Insurer MetLife’s quarterly profit beats on higher investment gains

MetLife Inc’s (MET.N) fourth-quarter profit rose nearly 7% to surpass Wall Street estimates on Wednesday, as strong investment gains cushioned the hit from higher pandemic-related claims in some parts of its business.

The U.S. insurer reported an adjusted profit of $2.17 per share, compared with $2.03 a year earlier. Analysts on average had expected $1.47, according to Refinitiv data.

New York-based MetLife’s net investment income jumped 7% on an adjusted basis to $5.2 billion, bolstered by higher returns from its private equity investments.

Insurance providers worldwide have recorded rising investment returns over the past year as markets continue to rebound from a pandemic-induced slump, helping offset a jump in claim payouts related to the coronavirus crisis.

Vaccine rollouts were expected to ease the burden for insurers, but the highly infectious Delta variant ratcheted up COVID-related claims to $5.5 billion in the first nine months of last year, far higher than the total for all of 2020. read more

Insurers reported higher COVID-related fatalities last year than in 2020, when the deaths were mainly among older people who typically do not take out life insurance.

The company’s group benefits unit saw a 95% slump in earnings in the quarter, hurt by unfavorable group life underwriting as a result of COVID-19.

Adjusted earnings for the insurer’s U.S. business fell 37% to $640 million from unfavorable underwriting, while Asia posted a 19% rise thanks to higher investment income.

For Latin America, adjusted earnings surged to $125 million from $14 million in the same quarter a year earlier due to lower COVID-related claims.

MetLife logged a $196 million loss from net derivatives, driven by forex rate changes and stronger equity markets. Such derivatives are held to hedge against market volatility. Reporting by Sohini Podder in Bengaluru; Editing by Devika Syamnath

This article was originally published by Reuters.