MetLife intends to drive profitable growth in
emerging markets and refocus the US business as part of initiatives
to increase shareholder value.
MetLife CEO, chairman and president Steven A.
Kandarian and other senior figures announced an array of
initiatives aimed at attaining a set of key goals by 2016.
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By 2016, MetLife aims to:
- increase its return on
equity to 12-14%, up from 10.3% in 2011 driven by higher operating
earnings. - leverage its scale to
improve value and achieve $600m in net pre-tax expense
savings - shift its
product mix towards protection products and away from more
capital-intensive products, in order to generate more predictable
operating earnings and cash flows; - and to boost income
from emerging markets to 20% or more of all earnings.
The group intends to use its position and scale
as a global insurer to make $1bn in pre-tax efficiency savings by
2016, with $400m being reinvested in capabilities and technology
and a further $600m going to improve earnings.
It also hopes that by reducing sales of capital
intensive products such as variable annuities, and shifting towards
protection products such as accident, health and life insurance, it
can gain more predictable earnings to improve its risk profile and
increase cash flow.
Global footprint
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By GlobalDataKandarian said: “Our strategic focus builds on
our strengths, leverages our global footprint and capitalises on
trends and opportunities in key markets to drive shareholder
value.
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.”
MetLife has identified four “cornerstone
initiatives” that it hopes will help it achieve its stated
aims.
In the US, MetLife will focus on growing
voluntary and worksite benefits and direct businesses.
To better balance growth, profitability and
risk, MetLife will also reduce sales of capital intensive products
such as variable annuities, and shifting towards protection
products such as accident, health and life insurance.
Meanwhile, in other markets it will use its
employee benefits expertise to grow business to grow its global
benefits business through multinational and expatriate
solutions.
Expanding middle class
In emerging markets, MetLife will focus
on the expanding middle class, which it says can drive
demand for its products.
Finally, MetLife said it will take a more
“customer-centric” approach, with a “better understanding of
customers’ needs and expectations” leading to higher organic growth
rates, better retention and lower costs.
Kandarian explained: “By operating as a global
company and leveraging our scale to create efficiencies, we are
building a strong foundation for creating long-term, sustained
value for both customers and shareholders.”
