MetLife Inc, the largest US life insurer, reported a quarterly profit that widely missed analysts' estimates, largely due to weaker underwriting and tax-related adjustment in two of its largest markets. While weaker underwriting weighed on operating earnings from the Americas, the company's decision to reduce sale of yen-denominated products and tax-related adjustments hit earnings from Japan.
MetLife's Americas business, which consists of its retail and Latin America units, is the company's biggest, followed by its Asia business that includes Japan. The company, which plans to separate a substantial portion of its US Retail business, said a review of its variable annuity business during the latest quarter led to a non-cash charge of about $2 billion.
The company lost $2.1 billion from its derivatives program in the latest quarter, compared with $912 million a year earlier. The insurer uses derivatives to lower risks stemming from interest rates, currency exchange rates and equities.
The company's net income fell 94 percent to $64 million, or 6 cents per share, in the second quarter ended June 30.
Total operating earnings for the Americas fell 42 percent to $835 million, whereas operating earnings for Asia fell 39 percent to $259 million.