[November 28, 2012]

A.M. Best Affirms Ratings of MetLife, Inc. and Its Subsidiaries

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of the primary life/health insurance subsidiaries of MetLife, Inc. (MetLife) (New York, NY) [NYSE: MET]. Concurrently, A.M. Best has affirmed the ICR of "a-" as well as all existing debt ratings of MetLife.

A.M. Best also has affirmed the FSR of A (Excellent) and ICRs of "a+" of the property/casualty companies consisting of Metropolitan Property and Casualty Insurance Company (Warwick, RI) and its eight reinsured subsidiaries. The outlook for all ratings is stable. (See link below for a detailed listing of the companies and ratings.)

The rating affirmations reflect MetLife's diverse business mix, leading market position in its core business lines, strong brand recognition, favorable operating results and significant operating scale. These strengths are enhanced by proactive de-risking strategies as the company looks to focus on less capital intensive and market sensitive products. MetLife also has benefited from significant gains on interest rate hedges, which have helped to reduce its earnings volatility in the current low interest rate environment.

Through its broad and diversified distribution channels, MetLife has the scale and distribution capabilities necessary to maintain its leadership positions in a number of product lines. Moreover, A.M. Best recognizes the strong diversity of earnings and revenue generated by its expanded international operation. In addition, MetLife's ratings reflect some improvement in its financial leverage and interest coverage ratios. MetLife maintains a very strong liquidity position at the holding company and has the resources to fund upcoming debt maturities without accessing the capital markets. Additionally, MetLife has recently issued debt at very favorable rates, taking full advantage of the current historically low interest rate environment.

Partially offsetting these positive rating factors is MetLife's overall risk appetite and risk-adjusted capital position (as measured by Best's Capital Adequacy Ratio), which is viewed as somewhat low for its current rating lvel. A.M. Best continues to have concerns regarding the company's high exposure to real estate linked assets, primarily from its large commercial mortgage loan portfolio and real estate holdings as well as its overall higher level of below investment grade bonds relative to the industry. A.M. Best believes MetLife's future earnings will be pressured as the low interest rate environment continues to strain its interest sensitive product margins and further spread compression. A.M. Best believes MetLife's significant block of variable annuity business with embedded guarantees may lead to earnings volatility as interest rates and equity markets change. However, A.M. Best notes that MetLife has purposely curtailed new business growth in this segment and introduced products with protected growth strategies to mitigate this risk on new business.

The ratings for the property/casualty unit recognize its strong capitalization, consistent trend of favorable operating performance, successful multiple-channel distribution network and extensive market expertise.

Additional positive rating factors include the property/casualty unit's geographic diversification and the marketing advantage it derives from the established brand name recognition of MetLife. Furthermore, the ratings acknowledge management's focused operating strategy, extensive product knowledge and multiple distribution channels. The companies have consistently generated capital through disciplined underwriting, solid pre-tax operating income and strong total investment returns. The ratings also recognize the financial strength and support provided by MetLife.

Partially offsetting these positive rating factors are the property/casualty unit's moderately elevated underwriting leverage, a dividend policy that constrains its surplus growth and exposure to severe weather-related events.

Positive rating actions could occur following a significant improvement in operating performance or change in business profile that results in a proportionally larger contribution by the property/casualty operation to the overall earnings of MetLife. Negative rating actions could occur following a sudden, unexpected and material decline in the company's risk-adjusted capitalization, a sustained deterioration in its operating performance or diminished liquidity measures.

Key rating drivers that may lead to positive rating actions on the life/health subsidiaries include a consistent ability to outperform peers, diminished risk profile and capital improvement at the operating company. Key rating drivers that may lead to negative rating actions include a sustained material deterioration in operating performance, material impairments or realized losses in the investment portfolio or diminished key capital, leverage, coverage and liquidity ratios.

For a complete list of MetLife, Inc. and its subsidiaries' FSRs, ICRs and debt ratings, please www.ambest.com/press/112808metlife.pdf.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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