MET

Overall Quarterly Performance

• Reported net income of $705 million ($1.09 per share); adjusted total earnings of $1.6 billion ($2.43 per share). Adjusted EPS grew 20% year-over-year (19% constant currency), adjusted ROE reached 17% at the top end of the 15-17% target range.
• Growth was broad-based across all segments, driven by favorable underwriting margins, strong volume growth, and higher investment margins, partially offset by less favorable expense margins.

Capital Deployment & Financial Strength

• MetLife maintains a strong capital and liquidity position, with holding company cash and liquid assets of $3.4 billion at quarter-end, within the $3 to $4 billion target buffer.
• During Q2, the company repurchased $700 million of common shares; through July 2026, $2.4 billion has been returned to shareholders via buybacks and dividends. A new $3 billion share repurchase authorization was announced, reflecting confidence in long-term capital generation.
• Capital allocation priorities are unchanged: 1) fund responsible organic growth in areas with structural advantages and attractive risk-adjusted returns; 2) pursue inorganic acquisitions that add strategic capabilities and meet strict financial value creation criteria; 3) return excess capital to shareholders over time.
• Reinsurance and third-party capital are used to support additional retirement origination while creating assets for MEM to manage, enabling more capital efficient growth and enterprise-wide value extension.

Strategy & Diversification

• The company's "New Frontier" strategy of complementary capital-light and capital-driven earnings engines is performing as intended, creating a more balanced, durable earnings profile and strong foundation for long-term shareholder value creation.
• Diversification across the enterprise delivers stable performance, with all segments benefiting from the scale and shared capabilities of the broader MetLife platform.

• Full-year 2026 adjusted earnings for MEM are expected to land within the $240 to $280 million guidance range, likely toward the low end of the range; 2027 guidance for MEM remains unchanged.
• The 2026 annual adjusted direct expense ratio target of 12.1% is still on track to be beaten, after absorbing the 50bps impact from the PineBridge Investments acquisition.
• The company's 2026 adjusted effective tax rate guidance range of 24-26% is maintained; Q2 2026 effective tax rate was 23% below this range.
• Retained liability growth for RAS in 2026 is still expected to land within the 3-5% target range.
• RAS core spread is expected to remain in the 95-100bps range in the second half of 2026, with Q2 core spread expected to land around the midpoint of the range due to real estate return seasonality.
• For Japan's fiscal year ending March 31, 2026, the initial Economic Solvency Ratio (ESR) is now expected to be at the top end of the 170-190% range, up from the prior expectation of the middle of the range.
• Group life mortality for full-year 2026 is expected to moderate after Q2's outsized favorability, returning closer to trend, in line with the 2026 target range.

1. Group Benefits: Adjusted earnings of $503 million, up 25% year-over-year, contributing ~31.4% of total adjusted earnings. Year-to-date sales up 9%, adjusted PFOs up 1% (4% excluding participating contracts). Group life mortality ratio was 79%, below the 2026 target range of 83-88%; non-medical health adjusted benefit ratio was 73.9%, within the 70-75% annual target range.
2. RAS (Retirement & Income Solutions): Adjusted earnings of $377 million, up 2% year-over-year, contributing ~23.6% of total adjusted earnings. Adjusted PFOs excluding pension risk transfers (PRT) up 19%, driven by growth in UK longevity reinsurance and structured settlements. Retained liability exposures grew 3% year-over-year, at the low end of the 2026 3-5% growth target. Total investment spread was 97bps (below 100-120bps guidance) due to weak private equity returns; core spread excluding variable investment income (VII) was 100bps, up 5bps sequentially.
3. Asia: Adjusted earnings of $420 million, up 21% year-over-year (25% constant currency), contributing ~26.3% of total adjusted earnings. General account AUM up 6% (constant currency), sales up 17% (constant currency), with 2% year-over-year sales growth in Japan and strong traction in Korea from new product launches.
4. Latin America: Adjusted earnings of $268 million, up 15% year-over-year (4% constant currency), contributing ~16.8% of total adjusted earnings. Sales up 9% (constant currency), adjusted PFOs up 16% (6% constant currency), with broad-based growth led by Brazil, Mexico, and Chile. Results were partially offset by a Mexico VAT policy change.
5. Amiya: Adjusted earnings of $108 million, up 8% year-over-year (11% constant currency), contributing ~6.8% of total adjusted earnings. Adjusted PFOs up 12%, sales up 15% (constant currency), driven by strong sales and renewal momentum.
6. MetLife Investment Management (MEM): Adjusted earnings of $57 million, up 6% year-over-year, contributing ~3.6% of total adjusted earnings. Total AUM increased $12 billion sequentially to $748 billion, with a $7 billion increase in institutional client AUM. Operating margin improved 410bps in the quarter.
7. Corporate: Reported an adjusted loss of $160 million, compared to a $142 million loss year-over-year. The larger loss reflected foregone earnings from prior-year strategic reinsurance transactions and elevated market-related employee costs, partially offset by favorable life underwriting margins.

• Variable investment income (VII) is volatile quarter-to-quarter, driven by lagged mark-to-market accounting for private equity and real estate fund holdings; Q2 2026 VII was below the implied quarterly run rate due to weaker private equity returns.
• The PRT market experienced lighter activity in the first half of 2026, creating lumpiness in annual RAS growth results.
• Mortality improvement varies by age cohort, with faster improvements in working-age populations than older/retiree cohorts, creating uneven underwriting results across business segments.
• Higher expense impacts from the PineBridge Investments acquisition pressured near-term expense margins, though this was absorbed via strong premium growth and expense discipline.
• Policy changes such as Mexico's VAT adjustment created negative impacts on Latin America earnings, partially offsetting strong operating results in the region.

Q: What geographic and product areas is MetLife currently prioritizing for potential M&A opportunities? / A: Management says its M&A philosophy and high bar for value creation has not changed. The most likely target areas remain asset management (following the completed PineBridge Investments acquisition) and group benefits, where the company is open to adding adjacent capabilities like pet insurance, vision, and identity theft protection, though no gaps in the current offering require immediate acquisitions. The firm will remain opportunistic in other areas and maintains strict capital discipline for all deals.

Q: Favorable working-age group life mortality has driven strong recent results; if this favorability continues, will MetLife have to cut prices for customers? / A: Management notes Q2 2026 had an extra 2 percentage points of mortality favorability from prior period adjustments and lower-than-expected claim severity, with early July data already showing this is starting to normalize. They expect mortality results to moderate for the rest of 2026 back to trend, and will adjust pricing as appropriate if sustained long-term improvements emerge.

Q: How is PRT market growth looking for 2026 after the record 2025, and what is driving growth outside of large US PRT deals? / A: Management notes PRT activity is naturally lumpy after 2025's record close, but the long-term macro outlook is very strong, with $3 trillion in defined benefit pension assets at solid funding levels and persistent corporate demand to offload risk. MetLife, as a leading market player, has expanded growth into UK funded reinsurance (a PRT-aligned reinsurance product), with over $1 billion written year-to-date at attractive returns, keeping the firm on track to hit its full-year 3-5% retained liability growth target.

Q: Why has MetLife gradually reduced its private equity allocation in recent quarters, and will this trend continue? / A: The trend of modestly declining private equity allocation is a multi-year plan driven by the current higher interest rate environment. Runoff from the seasoned portfolio is expected to continue outpacing new contributions, but the firm will still invest in the space, and has previously monetized positions opportunistically while retaining third-party asset management capabilities for private equity funds. Only a modest overall decline is expected over time.

Q: How is MetLife achieving strong steady sales growth in Japan despite ongoing industry turmoil from yen and interest rate volatility? / A: Strong sales across Asia (including Japan) are driven by three key factors: large, diversified distribution networks that are well-positioned across the market, consistent product innovation including first-to-market U.S. dollar and local currency products tailored to current market conditions, and strong consistent execution across the business. This momentum has continued into July 2026 after a strong first half.