May 3 MetLife Inc, the largest U.S. life
insurer, reported a 62.6 percent fall in quarterly profit, hurt
by derivative losses.
The company's net profit fell to $820 million, or 75 cents
per share, in the first quarter ended March 31, from $2.20
billion, or $1.98 per share, a year earlier.
The insurer recorded $602 million in net derivative losses
in the quarter, reflecting changes in equity markets and
interest rates. In the year-ago quarter, the company recorded
derivative gains of $868 million.
MetLife's operating income, which excludes investment and
derivative gains or losses, rose to $1.41 per share from $1.20
The insurer uses its derivatives program to hedge against
risks such as volatile currency exchange rates, equities markets
and interest rate changes.
Operating income benefited in part by net investment income,
which rose 14 percent to $5.20 billion.
Insurers have benefited from higher interest rates, which
were last raised in December and March - a 0.25 percentage point
uptick in each case. The U.S. Federal Reserve has indicated more
interest rate hikes this year.
MetLife's operating costs came in at $14.91 billion, barely
changed from a year ago.
Through its cost-cutting plan, MetLife aims to save a gross
$1 billion a year, partly through job cuts.
The company, which has been streamlining its businesses in
response to a strict regulatory environment, plans to spin off
its U.S. retail business, Brighthouse Financial, this year.
Total operating revenue rose 1.6 percent to $16.88 billion.
(Reporting by Nikhil Subba in Bengaluru; Editing by Maju