and realized losses or
market value impairments to illiquid assets; (12) defaults on our mortgage loans; (13) the defaults or deteriorating credit of other financial institutions
that could adversely affect us; (14) economic, political, legal, currency and other risks relating to our international operations, including with respect
to fluctuations of exchange rates; (15) downgrades in our claims paying ability, financial strength or credit ratings; (16) a deterioration in the
experience of the “closed block” established in connection with the reorganization of Metropolitan Life Insurance Company; (17) availability and
effectiveness of reinsurance or indemnification arrangements, as well as any default or failure of counterparties to perform; (18) differences between
ineffectiveness of risk management policies and procedures;
actual claims experience and underwriting and reserving assumptions;
(20) catastrophe losses;
(22) heightened
competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new
and existing competitors, and for personnel; (23) exposure to losses related to variable annuity guarantee benefits, including from significant and
sustained downturns or extreme volatility in equity markets, reduced interest rates, unanticipated policyholder behavior, mortality or longevity, and
the adjustment for nonperformance risk; (24) our ability to address difficulties, unforeseen liabilities, asset impairments, or rating agency actions
arising from business acquisitions, including our acquisition of American Life Insurance Company and Delaware American Life Insurance Company,
and integrating and managing the growth of such acquired businesses, or arising from dispositions of businesses or legal entity reorganizations;
(25) regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends and repurchase common stock; (26) MetLife, Inc.’s primary
reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on
the ability of the subsidiaries to pay such dividends; (27) the possibility that MetLife, Inc.’s Board of Directors may influence the outcome of
stockholder votes through the voting provisions of the MetLife Policyholder Trust; (28) changes in accounting standards, practices and/or policies;
(29) increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee benefits; (30) inability to
protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (31) inability to attract and retain sales
representatives; (32) provisions of laws and our incorporation documents may delay, deter or prevent takeovers and corporate combinations
involving MetLife; (33) the effects of business disruption or economic contraction due to disasters such as terrorist attacks, cyberattacks, other
hostilities, or natural catastrophes, including any related impact on the value of our investment portfolio, our disaster recovery systems, cyber- or
other information security systems and management continuity planning; (34) the effectiveness of our programs and practices in avoiding giving
our associates incentives to take excessive risks; and (35) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the
U.S. Securities and Exchange Commission.

increasing cost and limited market capacity for statutory life insurance reserve financings;

(21)

(19)

MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc. later becomes
aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports to
the U.S. Securities and Exchange Commission.

MetLife, Inc.

Selected Financial Data

The following selected financial data has been derived from the Company’s audited consolidated financial statements. The statement of
operations data for the years ended December 31, 2014, 2013 and 2012, and the balance sheet data at December 31, 2014 and 2013 have been
derived from the Company’s audited consolidated financial statements included elsewhere herein. The statement of operations data for the years
ended December 31, 2011 and 2010, and the balance sheet data at December 31, 2012, 2011 and 2010 have been derived from the Company’s
audited consolidated financial statements not included herein. The selected financial data set forth below should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and
related notes included elsewhere herein.

Years Ended December 31,

2014

2013

2012

2011

2010

(In millions, except per share data)

Statement of Operations Data (1)

Revenues

Premiums ............................................................................................. $ 39,067 $ 37,674 $ 37,975 $ 36,361 $ 27,071

Universal life and investment-type product policy fees ...............................

9,946

9,451

8,556

7,806

6,028

Net investment income ..........................................................................

21,153

22,232

21,984

19,585

17,493

Other revenues......................................................................................

Net investment gains (losses) ..................................................................

Net derivative gains (losses) ....................................................................

2,030

(197)

1,317

1,920

161

1,906

(352)

(3,239)

(1,919)

2,532

(867)

4,824

2,328

(408)

(265)

Total revenues ...................................................................................

73,316

68,199

68,150

70,241

52,247

Expenses

Policyholder benefits and claims .............................................................

39,102

38,107

37,987

35,471

29,187

Interest credited to policyholder account balances ....................................

Policyholder dividends ...........................................................................

Goodwill impairment ..............................................................................

6,943

1,376

—

Other expenses .....................................................................................

17,091

Total expenses ..................................................................................

64,512

Income (loss) from continuing operations before provision for income tax ....

Provision for income tax expense (benefit) ................................................

Income (loss) from continuing operations, net of income tax.......................

8,804

2,465

6,339

Income (loss) from discontinued operations, net of income tax ...................

(3)

Net income (loss)...................................................................................

Less: Net income (loss) attributable to noncontrolling interests ...................

Net income (loss) attributable to MetLife, Inc.............................................

Less: Preferred stock dividends ..............................................................

Preferred stock redemption premium ..............................................

6,336

6,309

122

—

8,179

1,259

—

16,602

64,147

4,052

661

3,391

3,393

3,368

122

—

7,729

1,369

1,868

17,755

66,708

1,442

128

1,314

1,362

1,324

122

—

5,603

1,446

—

18,537

61,057

9,184

2,793

6,391

6,415

4,919

1,485

—

12,927

48,518

3,729

1,110

2,619

2,663

(8)

(4)

6,423

2,667

122

146

122

—

Net income (loss) available to MetLife, Inc.’s common shareholders ............ $

6,187 $

3,246 $

1,202 $

6,155 $

2,545

EPS Data (1), (2)
Income (loss) from continuing operations, net of income tax, available to

MetLife, Inc.’s common shareholders per common share:

Basic ................................................................................................ $

5.48 $

2.94 $

1.08 $

5.79 $

Diluted .............................................................................................. $

5.42 $

2.91 $

1.08 $

5.74 $

2.83

2.81

Income (loss) from discontinued operations, net of income tax, per

common share:

Basic ................................................................................................ $

Diluted .............................................................................................. $

Net income (loss) available to MetLife, Inc.’s common shareholders per

common share:

— $

0.04 $

0.02 $

0.04 $

0.02 $

0.05

Basic ................................................................................................ $

5.48 $

2.94 $

1.12 $

5.81 $

Diluted .............................................................................................. $

5.42 $

2.91 $

1.12 $

5.76 $

Cash dividends declared per common share ............................................ $

1.33 $

1.01 $

0.74 $

2.88

2.86

0.74

MetLife, Inc.

2014

2013

2012

2011

2010

December 31,

(In millions)

Balance Sheet Data (1)

Separate account assets ........................................................... $

316,994

$ 317,201

$ 235,393

$ 203,023

$ 183,138

Total assets.............................................................................. $

902,337

$ 885,296

$ 836,781

$ 796,226

$ 728,249

Policyholder liabilities and other policy-related balances (3) ............ $

417,141

$ 418,487

$ 438,191

$ 421,267

$ 399,135

Short-term debt ........................................................................ $

100

Long-term debt ........................................................................ $

16,286

Collateral financing arrangements ............................................... $

Junior subordinated debt securities............................................. $

4,196

3,193

175

18,653

4,196

3,193

100

19,062

4,196

3,192

686

23,692

4,647

3,192

306

27,586

5,297

3,191

Separate account liabilities ......................................................... $

316,994

$ 317,201

$ 235,393

$ 203,023

$ 183,138

Accumulated other comprehensive income (loss) ......................... $

10,649

Total MetLife, Inc.’s stockholders’ equity ..................................... $

72,053

Noncontrolling interests ............................................................. $

507

5,104

61,553

543

11,397

64,453

384

6,083

57,519

370

1,145

46,853

365

Years Ended December 31,

2014

2013

2012

2011

2010

Other Data (1), (4)

Return on MetLife, Inc.’s common stockholders’ equity ................

9.4%

Return on MetLife, Inc.’s common stockholders’ equity, excluding
accumulated other comprehensive income (loss) ......................

10.9%

5.4%

6.2%

2.0%

12.2%

2.4%

13.2%

6.9%

7.0%

(1)

(2)

(3)

(4)

On November 1, 2010, MetLife, Inc. acquired American Life Insurance Company (“American Life”) and Delaware American Life Insurance
Company (“DelAm”) (collectively, “ALICO”). Results of such acquisition are reflected in the selected financial data since the acquisition date.

For the years ended December 31, 2012 and 2010, all shares related to the assumed issuance of shares in settlement of the applicable
purchase contracts have been excluded from the calculation of diluted earnings per common share, as these assumed shares are anti-
dilutive.

Policyholder liabilities and other policy-related balances include future policy benefits, policyholder account balances (“PABs”), other policy-
related balances, policyholder dividends payable and the policyholder dividend obligation.

Return on MetLife, Inc.’s common stockholders’ equity is defined as net income (loss) available to MetLife, Inc.’s common shareholders
divided by MetLife, Inc.’s average common stockholders’ equity.

Business

MetLife has grown to become a global provider of

life insurance, annuities, employee benefits and asset management. Through our
subsidiaries and affiliates, we hold leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. Over the
past several years, we have grown our core businesses, as well as successfully executed on our growth strategy. This has included completing a
number of transactions that have resulted in the acquisition and, in some cases, divestiture of certain businesses while also further strengthening
our balance sheet to position MetLife for continued growth.

MetLife is organized into six segments, reflecting three broad geographic regions: Retail; Group, Voluntary & Worksite Benefits; Corporate
Benefit Funding; and Latin America (collectively, the “Americas”); Asia; and Europe, the Middle East and Africa (“EMEA”). In addition, the Company
reports certain of its results of operations in Corporate & Other, which includes MetLife Home Loans LLC (“MLHL”), the surviving, non-bank entity
of the merger of MetLife Bank, National Association (“MetLife Bank”) with and into MLHL, and other business activities. Management continues to
evaluate the Company’s segment performance and allocated resources and may adjust related measurements in the future to better reflect
segment profitability. See “Business — Segments and Corporate & Other” in MetLife’s Annual Report on Form 10-K for the year ended
December 31, 2014 (the “2014 Form 10-K”), “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Executive Summary — Consolidated Company Outlook” and Note 2 of the Notes to the Consolidated Financial Statements for further information
on the Company’s segments and Corporate & Other.

MetLife, Inc.

In the first quarter of 2014, the Company entered into a definitive agreement to sell

its wholly-owned subsidiary, MetLife Assurance Limited
(“MAL”). The sale of MAL was completed in May 2014. As a result, the operations of MAL have been classified as divested business for all periods
presented. See Note 3 of the Notes to the Consolidated Financial Statements.

In the fourth quarter of 2013, MetLife, Inc. completed its acquisition of Administradora de Fondos de Pensiones Provida S.A. (“ProVida”), the
largest private pension fund administrator in Chile based on assets under management and number of pension fund contributors. The acquisition
of ProVida supports the Company’s growth strategy in emerging markets and further strengthens the Company’s overall position in Chile. See
Note 3 of the Notes to the Consolidated Financial Statements.

Certain international subsidiaries have a fiscal year cutoff of November 30th. Accordingly, the Company’s consolidated financial statements
reflect the assets and liabilities of such subsidiaries as of November 30, 2014 and 2013 and the operating results of such subsidiaries for the years
ended November 30, 2014, 2013 and 2012. The Company is in the process of converting to calendar year reporting for these subsidiaries. We
expect to substantially complete these conversions by 2016. The impact of the conversions on our financial statements to date has been de
minimis and, therefore, has been reported in net income in the quarter of conversion.

In the U.S., we provide a variety of insurance and financial services products, including life, dental, disability, property & casualty, guaranteed

interest, stable value and annuities, through both proprietary and independent retail distribution channels, as well as at the workplace.

Outside the U.S., we provide life, medical, dental, credit and other accident & health insurance, as well as annuities, endowment and
retirement & savings products to both individuals and groups. We believe these businesses will continue to grow more quickly than our U.S.
businesses.

In the Americas, excluding Latin America, we market our products and services through various distribution channels. Our retail life, disability
and annuities products targeted to individuals are sold via sales forces, comprised of MetLife employees, as well as third-party organizations. Our
group and corporate benefit funding products are sold via sales forces primarily comprised of MetLife employees. Personal
lines property &
lines property & casualty insurance
casualty insurance products are directly marketed to employees at their employer’s worksite. Personal
products are also marketed and sold to individuals by independent agents, property & casualty specialists through a direct marketing channel, and
via sales forces comprised of MetLife employees. MetLife sales employees work with all distribution channels to better reach and service
customers, brokers, consultants and other intermediaries.

In Asia, Latin America, and EMEA, we market our products and services through a multi-distribution strategy which varies by geographic
region and stage of market development. The various distribution channels include: career agency, bancassurance, direct marketing, brokerage,
other third-party distribution, and e-commerce. In developing countries, the career agency channel covers the needs of the emerging middle class
with primarily traditional products (e.g., whole life, term, endowment and accident & health). In more developed and mature markets, career
agents, while continuing to serve their existing customers to keep pace with their developing financial needs, also target upper middle class and
life
mass affluent customer bases with a more sophisticated product set including more investment-sensitive products, such as universal
insurance, unit-linked life insurance, mutual funds and single premium deposit insurance. In the bancassurance channel, we have leveraged
partnerships and developed extensive and far reaching capabilities in all regions. Our direct marketing operations, the largest of which is in Japan,
deploy both broadcast marketing approaches (e.g. direct response TV, web-based lead generation) and traditional direct marketing techniques
such as inbound and outbound telemarketing.

Revenues derived from any customer did not exceed 10% of consolidated premiums, universal

life and investment-type product policy fees
and other revenues for the years ended December 31, 2014, 2013 and 2012. Financial
information, including revenues, expenses, operating
earnings, and total assets by segment, as well as premiums, universal life and investment-type product policy fees and other revenues by major
product groups, is provided in Note 2 of the Notes to the Consolidated Financial Statements. Operating revenues and operating earnings are
performance measures that are not based on accounting principles generally accepted in the United States of America (“GAAP”). See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP and Other Financial Disclosures” for
definitions of such measures.

In the U.S., our life insurance companies are regulated primarily at the state level, with some products and services also subject to federal
regulation. In addition, MetLife, Inc. and its U.S. insurance subsidiaries are subject to regulation under the insurance holding company laws of
various U.S. jurisdictions. As a non-bank systemically important financial institution (“non-bank SIFI”), MetLife, Inc. is also subject to regulation by
the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the Federal Reserve Bank of New York (collectively, with
the Federal Reserve Board, the “Federal Reserve”). Furthermore, some of MetLife’s operations, products and services are subject to consumer
protection laws, securities, broker-dealer and investment adviser regulations, environmental and unclaimed property laws and regulations, and to
the Employee Retirement Income Security Act of 1974. See “Business — Regulation — U.S. Regulation” in the 2014 Form 10-K.

Our international insurance operations are principally regulated by insurance regulatory authorities in the jurisdictions in which they are located
or operate. In addition, our investment and pension companies outside of the U.S. are subject to oversight by the relevant securities, pension and
other authorities of the countries in which the companies operate. Our non-U.S. insurance businesses are also subject to current and developing
solvency regimes which impose various capital and other requirements. As a global systemically important insurer (“G-SII”), MetLife, Inc. may also
become subject to additional capital requirements. See “Business — Regulation — International Regulation” in the 2014 Form 10-K.

MetLife, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements and Other Financial Information ...............................................................................................

Executive Summary ..........................................................................................................................................................

Industry Trends.................................................................................................................................................................

Summary of Critical Accounting Estimates...........................................................................................................................

Economic Capital..............................................................................................................................................................

Acquisitions and Dispositions .............................................................................................................................................

Results of Operations ........................................................................................................................................................

Effects of Inflation..............................................................................................................................................................

Investments......................................................................................................................................................................

Derivatives .......................................................................................................................................................................

Off-Balance Sheet Arrangements........................................................................................................................................

Insolvency Assessments ....................................................................................................................................................

Policyholder Liabilities........................................................................................................................................................

Liquidity and Capital Resources..........................................................................................................................................

Adoption of New Accounting Pronouncements ....................................................................................................................

Future Adoption of New Accounting Pronouncements ..........................................................................................................

Non-GAAP and Other Financial Disclosures .........................................................................................................................

Subsequent Events ...........................................................................................................................................................

Page

MetLife, Inc.

Forward-Looking Statements and Other Financial Information

For purposes of this discussion, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware corporation incorporated in
1999, its subsidiaries and affiliates. Following this summary is a discussion addressing the consolidated results of operations and financial
condition of the Company for the periods indicated. This discussion should be read in conjunction with “Note Regarding Forward-Looking
Statements,” “Selected Financial Data,” “Quantitative and Qualitative Disclosures About Market Risk” and the Company’s consolidated financial
statements included elsewhere herein, and “Risk Factors” included in the 2014 Form 10-K.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations 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 be identified by the fact that they do not relate
strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words
and terms of similar meaning, or are tied to future periods, in connection with a discussion of future operating or financial performance. In
particular, these include statements relating to future actions, prospective services or products, future performance or results of current and
anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and
financial results. Any or all forward-looking statements may turn out to be wrong. Actual results could differ materially from those expressed or
implied in the forward-looking statements. See “Note Regarding Forward-Looking Statements.”

This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes references to our performance
measures, operating earnings and operating earnings available to common shareholders, that are not based on GAAP. Operating earnings is the
measure of segment profit or loss we use to evaluate segment performance and allocate resources. Consistent with GAAP guidance for segment
reporting, operating earnings is our measure of segment performance. Operating earnings is also a measure by which senior management’s and
many other employees’ performance is evaluated for the purposes of determining their compensation under applicable compensation plans. See
“— Non-GAAP and Other Financial Disclosures” for definitions of these and other measures.

Executive Summary

Overview

MetLife is a global provider of life insurance, annuities, employee benefits and asset management. MetLife is organized into six segments,
reflecting three broad geographic regions: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively,
the “Americas”); Asia; and EMEA. In addition, the Company reports certain of its results of operations in Corporate & Other, which includes MLHL
and other business activities. See “Business — Segments and Corporate & Other” in the 2014 Form 10-K, “— Consolidated Company Outlook”
and Note 2 of the Notes to the Consolidated Financial Statements for further information on the Company’s segments and Corporate & Other.

During 2014, we experienced solid sales growth across all of our regions with strong sales of group life, dental and disability products, as well
as new product offerings. As a result of our continued focus on pricing discipline and risk management, sales of our variable annuity products
declined. During 2014, we benefited from higher investment income, driven by growth in our investment portfolio, as well as higher fee income,
primarily the result of improved equity market performance. Lower investment yields were driven by the sustained low interest rate environment;
however, we did benefit from a decrease in interest credited expenses. Derivative gains in 2014 were driven by changes in foreign currency
exchange rates and interest rates.

Years Ended December 31,

2014

2013

2012

(In millions)

Income (loss) from continuing operations, net of income tax .................................................. $

6,339

3,391

Less: Net investment gains (losses) ....................................................................................

Less: Net derivative gains (losses) ......................................................................................

Less: Goodwill impairment.................................................................................................

Less: Other adjustments to continuing operations (1)............................................................

Less: Provision for income tax (expense) benefit ..................................................................

Operating earnings ...........................................................................................................

Less: Preferred stock dividends .........................................................................................

(197)

1,317

—

(1,376)

(87)

6,682

122

161

(3,239)

—

(1,597)

1,683

6,383

122

Operating earnings available to common shareholders ......................................................... $

6,560

6,261

1,314

(352)

(1,919)

(1,868)

(2,492)

2,174

5,771

122

5,649

(1)

See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components
of such adjustments.

Year Ended December 31, 2014 Compared with the Year Ended December 31, 2013

During the year ended December 31, 2014, income (loss) from continuing operations, net of income tax, increased $2.9 billion over 2013. The
increase was predominantly due to a favorable change in net derivative gains (losses) of $4.6 billion ($3.0 billion, net of income tax) driven by
changes in interest rates and foreign currency exchange rates. This was offset by an unfavorable change in net investment gains (losses) of

MetLife, Inc.

$358 million ($233 million, net of income tax) primarily driven by a loss on the disposition of MAL. Income (loss) from continuing operations, before
provision for income tax also reflects a $262 million ($174 million, net of income tax) favorable change as a result of our annual assumption reviews
related to reserves and deferred policy acquisition costs (“DAC”).

Operating earnings available to common shareholders increased $299 million over 2013. This increase reflects higher net investment income
from portfolio growth, higher asset-based fee revenues and a decrease in interest credited expense, partially offset by unfavorable mortality,
morbidity and claims experience, as well as the impact of decreasing investment yields on net investment income. A tax reform bill was enacted in
Chile on September 29, 2014 which includes, among other things, a gradual increase in the corporate tax rate. Our Chilean businesses, including
ProVida, incurred a one-time tax charge of $41 million as a result of this legislation. Excluding the impact of this tax reform, the fourth quarter 2013
acquisition of ProVida increased operating earnings available to common shareholders by $166 million, net of income tax. Our 2014 results also
include:

(cid:129)

$104 million, net of income tax, of favorable reserve adjustments related to disability premium waivers in our retail life business;

a $32 million one-time tax benefit related to the filing of the Company’s U.S. federal tax return;

a $117 million, net of income tax, increase in our litigation reserve related to asbestos;

a $58 million non-tax deductible charge related to the Patient Protection and Affordable Care Act (“PPACA”), which, effective January 1,
2014, mandated that an annual fee be imposed on health insurers;

a charge of $57 million, net of income tax, related to delayed settlement interest on unclaimed funds held by state governments in our
retail life business; and

charges totaling $57 million, net of income tax, related to a settlement with the New York State Department of Financial Services (the
“Department of Financial Services”) and the District Attorney, New York County, regarding their respective inquiries into whether
American Life and DelAm conducted business in New York without a license and whether representatives acting on behalf of the
companies solicited, sold or negotiated insurance products in New York without a license.

Our 2013 results include:

(cid:129)

a $101 million, net of income tax, increase in our litigation reserve related to asbestos; and

a $57 million, net of income tax, reserve strengthening in Australia.

Year Ended December 31, 2013 Compared with the Year Ended December 31, 2012

During the year ended December 31, 2013, income (loss) from continuing operations, net of income tax, increased $2.1 billion over 2012. The
change was predominantly due to a non-cash charge in 2012 of $1.9 billion ($1.6 billion, net of income tax) for goodwill
impairment associated
with our U.S. Retail annuities business. In addition, operating earnings available to common shareholders increased by $612 million and net
investment gains (losses) increased by $513 million ($333 million, net of income tax) primarily due to an increase in net gains on sales of fixed
maturity securities in 2013 coupled with a decrease in impairments of fixed maturity securities. These increases were partially offset by an
unfavorable change in net derivatives gains (losses) of $1.3 billion ($858 million, net of income tax) driven by changes in interest rates and foreign
currency exchange rates. Also included in income (loss) from continuing operations, net of income tax, were the results of divested businesses,
which improved $448 million ($290 million, net of income tax) over 2012.

The increase in operating earnings available to common shareholders was primarily driven by higher asset-based fee revenues due to growth
in our average separate account assets and an increase in net investment income due to growth in our investment portfolio. The sustained low
interest rate environment negatively impacted investment yields; however, it also resulted in lower crediting rates. These favorable results were
partially offset by an increase in expenses. During the fourth quarter of 2013, we increased our litigation reserve related to asbestos by
$101 million, net of income tax. During 2013, we also increased our other litigation reserves by $46 million, net of income tax. The fourth quarter
2013 acquisition of ProVida in Chile increased operating earnings available to common shareholders by $48 million, net of income tax. In addition,
results for 2012 included a $52 million, net of income tax, charge representing a multi-state examination payment related to unclaimed property
and our use of the U.S. Social Security Administration’s Death Master File to identify potential life insurance claims, as well as the acceleration of
benefit payments to policyholders under the settlements of such claims.

Consolidated Company Outlook

As part of an enterprise-wide strategic initiative, we announced that, by 2016, we expected to increase our operating return on common
stockholders’ equity (“operating ROE”), excluding accumulated other comprehensive income (“AOCI”), to the 12% to 14% range, driven by higher
operating earnings. This target assumes that regulatory capital rules appropriately reflect the life insurance business model and that we have clarity
on the rules in a reasonable time frame, allowing for meaningful share repurchases prior to 2016. However, due to substantially lower share
repurchases, regulatory uncertainty regarding the designation of MetLife, Inc. as a non-bank SIFI, lower investment margins (primarily in the U.S.)
as a result of the sustained low interest rate environment and the impact on our foreign operations of the strengthening of the U.S. dollar, we
expect to be at the lower end of the 12% to 14% range.

Since we announced this strategic initiative, we have continued to expand our business outside of the U.S., thereby continuing to increase our
exposure to foreign currency fluctuations. In order to enhance the understanding of our performance in light of such expansion, we have
developed an additional method of calculating operating ROE that includes the impact of foreign currency translation adjustments (“FCTA”) in both
components of the ratio (operating earnings and equity). The original method of calculating operating ROE excludes all components of AOCI,
including FCTA; the new method refines the calculation by excluding AOCI other than FCTA. FCTA can have a positive or negative impact on
operating ROE depending on the strength of the U.S. dollar compared to other currencies. Reflecting FCTA in both components of the ratio
eliminates volatility in the ratio due to foreign currency fluctuations.

MetLife, Inc.

We expect to achieve our operating ROE target by primarily focusing on the following:

(cid:129)

Growth in premiums, fees and other revenues driven by:

–

Accelerated growth in Group, Voluntary & Worksite Benefits;

Increased fee revenue reflecting the benefit of higher equity markets on our separate account balances; and

Increases in our businesses outside of the U.S., notably accident & health, from continuing organic growth throughout our various
geographic regions and leveraging of our multichannel distribution network.

(cid:129)

Expanding our presence in emerging markets, including potential merger and acquisition activity. We expect that by 2016, 20% or more
of our operating earnings will come from emerging markets, with the acquisition of ProVida contributing to this increase. However, we
expect that the strengthening of the U.S. dollar and the increased earnings from the favorable U.S. equity markets could negatively
impact this ratio.

Disciplined underwriting. We see no significant changes to the underlying trends that drive underwriting results; however, unanticipated
catastrophes could result in a high volume of claims.

Expense management in the light of the low interest rate environment, and continued expense control throughout the Company.

Continued disciplined approach to investing and asset/liability management (“ALM”), through our enterprise risk and ALM governance
process.

Part of this strategic initiative has been to leverage our scale to improve the value we provide to customers and shareholders and achieve
$1 billion in annual efficiencies, up to $400 million of which will be reinvested in technology, platforms and functionality to improve our current
operations and develop new capabilities. We also continue to balance our product mix between protection products and more capital-intensive
products in order to maintain predictable operating earnings and cash flows. To this end, we introduced new variable annuity products and/or
enhancements in late 2014 and early 2015. We believe that 2014 will prove to be an inflection point for annuity sales and anticipate profitable
growth in 2015 and beyond.

Finally, effective January 1, 2015, we implemented certain segment reporting changes related to the measurement of segment operating
earnings. The changes will be applied retrospectively beginning with the first quarter of 2015 and will not impact total consolidated operating
earnings or net income. These changes include the following:

(cid:129)

Revise our capital allocation methodology. We expect this to have an impact on net investment income at the segment level, as well as
Corporate & Other;

Move certain tax benefits from Corporate & Other to the business segments. The impact will be almost entirely in the Retail segment;

Move our consumer direct business from Corporate & Other to the Latin America segment, which is where we report our sponsor direct
business; and

Change our expense allocation. This will primarily impact Corporate & Other and the EMEA segment.

Other Key Information

Basis of Presentation

Certain international subsidiaries have a fiscal year cutoff of November 30th. Accordingly, the Company’s consolidated financial statements
reflect the assets and liabilities of such subsidiaries as of November 30, 2014 and 2013 and the operating results of such subsidiaries for the
years ended November 30, 2014, 2013 and 2012. The Company is in the process of converting to calendar year reporting for these
subsidiaries. We expect to substantially complete these conversions by 2016. The impact of the conversions on our financial statements to date
has been de minimis and, therefore, has been reported in net income in the quarter of conversion.

Segment Information

In the first quarter of 2014, the Company entered into a definitive agreement to sell its wholly-owned subsidiary, MAL. The sale of MAL was
completed in May 2014. As a result, the operations of MAL have been classified as divested business for all periods presented. See Note 3 of
the Notes to the Consolidated Financial Statements. Consequently, the results for Corporate Benefit Funding decreased by $12 million, net of
$8 million of income tax, and $21 million, net of $13 million of income tax, for the years ended December 31, 2013 and 2012, respectively. Also,
the results for Corporate & Other decreased by $14 million, net of $7 million of income tax, and $16 million, net of $8 million of income tax, for
the years ended December 31, 2013 and 2012, respectively.

Significant Events

In November 2014, MICC, a wholly-owned subsidiary of MetLife, Inc., re-domesticated from Connecticut to Delaware, changed its name to
MetLife Insurance Company USA and merged with its subsidiary, MLI-USA, and its affiliate, MLIIC, each a U.S. insurance company that issued
variable annuity products in addition to other products, and Exeter, a former offshore, reinsurance subsidiary of MetLife, Inc. and affiliate of
MICC that mainly reinsured guarantees associated with variable annuity products. The surviving entity of the Mergers was MetLife USA. The
Mergers have provided increased transparency relative to our capital allocation and variable annuity risk management. In addition, the Company
expects that the Mergers (i) may mitigate to some degree the impact of any restrictions on the use of captive reinsurers that could be adopted
by insurance regulators by reducing our exposure to and use of captive reinsurers; and (ii) will reduce the reliance on MetLife, Inc. to fund
derivatives collateral requirements. See Note 8 of the Notes to the Consolidated Financial Statements for further information on the Mergers,

MetLife, Inc.

and see “Business — Regulation — U.S. Regulation — Insurance Regulation — Insurance Regulatory Examinations and Other Activities” in the
2014 Form 10-K and “— Liquidity and Capital Resources — The Company — Capital — Affiliated Captive Reinsurance Transactions” included
elsewhere herein for information on our use of captive reinsurers.

In the fourth quarter of 2013, MetLife, Inc. completed its acquisition of ProVida, the largest private pension fund administrator in Chile based
on assets under management and number of pension fund contributors. The acquisition of ProVida supports the Company’s growth strategy in
emerging markets and further strengthens the Company’s overall position in Chile. See Note 3 of the Notes to the Consolidated Financial
Statements.

In 2012, Superstorm Sandy made landfall

in the northeastern United States causing extensive property damage. MetLife’s property &
casualty business’ gross losses from Superstorm Sandy were approximately $150 million, before income tax. As of December 31, 2012, we
recognized total net losses related to the catastrophe of $90 million, net of
income tax and reinsurance recoverables and including
reinstatement premiums, which impacted the Retail and Group, Voluntary & Worksite Benefits segments. The Retail and Group, Voluntary &
Worksite Benefits segments recorded net losses related to the catastrophe of $49 million and $41 million, each net of income tax reinsurance
recoverables and reinstatement premiums, respectively. We did not incur any losses related to Superstorm Sandy in 2014 or 2013.

Industry Trends

We continue to be impacted by the unstable global financial and economic environment that has been affecting the industry.

Financial and Economic Environment

Our business and results of operations are materially affected by conditions in the global capital markets and the economy generally. Stressed
conditions, volatility and disruptions in global capital markets, particular markets, or financial asset classes can have an adverse effect on us, in
part because we have a large investment portfolio and our insurance liabilities are sensitive to changing market factors. Global market factors,
including interest rates, credit spreads, equity prices, real estate markets, foreign currency exchange rates, consumer spending, business
investment, government spending, the volatility and strength of the capital markets, deflation and inflation, all affect the business and economic
environment and, ultimately, the amount and profitability of our business. Disruptions in one market or asset class can also spread to other
markets or asset classes. Upheavals in the financial markets can also affect our business through their effects on general
levels of economic
activity, employment and customer behavior. While our diversified business mix and geographically diverse business operations partially mitigate
these risks, correlation across regions, countries and global market factors may reduce the benefits of diversification. Financial markets have also
been affected periodically by concerns over U.S. fiscal policy, although these concerns have abated since late 2013. However, unless long-term
steps are taken to raise the debt ceiling and reduce the federal deficit, rating agencies have warned of the possibility of future downgrades of U.S.
Treasury securities. These issues could, on their own, or combined with the possible slowing of the global economy generally, have severe
repercussions to the U.S. and global credit and financial markets, further exacerbate concerns over sovereign debt of other countries and disrupt
economic activity in the U.S. and elsewhere.

Concerns about the economic conditions, capital markets and the solvency of certain European Union (“EU”) member states, including
Portugal, Ireland, Italy, Greece and Spain (“Europe’s perimeter region”), and of financial institutions that have significant direct or indirect exposure
to debt issued by these countries, have been a cause of elevated levels of market volatility. More recently, economic conditions in Europe’s
perimeter region seem to be stabilizing or improving, as evidenced by the stabilization of credit ratings, particularly in Spain, Portugal and Ireland.
However, the election of a new government in Greece in January 2015 has renewed fears about the possibility of an exit of Greece from the Euro
zone. Such an event would have uncertain impacts on interest rates and risk markets. Greater European Central Bank (“ECB”) support, stronger
liquidity facilities and gradually improving macroeconomic conditions may mitigate the consequences of such exit on the rest of Europe. See
“— Investments — Current Environment” for information regarding our exposure to obligations of European governments and private obligors.

The financial markets have also been affected by concerns that other EU member states could experience similar financial troubles or that
some countries could default on their obligations, have to restructure their outstanding debt, or that financial institutions with significant holdings of
sovereign or private debt issued by borrowers in Europe’s perimeter region could experience financial stress, any of which could have significant
adverse effects on the European and global economies and on financial markets, generally. In September 2012, the ECB announced a new bond
buying program, Outright Monetary Transactions (“OMT”), intended to stabilize the European financial crisis. This program involves the potential
purchase by the ECB of sovereign bonds with maturities of one to three years. The OMT has not been activated to date, but the possibility of its
use by the ECB helped to lower sovereign yields in Europe’s perimeter region. However, in October 2014, the Court of Justice of the European
Union (“ECJ”) heard arguments relating to a lawsuit challenging the legality of the OMT. On January 14, 2015, the Advocate General of the ECJ
issued his opinion that the OMT is not necessarily outside of the mandate of the ECB; this opinion, however, is not binding on the ECJ. While the
later in 2015, the outcome could affect the ECB’s ability and willingness to purchase sovereign bonds and
ECJ’s decision is not expected until
strain economic stability in Europe.

In the second half of 2014, the ECB cut interest rates further, imposing a negative rate on bank deposits, and announcing additional
accommodative monetary policy measures in an effort to lessen the risk of deflation in the Euro zone. These measures included incentivizing banks
to extend loans and, in November 2014, buying private sector asset-backed securities and covered bonds. At its meeting on January 22, 2015,
the ECB expanded its current asset purchase program to €60 billion per month in bond purchases commencing in March 2015 through
September 2016. These initiatives are intended to counter the threat of deflation, lower borrowing costs in the Euro zone, encourage corporations
to issue more asset-backed securities and place pressure on the euro/U.S. dollar exchange rate. Economic growth in the Euro zone continues to
be weak, with concerns over low inflation becoming more pronounced as countries in Europe’s perimeter region in particular continue to pursue
policies to reduce their relative cost of production and reduce macroeconomic imbalances. In addition, concerns about the political and economic
stability of countries in regions outside the EU, including Ukraine, Russia, Argentina and the Middle East, have contributed to global market
volatility. See “Risk Factors — Economic Environment and Capital Markets-Related Risks — We Are Exposed to Significant Financial and Capital
Markets Risks Which May Adversely Affect Our Results of Operations, Financial Condition and Liquidity, and May Cause Our Net Investment
Income to Vary from Period to Period,” and “Risk Factors — Economic Environment and Capital Markets-Related Risks — If Difficult Conditions in

MetLife, Inc.

the Global Capital Markets and the Economy Generally Persist, They May Materially Adversely Affect Our Business and Results of Operations” in
the 2014 Form 10-K. See also “— Investments — Current Environment — Selected Country and Sector Investments” for information regarding our
investments in Ukraine, Russia, and Argentina.

We face substantial exposure to the Japanese economy given our operations there. Despite some recovery in gross domestic product (“GDP”)
growth and rising inflation in the first half of 2014, momentum has slowed. Meanwhile, structural weaknesses and debt sustainability have yet to be
addressed effectively, which leaves the economy vulnerable to further disruption. Going forward, Japan’s structural and demographic challenges
may continue to limit its potential growth unless reforms that boost productivity are put into place. Japan’s high public sector debt levels are
mitigated by low refinancing risks and its nominal yields on government debt have remained at a lower level than that of any other developed
country. However, frequent changes in government have prevented policy makers from implementing fiscal reform measures to put public finances
on a sustainable path. In January 2013, the government and the Bank of Japan pledged to strengthen policy coordination to end deflation and to
achieve sustainable economic growth. This was followed by the announcement of a supplementary budget stimulus program totaling 2% of GDP
and the adoption of a 2% inflation target by the Bank of Japan. In early April 2013, the Bank of Japan announced a new round of monetary easing
measures including increased government bond purchases at longer maturities. In October 2013, the government agreed to raise the consumption
tax from 5% to 8% effective April 1, 2014. This contributed to a decrease in the growth rate of the economy to a recessionary level, causing the
government to delay a planned increase in the consumption tax to 10% until 2017. On October 31, 2014, the Bank of Japan announced a
program to purchase larger quantities of government bonds. Such purchases are intended to keep borrowing costs low and the yen weak thereby
supporting economic growth. Despite continued weakness in the yen, inflation is not expected to rise materially given still weak GDP growth.
trajectory could continue to rise until a strategy to consolidate public finances and growth-enhancing reforms are
Japan’s public debt
implemented. On December 30, 2014, the government of Japan proposed a tax reform plan that, if enacted, would lower the Japanese tax rate by
approximately 2% effective April 1, 2015. If the tax reform plan is enacted in its current form, we expect to reflect the effects of the rate reduction,
currently estimated as $170 to $180 million, in our financial results in the period of enactment, most likely the second quarter of 2015. In addition,
we expect this tax law change will favorably affect our estimated annual effective tax rate for 2015 by approximately 0.2% as compared to 2014.

Impact of a Sustained Low Interest Rate Environment

As a global insurance company, we are affected by the monetary policy of central banks around the world, as well as the monetary policy of
the Federal Reserve Board in the United States. While the Federal Reserve Board has taken a number of actions in recent years to spur economic
activity by keeping interest rates low, the Federal Reserve Board may reverse this policy and begin raising rates sometime over the next two years,
at a pace which may have an impact on the pricing levels of risk-bearing investments, and may adversely impact the level of product sales.

On October 29, 2014, the Federal Reserve Board’s Federal Open Market Committee (“FOMC”), citing sufficient underlying strength in the
economy to support progress toward maximum employment and the substantial improvement in the outlook for labor market conditions since the
inception of its asset purchase program, decided to conclude the program. Most recently, on January 28, 2015, the FOMC reaffirmed that it
anticipates keeping the target range for the federal funds rate at 0 to 0.25%, subject to labor market conditions and inflation indicators and
expectations. The possibility of the Federal Reserve Board increasing the federal funds rate in the future may affect interest rates and risk markets
in the U.S. and other developed and emerging economies. However, the timing of any increases of the federal funds rate by the Federal Reserve
Board is uncertain and subject to change depending on the Federal Reserve Board’s assessment of economic growth, inflation and other risks.

Despite the end of the Federal Reserve Board’s quantitative easing program and the potential for future raises in interest rates in the U.S.,
central banks in other parts of the world, including the ECB and the Bank of Japan, have pursued accommodative monetary policies. See
“—Financial and Economic Environment.” However, we cannot predict with certainty the effect of these programs and policies on interest rates or
the impact on the pricing levels of risk-bearing investments at this time. See “— Investments — Current Environment.”

In periods of declining interest rates, we may have to invest insurance cash flows and reinvest the cash flows we received as interest or return
of principal on our investments in lower yielding instruments. Moreover, borrowers may prepay or redeem the fixed income securities, commercial,
agricultural or residential mortgage loans and mortgage-backed securities in our investment portfolio with greater frequency in order to borrow at
lower market rates. Therefore, some of our products expose us to the risk that a reduction in interest rates will reduce the difference between the
amounts that we are required to credit on contracts in our general account and the rate of return we are able to earn on investments intended to
support obligations under these contracts. This difference between interest earned and interest credited, or margin, is a key metric for the
management of, and reporting for, many of our businesses.

Our expectations regarding future margins are an important component impacting the amortization of certain intangible assets such as DAC
and value of business acquired (“VOBA”). Significantly lower margins may cause us to accelerate the amortization, thereby reducing net income in
the affected reporting period. Additionally, lower margins may also impact the recoverability of intangible assets such as goodwill, require the
liabilities or trigger loss recognition events on certain policyholder liabilities. We review this long-term margin
establishment of additional
assumption, along with other assumptions, as part of our annual assumption review.

Mitigating Actions

The Company continues to be proactive in its investment and interest crediting rate strategies, as well as its product design and product
mix. To mitigate the risk of unfavorable consequences from the low interest rate environment in the U.S., the Company applies disciplined ALM
strategies, including the use of derivatives, primarily interest rate swaps, floors and swaptions. A significant portion of these derivatives were
entered into prior to the onset of the current low U.S. interest rate environment. In some cases, the Company has entered into offsetting
positions as part of its overall ALM strategy and to reduce volatility in net income. Lowering interest crediting rates on some products, or
adjusting the dividend scale on traditional products, can help offset decreases in investment margins on some products. Our ability to lower
interest crediting rates could be limited by competition, requirements to obtain regulatory approval, or contractual guarantees of minimum rates
and may not match the timing or magnitude of changes in asset yields. As a result, our margins could decrease or potentially become negative.
We are able to limit or close certain products to new sales in order to manage exposures. Business actions, such as shifting the sales focus to
less interest rate sensitive products, can also mitigate this risk. In addition, the Company is well diversified across product, distribution, and

MetLife, Inc.

geography. Certain of our non-U.S. businesses, reported within our Latin America and EMEA segments, which accounted for approximately
16% of our operating earnings in 2014, are not significantly interest rate or market sensitive; in particular, they do not have any direct sensitivity
to U.S. interest rates. The Company’s primary exposure within these segments is insurance risk. We expect our non-U.S. businesses to grow
faster than our U.S. businesses and, over time, to become a larger percentage of our total business. As a result of the foregoing, the Company
expects to be able to substantially mitigate the negative impact of a sustained low interest rate environment in the U.S. on the Company’s
profitability. Based on a near to intermediate term analysis of a sustained lower interest rate environment in the U.S., the Company anticipates
operating earnings will continue to increase, although at a slower growth rate.

Interest Rate Stress Scenario

The following summarizes the impact of a hypothetical interest rate stress scenario on our operating earnings and the mark-to-market of our

derivative positions that do not qualify as accounting hedges assuming a continued low interest rate environment in the U.S.

The hypothetical interest rate stress scenario is based on a constant set of U.S. interest rates and credit spreads in the U.S., as compared
to our business plan interest rates and credit spreads, which are based on consensus interest rate view and credit spreads as of December
2014. For example, our business plan assumes a 10-year U.S. treasury rate of 2.17% at December 31, 2014 to rise during 2015 to 2.80% by
December 31, 2015 and rise to 3.52% by December 31, 2016. The hypothetical interest rate stress scenario assumes the 10-year treasury rate
to be 2.00% at December 31, 2014 and remain constant at that level until December 31, 2016. We make similar assumptions for interest rates
at other maturities, and hold this interest rate curve constant through December 31, 2016. In addition, in the interest rate stress scenario, we
assume credit spreads remain constant from December 2014 through the end of 2016, as compared to our business plan which assumes
rising credit spreads through 2015 and thereafter remaining constant through the end of 2016. Further, we also include the impact of low
interest rates on our pension and postretirement plan expenses. We allocate this impact across our segments and it is included in the segment
discussion below. The discount rate used to value these plans is tied to high quality corporate bond yields. Accordingly, an extended low
interest rate environment will result in increased pension and other postretirement benefit liabilities and expenses. Higher total return on the fixed
income portfolio of pension and other postretirement benefit plan assets will partially offset this increase in pension and other postretirement
plan liabilities.

Based on the above assumptions, we estimate an unfavorable impact on our consolidated operating earnings from the hypothetical U.S.

interest rate stress scenario of approximately $5 million in each of 2015 and 2016.

In addition to its impact on operating earnings, we estimated the effect of the hypothetical U.S. interest rate stress scenario on the mark-to-
market of our derivative positions that do not qualify as accounting hedges. We applied the hypothetical U.S. interest rate stress scenario to
these derivatives and compared the impact to that from interest rates in our business plan. We hold a significant position in long duration
receive-fixed interest rate swaps to hedge reinvestment risk. These swaps are most sensitive to the 30-year and 10-year swap rates and we
recognize gains as rates drop and recognize losses as rates rise. This estimated impact on the derivative mark-to-market does not include that
of our VA program derivatives as the impact of low interest rates in the freestanding derivatives would be largely offset by the mark-to-market in
net derivative gains (losses) for the related embedded derivative. See “— Results of Operations — Consolidated Results” for discussions on our
net derivative gains and losses.

Based on these additional assumptions, we estimate the impact of the hypothetical U.S. interest rate stress scenario on the mark-to-market
of our derivative positions that do not qualify as accounting hedges to be an increase in net income of $425 million and $300 million in 2015 and
2016, respectively.

Segments and Corporate & Other

The following discussion summarizes the impact of the above hypothetical U.S. interest rate stress scenario on the operating earnings of
our segments, as well as Corporate & Other. See also “— Policyholder Liabilities — Policyholder Account Balances” for information regarding
the account values subject to minimum guaranteed crediting rates.

Retail

Life & Other – Our interest rate sensitive products include traditional

life products through adjustments to the applicable dividend scale. In our universal

life, and retained asset accounts. Because the
life, universal
life insurance business is participating, we can largely offset lower investment returns on assets backing our
majority of our traditional
traditional
life products, we manage interest rate risk
through a combination of product design features and ALM strategies, including the use of hedges such as interest rate swaps and floors.
While we have the ability to lower crediting rates on certain in-force universal
life policies to mitigate margin compression, such actions
would be partially offset by increases in our liabilities related to policies with secondary guarantees. Our retained asset accounts have
minimum interest crediting rate guarantees which range from 0.5% to 4.0%, all of which are currently at their respective minimum interest
crediting rates. While we expect to experience margin compression as we re-invest at lower rates, the interest rate derivatives held in this
portfolio will partially mitigate this risk.

Annuities – The impact on operating earnings from margin compression is concentrated in our deferred annuities where there are
minimum interest rate guarantees. Under low U.S. interest rate scenarios, we assume that a larger percentage of customers will maintain
their funds with us to take advantage of the attractive minimum guaranteed crediting rates and we expect to experience margin
compression as we reinvest cash flows at lower interest rates. Partially offsetting this margin compression, we assume we will
lower
crediting rates on contractual reset dates for the portion of business that is not currently at minimum crediting rates. Additionally, we have
various derivative positions, primarily interest rate floors, to partially mitigate this risk.

Reinvestment risk is defined for this purpose as the amount of reinvestment in 2015 and 2016 that would impact operating earnings
due to reinvesting cash flows in the hypothetical U.S. interest rate stress scenario. For the deferred annuities business, $2.8 billion and
$2.6 billion in 2015 and 2016, respectively, of the asset base will be subject to reinvestment risk on an average asset base of $35.3 billion
and $36.0 billion in 2015 and 2016, respectively.

MetLife, Inc.

We estimate an unfavorable operating earnings impact on our Retail segment from the hypothetical U.S. interest rate stress scenario

discussed above of $5 million and $15 million in 2015 and 2016, respectively.

Group, Voluntary & Worksite Benefits

Group – In general, most of our group life insurance products in this segment are renewable term insurance and, therefore, have
significant repricing flexibility. Interest rate risk arises mainly from minimum interest rate guarantees on retained asset accounts. These
accounts have minimum interest crediting rate guarantees which range from 0.5% to 3.0%. All of these account balances are currently at
their respective minimum interest crediting rates and we would expect to experience margin compression as we reinvest at lower interest
rates. We have used interest rate floors to partially mitigate the risks of a sustained U.S. low interest rate environment. We also have
exposure to interest rate risk in this business arising from our group disability policy claim reserves. For these products, lower reinvestment
rates cannot be offset by a reduction in liability crediting rates for established claim reserves. Group disability policies are generally
renewable term policies. Rates may be adjusted on in-force policies at renewal based on the retrospective experience rating and current
interest rate assumptions. We review the discount rate assumptions and other assumptions associated with our long-term disability claim
reserves no less frequently than annually. Our most recent review at the end of 2014 resulted in no change to the applicable discount rates.

Voluntary & Worksite – We have exposure to interest rate risk in this business arising mainly from our long-term care (“LTC”) policy
reserves. For these products, lower reinvestment rates cannot be offset by a reduction in liability crediting rates for established claim
reserves. LTC policies are guaranteed renewable, and rates may be adjusted on a class basis with regulatory approval to reflect emerging
experience. Our LTC block is closed to new business. The Company makes use of derivative instruments to more closely match asset and
liability duration and immunize the portfolio against changes in interest rates. Reinvestment risk is defined for this purpose as the amount of
reinvestment in 2015 and 2016 that would impact operating earnings due to reinvesting cash flows in the hypothetical U.S. interest rate
stress scenario. For the LTC portfolio, $1.9 billion of the asset base in both 2015 and 2016 will be subject to reinvestment risk on an
average asset base of $9.8 billion and $10.5 billion in 2015 and 2016, respectively.

We estimate a favorable operating earnings impact on our Group, Voluntary & Worksite Benefits segment from the hypothetical U.S.

interest rate stress scenario discussed above of $5 million and $25 million in 2015 and 2016, respectively.

Corporate Benefit Funding

This segment contains both short and long duration products consisting of capital market products, pension closeouts, structured
settlements, and other benefit funding products. The majority of short duration products are managed on a floating rate basis, which
mitigates the impact of the low interest rate environment in the U.S. The long duration products have very predictable cash flows and we
have matched these cash flows through our ALM strategies. We also use interest rate swaps to help protect income in this segment
against a low interest rate environment in the U.S. Based on the cash flow estimates, only a small component is subject to reinvestment
risk. Reinvestment risk is defined for this purpose as the amount of reinvestment in 2015 and 2016 that would impact operating earnings
due to reinvesting cash flows in the hypothetical
interest rate stress scenario. For the long duration business, none of the asset base in
2015 will be subject to reinvestment risk on an average asset base of $58.6 billion. In 2016, $1 billion of the asset base will be subject to
reinvestment risk on an average asset base of $60.6 billion.

We estimate a favorable operating earnings impact on our Corporate Benefit Funding segment from the hypothetical U.S. interest rate

stress scenario discussed above of $25 million and $80 million in 2015 and 2016, respectively.

Asia

Our Asia segment has a portion of its investments in U.S. dollar denominated assets. The following describes the impact on our Asia

segment’s operating earnings under the hypothetical U.S. interest rate stress scenario.

Life & Other – Our Japan business offers traditional life insurance and accident & health products. To the extent the Japan life insurance
portfolio is U.S. interest rate sensitive and we are unable to lower crediting rates to the customer, operating earnings will decline. We
manage interest rate risk on our life products through a combination of product design features and ALM strategies.

Annuities – We sell annuities in Asia which are predominantly single premium products with crediting rates set at the time of issue. This

allows us to tightly manage product ALM, cash flows and net spreads, thus maintaining profitability.

We estimate an unfavorable operating earnings impact on our Asia segment from the hypothetical U.S. interest rate stress scenario

discussed above of $10 million and $25 million in 2015 and 2016, respectively.

Corporate & Other

Corporate & Other contains the surplus portfolios for the enterprise, the portfolios used to fund the capital needs of the Company and
various reinsurance agreements. The surplus portfolios are subject to reinvestment risk; however,
lower net investment income is
significantly offset by lower interest expense on both fixed and variable rate debt. Under a lower interest rate environment, fixed rate debt is
assumed to be either paid off when it matures or refinanced at a lower interest rate resulting in lower overall interest expense. Variable rate
debt is indexed to the three-month London Interbank Offered Rate (LIBOR), which results in lower interest expense incurred.

We estimate an unfavorable operating earnings impact on Corporate & Other from the hypothetical U.S. interest rate stress scenario

discussed above of $20 million and $70 million in 2015 and 2016, respectively.

MetLife, Inc.

Competitive Pressures

The life insurance industry remains highly competitive. The product development and product life cycles have shortened in many product
segments, leading to more intense competition with respect to product features. Larger companies have the ability to invest in brand equity,
product development, technology and risk management, which are among the fundamentals for sustained profitable growth in the life insurance
industry. In addition, several of the industry’s products can be quite homogeneous and subject to intense price competition. Sufficient scale,
financial strength and financial flexibility are becoming prerequisites for sustainable growth in the life insurance industry. Larger market participants
tend to have the capacity to invest in additional distribution capability and the information technology needed to offer the superior customer service
demanded by an increasingly sophisticated industry client base. We believe that the continued volatility of the financial markets, its impact on the
capital position of many competitors, and subsequent actions by regulators and rating agencies have altered the competitive environment. In
particular, we believe that these factors have highlighted financial strength as the most significant differentiator from the perspective of some
customers and certain distributors. We believe the Company is well positioned to compete in this environment.

Regulatory Developments

The U.S. life insurance industry is regulated primarily at the state level, with some products and services also subject to federal regulation. As
life insurers introduce new and often more complex products, regulators refine capital requirements and introduce new reserving standards for the
life insurance industry. Regulations recently adopted or currently under review can potentially impact the statutory reserve and capital requirements
of the industry. In addition, regulators have undertaken market and sales practices reviews of several markets or products, including equity-
indexed annuities, variable annuities and group products, as well as reviews of the utilization of affiliated captive reinsurers and offshore entities to
reinsure insurance risks.

The regulation of the global financial services industry has received renewed scrutiny as a result of the disruptions in the financial markets.
Significant regulatory reforms have been recently adopted and additional reforms proposed, and these or other reforms could be implemented.
See “Business — Regulation,” “Risk Factors — Regulatory and Legal Risks — Our Insurance and Brokerage Businesses Are Highly Regulated,
and Changes in Regulation and in Supervisory and Enforcement Policies May Reduce Our Profitability and Limit Our Growth,” “Risk Factors —
Risks Related to Our Business — Our Statutory Life Insurance Reserve Financings May Be Subject to Cost Increases and New Financings May Be
Subject to Limited Market Capacity,” and “Risk Factors — Regulatory and Legal Risks — Changes in U.S. Federal and State Securities Laws and
Regulations, and State Insurance Regulations Regarding Suitability of Annuity Product Sales, May Affect Our Operations and Our Profitability” in
the 2014 Form 10-K. For example, the Dodd-Frank Reform and Consumer Protection Act (“Dodd-Frank”), which was signed by President Obama
in July 2010, effected the most far-reaching overhaul of financial regulation in the U.S. in decades. The full impact of Dodd-Frank on us will depend
on the numerous rulemaking initiatives required or permitted by Dodd-Frank which are in various stages of implementation, many of which are not
likely to be completed for some time.

Mortgage and Foreclosure-Related Exposures

MetLife no longer engages in the origination, sale and servicing of forward and reverse residential mortgage loans. See Note 3 of the Notes to
the Consolidated Financial Statements for information regarding the Company’s exit from MetLife Bank businesses and Note 21 of the Notes to
the Consolidated Financial Statements for further information regarding our mortgage and foreclosure-related exposures.

Notwithstanding MetLife Bank’s exit

from the origination and servicing businesses, MLHL remains obligated to repurchase loans or
compensate for losses upon demand due to alleged defects by MetLife Bank or its predecessor servicers in past servicing of the loans and
material representations made in connection with MetLife Bank’s sale of the loans. Reserves for representation and warranty repurchases and
indemnifications were $85 million and $104 million at December 31, 2014 and 2013, respectively. Reserves for estimated future losses due to
alleged deficiencies on loans originated and sold, as well as servicing of the loans including servicing acquired, are estimated based on unresolved
claims and projected losses under investor servicing contracts where MetLife Bank’s past actions or inactions are likely to result in missing certain
stipulated investor timelines. Reserves for servicing defects were $38 million and $46 million at December 31, 2014 and 2013, respectively.
Management is satisfied that adequate provision has been made in the Company’s consolidated financial statements for those representation and
warranty obligations that are currently probable and reasonably estimable.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and
assumptions that affect amounts reported in the Consolidated Financial Statements. For a discussion of our significant accounting policies, see
Note 1 of the Notes to the Consolidated Financial Statements. The most critical estimates include those used in determining:

(i)

(ii)

liabilities for future policy benefits and the accounting for reinsurance;

capitalization and amortization of DAC and the establishment and amortization of VOBA;

(iii)

estimated fair values of investments in the absence of quoted market values;

(iv)

investment impairments;

(v)

estimated fair values of
bifurcation;

freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring

(vi) measurement of goodwill and related impairment;

(vii) measurement of employee benefit plan liabilities;

(viii) measurement of income taxes and the valuation of deferred tax assets; and

(ix)

liabilities for litigation and regulatory matters.

MetLife, Inc.

In addition, the application of acquisition accounting requires the use of estimation techniques in determining the estimated fair values of assets
acquired and liabilities assumed — the most significant of which relate to aforementioned critical accounting estimates. In applying our accounting
policies, we make subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these
policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to our business and
operations. Actual results could differ from these estimates.

Liability for Future Policy Benefits

Generally, future policy benefits are payable over an extended period of time and related liabilities are calculated as the present value of future
expected benefits to be paid, reduced by the present value of future expected premiums. Such liabilities are established based on methods and
underlying assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of liabilities
for future policy benefits are mortality, morbidity, policy lapse, renewal, retirement, disability incidence, disability terminations, investment returns,
inflation, expenses and other contingent events as appropriate to the respective product type and geographical area. These assumptions are
established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. Utilizing
these assumptions, liabilities are established on a block of business basis. If experience is less favorable than assumed, additional liabilities may be
established, resulting in a charge to policyholder benefits and claims.

Future policy benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as to

claim terminations, expenses and interest.

Liabilities for unpaid claims are estimated based upon our historical experience and other actuarial assumptions that consider the effects of

current developments, anticipated trends and risk management programs, reduced for anticipated salvage and subrogation.

Future policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity contracts are based on estimates of
the expected value of benefits in excess of the projected account balance, recognizing the excess ratably over the accumulation period based on
total expected assessments. Liabilities for universal and variable life policies with secondary guarantees (“ULSG”) and paid-up guarantees are
determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those
benefits ratably over the accumulation period based on total expected assessments. The assumptions used in estimating the secondary and paid-
up guarantee liabilities are consistent with those used for amortizing DAC, and are thus subject to the same variability and risk. The assumptions of
investment performance and volatility for variable products are consistent with historical experience of the appropriate underlying equity index,
such as the S&P 500 Index.

We regularly review our estimates of liabilities for future policy benefits and compare them with our actual experience. Differences between
actual experience and the assumptions used in pricing these policies and guarantees, as well as in the establishment of the related liabilities, result
in variances in profit and could result in losses.

See Note 4 of the Notes to the Consolidated Financial Statements for additional information on our liability for future policy benefits.

Reinsurance

Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the
underlying business and the potential impact of counterparty credit risks. We periodically review actual and anticipated experience compared to
the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluate the financial
strength of counterparties to our reinsurance agreements using criteria similar to that evaluated in our security impairment process. See
“— Investment Impairments.” Additionally, for each of our reinsurance agreements, we determine whether the agreement provides indemnification
against loss or liability relating to insurance risk, in accordance with applicable accounting standards. We review all contractual features, including
those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. If we
determine that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, we
record the agreement using the deposit method of accounting.

See Note 6 of the Notes to the Consolidated Financial Statements for additional information on our reinsurance programs.

Deferred Policy Acquisition Costs and Value of Business Acquired

We incur significant costs in connection with acquiring new and renewal

insurance business. Costs that relate directly to the successful
acquisition or renewal of insurance contracts are deferred as DAC. In addition to commissions, certain direct-response advertising expenses and
other direct costs, deferrable costs include the portion of an employee’s total compensation and benefits related to time spent selling, underwriting
insurance business only with respect to actual policies acquired or renewed. We utilize various
or processing the issuance of new and renewal
techniques to estimate the portion of an employee’s time spent on qualifying acquisition activities that result in actual sales, including surveys,
interviews, representative time studies and other methods. These estimates include assumptions that are reviewed and updated on a periodic
basis or more frequently to reflect significant changes in processes or distribution methods.

VOBA represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in force
at the acquisition date. For certain acquired blocks of business, the estimated fair value of the in-force contract obligations exceeded the book
value of assumed in-force insurance policy liabilities, resulting in negative VOBA, which is presented separately from VOBA as an additional
insurance liability included in other policy-related balances. The estimated fair value of the acquired liabilities is based on projections, by each block
of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating
expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from
these projections. The recovery of DAC and VOBA is dependent upon the future profitability of the related business.

MetLife, Inc.

impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by
short-term market fluctuations, but is only changed when sustained interim deviations are expected. We monitor these events and only change the
assumption when our long-term expectation changes. The effect of an increase (decrease) by 100 basis points in the assumed future rate of return
is reasonably likely to result in a decrease (increase) in the DAC and VOBA amortization of approximately $198 million, with an offset to our
unearned revenue liability of approximately $22 million for this factor. We use a mean reversion approach to separate account returns where the
mean reversion period is five years with a long-term separate account return after the five-year reversion period is over. The current long-term rate
of return assumption for the variable universal life contracts and variable deferred annuity contracts is 7.25%.

We also periodically review other long-term assumptions underlying the projections of estimated gross margins and profits. These assumptions
primarily relate to investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, and expenses to administer
business. Assumptions used in the calculation of estimated gross margins and profits which may have significantly changed are updated annually.
If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will decrease, resulting in
a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits
to decrease.

Our most significant assumption updates resulting in a change to expected future gross margins and profits and the amortization of DAC and
VOBA are due to revisions to expected future investment returns, expenses, in-force or persistency assumptions and policyholder dividends on
participating traditional life contracts, variable and universal life contracts and annuity contracts. We expect these assumptions to be the ones most
reasonably likely to cause significant changes in the future. Changes in these assumptions can be offsetting and we are unable to predict their
movement or offsetting impact over time.

At December 31, 2014, 2013 and 2012, DAC and VOBA for the Company was $24.4 billion, $26.7 billion and $24.8 billion, respectively.
Amortization of DAC and VOBA associated with the variable and universal life and the annuity contracts was significantly impacted by movements
in equity markets. The following illustrates the effect on DAC and VOBA of changing each of the respective assumptions, as well as updating
estimated gross margins or profits with actual gross margins or profits during the years ended December 31, 2014, 2013 and 2012. Increases
(decreases) in DAC and VOBA balances, as presented below, resulted in a corresponding decrease (increase) in amortization.

Years Ended December 31,

2014

2013

(In millions)

2012

Investment return ....................................................................................................... $

(45) $

(66) $

(161)

Separate account balances .........................................................................................

Net investment gain (loss)............................................................................................

Guaranteed minimum income benefits..........................................................................

Expense ....................................................................................................................

In-force/Persistency....................................................................................................

Policyholder dividends and other..................................................................................

(42)

(63)

(74)

157

195

337

Total ...................................................................................................................... $

(63) $

739

(44)

368

(4)

231

The following represent significant items contributing to the changes to DAC and VOBA amortization in 2014:

(cid:129)

The increase in equity markets during the year increased separate account balances, which led to higher actual and expected future
gross profits on variable universal life contracts and variable deferred annuity contracts resulting in a decrease of $43 million in DAC and
VOBA amortization.

(cid:129)

Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization.

–

Actual gross profits decreased as a result of an increase in liabilities associated with guarantee obligations on variable annuities,
resulting in a decrease of DAC and VOBA amortization of $118 million, excluding the impact from our nonperformance risk and risk
margins, which are described below. This decrease in actual gross profits was more than offset by freestanding derivative gains
associated with the hedging of such guarantee obligations, which resulted in an increase in DAC and VOBA amortization of
$219 million.

The widening of the Company’s nonperformance risk adjustment decreased the valuation of guaranteed liabilities, increased actual
gross profits and increased DAC and VOBA amortization by $44 million. This was more than offset by the higher risk margins,
which increased the guarantee liability valuations, decreased actual gross profits and decreased DAC and VOBA amortization by
$53 million.

The remainder of the impact of net investment gains (losses), which decreased DAC and VOBA amortization by $50 million, was
primarily attributable to 2014 investment activities.

The change in current and future projected guaranteed minimum income benefits (“GMIBs”) liability resulted in an increase to DAC
amortization of $63 million.

Better than expected persistency and changes in assumptions regarding persistency caused an increase in actual and expected future
gross profits resulting in a net decrease in DAC and VOBA amortization of $94 million.

(cid:129)

MetLife, Inc.

The following represent significant items contributing to the changes to DAC and VOBA amortization in 2013:

(cid:129)

Changes in net investment gains (losses) resulted in the following changes in DAC and VOBA amortization:

–

Actual gross profits increased as a result of a decrease in liabilities associated with guarantee obligations on variable annuities,
resulting in an increase of DAC and VOBA amortization of $1.1 billion, excluding the impact from our nonperformance risk and risk
margins, which are described below. This increase in actual gross profits was more than offset by freestanding derivative losses
associated with the hedging of such guarantee obligations, which resulted in a decrease in DAC and VOBA amortization of $1.2
billion.

The tightening of our nonperformance risk adjustment increased the valuation of guarantee liabilities, decreased actual gross profits
and decreased DAC and VOBA amortization by $94 million. This was partially offset by lower risk margins, which decreased the
guarantee liability valuations, increased actual gross profits and increased DAC and VOBA amortization by $60 million.

The remainder of the impact of net investment gains (losses), which decreased DAC and VOBA amortization by $72 million, was
primarily attributable to 2013 investment activities.

(cid:129)

The hedging and reinsurance losses associated with the insurance liabilities of the GMIBs decreased actual gross profits and decreased
DAC and VOBA amortization by $349 million.

The following represent significant items contributing to the changes to DAC and VOBA amortization in 2012:

(cid:129)

The increase in actual, as well as changes in projected, investment returns resulted in an increase in actual and a reduction in expected
future gross profits on variable universal life contracts and variable deferred annuity contracts resulting in an increase of $161 million in
DAC and VOBA amortization.

Better than expected persistency and changes in assumptions regarding persistency, especially in the U.S. deferred variable annuity
contracts, resulted in an increase in actual and expected future gross profits resulting in a decrease of $368 million in DAC and VOBA
amortization.

Our DAC and VOBA balance is also impacted by unrealized investment gains (losses) and the amount of amortization which would have been
recognized if such gains and losses had been realized. The increase in unrealized investment gains (losses) decreased the DAC and VOBA balance
by $702 million in 2014, while the change in unrealized investment gains increased the DAC and VOBA balance by $1.3 billion and decreased the
DAC and VOBA balance by $713 million in 2013 and 2012, respectively. See Notes 5 and 8 of the Notes to the Consolidated Financial Statements
for information regarding the DAC and VOBA offset to unrealized investment losses.

Estimated Fair Value of Investments

In determining the estimated fair value of our investments, fair values are based on unadjusted quoted prices for identical investments in active
markets that are readily and regularly obtainable. When such quoted prices are not available, fair values are based on quoted prices in markets that
are not active, quoted prices for similar but not identical investments, or other observable inputs. If these inputs are not available, or observable
inputs are not determinable, unobservable inputs and/or adjustments to observable inputs requiring management judgment are used to determine
the estimated fair value of investments.

The methodologies, assumptions and inputs utilized are described in Note 10 of the Notes to the Consolidated Financial Statements.

Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset
liquidity. Our ability to sell investments, or the price ultimately realized for investments, depends upon the demand and liquidity in the market and
increases the use of judgment in determining the estimated fair value of certain investments.

Investment Impairments

One of the significant estimates related to available-for-sale (“AFS”) securities is our impairment evaluation. The assessment of whether an
other-than-temporary impairment (“OTTI”) occurred is based on our case-by-case evaluation of the underlying reasons for the decline in estimated
fair value on a security-by-security basis. Our review of each fixed maturity and equity security for OTTI includes an analysis of gross unrealized
losses by three categories of severity and/or age of gross unrealized loss. An extended and severe unrealized loss position on a fixed maturity
security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments. Accordingly, such an
unrealized loss position may not impact our evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least
equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for certain equity securities,
greater weight and consideration are given to a decline in estimated fair value and the likelihood such estimated fair value decline will recover.

Additionally, we consider a wide range of factors about the security issuer and use our best judgment in evaluating the cause of the decline in
the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in our evaluation of the security are
assumptions and estimates about the operations of the issuer and its future earnings potential. Factors we consider in the OTTI evaluation process
are described in Note 8 of the Notes to the Consolidated Financial Statements.

The determination of the amount of allowances and impairments on the remaining invested asset classes is highly subjective and is based
upon our periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and
assessments are revised as conditions change and new information becomes available.

MetLife, Inc.

See Notes 1 and 8 of the Notes to the Consolidated Financial Statements for additional information relating to our determination of the amount

of allowances and impairments.

Derivatives

The determination of estimated fair value of freestanding derivatives, when quoted market values are not available, is based on market
standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when
pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit
spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. See Note 10
of the Notes to the Consolidated Financial Statements for additional details on significant inputs into the over-the-counter (“OTC”) derivative pricing
models and credit risk adjustment.

We issue variable annuity products with guaranteed minimum benefits, some of which are embedded derivatives measured at estimated fair
value separately from the host variable annuity product, with changes in estimated fair value reported in net derivative gains (losses). The estimated
fair values of these embedded derivatives are determined based on the present value of projected future benefits minus the present value of
projected future fees. The projections of future benefits and future fees require capital market and actuarial assumptions, including expectations
concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash flows from the guarantees are projected
under multiple capital market scenarios using observable risk-free rates. The valuation of these embedded derivatives also includes an adjustment
for our nonperformance risk and risk margins for non-capital market inputs. The nonperformance risk adjustment, which is captured as a spread
over the risk-free rate in determining the discount rate to discount the cash flows of the liability, is determined by taking into consideration publicly
available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable
spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries
compared to MetLife, Inc. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional
compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. The
establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital
needed to cover the guarantees.

The table below illustrates the impact that a range of reasonably likely variances in credit spreads would have on our consolidated balance
sheet, excluding the effect of income tax, related to the embedded derivative valuation on certain variable annuity products measured at estimated
fair value. However, these estimated effects do not take into account potential changes in other variables, such as equity price levels and market
volatility, which can also contribute significantly to changes in carrying values. Therefore, the table does not necessarily reflect the ultimate impact
on the consolidated financial statement under the credit spread variance scenarios presented below.

In determining the ranges, we have considered current market conditions, as well as the market level of spreads that can reasonably be
anticipated over the near term. The ranges do not reflect extreme market conditions experienced during the financial crisis as we do not consider
those to be reasonably likely events in the near future.

Changes in Balance Sheet Carrying Value At
December 31, 2014

Policyholder
Account Balances

DAC and VOBA

100% increase in our credit spread............................................................................................. $

As reported .............................................................................................................................. $

50% decrease in our credit spread (1) ......................................................................................... $

(In millions)

(413) $

(146) $

— $

(593)

(557)

(537)

(1) Results in less than a $1 million impact to policyholder account balances.

The accounting for derivatives is complex and interpretations of accounting standards continue to evolve in practice. If it is determined that
hedge accounting designations were not appropriately applied, reported net income could be materially affected. Assessments of hedge
effectiveness and measurements of ineffectiveness of hedging relationships are also subject to interpretations and estimations and different
interpretations or estimates may have a material effect on the amount reported in net income.

Variable annuities with guaranteed minimum benefits may be more costly than expected in volatile or declining equity markets. Market
conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates, changes in
our nonperformance risk, variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital
market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income. If
interpretations change, there is a risk that features previously not bifurcated may require bifurcation and reporting at estimated fair value in the
consolidated financial statements and respective changes in estimated fair value could materially affect net income.

Additionally, we ceded the risk associated with certain of the variable annuities with guaranteed minimum benefits described in the preceding
paragraphs. The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously
for the guarantees directly written by us with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. Because
certain of the direct guarantees do not meet the definition of an embedded derivative and, thus are not accounted for at fair value, significant
fluctuations in net income may occur since the change in fair value of the embedded derivative on the ceded risk is being recorded in net income
without a corresponding and offsetting change in fair value of the direct guarantee.

See Note 9 of the Notes to the Consolidated Financial Statements for additional information on our derivatives and hedging programs.

MetLife, Inc.

Goodwill

is tested for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business

climate, indicate that there may be justification for conducting an interim test.

For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, the implied fair value of the
reporting unit goodwill is compared to the carrying value of that goodwill to measure the amount of impairment loss, if any. In such instances, the
implied fair value of the goodwill is determined in the same manner as the amount of goodwill that would be determined in a business acquisition.
for impairment by either performing a qualitative assessment or a two-step quantitative test. The qualitative
The Company tests goodwill
assessment is an assessment of historical information and relevant events and circumstances to determine whether it is more likely than not that
the fair value of a reporting unit is less than its carrying amount, including goodwill. The Company may elect not to perform the qualitative
assessment for some or all of its reporting units and instead perform a two-step quantitative impairment test. In performing the two-step
quantitative impairment test, the Company may use a market multiple valuation approach and a discounted cash flow valuation approach. For
reporting units which are particularly sensitive to market assumptions, the Company may use additional valuation methodologies to estimate the
reporting units’ fair values. The key inputs, judgments and assumptions necessary in determining estimated fair value of the reporting units include
projected operating earnings, current book value, the level of economic capital required to support the mix of business, long-term growth rates,
comparative market multiples, the account value of in-force business, projections of new and renewal business, as well as margins on such
business, the level of interest rates, credit spreads, equity market levels, and the discount rate that we believe is appropriate for the respective
reporting unit.

Effective January 1, 2015, the Company implemented certain segment reporting changes, which were approved by the chief operating
decision maker in the fourth quarter of 2014. As a result, goodwill was re-tested for impairment during the fourth quarter of 2014 using estimated
revised carrying amounts of the reporting units. The Company concluded that the fair values of all reporting units were in excess of their carrying
value and, therefore, goodwill was not impaired. See Note 2 of the Notes to the Consolidated Financial Statements.

During the 2014 and 2013 annual goodwill

impairment tests, we concluded that the fair values of all reporting units were in excess of their

carrying values and, therefore, goodwill was not impaired.

In 2012, we performed the annual goodwill

impairment test on our Retail Annuities reporting unit using both the market multiple and
discounted cash flow valuation approaches. Results for both approaches indicated that the fair value of the Retail Annuities reporting unit was
below its carrying value. As a result, an actuarial appraisal, which estimates the net worth of the reporting unit, the value of existing business and
the value of new business, was performed. This appraisal resulted in a fair value of the Retail Annuities reporting unit that was less than the carrying
value, indicating a potential for goodwill
impairment. The actuarial appraisal reflected the expected market impact to a buyer of changes in the
regulatory environment, continued low interest rates for an extended period of time, and other market and economic factors. We performed Step 2
of the goodwill
impairment process, which compares the implied fair value of the reporting unit’s goodwill with its carrying value. This analysis
indicated that the recorded goodwill associated with this reporting unit was not recoverable. Therefore, we recorded a non-cash charge of
$1.9 billion ($1.6 billion, net of income tax) for the impairment of the entire goodwill balance that is reported in goodwill
impairment in the
consolidated statements of operations and comprehensive income for the year ended December 31, 2012.

We apply significant judgment when determining the estimated fair value of our reporting units and when assessing the relationship of market
capitalization to the aggregate estimated fair value of our reporting units. The valuation methodologies utilized are subject to key judgments and
assumptions that are sensitive to change. Estimates of fair value are inherently uncertain and represent only management’s reasonable expectation
regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all
likelihood,
differ in some respects from actual future results. Declines in the estimated fair value of our reporting units could result in goodwill impairments in
future periods which could materially adversely affect our results of operations or financial position.

See Note 11 of the Notes to the Consolidated Financial Statements for additional information on our goodwill.

Employee Benefit Plans

Certain subsidiaries of MetLife, Inc. sponsor and/or administer various plans that provide defined benefit pension and other postretirement
benefits covering eligible employees and sales representatives. The calculation of the obligations and expenses associated with these plans
requires an extensive use of assumptions such as the discount rate, expected rate of return on plan assets, rate of future compensation increases
and healthcare cost trend rates, as well as assumptions regarding participant demographics such as rate and age of retirements, withdrawal rates
and mortality. In consultation with external actuarial firms, we determine these assumptions based upon a variety of factors such as historical
experience of the plan and its assets, currently available market and industry data, and expected benefit payout streams.

We determine the expected rate of return on plan assets based upon an approach that considers inflation, real return, term premium, credit
spreads, equity risk premium and capital appreciation, as well as expenses, expected asset manager performance, asset weights and the effect of
rebalancing. Given the amount of plan assets as of December 31, 2013, the beginning of the measurement year, if we had assumed an expected
rate of return for both our pension and other postretirement benefit plans that was 100 basis points higher or 100 basis points lower than the rates
we assumed, the change in our net periodic benefit costs would have been a decrease of $92 million and an increase of $92 million, respectively,
in 2014. This considers only changes in our assumed long-term rate of return given the level and mix of invested assets at the beginning of the
year, without consideration of possible changes in any of the other assumptions described above that could ultimately accompany any changes in
our assumed long-term rate of return.

We determine the discount rates used to value the pension and postretirement obligations, based upon rates commensurate with current
yields on high quality corporate bonds. Given our pension and postretirement obligations as of December 31, 2013, the beginning of the
measurement year, if we had assumed a discount rate for both our pension and postretirement benefit plans that was 100 basis points higher or
100 basis points lower than the rates we assumed, the change in our net periodic benefit costs would have been a decrease of $130 million and
an increase of $144 million, respectively, in 2014. This considers only changes in our assumed discount rates without consideration of possible

MetLife, Inc.

changes in any of the other assumptions described above that could ultimately accompany any changes in our assumed discount rate. The
assumptions used may differ materially from actual results due to, among other factors, changing market and economic conditions and changes in
participant demographics. These differences may have a significant effect on the Company’s consolidated financial statements and liquidity.

See Note 18 of the Notes to the Consolidated Financial Statements for additional discussion of assumptions used in measuring liabilities

relating to our employee benefit plans.

Income Taxes

We provide for federal, state and foreign income taxes currently payable, as well as those deferred due to temporary differences between the
financial reporting and tax bases of assets and liabilities. Our accounting for income taxes represents our best estimate of various events and
transactions. These tax laws are complex and are subject to differing interpretations by the taxpayer and the relevant governmental taxing
authorities. In establishing a provision for income tax expense, we must make judgments and interpretations about the application of these
inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax
jurisdictions, both domestic and foreign.

The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods
under the tax law in the applicable tax jurisdiction. Valuation allowances are established when management determines, based on available
information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining
whether valuation allowances should be established, as well as the amount of such allowances. When making such determination, the Company
considers many factors, including:

(i)

(ii)

(iii)

(iv)

(v)

(vi)

the nature, frequency, and amount of cumulative financial reporting income and losses in recent years;

the jurisdiction in which the deferred tax asset was generated;

the length of time that carryforwards can be utilized in the various taxing jurisdiction;

future taxable income exclusive of reversing temporary differences and carryforwards;

future reversals of existing taxable temporary differences;

taxable income in prior carryback years; and

(vii)

tax planning strategies.

Disputes over interpretations of the tax laws may be subject to review and adjudication by the court systems of the various tax jurisdictions or
may be settled with the taxing authority upon audit. We determine whether it is more likely than not that a tax position will be sustained upon
examination by the appropriate taxing authorities before any part of the benefit is recorded in the financial statements. We may be required to
change our provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change, or
when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, future events, such as changes in tax laws,
tax regulations, or interpretations of such laws or regulations, could have an impact on the provision for income tax and the effective tax rate. Any
such changes could significantly affect the amounts reported in the financial statements in the year these changes occur.

See Note 19 of the Notes to the Consolidated Financial Statements for additional information on our income taxes.

Litigation Contingencies

We are a party to a number of legal actions and are involved in a number of regulatory investigations. Given the inherent unpredictability of
these matters, it is difficult to estimate the impact on our financial position. Liabilities are established when it is probable that a loss has been
incurred and the amount of the loss can be reasonably estimated. Liabilities related to certain lawsuits, including our asbestos-related liability, are
especially difficult to estimate due to the limitation of available data and uncertainty regarding numerous variables that can affect liability estimates.
The data and variables that impact the assumptions used to estimate our asbestos-related liability include the number of future claims, the cost to
resolve claims, the disease mix and severity of disease in pending and future claims, the impact of the number of new claims filed in a particular
jurisdiction and variations in the law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts
to allow plaintiffs to pursue claims against us when exposure to asbestos took place after the dangers of asbestos exposure were well known, and
the impact of any possible future adverse verdicts and their amounts. On a quarterly and annual basis, we review relevant information with respect
to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected in our consolidated financial statements. It is
possible that an adverse outcome in certain of our litigation and regulatory investigations, including asbestos-related cases, or the use of different
assumptions in the determination of amounts recorded could have a material effect upon our consolidated net income or cash flows in particular
quarterly or annual periods.

See Note 21 of the Notes to the Consolidated Financial Statements for additional

information regarding our assessment of

litigation

contingencies.

Economic Capital

Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a
is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in our

basis upon which capital
business.

Our economic capital model aligns segment allocated equity with emerging standards and consistent risk principles. The model applies
statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include

MetLife, Inc.

calibrating required economic capital shock factors to a specific confidence level and time horizon and applying an industry standard method for
the inclusion of diversification benefits among risk types. Economic capital-based risk estimation is an evolving science and industry best practices
have emerged and continue to evolve. Areas of evolving industry best practices include stochastic liability valuation techniques, alternative
methodologies for the calculation of diversification benefits, and the quantification of appropriate shock levels.

For our domestic segments, net investment income is credited or charged based on the level of allocated equity; however, changes in
allocated equity do not impact our consolidated net investment income, operating earnings or income (loss) from continuing operations, net of
income tax.

Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios adjusted for allocated
equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the
amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.

MetLife management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach
periodically to ensure that it remains consistent with emerging industry practice standards. See “— Executive Summary — Consolidated Company
Outlook” for information regarding the change in our capital allocation methodology.

Acquisitions and Dispositions

In July 2014, all regulatory approvals necessary to establish the previously announced life insurance joint venture in Vietnam among MetLife,
Inc. (through MetLife Limited), Joint Stock Commercial Bank for Investment & Development of Vietnam and Bank for Investment & Development of
Vietnam Insurance Joint Stock Corporation were received. Operations of the joint venture (BIDV MetLife Life Insurance Limited Liability Company)
commenced in the fourth quarter of 2014.

In April 2014, MetLife, Inc. and Malaysia’s AMMB Holdings Bhd (“AMMB”) successfully completed the formation of their previously announced
strategic partnership, in which each now holds approximately 50% of both AmMetLife Insurance Berhad and AmMetTakaful Berhad, each of which
became parties to exclusive 20-year distribution agreements with AMMB bank affiliates.

See Note 3 of the Notes to the Consolidated Financial Statements for further information regarding the Company’s acquisitions and

dispositions.

MetLife, Inc.

Results of Operations

Consolidated Results

Sales experience was mixed across our businesses for the year ended December 31, 2014 as compared to 2013. With the slow and steady
economic recovery in the U.S., our group term life, dental and disability businesses generated premium growth through stronger sales and
improved persistency, with the dental business also benefiting from the positive impact of pricing actions on existing business. The introduction of
new products also drove growth in our voluntary benefits business. The sustained low interest rate environment has contributed to the
underfunding of pension plans; as a result, we experienced a decrease in sales of pension closeouts. Competitive pricing and a relative increase in
participation drove an increase in structured settlement sales. Sales of domestic variable annuities declined as we continued to focus on pricing
discipline and risk management. Sales in the majority of our other businesses abroad improved. In our Retail segment, higher fixed and indexed
annuity sales were partially offset by lower sales of life products, mainly driven by the discontinuance of our lifetime secondary guarantees on
universal life products.

Years Ended December 31,

2014

2013

(In millions)

2012

Revenues

Premiums .................................................................................................................. $

39,067

37,674

Universal life and investment-type product policy fees ....................................................

Net investment income ...............................................................................................

Other revenues ..........................................................................................................

Net investment gains (losses).......................................................................................

Net derivative gains (losses) .........................................................................................

Total revenues ........................................................................................................

Expenses

Policyholder benefits and claims and policyholder dividends ...........................................

Interest credited to policyholder account balances .........................................................

Goodwill impairment ...................................................................................................

Capitalization of DAC ..................................................................................................

Amortization of DAC and VOBA ...................................................................................

Amortization of negative VOBA ....................................................................................

Interest expense on debt.............................................................................................

Other expenses..........................................................................................................

Total expenses .......................................................................................................

Income (loss) from continuing operations before provision for income tax .........................

Provision for income tax expense (benefit).....................................................................

Income (loss) from continuing operations, net of income tax............................................

Income (loss) from discontinued operations, net of income tax ........................................

Net income (loss) ....................................................................................................

Less: Net income (loss) attributable to noncontrolling interests ........................................

Net income (loss) attributable to MetLife, Inc. ................................................................

Less: Preferred stock dividends ...................................................................................

9,946

21,153

2,030

(197)

1,317

73,316

40,478

6,943

—

(4,183)

4,132

(442)

1,216

16,368

64,512

8,804

2,465

6,339

(3)

6,336

6,309

122

9,451

22,232

1,920

161

(3,239)

68,199

39,366

8,179

—

(4,786)

3,550

(579)

1,282

17,135

64,147

4,052

661

3,391

3,393

3,368

122

Net income (loss) available to MetLife, Inc.’s common shareholders ............................. $

6,187

3,246

37,975

8,556

21,984

1,906

(352)

(1,919)

68,150

39,356

7,729

1,868

(5,289)

4,199

(622)

1,356

18,111

66,708

1,442

128

1,314

1,362

1,324

122

1,202

Year Ended December 31, 2014 Compared with the Year Ended December 31, 2013

During the year ended December 31, 2014, income (loss) from continuing operations, before provision for income tax, increased $4.8 billion
($2.9 billion, net of income tax) from 2013 primarily driven by a favorable change in net derivative gains (losses), partially offset by an unfavorable
change in net investment gains (losses). Income (loss) from continuing operations, before provision for income tax also reflects a $262 million
($174 million, net of income tax) favorable change as a result of our annual assumption reviews related to reserves and DAC.

We manage our investment portfolio using disciplined ALM principles, focusing on cash flow and duration to support our current and future
liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing
and amount, while optimizing risk-adjusted net investment income and risk-adjusted total return. Our investment portfolio is heavily weighted

MetLife, Inc.

toward fixed income investments, with over 80% of our portfolio invested in fixed maturity securities and mortgage loans. These securities and
loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of
insurance liabilities. We also use derivatives as an integral part of our management of the investment portfolio to hedge certain risks, including
changes in interest rates, foreign currency exchange rates, credit spreads and equity market levels.

We purchase investments to support our insurance liabilities and not to generate net investment gains and losses. However, net investment
gains and losses are incurred and can change significantly from period to period due to changes in external influences, including changes in
market factors such as interest rates, foreign currency exchange rates, credit spreads and equity markets; counterparty specific factors such as
financial performance, credit rating and collateral valuation; and internal factors such as portfolio rebalancing. Changes in these factors from
period to period can significantly impact the levels of both impairments and realized gains and losses on investments sold.

We use freestanding interest rate, equity, credit and currency derivatives to hedge certain invested assets and insurance liabilities. Certain of
these hedges are designated and qualify as accounting hedges, which reduce volatility in earnings. For those hedges not designated as
accounting hedges, changes in market factors lead to the recognition of fair value changes in net derivative gains (losses) generally without an
offsetting gain or loss recognized in earnings for the item being hedged which creates volatility in earnings.

Certain variable annuity products with guaranteed minimum benefits contain embedded derivatives that are measured at estimated fair
value separately from the host variable annuity contract, with changes in estimated fair value recorded in net derivative gains (losses). We use
freestanding derivatives to hedge the market risks inherent in these variable annuity guarantees. The valuation of these embedded derivatives
includes a nonperformance risk adjustment, which is unhedged and can be a significant driver of net derivative gains (losses) and volatility in
earnings, but does not have an economic impact on us.

The variable annuity embedded derivatives and associated freestanding derivative hedges are collectively referred to as “VA program
derivatives” in the following table. All other derivatives that are economic hedges of certain invested assets and insurance liabilities are referred
to as “non-VA program derivatives” in the following table. The table below presents the impact on net derivative gains (losses) from non-VA
program derivatives and VA program derivatives:

Years Ended December 31,

2014

2013

(In millions)

Non-VA program derivatives

Interest rate ....................................................................................................................................... $

927

Foreign currency exchange rate...........................................................................................................

Credit ...............................................................................................................................................

Equity ...............................................................................................................................................

Non-VA embedded derivatives ............................................................................................................

Total non-VA program derivatives .....................................................................................................

VA program derivatives

Market risks in embedded derivatives ...................................................................................................

Nonperformance risk on embedded derivatives .....................................................................................

Other risks in embedded derivatives.....................................................................................................

Total embedded derivatives .............................................................................................................

Freestanding derivatives hedging embedded derivatives ........................................................................

Total VA program derivatives............................................................................................................

(25)

(62)

(99)

830

(266)

(222)

709

487

Net derivative gains (losses) ............................................................................................................. $

1,317

(1,609)

(1,225)

187

(61)

123

(2,585)

6,101

(952)

(169)

4,980

(5,634)

(654)

(3,239)

The favorable change in net derivative gains (losses) on non-VA program derivatives was $3.4 billion ($2.2 billion, net of income tax). This
was primarily due to long-term interest rates decreasing in 2014 and increasing in 2013, favorably impacting receive-fixed interest rate swaps
and interest rate swaptions. These freestanding derivatives were primarily hedging long duration liability portfolios. The strengthening of the U.S.
dollar relative to other key currencies, as well as the Japanese yen weakening less against the U.S. dollar in 2014 versus 2013, favorably
impacted foreign currency swaps and forwards that primarily hedge foreign denominated fixed maturity securities. Because certain of these
hedging strategies are not designated or do not qualify as accounting hedges, the changes in the estimated fair value of these freestanding
derivatives are recognized in net derivative gains (losses) without an offsetting gain or loss recognized in earnings for the item being hedged.

The favorable change in net derivative gains (losses) on VA program derivatives was $1.1 billion ($742 million, net of income tax). This was
due to a favorable change of $965 million ($627 million, net of income tax) related to the change in the nonperformance risk adjustment on
embedded derivatives and a favorable change of $273 million ($178 million, net of income tax) on market risks in embedded derivatives, net of
the impact of freestanding derivatives hedging those risks, partially offset by an unfavorable change of $97 million ($63 million, net of income
tax) on other risks in embedded derivatives. Other risks relate primarily to the impact of policyholder behavior and other non-market risks that
generally cannot be hedged.

MetLife, Inc.

The aforementioned $965 million ($627 million, net of income tax) favorable change in the nonperformance risk adjustment was due to a
favorable change of $629 million, before income tax, as a result of changes in capital market inputs, such as long-term interest rates and key
equity index levels, on the variable annuity guarantees, as well as a favorable change of $336 million, before income tax, related to changes in
our own credit spread.

When equity index levels decrease in isolation, the variable annuity guarantees become more valuable to policyholders, which results in an
increase in the undiscounted embedded derivative liability. Discounting this unfavorable change by the risk adjusted rate yields a smaller loss
than by discounting at the risk free rate, thus creating a gain from including an adjustment for nonperformance risk.

When the risk free interest rate decreases in isolation, discounting the embedded derivative liability produces a higher valuation of the liability
than if the risk free interest rate had remained constant. Discounting this unfavorable change by the risk adjusted rate yields a smaller loss than
by discounting at the risk free interest rate, thus creating a gain from including an adjustment for nonperformance risk.

When our own credit spread increases in isolation, discounting the embedded derivative liability produces a lower valuation of the liability
than if our own credit spread had remained constant. As a result, a gain is created from including an adjustment for nonperformance risk. For
each of these primary market drivers, the opposite effect occurs when they move in the opposite direction.

The foregoing $273 million ($178 million, net of income tax) favorable change was comprised of a $6.3 billion ($4.1 billion, net of income tax)
favorable change in freestanding derivatives hedging market risks in embedded derivatives, which was largely offset by a $6.1 billion ($3.9
billion, net of income tax) unfavorable change in market risks in embedded derivatives.

The primary changes in market factors are summarized as follows:

(cid:129)

Long-term interest rates decreased in 2014 and increased in 2013, contributing to a favorable change in our freestanding derivatives
and an unfavorable change in our embedded derivatives. For example, the 30-year U.S. swap rate decreased by 31% in 2014 and
increased by 40% in 2013.

Key equity index levels increased less in 2014 than in 2013, contributing to a favorable change in our freestanding derivatives and an
unfavorable change in our embedded derivatives. For example, the S&P 500 increased by 11% in 2014 and increased by 30% in
2013.

Changes in foreign currency exchange rates contributed to a favorable change in our freestanding derivatives and an unfavorable
change in our embedded derivatives. For example, the U.S. dollar strengthened against the Japanese yen by 14% in 2014 as
compared with 22% in 2013.

The foregoing $97 million ($63 million, net of income tax) unfavorable change in other risks in embedded derivatives was primarily due to an
increase in the risk margin adjustment caused by higher policyholder behavior risks, along with updates to the actuarial assumptions, partially
offset by favorable changes in all other risk factors.

The unfavorable change in net investment gains (losses) of $358 million ($233 million, net of income tax) primarily reflects a 2014 loss on the

disposition of MAL, partially offset by 2014 gains on sales of real estate and real estate joint ventures.

Our 2014 results include a $161 million ($105 million, net of income tax) benefit associated with our annual assumption review related to
reserves and DAC, of which $137 million ($89 million, net of income tax) was recognized in net derivative gains (losses). Of the $161 million
benefit, $82 million ($53 million, net of income tax) was related to DAC and $79 million ($52 million, net of income tax) was associated with
reserves.

The $137 million gain recognized in net derivative gains (losses) associated with our annual assumption review was included within the other

risks in embedded derivatives caption in the table above.

As a result of our annual assumption review, changes were made to economic, policyholder behavior, mortality and other assumptions. The

most significant impacts were in the Retail Life and Annuity blocks of businesses and are summarized as follows:

(cid:129)

Changes in economic assumptions resulted in a decrease in reserves, offset by unfavorable DAC, resulting in a net benefit of
$229 million ($149 million, net of income tax).

Changes to policyholder behavior and mortality assumptions resulted in reserve increases, offset by favorable DAC, resulting in a net
loss of $175 million ($114 million, net of income tax).

The remaining updates resulted in a decrease in reserves, coupled with favorable DAC, resulting in a benefit of $107 million
($70 million, net of income tax). The most notable update was related to our projection of closed block results.

Our 2013 results include a $101 million ($69 million, net of income tax) charge associated with our annual assumption review related to
reserves and DAC, of which $138 million ($90 million, net of income tax) was recognized in net derivative gains (losses). Of the $101 million
charge, $228 million ($150 million, net of income tax) was related to reserves, offset by $127 million ($81 million, net of income tax) associated
with DAC. The $138 million loss recorded in net derivative gains (losses) associated with our annual assumption review was included within the
other risks in embedded derivatives caption in the table above.

Income (loss) from continuing operations, before provision for income tax, related to the divested businesses, excluding net investment
gains (losses) and net derivative gains (losses), improved $156 million to a loss of $13 million in 2014 from a loss of $169 million in 2013.
Included in this improvement was a decrease in total revenues of $142 million, before income tax, and a decrease in total expenses of
$298 million, before income tax. The divested businesses include certain MetLife Bank businesses and MAL.

Income tax expense for the year ended December 31, 2014 was $2.5 billion, or 28% of income (loss) from continuing operations before
provision for income tax, compared with $661 million, or 16% of income (loss) from continuing operations before provision for income tax, for

MetLife, Inc.

the year ended December 31, 2013. The Company’s 2014 and 2013 effective tax rates differed from the U.S. statutory rate of 35% primarily
due to non-taxable investment income, tax credits for low income housing, and foreign earnings taxed at lower rates than the U.S. statutory
rate. The Company’s 2013 effective tax rate also reflected tax benefits in Japan related to the 2012 branch restructuring and the estimated
reversal of temporary differences. Our 2014 results include a $38 million tax charge related to a portion of the aforementioned settlement of a
licensing matter, and the PPACA fee, both of which were not deductible for income tax purposes, as well as a $54 million tax charge related to
tax reform in Chile and a $45 million tax charge related to the repatriation of earnings from Japan. These charges were partially offset by a
$32 million one-time tax benefit related to the filing of the Company’s U.S. federal tax return. In addition, in 2013, the Company received an
income tax refund from the Japanese tax authority and recorded a $119 million reduction to income tax expense.

As more fully described in “— Non-GAAP and Other Financial Disclosures,” we use operating earnings, which does not equate to income
(loss) from continuing operations, net of income tax, as determined in accordance with GAAP, to analyze our performance, evaluate segment
performance, and allocate resources. We believe that the presentation of operating earnings and operating earnings available to common
shareholders, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of
operations and the underlying profitability drivers of the business. Operating earnings and operating earnings available to common shareholders
should not be viewed as substitutes for income (loss) from continuing operations, net of income tax, and net income (loss) available to MetLife,
Inc.’s common shareholders, respectively. Operating earnings available to common shareholders increased $299 million, net of income tax, to
$6.6 billion, net of income tax, for the year ended December 31, 2014 from $6.3 billion, net of income tax, for the year ended December 31,
2013.

Year Ended December 31, 2013 Compared with the Year Ended December 31, 2012

During the year ended December 31, 2013, income (loss) from continuing operations, before provision for income tax, increased $2.6 billion
($2.1 billion, net of income tax) from 2012 primarily driven by a 2012 goodwill
impairment charge combined with favorable changes in net
investment gains (losses) and operating earnings, partially offset by an unfavorable change in net derivative gains (losses). Also included in
income (loss) from continuing operations, before provision for income tax, are the improved results of the divested businesses.

Years Ended December 31,

2013

2012

(In millions)

Non-VA program derivatives

Interest rate ................................................................................................................................... $

(1,609) $

Foreign currency exchange rate.......................................................................................................

(1,225)

Credit ...........................................................................................................................................

Equity ...........................................................................................................................................

Non-VA embedded derivatives ........................................................................................................

187

(61)

123

Total non-VA program derivatives.................................................................................................

(2,585)

VA program derivatives

Market risks in embedded derivatives...............................................................................................

Nonperformance risk on embedded derivatives.................................................................................

Other risks in embedded derivatives.................................................................................................

Total embedded derivatives .........................................................................................................

Freestanding derivatives hedging embedded derivatives ....................................................................

Total VA program derivatives .......................................................................................................

6,101

(952)

(169)

4,980

(5,634)

(654)

Net derivative gains (losses) ......................................................................................................... $

(3,239) $

271

(426)

(105)

(61)

(320)

4,303

(1,659)

(1,344)

1,300

(2,899)

(1,599)

(1,919)

The unfavorable change in net derivative gains (losses) on non-VA program derivatives was $2.3 billion ($1.5 billion, net of income tax). This
was primarily due to long-term interest rates increasing more in 2013 than in 2012, unfavorably impacting receive-fixed interest rate swaps, net
long interest rate floors and receiver swaptions. These freestanding derivatives were primarily hedging long duration liability portfolios. The
weakening of the Japanese yen relative to other key currencies unfavorably impacted foreign currency forwards and futures that primarily hedge
certain bonds. Because certain of these hedging strategies are not designated or do not qualify as accounting hedges, the changes in the
estimated fair value of these freestanding derivatives are recognized in net derivative gains (losses) without an offsetting gain or loss recognized
in earnings for the item being hedged.

The favorable change in net derivative gains (losses) on VA program derivatives was $945 million ($614 million, net of income tax). This was
due to a favorable change of $1.2 billion ($763 million, net of income tax) on other risks in embedded derivatives, a favorable change of
$707 million ($460 million, net of income tax) related to the change in the nonperformance risk adjustment on embedded derivatives and an

MetLife, Inc.

unfavorable change of $937 million ($609 million, net of income tax) on market risks in embedded derivatives, net of the impact of freestanding
derivatives hedging those risks. Other risks relate primarily to the impact of policyholder behavior and other non-market risks that generally
cannot be hedged.

The nonperformance risk adjustment loss of $952 million ($619 million, net of income tax) in 2013 was comprised of a loss of $337 million
due to a decrease in our own credit spread, as well as a loss of $615 million due to the impact of changes in capital market inputs, such as
long-term interest rates and key equity index levels, on the variable annuity guarantees. We calculate the nonperformance risk adjustment as the
change in the embedded derivative discounted at the risk adjusted rate (which includes our own credit spread to the extent that the embedded
derivative is in-the-money) less the change in the embedded derivative discounted at the risk-free rate.

The foregoing $1.2 billion ($763 million, net of income tax) favorable change in other risks in embedded derivatives was primarily due to the
cross effect of capital markets changes and refinements in the attribution analysis and valuation model, including periodic updates to actuarial
assumptions and updates to better reflect product features, which accounted for $961 million of this favorable change. Other items contributing
to this change included:

(cid:129)

A decrease in the risk margin adjustment caused by lower policyholder behavior risks, which resulted in a favorable year over year
change in the valuation of the embedded derivatives.

The mismatch of fund performance between actual and modeled funds and periodic updates to the mapping of policyholder funds into
groups of representative indices, which resulted in a favorable year over year change in the valuation of the embedded derivatives.

A combination of other factors, such as in-force changes, resulted in an unfavorable year over year change in the valuation of the
embedded derivatives.

The foregoing $937 million ($609 million, net of income tax) unfavorable change is comprised of a $2.7 billion ($1.8 billion, net of income tax)
unfavorable change in freestanding derivatives that hedge market risks in embedded derivatives, which was partially offset by a $1.8 billion
($1.2 billion, net of income tax) favorable change in market risks in embedded derivatives.

The primary changes in market factors are summarized as follows:

(cid:129)

Long-term interest rates increased more in 2013 than in 2012, contributing to an unfavorable change in our freestanding derivatives and
a favorable change in our embedded derivatives.

Key equity index levels increased more in 2013 than in 2012 contributing to an unfavorable change in our freestanding derivatives and a
favorable change in our embedded derivatives.

Key equity volatility measures decreased less in 2013 than in 2012, contributing to a favorable change in our freestanding derivatives
and an unfavorable change in our embedded derivatives.

Changes in foreign currency exchange rates contributed to an unfavorable change in our freestanding derivatives and a favorable
change in our embedded derivatives.

The favorable change in net investment gains (losses) primarily reflects an increase in net gains on sales of fixed maturity securities in 2013

coupled with a decrease in fixed maturity securities impairments from lower intent-to-sell impairments and improving economic fundamentals.

During our 2013 goodwill

impairment testing, we determined that goodwill was not impaired. In 2012, we recorded a $1.9 billion

($1.6 billion, net of income tax) non-cash charge for goodwill impairment associated with our U.S. Retail annuities business.

Our 2013 results include a $101 million ($69 million, net of income tax) charge associated with the global review of assumptions related to
reserves and DAC, of which $138 million ($90 million, net of income tax) was recognized in net derivative gains (losses). Of the $101 million
charge, $228 million ($150 million, net of income tax) was related to reserves, offset by $127 million ($81 million, net of income tax) associated
with DAC.

The foregoing $138 million loss recorded in net derivative gains (losses) associated with the global review of assumptions was included

within the other risks in embedded derivatives caption in the table above.

As a result of the global review of assumptions, changes were made to policyholder behavior and mortality assumptions, as well as to

economic assumptions. The most significant impacts were in Retail Annuities.

(cid:129)

Changes to policyholder behavior and mortality assumptions resulted in reserve increases, offset by favorable DAC, for a net loss of
$154 million ($103 million, net of income tax).

Changes in economic assumptions resulted in a decrease in reserves, offset by unfavorable DAC, for a net benefit of $53 million
($34 million, net of income tax).

Income (loss) from continuing operations, before provision for income tax, related to divested businesses, excluding net investment gains
(losses) and net derivative gains (losses), increased $448 million to a loss of $169 million in 2013 from a loss of $617 million in 2012. Included in
this improvement was a decrease in total revenues of $970 million, before income tax, and a decrease in total expenses of $1.4 billion, before
income tax.

Income tax expense for the year ended December 31, 2013 was $661 million, or 16% of income (loss) from continuing operations before
income tax, compared with $128 million, or 9% of income (loss) from continuing operations before income tax, for 2012. Foreign earnings
include one-time tax benefits of $119 million related to the receipt of a Japan tax refund, $69 million related to the estimated reversal of Japan
temporary differences, and $65 million related to the change in repatriation assumptions for foreign earnings of certain European operations. In
addition, as previously mentioned, the year ended December 31, 2012 included a $1.9 billion ($1.6 billion, net of income tax) non-cash charge
for goodwill impairment. The tax benefit associated with this charge was limited to $247 million on the associated tax goodwill.

Operating earnings available to common shareholders increased $612 million, net of income tax, to $6.3 billion, net of income tax, for the

year ended December 31, 2013 from $5.6 billion, net of income tax, in 2012.

MetLife, Inc.

Reconciliation of income (loss) from continuing operations, net of income tax, to operating earnings available to common
shareholders

Year Ended December 31, 2014

Group,
Voluntary &
Worksite
Benefits

Retail

Corporate
Benefit
Funding

Latin
America

Asia

EMEA

Corporate &
Other

Total

Income (loss) from continuing operations, net
of income tax .........................................
Less: Net investment gains (losses) ..............
Less: Net derivative gains (losses) ................
Less: Goodwill impairment ..........................
Less: Other adjustments to continuing

2,574
(7)
564
—

operations (1) .........................................

(671)

Less: Provision for income tax (expense)

benefit...................................................

1,073
(39)
525
—

(167)

(111)

(In millions)

1,371
(432)
352
—

457
30
(60)
—

1,181
512
(532)
—

(112)

(243)

(122)

Operating earnings.....................................

2,646

865

1,511

682

1,288

407
(17)
114
—

(88)

362

(724)
(244)
354
—

(97)

(65)

(672)

122

6,339
(197)
1,317
—

(1,376)

(87)

6,682

122

Less: Preferred stock dividends ...................

Operating earnings available to common

shareholders ..........................................

Year Ended December 31, 2013

(794)

6,560

Group,
Voluntary &
Worksite
Benefits

Retail

Corporate
Benefit
Funding

Latin
America

Asia

EMEA

Corporate &
Other

Total

Income (loss) from continuing operations,

net of income tax ...................................
Less: Net investment gains (losses) .............
Less: Net derivative gains (losses) ...............
Less: Goodwill impairment .........................
Less: Other adjustments to continuing

1,498
70
(724)
—

operations (1) ........................................

(926)

Less: Provision for income tax (expense)

benefit..................................................

554

Operating earnings....................................

2,524

397
(21)
(676)
—

(172)

304

962

1,192
(8)
(235)
—

(In millions)

666
20
(24)
—

167

(71)

582
343
(1,057)
—

(435)

487

1,295

574

1,244

Less: Preferred stock dividends ..................

Operating earnings available to common

shareholders .........................................

Year Ended December 31, 2012

349
(16)
(6)
—

(33)

329

(1,293)
(227)
(517)
—

(393)

389

(545)

122

3,391
161
(3,239)
—

(1,597)

1,683

6,383

122

(667)

6,261

Group,
Voluntary &
Worksite
Benefits

Retail

Corporate
Benefit
Funding

Latin
America

Asia

EMEA

Corporate &
Other

Total

Income (loss) from continuing operations,

net of income tax ................................
Less: Net investment gains (losses) ...........
Less: Net derivative gains (losses) .............
Less: Goodwill impairment .......................
Less: Other adjustments to continuing

(44)
212
162
(1,692)

operations (1)......................................

(1,260)

Less: Provision for income tax (expense)

benefit ...............................................

532

824
(7)
(63)
—

(141)

1,220
107
(157)
—

(10)

(In millions)

479
(2)
38
—

(193)

976
(342)
(170)
—

(32)

483

Operating earnings .................................

2,002

960

1,203

583

1,037

Less: Preferred stock dividends ................

Operating earnings available to common

shareholders.......................................

293
31
61
—

(22)

(48)

271

(2,434)
(351)
(1,790)
(176)

1,314
(352)
(1,919)
(1,868)

(921)

(2,492)

1,089

(285)

122

2,174

5,771

122

(407)

5,649

(1)

See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components
of such adjustments.

MetLife, Inc.

Reconciliation of GAAP revenues to operating revenues and GAAP expenses to operating expenses

Year Ended December 31, 2014

Group,
Voluntary &
Worksite
Benefits

Corporate
Benefit
Funding

Latin
America

Retail

Asia

EMEA

Corporate &
Other

Total

Total revenues .................................................................................
Less: Net investment gains (losses)....................................................
Less: Net derivative gains (losses)......................................................
Less: Adjustments related to net investment gains (losses) and net

derivative gains (losses) .................................................................
Less: Other adjustments to revenues (1).............................................

Total operating revenues ...............................................................

Total expenses ................................................................................
Less: Adjustments related to net investment gains (losses) and net

derivative gains (losses) .................................................................
Less: Goodwill impairment ................................................................
Less: Other adjustments to expenses (1) ............................................

21,843
(7)
564

(1)
(79)

21,366

17,929

26
—
565

19,278
(39)
525

—
(167)

18,959

17,630

—
—
—

9,016
(432)
352

—
17

9,079

6,885

—
—
129

(In millions)

5,598
30
(60)

—
41

5,587

5,033

—
—
284

12,583
512
(532)

11
371

12,221

10,862

(3)
—
507

4,307
(17)
114

10
857

3,343

3,744

12
—
819

691
(244)
354

—
56

525

2,429

—
—
153

73,316
(197)
1,317

20
1,096

71,080

64,512

35
—
2,457

Total operating expenses ..............................................................

17,338

17,630

6,756

4,749

10,358

2,913

2,276

62,020

Year Ended December 31, 2013

Group,
Voluntary
& Worksite
Benefits

Corporate
Benefit
Funding

Latin
America

Retail

Asia

EMEA

Corporate &
Other

Total

derivative gains (losses) .................................................................
Less: Other adjustments to revenues (1).............................................

Total operating revenues ...............................................................

Total expenses ................................................................................
Less: Adjustments related to net investment gains (losses) and net

derivative gains (losses) .................................................................
Less: Goodwill impairment.....................................................................................
Less: Other adjustments to expenses (1) ............................................

19,574
70
(724)

(9)
(119)

20,356

17,316

(197)
—
995

17,343
(21)
(676)

—
(172)

18,212

16,762

—
—
—

8,967
(8)
(235)

—
297

8,913

7,132

—
—
210

(In millions)

5,165
20
(24)

—
85

5,084

4,285

—
—
(82)

13,204
343
(1,057)

2
1,386

12,530

12,552

(15)
—
1,838

3,937
(16)
(6)

14
667

3,278

3,477

16
—
590

9
(227)
(517)

—
110

643

2,623

—
—
503

68,199
161
(3,239)

7
2,254

69,016

64,147

(196)
—
4,054

Total operating expenses ..............................................................

16,518

16,762

6,922

4,367

10,729

2,871

2,120

60,289

Year Ended December 31, 2012

Group,
Voluntary
& Worksite
Benefits

Corporate
Benefit
Funding

Latin
America

Retail

Asia

EMEA

Corporate &
Other

Total

derivative gains (losses) .................................................................
Less: Other adjustments to revenues (1).............................................

Total operating revenues ...............................................................

Total expenses ................................................................................
Less: Adjustments related to net investment gains (losses) and net

19,939
212
162

—
(77)

19,642

19,483

19
1,692
1,164

17,436
(7)
(63)

—
(140)

17,646

16,206

—
—
1

9,460
107
(157)

—
803

8,707

7,584

—
—
726

(In millions)

4,845
(2)
38

—
232

4,577

4,289

—
—
425

12,793
(342)
(170)

—
549

12,756

11,746

4
—
577

4,279
31
61

15
813

3,359

3,792

18
—
832

(602)
(351)
(1,790)

—
616

923

3,608

—
176
1,537

68,150
(352)
(1,919)

15
2,796

67,610

66,708

41
1,868
5,262

Total operating expenses ..............................................................

16,608

16,205

6,858

3,864

11,165

2,942

1,895

59,537

(1)

See definitions of operating revenues and operating expenses under “— Non-GAAP and Other Financial Disclosures” for the components
of such adjustments.

MetLife, Inc.

Consolidated Results — Operating

Years Ended December 31,

2014

2013

2012

(In millions)

Operating revenues

Premiums ........................................................................................................................ $

39,022

37,583

37,355

Universal life and investment-type product policy fees ..........................................................

Net investment income......................................................................................................

Other revenues.................................................................................................................

Total operating revenues ................................................................................................

9,541

20,484

2,033

71,080

9,085

20,394

1,954

69,016

8,212

20,287

1,756

67,610

Operating expenses

Policyholder benefits and claims and policyholder dividends .................................................

39,478

37,746

37,105

Interest credited to policyholder account balances ...............................................................

Capitalization of DAC ........................................................................................................

Amortization of DAC and VOBA .........................................................................................

Amortization of negative VOBA ..........................................................................................

Interest expense on debt ...................................................................................................

Other expenses ................................................................................................................

Total operating expenses ...............................................................................................

Provision for income tax expense (benefit) ...........................................................................

Operating earnings ...........................................................................................................

Less: Preferred stock dividends .........................................................................................

5,661

(4,182)

4,027

(396)

1,178

16,254

62,020

2,378

6,682

122

6,015

(4,786)

4,083

(524)

1,159

16,596

60,289

2,344

6,383

122

Operating earnings available to common shareholders ...................................................... $

6,560

6,261

6,242

(5,284)

4,177

(555)

1,190

16,662

59,537

2,302

5,771

122

5,649

Year Ended December 31, 2014 Compared with the Year Ended December 31, 2013

Unless otherwise stated, all amounts discussed below are net of income tax.

The primary drivers of the increase in operating earnings were higher net investment income from portfolio growth, higher asset-based
fee income and a decrease in interest credited expense, partially offset by unfavorable mortality, morbidity and claims experience and the
impact of decreasing investment yields on net investment income. Excluding the impact of the aforementioned tax reform charge in Chile, the
fourth quarter 2013 acquisition of ProVida increased operating earnings by $166 million. Changes in foreign currency exchange rates had a
$127 million negative impact on results compared to 2013.

We benefited from strong sales and business growth across many of our products as evidenced by higher asset-based fee income from
growth in our businesses abroad. However, we continue to focus on pricing discipline and risk management which resulted in a decrease in
sales of our variable annuity products. This decline in sales, in combination with surrenders and withdrawals, resulted in negative net flows,
which caused lower average separate account assets and, consequently, lower asset-based fee income in our Retail segment. Excluding the
impact of the divested businesses and the acquisition of ProVida, growth in our investment portfolios in the majority of our segments
generated higher net investment income. Our property & casualty businesses benefited from an increase in average premium per policy.
These positive results were partially offset by an associated increase in DAC amortization. The changes in business growth discussed above
resulted in a $409 million increase in operating earnings.

Market factors, including the sustained low interest rate environment, continued to impact our investment yields, as well as our crediting
rates. Excluding the results of the divested businesses, the acquisition of ProVida and the impact of inflation-indexed investments in the Latin
America segment, investment yields decreased. Certain of our inflation-indexed products are backed by inflation-indexed investments.
Changes in inflation cause fluctuations in net investment income with a corresponding fluctuation in policyholder benefits, resulting in a
minimal impact to operating earnings. Investment yields were negatively impacted by the adverse impact of the sustained low interest rate
environment on fixed maturity securities and mortgage loans yields, lower returns on our hedge funds, as well as increased holdings of lower
yielding Japanese government securities in the Japan fixed annuity business. These decreases were partially offset by higher returns on
interest rate derivatives, real estate joint ventures and private equity investments. Yields were also favorably impacted by increased sales of
foreign currency-denominated fixed annuities in Japan, resulting in an increase in higher yielding foreign currency-denominated fixed maturity
securities. The sustained low interest rate environment also resulted in lower interest credited expense as we set interest credited rates lower
on both new business and certain in-force business with rate resets that are contractually tied to external indices or contain discretionary rate
reset provisions. Our average separate account balances grew with the equity markets driving higher fee income in our annuity business.
However, this was partially offset by higher DAC amortization due to the significant prior period equity market increase, as well as higher
asset-based commissions and costs associated with our variable annuity guaranteed minimum death benefits (“GMDBs”). The changes in
market factors discussed above resulted in a $147 million decrease in operating earnings.

MetLife, Inc.

Less favorable mortality and morbidity was driven by our Group, Voluntary & Worksite Benefits segment. In addition, in our property &
casualty businesses, catastrophe-related losses increased due to severe storm activity in 2014. Non-catastrophe related claim costs also
increased as a result of severe winter weather in 2014. Claims experience in our Latin America segment was also unfavorable. The combined
impact of mortality, morbidity and claims experience decreased operating earnings by $146 million.

On an annual basis, we review and update our long-term assumptions used in our calculations of certain insurance-related liabilities and
DAC. These annual updates, which occurred in both years, resulted in a $12 million decrease in operating earnings in 2014 as compared to
2013. In addition to our annual updates, refinements to DAC and certain insurance-related liabilities that were recorded in both years
increased operating earnings by $75 million. Such refinements include favorable reserve adjustments in 2014 related to disability premium
waivers and a 2014 charge related to delayed settlement interest on unclaimed funds held by state governments, both in our life business
within our Retail segment, as well as a write-down of DAC and VOBA in 2013 related to pension reform in Poland within our EMEA segment.
Also, our 2013 results include a reserve strengthening in Australia within our Asia segment of $57 million, net of reinsurance.

A $112 million decrease in expenses was primarily driven by lower employee-related costs. In addition, our 2014 results include charges
totaling $57 million related to the aforementioned settlement of a licensing matter with the Department of Financial Services and the District
Attorney, New York County. The PPACA fee reduced operating earnings by $58 million in 2014. We increased our litigation reserves related
to asbestos more in 2014 than in 2013 resulting in a $16 million decline in operating earnings.

The Company’s 2014 and 2013 effective tax rates differed from the U.S. statutory rate of 35% primarily due to non-taxable investment
income, tax credits for low income housing, and foreign earnings taxed at lower rates than the U.S. statutory rate. In 2014, the Company
realized a $32 million tax benefit related to the filing of the Company’s U.S. federal tax return, as well as additional tax benefits of $36 million
related to the separate account dividends received deduction and $58 million primarily related to foreign earnings taxed at rates lower than
the U.S. and other tax preference items. However, this was partially offset by a $38 million tax charge related to a portion of the
aforementioned settlement of a licensing matter and the PPACA fee, both of which were not deductible for income tax purposes.

Year Ended December 31, 2013 Compared with the Year Ended December 31, 2012

Unless otherwise stated, all amounts discussed below are net of income tax.

During the fourth quarter of 2013, we increased our litigation reserve related to asbestos by $101 million. During 2013, we also increased
our other litigation reserves by $46 million. The fourth quarter 2013 acquisition of ProVida in Chile increased operating earnings by
$48 million. In addition, the year ended December 31, 2012 included a $52 million charge representing a multi-state examination payment
related to unclaimed property and our use of the U.S. Social Security Administration’s Death Master File to identify potential
life insurance
claims, as well as the acceleration of benefit payments to policyholders under the settlements of such claims. Changes in foreign currency
exchange rates had a $58 million negative impact on results compared to 2012.

In 2013, we made additional changes to variable annuity guarantee features which, in combination with product changes made in 2012,
resulted in a significant decrease in variable annuity sales in our Retail segment. The demand for foreign currency-denominated fixed annuity
products in Japan also declined as a result of a weakening yen and a sharp increase in equity markets, which decreased sales. However, as
a result of significant positive net flows in our Retail segment since 2012, we experienced growth in our average separate account assets.
This, combined with an increase in surrenders in Japan driven by market conditions, generated higher policy fee income of $382 million.
Deposits and funding agreement issuances in 2013 in our Corporate Benefit Funding segment, combined with positive net flows from our
universal
life business resulted in growth in our investment portfolio which generated higher net investment income of $394 million. This
increase in net investment income was partially offset by a $138 million corresponding increase in interest credited on certain liabilities, most
notably in the Corporate Benefit Funding segment. A decrease in commissions, which was primarily driven by the decline in annuity sales,
was partially offset by a decrease in related DAC capitalization, which combined, resulted in a $103 million increase in operating earnings. An
increase in average premium per policy, coupled with an increase in exposures in our property & casualty businesses resulted in a
$106 million increase in operating earnings. Overall business growth was the primary driver of higher DAC amortization of $302 million in
2013. In our international segments, higher premiums were more than offset by higher policyholder benefits and operating expenses,
resulting in a $123 million decrease in operating earnings.

Market factors, including the sustained low interest rate environment, continued to impact our investment yields, as well as our crediting
rates. Excluding the results of the divested businesses and the impact of inflation-indexed investments in the Latin America segment,
investment yields declined. Certain of our inflation-indexed products are backed by inflation-indexed investments. Changes in inflation cause
fluctuations in net investment income with a corresponding fluctuation in policyholder benefits, resulting in a minimal
impact to operating
earnings. Yield changes were primarily driven by the impact of the low interest rate environment on fixed maturity securities and mortgage
loans and from lower returns on real estate joint ventures. These declines were partially offset by higher income on interest rate derivatives,
improved returns on other limited partnership interests and the favorable impact of the continued repositioning of the Japan portfolio to
higher yielding investments. A significant portion of these derivatives was entered into prior to the onset of the current low interest rate
environment to mitigate the risk of low interest rates in the U.S. The low interest rate environment also resulted in lower interest credited
expense as we set interest credited rates lower on both new business and certain in-force business with rate resets that are contractually
tied to external indices or contain discretionary rate reset provisions. Our average separate account balance grew with the equity markets
driving higher fee income in our annuity business. This continued positive equity market performance also resulted in lower DAC amortization.
The changes in market factors discussed above resulted in a $256 million increase in operating earnings.

We experienced less favorable mortality in our Group, Voluntary & Worksite Benefits and Retail segments. In our Group, Voluntary &
Worksite Benefits segment, mixed claims experience with a net unfavorable result was driven by an increase in claims incidence. In our
property & casualty businesses, catastrophe-related losses decreased as compared to 2012, primarily due to Superstorm Sandy in 2012;
however, this was partially offset by an increase in non-catastrophe claim costs, which were primarily the result of higher frequencies. The
combined impact of mortality and claims experience decreased operating earnings by $101 million.

MetLife, Inc.

Our annual assumption updates resulted in a $20 million increase in operating earnings primarily driven by the Asia segment. In addition
to our annual updates, other adjustments and DAC refinements were recorded in both 2013 and 2012 and resulted in a $21 million decrease
in operating earnings. Also, as a result of a review of our own recent claims experience, and in consideration of the worsening trend for the
industry in Australia, we strengthened our group total and permanent disability claim reserves in Australia, which reduced operating earnings
by $57 million.

In addition, an increase in operating expenses, primarily employee-related costs, was partially offset by a decline in expenses, most
notably in our Retail segment, primarily driven by savings from the Company’s enterprise-wide strategic initiative and resulted in an
$82 million decrease in operating earnings.

In 2013, the Company realized additional tax benefits of $187 million compared to 2012, primarily from the higher utilization of tax

preferenced investments and the Company’s decision to permanently reinvest certain foreign earnings.

Segment Results and Corporate & Other

Retail

Years Ended December 31,

2014

2013

2012

(In millions)

Operating revenues

Premiums .................................................................................................................... $

7,280

6,528

Universal life and investment-type product policy fees.......................................................

Net investment income ..................................................................................................

Other revenues .............................................................................................................

5,074

7,953

1,059

4,912

7,898

1,018

6,532

4,561

7,670

879

Total operating revenues ............................................................................................

21,366

20,356

19,642

Operating expenses

Policyholder benefits and claims and policyholder dividends..............................................

Interest credited to policyholder account balances ...........................................................

Capitalization of DAC ....................................................................................................

Amortization of DAC and VOBA......................................................................................

Interest expense on debt ...............................................................................................

Other expenses ............................................................................................................

Total operating expenses ...........................................................................................

Provision for income tax expense (benefit) .......................................................................

9,851

2,245

(969)

1,515

4,695

17,338

1,382

9,028

2,331

(1,309)

1,384

—

5,084

16,518

1,314

Operating earnings .................................................................................................... $

2,646

2,524

9,010

2,375

(1,753)

1,607

—

5,369

16,608

1,032

2,002

Year Ended December 31, 2014 Compared with the Year Ended December 31, 2013

Unless otherwise stated, all amounts discussed below are net of income tax.

Changes to our guarantee features since 2012, along with continued management of sales in 2014 by focusing on pricing discipline and
risk management, drove a $4.5 billion, or 41%, decrease in variable annuity sales. Life sales were also lower, mainly driven by the
discontinuance of our lifetime secondary guarantees on universal life products. These declines were partially offset by an increase in fixed and
indexed annuity sales. We expect our sales of annuities to increase in the future. To this end, we introduced new variable annuity products
and/or enhancements in late 2014 and early 2015. A significant portion of our operating earnings is driven by separate account balances.
Most directly, these balances determine asset-based fee income but they also impact DAC amortization and asset-based commissions.
Separate account balances are driven by sales, movements in the market, surrenders, withdrawals, benefit payments, transfers and policy
charges. Separate account balances increased over 2013 as a result of continued strong market performance, partially offset by negative net
flows as surrenders and withdrawals exceeded sales.

A $124 million increase in operating earnings was attributable to business growth. Our life businesses had positive net flows, despite a
decline in universal life sales, which resulted in higher net investment income. This favorable impact was partially offset by increases in DAC
amortization and interest credited expenses, as well as lower fees, as 2013 benefited from the first year fees received on the now
discontinued lifetime secondary guarantees on our universal life products. In our deferred annuities business, the impact of negative net flows
contributed to a decrease in asset-based fee income, partially offset by a reduction in interest credited expenses in the general account.
Additionally, costs associated with our variable annuity GMDBs were lower. In our property & casualty business, an increase in average
premium per policy in both our auto and homeowners businesses contributed to the increase in operating earnings. In addition, we earned
more income on a larger invested asset base, which resulted from a higher amount of allocated equity as compared to 2013.

MetLife, Inc.

A $48 million decrease in operating earnings was attributable to market factors, including equity markets and interest rates. Strong equity
market performance led to higher asset-based commissions, which were, in part, driven by separate account balances, higher DAC
amortization and costs associated with our GMDBs. The more favorable separate account returns in 2013 drove lower DAC amortization in
2013 as compared to 2014 where equity returns were much less favorable. These negative impacts were partially offset by higher asset-
based fee income in 2014 due to increased average separate account balances. This positive equity market performance also drove higher
net investment income from private equity investments. The sustained low interest rate environment resulted in a decline in net investment
income on our fixed maturity securities and mortgage loans as proceeds from maturing investments were reinvested at lower yields. This
negative interest rate impact was partially offset by lower interest credited expense as we reduced interest credited rates on contracts with
discretionary rate reset provisions, and lower DAC amortization in our life business. Lower returns in our hedge funds also decreased
operating earnings and were partially offset by higher income from real estate joint ventures and increased prepayment fees.

Less favorable mortality experience in our variable and universal life business, primarily driven by three large, unreinsured claims, partially
offset by favorable experience in the traditional
life and immediate annuities businesses, resulted in a $40 million decrease in operating
earnings. In our property & casualty business, non-catastrophe claim costs increased by $8 million as a result of higher frequencies in our
auto business offset by lower frequencies in our homeowners business. Catastrophe-related losses increased $5 million as compared to
2013. In addition, favorable morbidity experience in our individual disability income business resulted in a $6 million increase in operating
earnings.

On an annual basis, we review and update our long-term assumptions used in our calculations of certain insurance-related liabilities and
DAC. These annual updates, which occurred in both years, resulted in a net operating earnings decrease of $11 million and were primarily
related to unfavorable DAC unlockings in the variable annuity business, partially offset by favorable DAC unlockings in our traditional and
universal
life businesses. Refinements to DAC and certain insurance-related liabilities that were recorded in both periods resulted in a
$7 million increase in operating earnings, which included $104 million of favorable reserve adjustments in 2014 related to disability premium
waivers and a 2014 charge of $57 million related to delayed settlement interest on unclaimed funds held by state governments, both in our
life business. Operating earnings increased due to a decline in expenses of $109 million, mainly the result of lower employee-related costs
and the 2013 increase in litigation reserves.

Year Ended December 31, 2013 Compared with the Year Ended December 31, 2012

Unless otherwise stated, all amounts (with the exception of sales data) discussed below are net of income tax.

A $245 million increase in operating earnings was largely attributable to business growth. This growth was generated, in part, in the life
and annuity businesses, despite sales declines in those businesses. Our life businesses had positive net flows, mainly in the universal
life
business, which is reflected in higher net investment income, partially offset by an increase in DAC amortization. On the annuities side,
average separate account assets grew, driven by strong sales in 2012, resulting in an increase in asset-based fees. In our property &
casualty business, an increase in average premium per policy in both our auto and homeowners businesses contributed to the increase in
operating earnings. In addition, we earned more income on a larger invested asset base, which resulted from a higher amount of allocated
equity in the business as compared to 2012.

The rising equity markets increased our average separate account balances driving an increase in asset-based fee income. This
continued positive equity market performance also drove higher net investment income from other limited partnership interests and resulted
in lower DAC amortization. These positive impacts were partially offset by higher asset-based commissions, which are also, in part,
determined by separate account balances and higher costs associated with our variable annuity GMDBs. The sustained low interest rate
environment resulted in a decline in net investment income on our fixed maturity securities and mortgage loans as proceeds from maturing
investments are reinvested at lower yields. Additionally, we had a lower interest crediting rate on allocated equity in 2013, which resulted in
lower net investment income. These negative interest rate impacts were partially offset by higher income earned on interest rate derivatives
and lower interest credited expense as we reduced interest credited rates on contracts with discretionary rate reset provisions. Lower returns
on real estate joint ventures also decreased operating earnings. The net impact of these items resulted in a $174 million increase in operating
earnings. Also, the impact of the sustained low interest rate environment contributed to less favorable experience resulting in a reduction to
our dividend scale, mainly within the closed block, which was announced in the fourth quarter of 2012. This dividend action favorably
impacted operating earnings by $61 million. With respect to the results of the closed block, the impact of this dividend action was more than
offset by other unfavorable earnings drivers that also affected the closed block and have been incorporated in these discussions.

Less favorable mortality experience in the variable and universal life, and income annuities businesses, partially offset by increases in the
traditional
life business, resulted in a $20 million decrease in operating earnings. This decrease was more than offset by the $26 million
charge in 2012 for the expected acceleration of benefit payments to policyholders under a multi-state examination related to unclaimed
property. In addition, unfavorable morbidity experience in our individual
income disability business resulted in a $6 million decrease in
operating earnings. Our property & casualty business non-catastrophe claim costs increased $33 million in 2013, mainly the result of higher
frequencies in both our auto and homeowners businesses, as well as higher severities in our homeowners business, partially offset by lower
severities in our auto business. Catastrophe-related losses decreased $28 million as compared to 2012, primarily due to Superstorm Sandy
in 2012.

The combined impact of the 2013 and 2012 annual assumption updates resulted in a net operating earnings decrease of $55 million.
This unfavorable impact was primarily related to 2012 DAC unlockings in the variable annuity business, partially offset by less unfavorable life
business unlockings in 2013. In addition to our annual updates, certain insurance-related liabilities and DAC refinements recorded in both
2013 and 2012 resulted in a $76 million increase in operating earnings.

Also contributing to the increase in operating earnings was a decline in expenses of $30 million, primarily driven by $100 million of
savings from the Company’s enterprise-wide strategic initiative, partially offset by an increase of $61 million related to increases in litigation
reserves and postretirement benefit obligations.

MetLife, Inc.

Group, Voluntary & Worksite Benefits

Years Ended December 31,

2014

2013

2012

(In millions)

Operating revenues

Premiums .................................................................................................................... $

15,979

15,250

14,794

Universal life and investment-type product policy fees.......................................................

Net investment income ..................................................................................................

Other revenues .............................................................................................................

716

1,844

420

688

1,856

418

662

1,768

422

Total operating revenues ............................................................................................

18,959

18,212

17,646

Operating expenses

Policyholder benefits and claims and policyholder dividends..............................................

14,897

14,227

13,691

Interest credited to policyholder account balances ...........................................................

Capitalization of DAC ....................................................................................................

Amortization of DAC and VOBA......................................................................................

Interest expense on debt ...............................................................................................

Other expenses ............................................................................................................

Total operating expenses ...........................................................................................

Provision for income tax expense (benefit) .......................................................................

156

(143)

149

2,570

17,630

464

155

(141)

140

2,380

16,762

488

Operating earnings .................................................................................................... $

865

962

167

(138)

133

2,351

16,205

481

960

Year Ended December 31, 2014 Compared with the Year Ended December 31, 2013

Unless otherwise stated, all amounts discussed below are net of income tax.

The macroeconomic environment

is demonstrating steady growth and instilling further confidence in the U.S. economy. The
improvement in the U.S. economy and overall employment remain slow and steady. In 2014, premiums increased across the segment. Our
term life, dental and disability businesses generated premium growth through stronger sales and improved persistency, with the dental
business also benefiting from pricing actions on existing business. In addition, premiums in our term life business increased due to the
impact of experience adjustments on our participating contracts; however, changes in premiums for these contracts were almost entirely
offset by the related changes in policyholder benefits. The introduction of new products also drove growth in the voluntary benefits business.
Although we have discontinued selling our LTC product, we continue to collect premiums and administer the existing block of business,
contributing to asset growth in the segment.

Our life business experienced less favorable mortality in 2014, mainly due to an increase in claims severity in the term life business and
increased claims incidence in the group universal life business, which resulted in a $48 million decrease in operating earnings. Unfavorable
claims experience in our disability business, driven by higher approvals, was partially offset by higher net closures. In addition, increased
utilization of services across the channels of our dental business was partially offset by the impact of lapses on certain insurance liabilities,
higher net closures in our LTC business and favorable claims incidence in our accidental death and dismemberment (“AD&D”) business. Our
overall net unfavorable claims experience resulted in a $14 million decrease in operating earnings. The impact of favorable refinements to
certain insurance and other liabilities in 2014 resulted in an increase in operating earnings of $27 million. In our property & casualty business,
catastrophe-related losses increased by $21 million as compared to 2013, mainly due to severe storm activity in 2014. In addition, severe
winter weather in 2014 increased non-catastrophe claim costs by $18 million, which was the result of higher frequencies in both our auto
and homeowners businesses, as well as higher severities in our homeowners business, partially offset by lower severities in our auto
business. These unfavorable results were partially offset by additional favorable development of prior year non-catastrophe losses, which
improved operating earnings by $15 million.

The impact of changes in market factors, including lower yields on our fixed maturity securities and mortgage loans, and decreased
income on alternative investments, partially offset by higher returns on our real estate joint ventures and private equity investments, resulted
in lower investment yields. Unlike in the Retail and Corporate Benefit Funding segments, in the Group Voluntary & Worksite Benefits
segment, a change in investment yield does not necessarily drive a corresponding change in the rates credited on certain insurance liabilities.
The decrease in investment yields, slightly offset by lower crediting rates in 2014, reduced operating earnings by $35 million.

The increase in average premium per policy in both our auto and homeowners businesses improved operating earnings by $42 million.
Growth in premiums and deposits in 2014, partially offset by a reduction in other liabilities, PABs and allocated equity, resulted in an increase
in our average invested assets, increasing operating earnings by $30 million. Consistent with the growth in average invested assets from
premiums and deposits, primarily in our LTC business, interest credited on long-duration contracts and PABs increased by $24 million. The
PPACA fee increased other expenses by $58 million in 2014; however, the impact of the assessment was significantly offset by a related
increase in premiums in the dental business. The remaining increase in other operating expenses, including higher marketing and sales
support costs in our property & casualty business, was partially offset by the remaining increase in premiums, fees and other revenues.

MetLife, Inc.

Year Ended December 31, 2013 Compared with the Year Ended December 31, 2012

Unless otherwise stated, all amounts discussed below are net of income tax.

An increase in average premium per policy in both our auto and homeowners businesses improved operating earnings by $44 million. In
addition, an increase in exposures resulted in an $11 million increase in operating earnings. The positive impact from higher premiums on this
increase in exposures exceeded the negative impact from the related claims. Exposures are defined generally as each automobile for the
auto line of business and each residence for the homeowners line of business. An increase in allocated equity and growth in premiums and
deposits in 2013, partially offset by a reduction in other liabilities, resulted in an increase in our average invested assets, increasing operating
earnings by $34 million. Consistent with the growth in average invested assets from 2013 premiums and deposits, primarily in our LTC
business, interest credited on long-duration contracts and policyholder account balances increased by $19 million. In the fourth quarter of
2012, we recorded a $50 million impairment charge on an intangible asset related to a previously acquired dental business. The favorable
impact of this 2012 charge was almost entirely offset by higher operating expenses in 2013, primarily from postretirement benefit costs
across the segment and an increase in marketing, advertising and sales-related expenses in our property & casualty business.

The impact of market factors, including increased income on interest rate derivatives, improved returns on real estate joint ventures and
higher prepayment fees received, partially offset by lower returns on our fixed maturity securities, resulted in improved investment yields. The
increase in investment yields, as well as lower crediting rates in 2013, the result of the maturity of certain long-duration contracts and PABs
at higher rates, contributed $33 million to operating earnings.

Our life businesses experienced less favorable mortality in 2013, mainly due to unfavorable claims experience in the group term life and
group universal life businesses, which resulted in a $46 million decrease in operating earnings. The impact of favorable reserve refinements in
2012 resulted in a decrease in operating earnings of $23 million. An increase in claims incidence in our disability, LTC and AD&D businesses,
partially offset by favorable claims experience in our dental business, resulted in a $42 million decrease in operating earnings. In our
property & casualty business, lower catastrophe-related losses improved operating earnings by $43 million, primarily due to the impact of
Superstorm Sandy in 2012. This increase in operating earnings was partially offset by higher non-catastrophe claim costs of $18 million, the
result of higher frequencies, partially offset by lower severities, in both our auto and homeowners businesses. Less favorable development of
prior year non-catastrophe losses also reduced operating results by $13 million.

Corporate Benefit Funding

Years Ended December 31,

2014

2013

2012

(In millions)

Operating revenues

Premiums .................................................................................................................... $

2,768

2,767