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Running head: METROPOLITAN LIFE INSURANCE 1 Metropolitan Life Insurance Company Student’s Name: Institutional Affiliation:
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METROPOLITAN LIFE INSURANCE COMPANY 2 Metropolitan Life Insurance Company Executive Summary This report evaluates the Metropolitan Life Insurance Company. It provides a brief history of the company from its foundation in 1863 as a National Union Life and Limb Insurance by a group of businesspeople who invested about $100,000 to start the corporation to its current state. The report also reveals the MetLife’s business strategies, which include diversifying its operations. For instance, the company has $516.3 billion in managed assets and another $558.9 billion in combined management assets. It also engages in mergers and acquisition and franchising to penetrate the emerging markets of Asia, Latin America, and Africa. In 2016, the company separated from its U.S. retail segment through a spinoff as a strategy to increase its profitability. The spinoff included its General American Life Insurance Company, MetLife Insurance Company USA, Metropolitan Tower Life Insurance Company, and other units. The report also explains the reasons for MetLife’s decision to separate from its U.S. retail division. MetLife is pursuing a separation to assist it shed off a business unit that has always had unstable financial results. Currently, MetLife’s U.S. retail segment is classified under a systematically important financial institution (SIFI), and risks increased capital requirements, which could put it at a disadvantage to its competitors. Lastly, the report discusses the future of the company after the separation. MetLife believes that the separation would provide it with the opportunity to focus more intently on its group segment in the U.S., where it has been the market leader.
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METROPOLITAN LIFE INSURANCE COMPANY 3 Introduction Metropolitan Life Insurance Company (MetLife, Inc.) was founded by a few businesspeople in New York City in 1863 as a National Union Life and Limb Insurance (SuccessStory, n.d.). These entrepreneurs invested about $100,000 to start the corporation. The primary objective of the company was to insure soldiers who had registered to take part in the Civil War. It was renamed MetLife Insurance Company on 24 March 1868 after becoming fully immersed in the Life Insurance business (SuccessStory, n.d). By 1930, the company had insured every fifth man, child, and woman in the U.S. and Canada. MetLife started to diversify its portfolio in the 1930s by reducing the proportion of individual mortgages in favor of loan for commercial real estate, investments in government securities, and public utility bonds. The company’s war bonds exceeded 51 percent of its total assets (SuccessStory, n.d.). In 2004, MetLife had $350 billion in asset under management, $2.5 trillion in policies, more than 12 million clients in the U.S., eight million customers outside the U.S., and a net income of $2.2 billion (Lazarus, 2004). The company started to market its group insurance products to institutions and employers during the postwar era. By 1979, MetLife had segmented
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  • Spring '16
  • dennis

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