Adjusted Earnings: $1.3 billion or $1.96 per share, up 7% from the same period a year ago. Adjusted Return on Equity: 14.4% for the first quarter. Direct Expense Ratio: 12% for the first quarter. Group Benefits Adjusted Earnings: $367 million, up 29% from the prior year period. Retirement and Income Solutions Adjusted Earnings: $401 million in the quarter. Asia Adjusted Earnings: $374 million, down 12% from the same period a year ago. Latin America Adjusted Earnings: $218 million, down 6% from the year-ago period. Capital Returned to Shareholders: $1.8 billion through common stock dividends and share repurchases. New Share Repurchase Authorization: $3 billion, with total board authorization at $3.4 billion. Cash and Liquid Assets: $4.5 billion at holding companies, above the target cash buffer of $3 billion to $4 billion. US Statutory Adjusted Capital: Approximately $16.4 billion as of March 31, 2025. Japan Solvency Margin Ratio: Expected to be approximately 725% as of March 31.

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Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

MetLife Inc (NYSE:MET) reported adjusted earnings of $1.3 billion or $1.96 per share, up 7% from the same period a year ago. The company saw favorable underwriting, good volume growth, and better variable investment income in the quarter. MetLife Inc (NYSE:MET) announced a significant risk transfer deal with Talcott Resolution Life Insurance Company to reinsure approximately $10 billion of US retail variable annuity and rider reserves. The company returned around $1.8 billion to shareholders through common stock dividends and share repurchases in the first quarter. MetLife Inc (NYSE:MET) has been named among the 100 best companies to work for by Fortune for the third year in a row.

Negative Points

Adjusted earnings in Asia were down 12% over the same period a year ago due to lower underwriting margins and higher taxes. Latin America adjusted earnings were down 6% from the year-ago period, impacted by foreign exchange rates. The company experienced a decline in spreads in the RIS business due to lower rates and a flatter curve than expected. MetLife Holdings adjusted earnings were down 3% due to the runoff of the business. The company faced challenges in the current environment, making it difficult to predict private equity returns.

Q & A Highlights

Q: Can you explain the decline in spreads in the Retirement and Income Solutions (RIS) business and whether this trend will continue? A: John McCallion, Executive Vice President and CFO, explained that the decline in spreads was due to the roll-off of interest rate caps and unexpected paydowns in higher-yielding structured securities. Despite these challenges, growth in liability balances exceeded expectations, and spreads are expected to stabilize in the second quarter.

Story Continues

Q: How is the current economic environment affecting MetLife's capital management and expense strategy? A: Michel Khalaf, President and CEO, stated that while the possibility of a recession has increased, MetLife's strategy remains unchanged. The company continues to focus on executing its strategic pillars and managing discretionary expenses, while maintaining confidence in its financial standing and capital management actions.

Q: Can you provide details on the risk transfer deal with Talcott Resolution Life Insurance Company? A: Ramy Tadros, Regional President, U.S. Business, explained that the deal involves reinsuring approximately $10 billion of US retail variable annuity and rider reserves. This transaction aligns with MetLife's strategy to reduce tail risk and capital requirements, while the economic value received was in line with expectations.

Q: What is the outlook for MetLife's group benefits business, particularly in terms of premium growth? A: Ramy Tadros noted that the reported 2% growth was impacted by favorable mortality in participating contracts and dental rate actions. Excluding these factors, underlying growth was about 4%. The company expects full-year growth to align with its 4% to 7% guidance, with no change to the earnings outlook.

Q: How is MetLife's Asia business performing, and what are the expectations for sales growth? A: Lyndon Oliver, Regional President, Asia, reported a strong start to the year with a 10% increase in sales across the region. Japan showed sequential growth, and a new product launch in the bank channel is expected to sustain momentum. Sales in other Asian markets, particularly China and Korea, were also robust.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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