MetLife 2010 Annual Report Download - page 83

This quantitative measure of risk has increased by $1,325 million, or 33%, to $5,382 million at December 31, 2010 from $4,057 million at
December 31, 2009. Excluding the Acquisition which increased risk by $647 million, the quantitative measure of risk increased by
$678 million or 17% at December 31, 2010 from December 31, 2009. The increase in risk is due to a change in the net assets and
liabilities bases of $641 million. In addition, an increase of $954 million was due to the use of derivatives employed by the Company
($445 million), an increase in the duration of the investment portfolio ($389 million), and an increase in premiums, reinsurance and other
receivables ($120 million). This increase in risk was partially offset by a decrease in interest rates across the long end of the Swaps and
U.S. Treasury curves resulting in a decrease of $424 million. Additionally, net embedded derivatives within liability host contracts increased by
$520 million, partially due to a change made in the second quarter of 2010 related to how the Company estimates the spread over the swap
curve for purposes of determining the discount rate used to value those derivatives, which caused a corresponding decrease in risk. The
remainder of the fluctuation is attributable to numerous immaterial items.
80 MetLife, Inc.