Q2 2026 MetLife Inc Earnings Call - Pre-Recorded
Speaker #1: Through METLIFE's second quarter results. It was a strong quarter, and it's another example of how our new frontier strategy is delivering results. Across the company, we saw broad-based growth, strong underwriting results, and continued operating discipline.
Speaker #1: And what encouraged me the most was the breadth of that performance: growth came from across our businesses and regions, and not from any single market or product.
Speaker #1: And the investments we've made over the years in our businesses, our capabilities, and our distribution are showing up where it counts. In our results.
Speaker #1: Adjusted EPS was up 20% from the prior year quarter, well above our commitment to double-digit growth. Adjusted return on equity was 17% for the second consecutive quarter in the top end of our target range.
Speaker #1: And we achieved a direct expense ratio of 12.1%. This is despite absorbing Pine Bridge, which is a higher expense ratio business. And this highlights how we're managing expenses with discipline and improving productivity across the organization.
Speaker #1: Including through the use of our AI-enabled capabilities. Turning to the company results: net income was $705 million, while adjusted earnings increased 15% to $1.6 billion.
Speaker #1: Driven by favorable underwriting and volume growth. Importantly, this was a quarter benefited from multiple sources of growth, underscoring the breadth and durability of our business model.
Speaker #1: On a per-share basis, adjusted earnings were $2.43, up 20%. Now, let me briefly walk through our businesses. Our group benefits business performed very well.
Speaker #1: Benefiting from deep customer relationships, broad reach, and disciplined execution. Adjusted earnings were up 25% to $503 million. Driven by favorable underwriting and volume growth.
Speaker #1: Revenue growth remained solid, with adjusted premium fees and other revenues up 1% to $6.5 billion. Or 4% when excluding participating contracts. In retirement and income solutions, we continue to benefit from the favorable demographic trends, along with the breadth of our platform and disciplined execution.
Speaker #1: Adjusted earnings increased 2% to $377 million. Largely on favorable recurring interest margins and volume growth, partially offset by lower variable investment income. Adjusted PFOs, excluding pension risk transfers, jumped 19% to $1.3 billion.
Speaker #1: Mostly driven by UK longevity reinsurance and structured settlement sales. In Asia, adjusted earnings were $420 million, up 21% as reported, and $25% on a constant currency basis.
Speaker #1: Reflecting stronger equity markets and higher variable investment income. As well as favorable volume growth. Sales were up 17% to $794 million on a constant currency basis.
Speaker #1: Driven by strong performance across markets. We also continued to grow general account assets under management, up 6% on a constant currency basis. In Latin America, adjusted earnings were $268 million, up 15% as reported, and 4% on a constant currency basis.
Speaker #1: Driven by volume growth across the region, as well as favorable market factors and taxes. Partially offset by the impact of the Mexico value-added tax change.
Speaker #1: Adjusted PFOs were $1.9 billion, up 16% as reported, and 6% on a constant currency basis. On strong growth and solid persistency across the region.
Speaker #1: Sales were $456 million, up 9% on a constant currency basis. Driven by strong growth in third-party distribution, powered by our accelerator platform. In EMEA, adjusted earnings were $108 million, up 8% as reported, and 11% on a constant currency basis.
Speaker #1: Driven by strong volume growth, partially offset by higher expenses. EMEA adjusted PFOs reached $806 million, up 12% on both the reported and constant currency basis.
Speaker #1: Reflecting robust sales momentum and solid renewal activity across the region. Sales were $346 million, up 15% on a constant currency basis. Reflecting continued growth throughout the region.
Speaker #1: And in METLIFE investment management, adjusted earnings rose 6% to $57 million, reflecting business growth and expense management. The Pine Bridge integration continues to move forward well, and is enhancing our global capabilities and scale in asset management.
Speaker #1: You'll find more detail on how our business segments perform by reviewing our earnings release dated August 5. Now, a few key financial metrics. Adjusted return on equity remained at 17%, at the top end of our target range, reflecting strong earnings generation and disciplined capital management.
Speaker #1: Adjusted book value per common share increased 3% to $57.71. Now, cash and capital management. We entered the quarter with $3.4 billion of cash and liquid assets at our holding companies, within our target range.
Speaker #1: Our durable free cash flow gives us the flexibility to invest in growth while continuing to return capital to shareholders and during the quarter we bought back approximately $700 million of our common shares, and paid roughly $400 million in common stock dividends, for a total of $1.1 billion return to shareholders.
Speaker #1: Also, our board of directors recently announced a new $3 billion share repurchase authorization. A reflection of the confidence in our business, earnings power, and long-term outlook.
Speaker #1: So, to sum up, we delivered strong results this quarter, continued to invest in the future of the business, and further progressed on our new frontier strategy.
Speaker #1: And most importantly, these results were driven by fundamentals. Volume growth, strong underwriting, and the strength of our diversified global platform. As we look ahead, we're confident in our ability to continue delivering on our commitments, supported by the strength of our franchise, the resilience of our business model, and our disciplined approach to capital management.
