MetLife (MET) Q2 FY26 earnings call: guidance and Q&A

What areas of the company would be potential targets for inorganic additions, given the mention of M&A in prepared remarks?

MetLife's M&A philosophy remains unchanged, focusing on strategic capabilities. Likely areas for consideration are asset management (adjacencies/complementary capabilities) and group benefits (new capabilities/solutions, though no current product gaps). The company maintains a high bar for M&A, comparing it to other capital uses.

“The more likely area I would say is asset management, and you saw us do the PineBridge Investments deal late last year. And again, here, I would sort of emphasize that we'd be looking at adjacencies or a complementary capabilities as opposed to anything transformational.”

asked by Ryan Krueger · answered by Michel Khalaf

If favorable group life mortality continues, would MetLife pass this favorability to customers through pricing actions, or maintain current pricing?

Group Life mortality favorability in Q2 (2 points from prior period development and lower claim severity) is expected to normalize in H2. If favorability were to continue long-term, margins would gradually normalize over several years due to the 3-5 year renewal cycle of the business, rather than immediate pricing changes.

“But I would emphasize the gradual nature of this. This is a business that has a renewal cycle between 3 to 5 years in our life book. So any normalization would unfold over a number of years here versus a quarter or a '27 type impact.”

asked by Ryan Krueger · answered by Ramy Tadros

Beyond Group Life, how is mortality experience playing out in other blocks like individual life (Corporate & Other) and PRT (RIS), especially for older populations?

Mortality improvements in the retiree/older population (RIS) are in line with expectations and reserves, leading to underwriting results as expected. Overall, mortality is returning to pre-COVID trend lines, but improvements are faster in the working-age population compared to those over 65.

“I would note that if you look at the overall population data, the improvements in the working age populations have been a lot faster than the improvements in the above 65 population.”

asked by Pablo Singzon · answered by Ramy Tadros

Are MetLife seeing caution in the PRT market similar to peers, and what factors are holding back growth or needed for improvement?

The jumbo PRT market is inherently lumpy; H1 FY26 was lighter, but a stronger pipeline is expected for Q3 and Q4. MetLife remains disciplined on pricing. The macro picture is positive with $3 trillion in defined benefit assets. MetLife is also diversifying, having written over $1 billion in UK funded reinsurance year-to-date. RIS expects to meet its 3-5% retained balance growth target for the full year.

“The first half of the year has been lighter, particularly from the jumbo space, but we are seeing a stronger pipeline in the second half of the year. And so we see more opportunities emerging for Q3 and Q4.”

asked by Suneet Kamath · answered by Ramy Tadros

Given market volatility in Japan (yen, rates), what differentiates MetLife's model for steady sales growth, and does this turmoil create opportunities?

MetLife's strong sales performance across Asia, including Japan, is driven by its scale, diversified distribution, product innovation (both USD and local currency products), and execution excellence. While yen volatility can cause customers to hold off, sales momentum continued through June and July. The combination of these drivers positions MetLife well.

“We've got product innovation. You have strong product development, both in U.S. dollars as well as local currency products in U.S. dollar, we are the first to market in those. And we really have strong execution excellence across all the markets.”

asked by Suneet Kamath · answered by Lyndon Oliver

What is MetLife's latest thinking on private equity, given recent trimming of positions?

MetLife is on a multi-year journey to modestly reduce its private equity allocation, driven by the higher rate environment. While still investing, distributions from the seasoned portfolio are expected to outpace contributions. The company was opportunistic in Q1 with a sale that also allowed for continued third-party fund management.

“So I think all in all, the direction of travel is a modest decline over time on PE, but that doesn't mean we're going to continue to invest in the space.”

asked by Wilma Jackson Burdis · answered by John McCallion

With base spread expanding 5 bps sequentially and higher rates, how are base spreads expected to trend in H2?

RIS core spreads (ex-VII) were 100 bps, at the top end of the 95-100 bps range. While Q2 benefited from improved real estate equity income (expected to seasonally reverse in Q3), management still expects core spreads to remain in the 95-100 bps range. The business is positioned well regardless of the rate curve's movement.

“When we think about looking ahead, we still think the 95% to 100% is a good baseline. So if we had to kind of pick a point for the third quarter to be more like the midpoint of the range at this point, just because of the seasonality of some of the real estate returns in 3Q.”

asked by Wesley Carmichael · answered by John McCallion