Insurer MetLife says 2010 earnings will beat forecasts due to cost cutting

METLIFE, the largest publicly-traded US life insurer, yesterday forecast fourth-quarter and 2010 earnings that could beat average Wall Street expectations, helped by cost cuts, improved investment returns and higher revenue. But it said it did not see a return to historical growth levels until 2011 or 2012.<br /><br />In a statement issued just before the start of its annual investor conference, Metlife said it expects full-year 2010 operating earnings to rise about 50 per cent, to between $3.3bn (&pound;2bn) and $3.6bn, or $4.00 to $4.40 a share. The average Wall Street forecast is $4.11 a share.<br /><br />MetLife chief executive Robert Henrikson told investors the company sees revenue growing by up to eight per cent in 2010 as the company lures customers away from weaker rivals. &ldquo;It is about a flight to MetLife,&rdquo; said Henrikson. &ldquo;It is a good story.&rdquo;<br /><br />Life insurers were particularly susceptible to the upheaval in credit markets because of losses on holding of trillions of dollars in investments. But as markets have recovered, MetLife and its next biggest rival, Prudential Financial, have emerged stronger than some peers, helping them to win more business.<br /><br />MetLife expects improved investment profit and lower expenses will help its bottom line in 2010. The company met its target of $400m in cost savings a year ahead of schedule, and raised its forecast for cuts in 2010 to $600m. While it expects &ldquo;meaningful&rdquo; earnings recovery in 2010, it does not expect to an immediate return to the profit recorded before the worst of the credit crisis.