NEW YORK (Reuters) - MetLife Inc (MET.N) plans to invest $1 billion in an efficiency program through 2019 that will eventually reduce annual operating costs by around $800 million, the insurer said on Thursday.
The investments will go toward technology improvements, Chief Executive Steven Kandarian wrote in his annual letter to shareholders, but did not provide more details.
MetLife first unveiled its cost-cutting plan last summer, saying it would save a gross $1 billion a year, partly through job cuts. In Kandarian’s letter and a separate proxy filing, the insurer said pretax annual savings would be $800 million when netting out “stranded” overhead costs related to a business it is divesting.
In February, MetLife’s board conducted a “deep dive examination” of the insurer’s strategy and goals to boost shareholder returns, Kandarian said. A key part of that strategy is the planned spinoff of Brighthouse Financial, its retail life insurance business, which is awaiting regulatory approval.
The company continues to look for ways to reduce the capital it needs to hold and increase its free cash flow, Kandarian said.
In his letter, the CEO touched on everything from U.S. tax reform and expectations of an easing regulatory environment to the company’s plan to return nearly $4.5 billion of capital to shareholders this year.
“The U.S. federal regulatory outlook is now more positive than it has been in nearly a decade,” Kandarian said, adding that the “prospect for pro-growth tax reform has also brightened.”
The remarks come days after the White House unveiled a proposal to significantly cut corporate taxes, and MetLife asked an appeals court to pause a case regarding whether it deserved a “too big to fail” designation while the Trump administration finishes reviewing the current regulatory approach. [L1N1HW1CV]
Reporting by Suzanne Barlyn; Editing by Lauren Tara LaCapra and Andrew Hay