Skip to content
    MET
    Earnings call· Mar 2026(Q1 FY26)

    METLIFE Q1 FY26 earnings call MET

    May 7, 2026 Source

    Executive summary

    MetLife, Inc. Q1 FY26 — Adjusted EPS up 23%, ROE at 17%

    MetLife delivered a strong Q1 FY26, showcasing the earnings power of its diversified businesses and disciplined capital management. The New Frontier strategy is driving execution across market-leading segments, with broad-based growth and robust profitability. Management expresses confidence in the full-year outlook, emphasizing capital flexibility and attractive risk-adjusted returns.

    Highlights

    5

    • Adjusted EPS increased 23% year-over-year to $2.42.

    • Adjusted earnings grew 18% (15% constant currency) to $1.6 billion.

    • Adjusted return on equity (ROE) reached 17%, at the top end of the 15%-17% target range.

    • The direct expense ratio improved to 11.9%, ahead of the 12.1% full-year target.

    • Total sales in Asia were up 22% on a constant currency basis, with Japan up 26% and Korea up 44%.

    Concerns

    4

    • Institutional client assets under management decreased 1.9% sequentially, primarily due to market depreciation and modest net third-party outflows.

    • Latin America adjusted earnings were down 9% on a constant currency basis, reflecting the Mexico VAT change and less favorable taxes.

    • The nonmedical health interest adjusted benefit ratio was 75.8%, above the 70%-75% annual target range, due to seasonally higher dental utilization and increased disability claims from new paid family leave programs.

    • Core RIS spread ex VII was 95 bps, down 4 bps sequentially, impacted by the rotation of large Q4 inflows and a persistently flat yield curve.

    Guidance & targets

    7
    CategoryTargetConfidence
    RIS adjusted earnings
    $1.6 billion to $1.8 billion
    medium materiality
    High
    Effective tax rate on adjusted earnings
    24% to 26%
    medium materiality
    High
    Direct expense ratio
    12.1%
    medium materiality
    High
    Japan Economic Solvency Ratio (ESR)
    170% to 190%
    medium materiality
    High
    RIS Total Investment Spread
    100 to 120 basis points
    medium materiality
    High
    RIS Core Spreads (ex VII)
    close to Q1 levels, maybe slightly above
    medium materiality
    Medium
    EMEA Adjusted Earnings Quarterly Run Rate
    middle to upper end of $90 million to $100 million
    low materiality
    Medium

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Group Benefits
    Strong earnings driven by favorable life underwriting and volume growth. Life mortality was exceptional, below target range. Nonmedical health ratio was above target due to seasonally higher dental utilization and higher disability claims from new paid family leave programs.
    Adjusted earnings growth: 19% YoYLife mortality ratio: 80.1%Nonmedical health interest adjusted benefit ratio: 75.8%Total sales growth: 15%Adjusted PFOs (ex-participating contracts) growth: 4%National accounts persistency: high 90sAverage customer tenure: >20 years
    		———$439 million
    Retirement & Income Solutions (RIS)
    Earnings lifted by strong variable investment income and favorable underwriting. Mortality was lower, but underwriting margins remained elevated due to a large structured settlement contract reserve release. Core spread declined sequentially due to Q4 inflows rotation and flat yield curve.
    Adjusted earnings growth: 11% YoYTotal investment spread: 119 bpsCore spread ex VII: 95 bpsAdjusted PFOs (ex-PRTs) growth: 58%New sales (U.K.-funded reinsurance and retail annuity reinsurance): $1.5 billion
    		———$451 million
    Asia
    Outstanding quarter driven by higher variable investment income and strong volume growth. Japan sales benefited from distribution strength and new product launches (yen variable, USD single premium, new A&H product up 77%). Korea sales driven by USD products and strong macroeconomic environment.
    Adjusted earnings growth: 31% YoYSales growth (constant currency): 22%Japan sales growth (constant currency): 26%Korea sales growth (constant currency): 44%General account assets under management (amortized costs, constant currency) growth: 7%
    		———$487 million
    Latin America
    Earnings increase despite impact of Mexico tax change. Constant currency earnings were down due to Mexico VAT change and less favorable taxes. Strong underlying momentum led by employee benefits in Mexico, retirement annuity demand in Chile, and Accelerator expansion in Brazil.
    Adjusted earnings growth: 5% YoYAdjusted earnings growth (constant currency): -9%Sales growth (constant currency): 20%Adjusted PFOs (constant currency) growth: 11%
    		———$229 million
    EMEA
    Strong earnings driven by robust volume growth. Strategic focus on capital-light accident and health and life products is delivering results, translating strong sales into consistent earnings power.
    Adjusted earnings growth: 33% YoYAdjusted earnings growth (constant currency): 28%Adjusted PFOs (constant currency) growth: 15%Sales growth (constant currency): 17%
    		———$110 million
    MetLife Investment Management (MIM)
    First fully integrated quarter post PineBridge acquisition. Earnings driven by business growth and favorable expense margins. Institutional client AUM decreased due to market depreciation and modest net third-party outflows, though outflows stabilized later in Q1 and April.
    Adjusted earnings growth: 68% YoYInstitutional client assets under management (sequential decrease): 1.9%Institutional client outflows: ~$2 billion
    		———$47 million
    Corporate and Other
    Adjusted loss compared to -$129 million a year ago, driven by foregone earnings from prior strategic reinsurance, lower recurring interest margins, and less favorable expense margins, partially offset by higher variable investment income.
    		———-$177 million

    Operational metrics

    22
    Adjusted earnings
    $1.6 billion18% YoY
    Q1 FY26

    Total adjusted earnings for the quarter.

    Adjusted EPS
    $2.4223% YoY
    Q1 FY26

    Adjusted earnings per share.

    Adjusted premiums, fees and other revenues (ex-PRT)
    10%YoY
    Q1 FY26

    Growth in adjusted premiums, fees and other revenues, excluding pension risk transfers.

    Variable investment income (pretax)
    $518 million
    Q1 FY26

    Pretax variable investment income, driven by private equity and real estate/other funds returns.

    Direct expense ratio
    11.9%vs 12.0% in Q1 FY25
    Q1 FY26

    Expense ratio, which absorbed the impact of the PineBridge acquisition while still improving.

    Cash at holding companies
    $3.9 billion
    March 31, 2026

    Cash and liquid assets at the holding companies, at the top end of the $3 billion to $4 billion target buffer.

    Share repurchases
    $750 million
    Q1 FY26

    Amount of MetLife common shares repurchased in the first quarter.

    Common dividends paid
    $370 million
    Q1 FY26

    Common dividends paid in the first quarter.

    Total capital returned to shareholders
    $1.1 billion
    Q1 FY26

    Total capital returned to shareholders, combining share repurchases and common dividends.

    Share repurchases (April)
    $200 million
    April 2026

    Additional net common shares repurchased in April.

    Remaining share repurchase authorization
    $1.1 billion
    as of April 2026

    Remaining amount on the existing share repurchase authorization.

    Subordinated debt issued
    $1 billion
    Q1 FY26

    Opportunistically issued subordinated debt to support the balance sheet and provide growth capital.

    US statutory operating earnings
    $610 million
    Q1 FY26

    Preliminary U.S. statutory operating earnings.

    US statutory net income
    $170 million
    Q1 FY26

    Preliminary U.S. statutory net income.

    Estimated US statutory adjusted capital (NAIC basis)
    $16.2 billiondown 5% from year-end '25
    March 31, 2026

    Estimated U.S. statutory adjusted capital, primarily due to seasonally higher U.S. entity dividends paid in Q1.

    Effective tax rate on adjusted earnings
    24%
    Q1 FY26

    Effective tax rate on adjusted earnings, at the bottom end of the 2026 guidance range.

    Private fixed income portfolio
    $85 billion
    March 31, 2026

    Value of the private fixed income portfolio, which is high quality and diversified.

    Software direct exposure
    $2.5 billion
    March 31, 2026

    Direct exposure to software and software-related investments.

    Software indirect exposure
    $6.3 billion
    March 31, 2026

    Indirect exposure to software and software-related investments.

    Private equity software exposure
    $1.3 billion
    March 31, 2026

    Exposure within private equity to software investments.

    Venture capital exposure
    $3.5 billion
    March 31, 2026

    Venture capital exposure, mostly skewed towards AI firms, which contributed positively to returns.

    Investment in technology ecosystem
    $3.2 billion
    Past 5 years

    Total investment to simplify and modernize the technology ecosystem over the past five years.

    Industry KPIs

    7
    MetricValueDetails
    Capital returns$1.1 billionUSD
    ROE operating ROE17%%
    Net investment income$518 millionUSD
    Retention persistencyhigh 90s%
    Life specific when present$1.5 billionUSD
    Statutory regulatory capital379%%
    Prior year reserve development2 points

    Product announcements

    1
    ProductTypeDetails
    New Corporate Accident and Health Productlaunch

    Deals & partnerships

    1
    New regional parentdivestiture

    MetLife made the difficult decision to divest its market-leading business in Ukraine, positioning it for continued growth with its new regional parent.

    Risks & headwinds

    9
    Mexico VAT change and less favorable taxesQ1 FY26

    Latin America adjusted earnings down 9% on a constant currency basis.

    Seasonally higher dental utilizationQ1 FY26

    Nonmedical health interest adjusted benefit ratio of 75.8%, above 70%-75% target.

    Mitigation: Expected to moderate in the second half of the year, consistent with historical trends.

    Higher disability claims from new state-mandated paid family leave programsQ1 FY26

    Impacted nonmedical health interest adjusted benefit ratio of 75.8%.

    Mitigation: Expected to moderate in the second half of the year as claim patterns normalize; repricing actions will be considered as needed with more credible experience.

    Elevated severity in long-term disability (LTD)Q1 FY26

    Slightly elevated severity in LTD, contributing to nonmedical health interest adjusted benefit ratio of 75.8%.

    Mitigation: No evidence of a trend, flat sequentially over last three quarters; consistent with quarterly fluctuations.

    Flat yield curveOngoing

    Contributed to RIS core spread ex VII being 95 bps, down 4 bps sequentially.

    Mitigation: Expect modest improvement in Q2, total spreads tracking to full-year range.

    Institutional client outflows at MIMQ1 FY26

    Institutional client outflows approximately $2 billion; institutional client AUM decreased 1.9% sequentially.

    Mitigation: Outflows stabilized in latter part of Q1 and April; strong pipeline ahead.

    Foregone earnings from prior year strategic reinsurance transactionsQ1 FY26

    Contributed to Corporate and Other adjusted loss of $177 million (vs $129 million a year ago).

    Lower recurring interest marginsQ1 FY26

    Contributed to Corporate and Other adjusted loss of $177 million.

    Less favorable expense margins (Corporate and Other)Q1 FY26

    Contributed to Corporate and Other adjusted loss of $177 million.

    Q&A highlights

    8

    Inquiring about the drivers of improving working-age mortality and its sustainability, given the favorable trends.

    Ramy Tadros explained that favorable prior quarter development and severity contributed to the strong Q1. Potential drivers for favorable working-age mortality include a pull-forward effect from COVID and GLP-1 drugs. He noted that while the market is competitive, MetLife differentiates beyond price, bundling life insurance with other coverages. If favorability persists, it would gradually flow into pricing over years, not quarters.

    “If the favorability that we see does persist and does become credible on these RIS, we would expect some portion of it to flow back into pricing, but that would happen gradually over time. So think of that happening in years, not quarters, if you think about our underwriting ratio.”

    asked by Suneet Kamath · answered by Ramy Tadros

    2 min read6 chapters

    Detailed Narrative

    01

    New Frontier Strategy Acceleration

    MetLife is in Year 2 of its New Frontier strategy, focusing on acceleration and execution across its market-leading businesses. The strategy aims to establish MetLife as a high-quality compounder, leveraging diversified businesses, disciplined capital allocation, and balance sheet strength. The Q1 performance provides early evidence of progress towards ambitious financial commitments, demonstrating urgency and discipline.

    02

    AI and Technology Investment

    Over the past five years, MetLife has invested over $3.2 billion to modernize its technology ecosystem, delivering tangible benefits for customers, associates, and operations. AI adoption is improving decision-making, enhancing customer service, and reducing enterprise friction, contributing to a steady improvement in the direct expense ratio. Governance and risk oversight are paramount in AI deployment, ensuring responsible use.

    03

    Investment Portfolio Management

    The company opportunistically divested approximately $750 million of private equity assets at a modest discount at the end of Q1, leveraging improved private equity secondary markets. This approach supports investment allocation management and growth in the third-party asset management business, with MetLife Investment Management continuing to manage the assets. This prudent strategy helps manage the overall investment portfolio.

    04

    Private Fixed Income and Software Exposure

    MetLife's $85 billion private fixed income portfolio is high-quality, with approximately 95% investment grade, diversified, and built for market cycles, with limited exposure to business development companies (BDCs) or middle-market loans. Its software exposure, totaling $2.5 billion direct and $6.3 billion indirect, is intentional, well-controlled, predominantly investment grade, and diversified, with venture capital skewed towards AI firms contributing positively to returns, including a 6.8% return from venture capital this quarter.

    05

    Capital Management and Liquidity

    MetLife maintains a strong capital position, closing the quarter with $3.9 billion cash at holding companies, at the top end of its $3 billion to $4 billion target buffer. The company returned $1.1 billion to shareholders in Q1, including $750 million in share repurchases and $370 million in common dividends, with an additional $200 million repurchased in April. The Board also announced a 4.4% increase in the common dividend per share, signaling financial strength.

    06

    Japan Regulatory Issue

    MetLife, along with several other companies in the industry, has been impacted by a regulatory issue concerning seconded employees in Japan. The company has conducted a comprehensive review, discontinued the practice, and is working with regulators to resolve the matter. Management stated that the issue is industry-wide and has not impacted MetLife's business results or sales in Japan, emphasizing it's a change in industry practice.

    AI-generated summary of the company’s earnings call. Not investment advice.