Q3 2024 MetLife Inc Earnings Call - Pre-Recorded

John McCallion: For the third quarter of 2024. To start, net income for the third quarter stood at $1.3 billion, a significant increase from the $422 million reported in the same period last year, mainly due to net derivative gains partially offset by market risk-benefit remeasurement losses. MetLife generated adjusted earnings of $1.4 billion in the third quarter, compared to $1.5 billion a year ago. Excluding notable items, adjusted earnings were $1.4 billion. On a per-share basis, adjusted earnings were $1.95, down 1% from the prior year. Excluding notable items, adjusted earnings per share were $1.93. During the third quarter, MetLife conducted its annual review of global actuarial assumptions underlying the estimate of certain insurance assets and liabilities. This review, as well as other insurance adjustments, delivered a positive impact of $10 million on net income and resulted in a positive $16 million of notable items impacting adjusted earnings.

John McCallion: For the third quarter of 2024. To start, net income for the third quarter stood at $1.3 billion, a significant increase from the $422 million reported in the same period last year, mainly due to net derivative gains partially offset by market risk-benefit remeasurement losses. MetLife generated adjusted earnings of $1.4 billion in the third quarter, compared to $1.5 billion a year ago. Excluding notable items, adjusted earnings were $1.4 billion. On a per-share basis, adjusted earnings were $1.95, down 1% from the prior year. Excluding notable items, adjusted earnings per share were $1.93. During the third quarter, MetLife conducted its annual review of global actuarial assumptions underlying the estimate of certain insurance assets and liabilities. This review, as well as other insurance adjustments, delivered a positive impact of $10 million on net income and resulted in a positive $16 million of notable items impacting adjusted earnings.

John McCallion: Now, let's turn to our business segments, where we look at adjusted earnings excluding the notable items. Group Benefits adjusted earnings were $431 million, an 11% decline from the prior year period, primarily driven by less favorable non-medical health underwriting measured against a quarter of strong underwriting a year ago. Adjusted PFOs were up 5%, primarily driven by strong growth in national accounts. Retirement and Income Solutions adjusted earnings were $368 million, down 10%, driven by lower recurring interest margins, partially offset by volume growth and favorable underwriting. This was in line with expectations we communicated earlier in the year due to the business having hedges that were running off. RAS total liability exposures grew approximately 6% year over year, as sales were up 42% year to date, driven by most products, including Pension Risk Transfer deals.

Now, let's turn to our business segments, where we look at adjusted earnings excluding the notable items. Group Benefits adjusted earnings were $431 million, an 11% decline from the prior year period, primarily driven by less favorable non-medical health underwriting measured against a quarter of strong underwriting a year ago. Adjusted PFOs were up 5%, primarily driven by strong growth in national accounts. Retirement and Income Solutions adjusted earnings were $368 million, down 10%, driven by lower recurring interest margins, partially offset by volume growth and favorable underwriting. This was in line with expectations we communicated earlier in the year due to the business having hedges that were running off. RAS total liability exposures grew approximately 6% year over year, as sales were up 42% year to date, driven by most products, including Pension Risk Transfer deals.

John McCallion: In Asia, adjusted earnings were $347 million, down 6% on a reported basis and down 5% on a constant currency basis, driven by lower recurring interest margins, partially offset by favorable underwriting. Sales were down 1% on a constant currency basis, with lower sales in Japan, offset by growth in India and China. In Latin America, adjusted earnings were $217 million, up 9% on a reported basis and up 21% on a constant currency basis. The primary drivers were higher Chilean and Encaje returns and volume growth in key markets. On a constant currency basis, adjusted PFOs increased 11%, driven by strong sales and solid persistency across the region. Within the EMEA region, adjusted earnings of $75 million increased 7% as reported and 9% when accounting for constant currency due to volume growth across the region.

John McCallion: In Asia, adjusted earnings were $347 million, down 6% on a reported basis and down 5% on a constant currency basis, driven by lower recurring interest margins, partially offset by favorable underwriting. Sales were down 1% on a constant currency basis, with lower sales in Japan, offset by growth in India and China. In Latin America, adjusted earnings were $217 million, up 9% on a reported basis and up 21% on a constant currency basis. The primary drivers were higher Chilean and Encaje returns and volume growth in key markets. On a constant currency basis, adjusted PFOs increased 11%, driven by strong sales and solid persistency across the region. Within the EMEA region, adjusted earnings of $75 million increased 7% as reported and 9% when accounting for constant currency due to volume growth across the region.

John McCallion: EMEA adjusted PFOs were up 14% on a constant currency basis due to strong sales across the region. Finally, in MetLife Holdings, adjusted earnings were down 17%, primarily as a result of the reinsurance transaction completed in 2023. Further details regarding the performance of our business segments can be found in our earnings release dated 30 October 2023. Here are some key enterprise metrics. MetLife's adjusted return on equity was 14.6%, which is at the top end of our target range of 13% to 15%, and book value per common share was $54.72. Turning to cash and capital management, cash and liquid assets at our holding companies was $4.5 billion as of 30 September 2023, above our target cash buffer of $3 to $4 billion. Our ability to generate strong free cash flow enables us to invest in our growth as well as return capital to shareholders.

EMEA adjusted PFOs were up 14% on a constant currency basis due to strong sales across the region. Finally, in MetLife Holdings, adjusted earnings were down 17%, primarily as a result of the reinsurance transaction completed in 2023. Further details regarding the performance of our business segments can be found in our earnings release dated 30 October 2023. Here are some key enterprise metrics. MetLife's adjusted return on equity was 14.6%, which is at the top end of our target range of 13% to 15%, and book value per common share was $54.72. Turning to cash and capital management, cash and liquid assets at our holding companies was $4.5 billion as of 30 September 2023, above our target cash buffer of $3 to $4 billion. Our ability to generate strong free cash flow enables us to invest in our growth as well as return capital to shareholders.

John McCallion: This was clear in Q3. We bought back $800 million of our common shares and paid approximately $400 million in common stock dividends. In addition, our board of directors recently declared a Q4 common stock dividend of $0.54 per share, reflecting our ongoing confidence in our business. To conclude, our strong business fundamentals and our relentless execution are driving positive results across our diversified set of market-leading businesses. While generating attractive returns for our shareholders, we performed well across key metrics such as return on equity and an expense ratio significantly better than our target. Our efficiency mindset creates capacity to invest in new capabilities and growth opportunities. Overall, we are executing against our Next Horizon strategy and maintaining momentum in our businesses. Thank you for watching.

This was clear in Q3. We bought back $800 million of our common shares and paid approximately $400 million in common stock dividends. In addition, our board of directors recently declared a Q4 common stock dividend of $0.54 per share, reflecting our ongoing confidence in our business. To conclude, our strong business fundamentals and our relentless execution are driving positive results across our diversified set of market-leading businesses. While generating attractive returns for our shareholders, we performed well across key metrics such as return on equity and an expense ratio significantly better than our target. Our efficiency mindset creates capacity to invest in new capabilities and growth opportunities. Overall, we are executing against our Next Horizon strategy and maintaining momentum in our businesses. Thank you for watching.