We have looked at MetLife’s (MET) US operations in the last few articles. We’ll move on to MetLife’s Latin America operations, where the company operates in seven countries: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, and Uruguay, with the larger operations in Mexico, Chile, and Argentina.
The company’s key products include accident and health insurance, credit insurance, and savings-oriented pension products.
MetLife is the largest player in the region, with more than $5.5 billion in gross written premiums in 2013, a market leader in several countries. Latin America is a key part of the company’s emerging market story.
Other US-based insurers operating in this region include ACE (ACE) and AIG (AIG), as well as some insurers included in the iShares US Financials ETF (IYF) and the Financial Select Sector SPDR ETF (XLF), along with several other foreign insurers.
Strategy in Latin America
MetLife’s strategy for the region is to grow retail as well as its group business. They capitalize on the typical emerging market trends, such as the growing middle class and affluent class, as well as growing corporate needs for providing employee benefits.
MetLife’s recent acquisition of ProVida, the pension fund administrator in Chile, should help it to increase penetration in the mass market, which we’ll explore in a later article.
In 2013, sales from life insurance, retirement products, and accident and health insurance made up the bulk of the segment’s sales. From the distribution channel point of view, retail face-to-face agents drive sales and contributed over half the sales in 2013. MetLife plans to further develop its agency channels.
While Latin America provides significant scope of growth, headwinds may arise from exchange rate movements and policies undertaken by regulatory bodies, such as the introduction of Solvency II regime in Mexico.
Like Latin America, MetLife is also focusing on developing its Asia operations. We’ll take a closer look at these operations in the next article.