MetLife profit soars as claims drop, derivatives loss narrows

Wed Feb 12, 2014 5:07pm EST

A statue stands atop Grand Central Station in front of the MetLife building in New York, October 8, 2008. REUTERS/Lucas Jackson

A statue stands atop Grand Central Station in front of the MetLife building in New York, October 8, 2008.

Credit: Reuters/Lucas Jackson

(Reuters) - MetLife Inc (MET.N), the largest U.S. life insurer, reported a better-than-expected nine-fold rise in quarterly profit, helped by lower claims and a smaller loss on its derivatives program.

MetLife, whose shares were up about 1 percent after the bell, has long had a substantial derivatives program designed to offset volatility in interest rates and foreign currencies.

The insurer's net loss on derivatives fell to $358 million in the fourth quarter ended December 31, after tax and other adjustments, from $924 million a year earlier.

Total claims and benefits paid to policyholders fell 3.4 percent to $10.34 billion.

Net profit rose to $877 million, or 77 cents per share, from $96 million, or 9 cents per share.

On an operating basis, MetLife earned $1.37 per share. Analysts had expected earnings of $1.30 per share, according to Thomson Reuters I/B/E/S.

Operating earnings were boosted by strong results across the company's group, voluntary and worksite benefits business in the Americas division.

Revenue in that business rose 38 percent to $231 million, helped by lower catastrophe losses. Operating earnings in the company's retail business rose 4 percent to $658 million.

Net investment income rose 2.5 percent to $5.3 billion.

Rival Prudential Financial Inc (PRU.N) reported a lower-than-expected adjusted operating income last week due to pretax losses related to the weakening of Japanese yen against the dollar.

MetLife has been focusing on emerging markets such as Asia and Latin America to boost profit. In December, it bought a majority stake in AmLife Insurance from its holding company AMMB Holdings Bhd (AMMB.KL) for about $249 million to expand into Southeast Asia.

It also signed a 10-year distribution agreement with Citigroup Inc (C.N) to sell credit insurance products to Citi clients in emerging markets till 2025.

MetLife shares closed at $49.88 on the New York Stock Exchange on Wednesday.

(Reporting by Avik Das in Bangalore; Editing by Don Sebastian)