A.M. Best Revises Outlooks to Positive for MetLife, Inc.’s Property/Casualty Subsidiaries; Affirms Credit
Ratings of MetLife, Inc. and Its Life/Health Subsidiaries
A.M. Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of A
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” of MetLife’s Property and Casualty companies,
consisting of Metropolitan Property and Casualty Insurance Company and seven fully reinsured subsidiaries, as well as Metropolitan
Group Property and Casualty Insurance Company (both domiciled in Warwick, RI) (collectively referred to as MetLife Auto &
Home).
Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa-” of the Metropolitan Life Insurance
Company (MLIC) (New York, NY) and Metropolitan Tower Life Insurance Company (Lincoln, NE) (collectively referred to as MetLife
Insurance Group). Additionally, A.M. Best has affirmed the Long-Term ICR of “a-” and the Long- and Short-Term Issue Credit Ratings
(Long-Term IR; Short-Term IR) of MetLife, Inc. (MetLife) (headquartered in New York, NY) [NYSE: MET]. The outlook of these Credit
Ratings (ratings) is stable. (See link below for a detailed listing of the companies and ratings.)
The ratings of MetLife Auto & Home reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well
as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).
The positive outlooks reflect a trend of favorable underwriting performance that has consistently outperformed the composite on
a five- and 10-year basis. It further reflects A.M. Best’s expectation that MetLife Auto & Home’s operating performance may
continue to drive organic surplus growth.
The ratings of MetLife Insurance Group reflect its balance sheet strength, which A.M. Best categorizes as strong, as well as its
strong operating performance, very favorable business profile and appropriate ERM.
The rating affirmations of MetLife Insurance Group reflect its industry-leading position in U.S. group benefits and its
affiliated international companies in which it holds several market-leading positions in mature and emerging markets. The holding
company’s liquidity and financial flexibility are major factors in A.M. Best’s balance sheet assessment of strong. Financial
leverage of approximately 25% is moderate, although interest coverage is below similarly rated peers, which is due partially to
costs and an expense overhang associated with the Brighthouse Financial, Inc. spinoff. The company’s operating performance also
remains strong within its core business lines with lower volatility and more predictable earnings streams on a post spin-off basis.
However, while overall premiums and earnings will be impacted by the gradual decline of retained run-off business within the
MetLife Holdings segment, A.M. Best expects favorable operating trends to continue in its core group insurance, retirement and
asset management business lines. A.M. Best notes that MetLife’s liability profile is of higher credit worthiness on a post spin-off
basis.
MetLife announced two material weaknesses in internal controls in early 2018, both of which impacted 2017 year-end results. The
first was related to unrecorded pension liabilities in its pension risk transfer business, and the second included a revision
related to a release of reinsurance reserves for its legacy Japanese variable annuity block of business following an internal
review of reserving practices. While A.M. Best remains concerned about the two material weaknesses, MetLife is currently in the
process of implementing remediation practices to improve controls over its operational and reserving practices along with ensuring
the timely communication and escalation of issues throughout the company. Despite these two material weaknesses, A.M. Best believes
that MetLife maintains an appropriate level of ERM capabilities for its risk profile.
For a listing of MetLife’s FSRs, Long-Term ICRs and Long- and Short-Term IRs, please visit
MetLife, Inc..
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual
ratings referenced in this release, please see A.M. Best’s
Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions,
please view
Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press
releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
A.M. Best
Michael Adams, +1 908 439 2200, ext. 5133
Senior Financial Analyst—L/H
michael.adams@ambest.com
or
Christopher Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jacqalene Lentz, +1 908 439 2200, ext. 5762
Director—P/C
jacqalene.lentz@ambest.com
or
Jim Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com
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