MetLife quarterly profit falls as investment returns slip
2022.08.03 23:41
FILE PHOTO – Vehicles drive in front of the MetLife Inc. building in Manhattan, New York, U.S., December 7, 2021. REUTERS/Andrew Kelly
(Reuters) -U.S. insurer MetLife Inc (NYSE:MET) reported a fall in quarterly profit on Wednesday as weaker investment returns offset gains from rising premiums.
Metlife reported adjusted earnings of $1.63 billion, or $2 per share, for the second quarter ended June 30, compared with $2.1 billion, or $2.37 per share, a year earlier.
Adjusted earnings of the insurer’s Latin America business saw a 175% jump, partially offsetting a 13% decline in its U.S. business and a 26% slump in Asia.
Overall net investment income fell by 32% to $3.58 billion, hurt by changes in the estimated fair value of certain securities.
Interest rates plumbed new lows during the pandemic, hitting the investment portfolios of large life insurers and further dragging industry earnings under pressure from high COVID-19 death rates.
While insurers have enjoyed a rebound in returns on investment in recent months, growing worries of a looming recession, geopolitical turmoil and rate hikes have hit investment income.
MetLife also said its net derivative losses came in at $1.2 billion, compared with a gain of $421 million a year earlier.
The insurer holds a book of derivatives to hedge against market volatility. Such gains do not indicate the actual performance of the company, but reflect the effect of accounting rules, an issue that has occurred in some previous quarters.
