Seeking an update on the industry-wide issue regarding seconded employees and any other regulatory reviews in Japan.

Lyndon Oliver stated that MetLife takes the matter seriously, has conducted a comprehensive review, discontinued the practice of seconded employees, and is working with regulators. John McCallion added that it's an industry issue, and they haven't seen any impact on their business or sales in Japan, viewing it as a change in industry practice rather than a specific company issue. “It's an industry issue, we're not seeing any impact on our business and results and sales, as you saw in the quarter.”

Asking for more color on the positive dynamics driving strong sales in Japan and Asia and the outlook for the rest of the year.

Lyndon Oliver attributed Japan's 26% sales growth to distribution strength and successful product launches (yen variable, USD single premium, new A&H product up 77%). Korea's 44% sales growth was driven by USD sales leveraging Japan's experience and a strong macroeconomic environment. He expects some moderation in year-over-year growth rates due to strong prior-year comparatives but anticipates continued momentum. “Sales in Japan were up 26% year-over-year, and that's really driven by distribution strength across all of our channels. We've also benefited from very successful product launches in the quarter.”

Inquiring about the outlook for RIS core yield or spread, given the sequential decline and recent new business inflows.

John McCallion explained that the 4 bps sequential decline in core spreads (ex VII) to 95 bps was in line with expectations, primarily due to rotating large Q4 inflows from PRT mandates. He expects core spreads to remain close to Q1 levels, possibly slightly above, in Q2, with total spreads tracking to the full-year range, noting the headwind from a persistently flat yield curve. “I think taken all together, our expectation for Q2 is that core spreads will remain close to where we are in Q1, maybe slightly above, modest improvement in Q2.”

MET

MetLife (MET) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 7, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
RIS adjusted earnings	$1.6 billion to $1.8 billion medium materiality	Full year · FY26	High
Effective tax rate on adjusted earnings	24% to 26% medium materiality	Full year · FY26	High
Direct expense ratio	12.1% medium materiality	Full year · FY26	High
Japan Economic Solvency Ratio (ESR)	170% to 190% medium materiality	Fiscal year ending March 2026 · FY26	High
RIS Total Investment Spread	100 to 120 basis points medium materiality	Full year · FY26	High
RIS Core Spreads (ex VII)	close to Q1 levels, maybe slightly above medium materiality	Q2 · FY26	Medium
EMEA Adjusted Earnings Quarterly Run Rate	middle to upper end of $90 million to $100 million low materiality	Going forward · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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

MET operating KPIs by quarter

MET operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Sep 2025 Q3 FY25	Jun 2026 Q2 FY26	Change vs prior quarter
Assets under management (AUM)	$630B+ I think we're just above on total assets under management of just over $630 billion of AUM, above $200 billion on third-party assets. Source: earnings call transcript	~$748B Other revenues increased 34% and total assets under management reached approximately $748 billion. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
New Corporate Accident and Health Product	launch	Q1 FY26

Deals & partnerships

New regional parent divestiture

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

Mexico VAT change and less favorable taxes Q1 FY26

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

Seasonally higher dental utilization Q1 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 programs Q1 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 curve Ongoing

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 MIM Q1 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 transactions Q1 FY26

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

Lower recurring interest margins Q1 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

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.