|
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þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
13-4075851
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
200 Park Avenue, New York, N.Y.
|
|
10166-0188
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
þ
|
Accelerated filer
|
¨
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Non-accelerated filer
|
¨
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Smaller reporting company
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¨
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Emerging growth company
|
¨
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
|
Common Stock, par value $0.01
|
MET
|
New York Stock Exchange
|
Floating Rate Non-Cumulative Preferred Stock, Series A, par value $0.01
|
METPrA
|
New York Stock Exchange
|
Depositary Shares each representing a 1/1000
th
interest in a share of 5.625% Non-Cumulative Preferred Stock, Series E
|
METPrE
|
New York Stock Exchange
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Page
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Item 1.
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Financial Statements (Unaudited) (at March 31, 2019 and December 31, 2018 and for the Three Months Ended March 31, 2019 and 2018)
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Item 2.
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Item 3.
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Item 4.
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||
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|
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Item 1.
|
||
Item 1A.
|
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Item 2.
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Item 6.
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||
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March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
||||
Investments:
|
|
|
|
|
||||
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $288,559 and $286,816, respectively)
|
|
$
|
308,410
|
|
|
$
|
298,265
|
|
Equity securities, at estimated fair value
|
|
1,432
|
|
|
1,440
|
|
||
Contractholder-directed equity securities and fair value option securities, at estimated fair value (includes $3 and $4, respectively, relating to variable interest entities)
|
|
13,245
|
|
|
12,616
|
|
||
Mortgage loans (net of valuation allowances of $350 and $342, respectively; includes $276 and $299, respectively, under the fair value option)
|
|
78,601
|
|
|
75,752
|
|
||
Policy loans
|
|
9,670
|
|
|
9,699
|
|
||
Real estate and real estate joint ventures
|
|
10,022
|
|
|
9,698
|
|
||
Other limited partnership interests
|
|
6,787
|
|
|
6,613
|
|
||
Short-term investments, principally at estimated fair value
|
|
4,524
|
|
|
3,937
|
|
||
Other invested assets (includes $2,392 and $2,300, respectively, of leveraged and direct financing leases and $214 and $141, respectively, relating to variable interest entities)
|
|
18,175
|
|
|
18,190
|
|
||
Total investments
|
|
450,866
|
|
|
436,210
|
|
||
Cash and cash equivalents, principally at estimated fair value (includes $19 and $52, respectively, relating to variable interest entities)
|
|
14,506
|
|
|
15,821
|
|
||
Accrued investment income
|
|
3,569
|
|
|
3,582
|
|
||
Premiums, reinsurance and other receivables (includes $2 and $3, respectively, relating to variable interest entities)
|
|
20,615
|
|
|
19,644
|
|
||
Deferred policy acquisition costs and value of business acquired
|
|
18,349
|
|
|
18,895
|
|
||
Goodwill
|
|
9,418
|
|
|
9,422
|
|
||
Other assets (includes $2 and $2, respectively, relating to variable interest entities)
|
|
10,100
|
|
|
8,408
|
|
||
Separate account assets
|
|
185,765
|
|
|
175,556
|
|
||
Total assets
|
|
$
|
713,188
|
|
|
$
|
687,538
|
|
Liabilities and Equity
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Future policy benefits
|
|
$
|
187,508
|
|
|
$
|
186,780
|
|
Policyholder account balances
|
|
187,333
|
|
|
183,693
|
|
||
Other policy-related balances
|
|
16,967
|
|
|
16,529
|
|
||
Policyholder dividends payable
|
|
671
|
|
|
677
|
|
||
Policyholder dividend obligation
|
|
1,116
|
|
|
428
|
|
||
Payables for collateral under securities loaned and other transactions
|
|
25,084
|
|
|
24,794
|
|
||
Short-term debt
|
|
289
|
|
|
268
|
|
||
Long-term debt (includes $5 and $5, respectively, at estimated fair value, relating to variable interest entities)
|
|
12,850
|
|
|
12,829
|
|
||
Collateral financing arrangement
|
|
1,048
|
|
|
1,060
|
|
||
Junior subordinated debt securities
|
|
3,148
|
|
|
3,147
|
|
||
Current income tax payable
|
|
505
|
|
|
441
|
|
||
Deferred income tax liability
|
|
7,075
|
|
|
5,414
|
|
||
Other liabilities (includes $1 and $1, respectively, relating to variable interest entities)
|
|
25,091
|
|
|
22,964
|
|
||
Separate account liabilities
|
|
185,765
|
|
|
175,556
|
|
||
Total liabilities
|
|
654,450
|
|
|
634,580
|
|
||
Contingencies, Commitments and Guarantees (Note 14)
|
|
|
|
|
||||
Equity
|
|
|
|
|
||||
MetLife, Inc.’s stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, par value $0.01 per share; $3,405 aggregate liquidation preference
|
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share; 3,000,000,000 shares authorized; 1,174,590,790 and 1,171,824,242 shares issued, respectively; 950,181,456 and 958,613,542 shares outstanding, respectively
|
|
12
|
|
|
12
|
|
||
Additional paid-in capital
|
|
32,535
|
|
|
32,474
|
|
||
Retained earnings
|
|
29,944
|
|
|
28,926
|
|
||
Treasury stock, at cost; 224,409,334 and 213,210,700 shares, respectively
|
|
(10,893
|
)
|
|
(10,393
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
6,911
|
|
|
1,722
|
|
||
Total MetLife, Inc.’s stockholders’ equity
|
|
58,509
|
|
|
52,741
|
|
||
Noncontrolling interests
|
|
229
|
|
|
217
|
|
||
Total equity
|
|
58,738
|
|
|
52,958
|
|
||
Total liabilities and equity
|
|
$
|
713,188
|
|
|
$
|
687,538
|
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Revenues
|
|
|
|
|
||||
Premiums
|
|
$
|
9,405
|
|
|
$
|
9,178
|
|
Universal life and investment-type product policy fees
|
|
1,365
|
|
|
1,392
|
|
||
Net investment income
|
|
4,908
|
|
|
3,745
|
|
||
Other revenues
|
|
494
|
|
|
474
|
|
||
Net investment gains (losses)
|
|
15
|
|
|
(333
|
)
|
||
Net derivative gains (losses)
|
|
115
|
|
|
349
|
|
||
Total revenues
|
|
16,302
|
|
|
14,805
|
|
||
Expenses
|
|
|
|
|
||||
Policyholder benefits and claims
|
|
9,072
|
|
|
8,718
|
|
||
Interest credited to policyholder account balances
|
|
1,961
|
|
|
769
|
|
||
Policyholder dividends
|
|
300
|
|
|
297
|
|
||
Other expenses
|
|
3,225
|
|
|
3,365
|
|
||
Total expenses
|
|
14,558
|
|
|
13,149
|
|
||
Income (loss) before provision for income tax
|
|
1,744
|
|
|
1,656
|
|
||
Provision for income tax expense (benefit)
|
|
359
|
|
|
399
|
|
||
Net income (loss)
|
|
1,385
|
|
|
1,257
|
|
||
Less: Net income (loss) attributable to noncontrolling interests
|
|
4
|
|
|
4
|
|
||
Net income (loss) attributable to MetLife, Inc.
|
|
1,381
|
|
|
1,253
|
|
||
Less: Preferred stock dividends
|
|
32
|
|
|
6
|
|
||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
|
$
|
1,349
|
|
|
$
|
1,247
|
|
Comprehensive income (loss)
|
|
$
|
6,555
|
|
|
$
|
(1,448
|
)
|
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax
|
|
6
|
|
|
4
|
|
||
Comprehensive income (loss) attributable to MetLife, Inc.
|
|
$
|
6,549
|
|
|
$
|
(1,452
|
)
|
Net income (loss) available to MetLife, Inc.’s common shareholders per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.41
|
|
|
$
|
1.20
|
|
Diluted
|
|
$
|
1.40
|
|
|
$
|
1.19
|
|
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
at Cost
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
MetLife, Inc.’s
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||||
Balance at December 31, 2018
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
32,474
|
|
|
$
|
28,926
|
|
|
$
|
(10,393
|
)
|
|
$
|
1,722
|
|
|
$
|
52,741
|
|
|
$
|
217
|
|
|
$
|
52,958
|
|
Cumulative effects of changes in accounting principles, net of income tax (Note 1)
|
|
|
|
|
|
|
|
74
|
|
|
|
|
21
|
|
|
95
|
|
|
|
|
95
|
|
||||||||||||||
Balance at January 1, 2019
|
|
—
|
|
|
12
|
|
|
32,474
|
|
|
29,000
|
|
|
(10,393
|
)
|
|
1,743
|
|
|
52,836
|
|
|
217
|
|
|
53,053
|
|
|||||||||
Treasury stock acquired in connection with share repurchases
|
|
|
|
|
|
|
|
|
|
|
(500
|
)
|
|
|
|
(500
|
)
|
|
|
|
(500
|
)
|
||||||||||||||
Stock-based compensation
|
|
|
|
|
|
61
|
|
|
|
|
|
|
|
|
61
|
|
|
|
|
61
|
|
|||||||||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
|
(32
|
)
|
|
|
|
(32
|
)
|
|||||||||||||||
Dividends on common stock
|
|
|
|
|
|
|
|
(405
|
)
|
|
|
|
|
|
(405
|
)
|
|
|
|
(405
|
)
|
|||||||||||||||
Change in equity of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
1,381
|
|
|
|
|
|
|
1,381
|
|
|
4
|
|
|
1,385
|
|
||||||||||||||
Other comprehensive income (loss), net of income tax
|
|
|
|
|
|
|
|
|
|
|
|
5,168
|
|
|
5,168
|
|
|
2
|
|
|
5,170
|
|
||||||||||||||
Balance at March 31, 2019
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
32,535
|
|
|
$
|
29,944
|
|
|
$
|
(10,893
|
)
|
|
$
|
6,911
|
|
|
$
|
58,509
|
|
|
$
|
229
|
|
|
$
|
58,738
|
|
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
at Cost
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
MetLife, Inc.’s
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||||
Balance at December 31, 2017
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
31,111
|
|
|
$
|
26,527
|
|
|
$
|
(6,401
|
)
|
|
$
|
7,427
|
|
|
$
|
58,676
|
|
|
$
|
194
|
|
|
$
|
58,870
|
|
Cumulative effects of changes in accounting principles, net of income tax
|
|
|
|
|
|
|
|
(905
|
)
|
|
|
|
912
|
|
|
7
|
|
|
|
|
7
|
|
||||||||||||||
Balance at January 1, 2018
|
|
—
|
|
|
12
|
|
|
31,111
|
|
|
25,622
|
|
|
(6,401
|
)
|
|
8,339
|
|
|
58,683
|
|
|
194
|
|
|
58,877
|
|
|||||||||
Preferred stock issuance
|
|
|
|
|
|
494
|
|
|
|
|
|
|
|
|
494
|
|
|
|
|
494
|
|
|||||||||||||||
Treasury stock acquired in connection with share repurchases
|
|
|
|
|
|
|
|
|
|
(1,041
|
)
|
|
|
|
(1,041
|
)
|
|
|
|
(1,041
|
)
|
|||||||||||||||
Stock-based compensation
|
|
|
|
|
|
48
|
|
|
|
|
|
|
|
|
48
|
|
|
|
|
48
|
|
|||||||||||||||
Dividends on preferred stock
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
(6
|
)
|
|
|
|
(6
|
)
|
|||||||||||||||
Dividends on common stock
|
|
|
|
|
|
|
|
(416
|
)
|
|
|
|
|
|
(416
|
)
|
|
|
|
(416
|
)
|
|||||||||||||||
Change in equity of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
1,253
|
|
|
|
|
|
|
1,253
|
|
|
4
|
|
|
1,257
|
|
||||||||||||||
Other comprehensive income (loss), net of income tax
|
|
|
|
|
|
|
|
|
|
|
|
(2,705
|
)
|
|
(2,705
|
)
|
|
—
|
|
|
(2,705
|
)
|
||||||||||||||
Balance at March 31, 2018
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
31,653
|
|
|
$
|
26,453
|
|
|
$
|
(7,442
|
)
|
|
$
|
5,634
|
|
|
$
|
56,310
|
|
|
$
|
198
|
|
|
$
|
56,508
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
Net cash provided by (used in) operating activities
|
$
|
2,072
|
|
|
$
|
1,296
|
|
Cash flows from investing activities
|
|
|
|
||||
Sales, maturities and repayments of:
|
|
|
|
||||
Fixed maturity securities available-for-sale
|
21,606
|
|
|
26,053
|
|
||
Equity securities
|
149
|
|
|
187
|
|
||
Mortgage loans
|
1,769
|
|
|
2,076
|
|
||
Real estate and real estate joint ventures
|
103
|
|
|
128
|
|
||
Other limited partnership interests
|
250
|
|
|
139
|
|
||
Purchases and originations of:
|
|
|
|
||||
Fixed maturity securities available-for-sale
|
(23,386
|
)
|
|
(24,220
|
)
|
||
Equity securities
|
(16
|
)
|
|
(51
|
)
|
||
Mortgage loans
|
(4,416
|
)
|
|
(4,024
|
)
|
||
Real estate and real estate joint ventures
|
(483
|
)
|
|
(242
|
)
|
||
Other limited partnership interests
|
(428
|
)
|
|
(260
|
)
|
||
Cash received in connection with freestanding derivatives
|
1,021
|
|
|
1,974
|
|
||
Cash paid in connection with freestanding derivatives
|
(1,231
|
)
|
|
(2,192
|
)
|
||
Net change in policy loans
|
16
|
|
|
(25
|
)
|
||
Net change in short-term investments
|
(545
|
)
|
|
(160
|
)
|
||
Net change in other invested assets
|
(53
|
)
|
|
46
|
|
||
Other, net
|
(55
|
)
|
|
86
|
|
||
Net cash provided by (used in) investing activities
|
(5,699
|
)
|
|
(485
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Policyholder account balances:
|
|
|
|
||||
Deposits
|
23,891
|
|
|
24,861
|
|
||
Withdrawals
|
(20,904
|
)
|
|
(24,447
|
)
|
||
Payables for collateral under securities loaned and other transactions:
|
|
|
|
||||
Net change in payables for collateral under securities loaned and other transactions
|
388
|
|
|
592
|
|
||
Cash received for other transactions with tenors greater than three months
|
—
|
|
|
75
|
|
||
Cash paid for other transactions with tenors greater than three months
|
(75
|
)
|
|
—
|
|
||
Long-term debt issued
|
—
|
|
|
14
|
|
||
Long-term debt repaid
|
(10
|
)
|
|
(32
|
)
|
||
Collateral financing arrangements repaid
|
(12
|
)
|
|
(13
|
)
|
||
Financing element on certain derivative instruments and other derivative related transactions, net
|
(29
|
)
|
|
37
|
|
||
Treasury stock acquired in connection with share repurchases
|
(500
|
)
|
|
(1,041
|
)
|
||
Preferred stock issued, net of issuance costs
|
—
|
|
|
494
|
|
||
Dividends on preferred stock
|
(32
|
)
|
|
(6
|
)
|
||
Dividends on common stock
|
(405
|
)
|
|
(416
|
)
|
||
Other, net
|
4
|
|
|
100
|
|
||
Net cash provided by (used in) financing activities
|
2,316
|
|
|
218
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents balances
|
(4
|
)
|
|
197
|
|
||
Change in cash and cash equivalents
|
(1,315
|
)
|
|
1,226
|
|
||
Cash and cash equivalents, beginning of period
|
15,821
|
|
|
12,701
|
|
||
Cash and cash equivalents, end of period
|
$
|
14,506
|
|
|
$
|
13,927
|
|
Supplemental disclosures of cash flow information
|
|
|
|
||||
Net cash paid (received) for:
|
|
|
|
||||
Interest
|
$
|
148
|
|
|
$
|
243
|
|
Income tax
|
$
|
114
|
|
|
$
|
146
|
|
Non-cash transactions:
|
|
|
|
||||
Reclassification of certain equity securities to other invested assets
|
$
|
—
|
|
|
$
|
791
|
|
Standard
|
Description
|
Effective Date and Method of Adoption
|
Impact on Financial Statements
|
ASU 2018-15,
Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
|
The new guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as an asset and which costs to expense as incurred. Implementation costs that are capitalized under the new guidance are required to be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use.
|
January 1, 2020. The new guidance can be applied either prospectively to eligible costs incurred on or after the guidance is first applied, or retrospectively to all periods presented.
|
The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
|
ASU 2018-14,
Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans
|
The new guidance removes certain disclosures that no longer are considered cost beneficial, clarifies the specific requirements of disclosures, and adds disclosure requirements identified as relevant for employers that sponsor defined benefit pension or other postretirement plans.
|
December 31, 2020, to be applied on a retrospective basis to all periods presented (with early adoption permitted).
|
The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
|
ASU 2018-13,
Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement
|
The new guidance modifies the disclosure requirements on fair value by removing some requirements, modifying others, adding changes in unrealized gains and losses included in other comprehensive income (loss) (“OCI”) for recurring Level 3 fair value measurements, and under certain circumstances, providing the option to disclose certain other quantitative information with respect to significant unobservable inputs in lieu of a weighted average.
|
January 1, 2020. Amendments related to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively. All other amendments should be applied retrospectively.
|
As of December 31, 2018, the Company early adopted the provisions of the guidance that removed the requirements relating to transfers between fair value hierarchy levels and certain disclosures about valuation processes for Level 3 fair value measurements. The Company will adopt the remainder of the new guidance at the effective date, and is currently evaluating the impact of those changes on its consolidated financial statements.
|
ASU 2018-12,
Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts
|
The new guidance (i) prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts, and requires assumptions for those liability valuations to be updated after contract inception, (ii) requires more market-based product guarantees on certain separate account and other account balance long-duration contracts to be accounted for at fair value, (iii) simplifies the amortization of deferred policy acquisition costs (“DAC”) for virtually all long-duration contracts, and (iv) introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures.
|
January 1, 2021, to be applied retrospectively to January 1, 2019 (with early adoption permitted).
|
The Company has started its implementation efforts and is currently evaluating the impact of the new guidance. Given the nature and extent of the required changes to a significant portion of the Company’s operations, the adoption of this standard is expected to have a material impact on its consolidated financial statements.
|
Standard
|
Description
|
Effective Date and Method of Adoption
|
Impact on Financial Statements
|
ASU 2017-04,
Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
The new guidance simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The new guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any.
|
January 1, 2020, to be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.
|
The new guidance will reduce the complexity involved with the evaluation of goodwill for impairment. The impact of the new guidance will depend on the outcomes of future goodwill impairment tests.
|
ASU 2016-13,
Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,
as clarified and amended by ASU 2018-19
, Codification Improvements to Topic 326, Financial Instruments—Credit Losses
and ASU 2019-04,
Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
|
This new guidance replaces the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The new guidance requires that an other-than-temporary impairment (“OTTI”) on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through realized investment gains and losses. The guidance also requires enhanced disclosures. In November 2018, the FASB issued ASU 2018-19, clarifying that receivables arising from operating leases should be accounted for in accordance with
Topic 842, Leases.
The Company has assessed the asset classes impacted by the new guidance and is currently assessing the accounting and reporting system changes that will be required to comply with the new guidance.
|
January 1, 2020. For substantially all financial assets, the ASU is to be applied on a modified retrospective basis through a cumulative effect adjustment to retained earnings. For previously impaired debt securities and certain debt securities acquired with evidence of credit quality deterioration since origination, the new guidance is to be applied prospectively.
|
The Company believes that the most significant impact upon adoption will be to its mortgage loan investments. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.
|
•
|
The Group Benefits business offers life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, vision and accident & health coverages, as well as prepaid legal plans. This business also sells administrative services-only arrangements to some employers.
|
•
|
The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, tort settlements, and capital markets investment products, as well as solutions for funding postretirement benefits and company-, bank- or trust-owned life insurance.
|
•
|
The Property & Casualty business offers personal and commercial lines of property and casualty insurance, including private passenger automobile, homeowners’ and personal excess liability insurance. In addition, Property & Casualty offers to small business owners property, liability and business interruption insurance.
|
•
|
Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity
guaranteed minimum income benefits (“GMIBs”) fees (“GMIB fees”);
|
•
|
Net investment income: (i) includes earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to contractholder-directed equity securities, (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (v) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP; and
|
•
|
Other revenues is adjusted for settlements of foreign currency earnings hedges and excludes fees received in association with services provided under transition service agreements (“TSA fees”).
|
•
|
Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass-through adjustments, (iii) benefits and hedging costs related to GMIBs (“GMIB costs”) and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market value adjustments”);
|
•
|
Interest credited to policyholder account balances includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and excludes certain amounts related to net investment income earned on contractholder-directed equity securities;
|
•
|
Amortization of DAC and
value of business acquired (“VOBA”)
excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB fees and GMIB costs and (iii) Market value adjustments;
|
•
|
Amortization of negative VOBA excludes amounts related to Market value adjustments;
|
•
|
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
|
•
|
Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements and (iii) acquisition, integration and other costs. Other expenses includes TSA fees.
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Three Months Ended March 31, 2019
|
|
U.S.
|
|
Asia
|
|
Latin
America |
|
EMEA
|
|
MetLife
Holdings
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated |
||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Premiums
|
|
$
|
5,567
|
|
|
$
|
1,699
|
|
|
$
|
646
|
|
|
$
|
542
|
|
|
$
|
927
|
|
|
$
|
24
|
|
|
$
|
9,405
|
|
|
$
|
—
|
|
|
$
|
9,405
|
|
Universal life and investment-type product policy fees
|
|
270
|
|
|
406
|
|
|
284
|
|
|
103
|
|
|
274
|
|
|
1
|
|
|
1,338
|
|
|
27
|
|
|
1,365
|
|
|||||||||
Net investment income
|
|
1,719
|
|
|
880
|
|
|
296
|
|
|
74
|
|
|
1,287
|
|
|
25
|
|
|
4,281
|
|
|
627
|
|
|
4,908
|
|
|||||||||
Other revenues
|
|
221
|
|
|
16
|
|
|
12
|
|
|
14
|
|
|
67
|
|
|
94
|
|
|
424
|
|
|
70
|
|
|
494
|
|
|||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
115
|
|
|||||||||
Total revenues
|
|
7,777
|
|
|
3,001
|
|
|
1,238
|
|
|
733
|
|
|
2,555
|
|
|
144
|
|
|
15,448
|
|
|
854
|
|
|
16,302
|
|
|||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
5,373
|
|
|
1,319
|
|
|
597
|
|
|
284
|
|
|
1,648
|
|
|
20
|
|
|
9,241
|
|
|
131
|
|
|
9,372
|
|
|||||||||
Interest credited to policyholder account balances
|
|
501
|
|
|
403
|
|
|
94
|
|
|
24
|
|
|
226
|
|
|
—
|
|
|
1,248
|
|
|
713
|
|
|
1,961
|
|
|||||||||
Capitalization of DAC
|
|
(114
|
)
|
|
(479
|
)
|
|
(94
|
)
|
|
(117
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|
(812
|
)
|
|
—
|
|
|
(812
|
)
|
|||||||||
Amortization of DAC and VOBA
|
|
114
|
|
|
307
|
|
|
78
|
|
|
92
|
|
|
63
|
|
|
1
|
|
|
655
|
|
|
(31
|
)
|
|
624
|
|
|||||||||
Amortization of negative VOBA
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||||||
Interest expense on debt
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
229
|
|
|
234
|
|
|
—
|
|
|
234
|
|
|||||||||
Other expenses
|
|
993
|
|
|
955
|
|
|
366
|
|
|
338
|
|
|
227
|
|
|
222
|
|
|
3,101
|
|
|
88
|
|
|
3,189
|
|
|||||||||
Total expenses
|
|
6,869
|
|
|
2,496
|
|
|
1,042
|
|
|
620
|
|
|
2,160
|
|
|
470
|
|
|
13,657
|
|
|
901
|
|
|
14,558
|
|
|||||||||
Provision for income tax expense (benefit)
|
|
184
|
|
|
149
|
|
|
62
|
|
|
27
|
|
|
78
|
|
|
(165
|
)
|
|
335
|
|
|
24
|
|
|
359
|
|
|||||||||
Adjusted earnings
|
|
$
|
724
|
|
|
$
|
356
|
|
|
$
|
134
|
|
|
$
|
86
|
|
|
$
|
317
|
|
|
$
|
(161
|
)
|
|
1,456
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
854
|
|
|
|
|
|
|||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(901
|
)
|
|
|
|
|
|||||||||||||||||
Provision for income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(24
|
)
|
|
|
|
|
|||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,385
|
|
|
|
|
$
|
1,385
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Three Months Ended March 31, 2018
|
|
U.S.
|
|
Asia
|
|
Latin
America
|
|
EMEA
|
|
MetLife
Holdings
|
|
Corporate
& Other
|
|
Total
|
|
Adjustments
|
|
Total
Consolidated |
||||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Premiums
|
|
$
|
5,217
|
|
|
$
|
1,748
|
|
|
$
|
699
|
|
|
$
|
551
|
|
|
$
|
950
|
|
|
$
|
13
|
|
|
$
|
9,178
|
|
|
$
|
—
|
|
|
$
|
9,178
|
|
Universal life and investment-type product policy fees
|
|
258
|
|
|
394
|
|
|
282
|
|
|
112
|
|
|
314
|
|
|
—
|
|
|
1,360
|
|
|
32
|
|
|
1,392
|
|
|||||||||
Net investment income
|
|
1,662
|
|
|
795
|
|
|
276
|
|
|
75
|
|
|
1,352
|
|
|
59
|
|
|
4,219
|
|
|
(474
|
)
|
|
3,745
|
|
|||||||||
Other revenues
|
|
204
|
|
|
15
|
|
|
8
|
|
|
16
|
|
|
67
|
|
|
81
|
|
|
391
|
|
|
83
|
|
|
474
|
|
|||||||||
Net investment gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(333
|
)
|
|
(333
|
)
|
|||||||||
Net derivative gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
349
|
|
|
349
|
|
|||||||||
Total revenues
|
|
7,341
|
|
|
2,952
|
|
|
1,265
|
|
|
754
|
|
|
2,683
|
|
|
153
|
|
|
15,148
|
|
|
(343
|
)
|
|
14,805
|
|
|||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Policyholder benefits and claims and policyholder dividends
|
|
5,138
|
|
|
1,343
|
|
|
646
|
|
|
294
|
|
|
1,550
|
|
|
(3
|
)
|
|
8,968
|
|
|
47
|
|
|
9,015
|
|
|||||||||
Interest credited to policyholder account balances
|
|
407
|
|
|
351
|
|
|
98
|
|
|
25
|
|
|
236
|
|
|
—
|
|
|
1,117
|
|
|
(348
|
)
|
|
769
|
|
|||||||||
Capitalization of DAC
|
|
(106
|
)
|
|
(465
|
)
|
|
(94
|
)
|
|
(118
|
)
|
|
(10
|
)
|
|
(2
|
)
|
|
(795
|
)
|
|
(1
|
)
|
|
(796
|
)
|
|||||||||
Amortization of DAC and VOBA
|
|
115
|
|
|
314
|
|
|
60
|
|
|
106
|
|
|
100
|
|
|
2
|
|
|
697
|
|
|
(4
|
)
|
|
693
|
|
|||||||||
Amortization of negative VOBA
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(1
|
)
|
|
(22
|
)
|
|||||||||
Interest expense on debt
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
280
|
|
|
286
|
|
|
—
|
|
|
286
|
|
|||||||||
Other expenses
|
|
961
|
|
|
952
|
|
|
338
|
|
|
351
|
|
|
276
|
|
|
232
|
|
|
3,110
|
|
|
94
|
|
|
3,204
|
|
|||||||||
Total expenses
|
|
6,517
|
|
|
2,480
|
|
|
1,050
|
|
|
652
|
|
|
2,154
|
|
|
509
|
|
|
13,362
|
|
|
(213
|
)
|
|
13,149
|
|
|||||||||
Provision for income tax expense (benefit)
|
|
171
|
|
|
145
|
|
|
75
|
|
|
21
|
|
|
104
|
|
|
(159
|
)
|
|
357
|
|
|
42
|
|
|
399
|
|
|||||||||
Adjusted earnings
|
|
$
|
653
|
|
|
$
|
327
|
|
|
$
|
140
|
|
|
$
|
81
|
|
|
$
|
425
|
|
|
$
|
(197
|
)
|
|
1,429
|
|
|
|
|
|
|||||
Adjustments to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(343
|
)
|
|
|
|
|
|||||||||||||||||
Total expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
213
|
|
|
|
|
|
|||||||||||||||||
Provision for income tax (expense) benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(42
|
)
|
|
|
|
|
|||||||||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,257
|
|
|
|
|
$
|
1,257
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
U.S.
|
|
$
|
257,461
|
|
|
$
|
248,174
|
|
Asia
|
|
152,264
|
|
|
146,278
|
|
||
Latin America
|
|
74,329
|
|
|
70,417
|
|
||
EMEA
|
|
27,834
|
|
|
27,829
|
|
||
MetLife Holdings
|
|
171,267
|
|
|
166,872
|
|
||
Corporate & Other
|
|
30,033
|
|
|
27,968
|
|
||
Total
|
|
$
|
713,188
|
|
|
$
|
687,538
|
|
|
|
March 31, 2019
|
|
|
December 31, 2018
|
|
||||||||||||||||||
|
|
In the
Event of Death |
|
At
Annuitization |
|
In the
Event of Death (8) |
|
At
Annuitization (8) |
||||||||||||||||
|
|
(Dollars in millions)
|
|
|||||||||||||||||||||
Annuity Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Variable Annuity Guarantees:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total account value (1), (2), (3)
|
|
$
|
66,192
|
|
|
|
$
|
24,409
|
|
|
|
$
|
63,381
|
|
|
|
$
|
23,174
|
|
|
||||
Separate account value (1)
|
|
$
|
41,540
|
|
|
|
$
|
22,632
|
|
|
|
$
|
38,888
|
|
|
|
$
|
21,385
|
|
|
||||
Net amount at risk (2)
|
|
$
|
2,027
|
|
(4
|
)
|
|
$
|
424
|
|
(5
|
)
|
|
$
|
3,197
|
|
(4
|
)
|
|
$
|
511
|
|
(5
|
)
|
Average attained age of contractholders
|
|
66 years
|
|
|
|
65 years
|
|
|
|
66 years
|
|
|
|
64 years
|
|
|
||||||||
Other Annuity Guarantees:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total account value (1), (3)
|
|
N/A
|
|
|
|
$
|
5,825
|
|
|
|
N/A
|
|
|
|
$
|
5,787
|
|
|
||||||
Net amount at risk
|
|
N/A
|
|
|
|
$
|
530
|
|
(6
|
)
|
|
N/A
|
|
|
|
$
|
549
|
|
(6
|
)
|
||||
Average attained age of contractholders
|
|
N/A
|
|
|
|
50 years
|
|
|
|
N/A
|
|
|
|
50 years
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Secondary
Guarantees |
|
Paid-Up
Guarantees |
|
Secondary
Guarantees (8) |
|
Paid-Up
Guarantees |
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Universal and Variable Life Contracts:
|
|
|
|
|
|
|
|
|
||||||||
Total account value (1), (3)
|
|
$
|
11,398
|
|
|
$
|
3,035
|
|
|
$
|
11,205
|
|
|
$
|
3,070
|
|
Net amount at risk (7)
|
|
$
|
91,404
|
|
|
$
|
15,279
|
|
|
$
|
93,028
|
|
|
$
|
15,539
|
|
Average attained age of policyholders
|
|
53 years
|
|
|
64 years
|
|
|
52 years
|
|
|
64 years
|
|
(1)
|
The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive.
|
(2)
|
Includes amounts, which are not reported on the interim condensed consolidated balance sheets, from assumed variable annuity guarantees from the Company’s former operating joint venture in Japan.
|
(3)
|
Includes the contractholder’s investments in the general account and separate account, if applicable.
|
(4)
|
Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death.
|
(5)
|
Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved.
|
(6)
|
Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date.
|
(7)
|
Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date.
|
(8)
|
The Company’s guarantee exposure amounts at
December 31, 2018
as reported in the 2018 Annual Report have been revised. They conform to the presentation for the first quarter of 2019, which includes certain contracts with guarantees that were previously excluded. They include the following increases from the amounts reported in the 2018 Annual Report: (i) variable annuity guarantees in the event of death:
$7.1 billion
from
$56.2 billion
for total account value,
$1.5 billion
from
$37.3 billion
for separate account value and
$429 million
from
$2.8 billion
for net amount at risk; (ii) variable annuity guarantees at annuitization:
$1.5 billion
from
$21.6 billion
for total account value,
$1.5 billion
from
$19.8 billion
for separate account value and
$28 million
from
$483 million
for net amount at risk; (iii) other annuity guarantees:
$4.5 billion
from
$1.3 billion
for total account value and
$60 million
from
$489 million
for net amount at risk; and (iv) universal and variable life contract secondary guarantees:
$2.3 billion
from
$8.9 billion
for total account value and
$28.9 billion
from
$64.2 billion
for net amount at risk.
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In millions)
|
||||||
Balance, beginning of period
|
|
$
|
17,788
|
|
|
$
|
17,094
|
|
Less: Reinsurance recoverables
|
|
2,332
|
|
|
2,198
|
|
||
Net balance, beginning of period
|
|
15,456
|
|
|
14,896
|
|
||
Incurred related to:
|
|
|
|
|
||||
Current period
|
|
6,338
|
|
|
6,504
|
|
||
Prior periods (1)
|
|
210
|
|
|
(148
|
)
|
||
Total incurred
|
|
6,548
|
|
|
6,356
|
|
||
Paid related to:
|
|
|
|
|
||||
Current period
|
|
(3,430
|
)
|
|
(3,339
|
)
|
||
Prior periods
|
|
(2,814
|
)
|
|
(2,719
|
)
|
||
Total paid
|
|
(6,244
|
)
|
|
(6,058
|
)
|
||
Net balance, end of period
|
|
15,760
|
|
|
15,194
|
|
||
Add: Reinsurance recoverables
|
|
2,354
|
|
|
2,237
|
|
||
Balance, end of period (included in future policy benefits and other policy-related balances)
|
|
$
|
18,114
|
|
|
$
|
17,431
|
|
(1)
|
For the three months ended
March 31, 2019
, claims and claim adjustment expenses associated with prior periods increased due to events incurred in prior periods but reported in the current period. For the three months ended
March 31, 2018
, claims and claim adjustment expenses associated with prior periods decreased due to favorable claims experience in the current period.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Closed Block Liabilities
|
|
|
|
|
||||
Future policy benefits
|
|
$
|
39,727
|
|
|
$
|
40,032
|
|
Other policy-related balances
|
|
422
|
|
|
317
|
|
||
Policyholder dividends payable
|
|
453
|
|
|
431
|
|
||
Policyholder dividend obligation
|
|
1,116
|
|
|
428
|
|
||
Deferred income tax liability
|
|
36
|
|
|
28
|
|
||
Other liabilities
|
|
200
|
|
|
328
|
|
||
Total closed block liabilities
|
|
41,954
|
|
|
41,564
|
|
||
Assets Designated to the Closed Block
|
|
|
|
|
||||
Investments:
|
|
|
|
|
||||
Fixed maturity securities available-for-sale, at estimated fair value
|
|
25,616
|
|
|
25,354
|
|
||
Equity securities, at estimated fair value
|
|
63
|
|
|
61
|
|
||
Contractholder-directed equity securities and fair value option securities, at estimated fair value
|
|
47
|
|
|
43
|
|
||
Mortgage loans
|
|
6,994
|
|
|
6,778
|
|
||
Policy loans
|
|
4,505
|
|
|
4,527
|
|
||
Real estate and real estate joint ventures
|
|
556
|
|
|
544
|
|
||
Other invested assets
|
|
592
|
|
|
643
|
|
||
Total investments
|
|
38,373
|
|
|
37,950
|
|
||
Accrued investment income
|
|
451
|
|
|
443
|
|
||
Premiums, reinsurance and other receivables
|
|
70
|
|
|
83
|
|
||
Current income tax recoverable
|
|
71
|
|
|
69
|
|
||
Total assets designated to the closed block
|
|
38,965
|
|
|
38,545
|
|
||
Excess of closed block liabilities over assets designated to the closed block
|
|
2,989
|
|
|
3,019
|
|
||
Amounts included in AOCI:
|
|
|
|
|
||||
Unrealized investment gains (losses), net of income tax
|
|
1,675
|
|
|
1,089
|
|
||
Unrealized gains (losses) on derivatives, net of income tax
|
|
74
|
|
|
86
|
|
||
Allocated to policyholder dividend obligation, net of income tax
|
|
(882
|
)
|
|
(338
|
)
|
||
Total amounts included in AOCI
|
|
867
|
|
|
837
|
|
||
Maximum future earnings to be recognized from closed block assets and liabilities
|
|
$
|
3,856
|
|
|
$
|
3,856
|
|
|
|
Three Months
Ended March 31, 2019 |
|
Year
Ended December 31, 2018 |
||||
|
|
(In millions)
|
||||||
Balance, beginning of period
|
|
$
|
428
|
|
|
$
|
2,121
|
|
Change in unrealized investment and derivative gains (losses)
|
|
688
|
|
|
(1,693
|
)
|
||
Balance, end of period
|
|
$
|
1,116
|
|
|
$
|
428
|
|
|
|
|
Three Months
Ended March 31, |
||||||
|
|
|
2019
|
|
2018
|
||||
|
|
|
(In millions)
|
||||||
Revenues
|
|
|
|
|
|
||||
Premiums
|
|
|
$
|
367
|
|
|
$
|
387
|
|
Net investment income
|
|
|
428
|
|
|
444
|
|
||
Net investment gains (losses)
|
|
|
(1
|
)
|
|
(29
|
)
|
||
Net derivative gains (losses)
|
|
|
3
|
|
|
(3
|
)
|
||
Total revenues
|
|
|
797
|
|
|
799
|
|
||
Expenses
|
|
|
|
|
|
||||
Policyholder benefits and claims
|
|
|
539
|
|
|
571
|
|
||
Policyholder dividends
|
|
|
228
|
|
|
244
|
|
||
Other expenses
|
|
|
29
|
|
|
29
|
|
||
Total expenses
|
|
|
796
|
|
|
844
|
|
||
Revenues, net of expenses before provision for income tax expense (benefit)
|
|
|
1
|
|
|
(45
|
)
|
||
Provision for income tax expense (benefit)
|
|
|
—
|
|
|
(10
|
)
|
||
Revenues, net of expenses and provision for income tax expense (benefit)
|
|
|
$
|
1
|
|
|
$
|
(35
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||||
|
Amortized
Cost |
|
Gross Unrealized
|
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Gross Unrealized
|
|
Estimated
Fair Value |
||||||||||||||||||||||||||||
|
Gains |
|
Temporary
Losses |
|
OTTI
Losses (1) |
|
Gains |
|
Temporary
Losses |
|
OTTI
Losses (1) |
|
|||||||||||||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||||||||||
U.S. corporate
|
$
|
75,893
|
|
|
$
|
5,040
|
|
|
$
|
787
|
|
|
$
|
—
|
|
|
$
|
80,146
|
|
|
$
|
77,761
|
|
|
$
|
3,467
|
|
|
$
|
2,280
|
|
|
$
|
—
|
|
|
$
|
78,948
|
|
Foreign government
|
57,483
|
|
|
7,749
|
|
|
277
|
|
|
—
|
|
|
64,955
|
|
|
56,353
|
|
|
6,406
|
|
|
471
|
|
|
—
|
|
|
62,288
|
|
||||||||||
Foreign corporate
|
57,640
|
|
|
3,504
|
|
|
1,199
|
|
|
—
|
|
|
59,945
|
|
|
56,290
|
|
|
2,438
|
|
|
2,025
|
|
|
—
|
|
|
56,703
|
|
||||||||||
U.S. government and agency
|
37,819
|
|
|
3,413
|
|
|
224
|
|
|
—
|
|
|
41,008
|
|
|
37,030
|
|
|
2,756
|
|
|
464
|
|
|
—
|
|
|
39,322
|
|
||||||||||
RMBS
|
27,439
|
|
|
1,097
|
|
|
206
|
|
|
(30
|
)
|
|
28,360
|
|
|
27,409
|
|
|
920
|
|
|
394
|
|
|
(26
|
)
|
|
27,961
|
|
||||||||||
ABS
|
12,635
|
|
|
77
|
|
|
80
|
|
|
1
|
|
|
12,631
|
|
|
12,552
|
|
|
74
|
|
|
153
|
|
|
1
|
|
|
12,472
|
|
||||||||||
Municipals
|
10,371
|
|
|
1,546
|
|
|
19
|
|
|
—
|
|
|
11,898
|
|
|
10,376
|
|
|
1,228
|
|
|
71
|
|
|
—
|
|
|
11,533
|
|
||||||||||
CMBS
|
9,279
|
|
|
236
|
|
|
48
|
|
|
—
|
|
|
9,467
|
|
|
9,045
|
|
|
115
|
|
|
122
|
|
|
—
|
|
|
9,038
|
|
||||||||||
Total fixed maturity securities AFS
|
$
|
288,559
|
|
|
$
|
22,662
|
|
|
$
|
2,840
|
|
|
$
|
(29
|
)
|
|
$
|
308,410
|
|
|
$
|
286,816
|
|
|
$
|
17,404
|
|
|
$
|
5,980
|
|
|
$
|
(25
|
)
|
|
$
|
298,265
|
|
(1)
|
Noncredit OTTI losses included in AOCI in an unrealized gain position are due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “— Net Unrealized Investment Gains (Losses).”
|
|
|
Due in One
Year or Less |
|
Due After
One Year Through Five Years |
|
Due After
Five Years
Through Ten
Years
|
|
Due After
Ten Years
|
|
Structured
Securities
|
|
Total Fixed
Maturity
Securities AFS
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Amortized cost
|
|
$
|
14,608
|
|
|
$
|
53,506
|
|
|
$
|
58,491
|
|
|
$
|
112,601
|
|
|
$
|
49,353
|
|
|
$
|
288,559
|
|
Estimated fair value
|
|
$
|
14,625
|
|
|
$
|
55,316
|
|
|
$
|
61,515
|
|
|
$
|
126,496
|
|
|
$
|
50,458
|
|
|
$
|
308,410
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
|
Less than 12 Months
|
|
Equal to or Greater
than 12 Months
|
|
Less than 12 Months
|
|
Equal to or Greater
than 12 Months
|
||||||||||||||||||||||||
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||||||||||
U.S. corporate
|
|
$
|
8,538
|
|
|
$
|
249
|
|
|
$
|
10,555
|
|
|
$
|
538
|
|
|
$
|
32,430
|
|
|
$
|
1,663
|
|
|
$
|
5,826
|
|
|
$
|
617
|
|
Foreign government
|
|
1,661
|
|
|
108
|
|
|
2,424
|
|
|
169
|
|
|
4,392
|
|
|
243
|
|
|
2,902
|
|
|
228
|
|
||||||||
Foreign corporate
|
|
8,306
|
|
|
505
|
|
|
7,914
|
|
|
694
|
|
|
19,564
|
|
|
1,230
|
|
|
5,765
|
|
|
795
|
|
||||||||
U.S. government and agency
|
|
2,579
|
|
|
4
|
|
|
7,550
|
|
|
220
|
|
|
6,813
|
|
|
58
|
|
|
8,937
|
|
|
406
|
|
||||||||
RMBS
|
|
1,404
|
|
|
26
|
|
|
8,291
|
|
|
150
|
|
|
6,506
|
|
|
120
|
|
|
6,423
|
|
|
248
|
|
||||||||
ABS
|
|
6,582
|
|
|
64
|
|
|
817
|
|
|
17
|
|
|
8,230
|
|
|
138
|
|
|
392
|
|
|
16
|
|
||||||||
Municipals
|
|
129
|
|
|
3
|
|
|
518
|
|
|
16
|
|
|
1,380
|
|
|
46
|
|
|
349
|
|
|
25
|
|
||||||||
CMBS
|
|
1,615
|
|
|
9
|
|
|
1,067
|
|
|
39
|
|
|
3,893
|
|
|
67
|
|
|
707
|
|
|
55
|
|
||||||||
Total fixed maturity securities AFS
|
|
$
|
30,814
|
|
|
$
|
968
|
|
|
$
|
39,136
|
|
|
$
|
1,843
|
|
|
$
|
83,208
|
|
|
$
|
3,565
|
|
|
$
|
31,301
|
|
|
$
|
2,390
|
|
Total number of securities in an unrealized loss position
|
|
3,008
|
|
|
|
|
3,153
|
|
|
|
|
6,913
|
|
|
|
|
2,335
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Estimated
Fair
Value
|
|
% of
Total
|
||||||
|
|||||||||||||
|
(Dollars in millions)
|
||||||||||||
Common stock
|
$
|
1,016
|
|
|
70.9
|
%
|
|
$
|
1,037
|
|
|
72.0
|
%
|
Non-redeemable preferred stock
|
416
|
|
|
29.1
|
|
|
403
|
|
|
28.0
|
|
||
Total equity securities
|
$
|
1,432
|
|
|
100.0
|
%
|
|
$
|
1,440
|
|
|
100.0
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Carrying Value
|
|
% of
Total |
|
Carrying Value
|
|
% of
Total |
||||||
|
(Dollars in millions)
|
||||||||||||
Mortgage loans:
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
49,960
|
|
|
63.6
|
%
|
|
$
|
48,463
|
|
|
64.0
|
%
|
Agricultural
|
15,130
|
|
|
19.2
|
|
|
14,905
|
|
|
19.7
|
|
||
Residential
|
13,585
|
|
|
17.3
|
|
|
12,427
|
|
|
16.4
|
|
||
Total recorded investment
|
78,675
|
|
|
100.1
|
|
|
75,795
|
|
|
100.1
|
|
||
Valuation allowances
|
(350
|
)
|
|
(0.5
|
)
|
|
(342
|
)
|
|
(0.5
|
)
|
||
Subtotal mortgage loans, net
|
78,325
|
|
|
99.6
|
|
|
75,453
|
|
|
99.6
|
|
||
Residential — FVO
|
276
|
|
|
0.4
|
|
|
299
|
|
|
0.4
|
|
||
Total mortgage loans, net
|
$
|
78,601
|
|
|
100.0
|
%
|
|
$
|
75,752
|
|
|
100.0
|
%
|
|
|
Evaluated Individually for Credit Losses
|
|
Evaluated Collectively for
Credit Losses
|
|
Impaired
Loans
|
||||||||||||||||||||||||||
|
|
Impaired Loans with a
Valuation Allowance
|
|
Impaired Loans without a
Valuation Allowance
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Unpaid
Principal
Balance
|
|
Recorded
Investment
|
|
Valuation
Allowances |
|
Unpaid
Principal
Balance
|
|
Recorded
Investment |
|
Recorded
Investment |
|
Valuation
Allowances |
|
Carrying
Value |
||||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,960
|
|
|
$
|
245
|
|
|
$
|
—
|
|
Agricultural
|
|
31
|
|
|
31
|
|
|
3
|
|
|
93
|
|
|
92
|
|
|
15,007
|
|
|
44
|
|
|
120
|
|
||||||||
Residential
|
|
—
|
|
|
—
|
|
|
—
|
|
|
447
|
|
|
400
|
|
|
13,185
|
|
|
58
|
|
|
400
|
|
||||||||
Total
|
|
$
|
31
|
|
|
$
|
31
|
|
|
$
|
3
|
|
|
$
|
540
|
|
|
$
|
492
|
|
|
$
|
78,152
|
|
|
$
|
347
|
|
|
$
|
520
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,463
|
|
|
$
|
238
|
|
|
$
|
—
|
|
Agricultural
|
|
31
|
|
|
31
|
|
|
3
|
|
|
169
|
|
|
169
|
|
|
14,705
|
|
|
43
|
|
|
197
|
|
||||||||
Residential
|
|
—
|
|
|
—
|
|
|
—
|
|
|
431
|
|
|
386
|
|
|
12,041
|
|
|
58
|
|
|
386
|
|
||||||||
Total
|
|
$
|
31
|
|
|
$
|
31
|
|
|
$
|
3
|
|
|
$
|
600
|
|
|
$
|
555
|
|
|
$
|
75,209
|
|
|
$
|
339
|
|
|
$
|
583
|
|
|
Three Months
Ended March 31, |
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
|
Commercial
|
|
Agricultural
|
|
Residential
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
238
|
|
|
$
|
46
|
|
|
$
|
58
|
|
|
$
|
342
|
|
|
$
|
214
|
|
|
$
|
41
|
|
|
$
|
59
|
|
|
$
|
314
|
|
Provision (release)
|
7
|
|
|
1
|
|
|
2
|
|
|
10
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||||
Charge-offs, net of recoveries
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Balance, end of period
|
$
|
245
|
|
|
$
|
47
|
|
|
$
|
58
|
|
|
$
|
350
|
|
|
$
|
228
|
|
|
$
|
41
|
|
|
$
|
58
|
|
|
$
|
327
|
|
|
|
Recorded Investment
|
|
Estimated
Fair Value |
|
% of
Total
|
||||||||||||||||||||
|
|
Debt Service Coverage Ratios
|
|
|
|
% of
Total
|
|
|||||||||||||||||||
|
|
> 1.20x
|
|
1.00x - 1.20x
|
|
< 1.00x
|
|
Total
|
|
|||||||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 65%
|
|
$
|
41,921
|
|
|
$
|
800
|
|
|
$
|
132
|
|
|
$
|
42,853
|
|
|
85.8
|
%
|
|
$
|
43,759
|
|
|
86.0
|
%
|
65% to 75%
|
|
5,682
|
|
|
26
|
|
|
1
|
|
|
5,709
|
|
|
11.4
|
|
|
5,758
|
|
|
11.3
|
|
|||||
76% to 80%
|
|
397
|
|
|
268
|
|
|
55
|
|
|
720
|
|
|
1.4
|
|
|
698
|
|
|
1.4
|
|
|||||
Greater than 80%
|
|
502
|
|
|
176
|
|
|
—
|
|
|
678
|
|
|
1.4
|
|
|
646
|
|
|
1.3
|
|
|||||
Total
|
|
$
|
48,502
|
|
|
$
|
1,270
|
|
|
$
|
188
|
|
|
$
|
49,960
|
|
|
100.0
|
%
|
|
$
|
50,861
|
|
|
100.0
|
%
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less than 65%
|
|
$
|
40,360
|
|
|
$
|
827
|
|
|
$
|
101
|
|
|
$
|
41,288
|
|
|
85.2
|
%
|
|
$
|
41,599
|
|
|
85.3
|
%
|
65% to 75%
|
|
5,790
|
|
|
—
|
|
|
25
|
|
|
5,815
|
|
|
12.0
|
|
|
5,849
|
|
|
12.0
|
|
|||||
76% to 80%
|
|
423
|
|
|
209
|
|
|
56
|
|
|
688
|
|
|
1.4
|
|
|
664
|
|
|
1.4
|
|
|||||
Greater than 80%
|
|
496
|
|
|
176
|
|
|
—
|
|
|
672
|
|
|
1.4
|
|
|
635
|
|
|
1.3
|
|
|||||
Total
|
|
$
|
47,069
|
|
|
$
|
1,212
|
|
|
$
|
182
|
|
|
$
|
48,463
|
|
|
100.0
|
%
|
|
$
|
48,747
|
|
|
100.0
|
%
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
|
Recorded
Investment |
|
% of
Total |
|
Recorded
Investment |
|
% of
Total |
||||||
|
|
(Dollars in millions)
|
||||||||||||
Loan-to-value ratios:
|
|
|
|
|
|
|
|
|
||||||
Less than 65%
|
|
$
|
14,091
|
|
|
93.1
|
%
|
|
$
|
13,704
|
|
|
92.0
|
%
|
65% to 75%
|
|
1,018
|
|
|
6.7
|
|
|
1,145
|
|
|
7.7
|
|
||
76% to 80%
|
|
—
|
|
|
—
|
|
|
33
|
|
|
0.2
|
|
||
Greater than 80%
|
|
21
|
|
|
0.2
|
|
|
23
|
|
|
0.1
|
|
||
Total
|
|
$
|
15,130
|
|
|
100.0
|
%
|
|
$
|
14,905
|
|
|
100.0
|
%
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
|
Recorded
Investment |
|
% of
Total |
|
Recorded
Investment |
|
% of
Total |
||||||
|
|
(Dollars in millions)
|
||||||||||||
Performance indicators:
|
|
|
|
|
|
|
|
|
||||||
Performing
|
|
$
|
13,102
|
|
|
96.4
|
%
|
|
$
|
11,956
|
|
|
96.2
|
%
|
Nonperforming (1)
|
|
483
|
|
|
3.6
|
|
|
471
|
|
|
3.8
|
|
||
Total
|
|
$
|
13,585
|
|
|
100.0
|
%
|
|
$
|
12,427
|
|
|
100.0
|
%
|
(1)
|
Includes residential mortgage loans in process of foreclosure of
$140 million
at both
March 31, 2019
and
December 31, 2018
.
|
|
|
Past Due
|
|
Greater than 90 Days Past Due
and Still Accruing Interest
|
|
Nonaccrual
|
||||||||||||||||||
|
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Commercial
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
176
|
|
|
$
|
176
|
|
Agricultural
|
|
134
|
|
|
204
|
|
|
39
|
|
|
109
|
|
|
105
|
|
|
105
|
|
||||||
Residential
|
|
483
|
|
|
471
|
|
|
40
|
|
|
35
|
|
|
443
|
|
|
436
|
|
||||||
Total
|
|
$
|
618
|
|
|
$
|
684
|
|
|
$
|
80
|
|
|
$
|
153
|
|
|
$
|
724
|
|
|
$
|
717
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Three Months
Ended March 31, |
||||||||||
|
|
|
2019
|
|
2018
|
||||||||||
|
Carrying Value
|
|
Income
|
||||||||||||
|
(In millions)
|
||||||||||||||
Leased real estate investments
|
$
|
4,372
|
|
|
$
|
4,132
|
|
|
$
|
92
|
|
|
$
|
104
|
|
Other real estate investments
|
476
|
|
|
461
|
|
|
34
|
|
|
33
|
|
||||
Real estate joint ventures
|
5,174
|
|
|
5,105
|
|
|
4
|
|
|
31
|
|
||||
Total real estate and real estate joint ventures
|
$
|
10,022
|
|
|
$
|
9,698
|
|
|
$
|
130
|
|
|
$
|
168
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Three Months
Ended March 31, |
||||||||||
|
|
|
2019
|
|
2018
|
||||||||||
|
Carrying Value
|
|
Income
|
||||||||||||
|
(In millions)
|
||||||||||||||
Leased real estate investments:
|
|
|
|
|
|
|
|
||||||||
Office
|
$
|
2,124
|
|
|
$
|
1,999
|
|
|
$
|
44
|
|
|
$
|
45
|
|
Retail
|
1,090
|
|
|
1,006
|
|
|
24
|
|
|
26
|
|
||||
Apartment
|
250
|
|
|
253
|
|
|
5
|
|
|
18
|
|
||||
Industrial
|
275
|
|
|
223
|
|
|
11
|
|
|
9
|
|
||||
Land
|
473
|
|
|
489
|
|
|
5
|
|
|
5
|
|
||||
Hotel
|
93
|
|
|
94
|
|
|
2
|
|
|
—
|
|
||||
Other
|
67
|
|
|
68
|
|
|
1
|
|
|
1
|
|
||||
Total leased real estate investments
|
$
|
4,372
|
|
|
$
|
4,132
|
|
|
$
|
92
|
|
|
$
|
104
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Leveraged
Leases
|
|
Direct
Financing
Leases
|
|
Leveraged
Leases
|
|
Direct
Financing
Leases
|
||||||||
|
(In millions)
|
||||||||||||||
Lease receivables, net (1)
|
$
|
711
|
|
|
$
|
1,951
|
|
|
$
|
715
|
|
|
$
|
1,855
|
|
Estimated residual values
|
807
|
|
|
42
|
|
|
807
|
|
|
42
|
|
||||
Subtotal
|
1,518
|
|
|
1,993
|
|
|
1,522
|
|
|
1,897
|
|
||||
Unearned income
|
(403
|
)
|
|
(716
|
)
|
|
(414
|
)
|
|
(705
|
)
|
||||
Investment in leases
|
$
|
1,115
|
|
|
$
|
1,277
|
|
|
$
|
1,108
|
|
|
$
|
1,192
|
|
(1)
|
Future contractual receipts under direct financing leases at
March 31, 2019
are
$84 million
for the remainder of 2019,
$106 million
in 2020,
$105 million
in 2021,
$109 million
in 2022,
$102 million
in 2023,
$1.4 billion
thereafter, and in total
$2.0 billion
.
|
|
Three Months
Ended March 31, |
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Leveraged Leases
|
|
Direct Financing Leases
|
|
Leveraged Leases
|
|
Direct Financing Leases
|
||||||||
|
(In millions)
|
||||||||||||||
Lease investment income
|
$
|
12
|
|
|
$
|
19
|
|
|
$
|
11
|
|
|
$
|
20
|
|
Less: Income tax expense
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
||||
Lease investment income, net of income tax
|
$
|
8
|
|
|
$
|
15
|
|
|
$
|
7
|
|
|
$
|
16
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Fixed maturity securities AFS
|
|
$
|
19,723
|
|
|
$
|
11,356
|
|
Fixed maturity securities AFS with noncredit OTTI losses included in AOCI
|
|
29
|
|
|
25
|
|
||
Total fixed maturity securities AFS
|
|
19,752
|
|
|
11,381
|
|
||
Derivatives
|
|
2,114
|
|
|
2,127
|
|
||
Other
|
|
266
|
|
|
290
|
|
||
Subtotal
|
|
22,132
|
|
|
13,798
|
|
||
Amounts allocated from:
|
|
|
|
|
||||
Future policy benefits
|
|
(222
|
)
|
|
31
|
|
||
DAC, VOBA and DSI
|
|
(1,912
|
)
|
|
(1,231
|
)
|
||
Policyholder dividend obligation
|
|
(1,116
|
)
|
|
(428
|
)
|
||
Subtotal
|
|
(3,250
|
)
|
|
(1,628
|
)
|
||
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
|
|
(4
|
)
|
|
(3
|
)
|
||
Deferred income tax benefit (expense)
|
|
(5,004
|
)
|
|
(3,502
|
)
|
||
Net unrealized investment gains (losses)
|
|
13,874
|
|
|
8,665
|
|
||
Net unrealized investment gains (losses) attributable to noncontrolling interests
|
|
(12
|
)
|
|
(10
|
)
|
||
Net unrealized investment gains (losses) attributable to MetLife, Inc.
|
|
$
|
13,862
|
|
|
$
|
8,655
|
|
|
Three Months
Ended March 31, 2019 |
||
|
(In millions)
|
||
Balance, beginning of period
|
$
|
8,655
|
|
Cumulative effects of changes in accounting principles, net of income tax (Note 1)
|
21
|
|
|
Fixed maturity securities AFS on which noncredit OTTI losses have been recognized
|
4
|
|
|
Unrealized investment gains (losses) during the period
|
8,304
|
|
|
Unrealized investment gains (losses) relating to:
|
|
||
Future policy benefits
|
(253
|
)
|
|
DAC, VOBA and DSI
|
(681
|
)
|
|
Policyholder dividend obligation
|
(688
|
)
|
|
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI
|
(1
|
)
|
|
Deferred income tax benefit (expense)
|
(1,497
|
)
|
|
Net unrealized investment gains (losses)
|
13,864
|
|
|
Net unrealized investment gains (losses) attributable to noncontrolling interests
|
(2
|
)
|
|
Balance, end of period
|
$
|
13,862
|
|
Change in net unrealized investment gains (losses)
|
$
|
5,209
|
|
Change in net unrealized investment gains (losses) attributable to noncontrolling interests
|
(2
|
)
|
|
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.
|
$
|
5,207
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Securities on Loan (1)
|
|
|
|
|
|
Securities on Loan (1)
|
|
|
||||||||||||||||||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
|
Cash Collateral Received from Counterparties (2), (3)
|
|
Reinvestment Portfolio at Estimated Fair Value
|
|
Amortized Cost
|
|
Estimated Fair Value
|
|
Cash Collateral Received from Counterparties (2), (3)
|
|
Reinvestment Portfolio at Estimated Fair Value
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Securities lending
|
$
|
16,716
|
|
|
$
|
17,923
|
|
|
$
|
18,283
|
|
|
$
|
18,319
|
|
|
$
|
16,969
|
|
|
$
|
17,724
|
|
|
$
|
18,005
|
|
|
$
|
18,074
|
|
Repurchase agreements
|
$
|
1,838
|
|
|
$
|
1,965
|
|
|
$
|
1,930
|
|
|
$
|
1,945
|
|
|
$
|
1,033
|
|
|
$
|
1,093
|
|
|
$
|
1,067
|
|
|
$
|
1,069
|
|
(1)
|
Securities on loan in connection with securities lending are included within fixed maturities securities AFS and short-term investments and securities on loan in connection with repurchase agreements are included within fixed maturities securities AFS and short-term investments.
|
(2)
|
In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of
$71 million
and
$78 million
at
March 31, 2019
and
December 31, 2018
, respectively
, which may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements.
|
(3)
|
The securities lending liability for cash collateral is included within payables for collateral under securities loaned and other transactions, and the repurchase agreements liability for cash collateral is included within payables for collateral under securities loaned and other transactions and other liabilities.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Remaining Maturities
|
|
|
|
Remaining Maturities
|
|
|
||||||||||||||||||||||||
|
Open (1)
|
|
1 Month
or Less
|
|
Over
1 to 6
Months
|
|
Total
|
|
Open (1)
|
|
1 Month
or Less
|
|
Over
1 to 6
Months
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Cash collateral liability by loaned security type:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Securities lending:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government and agency
|
$
|
3,532
|
|
|
$
|
5,000
|
|
|
$
|
8,650
|
|
|
$
|
17,182
|
|
|
$
|
2,736
|
|
|
$
|
8,995
|
|
|
$
|
5,220
|
|
|
$
|
16,951
|
|
Foreign government
|
—
|
|
|
204
|
|
|
818
|
|
|
1,022
|
|
|
—
|
|
|
214
|
|
|
761
|
|
|
975
|
|
||||||||
Agency RMBS
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
||||||||
Total
|
$
|
3,532
|
|
|
$
|
5,283
|
|
|
$
|
9,468
|
|
|
$
|
18,283
|
|
|
$
|
2,736
|
|
|
$
|
9,288
|
|
|
$
|
5,981
|
|
|
$
|
18,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Repurchase agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government and agency
|
$
|
—
|
|
|
$
|
1,860
|
|
|
$
|
—
|
|
|
$
|
1,860
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
All other corporate and government
|
—
|
|
|
—
|
|
|
70
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
67
|
|
||||||||
Total
|
$
|
—
|
|
|
$
|
1,860
|
|
|
$
|
70
|
|
|
$
|
1,930
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
67
|
|
|
$
|
1,067
|
|
(1)
|
The related loaned security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.
The estimated fair value of the securities on loan related to this cash collateral at
March 31, 2019
was
$3.5 billion
,
all
of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Invested assets on deposit (regulatory deposits)
|
|
$
|
1,898
|
|
|
$
|
1,788
|
|
Invested assets held in trust (collateral financing arrangement and reinsurance agreements)
|
|
3,262
|
|
|
2,971
|
|
||
Invested assets pledged as collateral (1)
|
|
24,471
|
|
|
24,168
|
|
||
Total invested assets on deposit, held in trust and pledged as collateral
|
|
$
|
29,631
|
|
|
$
|
28,927
|
|
(1)
|
The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements, secured debt, a collateral financing arrangement (see Notes 4, 12 and 13 of the Notes to the Consolidated Financial Statements included in the
2018
Annual Report) and derivative transactions (see
Note 6
).
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Total
Assets |
|
Total
Liabilities |
|
Total
Assets |
|
Total
Liabilities |
||||||||
|
|
(In millions)
|
||||||||||||||
Renewable energy partnership (1)
|
|
$
|
103
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
—
|
|
Investment funds (2)
|
|
117
|
|
|
1
|
|
|
79
|
|
|
1
|
|
||||
Other investments (1)
|
|
20
|
|
|
5
|
|
|
21
|
|
|
5
|
|
||||
Total
|
|
$
|
240
|
|
|
$
|
6
|
|
|
$
|
202
|
|
|
$
|
6
|
|
(1)
|
Assets of the renewable energy partnership and other investments primarily consisted of other invested assets.
|
(2)
|
Assets of the investment funds primarily consisted of other invested assets at
March 31, 2019
and cash and cash equivalents at
December 31, 2018
.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying
Amount |
|
Maximum
Exposure to Loss (1) |
|
Carrying
Amount |
|
Maximum
Exposure to Loss (1) |
||||||||
|
|
(In millions)
|
||||||||||||||
Fixed maturity securities AFS:
|
|
|
|
|
|
|
|
|
||||||||
Structured Securities (2)
|
|
$
|
48,865
|
|
|
$
|
48,865
|
|
|
$
|
47,874
|
|
|
$
|
47,874
|
|
U.S. and foreign corporate
|
|
1,127
|
|
|
1,127
|
|
|
932
|
|
|
932
|
|
||||
Foreign government
|
|
137
|
|
|
137
|
|
|
—
|
|
|
—
|
|
||||
Other limited partnership interests
|
|
5,772
|
|
|
10,573
|
|
|
5,641
|
|
|
9,888
|
|
||||
Other invested assets
|
|
1,825
|
|
|
1,960
|
|
|
1,906
|
|
|
2,063
|
|
||||
Other investments
|
|
349
|
|
|
421
|
|
|
296
|
|
|
300
|
|
||||
Total
|
|
$
|
58,075
|
|
|
$
|
63,083
|
|
|
$
|
56,649
|
|
|
$
|
61,057
|
|
(1)
|
The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of
$76 million
and
$94 million
at
March 31, 2019
and
December 31, 2018
, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.
|
(2)
|
For these variable interests, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
(In millions)
|
|||||||
Investment income:
|
|
|
|
|
||||
Fixed maturity securities AFS
|
|
$
|
2,939
|
|
|
$
|
2,896
|
|
Equity securities
|
|
17
|
|
|
16
|
|
||
FVO Securities (1)
|
|
55
|
|
|
6
|
|
||
Mortgage loans
|
|
912
|
|
|
792
|
|
||
Policy loans
|
|
128
|
|
|
124
|
|
||
Real estate and real estate joint ventures
|
|
130
|
|
|
168
|
|
||
Other limited partnership interests
|
|
123
|
|
|
207
|
|
||
Cash, cash equivalents and short-term investments
|
|
128
|
|
|
72
|
|
||
Operating joint ventures
|
|
18
|
|
|
13
|
|
||
Other
|
|
78
|
|
|
106
|
|
||
Subtotal
|
|
4,528
|
|
|
4,400
|
|
||
Less: Investment expenses
|
|
356
|
|
|
302
|
|
||
Subtotal, net
|
|
4,172
|
|
|
4,098
|
|
||
Unit-linked investments (1)
|
|
736
|
|
|
(353
|
)
|
||
Net investment income
|
|
$
|
4,908
|
|
|
$
|
3,745
|
|
(1)
|
Changes in estimated fair value subsequent to purchase for investments still held as of the end of the respective periods included in net investment income were principally from contractholder-directed equity securities supporting unit-linked variable annuity type liabilities (“Unit-linked investments”), and were
$648 million
and
($373) million
for the
three months ended
March 31, 2019
and
2018
, respectively.
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
(In millions)
|
|||||||
Total gains (losses) on fixed maturity securities AFS:
|
|
|
|
|
||||
Total OTTI losses recognized — by sector and industry:
|
|
|
|
|
||||
U.S. and foreign corporate securities — by industry:
|
|
|
|
|
||||
Industrial
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
Total U.S. and foreign corporate securities
|
|
(8
|
)
|
|
—
|
|
||
RMBS
|
|
(2
|
)
|
|
—
|
|
||
OTTI losses on fixed maturity securities AFS recognized in earnings
|
|
(10
|
)
|
|
—
|
|
||
Fixed maturity securities AFS — net gains (losses) on sales and disposals
|
|
(14
|
)
|
|
(95
|
)
|
||
Total gains (losses) on fixed maturity securities AFS
|
|
(24
|
)
|
|
(95
|
)
|
||
Total gains (losses) on equity securities:
|
|
|
|
|
||||
Equity securities — net gains (losses) on sales and disposals
|
|
43
|
|
|
102
|
|
||
Change in estimated fair value of equity securities (1)
|
|
64
|
|
|
(133
|
)
|
||
Total gains (losses) on equity securities
|
|
107
|
|
|
(31
|
)
|
||
Mortgage loans
|
|
(15
|
)
|
|
(21
|
)
|
||
Real estate and real estate joint ventures
|
|
5
|
|
|
25
|
|
||
Other (2)
|
|
(68
|
)
|
|
(130
|
)
|
||
Subtotal
|
|
5
|
|
|
(252
|
)
|
||
Change in estimated fair value of other limited partnership interests and real estate joint ventures
|
|
(15
|
)
|
|
(5
|
)
|
||
Non-investment portfolio gains (losses) (3)
|
|
25
|
|
|
(76
|
)
|
||
Subtotal
|
|
10
|
|
|
(81
|
)
|
||
Total net investment gains (losses)
|
|
$
|
15
|
|
|
$
|
(333
|
)
|
(1)
|
Changes in estimated fair value subsequent to purchase for equity securities still held as of the end of the period included in net investment gains (losses) were
$97 million
and
($37) million
for the
three months ended
March 31, 2019
and
2018
, respectively.
|
(2)
|
Other gains (losses) for the
three months ended
March 31, 2019
, included tax credit partnership impairment losses of
($78) million
and renewable energy partnership disposal gains of
$46 million
. Other gains (losses) for the
three months ended
March 31, 2018
, included leveraged lease impairment losses of
($105) million
.
|
(3)
|
Non-investment portfolio gains (losses) for the
three months ended
March 31, 2018
, included a loss of
$168 million
which represents the change in estimated fair value of Brighthouse Financial, Inc. common stock held by the Company.
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Proceeds
|
$
|
15,825
|
|
|
$
|
19,070
|
|
Gross investment gains
|
$
|
205
|
|
|
$
|
106
|
|
Gross investment losses
|
(219
|
)
|
|
(201
|
)
|
||
OTTI losses
|
(10
|
)
|
|
—
|
|
||
Net investment gains (losses)
|
$
|
(24
|
)
|
|
$
|
(95
|
)
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Balance, beginning of period
|
$
|
89
|
|
|
$
|
138
|
|
Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI
|
(3
|
)
|
|
(9
|
)
|
||
Increase in cash flows — accretion of previous credit loss OTTI
|
(1
|
)
|
|
(1
|
)
|
||
Balance, end of period
|
$
|
85
|
|
|
$
|
128
|
|
Statement of Operations Presentation:
|
Derivative:
|
|
Policyholder benefits and claims
|
•
|
Economic hedges of variable annuity guarantees included in future policy benefits
|
Net investment income
|
•
|
Economic hedges of equity method investments in joint ventures
|
|
•
|
Derivatives held within Unit-linked investments
|
•
|
Fair value hedge
- a hedge of the estimated fair value of a recognized asset or liability - in the same line item as the earnings effect of the hedged item. The carrying value of the hedged recognized asset or liability is adjusted for changes in its estimated fair value due to the hedged risk.
|
•
|
Cash flow hedge
- a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability - in OCI and reclassified into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.
|
•
|
Net investment in a foreign operation (“NIFO”) hedge
- in OCI, consistent with the translation adjustment for the hedged net investment in the foreign operation.
|
•
|
the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value recorded in earnings;
|
•
|
the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and
|
•
|
a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument.
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||
|
|
Net Investment Income
|
|
Net Investment Gains (Losses)
|
|
Net Derivative Gains (Losses)
|
|
Policyholder Benefits and Claims
|
|
Interest Credited to Policyholder Account Balances
|
|
Other Expenses
|
|
OCI
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Gain (Loss) on Fair Value Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivatives designated as hedging instruments (1)
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
|
Hedged items
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Foreign currency exchange rate derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivatives designated as hedging instruments (1)
|
|
(30
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Hedged items
|
|
29
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Amount excluded from the assessment of hedge effectiveness
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Subtotal
|
|
(1
|
)
|
|
(18
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Gain (Loss) on Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate derivatives: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amount of gains (losses) deferred in AOCI
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
252
|
|
||||||
Amount of gains (losses) reclassified from AOCI into income
|
|
5
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||||||
Foreign currency exchange rate derivatives: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amount of gains (losses) deferred in AOCI
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(241
|
)
|
|||||||
Amount of gains (losses) reclassified from AOCI into income
|
|
(2
|
)
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|||||||
Foreign currency transaction gains (losses) on hedged items
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Credit derivatives: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amount of gains (losses) deferred in AOCI
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|||||||
Amount of gains (losses) reclassified from AOCI into income
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Subtotal
|
|
3
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(13
|
)
|
|||||||
Gain (Loss) on NIFO Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign currency exchange rate derivatives (1)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(6
|
)
|
|||||||
Subtotal
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(6
|
)
|
|||||||
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate derivatives (1)
|
|
(1
|
)
|
|
—
|
|
|
409
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Foreign currency exchange rate derivatives (1)
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Credit derivatives — purchased (1)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Credit derivatives — written (1)
|
|
—
|
|
|
—
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Equity derivatives (1)
|
|
—
|
|
|
—
|
|
|
(667
|
)
|
|
(96
|
)
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Foreign currency transaction gains (losses) on hedged items
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Subtotal
|
|
(1
|
)
|
|
—
|
|
|
(197
|
)
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Earned income on derivatives
|
|
56
|
|
|
—
|
|
|
119
|
|
|
32
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|||||||
Embedded derivatives (2)
|
|
N/A
|
|
|
N/A
|
|
|
193
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||||
Total
|
|
$
|
57
|
|
|
$
|
(33
|
)
|
|
$
|
115
|
|
|
$
|
(43
|
)
|
|
$
|
(32
|
)
|
|
$
|
1
|
|
|
$
|
(19
|
)
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||||||
|
|
Net Investment Income
|
|
Net Investment Gains (Losses)
|
|
Net Derivative Gains (Losses)
|
|
Policyholder Benefits and Claims
|
|
Interest Credited to Policyholder Account Balances
|
|
Other Expenses
|
|
OCI
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Gain (Loss) on Fair Value Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivatives designated as hedging instruments (1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(210
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
|
Hedged items
|
|
—
|
|
|
—
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Foreign currency exchange rate derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivatives designated as hedging instruments (1)
|
|
—
|
|
|
—
|
|
|
170
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Hedged items
|
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Amount excluded from the assessment of hedge effectiveness
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Subtotal
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Gain (Loss) on Cash Flow Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate derivatives: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amount of gains (losses) deferred in AOCI
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
(277
|
)
|
||||||
Amount of gains (losses) reclassified from AOCI into income
|
|
4
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|||||||
Foreign currency exchange rate derivatives: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amount of gains (losses) deferred in AOCI
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(75
|
)
|
|||||||
Amount of gains (losses) reclassified from AOCI into income
|
|
—
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(140
|
)
|
|||||||
Foreign currency transaction gains (losses) on hedged items
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Credit derivatives: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amount of gains (losses) deferred in AOCI
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|||||||
Amount of gains (losses) reclassified from AOCI into income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Subtotal
|
|
4
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(517
|
)
|
|||||||
Gain (Loss) on NIFO Hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign currency exchange rate derivatives (1)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(157
|
)
|
|||||||
Subtotal
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
(157
|
)
|
|||||||
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate derivatives (1)
|
|
4
|
|
|
—
|
|
|
(235
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Foreign currency exchange rate derivatives (1)
|
|
—
|
|
|
—
|
|
|
387
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Credit derivatives — purchased (1)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Credit derivatives — written (1)
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Equity derivatives (1)
|
|
1
|
|
|
—
|
|
|
98
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Foreign currency transaction gains (losses) on hedged items
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Subtotal
|
|
5
|
|
|
—
|
|
|
154
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||||||
Earned income on derivatives
|
|
81
|
|
|
—
|
|
|
133
|
|
|
2
|
|
|
(23
|
)
|
|
(2
|
)
|
|
—
|
|
|||||||
Embedded derivatives (2)
|
|
N/A
|
|
|
N/A
|
|
|
37
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||||
Total
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
349
|
|
|
$
|
9
|
|
|
$
|
(23
|
)
|
|
$
|
(1
|
)
|
|
$
|
(674
|
)
|
(1)
|
Excludes earned income on derivatives.
|
(2)
|
The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were
($62) million
and
$20 million
for the three months ended March 31, 2019 and 2018, respectively.
|
|
|
March 31, 2019
|
||||||
Balance Sheet Line Item
|
|
Carrying Amount
of the Hedged
Assets/(Liabilities) |
|
Cumulative Amount
of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets/(Liabilities) (1) |
||||
|
|
(In millions)
|
||||||
Fixed maturity securities AFS
|
|
$
|
2,227
|
|
|
$
|
(1
|
)
|
Mortgage loans
|
|
$
|
1,245
|
|
|
$
|
(1
|
)
|
Future policy benefits
|
|
$
|
(5,399
|
)
|
|
$
|
(667
|
)
|
Policyholder account balances
|
|
$
|
(81
|
)
|
|
$
|
—
|
|
(1)
|
Includes
($1) million
of hedging adjustments on discontinued hedging relationships.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||
Rating Agency Designation of Referenced
Credit Obligations (1)
|
|
Estimated
Fair Value
of Credit
Default
Swaps
|
|
Maximum
Amount of Future Payments under Credit Default Swaps |
|
Weighted
Average Years to Maturity (2) |
|
Estimated
Fair Value
of Credit
Default
Swaps
|
|
Maximum
Amount of Future Payments under Credit Default Swaps |
|
Weighted
Average Years to Maturity (2) |
||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||
Aaa/Aa/A
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (3)
|
|
$
|
5
|
|
|
$
|
391
|
|
|
1.5
|
|
|
$
|
4
|
|
|
$
|
354
|
|
|
1.7
|
|
Credit default swaps referencing indices
|
|
33
|
|
|
2,317
|
|
|
2.4
|
|
|
28
|
|
|
2,154
|
|
|
2.5
|
|
||||
Subtotal
|
|
38
|
|
|
2,708
|
|
|
2.3
|
|
|
32
|
|
|
2,508
|
|
|
2.4
|
|
||||
Baa
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (3)
|
|
3
|
|
|
404
|
|
|
1.4
|
|
|
3
|
|
|
482
|
|
|
1.5
|
|
||||
Credit default swaps referencing indices
|
|
133
|
|
|
7,957
|
|
|
5.3
|
|
|
40
|
|
|
8,056
|
|
|
5.0
|
|
||||
Subtotal
|
|
136
|
|
|
8,361
|
|
|
5.1
|
|
|
43
|
|
|
8,538
|
|
|
4.8
|
|
||||
Ba
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (3)
|
|
—
|
|
|
10
|
|
|
1.2
|
|
|
—
|
|
|
15
|
|
|
2.0
|
|
||||
Credit default swaps referencing indices
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
|
—
|
|
|
10
|
|
|
1.2
|
|
|
—
|
|
|
15
|
|
|
2.0
|
|
||||
B
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single name credit default swaps (3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Credit default swaps referencing indices
|
|
21
|
|
|
330
|
|
|
5.2
|
|
|
7
|
|
|
330
|
|
|
5.0
|
|
||||
Subtotal
|
|
21
|
|
|
330
|
|
|
5.2
|
|
|
7
|
|
|
330
|
|
|
5.0
|
|
||||
Total
|
|
$
|
195
|
|
|
$
|
11,409
|
|
|
4.4
|
|
|
$
|
82
|
|
|
$
|
11,391
|
|
|
4.3
|
|
(1)
|
The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”) and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.
|
(2)
|
The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.
|
(3)
|
Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or state and political subdivisions.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
|
(In millions)
|
||||||||||||||
Gross estimated fair value of derivatives:
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral (1)
|
|
$
|
8,485
|
|
|
$
|
3,747
|
|
|
$
|
8,805
|
|
|
$
|
3,758
|
|
OTC-cleared (1)
|
|
435
|
|
|
37
|
|
|
245
|
|
|
33
|
|
||||
Exchange-traded
|
|
3
|
|
|
25
|
|
|
18
|
|
|
80
|
|
||||
Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)
|
|
8,923
|
|
|
3,809
|
|
|
9,068
|
|
|
3,871
|
|
||||
Gross amounts not offset on the interim condensed consolidated balance sheets:
|
|
|
|
|
|
|
|
|
||||||||
Gross estimated fair value of derivatives: (2)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(2,590
|
)
|
|
(2,590
|
)
|
|
(2,570
|
)
|
|
(2,570
|
)
|
||||
OTC-cleared
|
|
(22
|
)
|
|
(22
|
)
|
|
(25
|
)
|
|
(25
|
)
|
||||
Exchange-traded
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Cash collateral: (3), (4)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(3,613
|
)
|
|
—
|
|
|
(4,709
|
)
|
|
—
|
|
||||
OTC-cleared
|
|
(390
|
)
|
|
(6
|
)
|
|
(145
|
)
|
|
—
|
|
||||
Exchange-traded
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(57
|
)
|
||||
Securities collateral: (5)
|
|
|
|
|
|
|
|
|
||||||||
OTC-bilateral
|
|
(2,080
|
)
|
|
(1,126
|
)
|
|
(1,266
|
)
|
|
(1,134
|
)
|
||||
OTC-cleared
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(8
|
)
|
||||
Exchange-traded
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Net amount after application of master netting agreements and collateral
|
|
$
|
228
|
|
|
$
|
34
|
|
|
$
|
352
|
|
|
$
|
69
|
|
(1)
|
At
March 31, 2019
and
December 31, 2018
, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of
$101 million
and
$99 million
, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of
($7) million
and
($59) million
, respectively.
|
(2)
|
Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.
|
(3)
|
Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.
|
(4)
|
The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At
March 31, 2019
and
December 31, 2018
, the Company received excess cash collateral of
$139 million
and
$135 million
, respectively, and provided excess cash collateral of
$275 million
and
$226 million
, respectively, which is not included in the table above due to the foregoing limitation.
|
(5)
|
Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at
March 31, 2019
,
none
of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At
March 31, 2019
and
December 31, 2018
, the Company received excess securities collateral with an estimated fair value of
$74 million
and
$70 million
, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At
March 31, 2019
and
December 31, 2018
, the Company provided excess securities collateral with an estimated fair value of
$173 million
and
$212 million
, respectively, for its OTC-bilateral derivatives, and
$639 million
and
$601 million
, respectively, for its OTC-cleared derivatives, and
$115 million
and
$90 million
, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
|
Derivatives
Subject to Credit- Contingent Provisions |
|
Derivatives
Not Subject to Credit- Contingent Provisions |
|
Total
|
|
Derivatives
Subject to
Credit-
Contingent
Provisions
|
|
Derivatives
Not Subject to Credit- Contingent Provisions |
|
Total
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Estimated Fair Value of Derivatives in a Net Liability Position (1)
|
|
$
|
1,135
|
|
|
$
|
21
|
|
|
$
|
1,156
|
|
|
$
|
1,148
|
|
|
$
|
40
|
|
|
$
|
1,188
|
|
Estimated Fair Value of Collateral Provided:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturity securities AFS
|
|
$
|
1,223
|
|
|
$
|
9
|
|
|
$
|
1,232
|
|
|
$
|
1,218
|
|
|
$
|
9
|
|
|
$
|
1,227
|
|
Cash
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
(1)
|
After taking into consideration the existence of netting agreements.
|
|
|
Balance Sheet Location
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
(In millions)
|
||||||
Embedded derivatives within asset host contracts:
|
|
|
|
|
|
|
||||
Ceded guaranteed minimum benefits
|
|
Premiums, reinsurance and other receivables
|
|
$
|
69
|
|
|
$
|
71
|
|
Embedded derivatives within liability host contracts:
|
|
|
|
|
|
|
||||
Direct guaranteed minimum benefits
|
|
Policyholder account balances
|
|
$
|
182
|
|
|
$
|
298
|
|
Assumed guaranteed minimum benefits
|
|
Policyholder account balances
|
|
393
|
|
|
495
|
|
||
Funds withheld on ceded reinsurance
|
|
Other liabilities
|
|
4
|
|
|
(41
|
)
|
||
Fixed annuities with equity indexed returns
|
|
Policyholder account balances
|
|
95
|
|
|
58
|
|
||
Embedded derivatives within liability host contracts
|
|
$
|
674
|
|
|
$
|
810
|
|
|
|
March 31, 2019
|
||||||||||||||
|
|
Fair Value Hierarchy
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||
|
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities AFS:
|
|
|
|
|
|
|
|
|
||||||||
U.S. corporate
|
|
$
|
—
|
|
|
$
|
75,935
|
|
|
$
|
4,211
|
|
|
$
|
80,146
|
|
Foreign government
|
|
—
|
|
|
64,798
|
|
|
157
|
|
|
64,955
|
|
||||
Foreign corporate
|
|
—
|
|
|
53,194
|
|
|
6,751
|
|
|
59,945
|
|
||||
U.S. government and agency
|
|
21,022
|
|
|
19,986
|
|
|
—
|
|
|
41,008
|
|
||||
RMBS
|
|
20
|
|
|
25,102
|
|
|
3,238
|
|
|
28,360
|
|
||||
ABS
|
|
—
|
|
|
12,167
|
|
|
464
|
|
|
12,631
|
|
||||
Municipals
|
|
—
|
|
|
11,898
|
|
|
—
|
|
|
11,898
|
|
||||
CMBS
|
|
—
|
|
|
9,100
|
|
|
367
|
|
|
9,467
|
|
||||
Total fixed maturity securities AFS
|
|
21,042
|
|
|
272,180
|
|
|
15,188
|
|
|
308,410
|
|
||||
Equity securities
|
|
901
|
|
|
97
|
|
|
434
|
|
|
1,432
|
|
||||
Unit-linked and FVO Securities (1)
|
|
10,780
|
|
|
2,008
|
|
|
457
|
|
|
13,245
|
|
||||
Short-term investments (2)
|
|
1,487
|
|
|
2,195
|
|
|
138
|
|
|
3,820
|
|
||||
Residential mortgage loans — FVO
|
|
—
|
|
|
—
|
|
|
276
|
|
|
276
|
|
||||
Other investments
|
|
81
|
|
|
134
|
|
|
168
|
|
|
383
|
|
||||
Derivative assets: (3)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
—
|
|
|
5,385
|
|
|
44
|
|
|
5,429
|
|
||||
Foreign currency exchange rate
|
|
—
|
|
|
2,400
|
|
|
68
|
|
|
2,468
|
|
||||
Credit
|
|
—
|
|
|
185
|
|
|
30
|
|
|
215
|
|
||||
Equity market
|
|
3
|
|
|
652
|
|
|
55
|
|
|
710
|
|
||||
Total derivative assets
|
|
3
|
|
|
8,622
|
|
|
197
|
|
|
8,822
|
|
||||
Embedded derivatives within asset host contracts (4)
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
||||
Separate account assets (5)
|
|
84,812
|
|
|
100,049
|
|
|
904
|
|
|
185,765
|
|
||||
Total assets (6)
|
|
$
|
119,106
|
|
|
$
|
385,285
|
|
|
$
|
17,831
|
|
|
$
|
522,222
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities: (3)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
$
|
4
|
|
|
$
|
164
|
|
|
$
|
117
|
|
|
$
|
285
|
|
Foreign currency exchange rate
|
|
3
|
|
|
2,595
|
|
|
56
|
|
|
2,654
|
|
||||
Credit
|
|
—
|
|
|
65
|
|
|
1
|
|
|
66
|
|
||||
Equity market
|
|
18
|
|
|
701
|
|
|
92
|
|
|
811
|
|
||||
Total derivative liabilities
|
|
25
|
|
|
3,525
|
|
|
266
|
|
|
3,816
|
|
||||
Embedded derivatives within liability host contracts (4)
|
|
—
|
|
|
—
|
|
|
674
|
|
|
674
|
|
||||
Separate account liabilities (5)
|
|
1
|
|
|
23
|
|
|
7
|
|
|
31
|
|
||||
Total liabilities
|
|
$
|
26
|
|
|
$
|
3,548
|
|
|
$
|
947
|
|
|
$
|
4,521
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
Fair Value Hierarchy
|
|
|
||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||
|
|
(In millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities AFS:
|
|
|
|
|
|
|
|
|
||||||||
U.S. corporate
|
|
$
|
—
|
|
|
$
|
74,874
|
|
|
$
|
4,074
|
|
|
$
|
78,948
|
|
Foreign government
|
|
—
|
|
|
62,150
|
|
|
138
|
|
|
62,288
|
|
||||
Foreign corporate
|
|
—
|
|
|
50,310
|
|
|
6,393
|
|
|
56,703
|
|
||||
U.S. government and agency
|
|
19,656
|
|
|
19,666
|
|
|
—
|
|
|
39,322
|
|
||||
RMBS
|
|
—
|
|
|
24,734
|
|
|
3,227
|
|
|
27,961
|
|
||||
ABS
|
|
—
|
|
|
11,775
|
|
|
697
|
|
|
12,472
|
|
||||
Municipals
|
|
—
|
|
|
11,533
|
|
|
—
|
|
|
11,533
|
|
||||
CMBS
|
|
—
|
|
|
8,696
|
|
|
342
|
|
|
9,038
|
|
||||
Total fixed maturity securities AFS
|
|
19,656
|
|
|
263,738
|
|
|
14,871
|
|
|
298,265
|
|
||||
Equity securities
|
|
916
|
|
|
105
|
|
|
419
|
|
|
1,440
|
|
||||
Unit-linked and FVO Securities (1)
|
|
10,216
|
|
|
1,995
|
|
|
405
|
|
|
12,616
|
|
||||
Short-term investments (2)
|
|
1,470
|
|
|
1,746
|
|
|
33
|
|
|
3,249
|
|
||||
Residential mortgage loans — FVO
|
|
—
|
|
|
—
|
|
|
299
|
|
|
299
|
|
||||
Other investments
|
|
80
|
|
|
118
|
|
|
39
|
|
|
237
|
|
||||
Derivative assets: (3)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
1
|
|
|
4,809
|
|
|
33
|
|
|
4,843
|
|
||||
Foreign currency exchange rate
|
|
4
|
|
|
2,922
|
|
|
52
|
|
|
2,978
|
|
||||
Credit
|
|
—
|
|
|
91
|
|
|
29
|
|
|
120
|
|
||||
Equity market
|
|
13
|
|
|
956
|
|
|
59
|
|
|
1,028
|
|
||||
Total derivative assets
|
|
18
|
|
|
8,778
|
|
|
173
|
|
|
8,969
|
|
||||
Embedded derivatives within asset host contracts (4)
|
|
—
|
|
|
—
|
|
|
71
|
|
|
71
|
|
||||
Separate account assets (5)
|
|
79,726
|
|
|
94,886
|
|
|
944
|
|
|
175,556
|
|
||||
Total assets (6)
|
|
$
|
112,082
|
|
|
$
|
371,366
|
|
|
$
|
17,254
|
|
|
$
|
500,702
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities: (3)
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
|
$
|
3
|
|
|
$
|
194
|
|
|
$
|
218
|
|
|
$
|
415
|
|
Foreign currency exchange rate
|
|
—
|
|
|
2,660
|
|
|
89
|
|
|
2,749
|
|
||||
Credit
|
|
—
|
|
|
48
|
|
|
4
|
|
|
52
|
|
||||
Equity market
|
|
77
|
|
|
550
|
|
|
87
|
|
|
714
|
|
||||
Total derivative liabilities
|
|
80
|
|
|
3,452
|
|
|
398
|
|
|
3,930
|
|
||||
Embedded derivatives within liability host contracts (4)
|
|
—
|
|
|
—
|
|
|
810
|
|
|
810
|
|
||||
Separate account liabilities (5)
|
|
1
|
|
|
20
|
|
|
7
|
|
|
28
|
|
||||
Total liabilities
|
|
$
|
81
|
|
|
$
|
3,472
|
|
|
$
|
1,215
|
|
|
$
|
4,768
|
|
(1)
|
Unit-linked and FVO Securities were primarily comprised of Unit-linked investments at both March 31, 2019 and December 31, 2018.
|
(2)
|
Short-term investments as presented in the tables above differ from the amounts presented on the consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis.
|
(3)
|
Derivative assets are presented within other invested assets on the interim condensed consolidated balance sheets and derivative liabilities are presented within other liabilities on the interim condensed consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the interim condensed consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.
|
(4)
|
Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables and other invested assets on the interim condensed consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the interim condensed consolidated balance sheets.
|
(5)
|
Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. Separate account liabilities presented in the tables above represent derivative liabilities.
|
(6)
|
Total assets included in the fair value hierarchy excluded other limited partnership interests that are measured at estimated fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient. At March 31, 2019 and December 31, 2018, the estimated fair value of such investments was
$113 million
and
$145 million
, respectively.
|
Instrument
|
Level 2
Observable Inputs
|
Level 3
Unobservable Inputs
|
|||
Fixed maturity securities AFS
|
|||||
U.S. corporate and Foreign corporate securities
|
|||||
|
Valuation Approaches: Principally the market and income approaches.
|
Valuation Approaches: Principally the market approach.
|
|||
|
Key Inputs:
|
Key Inputs:
|
|||
|
•
|
quoted prices in markets that are not active
|
•
|
illiquidity premium
|
|
|
•
|
benchmark yields; spreads off benchmark yields; new issuances; issuer rating
|
•
|
delta spread adjustments to reflect specific credit-related issues
|
|
|
•
|
trades of identical or comparable securities; duration
|
•
|
credit spreads
|
|
|
•
|
Privately-placed securities are valued using the additional key inputs:
|
•
|
quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2
|
|
|
|
•
|
market yield curve; call provisions
|
|
|
|
|
•
|
observable prices and spreads for similar public or private securities that incorporate the credit quality and industry sector of the issuer
|
•
|
independent non-binding broker quotations
|
|
|
•
|
delta spread adjustments to reflect specific credit-related issues
|
|
|
Foreign government securities, U.S. government and agency securities and Municipals
|
|||||
|
Valuation Approaches: Principally the market approach.
|
Valuation Approaches: Principally the market approach.
|
|||
|
Key Inputs:
|
Key Inputs:
|
|||
|
•
|
quoted prices in markets that are not active
|
•
|
independent non-binding broker quotations
|
|
|
•
|
benchmark U.S. Treasury yield or other yields
|
•
|
quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2
|
|
|
•
|
the spread off the U.S. Treasury yield curve for the identical security
|
|
||
|
•
|
issuer ratings and issuer spreads; broker-dealer quotes
|
•
|
credit spreads
|
|
|
•
|
comparable securities that are actively traded
|
|
|
|
Structured Securities
|
|||||
|
Valuation Approaches: Principally the market and income approaches.
|
Valuation Approaches: Principally the market and income approaches.
|
|||
|
Key Inputs:
|
Key Inputs:
|
|||
|
•
|
quoted prices in markets that are not active
|
•
|
credit spreads
|
|
|
•
|
spreads for actively traded securities; spreads off benchmark yields
|
•
|
quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2
|
|
|
•
|
expected prepayment speeds and volumes
|
|
||
|
•
|
current and forecasted loss severity; ratings; geographic region
|
•
|
independent non-binding broker quotations
|
|
|
•
|
weighted average coupon and weighted average maturity
|
|
|
|
|
•
|
average delinquency rates; debt-service coverage ratios
|
|
|
|
|
•
|
issuance-specific information, including, but not limited to:
|
|
|
|
|
|
•
|
collateral type; structure of the security; vintage of the loans
|
|
|
|
|
•
|
payment terms of the underlying assets
|
|
|
|
|
•
|
payment priority within the tranche; deal performance
|
|
|
(1)
|
Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. Fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents are similar in nature to the instruments described under “— Securities, Short-term Investments and Other Investments,” and “— Derivatives — Freestanding Derivatives.”
|
Instrument
|
|
Interest Rate
|
|
Foreign Currency
Exchange Rate
|
|
Credit
|
|
Equity Market
|
Inputs common to Level 2 and Level 3 by instrument type
|
•
|
swap yield curves
|
•
|
swap yield curves
|
•
|
swap yield curves
|
•
|
swap yield curves
|
•
|
basis curves
|
•
|
basis curves
|
•
|
credit curves
|
•
|
spot equity index levels
|
|
•
|
interest rate volatility (1)
|
•
|
currency spot rates
|
•
|
recovery rates
|
•
|
dividend yield curves
|
|
|
|
|
•
|
cross currency basis curves
|
|
|
•
|
equity volatility (1)
|
|
|
|
•
|
currency volatility (1)
|
|
|
|
|
Level 3
|
•
|
swap yield curves (2)
|
•
|
swap yield curves (2)
|
•
|
swap yield curves (2)
|
•
|
dividend yield curves (2)
|
|
•
|
basis curves (2)
|
•
|
basis curves (2)
|
•
|
credit curves (2)
|
•
|
equity volatility (1), (2)
|
|
•
|
repurchase rates
|
•
|
cross currency basis curves (2)
|
•
|
credit spreads
|
•
|
correlation between model inputs (1)
|
|
|
|
•
|
currency correlation
|
•
|
repurchase rates
|
|
|
|
|
|
•
|
currency volatility (1)
|
•
|
independent non-binding broker quotations
|
|
|
(1)
|
Option-based only.
|
(2)
|
Extrapolation beyond the observable limits of the curve(s).
|
|
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Impact of
Increase in Input on Estimated Fair Value (2) |
||||||||
|
Valuation
Techniques |
|
Significant
Unobservable Inputs |
|
Range
|
|
Weighted
Average (1) |
|
Range
|
|
Weighted
Average (1) |
|
|||||||
Fixed maturity securities AFS (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
U.S. corporate and foreign corporate
|
•
|
Matrix pricing
|
|
•
|
Offered quotes (4)
|
|
88
|
-
|
140
|
|
108
|
|
85
|
-
|
134
|
|
104
|
|
Increase
|
|
•
|
Market pricing
|
|
•
|
Quoted prices (4)
|
|
25
|
-
|
583
|
|
114
|
|
25
|
-
|
638
|
|
110
|
|
Increase
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (4)
|
|
97
|
-
|
110
|
|
102
|
|
100
|
-
|
110
|
|
102
|
|
Increase
|
RMBS
|
•
|
Market pricing
|
|
•
|
Quoted prices (4)
|
|
—
|
-
|
108
|
|
95
|
|
—
|
-
|
106
|
|
94
|
|
Increase (5)
|
ABS
|
•
|
Market pricing
|
|
•
|
Quoted prices (4)
|
|
3
|
-
|
118
|
|
98
|
|
3
|
-
|
116
|
|
97
|
|
Increase (5)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (4)
|
|
98
|
-
|
104
|
|
101
|
|
100
|
-
|
103
|
|
101
|
|
Increase (5)
|
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate
|
•
|
Present value techniques
|
|
•
|
Swap yield (6)
|
|
240
|
-
|
322
|
|
|
|
268
|
-
|
317
|
|
|
|
Increase (7)
|
|
|
|
|
•
|
Repurchase rates (8)
|
|
(3)
|
-
|
20
|
|
|
|
(5)
|
-
|
6
|
|
|
|
Decrease (7)
|
Foreign currency exchange rate
|
•
|
Present value techniques
|
|
•
|
Swap yield (6)
|
|
(23)
|
-
|
328
|
|
|
|
(20)
|
-
|
328
|
|
|
|
Increase (7)
|
Credit
|
•
|
Present value techniques
|
|
•
|
Credit spreads (9)
|
|
97
|
-
|
101
|
|
|
|
97
|
-
|
103
|
|
|
|
Decrease (7)
|
|
•
|
Consensus pricing
|
|
•
|
Offered quotes (10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity market
|
•
|
Present value techniques or option pricing models
|
|
•
|
Volatility (11)
|
|
14%
|
-
|
23%
|
|
|
|
21%
|
-
|
26%
|
|
|
|
Increase (7)
|
|
|
|
|
•
|
Correlation (12)
|
|
10%
|
-
|
30%
|
|
|
|
10%
|
-
|
30%
|
|
|
|
|
Embedded derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Direct, assumed and ceded guaranteed minimum benefits
|
•
|
Option pricing techniques
|
|
•
|
Mortality rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ages 0 - 40
|
|
0%
|
-
|
0.18%
|
|
|
|
0%
|
-
|
0.18%
|
|
|
|
Decrease (13)
|
|
|
|
|
|
Ages 41 - 60
|
|
0.03%
|
-
|
0.80%
|
|
|
|
0.03%
|
-
|
0.80%
|
|
|
|
Decrease (13)
|
|
|
|
|
|
Ages 61 - 115
|
|
0.12%
|
-
|
100%
|
|
|
|
0.12%
|
-
|
100%
|
|
|
|
Decrease (13)
|
|
|
|
|
•
|
Lapse rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Durations 1 - 10
|
|
0.25%
|
-
|
100%
|
|
|
|
0.25%
|
-
|
100%
|
|
|
|
Decrease (14)
|
|
|
|
|
|
Durations 11 - 20
|
|
2%
|
-
|
100%
|
|
|
|
2%
|
-
|
100%
|
|
|
|
Decrease (14)
|
|
|
|
|
|
Durations 21 - 116
|
|
1.25%
|
-
|
100%
|
|
|
|
1.25%
|
-
|
100%
|
|
|
|
Decrease (14)
|
|
|
|
|
•
|
Utilization rates
|
|
0%
|
-
|
25%
|
|
|
|
0%
|
-
|
25%
|
|
|
|
Increase (15)
|
|
|
|
|
•
|
Withdrawal rates
|
|
0%
|
-
|
20%
|
|
|
|
0%
|
-
|
20%
|
|
|
|
(16)
|
|
|
|
|
•
|
Long-term equity volatilities
|
|
6.18%
|
-
|
30%
|
|
|
|
7.16%
|
-
|
30%
|
|
|
|
Increase (17)
|
|
|
|
|
•
|
Nonperformance risk spread
|
|
0%
|
-
|
1.53%
|
|
|
|
0.04%
|
-
|
1.77%
|
|
|
|
Decrease (18)
|
(1)
|
The weighted average for fixed maturity securities AFS is determined based on the estimated fair value of the securities.
|
(2)
|
The impact of a decrease in input would have resulted in the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to ceded guaranteed minimum benefits are based on asset positions.
|
(3)
|
Significant increases (decreases) in expected default rates in isolation would have resulted in substantially lower (higher) valuations.
|
(4)
|
Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS of dollars per hundred dollars of par.
|
(5)
|
Changes in the assumptions used for the probability of default would have been accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates.
|
(6)
|
Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation.
|
(7)
|
Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions.
|
(8)
|
Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points.
|
(9)
|
Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps.
|
(10)
|
At both
March 31, 2019
and
December 31, 2018
, independent non-binding broker quotations were used in the determination of less than
1%
of the total net derivative estimated fair value.
|
(11)
|
Ranges represent the underlying equity volatility quoted in percentage points. Since this valuation methodology uses a range of inputs across multiple volatility surfaces to value the derivative, presenting a range is more representative of the unobservable input used in the valuation.
|
(12)
|
Ranges represent the different correlation factors utilized as components within the valuation methodology. Presenting a range of correlation factors is more representative of the unobservable input used in the valuation. Increases (decreases) in correlation in isolation will increase (decrease) the significance of the change in valuations.
|
(13)
|
Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(14)
|
Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(15)
|
The utilization rate assumption estimates the percentage of contractholders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(16)
|
The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value.
|
(17)
|
Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative.
|
(18)
|
Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative.
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||
|
|
Fixed Maturity Securities AFS
|
|
|
|
|||||||||||||||
|
|
Corporate (1)
|
|
Foreign
Government |
|
Structured
Securities
|
|
Equity
Securities
|
|
Unit-linked and FVO
Securities
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, beginning of period
|
|
$
|
10,467
|
|
|
$
|
138
|
|
|
$
|
4,266
|
|
|
$
|
419
|
|
|
$
|
405
|
|
Total realized/unrealized gains (losses) included in net income (loss) (2), (3)
|
|
9
|
|
|
—
|
|
|
14
|
|
|
30
|
|
|
14
|
|
|||||
Total realized/unrealized gains (losses) included in AOCI
|
|
394
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|||||
Purchases (4)
|
|
463
|
|
|
20
|
|
|
264
|
|
|
6
|
|
|
41
|
|
|||||
Sales (4)
|
|
(270
|
)
|
|
(1
|
)
|
|
(139
|
)
|
|
(21
|
)
|
|
(3
|
)
|
|||||
Issuances (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Settlements (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Transfers into Level 3 (5)
|
|
284
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|||||
Transfers out of Level 3 (5)
|
|
(385
|
)
|
|
—
|
|
|
(359
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Balance, end of period
|
|
$
|
10,962
|
|
|
$
|
157
|
|
|
$
|
4,069
|
|
|
$
|
434
|
|
|
$
|
457
|
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, beginning of period
|
|
$
|
11,219
|
|
|
$
|
209
|
|
|
$
|
4,841
|
|
|
$
|
428
|
|
|
$
|
362
|
|
Total realized/unrealized gains (losses) included in net income (loss) (2), (3)
|
|
7
|
|
|
1
|
|
|
23
|
|
|
(6
|
)
|
|
5
|
|
|||||
Total realized/unrealized gains (losses) included in AOCI
|
|
(68
|
)
|
|
(3
|
)
|
|
24
|
|
|
—
|
|
|
—
|
|
|||||
Purchases (4)
|
|
512
|
|
|
2
|
|
|
657
|
|
|
1
|
|
|
27
|
|
|||||
Sales (4)
|
|
(542
|
)
|
|
(2
|
)
|
|
(324
|
)
|
|
(1
|
)
|
|
(59
|
)
|
|||||
Issuances (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Settlements (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Transfers into Level 3 (5)
|
|
46
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|||||
Transfers out of Level 3 (5)
|
|
(364
|
)
|
|
(28
|
)
|
|
(684
|
)
|
|
—
|
|
|
(49
|
)
|
|||||
Balance, end of period
|
|
$
|
10,810
|
|
|
$
|
179
|
|
|
$
|
4,582
|
|
|
$
|
422
|
|
|
$
|
286
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2019 (6)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
23
|
|
|
$
|
15
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2018 (6)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
|
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||||||||||||
|
|
Short-term
Investments
|
|
Residential
Mortgage
Loans — FVO |
|
Other Investments
|
|
Net
Derivatives (7)
|
|
Net Embedded
Derivatives (8)
|
|
Separate
Accounts (9) |
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, beginning of period
|
|
$
|
33
|
|
|
$
|
299
|
|
|
$
|
39
|
|
|
$
|
(225
|
)
|
|
$
|
(739
|
)
|
|
$
|
937
|
|
Total realized/unrealized gains (losses) included in net income (loss) (2), (3)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
70
|
|
|
193
|
|
|
3
|
|
||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
1
|
|
|
—
|
|
|
—
|
|
|
97
|
|
|
7
|
|
|
—
|
|
||||||
Purchases (4)
|
|
110
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||||
Sales (4)
|
|
(6
|
)
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(122
|
)
|
||||||
Issuances (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Settlements (4)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(11
|
)
|
|
(66
|
)
|
|
(1
|
)
|
||||||
Transfers into Level 3 (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Transfers out of Level 3 (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Balance, end of period
|
|
$
|
138
|
|
|
$
|
276
|
|
|
$
|
168
|
|
|
$
|
(69
|
)
|
|
$
|
(605
|
)
|
|
$
|
897
|
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, beginning of period
|
|
$
|
33
|
|
|
$
|
520
|
|
|
$
|
—
|
|
|
$
|
(132
|
)
|
|
$
|
(274
|
)
|
|
$
|
959
|
|
Total realized/unrealized gains (losses) included in net income (loss) (2), (3)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
11
|
|
|
36
|
|
|
2
|
|
||||||
Total realized/unrealized gains (losses) included in AOCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(16
|
)
|
|
—
|
|
||||||
Purchases (4)
|
|
605
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
||||||
Sales (4)
|
|
(3
|
)
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
||||||
Issuances (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Settlements (4)
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
43
|
|
|
(74
|
)
|
|
(1
|
)
|
||||||
Transfers into Level 3 (5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||||
Transfers out of Level 3 (5)
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
||||||
Balance, end of period
|
|
$
|
615
|
|
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
(182
|
)
|
|
$
|
(328
|
)
|
|
$
|
1,224
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2019 (6)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
192
|
|
|
$
|
—
|
|
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2018 (6)
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
31
|
|
|
$
|
—
|
|
(1)
|
Comprised of U.S. and foreign corporate securities.
|
(2)
|
Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses), while changes in estimated fair value of residential mortgage loans — FVO are included in net investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).
|
(3)
|
Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.
|
(4)
|
Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements.
|
(5)
|
Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.
|
(6)
|
Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).
|
(7)
|
Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
|
(8)
|
Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
|
(9)
|
Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses). Separate account assets and liabilities are presented net for the purposes of the rollforward.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(In millions)
|
||||||
Unpaid principal balance
|
|
$
|
324
|
|
|
$
|
344
|
|
Difference between estimated fair value and unpaid principal balance
|
|
(48
|
)
|
|
(45
|
)
|
||
Carrying value at estimated fair value
|
|
$
|
276
|
|
|
$
|
299
|
|
Loans in nonaccrual status
|
|
$
|
79
|
|
|
$
|
89
|
|
Loans more than 90 days past due
|
|
$
|
34
|
|
|
$
|
41
|
|
Loans in nonaccrual status or more than 90 days past due, or both — difference between aggregate estimated fair value and unpaid principal balance
|
|
$
|
(35
|
)
|
|
$
|
(36
|
)
|
|
|
March 31, 2019
|
||||||||||||||||||
|
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
|
Carrying
Value |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
|
$
|
78,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,936
|
|
|
$
|
79,936
|
|
Policy loans
|
|
$
|
9,670
|
|
|
$
|
—
|
|
|
$
|
335
|
|
|
$
|
11,121
|
|
|
$
|
11,456
|
|
Other invested assets
|
|
$
|
1,154
|
|
|
$
|
—
|
|
|
$
|
793
|
|
|
$
|
361
|
|
|
$
|
1,154
|
|
Premiums, reinsurance and other receivables
|
|
$
|
3,760
|
|
|
$
|
—
|
|
|
$
|
1,018
|
|
|
$
|
2,901
|
|
|
$
|
3,919
|
|
Other assets
|
|
$
|
314
|
|
|
$
|
—
|
|
|
$
|
153
|
|
|
$
|
177
|
|
|
$
|
330
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholder account balances
|
|
$
|
116,767
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
118,800
|
|
|
$
|
118,800
|
|
Long-term debt
|
|
$
|
12,836
|
|
|
$
|
—
|
|
|
$
|
14,298
|
|
|
$
|
—
|
|
|
$
|
14,298
|
|
Collateral financing arrangement
|
|
$
|
1,048
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
851
|
|
|
$
|
851
|
|
Junior subordinated debt securities
|
|
$
|
3,148
|
|
|
$
|
—
|
|
|
$
|
3,958
|
|
|
$
|
—
|
|
|
$
|
3,958
|
|
Other liabilities
|
|
$
|
3,287
|
|
|
$
|
—
|
|
|
$
|
1,666
|
|
|
$
|
2,258
|
|
|
$
|
3,924
|
|
Separate account liabilities
|
|
$
|
109,926
|
|
|
$
|
—
|
|
|
$
|
109,926
|
|
|
$
|
—
|
|
|
$
|
109,926
|
|
|
|
December 31, 2018
|
||||||||||||||||||
|
|
|
|
Fair Value Hierarchy
|
|
|
||||||||||||||
|
|
Carrying
Value |
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Estimated Fair Value |
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans
|
|
$
|
75,453
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76,379
|
|
|
$
|
76,379
|
|
Policy loans
|
|
$
|
9,699
|
|
|
$
|
—
|
|
|
$
|
338
|
|
|
$
|
11,028
|
|
|
$
|
11,366
|
|
Other invested assets
|
|
$
|
1,177
|
|
|
$
|
—
|
|
|
$
|
793
|
|
|
$
|
383
|
|
|
$
|
1,176
|
|
Premiums, reinsurance and other receivables
|
|
$
|
3,658
|
|
|
$
|
—
|
|
|
$
|
903
|
|
|
$
|
2,894
|
|
|
$
|
3,797
|
|
Other assets
|
|
$
|
326
|
|
|
$
|
—
|
|
|
$
|
164
|
|
|
$
|
186
|
|
|
$
|
350
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholder account balances
|
|
$
|
114,040
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114,924
|
|
|
$
|
114,924
|
|
Long-term debt
|
|
$
|
12,820
|
|
|
$
|
—
|
|
|
$
|
13,611
|
|
|
$
|
—
|
|
|
$
|
13,611
|
|
Collateral financing arrangement
|
|
$
|
1,060
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
853
|
|
|
$
|
853
|
|
Junior subordinated debt securities
|
|
$
|
3,147
|
|
|
$
|
—
|
|
|
$
|
3,738
|
|
|
$
|
—
|
|
|
$
|
3,738
|
|
Other liabilities
|
|
$
|
2,963
|
|
|
$
|
—
|
|
|
$
|
1,324
|
|
|
$
|
2,194
|
|
|
$
|
3,518
|
|
Separate account liabilities
|
|
$
|
104,010
|
|
|
$
|
—
|
|
|
$
|
104,010
|
|
|
$
|
—
|
|
|
$
|
104,010
|
|
|
|
March 31, 2019
|
||
|
|
(In millions)
|
||
ROU asset (1)
|
|
$
|
1,521
|
|
Lease liability (1)
|
|
$
|
1,673
|
|
(1)
|
Assets and liabilities include amounts recognized upon adoption of new guidance. See
Note 1
.
|
|
|
Three Months Ended March 31, 2019
|
||
|
|
(In millions)
|
||
Operating lease cost
|
|
$
|
72
|
|
Variable lease cost
|
|
8
|
|
|
Sublease income
|
|
(21
|
)
|
|
Net lease cost
|
|
$
|
59
|
|
|
|
March 31, 2019
|
||
|
|
(Dollars in millions)
|
||
Cash paid for amounts included in the measurement of lease liability - operating cash flows
|
|
$
|
74
|
|
ROU assets obtained in exchange for new lease liabilities
|
|
$
|
153
|
|
Weighted-average remaining lease term
|
|
8 years
|
|
|
Weighted-average discount rate
|
|
3.3
|
%
|
|
|
March 31, 2019
|
||
|
|
(In millions)
|
||
Remainder of 2019
|
|
$
|
209
|
|
2020
|
|
265
|
|
|
2021
|
|
240
|
|
|
2022
|
|
209
|
|
|
2023
|
|
196
|
|
|
Thereafter
|
|
825
|
|
|
Total undiscounted cash flows
|
|
1,944
|
|
|
Less: interest
|
|
271
|
|
|
Present value of lease liability
|
|
$
|
1,673
|
|
|
|
December 31, 2018
|
||
|
|
(In millions)
|
||
2019
|
|
$
|
292
|
|
2020
|
|
282
|
|
|
2021
|
|
260
|
|
|
2022
|
|
224
|
|
|
2023
|
|
209
|
|
|
Thereafter
|
|
859
|
|
|
Total
|
|
$
|
2,126
|
|
|
|
March 31, 2019
|
|||||||
Series
|
|
Shares
Authorized |
|
Shares
Issued |
|
Shares
Outstanding |
|||
Floating Rate Non-Cumulative Preferred Stock, Series A
|
|
27,600,000
|
|
|
24,000,000
|
|
|
24,000,000
|
|
5.25% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C
|
|
1,500,000
|
|
|
1,500,000
|
|
|
1,500,000
|
|
5.875% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series D
|
|
500,000
|
|
|
500,000
|
|
|
500,000
|
|
5.625% Non-Cumulative Preferred Stock, Series E
|
|
32,200
|
|
|
32,200
|
|
|
32,200
|
|
Series A Junior Participating Preferred Stock
|
|
10,000,000
|
|
|
—
|
|
|
—
|
|
Not designated
|
|
160,367,800
|
|
|
—
|
|
|
—
|
|
Total
|
|
200,000,000
|
|
|
26,032,200
|
|
|
26,032,200
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Preferred Stock Dividend
|
||||||||||||||||||||||||||||||
Series A
|
|
Series C
|
|
Series D
|
|
Series E
|
||||||||||||||||||||||||||||||
Per
Share
|
|
Aggregate
|
|
Per
Share |
|
Aggregate
|
|
Per
Share |
|
Aggregate
|
|
Per
Share |
|
Aggregate
|
||||||||||||||||||||||
|
|
|
|
|
|
(In millions, except per share data)
|
||||||||||||||||||||||||||||||
March 5, 2019
|
|
February 28, 2019
|
|
March 15, 2019
|
|
$
|
0.250
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
February 15, 2019
|
|
February 28, 2019
|
|
March 15, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29.375
|
|
|
15
|
|
|
351.563
|
|
|
11
|
|
||||||||
Total
|
|
|
|
|
|
$
|
0.250
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29.375
|
|
|
$
|
15
|
|
|
$
|
351.563
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
March 5, 2018
|
|
February 28, 2018
|
|
March 15, 2018
|
|
$
|
0.250
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Announcement Date
|
|
Authorization Amount
|
|
Authorization Remaining
At March 31, 2019
|
||||
|
|
(In millions)
|
||||||
November 1, 2018
|
|
$
|
2,000
|
|
|
$
|
770
|
|
May 22, 2018
|
|
$
|
1,500
|
|
|
$
|
—
|
|
November 1, 2017
|
|
$
|
2,000
|
|
|
$
|
—
|
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Common Stock Dividend
|
||||||
Per Share
|
|
Aggregate
|
||||||||||
|
|
|
|
|
|
(In millions, except per share data)
|
||||||
January 7, 2019
|
|
February 5, 2019
|
|
March 13, 2019
|
|
$
|
0.420
|
|
|
$
|
405
|
|
January 5, 2018
|
|
February 5, 2018
|
|
March 13, 2018
|
|
$
|
0.400
|
|
|
$
|
416
|
|
|
|
Three Months
Ended March 31, 2019 |
||||||||||||||||||
|
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
|
$
|
7,042
|
|
|
$
|
1,613
|
|
|
$
|
(4,905
|
)
|
|
$
|
(2,028
|
)
|
|
$
|
1,722
|
|
OCI before reclassifications
|
|
6,721
|
|
|
(11
|
)
|
|
(36
|
)
|
|
1
|
|
|
6,675
|
|
|||||
Deferred income tax benefit (expense)
|
|
(1,516
|
)
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|
(1,516
|
)
|
|||||
AOCI before reclassifications, net of income tax
|
|
12,247
|
|
|
1,608
|
|
|
(4,947
|
)
|
|
(2,027
|
)
|
|
6,881
|
|
|||||
Amounts reclassified from AOCI
|
|
(2
|
)
|
|
(24
|
)
|
|
—
|
|
|
29
|
|
|
3
|
|
|||||
Deferred income tax benefit (expense)
|
|
—
|
|
|
12
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|||||
Amounts reclassified from AOCI, net of income tax
|
|
(2
|
)
|
|
(12
|
)
|
|
—
|
|
|
23
|
|
|
9
|
|
|||||
Cumulative effects of changes in accounting principles
|
|
4
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||
Deferred income tax benefit (expense), cumulative effects of changes in accounting principles
|
|
(1
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Cumulative effects of changes in accounting principles, net of income tax (2)
|
|
3
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Balance, end of period
|
|
$
|
12,248
|
|
|
$
|
1,614
|
|
|
$
|
(4,947
|
)
|
|
$
|
(2,004
|
)
|
|
$
|
6,911
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months
Ended March 31, 2018 |
||||||||||||||||||
|
|
Unrealized
Investment Gains
(Losses), Net of
Related Offsets (1)
|
|
Unrealized
Gains (Losses)
on Derivatives
|
|
Foreign
Currency
Translation
Adjustments
|
|
Defined
Benefit
Plans
Adjustment
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Balance, beginning of period
|
|
$
|
12,757
|
|
|
$
|
905
|
|
|
$
|
(4,390
|
)
|
|
$
|
(1,845
|
)
|
|
$
|
7,427
|
|
OCI before reclassifications
|
|
(3,811
|
)
|
|
(352
|
)
|
|
552
|
|
|
(4
|
)
|
|
(3,615
|
)
|
|||||
Deferred income tax benefit (expense)
|
|
835
|
|
|
58
|
|
|
3
|
|
|
1
|
|
|
897
|
|
|||||
AOCI before reclassifications, net of income tax
|
|
9,781
|
|
|
611
|
|
|
(3,835
|
)
|
|
(1,848
|
)
|
|
4,709
|
|
|||||
Amounts reclassified from AOCI
|
|
45
|
|
|
(165
|
)
|
|
—
|
|
|
31
|
|
|
(89
|
)
|
|||||
Deferred income tax benefit (expense)
|
|
(10
|
)
|
|
27
|
|
|
—
|
|
|
(7
|
)
|
|
10
|
|
|||||
Amounts reclassified from AOCI, net of income tax
|
|
35
|
|
|
(138
|
)
|
|
—
|
|
|
24
|
|
|
(79
|
)
|
|||||
Cumulative effects of changes in accounting principles
|
|
(425
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(425
|
)
|
|||||
Deferred income tax benefit (expense), cumulative effects of changes in accounting principles (3)
|
|
1,473
|
|
|
210
|
|
|
36
|
|
|
(382
|
)
|
|
1,337
|
|
|||||
Cumulative effects of changes in accounting principles, net of income tax (3)
|
|
1,048
|
|
|
210
|
|
|
36
|
|
|
(382
|
)
|
|
912
|
|
|||||
Sale of subsidiary (4)
|
|
—
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
92
|
|
|||||
Balance, end of period
|
|
$
|
10,864
|
|
|
$
|
683
|
|
|
$
|
(3,707
|
)
|
|
$
|
(2,206
|
)
|
|
$
|
5,634
|
|
(1)
|
See Note
5
for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI, and the policyholder dividend obligation.
|
(2)
|
See
Note 1
for further information on adoption of new accounting pronouncements.
|
(3)
|
See Note 1 of the Notes to the Consolidated Financial Statements included in the 2018 Annual Report for further information on adoption of new accounting pronouncements.
|
(4)
|
See Note 3 of the Notes to the Consolidated Financial Statements included in the 2018 Annual Report.
|
AOCI Components
|
|
Amounts Reclassified from AOCI
|
|
Consolidated Statements of
Operations and
Comprehensive Income (Loss)
Locations
|
||||||
|
|
Three Months
Ended March 31, |
|
|
||||||
|
|
2019
|
|
2018
|
|
|
||||
|
|
(In millions)
|
|
|
||||||
Net unrealized investment gains (losses):
|
|
|
|
|
|
|
||||
Net unrealized investment gains (losses)
|
|
$
|
(24
|
)
|
|
$
|
(101
|
)
|
|
Net investment gains (losses)
|
Net unrealized investment gains (losses)
|
|
4
|
|
|
3
|
|
|
Net investment income
|
||
Net unrealized investment gains (losses)
|
|
22
|
|
|
53
|
|
|
Net derivative gains (losses)
|
||
Net unrealized investment gains (losses), before income tax
|
|
2
|
|
|
(45
|
)
|
|
|
||
Income tax (expense) benefit
|
|
—
|
|
|
10
|
|
|
|
||
Net unrealized investment gains (losses), net of income tax
|
|
2
|
|
|
(35
|
)
|
|
|
||
Unrealized gains (losses) on derivatives - cash flow hedges:
|
|
|
|
|
|
|
||||
Interest rate derivatives
|
|
5
|
|
|
4
|
|
|
Net investment income
|
||
Interest rate derivatives
|
|
(6
|
)
|
|
—
|
|
|
Net investment gains (losses)
|
||
Interest rate derivatives
|
|
—
|
|
|
21
|
|
|
Net derivative gains (losses)
|
||
Interest rate derivatives
|
|
1
|
|
|
—
|
|
|
Other expenses
|
||
Foreign currency exchange rate derivatives
|
|
(2
|
)
|
|
—
|
|
|
Net investment income
|
||
Foreign currency exchange rate derivatives
|
|
25
|
|
|
—
|
|
|
Net investment gains (losses)
|
||
Foreign currency exchange rate derivatives
|
|
—
|
|
|
139
|
|
|
Net derivative gains (losses)
|
||
Foreign currency exchange rate derivatives
|
|
—
|
|
|
1
|
|
|
Other expenses
|
||
Credit derivatives
|
|
1
|
|
|
—
|
|
|
Net investment gains (losses)
|
||
Gains (losses) on cash flow hedges, before income tax
|
|
24
|
|
|
165
|
|
|
|
||
Income tax (expense) benefit
|
|
(12
|
)
|
|
(27
|
)
|
|
|
||
Gains (losses) on cash flow hedges, net of income tax
|
|
12
|
|
|
138
|
|
|
|
||
Defined benefit plans adjustment: (1)
|
|
|
|
|
|
|
||||
Amortization of net actuarial gains (losses)
|
|
(36
|
)
|
|
(36
|
)
|
|
|
||
Amortization of prior service (costs) credit
|
|
7
|
|
|
5
|
|
|
|
||
Amortization of defined benefit plan items, before income tax
|
|
(29
|
)
|
|
(31
|
)
|
|
|
||
Income tax (expense) benefit
|
|
6
|
|
|
7
|
|
|
|
||
Amortization of defined benefit plan items, net of income tax
|
|
(23
|
)
|
|
(24
|
)
|
|
|
||
Total reclassifications, net of income tax
|
|
$
|
(9
|
)
|
|
$
|
79
|
|
|
|
(1)
|
These AOCI components are included in the computation of net periodic benefit costs. See Note
11
.
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In millions)
|
||||||
Prepaid legal plans
|
|
$
|
86
|
|
|
$
|
73
|
|
Fee-based investment management
|
|
77
|
|
|
71
|
|
||
Recordkeeping and administrative services (1)
|
|
50
|
|
|
58
|
|
||
Administrative services-only contracts
|
|
53
|
|
|
56
|
|
||
Other revenue from service contracts from customers
|
|
71
|
|
|
64
|
|
||
Total revenues from service contracts from customers
|
|
337
|
|
|
322
|
|
||
Other
|
|
157
|
|
|
152
|
|
||
Total other revenues
|
|
$
|
494
|
|
|
$
|
474
|
|
(1)
|
Related to products and businesses no longer actively marketed by the Company.
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In millions)
|
||||||
Employee related costs
|
|
$
|
922
|
|
|
$
|
937
|
|
Third party staffing costs
|
|
369
|
|
|
380
|
|
||
General and administrative expenses
|
|
223
|
|
|
243
|
|
||
Pension, postretirement and postemployment benefit costs
|
|
56
|
|
|
49
|
|
||
Premium taxes, other taxes, and licenses & fees
|
|
170
|
|
|
179
|
|
||
Commissions and other variable expenses
|
|
1,449
|
|
|
1,416
|
|
||
Capitalization of DAC
|
|
(812
|
)
|
|
(796
|
)
|
||
Amortization of DAC and VOBA
|
|
624
|
|
|
693
|
|
||
Amortization of negative VOBA
|
|
(10
|
)
|
|
(22
|
)
|
||
Interest expense on debt
|
|
234
|
|
|
286
|
|
||
Total other expenses
|
|
$
|
3,225
|
|
|
$
|
3,365
|
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
Severance
|
||||||
|
|
(In millions)
|
||||||
Balance, beginning of period
|
|
$
|
23
|
|
|
$
|
22
|
|
Restructuring charges
|
|
7
|
|
|
9
|
|
||
Cash payments
|
|
(13
|
)
|
|
(12
|
)
|
||
Balance, end of period
|
|
$
|
17
|
|
|
$
|
19
|
|
Total restructuring charges incurred since inception of initiative
|
|
$
|
143
|
|
|
$
|
82
|
|
|
|
Three Months
Ended March 31, |
||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
|
Pension
Benefits
|
|
Other
Postretirement
Benefits
|
||||||||
|
|
(In millions)
|
||||||||||||||
Service costs
|
|
$
|
58
|
|
|
$
|
1
|
|
|
$
|
60
|
|
|
$
|
1
|
|
Interest costs
|
|
104
|
|
|
13
|
|
|
96
|
|
|
11
|
|
||||
Expected return on plan assets
|
|
(122
|
)
|
|
(16
|
)
|
|
(133
|
)
|
|
(18
|
)
|
||||
Amortization of net actuarial (gains) losses
|
|
48
|
|
|
(12
|
)
|
|
44
|
|
|
(8
|
)
|
||||
Amortization of prior service costs (credit)
|
|
(4
|
)
|
|
(3
|
)
|
|
—
|
|
|
(5
|
)
|
||||
Net periodic benefit costs (credit)
|
|
$
|
84
|
|
|
$
|
(17
|
)
|
|
$
|
67
|
|
|
$
|
(19
|
)
|
|
|
Three Months
Ended March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
(In millions, except per share data)
|
||||||
Weighted Average Shares:
|
|
|
|
|
||||
Weighted average common stock outstanding - basic
|
|
956.5
|
|
|
1,035.9
|
|
||
Incremental common shares from assumed exercise or issuance of stock-based awards
|
|
6.8
|
|
|
8.5
|
|
||
Weighted average common stock outstanding - diluted
|
|
963.3
|
|
|
1,044.4
|
|
||
Net Income (Loss):
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
1,385
|
|
|
$
|
1,257
|
|
Less: Net income (loss) attributable to noncontrolling interests
|
|
4
|
|
|
4
|
|
||
Less: Preferred stock dividends
|
|
32
|
|
|
6
|
|
||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
|
$
|
1,349
|
|
|
$
|
1,247
|
|
Basic
|
|
$
|
1.41
|
|
|
$
|
1.20
|
|
Diluted
|
|
$
|
1.40
|
|
|
$
|
1.19
|
|
|
Page
|
(1)
|
Excludes Corporate & Other adjusted loss available to common shareholders of
$193 million
.
|
(2)
|
Consistent with GAAP guidance for segment reporting, adjusted earnings is our GAAP measure of segment performance. For additional information, see
Note 2
of the Notes to the Interim Condensed Consolidated Financial Statements.
|
(i)
|
liabilities for future policy benefits and the accounting for reinsurance;
|
(ii)
|
capitalization and amortization of DAC and the establishment and amortization of VOBA;
|
(iii)
|
estimated fair values of investments in the absence of quoted market values;
|
(iv)
|
investment impairments;
|
(v)
|
estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;
|
(vi)
|
measurement of goodwill and related impairment;
|
(vii)
|
measurement of employee benefit plan liabilities;
|
(viii)
|
measurement of income taxes and the valuation of deferred tax assets; and
|
(ix)
|
liabilities for litigation and regulatory matters.
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Revenues
|
|
|
|
||||
Premiums
|
$
|
9,405
|
|
|
$
|
9,178
|
|
Universal life and investment-type product policy fees
|
1,365
|
|
|
1,392
|
|
||
Net investment income
|
4,908
|
|
|
3,745
|
|
||
Other revenues
|
494
|
|
|
474
|
|
||
Net investment gains (losses)
|
15
|
|
|
(333
|
)
|
||
Net derivative gains (losses)
|
115
|
|
|
349
|
|
||
Total revenues
|
16,302
|
|
|
14,805
|
|
||
Expenses
|
|
|
|
||||
Policyholder benefits and claims and policyholder dividends
|
9,372
|
|
|
9,015
|
|
||
Interest credited to policyholder account balances
|
1,961
|
|
|
769
|
|
||
Capitalization of DAC
|
(812
|
)
|
|
(796
|
)
|
||
Amortization of DAC and VOBA
|
624
|
|
|
693
|
|
||
Amortization of negative VOBA
|
(10
|
)
|
|
(22
|
)
|
||
Interest expense on debt
|
234
|
|
|
286
|
|
||
Other expenses
|
3,189
|
|
|
3,204
|
|
||
Total expenses
|
14,558
|
|
|
13,149
|
|
||
Income (loss) before provision for income tax
|
1,744
|
|
|
1,656
|
|
||
Provision for income tax expense (benefit)
|
359
|
|
|
399
|
|
||
Net income (loss)
|
1,385
|
|
|
1,257
|
|
||
Less: Net income (loss) attributable to noncontrolling interests
|
4
|
|
|
4
|
|
||
Net income (loss) attributable to MetLife, Inc.
|
1,381
|
|
|
1,253
|
|
||
Less: Preferred stock dividends
|
32
|
|
|
6
|
|
||
Net income (loss) available to MetLife, Inc.’s common shareholders
|
$
|
1,349
|
|
|
$
|
1,247
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Non-VA program derivatives
|
|
|
|
||||
Interest rate
|
$
|
427
|
|
|
$
|
(97
|
)
|
Foreign currency exchange rate
|
(2
|
)
|
|
287
|
|
||
Credit
|
137
|
|
|
(29
|
)
|
||
Equity
|
(226
|
)
|
|
17
|
|
||
Non-VA embedded derivatives
|
(83
|
)
|
|
26
|
|
||
Total non-VA program derivatives
|
253
|
|
|
204
|
|
||
VA program derivatives
|
|
|
|
||||
Market risks in embedded derivatives
|
385
|
|
|
(4
|
)
|
||
Nonperformance risk adjustment on embedded derivatives
|
(62
|
)
|
|
20
|
|
||
Other risks in embedded derivatives
|
(47
|
)
|
|
(5
|
)
|
||
Total embedded derivatives
|
276
|
|
|
11
|
|
||
Freestanding derivatives hedging embedded derivatives
|
(414
|
)
|
|
134
|
|
||
Total VA program derivatives
|
(138
|
)
|
|
145
|
|
||
Net derivative gains (losses)
|
$
|
115
|
|
|
$
|
349
|
|
•
|
Key equity index levels increased in the current period and decreased in the prior period, contributing to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives. For example, the S&P 500 Index increased 13% in the current period and decreased 1% in the prior period.
|
•
|
Changes in foreign currency exchange rates contributed to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives related to the assumed variable annuity guarantees from our former operating joint venture in Japan. For example, the Japanese yen weakened against the U.S. dollar by 1% in the current period and strengthened by 6% in the prior period.
|
•
|
Long-term U.S. interest rates decreased in the current period and increased in the prior period, contributing to a favorable change in our freestanding derivatives and an unfavorable change in our embedded derivatives. For example, the 30-year U.S. swap rate decreased 26 basis points in the current period and increased 28 basis points in the prior period.
|
|
|
U.S.
|
|
Asia
|
|
Latin America
|
|
EMEA
|
|
MetLife Holdings
|
|
Corporate& Other
|
|
Total
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Net income (loss)
|
$
|
756
|
|
|
$
|
455
|
|
|
$
|
162
|
|
|
$
|
79
|
|
|
$
|
120
|
|
|
$
|
(187
|
)
|
|
$
|
1,385
|
|
|
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Revenues:
|
||||||||||||||||||||||||||||
|
Net investment gains (losses)
|
(37
|
)
|
|
7
|
|
|
31
|
|
|
(11
|
)
|
|
24
|
|
|
1
|
|
|
15
|
|
|||||||
|
Net derivative gains (losses)
|
137
|
|
|
165
|
|
|
75
|
|
|
(11
|
)
|
|
(220
|
)
|
|
(31
|
)
|
|
115
|
|
|||||||
|
Premiums
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Universal life and investment-type product policy fees
|
—
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
22
|
|
|
—
|
|
|
27
|
|
|||||||
|
Net investment income
|
(56
|
)
|
|
113
|
|
|
9
|
|
|
590
|
|
|
(32
|
)
|
|
3
|
|
|
627
|
|
|||||||
|
Other revenues
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|
70
|
|
|||||||
Expenses:
|
||||||||||||||||||||||||||||
|
Policyholder benefits and claims and policyholder dividends
|
(6
|
)
|
|
—
|
|
|
(69
|
)
|
|
21
|
|
|
(77
|
)
|
|
—
|
|
|
(131
|
)
|
|||||||
|
Interest credited to policyholder account balances
|
3
|
|
|
(133
|
)
|
|
(19
|
)
|
|
(564
|
)
|
|
—
|
|
|
—
|
|
|
(713
|
)
|
|||||||
|
Capitalization of DAC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Amortization of DAC and VOBA
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
1
|
|
|
34
|
|
|
—
|
|
|
31
|
|
|||||||
|
Amortization of negative VOBA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Interest expense on debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Other expenses
|
—
|
|
|
(1
|
)
|
|
3
|
|
|
(21
|
)
|
|
—
|
|
|
(69
|
)
|
|
(88
|
)
|
|||||||
|
Goodwill impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Provision for income tax (expense) benefit
|
(9
|
)
|
|
(51
|
)
|
|
(2
|
)
|
|
(16
|
)
|
|
52
|
|
|
2
|
|
|
(24
|
)
|
||||||||
Adjusted earnings
|
$
|
724
|
|
|
$
|
356
|
|
|
$
|
134
|
|
|
$
|
86
|
|
|
$
|
317
|
|
|
(161
|
)
|
|
1,456
|
|
|||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
32
|
|
|||||||||||||
Adjusted earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
(193
|
)
|
|
$
|
1,424
|
|
|
|
U.S.
|
|
Asia
|
|
Latin America
|
|
EMEA
|
|
MetLife Holdings
|
|
Corporate& Other
|
|
Total
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
Net income (loss)
|
$
|
489
|
|
|
$
|
564
|
|
|
$
|
186
|
|
|
$
|
87
|
|
|
$
|
344
|
|
|
$
|
(413
|
)
|
|
$
|
1,257
|
|
|
Less: adjustments from net income (loss) to adjusted earnings available to common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Revenues:
|
||||||||||||||||||||||||||||
|
Net investment gains (losses)
|
(110
|
)
|
|
78
|
|
|
3
|
|
|
(6
|
)
|
|
(106
|
)
|
|
(192
|
)
|
|
(333
|
)
|
|||||||
|
Net derivative gains (losses)
|
(54
|
)
|
|
259
|
|
|
149
|
|
|
1
|
|
|
34
|
|
|
(40
|
)
|
|
349
|
|
|||||||
|
Premiums
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Universal life and investment-type product policy fees
|
—
|
|
|
(4
|
)
|
|
7
|
|
|
6
|
|
|
23
|
|
|
—
|
|
|
32
|
|
|||||||
|
Net investment income
|
(54
|
)
|
|
(86
|
)
|
|
(7
|
)
|
|
(293
|
)
|
|
(39
|
)
|
|
5
|
|
|
(474
|
)
|
|||||||
|
Other revenues
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
83
|
|
|||||||
Expenses:
|
||||||||||||||||||||||||||||
|
Policyholder benefits and claims and policyholder dividends
|
8
|
|
|
—
|
|
|
(49
|
)
|
|
5
|
|
|
(11
|
)
|
|
—
|
|
|
(47
|
)
|
|||||||
|
Interest credited to policyholder account balances
|
1
|
|
|
74
|
|
|
(16
|
)
|
|
289
|
|
|
—
|
|
|
—
|
|
|
348
|
|
|||||||
|
Capitalization of DAC
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
|
Amortization of DAC and VOBA
|
—
|
|
|
7
|
|
|
—
|
|
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
4
|
|
|||||||
|
Amortization of negative VOBA
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
|
Interest expense on debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
Other expenses
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(86
|
)
|
|
(94
|
)
|
|||||||
|
Goodwill impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Provision for income tax (expense) benefit
|
45
|
|
|
(92
|
)
|
|
(42
|
)
|
|
7
|
|
|
22
|
|
|
18
|
|
|
(42
|
)
|
||||||||
Adjusted earnings
|
$
|
653
|
|
|
$
|
327
|
|
|
$
|
140
|
|
|
$
|
81
|
|
|
$
|
425
|
|
|
(197
|
)
|
|
1,429
|
|
|||
Less: Preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
6
|
|
|||||||||||||
Adjusted earnings available to common shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
(203
|
)
|
|
$
|
1,423
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Adjusted earnings available to common shareholders on a constant currency basis
|
$
|
653
|
|
|
$
|
316
|
|
|
$
|
135
|
|
|
$
|
70
|
|
|
$
|
425
|
|
|
$
|
(203
|
)
|
|
$
|
1,396
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Adjusted revenues
|
|
|
|
||||
Premiums
|
$
|
5,567
|
|
|
$
|
5,217
|
|
Universal life and investment-type product policy fees
|
270
|
|
|
258
|
|
||
Net investment income
|
1,719
|
|
|
1,662
|
|
||
Other revenues
|
221
|
|
|
204
|
|
||
Total adjusted revenues
|
7,777
|
|
|
7,341
|
|
||
Adjusted expenses
|
|
|
|
||||
Policyholder benefits and claims and policyholder dividends
|
5,373
|
|
|
5,138
|
|
||
Interest credited to policyholder account balances
|
501
|
|
|
407
|
|
||
Capitalization of DAC
|
(114
|
)
|
|
(106
|
)
|
||
Amortization of DAC and VOBA
|
114
|
|
|
115
|
|
||
Interest expense on debt
|
2
|
|
|
2
|
|
||
Other expenses
|
993
|
|
|
961
|
|
||
Total adjusted expenses
|
6,869
|
|
|
6,517
|
|
||
Provision for income tax expense (benefit)
|
184
|
|
|
171
|
|
||
Adjusted earnings
|
$
|
724
|
|
|
$
|
653
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Adjusted revenues
|
|
|
|
||||
Premiums
|
$
|
1,699
|
|
|
$
|
1,748
|
|
Universal life and investment-type product policy fees
|
406
|
|
|
394
|
|
||
Net investment income
|
880
|
|
|
795
|
|
||
Other revenues
|
16
|
|
|
15
|
|
||
Total adjusted revenues
|
3,001
|
|
|
2,952
|
|
||
Adjusted expenses
|
|
|
|
||||
Policyholder benefits and claims and policyholder dividends
|
1,319
|
|
|
1,343
|
|
||
Interest credited to policyholder account balances
|
403
|
|
|
351
|
|
||
Capitalization of DAC
|
(479
|
)
|
|
(465
|
)
|
||
Amortization of DAC and VOBA
|
307
|
|
|
314
|
|
||
Amortization of negative VOBA
|
(9
|
)
|
|
(15
|
)
|
||
Other expenses
|
955
|
|
|
952
|
|
||
Total adjusted expenses
|
2,496
|
|
|
2,480
|
|
||
Provision for income tax expense (benefit)
|
149
|
|
|
145
|
|
||
Adjusted earnings
|
$
|
356
|
|
|
$
|
327
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Adjusted revenues
|
|
|
|
||||
Premiums
|
$
|
646
|
|
|
$
|
699
|
|
Universal life and investment-type product policy fees
|
284
|
|
|
282
|
|
||
Net investment income
|
296
|
|
|
276
|
|
||
Other revenues
|
12
|
|
|
8
|
|
||
Total adjusted revenues
|
1,238
|
|
|
1,265
|
|
||
Adjusted expenses
|
|
|
|
||||
Policyholder benefits and claims and policyholder dividends
|
597
|
|
|
646
|
|
||
Interest credited to policyholder account balances
|
94
|
|
|
98
|
|
||
Capitalization of DAC
|
(94
|
)
|
|
(94
|
)
|
||
Amortization of DAC and VOBA
|
78
|
|
|
60
|
|
||
Interest expense on debt
|
1
|
|
|
2
|
|
||
Other expenses
|
366
|
|
|
338
|
|
||
Total adjusted expenses
|
1,042
|
|
|
1,050
|
|
||
Provision for income tax expense (benefit)
|
62
|
|
|
75
|
|
||
Adjusted earnings
|
$
|
134
|
|
|
$
|
140
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Adjusted revenues
|
|
|
|
||||
Premiums
|
$
|
542
|
|
|
$
|
551
|
|
Universal life and investment-type product policy fees
|
103
|
|
|
112
|
|
||
Net investment income
|
74
|
|
|
75
|
|
||
Other revenues
|
14
|
|
|
16
|
|
||
Total adjusted revenues
|
733
|
|
|
754
|
|
||
Adjusted expenses
|
|
|
|
||||
Policyholder benefits and claims and policyholder dividends
|
284
|
|
|
294
|
|
||
Interest credited to policyholder account balances
|
24
|
|
|
25
|
|
||
Capitalization of DAC
|
(117
|
)
|
|
(118
|
)
|
||
Amortization of DAC and VOBA
|
92
|
|
|
106
|
|
||
Amortization of negative VOBA
|
(1
|
)
|
|
(6
|
)
|
||
Other expenses
|
338
|
|
|
351
|
|
||
Total adjusted expenses
|
620
|
|
|
652
|
|
||
Provision for income tax expense (benefit)
|
27
|
|
|
21
|
|
||
Adjusted earnings
|
$
|
86
|
|
|
$
|
81
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Adjusted revenues
|
|
|
|
||||
Premiums
|
$
|
927
|
|
|
$
|
950
|
|
Universal life and investment-type product policy fees
|
274
|
|
|
314
|
|
||
Net investment income
|
1,287
|
|
|
1,352
|
|
||
Other revenues
|
67
|
|
|
67
|
|
||
Total adjusted revenues
|
2,555
|
|
|
2,683
|
|
||
Adjusted expenses
|
|
|
|
||||
Policyholder benefits and claims and policyholder dividends
|
1,648
|
|
|
1,550
|
|
||
Interest credited to policyholder account balances
|
226
|
|
|
236
|
|
||
Capitalization of DAC
|
(6
|
)
|
|
(10
|
)
|
||
Amortization of DAC and VOBA
|
63
|
|
|
100
|
|
||
Interest expense on debt
|
2
|
|
|
2
|
|
||
Other expenses
|
227
|
|
|
276
|
|
||
Total adjusted expenses
|
2,160
|
|
|
2,154
|
|
||
Provision for income tax expense (benefit)
|
78
|
|
|
104
|
|
||
Adjusted earnings
|
$
|
317
|
|
|
$
|
425
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Adjusted revenues
|
|
|
|
||||
Premiums
|
$
|
24
|
|
|
$
|
13
|
|
Universal life and investment-type product policy fees
|
1
|
|
|
—
|
|
||
Net investment income
|
25
|
|
|
59
|
|
||
Other revenues
|
94
|
|
|
81
|
|
||
Total adjusted revenues
|
144
|
|
|
153
|
|
||
Adjusted expenses
|
|
|
|
||||
Policyholder benefits and claims and policyholder dividends
|
20
|
|
|
(3
|
)
|
||
Capitalization of DAC
|
(2
|
)
|
|
(2
|
)
|
||
Amortization of DAC and VOBA
|
1
|
|
|
2
|
|
||
Interest expense on debt
|
229
|
|
|
280
|
|
||
Other expenses
|
222
|
|
|
232
|
|
||
Total adjusted expenses
|
470
|
|
|
509
|
|
||
Provision for income tax expense (benefit)
|
(165
|
)
|
|
(159
|
)
|
||
Adjusted earnings
|
(161
|
)
|
|
(197
|
)
|
||
Less: Preferred stock dividends
|
32
|
|
|
6
|
|
||
Adjusted earnings available to common shareholders
|
$
|
(193
|
)
|
|
$
|
(203
|
)
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Business activities
|
$
|
13
|
|
|
$
|
6
|
|
Net investment income
|
29
|
|
|
57
|
|
||
Interest expense on debt
|
(239
|
)
|
|
(293
|
)
|
||
Corporate initiatives and projects
|
(100
|
)
|
|
(39
|
)
|
||
Other
|
(29
|
)
|
|
(87
|
)
|
||
Provision for income tax (expense) benefit and other tax-related items
|
165
|
|
|
159
|
|
||
Preferred stock dividends
|
(32
|
)
|
|
(6
|
)
|
||
Adjusted earnings available to common shareholders
|
$
|
(193
|
)
|
|
$
|
(203
|
)
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Net investment income — GAAP basis
|
$
|
4,908
|
|
|
$
|
3,745
|
|
Investment hedge adjustments
|
105
|
|
|
110
|
|
||
Unit-linked contract income
|
(736
|
)
|
|
353
|
|
||
Other
|
4
|
|
|
11
|
|
||
Net investment income, as reported on an adjusted basis (1)
|
$
|
4,281
|
|
|
$
|
4,219
|
|
(1)
|
See “— Non-GAAP and Other Financial Disclosures — Adjusted earnings and related measures — Adjusted revenues and adjusted expenses — Net investment income” for a discussion of the adjustments made to net investment income under GAAP in calculating net investment income, as reported on an adjusted basis.
|
|
For the Three Months Ended March 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
Yield % (1)
|
|
Amount
|
|
Yield % (1)
|
|
Amount
|
||||||
|
(Dollars in millions)
|
||||||||||||
Fixed maturity securities AFS (2), (3)
|
4.23
|
|
%
|
$
|
2,902
|
|
|
4.19
|
|
%
|
$
|
2,839
|
|
Mortgage loans (3)
|
4.73
|
|
%
|
912
|
|
|
4.53
|
|
%
|
792
|
|
||
Real estate and real estate joint ventures
|
2.04
|
|
%
|
50
|
|
|
3.39
|
|
%
|
83
|
|
||
Policy loans
|
5.28
|
|
%
|
128
|
|
|
5.12
|
|
%
|
124
|
|
||
Equity securities
|
5.43
|
|
%
|
16
|
|
|
3.79
|
|
%
|
16
|
|
||
Other limited partnership interests
|
7.59
|
|
%
|
127
|
|
|
15.10
|
|
%
|
219
|
|
||
Cash and short-term investments
|
3.08
|
|
%
|
79
|
|
|
1.87
|
|
%
|
46
|
|
||
Other invested assets
|
|
|
203
|
|
|
|
|
228
|
|
||||
Investment income
|
4.44
|
|
%
|
4,417
|
|
|
4.50
|
|
%
|
4,347
|
|
||
Investment fees and expenses
|
(0.14
|
)
|
%
|
(136
|
)
|
|
(0.13
|
)
|
%
|
(128
|
)
|
||
Net investment income, as reported on an adjusted basis
|
4.30
|
|
%
|
$
|
4,281
|
|
|
4.37
|
|
%
|
$
|
4,219
|
|
(1)
|
Yields are calculated as investment income as a percent of average quarterly asset carrying values. Investment income excludes recognized gains and losses. Asset carrying values exclude unrealized gains (losses), collateral received in connection with our securities lending program, annuities funding structured settlement claims, freestanding derivative assets, collateral received from derivative counterparties, the effects of consolidating certain variable interest entities (“VIEs”) under GAAP that are treated as consolidated securitization entities (“CSEs”), Unit-linked investments and FVO Securities. A yield is not presented for other invested assets, as it is not considered a meaningful measure of performance for this asset class.
|
(2)
|
Investment income from fixed maturity securities AFS includes amounts from FVO Securities of $
55 million
and
$6 million
for the
three months ended
March 31, 2019
and
2018
, respectively.
|
(3)
|
Investment income from fixed maturity securities AFS and mortgage loans includes prepayment fees.
|
|
March 31, 2019
|
|
December 31, 2018
|
|
||||||||
|
Estimated Fair Value
|
|
% of Total
|
|
Estimated Fair Value
|
|
% of Total
|
|
||||
|
(Dollars in millions)
|
|
||||||||||
Fixed maturity securities AFS
|
|
|
|
|
|
|
|
|
||||
Publicly-traded
|
$
|
256,903
|
|
|
83.3
|
%
|
$
|
249,595
|
|
|
83.7
|
%
|
Privately-placed
|
51,507
|
|
|
16.7
|
|
48,670
|
|
|
16.3
|
|
||
Total fixed maturity securities AFS
|
$
|
308,410
|
|
|
100.0
|
%
|
$
|
298,265
|
|
|
100.0
|
%
|
Percentage of cash and invested assets
|
66.3
|
%
|
|
|
|
66.0
|
%
|
|
|
|
||
Equity securities
|
|
|
|
|
|
|
|
|
||||
Publicly-traded
|
$
|
1,277
|
|
|
89.2
|
%
|
$
|
1,282
|
|
|
89
|
%
|
Privately-held
|
155
|
|
|
10.8
|
|
158
|
|
|
11
|
|
||
Total equity securities
|
$
|
1,432
|
|
|
100.0
|
%
|
$
|
1,440
|
|
|
100.0
|
%
|
Percentage of cash and invested assets
|
0.3
|
%
|
|
|
|
0.3
|
%
|
|
|
|
||
Perpetual and redeemable securities
|
|
|
|
|
|
|
|
|
||||
Perpetual securities included within fixed maturity securities AFS and equity securities
|
$
|
351
|
|
|
|
|
$
|
367
|
|
|
|
|
Redeemable preferred stock with a stated maturity included within fixed maturity securities AFS
|
$
|
491
|
|
|
|
|
$
|
911
|
|
|
|
|
|
March 31, 2019
|
||||||||||||
|
Fixed Maturity
Securities AFS |
|
|
Equity
Securities
|
|||||||||
|
(Dollars in millions)
|
|
|||||||||||
Level 1
|
|
|
|
|
|
|
|
|
|
||||
Quoted prices in active markets for identical assets
|
$
|
21,042
|
|
|
6.8
|
%
|
|
$
|
901
|
|
|
62.9
|
%
|
Level 2
|
|
|
|
|
|
|
|
|
|
||||
Independent pricing sources
|
270,361
|
|
|
87.7
|
|
|
62
|
|
|
4.3
|
|
||
Internal matrix pricing or discounted cash flow techniques
|
1,819
|
|
|
0.6
|
|
|
35
|
|
|
2.4
|
|
||
Significant other observable inputs
|
272,180
|
|
|
88.3
|
|
|
97
|
|
|
6.7
|
|
||
Level 3
|
|
|
|
|
|
|
|
|
|
||||
Independent pricing sources
|
11,206
|
|
|
3.6
|
|
|
329
|
|
|
23.0
|
|
||
Internal matrix pricing or discounted cash flow techniques
|
3,640
|
|
|
1.2
|
|
|
97
|
|
|
6.8
|
|
||
Independent broker quotations
|
342
|
|
|
0.1
|
|
|
8
|
|
|
0.6
|
|
||
Significant unobservable inputs
|
15,188
|
|
|
4.9
|
|
|
434
|
|
|
30.4
|
|
||
Total estimated fair value
|
$
|
308,410
|
|
|
100.0
|
%
|
|
$
|
1,432
|
|
|
100.0
|
%
|
|
Fixed Maturity Securities AFS — by Sector & Credit Quality Rating
|
||||||||||||||||||||||||||
NAIC Designation:
|
1
|
|
2
|
|
3
|
|
4
|
|
5
|
|
6
|
|
Total
Estimated
Fair Value
|
||||||||||||||
NRSRO Rating:
|
Aaa/Aa/A
|
|
Baa
|
|
Ba
|
|
B
|
|
Caa and Lower
|
|
In or Near
Default
|
|
|||||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. corporate
|
$
|
35,549
|
|
|
$
|
35,697
|
|
|
$
|
5,543
|
|
|
$
|
2,807
|
|
|
$
|
550
|
|
|
$
|
—
|
|
|
$
|
80,146
|
|
Foreign government
|
56,604
|
|
|
5,283
|
|
|
2,412
|
|
|
650
|
|
|
5
|
|
|
1
|
|
|
64,955
|
|
|||||||
Foreign corporate
|
23,761
|
|
|
32,517
|
|
|
2,890
|
|
|
746
|
|
|
31
|
|
|
—
|
|
|
59,945
|
|
|||||||
U.S. government and agency
|
40,593
|
|
|
415
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,008
|
|
|||||||
RMBS
|
27,672
|
|
|
405
|
|
|
154
|
|
|
95
|
|
|
2
|
|
|
32
|
|
|
28,360
|
|
|||||||
ABS
|
11,406
|
|
|
930
|
|
|
266
|
|
|
26
|
|
|
3
|
|
|
—
|
|
|
12,631
|
|
|||||||
Municipals
|
11,426
|
|
|
440
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,898
|
|
|||||||
CMBS
|
9,332
|
|
|
82
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,467
|
|
|||||||
Total fixed maturity securities AFS
|
$
|
216,343
|
|
|
$
|
75,769
|
|
|
$
|
11,350
|
|
|
$
|
4,324
|
|
|
$
|
591
|
|
|
$
|
33
|
|
|
$
|
308,410
|
|
Percentage of total
|
70.1
|
%
|
|
24.6
|
%
|
|
3.7
|
%
|
|
1.4
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
U.S. corporate
|
$
|
34,363
|
|
|
$
|
35,081
|
|
|
$
|
5,850
|
|
|
$
|
3,102
|
|
|
$
|
544
|
|
|
$
|
8
|
|
|
$
|
78,948
|
|
Foreign government
|
54,149
|
|
|
5,140
|
|
|
2,389
|
|
|
604
|
|
|
5
|
|
|
1
|
|
|
62,288
|
|
|||||||
Foreign corporate
|
22,602
|
|
|
30,849
|
|
|
2,534
|
|
|
669
|
|
|
49
|
|
|
—
|
|
|
56,703
|
|
|||||||
U.S. government and agency
|
38,915
|
|
|
407
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,322
|
|
|||||||
RMBS
|
27,370
|
|
|
350
|
|
|
138
|
|
|
94
|
|
|
3
|
|
|
6
|
|
|
27,961
|
|
|||||||
ABS
|
11,467
|
|
|
772
|
|
|
204
|
|
|
26
|
|
|
3
|
|
|
—
|
|
|
12,472
|
|
|||||||
Municipals
|
11,056
|
|
|
439
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,533
|
|
|||||||
CMBS
|
8,884
|
|
|
103
|
|
|
5
|
|
|
3
|
|
|
43
|
|
|
—
|
|
|
9,038
|
|
|||||||
Total fixed maturity securities AFS
|
$
|
208,806
|
|
|
$
|
73,141
|
|
|
$
|
11,158
|
|
|
$
|
4,498
|
|
|
$
|
647
|
|
|
$
|
15
|
|
|
$
|
298,265
|
|
Percentage of total
|
70.0
|
%
|
|
24.5
|
%
|
|
3.7
|
%
|
|
1.6
|
%
|
|
0.2
|
%
|
|
—
|
%
|
|
100.0
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Estimated
Fair
Value
|
|
% of
Total
|
||||||
|
(Dollars in millions)
|
||||||||||||
Industrial
|
$
|
42,377
|
|
|
30.2
|
%
|
|
$
|
40,556
|
|
|
29.9
|
%
|
Finance
|
31,488
|
|
|
22.5
|
|
|
30,546
|
|
|
22.5
|
|
||
Consumer
|
30,518
|
|
|
21.8
|
|
|
30,140
|
|
|
22.2
|
|
||
Utility
|
23,240
|
|
|
16.6
|
|
|
22,206
|
|
|
16.4
|
|
||
Communications
|
10,628
|
|
|
7.6
|
|
|
10,406
|
|
|
7.7
|
|
||
Other
|
1,840
|
|
|
1.3
|
|
|
1,797
|
|
|
1.3
|
|
||
Total
|
$
|
140,091
|
|
|
100.0
|
%
|
|
$
|
135,651
|
|
|
100.0
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
By security type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized mortgage obligations
|
$
|
15,640
|
|
|
55.1
|
%
|
|
$
|
896
|
|
|
$
|
15,302
|
|
|
54.7
|
%
|
|
$
|
726
|
|
Pass-through mortgage-backed securities
|
12,720
|
|
|
44.9
|
|
|
25
|
|
|
12,659
|
|
|
45.3
|
|
|
(174
|
)
|
||||
Total RMBS
|
$
|
28,360
|
|
|
100.0
|
%
|
|
$
|
921
|
|
|
$
|
27,961
|
|
|
100.0
|
%
|
|
$
|
552
|
|
By risk profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
$
|
19,973
|
|
|
70.4
|
%
|
|
$
|
316
|
|
|
$
|
19,834
|
|
|
70.9
|
%
|
|
$
|
5
|
|
Prime
|
1,146
|
|
|
4.0
|
|
|
54
|
|
|
1,123
|
|
|
4.0
|
|
|
47
|
|
||||
Alt-A
|
3,294
|
|
|
11.6
|
|
|
302
|
|
|
3,361
|
|
|
12.0
|
|
|
277
|
|
||||
Sub-prime
|
3,947
|
|
|
14.0
|
|
|
249
|
|
|
3,643
|
|
|
13.1
|
|
|
223
|
|
||||
Total RMBS
|
$
|
28,360
|
|
|
100.0
|
%
|
|
$
|
921
|
|
|
$
|
27,961
|
|
|
100.0
|
%
|
|
$
|
552
|
|
Ratings profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rated Aaa/AAA
|
$
|
20,993
|
|
|
74.0
|
%
|
|
|
|
$
|
20,666
|
|
|
73.9
|
%
|
|
|
||||
Designated NAIC 1
|
$
|
27,672
|
|
|
97.6
|
%
|
|
|
|
$
|
27,370
|
|
|
97.9
|
%
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
|
Estimated
Fair
Value
|
|
% of
Total
|
|
Net
Unrealized
Gains (Losses)
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
By collateral type:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized obligations (1)
|
$
|
6,887
|
|
|
54.5
|
%
|
|
$
|
(56
|
)
|
|
$
|
6,724
|
|
|
53.9
|
%
|
|
$
|
(112
|
)
|
Student loans
|
1,384
|
|
|
11.0
|
|
|
13
|
|
|
1,256
|
|
|
10.1
|
|
|
13
|
|
||||
Foreign residential loans
|
1,066
|
|
|
8.4
|
|
|
17
|
|
|
1,066
|
|
|
8.5
|
|
|
11
|
|
||||
Automobile loans
|
852
|
|
|
6.7
|
|
|
3
|
|
|
895
|
|
|
7.2
|
|
|
1
|
|
||||
Credit card loans
|
519
|
|
|
4.1
|
|
|
2
|
|
|
668
|
|
|
5.3
|
|
|
—
|
|
||||
Consumer loans
|
625
|
|
|
5.0
|
|
|
8
|
|
|
580
|
|
|
4.7
|
|
|
4
|
|
||||
Other loans
|
1,298
|
|
|
10.3
|
|
|
9
|
|
|
1,283
|
|
|
10.3
|
|
|
3
|
|
||||
Total
|
$
|
12,631
|
|
|
100.0
|
%
|
|
$
|
(4
|
)
|
|
$
|
12,472
|
|
|
100.0
|
%
|
|
$
|
(80
|
)
|
Ratings profile:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Rated Aaa/AAA
|
$
|
7,109
|
|
|
56.3
|
%
|
|
|
|
$
|
7,142
|
|
|
57.3
|
%
|
|
|
||||
Designated NAIC 1
|
$
|
11,406
|
|
|
90.3
|
%
|
|
|
|
$
|
11,467
|
|
|
91.9
|
%
|
|
|
|
March 31, 2019
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Aaa
|
|
Aa
|
|
A
|
|
Baa
|
|
Below
Investment
Grade
|
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
|
Amortized
Cost
|
|
Estimated
Fair
Value
|
||||||||||||||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
2003-2012
|
$
|
468
|
|
|
$
|
491
|
|
|
$
|
343
|
|
|
$
|
345
|
|
|
$
|
139
|
|
|
$
|
140
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
957
|
|
|
$
|
983
|
|
2013
|
719
|
|
|
753
|
|
|
641
|
|
|
665
|
|
|
278
|
|
|
281
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
44
|
|
|
1,696
|
|
|
1,743
|
|
||||||||||||
2014
|
381
|
|
|
389
|
|
|
486
|
|
|
493
|
|
|
128
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
995
|
|
|
1,012
|
|
||||||||||||
2015
|
485
|
|
|
488
|
|
|
90
|
|
|
92
|
|
|
34
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
609
|
|
|
615
|
|
||||||||||||
2016
|
337
|
|
|
340
|
|
|
73
|
|
|
72
|
|
|
53
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
463
|
|
|
465
|
|
||||||||||||
2017
|
868
|
|
|
873
|
|
|
680
|
|
|
683
|
|
|
213
|
|
|
213
|
|
|
39
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
1,800
|
|
|
1,808
|
|
||||||||||||
2018
|
1,451
|
|
|
1,503
|
|
|
691
|
|
|
709
|
|
|
286
|
|
|
294
|
|
|
22
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
2,450
|
|
|
2,529
|
|
||||||||||||
2019
|
$
|
174
|
|
|
$
|
176
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
$
|
95
|
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
309
|
|
|
$
|
312
|
|
Total
|
4,883
|
|
|
5,013
|
|
|
3,044
|
|
|
3,099
|
|
|
1,226
|
|
|
1,242
|
|
|
68
|
|
|
69
|
|
|
58
|
|
|
44
|
|
|
9,279
|
|
|
9,467
|
|
||||||||||||
Ratings Distribution
|
|
|
53.0
|
%
|
|
|
|
32.7
|
%
|
|
|
|
13.1
|
%
|
|
|
|
0.7
|
%
|
|
|
|
0.5
|
%
|
|
|
|
100.0
|
%
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Aaa
|
|
Aa
|
|
A
|
|
Baa
|
|
Below
Investment
Grade
|
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
|
Amortized
Cost |
|
Estimated
Fair Value |
||||||||||||||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||||||||
2003 - 2012
|
$
|
488
|
|
|
$
|
508
|
|
|
$
|
266
|
|
|
$
|
264
|
|
|
$
|
229
|
|
|
$
|
227
|
|
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
990
|
|
|
$
|
1,005
|
|
2013
|
723
|
|
|
746
|
|
|
644
|
|
|
655
|
|
|
279
|
|
|
277
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
43
|
|
|
1,705
|
|
|
1,721
|
|
||||||||||||
2014
|
381
|
|
|
379
|
|
|
488
|
|
|
485
|
|
|
128
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
997
|
|
|
991
|
|
||||||||||||
2015
|
523
|
|
|
514
|
|
|
81
|
|
|
80
|
|
|
34
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
638
|
|
|
628
|
|
||||||||||||
2016
|
345
|
|
|
339
|
|
|
84
|
|
|
80
|
|
|
46
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475
|
|
|
465
|
|
||||||||||||
2017
|
862
|
|
|
851
|
|
|
666
|
|
|
654
|
|
|
234
|
|
|
228
|
|
|
39
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
1,801
|
|
|
1,772
|
|
||||||||||||
2018
|
1,434
|
|
|
1,445
|
|
|
690
|
|
|
695
|
|
|
292
|
|
|
293
|
|
|
23
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
2,439
|
|
|
2,456
|
|
||||||||||||
Total
|
$
|
4,756
|
|
|
$
|
4,782
|
|
|
$
|
2,919
|
|
|
$
|
2,913
|
|
|
$
|
1,242
|
|
|
$
|
1,232
|
|
|
$
|
69
|
|
|
$
|
68
|
|
|
$
|
59
|
|
|
$
|
43
|
|
|
$
|
9,045
|
|
|
$
|
9,038
|
|
Ratings Distribution
|
|
|
52.9
|
%
|
|
|
|
32.2
|
%
|
|
|
|
13.6
|
%
|
|
|
|
0.8
|
%
|
|
|
|
0.5
|
%
|
|
|
|
100.0
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
|||||||||||||||||||||||||
|
|
Recorded
Investment
|
|
% of
Total
|
|
Valuation
Allowance
|
|
% of
Recorded Investment
|
|
Recorded
Investment
|
|
% of
Total
|
|
Valuation
Allowance
|
|
% of
Recorded Investment
|
||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||||||
Commercial
|
|
$
|
49,960
|
|
|
63.5
|
%
|
|
$
|
245
|
|
|
0.5
|
%
|
|
$
|
48,463
|
|
|
63.9
|
%
|
|
$
|
238
|
|
|
0.5
|
%
|
Agricultural
|
|
15,130
|
|
|
19.2
|
|
|
47
|
|
|
0.3
|
%
|
|
14,905
|
|
|
19.7
|
|
|
46
|
|
|
0.3
|
%
|
||||
Residential
|
|
13,585
|
|
|
17.3
|
|
|
58
|
|
|
0.4
|
%
|
|
12,427
|
|
|
16.4
|
|
|
58
|
|
|
0.5
|
%
|
||||
Total
|
|
$
|
78,675
|
|
|
100.0
|
%
|
|
$
|
350
|
|
|
0.4
|
%
|
|
$
|
75,795
|
|
|
100.0
|
%
|
|
$
|
342
|
|
|
0.5
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Region
|
|
|
|
|
|
|
|
||||||||
Pacific
|
$
|
10,683
|
|
|
21.4
|
%
|
|
$
|
10,884
|
|
|
22.5
|
%
|
||
International
|
9,727
|
|
|
19.5
|
|
|
9,281
|
|
|
19.1
|
|
||||
Middle Atlantic
|
7,873
|
|
|
15.7
|
|
|
7,911
|
|
|
16.3
|
|
||||
South Atlantic
|
6,427
|
|
|
12.9
|
|
|
6,347
|
|
|
13.1
|
|
||||
West South Central
|
4,299
|
|
|
8.6
|
|
|
3,951
|
|
|
8.1
|
|
||||
East North Central
|
3,269
|
|
|
6.5
|
|
|
2,840
|
|
|
5.9
|
|
||||
New England
|
1,479
|
|
|
3.0
|
|
|
1,481
|
|
|
3.1
|
|
||||
Mountain
|
1,501
|
|
|
3.0
|
|
|
1,387
|
|
|
2.9
|
|
||||
West North Central
|
594
|
|
|
1.2
|
|
|
594
|
|
|
1.2
|
|
||||
East South Central
|
563
|
|
|
1.1
|
|
|
564
|
|
|
1.2
|
|
||||
Multi-Region and Other
|
3,545
|
|
|
7.1
|
|
|
3,223
|
|
|
6.6
|
|
||||
Total recorded investment
|
49,960
|
|
|
100.0
|
%
|
|
48,463
|
|
|
100.0
|
%
|
||||
Less: valuation allowances
|
245
|
|
|
|
|
238
|
|
|
|
||||||
Carrying value, net of valuation allowances
|
$
|
49,715
|
|
|
|
|
$
|
48,225
|
|
|
|
||||
Property Type
|
|
|
|
|
|
|
|
||||||||
Office
|
$
|
24,514
|
|
|
49.1
|
%
|
|
$
|
23,995
|
|
|
49.5
|
%
|
||
Retail
|
9,387
|
|
|
18.8
|
|
|
9,089
|
|
|
18.7
|
|
||||
Apartment
|
6,943
|
|
|
13.9
|
|
|
7,018
|
|
|
14.5
|
|
||||
Industrial
|
3,761
|
|
|
7.5
|
|
|
3,719
|
|
|
7.7
|
|
||||
Hotel
|
3,716
|
|
|
7.4
|
|
|
3,479
|
|
|
7.2
|
|
||||
Other
|
1,639
|
|
|
3.3
|
|
|
1,163
|
|
|
2.4
|
|
||||
Total recorded investment
|
49,960
|
|
|
100.0
|
%
|
|
48,463
|
|
|
100.0
|
%
|
||||
Less: valuation allowances
|
245
|
|
|
|
|
238
|
|
|
|
||||||
Carrying value, net of valuation allowances
|
$
|
49,715
|
|
|
|
|
$
|
48,225
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Carrying
Value
|
|
% of
Total
|
|
Carrying
Value
|
|
% of
Total |
||||||
|
(Dollars in millions)
|
||||||||||||
Freestanding derivatives with positive estimated fair values
|
$
|
8,822
|
|
|
48.5
|
%
|
|
$
|
8,969
|
|
|
49.3
|
%
|
Tax credit and renewable energy partnerships
|
2,348
|
|
|
12.9
|
|
|
2,457
|
|
|
13.5
|
|
||
Annuities funding structured settlement claims
|
1,281
|
|
|
7.1
|
|
|
1,279
|
|
|
7.0
|
|
||
Direct financing leases
|
1,277
|
|
|
7.0
|
|
|
1,192
|
|
|
6.5
|
|
||
Leveraged leases
|
1,115
|
|
|
6.1
|
|
|
1,108
|
|
|
6.1
|
|
||
Operating joint ventures
|
831
|
|
|
4.6
|
|
|
796
|
|
|
4.4
|
|
||
FHLB common stock
|
793
|
|
|
4.4
|
|
|
793
|
|
|
4.4
|
|
||
Funds withheld
|
444
|
|
|
2.4
|
|
|
416
|
|
|
2.3
|
|
||
Other
|
1,264
|
|
|
7.0
|
|
|
1,180
|
|
|
6.5
|
|
||
Total
|
$
|
18,175
|
|
|
100.0
|
%
|
|
$
|
18,190
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
Percentage of cash and invested assets
|
3.9
|
%
|
|
|
|
4.0
|
%
|
|
|
•
|
A comprehensive description of the nature of our derivatives, including the strategies for which derivatives are used in managing various risks.
|
•
|
Information about the primary underlying risk exposure, gross notional amount, and estimated fair value of our derivatives by type of hedge designation, excluding embedded derivatives held at
March 31, 2019
and
December 31, 2018
.
|
•
|
The statement of operations effects of derivatives in net investments in foreign operations, cash flow, fair value, or nonqualifying hedge relationships for the
three months ended
March 31, 2019
and
2018
.
|
|
|
Three Months
Ended March 31, 2019 |
Gain (loss) recognized in net income (loss)
|
|
$70 million
|
Approximate percentage of gain (loss) attributable to observable inputs
|
|
55%
|
Primary drivers of observable gain (loss)
|
|
Decreases in interest rates on interest rate total return swaps and, to a lesser extent, increases in certain equity index levels on equity derivatives.
|
Approximate percentage of gain (loss) attributable to unobservable inputs
|
|
45%
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
Credit Default Swaps
|
|
Gross
Notional
Amount
|
|
Estimated
Fair Value
|
|
Gross
Notional
Amount
|
|
Estimated
Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Purchased
|
|
$
|
2,248
|
|
|
$
|
(46
|
)
|
|
$
|
1,903
|
|
|
$
|
(14
|
)
|
Written
|
|
11,409
|
|
|
195
|
|
|
11,391
|
|
|
82
|
|
||||
Total
|
|
$
|
13,657
|
|
|
$
|
149
|
|
|
$
|
13,294
|
|
|
$
|
68
|
|
|
|
Three Months
Ended March 31, |
||||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||||
Credit Default Swaps
|
|
Gross
Gains
|
|
Gross
Losses
|
|
Net
Gains
(Losses)
|
|
Gross
Gains
|
|
Gross
Losses
|
|
Net
Gains
(Losses)
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Purchased (1)
|
|
$
|
3
|
|
|
$
|
(18
|
)
|
|
$
|
(15
|
)
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
Written (1)
|
|
137
|
|
|
(1
|
)
|
|
136
|
|
|
1
|
|
|
(45
|
)
|
|
(44
|
)
|
||||||
Total
|
|
$
|
140
|
|
|
$
|
(19
|
)
|
|
$
|
121
|
|
|
$
|
2
|
|
|
$
|
(49
|
)
|
|
$
|
(47
|
)
|
(1)
|
Gains (losses) do not include earned income (expense) on credit default swaps.
|
|
March 31, 2019
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value
|
|
Account
Value at
Guarantee
|
||||
|
(In millions)
|
||||||
Greater than 0% but less than 2%
|
$
|
4,765
|
|
|
$
|
4,641
|
|
Equal to or greater than 2% but less than 4%
|
$
|
1,750
|
|
|
$
|
1,713
|
|
Equal to or greater than 4%
|
$
|
745
|
|
|
$
|
715
|
|
|
March 31, 2019
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value
|
|
Account
Value at
Guarantee
|
||||
|
(In millions)
|
||||||
Greater than 0% but less than 2%
|
$
|
144
|
|
|
$
|
—
|
|
Equal to or greater than 2% but less than 4%
|
$
|
1,086
|
|
|
$
|
91
|
|
Equal to or greater than 4%
|
$
|
4,621
|
|
|
$
|
4,618
|
|
|
March 31, 2019
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value
|
|
Account
Value at
Guarantee
|
||||
|
(In millions)
|
||||||
Annuities
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
27,070
|
|
|
$
|
1,822
|
|
Equal to or greater than 2% but less than 4%
|
$
|
1,175
|
|
|
$
|
207
|
|
Equal to or greater than 4%
|
$
|
1
|
|
|
$
|
1
|
|
Life & Other
|
|
|
|
||||
Greater than 0% but less than 2%
|
$
|
10,405
|
|
|
$
|
10,086
|
|
Equal to or greater than 2% but less than 4%
|
$
|
25,350
|
|
|
$
|
9,128
|
|
Equal to or greater than 4%
|
$
|
277
|
|
|
$
|
277
|
|
|
March 31, 2019
|
||||||
Guaranteed Minimum Crediting Rate
|
Account
Value
|
|
Account
Value at
Guarantee
|
||||
|
(In millions)
|
||||||
Greater than 0% but less than 2%
|
$
|
1,455
|
|
|
$
|
1,358
|
|
Equal to or greater than 2% but less than 4%
|
$
|
18,494
|
|
|
$
|
15,845
|
|
Equal to or greater than 4%
|
$
|
8,051
|
|
|
$
|
5,497
|
|
|
Future Policy
Benefits
|
|
Policyholder
Account Balances
|
||||||||||||
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||
|
(In millions)
|
||||||||||||||
Asia
|
|
|
|
|
|
|
|
||||||||
GMDB
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
GMAB
|
—
|
|
|
—
|
|
|
33
|
|
|
34
|
|
||||
GMWB
|
81
|
|
|
81
|
|
|
151
|
|
|
143
|
|
||||
EMEA
|
|
|
|
|
|
|
|
||||||||
GMDB
|
3
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
20
|
|
|
24
|
|
||||
GMWB
|
48
|
|
|
70
|
|
|
(77
|
)
|
|
(82
|
)
|
||||
MetLife Holdings
|
|
|
|
|
|
|
|
||||||||
GMDB
|
291
|
|
|
289
|
|
|
—
|
|
|
—
|
|
||||
GMIB
|
756
|
|
|
743
|
|
|
12
|
|
|
106
|
|
||||
GMAB
|
—
|
|
|
—
|
|
|
1
|
|
|
5
|
|
||||
GMWB
|
127
|
|
|
129
|
|
|
435
|
|
|
563
|
|
||||
Total
|
$
|
1,309
|
|
|
$
|
1,322
|
|
|
$
|
575
|
|
|
$
|
793
|
|
|
Total Account Value (1)
|
||||||
|
Asia & EMEA
|
|
MetLife Holdings
|
||||
|
(In millions)
|
||||||
Return of premium or five to seven year step-up
|
$
|
9,208
|
|
|
$
|
48,238
|
|
Annual step-up
|
—
|
|
|
3,239
|
|
||
Roll-up and step-up combination
|
—
|
|
|
5,781
|
|
||
Total
|
$
|
9,208
|
|
|
$
|
57,258
|
|
(1)
|
Total account value excludes $239 million for contracts with no GMDBs. The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for GMDBs and for living benefit guarantees are not mutually exclusive.
|
|
Total Account Value (1)
|
||||||
|
Asia & EMEA
|
|
MetLife Holdings
|
||||
|
(In millions)
|
||||||
GMIB
|
$
|
—
|
|
|
$
|
21,827
|
|
GMWB - non-life contingent (2)
|
2,220
|
|
|
2,661
|
|
||
GMWB - life-contingent
|
3,943
|
|
|
9,607
|
|
||
GMAB
|
2,201
|
|
|
353
|
|
||
Total
|
$
|
8,364
|
|
|
$
|
34,448
|
|
(1)
|
Total account value excludes $23.7 billion for contracts with no living benefit guarantees. The Company’s annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed for GMDBs and for living benefit guarantee amounts are not mutually exclusive.
|
(2)
|
The Asia and EMEA segments include the non-life contingent portion of the GMWB total account value of $945 million with a guarantee at annuitization.
|
|
Total Account Value
|
||
|
(In millions)
|
||
7-year setback, 2.5% interest rate
|
$
|
5,889
|
|
7-year setback, 1.5% interest rate
|
958
|
|
|
10-year setback, 1.5% interest rate
|
4,552
|
|
|
10-year mortality projection, 10-year setback, 1.0% interest rate
|
8,834
|
|
|
10-year mortality projection, 10-year setback, 0.5% interest rate
|
1,594
|
|
|
|
$
|
21,827
|
|
|
In-the-
Moneyness
|
|
Total
Account Value
|
|
% of Total
|
|
||
|
(In millions)
|
|||||||
In-the-money
|
30% +
|
|
$
|
332
|
|
|
2
|
%
|
|
20% to 30%
|
|
229
|
|
|
1
|
%
|
|
|
10% to 20%
|
|
447
|
|
|
2
|
%
|
|
|
0% to 10%
|
|
855
|
|
|
4
|
%
|
|
|
|
|
1,863
|
|
|
|
||
Out-of-the-money
|
-10% to 0%
|
|
1,884
|
|
|
9
|
%
|
|
|
-20% to -10%
|
|
3,243
|
|
|
15
|
%
|
|
|
-20% +
|
|
14,837
|
|
|
68
|
%
|
|
|
|
|
19,964
|
|
|
|
||
Total GMIBs
|
|
|
$
|
21,827
|
|
|
|
|
|
Instrument Type
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
Primary Underlying
Risk Exposure
|
|
Gross Notional
Amount
|
|
Estimated Fair Value
|
|
Gross Notional
Amount
|
|
Estimated Fair Value
|
||||||||||||||||||
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||||||||||||||
|
|
|
|
(In millions)
|
||||||||||||||||||||||
Interest rate
|
|
Interest rate swaps
|
|
$
|
7,578
|
|
|
$
|
67
|
|
|
$
|
15
|
|
|
$
|
8,209
|
|
|
$
|
89
|
|
|
$
|
3
|
|
|
|
Interest rate futures
|
|
1,389
|
|
|
1
|
|
|
4
|
|
|
1,559
|
|
|
1
|
|
|
3
|
|
||||||
|
|
Interest rate options
|
|
838
|
|
|
186
|
|
|
—
|
|
|
838
|
|
|
163
|
|
|
—
|
|
||||||
Foreign currency exchange rate
|
|
Foreign currency forwards
|
|
2,280
|
|
|
18
|
|
|
9
|
|
|
1,815
|
|
|
44
|
|
|
9
|
|
||||||
Equity market
|
|
Equity futures
|
|
3,313
|
|
|
2
|
|
|
17
|
|
|
2,730
|
|
|
11
|
|
|
77
|
|
||||||
|
|
Equity index options
|
|
10,029
|
|
|
413
|
|
|
643
|
|
|
9,933
|
|
|
408
|
|
|
546
|
|
||||||
|
|
Equity variance swaps
|
|
2,269
|
|
|
43
|
|
|
92
|
|
|
2,269
|
|
|
40
|
|
|
87
|
|
||||||
|
|
Equity total return swaps
|
|
767
|
|
|
1
|
|
|
52
|
|
|
929
|
|
|
91
|
|
|
—
|
|
||||||
|
|
Total
|
|
$
|
28,463
|
|
|
$
|
731
|
|
|
$
|
832
|
|
|
$
|
28,282
|
|
|
$
|
847
|
|
|
$
|
725
|
|
|
Three Months
Ended March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Sources:
|
|
|
|
||||
Operating activities, net
|
$
|
2,072
|
|
|
$
|
1,296
|
|
Net change in policyholder account balances
|
2,987
|
|
|
414
|
|
||
Net change in payables for collateral under securities loaned and other transactions
|
388
|
|
|
592
|
|
||
Cash received for other transactions with tenors greater than three months
|
—
|
|
|
75
|
|
||
Long-term debt issued
|
—
|
|
|
14
|
|
||
Financing element on certain derivative instruments and other derivative related transactions, net
|
—
|
|
|
37
|
|
||
Preferred stock issued, net of issuance costs
|
—
|
|
|
494
|
|
||
Other, net
|
4
|
|
|
100
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
—
|
|
|
197
|
|
||
Total sources
|
5,451
|
|
|
3,219
|
|
||
Uses:
|
|
|
|
||||
Investing activities, net
|
5,699
|
|
|
485
|
|
||
Cash paid for other transactions with tenors greater than three months
|
75
|
|
|
—
|
|
||
Long-term debt repaid
|
10
|
|
|
32
|
|
||
Collateral financing arrangements repaid
|
12
|
|
|
13
|
|
||
Financing element on certain derivative instruments and other derivative related transactions, net
|
29
|
|
|
—
|
|
||
Treasury stock acquired in connection with share repurchases
|
500
|
|
|
1,041
|
|
||
Dividends on preferred stock
|
32
|
|
|
6
|
|
||
Dividends on common stock
|
405
|
|
|
416
|
|
||
Effect of change in foreign currency exchange rates on cash and cash equivalents
|
4
|
|
|
—
|
|
||
Total uses
|
6,766
|
|
|
1,993
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(1,315
|
)
|
|
$
|
1,226
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Short-term debt (1)
|
$
|
289
|
|
|
$
|
268
|
|
Long-term debt (2)
|
$
|
12,845
|
|
|
$
|
12,824
|
|
Collateral financing arrangement
|
$
|
1,048
|
|
|
$
|
1,060
|
|
Junior subordinated debt securities
|
$
|
3,148
|
|
|
$
|
3,147
|
|
(1)
|
Includes $190 million and $168 million of debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at
March 31, 2019
and
December 31, 2018
, respectively. Certain subsidiaries have pledged assets to secure this debt.
|
(2)
|
Includes $415 million and $422 million of debt that is non-recourse to MetLife, Inc. and MLIC, subject to customary exceptions, at
March 31, 2019
and
December 31, 2018
, respectively. Certain investment subsidiaries have pledged assets to secure this debt.
|
Company
|
|
Paid (1)
|
|
|
Permitted Without
Approval (2)
|
||||
|
|
(In millions)
|
|||||||
Metropolitan Life Insurance Company
|
|
$
|
1,400
|
|
(3)
|
|
$
|
3,065
|
|
American Life Insurance Company
|
|
$
|
—
|
|
|
|
$
|
—
|
|
Metropolitan Property and Casualty Insurance Company
|
|
$
|
—
|
|
|
|
$
|
171
|
|
Metropolitan Tower Life Insurance Company
|
|
$
|
—
|
|
|
|
$
|
154
|
|
(1)
|
Reflects all amounts paid, including those where regulatory approval was obtained as required.
|
(2)
|
Reflects dividend amounts that may be paid during
2019
without prior regulatory approval. However, because dividend tests may be based on dividends previously paid over rolling 12-month periods, if paid before a specified date during
2019
, some or all of such dividends may require regulatory approval.
|
(3)
|
In February 2019, the MLIC Board of Directors declared a dividend of up to $2.1 billion, of which $1.4 billion was paid in cash. The unpaid portion, $746 million, was recorded as an accrued dividend.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Long-term debt — unaffiliated
|
$
|
11,868
|
|
|
$
|
11,844
|
|
Long-term debt — affiliated
|
$
|
1,940
|
|
|
$
|
1,957
|
|
Junior subordinated debt securities
|
$
|
2,457
|
|
|
$
|
2,456
|
|
Non-GAAP financial measures:
|
Comparable GAAP financial measures:
|
||
(i)
|
adjusted earnings
|
(i)
|
net income (loss)
|
(ii)
|
adjusted earnings available to common shareholders
|
(ii)
|
net income (loss) available to MetLife, Inc.’s common shareholders
|
(iii)
|
adjusted earnings available to common shareholders on a constant currency basis
|
(iii)
|
net income (loss) available to MetLife, Inc.’s common shareholders
|
•
|
adjusted earnings;
|
•
|
adjusted earnings available to common shareholders; and
|
•
|
adjusted earnings available to common shareholders on a constant currency basis.
|
•
|
Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees (“GMIB fees”);
|
•
|
Net investment income: (i) includes earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment (“Investment hedge adjustments”), (ii) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to contractholder-directed equity securities (“Unit-linked contract income”), (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (v) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP; and
|
•
|
Other revenues is adjusted for settlements of foreign currency earnings hedges and excludes fees received in association with services provided under transition service agreements (“TSA fees”).
|
•
|
Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through adjustments, (iii) benefits and hedging costs related to GMIBs (“GMIB costs”) and (iv) market value adjustments associated with surrenders or terminations of contracts (“Market value adjustments”);
|
•
|
Interest credited to policyholder account balances includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and excludes certain amounts related to net investment income earned on contractholder-directed equity securities;
|
•
|
Amortization of DAC and VOBA excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB fees and GMIB costs and (iii) Market value adjustments;
|
•
|
Amortization of negative VOBA excludes amounts related to Market value adjustments;
|
•
|
Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and
|
•
|
Other expenses excludes costs related to: (i) noncontrolling interests, (ii) implementation of new insurance regulatory requirements and (iii) acquisition, integration and other costs. Other expenses includes TSA fees.
|
•
|
Allocated equity is the portion of MetLife, Inc.’s common stockholders’ equity that management allocates to each of its segments and sub-segments based on local capital requirements and economic capital. See “— Economic Capital.” Allocated equity excludes the impact of accumulated other comprehensive income other than foreign currency translation adjustments.
|
•
|
The impact of changes in our foreign currency exchange rates is calculated using the average foreign currency exchange rates for the most recent period being compared and applied to the comparable prior period (“Constant Currency Basis”).
|
•
|
We sometimes refer to sales activity for various products. These sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity. Further, sales statistics for our Latin America, Asia and EMEA segments are on a Constant Currency Basis.
|
•
|
Asymmetrical and non-economic accounting refers to: (i) the portion of net derivative gains (losses) on embedded derivatives attributable to the inclusion of our credit spreads in the liability valuations, (ii) hedging activity that generates net derivative gains (losses) and creates fluctuations in net income because hedge accounting cannot be achieved and the item being hedged does not a have an offsetting gain or loss recognized in earnings, (iii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments and amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass through adjustments, and (iv) impact of changes in foreign currency exchange rates on the re-measurement of foreign denominated unhedged funding agreements and financing transactions to the U.S. dollar and the re-measurement of certain liabilities from non-functional currencies to functional currencies. We believe that excluding the impact of asymmetrical and non-economic accounting from total GAAP results enhances investor understanding of our performance by disclosing how these accounting practices affect reported GAAP results.
|
•
|
The Company uses a measure of free cash flow to facilitate an understanding of its ability to generate cash for reinvestment into its businesses or use in non-mandatory capital actions. The Company defines free cash flow as the sum of cash available at MetLife’s holding companies from dividends from operating subsidiaries, expenses and other net flows of the holding companies (including capital contributions to subsidiaries), and net contributions from debt to be at or below target leverage ratios. This measure of free cash flow is prior to capital actions, such as common stock dividends and repurchases, debt reduction and mergers and acquisitions. Free cash flow should not be viewed as a substitute for net cash provided by (used in) operating activities calculated in accordance with GAAP. The free cash flow ratio is typically expressed as a percentage of annual adjusted earnings available to common shareholders.
|
Period
|
|
Total Number
of Shares Purchased (1) |
|
Average Price Paid per Share
|
|
Total Number
of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number
(or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (2) |
||||||
January 1 — January 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,270,341,498
|
|
February 1 — February 28, 2019
|
|
9,311,185
|
|
|
$
|
44.54
|
|
|
9,311,185
|
|
|
$
|
855,610,141
|
|
March 1 — March 31, 2019
|
|
1,889,671
|
|
|
$
|
45.18
|
|
|
1,887,449
|
|
|
$
|
770,341,529
|
|
Total
|
|
11,200,856
|
|
|
|
|
11,198,634
|
|
|
|
|
(1)
|
Except for the foregoing, there were no shares of MetLife, Inc. common stock repurchased by MetLife, Inc. During the periods January 1 through January 31, 2019, February 1 through February 28, 2019 and March 1 through March 31, 2019, separate account index funds purchased
0
shares,
0
shares and
2,222
shares, respectively, of MetLife, Inc. common stock on the open market in non-discretionary transactions.
|
(2)
|
In November 2018, MetLife, Inc. announced that its Board of Directors authorized
$2.0 billion
of common stock repurchases. At
March 31, 2019
, MetLife, Inc. had
$770 million
of common stock repurchases remaining under this authorization. For more information on common stock repurchases, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — The Company — Liquidity and Capital Uses — Common Stock Repurchases.” See also “Risk Factors — Capital Risks — Legal and Regulatory Restrictions May Prevent Us from Paying Dividends and Repurchasing Our Stock at the Level We Wish” and Note 15 of the Notes to the Consolidated Financial Statements included in the
2018
Annual Report.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit No.
|
|
Description
|
|
Form
|
|
File Number
|
|
Exhibit
|
|
Filing Date
|
|
Filed or Furnished Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
|
8-K
|
|
001-15787
|
|
10.1
|
|
March 5, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
|
|
8-K
|
|
001-15787
|
|
10.2
|
|
March 5, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
METLIFE, INC.
|
||
|
|
|
By:
|
|
/s/ Tamara L. Schock
|
|
|
Name: Tamara L. Schock
Title: Executive Vice President
and Chief Accounting Officer
(Authorized Signatory and Principal
Accounting Officer)
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michel A. Khalaf
|
Michel A. Khalaf
President and
Chief Executive Officer
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John D. McCallion
|
John D. McCallion
Executive Vice President and
Chief Financial Officer
|
/s/ Michel A. Khalaf
|
Michel A. Khalaf
President and
Chief Executive Officer
|
/s/ John D. McCallion
|
John D. McCallion
Executive Vice President and
Chief Financial Officer
|