MetLife Revises 2017 Earnings Upward After Discovering Miscalculated Reserve

(RTTNews) - MetLife Inc. (MET) disclosed that it revised its 2017 earnings upward after discovering it had previously miscalculated reserves for a retirement-savings product in Japan, but no impact on adjusted earnings.

MetLife increased its previously reported 2017 net income of $3.6 billion by $264 million and said the mistake "represents a material weakness in internal controls over financial reporting." The miscalculation "had no impact on payments to customers."

The Securities and Exchange Commission is investigating the matter, according to a company regulatory filing.

MetLife said, "The revision relates to a release of reinsurance reserves for Japanese variable annuities following an internal review of reserving practices for this block of business reported in the MetLife Holdings segment. This reserve release had no impact on payments to customers. The release increased full-year 2017 net income by $264 million and shareholders' equity by $708 million. Management of the company has determined that the over-reserving represents a material weakness in internal control over financial reporting…….For 2018, the reserve release is expected to free up capital and positively impact free cash flow."