MetLife 2007 Annual Report Download - page 137

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 policy benefits and other policyholder funds, is as follows:
2007 2006 2005
Years Ended December 31,
(In millions)
BalanceatJanuary1,................................................. $7,244 $6,977 $5,824
Less:Reinsurancerecoverables......................................... (937) (940) (486)
NetbalanceatJanuary1,.............................................. 6,307 6,037 5,338
Acquisitions,net.................................................... — — 160
Incurred related to:
Currentyear...................................................... 5,796 5,064 4,940
Prioryears....................................................... (325) (329) (180)
5,471 4,735 4,760
Paid related to:
Currentyear...................................................... (3,297) (2,975) (2,841)
Prioryears....................................................... (1,600) (1,490) (1,380)
(4,897) (4,465) (4,221)
NetbalanceatDecember31,............................................ 6,881 6,307 6,037
Add:Reinsurancerecoverables......................................... 955 937 940
BalanceatDecember31, .............................................. $7,836 $7,244 $6,977
During 2007 and 2006, as a result of changes in estimates of insured events in the respective prior year, claims and claim adjustment
expenses associated with prior years decreased by $325 million and $329 million, respectively, due to a reduction in prior year automobile
bodily injury and homeowners’ severity, reduced loss adjustment expenses, improved loss ratio 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.
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
2007 2006
December 31,
(In millions)
Annuity Contracts(1)
Return of Net Deposits
Separateaccountvalue............................. $ 18,573 N/A $ 13,809 N/A
Netamountatrisk(2)............................... $ 52(3) N/A $ 1(3) N/A
Averageattainedageofcontractholders.................. 61years N/A 61years N/A
Anniversary Contract Value or Minimum Return
Separateaccountvalue............................. $ 87,168 $ 29,603 $ 87,351 $ 24,647
Netamountatrisk(2)............................... $ 2,331(3) $ 441(4) $ 1,927(3) $ 65(4)
Averageattainedageofcontractholders.................. 58years 60years 60years 60years
Two Tier Annuities
Generalaccountvalue ............................. N/A $ 286 N/A $ 296
Netamountatrisk(2)............................... N/A $ 51(5) N/A $ 53(5)
Averageattainedageofcontractholders.................. N/A 60years N/A 58years
F-41MetLife, Inc.
MetLife, Inc.
Notes to Consolidated Financial Statements — (Continued)