MetLife Inc. is ready to send its U.S. life-insurance business out on its own, but with no trace of its parentage or history.
On Thursday the New York company announced to employees that Brighthouse Financial will be the new name of the unit that it plans to divest in the coming months.
U.S. life insurance has been at the company’s core for more than a century and an important contributor to the company’s rise. MetLife announced in January that it would part ways with a large piece of that unit as part of a plan to slim down and respond to a shifting regulatory environment with higher capital requirements.
The operations being divested represent about a fifth of the company’s most recent annual earnings. MetLife hasn’t decided whether the divestiture will take the form of a spinoff, initial public offering or sale.
Some Wall Street analysts have said a spinoff is likeliest given the relatively large size of the U.S. unit and its capital requirements. Those factors limit the number of potential buyers.
An internal team of about 20 executives, managers and staff members settled on Brighthouse from a list of 1,500 possibilities, concluding it conveys the optimism and simplicity they want the new company to represent, a person familiar with the company’s thinking said. The team used online surveys and queries of about 1,300 consumers and financial advisers to winnow the possibilities, the person said.
Brighthouse will create life-insurance and retirement-income products for sale in the U.S. to consumers through securities brokerages, financial advisers and other outside sales forces.
“Our optimistic outlook on what we will create for people’s financial futures, coupled with our guiding principles of simplicity and transparency, are captured in our name, Brighthouse,” MetLife Executive Vice President Eric Steigerwalt, who will head the new company, said in a news release Thursday. The new company will be based in Charlotte, N.C.
MetLife will retain its longstanding Snoopy logo, at least for now. The company, which is in the middle of a multiyear contract for the use of Snoopy and related Peanuts’ cartoon characters, “will evaluate how, when and where to use all of our brand assets, including Peanuts,” a spokeswoman said.
The divestiture is part of an effort by CEO Steven Kandarian to separate the parts of the company with the best growth prospects, such as overseas operations, from parts where growth is either slower or the products require especially thick capital cushions. Regulators often require such cushions to better ensure an insurer can fulfill promises to consumers.
“As a separate entity, Brighthouse will benefit from greater focus and more flexibility in products and operations,” Mr. Kandarian said in the statement.
MetLife is proceeding with the divestiture even though a federal judge in March struck down the company’s 2014 designation as a “systemically important financial institution” by a panel of federal regulators. The panel is appealing the ruling.
In its Thursday release, MetLife said it continues “to evaluate options regarding the structure and timing of the separation.”