MetLife, Inc. has announced its plans for the future, which includes scaling back sales of what it terms “capital intensive products” like variable annuities and introducing accident and health products in the U.S.
During its investor conference held yesterday, William J. Wheeler, president of the Americas for MetLife, said it projects sales of roughly $18 billion for variable annuities. That is down significantly from 2011, when its VA sales hit $28.4 billion, making it the top VA seller in the U.S., according to LIMRA.
As of March 31, MetLife had nearly $1.6 billion in liabilities in its variable annuity business, of which two-thirds had a living benefit rider.
Wheeler termed that number an “attractive risk profile.” Yet with interest rates low, return on equity for the VA line is depressed, he added.
Wheeler said that while MetLife intends to manage the VA business prudently, it “has no intention of exiting” the line entirely. Of the 375,000 MetLife VA contracts out in the market, only 250 were “in the money” as of March 31, Wheeler said.
Other strategic initiatives outlined by MetLife included:
- By 2016, increase its return on equity to between 12 percent and 14 percent, up from 10.3 percent in 2011.
- Achieve $600 million in net pre-tax expense savings.
- Grow its employee benefits business globally.
- Increase its presence in emerging markets worldwide.
“We have identified significant opportunities for us to continue our growth in a way that is disciplined, meets consumer needs and will position us to achieve return on equity expansion,” said MetLife chairman, president and CEO Steven a. Kandarian in a release detailing the company’s future plans.