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Analyzing the Performance of MetLife’s EMEA Division

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Updated

Marginal decline

MetLife’s (MET) EMEA (Europe, the Middle East, and Africa) division generated total operating revenue of $2.10 billion in the first nine months of 2017 compared to $2.11 billion in the first nine months of 2016. 

The division’s total operating revenue comprises net investment income, premiums, policy fees, and other revenues.

The EMEA division garnered premiums of $1.53 billion in the first nine months of 2017 compared to $1.51 billion in the first nine months of 2016. Foreign exchange fluctuations negatively affected its operating earnings in the first nine months of 2017 compared to the first nine months of 2016. 

The division saw a fall in its other revenues from $56 million in the first nine months of 2016 to $43 million in the first nine months of 2017.

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Impact on operating earnings

Positive momentum in most European markets positively impacted the EMEA division’s operating earnings in the first nine months of 2017 compared to the first nine months of 2016. This momentum was also seen in Turkey’s credit life and accident and health businesses. However, the momentum was counteracted by unfavorable momentum in premiums related to the Gulf’s employee benefits business.

The EMEA division saw a fall in its total operating expenses from $1.9 billion in the first nine months of 2016 to $1.8 billion in the first nine months of 2017. The business garnered operating earnings of $218 million in the first nine months of 2017 compared to $201 million in the first nine months of 2016.

MetLife has a total debt-to-enterprise value ratio of 0.32x for the last 12 months. Its peers (XLF) Allstate Corporation (ALL), CNO Financial Group (CNO), and Reinsurance Group of America (RGA) have total debt-to-enterprise value ratios of 0.15x, 0.53x, and 0.28x, respectively, on a trailing-12-month basis.

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