© Reuters. FILE PHOTO: Signage is seen on the MetLife Inc building in Manhattan, New York, U.S., December 7, 2021. REUTERS/Andrew Kelly/File Photo
(Reuters) -MetLife Inc reported a drop in first-quarter profit on Wednesday, as growing economic uncertainty hurt the insurer’s adjusted premiums, fees and other revenues.
Adjusted premiums, fees and other revenues fell 8% due to declines in the United States, Asia and EMEA regions, while that excluding pension risk transfers (PRT) rose 3%.
Net investment income rose 8% to $4.64 billion despite a quarter marred by a string of high-profile bank collapses that roiled financial stocks.
Chief Executive Michel Khalaf said that 2023 is shaping up to be another year of uncertainty.
“We remain focused on managing risk across economic cycles and controlling what we can to deliver for our shareholders and our stakeholders,” Khalaf said in a statement.
U.S. adjusted earnings rose 7% in the quarter, while Latin America jumped 59% and EMEA rose 9% on a reported basis.
The company posted an adjusted profit of $1.18 billion, or $1.52 per share, for the three months ended March 31, compared with $1.7 billion, or $2.04 per share, a year earlier.
Rival insurer Prudential Financial Inc (NYSE:) had reported a lower-than-expected quarterly profit on Tuesday due to a decline in its assets under management.
MetLife, a leading global provider of insurance, annuities, and employee benefit programs, recently reported that its adjusted premiums had dropped, resulting in a significant decrease in profits. Although the company had announced a year-ago net income of $2 billion, their profits for this quarter had diminished to $1.3 billion.
According to analysts, the drop in MetLife’s profits is due to waning economic performance which has caused customers to slightly reduce their coverage amounts and opt for cheaper health insurance plans. Specifically, MetLife’s Medicare Advantage business was hit hard as new competition in the space continues to drive premiums down. Additionally, high levels of insurance claims, particularly those related to natural catastrophes, such as floods and hurricanes, impacted the company’s finances.
The recent economic slump has caused several other insurers, including Prudential Financial, to experience similar drops in profits, though MetLife’s adjusted profits have been most drastically affected. However, despite this setback, MetLife remains confident that its solid portfolio of products and services will help the company recover during this difficult period.
Overall, MetLife’s drop in adjusted premiums is a reflection of the current economic status, yet its financial performance may improve as the market continues to improve. With that said, it is up to the company to make the necessary adjustments to ensure its long-term success.