AM Best Affirms Credit Ratings of MetLife, Inc. and Its Life/Health Subsidiaries
- AM Best has affirmed MetLife, Inc.'s Financial Strength Rating (FSR) of A+ (Superior) and Long-Term Issuer Credit Ratings (Long-Term ICR) of 'aa-' (Superior) with a stable outlook.
- MetLife's strong balance sheet strength is supported by its consolidated holding company view of capital adequacy, financial flexibility, and liquidity of its ultimate parent (MetLife, Inc.).
- The organization has a strong and defensible market position in its core lines of business and diverse product offerings in various geographic markets.
- MetLife has a history of generating revenue growth and consistently positive operating metrics on a statutory and GAAP basis.
- The ratings also reflect the organization's focus on enhancing its product offerings, concentration on higher margin product lines with steadier returns, and lower expenses.
- None.
Insights
The affirmation of MetLife's Financial Strength Rating (FSR) and Long-Term Issuer Credit Ratings (Long-Term ICR) by AM Best signifies a strong vote of confidence in the company's financial stability and resilience. This assessment is critical for stakeholders, as it underscores MetLife's robust balance sheet, strong operating performance and sound enterprise risk management practices. The stable outlook attached to these ratings suggests that MetLife is expected to maintain its financial health over the medium term, which is reassuring for investors and policyholders alike.
From a financial analyst's perspective, MetLife's strategic focus on higher margin product lines and efforts to reduce liability risk are positive indicators of prudent financial management. The diversification of earnings geographically and across business lines reduces the company's exposure to market-specific risks and enhances its ability to withstand economic fluctuations. Furthermore, the appropriate levels of financial leverage and interest coverage ratios align with industry standards, supporting the company's creditworthiness.
The ratings affirmation reflects MetLife's strong market position and the diversity of its product offerings. A market research analyst would note that MetLife's defensible positions in core lines of business, particularly in the United States, Asia, Latin America and the EMEA region, provide a competitive edge and facilitate growth opportunities. The company's well-diversified earnings streams, stemming from its geographic reach and distribution channels, suggest resilience against market-specific downturns and the ability to capitalize on regional growth trends.
Moreover, the focus on product enhancement and concentration on higher margin lines with steadier returns indicates a strategic shift towards optimizing the product mix to meet changing consumer demands and market conditions. This adaptability is crucial in the dynamic insurance industry where consumer preferences and regulatory landscapes are constantly evolving.
AM Best's recognition of MetLife's appropriate enterprise risk management (ERM) practices highlights the company's commitment to identifying, assessing and managing risks effectively. A risk management consultant would emphasize the importance of MetLife's ongoing improvements to its ERM framework, which includes capital modeling and stress testing. These practices are essential for anticipating potential financial challenges and ensuring that the company has adequate capital buffers to absorb shocks.
The mention of risks associated with mortgage concentrations is a reminder of the need for continuous monitoring of credit exposures. The consultant would advocate for a proactive approach to managing these risks, especially given the potential for market volatility and changing interest rate environments. MetLife's historical trend towards reduced liability risk, particularly related to equity and interest rate risk, is indicative of a strategic de-risking effort which aligns with best practices in risk management.
The ratings reflect MetLife’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, very favorable business profile and appropriate enterprise risk management (ERM).
MetLife’s strong balance sheet strength assessment is supported by its consolidated holding company view of capital adequacy that is enhanced by the financial flexibility and the liquidity of its ultimate parent (MetLife, Inc.), which historically has maintained steady levels of excess liquidity. Additionally, there has been a long-term trend toward reduced liability risk on MetLife’s balance sheet, related to equity and interest rate risk as MetLife’s product portfolio changes over time. MetLife’s financial leverage and interest coverage is at appropriate levels for the ratings. There are some risks with mortgage concentrations and AM Best will continue to monitor the group’s exposure in this regard.
The group has a history of generating revenue growth and consistently positive operating metrics on a statutory and GAAP basis. Earnings are well-diversified by geography, business line and distribution channel. Earnings volatility is lower within its group benefits segment. AM Best views the group’s operating performance as strong, with its focus on enhancing its product offerings, concentration on higher margin product lines with steadier returns and lower expenses. AM Best views the group’s ERM as appropriate, as it continues to focus on improving its overall program, capital modeling and stress testing.
The ratings also reflect the organization’s strong and defensible market positions in many of its core lines of business and the diversity in its product offerings and geographic markets in
The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) have been affirmed with stable outlooks for the following subsidiaries of MetLife, Inc.:
- Delaware American Life Insurance Company
- Metropolitan Life Insurance Company
- Metropolitan Tower Life Insurance Company
- SafeGuard Health Plans, Inc. (TX)
- SafeGuard Health Plans, Inc. (FL)
- SafeGuard Health Plans, Inc. (CA)
- MetLife Global Benefits, Ltd.
- Metropolitan General Insurance Company
The following Short-Term IRs have been affirmed:
MetLife Funding, Inc.—
-- AMB-1+ (Strongest) on commercial paper
MetLife, Inc.—
-- AMB-1 (Outstanding) on commercial paper
The following Long-Term IRs have been affirmed with a stable outlook:
MetLife, Inc.—
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “a-” (Excellent) on
-- “bbb” (Good) on
-- “bbb” (Good) on
-- “bbb” (Good) on
-- “bbb” (Good) on
-- “bbb” (Good) on
-- “bbb” (Good) on
-- “bbb” (Good) on
MetLife Capital Trust IV—
-- “bbb” (Good) on
Metropolitan Life Insurance Company—
-- “a” (Excellent) on
-- “a” (Excellent) on
Metropolitan Life Global Funding I— “aa-” (Superior) program rating
-- “aa-” (Superior) on all outstanding notes issued under the program
The following indicative Long-Term IRs have been affirmed stable outlooks:
MetLife, Inc. —
-- “a-” (Excellent) on senior unsecured debt
-- “bbb+” (Good) on subordinated debt
-- “bbb” (Good) on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in
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Louis Silvers
Senior Financial Analyst
+1 908 882 2316
louis.silvers@ambest.com
Jacqalene Lentz
Director
+1 908 882 2011
jacqalene.lentz@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
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