MetLife 2006 Annual Report Download - page 69

Less than
20% 20% or more Less than 20% 20% or more Less than 20% 20% or more
Cost or Amortized
Cost Gross Unrealized Loss Number of Securities
December 31, 2005
(In millions, except number of securities)
Lessthansixmonths .................................. $ 92,512 $213 $1,707 $51 11,441 308
Sixmonthsorgreaterbutlessthanninemonths................. 3,704 5 108 2 456 7
Ninemonthsorgreaterbutlessthantwelvemonths .............. 5,006 — 133 — 573 2
Twelvemonthsorgreater................................ 7,555 23 240 5 924 8
Total............................................ $108,777 $241 $2,188 $58 13,394 325
At December 31, 2006 and 2005, $2.4 billion and $2.2 billion, respectively, of unrealized losses related to securities with an unrealized
loss position of less than 20% of cost or amortized cost, which represented 2% of the cost or amortized cost of such securities.
At December 31, 2006, $24 million of unrealized losses related to securities with an unrealized loss position of 20% or more of cost or
amortized cost, which represented 29% of the cost or amortized cost of such securities. Of such unrealized losses of $24 million,
$12 million related to securities that were in an unrealized loss position for a period of less than six months. At December 31, 2005,
$58 million of unrealized losses related to securities with an unrealized loss position of 20% or more of cost or amortized cost, which
represented 24% of the cost or amortized cost of such securities. Of such unrealized losses of $58 million, $51 million related to securities
that were in an unrealized loss position for a period of less than six months.
The Company held eight fixed maturity securities and equity securities each with a gross unrealized loss at December 31, 2006 each
greater than $10 million. These securities represented 7%, or $169 million in the aggregate, of the gross unrealized loss on fixed maturity
securities and equity securities. The Company held one fixed maturity security with a gross unrealized loss at December 31, 2005 greater
than $10 million. This security represented less than 1%, or $10 million of the gross unrealized loss on fixed maturity and equity securities.
At December 31, 2006 and 2005, the Company had $2.4 billion and $2.2 billion, respectively, of gross unrealized loss related to its
fixed maturity and equity securities. These securities are concentrated, calculated as a percentage of gross unrealized loss, as follows:
2006 2005
December 31,
Sector:
U.S.corporatesecurities.......................................................... 43% 37%
Residentialmortgage-backedsecurities ................................................ 14 21
Foreigncorporatesecurities........................................................ 16 20
U.S.Treasury/agencysecurities ..................................................... 10 4
Commercialmortgage-backedsecurities................................................ 6 9
Other....................................................................... 11 9
Total.................................................................. 100% 100%
Industry:
Industrial .................................................................... 23% 22%
Mortgage-backed............................................................... 20 30
Government .................................................................. 12 5
Finance ..................................................................... 11 11
Utility....................................................................... 10 6
Other....................................................................... 24 26
Total.................................................................. 100% 100%
As described previously, the Company performs a regular evaluation, on a security-by-security basis, of its investment holdings in
accordance with its impairment policy in order to evaluate whether such securities are other-than-temporarily impaired. One of the criteria
which the Company considers in its other-than-temporary impairment analysis is its intent and ability to hold securities for a period of time
sufficient to allow for the recovery of their value to an amount equal to or greater than cost or amortized cost. The Company’s intent and
ability to hold securities considers broad portfolio management objectives such as asset/liability duration management, issuer and industry
segment exposures, interest rate views and the overall total return focus. In following these portfolio management objectives, changes in
facts and circumstances that were present in past reporting periods may trigger a decision to sell securities that were held in prior reporting
periods. Decisions to sell are based on current conditions or the Company’s need to shift the portfolio to maintain its portfolio management
objectives including liquidity needs or duration targets on asset/liability managed portfolios. The Company attempts to anticipate these
types of changes and if a sale decision has been made on an impaired security and that security is not expected to recover prior to the
expected time of sale, the security will be deemed other-than-temporarily impaired in the period that the sale decision was made and an
other-than-temporary impairment loss will be recognized.
Based upon the Company’s current evaluation of the securities in accordance with its impairment policy, the cause of the decline being
principally attributable to the general rise in rates during the holding period, and the Company’s current intent and ability to hold the fixed
maturity and equity securities with unrealized losses for a period of time sufficient for them to recover, the Company has concluded that the
aforementioned securities are not other-than-temporarily impaired.
66 MetLife, Inc.