(Bloomberg) -- MetLife Inc. CEO Steve Kandarian said the potential for gains in developing nations outweighs the cost of this year’s volatility.

“Recent turmoil in certain emerging markets does not change our view of the long-term attractiveness in our emerging-markets business,” Kandarian, 61, said today on a conference call with analysts. “Nothing has changed regarding the key macro drivers of middle-class growth and low levels ofinsurance penetration.”

MetLife is counting on expansion in markets from Chile to South Korea to help meet Kandarian’s 2016 goal of achieving return on equity of 12 percent to 14 percent. The insurer said yesterday it hit the low end of that range last year. Kandarian, who’s retreating from some U.S. products that expose the company to stock-market swings, said the only way to generate an “appropriate return” in insurance is to take on risk.

“Emerging-market risk is acceptable for MetLife,” Kandarian said. “It is diversifiable, and the products sold in these markets generally have more favorable risk-return profiles and growth outlooks.”

Kandarian joins Goldman Sachs Group Inc. CEO Lloyd C. Blankfein in saying emerging markets will fare better this year than in the late 1990s, when an investor retreat and currency turmoil led to international bailouts. The countries benefit from reduced external ownership of their debt, lower borrowing in foreign currencies and exchange-rate flexibility, Kandarian said, making the debt less risky than 15 years ago.

Sovereign Debt

MetLife’s portfolio of available-for-sale securities included $63.6 billion of foreign corporate bonds and $53 billion of sovereign debt from countries outside the U.S. as of Sept. 30, as measured at fair value.

MetLife makes sales in currencies including Poland’s zloty, the Russian ruble and Turkish lira. Turkey and Russia are two of the fastest-growing markets in MetLife’s European region, the insurer said in December.

The Latin America operation has exposure to fluctuations in Mexican and Chilean exchange rates, and the insurer is also working to expand in Brazil. Japan is MetLife’s largest Asian market, with South Korea accounting for as much as 10 percent of operating profit in the region in 2013.

MetLife, the largest U.S. life insurer, expanded outside its main market with the $16 billion acquisition of American Life Insurance Co. from American International Group Inc. in 2010. Alico had operations in more than 50 countries at the time. The company acquired Chilean pension provider AFP Provida SA last year for about $2 billion.

MetLife yesterday reported that operating earnings increased in the fourth quarter from a year earlier in its Latin America, Asia and Europe, Middle East, and Africa businesses. Net income climbed to $908 million from $127 million in the same period of 2012.

‘Growing Quickly’

“There are two MetLifes,” Eric Berg, an analyst at RBC Capital Markets, said in a research note today. “One, slow growing and mature, is operating in the developed world,” he said. “The other MetLife is the developing-world MetLife, a company seemingly growing quickly.”

MetLife slipped 1.6 percent to $49.08 at 10:51 a.m. in New York. The insurer has surged 31 percent in the past 12 months.

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