MetLife Stable Value & Institutional Products Client Conference. June 20, 2007

Transcription

1 MetLife Stable Value & Institutional Products Client Conference June 20, 2007

2 Safe Harbor Statement These materials contain statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in the operations and financial results and the business and the products of MetLife, Inc. and its subsidiaries (collectively, the Company ), as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those included in the forward-looking statements as a result of risks and uncertainties including, but not limited to, the following: (i) changes in general economic conditions, including the performance of financial markets and interest rates; (ii) heightened competition, including with respect to pricing, entry of new competitors, the development of new products by new and existing competitors and for personnel; (iii) investment losses and defaults; (iv) unanticipated changes in industry trends; (v) catastrophe losses; (vi) ineffectiveness of risk management policies and procedures; (vii) changes in accounting standards, practices and/or policies; (viii) changes in assumptions related to deferred policy acquisition costs, value of business acquired or goodwill; (ix) discrepancies between actual claims experience and assumptions used in setting prices for the Company s products and establishing the liabilities for the Company s obligations for future policy benefits and claims; (x) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (xi) adverse results or other consequences from litigation, arbitration or regulatory investigations; (xii) downgrades in the Company s and its affiliates claims paying ability, financial strength or credit ratings; (xiii) regulatory, legislative or tax changes that may affect the cost of, or demand for, the Company s products or services; (xiv) MetLife, Inc. s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (xv) deterioration in the experience of the closed block established in connection with the reorganization of Metropolitan Life Insurance Company; (xvi) economic, political, currency and other risks relating to the Company s international operations; (xvii) the effects of business disruption or economic contraction due to terrorism or other hostilities; (xviii) the Company s ability to identify and consummate on successful terms any future acquisitions, and to successfully integrate acquired businesses with minimal disruption; and (xix) other risks and uncertainties described from time to time in MetLife, Inc. s filings with the U.S. Securities and Exchange Commission. The Company specifically disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. MetLife Stable Value & Institutional Products Client Conference 2

3 Explanatory Note on Non-GAAP Financial Information The historical and forward-looking financial information presented at this conference and contained in these presentations include performance measures which are based on methodologies other than Generally Accepted Accounting Principles ( GAAP ). MetLife analyzes its performance using so-called non-gaap measures, including operating earnings, operating earnings available to common shareholders, operating earnings available to common shareholders per diluted common share and operating return on common equity. MetLife believes these measures enhance the understanding and comparability of its performance by excluding net investment gains and losses, net of income tax, and adjustments related to net investment gains and losses, net of income tax, both of which can fluctuate significantly from period to period, the impact of the cumulative effect of a change in accounting, net of income tax, and discontinued operations other than discontinued real estate, net of income tax, thereby highlighting the results from operations and the underlying profitability drivers of the business. Operating earnings is defined as GAAP net income, excluding net investment gains and losses, net of income tax, adjustments related to net investment gains and losses, net of income tax, the impact of the cumulative effect of a change in accounting, net of income tax, and discontinued operations other than discontinued real estate, net of income tax. Scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment are included in operating earnings. Operating earnings available to common shareholders is defined as operating earnings less preferred stock dividends, which are recorded in Corporate & Other. All references in these slides and in the presentations made at this conference to operating earnings for 2005 and future years should be read as references to operating earnings available to common shareholders. Operating earnings available to common shareholders per diluted common share is calculated by dividing operating earnings available to common shareholders (as defined above) by the number of weighted average diluted common shares outstanding for the period indicated. All references in these slides and in the presentations made at this conference to operating earnings per share for 2005 and future years should be read as references to operating earnings available to common shareholders per diluted common share. MetLife Stable Value & Institutional Products Client Conference 3

4 Explanatory Note on Non-GAAP Financial Information (Continued) Operating return on common equity is calculated by dividing operating earnings available to common shareholders (as defined above) by average common equity for the period indicated, excluding accumulated other comprehensive income. For the historical periods presented, reconciliations of non-gaap measures used in the presentations made at this conference to the most directly comparable GAAP measures are included in the Appendix to the presentation materials and are on the Investor Relations portion of the Company s website ( Additional information about MetLife s historical financial results is available in the Company s Quarterly Financial Supplements which may be accessed through the Company s website. The non-gaap measures used in the presentations made at this conference should not be viewed as substitutes for the most directly comparable GAAP measures. In the presentations made at this conference, MetLife provides guidance on its future earnings, earnings per share and return on common equity on an operating, non-gaap basis. A reconciliation of these measures to the most directly comparable GAAP measures is not accessible on a forward-looking basis because MetLife believes it is not possible to provide a reliable forecast of net investment gains and losses, which can fluctuate significantly from period to period and may have a significant impact on GAAP net income. MetLife Stable Value & Institutional Products Client Conference 4

5 Conference Objectives Overview of MetLife s Institutional Business Review of MET s financial strength and performance Dialogue with Senior Officers of MetLife MetLife Stable Value & Institutional Products Client Conference 5

6 Agenda Time Topic Presenter 8:30-9:00 a.m. Registration & Breakfast 9:00-9:10 a.m. Welcome & Introductory Remarks Gregory P. Falzon 9:10-9:35 a.m. MetLife Institutional Business William J. Mullaney 9:35-10:35 a.m. MetLife Financial Overview William J. Wheeler 10:35-10:50 a.m. Break 10:50-11:20 a.m. Investments Overview Robert W. Morgan 11:20-11:40 a.m. Capital Markets Investment Products Thomas E. Lenihan 11:40-12:00 p.m. Closing Remarks C. Robert Henrikson 12:00-1:00 p.m. Lunch MetLife Stable Value & Institutional Products Client Conference 6

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8 MetLife Institutional Business William J. Mullaney President, Institutional Business MetLife Stable Value & Institutional Products Client Conference

9 Agenda > Institutional Business: Who Are We? > Financial Highlights > Growth Opportunities > Wrap-Up MetLife Stable Value & Institutional Products Client Conference 9

10 MetLife At-A-Glance MetLife 2006 Operating Earnings $4,022 Million Auto & Home $414M (10%) International $228M (6%) Reinsurance and Corporate & Other $137M (4%) Institutional $1,700M (42%) Individual $1,543M (38%) See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 10

11 Product Leadership Institutional 2006 Operating Earnings $1,700 Million Non-Medical Health $319M (19%) Group Life $426M (25%) Retirement & Savings $955M (56%) Sales Industry Rank* Total Group Life, Health and Annuity #1 Life #1 Auto & Home #1 Institutional Annuities #1 Structured Settlements #2 Stable Value & Funding Agreements #3 Long Term Care #2 Disability #2 Dental #2 *All measures are in sales premiums unless otherwise noted. Group Life - AM Best FY 2005; Group A&H Inforce: MetLife Research - FY 2005; Institutional Annuities: LIMRA - FY05; Structured Settlements, Group LTC (includes group employer & associations; sales & re-enrolls; 50% of Federal LTC program), - LIMRA Q4 2006; Stable Value & Funding Agreements, Group Disability - LIMRA Q3 2006; Group Dental (#2 Group Dental Carrier overall and #1 Commercial Group Dental Carrier): MetLife Research - FY See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 11

12 Premiums, Fees & Other Revenues CAGR 8.8% $9.5 $10.3 $11.4 $12.8 $13.3 ($ Billions) $ % $ Q106 Q107 MetLife Stable Value & Institutional Products Client Conference 12

13 Total Policyholder Balances CAGR 14.1% 7.2% $148.6 $157.4 $149.0 $159.8 ($ Billions) $92.9 $103.0 $ Q106 Q107 General Account Separate Account MetLife Stable Value & Institutional Products Client Conference 13

14 Operating Earnings CAGR 14.2% $1.7 ($ Billions) $1.0 $1.1 $1.2 $ % $416M $452M Q106 Q107 See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 14

15 Institutional Drivers > Maintain strong fundamentals MetLife Stable Value & Institutional Products Client Conference 15

16 Institutional Drivers > Maintain strong fundamentals > Top line growth in all segments MetLife Stable Value & Institutional Products Client Conference 16

17 Institutional Drivers > Maintain strong fundamentals > Top line growth in all segments > Market share growth and margin improvement MetLife Stable Value & Institutional Products Client Conference 17

18 Institutional Drivers > Maintain strong fundamentals > Top line growth in all segments > Market share growth and margin improvement > Continued disciplined growth in Disability MetLife Stable Value & Institutional Products Client Conference 18

19 Institutional Drivers > Maintain strong fundamentals > Top line growth in all segments > Market share growth and margin improvement > Continued disciplined growth in Disability > Grow voluntary and retiree insured Dental MetLife Stable Value & Institutional Products Client Conference 19

20 Institutional Drivers > Maintain strong fundamentals > Top line growth in all segments > Market share growth and margin improvement > Continued disciplined growth in Disability > Grow voluntary and retiree insured Dental > Some improvement in the yield curve MetLife Stable Value & Institutional Products Client Conference 20

21 Institutional Drivers > Maintain strong fundamentals > Top line growth in all segments > Market share growth and margin improvement > Continued disciplined growth in Disability > Grow voluntary and retiree insured Dental > Some improvement in the yield curve > Lower variable net investment income MetLife Stable Value & Institutional Products Client Conference 21

22 Institutional Drivers > Maintain strong fundamentals > Top line growth in all segments > Market share growth and margin improvement > Continued disciplined growth in Disability > Grow voluntary and retiree insured Dental > Some improvement in the yield curve > Lower variable net investment income MetLife Stable Value & Institutional Products Client Conference 22

23 Group Insurance: We Stand Alone In-force Premiums & Equivalents $20 ($ Billions) $15 $10 $5 Select Products Group Life Group Dental (Commercial) Group LTC Group Auto & Home Group Disability Income Insurance $0 MetLife Prudential CIGNA Aetna Unum Hartford Standard Principal AIG Hancock Source: Group Life: as of year-end 2005, group life direct premiums written (in-force), AM Best - July 2006; Group Dental (Commercial): as of year-end 2005, group dental in-force premiums & equivalents, MetLife Research - August excludes Delta Dental and Blue Cross Blue Shield; Group Disability: as of year-end 2005, group disability in-force premiums & equivalents, LIMRA - April 2006; Group LTC: as of year-end 2005, group LTC in-force including employer-sponsored and association - MetLife data include 50% of the Long Term Care Partners business, LIMRA - March 2006; Group Auto & Home - as of year-end 2005, Group Auto & Home in-force premiums, MetLife Research - September MetLife Stable Value & Institutional Products Client Conference 23

24 Group Insurance Market Share by Employer Size 70% 64% 60% Market Share 50% 40% 30% 20% 10% 1% 11% 0% < ,999 25,000+ Employer Size (# employees) Sources: < 500 market share based on 2004 LIMRA, MetLife Marketing Research and Estimates; Estimated universe of customers with ,999 employees based on 2005 D&B data; Estimated universe of customers with 25,000+ employees based on MetLife Internal Data, MetLife Stable Value & Institutional Products Client Conference 24

25 National Accounts Continued Strong Growth > Adding an average of 10 new customers annually > Growing through existing customers purchasing new products > Uniquely positioned to capitalize from corporate consolidations Number of Customers* (25,000+ Employees) Sales Revenue 10% 148 (36%) 267 (64%) 90% MetLife Non-MetLife New Customers Existing Customers * Estimated universe of customers based on MetLife Internal Data, MetLife Stable Value & Institutional Products Client Conference 25

26 Mid / Large Near Double Digit Growth > 11% market share > Relationships with 3,700 of 35,000* employers in this market > Balanced mix of sales between new and existing customers > Increased sales of insured products Premiums, Fees & Other Revenues ($ Billions) CAGR 9.3% * Estimated universe of 35,000 customers based on 2005 D&B data. MetLife Stable Value & Institutional Products Client Conference 26

27 Small Market Tremendous Opportunity > Over $1B of premiums, fees & other revenues with solid margins > Premium growth built primarily on Dental > Expansion of Life and Disability sales Premiums, Fees & Other Revenues ($ Billions) CAGR 16.3% MetLife Stable Value & Institutional Products Client Conference 27

28 Poised for Growth Group Insurance > Grow faster than the market > Leverage trend towards employee-paid benefits > Maintain and improve fundamentals > Leverage our National Account franchise > Increase market share with small and mid-size employers > Insured Dental growth > Group & Individual product combinations drive competitive advantage > Disciplined risk selection > Expense management/scale MetLife Stable Value & Institutional Products Client Conference 28

29 Retirement & Savings Sales by Product 14 CAGR 9.2% $13.0 Sales ($ Billions) Deposits/Premiums & Fees $10.9 $9.8 Income Annuities Closeouts Capital Mkt Inv Products Structured Settlements MMGIC/Trust GICs/Other GICs/Funding Agreements 401(k) MetLife Stable Value & Institutional Products Client Conference 29

30 Poised for Growth Retirement & Savings > Rebuild pension & retirement solution business > Broaden capital markets investment products > Defined benefit closeout market > Other post-employment benefits > Develop new product solutions > Enter new markets with existing capabilities > Global GIC issuance > Farmer Mac, Federal Home Loan Bank > Provide employee paid income solutions > Income Annuities as distribution options in retirement plans > Voluntary Income Annuity Suite MetLife Stable Value & Institutional Products Client Conference 30

31 Wrap-Up > Proven market leadership > Strong record of revenue and earnings growth > Long-standing commitment to disciplined fundamentals > Well positioned to capitalize on significant growth opportunities MetLife Stable Value & Institutional Products Client Conference 31

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33 MetLife Financial Overview William J. Wheeler Executive Vice-President & CFO MetLife Stable Value & Institutional Products Client Conference 33

34 First Quarter 2007 Financial Overview ($ millions, except per share and book value data) Three Months Ended March 31, Actual 2006 Actual 2007 % Change 2006/2007 Premiums, Fees & Other Revenues $7,934 $8, % Operating Earnings Available to Common Shareholders per Diluted Common Share $1.33 $ % Net Income Available to Common Shareholders per Diluted Common Share $0.93 $ % Book Value per Common Share* (actual common shares outstanding) $34.21 $ % Operating Return on Common Equity** 16.1% 14.1% * Excluding AOCI. ** Operating Return on Common Equity calculated on an annualized basis. See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 34

35 Revenue Growth Premiums and Fees 1 ($ millions) $22,331 CAGR 9.9% $24,269 $26,265 $29,954 $32, % $7,934 $8, Q106 Q107 1 Includes Other Revenues See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 35

36 Premiums, Fees & Other Revenues by Line of Business ($ millions) Three Months Ended March 31, Actual 2006 Actual 2007 % Change 2006/2007 Institutional Group Life $1,761 $1, % Retirement & Savings % Non-Medical Health & Other 1,197 1, % Sub-Total 3,360 3, % Individual Life 1,368 1, % Annuities % Other % Sub-Total 2,000 2, % Auto & Home % International % Reinsurance 1,008 1, % Corporate & Other % Total $7,934 $8, % See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 36

37 Total Assets ($billions) $277.4 $59.7 $217.7 CAGR 17.4% $326.8 $356.8 $75.8 $86.8 $251.0 $270.0 $481.6 $127.9 $353.7 $527.7 $144.4 $383.3 $537.8 $147.3 $ Q107 General Account Separate Account MetLife Stable Value & Institutional Products Client Conference 37

38 Underwriting Results Disability Morbidity Individual Mortality 95.5% 95.4% 94.0% 91.6% 89.8% 89.8% 90.7% 87.0% 83.8% 87.7% 82.0% 85.4% 85.1% 87.6% Q106 Q107 Auto & Home Combined Ratio Q106 Q107 Group Term Life Mortality 94.2% 99.4% 99.7% 97.4% 97.1% 96.8% 96.4% 92.4% 90.8% 91.7% 92.4% 91.5% 91.8% 90.4% 89.6% 86.7% 87.2% 86.6% 87.7% 86.3% 82.8% Q106 Q Q106 Q107 Combined Ratio Combined Ratio Ex Cats MetLife Stable Value & Institutional Products Client Conference 38

39 Investment Yields and Spreads Q106 Q107 Average Yield on Total Invested Assets 7.25% 6.72% 6.55% 6.21% 6.47% 6.42% 6.52% R&S 1.44% 1.40% 1.83% 1.71% 1.49% 1.43% 1.36% Group Life 1.89% 2.04% 2.19% 1.98% 1.78% 1.67% 1.62% Annuities 2.07% 2.11% 2.33% 2.83% 2.65% 2.63% 2.57% UL/VUL 1.63% 1.79% 1.93% 2.07% 1.93% 2.13% 1.78% MetLife Stable Value & Institutional Products Client Conference 39

40 Total Company Operating Expense Ratio 30.6% 32.4% 31.4% 27.8% 27.8% 28.0% 28.5% 28.9% Q106 Q406 Q107 Operating expense ratio is defined as expenses excluding certain items, divided by premiums, fees and other revenues. See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 40

41 Operating Earnings Available to Common Shareholders Per Diluted Common Share CAGR 19.1% $5.21 $4.30 $2.59 $2.83 $ % $1.33 $ Q106 Q107 See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 41

42 Operating Earnings Available to Common Shareholders by Line of Business ($ millions) Three Months Ended March 31, Actual 2006 Actual 2007 % Change 2006/2007 Institutional $416 $ % Individual % Auto & Home % International % Reinsurance % Corporate & Other Total $1,026 $1, % See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 42

43 GAAP Results Total Company ($ millions, except per share) Three Months Ended March 31, Actual 2006 Actual 2007 Diluted Diluted Amount EPS Amount EPS Operating earnings available to common shareholders Net investment gains (losses), net of income tax $1,026 $1.33 $1,082 $1.41 (320) (0.41) (84) (0.11) Discontinued operations, net of income tax (15) (0.02) Net income available to common shareholders $714 $0.93 $983 $1.28 See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 43

44 Financial Strength Ratings Metropolitan Life Insurance Company MetLife Insurance Company of Connecticut Moody's Aa2 Stable Aa2 Stable S&P AA Stable AA Stable Fitch AA Stable AA Stable A.M. Best A+ Stable A+ Stable Company ratings as of May 30, MetLife Stable Value & Institutional Products Client Conference 44

45 2007 Operating EPS & ROE Projection Operating EPS 2007 Projection $ $ Estimated ROE 12.1% % See Appendix for non-gaap financial information definitions and/or reconciliations. MetLife Stable Value & Institutional Products Client Conference 45

46 Capital Structure & Flexibility 2007P Debt Leverage Ratio 24.3% RBC Targets: MLIC 325% MICC 325% MTL 250% USA 325% Consolidated 325% MetLife Stable Value & Institutional Products Client Conference 46

47 Summary Another excellent year Great momentum Well positioned for the future > Strategic business position > Financial and capital resources MetLife Stable Value & Institutional Products Client Conference 47

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49 Investments Overview Robert W. Morgan Managing Director Portfolio Management MetLife Stable Value & Institutional Products Client Conference 49

50 Agenda Market Overview Portfolio Review > Asset Allocation > Fixed Maturity Securities > Alternative Investments > Real Estate Risk Management Derivatives MetLife Stable Value & Institutional Products Client Conference 50

51 2007 Market View and Themes Economy Moderate growth Soft landing, no recession Inflation Headline inflation remains low Core inflation falls slowly Fed Prolonged pause at 5.25% On hold for remainder of 2007 Interest Rates Inverted curve through most of 2007 Fixed Income Fundamentals peaked Sectors Spreads gradually widen Real Estate Sectors Fundamentals peaked Spreads gradually widen MetLife Stable Value & Institutional Products Client Conference 51

52 Portfolio Allocation Asset Category 3/31/07 (MV $B) 2007 Target Ranges and Holdings U.S. Treasury/Agency $ % 11.0% Residential MBS % 20.0% Commercial MBS % 9.5% Asset-Backed Securities % 6.5% A or Better Corporates % 25.0% BBB Corporates % 16.0% Below Invest. Grade Credit % 6.5% Commercial Mortgages % 12.5% Agricultural Mortgages % 4.5% Real Estate Equity % 4.0% Corporate Equity % 5.0% Cash & Short Term % 4.5% Subtotal $319.8 Other Invested Assets 10.5 Real Estate Value Adj. (3.4) Policy Loans 10.2 Total Carrying Value $337.1 Neutral Min / Max Range 3/31/07 Holdings MetLife Stable Value & Institutional Products Client Conference 52

53 Portfolio Allocation Trend Fixed Maturity Securities 3/31/2004 3/31/2005 3/31/2006 3/31/ Mid-point Target Range U.S. Treasury/Agency 7.7% 9.2% 9.2% 8.6% 8.0% Structured Finance Residential MBS 14.4% 14.6% 17.2% 17.6% 17.0% Commercial MBS 5.4% 5.7% 6.6% 5.6% 7.5% Asset-Backed Securities 5.6% 4.6% 4.5% 4.2% 4.5% Total Structured Finance 25.4% 24.9% 28.3% 27.4% 29.0% Credit 'A' or Better Corporates 20.9% 20.2% 21.8% 21.6% 22.0% 'BBB' Corporates 19.3% 17.6% 14.9% 14.5% 14.0% Below Invest. Grade Credit 5.6% 5.2% 5.1% 5.4% 5.5% Total Credit 45.8% 43.0% 41.8% 41.5% 41.5% Total Fixed Maturity Securities 78.9% 77.1% 79.3% 77.5% 78.5% Real Estate Commercial Mortgages 10.6% 11.5% 9.8% 10.9% 11.0% Agricultural Mortgages 2.5% 2.5% 2.5% 3.0% 3.0% Real Estate Equity 3.8% 3.8% 3.0% 2.6% 2.5% Total Real Estate 16.9% 17.8% 15.3% 16.5% 16.5% Corporate Equity 1.9% 2.4% 2.6% 3.2% 3.5% Cash & Short Term 2.3% 2.7% 2.8% 2.8% 1.5% MV of Managed Asset Base 100.0% 100.0% 100.0% 100.0% 100.0% MetLife Stable Value & Institutional Products Client Conference 53

54 Corporate Credit Quality ($ Billions) 3/31/05 3/31/06 3/31/07 Credit Quality Investment Grade 'A' or Better 47.0% 52.2% 52.3% 'BBB' 41.0% 35.6% 34.8% Total Investment Grade 88.0% 87.8% 87.1% Below Investment Grade 'Ba' 7.2% 7.3% 7.4% 'B' 4.5% 4.7% 5.2% 'Caa and Lower' 0.3% 0.2% 0.3% In or Near Default - % - % - % Total Below Investment Grade 12.0% 12.2% 12.9% Total $101.9 $126.4 $132.5 MetLife Stable Value & Institutional Products Client Conference 54

55 Strategies to Reduce LBO Exposure Avoid at risk industry sectors Aggressively reduce exposure to specific issuers Increase allocation to private securities Push underwriters for stronger covenant protection in public markets MetLife Stable Value & Institutional Products Client Conference 55

56 Defensive Below Investment Grade Strategy 7.0% 6.5% BIG Credit as Percentage of MV of Invested Assets 6.6% MetLife's $17.1 Billion BIG Credit Portfolio as of 3/31/07 Other 6% 6.0% 5.5% 5.40% Bank Loans 31% Corp. Bonds 50% 5.0% 5.2% 4.5% Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Mar-07 Emg. Markets 13% MetLife Stable Value & Institutional Products Client Conference 56

57 Sub-prime Mortgages Limited Exposure Positioned for weaker housing market Reduced sub-prime RMBS exposure by 25% from year-end 2005 to 1Q07 $2.6B portfolio of higher quality, seasoned collateral > 96% rated AAA / AA > 4% rated A or BBB All from 2004 and prior vintages > Limited exposure to affordability products" and investment properties Minimal credit exposure to large sub-prime lenders MetLife Stable Value & Institutional Products Client Conference 57

58 Started Managing Sub-Prime Exposure Early Decline in sub-prime purchases Reduced exposure to sub-prime RMBS Sub-Prime as Percentage of RMBS Issuance $4,000 MetLife's Sub-Prime Holdings 25% 20% 15% 10% 5% 0% 7% 11% 7% 9% 19% 9% 22% 22% 5% % ($ Millions) $3,000 $2,000 $1,000 $ Mar- 07 Market RMBS Issuance MetLife RMBS Purchases AAA/AA A and Below MetLife Stable Value & Institutional Products Client Conference 58

59 RMBS Good Value and Diversification Highly liquid and attractive relative value Virtually all rated AAA Volatility mitigated by: > Matching with liabilities > Structure / security underwriting > Hedging with derivatives RMBS Allocation as of 3/31/07 Portfolio Type Total Short-Term 62% Rate-Reset 12% Participating Products 8% Sub-Total 82% Other 18% Total 100% MetLife Stable Value & Institutional Products Client Conference 59

60 Real Estate and Agricultural Investments ($ Billions Book Value) 3/31/2006 3/31/2007 Commercial Mortgages Total portfolio $28.3 $33.4 Top 10 exposures $2.2 $2.6 Largest single investment $0.4 $0.4 Agricultural Mortgages Total portfolio $7.7 $9.5 Top 10 exposures $0.9 $2.0 Largest single investment $0.2 $0.9 Real Estate Equity Total portfolio $4.7 $5.4 Top 10 exposures $2.1 $2.1 Largest single investment $0.5 $0.4 MetLife Stable Value & Institutional Products Client Conference 60

61 Commercial Mortgages Quality Profile ($ Billions Book Value) 3/31/05 3/31/06 3/31/07 Traditional <60% LTV 23% 37% 40% 61-75% LTV 40% 29% 28% 76-80% LTV 8% 4% 3% >80% LTV 3% 2% 2% Total Commercial Mortgages 74% 72% 73% High Yield Commercial Mortgages 3% 3% 3% Agricultural Loans 19% 21% 21% Consumer Loans 4% 4% 3% Total Mortgages 100% 100% 100% $32.0 $37.4 $43.9 MetLife Stable Value & Institutional Products Client Conference 61

62 Reduced New York City Concentration ($ Billions) % of Portfolio Value NYC Exposure 3/31/05 3/31/06 3/31/07 3/31/07 Real Estate Equity (MV) 40.4% 40.3% 11.1% $0.9 Commercial Mortgage (BV) 5.7% 5.7% 6.3% $2.1 Combined Exposure 15.0% 14.1% 7.3% $3.0 MetLife Stable Value & Institutional Products Client Conference 62

63 Risk Management: Disciplined Approach Dedicated Investments Risk Management team Risk metrics: > Economic Capital/VaR model > Credit aggregation > Total portfolio, sector and issuer limits > Stress testing Portfolio management > Relative value > Liability-driven strategies direct asset allocations > Derivatives reduce risk MetLife Stable Value & Institutional Products Client Conference 63

64 Derivatives: A Risk Management Tool 99% of derivatives used for hedging purposes > Interest rate protection > Duration management > Credit protection > Product guarantees > Foreign currency Foreign Exchange 16% Derivatives by Use As of 3/31/07 Credit 7% Equity 4% Interest Rates 73% MetLife Stable Value & Institutional Products Client Conference 64

65 Derivatives: Notional Outstanding ($ Billions) 3/31/05 3/31/06 3/31/07 Notional Amount Notional Amount Notional Amount Interest Rate Swaps, Floors and Caps $29.0 $57.4 $93.3 Financial Futures Foreign Currency Swaps and Forwards Options Financial Forwards Credit Default Swaps Synthetic GICs Other Total $51.0 $91.4 $139.7 MetLife Stable Value & Institutional Products Client Conference 65

66 Investment Risks Low rates Flat curve Tight spreads Continued yield curve inversion MetLife Stable Value & Institutional Products Client Conference 66

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68 Capital Markets Investment Products Tom Lenihan Managing Director Capital Markets/Investments MetLife Stable Value & Institutional Products Client Conference 68

69 Capital Markets Investment Products Products Under Management > MLIC and MICC Funding Agreement-Backed Notes > Farmer Mac Guaranteed Trust Notes > Funding Agreement-Backed ABCP Program (2H 2007) > Federal Home Loan Bank Advances MetLife Stable Value & Institutional Products Client Conference 69

70 Capital Markets Investment Products Operating Paradigm > Operated by Investments Department s Funding Desk > Funding Desk has both liability and asset responsibility > Full transparency (spread margin/roe) > Asset characteristics and mix dependent on liability type > Derivatives manage duration, currency and cash flow risks MetLife Stable Value & Institutional Products Client Conference 70

71 Corporate Organizational Structure MetLife, Inc. ("Holding Company") Metropolitan Life Insurance Company ("Metropolitan Life" or "MLIC") Domiciled in New York MetLife Insurance Company of Connecticut ("MICC") Domiciled in Connecticut Met A&H International Subsidiaries Bank Other Subsidiaries MetLife Stable Value & Institutional Products Client Conference 71

72 FA-Backed Notes Market Growth of Market ($B) Issuance by Year > $233.4B of notes have been offered since 1997 ($152.3B currently outstanding) > In 2006, 17 programs issued a total of $32.3B > 2007 issuance likely to remain robust reflecting rollover of $26.9B of scheduled maturities and some organic growth 1. From Standard & Poor s Research MetLife Stable Value & Institutional Products Client Conference 72

73 FA-Backed Notes Market Program Size by Issuer 2006 Issuance by Program 1 ($B) MET AEGON PFG PRU NYL GNW ALL SUN NAT HIG USD GBP CAD CHF EUR MXN AUD 2006 YE Outstanding Balance by Program ($B) AIG MET PFG ALL AEGON NYL PACLIF PRU JHF JNL 1. From Standard & Poor s Research. MetLife Stable Value & Institutional Products Client Conference 73

74 MLIC FA-Backed Notes Program As of 3/31/2007 > 56 discrete transactions totaling $20.0B offered since inception of Program in June 2002 > $4.4B average annual issuance from > Outstanding balance totals approximately $18.4B > Expanding global presence with issuances in 7 currencies > $2.0B issued YTD towards $ B expected issuance > Program has reached over 350 investors globally MetLife Stable Value & Institutional Products Client Conference 74

75 MLIC FA-Backed Notes Program Profile As of 3/31/2007 Investor Profile Pension 4% Other 4% Currency Profile Asset Manager Insurance 39% CAD 12% USD 7% 64% CHF 7% EUR 1% YEN 1% MXN 1% Sec Lender 13% GBP 19% Bank 28% MetLife Stable Value & Institutional Products Client Conference 75

76 MICC FA-Backed Notes Program Overview > Formerly known as The Travelers Insurance Company > Renamed MetLife Insurance Company of Connecticut $126.3B of total assets as of 3/31/2007, with $75.5B in general account assets > $3.3B outstanding under two inactive programs > Just established a new EMTN program MetLife Institutional Funding I, LLC > Targets $1.0B issuance in 2007 Focuses on reverse inquiries / non-usd MetLife Stable Value & Institutional Products Client Conference 76

77 Farmer Mac Guaranteed Trust Notes Overview > 144A Notes rated AAA by Moody s, Fitch, DBRS > Trust issues Notes with three credit elements Unconditionally guaranteed by Farmer Mac Secured by a MLIC funding agreement Funding agreement obligations over-collateralized by MLIC s high quality agricultural mortgages > MLIC retains ownership rights and economics of underlying agricultural loan collateral > 3 transactions totaling $2.5B since 2006 $500M 5-year Note issued in January 2006 $1.0B 5-year Note issued in July 2006 $1.0B 5-year Note issued in April 2007 > Diversifies investor base by distributing to Agency buyers Participation by 54 investors MetLife Stable Value & Institutional Products Client Conference 77

78 Funding Agreement-Backed ABCP Program Overview > Positions MetLife with a significant opportunity in the $2 trillion money market 1 > Name of program: Beagle Funding LLC > Program s nominal shelf size: $10.0B > Expected ratings: A-1+ and P-1 by S&P and Moody s, respectively > Program incorporates various issuance options in both US and European commercial paper markets > CP is secured by a funding agreement issued by either MLIC or MICC Funding agreement is backed by the creditworthiness and liquidity of the entire MLIC or MICC general account portfolios > Program is expected to be operational in 2H 2007 > Named dealers: Morgan Stanley, Goldman Sachs, Merrill Lynch 1. Federal Reserve MetLife Stable Value & Institutional Products Client Conference 78

79 Capital Market Investment Products Focus on Investors UFS MetLife Stable Value & Institutional Products Client Conference 79

80 Capital Markets Investment Products Investor Focused > Over 350 separate institutional investors, including who s who of credit investors Total holdings of the largest investor: $750M Total holdings of the top ten investors: $5.9B > Virtually no hedge funds / fast money investors > Mutual interest in well behaved credit spreads while providing for appropriate market liquidity MetLife Stable Value & Institutional Products Client Conference 80

81 Capital Markets Investment Products Summary > Excellent Creditworthiness Low operational leverage/solid capital position Well-diversified businesses and strong operating cash flow Excellent and stable ratings Unparalleled brand recognition Attractive growth and profitability prospects > High Demand for MetLife, Inc. / MLIC Names in Capital Markets Each FA-backed note offering well-received Successful $1.25B Hybrid offering from MetLife, Inc. in Dec 2006 MET stock trading at or near all-time high > Capitalizes on GIC, ALM and Investments Expertise Long history in traditional GIC/pension market Leading industry risk management practices Strong ALM culture Investor perspective MetLife Stable Value & Institutional Products Client Conference 81

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83 Closing Remarks C. Robert Henrikson Chairman, President and CEO MetLife Stable Value & Institutional Products Client Conference 83

84 Trends Are Fueling Multiple Opportunities Unsustainable social programs Products to meet income & longevity protection needs Changes in pension legislation & accounting regulations Help employers manage balance sheet volatility Employer benefit budgets getting squeezed Offering employee paid benefits to attract and retain employees Increased awareness of these issues by governments, corporations & individuals Increasing call to action MetLife Stable Value & Institutional Products Client Conference 84

85 Relational Capital Creates Competitive Advantage Face-to-face distribution Better ability to understand & respond to customer needs Strong customer relationships Trusted advisor & ability to frame the solution Large customer base Data mining provides multiple sale opportunities Multiple distribution channels Ability to sell to customers however they like to buy MetLife Stable Value & Institutional Products Client Conference 85

86 Diverse and Growing Distribution: U.S. & International 403(b) Direct Marketing Bancassurance Independent Agents Client Growth Employer Direct Wire Houses Career Agents Banks MetLife Stable Value & Institutional Products Client Conference 86

87 Diversified Sources Results in Lower Earnings Volatility Operating Earnings 2006 International Auto & Home Reinsurance Retirement & Savings Individual Life Group Life Individual Annuities Non-Medical Health MetLife Stable Value & Institutional Products Client Conference 87

88 2007 Drivers - Institutional Product Grow insured dental Combine group & individual products Prepare for increased pension close-out business Distribution Leverage trends in employee-paid benefits Maximize national account franchise Increase market share with small & mid-size employers Expense Maintain or improve margins through disciplined risk selection, expense management/scale MetLife Stable Value & Institutional Products Client Conference 88

89 2007 Drivers - Individual Product > Rollout Lifetime Withdrawal Guarantee annuity rider > Continue product innovation and expand proprietary products in the independent channel > Improve speed to market Distribution > Create a more efficient wholesaling organization > Penetrate deeper in existing channels > Increase agent force productivity > Target campaigns for existing clients Expense > Drive down per policy annuity cost MetLife Stable Value & Institutional Products Client Conference 89

90 2007 Drivers - International Product > Continue development of an attractive portfolio of products > Focus on our major markets and major distribution partners Distribution > Develop Citi relationship > Add new bancassurance partners by leveraging Citi experience > Leverage wholesaling model and expand training Expense > Balance investments in growth with current earnings > Pursue opportunities for divestitures/consolidations/restructurings MetLife Stable Value & Institutional Products Client Conference 90

91 2007 Drivers - Auto & Home Product > Introduce GrandProtect in Institutional Distribution > Expand pricing sophistication - Metrix > Grow points of distribution > Increase producer productivity > Leverage multiple distribution channels Expense > Continue volatility management > Implement infrastructure changes MetLife Stable Value & Institutional Products Client Conference 91

92 MetLife Strengths Strong capital position Solid operating cash flow Excellent and stable ratings Leverage capacity Leading industry risk management practices Unparalleled brand recognition Magnet for outstanding talent MetLife Stable Value & Institutional Products Client Conference 92

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94 Appendix Reconciliations of Non-GAAP Financial Information

95 Explanatory Note on Non-GAAP Financial Information The historical and forward-looking financial information presented at this conference and contained in these presentations include performance measures which are based on methodologies other than Generally Accepted Accounting Principles ( GAAP ). MetLife analyzes its performance using so-called non-gaap measures, including operating earnings, operating earnings available to common shareholders, operating earnings available to common shareholders per diluted common share and operating return on common equity. MetLife believes these measures enhance the understanding and comparability of its performance by excluding net investment gains and losses, net of income tax, and adjustments related to net investment gains and losses, net of income tax, both of which can fluctuate significantly from period to period, the impact of the cumulative effect of a change in accounting, net of income tax, and discontinued operations other than discontinued real estate, net of income tax, thereby highlighting the results from operations and the underlying profitability drivers of the business. Operating earnings is defined as GAAP net income, excluding net investment gains and losses, net of income tax, adjustments related to net investment gains and losses, net of income tax, the impact of the cumulative effect of a change in accounting, net of income tax, and discontinued operations other than discontinued real estate, net of income tax. Scheduled settlement payments on derivative instruments not qualifying for hedge accounting treatment are included in operating earnings. Operating earnings available to common shareholders is defined as operating earnings less preferred stock dividends, which are recorded in Corporate & Other. All references in these slides and in the presentations made at this conference to operating earnings for 2005 and future years should be read as references to operating earnings available to common shareholders. Operating earnings available to common shareholders per diluted common share is calculated by dividing operating earnings available to common shareholders (as defined above) by the number of weighted average diluted common shares outstanding for the period indicated. All references in these slides and in the presentations made at this conference to operating earnings per share for 2005 and future years should be read as references to operating earnings available to common shareholders per diluted common share. MetLife Stable Value & Institutional Products Client Conference 95

96 Explanatory Note on Non-GAAP Financial Information (Continued) Operating return on common equity is calculated by dividing operating earnings available to common shareholders (as defined above) by average common equity for the period indicated, excluding accumulated other comprehensive income. For the historical periods presented, reconciliations of non-gaap measures used in the presentations made at this conference to the most directly comparable GAAP measures are included in the Appendix to the presentation materials and are on the Investor Relations portion of the Company s website ( Additional information about MetLife s historical financial results is available in the Company s Quarterly Financial Supplements which may be accessed through the Company s website. The non-gaap measures used in the presentations made at this conference should not be viewed as substitutes for the most directly comparable GAAP measures. In the presentations made at this conference, MetLife provides guidance on its future earnings, earnings per share and return on common equity on an operating, non-gaap basis. A reconciliation of these measures to the most directly comparable GAAP measures is not accessible on a forward-looking basis because MetLife believes it is not possible to provide a reliable forecast of net investment gains and losses, which can fluctuate significantly from period to period and may have a significant impact on GAAP net income. MetLife Stable Value & Institutional Products Client Conference 96

97 Reconciliation of Net Income Available to Common Shareholders to Operating Earnings Available to Common Shareholders Total Company QTD ($ Millions) Q06 1Q07 Total Company Net income available to common shareholders $ 1,605 $ 2,217 $ 2,758 $ 4,651 $ 6,159 $ 714 $ 983 Cumulative effect of a change in accounting Investment (gains) losses (158) (1,256) (2,003) Adjustments related to investment (gains) losses (146) (109) (34) 45 (74) (95) 26 Discontinued operations (5) (16) (10) (186) (60) (8) 15 Operating earnings available to common shareholders 1,738 2,238 2,642 3,254 4,022 1,026 1,082 IRS tax audit settlement - - (105) Premium tax liability - - (31) MetLife Foundation contribution Race conscious underwriting - (92) Merger of Mexican operations - (40) Change in reserve methodology - (22) New England Financial charge Asbestos-related litigation th quarter 2001 charges (20) September 11th 2001 tragedies (17) Sales practices liability (30) GenAm litigation Operating earnings available to common shareholders, as presented $ 1,888 $ 2,115 $ 2,538 $ 3,254 $ 4,022 $ 1,026 $ 1,082 MetLife Stable Value & Institutional Products Client Conference 97

98 Reconciliation of Net Income Available to Common Shareholders per Share to Operating Earnings Available to Common Shareholders per Share Total Company QTD Q06 1Q07 Total Company Net income available to common shareholders per diluted common share $ 2.20 $ 2.94 $ 3.65 $ 6.16 $ 7.99 $ 0.93 $ 1.28 Charge for conversion of securities Cumulative effect of a change in accounting Investment (gains) losses (0.21) (1.67) (2.60) Adjustments related to investment (gains) losses (0.20) (0.14) (0.04) 0.06 (0.10) (0.13) 0.03 Discontinued operations (0.01) (0.02) (0.01) (0.25) (0.08) (0.01) 0.02 Operating earnings available to common shareholders per diluted common share IRS tax audit settlement - - (0.14) Premium tax liability - - (0.04) MetLife Foundation contribution Race conscious underwriting - (0.13) Merger of Mexican operations - (0.05) Change in reserve methodology - (0.03) New England Financial charge Asbestos-related litigation th quarter 2001 charges (0.03) September 11th 2001 tragedies (0.02) Sales practices liability (0.04) GenAm litigation Operating earnings available to common shareholders per diluted common share, as presented $ 2.59 $ 2.83 $ 3.36 $ 4.30 $ 5.21 $ 1.33 $ 1.41 MetLife Stable Value & Institutional Products Client Conference 98

99 Reconciliation of Net Income Available to Common Shareholders to Operating Earnings Available to Common Shareholders ($ Millions) Institutional QTD Q06 1Q07 Net income available to common shareholders $ 759 $ 886 $ 1,267 $ 1,562 $ 1,167 $ 213 $ 356 Investment (gains) losses and related adjustments (78) (117) Operating earnings available to common shareholders $ 981 $ 1,051 $ 1,249 $ 1,445 $ 1,700 $ 416 $ 452 Group Life Net income available to common shareholders $ 169 $ 282 $ 373 $ 364 $ 345 Investment (gains) losses and related adjustments Operating earnings available to common shareholders $ 309 $ 350 $ 398 $ 400 $ 426 Retirement & Savings Net income available to common shareholders $ 448 $ 365 $ 684 $ 943 $ 544 Investment (gains) losses and related adjustments (100) (143) 411 Operating earnings available to common shareholders $ 499 $ 457 $ 624 $ 800 $ 955 Non-Medical Health & Other Net income available to common shareholders $ 169 $ 239 $ 210 $ 255 $ 278 Investment (gains) losses and related adjustments 31 5 (3) (10) 41 Operating earnings available to common shareholders $ 200 $ 244 $ 227 $ 245 $ 319 MetLife Stable Value & Institutional Products Client Conference 99

100 Reconciliation of Net Income Available to Common Shareholders to Operating Earnings Available to Common Shareholders ($ Millions) Individual QTD Q06 1Q07 Net income available to common shareholders $ 1,264 $ 304 $ 315 Investment (gains) losses and related adjustments Operating earnings available to common shareholders $ 1,543 $ 408 $ 319 MetLife Stable Value & Institutional Products Client Conference 100

101 Reconciliation of Net Income Available to Common Shareholders to Operating Earnings Available to Common Shareholders ($ Millions) Auto & Home QTD Q06 1Q07 Net income available to common shareholders $ 416 $ 91 $ 113 Investment (gains) losses and related adjustments (2) 2 (7) Operating earnings available to common shareholders $ 414 $ 93 $ 106 International QTD Q06 1Q07 Net income available to common shareholders $ 200 $ 104 $ 100 Investment (gains) losses and related adjustments 56 (20) (7) Discontinued operations (28) (8) 31 Operating earnings available to common shareholders $ 228 $ 76 $ 124 MetLife Stable Value & Institutional Products Client Conference 101