How have recent macroeconomic variables like currency and interest rates affected MetLife's business in Japan, including sales mix and persistency?

Short-term sales impacts are seen during periods of significant FX and rate fluctuations as customers wait for stabilization. However, MetLife's value proposition, broad product portfolio, and distribution strength help meet demand, with sales up 17% in 2025. “But for the most part, our value proposition continues to remain solid with the customers. And given the breadth of our product portfolio and our distribution strength here, it really gives us -- puts us in a good position to meet the demand through these periods, whether it's yen or dollar products.”

Can you provide an update on the U.S. retail retirement space with flow reinsurance and the outlook for this opportunity?

MetLife is participating in the fast-growing U.S. retail annuity market as an institutional reinsurer, leveraging its financial strength and investment capabilities. They now have two partners with flow reinsurance deals in place, which adds to liability origination and capital flexibility. “We now have 2 partners with flow reinsurance deals in place that have kicked off over the past couple of months. We value these partnerships and our partners value what we bring to the table, in particular, in terms of financial strength, investment capability, capital flexibility.”

How is MetLife's Group Benefits outlook incorporating the potential impact of AI on the workforce and current employment trends?

The outlook incorporates observed employment actions, including those potentially AI-driven, continuing into 2026. However, growth from new sales, increased coverages, and participation rates, combined with a diversified book of business, provides comfort in the outlook. “We have certainly incorporated what we have been seeing in our book with respect to employment actions that some of our clients have taken, be they AI-driven or otherwise. And the outlook assumes that this trend would continue in 2026.”

MET

MetLife (MET) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Financials· Feb 5, 2026

Source: earnings call transcript

Executive summary

MetLife Q4 FY25 — Strong Performance and Strategic Execution Drive Growth

MetLife delivered a strong Q4 FY25, exceeding financial commitments and advancing its New Frontier strategy with robust growth across segments and disciplined capital deployment. The company successfully integrated PineBridge Investments, resegmented its reporting to include MetLife Investment Management, and made significant progress on efficiency targets, positioning it for continued growth despite a dynamic market environment.

Highlights

Adjusted EPS, excluding notable items, rose 24% to $2.58 per share in Q4 FY25, marking MetLife's highest single EPS quarter.
Full-year 2025 adjusted EPS grew approximately 10% to $8.89 per share, meeting the double-digit target.
Adjusted return on equity (ROE) for FY25 was 16%, within the 15-17% target range.
Direct expense ratio lowered to 11.7% in FY25, well ahead of the 5-year target of 11.3%.
Generated $4.9 billion in free cash flow in FY25, contributing to the $25 billion 5-year cumulative target.

Concerns

Disability experience in Group Benefits trailed expectations in Q4 FY25 due to higher average severity and incidents, impacting the nonmedical health interest adjusted benefit ratio by slightly over 1 point.
Full-year 2025 variable investment income (VII) of $1.5 billion was below the $1.7 billion target, primarily due to real estate and other funds.
Mexico VAT change is expected to impact Latin America adjusted earnings by approximately $50 million in 2026, mostly in the first half.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS growth	Double-digit high materiality	Near term	High
Adjusted ROE	15% to 17% high materiality	Near term	High
2-year average free cash flow ratio	65% to 75% of adjusted earnings high materiality	Near term	High
Direct expense ratio	12.1% medium materiality	FY26	High
Direct expense ratio	11.3% medium materiality	FY29	High
Variable investment income (VII)	~$1.6 billion pretax medium materiality	FY26	High
Corporate & Other adjusted loss	$500 million and $700 million after tax medium materiality	FY26	High
Effective tax rate	24% to 26% low materiality	FY26	High
Share repurchases	In line with 2025 high materiality	FY26	High
Private equity annual returns	9% low materiality	Near term	High
Real estate and other funds annual returns	7% low materiality	Near term	High
Group Benefits adjusted PFO growth	4% to 7% medium materiality	Near term	High
Group Life mortality ratio target range	83% to 88% medium materiality	FY26	High
Group Non-Medical Health interest adjusted benefit ratio target range	70% to 75% medium materiality	FY26	High
Group Benefits adjusted earnings growth	7% to 9% medium materiality	FY26	High
RIS retained liability exposures growth	3% to 5% medium materiality	FY26	High
RIS adjusted earnings	$1.6 billion and $1.8 billion medium materiality	FY26	High
Total general account investment spread	100 to 120 basis points medium materiality	FY26	High
Asia annual sales growth	Mid- to high single digits on a constant currency basis medium materiality	Near term	High
Asia general account AUM growth	Mid-single digits medium materiality	Near term	High
Asia adjusted earnings growth	Mid-single digits medium materiality	Near term	High
Japan ESR target range	170% to 190% medium materiality	March 2026	High
Latin America adjusted PFOs growth	High single digits medium materiality	Near term	High
Latin America adjusted earnings growth	6% to 8% medium materiality	FY26	High
Latin America adjusted earnings growth	High single-digit growth medium materiality	FY27 and FY28	High
EMEA adjusted PFOs growth	High single digits medium materiality	Near term	High
EMEA adjusted earnings quarterly run rate	$90 million to $100 million medium materiality	FY26	High
EMEA adjusted earnings growth	Mid- to high single digits medium materiality	FY27 and FY28	High
MIM revenues growth	~30% medium materiality	FY26	High
MIM revenues growth	Mid-single digits medium materiality	After FY26	High
MIM adjusted earnings	$240 million to $280 million medium materiality	FY26	High
MIM adjusted earnings growth	15% to 20% per year medium materiality	FY27 and FY28	High
MIM operating margin	~32% medium materiality	FY28	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Group Benefits Adjusted earnings were up 12% YoY in Q4, driven by favorable underwriting in Life and Dental, partially offset by weaker disability experience. Life mortality continues to trend favorably, while disability results were below expectations due to higher average severity and incidents. Adjusted earnings (ex-notable) Q4: $465 millionAdjusted earnings (ex-notable) FY25: $1.7 billionGroup Life mortality ratio Q4: 81.1%Group Life mortality ratio FY25: 83.1%Nonmedical health interest adjusted benefit ratio Q4: 72.2%Adjusted PFOs YoY growth Q4/FY25: 2%Adjusted PFOs YoY growth (ex-participating life) Q4/FY25: 4%	—	—	—	$465 million
Retirement and Income Solutions (RIS) Adjusted earnings increased 18% YoY in Q4, primarily due to higher variable investment income. The segment delivered substantial inflows in 2025, with record sales driven by PRT and U.K. longevity transactions, leveraging strategic reinsurance for capital flexibility. Adjusted earnings (ex-notable) Q4: $454 millionAdjusted earnings (ex-notable) FY25: $1.7 billionInvestment spreads (ex-VII): 99 basis pointsSales FY25: $42 billionPension risk transfer sales FY25: >$14 billionU.K. longevity transactions FY25: $11 billion (including $7 billion in Q4)	—	18%	—	$454 million
Asia Adjusted earnings were essentially flat YoY (up 1% constant currency) in Q4, benefiting from volume growth and favorable expense margins, partially offset by less favorable underwriting margins compared to the prior year. Strong sales growth was seen in Japan and Korea. Adjusted earnings (ex-notable) Q4: $444 millionAdjusted earnings (ex-notable) FY25: $1.6 billionGeneral account assets under management (amortized cost) constant currency growth FY25: 7%Sales constant currency growth Q4/FY25: 18%	—	1% (constant currency)	—	$444 million
Latin America Adjusted earnings increased 13% YoY (4% constant currency) in Q4, driven by volume growth across the region. The segment demonstrated outstanding business momentum, with strong PFO and sales growth, particularly in Mexico and Brazil. Adjusted earnings (ex-notable) Q4: $227 millionAdjusted PFOs YoY growth Q4: 25%Adjusted PFOs constant currency growth Q4: 16%Sales constant currency growth Q4: 26%	—	13% (4% constant currency)	—	$227 million
EMEA Adjusted earnings surged 64% YoY in Q4, driven by robust volume growth and favorable underwriting margins. The segment showed strong momentum across most markets, led by Turkey and the U.K. Adjusted earnings (ex-notable) Q4: $97 millionAdjusted PFOs YoY growth Q4: 21%Adjusted PFOs constant currency growth Q4: 17%Sales constant currency growth Q4: 24%	—	64% (reported and constant currency)	—	$97 million
MetLife Investment Management (MIM) MIM is reported as a stand-alone business segment for the first time, reflecting the critical mass gained from the PineBridge acquisition. The primary driver for the increase in adjusted earnings was the transition to general account market fees. Adjusted earnings Q4 FY25: $60 millionAdjusted earnings Q4 FY24: $16 millionAssets under management (AUM) year-end: $742 billionAUM a year ago: ~$600 billion	—	—	—	$60 million
Corporate & Other The adjusted loss improved in Q4 FY25 compared to the prior year, driven by favorable investment and expense margins, partially offset by less favorable life underwriting margins. This segment now includes MetLife Holdings, the legacy runoff business. Adjusted loss Q4 FY25: $38 millionAdjusted loss Q4 FY24: $72 million	—	—	—	($38 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.

Deals & partnerships

PineBridge Investments Acquisition to accelerate growth in Asset Management and establish MetLife Investment Management as a new business segment.

The acquisition closed, leading to the establishment of MetLife Investment Management as a new business segment, aligning with New Frontier strategic priorities.

Mesirow Investment as part of $1.2 billion in acquisitions and business investments.

Part of the broader investment strategy in 2025.

Chariot Re Seeding a sidecar and executing two strategic reinsurance transactions totaling about $11 billion of liabilities. $11 billion

Two separate deals with Chariot Re were executed, transferring approximately $11 billion of liabilities. Also involved in seeding the sidecar.

PNB MetLife Boosting investment in the India joint venture.

Part of the $1.2 billion in acquisitions and business investments in 2025.

Talcott Risk transfer agreement totaling $10 billion of liabilities. $10 billion

A strategic reinsurance transaction to transfer liabilities.

Undisclosed partners Flow reinsurance deals to tap the U.S. retail retirement space.

Two partners have flow reinsurance deals in place, leveraging MetLife's financial strength, investment capability, and capital flexibility.

Risks & headwinds

Disability experience in Group Benefits Q4 FY25

Slightly over 1 point impact on nonmedical health ratio in Q4 FY25

Mitigation:Management does not extrapolate Q4 results as a trend for 2026, noting full-year recoveries were strong and incidents largely in line with expectations.

Variable investment income (VII) shortfall FY25

$1.5 billion for FY25, below $1.7 billion target

Mitigation:Company is strategically repositioning the portfolio to higher-yielding fixed income securities in 2026 to align with the higher interest rate environment.

Mexico VAT change impact FY26, mostly H1

~$50 million impact on Latin America adjusted earnings

Mitigation:Management expects adjusted earnings in Latin America to return to high single-digit growth in 2027 and 2028 after this impact.

Short-term sales impact from macro volatility in Japan Short-term

Temporary fluctuations in sales

Mitigation:MetLife's diversified product portfolio and strong distribution channels allow it to meet demand through periods of yen or dollar product preference. Value proposition remains solid.

Increased surrender activity in Japan Q4 FY25

Q4 FY25 surrender trend slightly higher than Q3 FY25

Mitigation:Full-year 2025 surrenders were down compared to 2024, and the 2026 outlook assumes surrenders return to long-term assumptions.

Higher expense ratios from asset management business FY26

PineBridge acquisition will add 50 basis points to direct expense ratio in 2026 (target 12.1%)

Mitigation:MetLife intends to maintain its 2029 direct expense ratio target of 11.3% due to considerable progress made in efficiency.

What to watch in Q1 FY26

Group Benefits disability experience

Next quarter

Current Below expectations in Q4 FY25

Target Stabilization or improvement, not extrapolating Q4 trend

Why it matters

Disability experience negatively impacted Q4 results and is a key underwriting metric for the Group Benefits segment.

While this has been an unfavorable quarter, it certainly does not make a trend, and I wouldn't extrapolate from the outcomes in this quarter into 2026.

Find out whether MET delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the observations on renewal season, pricing actions, and competitive landscape in Group Benefits, especially for dental and disability?

MetLife observed robust 1/1 results with increased persistency in dental due to prior pricing actions. Sales growth is good across the book, particularly in disability, and competition is manageable.

“I would say if we look at our 1/1 results, in particular, with respect to persistency and renewals, we're seeing pretty robust results. I would say, increase in persistency, in particular, in dental.”

asked by Jamminder Bhullar · answered by Ramy Tadros

2 min read 6 chapters

Detailed narrative

Strategic Progress on New Frontier Initiatives

MetLife has made significant strides in its New Frontier strategy, launched a year ago. Key achievements include adding approximately $600 million in new adjusted premiums, fees, and other revenues (PFOs) in Group Benefits, originating over $14 billion in pension risk transfer (PRT) sales, and closing the acquisition of PineBridge Investments to establish MetLife Investment Management (MIM) as a new segment.

The company also deployed nearly $4 billion for organic new business and returned approximately $4.4 billion to shareholders in 2025.

Strong Financial Performance and Efficiency Gains

The company reported strong Q4 FY25 adjusted earnings of $2.58 per share (ex-notable items), up 24% YoY, and full-year adjusted EPS growth of 10%, meeting its double-digit target. Adjusted ROE for FY25 was 16%, within the target range. MetLife also achieved a direct expense ratio of 11.7% for the year, ahead of schedule, driven by AI adoption and process reengineering, demonstrating strong operating efficiency.

Reinsurance Strategy and Capital Flexibility

MetLife is strategically leveraging reinsurance to enhance capital flexibility and support liability growth. This includes two deals with Chariot Re totaling about $11 billion of liabilities and a risk transfer agreement with Talcott totaling $10 billion of liabilities. The company has also tapped the U.S. retail retirement space via flow reinsurance, establishing two partnerships to participate in the annuity market as an institutional reinsurer, leveraging its financial strength and investment capabilities.

MetLife Investment Management (MIM) Segment Launch

The introduction of MetLife Investment Management as a stand-alone business segment aligns with New Frontier priorities and reflects the critical mass gained from the PineBridge acquisition. MIM reported $742 billion in assets under management (AUM) at year-end, up from $600 billion a year ago.

The segment is expected to see revenues grow approximately 30% in 2026, driven by PineBridge, with a target operating margin of around 32% by 2028.

Real Estate Depreciation Accounting Change

MetLife revised its definition of adjusted earnings to exclude the noncash accounting of real estate depreciation. This change aims to better align the impact of real estate asset value changes with recurring cash flow and returns. It increased Q4 adjusted earnings by $57 million and is expected to add approximately $200 million annually, primarily benefiting Corporate & Other.

Japan Market Dynamics and Regulatory Transition

Japan's sales saw an 18% constant currency jump in 2025, driven by foreign currency-denominated products. While macroeconomic volatility (FX, rates) can cause short-term sales fluctuations, the company's value proposition and diversified product portfolio remain strong. MetLife is also preparing for the transition from the Solvency Margin Ratio (SMR) to an Economic Solvency Ratio (ESR) in Japan, expecting an initial ESR within a 170-190% range for March 2026, resilient to rate changes.

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