May 3 (Reuters) - MetLife Inc, the largest U.S. life insurer, reported a 62.6 percent fall in quarterly profit, hurt by derivative losses.
The company’s net profit fell to $820 million, or 75 cents per share, in the first quarter ended March 31, from $2.20 billion, or $1.98 per share, a year earlier.
The insurer recorded $602 million in net derivative losses in the quarter, reflecting changes in equity markets and interest rates. In the year-ago quarter, the company recorded derivative gains of $868 million.
MetLife’s operating income, which excludes investment and derivative gains or losses, rose to $1.41 per share from $1.20 per share.
The insurer uses its derivatives program to hedge against risks such as volatile currency exchange rates, equities markets and interest rate changes.
Operating income benefited in part by net investment income, which rose 14 percent to $5.20 billion.
Insurers have benefited from higher interest rates, which were last raised in December and March - a 0.25 percentage point uptick in each case. The U.S. Federal Reserve has indicated more interest rate hikes this year.
MetLife’s operating costs came in at $14.91 billion, barely changed from a year ago.
Through its cost-cutting plan, MetLife aims to save a gross $1 billion a year, partly through job cuts.
The company, which has been streamlining its businesses in response to a strict regulatory environment, plans to spin off its U.S. retail business, Brighthouse Financial, this year.
Total operating revenue rose 1.6 percent to $16.88 billion. (Reporting by Nikhil Subba in Bengaluru; Editing by Maju Samuel)