MetLife, Inc. is the holding corporation for the Metropolitan Life Insurance Company, or MetLife for short, and its affiliates. MetLife is among the largest global providers of insurance, annuities, and employee benefit programs, with 90 million customers in over 60 countries. The firm was founded on March 24, 1868.
On January 6, 1915, MetLife completed the mutualization process, changing from a stock life insurance company owned by individuals to a mutual company operating without external shareholders and for the benefit of policyholders. The company went public in 2000. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia's Pacific region, Europe, and the Middle East. MetLife serves 90 of the largest Fortune 500 companies. The company's principal offices are located at 1095 Avenue of the Americas in Midtown Manhattan, New York City, though it retains some executive offices and its boardroom in the MetLife Building, located at 200 Park Avenue, New York City, which it sold in 2005.
History
Early years
The predecessor company to MetLife began in 1863 when a group of New York City businessmen raised $100,000 to found the National Union Life and Limb Insurance Company. The company insured Civil War sailors and soldiers against disabilities due to wartime wounds, accidents, and sickness. On March 24, 1868, it became known as Metropolitan Life Insurance Company and shifted its focus to the life insurance business.
A severe business depression that began with the Panic of 1873 forced the company to contract, until it reached its lowest point in the late 1870s. After observing the insurance industry in Great Britain in 1879, MetLife President Joseph F. Knapp brought "industrial" or "workingmen's" insurance programs to the United States - insurance issued in small amounts on which premiums were collected weekly or monthly at the policyholder's home. By 1880, sales had exceeded a quarter million of such policies, resulting in nearly $1 million in revenue from premiums. In 1909, MetLife had become the nation's largest life insurer in the U.S., as measured by life insurance in force (the total value of life insurance policies issued).
In 1907, the Metropolitan Life Insurance Company tower was commissioned to serve as MetLife's 23rd Street headquarters in Lower Manhattan. Completed two years later, the building was the world's tallest until 1913 and remained the company's headquarters until 2005. For many years, an illustration of the building (with light emanating from the tip of its spire and the slogan, "The Light That Never Fails") featured prominently in MetLife's advertising. By 1930, MetLife insured every fifth man, woman, and child in the United States and Canada. During the 1930s, it also began to diversify its portfolio by reducing the percentage of individual mortgages in favor of public utility bonds, investments in government securities, and loans for commercial real estate. The company financed the construction of the Empire State Building in 1929 as well as provided capital to build Rockefeller Center in 1931. During World War II, MetLife placed more than 51 percent of its total assets in war bonds, and was the largest single private contributor to the Allied cause.
Postwar
During the postwar era, the company expanded its suburban presence, decentralized operations, and refocused its career agency system to serve all market segments. It also began to market group insurance products to employers and institutions. By 1979, operations were segmented into four primary businesses: group insurance, personal insurance, pensions, and investments. In 1981, MetLife purchased what became known as the MetLife building for $400 million from a group that included Pan American World Airways.
De-mutualization and IPO
In 2000, MetLife converted from a mutual insurance company operated for the benefit of its policyholders to a for-profit public company. The de-mutualization process allowed MetLife to enter unrelated insurance businesses and increase executive compensation. Policyholders received some stock in the new company in this process. MetLife was accused of breaching federal securities laws by misrepresenting and omitting information in materials given to policyholders during this process, resulting in years of litigation ending with a $50 million settlement in 2009.
Acquisitions, sales, and major deals
- 1992 - merged with Mutual Life Insurance Company, the only African-American life insurer in New York, in 1992.
- 1992.. -- acquired Executive Life's single premium deferred annuity business, which was worth approximately $1.2 billion. MetLife also acquired the firm's life insurance business, valued at about $260 million.
- 1995 - purchased New England Mutual Life Insurance Company.
- 1997 - acquired Security First Group in 1997 for $377 million.
- 1999 - acquired Lincoln National Corporation.
- 1999 - bought out reinsurance provider GenAmerica Corporation for $1.2 billion, as well as its subsidiaries, Reinsurance Group of America and Conning Corporation. That year, the company had grown to serve 7 million policyholders.
- 2000 - de-mutualization and IPO. The initial public offering was valued at $6.5 billion, which was the largest IPO to that date in U.S. financial history. MetLife policyholders were asked to choose a cash or stock stake. This IPO made MetLife the most widely owned stock in the United States, and it raised MetLife's value to over $4 billion. By 2000, MetLife's reported number of policyholders had risen to 11 million, and that year it had become the United States' number one life insurer, surpassing Prudential, according to The New York Times.
- 2000 - $470 million voice and data network management deal with AT&T Solutions.
- 2001 - acquired Grand Bank of Kingston, New Jersey, which was renamed MetLife Bank
- 2001 - invested $1 billion in the U.S. stock market during 2001, immediately after the September 11th terrorist attacks.
- 2005 - acquired Citigroup's Travelers Life & Annuity and all of Citigroup's international insurance businesses for $11.8 billion. At the time of the deal, which was completed on July 1, 2005, the Travelers acquisition made MetLife the largest individual life insurer in North America based on sales.
- 2006 - opened joint-venture insurance company in Shanghai, in May 2006.
- 2006 - sold Peter Cooper Village, or Stuyvesant Town, the largest apartment complexes in New York City at the time, for $5.4 billion. MetLife had developed the apartment complexes between 1945 and 1947, to house veterans returning home from serving in World War II.
- 2010 - bought Alinco Health Insurance from AIG for $15.5 billion.
- 2011 - sold MetLife bank to GE Capital, exiting banking business.
Current era
In 2004, MetLife continued to hold its position as the largest life insurer in the United States, according to The San Francisco Gate. The company had $2.5 trillion in policies written, $350 billion in assets under management, over 12 million customers in the United States, 8 million customers outside the United States, and a net income in 2003 of $2.2 billion. That year, Barron's reported that 13 million American households owned at least one product from MetLife.
MetLife named Robert H. Benmosche as chairman and CEO in July 1999. Benmosche occupied the position until 2006, when he was replaced by C. Robert Henrikson.
The company's sales grew 11.5% between 2008 and 2009, despite the national recession. In 2011, CEO Robert Henrikson was replaced by Steven A. Kandarian, a former private-equity executive.
In 2015, MetLife was ranked as number one on Fortune magazine's list of World's Most Admired Companies in the Insurance: Life and Health category.
"Too big to fail"
In 2012, MetLife failed the Federal Reserve's Comprehensive Capital Analysis and Review stress test, intended to predict the potential failure of the company in a recession. The Fed stated that the minimum total risk-based capital ratio should be 8% and it estimated that MetLife at only 6%. The company had requested approval for a $2 billion share repurchase to prop up the stock price, along with an increased dividend. Because MetLife owned MetLife Bank, it was subject to stricter financial regulation. To escape that level of regulation, MetLife announced the sale of its banking unit to GE Capital. On November 2, 2012, MetLife said it is selling its $70 billion mortgage servicing business to JPMorgan Chase for an undisclosed amount. Both sales were part of its strategy to focus on the insurance side of its business.
The attempt to escape "too big to fail" regulation was not successful. In September 2014, the U.S. government observed the 2010 Dodd-Frank financial reform law by proposing the application of an official label to MetLife as "systemically important" to the American economy. If implemented, MetLife would be subject to different sets of rules and regulations, with increased oversight from the Federal Reserve. The company appealed this proposal in November 2014. In December 2014, federal regulators decided that MetLife required the special regulations reserved for financial companies and organizations deemed "systemically important," or "too big to fail". Other companies already designated as "systemically important" included AIG, General Electric and Prudential. MetLife announced in January 2015 that it would file a lawsuit against the District of Columbia to overturn the federal regulators' decision. MetLife continues to litigate this issue as of mid-2015, with the US Government asking that their challenge be dismissed.
Fines
On August 7, 2012, it was announced that MetLife will pay $3.2 million in fines after the Federal Reserve charged it used unsafe and unsound practices in handling its mortgage servicing and foreclosure operations.
In 2014, MetLife paid $23 million to settle multiple lawsuits over junk fax operations used to generate leads for life insurance sales.
In 2015, MetLife Home Loans LLC paid $123.5 million to the U.S. Department of Justice to resolve allegations it knowingly made mortgages insured by the U.S. government that didn't meet federal underwriting requirements.
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Products and services
Insurance products accounted for 53% of MetLife's 2009 $49 billion of revenue. MetLife is the largest life insurer in the United States and Mexico and is the second-largest foreign provider of insurance in Japan and worldwide its customers total 90 million individuals.
Life insurance
MetLife's individual life insurance products and services comprise term life insurance and several types of permanent life insurance, including whole life, universal life, and final expense whole life insurance. These services vary in regards to the duration and amount of coverage available and whether a medical exam is required for coverage. The company also offers group life insurance, provided through employers, which consists of term life, permanent life, and accidental death and dismemberment coverage. MetLife is the largest life insurer in the United States, based on life insurance in-force.
Dental
MetLife offers group dental benefit plans for individuals, employees, retirees and their families and provides dental plan administration for over 20 million people. Plans include MetLife's Preferred Dentist Program (PPO) and the SafeGuard DHMO (available for both individuals and employees in CA, FL, and TX). As of May 2010, MetLife's dental PPO network included over 135,000 participating dentist locations nationwide while the dental HMO network included more than 13,000 participating dentist locations in California, Florida and Texas. MetLife also administers dental continuing education program for dentists and allied health care professionals, which are recognized by the American Dental Association (ADA) and the Academy of General Dentistry (AGD).
Disability
MetLife provides disability products for individuals as well as employee and association groups who receive them through their employer. For individuals, the company's individual disability income insurance can replace a portion of lost income if an individual is unable to work due to sickness or injury. MetLife offers several individual disability income policies, including MetLife Income Guard, OMNI Advantage, OMNI Essential, Business Overhead Expense, and Buy-Sell. The policy options provided by the company vary in terms of eligibility and the provided coverage. For groups, MetLife offers short term disability insurance and long term disability insurance. Short term disability insurance is structured to replace a portion of an individual's income during the initial weeks of a disabling illness or accident. Long term disability Insurance serves to replace a portion of an individual's income during an extended period of a disabling illness or accident. The company also maintains an absence management product which allows employers to track and manage both planned and unplanned employee absences. The product, which MetLife calls MetLife Total Absence Management, is structured for businesses with 1,000 or more employees.
Annuities
MetLife is among the largest providers of annuities in the world, recording $22.4 billion in sales during 2009. MetLife offers annuities which consist of fixed annuities, variable annuities, deferred annuities and immediate annuities. In 1921, MetLife was the first company to issue a group annuity contract. More recently in 2004, it was the first insurer to introduce a longevity insurance product. As of December 31, 2009, MetLife globally managed group annuity assets of $60 billion with $34 billion of transferred pension liabilities and provided benefit payments to over 600,000 annuitants per month.
Auto & Home
MetLife Auto & Home is the brand name for MetLife's nine affiliate personal lines insurance companies. Collectively these companies offer personal lines property and casualty insurance policies in all 50 states and the District of Columbia. The flagship company in the MetLife Auto & Home group, Metropolitan Property and Casualty Insurance Company, was founded in 1972. MetLife Auto & Home companies presently have over 2.7 million active policies and service 58 of the Fortune 100 companies.
MetLife's home insurance solutions include homeowners insurance, condo insurance, renters insurance, insurance for landlords, and mobile home insurance. The available policies for MetLife's home insurance provide coverage for possessions, property damage from natural disaster or theft, and various legal expenses incurred resulting from injuries sustained on an individual's property. The companies also sell RV, ATV, boat, mobile home, collectible vehicle, and motorcycle policies and offers flood insurance policies as a participant in the National Flood Insurance Program (NFIP), which is managed by the federal government. MetLife's various types of coverage for auto insurance include liability protection, collision and comprehensive coverage, personal injury protection, rental car coverage, and uninsured and underinsured motorists coverage. Through an arrangement with Hyatt Legal Plans, a subsidiary of MetLife, MetLife Auto & Home underwrites group legal plans in many states.
It was the first national insurer in the U.S. to offer identity-theft resolution services at no extra premium and as of 2012 continues to do so today in most U.S. states. In 2010, MetLife Auto & Home began offering their GrandProtect plan in most states. This GrandProtect policy simplifies complex insurance needs by combining a client's home, valuable items, autos, RVs, and boats into one comprehensive policy package. The ultimate benefits to the consumer are having one bill, only one deductible, comprehensive coverage, and typically lower rates than trying to get each policy individually.
Other products
MetLife's products also include critical illness insurance. Financial services include fee-based financial planning, retirement planning, wealth management, 529 Plans, banking, and commercial and residential mortgages. The company also provides retirement plan and other financial services to healthcare, education, and not-for-profit organizations. The MetLife Center for Special Needs Planning is a group of planners which serve families and individuals with special needs. In 2014, MetLife launched MetLife Defender, a digital identity theft protection product.
International presence
Outside of the U.S., MetLife operates in Latin America, Europe, Asia's Pacific region, and the Middle East, with leading market positions in Mexico, Japan, South Korea and Chile.
On March 8, 2010, Met Life announced its intent to purchase the international leader life-insurance business, American Life Insurance Company (Alico), from American International Group (AIG). MetLife, which completed the deal on November 1, 2010, paid approximately $7.2 billion in cash and $9.0 billion in MetLife equity and other securities. The securities portion of the deal consisted of 78.2 million shares of MetLife common stock, 6.9 million shares of contingent convertible preferred stock and 40 million equity units. The values of the common and preferred stock were based on the closing price of MetLife's common stock on October 29. Upon completion of the purchase, MetLife became a leading competitor in Japan, the world's second-largest life insurance market, and moved into a top 5 market position in many high growth emerging markets in Central and Eastern Europe, such as Romania, the Middle East and Latin America. The deal added 20 million customers to MetLife's 70 million and according to Barron's more than doubled the percentage of operating profits that MetLife gets abroad to 40%.
In India MetLife has an affiliate company India Insurance Company Limited (MetLife) which has operated in India since 2001. This company has its headquarters in Bangalore and Gurgaon and was jointly owned by MetLife and a few local Indian financial companies. In 2012 an agreement was made with local Indian bank, the Punjab National Bank to establish a strategic alliance and for it to take a 30% share in MetLife India. The state owned bank would in return sell MetLife insurance products in its branches.
MetLife Foundation
MetLife Foundation is MetLife's independent charitable and grant-awarding foundation. It was founded in 1976 and had provided over $650 million in grants by January 2015.The foundation has partnered with and donated to a variety of organizations, including Habitat for Humanity since 2010 and the Martin Luther King, Jr. National Memorial Project Foundation since 2008. In 2013, the MetLife Foundation announced a new focus on financial inclusion, including educational programs on basic financial planning for disadvantaged children and financial services aimed at low-income communities.
Relationship with Peanuts
MetLife licenses Snoopy and other Peanuts characters for promotional purposes from the Iconix Brand Group, which owns the promotional rights to the works of Charles M. Schultz. In 2010, Iconix formed a joint venture with Schulz's heirs, buying out E.W. Scripps Co. and United Features Syndicate for $175 million. MetLife is reported to pay $12 million per year to Iconix for licensing rights. Prior to the Iconix deal, MetLife had licensed the characters from other rights-holders.
The Peanuts-based campaign was developed by the advertising agency Young and Rubicam. MetLife also has used Foote Cone & Belding to develop Peanuts-related promotions.
Blimp and sports sponsorship
The MetLife blimp program began in 1987 with the "Snoopy 1" airship and, in 1994, expanded to include the "Snoopy 2" airship. The program provides aerial coverage to over 80 major sporting events every year and is currently the official aerial coverage provider of the PGA Tour. "Snoopy 1" and "Snoopy 2" also provide overhead television coverage for the NFL, CBS College Football, the LPGA, the NBA Finals, Copa Chile, the Preakness Stakes, and the Kentucky Derby. On August 23, 2011, MetLife agreed to a 25-year sponsorship deal to rename New Meadowlands Stadium in East Rutherford, New Jersey, home of the NFL's New York Giants and New York Jets to MetLife Stadium.
MetLife and the "Ideal weight"
In 1959, The Metropolitan Life Insurance Company (as it was known at the time) released tables of the best weight for each height for longevity, based on their collected insurance data. These tables showed the "desirable weights". In 1983, they released tables showing the "ideal" weights for greatest longevity; this information was based on data collected in the Build Study of 1979 collected by the Society of Actuaries. This data followed patients for 18 years (from 1954-1972) and was collected from 25 life insurance companies in Canada and the USA, representing 4.2 million people. These "ideal" weights were higher than the prior "desirable" weights, this was attributed to an increase in muscle mass due to improved fitness levels among the population. This study is still the largest available pool of data for this purpose. It was noticed that the average weights in the population are higher than the ideal weights for survival. The '''Metropolitan Tables''' included ''small'', ''medium'' and ''large'' frames, based on elbow-girth measured using calipers, as the elbows do not develop adipose tissue. They presented weight ranges for height, sex and body frame (again associated with the lowest mortality) The mid-point of the ideal weight for the medium frames for each height was selected as the "ideal" weight used for calculations of "excess weight" (initial weight-ideal weight). This led to a formula to calculate the ideal weight used by bariatric surgeons, but it had lost considerable accuracy by 2007, again due to improvements in medical care and in public health.
Awards
MetLife was named the "Best Managed Insurance Company for 2008" by Forbes magazine. For three consecutive years (2008-2010) the company has also appeared on FORTUNE's list of the most-admired companies. MetLife was recognized by Diversity MBA magazine as one of its "Top 50 Companies for Diverse Managers" in 2007, 2008, 2009 and 2010. The magazine highlighted MetLife's Enterprise Diversity Council and noted how the council helps "set direction, communicate strategy and ensure consistency of the diversity message across MetLife." For eleven consecutive years (1999-2009) MetLife has been named by Working Mother magazine as one of the "100 Best Companies for Working Mothers," specifically for offering flexible schedules, remote working capabilities and various child care options. MetLife has also been awarded a perfect score for seven consecutive years (2004-2010) by the Human Rights Campaign Foundation for its "Corporate Equality Index-Best Companies for People who are Gay, Lesbian, Bisexual, or Transgendered."
Subsidiary and affiliate companies
Other MetLife subsidiaries and affiliates include MetLife Investors, MetLife Bank, MetLife Securities, Metropolitan Property and Casualty Insurance Company and its subsidiaries, General American, Hyatt Legal, MetLife Insurance Company of Connecticut, MetLife Resources, New England Financial, Walnut Street Securities, Inc., Safeguard Health Enterprises, Inc., and Tower Square Securities, Inc., Cigna
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