MetLife, Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• New Frontier Strategy: Launched a year ago with four priorities (growth, capital deployment, speed, discipline). Group benefits added ~$100M in new adjusted premiums, fees, etc., in 2025; voluntary PFOs up 10%. Tapped US retail retirement space via Chariot Re flow reinsurance; originated $14B in pension risk transfers.
• Acquisition and Segment Evolution: Acquired PineBridge Investments, forming MIM with $742B AUM. Asia and Latin America saw strong constant currency sales growth (Asia +18%, Latin America +12% constant currency).
• Capital Deployment and Returns: Deployed ~$4B for organic growth, returned ~$4.4B to shareholders (via repurchases and dividends), funded acquisitions. Achieved 10% adjusted EPS growth, 16% adjusted ROE, 11.7% direct expense ratio in 2025, ahead of schedule on expense ratio target

Segment Performance

• Group Benefits: Fourth quarter adjusted earnings were $465 million, contributing to full-year adjusted earnings ex notables of $1.7 billion. Adjusted PFOs for the fourth quarter and full year 2025 were up 2% year over year. Excluding the impact of participating life contracts, growth would be 4%. Life mortality trended favorably, dental repricing returned to target profitability, but disability experience trailed expectations.
• Retirement and Income Solutions (RIS): Q4 adjusted earnings were $454 million, up 18%, driven by higher variable investment income. RIS delivered substantial inflows in 2025 with record sales of $42 billion, including over $14 billion in pension risk transfers and $11 billion in UK longevity transactions.
• Asia: Q4 adjusted earnings totaled $444 million, and $1.6 billion for the year. Strong annual sales growth from new products, especially foreign currency-denominated products in Japan and Korea, led to general account assets under management advancing 7% on a constant currency basis in 2025.
• Latin America: Q4 adjusted earnings were $227 million, up 13%. Business momentum was strong, supported by digital platform expansion and strategic partnerships. The segment is on a pathway to $1 billion in annual earnings over the near term.
• EMEA: Q4 adjusted earnings were $97 million, close to the run rate implied by the 2026 outlook. Adjusted PFOs were up 21% on a constant currency basis.
• MetLife Investment Management (MIM): Reported as a standalone segment for the first time, MIM had adjusted earnings of $60 million in 2025 versus $16 million in 2024. AUM was $742 billion at year-end, up from $600 billion a year ago.
• Corporate and Other: Reported an adjusted loss of $38 million in 2025, compared to an adjusted loss of $72 million in 2024. Primary drivers were favorable investment and expense margins, partially offset by less favorable life underwriting margins

Guidance

• Overall: Expect double-digit adjusted EPS growth, 15%-17% adjusted ROE, maintain direct expense ratio target. 2026 guidance: adjusted EPS growth, adjusted ROE 15%-17%, free cash flow ratio 65%-75%, share repurchases in line with 2025.
• Segment-Specific: Group benefits: PFO growth 4%-7%, group life mortality ratio 83%-88%, nonmedical health ratio 70%-75%. RIS: retained liability exposures grow 3%-5%, adjusted earnings $1.6B-$1.8B. Asia: sales mid-high single digits constant currency, AUM mid-single digits growth. Latin America: adjusted PFOs high single digits growth, earnings 6%-8% in 2026. EMEA: adjusted PFOs high single digits growth, earnings $90M-$100M quarterly run rate in 2026. MIM: revenues grow ~30% in 2026, adjusted earnings $240M-$280M in 2026

Risks

• Macro and market environment volatility.
• Impact of real estate accounting changes.
• Competition in various markets.
• Uncertainty in pension risk transfer and reinsurance transactions

Question and Answer

Q: Jimmy Bhullar on group benefits renewal season, pricing, competition A: Rami Tadros on robust persistency and renewals, dental pricing, disability strength Q: Tom Gallagher on real estate accounting change A: John McCallion on alignment with economics, GAAP-only impact Q: Joel Hurwitz on US retail retirement space update, Japan surrenders A: Rami Tadros on flow reinsurance deals, Lyndon Oliver on surrender trends Q: Suneet Kamath on AI impact on group benefits, Japan capital dividend A: Rami Tadros on employment actions incorporation, John McCallion on Japan dividend capacity Q: Wesley Carmichael on group disability experience, paid family leave opportunity A: Rami Tadros on disability pressure factors, paid family leave as growth opportunity Q: Alex Scott on corporate loss projection, AI investment portfolio exposure A: John McCallion on reinsurance transactions, seasonality, AI exposure