MetLife SWOT & PESTLE Analysis

Strength

1. Exemplary customer service: MetLife has a customer driven focus and measurement of success in company is done using net promoter scores (NPS). In 2016 it brought a 360 degree customer feedback system called NPS 360 for collection of overall NPS metrics which has four major competitors- transactional, relationship, employee and competitive. Also, the company keeps out carrying extensive customer research and it is because of these measures taken by MetLife and continuous improvement practices that it is now able to add more values to its customers and its performance improved 35% from 2014-16.

2. Strong brand name and huge presence across the globe: MetLife enjoys a market leader position in many countries like Japan, US, etc. which is to a great extent because of the strong and reputed brand name that it has achieved in more than a century. It is within top 50 companies in the list of fortune 500 companies. MetLife operates in more than 60 countries across the globe and has a customer base of about 90 million and more than 65000 employees.

3. Launch of conVRse- the first of its kind VR platform: In 2017, MetLife won the Asia Insurance Industry Award 2017 for ‘Innovation of the Year’ for the second time by the launch of conVRse a first-of-its-kind experiential Virtual Reality (VR) customer service platform designed to revolutionize interaction between insurers and customers as this if the first time VR has been used in Insurance industry. ConVRse had also won numerous other awards thereby demonstrating its business and social impact. Through the initial response, 96% of customer felt a delighted experience. Thus MetLife has established itself as a technology innovator ahead of its competitors through launch of a VR platform for answering customer’s policy related queries.

Weakness

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Opportunity

1. Continue disruptive innovations after ‘Beautiful’ and ‘conVRse’: For two consecutive years MetLife has won the Asia Insurance Industry Award 2017 for ‘Innovation of the Year’ with its products like ‘Beautiful’ and ‘conVRse’. Beautiful aims at providing healthcare facilities whereas conVRse is a first-of-its-kind experiential Virtual Reality (VR) customer service platform designed to interact between insurers and customers. The survey performed showed high levels of customer experience with converse adding more to the strong brand name. Because innovation in insurance sector is very limited and products are also not very differentiating, it is here where MetLife can consolidate its position as a leader in innovation.

2. Aging population of Japan and US: The aging population of US and especially Japan would drive a near future demand of life insurance (which currently account for more than company’s 70% revenue) and annuity products and would bring some stability and earnings for the company. So MetLife should be able to continue to utilise its recognisable brand and increase firm’s value in coming future and if new innovating financial products are brought in these markets catering to the needs of every sections of society, MetLife could be far ahead of competitors.

Threat

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Political

1. Trump administration appeal for removing MetLife from SIFI: Under the Dodd-Frank law(2010) MetLife comes under the Systemically Important Financial Institutions (SIFI) and was declared “Too Big To Fail” status meaning that collapse of such an institution could trigger financial crisis. However in 2016, it filed a case against it and the label dropped out of MetLifebut now in January 2018, Trump administration dropped an appeal against a legal ruling for removing MetLife from a federal list of those financial institutions which are considered systemically important. If this happens, it would impose stricter regulations and supervision for MetLife like requiring to hold more capital than its firms.

Economic

1. Shutting down of UK Wealth Management business due to low interest rates: In July 2017, the company decided to close down its ten year old Wealth Management business having about £5bn of assets in United Kingdom because the ongoing challenge of long term low interest rates which made it difficult for the company to deliver value. After the financial crisis there has been a huge drop in interest rates in UK as the Bank of England had cut interest rates to 0.5pc 8 years back which further got reduced to 0.25pc now thereby making all long term investments unattractive.

Social

1. Retirement of Baby Boomers: The most obvious societal shift impacting the developed countries is the retirement of baby boomers and upon retirement, they are taking out accumulated money and invest it in sources that provide ongoing source of income. This growing section of retired population is wealthier and more aware of financial products as compared to the people who retired previously thereby generating different insurance needs triggering new insurance products especially the long term ones.

Technological

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Legal

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Environmental

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