(Bloomberg News) MetLife Inc. will expand in emerging markets, add sales of accident-and-health protection in the U.S. and scale back from capital-intensive products such as variable annuities as it works to reverse a stock slump.

The largest U.S. life insurer plans to raise return on equity to between 12 percent and 14 percent by 2016, from 10.3 percent in 2011, it said today in a statement. New York-based MetLife is targeting $600 million in expense savings and an increase in its emerging-markets business to 20 percent or more of operating earnings from a projected 14 percent this year.

Chief Executive Officer Steven Kandarian is reducing variable annuity sales to limit the risk of equity-market declines and exiting banking to reduce U.S. oversight. The insurer has dropped about 30 percent in the past year as the Federal Reserve rejected Kandarian's plans for share repurchases and a dividend increase as part of its review of how the largest companies in banking would withstand another financial crisis.

"The riskier your overall portfolio is perceived or is, either one, whether it is or perceived, it still goes through to your stock price," Kandarian said today in a presentation to investors. "The goal is to shift toward a more predictable earnings stream and stronger free cash flows."

MetLife slipped 11 cents to $30.96 at 4 p.m. in New York. The stock is down less than 1 percent since Dec. 31, compared with the 6.2 percent slide at Prudential Financial Inc., the No. 2 U.S. life insurer. Newark, New Jersey-based Prudential said at its investor day yesterday that it is targeting a 13 percent return on equity for next year.

U.S. Cost Cuts

In the U.S., Kandarian will introduce accident and health products, the company said in the statement. MetLife may also expand vision coverage and is developing a direct sales business as more people are expected to buy life insurance online.

About 60 percent of the cost reductions will be in the U.S., and the unit focusing on sales to individuals "will have the largest portion of this contribution," said William Wheeler, president of the Americas. "We do expect our mature businesses to shoulder most of the impact."

Wheeler highlighted the company's leadership in lines of coverage sold through employers, such as disability and dental policies, and said MetLife may be able to increase prices for some segments. These businesses are attractive because they have less risk tied to capital markets, the company said.

Turkey, Brazil

MetLife may acquire businesses in developing countries including Russia, Turkey, Brazil and China, where the firm projects increasing demand as the number of middle-class consumers grows, according to a slide presentation today.