By Katherine Chiglinsky
(Bloomberg) --MetLife Inc., the largest U.S. life insurer, lowered its headcount by 11,000 last year as Chief Executive Officer Steve Kandarian reduced costs and prepared to spin off a U.S. retail business.
The insurer had 58,000 employees as of Dec. 31, according to a regulatory filing Wednesday, down 16 percent from a year earlier. Kandarian sold a distribution network of more than 4,000 advisers to Massachusetts Mutual Life Insurance Co. in 2016. He also announced plans to cut staff as he works to separate Brighthouse Financial, the U.S. business that sells annuities and life insurance to individuals.
MetLife joins rival American International Group Inc. in shrinking to help boost profitability. AIG said in a regulatory filing last month that its headcount fell 15 percent in 2016 to 56,400. New York-based MetLife announced a deal in August to outsource the administration of almost 7 million policies to Computer Sciences Corp., and CSC said it would offer employment to more than 1,000 people who worked for Kandarian’s company in the U.S. and India.
“In light of the significant headwinds our industry is facing, MetLife must do even more to avoid simply running in place,” the CEO said that month. “We know this will require us to reduce headcount, which is never an easy step for an organization to take. Our overall goal is to be more efficient, so that we can better serve our customers and provide a fair return to shareholders.”
After the Brighthouse spinoff, MetLife will be smaller than competitor Prudential Financial Inc. Newark, New Jersey-based Prudential ended 2016 with about 49,700 employees, an increase of less than 1 percent from a year earlier.
Kandarian is increasing MetLife’s focus on providing insurance through employers and in international markets. The company said Wednesday in the regulatory filing that there were more than 6,400 agents and managers for its joint venture in China, up from 4,000 a year earlier.
MetLife also highlighted the global nature of its $500 billion investment portfolio, drawing attention to potential political and economic risks in markets such as Mexico, Italy, Turkey and Puerto Rico. The firm has about $11.3 billion of fixed-maturity securities in the U.K., a country that it didn’t flag for risk in the annual report for 2015.
“Events following the U.K.’s referendum on June 23, 2016 and the uncertainties associated with its pending withdrawal from the EU have contributed to market volatility,” MetLife said in the filing.