With earnings season in the insurance industry in full swing, MetLife Inc (MET 1.49%) was among the companies that reported third quarter earnings on Thursday.

And its results were not bad at all: Operating earnings per share topped analyst estimates and the insurance company saw robust growth in everything from premiums to operating earnings and its book value.

With its roaring insurance business and strong financial performance, MetLife has made the case once again for why it deserves a higher equity valuation.

1. Exceeding analyst expectations
MetLife reported operating earnings per share of $1.60 in the third quarter, which compares against $1.34 per share a year ago, an increase of 19%, and against analysts' consensus estimate of $1.38 per share.

With a solid earnings beat, MetLife follows in the footsteps of other insurance companies, mainly property and casualty insurance franchises, that also reported a decent third quarter.

2. Healthy insurance business
Not everything is perfect all the time, but MetLife certainly has few reasons to complain.

Robust premium growth across product groups and geographies allowed MetLife to report third quarter premiums, fees and other revenues of $12.7 billion, up 8% from $11.8 billion a year ago.

MetLife's America's business continues to do well and remains the most important geography for the company: Premiums, fees & other revenues jumped 9% to $9.5 billion year-over-year, while its operating earnings were up almost 14% to $1.5 billion. The America's, in fact, accounted for 82% of MetLife's total operating income. If the U.S. is doing well, MetLife is doing well, too.

And MetLife's other financial accomplishments look just as impressive: Its total operating income increased 22% year-over-year to $1.8 billion, and its total book value per share rose by 17% to $61.44.

In other words: Both MetLife's top and bottom line have seen strong momentum in the third quarter, which gives more than enough reason to question the currently depressed valuation of the insurance franchise.

3. Valuation
At the moment, MetLife trades at just 0.84x book value, even though shareholders can ask for little more with respect to third quarter results.

In addition, a richer valuation could specifically be justified by higher prospective net investment earnings in the coming years as higher interest rates kick in.



4. Cyclical tailwinds from higher interest rates
Insurance companies like MetLife are cyclical companies. If economic activity is high, MetLife can expect to benefit from higher demand for its insurance products and from positive effects on its insurance pricing. But MetLife does not only have to rely on premium growth, cost controls and prudent insurance risk selection to drive value for shareholders.

Higher interest rates are another source of income for MetLife and could play a crucial role for its profitability in the future-- because interest rates have nowhere to go but up, which should lead to higher investment portfolio returns for MetLife.

In the third quarter, MetLife reported net investment income of $5.2 billion, up nearly 4% on a year-over-year basis. While that is a great result, the real story is that net investment income accounted for a massive 29% of MetLife's total operating revenues of $17.9 billion.

This percentage also holds for MetLife's nine month period: $15.4 billion was the amount earned by MetLife's investments, representing 29% of its total operating revenues year-to-date in 2014.

Source: MetLife Third Quarter Earnings Release

Strong investment results, of course, have an immediately positive impact on MetLife's earnings. With higher interest rates, MetLife could see further tailwinds for both its operating revenues as well as its bottom line in the years ahead.

Despite its fundamentally attractive growth profile, MetLife still trades at a valuation that looks low to me, especially factoring in its 2.6% dividend yield (according to S&P Capital IQ). Higher interest rates down the road, and higher net investment income as a result, however, could be a strong catalyst for a higher equity valuation of MetLife.