MetLife mulls spinoff or IPO of life insurance business

By The Associated Press | Posted - Jan. 12, 2016 at 4:50 p.m.


1 photo

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

NEW YORK (AP) — MetLife plans to carve off a substantial portion of its U.S. life insurance business via a sale, spinoff or an initial public offering as the parent company challenges harsher regulatory oversight.

The New York company has been disputing its designation by federal regulators as a "systemically important" entity that's deemed "too big to fail."

That categorization makes it subject to greater government oversight and, MetLife says, exorbitant costs. It has taken the Financial Stability Oversight Council to court over the assessment. The case is ongoing.

Metlife said Tuesday it believes the independent new U.S. life insurance company would compete more effectively and allow MetLife to benefit from reduced capital requirements.

It said the potential stand-alone business would have about $240 billion in total assets and represent about 20 percent of its operating earnings. For the nine months ended in September, MetLife Inc. posted operating income of $4.11 billion.

MetLife Executive Vice President Eric Steigerwalt was tapped to lead the new company, with the rest of the management team to be named over time.

MetLife would keep its property-casualty, foreign and other businesses under the proposed plan. It said it would remain a leader in the U.S. market in employee benefits and a major provider of pension and retirement products.

In after-hours trading, MetLife Inc. shares jumped almost 8 percent to $45.21.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Photos

The Associated Press

    SIGN UP FOR THE KSL.COM NEWSLETTER

    Catch up on the top news and features from KSL.com, sent weekly.
    By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

    KSL Weather Forecast