(Corrects to show the company anticipates a $650 million to
$850 million after-tax adjusted loss for 2018, not $700 million
to $900 million, in the 11th paragraph)
By Suzanne Barlyn
Feb 13 (Reuters) - U.S. insurer MetLife Inc on
Tuesday said internal failures that resulted in its not making
payments to thousands of pensioners stretched back a quarter of
a century and it would take a major effort this year to fix the
The pension problem has dogged Metlife since it revealed the
omission in December, prompting investigations by regulators, a
two-week delay in the publication of its quarterly earnings and
a $70 million charge in the fourth quarter. That charge, along
with a hit from U.S. tax changes, helped drag its adjusted
quarterly earnings down by over a third.
In total, Metlife raised reserves by $510 million to cover
the cost of compensating those affected. The insurer estimates
that about 13,500 people could be due payments.
"We remain committed to doing better and are taking the
necessary steps to fix the situation," MetLife's chief financial
officer, John Hele, said in a video presentation to investors on
Some life insurers, including MetLife, take over corporate
pension plans from companies that want to offload them. The
insurers then use a group annuity to make regular payments to
the retirees who are entitled to benefits under those pensions.
MetLife's problems - it made only two attempts to find the
pensioners - has put other insurers on the defensive.
"This issue is certainly getting a lot of attention in the
market," Prudential Financial Inc's vice chairman, Mark
Grier, said during a fourth quarter earnings call with analysts
earlier this month.
"Given the size and the age of our block of business, there
are inevitably some customers we can't locate for a number of
reasons, but that number is small," Grier said.
MetLife's fourth-quarter adjusted quarterly profit fell 36
percent, to $678 million, or 64 cents per share, compared with
the same period a year earlier, the company reported on Tuesday.
The result matched analyst expectations, according to Thomson
In addition to the $70 million reserve charge, changes in
the U.S. tax law cost the company $298 million in the fourth
The insurer anticipates a $650 million to $850 million
after-tax adjusted loss for 2018.
Overall, MetLife's total adjusted revenue for the fourth
quarter rose to $15.4 billion from $15.3 billion.
MetLife shares were down 1.6 percent to $44.50 in
(Reporting by Suzanne Barlyn; Editing by Carmel Crimmins and
First Published: 2018-02-14 00:26:09
Updated 2018-02-14 14:18:47
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