MetLife CEO Steven Kandarian to Retire in April -- Update
January 08 2019 - 9:40AM
Dow Jones News
By Leslie Scism
MetLife Inc. President and Chief Executive Steven Kandarian is
turning over the reins of the nation's second biggest life insurer
by assets to a top lieutenant, Michel Khalaf, as he sets April 30
for his retirement.
Mr. Khalaf won't take Mr. Kandarian's chairman title, however.
In another development, MetLife said it is creating the position of
nonexecutive chairman, and the post will be held by its current
independent lead director, Glenn Hubbard, dean of Graduate School
of Business at Columbia University.
MetLife had signaled the potential promotion of Mr. Khalaf in
June 2017 when he was named president of MetLife's core U.S.
business, while retaining his role as president of the company's
European, Middle East and African operations. The promotion gave
Mr. Khalaf significant additional responsibilities and distanced
him from other internal candidates.
Mr. Khalaf, 54 years old, joined MetLife in 2010 through the New
York company's acquisition of an international life-insurance
business from American International Group Inc. In his 21 years at
the AIG unit, he held senior roles around the world, with
responsibilities in places including the Caribbean, France, Italy,
Egypt, Poland, Romania and the Philippines.
Mr. Kandarian, who turns 67 in March, has been president and CEO
since May 2011 and added the title of chairman in January 2012. He
joined MetLife in 2005 as its investment chief.
"In Michel, we are fortunate to have a leader who has excelled
across a wide range of markets, businesses and cultures," Mr.
Hubbard said in prepared remarks. Mr. Hubbard is slated to step
down as dean at Columbia June 30.
As Mr. Khalaf took on the extra MetLife duties over the past 18
months, Mr. Kandarian was already beyond the company's customary
retirement age of 65. MetLife's board waived its age policy
indefinitely in 2016 in a strong show of support for the executive
at a critical juncture for the company.
At the time, Mr. Kandarian was divesting a large piece of the
company's traditional life-insurance unit, a move that hived off
its historic core: selling life insurance and other financial
products to individuals and families across the U.S.
Mr. Kandarian also was suing the U.S. government. He was
challenging in federal court MetLife's federal designation as a
"systemically important financial institution," which made it
subject to heightened oversight from the Federal Reserve on top of
state insurance-department oversight. His challenge ultimately was
successful.
The 150-year-old company Mr. Khalaf will take over is a leader
in sales of life, dental and other types of insurance sold to
employers, and it also offers pension and other retirement
products. It has roughly 49,000 employees globally and provides
products and services in about 40 countries. Outside the U.S., its
largest markets include Chile, Japan, Korea and Mexico.
In hiving off about a quarter of its assets in 2017 to create
the company now known as Brighthouse Financial Inc., MetLife lost
bragging rights as the biggest U.S. life insurer to Prudential
Financial Inc. MetLife now clocks in at about $700 billion in total
assets and remains bigger by market capitalization.
Mr. Kandarian's tenure has been bumpy at times. Low U.S.
interest rates relative to historical levels have pinched the
yields on invested premiums. Those low rates, along with high
capital requirements, played into the decision to set up
Brighthouse.
The company hit a rough patch in late 2017. Mr. Kandarian
publicly apologized about a pension-payments mistake by the
company's retirement-income services unit. It was learned that
MetLife years ago had failed to adequately search for about 13,500
beneficiaries of private-sector pension plans for which the company
had taken on responsibility.
Instead, it designated the people as "permanently unresponsive"
after a couple of unanswered letters and booked as profit the money
that should have been paid out. Some retirees were owed money from
as far back as the 1990s, with amounts averaging less than $150 a
month.
In December, MetLife agreed to pay a $1 million fine to
Massachusetts tied to beneficiaries in its state. Probes including
an investigation by the Securities and Exchange Commission are
continuing.
Write to Leslie Scism at leslie.scism@wsj.com
(END) Dow Jones Newswires
January 08, 2019 09:25 ET (14:25 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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