MetLife Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 1, 2025
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Operator

Welcome to the MetLife First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a 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.

Operator

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.

John Hall
John Hall
SVP & Head, IR at MetLife

Thank you, operator. Good morning, everyone. We appreciate you joining us for MetLife's first quarter twenty twenty five earnings call. Before we begin, I'd 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 Halaf, President and Chief Executive Officer and John McCallion, Chief Financial Officer and Head of MetLife Investment Management.

John Hall
John Hall
SVP & Head, IR at MetLife

Also participating in the discussion are other members of senior management. Last night, we released a set of supplemental slides, which address the quarter as well as the risk transfer transaction we also announced yesterday. They are available on our website. John McCallion will speak to those supplemental slides in his prepared remarks. An appendix to the slides features additional disclosures, GAAP reconciliations and other information, which you should also review.

John Hall
John Hall
SVP & Head, IR at MetLife

After prepared remarks, we will have a Q and A session, which will end promptly at the top of the hour. With that, over to Michel.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Thank you, John, and good morning, everyone. A few months ago, we rolled out our New Frontier strategy to guide MetLife over the course of the next five years. As you will recall, a keystone of our new frontier strategy is the all weather nature of our market leading set of businesses. And once again, after powering through the supply and mortality challenges of COVID and then bank liquidity concerns, we find our strategic diversification put to the test. As we move through 2025 with the odds of a recession on the rise, we are seeing unprecedented volatility in the daily trading of The U.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

S. Equity markets. We are also seeing interest rates rise on the long end of the curve, fall in the middle, but Fed funds still remain high at the short end. Meanwhile, after a historic run of strengthening, the U. S.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Dollar has started to weaken against many currencies around the world. Although MetLife is not immune to the impacts presented by this uncertain backdrop, we are confident we have the right businesses and the right strategy to meet the moment. At our core, MetLife

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

is

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

a recurring revenue business model. In any given year, the vast majority of the revenues and earnings we generate are a function of renewal premium or investment income from assets and liabilities that are already on our books. While a slowing economy can dampen growth for our Group Benefits business, we've not yet seen cracks in the job market. Further, the primary profit driver mortality for our largest group product line Group Life is largely uncorrelated to the economy. For our Retirement and Income Solutions business and our Investment Management business, higher long term interest rates are helpful on the demand side.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

The underlying growth of our international businesses, which has been partly masked by the strong dollar, could start to emerge as a tailwind. And standing behind it all, our investment portfolio has been risk off for several years and is well situated to absorb recessionary stress. Our positive track record on this front is well established. Over the course of our one hundred and fifty seven year history, we have seen challenging times before and have succeeded in driving long term value for our shareholders and other stakeholders and we are well positioned to do so again. Let me now turn to our first quarter results, which we reported last night.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

I believe they reflect the resilience of our business model and underscore many of the points I just made. We reported adjusted earnings of $1,300,000,000 or $1.96 per share, up 7% from the same period a year ago. We saw favorable underwriting, good volume growth and better variable investment income in the quarter, which were partially offset by unfavorable foreign currency exchange and recurring interest margins. Variable investment income was aided by the performance of our real estate funds, which continued the steady recovery. Private equity funds gained 1.6% in the quarter, which is below our implied quarterly outlook return.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Our adjusted return on equity in the first quarter was 14.4% and our 12% direct expense ratio is evidence of our efficiency mindset at work. Shifting to business segment results. Our Group Benefits business reported adjusted earnings of $367,000,000 up 29% from the prior year period on favorable life underwriting margins due to lower mortality. We continue to see favorable mortality for the working age population, which is consistent with CDC data. Moving to Retirement and Income Solutions or RIS.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Adjusted earnings totaled $4.00 $1,000,000 in the quarter. Sales of synthetic GICs and UK longevity reinsurance were strong in the quarter and inflows associated with pension risk transfers totaled $1,800,000,000 an outstanding start for the year. Our liability exposures are up 8% from a year ago. Looking to Asia, adjusted earnings were $374,000,000 down 12% over the same period a year ago on lower underwriting margins and higher taxes. Sales for the region were up 10% on strong volume growth in Korea and China.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Sales in Japan have started to turn the corner and we are seeing very good energy around a new U. S. Dollar denominated product that we introduced in the banca channel at the end of the first quarter. Turning to Latin America, adjusted earnings were $218,000,000 down 6% from the year ago period, though foreign exchange rates played a role. On a constant currency basis, our adjusted earnings were up 7% compared to the prior year period.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Adjusted PFOs in the region tell a similar story, up 1% on reported basis, but up 14% on a constant currency basis. Overall, we continue to see strong momentum across our leading markets in Latin America. Since launching our new frontier strategy in December, we have been laser focused executing on its key pillars and we are already making meaningful progress. I'd like to expand by providing two related proof points. We were pleased to announce last night another significant risk transfer deal, particularly given the current economic landscape.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

We have entered into an agreement with Talcott Resolution Life Insurance Company to reinsure approximately $10,000,000,000 of U. S. Retail variable annuity and rider reserves. Consistent with our long term objectives, the planned transaction will accelerate the runoff of MetLife's legacy business, positively reduce the company's enterprise risk and substantially lower the company's retail variable annuity tail risk. For its part, MetLife Investment Management is on an aspirational path to $1,000,000,000,000 in total assets under management.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

We have integrated the teams from Mesero that we acquired in the quarter and we are working at pace to close our roughly $100,000,000,000 AUM acquisition of Pinebridge, a substantial down payment toward achieving our aspiration for MEM. Turning to capital and cash. In the first quarter, we accelerated our capital management activity returning around $1,800,000,000 to shareholders through common stock dividends and share repurchases. We paid common stock dividends of roughly $400,000,000 and repurchased approximately $1,400,000,000 of our common shares. The above average buyback pace was a function of fewer repurchases in the fourth quarter as we were locked out of the market due to pending announcements.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

We expect subsequent quarters this year to be at a more measured pace. Following our new $3,000,000,000 repurchase authorization that was announced last night, our total Board authorization is now about $3,400,000,000 In recognition of our financial strength and flexibility, our Board of Directors increased our common dividend per share by 4.1% last week. And further adding to our financial flexibility, we were active in the debt capital markets in the first quarter issuing $1,250,000,000 of pre capitalized trust securities as well as $1,000,000,000 of subordinated debt. We ended the quarter with $4,500,000,000 of cash and liquid assets at our holding companies, which is above our target cash buffer of $3,000,000,000 to $4,000,000,000 Shifting to governance, we announced in February that Christian Mumenthaler will be joining our Board of Directors effective May 1. Prior to joining our Board, Christian had a distinguished career at Swiss Re, culminating in an eight year term as Group Chief Executive Officer.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

We are glad to have someone with his skill set and experience on our Board as we drive our new frontier strategy forward. In closing, the underlying fundamentals of our portfolio of businesses remain strong as evidenced by our solid first quarter performance. While the operating environment may present challenges, we have emerged stronger from prior periods of turmoil. We've done this by following a playbook that focuses on the levers we control like discretionary expenses, without sacrificing investments and strategic growth initiatives. When we set our new frontier goals, we were under no delusion that it would be easy.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

One of the things that gives me confidence in our ability to succeed is the team here at MetLife. For the third year in a row, we are proud to have been named among the 100 best companies to work for by Fortune. Our team is energized and engaged. That leaves me convinced that our people are up to the task at hand, driven and motivated to deliver on MetLife's superior value proposition of responsible growth, attractive returns and lower risk. Now I'll turn it over to John to cover our quarterly performance in more detail.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Thank you, Michel, and good morning, everyone. I'll refer to the 1Q twenty twenty five supplemental slides, which covers highlights of our financial performance and an update on our liquidity and capital position. We've also included a few slides summarizing our variable annuity reinsurance transaction announced yesterday. Starting on Page three, we provide a comparison of net income to adjusted earnings in the first quarter. We had net derivative gains primarily due to the strengthening of the Japanese yen and the Chilean peso versus the U.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

S. Dollar as well as unfavorable equity markets. That said, derivative gains were mostly offset by market risk benefit or MRB remeasurement losses due to lower interest rates and weaker equity markets in 1Q of twenty twenty five. In addition, net investment losses were largely the result of normal trading activity on the portfolio and credit remained stable. On page four, you can see the first quarter year over year comparison of adjusted earnings by segment and Corporate and Other.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Adjusted earnings were $1,300,000,000 up 1% and up 5% on a constant currency basis. While foreign currencies strengthened against the U. S. Dollar in the current quarter, most major currencies weakened year over year. The positive year over year drivers were favorable life underwriting, higher variable investment income and solid volume growth across most business segments.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

These were partially offset by lower recurring interest margins. Adjusted earnings per share were $1.96 up 7% and up 11% on a constant currency basis, aided by strong free cash flow and robust capital management over the prior four quarters. Moving to the businesses. Group Benefits adjusted earnings were $367,000,000 up 29% from the prior year quarter. The key driver was favorable life underwriting margins due to working age mortality improvement compared to the prior year period.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

The group life mortality ratio was eighty four point eight percent for the quarter, which is at the bottom end of our 2025 target range of eighty four percent to eighty nine percent and better than the winter flu season expectations. We continue to see post COVID favorable mortality trends in the working age population consistent with CDC data. The non medical health interest adjusted benefit ratio was seventy four point one percent, slightly above our target range of sixty nine percent to seventy four percent. Dental utilization is seasonally highest in the first quarter, and we expect the ratio to be toward the middle of the target range in Q2. Turning to the top line.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Group Benefits adjusted PFOs were up 2% year over year. While mortality improvement was favorable to Group Benefits bottom line, it masks top line growth due to the impact on premiums for participating life contracts, which can fluctuate with claims experience, but has a limited impact to earnings for those contracts. RIS adjusted earnings were $4.00 $1,000,000 up 1% year over year. The primary drivers were higher variable investment income and favorable underwriting performance, partially offset by unfavorable recurring interest margins. RES total investment spreads were 114 basis points, up two basis points sequentially due to higher VII.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

RES continues to achieve strong business momentum. Adjusted PFOs were $2,400,000,000 primarily driven by strong U. S. PRT sales in the quarter, which resulted in new inflows of $1,800,000,000 in Q1 of twenty twenty five. Excluding PRTs, RES adjusted PFOs were up 14%, primarily driven by continued growth in U.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

K. Longevity reinsurance as demonstrated by one jumbo case sold in the quarter with a contract value of $1,700,000,000 In addition, total liability exposure grew 8% versus the prior year period, most notably up 7% in general account liabilities. Moving to Asia. Adjusted earnings were $374,000,000 down 12% and down 9% on a constant currency basis, primarily due to less favorable underwriting margins and an adjustment of a deferred tax asset to reflect an increase Japan's effective tax rate. This reduced Asia's adjusted earnings by approximately $15,000,000 general account assets under management at amortized cost was up 5% year over year on a constant currency basis and sales were up 10% on a constant currency basis.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

While Japan sales were down 8% as foreign currency products remain under pressure given ongoing yen volatility, other Asia sales were up 41% on a constant currency basis, most notably with the strong growth in Korea and China. Latin America adjusted earnings were $218,000,000 down 6%, but up 7% on a constant currency basis, primarily due to higher volume growth across the region and favorable tax items in the quarter. This was partially offset by less favorable underwriting margins as well as lower Chilean and CAHE returns compared to a strong Q1 twenty twenty four. Latin America's top line continues to perform well, although reported growth rates are being masked by currency headwinds, most notably due to the weakness in the Mexican peso year over year. Adjusted PFOs were up 1%, but up 14% on a constant currency basis, driven by strong growth and solid persistency across the region.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

EMEA adjusted earnings were $83,000,000 up 8% and up 14% on a constant currency basis, primarily driven by solid volume growth, partially offset by less favorable expense margins year over year. EMEA adjusted PFOs were up 8% and up 12% on a constant currency basis, reflecting strong sales across the region. MetLife Holdings adjusted earnings were $154,000,000 down 3% due to the runoff of the business. And we continue to look for opportunities to optimize this legacy block of business through risk transfers. As announced yesterday, we have entered into an agreement with Talcott Resolution Life Insurance Company to reinsure approximately $10,000,000,000 of U.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

S. Retail variable annuity and rider statutory reserves. I will provide more details on that transaction shortly. Corporate and other adjusted loss was $248,000,000 versus an adjusted loss of $241,000,000 in the prior year. Lower net investment income was partially offset by lower expenses year over year.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

The company's effective tax rate on adjusted earnings in the quarter was 23.2%, modestly below our 2025 guidance range of 24% to 26%. On Page five, this chart reflects our pretax variable investment income for the four quarters of '20 '20 '4 and first quarter of twenty twenty five, which was $327,000,000 This result was up sequentially, but below our implied quarterly run rate of $425,000,000 Private equity returns were 1.6% in the quarter and our real estate and other funds yielded an average return of roughly 2% in the quarter. 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. Looking ahead to the second quarter, we plan to disclose preliminary information regarding our expectations for the variable investment income in the July. We are doing this for the second quarter given the current environment.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

On page six, we provide VII post tax by segment and corporate and other for the four quarters of twenty twenty four and first quarter of twenty twenty five. As reflected in the chart, RIS Asia and MetLife Holdings continue to hold the largest proportion of VII assets given their long dated liability profiles. However, as a reminder, each business has its own discrete portfolio aligned and matched to its liabilities. Moving to expenses on page seven. This chart shows a comparison of direct expense ratio for the full year 2024 of 12.1%, Q1 of twenty twenty four of 11.9% and Q1 of twenty twenty five of 12%.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

As we have highlighted previously, we believe our full year direct expense ratio is the best way to measure performance due to fluctuations in quarterly results. That said, we believe our results in Q1 position us well to achieve our full year direct expense ratio target of 12.1%, demonstrating our ongoing expense discipline and a sustained efficiency mindset. I will now discuss our cash and capital positions on Page eight. Overall, MetLife is well capitalized with more than ample liquidity. We opportunistically repurchased about $1,400,000,000 of our shares in the first quarter and have repurchased approximately $150,000,000 of our shares in April.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

And as we announced yesterday, our Board has authorized a new $3,000,000,000 share repurchase program reflecting the collective confidence in our new frontier strategy and the strength of our balance sheet as well as management's commitment to return excess capital to our shareholders. Cash and liquid assets at the holding companies were $4,500,000,000 at March 31, which is above our target cash buffer of $3,000,000,000 to $4,000,000,000 Beyond repurchases, cash at the holding companies reflects the net effects of subsidiary dividends, payment of our common stock dividend and holding company expenses and other cash flows. In addition, we had a $1,000,000,000 subordinated debt issuance and redeemed $500,000,000 of maturities in the quarter. Regarding our statutory capital for our U. S.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Companies, our twenty twenty four combined NAIC RBC ratio was 388%, which is above our target ratio of 360%. For our U. S. Companies, preliminary first quarter twenty twenty five statutory operating earnings were approximately $600,000,000 while net income was approximately $500,000,000 We estimate that our total U. S.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Statutory adjusted capital was approximately $16,400,000,000 as of 03/31/2025, down 6% from year end 2024, primarily due to dividends paid partially offset by operating earnings. Finally, we expect the Japan solvency margin ratio to be approximately seven twenty five percent as of March 31, which will be based on statutory statements that will be filed in the next few weeks. Before I wrap up, let me comment on the risk transfer transaction that we announced yesterday, highlights shown on Page nine. As we've discussed in the past, MetLife Holdings is a well seasoned and well diversified legacy block. We continue to focus on our primary objectives to meet customer obligations, look for efficiencies in how we operate and seek opportunities to further optimize the business.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

As we have noted, we have continued to take a third party perspective, which helps us better manage the business internally, while also providing us optionality to appropriately accelerate the release of reserves and capital at the right value with the right strategic partner. This transaction with Talcott Resolution Life Insurance Company covers approximately $10,000,000,000 of current U. S. Retail variable annuity and rider statutory reserves via funds withheld for the general account reserves and modified coinsurance for the separate account liabilities. This risk transfer significantly lowers our exposure to retail variable annuity tail risk by reducing account values by approximately 40%, which in turn would positively reduce our enterprise risk associated with capital markets and its related volatility.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

It is expected to deliver approximately $250,000,000 in statutory value consisting of a ceding commission and release of capital over time. Also, we expect the transaction will result in foregone adjusted earnings in MetLife Holdings of approximately $100,000,000 annually. However, this will be offset by an annual hedge cost savings to the enterprise of roughly $45,000,000 associated with this block of business. In addition, we have secured investment management mandates for MetLife Investment Management to manage roughly $6,000,000,000 of assets with Telcoat, which supports our strategy to expand third party fee income. Turning to Page 10.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

You can see how our VA balances have declined over time, consistent with our strategy. At our twenty twenty four Investor Day in December, we highlighted the left side of the chart showing the 26% drop in VA balances over the five year period from 2019 through 2024. And as shown on the right side of the chart, we expect total VA balances will further decline to $24,500,000,000 as of 03/31/2025, reflecting the reinsurance transaction with Telco. Overall, this represents a more than 50% decline in VA balances since 2019, a positive development for MetLife's risk profile. In addition to lower balances, it is also important to note the remaining product mix, which will include a significant portion of traditional group retirement variable annuities of roughly $9,000,000,000 These include 403b and 457b annuities for retirement plans, which have limited guarantees.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Let me conclude by saying that MetLife delivered a solid quarter, reflecting the strong underlying fundamentals across our portfolio of businesses. While the environment remains uncertain, we remain confident in delivering all weather performance achieved through a position of strength with a strong balance sheet, recurring free cash flow generation and a diversified set of market leading businesses. As we embark on the new frontier, our strategic priorities allow us to accelerate responsible growth and generate attractive returns with lower risk. Our variable annuity reinsurance transaction with Talcott is another proof point of how MetLife has both the tools and commitment to generate long term value for our stakeholders. 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. You. Your first question comes from the line of Jimmy Bhullar with JPMorgan. Please go ahead.

Jimmy Bhullar
Jimmy Bhullar
Equity Research Analyst at JP Morgan

Hey, good morning. I had a question first on your spreads in the, RIS business. If you look at the base yield, it was down, I think around eleven percent eleven basis points sequentially around 13 bps year over year and spreads were down ex VII almost a similar amount. So not sure if that's mix or I know you had interest rate gaps that you might not be benefiting from. But what's driving that?

Jimmy Bhullar
Jimmy Bhullar
Equity Research Analyst at JP Morgan

And should we assume a further decline or stabilization in spreads from these levels?

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Jimmy, it's John. This answer probably requires a little bit of a holistic view of RIS. I'll give you the punch line upfront is we did have a decline sequentially in spreads, a function of rates and curve offsetting that is growth. So let me give Rami a chance to just talk about some, I'd say, growth exceeding expectations and then I'll come back and talk about spreads.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

Hey, Jimmy. Thank you, John. Just to give you a sense of the growth momentum this quarter, you can see it on our balances year over year and sequentially. But we've got a number of notable wins in the quarter. We've got a very strong Q1 for PRTs with $1,800,000,000 of inflows.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

I would note, Jimmy, that all of these transactions were with sponsors were Fortune 500 companies, which is which is really encouraging for us. We talked back in December about the very first UK funded re deal, that we did with a well established UK insurer. We continue to see really good momentum for us in that market. Also in The UK market, we have a very robust pipeline in The UK longevity space and that's coming off the back of the jumbo transaction that we executed in the quarter. And then last but not least is stable value.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

We are a leader in that market and this has been a very strong quarter for us and we capitalized on some of the market disruption. So you put all of these together, we're seeing really strong momentum from an earnings perspective. It's coming from investment spreads, but it's also coming from underwriting and fees over time. And you see that in the 8% growth in the liability balances and for the full year, we expect to be at the upper end of that 3% to 5% balance growth that we guided you back in February. So this is a bit of a growth from a liability balances perspective.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

And maybe John will add it back to you to talk about the spreads.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Yes. And I just thought that maybe just setting that up to start because as you said, we are down a bit sequentially. We did have as you mentioned a seven basis point decline in the core spread. When we were going through this back in February, we did expect a decline. We had the remaining roll off of the interest rate caps.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

We expected that to be a five or six point drag, but had expected to partially offset with that with certain management actions in the quarter. However, we had some rates were different. The path of rates were different. We had lower rates than expected. We had a flatter curve than expected.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

And so it became a bit difficult to reposition the portfolio and leverage some of our tools we had to offset that cap roll off. The second thing we had in the quarter is we had more than expected pay downs in certain structured higher yielding structured securities and loans. And when we redeploying that you're ultimately you were redeploying that at some lower spreads and that was in the early part of the quarter. So those two things impacted our ability to offset some of the cap roll off in the quarter. And but as Rami said, if you take growth is probably exceeding expectations, caps are coming in a little lower, they're likely going to stabilize from here into the second quarter.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

And net net, you are effectively flat relative to earnings expectations. So hopefully that gives a little color as to how to think about the two.

Jimmy Bhullar
Jimmy Bhullar
Equity Research Analyst at JP Morgan

Okay. And then on your CRE portfolio, the main metrics are pretty similar with how they've been recently with the loan to values and coverage ratios and stuff. But and and it seems like things were starting to stabilize. But are you seeing any indications that what with all this uncertainty that the recovery is going to stall? Or what are you seeing in the commercial mortgage loan book?

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Yes. It's a good question. As you said, real estate activity and office leasing, it really was continuing to show signs late in the year and even into Q1. I think our statistics show that office leasing activity in Q1 was the strongest we've seen since like mid-twenty nineteen. Investment activity has been up year over year as well I think roughly 10%.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

So generally there's been some good momentum. But I would say that we'll have to just monitor the kind of where we are in terms of some of the uncertainty that's out there. So it might slow a little momentum. Don't I think our feeling is the sector has found a trough in values generally all else equal. And we saw that in some of our LTVs and our debt service coverage ratio.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

But we I mentioned this maybe last quarter. This year and probably next year, you will resolve a lot of the things that we put up reserves for over the last several years. And so this will be kind of the resolution point, but that tends to happen at the trough. And I think so we still think we're there. Again, it's a bit all else equal.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

But we are feeling and we saw it look if you go back to VII we had a 2% roughly return on the real estate related funds in the quarter. So there are signs of improvement but obviously we'll have to just see how long the uncertainty persists.

Jimmy Bhullar
Jimmy Bhullar
Equity Research Analyst at JP Morgan

Thank you.

Operator

Your next question comes from the line of Tom Gallagher with Evercore ISI. Please go ahead.

Thomas Gallagher
Senior Managing Director at Evercore

Good morning. First question is on the risk transfer deal. I guess on its face, the pricing maybe doesn't look so great in terms of, we'll call it the earnings multiple of what you're giving up. But as we all know, this is kind of a pretty volatile higher tail risk. So I think that should be considered.

Thomas Gallagher
Senior Managing Director at Evercore

But can you talk a bit about the way you approached it valuation wise? I guess you're giving up $50,000,000 roughly of net income. How much cash flow do you end up losing? And then talk a little bit about how you view the tail risk and overall why this deal made economic sense for you? Thanks.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

Sure. So Tom, let me it's Rami here. Let me just maybe give you a sense of how we got to the deal and then we'll tackle some of the specific questions you had. You should definitely look at this in the context of the new frontier strategy that we talked about, in particular in the lower risk pillar of that strategy. We have taken a very disciplined approach here as we looked at potential transactions, especially in the context that we have a well seasoned and well managed book.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

But for us, the goal here is to create value for our shareholders and all our other stakeholders. So the reinsurance partner matters, the structure really matters, but so does the price. And we do look at the price from a number of lenses, including an economic lens when we think about the valuation of the book and we definitely have a view of that, which the price was very much in line with. And we also look at it in terms of the impact, if you will, from a loss of GAAP earnings perspective versus the ceding commission. But you should look at that also in the context of the cost of hedging that we're also now no longer incurring.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

So net net net when you put that together, the value that we received was very much in line with our expectations. And it also removes a lot of the tail risk, which as you know, the capital requirements for this business could be significantly higher should we see a downturn in the equity and the interest rate environment. So all of these things were part of our consideration. Maybe I'll turn it to John to talk about the cash flow pieces of this.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Yeah. I think your question kind of summarized it, Tom. We would think of the cash flow as kind of the net of the two. That's generally the you're kind of you could think of that as almost your change in tack. So it's probably a good proxy for what we're but I think to Rami's point, it's what you're giving up in like a stable environment, right?

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

And so if things were the environment changes that's your economics can change. So equity markets over several years now have been on a upward trajectory. We've had higher interest rates. And it was really an opportunistic way for us to kind of lock in the exit value here and also find a really good partner that we've been able to work with and get to know and feel good about the transaction.

Thomas Gallagher
Senior Managing Director at Evercore

Got you. Thanks. And then just my follow-up. Can you comment on what your underwriting experience was like in MetLife Holdings this quarter between, let's say, the mortality side for life insurance and then also on long term care? Thanks.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

Hey, Tom. It was very much in line this quarter across both the LTC book as well as the retail life book. So nothing to note here in terms of underwriting across MLH.

Thomas Gallagher
Senior Managing Director at Evercore

Thanks, Rami.

Operator

Your next question comes from the line of Ryan Krueger with KBW. Please go ahead.

Ryan Krueger
Managing Director at Keefe, Bruyette & Woods (KBW)

Hey, thanks. Good morning. First question was more high level. Just hoping to get some thoughts on the current environment. To what extent is it influencing changes in how you're managing the company?

Ryan Krueger
Managing Director at Keefe, Bruyette & Woods (KBW)

I guess, for example, are you would you anticipate any changes to capital management strategy or the expense strategy given the uncertainty in this environment? Or do you view things largely as business as usual for now?

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Yes. Hey, good morning, Ryan. Thanks for the question. It's Michel. So clearly, we're not oblivious to the environment in which we operate.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

We sort of I think it's fair to say that the possibility of a recession has risen. Having said that, you know, I think our our strategy, you know, we like to call it all weather because, you know, again, it doesn't assume a rosy picture. It does not assume a deep recession either. So I would say we're very much focused on executing on the pillars of the strategy, so no change whatsoever when it comes to that. I think you can see from sort of our capital management action that again there no change in terms of our approach.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

The CHF 3,000,000,000 authorization, the 4.1% increase in common dividends per share, again sort of evidence in terms of the confidence that our Board and we have in our financial standing. Given the environment, we tend to focus on those levers that we do control. Expenses is one of them. We want to continue to invest in strategic growth initiatives. But at the same time, there are discretionary aspects to expenses that we that I've asked the team make sure that we're managing really, really well given the environment.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

So but beyond that, I would say I don't like to use the term BAU, but I would say we're very much sticking to our strategy and really pleased also with the underlying momentum that we're seeing across our businesses.

Ryan Krueger
Managing Director at Keefe, Bruyette & Woods (KBW)

Thank you. And then in Group Benefits, PFO growth, think ex participating policies was towards the lower end of your target. Can you give a little bit more color on what you're seeing and also how you think that may progress as the year goes along?

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

Thank you, Ryan, and good morning. So if you think about our 2%, reported number here, there are two drivers driving that that kind of headline number. The first and the larger impact, would say, is the favorable mortality we saw from those participating contracts, which John talked about. If you compare our life underwriting ratios year over year, we did see more than a five point drop in mortality this quarter from Q1 of twenty twenty four. Really great outcome from an underwriting perspective, especially in what is a seasonally high mortality quarter.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

As you know, Q1 does tend to be heavier. Now the impact that has on our participating contracts, you get lower death claims which result in lower premiums. So if you exclude that impact, the underlying PFO growth was about 4%. So you're talking about a 200 basis points growth that is masked in our headline number. The other driver for the quarter does relate to our oneone rate actions that we took on our dental block.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

As we discussed a few times over the last six months, we did see a faster than expected acceleration in dental utilization. As part of our underwriting discipline, you know, we are very quick to take actions when we see the market utilization numbers move and one one is is the most significant renewal dates for our Dental business. So these actions did have an impact on our persistency in the Dental block, but we remain disciplined in the market and we did get the rate increases that we required and we walked away from some business that didn't meet our target margins. I would say as you look forward, the Dental rate actions are largely behind us at this point. In fact, we're seeing the earnings benefits starting to come through our Dental earnings.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

And as you think about the full year, both of these effects, the par impact as well as the Dental impact will moderate. So you should expect us for a full year reported basis to be back in line with our guidance of 4% to 7%. And you'd want to add another 100 basis points or so if you want to look at the underlying numbers, which exclude the par contracts. And then the last thing I would say is based on our really strong results this quarter, we're also expecting no change to our full year outlook on earnings for the group business.

Ryan Krueger
Managing Director at Keefe, Bruyette & Woods (KBW)

Great. Thank you.

Operator

Your next question comes from the line of Suneet Kamath with Jefferies. Please go ahead.

Suneet Kamath
Senior Research Analyst at Jefferies & Company Inc

Thanks. Good morning. Just wanted to ask on the buyback. It was obviously very strong in the first quarter. And in April, it was pretty modest.

Suneet Kamath
Senior Research Analyst at Jefferies & Company Inc

And I get your comment about catching up to lack of activity in the fourth quarter. But was there anything in the month of April that was precluding you from maybe leaning in a little bit? I don't know if this VA deal was big enough where you were blacked out, but anything going on with the timing there?

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Suneet. Michel here. No. I think we sort of you know, April was sort of in line with, you know, we did what we set out to do, I would say. So there wasn't, you know, any impact from any, you know, pending announcements or anything like that.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

You know, as I mentioned, you know, in the first quarter, we we leaned in, given the fact that, in the fourth quarter, given some pending announcements there, we were precluded from potentially doing more than we did. But clearly, as I said, you can expect a more measured pace from here. So don't use the €1,400,000,000 in the quarter as a quarterly run rate. And we'll continue to be opportunistic but deliberate as well when it comes to our activity here. What I would also reiterate is that nothing changes in how we think about capital.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Our first priority is funding attractive organic growth. Next, we will look for strategic inorganic opportunities

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

that are

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

risk adjusted hurdle rate clearing and I think Pine Ridge is a good example of that. And then if we have excess capital, we will return it deliberately over time as we've consistently done.

Suneet Kamath
Senior Research Analyst at Jefferies & Company Inc

Okay. That's fine. That makes sense. And then I guess for Rami, obviously the PRT sales in the first quarter were pretty strong. But in markets like this where interest rates are moving around and equity markets are swinging around and maybe the funding status of pension plans are swinging around as well, does that do anything to kind of activity in the market one way or the other?

Suneet Kamath
Senior Research Analyst at Jefferies & Company Inc

Just want to get a sense of how we should think about if this environment persists, what PRT could look like as

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

we move through the year? Thanks.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

Thank you, Suneet. Mean, excessive market volatility does have an impact.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

I would say it's it's more of

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

a timing impact in terms of from a plan sponsor perspective. It's can be a distraction in terms of ensuring how they're kind of thinking about their ALM and in in the context of highly volatile markets. But having said that, if you think about the space that we play in in the PRT space, the jumbo space, these are plan sponsors who've been on a derisking journey for a number of years. And therefore, as part of that derisking journey, they are far more hedged, if you will, from a liability driven perspective both in terms of their interest rate, exposure of the assets versus the liabilities and would be largely out of the kind of risky bucket of assets, equities alternatives well before the point that they're ready to transact. So which that tells you the stability of the segment of PRT plan sponsor of DB plan sponsors who would transact well hedged and you wouldn't expect to see much change in their funding ratios.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

And therefore, we think there may be a temporary impact in terms of a distraction if you will, but we don't see that having a real change in terms of the pipeline of the transactions that will come through.

Suneet Kamath
Senior Research Analyst at Jefferies & Company Inc

That makes sense. Thanks.

Operator

Your next question comes from the line of Wes Carmichael with Autonomous Research. Please go ahead.

Wes Carmichael
Senior Analyst at Autonomous Research

Hey, good morning. First question on variable investment income. I think you have guided for a bit more normal return in 2025 and a pretty decent result in the quarter. But given the market volatility in April and some shelved IPOs in the wake of tariff announcements, are you expecting you can still come in at a more normal level for the year? And if you have any insight into Q2, that would be helpful.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Hey, Wes. Good morning. It's John. Yes. So VII in this quarter, I mean private equity as we mentioned in our opening remarks had a 1.6% return in the quarter.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Just as a side note, we also saw over $600,000,000 of distributions come through so well in excess of actually the earnings we saw in the quarter. Again, I would say a function of our well diversified seasoned portfolio in the private equity funds. We also had real estate funds on average come in and real estate related funds come in around 2%. So lower than kind of the implied run rate from the guidance we gave, but above the fourth quarter which was in line with the range we gave a quarter ago. And to your point around the outlook, look while these investments had tended to lag public equity markets, public equity markets did very well last year.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

We saw obviously there's a number of factors why PE returns were lagged there. But the current environment creates some challenge and then already difficult to project PE, probably a more challenging to predict in the current environment. So one of the things I mentioned in my opening remarks is that in light of this uncertainty, we plan to actually provide some preliminary information in early July on the VII and we should have decent insight. So just again, in light of it, the kind of the I'd say the unusual situation that we have, we'll look to do that as opposed to trying to forecast anything for now. So hopefully that helps.

Wes Carmichael
Senior Analyst at Autonomous Research

Yes, does. Thanks, John. And I guess my second question, I know I've asked a couple of times before, but as we're nearing implementation of the ESR in Japan, I think there were a couple of conversations with the industry and the regulator on some treatment of long duration and FX denominated products. Are you still feeling pretty good about implementation? And any thoughts on how that folds into your expected reinsurance strategy?

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Yes. I think you asked it a few times. We'll probably give you the same answer we've given a few other times, which is still feeling pretty good. We're it's an effective April 1. Probably three things to think about.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

One is operational readiness. We feel like we're in a good position. It wasn't there are things that aren't perfect. But all in all, taking the collective weight of items, certainly one we can manage through and we feel like we've made really good progress with the new framework. Other things to just remind you, we've always kind of priced under an economic framework in the past.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

So moving to this doesn't it really doesn't change how we would operate. We always had a view of economic and kind of the statutory framework. So that was always under our mentality making sure good ALM always matched in terms of rates and currency in terms of our products. And then I think we'll as we look at it now there's certainly nothing that would indicate that it would change our dividend policy or factor as it relates to Japan.

Wes Carmichael
Senior Analyst at Autonomous Research

Great. Thank you.

Operator

Your next question comes from the line of Wilma Burdis with Raymond James. Please go ahead.

Wilma Burdis
Wilma Burdis
Director at Raymond James Financial

Hey, good morning. We just worked on an analysis of portfolio yield and what we found is that NIM provides a very attractive risk adjusted return. Could you just talk about your market how you market NIM and what the organic growth pipeline looks like there? Thanks.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Hi, Wilma. Thanks for that. Well, you can feel free to share that announcement or analysis. We'd like to see it too. But yes, look, think from a philosophy perspective, we certainly feel the same and certainly as it relates to the clients that we look to serve.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

And look I think pipeline continues to be good coming out. It's obviously there's a variety of different factors over the last different few years, but there's been a steady growth in the client segments that we serve. And that's we see that continuing. I think to your point, I think the quality of our products and solutions that we offer, we believe is differentiated and certainly provide what we believe is a great long term value for our clients and our partners. So as of now, I'd say things continue.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

There's a lot of activity out there. There's a lot of opportunities from a business development perspective and we're very optimistic of our five year strategy here. Hopefully that helps.

Wilma Burdis
Wilma Burdis
Director at Raymond James Financial

Great. And could you just talk about the type of assets that you're managing for Telcot? Thank you.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Yeah. We don't get into too much details, but I'll give you generally, there's $6,000,000,000 of assets that we were able to kind of obtain through an investment management mandate. Half of it is a function of some of the assets that are part of this transaction. Another half was actually separate. But as we obviously got to know and built a relationship with Talcott over time and also being able to share some of our capabilities, we're able to kind of work with them and provide additional mandate on top of that.

John McCallion
John McCallion
Executive VP, CFO & Head of Investment Management at MetLife

Mostly I'll just say in some of the public fixed income area, but also some of those were overseas. Maybe that helps.

Wilma Burdis
Wilma Burdis
Director at Raymond James Financial

Thank you.

Operator

Your next question comes from the line of Joel Hurwitz with Dowling. Please go ahead.

Joel Hurwitz
Lead Analyst at Dowling & Partners

Hey, good morning. Can you unpack the non medical health loss experience in the quarter? I get the seasonality, but was surprised to see it up a bit year over year. And I guess how was dental experienced this quarter versus last year period?

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

Sure. It's Rami here. So maybe let me start with the dental piece. So the performance of the dental business in this quarter was right in line with our expectations. Recall that Q1 just tends to be a higher utilization quarter as the benefit resets.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

And then I'll also just point you to what I just mentioned earlier with respect to the disciplined underwriting here in terms of the actions that we've been taking on oneone, and we're certainly pleased with the outcome of those actions. And that will set us up nicely in combination with the heavy Q1 utilization quarter behind us to see a gradual decline for the non medical health ratio. And think of that for the full year being towards the midpoint of our range. The other parts of the ratio disability, disability continues to perform very much in line with our expectations. STD and LTD incidents came in right on the mark.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

We continue to see very strong recoveries in terms of the closures. I would say those are coming in slightly ahead of our expectations in the disability block. And the small headwind we did see in disability relates to delays in the Social Security Administration approvals, which did have somewhat of an impact this quarter, albeit small. So net net, I would say performing in line with our expectations and think of a full year number to be close to the midpoint of our range.

Joel Hurwitz
Lead Analyst at Dowling & Partners

Got it. Very helpful. And then switching gears, other Asia sales were very strong in the quarter. Can you just unpack what you saw there? And then I guess with the increased geopolitical tensions, what are seeing in April thus far?

Lyndon Oliver
Lyndon Oliver
Regional President, Asia at MetLife

Joel, it's Linden here. Yes, so let me give you color on kind of the overall sales in Asia and we'll cover what happens in Japan as well as what's going on in the rest of Asia. We've had a strong start to the year. First quarter sales were up 10% across the region, and we're on track to grow full year sales in line with our outlook of mid to high single digits. So let's start with Japan.

Lyndon Oliver
Lyndon Oliver
Regional President, Asia at MetLife

We've had a good, strong start. We've got strong market share across all our distribution channels including the banker channel. And, while we've seen some decline in the FX products in recent quarters, we are seeing momentum pick up. If you look at the sequential growth in the first quarter, it was strong. Now looking at April, Michel mentioned we've launched a new single premium life product in the bank channel.

Lyndon Oliver
Lyndon Oliver
Regional President, Asia at MetLife

This has been very well received. And we've got other actions planned during the rest of the year, so we expect this momentum to continue. Now going to the rest of Asia, outstanding quarter sales were up 41% from the prior year. And this is driven primarily by China where we saw, the addition of some new bank partners come on board and that really helped, with the sales there. And also in Korea, very strong performance in our face to face channels, both in career agency as well as in the, independent channels.

Lyndon Oliver
Lyndon Oliver
Regional President, Asia at MetLife

So I hope that helps.

Joel Hurwitz
Lead Analyst at Dowling & Partners

Thank you.

Operator

We have time for one more question, and that question comes from Nick Anito with Wells Fargo. Please go ahead.

Nicholas Annitto
Nicholas Annitto
Equity Research Vice President at Wells Fargo

Hey, good morning. Thanks. Just wanted to touch on Group Life and the expectation for the balance of the year given it's been coming in pretty strong. Is it something you have confidence in for like a sustained period? Or is it more touch and go for the outer quarters?

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

Thanks. Thanks for the question. Just maybe to comment on this quarter first. So we did see favorable incidents. And really, you can draw almost a straight line between our results and the CDC population data results for the working age population.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

And that favorability has been manifesting

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

itself for the last kind

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

of couple of quarters and working its way into our ratios. I would say at this point, I can't speculate and I don't want to speculate if the favorability will continue for the rest of the year. It's too early to tell. But what may be useful is just to come back to our outlook guidance ratios. So remember, we guided to be at the midpoint of the lower half of our range.

Ramy Tadros
Ramy Tadros
President of U.S. Business & Head of MetLife Holdings at MetLife

So think of that as kind of an 5.5 number. And that guidance always assumes a heavier Q1 mortality. So with Q1 behind us and Q1 being favorable, just a simple arithmetic here, even if we continue not to see any further favorability, the simple arithmetic would have us towards the lower end of our range for the full year. So think about an 84 number for the full year compared to the guidance that we have given you before.

Nicholas Annitto
Nicholas Annitto
Equity Research Vice President at Wells Fargo

Got it. Thanks. That's really helpful. Then I guess just on Chariot Re, can you guys give any update there? I think you previously said the expectation would be to do an initial back book deal out of Met, but any update there would be helpful.

Nicholas Annitto
Nicholas Annitto
Equity Research Vice President at Wells Fargo

Thanks.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

Yes. Hi, Nick. It's Michel. So really pleased with our progress, and we're excited about the growth opportunities that Chariotree will allow us to capture. We're moving at pace with our co sponsor General Atlantic to fully capitalize and operationalize the company.

Michel Khalaf
Michel Khalaf
President & CEO at MetLife

The intention here, I'll just reiterate, is to create a long term partnership between MetLife and Chariotree. And as we discussed at Investor Day, know, Chariotree will enhance our capital flexibility and efficiency and allow us to generate liability growth beyond our balance sheet capacity if need be. And again, our plans are on sort of on track, I would say, in terms of expecting to launch around midyear.

Operator

And that concludes question and answer session. And I will now turn the conference back over to John Hall for closing remarks.

John Hall
John Hall
SVP & Head, IR at MetLife

Great. Thank you, operator, and thank you, everybody, for joining us. Have a great day.

Operator

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation and you may now disconnect.

Executives
    • John Hall
      John Hall
      SVP & Head, IR
    • Michel Khalaf
      Michel Khalaf
      President & CEO
    • John McCallion
      John McCallion
      Executive VP, CFO & Head of Investment Management
    • Ramy Tadros
      Ramy Tadros
      President of U.S. Business & Head of MetLife Holdings
    • Lyndon Oliver
      Lyndon Oliver
      Regional President, Asia
Analysts
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Key Takeaways

  • MetLife reported Q1 2025 adjusted earnings of $1.3 billion, or $1.96 per share, up 7% year-over-year, with a 14.4% adjusted ROE and a 12% direct expense ratio underscoring its efficiency focus.
  • Group Benefits earnings rose 29% to $367 million driven by lower working-age mortality, while Retirement and Income Solutions saw $1.8 billion of pension risk transfer inflows; Asia earnings fell 12% and Latin America declined 6% (but rose 7% on a constant-currency basis), and EMEA grew 8%.
  • MetLife entered a risk transfer with Talcott Resolution to reinsure about $10 billion of U.S. retail variable annuity reserves, lowering VA tail risk by roughly 40%, unlocking $250 million of statutory value, and saving $45 million annually in hedge costs at a $100 million annual earnings trade-off.
  • The company returned $1.8 billion to shareholders in Q1 via $400 million of dividends and $1.4 billion of share repurchases, secured a new $3 billion buyback authorization (bringing total at-the-ready to $3.4 billion), and ended the quarter with $4.5 billion of holding-company cash above its $3–4 billion target.
  • Under its New Frontier strategy, MetLife is leveraging an all-weather, diversified model, pursuing $1 trillion in MetLife Investment Management AUM (with $100 billion from Pinebridge), maintaining a risk-off investment stance, and prioritizing responsible growth, attractive returns and lower risk.
AI Generated. May Contain Errors.
Earnings Conference Call
MetLife Q1 2025
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