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MetLife To Sell U.K. Annuities Business?

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InsuranceNewsNet

MetLife is preparing to sell its U.K. bulk annuities business, according to news reports.

On Feb. 20, Reuters reported that MetLife has hired investment bankers at Citicorp to sell the business unit. MetLife has not responded, saying it “does not comment on market rumors or speculation.” The company is reportedly speaking to several prospective buyers already. MetLife shares were down 2.5 percent in late-day trading Thursday on the New York Stock Exchange, though shares are up more than 6 percent since the start of the year.

In its fourth quarter earnings report, released Feb. 13, MetLife noted that while its business from Europe, the Middle East and Africa (EMEA) grew last year, revenues were negatively impacted “by the company’s exit from fixed annuities in the U.K.”

Annuities have been a big part of MetLife’s business, but strategy has changed as the company seeks to move away from less profitable products. “We are executing on our strategy, including shifting our business mix toward less capital-intensive products,” Steven A. Kandarian, chairman, president and chief executive officer of MetLife, said in the earnings release.

The company remains focused on growth in Central Europe and emerging markets, according to the statement. MetLife’s operating earnings in the fourth quarter for the EMEA region were $59 million, up 26 percent (34 percent after adjustments for currency rate fluctuations), reflecting business growth in several countries, the company said.

Globally, fourth quarter 2012 variable annuity sales were $3.6 billion, down 51 percent from the same period a year earlier, MetLife reported. For the full year 2012, variable annuity sales were $17.7 billion – in line with the company’s forecast of $17.5-$18.5 billion, the company said in its earnings release.

Total sales for the EMEA region increased 14 percent “due to growth in the Gulf, Turkey and Russia and despite the challenging economic environment in Western Europe,” the company said.

New York-based MetLife is the largest insurer in the U.S., with a market capitalization of more than $40 billion.

© Entire contents copyright 2013 by InsuranceNewsNet.com, Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com. Contact the editor at editor@insurancenewsnet.com with any comments or questions.

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