A $US44 million ($57 million) drop in reinsurance inflows in MetLife’s Australian operation has hit Asia-wide financial results for the three months to June 30.

The life insurer’s operating earnings for Asia fell 39% to $US259 million ($338 million) in the quarter.

Operating premium and other revenue in Asia was down 8% to $US2.1 billion ($2.7 billion).

Total sales for the region dropped 3%, reflecting the impact of MetLife’s action to improve value in targeted markets such as Japan – where the business plans a reduction in yen-based life sales and a shift to sales of foreign-currency life policies.

Excluding Japan, Asia sales grew 19%, driven by Australia, Hong Kong and South Korea.

Globally, MetLife has reported a 48% drop in operating earnings to $US924 million ($1.2 billion) for the quarter to June 30.

Aside from the reinsurance charge in Australia, the insurer recorded additional reserving costs, a $US15 million ($19.5 billion) hit for catastrophes and lower investment income.

Total revenue for the quarter fell 6% to $US15.2 billion ($19.8 billion).

Premiums and fees dropped 1% to $US12.1 billion ($15.8 billion) and net investment income was down 6% to $US4.9 billion ($6.3 billion).

The value of MetLife’s investment portfolio was up by $US266 million ($347 million) for the three months, compared with a $US133 million ($173 million) decline in the corresponding period last year.

But it suffered a $US2 billion ($2.6 billion) net loss from derivatives, compared with a $US912 million ($1.1 billion) loss in the corresponding period last year.

Chairman and CEO Steven Kandarian says the results were hit by market factors, a variable annuity actuarial assumption review, and a reserve adjustment based on modelling improvements.

“We continued to make significant progress on actions intended to create long-term value, including our Accelerating Value initiative and the planned separation of a substantial portion of the US retail business,” he said.