Core Insights - MetLife has launched a new 5-year strategy called "New Frontier" which was introduced at an Investor Day last December [2] - The company is currently in the early stages of implementing this strategy, having only a couple of quarters of progress to report [2] Strategy Overview - "New Frontier" strategy differs from the previous "Next Horizon" strategy, focusing on key components that have evolved to meet current market demands [2] - The presentation includes insights from key executives, including the President and CEO, and the CFO, indicating a strong leadership commitment to the new strategy [1]

Financial Data and Key Metrics Changes - The company reported a return on equity (ROE) of 15.2% last year, with a new target of 15% to 17% under the New Frontier strategy, indicating a strong improvement from the previous target of 12% to 14% [5][10] - Group sales grew by 9% in the first half of the year, with liability balances increasing by 6%, surpassing the previously committed range of 3% to 5% [9][10] Business Line Data and Key Metrics Changes - The group benefits business raised its premium and fee growth target to 4% to 7% from 4% to 6%, reflecting confidence in driving top-line growth [16] - The retirement income solutions (RIS) business achieved a 6% growth in total liability balances in the second quarter, with expectations to remain within the 3% to 5% growth range for the year [29] Market Data and Key Metrics Changes - In Asia, sales increased by 10% in Japan and over 40% in Korea during the first half of the year, driven by demographic and economic shifts [38] - The company has seen strong growth momentum in Latin America, with earnings more than doubling since the pandemic, and a target of reaching $1 billion in earnings [46][50] Company Strategy and Development Direction - The New Frontier strategy focuses on extending leadership in group benefits, leveraging global retirement platforms, accelerating growth in MetLife Investment Management, and expanding presence in key international markets [6][7] - The company aims to reach $1 trillion in assets under management (AUM) for MetLife Investment Management [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of the New Frontier strategy, highlighting strong early momentum and strategic initiatives such as acquisitions and reinsurance transactions [8][10] - The company anticipates continued strong performance in the second half of the year, particularly in group benefits and retirement income solutions [22][30] Other Important Information - The company launched Chariot Re, a Bermuda-based reinsurer, to augment capital generation and support growth opportunities in retirement solutions [35][37] - The implementation of the economic solvency ratio (ESR) in Japan is expected to have a seamless transition for the company, with no significant impact on dividend capacity [43][45] Q&A Session Summary Question: What are the plans to improve the direct expense ratio? - Management plans to reduce the direct expense ratio by 100 basis points over the next five years, with an evenly distributed reduction expected [11][12] Question: How is the group benefits business driving growth? - The company is focusing on adding more products for existing employers and increasing employee participation, leveraging its comprehensive product portfolio [18][21] Question: What is the outlook for the retirement income solutions business? - The RIS business is expected to maintain a healthy growth trajectory, benefiting from diversification and demographic trends [29][30] Question: How is the company managing capital allocation? - The company prioritizes organic growth, strategic M&A, and maintaining an attractive dividend yield, with a history of significant buybacks [57][60]

Super Microb Broadcom, Lamb Research, AMD, and Nvidia some of the worst performers. But my next guest sees longer term opportunity in both tech and financials, saying investment rather than consumption is where the growth is more likely to be. So joining me now to talk it through is Drew Mattis, chief market strategist at Metife Investment Management.Uh Drew, thank you so much for being here today. First, I kind of want to get to your take on the data. It's sort of hard to talk about markets without talking ...

Financial Data and Key Metrics Changes - The company recorded a consolidated pro forma turnover of approximately $1,570 million, marking a 20% increase compared to the same period in 2024 [5] - Pro forma EBITDA advanced by 21%, reaching around $234 million, resulting in a margin of 16.1% [11] - Gross sales increased by 20.3%, reaching around $1,670 million, while operating profit increased by 17.7% to approximately $92.3 million [11] - Pro forma net loss was reported at $4.2 million due to significant foreign exchange losses [11][18] Business Line Data and Key Metrics Changes - Clinics accounted for 37% of total sales, with a 20% growth driven by a 13% rise in the number of visits and a 6% increase in average fees [13] - Hospitals represented about 28% of total sales, growing by 38% due to increased patient numbers and higher average fees [15] - Laboratories accounted for 11% of total sales, posting an 18% year-on-year growth driven by a 21% increase in lab tests performed [15] - Corporate accounts remained largely flat, with a 1.2% decline in subscriptions offset by a 0.9% increase in average fees [16] Market Data and Key Metrics Changes - The dental services market contracted, with a 5.5% decline in sales, attributed to increased competition and market dynamics [14] - The pharmacy segment grew by 13%, driven by a 22% increase in average spend per client [16] - The overall market for medical services is influenced by purchasing power, particularly for elective services [17] Company Strategy and Development Direction - The company is focusing on strategic investments in technology and innovation, particularly in robotic surgery and AI integration [6][10] - There is a commitment to expanding genetic testing and sequencing projects to enhance access to personalized medicine [9][11] - The company plans to maintain a low capital expenditure approach in the short term, prioritizing operational efficiency [10][21] Management's Comments on Operating Environment and Future Outlook - Management expects to maintain a stable trajectory while adapting to the evolving macroeconomic environment [9] - The company is closely monitoring potential impacts on purchasing power due to recent fiscal measures [9][17] - There is confidence in achieving budget targets for the full year, despite challenges from foreign exchange losses [38] Other Important Information - The company completed several acquisitions to strengthen its market position, including RoutineMed Group and All Clinic [6] - A significant investment of over €2 million was made in diagnostic infrastructure, enhancing the company's capabilities [8] - The net debt to pro forma EBITDA ratio remains stable at 3.72% as of June 2025 [18][19] Q&A Session Summary Question: What is the negative EBITDA from new hospital units and their breakeven timeline? - Management indicated that two large hospitals are close to breakeven, with expectations for positive results by the end of the year [22][23] Question: What is the estimated impact of VAT on costs? - The estimated impact of a 2% to 3% VAT increase is around €2 million per year, which is not considered significant [26][27] Question: What are the expectations for capital expenditures? - Capital expenditures are expected to remain low, with no significant investments planned for the third or fourth quarters [28][30] Question: How will rising energy costs affect the company? - Management does not foresee a major impact from rising energy costs, estimating a potential annual impact of €1 to €2 million [35][36] Question: What is the outlook for personnel expenses and public sector salary caps? - Recent government measures are expected to positively impact personnel expenses, with more doctors from the public sector willing to negotiate [42] Question: How does management plan to address currency risk? - Management is actively monitoring currency risks and has strategies in place to mitigate potential impacts [45][46]

Financial Data and Key Metrics Changes - The company recorded a consolidated pro forma turnover of approximately $1,570 million, representing a 20% increase compared to the same period in 2024 [5] - Pro forma EBITDA increased by 21%, reaching around $234 million, with a margin of 16.1% [11] - Gross sales increased by 20.3%, reaching around $1,670 million, while operating expenses rose by 10.9% to approximately $1,360 million [11] - The pro forma net loss was reported at $4.2 million, influenced by a foreign exchange loss of around $83 million [11][21] Business Line Data and Key Metrics Changes - Clinics accounted for 37% of total sales, with a 20% growth driven by a 13% rise in the number of visits and a 6% increase in average fees [13] - Hospitals represented about 28% of total sales, growing by 38% due to increased patient numbers and investments in technology [15] - Laboratories accounted for 11% of total sales, posting an 18% year-on-year growth, driven by a 21% increase in lab tests performed [16] Market Data and Key Metrics Changes - The corporate segment accounted for 9.75% of total sales, remaining largely flat compared to the previous year, with a 1.2% decline in subscriptions offset by a 0.9% increase in average fees [17] - The pharmacy segment represented 2.4% of total sales, with revenues growing by 13% due to a 22% increase in average spend per client [18] Company Strategy and Development Direction - The company is focusing on strategic investments in technology and innovation, particularly in robotic surgery and AI integration [6][9] - There is a commitment to expanding genetic testing capabilities, with an initial investment of €3 million for advanced sequencing technology [8] - The company plans to maintain a stable trajectory while adapting to the evolving macroeconomic environment, with a focus on operational efficiency [9][10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a stable net debt to pro forma EBITDA ratio, despite challenges from foreign exchange fluctuations [22] - The company is preparing for various scenarios due to macroeconomic challenges, including potential impacts from VAT increases [20] - Management anticipates that new hospital units will reach breakeven by the end of the year, contributing positively to overall performance [26][28] Other Important Information - The company completed several acquisitions to strengthen its market position, including RoutineMed Group and All Clinic [6] - Capital expenditures for the second half of the year are expected to remain low, with no significant investments planned [23] Q&A Session Summary Question: What is the current negative EBITDA from new hospital units and their breakeven timeline? - Management indicated that two large hospitals are close to breakeven, with expectations for positive results by mid-year [25][26] Question: What is the estimated impact of VAT increases on costs? - The estimated impact of a 2% to 3% VAT increase is around €2 million per year, which is not considered significant [29][30] Question: What are the expectations for capital expenditures in the near term? - Management confirmed that capital expenditures will be low, with no large investments planned for at least the third quarter [31][32] Question: How are rising energy costs affecting the company? - Management stated that rising energy costs are not expected to have a major impact, estimating a potential annual effect of €1 to €2 million [37][38] Question: What is the outlook for the full year in line with second-quarter results? - Management aims to fulfill the budget presented earlier in the year, despite challenges from foreign exchange rates [40][41]

Financial Performance - Total revenues for Q2 2025 were $17,340 million, a decrease of 2.7% compared to $17,823 million in Q2 2024[20] - Net income attributable to MetLife, Inc. for Q2 2025 was $729 million, down from $946 million in Q2 2024, representing a decline of 22.9%[20] - Premiums collected in Q2 2025 amounted to $10,810 million, a decrease of 7.0% from $11,628 million in Q2 2024[20] - Basic earnings per share for Q2 2025 were $1.04, down from $1.28 in Q2 2024, a decrease of 18.8%[20] - Comprehensive income attributable to MetLife, Inc. for Q2 2025 was $1,118 million, compared to a loss of $19 million in Q2 2024[20] - Net income for the first half of 2025 was $1,674 million, compared to $1,613 million in the same period of 2024, representing a 3.8% increase[24] - Comprehensive income for the first half of 2025 was $2,402 million, compared to $1,084 million in the first half of 2024, showing a significant increase of 121.1%[24] - Total consolidated adjusted earnings for the six months ended June 30, 2025, were $2,808 million, a decrease from $3,063 million in the same period of 2024, reflecting a decline of 8.3%[71] - The company reported a net income of $1,685 million for the six months ended June 30, 2025, down from $1,828 million in 2024, a decrease of 7.8%[71] Assets and Liabilities - Total assets increased to $702,470 million as of June 30, 2025, compared to $677,457 million at the end of 2024, reflecting a growth of 3.8%[17] - Total liabilities increased to $674,543 million, compared to $649,754 million at the end of 2024, marking a rise of 3.8%[17] - Policyholder account balances rose to $232,433 million, up 5.5% from $221,445 million at the end of 2024[17] - Total stockholders' equity as of June 30, 2025, was $27,927 million, up from $27,540 million at the end of June 2024, indicating a growth of 1.4%[23] - The company's future policy benefits liabilities totaled $198,965 million as of June 30, 2025, up from $193,646 million at the end of 2024, representing an increase of 2.3%[74] Investment Income - The company reported net investment income of $5,661 million in Q2 2025, an increase of 8.8% from $5,205 million in Q2 2024[20] - Net investment income for the six months ended June 30, 2025, was $8,164 million, up from $7,481 million in 2024, indicating an increase of 9.1%[71] - Net investment income for the three months ended June 30, 2025, was $310 million, slightly down from $313 million in the same period of 2024, indicating a decrease of about 1%[66] Segment Performance - The Group Benefits segment offers a wide range of products including life insurance and disability insurance, contributing significantly to the company's revenue[40] - The Retirement and Income Solutions segment provides various life and annuity-based products, enhancing the company's investment management capabilities[41] - The Asia segment continues to expand its offerings in life insurance and retirement savings, targeting both individuals and corporations[42] - Adjusted earnings for the Group Benefits segment in Q2 2025 were $400 million, compared to $533 million in Q2 2024, reflecting a decline of approximately 25%[66] - The Asia segment generated adjusted earnings of $350 million in Q2 2025, down from $449 million in Q2 2024, a decrease of approximately 22%[66] - Total segment revenues for the six months ended June 30, 2025, were $36,372 million, compared to $35,281 million in 2024, reflecting a growth of 3.1%[71] Cash Flow and Capital Management - Net cash provided by operating activities for the six months ended June 30, 2025, was $6,449 million, an increase from $5,818 million in 2024, representing an increase of 10.8%[25] - Cash flows from investing activities resulted in a net outflow of $6,303 million for the six months ended June 30, 2025, compared to a net outflow of $3,967 million in 2024, indicating a significant increase in investment activity[25] - Treasury stock acquired in connection with share repurchases for the first half of 2025 amounted to $2,939 million, compared to $2,046 million in the same period of 2024, representing a 43.6% increase[24] Future Outlook - The company anticipates continued challenges in the economic environment, impacting future performance and financial results[10] - The acquisition of PineBridge Investments is expected to close by the end of 2025, with a total transaction value of $1.2 billion, including $800 million in cash at closing[72] Accounting and Reporting - The company is evaluating the impact of recent accounting standards updates on its consolidated financial statements, which may affect future disclosures and financial reporting[37]

Core Insights - MetLife, Inc. reported second-quarter 2025 adjusted operating earnings per share (EPS) of $2.02, missing the Zacks Consensus Estimate by 7.8% and declining 11% year over year [1][11] - Adjusted operating revenues decreased 4.1% year over year to $17.9 billion, also missing the consensus mark by 2.6% [1][11] Financial Performance - Weaker quarterly results were attributed to poor performance in Asia, lower underwriting results, less favorable investments, and declining earnings in group benefits, RIS, and MetLife Holdings [2][11] - Adjusted PFOs, excluding pension risk transfer (PRT), were $12.4 billion, growing 5% year over year [3] - Adjusted net investment income increased by 1% year over year to $5.2 billion due to asset growth [3] - Total expenses were $16.4 billion, down 1.6% year over year, driven by decreased policyholder benefits and claims [4] - Net income fell 23% year over year to $698 million, with adjusted return on equity deteriorating 270 basis points to 14.6% [4] Segment Performance - Group Benefits: Adjusted earnings declined 25% year over year to $400 million, below the consensus estimate of $468.6 million [5] - RIS: Adjusted earnings totaled $368 million, down 10% year over year, missing the consensus mark of $376.2 million [6] - Asia: Adjusted earnings fell 22% year over year to $350 million, lagging behind the consensus estimate of $397.6 million [7] - Latin America: Adjusted earnings rose 3% year over year to $233 million, exceeding the consensus mark of $227 million [8] - EMEA: Adjusted earnings advanced 30% year over year to $100 million, surpassing the consensus estimate of $76.1 million [9] - MetLife Holdings: Adjusted earnings decreased 5.9% year over year to $144 million, beating the consensus mark of $142.1 million [10] Financial Position - As of June 30, 2025, MetLife had cash and cash equivalents of $22.2 billion, up from $20.1 billion at the end of 2024 [13] - Total assets increased to $702.5 billion from $677.5 billion at the end of 2024 [13] - Long-term debt rose to $15.4 billion from $15.1 billion as of December 31, 2024 [13] - Total equity was $27.9 billion, up from $27.7 billion at the end of 2024 [13] - Book value per share grew 7.5% year over year to $35.79 [14] Capital Deployment - MetLife repurchased shares worth approximately $510 million in the second quarter and an additional $140 million in July 2025 [15] - The company paid a dividend of $382 million during the quarter [15] Future Outlook - Management expects variable investment income of around $1.7 billion for 2025 and anticipates Corporate & Other adjusted losses between $850 million and $950 million [16] - Adjusted PFOs in Group Benefits are projected to rise 4-7% annually over the next three years [17] - MetLife aims for an adjusted return on equity in the range of 15-17% and expects free cash flow to exceed $25 billion [18]

Financial Data and Key Metrics Changes - Adjusted earnings for Q2 2025 were reported at $1.4 billion or $2.2 per share, reflecting a 16% decrease year-over-year due to less favorable underwriting and lower investment margins [8][21] - The adjusted return on equity was 14.6%, above the cost of capital and near the mid-teen target range [9] - Free cash flow allowed the company to return approximately $900 million to shareholders through dividends and share repurchases [9][18] Business Segment Data and Key Metrics Changes - Group Benefits adjusted earnings were $400 million, down 25% from the previous year due to less favorable life and non-medical health underwriting [10][22] - Retirement and Income Solutions (RIS) reported adjusted earnings of $368 million, down 10% year-over-year, primarily due to lower recurring interest margins [12][24] - Asia adjusted earnings were $350 million, down 22% year-over-year, with sales up 9% on a constant currency basis [14][26] - Latin America adjusted earnings totaled $233 million, up 3% and 15% on a constant currency basis, driven by volume growth [28] - EMEA posted adjusted earnings of $100 million, up 30% year-over-year, primarily due to strong volume growth [29] Market Data and Key Metrics Changes - Total liability exposures increased by 6% year-over-year, driven by growth in UK longevity reinsurance [13] - General account assets under management in Asia rose by 6% year-over-year on a constant currency basis [14][27] - Adjusted premiums, fees, and other revenues in Group Benefits grew by 4% from a year ago [10][23] Company Strategy and Development Direction - The company is executing its "new frontier growth strategy," focusing on managing expenses, returning capital to shareholders, and capitalizing on market trends [7][19] - Strategic partnerships, such as with Workday, aim to enhance the benefits experience and drive sales growth [11] - Recent acquisitions and strategic transactions, including Pinebridge Investments and Chariot Re, are expected to support growth in investment management [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on commitments despite the current economic environment [7] - The company anticipates improvements in underwriting and investment margins in the upcoming quarters [39] - Management noted that the current quarter's earnings do not fully reflect the company's earnings power, with expectations for better performance in the second half of the year [36] Other Important Information - The company repurchased approximately $500 million of its common stock in Q2, bringing the total year-to-date repurchases to over $2 billion [18][34] - Cash and liquid assets at holding companies were reported at $5.2 billion, exceeding the target buffer range [18][34] - The effective tax rate on adjusted earnings was approximately 24%, at the bottom end of the guidance range [30] Q&A Session Summary Question: Observations on elevated claims in the non-medical health sector - Management indicated that the elevated claims were not surprising and attributed them to normal fluctuations, expecting improvements in the third and fourth quarters [38][39] Question: Outlook for Chariot Re and sidecars - Management sees Chariot Re as a growth vehicle, focusing on MetLife-originated liabilities and expects more transactions in the future [44][46] Question: Strong sales in Japan and Korea - Management highlighted strong sales performance driven by new product launches and expects this momentum to continue [49][50] Question: Stability of retirement spreads - Management expects core spreads to remain stable, with some seasonal impacts anticipated in Q3 [54][56] Question: Analysis of disability claims - Management clarified that the pressure on disability claims was due to specific high-value claims and not indicative of broader trends [61][63] Question: Update on the PRT market - Management noted a lighter quarter for PRT but expects jumbo cases to transact in the second half of the year, maintaining a disciplined pricing approach [95][97] Question: Implementation of Gen AI - Management expressed excitement about AI's potential, emphasizing ongoing investments in technology to enhance efficiency and drive growth [100][102]

Financial Data and Key Metrics Changes - Adjusted earnings for the second quarter were reported at $1.4 billion or $2.2 per share, reflecting a 16% decrease year-over-year due to less favorable underwriting and investment margins [7][21] - The adjusted return on equity was 14.6%, well above the cost of capital and near the mid-teen target range [8] - Free cash flow allowed the company to return approximately $900 million to shareholders through dividends and share repurchases [8][18] Business Segment Data and Key Metrics Changes - Group Benefits adjusted earnings were $400 million, down 25% from the previous year due to less favorable life and non-medical health underwriting [8][22] - Retirement and Income Solutions (RIS) reported adjusted earnings of $368 million, down 10% year-over-year, primarily due to lower recurring interest margins [11][24] - Asia adjusted earnings were $350 million, down 22% year-over-year, with sales up 9% on a constant currency basis [13][26] - Latin America adjusted earnings totaled $233 million, up 3% and 15% on a constant currency basis, driven by volume growth [14][28] - EMEA adjusted earnings were $100 million, up 30% on both a reported and constant currency basis, primarily due to strong volume growth [15][29] Market Data and Key Metrics Changes - Total liability exposures increased by 6% year-over-year, exceeding the 2025 outlook range of 3% to 5% [12] - In Japan, sales increased by 29% on a constant currency basis, while Korea saw a 36% increase year-over-year [13][50] - EMEA's quarterly run rate is expected to remain above its 2025 guidance of $70 million to $75 million for the remainder of the year [29] Company Strategy and Development Direction - The company is executing its "New Frontier" growth strategy, focusing on managing expenses, returning capital to shareholders, and capitalizing on market trends [6][19] - Strategic partnerships, such as with Workday, are aimed at enhancing the benefits experience and driving sales growth [10][15] - Recent acquisitions and partnerships, including Pinebridge Investments and Chariot Re, are expected to support growth in the investment management platform [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on commitments despite the current economic environment [6] - The company anticipates improvements in underwriting and investment margins in the upcoming quarters [39][72] - Management noted that the current quarter's results do not fully reflect the company's earnings power, with expectations for better performance in the second half of the year [19][36] Other Important Information - The company has repurchased approximately $2 billion of its common stock year-to-date, with a total of nearly $16 billion repurchased since 2021 [18][34] - Cash and liquid assets at holding companies were reported at $5.2 billion, exceeding the target buffer range [18][34] - The effective tax rate on adjusted earnings was approximately 24%, at the bottom end of the 2025 guidance range [30] Q&A Session Summary Question: Observations on elevated claims in the sector - Management indicated that the elevated claims were not surprising and expected improvements in the non-medical health ratio in the upcoming quarters [38][39] Question: Outlook for Chariot Re and growth opportunities - Management views Chariot Re as a vehicle for growth, focusing on MetLife-originated liabilities and anticipating more transactions [44][46] Question: Strong sales in Japan and Korea - Management reported strong sales performance driven by new product launches and expects to remain at the top end of guidance for Asia sales [49][52] Question: Stability of retirement spreads - Management expects core spreads to remain stable, with some seasonality anticipated in Q3 [53][56] Question: Analysis of disability claims - Management clarified that the pressure on disability claims was related to specific clients and not indicative of broader trends [61][62] Question: Update on commercial mortgage loan reserves - Management acknowledged an increase in reserves for commercial mortgages, indicating it reflects stabilization in the market [65][66] Question: Implementation of Gen AI - Management expressed excitement about the potential of AI, highlighting ongoing investments and improvements in processes to leverage emerging technologies [98][100]

2Q25 Supplemental Slides1 John McCallion Chief Financial Officer and Head of MetLife Investment Management 1 These slides highlight information in MetLife, Inc.'s earnings release, quarterly financial supplement and other prior public disclosures. Table of contents | Topic | Page No. | | --- | --- | | Net income (loss) to adjusted earnings | 3 | | Adjusted earnings by segment and Corporate & Other (C&O) | 4 | | Variable investment income (VII) | 5 | | Direct expense ratio | 7 | | Cash & capital | 8 | | Appe ...