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MetLife Revamps to Reflect Global Reach

Source: WSJ - Leslie Scism & Melodie Warner

Posted on 21 Nov 2011

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In his biggest move since becoming MetLife Inc. chief executive in the spring, Steven A. Kandarian has reorganized the giant insurer's business structure into three geographic regions to better reflect its global reach.

Meanwhile, a senior executive who lost out in the succession race for the CEO spot is leaving the company.

The insurance company named Chief Financial Officer William J. Wheeler, 50 years old, president of the Americas division. Executive Vice President Eric Steigerwalt was named interim finance chief while MetLife searches for Mr. Wheeler's successor.

Michel Khalaf was named president of Europe, the Middle East and Africa. He was executive vice president and chief executive of MetLife's Middle East, Africa and South Asia region.

MetLife is still seeking a president of the Asia division.

The company said William J. Mullaney, 51, president of the existing U.S. business position, has decided to pursue other opportunities outside of MetLife. Messrs. Mullaney and Wheeler, both longtime veterans at the insurer, were bypassed in the move that elevated Mr. Kandarian. In March, when

Mr. Kandarian's promotion was announced, MetLife's board granted the two executives "special" compensation with lucrative terms at the end of a three-year performance period beginning Jan 1, 2011, in an effort to retain them.

MetLife said Mr. Mullaney wasn't available for comment.

Mr. Kandarian, 59, emerged as a strong candidate to succeed C. Robert Henrikson as CEO in part because of his leadership of an internal strategy team in 2007 and 2008 that concluded MetLife should expand globally.

That team's work paved the way for the acquisition last year of one of the big foreign life-insurance units of American International Group Inc. The acquisition catapulted MetLife into the top tier of global insurers, and led to the organizational restructuring, Mr. Kandarian said in a statement.

Meanwhile, William J. Toppeta, 63, who served as president of the international business, said he plans to retire. He will remain with MetLife in a new post, vice chairman of Europe, Middle East, Africa/Asia, through May 31 to mentor and consultant the presidents of EMEA and Asia.

The company reported last month its third-quarter profit surged thanks to a large derivatives gain and a jump in investment income.

MetLife shares have fallen more than 30% so far this year through Friday's close, amid a sharp selloff in the sector, as investors find the life insurers a less-attractive holding during a period of protracted low interest rates. Low rates depress investment income in the companies' big investment portfolios, and also drive up the hedging costs on certain types of products, such as the guarantees of minimum lifetime income sold with variable annuities.