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| Dear Associates: |
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| Last year was an excellent one for MetLife as well as a pivotal year for me. After assuming the role of Chairman in April, I spent a good deal of time listening to, and learning from, a great number of our stakeholders in the U.S. and abroad: customers, employees, analysts, shareholders and fellow Board members, to cite just a few. Although I have more than 35 years’ tenure with MetLife, I nonetheless have found these past months enormously informative and enriching. |
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| One constant I’ve experienced is a strong feeling of excitement by all who touch MetLife—the feeling that we are on the verge of a new era in our evolution, intently focused on growth. I am more confident than ever about our opportunities. Entrenched firmly in the giant league of financial services companies, MetLife is the leading life insurer in the United States. At number 35 in the FORTUNE 500®, we are a true powerhouse in the industry. With the rapid integration of the Travelers/CitiInsurance business acquired last year, we are fast becoming a global enterprise. |
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| As you read through this annual review, I'm confident you will be impressed by the results across our businesses and from our key enterprise initiatives. My overall message is straightforward: building from a position of strength and a consistent growth record, MetLife continues to have enormous opportunities to extend our leadership in the marketplace. |
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| There’s no doubt that MetLife had a strong 2006: record financial results, including continued return on equity expansion, increased top and bottom line results, a 10% growth in total assets compared to the year ended December 31, 2005 and, of course, the historic sale of Peter Cooper Village and Stuyvesant Town—the largest real estate sale in U.S. history—for $5.4 billion. |
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Our performance has resulted in a strong return to the shareholder, with MetLife outperforming both the S&P 500 and the S&P
Insurance Index. |
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Multiple earnings sources continue to provide MetLife with an important competitive advantage, allowing us to remain financially strong and deliver good results, despite market challenges that may arise from time to time in any one of our businesses. A tradition of strong underwriting, best-in-class products and services, depth and breadth of excellent customer relationships and attention to expense management are hallmarks of how we manage MetLife for the
long-term. |
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| Recognition of MetLife’s financial strength improved over 2005, further enhancing our flexibility. As a result of the successful Travelers integration and the reduction in leverage, Moody’s and Standard & Poor’s removed their negative outlook on the already strong financial strength ratings for Metropolitan Life Insurance Company. During the year, we also increased the common stock dividend by 13%. |
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| CREATING A NEW GENERATION OF SOLUTIONS GLOBALLY |
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| Focusing on our core competencies will enable us to meet customer needs around the world. While needs vary across markets and geographies, it is also true that there are commonalities: the need all people have to provide for loved ones in the event of death, the need to protect against disability or to plan for secure “golden years”—these are universal. They are the uncertainties—the “ifs” in life—and as an insurer, we are best positioned to help customers mitigate them. |
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| With the Travelers integration complete, last year was a transformational one for building our global growth strategy. During my first international tours as Chairman, I had the pleasure of visiting our operations in East Asia and India. These visits affirmed my belief that we have enormous opportunities in these regions, and the talent, skills and competencies to leverage our leadership worldwide. |
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| In 2006, we announced plans to open the Global Operations Support Center in India, our first MetLife-owned and operated service facility offshore, to provide select services to our lines of businesses around the clock. Identifying additional ways to leverage our core competencies around the world, we prepared to enter the United Kingdom pension closeout business, tapping into a market undergoing significant transformation and for which we are uniquely suited as a leader in the U.S. pension business. |
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We also have begun to instill in our company a more rigorous and consistent global mindset, incorporating principles of cultural understanding and strategy development into our training and performance management programs, as well as in our
everyday dialogue. |
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| At MetLife, when we talk about “creating a new generation of solutions,” one of the greatest areas of opportunity lies in the retirement arena. Given an aging population, MetLife is now facing a tremendous challenge to develop innovative solutions that can help people take care of the risks that they simply can’t self-insure. |
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| Thought leadership was a major focus this year as many of my colleagues and I sought to raise awareness and visibility of MetLife as a leader in the U.S. retirement market. We participated in a number of industry events, including the Longevity Summit in Washington, D.C. We also provided expert support to the government through testimony to the Senate Committee on Aging. |
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| Other opportunities for MetLife lie in another area in which we are already a powerhouse: voluntary benefits. As the employee benefits framework continues to shift from employer-financed to employee-paid, we are well prepared to deliver innovative solutions to both our corporate and individual customers. |
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| CONTINUED FOCUS ON THE FUNDAMENTALS |
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| As we pursued business growth in 2006, we also continued to strengthen customer protection—the very backbone of the company.
A major goal during the year was to ensure that compliance, ethics and risk management are best-in-class core competencies for MetLife. We also implemented a new global corporate oversight function in key actuarial processes to confirm appropriateness and transparency of pricing, understanding of major risks associated with new product development, and consistency of financial reporting processes. In Investments, we researched, analyzed and implemented a new risk limit system to deliver strong returns while maintaining appropriate risk to the enterprise. |
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| MetLife’s vast distribution power continues to be at the heart of our ability to introduce new customers to MetLife. Indeed, distribution has increased eightfold since MetLife went public almost seven years ago. With 38 sales forces within MetLife alone, we have a unique and distinct advantage to tap opportunities for profitable customer growth. |
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| The MetLife brand, already one of our greatest assets, was further enhanced in 2006 as the company launched a refreshed brand platform and new advertising campaign. Highlighting our ability to provide “guarantees for the if in life,” the campaign focuses on how MetLife helps customers manage the uncertainties in life and, in an era when they are shouldering more of a financial burden than ever before, create a personal safety net. To further establish a consistent brand platform with a common look and feel, we recently concluded a global agreement with United Media for use of Snoopy and the PEANUTS® characters throughout the world. |
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| We are building a company poised for the future. With our focus on diversity and inclusiveness, we are a magnet for the outstanding talent that will drive MetLife’s success in the years ahead. |
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| Without a doubt, today MetLife is at an exciting juncture in its history. I want to thank my predecessor, Bob Benmosche, for his leadership, vision and commitment to strengthening and growing our enterprise. |
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| I especially want to thank all MetLife associates for a terrific 2006. After all, you are MetLife to our customers. And, as I’ve said before, it’s our customers who will define success in the years ahead. |
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| Sincerely, |
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Chairman of the Board, President and Chief Executive Officer
MetLife, Inc. |
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| March 2007 |
