2022
Annual
Report
ML_2023_03_006_Proxy_AR_CEO_Letter_COVERS.indd 5
ML_2023_03_006_Proxy_AR_CEO_Letter_COVERS.indd 5
4/8/23 10:22 AM
4/8/23 10:22 AM
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
Form 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
For the transition period from to
Commission file number: 001-15787
MetLife, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
200 Park Avenue, New York, NY
(Address of principal executive offices)
13-4075851
(I.R.S. Employer
Identification No.)
10166-0188
(Zip Code)
(212) 578-9500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $0.01
Floating Rate Non-Cumulative Preferred Stock, Series A, par
value $0.01
Depositary Shares, each representing a 1/1,000th interest in a
share of 5.625% Non-Cumulative Preferred Stock, Series E
Depositary Shares, each representing a 1/1,000th interest in a
share of 4.75% Non-Cumulative Preferred Stock, Series F
Trading Symbol(s)
Name of each exchange on which registered
MET
MET PRA
MET PRE
MET PRF
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
5.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series D, par value $0.01
3.850% Fixed Rate Reset Non-Cumulative Preferred Stock, Series G, par value $0.01
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No þ
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
þ Accelerated filer
☐ Smaller reporting company
Emerging growth company
☐
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. ¨
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant at June 30, 2022 was approximately $50.1 billion.
At February 14, 2023, 774,362,092 shares of the registrant’s common stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Form 10-K incorporates by reference certain information from the registrant’s definitive proxy statement for the Annual Meeting of Shareholders to
be held on June 20, 2023, to be filed by the registrant with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the year
ended December 31, 2022.
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Table of Contents
Part I
Part II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
Controls and Procedures
Other Information
Item 9A.
Item 9B.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Item 15.
Item 16.
Exhibits and Financial Statement Schedules
Form 10-K Summary
Part IV
Exhibit Index
Signatures
Page
4
33
47
47
47
47
48
50
51
136
144
312
312
314
314
314
314
314
317
317
318
318
319
329
Table of Contents
As used in this Form 10-K, “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 on Form 10-K, 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 and do not relate strictly to historical or current facts. They use words and terms
such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,” “plan,”
“potential,” “project,” “should,” “will,” “would” and other words and terms of similar meaning or that are otherwise tied to
future periods or future performance, in each case in all derivative forms. They include statements relating to future actions,
prospective services or products, future performance or results of current and anticipated services or products, future sales
efforts, future expenses, the outcome of contingencies such as legal proceedings, and future trends in operations and financial
results.
Many factors determine Company results, and they involve unpredictable risks and uncertainties. Our forward-looking
statements depend on our assumptions, our expectations, and our understanding of the economic environment, but they may
be inaccurate and may change. We do not guarantee any future performance. Our results could differ materially from those
we express or imply in forward-looking statements. The risks, uncertainties and other factors, including those relating to the
COVID-19 pandemic, identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission, and others,
may cause such differences. These factors include:
(1) economic condition difficulties, including risks relating to public health, interest rates, credit spreads, equity, real estate,
obligors and counterparties, government default, currency exchange rates, derivatives, climate change and terrorism and
security;
(2) global capital and credit market adversity;
(3) credit facility inaccessibility;
(4) financial strength or credit ratings downgrades;
(5) unavailability, unaffordability, or inadequate reinsurance;
(6) statutory life insurance reserve financing costs or limited market capacity;
(7) legal, regulatory, and supervisory and enforcement policy changes;
(8) changes in tax rates, tax laws or interpretations;
(9) litigation and regulatory investigations;
(10) London Interbank Offered Rate discontinuation and transition to alternative reference rates;
(11) unsuccessful efforts to meet all environmental, social, and governance standards or to enhance our sustainability;
(12) MetLife, Inc.’s inability to pay dividends and repurchase common stock;
(13) MetLife, Inc.’s subsidiaries’ inability to pay dividends to MetLife, Inc.;
(14) investment defaults, downgrades, or volatility;
(15) investment sales or lending difficulties;
(16) collateral or derivative-related payments;
(17) investment valuations, allowances, or impairments changes;
(18) claims or other results that differ from our estimates, assumptions, or models;
(19) global political, legal, or operational risks;
(20) business competition;
(21) technological changes;
(22) catastrophes;
2
Table of Contents
(23) climate changes or responses to it;
(24) deficiencies in our closed block;
(25) goodwill or other asset impairment, or deferred income tax asset allowance;
(26) impairment of value of business acquired, value of distribution agreements acquired or value of customer relationships
acquired;
(27) product guarantee volatility, costs, and counterparty risks;
(28) risk management failures;
(29) insufficient protection from operational risks;
(30) failure to protect confidentiality and integrity of data or other cybersecurity or disaster recovery failures;
(31) accounting standards changes;
(32) excessive risk-taking;
(33) marketing and distribution difficulties;
(34) pension and other postretirement benefit assumption changes;
(35) inability to protect our intellectual property or avoid infringement claims;
(36) acquisition, integration, growth, disposition, or reorganization difficulties;
(37) Brighthouse Financial, Inc. separation risks;
(38) MetLife, Inc.’s Board of Directors influence over the outcome of stockholder votes through the voting provisions of the
MetLife Policyholder Trust; and
(39) legal- and corporate governance-related effects on business combinations.
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 subsequent reports to the U.S. Securities and Exchange Commission.
Note Regarding Reliance on Statements in Our Contracts
See “Exhibit Index — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements
included as exhibits to this Annual Report on Form 10-K.
3
Part I
Item 1. Business
Index to Business
Table of Contents
Business Overview & Strategy
Segments and Corporate & Other
Policyholder Liabilities
Underwriting and Pricing
Reinsurance Activity
Regulation
Competition
Human Capital Resources
Information About Our Executive Officers
Trademarks
Available Information
Page
5
6
11
11
12
13
28
29
31
32
32
4
Table of Contents
Business Overview & Strategy
As used in this Form 10-K, “MetLife,” the “Company,” “we,” “our” and “us” refer to MetLife, Inc., a Delaware
corporation incorporated in 1999, its subsidiaries and affiliates.
MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits
and asset management. We hold leading market positions in the United States (“U.S.”), Japan, Latin America, Asia, Europe
and the Middle East. We are also one of the largest institutional investors in the U.S. with a general account portfolio
invested primarily in fixed income securities (corporate, structured products, municipals, and government and agency) and
mortgage loans, as well as real estate, real estate joint ventures, other limited partnerships and equity securities.
Our well-recognized brand, globally diversified and market-leading businesses, competitive and innovative product
offerings and financial strength and expertise should help drive future growth and enhance shareholder value. We will
continue to execute on our Next Horizon strategy, creating value focusing on the following three pillars:
● Focus
–
Generate strong free cash flow by deploying capital and resources to the highest value opportunities.
● Simplify
–
Simplify our business to deliver operational efficiency and an outstanding customer experience.
● Differentiate
–
Drive competitive advantage through our brand, scale, talent, and innovation.
MetLife is organized into five segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”);
and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other. See “—
Segments and Corporate & Other” and Note 2 of the Notes to the Consolidated Financial Statements for further information
on the Company’s segments and Corporate & Other.
In the U.S., we provide a variety of insurance and financial services products, including life, dental, disability, vision,
accident & health, capital market investment, risk solutions, stable value and annuities. Outside the U.S., we provide life,
accident & health and credit insurance, as well as retirement & savings products.
5
Table of Contents
Segments and Corporate & Other
U.S.
Our businesses in the U.S. segment offer a broad range of protection products and services aimed at serving the financial
needs of our customers throughout their lives. These products are sold to corporations and their respective employees, other
institutions and their respective members, as well as individuals. Our U.S. segment is organized into two businesses: Group
Benefits and Retirement and Income Solutions (“RIS”).
Group Benefits
We have built a leading position in the U.S. group insurance market through long-standing relationships with many of
the largest corporate employers in the U.S.
Our Group Benefits business offers life insurance, dental, group short- and long-term disability (“LTD”), individual
disability, accidental death and dismemberment (“AD&D”) insurance, vision, and accident & health insurance, as well as
prepaid legal plans and pet insurance. We also sell administrative services-only (“ASO”) arrangements to some employers.
We distribute Group Benefits products and services through a sales force primarily comprised of MetLife employees
that is segmented by the size of the target customer. Account executives sell either directly to corporate and other group
customers or through an intermediary, such as a broker or consultant. Employers have been emphasizing voluntary
products and, as a result, we have increased our focus on communicating and marketing to employees in order to further
foster sales of those products.
We have entered into several operating joint ventures and other arrangements with third parties to expand
opportunities to market and distribute Group Benefits products and services. We also sell our Group Benefits products and
services through sponsoring associations and affinity groups and provide life, dental, accident & health, and vision
coverage to certain employees of the U.S. Government. We have longstanding relationships with these employees and
continue to cultivate and expand them through additional product offerings.
Group Benefits business quarterly claims experience may vary, as seasonal illnesses effect mortality and morbidity and
due to utilization rate fluctuation in our non-medical health businesses. Annual benefit renewal implementation,
enrollment, and marketing costs normally elevate Group Benefits business’ expenses in the fourth quarter.
6
Table of Contents
Major Products
Term Life Insurance
Variable Life Insurance
A guaranteed benefit upon the death of the insured for a specified time period in return for the
periodic payment of premiums. Premiums may be guaranteed at a level amount for the coverage
period or may be non-level and non-guaranteed. Term contracts expire without value at the end
of the coverage period when the insured party is still living.
Insurance coverage through a contract that gives the policyholder flexibility in investment
choices and, depending on the product, in premium payments and coverage amounts, with certain
guarantees. Premiums and account balances can be directed by the policyholder into a variety of
separate account investment options or directed to the Company’s general account. In the
separate account investment options, the policyholder bears the entire risk of the investment
results. With some products, by maintaining certain premium level, policyholders may have the
advantage of various guarantees that may protect the death benefit from adverse investment
experience.
Universal Life Insurance Insurance coverage on the same basis as variable life, except that premiums, and the resulting
accumulated balances, are allocated only to the Company’s general account. With some products,
by maintaining a certain premium level, policyholders may have the advantage of various
guarantees that may protect the death benefit from adverse investment experience.
Dental
Disability
Accident & Health
Insurance
Vision
Insurance and ASO arrangements that assist employees, retirees and their families in maintaining
oral health while reducing out-of-pocket expenses.
Insurance and ASO arrangements for groups and individuals to provide benefits for income
replacement, payment of business overhead expenses or mortgage protection, in the event of the
disability of the insured.
Accident, critical illness or hospital indemnity coverage to the insured.
Insurance, ASO arrangements, and managed eye health and vision care solutions to assist
employees, retirees and their families in maintaining vision health while reducing out-of-pocket
expenses. Offered to commercial groups, individuals, health plans and government sponsored
programs through a nationwide provider network, retail optical chains and online eyewear
providers.
Retirement and Income Solutions
Our RIS business provides funding and financing solutions that help institutional customers mitigate and manage
liabilities primarily associated with their employee benefit programs using a spectrum of life and annuity-based insurance
and investment products.
We distribute RIS products and services through dedicated sales teams and relationship managers primarily comprised
of MetLife employees. We may sell products directly to benefit plan sponsors and advisors or through brokers, consultants
or other intermediaries. In addition, these sales professionals work with individual, group and global distribution areas to
better reach and service customers, brokers, consultants and other intermediaries.
Major Products
Stable Value Products
• General account guaranteed interest contracts (“GICs”) are designed to provide stable value
investment options within tax-qualified defined contribution plans by offering a fixed
maturity investment with a guarantee of liquidity at contract value for participant
transactions.
• Separate account GICs are available to defined contribution plan sponsors by offering
market value returns on separate account investments with a general account guarantee that
plan participants will always be able to transact in their accounts at contract value.
• Synthetic GICs or “wraps” are contracts available only to the sponsor of a participant-
directed defined contribution plan. The contract “wraps” a portfolio of investments owned
by the plan to provide a guarantee that plan participants will always be able to transact in
their accounts at contract value. Generally, a wrap contract means that participants will not
experience negative returns.
• Private floating rate funding agreements are generally privately-placed, unregistered
investment contracts issued as general account obligations with interest credited based on a
specified rate or agreed upon short-term benchmark rate. These agreements are used for
money market funds, securities lending cash collateral portfolios and short-term investment
funds.
7
Table of Contents
Annuities
Pension Risk
Transfers
General account and separate account annuities are offered in connection with defined
benefit pension plans which include single premium buyouts allowing for full or partial
transfers of pension liabilities.
• General account annuities include nonparticipating group contract benefits purchased for
retired employees or active employees covered under terminating or ongoing pension plans.
• Separate account annuities include both participating and non-participating group contract
benefits. Participating contract benefits are purchased for retired, terminated, or active
employees covered under active or terminated pension plans. The assets supporting the
guaranteed benefits for each contract are held in a separate account, however, the Company
fully guarantees all benefit payments. Non-participating contracts have economic features
similar to our general account product, but offer the added protection of an insulated
separate account. Under accounting principles generally accepted in the United States of
America (“GAAP”), these annuity contracts are treated as general account products.
Institutional
Income
Annuities
General account contracts that are guaranteed payout annuities purchased for employees upon
retirement or termination of employment. Contracts can be life or non-life contingent non-
participating contracts which do not provide for any loan or cash surrender value and, with
few exceptions, do not permit future considerations.
Structured
Settlements
Risk
Solutions
Longevity
Reinsurance
Solutions
Customized annuities designed to serve as an alternative to a lump sum payment in a lawsuit
initiated because of personal injury, wrongful death, or a workers’ compensation claim or
other claim for damages. Surrenders are generally not allowed, although commutations are
permitted in certain circumstances. Guaranteed payments consist of life contingent annuities,
term certain annuities and lump sums.
Longevity reinsurance is a risk mitigation solution for United Kingdom (“U.K.”) pension plan
sponsors and U.K. insurance companies that write pension risk transfer business, converting
uncertain future pension benefit obligations into a fixed stream of payments to MetLife over
the duration of the contract as opposed to a lump sum at inception in typical pension risk
transfer transactions.
Benefit
Funding
Solutions
Specialized life insurance products and funding agreements designed specifically to provide
solutions for funding postretirement benefits and company-, bank- or trust-owned life
insurance used to finance nonqualified benefit programs for executives.
Capital
Markets
Investment
Products
Asia
• Funding agreement-backed notes are offered in medium term note programs, under which
funding agreements are issued to special-purpose trusts that issue marketable notes in U.S.
dollars or foreign currencies. The proceeds of these note issuances are used to acquire funding
agreements with matching interest and maturity payment terms from certain subsidiaries of
MetLife, Inc. The notes are underwritten and marketed by major investment banks’ broker-
dealer operations and are sold to institutional investors.
• Funding agreement-backed commercial paper is issued by a special-purpose limited liability
company which deposits the proceeds under a master funding agreement issued to it by
Metropolitan Life Insurance Company (“MLIC”). The commercial paper is issued in U.S.
dollars or foreign currencies, receives the same short-term credit rating as MLIC and is
marketed by major investment banks’ broker-dealer operations.
• Funding agreements are issued by certain of our insurance subsidiaries to the Federal Home
Loan Bank of New York (“FHLBNY”) and to a subsidiary of the Federal Agricultural
Mortgage Corporation (“Farmer Mac.”)
Our Asia segment offers a broad range of products and services to both individuals and corporations, as well as to other
institutions, and their respective employees.
Our Asia operations are geographically diverse encompassing both developed and emerging markets. We operate in nine
jurisdictions throughout Asia, with our largest operation in Japan. We market our products and services through a range of
proprietary and third-party distribution channels.
8
Table of Contents
In Japan, our face-to-face channels including both career and general agency, continue to be critical to our overall
distribution strategy, catering to various needs of individual retail customers. Our competitive advantage in bancassurance is
based on robust distribution relationships with Japan’s very large banks, trust banks and various regional banks. Outside of
Japan, our distribution strategies vary by market and leverage a combination of career and general agencies, bancassurance
and direct marketing. In select markets, we also use independent brokers and our employee sales force to sell group products.
Major Products
Life Insurance
Whole and term life, endowments, universal and variable life, as well as group life products.
Accident & Health
Insurance
Full range of accident & health products, including hospitalization, cancer, critical illness,
disability, income protection and personal accident coverage.
Retirement and
Savings
Latin America
Fixed and variable annuities, as well as regular savings products.
Our Latin America segment offers a broad range of products to both individuals and corporations and other institutions
(including local, state and federal governments) and their respective employees. We offer government employees life,
medical insurance, as well as retirement and savings, and other products, and periodically submit bids to do so.
Our largest operations are in Mexico and Chile. We market our products and services through a multi-channel
distribution strategy which varies by geographic region and stage of market development.
We have an exclusive and captive agency distribution network which sells a variety of individual life, accident & health,
and pension products. Our direct marketing channel includes sponsors and telesales representatives selling mainly accident &
health and individual life products directly to consumers. We also work with brokers and independent agents on sales of
group and individual life, accident & health, group medical, dental and pension products, and worksite marketing.
Major Products
Life Insurance
Whole and term life, endowments, universal and variable life, as well as group life products.
Retirement and Savings Fixed annuities and pension products. Fixed income annuities provide for asset distribution needs.
Our savings-oriented pension products are primarily offered in Chile under a mandatory
privatized social security system.
Group and individual major medical, accidental, and supplemental health products, including
AD&D, hospital indemnity, medical reimbursement, and medical coverage for serious medical
conditions, as well as dental products.
Accident & Health
Insurance
Credit Insurance
Policies designed to fulfill certain loan obligations in the event of the policyholder’s death.
EMEA
Our EMEA segment offers products to individuals, corporations, other institutions, and their respective employees. See
Note 3 of the Notes to the Consolidated Financial Statements for information regarding the Company's dispositions of its
wholly-owned subsidiaries in Poland and Greece (collectively, “MetLife Poland and Greece”).
We operate across EMEA in both developed (Western Europe) and emerging (Central and Eastern Europe, Middle East
and Africa) markets. Our largest operations are in the U.K., France and the Gulf region. In more mature markets, we focus
our strategy on our preferred market segments to play a “niche” role. We also have a strong market presence in emerging
markets leveraging a multi-channel distribution strategy.
9
Table of Contents
Our businesses in EMEA use captive and independent agency, independent brokerage, bancassurance, corporate
solutions and direct-to-consumer distribution channels.
Major Products
Life Insurance
Accident & Health
Insurance
Retirement and
Savings
Credit Insurance
MetLife Holdings
Traditional and non-traditional life insurance products, such as whole and term life, endowments
and variable life products, as well as group term life programs in most markets.
Individual and group personal accident and supplemental health products, including AD&D,
hospital indemnity, scheduled medical reimbursement plans, and coverage for serious medical
conditions. In addition, we provide individual and group major medical coverage in select
markets.
Fixed annuities and pension products, including group pension programs in select markets.
Policies designed to fulfill certain loan obligations in the event of the policyholder’s death.
This segment consists of operations relating to products and businesses that we no longer actively market in the U.S.
These include variable, universal, term and whole life insurance, variable, fixed and index-linked annuities, and long-term
care insurance. It also includes assumed variable annuity guarantees from our former operating joint venture in Japan.
Similar to products offered by our Group Benefits business, except that these products were
historically marketed to individuals through various retail distribution channels. For a description
of these products, see “— U.S. — Group Benefits.”
Major Products
Variable, Universal
and Term Life
Insurance
Whole Life Insurance A benefit upon the death of the insured in return for the periodic payment of a fixed premium over
a predetermined period. Whole life insurance includes policies that provide a participation feature
in the form of dividends. Policyholders may receive dividends in cash, or apply them to increase
death benefits, increase cash values available upon surrender or reduce the premiums required to
maintain the contract in-force.
Variable Annuities
Variable annuities provide for asset accumulation and asset distribution needs. Variable annuities
allow the contractholder to allocate deposits into various investment options in a separate account,
as determined by the contractholder. In certain variable annuity products, contractholders may also
choose to allocate all or a portion of their account to the Company’s general account and are
credited with interest at rates we determine, subject to specified minimums. Contractholders may
also elect certain minimum death benefit and minimum living benefit guarantees for which
additional fees are charged and where asset allocation restrictions may apply.
Fixed and Indexed-
Linked Annuities
Fixed annuities provide for asset accumulation and asset distribution needs. Deposits made into
deferred annuity contracts are allocated to the Company’s general account and are credited with
interest at rates we determine, subject to specified minimums. Fixed income annuities provide a
guaranteed monthly income for a specified period of years and/or for the life of the annuitant.
Additionally, the Company has issued indexed-linked annuities which allow the contractholder to
participate in returns from equity indices.
Long-term Care
Protection against the potentially high costs of long-term health care services. Generally pays
benefits to insureds who need assistance with activities of daily living or have a cognitive
impairment.
Corporate & Other
Corporate & Other contains various start-up, developing and run-off businesses. Also included in Corporate & Other are:
the excess capital, as well as certain charges and activities, not allocated to the segments (including external integration and
disposition costs, internal resource costs for associates committed to acquisitions and dispositions and enterprise-wide
strategic initiatives), interest expense related to the majority of the Company’s outstanding debt, expenses associated with
certain legal proceedings and income tax audit issues, the elimination of intersegment amounts (which generally relate to
affiliated reinsurance, investment expenses and intersegment loans bearing interest rates commensurate with related
borrowings), and the Company’s investment management business (through which the Company provides public fixed
income, private capital and real estate investment solutions to institutional investors worldwide).
10
Table of Contents
Policyholder Liabilities
We establish, and carry as liabilities, actuarially determined amounts that are calculated to meet policy obligations when
a policy matures or is surrendered, an insured dies or becomes disabled or upon the occurrence of other covered events, or to
provide for future annuity payments. Our liabilities for future policy benefits and claims are established based on estimates by
actuaries of how much we will need to pay for future benefits and claims. For life insurance and annuity products, we
calculate these liabilities based on assumptions and estimates, including estimated premiums to be received over the assumed
life of the policy, the timing of the event covered by the insurance policy and the amount of benefits or claims to be paid. We
establish liabilities for claims and benefits based on assumptions and estimates of losses and liabilities incurred. Amounts for
actuarial liabilities are computed and reported on the consolidated financial statements in conformity with GAAP. For more
details on policyholder liabilities see “Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Summary of Critical Accounting Estimates — Liability for Future Policy Benefits” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Policyholder Liabilities.”
MetLife, Inc.’s insurance subsidiaries, including affiliated captive reinsurers, establish statutory reserves under methods
prescribed by the insurance laws of their respective domiciliary jurisdiction. These reserves are reported as liabilities, and we
expect them to be sufficient to meet policy and contract obligations, when taken together with expected future premiums and
interest at assumed rates. Statutory reserves and actuarial liabilities for future policy benefits reported under GAAP generally
differ due to the difference in accounting requirements.
U.S. state insurance laws and regulations require certain MetLife entities to submit an annual opinion and memorandum
of a qualified actuary. In it, the qualified actuary states that the statutory reserves and related actuarial amounts recorded in
support of specified policies and contracts, and the assets supporting such statutory reserves and related actuarial amounts,
adequately provide for the anticipated cash flow required to meet contractual obligations and related expenses.
Insurance regulators in many of the non-U.S. jurisdictions in which we operate require certain MetLife entities to prepare
and submit a sufficiency analysis of the reserves presented in the locally required regulatory financial statements. See “—
Regulation — Insurance Regulation — Policy and Contract Reserve Adequacy Analysis.”
Underwriting and Pricing
We use a variety of underwriting and pricing management controls. Our Global Risk Management Department develops
product pricing standards and oversees underwriting practices in MetLife’s insurance businesses. We also regularly conduct
experience studies to monitor assumptions against expectations, impose formal new product approval processes, periodically
update product profitability studies, and use reinsurance to manage our exposures, as appropriate. See “— Reinsurance
Activity.”
Underwriting
Our underwriters and actuaries use detailed underwriting policies, guidelines and procedures to assess and quantify
insurance risks, and determine the type and the amount of risk we are willing to accept.
Insurance underwriters consider an applicant’s medical history and other factors such as financial profile, foreign travel,
vocations and alcohol, drug and tobacco use. Group insurance underwriters generally evaluate the risk characteristics of the
prospective insured group, but may underwrite members of a group on an individual basis for certain voluntary products and
coverages. Our own employees generally perform our underwriting, but intermediaries review certain policies under
guidelines established by us. Generally, we are not obligated to accept any risk or group of risks from, or to issue a policy or
group of policies to, any employer or intermediary. We review requests for coverage on their merits and issue policies only
after we have examined and approved the particular risk or group under our underwriting guidelines.
We periodically review all our underwriting to maintain high standards of quality and consistency. Our reinsurers
generally have the right to audit our underwriting.
We use underwriting policies, guidelines, philosophies, and strategies that we intend to be competitive and suitable for
the customer, the agent and us, to facilitate quality sales, and to serve our customers’ needs while supporting our financial
strength and business objectives. We aim to ensure that underwriting risk levels are appropriately reflected in our product
pricing.
We continually review our underwriting policies, guidelines, philosophies, and strategies in light of applicable
regulations and to ensure that our policies remain competitive, support our marketing strategies and profitability goals, and
otherwise remain appropriate.
11
Table of Contents
Pricing
Product pricing reflects our globally-consistent standards. Global Risk Management and regional finance and product
teams price and oversee all of our insurance businesses. We base our pricing on the expected benefits payout which we
calculate through the use of assumptions for mortality, morbidity, expenses, persistency and investment returns and
macroeconomic factors such as inflation. We price investment-oriented products based on factors such as investment returns,
expenses, persistency, optionality, and possible variability of results.
Our pricing of certain products may include prospective and retrospective experience rating features. For prospective
experience rating, we evaluate past experience to determine future premium rates and we bear all prior year gains and losses.
For retrospective experience rating, we evaluate past experience to determine our cost of providing insurance for the
customer in light of any features that allow us to recoup certain losses or distribute certain gains back to the policyholder
based on prior years’ experience.
We base our rates for group benefit products on anticipated earnings and expenses for the book of business. We
generally re-evaluate renewals annually or biannually and re-price products to reflect our experience on such products.
We generally price many of our RIS products on demand. Our pricing reflects our expected investment returns, as well
as mortality, longevity and expense assumptions. RIS business is generally nonparticipating and illiquid, as policyholders
have few or no options or contractual rights to cash values. However, for products with liquidity provisions, such as stable
value, pricing reflects the contractholders’ ability to withdraw at book value over a period of time, as well as our ability to
reset rates periodically.
We generally must receive regulatory approval of rates for individual life insurance products. Such rates are highly
regulated, even where we are not required to obtain advance regulatory approval. We generally renew such products
annually, and they may include pricing terms that are guaranteed for a certain period of time.
We price individual disability income products based on anticipated results by occupation.
Our rates for fixed and variable annuity products are also highly regulated, and we also generally must receive regulatory
approval of them. Such products generally include penalties for early withdrawals and policyholder benefit elections to tailor
benefits to policyholder needs. We periodically reevaluate the costs of such options and adjust pricing levels on our
guarantees. We may also reevaluate the type and level of guarantee features we offer.
We continually review our pricing guidelines in light of applicable regulations and to ensure that our policies remain
competitive, support our marketing strategies and profitability goals, and otherwise remain appropriate.
Reinsurance Activity
We enter into reinsurance agreements primarily as a purchaser of reinsurance for our various insurance products. We
also provide reinsurance for some third parties’ insurance products. We participate in reinsurance in order to limit losses,
minimize exposure to significant risks, and provide additional capacity for future growth. Our reinsurance covers individual
risks, group risks, or defined blocks of business, primarily on a coinsurance, yearly renewable term, excess, or catastrophe
excess basis. The extent of our retained risks depends on our risk evaluation, subject, in certain circumstances, to maximum
retention limits based on our risk appetite. We also cede first dollar mortality risk under certain contracts. We reinsure both
mortality and other risks. We obtain reinsurance for capital requirement purposes and when its economic impact makes it
appropriate to do so.
We also reinsure for risk and capital management purposes among affiliates, including affiliated captive reinsurers and
affiliated offshore insurance companies. Captive reinsurers are affiliated insurance companies licensed as such under the
Special Purpose Financial Captive law adopted by several states, including Vermont and South Carolina. Captive insurers’
very narrow business plans restrict most or all of their activity to reinsuring business from their affiliates. See “Management’s
Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The
Company — Capital — Affiliated Captive Reinsurance Transactions.”
For information regarding reinsurance by segment, our catastrophic coverage, and ceded reinsurance recoverable
balances, included in premiums, reinsurance and other receivables on the consolidated balance sheets, see Note 6 of the Notes
to the Consolidated Financial Statements.
12
Table of Contents
Regulation
Overview
In the U.S., state regulators primarily regulate our life insurance companies, with additional federal regulation of some of
our products and services. The insurance holding company laws of various U.S. jurisdictions apply to MetLife, Inc. and its
U.S. insurance subsidiaries. Furthermore, consumer protection laws, privacy, anti-money laundering, securities, commodities,
broker-dealer and investment adviser regulations, environmental and unclaimed property laws and regulations, and the
Employee Retirement Income Security Act of 1974 (“ERISA”) also apply to some of MetLife’s operations, products and
services.
Outside of the U.S., insurance regulatory authorities in the jurisdictions in which our insurance businesses are located or
operate principally regulate those businesses. In addition, securities, pension, and other authorities oversee our investment
and pension companies where they operate. Regulators also subject our non-U.S. insurance businesses to current and
developing solvency regimes, which impose various capital and other requirements. Additionally, regulators may enhance
their capital standards and supervision, and impose additional non-U.S. and global regulatory initiatives.
We expect the scope and extent of regulation and regulatory oversight generally to continue to increase. The regulatory
environment and changes in laws in the jurisdictions in which we operate could materially harm our results of operations.
Insurance Regulation
Insurance regulation generally aims to protect policyholders and ensure insurance company solvency. Insurance
regulators increasingly seek information about the potential impact of activities on holding company systems as a whole, and
some jurisdictions have asserted “group-wide” supervision, including model laws and regulations developed through the
National Association of Insurance Commissioners’ (“NAIC”) Solvency Modernization Initiative. See “— National
Association of Insurance Commissioners” regarding group-wide supervision.
Each of MetLife’s insurance subsidiaries is licensed and regulated in each jurisdiction where it conducts insurance
business. The extent of insurance regulation in such jurisdictions varies, but most jurisdictions regulate the financial aspects
and business conduct of insurers through broad administrative powers with respect to, among other things:
•
•
licensing companies and agents to transact business;
calculating the value of assets to determine compliance with statutory requirements;
• mandating certain insurance benefits;
•
•
•
•
•
•
•
•
•
•
•
•
regulating certain premium rates;
reviewing and approving certain policy forms, including required policyholder disclosures;
regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales
practices, distribution arrangements and payment of inducements, and identifying and paying to the states or local
authorities benefits and other property that is not claimed by the owners;
regulating advertising;
protecting and safeguarding personal information and other sensitive data, including through cybersecurity
standards;
establishing statutory capital and reserve requirements and solvency standards;
specifying the conditions under which a ceding company can take credit for reinsurance in its statutory financial
statements (i.e., reduce its reserves by the amount of reserves ceded to a reinsurer);
fixing maximum interest rates on insurance policy loans and minimum guaranteed crediting rates on life insurance
policies and annuity contracts;
adopting and enforcing standards with respect to the sale of annuities and other insurance products;
approving changes in control of insurance companies;
restricting the payment of dividends and other transactions between affiliates; and
regulating the types and amounts of investments.
13
Table of Contents
Each insurance subsidiary must file reports, generally including detailed annual financial statements, with insurance
regulatory authorities in each of the jurisdictions in which it does business. Such authorities also periodically examine its
operations and accounts. These subsidiaries must also file, and in many jurisdictions and in some lines of insurance obtain
regulatory approval of, rates and policy forms relating to the insurance written in the jurisdictions in which they operate.
Insurance, securities, and other regulatory authorities, other law enforcement agencies, and attorneys general, review
MetLife, Inc. and its insurance subsidiaries for compliance with laws and regulations regarding the conduct of our insurance
and securities businesses. We cooperate with such inquiries and take corrective action when warranted. See Note 21 of the
Notes to the Consolidated Financial Statements.
U.S. Federal Initiatives
U.S. federal initiatives can affect our business in a variety of ways, including regulation of financial services,
securities, derivatives, pensions, health care, money laundering, foreign sanctions and corrupt practices, and taxation. For
instance, legislators and policymakers have proposed various forms of direct and indirect federal regulation of insurance
from time to time, such as proposals for the establishment of an optional federal charter for insurance companies. See “Risk
Factors — Regulatory and Legal Risks — Changes in Laws or Regulation, or in Supervisory and Enforcement Policies,
May Reduce Our Profitability, Limit Our Growth, or Otherwise Adversely Affect Us.”
The Inflation Reduction Act, signed into law by President Biden on August 16, 2022, included a number of tax-related
provisions, such as (i) a fifteen percent alternative minimum tax rate on adjusted financial statement income and (ii) a one
percent excise tax on certain corporate stock buybacks. Both provisions became effective on January 1, 2023 and are not
expected to have a material impact on our results of operations.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) increased the potential federal role
in regulating businesses such as ours, including in the following ways:
•
•
•
The Financial Stability Oversight Council may designate certain financial companies as non-bank systemically
important financial institutions (“non-bank SIFI”) subject to supervision by the Board of Governors of the Federal
Reserve System (“Federal Reserve Board”) and the Federal Reserve Bank of New York (collectively with the
Federal Reserve Board, the “Federal Reserve”).
The Federal Insurance Office (“FIO”) within the Department of the Treasury may participate in the negotiations of
international insurance agreements with foreign regulators for the U.S., collect information about the insurance
industry, and recommend prudential standards.
If an insurance holding company such as MetLife, Inc. or another non-insurance financial institution were to become
insolvent or were in danger of defaulting on its obligations, and regulators determined that this would have serious
adverse effects on financial stability in the U.S., then the Federal Deposit Insurance Corporation (“FDIC”) may
liquidate such a company as receiver. In that case, the Bankruptcy Code, which ordinarily governs liquidations,
would not apply. The FDIC’s purpose would be to mitigate the systemic risks the institution’s failure poses. This is a
different objective from that of a bankruptcy trustee under the Bankruptcy Code. In such a liquidation, the holders of
such company’s debt could in certain respects be treated differently than under the Bankruptcy Code. The FDIC has
established rules relating to the priority of creditors’ claims and the potentially dissimilar treatment of similarly
situated creditors. These provisions could apply to some financial institutions whose outstanding debt securities we
hold in our investment portfolios. However, state insurance laws would continue to apply to an insurance company
resolution.
•
Dodd-Frank provisions may also affect the investments and investment activities of MetLife, Inc. and its
subsidiaries, including imposing federal regulation of such activities.
Dodd-Frank and its implementing regulations have changed since the law was adopted. As a result of these changes,
and potential changes, we cannot identify all the risks posed and opportunities presented, if any, to our businesses. See
“Risk Factors — Regulatory and Legal Risks — Changes in Laws or Regulation, or in Supervisory and Enforcement
Policies, May Reduce Our Profitability, Limit Our Growth, or Otherwise Adversely Affect Us.”
Until January 2021, the McCarran–Ferguson Act largely exempted insurance from U.S. antitrust laws. However, the
Competitive Health Insurance Reform Act amended the McCarran-Ferguson Act such that U.S. antitrust laws now apply to
the “business of health insurance” and U.S. regulatory authority expanded accordingly. We expect regulatory oversight and
litigation risk for U.S. products, including dental and vision, to increase.
14
Table of Contents
Health Care Regulation
The U.S. excise tax known as the “health insurer fee” was in force for the 2020 calendar year. The health insurer fee
no longer applies for calendar years beginning after December 31, 2020. However, demand for and pricing of products
remain subject to tax uncertainty. Federal health care statutes and related regulation have imposed increased and
unpredictable costs on certain products and may have additional adverse effects. They have also harmed our competitive
position, as these rules have a disparate impact on our products compared to products offered by our not-for-profit
competitors. See “Risk Factors — Regulatory and Legal Risks — Changes in Laws or Regulation, or in Supervisory and
Enforcement Policies, May Reduce Our Profitability, Limit Our Growth, or Otherwise Adversely Affect Us.”
Guaranty Associations and Similar Arrangements
Many jurisdictions in which our insurance subsidiaries transact business require life and health insurers to participate
in guaranty or similar associations. These arrangements pay certain insurance benefits owed by impaired, insolvent or
failed insurers. Guaranty associations levy assessments, up to prescribed limits, on all member insurers in a particular
jurisdiction on the basis of the proportionate share of the premiums written by member insurers in the lines of business in
which the impaired, insolvent or failed insurer engaged. In addition, certain jurisdictions have government owned or
controlled organizations providing life and health insurance to their citizens, whose activities could place additional stress
on the adequacy of guaranty fund assessments. Many of these organizations have the power to levy assessments similar to
those of the guaranty associations. Some jurisdictions permit member insurers to recover assessments paid through full or
partial premium tax offsets. We have established liabilities for guaranty fund assessments that we consider adequate.
Insurance Regulatory Examinations and Other Activities
U.S. state insurance departments periodically examine the books, records, accounts, and business practices of their
domiciled insurers. State insurance departments may also conduct examinations of non-domiciliary insurers licensed in
their states.
In 2019, MetLife entered into a consent order with the New York State Department of Financial Services (“NYDFS”)
relating to unclaimed property following an open market conduct quinquennial exam, under which it paid a fine and
customer restitution, and submitted remediation plans for approval. Except for this consent order or as described in Note 21
of the Notes to the Consolidated Financial Statements, during the years ended December 31, 2022, 2021 and 2020, MetLife
did not receive any material adverse findings resulting from state insurance department examinations of its insurance
subsidiaries.
Regulatory authorities in a small number of states, the Financial Industry Regulatory Authority (“FINRA”) and,
occasionally, the U.S. Securities and Exchange Commission (the “SEC”) have conducted examinations and/or
investigations or made inquiries relating to sales of our individual life insurance policies, annuities or other products. These
examinations, investigations and/or inquiries often focus on the conduct and/or supervision of particular financial services
representatives, the sale of unregistered or unsuitable products, the misuse of client assets, or sales and replacements of
annuities and certain riders on such annuities. In 2021 and 2022, FINRA conducted routine examinations of two of our
broker-dealer affiliates and there were no material adverse findings. Over the past several years, we resolved these (and a
number of investigations by other regulators) for monetary payments and certain other relief, including restitution
payments. We may continue to receive notice of, and may resolve, further investigations and actions on these matters in a
similar manner.
Insurance standard-setting and regulatory support organizations, including the NAIC, encourage insurance supervisors
to establish Supervisory Colleges. These organizations facilitate cooperation and coordination among insurance supervisors
to enhance their understanding of the risk profile of U.S.-based insurance groups with international operations. MetLife’s
lead state regulator, the NYDFS, annually chairs Supervisory College meetings that MetLife’s key U.S. and non-U.S.
regulators attend.
Regulators supervise our non-U.S. insurance and pension businesses through periodic examinations of insurance
company books and records, financial reporting requirements, market conduct examinations and policy filing requirements.
The European Insurance and Occupational Pensions Authority along with European legislation, requires European
regulators, such as the Central Bank of Ireland, to establish supervisory forums for European Economic Area (“EEA”)-
based insurance groups with significant European operations, including MetLife. These forums facilitate cooperation and
coordination among European supervisors to enhance their understanding of an insurance group’s risk profile.
In addition, regulators have scrutinized insurers’ claims payment practices. See Note 21 of the Notes to the
Consolidated Financial Statements for further information regarding group annuity benefits and unclaimed property
inquiries.
15
Table of Contents
Policy and Contract Reserve Adequacy Analysis
Our U.S. insurance subsidiaries, including affiliated captive reinsurers, must annually analyze their statutory reserves
adequacy. In each case, a qualified actuary must submit an opinion that states that the statutory reserves make adequate
provision, according to accepted actuarial standards of practice, for the anticipated cash flows required by the contractual
obligations and related expenses of the U.S. insurance subsidiary. The actuary considers the adequacy of the statutory
reserves in light of the assets held by the insurer with respect to such reserves and related actuarial items, such as the
investment earnings on such assets and the consideration the insurer anticipates receiving and retaining under the related
policies and contracts. We may increase reserves in order to submit such an opinion without qualification. Our U.S.
insurance subsidiaries that must provide these opinions have done so without qualifications since this requirement began.
Many of our non-U.S. insurance operations must also analyze the adequacy of their statutory reserves. In most of those
cases, a locally qualified actuary must submit an analysis of the likelihood that the reserves make adequate provision for
the insurer’s associated contractual obligations and related expenses. Regulatory and actuarial analytic standards vary
widely.
National Association of Insurance Commissioners
The NAIC assists U.S. state insurance regulatory authorities to serve the public interest and achieve their regulatory
goals. State insurance regulators may act independently or adopt regulations proposed by the NAIC. State insurance
regulators and the NAIC regularly re-examine existing insurance laws and regulations. State insurance regulators establish
standards and best practices, conduct peer reviews, and coordinate their regulatory oversight through the NAIC. The NAIC
also provides standardized insurance industry accounting and reporting guidance through its Accounting Practices and
Procedures Manual (the “Manual”), which states have largely adopted by regulation. However, individual states establish
statutory accounting principles, which may differ from the Manual. Changes to the Manual or modifications by the various
state insurance departments may affect the statutory capital and surplus of MetLife, Inc.’s U.S. insurance subsidiaries.
U.S. state insurance holding company laws and regulations are generally based on the NAIC’s Insurance Holding
Company System Regulatory Act and Regulation (“Model Holding Company Act and Regulation”). These vary from
jurisdiction to jurisdiction, but generally require a controlled insurance company (i.e., insurers that are subsidiaries of
insurance holding companies) to register and file reports with state regulatory authorities on its capital structure, ownership,
financial condition, intercompany transactions and general business operations. State holding company laws require the
ultimate controlling person of a U.S. insurer to file an annual enterprise risk report with the lead state of the insurance
holding company system. This report identifies risks likely to have a material adverse effect upon the financial condition or
liquidity of the insurer or its insurance holding company system as a whole. Each of our insurance subsidiaries’ domiciliary
states has enacted laws to implement these requirements, including the enterprise risk reporting requirement. The holding
company laws also authorize state insurance commissioners to act as global group-wide supervisors for internationally
active insurance groups (“IAIGs”), as well as other insurers that choose to opt in for group-wide supervision. These laws
provide confidentiality protection for communications with the group-wide supervisor. All states have adopted laws and
regulations enhancing group-wide supervision. In 2020, the NYDFS amended its laws to permit the New York
Superintendent of Financial Services (“Superintendent”) to act as a group-wide supervisor for IAIGs.
In furtherance of the NAIC’s “Solvency Modernization Initiative,” the NAIC has updated model acts and regulations
to address insurance company financial regulation, as discussed below, and, in particular, capital requirements; corporate
governance and risk management practices; group supervision; liquidity stress testing, statutory accounting and financial
reporting; and reinsurance.
The NAIC’s Corporate Governance Annual Disclosure Model Act, which all states have adopted, requires insurers to
annually file detailed information regarding their corporate governance policies.
All states have also adopted the NAIC’s Risk Management and Own Risk and Solvency Assessment Model Act, which
requires insurers to maintain a risk management framework and to document an internal own risk and solvency assessment
(“ORSA”) of its material risks in normal and stressed environments. MetLife, Inc. has submitted on behalf of the enterprise
an ORSA summary report to the NYDFS annually since this requirement became effective.
The NAIC has also approved a valuation manual containing a principle-based approach to the calculation of life
insurance reserves (the “Valuation Manual”). Principle-based reserving (“PBR”) is designed to better address reserving for
life insurance and annuity products, and it has been adopted by all of our U.S. insurance subsidiaries’ domiciliary states.
The NYDFS promulgated a regulation in 2019 that affirms the Superintendent’s authority to deviate from the Valuation
Manual to adjust the reserves of a New York domestic life insurance company, such as MLIC, if the NYDFS determines
that an alternative requirement would be in the best interest of New York policyholders.
16
Table of Contents
The NAIC has been focused on a macro-prudential initiative since 2017, which is intended to enhance risk
identification efforts by building on the state-based regulation system. In furtherance of this initiative, the NAIC adopted
changes to its Statutory Annual Statement reporting, effective for year-end 2019, to improve liquidity risk monitoring. The
NAIC also adopted amendments to the Model Holding Company Act and Regulation that implement requirements related
to a liquidity stress-testing framework for certain large U.S. life insurers and insurance groups. The applicability of the
framework is based on amounts of certain types of business written or material exposure to certain investment transactions,
such as derivatives and securities lending. The framework is consistent with MetLife’s liquidity risks policies and
procedures, and is expected to have no impact on MetLife. As of January 1, 2023, the holding company amendments have
been adopted by multiple states, including six of our domiciliary states, and they are expected to be broadly adopted in the
future.
We use capital markets solutions to finance a portion of our statutory reserve requirements for several products. These
include level premium term life products subject to the NAIC’s Valuation of Life Insurance Policies Model Regulation
(commonly referred to as Regulation XXX), universal and variable life policies with secondary guarantees (“ULSG”)
subject to NAIC Actuarial Guideline 38 (commonly referred to as Guideline AXXX), and MLIC’s closed block. In order to
address the use of captives for policies covered by Regulation XXX and Guideline AXXX, the NAIC adopted Actuarial
Guideline 48 (“AG 48”). This guideline has enhanced the statutory financial statement disclosure of an insurer's use of
captives and has narrowed the types of assets permitted to back statutory reserves that are required to support the insurer’s
future obligations. AG 48 also requires the actuary of a ceding insurer to opine on the assuming insurer’s collateral
associated with the treaty and to issue a qualified opinion if the assuming entity is not complying with the requirements of
AG 48.
The NAIC’s Term and Universal Life Insurance Reserve Financing Model Regulation codifies the same substantive
requirements as AG 48, as amended by the NAIC in 2016, and establishes uniform, national standards governing reserve
financing arrangements pertaining to the term life and universal life insurance policies with secondary guarantees. The
model regulation became an NAIC accreditation standard on September 1, 2022, with enforcement beginning on January 1,
2023, although states can use AG 48 to satisfy the accreditation requirement.
We cannot predict the capital and reserve impacts, compliance costs, or other effects these initiatives will have on our
business, financial condition or results of operations.
Surplus and Capital
Insurers must maintain their capital and surplus at or above minimum levels prescribed by the laws of their respective
jurisdictions. Regulators generally have discretionary authority to limit or prohibit an insurer’s sales to policyholders if the
insurer has not maintained minimum surplus or capital or if they find that the further transaction of business would be
hazardous to policyholders.
State insurance statutes also typically restrict the dividends or other distributions an insurance company subsidiary may
pay to its parent companies and limit the transactions between an insurer and its affiliates. Dividends in excess of
prescribed limits and transactions above a specified size between an insurer and its affiliates require the approval of the
insurance regulator in the insurer’s state of domicile. See “Management’s Discussion and Analysis of Financial Condition
and Results of Operations — Liquidity and Capital Resources — MetLife, Inc. — Liquidity and Capital Sources —
Dividends from Subsidiaries.” See also “Dividend Restrictions” in Note 16 of the Notes to the Consolidated Financial
Statements for further information regarding such limitations.
Non-U.S. jurisdictions also restrict the amount of such dividends and other distributions. For example, a portion of the
annual earnings of our Japan operations may be repatriated each year, and may further be distributed to MetLife, Inc. as a
dividend. We may determine not to repatriate profits from the Japan operations or to repatriate a reduced amount in order
to maintain or improve the solvency of the Japan operations or for other reasons. In addition, the Financial Services
Agency in Japan (“FSA”) may limit or not permit profit repatriations or other transfers of funds to the U.S. if such transfers
would be detrimental to the solvency or financial strength of our Japan operations or for other reasons.
For developments that could affect our ratio of free cash flow to adjusted earnings results, and thus our surplus and
capital, see “Risk Factors.”
17
Table of Contents
Risk-Based Capital
Most of our U.S. insurance subsidiaries are subject to risk-based capital (“RBC”) requirements developed by the
NAIC and adopted by their respective domiciliary states. Insurers calculate RBC annually based on a formula that
applies factors to various asset, premium, claim, expense and statutory reserve items, taking into account asset,
insurance, interest rate, and market and business risk characteristics. Regulators use the formula as an early warning tool
to identify insurers that may be inadequately capitalized for purposes of initiating regulatory action, and not as a means
to rank insurers generally. State insurance laws provide insurance regulators the authority to require various actions by,
or take various actions against, insurers whose total adjusted capital does not meet or exceed certain RBC levels. As of
the date of the most recent annual statutory financial statements filed with insurance regulators, the total adjusted capital
of each of our subsidiaries subject to these requirements was in excess of each of these RBC levels. See “Statutory
Equity and Income” in Note 16 of the Notes to the Consolidated Financial Statements and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company —
Capital — Statutory Capital and Dividends.”
The NYDFS issues annual letters on Special Considerations (each, an “SCL”) to New York-licensed insurance
companies, including MLIC, that affect year-end asset adequacy testing. An SCL could mandate assumption changes
that would require us to increase, or influence our decision to release, certain asset adequacy reserves, which could
materially impact our statutory capital and surplus. No changes were made to our asset adequacy reserves in either 2022
or 2021 as a result of the SCL. See “Statutory Equity and Income” in Note 16 of the Notes to the Consolidated Financial
Statements.
We calculate our internally defined “Statement-Based Combined RBC Ratio” by dividing the sum of total adjusted
capital for MetLife, Inc.’s principal U.S. insurance subsidiaries, excluding American Life Insurance Company
(“American Life”), by the sum of company action level RBC for such subsidiaries, including SCL considerations. Our
Statement-Based Combined RBC Ratio was in excess of 340% and in excess of 360% at December 31, 2022 and 2021,
respectively. By contrast, we calculate an “NAIC-Based Combined RBC Ratio” based on such subsidiaries’ statutory-
based filed financial statements and NAIC capital and reserving standards. This NAIC-Based Combined RBC Ratio was
in excess of 360% and in excess of 380% at December 31, 2022 and 2021, respectively. We are not aware of any
upcoming NAIC adoptions or state insurance department regulation changes that would have a material impact on our
NAIC-Based Combined RBC Ratio.
The NAIC adopted revisions to certain factors used to calculate Life RBC, which is the denominator of the RBC
ratios, in light of changes to U.S. tax laws in recent years. These revisions have resulted in increased RBC charges and
reduced our RBC ratios. The NAIC has approved RBC revisions for corporate bonds, real estate equity and longevity
risk that took effect at year-end 2021, which had a modest net positive RBC impact on us. The NAIC has also approved
an RBC update for mortality risk that took effect at year-end 2022, which had a modest positive impact on our reported
RBC ratios.
The NAIC developed a group capital calculation (“GCC”) tool using an RBC aggregation methodology for all
entities within an insurance holding company system, including non-U.S. entities. The NAIC amended the Model
Holding Company Act and Regulation to adopt the GCC Template and Instructions and to implement the annual GCC
filing requirement with an insurance group’s lead state regulator. The filing requirement becomes effective when the
holding company act amendments are adopted by the state where an insurance group’s lead state regulator is located. A
bill is pending in the New York State legislature to adopt such amendments. We cannot predict what impact this
regulatory tool may have on our business.
Solvency Regimes
Our insurance business throughout the EEA is subject to the Solvency II Directive and its implementing rules. These
cover the capital adequacy, risk management and regulatory reporting for insurers and reinsurers. Solvency II harmonizes
insurance regulation across the European Union (“EU”). Each EEA member state has transposed the Solvency II Directive
into its regulatory architecture. Its capital requirements are forward-looking and based on the risk profile of each individual
insurance company in order to promote comparability, transparency and competitiveness. In line with the requirements,
impacted MetLife entities calculate and report their solvency capital requirement using a standard formula prescribed by
the Solvency II Directive and further regulation by the European Commission.
18
Table of Contents
The U.K. ceased to be a member of the EU in January 2020 and is no longer subject to EU law. While discussions
continue between the U.K. and the EU on a Memorandum of Understanding (“MoU”) for financial services, there is no
clear timeline for completion. In the meantime, the U.K. government has begun the process of reviewing its regulatory
framework.It is likely that the U.K.’s domestic prudential regime may begin to diverge from the Solvency II Directive, but
it is still unclear if it will do so in a way that would prevent a future MoU or have a material impact on the supervision of
insurers. Similarly, the EU institutions have undertaken their own review of Solvency II. The European Commission and
the European Council have developed positions and are awaiting the Parliament’s report to start trialogue negotiations.
The full extent of the changes will only be known once the package of legislative reforms is finalized. We do not expect
any changes to Solvency II resulting from this legislative process to be finalized and transposed into EEA member states’
respective domestic legislation prior to 2024.
Mexico has adopted a Solvency II-type regulatory framework which imposes reserve and capital requirements and
corporate governance to foster transparency. In line with the requirements of the local Solvency II, insurance companies
calculate and report their capital requirement using a standard formula designed by the local regulators (“CNSF”). In
addition, as required, certain MetLife entities must submit annual ORSA reports to the CNSF on an ongoing basis.
In Chile, the law implementing Solvency II-like regulation continues in the studies stage. The implementation date for
the new solvency regime has not yet been set; however, it could be in force within four years after the final regulation is
published. MetLife Chile implemented governance changes and risk policies to comply with prior regulatory changes.
MetLife Chile also submitted its ORSA regular report to the regulator in June 2022.
The Superintendence of Private Insurance, the Brazilian insurance regulator, has established an insurance framework
for minimum capital requirements based on risk, criteria for investment activities, a formal risk management function, and
a formal enterprise risk management framework. MetLife Brazil has formalized the designation of a local risk manager and
implemented governance structures and risk management framework components in accordance with local regulatory
requirements.
Japanese law requires insurers to maintain solvency standards to protect policyholders and to support their own
financial strength. Most Japanese life insurers maintain a solvency margin ratio well in excess of the legally mandated
minimum. In addition, we expect Japan to adopt an economic value-based solvency regime in 2025.
In China, the business of our joint venture (as well as the industry) has implemented China Risk Oriented Solvency
System (“C-ROSS”), a risk-based solvency regime. Like Solvency II, C-ROSS focuses on risk management and has three
pillars (strengthen quantitative capital requirements, enhance qualitative supervision and establish a governance and market
discipline process). On December 30, 2021, the China Banking and Insurance Regulatory Commission (“CBIRC”) issued
the Regulatory Rules for the Solvency of Insurance Companies (II) (“Rules II”), marking completion of the buildout of C-
ROSS Phase II. CBIRC will determine a transition period policy based on actual circumstances, allowing for a step-by-step
implementation of some of the regulatory rules, with full implementation to be in place by no later than 2025. Our joint
venture will continue strengthening its solvency management in accordance with the revised rules.
The Korea Financial Supervisory Service implemented a new solvency system, the Korean Insurance Capital Standard,
in January 2023. This system reflects the International Association of Insurance Supervisors (“IAIS”) global Insurance
Capital Standard and incorporates certain product portfolio and other features specific to the Korean market and includes
mark-to-market valuation.
IAIS
The IAIS is a voluntary membership association of insurance supervisors and regulators. It is the global standard-
setting body responsible for developing and assisting in the implementation of principles, standards and guidance, as well
as supporting material, for the supervision of the insurance sector. The IAIS is a member of the Financial Stability Board
(“FSB”), an international entity established to coordinate, develop and promote regulatory, supervisory and other financial
sector policies in the interest of financial stability. The IAIS participates in the FSB’s initiative to identify and manage
systemic risk globally. The IAIS has adopted a holistic framework for the assessment and mitigation of systemic risk in the
global insurance sector (the “Holistic Framework”). The framework monitors the build-up of vulnerabilities at
jurisdictional and global levels to address any such risk through the application of enhanced supervisory measures based on
existing insurance core principles and the common framework for supervision of IAIGs. In December 2022, the FSB
endorsed the Holistic Framework and discontinued the designation of globally systemically important insurers.
An IAIS proposal becomes effective when it is enacted through legislation or regulation in the applicable jurisdiction.
As MetLife, Inc. is not a U.S. non-bank SIFI, the impact on MetLife, Inc. of the IAIS’s global proposals is uncertain.
19
Table of Contents
Diversity and Corporate Governance
The NAIC and state insurance regulators are evaluating issues related to diversity within the insurance industry. In
New York, the NYDFS expects the insurers it regulates to make diversity of their leadership a business priority and a key
element of their corporate governance. The NYDFS collected data from insurers that met certain New York premium
thresholds, including MetLife, Inc. and certain of its subsidiaries, regarding the diversity of their corporate boards and
management. The NYDFS plans to publish such data on an aggregate basis to measure progress in the industry, and it now
includes diversity-related questions in its examination process. The NAIC is also evaluating issues related to race, diversity
and inclusion, and it is examining practices in the insurance industry in order to determine how barriers are created that
disadvantage people of color or historically underrepresented groups.
New York Insurance Regulation 210
Insurance Regulation 210 establishes standards for the determination and any readjustment of non-guaranteed elements
(“NGEs”) that may vary at the insurer’s discretion for life insurance policies and annuity contracts delivered or issued for
delivery in New York. NGEs include cost of insurance for universal life insurance policies, as well as interest crediting
rates for annuities and universal life insurance policies. The regulation requires insurers to notify policyholders at least 60
days in advance of any change in NGEs that is adverse to policyholders and, with respect to life insurance, to notify the
NYDFS at least 120 days prior to any such changes. The regulation also requires insurers to inform the NYDFS annually of
any changes adverse to policyholders made in the prior year. The regulation generally prohibits insurers from increasing
profit margins for in-force policies or adjusting NGEs in order to recoup past losses.
Cybersecurity, Privacy and Data Protection Regulation
We are subject to a variety of laws and regulations at the local, state, federal and international level regarding the
collection, storage, use, retrieval, processing, disclosure, protection and security of personal information, including health-
related and customer information and employee data. Various local, state and federal laws in the U.S. and around the world
require companies such as ours to inform consumers of data collection, storage and processing practices and further dictate
whether, how, and under what circumstances we may transfer, process or receive personal information, the interpretation and
scope of which are constantly evolving and vary significantly from jurisdiction to jurisdiction. We are also subject to laws
and regulations governing the security and integrity of our information systems and the non-public information stored therein,
many of which require the implementation and maintenance of a comprehensive information security program, and require
notification to affected individuals and regulators of security breaches and other cyber incidents. Given growing
cybersecurity risks and threats posed to information and financial systems by nation-states, terrorist organizations and
independent criminal actors in recent years, insurance and other regulators have increased focus on cybersecurity practices,
and regulatory and legislative activity in the areas of privacy, data protection and cybersecurity continues to increase
worldwide. Below, we highlight some of the key data protection and cybersecurity laws and regulations to which we are
subject.
20
Table of Contents
Cybersecurity
The NYDFS promulgated the New York Cybersecurity Requirements for Financial Services Companies (the
“Regulation”) to promote the protection of customer information and information technology systems by establishing and
regulating cybersecurity requirements for banking and insurance entities under the NYDFS’s jurisdiction. In general, the
Regulation requires covered entities, such as our insurance entities licensed in New York, to assess risks associated with
their information systems and establish and maintain a cybersecurity program designed to assess those risks and protect the
confidentiality, integrity and availability of such systems and data. Specifically, the Regulation provides for, among other
things: (i) technical safeguards and controls relating to the governance framework for a cybersecurity program; (ii) risk-
based policies, procedures and minimum standards for technology systems for data protection; (iii) minimum standards for
cyber breach responses, including notice to the NYDFS of certain material events; (iv) designation of a chief information
security officer and other qualified cybersecurity personnel; (v) oversight of third party service providers with access to the
information systems and nonpublic personal information of covered entities, including via implementation of written
policies and procedures to evaluate the third party service provider’s cybersecurity practices; and (vi) identification and
documentation of material deficiencies, remediation plans and annual certifications of regulatory compliance. The NYDFS
has proposed amendments to the Regulation which, if adopted, would require the implementation of new reporting,
governance and oversight measures, and enhanced cybersecurity safeguards (such as annual audits, vulnerability
assessments, and password controls and monitoring), and mandate notifications in the event a covered entity makes a
cyber-ransom payment. We cannot predict whether the amendments will be adopted, what form they will take, or what
effect they would have on our business or compliance costs. Covered entities that fail to comply with the Regulation may
be subject to enforcement actions brought by the NYDFS, the result of which could lead to civil penalties, and other legal
and reputational costs.
The NAIC adopted the Insurance Data Security Model Law (the “Cybersecurity Model Law”), which requires insurers
and other entities licensed by a state insurance department to develop, implement and maintain a risk-based information
security program. The Cybersecurity Model Law also establishes standards for data security and for investigation of and
notification to insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain
nonpublic information. Several states have adopted the Cybersecurity Model Law, including four of our insurance
subsidiaries’ domiciliary states, and more may adopt it in the future, requiring further compliance and oversight efforts.
Such compliance efforts may present an increasing demand on our systems and resources, and require significant new and
ongoing investments, including investments in compliance processes, personnel, and technical infrastructure.
On May 12, 2021, President Biden signed Executive Order 14028 on Improving the Nation’s Cybersecurity (the
“Order”) to strengthen the U.S. federal government’s cybersecurity defenses and that of its vendors. The Office of
Management and Budget (“OMB”) has released several memoranda expounding on various aspects of the Order; for
example, OMB released the federal government’s strategy to move towards Zero Trust cybersecurity principles on January
26, 2022. While MetLife provides employee benefits to several of the agencies that are subject to the Order, it is not
directly subject to the new requirements at this time, based on the scope of the Order. While the Order is primarily aimed at
technology and software providers and suppliers, there are efforts underway within a whole-of-government approach to
combat cyber-attacks and ransomware attacks, which could potentially impose additional cybersecurity requirements on
MetLife and other federal contractors over time.
21
Table of Contents
Privacy and Data Protection
In the U.S., we are subject to state laws, which impose certain obligations on the processing of personal information
and provide consumers specific rights to control their personal information. For instance, the California Consumer Privacy
Act (“CCPA”), which applies to certain portions of our business, requires covered companies to provide disclosures to
California consumers about such companies’ data collection, use and sharing practices and gives California residents
expanded rights with respect to the processing of their personal information. In November 2020, the CCPA was amended
by the California Privacy Rights Act (“CPRA”), which took effect in most material respects on January 1, 2023. The
CPRA expands the CCPA, including with respect to the processing of certain sensitive personal information, and
establishes a regulatory agency, the California Privacy Protection Agency (“CPPA”), to promulgate rules and regulations,
and to enforce those requirements. Regulators may impose fines for violations, and individuals have a private right of
action for the unauthorized disclosure of personal information as a result of a failure to maintain reasonable security
procedures. CCPA enforcement thus far has been limited; it has not been subject to significant litigation and judicial
interpretation, and the CPRA has shifted enforcement duties from the state Attorney General to the new CPPA. As a result,
it remains unclear how various provisions of the CCPA will be interpreted and enforced. Moreover, in February 2023, the
CPPA adopted its final rule changes to the CCPA regulations; these are expected to come into force in April 2023. While a
significant portion of our business is exempted from the CCPA’s specific requirements, the Health Insurance Portability
and Accountability Act and the insurance laws of several states to which we are subject grant similar rights to insureds,
including the right to request copies of their personal information that a company has collected.
Several other states either have proposed or adopted new comprehensive privacy laws, which may apply to certain
portions of our business. However, some of these state laws (such as those enacted in Virginia, Colorado and Utah) include
broad entity-wide exemptions for financial institutions. Additionally, a draft of a new federal privacy bill, the American
Data Privacy and Protection Act (“ADPPA”), was introduced in June 2022 with the aim of harmonizing and improving
federal data protection legislation. The ADPPA was not enacted during the last Congress, but it or similar federal
legislation may be enacted in the future. Adapting our practices to comply with new laws and regulations may increase
compliance costs and potentially change our business practices.
Outside of the U.S., our subsidiaries are subject to various data protection regimes, including the General Data
Protection Regulation (EU) 2016/679 (“GDPR”), which became effective on May 25, 2018, and applies to entities
established in the EU, as well as to entities not established in the EU, that target goods or services to EU data subjects, or
that monitor consumer behavior that takes place in the EU. The GDPR imposes strict requirements for controllers and
processors of personal data, including, for example, by requiring detailed disclosures to data subjects, a mechanism for
individuals to access and correct personal data, specific timelines for data breach notifications, limitations on retention of
information and stringent limits pertaining to the collection and storage of special categories of personal data, such as
health information, and highly specific obligations when contracting with third-party processors in connection with the
processing of EU personal data. The GDPR also imposes strict requirements on transfers of personal data outside of the
EEA to countries which have not been deemed “adequate” by the European Commission. (In this regard, the U.K. has been
deemed “adequate” and the U.S. has not been deemed “adequate”; however, the U.S. and European Commission have
announced an agreement in principle on an EU-U.S. data transfer framework.)
While the GDPR provides a more harmonized approach to data protection regulation across the EU member states, it
also gives EU member states certain areas of discretion and therefore laws and regulations in relation to certain data
processing activities may differ on a member state by member state basis, which could further limit our data collection and
processing abilities and could require localized changes to our operating model. Relatedly, following the U.K.’s exit from
the EU, data privacy law in the U.K. includes the GDPR as retained in U.K. law by virtue of the European Union
(Withdrawal) Act 2018 and the Data Protection Act of 2018, both as amended by the Data Protection, Privacy and
Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 (together “U.K. GDPR”). The interpretation of
the U.K. GDPR may eventually start to differ from the GDPR, and ensuring compliance with each is and will remain an
ongoing commitment that involves substantial costs.
We are also increasingly subject to increasingly restrictive laws in other jurisdictions that address and impose strict
requirements on cross-border data transfers, including, for example, the People’s Republic of China’s Personal Information
Protection Law and Brazil’s General Data Protection Law.
The above laws, and other similar laws that may be passed, may require us to adapt our practices and divert resources
from other initiatives and projects to address such evolving compliance and operational requirements. Moreover, despite
our efforts, governmental authorities or others may assert that our business practices fail to comply with such requirements,
and if we are found to violate any such laws, we may incur substantial fines or damages, have to change our business
practices, or face reputational harm, any of which could have an adverse effect on our business.
22
Table of Contents
ERISA, Fiduciary Considerations, and Other Pension and Retirement Regulation
We provide products and services to certain employee benefit plans that are subject to ERISA and/or Section 4975 of the
Internal Revenue Code of 1986, as amended (the “Code”). ERISA and the Code impose restrictions, including fiduciary
duties to perform solely in the interests of ERISA plan participants and beneficiaries, and to avoid prohibited non-exempt
transactions. The applicable provisions of ERISA and the Code are subject to enforcement by the U.S. Department of Labor
(the “DOL”), the Internal Revenue Service (“IRS”) and the Pension Benefit Guaranty Corporation.
The prohibited transaction rules of ERISA and the Code generally restrict the provision of investment advice to ERISA
plans and participants and to Individual Retirement Accounts (“IRAs”) (and certain other arrangements) if the investment
recommendation results in fees paid to an individual advisor, the firm that employs the advisor or their affiliates that vary
according to the investment recommendation chosen, unless an exemption or exception is available. Similarly, without an
exemption or exception, fiduciary advisors are prohibited from receiving compensation from third parties in connection with
their advice. ERISA also affects certain of our in-force insurance policies and annuity contracts, as well as insurance policies
and annuity contracts we may sell in the future.
transactions or
types, securities
investment strategies
The SEC adopted Regulation Best Interest in 2019, and compliance was required beginning on June 30, 2020.
Regulation Best Interest requires broker-dealers to act in the best interest of individual investor retail customers when
recommending account
including
recommendations to IRA owners, as well as non-benefit plan retail customers. In addition, other SEC rules require broker-
dealers and investment advisers to retail customers to describe their services and conflicts of interest to their retail customers
in client relationship summary disclosure and deliver a copy to their retail customers. In December 2020, the DOL released
the final version of the prohibited transaction exemption (“PTE”) 2020-02 to allow investment advice fiduciaries to receive
compensation without violating ERISA, subject to impartial conduct standards and disclosure obligations aligned with the
new SEC rules. In the preamble to PTE 2020-02, the DOL also provided its interpretation of the five-part test used to
determine whether a person is acting as an ERISA investment advice fiduciary. PTE 2020-02 became effective on February
16, 2021. In April 2021, the DOL published additional guidance indicating that it may amend or add to this rule. FINRA rules
similarly impose “know your customer” and “suitability” requirements on broker-dealers, as well as supplemental rules
relating to sale of variable annuities, including with respect to certain benefit plan customers and IRA owners.
involving securities,
State regulators and legislatures in Nevada, New Jersey, Maryland and New York have proposed measures that would
make broker-dealers, sales agents, and investment advisers and their representatives subject to a fiduciary duty when
providing products and services to customers, including pension plans and IRAs, and Massachusetts has enacted a law to that
effect. The NYDFS’s annuity suitability regulation incorporates the “best interest” standard and expands the scope of the
regulation beyond annuity transactions to include sales of life insurance policies to consumers. In April 2021, the Appellate
Division of the New York Supreme Court overturned the regulation for being unconstitutionally vague, although the New
York State Court of Appeals reversed this ruling on October 20, 2022. Regulation Best Interest under the Securities Exchange
Act of 1934, as amended (“Exchange Act”) does not include a private right of action, although the SEC did not indicate an
intent to pre-empt state regulation in this area, and some of the state proposals and adopted regulations would allow for a
private right of action. As a result of these developments, it is possible that it may become more costly to provide our
products and services in the states subject to the new rules.
The SECURE 2.0 Act of 2022 (“SECURE 2.0”), signed into law on December 29, 2022, makes significant changes to
existing law for retirement plans by building upon provisions in the Setting Every Community Up for Retirement
Enhancement Act of 2019. SECURE 2.0 introduces new requirements and considerations for plan sponsors that are intended
to expand coverage, increase savings, preserve income, and simplify plan rules and administrative procedures. Among other
provisions, SECURE 2.0 directs the DOL to review its current interpretive bulletin regarding ERISA plan sponsors’ selection
of annuity providers for purposes of transferring plan sponsor benefit plan liability to such annuity providers. Such review
could result in the DOL’s imposition of new or different requirements on plan sponsors or on annuity providers such as
MLIC and Metropolitan Tower Life Insurance Company, or could make such selection process more difficult for the parties
involved.
In 2020, the Chilean Congress approved two bills, each of which allowed individuals to withdraw up to 10% of pension
accounts or the account balance if it is below a certain amount. In April 2021, the Chilean Congress approved a third bill
allowing for additional withdrawals of pension funds which also required insurance companies to advance payments of up to
10% of the reserves allocated to a customer’s annuity. Since then, bills allowing additional withdrawals and a second advance
payment of annuities were rejected; however, it is possible that such proposals will be made again in the future.
23
Table of Contents
In late 2022, the government sent a major pension reform bill to the Chilean Congress which included a proposal to limit
private pension administrators to asset management and end their administration of mandatory pension accounts, among other
significant changes. The impact of any such pension reforms will depend on the final measures adopted, and in some cases
could have an adverse effect on our Chilean pension business.
Consumer Protection Laws
Numerous federal and state laws affect our earnings and activities, including federal and state consumer protection laws.
As part of Dodd-Frank, Congress established the Consumer Financial Protection Bureau (“CFPB”) to supervise and regulate
institutions that provide certain financial products and services to consumers. Although the consumer financial services
subject to the CFPB’s jurisdiction generally exclude insurance business of the kind in which we engage, the CFPB does have
authority to regulate non-insurance consumer services we provide. Consumer protection laws in non-U.S. jurisdictions may
also affect us.
Investments Regulation
State insurance laws and regulations limit the amount of investments that our U.S. insurance subsidiaries may have in
certain asset categories, such as below investment grade fixed income securities, real estate equity, other equity investments,
and derivatives, and require diversification of investment portfolios. Investments exceeding regulatory limitations are not
admitted for purposes of measuring surplus. In some instances, laws require us to divest any non-qualifying investments. In
addition, many of our non-U.S. insurance subsidiaries and pension companies are subject to other investment laws and
regulations.
Changing global financial and economic environments, and the fiscal and monetary policy of governments and central
banks around the world, continue to affect our global insurance business. These may affect interest rates, and thereby the
pricing levels of risk-bearing investments, as well as our business operations, investment portfolio, and derivatives.
Derivatives Regulation
Dodd-Frank includes a framework of regulation of the over-the-counter (“OTC”) derivatives markets requiring clearing
of certain types of interest rate and credit default swap transactions and imposes additional costs, including reporting and
margin requirements. Our costs of risk mitigation are increasing under Dodd-Frank. For example, Dodd-Frank imposes
requirements to pledge variation and/or initial margin (i) for “OTC-cleared” transactions (OTC derivatives that are cleared
and settled through central clearing counterparties), and (ii) for “OTC-bilateral” transactions (OTC derivatives that are
bilateral contracts between two counterparties).
We expect increased margin requirements, and capital charges for our counterparties and central clearinghouses related
to holding non-cash collateral, to continue to increase our required holdings of cash and government securities. This may
cause lower yields and reduce our income due to less favorable pricing for OTC-cleared and OTC-bilateral transactions.
Centralized clearing of certain OTC derivatives exposes us to the risk of a default by a clearing member or clearinghouse
with respect to our cleared derivative transactions. We use derivatives to mitigate a wide range of risks in connection with our
businesses, including the impact of increased benefit exposures from certain of our annuity products that offer guaranteed
benefits. We have always been subject to the risk that hedging and other management procedures might prove ineffective in
reducing the risks to which insurance policies expose us, or that unanticipated policyholder behavior or mortality, combined
with adverse market events, could produce economic losses beyond the scope of the risk management techniques employed.
Any such losses could be increased by higher costs of writing derivatives (including customized derivatives) and the reduced
availability of customized derivatives that might result from the implementation of Dodd-Frank and comparable international
derivatives regulations.
Dodd-Frank also expanded the definition of “swap” and mandated the SEC and U.S. Commodity Futures Trading
Commission (“CFTC”) to study whether “stable value contracts” should be treated as swaps. Pursuant to the new definition
and the SEC’s and CFTC’s interpretive regulations, products offered by our insurance subsidiaries, other than stable value
contracts, might also be treated as swaps. Should such products become regulated as swaps, we cannot predict how the rules
would be applied to them or the effect on such products’ profitability or attractiveness to our clients. Special federal banking
rules apply to certain qualified financial contracts, including many derivatives contracts, securities lending agreements and
repurchase agreements, with banking institutions and certain of their affiliates. These rules generally require the banking
institutions and their applicable affiliates to limit or delay their counterparties’ default rights (such as their counterparties’
right to terminate the contracts or foreclose on collateral) and restrict assignments and transfers of credit enhancements (such
as guarantees) in connection with the banking institution or affiliate bankruptcy, insolvency, resolution or similar proceeding.
These rules could limit our recovery in the event of a default, limit our ability to close-out transactions upon the bankruptcy
of an affiliate of our counterparty, and increase our counterparty risk.
24
Table of Contents
We expect the amount of collateral we are required to pledge and the payments we are required to make under our OTC
swaps transactions to increase as a result of the requirement to pledge initial margin for OTC-bilateral transactions, based on
the final margin requirements for non-centrally cleared derivatives.
Securities, Broker-Dealer and Investment Adviser Regulation
U.S. federal and state securities laws and regulations apply to insurance products that are also meet the definition of a
“security,” including variable annuity contracts and variable life insurance policies, and certain fixed interest rate or index-
linked contracts with features that require them to be registered as securities or exempt from registration. As a result, some of
our subsidiaries and their activities in offering and selling variable insurance contracts and policies are subject to extensive
regulation under these securities laws.
Federal and state securities laws and regulations generally grant regulatory agencies broad rulemaking and enforcement
powers, including the power to adopt new rules impacting new or existing products, regulate the issuance, sale and
distribution of our products and limit or restrict the conduct of business for failure to comply with such laws and regulations.
In some non-U.S. jurisdictions, some of our insurance products are considered “securities” under local law, and we may be
subject to local securities regulations and oversight by local securities regulators.
Some of our subsidiaries and their activities in offering and selling variable insurance products are subject to extensive
regulation under the federal securities laws and regulations administered by the SEC. These subsidiaries issue variable
annuity contracts and variable life insurance policies through separate accounts that are registered with the SEC as investment
companies under the Investment Company Act of 1940, as amended (the “Investment Company Act”) or are exempt from
registration under the Investment Company Act. Such separate accounts are generally divided into sub-accounts, each of
which invests in an underlying mutual fund which is itself a registered investment company under the Investment Company
Act. In addition, the variable annuity contracts and variable life insurance policies associated with these registered separate
accounts are registered with the SEC under the Securities Act of 1933, as amended (the “Securities Act”) or are exempt from
registration under the Securities Act. One insurance subsidiary issues a fixed interest rate contract with features that require it
to be registered under the Securities Act.
Certain variable contract separate accounts sponsored by our subsidiaries are exempt from registration but may be
subject to other provisions of the federal securities laws.
Two of our U.S. subsidiaries are registered with the SEC as broker-dealers under the Exchange Act and are members of,
and subject to regulation by, FINRA. The SEC, CFTC and FINRA from time to time propose and adopt rules and regulations
that impact broker-dealers and products deemed to be securities.
Two of our U.S. subsidiaries are registered as investment advisers with the SEC under the Investment Advisers Act of
1940, as amended, and are also registered or licensed in various non-U.S. jurisdictions, as applicable. In addition, we have
non-U.S. subsidiaries that are registered or licensed in non-U.S. jurisdictions to conduct our investment management
business. We may also be subject to similar laws and regulations in non-U.S. jurisdictions with respect to the provision of
investment advisory services or the conducting of other activities.
Under SEC rules, broker-dealers recommending our variable products and other securities offerings to retail customers
are required to comply with a “best interest” standard. SEC rules also require broker-dealers to disclose the nature of services,
their standard of conduct, and their conflicts of interest to their retail customers. With regard to insurance products, the NAIC
revised its Suitability in Annuity Transactions Model Regulation to add a “best interest” standard for the sale of annuities,
which most of our insurance subsidiaries’ domiciliary states adopted and others may consider. In April 2021, as noted above,
the Appellate Division of the New York State Supreme Court overturned NYDFS Regulation 187 - Suitability and Best
Interests in Life Insurance and Annuity Transactions for being unconstitutionally vague, although the New York State Court
of Appeals reversed this ruling on October 20, 2022.
Federal and state securities regulatory authorities and FINRA from time to time make inquiries and conduct
examinations regarding compliance by MetLife, Inc. and its subsidiaries with securities and other laws and regulations. We
cooperate with such inquiries and examinations and take corrective action when warranted.
25
Table of Contents
Environmental Laws and Regulations
As an owner and operator of real property in many jurisdictions, we are subject to extensive environmental laws and
regulations in such jurisdictions. Inherent in such ownership and operation is also the risk that there may be environmental
liabilities and costs in connection with any required remediation of such properties. In addition, we hold equity interests in
companies that could potentially be subject to environmental liabilities. We routinely have environmental assessments
performed with respect to real estate being acquired for investment and real property to be acquired through foreclosure.
Unexpected environmental liabilities may arise. However, based on information currently available to us, we believe that any
costs associated with compliance with environmental laws and regulations or any remediation of such properties will not
have a material adverse effect on our business, results of operations or financial condition.
Management of Climate Risks
The topic of climate risk has come under increased scrutiny by insurance regulators. The NYDFS issued a circular
letter in September 2020 stating that it expects foreign authorized insurers, such as our insurance subsidiaries licensed in
New York, to integrate financial risks related to climate change into their governance frameworks, risk management
processes, business strategies and scenario analysis, and develop their approach to climate related financial disclosure.
On November 15, 2021, the NYDFS issued final guidance for New York domestic insurers, such as MLIC, stating that
such insurers are expected to manage financial risks from climate change by taking actions that are proportionate to the
nature, scale and complexity of their businesses. For instance, insurers should incorporate climate risk into their financial
risk management and address this risk through their enterprise risk management functions. As of August 15, 2022, New
York domestic insurers should have implemented certain corporate governance changes and developed plans to implement
the organizational structure changes (e.g., defining roles and responsibilities related to managing climate risk). With respect
to implementing additional changes (e.g., reflecting climate risks in the ORSA and using scenario analysis when
developing business strategies), insurers are encouraged to work on these changes, although the NYDFS will issue further
guidance with more specific timelines.
The NYDFS also adopted an amendment to the regulation governing enterprise risk management, applicable to New
York domestic and foreign authorized insurers, which requires an insurance group’s enterprise risk management function
to address certain additional risks, including climate change risk.
In addition, the FIO is authorized to monitor the U.S. insurance industry under Dodd-Frank. In furtherance of
President Biden’s Executive Order on Climate-Related Financial Risk, dated May 20, 2021, the FIO sought public
comment on climate-related financial risks in the insurance industry. The FIO is assessing how the insurance sector may
mitigate climate risks and help achieve national climate-related goals.
The SEC is also continuing its focus on climate, and environmental, social and governance (“ESG”) risks and
opportunities and has published its rulemaking list which contains several ESG-related rulemakings that the SEC is
considering.
On March 21, 2022, the SEC proposed rules requiring registrants to provide additional climate-related information in
their registration statements and annual reports, including in their financial statements. The proposal sets forth proposed
rules for disclosure of climate-related risks, material impacts, governance, risk management, financial statement metrics,
greenhouse gas emissions, attestation of emissions disclosures, and targets and goals.
On May 25, 2022, the SEC proposed rules requiring registered investment companies, business development
companies, and registered and certain unregistered investment advisers to disclose in their fund prospectuses, annual
reports and Form ADV information about how funds and advisers incorporate ESG factors into their investment strategies.
Unclaimed Property
We are subject to the laws and regulations of states and other jurisdictions concerning identification, reporting and
escheatment of unclaimed or abandoned funds, and are subject to audit and examination for compliance with these
requirements. See “— Insurance Regulation — Insurance Regulatory Examinations and Other Activities,” which references a
consent order. See also Note 21 of the Notes to the Consolidated Financial Statements.
26
Table of Contents
Brighthouse Separation Tax Treatment
Prior to the spin-off distribution of Brighthouse Financial, Inc. (together with its subsidiaries, “Brighthouse”) common
stock in 2017, we received a private letter ruling from the IRS regarding certain significant issues under the Code, as well as
an opinion from tax counsel that the distribution qualified for non-recognition of gain or loss to us and our shareholders
pursuant to Sections 355 and 361 of the Code, except to the extent of cash received in lieu of fractional shares, each subject to
the accuracy of and compliance with certain representations, assumptions and covenants therein.
Notwithstanding the receipt of the private letter ruling and the tax opinion, the IRS could determine that the distribution
should be treated as a taxable transaction, for example, if it determines that any of the representations, assumptions or
covenants on which the private letter ruling is based are untrue or have been violated. Similarly, the IRS could determine that
our disposal of the fair value option of Brighthouse Financial, Inc.’s common stock in the debt-for-equity exchange should be
treated as a taxable transaction to MetLife, Inc. Furthermore, as part of the IRS’s policy, the IRS did not determine whether
the distribution or the debt-for-equity exchange satisfies certain conditions that are necessary to qualify for non-recognition
treatment. Rather, the private letter ruling is based on representations by us and Brighthouse that these conditions have been
satisfied. The tax opinion addressed the satisfaction of these conditions. The tax opinion is not binding on the IRS or the
courts, and the IRS or a court may take a contrary position. In addition, the tax counsel relied on certain representations and
covenants delivered by us and Brighthouse.
If the IRS ultimately determines that the distribution is taxable, the distribution could be treated as a taxable dividend or
capital gain to MetLife shareholders who received shares of Brighthouse Financial, Inc. common stock in the distribution for
U.S. federal income tax purposes, and such shareholders could incur significant U.S. federal income tax liabilities if the 2017
tax year is still open with respect to such shareholders under the applicable statute of limitation. In addition, if the IRS
ultimately determines that the distribution is taxable, we and Brighthouse could incur significant U.S. federal income tax
liabilities, and either we or Brighthouse could have an indemnification obligation to the other, depending on the
circumstances.
Even if the spin-off distribution otherwise qualifies for non-recognition of gain or loss under Section 355 of the Code, it
may be taxable to us, but not our shareholders, under Section 355(e) of the Code if 50% or more (by vote or value) of our
common stock or Brighthouse Financial, Inc.’s common stock is acquired as part of a plan or series of related transactions
that include the distribution.
Cross-Border Trade and Investments
Our U.K. business model historically utilized certain rights to operate cross-border insurance and investment operations,
which were eliminated as a result of the U.K. withdrawing from the EU. In particular, our EEA insurance entities have lost
the right to “passport” insurance services into the U.K. Nevertheless, MetLife has maintained its existing operating model as
an inbound EEA-insurer under the U.K.’s Temporary Permissions Regime (“TPR”), which is due to last for at least three
years from January 1, 2021. The TPR currently permits MetLife to carry on its insurance business in the U.K. while it
discusses its future operating model with the relevant insurance regulators. Operating expenses within our businesses could
increase as a result of such changes.
Further, MetLife Investment Management Limited, our investment manager in the U.K., lost its passporting rights in the
EU as a result of Brexit. In order to continue our investment management business in the EU, we have established a firm in
Ireland, MetLife Investment Management Europe Limited, which is authorized and supervised by the Central Bank of Ireland
as a UCITS Management Company under the European Communities (Undertakings for Collective Investment in
Transferable Securities) Regulations 2011 and an Alternative Investment Fund Manager under the European Union
(Alternative Investment Fund Managers) Regulations 2013.
The U.S., the EU and the U.K., maintain and enforce a variety of economic sanctions against designated countries and
their nationals around the world, which can result in disruptions in cross-border activity. In particular, U.S., EU and U.K.
sanctions on Russia have expanded as a result of the war in Ukraine. These new sanctions, including a series of presidential
executive orders and regulations administered by the U.S. Department of Treasury’s Office of Foreign Assets Control, have,
inter alia, expanded restrictions on transactions with the Russian Central Bank and other specified Russian government
entities, dealing in Russian sovereign debt, engaging in certain debt and equity transactions, and engaging in transactions
related to all new investment in the Russian Federation. Trade and investment in China may also be impacted by U.S.
sanctions. The Biden administration has previously issued restrictions targeting certain activity involving specified Chinese
securities and technology.
27
Table of Contents
The Organisation for Economic Co-operation and Development (the “OECD”) has proposed policies aiming to
modernize global tax systems, including a global 15% minimum effective tax rate (“Pillar Two”) for multinational
companies, which could adversely affect our profitability if legislation is adopted by participating countries. The EU
implemented Pillar Two in late 2022, and EU member states are required to enact domestic legislation by the end of 2023.
We continue to evaluate the impact potential tax reform proposals may have on our future results of operations and financial
condition.
London Interbank Offered Rate
The Financial Conduct Authority (“FCA”), the U.K. regulator of the London Interbank Offered Rate (“LIBOR”), and the
Intercontinental Exchange (“ICE”) Benchmark Administration, the administrator of LIBOR, have announced the cessation
dates for the publication of all U.S. Dollar and non-U.S. Dollar LIBOR settings. The cessation dates of many of these settings
have occurred and the cessation date of the remaining U.S. Dollar LIBOR settings (overnight and one-, three-, six- and 12-
month U.S. Dollar LIBOR) will occur on June 30, 2023. The FCA has proposed that the ICE Benchmark Administration
continue publication of one-, three- and six-month U.S. Dollar LIBOR settings on a “synthetic,” or non-representative, basis
through the end of September, 2024.
We use LIBOR and other interbank offered rates as interest reference rates in many of our financial instruments. The
transition of our existing LIBOR contracts to alternative reference rates, including the adequacy of LIBOR fallback
provisions in such contracts, whether, how, and when we and others develop and adopt alternative reference rates, the
availability of synthetic LIBOR and the applicability of U.S. legislative remedies that address LIBOR transaction risk for
various legacy U.S. Dollar LIBOR contracts, will influence the effect of any changes to or discontinuation of LIBOR on us.
We continue to identify, assess and monitor market and regulatory developments, assess agreement terms, and evaluate
operational readiness related to the transition. The SEC’s Division of Examinations (formerly the Office of Compliance
Inspections and Examinations) expects to assess registrants’ efforts to prepare for LIBOR discontinuation and their transition
to alternatives. We actively participate in the New York Federal Reserve Bank convened Alternative Reference Rate
Committee and other industry association efforts on the transition to alternative reference rates. The Company utilized the
International Swaps and Derivatives Association, Inc. (“ISDA”) 2020 IBOR Fallbacks Protocol to address the transition from
LIBOR and other interbank offered rates to other risk-free rates in its OTC bilateral ISDA derivatives contracts. We also
monitor the Financial Accounting Standards Board’s, International Accounting Standards Board’s, and U.S. Treasury
Department’s updates on the accounting and tax implications of reference rate reform. In March 2022, federal legislation was
enacted to address, for U.S. Dollar LIBOR settings scheduled to cease being published at the end of June 2023, the transition
to alternative reference rates for all U.S. law governed contracts with non-existent or inadequate U.S. Dollar LIBOR fallback
provisions. Except with respect to the one-week and two-month U.S. Dollar LIBOR tenors, the federal legislation supersedes
all state law addressing the U.S. Dollar LIBOR transition, including legislation enacted in New York in 2021. The Federal
Reserve Board adopted regulations in December 2022 that implement this legislation by identifying benchmark rates based
on Term SOFR that will automatically replace LIBOR in specified financial contracts after June 30, 2023. The regulation
authorizes specified “determining persons” to select a benchmark replacement and substitutes a Federal Reserve Board-
specified replacement where a determining person does not select a workable benchmark replacement by at least June 30,
2023. Each Federal Reserve Board-specified replacement in the regulation incorporates spread adjustments. We continue to
assess current and alternative reference rates’ merits, limitations, risks and suitability for our investment and insurance
processes.
Competition
The life insurance industry remains highly competitive. See “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Industry Trends — Competitive Pressures.” We face competition based on factors
such as service, product features, scale, price, financial strength, claims-paying ratings, credit ratings, e-business capabilities
and name recognition. We compete globally with a large number of insurance companies and non-insurance financial
services companies such as banks, broker-dealers and asset managers. We compete for individual consumers, employer and
other group customers, as well as agents and other distributors of insurance and investment products. Some of our
competitors offer a broader array of products, have more competitive pricing or, with respect to other insurance companies,
have higher claims paying ability ratings. In the U.S. and Japan, we compete with a large number of domestic and foreign-
owned life insurance companies, many of which offer products in categories on which we focus. Elsewhere, we compete with
the foreign insurance operations of large U.S. insurers and with global insurance groups and local companies. Because we
and others underwrite many group insurance products annually, our group purchasers may be able to obtain more favorable
terms from competitors rather than renewing coverage with us.
28
Table of Contents
Insurers are focused on their core businesses, specifically in markets where they can achieve scale. They are increasingly
seeking alternative sources of revenue focusing on monetization of assets, and fee-based services. They are also looking for
opportunities to offer comprehensive solutions which include value-added services along with traditional products.
Financial market volatility will impact insurers’ capital positions, which may strain the competitive environment and
lead to industry consolidation. We believe adaptability to market changes (such as those from pandemics), as well as financial
strength, technological efficiency and organizational agility, will most significantly differentiate competitors in our industry.
We believe we are well positioned to succeed in any environment.
The Company distributes many of its products through a variety of third-party distribution channels, including banks and
broker-dealers. We believe potential distribution partners carefully consider the financial strength of the company whose
products they sell. Bank and broker-dealer consolidation could increase competition for access to distributors.
We face intense competition for employees. We must attract and retain highly skilled people with knowledge of our
business and industry experience to support our business. See “— Human Capital Resources.” We continue to seek to grow
our career agency forces in selected global markets. We also continue efforts to enhance the efficiency and production of our
sales representatives. These initiatives may not succeed in attracting and retaining productive agents. See “— Segments and
Corporate & Other” for information on sales distribution.
Numerous aspects of our business are heavily regulated. Legislative and other changes affecting the regulatory
environment can affect our competitive position within the life insurance industry and within the broader financial services
industry. See “— Regulation.”
Human Capital Resources
At December 31, 2022, we had approximately 45,000 employees.
We strive to build a purpose-driven and inclusive culture where our employees are energized to make a difference. As a
financial services company, we rely significantly on our global workforce, leveraging a wide variety of professional,
technical, management, business, and other skills and expertise, to create value for all of our stakeholders. Our priorities
include talent attraction and retention, holistic well-being, diversity, equity and inclusion (“DEI”), talent and skill
development, total compensation and benefits, and culture and engagement. These factors impact the readiness of the
organization to fuel future business needs.
•
Talent attraction and retention: As we prepare our talent for the future and bring out their potential through
inclusion and development, we aim to create conditions so the individual can personally flourish. We do this by
celebrating value through recognition, demonstrating care through our relentless focus on health and wellness, and
promoting stability through our benefits and compensation programs.
• Holistic well-being: We encourage our employees to prioritize health by connecting our purpose, our work, and the
importance of overall well-being. We have continued to apply these principles to meet our employees’ needs
throughout the COVID-19 pandemic. We have adopted a new work arrangement model founded on business
analysis that evaluates where, when and how jobs are performed enabling the nature of the role to determine the
level of flexibility. This future of work model has been structured into three workforce segments which is comprised
of individuals who work in the office, virtually or “hybrid” (which combines both work arrangements). We continue
to offer our global platform known as BeWell, launched in 2020, to provide resources to help employees with
resilience and coping, staying balanced, maintaining physical and financial wellbeing, and building healthy
relationships. As the pandemic continued to take its toll on mental health in 2022, it became even more vital to
support mental health and combat mental health stigmas. The BeWell program intensified its focus to promote and
reinforce sustained healthy mental habits, such as mindfulness, sleep, exercise and practicing appreciation and
gratitude.
29
Table of Contents
•
•
•
•
Diversity, equity and inclusion: We aspire to cultivate an inclusive culture where our diversity of talent positions
us to meet the needs of our employees, our customers, our shareholders, and the global communities we serve. In
March 2022, we announced a series of 2030 DEI commitments that address the needs of underserved and
underrepresented communities through our investments, products and services, supply chain, volunteering and
community efforts. Such efforts include achieving top-quartile performance in our industry for workforce diversity
across each ethnically and racially diverse category in the U.S. and for female officers globally as measured against
best-in-class industry benchmarks. We measure ourselves against these benchmarks to monitor our progress and
effectiveness, including tracking gender, ethnic, and racial diversity representation across seniority levels. Globally,
women now represent 25% of our Executive Leadership Team and 38% of our Board of Directors. In the U.S.,
ethnic and racially diverse employees represent 20% of our Executive Leadership Team and 23% of our Board of
Directors. Such efforts also include completing the commitment MetLife Foundation announced in June 2020 to
provide $5 million over three years to advance racial equity in the U.S.; joining the Human Rights Campaign’s
Business Coalition for the Equality Act; and expanding our talent sponsorship program, EXCELERATE, globally to
advance the development of high-potential diverse leaders. We are committed to fostering an environment where
every employee feels a sense of belonging and can bring their best self to their teams and contribute their
perspectives to strengthen our business and our culture.
Talent and skill development: Our success as a company begins with our employees. We aim to create a culture of
continuous learning and work to ensure every employee has access to tools, resources and incentives for growth.
Employees leverage our digitally enabled learning platform known as MyLearning to continuously develop and
build the core skills they need in a dynamic environment. Additionally, employees can enhance and expand their
skills through experiential learning through our internal talent marketplace known as MyPath, enabling cross-
functional learning through hands-on project work. We are focusing on skills development at scale for capabilities
critical to successfully serving our customers, specifically in the areas of technology, distribution, leadership and
agility. Through this holistic approach to development, we continue to prepare our workforce for the future. We
monitor our progress through ongoing tracking of employee participation in our robust learning opportunities and in
key areas through the building of capability against skills gap analysis.
Compensation and benefits: We recognize the importance of providing market-aligned compensation opportunities
and comprehensive, cost-effective benefits to attract, retain, engage, and motivate talented employees. We use a
competitive total compensation framework that consists of base salary, as well as annual and long-term incentive
opportunities. Our benefits offerings prioritize holistic well-being, encouraging and equipping all employees
globally to sustain and improve their physical, mental, financial and social wellness. Company-paid and company-
subsidized healthcare, disability, and life insurance and retirement benefits are market-aligned, and competitive paid
time off and parental leave programs are provided in all markets. We regularly review our compensation and
benefits programs and consider business objectives and employee input, as well as market developments, when
making updates. By designing these programs to enable our employees to build a more confident future, we live our
purpose, promote our business objectives, align management’s interests with those of our many stakeholders and
underscore our focus on long-term shareholder value.
Culture and engagement: The work of building our purpose-driven, inclusive culture starts with trust. Trust
permits us, as a team, to be curious, forthcoming, open, imaginative, confident and inclusive. We accelerate building
trust and open dialogue through:
•
•
Global networks where executive and senior leaders across the organization connect to further shape and
align to the strategy, build capabilities and provide voice and feedback on how we operate, our culture and
our future;
Let’s Talk Live! monthly, Chief Executive Officer (“CEO”)-driven global town halls where information is
shared with all employees, questions are asked and answered; and
• MyVoice, MetLife’s powerful employee survey and listening program that amplifies the voice of our
employees and informs action-oriented solutions.
•
Speak Up, MetLife’s online tool, together with its Ethics & Fraud Hotline, enable associates to report any
concern or violation that impacts employees, customers, or MetLife, without fear of retaliation.
See MetLife’s Sustainability Report (the “Sustainability Report”) at www.metlife.com/sustainability for further detail on
how our actions strengthen our workforce. Neither the Sustainability Report, nor any other information from the MetLife
website, is a part of or incorporated by reference into this Annual Report on Form 10-K.
30
Table of Contents
Information About Our Executive Officers
Set forth below is information regarding the executive officers of MetLife, Inc. MLIC and MetLife Group, Inc. are
affiliates of MetLife, Inc.:
Name
Michel A. Khalaf
Age
59
Position with MetLife and Business Experience
•
President, Chief Executive Officer and Director of MetLife, Inc. (May 2019 – present)
•
President, U.S. Business, of MetLife, Inc. (July 2017 – April 2019)
John D. McCallion
49
• Executive Vice President and Chief Financial Officer of MetLife, Inc. (August 2018 – July 2019)
(November 2019 – present)
• Executive Vice President and Chief Financial Officer and Treasurer of MetLife, Inc. (May 2018 – August
2018) (July 2019 – November 2019)
• Executive Vice President and Treasurer of MetLife, Inc. (July 2016 – May 2018)
Marlene Debel
56
• Executive Vice President and Chief Risk Officer of MetLife, Inc. (May 2019 – present)
• Executive Vice President and Head of Retirement & Income Solutions of MetLife, Inc. (March 2018 –
May 2019)
• Executive Vice President and Chief Financial Officer, U.S. Business, of MetLife, Inc. (July 2016 – March
2018)
Stephen W. Gauster
52
• Executive Vice President and General Counsel of MetLife, Inc. (May 2018 – present)
•
•
Senior Vice President and Interim General Counsel of MetLife, Inc. (July 2017 – May 2018)
Senior Vice President and Chief Counsel, General Corporate Section of the Law Department of MetLife
Group, Inc. (January 2016 – June 2017)
Steven J. Goulart
64
• Executive Vice President and Chief Investment Officer of MetLife, Inc. (May 2011 – present)
• Head of the Portfolio Management Unit as Senior Managing Director of MLIC (January 2011 – April
2011)
Bill Pappas
53
• Executive Vice President, Global Technology and Operations, of MetLife, Inc. (November 2019 – present)
• Head of Global Operations, Bank of America, a financial services company (February 2016 – November
2019)
Susan M. Podlogar
59
• Executive Vice President and Chief Human Resources Officer of MetLife, Inc. (July 2017 – present)
• Vice President, Human Resources, Global Medical Devices, Johnson & Johnson, a medical devices,
pharmaceutical and consumer products company (May 2016 – June 2017)
Ramy Tadros
47
•
President, U.S. Business, of MetLife, Inc. (May 2019 – present)
• Executive Vice President and Chief Risk Officer of MetLife, Inc. (September 2017 – April 2019)
31
Table of Contents
Trademarks
We have a worldwide trademark portfolio that we consider important in the marketing of our products and services,
including, among others, the trademark “MetLife.” We also have trademarks, such as the “PROVIDA” trademark, we have
acquired with businesses. We believe that our rights in our trademarks are well protected.
Available Information
MetLife encourages investors and others to frequently visit its website (www.metlife.com), including its Investor
Relations web pages (https://investor.metlife.com). MetLife announces significant financial and other information to its
investors and the public on its Investor Relations web pages in news releases, public conference calls and webcasts, fact
sheets, and other documents and media. MetLife, Inc. makes available free of charge on its Investor Relations web pages the
reports and other information it files with or furnishes to the SEC as soon as reasonably practicable after they are filed with or
furnished to the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,
any amendments to each of those reports, proxy statements, and other disclosure. The SEC maintains an internet website
(https://www.sec.gov) that contains this and other information regarding issuers that file electronically with the SEC,
including MetLife, Inc.
The information on MetLife’s website, including MetLife’s Sustainability Report, is not incorporated by reference into
this Annual Report on Form 10-K or in any other report or document MetLife submits to the SEC, and any references to
MetLife’s website are intended to be inactive textual references only.
32
Table of Contents
Item 1A. Risk Factors
Any or each of the events described below may (or may continue to) adversely affect the global economy, global
financial markets, our reputation, our regulatory, customer, or other relationships, our results of operations, our liquidity or
cash flows, our statutory capital position, our ability to meet our obligations, our credit and financial strength ratings, our
financial condition, or the market price of our common stock. The effects may vary depending on timing, product, market,
region or segment.
Many of these risks are interrelated and could occur under similar business and economic conditions, and the occurrence
of any of them may cause others to emerge or worsen. Such combinations could materially increase the severity of the
cumulative or separate impact of these risks.
These risk factors do not describe all potential risks that could affect MetLife. You should carefully consider the risk
factors together with other information contained in this Annual Report on Form 10-K, including “Business,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and
accompanying notes in “Financial Statements and Supplementary Data,” and other reports and materials MetLife submits to
the SEC.
Economic Environment and Capital Markets Risks
We May Face Difficult Economic Conditions
Market factors, including interest rates, credit spreads, equity prices, derivative prices and availability, real estate
conditions, foreign currency exchange rates, consumer and government spending, government default or spending reductions
to avoid default, business investment, climate change, public health risks, volatility, disruptions and strength of the capital
markets, deflation and inflation, and government actions in response thereto, may inhibit revenue growth, reduce investment
opportunities and result in investment losses, derivative losses, changes in insurance liabilities, impairments, increased
valuation allowances, increases in reserves, reduced net investment income and changes in unrealized gain or loss positions.
Higher unemployment, changes to inflation, lower family income, lower corporate earnings, greater government
regulation, lower business investment, lower consumer spending, elevated incidence of claims, adverse utilization of benefits
relative to our best estimate expectations, lapses or surrenders of policies, reduced demand for our products, and deferred or
canceled payments of insurance premiums may negatively affect our earnings and capitalization.
Declining equity or debt markets may decrease the account value of our products, reducing certain fees generated by
these products, which may increase the level of insurance liabilities we carry and require us to increase funding to our captive
reinsurers. Additionally, higher or lower interest rates may impact the value and/or reduce returns in fixed income
investments.
Public Health Risks
Pandemics and other public health issues, and governmental, business, and consumer reactions to them, have affected
and may continue to affect economic conditions. They have and may continue to cause illnesses and deaths, changes in
consumer or business confidence, behavior and investment and business activity, changes to interest rates and other market
risk factors, and governmental or other restrictions on economic activity for prolonged periods. Any of these issues may
cause or exacerbate any of the difficult economic conditions we describe in these risk factors.
Interest Rate Risks
Some of our products and investments expose us to interest rate risks, including changes in the difference between
short-term and long-term interest rates, which may reduce or eliminate our investment spread and net income.
Interest rate increases may harm our profitability. During rapidly increasing interest rates, we may not be able to
replace the investments in our general account with higher yielding investments needed to fund the higher crediting rates
required to stay competitive. This could result in a lower spread, lower profitability, decreased sales, and greater loss of
existing contracts and related assets. In addition, policy loans, surrenders and withdrawals may increase as policyholders
seek investments with higher perceived returns. This may result in cash outflows requiring the sale of investments on less
favorable terms, resulting in investment losses and reductions in net income. Reductions in net income may in turn harm
our credit instrument covenants and rating agency assessment of our financial condition. Interest rate increases may harm
the value of our investment portfolio, for example, by decreasing the estimated fair value of fixed income securities, and
may increase our daily settlement payments on interest rate futures and cleared swaps, resulting in increased cash outflows
and liquidity needs. Furthermore, if interest rates rise, our unrealized gains on fixed income securities may decrease and
33
Table of Contents
our unrealized losses may increase. We would recognize the accumulated change in estimated fair value of these fixed
income securities in net income when we realize a gain or loss upon the sale of the security or we determine that the
decline in estimated fair value is due to a credit loss. During inflationary periods with rising interest rates, the value of
fixed income investments falls which could increase realized and unrealized losses, resulting in additional deferred tax
assets that may not be realizable. Finally, an increase in interest rates may decrease fee income associated with a decline in
the value of variable annuity account balances invested in fixed income funds.
The rapidly rising interest rate environment may cause the interest maintenance reserve (“IMR”) balance of certain of
our insurance subsidiaries to decrease or become negative because of their bond sales at a capital loss. Current statutory
accounting guidance requires the non-admittance of negative IMR. If the IMR balance of our insurance subsidiaries
becomes negative, surplus and financial strength of certain of our insurance subsidiaries may not be captured in the
Consolidated Financial Statements due to lower surplus and RBC ratios. The NAIC is considering whether the allowance
of a negative IMR balance in statutory accounting should be permitted, although the outcome of this initiative is uncertain.
Federal Reserve Board monetary policy (and that of other central banks) may also impact the pricing levels of risk-
bearing investments and may harm our investment income or product sales.
The measures we take to mitigate the risks of investing in a changing interest rate environment, such as mitigating our
fixed income investments relative to our interest rate sensitive liabilities, may not be sufficient. For some of our liability
portfolios, we may not be able to invest assets at the full liability duration, thereby creating some asset/liability mismatch.
In addition, asymmetrical and non-economic accounting may cause material changes to our net income and stockholders’
equity because we record our non-qualified derivatives at fair value through earnings, while certain hedged items may
follow an accrual-based accounting model or are recorded at fair value through other comprehensive income.
Low interest rates and risk asset returns may reduce income from our investment portfolio, increase our liabilities for
claims and future benefits, and increase the cost of risk transfer measures, decreasing our profit margins. During certain
market events, such as a global credit crisis, a market downturn, or sustained low market returns, we may incur significant
losses due to, among other reasons, losses incurred in our general account and the impact of guarantees, including increases
in liabilities, capital maintenance obligations and collateral requirements. In addition, during periods of sustained lower
interest rates, we may need to reinvest proceeds from certain investments at lower yields, reducing our investment spread.
Moreover, borrowers may prepay or redeem the fixed income securities and loans in our investment portfolio with greater
frequency. Although we may be able to lower interest crediting rates to help offset decreases in spreads, our ability to lower
these rates is limited to our products that have adjustable interest crediting rates, which could be limited by competition or
contractually guaranteed minimum rates and may not match the timing or magnitude of changes in asset yields. As a result,
our investment spread may decrease or become negative. Reductions in net income from these factors may in turn harm our
credit instrument covenants or rating agency assessment of our financial condition.
During periods of declining interest rates, life insurance and annuity products may be more attractive investments to
consumers, resulting in increased premium payments on certain products, repayment of policy loans and increased
persistency, while our new investments carry lower returns. A market interest rate decline could also reduce our return on
investments that do not support particular policy obligations. During periods of sustained lower interest rates, we may need
to increase our reserves.
Credit Spread Risks
Changes in credit spreads may result in market price volatility and cash flow variability. Market price volatility can
make valuations of our securities difficult if trading becomes less frequent, which may require us to add to our reserves.
Market volatility may cause changes in credit spreads, defaults and a lack of pricing transparency. An increase in credit
spreads relative to U.S. Treasury benchmarks may increase our borrowing costs and decrease certain product fee income. A
sustained decrease in credit spreads could reduce the yield on our future investments. The discount rate used to calculate
liabilities for future policy benefits includes a component for market credit spreads. Changes in market credit spreads could
result in volatility to liabilities for future policy benefits.
Equity Risks
Downturns and volatility in equity markets may harm our savings and investment products’ revenues and investment
returns, where fee income is earned based upon the fair value of our managed assets. Our variable annuity business is
highly sensitive to equity markets, and a sustained weakness or stagnation in the equity markets may decrease these
products’ revenues and earnings. Furthermore, certain of our variable annuity products offer guaranteed benefits that
increase our potential benefit exposure should equity markets decline or stagnate.
34
Table of Contents
Sustained declines in long-term equity returns or interest rates may harm the funding of our pension plans and other
post-retirement benefit obligations. An increase in equity markets could increase settlement payments on equity futures and
total rate of return swaps (“TRRs”), which may increase our cash outflows and liquidity needs.
The timing of distributions from and valuations of our investments in leveraged buy-out funds, hedge funds and other
private equity funds depends on the performance of the underlying investments, distribution schedules, and the funds’ need
for cash. The amount of net investment income from these investments can vary substantially from period to period and
significant volatility may harm our returns and net investment income. In addition, downturns or volatility in the equity
markets may decrease the estimated fair value of our alternative investments and equity securities.
Real Estate Risks
Changes in leasable commercial space supply and demand, pandemics and other public health issues, creditworthiness
of tenants and partners, capital markets volatility, interest rate fluctuations, commodity prices, farm incomes, housing and
commercial property market conditions, and real estate investment supply and demand may adversely impact our
investments in commercial, agricultural and residential mortgage loans, and real estate equity investments including joint
ventures.
Political, Obligor and Counterparty Risks
Our general account investments in certain countries could be adversely affected by volatility resulting from local
economic and political concerns, as well as volatility in specific sectors. Government entities may face budget deficits and
other financial difficulties, which may harm the value of securities we hold issued by or under the auspices of such
governments. In the U.S., one of the most serious threats facing the economy is the disagreement over the federal debt limit
which, if not addressed in the coming months, could lead to a default on the federal debt, adverse market impact and a
recession this year.
The issuers or guarantors of fixed income securities and mortgage loans we own may default on principal and interest
payments they owe us. Additionally, the change in value of underlying collateral within mortgage-backed securities, asset-
backed securities (“ABS”) and collateralized loan obligations (“CLO”) may result in a default on principal and interest
payments, reducing our cash flows. The occurrence of a major economic downturn, acts of corporate malfeasance,
widening credit spreads, or other adverse events may reduce the estimated fair value of our portfolio of fixed income
securities and mortgage loans and increase the default rate of the fixed income securities and mortgage loans in our
investment portfolio.
Many of our transactions with counterparties such as brokers and dealers, central clearinghouses, commercial banks,
investment banks, hedge funds, investment funds, reinsurers and other financial institutions expose us to the risk of
counterparty default. Such credit risk may be exacerbated if we cannot realize on the collateral held by us in secured
transactions or cannot liquidate such collateral at prices sufficient to recover the full amount of the loan or derivative
exposure due to us. Furthermore, potential action by governments and regulatory bodies, such as controlling investment,
nationalization, conservatorship, receivership and other intervention, or lack of action by governments and central banks, as
well as deterioration in the banks’ credit standing, could negatively impact these instruments, securities, transactions and
investments or limit our ability to trade with them. These may cause losses or impairments to the carrying value of our
investments.
Our efforts to manage our total exposure to a single counterparty or limited number of counterparties within or among
any of our investment, derivative, treasury, and reinsurance relationships, which we adjust from time to time, may not
completely or adequately mitigate counterparty risks.
Currency Exchange Rate Risks
Fluctuations in foreign currency exchange rates against the U.S. dollar may adversely affect our non-U.S. dollar
denominated investments, investments in non-U.S. subsidiaries, net income from non-U.S. operations and issuance of non-
U.S. dollar denominated instruments. Fluctuations in foreign currency exchange rates may also make certain of our
products less attractive to customers, which may increase levels of early policy terminations and decrease sales volume and
our in-force business. Such negative effects may be exacerbated if international markets experience severe economic or
financial disruptions or significant currency devaluations, if a foreign economy is determined to be “highly inflationary,” or
if a country withdraws from the Euro zone. Fluctuations in foreign currency exchange rates may harm our operations,
earnings or investments in the affected countries.
We may be unable to mitigate the risk of such changes in exchange rates due to unhedged positions, asymmetrical and
non-economic accounting resulting from derivative gains (losses) on non-qualifying hedges, the failure of hedges to
35
Table of Contents
effectively offset the impact of the foreign currency exchange rate fluctuation, or other factors. Fluctuations in currency
exchange rates may adversely affect the translation of results into our U.S. dollar basis consolidated financial statements.
Derivatives Risks
If our counterparties, clearing brokers or central clearinghouses fail or refuse to honor their obligations under our
derivatives agreements, our risks may not be fully hedged. A counterparty, clearing broker, or central clearinghouse may
become insolvent or otherwise unable or unwilling to make payments or to return collateral under the terms of derivatives
agreements, increasing our costs. If the net estimated fair value of a derivative to which we are a party declines, we may
need to pledge additional collateral or make increased payments. In addition, we may face increased costs to the extent we
replace counterparties who suffer financial difficulties. Furthermore, our derivatives valuations may change based on
changes to our valuation methodology or errors in such valuation or valuation methodology.
Terrorism and Security Risks
The continued threat of terrorism, ongoing or potential military and other actions, and heightened security measures
may cause significant volatility in global financial markets and result in loss of life, property damage, additional
disruptions to commerce and reduced economic activity. The value of our investment portfolio may be adversely affected
by declines in the credit and equity markets and reduced economic activity caused by such threats. Companies in which we
maintain investments may suffer losses as a result of financial, commercial or economic disruptions, and such disruptions
might affect the ability of those companies to pay interest or principal on their securities or mortgage loans. Terrorist or
military actions also could disrupt our operations centers and result in higher than anticipated claims under our insurance
policies.
We May Not Meet Our Liquidity Needs, Access Capital, or May Face Significantly Increased Cost of Capital Due to
Adverse Capital and Credit Market Conditions
In cases of volatility, disruption, or other conditions in global financial markets, we may have to seek additional
financing, the availability and cost of which could be adversely affected by market conditions, regulatory considerations,
availability of credit to our industry generally, our credit ratings and credit capacity, reduced business activity, or investment
losses, and the perception of our financial prospects. Our access to funds may be impaired if regulatory authorities or rating
agencies take negative actions against us. We may not be able to successfully obtain additional financing we need on
favorable terms or at all. We may be required to return significant amounts of cash collateral on short notice under securities
lending or derivatives agreements or post collateral or make payments related to specified counterparty agreements.
Our business and financial results may suffer without sufficient liquidity through impaired ability to pay claims, other
operating expenses, interest on our debt and dividends on our capital stock, cash or collateral to our subsidiaries, maintain our
securities lending, replace certain maturing liabilities, sustain our operations and investments, and repurchase our common
stock. Capital and credit market volatility may limit our access to capital we need to operate, limiting our ability to raise
capital, issue the types of securities we would prefer, timely replace maturing liabilities, satisfy regulatory requirements, and
access capital to grow our business, any of which could decrease our profitability and significantly reduce our financial
flexibility.
We May Be Unable to Access Our Credit Facility, Reducing Our Liquidity and Leading to Downgrades in Our Credit and
Financial Strength Ratings
We may fail to comply with or fulfill all conditions under the unsecured revolving credit facility (the “Credit Facility”)
MetLife, Inc. and MetLife Funding, Inc. (“MetLife Funding”) maintain. Lenders may fail to fund their lending commitments
under the Credit Facility due to insolvency, illiquidity or other reasons.
We May Lose Business Due to a Downgrade or a Potential Downgrade in Our Financial Strength or Credit Ratings
Nationally Recognized Statistical Rating Organizations (“NRSROs”) and others may, at any time, downgrade our
financial strength ratings or credit ratings, lower our ratings outlooks, increase the scope or frequency of their reviews, or
increase capital or other requirements to maintain ratings. Such changes could reduce our product sales, reduce cash flows
from funding agreements and other capital market products, and force us to change product pricing and increase our
financing costs, policy surrenders or withdrawals, collateral requirements, risk of derivative terminations, cost of reinsurance,
regulatory scrutiny, or various other factors.
We May Not Find Available, Affordable or Adequate Reinsurance to Protect Us Against Losses
Reinsurers may increase our reinsurance costs, or may decline to offer us reinsurance, due to policy changes related to
pandemics or other public health issues (such as the COVID-19 pandemic), market conditions, or other factors. Our risk of
36
Table of Contents
loss may increase if we decrease the amount of our reinsurance. Any of these could harm our ability to write future business
or result in the assumption of more risk with respect to the policies we issue.
We may incur costs as a result of a reinsurer’s insolvency, inability or unwillingness to make payments, or inability or
unwillingness to maintain collateral.
Our Statutory Life Insurance Reserve Financings Costs May Increase, and We May Find Limited Market Capacity for
New Financings
If MetLife’s ratings decline, market capacity is limited, or on other repricing occasions, our costs to finance statutory life
insurance reserves may increase. If regulators disallow assets to back statutory reserves, we would not be able to take some or
all related statutory reserve credit, which may harm the statutory capitalization of certain of our insurance subsidiaries.
Regulatory and Legal Risks
Changes in Laws or Regulation, or in Supervisory and Enforcement Policies, May Reduce Our Profitability, Limit Our
Growth, or Otherwise Adversely Affect Us
Insurance or other regulators may change licensing, permit, or approval requirements, or take other actions harmful to us.
They may also take actions that harm our customers and independent sales intermediaries or their operations, which may
affect our business relationships with them and their ability to purchase or distribute our products.
Governments may change regulation of financial services, insurance, variable annuities and variable life insurance,
securities, derivatives, pension, health care, accounting, cybersecurity, privacy and data protection, tort reform legislation,
taxation, benefit plan investment advice and related fiduciary duties, antitrust as applied to the business of health insurance or
otherwise, and other areas. Laws and regulations may also affect customers, sales intermediaries, or others. We or others may
fail to comply with these requirements or suffer adverse regulatory examinations or audits. Regulators may also interpret
rules differently from the way we have, or change interpretations of laws or rules, and legislators may change statutes. Any of
these changes may harm our ability to continue to offer the products we do today or to introduce new products.
We may incur costs to comply with laws and regulations and changes to these laws and regulations may increase our
expenses and regulatory capital charges. Our failure to comply with our own policies or with regulatory requirements may
harm our reputation or result in sanctions or legal claims.
Laws, regulations or regulatory actions may limit or change the type, amount or structure of compensation or benefits we
offer our employees or others, or may limit or ban the use of non-competition agreements, which may harm our ability to
compete in recruiting and retaining key personnel. We may also fail to fulfill our fiduciary or other benefit-related obligations
completely.
Solvency standards compliance may increase our capital and reserve requirements, risk management costs, and reporting
costs. We may be subject to enhanced capital standards, supervision and additional requirements, such as group capital
standards or insurer capital standards. MetLife, Inc. could be compelled to undergo FDIC liquidation if it becomes insolvent
or is in danger of defaulting on its obligations, imposing greater losses on shareholders and unsecured creditors than under the
Bankruptcy Code. This could also apply to financial institutions whose debt we hold and could harm the value of our
holdings. We could be assessed charges in connection with a financial company liquidation.
Our ability to react to rapidly changing economic conditions and the dynamic, competitive markets may be impaired if
our product designs do not allow frequent and contemporaneous revisions of key pricing elements, or if we are unable to
work collaboratively with regulators. Changes in regulatory approval processes, rules and other dynamics in the regulatory
process could harm our ability to react to such changing conditions. Rules on defined benefit pension plan funding may
reduce the likelihood or delay corporate plan sponsors in terminating their plans or engaging in transactions to partially or
fully transfer pension obligations. This could affect the mix of our pension risk transfers and increase non-guaranteed funding
products.
Regulators have reacted and may continue to react to pandemics and other public health issues (such as the COVID-19
pandemic). They may require “no lapse” in policy coverage regardless of whether we receive premiums or are able to assess
fees against policyholder account balances. They may extend insurance coverage beyond our policy or contract terms and
may impose premium grace periods, suspend cancellations, lower or freeze premium rates, allow non-contractual
withdrawals, and extend proof of loss deadlines, including retroactively, exposing us to risks and costs we are unable to
foresee or underwrite. We may also adopt customer accommodations, such as waiving exclusions, forgoing rate increases or
implementing lower rate increases than we would otherwise, relaxing claim documentation requirements, relaxing eligibility
criteria, granting premium credits, or other accommodations for customers experiencing economic or other distress.
37
Table of Contents
Regulators may restrict our underwriting on public policy or other grounds, excluding factors such as exposure, quarantine,
infection, and association with others suffering public health-related effects.
Governmental bodies may delay acting on or implementing regulatory or policy changes due to pandemics or other
public health issues, or because they are attending to pandemic or public health issues rather than to other topics. This may
increase uncertainty, prolong deleterious regulations and policies, delay or prevent beneficial regulatory or policy changes,
and create the potential for later, more rapid changes to which we find it more difficult to adjust.
Our New York insurance regulator’s annual SCL for year-end asset adequacy testing may impose unforeseen
assumptions or requirements that require us to increase or release reserves, which could affect our statutory capital and
surplus.
Governments or Others May Increase our Taxes by Changing or Re-Interpreting Tax Laws, Making Some of Our
Products Less Attractive to Consumers
Changes in tax laws or interpretations of such laws could increase our corporate taxes, reduce our earnings, and adjust
the value of our deferred tax assets and liabilities. Changes may increase our effective tax rate or have implications that make
our products less attractive to consumers. Tax authorities may enact laws, change regulations to increase existing taxes, or
add new types of taxes, and authorities who have not imposed taxes in the past may impose taxes.
Customers shifting away from employee benefits, life insurance and annuity contracts, or other tax-preferred products
would reduce our income from these products and our asset base, reducing our earnings and potentially affecting the value of
our deferred tax assets.
We May Face Increasing Litigation and Regulatory Investigations
Legal or regulatory actions, inquiries or investigations, whether ongoing or yet to come, could harm our reputation,
ability to attract or retain customers or employees, business, financial condition, or results of operations, even if we ultimately
prevail. Regulators or private parties may bring class actions, individual suits, or investigations seeking large recoveries and
alleging wrongs relating to sales or underwriting practices, claims payments and procedures, failure to adequately or
appropriately supervise, inappropriate compensation contrary to licensing requirements, product design, disclosure,
administration, investments, denial or delay of benefits, pandemic- or other public health-related practices (such as those
related to the COVID-19 pandemic), data security incidents, discriminatory or inequitable practices, and breaches of fiduciary
or other duties. We may be unable to anticipate the outcome of a litigation and the amount or range of loss because we do not
know how adversaries, fact finders, courts, regulators, or others will evaluate evidence, the law, or accounting principles, and
whether they will do so differently than we have.
We May Face Changes to Interest Rates, the Value of our Financial Instruments, the Competitiveness of our Products,
the Performance of our Investments, and our Relationships Due to LIBOR’s Discontinuation and the Uncertainties in
Our Transition to Alternative Reference Rates
The FCA, the U.K. regulator of LIBOR, and the ICE Benchmark Administration, the administrator of LIBOR, have
announced the publication cessation dates for all U.S. Dollar and non-U.S. Dollar LIBOR settings. Most settings ceased at the
end of December 2021 and the remaining U.S. Dollar settings (overnight and one-, three-, six- and 12-month U.S. Dollar
LIBOR) will cease at the end of June 2023. The FCA has proposed that the ICE Benchmark Administration continue
publication of one-, three- and six-month U.S. Dollar LIBOR settings on a “synthetic,” or non-representative, basis through
the end of September, 2024. We continue to actively transition to the alternative reference rates. Differences between LIBOR
and the applicable alternative reference rates may impact the value of, return on, and markets for, a broad array of our
products, our financial instruments, the instruments in which we invest, or interest or dividend rates on our borrowing,
preferred stock or debt. The effects on our business and investments will vary depending on the transition of our existing
LIBOR contracts to alternative reference rates, including the adequacy of LIBOR fallback provisions in such contracts,
whether, how, and when industry participants adopt alternative reference rates for new products or instruments, the
availability of “synthetic” LIBOR and the applicability of U.S. legislative remedies that address LIBOR transition risk for
various legacy U.S. Dollar LIBOR contracts. Uncertainty regarding the continued use and reliability of LIBOR, regarding the
calculation of the applicable interest rate or payment amount depending on the terms of the governing instruments, or
regarding the application or effectiveness of alternative reference rates, could increase our costs, reduce the value of such
instruments, or impair our cash or derivative positions. We may not effectively hedge or manage risks from differences
among applicable alternative reference rates or timing of when such rates take effect.
We may fail to adequately prepare for or react to LIBOR discontinuation and replacement, or fail to fully protect
ourselves from all the effects of such changes. We may also fail to manage adequately any transition to alternative reference
rates in a way that maintains the competitiveness of our products and the performance of our investment portfolio. Our
38
Table of Contents
transition may not effectively protect other aspects of our business, such as our operations and the accuracy of the financial
models and valuations we use to gauge our risks, for financial reporting, or other purposes.
Any such uncertainties or ineffective management may harm our reputation, our relationships with our investors,
customers, or regulators, our financial condition, and our business operations.
Our Efforts to Meet Environmental, Social, and Governance Standards and to Enhance the Sustainability of our
Businesses May Not Meet Investors', Regulators' or Customers' Expectations
Some of our shareholders, investors and customers, or those considering such a relationship with us, evaluate our
business or other practices according to a variety of ESG standards and expectations. Some of our regulators have proposed
or announced that they plan to propose ESG rules or announced that they intend to review our practices against ESG
standards; others may do so in the future. Further, we define our own corporate purpose, in part, by the sustainability of our
practices and our impact on all our stakeholders.
Our investors or others may evaluate our practices by ESG criteria that are continually evolving and not always clear or
readily measurable. These standards and expectations may also, as a whole, reflect contrasting or conflicting values or
agendas. Our decisions or priorities must also necessarily, and simultaneously, take account of multiple business goals and
interests. Our practices may not change in the particulars or at the rate stakeholders expect. As a result, our efforts to conduct
our business in accordance with some or all these expectations may involve trade-offs. In June 2022, we announced our goal
to achieve net zero greenhouse gas emissions for our global operations and general account investment portfolio by 2050 or
sooner. We are reorienting our climate commitments to advance this goal, which involves assumptions and expectations that
involve risks and uncertainties. We may fail to meet our commitments or targets, and our policies and processes to evaluate
and manage ESG standards in coordination with other business priorities may not prove completely effective or fully satisfy
investors, regulators, customers or others. Customers and potential customers may be prohibited or choose not to do business
with us based on our sustainability practices and related policies and actions. We may face adverse regulatory, investor,
media, or public scrutiny leading to business, reputational, or legal challenges.
Capital Risks
We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer
Needs
Our financial condition, results of operations, cash requirements, future prospects, capital position, liquidity, financial
strength and credit ratings, as well as regulatory restrictions on the payment of dividends by MetLife, Inc.’s insurance
subsidiaries, general market conditions, the market price of our common stock compared to management’s assessment of the
stock’s underlying value, applicable regulatory approvals, other legal and accounting factors, and any other factors our Board
deems relevant may preclude us from paying dividends or repurchasing our common stock.
Other factors may affect our ability to pay dividends or repurchase our common stock. Governments, investors or media
may pressure us not to repurchase shares of our common stock or other securities, or prohibit us from doing so. Our use of
other means to return excess capital to shareholders may be less tax-efficient than repurchases. We maintain a buffer of cash
and other liquid assets, and may increase it. As a result, we may have less capital to devote to other uses, such as innovation,
acquisitions, development and return of capital to shareholders. We may also be restricted from repurchasing shares or
entering into share repurchase programs at times, such as when we are aware of material non-public information.
If we do not pay dividends on our preferred stock or pay interest on our junior subordinated debentures or trust securities,
terms of those instruments may restrict our ability to pay dividends on or repurchase our common stock. Further, terms
applicable to our Floating Rate Non-Cumulative Preferred Stock, Series A (the “Series A preferred stock”), junior
subordinated debentures and trust securities may prevent us from paying dividends or interest on those instruments. We may
not be able to eliminate these restrictions through the repayment, redemption or purchase of junior subordinated debentures or
other securities.
Our Subsidiaries May be Unable to Pay Dividends, a Major Component of Holding Company Free Cash Flow
If the cash MetLife, Inc. receives from its subsidiaries through dividends and other payments is insufficient for it to fund
its debt service and other holding company obligations, MetLife, Inc. may have to issue debt or equity, or sell assets.
MetLife, Inc. may also not meet its free cash flow or shareholder cash distribution goals.
Insurance regulators may restrict dividends or other payments above certain amounts where their approval is required if
they determine payments could be adverse to our policyholders or contractholders. Business conditions, rating agency
considerations, taxation, dividend and repatriation rules, and monetary transfer and foreign currency exchange rules may limit
39
Table of Contents
our insurance subsidiaries’ dividends and other payments. We may need to transfer capital among our companies to comply
with net worth maintenance or other support agreements, limiting capital available for other purposes.
Investment Risks
We May Face Defaults, Downgrades, Volatility or Other Events That Adversely Affect the Investments We Hold
In case of a major economic downturn, U.S. government default (or threatened default), acts of corporate malfeasance,
widening credit risk spreads, ratings downgrades or other events, our estimated fair value of our fixed income securities and
loan portfolios and corresponding earnings may decline, and the default rate of our investment portfolio may increase. These
changes could harm the issuers or guarantors of securities or the underlying collateral of structured securities that we hold.
We may have to hold more capital to support our securities to maintain our RBC levels if securities we hold suffer a ratings
downgrade. Our intent to sell, or our assessment of the likelihood that we will be required to sell, fixed income securities may
increase our write-downs or impairments. Our realized losses or impairments on these securities may harm our net income.
The default rate, loss severity or other performance of our mortgage loan investments may change. Any concentration of
our mortgage loans by geography, tenancy or property type may have an adverse effect on our investment portfolio, the
prices we can obtain when we sell assets, and our results of operations or financial condition. Legislation or regulations that
would allow or require modifications to the terms of, or impact the value of, mortgage loans or other investments could harm
our investment portfolio.
Pandemics and other major public health issues (such as the COVID-19 pandemic) have affected and may continue to
affect financial markets and our investment portfolio. These may continue to contribute to our risk of investment defaults,
downgrades and volatility, and lower variable investment income and returns, and may cause or exacerbate any of the
investment risks we describe in these risk factors.
Market volatility affects the value of or return on our investments. It may slow or prevent us from reacting to market
events as effectively as we otherwise could. When we sell our investment holdings, we may not receive the prices we seek,
and may sell at a price lower than our carrying value, due to reduced liquidity during periods of market volatility or
disruption, or other reasons. Borrowers may delay or fail to pay principal and interest when due, or may demand loan
modifications. Tenants may delay paying rent, or fail to pay it, or demand lease modifications. We may face moratoriums on
foreclosures and other enforcement actions impairments, and loan or lease modifications, due to government action or market
conditions. We may also encounter credit spread changes, increasing our borrowing costs and decreasing our product fee
income. Issuer or guarantor default rates may increase.
We May Have Difficulty Selling Holdings in Our Investment Portfolio or in Our Securities Lending Program in a Timely
Manner to Realize Their Full Value
When we sell holdings in our investment portfolio, we may not receive the price we seek and may sell at a price lower
than our carrying value. We may face unfavorable conditions in privately-placed fixed income securities, private structured
credit, certain derivative instruments, mortgage loans, policy loans, direct financing and leveraged leases, other limited
partnership interests, tax credit and renewable energy partnerships, and real estate equity, including real estate joint ventures
and funds. Our investments may suffer reduced liquidity during periods of market volatility or disruption or for other reasons.
In addition, central banks' efforts to provide market liquidity or otherwise address market conditions may not be successful or
sufficient. We may realize losses that harm our financial metrics, which could harm our compliance with our credit
requirements and rating agency capital adequacy measures.
We may face similar risks if we are required under our securities lending program to return significant amounts of cash
collateral that we have invested. Our securities lending activities and profitability may decrease.
We May Have to Pledge Collateral or Make Payments in Derivatives Transactions
We may have to pledge additional collateral and increase payments we make under our derivatives transactions.
Regulators, clearinghouses, or counterparties may restrict or eliminate eligible collateral, increase our collateral requirements,
or charge us to pledge such collateral, which would increase our costs, reduce our investment income, and harm our liquidity.
We May Change Our Securities and Investments Valuation, or Take Allowances and Impairments on Our Investments, or
Change Our Methodologies, Estimations, and Assumptions
During periods of market disruption or rapidly changing market conditions, such as significantly rising or high interest
rates, rapidly widening credit spreads or illiquidity, or infrequent trading, or when market data is limited, our assets may
become less liquid. We may base our asset valuations on less observable and more subjective judgments, assumptions, or
40
Table of Contents
methods that may result in estimated fair values that significantly vary by period, and may exceed the investment’s sale price.
The estimated fair value of our securities may also decrease due to changes in valuation methods and assumptions.
Business Risks
Our Actual Claims or Other Results May Differ From Our Estimates, Assumptions, or Models
If our actual claims experience is less favorable than the underlying underwriting, reserving, and other assumptions we
used in establishing claim liabilities, we could be required to reduce value of business acquired (“VOBA”), increase our
liabilities, or incur higher costs.
The amounts that we will ultimately pay to settle our liabilities, particularly when those payments may not occur until
well into the future, may vary from what we expect. We may change our liability assumptions and increase our liabilities
based on actual experience and accounting requirements. Our operating practices and procedures that support our
policyholders and contractholder obligation assumptions, such as obtaining, accumulating, and filtering data, and our use of
technology, such as database analysis and electronic communications, may affect our reserve estimates. If these practices and
procedures do not accurately produce the data to support our assumptions or cause us to change our assumptions, or if
enhanced technological tools become available to us, we may change those assumptions and procedures, as well as our
reserves. If any of our operating practices and procedures do not accurately produce, or reproduce, data that we use to
conduct any or all aspects of our business, such deviations or errors may negatively impact our business, reputation, results of
operations, or financial condition. We may change our assumptions, models, or reserves due to changes in longevity.
Increases in the prevalence and accuracy of genetic testing, or restrictions on its use, may exacerbate adverse selection risks.
Pandemics and other public health issues (such as the COVID-19 pandemic) have caused and may continue to cause
increased claims under many of our policies (for example, life, disability, leave, long-term care, major medical and
supplemental health products), raising our resulting costs. Governments or others may fail to produce accurate population and
impact data that we use in our estimates, assumptions, models, or reserves, such as death rates, infections, morbidity,
hospitalization, or illness. This may cause or exacerbate any of the risks related to our estimates or assumptions. Pandemics
and other public health issues may cause related or consequential long-term economic, social, political, policy, regulatory,
business, demographic, or other changes to our claims or other areas subject to estimates, assumptions, models, or reserves.
We may not accurately predict, prepare, and adjust to these changes.
We May Face a Variety of Political, Legal, Operational, Economic and Other Risks Globally
The global nature of our business operations exposes us to a wide range of political, legal, operational, economic and
other risks, including but not limited to: nationalization or expropriation of assets; imposition of limits on foreign ownership
of local companies; changes in laws, their application or interpretation; political instability; economic or trade sanctions;
sanctions on cross-border exchange listing, investment or other securities transactions; dividend limitations; price controls;
currency exchange controls or other transfer or exchange restrictions; difficulty enforcing contracts; regulatory restrictions;
and public or political criticism of our business and operations. Some of these actions may affect us more harshly than our
peers. Some of our businesses operate in emerging markets, where many of these risks are heightened.
We face other risks that may affect our global operations and investments, including those related to the imposition of
tariffs or other barriers to international trade, changes to international trade agreements, uncertainties in intergovernmental
organizations, pension system reforms, labor problems with workers’ associations or trade unions, and reliance on
interconnected information systems and the security of such systems.
Expanding our operations to new businesses or jurisdictions may require considerable management time and expenses
before significant, if any, revenues and earnings are generated, which may reduce management and financial resources
available for other uses. Our operations in new or existing markets may be unprofitable or achieve low margins.
We May Face Competition for Business
Competitive pressures, based on a number of factors including service, product features, scale, price, financial strength,
claims-paying ratings, credit ratings, e-business capabilities, name recognition, performance against ESG metrics,
technology, adaptation in light of pandemics and other public health issues, changes in regulation and taxes, and other factors,
may adversely affect the persistency of our products and our ability to sell products in the future. We may be harmed by
competition from other insurance companies, as well as non-insurance financial services companies, which may have a
broader array of products, more competitive pricing, higher claims paying ability ratings, greater financial resources with
which to compete, or pre-existing customer bases for financial services products. Additionally, we may lose purchasers of
group insurance products that are underwritten annually due to more favorable terms from competitors. Furthermore, the
41
Table of Contents
investment management and securities brokerage businesses have relatively low barriers to entry and continually attract new
entrants. Our customers and clients may engage other financial service providers, resulting in our loss of business.
An increase in consolidation activity among banks, brokers and broker-dealers may negatively impact the insurance
industry’s sales. It may increase competition for access to distributors, resulting in greater distribution expenses, and may
impair our ability to market insurance products to or expand our current customer base. Consolidation and other industry
changes may also increase the likelihood that distributors will renegotiate agreements on terms less favorable to us.
In addition, legislative and other changes affecting the regulatory environment for our business may not impact all
activities and companies equally, which could adversely affect our competitive position within the insurance industry and the
broader financial services industry.
We Face Technological Changes That Present New and Intensified Challenges and May Fail to Foresee or Adapt to
These Changes
Our business operations rely on functioning and secure information systems and those of our vendors. Technological
changes present us with new or intensified challenges, and if we are unable to foresee or adapt to these changes, our business,
results of operations and financial condition may be adversely affected. For example, our assumptions, models and reserves
may need to be modified if we are unable to accurately, timely, or completely process, store and retrieve the increased
volume and variety of information relating to our businesses, including information related to deaths, that new technological
tools for data collection and analysis make available.
Similarly, our distribution channels may become more automated to increase flexibility of access to our services and
products. We may incur significant costs to implement and adapt to such changes. If we are unsuccessful, our results of
operations, competitive position, reputation and customer and distribution relationships may be harmed. Steps taken to adapt
to these changes, such as changes to the method of collection and analysis of data, could also expose us to litigation or other
regulatory and legal actions.
Technological changes may affect our business model and how we interact with existing or prospective customers, and
evolving consumer preferences may require a redesign of our products and investment composition. For example, changes in
energy technology and increasing consumer preferences for e-commerce may harm the profitability of some businesses. We
may fail to adjust our investments accordingly or suffer stranded assets. If we are unable to update our business model to
match evolving consumer preferences and purchasing behavior, our business, results of operations and financial condition
may be adversely affected.
New technologies may impact the configuration of our information systems, and how they connect with those of our
vendors, service providers and/or partners. Such technological developments may introduce or uncover information security
vulnerabilities, which may result in breaches or increased costs associated with maintaining appropriate cybersecurity and
data protection measures or enforcement actions against us by regulators. Any such vulnerability that results in a security
breach or failure of our information systems, or those of third parties on which we rely, may result in litigation, regulatory
action, negative impacts to our business operations, and reputational harm.
We May Face Catastrophes That Affect Liabilities for Policyholder Claims and Reinsurance Availability
Catastrophic events could increase claims, impair assets in or otherwise harm our investment portfolio, and could harm
our reinsurers’ financial condition, increasing reinsurance defaults. Catastrophic events may also reduce economic activity in
affected areas, which could harm our existing business or prospects for new business, or the value of our investments. The
severity of claims from catastrophic events may be higher if property values increase due to inflation or other factors or our
insured lives or property are geographically concentrated.
Pandemics and other public health issues or other events may cause a large number of illnesses or deaths. Hurricanes,
windstorms, earthquakes, hail, tornadoes, explosions, severe winter weather, fires, floods and mudslides, blackouts and man-
made events such as riot, insurrection, terrorist attacks or acts of war may also cause catastrophic losses and increased claims.
An event that affects the workforce of one or more of our customers could increase our mortality or morbidity claims.
Governmental and non-governmental organizations may not effectively mitigate catastrophes' effects.
Consistent with industry practice and accounting standards, we establish liabilities for claims arising from a catastrophe
only after assessing the probable losses arising from the event. The liabilities we have established may not be adequate to
cover our actual claim liabilities. Our efforts to manage risks may be impeded by restrictions on our ability to withdraw from
catastrophe-prone areas or on reinsurance transactions. We may be unable to obtain catastrophe reinsurance at rates we find
acceptable, or at all. We may also be called upon to make contributions to guaranty associations or similar organizations as a
result of catastrophes.
42
Table of Contents
We May Face Direct or Indirect Effects of Climate Change or Responses to It
Climate change may increase the frequency and severity of short-, medium-, or long-term weather-related disasters,
public health incidents, and pandemics, and their effects may increase over time. Climate change regulation may harm the
value of investments we hold or harm our counterparties, including reinsurers, or increase our compliance costs. Our
regulators may also increasingly focus their examinations on our management of climate-related risks.
We May Need to Fund Deficiencies in Our Closed Block, and May Not Re-Allocate Closed Block Assets
The closed block assets established in connection with the MLIC demutualization, their cash flows, and the revenue from
the closed block policies may not be sufficient to provide for the policies’ guaranteed benefits. If they are not, we must fund
the shortfall. We may choose, for competitive or other reasons, to support policyholder dividend payments with our general
account funds. Such actions may reduce funds otherwise available for other uses.
We May Be Required to Recognize an Impairment of Our Goodwill or Other Long-Lived Assets or to Establish a
Valuation Allowance Against Our Deferred Income Tax Assets
We may reduce our estimated fair value of business units, impairing our goodwill and charging net income, if prolonged
market declines or other factors negatively impact the performance of our businesses.
We may write down long-lived assets if we conclude we will be unable to recover their carrying amount.
We may charge net income because we determine that it is more likely than not that we will not realize a deferred
income tax asset based on the performance of the business and its ability to generate future taxable income. In addition, we
may need to adjust the value of deferred tax assets and liabilities if tax rates change.
We May Be Required to Impair VOBA, VODA or VOCRA
Adverse changes to investment returns, mortality, morbidity, persistency, interest crediting rates, dividends paid to
policyholders, expenses to administer the business, creditworthiness of reinsurance counterparties, significant or sustained
equity market declines, significant changes to bond spreads, and certain other economic variables, such as inflation, could
cause an impairment of the value of distribution agreements acquired (“VODA”), VOBA or the value of customer
relationships acquired (“VOCRA”). We may accelerate amortization or impair these assets in the period these occur.
We May Face Volatility, Higher Risk Management Costs, and Increased Counterparty Risk Due to Guarantees Within
Certain of Our Products
Our liabilities for guaranteed benefits, including but not limited to no-lapse guarantee benefits, guaranteed minimum
death benefits (“GMDBs”), guaranteed minimum withdrawal benefits (“GMWBs”), guaranteed minimum accumulation
benefits (“GMABs”), guaranteed minimum income benefits (“GMIBs”), and minimum crediting rate features could increase
if equity or fixed income funds decline or become more volatile, or interest rates remain low or decrease.
Our derivatives and other risk management strategies to hedge our economic exposure to these liabilities may harm our
results. Our use of reinsurance, derivatives, or other risk management techniques may not sufficiently offset the costs of
guarantees or protect us against losses from changes in policyholder behavior, mortality, or market events.
Policyholders may also change their behavior in unexpected ways. For example, policyholders and contractholders
seeking liquidity due to economic uncertainty or challenges may withdraw or surrender, change their premium payment
practices, exercise product options, or take other actions at rates different from those we expect.
Operational Risks
Our Risk Management Policies and Procedures, or Our Models, May Leave Us Exposed to Unidentified or Unanticipated
Risk
Our enterprise risk management and business continuity policies and procedures may not be sufficiently comprehensive
and may not identify or adequately protect us from every risk to which we are exposed.
Pandemics and other public health issues (such as the COVID-19 pandemic), and authorities’ and people’s reactions
thereto, have resulted in and may continue to result in remote, hybrid and/or flexible office working arrangements and other
unusual conditions. These may strain our risk management and our business continuity plans, introduce or increase our
operational and cybersecurity risks, and otherwise impair our ability to manage our business. They may increase the
frequency and sophistication of attempts at unauthorized access to our technology systems. They may hinder our efforts to
prevent money-laundering or other fraud, whether due to limited abilities to “know our customers,” strains on our programs
43
Table of Contents
to avoid and deter foreign corrupt practices, or otherwise, and may increase both our compliance costs and our risk of
violations.
The assumptions, projections and data on which our risk management models are based may be inaccurate, and our
models may not be suitable for their purpose, be misused, not operate properly, and contain errors. Our decisions and model
adjustments, including determination of reserves, are based on such model output and reports and may be flawed. We may
fail to identify or remediate model errors adequately. Our models may not fully predict future exposures or correctly reflect
past experience.
Our evaluation of markets, clients, catastrophe occurrence or other matters may not always be accurate, complete, up-to-
date or properly evaluated. We may not effectively identify and monitor all risks or appropriately limit our exposures and our
associates, vendors or non-employee sales agents may not follow our risk management policies and procedures. Past or future
misconduct by our associates, vendors or non-employee sales agents could result in investigations, violations of law,
regulatory sanctions, and litigation. We may have to implement more extensive or different risk management policies and
procedures due to legal and regulatory requirements.
Our Policies and Procedures May Be Insufficient to Protect Us From Operational Risks
We may make errors in any of the large number of transactions we process through our complex administrative systems.
Our controls and procedures to prevent such errors may not be effective. Our controls and procedures to comply with and
enforce contractual obligations may not always be effective. Mistakes can subject us to claims from our customers.
If we are unable to obtain necessary and accurate information from our customers or their employees, we may be unable
to provide or verify coverage and pay claims, or we may pay claims without sufficient documentation.
Pandemics and other public health issues (such as the COVID-19 pandemic) have increased, and may continue to
increase, our administrative expenses and have impacted the reliability and efficacy of our operational processes. They may
affect our employees, agents, brokers and distribution partners, vendors, other service providers and counterparties. We may
have difficulties conducting our business, including continued challenges in selling some of our products, such as those
traditionally sold in person. We may face increased workplace safety costs and risks, lose access to critical employees, and
face increased employment-related claims and employee-relations challenges. Any of the third parties to whom we outsource
certain critical business activities may fail to perform due to a force majeure or otherwise.
The controls of our vendors on whom we rely may not meet our standards or be adequate. Our vendors could fail to
perform their services accurately, consistently with applicable law or timely. Our exchange of information with vendors may
be imperfect, or our vendors may suffer financial or reputational distress. Each of these may cause errors, misconduct, or
discontinuation of services.
We may fail to escheat property timely and completely. As a result, we may incur charges, reserve strengthening, and
expenses, regulatory examinations, or penalties.
Our practices and procedures may, at times, limit our efforts to contact all our customers, which may result in delayed,
untimely, or missed customer payments.
Our associates, vendors, non-employee sales agents, customers, or others may commit fraud against us. Our policies and
procedures may be ineffective in preventing, detecting or mitigating fraud and other illegal or improper acts.
We may fail to attract, motivate and retain employees, develop talent, and plan for management succession. The
institution of protocols relating to the COVID-19 pandemic and policies relating to workplace flexibility may exacerbate
these concerns. Additionally, attrition could cause a lapse in implementation of policies and procedures.
Notwithstanding our compliance with regulatory and accounting requirements in relation to internal controls and our
conclusion that internal control over financial reporting is effective as of the date reported, there is a risk that the Company’s
internal controls will prove ineffective and significant deficiencies or material weaknesses in internal controls may occur in
the future.
We May Fail to Protect the Confidentiality and Integrity of Our Data, Including As a Result of a Failure in Our
Cybersecurity or Other Information Security Systems or Our Disaster Recovery Plans or Those of Our Vendors
Our business is highly dependent upon the effective operation of our information systems, and those of our service
providers, vendors, and other third parties. Our business relies on the proper functioning of these systems, including
processing claims, transactions and applications, providing information to customers and distributors, performing actuarial
analyses, retaining customer and business records and other core business functions. A failure in the security of such systems,
use by our employees or agents of unauthorized tools, software or other technology to communicate with customers or
44
Table of Contents
business counterparties or a failure to maintain the security of our internal or external vendors’ systems, or the confidential
information stored thereon, may adversely affect our ability to conduct business, result in regulatory enforcement action and
litigation, and harm our results of operations, financial condition and reputation.
We, our employees, and our vendors, like other commercial entities, continue to be targeted by or subject to computer
viruses or other malicious codes, unauthorized or fraudulent access, human errors, ransomware or cyber-attacks, and other
breaches of cybersecurity and information security systems. Globally, the frequency, severity and sophistication of
cybersecurity incidents have increased, and these trends may continue. While we have implemented, and we require our
critical vendors to implement, what we believe to be effective cybersecurity and data protection measures, including a formal
risk-based information security program, our efforts to minimize the risk of cyber-incidents and protect our information
technology may be insufficient to prevent break-ins, attacks, fraud, security breaches or other unauthorized access to our and
our vendors’ systems, including as a result of software code that contains vulnerabilities that are unknown to us or our
vendors that may increase the potential of cyber-attacks or unauthorized access. We may not timely detect such incidents. If
we or our vendors fail to prevent, detect, address and mitigate such incidents, we may suffer significant financial and
reputational harm. There is no assurance that our security measures or those of our vendors, including information security
policies, administrative, technical and physical controls and other actions designed as preventative, will provide fully
effective protection from such events.
In addition, we routinely transmit, receive and store personal, confidential and proprietary information by electronic
means, including customers’ confidential health-related information. Although we attempt to keep such information
confidential and secure, we may be unable to do so in all events, and we or our vendors may also fail to maintain adequate
internal controls or comply with relevant policies and procedures designed to ensure the privacy of sensitive data. Such
failure may result in our or our vendors’ intentional or unintentional disclosure or misuse of confidential information, as well
as others’ misappropriation of such confidential information, which could damage our reputation, reduce demand for our
products and services and subject us to significant legal and regulatory liability and expenses, which would harm our
business, results of operations and financial condition.
We, our vendors, our reinsurers, and our customers may suffer disasters such as a natural catastrophe, epidemic,
pandemic, industrial accident, blackout, computer virus, terrorist attack, ransomware or cyber-attack, or war, and ours or their
disaster recovery systems may be insufficient to safeguard our ability to conduct normal business operations, obtain
reinsurance and maintain our critical business or information technology systems in such circumstances, particularly if such
disasters affect computer-based data processing, transmission, storage and retrieval systems and/or destroy or otherwise
adversely impact the confidentiality, integrity or availability of valuable data or the financial wherewithal of reinsurers or
vendors. Our ability to conduct business effectively and maintain the security, integrity, confidentiality or privacy of sensitive
data could be severely compromised if, as a result of such disaster, key personnel are unavailable, or our vendors’ ability to
provide goods and services and our associates’ ability to perform their job responsibilities are impaired. We may not carry
business interruption insurance sufficient to protect us from all losses that may result from such interruptions, and any
insurance for liability, operational and other risks may become less readily available or more expensive in the future.
We may not be able to reliably access all the documents and records in the information storage systems we use, whether
electronic or physical. We may fail to obtain or maintain all the records we need to administer and establish appropriate
reserves for benefits and claims accurately and timely. If a data breach released any of our sensitive financial information,
then customers, investors, or regulators may develop an inaccurate perception of our financial condition or results of
operations. We could be compelled to publicly disclose information prematurely in order to dispel such inaccurate
perceptions, or in order to fulfill our disclosure obligations, even if we do not believe the information is yet completely
reliable or confirmed per our usual internal controls and disclosure controls. This may result in harm to our reputation.
Regulators’ or others’ scrutiny of cybersecurity, including new laws or regulations, could increase our compliance costs
and operational burdens, especially as regulatory and legislative focus on cybersecurity matters intensifies. Regulators,
customers, or others may act against us for any cybersecurity failures. We also have an increasing challenge of attracting and
retaining highly qualified personnel to assist us in combating these security threats. Our continuous technological evaluations
and enhancements, including changes designed to update our protective measures, may increase our risk of a breach or gap in
our security. We may incur higher costs to comply with laws on, or regulators’ scrutiny of, our use, collection, management,
or transfer of data and other privacy practices. We are continuously evaluating and enhancing our cybersecurity and
information security systems and creating new systems and processes. However, there can be no assurance that these
measures will be effective in preventing or limiting the impact of future cybersecurity incidents.
45
Table of Contents
We May Face Changes in Accounting Standards
Authorities may change accounting standards that apply to us, and we may adopt changes earlier than required. Changes
in accounting rules applicable to our business may have an adverse impact on our results of operations and financial
condition. For a discussion of the impact of accounting pronouncements issued but not yet implemented, see Note 1 of the
Notes to the Consolidated Financial Statements.
Our Associates May Take Excessive Risks
Our associates, including executives and others who manage sales, investments, products, wholesaling, underwriting, and
others, may take excessive risks. Our compensation programs and practices, and our other controls, may not effectively deter
excessive risk-taking or misconduct.
We May Have Difficulty in or Complications from Marketing and Distributing Our Products
Our product distributors may suspend, alter, reduce or terminate their distribution relationships with us if we change our
strategy, if our business performance declines, as a result of rating agency actions or concerns about market-related risks, or
for other reasons. Our distributors may merge, change their business models in ways that affect us, or terminate their
distribution contracts with us, and new distribution channels could emerge, harming our distribution efforts. Distributors may
try to renegotiate the terms of any existing selling agreements to less favorable terms due to consolidation or other industry
changes or for other reasons. Disruption or changes to our relationships with our distributors could harm our ability to market
our products.
Our employees or unaffiliated firms or agents may distribute our products in an inappropriate manner, or our customers
may not understand them or whether they are suitable.
We May Change Our Pension and Other Postretirement Benefit Plans Assumptions
We may change our discount rate, rate of return on plan assets, mortality rate, compensation level or medical trends
assumptions, harming our benefit plan estimates.
We May be Unable to Protect Our Intellectual Property and May Face Infringement Claims
We may be unable to prevent third parties from infringing on or misappropriating our intellectual property. We may
incur litigation costs to enforce and protect it or to determine its scope or validity, and we may not be successful.
In addition, we may be subject to claims by third parties for infringement of intellectual property, breach of license usage
rights, or misappropriation of trade secrets. We may incur significant expenses for any such claims. If we are found to have
infringed or misappropriated a third-party intellectual property right, we may be enjoined from providing certain products or
services to our customers or from utilizing and benefiting from certain intellectual property. Alternatively, we could be
required to enter into costly licensing arrangements with third parties or implement a costly alternative.
Risks Related to Acquisitions, Dispositions or Other Structural Changes
We May Face Difficulties, Unforeseen Liabilities, Asset Impairments or Rating Actions from Business Acquisitions or
Integrating and Managing Growth of Such Businesses, Dispositions of Businesses, or Legal Entity Reorganizations
Acquisitions and dispositions of businesses, joint ventures, and other structural changes expose us to a number of risks
arising from, among other factors, economic, operational, strategic, financial, tax, legal, regulatory, and compliance. As a
result, there can be no assurance that any acquisition, disposition or reorganization will be completed as contemplated, or at
all. We may not realize the anticipated economic, strategic or other benefits of any transaction. Effecting these transactions
may result in unforeseen expenditures and liabilities or a performance different than we expected. The areas where we face
risks include, among others, rights to indemnification for losses, regulatory, liquidity and capital requirements, loss of
customers, distributors, vendors and key personnel, diversion of management time and resources to acquisition integration
challenges or growth strategies from maximizing business value, and inability to realize anticipated efficiencies. Our success
in conducting business through joint ventures will depend on our ability to manage a variety of issues, including: (i) our
exposure to additional operational, financial, legal, tax or compliance risks as a result of entry into certain joint ventures; (ii)
our dependence on a joint venture counterparty given limits on our ownership or distribution requirements, as well as for
resources, including capital and product distribution, may reduce our control over, financial returns from, or the value of a
joint venture; and (iii) our counterparties' cooperation or their ability to meet obligations, or election to alter, modify or
terminate a relationship.
Reorganizing or consolidating the legal entities through which we conduct business may raise similar risks. Our success
in realizing the benefits from legal entity reorganizations will also depend on our management of various issues, including
46
Table of Contents
regulatory approvals, modification of our operations and changes to our investment portfolios or derivatives hedging
activities.
Any of these risks, if realized, could prevent us from achieving the benefits we expect from such transactions.
We May Face Risks Related to Our Separation from Brighthouse
We may not realize any or all of the expected tax or other benefits of the Brighthouse separation. Brighthouse may not
succeed, causing litigation or regulatory claims against us.
Governance Risks
MetLife, Inc.’s Board of Directors May Influence the Outcome of Stockholder Votes on Matters Due to the Voting
Provisions of the MetLife Policyholder Trust
Our Board of Directors may be able to influence stockholder votes by virtue of the provisions of the MetLife
Policyholder Trust and the number of shares of MetLife, Inc. common stock held by it. Trust beneficiary vote instructions are
likely to have disproportionate weight on votes concerning certain fundamental corporate actions because the trustee will vote
all the shares of common stock held by the trust in proportion to those instructions actually received.
We may incur regulatory, mailing, or other costs related to the termination of the trust, distribution of the common stock
held in the trust to beneficiaries and the resulting increase in the number of shareholders. The increase to our shareholder base
with full voting rights may affect the outcome of matters brought to a stockholder vote and other aspects of our corporate
governance.
State or Federal Laws, or MetLife, Inc.’s Certificate of Incorporation and By-Laws, May Delay, Deter or Prevent
Takeovers and Business Combinations
State laws, federal laws and MetLife, Inc.’s certificate of incorporation and by-laws may delay, deter or prevent a
takeover attempt that stockholders might consider favorable. These provisions may adversely affect the price of MetLife,
Inc.’s common stock if they discourage takeover attempts.
Stockholders’ changes to MetLife, Inc.’s corporate governance may make it more difficult for the Board of Directors to
protect stockholders’ interests.
Item 1B. Unresolved Staff Comments
MetLife has no unresolved comments from the SEC staff regarding its periodic or current reports under the Exchange
Act.
Not applicable.
Item 2. Properties
Item 3. Legal Proceedings
See Note 21 of the Notes to the Consolidated Financial Statements.
Item 4. Mine Safety Disclosures
Not applicable.
47
Table of Contents
Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Issuer Common Equity
MetLife, Inc.’s common stock, par value $0.01 per share, began trading on the New York Stock Exchange under the
symbol “MET” on April 5, 2000.
At February 14, 2023, there were 73,182 stockholders of record of our common stock.
See Item 12 for information about our equity compensation plans.
Issuer Purchases of Equity Securities
Purchases of MetLife, Inc. common stock made by or on behalf of MetLife, Inc. or its affiliates during the quarter ended
December 31, 2022 are set forth below:
Period
October 1 - October 31, 2022
November 1 - November 30, 2022
December 1 - December 31, 2022
Total
__________________
Total Number of
Shares
Purchased (1)
Average Price
Paid per Share
Total Number of
Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Maximum Number (or
Approximate Dollar Value)
of Shares that May Yet
Be Purchased Under the
Plans or Programs (2)
2,790,495
2,301,836
3,373,502
8,465,833
$63.24
$74.94
$73.37
2,790,495
2,301,836
3,373,371
8,465,702
$1,625,053,649
$1,452,554,390
$1,205,055,962
(1)
(2)
During the periods October 1 through October 31, 2022, November 1 through November 30, 2022 and December 1
through December 31, 2022, separate account index funds purchased 0 shares, 0 shares and 131 shares, respectively, of
MetLife, Inc. common stock on the open market in non-discretionary transactions.
In May 2022, MetLife, Inc. announced that its Board of Directors authorized $3.0 billion of common stock
repurchases. At December 31, 2022, MetLife, Inc. had $1.2 billion of common stock repurchases remaining under the
authorization. For more information on common stock repurchases, see “Risk Factors — Capital Risks — We May
Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer
Needs,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and
Capital Resources — The Company — Liquidity and Capital Uses — Common Stock Repurchases” and Note 16 of
the Notes to the Consolidated Financial Statements.
Common Stock Performance Graph
The graph and table below compare the total return on our common shares with the total return on the S&P Global
Ratings (“S&P”) 500, S&P 500 Insurance, S&P 500 Financials and S&P 500 Life & Health Insurance indices, respectively,
for the five-year period ended on December 31, 2022. The graph and table show the total return on a hypothetical $100
investment in our common shares and in each index, respectively, on December 31, 2017, including the reinvestment of all
dividends. We have added the S&P 500 Life & Health Insurance Index to this Annual Report on Form 10-K, as the
companies in this index comprise a more relevant comparator group in terms of business, scale, performance drivers, and
competition for investor capital than the other indices included in the graph and table below. The graph and table below shall
not be deemed to be “soliciting material” or to be “filed,” or to be incorporated by reference in future filings with the SEC, or
to be subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by
reference into a document filed under the Securities Act or the Exchange Act.
48
Table of Contents
As of December 31,
2017
2018
2019
2020
2021
2022
MetLife, Inc. common stock
$
100.00 $
84.23 $
108.53 $
104.82 $
144.05 $
S&P 500
S&P 500 Insurance
S&P 500 Financials
S&P 500 Life & Health Insurance
100.00
100.00
100.00
100.00
95.62
88.79
86.97
79.23
125.72
114.88
114.91
97.60
148.85
114.38
112.96
88.35
191.58
151.12
152.54
120.76
171.75
156.88
166.42
136.48
133.25
49
CUMULATIVE TOTAL RETURNBased upon an initial investment of $100 on December 31, 2017with dividends reinvestedMetLife, Inc.S&P 500 S&P 500 Insurance S&P 500 FinancialsS&P 500 Life & Health Insurance31-Dec-1731-Dec-1831-Dec-1931-Dec-2031-Dec-2131-Dec-22$50$100$150$200
Table of Contents
Item 6. Reserved
50
Table of Contents
Item 7. 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
Consolidated Company Outlook
Industry Trends
Summary of Critical Accounting Estimates
Acquisitions and Dispositions
Results of Operations
Investments
Derivatives
Policyholder Liabilities
Liquidity and Capital Resources
Adopted Accounting Pronouncements
Future Adoption of Accounting Pronouncements
Non-GAAP and Other Financial Disclosures
Risk Management
Subsequent Events
Page
52
52
54
55
62
70
71
88
104
106
113
129
129
130
133
135
51
Table of Contents
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. This discussion should be read in conjunction with “Note
Regarding Forward-Looking Statements,” “Risk Factors,” “Quantitative and Qualitative Disclosures About Market Risk” and
the Company’s consolidated financial statements included elsewhere herein.
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. See “Note Regarding Forward-Looking Statements” for cautionary
language regarding forward-looking statements.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes references to our
performance measures, adjusted earnings and adjusted earnings available to common shareholders, that are not based on
GAAP. See “— Non-GAAP and Other Financial Disclosures” for definitions and a discussion of these and other financial
measures, and “— Results of Operations” and “— Investments” for reconciliations of historical non-GAAP financial
measures to the most directly comparable GAAP measures.
For information relating to the Company’s financial condition and results of operations as of and for the year ended
December 31, 2020, as well as for the year ended December 31, 2021 compared with the year ended December 31, 2020, see
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in MetLife, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2021.
Executive Summary
Overview
MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits
and asset management. MetLife is organized into five segments: U.S.; Asia; Latin America; EMEA; and MetLife Holdings.
In addition, the Company reports certain of its results of operations in Corporate & Other. See “Business — Segments and
Corporate & Other” and Note 2 of the Notes to the Consolidated Financial Statements for further information on the
Company’s segments and Corporate & Other.
Current Year Highlights
During 2022, adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased compared to
2021 driven by growth in our U.S. segment, primarily in our RIS business. Equity market returns had a less favorable impact
on our private equity funds and hedge funds compared to 2021 and resulted in lower investment yields, however, positive net
flows drove an increase in our investment portfolio. An unfavorable change in net investment gains (losses) primarily reflects
2022 losses versus 2021 gains on sales of fixed maturity securities and the 2021 gain on the sale of Metropolitan Property and
Casualty Insurance Company and certain of its wholly-owned subsidiaries (collectively, “MetLife P&C”), partially offset by
the 2021 losses on the sale of certain subsidiaries. Higher long-term interest rates drove an unfavorable change in net
derivative gains (losses). Underwriting experience was favorable and reflected an overall decline in COVID-19 related
claims. Our actuarial assumption review resulted in a gain in 2022 versus a charge in 2021. In addition, 2022 results include
the favorable impact from a reinsurance recapture and the unfavorable impact from model refinements.
52
Table of Contents
The following represents segment level results and percentage contributions to total segment level adjusted earnings
available to common shareholders for the year ended December 31, 2022:
(1) Excludes Corporate & Other adjusted loss available to common shareholders of $844 million.
(2) Consistent with GAAP guidance for segment reporting, adjusted earnings is our GAAP measure of segment performance.
For additional information, see Note 2 of the Notes to the Consolidated Financial Statements.
53
Table of Contents
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Consolidated Results - Highlights
Net income (loss) available to MetLife, Inc.’s
common shareholders down $4.0 billion:
• Unfavorable change in net investment gains
(losses) of $2.8 billion ($2.2 billion, net of
income tax)
• Unfavorable change in net derivative gains
(losses) of $144 million ($114 million, net of
income tax)(2)
• Favorable change from actuarial assumption
reviews of $356 million ($269 million, net of
income tax)(3)
• Adjusted earnings available to common
shareholders down $2.4 billion
(1) See “— Results of Operations — Consolidated Results” and “— Non-GAAP and Other Financial Disclosures” for
reconciliations and definitions of non-GAAP financial measures.
(2) Includes amounts relating to investment hedge adjustments, which are also included in adjusted earnings available to
common shareholders. See “— Investments — Current Environment — Investment Portfolio Results” for additional
information.
(3) Includes amounts recognized in net derivative gains (losses) and adjusted earnings available to common shareholders.
See “— Results of Operations — Consolidated Results — Year Ended December 31, 2022 Compared with the Year
Ended December 31, 2021 — Actuarial Assumption Review and Certain Other Insurance Adjustments” for
additional information.
Consolidated Results - Adjusted Earnings Highlights
Adjusted earnings available to common shareholders was down $2.4 billion primarily due to (i) lower investment
yields as a result of the unfavorable impact of lower equity market returns on our private equity funds and hedge funds,
(ii) higher interest credited expense and (iii) higher expenses, partially offset by (i) higher net investment income due to a
larger average invested asset base, and (ii) favorable underwriting, primarily driven by an overall decline in COVID-19
related claims.
Our results for 2022 also included the favorable impacts from a reinsurance recapture in our U.S. segment, a
reinsurance settlement in our MetLife Holdings segment and our actuarial assumption review, as well as the unfavorable
impact from model refinements in our MetLife Holdings segment. Our results for 2021 included the favorable impacts of
tax adjustments related to an IRS audit settlement and the non-cash transfer of assets from a wholly-owned U.K.
investment subsidiary to its U.S. parent, as well as the release of a legal reserve, all in Corporate & Other, and the
unfavorable impact of our actuarial assumption review.
For a more in-depth discussion of our consolidated results, see “— Results of Operations — Consolidated Results,”
“— Results of Operations — Consolidated Results — Adjusted Earnings” and “— Results of Operations — Segment
Results and Corporate & Other.”
Consolidated Company Outlook
Our outlook reflects the impacts of the adoption of targeted improvements to the accounting for long-duration contracts
(“LDTI”). We assume COVID-19 to be endemic consistent with the recent trends that we have been experiencing. We expect
continued uncertainty to persist around inflation and a potential recession.
54
Table of Contents
We expect interest rates to remain elevated relative to December 31, 2022. We believe that our investment portfolio is
highly diversified and positioned to perform well in a variety of economic scenarios. See “— Industry Trends — Impact of
Market Interest Rates” for discussion of the mitigating actions the Company has taken to reduce interest rate sensitivity, as
market interest rates are a key driver of our results.
As of December 31, 2022, we had $5.4 billion of cash and liquid assets at the holding companies which is above the
high end of our $3.0 billion to $4.0 billion holding company cash target. In 2023, we expect to maintain this holding
company cash target.
Our continued capital stress testing and longstanding commitment to liquidity position us to withstand a variety of
economic conditions. We do not expect any material liquidity deficiencies, and we expect to remain able to comply with the
financial covenants of our credit agreements. See “— Liquidity and Capital Resources.” We will continue reviewing
accounting estimates, asset valuations and various financial scenarios for capital and liquidity implications. See “—
Investments — Current Environment” and “Risk Factors” for additional information.
Assuming (i) interest rates following the observable forward yield curves as of December 31, 2022, including a 10-year
U.S. Treasury rate of 3.88% at December 31, 2022, and 3.84% at December 31, 2023, (ii) S&P 500 equity index annual
return of 5% over the near-term, and (iii) private equity annual returns of 12% over the near-term consistent with historical
long-term averages; we expect to maintain the two-year average annual ratio of free cash flow to adjusted earnings, excluding
total notable items, at 65% to 75%.
Further, based on the aforementioned assumptions, the growing impact of our mix of business and higher new business
returns over the last several years, as well as the impact of LDTI, we are increasing our target for adjusted return on equity,
excluding accumulated other comprehensive income (“AOCI”) other than foreign currency translation adjustments (“FCTA”)
to 13% to 15% over the near-term. Lastly, we expect to exceed our goals to generate approximately $20.0 billion of free cash
flow and make available an additional $1.0 billion to invest in growth and innovation, over the time period of 2020 through
2024.
Our full year direct expense ratio target, excluding total notable items related to direct expenses and pension risk
transfers, is 12.6% over the near-term. This increase from the previous target of 12.3% reflects a reduction in adjusted
premiums, fees and other revenues, excluding pension risk transfers, due to the impact of the adoption of LDTI. Since this
change in accounting will be applied retrospectively to January 1, 2021, our previously reported direct expense ratios will
likewise be re-calibrated to put 2021 and 2022 on the same basis as 2023 and beyond.
Our outlook relies on the accuracy of our assumptions about future economic and business conditions, which can be
affected by known and unknown risks, uncertainties and other factors. We continually review our assumptions, implement
mitigation plans, and take precautions. We may revise our outlook as we obtain more information regarding economic
conditions, regulatory changes, and other events, and the impact of these events on our business operations, investment
portfolio, derivatives, financial results and financial condition.
Industry Trends
We continue to be impacted by the changing 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 financial markets and the
economy generally due to our market presence in numerous countries, our large investment portfolio and the sensitivity of
our insurance liabilities and derivatives to changing market factors.
We are closely monitoring political and economic conditions that might contribute to global market volatility and impact
our business operations, investment portfolio and derivatives, such as global inflation, supply chain disruptions, the Russia-
Ukraine conflict and the COVID-19 pandemic. We are also monitoring the imposition of tariffs, sanctions or other barriers to
international trade, changes to international trade agreements, and their potential impacts on our business, results of
operations and financial condition. See “— Impact of Market Interest Rates — Effects of Inflation,” and “— Investments —
Current Environment.”
55
Table of Contents
Governments and central banks around the world are using fiscal and monetary policies to address uncertain economic
conditions. In the U.S., the Federal Reserve Board and the Federal Open Market Committee took various actions in 2022 to
promote economic stability and combat inflation, including raising interest rates, although a heightened level of concern
about an economic downturn in the U.S. remains. The European Central Bank and Bank of England have been taking similar
actions. In contrast, the Bank of Japan (“BoJ”) has mostly kept its monetary policy settings on hold, reflecting a more
cautious view on growth. The Japanese yen weakened to its lowest level against the U.S. dollar since the 1990s as monetary
policy divergence has widened between the BoJ and the Federal Reserve Board.
Impact of Market Interest Rates
Market interest rates are a key driver of our results. Increases and decreases in such rates, as well as extended periods of
stagnation, may impact our business and investments in various ways.
Effects of Inflation
Management believes that while inflation has not had a material effect on the Company’s consolidated results of
operations, except insofar as inflation may affect interest rates, both rising interest rates and inflation will have a neutral to
modest impact on our business. See “— Impact of a Rising Interest Rate Environment” and “— Interest Rate Scenarios.”
An increase in inflation could affect our business in several ways. In our group life and disability businesses,
premiums increase as compensation levels of our customers’ employees increase. However, during inflationary periods
with rising interest rates, the value of fixed income investments falls which could increase realized and unrealized losses,
resulting in additional deferred tax assets that may not be realizable. Inflation also increases expenses for labor and other
costs, potentially putting pressure on profitability if such costs cannot be passed through in our product prices. Prolonged
and elevated inflation could adversely affect the financial markets and the economy generally, and dispelling it may require
governments to pursue a restrictive fiscal and monetary policy, which could constrain overall economic activity, inhibit
revenue growth and reduce the number of attractive investment opportunities.
Impact of a Sustained Low Interest Rate Environment
Sustained periods of low U.S. interest rates may cause us to:
•
•
•
•
•
•
Reduce the difference between interest credited to policyholders and interest earned on supporting assets
(“gross margin”);
Reinvest investment proceeds in lower yielding assets and experience higher frequency prepayment or
redemption of assets in our portfolio;
Increase our reserves related to policy liabilities and potentially impair intangible assets;
Reduce interest expense, change pension and other post-retirement benefit calculations, and change
derivative cash flows and market values;
Change our product offerings, design features, crediting rates and sales mix; and
Experience changing policyholder behavior, including surrender or withdrawal activity.
For additional discussion on gross margin and interest rate assumptions, as well as the potential impact of low interest
rates, see “— Results of Operations — Consolidated Results — Year Ended December 31, 2022 Compared with the Year
Ended December 31, 2021 — Actuarial Assumption Review and Certain Other Insurance Adjustments;” “Risk Factors —
Economic Environment and Capital Markets Risks — We May Face Difficult Economic Conditions — Interest Rate
Risks;” “Risk Factors — Business Risks — We May Be Required to Impair VOBA, VODA or VOCRA;” “Risk Factors —
Business Risks — We May Be Required to Recognize an Impairment of Our Goodwill or Other Long-Lived Assets or to
Establish a Valuation Allowance Against Our Deferred Income Tax Assets;” and “Risk Factors — Business Risks — We
May Face Volatility, Higher Risk Management Costs, and Increased Counterparty Risk Due to Guarantees Within Certain
of Our Products.”
Impact of a Rising Interest Rate Environment
Periods of rising U.S. interest rates may cause us to:
•
•
Reinvest investment proceeds in higher yielding assets and experience lower frequency prepayment or
redemption of assets in our portfolio;
Decrease the value of our reserves related to policy liabilities;
56
Table of Contents
•
•
Increase interest expense, change pension and other post-retirement benefit calculations, and change
derivative cash flows and market values; and
Change our product offerings, design features, crediting rates and sales mix.
For additional discussion on the potential impact of rising interest rates, see “Risk Factors — Investment Risks — We
May Change Our Securities and Investments Valuation, or Take Allowances and Impairments on Our Investments, or
Change Our Methodologies, Estimations, and Assumptions.”
Management Actions
To manage the impact of a changing U.S. interest rate environment, we maintain diversification across products,
distribution channels, and geographies while proactively evaluating interest rate and product strategies. In addition, we
apply disciplined asset/liability management (“ALM”) strategies, including the use of derivatives. Our ability to take such
actions may be limited by competition, regulatory approval requirements, or minimum crediting rate guarantees and may
not match the timing or magnitude of interest rate changes.
In addition to proactive management strategies, businesses within our Latin America, EMEA, and Asia (exclusive of
our Japan business) segments help manage impacts to our consolidated results given their limited U.S. interest rate
sensitivity.
For additional discussion on interest rate risk management and our ability to change interest crediting rates or dividend
scales, see “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic
Conditions — Interest Rate Risks;” “— Policyholder Liabilities;” “— Risk Management;” and “Quantitative and
Qualitative Disclosures About Market Risk — Management of Market Risk Exposures.”
Interest Rate Scenarios
To illustrate our sensitivity to U.S. interest rates, we compared the outcome of two hypothetical interest rate
environments (the “Declining Interest Rate Scenario” and “Rising Interest Rate Scenario”) relative to our baseline
economic assumptions (the “Base Scenario”) through 2025.
The Declining Interest Rate Scenario assumes U.S. interest rates for all maturities decline immediately on January 1,
2023 by 50 basis points compared to the Base Scenario through 2025. The Rising Interest Rate Scenario assumes U.S.
interest rates rise immediately on January 1, 2023 by 50 basis points through 2025. Other than changing U.S. interest rates
through 2025, all other economic assumptions are equivalent in the Base Scenario, Declining Interest Rate Scenario and
Rising Interest Rate Scenario.
The following table compares the most relevant interest rate assumptions for the dates indicated:
2023
2024
2025
Years Ended December 31,
Base
Scenario
Declining
Interest Rate
Scenario
Rising
Interest Rate
Scenario
Base
Scenario
Declining
Interest Rate
Scenario
Rising
Interest Rate
Scenario
Base
Scenario
Declining
Interest Rate
Scenario
Rising
Interest Rate
Scenario
Three-month
LIBOR
10-year U.S.
Treasury
30-year U.S.
Treasury
4.74%
4.24%
5.24%
3.52%
3.02%
4.02%
3.41%
2.91%
3.91%
3.84%
3.34%
4.34%
3.86%
3.36%
4.36%
3.93%
3.43%
4.43%
3.91%
3.41%
4.41%
3.89%
3.39%
4.39%
3.88%
3.38%
4.38%
Hypothetical Impact to Net Derivative Gains (Losses) and Adjusted Earnings
We estimate a net favorable impact to net derivative gains (losses) from non-VA program derivatives through 2025
for the hypothetical Declining Interest Rate Scenario. We hold significant positions in long-duration receive-fixed U.S.
interest rate swaps, which are most sensitive to the 10-year and 30-year swap rates, to hedge reinvestment risk. We
estimate a net unfavorable impact to net derivative gains (losses) from the non-VA program derivatives through 2025 for
the hypothetical Rising Interest Rate Scenario. For purposes of the two hypothetical interest rate scenarios, we have
excluded all VA program derivatives. For information regarding our VA and non-VA program derivatives, see “—
Results of Operations — Consolidated Results.”
57
Table of Contents
We estimate a net unfavorable impact to consolidated adjusted earnings through 2025 for the hypothetical Declining
Interest Rate Scenario. The negative impact of reinvesting cash flows in lower yielding assets is partially offset by
lowering interest crediting rates and dividend scales on products, and additional derivative income. We estimate a net
favorable impact to consolidated adjusted earnings through 2025 for the hypothetical Rising Interest Rate Scenario. The
positive impact of reinvesting cash flows in higher yielding assets is partially offset by increased interest crediting rates
and dividend scales on products and lower derivative income.
The following table summarizes the hypothetical impact on net derivative gains (losses) and adjusted earnings for
certain of our segments, as well as Corporate & Other, for the Declining Interest Rate Scenario:
Net Derivative Gains (Losses):
Non-VA Program Derivatives
Adjusted Earnings:
U.S.
Group Benefits
RIS
Asia (Japan only)
MetLife Holdings
Corporate & Other
$
$
Years Ended December 31,
2023
2024
2025
(In millions - post-tax)
443
$
(6) $
(23)
(49) $
(53) $
(4)
(45)
(3)
(17)
17
(6)
(47)
(18)
(31)
4
(65)
(16)
(49)
(37)
(42)
(25)
Total Adjusted Earnings Impact
$
(52) $
(98) $
(169)
The following table summarizes the hypothetical impact on net derivative gains (losses) and adjusted earnings for
certain of our segments, as well as Corporate & Other, for the Rising Interest Rate Scenario:
Net Derivative Gains (Losses):
Non-VA Program Derivatives
Adjusted Earnings:
U.S.
Group Benefits
RIS
Asia (Japan only)
MetLife Holdings
Corporate & Other
Years Ended December 31,
2023
2024
2025
(In millions - post-tax)
$
$
(347) $
—
$
55
$
56
$
8
47
2
33
(2)
7
49
18
42
3
13
71
17
54
38
47
25
Total Adjusted Earnings Impact
$
88
$
119
$
181
58
Table of Contents
Segments and Corporate & Other
The primary drivers impacting certain of our segments, as well as Corporate & Other, in the hypothetical interest
rate scenarios are summarized below. Our Latin America, EMEA, and Asia (exclusive of our Japan business) segments
are excluded given their limited U.S. interest rate sensitivity. For additional information regarding account values subject
to minimum crediting rate guarantees, the maturity profile of fixed maturity securities available-for-sale (“AFS”), and the
yield on invested assets, see “— Investments,” “— Policyholder Liabilities — Policyholder Account Balances,” and
Note 8 of the Notes to the Consolidated Financial Statements.
U.S.
Group Benefits
Declining Interest Rate Scenario. Our group life insurance products are primarily renewable term policies. This
provides repricing flexibility to mitigate the negative impact of reinvesting in lower yielding assets.
Our retained asset accounts experience gross margin compression due to minimum crediting rate guarantees.
Additionally, we experience gross margin compression from our disability policy claim reserves for which crediting
rates cannot be reduced. We use interest rate derivatives to mitigate gross margin compression for both products.
Gross margin compression is limited for our group disability products, which are generally renewable term
policies allowing for crediting rate adjustments at renewal based on the retrospective experience rating and the
prevailing interest rate assumptions.
Rising Interest Rate Scenario. We reinvest our cash flows from our group insurance products in higher yielding
assets, mitigating the impact of (i) higher interest crediting rates on, primarily, our retained asset accounts, and (ii)
lower income from our derivative positions used to mitigate low interest rate margin compression.
Retirement and Income Solutions
This business contains both short- and long-duration products consisting of capital market products, pension
risk transfers, structured settlements, and other benefit funding products.
The two hypothetical interest rate scenarios do not assume any additional ALM actions we may take to preserve
margins.
Declining Interest Rate Scenario. A significant portion of short-duration products are managed on a floating
rate basis, which mitigates gross margin compression. Our long-duration products have very predictable cash flows
and we use both interest rate derivatives and asset/liability duration matching to mitigate gross margin compression.
These mitigating strategies partially offset the negative impact of reinvesting in lower yielding assets. Based on our
investment portfolios and expected cash flows, only a small portion of invested assets are subject to reinvestment
risk through 2025.
Rising Interest Rate Scenario. Our long-duration products which have very predictable cash flows benefit from
reinvesting in higher yielding assets, which is partially offset by the negative impact of lower income from
derivative positions designed to protect against a low interest rate environment. A significant portion of our short-
duration products are managed on a floating rate basis. The negative impact of higher crediting rates on these short-
duration products is partially offset by higher income from derivative positions designed to protect against a rising
interest rate environment.
Asia
Declining Interest Rate Scenario. Our Japan business offers traditional life insurance and accident & health
products, many of which are U.S. dollar denominated. We experience gross margin compression to the extent our
investment portfolios are U.S. interest rate sensitive and we are unable to offset the impact by lowering interest
crediting rates. Additionally, we manage interest rate risk on our life products through a combination of product design
features and ALM strategies.
Our Japan business also offers U.S. dollar denominated annuities which are predominantly single premium
products with crediting rates set upon issuance. This allows for tightly managing product ALM, cash flows and net
spreads, which mitigates interest rate risk.
59
Table of Contents
Rising Interest Rate Scenario. For U.S. dollar denominated products, higher reinvestment rates on cash flows from
these products more than offset the negative impacts of (i) higher interest crediting rates on such products, and (ii)
lower income from derivative positions designed to protect against a low interest rate environment.
MetLife Holdings
Declining Interest Rate Scenario. Our interest rate sensitive life products include traditional and universal life
products. Since most of our traditional life insurance is participating, we can mitigate gross margin compression by
adjusting the applicable dividend scale. For our universal life products, we manage interest rate risk through a
combination of product design features and ALM strategies, including the use of interest rate derivatives. Although we
are able to mitigate gross margin compression by lowering interest crediting rates on certain in-force universal life
policies, these actions may be partially offset by increased liabilities for policies with secondary guarantees.
Our annuity products experience gross margin compression primarily from deferred annuities with minimum
crediting rate guarantees. Most of these contracts are at their minimum crediting rate, and therefore we use interest rate
derivatives to partially mitigate gross margin compression.
Our long-term care business experiences gross margin compression as we cannot reduce interest crediting rates for
established claim reserves. Long-term care policies are guaranteed renewable, and rates may be adjusted on a class
basis with regulatory approval to reflect emerging experience. We review the discount rate assumptions and other
assumptions associated with our long-term care claim reserves no less frequently than annually and, with respect to
interest rates, set the discount rate based on the prevailing interest rate environment.
Our retained asset accounts experience gross margin compression due to minimum crediting rate guarantees. Most
of these accounts are at their minimum crediting rates and therefore we use interest rate derivatives to mitigate gross
margin compression.
Based on our investment portfolios and cash flow estimates, approximately 5% of our invested assets each year
are subject to reinvestment risk through 2025.
Rising Interest Rate Scenario. Higher reinvestment rates on cash flows, over time, more than offset the negative
impacts of (i) higher interest crediting rates, and (ii) lower income from derivative positions designed to protect against
a low interest rate environment.
Corporate & Other
Corporate & Other contains the surplus investment portfolios used to fund capital and liquidity needs, certain
reinsurance agreements, collateral financing arrangements, and our outstanding debt and preferred securities. For
purposes of the two hypothetical interest rate scenarios, the impact on pension and postretirement plan expenses is
included within Corporate & Other and not allocated across segments.
Declining Interest Rate Scenario. The negative impact of reinvesting in lower yielding assets, over time, more
than offsets the positive impact of lower interest expense on debt, preferred stock dividends and lower pension
expense. Although low interest rates result in pension and other postretirement benefit liabilities increasing, the impact
is more than offset by the corresponding returns on fixed income investments and results in lower expenses.
Rising Interest Rate Scenario. The positive impact of reinvesting in higher yielding assets, over time, more than
offsets the negative impact of higher interest expense on debt, preferred stock dividends and higher pension expense.
Although higher interest rates result in pension and other postretirement benefit liabilities decreasing, the impact is
more than offset by the corresponding returns on fixed income investments and results in higher expenses.
60
Table of Contents
Competitive Pressures
The life insurance industry remains highly competitive. See “Business — Competition.” Product development is focused
on differentiation leading to more intense competition with respect to product features and services. Certain of the industry’s
products can be quite homogeneous and subject to intense price competition. Cost reduction efforts are a priority for industry
players, with benefits resulting in price adjustments to favor customers and reinvestment capacity. Larger companies have the
ability to invest in brand equity, product development, technology optimization, risk management, and innovation, which are
among the fundamentals for sustained profitable growth in the life insurance industry. Insurers are focused on their core
businesses, specifically in markets where they can achieve scale. Insurers are increasingly seeking alternative sources of
revenue; there is a focus on monetization of assets, fee-based services, and opportunities to offer comprehensive solutions,
which include providing value-added services along with traditional products. Financial strength and flexibility and
technology modernization are prerequisites for sustainable growth in the life insurance industry. Larger market participants
tend to have the capacity to invest in analytics, distribution, and information technology and have the ability to leverage the
capabilities of new digital entrants. There is a shift in distribution from proprietary to third party models in mature markets,
due to the lower cost structure. Evolving customer expectations are having a significant impact on the competitive
environment as insurers strive to offer the superior customer service demanded by an increasingly sophisticated industry
client base. Rising demands from stakeholders to address ESG issues have resulted in insurers expanding their sustainability
efforts. Legislative and other changes affecting the regulatory environment can also affect the competitive environment
within the life insurance industry and within the broader financial services industry. See “Business — Regulation.” In
addition to financial strength, technological efficiency and organizational agility, we believe that the ability to adapt to
changes in the competitive environment as a result of global market volatility, changing interest rates, uncertain economic
conditions and the COVID-19 pandemic is a significant differentiator to success in the life insurance industry and the broader
financial services industry, and we are well positioned to compete in this environment.
Regulatory Developments
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. As life insurers introduce new and often more complex products, regulators refine capital
requirements and introduce new reserving standards for the life insurance industry. Laws and regulations recently adopted or
currently under review can potentially impact the statutory reserve and capital requirements of the industry. Regulators have
also undertaken market and sales practices reviews of several markets or products, including equity-indexed annuities,
variable annuities and group products and New York maintains a moratorium on new reserve financing transactions. See
“Business — Regulation,” “Risk Factors — Economic Environment and Capital Markets Risks — Our Statutory Life
Insurance Reserve Financings Costs May Increase, and We May Find Limited Market Capacity for New Financings,” “Risk
Factors — Regulatory and Legal Risks — Changes in Laws or Regulation, or in Supervisory and Enforcement Policies, May
Reduce Our Profitability, Limit Our Growth, or Otherwise Adversely Affect Us” and “— Liquidity and Capital Resources —
The Company — Capital — Affiliated Captive Reinsurance Transactions.”
61
Table of Contents
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 on 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) liabilities for future policy benefits and the accounting for reinsurance;
(ii) capitalization and amortization of deferred policy acquisition costs (“DAC”) and the establishment and amortization
of VOBA;
(iii) estimated fair values of investments in the absence of quoted market values;
(iv) investment allowance for credit loss (“ACL”) and impairments;
(v) estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives
requiring bifurcation;
(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.
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 the aforementioned
critical accounting estimates. In applying these policies and estimates, management makes subjective and complex judgments
that frequently require assumptions 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 at the time of claim incurral, 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.
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 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.
62
Table of Contents
Traditional long-duration and limited-payment contracts comprise approximately 70% of MetLife’s liabilities for future
policyholder benefits. For such contracts, original assumptions developed at the time of issue are locked-in and used in all
future liability calculations provided the resulting liabilities are adequate to provide for future benefits and expenses (i.e.,
there is no premium deficiency). Therefore, liabilities for these products would not be impacted by changes in assumptions
unless such change would result in an adverse impact that would trigger an establishment of a premium deficiency reserve.
Favorable experience for traditional long-duration and limited-payment contracts would have no impact on liabilities given
that the current assumption is required to remain locked-in, however the positive experience would be reflected in net income
over the life of the policies in force.
We have assessed the sensitivities of reported amounts related to our traditional long-duration and limited-payment
contracts to demonstrate the impact of the Declining Interest Rate Scenario and the Rising Interest Rate Scenario. These
sensitivities show the resulting change in net derivative gains (losses) and adjusted earnings versus the Base Scenario. These
results are included in “— Industry Trends — Impact of Market Interest Rates — Interest Rate Scenarios.”
Our traditional life and other participating blocks comprise approximately 25% of our future policyholder benefit
liabilities. For these contracts, MetLife’s risk of adverse experience may be mitigated through adjustments to the dividend
scales.
For all insurance assets and liabilities, MetLife holds capital and surplus to mitigate potential adverse experience
development. The Company’s approaches for managing liquidity and capital are described in “— Liquidity and Capital
Resources.”
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 Allowance for Credit Loss and
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 capitalized 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 or processing the issuance of new and renewal
insurance business only with respect to actual policies acquired or renewed. We utilize various 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 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 obligations is based on projections, by each block of business, of future policy and
contract charges, premiums, mortality and morbidity, separate account performance, surrenders, 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.
63
Table of Contents
Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force
account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC
and VOBA. Our practice to determine the 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 with an offset to our unearned
revenue liability which nets to approximately $30 million. 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 U.S. business variable universal life contracts and variable
deferred annuity contracts is 5.75%.
We periodically review 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, 2022 and 2021, DAC and VOBA for the Company was $23.0 billion and $16.1 billion, respectively.
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, 2022 and 2021.
Increases (decreases) in DAC and VOBA balances, as presented below, resulted in a corresponding decrease (increase) in
amortization.
General account investment return
Separate account investment return
Net investment/Net derivative gains (losses) and GMIB
In-force/Persistency
Policyholder dividends, expense and other
Total
Years Ended December 31,
2022
2021
(In millions)
$
281 $
(197)
(64)
115
(183)
146
32
(93)
77
(22)
$
295 $
(203)
Items contributing to the changes to DAC and VOBA amortization in 2022 consisted of the following:
•
•
Net decrease in amortization of $281 million associated with the general account long-term investment rates of
return, primarily driven by the following:
•
•
A decrease in amortization of approximately $60 million associated with realized losses in Japan largely caused
by the increasing interest rate environment in 2022.
Net decrease in amortization of approximately $220 million mainly driven by the Japan actuarial assumption
review relating to the general account long-term investment rates of return.
Net decrease in amortization of $115 million associated with net investment/net derivative gains (losses) and
GMIBs, primarily driven by the following:
64
Table of Contents
•
•
A decrease in amortization of approximately $10 million associated with gains from GMIB hedges and the
decreases in GMIB obligations.
Net decrease in amortization of approximately $105 million resulting from other investment activities.
•
•
Net increase in amortization of $183 million associated with in-force/persistency primarily due to higher lapses in
Japan.
Net decrease in amortization of $146 million associated with policyholder dividends, expense and other, was
primarily driven by following:
•
•
A decrease of approximately $50 million of DAC amortization resulting from the actuarial assumption review
relating to the closed block.
Decrease in amortization of approximately $90 million mostly due to unfavorable closed block mortality.
Items contributing to the changes to DAC and VOBA amortization in 2021 consisted of the following:
•
•
Net increase in amortization of $197 million mostly due to the actuarial assumption review relating to the general
account long-term investment rates of return.
Net increase in amortization of $93 million associated with net investment/net derivative gains (losses) and GMIB,
primarily driven by the following:
•
•
A decrease in amortization of approximately $10 million associated with gains from GMIB hedges and the
decreases in GMIB obligations.
Net increase in amortization of approximately $100 million from other investment activities.
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 decrease in unrealized investment gains
(losses) increased the DAC and VOBA balance by $7.2 billion and $822 million in 2022 and 2021, respectively. See Notes 5
and 16 of the Notes to the Consolidated Financial Statements for information regarding the DAC and VOBA offset to
unrealized investment gains (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 unadjusted quoted prices are not available,
estimated 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 significant management judgment, including
assumptions or estimates, are used to determine the estimated fair value of investments. Unobservable inputs are based on
management’s assumptions about the inputs market participants would use in pricing such investments. The methodologies,
assumptions and inputs utilized are described in Note 10 of the Notes to the Consolidated Financial Statements.
For the vast majority of our investments, sensitivity analysis regarding unobservable inputs is not necessary or
appropriate, as they are valued using quoted prices, as described above. Quantitative information about the significant
unobservable inputs used in fair value measurement and the sensitivity of the estimated fair value to changes in those inputs
for the more significant asset and liability classes measured at estimated fair value on a recurring basis is presented 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 Allowance for Credit Loss and Impairments
The significant estimates and inherent uncertainties related to our evaluation of credit loss and impairments on our
investment portfolio are summarized below. See “Quantitative and Qualitative Disclosures About Market Risk” for
information regarding the sensitivity of our fixed maturity securities and mortgage loan portfolios to changes in interest rates
and foreign currency exchange rates.
65
Table of Contents
Fixed Maturity Securities
The assessment of whether a credit loss has occurred is based on our case-by-case evaluation of whether the net
amount expected to be collected is less than the amortized cost basis. 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. We evaluate credit loss by considering information that changes
from time to time about past events, current and forecasted economic conditions, and we measure credit loss by estimating
recovery value using a discounted cash flow analysis. We estimate recovery value based on our best estimate of future cash
flows, which is inherently subjective, and methodologies can vary depending on the facts and circumstances specific to
each security. We record an ACL for the amount of the credit loss instead of recording a reduction of the amortized cost as
an impairment. The evaluation processes, measurement methodologies, significant inputs and significant judgments and
assumptions used to determine the amount of credit loss are described in Notes 1 and 8 of the Notes to the Consolidated
Financial Statements. The determination of the amount of ACL is subjective as it includes our estimates and assumptions
and assessment of known and inherent risks. We revise these evaluations as conditions change and new information
becomes available. The valuation of our fixed maturity securities portfolio is sensitive to changes in interest rates and the
estimated fair value of the portion of our fixed maturities securities portfolio that is foreign denominated, is sensitive to
changes in foreign currency exchange rates.
Mortgage Loans
The ACL is established both for pools of loans with similar risk characteristics and for loans with dissimilar risk
characteristics, collateral dependent loans and reasonably expected troubled debt restructurings, individually on a loan
specific basis. We record an allowance for expected lifetime credit loss in an amount that represents the portion of the
amortized cost basis of mortgage loans that we do not expect to collect, resulting in mortgage loans being presented at the
net amount expected to be collected. To determine the mortgage loan ACL, we apply significant judgement to estimate
expected lifetime credit loss over the contractual term of our mortgage loans adjusted for expected prepayments and any
extensions; and we consider past events and current and forecasted economic conditions which are subject to inherent
uncertainty and which necessarily change from time to time. The ACL methodologies, significant inputs and significant
judgements and assumptions used to determine the amount of credit loss are described in Notes 1 and 8 of the Notes to the
Consolidated Financial Statements. The determination of the amount of ACL is subjective as it includes our estimates and
assumptions and assessment of known and inherent risks. We revise these estimates as conditions change and new
information becomes available. The estimated fair value of our mortgage loan portfolio is sensitive to changes in interest
rates and the estimated fair value of the portion of our mortgage loan portfolio that is foreign denominated, is sensitive to
changes in foreign currency exchange rates.
Real Estate, Leases and Other Asset Classes
The determination of the amount of ACL on leases and impairments on real estate and the remaining asset classes is
highly subjective and is based upon our quarterly evaluation and assessment of known and inherent risks associated with
the respective asset class. The evaluation processes, measurement methodologies, significant inputs and significant
judgments and assumptions used to determine the amount of ACL and impairments are described in Notes 1 and 8 of the
Notes to the Consolidated Financial Statements. Such evaluations and assessments are revised as conditions change and
new information becomes available.
Derivatives
The determination of the 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 OTC derivative pricing models and credit risk adjustment.
66
Table of Contents
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. 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, as we do not consider those to be reasonably likely events in the near future.
The impact of the range of reasonably likely variances in credit spreads increased as compared to prior periods.
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 statements under the credit spread variance scenarios
presented below.
100% increase in our credit spread
As reported
50% decrease in our credit spread
Changes in Balance Sheet Carrying Value
At December 31, 2022
Policyholder
Account Balances
DAC and VOBA
$
$
$
(In millions)
429 $
561 $
596 $
(8)
43
54
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 on 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. See also “Quantitative and Qualitative Disclosures About Market Risk” for information regarding the
sensitivity of our derivatives to changes in interest rates, foreign currency exchange rates, and equity market prices.
67
Table of Contents
Goodwill
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, an
impairment charge would be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value;
however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, the
Company will consider income tax effects from any tax-deductible goodwill on the carrying value of the reporting unit when
measuring the goodwill impairment loss, if applicable. The key inputs, judgments and assumptions necessary in determining
estimated fair value of the reporting units include projected adjusted 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 renewed business, as well as margins on such business, interest rate levels, credit
spreads, equity market levels, and the discount rate that we believe is appropriate for the respective reporting unit.
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 may differ from actual future results. The estimated fair value
of the reporting units tested can be impacted by unexpected changes in the legislative, regulatory and macroeconomic
environment. 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.
In the third quarter of 2022, the Company performed its annual goodwill impairment tests on all of its reporting units,
using both qualitative and quantitative assessments. The quantitative assessment utilized the market multiple, embedded
value and discounted cash flow valuation approaches based on best available data as of June 30, 2022. The Company
concluded that the estimated fair values of all its reporting units were substantially in excess of their carrying values and,
therefore, goodwill was not impaired.
See Note 12 of the Notes to the Consolidated Financial Statements for additional information on our goodwill.
Employee Benefit Plans
Certain subsidiaries of MetLife, Inc. sponsor defined benefit pension plans and other postretirement benefit plans
covering eligible employees. See Note 18 of the Notes to the Consolidated Financial Statements for information on
amendments to our U.S. benefit plans. 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
retirement, 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, 2021, 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 in 2022 would have been as follows:
Increase in expected rate of return by 100 bps
Decrease in expected rate of return by 100 bps
$
$
Year Ended December 31, 2022
Increase/(Decrease) in Net
Periodic Pension Cost
Increase/(Decrease) in Net
Other Postretirement
Benefit Cost
(In millions)
(106) $
106 $
(14)
14
68
Table of Contents
This table 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 Company’s 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, 2021, 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 as follows:
Increase in discount rate by 100 bps
Decrease in discount rate by 100 bps
Year Ended December 31, 2022
Increase/(Decrease) in Net
Periodic Pension Cost
Increase/(Decrease) in Net
Other Postretirement
Benefit Cost
$
$
(In millions)
(56) $
75 $
(1)
4
Given our pension and postretirement obligations as of December 31, 2022, the end 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 benefit obligations would have been as follows:
Increase in discount rate by 100 bps
Decrease in discount rate by 100 bps
Year Ended December 31, 2022
Increase/(Decrease) in Pension
Benefit Obligation
Increase/(Decrease) in Other
Postretirement
Benefit Obligation
$
$
(In millions)
(818) $
964 $
(74)
88
These tables consider only changes in our assumed discount rates without consideration of possible 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 impact 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 and Valuation of Deferred Tax Assets
Our accounting for income taxes represents our best estimate of various events and transactions. Tax laws are often
complex and may be 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
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 in which we conduct business.
The Company considers all available factors, both positive and negative, to determine whether, based on the weight of
these factors, a partial or full valuation allowance for categories of deferred tax assets is required. The weight given to these
factors is commensurate with the extent to which it can be objectively verified. Examples of factors considered in
determining deferred tax asset realizability include past earnings history, projections of taxable income and tax planning
strategies. Changes in tax laws and/or statutory tax rates in countries in which we operate could have an impact on our
valuation of net deferred tax assets. If there were a 1% increase in the global effective income tax rate, the change would have
resulted in an approximate $112 million increase in the net deferred income tax asset balance at December 31, 2022.
See Notes 1 and 19 of the Notes to the Consolidated Financial Statements for additional information on our income
taxes.
69
Table of Contents
Litigation Contingencies
We are a defendant in a large number of litigation matters and are involved in a number of regulatory investigations.
Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation,
it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s
consolidated net income or cash flows in particular quarterly or annual periods. 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 reliable data and uncertainty
regarding numerous variables that can affect liability estimates. 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.
Acquisitions and Dispositions
Acquisitions
Pending Acquisition of Raven Capital Management
In February 2023, the Company entered into a definitive agreement to acquire Raven Capital Management, a privately-
owned alternative investment company. This transaction is subject to customary closing conditions.
Acquisition of Affirmative Investment Management
In December 2022, the Company completed the acquisition of Affirmative Investment Management, a specialist global
environmental, social and corporate governance impact fixed income investment manager.
Ownership Increase of PNB MetLife
In February 2022, the Company acquired approximately 15.0% ownership in PNB MetLife India Insurance Company
Limited (“PNB MetLife”). As a result, the Company’s ownership in PNB MetLife, an operating joint venture accounted for
under the equity method, increased to approximately 47.0%. This transaction supports the Company’s continued growth in
India and will enable us to deliver more value for our customers, partners and shareholders.
Dispositions
Disposition of MetLife Poland and Greece
For information regarding the Company's dispositions of its wholly-owned subsidiaries in Poland and Greece in April
2022 and January 2022, respectively, which were reported as held-for-sale, see Notes 1 and 3 of the Notes to the
Consolidated Financial Statements.
Disposition of MetLife Seguros
For information regarding the Company's September 2021 disposition of its wholly-owned Argentinian subsidiary,
MetLife Seguros S.A. (“MetLife Seguros”), see Note 3 of the Notes to the Consolidated Financial Statements.
Disposition of MetLife P&C
For information regarding the Company's April 2021 disposition of MetLife P&C, which was reported as held-for-
sale, see Notes 1 and 3 of the Notes to the Consolidated Financial Statements.
Disposition of MetLife Russia
For information regarding the Company's January 2021 disposition of its wholly-owned Russian subsidiary, the Joint-
stock Company MetLife Insurance Company (“MetLife Russia”), see Note 3 of the Notes to the Consolidated Financial
Statements.
70
Table of Contents
Results of Operations
Consolidated Results
Revenues
Premiums
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
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Interest expense on debt
Other expenses
Total expenses
Income (loss) before provision for income tax
Provision for income tax expense (benefit)
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
Years Ended December 31,
2022
2021
(In millions)
$
49,397 $
5,585
15,916
2,634
(1,262)
(2,372)
69,898
51,313
3,692
(2,558)
1,931
(41)
938
11,764
67,039
2,859
301
2,558
19
2,539
185
—
42,009
5,756
21,395
2,619
1,529
(2,228)
71,080
44,830
5,538
(2,718)
2,555
(34)
920
11,863
62,954
8,126
1,551
6,575
21
6,554
195
6
Net income (loss) available to MetLife, Inc.’s common shareholders
$
2,354 $
6,353
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
During 2022, net income (loss) decreased $4.0 billion from 2021, primarily driven by unfavorable changes in adjusted
earnings and net investment gains (losses).
Management of Investment Portfolio and Hedging Market Risks with Derivatives. See “— Investments — Overview”
for a discussion of the management of our investment portfolio.
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 provision for credit loss and impairments on our investment portfolio, as well as realized
gains and losses on investments sold.
71
Table of Contents
We also use derivatives as an integral part of our management of the investment portfolio and insurance liabilities to
hedge certain risks, including changes in interest rates, foreign currency exchange rates, credit spreads and equity market
levels. We use freestanding interest rate, equity, credit and currency derivatives to hedge certain invested assets and
insurance liabilities. A portion 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. We actively evaluate market risk hedging needs and strategies to
ensure our free cash flow and capital objectives are met under a range of market conditions.
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.
We continuously review and refine our hedging strategy in light of changing economic and market conditions,
evolving NAIC and NYDFS statutory requirements, and accounting rule changes. As a part of our current hedging strategy,
we maintain portfolio level derivatives in our macro hedge program. These macro hedge program derivatives, which are
included in the non-VA program derivatives section of the table below, mitigate the potential deterioration in our capital
positions from significant adverse economic conditions.
Net Derivative Gains (Losses). The variable annuity embedded derivatives and associated freestanding derivative
hedges are collectively referred to as “VA program derivatives.” All other derivatives that are economic hedges of certain
invested assets and insurance liabilities are referred to as “non-VA program derivatives.” The table below presents the
impact on net derivative gains (losses) from non-VA program derivatives and VA program derivatives:
Non-VA program derivatives
Interest rate
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 adjustment on embedded derivatives
Other risks in embedded derivatives
Total embedded derivatives
Freestanding derivatives hedging embedded derivatives
Total VA program derivatives
Net derivative gains (losses)
Years Ended December 31,
2022
2021
(In millions)
$
(2,618) $
(1,075)
408
55
113
127
(429)
85
(771)
37
(1,915)
(2,153)
512
18
(485)
45
(502)
(457)
1,006
(17)
(279)
710
(785)
(75)
$
(2,372) $
(2,228)
72
Table of Contents
The favorable change in net derivative gains (losses) on non-VA program derivatives was $238 million ($188 million,
net of income tax). This was primarily due to key equity indexes decreasing in 2022 versus increasing in 2021, favorably
impacting equity options and total rate of return swaps acquired primarily as part of our macro hedge program. In addition,
the U.S. dollar strengthened less significantly against the Chilean peso in 2022 compared to 2021. This favorably impacted
the estimated fair value of pay U.S. dollar foreign currency swaps. These favorable changes were largely offset by long-
term rates increasing more significantly in 2022 compared to 2021. This unfavorably impacted the estimated fair value of
receive fixed interest rate swaps. 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 items being hedged.
The unfavorable change in net derivative gains (losses) on VA program derivatives was $382 million ($302 million,
net of income tax). This was due to (i) an unfavorable change of $211 million ($167 million, net of income tax), in market
risks in embedded derivatives, net of freestanding derivatives hedging market risks in embedded derivatives, and (ii) an
unfavorable change of $206 million ($163 million, net of income tax) in other risks in embedded derivatives; partially
offset by a favorable change of $35 million ($28 million, net of income tax) in the nonperformance risk adjustment on
embedded derivatives.
The aforementioned $211 million ($167 million, net of income tax) unfavorable change reflects a $494 million
($390 million, net of income tax) unfavorable change in market risks in embedded derivatives, partially offset by a
$283 million ($223 million, net of income tax) favorable change in freestanding derivatives hedging market risks in
embedded derivatives.
The primary changes in market factors affecting the valuation of VA program derivatives are summarized as follows:
•
•
Long-term interest rates increased more significantly in 2022 compared to 2021, contributing to an unfavorable
change in our freestanding derivatives and a favorable change in our embedded derivatives. For example, the 30-
year U.S. swap rate increased 176 basis points in 2022 and increased 33 basis points in 2021.
Key equity index levels decreased in 2022 versus increased in 2021, contributing to an unfavorable change in our
embedded derivatives and a favorable change in our freestanding derivatives. For example, the S&P 500 Index
decreased 19% in 2022 and increased 27% in 2021.
The aforementioned $206 million ($163 million, net of income tax) unfavorable change in other risks in embedded
derivatives reflects actuarial assumption updates and a combination of factors, such as fees deducted from accounts,
changes in the benefit base, premiums, lapses, withdrawals and deaths, in addition to changes to cross-effect, basis
mismatch, risk margin and fund allocation.
The aforementioned $35 million ($28 million, net of income tax) favorable change in the nonperformance risk
adjustment on embedded derivatives resulted from a favorable change of $55 million ($44 million, net of income tax)
related to model changes and changes in capital market inputs, such as long-term interest rates and key equity index levels,
on variable annuity guarantees, partially offset by an unfavorable change of $20 million ($16 million, net of 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 results in 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 results in 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 the
driver moves in the opposite direction.
73
Table of Contents
Net Investment Gains (Losses). The unfavorable change in net investment gains (losses) of $2.8 billion ($2.2 billion,
net of income tax) primarily reflects (i) losses in 2022 on sales of fixed maturity securities, (ii) the 2021 gain on the
disposition of MetLife P&C, (iii) lower gains in 2022 on sales of real estate investments, and (iv) mark-to-market losses in
2022 compared to market-to-market gains in 2021 on equity securities, which are measured at fair value through net
income (loss). These unfavorable changes were partially offset by 2021 losses on the sales of certain subsidiaries, as well
as net foreign currency transaction gains in 2022.
Divested Businesses. Income (loss) before provision for income tax related to divested businesses, excluding net
investment gains (losses) and net derivative gains (losses), decreased $93 million ($74 million, net of income tax) to a loss
of $31 million ($21 million, net of income tax) in 2022 from income of $62 million ($53 million, net of income tax) in
2021. Included in this decrease was a decline in total revenues of $1.0 billion, before income tax, and a decrease in total
expenses of $939 million, before income tax. Divested businesses primarily included activity related to the disposition of
MetLife P&C in 2021.
Taxes. Our 2022 effective tax rate on income (loss) before provision for income tax was 11%. Our effective tax rate
differed from the U.S. statutory rate of 21% primarily due to tax benefits from tax credits, foreign earnings taxed at
different rates than the U.S. statutory rate, an IRS audit settlement, the corporate tax deduction for stock compensation and
non-taxable investment income. Our 2021 effective tax rate on income (loss) before provision for income tax was 19%.
Our effective tax rate differed from the U.S. statutory rate of 21% primarily due to tax benefits from tax credits, non-
taxable investment income, an IRS audit settlement, the non-cash transfer of assets from a wholly-owned U.K. investment
subsidiary to its U.S. parent and the corporate tax deduction for stock compensation, partially offset by tax charges from
foreign earnings taxed at different rates than the U.S. statutory rate and the dispositions of MetLife P&C, MetLife Seguros
and MetLife Poland and Greece.
Actuarial Assumption Review and Certain Other Insurance Adjustments. Results for 2022 include a $75 million
($53 million, net of income tax) gain associated with our annual review of actuarial assumptions related to reserves and
DAC, of which a $344 million ($273 million, net of income tax) loss was recognized in net derivative gains (losses).
Of the $75 million gain, a $315 million ($242 million, net of income tax) gain was related to DAC, and a loss of
$240 million ($189 million, net of income tax) was associated with reserves. The portion of the $75 million gain that is
included in adjusted earnings is $48 million ($33 million, net of income tax).
The $344 million ($273 million, net of income tax) loss recognized in net derivative gains (losses) associated with our
annual review of actuarial assumptions is included within the other risks in embedded derivatives line in the table above.
As a result of our annual review of actuarial assumptions, changes were made to economic, biometric, policyholder
behavior, and operational assumptions. The most significant impacts were in the MetLife Holdings and Asia segments. In
the MetLife Holdings segment, significant impacts included economic assumption updates related to the projection of
closed block results and updates to behavioral assumptions for variable annuities. In the Asia segment, the most significant
impact was driven by economic assumption updates for interest sensitive whole life and fixed annuities. The breakdown of
total current period results is summarized as follows:
•
•
•
•
Economic assumption updates resulted in favorable impacts to reserves and DAC, for a net gain of $308 million
($234 million, net of income tax).
Changes in biometric assumptions resulted in unfavorable impacts to reserves and favorable impacts to DAC, for a
net charge of $5 million ($4 million, net of income tax).
Changes in policyholder behavior assumptions resulted in unfavorable impacts to reserves and favorable impacts to
DAC, for a net charge of $245 million ($192 million, net of income tax).
Changes in operational assumptions resulted in favorable impacts to reserves and unfavorable impacts to DAC, for a
net gain of $17 million ($15 million, net of income tax).
Results for 2021 include a $281 million ($216 million, net of income tax) charge associated with our annual review of
actuarial assumptions related to reserves and DAC, of which a $2 million ($1 million, net of income tax) loss was
recognized in net derivative gains (losses). Of the $281 million charge, $129 million ($96 million, net of income tax) was
related to DAC and $152 million ($120 million, net of income tax) was associated with reserves. The portion of the
$281 million charge that is included in adjusted earnings is $187 million ($140 million, net of income tax).
Certain other insurance adjustments recorded in 2022 include a $115 million ($91 million, net of income tax) favorable
reinsurance recapture in our U.S. segment and a $114 million ($90 million, net of income tax) charge related to model
refinements in our MetLife Holdings segment. These adjustments are included in adjusted earnings.
74
Table of Contents
Adjusted Earnings. As more fully described in “— Non-GAAP and Other Financial Disclosures,” we use adjusted
earnings, which does not equate to net income (loss), as determined in accordance with GAAP, to analyze our performance,
evaluate segment performance, and allocate resources. We believe that the presentation of adjusted earnings and other
financial measures based on adjusted earnings, 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. Adjusted
earnings and other financial measures based on adjusted earnings allow analysis of our performance relative to our business
plan and facilitate comparisons to industry results. Adjusted earnings should not be viewed as a substitute for net income
(loss). Adjusted earnings available to common shareholders and adjusted earnings available to common shareholders on a
constant currency basis should not be viewed as substitutes for net income (loss) available to MetLife, Inc.’s common
shareholders. Adjusted earnings available to common shareholders decreased $2.4 billion, net of income tax, to
$5.5 billion, net of income tax, for 2022 from $8.0 billion, net of income tax, for 2021.
75
Table of Contents
Reconciliation of net income (loss) to adjusted earnings available to common shareholders and premiums, fees and
other revenues to adjusted premiums, fees and other revenues
Year Ended December 31, 2022
U.S.
Asia
Latin
America
EMEA
MetLife
Holdings
Corporate
& Other
Total
Net income (loss) available to MetLife, Inc.'s common shareholders $ 2,698 $
Add: Preferred stock dividends
—
Add: Net income (loss) attributable to noncontrolling interests
Add: Preferred stock redemption premium
Net income (loss)
Less: adjustments from net income (loss) to adjusted earnings
available to common shareholders:
Revenues:
Net investment gains (losses)
Net derivative gains (losses)
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Expenses:
Policyholder benefits and claims and policyholder dividends
Interest credited to policyholder account balances
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Interest expense on debt
Other expenses
Goodwill impairment
Provision for income tax (expense) benefit
Adjusted earnings
Less: Preferred stock dividends
Adjusted earnings available to common shareholders
(In millions)
(750) $
613 $
115 $
276 $
(598) $ 2,354
—
—
—
2,698
(750)
(451)
(1,124)
429
(2,060)
—
—
—
(41)
—
8
—
621
52
434
—
—
—
5
—
120
(99)
(22)
41
19
—
—
—
276
185
6
—
185
19
—
(407)
2,558
4
356
(1,262)
(1,213)
—
75
60
—
—
5
(2,372)
41
53
(2,273)
(360)
(338)
(275)
(1,024)
(281)
—
—
8
—
155
163
162
246
—
63
—
—
—
—
964
(453)
(100)
438
43
—
—
—
—
9
—
50
1,030
11
(7)
—
—
(31)
—
48
—
—
50
—
—
—
—
195
—
—
—
—
—
—
53
1,319
11
106
—
—
(241)
(263)
—
(83)
(659)
185
—
1,252
5,730
185
$
(844) $ 5,545
$ 2,996 $ 1,378 $
761 $
246 $ 1,008
—
—
—
6
—
—
—
—
—
—
—
78
Premiums, fees and other revenues
Less: adjustments to premiums, fees and other revenues
Adjusted premiums, fees and other revenues
$ 38,462 $ 7,457 $ 4,440 $ 2,367 $ 4,353 $
537 $ 57,616
—
(41)
—
68
75
155
257
$ 38,462 $ 7,498 $ 4,440 $ 2,299 $ 4,278 $
382 $ 57,359
76
Table of Contents
Year Ended December 31, 2021
U.S.
Asia
Latin
America
EMEA
MetLife
Holdings
Corporate
& Other
Total
Net income (loss) available to MetLife, Inc.'s common shareholders $ 3,509 $ 1,597 $
Add: Preferred stock dividends
—
—
(In millions)
(258) $
58 $
905 $
542 $ 6,353
Add: Net income (loss) attributable to noncontrolling interests
Add: Preferred stock redemption premium
Net income (loss)
Less: adjustments from net income (loss) to adjusted earnings
available to common shareholders:
Revenues:
Net investment gains (losses)
Net derivative gains (losses)
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Expenses:
Policyholder benefits and claims and policyholder dividends
Interest credited to policyholder account balances
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Interest expense on debt
Other expenses
Goodwill impairment
Provision for income tax (expense) benefit
Adjusted earnings
Less: Preferred stock dividends
Adjusted earnings available to common shareholders
—
6
—
—
—
2
—
3,509
1,599
(252)
410
226
865
—
(310)
11
(610)
2
89
(98)
—
—
(222)
—
(75)
(6)
(818)
—
73
58
—
(81)
(211)
—
(35)
—
—
3
—
(134)
(416)
—
—
(64)
1
(8)
(42)
—
—
—
—
3
—
318
117
—
3
—
61
(190)
(20)
117
42
717
11
(141)
(695)
30
(26)
—
—
(81)
—
(4)
—
—
—
905
195
10
6
753
195
21
6
6,575
86
1,363
1,529
(1,167)
(33)
(2,228)
—
80
(293)
—
(338)
—
—
(60)
—
—
—
—
355
—
—
7
220
982
195
115
243
(1)
(1,179)
—
—
—
—
(1)
(267)
—
(331)
(204)
195
(946)
119
(219)
—
(1)
(564)
—
380
8,149
195
$
(399) $ 7,954
$ 3,221 $ 2,298 $
291 $
301 $ 2,242
Adjusted earnings available to common shareholders on a constant
currency basis (1)
$ 3,221 $ 2,218 $
253 $
245 $ 2,242 $
(399) $ 7,780
Premiums, fees and other revenues
$ 29,912 $ 8,381 $ 3,760 $ 2,883 $ 4,771 $
677 $ 50,384
Less: adjustments to premiums, fees and other revenues
876
73
1
170
80
220
1,420
Adjusted premiums, fees and other revenues
$ 29,036 $ 8,308 $ 3,759 $ 2,713 $ 4,691 $
457 $ 48,964
Adjusted premiums, fees and other revenues on a constant currency
basis (1)
__________________
$ 29,036 $ 7,263 $ 3,643 $ 2,429 $ 4,691 $
457 $ 47,519
(1) Amounts for U.S., MetLife Holdings and Corporate & Other are shown on a reported basis, as constant currency
impact is not significant.
Consolidated Results — Adjusted Earnings
Business Overview. Adjusted premiums, fees and other revenues for 2022 increased $8.4 billion, or 17%, compared to
2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $9.8 billion, or 21%,
compared to 2021 primarily due to higher premiums in our RIS business and growth in our Group Benefits business, both
in our U.S. segment. Strong sales and solid persistency in our Latin America segment also contributed to the improvement
in adjusted premiums, fees and other revenues. In our Asia segment, increases in adjusted premiums, fees and other
revenues in Japan, Australia and Korea were partially offset by the impact of our actuarial assumption review in both years.
A decrease in adjusted premiums, fees and other revenues in our EMEA segment was primarily due to the dispositions of
MetLife Poland and Greece. In our MetLife Holdings segment, for 2023, we anticipate an average decline in adjusted
premiums, fees and other revenues of approximately 12% to 14% from expected business run-off. For 2024 and beyond,
we expect this decline to be approximately 6% to 8% per year.
77
Table of Contents
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Unless otherwise stated, all amounts discussed below are net of income tax.
Overview. The primary drivers of the decrease in adjusted earnings were (i) lower investment yields due to the
unfavorable impact of lower equity market returns on our private equity funds and hedge funds, (ii) higher interest credited
expense and (iii) higher expenses, partially offset by (i) higher net investment income due to a larger average invested asset
base, and (ii) favorable underwriting, primarily driven by an overall decline in COVID-19 related claims. Our results for
2022 also included the favorable impacts from a reinsurance recapture in our U.S. segment, a reinsurance settlement in our
MetLife Holdings segment and our actuarial assumption review, as well as the unfavorable impact from model refinements
in our MetLife Holdings segment. Our results for 2021 included the favorable impacts of tax adjustments related to an IRS
audit settlement and the non-cash transfer of assets from a wholly-owned U.K. investment subsidiary to its U.S. parent, as
well as the release of a legal reserve, all in Corporate & Other, and the unfavorable impact of our actuarial assumption
review.
Foreign Currency. Changes in foreign currency exchange rates had a $174 million negative impact on adjusted
earnings for 2022 compared to 2021. Unless otherwise stated, all amounts discussed below are net of foreign currency
fluctuations. Foreign currency fluctuations can result in significant variances in the financial statement line items.
Business Growth. We benefited from positive net flows from most of our businesses, which increased our average
invested asset base and resulted in higher net investment income. However, consistent with the growth in average invested
assets, interest credited expenses on certain insurance-related liabilities increased. Higher premiums, fees and other
revenues, net of corresponding changes in policyholder benefits, improved adjusted earnings, primarily from growth in our
Asia, Latin America and EMEA segments, partially offset by a decline in our MetLife Holdings segment. Higher
commissions were offset by higher DAC capitalization. The combined impact of the items affecting our business growth,
partially offset by higher DAC amortization, resulted in a $254 million increase in adjusted earnings.
Market Factors. Market factors, including interest rate levels, variability in equity market returns, and foreign currency
fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to hedge these
risks. Excluding the impact of changes in foreign currency exchange rates on net investment income in our non-U.S.
segments and changes in inflation rates on our inflation-indexed investments, investment yields decreased. The decrease in
investment yields was primarily driven by the unfavorable impact of lower equity market returns on our private equity
funds and hedge funds, as well as lower prepayment fees. These decreases were partially offset by higher yields on our
fixed income securities and mortgage loans, as well as higher income on derivatives. The changes in market factors
discussed above resulted in a $3.4 billion decrease in adjusted earnings.
Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Favorable underwriting resulted in a
$1.1 billion increase in adjusted earnings and reflected overall lower impacts from the COVID-19 pandemic. This was
primarily driven by favorable mortality in our U.S. and Latin America segments, partially offset by unfavorable claims
experience in our Asia segment. The favorable change from our actuarial assumption reviews resulted in a net increase of
$173 million in adjusted earnings. Refinements to certain insurance and other liabilities in both years resulted in a
$132 million increase in adjusted earnings, which includes the favorable impacts from a reinsurance recapture in our U.S.
segment and a reinsurance settlement in our MetLife Holdings segment, mostly offset by model refinements in our MetLife
Holdings segment, all in 2022.
Expenses. Adjusted earnings decreased $253 million primarily due to an increase in corporate-related expenses, as well
as the release of a legal reserve in 2021.
Taxes. Our 2022 effective tax rate on adjusted earnings was 21%, which is equal to the U.S. statutory rate and reflects
tax charges from foreign earnings taxed at different rates than the U.S. statutory rate, offset by tax benefits from tax credits,
an IRS audit settlement, the corporate tax deduction for stock compensation and non-taxable investment income. Our 2021
effective tax rate on adjusted earnings was 19%. Our effective tax rate differed from the U.S. statutory rate of 21%
primarily due to tax benefits from tax credits, non-taxable investment income, an IRS audit settlement, the non-cash
transfer of assets from a wholly-owned U.K. investment subsidiary to its U.S. parent and the corporate tax deduction for
stock compensation, partially offset by tax charges from foreign earnings taxed at different rates than the U.S. statutory
rate.
78
Table of Contents
Segment Results and Corporate & Other
U.S.
Business Overview. Adjusted premiums, fees and other revenues for 2022 increased $9.4 billion, or 32%, compared to
2021. This was primarily due to higher premiums in our RIS business, as well as growth in our Group Benefits business.
The increase in premiums in RIS was mainly driven by a large pension risk transfer transaction in 2022. Changes in RIS
premiums are mostly offset by a corresponding change in policyholder benefits. The increase in our Group Benefits
business was primarily due to growth from our voluntary products, group disability and dental businesses.
Adjusted revenues
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Total adjusted revenues
Adjusted 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 adjusted expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjusted premiums, fees and other revenues
Years Ended December 31,
2022
2021
(In millions)
$
35,548 $
26,358
1,158
7,340
1,756
45,802
36,273
1,789
(77)
59
9
3,962
42,015
791
2,996 $
1,140
8,048
1,538
37,084
27,957
1,422
(65)
60
7
3,632
33,013
850
3,221
38,462 $
29,036
$
$
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Unless otherwise stated, all amounts discussed below are net of income tax.
Business Growth. The impact of positive flows from pension risk transfer transactions and funding agreement
issuances resulted in higher average invested assets, improving net investment income. However, this was partially offset
by a corresponding increase in interest credited expenses on long duration insurance and investment-type products.
Higher direct expenses, including certain employee-related costs, coupled with an increase in variable expenses,
exceeded the corresponding increase in premiums, fees and other revenues. The combined impact of the items affecting
our business growth increased adjusted earnings by $133 million.
Market Factors. Market factors, including interest rate levels, variability in equity market returns and foreign
currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to
hedge these risks. Investment yields decreased primarily driven by the unfavorable impact of lower equity market returns
on our private equity funds and hedge funds, partially offset by higher yields on fixed income securities and mortgage
loans, and higher income on derivatives. The impact of interest rate fluctuations resulted in an increase in our average
interest credited rates on long duration insurance and investment-type products, which drove an increase in interest
credited expenses. The changes in market factors discussed above resulted in a $1.3 billion decrease in adjusted earnings.
79
Table of Contents
Underwriting and Other Insurance Adjustments. Favorable mortality in our Group Benefits business resulted in an
increase in adjusted earnings of $830 million. This was driven by decreases in both incidence and severity of COVID-19
and non-COVID-19 claims. Less favorable mortality in our RIS business resulted in a decrease in adjusted earnings of
$64 million, primarily driven by our structured settlement and pension risk transfer businesses. Favorable claims
experience in our Group Benefits business, primarily within our accident & health, vision and dental businesses, partially
offset by unfavorable experience in our individual and group disability businesses resulted in a $74 million increase to
adjusted earnings. Refinements to certain insurance and other liabilities in both years resulted in a $150 million increase
in adjusted earnings, which includes the favorable impact from a reinsurance recapture in the current year.
Asia
Business Overview. Adjusted premiums, fees and other revenues for 2022 decreased $810 million, or 10%, compared
to 2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $235 million, or 3%,
compared to 2021, mainly due to increases in Japan, Australia and Korea, partially offset by the impact of our actuarial
assumption review in both years. In Japan, higher fees from foreign currency-denominated life and fixed annuity products
were partially offset by a decrease in premiums from yen-denominated life products. The increases in Australia and Korea
were primarily due to business growth.
Years Ended December 31,
2022
2021
(In millions)
Adjusted revenues
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Total adjusted revenues
Adjusted expenses
Policyholder benefits and claims and policyholder dividends
Interest credited to policyholder account balances
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Other expenses
Total adjusted expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjusted earnings on a constant currency basis
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis
$
5,568 $
1,840
3,909
90
11,407
4,752
2,003
(1,524)
1,105
(36)
3,153
9,453
576
1,378 $
6,421
1,814
5,052
73
13,360
5,008
1,995
(1,607)
1,369
(27)
3,388
10,126
936
2,298
$
$
$
$
1,378 $
2,218
7,498 $
7,498 $
8,308
7,263
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Unless otherwise stated, all amounts discussed below are net of income tax.
Foreign Currency. Changes in foreign currency exchange rates decreased adjusted earnings by $80 million for 2022
compared to 2021, primarily due to the weakening of the Japanese yen, Korean won and Australian dollar against the
U.S. dollar. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign
currency fluctuations can result in significant variances in the financial statement line items.
80
Table of Contents
Business Growth. Increased premiums, fees and other revenues were partially offset by higher policyholder benefits
and commissions, net of DAC capitalization, which contributed to Asia’s business growth. Positive net flows in Japan
and Korea resulted in higher average invested assets, which improved net investment income. The increase in net
investment income was largely offset by a corresponding increase in interest credited expenses on certain insurance
liabilities. The combined impact of the items affecting our business growth, partially offset by higher DAC amortization,
improved adjusted earnings by $99 million.
Market Factors. Market factors, including interest rate levels and variability in equity market returns, continued to
impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields
decreased, driven by the unfavorable impact of lower equity market returns on our private equity and hedge funds, and
lower income on derivatives. These unfavorable impacts were partially offset by higher yields on fixed income securities
supporting products sold in Japan denominated in U.S. dollars and Japanese yen. In addition, a decrease in interest
credited expenses on certain insurance liabilities improved adjusted earnings. The changes in market factors discussed
above decreased adjusted earnings by $804 million.
Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Unfavorable underwriting, mainly
driven by COVID-19-related claims in Japan, decreased adjusted earnings by $202 million. The favorable change from
our actuarial assumption reviews resulted in a net increase of $102 million in adjusted earnings. Refinements to certain
insurance liabilities and other liabilities in both years resulted in an $18 million increase in adjusted earnings.
Expenses and Taxes. Higher expenses, primarily driven by higher employee-related and other operating expenses, as
well as an increase in corporate overhead costs, decreased adjusted earnings by $60 million. Our 2022 results also
included a benefit of $8 million resulting from a change in the tax rate in Korea.
81
Table of Contents
Latin America
Business Overview. Adjusted premiums, fees and other revenues for 2022 increased $681 million, or 18%, compared
to 2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, increased $797 million, or 22%,
compared to 2021, mainly driven by strong sales and solid persistency across the region.
Years Ended December 31,
2022
2021
(In millions)
Adjusted revenues
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Total adjusted revenues
Adjusted 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 adjusted expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjusted earnings on a constant currency basis
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis
$
3,226 $
1,175
1,593
39
6,033
3,301
335
(499)
339
12
1,553
5,041
231
761 $
2,609
1,109
1,271
41
5,030
3,143
249
(414)
285
5
1,401
4,669
70
291
$
$
$
$
761 $
253
4,440 $
4,440 $
3,759
3,643
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Unless otherwise stated, all amounts discussed below are net of income tax.
Foreign Currency. Changes in foreign currency exchange rates decreased adjusted earnings by $38 million for 2022
compared to 2021, mainly due to the weakening of foreign currencies against the U.S. dollar, primarily the Chilean peso.
Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency
fluctuations can result in significant variances in the financial statement line items.
Business Growth. Latin America experienced premium and fee growth across the region, primarily in Chile and
Mexico. The increase in premiums and fees was partially offset by related changes in policyholder benefits. An increase
in average invested assets, primarily in Chile and Mexico, generated higher net investment income. The increase in net
investment income was partially offset by a corresponding increase in interest credited expenses on certain insurance
liabilities. Business growth in the region drove an increase in commissions and other variable expenses, which was
partially offset by higher DAC capitalization. The combined impact of the items affecting business growth, partially
offset by higher DAC amortization, increased adjusted earnings by $71 million.
82
Table of Contents
Market Factors. Market factors, including interest rate levels and variability in equity market returns, continued to
impact our results; however, certain impacts were mitigated by derivatives used to hedge these risks. Investment yields
increased, driven by higher yields on fixed maturity securities in Chile and Mexico, higher earnings from a joint venture
investment in Chile, the favorable impact of an increase in bond index returns on our Chilean encaje within fair value
option securities (“FVO Securities”), and higher income on derivatives. These increases were partially offset by lower
equity market returns on private equity funds. An increase in interest credited expenses on certain insurance liabilities
also decreased adjusted earnings. The changes in market factors discussed above, as well as the net impact of inflation,
resulted in a $22 million increase in adjusted earnings.
Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Favorable underwriting drove a
$395 million increase in adjusted earnings. This increase includes a decline in COVID-19-related claims, primarily in
Mexico and Brazil, as well as a reduction to the incurred but not reported reserve that was established in the prior year.
The favorable change from our actuarial assumption reviews resulted in a net increase of $9 million in adjusted earnings.
Refinements to certain insurance liabilities and other liabilities in both periods resulted in a $20 million increase in
adjusted earnings.
Expenses and Taxes. Adjusted earnings decreased $46 million due to higher employee-related costs and the region’s
continued investment in technology, partially offset by the impact of continued expense discipline. Tax-related
adjustments in both years resulted in a $37 million increase in adjusted earnings, primarily driven by a recurring tax item
related to inflation in Chile, as well as a 2022 adjustment related to the filing of the Company’s 2021 U.S. income tax
return.
83
Table of Contents
EMEA
Business Overview. Adjusted premiums, fees and other revenues for 2022 decreased $414 million, or 15%, compared
to 2021. Adjusted premiums, fees and other revenues, net of foreign currency fluctuations, decreased $130 million, or
5%, compared to 2021 primarily due to (i) the disposition of MetLife Poland and Greece, (ii) a prior year favorable
refinement to an unearned premium reserve in Italy, and (iii) decreases in our corporate solutions and variable life
businesses in the Gulf, as well as our pension business in Romania, partially offset by growth in our (i) accident & health
business across the region, (ii) corporate solutions business in Egypt, and (iii) credit life business in Turkey and Romania.
Adjusted revenues
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Total adjusted revenues
Adjusted expenses
Policyholder benefits and claims and policyholder dividends
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 adjusted expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjusted earnings on a constant currency basis
Adjusted premiums, fees and other revenues
Adjusted premiums, fees and other revenues on a constant currency basis
Years Ended December 31,
2022
2021
(In millions)
$
1,964 $
2,271
300
160
35
2,459
990
71
(411)
333
(5)
—
1,171
2,149
64
246 $
395
215
47
2,928
1,241
86
(469)
356
(7)
—
1,324
2,531
96
301
246 $
245
2,299 $
2,299 $
2,713
2,429
$
$
$
$
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Unless otherwise stated, all amounts discussed below are net of income tax.
Foreign Currency. Changes in foreign currency exchange rates decreased adjusted earnings by $56 million for 2022
as compared to 2021, primarily driven by the strengthening of the U.S. dollar against the Turkish lira, euro and British
pound. Unless otherwise stated, all amounts discussed below are net of foreign currency fluctuations. Foreign currency
fluctuations can result in significant variances in the financial statement line items.
Business Growth. Growth in our (i) accident & health business across the region, (ii) credit life business in Turkey,
(iii) corporate solutions business in Egypt, (iv) ordinary life business in Europe, and (v) other minor increases across the
region, partially offset by decreases in our variable life and corporate solutions businesses in the Gulf, as well as our
pension business in Romania, resulted in a $6 million increase in adjusted earnings.
Market Factors. Market factors, including interest rate levels and variability in equity market returns, resulted in a
slight decrease in adjusted earnings.
84
Table of Contents
Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Adjusted earnings increased
$53 million as a result of favorable underwriting experience, primarily due to the impact of the COVID-19 pandemic,
which resulted in lower utilization in 2022 and higher claims in 2021. Favorable underwriting experience in our (i)
corporate solutions business in Egypt, the U.K. and the Gulf, (ii) variable life business in Lebanon and Czech Republic,
and (iii) credit life business in Turkey and Romania were partially offset by unfavorable underwriting experience in our
ordinary life business in France. The favorable change from our actuarial assumption reviews resulted in a net increase of
$10 million in adjusted earnings. Refinements to certain insurance-related assets and liabilities in both years resulted in a
$43 million decrease in adjusted earnings.
Expenses and Taxes. Higher expenses resulted in a $24 million decrease in adjusted earnings due to various
operating expenses across the region. Taxes increased adjusted earnings by $12 million primarily due to changes in
business mix among tax jurisdictions and tax-related adjustments in both years.
Other. In addition to the items discussed above, adjusted earnings decreased by $11 million due to the disposition of
MetLife Poland and Greece.
MetLife Holdings
Business Overview. Our MetLife Holdings segment consists of operations relating to products and businesses,
previously included in our former retail business, that we no longer actively market in the U.S. For 2023, we anticipate an
average decline in adjusted premiums, fees and other revenues of approximately 12% to 14% from expected business run-
off. For 2024 and beyond, we expect this decline to be approximately 6% to 8% per year. A significant portion of our
adjusted 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 movements
in the market, surrenders, deposits, withdrawals, benefit payments, transfers and policy charges. Although we have
discontinued selling our long-term care product, we continue to collect premiums and administer the existing block of
business, which contributed to asset growth in the segment, and we expect the related reserves to grow as this block
matures. Our future policyholder benefit liability for our long-term care business was $14.3 billion and $14.4 billion as of
December 31, 2022 and 2021, respectively.
Years Ended December 31,
2022
2021
(In millions)
$
3,066 $
1,057
4,971
155
9,249
3,333
1,101
6,450
257
11,141
6,056
6,268
813
(28)
192
8
953
7,994
247
1,008 $
840
(33)
257
5
992
8,329
570
2,242
4,278 $
4,691
$
$
Adjusted revenues
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Total adjusted revenues
Adjusted 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 adjusted expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjusted premiums, fees and other revenues
85
Table of Contents
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Unless otherwise stated, all amounts discussed below are net of income tax.
Business Growth. A decrease in average invested assets resulted in lower net investment income, decreasing
adjusted earnings. In our deferred annuity business, negative net flows resulted in lower asset-based fee income. In
addition, premiums declined due to business run-off and the impact of dividend scale reductions in both periods. The
combined impact of the items affecting our business growth, partially offset by lower DAC amortization, resulted in a
$145 million decrease in adjusted earnings.
Market Factors. Market factors, including interest rate levels, variability in equity market returns, and foreign
currency fluctuations, continued to impact our results; however, certain impacts were mitigated by derivatives used to
hedge these risks. Investment yields decreased driven by the unfavorable impact of lower equity market returns on our
private equity and hedge funds, lower prepayment fees and lower yields on our mortgage loans and fixed income
securities. The changes in market factors discussed above resulted in a $1.2 billion decrease in adjusted earnings.
Underwriting, Actuarial Assumption Review and Other Insurance Adjustments. Less favorable underwriting, mainly
in our long-term care business, reflecting a smaller impact from the COVID-19 pandemic in 2022, partially offset by
favorable underwriting in our life business, resulted in a $30 million decrease in adjusted earnings. The favorable change
from our actuarial assumption reviews resulted in a net increase of $52 million in adjusted earnings. Refinements to
certain insurance-related liabilities, which include the unfavorable impact from model refinements, partially offset by a
reinsurance settlement, all in 2022, resulted in a $13 million decrease in adjusted earnings. Dividend scale reductions, as
well as run-off in the MLIC closed block, contributed to lower dividend expense, net of DAC amortization, and resulted
in a $80 million increase in adjusted earnings.
Expenses. Adjusted earnings increased by $20 million mainly due to lower corporate-related expenses.
Corporate & Other
Years Ended December 31,
2022
2021
(In millions)
Adjusted revenues
Premiums
Universal life and investment-type product policy fees
Net investment income
Other revenues
Total adjusted revenues
Adjusted expenses
Policyholder benefits and claims and policyholder dividends
Capitalization of DAC
Amortization of DAC and VOBA
Interest expense on debt
Other expenses
Total adjusted expenses
Provision for income tax expense (benefit)
Adjusted earnings
Less: Preferred stock dividends
Adjusted earnings available to common shareholders
Adjusted premiums, fees and other revenues
$
$
86
$
(16) $
2
216
396
598
(6)
(8)
9
909
709
1,613
(356)
(659)
185
(844) $
35
2
244
420
701
34
(11)
9
902
562
1,496
(591)
(204)
195
(399)
382 $
457
Table of Contents
The table below presents adjusted earnings available to common shareholders by source:
Years Ended December 31,
2022
2021
Business activities
Net investment income
Interest expense on debt
Corporate initiatives and projects
Other
Provision for income tax (expense) benefit and other tax-related items
Preferred stock dividends
(In millions)
$
138 $
219
(943)
(64)
(365)
356
(185)
Adjusted earnings available to common shareholders
$
(844) $
143
248
(944)
(128)
(114)
591
(195)
(399)
Year Ended December 31, 2022 Compared with the Year Ended December 31, 2021
Unless otherwise stated, all amounts discussed below are net of income tax.
Net Investment Income. Net investment income decreased $23 million, primarily due to the unfavorable impact of
lower equity market returns, predominantly on our private equity funds and FVO Securities, as well as lower investment
income from our mortgage loans. These decreases were partially offset by higher yields on our fixed income securities.
Corporate Initiatives and Projects & Other. Adjusted earnings decreased $147 million, primarily as a result of an
increase in corporate-related expenses, the release of a legal reserve in the prior year and higher interest expense on tax
positions due to audit settlements in both years, partially offset by lower employee-related costs.
Provision for Income Tax (Expense) Benefit and Other Tax-Related Items. An unfavorable change in Corporate &
Other’s taxes was primarily due to (i) lower utilization of tax preferenced items, which include non-taxable investment
income and tax credits, (ii) IRS audit settlements in both years, and (iii) the non-cash transfer of assets from a wholly-
owned U.K. investment subsidiary to its U.S. parent in 2021, partially offset by lower taxes on stock compensation.
Preferred Stock Dividends. Adjusted earnings available to common shareholders increased $10 million primarily as
a result of the redemption and cancellation of the 5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series
C (the “Series C preferred stock”), in June 2021.
87
Table of Contents
Investments
Overview
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 investment income and risk-adjusted
total return. Our investment portfolio is heavily weighted toward fixed income investments, with the vast majority of our
portfolio invested in fixed maturity securities AFS 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.
Current Environment
As a global insurance company, we continue to be impacted by the changing global financial and economic environment,
the fiscal and monetary policy of governments and central banks around the world and other governmental measures. Global
inflation, supply chain disruptions, the Russia-Ukraine conflict, and the COVID-19 pandemic continue to impact the global
economy and financial markets and has caused volatility in the global equity, credit and real estate markets. See “— Industry
Trends — Financial and Economic Environment” for further information regarding conditions in the global financial markets
and the economy generally which may affect us. These factors may persist for some time and may continue to impact pricing
levels of risk-bearing investments, as well as our business operations, investment portfolio and derivatives. Rising market
interest rates have impacted our investment portfolio and derivatives. See “— Results of Operations — Consolidated Results”
and “— Results of Operations — Consolidated Results — Adjusted Earnings” for impacts on our derivatives and analysis of
the period over period changes in investment portfolio results and “Investments — Fixed Maturity Securities AFS —
Evaluation of Fixed Maturity Securities AFS for Credit Loss — Evaluation of Fixed Maturity Securities AFS in an
Unrealized Loss Position” in Note 8 of the Notes to the Consolidated Financial Statements for impacts on the net unrealized
gain (loss) on our fixed maturity securities AFS.
Selected Country Investments
We have a market presence in numerous countries and, therefore, our investment portfolio, which supports our
insurance operations and related policyholder liabilities, as well as our global portfolio diversification objectives, is
exposed to risks posed by local political and economic conditions. The countries included in the following table have been
the most affected by these risks. The table below presents a summary of selected country fixed maturity securities AFS, at
estimated fair value, on a “country of risk basis” (e.g. where the issuer primarily conducts business).
Country
Italy
Peru
Ukraine (3)
Turkey
Russian Federation (3)
Total
Investment grade %
__________________
Selected Country Fixed Maturity Securities AFS at December 31,
2022
Sovereign (1)
Financial
Services
Non-Financial
Services
Total (2)
$
$
(Dollars in millions)
16
109
57
36
41
259
$
$
60
20
—
—
—
80
$
$
582
175
2
10
—
769
$
658
304
59
46
41
1,108
$
46.1 %
95.5 %
73.1 %
68.4 %
(1)
(2)
Sovereign includes government and agency.
The par value, amortized cost net of ACL and estimated fair value, net of purchased and written credit default swaps,
of these securities were $1.3 billion, $1.2 billion and $1.0 billion, respectively, at December 31, 2022. The notional
value and estimated fair value of the net purchased and written credit default swaps were $71 million and $0,
respectively, at December 31, 2022.
88
Table of Contents
(3)
As of December 31, 2022, the amortized cost, ACL and amortized cost, net of ACL of our Russian Federation
sovereign securities were $120 million, $79 million and $41 million, respectively; and the amortized cost, ACL and
amortized cost, net of ACL of our Russian Federation corporate securities were $2 million, $2 million and less than
$1 million, respectively. As of December 31, 2022, the amortized cost, ACL and amortized cost, net of ACL of our
Ukraine sovereign securities were $88 million, $31 million and $57 million, respectively; and the amortized cost, ACL
and amortized cost, net of ACL of our Ukraine corporate securities were $3 million, $1 million and $2 million,
respectively.
We manage direct and indirect investment exposure in the selected countries through fundamental analysis and we
continually monitor and adjust our level of investment exposure.
Investment Portfolio Results
The reconciliation of net investment income under GAAP to adjusted net investment income is presented below.
Net investment income — GAAP
Investment hedge adjustments
Unit-linked investment income
Other
Adjusted net investment income (1)
__________________
Years Ended December 31,
2022
2021
(In millions)
$
$
15,916 $
976
1,298
(1)
18,189 $
21,395
895
(952)
(58)
21,280
(1)
See “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Consolidated Financial
Statements for a discussion of the adjustments made to net investment income under GAAP in calculating adjusted net
investment income.
The following yield table presentation is consistent with how we measure our investment performance for management
purposes, and we believe it enhances understanding of our investment portfolio results.
Asset Class
Fixed maturity securities AFS (2), (3)
Mortgage loans (3)
Real estate and real estate joint ventures
Policy loans
Equity securities
Other limited partnership interests (4)
Cash and short-term investments
Other invested assets
Investment income
Investment fees and expenses
Net investment income including divested businesses (5)
Less: net investment income from divested businesses (5)
Adjusted net investment income
__________________
Years Ended December 31,
2022
2021
Yield% (1)
Amount
Yield% (1)
Amount
(Dollars in millions)
3.76 % $
11,098
3.74 % $
11,146
4.34
6.40
5.15
3.96
5.92
2.31
—
3,536
798
459
36
860
282
1,670
4.19
4.81
5.11
4.45
40.71
0.80
—
4.32 % $
18,739
5.05 % $
(0.12)
(539)
(0.12)
3,430
579
474
36
4,935
87
1,197
21,884
(537)
4.20 % $
18,200
4.93 % $
21,347
11
$
18,189
67
$
21,280
89
Table of Contents
(1) We calculate yields using adjusted net investment income as a percent of average quarterly asset carrying values.
Adjusted net investment income excludes realized gains (losses) from sales and disposals and includes the impact of
changes in foreign currency exchange rates. Average quarterly asset carrying values exclude unrealized gains (losses),
collateral received in connection with our securities lending program, annuities funding structured settlement claims
freestanding derivative assets, collateral received from derivative counterparties and contractholder-directed equity
securities. In addition, average quarterly asset carrying values include invested assets reclassified to held-for-sale,
while ending carrying values exclude invested assets reclassified to held-for-sale. A yield is not presented for other
invested assets, as it is not considered a meaningful measure of performance for this asset class.
(2)
(3)
(4)
(5)
Investment income (loss) from fixed maturity securities AFS includes amounts from FVO Securities of ($127) million
and $167 million for the years ended December 31, 2022 and 2021, respectively.
Investment income from fixed maturity securities AFS and mortgage loans includes prepayment fees.
See “— Results of Operations — Consolidated Results — Adjusted Earnings” for discussion of results for the year
ended December 31, 2022 compared to the year ended December 31, 2021.
See “Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Consolidated Financial
Statements for discussion of divested businesses.
See “— Results of Operations — Consolidated Results — Adjusted Earnings” for an analysis of the period over period
changes in investment portfolio results.
Fixed Maturity Securities AFS and Equity Securities
The following table presents public and private fixed maturity securities AFS and equity securities held at:
Securities by Type
Fixed maturity securities AFS
Publicly-traded
Privately-placed
Total fixed maturity securities AFS
Percentage of cash and invested assets
Equity securities
Publicly-traded
Privately-held
Total equity securities
Percentage of cash and invested assets
December 31,
2022
2021
Estimated Fair
Value
% of
Total
Estimated Fair
Value
% of
Total
(Dollars in millions)
$ 211,579
65,201
$ 276,780
76.4 % $ 267,040
23.6
73,234
100.0 % $ 340,274
78.5 %
21.5
100.0 %
61.0 %
1,423
261
1,684
0.4 %
$
$
84.5 % $
15.5
100.0 % $
66.1 %
1,118
151
1,269
0.2 %
88.1 %
11.9
100.0 %
See Note 8 of the Notes to the Consolidated Financial Statements for information about fixed maturity securities AFS by
sector, contractual maturities, continuous gross unrealized losses and equity securities by security type and the related cost,
net unrealized gains (losses) and estimated fair value of these securities; as well as realized gains (losses) on sales and
disposals and unrealized net gains (losses) recognized in earnings.
Included within fixed maturity securities AFS are structured securities, including residential mortgage-backed securities
(“RMBS”), asset-backed securities and collateralized loan obligations (collectively “ABS & CLO”) and commercial
mortgage-backed securities (“CMBS”) (collectively, “Structured Products”). See “— Structured Products” for further
information.
90
Table of Contents
Valuation of Securities. We are responsible for the determination of the estimated fair value of our investments. We
determine the estimated fair value of publicly-traded securities after considering one of three primary sources of information:
quoted market prices in active markets, independent pricing services, or independent broker quotations. We determine the
estimated fair value of privately-placed securities after considering one of three primary sources of information: market
standard internal matrix pricing, market standard internal discounted cash flow techniques, or independent pricing services
(after we determine the independent pricing services’ use of available observable market data). For publicly-traded securities,
the number of quotations obtained varies by instrument and depends on the liquidity of the particular instrument. Generally,
we obtain prices from multiple pricing services to cover all asset classes and obtain multiple prices for certain securities, but
ultimately utilize the price with the highest placement in the fair value hierarchy. Independent pricing services that value
these instruments use market standard valuation methodologies based on data about market transactions and inputs from
multiple pricing sources that are market observable or can be derived principally from or corroborated by observable market
data. See Note 10 of the Notes to the Consolidated Financial Statements for a discussion of the types of market standard
valuation methodologies utilized and key assumptions and observable inputs used in applying these standard valuation
methodologies. When a price is not available in the active market or through an independent pricing service, management
values the security primarily using market standard internal matrix pricing or discounted cash flow techniques, and non-
binding quotations from independent brokers who are knowledgeable about these securities. Independent non-binding broker
quotations utilize inputs that may be difficult to corroborate with observable market data. As shown in the following section,
less than 1% of our fixed maturity securities AFS were valued using non-binding quotations from independent brokers at
December 31, 2022.
Senior management, independent of the trading and investing functions, is responsible for the oversight of control
systems and valuation policies for securities, mortgage loans, real estate and derivatives. On a quarterly basis, new
transaction types and markets are reviewed and approved to ensure that observable market prices and market-based
parameters are used for valuation, wherever possible, and for determining that valuation adjustments, when applied, are based
upon established policies and are applied consistently over time. Senior management oversees the selection of independent
third-party pricing providers and the controls and procedures to evaluate third-party pricing.
We review our valuation methodologies on an ongoing basis and revise those methodologies when necessary based on
changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input
assumptions, valuation methodologies and compliance with fair value accounting guidance through controls designed to
ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include, but
are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of
securities sold to the fair value estimates, comparing fair value estimates to management’s knowledge of the current market,
reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing
due diligence to confirm that independent pricing services use market-based parameters. The process includes a
determination of the observability of inputs used in estimated fair values received from independent pricing services or
brokers by assessing whether these inputs can be corroborated by observable market data. We ensure that prices received
from independent brokers, also referred to herein as “consensus pricing,” are representative of estimated fair value by
considering such pricing relative to our knowledge of the current market dynamics and current pricing for similar
investments. While independent non-binding broker quotations are utilized, they are not used for a significant portion of the
portfolio.
On a quarterly basis, we also apply a formal process to challenge any prices received from independent pricing services
that are not considered representative of estimated fair value. If prices received from independent pricing services are not
considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations
are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair value,
compared with pricing received from the independent pricing services, did not produce material differences in the estimated
fair values for the majority of the portfolio; accordingly, overrides were not material. This is, in part, because internal
estimates are generally based on available market evidence and estimates used by other market participants. In the absence of
such market-based evidence, management’s best estimate is used.
We have reviewed the significance and observability of inputs used in the valuation methodologies to determine the
appropriate fair value hierarchy level for each of our securities. Based on the results of this review and investment class
analysis, each instrument is categorized as Level 1, 2 or 3 based on the lowest level significant input to its valuation. See
Note 10 of the Notes to the Consolidated Financial Statements for valuation approaches and key inputs by major category of
assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy.
91
Table of Contents
Fair Value of Fixed Maturity Securities AFS and Equity Securities
Fixed maturity securities AFS and equity securities measured at estimated fair value on a recurring basis and their
corresponding fair value pricing sources were as follows:
Level
Level 1
December 31, 2022
Fixed Maturity
Securities AFS
Equity
Securities
(Dollars in millions)
Quoted prices in active markets for identical assets
$
15,959
5.8 % $
1,293
76.8 %
Level 2
Independent pricing sources
Internal matrix pricing or discounted cash flow techniques
232,048
—
83.8
—
Significant other observable inputs
$
232,048
83.8 % $
Level 3
Independent pricing sources
Internal matrix pricing or discounted cash flow techniques
Independent broker quotations
Significant unobservable inputs
Total at estimated fair value
21,762
6,639
372
28,773
276,780
$
$
7.9
2.4
0.1
10.4 % $
100.0 % $
129
3
132
45
214
—
259
1,684
7.6
0.2
7.8 %
2.7
12.7
—
15.4 %
100.0 %
See Note 10 of the Notes to the Consolidated Financial Statements for the fixed maturity securities AFS and equity
securities fair value hierarchy; a rollforward of the fair value measurements for securities measured at estimated fair value
on a recurring basis using significant unobservable (Level 3) inputs; transfers into and/or out of Level 3; and further
information about the valuation approaches and inputs by level by major classes of invested assets that affect the amounts
reported above.
The majority of the Level 3 fixed maturity securities AFS and equity securities were concentrated in three sectors at
December 31, 2022: U.S. corporate securities, foreign corporate securities and ABS & CLO. During the year ended
December 31, 2022, Level 3 fixed maturity securities AFS decreased by $2.6 billion, or 8%. The decrease was driven by a
decrease in estimated fair value recognized in other comprehensive income (loss), partially offset by transfers into Level 3
in excess of transfers out of Level 3, partially offset by purchases in excess of sales.
Fixed Maturity Securities AFS Credit Quality — Ratings
The Securities Valuation Office of the NAIC evaluates the fixed maturity securities of insurers for regulatory reporting
and capital assessment purposes. The NAIC assigns securities to one of six credit quality categories defined as “NAIC
designations.” In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with
NAIC designations of 3 through 6 are considered below investment grade. If no NAIC designation is available, then, as
permitted by the NAIC, an internally developed designation is used.
NAIC designations for non-agency RMBS and CMBS are based on a modeling methodology that estimates security
level expected losses under a variety of economic scenarios. The modeling methodology for non-agency RMBS and CMBS
issued prior to January 1, 2013 incorporates the amortized cost of the security (including any purchase discounts and prior
impairments) and the likelihood of recovery of the amortized cost; while for non-agency RMBS and CMBS issued after
January 1, 2013, the modeling methodology does not incorporate the amortized cost of the security. The NAIC’s objective
with the modeling methodology is to increase accuracy in estimating expected losses and recovery value, and to use this
credit quality assessment to determine an appropriate RBC charge for non-agency RMBS and CMBS. We utilize these
NAIC designations for our non-agency RMBS and CMBS in our disclosures below. The NAIC evaluates non-agency
RMBS and CMBS held by insurers on an annual basis. When we acquire non-agency RMBS and CMBS that have not been
previously evaluated by the NAIC, an internally developed designation is used until a NAIC designation becomes
available.
92
Table of Contents
In addition to the six NAIC designations, the NAIC maintains 20 “NAIC designation categories” which is an
additional, more granular credit quality categorization. These NAIC designation categories correspond more closely to the
NRSRO’s alpha-numeric credit quality ratings. The NAIC maintains unique RBC factors for each of the 20 NAIC
designation categories. The NAIC’s goal is to better align RBC charges on securities with the instruments’ actual credit
risk.
Rating agency ratings are based on availability of applicable ratings from rating agencies on the NAIC credit rating
provider list, including Moody’s Investors Service (“Moody’s”), S&P, Fitch Ratings (“Fitch”), DBRS Morningstar, A.M.
Best Company (“A.M. Best”), Kroll Bond Rating Agency and Egan Jones Ratings Company. If no rating is available from
a rating agency, then an internally developed rating is used.
NAIC designations are generally similar to the credit quality ratings of the NRSROs, except for (i) non-agency RMBS
and CMBS as described above, and (ii) securities rated Ca or C by NRSROs, included within Caa and lower in our
disclosures below, that are designated NAIC 6; accordingly, NAIC designations may not correspond to NRSRO ratings.
The following table presents total fixed maturity securities AFS by NRSRO rating, except for non-agency RMBS and
CMBS, which are presented using NAIC designations for modeled securities. In addition, in the following table, the
applicable NAIC designation from the NAIC published comparison of NRSRO ratings to NAIC designations is provided.
NRSRO
Rating
NAIC
Designation
Amortized
Cost net of
ACL
Unrealized
Gains (Losses)
Estimated
Fair
Value
% of
Total
Amortized
Cost net of
ACL
Unrealized
Gains (Losses)
(1)
Estimated
Fair
Value
% of
Total
2022
2021
December 31,
Aaa/Aa/A
Baa
Subtotal investment grade
Ba
B
Caa and lower
In or near default
Subtotal below investment
grade
Total fixed maturity
securities AFS
__________________
(Dollars in millions)
1
2
3
4
5
6
$ 209,951 $
(19,930) $ 190,021
68.7 % $ 217,886 $
21,508 $ 239,394
70.4 %
81,280
(8,086)
73,194
291,231
(28,016)
263,215
11,223
2,786
517
85
(712)
(215)
(116)
(3)
10,511
2,571
401
82
14,611
(1,046)
13,565
26.5
95.2
3.8
0.9
0.1
—
4.8
77,739
7,470
85,209
295,625
28,978
324,603
11,439
3,152
563
14
15,168
534
(2)
(37)
8
11,973
3,150
526
22
503
15,671
25.0
95.4
3.5
0.9
0.2
—
4.6
$ 305,842 $
(29,062) $ 276,780
100.0 % $ 310,793 $
29,481 $ 340,274
100.0 %
(1)
Excludes gross unrealized gains (losses) related to assets held-for-sale. See Note 3 of the Notes to the Consolidated
Financial Statements for information on the Company’s business dispositions.
93
Table of Contents
The following tables present total fixed maturity securities AFS, at estimated fair value, by sector and by NRSRO
rating, except for non-agency RMBS and CMBS, which are presented using NAIC designations for modeled securities. In
addition, in the following table, the applicable NAIC designation from the NAIC published comparison of the NRSRO
ratings to NAIC designations is provided.
NRSRO Rating
NAIC Designation
December 31, 2022
U.S. corporate
Foreign corporate
Foreign government
U.S. government and agency
RMBS
ABS & CLO
Municipals
CMBS
Percentage of total
December 31, 2021
U.S. corporate
Foreign corporate
Foreign government
U.S. government and agency
RMBS
ABS & CLO
Municipals
CMBS
Fixed Maturity Securities AFS — by Sector & Credit Quality Rating
Aaa/Aa/A
1
Baa
2
Ba
3
B
4
Caa and
Lower
In or Near
Default
5
6
Total
Estimated
Fair Value
(Dollars in millions)
$ 40,293
$ 33,569
$ 4,281
$ 1,659
$
209
$
18,229
30,657
3,121
38,658
5,143
2,582
31,786
25,510
443
504
13,848
2,495
11,932
9,765
196
187
—
59
370
24
74
513
256
—
69
74
—
—
51
65
—
13
26
—
37
$ 47,377
$ 39,094
$ 4,523
$ 1,796
$
23,228
35,893
3,731
52,316
46,065
29,529
15,920
13,737
11,222
5,739
3,032
534
634
2,221
457
637
—
150
316
18
203
577
506
—
67
85
—
119
244
210
14
—
5
27
—
26
19
1
43
—
10
9
—
—
82
$ 80,030
52,572
46,747
32,229
26,165
16,822
12,152
10,063
$ 276,780
1
2
—
19
—
—
—
22
63,640
61,609
46,599
30,404
18,569
14,212
12,207
$ 340,274
$
—
$ 93,034
Total fixed maturity securities AFS
$ 190,021
$ 73,194
$ 10,511
$ 2,571
$
401
$
68.7 %
26.5 %
3.8 %
0.9 %
0.1 %
— %
100.0 %
Total fixed maturity securities AFS
$ 239,394
$ 85,209
$ 11,973
$ 3,150
$
526
$
Percentage of total
70.4 %
25.0 %
3.5 %
0.9 %
0.2 %
— %
100.0 %
94
Table of Contents
U.S. and Foreign Corporate Fixed Maturity Securities AFS
We maintain a broadly diversified portfolio of corporate fixed maturity securities AFS across many industries and
issuers. This portfolio did not have any exposure to any single issuer in excess of 1% of total investments at either
December 31, 2022 or 2021. The top 10 holdings comprised 1% and 2% of total investments at December 31, 2022 and
2021, respectively. The table below presents our U.S. and foreign corporate securities portfolios by industry at:
Industry
Finance
Consumer (1)
Utility
Industrial (2)
Transportation
Communications
Energy
Technology
Other
Total
December 31,
2022
2021
Estimated
Fair
Value
% of
Total
Estimated
Fair
Value
% of
Total
(Dollars in millions)
$
30,786
23.2 % $
35,676
22.8 %
27,834
23,215
14,276
11,342
10,046
7,711
4,396
2,996
21.0
17.5
10.8
8.5
7.6
5.8
3.3
2.3
33,043
28,961
16,128
13,118
12,346
9,184
5,401
2,817
21.1
18.5
10.3
8.4
7.9
5.8
3.4
1.8
$
132,602
100 % $
156,674
100 %
__________________
(1)
(2)
Includes consumer cyclical and consumer non-cyclical.
Includes basic industry, capital goods and other industrial.
Structured Products
Our investments in Structured Products are collateralized by residential mortgages, commercial mortgages, bank loans
and other assets. Our investment selection criteria and monitoring includes review of credit ratings, characteristics of the
assets underlying the securities, borrower characteristics and the level of credit enhancement. We held $53.0 billion and
$61.2 billion of Structured Products, at estimated fair value, at December 31, 2022 and 2021, respectively, as presented in
the RMBS, ABS & CLO and CMBS sections below.
RMBS
Our RMBS portfolio is broadly diversified by security type and risk profile.
On a security type basis, RMBS includes collateralized mortgage obligations and pass-through mortgage-backed
securities. Collateralized mortgage obligations are structured by dividing the cash flows of mortgage loans into separate
pools or tranches of risk that create multiple classes of bonds with varying maturities and priority of payments. Pass-
through mortgage-backed securities are secured by a mortgage loan or collection of mortgage loans. The monthly
mortgage loan payments from homeowners pass from the originating bank through an intermediary, such as a
government agency or investment bank, which collects the payments and, for a fee, remits or passes these payments
through to the holders of the pass-through securities.
On a risk profile basis, RMBS includes Agency and Non-Agency securities. Agency RMBS were guaranteed or
otherwise supported by Federal National Mortgage Association, Federal Home Loan Mortgage Corporation or
Government National Mortgage Association. Non-Agency securities include prime, prime investor, non-qualified
residential mortgage (“NQM”), alternative (“Alt-A”), reperforming and sub-prime mortgage-backed securities. Prime
(owner-occupied) and prime investor (non owner-occupied) loans were originated to the most creditworthy borrowers
with high quality credit profiles. NQM and Alt-A are classifications of mortgage loans where the risk profile of the
borrower is between prime and sub-prime. Sub-prime mortgage lending is the origination of residential mortgage loans
to borrowers with weak credit profiles, while reperforming loans were previously delinquent that returned to performing
status.
The following table presents our RMBS portfolio by security type, risk profile and ratings profile at:
95
Table of Contents
Security type
Collateralized mortgage obligations
Pass-through mortgage-backed
securities
Total RMBS
Risk profile
Agency
Non-Agency
Prime and prime investor
NQM and Alt-A
Reperforming and sub-prime
Other (2)
Subtotal Non-Agency
Total RMBS
Ratings profile
Rated Aaa and Aa
Designated NAIC 1
__________________
Estimated
Fair
Value
2022
% of
Total
December 31,
Net
Unrealized
Gains (Losses)
Estimated
Fair
Value
(Dollars in millions)
2021
% of
Total
Net
Unrealized
Gains (Losses) (1)
$
15,275
58.4 % $
(1,917) $
17,646
58.0 % $
10,890
41.6
(1,414)
$
26,165
100.0 % $
(3,331) $
12,758
30,404
42.0
100.0 % $
1,092
160
1,252
$
16,291
62.3 % $
(2,183) $
19,487
64.1 % $
671
3,958
1,964
2,892
1,060
9,874
15.1
7.5
11.1
4.0
(687)
(126)
(230)
(105)
37.7 %
(1,148)
$
26,165
100.0 % $
(3,331) $
3,161
2,351
4,288
1,117
10,917
30,404
10.4
7.7
14.1
3.7
35.9 %
13
217
352
(1)
581
100.0 % $
1,252
$
$
21,927
25,514
83.8 %
97.5 %
$
$
24,190
29,529
79.6 %
97.1 %
(1)
(2)
Excludes gross unrealized gains (losses) related to assets held-for-sale. See Note 3 of the Notes to the Consolidated
Financial Statements for information on the Company’s business dispositions.
Other Non-Agency RMBS are broadly diversified across several subsectors and issuers, including securities
collateralized by the following mortgage loan types: single family rental, early buyout securitization and small
business commercial.
The majority of our RMBS holdings were rated Aaa and were designated NAIC 1 at December 31, 2022 and 2021.
We manage our exposure to reperforming and sub-prime RMBS holdings by focusing primarily on senior tranche
securities, stress testing the portfolio with severe loss assumptions and closely monitoring the performance of the
portfolio. Our reperforming RMBS are generally newer vintage securities and higher quality at purchase (e.g., NAIC 1
and NAIC 2). Our sub-prime RMBS portfolio consists predominantly of securities that were purchased at significant
discounts to par value and discounts to the expected principal recovery value of these securities and are investment grade
under NAIC designations (e.g., NAIC 1 and NAIC 2).
96
Table of Contents
ABS & CLO
Our non-mortgage loan-backed structured securities are comprised of two broad categories of securitizations: ABS
& CLO. These portfolios are broadly diversified by collateral type and issuer. The following table presents our ABS &
CLO portfolios by collateral type and ratings profile at:
Estimated
Fair
Value
2022
% of
Total
December 31,
Net
Unrealized
Gains (Losses)
Estimated
Fair
Value
(Dollars in millions)
2021
% of
Total
Net
Unrealized
Gains (Losses) (1)
ABS
Collateral type
Vehicle and equipment loans
$
Consumer loans
Credit card
Digital infrastructure
Franchise
Student loans
Other (2)
Total ABS
CLO (3)
Total ABS & CLO
ABS ratings profile
Rated Aaa and Aa
Designated NAIC 1
CLO ratings profile
Rated Aaa and Aa
Designated NAIC 1
ABS & CLO ratings profile
Rated Aaa and Aa
Designated NAIC 1
_________________
$
$
$
$
$
$
$
10
48
9
7
17
16
22
129
(3)
126
1,404
1,212
1,181
1,014
931
814
2,896
9,452
7,370
16,822
4,285
7,211
5,454
6,634
9,739
13,845
8.4 % $
(61) $
7.2
7.0
6.0
5.5
4.9
17.2
56.2 %
43.8 %
100 % $
(118)
(17)
(112)
(113)
(91)
(335)
(847)
(322)
(1,169) $
45.3 %
76.3 %
74.0 %
90.0 %
57.9 %
82.3 %
$
$
$
$
$
$
1,864
1,672
899
834
763
1,143
2,953
10,128
8,441
18,569
5,289
8,105
6,749
7,815
12,038
15,920
10.0 % $
9.0
4.8
4.5
4.1
6.2
15.9
54.5 %
45.5 %
100.0 % $
52.2 %
80.0 %
80.0 %
92.6 %
64.8 %
85.7 %
(1)
(2)
Excludes gross unrealized gains (losses) related to assets held-for-sale. See Note 3 of the Notes to the Consolidated
Financial Statements for information on the Company’s business dispositions.
Other ABS are broadly diversified across several subsectors and issuers, including securities with the following
collateral types: foreign residential loans, transportation equipment and renewable energy.
(3)
Includes primarily securities collateralized by broadly syndicated bank loans.
97
Table of Contents
CMBS
Our CMBS portfolio is comprised primarily of conduit and single asset and single borrower securities. Conduit
securities are collateralized by many commercial mortgage loans and are broadly diversified by property type, borrower
and geography. The following tables present our CMBS portfolio by collateral type and ratings profile at:
2022
2021
December 31,
Estimated Fair
Value
% of Total
Net
Unrealized
Gains (Losses)
Estimated
Fair Value
% of Total
Net
Unrealized
Gains (Losses)
(1)
Collateral type
Conduit
Single asset and single borrower
Agency
Commercial real estate collateralized
loan obligations
Other
Total CMBS
Ratings profile
Rated Aaa and Aa
Designated NAIC 1
__________________
$
$
$
$
6,781
1,971
607
418
286
10,063
8,138
9,765
67.4 % $
19.6
5.9
4.2
2.9
100.0 % $
80.9 %
97.0 %
(Dollars in millions)
(740) $
(184)
(99)
(14)
(4)
(1,041) $
$
$
8,282
2,269
610
653
393
12,207
9,614
11,222
341
32
50
2
2
427
67.8 % $
18.6
5.0
5.4
3.2
100 % $
78.8 %
91.9 %
(1)
Excludes gross unrealized gains (losses) related to assets held-for-sale. See Note 3 of the Notes to the Consolidated
Financial Statements for information on the Company’s business dispositions.
Evaluation of Fixed Maturity Securities AFS for Credit Loss, Rollforward of Allowance for Credit Loss and Credit Loss
on Fixed Maturity Securities AFS Recognized in Earnings
See Note 8 of the Notes to the Consolidated Financial Statements for information about the evaluation of fixed maturity
securities AFS for credit loss, rollforward of the ACL, net credit loss provision (release) and impairment (losses), as well as
realized gross gains (losses) on sales and disposals of fixed maturity securities AFS at December 31, 2022 and 2021 and for
the years ended December 31, 2022, 2021 and 2020.
Contractholder-Directed Equity Securities and Fair Value Option Securities
The estimated fair value of these investments, which are primarily comprised of contractholder-directed investments
supporting unit-linked variable annuity type liabilities (“Unit-linked investments”), was $9.7 billion and $12.1 billion, or
2.1% and 2.4% of cash and invested assets, at December 31, 2022 and 2021, respectively. See Notes 1, 8 and 10 of the Notes
to the Consolidated Financial Statements for a description of this portfolio, investments by asset type, and the related cost or
amortized cost, net unrealized gains (losses) and estimated fair value of these securities, the fair value hierarchy, rollforward
of the fair value measurements for these investments measured at estimated fair value on a recurring basis using significant
unobservable (Level 3) inputs and net realized and net unrealized gains (losses) recognized in net investment income at
December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020.
Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs
We participate in securities lending transactions, repurchase agreements and third-party custodian administered programs
with unaffiliated financial institutions in the normal course of business for the purpose of enhancing the total return on our
investment portfolio.
Securities lending transactions and repurchase agreements: We account for these arrangements as secured borrowings
and record a liability in the amount of the cash received. We obtain collateral, usually cash, from the borrower, which must
be returned to the borrower when the securities are returned to us. Through these arrangements, we were liable for cash
collateral under our control of $15.2 billion and $24.4 billion at December 31, 2022 and 2021, respectively, including a
portion that may require the immediate return of cash collateral we hold. See Notes 1 and 8 of the Notes to the Consolidated
Financial Statements for further information about the secured borrowings accounting and the classification of revenues and
expenses.
98
Table of Contents
Third-party custodian administered programs: The estimated fair value of securities we own which are loaned in
connection with these programs was $324 million and $273 million at December 31, 2022 and 2021, respectively. The
estimated fair value of the related non-cash collateral on deposit with third-party custodians on our behalf, which is not
reflected in our consolidated financial statements and cannot be sold or re-pledged, was $331 million and $282 million at
December 31, 2022 and 2021, respectively.
Mortgage Loans
Our mortgage loans are principally collateralized by commercial, agricultural and residential properties. Mortgage loans
carried at amortized cost and the related ACL are summarized as follows at:
2022
2021
December 31,
Portfolio Segment
Amortized
Cost
% of
Total
ACL
ACL as %
of
Amortized
Cost
Amortized
Cost
% of
Total
ACL
ACL as %
of
Amortized
Cost
(Dollars in millions)
Commercial
Agricultural
Residential
Total
$
52,502
62.3 % $
19,306
12,482
22.9
14.8
$
84,290
100.0 % $
218
119
190
527
0.4 % $
50,553
63.3 % $
0.6 %
1.5 %
18,111
11,196
22.7
14.0
0.6 % $
79,860
100.0 % $
340
88
206
634
0.7 %
0.5 %
1.8 %
0.8 %
The carrying value of all mortgage loans, net of ACL, was 18.5% and 15.4% of cash and invested assets at December 31,
2022 and 2021, respectively.
We diversify our mortgage loan portfolio by both geographic region and property type to reduce the risk of
concentration. Of our commercial and agricultural mortgage loans carried at amortized cost, 85% are collateralized by
properties located in the U.S., with the remaining 15% collateralized by properties located primarily in Mexico, U.K and
Australia at December 31, 2022. The carrying values of our commercial and agricultural mortgage loans carried at amortized
cost located in California, New York and Texas were 16%, 9% and 7%, respectively, of total commercial and agricultural
mortgage loans carried at amortized cost at December 31, 2022. Additionally, we manage risk when originating commercial
and agricultural mortgage loans by generally lending up to 75% of the estimated fair value of the underlying real estate
collateral.
We manage our residential mortgage loans carried at amortized cost in a similar manner to reduce risk of concentration,
with 91% collateralized by properties located in the U.S., and the remaining 9% collateralized by properties located primarily
in Chile, at December 31, 2022. The carrying values of our residential mortgage loans carried at amortized cost located in
California, Florida, and New York were 32%, 10%, and 8%, respectively, of total residential mortgage loans carried at
amortized cost at December 31, 2022.
99
Table of Contents
Commercial Mortgage Loans by Geographic Region and Property Type. Commercial mortgage loans are the largest
mortgage loan portfolio segment. The tables below present the diversification across geographic regions and property types
of commercial mortgage loans carried at amortized cost at:
December 31,
2022
2021
Amount
% of
Total
Amount
% of
Total
Region
Pacific
Non-U.S.
Middle Atlantic
South Atlantic
West South Central
New England
Mountain
East North Central
East South Central
West North Central
Multi-Region and Other
Total amortized cost
Less: ACL
Carrying value, net of ACL
Property Type
Office
Apartment
Retail
Industrial
Hotel
Other
Total amortized cost
Less: ACL
Carrying value, net of ACL
$
$
$
$
$
$
9,628
9,299
7,574
6,617
3,721
2,764
2,284
1,594
620
597
7,804
52,502
218
52,284
21,009
10,575
8,046
5,607
3,172
4,093
52,502
218
52,284
(Dollars in millions)
18.3 % $
17.7
14.4
12.6
7.1
5.3
4.4
3.0
1.2
1.1
14.9
100.0 % $
$
9,676
9,969
7,537
6,800
3,492
2,748
1,993
2,129
759
663
4,787
50,553
340
50,213
19.1 %
19.7
14.9
13.5
6.9
5.4
4.0
4.2
1.5
1.3
9.5
100.0 %
40.0 % $
22,388
44.3 %
20.2
15.3
10.7
6.0
7.8
100.0 % $
$
9,121
8,548
5,096
3,201
2,199
50,553
340
50,213
18.0
16.9
10.1
6.3
4.4
100.0 %
Our commercial mortgage loan portfolio is well positioned with exposures concentrated in high quality underlying
properties located in primary markets typically with institutional investors who are better positioned to manage their assets
during periods of market volatility. Our portfolio is comprised primarily of lower risk loans with higher debt-service coverage
ratios (“DSCR”) and lower loan-to-value (“LTV”) ratios. See “— Mortgage Loan Credit Quality — Monitoring Process” for
further information and Note 8 of the Notes to the Consolidated Financial Statements for a distribution of our commercial
mortgage loans by DSCR and LTV ratios.
Mortgage Loan Credit Quality — Monitoring Process. We monitor our mortgage loan investments on an ongoing basis,
including a review of loans by credit quality indicator and loans that are current, past due, restructured and under foreclosure.
See Note 8 of the Notes to the Consolidated Financial Statements for further information regarding mortgage loans by credit
quality indicator, past due and nonaccrual mortgage loans.
100
Table of Contents
We review our commercial mortgage loans on an ongoing basis. These reviews may include an analysis of the property
financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the
underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process focuses on higher risk loans,
which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher LTV ratios
and lower DSCR. The monitoring process for agricultural mortgage loans is generally similar, with a focus on higher risk
loans, such as loans with higher LTV ratios. Agricultural mortgage loans are reviewed on an ongoing basis which include, but
are not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and
borrower creditworthiness, including reviews on a geographic and property-type basis. We review our residential mortgage
loans on an ongoing basis, with a focus on higher risk loans, such as nonperforming loans. See Note 8 of the Notes to the
Consolidated Financial Statements for information on our evaluation of residential mortgage loans and related ACL
methodology.
LTV ratios and DSCR are common measures in the assessment of the quality of commercial mortgage loans. LTV ratios
are a common measure in the assessment of the quality of agricultural mortgage loans. LTV ratios compare the amount of the
loan to the estimated fair value of the underlying collateral. An LTV ratio greater than 100% indicates that the loan amount is
greater than the collateral value. An LTV ratio of less than 100% indicates an excess of collateral value over the loan amount.
Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR compares a property’s net
operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the DSCR,
the higher the risk of experiencing a credit loss. For our commercial mortgage loans, our average LTV ratio was 57% and
56% at December 31, 2022 and 2021, respectively, and our average DSCR was 2.6x and 2.5x at December 31, 2022 and
2021, respectively. The DSCR and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio
is routinely updated for all but the lowest risk loans as part of our ongoing review of our commercial mortgage loan portfolio.
For our agricultural mortgage loans, our average LTV ratio was 47% and 49% at December 31, 2022 and 2021, respectively.
The values utilized in calculating our agricultural mortgage loan LTV ratio are developed in connection with the ongoing
review of our agricultural loan portfolio and are routinely updated.
Mortgage Loan Allowance for Credit Loss. Our ACL is established for both pools of loans with similar risk
characteristics and for mortgage loans with dissimilar risk characteristics, collateral dependent loans and reasonably expected
troubled debt restructurings, individually on a loan specific basis. We record an allowance for expected lifetime credit loss in
earnings within net investment gains (losses) in an amount that represents the portion of the amortized cost basis of mortgage
loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to
be collected.
In determining our ACL, management (i) pools mortgage loans that share similar risk characteristics, (ii) considers
expected lifetime credit loss over the contractual term of our mortgage loans, as adjusted for expected prepayments and any
extensions, and (iii) considers past events and current and forecasted economic conditions. Actual credit loss realized could
be different from the amount of the ACL recorded. These evaluations and assessments are revised as conditions change and
new information becomes available, which can cause the ACL to increase or decrease over time as such evaluations are
revised. Negative credit migration, including an actual or expected increase in the level of problem loans, will result in an
increase in the ACL. Positive credit migration, including an actual or expected decrease in the level of problem loans, will
result in a decrease in the ACL. See Notes 1 and 8 of the Notes to the Consolidated Financial Statements for information on
how the ACL is established and monitored, and activity in and balances of the ACL.
Real Estate and Real Estate Joint Ventures
Our real estate investments are comprised of wholly-owned properties, and interests in both real estate joint ventures and
real estate funds which invest in a wide variety of properties and property types, including single and multi-property projects,
and broadly diversified across multiple property types and geographies.
The carrying value of our real estate investments was $13.1 billion and $12.2 billion, or 2.9% and 2.4% of cash and
invested assets, at December 31, 2022 and 2021, respectively.
Our real estate investments are typically stabilized properties that we intend to hold for the longer-term for portfolio
diversification and long-term appreciation. Our real estate investment portfolio had significantly appreciated to a $6.7 billion
and $6.8 billion unrealized gain position at December 31, 2022 and 2021, respectively.
We continuously monitor and assess our real estate investments for impairment when facts and circumstances indicate
that the real estate may be impaired. There were no impairments (losses) recognized on our real estate investments for either
the year ended December 31, 2022 or 2021.
101
Table of Contents
We diversify our real estate investments by property type, form of equity interest (wholly-owned, joint venture and
funds) and geographic region to reduce risk of concentration. See Note 8 of the Notes to the Consolidated Financial
Statements for a summary of our real estate investments, by income type, as well as income earned.
Property type diversification: Our real estate investments are categorized by property type as follows at:
Property Type
Office
Retail
Apartment
Land
Hotel
Industrial
Agriculture
Other
Wholly-owned and real estate joint ventures
Diversified property types and multi-property
Real estate funds
Total real estate and real estate joint ventures
December 31,
2022
2021
Carrying
Value
% of
Total
Carrying
Value
(Dollars in millions)
% of
Total
$
$
$
3,964
1,329
1,225
901
796
356
5
6
8,582
1,042
3,513
13,137
30.2 % $
10.1
9.3
6.9
6.1
2.7
—
—
65.3 % $
7.9
26.8
4,209
1,105
1,343
1,008
677
421
18
10
8,791
937
2,488
100.0 % $
12,216
34.5 %
9.0
11.0
8.3
5.5
3.4
0.2
0.1
72.0 %
7.6
20.4
100.0 %
Geographical diversification: Wholly-owned and real estate joint ventures totaled $8.6 billion at December 31, 2022,
66% of which were located in the U.S. and 34% of such properties were located outside the U.S., at December 31, 2022, at
carrying value. The portion of these properties located in Japan, Washington, D.C. and Georgia were 31%, 8% and 8%,
respectively, at December 31, 2022, at carrying value.
Other Limited Partnership Interests
Other limited partnership interests are comprised of investments in private funds, including private equity funds and
hedge funds. At December 31, 2022 and 2021, the carrying value of other limited partnership interests was $14.4 billion and
$14.6 billion, which included $414 million and $663 million of hedge funds, respectively. Other limited partnership interests
were 3.2% and 2.8% of cash and invested assets at December 31, 2022 and 2021, respectively. Cash distributions on these
investments are generated from investment gains, operating income from the underlying investments of the funds and
liquidation of the underlying investments of the funds.
We use the equity method of accounting for most of our private equity funds. We generally recognize our share of a
private equity fund’s earnings in net investment income on a three-month lag when the information is reported to us.
Accordingly, changes in equity market levels, which can impact the underlying results of these private equity funds, are
recognized in earnings within our net investment income on a three-month lag.
102
Table of Contents
Other Invested Assets
The following table presents the carrying value of our other invested assets by type at:
December 31,
2022
2021
Asset Type
Carrying Value
% of Total
Carrying Value
% of Total
Freestanding derivatives with positive estimated fair values
Tax credit and renewable energy partnerships
Annuities funding structured settlement claims
Direct financing leases
Operating joint ventures
Leveraged leases
FHLBNY common stock
Funds withheld
Other
Total
$
11,411
(Dollars in millions)
56.9 % $
10,466
56.1 %
1,318
1,238
1,195
1,099
731
729
359
1,958
6.6
6.2
6.0
5.5
3.6
3.6
1.8
9.8
1,564
1,251
1,143
901
787
769
525
1,249
8.4
6.7
6.1
4.8
4.2
4.1
2.8
6.8
$
20,038
100 % $
18,655
100 %
Percentage of cash and invested assets
4.4 %
3.6 %
See Notes 1, 8 and 9 of the Notes to the Consolidated Financial Statements for information regarding freestanding
derivatives with positive estimated fair values, tax credit and renewable energy partnerships, annuities funding structured
settlement claims, direct financing and leveraged leases, operating joint ventures, FHLBNY common stock, and funds
withheld, as well as gains (losses) on disposals of leveraged leases and renewable energy partnerships.
Investment Commitments
We enter into the following commitments in the normal course of business for the purpose of enhancing the total return
on our investment portfolio: mortgage loan commitments and commitments to fund partnerships, bank credit facilities, bridge
loans and private corporate bond investments. See Note 21 of the Notes to the Consolidated Financial Statements for the
amount of our unfunded investment commitments at December 31, 2022 and 2021. See “Net Investment Income” and “Net
Investment Gains (Losses)” in Note 8 of the Notes to the Consolidated Financial Statements for information on the
investment income, investment expense, gains and losses from such investments and the liability for credit loss for unfunded
mortgage loan commitments. See also “— Fixed Maturity Securities AFS and Equity Securities,” “— Mortgage Loans,” “—
Real Estate and Real Estate Joint Ventures” and “— Other Limited Partnership Interests.”
103
Table of Contents
Derivatives
Overview
We are exposed to various risks relating to our ongoing business operations, including interest rate, foreign currency
exchange rate, credit and equity market. We use a variety of strategies to manage these risks, including the use of derivatives,
such as market standard purchased and written credit default swap contracts. See Note 9 of the Notes to the Consolidated
Financial Statements for:
•
•
•
A comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used
in managing various risks.
Information about the primary underlying risk exposure, gross notional amount, and estimated fair value of our
derivatives by type of hedge designation, excluding embedded derivatives held at December 31, 2022 and 2021.
The statement of operations effects of derivatives in net investments in foreign operations, cash flow, fair value, or
nonqualifying hedge relationships for the years ended December 31, 2022, 2021 and 2020.
We enter into market standard purchased and written credit default swap contracts. Payout under such contracts is
triggered by certain credit events experienced by the referenced entities. For credit default swaps covering North American
corporate issuers, credit events typically include bankruptcy and failure to pay on borrowed money. For European corporate
issuers, credit events typically also include involuntary restructuring. With respect to credit default contracts on sovereign
debt, credit events typically include failure to pay debt obligations, repudiation, moratorium, or involuntary restructuring. In
each case, payout on a credit default swap is triggered only after the relevant third party, Credit Derivatives Determinations
Committee, determines that a credit event has occurred.
We use purchased credit default swaps to mitigate credit risk in our investment portfolio. Generally, we purchase credit
protection by entering into credit default swaps referencing the issuers of specific assets we own. In certain cases, basis risk
exists between these credit default swaps and the specific assets we own. For example, we may purchase credit protection on
a macro basis to reduce exposure to specific industries or other portfolio concentrations. In such instances, the referenced
entities and obligations under the credit default swaps may not be identical to the individual obligors or securities in our
investment portfolio. In addition, our purchased credit default swaps may have shorter tenors than the underlying investments
they are hedging, which gives us more flexibility in managing our credit exposures. We believe that our purchased credit
default swaps serve as effective economic hedges of our credit exposure.
See “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures —
Hedging Activities” for more information about our use of derivatives by major hedge program.
Fair Value Hierarchy
See Note 10 of the Notes to the Consolidated Financial Statements for derivatives measured at estimated fair value on a
recurring basis and their corresponding fair value hierarchy.
The valuation of Level 3 derivatives involves the use of significant unobservable inputs and generally requires a higher
degree of management judgment or estimation than the valuations of Level 1 and Level 2 derivatives. Although Level 3
inputs are unobservable, management believes they are consistent with what other market participants would use when
pricing such instruments and are considered appropriate given the circumstances. The use of different inputs or
methodologies could have a material effect on the estimated fair value of Level 3 derivatives and could materially affect net
income.
Derivatives categorized as Level 3 at December 31, 2022 include: interest rate forwards with maturities which extend
beyond the observable portion of the yield curve; foreign currency swaps and forwards with certain unobservable inputs,
including the unobservable portion of the yield curve; and credit default swaps priced using unobservable credit spreads, or
that are priced through independent broker quotations. At December 31, 2022, 1% of the estimated fair value of our
derivatives was priced through independent broker quotations.
See Note 10 of the Notes to the Consolidated Financial Statements for a rollforward of the fair value measurements for
derivatives measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs.
See “— Summary of Critical Accounting Estimates — Derivatives” for further information on the estimates and
assumptions that affect derivatives.
104
Table of Contents
Credit Risk
See Note 9 of the Notes to the Consolidated Financial Statements for information about how we manage credit risk
related to derivatives and for the estimated fair value of our net derivative assets and net derivative liabilities after the
application of master netting agreements and collateral.
Our policy is not to offset the fair value amounts recognized for derivatives executed with the same counterparty under
the same master netting agreement. This policy applies to the recognition of derivatives on the consolidated balance sheets
and does not affect our legal right of offset.
Credit Derivatives
The following table presents the gross notional amount and estimated fair value of credit default swaps at:
Credit Default Swaps
Purchased
Written
Total
December 31,
2022
2021
Gross
Notional
Amount
Estimated
Fair Value
Gross
Notional
Amount
Estimated
Fair Value
$
$
2,925
$
11,512
14,437
$
(In millions)
(61) $
105
3,042
$
8,626
44
$
11,668
$
(100)
165
65
The following table presents the gross gains, gross losses and net gains (losses) recognized in net derivative gains
(losses) for credit default swaps as follows:
Credit Default Swaps
Purchased (1)
Written (1)
Total
__________________
2022
Gross
Losses
Gross
Gains
Years Ended December 31,
Net
Gains
(Losses)
Gross
Gains
(In millions)
2021
Gross
Losses
Net
Gains
(Losses)
$
$
78 $
62
(3) $
75 $
18 $
(9) $
(154)
(92)
52
(11)
140 $
(157) $
(17) $
70 $
(20) $
9
41
50
(1)
Gains (losses) do not include earned income (expense) on credit default swaps.
The unfavorable change in net gains (losses) on written credit default swaps was $133 million for the year ended
December 31, 2022 as compared to the year ended December 31, 2021 due to certain credit spreads on certain credit default
swaps used as replications widening in the current period and narrowing in the prior period. The favorable change in net
gains(losses) on purchased credit default swaps of $66 million for the year ended December 31, 2022 as compared to the year
ended December 31, 2021 due to certain credit spreads on certain credit default swaps widening in the current period as
compared to narrowing in the prior period.
The maximum amount at risk related to our written credit default swaps is equal to the corresponding gross notional
amount. In a replication transaction, we pair an asset on our balance sheet with a written credit default swap to synthetically
replicate a corporate bond, a core asset holding of life insurance companies. Replications are entered into in accordance with
the guidelines approved by state insurance regulators and the NAIC and are an important tool in managing the overall
corporate credit risk within the Company. In order to match our long-dated insurance liabilities, we seek to buy long-dated
corporate bonds. In some instances, these may not be readily available in the market, or they may be issued by corporations to
which we already have significant corporate credit exposure. For example, by purchasing Treasury bonds (or other high
quality assets) and associating them with written credit default swaps on the desired corporate credit name, we can replicate
the desired bond exposures and meet our ALM needs. In addition, given the shorter tenor of the credit default swaps
(generally five-year tenors) versus a long-dated corporate bond, we have more flexibility in managing our credit exposures.
105
Table of Contents
Collateral for Derivatives
We enter into derivatives to manage various risks relating to our ongoing business operations. We receive non-cash
collateral from counterparties for derivatives, which can be sold or re-pledged subject to certain constraints, and which is not
reflected on our consolidated balance sheets. The amounts of this non-cash collateral were $1.7 billion and $1.1 billion at
estimated fair value, at December 31, 2022 and 2021, respectively. See “— Liquidity and Capital Resources — The
Company — Liquidity and Capital Uses — Pledged Collateral” and Note 9 of the Notes to the Consolidated Financial
Statements for information regarding the earned income on and the gross notional amount, estimated fair value of assets and
liabilities and primary underlying risk exposure of our derivatives.
Embedded Derivatives
See Notes 9 and 10 of the Notes to the Consolidated Financial Statements for information about embedded derivatives.
See “— Summary of Critical Accounting Estimates — Derivatives” for further information on the estimates and
assumptions that affect embedded derivatives.
Policyholder Liabilities
We establish, and carry as liabilities, actuarially determined amounts that are calculated to meet policy obligations or to
provide for future annuity payments. Amounts for actuarial liabilities are computed and reported on the consolidated financial
statements in conformity with GAAP. For more details on Policyholder Liabilities, see “ — Summary of Critical Accounting
Estimates.”
We periodically review our estimates of actuarial liabilities for future benefits and compare them with our actual
experience. We revise estimates, to the extent permitted or required under GAAP, if we determine that future expected
experience differs from assumptions used in the development of actuarial liabilities. We charge or credit changes in our
liabilities to expenses in the period the liabilities are established or re-estimated. If the liabilities originally established for
future benefit payments prove inadequate, we must increase them. Such an increase could adversely affect our earnings and
have a material adverse effect on our business, results of operations and financial condition.
See “Business — Regulation — Insurance Regulation — Policy and Contract Reserve Adequacy Analysis” and “Risk
Factors — Business Risks” for further information regarding required analyses of the adequacy of statutory reserves of our
insurance operations.
The following discussions on future policy benefits and policyholder account balances should be read in conjunction
with “— Industry Trends — Impact of Market Interest Rates,” “— Variable Annuity Guarantees” and “— Liquidity and
Capital Resources — The Company — Liquidity and Capital Sources — Global Funding Sources — Policyholder Account
Balances.” See also Notes 1 and 4 of the Notes to the Consolidated Financial Statements for additional information.
Future Policy Benefits
We establish liabilities for amounts payable under insurance policies. A discussion of future policy benefits by segment
(as well as Corporate & Other) follows.
U.S.
Amounts payable under insurance policies for this segment are comprised of group insurance and annuities. For group
insurance, future policyholder benefits are comprised mainly of liabilities for disabled lives under disability waiver of
premium policy provisions, liabilities for survivor income benefit insurance, active life policies and premium stabilization
and other contingency liabilities held under life insurance contracts. For group annuity contracts, future policyholder
benefits are primarily related to payout annuities, including pension risk transfers, structured settlement annuities and
institutional income annuities. There is no interest rate crediting flexibility on these liabilities.
Asia
Future policy benefits for this segment are held primarily for traditional life, endowment, annuity and accident &
health contracts. They are also held for total return pass-through provisions included in certain universal life and savings
products. They include certain liabilities for variable annuity and variable life guarantees of minimum death benefits, and
longevity guarantees. Factors impacting these liabilities include sustained periods of lower than expected yields, lower than
expected asset reinvestment rates, market volatility, actual lapses resulting in lower than expected income, and actual
mortality or morbidity resulting in higher than expected benefit payments.
106
Table of Contents
Latin America
Future policy benefit liabilities for this segment are held primarily for immediate annuities, traditional life contracts
and total return pass-through provisions included in certain universal life and savings products. There is no interest rate
crediting flexibility on the immediate annuity and traditional life liabilities. Other factors impacting these liabilities are
actual mortality resulting in higher than expected benefit payments and actual lapses resulting in lower than expected
income.
EMEA
Future policy benefits for this segment include unearned premium reserves for group life and medical and credit
insurance contracts. Future policy benefits are also held for traditional life, endowment and annuity contracts with
significant mortality risk and accident & health contracts. Factors impacting these liabilities include lower than expected
asset reinvestment rates, market volatility, actual lapses resulting in lower than expected income, and actual mortality or
morbidity resulting in higher than expected benefit payments.
MetLife Holdings
Future policy benefits for the life insurance business are comprised mainly of liabilities for traditional life insurance
contracts. For the annuities business, future policy benefits are comprised mainly of liabilities for life-contingent income
annuities and liabilities for the variable annuity guaranteed minimum benefits that are accounted for as insurance. For the
long-term care business, future policyholder benefits are comprised mainly of liabilities for disabled lives under disability
waiver of premium policy provisions, and active life policies. In addition, for our other products, future policyholder
benefits related to the reinsurance of our former Japan joint venture are comprised of liabilities for the variable annuity
guaranteed minimum benefits that are accounted for as insurance.
Corporate & Other
Future policy benefits primarily include liabilities for other reinsurance business.
Policyholder Account Balances
Policyholder account balances are generally equal to the account value, which includes accrued interest credited, but
excludes the impact of any applicable charge that may be incurred upon surrender. A discussion of policyholder account
balances by segment follows.
U.S.
Policyholder account balances in this segment are comprised of funding agreements, retained asset accounts, universal
life policies, the fixed account of variable life insurance policies and specialized life insurance products for benefit
programs.
Group Benefits
Policyholder account balances in this business are held for retained asset accounts, universal life policies, the fixed
account of variable life insurance policies and specialized life insurance products for benefit programs. Policyholder
account balances are credited interest at a rate we determine, which is influenced by current market rates. Most of these
policyholder account balances have minimum credited rate guarantees.
The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Group
Benefits:
Guaranteed Minimum Crediting Rate
Greater than 0% but less than 2%
Equal to or greater than 2% but less than 4%
Equal to or greater than 4%
107
December 31, 2022
Account
Value
Account
Value at
Guarantee
(In millions)
5,571 $
1,496 $
817 $
5,393
1,453
786
$
$
$
Table of Contents
Retirement and Income Solutions
Policyholder account balances in this business are held largely for investment-type products, mainly funding
agreements, as well as postretirement benefits and corporate-owned life insurance to fund non-qualified benefit programs
for executives. Interest crediting rates vary by type of contract and can be fixed or variable. Variable interest crediting
rates are generally tied to an external index, most commonly (1-month or 3-month) LIBOR or Secured Overnight
Financing Rate. We guarantee payment of interest and return of principal at the contractual maturity date.
The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for RIS:
Guaranteed Minimum Crediting Rate
Greater than 0% but less than 2%
Equal to or greater than 2% but less than 4%
Equal to or greater than 4%
Asia
December 31, 2022
Account
Value
Account
Value at
Guarantee
(In millions)
1,295 $
771 $
—
232
4,627 $
4,439
$
$
$
Policyholder account balances in this segment are held largely for fixed income retirement and savings plans, fixed
deferred annuities, interest sensitive whole life products, universal life and, to a lesser degree, liability amounts for Unit-
linked investments that do not meet the GAAP definition of separate accounts. Also included are certain liabilities for
retirement and savings products sold in certain countries in Asia that generally are sold with minimum credited rate
guarantees. Liabilities for guarantees on certain variable annuities in Asia are accounted for as embedded derivatives and
recorded at estimated fair value and are also included within policyholder account balances. Most of these policyholder
account balances have minimum credited rate guarantees. Liabilities for Unit-linked investments are impacted by changes
in the fair value of the associated underlying investments, as the return on assets is generally passed directly to the
policyholder.
The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for Asia:
Guaranteed Minimum Crediting Rate
Annuities
Greater than 0% but less than 2%
Equal to or greater than 2% but less than 4%
Equal to or greater than 4%
Life & Other
Greater than 0% but less than 2%
Equal to or greater than 2% but less than 4%
Equal to or greater than 4%
Latin America
December 31, 2022
Account
Value
Account
Value at
Guarantee
(In millions)
$
$
$
$
$
$
32,646 $
1,679
900 $
1 $
394
1
12,122 $
34,725 $
265 $
11,383
21,184
265
Policyholder account balances in this segment are held largely for investment-type products, universal life products,
deferred annuities and Unit-linked investments that do not meet the GAAP definition of separate accounts. Liabilities for
Unit-linked investments are impacted by changes in the fair value of the associated investments, as the return on assets is
generally passed directly to the policyholder. Many of the other liabilities have minimum credited rate guarantees.
108
Table of Contents
EMEA
Policyholder account balances in this segment are held mostly for universal life, deferred annuities, pension products,
and Unit-linked investments that do not meet the GAAP definition of separate accounts. They are also held for endowment
products without significant mortality risk. Most of these policyholder account balances have minimum credited rate
guarantees. Liabilities for Unit-linked investments are impacted by changes in the fair value of the associated investments,
as the return on assets is generally passed directly to the policyholder.
MetLife Holdings
Life policyholder account balances in this segment are held for retained asset accounts, universal life policies, the fixed
account of variable life insurance policies, and funding agreements. For annuities, policyholder account balances are held
for fixed deferred annuities, the fixed account portion of variable annuities, non-life contingent income annuities, and
embedded derivatives related to variable annuity guarantees. Interest is credited to the policyholder’s account at interest
rates we determine which are influenced by current market rates, subject to specified minimums. Most of these
policyholder account balances have minimum credited rate guarantees. Additionally, for our other products, policyholder
account balances are held for variable annuity guarantees assumed from a former operating joint venture in Japan that are
accounted for as embedded derivatives.
The table below presents the breakdown of account value subject to minimum guaranteed crediting rates for the
MetLife Holdings segment:
Guaranteed Minimum Crediting Rate
Greater than 0% but less than 2%
Equal to or greater than 2% but less than 4%
Equal to or greater than 4%
Variable Annuity Guarantees
December 31, 2022
Account
Value
Account
Value at
Guarantee
(In millions)
1,028 $
16,507 $
7,111 $
1,001
14,418
6,512
$
$
$
We issue, directly and through assumed business, certain variable annuity products with guaranteed minimum benefits
that provide the policyholder a minimum return based on their initial deposit (i.e., the benefit base) less withdrawals. In some
cases, the benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value resets. See
Notes 1 and 4 of the Notes to the Consolidated Financial Statements for additional information.
Certain guarantees, including portions thereof, have insurance liabilities established that are included in future policy
benefits. Guarantees accounted for in this manner include GMDBs, the life-contingent portion of GMWBs, elective GMIB
annuitizations, and the life contingent portion of GMIBs that require annuitization when the account balance goes to zero.
These liabilities are accrued over the life of the contract in proportion to actual and future expected policy assessments based
on the level of guaranteed minimum benefits generated using multiple scenarios of separate account returns. The scenarios
are based on best estimate assumptions consistent with those used to amortize DAC. When current estimates of future
benefits exceed those previously projected or when current estimates of future assessments are lower than those previously
projected, liabilities will increase, resulting in a current period charge to net income. The opposite result occurs when the
current estimates of future benefits are lower than those previously projected or when current estimates of future assessments
exceed those previously projected. At the end of each reporting period, we update the actual amount of business remaining
in-force, which impacts expected future assessments and the projection of estimated future benefits resulting in a current
period charge or increase to earnings.
109
Table of Contents
Certain guarantees, including portions thereof, accounted for as embedded derivatives, are recorded at estimated fair
value and included in policyholder account balances. Guarantees accounted for as embedded derivatives include GMABs, the
non-life contingent portion of GMWBs and certain non-life contingent portions of GMIBs. The estimated fair values of
guarantees accounted for as 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
to project the cash flows from the guarantees under multiple capital market scenarios to determine an economic liability. The
reported estimated fair value is then determined by taking the present value of these risk-free generated cash flows using a
discount rate that incorporates a spread over the risk-free rate to reflect our nonperformance risk and adding a risk margin.
For more information on the determination of estimated fair value, see Note 10 of the Notes to the Consolidated Financial
Statements.
The table below presents the carrying value for guarantees at:
Asia
GMDB
GMAB
GMWB
EMEA
GMDB
GMAB
GMWB
MetLife Holdings
GMDB
GMIB
GMAB
GMWB
Total
Future Policy
Benefits
December 31,
Policyholder
Account Balances
December 31,
2022
2021
2022
2021
(In millions)
$
5 $
4 $
— $
—
29
2
—
12
737
828
—
207
—
32
3
—
19
561
1,029
—
174
$
1,820 $
1,822 $
11
56
—
4
(49)
—
407
(1)
133
561 $
—
14
107
—
6
(58)
—
180
—
173
422
The carrying amounts for guarantees included in policyholder account balances above include nonperformance risk
adjustments of $138 million and $120 million at December 31, 2022 and 2021, respectively. These nonperformance risk
adjustments represent the impact of including a credit spread when discounting the underlying risk-neutral cash flows to
determine the estimated fair values. The nonperformance risk adjustment does not have an economic impact on us as it
cannot be monetized given the nature of these policyholder liabilities. The change in valuation arising from the
nonperformance risk adjustment is not hedged.
The carrying values of these guarantees can change significantly during periods of sizable and sustained shifts in equity
market performance, equity volatility, interest rates or foreign currency exchange rates. Carrying values are also impacted by
our assumptions around mortality, separate account returns and policyholder behavior, including lapse rates.
As discussed below, we use a combination of product design, hedging strategies, reinsurance, and other risk management
actions to mitigate the risks related to these benefits. Within each type of guarantee, there is a range of product offerings
reflecting the changing nature of these products over time. Changes in product features and terms are in part driven by
customer demand but, more importantly, reflect our risk management practices of continuously evaluating the guaranteed
benefits and their associated asset-liability matching. We continue to diversify the concentration of income benefits in our
portfolio by focusing on withdrawal benefits, variable annuities without living benefits and index-linked annuities.
110
Table of Contents
The sections below provide further detail by total account value for certain of our most popular guarantees. Total account
values include amounts not reported on the consolidated balance sheets from assumed business, Unit-linked investments that
do not qualify for presentation as separate account assets, and amounts included in our general account. The total account
values and the net amounts at risk include direct and assumed business, but exclude offsets from hedging or ceded
reinsurance, if any.
GMDBs
We offer a range of GMDBs to our contractholders. The table below presents GMDBs, by benefit type, at
December 31, 2022:
Return of premium or five to seven year step-up
Annual step-up
Roll-up and step-up combination
Total
__________________
Total Account Value (1)
Asia & EMEA
MetLife
Holdings
(In millions)
5,469 $
34,655
—
—
2,299
3,853
5,469 $
40,807
$
$
(1)
Total account value excludes $517 million for contracts with no GMDBs. The Company’s annuity contracts with
guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for GMDBs and
for living benefit guarantees are not mutually exclusive.
Based on total account value, less than 17% of our GMDBs included enhanced death benefits such as the annual step-
up or roll-up and step-up combination products at December 31, 2022.
Living Benefit Guarantees
The table below presents our living benefit guarantees based on total account values at December 31, 2022:
GMIB
GMWB - non-life contingent (2)
GMWB - life-contingent
GMAB
Total
__________________
Total Account Value (1)
Asia & EMEA
MetLife
Holdings
(In millions)
$
— $
14,516
677
2,112
1,064
1,417
6,085
98
$
3,853 $
22,116
(1)
(2)
Total account value excludes $20.8 billion for contracts with no living benefit guarantees. The Company’s annuity
contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for
GMDBs and for living benefit guarantee amounts are not mutually exclusive.
The Asia and EMEA segments include the non-life contingent portion of the GMWB total account value of
$677 million with a guarantee at annuitization.
In terms of total account value, GMIBs are our most significant living benefit guarantee. Our primary risk management
strategy for our GMIB products is our derivatives hedging program as discussed below. Additionally, we have engaged in
certain reinsurance agreements covering some of our GMIB business. As part of our overall risk management approach for
living benefit guarantees, we continually monitor the reinsurance markets for the right opportunity to purchase additional
coverage for our GMIB business. We stopped selling GMIBs in February 2016.
111
Table of Contents
The table below presents our GMIB associated total account values, by their guaranteed payout basis, at December 31,
2022:
7-year setback, 2.5% interest rate
7-year setback, 1.5% interest rate
10-year setback, 1.5% interest rate
10-year mortality projection, 10-year setback, 1.0% interest rate
10-year mortality projection, 10-year setback, 0.5% interest rate
Total
Account Value
(In millions)
$
4,444
911
2,943
5,277
941
$
14,516
The annuitization interest rates on GMIBs have been decreased from 2.5% to 0.5% over time, partially in response to
the low interest rate environment, in effect at the time the GMIBs were sold, accompanied by an increase in the setback
period from seven years to 10 years and the introduction of a 10-year mortality projection.
Additionally, 33% of the $14.5 billion of GMIB total account value has been invested in managed volatility funds as
of December 31, 2022. These funds seek to manage volatility by adjusting the fund holdings within certain guidelines
based on capital market movements. Such activity reduces the overall risk of the underlying funds while maintaining their
growth opportunities. These risk mitigation techniques reduce or eliminate the need for us to manage the funds’ volatility
through hedging or reinsurance.
Our GMIB products typically have a waiting period of 10 years to be eligible for annuitization. As of December 31,
2022, only 49% of our contracts with GMIBs were eligible for annuitization. The remaining contracts are not eligible for
annuitization for an average of three years.
Once eligible for annuitization, contractholders would be expected to annuitize only if their contracts were in-the-
money. We calculate in-the-moneyness with respect to GMIBs consistent with net amount at risk as discussed in Note 4 of
the Notes to the Consolidated Financial Statements, by comparing the contractholders’ income benefits based on total
account values and current annuity rates versus the guaranteed income benefits. The net amount at risk was $433 million at
December 31, 2022, of which $371 million was related to GMIBs. For those contracts with GMIB, the table below presents
details of contracts that are in-the-money and out-of-the-money at December 31, 2022:
In-the-money
Out-of-the-money
In-the-Moneyness
30% or greater
$
20% to less than 30%
10% to less than 20%
0% to less than 10%
-10% to 0%
-20% to less than -10%
Greater than -20%
Total GMIBs
$
Total
Account Value
(In millions)
% of Total
351
193
359
735
1,638
1,647
3,378
7,853
12,878
14,516
3 %
1 %
3 %
5 %
11 %
23 %
54 %
112
Table of Contents
Derivatives Hedging Variable Annuity Guarantees
Our risk mitigating hedging strategy uses various OTC and exchange traded derivatives. The table below presents the
gross notional amount, estimated fair value and primary underlying risk exposure of the derivatives hedging our variable
annuity guarantees:
Primary Underlying
Risk Exposure
Interest rate
Foreign currency exchange
rate
Equity market
December 31,
2022
2021
Instrument Type
Amount
Assets
Liabilities
Amount
Assets
Liabilities
Gross Notional
Estimated Fair Value
Gross Notional
Estimated Fair Value
Interest rate swaps
$
7,938 $
34 $
763 $
8,663 $
52 $
(In millions)
Interest rate futures
Interest rate options
Foreign currency
forwards
Equity futures
Equity index options
Equity variance swaps
Equity total return
swaps
Total
1,110
50
887
2,508
3,621
163
2,537
2
5
26
7
213
4
9
1
—
2
3
265
1
112
1,087
100
1,149
3,641
4,161
699
3
1
4
11
513
17
2,763
11
$
18,814 $
300 $
1,147 $
22,263 $
612 $
75
—
—
13
5
362
13
44
512
The change in estimated fair values of our derivatives is recorded in policyholder benefits and claims if such
derivatives are hedging guarantees included in future policy benefits, and in net derivative gains (losses) if such derivatives
are hedging guarantees included in policyholder account balances.
Our hedging strategy involves the significant use of static longer-term derivative instruments to avoid the need to
execute transactions during periods of market disruption or higher volatility. We continually monitor the capital markets
for opportunities to adjust our liability coverage, as appropriate. Futures are also used to dynamically adjust the daily
coverage levels as markets and liability exposures fluctuate.
We remain liable for the guaranteed benefits in the event that reinsurers or derivative counterparties are unable or
unwilling to pay. Certain of our reinsurance agreements and all derivative positions are collateralized and derivatives
positions are subject to master netting agreements, both of which significantly reduce the exposure to counterparty risk. In
addition, we are subject to the risk that hedging and other risk management actions prove ineffective or that unanticipated
policyholder behavior or mortality, combined with adverse market events, produces economic losses beyond the scope of
the risk management techniques employed.
Liquidity and Capital Resources
Overview
Our business and results of operations are materially affected by conditions in the global financial markets and the
economy generally due to our market presence in numerous countries, large investment portfolio and the sensitivity of our
insurance liabilities and derivatives to changing market factors. Changing conditions in the global financial markets and the
economy may affect our financing costs and market interest for our debt or equity securities. For further information
regarding market factors that could affect our ability to meet liquidity and capital needs, see “— Industry Trends” and “—
Investments — Current Environment.”
Liquidity Management
Based upon the strength of our franchise, diversification of our businesses, strong financial fundamentals and the
substantial funding sources available to us as described herein, we continue to believe we have access to ample liquidity to
meet business requirements under current market conditions and reasonably possible stress scenarios. We continuously
monitor and adjust our liquidity and capital plans for MetLife, Inc. and its subsidiaries in light of market conditions, as well
as changing needs and opportunities.
113
Table of Contents
Short-term Liquidity
We maintain a substantial short-term liquidity position, which was $16.4 billion and $12.4 billion at December 31,
2022 and 2021, respectively. Short-term liquidity includes cash and cash equivalents and short-term investments,
excluding assets that are pledged or otherwise committed, including amounts received in connection with securities
lending, repurchase agreements, derivatives, and secured borrowings, as well as amounts held in the closed block.
Liquid Assets
An integral part of our liquidity management includes managing our level of liquid assets, which was $180.4 billion
and $223.0 billion at December 31, 2022 and 2021, respectively. Liquid assets include cash and cash equivalents, short-
term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets
pledged or otherwise committed include amounts received in connection with securities lending, repurchase agreements,
derivatives, regulatory deposits, the collateral financing arrangement, funding agreements and secured borrowings, as
well as amounts held in the closed block.
Capital Management
We have established several senior management committees as part of our capital management process. These
committees, including the Capital Management Committee and the Enterprise Risk Committee (“ERC”), regularly review
actual and projected capital levels (under a variety of scenarios including stress scenarios) and our annual capital plan in
accordance with our capital policy. The Capital Management Committee is comprised of members of senior management,
including MetLife, Inc.’s Chief Financial Officer (“CFO”), Treasurer, and Chief Risk Officer (“CRO”). The ERC is also
comprised of members of senior management, including MetLife, Inc.’s CFO, CRO and Chief Investment Officer.
Our Board of Directors and senior management are directly involved in the development and maintenance of our
capital policy. The capital policy sets forth, among other things, minimum and target capital levels and the governance of
the capital management process. All capital actions, including proposed changes to the annual capital plan, capital targets
or capital policy, are reviewed by the Finance and Risk Committee of the Board of Directors prior to obtaining full Board
of Directors approval. The Board of Directors approves the capital policy and the annual capital plan and authorizes capital
actions, as required.
See “Risk Factors — Capital Risks — We May Not be Able to Pay Dividends or Repurchase Our Stock Due to Legal
and Regulatory Restrictions or Cash Buffer Needs” for information regarding restrictions on payment of dividends and
stock repurchases. See also Note 16 of the Notes to the Consolidated Financial Statements for information regarding
MetLife, Inc.’s common stock repurchase authorizations.
114
Table of Contents
The Company
Liquidity
Liquidity refers to the ability to generate adequate amounts of cash to meet our needs. We determine our liquidity
needs based on a rolling 12-month forecast by portfolio of invested assets which we monitor daily. We adjust the asset mix
and asset maturities based on this rolling 12-month forecast. To support this forecast, we conduct cash flow and stress
testing, which include various scenarios of the potential risk of early contractholder and policyholder withdrawal. We
include provisions limiting withdrawal rights on many of our products, including general account pension products sold to
employee benefit plan sponsors. Certain of these provisions prevent the customer from making withdrawals prior to the
maturity date of the product. In the event of significant cash requirements beyond anticipated liquidity needs, we have
various alternatives available depending on market conditions and the amount and timing of the liquidity need. These
available alternatives include cash flows from operations, sales of liquid assets, global funding sources including
commercial paper and various credit and committed facilities.
Under certain stressful market and economic conditions, our access to liquidity may deteriorate, or the cost to access
liquidity may increase. A downgrade in our credit or financial strength ratings could also negatively affect our
liquidity. See “— Rating Agencies.” If we require significant amounts of cash on short notice in excess of anticipated cash
requirements or if we are required to post or return cash collateral in connection with derivatives or our securities lending
program, we may have difficulty selling investments in a timely manner, be forced to sell them for less than we otherwise
would have been able to realize, or both. In addition, in the event of such forced sale, for securities in an unrealized loss
position, realized losses would be incurred on securities sold and impairments would be incurred, if there is a need to sell
securities prior to recovery, which may negatively impact our financial condition. See “Risk Factors — Investment Risks
— We May Have Difficulty Selling Holdings in Our Investment Portfolio or in Our Securities Lending Program in a
Timely Manner to Realize Their Full Value.”
All general account assets within a particular legal entity — other than those which may have been pledged to a
specific purpose — are generally available to fund obligations of the general account of that legal entity.
Capital
We manage our capital position to maintain our financial strength and credit ratings. See “— Rating Agencies” for
information regarding such ratings. Our capital position is supported by our ability to generate strong cash flows within our
operating companies and borrow funds at competitive rates, as well as by our demonstrated ability to raise additional
capital to meet operating and growth needs despite adverse market and economic conditions.
Statutory Capital and Dividends
Our U.S. insurance subsidiaries have statutory surplus well above levels to meet current regulatory requirements.
RBC requirements are used as minimum capital requirements by the NAIC and the state insurance departments to
identify companies that merit regulatory action. RBC is based on a formula calculated by applying factors to various
asset, premium, claim, expense and statutory reserve items. The formula takes into account the risk characteristics of the
insurer, including asset risk, insurance risk, interest rate risk, market risk and business risk and is calculated on an annual
basis. The formula is used as an early warning regulatory tool to identify possible inadequately capitalized insurers for
purposes of initiating regulatory action, and not as a means to rank insurers generally. These rules apply to most of our
U.S. insurance subsidiaries. State insurance laws provide insurance regulators the authority to require various actions by,
or take various actions against, insurers whose total adjusted capital does not meet or exceed certain RBC levels. As of
the date of the most recent annual statutory financial statements filed with insurance regulators, the total adjusted capital
of each of these subsidiaries subject to these requirements was in excess of each of those RBC levels.
As a Delaware corporation, American Life is subject to Delaware law; however, because it does not conduct
insurance business in Delaware or any other U.S. state, it is exempt from RBC requirements under Delaware law.
American Life’s operations are also regulated by applicable authorities of the jurisdictions in which it operates and is
subject to capital and solvency requirements in those jurisdictions.
115
Table of Contents
The amount of dividends that our insurance subsidiaries can pay to MetLife, Inc. or to other parent entities is
constrained by the amount of surplus we hold to maintain our ratings, which provides an additional margin for risk
protection and investment in our businesses. We proactively take actions to maintain capital consistent with these ratings
objectives, which may include adjusting dividend amounts and deploying financial resources from internal or external
sources of capital. Certain of these activities may require regulatory approval. Furthermore, the payment of dividends
and other distributions to MetLife, Inc. and other parent entities by their respective insurance subsidiaries is governed by
insurance laws and regulations. See “Business — Regulation — Insurance Regulation,” “— MetLife, Inc. — Liquidity
and Capital Sources — Dividends from Subsidiaries” and Note 16 of the Notes to the Consolidated Financial Statements.
Affiliated Captive Reinsurance Transactions
MLIC cedes specific policy classes, including term and universal life insurance, participating whole life insurance,
group life insurance and other business to various wholly-owned captive reinsurers. The reinsurance activities among
these affiliated companies are eliminated within our consolidated results of operations. The statutory reserves of such
affiliated captive reinsurers are supported by a combination of funds withheld assets, investment assets and letters of
credit issued by unaffiliated financial institutions. MetLife, Inc. has entered into various support agreements in
connection with the activities of these captive reinsurers. See Note 5 of the Notes to the MetLife, Inc. (Parent Company
Only) Condensed Financial Information included in Schedule II of the Financial Statement Schedules for further details
on certain of these support arrangements. MLIC has entered into reinsurance agreements with affiliated captive
reinsurers for risk and capital management purposes, as well as to manage statutory reserve requirements related to
universal life and term life insurance policies and other business.
The NYDFS continues to have a moratorium on new reserve financing transactions involving captive insurers. We
are not aware of any states other than New York implementing such a moratorium. While such a moratorium would not
impact our existing reinsurance agreements with captive reinsurers, a moratorium placed on the use of captives for new
reserve financing transactions could impact our ability to write certain products and/or impact our RBC ratios and ability
to deploy excess capital in the future. This could result in our need to increase prices, modify product features or limit the
availability of those products to our customers. While this affects insurers across the industry, it could adversely impact
our competitive position and our results of operations in the future. We continue to evaluate product modifications,
pricing structure and alternative means of managing risks, capital and statutory reserves and we expect the discontinued
use of captive reinsurance on new reserve financing transactions would not have a material impact on our future
consolidated financial results. See Note 6 of the Notes to the Consolidated Financial Statements for further information
on our reinsurance activities.
Rating Agencies
Rating agencies assign insurer financial strength ratings to MetLife, Inc.’s U.S. life insurance subsidiaries and credit
ratings to MetLife, Inc. and certain of its subsidiaries. Financial strength ratings represent the opinion of rating agencies
regarding the ability of an insurance company to pay obligations under insurance policies and contracts in accordance with
their terms and are not evaluations directed toward the protection of investors in MetLife, Inc.’s securities. Insurer financial
strength ratings are not statements of fact nor are they recommendations to purchase, hold or sell any security, contract or
policy. Each rating should be evaluated independently of any other rating.
Rating agencies use an “outlook statement” of “positive,” “stable,” ‘‘negative’’ or “developing” to indicate a medium-
or long-term trend in credit fundamentals which, if continued, may lead to a rating change. A rating may have a “stable”
outlook to indicate that the rating is not expected to change; however, a “stable” rating does not preclude a rating agency
from changing a rating at any time, without notice. Certain rating agencies assign rating modifiers such as “CreditWatch”
or “under review” to indicate their opinion regarding the potential direction of a rating. These ratings modifiers are
generally assigned in connection with certain events such as potential mergers, acquisitions, dispositions or material
changes in a company’s results, in order for the rating agency to perform its analysis to fully determine the rating
implications of the event.
116
Table of Contents
Our insurer financial strength ratings at the date of this filing are indicated in the following table. Outlook is stable
unless otherwise indicated. Additional information about financial strength ratings can be found on the websites of the
respective rating agencies.
Ratings Structure
American Life Insurance Company
Metropolitan Life Insurance Company
MetLife Insurance K.K. (MetLife Japan)
Metropolitan Tower Life Insurance Company
__________________
NR = Not rated
A.M. Best
Fitch
Moody’s
“A++ (Superior)”
to “S (Suspended)”
“AAA
(Exceptionally
Strong)” to “C
(Distressed)”
“Aaa (Highest
Quality)” to “C
(Lowest Rated)”
S&P
“AAA (Extremely
Strong)” to “SD
(Selective
Default)” or “D
(Default)”
NR
A+
NR
AA-
2nd of 16
4th of 19
NR
A+
NR
AA-
A1
5th of 21
Aa3
4th of 21
NR
Aa3
2nd of 16
4th of 19
4th of 21
AA-
4th of 21
AA-
4th of 21
AA-
4th of 21
AA-
4th of 21
Credit ratings indicate the rating agency’s opinion regarding a debt issuer’s ability to meet the terms of debt
obligations in a timely manner. They are important factors in our overall funding profile and ability to access certain types
of liquidity. The level and composition of regulatory capital at the subsidiary level and our equity capital are among the
many factors considered in determining our insurer financial strength ratings and credit ratings. Each agency has its own
capital adequacy evaluation methodology, and assessments are generally based on a combination of factors. In addition to
heightening the level of scrutiny that they apply to insurance companies, rating agencies have increased and may continue
to increase the frequency and scope of their credit reviews, may request additional information from the companies that
they rate and may change the capital and other requirements employed in the rating agency models for maintenance of
certain ratings levels.
A downgrade in the credit ratings or insurer financial strength ratings of MetLife, Inc. or its subsidiaries would likely
impact us in the following ways, including:
• impact our ability to generate cash flows from the sale of funding agreements and other capital market products
offered by our RIS business;
• impact the cost and availability of financing for MetLife, Inc. and its subsidiaries; and
• result in additional collateral requirements or other required payments under certain agreements, which are eligible
to be satisfied in cash or by posting investments held by the subsidiaries subject to the agreements. See “— Liquidity and
Capital Uses — Pledged Collateral.”
See also “Risk Factors — Economic Environment and Capital Markets Risks — We May Lose Business Due to a
Downgrade or a Potential Downgrade in Our Financial Strength or Credit Ratings.”
117
Table of Contents
Summary of the Company’s Primary Sources and Uses of Liquidity and Capital
Our primary sources and uses of liquidity and capital are summarized as follows:
Sources:
Operating activities, net
Net change in policyholder account balances
Net change in payables for collateral under securities loaned and other transactions
Long-term debt issued
Financing element on certain derivative instruments and other derivative related transactions, net
Other, net
Total sources
Uses:
Investing activities, net
Net change in payables for collateral under securities loaned and other transactions
Cash paid for other transactions with tenors greater than three months
Long-term debt repaid
Collateral financing arrangement repaid
Financing element on certain derivative instruments and other derivative related transactions, net
Years Ended December 31,
2022
2021
(In millions)
$
13,204 $
12,596
5,150
—
1,013
—
—
3,827
1,883
29
270
22
19,367
18,627
2,620
10,730
—
85
50
61
11,187
—
100
582
79
—
Treasury stock acquired in connection with share repurchases
3,326
4,303
Redemption of preferred stock
Preferred stock redemption premium
Dividends on preferred stock
Dividends on common stock
Other, net
Effect of change in foreign currency exchange rates on cash and cash equivalents
Total uses
Net increase (decrease) in cash and cash equivalents
Cash Flows from Operations
—
—
185
1,598
236
397
19,288
$
79 $
494
6
195
1,647
—
478
19,071
(444)
The principal cash inflows from our insurance activities come from insurance premiums, net investment income,
annuity considerations and deposit funds. The principal cash outflows are the result of various life insurance, annuity and
pension products, operating expenses and income tax, as well as interest expense.
Cash Flows from Investments
The principal cash inflows from our investment activities come from repayments of principal, proceeds from
maturities and sales of investments and settlements of freestanding derivatives. The principal cash outflows relate to
purchases of investments, issuances of policy loans and settlements of freestanding derivatives. In addition, cash inflows
and outflows relate to sales and purchases of businesses. We typically have a net cash outflow from investing activities
because cash inflows from insurance operations are reinvested in accordance with our ALM discipline to fund insurance
liabilities. We closely monitor and manage these risks through our comprehensive investment risk management process.
Cash Flows from Financing
The principal cash inflows from our financing activities come from issuances of debt and other securities, deposits
of funds associated with policyholder account balances and lending of securities. The principal cash outflows come from
repayments of debt and the collateral financing arrangement, payments of dividends on and repurchases or redemptions
of MetLife, Inc.’s securities, withdrawals associated with policyholder account balances and the return of securities on
loan.
118
Table of Contents
Liquidity and Capital Sources
In addition to the general description of liquidity and capital sources in “— Summary of the Company’s Primary
Sources and Uses of Liquidity and Capital,” the Company’s primary sources of liquidity and capital are set forth below.
Global Funding Sources
Liquidity is provided by a variety of global funding sources, including funding agreements, credit and committed
facilities and commercial paper. Capital is provided by a variety of global funding sources, including short-term and
long-term debt, the collateral financing arrangement, junior subordinated debt securities, preferred securities, equity
securities and equity-linked securities. MetLife, Inc. maintains a shelf registration statement with the SEC that permits
the issuance of public debt, equity and hybrid securities. As a “Well-Known Seasoned Issuer” under SEC rules, MetLife,
Inc.’s shelf registration statement provides for automatic effectiveness upon filing and has no stated issuance capacity.
The diversity of our global funding sources enhances our funding flexibility, limits dependence on any one market or
source of funds and generally lowers the cost of funds. Our primary global funding sources include:
Preferred Stock
See Note 16 of the Notes to the Consolidated Financial Statements.
Common Stock
See Note 16 of the Notes to the Consolidated Financial Statements.
Commercial Paper, Reported in Short-term Debt
MetLife, Inc. and MetLife Funding each have a commercial paper program that is supported by our Credit Facility
(see “— Credit and Committed Facilities”). MetLife Funding raises cash from its commercial paper program and uses
the proceeds to extend loans through MetLife Credit Corp., another subsidiary of MLIC, to affiliates in order to
enhance the financial flexibility and liquidity of these companies.
Policyholder Account Balances
See Notes 1 and 4 of the Notes to the Consolidated Financial Statements for a description of the components of
policyholder account balances. See “— Liquidity and Capital Uses — Insurance Liabilities” regarding the source and
uncertainties associated with the estimation of the contractual obligations related to future policy benefits and
policyholder account balances.
The sum of the estimated cash flows of $258.3 billion ($30.5 billion of which are estimated to occur in one year or
less) exceeds the liability amount of $203.1 billion included on the consolidated balance sheet principally due to (i) the
time value of money, which accounts for a substantial portion of the difference; (ii) differences in assumptions,
between the date the liabilities were initially established and the current date; and (iii) liabilities related to accounting
conventions, or which are not contractually due, which are excluded.
The estimated cash flows represent cash payments undiscounted as to interest and including assumptions related
to the receipt of future premiums and deposits; withdrawals, including unscheduled or partial withdrawals; policy
lapses; surrender charges; annuitization; mortality; future interest credited; policy loans and other contingent events as
appropriate for the respective product type. Such estimated cash payments are also presented net of estimated future
premiums on policies currently in-force and gross of any reinsurance recoverable. For obligations denominated in
foreign currencies, cash payments have been estimated using current spot foreign currency rates.
FHLBNY Funding Agreements, Reported in Policyholder Account Balances
Certain of our U.S. insurance subsidiaries are members of FHLBNY. For the years ended December 31, 2022 and
2021, we issued $29.9 billion and $34.0 billion, respectively, and repaid $30.8 billion and $34.5 billion, respectively,
of funding agreements with FHLBNY. At December 31, 2022 and 2021, total obligations outstanding under these
funding agreements were $14.9 billion and $15.8 billion, respectively. See Note 4 of the Notes to the Consolidated
Financial Statements.
119
Table of Contents
Special Purpose Entity Funding Agreements, Reported in Policyholder Account Balances
We issue fixed and floating rate funding agreements which are denominated in either U.S. dollars or foreign
currencies, to certain unconsolidated special purpose entities that have issued either debt securities or commercial
paper for which payment of interest and principal is secured by such funding agreements. For the years ended
December 31, 2022 and 2021, we issued $48.5 billion and $40.8 billion, respectively, and repaid $47.4 billion and
$41.2 billion, respectively, under such funding agreements. At December 31, 2022 and 2021, total obligations
outstanding under these funding agreements were $40.7 billion and $39.5 billion, respectively. See Note 4 of the Notes
to the Consolidated Financial Statements.
Federal Agricultural Mortgage Corporation Funding Agreements, Reported in Policyholder Account Balances
We have issued funding agreements to a subsidiary of Farmer Mac which are secured by a pledge of certain
eligible agricultural mortgage loans. For the years ended December 31, 2022 and 2021, we issued $625 million and
$425 million, respectively, and repaid $625 million and $750 million, respectively, under such funding agreements. At
both December 31, 2022 and 2021, total obligations outstanding under these funding agreements were $2.1 billion. See
Note 4 of the Notes to the Consolidated Financial Statements.
Debt Issuances
See Notes 13 and 22 of the Notes to the Consolidated Financial Statements for information on senior notes issued
by MetLife, Inc.
Credit and Committed Facilities
See Note 13 of the Notes to the Consolidated Financial Statements for information on credit and committed
facilities.
We have no reason to believe that our lending counterparties will be unable to fulfill their respective contractual
obligations under these facilities. As commitments under our credit and committed facilities may expire unused, these
amounts do not necessarily reflect our actual future cash funding requirements.
Outstanding Debt Under Global Funding Sources
The following table summarizes our outstanding debt at:
Short-term debt (1)
Long-term debt (2)
Collateral financing arrangement
Junior subordinated debt securities
__________________
December 31,
2022
2021
(In millions)
$
$
$
$
175 $
341
14,647 $
13,933
716 $
3,158 $
766
3,156
(1)
(2)
Includes $76 million and $241 million of short-term debt that is non-recourse to MetLife, Inc. and MLIC, subject to
customary exceptions, at December 31, 2022 and 2021, respectively. Certain subsidiaries have pledged assets to secure
this debt.
Includes $447 million and $482 million of long-term debt that is non-recourse to MetLife, Inc. and MLIC, subject to
customary exceptions, at December 31, 2022 and 2021, respectively. Certain investment subsidiaries have pledged
assets to secure this debt.
Debt and Facility Covenants
Certain of our debt instruments and committed facilities, as well as our Credit Facility, contain various
administrative, reporting, legal and financial covenants. We believe we were in compliance with all applicable financial
covenants at December 31, 2022.
Dispositions
See “— Acquisitions and Dispositions” and Note 3 of the Notes to the Consolidated Financial Statements for
information on the Company’s business dispositions.
120
Table of Contents
Liquidity and Capital Uses
In addition to the general description of liquidity and capital uses in “— Summary of the Company’s Primary Sources
and Uses of Liquidity and Capital” the Company’s primary uses of liquidity and capital are set forth below.
Preferred Stock Redemption
See Note 16 of the Notes to the Consolidated Financial Statements for information on the redemption of Series C
preferred stock.
Common Stock Repurchases
See Note 16 of the Notes to the Consolidated Financial Statements for information relating to authorizations by the
Board of Directors to repurchase MetLife, Inc. common stock, amounts of common stock repurchased pursuant to such
authorizations for the years ended December 31, 2022 and 2021, and the amount remaining under such authorizations at
December 31, 2022.
Common stock repurchases are subject to the discretion of our Board of Directors and will depend upon our capital
position, liquidity, financial strength and credit ratings, general market conditions, the market price of MetLife, Inc.’s
common stock compared to management’s assessment of the stock’s underlying value, applicable regulatory approvals,
and other legal and accounting factors. Restrictions on the payment of dividends that may arise under so-called
“Dividend Stopper” provisions would also restrict MetLife, Inc.’s ability to repurchase common stock. See “—
Dividends” for information on these restrictions. See also “Risk Factors — Capital Risks — We May Not be Able to Pay
Dividends or Repurchase Our Stock Due to Legal and Regulatory Restrictions or Cash Buffer Needs.”
Dividends
For the years ended December 31, 2022 and 2021, MetLife, Inc. paid dividends on its preferred stock of $185
million and $195 million, respectively. For both the years ended December 31, 2022 and 2021, MetLife, Inc. paid
dividends on its common stock of $1.6 billion.
The declaration and payment of common stock dividends are subject to the discretion of our Board of Directors, and
will depend on MetLife, Inc.’s financial condition, results of operations, cash requirements, future prospects, regulatory
restrictions on the payment of dividends by MetLife, Inc.’s insurance subsidiaries and other factors deemed relevant by
the Board.
See Note 16 of the Notes to the Consolidated Financial Statements for additional information, including the
calculation and timing of these dividend payments.
“Dividend Stopper” Provisions in MetLife’s Preferred Stock and Junior Subordinated Debentures
MetLife, Inc.’s preferred stock and junior subordinated debentures contain “dividend stopper” provisions under
which MetLife, Inc. may not pay dividends on instruments junior to those instruments if payments have not been made
on those instruments. Moreover, MetLife, Inc.’s Series A preferred stock and its junior subordinated debentures
contain provisions that would limit the payment of dividends or interest on those instruments if MetLife, Inc. fails to
meet certain tests (“Trigger Events”), to an amount not greater than the net proceeds from sales of common stock and
other specified instruments during a period preceding the dividend declaration date or the interest payment date, as
applicable. If such proceeds were under the circumstances insufficient to make such payments on those instruments,
the dividend stopper provisions affecting common stock (and preferred stock, as applicable) would come into effect.
A “Trigger Event” would occur if:
•
•
the RBC ratio of MetLife’s largest U.S. insurance subsidiaries in the aggregate (as defined in the applicable
instrument) were to be less than 175% of the company action level based on the subsidiaries’ prior year annual
financial statements filed (generally around March 1) with state insurance commissioners; or
at the end of a quarter (“Final Quarter End Test Date”), consolidated GAAP net income for the four-quarter period
ending two quarters before such quarter-end (the “Preliminary Quarter End Test Date”) is zero or a negative amount
and the consolidated GAAP stockholders’ equity, minus AOCI, (the “adjusted stockholders’ equity amount”), as of
the Final Quarter End Test Date and the Preliminary Quarter End Test Date, declined by 10% or more from its level
10 quarters before the Final Quarter End Test Date (the “Benchmark Quarter End Test Date”).
121
Table of Contents
Once a Trigger Event occurs for a Final Quarter End Test Date, the suspension of payments of dividends and
interest (in the absence of sufficient net proceeds from the issuance of certain securities during specified periods)
would continue until there is no Trigger Event at a subsequent Final Quarter End Test Date, and, if the test in the
second paragraph above caused the Trigger Event, the adjusted stockholders’ equity amount is no longer 10% or more
below its level at the Benchmark Quarter End Test Date that is associated with the Trigger Event. In the case of
successive Trigger Events, the suspension would continue until MetLife satisfies these conditions for each of the
Trigger Events.
The junior subordinated debentures further provide that MetLife, Inc. may, at its option and provided that certain
conditions are met, elect to defer payment of interest. See Note 15 of the Notes to the Consolidated Financial
Statements. Any such elective deferral would trigger the dividend stopper provisions.
Further, MetLife, Inc. is a party to certain replacement capital covenants which limit its ability to eliminate these
restrictions through the repayment, redemption or purchase of the junior subordinated debentures by requiring
MetLife, Inc., with some limitations, to receive cash proceeds during a specified period from the sale of specified
replacement securities prior to any repayment, redemption or purchase. See Note 15 of the Notes to the Consolidated
Financial Statements for a description of such covenants.
Debt Repayments
For the years ended December 31, 2022 and 2021, following regulatory approval, MetLife Reinsurance Company of
Charleston, a wholly-owned subsidiary of MetLife, Inc., repurchased and canceled $50 million and $79 million,
respectively, in aggregate principal amount of its surplus notes, which were reported in collateral financing arrangement
on the consolidated balance sheets. See Notes 13 and 14 of the Notes to the Consolidated Financial Statements for
further information on long-term and short-term debt and the collateral financing arrangement, respectively.
Debt Repurchases, Redemptions and Exchanges
We may from time to time seek to retire or purchase our outstanding debt through cash purchases, redemptions and/
or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Any such
repurchases, redemptions, or exchanges will be dependent upon several factors, including our liquidity requirements,
contractual restrictions, general market conditions, and applicable regulatory, legal and accounting factors. Whether or
not to repurchase or redeem any debt and the size and timing of any such repurchases or redemptions will be determined
at our discretion.
See Notes 13 and 22 of the Notes to the Consolidated Financial Statements for information on the redemption and
cancellation of senior notes.
Support Agreements
MetLife, Inc. and several of its subsidiaries (each, an “Obligor”) are parties to various capital support commitments
and guarantees with subsidiaries. Under these arrangements, each Obligor has agreed to cause the applicable entity to
meet specified capital and surplus levels or has guaranteed certain contractual obligations. We anticipate that in the event
these arrangements place demands upon us, there will be sufficient liquidity and capital to enable us to meet such
demands. See Note 5 of the Notes to the MetLife, Inc. (Parent Company Only) Condensed Financial Information
included in Schedule II of the Financial Statement Schedules. See also “Guarantees” in Note 21 of the Notes to the
Consolidated Financial Statements.
Insurance Liabilities
Insurance liabilities include future policy benefits, other policy-related balances, policyholder dividends payable and
the policyholder dividend obligation, which are all reported on the consolidated balance sheet and are more fully
described in Notes 1 and 4 of the Notes to the Consolidated Financial Statements. The sum of the estimated cash flows of
$360.8 billion ($21.2 billion of which are estimated to occur in one year or less) exceeds the liability amounts of $224.3
billion included on the consolidated balance sheet principally due to (i) the time value of money, which accounts for a
substantial portion of the difference; (ii) differences in assumptions, most significantly mortality, between the date the
liabilities were initially established and the current date; and (iii) liabilities related to accounting conventions, or which
are not contractually due, which are excluded.
122
Table of Contents
The estimated cash flows reflect future estimated cash payments and (i) are based on mortality, morbidity, lapse and
other assumptions comparable with our experience and expectations of future payment patterns; and (ii) consider future
premium receipts on current policies in-force. Estimated cash payments are undiscounted as to interest, net of estimated
future premiums on in-force policies and gross of any reinsurance recoverable. Payment of amounts related to
policyholder dividends left on deposit are projected based on assumptions of policyholder withdrawal activity.
Actual cash payments may differ significantly from the liabilities as presented on the consolidated balance sheet and
the estimated cash payments due to differences between actual experience and the assumptions used in the establishment
of these liabilities and the estimation of these cash payments.
For the majority of our insurance operations, estimated contractual obligations for future policy benefits and
policyholder account balances are derived from the annual asset adequacy analysis used to develop actuarial opinions of
statutory reserve adequacy for state regulatory purposes. These cash flows are materially representative of the cash flows
under GAAP. See “— Liquidity and Capital Sources — Global Funding Sources — Policyholder Account Balances.”
Liabilities arising from our insurance activities primarily relate to benefit payments under various life insurance,
annuity and group pension products, as well as payments for policy surrenders, withdrawals and loans. For annuity or
deposit type products, surrender or lapse behavior differs somewhat by segment. In the MetLife Holdings segment,
which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. For the years
ended December 31, 2022 and 2021, general account surrenders and withdrawals from annuity products were
$1.5 billion and $1.4 billion, respectively. In the RIS business within the U.S. segment, which includes pension risk
transfers, bank-owned life insurance and other fixed annuity contracts, as well as funding agreements and other capital
market products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. With
regard to the RIS business products that provide customers with limited rights to accelerate payments, at December 31,
2022, there were funding agreements totaling $127 million that could be put back to the Company.
Pledged Collateral
We pledge collateral to, and have collateral pledged to us by, counterparties in connection with our derivatives. At
December 31, 2022 and 2021, we had received pledged cash collateral from counterparties of $5.7 billion and
$7.5 billion, respectively. At December 31, 2022 and 2021, we had pledged cash collateral to counterparties of
$423 million and $142 million, respectively. See Note 9 of the Notes to the Consolidated Financial Statements for
additional information about collateral pledged to us, collateral we pledge and derivatives subject to credit contingent
provisions.
We pledge collateral and have had collateral pledged to us, and may be required from time to time to pledge
additional collateral or be entitled to have additional collateral pledged to us, in connection with the collateral financing
arrangement related to the reinsurance of closed block liabilities. See Note 14 of the Notes to the Consolidated Financial
Statements.
We pledge collateral from time to time in connection with funding agreements and advance agreements. See Note 4
of the Notes to the Consolidated Financial Statements.
Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian Administered Programs
See “— Investments — Securities Lending Transactions, Repurchase Agreements and Third-Party Custodian
Administered Programs.”
Litigation
We establish liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been
incurred and the amount of the loss can be reasonably estimated. For material matters where a loss is believed to be
reasonably possible but not probable, no accrual is made but we disclose the nature of the contingency and an aggregate
estimate of the reasonably possible range of loss in excess of amounts accrued, when such an estimate can be made. It is
not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters
referred to herein, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Given the
large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is
possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on our
consolidated net income or cash flows in particular quarterly or annual periods. See Note 21 of the Notes to the
Consolidated Financial Statements.
123
Table of Contents
Acquisitions
See “— Acquisitions and Dispositions” and Note 3 of the Notes to the Consolidated Financial Statements for
information on the Company’s business acquisitions.
MetLife, Inc.
Liquidity and Capital Management
Liquidity and capital are managed to preserve stable, reliable and cost-effective sources of cash to meet all current and
future financial obligations and are provided by a variety of sources, including a portfolio of liquid assets, a diversified mix
of short- and long-term funding sources from the wholesale financial markets and the ability to borrow through credit and
committed facilities. Liquidity is monitored through the use of internal liquidity risk metrics, including the composition and
level of the liquid asset portfolio, timing differences in short-term cash flow obligations, access to the financial markets for
capital and debt transactions and exposure to contingent draws on MetLife, Inc.’s liquidity. MetLife, Inc. is an active
participant in the global financial markets through which it obtains a significant amount of funding. These markets, which
serve as cost-effective sources of funds, are critical components of MetLife, Inc.’s liquidity and capital management.
Decisions to access these markets are based upon relative costs, prospective views of balance sheet growth and a targeted
liquidity profile and capital structure. A disruption in the financial markets could limit MetLife, Inc.’s access to liquidity.
MetLife, Inc.’s ability to maintain regular access to competitively priced wholesale funds is fostered by its current
credit ratings from the major credit rating agencies. We view our capital ratios, credit quality, stable and diverse earnings
streams, diversity of liquidity sources and our liquidity monitoring procedures as critical to retaining such credit ratings.
See “— The Company — Rating Agencies.”
Liquidity
For a summary of MetLife, Inc.’s liquidity, see “— The Company — Liquidity.”
Capital
For a summary of MetLife, Inc.’s capital, see “— The Company — Capital.” See also “— The Company — Liquidity
and Capital Uses — Common Stock Repurchases” for information regarding MetLife, Inc.’s common stock repurchases.
Liquid Assets
At both December 31, 2022 and 2021, MetLife holding companies had $5.4 billion in liquid assets. Of these amounts,
$4.5 billion and $4.2 billion were held by MetLife, Inc. and $909 million and $1.2 billion were held by other MetLife
holding companies at December 31, 2022 and 2021, respectively. Liquid assets include cash and cash equivalents, short-
term investments and publicly-traded securities, excluding assets that are pledged or otherwise committed. Assets pledged
or otherwise committed include amounts received in connection with derivatives and a collateral financing arrangement.
Liquid assets held in non-U.S. holding companies are generated in part through dividends from non-U.S. insurance
operations. Such dividends are subject to local insurance regulatory requirements, as discussed in “— Liquidity and Capital
Sources — Dividends from Subsidiaries.”
See “— Executive Summary — Consolidated Company Outlook,” for the targeted level of liquid assets at the holding
companies.
124
Table of Contents
MetLife, Inc. and Other MetLife Holding Companies Sources and Uses of Liquid Assets and Sources and Uses of Liquid
Assets included in Free Cash Flow
MetLife, Inc.’s sources and uses of liquid assets, as well as sources and uses of liquid assets included in free cash
flow are summarized as follows.
Year Ended December 31, 2022
Year Ended December 31, 2021
Sources and Uses
of Liquid Assets
Sources and Uses
of Liquid Assets
Included in Free
Cash Flow
Sources and Uses
of Liquid Assets
Sources and Uses
of Liquid Assets
Included in Free
Cash Flow
(In millions)
MetLife, Inc. (Parent Company Only)
Sources:
Dividends and returns of capital from subsidiaries (1)
$
5,176
$
5,176
$
4,837
$
Long-term debt issued (2)
Other, net (3), (4)
Total sources
Uses:
Capital contributions to subsidiaries
Long-term debt repaid — unaffiliated
Interest paid on debt and financing arrangements — unaffiliated
Dividends on common stock
Treasury stock acquired in connection with share repurchases
Dividends on preferred stock
Issuances of and (repayments on) loans to subsidiaries and related interest, net (5)
Redemption of preferred stock and preferred stock redemption premium
Total uses
Net increase (decrease) in liquid assets, MetLife, Inc. (Parent Company Only)
Liquid assets, beginning of year
Liquid assets, end of year
Free Cash Flow, MetLife, Inc. (Parent Company Only)
Net cash provided by operating activities, MetLife, Inc. (Parent Company Only)
$
$
1,000
92
6,268
5
—
764
1,598
3,326
185
94
—
5,972
296
4,177
4,473
4,428
1,000
44
6,220
5
—
764
—
—
185
94
—
1,048
5,172
$
$
—
3,865
8,702
88
500
795
1,647
4,303
195
92
500
8,120
582
3,595
4,177
3,757
Other MetLife Holding Companies
Sources:
Dividends and returns of capital from subsidiaries
$
1,410
$
1,410
$
2,077
$
Total sources
Uses:
Capital contributions to subsidiaries
Repayments on and (issuance of) loans to subsidiaries and affiliates and related interest, net
Dividends and returns of capital to MetLife, Inc.
Other, net
Total uses
Net increase (decrease) in liquid assets, Other MetLife Holding Companies
Liquid assets, beginning of year
Liquid assets, end of year
Free Cash Flow, Other MetLife Holding Companies
Net increase (decrease) in liquid assets, All Holding Companies
Free Cash Flow, All Holding Companies (6)
__________________
1,410
1,410
2,077
87
5
1,434
212
1,738
(328)
1,238
910
(32)
$
$
87
5
1,434
390
1,916
(506)
$
$
24
9
1,300
379
1,712
365
873
1,238
947
4,837
—
(156)
4,681
88
—
795
—
—
195
92
—
1,170
3,511
2,077
2,077
24
9
1,300
420
1,753
324
$
4,666
$
3,835
(1)
Dividends and returns of capital to MetLife, Inc. included $3.8 billion and $3.5 billion from operating subsidiaries and
$1.4 billion and $1.3 billion from other MetLife holding companies for the years ended December 31, 2022 and 2021,
respectively.
125
Table of Contents
(2)
(3)
(4)
(5)
Included in free cash flow is the portion of long-term debt issued that represents incremental debt to be at or below
target leverage ratios.
Other, net includes $129 million and ($18) million of net receipts (payments) by MetLife, Inc. to and from subsidiaries
under a tax sharing agreement and tax payments to tax agencies for the years ended December 31, 2022 and 2021,
respectively.
Also, included in other, net is $0 and $3.9 billion from sales of businesses for the years ended December 31, 2022 and
2021, respectively.
See MetLife, Inc. (Parent Company Only) Condensed Statements of Cash Flows included in Schedule II of the
Financial Statement Schedules for information regarding the source of liquid assets from receipts on loans to
subsidiaries (excluding interest) and the use of liquid assets related to the issuances of loans to subsidiaries (excluding
interest).
(6)
See “— Non-GAAP and Other Financial Disclosures” for the reconciliation of net cash provided by operating
activities of MetLife, Inc. to free cash flow of all holding companies.
Sources and Uses of Liquid Assets of MetLife, Inc.
The primary sources of MetLife, Inc.’s liquid assets are dividends and returns of capital from subsidiaries, issuances
of long-term debt, issuances of common and preferred stock, and net receipts from subsidiaries under a tax sharing
agreement. MetLife, Inc.’s insurance subsidiaries are subject to regulatory restrictions on the payment of dividends
imposed by the regulators of their respective domiciles. See “— Liquidity and Capital Sources — Dividends from
Subsidiaries.”
The primary uses of MetLife, Inc.’s liquid assets are principal and interest payments on long-term debt, dividends on
and repurchases of common and preferred stock, capital contributions to subsidiaries, funding of business acquisitions,
income taxes and operating expenses. MetLife, Inc. is party to various capital support commitments and guarantees with
certain of its subsidiaries. See “— Liquidity and Capital Uses — Support Agreements.”
In addition, MetLife, Inc. issues loans to subsidiaries or subsidiaries issue loans to MetLife, Inc. Accordingly,
changes in MetLife, Inc. liquid assets include issuances of loans to subsidiaries, proceeds of loans from subsidiaries and
the related repayment of principal and payment of interest on such loans. See “— Liquidity and Capital Sources —
Affiliated Long-term Debt” and “— Liquidity and Capital Uses — Affiliated Capital and Debt Transactions.”
Sources and Uses of Liquid Assets of Other MetLife Holding Companies
The primary sources of liquid assets of other MetLife holding companies are dividends, returns of capital and
remittances from their subsidiaries and branches, principally non-U.S. insurance companies; capital contributions
received; receipts of principal and interest on loans to subsidiaries and affiliates and borrowings from subsidiaries and
affiliates. MetLife, Inc.’s non-U.S. operations are subject to regulatory restrictions on the payment of dividends imposed
by local regulators. See “— Liquidity and Capital Sources — Dividends from Subsidiaries.”
The primary uses of liquid assets of other MetLife holding companies are capital contributions paid to their
subsidiaries and branches, principally non-U.S. insurance companies; loans to subsidiaries and affiliates; principal and
interest paid on loans from subsidiaries and affiliates; dividends and returns of capital to MetLife, Inc. and the following
items, which are reported within other, net: business acquisitions; and operating expenses.
Liquidity and Capital Sources
In addition to the description of liquidity and capital sources in “— The Company — Summary of the Company’s
Primary Sources and Uses of Liquidity and Capital” and “— The Company — Liquidity and Capital Sources,” MetLife,
Inc.’s primary sources of liquidity and capital are set forth below.
126
Table of Contents
Dividends from Subsidiaries
MetLife, Inc. relies, in part, on dividends from its subsidiaries to meet its cash requirements. MetLife, Inc.’s
insurance subsidiaries are subject to regulatory restrictions on the payment of dividends imposed by the regulators of
their respective domiciles. See Note 16 of the Notes to the Consolidated Financial Statements. The dividend limitation
for U.S. insurance subsidiaries is generally based on the surplus to policyholders at the end of the immediately preceding
calendar year and statutory net gain from operations for the immediately preceding calendar year. Statutory accounting
practices, as prescribed by insurance regulators of various states in which we conduct business, differ in certain respects
from accounting principles used in financial statements prepared in conformity with GAAP. The significant differences
relate to the treatment of DAC, certain deferred income tax, required investment liabilities, statutory reserve calculation
assumptions, goodwill and surplus notes.
The table below sets forth the dividends permitted to be paid by MetLife, Inc.’s primary U.S. insurance subsidiaries
without insurance regulatory approval and the actual dividends paid:
Company
2023
Permitted
Without
Approval (1)
Paid (2)
2022
Permitted
Without
Approval (1)
(In millions)
2021
Permitted
Without
Approval (1)
Paid (2)
Metropolitan Life Insurance Company
American Life Insurance Company
Metropolitan Property and Casualty Insurance Company
Metropolitan Tower Life Insurance Company
$
$
$
2,471 $ 3,539 $
499 $ 1,289 $
N/A
189 $ — $
N/A
3,539 $ 3,393
554 $ 1,135
N/A $
163 $ —
$
$
35 (3) $
$
3,393
800
222
82
__________________
(1)
(2)
(3)
Reflects dividend amounts that may be paid during the relevant year without prior regulatory approval. However,
because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a
specified date during such year, some or all of such dividends may require regulatory approval.
Reflects all amounts paid, including those where regulatory approval was obtained as required.
Consists of the stock of a subsidiary paid to MetLife, Inc. See Note 3 of the Notes to the Consolidated Financial
Statements for information on the Company’s business dispositions.
In addition to the amounts presented in the table above, for the years ended December 31, 2022 and 2021, MetLife,
Inc. also received from certain other subsidiaries cash dividends of $340 million and $302 million, respectively, as well
as cash returns of capital of $8 million and $13 million, respectively.
The dividend capacity of our non-U.S. operations is subject to similar restrictions established by the local regulators.
The non-U.S. regulatory regimes also commonly limit dividend payments to the parent company to a portion of the
subsidiary’s prior year statutory income, as determined by the local accounting principles. The regulators of our non-
U.S. operations, including the FSA, may also limit or not permit profit repatriations or other transfers of funds to the U.S.
if such transfers are deemed to be detrimental to the solvency or financial strength of the non-U.S. operations, or for
other reasons. Most of our non-U.S. subsidiaries are second tier subsidiaries which are owned by various non-U.S.
holding companies. The capital and rating considerations applicable to our first tier subsidiaries may also impact the
dividend flow into MetLife, Inc.
We proactively manage target and excess capital levels and dividend flows and forecast local capital positions as
part of the financial planning cycle. The dividend capacity of certain U.S. and non-U.S. subsidiaries is also subject to
business targets in excess of the minimum capital necessary to maintain the desired rating or level of financial strength in
the relevant market. See “Risk Factors — Capital Risks — Our Subsidiaries May be Unable to Pay Dividends, a Major
Component of Holding Company Free Cash Flow” and Note 16 of the Notes to the Consolidated Financial Statements.
Affiliated Long-term Debt
See “Senior Notes — Affiliated” in Note 4 of the Notes to the MetLife, Inc. (Parent Company Only) Condensed
Financial Information included in Schedule II of the Financial Statement Schedules for information on affiliated long-
term debt.
Collateral Financing Arrangement and Junior Subordinated Debt Securities
For information on MetLife, Inc.’s collateral financing arrangement and junior subordinated debt securities, see
Notes 14 and 15 of the Notes to the Consolidated Financial Statements, respectively.
127
Table of Contents
Credit and Committed Facilities
See Note 13 of the Notes to the Consolidated Financial Statements for further information regarding the Company’s
Credit Facility and certain committed facilities.
Long-term Debt Outstanding
The following table summarizes the outstanding long-term debt of MetLife, Inc. at:
Long-term debt — unaffiliated
Long-term debt — affiliated (1), (2)
Junior subordinated debt securities
__________________
December 31,
2022
2021
(In millions)
$
$
$
13,588 $
12,814
1,676 $
2,465 $
1,884
2,463
(1)
(2)
In December 2021, ¥54.6 billion 3.1350% senior unsecured notes issued to various subsidiaries matured and were
refinanced with the following senior unsecured notes issued to various subsidiaries: (i) ¥12.2 billion 1.588% due
December 2026, (ii) ¥19.1 billion 1.7185% due December 2028 and (iii) ¥23.3 billion 1.850% due December 2031.
In July 2021, ¥53.7 billion 2.9725% senior unsecured notes issued to various subsidiaries matured and were refinanced
with the following senior unsecured notes issued to various subsidiaries: (i) ¥13.7 billion 1.610% due July 2026, (ii)
¥14.3 billion 1.755% due July 2028 and (iii) ¥25.7 billion 1.852% due July 2031.
Debt and Facility Covenants
Certain of MetLife, Inc.’s debt instruments and committed facilities, as well as its Credit Facility, contain various
administrative, reporting, legal and financial covenants. MetLife, Inc. believes it was in compliance with all applicable
financial covenants at December 31, 2022.
Dispositions
See Note 3 of the Notes to the Consolidated Financial Statements for information on MetLife, Inc.’s business
dispositions.
Liquidity and Capital Uses
The primary uses of liquidity of MetLife, Inc. include debt service, cash dividends on common and preferred stock,
capital contributions to subsidiaries, common stock, preferred stock and debt repurchases and/or redemptions, payment of
general operating expenses and acquisitions. Based on our analysis and comparison of our current and future cash inflows
from the dividends we receive from subsidiaries that are permitted to be paid without prior insurance regulatory approval,
our investment portfolio and other cash flows and anticipated access to the capital markets, we believe there will be
sufficient liquidity and capital to enable MetLife, Inc. to make payments on debt, pay cash dividends on its common and
preferred stock, contribute capital to its subsidiaries, repurchase its common stock and certain of its other securities, pay all
general operating expenses and meet its cash needs under current market conditions and reasonably possible stress
scenarios.
In addition to the description of liquidity and capital uses in “— The Company — Liquidity and Capital Uses,”
MetLife, Inc.’s primary uses of liquidity and capital are set forth below.
Affiliated Capital and Debt Transactions
For the years ended December 31, 2022 and 2021, excluding acquisitions, MetLife, Inc. invested a net amount of
$14 million and $111 million, respectively, in various subsidiaries.
MetLife, Inc. lends funds, as necessary, through credit agreements or otherwise to its subsidiaries and affiliates,
some of which are regulated, to meet their capital requirements or to provide liquidity. MetLife, Inc. had loans to
subsidiaries outstanding of $95 million and $35 million at December 31, 2022 and 2021, respectively.
Debt Repayments
For information on MetLife, Inc.’s debt repayments, see “— The Company — Liquidity and Capital Uses — Debt
Repayments.” MetLife, Inc. intends to repay, redeem or refinance, in whole or in part, all the debt that is due in 2023.
128
Table of Contents
Maturities of Senior Notes
The following table summarizes MetLife, Inc.’s outstanding senior notes by year of maturity, excluding any
premium or discount and unamortized issuance costs, at December 31, 2022:
Year of Maturity
Unaffiliated:
2023
2024
2024
2025
2025
2026
2029 - 2052
Affiliated:
2023
2025
2026
2026
2026
2028 - 2031
Principal
(In millions)
Interest Rate
$
$
$
$
$
$
$
$
$
$
$
$
$
1,000
1,000
421
500
500
191
4.37%
3.60%
5.38%
3.00%
3.60%
0.50%
10,059 Ranging from 0.77% to 6.50%
283
250
121
104
93
825 Ranging from 1.72% to 1.85%
1.60%
6.56%
1.64%
1.61%
1.59%
See Note 22 of the Notes to the Consolidated Financial Statements for information on the redemption and
cancellation of senior notes subsequent to December 31, 2022.
Support Agreements
MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. See
Note 5 of the Notes to the MetLife, Inc. (Parent Company Only) Condensed Financial Information included in Schedule
II of the Financial Statement Schedules.
Acquisitions
See Note 3 of the Notes to the Consolidated Financial Statements for information regarding the acquisition of
Versant Health.
Adopted Accounting Pronouncements
See Note 1 of the Notes to the Consolidated Financial Statements.
Future Adoption of Accounting Pronouncements
See Note 1 of the Notes to the Consolidated Financial Statements.
129
Table of Contents
Non-GAAP and Other Financial Disclosures
In this report, the Company presents certain measures of its performance on a consolidated and segment basis that are not
calculated in accordance with GAAP. We believe that these non-GAAP financial measures enhance the understanding for the
Company and our investors of our performance by highlighting the results of operations and the underlying profitability
drivers of our business. Segment-specific financial measures are calculated using only the portion of consolidated results
attributable to that specific segment.
The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable
financial measures calculated in accordance with GAAP:
Non-GAAP financial measures:
(i)
(ii)
(iii)
adjusted premiums, fees and other revenues
adjusted earnings
adjusted earnings available to common
shareholders
free cash flow of all holding companies
(iv)
(v)
adjusted net investment income
Comparable GAAP financial measures:
(i)
(ii)
(iii) net income (loss) available to MetLife, Inc.’s common
premiums, fees and other revenues
net income (loss)
shareholders
(iv) MetLife, Inc. (parent company only) net cash provided
by (used in) operating activities
(v) net investment income
Any of these financial measures shown on a constant currency basis reflect the impact of changes in foreign currency
exchange rates and are calculated using the average foreign currency exchange rates for the most recent period and applied to
the comparable prior period (“constant currency basis”).
Reconciliations of these non-GAAP financial measures to the most directly comparable historical GAAP financial
measures are included in “— Results of Operations” and “— Investments.” Reconciliations of these non-GAAP measures to
the most directly comparable GAAP measures are not accessible on a forward-looking basis because we believe it is not
possible without unreasonable effort to provide other than a range of net investment gains and losses and net derivative gains
and losses, which can fluctuate significantly within or outside the range and from period to period and may have a material
impact on net income.
Our definitions of non-GAAP and other financial measures discussed in this report may differ from those used by other
companies.
Adjusted earnings and related measures:
•
•
•
adjusted earnings;
adjusted earnings available to common shareholders; and
adjusted earnings available to common shareholders on a constant currency basis.
These measures are used by management to evaluate performance and allocate resources. Consistent with GAAP
guidance for segment reporting, adjusted earnings and components of, or other financial measures based on, adjusted
earnings are also our GAAP measures of segment performance. Adjusted earnings and other financial measures based on
adjusted earnings are also the measures by which senior management’s and many other employees’ performance is evaluated
for the purposes of determining their compensation under applicable compensation plans. Adjusted earnings and other
financial measures based on adjusted earnings allow analysis of our performance relative to our business plan and facilitate
comparisons to industry results.
Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. Adjusted loss is defined as
negative adjusted earnings. Adjusted earnings available to common shareholders is defined as adjusted earnings less preferred
stock dividends. For information relating to adjusted revenues and adjusted expenses, see “Financial Measures and Segment
Accounting Policies” in Note 2 of the Notes to the Consolidated Financial Statements.
In addition, adjusted earnings available to common shareholders excludes the impact of preferred stock redemption
premium, which is reported as a reduction to net income (loss) available to MetLife, Inc.’s common shareholders.
130
Table of Contents
Return on equity, allocated equity and related measures:
•
•
•
•
•
Total MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA, is defined as total MetLife,
Inc.’s common stockholders’ equity, excluding the net unrealized investment gains (losses) and defined benefit plans
adjustment components of AOCI, net of income tax.
Return on MetLife, Inc.’s common stockholders’ equity: net income (loss) available to MetLife, Inc.’s common
shareholders divided by MetLife, Inc.’s average common stockholders’ equity.
Adjusted return on MetLife, Inc.’s common stockholders’ equity is defined as adjusted earnings available to
common shareholders divided by MetLife, Inc.’s average common stockholders’ equity.
Adjusted return on MetLife, Inc.’s common stockholders’ equity, excluding AOCI other than FCTA, is defined as
adjusted earnings available to common shareholders divided by MetLife, Inc.’s average common stockholders’
equity, excluding AOCI other than FCTA.
Allocated equity is the portion of MetLife, Inc.’s common stockholders’ equity that management allocates to each of
its segments and sub-segments based on local capital requirements and economic capital. See “— Risk Management
— Economic Capital.” Allocated equity excludes the impact of AOCI other than FCTA.
The above measures represent a level of equity consistent with the view that, in the ordinary course of business, we do
not plan to sell most investments for the sole purpose of realizing gains or losses.
Expense ratio and direct expense ratio:
•
•
•
Expense ratio: other expenses, net of capitalization of DAC, divided by premiums, fees and other revenues.
Direct expense ratio: adjusted direct expenses divided by adjusted premiums, fees and other revenues. Direct
expenses are comprised of employee-related costs, third party staffing costs, and general and administrative
expenses.
Direct expense ratio, excluding total notable items related to direct expenses and pension risk transfers: adjusted
direct expenses excluding total notable items related to direct expenses, divided by adjusted premiums, fees and
other revenues, excluding pension risk transfers.
The following additional information is relevant to an understanding of our performance results and outlook:
• We sometimes refer to sales activity for various products. These sales statistics do not correspond to revenues under
GAAP, but are used as relevant measures of business activity. Further, sales statistics for our Latin America, Asia
and EMEA segments are on a constant currency basis.
•
Near-term represents one to three years.
• We refer to observable forward yield curves as of a particular date in connection with making our estimates for
future results. The observable forward yield curves at a given time are based on implied future interest rates along a
range of interest rate durations. This includes the 10-year U.S. Treasury rate which we use as a benchmark rate to
describe longer-term interest rates used in our estimates for future results.
•
•
Asymmetrical and non-economic accounting refers to: (i) the portion of net derivative gains (losses) on embedded
derivatives attributable to the inclusion of our credit spreads in the liability valuations, (ii) hedging activity that
generates net derivative gains (losses) and creates fluctuations in net income because hedge accounting cannot be
achieved and the item being hedged does not a have an offsetting gain or loss recognized in earnings, (iii) inflation-
indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts
associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of
assets and other pass through adjustments, and (iv) impact of changes in foreign currency exchange rates on the re-
measurement of foreign denominated unhedged funding agreements and financing transactions to the U.S. dollar and
the re-measurement of certain liabilities from non-functional currencies to functional currencies. We believe that
excluding the impact of asymmetrical and non-economic accounting from total GAAP results enhances investor
understanding of our performance by disclosing how these accounting practices affect reported GAAP results.
Notable items reflect the unexpected impact of events that affect the Company’s results, but that were unknown and
that the Company could not anticipate when it devised its business plan. Notable items also include certain items
regardless of the extent anticipated in the business plan, to help investors have a better understanding of MetLife’s
results and to evaluate and forecast those results. Notable items represent a positive (negative) impact to adjusted
earnings available to common shareholders.
131
Table of Contents
•
The Company uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for
reinvestment into its businesses or use in non-mandatory capital actions. The Company defines free cash flow as the
sum of cash available at MetLife’s holding companies from dividends from operating subsidiaries, expenses and
other net flows of the holding companies (including capital contributions to subsidiaries), and net contributions from
debt to be at or below target leverage ratios. This measure of free cash flow is prior to capital actions, such as
common stock dividends and repurchases, debt reduction and mergers and acquisitions. Free cash flow should not be
viewed as a substitute for net cash provided by (used in) operating activities calculated in accordance with GAAP.
The free cash flow ratio is typically expressed as a percentage of annual adjusted earnings available to common
shareholders. A reconciliation of net cash provided by operating activities of MetLife, Inc. (parent company only) to
free cash flow of all holding companies for the years ended December 31, 2022 and 2021 is provided below.
Reconciliation of Net Cash Provided by Operating Activities of MetLife, Inc. to Free Cash
Flow of All Holding Companies
Years Ended December 31,
2022
2021
(In millions, except ratios)
MetLife, Inc. (parent company only) net cash provided by operating activities
$
4,428
$
3,757
Adjustments from net cash provided by operating activities to free cash flow:
Add: Incremental debt to be at or below target leverage ratios
Add: Capital contributions to subsidiaries
Add: Returns of capital from subsidiaries
Add: Repayments on and (issuances of) loans to subsidiaries, net
Add: Investment portfolio and derivatives changes and other, net
MetLife, Inc. (parent company only) free cash flow
Other MetLife, Inc. holding companies:
Add: Dividends and returns of capital from subsidiaries
Add: Capital contributions to subsidiaries
Add: Repayments on and (issuances of) loans to subsidiaries, net
Add: Other expenses
Add: Dividends and returns of capital to MetLife, Inc.
Add: Investment portfolio and derivative changes and other, net
Total other MetLife, Inc. holding companies free cash flow
Free cash flow of all holding companies
Ratio of net cash provided by operating activities to consolidated net income (loss) available to
MetLife, Inc.’s common shareholders:
MetLife, Inc. (parent company only) net cash provided by operating activities
Consolidated net income (loss) available to MetLife, Inc.’s common
shareholders
Ratio of net cash provided by operating activities (parent company only) to
consolidated net income (loss) available to MetLife, Inc.'s common
shareholders (1)
Ratio of free cash flow to adjusted earnings available to common shareholders:
Free cash flow of all holding companies (2)
Consolidated adjusted earnings available to common shareholders (2)
Ratio of free cash flow of all holding companies to consolidated adjusted
earnings available to common shareholders (2)
__________________
1,000
(5)
8
(60)
(199)
5,172
1,410
(87)
(5)
(656)
(1,434)
266
(506)
4,666
4,428
2,354
188 %
4,666
5,545
$
$
$
$
$
—
(88)
7
(35)
(130)
3,511
2,077
(24)
(9)
(613)
(1,300)
193
324
3,835
3,757
6,353
59 %
3,835
7,954
84 %
48 %
$
$
$
$
$
(1) Including the free cash flow of other MetLife, Inc. holding companies of ($506) million and $324 million for the
years ended December 31, 2022 and 2021, respectively, in the numerator of the ratio, this ratio, as adjusted, would
be 167% and 64%, respectively.
(2) i) Consolidated adjusted earnings available to common shareholders for the year ended December 31, 2022, was
positively impacted by notable items related to the actuarial assumption review and other insurance adjustments of
$111 million, net of income tax. Excluding these notable items from the denominator of the ratio, the adjusted free
cash flow ratio for 2022, would be 86%.
132
Table of Contents
ii) Consolidated adjusted earnings available to common shareholders for the year ended December 31, 2021, was
positively impacted by notable items related to tax adjustments of $140 million, net of income tax, and litigation
reserves and settlement costs of $66 million, net of income tax, offset by the actuarial assumption review and
other insurance adjustments of $140 million, net of income tax. Excluding these notable items from the
denominator of the ratio, the adjusted free cash flow ratio for 2021, would be 49%.
Risk Management
We have an integrated process for managing risk, that is supported by a Risk Appetite Statement approved by the Board
of Directors. Risk management is overseen and conducted through multiple Board and senior management risk committees
(financial and non-financial). The risk committees are established at the enterprise, regional and local levels, as needed, to
oversee capital and risk positions, approve ALM strategies and limits, and establish certain corporate risk standards and
policies. The risk committees are comprised of senior leaders from the lines of business and corporate functions which
ensures comprehensive coverage and sharing of risk reporting. The ERC is responsible for reviewing all material risks
impacting the enterprise and deciding on actions, if necessary, in the event risks exceed desired tolerances, taking into
consideration industry best practices and the current environment to resolve or mitigate those risks.
Three Lines of Defense
MetLife operates under the “Three Lines of Defense” model. Under this model, the lines of business and corporate
functions are the first and primary line of defense in identifying, measuring, monitoring, managing, and reporting risks.
Global Risk Management forms the second line of defense providing strategic advisory services and effective challenge and
oversight to the business and corporate functions in the first line of defense. Internal Audit serves as the third line of defense,
providing independent assurance and testing over the risk and control environment and related processes and controls.
Global Risk Management
Independent from the lines of business, the centralized Global Risk Management department, led by the CRO,
coordinates across all risk committees to ensure that all material risks are properly identified, measured, monitored, managed
and reported across the Company. The CRO reports to the CEO and is primarily responsible for maintaining and
communicating the Company’s enterprise risk policies and for monitoring and analyzing all material risks.
Global Risk Management considers and monitors a full range of risks relating to the Company’s solvency, liquidity,
earnings, business operations and reputation. Global Risk Management’s primary responsibilities consist of:
•
•
•
•
implementing an enterprise risk framework, which outlines our enterprise approach for managing financial and non-
financial risk;
developing policies and procedures for identifying, measuring, monitoring, managing and reporting those risks
identified in the enterprise risk framework;
coordinating Own Risk Solvency Assessment for Board, senior management and regulator use;
establishing appropriate corporate risk tolerance levels;
• measuring capital on an economic basis;
• mitigating compliance risk and establishing controls;
•
•
integrating climate risk into MetLife’s risk management framework and developing impact assessment capabilities;
and
reporting to (i) the Finance and Risk Committee of the Board of Directors; (ii) the Compensation Committee of the
Board of Directors; and (iii) the financial and non-financial senior management committees on various aspects of
risk.
133
Table of Contents
Key Risk Types
MetLife has defined each material risk to which it is exposed and has established individual frameworks to monitor,
manage and report on the respective risk.
• Market Risk: is the risk of loss due to potential changes in the value of assets and liabilities arising from fluctuations
in financial market, real estate, and other economic factors. Market risk is comprised of interest rate risk, equity risk,
foreign currency exchange rate risk, spread risk and inflation risk.
•
•
•
Credit Risk: is the risk of loss or credit rating downgrade arising from an obligor or counterparty with a direct or
contingent financial obligation to MetLife that is either unable or unwilling to meet its obligation in full and on a
timely basis. These risks arise from public fixed income assets, private loans including real estate, derivative
transactions, bank deposits, reinsurance treaties and other similar contracts.
Insurance Risk: is the risk of loss or adverse change in insurance liabilities from changes in the level, trend, and
volatility of insurance and policyholder behavior experience varying from best estimate assumptions. These
variances can be driven by catastrophic events such as pandemics or can be the result of misestimating base
assumptions. Insurance risks to MetLife generally arise from mortality, morbidity, longevity, and policyholder
behavior.
Non-Financial Risk: is the risk of failed or inadequate internal processes, human errors, system errors or external
events that may result in financial loss, non-financial damage, and/or non-compliance with applicable laws and
regulations. Non-Financial risk captures operational and compliance risks, including risks such as business
interruption, customer protection, financial crime, privacy, fraud and theft, and information security risk.
•
Liquidity Risk: refers to the risk that MetLife is unable to raise cash necessary to meet current obligations.
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 basis upon which capital can be deployed. The economic capital model accounts for the unique and
specific nature of the risks inherent in our business. Our economic capital model, coupled with considerations of local capital
requirements, 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 calibrating required economic capital shock factors to a specific confidence level and time horizon while
applying an industry standard method for the inclusion of diversification benefits among risk types. MetLife’s 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. For further information, see “Financial
Measures and Segment Accounting Policies” in Note 2 of the Notes to the Consolidated Financial Statements.
Asset/Liability Management
We actively manage our assets using an approach that is liability driven and balances quality, diversification, asset/
liability matching, liquidity, concentration and investment return. The goals of the investment process are to optimize, net of
income tax, risk-adjusted investment income and risk-adjusted total return while ensuring that the assets and liabilities are
reasonably aligned on a cash flow and duration basis. The ALM process is the shared responsibility of the ALM, Global Risk
Management, and Investments departments, with the engagement of senior members of the business segments and Finance,
and is governed by the ALM Committees. The ALM Committees’ duties include reviewing and approving investment
guidelines and limits, approving significant portfolio and ALM strategies and providing oversight of the ALM process. The
directives of the ALM Committees are carried out and monitored through ALM Working Groups which are set up to manage
risk by geography, product or portfolio type. The ALM Steering Committee oversees the activities of the underlying ALM
Committees and Working Groups. The ALM Steering Committee reports to the ERC.
We establish portfolio guidelines that define ranges and limits related to asset allocation, interest rate risk, liquidity,
concentration and other risks for each major business segment, legal entity or insurance product group. These guidelines
support implementation of investment strategies used to adequately fund our liabilities within acceptable levels of risk. We
also establish hedging programs and associated investment portfolios for different blocks of business. The ALM Working
Groups monitor these strategies and programs through regular review of portfolio metrics, such as effective duration, yield
curve sensitivity, convexity, value at risk, market sensitivities (to interest rates, equity market levels, equity volatility, foreign
currency exchange rates and inflation), stress scenario payoffs, liquidity, asset sector concentration and credit quality.
134
Table of Contents
We manage credit risk through in-house fundamental credit analysis of the underlying obligors, issuers, transaction
structures and real estate properties. We also manage credit, market valuation and liquidity risk through industry and issuer
diversification and asset allocation limits. These risk limits, approved annually by the Investment Risk Committee, promote
diversification by asset sector, avoid concentrations in any single issuer and limit overall aggregate credit and equity risk
exposure, as measured by our economic capital framework. For real estate assets, we manage credit and market risk through
asset allocation limits and by diversifying by geography, property and product type.
Information Security Risk Management
We manage information security risk through MetLife’s Information Security Program (the “Program”), which is
overseen by our enterprise Chief Information Security Officer (“CISO”), with collaboration across lines of businesses and
corporate functions. The CISO is a senior-level executive responsible for establishing and executing the company’s
information security strategy; the CISO regularly reports about information security risk to the ERC, the Audit Committee
and the Board. The primary goal of the Program is to protect information and technology assets through physical, technical,
and administrative safeguards. This includes monitoring, reporting, managing and remediating cyber threats. The Program
aims to prevent data exfiltration, manipulation, and destruction, as well as system and transactional disruption. The Program’s
threat-centric and risk-based approach for securing the MetLife environment is based on the cybersecurity framework
developed by the U.S. Government’s National Institute of Standards and Technology.
Subsequent Events
See “— Acquisitions and Dispositions” and Note 22 of the Notes to the Consolidated Financial Statements.
135
Table of Contents
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The following discussion on market risk should be read in conjunction with “Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Risk Management.”
Market Risk Exposures
We regularly analyze our exposure to interest rate, foreign currency exchange rate and equity market price risk. As a
result of that analysis, we have determined that the estimated fair values of certain assets and liabilities are materially exposed
to changes in interest rates, foreign currency exchange rates and equity markets. We have exposure to market risk through our
insurance operations and investment activities. For purposes of this disclosure, “market risk” is defined as the risk of loss due
to potential changes in the value of assets and liabilities arising from fluctuation in the financial market and other economic
factors.
Interest Rates
Our exposure to interest rate changes results most significantly from our holdings of fixed maturity securities AFS,
mortgage loans and derivatives, as well as our interest rate sensitive liabilities. The fixed maturity securities AFS include
U.S. and foreign government bonds, securities issued by government agencies, corporate bonds, mortgage-backed
securities and ABS & CLO, all of which are mainly exposed to changes in medium- and long-term interest rates. The
interest rate sensitive liabilities for purposes of this disclosure include debt, policyholder account balances related to certain
investment type contracts, and embedded derivatives on variable annuities with guaranteed minimum benefits which have
the same type of interest rate exposure (medium- and long-term interest rates) as fixed maturity securities AFS. The interest
rate sensitive liabilities for purposes of this disclosure exclude a significant portion of the liabilities relating to insurance
contracts. See “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic
Conditions.”
Foreign Currency Exchange Rates
Our exposure to fluctuations in foreign currency exchange rates against the U.S. dollar results from our holdings in
non-U.S. dollar denominated fixed maturity and equity securities, mortgage loans, and certain liabilities, as well as through
our investments in foreign subsidiaries. The foreign currency exchange rate liabilities for purposes of this disclosure
exclude a significant portion of the liabilities relating to insurance contracts. The principal currencies that create foreign
currency exchange rate risk in our investment portfolios and liabilities are the Japanese yen, the Euro and the British
pound. Selectively, we use U.S. dollar assets to support certain long-duration foreign currency liabilities. Through our
investments in foreign subsidiaries and joint ventures, we are primarily exposed to the Japanese yen, the Euro, the
Australian dollar, the British pound, the Mexican peso, the Chilean peso and the Korean won. In addition to hedging with
foreign currency swaps, forwards and options, local surplus in some countries may be held entirely or in part in U.S. dollar
assets, which further minimize exposure to foreign currency exchange rate fluctuation risk. We have matched much of our
foreign currency liabilities in our foreign subsidiaries with their respective foreign currency assets, thereby reducing our
risk to foreign currency exchange rate fluctuation. See “Risk Factors — Economic Environment and Capital Markets Risks
— We May Face Difficult Economic Conditions.”
Equity Market
Along with investments in equity securities, we have exposure to equity market risk through certain liabilities that
involve long-term guarantees on equity performance such as embedded derivatives on variable annuities with guaranteed
minimum benefits and certain policyholder account balances. Equity exposures associated with real estate and limited
partnership interests are excluded from this discussion as they are not considered financial instruments under GAAP.
Management of Market Risk Exposures
We use a variety of strategies to manage interest rate, foreign currency exchange rate and equity market risk, including
the use of derivatives.
136
Table of Contents
Interest Rate Risk Management
To manage interest rate risk, we analyze interest rate risk using various models, including multi-scenario cash flow
projection models that forecast cash flows of the liabilities and their supporting investments, including derivatives. These
projections involve evaluating the potential gain or loss on most of our in-force business under various increasing and
decreasing interest rate environments. The NYDFS regulations require that we perform some of these analyses annually as
part of our review of the sufficiency of our regulatory reserves. For several of our legal entities, we maintain segmented
operating and surplus asset portfolios for the purpose of ALM and the allocation of investment income to product lines. In
the U.S., for each segment, invested assets greater than or equal to the GAAP liabilities net of certain non-invested assets
allocated to the segment are maintained, with any excess allocated to Corporate & Other. The business segments may
reflect differences in legal entity, statutory line of business and any product market characteristic which may drive a
distinct investment strategy with respect to duration, liquidity or credit quality of the invested assets. Certain smaller
entities make use of unsegmented general accounts for which the investment strategy reflects the aggregate characteristics
of liabilities in those entities. We measure relative sensitivities of the value of our assets and liabilities to changes in key
assumptions utilizing internal models. These models reflect specific product characteristics and include assumptions based
on current and anticipated experience regarding lapse, mortality, morbidity and interest crediting rates. In addition, these
models include asset cash flow projections reflecting interest payments, sinking fund payments, principal payments, bond
calls, mortgage loan prepayments and defaults.
We employ product design, pricing and ALM strategies to reduce the potential effects of interest rate movements.
Product design and pricing strategies include the use of surrender charges or restrictions on withdrawals in some products
and the ability to reset crediting rates for certain products. ALM strategies include the use of derivatives. We also use
reinsurance to mitigate interest rate risk.
We also use common industry metrics, such as duration and convexity, to measure the relative sensitivity of assets and
liability values to changes in interest rates. In computing the duration of liabilities, we consider policyholder guarantees
and how we intend to set indeterminate policy elements such as interest credits or dividends. Each asset portfolio or
portfolio group has a duration target based on the liability duration and the investment objectives of that portfolio. Where a
liability cash flow may exceed the maturity of available assets, we may support such liabilities with equity investments,
derivatives or interest rate curve mismatch strategies.
Foreign Currency Exchange Rate Risk Management
MetLife has a well-established policy to manage foreign currency exchange rate exposures within its risk tolerance. In
general, investments backing specific liabilities are currency matched. This is achieved through direct investments in
matching currency or through the use of foreign currency exchange rate derivatives. Enterprise foreign currency exchange
rate risk limits are established by the ERC. Management of each of our segments, with oversight from our FX Working
Group and the ALM committee for the respective segment, is responsible for managing any foreign currency exchange rate
exposure.
We use foreign currency swaps, forwards and options to mitigate the liability exposure, risk of loss and financial
statement volatility associated with our investments in foreign subsidiaries, foreign currency denominated fixed income
investments and the sale of certain insurance products.
Equity Market Risk Management
We manage equity market risk on an integrated basis with other risks through our ALM strategies, including the
dynamic hedging with derivatives of certain variable annuity guarantee benefits, as well as reinsurance, in order to limit
losses, minimize exposure to large risks, and provide additional capacity for future growth. We also manage equity market
risk exposure in our investment portfolio through the use of derivatives. These derivatives include exchange-traded equity
futures, equity index options contracts, TRRs and equity variance swaps.
137
Table of Contents
Hedging Activities
We use derivative contracts primarily to hedge a wide range of risks including interest rate risk, foreign currency
exchange rate risk, and equity market risk. Derivative hedges are designed to reduce risk on an economic basis while
considering their impact on financial results under different accounting regimes, including GAAP and local statutory
accounting. Our derivative hedge programs vary depending on the type of risk being hedged. Some hedge programs are
asset or liability specific while others are portfolio hedges that reduce risk related to a group of liabilities or assets. Our use
of derivatives by major hedge programs is as follows:
•
Risks Related to Guarantee Benefits — We use a wide range of derivative contracts to mitigate the risk associated
with living guarantee benefits. These derivatives include equity and interest rate futures, interest rate swaps,
currency futures/forwards, equity indexed options, TRRs, interest rate option contracts and equity variance swaps.
• Minimum Interest Rate Guarantees — For certain liability contracts, we provide the contractholder a guaranteed
minimum interest rate. These contracts include certain fixed annuities and other insurance liabilities. We purchase
interest rate caps and floors to reduce risk associated with these liability guarantees.
•
•
•
Reinvestment Risk in Long-Duration Liability Contracts — Derivatives are used to hedge interest rate risk related to
certain long-duration liability contracts. Hedges include interest rate swaps, swaptions and Treasury bond forwards.
Foreign Currency Exchange Rate Risk — We use foreign currency swaps, futures, forwards and options to hedge
foreign currency exchange rate risk. These hedges are generally used to swap foreign currency denominated bonds,
investments in foreign subsidiaries or equity market exposures to U.S. dollars. Our foreign subsidiaries also use
these hedges to swap non-local currency assets to local currency, to match liabilities.
General ALM Hedging Strategies — In the ordinary course of managing our asset/liability risks, we use interest rate
futures, interest rate swaps, interest rate caps, interest rate floors, and inflation swaps. These hedges are designed to
reduce interest rate risk or inflation risk related to the existing assets or liabilities or related to expected future cash
flows.
• Macro Hedge Program — We use equity options, equity TRRs, interest rate swaptions, interest rate swaps and
Treasury locks to mitigate the potential loss of legal entity statutory capital under stress scenarios.
Risk Measurement: Sensitivity Analysis
We measure market risk related to our market sensitive assets and liabilities based on changes in interest rates, foreign
currency exchange rates and equity market prices utilizing a sensitivity analysis. For purposes of this disclosure, a significant
portion of the liabilities relating to insurance contracts is excluded, as discussed further below. This analysis estimates the
potential changes in estimated fair value based on a hypothetical 100 basis point change (increase or decrease) in interest
rates, as well as a 10% change (increase or decrease) in foreign currency exchange rates and equity market prices. We believe
these changes in market rates and prices are reasonably possible in the near term. In performing the analysis summarized
below, we used market rates at December 31, 2022. The sensitivity analysis separately calculates each of our market risk
exposures (interest rate, foreign currency exchange rate and equity market) relating to our assets and liabilities. We modeled
the impact of changes (increases and decreases) in market rates and prices on the estimated fair values of our market sensitive
assets and liabilities and present the results with the most adverse level of market risk impact to the Company for each of
these market risk exposures as follows:
•
•
•
the net present values of our interest rate sensitive exposures resulting from a 100 basis point change (increase or
decrease) in interest rates;
estimated fair values of our foreign currency exchange rate sensitive exposures due to a 10% change (appreciation or
depreciation) in the value of the U.S. dollar compared to all other currencies; and
the estimated fair value of our equity market sensitive exposures due to a 10% change (increase or decrease) in
equity market prices.
138
Table of Contents
The sensitivity analysis is an estimate and should not be viewed as predictive of our future financial performance. We
cannot ensure that our actual losses in any particular period will not exceed the amounts indicated in the table below.
Limitations related to this sensitivity analysis include:
•
•
•
•
•
•
•
interest sensitive and foreign currency exchange rate sensitive liabilities do not include $223.9 billion, at carrying
value, of insurance contracts. Management believes that the changes in the economic value of those contracts under
changing interest rates and changing foreign currency exchange rates would offset a significant portion of the fair
value changes of interest sensitive and foreign currency exchange rate sensitive assets;
the market risk information is limited by the assumptions and parameters established in creating the related
sensitivity analysis, including the impact of prepayment rates on mortgage loans;
sensitivities do not include the impact on asset or liability valuation of changes in market liquidity or changes in
market credit spreads;
foreign currency exchange rate risk is not isolated for certain embedded derivatives within host asset and liability
contracts, as the risk on these instruments is reflected as equity;
for the derivatives that qualify as hedges, and for certain other assets such as mortgage loans, the impact on reported
earnings may be materially different from the change in market values;
the analysis excludes liabilities pursuant to insurance contracts, as well as real estate holdings, private equity and
hedge fund holdings; and
the model assumes that the composition of assets and liabilities remains unchanged throughout the period.
Accordingly, we use such models as tools and not as substitutes for the experience and judgment of our management.
Based on our analysis of the impact of a 100 basis point change (increase or decrease) in interest rates, as well as a 10%
change (increase or decrease) in foreign currency exchange rates and equity market prices, we have determined that such a
change could have a material adverse effect on the estimated fair value of certain assets and liabilities from interest rate,
foreign currency exchange rate and equity market exposures.
The table below illustrates the potential loss in estimated fair value for each market risk exposure based on market
sensitive assets and liabilities at:
Interest rate risk
Foreign currency exchange rate risk
Equity market risk
December 31, 2022
(In millions)
$
$
$
22,327
5,929
97
The risk sensitivities derived used a 100 basis point increase to interest rates, a 10% strengthening of the U.S. dollar
against foreign currencies, and a 10% increase in equity prices. The potential losses in estimated fair value presented are for
non-trading securities.
139
Table of Contents
The table below provides additional detail regarding the potential loss in estimated fair value of our interest sensitive
financial instruments due to a 100 basis point increase in interest rates at:
Assets
Fixed maturity securities AFS
Equity securities
FVO Securities
Mortgage loans
Policy loans
Short-term investments
Other invested assets
Cash and cash equivalents
Accrued investment income
Premiums, reinsurance and other receivables
Other assets
Embedded derivatives within asset host contracts (2)
Total assets
Liabilities (3)
Policyholder account balances
Payables for collateral under securities loaned and other transactions
Short-term debt
Long-term debt
Collateral financing arrangement
Junior subordinated debt securities
Other liabilities
Embedded derivatives within liability host contracts (2)
Total liabilities
Derivative Instruments
Interest rate swaps
Interest rate floors
Interest rate caps
Interest rate futures
Interest rate options
Interest rate forwards
Synthetic GICs
Foreign currency swaps
Foreign currency forwards
Currency futures
Currency options
Credit default swaps
Equity futures
Equity index options
Equity variance swaps
Equity total return swaps
Total derivative instruments
Net Change
__________________
Notional
Amount
December 31, 2022
Estimated
Fair
Value (1)
(In millions)
Assuming a
100 bps
Increase
in Interest Rates
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
276,780
$
(20,707)
1,684
1,435
78,694
9,682
4,935
2,078
20,195
3,446
2,963
265
29
(80)
(26)
(2,708)
(268)
(11)
(156)
(6)
—
(37)
(14)
(8)
$
(24,021)
115,408
$
3,339
$
$
20,937
175
14,241
591
3,502
3,170
578
938
125
950
1
385
(1,385)
—
3,008
(234)
8
236
44
4
442
3
(89)
—
—
1,031
—
294
151
317
5,132
(2,182)
(66)
302
31
(218)
(950)
—
(307)
12
—
(8)
2
(4)
(45)
—
(5)
$
$
(3,438)
(22,327)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
39,911
25,270
48,290
1,453
44,391
7,828
46,316
56,025
18,211
333
3,000
14,437
2,988
16,701
163
2,799
(1)
(2)
(3)
Separate account assets and liabilities and Unit-linked investments and associated policyholder account balances,
which are interest rate sensitive, are not included herein as any interest rate risk is borne by the contractholder,
notwithstanding any general account guarantees which are included within embedded derivatives (see footnote (2)
below) or included within future policy benefits and other policy-related balances (see footnote (3) below).
Embedded derivatives are recognized on the consolidated balance sheet in the same caption as the host contract.
Excludes $223.9 billion of liabilities, at carrying value, pursuant to insurance contracts reported within future policy
benefits and other policy-related balances. These liabilities would economically offset a significant portion of the net
change in fair value of our financial instruments resulting from a 100 basis point increase in interest rates.
140
Table of Contents
Sensitivity to interest rates decreased $9.0 billion to $22.0 billion at December 31, 2022 from $31.0 billion at
December 31, 2021.
The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a
10% appreciation in the U.S. dollar compared to all other currencies at:
Assets
Fixed maturity securities AFS
Equity securities
FVO Securities
Mortgage loans
Policy loans
Short-term investments
Other invested assets
Cash and cash equivalents
Accrued investment income
Premiums, reinsurance and other receivables
Other assets
Embedded derivatives within asset host contracts (2)
Total assets
Liabilities (3)
Policyholder account balances
Payables for collateral under securities loaned and other transactions
Long-term debt
Other liabilities
Embedded derivatives within liability host contracts (2)
Total liabilities
Derivative Instruments
Interest rate swaps
Interest rate floors
Interest rate caps
Interest rate futures
Interest rate options
Interest rate forwards
Synthetic GICs
Foreign currency swaps
Foreign currency forwards
Currency futures
Currency options
Credit default swaps
Equity futures
Equity index options
Equity variance swaps
Equity total return swaps
Total derivative instruments
Net Change
__________________
December 31, 2022
Notional
Amount
Estimated
Fair
Value (1)
(In millions)
Assuming a
10% Appreciation
in the U.S. Dollar
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
276,780
$
(7,836)
1,684
1,435
78,694
9,682
4,935
2,078
20,195
3,446
2,963
265
29
(42)
(59)
(815)
(123)
(234)
(50)
(424)
(64)
(59)
(18)
(5)
$
(9,729)
115,408
$
2,757
20,937
14,241
3,170
578
188
148
14
7
$
3,114
938
$
125
950
1
385
(1,385)
—
3,008
(234)
8
236
44
4
442
3
(89)
41
—
—
—
(1)
80
—
1,360
(931)
(35)
162
—
—
9
—
1
$
$
686
(5,929)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
39,911
25,270
48,290
1,453
44,391
7,828
46,316
56,025
18,211
333
3,000
14,437
2,988
16,701
163
2,799
(1)
Does not necessarily represent those financial instruments solely subject to foreign currency exchange rate risk.
Separate account assets and liabilities and Unit-linked investments and associated policyholder account balances,
which are foreign currency exchange rate sensitive, are not included herein as any foreign currency exchange rate risk
is borne by the contractholder, notwithstanding any general account guarantees which are included within embedded
derivatives (see footnote (2) below) or included within future policy benefits and other policy-related balances (see
footnote (3) below).
141
Table of Contents
(2)
(3)
Embedded derivatives are recognized on the consolidated balance sheet in the same caption as the host contract.
Excludes $223.9 billion of liabilities, at carrying value, pursuant to insurance contracts reported within future policy
benefits and other policy-related balances. These liabilities would economically offset a significant portion of the net
change in fair value of our financial instruments resulting from a 10% appreciation in the U.S. dollar compared to all
other currencies.
Sensitivity to foreign currency exchange rates decreased $1.2 billion to $6.0 billion at December 31, 2022 from
$7.2 billion at December 31, 2021.
The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a
10% increase in equity prices at:
Assets
Equity securities
FVO Securities
Other invested assets
Embedded derivatives within asset host contracts (2)
Total assets
Liabilities (3)
Policyholder account balances
Embedded derivatives within liability host contracts (2)
Total liabilities
Derivative Instruments
Interest rate swaps
Interest rate floors
Interest rate caps
Interest rate futures
Interest rate options
Interest rate forwards
Synthetic GICs
Foreign currency swaps
Foreign currency forwards
Currency futures
Currency options
Credit default swaps
Equity futures
Equity index options
Equity variance swaps
Equity total return swaps
Total derivative instruments
Net Change
__________________
Notional
Amount
December 31, 2022
Estimated
Fair
Value (1)
(In millions)
Assuming a
10% Increase
in Equity
Prices
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
39,911
25,270
48,290
1,453
44,391
7,828
46,316
56,025
18,211
333
3,000
14,437
2,988
16,701
163
2,799
1,684
$
1,435
2,078
29
$
115,408
$
578
$
938
$
125
950
1
385
(1,385)
—
3,008
(234)
8
236
44
4
442
3
(89)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
67
72
30
(3)
166
—
191
191
—
—
—
—
—
—
—
—
—
—
—
—
(207)
(39)
—
(208)
(454)
(97)
(1)
(2)
(3)
Does not necessarily represent those financial instruments solely subject to equity price risk. Additionally, separate
account assets and liabilities and Unit-linked investments and associated policyholder account balances, which are
equity market sensitive, are not included herein as any equity market risk is borne by the contractholder,
notwithstanding any general account guarantees which are included within embedded derivatives (see footnote (2)
below) or included within future policy benefits and other policy-related balances (see footnote (3) below).
Embedded derivatives are recognized on the consolidated balance sheet in the same caption as the host contract.
Excludes $223.9 billion of liabilities, at carrying value, pursuant to insurance contracts reported within future policy
benefits and other policy-related balances.
142
Table of Contents
Sensitivity to equity market prices decreased $26 million to $97 million at December 31, 2022 from $123 million at
December 31, 2021.
143
Table of Contents
Item 8. Financial Statements and Supplementary Data
Index to Consolidated Financial Statements, Notes and Schedules
Report of Independent Registered Public Accounting Firm (PCAOB ID 34)
Financial Statements at December 31, 2022 and 2021 and for the Years Ended December 31, 2022, 2021
and 2020:
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies
Note 2 — Segment Information
Note 3 — Acquisition and Dispositions
Note 4 — Insurance
Note 5 — Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles
Note 6 — Reinsurance
Note 7 — Closed Block
Note 8 — Investments
Note 9 — Derivatives
Note 10 — Fair Value
Note 11 — Leases
Note 12 — Goodwill
Note 13 — Long-term and Short-term Debt
Note 14 — Collateral Financing Arrangement
Note 15 — Junior Subordinated Debt Securities
Note 16 — Equity
Note 17 — Other Revenues and Other Expenses
Note 18 — Employee Benefit Plans
Note 19 — Income Tax
Note 20 — Earnings Per Common Share
Note 21 — Contingencies, Commitments and Guarantees
Note 22 — Subsequent Events
Financial Statement Schedules at December 31, 2022 and 2021 and for the Years Ended December 31,
2022, 2021 and 2020:
Schedule I — Consolidated Summary of Investments — Other Than Investments in Related Parties
Schedule II — Condensed Financial Information (Parent Company Only)
Schedule III — Consolidated Supplementary Insurance Information
Schedule IV — Consolidated Reinsurance
144
Page
145
150
151
152
153
154
156
175
181
183
198
201
205
207
227
242
258
260
261
263
264
266
283
284
292
296
296
300
301
302
309
311
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of MetLife, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of MetLife, Inc. and subsidiaries (the “Company”) as of
December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), equity, and
cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the schedules listed
in the Index to Consolidated Financial Statements, Notes and Schedules (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of
America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 23, 2023, expressed an unqualified opinion on the Company’s internal control
over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due
to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements
that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures
that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a
whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
145
Table of Contents
Fixed Maturity Securities Available-for-Sale — Fair Value of Level 3 Fixed Maturity Securities — Refer to Notes 1, 8,
and 10 to the financial statements
Critical Audit Matter Description
The Company has investments in certain fixed maturity securities classified as available-for-sale whose fair values are based
on unobservable inputs that are supported by little or no market activity. When a price is not available in the active market,
from an independent pricing service, or from independent broker quotations, management values the security using internal
matrix pricing or discounted cash flow techniques. These investments are categorized as Level 3 and had an estimated fair
value of $6.6 billion as of December 31, 2022.
Given management uses considerable judgment when estimating the fair value of Level 3 fixed maturity securities
determined using internal matrix pricing or discounted cash flow techniques, performing audit procedures to evaluate the
estimate of fair value required a high degree of auditor judgment and an increased extent of effort. This audit effort included
the use of professionals with specialized skills and knowledge, including our fair value specialists, to assist in performing
procedures and evaluating the audit evidence obtained.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation of Level 3 fixed maturity securities determined using internal matrix pricing or
discounted cash flow techniques included, among others, the following:
• We tested the effectiveness of controls over the determination of fair value.
• We tested the accuracy and completeness of relevant security attributes, including credit ratings, maturity dates and
coupon rates, used in the determination of Level 3 fair values.
• With the involvement of our fair value specialists, we developed independent fair value estimates for a sample of
securities and compared our estimates to the Company’s estimates and evaluated differences. We developed our
estimate by evaluating the observable and unobservable inputs used by management or developing independent
inputs.
Insurance Liabilities — Valuation of Future Policy Benefits for Long-Term Care Insurance — Refer to Notes 1 and 4 to
the financial statements
Critical Audit Matter Description
The Company’s products include long-term care insurance. Liabilities for amounts payable under long-term care insurance
are recorded in future policy benefits in the Company’s consolidated balance sheets. Such liabilities are established based on
actuarial assumptions at the time policies are issued, which are intended to estimate the experience for the period the policy
benefits are payable. Significant adverse changes in experience on such contracts may require the establishment of premium
deficiency reserves, which are based on current assumptions. Management’s estimate of future policy benefits for long-term
care insurance was $14.3 billion as of December 31, 2022.
Management applies considerable judgment in evaluating actual experience to determine whether a change in assumptions
for long-term care insurance is warranted. Principal assumptions used in the valuation of future policy benefits for long-term
care insurance include morbidity, policy lapse, investment returns and mortality.
Given the inherent uncertainty in selecting assumptions, we have determined that management’s evaluation of actual
experience when estimating future policy benefits for long-term care insurance policies is a critical audit matter, which
required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate
the judgments made and the reasonableness of the assumptions used in the valuation. The audit effort included the use of
professionals with specialized skill and knowledge, including our actuarial specialists, to assist in performing these
procedures and evaluating the audit evidence obtained from these procedures.
146
Table of Contents
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the assumptions used to determine the estimate of future policy benefits for long-term care
insurance, included, among others, the following:
• We tested the effectiveness of the control over the assumptions used in the valuation of future policy benefits and
the effectiveness of the controls over the underlying data.
• With the involvement of our actuarial specialists, we:
◦
◦
◦
evaluated judgments applied by management in setting principal assumptions, including evaluating the
results of experience studies used as the basis for setting those assumptions.
evaluated management’s estimate of, or developed an independent estimate of, future policy benefits, on a
sample basis, and evaluated differences. This included confirming that assumptions were applied as
intended.
evaluated the results of the Company’s annual premium deficiency tests.
Derivatives — Valuation of Embedded Derivative Liabilities — Refer to Notes 1, 4, 9, and 10 to the financial statements
Critical Audit Matter Description
The Company’s products include variable annuity contracts with guaranteed minimum benefits that provide the policyholder
a minimum return based on their initial deposit adjusted for withdrawals. The guarantees on variable annuity contracts are
accounted for as insurance liabilities or as embedded derivatives depending on how and when the benefit is paid. Guarantees
accounted for as embedded derivatives include the non-life contingent portion of guaranteed minimum withdrawal benefits
and certain non-life contingent portions of guaranteed minimum income benefits, and are recorded in policyholder account
balances on the Company’s consolidated balance sheet. Embedded derivatives are measured at estimated fair value separately
from the host variable annuity contract using actuarial and capital market assumptions that are updated at least annually.
Management’s estimate of embedded derivative liabilities was $0.6 billion as of December 31, 2022.
Management applies considerable judgment in selecting assumptions used to estimate embedded derivative liabilities and
changes in market conditions or variations in certain assumptions could result in significant fluctuations in the estimate.
Principal assumptions include mortality, lapse, dynamic lapse, withdrawal, utilization, and discount rates and implied
volatilities. The valuation of the embedded derivative liabilities is also based on complex calculations which are data
intensive.
Given the inherent uncertainty in selecting assumptions and the complexity of the calculations, we have determined that
management’s valuation of the embedded derivative liabilities is a critical audit matter which required a high degree of
auditor judgment and an increased extent of effort when performing audit procedures to evaluate the judgments made and the
reasonableness of the models and assumptions used in the valuation. The audit effort included the use of professionals with
specialized skill and knowledge, including our valuation and actuarial specialists, to assist in performing these procedures and
evaluating the audit evidence obtained from these procedures.
147
Table of Contents
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation of embedded derivative liabilities included, among others, the following:
• We tested the effectiveness of controls over the assumptions, including controls over the underlying data used in the
valuation of embedded derivative liabilities.
• We tested the effectiveness of controls over the methodologies and models used for determining the embedded
derivative liabilities.
• With the involvement of our valuation and actuarial specialists, we:
◦
◦
◦
evaluated the methods, models, and judgments applied by management in the determination of principal
assumptions and the calculation of the embedded derivative liabilities
evaluated the results of underlying experience studies, capital market projections, and judgments applied by
management in setting the assumptions
developed an independent estimate of the embedded derivative liabilities, on a sample basis, and evaluated
differences.
Future Adoption of Accounting Pronouncements – Targeted Improvements to the Accounting for Long-Duration
Contracts — Refer to Note 1 to the financial statements
Critical Audit Matter Description
The Company will adopt Accounting Standards Update No. 2018-12, Financial Services— Insurance (Topic 944): Targeted
Improvements to the Accounting for Long-Duration Contracts, as amended (“ASU 2018-12”), effective January 1, 2023. The
modified retrospective transition method will be used, except in regard to market risk benefits where the Company will use
the full retrospective method. Based upon these transition methods, the Company estimates that the January 1, 2021 transition
date impact from adoption will include a decrease to retained earnings of approximately $5.0 billion, net of income tax,
which includes the impact from the requirement to account for variable annuity guarantees as market risk benefits measured
at fair value. Market risk benefits are contracts or contract features that guarantee benefits, such as guaranteed minimum
benefits, in addition to an account balance which expose insurance companies to other than nominal capital market risk and
protect the contractholder from the same risk. Certain contracts or contract features to be identified as market risk benefits are
currently accounted for as embedded derivatives and measured at fair value, while others will transition to fair value
measurement upon the adoption of ASU 2018-12.
Management applies considerable judgment in estimating the transition date impact of market risk benefits under the full
retrospective method of adoption due to the application of fair value measurement principles which use assumptions to
estimate the impact of changes in market conditions and policyholder behavior since contract inception that could result in
significant fluctuations in the estimate. Principal assumptions include mortality, lapse, dynamic lapse, withdrawal, utilization,
discount rates and implied volatilities. Additionally, the valuation of market risk benefits is based on complex calculations.
Given the inherent uncertainty in selecting assumptions and the complexity of the calculations, we have determined that the
estimated transition date impact of measuring market risk benefits on contracts or contract features not previously accounted
for as embedded derivatives is a critical audit matter which required a high degree of auditor judgment and an increased
extent of effort when performing audit procedures to evaluate the judgments made and the reasonableness of the
methodologies, models and assumptions used in the valuation. The audit effort included the use of professionals with
specialized skill and knowledge, including our valuation and actuarial specialists, to assist in performing these procedures and
evaluating the audit evidence obtained from these procedures.
148
Table of Contents
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the estimated transition date impact of measuring market risk benefits not previously
accounted for as embedded derivatives included, among others, the following:
• We tested the effectiveness of controls over the transition to market risk benefit measurement principles under ASU
2018-12, including the related methodologies, models and assumptions used for determining the fair value of market
risk benefits not previously accounted for as embedded derivatives.
• With the involvement of our valuation and actuarial specialists, we:
◦
◦
◦
evaluated the methods, models, and principal assumptions applied by management in the full retrospective
application of market risk benefit measurement principles to estimate the transition date impact.
evaluated the results of underlying experience studies, capital market projections, and judgments applied by
management in setting the assumptions since contract inception
developed an independent estimate, on a sample basis, of the market risk benefits not previously accounted
for as embedded derivatives and evaluated differences.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 23, 2023
We have served as the Company’s auditor since at least 1968; however, an earlier year could not be reliably determined.
149
Table of Contents
Assets
Investments:
MetLife, Inc.
Consolidated Balance Sheets
December 31, 2022 and 2021
(In millions, except share and per share data)
Fixed maturity securities available-for-sale, at estimated fair value (net of allowance for credit loss of $183 and $91, respectively); and
amortized cost: $306,025 and $310,884, respectively
Equity securities, at estimated fair value
Contractholder-directed equity securities and fair value option securities, at estimated fair value
Mortgage loans (net of allowance for credit loss of $527 and $634, respectively; includes $0 and $127, respectively, under the fair value option)
Policy loans
Real estate and real estate joint ventures (includes $299 and $240, respectively, under the fair value option and $0 and $175, respectively, of real
estate held-for-sale)
Other limited partnership interests
Short-term investments, principally at estimated fair value
Other invested assets (net of allowance for credit loss of $26 and $40, respectively; includes $1,926 and $1,930, respectively, of leveraged and
direct financing leases; and $326 and $351, respectively, relating to variable interest entities)
Total investments
Cash and cash equivalents, principally at estimated fair value
Accrued investment income
Premiums, reinsurance and other receivables
Deferred policy acquisition costs and value of business acquired
Current income tax recoverable
Deferred income tax asset
Goodwill
Assets held-for-sale
Other assets
Separate account assets
Total assets
Liabilities and Equity
Liabilities
Future policy benefits
Policyholder account balances
Other policy-related balances
Policyholder dividends payable
Policyholder dividend obligation
Payables for collateral under securities loaned and other transactions
Short-term debt
Long-term debt
Collateral financing arrangement
Junior subordinated debt securities
Deferred income tax liability
Liabilities held-for-sale
Other liabilities
Separate account liabilities
Total liabilities
Contingencies, Commitments and Guarantees (Note 21)
Equity
MetLife, Inc.’s stockholders’ equity:
Preferred stock, par value $0.01 per share; $3,905 aggregate liquidation preference
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,189,831,471 and 1,186,540,473 shares issued, respectively;
779,098,414 and 825,540,267 shares outstanding, respectively
Additional paid-in capital
Retained earnings
Treasury stock, at cost; 410,733,057 and 361,000,206 shares, respectively
Accumulated other comprehensive income (loss)
Total MetLife, Inc.’s stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes to the consolidated financial statements.
150
2022
2021
$
276,780
$
340,274
1,684
9,668
83,763
8,874
13,137
14,414
4,935
20,038
433,293
20,195
3,446
17,461
22,983
42
2,830
9,297
—
11,026
146,038
$
$
666,611
$
204,228
$
203,082
19,651
387
—
20,937
175
14,647
716
3,158
325
—
25,980
146,038
639,324
—
12
33,616
41,953
(21,458)
(27,083)
27,040
247
27,287
$
666,611
$
1,269
12,142
79,353
9,111
12,216
14,625
7,176
18,655
494,821
20,047
3,185
17,149
16,061
184
189
9,535
7,238
11,426
179,873
759,708
199,721
203,473
17,751
478
1,682
31,920
341
13,933
766
3,156
9,693
6,634
22,538
179,873
691,959
—
12
33,511
41,197
(18,157)
10,919
67,482
267
67,749
759,708
Table of Contents
MetLife, Inc.
Consolidated Statements of Operations
Years Ended December 31, 2022, 2021 and 2020
(In millions, except per share data)
Revenues
Premiums
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
Interest credited to policyholder account balances
Policyholder dividends
Other expenses
Total expenses
Income (loss) before provision for income tax
Provision for income tax expense (benefit)
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
2022
2021
2020
$
49,397 $
42,009 $
42,034
5,585
15,916
2,634
(1,262)
(2,372)
69,898
5,756
21,395
2,619
1,529
(2,228)
71,080
5,603
17,117
1,849
(110)
1,349
67,842
50,612
43,954
41,461
3,692
701
12,034
67,039
2,859
301
2,558
19
2,539
185
—
5,538
876
12,586
62,954
8,126
1,551
6,575
21
6,554
195
6
5,214
1,090
13,150
60,915
6,927
1,509
5,418
11
5,407
202
14
Net income (loss) available to MetLife, Inc.’s common shareholders
$
2,354 $
6,353 $
5,191
Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
Basic
Diluted
$
$
2.93 $
2.91 $
7.36 $
7.31 $
5.72
5.68
See accompanying notes to the consolidated financial statements.
151
Table of Contents
MetLife, Inc.
Consolidated Statements of Comprehensive Income (Loss)
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Net income (loss)
Other comprehensive income (loss):
Unrealized investment gains (losses), net of related offsets
Unrealized gains (losses) on derivatives
Foreign currency translation adjustments
Defined benefit plans adjustment
Other comprehensive income (loss), before income tax
Income tax (expense) benefit related to items of other comprehensive income (loss)
Other comprehensive income (loss), net of income tax
Comprehensive income (loss)
2022
2021
2020
$
2,558 $
6,575 $
5,418
(47,831)
(8,171)
(85)
137
(1,242)
(1,306)
279
(48,879)
10,871
(38,008)
(35,450)
328
(9,012)
1,862
(7,150)
(575)
5,198
(286)
1,169
181
6,262
(1,237)
5,025
10,443
Less: Comprehensive income (loss) attributable to noncontrolling interest, net of income
tax
Comprehensive income (loss) attributable to MetLife, Inc.
13
24
16
$
(35,463) $
(599) $
10,427
See accompanying notes to the consolidated financial statements.
152
Table of Contents
MetLife, Inc.
Consolidated Statements of Equity
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Balance at December 31, 2019
$
—
$
12
$
32,680
$
33,078
$
(12,678) $
13,052
$
66,144
$
238
$
66,382
Preferred
Stock
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
at Cost
Accumulated
Other
Comprehensive
Income (Loss)
Total
MetLife, Inc.’s
Stockholders’
Equity
Noncontrolling
Interests
Total
Equity
Cumulative effects of changes in accounting principles, net of
income tax
Redemption of preferred stock
Preferred stock redemption premium
Preferred stock issuance
Treasury stock acquired in connection with share repurchases
Stock-based compensation
Dividends on preferred stock
Dividends on common stock (declared per share of $1.820)
Change in equity of noncontrolling interests
Net income (loss)
Other comprehensive income (loss), net of income tax
Balance at December 31, 2020
Redemption of preferred stock
Preferred stock redemption premium
Treasury stock acquired in connection with share repurchases
Stock-based compensation
Dividends on preferred stock
Dividends on common stock (declared per share of $1.900)
Change in equity of noncontrolling interests
Net income (loss)
Other comprehensive income (loss), net of income tax
Balance at December 31, 2021
Treasury stock acquired in connection with share repurchases
Stock-based compensation
Dividends on preferred stock
Dividends on common stock (declared per share of $1.980)
Change in equity of noncontrolling interests
Net income (loss)
Other comprehensive income (loss), net of income tax
Balance at December 31, 2022
—
12
(989)
1,961
160
33,812
(494)
193
(121)
(14)
(202)
(1,657)
5,407
(1,151)
36,491
(13,829)
5,020
18,072
(4,328)
(6)
(195)
(1,647)
6,554
—
12
33,511
41,197
(7,153)
10,919
(18,157)
(3,301)
105
(185)
(1,598)
2,539
(121)
(989)
(14)
1,961
(1,151)
160
(202)
(1,657)
—
5,407
5,020
74,558
(494)
(6)
(4,328)
193
(195)
(1,647)
—
6,554
(7,153)
67,482
(3,301)
105
(185)
(1,598)
—
2,539
(38,002)
(38,002)
5
11
5
259
(16)
21
3
267
(33)
19
(6)
$
—
$
12
$
33,616
$
41,953
$
(21,458) $
(27,083) $
27,040
$
247
$
See accompanying notes to the consolidated financial statements.
(121)
(989)
(14)
1,961
(1,151)
160
(202)
(1,657)
5
5,418
5,025
74,817
(494)
(6)
(4,328)
193
(195)
(1,647)
(16)
6,575
(7,150)
67,749
(3,301)
105
(185)
(1,598)
(33)
2,558
(38,008)
27,287
153
Table of Contents
MetLife, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Cash flows from operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expenses
Amortization of premiums and accretion of discounts associated with investments, net
(Gains) losses on investments and from sales of businesses, net
(Gains) losses on derivatives, net
(Income) loss from equity method investments, net of dividends or distributions
Interest credited to policyholder account balances
Universal life and investment-type product policy fees
Change in contractholder-directed equity securities and fair value option securities
Change in accrued investment income
Change in premiums, reinsurance and other receivables
Change in deferred policy acquisition costs and value of business acquired, net
Change in income tax
Change in other assets
Change in insurance-related liabilities and policy-related balances
Change in other liabilities
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities available-for-sale
Equity securities
Mortgage loans
Real estate and real estate joint ventures
Other limited partnership interests
Short-term investments
Purchases and originations of:
Fixed maturity securities available-for-sale
Equity securities
Mortgage loans
Real estate and real estate joint ventures
Other limited partnership interests
Short-term investments
Cash received in connection with freestanding derivatives
Cash paid in connection with freestanding derivatives
Sales of businesses, net of cash and cash equivalents disposed of $67, $611 and $0, respectively
Purchases of businesses, net of cash received of $4, $0 and $191, respectively
Purchases of investments in operating joint ventures
Net change in policy loans
Net change in other invested assets
Other, net
2022
2021
2020
$
2,558
$
6,575
$
5,418
673
(960)
1,262
4,317
505
3,737
(3,970)
1,671
(357)
256
(568)
(591)
27
4,058
341
245
13,204
88,937
873
10,779
1,096
1,615
14,094
(82,956)
(1,368)
(16,403)
(1,208)
(2,674)
(11,741)
4,524
(7,793)
590
(35)
(240)
104
(786)
(28)
694
(855)
(1,529)
4,190
(3,051)
5,490
(3,638)
(231)
(11)
389
(106)
598
(681)
4,553
71
138
12,596
88,839
708
19,183
1,285
777
20,871
(97,368)
(451)
(14,961)
(1,375)
(3,227)
(24,148)
3,453
(7,990)
3,270
—
—
228
(235)
(46)
619
(816)
110
(656)
76
5,348
(3,664)
131
104
842
101
(11)
(361)
5,112
(1,065)
351
11,639
77,979
367
11,300
120
597
13,776
(89,633)
(169)
(14,652)
(1,287)
(1,979)
(14,117)
4,847
(4,247)
—
(1,684)
—
250
(176)
139
Net cash provided by (used in) investing activities
$
(2,620) $
(11,187) $
(18,569)
See accompanying notes to the consolidated financial statements.
154
Table of Contents
MetLife, Inc.
Consolidated Statements of Cash Flows — (continued)
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Cash flows from financing activities
Policyholder account balances:
Deposits
Withdrawals
Payables for collateral under securities loaned and other transactions:
Net change in payables for collateral under securities loaned and other transactions
Cash received for other transactions with tenors greater than three months
Cash paid for other transactions with tenors greater than three months
Long-term debt issued
Long-term debt repaid
Collateral financing arrangement repaid
Financing element on certain derivative instruments and other derivative related transactions, net
Treasury stock acquired in connection with share repurchases
Preferred stock issued, net of issuance costs
Redemption of preferred stock
Preferred stock redemption premium
Dividends on preferred stock
Dividends on common stock
Other, net
Net cash provided by (used in) financing activities
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
Change in cash and cash equivalents
Cash and cash equivalents, including subsidiaries held-for-sale, beginning of year
Cash and cash equivalents, including subsidiaries held-for-sale, end of year
Cash and cash equivalents, subsidiaries held-for-sale, beginning of year
Cash and cash equivalents, subsidiaries held-for-sale, end of year
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest
Income tax
Business acquisitions (Note 3):
Assets
Liabilities
Cash paid, excluding transaction costs
Non-cash transactions:
Fixed maturity securities available-for-sale received in connection with pension risk transfer transactions
Real estate and real estate joint ventures acquired in satisfaction of debt
Increase in equity securities due to in-kind distributions received from other limited partnership interests
Reclassification of certain other invested assets to contractholder-directed equity securities and fair value
option securities
2022
2021
2020
$
103,036
$
96,367
$
(97,886)
(92,540)
93,497
(85,251)
(10,730)
—
—
1,013
(85)
(50)
(61)
(3,326)
—
—
—
(185)
(1,598)
(236)
(10,108)
(397)
79
20,116
20,195
69
—
20,047
20,195
905
1,056
—
—
—
8,707
495
96
$
$
$
$
$
$
$
$
$
$
$
$
1,883
—
(100)
29
(582)
(79)
270
(4,303)
—
(494)
(6)
(195)
(1,647)
22
(1,375)
(478)
(444)
20,560
20,116
765
69
19,795
20,047
914
1,102
—
—
—
423
174
380
$
$
$
$
$
$
$
$
$
$
$
$
—
$
309
$
3,538
150
(175)
1,124
(99)
(148)
(46)
(1,151)
1,961
(989)
(14)
(202)
(1,657)
191
10,729
163
3,962
16,598
20,560
—
765
16,598
19,795
891
787
2,190
315
1,875
2,037
10
108
—
$
$
$
$
$
$
$
$
$
$
$
$
$
See accompanying notes to the consolidated financial statements.
155
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements
1. Business, Basis of Presentation and Summary of Significant Accounting Policies
Business
“MetLife” and the “Company” refer to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and
affiliates. MetLife is one of the world’s leading financial services companies, providing insurance, annuities, employee
benefits and asset management. MetLife is organized into five segments: U.S.; Asia; Latin America; Europe, the Middle East
and Africa (“EMEA”); and MetLife Holdings.
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect
amounts reported on the consolidated financial statements. In applying these policies and estimates, management makes
subjective and complex judgments that frequently require assumptions 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 the Company’s business and operations. Actual results could differ from these estimates.
Consolidation
The accompanying consolidated financial statements include the accounts of MetLife, Inc. and its subsidiaries, as well
as partnerships and joint ventures in which the Company has a controlling financial interest, and variable interest
entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been
eliminated.
Held-for-Sale
The Company classifies a business as held-for-sale when management has approved or received approval to sell the
business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current
estimated fair value and certain other specified criteria are met. The business classified as held-for-sale is recorded at the
lower of the carrying value and estimated fair value, less cost to sell. If the carrying value of the business exceeds its
estimated fair value, less cost to sell, a loss is recognized and reported in net investment gains (losses). Assets and
liabilities related to the business classified as held-for-sale are separately reported in the Company's consolidated balance
sheets in the period in which the business is classified as held-for-sale. See Note 3. If a component of the Company has
either been disposed of or is classified as held-for-sale and represents a strategic shift that has or will have a major effect on
the Company’s operations and financial results, the results of the component are reported in discontinued operations.
Separate Accounts
Separate accounts are established in conformity with insurance laws. Generally, the assets of the separate accounts
cannot be used to settle the liabilities that arise from any other business of the Company. Separate account assets are
subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. The
Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate
accounts if:
•
•
•
•
such separate accounts are legally recognized;
assets supporting the contract liabilities are legally insulated from the Company’s general account liabilities;
investment objectives are directed by the contractholder; and
all investment performance, net of contract fees and assessments, is passed through to the contractholder.
The Company reports separate account assets at their fair value which is based on the estimated fair values of the
underlying assets comprising the individual separate account portfolios. Investment performance (including investment
income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to
contractholders of such separate accounts are offset within the same line on the statements of operations. Separate accounts
credited with a contractual investment return are combined on a line-by-line basis with the Company’s general account
assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies
described herein for similar financial instruments held within the general account. Unit-linked separate account investments
156
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
that are directed by contractholders but do not meet one or more of the other above criteria are included in Contractholder-
directed equity securities.
The Company’s revenues reflect fees charged to the separate accounts, including mortality charges, risk charges,
policy administration fees, investment management fees and surrender charges. Such fees are included in universal life and
investment-type product policy fees on the statements of operations.
Reclassifications
Cash flows from short term investments in the prior years’ Consolidated Statement of Cash Flows, which were
previously presented net, have been revised to gross presentation to conform with the current year presentation. The
revision in presentation was not material to the previously presented financial statements.
Additionally, the deferred income tax asset in the prior years’ Consolidated Balance Sheets, which was previously
included in other assets, has been reclassified to conform with the current year presentation.
Summary of Significant Accounting Policies
The following are the Company’s significant accounting policies with references to notes providing additional
information on such policies and critical accounting estimates relating to such policies.
Accounting Policy
Insurance
Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles
Reinsurance
Investments
Derivatives
Fair Value
Goodwill
Employee Benefit Plans
Income Tax
Litigation Contingencies
Insurance
Note
4
5
6
8
9
10
12
18
19
21
Future Policy Benefit Liabilities and Policyholder Account Balances
The Company establishes liabilities for amounts payable under insurance policies. Generally, amounts 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. For long duration insurance contracts, assumptions such as
mortality, morbidity and interest rates are “locked in” upon the issuance of new business. However, significant adverse
changes in experience on such contracts may require the establishment of premium deficiency reserves. Such reserves
are determined based on the then current assumptions and do not include a provision for adverse deviation.
Premium deficiency reserves may also be established for short-duration contracts to provide for expected future
losses. These reserves are based on actuarial estimates of the amount of loss inherent in that period, including losses
incurred for which claims have not been reported. The provisions for unreported claims are calculated using studies that
measure the historical length of time between the incurred date of a claim and its eventual reporting to the Company.
Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts.
157
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
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 life of the contract based on total expected assessments. The assumptions
used in estimating the secondary and paid-up guarantee liabilities are consistent with those used for amortizing deferred
policy acquisition costs (“DAC”), and are thus subject to the same variability and risk as further discussed herein. The
assumptions of investment performance and volatility for variable products are consistent with historical experience of
appropriate underlying equity indices, such as the S&P Global Ratings (“S&P”) 500 Index. The benefits used in
calculating the liabilities are based on the average benefits payable over a range of scenarios.
The Company regularly reviews its estimates of liabilities for future policy benefits and compares them with its
actual experience. Differences result in changes to the liability balances with related charges or credits to benefit
expenses in the period in which the changes occur.
Policyholder account balances relate to contracts or contract features where the Company has no significant
insurance risk.
The Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum
benefits that provide the policyholder a minimum return based on their initial deposit adjusted for withdrawals. These
guarantees are accounted for as insurance liabilities or as embedded derivatives depending on how and when the benefit
is paid. Specifically, a guarantee is accounted for as an embedded derivative if a guarantee is paid without requiring
(i) the occurrence of a specific insurable event, or (ii) the policyholder to annuitize. Alternatively, a guarantee is
accounted for as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a specific insurable
event, or (ii) annuitization. In certain cases, a guarantee may have elements of both an insurance liability and an
embedded derivative and in such cases the guarantee is split and accounted for under both models.
Guarantees accounted for as insurance liabilities in future policy benefits include guaranteed minimum death
benefits (“GMDBs”), the life-contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”), elective
annuitizations of guaranteed minimum income benefits (“GMIBs”), and the life contingent portion of GMIBs that
require annuitization when the account balance goes to zero.
Guarantees accounted for as embedded derivatives in policyholder account balances include guaranteed minimum
accumulation benefits (“GMABs”), the non-life contingent portion of GMWBs and certain non-life contingent portions
of GMIBs. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee
fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any
additional fees represent “excess” fees and are reported in universal life and investment-type product policy fees.
Other Policy-Related Balances
Other policy-related balances include policy and contract claims, premiums received in advance, unearned revenue
liabilities, obligations assumed under structured settlement assignments, policyholder dividends due and unpaid,
policyholder dividends left on deposit and negative value of business acquired (“VOBA”).
The liability for policy and contract claims generally relates to incurred but not reported (“IBNR”) death, disability,
dental and vision claims. In addition, included in other policy-related balances are claims which have been reported but
not yet settled for death, disability, dental and vision. The liability for these claims is based on the Company’s estimated
ultimate cost of settling all claims. The Company derives estimates for the development of IBNR claims principally from
analyses of historical patterns of claims by business line. The methods used to determine these estimates are continually
reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments
for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or
payments are made.
The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as
premiums received in advance. These amounts are then recognized in premiums when due.
The unearned revenue liability relates to universal life and investment-type products and represents policy charges
for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the
product’s estimated gross profits and margins, similar to DAC as discussed further herein. Such amortization is recorded
in universal life and investment-type product policy fees.
158
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
See “— Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles” for a discussion of
negative VOBA.
Recognition of Insurance Revenues and Deposits
Premiums related to traditional life, annuity contracts with life contingencies, long-duration accident & health, and
credit insurance policies are recognized as revenues when due from policyholders. Policyholder benefits and expenses
are provided to recognize profits over the estimated lives of the insurance policies. When premiums are due over a
significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized
into earnings in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy
benefit payments.
Premiums related to short-duration non-medical health and disability, accident & health, and certain credit insurance
contracts are recognized on a pro rata basis over the applicable contract term.
Deposits related to universal life and investment-type products are credited to policyholder account balances.
Revenues from such contracts consist of fees for mortality, policy administration and surrender charges and are recorded
in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are
charged to earnings include interest credited and benefit claims incurred in excess of related policyholder account
balances.
Premiums related to the Company’s former property and casualty contracts are recognized as revenue on a pro rata
basis over the applicable contract term. Unearned premiums, representing the portion of premium written related to the
unexpired coverage, are included in future policy benefits. See Note 3 for information on the Company’s business
dispositions.
All revenues and expenses are presented net of reinsurance, as applicable.
Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles
The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are
related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include:
•
•
•
•
incremental direct costs of contract acquisition, such as commissions;
the portion of an employee’s total compensation and benefits related to time spent selling, underwriting or
processing the issuance of new and renewal insurance business only with respect to actual policies acquired or
renewed;
other essential direct costs that would not have been incurred had a policy not been acquired or renewed; and
the costs of direct-response advertising, the primary purpose of which is to elicit sales to customers who could be
shown to have responded specifically to the advertising and that results in probable future benefits.
All other acquisition-related costs, including those related to general advertising and solicitation, market research,
agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed
as incurred.
VOBA is an intangible asset resulting from a business combination that 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. 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 with the purchased business may
vary from these projections.
159
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
DAC and VOBA are amortized as follows:
Products:
• Nonparticipating and non-dividend-paying traditional contracts:
In proportion to the following over estimated lives of the contracts:
Actual and expected future gross premiums.
• Term insurance
• Nonparticipating whole life insurance
• Traditional group life insurance
• Non-medical health insurance
• Accident & health insurance
• Participating, dividend-paying traditional contracts
• Fixed and variable universal life contracts
• Fixed and variable deferred annuity contracts
• Credit insurance contracts
• Property and casualty insurance contracts (prior to the disposition
of the Company’s property and casualty business. See Note 3.)
• Other short-duration contracts
Actual and expected future gross margins.
Actual and expected future gross profits.
Actual and future earned premiums.
See Note 5 for additional information on DAC and VOBA amortization. Amortization of DAC and VOBA is included
in other expenses.
The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA
are aggregated on the financial statements for reporting purposes.
The Company generally has two different types of sales inducements which are included in other assets: (i) the
policyholder receives a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a
specified percentage of the customer’s deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost
averaging method than would have been received based on the normal general account interest rate credited. The Company
defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used
to amortize DAC. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or
more frequently if circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales
inducements (“DSI”) to determine the recoverability of the asset.
Value of distribution agreements acquired (“VODA”) is reported in other assets and represents the present value of
expected future profits associated with the expected future business derived from the distribution agreements acquired as
part of a business combination. Value of customer relationships acquired (“VOCRA”) is also reported in other assets and
represents the present value of the expected future profits associated with the expected future business acquired through
existing customers of the acquired company or business. The VODA and VOCRA associated with past business
combinations are amortized over the assets’ useful lives ranging from nine to 40 years and such amortization is included in
other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews
VODA and VOCRA to determine whether the asset is impaired.
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. The estimated fair value of the in-force contract obligations is based on
projections by each block of business. Negative VOBA is amortized over the policy period in proportion to the
approximate consumption of losses included in the liability usually expressed in terms of insurance in-force or account
value. Such amortization is recorded as an offset in other expenses.
Reinsurance
For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification
against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under
reinsurance agreements do not discharge the Company’s obligations as the primary insurer. The Company reviews 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.
160
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the
difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying
contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance
is amortized on a basis consistent with the methodologies and assumptions used for amortizing DAC related to the
underlying reinsured contracts. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as
amounts paid (received) related to new business, are recorded as ceded (assumed) premiums; and ceded (assumed)
premiums, reinsurance and other receivables (future policy benefits) are established.
For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts
paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums. Ceded (assumed)
unearned premiums are reflected as a component of premiums, reinsurance and other receivables (future policy benefits).
Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of
insurance protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria for reinsurance
accounting, amounts paid (received) in excess of the related insurance liabilities ceded (assumed) are recognized
immediately as a loss and are reported in the appropriate line item within the statement of operations. Any gain on such
retroactive agreement is deferred and is amortized as part of DAC, primarily using the recovery method.
Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other
receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance
agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the
reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the
reinsurance agreements, or when events or changes in circumstances indicate that its carrying amount may not be
recoverable, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable
balances are stated net of allowances for uncollectible reinsurance, consistent with credit loss guidance which requires
recording an allowance for credit loss (“ACL”).
Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are
net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other expenses.
If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a
significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits
received are included in other liabilities and deposits made are included within premiums, reinsurance and other
receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are
adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the
Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through
other revenues or other expenses, as appropriate.
Investments
Net Investment Income
Net investment income includes primarily interest income, including amortization of premium and accretion of
discount, prepayment fees, dividend income, rental income and equity method income and is net of related investment
expenses. Net investment income also includes, to a lesser extent, (i) realized gains (losses) on investments sold or
disposed and (ii) unrealized gains (losses) recognized in earnings, representing changes in estimated fair value, primarily
for Unit-linked investments (defined below) and fair value option (“FVO”) securities (“FVO Securities”).
Net Investment Gains (Losses)
Net investment gains (losses) include primarily (i) realized gains (losses) from sales and disposals of investments,
which are determined by specific identification, (ii) intent-to-sell impairment losses on fixed maturity securities
available-for-sale (“AFS”) and impairment losses on all other asset classes and, to a lesser extent, (iii) recognized gains
(losses). Recognized gains (losses) are primarily comprised of the change in the ACL and unrealized gains (losses) for
certain investments for which changes in estimated fair value are recognized in earnings. Changes in the ACL includes
both (i) provisions for credit loss on fixed maturity securities AFS, mortgage loans and leveraged and direct financing
leases and (ii) subsequent changes in the ACL. Unrealized gains (losses), representing changes in estimated fair value
recognized in earnings, primarily relate to equity securities and certain other limited partnership interests and real estate
joint ventures.
161
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Net investment gains (losses) also include non-investment portfolio gains (losses) which do not relate to the
performance of the investment portfolio, including gains (losses) from sales and divestitures of businesses and
impairment of property, equipment, leasehold improvements and right-of-use (“ROU”) lease assets.
Accrued Investment Income
Accrued investment income is presented separately on the consolidated balance sheet and excluded from the
carrying value of the related investments, primarily fixed maturity securities and mortgage loans.
Fixed Maturity Securities
The majority of the Company’s fixed maturity securities are classified as AFS and are reported at their estimated fair
value. Changes in the estimated fair value of these securities not recognized in earnings representing unrecognized
unrealized investment gains (losses) are recorded as a separate component of other comprehensive income
(loss) (“OCI”), net of policy-related amounts and deferred income taxes. All security transactions are recorded on a trade
date basis. Sales of securities are determined on a specific identification basis.
Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective
yield method giving effect to amortization of premium and accretion of discount, and is based on the estimated economic
life of the securities, which for mortgage-backed and asset-backed securities considers the estimated timing and amount
of prepayments of the underlying loans. See Note 8 “— Fixed Maturity Securities AFS — Methodology for
Amortization of Premium and Accretion of Discount on Structured Products.” The amortization of premium and
accretion of discount also take into consideration call and maturity dates. Generally, the accrual of income is ceased and
accrued investment income that is considered uncollectible is recognized as a charge within net investment gains (losses)
when securities are impaired.
The Company periodically evaluates these securities for impairment. The assessment of whether impairments have
occurred is based on management’s case-by-case evaluation of the underlying reasons for the decline in estimated fair
value as described in Note 8 “— Fixed Maturity Securities AFS — Evaluation of Fixed Maturity Securities AFS for
Credit Loss.”
For securities in an unrealized loss position, a credit loss is recognized in earnings within net investment gains
(losses) when it is anticipated that the amortized cost, excluding accrued investment income, will not be recovered.
When either: (i) the Company has the intent to sell the security; or (ii) it is more likely than not that the Company will be
required to sell the security before recovery, the reduction of amortized cost and the loss recognized in earnings is the
entire difference between the security’s amortized cost and estimated fair value. If neither of these conditions exists, the
difference between the amortized cost of the security and the present value of projected future cash flows expected to be
collected is recognized in earnings as a credit loss by establishing an ACL with a corresponding charge recorded in net
investment gains (losses). However, the ACL is limited by the amount that the fair value is less than the amortized cost.
This limitation is known as the “fair value floor.” If the estimated fair value is less than the present value of projected
future cash flows expected to be collected, this portion of the decline in value related to other-than-credit
factors (“noncredit loss”) is recorded in OCI as an unrecognized loss.
For purchased credit deteriorated (“PCD”) fixed maturity securities AFS and financing receivables, an ACL is
established at acquisition, which is added to the purchase price to establish the initial amortized cost of the investment
and is not recognized in earnings.
Equity Securities
Equity securities are reported at their estimated fair value, with unrealized gains (losses) representing changes in
estimated fair value recognized in net investment gains (losses). Sales of securities are determined on a specific
identification basis. Dividends are recognized in net investment income when declared.
Contractholder-Directed Equity Securities and Fair Value Option Securities
Contractholder-directed equity securities and FVO Securities (collectively, “Unit-linked and FVO Securities”) are
investments for which the FVO has been elected, or which are otherwise required to be carried at estimated fair value,
and include:
162
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
•
•
investments supporting unit-linked variable annuity
contractholder-directed
liabilities (“Unit-linked
investments”) which do not qualify for presentation and reporting as separate account summary total assets and
liabilities. These investments are primarily equity securities (including mutual funds). The investment returns on
these investments inure to contractholders and are offset by a corresponding change in policyholder account
balances through interest credited to policyholder account balances; and
type
fixed maturity and equity securities held-for-investment by the general account to support asset and liability
management strategies for certain insurance products and investments in certain separate accounts.
Interest income and dividend income on these investments are included in net investment income. Realized gains
(losses) on investments sold or disposed and unrealized gains (losses), representing changes in estimated fair value, are
both recognized in net investment income for Unit-linked investments and FVO Securities. Sales of these investments
are determined on a specific identification basis.
Mortgage Loans
The Company recognizes an ACL in earnings within net investment gains (losses) at time of purchase based on
expected lifetime credit loss on financing receivables carried at amortized cost, including, but not limited to, mortgage
loans and leveraged and direct financing leases, in an amount that represents the portion of the amortized cost basis of
such financing receivables that the Company does not expect to collect, resulting in financing receivables being
presented at the net amount expected to be collected.
The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural
and residential. Also included in commercial mortgage loans are revolving line of credit loans collateralized by
commercial properties. The accounting policies that are applicable to all portfolio segments are presented below and the
accounting policies related to each of the portfolio segments are included in Note 8.
Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred
fees or expenses, and are net of ACL. Interest income and prepayment fees are recognized when earned. Interest income
is recognized using an effective yield method giving effect to amortization of premium and deferred expenses and
accretion of discount and deferred fees.
The Company ceases to accrue interest when the collection of interest is not considered probable, which is based on
a current evaluation of the status of the borrower, including the number of days past due. When a loan is placed on non-
accrual status, uncollected past due accrued interest income that is considered uncollectible is charged-off against net
investment income. Generally, the accrual of interest income resumes after all delinquent amounts are paid and
management believes all future principal and interest payments will be collected. The Company records cash receipts on
non-accruing loans in accordance with the loan agreement. The Company records charge-offs of mortgage loan balances
not considered collectible upon the realization of a credit loss, for commercial and agricultural mortgage loans typically
through foreclosure or after a decision is made to sell a loan, and for residential mortgage loans, typically after
considering the individual consumer’s financial status. The charge-off is recorded in net investment gains (losses), net of
amounts recognized in ACL. Cash recoveries on principal amounts previously charged-off are generally reported in net
investment gains (losses).
Also included in mortgage loans are residential mortgage loans for which the FVO was elected, and which are stated
at estimated fair value. Changes in estimated fair value are recognized in net investment income.
Mortgage loans that are designated as held-for-sale are carried at the lower of amortized cost or estimated fair value.
Policy Loans
Policy loans are stated at unpaid principal balances. Interest income is recognized as earned using the contractual
interest rate. Generally, accrued interest is capitalized on the policy’s anniversary date. Valuation allowances are not
established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance
policies. Any unpaid principal and accrued interest are deducted from the cash surrender value or the death benefit prior
to settlement of the insurance policy.
163
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Real Estate
Real estate is stated at cost less accumulated depreciation. Depreciation is recognized on a straight-line basis,
without any provision for salvage value, over the estimated useful life of the asset (typically up to 55 years). Rental
income is recognized on a straight-line basis over the term of the respective leases. The Company periodically reviews its
real estate for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying
value may not be recoverable. Properties whose carrying values are greater than their estimated undiscounted cash flows
are written down to their estimated fair value, which is generally computed using the present value of expected future
cash flows discounted at a rate commensurate with the underlying risks.
Real estate for which the Company commits to a plan to sell within one year and actively markets in its current
condition for a reasonable price in comparison to its estimated fair value is classified as held-for-sale and is not
depreciated. Real estate held-for-sale is stated at the lower of depreciated cost or estimated fair value less expected
disposition costs.
Real Estate Joint Ventures and Other Limited Partnership Interests
The Company uses the equity method of accounting or the FVO for real estate joint ventures and other limited
partnership interests (“investee”) when it has more than a minor ownership interest or more than a minor influence over
the investee’s operations but does not hold a controlling financial interest, including when the Company is not deemed
the primary beneficiary of a VIE. Under the equity method, the Company recognizes in earnings within net investment
income its share of the investee’s earnings. Contributions paid by the Company increase carrying value and distributions
received by the Company reduce carrying value. The Company generally recognizes its share of the investee’s earnings
on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the
investee’s reporting period differs from the Company’s reporting period.
The Company accounts for its interest in real estate joint ventures and other limited partnership interests in which it
has virtually no influence over the investee’s operations at estimated fair value. Unrealized gains (losses), representing
changes in estimated fair value of these investments, are recognized in earnings within net investment gains (losses). Due
to the nature and structure of these investments, they do not meet the characteristics of an equity security in accordance
with applicable accounting guidance.
The Company consolidates real estate joint ventures and other limited partnership interests of which it holds a
controlling financial interest, or it is deemed the primary beneficiary of a VIE. Assets of certain consolidated real estate
joint ventures and other limited partnership interests are recorded at estimated fair value. The Company elects the FVO
for certain real estate joint ventures that are managed on a total return basis. Unrealized gains (losses) representing
changes in estimated fair value for real estate joint ventures and other limited partnership interests recorded at estimated
fair value are recognized in net investment income.
The Company routinely evaluates its equity method investments for impairment whenever events or changes in
circumstances indicate that the carrying amount is not recoverable and exceeds its estimated fair value. When it is
determined an equity method investment has had a loss in value that is other than temporary, an impairment is
recognized. Such an impairment is charged to net investment gains (losses).
Short-term Investments
Short-term investments include highly liquid securities and other investments with remaining maturities of one year
or less, but greater than three months, at the time of purchase. Securities included within short-term investments are
stated at estimated fair value, while other investments included within short-term investments are stated at amortized cost
less ACL, which approximates estimated fair value.
164
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Other Invested Assets
Other invested assets consist principally of the following:
•
•
•
•
•
•
•
•
Freestanding derivatives with positive estimated fair values which are described in “— Derivatives” below.
Tax credit and renewable energy partnerships which derive a significant source of investment return in the form of
income tax credits or other tax incentives. Where tax credits are guaranteed by a creditworthy third party, the
investment is accounted for under the effective yield method. Otherwise, the investment is accounted for under the
equity method. See Note 19.
Annuities funding structured settlement claims represent annuities funding claims assumed by the Company in its
capacity as a structured settlements assignment company. The annuities are stated at their contract value, which
represents the present value of the future periodic claim payments to be provided. The net investment income
recognized reflects the amortization of discount of the annuity at its implied effective interest rate.
Investments in operating joint ventures that engage in insurance underwriting activities are accounted for under the
equity method.
Direct financing leases net investment is equal to the minimum lease payment receivables plus the unguaranteed
residual value, less the unearned income, less ACL. Income is recognized by applying the pre-tax internal rate of
return to the investment balance. The Company regularly reviews its minimum lease payment receivables for credit
loss and residual value for impairments. Certain direct financing leases are linked to inflation.
Leveraged leases net investment is equal to the minimum lease payment receivables plus the unguaranteed residual
value, less the unearned income, less ACL and is reported net of non-recourse debt. Income is recognized by
applying the leveraged lease’s estimated rate of return to the net investment in the lease in those periods in which the
net investment at the beginning of the period is positive. Leveraged leases derive investment returns in part from
their income tax benefit. The Company regularly reviews its minimum lease payment receivables for credit loss and
residual value for impairments.
Investments in Federal Home Loan Bank of New York (“FHLBNY”) common stock are carried at redemption value
and are considered restricted investments until redeemed by FHLBNY. Dividends are recognized in net investment
income when declared.
Funds withheld represent a receivable for amounts contractually withheld by ceding companies in accordance with
reinsurance agreements. The Company recognizes interest on funds withheld at rates defined by the terms of the
agreement which may be contractually specified or directly related to the underlying investments.
Securities Lending Transactions and Repurchase Agreements
The Company accounts for securities lending transactions and repurchase agreements as financing arrangements and
the associated liability is recorded at the amount of cash received. The securities loaned or sold under these agreements
are included in invested assets. Income and expenses associated with securities lending transactions and repurchase
agreements are recognized as investment income and investment expense, respectively, within net investment income.
Securities Lending Transactions
The Company enters into securities lending transactions, whereby securities are loaned to unaffiliated financial
institutions. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to
102% of the estimated fair value of the securities loaned, and maintains it at a level greater than or equal to 100% for
the duration of the loan. Securities loaned under such transactions may be sold or re-pledged by the transferee. The
Company is liable to return to the counterparties the cash collateral received. Security collateral on deposit from
counterparties in connection with securities lending transactions may not be sold or re-pledged, unless the counterparty
is in default, and is not reflected on the Company’s consolidated financial statements. The Company monitors the ratio
of the collateral held to the estimated fair value of the securities loaned on a daily basis and additional collateral is
obtained as necessary throughout the duration of the loan.
165
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Repurchase Agreements
The Company participates in short-term repurchase agreements with unaffiliated financial institutions. Under
these agreements, the Company sells securities and receives cash in an amount generally equal to 85% to 100% of the
estimated fair value of the securities sold at the inception of the transaction, with a simultaneous agreement to
repurchase such securities at a future date or on demand in an amount equal to the cash initially received plus interest.
The Company monitors the ratio of the cash held to the estimated fair value of the securities sold throughout the
duration of the transaction and additional cash or securities are obtained as necessary. Securities sold under such
transactions may be sold or re-pledged by the transferee.
Derivatives
Freestanding Derivatives
Freestanding derivatives are carried on the Company’s balance sheet either as assets within other invested assets or
as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts
recognized for derivatives executed with the same counterparty under the same master netting agreement.
Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However,
accruals that are not scheduled to settle within one year are included with the derivative’s carrying value in other
invested assets or other liabilities.
If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge
accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as
follows:
Statement of Operations Presentation:
Policyholder benefits and claims
Net investment income
Derivative:
• Economic hedges of variable annuity guarantees included
in future policy benefits
• Economic hedges of equity method investments in joint
ventures
• Derivatives held within Unit-linked investments
• Economic hedges of FVO Securities which are linked to
equity indices
Hedge Accounting
To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its
risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge.
Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are
as follows:
•
•
•
Fair value hedge - a hedge of the estimated fair value of a recognized asset or liability - in the same line item as
the earnings effect of the hedged item. The carrying value of the hedged recognized asset or liability is adjusted
for changes in its estimated fair value due to the hedged risk.
Cash flow hedge - a hedge of a forecasted transaction or of the variability of cash flows to be received or paid
related to a recognized asset or liability - in OCI and reclassified into the statement of operations when the
Company’s earnings are affected by the variability in cash flows of the hedged item.
Net investment in a foreign operation (“NIFO”) hedge - in OCI, consistent with the translation adjustment for the
hedged net investment in the foreign operation.
The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately
reported on the statement of operations within interest income or interest expense to match the location of the hedged
item. Accruals on derivatives in net investment hedges are recognized in OCI.
166
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated
risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the
hedging instrument’s effectiveness. A derivative designated as a hedging instrument must be assessed as being highly
effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at
least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness are also
subject to interpretation and estimation and different interpretations or estimates may have a material effect on the
amount reported in net income.
The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer
highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative
expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur;
or (iv) the derivative is de-designated as a hedging instrument.
When hedge accounting is discontinued because it is determined that the derivative is not highly effective in
offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the
balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses).
The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes
in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into
income over the remaining life of the hedged item. The changes in estimated fair value of derivatives related to
discontinued cash flow hedges remain in OCI unless it is probable that the hedged forecasted transaction will not occur.
When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur
on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its
estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred
gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction
that is no longer probable of occurring are recognized immediately in net investment gains (losses).
In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value
on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative
gains (losses).
Embedded Derivatives
The Company issues certain products, which include variable annuities, and investment contracts and is a party to
certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded
derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host
contract and accounted for as a freestanding derivative if:
•
•
•
the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair
value recorded in earnings;
the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host
contract; and
a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument.
Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and
changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to
properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried
on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net
investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on
the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net
investment gains (losses) or net investment income if that contract contains an embedded derivative that requires
bifurcation. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee
fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any
additional fees represent “excess” fees and are reported in universal life and investment-type product policy fees.
167
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in
the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on
the measurement date. In most cases, the exit price and the transaction (or entry) price will be the same at initial
recognition.
Subsequent to initial recognition, fair values are based on unadjusted quoted prices for identical assets or liabilities in
active markets that are readily and regularly obtainable. When such unadjusted quoted prices are not available, estimated
fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical assets or
liabilities, 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 significant management judgment are used to
determine the estimated fair value of assets and liabilities. These unobservable inputs can be based on management’s
judgment, assumptions or estimation and may not be observable in market activity. Unobservable inputs are based on
management’s assumptions about the inputs market participants would use in pricing the assets.
Goodwill
Goodwill represents the future economic benefits arising from net assets acquired in a business combination that are
not individually identified and recognized. Goodwill is calculated as the excess of the cost of the acquired entity over the
estimated fair value of such assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment
at least annually, or more frequently if events or circumstances indicate that there may be justification for conducting an
interim test. The Company performs its annual goodwill impairment testing during the third quarter based upon data as of
the close of the second quarter. Goodwill associated with a business acquisition is not tested for impairment during the year
the business is acquired unless there is a significant identified impairment event.
The Company tests goodwill for impairment by performing a qualitative assessment and/or a quantitative test. The
qualitative impairment assessment is an assessment of historical information and relevant current events and circumstances,
including economic, industry and market considerations, 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 impairment assessment for some or all of its reporting units and perform a quantitative impairment test. In
performing the quantitative impairment test, the Company may determine the fair values of its reporting units by applying a
market multiple, discounted cash flow, and/or an actuarial-based valuation approach. The valuation methodologies utilized
are subject to key judgments and assumptions that are sensitive to change.
The impairment test is performed at the reporting unit level, which is the operating segment or a business one level
below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that
level. For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value,
an impairment charge would be recognized for the amount by which the carrying value exceeds the reporting unit’s fair
value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit.
Additionally, the Company will consider income tax effects from any tax deductible goodwill on the carrying value of the
reporting unit when measuring the goodwill impairment loss, if applicable.
On an ongoing basis, the Company evaluates potential triggering events that may affect the estimated fair value of the
Company’s reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse economic, industry
and market conditions for certain reporting units may have a significant impact on the estimated fair value of these
reporting units and could result in future impairments of goodwill.
Employee Benefit Plans
Certain subsidiaries of MetLife, Inc. sponsor defined benefit pension plans and other postretirement benefit plans
covering eligible employees. Measurement dates used for all of the subsidiaries’ defined benefit pension and other
postretirement benefit plans correspond with the fiscal year ends of sponsoring subsidiaries, which is December 31 for
U.S. and non-U.S. subsidiaries.
The Company recognizes the funded status of each of its defined benefit pension and other postretirement benefit
plans, measured as the difference between the fair value of plan assets and the benefit obligation, which is the projected
benefit obligation (“PBO”) for pension benefits and the accumulated postretirement benefit obligation (“APBO”) for other
postretirement benefits in other assets or other liabilities.
168
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Actuarial gains and losses result from differences between each plan’s actual experience and the assumed experience
on plan assets or PBO/APBO during a particular period and are recorded in accumulated OCI (“AOCI”). To the extent
such gains and losses exceed 10% of the greater of the PBO/APBO or the estimated fair value of plan assets, the excess is
amortized into net periodic benefit costs, generally over the average projected future service years of the active employees.
In addition, prior service costs (credit) are recognized in AOCI at the time of the amendment and then amortized to net
periodic benefit costs over the average projected future service years of the active employees.
Net periodic benefit costs are determined using management’s estimates and actuarial assumptions and are comprised
of service cost, interest cost, settlement and curtailment costs, expected return on plan assets, amortization of net actuarial
(gains) losses, and amortization of prior service costs (credit). Fair value is used to determine the expected return on plan
assets.
The subsidiaries also sponsor defined contribution plans for substantially all U.S. employees under which a portion of
employee contributions is matched. Applicable matching contributions are made each payroll period. Accordingly, the
Company recognizes compensation cost for current matching contributions. As all contributions are transferred currently as
earned to the defined contribution plans, no liability for matching contributions is recognized on the balance sheets.
Income Tax
MetLife, Inc. and its includable life insurance and non-life insurance subsidiaries file a consolidated U.S. federal
income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended. Non-includable
subsidiaries file either separate individual corporate tax returns or separate consolidated tax returns.
The Company’s accounting for income taxes represents management’s best estimate of various events and
transactions.
Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of
assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in
the years the temporary differences are expected to reverse.
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 against
deferred tax assets 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:
•
•
•
•
•
•
•
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 carryforward can be utilized in the various taxing jurisdictions;
future taxable income exclusive of reversing temporary differences and carryforwards;
future reversals of existing taxable temporary differences;
taxable income in prior carryback years; and
tax planning strategies, including the intent and ability to hold certain AFS debt securities until they recover in
value.
The Company may be required to change its 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, the effect of changes in tax laws, tax regulations, or interpretations of
such laws or regulations, is recognized in net income tax expense (benefit) in the period of change.
The Company determines 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 can be recorded on the financial statements. A tax position
is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized
tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to
earnings in the period that such determination is made.
169
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax
expense.
Litigation Contingencies
The Company is a defendant in a large number of litigation matters and is involved in a number of regulatory
investigations. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be
reasonably estimated. Except as otherwise disclosed in Note 21, legal costs are recognized as incurred. On a quarterly and
annual basis, the Company reviews relevant information with respect to liabilities for litigation, regulatory investigations
and litigation-related contingencies to be reflected on the Company’s consolidated financial statements.
Other Accounting Policies
Stock-Based Compensation
The Company grants certain employees and directors stock-based compensation awards under various plans, subject
to vesting conditions. The Company recognizes compensation expense in an amount fixed at grant date or remeasured
quarterly as described in Note 16. The Company generally recognizes this expense over the vesting period. However, the
Company truncates the expense period to the date the employee attained age-and-service criteria to exercise or receive
payment for the award regardless of continued employment. In such a case, the Company does not accelerate award
exercise or payment timing. The Company also takes an estimation of forfeitures into account.
Cash and Cash Equivalents
The Company considers highly liquid securities and other investments purchased with an original or remaining
maturity of three months or less at the date of purchase to be cash equivalents. Securities included within cash
equivalents are stated at estimated fair value, while other investments included within cash equivalents are stated at
amortized cost which approximates estimated fair value.
Property, Equipment, Leasehold Improvements and Computer Software
Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less
accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated
useful lives of the assets, as appropriate. The estimated life is generally 40 years for company occupied real estate
property, the shorter of the useful life or remaining lease term up to 10 years for leasehold improvements, and from three
to seven years for all other property and equipment. The cost basis of the property, equipment and leasehold
improvements was $2.5 billion and $2.7 billion at December 31, 2022 and 2021, respectively. Accumulated depreciation
and amortization of property, equipment and leasehold improvements was $1.6 billion at both December 31, 2022 and
2021. Related depreciation and amortization expense was $171 million, $192 million and $194 million for the years
ended December 31, 2022, 2021 and 2020, respectively. The Company recognized leasehold improvement impairment
charges of $3 million, $45 million, and $0 for the years ended December 31, 2022, 2021 and 2020, respectively.
Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased
software costs, as well as certain internal and external costs incurred to develop internal-use computer software during
the application development stage, are capitalized. Such costs are amortized over a four-year period using the straight-
line method. The cost basis of computer software was $4.4 billion and $4.0 billion at December 31, 2022 and 2021,
respectively. Accumulated amortization of capitalized software was $2.8 billion and $2.7 billion at December 31, 2022
and 2021, respectively. Related amortization expense was $252 million, $234 million and $207 million for the years
ended December 31, 2022, 2021 and 2020, respectively.
Leases
The Company, as lessee, has entered into various lease and sublease agreements for office space and equipment. At
contract inception, the Company determines that an arrangement contains a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration. For contracts that contain a lease,
the Company recognizes the ROU asset in other assets and the lease liability in other liabilities. The Company evaluates
whether a ROU asset is impaired when events or changes in circumstances indicate that its carrying amount may not be
recoverable. Leases with an initial term of 12 months or less are not recorded on the balance sheet and the associated
lease costs are recorded as an expense on a straight-line basis over the lease term.
170
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent
the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are determined
using the Company’s incremental borrowing rate based upon information available at commencement date to recognize
the present value of lease payments over the lease term. ROU assets also include lease payments and excludes lease
incentives. Lease terms may include options to extend or terminate the lease and are included in the lease measurement
when it is reasonably certain that the Company will exercise that option.
The Company has lease agreements with lease and non-lease components. The Company does not separate lease and
non-lease components and accounts for these items as a single lease component for all asset classes.
The majority of the Company’s leases and subleases are operating leases related to office space. The Company
recognizes lease expense for operating leases on a straight-line basis over the lease term.
Other Revenues
Other revenues primarily include fees related to service contracts from customers for vision fee for service
arrangements, prepaid legal plans, administrative services-only contracts, and investment management services.
Substantially all of the revenue from the services is recognized over time as the applicable services are provided or are
made available to the customers. The revenue recognized includes variable consideration to the extent it is probable that
a significant reversal will not occur. In addition to the service fees, other revenues also include certain stable value fees
and other miscellaneous revenues. These fees and miscellaneous revenues are recognized as earned.
Policyholder Dividends
Policyholder dividends are approved annually by the insurance subsidiaries’ boards of directors. The aggregate
amount of policyholder dividends is related to actual interest, mortality, morbidity and expense experience for the year,
as well as management’s judgment as to the appropriate level of statutory surplus to be retained by the insurance
subsidiaries.
Foreign Currency
Assets, liabilities and operations of foreign affiliates and subsidiaries, as well as investments accounted for under the
equity method, are recorded based on the functional currency of each entity. The determination of the functional
currency is made based on the appropriate economic and management indicators. For most of the Company’s foreign
operations, the local currency is the functional currency. For certain other foreign operations, such as Japan, the local
currency and one or more other currencies qualify as functional currencies. Assets and liabilities of foreign affiliates and
subsidiaries are translated from the functional currency to U.S. dollars at the exchange rates in effect at each year-end
and revenues and expenses are translated at the average exchange rates during the year. The resulting translation
adjustments are charged or credited directly to OCI, net of applicable taxes. Gains and losses from foreign currency
transactions, including the effect of re-measurement of monetary assets and liabilities to the appropriate functional
currency, are reported as part of net investment gains (losses) in the period in which they occur.
Earnings Per Common Share
Basic earnings per common share are computed based on the weighted average number of common shares, or their
equivalent, outstanding during the period. Diluted earnings per common share include the dilutive effect of the assumed
exercise or issuance of stock-based awards using the treasury stock method. Under the treasury stock method, exercise or
issuance of stock-based awards is assumed to occur with the proceeds used to purchase common stock at the average
market price for the period. The difference between the number of shares assumed issued and number of shares assumed
purchased represents the dilutive shares.
Recent Accounting Pronouncements
Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting
standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and
impact of all ASUs. The following tables provide a description of ASUs recently issued by the FASB and the impact of their
adoption on the Company’s consolidated financial statements.
171
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Adopted Accounting Pronouncements
The table below describes the impacts of the ASUs adopted by the Company, effective January 1, 2022.
Standard
ASU 2020-04, Reference Rate
Reform (Topic 848): Facilitation of
the Effects of Reference Rate
Reform on Financial Reporting; as
clarified and amended by ASU
2021-01, Reference Rate Reform
(Topic 848): Scope; as amended by
ASU 2022-06, Reference Rate
Reform (Topic 848)—Deferral of
the Sunset Date of Topic 848
Description
The guidance provides optional expedients
and exceptions for applying GAAP to
contracts, hedging relationships and other
transactions affected by reference rate
reform if certain criteria are met. The
expedients and exceptions provided by the
amendments do not apply to contract
modifications made and hedging
relationships entered into or evaluated after
December 31, 2022, with certain exceptions.
ASU 2021-01 amends the scope of the
recent reference rate reform guidance. New
optional expedients allow derivative
instruments impacted by changes in the
interest rate used for margining, discounting,
or contract price alignment to qualify for
certain optional relief. The amendments in
ASU 2022-06 extend the sunset date of the
reference rate reform optional expedients
and exceptions to December 31, 2024.
Effective Date and
Method of Adoption
Effective for contract
modifications made
between March 12,
2020 and December 31,
2024.
Impact on Financial Statements
The guidance has reduced the operational
and financial impacts of contract
modifications that replace a reference rate,
such as London Interbank Offered Rate
(“LIBOR”), affected by reference rate
reform.
Contract modifications for invested assets
and derivative instruments occurred during
2021 and 2022 and will continue into 2023.
Based on actions taken to date, the adoption
of the guidance has not had a material
impact on the Company’s consolidated
financial statements. The Company does not
expect the adoption of this guidance to have
a material ongoing impact on its
consolidated financial statements.
172
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Future Adoption of Accounting Pronouncements
ASUs not listed below were assessed and either determined to be not applicable or are not expected to have a material
impact on the Company’s consolidated financial statements or disclosures. ASUs issued but not yet adopted as of
December 31, 2022 that are currently being assessed and may or may not have a material impact on the Company’s
consolidated financial statements or disclosures are summarized in the table below.
Standard
ASU 2018-12, Financial Services—
Insurance (Topic 944): Targeted
Improvements to the Accounting for
Long-Duration Contracts, as
amended by ASU 2019-09,
Financial Services—Insurance
(Topic 944): Effective Date, as
amended by ASU 2020-11,
Financial Services—Insurance
(Topic 944): Effective Date and
Early Application; as amended by
ASU 2022-05, Financial Services—
Insurance (Topic 944): Transition
for Sold Contracts
Effective Date and
Method of Adoption
January 1, 2023, to be
applied retrospectively
to January 1, 2021
(with early adoption
permitted). Estimated
impacts from adoption
as of the transition date
of January 1, 2021 are
measured using market
assumptions
appropriate as of that
date. Such estimates do
not reflect changes in
market assumptions
subsequent to
January 1, 2021.
Impact on Financial Statements
The Company’s implementation efforts and the
evaluation of the impacts of the guidance on its
consolidated financial statements, as well as its
systems, processes, and controls, continue to
progress. Given the nature and extent of the
required changes to a significant portion of the
Company’s operations, the adoption of this
guidance is expected to have a material impact on
its financial position, results of operations, and
disclosures.
The Company will adopt the guidance effective
January 1, 2023. The modified retrospective
approach will be used, except in regard to market
risk benefits where the Company will use the full
retrospective approach. Based upon these transition
methods, the Company currently estimates that the
January 1, 2021 transition date impact from
adoption is expected to result in a decrease to total
equity of approximately $22.5 billion, net of
income tax.
The expected decrease in total equity includes the
estimated impact to AOCI which, as of the
transition date, is expected to result in a decrease of
approximately $17.5 billion, net of income tax. The
most significant drivers of the expected decrease in
AOCI are the anticipated impacts of the changes in
the discount rates as of the transition date to be
used in measuring the liability for future policy
benefits for traditional and limited payment
contracts and the non-performance risk in the
valuation of the Company’s market risk benefits.
The expected decrease in AOCI is expected to be
partially offset by the removal of loss recognition
balances recorded in AOCI related to unrealized
investment gains associated with certain long-
duration products.
The expected decrease in total equity also includes
the estimated impact to retained earnings which,
from adoption, is expected to result in a decrease of
approximately $5.0 billion, net of income tax. This
decrease results from the requirement to account
for variable annuity guarantees as market risk
benefits measured at fair value (except for the
changes in fair value already recognized under an
existing accounting model) and other valuation
impacts to the liability for future policy benefits.
As of December 31, 2022, primarily as a result of
increases in market interest rates from the January
1, 2021 transition date to December 31, 2022, we
estimate that the transition date reduction to
retained earnings will significantly reverse, and
that the transition date reduction to AOCI will fully
reverse.
Description
The guidance (i) prescribes the
discount rate to be used in measuring
the liability for future policy benefits
for traditional and limited payment
long-duration contracts, and requires
assumptions for those liability
valuations to be updated after contract
inception, (ii) requires more market-
based product guarantees (“market
risk benefits”) on certain separate
account and other account balance
long-duration contracts to be
accounted for at fair value, (iii)
simplifies the amortization of DAC
for virtually all long-duration
contracts, and (iv) introduces certain
financial statement presentation
requirements, as well as significant
additional quantitative and qualitative
disclosures.
Market risk benefits are contracts or
contract features that guarantee
benefits, such as guaranteed minimum
benefits, in addition to an account
balance which expose insurance
companies to other than nominal
capital market risk and protect the
contractholder from the same risk.
Certain contracts or contract features
to be identified as “market risk
benefits” are currently accounted for
as embedded derivatives and
measured at fair value, while others
will transition to fair value
measurement upon the adoption of
ASU 2018-12. The methods for
determining the fair value of contract
features considered to be market risk
benefits are similar to the approaches
used if it was previously accounted
for as an embedded derivative; except
that changes in fair value attributable
to nonperformance risk now will be
recognized directly in OCI.
The amendments in ASU 2019-09
defer the effective date of ASU
2018-12 to January 1, 2022 for all
entities, and the amendments in ASU
2020-11 further defer the effective
date of ASU 2018-12 for an
additional year to January 1, 2023 for
all entities. The amendments in ASU
2022-05 allow entities to make an
accounting policy election to exclude
certain sold or disposed contracts or
legal entities from application of the
transition guidance. The Company
does not intend to make such an
election.
173
Table of Contents
MetLife, Inc.
1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)
Notes to the Consolidated Financial Statements — (continued)
Standard
ASU 2022-03, Fair Value
Measurement (Topic 820): Fair
Value Measurement of Equity
Securities Subject to
Contractual Sale Restrictions
ASU 2022-02, Financial
Instruments—Credit Losses
(Topic 326): Troubled Debt
Restructurings and Vintage
Disclosures
Effective Date and
Method of Adoption
January 1, 2024, to be
applied prospectively
with any adjustments
from the adoption of
the amendments
recognized in earnings
and disclosed on the
date of adoption (with
early adoption
permitted).
January 1, 2023, to be
applied prospectively;
however, for the
transition method
related to the
recognition and
measurement of TDRs,
an entity can apply a
modified retrospective
transition method (with
early adoption
permitted).
Description
The amendments in this update clarify
that a contractual restriction on the
sale of an equity security is not
considered part of the unit of account
of the equity security and, therefore,
is not considered in measuring fair
value. In addition, the amendments
clarify that an entity cannot, as a
separate unit of account, recognize
and measure a contractual sale
restriction. The amendments also
require entities that hold equity
securities subject to contractual sale
restrictions to make disclosures about
the fair value of such equity
securities, the nature and remaining
duration of the restriction(s) and the
circumstances that could cause a lapse
in the restriction(s).
The amendments in the new ASU
eliminate the accounting guidance for
troubled debt restructurings (“TDRs”)
by creditors that have adopted the
current expected credit loss guidance
while enhancing disclosure
requirements for certain loan
refinancings and restructurings by
creditors when a borrower is
experiencing financial difficulty. In
addition, the amendments require that
a public business entity disclose
current-period gross write-offs by
year of origination for financing
receivables and net investment in
leases.
Impact on Financial Statements
The Company is continuing to evaluate the impact
of the guidance, and it does not expect the adoption
of the guidance to have a material impact on its
consolidated financial statements.
The Company will adopt the ASU effective
January 1, 2023 and it does not expect the adoption
of the guidance to have a material impact on its
consolidated financial statements.
ASU 2021-08, Business
Combinations (Topic 805):
Accounting for Contract Assets and
Contract Liabilities from Contracts
with Customers
The guidance indicates how to
determine whether a contract liability
is recognized by the acquirer in a
business combination and provides
specific guidance on how to recognize
and measure acquired contract assets
and contract liabilities from revenue
contracts in a business combination.
January 1, 2023, to be
applied prospectively
(with early adoption
permitted).
The Company does not expect the adoption of the
guidance to have a material impact on its
consolidated financial statements.
174
Table of Contents
2. Segment Information
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
MetLife is organized into five segments: U.S.; Asia; Latin America; EMEA; and MetLife Holdings. In addition, the
Company reports certain of its results of operations in Corporate & Other.
U.S.
The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of
customers throughout their lives. These products are sold to corporations and their respective employees, other institutions
and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and
Retirement and Income Solutions (“RIS”).
The Group Benefits business offers products such as term, variable and universal life insurance, dental, group and
individual disability, vision and accident & health insurance.
The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable
value and pension risk transfer products, institutional income annuities, structured settlements, longevity reinsurance
solutions, benefit funding solutions and capital markets investment products.
•
•
Asia
The Asia segment offers a broad range of products and services to both individuals and corporations, as well as to other
institutions, and their respective employees, which include life insurance, accident & health insurance and retirement and
savings.
Latin America
The Latin America segment offers a broad range of products to both individuals and corporations, as well as to other
institutions, and their respective employees, which include life insurance, retirement and savings, accident & health insurance
and credit insurance.
EMEA
The EMEA segment offers products to individuals, corporations, other institutions, and their respective employees,
which include life insurance, accident & health insurance, retirement and savings and credit insurance.
MetLife Holdings
The MetLife Holdings segment consists of operations relating to products and businesses that the Company no longer
actively markets in the United States. These include variable, universal, term and whole life insurance, variable, fixed and
index-linked annuities, and long-term care insurance.
Corporate & Other
Corporate & Other contains various start-up, developing and run-off businesses. Also included in Corporate & Other are:
the excess capital, as well as certain charges and activities, not allocated to the segments (including external integration and
disposition costs, internal resource costs for associates committed to acquisitions and dispositions and enterprise-wide
strategic initiatives), interest expense related to the majority of the Company’s outstanding debt, expenses associated with
certain legal proceedings and income tax audit issues, the elimination of intersegment amounts (which generally relate to
affiliated reinsurance, investment expenses and intersegment loans bearing interest rates commensurate with related
borrowings), and the Company’s investment management business (through which the Company provides public fixed
income, private capital and real estate investment solutions to institutional investors worldwide).
Financial Measures and Segment Accounting Policies
Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP
guidance for segment reporting, adjusted earnings is also the Company’s GAAP measure of segment performance and is
reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the
presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its
performance by highlighting the results of operations and the underlying profitability drivers of the business.
Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax.
175
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
2. Segment Information (continued)
The financial measures of adjusted revenues and adjusted expenses focus on the Company’s primary businesses
principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-
core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of
discontinued operations under GAAP and other businesses that have been or will be sold or exited by MetLife but do not
meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also
include the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and
costs relating to businesses that have been or will be sold or exited by MetLife that do not meet the criteria to be included in
results of discontinued operations under GAAP. Adjusted revenues also excludes net investment gains (losses) and net
derivative gains (losses). Adjusted expenses also excludes goodwill impairments.
The following additional adjustments are made to revenues, in the line items indicated, in calculating adjusted revenues:
•
•
•
Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net
investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees (“GMIB fees”);
Net investment income: (i) includes adjustments for earned income on derivatives and amortization of premium on
derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for
hedge accounting treatment, (ii) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures
accounted for under the equity method, (iii) excludes certain amounts related to contractholder-directed equity
securities, (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP
and (v) includes distributions of profits from certain other limited partnership interests that were previously
accounted for under the cost method, but are now accounted for at estimated fair value, where the change in
estimated fair value is recognized in net investment gains (losses) under GAAP; and
Other revenues is adjusted for settlements of foreign currency earnings hedges and excludes fees received in
association with services provided under transition service agreements (“TSA fees”).
The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses:
•
•
•
•
•
•
Policyholder benefits and claims and policyholder dividends excludes: (i) amortization of basis adjustments
associated with de-designated fair value hedges of future policy benefits, (ii) changes in the policyholder dividend
obligation related to net investment gains (losses) and net derivative gains (losses), (iii) inflation-indexed benefit
adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic
crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass
through adjustments, (iv) benefits and hedging costs related to GMIBs (“GMIB costs”) and (v) market value
adjustments associated with surrenders or terminations of contracts (“Market value adjustments”);
Interest credited to policyholder account balances includes adjustments for earned income on derivatives and
amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for
hedge accounting treatment and excludes certain amounts related to net investment income earned on
contractholder-directed equity securities;
Amortization of DAC and VOBA excludes amounts related to: (i) net investment gains (losses) and net derivative
gains (losses), (ii) GMIB fees and GMIB costs and (iii) Market value adjustments;
Amortization of negative VOBA excludes amounts related to Market value adjustments;
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under
GAAP; and
Other expenses excludes: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements
costs, and (iii) acquisition, integration and other costs. Other expenses includes TSA fees.
Adjusted earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at
acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.
The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which
could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes
the impact related to the timing of certain tax credits, as well as certain tax reforms.
176
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
2. Segment Information (continued)
Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as
Corporate & Other, for the years ended December 31, 2022, 2021 and 2020 and at December 31, 2022 and 2021. The
segment accounting policies are the same as those used to prepare the Company’s consolidated financial statements, except
for adjusted earnings adjustments as defined above. In addition, segment accounting policies include the method of capital
allocation described below.
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 basis upon which capital is deployed. The economic capital model accounts for the unique and
specific nature of the risks inherent in the Company’s business.
The Company’s economic capital model, coupled with considerations of local capital requirements, 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 calibrating required
economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method
for the inclusion of diversification benefits among risk types. The Company’s 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.
Segment net investment income is credited or charged based on the level of allocated equity; however, changes in
allocated equity do not impact the Company’s consolidated net investment income, net income (loss) or adjusted earnings.
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.
177
Table of Contents
2. Segment Information (continued)
Year Ended December 31, 2022
Revenues
Premiums
Universal life and investment-type product policy fees
Net investment income (1)
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
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Interest expense on debt
Other expenses
Total expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjustments to:
Total revenues
Total expenses
Provision for income tax (expense) benefit
Net income (loss)
At December 31, 2022
Total assets
Separate account assets
Separate account liabilities
__________________
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
U.S.
Asia
Latin
America
EMEA
MetLife
Holdings
Corporate
& Other
Total
Adjustments
Total
Consolidated
(In millions)
$
35,548 $
5,568 $
3,226 $
1,964 $
3,066 $
(16) $
49,356 $
41 $
49,397
1,158
7,340
1,756
—
—
1,840
3,909
90
—
—
1,175
1,593
39
—
—
300
160
35
—
—
1,057
4,971
155
—
—
45,802
11,407
6,033
2,459
9,249
36,273
1,789
(77)
59
—
9
3,962
42,015
791
4,752
2,003
(1,524)
1,105
(36)
—
3,153
9,453
576
3,301
335
(499)
339
—
12
1,553
5,041
231
990
71
(411)
333
(5)
—
1,171
2,149
64
6,056
813
(28)
192
—
8
953
7,994
247
$
2,996 $
1,378 $
761 $
246 $
1,008 $
2
216
396
—
—
598
(6)
—
(8)
9
—
909
709
1,613
(356)
(659)
5,532
18,189
2,471
—
—
75,548
51,366
5,011
(2,547)
2,037
(41)
938
11,501
68,265
1,553
5,730
(5,650)
1,226
1,252
2,558
$
53
(2,273)
163
(1,262)
(2,372)
(5,650)
(53)
(1,319)
(11)
(106)
—
—
263
(1,226)
(1,252)
5,585
15,916
2,634
(1,262)
(2,372)
69,898
51,313
3,692
(2,558)
1,931
(41)
938
11,764
67,039
301
$
2,558
U.S.
Asia (2)
Latin
America
EMEA
(In millions)
MetLife
Holdings
Corporate
& Other
Total
$
$
$
252,559 $
150,134 $
61,030 $
61,030 $
8,292 $
8,292 $
63,810 $
39,428 $
39,428 $
16,765 $
149,739 $
33,604 $
3,314 $
3,314 $
33,974 $
33,974 $
— $
— $
666,611
146,038
146,038
(1)
Net investment income from equity method investments represents 5%, 12%, 3% and 6% of segment net investment income for the U.S., Asia, Latin America and
MetLife Holdings segments, respectively.
(2)
Total assets includes $127.1 billion of assets from the Company’s Japan operations which represents 19% of total assets.
178
Table of Contents
2. Segment Information (continued)
Year Ended December 31, 2021
Revenues
Premiums
Universal life and investment-type product policy fees
Net investment income (1)
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
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Interest expense on debt
Other expenses
Total expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjustments to:
Total revenues
Total expenses
Provision for income tax (expense) benefit
Net income (loss)
At December 31, 2021
Total assets
Separate account assets
Separate account liabilities
__________________
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
U.S.
Asia
Latin
America
EMEA
MetLife
Holdings
Corporate
& Other
Total
Adjustments
Total
Consolidated
(In millions)
$
26,358 $
6,421 $
2,609 $
2,271 $
3,333 $
35 $
41,027 $
982 $
42,009
1,140
8,048
1,538
—
—
1,814
5,052
73
—
—
1,109
1,271
41
—
—
395
215
47
—
—
1,101
6,450
257
—
—
37,084
13,360
5,030
2,928
11,141
27,957
1,422
(65)
60
—
7
3,632
33,013
850
5,008
1,995
(1,607)
1,369
(27)
—
3,388
10,126
936
3,143
1,241
6,268
249
(414)
285
—
5
1,401
4,669
70
86
(469)
356
(7)
—
1,324
2,531
96
840
(33)
257
—
5
992
8,329
570
$
3,221 $
2,298 $
291 $
301 $
2,242 $
2
244
420
—
—
701
34
—
(11)
9
—
902
562
1,496
(591)
(204)
195
115
243
1,529
(2,228)
836
1,179
946
(119)
219
—
1
564
2,790
(380)
5,756
21,395
2,619
1,529
(2,228)
71,080
44,830
5,538
(2,718)
2,555
(34)
920
11,863
62,954
1,551
5,561
21,280
2,376
—
—
70,244
43,651
4,592
(2,599)
2,336
(34)
919
11,299
60,164
1,931
8,149
836
(2,790)
380
U.S.
Asia (2)
Latin
America
EMEA
(In millions)
$
6,575
$
6,575
MetLife
Holdings
Corporate
& Other
Total
$
$
$
282,741 $
169,291 $
81,217 $
81,217 $
10,241 $
10,241 $
59,763 $
37,632 $
37,632 $
27,038 $
179,551 $
41,324 $
3,098 $
3,098 $
47,685 $
47,685 $
— $
— $
759,708
179,873
179,873
(1)
Net investment income from equity method investments represents 23%, 30%, 7% and 26% of segment net investment income for the U.S., Asia, Latin America
and MetLife Holdings segments, respectively.
(2)
Total assets includes $142.7 billion of assets from the Company’s Japan operations which represents 19% of total assets.
179
Table of Contents
2. Segment Information (continued)
Year Ended December 31, 2020
Revenues
Premiums
Universal life and investment-type product policy fees
Net investment income (1)
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
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Interest expense on debt
Other expenses
Total expenses
Provision for income tax expense (benefit)
Adjusted earnings
Adjustments to:
Total revenues
Total expenses
Provision for income tax (expense) benefit
Net income (loss)
__________________
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
U.S.
Asia
Latin
America
EMEA
MetLife
Holdings
Corporate
& Other
Total
Adjustments
Total
Consolidated
(In millions)
$
27,265 $
6,571 $
2,265 $
2,259 $
3,600 $
22 $
41,982 $
52 $
42,034
1,070
6,903
957
—
—
1,892
3,938
61
—
—
994
992
38
—
—
433
269
52
—
—
1,073
5,184
238
—
—
36,195
12,462
4,289
3,013
10,095
26,309
1,622
(453)
471
—
7
4,162
32,118
853
5,213
1,834
(1,652)
1,415
(37)
—
3,481
10,254
643
2,406
1,196
6,738
240
(362)
276
—
4
1,318
3,882
127
109
(491)
454
(8)
1
1,344
2,605
81
868
(39)
370
—
6
942
8,885
234
$
3,224 $
1,565 $
280 $
327 $
976 $
3
42
344
—
—
411
(3)
—
(11)
8
—
895
625
1,514
(556)
(547)
138
(211)
159
(110)
1,349
1,377
692
541
(5)
166
—
—
263
1,657
127
5,603
17,117
1,849
(110)
1,349
67,842
42,551
5,214
(3,013)
3,160
(45)
913
12,135
60,915
1,509
5,465
17,328
1,690
—
—
66,465
41,859
4,673
(3,008)
2,994
(45)
913
11,872
59,258
1,382
5,825
1,377
(1,657)
(127)
$
5,418
$
5,418
(1)
Net investment income from equity method investments represents 5%, 12%, 1% and 5% of segment net investment income for the U.S., Asia, Latin America and
MetLife Holdings segments, respectively.
180
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
2. Segment Information (continued)
The following table presents total premiums, universal life and investment-type product policy fees and other revenues
by major product groups of the Company’s segments, as well as Corporate & Other:
Life insurance
Accident & health insurance
Annuities
Other
Total
Years Ended December 31,
2022
2021
(In millions)
2020
$
21,969 $
22,872 $
17,453
16,647
1,547
17,498
7,499
2,515
21,256
15,346
7,916
4,968
$
57,616 $
50,384 $
49,486
The following table presents total premiums, universal life and investment-type product policy fees and other revenues
associated with the Company’s U.S. and foreign operations:
U.S.
Foreign:
Japan
Other
Total
Years Ended December 31,
2022
2021
(In millions)
2020
$
43,319 $
35,252 $
34,717
5,532
8,765
6,426
8,706
6,750
8,019
$
57,616 $
50,384 $
49,486
Revenues derived from one U.S. segment customer were $8.1 billion for the year ended December 31, 2022, which
represented 14% of consolidated premiums, universal life and investment-type product policy fees and other revenues. The
revenue was from a single premium received for a pension risk transfer. Revenues derived from any single 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, 2021 and 2020.
3. Acquisition and Dispositions
Acquisition
Acquisition of Versant Health
On December 30, 2020, the Company completed its acquisition of all of the issued and outstanding capital stock of
Versant Health, Inc. (“Versant Health”), a managed vision care company. Versant Health owns the well-established
marketplace brands, Davis Vision and Superior Vision.
Total revenue of Versant Health represented less than 2% of pro forma total revenue of MetLife for the year ended
December 31, 2020 when evaluated as though the acquisition had occurred at the beginning of the earliest period presented.
Dispositions
Disposition of MetLife Seguros S.A.
In September 2021, the Company sold its wholly-owned Argentinian subsidiary, MetLife Seguros S.A. (“MetLife
Seguros”). In connection with the sale, a loss of $205 million, net of income tax, was recorded for the year ended
December 31, 2021, which is reflected in net investment gains (losses). MetLife Seguros results of operations are reported
in the Latin America segment adjusted earnings through the date of sale.
181
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
3. Acquisition and Dispositions (continued)
Disposition of MetLife Poland and Greece
In July 2021, the Company entered into definitive agreements to sell its wholly-owned subsidiaries in Poland and
Greece (collectively, “MetLife Poland and Greece”) to NN Group N.V. for $738 million in total consideration, including a
pre-closing dividend of $43 million. In January 2022 and April 2022, the Company completed the sales of its wholly-
owned subsidiaries in Greece and Poland, respectively. In connection with the sales, a loss of $25 million, net of income
tax, was recorded for the year ended December 31, 2022, which was reflected in net investment gains (losses) and resulted
in a total loss on the sales of $239 million, net of income tax. MetLife Poland and Greece results of operations are reported
in the EMEA segment adjusted earnings through June 30, 2021. See Note 2 for information on accounting for divested
business.
MetLife Poland and Greece met the criteria in the second quarter of 2021 to be classified as held-for-sale but did not
meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities are included in the
separate held-for-sale line items of the asset and liability sections of the consolidated balance sheet until the quarter in
which the disposition was completed.
The following table summarizes the assets and liabilities held-for-sale:
December 31, 2021
(In millions)
Assets:
Fixed maturity securities available-for-sale
Contractholder-directed equity securities
Other investments
Total investments
Cash and cash equivalents
Deferred policy acquisition costs and value of business acquired
Other
Separate account assets
Total assets held-for-sale
Liabilities:
Future policy benefits
Policyholder account balances
Other policy-related balances
Other
Separate account liabilities
Total liabilities held-for-sale
$
$
$
$
2,043
1,114
118
3,275
69
138
259
3,497
7,238
916
2,005
103
113
3,497
6,634
MetLife Poland and Greece income (loss) before provision for income tax as reflected in the consolidated statements
of operations was $19 million, $50 million and $30 million for the years ended December 31, 2022, 2021 and 2020,
respectively.
Disposition of Metropolitan Property and Casualty Insurance Company
In December 2020, the Company entered into a definitive agreement to sell its wholly-owned subsidiary, Metropolitan
Property and Casualty Insurance Company and certain of its wholly-owned subsidiaries (collectively, “MetLife P&C”) to
Farmers Group, Inc. for $3.9 billion. In addition, the Company and the Farmers Exchanges have established a 10-year
strategic partnership through which the Farmers Insurance Group will offer its personal line products on MetLife’s U.S.
Group Benefits platform which commenced when the transaction closed. MetLife P&C results of operations are reported in
the U.S. segment adjusted earnings through December 31, 2020. See Note 2 for more information on divested businesses.
In April 2021, the Company completed the sale of MetLife P&C. As a result of the sale, the Company recognized a gain of
$1.4 billion ($1.0 billion, net of income tax) in net investment gains (losses) for the year ended December 31, 2021, which
includes customary purchase price adjustments recorded after the date of sale.
182
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
3. Acquisition and Dispositions (continued)
MetLife P&C income (loss) before provision for income tax as reflected in the consolidated statement of operations
was $121 million and $399 million for the years ended December 31, 2021 and 2020, respectively.
Disposition of Joint-stock Company MetLife Insurance Company
In December 2020, the Company entered into an agreement to sell its wholly-owned Russian subsidiary, the Joint-
stock Company MetLife Insurance Company (“MetLife Russia”). In connection with the sale, a loss of $133 million, net of
income tax, was recorded for the year ended December 31, 2020 and is reflected in net investment gains (losses). MetLife
Russia results of operations are reported in the EMEA segment adjusted earnings through December 31, 2020. In January
2021, the Company completed the sale of MetLife Russia.
Disposition of MetLife Seguros de Retiro S.A.
In October 2020, the Company sold one of its wholly-owned Argentinian subsidiaries, MetLife Seguros de Retiro S.A.
(“MetLife Seguros de Retiro”). In connection with the sale, a loss of $162 million, net of income tax, was recorded for the
year ended December 31, 2020. This loss was comprised of a $130 million pre-tax loss, which is reflected in net
investment gains (losses). Additionally, the $162 million loss included a $32 million net tax charge, which is recorded in
the provision for income tax expense (benefit) and included previously deferred tax items and losses which are not
recognized for tax purposes. MetLife Seguros de Retiro’s results of operations are reported in the Latin America segment
adjusted earnings through June 30, 2020. See Note 2 for information on accounting for divested businesses.
4. Insurance
Insurance Liabilities
Insurance liabilities are comprised of future policy benefits, policyholder account balances and other policy-related
balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:
U.S.
Asia
Latin America
EMEA
MetLife Holdings
Corporate & Other
Total
December 31,
2022
2021
(In millions)
$
171,693 $
125,523
17,674
10,635
100,407
1,029
162,999
125,839
15,564
13,031
102,291
1,221
$
426,961 $
420,945
183
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
4. Insurance (continued)
Future policy benefits are measured as follows:
Product Type:
Participating life
Nonparticipating life
Individual and group
traditional fixed annuities
after annuitization
Non-medical health
insurance
Disabled lives
Measurement Assumptions:
Aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated
based upon the non-forfeiture interest rate, ranging from 3% to 7% for U.S. businesses and less
than 1% to 10% for non-U.S. businesses and mortality rates guaranteed in calculating the cash
surrender values described in such contracts); and (ii) the liability for terminal dividends for U.S.
businesses.
Aggregate of the present value of future expected benefit payments and related expenses less the
present value of future expected net premiums. Assumptions as to mortality and persistency are
based upon the Company’s experience when the basis of the liability is established. Interest rate
assumptions for the aggregate future policy benefit liabilities range from 2% to 11% for U.S.
businesses and less than 1% to 10% for non-U.S. businesses.
Present value of future expected payments. Interest rate assumptions used in establishing such
liabilities range from 1% to 11% for U.S. businesses and less than 1% to 9% for non-U.S.
businesses.
The net level premium method and assumptions as to future morbidity, withdrawals and interest,
which provide a margin for adverse deviation. Interest rate assumptions used in establishing such
liabilities range from 1% to 7% (primarily related to U.S. businesses).
Present value of benefits method and experience assumptions as to claim terminations, expenses
and interest. Interest rate assumptions used in establishing such liabilities range from 2% to 8%
for U.S. businesses and less than 1% to 9% for non-U.S. businesses.
Participating business represented 2% and 3% of the Company’s life insurance in-force at December 31, 2022 and 2021,
respectively. Participating policies represented 11%, 12% and 14% of gross traditional life insurance premiums for the years
ended December 31, 2022, 2021 and 2020, respectively.
Policyholder account balances are equal to: (i) policy account values, which consist of an accumulation of gross
premium payments and investment performance; (ii) credited interest, ranging from less than 1% to 8% for U.S. businesses
and less than 1% to 12% for non-U.S. businesses, less expenses, mortality charges and withdrawals; and (iii) fair value
adjustments relating to business combinations.
184
Table of Contents
4. Insurance (continued)
Guarantees
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum
benefits. GMABs, the non-life contingent portion of GMWBs and certain non-life contingent portions of GMIBs are
accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 9. Guarantees
accounted for as insurance liabilities include:
Guarantee:
GMDBs
• A return of purchase payment upon death even if
the account value is reduced to zero.
• An enhanced death benefit may be available for
an additional fee.
GMIBs
• After a specified period of time determined at the
time of issuance of the variable annuity
contract, a minimum accumulation of purchase
payments, even if the account value is reduced
to zero, that can be annuitized to receive a
monthly income stream that is not less than a
specified amount.
• Certain contracts also provide for a guaranteed
lump sum return of purchase premium in lieu
of the annuitization benefit.
GMWBs
• A return of purchase payment via partial
withdrawals, even if the account value is
reduced to zero, provided that cumulative
withdrawals in a contract year do not exceed a
certain limit.
• Certain contracts include guaranteed withdrawals
that are life contingent.
Measurement Assumptions:
• Present value of expected death benefits in excess of
the projected account balance recognizing the
excess ratably over the accumulation period based
on the present value of total expected assessments.
• Assumptions are consistent with those used for
amortizing DAC, and are thus subject to the same
variability and risk.
•
Investment performance and volatility assumptions
are consistent with the historical experience of the
appropriate underlying equity index, such as the
S&P 500 Index.
• Benefit assumptions are based on the average benefits
payable over a range of scenarios.
• Present value of expected income benefits in excess
of the projected account balance at any future date
of annuitization and recognizing the excess ratably
over the accumulation period based on present
value of total expected assessments.
• Assumptions are consistent with those used for
estimating GMDB liabilities.
• Calculation
incorporates an assumption for
the
percentage of the potential annuitizations that may
be elected by the contractholder.
• Expected value of the life contingent payments and
expected assessments using assumptions consistent
with
the GMDB
liabilities.
for estimating
those used
The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to
surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits
that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed
annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally,
the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a
secondary guarantee or a guaranteed paid-up benefit.
185
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating
to annuity and universal and variable life contracts was as follows:
Annuity Contracts
GMDBs and
GMWBs
GMIBs
Universal and Variable
Life Contracts
Secondary
Guarantees
(In millions)
Paid-Up
Guarantees
Total
$
465
$
894
$
3,762
$
427
$
$
$
$
$
195
(21)
639
133
(29)
—
743
247
(39)
240
(5)
1,129
87
(7)
(32)
1,177
(269)
(14)
602
(99)
4,265
(37)
(102)
—
4,126
(261)
(120)
26
(45)
408
43
(47)
—
404
104
(44)
951
$
894
$
3,745
$
464
$
—
$
10
$
349
$
281
$
(11)
9
(2)
(6)
8
—
—
(8)
8
(3)
—
7
2
—
—
9
(1)
—
96
(18)
427
57
(33)
—
451
29
(24)
43
(32)
292
30
(34)
—
288
33
(32)
—
$
8
$
456
$
289
$
465
$
884
$
3,413
$
146
$
206
(30)
641
139
(37)
—
743
255
(47)
243
(5)
1,122
85
(7)
(32)
1,168
(268)
(14)
506
(81)
3,838
(94)
(69)
—
3,675
(290)
(96)
(17)
(13)
116
13
(13)
—
116
71
(12)
$
951
$
886
$
3,289
$
175
$
5,548
1,063
(170)
6,441
226
(185)
(32)
6,450
(179)
(217)
6,054
640
125
(41)
724
83
(59)
—
748
53
(48)
753
4,908
938
(129)
5,717
143
(126)
(32)
5,702
(232)
(169)
5,301
Direct and Assumed:
Balance at January 1, 2020
Incurred guaranteed benefits (1)
Paid guaranteed benefits
Balance at December 31, 2020
Incurred guaranteed benefits (1)
Paid guaranteed benefits
Reclassified to liabilities held-for-sale (2)
Balance at December 31, 2021
Incurred guaranteed benefits (1)
Paid guaranteed benefits
Balance at December 31, 2022
Ceded:
Balance at January 1, 2020
Incurred guaranteed benefits
Paid guaranteed benefits
Balance at December 31, 2020
Incurred guaranteed benefits
Paid guaranteed benefits
Reclassified to liabilities held-for-sale (2)
Balance at December 31, 2021
Incurred guaranteed benefits
Paid guaranteed benefits
Balance at December 31, 2022
Net:
Balance at January 1, 2020
Incurred guaranteed benefits
Paid guaranteed benefits
Balance at December 31, 2020
Incurred guaranteed benefits
Paid guaranteed benefits
Reclassified to liabilities held-for-sale (2)
Balance at December 31, 2021
Incurred guaranteed benefits
Paid guaranteed benefits
Balance at December 31, 2022
__________________
(1)
Secondary guarantees include the effects of foreign currency translation of ($268) million, ($260) million and
$125 million at December 31, 2022, 2021 and 2020, respectively.
(2)
See Note 3 for information on the Company’s business dispositions.
186
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Information regarding the Company’s guarantee exposure, which includes direct and assumed business, but excludes
offsets from hedging or ceded reinsurance, if any, was as follows at:
December 31,
2022
2021
In the
Event of Death
At
Annuitization
In the
Event of Death
At
Annuitization
(Dollars in millions)
$
$
$
46,345
30,066
$
$
16,953
15,584
$
$
62,281
42,043
$
$
23,121
21,508
5,338 (4) $
433
(5) $
1,490 (4) $
500
(5)
Annuity Contracts:
Variable Annuity Guarantees:
Total account value (1), (2), (3)
Separate account value (1)
Net amount at risk (2)
Average attained age of contractholders
68 years
68 years
68 years
66 years
Other Annuity Guarantees:
Total account value (1), (3)
Net amount at risk
Average attained age of contractholders
N/A
N/A
N/A
$
$
4,101
188 (6)
57 years
N/A
N/A
N/A
$
$
5,002
196
(6)
56 years
December 31,
2022
2021
Secondary
Guarantees
Paid-Up
Guarantees
Secondary
Guarantees
Paid-Up
Guarantees
(Dollars in millions)
Universal and Variable Life Contracts:
Total account value (1), (3)
Net amount at risk (7)
$
$
11,948 $
80,623 $
2,570 $
11,824 $
13,678 $
78,762 $
Average attained age of policyholders
55 years
67 years
55 years
2,694
12,657
66 years
__________________
(1)
(2)
(3)
(4)
(5)
(6)
The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract.
Therefore, the amounts listed above may not be mutually exclusive.
Includes amounts, which are not reported on the consolidated balance sheets, from assumed variable annuity
guarantees from the Company’s former operating joint venture in Japan.
Includes the contractholders’ investments in the general account and separate account, if applicable.
Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the
claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes
any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon
death.
Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime
income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit.
This amount represents the Company’s potential economic exposure to such guarantees in the event all contractholders
were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the
guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved.
Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet
date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income
stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These
amounts represent the Company’s potential economic exposure to such guarantees in the event all contractholders
were to annuitize on the balance sheet date.
187
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
(7)
Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the
claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.
Guarantees — Separate Accounts
Account balances of contracts with guarantees were invested in separate account asset classes as follows at:
Fund Groupings:
Equity
Balanced
Bond
Money Market
Total
December 31,
2022
2021
(In millions)
$
20,875 $
12,657
4,036
305
29,346
17,393
5,041
218
$
37,873 $
51,998
Obligations Under Funding Agreements
The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign
currencies, to certain unconsolidated special purpose entities that have issued either debt securities or commercial paper for
which payment of interest and principal is secured by such funding agreements. For the years ended December 31, 2022,
2021 and 2020, the Company issued $48.5 billion, $40.8 billion and $40.4 billion, respectively, and repaid $47.4 billion,
$41.2 billion and $36.7 billion, respectively, of such funding agreements. At December 31, 2022 and 2021, liabilities for
funding agreements outstanding, which are included in policyholder account balances, were $40.7 billion and $39.5 billion,
respectively.
Certain of the Company’s subsidiaries are members of FHLBNY. Holdings of common stock of FHLBNY, included in
other invested assets, were $729 million and $769 million at December 31, 2022 and 2021, respectively.
Certain subsidiaries have also entered into funding agreements with FHLBNY and a subsidiary of the Federal
Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. (“Farmer Mac”). The liability for such
funding agreements is included in policyholder account balances. Information related to such funding agreements was as
follows at:
FHLBNY (1)
Farmer Mac (3)
__________________
Liability
Collateral
December 31,
2022
2021
2022
2021
(In millions)
$
$
14,940 $
2,050 $
15,750 $
17,857 (2)
2,050 $
2,148
$
$
17,981 (2)
2,159
(1)
(2)
(3)
Represents funding agreements issued to FHLBNY in exchange for cash and for which it has been granted a lien on
certain assets, some of which are
including residential mortgage-backed
securities (“RMBS”), to collateralize obligations under such funding agreements. The applicable subsidiary of the
Company is permitted to withdraw any portion of the collateral in the custody of FHLBNY as long as there is no event
of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event
of default by such subsidiary, FHLBNY’s recovery on the collateral is limited to the amount of such subsidiary’s
liability to FHLBNY.
the custody of FHLBNY,
in
Advances are collateralized primarily by mortgage-backed securities presented at estimated fair value. The remaining
collateral is mortgage loans presented at carrying value.
Represents funding agreements issued to a subsidiary of Farmer Mac. The obligations under these funding agreements
are secured by a pledge of certain eligible agricultural mortgage loans and may, under certain circumstances, be
secured by other qualified collateral. The amount of collateral presented is at carrying value.
188
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
4. Insurance (continued)
Liabilities for Unpaid Claims and Claim Expenses
The following is information about incurred and paid claims development by segment at December 31, 2022. Such
amounts are presented net of reinsurance, and are not discounted. The tables present claims development and cumulative
claim payments by incurral year. The development tables are only presented for significant short-duration product liabilities
within each segment. In order to eliminate potential fluctuations related to foreign exchange rates, liabilities and payments
denominated in a foreign currency have been translated using the 2022 year end spot rates for all periods presented. The
information about incurred and paid claims development prior to 2022 is presented as supplementary information.
U.S.
Group Life - Term
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
At December 31, 2022
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Years Ended December 31,
(Unaudited)
Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims
Cumulative
Number of
Reported
Claims
$ 6,637
$ 6,713
$ 6,719
$ 6,720
$ 6,730
$ 6,720
$ 6,723
$ 6,724
$ 6,726
$ 6,726
$
6,986
6,919
6,913
6,910
6,914
6,919
6,920
6,918
6,920
7,040
7,015
7,014
7,021
7,024
7,025
7,026
7,026
(Dollars in millions)
7,125
7,085
7,095
7,104
7,105
7,104
7,107
7,432
7,418
7,425
7,427
7,428
7,428
7,757
7,655
7,646
7,650
7,651
7,935
7,900
7,907
7,917
8,913
9,367
9,389
10,555
10,795
1
1
1
2
3
6
11
23
64
1,129
213,283
216,148
218,782
220,671
263,546
251,446
252,015
297,022
327,725
276,784
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
All outstanding liabilities for incurral years prior to 2013, net of reinsurance
Total unpaid claims and claim adjustment expenses, net of reinsurance
9,640
80,599
(77,480)
22
$ 3,141
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
Years Ended December 31,
(Unaudited)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$ 5,216
$ 6,614
$ 6,664
$ 6,678
$
6,711
$
6,715
$
6,720
$
6,721
$
6,723
$
(In millions)
5,428
6,809
5,524
6,858
6,913
5,582
6,869
6,958
6,980
5,761
6,902
6,974
7,034
7,292
6,008
6,912
7,008
7,053
7,355
7,521
6,178
6,915
7,018
7,086
7,374
7,578
7,756
6,862
6,916
7,022
7,096
7,400
7,595
7,820
9,103
8,008
6,724
6,917
7,024
7,100
7,414
7,629
7,853
9,242
10,476
7,101
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
$
77,480
Average Annual Percentage Payout
The following is supplementary information about average historical claims duration at December 31, 2022:
Years
1
2
Group Life - Term
76.8%
20.8%
3
0.8%
4
0.3%
5
0.5%
6
0.1%
7
0.1%
8
—%
9
—%
10
—%
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
189
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
4. Insurance (continued)
Group Long-Term Disability
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
At December 31, 2022
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Years Ended December 31,
(Unaudited)
Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims
Cumulative
Number of
Reported
Claims
$ 1,008 $ 1,027
$ 1,032
$ 1,049
$ 1,070
$ 1,069
$ 1,044
$ 1,032
$ 1,025
$ 1,027
$
1,076
1,077
1,079
1,101
1,109
1,098
1,097
1,081
1,078
1,082
1,105
1,093
1,100
1,087
1,081
1,067
1,086
(Dollars in millions)
1,131
1,139
1,159
1,162
1,139
1,124
1,123
1,244
1,202
1,203
1,195
1,165
1,181
1,240
1,175
1,163
1,147
1,170
1,277
1,212
1,169
1,177
1,253
1,223
1,155
1,552
1,608
—
—
—
—
—
—
—
6
43
760
21,139
22,853
21,216
17,973
16,328
15,214
15,392
15,719
19,189
9,970
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
All outstanding liabilities for incurral years prior to 2013, net of reinsurance
Total unpaid claims and claim adjustment expenses, net of reinsurance
1,695
12,300
(6,251)
1,496
$ 7,545
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
Years Ended December 31,
(Unaudited)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$
43 $
234 $
382 $
475 $
551 $
622 $
676 $
722 $
764 $
(In millions)
51
266
50
428
264
49
526
427
267
56
609
524
433
290
54
677
601
548
476
314
57
732
665
628
579
497
342
59
778
718
696
655
594
522
355
95
798
818
764
750
719
666
620
535
505
76
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
$
6,251
Average Annual Percentage Payout
The following is supplementary information about average historical claims duration at December 31, 2022:
Years
Group Long-Term Disability
1
4.8%
2
3
21.7%
15.2%
4
9.0%
5
7.0%
6
6.1%
7
5.0%
8
4.3%
9
3.9%
10
3.3%
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Significant Methodologies and Assumptions
Group Life - Term and Group Long-Term Disability incurred but not paid (“IBNP”) liabilities are developed using
a combination of loss ratio and development methods. Claims in the course of settlement are then subtracted from the
IBNP liabilities, resulting in the IBNR liabilities. The loss ratio method is used in the period in which the claims are
neither sufficient nor credible. In developing the loss ratios, any material rate increases that could change the
underlying premium without affecting the estimated incurred losses are taken into account. For periods where
sufficient and credible claim data exists, the development method is used based on the claim triangles which categorize
claims according to both the period in which they were incurred and the period in which they were paid, adjudicated or
reported. The end result is a triangle of known data that is used to develop known completion ratios and factors.
Claims paid are then subtracted from the estimated ultimate incurred claims to calculate the IBNP liability.
190
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
An expense liability is held for the future expenses associated with the payment of incurred but not yet paid claims
(IBNR and pending). This is expressed as a percentage of the underlying claims liability and is based on past
experience and the anticipated future expense structure.
For Group Life - Term, first year incurred claims and allocated loss adjustment expenses decreased in 2022
compared to the 2021 incurral year due to the decline in COVID-19 claims. For Group Long-Term Disability, first
year incurred claims and allocated loss adjustment expenses increased in 2022 compared to 2021 incurral year due to
the growth in the size of the business.
The assumptions used in calculating the unpaid claims and claim adjustment expenses for Group Life - Term and
Group Long-Term Disability are updated annually to reflect emerging trends in claim experience.
Certain of our Group Life - Term customers have experience-rated contracts, whereby the group sponsor
participates in the favorable and/or adverse claim experience, including favorable and/or adverse prior year
development. Claim experience adjustments on these contracts are not reflected in the foregoing incurred and paid
claim development tables, but are instead reflected as an increase (adverse experience) or decrease (favorable
experience) to premiums on the consolidated statements of operations.
Liabilities for Group Life - Term unpaid claims and claim adjustment expenses are not discounted.
The liabilities for Group Long-Term Disability unpaid claims and claim adjustment expenses were $6.5 billion
and $6.2 billion at December 31, 2022 and 2021, respectively. Using interest rates ranging from 3% to 8%, based on
the incurral year, the total discount applied to these liabilities was $1.2 billion and $1.1 billion at December 31, 2022
and 2021, respectively. The amount of interest accretion recognized was $461 million, $518 million and $452 million
for the years ended December 31, 2022, 2021 and 2020, respectively. These amounts were reflected in policyholder
benefits and claims.
For Group Life - Term, claims were based upon individual death claims. For Group Long-Term Disability, claim
frequency was determined by the number of reported claims as identified by a unique claim number assigned to
individual claimants. Claim counts initially include claims that do not ultimately result in a liability. These claims are
omitted from the claim counts once it is determined that there is no liability.
The incurred and paid claims disclosed for the Group Life - Term product includes activity related to the product’s
continued protection feature; however, the associated actuarial reserve for future benefit obligations under this feature
is excluded from the liability for unpaid claims.
The Group Long-Term Disability IBNR, included in the development tables above, was developed using
discounted cash flows, and is presented on a discounted basis.
191
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
4. Insurance (continued)
Asia
Group Disability & Group Life
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
At December 31, 2022
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Years Ended December 31,
(Unaudited)
Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims
Cumulative
Number of
Reported
Claims
$
129
$
$
130
257
$
151
241
243
$
146
222
232
203
$
145
222
235
206
263
(Dollars in millions)
$
$
153
233
229
195
244
321
153
229
239
208
252
293
347
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
All outstanding liabilities for incurral years prior to 2013, net of reinsurance
Total unpaid claims and claim adjustment expenses, net of reinsurance
5
8
13
19
30
56
79
127
211
399
6,597
6,865
6,792
4,707
5,619
5,982
5,966
5,030
5,659
3,461
$
$
156
230
241
210
270
305
324
385
157
230
245
215
277
315
339
359
367
$
155
224
241
216
272
309
335
331
382
487
2,952
(2,006)
11
$
957
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
Years Ended December 31,
(Unaudited)
$
38
$
$
86
60
$
105
125
71
$
118
156
134
57
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
(In millions)
$
129
175
167
117
77
$
142
197
180
134
138
84
$
138
198
204
167
183
155
93
$
146
208
218
181
224
209
170
85
$
149
213
225
190
240
243
221
153
77
150
216
229
197
242
252
257
203
171
89
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
$
2,006
Average Annual Percentage Payout
The following is supplementary information about average historical claims duration at December 31, 2022:
Years
1
2
3
4
5
Group Disability & Group Life
25.4%
25.3%
14.0%
10.6%
7.0%
6
3.9%
7
2.0%
8
3.0%
9
1.6%
10
0.6%
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Significant Methodologies and Assumptions
This business line consists of employer sponsored and industry sponsored Group Life and Group Disability risks.
For Group Life, the IBNR liability is determined by using the Bornhuetter-Ferguson Method, with factors derived
by examining the experience of historical claims. A pending liability is also calculated for claims that have been
reported but have not been paid. A claim eligibility ratio based on past experience is applied to the face amount of
individual claims.
192
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
For Group Disability, the IBNR liability is calculated by applying a percentage to premiums in-force based on the
expected delay as evidenced by the experience in the portfolio. The IBNR liability is then allocated back into different
incurral years based on historical run-off patterns. As the benefit for this class of business is a regular series of
payments, an additional reserve is required for the liability for ongoing benefit payments - claims in course of payment
(“CICP”). The assumptions employed in the calculation of the CICP are adjusted for the Company’s own experience.
An expense liability is held for the future expenses associated with the payment of incurred but not yet paid
claims. This is expressed as a percentage of the underlying claims liability and is based on past experience and the
future expense structure.
The assumptions used in calculating the unpaid claims and claim adjustment expenses for Group Disability and
Group Life are updated annually to reflect emerging trends in claim experience.
No additional premiums or return premiums have been accrued as a result of the prior year development.
The liabilities for unpaid claims and claim adjustment expenses were $1.3 billion and $1.2 billion at
December 31, 2022 and 2021, respectively. These amounts were discounted using interest rates ranging from 1% to
7%, based on the incurral year. The total discount applied to these liabilities was $118 million and $73 million at
December 31, 2022 and 2021, respectively. The amount of interest accretion recognized was $22 million for both the
years ended December 31, 2022 and 2021, and $24 million for the year ended December 31, 2020. These amounts
were reflected in policyholder benefits and claims.
The Company tracks claim frequency by the number of reported claims as identified by a unique claim number
assigned to individual claimants. Claim counts include claims that do not ultimately result in a liability. A liability is
only established for those claims that are expected to result in a liability, based on historical factors.
Latin America
Protection Life
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
At December 31, 2022
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Years Ended December 31,
(Unaudited)
Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims
Cumulative
Number of
Reported
Claims
$
152
$
$
215
229
$
221
350
300
$
222
360
431
318
$
221
328
401
416
327
(Dollars in millions)
$
$
223
332
406
427
319
305
224
332
406
434
319
295
329
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
All outstanding liabilities for incurral years prior to 2013, net of reinsurance
Total unpaid claims and claim adjustment expenses, net of reinsurance
—
—
—
—
—
1
2
10
34
163
30,204
38,375
44,496
38,800
30,819
29,563
32,017
42,318
51,077
30,066
$
$
224
333
407
435
318
293
301
497
224
333
401
436
318
294
304
498
632
$
216
324
391
426
308
292
301
502
550
436
3,746
(3,347)
6
$
405
193
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
Years Ended December 31,
(Unaudited)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$
149
$
$
208
204
$
212
306
244
$
213
311
345
225
(In millions)
$
212
314
366
402
194
$
214
318
373
421
291
153
$
216
320
379
429
307
261
171
$
217
321
382
431
310
272
260
216
$
218
323
383
434
314
277
280
431
326
210
314
373
427
305
274
278
442
456
268
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
$
3,347
Average Annual Percentage Payout
The following is supplementary information about average historical claims duration at December 31, 2022:
Years
Protection Life
1
2
58.3%
32.3%
3
4.0%
4
1.0%
5
0.5%
6
—%
7
—%
8
9
10
(0.5)%
(1.1)%
(4.0)%
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Protection Health
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance
At December 31, 2022
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Years Ended December 31,
(Unaudited)
Total IBNR
Liabilities Plus
Expected
Development on
Reported Claims
Cumulative
Number of
Reported
Claims
$
227
$
256
$
258
$
259
$
256
$
256
$
256
$
256
$
256
$
257
$
(Dollars in millions)
—
—
—
—
—
—
1
5
13
67
104,402
98,132
87,596
106,665
121,591
144,503
132,150
149,147
167,881
140,625
262
231
303
358
409
173
488
638
263
231
304
358
409
172
486
641
696
3,817
(3,679)
1
$
139
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
236
262
203
264
230
266
262
232
306
385
261
231
303
358
412
261
230
303
359
433
137
262
231
303
358
410
179
497
Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
All outstanding liabilities for incurral years prior to 2013, net of reinsurance
Total unpaid claims and claim adjustment expenses, net of reinsurance
194
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance
Years Ended December 31,
(Unaudited)
Incurral Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
$
227
$
256
$
258
$
259
$
256
$
256
$
256
$
256
$
256
$
(In millions)
234
260
203
263
230
250
259
229
299
314
259
230
302
354
352
259
230
302
356
401
115
259
230
303
356
404
163
420
259
231
303
357
405
166
475
564
257
260
231
304
358
407
169
480
624
589
Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance
$
3,679
Average Annual Percentage Payout
The following is supplementary information about average historical claims duration at December 31, 2022:
Years
1
2
Protection Health
84.7%
13.4%
3
0.8%
4
0.2%
5
—%
6
0.1%
7
0.1%
8
0.1%
9
0.2%
10
0.2%
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Significant Methodologies and Assumptions
The Latin America segment establishes liabilities for unpaid losses, which are equal to the accumulation of unpaid
reported claims, plus an estimate for claims IBNR.
In general terms, for both the Protection Life and Protection Health products, the methodology for IBNR is the
Bornhuetter-Ferguson Method, with factors derived by examining the experience of historical claims. In the more
recent incurral months, the credibility is higher on expected loss ratios and lower on claims calculated using the
experience-derived factors. The credibility grows for the factors as incurral months become older.
For Protection Health products, claim duration can be very long due to the multiple incidences that may occur
over time for a single claim. Depending on the characteristics of the product, the number of claims reported per year
may or may not be based on the original claim occurrence date for each individual claim. For Protection Life products,
claims are based upon individual death claims.
The assumptions used in calculating the unpaid claims and claim adjustment expenses for Protection Life and
Protection Health are updated annually to reflect emerging trends in claim experience.
Certain of our Protection Life customers have experience-rated contracts, whereby the group sponsor participates
in the favorable and/or adverse claim experience, including favorable and/or adverse prior year development. Claim
experience adjustments on these contracts are not reflected in the foregoing incurred and paid claim development
tables, but are instead reflected as an increase (adverse experience) or decrease (favorable experience) to premiums on
the consolidated statements of operations.
Liabilities for unpaid claims and claim adjustment expenses were not discounted.
For Protection Life and Protection Health products, claim counts initially include claims that do not ultimately
result in a liability. These claims are omitted from the claim counts once it is determined that there is no liability.
195
Table of Contents
4. Insurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and
Claim Adjustment Expenses
The reconciliation of the net incurred and paid claims development tables to the liability for unpaid claims and claims
adjustment expenses on the consolidated balance sheet was as follows at:
Short-Duration:
Unpaid claims and allocated claims adjustment expenses, net of reinsurance:
U.S.:
Group Life - Term
Group Long-Term Disability
Total
Asia - Group Disability & Group Life
Latin America:
Protection Life
Protection Health
Total
Other insurance lines - all segments combined
Total unpaid claims and allocated claims adjustment expenses, net of reinsurance
Reinsurance recoverables on unpaid claims:
U.S.:
Group Life - Term
Group Long-Term Disability
Total
Asia - Group Disability & Group Life
Latin America:
Protection Life
Protection Health
Total
Other insurance lines - all segments combined
Total reinsurance recoverable on unpaid claims
Total unpaid claims and allocated claims adjustment expense
Unallocated claims adjustment expenses
Discounting
Liability for unpaid claims and claim adjustment liabilities - short-duration
Liability for unpaid claims and claim adjustment liabilities - all long-duration lines
December 31, 2022
(In millions)
$
3,141
7,545
$
405
139
8
205
11
18
10,686
957
544
1,938
14,125
213
427
29
289
958
15,083
3
(1,326)
13,760
6,653
Total liability for unpaid claims and claim adjustment expense (included in future policy benefits and
other policy-related balances)
$
20,413
196
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
4. Insurance (continued)
Rollforward of Claims and Claim Adjustment Expenses
Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:
Balance at January 1,
Less: Reinsurance recoverables
Net balance at January 1,
Incurred related to:
Current year
Prior years (1)
Total incurred
Paid related to:
Current year
Prior years
Total paid
Reclassified to liabilities held-for-sale (2)
Dispositions (2)
Net balance at December 31,
Add: Reinsurance recoverables
Balance at December 31,
__________________
Years Ended December 31,
2022
2021
(In millions)
2020
$
20,013 $
18,591 $
3,121
16,892
27,285
766
28,051
(20,051)
(7,395)
(27,446)
—
—
17,497
2,916
2,417
16,174
28,270
934
29,204
(21,111)
(7,256)
(28,367)
(55)
(64)
16,892
3,121
$
20,413 $
20,013 $
19,216
2,377
16,839
27,272
192
27,464
(20,230)
(6,241)
(26,471)
(1,658)
—
16,174
2,417
18,591
(1)
For the years ended December 31, 2022, 2021 and 2020, incurred claim activity and claim adjustment expenses
associated with prior years increased due to events incurred in prior years but reported in the current year. The
increases in both 2022 and 2021 incurred claim activity and claim adjustment expenses associated with prior years is
primarily due to the impacts related to the COVID-19 pandemic, partially offset by additional premiums recorded for
experience-rated contracts that are not reflected in the table above.
(2)
See Note 3 for information on the Company’s business dispositions.
Separate Accounts
Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling
$108.9 billion and $134.4 billion at December 31, 2022 and 2021, respectively, for which the policyholder assumes all
investment risk, and separate accounts for which the Company contractually guarantees either a minimum return or account
value to the policyholder which totaled $37.1 billion and $45.5 billion at December 31, 2022 and 2021, respectively. The
latter category consisted primarily of guaranteed interest contracts (“GICs”). The average interest rate credited on these
contracts was 2.49% and 2.18% at December 31, 2022 and 2021, respectively.
197
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles
See Note 1 for a description of capitalized acquisition costs.
Nonparticipating and Non-Dividend-Paying Traditional Contracts
The Company amortizes DAC and VOBA related to these contracts (term insurance, nonparticipating whole life
insurance, traditional group life insurance, non-medical health insurance, and accident & health insurance) over the
appropriate premium paying period in proportion to the actual and expected future gross premiums that were set at contract
issue. The expected premiums are based upon the premium requirement of each policy and assumptions for mortality,
morbidity, persistency and investment returns at policy issuance, or policy acquisition (as it relates to VOBA), include
provisions for adverse deviation, and are consistent with the assumptions used to calculate future policyholder benefit
liabilities. These assumptions are not revised after policy issuance or acquisition unless the DAC or VOBA balance is
deemed to be unrecoverable from future expected profits. Absent a premium deficiency, variability in amortization after
policy issuance or acquisition is caused only by variability in premium volumes.
Participating, Dividend-Paying Traditional Contracts
The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in
proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception
or acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder
dividend scales, mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties
and certain economic variables, such as inflation. For participating contracts within the closed block (dividend-paying
traditional contracts) future gross margins are also dependent upon changes in the policyholder dividend obligation. See
Note 7. Of these factors, the Company anticipates that investment returns, expenses, persistency and other factor changes, as
well as policyholder dividend scales, are reasonably likely to impact significantly the rate of DAC and VOBA amortization.
Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When
the actual gross margins change from previously estimated gross margins, the cumulative DAC and VOBA amortization is
re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those
previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The
opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting
period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins.
When expected future gross margins are below those previously estimated, the DAC and VOBA amortization will increase,
resulting in a current period charge to earnings. The opposite result occurs when the expected future gross margins are above
the previously estimated expected future gross margins. Each period, the Company also reviews the estimated gross margins
for each block of business to determine the recoverability of DAC and VOBA balances.
Fixed and Variable Universal Life Contracts and Fixed and Variable Deferred Annuity Contracts
The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in
proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception
or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the
amounts credited to policyholders, mortality, persistency, interest crediting rates, expenses to administer the business,
creditworthiness of reinsurance counterparties, the effect of any hedges used and certain economic variables, such as
inflation. Of these factors, the Company anticipates that investment returns, expenses and persistency are reasonably likely to
significantly impact the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated
gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated
gross profits, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to
current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will
increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below
the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business
remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those
previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The
opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits.
Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability
of DAC and VOBA balances.
198
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued)
Credit Insurance and Other Short-Duration Contracts
The Company amortizes DAC for these contracts, which is primarily composed of commissions and certain underwriting
expenses, in proportion to actual and future earned premium over the applicable contract term.
Factors Impacting Amortization
Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force
account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC
and VOBA. Returns that are higher than the Company’s long-term expectation produce higher account balances, which
increases the Company’s future fee expectations and decreases future benefit payment expectations on minimum death and
living benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower
than the Company’s long-term expectation. The Company’s practice to determine the 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. The Company monitors these events and
only changes the assumption when its long-term expectation changes.
The Company also periodically reviews 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, policyholder behavior and expenses to administer business. Management annually updates
assumptions used in the calculation of estimated gross margins and profits which may have significantly changed. 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.
Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a
contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a
contract. If such modification, referred to as an internal replacement, substantially changes the contract, the associated DAC
or VOBA is written off immediately through income and any new deferrable costs associated with the replacement contract
are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original
contract will continue and any acquisition costs associated with the related modification are expensed.
Amortization of DAC and VOBA is attributed to net investment gains (losses) and net derivative gains (losses), and to
other expenses for the amount of gross margins or profits originating from transactions other than investment gains and
losses. Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if
such gains and losses had been recognized.
199
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued)
Information regarding DAC and VOBA was as follows:
DAC:
Balance at January 1,
Capitalizations
Amortization related to:
Net investment gains (losses) and net derivative gains (losses)
Other expenses
Total amortization
Unrealized investment gains (losses)
Effect of foreign currency translation and other
Reclassified to assets held-for-sale (1)
Balance at December 31,
VOBA:
Balance at January 1,
Amortization related to:
Net investment gains (losses) and net derivative gains (losses)
Other expenses
Total amortization
Unrealized investment gains (losses)
Effect of foreign currency translation and other
Reclassified to assets held-for-sale (1)
Balance at December 31,
Total DAC and VOBA:
Balance at December 31,
__________________
Years Ended December 31,
2022
2021
(In millions)
2020
$
13,643 $
13,446 $
2,558
2,718
105
(1,920)
(1,815)
7,166
(688)
—
20,864
(100)
(2,268)
(2,368)
811
(861)
(103)
13,643
14,790
3,013
(152)
(2,773)
(2,925)
(1,312)
76
(196)
13,446
2,418
2,943
3,043
—
(116)
(116)
17
(200)
—
—
(187)
(187)
11
(314)
(35)
(2)
(233)
(235)
(4)
139
—
2,119
2,418
2,943
$
22,983 $
16,061 $
16,389
(1)
See Note 3 for information on the Company’s dispositions.
Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:
U.S.
Asia
Latin America
EMEA
MetLife Holdings
Corporate & Other
Total
December 31,
2022
2021
$
(In millions)
459 $
13,384
2,211
1,593
5,308
28
440
9,339
2,021
1,623
2,607
31
$
22,983 $
16,061
200
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued)
Information regarding other intangibles was as follows:
Years Ended December 31,
2022
2021
2020
(In millions)
DSI:
Balance at January 1,
Capitalization
Amortization
Unrealized investment gains (losses)
Effect of foreign currency translation and other
Balance at December 31,
VODA and VOCRA:
Balance at January 1,
Acquisitions (1)
Amortization
Effect of foreign currency translation and other
Balance at December 31,
Accumulated amortization
Negative VOBA:
Balance at January 1,
Amortization
Effect of foreign currency translation and other
Balance at December 31,
Accumulated amortization
__________________
$
107 $
108 $
158
6
(37)
(18)
(1)
108
335
814
(41)
(9)
3
(32)
59
(2)
—
(14)
20
(7)
135 $
107 $
972 $
1,099 $
—
(92)
(4)
876 $
667 $
—
(100)
(27)
972 $
1,099
575 $
475
623 $
738 $
(41)
(63)
(34)
(81)
519 $
623 $
750
(45)
33
738
3,383 $
3,342 $
3,308
$
$
$
$
$
$
$
(1)
Primarily related to the acquisition of Versant Health. See Note 3.
The estimated future amortization expense (credit) to be reported in other expenses for the next five years is as follows:
2023
2024
2025
2026
2027
6. Reinsurance
VOBA
VODA and VOCRA
Negative VOBA
(In millions)
$
$
$
$
$
155 $
161 $
153 $
144 $
133 $
86 $
84 $
82 $
80 $
78 $
(30)
(29)
(28)
(26)
(25)
The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance
products and also as a provider of reinsurance for some insurance products issued by third parties. The Company participates
in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for
future growth.
201
Table of Contents
6. Reinsurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Under the terms of the reinsurance agreements, the reinsurer agrees to reimburse the Company for the ceded amount in
the event a claim is paid. Cessions under reinsurance agreements do not discharge the Company’s obligation as the primary
insurer. In the event that reinsurers do not meet their obligations under the terms of the reinsurance agreements, reinsurance
recoverable balances could become uncollectible.
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. The Company periodically
reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities
relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements
using criteria similar to that evaluated in the security impairment process discussed in Note 8.
U.S.
For its Group Benefits business, the Company generally retains most of the risk, with the exception of its Group Term
Life business and certain client arrangements.
The Company reinsures an 80% quota share of its Group Term Life business for capital management purposes. The
majority of the Company’s other reinsurance activity within this business relates to client agreements for employer sponsored
captive programs, risk-sharing agreements and multinational pooling. The risks ceded under these agreements are generally
quota shares of group life and disability policies. The cessions vary and the Company may cede up to 100% of all the risks of
the policies.
The Company’s RIS business has engaged in reinsurance activities on an opportunistic basis. In 2020, a U.S. life
insurance subsidiary of the Company began reinsuring longevity risks for certain pension products issued by unaffiliated
providers located in the United Kingdom (“U.K.”).
Asia, Latin America and EMEA
For selected large corporate clients, the Company reinsures group employee benefits or credit insurance business with
various client-affiliated reinsurance companies, covering policies issued to the employees or customers of the clients.
Additionally, the Company cedes and assumes risk with other insurance companies when either company requires a business
partner with the appropriate local licensing to issue certain types of policies in certain jurisdictions. In these cases, the
assuming company typically underwrites the risks, develops the products and assumes most or all of the risk. The Company
also has reinsurance agreements in-force that reinsure a portion of the living and death benefit guarantees issued in
connection with variable annuity products. Under these agreements, the Company pays reinsurance fees associated with the
guarantees collected from policyholders, and receives reimbursement for benefits paid or accrued in excess of account values,
subject to certain limitations. The Company may also reinsure certain risks with external reinsurers depending upon the
nature of the risk and local regulatory requirements.
MetLife Holdings
For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis
or on a quota share basis. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as
well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis
for risks with specified characteristics. The Company also assumes portions of the risk associated with certain whole life
policies issued by a former affiliate and reinsures certain term life policies and universal life policies with secondary death
benefit guarantees to such former affiliate.
For its other products, the Company has a reinsurance agreement in-force to reinsure the living and death benefit
guarantees issued in connection with certain variable annuity guarantees from the Company’s former operating joint venture
in Japan. Under this agreement, the Company receives reinsurance fees associated with the guarantees collected from
policyholders, and provides reimbursement for benefits paid or accrued in excess of account values, subject to certain
limitations.
202
Table of Contents
6. Reinsurance (continued)
Catastrophe Coverage
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company has exposure to catastrophes which could contribute to significant fluctuations in the Company’s results of
operations. For the U.S. and EMEA, the Company purchases catastrophe coverage to reinsure risks issued within territories
that the Company believes are subject to the greatest catastrophic risks. For its other segments, the Company uses excess of
retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger
risks. Excess of retention reinsurance agreements provide for a portion of a risk to remain with the direct writing company
and quota share reinsurance agreements provide for the direct writing company to transfer a fixed percentage of all risks of a
class of policies.
Reinsurance Recoverables
The Company reinsures its business through a diversified group of well-capitalized reinsurers. The Company analyzes
recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and
evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance
recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of
reinsurance recoverable balances is evaluated based on these analyses. The Company generally secures large reinsurance
recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable
letters of credit. These reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, which at
December 31, 2022 and 2021, were not significant. A U.S. life insurance subsidiary of the Company also secured collateral
from its counterparties to mitigate counterparty default risk related to its longevity reinsurance agreements.
The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured
trusts, funds withheld accounts and irrevocable letters of credit. The Company had $3.9 billion and $3.6 billion of unsecured
reinsurance recoverable balances at December 31, 2022 and 2021, respectively.
At December 31, 2022, the Company had $6.1 billion of net ceded reinsurance recoverables. Of this total, $4.2 billion, or
69%, were with the Company’s five largest ceded reinsurers, including $2.4 billion of net ceded reinsurance recoverables
which were unsecured. At December 31, 2021, the Company had $6.3 billion of net ceded reinsurance recoverables. Of this
total, $4.1 billion, or 65%, were with the Company’s five largest ceded reinsurers, including $1.9 billion of net ceded
reinsurance recoverables which were unsecured.
The Company has reinsured with an unaffiliated third-party reinsurer, 59.25% of the closed block through a modified
coinsurance agreement. The Company accounts for this agreement under the deposit method of accounting. The Company,
having the right of offset, has offset the modified coinsurance deposit with the deposit recoverable.
203
Table of Contents
6. Reinsurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the
significant effects of reinsurance was as follows:
Premiums
Direct premiums
Reinsurance assumed
Reinsurance ceded
Net premiums
Universal life and investment-type product policy fees
Direct universal life and investment-type product policy fees
Reinsurance assumed
Reinsurance ceded
Net universal life and investment-type product policy fees
Policyholder benefits and claims
Direct policyholder benefits and claims
Reinsurance assumed
Reinsurance ceded
Net policyholder benefits and claims
Other expenses
Direct other expenses
Reinsurance assumed
Reinsurance ceded
Net other expenses
Years Ended December 31,
2022
2021
2020
(In millions)
$
48,503 $
41,259 $
42,201
$
$
$
$
$
$
3,037
(2,143)
2,907
(2,157)
2,032
(2,199)
49,397 $
42,009 $
42,034
6,004 $
6,271 $
6,122
76
(495)
45
(560)
5,585 $
5,756 $
50
(569)
5,603
50,436 $
44,035 $
42,221
2,612
(2,436)
2,570
(2,651)
1,745
(2,505)
50,612 $
43,954 $
41,461
12,013 $
12,450 $
13,013
285
(264)
375
(239)
371
(234)
$
12,034 $
12,586 $
13,150
The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant
effects of reinsurance was as follows at:
December 31,
2022
2021
Direct
Assumed
Ceded
Total
Balance
Sheet
Direct
Assumed
Ceded
Total
Balance
Sheet
(In millions)
Assets
Premiums, reinsurance and other
receivables
Deferred policy acquisition costs and value
of business acquired
Total assets
Liabilities
Future policy benefits
Policyholder account balances
Other policy-related balances
Other liabilities
Total liabilities
$ 5,481 $ 1,505 $ 10,475 $ 17,461 $ 4,929 $ 1,789 $ 10,431 $ 17,149
22,889
370
(276)
22,983
16,151
227
(317)
16,061
$ 28,370 $ 1,875 $ 10,199 $ 40,444 $ 21,080 $ 2,016 $ 10,114 $ 33,210
$ 200,355 $ 3,873 $ — $ 204,228 $ 195,915 $ 3,806 $ — $ 199,721
203,013
18,472
18,700
69
1,183
2,007
—
203,082
203,391
(4)
19,651
16,380
5,273
25,980
15,519
82
1,368
2,139
—
203,473
3
17,751
4,880
22,538
$ 440,540 $ 7,132 $ 5,269 $ 452,941 $ 431,205 $ 7,395 $ 4,883 $ 443,483
204
Table of Contents
6. Reinsurance (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance
risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $1.9 billion and $1.8 billion
at December 31, 2022 and 2021, respectively. The deposit liabilities on reinsurance were $1.4 billion at both
December 31, 2022 and 2021.
7. Closed Block
On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company (“MLIC”) converted from a
mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc.
The conversion was pursuant to an order by the New York Superintendent of Insurance approving MLIC’s plan of
reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, MLIC established a closed block
for the benefit of holders of certain individual life insurance policies of MLIC. Assets have been allocated to the closed block
in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies
included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these
policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for
the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales
continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares
actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are
adjusted periodically to give effect to changes in experience.
The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the
policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash
flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the
aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to
closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to
these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of
amounts assumed will be available for distribution over time to closed block policyholders and will not be available to
stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be
made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed
block remains in-force. The expected life of the closed block is over 100 years from the Demutualization Date.
The Company uses the same accounting principles to account for the participating policies included in the closed block
as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for
earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities
over closed block assets at the Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI)
represents the estimated maximum future earnings from the closed block expected to result from operations, attributed net of
income tax, to the closed block. Earnings of the closed block are recognized in income over the period the policies and
contracts in the closed block remain in-force. Management believes that over time the actual cumulative earnings of the
closed block will approximately equal the expected cumulative earnings due to the effect of dividend changes. If, over the
period the closed block remains in existence, the actual cumulative earnings of the closed block are greater than the expected
cumulative earnings of the closed block, the Company will pay the excess to closed block policyholders as additional
policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize
only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such
period, the actual cumulative earnings of the closed block are less than the expected cumulative earnings of the closed block,
the Company will recognize only the actual earnings in income. However, the Company may change policyholder dividend
scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the
expected cumulative earnings.
Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains
and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides
outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the
Company’s net income continues to be sensitive to the actual performance of the closed block.
Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities,
revenues and expenses outside the closed block based on the nature of the particular item.
205
Table of Contents
7. Closed Block (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Information regarding the closed block liabilities and assets designated to the closed block was as follows at:
Closed Block Liabilities
Future policy benefits
Other policy-related balances
Policyholder dividends payable
Policyholder dividend obligation
Deferred income tax liability
Other liabilities
Total closed block liabilities
Assets Designated to the Closed Block
Investments:
Fixed maturity securities available-for-sale, at estimated fair value
Equity securities, at estimated fair value
Mortgage loans
Policy loans
Real estate and real estate joint ventures
Other invested assets
Total investments
Cash and cash equivalents
Accrued investment income
Premiums, reinsurance and other receivables
Current income tax recoverable
Deferred income tax asset
Total assets designated to the closed block
Excess of closed block liabilities over assets designated to the closed block
AOCI:
Unrealized investment gains (losses), net of income tax
Unrealized gains (losses) on derivatives, net of income tax
Allocated to policyholder dividend obligation, net of income tax
Total amounts included in AOCI
December 31,
2022
2021
(In millions)
$
37,214 $
38,046
273
181
—
—
455
290
253
1,682
210
263
38,123
40,744
19,648
25,669
13
6,564
4,084
635
692
21
6,417
4,191
565
535
31,636
37,398
437
375
52
88
423
33,011
5,112
(1,357)
262
—
(1,095)
126
384
50
81
—
38,039
2,705
2,562
107
(1,329)
1,340
4,045
Maximum future earnings to be recognized from closed block assets and liabilities
$
4,017 $
Information regarding the closed block policyholder dividend obligation was as follows:
Balance at January 1,
Change in unrealized investment and derivative gains (losses)
Balance at December 31,
Years Ended December 31,
2022
2021
2020
(In millions)
$
$
1,682 $
2,969 $
(1,682)
(1,287)
— $
1,682 $
2,020
949
2,969
206
Table of Contents
7. Closed Block (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Information regarding the closed block revenues and expenses was as follows:
Revenues
Premiums
Net investment income
Net investment gains (losses)
Net derivative gains (losses)
Total revenues
Expenses
Policyholder benefits and claims
Policyholder dividends
Other expenses
Total expenses
Revenues, net of expenses before provision for income tax expense (benefit)
Provision for income tax expense (benefit)
Years Ended December 31,
2022
2021
2020
(In millions)
$
1,104 $
1,298 $
1,382
1,541
(51)
33
(36)
18
1,498
1,596
(25)
(17)
2,468
2,821
3,052
1,890
453
90
2,433
35
7
2,150
621
96
2,867
(46)
(10)
2,330
791
104
3,225
(173)
(36)
(137)
Revenues, net of expenses and provision for income tax expense (benefit)
$
28 $
(36) $
MLIC charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as
well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. MLIC also
charges the closed block for expenses of maintaining the policies included in the closed block.
8. Investments
See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies.
Investment Risks and Uncertainties
Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation,
currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with
the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market
conditions, the recognition of ACL and impairments, the recognition of income on certain investments and the potential
consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks
may have a material effect on the amounts presented within the consolidated financial statements.
The determination of ACL and impairments is highly subjective and is based upon quarterly evaluations and assessments
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.
The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-
backed securities and collateralized loan obligations (“ABS & CLO”), certain structured investment transactions and FVO
Securities) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in
changes in amounts to be earned.
207
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Fixed Maturity Securities AFS
Fixed Maturity Securities AFS by Sector
The following table presents fixed maturity securities AFS by sector. U.S. corporate and foreign corporate sectors
include redeemable preferred stock. RMBS includes agency, prime, prime investor, non-qualified residential mortgage,
alternative, reperforming and sub-prime mortgage-backed securities. ABS & CLO includes securities collateralized by
consumer loans, corporate loans and broadly syndicated bank loans. Municipals includes taxable and tax-exempt revenue
bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial
mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans.
RMBS, ABS & CLO and CMBS are, collectively, “Structured Products.”
December 31,
2022
Gross Unrealized
2021
Gross Unrealized (1)
Amortized
Cost
Allowance
for Credit
Loss
Gains
Losses
Estimated
Fair
Value
Amortized
Cost
Allowance
for Credit
Loss
Gains
Losses
Estimated
Fair
Value
(In millions)
$ 88,466 $
(29) $ 1,133 $ 9,540 $ 80,030 $ 82,694 $
(30) $ 10,651 $
281 $ 93,034
59,696
50,047
35,658
29,496
17,991
13,548
11,123
(5)
1,213
8,332
52,572
(130)
1,876
5,046
46,747
—
—
—
—
431
3,860
32,229
187
3,518
26,165
23
1,192
16,822
317
1,713
12,152
(19)
59
1,100
10,063
59,124
56,848
41,068
29,152
18,443
11,761
11,794
(28)
(19)
—
—
—
—
(14)
5,275
5,603
5,807
1,440
185
2,464
476
731
63,640
823
61,609
276
46,599
188
30,404
59
13
49
18,569
14,212
12,207
$ 306,025 $
(183) $ 5,239 $ 34,301 $ 276,780 $ 310,884 $
(91) $ 31,901 $ 2,420 $ 340,274
Sector
U.S. corporate
Foreign corporate
Foreign government
U.S. government and agency
RMBS
ABS & CLO
Municipals
CMBS
Total fixed maturity
securities AFS
__________________
(1)
Excludes gross unrealized gains (losses) related to assets held-for-sale; these unrealized gains (losses) are included in
AOCI as no component of equity is held-for-sale. See Note 3 for information on the Company’s business dispositions.
The Company held non-income producing fixed maturity securities AFS with an estimated fair value of $82 million
and $22 million at December 31, 2022 and December 31, 2021, respectively, with unrealized gains (losses) of ($3) million
and $8 million at December 31, 2022 and December 31, 2021, respectively.
Methodology for Amortization of Premium and Accretion of Discount on Structured Products
Amortization of premium and accretion of discount on Structured Products considers the estimated timing and amount
of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are
recalculated when differences arise between the originally anticipated and the actual prepayments received and currently
anticipated. Prepayment assumptions for Structured Products are estimated using inputs obtained from third-party
specialists and based on management’s knowledge of the current market. For credit-sensitive and certain prepayment-
sensitive Structured Products, the effective yield is recalculated on a prospective basis. For all other Structured Products,
the effective yield is recalculated on a retrospective basis.
208
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Maturities of Fixed Maturity Securities AFS
The amortized cost, net of ACL, and estimated fair value of fixed maturity securities AFS, by contractual maturity
date, were as follows at December 31, 2022:
Due in One
Year or Less
Due After
One Year
Through
Five Years
Due After
Five Years
Through
Ten Years
Due After
Ten Years
Structured
Products
Total Fixed
Maturity
Securities
AFS
(In millions)
Amortized cost, net of ACL
Estimated fair value
$
$
8,235 $
8,131 $
50,977 $
49,344 $
54,016 $
50,498 $
134,023 $
115,757 $
58,591 $
53,050 $
305,842
276,780
Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed
maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity.
Structured Products are shown separately, as they are not due at a single maturity.
Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector
The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an
unrealized loss position without an ACL by sector and aggregated by length of time that the securities have been in a
continuous unrealized loss position.
2022
2021
December 31,
Less than 12 Months
Gross
Unrealized
Losses
Estimated
Fair
Value
Equal to or Greater
than 12 Months
Estimated
Fair
Value
Gross
Unrealized
Losses
Less than 12 Months
Gross
Unrealized
Losses (1)
Estimated
Fair
Value
Equal to or Greater
than 12 Months
Estimated
Fair
Value
Gross
Unrealized
Losses (1)
(Dollars in millions)
$ 55,210 $
31,932
16,568
20,436
16,223
10,924
7,277
6,890
7,573 $ 6,484 $
5,999
2,170
2,784
1,890
712
1,514
764
8,956
8,308
4,177
6,650
4,326
482
2,037
1,965 $ 8,076 $
2,332
2,874
1,076
1,628
480
199
335
10,011
7,812
14,419
10,363
8,150
524
2,664
165 $ 1,499 $
404
319
138
158
39
10
31
2,834
5,377
1,571
417
804
65
657
116
327
502
138
30
20
3
18
$ 165,460 $ 23,406 $ 41,420 $ 10,889 $ 62,019 $
$ 157,654 $ 22,713 $ 38,785 $ 10,298 $ 58,358 $
2,635
7,806
3,661
693
591
1,264 $ 13,224 $
1,123 $ 12,022 $
141
1,202
1,154
1,025
129
$ 165,460 $ 23,406 $ 41,420 $ 10,889 $ 62,019 $
1,264 $ 13,224 $
1,154
Sector & Credit Quality
U.S. corporate
Foreign corporate
Foreign government
U.S. government and agency
RMBS
ABS & CLO
Municipals
CMBS
Total fixed maturity securities
AFS
Investment grade
Below investment grade
Total fixed maturity securities
AFS
Total number of securities in an
unrealized loss position
15,204
4,303
4,774
979
__________________
(1)
Excludes gross unrealized losses related to assets held-for-sale; these unrealized losses are included in AOCI as no
component of equity is held-for-sale. See Note 3 for information on the Company’s business dispositions.
209
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Evaluation of Fixed Maturity Securities AFS for Credit Loss
Evaluation and Measurement Methodologies
Management considers a wide range of factors about the security issuer and uses its 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 management’s evaluation of the security are assumptions and estimates about the operations of the issuer and
its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (i)
the extent to which the estimated fair value has been below amortized cost, (ii) adverse conditions specifically related to
a security, an industry sector or sub-sector, or an economically depressed geographic area, adverse change in the
financial condition of the issuer of the security, changes in technology, discontinuance of a segment of the business that
may affect future earnings, and changes in the quality of credit enhancement, (iii) payment structure of the security and
likelihood of the issuer being able to make payments, (iv) failure of the issuer to make scheduled interest and principal
payments, (v) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted
natural resources, (vi) whether the Company has the intent to sell or will more likely than not be required to sell a
particular security before the decline in estimated fair value below amortized cost recovers, (vii) with respect to
Structured Products, changes in forecasted cash flows after considering the changes in the financial condition of the
underlying loan obligors and quality of underlying collateral, expected prepayment speeds, current and forecasted loss
severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment
priority within the tranche structure of the security, (viii) changes in the rating of the security by a rating agency, and (ix)
other subjective factors, including concentrations and information obtained from regulators.
The methodology and significant inputs used to determine the amount of credit loss are as follows:
•
The Company calculates the recovery value by performing a discounted cash flow analysis based on the present
value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of
purchase for fixed-rate securities and the spot rate at the date of evaluation of credit loss for floating-rate securities.
• When determining collectability and the period over which value is expected to recover, the Company applies
considerations utilized in its overall credit loss evaluation process which incorporates information regarding the
specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall
macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from
management’s single best estimate, the most likely outcome in a range of possible outcomes, after giving
consideration to a variety of variables that include, but are not limited to: payment terms of the security; the
likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit
enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or
asset sales by the issuer; any private and public sector programs to restructure foreign government securities and
municipals; and changes to the rating of the security or the issuer by rating agencies.
•
Additional considerations are made when assessing the unique features that apply to certain Structured Products
including, but not limited to: the quality of underlying collateral, historical performance of the underlying loan
obligors, historical rent and vacancy levels, changes in the financial condition of the underlying loan obligors,
expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the
underlying loans or assets backing a particular security, changes in the quality of credit enhancement and the
payment priority within the tranche structure of the security.
With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is
given in the credit loss analysis as to whether there has been any deterioration in the credit of the issuer and the
likelihood of recovery in value of the securities that are in a severe unrealized loss position. Consideration is also given
as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any
dividend payments.
210
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
In periods subsequent to the recognition of an initial ACL on a security, the Company reassesses credit loss
quarterly. Subsequent increases or decreases in the expected cash flow from the security result in corresponding
decreases or increases in the ACL which are recognized in earnings and reported within net investment gains (losses);
however, the previously recorded ACL is not reduced to an amount below zero. Full or partial write-offs are deducted
from the ACL in the period the security, or a portion thereof, is considered uncollectible. Recoveries of amounts
previously written off are recorded to the ACL in the period received. When the Company has the intent-to-sell the
security or it is more likely than not that the Company will be required to sell the security before recovery of its
amortized cost, any ACL is written off and the amortized cost is written down to estimated fair value through a charge
within net investment gains (losses), which becomes the new amortized cost of the security.
Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position
Gross unrealized losses on securities without an ACL increased $31.9 billion for the year ended December 31, 2022
to $34.3 billion primarily due to increases in interest rates, widening credit spreads, and the impact of weakening foreign
currencies on certain non-functional currency denominated fixed maturity securities.
Gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position
for 12 months or greater were $10.9 billion at December 31, 2022, or 32% of the total gross unrealized losses on
securities without an ACL.
Investment Grade Fixed Maturity Securities AFS
Of the $10.9 billion of gross unrealized losses on securities without an ACL that have been in a continuous gross
unrealized loss position for 12 months or greater, $10.3 billion, or 95%, were related to 3,875 investment grade
securities. Unrealized losses on investment grade securities are principally related to widening credit spreads since
purchase and, with respect to fixed-rate securities, rising interest rates since purchase.
Below Investment Grade Fixed Maturity Securities AFS
Of the $10.9 billion of gross unrealized losses on securities without an ACL that have been in a continuous gross
unrealized loss position for 12 months or greater, $591 million, or 5%, were related to 428 below investment grade
securities. Unrealized losses on below investment grade securities are principally related to U.S. corporate and foreign
corporate securities (primarily transportation, consumer and communications) and foreign government securities. These
unrealized losses are the result of significantly wider credit spreads resulting from higher risk premiums since purchase,
largely due to economic and market uncertainty, as well as, with respect to fixed-rate securities, rising interest rates since
purchase. Management evaluates U.S. corporate and foreign corporate securities based on several factors such as
expected cash flows, financial condition and near-term and long-term prospects of the issuers. Management evaluates
foreign government securities based on factors impacting the issuers such as expected cash flows, financial condition of
the issuers and any country specific economic conditions or public sector programs to restructure foreign government
securities.
Current Period Evaluation
At December 31, 2022, with respect to securities in an unrealized loss position without an ACL, the Company did
not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these
securities before the anticipated recovery of the remaining amortized cost. Based on the Company’s current evaluation of
its securities in an unrealized loss position without an ACL, the Company concluded that these securities had not
incurred a credit loss and should not have an ACL at December 31, 2022.
Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance (including
changes in the present value of future cash flows expected to be collected), changes in credit ratings and collateral
valuation.
211
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS By Sector
The rollforward of ACL for fixed maturity securities AFS by sector is as follows:
Year Ended December 31, 2022
Balance at January 1,
ACL not previously recorded
Changes for securities with previously recorded ACL
Securities sold or exchanged
Dispositions
Effect of foreign currency translation
Write-offs
Balance at December 31,
U.S.
Corporate
Foreign
Corporate
Foreign
Government
(In millions)
CMBS
Total
$
30 $
28 $
19 $
14 $
13
17
(9)
—
—
67
2
(93)
—
1
(22)
29 $
—
5 $
$
207
(48)
(37)
—
(11)
—
130 $
5
—
—
—
—
—
19 $
91
292
(29)
(139)
—
(10)
(22)
183
Year Ended December 31, 2021
Balance at January 1,
ACL not previously recorded
Changes for securities with previously recorded ACL
Securities sold or exchanged
Dispositions (1)
Effect of foreign currency translation
Write-offs
Balance at December 31,
__________________
U.S.
Corporate
Foreign
Corporate
Foreign
Government
(In millions)
CMBS
Total
$
44 $
16 $
21 $
— $
48
3
(52)
—
—
26
(4)
(10)
—
—
—
—
—
(2)
—
11
3
—
—
—
(13)
30 $
—
28 $
—
19 $
—
14 $
$
81
85
2
(62)
(2)
—
(13)
91
(1)
In connection with the disposition of MetLife Seguros, ACL was reduced by $2 million for the year ended
December 31, 2021. See Note 3 for additional information on the Company’s business dispositions.
Equity Securities
The following table presents equity securities by security type. Common stock includes common stock, exchange traded
funds, mutual funds and real estate investment trusts.
Security Type
Cost
December 31,
2022
Net Unrealized
Gains (Losses) (1)
Estimated
Fair Value
2021
Net Unrealized
Gains (Losses) (1)
Estimated
Fair Value
Cost
(In millions)
Common stock
Non-redeemable preferred stock
Total
__________________
$
$
1,347 $
148
1,495 $
195 $
(6)
189 $
1,542 $
142
1,684 $
784 $
189
973 $
295 $
1
296 $
1,079
190
1,269
(1)
Represents cumulative changes in estimated fair value, recognized in earnings, and not in OCI.
212
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Contractholder-Directed Equity Securities and FVO Securities
The following table presents these investments by asset type. Unit-linked investments are primarily equity securities
(including mutual funds). FVO Securities includes fixed maturity and equity securities to support asset and liability
management strategies for certain insurance products and investments in certain separate accounts.
December 31,
2022
2021
Cost or
Amortized
Cost
Net Unrealized
Gains (Losses) (1)
Estimated
Fair Value
Cost or
Amortized
Cost
(In millions)
Net Unrealized
Gains (Losses) (1)
Estimated
Fair Value
$
$
7,945 $
1,161
9,106 $
288 $
274
562 $
8,233 $
1,435
9,668 $
8,643 $
1,243
9,886 $
1,897 $
359
2,256 $
10,540
1,602
12,142
Asset Type
Unit-linked investments
FVO Securities
Total
__________________
(1)
Represents cumulative changes in estimated fair value, recognized in earnings, and not in OCI.
Mortgage Loans
Mortgage Loans by Portfolio Segment
Mortgage loans are summarized as follows at:
Portfolio Segment
Commercial
Agricultural
Residential
Total amortized cost
Allowance for credit loss
Subtotal mortgage loans, net
Residential — FVO
Total mortgage loans, net
December 31,
2022
2021
Carrying
Value
% of
Total
Carrying
Value
(Dollars in millions)
% of
Total
$
52,502
19,306
12,482
84,290
(527)
83,763
—
62.7 % $
23.0
14.9
100.6
(0.6)
100.0
—
50,553
18,111
11,196
79,860
(634)
79,226
127
63.7 %
22.8
14.1
100.6
(0.8)
99.8
0.2
$
83,763
100.0 % $
79,353
100.0 %
The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis, with
changes in estimated fair value included in net investment income. See Note 10 for further information.
The amount of net (discounts) premiums and deferred (fees) expenses, included within total amortized cost, primarily
attributable to residential mortgage loans was ($744) million and ($759) million at December 31, 2022 and 2021,
respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential
mortgage loans at December 31, 2022 was $219 million, $176 million, and $81 million, respectively. The accrued interest
income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at December 31,
2021 was $180 million, $161 million and $86 million, respectively.
Purchases of mortgage loans, consisting primarily of residential mortgage loans, were $3.1 billion, $1.8 billion and
$3.3 billion for the years ended December 31, 2022, 2021 and 2020, respectively.
213
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
See “— Real Estate and Real Estate Joint Ventures” for the carrying value of wholly-owned real estate acquired through
foreclosure. In addition, for the year ended December 31, 2022, the Company contributed commercial mortgage loans with
an amortized cost of $489 million to joint ventures in anticipation of subsequent foreclosure or deed-in-lieu of foreclosure
transactions. During the year, the joint ventures completed foreclosure or deed-in-lieu of foreclosure transactions on loans
with an amortized cost of $467 million. The real estate collateralizing these foreclosures or deed-in-lieu of foreclosures had
an estimated fair value in excess of amortized cost. As a result of the excess of estimated fair value of the collateral over the
amortized cost of the commercial mortgage loans, upon consummating the foreclosures or deed-in-lieu of foreclosure
transactions, the joint ventures recognized a gain, of which the Company recognized its pro-rata share of $34 million within
net investment gains (losses).
Rollforward of Allowance for Credit Loss for Mortgage Loans by Portfolio Segment
The rollforward of ACL for mortgage loans, by portfolio segment, is as follows:
2022
Years Ended December 31,
2021
2020
Commercial
Agricultural
Residential
Total
Commercial
Agricultural
Residential
Total
Commercial
Agricultural
Residential
Total
(In millions)
$
340 $
88 $
206 $ 634 $
252 $
106 $
232 $ 590 $
246 $
52 $
55 $ 353
—
(2)
—
(120)
—
—
53
—
(22)
—
—
—
(8)
43
—
—
(8)
(150)
—
—
—
88
—
—
—
—
6
—
(24)
—
—
—
(27)
67
(118)
124
3
3
(2)
(26)
—
—
—
—
—
35
22
—
(2)
(1)
161
78
30
176
18
18
(32)
(34)
—
(1)
$
218 $
119 $
190 $ 527 $
340 $
88 $
206 $ 634 $
252 $
106 $
232 $ 590
Balance at January 1,
Adoption of credit loss
guidance
Provision (release)
Initial credit losses on
PCD loans (1)
Charge-offs, net of
recoveries
HFS transfer
Balance at December 31,
__________________
(1)
Represents the initial credit losses on purchased mortgage loans accounted for as PCD.
Allowance for Credit Loss Methodology
The Company records an allowance for expected lifetime credit loss in earnings within net investment gains (losses)
in an amount that represents the portion of the amortized cost basis of mortgage loans that the Company does not expect
to collect, resulting in mortgage loans being presented at the net amount expected to be collected. In determining the
Company’s ACL, management applies significant judgment to estimate expected lifetime credit loss, including: (i)
pooling mortgage loans that share similar risk characteristics, (ii) considering expected lifetime credit loss over the
contractual term of its mortgage loans adjusted for expected prepayments and any extensions, and (iii) considering past
events and current and forecasted economic conditions. Each of the Company’s commercial, agricultural and residential
mortgage loan portfolio segments are evaluated separately. The ACL is calculated for each mortgage loan portfolio
segment based on inputs unique to each loan portfolio segment. On a quarterly basis, mortgage loans within a portfolio
segment that share similar risk characteristics, such as internal risk ratings or consumer credit scores, are pooled for
calculation of ACL. On an ongoing basis, mortgage loans with dissimilar risk characteristics (i.e., loans with significant
declines in credit quality), collateral dependent mortgage loans (i.e., when the borrower is experiencing financial
difficulty, including when foreclosure is reasonably possible or probable) and reasonably expected TDRs (i.e., the
Company grants concessions to a borrower that is experiencing financial difficulties) are evaluated individually for credit
loss. The ACL for loans evaluated individually are established using the same methodologies for all three portfolio
segments. For example, the ACL for a collateral dependent loan is established as the excess of amortized cost over the
estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the
change in the estimated fair value of collateral dependent loans, which are evaluated individually for credit loss, is
recorded as a change in the ACL which is recorded on a quarterly basis as a charge or credit to earnings in net investment
gains (losses).
214
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Commercial and Agricultural Mortgage Loan Portfolio Segments
Commercial and agricultural mortgage loan ACL are calculated in a similar manner. Within each loan portfolio
segment, commercial and agricultural, loans are pooled by internal risk rating. Estimated lifetime loss rates, which vary
by internal risk rating, are applied to the amortized cost of each loan, excluding accrued investment income, on a
quarterly basis to develop the ACL. Internal risk ratings are based on an assessment of the loan’s credit quality, which
can change over time. The estimated lifetime loss rates are based on several loan portfolio segment-specific factors,
including (i) the Company’s experience with defaults and loss severity, (ii) expected default and loss severity over the
forecast period, (iii) current and forecasted economic conditions including growth, inflation, interest rates and
unemployment levels, (iv) loan specific characteristics including loan-to-value (“LTV”) ratios, and (v) internal risk
ratings. These evaluations are revised as conditions change and new information becomes available. The Company uses
its several decades of historical default and loss severity experience which capture multiple economic cycles. The
Company uses a forecast of economic assumptions for a two-year period for most of its commercial and agricultural
mortgage loans, while a one-year period is used for loans originated in certain markets. After the applicable forecast
period, the Company reverts to its historical loss experience using a straight-line basis over two years. For evaluations of
commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of
a rapid change to the economy, which may not be reflected in the loan portfolio, recent loss and recovery trend
experience as compared to historical loss and recovery experience, and loan specific characteristics including debt
service coverage ratios (“DSCR”). In estimating expected lifetime credit loss over the term of its commercial mortgage
loans, the Company adjusts for expected prepayment and extension experience during the forecast period using historical
prepayment and extension experience considering the expected position in the economic cycle and the loan profile (i.e.,
floating rate, shorter-term fixed rate and longer-term fixed rate) and after the forecast period using long-term historical
prepayment experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management
considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or
a change in the number of higher risk loans. In estimating expected lifetime credit loss over the term of its agricultural
mortgage loans, the Company’s experience is much less sensitive to the position in the economic cycle and by loan
profile; accordingly, historical prepayment experience is used, while extension terms are not prevalent with the
Company’s agricultural mortgage loans.
Commercial mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, an
analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis,
estimated valuations of the underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process
focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well
as loans with higher LTV ratios and lower DSCR. Agricultural mortgage loans are reviewed on an ongoing basis, which
review includes, but is not limited to, property inspections, market analysis, estimated valuations of the underlying
collateral, LTV ratios and borrower creditworthiness, as well as reviews on a geographic and property-type basis. The
monitoring process for agricultural mortgage loans also focuses on higher risk loans.
For commercial mortgage loans, the primary credit quality indicator is the DSCR, which compares a property’s net
operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the
DSCR, the higher the risk of experiencing a credit loss. The Company also reviews the LTV ratio of its commercial
mortgage loan portfolio. LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the
underlying collateral. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR
and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio is routinely updated for
all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.
For agricultural mortgage loans, the Company’s primary credit quality indicator is the LTV ratio. The values utilized
in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio
and are routinely updated.
215
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Commitments to lend: After loans are approved, the Company makes commitments to lend and, typically, borrowers
draw down on some or all of the commitments. The timing of mortgage loan funding is based on the commitment
expiration dates. A liability for credit loss for unfunded commercial and agricultural mortgage loan commitments that are
not unconditionally cancellable is recognized in earnings and is reported within net investment gains (losses). The
liability is based on estimated lifetime loss rates as described above and the amount of the outstanding commitments,
which for lines of credit, considers estimated utilization rates. When the commitment is funded or expires, the liability is
adjusted accordingly.
Residential Mortgage Loan Portfolio Segment
The Company’s residential mortgage loan portfolio is comprised primarily of purchased closed end, amortizing
residential mortgage loans, including both performing loans purchased within 12 months of origination and reperforming
loans purchased after they have been performing for at least 12 months post-modification. Residential mortgage loans are
pooled by loan type (i.e., new origination and reperforming) and pooled by similar risk profiles (including consumer
credit score and LTV ratios). Estimated lifetime loss rates, which vary by loan type and risk profile, are applied to the
amortized cost of each loan excluding accrued investment income on a quarterly basis to develop the ACL. The
estimated lifetime loss rates are based on several factors, including (i) industry historical experience and expected results
over the forecast period for defaults, (ii) loss severity, (iii) prepayment rates, (iv) current and forecasted economic
conditions including growth, inflation, interest rates and unemployment levels, and (v) loan pool specific characteristics
including consumer credit scores, LTV ratios, payment history and home prices. These evaluations are revised as
conditions change and new information becomes available. The Company uses industry historical experience which
captures multiple economic cycles as the Company has purchased most of its residential mortgage loans in the last five
years. The Company uses a forecast of economic assumptions for a two-year period for most of its residential mortgage
loans. After the applicable forecast period, the Company immediately reverts to industry historical loss experience.
For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or
nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more
days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage
loans have a higher risk of experiencing a credit loss.
Troubled Debt Restructurings
The Company may grant concessions to borrowers experiencing financial difficulties, which, if not significant, are
not classified as TDRs, while more significant concessions are classified as TDRs. Generally, the types of concessions
include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current
market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concessions granted are
considered in determining any ACL recorded.
For the year ended December 31, 2022, the Company had two commercial mortgage loans modified in a TDR with
both pre-modification and post-modification carrying value, after ACL, of $162 million.
For the year ended December 31, 2021, the Company did not have any commercial mortgage loans modified in a
TDR.
216
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Credit Quality of Mortgage Loans by Portfolio Segment
The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at
December 31, 2022:
Credit Quality Indicator
2022
2021
2020
2019
2018
Prior
Revolving
Loans
Total
% of
Total
(Dollars in millions)
LTV ratios:
Less than 65%
65% to 75%
76% to 80%
Greater than 80%
Total
DSCR:
> 1.20x
1.00x - 1.20x
<1.00x
Total
$
5,081 $
5,633 $
3,496 $
5,195 $
4,866 $ 13,237 $
2,860 $ 40,368
76.9 %
2,321
1,227
1,073
1,613
1,360
1,872
64
33
19
40
99
18
467
421
290
151
287
779
—
—
—
9,466
1,226
1,442
18.0
2.3
2.8
$
7,499 $
6,919 $
4,686 $
7,696 $
6,667 $ 16,175 $
2,860 $ 52,502
100.0 %
$
6,705 $
6,410 $
4,441 $
7,123 $
5,981 $ 14,107 $
2,860 $ 47,627
90.7 %
667
127
128
381
115
130
436
137
274
412
963
1,105
—
—
2,583
2,292
4.9
4.4
$
7,499 $
6,919 $
4,686 $
7,696 $
6,667 $ 16,175 $
2,860 $ 52,502
100.0 %
The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at
December 31, 2022:
Credit Quality Indicator
2022
2021
2020
2019
2018
Prior
Revolving
Loans
Total
% of
Total
(Dollars in millions)
LTV ratios:
Less than 65%
65% to 75%
76% to 80%
Greater than 80%
Total
$ 2,594 $ 2,708 $ 2,600 $ 1,690 $ 2,364 $ 4,276 $
1,171 $ 17,403
90.1 %
177
—
—
320
—
—
347
—
29
177
—
76
93
—
—
494
11
44
131
1,739
—
4
11
153
9.0
0.1
0.8
$ 2,771 $ 3,028 $ 2,976 $ 1,943 $ 2,457 $ 4,825 $
1,306 $ 19,306
100.0 %
The amortized cost of residential mortgage loans by credit quality indicator and vintage year was as follows at
December 31, 2022:
Credit Quality Indicator
2022
2021
2020
2019
2018
Prior
Revolving
Loans
Total
% of
Total
(Dollars in millions)
Performance indicators:
Performing
Nonperforming (1)
Total
__________________
$ 2,071 $ 1,450 $
374 $
982 $
439 $ 6,693 $ — $ 12,009
96.2 %
12
9
10
48
15
379
—
473
3.8
$ 2,083 $ 1,459 $
384 $ 1,030 $
454 $ 7,072 $ — $ 12,482
100.0 %
(1)
Includes residential mortgage loans in process of foreclosure of $146 million and $70 million at December 31, 2022
and 2021, respectively.
LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral.
The amortized cost of commercial and agricultural mortgage loans with an LTV ratio in excess of 100% was $732 million,
or 1% of total commercial and agricultural mortgage loans, at December 31, 2022.
217
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Past Due and Nonaccrual Mortgage Loans
The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified
as performing at both December 31, 2022 and 2021. The Company defines delinquency consistent with industry practice,
when mortgage loans are past due more than two or more months, as applicable, by portfolio segment. The past due and
nonaccrual mortgage loans at amortized cost, prior to ACL, by portfolio segment, were as follows:
Past Due
Past Due and Still
Accruing
Nonaccrual
Portfolio
Segment
December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021
Commercial
Agricultural
Residential
Total
$
$
6 $
13 $
124
473
124
450
(In millions)
6 $
21
12
13 $
169 $
16
8
131
462
603 $
587 $
39 $
37 $
762 $
155
225
442
822
The amortized cost for nonaccrual commercial, agricultural and residential mortgage loans at beginning of year 2021 was
$317 million, $266 million and $534 million, respectively. The amortized cost for nonaccrual agricultural mortgage loans
with no ACL was $7 million and $134 million at December 31, 2022 and 2021, respectively. There were no nonaccrual
commercial or residential mortgage loans without an ACL at either December 31, 2022 or 2021.
Purchased Investments with Credit Deterioration
Investments that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit
quality since origination are classified as PCD. The amortized cost for PCD investments is the purchase price plus an ACL
for the initial estimate of expected lifetime credit losses established upon purchase. Subsequent changes in the ACL on
PCD investments are recognized in earnings and are reported in net investment gains (losses). The non-credit discount or
premium is accreted or amortized to net investment income on an effective yield basis.
The following table reconciles the contractual principal to the purchase price of PCD investments:
Year Ended December 31, 2022
Contractual
Principal
ACL at
Acquisition
Non-Credit
(Discount)
Premium
Purchase
Price
(In millions)
PCD residential mortgage loans
$
48 $
— $
(3) $
45
Real Estate and Real Estate Joint Ventures
The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including
income from operating leases, operating income and equity in earnings from equity method real estate joint ventures. Real
estate investments, by income type, as well as income earned, were as follows at and for the periods indicated:
Income Type
Wholly-owned real estate:
Leased real estate
Other real estate
Real estate joint ventures
Total real estate and real estate joint ventures
December 31,
Years Ended December 31,
2022
2021
2022
Carrying Value
(In millions)
2021
Income
2020
$
$
4,523 $
5,146 $
392 $
429 $
487
8,127
474
6,596
252
556
199
326
435
133
(36)
13,137 $
12,216 $ 1,200 $
954 $
532
218
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The carrying value of wholly-owned real estate acquired through foreclosure was $182 million and $181 million at
December 31, 2022 and 2021, respectively. Depreciation expense on real estate investments was $118 million, $123 million
and $123 million for the years ended December 31, 2022, 2021 and 2020, respectively. Real estate investments were net of
accumulated depreciation of $863 million and $883 million at December 31, 2022 and 2021, respectively.
Leases
Leased Real Estate Investments - Operating Leases
The Company, as lessor, leases investment real estate, principally commercial real estate for office and retail use,
through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating
costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to
purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is
contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-
lease components related to reimbursement of property operating costs from associated lease components. These property
operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over
the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating
lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification. Leased
real estate investments and income earned, by property type, were as follows at and for the periods indicated:
Property Type
Leased real estate investments:
Office
Retail
Apartment
Land
Industrial
Hotel
Other
Total leased real estate investments
December 31,
Years Ended December 31,
2022
2021
2022
Carrying Value
(In millions)
2021
Income
2020
$
$
2,206 $
804
625
562
254
72
—
4,523 $
2,322 $
938
828
635
339
84
—
5,146 $
183 $
60
56
26
62
5
—
392 $
196 $
75
66
28
58
6
—
429 $
188
93
62
25
56
5
6
435
Future contractual receipts under operating leases at December 31, 2022 were $268 million in 2023, $204 million in
2024, $172 million in 2025, $146 million in 2026, $123 million in 2027, $934 million thereafter and, in total, were
$1.8 billion.
Leveraged and Direct Financing Leases
The Company has diversified leveraged and direct financing lease portfolios. Its leveraged leases principally include
rail cars, commercial real estate and renewable energy generation facilities, and its direct financing leases principally
include commercial real estate. These assets are leased through a variety of lease arrangements, which may include options
to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using
available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation,
geographic diversification, and ongoing reviews of estimated residual values, using available third-party data and, in
certain leases, linking the amount of future rental receipts to changes in inflation rates. Generally, estimated residual values
are not guaranteed by the lessee or a third-party.
219
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Investment in leveraged and direct financing leases consisted of the following at:
Lease receivables, net (1)
Estimated residual values
Subtotal
Unearned income
Investment in leases, before ACL
ACL
Investment in leases, net of ACL
__________________
December 31,
2022
2021
Leveraged
Leases
Direct
Financing
Leases
Leveraged
Leases
Direct
Financing
Leases
$
477 $
1,750 $
(In millions)
517
994
(245)
749
(18)
39
1,789
(586)
1,203
(8)
542 $
560
1,102
(284)
818
(31)
1,755
39
1,794
(642)
1,152
(9)
$
731 $
1,195 $
787 $
1,143
(1)
Future contractual receipts under direct financing leases at December 31, 2022 were $122 million in 2023, $92 million
in 2024, $91 million in 2025, $117 million in 2026, $101 million in 2027, $1.2 billion thereafter and, in total, were
$1.8 billion.
Lease receivables are generally due in periodic installments. The payment periods for leveraged leases generally range
from one to nine years, but in certain circumstances can be over nine years, while the payment periods for direct financing
leases generally range from one to 25 years but in certain circumstances can be over 25 years. For lease receivables, the
primary credit quality indicator is whether the lease receivable is performing or nonperforming, which is assessed monthly.
The Company generally defines nonperforming lease receivables as those that are 90 days or more past due. At both
December 31, 2022 and 2021, all leveraged lease receivables were performing. At December 31, 2022 and 2021, 98% and
99% of direct financing lease receivables were performing, respectively.
The deferred income tax liability related to leveraged leases was $220 million and $272 million at December 31, 2022
and 2021, respectively.
The components of income from investment in leveraged and direct financing leases, excluding net investment gains
(losses), were as follows:
Lease investment income
Less: Income tax expense
Lease investment income, net of income tax
Years Ended December 31,
2022
2021
2020
Leveraged
Leases
Direct
Financing
Leases
Leveraged
Leases
Direct
Financing
Leases
Leveraged
Leases
Direct
Financing
Leases
(In millions)
$
$
35 $
129 $
34 $
96 $
39 $
106
7
27
7
20
8
28 $
102 $
27 $
76 $
31 $
22
84
220
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company records an allowance for expected lifetime credit loss in earnings within investment gains (losses) in an
amount that represents the portion of the investment in leases that the Company does not expect to collect, resulting in the
investment in leases being presented at the net amount expected to be collected. In determining the ACL, management
applies significant judgment to estimate expected lifetime credit loss, including: (i) pooling leases that share similar risk
characteristics, (ii) considering expected lifetime credit loss over the contractual term of the lease, and (iii) considering past
events and current and forecasted economic conditions. Leases with dissimilar risk characteristics are evaluated
individually for credit loss. Expected lifetime credit loss on leveraged lease receivables is estimated using a probability of
default and loss given default model, where the probability of default incorporates third party credit ratings of the lessee
and the related historical default data. Direct financing leases principally relate to leases of commercial real estate;
accordingly, expected lifetime credit loss is estimated on such lease receivables consistent with the methodology for
commercial mortgage loans (see “— Mortgage Loans — Allowance for Credit Loss Methodology”). The Company also
assesses the non-guaranteed residual values for recoverability by comparison to the current estimated fair value of the
leased asset and considers other relevant market information such as independent third-party forecasts, consulting, asset
brokerage and investment banking reports and data, comparable market transactions, and factors such as the competitive
dynamics impacting specific industries, technological change and obsolescence, government and regulatory rules, tax
policy, potential environmental liabilities and litigation.
Other Invested Assets
Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9),
tax credit and renewable energy partnerships, annuities funding structured settlement claims (see Note 1), direct financing
and leveraged leases (see “— Leveraged and Direct Financing Leases”), operating joint ventures (see Note 1) and FHLBNY
common stock (see “— Invested Assets on Deposit, Held in Trust and Pledged as Collateral”).
Tax Credit Partnerships
The carrying value of tax credit partnerships was $759 million and $947 million at December 31, 2022 and 2021,
respectively. Losses from tax credit partnerships included within net investment income were $174 million, $195 million
and $226 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Cash Equivalents
Cash equivalents, which includes securities and other investments with an original or remaining maturity of three months
or less at the time of purchase, was $10.0 billion and $9.0 billion, principally at estimated fair value, at December 31, 2022
and 2021, respectively.
Concentrations of Credit Risk
Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government
and its agencies, at estimated fair value, were in fixed income securities of the following foreign governments and their
agencies:
Japan
South Korea
Mexico
December 31,
2022
2021
$
$
$
(In millions)
24,295 $
5,887 $
3,463
32,723
7,117
N/A
221
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Securities Lending Transactions and Repurchase Agreements
Securities, Collateral and Reinvestment Portfolio
A summary of these transactions and agreements accounted for as secured borrowings were as follows:
2022
2021
December 31,
Securities (1)
Securities (1)
Agreement Type
Securities lending
Repurchase agreements
__________________
$
$
Estimated
Fair Value
Cash
Collateral
Received from
Counterparties (2)
Reinvestment
Portfolio at
Estimated
Fair Value
Estimated
Fair Value
Cash
Collateral
Received from
Counterparties (2)
Reinvestment
Portfolio at
Estimated
Fair Value
(In millions)
11,756 $
12,092 $
11,833 $
20,654 $
21,055 $
3,176 $
3,125 $
3,057 $
3,416 $
3,325 $
21,319
3,357
(1)
These securities were included within fixed maturity securities AFS and short-term investments at December 31, 2022
and within fixed maturity securities AFS at December 31, 2021.
(2)
The liability for cash collateral is included within payables for collateral under securities loaned and other transactions.
Contractual Maturities
Contractual maturities of these transactions and agreements accounted for as secured borrowings were as follows:
December 31,
2022
2021
Remaining Maturities
Remaining Maturities
Open (1)
1 Month
or Less
Over 1
Month
to 6
Months
Over 6
Months
to 1
Year
Over 1
Month
to 6
Months
Over 6
Months
to 1
Year
1 Month
or Less
Total
Total
Open (1)
(In millions)
$ 1,945 $ 5,448 $ 3,101 $ — $ 10,494 $ 5,900 $ 7,052 $ 7,055 $ — $ 20,007
—
—
422
63
922
—
1,344
191
—
254
—
—
285
762
—
1,047
—
—
—
—
—
1
$ 1,945 $ 5,933 $ 4,214 $ — $ 12,092 $ 5,901 $ 7,337 $ 7,817 $ — $ 21,055
—
—
—
—
—
—
—
1
Security Type
Cash collateral liability by
security type:
Securities lending:
U.S. government and agency
Foreign government
Agency RMBS
U.S. corporate
Total
Repurchase agreements:
U.S. government and agency
$ — $ 3,125 $ — $ — $ 3,125 $ — $ 3,325 $ — $ — $ 3,325
__________________
(1)
The related security could be returned to the Company on the next business day, which would require the Company to
immediately return the cash collateral.
If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell
investments to meet the return obligation, it may have difficulty selling such collateral that is invested in a timely manner, be
forced to sell investments in a volatile or illiquid market for less than what otherwise would have been realized under normal
market conditions, or both.
222
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The securities lending and repurchase agreements reinvestment portfolios consist principally of high quality, liquid,
publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or cash. If the securities, or the
reinvestment portfolio become less liquid, liquidity resources within the general account are available to meet any potential
cash demands when securities are put back by the counterparty.
Invested Assets on Deposit, Held in Trust and Pledged as Collateral
Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for all asset
classes, except mortgage loans, which are presented at carrying value and were as follows at:
Invested assets on deposit (regulatory deposits)
Invested assets held in trust (external reinsurance agreements) (1)
Invested assets pledged as collateral (2)
Total invested assets on deposit, held in trust and pledged as collateral
__________________
December 31,
2022
2021
(In millions)
1,514 $
881
25,442
27,837 $
1,872
1,114
24,261
27,247
$
$
(1)
(2)
Represents assets held in trust related to third-party reinsurance agreements. Excludes assets held in trust related to
reinsurance agreements between wholly-owned subsidiaries of $1.9 billion and $2.1 billion at December 31, 2022 and
2021, respectively.
The Company has pledged invested assets in connection with various agreements and transactions, including funding
agreements (see Note 4), derivative transactions (see Note 9), secured debt and short-term debt related to repurchase
agreements (see Note 13), and a collateral financing arrangement (see Note 14).
See “— Securities Lending Transactions and Repurchase Agreements” for information regarding securities supporting
securities lending transactions and repurchase agreements and Note 7 for information regarding investments designated to the
closed block. In addition, the Company’s investment in FHLBNY common stock, included within other invested assets,
which is considered restricted until redeemed by the issuer, was $729 million and $769 million, at redemption value, at
December 31, 2022 and 2021, respectively.
Collectively Significant Equity Method Investments
The Company held equity method investments of $25.7 billion at December 31, 2022, comprised primarily of other
limited partnership interests (private equity funds and hedge funds), real estate joint ventures (including real estate funds), tax
credit and renewable energy partnerships and operating joint ventures. The Company’s maximum exposure to loss related to
these equity method investments was limited to the carrying value of these investments plus $7.8 billion of unfunded
commitments at December 31, 2022.
As described in Note 1, the Company generally recognizes its share of earnings in its equity method investments within
net investment income using a three-month lag in instances where the investee’s financial information is not sufficiently
timely or when the investee’s reporting period differs from the Company’s reporting period. Aggregate net investment
income from these equity method investments exceeded 10% of the Company’s consolidated pre-tax income (loss) for the
three most recent annual periods.
The following aggregated summarized financial data reflects the latest available financial information and does not
represent the Company’s proportionate share of the assets, liabilities, or earnings of such entities. Aggregate total assets of
these entities totaled $1.2 trillion and $1.1 trillion at December 31, 2022 and 2021, respectively. Aggregate total liabilities of
these entities totaled $148.9 billion and $149.4 billion at December 31, 2022 and 2021, respectively. Aggregate net income
(loss) of these entities totaled ($11.8) billion, $231.0 billion and $41.6 billion for the years ended December 31, 2022, 2021
and 2020, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily
comprised of investment income, including recurring investment income (loss) and realized and unrealized investment
gains (losses).
223
Table of Contents
8. Investments (continued)
Variable Interest Entities
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to
direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be
the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an
evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement
in the entity.
Consolidated VIEs
Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the
general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed
investment.
The following table presents the total assets and total liabilities relating to investment related VIEs for which the
Company has concluded that it is the primary beneficiary and which are consolidated at:
Asset Type
Investment funds (primarily other invested assets)
Renewable energy partnership (primarily other invested assets)
Other investments (primarily other assets)
Total
Unconsolidated VIEs
December 31,
2022
2021
Total
Assets
Total
Liabilities
Total
Assets
Total
Liabilities
(In millions)
$
$
266 $
1 $
292 $
76
—
—
—
79
1
342 $
1 $
372 $
1
—
—
1
The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant
variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:
Asset Type
Fixed maturity securities AFS (2)
Other limited partnership interests
Other invested assets
Other investments
Total
__________________
December 31,
2022
2021
Carrying
Amount
Maximum
Exposure
to Loss (1)
Carrying
Amount
Maximum
Exposure
to Loss (1)
$
51,422 $
51,422 $
62,654 $
(In millions)
13,244
1,310
945
18,906
1,387
948
13,287
1,257
776
62,654
20,720
1,314
926
$
66,921 $
72,663 $
77,974 $
85,614
(1)
The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the
carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests is
equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets,
the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such
investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced
by income tax credits guaranteed by third parties. Such a maximum loss would be expected to occur only upon
bankruptcy of the issuer or investee.
(2)
For variable interests in Structured Products included within fixed maturity securities AFS, the Company’s
involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that
do not have substantial equity.
224
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
As described in Note 21, the Company makes commitments to fund partnership investments in the normal course of
business. Excluding these commitments, the Company did not provide financial or other support to investees designated as
VIEs for each of the years ended December 31, 2022, 2021 and 2020.
Net Investment Income
The composition of net investment income by asset type was as follows:
Asset Type
Fixed maturity securities AFS
Equity securities
FVO Securities
Mortgage loans
Policy loans
Real estate and real estate joint ventures
Other limited partnership interests
Cash, cash equivalents and short-term investments
Operating joint ventures
Other
Subtotal investment income
Less: Investment expenses
Subtotal, net
Unit-linked investments
Net investment income
Years Ended December 31,
2022
2021
2020
(In millions)
$
11,490 $
10,996 $
11,304
36
(127)
3,539
460
1,200
858
358
51
633
18,498
1,284
17,214
(1,298)
36
167
3,435
474
954
4,927
103
77
223
21,392
949
20,443
952
50
140
3,518
498
532
1,000
213
93
255
17,603
1,054
16,549
568
$
15,916 $
21,395 $
17,117
Net Investment Income (“NII”) Information
Net realized and unrealized gains (losses) recognized in NII:
Net realized gains (losses) from sales and disposals (primarily FVO Securities and Unit-
linked investments)
Net unrealized gains (losses) from changes in estimated fair value (primarily FVO
Securities and Unit-linked investments)
Net realized and unrealized gains (losses) recognized in NII
$
155 $
518 $
(1,586)
616
$
(1,431) $
1,134 $
422
233
655
Changes in estimated fair value subsequent to purchase of FVO Securities and Unit-linked
investments still held at the end of the respective periods and recognized in NII
$
(1,286) $
730 $
489
Equity method investments NII (primarily real estate joint ventures, other limited
partnership interests, tax credit and renewable energy partnerships and operating joint
ventures)
$
1,305 $
5,136 $
829
225
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
8. Investments (continued)
Net Investment Gains (Losses)
Net Investment Gains (Losses) by Asset Type and Transaction Type
The composition of net investment gains (losses) by asset type and transaction type was as follows:
Asset Type
Fixed maturity securities AFS
Equity securities
Mortgage loans
Real estate and real estate joint ventures (excluding changes in estimated fair value)
Other limited partnership interests (excluding changes in estimated fair value)
Other gains (losses)
Subtotal
Change in estimated fair value of other limited partnership interests and real estate joint ventures
Non-investment portfolio gains (losses) (1)
Subtotal
Net investment gains (losses)
Transaction Type
Realized gains (losses) on investments sold or disposed
Impairment (losses)
Recognized gains (losses):
Change in allowance for credit loss recognized in earnings
Unrealized net gains (losses) recognized in earnings
Total recognized gains (losses)
Non-investment portfolio gains (losses) (1)
Net investment gains (losses)
Years Ended December 31,
2022
2021
2020
(In millions)
$
(1,912) $
66 $
(133)
21
653
53
178
(1,140)
(14)
(108)
(122)
108
(18)
502
(6)
131
783
45
701
746
$
(1,262) $
1,529 $
$
(880) $
711 $
(40)
(24)
(134)
(100)
(234)
(108)
(86)
227
141
701
$
(1,262) $
1,529 $
297
(137)
(213)
7
(15)
198
137
(4)
(243)
(247)
(110)
634
(63)
(280)
(158)
(438)
(243)
(110)
Net Investment Gains (Losses) (“NIGL”) Information
Changes in estimated fair value subsequent to purchase of equity securities still held at the end of
the respective periods and recognized in NIGL
$
(89) $
77 $
(127)
Other gains (losses) include:
Gains (losses) on disposed investments which were previously in a qualified cash flow
hedge relationship
Gains (losses) on leveraged leases and renewable energy partnerships
Foreign currency gains (losses)
Net Realized Investment Gains (Losses) From Sales and Disposals of Investments
Recognized in NIGL
Recognized in NII
Net realized investment gains (losses) from sales and disposals of investments
__________________
(1)
See Note 3 for information regarding the Company’s business dispositions.
$
$
$
$
$
38 $
33 $
88 $
12 $
129
87
182 $
(10) $
79
(880) $
155
(725) $
711 $
518
1,229 $
634
422
1,056
226
Table of Contents
8. Investments (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Fixed Maturity Securities AFS and Equity Securities – Composition of Net Investment Gains (Losses)
The composition of net investment gains (losses) for these securities is as follows:
Fixed Maturity Securities AFS
Proceeds
Gross investment gains
Gross investment (losses)
Realized gains (losses) on sales and disposals
Net credit loss (provision) release (change in ACL recognized in earnings)
Impairment (losses)
Net credit loss (provision) release and impairment (losses)
Net investment gains (losses)
Equity Securities
Realized gains (losses) on sales and disposals
Unrealized net gains (losses) recognized in earnings
Net investment gains (losses)
9. Derivatives
Accounting for Derivatives
Years Ended December 31,
2022
2021
2020
(In millions)
$
$
67,754 $
54,612 $
40,809
935 $
761 $
1,125
(2,704)
(1,769)
(103)
(40)
(143)
(656)
105
(15)
(24)
(39)
$
(1,912) $
66 $
$
$
(47) $
(69) $
(86)
177
(133) $
108 $
(674)
451
(91)
(63)
(154)
297
16
(153)
(137)
See Note 1 for a description of the Company’s accounting policies for derivatives and Note 10 for information about the
fair value hierarchy for derivatives.
Derivative Strategies
The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign
currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including
the use of derivatives.
Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit
spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”)
market. Certain of the Company’s OTC derivatives are cleared and settled through central clearing counterparties (“OTC-
cleared”), while others are bilateral contracts between two counterparties (“OTC-bilateral”). The types of derivatives the
Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default
swaps and structured interest rate swaps to synthetically replicate investment risks and returns which are not readily available
in the cash markets.
Interest Rate Derivatives
The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including
interest rate swaps, interest rate total return swaps, caps, floors, swaptions, futures and forwards.
Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter
interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate
swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and
floating rate interest amounts as calculated by reference to an agreed notional amount. The Company utilizes interest rate
swaps in fair value, cash flow and nonqualifying hedging relationships.
227
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company uses structured interest rate swaps to synthetically create investments that are either more expensive to
acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash
instrument such as a U.S. government and agency, or other fixed maturity securities AFS. Structured interest rate swaps are
included in interest rate swaps and are not designated as hedging instruments.
Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified
intervals, the difference between the economic risk and reward of an asset or a market index and a benchmark interest rate,
calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and
received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master
agreements that provide for a single net payment to be made by the counterparty at each due date. Interest rate total return
swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure
arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate total
return swaps in nonqualifying hedging relationships.
The Company purchases interest rate caps primarily to protect its floating rate liabilities against rises in interest rates
above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities, and
interest rate floors primarily to protect its minimum rate guarantee liabilities against declines in interest rates below a
specified level. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by
entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in nonqualifying hedging
relationships.
In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a
specified number of contracts, the value of which is determined by the different classes of interest rate securities, to post
variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to
pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with
regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and
swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of
liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates
acquiring, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve
performance, and to hedge minimum guarantees embedded in certain variable annuity products issued by the Company.
The Company utilizes exchange-traded interest rate futures in nonqualifying hedging relationships.
Swaptions are used by the Company to hedge interest rate risk associated with the Company’s long-term liabilities and
invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the
Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The
Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes
swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options.
The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the
contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in
cash flow and nonqualifying hedging relationships.
A synthetic GIC is a contract that simulates the performance of a traditional GIC through the use of financial
instruments. The contractholder owns the underlying assets, and the Company provides a guarantee (or “wrap”) on the
participant funds for an annual risk charge. The Company’s maximum exposure to loss on synthetic GICs is the notional
amount, in the event the values of all of the underlying assets were reduced to zero. The Company’s risk is substantially
lower due to contractual provisions that limit the portfolio to high quality assets, which are pre-approved and monitored for
compliance, as well as the collection of risk charges. In addition, the crediting rates reset periodically to amortize market
value gains and losses over a period equal to the duration of the wrapped portfolio, subject to a 0% floor. While plan
participants may transact at book value, contractholder withdrawals may only occur immediately at market value, or at
book value paid over a period of time per contract provisions. Synthetic GICs are not designated as hedging instruments.
228
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
9. Derivatives (continued)
Foreign Currency Exchange Rate Derivatives
The Company uses foreign currency exchange rate derivatives, including foreign currency swaps, foreign currency
forwards, currency options and exchange-traded currency futures, to reduce the risk from fluctuations in foreign currency
exchange rates associated with its assets and liabilities denominated in foreign currencies. The Company also uses foreign
currency derivatives to hedge the foreign currency exchange rate risk associated with certain of its net investments in
foreign operations.
In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the
difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to
an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of
the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow and nonqualifying
hedging relationships.
In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an
identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a
contract is made at the specified future date. The Company utilizes foreign currency forwards in fair value, NIFO hedges
and nonqualifying hedging relationships.
The Company enters into currency options that give it the right, but not the obligation, to sell the foreign currency
amount in exchange for a functional currency amount within a limited time at a contracted price. The contracts may also be
net settled in cash, based on differentials in the foreign currency exchange rate and the strike price. The Company uses
currency options to hedge against the foreign currency exposure inherent in certain of its variable annuity products. The
Company also uses currency options as an economic hedge of foreign currency exposure related to the Company’s non-
U.S. subsidiaries. The Company utilizes currency options in NIFO hedges and nonqualifying hedging relationships.
To a lesser extent, the Company uses exchange-traded currency futures to hedge currency mismatches between assets
and liabilities, and to hedge minimum guarantees embedded in certain variable annuity products issued by the Company.
The Company utilizes exchange-traded currency futures in nonqualifying hedging relationships.
Credit Derivatives
The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its
investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a
premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may
be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount
in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered.
Credit events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations and involuntary
restructuring for corporate obligors, as well as repudiation, moratorium or governmental intervention for sovereign
obligors. In each case, payout on a credit default swap is triggered only after the relevant third party, Credit Derivatives
Determinations Committee determines that a credit event has occurred. The Company utilizes credit default swaps in
nonqualifying hedging relationships.
The Company enters into written credit default swaps to synthetically create credit investments that are either more
expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and
one or more cash instruments, such as U.S. government and agency, or other fixed maturity securities AFS. These credit
default swaps are not designated as hedging instruments.
The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price
is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary
purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit
spreads, the Company designates these transactions as credit forwards. The Company utilizes credit forwards in cash flow
hedging relationships.
Equity Derivatives
The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index
options, equity variance swaps, exchange-traded equity futures and equity total return swaps.
229
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable
annuity products issued by the Company. To hedge against adverse changes in equity indices, the Company enters into
contracts to sell the underlying equity index within a limited time at a contracted price. The contracts will be net settled in
cash based on differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also
contain settlement provisions linked to interest rates. In certain instances, the Company may enter into a combination of
transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of
options. The Company utilizes equity index options in nonqualifying hedging relationships.
Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable
annuity products issued by the Company. In an equity variance swap, the Company agrees with another party to exchange
amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance
swaps in nonqualifying hedging relationships.
In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of
contracts, the value of which is determined by the different classes of equity securities, to post variation margin on a daily
basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based
on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission
merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge minimum
guarantees embedded in certain variable annuity products issued by the Company. The Company utilizes exchange-traded
equity futures in nonqualifying hedging relationships.
In an equity total return swap, the Company agrees with another party to exchange, at specified intervals, the
difference between the economic risk and reward of an asset or a market index and a benchmark interest rate, calculated by
reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over
the life of the contract based on the terms of the swap. The Company uses equity total return swaps to hedge its equity
market guarantees in certain of its insurance products. Equity total return swaps can be used as hedges or to synthetically
create investments. The Company utilizes equity total return swaps in nonqualifying hedging relationships.
230
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
9. Derivatives (continued)
Primary Risks Managed by Derivatives
The following table presents the primary underlying risk exposure, gross notional amount and estimated fair value of the
Company’s derivatives, excluding embedded derivatives, held at:
Primary Underlying Risk Exposure
Derivatives Designated as Hedging Instruments:
December 31,
2022
2021
Estimated Fair Value
Estimated Fair Value
Gross
Notional
Amount
Assets
Liabilities
Gross
Notional
Amount
(In millions)
Assets
Liabilities
Fair value hedges:
Interest rate swaps
Interest rate
$
4,143 $ 1,353 $
467 $
3,550 $ 2,164 $
Foreign currency swaps
Foreign currency exchange rate
Foreign currency forwards
Foreign currency exchange rate
Subtotal
Cash flow hedges:
Interest rate swaps
Interest rate forwards
Interest rate
Interest rate
Foreign currency swaps
Foreign currency exchange rate
Subtotal
NIFO hedges:
Foreign currency forwards
Foreign currency exchange rate
Currency options
Subtotal
Total qualifying hedges
Foreign currency exchange rate
Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate swaps
Interest rate floors
Interest rate caps
Interest rate futures
Interest rate options
Interest rate forwards
Interest rate total return swaps
Synthetic GICs
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Interest rate
Currency futures
Foreign currency exchange rate
Currency options
Credit default swaps — purchased Credit
Credit default swaps — written
Credit
Foreign currency exchange rate
Equity futures
Equity index options
Equity variance swaps
Equity total return swaps
Equity market
Equity market
Equity market
Equity market
Total non-designated or nonqualifying derivatives
Total
602
1,336
82
10
6,081
1,445
4,107
7,447
8
1
42,608
3,554
54,162
3,563
680
3,000
3,680
—
236
236
—
89
556
262
1,354
1,699
3,315
38
—
38
801
1,636
11
—
5,987
2,175
4,117
6,889
6
89
41,095
1,600
52,101
1,695
—
3,000
3,000
—
139
139
6
23
58
87
1
119
1,557
1,677
—
—
—
63,923
5,244
3,909
61,088
4,009
1,764
31,661
1,660
1,354
38,860
3,644
115
25,270
48,290
1,453
44,391
381
—
46,316
125
950
2
473
—
—
—
333
—
2,925
11,512
2,988
16,701
163
2,799
8
—
18
133
8
765
4
23
—
—
1
88
32
—
—
383
661
—
—
79
28
4
323
1
112
7,701
65,559
1,615
11,754
374
1,048
40,121
12,787
16,230
839
900
3,042
8,626
4,204
145
124
4
493
—
9
—
768
36
—
—
13
177
12
29,743
1,004
699
3,025
17
11
—
—
—
10
26
4
—
614
666
2
—
113
12
5
458
13
50
264,193
6,167
3,066
247,127
6,457
$ 328,116 $ 11,411 $
6,975 $ 308,215 $ 10,466 $
2,088
3,852
231
Foreign currency swaps
Foreign currency exchange rate
Foreign currency forwards
Foreign currency exchange rate
12,815
1,454
16,195
544
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not
qualify as part of a hedging relationship at both December 31, 2022 and 2021. The Company’s use of derivatives includes
(i) derivatives that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for
hedge accounting due to the criteria required under the portfolio hedging rules; (ii) derivatives that economically hedge
insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because
the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship;
(iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes
in estimated fair value of the embedded derivatives are already recorded in net income; and (iv) written credit default swaps
and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because
they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the
recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for
the item being hedged.
232
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Effects of Derivatives on the Consolidated Statements of Operations and Comprehensive Income (Loss)
The following table presents the consolidated financial statement location and amount of gain (loss) recognized on fair
value, cash flow, NIFO, nonqualifying hedging relationships and embedded derivatives:
Year Ended December 31, 2022
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Interest
Credited to
Policyholder
Account
Balances
Policyholder
Benefits and
Claims
(In millions)
Other
Expenses
OCI
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)
$
9
$
Hedged items
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)
Hedged items
Amount excluded from the assessment of hedge effectiveness
Subtotal
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Foreign currency transaction gains (losses) on hedged items
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Subtotal
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)
Non-derivative hedging instruments
Subtotal
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging
Instruments:
Interest rate derivatives (1)
Foreign currency exchange rate derivatives (1)
Credit derivatives — purchased (1)
Credit derivatives — written (1)
Equity derivatives (1)
Foreign currency transaction gains (losses) on hedged items
Subtotal
Earned income on derivatives
Embedded derivatives (2)
Total
(9)
109
(110)
—
(1)
N/A
59
N/A
6
—
N/A
—
65
N/A
N/A
N/A
3
2
—
—
45
—
50
376
N/A
$
—
—
(220)
217
46
43
N/A
41
N/A
(609)
587
N/A
—
19
N/A
N/A
N/A
—
—
—
—
—
—
—
—
—
—
—
—
—
—
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
(3,879)
(368)
75
(92)
423
282
(3,559)
1,015
N/A
172
$
(1,187) $
(26) $
1,127
—
—
—
(60)
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
(88)
(4)
—
—
250
—
158
150
—
27
—
—
—
1
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
—
—
—
—
—
—
—
(145)
N/A
—
—
—
—
—
—
N/A
N/A
N/A
N/A
N/A
N/A
N/A $
(2,367)
4
(104)
N/A
1,784
1
—
N/A
—
5
N/A
N/A
N/A
—
—
—
—
—
—
—
—
N/A
602
—
—
—
(85)
85
47
132
N/A
N/A
N/A
N/A
N/A
N/A
N/A
—
N/A
47
$
490
$
62
$
(2,372) $
248
$
(144) $
5
$
233
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Year Ended December 31, 2021
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Interest
Credited to
Policyholder
Account
Balances
Policyholder
Benefits and
Claims
(In millions)
Other
Expenses
OCI
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)
$
6
$
Hedged items
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)
Hedged items
Amount excluded from the assessment of hedge effectiveness
Subtotal
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Foreign currency transaction gains (losses) on hedged items
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Subtotal
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)
Non-derivative hedging instruments
Subtotal
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging
Instruments:
Interest rate derivatives (1)
Foreign currency exchange rate derivatives (1)
Credit derivatives — purchased (1)
Credit derivatives — written (1)
Equity derivatives (1)
Foreign currency transaction gains (losses) on hedged items
Subtotal
Earned income on derivatives
Embedded derivatives (2)
Total
(6)
50
(44)
—
6
N/A
56
N/A
8
—
N/A
—
64
N/A
N/A
N/A
2
—
—
—
(56)
—
(54)
151
N/A
$
—
—
(191)
185
—
(6)
N/A
84
N/A
(403)
401
N/A
—
82
N/A
N/A
N/A
—
—
—
—
—
—
—
—
N/A
—
—
—
—
—
—
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
(1,992)
(986)
9
41
(1,280)
249
(3,959)
984
747
$
(456) $
406
—
—
—
(50)
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
(49)
2
—
—
(302)
—
(349)
213
—
—
—
—
—
—
—
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
—
—
—
—
—
—
—
(159)
N/A
$
—
—
—
—
—
—
N/A
N/A
N/A
N/A
N/A
N/A
N/A $
(599)
3
(143)
N/A
2
—
500
393
—
N/A
(14)
—
5
N/A
N/A
N/A
—
—
—
—
—
—
—
—
N/A
—
137
97
42
139
N/A
N/A
N/A
N/A
N/A
N/A
N/A
—
N/A
276
$
167
$
76
$
(2,228) $
(186) $
(159) $
5
$
234
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Year Ended December 31, 2020
Net
Investment
Income
Net
Investment
Gains
(Losses)
Net
Derivative
Gains
(Losses)
Interest
Credited to
Policyholder
Account
Balances
Policyholder
Benefits and
Claims
(In millions)
Other
Expenses
OCI
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1)
$
(10) $
$
360
$
Hedged items
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)
Hedged items
Amount excluded from the assessment of hedge effectiveness
Subtotal
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Foreign currency transaction gains (losses) on hedged items
Credit derivatives: (1)
Amount of gains (losses) deferred in AOCI
Amount of gains (losses) reclassified from AOCI into income
Subtotal
Gain (Loss) on NIFO Hedges:
Foreign currency exchange rate derivatives (1)
Non-derivative hedging instruments
Subtotal
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging
Instruments:
Interest rate derivatives (1)
Foreign currency exchange rate derivatives (1)
Credit derivatives — purchased (1)
Credit derivatives — written (1)
Equity derivatives (1)
Foreign currency transaction gains (losses) on hedged items
Subtotal
Earned income on derivatives
Embedded derivatives (2)
Total
__________________
12
(46)
44
—
—
N/A
36
N/A
4
—
N/A
—
40
N/A
N/A
N/A
(6)
—
—
—
(28)
—
(34)
217
N/A
$
—
—
98
(93)
(47)
(42)
N/A
121
N/A
851
(765)
N/A
—
207
N/A
N/A
N/A
—
—
—
—
—
—
—
—
—
—
—
—
—
—
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
2,149
(323)
(28)
(106)
(1,151)
(8)
533
926
N/A
(110)
(399)
—
—
—
(39)
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
55
(3)
—
—
(203)
—
(151)
190
—
—
—
—
—
—
—
—
N/A
—
N/A
—
—
N/A
—
—
N/A
N/A
N/A
—
—
—
—
—
—
—
(152)
N/A
$
—
—
—
—
—
—
N/A
N/A
N/A
N/A
N/A
N/A
N/A $
1,277
2
(159)
N/A
2
—
(445)
(857)
—
N/A
(102)
—
4
N/A
N/A
N/A
—
—
—
—
—
—
—
—
—
(286)
36
(20)
16
N/A
N/A
N/A
N/A
N/A
N/A
N/A
—
N/A
N/A
$
223
$
165
$
1,349
$
$
(152) $
4
$
(270)
(1)
(2)
Excludes earned income on derivatives.
The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in
net derivative gains (losses) in connection with this adjustment were $18 million, ($17) million and ($10) million for
the years ended December 31, 2022, 2021 and 2020, respectively.
235
Table of Contents
9. Derivatives (continued)
Fair Value Hedges
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company designates and accounts for the following as fair value hedges when they have met the requirements of
fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities;
(ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and
liabilities; and (iii) foreign currency forwards to hedge the foreign currency fair value exposure of foreign currency
denominated investments.
The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging
adjustments for items designated and qualifying as hedged items in fair value hedges:
Balance Sheet Line Item
Fixed maturity securities AFS
Mortgage loans
Future policy benefits
Policyholder account balances
__________________
Carrying Amount
of the Hedged
Assets/(Liabilities)
Cumulative Amount
of Fair Value Hedging Adjustments
Included in the Carrying Amount of Hedged
Assets/(Liabilities) (1)
December 31, 2022
December 31, 2021
December 31, 2022
December 31, 2021
$
$
$
$
1,411 $
331 $
(3,524) $
(1,080) $
(In millions)
2,164
634
$
$
(4,735) $
— $
1 $
(19) $
276 $
27 $
(1)
3
(877)
—
(1)
Includes ($136) million and ($161) million of hedging adjustments on discontinued hedging relationships at
December 31, 2022 and 2021, respectively.
For the Company’s foreign currency forwards, the change in the estimated fair value of the derivative related to the
changes in the difference between the spot price and the forward price is excluded from the assessment of hedge
effectiveness. The Company has elected to record changes in estimated fair value of excluded components in earnings. For all
other derivatives, all components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
Cash Flow Hedges
The Company designates and accounts for the following as cash flow hedges when they have met the requirements of
cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities;
(ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and
liabilities; (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments;
(iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed rate investments; and (v) interest
rate swaps and interest rate forwards to hedge forecasted fixed rate borrowings.
In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no
longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two
months of the anticipated date, the Company reclassified amounts from AOCI into income. These amounts were $30 million,
($1) million and $21 million for the years ended December 31, 2022, 2021 and 2020, respectively.
At December 31, 2022 and 2021, the maximum length of time over which the Company was hedging its exposure to
variability in future cash flows for forecasted transactions did not exceed six years and seven years, respectively.
At December 31, 2022 and 2021, the balance in AOCI associated with cash flow hedges was $2.0 billion and
$2.1 billion, respectively.
All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.
At December 31, 2022, the Company expected to reclassify $156 million of deferred net gains (losses) on derivatives in
AOCI to earnings within the next 12 months.
236
Table of Contents
9. Derivatives (continued)
NIFO Hedges
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company uses foreign currency exchange rate derivatives, which may include foreign currency forwards and
currency options, to hedge portions of its net investments in foreign operations against adverse movements in exchange rates.
The Company also designates a portion of its foreign-denominated debt as a non-derivative hedging instrument of its net
investments in foreign operations. The Company assesses hedge effectiveness of its derivatives based upon the change in
forward rates and assesses its non-derivative hedging instruments based upon the change in spot rates. All components of
each derivative’s gain or loss were included in the assessment of hedge effectiveness.
When net investments in foreign operations are sold or substantially liquidated, the amounts in AOCI are reclassified to
the statement of operations.
At December 31, 2022 and 2021, the cumulative foreign currency translation gain (loss) recorded in AOCI related to
NIFO hedges was $435 million and $303 million, respectively. At December 31, 2022 and 2021, the carrying amount of debt
designated as a non-derivative hedging instrument was $318 million and $365 million, respectively.
See Note 13 for additional information on foreign-denominated debt.
Credit Derivatives
In connection with synthetically created credit investment transactions, the Company writes credit default swaps for
which it receives a premium to insure credit risk. Such credit derivatives are included within the effects of derivatives on the
consolidated statements of operations and comprehensive income (loss) table. If a credit event occurs, as defined by the
contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified
swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company can
terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current
estimated fair value of the credit default swaps.
237
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The following table presents the estimated fair value, maximum amount of future payments and weighted average years
to maturity of written credit default swaps at:
Rating Agency Designation of Referenced
Credit Obligations (1)
2022
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
Estimated
Fair Value
of Credit
Default
Swaps
December 31,
Weighted
Average
Years to
Maturity (2)
Estimated
Fair Value
of Credit
Default
Swaps
(Dollars in millions)
2021
Maximum
Amount of
Future
Payments under
Credit Default
Swaps
Weighted
Average
Years to
Maturity (2)
Aaa/Aa/A
Single name credit default swaps (3)
$
3 $
Credit default swaps referencing indices
Subtotal
Baa
Single name credit default swaps (3)
Credit default swaps referencing indices
Subtotal
Ba
Single name credit default swaps (3)
Credit default swaps referencing indices
Subtotal
B
Credit default swaps referencing indices
Subtotal
Caa
Credit default swaps referencing indices
Subtotal
Total
__________________
79
82
1
28
29
—
2
2
2
2
(10)
(10)
158
4,251
4,409
81
6,775
6,856
62
25
87
130
130
30
30
2.2
3.4
3.4
2.5
5.6
5.5
1.3
4.0
2.1
4.7
4.7
3.5
3.5
4.7
$
4 $
17
21
2
146
148
1
(1)
—
5
5
(9)
(9)
159
1,191
1,350
101
6,988
7,089
82
20
102
55
55
30
30
$
165 $
8,626
3.1
2.5
2.6
3.4
5.0
5.0
1.2
5.0
2.0
4.0
4.0
4.5
4.5
4.6
$
105 $
11,512
(1)
(2)
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s
Investors Service (“Moody’s”), S&P and Fitch Ratings. If no rating is available from a rating agency, then an
internally developed rating is used.
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross
notional amounts.
(3)
Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.
Credit Risk on Freestanding Derivatives
The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to
derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair
value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements
and any collateral received pursuant to such agreements.
238
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties
in jurisdictions in which it understands that close-out netting should be enforceable and establishing and monitoring exposure
limits. The Company’s OTC-bilateral derivative transactions are governed by International Swaps and Derivatives
Association, Inc. (“ISDA”) Master Agreements which provide for legally enforceable set-off and close-out netting of
exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to,
events of default and bankruptcy. In the event of an early termination, close-out netting permits the Company (subject to
financial regulations such as the Orderly Liquidation Authority under Title II of Dodd-Frank) to set off receivables from the
counterparty against payables to the same counterparty arising out of all included transactions and to apply collateral to the
obligations, without application of the automatic stay, upon the counterparty’s bankruptcy. All of the Company’s ISDA
Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral
in connection with its OTC-bilateral derivatives as required by applicable law. Additionally, effective September 1, 2021, the
Company is required to pledge initial margin for certain new OTC-bilateral derivative transactions to third party custodians.
The Company’s OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded
derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis
(both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of
nonperformance by brokers and central clearinghouses to such derivatives.
See Note 10 for a description of the impact of credit risk on the valuation of derivatives.
The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of
master netting agreements and collateral were as follows at:
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement
Assets
Liabilities
Assets
Liabilities
December 31,
2022
2021
Gross estimated fair value of derivatives:
OTC-bilateral (1)
OTC-cleared (1)
Exchange-traded
Total gross estimated fair value of derivatives presented on the consolidated
balance sheets (1)
Gross amounts not offset on the consolidated balance sheets:
Gross estimated fair value of derivatives: (2)
OTC-bilateral
OTC-cleared
Exchange-traded
Cash collateral: (3), (4)
OTC-bilateral
OTC-cleared
Exchange-traded
Securities collateral: (5)
OTC-bilateral
OTC-cleared
Exchange-traded
(In millions)
$ 11,438 $
6,628 $ 10,132 $
3,798
121
18
342
5
448
16
24
7
11,577
6,975
10,596
3,829
(4,579)
(4,579)
(2,204)
(2,204)
(33)
(1)
(33)
(1)
(6)
(2)
(5,432)
—
(6,948)
(35)
—
(295)
(3)
(421)
—
(6)
(2)
—
(13)
(3)
(1,322)
(2,024)
(891)
(1,473)
—
—
(14)
(1)
—
—
(5)
(2)
Net amount after application of master netting agreements and collateral
$
175 $
25 $
124 $
121
__________________
(1)
At December 31, 2022 and 2021, derivative assets included income (expense) accruals reported in accrued investment
income or in other liabilities of $166 million and $130 million, respectively, and derivative liabilities included
(income) expense accruals reported in accrued investment income or in other liabilities of $0 and ($23) million,
respectively.
239
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
(2)
(3)
(4)
(5)
Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense
accruals.
Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized
clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or
in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities
loaned and other transactions on the balance sheet. For certain collateral agreements, cash collateral is pledged to the
Company as initial margin on its OTC-bilateral derivatives.
The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-
traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance
sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives
after application of netting agreements. At December 31, 2022 and 2021, the Company received excess cash collateral
of $252 million and $172 million, respectively, and provided excess cash collateral of $125 million and $126 million,
respectively, which is not included in the table above due to the foregoing limitation.
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance
sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at
December 31, 2022, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company
is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are
permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is
limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At
December 31, 2022 and 2021, the Company received excess securities collateral with an estimated fair value of
$398 million and $160 million, respectively, for its OTC-bilateral derivatives, which are not included in the table
above due to the foregoing limitation. At December 31, 2022 and 2021, the Company provided excess securities
collateral with an estimated fair value of $1.2 billion and $243 million, respectively, for its OTC-bilateral derivatives,
$1.0 billion and $1.2 billion, respectively, for its OTC-cleared derivatives, and $184 million and $185 million,
respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing
limitation.
The Company’s collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net
liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by
that counterparty reaches a minimum transfer amount. Substantially all of the Company’s netting agreements for derivatives
contain provisions that require both the Company and the counterparty to maintain a specific investment grade credit rating
from each of Moody’s and S&P. If a party’s credit or financial strength rating, as applicable, were to fall below that specific
investment grade credit rating, that party would be in violation of these provisions, and the other party to the derivatives
could terminate the transactions and demand immediate settlement and payment based on such party’s reasonable valuation
of the derivatives. A small number of these arrangements also include credit-contingent provisions that include a threshold
above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that
converges toward zero) in the event of downgrades in the credit ratings of MetLife, Inc. and/or the counterparty. At
December 31, 2022, the amount of collateral not provided by the Company due to the existence of these thresholds was
$15 million.
240
Table of Contents
9. Derivatives (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net
liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet
location of the collateral pledged.
December 31,
Derivatives
Subject to
Credit-
Contingent
Provisions
2022
Derivatives
Not Subject
to Credit-
Contingent
Provisions
Total
Derivatives
Subject to
Credit-
Contingent
Provisions
2021
Derivatives
Not Subject
to Credit-
Contingent
Provisions
Total
(In millions)
Estimated fair value of derivatives in a net
liability position (1)
Estimated fair value of collateral provided:
Fixed maturity securities AFS
__________________
$
$
2,049 $
— $
2,049 $
1,386 $
209 $
1,595
2,267 $
— $
2,267 $
1,370 $
221 $
1,591
(1)
After taking into consideration the existence of netting agreements.
Embedded Derivatives
The Company issues certain products or purchases certain investments that contain embedded derivatives that are
required to be separated from their host contracts and accounted for as freestanding derivatives.
The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives
that have been separated from their host contracts at:
Embedded derivatives within asset host contracts:
Ceded guaranteed minimum benefits
Embedded derivatives within liability host contracts:
Direct guaranteed minimum benefits
Assumed guaranteed minimum benefits
Funds withheld on ceded reinsurance
Fixed annuities with equity indexed returns
Other guarantees
Total
Balance Sheet Location
Premiums, reinsurance and other receivables
Policyholder account balances
Policyholder account balances
Other liabilities
Policyholder account balances
Policyholder account balances
$
$
December 31,
2022
2021
(In millions)
29 $
38
467 $
94
(123)
140
—
324
98
57
165
5
649
$
578 $
241
Table of Contents
10. Fair Value
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
When developing estimated fair values, the Company considers three broad valuation approaches: (i) the market
approach, (ii) the income approach, and (iii) the cost approach. The Company determines the most appropriate valuation
approach to use, given what is being measured and the availability of sufficient inputs, giving priority to observable inputs.
The Company categorizes its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the
significant input with the lowest level in its valuation. The input levels are as follows:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets
based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of
market activity for fixed maturity securities AFS.
Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs
can include quoted prices for similar assets or liabilities other than quoted prices in Level 1, quoted prices in
markets that are not active, or other significant inputs that are observable or can be derived principally from or
corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the determination of
estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity’s own assumptions
about the assumptions that market participants would use in pricing the asset or liability.
Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a
reduction in asset liquidity. The Company’s ability to sell securities, as well as the price ultimately realized for these
securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the
estimated fair value of certain securities.
Considerable judgment is often required in interpreting the market data used to develop estimates of fair value, and the
use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.
242
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
10. Fair Value (continued)
Recurring Fair Value Measurements
The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the
fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:
December 31, 2022
Fair Value Hierarchy
Level 1
Level 2
Level 3
(In millions)
Total
Estimated
Fair Value
Assets
Fixed maturity securities AFS:
U.S. corporate
Foreign corporate
Foreign government
U.S. government and agency
RMBS
ABS & CLO
Municipals
CMBS
Total fixed maturity securities AFS
Equity securities
Unit-linked and FVO Securities (1)
Short-term investments (2)
Residential mortgage loans — FVO
Other investments
Derivative assets: (3)
Interest rate
Foreign currency exchange rate
Credit
Equity market
Total derivative assets
Embedded derivatives within asset host contracts (4)
Separate account assets (5)
Total assets (6)
Liabilities
Derivative liabilities: (3)
Interest rate
Foreign currency exchange rate
Credit
Equity market
Total derivative liabilities
Embedded derivatives within liability host contracts (4)
Separate account liabilities (5)
Total liabilities
28,773
276,780
80,030
52,572
46,747
32,229
26,165
16,822
12,152
10,063
1,684
9,668
4,573
—
1,132
4,572
5,888
151
800
11,411
29
146,038
451,315
3,558
2,870
107
440
6,975
578
41
7,594
$
— $
67,578 $
12,452 $
—
—
15,955
4
—
—
—
15,959
1,293
7,101
3,830
—
—
2
8
—
8
18
—
65,107
40,623
46,644
16,274
24,515
14,895
12,152
9,367
232,048
132
1,780
686
—
206
4,570
5,670
69
785
11,094
—
79,703
11,949
103
—
1,646
1,927
—
696
259
787
57
—
926
—
210
82
7
299
29
1,228
$
$
93,308 $
325,649 $
32,358 $
1 $
3,153 $
404 $
—
—
4
5
—
8
2,820
92
436
6,501
—
15
50
15
—
469
578
18
$
13 $
6,516 $
1,065 $
243
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Assets
Fixed maturity securities AFS:
U.S. corporate
Foreign corporate
Foreign government
U.S. government and agency
RMBS
ABS & CLO
Municipals
CMBS
Total fixed maturity securities AFS
Equity securities
Unit-linked and FVO Securities (1)
Short-term investments (2)
Residential mortgage loans — FVO
Other investments
Derivative assets: (3)
Interest rate
Foreign currency exchange rate
Credit
Equity market
Total derivative assets
Embedded derivatives within asset host contracts (4)
Separate account assets (5)
Total assets (6)
Liabilities
Derivative liabilities: (3)
Interest rate
Foreign currency exchange rate
Credit
Equity market
Total derivative liabilities
Embedded derivatives within liability host contracts (4)
Separate account liabilities (5)
Total liabilities
__________________
December 31, 2021 (7)
Fair Value Hierarchy
Level 1
Level 2
Level 3
(In millions)
Total
Estimated
Fair Value
$
— $
81,266 $
11,768 $
—
—
25,482
7
—
—
—
25,489
931
9,173
5,607
—
—
4
—
—
12
16
—
49,973
61,518
21,117
27,270
16,707
14,212
11,325
283,388
187
2,068
950
—
61
6,577
2,551
173
1,025
10,326
—
76,312
101,424
13,667
91
—
3,127
1,862
—
882
31,397
151
901
3
127
898
97
3
17
7
124
38
2,137
$
117,528 $
398,404 $
35,776 $
$
— $
259 $
22 $
2
—
5
7
—
7
2,676
113
521
3,569
—
12
242
12
—
276
649
6
93,034
63,640
61,609
46,599
30,404
18,569
14,212
12,207
340,274
1,269
12,142
6,560
127
959
6,678
2,554
190
1,044
10,466
38
179,873
551,708
281
2,920
125
526
3,852
649
25
$
14 $
3,581 $
931 $
4,526
(1)
(2)
(3)
Unit-linked and FVO Securities were primarily comprised of Unit-linked investments at both December 31, 2022 and
2021.
Short-term investments as presented in the tables above differ from the amounts presented on the consolidated balance
sheets because certain short-term investments are not measured at estimated fair value on a recurring basis.
Derivative assets are presented within other invested assets on the consolidated balance sheets and derivative liabilities
are presented within other liabilities on the consolidated balance sheets. The amounts are presented gross in the tables
above to reflect the presentation on the consolidated balance sheets, but are presented net for purposes of the
rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.
244
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
(4)
(5)
(6)
(7)
Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables on
the consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder
account balances and other liabilities on the consolidated balance sheets.
Investment performance related to separate account assets is fully offset by corresponding amounts credited to
contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal
to the estimated fair value of separate account assets. Separate account liabilities presented in the tables above
represent derivative liabilities.
Total assets included in the fair value hierarchy exclude other limited partnership interests that are measured at
estimated fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient. At
December 31, 2022 and 2021, the estimated fair value of such investments was $65 million and $99 million,
respectively.
Excludes amounts reclassified to assets held-for-sale or liabilities held-for-sale. Assets held-for-sale and liabilities
held-for-sale are valued on a basis consistent with similar assets and liabilities described herein. See Note 3 for
information on the Company’s business dispositions.
The following describes the valuation methodologies used to measure assets and liabilities at fair value.
Investments
Securities, Short-term Investments and Other Investments
When available, the estimated fair value of these financial instruments is based on quoted prices in active markets
that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and
valuation of these securities does not involve management’s judgment.
When quoted prices in active markets are not available, the determination of estimated fair value of securities is
based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the
market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are
inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data.
When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant
to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated
by, observable market data. These unobservable inputs can be based in large part on management’s judgment or
estimation and cannot be supported by reference to market activity. Unobservable inputs are based on management’s
assumptions about the inputs market participants would use in pricing such investments.
The estimated fair value of short-term investments and other investments is determined on a basis consistent with
the methodologies described herein.
The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2
and Level 3 of the fair value hierarchy are presented below. The primary valuation approaches are the market approach,
which considers recent prices from market transactions involving identical or similar assets or liabilities, and the income
approach, which converts expected future amounts (e.g. cash flows) to a single current, discounted amount. The
valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted
cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs.
245
Table of Contents
10. Fair Value (continued)
Instrument
Fixed maturity securities AFS
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Level 2
Observable Inputs
Level 3
Unobservable Inputs
U.S. corporate and Foreign corporate securities
Valuation Approaches: Principally the market and income approaches.
Valuation Approaches: Principally the market approach.
Key Inputs:
• quoted prices in markets that are not active
Key Inputs:
• illiquidity premium
• benchmark yields; spreads off benchmark yields; new issuances; issuer ratings • delta spread adjustments to reflect specific credit-related issues
• trades of identical or comparable securities; duration
• credit spreads
• privately-placed securities are valued using the additional key inputs:
• market yield curve; call provisions
• quoted prices in markets that are not active for identical or similar securities
that are less liquid and based on lower levels of trading activity than
securities classified in Level 2
• observable prices and spreads for similar public or private securities that
• independent non-binding broker quotations
incorporate the credit quality and industry sector of the issuer
• delta spread adjustments to reflect specific credit-related issues
Foreign government securities, U.S. government and agency securities and Municipals
Valuation Approaches: Principally the market approach.
Valuation Approaches: Principally the market approach.
Key Inputs:
• quoted prices in markets that are not active
• benchmark U.S. Treasury yield or other yields
• the spread off the U.S. Treasury yield curve for the identical security
Key Inputs:
• independent non-binding broker quotations
• quoted prices in markets that are not active for identical or similar securities
that are less liquid and based on lower levels of trading activity than
securities classified in Level 2
• issuer ratings and issuer spreads; broker-dealer quotations
• credit spreads
• comparable securities that are actively traded
Structured Products
Valuation Approaches: Principally the market and income approaches.
Valuation Approaches: Principally the market and income approaches.
Key Inputs:
• quoted prices in markets that are not active
• spreads for actively traded securities; spreads off benchmark yields
• expected prepayment speeds and volumes
Key Inputs:
• credit spreads
• quoted prices in markets that are not active for identical or similar securities
that are less liquid and based on lower levels of trading activity than
securities classified in Level 2
• current and forecasted loss severity; ratings; geographic region
• independent non-binding broker quotations
• weighted average coupon and weighted average maturity
• credit ratings
• average delinquency rates; DSCR
• credit ratings
• issuance-specific information, including, but not limited to:
• collateral type; structure of the security; vintage of the loans
• payment terms of the underlying assets
• payment priority within the tranche; deal performance
246
Table of Contents
10. Fair Value (continued)
Instrument
Equity securities
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Level 2
Observable Inputs
Level 3
Unobservable Inputs
Valuation Approaches: Principally the market approach.
Valuation Approaches: Principally the market and income approaches.
Key Input:
Key Inputs:
• quoted prices in markets that are not considered active
• credit ratings; issuance structures
• quoted prices in markets that are not active for identical or similar securities
that are less liquid and based on lower levels of trading activity than
securities classified in Level 2
• independent non-binding broker quotations
Unit-linked and FVO Securities, Short-term investments and Other investments
Valuation Approaches: Principally the market and income approaches.
Valuation Approaches: Principally the market and income approaches.
Key Inputs:
Key Inputs:
• Unit-linked and FVO Securities include mutual fund interests without readily
determinable fair values given prices are not published publicly. Valuation
of these mutual funds is based upon quoted prices or reported NAV
provided by the fund managers, which were based on observable inputs.
• Unit-linked and FVO Securities, short-term investments and other
investments are of a similar nature and class to the fixed maturity
securities AFS and equity securities described above; accordingly, the
valuation approaches and unobservable inputs used in their valuation are
also similar to those described above. Other investments also include
certain real estate joint ventures and use the valuation approach and key
inputs as described for other limited partnership interests below.
• Short-term investments and other investments are of a similar nature and class
to the fixed maturity securities AFS and equity securities described above;
accordingly, the valuation approaches and observable inputs used in their
valuation are also similar to those described above.
Residential mortgage loans — FVO
• N/A
Valuation Approaches: Principally the market approach.
Valuation Techniques and Key Inputs: These investments are based primarily
on matrix pricing or other similar techniques that utilize inputs from
mortgage servicers that are unobservable or cannot be derived
principally from, or corroborated by, observable market data.
Separate account assets and Separate account liabilities (1)
Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly
Key Input:
• N/A
• quoted prices or reported NAV provided by the fund managers
Other limited partnership interests
• N/A
__________________
Valued giving consideration to the underlying holdings of the partnerships
and adjusting, if appropriate.
Key Inputs:
• liquidity; bid/ask spreads; performance record of the fund manager
• other relevant variables that may impact the exit value of the particular
partnership interest
(1)
Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund
interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-
term investments and cash and cash equivalents. The estimated fair value of fixed maturity securities, equity securities,
derivatives, short-term investments and cash and cash equivalents is determined on a basis consistent with the assets
described under “— Securities, Short-term Investments and Other Investments” and “— Derivatives — Freestanding
Derivatives.”
247
Table of Contents
10. Fair Value (continued)
Derivatives
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded
derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of
estimated fair value, 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 such
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.
The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are
observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-
bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not
observable in the market or cannot be derived principally from, or corroborated by, observable market data. These
unobservable inputs may involve significant management judgment or estimation. Unobservable inputs are based on
management’s assumptions about the inputs market participants would use in pricing such derivatives.
Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity
adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of
different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s
derivatives and could materially affect net income.
The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all
OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by
counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values
its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate,
depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at
pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties
generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not
currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is, in part,
due to the netting agreements and collateral arrangements that are in place with all of its significant derivative
counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company
each reporting period.
Freestanding Derivatives
Level 2 Valuation Approaches and Key Inputs:
This level includes all types of derivatives utilized by the Company with the exception of exchange-traded
derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3.
Level 3 Valuation Approaches and Key Inputs:
These valuation methodologies generally use the same inputs as described in the corresponding sections for
Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more
of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by,
observable market data.
248
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based
derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing
models. Key inputs are as follows:
Instrument
Inputs common to Level 2 and
Level 3 by instrument type
Interest Rate
Foreign Currency
Exchange Rate
Credit
Equity Market
• swap yield curves
• swap yield curves
• swap yield curves
• swap yield curves
• basis curves
• basis curves
• credit curves
• spot equity index levels
•
interest rate volatility (1)
• currency spot rates
•
recovery rates
• dividend yield curves
Level 3
• swap yield curves (2)
• cross currency basis
curves
• currency volatility (1)
• swap yield curves (2)
• equity volatility (1)
• swap yield curves (2)
• dividend yield curves (2)
• basis curves (2)
• basis curves (2)
• credit curves (2)
• equity volatility (1), (2)
•
•
repurchase rates
interest rate volatility (1),
(2)
• cross currency basis
curves (2)
• currency correlation
• currency volatility (1)
• credit spreads
• correlation between
model inputs (1)
•
•
repurchase rates
independent non-binding
broker quotations
__________________
(1)
(2)
Option-based only.
Extrapolation beyond the observable limits of the curve(s).
Embedded Derivatives
Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, equity-
indexed annuity contracts, and investment risk within funds withheld related to certain reinsurance agreements. Embedded
derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income.
The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and
certain GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable
annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives
are classified within policyholder account balances on the consolidated balance sheets.
The Company calculates the fair value of these embedded derivatives, which is estimated as the present value of
projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions
including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future
cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates.
Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly
traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable
period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including
mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies
of historical experience.
The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk
margin related to non-capital market inputs. The nonperformance adjustment 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 as compared to MetLife, Inc.
249
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
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 of such actuarial
assumptions as annuitization, premium persistency, partial withdrawal and surrenders. 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. These guarantees 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 nonperformance risk; and 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.
The Company ceded the risk associated with certain of the GMIBs previously described. These reinsurance
agreements contain embedded derivatives which are included within premiums, reinsurance and other receivables on the
consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses) or policyholder
benefits and claims depending on the statement of operations classification of the direct risk. 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 the Company with the exception of the input for nonperformance risk that reflects the credit
of the reinsurer.
The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is
determined based on the change in estimated fair value of the underlying assets held by the Company in a reference
portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described
in “— Investments — Securities, Short-term Investments and Other Investments.” The estimated fair value of these
embedded derivatives is included, along with their funds withheld hosts, in other liabilities on the consolidated balance
sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the
underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of
these embedded derivatives that could materially affect net income.
The Company issues certain annuity contracts which allow the policyholder to participate in returns from equity
indices. These equity indexed features are embedded derivatives which are measured at estimated fair value separately
from the host fixed annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These
embedded derivatives are classified within policyholder account balances on the consolidated balance sheets.
The estimated fair value of the embedded equity indexed derivatives, based on the present value of future equity
returns to the policyholder using actuarial and present value assumptions including expectations concerning policyholder
behavior, is calculated by the Company’s actuarial department. The calculation is based on in-force business and uses
standard capital market techniques, such as Black-Scholes, to calculate the value of the portion of the embedded derivative
for which the terms are set. The portion of the embedded derivative covering the period beyond where terms are set is
calculated as the present value of amounts expected to be spent to provide equity indexed returns in those periods. The
valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in
nonperformance risk.
Embedded Derivatives Within Asset and Liability Host Contracts
Level 3 Valuation Approaches and Key Inputs:
Direct and assumed guaranteed minimum benefits
These embedded derivatives are principally valued using the income approach. Valuations are based on option
pricing techniques, which utilize significant inputs that may include swap yield curves, currency exchange rates and
implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the
significant inputs are not observable in the market or cannot be derived principally from, or corroborated by,
observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable
limits of the swap yield curves and implied volatilities, actuarial assumptions for policyholder behavior and
mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of
capital for purposes of calculating the risk margin.
250
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Reinsurance ceded on certain guaranteed minimum benefits
These embedded derivatives are principally valued using the income approach. The valuation techniques and
significant market standard unobservable inputs used in their valuation are similar to those described above in
“— Direct and assumed guaranteed minimum benefits” and also include counterparty credit spreads.
Transfers between Levels
Overall, transfers between levels occur when there are changes in the observability of inputs and market activity.
Transfers into or out of Level 3:
Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market
observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed,
current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting
transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input
can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific
event, or one or more significant input(s) becoming observable.
Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)
The following table presents certain quantitative information about the significant unobservable inputs used in the fair
value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset
and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:
Valuation Techniques
Significant
Unobservable Inputs
Range
Weighted
Average (1)
Range
Weighted
Average (1)
December 31, 2022
December 31, 2021
Fixed maturity securities AFS (3)
U.S. corporate and foreign
• Matrix pricing
• Offered quotes (4)
— -
126
corporate
RMBS
ABS & CLO
Derivatives
Interest rate
Foreign currency exchange rate
Credit
Embedded derivatives
Direct, assumed and ceded
guaranteed minimum
benefits
• Market pricing
• Quoted prices (4)
• Consensus pricing
• Offered quotes (4)
• Market pricing
• Quoted prices (4)
• Market pricing
• Quoted prices (4)
• Present value
techniques
• Present value
techniques
• Present value
techniques
• Swap yield (6)
• Volatility (8)
• Swap yield (6)
• Credit spreads (9)
• Consensus pricing
• Offered quotes (10)
• Option pricing
techniques
• Mortality rates:
20
5
-
-
— -
3
372
-
-
109
99
106
102
392
—% - —%
74
84
-
-
1,938
138
Ages 0 - 40
Ages 41 - 60
Ages 61 - 115
• Lapse rates:
0%
- 0.17%
0.03% - 0.75%
0.12% -
100%
Durations 1 - 10
0.40% - 37.50%
Durations 11 - 20
0.50% - 35.75%
Durations 21 - 116
0.50% - 35.75%
Impact of
Increase in Input
on Estimated
Fair Value (2)
Increase
Increase
Increase
Increase (5)
Increase (5)
Increase (7)
Increase (7)
Increase (7)
Decrease (7)
1
—
99
—
3
151
1%
2
96
-
-
-
-
-
-
-
-
-
165
117
104
121
110
200
1%
305
133
109
100
100
99
102
188
1%
134
109
0%
-
0.17%
0.03% -
0.75%
0.12% -
100%
0.25% -
100%
0.50% -
100%
0.50% -
100%
0%
0%
-
-
22%
20%
25%
0.08%
0.27%
2.08%
6.30%
5.22%
5.22%
0.22%
3.72%
Decrease (11)
Decrease (11)
Decrease (11)
Decrease (12)
Decrease (12)
Decrease (12)
Increase (13)
(14)
18.60%
Increase (15)
87
90
93
93
91
381
—%
208
101
0.05%
0.20%
1.44%
8.96%
6.52%
2.89%
0.38%
4.02%
• Utilization rates
• Withdrawal rates
• Long-term equity
volatilities
0.20% -
22%
0%
-
20%
8.26% -
25%
18.49%
7.69% -
__________________
• Nonperformance risk
0.09% - 1.77%
0.75%
0.04% -
1.45%
0.35%
Decrease (16)
spread
251
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
The weighted average for fixed maturity securities AFS and derivatives is determined based on the estimated fair value
of the securities and derivatives. The weighted average for embedded derivatives is determined based on a
combination of account values and experience data.
The impact of a decrease in input would have resulted in the opposite impact on estimated fair value. For embedded
derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to
ceded guaranteed minimum benefits are based on asset positions.
Significant increases (decreases) in expected default rates in isolation would have resulted in substantially lower
(higher) valuations.
Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS
of dollars per hundred dollars of par.
Changes in the assumptions used for the probability of default would have been accompanied by a directionally similar
change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for
prepayment rates.
Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are
utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present
value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a
range is more representative of the unobservable input used in the valuation.
Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for
short U.S. dollar net asset positions.
Ranges represent the underlying interest rate volatility quoted in percentage points. Since this valuation methodology
uses an equivalent of LIBOR for secured overnight financing rate volatility, presenting a range is more representative
of the unobservable input used in the valuation.
Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives
with significant unobservable inputs are primarily comprised of written credit default swaps.
(10) At both December 31, 2022 and 2021, independent non-binding broker quotations were used in the determination of
1% or less of the total net derivative estimated fair value.
(11) Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based
on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates
vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
(12) Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values
and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges.
A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as
in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a
surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are
projected for purposes of valuing the embedded derivative.
(13) The utilization rate assumption estimates the percentage of contractholders with GMIBs or a lifetime withdrawal
benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the
amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the
age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are
projected for purposes of valuing the embedded derivative.
(14) The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw
from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by
other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash
flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in
withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and
GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value.
252
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
(15) Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are
available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows
are projected for purposes of valuing the embedded derivative.
(16) Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk
spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded
derivative.
All other classes of securities classified within Level 3, including those within Unit-linked and FVO Securities, Other
investments, separate account assets, and embedded derivatives within funds withheld related to certain ceded reinsurance,
use the same valuation techniques and significant unobservable inputs as previously described for Level 3 securities.
Generally, all other classes of assets and liabilities classified within Level 3 that are not included above use the same
valuation techniques and significant unobservable inputs as previously described for Level 3. The sensitivity of the
estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in
nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair
value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined
using significant unobservable inputs (Level 3) are summarized in “— Nonrecurring Fair Value Measurements.”
253
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The following tables summarize the change of all assets (liabilities) measured at estimated fair value on a recurring
basis using significant unobservable inputs (Level 3):
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Fixed Maturity Securities AFS
Corporate (6)
Foreign
Government
Structured
Products
(In millions)
Equity
Securities
Unit-linked
and FVO
Securities
Balance, January 1, 2021
$
24,101 $
117 $
5,289 $
150 $
701
Total realized/unrealized gains (losses) included in net
income (loss) (1), (2)
Total realized/unrealized gains (losses) included in AOCI
Purchases (3)
Sales (3)
Issuances (3)
Settlements (3)
Transfers into Level 3 (4)
Transfers out of Level 3 (4)
Balance, December 31, 2021
Total realized/unrealized gains (losses) included in net
income (loss) (1), (2)
Total realized/unrealized gains (losses) included in AOCI
Purchases (3)
Sales (3)
Issuances (3)
Settlements (3)
Transfers into Level 3 (4)
Transfers out of Level 3 (4)
Balance, December 31, 2022
Changes in unrealized gains (losses) included in net income (loss) for
the instruments still held at December 31, 2020 (5)
Changes in unrealized gains (losses) included in net income (loss) for
the instruments still held at December 31, 2021 (5)
Changes in unrealized gains (losses) included in net income (loss) for
the instruments still held at December 31, 2022 (5)
Changes in unrealized gains (losses) included in AOCI for the
instruments still held at December 31, 2020 (5)
Changes in unrealized gains (losses) included in AOCI for the
instruments still held at December 31, 2021 (5)
Changes in unrealized gains (losses) included in AOCI for the
instruments still held at December 31, 2022 (5)
Gains (Losses) Data for the year ended December 31, 2020:
Total realized/unrealized gains (losses) included in net
income (loss) (1), (2)
Total realized/unrealized gains (losses) included in AOCI
(34)
(1,334)
4,988
(1,543)
—
—
179
(922)
25,435
(7)
(6,221)
5,273
(1,762)
—
—
2,127
(444)
—
(2)
1
(8)
—
—
12
(29)
91
(38)
(13)
36
(9)
—
—
46
(10)
46
(26)
1,824
(1,326)
—
—
358
(294)
5,871
29
(478)
967
(984)
—
—
251
(1,387)
27
—
12
(35)
—
—
—
(3)
151
16
—
108
(14)
—
—
—
(2)
24,401 $
103 $
4,269 $
259 $
(48) $
(1) $
54 $
2 $
(5) $
— $
42 $
13 $
101
—
42
(18)
—
—
86
(11)
901
(133)
—
28
(24)
—
—
23
(8)
787
69
101
(3) $
(38) $
27 $
11 $
(131)
1,754 $
(1) $
47 $
— $
(1,293) $
(2) $
(24) $
— $
(6,136) $
(13) $
(450) $
— $
(88) $
1,774 $
(2) $
(1) $
49 $
41 $
12 $
— $
—
—
—
67
—
$
$
$
$
$
$
$
$
$
254
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Balance, January 1, 2021
$
43 $
165 $
573 $
594 $
(1,141) $
1,079
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Short-term
Investments
Residential
Mortgage
Loans - FVO
Other
Investments
Net
Derivatives (7)
Net Embedded
Derivatives (8)
Separate
Accounts (9)
(In millions)
Total realized/unrealized gains (losses) included in
net income (loss) (1), (2)
Total realized/unrealized gains (losses) included in
AOCI
Purchases (3)
Sales (3)
Issuances (3)
Settlements (3)
Transfers into Level 3 (4)
Transfers out of Level 3 (4)
Balance, December 31, 2021
Total realized/unrealized gains (losses) included in
net income (loss) (1), (2)
Total realized/unrealized gains (losses) included in
AOCI
Purchases (3)
Sales (3)
Issuances (3)
Settlements (3)
Transfers into Level 3 (4)
Transfers out of Level 3 (4)
Balance, December 31, 2022
Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2020 (5)
Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2021 (5)
Changes in unrealized gains (losses) included in net
income (loss) for the instruments still held at
December 31, 2022 (5)
Changes in unrealized gains (losses) included in
AOCI for the instruments still held at
December 31, 2020 (5)
Changes in unrealized gains (losses) included in
AOCI for the instruments still held at
December 31, 2021 (5)
Changes in unrealized gains (losses) included in
AOCI for the instruments still held at
December 31, 2022 (5)
Gains (Losses) Data for the year ended
December 31, 2020:
Total realized/unrealized gains (losses) included in
net income (loss) (1), (2)
Total realized/unrealized gains (losses) included in
AOCI
__________________
$
$
$
$
$
$
$
$
$
1
(3)
2
(37)
—
—
—
(3)
3
—
—
56
(2)
—
—
—
—
(5)
—
—
(11)
—
(22)
—
—
127
(8)
—
—
(108)
—
(11)
—
—
94
—
348
(92)
—
—
—
(25)
898
57
—
246
(177)
—
—
—
(98)
(460)
(334)
30
—
(13)
32
1
(2)
(152)
238
(537)
82
—
(3)
201
—
1
747
27
—
—
—
(244)
—
—
29
—
1,056
(44)
(2)
6
10
(3)
(611)
2,131
172
22
—
—
—
(132)
—
—
57 $
— $
926 $
(170) $
(549) $
(7) $
3 $
24 $
67 $
(124) $
— $
(10) $
89 $
(361) $
746 $
— $
— $
56 $
325 $
171 $
4 $
— $
— $
579 $
(33) $
— $
— $
— $
(128) $
27 $
— $
— $
— $
(459) $
22 $
(7) $
9 $
19 $
279 $
(110) $
4 $
— $
— $
761 $
(34) $
61
—
202
(1,164)
(2)
4
1
(23)
1,210
—
—
—
—
—
—
(5)
—
(1)
Amortization of premium/accretion of discount is included within net investment income. Impairments and changes in
ACL charged to net income (loss) on certain securities are included in net investment gains (losses), while changes in
estimated fair value of Unit-linked and FVO Securities and residential mortgage loans — FVO are included in net
investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses).
Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded
derivatives are reported in net derivative gains (losses).
255
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the
rollforward.
Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to
embedded derivatives are included in settlements.
Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.
Changes in unrealized gains (losses) included in net income (loss) and included in AOCI relate to assets and liabilities
still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net
income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).
Comprised of U.S. and foreign corporate securities.
Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
Investment performance related to separate account assets is fully offset by corresponding amounts credited to
contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in
net income (loss). For the purpose of this disclosure, these changes are presented within net income (loss). Separate
account assets and liabilities are presented net for the purposes of the rollforward.
Fair Value Option
The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. The
following table presents information for residential mortgage loans which are accounted for under the FVO and were
initially measured at fair value.
Unpaid principal balance
Difference between estimated fair value and unpaid principal balance
Carrying value at estimated fair value
Loans in nonaccrual status
Loans more than 90 days past due
Loans in nonaccrual status or more than 90 days past due, or both — difference between
aggregate estimated fair value and unpaid principal balance
$
$
$
$
$
Nonrecurring Fair Value Measurements
December 31,
2022
2021
(In millions)
— $
—
— $
— $
— $
— $
130
(3)
127
32
14
(7)
The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the
periods and still held at the reporting dates (for example, when there is evidence of impairment), using significant
unobservable inputs (Level 3).
Carrying value after measurement
Mortgage loans (1)
Other assets (2)
2022
2021
December 31,
(in millions)
263 $
1 $
328
82
$
$
256
Table of Contents
10. Fair Value (continued)
Realized gains (losses) net:
Mortgage loans (1)
Other assets (2)
__________________
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Years Ended December 31,
2022
2021
(in millions)
2020
$
$
(13) $
(14) $
(116) $
(74) $
(127)
—
(1)
(2)
Estimated fair values for impaired mortgage loans are based on estimated fair value of the underlying collateral.
The Company recognized impairments related to the abandonment of certain leased office space and the related
leasehold improvements.
Fair Value of Financial Instruments Carried at Other Than Fair Value
The following tables provide fair value information for financial instruments that are carried on the balance sheet at
amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued
investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-
term investments that are not securities, such as time deposits, and therefore are not included in the three-level hierarchy table
disclosed in the “— Recurring Fair Value Measurements” section. The Company believes that due to the short-term nature of
these excluded assets, which are primarily classified in Level 2, the estimated fair value approximates carrying value. All
remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this
disclosure.
The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the
fair value hierarchy, are summarized as follows at:
December 31, 2022
Fair Value Hierarchy
Carrying
Value
Level 1
Level 2
Level 3
(In millions)
Total
Estimated
Fair Value
78,694 $
78,694
— $
— $
729 $
9,682 $
217 $
1,042 $
1,921 $
90 $
175 $
9,682
946
2,963
265
— $
118,694 $
118,694
14,241 $
— $
14,241
— $
3,502 $
1,377 $
591 $
— $
1,793 $
591
3,502
3,170
81,976 $
— $
81,976
Assets
Mortgage loans (1)
Policy loans
Other invested assets
Premiums, reinsurance and other receivables
Other assets
Liabilities
Policyholder account balances
Long-term debt
Collateral financing arrangement
Junior subordinated debt securities
Other liabilities
Separate account liabilities
$
$
$
$
$
$
$
$
$
$
$
83,763 $
8,874 $
946 $
2,905 $
267 $
125,039 $
14,591 $
716 $
3,158 $
2,908 $
81,976 $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
257
Table of Contents
10. Fair Value (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Assets
Mortgage loans (1)
Policy loans
Other invested assets
Premiums, reinsurance and other receivables
Other assets
Liabilities
Policyholder account balances
Long-term debt
Collateral financing arrangement
Junior subordinated debt securities
Other liabilities
Separate account liabilities
_________________
Carrying
Value
$
$
$
$
$
$
$
$
$
$
$
79,226 $
9,111 $
1,025 $
2,262 $
290 $
123,865 $
13,852 $
766 $
3,156 $
2,143 $
95,619 $
December 31, 2021 (2)
Fair Value Hierarchy
Level 1
Level 2
Level 3
(In millions)
Total
Estimated
Fair Value
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
769 $
492 $
101 $
82,788 $
10,751 $
256 $
1,962 $
190 $
82,788
10,751
1,025
2,454
291
— $
127,728 $
127,728
— $
16,621
16,621 $
— $
4,447 $
630 $
— $
630
4,447
2,835
514 $
2,321 $
95,619 $
— $
95,619
(1)
(2)
Includes mortgage loans measured at estimated fair value on a nonrecurring basis and excludes mortgage loans
measured at estimated fair value on a recurring basis.
Excludes amounts reclassified to assets held-for-sale or liabilities held-for-sale. See Note 3 for information on the
Company’s business dispositions.
11. Leases
The Company, as lessee, has entered into various lease and sublease agreements primarily for office space. The
Company has operating leases with remaining lease terms of less than one year to 12 years. The remaining lease terms for the
subleases are less than one year to eight years.
ROU Assets and Lease Liabilities
ROU assets and lease liabilities for operating leases were:
ROU assets
Lease liabilities
Lease Costs
The components of operating lease costs were as follows:
December 31, 2022
December 31, 2021
$
$
(In millions)
961 $
1,147 $
1,110
1,295
Operating lease cost
Variable lease cost
Sublease income
Net lease cost
2022
Years Ended December 31,
2021
(In millions)
2020
$
$
$
$
246 $
45 $
(103) $
188 $
271 $
32 $
(99) $
204 $
286
39
(99)
226
The Company recognized lease ROU asset impairment charges of $10 million, $29 million, and $0 for the years ended
December 31, 2022, 2021 and 2020, respectively.
258
Table of Contents
11. Leases (continued)
Other Information
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Supplemental other information related to operating leases was as follows:
Cash paid for amounts included in the measurement of lease liability -
operating cash flows
ROU assets obtained in exchange for new lease liabilities
$
$
Weighted-average remaining lease term
Weighted-average discount rate
Maturities of Lease Liabilities
Maturities of operating lease liabilities were as follows:
December 31, 2022
December 31, 2021
(Dollars in millions)
249
58
$
$
6 years
3.5 %
273
63
7 years
3.4 %
2023
2024
2025
2026
2027
Thereafter
Total undiscounted cash flows
Less: interest
Present value of lease liability
December 31, 2022
(In millions)
245
216
198
183
149
252
1,243
96
1,147
$
$
See Notes 8 and 13 for information about the Company’s investments in leased real estate, leveraged and direct financing
leases, and financing lease obligations.
259
Table of Contents
12. Goodwill
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Information regarding goodwill by segment, as well as Corporate & Other, was as follows:
Balance at January 1, 2020
Goodwill
Accumulated impairment
Total goodwill, net
Acquisitions (2)
Effect of foreign currency translation and other
Reclassified to assets held-for-sale (3)
Balance at December 31, 2020
Goodwill
Accumulated impairment
Total goodwill, net
Effect of foreign currency translation and other
Balance at December 31, 2021
Goodwill
Accumulated impairment
Total goodwill, net
Acquisitions
Effect of foreign currency translation and other
Balance at December 31, 2022
Goodwill
Accumulated impairment
Total goodwill, net
__________________
U.S.
Asia (1)
Latin
America
EMEA
(In millions)
MetLife
Holdings
Corporate
& Other
Total
$
1,466 $
4,636
$
1,099
$
1,117
$
1,567
$
103
$
9,988
—
1,466
932
—
(328)
2,070
—
2,070
—
2,070
—
2,070
—
—
2,070
—
—
4,636
—
127
—
4,763
—
4,763
(211)
4,552
—
4,552
—
(243)
4,309
—
—
1,099
—
44
—
1,143
—
1,143
(166)
977
—
977
—
3
980
—
—
1,117
—
29
—
1,146
—
1,146
(200)
946
—
946
—
(38)
908
—
(680)
887
—
—
—
1,567
(680)
887
—
1,567
(680)
887
—
—
1,567
(680)
—
103
—
—
—
103
—
103
—
103
—
103
40
—
143
—
(680)
9,308
932
200
(328)
10,792
(680)
10,112
(577)
10,215
(680)
9,535
40
(278)
9,977
(680)
$
2,070 $
4,309
$
980
$
908
$
887
$
143
$
9,297
(1)
(2)
(3)
Includes goodwill of $4.2 billion, $4.4 billion and $4.6 billion from the Company’s Japan operations at
December 31, 2022, 2021 and 2020, respectively.
Primarily related to the acquisition of Versant Health. See Note 3.
See Note 3 for information on the disposition of MetLife P&C.
260
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
13. Long-term and Short-term Debt
Long-term and short-term debt outstanding was as follows:
Interest Rates (1)
Range
Weighted
Average
Maturity
Face
Value
2022
Unamortized
Discount and
Issuance
Costs
December 31,
Carrying
Value
Face
Value
(In millions)
2021
Unamortized
Discount and
Issuance
Costs
Carrying
Value
0.50 % - 6.50%
7.63 % - 7.88%
0.45 % - 7.50%
4.42%
7.79%
4.67%
2023 - 2052
$ 13,671 $
(83) $
13,588 $ 12,891 $
(77) $
12,814
2024 - 2025
2023 - 2027
507
500
56
14,734
175
(1)
(3)
—
(87)
—
506
497
56
507
536
81
14,647
14,015
175
341
(2)
(3)
—
(82)
—
505
533
81
13,933
341
$ 14,909 $
(87) $
14,822 $ 14,356 $
(82) $
14,274
Senior notes
Surplus notes
Other notes
Financing lease obligations
Total long-term debt
Total short-term debt
Total
__________________
(1)
Range of interest rates and weighted average interest rates are for the year ended December 31, 2022.
The aggregate maturities of long-term debt at December 31, 2022 for the next five years and thereafter are $1.1 billion in
2023, $1.7 billion in 2024, $1.2 billion in 2025, $539 million in 2026, $51 million in 2027 and $10.0 billion thereafter.
Financing lease obligations are collateralized and rank highest in priority, followed by unsecured senior notes and other
notes, followed by subordinated debt which consists of junior subordinated debt securities (see Note 15). Payments of interest
and principal on the Company’s surplus notes, which are subordinate to all other obligations of the operating company
issuing the notes and are senior to obligations of MetLife, Inc., may be made only with the prior approval of the insurance
department of the state of domicile of the notes issuer. The Company’s collateral financing arrangement (see Note 14) is
supported by surplus notes of a subsidiary and, accordingly, has priority consistent with surplus notes.
Certain of the Company’s debt instruments and committed facilities, as well as its $3.0 billion unsecured revolving credit
facility (the “Credit Facility”), contain various administrative, reporting, legal and financial covenants. The Company
believes it was in compliance with all applicable financial covenants at December 31, 2022.
Senior Notes
In July 2022, MetLife, Inc. issued $1.0 billion of senior notes due July 2052 which bear interest at a fixed rate of 5.00%,
payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $11 million of related costs which will be
amortized over the term of the senior notes.
In July 2021, MetLife, Inc. redeemed for cash and canceled $500 million aggregate principal amount of its outstanding
3.048% senior notes due December 2022. The Company recorded a premium of $17 million paid in excess of the debt
principal and accrued and unpaid interest to other expenses for the year ended December 31, 2021.
In March 2020, MetLife, Inc. issued $1.0 billion of senior notes due March 2030 which bear interest at a fixed rate of
4.550%, the interest on which is payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $6 million of
related costs which will be amortized over the term of the senior notes.
See Note 22 for information on MetLife, Inc.’s senior notes issuance and senior notes redemption subsequent to
December 31, 2022.
Other Notes
At December 31, 2022, MetLife Private Equity Holdings, LLC (“MPEH”), a wholly-owned indirect investment
subsidiary of MLIC, was party to a credit agreement providing for $350 million of term loans and $75 million of a revolving
loan (the “Credit Agreement”), which matures in September 2026. In March 2020, MPEH borrowed $75 million on a
revolving loan under the Credit Agreement and repaid this loan in July 2020. Simultaneously, in July 2020, MPEH borrowed
$50 million on the term loan under the Credit Agreement. MPEH has pledged invested assets to secure the loans; however,
these loans are non-recourse to MLIC and MetLife, Inc.
261
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
13. Long-term and Short-term Debt (continued)
Short-term Debt
Short-term debt with maturities of one year or less was as follows:
Commercial paper
Short-term borrowings (1)
Total short-term debt
Average daily balance
Average days outstanding
__________________
December 31,
2022
2021
(Dollars in millions)
$
$
$
99 $
76
175 $
237 $
100
241
341
300
157 days
155 days
(1)
Includes $76 million and $241 million at December 31, 2022 and 2021, respectively, of short-term debt related to
repurchase agreements, secured by assets of subsidiaries.
For the years ended December 31, 2022, 2021 and 2020, the weighted average interest rate on short-term debt was
5.23%, 1.41% and 2.01%, respectively.
Interest Expense
Interest expense included in other expenses was $655 million, $647 million and $632 million for the years ended
December 31, 2022, 2021 and 2020, respectively. Such amounts do not include interest expense on long-term debt related to
the collateral financing arrangement or junior subordinated debt securities. See Notes 14 and 15.
Credit and Committed Facilities
At December 31, 2022, the Company maintained the Credit Facility, as well as certain committed facilities aggregating
$3.2 billion (the “Committed Facilities”). When drawn upon, these facilities bear interest at varying rates in accordance with
the respective agreements.
Credit Facility
The Company’s Credit Facility is used for general corporate purposes, to support the borrowers’ commercial paper
programs and for the issuance of letters of credit. Total fees associated with the Credit Facility were $8 million, $10 million
and $14 million for the years ended December 31, 2022, 2021 and 2020, respectively, and were included in other expenses.
Information on the Credit Facility at December 31, 2022 was as follows:
Borrower(s)
Expiration
Maximum
Capacity
Letters of
Credit
Issued
Drawdowns
Unused
Commitments
(In millions)
MetLife, Inc. and MetLife Funding, Inc.
February 2026 (1)
$ 3,000
$
263 $
— $
2,737
__________________
(1)
All borrowings under the Credit Facility must be repaid by February 26, 2026, except that letters of credit outstanding
upon termination may remain outstanding until February 26, 2027.
262
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
13. Long-term and Short-term Debt (continued)
Committed Facilities
Letters of credit issued under the Committed Facilities are used for collateral for certain of the Company’s affiliated
reinsurance liabilities. Total fees associated with the Committed Facilities, included in other expenses, were $9 million,
$12 million and $12 million for the years ended December 31, 2022, 2021 and 2020, respectively. Information on the
Committed Facilities at December 31, 2022 was as follows:
Account Party/Borrower(s)
Expiration
Maximum
Capacity
Letters of
Credit
Issued
Drawdowns
Unused
Commitments
(In millions)
MetLife Reinsurance Company of
Vermont and MetLife, Inc.
MetLife Reinsurance Company of
Vermont and MetLife, Inc.
Total
__________________
November 2026 (1), (2)
$
350 $
350 $
— $
December 2037 (1), (3)
2,896
2,487
$
3,246 $
2,837 $
—
— $
—
409
409
(1) MetLife, Inc. is a guarantor under the applicable facility.
(2)
(3)
The issuance of additional letters of credit is at the discretion of the counterparty.
Capacity at December 31, 2022 of $2.8 billion increases periodically to a maximum of $2.9 billion in 2024, decreases
periodically commencing in 2025 to $2.0 billion in 2037, and decreases to $0 at expiration in December 2037. Unused
commitment of $409 million is based on maximum capacity. At December 31, 2022, Brighthouse Financial, Inc. and
its subsidiaries (“Brighthouse”), a former subsidiary of MetLife, Inc., is a beneficiary of $2.5 billion of letters of credit
issued under this facility and, in consideration, Brighthouse reimburses MetLife, Inc. for a portion of the letter of credit
fees.
In addition to the Committed Facilities, see also “— Other Notes” for information on the Credit Agreement.
14. Collateral Financing Arrangement
Information related to the collateral financing arrangement associated with the closed block (See Note 7) was as follows
at:
Surplus notes outstanding (1)
Receivable from unaffiliated financial institution (1)
Pledged collateral (2)
Assets held in trust (2)
__________________
(1)
(2)
Carrying value.
Estimated fair value.
December 31,
2022
2021
(In millions)
716 $
93 $
43 $
1,369 $
766
100
38
1,388
$
$
$
$
Interest expense on the collateral financing arrangement was $22 million, $11 million and $20 million for the years
ended December 31, 2022, 2021 and 2020, respectively, which is included in other expenses.
In December 2007, MLIC reinsured a portion of its closed block liabilities to MetLife Reinsurance Company of
Charleston (“MRC”), a wholly-owned subsidiary of MetLife, Inc. In connection with this transaction, MRC issued, to
investors placed by an unaffiliated financial institution, $2.5 billion in aggregate principal amount of 35-year surplus notes to
provide statutory reserve support for the assumed closed block liabilities. Interest on the surplus notes accrues at an annual
rate of three-month LIBOR plus 0.55%, payable quarterly. The ability of MRC to make interest and principal payments on
the surplus notes is contingent upon South Carolina regulatory approval.
263
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
14. Collateral Financing Arrangement (continued)
Simultaneously with the issuance of the surplus notes, MetLife, Inc. entered into an agreement with the unaffiliated
financial institution, under which MetLife, Inc. is entitled to the interest paid by MRC on the surplus notes of three-month
LIBOR plus 0.55% in exchange for the payment of three-month LIBOR plus 1.12%, payable quarterly on such amount as
adjusted, as described below. MetLife, Inc. may also be required to pledge collateral or make payments to the unaffiliated
financial institution related to any decline in the estimated fair value of the surplus notes. Any such payments are accounted
for as a receivable and included in other assets on the Company’s consolidated balance sheets and do not reduce the principal
amount outstanding of the surplus notes. Such payments, however, reduce the amount of interest payments due from
MetLife, Inc. under the agreement. Any payment received from the unaffiliated financial institution reduces the receivable by
an amount equal to such payment and also increases the amount of interest payments due from MetLife, Inc. under the
agreement. In addition, the unaffiliated financial institution may be required to pledge collateral to MetLife, Inc. related to
any increase in the estimated fair value of the surplus notes.
For the years ended December 31, 2022, 2021 and 2020, following regulatory approval, MRC repurchased $50 million,
$79 million and $148 million, respectively, in aggregate principal amount of the surplus notes. Payments made by the
Company in 2022, 2021 and 2020 associated with the repurchases were exclusive of accrued interest on the surplus notes. In
connection with the repurchases for the years ended December 31, 2022, 2021 and 2020, the Company received payments in
the aggregate amount of $7 million, $10 million and $20 million, respectively, from the unaffiliated financial institution,
which reduced the amount receivable from the unaffiliated financial institution by the same amounts. No other payments
related to an increase or decrease in the estimated fair value of the surplus notes were made by MetLife, Inc. or received from
the unaffiliated financial institution for the years ended December 31, 2022, 2021 or 2020.
A majority of the proceeds from the offering of the surplus notes was placed in a trust, which is consolidated by the
Company, to support MRC’s statutory obligations associated with the assumed closed block liabilities. For the years ended
December 31, 2022 and 2021, MRC transferred $119 million and $78 million, respectively, to the trust out of its general
account. For the year ended December 31, 2020, MRC transferred $78 million out of the trust to its general account. The
assets are principally invested in fixed maturity securities AFS and are presented as such within the Company’s consolidated
balance sheets, with the related income included within net investment income on the Company’s consolidated statements of
operations.
15. Junior Subordinated Debt Securities
Outstanding Junior Subordinated Debt Securities
Outstanding junior subordinated debt securities and exchangeable surplus trust securities which are exchangeable for
junior subordinated debt securities prior to redemption or repayment, were as follows:
Issuer
Issue
Date
Interest
Rate (1)
Scheduled
Redemption
Date
Interest Rate
Subsequent to
Scheduled
Redemption
Date (2)
Final
Maturity
Face
Value
2022
Unamortized
Discount
and Issuance
Costs
December 31,
Carrying
Value
Face
Value
(In millions)
2021
Unamortized
Discount
and Issuance
Costs
Carrying
Value
MetLife, Inc.
December
2006
6.400%
December
2036
LIBOR +
2.205%
December
2066
$ 1,250
$
(15) $ 1,235
$ 1,250
$
(16) $ 1,234
MetLife Capital
Trust IV (3)
December
2007
7.875%
December
2037
MetLife, Inc.
April 2008
9.250%
April 2038
MetLife, Inc.
July 2009
10.750%
August
2039
LIBOR +
3.960%
LIBOR +
5.540%
LIBOR +
7.548%
December
2067
April 2068
August 2069
700
750
500
(13)
(9)
(5)
687
741
495
700
750
500
(13)
687
(9)
(6)
741
494
Total
_________________
$ 3,200
$
(42) $ 3,158
$ 3,200
$
(44) $ 3,156
(1)
Prior to the scheduled redemption date, interest is payable semiannually in arrears.
264
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
15. Junior Subordinated Debt Securities (continued)
(2)
In the event the securities are not redeemed on or before the scheduled redemption date, interest will accrue after such
date at an annual rate of three-month LIBOR plus the indicated margin, payable quarterly in arrears. On
March 5, 2021, the Intercontinental Exchange Benchmark Administration, the administrator of LIBOR, announced that
it will cease the publication of three-month U.S. Dollar LIBOR at the end of June 2023. Existing contract fallback
provisions, and whether, how, and when the Company develops and adopts alternative reference rates, will influence
the effect of any changes to or discontinuation of LIBOR on the Company.
(3) MetLife Capital Trust IV is a VIE which is consolidated on the financial statements of the Company. The securities
issued by this entity are exchangeable surplus trust securities, which are exchangeable for a like amount of
MetLife, Inc.’s junior subordinated debt securities on the scheduled redemption date, mandatorily under certain
circumstances, and at any time upon MetLife, Inc. exercising its option to redeem the securities.
In connection with each of the securities described above, MetLife, Inc. may redeem or may cause the redemption of the
securities (i) in whole or in part, at any time on or after the date five years prior to the scheduled redemption date at their
principal amount plus accrued and unpaid interest to, but excluding, the date of redemption, or (ii) in certain circumstances,
in whole or in part, prior to the date five years prior to the scheduled redemption date at their principal amount plus accrued
and unpaid interest to, but excluding, the date of redemption or, if greater, a make-whole price. MetLife, Inc. also has the
right to, and in certain circumstances the requirement to, defer interest payments on the securities for a period up to 10 years.
Interest compounds during such periods of deferral. If interest is deferred for more than five consecutive years, MetLife, Inc.
is required to use proceeds from the sale of its common stock or warrants on common stock to satisfy this interest payment
obligation. In connection with each of the securities described above, MetLife, Inc. entered into a separate replacement
capital covenant (“RCC”). As part of each RCC, MetLife, Inc. agreed that it will not repay, redeem, or purchase the securities
on or before a date 10 years prior to the final maturity date of each issuance, unless, subject to certain limitations, it has
received cash proceeds during a specified period from the sale of specified replacement securities. Each RCC will terminate
upon the occurrence of certain events, including an acceleration of the applicable securities due to the occurrence of an event
of default. The RCCs are not intended for the benefit of holders of the securities and may not be enforced by them. Rather,
each RCC is for the benefit of the holders of a designated series of MetLife, Inc.’s other indebtedness (the “Covered Debt”).
Initially, the Covered Debt for each of the securities described above was MetLife, Inc.’s 5.700% senior notes due 2035 (the
“5.700% Senior Notes”). As a result of the issuance of MetLife, Inc.’s 10.750% Fixed-to-Floating Rate Junior Subordinated
Debentures due 2069 (the “10.750% JSDs”), the 10.750% JSDs became the Covered Debt with respect to, and in accordance
with, the terms of the RCC relating to MetLife, Inc.’s 6.40% Fixed-to-Floating Rate Junior Subordinated Debentures due
2066. The 5.700% Senior Notes continue to be the Covered Debt with respect to, and in accordance with, the terms of the
RCCs relating to each of MetLife Capital Trust IV’s 7.875% Fixed-to-Floating Rate Exchangeable Surplus Trust Securities,
MetLife, Inc.’s 9.250% Fixed-to-Floating Rate Junior Subordinated Debentures and the 10.750% JSDs. MetLife, Inc. also
entered into a replacement capital obligation which will commence during the six-month period prior to the scheduled
redemption date of each of the securities described above and under which MetLife, Inc. must use reasonable commercial
efforts to raise replacement capital to permit repayment of the securities through the issuance of certain qualifying capital
securities.
Interest expense on outstanding junior subordinated debt securities was $261 million for each of the years ended
December 31, 2022, 2021 and 2020, which is included in other expenses.
265
Table of Contents
16. Equity
Preferred Stock
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Preferred stock authorized, issued and outstanding was as follows at both December 31, 2022 and 2021:
Series
Series A preferred stock
Series D preferred stock
Series E preferred stock
Series F preferred stock
Series G preferred stock
Series A Junior Participating Preferred Stock
Not designated
Total
Shares Authorized
Shares Issued and Outstanding
27,600,000
500,000
32,200
40,000
1,000,000
10,000,000
160,827,800
200,000,000
24,000,000
500,000
32,200
40,000
1,000,000
—
—
25,572,200
In May 2021, MetLife, Inc. delivered a notice of redemption to the holders of MetLife, Inc.’s 5.25% Fixed-to-Floating
Rate Non-Cumulative Preferred Stock, Series C (the “Series C preferred stock”) pursuant to which it would redeem the
remaining 500,000 shares of Series C preferred stock at a redemption price of $1,000 per share. In connection with the
redemption, MetLife, Inc. recognized a preferred stock redemption premium of $6 million (calculated as the difference
between the carrying value of the Series C preferred stock and the total amount paid by MetLife, Inc. to the holders of the
Series C preferred stock in connection with the redemption), which was recorded as a reduction of retained earnings at
June 30, 2021. All outstanding shares of Series C preferred stock were redeemed on the dividend payment date of June 15,
2021 for an aggregate redemption price of $500 million in cash.
In June 2021, MetLife, Inc. filed a Certificate of Elimination (the “Certificate of Elimination”) of Series C preferred
stock with the Secretary of State of the State of Delaware to eliminate all references to the Series C preferred stock in
MetLife, Inc.’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), including the related
Certificate of Designations. As a result of the filing of the Certificate of Elimination, MetLife, Inc.’s Certificate of
Incorporation was amended to eliminate all references therein to the Series C preferred stock, and the shares that were
designated to such series were returned to the status of authorized but unissued shares of preferred stock, par value $0.01 per
share, of MetLife, Inc., without designation as to series. The Certificate of Elimination does not affect the total number of
authorized shares of capital stock of MetLife, Inc. or the total number of authorized shares of preferred stock.
In September 2020, MetLife, Inc. delivered a notice of partial redemption to the holders of the Series C preferred stock
pursuant to which it would redeem 1,000,000 of its 1,500,000 shares of Series C preferred stock at a redemption price of
$1,000 per share, plus an amount equal to accrued but unpaid dividends on the Series C preferred stock to, but excluding,
October 10, 2020, the redemption date. In connection with the redemption, MetLife, Inc. recognized a preferred stock
redemption premium of $14 million (calculated as the difference between the carrying value of the Series C preferred stock
and the total amount paid by MetLife, Inc. to the holders of the Series C preferred stock in connection with the redemption).
In October 2020, MetLife, Inc. redeemed and canceled 1,000,000 shares of Series C preferred stock for an aggregate
redemption price of $1.0 billion in cash.
In September 2020, MetLife, Inc. issued 1,000,000 shares of 3.85% Fixed Rate Reset Non-Cumulative Preferred Stock,
Series G (the “Series G preferred stock”) with a $0.01 par value per share and a liquidation preference of $1,000 per share,
for aggregate net proceeds of $989 million. In connection with the offering of the Series G preferred stock, MetLife, Inc.
incurred approximately $11 million of issuance costs which have been recorded as a reduction of additional paid-in capital.
In January 2020, MetLife, Inc. issued 40,000 shares of 4.75% Non-Cumulative Preferred Stock, Series F (the “Series F
preferred stock”) with a $0.01 par value per share and a liquidation preference of $25,000 per share, for aggregate net
proceeds of $972 million. MetLife, Inc. deposited the Series F preferred stock under a deposit agreement with a depositary,
which issued interests in fractional shares of the Series F preferred stock in the form of depositary shares (“Series F
Depositary Shares”) evidenced by depositary receipts; each Series F Depositary Share representing 1/1,000th interest in a
share of the Series F preferred stock. In connection with the offering of the Series F Depositary Shares, MetLife, Inc. incurred
approximately $28 million of issuance costs which have been recorded as a reduction of additional paid-in capital.
266
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The outstanding preferred stock ranks senior to MetLife, Inc.’s common stock with respect to the payment of dividends
and distributions upon liquidation, dissolution or winding-up. Holders of the outstanding preferred stock are entitled to
receive dividend payments only when, as and if declared by MetLife, Inc.’s Board of Directors or a duly authorized
committee thereof. Dividends on the preferred stock are not cumulative or mandatory. Accordingly, if dividends are not
declared on the preferred stock of the applicable series for any dividend period, then any accrued dividends for that dividend
period will cease to accrue and be payable. If a dividend is not declared before the dividend payment date for any such
dividend period, MetLife, Inc. will have no obligation to pay dividends accrued for such dividend period whether or not
dividends are declared for any future period. No dividends may be paid or declared on MetLife, Inc.’s common stock (or any
other securities ranking junior to the preferred stock) and MetLife, Inc. may not purchase, redeem, or otherwise acquire its
common stock (or other such junior stock) unless the full dividends for the latest completed dividend period on all
outstanding shares of preferred stock, and any parity stock, have been declared and paid or provided for.
The table below presents the dividend rates of MetLife, Inc.’s preferred stock outstanding at December 31, 2022:
Series
A
D
E
F
G
Per Annum Dividend Rate
Three-month LIBOR + 1.00%, with floor of 4.00%, payable quarterly in March, June, September and December
5.875% from issuance date to, but excluding, March 15, 2028, payable semiannually in March and September; three-month
LIBOR + 2.959% payable quarterly in March, June, September and December, thereafter
5.625% from issuance date, payable quarterly in March, June, September and December
4.750% from issuance date, payable quarterly in March, June, September and December, commencing in June 2020
3.850% from issuance date, but excluding, September 15, 2025, payable semiannually in March and September commencing in
March 2021; five year treasury rate, reset every five years, + 3.576% payable semiannually in March and September, thereafter
In the table above, dividends on each series of preferred stock are payable in arrears for the periods specified, if declared.
MetLife, Inc. is prohibited from declaring dividends on the Floating Rate Non-Cumulative Preferred Stock, Series A (the
“Series A preferred stock”) if it fails to meet specified capital adequacy, net income and stockholders’ equity levels. See “—
Dividend Restrictions — MetLife, Inc.”
Holders of the preferred stock do not have voting rights except in certain circumstances, including where the dividends
have not been paid for a specified number of dividend payment periods whether or not those periods are consecutive. Under
such circumstances, the holders of the preferred stock have certain voting rights with respect to members of the Board of
Directors of MetLife, Inc.
The preferred stock is not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or similar
provisions.
The Series A preferred stock is redeemable at MetLife, Inc.’s option in whole or in part, at a redemption price of $25 per
share of Series A preferred stock, plus declared and unpaid dividends.
MetLife, Inc. may, at its option, redeem the 5.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series D
(the “Series D preferred stock”), (i) in whole but not in part at any time prior to March 15, 2028, within 90 days after the
occurrence of a “rating agency event,” at a redemption price equal to $1,020 per share of Series D preferred stock, plus an
amount equal to any dividends per share that have accrued but have not been declared and paid for the then-current dividend
period to, but excluding, such redemption date; (ii) in whole but not in part, at any time prior to March 15, 2028, within 90
days after the occurrence of a “regulatory capital event;” and (iii) in whole or in part, at any time or from time to time, on or
after March 15, 2028, in the case of (ii) or (iii), at a redemption price equal to $1,000 per share of Series D preferred stock,
plus an amount equal to any dividends per share that have accrued but have not been declared and paid for the then-current
dividend period to, but excluding, such redemption date.
MetLife, Inc. may, at its option, redeem the 5.625% Non-Cumulative Preferred Stock, Series E (the “Series E preferred
stock”), (i) in whole but not in part at any time prior to June 15, 2023, within 90 days after the occurrence of a “rating agency
event,” at a redemption price equal to $25,500 per share of Series E preferred stock (equivalent to $25.50 per depositary
share, each Series E depositary share representing a 1/1,000th interest in a share of the Series E preferred stock (“Series E
Depositary Share”)), plus an amount equal to any dividends per share that have accrued but have not been declared and paid
for the then-current dividend period to, but excluding, such redemption date; (ii) in whole but not in part, at any time prior to
June 15, 2023, within 90 days after the occurrence of a “regulatory capital event;” and (iii) in whole or in part, at any time or
from time to time, on or after June 15, 2023, in the case of (ii) or (iii), at a redemption price equal to $25,000 per share of
267
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Series E preferred stock (equivalent to $25 per Series E Depositary Share), plus an amount equal to any dividends per share
that have accrued but have not been declared and paid for the then-current dividend period to, but excluding, such redemption
date.
MetLife, Inc. may, at its option, redeem the Series F preferred stock, (i) in whole but not in part at any time prior to
March 15, 2025, within 90 days after the occurrence of a “rating agency event,” at a redemption price equal to $25,500 per
share of Series F preferred stock (equivalent to $25.50 per Series F Depositary Share), plus an amount equal to any accrued
and unpaid dividends per share that have accrued but have not been declared and paid for the then-current dividend period to,
but excluding, the redemption date, (ii) in whole but not in part, at any time prior to March 15, 2025, within 90 days after the
occurrence of a “regulatory capital event;” and (iii) in whole or in part, at any time or from time to time, on or after
March 15, 2025, in the case of (ii) or (iii), at a redemption price equal to $25,000 per share of Series F preferred stock
(equivalent to $25 per Series F Depositary Share), plus an amount equal to any dividends per share that have accrued but
have not been declared and paid for the then-current dividend period to, but excluding, such redemption date.
MetLife, Inc. may, at its option, redeem the Series G preferred stock, (a) in whole but not in part, at any time, within 90
days after the conclusion of any review or appeal process instituted by the Company following the occurrence of a “rating
agency event” or, in the absence of any such review or appeal process, from such “rating agency event,” at a redemption price
equal to $1,020 per share of Series G preferred stock, plus an amount equal to any dividends per share that have accrued but
have not been declared and paid for the then-current dividend period to, but excluding, such redemption date and (b)(i) in
whole but not in part, at any time, within 90 days after the occurrence of a “regulatory capital event,” or (ii) in whole or in
part, on any dividend payment date, on or after September 15, 2025, in each case, at a redemption price equal to $1,000 per
share of Series G preferred stock, plus an amount equal to any dividends per share that have accrued but have not been
declared and paid for the then-current dividend period to, but excluding, such redemption date.
A “rating agency event” means that any nationally recognized statistical rating organization that then publishes a rating
for MetLife, Inc. amends, clarifies or changes the criteria used to assign equity credit to securities like the Series D preferred
stock, Series E preferred stock, Series F preferred stock or Series G preferred stock, which results in the lowering of the
equity credit assigned to the security, or shortens the length of time that the security is assigned a particular level of equity
credit. A “regulatory capital event” could occur as a result of a change or proposed change in laws, rules, regulations or
regulatory standards, including capital adequacy rules (or the interpretation or application thereof) of the United States or any
political subdivision thereof, including any capital regulator, including but not limited to the Board of Governors of the
Federal Reserve System (the “Federal Reserve Board”), the Federal Insurance Office, the National Association of Insurance
Commissioners (“NAIC”) or any state insurance regulator as may then have group-wide oversight of MetLife, Inc.’s
regulatory capital, from those laws, rules, regulations or regulatory standards (or the interpretation or application thereof) in
effect as of March 22, 2018, in the case of the Series D preferred stock, June 4, 2018, in the case of the Series E preferred
stock, January 15, 2020, in the case of the Series F preferred stock, or September 10, 2020, in the case of the Series G
preferred stock, that would create a more than insubstantial risk, as determined by MetLife, Inc., that the security would not
be treated as “Tier 1 capital” or as capital with attributes similar to those of Tier 1 capital, except that a “regulatory capital
event” will not include a change or proposed change (or the interpretation or application thereof) that would result in the
adoption of any criteria substantially the same as the criteria in the capital adequacy rules of the Federal Reserve Board
applicable to bank holding companies as of March 22, 2018, in the case of the Series D preferred stock, June 4, 2018, in the
case of the Series E preferred stock, January 15, 2020, in the case of the Series F preferred stock, or September 10, 2020, in
the case of the Series G preferred stock.
The per share and aggregate dividends declared for MetLife, Inc.’s preferred stock were as follows:
268
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
2022
Years Ended December 31,
2021
2020
Series
Per Share
Aggregate
Per Share
Aggregate
Per Share
Aggregate
$
$
$
$
$
$
A
C (1)
D
E
F
G
Total
1.033 $
—
58.750
1,406.252
1,187.500
38.500
$
__________________
(In millions, except per share data)
24 $
— $
29 $
45 $
48 $
39 $
185
1.015 $
19.085
58.750
1,406.252
1,187.500
39.035
$
24 $
10 $
29 $
45 $
48 $
39 $
195
1.015 $
45.860
58.750
1,406.252
1,088.542
—
$
24
59
30
45
44
—
202
(1)
Dividends were paid through the dividend payment date of June 15, 2021, when all outstanding shares of Series C
preferred stock were redeemed and eliminated.
Common Stock
Issuances
For the years ended December 31, 2022, 2021 and 2020, MetLife, Inc. issued 3,290,998 shares, 4,926,185 shares and
3,933,989 shares of its common stock for $156 million, $195 million and $153 million, respectively, in connection with
stock option exercises and other stock-based awards. There were no shares of common stock issued from treasury stock for
any of the years ended December 31, 2022, 2021 or 2020.
Repurchase Authorizations
MetLife, Inc. announced that its Board of Directors authorized common stock repurchases as follows:
Announcement Date
Authorization Amount
Authorization Remaining at
December 31, 2022
May 4, 2022
August 4, 2021
December 11, 2020
$
$
$
(In millions)
3,000 $
3,000 $
3,000 $
1,205
—
—
Under these authorizations, MetLife, Inc. may purchase its common stock from the MetLife Policyholder Trust, in the
open market (including pursuant to the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1 under the
Securities Exchange Act of 1934), and in privately negotiated transactions. Common stock repurchases are subject to the
discretion of MetLife, Inc.’s Board of Directors and will depend upon the Company’s capital position, liquidity, financial
strength and credit ratings, general market conditions, the market price of MetLife, Inc.’s common stock compared to
management’s assessment of the stock’s underlying value, applicable regulatory approvals, and other legal and accounting
factors.
For the years ended December 31, 2022, 2021 and 2020, MetLife, Inc. repurchased 49,732,851 shares, 72,296,518
shares and 26,361,487 shares under these repurchase authorizations for $3.3 billion, $4.3 billion, and $1.2 billion,
respectively. At December 31, 2021, $25 million of the aforementioned 2021 share repurchases were included in other
liabilities, and settled in 2022. At December 31, 2022, MetLife, Inc. had $1.2 billion remaining under its May 2022
common stock repurchase authorization.
269
Table of Contents
16. Equity (continued)
Dividends
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
For the years ended December 31, 2022, 2021 and 2020, MetLife, Inc. paid dividends on its common stock of
$1.6 billion, $1.6 billion and $1.7 billion, respectively. The payment of dividends by MetLife, Inc. to its shareholders is
subject to restrictions. See “— Dividend Restrictions — MetLife, Inc.”
The funding of the cash dividends and operating expenses of MetLife, Inc. is primarily provided by cash dividends
from MetLife, Inc.’s insurance subsidiaries. The statutory capital and surplus, or net assets, of MetLife, Inc.’s insurance
subsidiaries are subject to regulatory restrictions except to the extent that dividends are allowed to be paid in a given year
without prior regulatory approval. Dividends exceeding these limitations can generally be made subject to regulatory
approval. The nature and amount of these dividend restrictions, as well as the statutory capital and surplus of
MetLife, Inc.’s U.S. insurance subsidiaries, are disclosed in “— Statutory Equity and Income” and “— Dividend
Restrictions — Insurance Operations.” MetLife, Inc.’s principal non-U.S. insurance operations are branches or subsidiaries
of American Life Insurance Company (“American Life”), a U.S. insurance subsidiary of the Company.
Stock-Based Compensation Plans
Plans for Employees and Agents
Under the MetLife, Inc. 2015 Stock and Incentive Compensation Plan (the “2015 Stock Plan”), MetLife, Inc. may
grant awards to employees and agents in the form of Stock Options, Stock Appreciation Rights, Performance Shares or
Performance Share Units, Restricted Stock or Restricted Stock Units, Cash-Based Awards and Stock-Based Awards (each,
as applicable, as defined in the 2015 Stock Plan with reference to shares of MetLife, Inc. common stock (“Shares”)).
Awards under the 2015 Stock Plan and its predecessor plan, the MetLife, Inc. 2005 Stock and Incentive Compensation Plan
(the “2005 Stock Plan”), were outstanding at December 31, 2022. MetLife, Inc. granted all awards to employees and agents
in 2022 under the 2015 Stock Plan.
The aggregate number of Shares authorized for issuance under the 2015 Stock Plan at December 31, 2022 was
31,886,521.
MetLife recognizes compensation expense related to each award under the 2005 Stock Plan or 2015 Stock Plan in one
of two ways:
•
•
For cash-settled awards and the Performance Shares granted in 2018, MetLife remeasures the compensation expense
quarterly.
For other awards, MetLife recognizes an expense based on the number of awards it expects to vest, which represents
the awards granted less expected forfeitures over the life of the award, as estimated at the date of grant. Unless
MetLife observes a material deviation from the assumed forfeiture rate during the term in which the awards are
expensed, MetLife recognizes any adjustment necessary to reflect differences in actual experience in the period the
award becomes payable or exercisable.
Compensation expense related to awards under the 2005 Stock Plan principally relates to the issuance of Stock
Options. Under the 2015 Stock Plan, compensation expense principally relates to Stock Options, Unit Options,
Performance Shares, Performance Units, Restricted Stock Units and Restricted Units. MetLife, Inc. granted the majority of
each year’s awards under the 2005 Stock Plan and 2015 Stock Plan in the first quarter of the year.
Awards that have become payable in Shares but the issuance of which has been deferred (“Deferred Shares”), payable
to employees or agents related to awards under all plans equaled 686,770 Shares at December 31, 2022.
MetLife granted cash-settled awards based in whole or in part on the price of Shares or changes in the price of Shares
(“Phantom Stock-Based Awards”) under the MetLife, Inc. International Unit Option Incentive Plan, the MetLife
International Performance Unit Incentive Plan, and the MetLife International Restricted Unit Incentive Plan prior to 2015,
and under the 2015 Stock Plan in 2015 and later.
Plans for Non-Management Directors
Under the MetLife, Inc. 2015 Non-Management Director Stock Compensation Plan (the “2015 Director Stock Plan”),
MetLife, Inc. may grant non-management Directors of MetLife, Inc. awards in the form of nonqualified Stock Options,
Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, or Stock-Based Awards (each, as applicable, as
defined in the 2015 Director Stock Plan with reference to Shares).
270
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The only awards MetLife, Inc. granted under the 2015 Director Stock Plan and its predecessor plan, the MetLife, Inc.
2005 Non-Management Director Stock Compensation Plan (the “2005 Director Stock Plan”), through December 31, 2022
were Stock-Based Awards that vested immediately. As a result, no awards under the 2005 Director Stock Plan or 2015
Director Stock Plan remained outstanding at December 31, 2022.
The aggregate number of Shares authorized for issuance under the 2015 Director Stock Plan at December 31, 2022
was 1,469,329.
MetLife recognizes compensation expense related to awards under the 2015 Director Stock Plan based on the number
of Shares awarded.
Deferred Shares payable to Directors related to awards under the 2005 Director Stock Plan, 2015 Director Stock Plan,
or earlier applicable plans equaled 323,898 Shares at December 31, 2022.
Compensation Expense Related to Stock-Based Compensation
The components of compensation expense related to stock-based compensation includes compensation expense related
to Phantom Stock-Based Awards and excludes the insignificant compensation expense related to the 2015 Director Stock
Plan. Those components were:
Stock Options and Unit Options
Performance Shares and Performance Units (1)
Restricted Stock Units and Restricted Units
Total compensation expense
Income tax benefit
__________________
Years Ended December 31,
2022
2021
2020
$
$
$
(In millions)
7 $
9 $
108
69
184 $
39 $
98
66
173 $
36 $
6
63
58
127
27
(1)
The Company may further adjust the number of Performance Shares and Performance Units it expects to vest, and the
related compensation expense, if management changes its estimate of the most likely final performance factor.
The following table presents the total unrecognized compensation expense related to stock-based compensation and
the expected weighted average period over which these expenses will be recognized at:
Stock Options
Performance Shares
Restricted Stock Units
Equity Awards
Stock Options
December 31, 2022
Expense
Weighted Average
Period
(In millions)
(Years)
$
$
$
3
29
32
1.78
1.68
1.83
Stock Options are the contingent right of award holders to purchase Shares at a stated price for a limited time. All
Stock Options have an exercise price equal to the closing price of a Share reported on the New York Stock Exchange
(“NYSE”) on the date of grant and have a maximum term of 10 years. The majority of Stock Options that MetLife, Inc.
has granted have become or will become exercisable at a rate of one-third of each award on each of the first three
anniversaries of the grant date. Other Stock Options have become or will become exercisable on the third anniversary of
the grant date. Vesting is subject to continued service, except for employees who meet specified age and service criteria
and in certain other limited circumstances.
271
Table of Contents
16. Equity (continued)
Stock Option Activity
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
A summary of the activity related to Stock Options was as follows:
Outstanding at January 1, 2022
Granted
Exercised
Expired (2)
Forfeited (3)
Outstanding at December 31, 2022
Vested and expected to vest at December 31, 2022
Exercisable at December 31, 2022
__________________
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Shares
Under
Option
Aggregate
Intrinsic
Value (1)
4,268,091 $ 44.02
5.03 $
79
(Years)
(In millions)
402,976 $ 68.96
(1,259,933) $ 37.79
(6,424) $ 33.35
(18,669) $ 60.07
3,386,041 $ 49.24
3,376,464 $ 49.20
2,533,864 $ 45.25
5.58 $
5.57 $
4.61 $
78
78
69
(1)
(2)
(3)
The intrinsic value of each Stock Option is the closing price on a particular date less the exercise price of the Stock
Option, so long as the difference is greater than zero. The aggregate intrinsic value of all outstanding Stock Options is
computed using the closing Share price on December 31, 2022 of $72.37 and December 31, 2021 of $62.49, as
applicable.
Expired options were exercisable, but unexercised, as of their expiration date.
Forfeited awards were either (a) unvested or unexercisable at the end of the awardholder’s employment, where the
awardholder did not meet the criteria for post-employment award continuation; or (b) held by awardholders the
Company terminated from employment for cause as defined in the terms of the awards.
MetLife estimates the fair value of Stock Options on the date of grant using a binomial lattice model. The significant
assumptions the Company uses in its binomial lattice model include: expected volatility of the price of Shares; risk-free
rate of return; dividend yield on Shares; exercise multiple; and the post-vesting termination rate.
MetLife bases expected volatility on an analysis of historical prices of Shares and call options on Shares traded on
the open market. The Company uses a weighted-average of the implied volatility for publicly-traded call options with the
longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using
monthly closing prices of Shares. The Company chose a monthly measurement interval for historical volatility as this
interval reflects the Company’s view that employee option exercise decisions are based on longer-term trends in the price
of the underlying Shares rather than on daily price movements.
The Company’s binomial lattice model incorporates different risk-free rates based on the imputed forward rates for
U.S. Treasury Strips for each year over the contractual term of the option. The table below presents the full range of rates
that were used for options granted during the respective periods.
The Company determines dividend yield based on historical dividend distributions compared to the price of the
underlying Shares as of the valuation date and held constant over the life of the Stock Option.
The Company’s binomial lattice model incorporates the term of the Stock Options, expected exercise behavior and a
post-vesting termination rate, or the rate at which vested options are exercised or expire prematurely due to termination
of employment. From these factors, the model derives an expected life of the Stock Option. The model’s exercise
behavior is a multiple that reflects the ratio of stock price at the time of exercise over the exercise price of the Stock
Option at the time the model expects holders to exercise. The model derives the exercise multiple from actual exercise
activity. The model determines the post-vesting termination rate from actual exercise experience and expiration activity
under the Incentive Plans.
272
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The following table presents the weighted average assumptions, with the exception of risk-free rate (which is
expressed as a range), that the model uses to determine the fair value of unexercised Stock Options:
Dividend yield
Risk-free rate of return
Expected volatility
Exercise multiple
Post-vesting termination rate
Contractual term (years)
Expected life (years)
Weighted average exercise price of stock options granted
Weighted average fair value of stock options granted
Years Ended December 31,
2022
2.78%
2021
3.20%
2020
3.70%
1.17% - 1.97%
0.08% - 2.48%
1.30% - 1.57%
26.67%
1.45
3.58%
10
6
$68.96
$15.18
29.72%
1.44
3.58%
10
7
$57.43
$12.76
25.55%
1.44
3.79%
10
7
$47.58
$9.02
The following table presents a summary of Stock Option exercise activity:
Total intrinsic value of stock options exercised
Cash received from exercise of stock options
Income tax benefit realized from stock options exercised
Performance Shares
Years Ended December 31,
2022
2021
(In millions)
2020
$
$
$
40 $
48 $
8 $
60 $
119 $
13 $
29
89
6
Performance Shares are units that, if they vest, are multiplied by a performance factor to produce a number of final
Shares payable. MetLife accounts for Performance Shares as equity awards. MetLife, Inc. does not credit Performance
Shares with dividend-equivalents for dividends paid on Shares. Performance Share awards normally vest in their entirety
at the end of the three-year performance period. Vesting is subject to continued service, except for employees who meet
specified age and service criteria and in certain other limited circumstances.
For awards granted for the 2018 – 2020 performance period, the vested Performance Shares will be multiplied by a
performance factor of 0% to 175% that the MetLife, Inc. Compensation Committee will determine in its discretion
(subject to MetLife, Inc. meeting threshold performance goals related to its adjusted income or total shareholder return).
In doing so, the Compensation Committee may consider MetLife, Inc.’s total shareholder return relative to the
performance of its competitors and adjusted return on MetLife, Inc.’s common stockholders’ equity relative to its
financial plan. MetLife estimates the fair value of Performance Shares each quarter until they become payable. For
awards granted for the 2019 – 2021 and later performance periods in progress through December 31, 2022, the vested
Performance Shares will be multiplied by a performance factor of 0% to 175% that the MetLife, Inc. Compensation
Committee will determine by (a) the Company’s annual adjusted return on equity performance over the three-year period
compared to the Company’s three-year business plan goal; (b) the Company’s total shareholder return over the same
three-year period compared to a peer group of companies; and (c) a cap of 100% if the Company’s total shareholder
return for the three-year period is zero or less. The Compensation Committee will exclude the impact of a “Significant
Event” from the Company’s adjusted return on equity or the business plan goal, to the extent the Committee determines
in its informed judgment that the event changed the adjusted return on equity performance factor component.
“Significant Events” include accounting changes, business combinations, restructuring, nonrecurring tax events, common
share issuance or repurchases, catastrophes, litigation and regulatory settlements, asbestos and environmental events,
certain specified classes of non-coupon investments, and other significant nonrecurring, infrequent, or unusual items.
The performance factor for the 2019 - 2021 performance period was 141.3%.
273
Table of Contents
16. Equity (continued)
Restricted Stock Units
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Restricted Stock Units are units that, if they vest, are payable in an equal number of Shares. MetLife accounts for
Restricted Stock Units as equity awards. MetLife, Inc. does not credit Restricted Stock Units with dividend-equivalents
for dividends paid on Shares. Accordingly, the estimated fair value of Restricted Stock Units is based upon the closing
price of Shares on the date of grant, reduced by the present value of estimated dividends to be paid on that stock.
The majority of Restricted Stock Units normally vest in thirds on or shortly after the first three anniversaries of their
grant date. Other Restricted Stock Units normally vest in their entirety on the third or later anniversary of their grant
date. Vesting is subject to continued service, except for employees who meet specified age and service criteria and in
certain other limited circumstances.
Performance Share and Restricted Stock Unit Activity
The following table presents a summary of Performance Share and Restricted Stock Unit activity:
Outstanding at January 1, 2022
Granted
Forfeited (2)
Payable (3)
Outstanding at December 31, 2022
Vested and expected to vest at December 31, 2022
__________________
Performance Shares
Restricted Stock Units
Shares
Weighted
Average
Fair Value (1)
Units
Weighted
Average
Fair Value (1)
3,848,015 $
978,422 $
(130,371) $
(1,489,328) $
3,206,738 $
3,161,138 $
43.74
62.83
51.20
39.38
51.26
51.15
2,451,046 $
893,161 $
(127,184) $
(1,217,059) $
1,999,964 $
1,967,910 $
45.39
62.60
52.97
43.71
53.62
53.56
(1)
(2)
Values for awards outstanding at January 1, 2022, represent weighted average number of awards multiplied by their
fair value per Share at December 31, 2021. Otherwise, all values represent weighted average of number of awards
multiplied by the fair value per Share at December 31, 2022. Fair value of Performance Shares and Restricted Stock
Units on December 31, 2022 was equal to Grant Date fair value.
Forfeited awards were either (a) unvested or unexercisable at the end of the awardholder’s employment, where the
awardholder did not meet the criteria for post-employment award continuation; or (b) held by awardholders the
Company terminated from employment for cause as defined in the terms of the awards.
(3)
Includes both Shares paid and Deferred Shares.
Performance Share amounts above represent aggregate awards at target, and do not reflect potential increases or
decreases that may result from the performance factor. At December 31, 2022, the performance period for the 2020 —
2022 Performance Share grants was completed, but the performance factor had not yet been determined. Included in the
immediately preceding table are 1,174,602 outstanding Performance Shares to which the 2020 — 2022 performance factor
will be applied.
Liability Awards (Phantom Stock-Based Awards)
Certain MetLife subsidiaries have a liability for Phantom Stock-Based Awards in the form of Unit Options,
Performance Units, and/or Restricted Units. These Share-based cash settled awards are recorded as liabilities until MetLife
makes payment. The fair value of unsettled or unvested liability awards is re-measured at the end of each reporting period
based on the change in fair value of one Share. The liability and corresponding expense are adjusted accordingly until the
award is settled.
274
Table of Contents
16. Equity (continued)
Unit Options
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Unit Options are the contingent right of award holders to receive a cash payment equal to the closing price of a
Share on the exercise date, less the closing price on the grant date, if the difference is greater than zero, for a limited
time. All Unit Options have an exercise price equal to the closing price of a Share reported on the NYSE on the date of
grant and have a maximum term of 10 years. The majority of Unit Options have become or will become eligible for
exercise at a rate of one-third of each award on each of the first three anniversaries of the grant date. Other Unit Options
have become or will become eligible for exercise on the third anniversary of the grant date. Vesting is subject to
continued service, except for employees who meet specified age and service criteria and in certain other limited
circumstances.
Performance Units
Performance Units are units that, if they vest, are multiplied by a performance factor to produce a number of final
Performance Units which are payable in cash equal to the closing price of a Share on a date following the last day of the
three-year performance period. Performance Units are accounted for as liability awards. MetLife, Inc. does not credit
them with dividend-equivalents for dividends paid on Shares. Accordingly, the estimated fair value of Performance Units
is based upon the closing price of a Share on the date of grant, reduced by the present value of estimated dividends to be
paid on that stock during the performance period. MetLife determines each performance period’s performance factor in
the same way it does for the same performance period’s Performance Shares.
See “— Equity Awards — Performance Shares” for a discussion of the Performance Shares vesting period and
performance factor calculation, which are also used for Performance Units.
Restricted Units
Restricted Units are units that, if they vest, are payable in cash equal to the closing price of a Share on the last day of
the restriction period. The majority of Restricted Units normally vest in thirds on or shortly after the first three
anniversaries of their grant date. Other Restricted Units normally vest in their entirety on the third or later anniversary of
their grant date. Vesting is subject to continued service, except for employees who meet specified age and service criteria
and in certain other limited circumstances. Restricted Units are accounted for as liability awards. MetLife, Inc. does not
credit Restricted Units with dividend-equivalents for dividends paid on Shares. Accordingly, the estimated fair value of
Restricted Units is based upon the closing price of a Share on the date of grant, reduced by the present value of estimated
dividends to be paid on that stock during the performance period.
Liability Award Activity
The following table presents a summary of Liability Awards activity:
Outstanding at January 1, 2022
Granted
Exercised
Expired (1)
Forfeited (2)
Paid
Outstanding at December 31, 2022
Vested and expected to vest at December 31, 2022
__________________
Unit
Options
Performance
Units
Restricted
Units
124,986
13,192
(23,800)
(59,647)
—
—
54,731
54,359
448,986
115,057
—
—
514,556
216,980
—
—
(15,223)
(30,580)
(156,900)
(259,401)
391,920
382,702
441,555
431,164
(1)
(2)
Expired options were exercisable, but unexercised, as of their expiration date.
Forfeited awards were either (a) unvested or unexercisable at the end of the awardholder’s employment, where the
awardholder did not meet the criteria for post-employment award continuation; or (b) held by awardholders the
Company terminated from employment for cause as defined in the terms of the awards.
275
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Performance Units amounts above represent aggregate awards at target, and do not reflect potential increases or
decreases that may result from the performance factor. At December 31, 2022, the performance period for the 2020 -
2022 Performance Unit grants was completed, but the performance factor had not yet been determined. Included in the
immediately preceding table are 154,904 outstanding Performance Units to which the 2020 - 2022 performance factor
will be applied.
Statutory Equity and Income
The states of domicile of MetLife, Inc.’s U.S. insurance subsidiaries each impose risk-based capital (“RBC”)
requirements that were developed by the NAIC. American Life does not write business in Delaware or any other U.S. state
and, as such, is exempt from RBC requirements by Delaware law. Regulatory compliance is determined by a ratio of a
company’s total adjusted capital, calculated in the manner prescribed by the NAIC (“TAC”), to its authorized control level
RBC, calculated in the manner prescribed by the NAIC (“ACL RBC”), based on the statutory-based filed financial
statements. Companies below specific trigger levels or ratios are classified by their respective levels, each of which requires
specified corrective action. The minimum level of TAC before corrective action commences is twice ACL RBC (“Company
Action Level RBC”). While not required by or filed with insurance regulators, the Company also calculates an internally
defined combined RBC ratio (“Statement-Based Combined RBC Ratio”), which is determined by dividing the sum of TAC
for MetLife, Inc.’s principal U.S. insurance subsidiaries, excluding American Life, by the sum of Company Action Level
RBC for such subsidiaries. The Company’s Statement-Based Combined RBC Ratio was in excess of 340% and in excess of
360% at December 31, 2022 and 2021, respectively. In addition, all non-exempted U.S. insurance subsidiaries individually
exceeded Company Action Level RBC for all periods presented.
MetLife, Inc.’s foreign insurance operations are regulated by applicable authorities of the jurisdictions in which each
entity operates and are subject to minimum capital and solvency requirements in those jurisdictions before corrective action
commences. At December 31, 2022 and 2021, the adjusted capital of American Life’s insurance subsidiary in Japan, the
Company’s largest foreign insurance operation, was in excess of three times and in excess of four times the 200% solvency
margin ratio, respectively, that would require corrective action. Excluding Japan, the aggregate required capital and surplus of
the Company’s other foreign insurance operations was $3.3 billion and the aggregate actual regulatory capital and surplus of
such operations was $7.4 billion as of the date of the most recent required capital adequacy calculation for each jurisdiction.
The Company’s foreign insurance operations exceeded the minimum capital and solvency requirements as of the date of the
most recent fiscal year-end capital adequacy calculation for each jurisdiction.
MetLife, Inc.’s insurance subsidiaries prepare statutory-basis financial statements in accordance with statutory
accounting practices prescribed or permitted by the insurance department of the state of domicile or applicable foreign
jurisdiction. The NAIC has adopted the Codification of Statutory Accounting Principles (“Statutory Codification”). Statutory
Codification is intended to standardize regulatory accounting and reporting to state insurance departments. However,
statutory accounting principles continue to be established by individual state laws and permitted practices. Modifications by
the various state insurance departments may impact the effect of Statutory Codification on the statutory capital and surplus of
MetLife, Inc.’s U.S. insurance subsidiaries.
Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred,
establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of
debt and valuing securities on a different basis.
In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The
most significant assets not admitted by the Company are net deferred income tax assets resulting from temporary differences
between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within three
years. Further, statutory accounting principles do not give recognition to purchase accounting adjustments. MetLife, Inc.’s
U.S. insurance subsidiaries have no material state prescribed accounting practices, except as described below.
New York has adopted certain prescribed accounting practices, primarily consisting of the continuous Commissioners’
Annuity Reserve Valuation Method, which impacts deferred annuities, and the New York Special Considerations Letter,
which mandates certain assumptions in asset adequacy testing. The collective impact of these prescribed accounting practices
decreased the statutory capital and surplus of MLIC by $1.3 billion and $1.2 billion at December 31, 2022 and 2021,
respectively, compared to what capital and surplus would have been had it been measured under NAIC guidance.
276
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
American Life calculates its policyholder reserves on insurance written in each foreign jurisdiction in accordance with
the reserve standards required by such jurisdiction. Additionally, American Life’s insurance subsidiaries are valued based on
each respective subsidiary’s underlying local statutory equity, adjusted in a manner consistent with the reporting prescribed
for its branch operations. The prescribed practice exempts American Life from calculating and disclosing the impact to its
statutory capital and surplus.
The tables below present amounts from MetLife, Inc.’s U.S. insurance subsidiaries, which are derived from the statutory-
basis financial statements as filed with the insurance regulators.
Statutory net income (loss) was as follows:
Company
State of Domicile
2022
Years Ended December 31,
2021
(In millions)
2020
Metropolitan Life Insurance Company
American Life Insurance Company
Metropolitan Property and Casualty Insurance Company (1)
Metropolitan Tower Life Insurance Company
Other
__________________
New York
Delaware
Rhode Island
Nebraska
Various
$
$
$
$
2,737 $
824 $
N/A
232 $
91 $
3,513 $
3,392
48 $
N/A $
185 $
76 $
980
336
(237)
84
(1)
See Note 3 for information on the Company’s business dispositions.
Statutory capital and surplus was as follows at:
Company
Metropolitan Life Insurance Company
American Life Insurance Company
Metropolitan Tower Life Insurance Company
Other
December 31,
2022
2021
(In millions)
$
$
$
$
10,869 $
11,804
5,040 $
1,896 $
209 $
5,584
1,638
193
The Company’s U.S. captive life reinsurance subsidiaries, which reinsure risks including the closed block, level premium
term life and ULSG assumed from other MetLife subsidiaries, have no state prescribed accounting practices, except for
MetLife Reinsurance Company of Vermont (“MRV”).
MRV, with the explicit permission of the Commissioner of Insurance of the State of Vermont, has included, as admitted
assets, the value of letters of credit serving as collateral for reinsurance credit taken by various affiliated cedants, in
connection with reinsurance agreements entered into between MRV and the various affiliated cedants, which resulted in
higher statutory capital and surplus of $2.0 billion at both December 31, 2022 and 2021. MRV’s RBC would have triggered a
regulatory event without the use of the state prescribed practice.
The combined statutory net income (loss) of MetLife, Inc.’s U.S. captive life reinsurance subsidiaries was $44 million,
$41 million and ($7) million for the years ended December 2022, 2021 and 2020, respectively, and the combined statutory
capital and surplus, including the aforementioned prescribed practice, was $726 million and $693 million at
December 31, 2022 and 2021, respectively.
277
Table of Contents
16. Equity (continued)
Dividend Restrictions
Insurance Operations
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The table below sets forth the dividends permitted to be paid by MetLife, Inc.’s primary insurance subsidiaries without
insurance regulatory approval and the actual dividends paid:
Company
Metropolitan Life Insurance Company
American Life Insurance Company
Metropolitan Property and Casualty Insurance Company
Metropolitan Tower Life Insurance Company
__________________
2023
2022
Permitted Without
Approval (1)
Paid (2)
(In millions)
2021
Paid (2)
$
$
$
2,471 $
499 $
N/A
189 $
3,539
1,289
N/A
—
$
$
$
$
3,393
1,135
35 (3)
—
(1)
(2)
(3)
Reflects dividend amounts that may be paid by the end of 2023 without prior regulatory approval.
Reflects all amounts paid, including those where regulatory approval was obtained as required.
Consists of the stock of a subsidiary paid to MetLife, Inc. See Note 3 for information on the Company’s business
dispositions.
Under the New York State Insurance Law, MLIC is permitted, without prior insurance regulatory clearance, to pay
stockholder dividends to MetLife, Inc. in any calendar year based on either of two standards. Under one standard, MLIC is
permitted, without prior insurance regulatory clearance, to pay dividends out of earned surplus (defined as positive
unassigned funds (surplus), excluding 85% of the change in net unrealized capital gains or losses (less capital gains tax),
for the immediately preceding calendar year), in an amount up to the greater of: (i) 10% of its surplus to policyholders as of
the end of the immediately preceding calendar year, or (ii) its statutory net gain from operations for the immediately
preceding calendar year (excluding realized capital gains), not to exceed 30% of surplus to policyholders as of the end of
the immediately preceding calendar year. In addition, under this standard, MLIC may not, without prior insurance
regulatory clearance, pay any dividends in any calendar year immediately following a calendar year for which its net gain
from operations, excluding realized capital gains, was negative. Under the second standard, if dividends are paid out of
other than earned surplus, MLIC may, without prior insurance regulatory clearance, pay an amount up to the lesser of: (i)
10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory net gain
from operations for the immediately preceding calendar year (excluding realized capital gains). In addition, MLIC will be
permitted to pay a dividend to MetLife, Inc. in excess of the amounts allowed under both standards only if it files notice of
its intention to declare such a dividend and the amount thereof with the New York Superintendent of Financial Services
(the “Superintendent”) and the Superintendent either approves the distribution of the dividend or does not disapprove the
dividend within 30 days of its filing. Under the New York State Insurance Law, the Superintendent has broad discretion in
determining whether the financial condition of a stock life insurance company would support the payment of such
dividends to its stockholder.
Under the Delaware Insurance Code, American Life is permitted, without prior insurance regulatory clearance, to pay
a stockholder dividend to MetLife, Inc. as long as the amount of the dividend, when aggregated with all other dividends in
the preceding 12 months, does not exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the
immediately preceding calendar year, or (ii) its statutory net gain from operations for the immediately preceding calendar
year (excluding realized capital gains), not including pro rata distributions of American Life’s own securities. American
Life will be permitted to pay a dividend to MetLife, Inc. in excess of the greater of such two amounts only if it files notice
of the declaration of such a dividend and the amount thereof with the Delaware Commissioner of Insurance (the “Delaware
Commissioner”) and the Delaware Commissioner either approves the distribution of the dividend or does not disapprove
the dividend within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as “unassigned
funds (surplus)”) as of the immediately preceding calendar year requires insurance regulatory approval. Under the
Delaware Insurance Code, the Delaware Commissioner has broad discretion in determining whether the financial condition
of a stock life insurance company would support the payment of such dividends to its stockholders.
278
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Under the Nebraska Insurance Code, Metropolitan Tower Life Insurance Company (“MTL”) is permitted, without
prior insurance regulatory clearance, to pay a stockholder dividend to MetLife, Inc. as long as the amount of the dividend,
when aggregated with all other dividends in the preceding 12 months, does not exceed the greater of: (i) 10% of its surplus
to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory net gain from operations for
the immediately preceding calendar year (excluding realized capital gains), not including pro rata distributions of MTL’s
own securities. MTL will be permitted to pay a dividend to MetLife, Inc. in excess of the greater of such two amounts only
if it files notice of the declaration of such a dividend and the amount thereof with the Director of the Nebraska Department
of Insurance (the “Nebraska Director”) and the Nebraska Director either approves the distribution of the dividend or does
not disapprove the dividend within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as
“unassigned funds (surplus)” excluding unrealized capital gains) as of the immediately preceding calendar year requires
insurance regulatory approval. Under the Nebraska Insurance Code, the Nebraska Director has broad discretion in
determining whether the financial condition of a stock life insurance company would support the payment of such
dividends to its stockholders.
MetLife, Inc.
The declaration and payment of dividends are subject to the discretion of MetLife, Inc.’s Board of Directors and will
depend on its financial condition, results of operations, cash requirements, future prospects, regulatory restrictions on the
payment of dividends by MetLife, Inc.’s insurance subsidiaries and other factors deemed relevant by the Board of
Directors. In addition, the payment of dividends on MetLife, Inc.’s common stock, and MetLife, Inc.’s ability to repurchase
its common stock, may be subject to restrictions described below arising under the terms of MetLife, Inc.’s Series A
preferred stock and its junior subordinated debentures in situations where MetLife, Inc. may be experiencing financial
stress, as described below. For purposes of this discussion, “junior subordinated debentures” are deemed to include
MetLife, Inc.’s Fixed-to-Floating Rate Exchangeable Surplus Trust Securities, as discussed in Note 15.
“Dividend Stopper” Provisions in the Preferred Stock and Junior Subordinated Debentures
If MetLife, Inc. has not paid the full dividends on its preferred stock for the latest completed dividend period, MetLife,
Inc. may not repurchase or pay dividends on its common stock during a dividend period under so-called “dividend stopper”
provisions. Further, MetLife, Inc.’s Series A preferred stock and its junior subordinated debentures contain provisions that
would suspend the payment of preferred stock dividends and interest on junior subordinated debentures if MetLife, Inc.
fails to meet certain RBC ratio, net income and stockholders’ equity tests at specified times, except to the extent of the net
proceeds from the issuance of certain securities during specified periods. If Series A preferred stock dividends or interest
on junior subordinated debentures are not paid, certain provisions in those instruments (including under “dividend stopper”
provisions) may restrict MetLife, Inc. from repurchasing its common or preferred stock or paying dividends on its common
or preferred stock and interest on its junior subordinated debentures.
The junior subordinated debentures further provide that MetLife, Inc. may, at its option and provided that certain
conditions are met, defer payment of interest without giving rise to an event of default for periods of up to 10 years. In that
case, after five years MetLife, Inc. would be obligated to use commercially reasonable efforts to sell equity securities to
raise proceeds to pay the interest. MetLife, Inc. would not be subject to limitations on the number of deferral periods that
MetLife, Inc. could begin, so long as all accrued and unpaid interest is paid with respect to prior deferral periods. If
MetLife, Inc. were to defer payments of interest, the “dividend stopper” provisions in the junior subordinated debentures
would thus prevent MetLife, Inc. from repurchasing or paying dividends on its common stock or other capital stock
(including the preferred stock) during the period of deferral, subject to exceptions.
MetLife, Inc. is a party to certain RCCs which limit its ability to eliminate these restrictions through the repayment,
redemption or purchase of junior subordinated debentures by requiring MetLife, Inc., with some limitations, to receive cash
proceeds during a specified period from the sale of specified replacement securities prior to any repayment, redemption or
purchase. See Note 15 for a description of such covenants.
279
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
16. Equity (continued)
Accumulated Other Comprehensive Income (Loss)
Information regarding changes in the balances of each component of AOCI attributable to MetLife, Inc. was as follows:
Balance at December 31, 2019
OCI before reclassifications
Deferred income tax benefit (expense)
AOCI before reclassifications, net of income tax
Amounts reclassified from AOCI
Deferred income tax benefit (expense)
Amounts reclassified from AOCI, net of income tax
Sale of subsidiaries, net of income tax (1)
Balance at December 31, 2020
OCI before reclassifications
Deferred income tax benefit (expense)
AOCI before reclassifications, net of income tax
Amounts reclassified from AOCI
Deferred income tax benefit (expense)
Amounts reclassified from AOCI, net of income tax
Sale of subsidiaries, net of income tax (1)
Balance at December 31, 2021
OCI before reclassifications
Deferred income tax benefit (expense)
AOCI before reclassifications, net of income tax
Amounts reclassified from AOCI
Deferred income tax benefit (expense)
Amounts reclassified from AOCI, net of income tax
Sale of subsidiaries, net of income tax (1)
Balance at December 31, 2022
__________________
Unrealized
Investment Gains
(Losses), Net of
Related Offsets
Unrealized Gains
(Losses) on
Derivatives
Foreign
Currency
Translation
Adjustments
(In millions)
Defined
Benefit
Plans
Adjustment
Total
$
18,283 $
1,698 $
(4,927) $
(2,002) $
5,775
(1,349)
22,709
(357)
83
(274)
(218)
22,217
(7,829)
1,918
16,306
(125)
29
(96)
(168)
16,042
(49,427)
11,304
(22,081)
1,607
(368)
1,239
(9)
730
(257)
2,171
(1,016)
358
(658)
—
1,513
(113)
18
1,418
250
(39)
211
—
1,629
(583)
89
1,135
498
(76)
422
—
1,002
(36)
(3,961)
—
—
—
166
(3,795)
(1,567)
(53)
(5,415)
—
—
—
261
(5,154)
(1,629)
(16)
(6,799)
—
—
—
387
95
(22)
(1,929)
86
(20)
66
—
(1,863)
237
(46)
(1,672)
91
(17)
74
—
(1,598)
188
(39)
(1,449)
93
(19)
74
(2)
13,052
7,602
(1,664)
18,990
(1,287)
421
(866)
(52)
18,072
(9,272)
1,837
10,637
216
(27)
189
93
10,919
(51,451)
11,338
(29,194)
2,198
(463)
1,735
376
$
(20,851) $
1,557 $
(6,412) $
(1,377) $
(27,083)
(1)
See Note 3 for information on the Company’s business dispositions.
For information on offsets to investments related to policyholder liabilities, DAC, VOBA and DSI, see “— Net
Unrealized Investment Gains (losses).”
280
Table of Contents
16. Equity (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Information regarding amounts reclassified out of each component of AOCI was as follows:
AOCI Components
Net unrealized investment gains (losses):
Net unrealized investment gains (losses)
Net unrealized investment gains (losses)
Net unrealized investment gains (losses)
Net unrealized investment gains (losses), before income tax
Income tax (expense) benefit
Net unrealized investment gains (losses), net of income tax
Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate derivatives
Interest rate derivatives
Interest rate derivatives
Foreign currency exchange rate derivatives
Foreign currency exchange rate derivatives
Foreign currency exchange rate derivatives
Gains (losses) on cash flow hedges, before income tax
Income tax (expense) benefit
Gains (losses) on cash flow hedges, net of income tax
Defined benefit plans adjustment: (1)
Amortization of net actuarial gains (losses)
Amortization of prior service (costs) credit
Amortization of defined benefit plan items, before income tax
Income tax (expense) benefit
Amortization of defined benefit plan items, net of income tax
Years Ended December 31,
2022
2021
2020
Amounts Reclassified from AOCI
(In millions)
Consolidated Statements of
Operations Locations
$
(1,802) $
72 $
362 Net investment gains (losses)
7
188
(1,607)
368
(1,239)
59
41
4
6
(609)
1
(498)
76
(422)
(104)
11
(93)
19
(74)
(16)
69
125
(29)
96
56
84
3
8
(403)
2
(250)
39
(211)
(120)
29
(91)
17
(74)
(24) Net investment income
19 Net derivative gains (losses)
357
(83)
274
36 Net investment income
121 Net investment gains (losses)
2 Other expenses
4 Net investment income
851 Net investment gains (losses)
2 Other expenses
1,016
(358)
658
(105)
19
(86)
20
(66)
866
Total reclassifications, net of income tax
$
(1,735) $
(189) $
__________________
(1)
These AOCI components are included in the computation of net periodic benefit costs. See Note 18.
281
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
16. Equity (continued)
Net Unrealized Investment Gains (Losses)
Unrealized investment gains (losses) on fixed maturity securities AFS, derivatives and other investments and the effect
on policyholder liabilities, DAC, VOBA and DSI that would result from the realization of the unrealized gains (losses), are
included in net unrealized investment gains (losses) in AOCI.
The components of net unrealized investment gains (losses), included in AOCI, were as follows:
Years Ended December 31,
2022
2021
2020
(In millions)
$
(29,262) $
1,976
549
(26,737)
29,461 $
2,061
389
31,911
44,415
1,924
267
46,606
(1,487)
4,034
2,547
4,914
(19,276)
(18)
(19,294) $
(4,978)
(3,208)
(8,186)
(6,031)
17,694
(23)
17,671 $
(10,797)
(4,050)
(14,847)
(8,009)
23,750
(20)
23,730
Fixed maturity securities AFS
Derivatives
Other
Subtotal
Amounts allocated from:
Policyholder liabilities (1)
DAC, VOBA and DSI
Subtotal
Deferred income tax benefit (expense)
Net unrealized investment gains (losses)
Net unrealized investment gains (losses) attributable to noncontrolling interests
Net unrealized investment gains (losses) attributable to MetLife, Inc.
$
__________________
(1)
Includes unearned revenue liabilities.
282
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
17. Other Revenues and Other Expenses
Other Revenues
Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:
Vision fee for service arrangements (1)
Prepaid legal plans
Fee-based investment management
Recordkeeping and administrative services (2)
Administrative services-only contracts
Other revenue from service contracts from customers
Total revenues from service contracts from customers
Other
Total other revenues
__________________
Years Ended December 31,
2022
2021
(In millions)
2020
$
$
566 $
471
396
168
238
271
2,110
524
2,634 $
546 $
432
363
213
231
289
2,074
545
2,619 $
—
395
318
196
218
227
1,354
495
1,849
(1)
(2)
For information regarding the Company’s acquisition of Versant Health, see Note 3.
Related to products and businesses no longer actively marketed by the Company.
Receivables related to revenues from service contracts from customers were $226 million and $235 million as of
December 31, 2022 and 2021, respectively.
Other Expenses
Information on other expenses was as follows:
Employee related costs (1)
Third party staffing costs
General and administrative expenses
Pension, postretirement and postemployment benefit costs
Premium taxes, other taxes, and licenses & fees
Commissions and other variable expenses
Capitalization of DAC
Amortization of DAC and VOBA
Amortization of negative VOBA
Interest expense on debt
Total other expenses
__________________
2022
Years Ended December 31,
2021
(In millions)
2020
$
$
3,520 $
1,573
700
98
608
5,265
(2,558)
1,931
(41)
938
12,034 $
3,515 $
1,423
686
147
629
5,463
(2,718)
2,555
(34)
920
12,586 $
3,514
1,335
761
165
764
5,596
(3,013)
3,160
(45)
913
13,150
(1)
Includes $93 million, ($144) million and ($147) million for the years ended December 31, 2022, 2021 and 2020,
respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of
premiums paid.
Capitalization of DAC and Amortization of DAC and VOBA
See Note 5 for additional information on DAC and VOBA including impacts of capitalization and amortization. See
also Note 7 for a description of the DAC amortization impact associated with the closed block.
283
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
17. Other Revenues and Other Expenses (continued)
Expenses related to Debt
See Notes 13, 14, and 15 for attribution of interest expense by debt issuance and other expenses related to debt
transactions.
18. Employee Benefit Plans
Pension and Other Postretirement Benefit Plans
Certain subsidiaries of MetLife, Inc. sponsor a U.S. qualified and various U.S. and non-U.S. nonqualified defined benefit
pension plans covering employees who meet specified eligibility requirements. U.S. pension benefits are provided utilizing
either a traditional formula or cash balance formula. The traditional formula provides benefits that are primarily based upon
years of credited service and final average earnings. The cash balance formula utilizes hypothetical or notional accounts
which credit participants with benefits equal to a percentage of eligible pay, as well as interest credits, determined annually
based upon the annual rate of interest on 30-year U.S. Treasury securities, for each account balance. In September 2018, the
U.S. qualified and nonqualified defined benefit pension plans were amended, effective January 1, 2023, to provide benefits
accruals for all active participants under the cash balance formula and to cease future accruals under the traditional
formula. The U.S. nonqualified pension plans provide supplemental benefits in excess of limits applicable to a qualified plan.
The non-U.S. pension plans generally provide benefits based upon either years of credited service and earnings preceding
retirement or points earned on job grades and other factors in years of service.
These subsidiaries also provide certain postemployment benefits and certain postretirement medical and life insurance
benefits for U.S. and non-U.S. retired employees. U.S. employees of these subsidiaries who were hired prior to 2003 (or, in
certain cases, rehired during or after 2003) and meet age and service criteria while working for one of the subsidiaries may
become eligible for these other postretirement benefits, at various levels, in accordance with the applicable plans. Virtually all
retirees, or their beneficiaries, contribute a portion of the total costs of postretirement medical benefits. U.S. employees hired
after 2003 are not eligible for any employer subsidy for postretirement medical benefits. In September 2018, the U.S.
postretirement medical and life insurance benefit plans were amended, effective January 1, 2023, to discontinue the accrual of
the employer subsidy credits for eligible employees.
The benefit obligations, funded status and net periodic benefit costs related to these pension and other postretirement
benefits were comprised of the following:
December 31, 2022
December 31, 2021
Pension Benefits
Non-
U.S.
Plans
U.S.
Plans
Total
Other Postretirement
Benefits
Non-
U.S.
Plans
U.S.
Plans
Total
Pension Benefits
Non-
U.S.
Plans
U.S.
Plans
Total
Other Postretirement
Benefits
Non-
U.S.
Plans
U.S.
Plans
Total
Benefit
obligations $ 8,425 $ 873 $ 9,298 $ 758 $
36 $ 794 $ 11,086 $ 1,096 $ 12,182 $ 1,099 $
39 $ 1,138
(In millions)
Estimated fair
value of
plan assets
Over (under)
funded
status
Net periodic
benefit
costs
7,831
463
8,294
1,277
26
1,303
10,392
579
10,971
1,417
26
1,443
$ (594) $ (410) $ (1,004) $ 519 $
(10) $ 509 $ (694) $ (517) $ (1,211) $ 318 $
(13) $ 305
$
49 $
73 $ 122 $
(43) $
1 $
(42) $
97 $
97 $ 194 $
(55) $
2 $
(53)
284
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
Obligations and Funded Status
Change in benefit obligations:
Benefit obligations at January 1,
Service costs
Interest costs
Plan participants’ contributions
Plan amendments
Net actuarial (gains) losses (2)
Acquisition, divestitures, settlements and curtailments
Benefits paid
Effect of foreign currency translation
Benefit obligations at December 31,
Change in plan assets:
Estimated fair value of plan assets at January 1,
Actual return on plan assets
Acquisition, divestitures and settlements
Plan participants’ contributions
Employer contributions
Benefits paid
Effect of foreign currency translation
Estimated fair value of plan assets at December 31,
Over (under) funded status at December 31,
Amounts recognized on the consolidated balance sheets:
Other assets
Other liabilities
Net amount recognized
AOCI:
Net actuarial (gains) losses
Prior service costs (credit)
AOCI, before income tax
Accumulated benefit obligation
__________________
December 31,
2022
2021
Pension
Benefits (1)
Other
Postretirement
Benefits
Pension
Benefits (1)
Other
Postretirement
Benefits
(In millions)
$
12,182 $
1,138 $
12,873 $
1,252
187
328
—
8
(2,609)
(45)
(630)
(123)
9,298
10,971
(2,095)
(38)
—
152
(630)
(66)
8,294
4
34
32
—
(289)
—
(125)
—
794
215
342
—
1
(363)
(111)
(665)
(110)
4
37
32
—
(96)
8
(99)
—
12,182
1,138
1,443
11,256
1,492
(43)
—
32
(3)
(125)
(1)
1,303
310
(35)
—
163
(665)
(58)
10,971
$
$
$
$
$
$
(1,004) $
509 $
(1,211) $
428 $
796 $
640 $
(1,432)
(287)
(1,851)
(1,004) $
509 $
(1,211) $
2,277 $
(498) $
2,416 $
(36)
—
(55)
2,241 $
(498) $
2,361 $
9,185
N/A $
11,934
14
(1)
32
5
(99)
—
1,443
305
788
(483)
305
(332)
—
(332)
N/A
(1)
(2)
Includes nonqualified unfunded plans, for which the aggregate PBO was $1.0 billion and $1.3 billion at
December 31, 2022 and 2021, respectively.
For the year ended December 31, 2022, significant sources of actuarial (gains) losses for pension and other
postretirement benefits include the impact of changes to the financial assumptions, primarily related to an increase in
the discount rate, of ($2.6) billion and ($276) million, respectively, and plan experience of $14 million and
($13) million, respectively. For the year ended December 31, 2021, significant sources of actuarial (gains) losses for
pension and other postretirement benefits include the impact of changes to the financial assumptions of ($389) million
and ($34) million, respectively, demographic assumptions of $0 and ($4) million, respectively, and plan experience of
$26 million and ($58) million, respectively.
285
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
Information for pension plans and other postretirement benefit plans with PBOs and/or accumulated benefit obligations
(“ABO”) or APBO in excess of plan assets was as follows at:
December 31,
2022
2021
2022
2021
2022
2021
PBO Exceeds Estimated
Fair Value
of Plan Assets
ABO Exceeds Estimated
Fair Value
of Plan Assets
APBO Exceeds Estimated
Fair Value
of Plan Assets
(In millions)
Projected benefit obligations
Accumulated benefit obligations
Accumulated postretirement benefit obligations
Estimated fair value of plan assets
$
$
$
1,444 $
1,840 $
1,434 $
1,384 $
1,740 $
1,384 $
N/A
N/A
N/A
10 $
9 $
— $
1,831
1,740
N/A $
— $
N/A
N/A
562 $
276 $
N/A
N/A
813
331
Net Periodic Benefit Costs
The components of net periodic benefit costs and other changes in plan assets and benefit obligations recognized in
OCI were as follows:
Years Ended December 31,
2022
2021
2020
Pension
Benefits
Other
Postretirement
Benefits
Pension
Benefits
Other
Postretirement
Benefits
Pension
Benefits
Other
Postretirement
Benefits
(In millions)
Net periodic benefit costs:
Service costs
Interest costs
Settlement and curtailment (gains)
losses
Expected return on plan assets
Amortization of net actuarial (gains)
losses
Amortization of prior service costs
(credit)
Total net periodic benefit costs
(credit)
Other changes in plan assets and
benefit obligations recognized in
OCI:
Net actuarial (gains) losses
Prior service costs (credit)
Amortization of net actuarial (gains)
losses
Amortization of prior service costs
(credit)
Settlement and curtailment (gains)
losses
Exchange rate changes
Total recognized in OCI
Total recognized in net periodic
benefit costs and OCI
$
187 $
4 $
215 $
4 $
226 $
328
5
(516)
129
(11)
122
2
8
(129)
11
(5)
(7)
34
—
(55)
(25)
—
(42)
(191)
—
25
—
—
—
(120)
(166)
342
(7)
(506)
162
(12)
194
(166)
1
(162)
12
(10)
(8)
(333)
37
1
(56)
(39)
—
(53)
(54)
(1)
39
—
10
—
(6)
363
10
(528)
189
(14)
246
(35)
—
(189)
14
(10)
5
(215)
5
42
—
(62)
(74)
(3)
(92)
(42)
—
74
3
—
—
35
$
2 $
(208) $
(139) $
(59) $
31 $
(57)
286
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
Assumptions
Assumptions used in determining benefit obligations for the U.S. plans were as follows:
December 31, 2022
Weighted average discount rate
Weighted average interest crediting rate
Rate of compensation increase
December 31, 2021
Weighted average discount rate
Weighted average interest crediting rate
Rate of compensation increase
Pension Benefits
Other Postretirement Benefits
5.60%
4.00%
2.50% -
8.00%
2.95%
3.18%
2.50% -
8.00%
5.70%
N/A
N/A
3.05%
N/A
N/A
Assumptions used in determining net periodic benefit costs for the U.S. plans were as follows:
Pension Benefits
Other Postretirement Benefits
Year Ended December 31, 2022
Weighted average discount rate
Weighted average interest crediting rate
Weighted average expected rate of return on plan assets
Rate of compensation increase
Year Ended December 31, 2021
Weighted average discount rate
Weighted average interest crediting rate
Weighted average expected rate of return on plan assets
Rate of compensation increase
Year Ended December 31, 2020
Weighted average discount rate
Weighted average interest crediting rate
Weighted average expected rate of return on plan assets
Rate of compensation increase
2.95%
3.43%
5.00%
2.50% -
8.00%
3.01%
3.24%
5.00%
2.50% -
8.00%
3.30%
3.38%
5.50%
2.25% -
8.50%
3.05%
N/A
3.86%
N/A
3.14%
N/A
3.87%
N/A
3.45%
N/A
4.31%
N/A
The weighted average discount rate for the U.S. plans is determined annually based on the yield, measured on a yield
to worst basis, of a hypothetical portfolio constructed of high quality debt instruments available on the measurement date,
which would provide the necessary future cash flows to pay the aggregate PBO when due.
The weighted average expected rate of return on plan assets for the U.S. plans is based on anticipated performance of
the various asset sectors in which the plans invest, weighted by target allocation percentages. Anticipated future
performance is based on long-term historical returns of the plan assets by sector, adjusted for the long-term expectations on
the performance of the markets. While the precise expected rate of return derived using this approach will fluctuate from
year to year, the policy is to hold this long-term assumption constant as long as it remains within reasonable tolerance from
the derived rate.
The weighted average expected rate of return on plan assets for use in that plan’s valuation in 2023 is currently
anticipated to be 6.25% for U.S. pension benefits and 4.25% for U.S. other postretirement benefits.
The weighted average interest crediting rate is determined annually based on the plan selected rate, long-term financial
forecasts of that rate and the demographics of the plan participants.
287
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
The assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:
Following year
Ultimate rate to which cost increase is assumed to decline
Year in which the ultimate trend rate is reached
Plan Assets
December 31,
2022
2021
Before
Age 65
Age 65 and
older
Before
Age 65
Age 65 and
older
5.2 %
3.7 %
2074
3.9%
4.5%
2100
5.1 %
3.7 %
2074
3.3 %
3.8 %
2074
Certain U.S. subsidiaries provide employees with benefits under various Employee Retirement Income Security Act of
1974 (“ERISA”) benefit plans. These include qualified pension plans, postretirement medical plans and certain retiree life
insurance coverage. The assets of these U.S. subsidiaries’ qualified pension plans are held in an insurance group annuity
contract, and the vast majority of the assets of the postretirement medical plan are held in a trust which largely utilizes
insurance contracts to hold the assets. All of these contracts are issued by the Company’s insurance affiliates, and the assets
under the contracts are held in insurance separate accounts that have been established by the Company. The underlying
assets of the separate accounts are principally comprised of cash and cash equivalents, short-term investments, fixed
maturity securities AFS, equity securities, derivatives, real estate and private equity investments. The assets backing the
retiree life coverage also utilize insurance contracts issued by the Company’s insurance affiliate and are held in a general
account Life Insurance Funding Agreement.
The insurance contract provider engages investment management firms (“Managers”) to serve as sub-advisors for the
separate accounts based on the specific investment needs and requests identified by the plan fiduciary. These Managers
have portfolio management discretion over the purchasing and selling of securities and other investment assets pursuant to
the respective investment management agreements and guidelines established for each insurance separate account. The
assets of the qualified pension plans and postretirement medical plans (the “Invested Plans”) are well diversified across
multiple asset categories and across a number of different Managers, with the intent of minimizing risk concentrations
within any given asset category or with any of the given Managers.
The Invested Plans, other than those held in participant directed investment accounts, are managed in accordance with
investment policies consistent with the longer-term nature of related benefit obligations and within prudent risk parameters.
Specifically, investment policies are oriented toward (i) maximizing the Invested Plan’s funded status; (ii) minimizing the
volatility of the Invested Plan’s funded status; (iii) generating asset returns that exceed liability increases; and (iv) targeting
rates of return in excess of a custom benchmark and industry standards over appropriate reference time periods. These
goals are expected to be met through identifying appropriate and diversified asset classes and allocations, ensuring
adequate liquidity to pay benefits and expenses when due and controlling the costs of administering and managing the
Invested Plan’s investments. Independent investment consultants are periodically used to evaluate the investment risk of
the Invested Plan’s assets relative to liabilities, analyze the economic and portfolio impact of various asset allocations and
management strategies and recommend asset allocations.
Derivative contracts may be used to reduce investment risk, to manage duration and to replicate the risk/return profile
of an asset or asset class. Derivatives may not be used to leverage a portfolio in any manner, such as to magnify exposure
to an asset, asset class, interest rates or any other financial variable. Derivatives are also prohibited for use in creating
exposures to securities, currencies, indices or any other financial variable that is otherwise restricted.
288
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
The table below summarizes the actual weighted average allocation of the estimated fair value of total plan assets by
asset class at December 31 for the years indicated and the approved target allocation by major asset class at
December 31, 2022 for the Invested Plans:
December 31,
2022
2021
U.S. Pension
Benefits
U.S. Other
Postretirement
Benefits (1)
Target
Actual
Allocation
Target
Actual
Allocation
U.S. Pension
Benefits
Actual
Allocation
U.S. Other
Postretirement
Benefits (1)
Actual
Allocation
85 %
7 %
8 %
83 %
6 %
11 %
100 %
95 %
5 %
— %
96 %
4 %
— %
100 %
84 %
7 %
9 %
100 %
95 %
5 %
— %
100 %
Asset Class
Fixed maturity securities AFS
Equity securities (2)
Alternative securities (3)
Total assets
__________________
(1)
(2)
(3)
U.S. other postretirement benefits do not reflect postretirement life’s plan assets invested in fixed maturity securities
AFS.
Equity securities percentage includes derivative assets.
Alternative securities primarily include private equity and real estate funds.
Estimated Fair Value
The pension and other postretirement benefit plan assets are categorized into a three-level fair value hierarchy, as
described in Note 10, based upon the significant input with the lowest level in its valuation. The Level 2 asset category
includes certain separate accounts that are primarily invested in liquid and readily marketable securities. The estimated fair
value of such separate accounts is based upon reported NAV provided by fund managers and this value represents the
amount at which transfers into and out of the respective separate account are effected. These separate accounts provide
reasonable levels of price transparency and can be corroborated through observable market data. Directly held investments
are primarily invested in U.S. and foreign government and corporate securities. The Level 3 asset category includes
separate accounts that are invested in assets that provide little or no price transparency due to the infrequency with which
the underlying assets trade and generally require additional time to liquidate in an orderly manner. Accordingly, the values
for separate accounts invested in these alternative asset classes are based on inputs that cannot be readily derived from or
corroborated by observable market data.
289
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
The pension and other postretirement plan assets measured at estimated fair value on a recurring basis and their
corresponding placement in the fair value hierarchy are summarized as follows:
December 31, 2022
Pension Benefits
Fair Value Hierarchy
Other Postretirement Benefits
Fair Value Hierarchy
Level 1
Level 2
Level 3
Total
Estimated
Fair Value
Level 1
Level 2
Level 3
Total
Estimated
Fair Value
(In millions)
$
— $
2,946 $
55 $
3,001 $
— $
205 $
— $
205
1,462
—
87
—
12
92
1,653
416
40
21
45
769
190
159
384
598
5,091
151
1
1
—
—
—
—
—
3
58
3
855
4
1,507
769
277
159
396
693
6,802
570
896
26
68
—
3
—
463
8
542
47
—
—
—
61
1
15
396
36
714
—
—
—
—
—
—
—
—
—
—
—
—
—
68
61
4
15
859
44
1,256
47
—
—
$
2,130 $
5,244 $
920 $
8,294 $
589 $
714 $
— $
1,303
December 31, 2021
Pension Benefits
Fair Value Hierarchy
Other Postretirement Benefits
Fair Value Hierarchy
Level 1
Level 2
Level 3
Total
Estimated
Fair Value
Level 1
Level 2
Level 3
Total
Estimated
Fair Value
(In millions)
$
— $
4,305 $
— $
4,305 $
— $
222 $
— $
222
1,824
—
—
—
142
155
2,121
601
42
14
80
1,115
83
248
484
627
6,942
283
1
—
—
1
—
—
—
1
2
11
954
—
1,904
1,116
83
248
626
783
9,065
895
997
14
69
—
—
—
486
14
569
55
1
—
—
51
10
8
482
45
818
—
—
—
—
—
—
—
—
—
—
—
—
—
69
51
10
8
968
59
1,387
55
1
—
$
2,778 $
7,226 $
967 $ 10,971 $
625 $
818 $
— $
1,443
Assets
Fixed maturity securities AFS:
Corporate
U.S. government bonds
Foreign bonds
Federal agencies
Municipals
Short-term investments
Other (1)
Total fixed maturity securities
AFS
Equity securities
Other investments
Derivative assets
Total assets
Assets
Fixed maturity securities AFS:
Corporate
U.S. government bonds
Foreign bonds
Federal agencies
Municipals
Short-term investments
Other (1)
Total fixed maturity securities
AFS
Equity securities
Other investments
Derivative assets
Total assets
__________________
290
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
(1)
Other primarily includes money market securities, mortgage-backed securities, collateralized mortgage obligations and
ABS & CLO.
A rollforward of all pension and other postretirement benefit plan assets measured at estimated fair value on a
recurring basis using significant unobservable (Level 3) inputs was as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Fixed Maturity Securities AFS:
Foreign
Bonds
Corporate
Other
Equity
Securities
Other
Investments
Derivative
Assets
Balance, January 1, 2021
Realized gains (losses)
Unrealized gains (losses)
Purchases, sales, issuances and
settlements, net
Transfers into and/or out of Level 3
Balance, December 31, 2021
Realized gains (losses)
Unrealized gains (losses)
Purchases, sales, issuances and
settlements, net
Transfers into and/or out of Level 3
Balance, December 31, 2022
$
$
$
— $
—
—
1
—
1 $
—
—
—
(1)
— $
Expected Future Contributions and Benefit Payments
— $
—
—
—
—
— $
—
(1)
56
—
55 $
(In millions)
— $
—
—
1
—
1 $
—
—
3
(1)
3 $
— $
—
—
11
—
11 $
—
—
(8)
—
3 $
708 $
—
63
183
—
954 $
—
54
(153)
—
855 $
—
—
—
—
—
—
—
1
3
—
4
It is the subsidiaries’ practice to make contributions to the U.S. qualified pension plan to comply with minimum
funding requirements of ERISA. In accordance with such practice, no contributions are expected to be required for 2023.
The subsidiaries do not expect to make any discretionary contributions to the qualified pension plan in 2023. For
information on employer contributions, see “— Obligations and Funded Status.”
Benefit payments due under the U.S. nonqualified pension plans are primarily funded from the subsidiaries’ general
assets as they become due under the provisions of the plans, and therefore benefit payments equal employer contributions.
The U.S. subsidiaries expect to make contributions of $90 million to fund the benefit payments in 2023.
Postretirement benefits are either: (i) not vested under law; (ii) a non-funded obligation of the subsidiaries; or
(iii) both. Current regulations do not require funding for these benefits. The subsidiaries use their general assets, net of
participant’s contributions, to pay postretirement medical claims as they come due. As permitted under the terms of the
governing trust document, the subsidiaries may be reimbursed from plan assets for postretirement medical claims paid from
their general assets. The U.S. subsidiaries expect to make contributions of $20 million towards benefit obligations in 2023
to pay postretirement medical claims.
Gross benefit payments for the next 10 years, which reflect expected future service where appropriate, are expected to
be as follows:
2023
2024
2025
2026
2027
2028-2032
Pension Benefits
Other Postretirement Benefits
(In millions)
713 $
722 $
727 $
742 $
745 $
3,747 $
66
63
62
61
59
279
$
$
$
$
$
$
291
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
18. Employee Benefit Plans (continued)
Defined Contribution Plans
Certain subsidiaries sponsor defined contribution plans under which a portion of employee contributions are matched.
These subsidiaries contributed $46 million, $88 million and $95 million for the years ended December 31, 2022, 2021 and
2020, respectively.
19. Income Tax
The provision for income tax was as follows:
Years Ended December 31,
2022
2021
2020
(In millions)
Current:
U.S. federal
U.S. state and local
Non-U.S.
Subtotal
Deferred:
U.S. federal
U.S. state and local
Non-U.S.
Subtotal
Provision for income tax expense (benefit)
$
159 $
62 $
45
1,074
1,278
536
—
(1,513)
(977)
301 $
$
38
795
895
837
(2)
(179)
656
271
27
882
1,180
(115)
1
443
329
1,551 $
1,509
The Company’s income (loss) before income tax expense (benefit) was as follows:
Income (loss):
U.S.
Non-U.S.
Total
Years Ended December 31,
2022
2021
2020
(In millions)
$
$
2,681 $
178
2,859 $
4,841 $
3,285
8,126 $
2,970
3,957
6,927
292
Table of Contents
19. Income Tax (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported was
as follows:
Tax provision at U.S. statutory rate
Tax effect of:
Dividend received deduction
Tax-exempt income
Prior year tax (1), (2)
Low income housing tax credits
Other tax credits
Foreign tax rate differential (3), (4), (5)
Change in valuation allowance
Other, net
2022
Years Ended December 31,
2021
(In millions)
2020
$
601 $
1,706 $
1,455
(20)
15
(15)
(143)
(44)
(110)
—
17
(40)
(36)
(127)
(178)
(46)
267
1
4
(34)
(45)
(27)
(202)
(45)
414
(5)
(2)
Provision for income tax expense (benefit)
$
301 $
1,551 $
1,509
__________________
(1)
(2)
(3)
(4)
(5)
As discussed further below, prior year tax primarily includes non-cash benefits related to uncertain tax positions of
$32 million and $117 million for the years ended December 31, 2022 and 2021, respectively.
For the year ended December 31, 2020, prior year tax primarily includes a $40 million tax benefit related to an Internal
Revenue Service (“IRS”) audit matter.
For the year ended December 31, 2022, foreign tax rate differential includes tax charges of $12 million related to the
U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) of which $33 million is a current year charge offset by a
$21 million tax benefit revising the 2021 estimate.
For the year ended December 31, 2021, foreign tax rate differential includes tax charges of $50 million related to the
disposition of MetLife Poland and Greece, $41 million related to the sale of MetLife Seguros and $30 million related
to the U.S. tax on GILTI, which included a $42 million 2021 charge offset by a $12 million tax benefit revising the
2020 estimate. See Note 3 for information on the Company’s business dispositions.
For the year ended December 31, 2020, foreign tax rate differential includes tax charges of $60 million and
$24 million related to the sales of MetLife Seguros de Retiro and MetLife Russia, respectively, and $43 million related
to the U.S. tax on GILTI. See Note 3 for information on the Company’s business dispositions.
293
Table of Contents
19. Income Tax (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities.
Net deferred income tax assets and liabilities consisted of the following at:
Deferred income tax assets:
Policyholder liabilities and receivables
Net operating loss carryforwards (1)
Employee benefits
Capital loss carryforwards
Tax credit carryforwards (2)
Net unrealized investment losses
Litigation-related and government mandated
Other
Total gross deferred income tax assets
Less: Valuation allowance (1)
Total net deferred income tax assets
Deferred income tax liabilities:
Investments, including derivatives
Intangibles
Net unrealized investment gains
DAC
Other
Total deferred income tax liabilities
Net deferred income tax asset (liability)
__________________
December 31,
2022
2021
(In millions)
$
1,496 $
3,787
238
475
15
590
5,319
90
67
8,290
291
7,999
1,691
1,096
—
2,707
—
5,494
$
2,505 $
235
583
9
825
—
95
—
5,534
299
5,235
4,167
1,188
5,551
3,471
362
14,739
(9,504)
(1)
(2)
The Company has recorded a deferred tax asset of $238 million related to U.S. state and non-U.S. net operating loss
carryforwards and an offsetting valuation allowance for the year ended December 31, 2022. Certain net operating loss
carryforwards will expire between 2023 and 2042, whereas others have an unlimited carryforward period.
Tax credit carryforwards for the year ended December 31, 2022 primarily reflect general business credits expiring
between 2039 and 2042 and are increased by $44 million related to unrecognized tax benefits.
The Company has not provided for U.S. deferred taxes on the remaining excess of book bases over tax bases of certain
investments in non-U.S. subsidiaries that are essentially permanent in duration. The amount of deferred tax liability related to
the Company’s remaining basis difference in these non-U.S. subsidiaries was $302 million at December 31, 2022.
The Company files income tax returns with the U.S. federal government and various U.S. state and local jurisdictions, as
well as non-U.S. jurisdictions. The Company is under continuous examination by the IRS and other tax authorities in
jurisdictions in which the Company has significant business operations. The income tax years under examination vary by
jurisdiction and subsidiary. The Company is no longer subject to U.S. federal, state, or local income tax examinations for
years prior to 2017. In material non-U.S. jurisdictions, the Company is no longer subject to income tax examinations for
years prior to 2015.
In 2021, the Company filed amended Federal income tax returns with the IRS for MetLife, Inc. and subsidiaries for tax
years 2014 through 2016. In 2022, the IRS reviewed and acknowledged acceptance of the 2014 through 2016 amended
Federal income tax returns and closed the years to further audit. Accordingly, in 2022, the Company recorded a non-cash
294
Table of Contents
19. Income Tax (continued)
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
benefit to net income of $70 million, net of tax, comprised of a $67 million tax benefit recorded in provision for income tax
expense (benefit) and a $4 million interest benefit ($3 million, net of tax) included in other expenses.
In 2021, the Company filed amended Federal income tax returns with the IRS for MetLife, Inc. and subsidiaries for tax
years 2010 through 2013. In 2021, the IRS reviewed and acknowledged acceptance of the 2010 through 2013 amended
Federal income tax returns and closed the years to further audit. Accordingly, in 2021, the Company recorded a non-cash
benefit to net income of $53 million in provision for income tax expense (benefit). In addition, in 2021, the IRS concluded its
Federal income tax audit of American Life for tax years 2010 through 2013. Accordingly, in 2021, the Company recorded a
non-cash benefit to net income of $42 million, net of tax, comprised of a $34 million tax benefit recorded in provision for
income tax expense (benefit) and a $10 million interest benefit ($8 million, net of tax) included in other expenses.
The Company filed refund claims in 2017 with the IRS for 2000 through 2002 to recover tax and interest predominantly
related to the disallowance of certain foreign tax credits for which the Company received a statutory notice of deficiency in
2015 and paid the tax thereon. The disallowed foreign tax credits relate to certain non-U.S. investments held by MLIC in
support of its life insurance business through a U.K. investment subsidiary that was structured as a joint venture until early
2009. In 2020, the Company received refunds from these claims filed in 2017, and as a result, the Company recorded a
$28 million interest benefit ($22 million, net of tax) included in other expenses.
The Company’s overall liability for unrecognized tax benefits may increase or decrease in the next 12 months. For
example, U.S. federal tax legislation and regulation could impact unrecognized tax benefits. A reasonable estimate of the
increase or decrease cannot be made at this time. However, the Company continues to believe that the ultimate resolution of
the pending issues will not result in a material change to its consolidated financial statements, although the resolution of
income tax matters could impact the Company’s effective tax rate for a particular future period.
A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
Balance at January 1,
Additions for tax positions of prior years
Reductions for tax positions of prior years (1)
Additions for tax positions of current year
Reductions for tax positions of current year
Settlements with tax authorities
Lapses of statute of limitations
Balance at December 31,
Unrecognized tax benefits that, if recognized, would impact the effective
rate
__________________
2022
Years Ended December 31,
2021
(In millions)
2020
$
163 $
42
(93)
22
(3)
(2)
—
272 $
19
(112)
5
(18)
(3)
—
$
$
129 $
163 $
80 $
103 $
256
16
(1)
12
—
(1)
(10)
272
203
(1)
The decreases in 2022 and 2021 are primarily related to non-cash benefits from tax audit settlements.
The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other
expenses.
295
Table of Contents
19. Income Tax (continued)
Interest was as follows:
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
Interest expense (benefit) recognized on the consolidated statements of
operations (1)
$
— $
(36) $
12
Years Ended December 31,
2022
2021
2020
(In millions)
December 31,
2022
2021
(In millions)
Interest included in other liabilities on the consolidated balance sheets
$
15 $
15
__________________
(1)
For the year ended December 31, 2021, the interest benefit is primarily related to a tax audit settlement of $10 million
which was recorded in other expenses and a reclassification of $26 million to current income tax payable.
20. Earnings Per Common Share
The following table presents the weighted average shares, basic earnings per common share and diluted earnings per
common share:
Weighted Average Shares:
Weighted average common stock outstanding - basic
Incremental common shares from assumed exercise or issuance of stock-
based awards
Weighted average common stock outstanding - diluted
Net Income (Loss):
Net income (loss)
Less: Net income (loss) attributable to noncontrolling interests
Less: Preferred stock dividends
Preferred stock redemption premium
Net income (loss) available to MetLife, Inc.’s common shareholders
Basic
Diluted
21. Contingencies, Commitments and Guarantees
Contingencies
Litigation
Years Ended December 31,
2022
2021
2020
(In millions, except per share data)
803.2
5.7
808.9
2,558 $
19
185
—
2,354 $
2.93 $
2.91 $
862.7
6.7
869.4
6,575 $
21
195
6
6,353 $
7.36 $
7.31 $
$
$
$
$
907.8
5.4
913.2
5,418
11
202
14
5,191
5.72
5.68
The Company is a defendant in a large number of litigation matters. Putative or certified class action litigation and
other litigation and claims and assessments against the Company, in addition to those discussed below and those otherwise
provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business,
including, but not limited to, in connection with its activities as an insurer, mortgage lending bank, employer, investor,
investment advisor, broker-dealer, and taxpayer.
296
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
21. Contingencies, Commitments and Guarantees (continued)
The Company also receives and responds to subpoenas or other inquiries seeking a broad range of information from
state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities;
federal regulators, including the U.S. Securities and Exchange Commission; federal governmental authorities, including
congressional committees; and the Financial Industry Regulatory Authority, as well as from local and national regulators
and government authorities in jurisdictions outside the United States where the Company conducts business. The issues
involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning
the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these
inquiries.
It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. The Company
establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and
the amount of the loss can be reasonably estimated. In certain circumstances where liabilities have been established there
may be coverage under one or more corporate insurance policies, pursuant to which there may be an insurance recovery.
Insurance recoveries are recognized as gains when any contingencies relating to the insurance claim have been resolved,
which is the earlier of when the gains are realized or realizable. It is possible that some of the matters could require the
Company to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably
estimated at December 31, 2022. While the potential future charges could be material in the particular quarterly or annual
periods in which they are recorded, based on information currently known to management, management does not believe
any such charges are likely to have a material effect on the Company’s financial position. Given the large and/or
indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an
adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net
income or cash flows in particular quarterly or annual periods.
Matters as to Which an Estimate Can Be Made
For some matters, the Company is able to estimate a reasonably possible range of loss. For matters where a loss is
believed to be reasonably possible, but not probable, the Company has not made an accrual. As of December 31, 2022, the
Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be
$0 to $125 million.
Matters as to Which an Estimate Cannot Be Made
For other matters, the Company is not currently able to estimate the reasonably possible loss or range of loss. The
Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided
sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand
from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or
appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company
reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of
reasonably possible losses or ranges of loss based on such reviews.
Asbestos-Related Claims
MLIC is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits
principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both
actual and punitive damages. MLIC has never engaged in the business of manufacturing or selling asbestos-containing
products, nor has MLIC issued liability or workers’ compensation insurance to companies in the business of manufacturing
or selling asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain
research, publication and other activities of one or more of MLIC’s employees during the period from the 1920s through
approximately the 1950s and allege that MLIC learned or should have learned of certain health risks posed by asbestos and,
among other things, improperly publicized or failed to disclose those health risks. MLIC believes that it should not have
legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by
numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and
factors unrelated to the ultimate legal merit of the claims asserted against MLIC.
297
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
21. Contingencies, Commitments and Guarantees (continued)
MLIC’s defenses include that: (i) MLIC owed no duty to the plaintiffs; (ii) plaintiffs did not rely on any actions of
MLIC; (iii) MLIC’s conduct was not the cause of the plaintiffs’ injuries; and (iv) plaintiffs’ exposure occurred after the
dangers of asbestos were known. During the course of the litigation, certain trial courts have granted motions dismissing
claims against MLIC, while other trial courts have denied MLIC’s motions. There can be no assurance that MLIC will
receive favorable decisions on motions in the future. While most cases brought to date have settled, MLIC intends to
continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials.
The approximate total number of asbestos personal injury claims pending against MLIC as of the dates indicated, the
approximate number of new claims during the years ended on those dates and the approximate total settlement payments
made to resolve asbestos personal injury claims at or during those years are set forth in the following table:
2022
December 31,
2021
(In millions, except number of claims)
2020
Asbestos personal injury claims at year end
Number of new claims during the year
Settlement payments during the year (1)
__________________
58,073
2,610
58,785
2,824
$
50.5 $
53.0 $
60,618
2,496
52.9
(1)
Settlement payments represent payments made by MLIC during the year in connection with settlements made in that
year and in prior years. Amounts do not include MLIC’s attorneys’ fees and expenses.
The number of asbestos cases that may be brought, the aggregate amount of any liability that MLIC may incur, and the
total amount paid in settlements in any given year are uncertain and may vary significantly from year to year.
The ability of MLIC to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the
conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is
difficult to predict the numerous variables that can affect liability estimates, including the number of future claims, the cost
to resolve claims, the disease mix and severity of disease in pending and future claims, the willingness of courts to allow
plaintiffs to pursue claims against MLIC 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.
The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to
years further in the future. In the Company’s judgment, there is a future point after which losses cease to be probable and
reasonably estimable. It is reasonably possible that the Company’s total exposure to asbestos claims may be materially
greater than the asbestos liability currently accrued and that future charges to income may be necessary, but management
does not believe any such charges are likely to have a material effect on the Company’s financial position.
The Company believes adequate provision has been made in its consolidated financial statements for all probable and
reasonably estimable losses for asbestos-related claims. MLIC’s recorded asbestos liability covers pending claims, claims
not yet asserted, and legal defense costs and is based on estimates and includes significant assumptions underlying its
analysis.
MLIC reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims
experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant
trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an
overall or per claim basis. Based upon its regular reevaluation of its exposure from asbestos litigation, MLIC has updated
its recorded liability for asbestos-related claims to $320 million at December 31, 2022. The recorded liability was $372
million at December 31, 2021.
298
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
21. Contingencies, Commitments and Guarantees (continued)
Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New
York, filed December 27, 2017)
Total Asset Recovery Services (the “Relator”) brought an action under the qui tam provision of the New York False
Claims Act (the “Act”) on behalf of itself and the State of New York. The Relator originally filed this action under seal in
2010, and the complaint was unsealed on December 19, 2017. The Relator alleges that MetLife, Inc., MLIC, and several
other insurance companies violated the Act by filing false unclaimed property reports with the State of New York from
1986 to 2017, to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for
which the defendants escheated funds as part of their demutualizations in the late 1990s. The Relator seeks treble damages
and other relief. The Appellate Division of the New York State Supreme Court, First Department, reversed the court’s
order granting MetLife, Inc. and MLIC’s motion to dismiss and remanded the case to the trial court where the Relator has
filed an amended complaint. The Company intends to defend the action vigorously.
Matters Related to Group Annuity Benefits and Assumed Variable Annuity Guarantee Reserves
In 2018, the Company announced that it identified two material weaknesses in its internal control over financial
reporting related to the practices and procedures for estimating reserves for certain group annuity benefits and the
calculation of reserves associated with certain variable annuity guarantees assumed from the former operating joint venture
in Japan. Several regulators have made inquiries into these issues and it is possible that other jurisdictions may pursue
similar investigations or inquiries. The Company could be exposed to lawsuits and additional legal actions relating to these
issues. These may result in payments, including damages, fines, penalties, interest and other amounts assessed or awarded
by courts or regulatory authorities under applicable escheat, tax, securities, ERISA, or other laws or regulations. The
Company could incur significant costs in connection with these actions.
Commitments
Mortgage Loan Commitments
The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan
commitments were $3.4 billion and $4.6 billion at December 31, 2022 and 2021, respectively.
Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond
Investments
The Company commits to fund partnership investments and to lend funds under bank credit facilities, bridge loans and
private corporate bond investments. The amounts of these unfunded commitments were $9.4 billion and $9.1 billion at
December 31, 2022 and 2021, respectively.
Guarantees
In the normal course of its business, the Company has provided certain indemnities and guarantees to third parties such
that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other
transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other
specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations,
warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides
indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities,
such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual
limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum
potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than
$1 million to $329 million, with a cumulative maximum of $634 million, while in other cases such limitations are not
specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it
is possible to determine the maximum potential amount that could become due under these guarantees in the future.
Management believes that it is unlikely the Company will have to make any material payments under these indemnities or
guarantees.
In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the
Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since
these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe
that it is possible to determine the maximum potential amount that could become due under these indemnities in the future.
299
Table of Contents
MetLife, Inc.
Notes to the Consolidated Financial Statements — (continued)
21. Contingencies, Commitments and Guarantees (continued)
The Company also has minimum fund yield requirements on certain pension funds. Since these guarantees are not
subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the
maximum potential amount that could become due under these guarantees in the future.
The Company’s recorded liabilities were $20 million at both December 31, 2022 and 2021, for indemnities and
guarantees.
22. Subsequent Events
Senior Notes
In February 2023, MetLife, Inc. redeemed for cash and canceled $1.0 billion aggregate principal amount of its
outstanding 4.368% senior notes due September 2023.
In January 2023, MetLife, Inc. issued $1.0 billion of senior notes due January 2054 which bear interest at a fixed rate of
5.250%, payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $11 million of related costs which
will be amortized over the term of the senior notes.
300
Table of Contents
MetLife, Inc.
Schedule I
Consolidated Summary of Investments —
Other Than Investments in Related Parties
December 31, 2022
(In millions)
Types of Investments
Fixed maturity securities AFS:
Bonds:
Foreign government
U.S. government and agency
Public utilities
Municipals
All other corporate bonds
Total bonds
Mortgage-backed, asset-backed and collateralized loan obligations securities
Redeemable preferred stock
Total fixed maturity securities AFS
Unit-linked and FVO Securities
Equity securities:
Common stock:
Industrial, miscellaneous and all other
Banks, trust and insurance companies
Public utilities
Non-redeemable preferred stock
Total equity securities
Mortgage loans
Policy loans
Real estate and real estate joint ventures
Real estate acquired in satisfaction of debt
Other limited partnership interests
Short-term investments
Other invested assets
Total investments
__________________
Cost or
Amortized Cost (1)
Estimated Fair
Value
Amount at
Which Shown on
Balance Sheet
$
50,047 $
46,747 $
32,229
10,717
12,152
120,916
222,761
53,050
969
276,780
9,668
504
1,036
2
142
1,684
35,658
11,476
13,548
135,710
246,439
58,610
976
306,025
9,106
335
1,012
—
148
1,495
84,290
8,874
12,955
182
14,414
4,870
20,064
46,747
32,229
10,717
12,152
120,916
222,761
53,050
969
276,780
9,668
504
1,036
2
142
1,684
83,763
8,874
12,955
182
14,414
4,935
20,038
$
462,275
$
433,293
(1)
Unit-linked and FVO Securities are primarily equity securities (including mutual funds) and fixed maturity securities.
Amortized cost for fixed maturity securities AFS, Unit-linked and FVO Securities, mortgage loans, policy loans and
short-term investments represents original cost reduced by repayments and adjusted for amortization of premium or
accretion of discount; for equity securities, cost represents original cost; for real estate, cost represents original cost
reduced by impairments and depreciation; for real estate joint ventures and other limited partnership interests, cost
represents original cost reduced for impairments and adjusted for equity in earnings and distributions.
301
Table of Contents
MetLife, Inc.
Schedule II
Condensed Financial Information
(Parent Company Only)
December 31, 2022 and 2021
(In millions, except share and per share data)
Condensed Balance Sheets
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $3,877 and
$2,742, respectively)
Other invested assets, at estimated fair value
Total investments
Cash and cash equivalents
Accrued investment income
Investment in subsidiaries
Loans to subsidiaries
Other assets
Total assets
Liabilities and Stockholders’ Equity
Liabilities
Payables for collateral under derivatives transactions
Long-term debt — unaffiliated
Long-term debt — affiliated
Junior subordinated debt securities
Other liabilities
Total liabilities
Stockholders’ Equity
Preferred stock, par value $0.01 per share; $3,905 aggregate liquidation preference
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,189,831,471 and
1,186,540,473 shares issued, respectively; 779,098,414 and 825,540,267 shares outstanding,
respectively
Additional paid-in capital
Retained earnings
Treasury stock, at cost; 410,733,057 and 361,000,206 shares, respectively
Accumulated other comprehensive income (loss)
Total stockholders’ equity
Total liabilities and stockholders’ equity
2022
2021
$
3,729 $
376
4,105
1,290
20
39,895
95
724
2,745
314
3,059
1,961
4
80,165
35
798
46,129 $
86,022
$
$
154 $
13,588
1,676
2,465
1,206
19,089
—
12
33,616
41,953
(21,458)
(27,083)
27,040
153
12,814
1,884
2,463
1,226
18,540
—
12
33,511
41,197
(18,157)
10,919
67,482
86,022
$
46,129 $
See accompanying notes to the condensed financial information.
302
Table of Contents
MetLife, Inc.
Schedule II
Condensed Financial Information — (continued)
(Parent Company Only)
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Condensed Statements of Operations
Revenues
Net investment income
Other revenues
Net investment gains (losses)
Net derivative gains (losses)
Total revenues
Expenses
Interest expense
Other expenses
Total expenses
Income (loss) before provision for income tax and equity in earnings of
subsidiaries
Provision for income tax (expense) benefit
Equity in earnings of subsidiaries
Net income (loss)
Less: Preferred stock dividends
Preferred stock redemption premium
Net income (loss) available to common shareholders
Comprehensive income (loss)
2022
2021
2020
$
58 $
25 $
17
332
129
536
829
79
908
(372)
37
2,874
2,539
185
—
19
1,655
116
1,815
847
207
1,054
761
(202)
5,995
6,554
195
6
$
$
2,354 $
(35,463) $
6,353 $
(599) $
50
29
(154)
(61)
(136)
833
154
987
(1,123)
267
6,263
5,407
202
14
5,191
10,427
See accompanying notes to the condensed financial information.
303
Table of Contents
MetLife, Inc.
Schedule II
Condensed Financial Information — (continued)
(Parent Company Only)
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Condensed Statements of Cash Flows
Cash flows from operating activities
Net income (loss)
Earnings of subsidiaries
Dividends from subsidiaries
(Gains) losses on investments and from sales of businesses, net
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities
Sales and maturities of fixed maturity securities available-for-sale
Purchases of fixed maturity securities available-for-sale
Cash received in connection with freestanding derivatives
Cash paid in connection with freestanding derivatives
Sales of businesses
Purchases of businesses
Expense paid on behalf of subsidiaries
Receipts on loans to subsidiaries
Issuances of loans to subsidiaries
Returns of capital from subsidiaries
Capital contributions to subsidiaries
Net change in short-term investments
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net change in payables for collateral under derivative transactions
Long-term debt issued
Long-term debt repaid
Treasury stock acquired in connection with share repurchases
Preferred stock issued, net of issuance costs
Redemption of preferred stock
Preferred stock redemption premium
Dividends on preferred stock
Dividends on common stock
Other, net
Net cash provided by (used in) financing activities
Change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
2022
2021
2020
$
2,539 $
6,554 $
(2,874)
5,168
(332)
(73)
4,428
1,609
(2,757)
296
(103)
—
—
(10)
150
(210)
8
(5)
—
15
(5,995)
4,830
(1,655)
23
3,757
5,078
(4,371)
111
(27)
3,902
—
(15)
195
(230)
13
(88)
156
9
5,407
(6,263)
3,970
154
211
3,479
3,693
(3,858)
71
(100)
—
(1,875)
(15)
100
—
16
(422)
4
(2)
(1,007)
4,733
(2,388)
1
1,000
—
(3,326)
—
—
—
(185)
(1,598)
16
(4,092)
(671)
1,961
88
496
(996)
(4,303)
—
(494)
(6)
(195)
(1,647)
87
(6,970)
1,520
441
$
1,290 $
1,961 $
49
1,246
(251)
(1,151)
1,961
(989)
(14)
(202)
(1,657)
(19)
(1,027)
64
377
441
304
Table of Contents
MetLife, Inc.
Schedule II
Condensed Financial Information — (continued)
(Parent Company Only)
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Supplemental disclosures of cash flow information
Net cash paid (received) for:
Interest
Income tax:
Amounts paid to (received from) subsidiaries, net
Income tax paid (received) by MetLife, Inc., net
Total income tax, net
Non-cash transactions:
Dividends from subsidiary
Returns of capital from subsidiaries
Capital contributions to subsidiaries
2022
2021
2020
$
$
$
$
$
$
800 $
853 $
815
(214) $
85
(129) $
— $
12 $
11 $
(110) $
128
18 $
14 $
7 $
15 $
(392)
96
(296)
341
13
1
305
Table of Contents
MetLife, Inc.
Schedule II
Notes to the Condensed Financial Information
(Parent Company Only)
1. Basis of Presentation
The condensed financial information of MetLife, Inc. (parent company only) should be read in conjunction with the
consolidated financial statements of MetLife, Inc. and its subsidiaries and the notes thereto (the “Consolidated Financial
Statements”). These condensed unconsolidated financial statements reflect the results of operations, financial position and
cash flows for MetLife, Inc. Investments in subsidiaries are accounted for using the equity method of accounting.
The preparation of these condensed unconsolidated financial statements in conformity with GAAP requires management
to adopt accounting policies and make certain estimates and assumptions. The most important of these estimates and
assumptions relate to the fair value measurements, the accounting for goodwill and the provision for potential losses that may
arise from litigation and regulatory proceedings and tax audits, which may affect the amounts reported in the condensed
unconsolidated financial statements and accompanying notes. Actual results could differ from these estimates.
2. Investment in Subsidiaries
In April 2021, MetLife, Inc. received $3.9 billion in cash in connection with the disposition of MetLife P&C.
In December 2020, MetLife, Inc. paid $1.8 billion in cash in connection with the acquisition of Versant Health.
See Note 3 of the Notes to the Consolidated Financial Statements for additional information on acquisitions and
dispositions.
3. Loans to Subsidiaries
MetLife, Inc. lends funds as necessary, through credit agreements or otherwise to its subsidiaries, some of which are
regulated, to meet their capital requirements or to provide liquidity. Payments of interest and principal on surplus notes of
regulated subsidiaries, which are subordinate to all other obligations of the issuing company, may be made only with the prior
approval of the insurance department of the state of domicile.
During 2022 and 2021, under an existing credit facility, MetLife Services and Solutions, LLC issued $150 million and
$195 million, respectively, in short-term notes to MetLife, Inc. which were repaid by September 2022 and August 2021,
respectively. The short-term notes bore interest at six-month LIBOR plus 1.00%.
In December 2022 and 2021, Missouri Reinsurance, Inc. (“MoRe”), issued to MetLife, Inc. a $60 million 5.23%
promissory note and a $35 million 2.12% promissory note, respectively. Both notes are payable semi-annually and mature in
December 2024.
Interest income earned on loans to subsidiaries of $2 million, $1 million and $2 million for the years ended
December 31, 2022, 2021 and 2020, respectively, is included in net investment income.
306
Table of Contents
MetLife, Inc.
Schedule II
Notes to the Condensed Financial Information — (continued)
(Parent Company Only)
4. Long-term Debt
Long-term debt outstanding was as follows:
Senior notes — unaffiliated (2)
Senior notes — affiliated
Total
__________________
Interest Rates (1)
Range
Weighted
Average
December 31,
Maturity
2022
2021
(Dollars in millions)
0.50% - 6.50%
1.59% - 6.56%
4.42%
1.98%
2023
2023
-
-
2052
2031
$ 13,588 $ 12,814
1,676
1,884
$ 15,264 $ 14,698
(1)
(2)
Range of interest rates and weighted average interest rates are for the year ended December 31, 2022.
Net of $83 million and $77 million of unamortized issuance costs and net premiums and discounts at
December 31, 2022 and 2021, respectively.
See Notes 13 and 22 of the Notes to the Consolidated Financial Statements for additional information.
The aggregate maturities of long-term debt at December 31, 2022 for the next five years and thereafter are $1.3 billion in
2023, $1.4 billion in 2024, $1.2 billion in 2025, $508 million in 2026, $0 in 2027 and $10.8 billion thereafter.
Senior Notes – Affiliated
In December 2021, ¥54.6 billion 3.1350% senior unsecured notes issued to various subsidiaries matured and were
refinanced with the following senior unsecured notes issued to various subsidiaries: (i) ¥12.2 billion 1.588% due December
2026, (ii) ¥19.1 billion 1.7185% due December 2028 and (iii) ¥23.3 billion 1.850% due December 2031.
In July 2021, ¥53.7 billion 2.9725% senior unsecured notes issued to various subsidiaries matured and were refinanced
with the following senior unsecured notes issued to various subsidiaries: (i) ¥13.7 billion 1.610% due July 2026, (ii)
¥14.3 billion 1.755% due July 2028 and (iii) ¥25.7 billion 1.852% due July 2031.
In June 2020, MetLife, Inc. issued a new $250 million senior unsecured floating rate note to MetLife Insurance K.K. The
senior unsecured floating rate note matures in June 2025 and bears interest at a variable rate of three-month LIBOR plus
1.82%, payable quarterly.
Interest Expense
Interest expense was comprised of the following:
Long-term debt — unaffiliated
Long-term debt — affiliated
Collateral financing arrangements
Junior subordinated debt securities
Total
2022
Years Ended December 31,
2021
(In millions)
2020
$
583 $
590 $
37
4
205
47
5
205
$
829 $
847 $
570
52
6
205
833
See Notes 14 and 15 of the Notes to the Consolidated Financial Statements for information on the collateral financing
arrangement and junior subordinated debt securities.
307
Table of Contents
MetLife, Inc.
Schedule II
Notes to the Condensed Financial Information — (continued)
(Parent Company Only)
5. Support Agreements
MetLife, Inc. is party to various capital support commitments and guarantees with certain of its subsidiaries. Under these
arrangements, MetLife, Inc. has agreed to cause each such entity to meet specified capital and surplus levels or has
guaranteed certain contractual obligations.
MetLife, Inc. guarantees the obligations of MoRe, under a retrocession agreement with RGA Reinsurance (Barbados)
Inc., pursuant to which MoRe retrocedes a portion of the closed block liabilities associated with industrial life and ordinary
life insurance policies that it assumed from MLIC.
MetLife, Inc. guarantees the obligations of MetLife Reinsurance Company of Bermuda, Ltd. (“MrB”), a Bermuda
insurance affiliate and an indirect, wholly-owned subsidiary of MetLife, Inc. under a reinsurance agreement with Mitsui
Sumitomo Primary Life Insurance Co., Ltd. (“Mitsui”), a former affiliate that is now an unaffiliated third party, under which
MrB reinsures certain variable annuity business written by Mitsui.
MetLife, Inc. guarantees the obligations of MrB in an aggregate amount up to $1.0 billion, under a reinsurance
agreement with MetLife Europe d.a.c., in respect of MrB’s reinsurance of the guaranteed living benefits and guaranteed death
benefits associated with certain Unit-linked investments issued by MetLife Europe d.a.c.
MetLife, Inc., in connection with MRV’s reinsurance of certain universal life and term life insurance risks, committed to
the Vermont Department of Banking, Insurance, Securities and Health Care Administration to take necessary action to cause
the two protected cells of MRV to maintain total adjusted capital in an amount that is equal to or greater than 200% of each
such protected cell’s authorized control level RBC, as defined in Vermont state insurance statutes.
MetLife, Inc., in connection with the collateral financing arrangement associated with MRC’s reinsurance of a portion of
the liabilities associated with the closed block, committed to the South Carolina Department of Insurance to make capital
contributions, if necessary, to MRC so that MRC may at all times maintain its total adjusted capital in an amount that is equal
to or greater than 200% of the Company Action Level RBC, as defined in South Carolina state insurance statutes as in effect
on the date of determination or December 31, 2007, whichever calculation produces the greater capital requirement, or as
otherwise required by the South Carolina Department of Insurance. See Note 14 of the Notes to the Consolidated Financial
Statements.
MetLife, Inc. guarantees obligations arising from OTC-bilateral derivatives of MrB. MrB is exposed to various risks
relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market.
MrB uses a variety of strategies to manage these risks, including the use of derivatives. Further, MrB’s derivatives are subject
to industry standard netting agreements and collateral agreements that limit the unsecured portion of any open derivative
position. On a net counterparty basis at December 31, 2022 and 2021, derivative transactions with positive mark-to-market
values (in-the-money) were $174 million and $255 million, respectively, and derivative transactions with negative mark-to-
market values (out-of-the-money) were $181 million and $116 million, respectively. To secure the obligations represented by
the out-of-the-money transactions, MrB had provided collateral to its counterparties with an estimated fair value of
$181 million and $114 million at December 31, 2022 and 2021, respectively. Accordingly, unsecured derivative liabilities
guaranteed by MetLife, Inc. were $0 and $2 million at December 31, 2022 and 2021, respectively.
MetLife, Inc. also guarantees the obligations of certain of its subsidiaries under committed facilities with third-party
banks. See Note 13 of the Notes to the Consolidated Financial Statements.
308
Table of Contents
Segment
2022
U.S.
Asia
Latin America
EMEA
MetLife Holdings
Corporate & Other
Total
2021
U.S.
Asia
Latin America
EMEA
MetLife Holdings
Corporate & Other
Total
__________________
MetLife, Inc.
Schedule III
Consolidated Supplementary Insurance Information
December 31, 2022 and 2021
(In millions)
Future Policy Benefits,
Other Policy-Related
Balances and
Policyholder Dividend
Obligation
DAC
and
VOBA
Policyholder
Account
Balances
Policyholder
Dividends
Payable
Unearned
Premiums (1), (2)
Unearned
Revenue (1)
$
459 $
91,767 $
79,926 $
— $
352 $
13,384
2,211
1,593
5,308
28
41,308
12,181
3,391
74,181
1,051
84,215
5,493
7,244
26,226
(22)
72
—
—
315
—
1,889
2
14
158
—
36
3,677
829
530
195
—
$ 22,983 $
223,879 $ 203,082 $
387 $
2,415 $
5,267
$
440 $
85,108 $
77,891 $
— $
325 $
9,339
2,021
1,623
2,607
31
42,103
10,541
3,639
76,523
1,240
83,736
5,023
9,392
27,450
(19)
85
—
—
393
—
2,386
1
21
159
—
38
790
797
553
190
—
$ 16,061 $
219,154 $ 203,473 $
478 $
2,892 $
2,368
(1)
Amounts are included within the future policy benefits, other policy-related balances and policyholder dividend
obligation column.
(2)
Includes premiums received in advance.
309
Table of Contents
Segment
2022
U.S.
Asia
Latin America
EMEA
MetLife Holdings
Corporate & Other
Total
2021
U.S.
Asia
Latin America
EMEA
MetLife Holdings
Corporate & Other
Total
2020
U.S.
Asia
Latin America
EMEA
MetLife Holdings
Corporate & Other
Total
______________
MetLife, Inc.
Schedule III
Consolidated Supplementary Insurance Information — (continued)
Years Ended December 31, 2022, 2021 and 2020
(In millions)
Premiums and
Universal Life
and Investment-Type
Product Policy Fees
Net
Investment
Income
Policyholder
Benefits and
Claims and
Interest Credited
to Policyholder
Account Balances
Amortization of
DAC and
VOBA
Charged to
Other
Expenses
Other
Expenses (1)
$
36,706 $
6,980 $
38,056 $
59 $
7,367
4,401
2,324
4,198
(14)
3,571
1,318
(864)
4,690
221
6,347
4,046
126
5,735
(6)
1,042
339
340
142
9
3,894
1,593
1,057
780
1,629
1,851
$
$
$
$
54,982 $
15,916 $
54,304 $
1,931 $
10,804
28,363 $
7,738 $
29,987 $
158 $
8,308
3,718
2,825
4,514
37
5,110
1,207
932
6,157
251
7,295
3,442
2,162
6,571
35
1,404
285
382
317
9
3,707
1,751
989
900
1,839
1,721
47,765 $
21,395 $
49,492 $
2,555 $
10,907
28,335 $
6,563 $
27,966 $
471 $
8,554
3,257
2,709
4,757
25
3,931
991
697
4,900
35
7,249
2,857
1,623
6,983
(3)
1,468
276
452
485
8
3,716
1,825
971
860
1,976
1,732
$
47,637 $
17,117 $
46,675 $
3,160 $
11,080
(1)
Includes other expenses and policyholder dividends, excluding amortization of DAC and VOBA charged to other
expenses.
310
Table of Contents
2022
Life insurance in-force
Insurance premium
Life insurance (1)
Accident & health insurance
Property and casualty insurance
Total insurance premium
2021
Life insurance in-force
Insurance premium
Life insurance (1)
Accident & health insurance
Property and casualty insurance
Total insurance premium
2020
Life insurance in-force
Insurance premium
Life insurance (1)
Accident & health insurance
Property and casualty insurance
Total insurance premium
__________________
MetLife, Inc.
Schedule IV
Consolidated Reinsurance
December 31, 2022, 2021 and 2020
(Dollars in millions)
Gross Amount
Ceded
Assumed
Net Amount
% Amount
Assumed
to Net
$
$
$
$
$
$
$
$
$
5,371,318 $
390,521 $
647,646 $ 5,628,443
11.5 %
31,656 $
1,422 $
2,518 $
16,801
46
715
6
519
—
32,752
16,605
40
48,503 $
2,143 $
3,037 $
49,397
7.7 %
3.1 %
— %
6.1 %
5,273,869 $
394,023 $
662,901 $ 5,542,747
12.0 %
23,597 $
1,490 $
2,346 $
16,752
910
639
28
553
8
24,453
16,666
890
41,259 $
2,157 $
2,907 $
42,009
9.6 %
3.3 %
0.9 %
6.9 %
5,222,988 $
442,381 $
597,903 $ 5,378,510
11.1 %
23,629 $
1,620 $
1,809 $
14,958
3,614
516
63
208
15
42,201 $
2,199 $
2,032 $
23,818
14,650
3,566
42,034
7.6 %
1.4 %
0.4 %
4.8 %
(1)
Includes annuities with life contingencies.
311
Table of Contents
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Evaluation of Disclosure Controls and Procedures
Item 9A. Controls and Procedures
The Company maintains disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange Act. The Company has designed these controls and procedures to ensure that information the Company is required
to disclose in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms, and is accumulated and communicated to Company management, including the CEO
and CFO as appropriate, to allow timely decisions regarding required disclosure.
Management, including the CEO and CFO, evaluated the effectiveness of the design and operation of the Company’s
disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act as of the end of the period covered by
this Annual Report on Form 10-K. Based on that evaluation, the CEO and CFO concluded that the disclosure controls and
procedures were effective as of December 31, 2022.
There were no changes to the Company’s internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial reporting.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined
in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. In fulfilling this responsibility, management’s estimates and
judgments must assess the expected benefits and related costs of control procedures. The Company’s internal control
objectives include providing management with reasonable, but not absolute, assurance that the Company has safeguarded
assets against loss from unauthorized use or disposition, and that the Company has executed transactions in accordance with
management’s authorization and recorded them properly to permit the preparation of consolidated financial statements in
conformity with GAAP.
Management evaluated the design and operating effectiveness of the Company’s internal control over financial reporting
based on the criteria established in the Internal Control - Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission. In the opinion of management, MetLife, Inc. maintained effective
internal control over financial reporting as of December 31, 2022.
Deloitte has issued its report on its audit of the effectiveness of internal control over financial reporting, which is set
forth below.
312
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of MetLife, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of MetLife, Inc. and subsidiaries (the "Company") as of
December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established
in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the financial statements as of and for the year ended December 31, 2022, of the Company and our report dated
February 23, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 23, 2023
313
Table of Contents
None.
Not applicable.
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 10. Directors, Executive Officers and Corporate Governance
Part III
The information called for by this Item pertaining to Directors is incorporated herein by reference to MetLife, Inc.’s
definitive proxy statement for the Annual Meeting of Shareholders to be held on June 20, 2023, to be filed by MetLife, Inc.
with the SEC pursuant to Regulation 14A within 120 days after the year ended December 31, 2022 (the “2023 Proxy
Statement”).
The information called for by this Item pertaining to Executive Officers appears in “Business — Information About Our
Executive Officers” in this Annual Report on Form 10-K.
The Company has adopted the MetLife Financial Management Code of Business Ethics (the “Financial Management
Code”), a “code of ethics” as defined under the rules of the SEC, that applies to MetLife, Inc.’s CEO, CFO, Chief Accounting
Officer and all professionals in finance and finance-related departments. In addition, the Company has adopted the Directors’
Code of Business Ethics (the “Directors’ Code”) which applies to all members of Board of Directors, including the CEO, and
the Company’s Code of Business Ethics, which applies to all employees of the Company, including MetLife, Inc.’s CEO,
CFO and Chief Accounting Officer. These codes are available on the Company’s website at www.metlife.com/about-us/
corporate-governance/corporate-conduct/. The Company intends to satisfy any disclosure obligations under Item 5.05 of
Form 8-K by posting information on the Company’s website at the address given above.
Item 11. Executive Compensation
The information called for by this Item is incorporated herein by reference to the 2023 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information called for by this Item pertaining to ownership of shares of MetLife, Inc.’s common stock (“Shares”) is
incorporated herein by reference to the 2023 Proxy Statement.
314
Table of Contents
The following table provides information at December 31, 2022, regarding MetLife, Inc.’s equity compensation plans:
Equity Compensation Plan Information at December 31, 2022
Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights (1)
Weighted-average
Exercise Price of
Outstanding
Options, Warrants
and Rights (2)
(a)
(b)
12,008,464 $
None
12,008,464 $
49.24
—
49.24
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (a)) (3)
(c)
33,355,850
None
33,355,850
Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security
holders
Total
______________
(1) Column (a) reflects the following items outstanding as of December 31, 2022:
Stock Options
Restricted Stock Units
Performance Shares (assuming future payout at maximum performance factor)
Deferred Shares
Shares that will or may be issued
As of December 31, 2022:
3,386,041
1,999,964
5,611,791
1,010,668
12,008,464
•
•
•
Stock Options under the MetLife, Inc. 2015 Stock and Incentive Compensation Plan (the “2015 Stock Plan”) and its
predecessor plan, the MetLife, Inc. 2005 Stock and Incentive Compensation Plan (the “2005 Stock Plan”) were
outstanding;
Restricted Stock Units and Performance Shares under the 2015 Stock Plan were outstanding; and
Deferred Shares related to awards under the 2015 Stock Plan, MetLife, Inc. 2015 Non-Management Directors Stock
Compensation Plan (the “2015 Director Stock Plan”), 2005 Stock Plan, MetLife, Inc. 2005 Non-Management
Directors Stock Compensation Plan (the “2005 Director Stock Plan”), and earlier plans, were outstanding. Deferred
Shares are related to awards that have become payable in Shares under any plan, the issuance of which has been
deferred.
The maximum performance factor for Performance Shares granted in 2015 through 2022 was 175%. The number of
Performance Shares outstanding as of December 31, 2022 at target (100%) performance factor was 3,206,738.
MetLife, Inc. may issue Shares pursuant to awards (including Stock Option exercises, if any) under any plan using
Shares held in treasury by MetLife, Inc. or by issuing new Shares.
For a general description of how the number of Shares paid out on account of Performance Shares and Restricted Stock
Units is determined, and the vesting periods applicable to Performance Shares and Restricted Stock Units, see Note 16 of the
Notes to the Consolidated Financial Statements.
(2) Column (b) reflects the weighted average exercise price of all Stock Options under any plan that, as of December 31,
2022, had been granted but not forfeited, expired, or exercised. Performance Shares, Restricted Stock Units, and
Deferred Shares are not included in determining the weighted average in column (b) because they have no exercise
price.
315
Table of Contents
(3) Column (c) reflects the following items outstanding as of December 31, 2022:
Number of
Shares
At January 15, 2015, the effective date of the 2015 Stock Plan and 2015 Director Stock Plan:
Shares newly authorized for issuance under the 2015 Stock Plan
Shares remaining authorized for issuance under the 2005 Stock Plan or other plans that were not covered
by awards (i)
Shares authorized for issuance under the 2015 Director Stock Plan (ii)
Net shares added to the 2015 Stock Plan and 2015 Director Stock Plan authorizations in light of the
Separation (iii)
11,750,000
18,023,959
1,642,208
3,979,727
Total Shares authorized for issuance at January 1, 2015 and net shares added in light of the Separation
35,395,894
Additional Shares recovered for issuance (iv) in:
2015 - 2021
2022
Total Shares recovered for issuance since January 1, 2015
Less: Shares covered by new awards and new imputed reinvested dividends on Deferred Shares (v) in:
2015 - 2021
2022
Total Shares covered by new awards and new imputed reinvested dividends on Deferred Shares since
January 1, 2015
31,545,071
2,350,180
33,895,251
32,867,851
3,067,444
35,935,295
Shares remaining available for future issuance under the 2015 Stock Plan and 2015 Director Stock Plan
33,355,850
______________
(i)
(ii)
(iii)
(iv)
Consists of Shares that were not covered by awards, including Shares previously covered by awards but recovered
due to forfeiture of awards or other reasons and once again available for issuance.
Consists of Shares remaining authorized for issuance under the predecessor plan, the 2005 Director Stock Plan, that
were not covered by awards, including Shares previously covered by awards but recovered due to forfeiture of
awards or other reasons and once again available.
In 2017, MetLife, Inc. completed the separation of Brighthouse Financial, Inc. and its subsidiaries (“Brighthouse”)
through a distribution of shares of Brighthouse Financial, Inc. common stock to the MetLife, Inc. common
shareholders (the “Separation”). In light of the Separation, and in order to maintain the Share authorizations under
each plan at the levels that shareholders had approved, MetLife, Inc. increased the number of Shares authorized for
issuance under the 2015 Stock Plan and 2015 Director Stock Plan as of August 4, 2017, excluding those Shares from
the authorizations that had already been issued, by the Adjustment Ratio. MetLife, Inc. also increased the number of
Shares covered by outstanding Stock Options, Performance Shares, Restricted Stock Units, and Deferred Shares on
that date by the Adjustment Ratio, in order to maintain the intrinsic value of those awards and Deferred Shares,
which decreased the number of Shares available for issuance under both plans. The amount in this row is the net
increase in the Share authorization under both the 2015 Stock Plan and 2015 Director Stock Plan as a result of these
adjustments. For a description of the adjustment to Stock Options, Performance Shares, Restricted Stock Units, and
Deferred Shares, see Note 16 of the Notes to the Consolidated Financial Statements.
Consists of Shares utilized under the 2005 Stock Plan or 2015 Stock Plan that were recovered during each of the
indicated calendar years, and therefore once again available for issuance, due to: (i) termination of the award by
expiration, forfeiture, cancellation, lapse, or otherwise without issuing Shares; (ii) settlement of the award in cash
either in lieu of Shares or otherwise; (iii) exchange of the award for awards not involving Shares; (iv) payment of the
exercise price of a Stock Option, or the tax withholding requirements with respect to an award, satisfied by tendering
Shares to MetLife, Inc. (by either actual delivery or by attestation); (v) satisfaction of tax withholding requirements
with respect to an award satisfied by MetLife, Inc. withholding Shares otherwise issuable; and (vi) the payout of
Performance Shares at any performance factor less than the maximum performance factor.
(v)
Consists of Shares covered by awards granted under the 2015 Stock Plan (including Performance Shares assuming
future payout at maximum performance factor). Shares covered by awards granted under the 2015 Directors Stock
Plan and Shares covered by imputed reinvested dividends credited on Deferred Shares owed to directors, employees
or agents, in each case during each of the indicated calendar years.
316
Table of Contents
Each Share MetLife, Inc. issues in connection with awards granted under the 2005 Stock Plan other than Stock Options
or Stock Appreciation Rights (such as Shares payable on account of Performance Shares or Restricted Stock Units under that
plan, including any Deferred Shares resulting from such awards) reduces the number of Shares remaining for issuance by
1.179 (“2005 Stock Plan Share Award Ratio”). Each Share MetLife, Inc. issues in connection with a Stock Option or Stock
Appreciation Right granted under the 2005 Stock Plan, or in connection with any award under any other plan for employees
and agents (including any Deferred Shares resulting from such awards), reduces the number of Shares remaining for issuance
by 1.0. (“Standard Award Ratio”). Shares related to awards that are recovered, and therefore authorized for issuance under
the 2015 Stock Plan, are recovered with consideration of the 2005 Stock Plan Share Award Ratio and Standard Award Ratio,
as applicable. Each Share MetLife, Inc. issues under the 2005 Director Stock Plan or 2015 Director Stock Plan (including any
Deferred Shares resulting from such awards) reduces the number of Shares remaining for issuance under that plan by one.
Shares related to awards that are recovered, and therefore authorized for issuance under the 2015 Director Stock Plan are
recovered with consideration of this ratio. If MetLife, Inc. was to grant a Share-settled Stock Appreciation Right under the
2015 Stock Plan and the award holder exercised it, only the number of Shares MetLife, Inc. issued, net of the Shares
tendered, if any, would be deemed delivered for purposes of determining the maximum number of Shares MetLife, Inc. may
issue under the 2015 Stock Plan.
Any Shares covered by awards under the 2015 Director Stock Plan that were to be recovered due to (i) termination of the
award by expiration, forfeiture, cancellation, lapse, or otherwise without issuing Shares; (ii) settlement of the award in cash
either in lieu of Shares or otherwise; (iii) exchange of the award for awards not involving Shares; and (iv) payment of the
exercise price of a Stock Option, or the tax withholding requirements with respect to an award, satisfied by tendering Shares
to MetLife, Inc. (by either actual delivery or by attestation) would be available to be issued under the 2015 Director Stock
Plan. In addition, if MetLife, Inc. was to grant a Share-settled Stock Appreciation Right under the 2015 Director Stock Plan,
only the number of Shares issued, net of the Shares tendered, if any, would be deemed delivered for purposes of determining
the maximum number of Shares available for issuance under the 2015 Director Stock Plan.
Under both the 2015 Stock Plan and the 2015 Director Stock Plan, in the event of a corporate event or transaction
(including, but not limited to, a change in the Shares or the capitalization of MetLife) such as a merger, consolidation,
reorganization, recapitalization, separation, stock dividend, extraordinary dividend, stock split, reverse stock split, split up,
spin-off, or other distribution of stock or property of MetLife, combination of securities, exchange of securities, dividend in
kind, or other like change in capital structure or distribution (other than normal cash dividends) to shareholders of MetLife, or
any similar corporate event or transaction, the appropriate committee of the Board of Directors of MetLife, in order to
prevent dilution or enlargement of participants’ rights under the applicable plan, shall substitute or adjust, as applicable, the
number and kind of Shares that may be issued under that plan and shall adjust the number and kind of Shares subject to
outstanding awards. Any Shares related to awards under either plan which: (i) terminate by expiration, forfeiture,
cancellation, or otherwise without the issuance of Shares; (ii) are settled in cash either in lieu of Shares or otherwise; or (iii)
are exchanged with the appropriate committee’s permission for awards not involving Shares, are available again for grant
under the applicable plan. If the option price of any Stock Option granted under either plan or the tax withholding
requirements with respect to any award granted under either plan is satisfied by tendering Shares to MetLife (by either actual
delivery or by attestation), or if a Stock Appreciation Right is exercised, only the number of Shares issued, net of the Shares
tendered, if any, will be deemed delivered for purposes of determining the maximum number of Shares available for issuance
under that plan. The maximum number of Shares available for issuance under either plan shall not be reduced to reflect any
dividends or dividend equivalents that are reinvested into additional Shares or credited as additional Restricted Stock or
Restricted Stock Units.
For a description of the kinds of awards that have been or may be made under the 2015 Stock Plan and 2015 Director
Stock Plan and awards that remained outstanding under the 2005 Stock Plan, see Note 16 of the Notes to the Consolidated
Financial Statements.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information called for by this Item is incorporated herein by reference to the 2023 Proxy Statement.
Item 14. Principal Accountant Fees and Services
The information called for by this item is incorporated herein by reference to the 2023 Proxy Statement.
317
Table of Contents
Part IV
Item 15. Exhibits and Financial Statement Schedules
The following documents are filed as part of this report:
1. Financial Statements
The financial statements are listed in the Index to Consolidated Financial Statements, Notes and Schedules on page 144.
2. Financial Statement Schedules
The financial statement schedules are listed in the Index to Consolidated Financial Statements, Notes and Schedules on
page 144.
3. Exhibits
The exhibits are listed in the Exhibit Index which begins on page 319.
Item 16. Form 10-K Summary
None.
318
Table of Contents
Exhibit Index
(Note Regarding Reliance on Statements in Our Contracts: In reviewing the agreements included as exhibits to this
Annual Report on Form 10-K, please remember that they are included to provide you with information regarding their terms
and are not intended to provide any other factual or disclosure information about MetLife, Inc., its subsidiaries or affiliates,
or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the
applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the
applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of
allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that
were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not
necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be
viewed as material to investors; and (iv) were made only as of the date of the applicable agreement or such other date or
dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations
and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional
information about MetLife, Inc., its subsidiaries and affiliates may be found elsewhere in this Annual Report on Form 10-K
and MetLife, Inc.’s other public filings, which are available without charge through the U.S. Securities and Exchange
Commission website at www.sec.gov.)
Exhibit
No.
Description
Form
File Number
Exhibit
Filing Date
Filed or
Furnished
Herewith
Incorporated By Reference
Plan of Reorganization.
S-1
333-91517
Amendment to Plan of Reorganization, dated as of March 9,
2000.
S-1/A
333-91517
2.1
2.2
2.3
3.1.1
3.1.2
3.1.3
3.1.4
3.1.5
3.1.6
3.1.7
3.1.8
3.1.9
Master Separation Agreement, dated August 4, 2017,
between MetLife, Inc. and Brighthouse Financial, Inc.
Amended and Restated Certificate of Incorporation of
MetLife, Inc.
Certificate of Retirement of Series B Contingent
Convertible Junior Participating Non-Cumulative Perpetual
Preferred Stock of MetLife, Inc., filed with the Secretary of
State of Delaware on November 5, 2013.
Certificate of Amendment of Amended and Restated
Certificate of Incorporation of MetLife, Inc., dated April 29,
2015.
Certificate of Elimination of 6.500% Non-Cumulative
Preferred Stock, Series B, of MetLife, Inc., filed with the
Secretary of State of Delaware on November 3, 2015.
Certificate of Amendment of Amended and Restated
Certificate of Incorporation of MetLife, Inc., dated April 29,
2011.
Certificate of Designation, Preferences and Rights of Series
A Junior Participating Preferred Stock of MetLife, Inc.,
filed with the Secretary of State of Delaware on April 7,
2000.
Certificate of Designations of Floating Rate Non-
Cumulative Preferred Stock, Series A, of MetLife, Inc.,
filed with the Secretary of State of Delaware on June 10,
2005.
Certificate of Amendment of Amended and Restated
Certificate of Incorporation of MetLife, Inc., dated October
23, 2017.
Certificate of Designations of 5.875% Fixed-to-Floating
Rate Non-Cumulative Preferred Stock, Series D, of
MetLife, Inc., filed with the Secretary of State of Delaware
on March 21, 2018.
8-K
001-15787
10-K
001-15787
10-Q
001-15787
8-K
001-15787
10-Q
001-15787
10-K
001-15787
10-K
001-15787
2.1
2.2
2.1
3.1
3.6
3.1
3.7
3.4
3.2
November
23, 1999
March 29,
2000
August 7,
2017
March 1,
2017
November 7,
2013
April 30,
2015
November 5,
2015
March 1,
2017
March 1,
2017
March 1,
2017
10-K
001-15787
3.3
8-K
001-15787
8-K
001-15787
3.1
3.1
October 24,
2017
March 22,
2018
3.1.10
Certificate of Designations of 5.625% Non-Cumulative
Preferred Stock, Series E, of MetLife, Inc., filed with the
Secretary of the State of Delaware on May 31, 2018.
8-K
001-15787
3.1
June 4, 2018
319
Table of Contents
Exhibit
No.
3.1.11
3.1.12
3.1.13
Description
Certificate of Designations of 4.75% Non-Cumulative
Preferred Stock, Series F, of MetLife, Inc., filed with the
Secretary of the State of Delaware on January 8, 2020.
Certificate of Designations of 3.850% Fixed Rate Reset
Non-Cumulative Preferred Stock, Series G, of MetLife,
Inc., filed with the Secretary of the State of Delaware on
September 9, 2020.
Certificate of Elimination of 5.250% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series C, of MetLife,
Inc., filed with the Secretary of State of Delaware on June
29, 2021.
Incorporated By Reference
Form
8-K
File Number
001-15787
Exhibit
3.1
8-K
001-15787
3.1
8-K
001-15787
3.1
Amended and Restated By-Laws of MetLife, Inc., effective
September 25, 2018.
8-K
001-15787
Form of Certificate for Common Stock, par value $0.01 per
share.
S-1/A
333-91517
3.2
4.1
Certificate of Designation, Preferences and Rights of Series
A Junior Participating Preferred Stock of MetLife, Inc.,
filed with the Secretary of State of Delaware on April 7,
2000. (See Exhibit 3.1.6 above).
Certificate of Designations of Floating Rate Non-
Cumulative Preferred Stock, Series A, of MetLife, Inc.,
filed with the Secretary of State of Delaware on June 10,
2005. (See Exhibit 3.1.7 above).
Filed or
Furnished
Herewith
Filing Date
January 9,
2020
September
10, 2020
June 29,
2021
October 1,
2018
March 9,
2000
Form of Stock Certificate, Floating Rate Non-Cumulative
Preferred Stock, Series A, of MetLife, Inc.
8-A
001-15787
99.6
June 10,
2005
Certificate of Amendment of Amended and Restated
Certificate of Incorporation of MetLife, Inc., dated October
23, 2017. (See Exhibit 3.1.8 above).
Certificate of Designations of 5.875% Fixed-to-Floating
Rate Non-Cumulative Preferred Stock, Series D, of
MetLife, Inc., filed with the Secretary of State of Delaware
on March 21, 2018. (See Exhibit 3.1.9 above).
Form of Stock Certificate, 5.875% Fixed-to-Floating Rate
Non-Cumulative Preferred Stock, Series D, of MetLife, Inc.
8-K
001-15787
4.1
March 22,
2018
Certificate of Designations of 5.625% Non-Cumulative
Preferred Stock, Series E, of MetLife, Inc., filed with the
Secretary of the State of Delaware on May 31, 2018. (See
Exhibit 3.1.10 above).
Form of Stock Certificate, 5.625% Non-Cumulative
Preferred Stock, Series E, of MetLife, Inc.
Deposit Agreement, dated June 4, 2018, among MetLife,
Inc., Computershare Inc. and Computershare Trust
Company, N.A., as depositary, and the holders from time to
time of the depositary receipts described therein.
Form of Depositary Receipt, Depositary Shares each
representing a 1/1,000th interest in a share of 5.625% Non-
Cumulative Preferred Stock, Series E, of MetLife, Inc.
Certificate of Designations of 4.75% Non-Cumulative
Preferred Stock, Series F, of MetLife, Inc., filed with the
Secretary of the State of Delaware on January 8, 2020. (See
Exhibit 3.1.11 above).
8-K
8-K
001-15787
001-15787
4.1
4.2
June 4, 2018
June 4, 2018
8-K
001-15787
4.3
June 4, 2018
Form of Stock Certificate, 4.75% Non-Cumulative
Preferred Stock, Series F, of MetLife, Inc.
8-K
001-15787
4.1
January 9,
2020
Certificate of Designations of 3.850% Fixed Rate Reset
Non-Cumulative Preferred Stock, Series G, of MetLife,
Inc., filed with the Secretary of the State of Delaware on
September 9, 2020. (See Exhibit 3.1.12 above).
Form of Stock Certificate, 3.850% Fixed Rate Reset Non-
Cumulative Preferred Stock, Series G, of MetLife, Inc.
8-K
001-15787
4.1
September
10, 2020
320
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
Table of Contents
Exhibit
No.
4.16
Description
Deposit Agreement, dated January 15, 2020, among
MetLife, Inc., Computershare Inc. and Computershare Trust
Company, N.A., collectively, as depositary, and the holders
from time to time of the depositary receipts described
therein.
4.17
Form of Depositary Receipt, Depositary Shares each
representing a 1/1,000th interest in a share of 4.75% Non-
Cumulative Preferred Stock, Series F, of MetLife, Inc.
4.18
Description of Securities.
Certain instruments defining the rights of holders of long-
term debt of MetLife, Inc. and its consolidated subsidiaries
are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-
K. MetLife, Inc. hereby agrees to furnish to the Securities
and Exchange Commission, upon request, copies of such
instruments.
Incorporated By Reference
Form
8-K
File Number
001-15787
Exhibit
4.1
8-K
001-15787
4.3
Filing Date
January 15,
2020
January 15,
2020
Filed or
Furnished
Herewith
X
10.1.1
MetLife Policyholder Trust Agreement.
S-1
333-91517
10.12
10.1.2
Amendment to MetLife Policyholder Trust Agreement.
10-K
001-15787
10.62
10.2
10.3
10.4
10.5
10.6.1
10.6.2
10.7
10.8.1
10.8.2
10.9
10.10
10.11.1
10.11.2
10.12
Amended and Restated Credit Agreement, dated as of
February 26, 2021, amending and restating the Five-Year
Credit Agreement, dated as of August 4, 2017, among
MetLife, Inc. and MetLife Funding, Inc., as borrowers, and
the other parties signatory thereto.
Purchase Agreement by and among MetLife, Inc. and
Massachusetts Mutual Life Insurance Company, dated as of
February 28, 2016.
Tax Separation Agreement, dated as of July 27, 2017, by
and among MetLife, Inc. and its affiliates and Brighthouse
Financial, Inc. and its affiliates.
MetLife, Inc. 2015 Non-Management Director Stock
Compensation Plan, effective January 1, 2015.*
MetLife Non-Management Director Deferred
Compensation Plan (as amended and restated, effective
January 1, 2005, implemented November 2012).*
Amendment to MetLife Non-Management Director
Deferred Compensation Plan (as amended and restated,
effective January 1, 2005, implemented November 2020).*
8-K
001-15787
10.1
10-Q
001-15787
10.1
May 6, 2016
8-K
001-15787
10.1
S-8
S-8
333-198141
333-214710
4.1
4.1
10-K
001-15787
10.6.2
MetLife, Inc. Director Indemnity Plan (dated and effective
July 22, 2008).*
10-K
001-15787
10.94
Form of Agreement to Protect Corporate Property executed
by Michel Khalaf, effective April 9, 2012.*
10-K
001-15787
10.15
Form of Agreement to Protect Corporate Property executed
by Ricardo A. Anzaldua, John C. R. Hele, Frans Hijkoop,
and Esther Lee on May 25, 2016; Steven A. Kandarian on
May 31, 2016; Steven J. Goulart on June 2, 2016; Maria M.
Morris on June 8, 2016; Martin J. Lippert on July 6, 2016;
Susan Podlogar, effective July 10, 2017; and Ramy Tadros,
effective September 11, 2017.*
MetLife Executive Severance Plan (as amended and
restated, effective June 14, 2010).*
MetLife Performance-Based Compensation Recoupment
Policy (effective as amended and restated November 1,
2017).*
10-Q
001-15787
10.1
10-K
001-15787
8-K
001-15787
10.1
10.1
MetLife, Inc. 2015 Stock and Incentive Compensation Plan,
effective January 1, 2015 (the “2015 SIC Plan”).*
S-8
333-198145
4.1
MetLife, Inc. 2005 Stock and Incentive Compensation Plan,
effective April 15, 2005 (the “2005 SIC Plan”).*
10-K
001-15787
10.24
MetLife Annual Variable Incentive Plan (effective as
amended and restated January 1, 2015).*
8-K
001-15787
10.11
321
November
23, 1999
February 27,
2013
March 2,
2021
August 7,
2017
August 14,
2014
November
18, 2016
February 19,
2021
February 27,
2014
February 25,
2016
August 5,
2016
February 27,
2015
November 6,
2017
August 14,
2014
February 27,
2015
December
11, 2014
Filed or
Furnished
Herewith
Table of Contents
Exhibit
No.
10.13.1
10.13.2
10.14.1
10.14.2
10.14.3
10.14.4
10.14.5
10.14.6
10.14.7
10.14.8
10.14.9
10.15.1
10.15.2
10.15.3
10.15.4
10.15.5
10.15.6
10.15.7
10.16.1
10.16.2
10.16.3
Description
MetLife International Unit Option Incentive Plan (as
amended and restated December 3, 2012).*
MetLife International Unit Option Incentive Plan, dated
July 21, 2011 (as amended and restated effective February
23, 2011).*
Form of Stock Option Agreement under the 2005 SIC Plan
effective February 11, 2013.*
Form of Stock Option Agreement (Three-Year “Cliff”
Exercisability) under the 2005 SIC Plan effective February
11, 2013.*
Incorporated By Reference
Form
8-K
File Number
001-15787
Exhibit
10.11
10-K
001-15787
10.24
8-K
8-K
001-15787
10.9
001-15787
10.10
Form of Management Stock Option Agreement under the
2005 SIC Plan effective as of April 25, 2007.*
10-K
001-15787
10.24
Amendment to Stock Option Agreements under the 2005
SIC Plan effective as of April 25, 2007.*
10-K
001-15787
10.25
Form of Stock Option Agreement (Ratable Exercisability in
Thirds) under the 2015 SIC Plan, effective January 1, 2015
*
Form of Stock Option Agreement (Three-Year “Cliff”
Exercisability) under the 2015 SIC Plan, effective January
1, 2015 *
8-K
001-15787
10.7
8-K
001-15787
10.8
Form of Management Stock Option Agreement under the
2005 SIC Plan effective December 15, 2009.*
10-K
001-15787
10.28
Form of Stock Option Agreement (Ratable Exercisability in
Thirds) under the 2015 SIC Plan, effective January 1,
2016.*
Form of Stock Option Agreement (Three-Year “Cliff”
Exercisability) under the 2015 SIC Plan, effective January
1, 2016.*
Form of Unit Option Agreement under the MetLife
International Unit Option Incentive Plan effective February
11, 2013.*
Form of Unit Option Agreement (Three-Year “Cliff”
Exercisability) under the MetLife International Unit Option
Incentive Plan, effective February 11, 2013.*
Form of Unit Option Agreement (Ratable Exercisability in
Thirds) under the 2015 SIC Plan, effective January 1,
2015.*
Form of Unit Option Agreement (Three-Year “Cliff”
Exercisability) under the 2015 SIC Plan, effective January
1, 2015.*
Form of Unit Option Agreement (Ratable Exercisability in
Thirds) under the 2015 SIC Plan, effective January 1,
2016.*
Form of Unit Option Agreement (Three-Year “Cliff”
Exercisability) under the 2015 SIC Plan, effective January
1, 2016.*
Form of Unit Option Agreement under the MetLife
International Unit Option Incentive Plan effective February
23, 2011.*
Form of Restricted Stock Unit Agreement (Ratable Period
of Restriction Ends in Thirds; Code Section 162(m) Goals)
under the 2015 SIC Plan, effective January 1, 2016.*
Form of Restricted Stock Unit Agreement (Three-Year
“Cliff” Period of Restriction; No Code Section 162(m)
Goals) under the 2015 SIC Plan, effective January 1, 2016.*
Form of Restricted Stock Unit Agreement (Ratable Period
of Restriction Ends in Thirds) under the 2015 SIC Plan,
effective February 27, 2018.*
10-K
001-15787
10.101
10-K
001-15787
10.102
8-K
001-15787
10.12
8-K
001-15787
10.13
8-K
001-15787
10.9
8-K
001-15787
10.10
10-K
001-15787
10.103
10-K
001-15787
10.104
10-K
001-15787
10.25
10-K
001-15787
10.97
10-K
001-15787
10.98
8-K
001-15787
10.3
Filing Date
February 15,
2013
March 1,
2017
February 15,
2013
February 15,
2013
February 27,
2013
February 27,
2013
December
11, 2014
December
11, 2014
February 27,
2015
February 25,
2016
February 25,
2016
February 15,
2013
February 15,
2013
December
11, 2014
December
11, 2014
February 25,
2016
February 25,
2016
March 1,
2017
February 25,
2016
February 25,
2016
February 20,
2018
322
Table of Contents
Exhibit
No.
10.16.4
10.17.1
10.17.2
10.17.3
10.17.4
10.18.1
10.18.2
10.18.3
10.18.4
10.18.5
10.18.6
10.19.1
10.19.2
10.19.3
10.19.4
10.19.5
10.19.6
Description
Form of Restricted Stock Unit Agreement (Three-Year
“Cliff” Period of Restriction) under the 2015 SIC Plan,
effective February 27, 2018.*
Form of Restricted Unit Agreement (Ratable Period of
Restriction Ends in Thirds; Code Section 162(m) Goals)
under the 2015 SIC Plan, effective January 1, 2016.*
Form of Restricted Unit Agreement (Three-Year “Cliff”
Period of Restriction; No Code Section 162(m) Goals)
under the 2015 SIC Plan, effective January 1, 2016.*
Form of Restricted Unit Agreement (Ratable Period of
Restriction Ends in Thirds) under the 2015 SIC Plan,
effective February 27, 2018.*
Form of Restricted Unit Agreement (Three-Year “Cliff”
Period of Restriction) under the 2015 SIC Plan, effective
February 27, 2018.*
Form of Performance Share Agreement under the 2015 SIC
Plan, effective January 1, 2016.*
Form of Performance Share Agreement under the 2015 SIC
Plan, effective February 27, 2018.*
Form of Performance Share Agreement under the 2015 SIC
Plan, effective January 1, 2019. *
Form of Performance Share Agreement under the 2015 SIC
Plan, effective December 10, 2019.*
Form of Performance Share Agreement under the 2015 SIC
Plan, effective February 23, 2021.*
Form of Performance Share Agreement under the 2015 SIC
Plan, effective February 28, 2023.*
Form of Performance Unit Agreement under the 2015 SIC
Plan, effective January 1, 2016.*
Form of Performance Unit Agreement under the 2015 SIC
Plan, effective February 27, 2018.*
Form of Performance Unit Agreement under the 2015 SIC
Plan, effective January 1, 2019. *
Form of Performance Unit Agreement under the 2015 SIC
Plan, effective December 10, 2019.*
Form of Performance Unit Agreement under the 2015 SIC
Plan, effective February 23, 2021.*
Form of Performance Unit Agreement under the 2015 SIC
Plan, effective February 28, 2023.*
Incorporated By Reference
Form
8-K
File Number
001-15787
Exhibit
10.4
10-K
001-15787
10.99
10-K
001-15787
10.100
8-K
001-15787
10.5
8-K
001-15787
10.6
10-K
001-15787
10.95
8-K
8-K
001-15787
001-15787
10.1
10.1
10-K
001-15787
10.18.5
10-K
001-15787
10.18.5
10-K
001-15787
10.96
8-K
8-K
001-15787
001-15787
10.2
10.2
10-K
001-15787
10.19.5
10-K
001-15787
10.19.5
10.20.1
Award Agreement Supplement, effective January 1, 2016.*
10-K
001-15787
10.105
10.20.2
10.20.3
10.21.1
10.21.2
10.21.3
10.21.4
Award Agreement Supplement, effective February 27,
2018.*
Award Agreement Supplement, effective February 23,
2021.*
MetLife Auxiliary Pension Plan, dated August 7, 2006 (as
amended and restated, effective June 30, 2006).*
MetLife Auxiliary Pension Plan, dated December 21, 2006
(amending and restating Part I thereof, effective January 1,
2007).*
MetLife Auxiliary Pension Plan, dated December 21, 2007
(amending and restating Part I thereof, effective January 1,
2008).*
Amendment #1 to the MetLife Auxiliary Pension Plan (as
amended and restated, effective January 1, 2008), dated
October 24, 2008 (effective October 1, 2008).*
8-K
001-15787
10.7
10-K
001-15787
10.20.3
10-K
001-15787
10.60
10-K
001-15787
10.61
10-K
001-15787
10.95
10-K
001-15787
10.98
323
Filed or
Furnished
Herewith
X
X
Filing Date
February 20,
2018
February 25,
2016
February 25,
2016
February 20,
2018
February 20,
2018
February 25,
2016
February 20,
2018
December
13, 2018
February 21,
2020
February 19,
2021
February 25,
2016
February 20,
2018
December
13, 2018
February 21,
2020
February 19,
2021
February 25,
2016
February 20,
2018
February 19,
2021
March 1,
2017
March 1,
2017
February 27,
2013
February 27,
2014
Table of Contents
Exhibit
No.
10.21.5
10.21.6
10.21.7
10.21.8
10.21.9
10.21.10
10.21.11
10.21.12
10.21.13
10.21.14
10.21.15
Description
Amendment Number Two to the MetLife Auxiliary Pension
Plan (as amended and restated, effective January 1, 2008),
dated December 12, 2008 (effective December 31, 2008).*
Amendment Number Three to the MetLife Auxiliary
Pension Plan (as amended and restated, effective January 1,
2008) dated March 25, 2009 (effective January 1, 2009).*
Amendment Number Four to the MetLife Auxiliary Pension
Plan (as amended and restated, effective January 1, 2008),
dated December 16, 2009 (effective January 1, 2010).*
Amendment Number Five to the MetLife Auxiliary Pension
Plan (as amended and restated, effective January 1, 2008),
dated December 21, 2010 (effective January 1, 2010).*
Amendment Number Six to the MetLife Auxiliary Pension
Plan (as amended and restated, effective January 1, 2008),
dated December 20, 2012 (effective January 1, 2012).*
Amendment Number Seven to the MetLife Auxiliary
Pension Plan (as amended and restated, effective January 1,
2008), dated December 27, 2013 (effective December 10,
2013).*
Amendment Number 6 to the MetLife Auxiliary Pension
Plan (as amended and restated, effective January 1, 2008),
dated March 5, 2018 (effective March 15, 2018).*
Amendment Number 8 to the MetLife Auxiliary Retirement
Plan (as amended and restated, effective January 1, 2008,
formerly referred to as the “MetLife Auxiliary Pension
Plan” until March 15, 2018), dated September 4, 2018
(effective March 15, 2018).*
Amendment Number Nine to the MetLife Auxiliary
Retirement Plan (as amended and restated, effective January
1, 2008), dated September 26, 2018 (effective January 1,
2023).*
Amendment Number Ten to the MetLife Auxiliary
Retirement Plan (as amended and restated, effective January
1, 2008), dated November 6, 2019 (effective November 1,
2019).*
Amendment Number 11 to the MetLife Auxiliary
Retirement Plan (as amended and restated, effective January
1, 2008), dated April 7, 2021 (effective April 7, 2021).*
10.22.2
10.22.3
10.22.4
10.22.5
10.23
10.24.1
10.24.2
Amendment Number One to the Alico Overseas Pension
Plan (effective November 1, 2010), dated December 20,
2010.*
Amendment Number Two to the Alico Overseas Pension
Plan (effective as of November 1, 2011), dated December
13, 2011.*
Amendment Number Three to the Alico Overseas Pension
Plan, dated May 1, 2012 (effective January 1, 2012).*
Amendment Number Four to the Alico Overseas Pension
Plan, dated June 19, 2017, effective July 1, 2017.*
MetLife Deferred Compensation Plan For Globally Mobile
Employees, effective July 31, 2014, for which Michel
Khalaf became eligible July 1, 2017.*
Metropolitan Life Auxiliary Savings and Investment Plan
(Amended and Restated Effective January 1, 2008), dated
December 20, 2007 (effective January 1, 2008).*
Amendment 1 to the Metropolitan Life Auxiliary Savings
and Investment Plan (Amended and Restated, Effective
January 1, 2008), dated December 9, 2008 (effective
January 1, 2008).*
Filed or
Furnished
Herewith
Incorporated By Reference
Form
10-K
File Number
001-15787
Exhibit
10.99
10-K
001-15787
10.71
10-K
001-15787
10.102
10-K
001-15787
10.73
10-K
001-15787
10.101
10-K
001-15787
10.69
Filing Date
February 27,
2014
February 25,
2016
February 27,
2015
February 25,
2016
February 27,
2013
March 1,
2017
10-Q
001-15787
10.9
May 8, 2018
10-Q
001-15787
10.2
November 8,
2018
10-Q
001-15787
10.3
10-K
001-15787
10.21.14
10-K
001-15787
10.21.15
10-K
001-15787
10.71
10-K
001-15787
10.72
November 8,
2018
February 18,
2022
February 18,
2022
March 1,
2017
March 1,
2017
March 1,
2017
8-K
001-15787
10.1
May 4, 2012
10-Q
001-15787
10-Q
001-15787
10.6
10.4
10-K
001-15787
10.72
10-K
001-15787
10.74
November 6,
2017
November 6,
2017
February 27,
2013
February 27,
2015
324
10.22.1
Alico Overseas Pension Plan, dated January 2009.*
10-K
001-15787
10.70
Table of Contents
Exhibit
No.
10.24.3
10.24.4
10.24.5
10.24.6
10.24.7
10.24.8
10.25.1
10.25.2
10.25.3
10.25.4
10.26.1
10.26.2
10.26.3
10.26.4
10.26.5
10.26.6
10.26.7
10.26.8
Description
Amendment Number 2 to the Metropolitan Life Auxiliary
Savings and Investment Plan (Amended and Restated
Effective January 1, 2008), dated December 21, 2010
(effective January 1, 2010).*
Amendment Number 3 to the Metropolitan Life Auxiliary
Savings and Investment Plan (Amended and Restated
Effective January 1, 2008), dated December 19, 2012
(effective January 1, 2012 and January 1, 2013).*
Amendment Number 4 to the Metropolitan Life Auxiliary
Savings and Investment Plan (Amended and Restated
Effective January 1, 2008), dated December 17, 2013
(effective July 1, 2013 and January 1, 2014).*
Amendment Number 5 to the Metropolitan Life Auxiliary
Savings and Investment Plan (Amended and Restated
Effective January 1, 2008), dated March 5, 2018 (effective
March 15, 2018).*
Amendment Number 6 to the MetLife Auxiliary Match Plan
(Amended and Restated Effective January 1, 2008, formerly
referred to as the “Metropolitan Life Auxiliary Savings and
Investment Plan” until March 15, 2018), dated December
23, 2020 (effective January 1, 2020).*
Amendment Number 7 to the MetLife Auxiliary Match Plan
(Amended and Restated Effective January 1, 2008), dated
April 7, 2021 (effective April 7, 2021).*
Filed or
Furnished
Herewith
Incorporated By Reference
Form
10-K
File Number
001-15787
Exhibit
10.48
10-K
001-15787
10.75
10-K
001-15787
10.77
Filing Date
February 25,
2016
February 27,
2013
February 27,
2014
10-Q
001-15787
10.8
May 8, 2018
10-K
001-15787
10.24.7
February 18,
2022
10-K
001-15787
10.24.8
MetLife Deferred Compensation Plan for Officers, as
amended and restated, effective November 1, 2003.*
10-K
001-15787
10.78
Amendment Number One to the MetLife Deferred
Compensation Plan for Officers (as amended and restated as
of November 1, 2003), dated May 4, 2005.*
Amendment Number Two to the MetLife Deferred
Compensation Plan for Officers (as amended and restated as
of November 1, 2003, effective December 14, 2005).*
Amendment Number Three to the MetLife Deferred
Compensation Plan for Officers (as amended and restated as
of November 1, 2003, effective February 26, 2007).*
MetLife Leadership Deferred Compensation Plan, dated
November 2, 2006 (as amended and restated, effective with
respect to salary and cash incentive compensation, January
1, 2005, and with respect to stock compensation, April 15,
2005).*
Amendment Number One to the MetLife Leadership
Deferred Compensation Plan, dated December 13, 2007
(effective as of December 31, 2007).*
Amendment Number Two to the MetLife Leadership
Deferred Compensation Plan, dated December 11, 2008
(effective December 31, 2008).*
Amendment Number Three to the MetLife Leadership
Deferred Compensation Plan, dated December 11, 2009
(effective January 1, 2010).*
Amendment Number Four to the MetLife Leadership
Deferred Compensation Plan, dated December 11, 2009
(effective December 31, 2009).*
Amendment Number Five to the MetLife Leadership
Deferred Compensation Plan, dated December 16, 2010
(effective January 1, 2011).*
Amendment Number Six to the MetLife Leadership
Deferred Compensation Plan, dated December 27, 2011
(effective January 1, 2011).*
Amendment Number Seven to the MetLife Leadership
Deferred Compensation Plan, dated December 26, 2012
(effective January 1, 2013).*
10-K
001-15787
10.52
10-K
001-15787
10.53
10-K
001-15787
10.45
10-K
001-15787
10.46
10-K
001-15787
10.81
10-K
001-15787
10.84
10-K
001-15787
10.85
10-K
001-15787
10.86
10-K
001-15787
10.60
10-K
001-15787
10.52
10-K
001-15787
10.53
325
February 18,
2022
February 27,
2014
February 25,
2016
February 25,
2016
March 1,
2017
March 1,
2017
February 27,
2013
February 27,
2014
February 27,
2015
February 27,
2015
February 25,
2016
March 1,
2017
March 1,
2017
Filed or
Furnished
Herewith
Table of Contents
Exhibit
No.
10.26.9
10.26.10
10.26.11
10.26.12
10.26.13
10.26.14
10.26.15
10.27.1
10.27.2
10.27.3
10.27.4
10.27.5
10.27.6
10.27.7
10.27.8
10.27.9
10.27.10
10.27.11
10.27.12
10.27.13
10.27.14
10.27.15
10.28.1
Description
Amendment Number Eight to the MetLife Leadership
Deferred Compensation Plan, dated December 17, 2013
(effective January 1, 2014).*
Amendment Number Nine to the MetLife Leadership
Deferred Compensation Plan, dated December 30, 2014
(effective January 1, 2015).*
Amendment Number Ten to the MetLife Leadership
Deferred Compensation Plan, dated September 30, 2016
(effective October 1, 2016).*
Amendment Number Eleven to the MetLife Leadership
Deferred Compensation Plan, dated September 30, 2016
(effective October 1, 2016).*
Amendment Number Twelve to the MetLife Leadership
Deferred Compensation Plan, dated December 19, 2017
(effective January 1, 2017 and April 1, 2017).*
Amendment Number Thirteen to the MetLife Leadership
Deferred Compensation Plan, dated December 4, 2018
(effective January 1, 2019).*
Incorporated By Reference
Form
10-K
File Number
001-15787
Exhibit
10.54
10-K
001-15787
10.88
10-K
001-15787
10.56
10-K
001-15787
10.57
10-K
001-15787
10.29.13
10-K
001-15787
10.26.14
Amendment Number Fourteen to the MetLife Leadership
Deferred Compensation Plan, dated April 7, 2021 (effective
April 7, 2021).*
MetLife Plan for Transition Assistance for Officers, dated
April 21, 2014 (as amended and restated, effective April 1,
2014 (the “MPTA”)).*
10-K
001-15787
10.26.15
10-Q
001-15787
10.2
Amendment Number One to the MPTA, dated December
30, 2014 (effective January 1, 2015).*
10-K
001-15787
10.111
Amendment Number Two to the MPTA, dated March 30,
2016 (effective April 1, 2016).*
10-K
001-15787
10.77
Amendment Number Three to the MPTA, dated June 30,
2016 (effective June 30, 2016).*
10-K
001-15787
10.78
Amendment Number Four to the MPTA, dated October 24,
2016 (effective October 31, 2016).*
10-K
001-15787
10.79
Amendment Number Five to the MPTA, dated November 3,
2016 (effective October 1, 2016).*
10-K
001-15787
10.80
Amendment Number Six to the MPTA, dated July 20, 2017
(effective July 1, 2017).*
10-K
001-15787
10.31.7
Amendment Number Seven to the MPTA, dated May 1,
2018 (effective May 1, 2018).*
10-K
001-15787
10.31.8
Amendment Number Eight to the MPTA, dated September
6, 2018 (effective October 1, 2018).*
10-K
001-15787
10.31.9
Amendment Number Nine to the MPTA, dated November
15, 2018 (effective October 15, 2018).*
10-K
001-15787
10.31.10
Amendment Number Ten to the MPTA, dated November
15, 2018 (effective October 15, 2018).*
10-K
001-15787
10.31.11
Amendment Number Ten to the MPTA, dated December
23, 2020 (effective January 1, 2021).*
10-K
001-15787
10.27.12
Amendment Number Eleven to the MPTA, dated March 3,
2021 (effective March 1, 2021).*
10-K
001-15787
10.27.13
Amendment Number Twelve to the MPTA, dated April 7,
2021 (effective March 1, 2021 and April 7, 2021).*
10-K
001-15787
10.27.14
Amendment Number Thirteen to the MPTA, dated April 30,
2021 (effective April 12, 2021).*
10-K
001-15787
10.27.15
Adjustment of certain compensation terms for Michel
Khalaf, effective July 1, 2012.*
10-Q
001-15787
10.2
Filing Date
March 1,
2017
February 27,
2015
March 1,
2017
March 1,
2017
February 22,
2019
February 22,
2019
February 18,
2022
August 8,
2014
February 27,
2015
March 1,
2017
March 1,
2017
March 1,
2017
March 1,
2017
February 22,
2019
February 22,
2019
February 22,
2019
February 22,
2019
February 22,
2019
February 18,
2022
February 18,
2022
February 18,
2022
February 18,
2022
November 7,
2012
326
Table of Contents
Exhibit
No.
10.28.2
10.28.3
10.28.4
10.28.5
10.28.6
10.28.7
10.29
10.30
10.31
10.32.1
10.32.2
10.33
21.1
23.1
31.1
31.2
32.1
32.2
Description
Tax Equalization Agreement dated June 10, 2015 between
MetLife, Inc. and Michel Khalaf.*
Form
10-Q
File Number
001-15787
Exhibit
10.1
Incorporated By Reference
Offer Letter, dated March 25, 2009, between American Life
Insurance Company and Michel Khalaf.*
10-K
001-15787
Letter of Understanding, dated June 15, 2017, effective July
1, 2017, with Michel Khalaf.*
10-Q
001-15787
10-Q
001-15787
10.2
10.3
10.5
MetLife, Inc. and Metropolitan Life Insurance Company
Compensation Committee and Board of Directors
Resolutions of June 13, 2017 approving Michel Khalaf’s
eligibility to participate in the MetLife Deferred
Compensation Plan For Globally Mobile Employees.*
Amendment Number 1 to Letter of Understanding, Dated
February 26, 2019, Effective February 27, 2019, with
Michel Khalaf *
Confirmation of End of Employment and Waiver and
Release of Claims, Effective March 4, 2019, with Michel
Khalaf *
Sign-on Payments Letter, dated May 24, 2017, effective
July 10, 2017, between MetLife Group, Inc. and Susan
Podlogar.*
Sign-on Payments Letter, dated June 14, 2017, effective
September 11, 2017, between MetLife Group, Inc. and
Ramy Tadros.*
Letter Agreement entered May 4, 2018 between MetLife,
Inc. and John McCallion.*
8-K
001-15787
10.1
8-K
001-15787
10.2
10-Q
001-15787
10.1
10-Q
001-15787
10.2
Filed or
Furnished
Herewith
Filing Date
August 6,
2015
March 1,
2017
November 6,
2017
November 6,
2017
March 5,
2019
March 5,
2019
November 6,
2017
November 6,
2017
8-K
001-15787
10.1
May 7, 2018
Letter of Understanding, dated August 23, 2018, effective
September 1, 2018, with Kishore Ponnavolu.*
10-Q
001-15787
Description of Agreement between Kishore Ponnavolu and
MetLife, Inc. dated April 23, 2019.*
10-Q
001-15787
10.1
10.1
Sign-on Payments Letter, dated August 14, 2019, effective
November 19, 2019, between MetLife Group, Inc. and Bill
Pappas.*
10-K
001-15787
10.35
November 8,
2018
November 5,
2019
February 21,
2020
Subsidiaries of the Registrant.
Consent of Deloitte & Touche LLP.
Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase
Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
Document.
101.INS
XBRL Instance Document - the instance document does not
appear in the Interactive Data file because its XBRL tags
are embedded within the Inline XBRL document.
327
X
X
X
X
X
X
X
X
X
X
X
X
Table of Contents
Description
Form
File Number
Exhibit
Filing Date
Cover Page Interactive Data File (embedded within the
Inline XBRL document and included in Exhibit 101).
Filed or
Furnished
Herewith
X
Incorporated By Reference
Exhibit
No.
104
_________
* Indicates management contracts or compensatory plans or arrangements.
328
Table of Contents
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
February 23, 2023
Signatures
METLIFE, INC.
By
/s/ Michel A. Khalaf
Name: Michel A. Khalaf
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
/s/ Cheryl W. Grisé
Cheryl W. Grisé
/s/ Carlos M. Gutierrez
Carlos M. Gutierrez
/s/ Carla A. Harris
Carla A. Harris
/s/ Gerald L. Hassell
Gerald L. Hassell
/s/ David L. Herzog
David L. Herzog
/s/ R. Glenn Hubbard
R. Glenn Hubbard
/s/ Edward J. Kelly, III
Edward J. Kelly, III
/s/ William E. Kennard
William E. Kennard
/s/ Catherine R. Kinney
Catherine R. Kinney
/s/ Diana L. McKenzie
Diana L. McKenzie
/s/ Denise M. Morrison
Denise M. Morrison
/s/ Mark A. Weinberger
Mark A. Weinberger
Title
Director
Director
Director
Director
Director
Date
February 23, 2023
February 23, 2023
February 23, 2023
February 23, 2023
February 23, 2023
Chairman of the Board
February 23, 2023
Director
Director
Director
Director
Director
Director
February 23, 2023
February 23, 2023
February 23, 2023
February 23, 2023
February 23, 2023
February 23, 2023
329
Table of Contents
Signature
/s/ Michel A. Khalaf
Michel A. Khalaf
/s/ John D. McCallion
John D. McCallion
/s/ Tamara L. Schock
Tamara L. Schock
Title
Date
President,
Chief Executive Officer and Director
(Principal Executive Officer)
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Executive Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
February 23, 2023
February 23, 2023
February 23, 2023
330
ML_2021_CEO_letter_040822.indd 14
ML_2021_CEO_letter_040822.indd 14
4/10/23 9:01 AM
4/10/23 9:01 AM