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Annual Review 2005
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An Extraordinary Year
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Business Profile
  • Manages $300 billion investment portfolio for MetLife
  • Strong asset-liability management focus
  • Diversified portfolio
  • Thorough risk management
  • Global investment capability and presence
     
    2005 Highlights
  • Generated approximately $15 billion in net investment income
  • Record production of new commercial and agricultural mortgage loans
  • Historic lows in mortgage credit losses and delinquencies
     
    MetLife Investments is a premier insurance asset manager with breadth across various asset sectors and global markets, and strong asset-liability management capabilities. With a $300 billion combined domestic and international general account portfolio and a multi-billion dollar annual cash flow, Investments is an important contributor to MetLife’s financial performance. 2005 was an excellent year as measured by net investment income, total rate of return, asset production and default rates.
     
    As is true for other parts of MetLife, the Travelers integration was a key focus in 2005. Investments successfully absorbed Travelers' $55 billion portfolio into its own, rebalancing the portfolio to conform to MetLife's targeted allocations and risk profile. The combined portfolio is now managed as one portfolio on one accounting and asset management system.
     
    The primary objective of Investments is to maximize MetLife's long-term economic value by investing in assets that support the company's liabilities and produce a consistent stream of operating earnings. In 2005, we generated approximately $15 billion of net investment income, while adhering to core investment principles of rigorous asset-liability management, portfolio diversification and thorough risk management.
     
    Investments partners extensively with the company's lines of business to accomplish corporate goals. Its knowledgeable and experienced team of professionals designs and implements investment plans for each of MetLife's products, which are constructed to ensure MetLife's ability to deliver expected returns to policyholders and shareholders.
     
    MetLife Investments actively manages a broad array of asset classes, including public and private bonds, real estate and agricultural mortgages and bonds backed by consumer loans. In 2005, Investments increased the credit quality of the bond portfolio, reduced exposure in certain industries and defensively positioned the portfolio for a potential residential housing bubble. In addition, Investments took advantage of the strong market demand for commercial real estate in Manhattan by selling two large office buildings for record prices—One Madison Avenue and 200 Park Avenue. These sales realized significant capital gains and also helped to further diversify the real estate equity portfolio. Investments additionally instituted a number of hedging strategies in 2005 to protect against a challenging interest rate environment.
     
    Going forward, the department's strategy is to maintain its investment risk profile, continue to deliver superior financial results and further develop and expand into asset classes and businesses with high return potential.
     
    Investments will leverage its expertise internationally and continue to preserve its flexibility to adapt to changing markets and economic trends across the globe.
    Charts/Graphs
    Investments Pie Chart