Early years
The predecessor company to MetLife began in 1863 when a group of New York City business leaders raised to found the National Union Life and Limb Insurance Company headquartered on lower Broadway.[17] The company insured Civil War sailors and soldiers against disabilities due to wartime wounds, accidents, and sickness. Millions of "industrial" or workingman's policies were sold, costing five to ten cents a week, which were collected at the policyholder's home.[17] On March 24, 1868, it became known as Metropolitan Life Insurance Company and shifted its focus to the life insurance business.[18][19] The Chicago fire of 1871 that destroyed 2,000 acres and $200 million (equivalent to $ in ) worth of property, severely affected the insurance companies, which were legally obligated but financially unable to cover losses.[20] Then, severe business depression that began with the Panic of 1873 forced the company to contract, until it reached its lowest point in the late 1870s.[17] After observing the insurance industry in Great Britain in 1879, MetLife President Joseph F. Knapp brought "industrial" or "workingmen's" insurance programs to the United States – insurance issued in small amounts on which premiums were collected weekly or monthly at the policyholder's home. By 1880, sales had exceeded a quarter million of such policies, resulting in nearly $1 million in revenue from premiums. In 1909, MetLife had become the nation's largest life insurer in the United States, as measured by life insurance in force (the total value of life insurance policies issued).[18][21]
In 1890, the Metropolitan Life Insurance Company Building was commissioned to serve as MetLife's home office on 23rd Street in Manhattan. The building was completed in stages through 1905. A clock tower was commissioned adjacent to the home office in 1907, and when completed two years later, the building was the world's tallest until 1913.[22] The home office complex, which came to include the later art deco Metropolitan Life North Building, remained the company's headquarters until 2005. For many years, an illustration of the Metropolitan Life Tower (with light emanating from the tip of its spire and the slogan, "The Light That Never Fails") featured prominently in MetLife's advertising.[23]
In 1905, a predecessor company, New England Life, lost a legal case, Pavesich v. New England Life Insurance Company, where they attempted to use an image of another person for promotion but this was ruled a breach of privacy and libelous: this case became a standardly cited case on privacy in US law.
By 1930, MetLife insured one of five men, women, and children in the United States and Canada.[24] During the 1930s, it also began to diversify its portfolio by reducing the percentage of individual mortgages in favor of public utility bonds, investments in government securities, and loans for commercial real estate.[24] The company financed the Empire State Building's construction in 1929 as well as provided capital for Rockefeller Center's construction in 1931. During World War II, MetLife placed more than 51 percent of its total assets in war bonds and was the largest single private contributor to the Allied cause.[24]
Postwar
During the post-war era, the company expanded its suburban presence, decentralized operations, and refocused its career agency system to serve all market segments. It also began to market group insurance products to employers and institutions. By 1979, operations were segmented into four primary businesses: group insurance, personal insurance, pensions, and investments.[24] In 1981 MetLife purchased the Pan Am Building from a group that included Pan American World Airways for the price of $400 million.[25][26] The building was subsequently renamed and the prominently displayed Pan Am logo was replaced with the MetLife logo.
De-mutualization and IPO
In 2000, MetLife converted from a mutual insurance company operated for the benefit of its policyholders to a for-profit public company.[27] The de-mutualization process allowed MetLife to enter unrelated insurance businesses and increase executive compensation.
De-mutualization and IPO
In 2000, MetLife converted from a mutual insurance company operated for the benefit of its policyholders to a for-profit public company.[27] The de-mutualization process allowed MetLife to enter unrelated insurance businesses and increase executive compensation.
Policyholders received some stock in the new company in this process.[28] MetLife was accused of breaching federal securities laws by misrepresenting and omitting information in materials given to policyholders during this process, resulting in years of litigation ending with a $50 million settlement in 2009.[29]
Acquisitions, sales, and major deals
- 1992 – merged with United Mutual Life Insurance Company, the only African-American life insurer in New York, in 1992.[30]
- 1992 – [31] acquired Executive Life's single premium deferred annuity business, which was worth approximately $1.2 billion. MetLife also acquired the firm's life insurance business, valued at about $260 million.[32]
- 1995 – sold Century 21 to Cendant (known as Hospitality Franchise Systems at the time) while purchasing New England Mutual Life Insurance Company.[33]
Current era
From 2004 to 2011, MetLife continued to hold its position as the largest life insurer in the United States.[58] The company had $2.5 trillion in policies written, $350 billion in assets under management, over 12 million customers in the United States, 8 million customers outside the United States, and a net income in 2003 of $2.2 billion.[58] That year, Barron's reported that 13 million American households owned at least one product from MetLife.[59]
MetLife named Robert H. Benmosche as chairman and CEO in July 1999. Benmosche occupied the position until 2006, when he was replaced by C. Robert Henrikson.[60][61][62]
"Too big to fail"
In 2012, MetLife failed the Federal Reserve's (the Fed's) Comprehensive Capital Analysis and Review stress test, intended to predict the potential failure of the company in a recession. The Fed stated that the minimum total risk-based capital ratio should be 8% and it estimated MetLife's ratio at 6%. The company had requested approval for a US$2 billion share repurchase to prop up the stock price, along with an increased dividend.[66] Because MetLife owned MetLife Bank, it was subject to stricter financial regulation. To escape that level of regulation, MetLife announced the sale of its banking unit to GE Capital.[67][68] On November 2, 2012, MetLife said it was selling its US$70 billion mortgage servicing business to JPMorgan Chase for an undisclosed amount.[69] Both sales were part of its strategy to focus on the insurance side of its business.
Fines
On August 7, 2012, it was announced that MetLife will pay $3.2 million in fines after the Federal Reserve charged it used unsafe and unsound practices in handling its mortgage servicing and foreclosure operations.[75]
In 2014, MetLife paid $23 million to settle multiple lawsuits over junk fax operations used to generate leads for life insurance sales.[76]
In 2015, MetLife Home Loans LLC paid $123.5 million to the United States Department of Justice to resolve allegations it knowingly made mortgages insured by the United States government that didn't meet federal underwriting requirements.[77]
