Risk Management

MetLife is in the business of mitigating risk and protecting families and their futures. We manage risk so that individuals and communities can realize their full potential. MetLife has a well-established risk management framework that constantly evolves and is designed to address material financial and non-financial risks (including compliance risks) to our business. Our risk and control framework operates under a “Three Lines of Defense” model where each employee is responsible for risk management. The framework helps us identify, measure, monitor, manage and report on risks at the right level, allowing us to deliver on the promises we make to our customers, employees and shareholders. The program is led by an independent Global Risk Management organization headed by our Chief Risk Officer, who reports directly to MetLife’s CEO. The framework flows as follows:

The Finance and Risk Committee of the Board of Directors oversees the assessment, management and mitigation of material risks, as well as capital and liquidity management practices. Other Board of Directors committees also have significant risk management oversight responsibilities:

• Audit Internal controls, information security and cybersecurity, and relevant legal and regulatory compliance;
• Governance and Corporate Responsibility Compliance risk management activities, compliance plan, management succession and reputation, as well as strategies, activities and initiatives related to environmental and social matters;
•  Investment Investment portfolio risks; and
• Compensation Compensation plan risks (e.g., avoiding incentives to take excessive risk).

The Board and its committees oversee sustainability matters, including the assessment and management of the relevant ESG risks and opportunities in MetLife’s business, operations and policies. MetLife’s management provides regular updates to the full Board and its committees on various sustainability matters. For more information on the Board’s committees and risk management oversight, please refer to Board Committee Information and Board of Directors.

In addition to oversight by the Board and its committees, MetLife has a management-level risk oversight structure. Material risks, including ESG risks, as appropriate, are within the purview of multiple senior management committees. MetLife’s Enterprise Risk Committee, a senior management level committee, oversees the identification, measurement and management of material risks on an enterprise basis.

Managing Climate Risks

Climate risks, both physical and transition risks, could impact MetLife’s business operations, investments, customers and supply chain. Climate change may increase the frequency and severity of near- or long-term weather-related disasters, public health incidents and pandemics, and their effects may increase over time. Climate change regulation may impact the value of investments we or our counterparties, including reinsurers, hold or increase our compliance costs. Our regulators may also increasingly focus their examinations on climate-related risks. 

MetLife considers how it could be impacted by climate risks across the business, both assets and liabilities, by qualitatively evaluating how risks could manifest across risk types, including: credit, market, insurance, operational, legal and compliance risks. MetLife continues to build assessment and scenario analysis capabilities to make progress on understanding climate risks and their potential impacts on our business, strategy and financial planning. MetLife also stays up to date on policy trends and evolving regulatory requirements globally, through internal and external resources, engagement and our global Climate Advisory Council.

Global Climate Advisory Council

In 2022, MetLife launched a global Climate Advisory Council to enhance the governance of climate risk, which is chaired by MetLife’s Chief Risk Officer and includes the Chief Financial Officer, Chief Investment Officer and General Counsel, among other executives.