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January 13, 2016

MetLife considering separation of retail segment

PHOTO | Stephen Cohen via Flickr

MetLife has announced a plan to pursue the separation of a substantial portion of its U.S. retail segment. MetLife is currently evaluating structural alternatives for such a separation, including a public offering of shares in an independent, publicly traded company, a spin-off, or a sale.

MetLife, which has operations in Bloomfield, is also undertaking preparations to complete the required financial statements and disclosures that would be required for a public offering or spin-off. It said in a statement the completion of a transaction taking the U.S. retail segment public would depend on, among other things, the U.S. Securities and Exchange Commission filing and review process as well as market conditions.

All of the company’s other reporting segments – Group, Voluntary and Worksite Benefits; Corporate Benefit Funding; and, Asia, Latin America, and Europe, the Middle East and Africa – would remain part of MetLife. In the U.S. market, MetLife said it will remain the leader in employee benefits through its group, voluntary and worksite benefits business and a major provider of pension and retirement products through its corporate benefit funding business.

MetLife plans to include the following entities in the new company: MetLife Insurance Co. USA, General American Life Insurance Co., Metropolitan Tower Life Insurance Co. and several subsidiaries that have reinsured risks underwritten by MetLife Insurance Co. USA.

The new company would represent, as of Sept.. 30, 2015, approximately 20 percent of the operating earnings of MetLife and 50 percent of the operating earnings of MetLife’s U.S. retail segment. The new company would have approximately $240 billion of total assets, including $45 billion currently reported in the Corporate Benefit Funding and Corporate and Other segments.

Approximately 60 percent of current U.S. variable annuity account values, including 75 percent of variable annuities with living benefit guarantees, are in entities that would be a part of the new company. The new company would also contain approximately 85 percent of the U.S. universal life with secondary guarantee business.

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