MetLife (MET) 2025 Conference September 03, 2025 10:05 AM ET Company ParticipantsRyan Krueger - Managing DirectorMichel Khalaf - CEO, President & DirectorJohn McCallion - EVP, CFO & Head - MetLife Investment ManagementRyan KruegerAlright. Well, I guess we're mic'd up, so we might as well get started. Alright. I'm Ryan Krueger, life insurance analyst at KBW. It's great to have MetLife back with us again this year.Up on stage with me to my immediate right is Michelle Koloff, present and CEO. To the far right ...

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]