Risk Management

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MANAGING RESPONSIBLY

Risk Management

2 min read Jun 23, 2022

At MetLife, we are 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 comprehensive and 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. It 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 (GRM) organization headed by our Chief Risk Officer, who reports directly to MetLife’s CEO. For more information about our risk management framework, please visit our managing risk page.

ESG risks, including climate risks, are within the purview of multiple Board and senior management committees, as they underpin all aspects of risk management. 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: ethics, compliance programs, sales practices, management succession and reputation, as well as strategies, activities and initiatives related to sustainability and DEI
  • Investment: investment portfolio risks
  • Compensation: compensation plan risks (e.g., avoiding incentives to take excessive risk)

Lines of business and corporate functions identify, measure, monitor, manage and report risk

Managing Climate Risks

Climate risks, both physical and transition risks, could impact MetLife’s business operations, investments, customers and supply chain. These risks, as well as associated opportunities, are identified, measured, monitored, managed and reported to MetLife’s Board of Directors, when appropriate, through our enterprise-wide risk management framework. We have integrated climate risks into our investments underwriting standards, conducted a qualitative risk assessment and are developing quantitative scenario analysis capabilities. We have plans to build on our work and measure the carbon intensity of our investment portfolio and develop metrics, including stress tests and scenario analysis, to assess climate risks.

In 2022, MetLife launched a global Climate Advisory Council to enhance our governance of climate risk. The Council is chaired by our Chief Risk Officer and includes our Chief Financial Officer, Chief Investment Officer, General Counsel, Chief Auditor, Head of Investor Relations and other executive-level and management-level staff.

To date, the council has addressed topics including climate regulation, climate risk modeling and climate risk analysis of the U.S. energy portfolio.

MetLife has also established a Climate Risk Working Group (CRWG) in Europe, comprising principally members of our Executive Management Committee to develop a comprehensive approach to managing climate risk for MetLife Europe and MetLife Europe Insurance.

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