MetLife 2010 Annual Report Download - page 2

Chairman’s Letter
To my fellow shareholders:
Most certainly, 2010 will be a year that people will look back upon as a time of significant
transformation and accomplishment for MetLife. This is no small statement given the
tremendous milestones of growth and innovation that define MetLife’s 143-year history.
But it is also fitting in that we truly demonstrated the power of this great company and our
focus on ensuring that we deliver on the promises we have made to our customers, who
now total 90 million around the globe.
Without a doubt, our acquisition of American Life Insurance Company (Alico) was a tremendous accomplishment in 2010 as
it transformed MetLife into a global life insurance and employee benefits powerhouse. At its core, this acquisition benefits us in
many ways, giving MetLife leadership positions in key markets, including Japan, Europe and the Middle East. Furthermore, it will
be accretive to both our earnings and return on equity in 2011 and provides opportunities to expand the strong relationships we
have built with FORTUNE 500»clients in the U.S. But even more noteworthy is that we were able to pursue and complete this
$16.4 billion acquisition because of the high priority we placed on our financial strength before and during the financial crisis. The
foresight, experience and risk management expertise that define the culture of MetLife have truly served us, our customers and
our shareholders very well.
Strong, Diverse Businesses
In 2010, we continued our focus on growth, even as we completed the largest acquisition in MetLife’s history. Total revenues
grew 28% over 2009 to $52.7 billion as premiums grew 4%, fees increased 16% and net investment income recovered
significantly, growing 19%. We have demonstrated industry-leading strength in growing our top line over the past two years — a
time during which there has clearly been considerable economic uncertainty. We are pleased to be a top provider in our chosen
markets, but we will only pursue revenue growth where we know we can generate bottom line growth as well.
To that end, bottom line improvements were very impressive in 2010, with earnings increasing significantly over
2009. Book value per common share rose 16% over year-end 2009 to $44.18 as our investment portfolio moved
from being in a net unrealized loss position to having net unrealized gains at year-end 2010.
Briefly, I would like to share some highlights of our businesses’ performance this year.
Our U.S. Business is an industry leader that meets consumers’ protection and savings needs wherever it is
convenient for them — at the workplace, through a MetLife or third-party representative and, more recently, by
offering term life insurance online as well. In 2010, U.S. Business premiums, fees and other revenues increased
slightly over 2009 to $28.9 billion while earnings grew considerably. Results within U.S. Business included:
• Premiums, fees and other revenues in Insurance Products were $20.2 billion, which is consistent with
2009’s performance. Top line results in this business benefited from growth in our group life and dental
businesses — two product lines in which MetLife is a leader. We also made further progress on our efforts to
help consumers address their life insurance protection needs by making it easier for the underserved middle
market to purchase term life insurance through metlife.com. Also, in early 2011, we launched MetLife Promise
Whole Life, a new permanent insurance product that offers long-term protection and the advantages of
guaranteed cash value that grows each year, tax-deferred, along with dividend participation.
•Retirement Products premiums, fees and other revenues were $3.3 billion, up 19% due to strong growth in
fee income as profits in the segment more than doubled. Annuity deposits also were strong at $20.1 billion
and assets grew 14% over 2009 to reach a record $162.7 billion. We continue to be a leader in the annuity
business, with clients valuing the guaranteed income these products generate in retirement.
•InCorporate Benefit Funding — which specializes in structured risk solutions — premiums, fees and
other revenues were $2.4 billion. At the same time, the business experienced strong growth in profitability and
a higher return on equity over 2009. During the year, we had solid sales of both structured settlements and