Growing revenue and earnings
With close to 20% contribution to operating earnings of the group, the Asia business segment remains one of the key profit drivers of MetLife (MET). The group has been present in the region for ~60 years and operates in nine countries, including Japan, Korea, China, and India.
Japan and Korea
Japan contributes over 60% and Korea contributes another 17% to MetLife’s sales in Asia. However, management is targeting Japan to make up 75–80%, and Korea to make up 10–15% of the company’s Asia operating income in 2016.
In Japan, MetLife is well positioned as the market leader in accident and health products, contributing more than half of its top line as well as operating earnings, while life, retirement, and group insurance products also figure in the company’s product mix.
MetLife forecasts higher growth in each region than its competitors. Within the group, this segment has seen higher growth rate on a constant currency basis. However, weakness in currencies in these regions can have a negative impact when profits are converted into US dollars.
The growth in operating earnings comprised more than revenue growth, as shown above, which could be attributed to successful expense management undertaken by the company.
We’ll discuss Asia’s Emerging Markets businesses in the next article.