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GE jumps into retail banking with MetLife deal
By Ben Berkowitz and Tanya Agrawal
Tue Dec 27, 2011 3:13pm EST

(Reuters) - General Electric Co (GE.N) agreed to buy life insurer MetLife Inc's (MET.N) online bank on Tuesday, in a deal that will let GE's capital arm expand its funding base and lessen reliance on wholesale markets.

The speed of the move took some analysts by surprise, as it has only been three weeks since GE said it wanted to start taking bank deposits from consumers.

In the wake of the financial crisis, during which GE had to seek a lifeline from billionaire investor Warren Buffett, GE Capital has been trying to diversify its funding base so that it is not so dependent on commercial paper and bond sales.

"This acquisition gets GE Capital halfway to the stated (funding) goal, much faster than consensus expectations," Sterne Agee analyst Ben Elias said in a research note.

GE Capital is taking on about $7.5 billion in deposits -- just enough to put it in the top 100 banks nationwide, roughly. It tipped its hand clearly earlier this month, when a top executive said the company needed a U.S. retail channel next year.......................>>>>.......................>>>>...................http://www.reuters.com/article.....%2F+Business+News%29

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MetLife, Inc. is the holding corporation for the Metropolitan Life Insurance Company, or MetLife, for short, and its affiliates. MetLife is among the largest global providers of insurance, annuities, and employee benefit programs, with 90 million customers in over 60 countries.[2][3] The firm was founded on March 24, 1868.[4]

On January 6, 1915, MetLife completed the mutualization process, changing from a stock life insurance company owned by individuals to a mutual company operating without external shareholders and for the benefit of policyholders.[5] The company went public in 2000.[6] Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia’s Pacific region, Europe, and the Middle East.[7] MetLife is the largest life insurer in the United States and serves 90 of the largest Fortune 500 companies.[8] The company’s principal offices are located at 1095 Avenue of the Americas in Midtown Manhattan, New York City, though it retains some executive offices and its boardroom in the MetLife Building, located at 200 Park Avenue, New York City, which it sold in 2005.[9]

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Early years

The Metropolitan Life Insurance Company tower, which previously served as company headquarters, was featured in its advertising for many years.
The predecessor company to MetLife began in 1863 when a group of New York City businessmen raised $100,000 to found the National Union Life and Limb Insurance Company. The company insured Civil War sailors and soldiers against disabilities due to wartime wounds, accidents, and sickness. On March 24, 1868, it became known as Metropolitan Life Insurance Company and shifted its focus to the life insurance business.[10][11] A severe business depression that began in the early 1870s forced the company to contract, until it reached its lowest point in the late 1870s. 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 U.S., as measured by life insurance in force (the total value of life insurance policies issued).[10][12]

In 1907, the Metropolitan Life Insurance Company tower was commissioned to serve as MetLife’s 23rd Street headquarters in Lower Manhattan. Completed two years later, the building was the world's tallest until 1913 and remained the company's headquarters until 2005. For many years, an illustration of the building (with light emanating from the tip of its spire and the slogan, "The Light That Never Fails") featured prominently in MetLife’s advertising.[13] By 1930, MetLife insured every fifth man, woman, and child in the United States and Canada.[14] 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.[14] The company financed the construction of the Empire State Building in 1929 as well as provided capital to build Rockefeller Center 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.[14]


Company president Leroy Lincoln in 1947

Metropolitan Life logo, ca. 1970.
During the postwar 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.[14] In 1981, MetLife purchased what became known as the MetLife building for $400 million from a group that included Pan American World Airways.[15][16]

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Current era

In 1998, the board of directors authorized demutualization.[14] Eighteen months later in April 2000, MetLife held an IPO, resulting in the issuance of 202,000,000 shares at the price of $14.25 per share.[6] At the time of the IPO, MetLife, Inc. had nine million shareholders and was the most widely held stock in North America.[17] In 2001, MetLife was the first insurance company to establish a financial holding company with a nationally chartered bank through its purchase of Grand Bank, which was renamed MetLife Bank.[18] The company also invested $1 billion in the U.S. stock market during 2001, immediately after the September 11th terrorist attacks.[14]

MetLife acquired Travelers Life & Annuity and substantially all of Citigroup’s international insurance businesses for $12 billion.[19] At the time of the deal, which was completed on July 1, 2005, the Travelers acquisition made MetLife the largest individual life insurer in North America based on sales.[19] Current MetLife chairman C. Robert (Rob) Henrikson was appointed chairman of the board of directors, president and chief executive officer of MetLife in 2006.[20] In 2008, MetLife Bank, N.A., a division of MetLife Inc., purchased the residential mortgage business of Memphis-based First Horizon National Corporation. The purchase included the home loan unit of First Tennessee Bank National Association (outside Tennessee), with 230 offices in the US.[21] The same year, MetLife also purchased the reverse mortgage division of Florida-based Everbank Financial Corp. Both transactions were completed in order to expand the company's stake in the US housing market.[22] Later that year, MetLife split-off substantially all of its 52% stake in Reinsurance Group of America, Inc.[23] MetLife had received the majority stake in RGA as a result of its 2000 acquisition of GenAmerica.[24] The split-off gave MetLife shareholders the option to exchange MetLife shares for shares of RGA.[23]

In 2010, MetLife completed its purchase of American Life Insurance Company (Alico), from American International Group (AIG).[25][26] The $16.2 billion acquisition of Alico expanded the company’s life insurance and employee benefits business into more than 60 countries compared to 17 countries before the acquisition.[25][26][27][28] On March 21, 2011, MetLife announced that Steven Kandarian, who had headed MetLife's investment department would succeed Robert Henrickson as President and CEO as of May 1, 2011.[29]

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Products and services





MetLife Hall of Records, Yonkers, New York.
Insurance products accounted for 53% of MetLife’s 2009 $49 billion of revenue.[30] MetLife is the largest life insurer in the United States and Mexico[30] and is the second-largest foreign provider of insurance in Japan and worldwide its customers total 90 million individuals.[2][7]

[edit] Life insurance

MetLife’s individual life insurance products and services comprise term life insurance and several types of permanent life insurance, including whole life, universal life and variable universal life. The company also offers group life insurance, provided through employers, which consists of term life, group variable universal life and group universal life.[31][32] MetLife is the largest life insurer in the United States, based on life insurance in-force.[8][30]

[edit] Dental

MetLife offers group dental benefit plans for individuals, employees, retirees and their families and provides dental plan administration for over 20 million people.[33][34] Plans include MetLife’s Preferred Dentist Program (PPO) and the SafeGuard DHMO (available for both individuals and employees in CA, FL, and TX). As of May 2010, MetLife’s dental PPO network included over 135,000 participating dentist locations nationwide while the dental HMO network included more than 13,000 participating dentist locations in California, Florida and Texas.[35] MetLife also administers dental continuing education program for dentists and allied health care professionals, which are recognized by the American Dental Association (ADA) and the Academy of General Dentistry (AGD).[36]

[edit] Disability

MetLife provides disability products for individuals as well as employee and association groups who receive them through their employer.[37] For individuals, the company’s individual disability income insurance can replace a portion of lost income if an individual is unable to work due to sickness or injury.[38] For groups, MetLife offers short term disability insurance and long term disability insurance. Short term disability insurance is structured to replace a portion of an individual’s income during the initial weeks of a disabling illness or accident. Long term disability Insurance serves to replace a portion of an individual’s income during an extended period of a disabling illness or accident.[39] The company also maintains an absence management product which allows employers to track and manage both planned and unplanned employee absences. The product, which MetLife calls MetLife Total Absence Management, is structured for businesses with 1,000 or more employees.[40]

[edit] Annuities

MetLife is among the largest providers of annuities in the world, recording $22.4 billion in sales during 2009.[41] MetLife offers annuities which consist of fixed annuities, variable annuities, deferred annuities and immediate annuities.[42] In 1921, MetLife was the first company to issue a group annuity contract.[43] More recently in 2004, it was the first insurer to introduce a longevity insurance product.[44] As of December 31, 2009, MetLife globally managed group annuity assets of $60 billion with $34 billion of transferred pension liabilities and provided benefit payments to over 600,000 annuitants per month.[45]

[edit] Auto and home

MetLife Auto & Home is the brand name for MetLife’s nine affiliate personal lines insurance companies.[46] Collectively these companies offer personal lines property and casualty insurance policies in all 50 states and the District of Columbia.[47] The flagship company in the MetLife Auto & Home group, Metropolitan Property and Casualty Insurance Company, was founded in 1972.[46] MetLife Auto & Home companies presently have over 2.7 million active policies and service 58 of the Fortune 100 companies.[48][49]

According to its website, MetLife Auto & Home offers auto policies and home insurance, whether the policy owner lives in a house, condo, mobile home, or apartment.[50] The companies also sell RV, ATV, boat, mobile home, collectible vehicle, and motorcycle policies[50] and offers flood insurance policies as a participant in the National Flood Insurance Program (NFIP), which is managed by the federal government.[51][52] Through an arrangement with Hyatt Legal Plans, a subsidiary of MetLife, MetLife Auto & Home underwrites group legal plans in many states.[53] It was the first national insurer in the U.S. to offer identity-theft resolution services at no extra premium and as of 2011 continues to do so today in most U.S. states.[54][55]

[edit] Other products

MetLife’s products also include critical illness insurance.[56] Financial services include fee-based financial planning, retirement planning, wealth management, 529 Plans, banking, and commercial and residential mortgages.[57] The company also provides retirement plan and other financial services to healthcare, education, and not-for-profit organizations.[58] The MetLife Center for Special Needs Planning is a group of planners which serve families and individuals with special needs.[59]

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Nursing Home, Assisted Living and Adult Day Services All Increased 4.4% or More. The annual survey provides national, statewide, and area-specific costs for facilities offering care.

Alzheimer's Reading Room

Key Findings

The national average daily rate for a private room in a nursing home rose 4.4% from $229 in 2010 to $239 in 2011.
The national average monthly base rate in an assisted living community rose 5.6% from $3,293 in 2010 to $3,477 in 2011.
The national average daily rate for adult day services rose 4.5% from $67 in 2010 to $70 in 2011.
The national average hourly rates for home health aides ($21) and homemakers ($19) were unchanged from 2010.

This survey of 2,003 nursing homes, 1,492 assisted living communities, 1,644 home care agencies, and 1,341 adult day services in all 50 states and the District of Columbia was conducted by telephone between April and August 2011, by LifePlans Inc., for the MetLife Mature Market Institute.

Long-Term Care Costs in the U.S. Rise Again, Continuing a Trend, According to MetLife Mature Market Institute Survey

Costs continue to rise for those requiring long-term care in the U.S. According to the newly released 2011 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, conducted by the MetLife Mature Market Institute, national average rates for a private nursing home room increased 4.4% to $239 daily or $87,235 annually, in 2011.

Assisted living base rates rose by 5.6% to $3,477 monthly or $41,724 annually. Adult day services went up by 4.5% to $70 per day. Home health aides and homemaker/companion service rates were unchanged at $21 and $19 per hour, respectively.

The highest average daily rates for nursing homes continue to be in Alaska, where rates decreased slightly to $655 for a private room compared to $687 in 2010. Costs were lowest in Louisiana, outside the Baton Rouge and Shreveport Metropolitan Statistical Areas (MSA), at an average of $141 per day for a private room.

For assisted living, the Washington, D.C. area had the highest average monthly base rate at $5,757, a 10% increase from last year. Arkansas, outside of the Little Rock MSA, had the lowest average monthly rate of $2,156, also an increase.

“This year’s increases are greater than previous years. The state of the economy, combined with rising health care and energy costs, are having a significant impact on long-term care rates. In fact, long-term care rates continue to outpace the medical inflation rate,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute.


“The result is dramatic protracted inflation that will impact consumers. As the cost of care continues to rise, Americans need to discuss long-term care planning with their families now, to ensure they receive the kind of care they want in the future. This is especially critical at a time when retirement savings rates are low."

The MetLife Market Survey and accompanying report provide a good deal of additional information regarding various types of long-term care available in the U.S. and a detailed breakdown of costs by region.

Nursing Homes:

According to the U.S. Census Bureau, in 2010, 66% of nursing home residents were women. The median age of residents was 82.7 years.

Fifteen percent of nursing homes surveyed have an associated assisted living unit or wing; 11% are part of a continuing care retirement community (CCRC).
A small percentage (10%) of nursing homes surveyed provide adult day services.
The majority (87%) of nursing homes surveyed provide Alzheimer’s or dementia care; of those, 80% charge the same rate for care.

Assisted Living:

Current estimates from the American Seniors Housing Association indicate that the average age of an assisted living resident is 86.9 years old, and the median length of stay in assisted living is 25.6 months.

Oversight of assisted living communities rests primarily with state governments rather than federal regulation. In 2007, several states strengthened existing standards or implemented new standards for communities with residents with Alzheimer’s disease or other forms of dementia.

Almost three-quarters (72%) of assisted living communities surveyed provide Alzheimer’s and dementia care, 50% of which charge an additional fee for the service.

Home Health Care:

The majority (79%) of the home health care agencies surveyed provide Alzheimer’s training to their employees, and almost all (99%) agencies surveyed do not charge an additional fee for patients with Alzheimer’s.

While most home care agencies surveyed provide an hourly rate, 81% of the agencies require a minimum number of hours per day ranging from 30 minutes to eight hours with three hours being the average. Small percentages (3%) provide a daily rate. About 32% of those surveyed have a 24-hour or live-in rate. The average daily live-in rate for a home health aide is $258 and $255 for a homemaker/companion.

Adult Day Services Centers:

More than three-quarters of adult day services centers surveyed are open Monday through Friday; 6% are also open Saturdays and 13% are open seven days per week.

For those open 24 hours, 67% provide full adult day services for all 24 hours. Seven in ten centers provide transportation services to and from the center. Of these, 47% do not charge a fee for these services. Of those that charge for transportation, the average one-way fee is about $8.

Almost all (98%) of the centers surveyed provide services for those with Alzheimer’s disease, with 2% of these charging an additional fee.


Source and detailed report, Market Survey of Long-Term Care Costs

The publication can also be ordered through Contact Us on the MetLife Mature Market Institute Web site, by writing to: MetLife Mature Market Institute, 57 Greens Farms Road, Westport, CT 06880 or by e-mailing MatureMarketInstitute@metlife.com.

Methodology

The MetLife survey of 2,003 nursing homes, 1,492 assisted living communities, 1,644 home care agencies and 1,341 adult day services, in all 50 states and the District of Columbia, was conducted by telephone between April and August 2011, by LifePlans, Inc., for the MetLife Mature Market Institute.

The states were divided into three groups, according to the population—under three million, three to 10 million and over 10 million.

These groupings were determined using data from the 2000 U.S. Census and updates. The cities/areas surveyed were chosen on the basis of population and the ability to obtain a representative sampling of facilities and providers.

For the “rest of state” areas, a sample of service providers or facilities were randomly selected from all providers or facilities identified in the state not already identified in the Metropolitan Statistical Area (MSA) sample.

Costs for this survey were calculated for each service provider in an area and were aggregated across all providers to compute a statewide average cost. All costs are rounded to the nearest whole dollar amount.

LifePlans

LifePlans, Inc., a risk management and consulting firm, provides data analysis and information to the health and long-term care insurance industries.

The MetLife Mature Market Institute®

The MetLife Mature Market Institute is MetLife’s center of expertise in aging, longevity and the generations and is a recognized thought leader by business, the media, opinion leaders and the public. The Institute’s groundbreaking research, insights, strategic partnerships and consumer education expand the knowledge and choices for those in, approaching or working with the mature market.