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Total Operating Revenue Rises for MetLife’s US Division

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Premiums

MetLife’s (MET) US division’s total operating revenue rose from $7.9 billion in 3Q16 to $9.0 billion in 3Q17, mainly due to premiums, which rose to $6.9 billion from $5.9 billion. All of the division’s components saw higher operating revenue in 3Q17.

Between 3Q16 and 3Q17, the US division’s net investment income rose to $1.60 billion from $1.59 billion, mainly due to higher average invested assets. Whereas MetLife’s beta is 1.5, peers (XLF) CNO Financial Group (CNO), Arch Capital Group (ACGL), and Reinsurance Group of America (RGA) have betas of 0.89, 0.41, and 0.78, respectively.

Expenses

The US division’s total operating expenses rose to $8.2 billion in 3Q17 from $7.1 billion in 3Q16, primarily due to higher policyholder benefits, which rose to $6.9 billion from $5.8 billion. The division’s operating earnings fell marginally, from $552 million in 3Q16 to $546 million in 3Q17. In the first three quarters of 2017, the division had operating earnings of $1.5 billion and operating revenue of $24.2 billion.

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