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MetLife profit falls 70 percent on higher claims

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MetLife Inc., a leading life insurance company, says its profit tumbled 70 percent in the fourth quarter as it paid out more in claims and benefits.

The company also confirmed Tuesday that it’s in talks with American International Group Inc. about buying the American Life Insurance Company, a unit of AIG.

Rumors surfaced last month about a possible MetLife deal for the AIG unit, which is an international life and health insurance business that operates in more than 50 countries.

MetLife’s former CEO, Robert H. Benmosche, became AIG’s CEO in August.

For the final three months of the year, MetLife earned $289 million in the last three months of the year, or 35 cents per share. That compares with $954 million, or $1.20 per share, in the same period a year earlier.

Excluding investment gains and losses, operating income rose to $793 million, or 96 cents per share, from $132 million, or 17 cents per share in the year-earlier period. Results exceeded Wall Street’s expectations for earnings of 95 cents per share, according to a poll by Thomson Reuters.

Like most insurers, MetLife emphasizes operating income because it excludes investment gains and losses and is considered more reflective of the company’s performance.

Revenue fell nearly 12 percent to $12.34 billion. Paid claims and benefits rose to $7.64 billion from $7.01 billion.

For the full year, net loss available to common shareholders was $2.37 billion, or $2.89 per share, from a profit of $3.08 billion, or $4.14 per share, in 2008. Operating income fell 12 percent to $2.37 billion, or $2.87 per share, from $2.7 billion, or $3.62 per share.

In after-hours trading, shares shed 23 cents to $36.14. The stock rose 43 cents to $36.37 in the regular session.

© 2010 Associated Press. Displayed by permission. All rights reserved.

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