MetLife 2006 Annual Report Download - page 124

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Liabilities for Unpaid Claims and Claim Expenses
Information regarding the liabilities for unpaid claims and claim expenses relating to property and casualty, group accident and non-
medical health policies and contracts, which are reported in future policyholder benefits and other policyholder funds, is as follows:
2006 2005 2004
Years Ended December 31,
(In millions)
BalanceatJanuary1,................................................. $6,977 $5,824 $5,412
Less:Reinsurancerecoverables......................................... (940) (486) (525)
NetbalanceatJanuary1,.............................................. 6,037 5,338 4,887
Acquisitions,net.................................................... — 160 —
Incurred related to:
Currentyear...................................................... 5,064 4,940 4,591
Prioryears....................................................... (329) (180) (29)
4,735 4,760 4,562
Paid related to:
Currentyear...................................................... (2,975) (2,841) (2,717)
Prioryears....................................................... (1,490) (1,380) (1,394)
(4,465) (4,221) (4,111)
NetbalanceatDecember31,............................................ 6,307 6,037 5,338
Add:Reinsurancerecoverables......................................... 937 940 486
BalanceatDecember31, .............................................. $7,244 $6,977 $5,824
As a result of changes in estimates of insured events in the prior years, the claims and claim adjustment expenses decreased by
$329 million in 2006 due to a reduction in prior year automobile bodily injury and homeowners’ severity, reduced loss adjustment
expenses, improved loss ratio liabilities for non-medical health claim liabilities and improved claim management.
In 2005, the claims and claim adjustment expenses decreased by $180 million due to a reduction in prior year automobile bodily injury
and homeowners’ severity as well as refinement in the estimation methodology for non-medical health long-term care claim liabilities.
In 2004, the claims and claim adjustment expenses decreased by $29 million due to a decrease in property and casualty prior year
unallocated expense liabilities and improved loss ratios in non-medical health long-term care.
Guarantees
The Company issues annuity contracts which may include contractual guarantees to the contractholder for: (i) return of no less than
total deposits made to the contract less any partial withdrawals (“return of net deposits”); and (ii) the highest contract value on a specified
anniversary date minus any withdrawals following the contract anniversary, or total deposits made to the contract less any partial
withdrawals plus a minimum return (“anniversary contract value” or “minimum return”). The Company also issues annuity contracts that
apply a lower rate of funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder
elects to annuitize (“two tier annuities”). These guarantees include benefits that are payable in the event of death or at annuitization.
The Company also issues universal and variable life contracts where the Company contractually guarantees to the contractholder a
secondary guarantee or a guaranteed paid up benefit.
Information regarding the types of guarantees relating to annuity contracts and universal and variable life contracts is as follows:
In the
Event of Death At
Annuitization In the
Event of Death At
Annuitization
2006 2005
At December 31,
(In millions)
Annuity Contracts(1)
Return of Net Deposits
Separateaccountvalue............................. $ 13,809 N/A $ 9,577 N/A
Netamountatrisk(2)............................... $ 1(3) N/A $ 3(3) N/A
Averageattainedageofcontractholders.................. 61years N/A 60years N/A
Anniversary Contract Value or Minimum Return
Separateaccountvalue............................. $ 87,351 $ 24,647 $ 80,368 $ 18,936
Netamountatrisk(2)............................... $ 1,927(3) $ 65(4) $ 1,614(3) $ 85(4)
Averageattainedageofcontractholders.................. 60years 60years 61years 59years
Two Tier Annuities
Generalaccountvalue ............................. N/A $ 296 N/A $ 229
Netamountatrisk(2)............................... N/A $ 53(5) N/A $ 36(5)
Averageattainedageofcontractholders.................. N/A 58years N/A 58years
F-41MetLife, Inc.
METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)