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    MET
    Earnings call· Sep 2025(Q3 FY25)

    METLIFE INC MET

    Nov 6, 2025 Source

    Executive summary

    MetLife Q3 FY25 — Strong Underwriting, Investment Income, and Capital Deployment

    MetLife delivered robust Q3 FY25 results, driven by strong underwriting in Group Benefits, a rebound in variable investment income, and significant capital deployment. The company's New Frontier strategy is gaining traction, evidenced by strong sales growth in Asia and Latin America, and record Pension Risk Transfer activity. Management remains focused on disciplined capital management and expense control, while navigating a competitive yet rational market and addressing specific tax adjustments in Mexico.

    Highlights

    6

    • Adjusted earnings per share (ex-notables) increased 21% year-over-year to $2.34.

    • Variable investment income reached $483 million, exceeding the implied quarterly outlook of $425 million, driven by 3% private equity returns.

    • Adjusted return on equity (ex-notables) was 16.7%, near the top of the 15%-17% target range.

    • Group Benefits saw a 230 basis point sequential improvement in its nonmedical health loss ratio, with disability results returning to normal and dental profitability improving.

    • Asia sales surged 34% on a constant currency basis, led by Japan (up 31%) and other markets (up 39%).

    • Secured a record $12 billion in Pension Risk Transfer (PRT) transactions in Q4 to date, demonstrating strong market trust.

    Concerns

    4

    • An industry-wide tax matter in Mexico resulted in an after-tax charge of $71 million in Q3 FY25, with an anticipated additional charge of $20 million to $25 million in Q4 FY25.

    • The Mexico tax change is estimated to reduce Latin America adjusted earnings by roughly $50 million to $60 million in 2026.

    • Corporate and Other reported an adjusted loss of $288 million, an increase from $249 million in the prior year period, driven by market-related employee costs and higher interest payments.

    • Group life mortality ratio was 83.3%, below the target range of 84%-89% but less favorable than 82.4% in Q3 FY24.

    Guidance & targets

    7
    CategoryTargetConfidence
    Mexico tax matter after-tax charge
    $20 million to $25 million
    medium materiality
    High
    Latin America adjusted earnings reduction
    roughly $50 million to $60 million
    medium materiality
    High
    Nonmedical health ratio
    improve further
    medium materiality
    High
    Direct expense ratio
    below the 12.1%, even well below the 1.1 at year-end
    high materiality
    High
    Asia sales momentum
    continue going into the fourth quarter, and we expect to exceed full year sales guidance for '25
    medium materiality
    High
    Japan Economic Solvency Ratio (ESR)
    170% to 190%
    high materiality
    High
    RIS investment spreads (ex-VII)
    relatively flat
    medium materiality
    Medium

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Group Benefits
    Adjusted earnings increased due to favorable expense margins and volume growth, partially offset by less favorable life underwriting. Nonmedical health ratio improved sequentially due to anticipated dental seasonality and recovery in disability.
    Adjusted Earnings (ex-notables): $457 millionAdjusted Earnings YoY Growth: 6%Nonmedical Health Loss Ratio: 72.5%Nonmedical Health Loss Ratio Sequential Improvement: 230 bpsGroup Life Mortality Ratio (ex-assumption review): 83.3%Adjusted PFOs YoY Growth: 3% (dampened by ~1 ppt from participating life contracts)Sales YTD Growth: 5%
    		———$457 million
    Retirement and Income Solutions (RIS)
    Adjusted earnings increased primarily due to higher variable investment income. Investment spreads improved sequentially. Strong business momentum with growth in structured settlements and U.K. longevity reinsurance sales. Chariot Re launch resulted in a reduction in adjusted earnings in line with guidance.
    Adjusted Earnings (ex-notables): $423 millionAdjusted Earnings YoY Growth: 15%Investment Spreads: 131 bpsInvestment Spreads (ex-VII): 102 bpsAdjusted PFOs (ex-PRTs) YoY Growth: 14%Spread Earning General Account Liabilities YoY Growth: 4%Total Liability Exposures YoY Growth: 3%PRT Transactions (Q4 to date): $12 billion
    		———$423 million
    Asia
    Strong performance driven by higher variable investment income and volume growth, positively impacted by a $30 million after-tax benefit from a model refinement in Japan. Sales surged across the region, led by Japan, Korea, and China.
    Adjusted Earnings (ex-notables): $473 millionAdjusted Earnings YoY Growth (reported): 36%Adjusted Earnings YoY Growth (constant currency): 37%Sales YoY Growth (constant currency): 34%Japan Sales YoY Growth (constant currency): 31%Other Asia Markets Sales YoY Growth (constant currency): 39%General Account Assets Under Management (amortized costs) YoY Growth (constant currency): 6%
    		———$473 million
    Latin America
    Solid top-line growth and resilient earnings, primarily due to volume growth across the region. A favorable Chilean encaje return contributed, though lower than the prior year. Business momentum continued in Mexico, Chile, and Brazil.
    Adjusted Earnings (ex-notables): $222 millionAdjusted Earnings YoY Growth (reported): 2%Adjusted Earnings YoY Growth (constant currency): 2%Adjusted PFOs YoY Growth (reported): 11%Adjusted PFOs YoY Growth (constant currency): 11%Sales YoY Growth (constant currency): 15%Chilean Encaje Return: 6%
    		$1.7 billion11%—$222 million
    EMEA
    Broad-based volume growth drove double-digit adjusted earnings increase, reflecting strength across most markets led by Turkey, Gulf, and the U.K.
    Adjusted Earnings (ex-notables): $89 millionAdjusted Earnings YoY Growth (reported): 19%Adjusted Earnings YoY Growth (constant currency): 17%Adjusted PFOs YoY Growth (reported): 11%Adjusted PFOs YoY Growth (constant currency): 9%Sales YoY Growth (constant currency): 24%
    		———$89 million
    MetLife Holdings
    Adjusted earnings increased primarily due to higher variable investment income. This segment will be consolidated into Corporate and Other starting Q4 FY25.
    Adjusted Earnings: $190 millionAdjusted Earnings YoY Growth: 12%
    		———$190 million
    Corporate and Other
    The increased loss was primarily driven by market-related employee costs and higher interest payments on outstanding debt. This segment will include MetLife Holdings starting Q4 FY25.
    Adjusted Loss: $288 millionAdjusted Loss YoY Change: increased from $249 million
    		———loss of $288 million

    Operational metrics

    18
    Adjusted Earnings (ex-notables)
    $1.6 billionup 15% YoY
    Q3 FY25

    Primarily driven by higher variable investment income and strong volume growth, partially offset by less favorable underwriting and lower recurring interest margins.

    Adjusted EPS (ex-notables)
    $2.34up 21% YoY
    Q3 FY25

    Growth supported by disciplined capital management.

    Variable Investment Income (VII)
    $483 millionabove implied quarterly outlook of $425 million
    Q3 FY25

    Outperformance driven by higher private equity returns. PE and real estate funds reported on a 1-quarter lag and accounted for on a mark-to-market basis.

    Adjusted Return on Equity (ex-notables)
    16.7%
    Q3 FY25

    A level more on par with the company's earnings power and near the top of its target.

    Direct Expense Ratio
    11.6%improved from 11.7% in Q3 FY24, notably below full year target of 12.1%
    Q3 FY25

    Well ahead of schedule relative to New Frontier commitment, with AI and other emerging technologies accelerating productivity and efficiency gains.

    Nonmedical Health Loss Ratio Sequential Improvement
    230 bpsfrom Q2 FY25
    Q3 FY25

    Providing further confidence in achieving a combined 400 basis points of improvement across the third and fourth quarters.

    Pension Risk Transfer (PRT) Transactions Secured
    $12 billionrecord quarter
    Q4 FY25 to date

    Demonstrates market trust in MetLife; long-term outlook for PRT business is positive.

    Sales Growth
    34%YoY
    Q3 FY25

    Driven by competitive product portfolio and multipronged distribution in Japan, and strong performance in Korea and China.

    Accelerator Platform Annualized Premiums
    $340 million
    since launch

    Innovative digital platform for embedded insurance, attracting new strategic partners like MercadoLibre in Mexico and Brazil.

    Capital Deployed for New Business (VNB)
    $3.4 billionhighest order use of capital
    2024

    Underscores commitment to investing in opportunities that deliver responsible growth and attractive returns.

    Capital Returned to Shareholders
    $875 million
    Q3 FY25

    Part of a track record of returning almost $24 billion over the past 5 years.

    Share Repurchases
    $2.6 billion
    YTD

    Total year-to-date share buyback including October.

    Holding Company Cash and Liquid Assets
    $4.9 billionabove target cash buffer of $3 billion to $4 billion
    Sep 30, 2025

    Maintains robust liquidity well above internal targets.

    US Statutory Adjusted Capital (NAIC)
    $17.1 billionessentially unchanged from prior quarter
    Sep 30, 2025

    Preliminary statutory operating earnings for the first 9 months of 2025 were approximately $2.1 billion.

    Japan Solvency Margin Ratio
    740%
    Sep 30, 2025

    Pending final statutory filings.

    Cash Dividends from Japan
    >$4 billion
    past 5 years

    Reflects capital management efficiency.

    MetLife Investment Management (MIM) Total AUM
    >$630 billion
    current

    Strong second half flows after a muted first half due to market volatility and PineBridge announcement.

    Private Credit Book Investment Grade %
    95%
    current

    Vast majority of corporate bonds are investment grade; below investment grade exposure is 'up in quality'.

    Industry KPIs

    5
    MetricValueDetails
    Capital returns$875 millionUSD
    ROE operating ROE16.7%%
    Life specific when present$2.6 billionUSD
    Net premiums written earned$1.7 billionUSD
    Statutory regulatory capital740%%

    Product announcements

    3
    ProductTypeDetails
    Single Premium FX Life productlaunch
    Yen Variable Life productlaunch
    Single Premium FX Annuity productupdate

    Deals & partnerships

    4
    Chariot ReStrategic partnership to expand MetLife's retirement liability origination capacity in a capital-efficient manner and generate institutional assets for MetLife Investment Management.roughly $10 billion

    Officially launched in Q3 FY25 with an initial reinsurance transaction of roughly $10 billion of RIS liabilities transferred. Helps complement MetLife's own capital with third-party capital.

    MercadoLibreNew partner on the Accelerator digital platform for embedded insurance in Mexico and Brazil.

    MercadoLibre added as a partner, expanding the reach of the Accelerator platform in Latin America.

    PineBridgeAcquisition of PineBridge.

    One of two strategic transactions on track to close in Q4 FY25.

    Talcott Resolution LifeSale of a legacy block of variable annuities.

    One of two strategic transactions on track to close in Q4 FY25.

    Risks & headwinds

    4
    Industry-wide tax matter in Mexico regarding VAT deduction of certain health insurance claims expenses.Q3 FY25, Q4 FY25, FY26

    After-tax charge of $71 million in Q3 FY25, anticipated additional $20 million to $25 million in Q4 FY25. Estimated reduction in Latin America adjusted earnings of roughly $50 million to $60 million in 2026.

    Mitigation: Working to adjust underlying rate assumptions for annually renewable products and other management actions. Expect market to be resilient and rational, with little to no impact in 2027 and beyond.

    Increased market-related employee costs and higher interest payments on outstanding debt.Q3 FY25

    Contributed to Corporate and Other adjusted loss of $288 million in Q3 FY25, up from $249 million in prior year.

    Credit spreads are historically tight and in some ways, priced for perfection.current

    null

    Mitigation: Maintain an up in quality bias across the portfolio, supported by active surveillance and disciplined underwriting. Diversified high-quality portfolio and active risk management.

    Large amount of PRT mandates won during the quarter can cause a temporary quarter headwind as assets are repositioned.Q4 FY25

    Could be a couple of basis points impact on RIS base spread.

    Mitigation: Expected to be temporary, with overall RIS base spread remaining relatively flat.

    What to watch in Q4 FY25

    5

    Mexico Tax Law Impact on LatAm Earnings

    Q4 FY25 and FY26
    CurrentQ3 FY25 adjusted earnings up 2% YoY to $222 million
    TargetConfirmation of $20M-$25M additional charge in Q4 FY25; clarity on $50M-$60M reduction in FY26

    Why it matters

    This tax law change has a quantified negative impact on Latin America earnings, and its mitigation and long-term resolution are key to regional profitability.

    We anticipate an additional after-tax charge of $20 million to $25 million in 4Q. And for 2026, we estimate a reduction in Latin America adjusted earnings of roughly $50 million to $60 million as we recalibrate our underlying rate assumptions in Mexico with little to no impact in 2027 and beyond.

    Q&A highlights

    6

    What drove the 34% constant currency sales growth in Asia, particularly Japan, and can this momentum continue?

    Lyndon Oliver attributed the growth to new product launches (single premium FX Life, yen variable life) and product enhancements in Japan, combined with distribution strength. Other Asia markets saw strong performance in Korea (US dollar product sales, variable life) and China (new bank partners, existing penetration). Expects momentum to continue into Q4 and exceed full-year sales guidance.

    “We've seen a 34% increase in the overall Asia market. So let me give you some more color here. Let's start with Japan. Sales were up 31% year-over-year. We've launched a couple of new products. We've got a new single premium FX Life product that we launched in April. And this product continues to do very well.”

    asked by Ryan Krueger · answered by Lyndon Oliver

    2 min read6 chapters

    Detailed Narrative

    01

    New Frontier Strategy Impact

    The New Frontier strategy is driving strong results, particularly through the Accelerator digital platform in Latin America, which has attracted over 20 partners and generated over $340 million in annualized premiums. This strategy also underpins the efficient capital structure supporting stellar sales growth in Japan and the expansion of the global retirement liability origination platform. The company is also reorganizing its reporting structure to align with this strategy, with MIM becoming a standalone segment and MetLife Holdings consolidating into Corporate and Other.

    02

    Investment Performance and Capital Management

    Strong investment margins, led by $483 million in variable investment income (PE returns of 3%), significantly contributed to adjusted earnings. The company maintains a disciplined approach to capital, deploying $3.4 billion in 2024 for new business with a 19% IRR and 5-year payback, while returning $875 million to shareholders in Q3 through dividends and buybacks. Holding company cash and liquid assets stood at $4.9 billion, exceeding the target buffer.

    03

    Underwriting Discipline and Expense Control

    Group Benefits demonstrated solid underwriting with a 230 basis point sequential improvement in the nonmedical health loss ratio, driven by normal disability experience and seasonal dental profitability. The direct expense ratio of 11.6% is well ahead of schedule, benefiting from AI and emerging technologies accelerating productivity and efficiency gains. Management expects the full-year direct expense ratio to be well below the 12.1% target.

    04

    Strategic Transactions and Reorganization

    MetLife is on track to close two strategic transactions in Q4: the acquisition of PineBridge and the sale of a legacy variable annuity block to Talcott Resolution Life. These transactions are expected to further optimize the company's portfolio. Additionally, starting Q4, MetLife Investment Management (MIM) will be reported as its own business segment, and MetLife Holdings will be consolidated into Corporate and Other, aligning with the New Frontier strategy.

    05

    Credit Market Outlook and Portfolio Quality

    While the credit environment is stable, MetLife acknowledges tight spreads and maintains an 'up in quality' bias across its diversified, high-quality investment portfolio. Active surveillance and disciplined underwriting, leveraging decades of experience through credit cycles, position the company to navigate various economic outcomes. The private credit book is 95% investment grade, with internal underwriting processes.

    06

    Pension Risk Transfer (PRT) Market Momentum

    The PRT business is experiencing strong momentum, with $12 billion in new mandates secured in Q4 to date, making it a record quarter. A recent survey indicates 94% of plan sponsors planning to derisk expect to fully divest in the next five years, signaling a positive long-term outlook for the business. MetLife leverages its balance sheet, investment capabilities, and third-party capital (Chariot Re) to win jumbo deals.

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