Metlife Q4 2025 MetLife Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 MetLife Inc Earnings Call
Speaker #1: Ladies and gentlemen, thank you for standing by. Welcome to the METLIFE fourth quarter and full year 2025 earnings and outlook conference call. At this time, all participants are in the listen-only mode.
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Fourth Quarter and Full Year 2025 Earnings and Outlook Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. Before we get started, I refer you to the cautionary note about forward-looking statements in yesterday's earnings release and to risk factors discussed in MetLife's SEC filings. With that, I will turn the call over to John Hall, Global Head of Investor Relations. Please go ahead.
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Fourth Quarter and Full Year 2025 Earnings and Outlook Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. Before we get started, I refer you to the cautionary note about forward-looking statements in yesterday's earnings release and to risk factors discussed in MetLife's SEC filings. With that, I will turn the call over to John Hall, Global Head of Investor Relations. Please go ahead.
Speaker #1: Later, we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. Before we get started, I refer you to the cautionary note about forward-looking statements in yesterday's earnings release and to risk factors discussed at METLIFE's SEC filings.
Speaker #1: With that, I will turn the call over to John Hall, global head of investor relations. Please go
Speaker #2: Thank you, Operator, and good morning, everyone. We appreciate you joining us for METLIFE's fourth quarter 2025 earnings and near-term outlook call. Before we begin, I point you to the information on non-GAAP measures on the investor relations portion of METLIFE.com in our earnings release and in our review.
John Hall: Thank you, operator, and good morning, everyone. We appreciate you joining us for MetLife's Q4 2025 earnings and near-term outlook call. Before we begin, I point you to the information on non-GAAP measures on the investor relations portion of metlife.com, in our earnings release, and in our quarterly financial supplements, which you should review. On the call this morning are Michel Khalaf, President and Chief Executive Officer, and John McCallion, Chief Financial Officer and Head of MetLife Investment Management. Also available to participate in the discussion are other members of senior management. Last night, we released an earnings call presentation, which addresses the quarter as well as our near-term outlook. It is available on our website. John McCallion will speak to this presentation in his prepared remarks. An appendix to the deck features outlook sensitivities, disclosures, GAAP reconciliations, and other information, which you should also review.
John Hall: Thank you, operator, and good morning, everyone. We appreciate you joining us for MetLife's Q4 2025 earnings and near-term outlook call. Before we begin, I point you to the information on non-GAAP measures on the investor relations portion of metlife.com, in our earnings release, and in our quarterly financial supplements, which you should review. On the call this morning are Michel Khalaf, President and Chief Executive Officer, and John McCallion, Chief Financial Officer and Head of MetLife Investment Management. Also available to participate in the discussion are other members of senior management. Last night, we released an earnings call presentation, which addresses the quarter as well as our near-term outlook. It is available on our website. John McCallion will speak to this presentation in his prepared remarks. An appendix to the deck features outlook sensitivities, disclosures, GAAP reconciliations, and other information, which you should also review.
Speaker #2: On the call this morning are Michel Khalaf, President quarterly financial supplements which you should and Chief Executive Officer in John McCallion, Chief Financial Officer and Head of METLIFE Investment Management.
Speaker #2: Also available to participate in the discussion are other members of senior management. Last night, we released an earnings call presentation which addresses the quarter as well as our near-term outlook.
Speaker #2: It is available on our website. John McCallion will speak to this presentation in his prepared remarks. An appendix to the deck features outlook sensitivities disclosures GAAP reconciliations and other information which you should also review.
Speaker #2: After prepared remarks, we will have a Q&A session which will end promptly at the top of the hour. As a reminder, please limit yourself to one question and one follow-up.
John Hall: After prepared remarks, we will have a Q&A session, which will end promptly at the top of the hour. As a reminder, please limit yourself to one question and one follow-up. With that, over to Michel.
John Hall: After prepared remarks, we will have a Q&A session, which will end promptly at the top of the hour. As a reminder, please limit yourself to one question and one follow-up. With that, over to Michel.
Speaker #2: With that, over to
Speaker #2: Michel. Thank
Speaker #3: you, John, and good morning, everyone. When we launched new frontier a year ago, we introduced four strategic priorities with a greater emphasis on growth.
Michel A. Khalaf: Thank you, John, and good morning, everyone. When we launched New Frontier a year ago, we introduced four strategic priorities with a greater emphasis on growth. Over the past 12 months, we have advanced these strategic priorities, growing our business responsibly, deploying capital soundly, and operating with speed and discipline, all while navigating a dynamic market and economic environment. Reinforcing our market leadership, our best-in-class group benefits business added approximately $600 million of new adjusted premiums, fees, and other revenues in 2025, with higher margin voluntary PFOs rising 10% year-over-year. Scale, technology, and discipline continue to drive this attractive business forward. We capitalized on our unique retirement platform by seeding a sidecar, Chariot Re, tapping the US retail retirement space via floor reinsurance, and originating more than $14 billion of pension risk transfer sales, MetLife's highest ever annual PRT total.
Michel A. Khalaf: Thank you, John, and good morning, everyone. When we launched New Frontier a year ago, we introduced four strategic priorities with a greater emphasis on growth. Over the past 12 months, we have advanced these strategic priorities, growing our business responsibly, deploying capital soundly, and operating with speed and discipline, all while navigating a dynamic market and economic environment. Reinforcing our market leadership, our best-in-class group benefits business added approximately $600 million of new adjusted premiums, fees, and other revenues in 2025, with higher margin voluntary PFOs rising 10% year-over-year. Scale, technology, and discipline continue to drive this attractive business forward. We capitalized on our unique retirement platform by seeding a sidecar, Chariot Re, tapping the US retail retirement space via floor reinsurance, and originating more than $14 billion of pension risk transfer sales, MetLife's highest ever annual PRT total.
Speaker #3: Over the past 12 months, we have advanced these strategic priorities growing our business responsibly deploying capital soundly and discipline all while navigating a dynamic operating with speed and market and economic environment.
Speaker #3: Reinforcing our market leadership, our best-in-class group benefits business added approximately $600 million of new adjusted premiums, fees, and other revenues in 2025 with higher margin voluntary PFOs rising 10% technology and discipline continue to drive this attractive business year over year.
Speaker #3: forward. We capitalized on our unique retirement platform by seeding a sidecar chariotry tapping the US retail retirement space via floor insurance and originating more than $14 billion of pension risk transfer Scaled sales METLIFE's highest ever annual total.
Speaker #3: PRT To accelerate growth and asset management, we closed on the acquisition of Pine Bridge Investments and established a new business segment At year-end, MIM had METLIFE Investment Management.
Michel A. Khalaf: To accelerate growth and asset management, we closed on the acquisition of PineBridge Investments and established a new business segment, MetLife Investment Management. At year-end, MIM had $742 billion of assets under management, up from roughly $600 billion a year ago. Our high-growth international markets demonstrated their strategic importance with impressive growth rates. In 2025, Asia saw constant currency sales jump 18%, aided by a strong contribution from Japan, while Latin America saw constant currency sales rise by 12%, with Mexico leading the charge. Our business growth has been fueled by sound capital deployment and capital management, and 2025 was a seminal year for MetLife on this front.
Michel A. Khalaf: To accelerate growth and asset management, we closed on the acquisition of PineBridge Investments and established a new business segment, MetLife Investment Management. At year-end, MIM had $742 billion of assets under management, up from roughly $600 billion a year ago. Our high-growth international markets demonstrated their strategic importance with impressive growth rates. In 2025, Asia saw constant currency sales jump 18%, aided by a strong contribution from Japan, while Latin America saw constant currency sales rise by 12%, with Mexico leading the charge. Our business growth has been fueled by sound capital deployment and capital management, and 2025 was a seminal year for MetLife on this front.
Speaker #3: management up from roughly $600 billion a year ago. And our high growth international markets demonstrated their strategic importance with impressive growth rates in 2025.
Speaker #3: Asia saw constant currency sales jump 18% aided by a strong contribution from Japan while Latin America saw constant currency sales rise by 12% with Mexico leading the charge.
Speaker #3: Our business growth has been fueled by sound capital deployment and capital management. And 2025 was a seminal year for METLIFE on this front. We expect to have deployed close to $4 billion to support organic new business in 2025 driven in part by the PRT origination and the Asia and Latin mentioned.
Michel A. Khalaf: We expect to have deployed close to $4 billion to support organic new business in 2025, driven in part by the PRT origination and the Asia and LatAm sales production that I just mentioned. We returned roughly $2.9 billion to shareholders via common stock repurchase and another $1.5 billion through common stock dividends, bringing the total to approximately $4.4 billion. We did this while funding about $1.2 billion of acquisitions and business investments, including PineBridge and Mesero, making two investments in Chariot Re, as well as boosting our investment in PNB MetLife, our India joint venture. We executed several strategic reinsurance transactions. Among these were two separate deals with Chariot Re, totaling about $11 billion of liabilities, and a risk transfer agreement with Talcott, totaling $10 billion of liabilities.
Michel A. Khalaf: We expect to have deployed close to $4 billion to support organic new business in 2025, driven in part by the PRT origination and the Asia and LatAm sales production that I just mentioned. We returned roughly $2.9 billion to shareholders via common stock repurchase and another $1.5 billion through common stock dividends, bringing the total to approximately $4.4 billion. We did this while funding about $1.2 billion of acquisitions and business investments, including PineBridge and Mesero, making two investments in Chariot Re, as well as boosting our investment in PNB MetLife, our India joint venture. We executed several strategic reinsurance transactions. Among these were two separate deals with Chariot Re, totaling about $11 billion of liabilities, and a risk transfer agreement with Talcott, totaling $10 billion of liabilities.
Speaker #3: We returned roughly $2.9 sales production that I just billion to shareholders via common stock re-purchase and another $1.5 billion through common stock dividends bringing the total to approximately $4.4 billion.
Speaker #3: We did this while funding about $1.2 billion
Speaker #1: Of and acquisitions investments , Massaro , including Pine Bridge and business two investments making in Tree Cherry PNB , investment our boosting MetLife , as our India well as joint in venture , and we several executed Tree as boosting our , as well investment in PNB , our India MetLife , joint venture , and we executed several strategic reinsurance transactions Among these were with Cherry Tree two separate deals .
Speaker #1: totaling about $11 billion of liabilities , and a transfer agreement with Talco totaling liabilities risk . $10 billion of When we frontier strategic last year , priorities we established fresh set a of five year also commitments that underscore Metlife's superior value .
Speaker #1: totaling about $11 billion of liabilities , and a transfer agreement with Talco totaling liabilities risk . $10 billion of When we frontier strategic last year , priorities we established fresh set a of five year also commitments that underscore Metlife's superior value financial introduced our new Items we committed achieving to 15 to 17% adjusted a return on equity for the year .
Michel A. Khalaf: When we introduced our New Frontier strategic priorities last year, we also established a fresh set of five-year financial commitments that underscore MetLife's superior value proposition. These commitments not only serve to challenge us, but more importantly, to hold us accountable. We committed to achieving double-digit adjusted EPS growth over the time frame, recognizing this will not always be a linear path. In 2025, we delivered roughly 10% adjusted EPS growth, excluding notable items. We committed to achieving a 15% to 17% adjusted return on equity. For the full year, ex notable items, we delivered 16%. We committed to shaving 100 basis points over five years to achieve a direct expense ratio of 11.3%.... In 2025 alone, aided by AI and other emerging technologies, we lowered our direct expense ratio to 11.7%, putting us well ahead of schedule.
Michel A. Khalaf: When we introduced our New Frontier strategic priorities last year, we also established a fresh set of five-year financial commitments that underscore MetLife's superior value proposition. These commitments not only serve to challenge us, but more importantly, to hold us accountable. We committed to achieving double-digit adjusted EPS growth over the time frame, recognizing this will not always be a linear path. In 2025, we delivered roughly 10% adjusted EPS growth, excluding notable items. We committed to achieving a 15% to 17% adjusted return on equity. For the full year, ex notable items, we delivered 16%. We committed to shaving 100 basis points over five years to achieve a direct expense ratio of 11.3%.... In 2025 alone, aided by AI and other emerging technologies, we lowered our direct expense ratio to 11.7%, putting us well ahead of schedule.
Speaker #1: It's full notable we We delivered 16% . committed to shaving points over five to years achieve direct expense a 100 basis ratio of in 11.3% 2025 alone , and other aided by emerging technologies .
Michel A. Khalaf: Where it all comes together, free cash flow, we committed to generate $25 billion over the course of 5 years. In 2025, we made a $4.9 billion down payment toward that cumulative target. Throughout Next Horizon, and now through New Frontier, the prevailing constant has been change. The all-weather nature of our market-leading businesses position MetLife to adapt and succeed in a variety of economic environments. One year into New Frontier, it is clear we have the right strategy at the right time, focused on the right growth opportunities and measuring ourselves against the right metrics. Turning to Q4 results, we reported strong quarterly adjusted earnings of $1.6 billion, or $2.49 per share.
Michel A. Khalaf: Where it all comes together, free cash flow, we committed to generate $25 billion over the course of 5 years. In 2025, we made a $4.9 billion down payment toward that cumulative target. Throughout Next Horizon, and now through New Frontier, the prevailing constant has been change. The all-weather nature of our market-leading businesses position MetLife to adapt and succeed in a variety of economic environments. One year into New Frontier, it is clear we have the right strategy at the right time, focused on the right growth opportunities and measuring ourselves against the right metrics. Turning to Q4 results, we reported strong quarterly adjusted earnings of $1.6 billion, or $2.49 per share.
Speaker #1: We lowered our direct ratio 11.7% , putting us well schedule and to comes cash where it all flow . We together . Free committed to ahead of over the $25 billion course of five years .
Speaker #1: In 2025, in AI, we made a payment of $4.9 billion down cumulative target toward that horizon. Now, through new and next, the constant has been.
Speaker #1: throughout The all weather of our prevailing market nature businesses positioned MetLife to adapt and succeed in a variety of environments One year into New .
Speaker #1: Frontier , is clear it we have the strategy right at the time , focused on and growth opportunities measuring ourselves against the right the right metrics .
Speaker #1: to fourth quarter Turning results . We reported strong quarterly adjusted earnings of $1.6 billion , or $2.49 per share , excluding notable items , we reported $2.58 per share , up 24% compared $2.08 per share a year ago action basis .
Michel A. Khalaf: Excluding notable items, we reported $2.58 per share, up 24% compared to $2.08 per share a year ago. On an ex notable basis, this represents MetLife's highest single EPS quarter. Contributing to the outperformance in the quarter was robust underlying business momentum across most segments, aided by another consecutive quarter of improved variable investment income, which totaled $497 million. Our private equity portfolio returned 2.8% in the quarter, and we also saw a modest rebound in returns on our real estate and other funds as well. Adjusted premiums, fees, and other revenues, or PFOs, rose 8% to $12.8 billion and rose 29% to $18.6 billion when retained pension risk transfer deals are included.
Michel A. Khalaf: Excluding notable items, we reported $2.58 per share, up 24% compared to $2.08 per share a year ago. On an ex notable basis, this represents MetLife's highest single EPS quarter. Contributing to the outperformance in the quarter was robust underlying business momentum across most segments, aided by another consecutive quarter of improved variable investment income, which totaled $497 million. Our private equity portfolio returned 2.8% in the quarter, and we also saw a modest rebound in returns on our real estate and other funds as well. Adjusted premiums, fees, and other revenues, or PFOs, rose 8% to $12.8 billion and rose 29% to $18.6 billion when retained pension risk transfer deals are included.
Speaker #1: to represents This on an Metlife's highest single EPs quarter , contributing to the outperformance in the was quarter robust underlying business momentum across most segments , aided by another consecutive quarter of variable improved investment income , which totaled $497 million .
Speaker #1: Our equity private portfolio 2.8% in the quarter , and we also returned modest rebound in returns on saw a our real estate and other funds as well .
Speaker #1: premiums , fees Adjusted and other revenues or foes rose to 8% $12.8 billion and rose 29% to $18.6 billion when pension risk retained transfer deals are included for the full We reported adjusted year 2025 .
Michel A. Khalaf: For the full year 2025, we reported adjusted earnings, excluding notable items, of $6 billion, or $8.89 per share, up roughly 10%. Higher variable investment income, volume growth, and capital management drove the growth in earnings per share. As we do each Q4, we included our outlook for certain near-term targets and other elements of guidance in our earnings call presentation. This year, in view of our resegmentation, we have taken a more prescriptive approach. In a moment, John will delve into our near-term outlook in greater detail, but on a high level, it should be evident we are on track to achieve our five-year commitments for adjusted EPS, adjusted ROE, direct expense ratio, and free cash flow, among others established under New Frontier.
Michel A. Khalaf: For the full year 2025, we reported adjusted earnings, excluding notable items, of $6 billion, or $8.89 per share, up roughly 10%. Higher variable investment income, volume growth, and capital management drove the growth in earnings per share. As we do each Q4, we included our outlook for certain near-term targets and other elements of guidance in our earnings call presentation. This year, in view of our resegmentation, we have taken a more prescriptive approach. In a moment, John will delve into our near-term outlook in greater detail, but on a high level, it should be evident we are on track to achieve our five-year commitments for adjusted EPS, adjusted ROE, direct expense ratio, and free cash flow, among others established under New Frontier.
Speaker #1: excluding earnings items notable of $6 billion , $8.89 per share , or up Higher . Variable roughly 10% . income volume growth and drove the management growth in earnings capital per share we do as each fourth quarter .
Speaker #1: We included our outlook for certain near-term targets and elements of other our guidance in earnings call presentation . year . our In view of segmentation , we have This prescriptive taken a more approach in a moment , John will delve into our near-term outlook in greater detail , but on a high level , it should be evident we are on track to five year commitments for adjusted achieve our ROE , adjusted , direct ratio , free cash flow , and others .
Michel A. Khalaf: Turning to MetLife's businesses, group benefits adjusted earnings, excluding notable items, totaled $465 million in Q4, contributing to full-year adjusted earnings ex notables of $1.7 billion. Life mortality continues to trend favorably, which we expect to persist in 2026. Repricing has returned dental to target profitability, while disability experience trailed our expectations in the quarter. This year anticipates 7% to 9% growth in adjusted earnings year-over-year, driven by PFO growth and supported by underwriting. In retirement and income solutions, adjusted earnings, excluding notable items, were $454 million for the quarter, up 18%, bringing full-year adjusted earnings ex notables to $1.7 billion. For the year, RIS benefited from record origination in both PRT and UK longevity reinsurance.
Michel A. Khalaf: Turning to MetLife's businesses, group benefits adjusted earnings, excluding notable items, totaled $465 million in Q4, contributing to full-year adjusted earnings ex notables of $1.7 billion. Life mortality continues to trend favorably, which we expect to persist in 2026. Repricing has returned dental to target profitability, while disability experience trailed our expectations in the quarter. This year anticipates 7% to 9% growth in adjusted earnings year-over-year, driven by PFO growth and supported by underwriting. In retirement and income solutions, adjusted earnings, excluding notable items, were $454 million for the quarter, up 18%, bringing full-year adjusted earnings ex notables to $1.7 billion. For the year, RIS benefited from record origination in both PRT and UK longevity reinsurance.
Speaker #1: among Established under New Frontier . Turning to Metlife's businesses expense , group benefits , adjusted earnings excluding notable items , totaled $465 million in the fourth quarter , contributing to full year adjusted earnings .
Speaker #1: Ex of $1.7 billion . Life mortality continues to favorably , which we trend expect to persist in 2026 . Repricing has dental to target returned profitability , while our Experienced trailed expectations quarter in the this year , anticipates 7 to 9% growth in adjusted earnings year year , over driven by growth and PFO supported by underwriting in and retirement income solutions .
Speaker #1: Adjusted excluding notable items , were $454 million for the quarter , up 18% , bringing full year adjusted notables to for the year .
Michel A. Khalaf: For Asia, adjusted earnings ex notables totaled $444 million for the quarter and $1.6 billion for the year. Strong annual sales growth from new products, in particular foreign currency-denominated products in Japan and Korea, pushed general account assets under management to advance 7% on a constant currency basis in 2025. Looking to Latin America, adjusted earnings, excluding notable items, came to $227 million, up 13% in the quarter. Business momentum in the region has been outstanding over the past several years, supplemented by the expansion of digital platforms such as Accelerator, and growing strategic partnerships. Given the segment's strength in the quarter, it is not hard to see a pathway to $1 billion in annual adjusted earnings over the near term.
Michel A. Khalaf: For Asia, adjusted earnings ex notables totaled $444 million for the quarter and $1.6 billion for the year. Strong annual sales growth from new products, in particular foreign currency-denominated products in Japan and Korea, pushed general account assets under management to advance 7% on a constant currency basis in 2025. Looking to Latin America, adjusted earnings, excluding notable items, came to $227 million, up 13% in the quarter. Business momentum in the region has been outstanding over the past several years, supplemented by the expansion of digital platforms such as Accelerator, and growing strategic partnerships. Given the segment's strength in the quarter, it is not hard to see a pathway to $1 billion in annual adjusted earnings over the near term.
Speaker #1: Is benefited Our from record origination in both Prh and UK longevity reinsurance for Asia . Adjusted earnings notables totaled $444 million for the and quarter , $1.6 billion for the .
Speaker #1: Strong annual from new sales growth particular and foreign currency products denominated in Japan and Korea pushed general account assets under management to advance 7% on a constant currency in 2025 .
Speaker #1: Looking to Latin basis adjusted earnings , excluding America notable items , came to 13% in the up $227 million , quarter . Business momentum in the region has been outstanding over the past several years , supplemented by the digital platforms such as accelerator growing strategic partnerships .
Speaker #1: Given strength in the segment's the quarter , is not it hard to see a $1 billion in annual adjusted earnings over the near term , with EMEA , the segment continues pathway to to punch above its weight class to last year's outlook .
Michel A. Khalaf: With EMEA, the segment continues to punch above its weight class relative to last year's outlook. The segment reported Adjusted Earnings ex Notables of $97 million in the quarter, which is close to the run rate implied by our 2026 outlook. To close out business highlights, in Q4, we transitioned to new segmentation with the introduction of MetLife Investment Management as a business segment. This aligns with our New Frontier strategic priorities, reflects the critical mass we've gained with the acquisition of PineBridge, and underscores our intent to grow and further capitalize on the increasing conversions of life insurance and asset management. Moving to cash and capital, Q4 serves as an excellent reminder of MetLife's capital strength and flexibility.
Michel A. Khalaf: With EMEA, the segment continues to punch above its weight class relative to last year's outlook. The segment reported Adjusted Earnings ex Notables of $97 million in the quarter, which is close to the run rate implied by our 2026 outlook. To close out business highlights, in Q4, we transitioned to new segmentation with the introduction of MetLife Investment Management as a business segment. This aligns with our New Frontier strategic priorities, reflects the critical mass we've gained with the acquisition of PineBridge, and underscores our intent to grow and further capitalize on the increasing conversions of life insurance and asset management. Moving to cash and capital, Q4 serves as an excellent reminder of MetLife's capital strength and flexibility.
Speaker #1: The segment reported relative adjusted ex of which quarter , to the $97 million in the is close our 2026 outlook implied by run rate .
Speaker #1: And to close out business in the fourth quarter , we transitioned to new segmentation with the introduction of MetLife Investment Management as a business segment .
Speaker #1: This aligns with Frontier priorities strategic our new critical mass we've gained with the acquisition of Pinebridge and underscores our intent to grow and further capitalize on the increasing convergence of insurance and asset life management .
Michel A. Khalaf: After retiring half a billion dollars of debt, buying back around $430 million of common stock, paying roughly $370 million of common stock dividends, and funding close to $1 billion of acquisitions and other investments, we ended the year with $3.6 billion of cash and cash equivalents. This falls firmly within our target liquidity buffer of $3 to 4 billion. A final note on capital. In the month of January, we repurchased another $200 million of our common stock. We expect 2026 repurchases to be in line with 2025. To wrap up, the strategic actions we took in 2025 set the table for the coming years of New Frontier and position MetLife to deliver on our financial commitments and our superior value proposition of responsible growth and attractive returns with less risk....
Michel A. Khalaf: After retiring half a billion dollars of debt, buying back around $430 million of common stock, paying roughly $370 million of common stock dividends, and funding close to $1 billion of acquisitions and other investments, we ended the year with $3.6 billion of cash and cash equivalents. This falls firmly within our target liquidity buffer of $3 to 4 billion. A final note on capital. In the month of January, we repurchased another $200 million of our common stock. We expect 2026 repurchases to be in line with 2025. To wrap up, the strategic actions we took in 2025 set the table for the coming years of New Frontier and position MetLife to deliver on our financial commitments and our superior value proposition of responsible growth and attractive returns with less risk....
Speaker #1: Moving to cash and capital . fourth quarter serves as an The excellent reminder of Metlife's capital strength flexibility , after retiring , half $1 billion of debt , buying back around $430 million of common stock , paying $370 million of common stock dividends and funding close to $1 billion of acquisitions and other We ended the year investments .
Speaker #1: cash $3.6 billion of cash and equivalents . This firmly liquidity buffer target within our of The on capital of January , we purchased another final note $200 million of our common stock .
Speaker #1: We repurchases to be in expect 2026 line with 2025 . wrap To up the actions we strategic took in 2025 , set the table for the coming years of New position and MetLife to deliver on our financial commitments our and value superior proposition of responsible attractive growth and returns with less risk .
Michel A. Khalaf: We are entering 2026 as a stronger company with sustained business momentum and expanding market leadership. While the macro and market environments continue to evolve, we remain laser-focused on the levers we control and on relentless execution to generate responsible growth, deploy capital with rigor, and further drive operating efficiency. MetLife's financial strength feeds our ability to deliver for our shareholders as well as other stakeholders, including our customers, employees, and communities. In 2025, MetLife paid roughly $50 billion in policyholder benefits and claims and invested more than $90 billion to support our liabilities. The sheer scale of these numbers highlights the dedication of our people to MetLife's purpose, always with you, building a more confident future. I am energized by our team's commitment and look forward to the future, as there is still much for us to achieve.
Michel A. Khalaf: We are entering 2026 as a stronger company with sustained business momentum and expanding market leadership. While the macro and market environments continue to evolve, we remain laser-focused on the levers we control and on relentless execution to generate responsible growth, deploy capital with rigor, and further drive operating efficiency. MetLife's financial strength feeds our ability to deliver for our shareholders as well as other stakeholders, including our customers, employees, and communities. In 2025, MetLife paid roughly $50 billion in policyholder benefits and claims and invested more than $90 billion to support our liabilities. The sheer scale of these numbers highlights the dedication of our people to MetLife's purpose, always with you, building a more confident future. I am energized by our team's commitment and look forward to the future, as there is still much for us to achieve.
Speaker #1: We are entering 2026 as a stronger company with sustained business momentum and expanding leadership . While the market environments macro and continue to evolve , we the remain laser levers we focused on generate responsible growth .
Speaker #1: Deploy capital with rigor and further drive operating efficiency . Metlife's financial strength feeds our ability to as deliver for our shareholders , stakeholders , well as other employees .
Speaker #1: and In 2025 , communities MetLife including our paid roughly policyholder customers , benefits $50 billion in claims and invested more than liabilities . The scale of numbers these sheer dedication of people to our Metlife's purpose with you confident future .
Michel A. Khalaf: Now, I'll turn it over to John to cover our performance and outlook in greater detail.
Michel A. Khalaf: Now, I'll turn it over to John to cover our performance and outlook in greater detail.
Speaker #1: energized by our team's I am look building a the forward to there is , as future $90 billion to support our still much highlights the .
John McCallion: Thank you, Michel, and good morning, everyone. I'll review our Q4 results and refer to the Q4 earnings call presentation for financial highlights, including our near-term outlook. Starting on page 3, we made significant progress in 2025 toward our 5-year financial goals. We achieved 10% adjusted EPS growth and adjusted ROE of 16% within our target range, a 2-year average free cash flow ratio of 81%, surpassing our target, and a full-year direct expense ratio of 11.7%, also beating our target. Overall, an excellent first year, which establishes a strong foundation for our New Frontier strategy. Net income was approximately $800 million and $3.2 billion for the Q4 and full year of 2025, respectively.
John McCallion: Thank you, Michel, and good morning, everyone. I'll review our Q4 results and refer to the Q4 earnings call presentation for financial highlights, including our near-term outlook. Starting on page 3, we made significant progress in 2025 toward our 5-year financial goals. We achieved 10% adjusted EPS growth and adjusted ROE of 16% within our target range, a 2-year average free cash flow ratio of 81%, surpassing our target, and a full-year direct expense ratio of 11.7%, also beating our target. Overall, an excellent first year, which establishes a strong foundation for our New Frontier strategy. Net income was approximately $800 million and $3.2 billion for the Q4 and full year of 2025, respectively.
Speaker #1: Now I'll turn it over to cover John to performance and greater detail outlook in our
Speaker #2: Thank you , Michelle and good
Speaker #2: Morning, everyone. I'll review our fourth quarter results and fourth quarter earnings call highlights presentation for financial outlook. Starting on page three.
Speaker #2: made We significant near-term in 2025 toward our five year financial goals . We achieved 10% adjusted EPs growth and 16% within our ROE of target A two year free cash flow average .
Speaker #2: frontier quarter , and full year 2025 , of approximately . The difference between adjusted earnings income and was mostly net net attributable losses due to , primarily derivative term interest rates , favorable equity stronger US dollar markets , use .
John McCallion: The difference between net income and adjusted earnings was mostly attributable to net derivative losses, primarily due to rising long-term interest rates, favorable equity markets, and stronger US dollar. We use derivatives to hedge economic exposures, where these offsets are either reported elsewhere in the financial statements or where the offsetting economics emerge over time. In addition, net investment losses were largely the result of normal trading activity on the portfolio, and credit remained stable. We had two notable items in Q4 that reduced adjusted earnings by $61 million in the aggregate, or $0.09 per share. The notable items were the Mexico VAT impact we discussed in Q3, and higher asbestos litigation reserves recorded in corporate and other. Moving to page 4, this slide compares Q4 year-over-year adjusted earnings, excluding notable items by segment and corporate and other.
John McCallion: The difference between net income and adjusted earnings was mostly attributable to net derivative losses, primarily due to rising long-term interest rates, favorable equity markets, and stronger US dollar. We use derivatives to hedge economic exposures, where these offsets are either reported elsewhere in the financial statements or where the offsetting economics emerge over time. In addition, net investment losses were largely the result of normal trading activity on the portfolio, and credit remained stable. We had two notable items in Q4 that reduced adjusted earnings by $61 million in the aggregate, or $0.09 per share. The notable items were the Mexico VAT impact we discussed in Q3, and higher asbestos litigation reserves recorded in corporate and other. Moving to page 4, this slide compares Q4 year-over-year adjusted earnings, excluding notable items by segment and corporate and other.
Speaker #2: Derivatives to and hedge economic exposures, where offsets are either reported elsewhere in the financial statements or where offsetting the economics emerge over time.
Speaker #2: In addition , net investment result of largely the activity normal on the portfolio and credit remains stable . We had two notable fourth quarter that reduced earnings adjusted $61 million in the aggregate , or $0.09 per share by items trading .
Speaker #2: VAT impact . notable The We Mexico the third quarter and higher asbestos litigation reserves recorded in corporate and other . Moving to page for slide fourth quarter year over year compares adjusted earnings , excluding notable by items and segment corporate and other .
John McCallion: All my comments refer to figures excluding Notable Items. Adjusted Earnings rose 18%, 17% in constant currency, to $1.7 billion, driven by higher Variable Investment Income, strong volume growth, and favorable expense margins, partially offset by lower recurring interest margins. Also, we have revised our definition of Adjusted Earnings to exclude the non-cash accounting of real estate depreciation to align the impact of real estate asset value changes and better reflect the recurring cash flow and returns of the investment in Adjusted Earnings. This change increased Q4 Adjusted Earnings by $57 million and is expected to add about $200 million annually, mostly benefiting Corporate and Other. Adjusted Earnings per share were $2.58, up 24% and 23% on a constant currency basis. Growth was supported by disciplined capital management.
John McCallion: All my comments refer to figures excluding Notable Items. Adjusted Earnings rose 18%, 17% in constant currency, to $1.7 billion, driven by higher Variable Investment Income, strong volume growth, and favorable expense margins, partially offset by lower recurring interest margins. Also, we have revised our definition of Adjusted Earnings to exclude the non-cash accounting of real estate depreciation to align the impact of real estate asset value changes and better reflect the recurring cash flow and returns of the investment in Adjusted Earnings. This change increased Q4 Adjusted Earnings by $57 million and is expected to add about $200 million annually, mostly benefiting Corporate and Other. Adjusted Earnings per share were $2.58, up 24% and 23% on a constant currency basis. Growth was supported by disciplined capital management.
Speaker #2: my All comments refer to figures excluding items . Adjusted notable rose 17% in constant 18% to $1.7 billion , driven variable higher by , strong volume growth and favorable expense margins .
Speaker #2: offset by lower recurring interest margins income . have revised our Also , we definition of adjusted exclude the earnings to accounting of real estate depreciation to non-cash align the impact of asset value changes real estate and better recurring cash flow and returns of the reflect the earnings investment in .
Speaker #2: This change increased fourth quarter adjusted by $57 million and is expected adjusted to add about $200 million annually , benefiting mostly corporate and other earnings adjusted earnings per share were $2.58 , up 24% and 23% on a constant currency basis .
John McCallion: Moving to the businesses, Group Benefits adjusted earnings were $465 million, up 12% year-over-year, largely driven by favorable underwriting, primarily in life and dental, partially offset by weaker disability. The group life mortality ratio is 81.1% for the quarter and 83.1% for the full year, below our 2025 target range of 84% to 89%, reflecting continued improvement in working-age mortality trends. The Q4 non-medical health interest-adjusted benefit ratio of 72.2% was within our annual target range. Seasonally low dental utilization was in line with expectations. However, disability results came in below expectations due to higher average severity and higher incidence in the quarter, albeit within pricing expectations.
John McCallion: Moving to the businesses, Group Benefits adjusted earnings were $465 million, up 12% year-over-year, largely driven by favorable underwriting, primarily in life and dental, partially offset by weaker disability. The group life mortality ratio is 81.1% for the quarter and 83.1% for the full year, below our 2025 target range of 84% to 89%, reflecting continued improvement in working-age mortality trends. The Q4 non-medical health interest-adjusted benefit ratio of 72.2% was within our annual target range. Seasonally low dental utilization was in line with expectations. However, disability results came in below expectations due to higher average severity and higher incidence in the quarter, albeit within pricing expectations.
Speaker #2: Growth was supported by disciplined capital management . the Moving to , benefits adjusted businesses group earnings were $465 million , up year , 12% year over driven by favorable , primarily in life underwriting dental , partially offset by disability largely .
Speaker #2: The mortality group life ratio 81.1% for the was quarter , and 83.1% for the full year , below our 2025 target range of reflecting continued in working improvement age mortality trends The .
Speaker #2: The mortality group life ratio 81.1% for the was quarter , and 83.1% for the full year , below our 2025 target range of reflecting continued in working improvement age mortality trends The . 84 to 89% , fourth quarter health interest adjusted benefit ratio weaker 72.2% was of within our annual target range non-medical .
Speaker #2: Seasonally low dental utilization was in line with However , disability expectations . came in results due to below average severity higher higher quarter , albeit incidence in the within pricing and expectations .
John McCallion: Group Benefits adjusted PFOs for Q4 and full year 2025 were up 2% year-over-year. Excluding the impact of roughly 2 percentage points from participating life contracts, the growth would be 4%. RAS adjusted earnings were $454 million, up 18% year-over-year, primarily driven by higher variable investment income. Investment spreads, excluding VII, remained relatively stable at 99 basis points, up 1 basis point sequentially. RAS delivered substantial inflows in 2025, driven by record sales of $42 billion in the year. Pension risk transfers were more than $14 billion, and UK longevity transactions were $11 billion, including $7 billion in Q4.
John McCallion: Group Benefits adjusted PFOs for Q4 and full year 2025 were up 2% year-over-year. Excluding the impact of roughly 2 percentage points from participating life contracts, the growth would be 4%. RAS adjusted earnings were $454 million, up 18% year-over-year, primarily driven by higher variable investment income. Investment spreads, excluding VII, remained relatively stable at 99 basis points, up 1 basis point sequentially. RAS delivered substantial inflows in 2025, driven by record sales of $42 billion in the year. Pension risk transfers were more than $14 billion, and UK longevity transactions were $11 billion, including $7 billion in Q4.
Speaker #2: Benefits. Group adjusted FOEs fourth quarter and full for the year of 2025 was up, excluding the impact of roughly two percentage points, or 2%, year over, participating life contracts.
Speaker #2: year The growth would be 4% . Raise . Adjusted earnings $454 million , were up 18% year over year , primarily higher driven by investment income spreads VEI remained .
Speaker #2: relatively excluding stable at 99 basis one basis point points , up sequentially Arias substantial inflows in Investment 2025 , by record sales of $42 billion in the year driven .
Speaker #2: transfers Pension risk were more than $14 billion and UK longevity transactions were 11 billion , including $7 billion in the fourth quarter . The strength of this origination platform and growth throughout 2025 underscores the global demand for life and retirement solutions , as well as focus in leveraging our strategic reinsurance enhance our to capital .
John McCallion: The strength of this origination platform and growth throughout 2025 underscores the global demand for life and retirement solutions, as well as our focus in leveraging strategic reinsurance to enhance our capital flexibility to support this trend. Asia adjusted earnings were $444 million, essentially flat year-over-year, up 1% on a constant currency basis. The primary drivers were volume growth and favorable expense margins. These were partially offset by less favorable underwriting margins versus the prior year quarter, which had positive reserve refinements that benefited adjusted earnings by roughly $30 million. Asia's key top-line growth metrics were robust in the Q4 and full year of 2025. The general account assets under management at amortized costs were up 7% on a constant currency basis.
John McCallion: The strength of this origination platform and growth throughout 2025 underscores the global demand for life and retirement solutions, as well as our focus in leveraging strategic reinsurance to enhance our capital flexibility to support this trend. Asia adjusted earnings were $444 million, essentially flat year-over-year, up 1% on a constant currency basis. The primary drivers were volume growth and favorable expense margins. These were partially offset by less favorable underwriting margins versus the prior year quarter, which had positive reserve refinements that benefited adjusted earnings by roughly $30 million. Asia's key top-line growth metrics were robust in the Q4 and full year of 2025. The general account assets under management at amortized costs were up 7% on a constant currency basis.
Speaker #2: Flexibility supports this trend. Asia adjusted earnings were $444 million, essentially flat year over year, up 1% on a constant currency basis.
Speaker #2: The primary drivers were volume growth and favorable expense margins . These were partially offset by less underwriting margins favorable year prior quarter versus the , which had reserve refinements that adjusted benefited earnings by positive roughly Asia is $30 million .
Speaker #2: The primary drivers were volume growth and favorable expense margins . These were partially offset by less underwriting margins favorable year prior quarter versus the , which had reserve refinements that adjusted benefited earnings by positive roughly Asia is key top line were metrics robust in the fourth growth quarter and year full The general of 2025 .
John McCallion: Sales were up 18% on a constant currency basis on both a quarterly and a full year basis, primarily driven by Japan and Korea, our two largest markets in the region. Latin America adjusted earnings were $227 million, up 13% and up 4% on a constant currency basis, driven by volume growth across the region. Latin America's adjusted PFOs were up 25% and 16% on a constant currency basis, while sales were up 26% on a constant currency basis due to strong growth across the region, most notably in Mexico and Brazil. EMEA adjusted earnings were $97 million, up 64% on both a reported and constant currency basis. The primary drivers were robust volume growth as well as favorable underwriting margins. EMEA adjusted PFOs were up 21% and up 17% on a constant currency basis.
John McCallion: Sales were up 18% on a constant currency basis on both a quarterly and a full year basis, primarily driven by Japan and Korea, our two largest markets in the region. Latin America adjusted earnings were $227 million, up 13% and up 4% on a constant currency basis, driven by volume growth across the region. Latin America's adjusted PFOs were up 25% and 16% on a constant currency basis, while sales were up 26% on a constant currency basis due to strong growth across the region, most notably in Mexico and Brazil. EMEA adjusted earnings were $97 million, up 64% on both a reported and constant currency basis. The primary drivers were robust volume growth as well as favorable underwriting margins. EMEA adjusted PFOs were up 21% and up 17% on a constant currency basis.
Speaker #2: account assets under management at amortized costs 7% on a were up constant currency basis . Sales were up 18% on a constant currency basis on both a a full quarterly and year basis , primarily driven by Japan and Korea .
Speaker #2: Our two largest markets in the region . Latin America . Adjusted earnings were $227 million , up 13% and up 4% on a constant currency basis , driven by volume growth region .
Speaker #2: Latin America up adjusted and flows were 25% 16% on a constant across the basis sales were , while up 26% on a constant basis currency due to strong growth across the region , most notably in Mexico and Brazil .
Speaker #2: EMEA adjusted earnings were $97 million , up 64% on both a reported and constant currency basis . The drivers primary were robust growth , as volume underwriting favorable well as margins adjusted .
John McCallion: Sales were up 24% on a constant currency basis, reflecting strong strength across most markets, led by Turkey and the UK. Turning to MetLife Investment Management or MIM, which we are reporting as a standalone business segment for the first time. MIM delivered adjusted earnings of $60 million in Q4 of 2025 versus $16 million in Q4 of 2024. The primary driver year-over-year was the transition to general account market fees as part of becoming a business segment. Looking ahead, we would point you toward MIM's key financial metrics as shown in our quarterly financial supplement. In addition to the statement of adjusted earnings, we provided AUM and revenue information for both institutional clients and the general account.
John McCallion: Sales were up 24% on a constant currency basis, reflecting strong strength across most markets, led by Turkey and the UK. Turning to MetLife Investment Management or MIM, which we are reporting as a standalone business segment for the first time. MIM delivered adjusted earnings of $60 million in Q4 of 2025 versus $16 million in Q4 of 2024. The primary driver year-over-year was the transition to general account market fees as part of becoming a business segment. Looking ahead, we would point you toward MIM's key financial metrics as shown in our quarterly financial supplement. In addition to the statement of adjusted earnings, we provided AUM and revenue information for both institutional clients and the general account.
Speaker #2: Flows in EMEA were up 17% on a constant currency basis. Sales were up 24% on a currency basis, with constant strong momentum across markets, especially in Turkey and the U.K.
Speaker #2: , led by . Turning to MetLife Investment Management , or MIM , which we are reporting as a standalone business the segment for men delivered first time , adjusted reflecting of $60 million in Q4 of 25 $16 million in Q4 of 24 .
Speaker #2: The primary driver year over year was the transition to account market fees as part of becoming generally a business segment. Looking ahead, we would point you, men's key, toward metrics as shown in our financial quarterly, in supplement.
Speaker #2: of statement adjusted addition to the earnings , we AUM and revenue information provided for both institutional and the clients general account . Corporate which and other , includes now MetLife Holdings .
John McCallion: Corporate and other, which now includes MetLife Holdings, our legacy runoff business, reported an adjusted loss of $38 million for Q4 of 2025, compared to an adjusted loss of $72 million in the same period last year. The primary drivers were favorable investment margins and expense margins. These were partially offset by less favorable life underwriting margins. Page five shows our pre-tax variable investment income, or VII, for the four quarters and full year 2025, as well as full year 2024. Variable investment income was $497 million in Q4, driven by private equities, which had an average return of 2.8%, while real estate and other funds had an average return of 1.1%.
John McCallion: Corporate and other, which now includes MetLife Holdings, our legacy runoff business, reported an adjusted loss of $38 million for Q4 of 2025, compared to an adjusted loss of $72 million in the same period last year. The primary drivers were favorable investment margins and expense margins. These were partially offset by less favorable life underwriting margins. Page five shows our pre-tax variable investment income, or VII, for the four quarters and full year 2025, as well as full year 2024. Variable investment income was $497 million in Q4, driven by private equities, which had an average return of 2.8%, while real estate and other funds had an average return of 1.1%.
Speaker #2: Our legacy reported business run off an adjusted loss for $38 million Q4 of of 25 , compared to an loss of adjusted $72 million in the same year primary drivers were favorable margins and expense investment margins . .
Speaker #2: Our legacy reported business run off an adjusted loss for $38 million Q4 of of 25 , compared to an loss of adjusted $72 million in the same year primary drivers were favorable margins and expense investment margins .
Speaker #2: partially These were offset by less favorable life underwriting The margins . Page five shows our variable investment pre-tax income or VEI , for the fourth quarter and full year 2025 , as well as full year 2024 .
Speaker #2: Variable investment income $497 million in Q4 , driven by private equities , of average an return 2.8% , of while estate and other real funds had an average return of 1.1% .
John McCallion: As a reminder, PE and real estate and other funds are reported on a one-quarter lag and accounted for on a mark-to-market basis. For the full year, VII was $1.5 billion, below our 2025 target of $1.7 billion, but well ahead of the prior year. Real estate and other funds accounted for much of the shortfall, while PE returns, which generated a full year in 2025 return of 8.2%, were modestly below our annual expected return of 9%. On page 6, we provide VII post-tax by segment and corporate and other for the four quarters and full year of 2025. Most of the VII assets are concentrated in Asia, RAS, and our legacy runoff business now in corporate and other, consistent with the long-term nature of these obligations.
John McCallion: As a reminder, PE and real estate and other funds are reported on a one-quarter lag and accounted for on a mark-to-market basis. For the full year, VII was $1.5 billion, below our 2025 target of $1.7 billion, but well ahead of the prior year. Real estate and other funds accounted for much of the shortfall, while PE returns, which generated a full year in 2025 return of 8.2%, were modestly below our annual expected return of 9%. On page 6, we provide VII post-tax by segment and corporate and other for the four quarters and full year of 2025. Most of the VII assets are concentrated in Asia, RAS, and our legacy runoff business now in corporate and other, consistent with the long-term nature of these obligations.
Speaker #2: As a reminder , PE and real estate and other funds are one quarter lag and a reported on for on a mark accounted basis full to market .
Speaker #2: was $1.5 billion , below our 2025 target of $1.7 billion . But well year prior ahead of the estate and other funds for much shortfall .
Speaker #2: PE While returns , . of the Real year full 2025 return of 8.2% , were accounted annual expected return of 9% . On page six , we VEI by segment and corporate and other for the full year fourth quarter and 2025 .
Speaker #2: PE While returns , . of the Real year full 2025 return of 8.2% , were accounted annual expected return of 9% . On page six , we VEI by segment and corporate and other for the full year fourth quarter and of Most of the VI assets are concentrated in Asia and our legacy runoff business now in corporate and other consistent with the long term nature of these obligations , as of December 31st , total 2025 , VEI assets stood at approximately $19 billion .
John McCallion: As of December 31, 2025, total VII assets stood at approximately $19 billion. Asia represented nearly 45% of the assets, while RAS and corporate and other accounted for about 30% and 25% respectively. Turning to page 7. This chart shows a comparison of our direct expense ratio for the Q4 and full year 2024 and 2025. As you can see, we continue to benefit from our efficiency mindset in driving down our cost curve with our direct expense ratio falling to 11.7% for the year, which is well ahead of target.
John McCallion: As of December 31, 2025, total VII assets stood at approximately $19 billion. Asia represented nearly 45% of the assets, while RAS and corporate and other accounted for about 30% and 25% respectively. Turning to page 7. This chart shows a comparison of our direct expense ratio for the Q4 and full year 2024 and 2025. As you can see, we continue to benefit from our efficiency mindset in driving down our cost curve with our direct expense ratio falling to 11.7% for the year, which is well ahead of target.
Speaker #2: Asia represented nearly 45% of the assets , while RA and corporate and other accounted for 30 and 25% , respectively . Turning to page seven .
Speaker #2: This chart shows a comparison of our direct expense ratio for the fourth quarter and full about year Four , and As you can see , 2025 .
Speaker #2: continue to benefit from our efficiency mindset in driving down our we curve direct expense ratio cost fall into 11.7% for the year , which is well ahead target .
John McCallion: This includes seeing the benefits from the adoption of AI tools and other emerging technology broadly across our company, as we've seen the opportunities to re-engineer processes while also injecting AI tools to enhance the speed and accuracy of our delivery, all of which improves the lives of our customers and our employees. Let me now review our cash and capital position as detailed on page 8. MetLife remains strongly capitalized with robust liquidity. As of December 31, cash and liquid assets at the holding companies totaled $3.6 billion, in line with our target cash buffer of $3 to 4 billion. The acquisition of PineBridge, which closed in the quarter, was the main driver of the reduction in Holdco cash sequentially.
John McCallion: This includes seeing the benefits from the adoption of AI tools and other emerging technology broadly across our company, as we've seen the opportunities to re-engineer processes while also injecting AI tools to enhance the speed and accuracy of our delivery, all of which improves the lives of our customers and our employees. Let me now review our cash and capital position as detailed on page 8. MetLife remains strongly capitalized with robust liquidity. As of December 31, cash and liquid assets at the holding companies totaled $3.6 billion, in line with our target cash buffer of $3 to 4 billion. The acquisition of PineBridge, which closed in the quarter, was the main driver of the reduction in Holdco cash sequentially.
Speaker #2: includes This seeing the benefits from the adoption of AI tools and other emerging technology broadly across our with our seen , the as we've company , reengineer opportunities to processes while also AI injecting tools to enhance the speed and accuracy of our delivery , all of which improves the lives of our customers and employees our .
Speaker #2: Let me now review our cash capital position detailed on page eight . That as life remains strongly capitalized with robust liquidity and as cash of December 31st , liquid assets at the holding and companies totaled $3.6 billion , in line target with our cash buffer of 3 to $4 billion .
John McCallion: In addition, total cash returned to shareholders in Q4 was about $800 million, including approximately $430 million of share repurchases. An additional roughly $200 million of shares were repurchased in January. For the two-year period, 2024 and 2025, our average free cash flow ratio, excluding total notable items, was 81%, exceeding our 65% to 75% target range. In terms of statutory capital for our US companies, our combined 2025 NAIC RBC ratio is expected to be above our 360% target. Our estimated US statutory adjusted capital on an NAIC basis stood at approximately $17.2 billion as of 31 December, up 1% from Q3.
John McCallion: In addition, total cash returned to shareholders in Q4 was about $800 million, including approximately $430 million of share repurchases. An additional roughly $200 million of shares were repurchased in January. For the two-year period, 2024 and 2025, our average free cash flow ratio, excluding total notable items, was 81%, exceeding our 65% to 75% target range. In terms of statutory capital for our US companies, our combined 2025 NAIC RBC ratio is expected to be above our 360% target. Our estimated US statutory adjusted capital on an NAIC basis stood at approximately $17.2 billion as of 31 December, up 1% from Q3.
Speaker #2: The acquisition Pinebridge , which of closed in the quarter , driver of the reduction in was the main sequentially cash addition , . total cash In returned to shareholders in the fourth about including $800 million , approximately $430 million of share repurchases .
Speaker #2: An additional roughly $200 million of repurchased in shares were January two year period , 2024 and average free cash flow , excluding ratio total .
Speaker #2: for the Notable 2025 are items was 81% , exceeding our range 65 to 75% target . In terms of statutory capital for our US combined 2025 Naic , companies , our ratio is expected to be RBC above our Our 360% target .
Speaker #2: estimated US statutory capital on an adjusted basis stood at approximately 17.2 billion as of December 31st , up 1% from the We third quarter .
John McCallion: We anticipate the Japan solvency margin ratio to be around 770% as of December 31, pending the final statutory filings in the coming weeks. As a reminder, this will be the last stat filing in Japan based on the SMR, which will be transitioning to an economic solvency ratio, or ESR. As we have previously disclosed, we expect to report an initial ESR within a range of 170% to 190% for March 2026. Now let's discuss our outlook, starting with the overview on page 10. Based on the forward currency curve, we expect the US dollar to be stable in 2026 relative to 2025. The forward interest rate curve projects long-term interest rates to be modestly higher, and the yield curve expected to steepen, a positive development.
John McCallion: We anticipate the Japan solvency margin ratio to be around 770% as of December 31, pending the final statutory filings in the coming weeks. As a reminder, this will be the last stat filing in Japan based on the SMR, which will be transitioning to an economic solvency ratio, or ESR. As we have previously disclosed, we expect to report an initial ESR within a range of 170% to 190% for March 2026. Now let's discuss our outlook, starting with the overview on page 10. Based on the forward currency curve, we expect the US dollar to be stable in 2026 relative to 2025. The forward interest rate curve projects long-term interest rates to be modestly higher, and the yield curve expected to steepen, a positive development.
Speaker #2: anticipate the Japan solvency margin ratio to be around 770% as of December 31st , final statutory the filings in coming weeks a reminder , .
Speaker #2: be the this will last STAT As filing in Japan based on the pending the SMR , be which will transitioning to an economic solvency ratio or ESR , as previously we have disclosed , we to expect report in initial ESR within a range of 170 to 190% for March 20th , 26 .
Speaker #2: Now , our discuss outlook , starting overview with the on page ten . Based on the forward curve , currency we expect the let's US dollar to be stable in relative to 2026 2025 .
Speaker #2: The forward interest rate projects long term curve interest rates to be modestly higher , and the expected to steepen positive a development . And we use an assumption of return for 5% annual yield curve the our near 500 S&P term for targets .
John McCallion: We use an assumption of 5% annual return for the S&P 500. For our near-term targets, we expect to achieve double-digit adjusted EPS growth. We expect adjusted ROE to be in the range of 15 to 17%. We expect to maintain our 2-year average free cash flow ratio of 65 to 75% of adjusted earnings, which supports our 5-year commitment to generate $25 billion+ of free cash flow. Specifically for 2026, given asset management businesses tend to have higher expense ratios, the acquisition of PineBridge will add 50 basis points to our direct expense ratio in 2026, with our 2026 target being 12.1%.
John McCallion: We use an assumption of 5% annual return for the S&P 500. For our near-term targets, we expect to achieve double-digit adjusted EPS growth. We expect adjusted ROE to be in the range of 15 to 17%. We expect to maintain our 2-year average free cash flow ratio of 65 to 75% of adjusted earnings, which supports our 5-year commitment to generate $25 billion+ of free cash flow. Specifically for 2026, given asset management businesses tend to have higher expense ratios, the acquisition of PineBridge will add 50 basis points to our direct expense ratio in 2026, with our 2026 target being 12.1%.
Speaker #2: We expect achieve to double digit EPs adjusted growth . We expect ROE to adjusted range be in the of 15 to 17% . We expect to maintain our two year average free cash flow ratio of 65 to 75% of adjusted earnings , which supports our five year commitment to $25 billion plus of free cash generate flow , specifically for 2026 .
Speaker #2: Given asset management tend to businesses have higher expense ratios , the acquisition of Pinebridge will add 50 basis points to our direct expense ratio in 2026 .
John McCallion: However, with the considerable progress we've made in the first year under New Frontier towards achieving 100 basis point improvement over the five years, we intend to maintain our 2029 target of 11.3%, despite the higher expense ratios associated with accelerating growth in our asset management business. Variable investment income is expected to be approximately $1.6 billion pre-tax. Our corporate and other adjusted loss is expected to be between $500 and 700 million after tax. We are maintaining our expected effective tax rate range of 24% to 26%, and we expect our 2026 share repurchases to be in line with 2025.
John McCallion: However, with the considerable progress we've made in the first year under New Frontier towards achieving 100 basis point improvement over the five years, we intend to maintain our 2029 target of 11.3%, despite the higher expense ratios associated with accelerating growth in our asset management business. Variable investment income is expected to be approximately $1.6 billion pre-tax. Our corporate and other adjusted loss is expected to be between $500 and 700 million after tax. We are maintaining our expected effective tax rate range of 24% to 26%, and we expect our 2026 share repurchases to be in line with 2025.
Speaker #2: With our 2026 target being 12.1% . However , with the considerable progress we've made in the first year under New Frontier towards 100 basis point improvement achieving over the five years intend to , we maintain our 2029 target of 11.3% , despite the expense ratios associated higher with accelerating growth in our asset management business income is investment .
Speaker #2: expected to be Variable approximately $1.6 billion pre-tax . Our corporate and other adjusted loss is expected to be between 500 and $700 million after tax .
Speaker #2: We are maintaining expected effective our tax rate range of 24 to 26% , we expect 2026 share repurchases to be in our line and with 2025 .
John McCallion: At the bottom of the page, you will see certain interest rate sensitivities relative to our base case, reflecting a relatively modest impact on adjusted earnings over the near term. Page eleven provides our outlook for VII. We expect the average asset balances for private equities to decline in 2026 and over the near term as we continue to strategically reposition the portfolio to higher-yielding fixed income securities, consistent with the higher interest rate environment. We are assuming annual returns for private equity to be 9% and real estate and other funds to be 7% over the near term. Finally, as a reminder, we include prepayment fees on fixed maturities and mortgage loans in VII.
John McCallion: At the bottom of the page, you will see certain interest rate sensitivities relative to our base case, reflecting a relatively modest impact on adjusted earnings over the near term. Page eleven provides our outlook for VII. We expect the average asset balances for private equities to decline in 2026 and over the near term as we continue to strategically reposition the portfolio to higher-yielding fixed income securities, consistent with the higher interest rate environment. We are assuming annual returns for private equity to be 9% and real estate and other funds to be 7% over the near term. Finally, as a reminder, we include prepayment fees on fixed maturities and mortgage loans in VII.
Speaker #2: At the bottom of the page , you will certain interest rate sensitivities relative to our base case , reflecting a relatively modest impact on adjusted earnings over term the near Page 11 provides our outlook for .
Speaker #2: VEI . We expect the average asset balances for private equities to decline in near term , as we continue to strategically portfolio reposition the to higher 2026 and over the yielding fixed income securities the higher consistent with interest rate environment , we are assuming annual returns for private equity be 9% , and real estate and other funds to 7% over the near term .
Speaker #2: VEI . We expect the average asset balances for private equities to decline in near term , as we continue to strategically portfolio reposition the to higher 2026 and over the yielding fixed income securities the higher consistent with interest rate environment , we are assuming annual returns for private equity be 9% , and real estate and other funds to 7% over the near be Finally , we include prepayment fees on fixed maturities and mortgage loans in VEI .
John McCallion: Moving to our business segments on page 12, starting with group benefits, we are maintaining our adjusted PFO growth target of 4 to 7% over the near term as we continue to strengthen our market leadership. We are reducing our group life mortality ratio target range by 1 point to 83 to 88%, as we expect favorable mortality trends will continue in 2026. For group non-medical health, we are increasing our interest-adjusted benefit ratio target range by 1 point to 70 to 75%. We are seeing the benefits of our leave and absence capability and technology investments take hold in the market, and therefore, this range is reflective of our updated view of product mix over the near term. Taking all these factors into account, we expect group benefits adjusted earnings ex notables to grow 7 to 9% in 2026.
John McCallion: Moving to our business segments on page 12, starting with group benefits, we are maintaining our adjusted PFO growth target of 4 to 7% over the near term as we continue to strengthen our market leadership. We are reducing our group life mortality ratio target range by 1 point to 83 to 88%, as we expect favorable mortality trends will continue in 2026. For group non-medical health, we are increasing our interest-adjusted benefit ratio target range by 1 point to 70 to 75%. We are seeing the benefits of our leave and absence capability and technology investments take hold in the market, and therefore, this range is reflective of our updated view of product mix over the near term. Taking all these factors into account, we expect group benefits adjusted earnings ex notables to grow 7 to 9% in 2026.
Speaker #2: Moving to our Business Segments, page 12. On with Group Benefits, we are maintaining our PFO adjusted growth target of 4 to 7% over the near term.
Speaker #2: As we continue to market strengthen our leadership , we are reducing our group life mortality ratio target range by one point to 83 to 88% .
Speaker #2: As we expect favorable mortality trends will continue in 2026 for group non-medical health , we are increasing our interest adjusted benefit ratio , target range by one point to 70 to 75% .
Speaker #2: seeing the benefits of our leave absence capability and technology We are investments hold in the market and therefore this and range is reflective of our take updated view of over the near mix product term .
Speaker #2: all these factors Taking account , we benefits , expect into adjusted earnings , notables to x 7 to 9% grow group in 2026 .
John McCallion: Please keep in mind, Q1 tends to be a seasonally low quarter, with both life and non-medical health results skewing to the higher end of the target ratio ranges. RAS near-term outlook is on page 13. As part of New Frontier, we are strategically leveraging reinsurance to augment our organic capital with third-party capital to support the building demand for retirement solutions. This further supplements our liability growth while allowing us to maintain capital discipline. The common theme is capital flexibility. With our expanded toolkit, we're able to support liability growth and at the same time, generate additional investable assets to be managed by MetLife Investment Management. As a result, we've enhanced the statistical pages in the QFS to more clearly reflect the impact of our growing use of reinsurance. As such, RAS segment earnings will be driven by retained liability exposures net of reinsurance.
John McCallion: Please keep in mind, Q1 tends to be a seasonally low quarter, with both life and non-medical health results skewing to the higher end of the target ratio ranges. RAS near-term outlook is on page 13. As part of New Frontier, we are strategically leveraging reinsurance to augment our organic capital with third-party capital to support the building demand for retirement solutions. This further supplements our liability growth while allowing us to maintain capital discipline. The common theme is capital flexibility. With our expanded toolkit, we're able to support liability growth and at the same time, generate additional investable assets to be managed by MetLife Investment Management. As a result, we've enhanced the statistical pages in the QFS to more clearly reflect the impact of our growing use of reinsurance. As such, RAS segment earnings will be driven by retained liability exposures net of reinsurance.
Speaker #2: Please keep in mind Q1 tends to be a seasonally low quarter, with both medical and non-medical health results skewing to the higher end of the target ratio ranges.
Speaker #2: Raise outlook is on near-term page 13 as Frontier , we are of New strategically part reinsurance leveraging to augment our organic capital with third party capital to support the building for demand retirement solutions further .
Speaker #2: supplements our This growth while allowing us to maintain liability capital . The is common theme capital flexibility with our expanded able to support liability growth and at the same time toolkit , we're generate investable assets to additional be managed by Management Investment MetLife .
Speaker #2: pages in the qfs statistical As a to more reflect the of our growing clearly use of reinsurance RA . such , As segment earnings will driven by retained be net of reinsurance .
John McCallion: More specifically, the average retained liability exposures, which we expect to grow 3% to 5% in 2026, with growth weighted toward the second half of the year. We expect RAS adjusted earnings in 2026 to be between $1.6 billion and $1.8 billion. Given growth is weighted to the second half of 2026, Q1 adjusted earnings is expected to be relatively flat year-over-year. Finally, we expect total general account investment spread to range from 100 to 120 basis points in 2026. For Asia, on page 14, we expect annual sales growth to be mid- to high-single digits on a constant currency basis over the near term, and general account AUM growth in the mid-single digits.
John McCallion: More specifically, the average retained liability exposures, which we expect to grow 3% to 5% in 2026, with growth weighted toward the second half of the year. We expect RAS adjusted earnings in 2026 to be between $1.6 billion and $1.8 billion. Given growth is weighted to the second half of 2026, Q1 adjusted earnings is expected to be relatively flat year-over-year. Finally, we expect total general account investment spread to range from 100 to 120 basis points in 2026. For Asia, on page 14, we expect annual sales growth to be mid- to high-single digits on a constant currency basis over the near term, and general account AUM growth in the mid-single digits.
Speaker #2: specifically , the More average retained liability exposures , liability exposures , which expect grow to 3 to 5% weighted toward second half of the the year .
Speaker #2: expect We RA adjusted in earnings 2026 to be in between 1.6 billion and 1.8 billion , given growth is weighted to the of 2026 , Q1 adjusted earnings is second half expected to be flat year over year .
Speaker #2: total expect general account investment Finally , we to relatively from range spread points 100 to 120 basis in 2026 . For On page 14 , annual sales growth to Asia .
Speaker #2: To be mid to high single-constant basis over the digits on a near term and general account AUM in the mid-growth digits, expect currency adjusted.
John McCallion: Asia adjusted earnings, excluding notable items, are expected to grow mid-single digits over the near term. Regarding the Japan ESR, assuming 100 basis point change up or down in either or both the 10-year US Treasury and/or the 30-year JGB rates, we expect to remain within 170 to 190% target range. On page 15, for Latin America, we expect adjusted PFOs to grow high single digits over the near term. We expect Latin America adjusted earnings, excluding notable items, to increase 6 to 8% in 2026, including a roughly $50 million impact from the Mexico VAT change, which we expect to be mostly in the first half of the year. We expect adjusted earnings to return to high single digits growth in 2027 and 2028.
John McCallion: Asia adjusted earnings, excluding notable items, are expected to grow mid-single digits over the near term. Regarding the Japan ESR, assuming 100 basis point change up or down in either or both the 10-year US Treasury and/or the 30-year JGB rates, we expect to remain within 170 to 190% target range. On page 15, for Latin America, we expect adjusted PFOs to grow high single digits over the near term. We expect Latin America adjusted earnings, excluding notable items, to increase 6 to 8% in 2026, including a roughly $50 million impact from the Mexico VAT change, which we expect to be mostly in the first half of the year. We expect adjusted earnings to return to high single digits growth in 2027 and 2028.
Speaker #2: Asia notable , excluding expected items , are to grow mid-single digits over term Japan . Regarding the ESR , assuming 100 basis point change up or in either or down both , and ten year US 30 year JGB rates expect to within we Treasury 170 to 190% target On .
Speaker #2: page 15 . For Latin expect America , foes to grow high single over the near digits term . range expect We Latin adjusted earnings , notable to increase excluding 6 to 8% items , in including a 2026 , from the Mexico America roughly change VAT we , which expect to be mostly in the year first half of the .
John McCallion: Moving to EMEA, we expect adjusted PFOs to continue to grow high single digits, given the strong momentum in the business. For adjusted earnings, we expect EMEA's new quarterly run rate to increase to $90 to 100 million in 2026, and then grow mid to high single digits in 2027 and 2028. Finally, for MIM, we expect revenues to grow roughly 30% in 2026, largely driven by the combination of PineBridge, and then increase by mid-single digits thereafter. For MIM adjusted earnings, we expect to be between $240 and 280 million in 2026, then grow 15% to 20% per year in 2027 and 2028, from a combination of revenue and expense synergies, as well as greater operating leverage.
John McCallion: Moving to EMEA, we expect adjusted PFOs to continue to grow high single digits, given the strong momentum in the business. For adjusted earnings, we expect EMEA's new quarterly run rate to increase to $90 to 100 million in 2026, and then grow mid to high single digits in 2027 and 2028. Finally, for MIM, we expect revenues to grow roughly 30% in 2026, largely driven by the combination of PineBridge, and then increase by mid-single digits thereafter. For MIM adjusted earnings, we expect to be between $240 and 280 million in 2026, then grow 15% to 20% per year in 2027 and 2028, from a combination of revenue and expense synergies, as well as greater operating leverage.
Speaker #2: We adjusted earnings to return to high growth in 2027 and 2028. Moving to Digit, expect single adjusted EMEA, we expect to grow high single strong digits.
Speaker #2: Given the in the business adjusted expect EMEA as new we quarterly run increase to in 2026 , 90 to $100 million grow mid to high rate to single in 2027 and 2028 .
Speaker #2: digits we for momentum for in 30% 2026 , largely by the driven combination of roughly and then increased by digits thereafter mid-single earnings .
Speaker #2: from expect to adjusted We 2026 . between 240 and $280 million in grow 15 to 20% per year in Then 2027 and 2028 .
John McCallion: By 2028, we are targeting an operating margin of approximately 32%. In addition, we expect MIM's Q1 adjusted earnings to be approximately $50 million, lower than the implied quarterly run rate due to higher seasonal expenses in the first quarter. In total, MetLife delivered a strong quarter to close out another strong year. We successfully executed key strategic initiatives to support New Frontier while achieving our financial commitments. Building on our clear momentum and solid fundamentals across our diverse set of market-leading businesses, we achieved robust top-line growth, maintained disciplined underwriting, and exercised prudent expense management. With a strong balance sheet and reliable free cash flow generation, we are well positioned to achieve responsible growth and deliver attractive returns with lower risk, creating sustainable value for both our customers and our shareholders.
John McCallion: By 2028, we are targeting an operating margin of approximately 32%. In addition, we expect MIM's Q1 adjusted earnings to be approximately $50 million, lower than the implied quarterly run rate due to higher seasonal expenses in the first quarter. In total, MetLife delivered a strong quarter to close out another strong year. We successfully executed key strategic initiatives to support New Frontier while achieving our financial commitments. Building on our clear momentum and solid fundamentals across our diverse set of market-leading businesses, we achieved robust top-line growth, maintained disciplined underwriting, and exercised prudent expense management. With a strong balance sheet and reliable free cash flow generation, we are well positioned to achieve responsible growth and deliver attractive returns with lower risk, creating sustainable value for both our customers and our shareholders.
Speaker #2: combination of revenue and expense synergies , as well as operating leverage From a . By 2028 . We are Pinebridge greater targeting an operating margin approximately 32% .
Speaker #2: In addition , we , Q1 adjusted earnings to be approximately lower than the implied quarterly $50 million due to run rate higher seasonal In the expenses .
Speaker #2: mEMS first quarter total , MetLife . In delivered a strong quarter to close strong successfully out another support strategic New initiatives to while achieving our Frontier financial year .
Speaker #2: commitments on our executed key across diverse set of businesses , we market robust top fundamentals our growth , maintained underwriting and exercise , expense prudent disciplined management We strong with a balance sheet reliable free and cash flow are well to positioned generation .
Speaker #2: responsible deliver growth and returns with lower risk We , creating sustainable value for both our attractive shareholders and our . that , I'll turn the call back customers to the operator for your questions .
John McCallion: And with that, I'll turn the call back to the operator for your questions.
John McCallion: And with that, I'll turn the call back to the operator for your questions.
Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. As a reminder, we ask that you please limit yourself to one question and one follow-up to allow everyone an opportunity to ask a question. We'll take our first question from Jimmy Bhullar at J.P. Morgan.
Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. As a reminder, we ask that you please limit yourself to one question and one follow-up to allow everyone an opportunity to ask a question. We'll take our first question from Jimmy Bhullar at J.P. Morgan.
Speaker #3: Thank you . We will now begin the question and answer session . If you have
Speaker #3: If you would like to withdraw your question , queue . simply telephone one again . As a star you please reminder , we ask that limit yourself to one one follow up question and to everyone an opportunity allow question to ask .
[Analyst] (J.P. Morgan): Hey, good morning. So first, just had a question on group benefits for Ramy. Just comment on what you've seen through renewal season in various product lines. I know you've been pricing up dental over the past year. How you're seeing what you've done in terms of pricing in various product lines, and whether you're seeing competition pick up or ease in any of the products in group benefits?
Jimmy Bhullar: Hey, good morning. So first, just had a question on group benefits for Ramy. Just comment on what you've seen through renewal season in various product lines. I know you've been pricing up dental over the past year. How you're seeing what you've done in terms of pricing in various product lines, and whether you're seeing competition pick up or ease in any of the products in group benefits?
Speaker #3: We'll take our first question from Jimmy Buehler at And with
Speaker #3: We'll take our first question from Jimmy Buehler at And with JPMorgan .
Speaker #4: question the So on first just had a group benefits for Rami . I just comment on what you've renewal season seen through in lines .
Speaker #4: you've been various product up I pricing over the past know . How seeing you're what you've done in terms of pricing in product lines and whether you're your like , competition up or ease in any of the dental benefits year .
Ramy Tadros: Thanks for the question, Jimmy. I would say if we look at our Q1 results, in particular with respect to persistency and renewals, we're seeing pretty robust results. I would say increase in persistency, in particular in dental. As we've talked about, we did take actions in Q1 of 2025 with respect to the dental business and responded quickly to kind of get back to our target margins. I would say at this point, persistency is improving and is pretty robust. Although we'll come back and talk to you about our full Q1 results, at this point, we also have good sales growth across our book of business, and in particular, I would highlight disability here as an area of strength that we're starting to see based on our Q1 results.
Ramy Tadros: Thanks for the question, Jimmy. I would say if we look at our Q1 results, in particular with respect to persistency and renewals, we're seeing pretty robust results. I would say increase in persistency, in particular in dental. As we've talked about, we did take actions in Q1 of 2025 with respect to the dental business and responded quickly to kind of get back to our target margins. I would say at this point, persistency is improving and is pretty robust. Although we'll come back and talk to you about our full Q1 results, at this point, we also have good sales growth across our book of business, and in particular, I would highlight disability here as an area of strength that we're starting to see based on our Q1 results.
Speaker #1: Thanks for the
Speaker #1: Jimmy . I say we look at our would one particular with to respect persistency and renewals . We're seeing results robust pretty would say results .
Speaker #1: persistency , in increase in I in particular dental . As we've talked about did take actions in question , of 25 with business responded , we to get back at this margins .
Speaker #1: persistency , in increase in I in particular dental . As we've talked about did take actions in question , of 25 with business responded , we to get back respect to the to our group , persistency is And improving and is pretty is .
Speaker #1: although we'll come back and talk to And kind of you about our full Q1 results at this have good sales growth across our book of business and in would particular , I ability this here as a as highlight an area target we're starting to see of based on our one also one results .
[Analyst] (J.P. Morgan): Then just on another topic for Lyndon or maybe Michel. On in Japan, you've seen pretty dramatic moves in some of the macro variables, whether it's currency or interest rates. How is that affecting your business in terms of persistency, maybe the sales mix, and any comments on the competitive environment in that market as well?
Jimmy Bhullar: Then just on another topic for Lyndon or maybe Michel. On in Japan, you've seen pretty dramatic moves in some of the macro variables, whether it's currency or interest rates. How is that affecting your business in terms of persistency, maybe the sales mix, and any comments on the competitive environment in that market as well?
Speaker #4: And on another topic Lyndon , or then just Michelle Japan , in maybe seen pretty dramatic the some of you've macro interest or rates .
Speaker #4: How is that moves in business in terms of your persistency ? and mix the sales any comments on the competitive environment in Maybe market as well ?
Lyndon Oliver: Hey, Jimmy, it's Lyndon here. So, yeah, we have seen some macroeconomic volatility recently, both in the FX as well as the rates. But just if you think about it, the short-term impact on sales could be due to rates, with we see a short-term impact during periods when we see significant macroeconomic fluctuations. And what happens here, our customers tend to wait for the markets to stabilize before going out and buying foreign currency products. So we see these temporary, just, fluctuations, but for the most part, our value proposition continues to remain solid with the customers. And given the breadth of our product portfolio and our distribution strength here, it really gives us, puts us in a good position to meet the demand through these periods, whether it's yen or dollar products.
Lyndon Oliver: Hey, Jimmy, it's Lyndon here. So, yeah, we have seen some macroeconomic volatility recently, both in the FX as well as the rates. But just if you think about it, the short-term impact on sales could be due to rates, with we see a short-term impact during periods when we see significant macroeconomic fluctuations. And what happens here, our customers tend to wait for the markets to stabilize before going out and buying foreign currency products. So we see these temporary, just, fluctuations, but for the most part, our value proposition continues to remain solid with the customers. And given the breadth of our product portfolio and our distribution strength here, it really gives us, puts us in a good position to meet the demand through these periods, whether it's yen or dollar products.
Speaker #5: Hey , Jimmy , it's here . Lyndon So yeah ,
Speaker #5: here , our to wait for the customers tend significant before stabilize going out and buying foreign markets currency So see these temporary just fluctuations .
Speaker #5: But for the part , our value proposition we continues to remain the solid with customers . given the And our breadth of product distribution strength here , really us good , puts us in a the to meet position through these periods , whether it's gives yen or dollar portfolio and our .
[Analyst] (Evercore ISI): ... And just with the issues at Prudential, obviously, they're more company specific and don't have anything to do with you guys, but do you see any impact on your business just because of Pru and you both being American companies, in terms of sales, persistency, and recruiting?
Jimmy Bhullar: ... And just with the issues at Prudential, obviously, they're more company specific and don't have anything to do with you guys, but do you see any impact on your business just because of Pru and you both being American companies, in terms of sales, persistency, and recruiting?
Speaker #4: with And issues just the at obviously they're more specific and don't do with have you guys . But do you see any anything to your of because business just impact on and you Peru companies American both being in sales versus recruiting ?
Lyndon Oliver: Yeah, look, you know, thanks for the question. We really don't have much to say about it. I mean, we're aware of the situation. We're very optimistic about our position in Japan, as you heard during Investor Day. We think it's a very attractive market, given the higher rate environment, as well as all these positive macroeconomic trends. There's a lot of capital coming into the market, and it continues to be a competitive market, but as I said, we've got a really good platform, a strong multi-channel distribution, a very diversified product portfolio. You can see our sales results have been very strong this year. They've been up 17%. So we're very optimistic about our position in Japan and optimistic about our potential in going into 2023.
Lyndon Oliver: Yeah, look, you know, thanks for the question. We really don't have much to say about it. I mean, we're aware of the situation. We're very optimistic about our position in Japan, as you heard during Investor Day. We think it's a very attractive market, given the higher rate environment, as well as all these positive macroeconomic trends. There's a lot of capital coming into the market, and it continues to be a competitive market, but as I said, we've got a really good platform, a strong multi-channel distribution, a very diversified product portfolio. You can see our sales results have been very strong this year. They've been up 17%. So we're very optimistic about our position in Japan and optimistic about our potential in going into 2023.
Speaker #5: Look , we you know , thanks for the question . We really say much to about it . I don't have mean , we're aware of the situation .
Speaker #5: Look , we you know , thanks for the question . We really say much to about it . I don't have mean , we're aware of the
Speaker #5: optimistic about position Japan . As you heard during we think it's a very attractive market the given in environment as well as positive all these macroeconomic trends .
Speaker #5: of coming into the capital , and it continues to be a competitive market . really said , we've But as good market platform I , strong distribution , a very diversified product portfolio .
Speaker #5: multichannel You can see our sales results have been got a So we're very about our optimistic position in Japan and about our optimistic potential and going into 26 .
[Analyst] (Evercore ISI): Thank you.
Jimmy Bhullar: Thank you.
Operator: We'll move next to Tom Gallagher at Evercore ISI.
Operator: We'll move next to Tom Gallagher at Evercore ISI.
Speaker #4: Thank you .
[Analyst] (Evercore ISI): Good morning. First question, John, just a question on this change in GAAP earnings for real estate accounting, I think the $200 million benefit that you flagged. Is this a GAAP-only impact? Any expected change in statutory, or did statutory already have that adjustment? And why change this? Were you more conservative than peers, or is that more reflective of what you think the economics are? Thanks.
Thomas Gallagher: Good morning. First question, John, just a question on this change in GAAP earnings for real estate accounting, I think the $200 million benefit that you flagged. Is this a GAAP-only impact? Any expected change in statutory, or did statutory already have that adjustment? And why change this? Were you more conservative than peers, or is that more reflective of what you think the economics are? Thanks.
Speaker #3: Tom We'll next to Gallagher at Evercore ISI .
Speaker #6: morning . First John , question , just a question on this in change GAAP for earnings real I think accounting . the $200 million benefit that estate , is this a only impact expected change in statutory or any statutory authority have that adjustment and have change this ?
Speaker #6: Is GAAP this . Were you more conservative than peers that more think the economics are ? why Thanks or is reflective of .
John McCallion: Yeah, thanks. Good morning, Tom. Yeah, it's something we've thought about for some time, and, you know, I think just the resegmentation and change kind of gave us an opportunity to rethink just the reporting in Adjusted Earnings. And, you know, I think, you know, relative to peers, we probably had a higher allocation to real estate because of our expertise in the area, and so we tend to lean into this asset class. So, you know, we did a review as we thought about it. You know, quite honestly, the non-cash cost accounting construct really is not ideal for representing kind of the annual cash flows and annual returns of this product. It also doesn't really align with, you know, the changes, the book value, and then you have a sale that goes below.
John McCallion: Yeah, thanks. Good morning, Tom. Yeah, it's something we've thought about for some time, and, you know, I think just the resegmentation and change kind of gave us an opportunity to rethink just the reporting in Adjusted Earnings. And, you know, I think, you know, relative to peers, we probably had a higher allocation to real estate because of our expertise in the area, and so we tend to lean into this asset class. So, you know, we did a review as we thought about it. You know, quite honestly, the non-cash cost accounting construct really is not ideal for representing kind of the annual cash flows and annual returns of this product. It also doesn't really align with, you know, the changes, the book value, and then you have a sale that goes below.
Speaker #2: thanks . Good Tom
Speaker #2: morning . Yeah it's we've thought about time . And think the the , you know , I just segmentation and change gave us an kind of
Speaker #2: rethink the just reporting and earnings . And you know ,
Speaker #2: because real estate allocation to of our relative to expertise in area . And so into we tend the to lean asset class . you a review know we did thought quite about it , you had as we the the non-cash cost accounting construct this really is So not ideal for representing annual cash kind of the Yeah , move flows and Good flagged what you returns of this product .
Speaker #2: because real estate allocation to of our relative to expertise in area . And so into we tend the to lean asset class . you a review know we did thought quite about it , you had as we the the non-cash cost accounting construct this really is So not ideal for representing annual cash kind of the Yeah , move flows and Good flagged what you returns of know , also doesn't terms of really align with , you know , the changes the book value .
Speaker #2: because real estate allocation to of our relative to expertise in area . And so into we tend the to lean asset class . you a review know we did thought quite about it , you had as we the the non-cash cost accounting construct this really is So not ideal for representing annual cash kind of the Yeah , move flows and Good flagged what you returns of know , also doesn't terms of really align with , you know , the changes the book of And then sale that goes below .
John McCallion: So we tried to make this, you know, this change create a little more alignment in, you know, kind of the overall economics of the asset class and just more reflective of our operating cash flow.
John McCallion: So we tried to make this, you know, this change create a little more alignment in, you know, kind of the overall economics of the asset class and just more reflective of our operating cash flow.
Speaker #2: we try to So this make this know , , you change , little more create a in , alignment of the overall economics the of of the asset class .
[Analyst] (Evercore ISI): That, that makes sense. Hey, I thought I'd throw out a MIM question, since it's the new bright, shiny object this quarter. And it's a question that we've been getting recently, so I'm curious to what extent you can comment on Brighthouse obviously gonna be acquired by Aquarian. I know that they're a partner of yours, that's part—you know, you have an investment management agreement with them. Any way you can sort of frame how meaningful that could be if that contract changes with the acquisition? And is anything for that baked into your 2026 guide, or would that more likely be a 2027 issue? Thanks.
Thomas Gallagher: That, that makes sense. Hey, I thought I'd throw out a MIM question, since it's the new bright, shiny object this quarter. And it's a question that we've been getting recently, so I'm curious to what extent you can comment on Brighthouse obviously gonna be acquired by Aquarian. I know that they're a partner of yours, that's part—you know, you have an investment management agreement with them. Any way you can sort of frame how meaningful that could be if that contract changes with the acquisition? And is anything for that baked into your 2026 guide, or would that more likely be a 2027 issue? Thanks.
Speaker #2: And just reflective of our cash operating more flow .
Speaker #6: makes sense Hey , thought I'd throw out mem a question since
Speaker #6: bright shiny since it's object this the new quarter you , and it's a getting recently . So I'm question that curious to we've been what extent you can comment on bright you know , kind acquired Aquarion .
Speaker #6: know going to be that Obviously they're a I partner of part . You know , you investment have an management with agreement way you them of how could be .
Speaker #6: If frame changes yours . meaningful that That's acquisition and is that contract anything for is baked into your 26 guide or would that likely be more a 27 issue ?
John McCallion: Yeah, let me start with first, we're very excited about just closing PineBridge at the end of the year. You know, I think there's just been an excellent momentum hitting the ground running as one team. And just to kind of highlight, you know, we have historically in MIM, you know, been kind of a one MIM platform. We really haven't built this boutique style. So there's a natural process for, you know, how these complementary businesses can come together and integrate. And we're really excited about what's ahead. You know, even looking at things from between signing and closing, you saw kind of our flows in MIM were very strong, and PineBridge did great. And that's just a testament to why this makes sense and how it's resonated in the market.
John McCallion: Yeah, let me start with first, we're very excited about just closing PineBridge at the end of the year. You know, I think there's just been an excellent momentum hitting the ground running as one team. And just to kind of highlight, you know, we have historically in MIM, you know, been kind of a one MIM platform. We really haven't built this boutique style. So there's a natural process for, you know, how these complementary businesses can come together and integrate. And we're really excited about what's ahead. You know, even looking at things from between signing and closing, you saw kind of our flows in MIM were very strong, and PineBridge did great. And that's just a testament to why this makes sense and how it's resonated in the market.
Speaker #6: .
Speaker #2: start with first , we're excited about just Pine Bridge at the end of the year . You know , I think there's just been a excellent momentum hitting the very One ground .
Speaker #2: one as kind of one team . just to closing you know have historically in know been mem you kind of a one men platform .
Speaker #2: We really haven't this built boutique there's natural style . process a for So how these you know complementary together . And we're a there's really excited what's ahead about .
Speaker #2: We really haven't this built boutique there's natural style . process a for So how these you know complementary together . And we're a there's really excited what's ahead about businesses even
Speaker #2: sign in saw Mem . We're our very strong and Bridge did flows And great . that's just that's a and testament to how it's sense and makes resonated in the market .
Speaker #2: sign in saw Mem . We're our very strong and Bridge did flows And great . that's just that's a and testament to how it's sense and makes resonated in the and Pine so we're what's about , ahead .
Speaker #2: sign in saw Mem . We're our very strong and Bridge did flows And great . that's just that's a and testament to how it's sense and makes resonated in the and Pine can come gives us a bigger know , an And you know , further it just of expansion solutions that we can provide to clients insurance clients , in particular .
John McCallion: And so we're really excited about, you know, what's ahead. And it just gives us a bigger, a full, you know, even further, expansion of our solutions that we can provide to clients, and particularly insurance clients. You know, we can be a full service provider to insurance clients, not a product pusher, but just really kind of focusing on what's best for them. We serve their needs. And, you know, as you mentioned, Brighthouse. Brighthouse is a, you know, great relationship for us. We have a long history. We take pride in that. You know, we're excited to have the opportunity to work, you know, with the new combined firm that they have, and I know they're going through a process right now, so, you know, we're here to help them.
John McCallion: And so we're really excited about, you know, what's ahead. And it just gives us a bigger, a full, you know, even further, expansion of our solutions that we can provide to clients, and particularly insurance clients. You know, we can be a full service provider to insurance clients, not a product pusher, but just really kind of focusing on what's best for them. We serve their needs. And, you know, as you mentioned, Brighthouse. Brighthouse is a, you know, great relationship for us. We have a long history. We take pride in that. You know, we're excited to have the opportunity to work, you know, with the new combined firm that they have, and I know they're going through a process right now, so, you know, we're here to help them.
Speaker #2: know , we You can be a service full provider to our of our clients , a pusher , but product kind of just really focusing on what's not best for serve them .
Speaker #2: know , we You can be a service full provider to our of our clients , a pusher , but product kind of just really focusing on what's not best for serve them . needs as you , you know , mentioned , and Brighthouse is a , you know , great relationship for us .
Speaker #2: We have Brighthouse a long history . We we , we take that We . You know , we're we're pride in to work .
John McCallion: Look, at the end of the day, we have a diversified set of clients across our MIM platform. You know, we have, you know, close to $150 billion of AUM in insurance, and, you know, it's -- we have a diversified set, and, and to the, you know. I think when it comes to exposure, you know, while we are excited about keeping and growing our relationship with Brighthouse, that's kind of our expectations, you know, at the end of the day, you know, to the overall firm, this would be, you know, you know, worst case scenario would, you know, at the end of the day, would be a, a very modest impact to EPS.
John McCallion: Look, at the end of the day, we have a diversified set of clients across our MIM platform. You know, we have, you know, close to $150 billion of AUM in insurance, and, you know, it's -- we have a diversified set, and, and to the, you know. I think when it comes to exposure, you know, while we are excited about keeping and growing our relationship with Brighthouse, that's kind of our expectations, you know, at the end of the day, you know, to the overall firm, this would be, you know, you know, worst case scenario would, you know, at the end of the day, would be a, a very modest impact to EPS.
Speaker #2: You know , with the , the combined firm that have . And I know they're going process through a right now . So you know new help .
Speaker #2: end of the day , we we're here to have a them diversified set of Look at the clients across know , we platform .
Speaker #2: have , you know , You close to AUM in 150 billion of and it's have a insurance we set . know , And you to the , I you know , think when it comes to exposure , you while we are excited about know , keeping growing our relationship Brighthouse kind of , that's with expectations .
Speaker #2: day , you overall and know , to the , this would firm you know , you worst case scenario , would , you know , at the end of the day would be very modest impact to EPs .
[Analyst] (Evercore ISI): Okay, thanks for that.
Thomas Gallagher: Okay, thanks for that.
Operator: We'll move next to Joel Hurwitz at Dowling.
Operator: We'll move next to Joel Hurwitz at Dowling.
Speaker #6: Okay . Thanks that .
[Analyst] (Evercore ISI): Hey, good morning. Michel, in your prepared remarks, you mentioned that you guys had tapped the US retail retirement space with low reinsurance. Can you just provide an update on what you've done to date and your outlook for that opportunity at this point?
Joel Hurwitz: Hey, good morning. Michel, in your prepared remarks, you mentioned that you guys had tapped the US retail retirement space with low reinsurance. Can you just provide an update on what you've done to date and your outlook for that opportunity at this point?
Speaker #3: next to Joel
Speaker #3: next to
Speaker #3: at .
Speaker #7: , good Hey Michelle and your in your prepared remarks , you morning that you guys had the tapped retail mentioned retirement space with for reinsurance .
Ramy Tadros: ... Hey, Joel, it's Ramy here. I'll take this one. You know, I would say, first, you just need to put this in the broader context of our retirement strategy in the US that we talked about as part of our New Frontier strategy. And at the highest level, look, our approach here is to compete in the retirement space, in areas which play to our strength and leverage our competitive advantage. And we looked at that, and as part of that, looked at a fast-growing US retail annuity market, and identified an opportunity to participate in that market, in a way that does leverage our competitive advantages.
Ramy Tadros: ... Hey, Joel, it's Ramy here. I'll take this one. You know, I would say, first, you just need to put this in the broader context of our retirement strategy in the US that we talked about as part of our New Frontier strategy. And at the highest level, look, our approach here is to compete in the retirement space, in areas which play to our strength and leverage our competitive advantage. And we looked at that, and as part of that, looked at a fast-growing US retail annuity market, and identified an opportunity to participate in that market, in a way that does leverage our competitive advantages.
Speaker #1: It's Joel . Rami here . it's I'll , I'll I'll take You would say this one . put this broader the in strategy in the US that we talked about retirement new as part of our strategy .
Speaker #1: at the And highest our look , approach here level , to compete is retirement space areas which in play to our know , competitive advantage .
Speaker #1: looked at And that . we part of that , looked at a fast retail annuity market . And identified an opportunity participate in that market in a does leverage our And in this advantages .
Ramy Tadros: And in this case, the path that we have chosen is to participate in that market on an institutional basis as a, as a reinsurer. And look, testament to the discipline of execution here, in under a year, we executed against that strategy. We now have two partners with flow reinsurance deals in place that have kicked off over the past couple of months. We value these partnerships, and our partners value what we bring to the table, in particular, in terms of financial strength, investment capability, and capital flexibility. So this is exactly what we mean when we say we're looking for opportunities that play to our strength.
Ramy Tadros: And in this case, the path that we have chosen is to participate in that market on an institutional basis as a, as a reinsurer. And look, testament to the discipline of execution here, in under a year, we executed against that strategy. We now have two partners with flow reinsurance deals in place that have kicked off over the past couple of months. We value these partnerships, and our partners value what we bring to the table, in particular, in terms of financial strength, investment capability, and capital flexibility. So this is exactly what we mean when we say we're looking for opportunities that play to our strength.
Speaker #1: , the case path that we have chosen is to participate in that market on an institutional basis , as a as a reinsurer and look the discipline And as execution testament to and here under of year , we a executed against that strategy have flow .
Speaker #1: with reinsurance place that the couple have kicked in of months past . We value these off over partnerships partners value what we deals the bring to and in table particular in terms of financial strength , investment capital capability , , flexibility .
Ramy Tadros: At the end of the day, this is gonna add to our ability to grow liability origination and capture the momentum that we're seeing in the retirement market, in a way that works well for our economics and plays to what we can bring to the table here.
Ramy Tadros: At the end of the day, this is gonna add to our ability to grow liability origination and capture the momentum that we're seeing in the retirement market, in a way that works well for our economics and plays to what we can bring to the table here.
Speaker #1: this is So we mean when we say exactly what looking we're for opportunities that play to our strengths . And this is at the end to our gonna add ability liability to grow of the day , momentum the origination retirement that we're in a way seeing in the economics .
[Analyst] (Dowling): Got it. That makes sense. And then just wanted to follow up on Jimmy's question on Japan and the macro and on persistency. Did you guys see any increased surrender activity in Q4 thus far in Q1? And I guess, is there anything baked into your outlook for potentially higher surrenders, just given the FX and rates?
Joel Hurwitz: Got it. That makes sense. And then just wanted to follow up on Jimmy's question on Japan and the macro and on persistency. Did you guys see any increased surrender activity in Q4 thus far in Q1? And I guess, is there anything baked into your outlook for potentially higher surrenders, just given the FX and rates?
Speaker #1: And for our and plays to what we can bring to market the table works well here
Speaker #7: Got it . That makes sense
Speaker #7: . And then just wanted to on Jimmy's follow question up on Japan and macro and the on . persistency . Did you guys see on increased Q4 or thus far activity in , in Q1 ?
Speaker #7: And is I guess , anything there baked into your outlook for potentially higher surrenders the FX rates and ?
Lyndon Oliver: Yeah. Hey, Joel, it's Lyndon here. So yeah, we did see the surrender trend in the fourth quarter was a little bit higher than than it had been sequentially in the third quarter, and that was primarily because we saw the yen had depreciated relative to the US dollar. For the full year, in 2025, our surrenders have come down relative to where they were in 2024. And for 2026, we're assuming that surrenders come back to our long-term expectation over there, and that is baked into our 2026 guidance.
Lyndon Oliver: Yeah. Hey, Joel, it's Lyndon here. So yeah, we did see the surrender trend in the fourth quarter was a little bit higher than than it had been sequentially in the third quarter, and that was primarily because we saw the yen had depreciated relative to the US dollar. For the full year, in 2025, our surrenders have come down relative to where they were in 2024. And for 2026, we're assuming that surrenders come back to our long-term expectation over there, and that is baked into our 2026 guidance.
Speaker #5: . Hey , Joel , Linden So yeah , we Yeah here . see the surrender trend Was a
Speaker #5: than little bit in the fourth quarter . than sequentially in the third higher that was quarter . And yen because we primarily relative to the had depreciated U.S.
Speaker #5: year in 25 . Our come surrenders have down relative where they were in 24 . And 26 , assuming for given we're that full surrenders come back to to long our term assumption there over .
[Analyst] (Dowling): Gotcha. Thank you.
Joel Hurwitz: Gotcha. Thank you.
Speaker #5: And that is baked our 2026 guidance
Operator: We'll go next to Sunit Kamath at Jefferies.
Operator: We'll go next to Sunit Kamath at Jefferies.
Speaker #5: .
[Analyst] (Jefferies): Thanks. Good morning. I wanted to start with Group. You know, one of the questions we always get is, you know, AI is coming in, it's going to take out X percent of the workforce, that's going to negatively impact group benefits companies. And if I look at your guidance, you know, it looks like growth on top of, you know, pretty good growth this year, so doesn't feel like you're building anything in related to that. So can you just talk about what you're seeing maybe at the customer level in terms of either hiring or layoffs, just so we can kind of see what the scope is in terms of where we are?
Suneet Kamath: Thanks. Good morning. I wanted to start with Group. You know, one of the questions we always get is, you know, AI is coming in, it's going to take out X percent of the workforce, that's going to negatively impact group benefits companies. And if I look at your guidance, you know, it looks like growth on top of, you know, pretty good growth this year, so doesn't feel like you're building anything in related to that. So can you just talk about what you're seeing maybe at the customer level in terms of either hiring or layoffs, just so we can kind of see what the scope is in terms of where we are?
Speaker #7: Thank
Speaker #7: .
Speaker #3: We'll go you next Sumit to Kamath at Jefferies
Speaker #3: .
Speaker #8: to start Thanks . Good morning . with I wanted group . Gotcha . get is , know always you You know , one of the questions we coming in .
Speaker #8: It's going to take out percent of the x going to negatively impact benefits group companies . That's And if I look at your you know , it looks like growth on top of , you know , pretty guidance , good growth year .
Speaker #8: So it doesn't feel like this building you're anything related to that . can you about what just talk you're seeing maybe at the customer in level in terms of either or we Just so layoffs ?
Ramy Tadros: Thank you, Sunit. It's Ramy here. So look, when we construct our PFO outlook, we look at a number of factors. We have certainly incorporated what we have been seeing in our book with respect to employment actions that some of our clients have taken, be they AI driven or otherwise. And the outlook assumes that this trend would continue in 2026. So we are taking a very grounded view of where that picture is heading. But look, at the same time, in our outlook, we also incorporate what we're seeing in terms of growth, be it in terms of adding coverages to existing employers and new sales, increase in participation rates via our enrollment effort.
Ramy Tadros: Thank you, Sunit. It's Ramy here. So look, when we construct our PFO outlook, we look at a number of factors. We have certainly incorporated what we have been seeing in our book with respect to employment actions that some of our clients have taken, be they AI driven or otherwise. And the outlook assumes that this trend would continue in 2026. So we are taking a very grounded view of where that picture is heading. But look, at the same time, in our outlook, we also incorporate what we're seeing in terms of growth, be it in terms of adding coverages to existing employers and new sales, increase in participation rates via our enrollment effort.
Speaker #8: can kind of see what the is in scope terms of So where we are .
Speaker #1: Sunita . It's Thank you . Rami here . look , So when we construct outlook , we look our at a number of factors certainly what we have have incorporated in our been seeing .
Speaker #1: respect to employment
Speaker #1: That some of our clients have taken very actions otherwise, AI-driven or not. And the outlook assumes that this trend will continue into 2026.
Speaker #1: we are would So a very grounded view of of picture taking is heading in at the time in our same outlook . We also incorporate what we're seeing in terms of growth coverages to adding terms of , be and new it in employers sales increase in participation rates via enrollment existing , you know , a our effort strong and that is to one one , which I've about a start .
Ramy Tadros: A piece of that is the very strong start to Q1, which I've talked about earlier, and that's been a strong start, both in terms of persistency, persistency in sales and really sales across the entire book, inclusive of disability. So when you put all of this thing together, we feel comfortable with the outlook range. The diversified nature of our book across industry, size of employers, and geography are all helpful factors for us here, if we were to see more ebbs and flows in terms of the employment levels across economies as well as across sectors. So net-net, we feel comfortable with the outlook, and we are incorporating what we're actually seeing by way of employment actions in our book as well.
Ramy Tadros: A piece of that is the very strong start to Q1, which I've talked about earlier, and that's been a strong start, both in terms of persistency, persistency in sales and really sales across the entire book, inclusive of disability. So when you put all of this thing together, we feel comfortable with the outlook range. The diversified nature of our book across industry, size of employers, and geography are all helpful factors for us here, if we were to see more ebbs and flows in terms of the employment levels across economies as well as across sectors. So net-net, we feel comfortable with the outlook, and we are incorporating what we're actually seeing by way of employment actions in our book as well.
Speaker #1: Strong—that's been talked both in terms of persistency start and in sales, and really sales persistency, entire book, inclusive of across the disability.
Speaker #1: when you of this So . together feel We comfortable with the outlook put all range , the diversified nature of across our book industry , size of employers and geography are all helpful factors for us If we were here .
Speaker #1: to see flows in more the the employment levels across well economies as as as so net net , sectors , we feel with outlook and that comfortable we are incorporating what we're seeing by way of actually employment actions ebbs and well book as
[Analyst] (Jefferies): Okay, that's helpful. And then I guess for John on capital, I wanted to ask about Japan, because one of the things that we're hearing is that, you know, unrealized losses in Japan can influence the sort of dividend formulas in terms of getting capital out. So I just wanted you to maybe address that and kind of how you think that could play out in 2026. Thanks.
Suneet Kamath: Okay, that's helpful. And then I guess for John on capital, I wanted to ask about Japan, because one of the things that we're hearing is that, you know, unrealized losses in Japan can influence the sort of dividend formulas in terms of getting capital out. So I just wanted you to maybe address that and kind of how you think that could play out in 2026. Thanks.
Speaker #8: about wanted to ask because one of the things that we're is that , you know , unrealized , I Japan can influence the dividend formula in losses of getting sort of wanted you to maybe out .
Speaker #8: about wanted to ask because one of the things that we're is that , you know , unrealized , I Japan can influence the dividend formula in losses of getting sort of wanted you to maybe So I just address of how you think that play out could kind Thanks 2026 .
John McCallion: Yeah. Good morning, Sunit. Yeah, like you said, there in Japan and elsewhere, quite honestly, you know, there's multiple factors when you think about dividend capacity, right? You have your solvency ratios. You also need to look at kind of the retained earnings. And that is true, but, you know, there's other factors that go into that, from the balance sheet, as well. So there's multiple things that get in there. I think at the end of the day, for us-
John McCallion: Yeah. Good morning, Sunit. Yeah, like you said, there in Japan and elsewhere, quite honestly, you know, there's multiple factors when you think about dividend capacity, right? You have your solvency ratios. You also need to look at kind of the retained earnings. And that is true, but, you know, there's other factors that go into that, from the balance sheet, as well. So there's multiple things that get in there. I think at the end of the day, for us-
Speaker #8: that .
Speaker #2: Yeah . Good
Speaker #2: said there Like you in
Speaker #2: You know , there's multiple dividend capacity , think about right . You have your you solvency ratios . You also need to look at kind of the retained earnings have your is true .
Speaker #2: And that, but you know, there are other factors that go into that from the sheet, as well as balance multiple terms in there.
[Analyst] (Barclays): ... we're not seeing any constraints on our dividend capacity, in Japan. So there's really no change, and that includes, you know, as it relates to transition to the ESR, and we feel like we're in a healthy position when it comes to, you know, retained earnings as well.
John McCallion: ... we're not seeing any constraints on our dividend capacity, in Japan. So there's really no change, and that includes, you know, as it relates to transition to the ESR, and we feel like we're in a healthy position when it comes to, you know, retained earnings as well.
Speaker #2: things that get I think at the So end of the us , day for we're not seeing any constraints dividend on our capacity in Japan well .
Speaker #2: really no know , as it that relates to . the So there's ESR . And we feel like we're in a position when it comes to , you know , retained well earnings .
Speaker #2: really no know , as it that relates to . the So there's ESR . And we feel like we're in a position when it comes to , you know , retained well earnings as
Speaker #2: really no know , as it that relates to . the So there's ESR . And we feel like we're in a position when it comes to , you know , retained well earnings as
[Analyst] (Jefferies): Can you just size what percentage of the Japan book has been reinsured out of Japan?
Suneet Kamath: Can you just size what percentage of the Japan book has been reinsured out of Japan?
Speaker #8: Can you size what percentage of the just of Japan has been ? reinsured out
[Analyst] (Barclays): I don't have that off the top of my head. We've done reinsurance for quite some time over the course of, you know, the last probably decade. We've utilized mostly, you know, our Bermuda entity when it comes to that, but it's a portion, but it's, you know, it's certainly not a majority.
John McCallion: I don't have that off the top of my head. We've done reinsurance for quite some time over the course of, you know, the last probably decade. We've utilized mostly, you know, our Bermuda entity when it comes to that, but it's a portion, but it's, you know, it's certainly not a majority.
Speaker #2: that off the We I don't have my head . We've we've done reinsurance for quite time change . done what of , you know , the last probably And decade .
Speaker #2: we've And our Bermuda utilized it comes to that .
[Analyst] (Jefferies): Okay, thanks.
Suneet Kamath: Okay, thanks.
Speaker #2: a it's But it's a Japan book know , it's portion , but a it's certainly not some majority it's , you not .
Speaker #2: a it's But it's a Japan book know , it's portion , but a it's certainly not mostly , you know ,
Operator: We'll go next to Wes Carmichael at Wells Fargo.
Operator: We'll go next to Wes Carmichael at Wells Fargo.
Speaker #8: Thanks .
[Analyst] (Wells Fargo): Hey, good morning, and thank you. First question on group disability. I think you had a little bit of less favorable experience in the quarter, and I think the non-medical health loss ratio was kind of flattish sequentially. We've heard similar comments, I think, from peers. Just wondering if you could unpack a little bit what you saw on disability and if you'd expect that to kind of continue into 2026.
Wes Carmichael: Hey, good morning, and thank you. First question on group disability. I think you had a little bit of less favorable experience in the quarter, and I think the non-medical health loss ratio was kind of flattish sequentially. We've heard similar comments, I think, from peers. Just wondering if you could unpack a little bit what you saw on disability and if you'd expect that to kind of continue into 2026.
Speaker #3: go next . Wes Carmichael at Fargo Wells
Speaker #3: . morning and
Speaker #9: First question on group Hey . Good little bit of less favorable in the experience quarter , and I think the think kind of sequentially disability .
Speaker #9: First question on group Hey . Good little bit of less favorable in the experience quarter , and I think the think kind of sequentially flattish non-medical heard similar from peers .
Speaker #9: Just wondering if you could I unpack a little comments , I think , bit saw on if you expect that to kind continue 2026 .
Ramy Tadros: Yes, it's Ramy here. So we did have some pressure in the quarter with respect to disability. Think about it as just slightly over a point in our non-medical health ratio. There are a few moving parts here. So one, we did see a slightly higher average severity across our long-term disability book. We did see Social Security decisions come a bit down this quarter. Those tend to kind of fluctuate quarter to quarter. Recoveries and incidents, I would say recoveries were slightly down in the quarter, but for the full year, they were strong and above expectations. Incidents slightly ticked up in the quarter, but again, for the full year, they were also largely in line with expectations.
Ramy Tadros: Yes, it's Ramy here. So we did have some pressure in the quarter with respect to disability. Think about it as just slightly over a point in our non-medical health ratio. There are a few moving parts here. So one, we did see a slightly higher average severity across our long-term disability book. We did see Social Security decisions come a bit down this quarter. Those tend to kind of fluctuate quarter to quarter. Recoveries and incidents, I would say recoveries were slightly down in the quarter, but for the full year, they were strong and above expectations. Incidents slightly ticked up in the quarter, but again, for the full year, they were also largely in line with expectations.
Speaker #9: of what you
Speaker #1: disability . Think about as just it over a point non-medical health ratio moving parts here . So one , see a we did .
Speaker #1: average severity in our across our book . We long term did Social Security a bit down this see Those fluctuate come quarter . to quarter quarter tend to kind of .
Speaker #1: Recoveries and incidents . I would recoveries say were down in the quarter , but for year There are a strong above expectations and .
Speaker #1: Incidents slightly ticked up in the quarter . again , for But also largely in line with the full year , there expectations . if you think about how to trend we were So while this has been an quarter , were certainly And I wouldn't trend .
Speaker #1: Incidents slightly ticked up in the quarter . again , for But also largely in line with the full year , there expectations . if you think about how to trend we were So while this has been an quarter , were certainly unfavorable from the extrapolate outcomes in this 2026 .
Ramy Tadros: So, if you think about how we were to trend this, while this has been an unfavorable quarter, it certainly does not make a trend, and I wouldn't extrapolate from the outcomes in this quarter into 2026.
Ramy Tadros: So, if you think about how we were to trend this, while this has been an unfavorable quarter, it certainly does not make a trend, and I wouldn't extrapolate from the outcomes in this quarter into 2026.
[Analyst] (Wells Fargo): That's very helpful. And maybe, Ramy, just sticking with you, but in terms of mandatory paid family leave and related products, I think a few states are rolling out new mandatory programs. But as I kind of look across the map of the US with mandatory, you know, leave, it looks like there's a lot of white space. You know, there's no Texas, no Florida, a lot of central US states don't have the programs yet. So I know the offerings maybe aren't as profitable as some of the other products in Group, but do you see that as a big opportunity to take more market share from MetLife as more states come online?
Wes Carmichael: That's very helpful. And maybe, Ramy, just sticking with you, but in terms of mandatory paid family leave and related products, I think a few states are rolling out new mandatory programs. But as I kind of look across the map of the US with mandatory, you know, leave, it looks like there's a lot of white space. You know, there's no Texas, no Florida, a lot of central US states don't have the programs yet. So I know the offerings maybe aren't as profitable as some of the other products in Group, but do you see that as a big opportunity to take more market share from MetLife as more states come online?
Speaker #9: That's very
Speaker #9: helpful . And maybe , Rami , just
Speaker #9: But in with you . terms of mandatory sticking and
Speaker #9: But in with you . terms of mandatory sticking and related family leave few products , I are rolling make a mandatory programs , the map of the kind of but as I with with you look across mandatory , it looks like there's out new US a lot of states Florida , Texas , know , there's lot of US states central a programs yet .
Speaker #9: don't have the the I know as maybe aren't profitable as some of the other So quarter products in group , but do you see that as a big opportunity to take more market share from more states online no
Ramy Tadros: Yeah, thank you for the question. So maybe I'll just step back and talk about disability in general and then come back to paid family leave, and really also bring you back to the context that we talked about at our Investor Day. We identified the disability space in general as an attractive growth opportunity. A lot of secular trends are driving that growth, inclusive of the state-based regulations that are coming through. We made investments in this space both to provide best-in-class capabilities to employers and employees. We talked about some of our digital capabilities as well, and that value proposition is resonating well in market. And look, as part of that strategy, we also talked about employers wanting to do more with fewer and talked about absence and disability as an anchor product for us.
Ramy Tadros: Yeah, thank you for the question. So maybe I'll just step back and talk about disability in general and then come back to paid family leave, and really also bring you back to the context that we talked about at our Investor Day. We identified the disability space in general as an attractive growth opportunity. A lot of secular trends are driving that growth, inclusive of the state-based regulations that are coming through. We made investments in this space both to provide best-in-class capabilities to employers and employees. We talked about some of our digital capabilities as well, and that value proposition is resonating well in market. And look, as part of that strategy, we also talked about employers wanting to do more with fewer and talked about absence and disability as an anchor product for us.
Speaker #1: Thank you for the So I'll question . back about disability in general and then come back to family just step leave paid bring you also and and really back to the that we talked context about our at Investor disability space in general identified the attractive opportunity .
Speaker #1: . A lot We of trends are secular driving that growth , inclusive of the state based that are coming through . We made this space investments in regulations to both provide best in class employers and employees .
Speaker #1: We about some of our talked capabilities to as well value , and that proposition is resonating well in capabilities market . And look , as part of that strategy , we also talked about employers wanting to do more with talked about disability absence and an product for us anchor as in here is that the vast majority of our absence and our sales are overall actually suite of products .
Ramy Tadros: And the proof point in here is that the vast majority of our absence and disability sales are actually bundled with our overall suite of products. So that's kind of the broader context around disability and absence in general. When you think about paid family medical leave, this has been a piece of that puzzle and one that has given us some nice tailwinds as more states have rolled out programs, including Minnesota and others. And we talked about the picture of that continuing because of the wide space you've just mentioned. And our approach in this space leverages all the capabilities that I've talked about, but also leverages the breadth of our product portfolio.
Ramy Tadros: And the proof point in here is that the vast majority of our absence and disability sales are actually bundled with our overall suite of products. So that's kind of the broader context around disability and absence in general. When you think about paid family medical leave, this has been a piece of that puzzle and one that has given us some nice tailwinds as more states have rolled out programs, including Minnesota and others. And we talked about the picture of that continuing because of the wide space you've just mentioned. And our approach in this space leverages all the capabilities that I've talked about, but also leverages the breadth of our product portfolio.
Speaker #1: disability the broader around disability and absence fewer general . context When you think about family medical leave paid , this has been a puzzle and one that has given us some nice more tailwinds as out have rolled piece of that Minnesota and states others .
Speaker #1: programs , we talked about the that picture of including continuing because of the wide space just mentioned . And approach in our this space all the leverages capabilities that I've talked about .
Ramy Tadros: Just to give you another data point here, when I look at our one-on-one sales for PFML, on average, they came with four or five additional coverages that were bundled with those sales. So this is a really classic example of us identifying an opportunity, formulating a strategy, and just executing really well against it, and we're very pleased with the outcome.
Ramy Tadros: Just to give you another data point here, when I look at our one-on-one sales for PFML, on average, they came with four or five additional coverages that were bundled with those sales. So this is a really classic example of us identifying an opportunity, formulating a strategy, and just executing really well against it, and we're very pleased with the outcome.
Speaker #1: also leverages the And breadth of our product portfolio to give you data another here , when I look point one on one sales for , on came with average , they were coverages that 4 or 5 additional those sales .
Speaker #1: So Bundled really is, this a classic example of U.S. opportunity, and strategy really well against it. And we're just pleased with every outcome.
[Analyst] (Wells Fargo): Thank you.
Wes Carmichael: Thank you.
Operator: We'll go next to Alex Scott at Barclays.
Operator: We'll go next to Alex Scott at Barclays.
Speaker #1: the
Speaker #9: Thank .
[Analyst] (Barclays): Hi, thanks for taking it. First one is on corporate. I just wanted to understand the $500 and $700. I mean, there's some different moving pieces there with the resegmentation. So is there any-- I guess in particular, is there anything that's more specific to 2026 in that number? It just felt a little higher than I was expecting when I was sort of going back and understanding holdings and corporate and what the combination and MIM would mean.
Alex Scott: Hi, thanks for taking it. First one is on corporate. I just wanted to understand the $500 and $700. I mean, there's some different moving pieces there with the resegmentation. So is there any-- I guess in particular, is there anything that's more specific to 2026 in that number? It just felt a little higher than I was expecting when I was sort of going back and understanding holdings and corporate and what the combination and MIM would mean.
Speaker #3: We'll go
Speaker #3: Alex Barclays .
Speaker #10: Hi
Speaker #10: First one is on I just corporate . . to wanted the understand 507 hundred . I mean , moving pieces different there with the segmentation .
Speaker #10: is there any I guess in So particular , is there that's anything specific to formulating a 26 in that number ? It just higher than there's some a little expecting when I more I was sort of felt going was and understanding holdings .
Ramy Tadros: Hey, good morning, Alex. You're saying you were assuming a higher, you would-
Ramy Tadros: Hey, good morning, Alex. You're saying you were assuming a higher, you would-
Speaker #10: And corporate, and what the combination of MIM and back would mean.
[Analyst] (Barclays): No, I was thinking it wouldn't be quite that high of a, or I wouldn't-
Alex Scott: No, I was thinking it wouldn't be quite that high of a, or I wouldn't-
Speaker #2: good morning Alex . You Hey , you're you you were assuming higher a saying would . you
Ramy Tadros: Loss.
Ramy Tadros: Loss.
[Analyst] (Barclays): -expect it as big a loss, I guess.
Alex Scott: -expect it as big a loss, I guess.
Ramy Tadros: Okay.
[Analyst] (Barclays): So, I just wanted to understand-
Ramy Tadros: Okay.
Alex Scott: So, I just wanted to understand-
Ramy Tadros: Yeah
Ramy Tadros: Yeah
[Analyst] (Barclays): If there was something more one-time in nature for 2026 in the numbers. Sorry.
Alex Scott: If there was something more one-time in nature for 2026 in the numbers. Sorry.
Speaker #10: be thinking it Know . I was wouldn't quite that high of a I wouldn't it as expect big a loss . I I just wanted to guess .
John McCallion: ...Yeah, I mean, maybe I'll use Q4 to maybe try to get you there, right? So, on an ex-Notable basis, our loss was 38. And you have to take into account if there was some, you know, I'd say, non-recurring items in taxes, expenses. We had some reserve releases, and we had some excess quarterly NII in that in CNO. That probably gets you up to a run rate of around 100. And then when you translate that into the next year, you have to take into account, and I think this is important, so I appreciate the question. The you know, we did some reinsurance transactions in the fourth quarter. So the Talcott Resolution transaction we announced, you know, that's about $100 million of lost earnings. We did the Chariot Re one.
John McCallion: ...Yeah, I mean, maybe I'll use Q4 to maybe try to get you there, right? So, on an ex-Notable basis, our loss was 38. And you have to take into account if there was some, you know, I'd say, non-recurring items in taxes, expenses. We had some reserve releases, and we had some excess quarterly NII in that in CNO. That probably gets you up to a run rate of around 100. And then when you translate that into the next year, you have to take into account, and I think this is important, so I appreciate the question. The you know, we did some reinsurance transactions in the fourth quarter. So the Talcott Resolution transaction we announced, you know, that's about $100 million of lost earnings. We did the Chariot Re one.
Speaker #10: Something there was understand, if one time in more. Nature for 26. So, sorry, number.
Speaker #2: Yeah . I mean ,
Speaker #2: maybe use Q4 I'll . in the I'll to maybe try to get you there . So Right . on an ex notable basis , our loss 38 and have to take you into there was account if some , you know , I'd say non-recurring items in taxes , expenses .
Speaker #2: had some reserve We releases and we had some excess quarterly in that in NII CNO probably gets , that you up a run rate of around 100 .
Speaker #2: when you into the next year , you have translate that to take into And then account . think this is And I important .
Speaker #2: So I appreciate the question . The you know , we did some reinsurance transactions in the fourth quarter . So the Talcott transaction , we announced , you know , lost 100 million of of earnings .
John McCallion: So I think close to 30 of additional lower earnings from MLH, which is now in corporate and other. And then the other thing you have to take into account just for seasonality is, remember, every Q1 and Q3, we have about $15 million more of cost for preferred dividends. So that should help you with your quarterly modeling, but that's, that, that's a little bit of, of what you're missing.
John McCallion: So I think close to 30 of additional lower earnings from MLH, which is now in corporate and other. And then the other thing you have to take into account just for seasonality is, remember, every Q1 and Q3, we have about $15 million more of cost for preferred dividends. So that should help you with your quarterly modeling, but that's, that, that's a little bit of, of what you're missing.
Speaker #2: We did that's about chariot one . the So I think close to additional 30 of lower earnings from now in Mlh , which is corporate and then the other thing you have to take into other .
Speaker #2: And just for remember, every first and third quarter have about $15 million more of cost for preferred dividends. So, that should help you with your quarterly modeling.
[Analyst] (Barclays): Got it. Very helpful. Next one for you is just on the artificial intelligence topic, and I think you touched some on just employment sensitivity in group. But is there any other, you know, opportunities or risks that you'd point out? And can you talk about even in just your investment portfolio, you know, exposure to software, et cetera? This is just a topic that we're beginning to get a lot more questions on, and it's very theoretical, hard to answer, but would be interested in your take.
Alex Scott: Got it. Very helpful. Next one for you is just on the artificial intelligence topic, and I think you touched some on just employment sensitivity in group. But is there any other, you know, opportunities or risks that you'd point out? And can you talk about even in just your investment portfolio, you know, exposure to software, et cetera? This is just a topic that we're beginning to get a lot more questions on, and it's very theoretical, hard to answer, but would be interested in your take.
Speaker #2: that's that's a But little bit of of what missing you're
Speaker #2: that's that's a But little bit of of what missing you're .
Speaker #10: Very it . helpful Got quarter we for you . just on the artificial intelligence topic . And I think you touched some on just employment sensitivity in group .
Speaker #10: any But is there other or risks , you know that you'd point out . And , opportunities can you about even just talk your investment portfolio , exposure to software , just a topic that we're beginning to get a questions lot more on , and very it's theoretical .
Speaker #10: Etc. Be interested in your—there's take. Is.
John McCallion: Good morning, Alex. Maybe I'll just start. I mean, look, I think, you know, one of the things that we pride ourselves in, and not just in the investment portfolio, but across our firm, is, and we reference this quite, quite a bit at Investor Day, is diversification. And whether that's diversification, geographically, we have diversification in types of businesses. So we have, you know, healthy, balance sheet businesses, and then we have very healthy, capital light businesses across the globe. On top of that, we have different risk profiles. And then if you go to the, investment portfolio, I think it's fair to say, and we've seen other numbers of internal analyses that kind of prove it. We're probably the most diversified, across, across the industry in terms of our approach.
John McCallion: Good morning, Alex. Maybe I'll just start. I mean, look, I think, you know, one of the things that we pride ourselves in, and not just in the investment portfolio, but across our firm, is, and we reference this quite, quite a bit at Investor Day, is diversification. And whether that's diversification, geographically, we have diversification in types of businesses. So we have, you know, healthy, balance sheet businesses, and then we have very healthy, capital light businesses across the globe. On top of that, we have different risk profiles. And then if you go to the, investment portfolio, I think it's fair to say, and we've seen other numbers of internal analyses that kind of prove it. We're probably the most diversified, across, across the industry in terms of our approach.
Speaker #2: Hey , good Alex . Maybe morning I'll just start . I mean , , you know , one of the think things that pride in and ourselves not I just in the we investment look , portfolio , but across our firm is and we referenced this quite , quite a Investor Day .
Speaker #2: Is , bit at is diversification . And whether diversification geographically we have diversification of in types businesses . So we , you know , healthy that's balance sheet businesses .
John McCallion: We're able to do that because we have a fully scaled, global asset manager, where we are. You know, 'cause some people, if you say diversified, you'd say, "Well, how do you stay close?" We're able to stay close to every credit that we underwrite and monitor because we have scale. So we're able to do this because of our scale and our competitive advantages. And you know, when it comes to the software point that you referenced, at the end of the day, you know, there's a variety of different cycles out there. This is probably in places where I think in the industry, we're probably not that exposed, just given our approach to kind of investment grade-oriented investing. So we've seen it.
John McCallion: We're able to do that because we have a fully scaled, global asset manager, where we are. You know, 'cause some people, if you say diversified, you'd say, "Well, how do you stay close?" We're able to stay close to every credit that we underwrite and monitor because we have scale. So we're able to do this because of our scale and our competitive advantages. And you know, when it comes to the software point that you referenced, at the end of the day, you know, there's a variety of different cycles out there. This is probably in places where I think in the industry, we're probably not that exposed, just given our approach to kind of investment grade-oriented investing. So we've seen it.
Speaker #2: Kind of, we're analyzing those numbers—diversified across the industry in terms of our... We're able to do that because we approach...
Speaker #2: a fully scaled asset , global asset , where are , you know , we because some people , if you say diversified , you'd say , well , how do you stay close ?
Speaker #2: to stay close to We're able every credit underwrite and monitor have that we , because we So to do we're able scale . and our scale competitive advantages .
Speaker #2: And comes to the the software point that referenced , at the end of the , you day , there's a you know , cycles out different variety of there .
Speaker #2: This is probably in places where industry , we're the not that probably exposed , just I think in approach to kind of an investment grade oriented investing .
John McCallion: I'm not so sure it, you know, we really, you know, weigh in too much here because we don't think it's that much of an exposure to the industry or us.
John McCallion: I'm not so sure it, you know, we really, you know, weigh in too much here because we don't think it's that much of an exposure to the industry or us.
Speaker #2: So I we've seen sure it not so , you know , , you know , weigh it . much here because we in , don't think it's I'm really exposure to the or industry an us .
[Analyst] (Barclays): Got it. Okay. Thank you.
Alex Scott: Got it. Okay. Thank you.
Operator: That is all the time we have for questions today. I will now turn the conference back over to John Hall for closing remarks.
Operator: That is all the time we have for questions today. I will now turn the conference back over to John Hall for closing remarks.
Speaker #10: Got it . Okay . Thank you .
John Hall: Thanks, everybody, for joining us today, and have a good day.
John Hall: Thanks, everybody, for joining us today, and have a good day.
Speaker #3: And that is all the time for questions today . I will now turn the over to John for closing conference back .
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
