MetLife, Inc. Q1 FY2025 earnings call

Michel Khalaf introduced MetLife's New Frontier strategy. The company reported adjusted earnings of $1.3 billion or $1.96 per share, up 7% from the same period a year ago. Group Benefits had favorable life underwriting margins due to lower mortality. RIS had strong U.S. PRT sales with inflows of $1.8 billion in Q1. Asia had lower underwriting margins but healthy growth metrics like 5% growth in general account assets under management on a constant currency basis. Latin America had strong top line performance with adjusted PFOs up on a constant currency basis. The company announced a significant risk transfer deal with Talcott Resolution Life insurance company to reinsure ~$10 billion of U.S. retail variable annuity and rider reserves. MetLife accelerated capital management activity, returning ~$1.8 billion to shareholders through common stock dividends and share repurchases. The Board increased the common dividend per share by 4.1% and was active in the debt capital markets, issuing $1.25 billion of pre-capitalized trust securities and $1 billion of subordinated debt.

Group Benefits reported adjusted earnings of $367 million, up 29% from the prior year period. Retirement and Income Solutions (RIS) adjusted earnings totaled $401 million. Asia adjusted earnings were $374 million, down 12% over the same period a year ago. Latin America adjusted earnings were $218 million, down 6% from the year ago period, but up 7% on a constant currency basis. Adjusted PFOs in Latin America were up 1% on a reported basis but up 14% on a constant currency basis. Group Benefits adjusted PFOs were up 2% year-over-year. RIS adjusted PFOs were $2.4 billion, primarily driven by strong U.S. PRT sales. Asia's general account assets under management at amortized cost was up 5% year-over-year on a constant currency basis, and sales were up 10% on a constant currency basis. Latin America's top line continued to perform well, with adjusted PFOs up 1% on a reported basis but 14% on a constant currency basis.

Subsequent quarters are expected to have a more measured share repurchase pace. The total Board authorization for share repurchases is now about $3.4 billion. The company plans to disclose preliminary information regarding expectations for variable investment income in early July. The full year direct expense ratio target is 12.1%.

Uncertain economic environment with rising odds of a recession, significant volatility in the U.S. equity markets, interest rate fluctuations (long end up, middle down, short end high), and the U.S. dollar weakening against many currencies.

Q: Hi, good morning. I had a question first on your spreads in the RIS business...

A: John McCallion and Ramy Tadros discussed RIS spreads, noting growth exceeding expectations and factors like rates and curve offsetting affecting spreads, with expectation of stabilization.

Q: Good morning. First question is on the risk transfer deal...

A: Ramy Tadros and John McCallion talked about the risk transfer deal, emphasizing it lowers tail risk, is in line with valuation expectations, and considers the cost of hedging.

Q: Yes, thanks. Good morning. First question was more high level...

A: Michel Khalaf responded on capital management strategy, stating a more measured repurchase pace and focus on funding organic growth, strategic inorganic opportunities, and returning excess capital.

Q: Thanks, good morning. Just wanted to ask on the buyback...

A: Michel Khalaf explained that April repurchases were in line with plans, with a more measured pace going forward.

Q: Hi, good morning. First question on variable investment income...

A: John McCallion discussed VII performance, noting private equity and real estate funds returns, and the plan to provide preliminary info on variable investment income in early July.

Q: Hey, good morning. We just worked on an analysis of portfolio yield...

A: John McCallion talked about the attractiveness of MetLife's risk-adjusted return and ongoing organic growth pipeline.

Q: Hey good morning. Can you unpack the nonmedical health loss experience in the quarter...

A: Ramy Tadros responded on nonmedical health performance, noting dental underwriting actions and disability performance in line with expectations.

Q: Hi, good morning. Thanks. Just wanted to touch on Group Life...

A: Ramy Tadros discussed Group Life's mortality favorability and guidance ratios.

Q: Hi, good morning. Thanks. Just wanted to touch on Chariot Re...

A: Michel Khalaf provided an update on Chariot Re, stating progress is on track with plans to launch around midyear.