MET - Earnings call transcript Q4 2017

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Operator

Welcome to the MetLife Fourth Quarter 2017 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, instructions will be given at that time.

As a reminder, this conference is being recorded.

Before we get started, I would like to read the following statement on behalf of MetLife. to historical statements made the and within laws, statements to call this federal the respect company's its including forward-looking the subsidiaries. products constitute the relating company business with and information, financial of in statements conference securities operations the Except and in the results and trends meaning of filings including MetLife's with time result of a forward-looking statements actual results as to may U.S. time differ and the materially those uncertainties, from in from MetLife's results anticipated in described risks and Commission, including in Securities those Risk filings. the of Exchange Factor section MetLife specifically result revise whether otherwise. disclaims of any forward-looking a or obligation or to as developments, any update new future information, statement, the With over Investor Hall, to that, John of would I to turn call Head like Relations.

John A. Hall

and earnings to related quarter MetLife's measures. will a portion comparable not in so-called can measures Relations measure may everyone, welcome because Reconciliations reliable based quarterly be from release, and directly A call impact not measures fluctuate which investment we gains principles, supplements. GAAP of these Thank to call. significant is and forecast have financial possible on directly period-to-period of and discussing it's to earnings this generally non-GAAP you, net on information provide the XXXX definitions MetLife losses, of most financial believes forward-looking accessible, to Investor certain financial comparable net the and on income. derivative and our non-GAAP metlife.com, reconciliation our GAAP a may found GAAP the of be most not Good fourth On accounting operator. accepted morning, measures net

of Also Executive and management. Hele, Financial participate Chief and Steve me the today other this joining morning Now us with John are members the are call discussions Officer; here in to senior Kandarian, President Chairman, Chief on Officer.

Understanding prepared in session. will yourself session a have to along. there remarks, one slides. night wish to With John in supplemental will slides the remarks turn are follow hour. unpack expanded one all lot that, noticed limit please will supplemental speak Hele if question that we today, After Q&A the those top our our Still, Q&A They have of and the may on if last be, of his over you an set we released a available prepared website. You follow-up. participants, beyond to to fairness I to is need call will to extend Steve. we

Steven A. Kandarian

you, to business of our the Thank $XXX operational focus not and delay this an us is deeply on million my within that John, morning pre-tax. Simply after-tax and that We Most charge of embarrassing. put, issue caused or failure had hour. finest take an happened have and is should earnings Solutions everyone. Income and $XXX never good will million morning, comments it our Retirement this

this issue a of Board come fell The our and and thorough bar engaged We we can as have processes expect how over understand people is review at our on practices, short fully XXX-year the Directors high are level people to the us of history. undertaking where from to well. we reset

two to Rather information the weeks not as most the Let's to December on we would financial closing to and this a revisions back weeks. weakness provide make why have amount release of take risk its to an with that rush been created to we did statements and you an work. start years. to have XX, than we two This material is need possible. error, accurate process the a significant going until earnings couldn't is, know decided about issue late you MetLife's we XX? five would process postpone our report extra by decision knew on if The getting earnings January What question planned in

Labor January them the how the people on financial geography billion, accounted results statements. period as back standard a type been to business discuss were and going retrospect, a will financial describe long make unresponsive often the had time, reserves for what pension prior annuity when us pilot charge business high-level was are establish pay what pay. our issue In brought benefit, benefits of By was people. reflects to with that more net some All impact plans their quarter were it better own status. led strong over which detail John error. in preannounced has statements. an We XXXX could reserves MetLife of was In attention affirm with has of and took happened locating annuitant. They Department our establish we to in sufficient. not we the decades who after-tax MetLife's to quarter on clear the We new the whose been we a our XX, U.S. practice we in a contrast, as and period to and our the a is things: do. now reserve to period in came light. process financial the to of releasing had not we not underlying companies pension three organizational Khalaf, of issue and we The finding the in establish head not failure excused we addition. XXXX established remainder annuity $XX based single retirees fourth urgency in contact What plans better do XXXXs, what But of moved but me, the do left already the impact and outreach income job annuitants earlier MetLife group of no revisions processes of assume companies. we Hele fourth performance cover Michel two quarter ago. announced were had to for conducted These the of in the is decades. we improve of me greater company the sense A we protocol financial needed or the happened; we better participants. escalate even it and to owed were $X.X this assure was retirement of not any charge find, their do this wrote been to retired addition when reported relates retirees; urging October, find. MetLife sooner. job away with in periods, everyone and This performance our with released and has sponsor always full-year the for very easy years business, in longer yet time. to group obligations Let became earned charge material to a know, to right. The program weeks the to reserve current an pay and Recently, of for missing could in finding In had solid. you that from that always As are place, the contact million this The and that

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that evidence of tell can to people to-date action report you we hold found intentional wrongdoing, are not that I can accountable. I taking has While any MetLife also

use third-party certified finding have and specializing unresponsive addition, additional mailings, include additional we and mailings, in the calls In processes missing steps participants. annuitants. our missing of locating phone taken for to These firms strengthen

The elect For rate Guaranty those Benefit back million everyone used Federal will we for we their they also payments payments amount pay $XXX in the interest Pension commence we soon and on as find. benefits. we already find, will as comparable to We'll that be charge this is to reflected Corporation start reserve the took. interest by

annuity roughly own benefits, distressing is in providing that the standards. payment $XX billion. are business protection the makes which is deeply MetLife's issue we reserves financial our to purpose fell I MetLife's our customers. of this RIS disappointed timely purpose of Central high context, For me. am group to especially short that to core

efforts pay our deserve find customers Our and to best them.

the I to remediation, fix discuss of better. annuity do I it, is the issue will our this earlier for taking disclosed the regulator, steps it will of self-reported group now primary escalated itself, and necessary some issue. been to We have all ramifications publicly MetLife issue discover it. wish

we to XXXX. prior restore accrued reserves as to Most well released with charge associated a interest. mentioned, as periods previously is took of As the charge

we Given financial and over issue, identified nature has the reporting. This two size weakness related had to control the components. only identified a of management reserves. material material internal The in is group annuity deficiency weakness

a second approached we a XX.X. required to of led would once that to when when and approached minimum adequate reach age they the MetLife the release reserves. distribution First, administrative retirement had of the try – accounting they controls and Historically, the XX practices of normal of twice over the annuitants time lack age

second noted, for improperly who those attempt. reserves the annuitants we As released unresponsive were after

failure The was and communicated component second to to sooner. not them. MetLife, process issues our identify or on address which throughout timely a The hindered basis escalated were reserve escalate ability release

issue the company. did slightly similar complete. our was a XXXX, to amount any weakness fall XXXX. additional accounting the not scope December became review, dictated and the annuity material range. prudence review global will below the weakness charge make administrative the This working of identify remediate hard processes John group clear, material Hele in to We which of And The are in expect issues. now the review progress is and preannounced across the started further. discuss of material Once

regulator our as that matter, an to including competencies, regulator. Financial annuity Services our underwriting. an many group insurance self-identified primary York cooperating is the management the and Exchange Department as important asset I on as and and MetLife liability also Commission management, would regulators with Securities core our of this well as leverages company's are The MetLife reiterate business is of including this New that We self-reported. issue the business securities

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I on capital update want to close, you I activities. our Before management

intend that discussed remains on To offer management We for clear, remaining execute $X in effect. call exchange our our billion be capital outlook authorization. we the on the and to quarter, and complete our of plan before how of aware $XXX the our well overall, recent to our conclusion, I During reiterate necessary our billion stake Brighthouse buying in completed the $X.X we our $XXX billion billion $X on market returned $X authorization All billion we $X the current We've have shareholders on continued dividends. fourth and remaining million shares XXXX, authorization. to in repurchased fourth repurchases most the and repurchases end committed the history. I in our XXXX. recent want of to making began we million am MetLife. are changes told, prior in quarter including shares of than repurchasing In authorization more at

company We for MetLife in At have entire our correct. that number to the with I a charges and and by the took place goal of believe simpler, more means the management market than free flow. leave MetLife strategy the we is capital-intensive is have My of better goal view, found for predictable had surprise. cash that time, it. less same In this the put we team

company confident the perform position are strict MetLife's environment. We economic in that well capital any process will budgeting to

John task Our execute. and call must have discipline will. enough insist will a operationally, we to continuous of we to strategy; not level It With the in on the that, to turn is we of the over I improvement for now right culture how have Hele. MetLife same is

John C. R. Hele

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X, one-time attributable reclassification income to to reported of AOCI the certain we of to approximately reform with be of new As the is primarily adoption decrease XXXX, This January by a AOCI, rules. expect required accounting amount by to are from to this due in were retained that net earnings impacts but XXXX. driven X% in tax

Our notable items into financial release on in highlighted the our highlighted quarter five page these we news quantified items and We've categories are in that supplement. X. quarterly notable

of repatriation insurance taxes $X.XX $X.XX various tax XX% primarily impact million million share by on after-tax, First, we due $XX per transition earnings adjustments, to the the group adjusted deferred per overseas million $X.XX revaluation new per $XXX negative had charge, earnings or Second, tax a the after-tax unremitted of to the one-time our reduced $XXX share, one-time due to share. after-tax annuity or rate including or of reserve and

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as have full While our excluding to update was favorably loss quarters the MetLife of Favorable been X% an $XXX solid year adjusted for shortly. & our the related noisy separation, the provide quarterly to the cost expenses. solid for XXXX year through $XXX as loss compares the as earnings were million, guidance items, previous This adjusted produced Adjusting initiative down range key our lower were underwriting overall Corporate items for markets has XXXX. within implied from notable life an fourth the quarter Other Corporate was will guidance & results. and and equity XXXX tax litigation in Other unit year. reform, I Holdings move well XXXX results. notable expenses the contributors and million in to

our periods. financial identified releasing years. group prior the reserve let material $XXX reserve Page annuity is end the are business. related The charge the approximately billion. further Page to a the annuitants, prior-year Now pre-tax, below our MetLife's group using XX total XXX,XXX In a this The was XX% was an or revision charge statements. the back RIS of provides the annuity January business, bottom provides guidance On tax the by X reserves periods million annuity reserves population. and annuity $XXX million overall some roughly of X group background X% group $XXX of the $XX was million approximately group total, which the group on the which annuity million $XXX management, practice address the weakness subgroup XX In release. approximately breakdown after-tax. correction pre-tax, $XXX pre-tax for required To of charge $XXX of required million basis, on of annuity is go by rate of size million charge U.S. reserve correction impacted press of XX,XXX our estimated most total, or that me for after-tax all charge.

numbers You the will financial have quarterly for notice annual historical in supplement that XXXX and some our slightly. changed of quarterly XXXX and

in which correction function can performed You quarter. These summarized in differences the to historical slide the errors, small of during revisions fourth that revision required we U.S. of see the are reflect in prior-period income changes appendix. the prior-period minor a impact net the the the GAAP The was accounting.

of this models MetLife, unfortunately financial on produce updating who those part. your will require For some

turn to the to material quarter. fourth management during control by X over Let me in the discuss reporting weakness financial page internal identified

to on As practices Steve services, weakness. our the more databases as and we among to certified administrative to communication to other regarding group practices include On are mail, external administrative to described, of additional practices earlier, the are reserve throughout correcting annuity elements: more remediate material knowledge-sharing we group weakness is X, two respect to practices, only annuitants reviewing detail timely to with frequent material escalation, our the as and Relative I release offer the efforts simpler more locator will are business the things. company. well improvements would use page and the and These made. annuity communication our Relative ensure related escalation.

will will a by are which measures to Tadros. conduct these control believe overseen reporting. internal MetLife's Officer, We over We our advisors Ramy Risk financial Chief be strengthen hiring comprehensive analysis,

expect to progress XXXX. we remediate weakness ongoing Our make efforts to are material the throughout and

underwriting. XX, historically XXXX. our Long exit may Care. provisions me policy Term our were Turning new your We to conservative Term Long another be announced in topic that mind: and in Care on from business address conservative let in page We

majority opposed example, lifetime to being expenses and as our XX% benefit, plan. only vast incurred cash of the actual offer For reimburse policies

and were issue Our medical largest fully cognitive impairments. at for underwritten blocks

XX% with generous that, book individual. of around business Long smaller less ages, Term than policies our Beyond lower is Care and provisions generally group

aided Long of roughly premium full the by book XXXX, on average X% of rate In million consistent action. Our Term LTC $XXX these book. Care were annual generates across

GAAP big the billion $XX.X approximately a performance of sooner have the in makes our liabilities We XXXX. billion making premiums difference with and started We states LTC first that early, of the economic Collecting LTC statutory of increase liabilities. $XX block. rate request in more process

statutory testing. have for We will each review assumptions comfortable on flow a updated Based loss and cash recognition year margin in loss our we recognition. XXXX results, current about

We each update assumptions reserve experience. claim year to also actual reflect

company, York-domiciled York reserve New our subject Among increases a factor not future we other means state are things, New As to into rate calculations. in we regulatory oversight. do this

Lastly, we a than own rather control our the means third-party we which administrator. administration, do claims all of checkbook

long no write reflected for we've results. has business, been longer experience time we Long and a While Term this been that involved in our Care

talk reform page tax let's XX. Now on about

earnings. million quarter charge. billion items the deferred liability in our reserve of to we the $X.X the a than of due group quarter as $X.X in have reform. The of tax billion call includes benefit result that to a our $X.X tax billion which guidance This a less billion, of fourth resulted was one-time negative $XXX to $X and adjusted remeasurement provided net We benefit outlook of fourth on annuity a impact

In have earnings tax. charge to addition, transition a adjusted a due million we one-time $XXX to repatriation

expect recent our XX% XXXX for we taxes, reduction of rate between XX%. U.S. cash our be will guidance past, payments not be with and to to lower the tax company's In six modest effective significant in at than is consistent annual to cash regards least a the expect liability years. which the now prior tax to IRS Looking to XX%, tax cash ahead, we XX%

Next, guidance I on on our would in you outlook some December. of the to like call update we provided

Corporate reflects loss & Following to for $XXX This the to our in increased the is and adjusted loss a to guidance Corporate higher were moves the new interest rate. more taxes Other reform, range, as the guidance XX% of Other prior businesses. on other million adjusted outlook sensitivities Relative by corporate $XXX lower our XX% XXXX expected offset such and million. rate. tax & to provided in on than adjusted be tax based points rate call lower earnings Other guidance our also tax U.S.

get simple tax you the For XX% can those, math rate. to associated a sensitivities with

ratio a average, the We over target flow are maintaining are XX% couple comfortable of from an earnings, our reform there's impact XX% XXXX. XXXX timing reserve considerations. impact and There tax flows Tax group our to at on of separately, free annuity addition. and will cash adjusted cash the

together, to end two-year the be over the the ratio of lower range expect Taken we the at period.

decrease XX, earlier, cash cash capital change December. we subsidiary will dividends, as at As reflects as in at assets a I Steve no expenses the our December which December. indicated capital in companies anticipate effects our liquid quarter approximately $X.X holding outlook and to position. debt is now in dividends, billion management our at plan, XX. September in call $X payment on articulated of repurchases, holding discuss our Cash million and were $X.X billion billion the share company $XXX holdco the The down net of as well from common maturity

our related cash flows of to was items free addition, Brighthouse. XX% earnings, adjusted flow XXXX In and ratio excluding cash notable

I would an Next, to our with update like position. provide you on capital

earnings capital dividends earnings reserves While reflects Statutory we Statutory U.S. above earnings NAIC XXXX. offset billion. $XX.X by earnings a statutory were losses higher calculations and we remain earnings operating by also Net have basis. were U.S. full-year not losses. Preliminary and partially total derivative approximately XXX% XX, approximately billion approximately risk-based ratio billion derivatives. was U.S. taxes. $X.X and on on as combined We completed impacted RBC our for underwriting, favorable at higher operating were capital our operating adjusted estimate offset estimate statutory December net were by XXXX, $X.X that will our XXXX

XX, and ratio is strong. patience solvency over our look in add my issue remains capital Japan which latest the your and our back like quarter, Overall, I personal while the the it the fourth questions. turn to margin September as for would was Finally, regret of data. annuity public your that, I position to questions. in reporting. challenges the cash with And, XXX% group operator your delay appreciate to I I'd forward presented

Operator

you. Thank

comes of Sean from Dargan the Fargo. ahead. Your first question line Please from Wells go

Sean Dargan

Corporate Thanks, for I losses. morning. and a question the have guidance just good after-tax higher about

Just at a change produce tax after-tax segments offset in the level the in earnings which will to no because operating higher than clear, higher there's loss guidance rate, to will Corporate? be more the due enterprise lower

John C. R. Hele

intuitive, the we John. about and number normal may than with XX%. if you loss This that's tax the more there's Corporate Yes, not pre-tax you talk Corporate at net true. than It's larger that's is the think, loss, that than because is credits Hi, Sean. and look the

total totally the change, our rest only will is of range by of this be better million So, the our due to in and the margins $XXX mitigated tax and changes in business. reform increase

Sean Dargan

are regarding of Okay. of reviews your give Thanks. they internal they the wondering question the New your any York SEC us about processes that And understanding how taking if annuitants. context you are review? then I Department or have findings group reviews can I'm doing the the working. and are just a the doing their Are of competing essentially

Steven A. Kandarian

It's can't exactly matter, New it's this York obviously securities both own Sean, that The arena, long Each has own and play And for insurance our and we regulatory Services will a is with course. SEC Financial its each predict process fully. out. how we're take own will its Department is Steve. primary regulator cooperating has arena. of so its

Sean Dargan

Okay. Thank you.

Operator

ahead. of the Tom comes Evercore ISI. question go next from Gallagher Your from line Please

Thomas Gallagher

Hey.

the seem the pretty just Steve, global question, terms across talk Can here. the you you businesses, did all in First it your quickly, review this isolated is up depth to your the you're isolated just review of the – about claims of business? to bit fact in situation that wrap timing considering internal confidence a annuity this highly group is and only confident the

Steven A. Kandarian

answers; get Sure, to Tom. an nothing the found et the there at. reported, matter might working countries of point, made which When sure resources And all hours, put as out look company, coming things To determining light, what people to cetera. long exactly in there's that the review material and your else necessary same to we out this And always to be in we weekends, against years, regions you review, are arena. people right very have that was insurance within very, over encouraging. we the meaning, this evenings, had came

actuarial change things. international You find the new better a operations. was ways review doing and and extensive assumptions your our your estimates, or of of thorough may change like, and this But very

Thomas Gallagher

of And just bit, XX%? we a had for margin Care. comfortable Term talking a you. a the would closer quantification that? XX%, recognition Long at on help directionally, Are Got have least you above Just of Can loss appreciated. that little John, follow-up, to margin about mentioned directional be you my help on you any

John C. R. Hele

not it's a that XX%. XX% for but How's U.S. In range? GAAP, over

Thomas Gallagher

it. Got

above Somewhere XX%, below XX%.

Okay.

John C. R. Hele

and about definitely assumptions all the it's in you it. And Yeah, above make how it's you XX%. think

with So, the state. it continue is work complex, of have do but as work a as appropriate we to better a lot claims this filings on we rate well to management and

we've and the long had. time a GAAP don't effort you this. GAAP ongoing a So, on than conservative on this the We've see statutory more forget, statutory we an basis, are quite had And can larger than tested reserves it assumptions is reserves. for

Thomas Gallagher

Okay, thanks.

Operator

Your go from from ahead. the Please Bhullar JPMorgan. comes of next line Jimmy question

Jamminder Singh Bhullar

I a morning. questions. Good Hi. had few

product up on there's your a around on. think I at X%. if Japan, look shift going Asia I sales, mix they overall just And First, obviously, were

you that non-Asia those if the look a Because at what question up that So, on as first And annuities is X%, then grow sales, than Japan? that to less lot. well. were in you're seem that's the actually secondly, selling are product

on, there? going if some could detail give what's you us So,

Steven J. Goulart

Steve It's Jimmy. Goulart. Hi,

I'll region, basically, performance and were you at Asia was Let up then But all Japan. it as was basis, of some strong Shah over where a bit some very led But when and year-over-year look and ask little flattish sort me look start a at on performance. there really more you a of our on sales emerging by XX% essentially China that comment to Sachin markets, those was XX%. Korea look when fourth I you the sale The up Kong, fire sort regulatory one with that Hong of impact. were think Korea quarter result quarter. at changes timing a that a sales Kong events. last sales of some basis, are there ended In up were of on just a little campaign unusual over Offsetting a bit Hong performances quarterly and in in and were when

very So, sales. overall, very we're pleased with again, strong,

change wants ask lot to he was and a comment me that with mix. anymore had of Japan flat to let I if But think in do Sachin on Japan.

Sachin N. Shah

Can you hear Okay. me?

and Sorry, X years customer Jimmy, XX in These fixed is annuity product. are the little there. specific term sell technical glitch targeting built a products market years in and products, fixed-term a period so looking maturity and or In have These years, predominantly X also target Retirement MVAs the currency them, the the products products. and segment, typically customer we into the bearing for risk foreign return. is a

Jamminder Singh Bhullar

yen as And Japanese products? are to primarily forex they opposed

Sachin N. Shah

All of are XXX% life products, life our our XX% our of foreign products. annuities insurance sales of and sales insurance currency

Jamminder Singh Bhullar

limited Brighthouse? go filing a for some buying bit a I I through to on that us process. back little color give given then sale, you a you Okay, window selling the thanks. have been then have process review quiet think stock after whole there's a so. that that John, Brighthouse for do realize Can period just the to you And or had the and you there's of on through

you to first-by and that process first you'd through do the it feasible what's the is it in of that end So, need the even the could go quarter?

John C. R. Hele

Jimmy. Hi, John. is This

up Let question. your on me follow Asia

emerging there's were quite as quarter-over-quarter. Kong, Other in was timing and referring Korea right, Hong of sales Asia but to Steve markets the some You're much. strong, up very wasn't points

at XX%. you full is of the sales though, look If for up the year, Asia, Other growth

sales the very some need to right, the walk in it. timing no-action with enough days with open file relief a pleased some And through but of for we days some year. to for Asia our work SEC there's on we're growth we long order trading in BHF, and Other you're quarter-to-quarter, have XX So, window,

to it sometimes information. that, beyond pick a run where we window various afoul days of goes have so a don't few we And

and on we but it when window exactly filed know timing yet, and to will have get we haven't So, set will the it be enough let in going. you we long a

Jamminder Singh Bhullar

just is Term then for you Long or lastly, reserves? assumption what are able Care disclose have interest And disclosed rate your you your to

John C. R. Hele

the and out slowly GAAP to grade now about and is like The XX at assumptions tested a years rates, of our from curve start different interest It's rates various rates statutory. at (XX:XX) all Treasury current U.S. in XX-year GAAP forever. level including

Jamminder Singh Bhullar

you. Thank Okay.

Operator

the comes KBW. ahead. Krueger next of go Your Please from Ryan question line from

Ryan Krueger

should hoping the in Thanks. impact financial business? related your remediation efforts upon the issue it if we about morning. Hi. will if annuity of go-forward any RIS terms elevated expenses you to following I group either or touch Good was you just impact in real think could the think growth

John C. R. Hele

expenses the year, business the some speak about slightly We're it don't be be why Officer expect doing we by expenses expenses. for we doing and Risk to I'll the the year. believe programs range I impacts. still take the efforts Sure, Corporate would be higher those the we're by & There investigation we've that the turn And those within for be may Michel over throughout outreach but would could you Other some absorbed given to there, additional for Chief costs these doing overall business. led

Michel A. Khalaf

and we expertise, energy will disclosed have focus annuitants the of on that, a as possible of missing and we're space. initiating resolving to that issue a Having in our we obviously, payments said and as PRT the leader many finding lot be So Ryan, them. the

management. expertise of new a asset year in management, of PRT. business we lot fact, liability of last We in of And matter a year, in terms a had as terms have record underwriting,

best-in-class, to business. remain we're active our will in and we'll continue enhanced going process, we competitive be we a which continue to win to believe market and this So that be with will new

John C. R. Hele

showed activity $X you XQ's add, Hey, again. minus in-quarter want just Ryan. This on of to after-tax. I the million is John slide X, we

that that business, should modeling you amount roughly that that of have into be add you would So, future recurring.

Ryan Krueger

And in can view business over passing through reform benefits you tax rates then, the of sustainability your separately, versus it. Benefits through discuss Group of time? pricing tax Got your lower

Michel A. Khalaf

is this Michel Yeah, again.

a time. returns see that expect to we going we're will So, benefit, normalize but over

dental Life So, two-year about guarantees; our is and business, annually. if five-year are rate done three for a renewals XXXX. has our typically obviously, think our we business group Group guarantee; renewed business, Typically, disability to

we're only So, we'll tax from renews, getting the that is the we on to reform. we as don't factor. A price. into back give we our compete tax for business of But will the have Again, factor that it's lot not solely time, depend on a that goes business, pricing, some compete over as competitive environment. expect the new benefit

Ryan Krueger

you. Thank Great.

Operator

Please Kamath of Citi. next Suneet Your question the from go line ahead. from comes

Suneet Kamath

York Thanks. Financial reviews and follow SEC. New wanted Department I up on by to Services the the of the

grow was management surprised jurisdiction regulators limitations those Do either by recently on business? banks the have forward or your to on large the of plans growth regulator. of kind capital One any ability your main of with the their

Steven A. Kandarian

I not to authority you're referring Suneet, us. Federal does think the over which Reserve, have

Suneet Kamath

Federal I'm the about they NYDFS that the not specific SEC, annuity on issues. those the and group are talking the regulators talking talking I'm about about jurisdiction have Right. plans? do reviewing any Reserve, your I'm

Steven A. Kandarian

asking? you're of issue what exactly the On

Suneet Kamath

of management don't plan, there is, in they the terms going we of ultimately terms I that outcome guess but So, ongoing, be, to my related know is capital In to us your are your could ability question. these something to decide my what return capital. question is right? Like, that's reviews what surprise

Steven A. Kandarian

applicable but think approves to, DFS you're the the dividends, referring us. Well, don't case anticipate I to being I that

Suneet Kamath

big Okay. rates And as be GAAP impact? first your a the we in quarter, of of well stat first a value as capital in just at in we the should then that terms impact the the given expecting end move-up saw quarter book

John C. R. Hele

interest were less Well, have changed to changes than year, sensitive and to we John. as our rates last we It's in historically. you we as know announced Suneet. hedging be strategy Hi,

because be less So, there some it's than past. never been but will the be muted should in perfect, impact has it it

Suneet Kamath

that management to component reduction? just lastly plan, kind expectations capital of guided liability are of still XXXX in still-is for that debt management it. of And you the terms your on then Got you part

John C. R. Hele

Yes.

Suneet Kamath

it. Got

Okay, thanks.

Operator

Please go Your next from the Autonomous ahead. Bass of question from Erik line comes Research.

Erik Bass

free amount And, where places increase John, the over Thank you. tax cash there walk flow hoping actual reform around guess, to of of your time? more dynamics through dollar Hi. cash I you free was is flow. the expected I are could on

John C. R. Hele

from Well, a you there's basis. on being earnings. of on remember, based let's cash a get the is as subsidiaries cash delay, the then the well, U.S. approved GAAP which year's your free talk year is get we denominator for following earnings. largest a the statutory course, of And percentage our companies, last And flow about dividend and, the we your

about GAAP our by are going go reform tax X in So, points. the up by to earnings change

delay So in getting with dividend that also dividend and the will a the stat even all have in year out this slightly charge like capacity of there's we impact in get-go, XXXX. the as same done,

compared pre, XXXX. numbers where we some XXXX, we – in it have were better in a will little improve to lower to expect, So,

XX% We're it the So, a bit are, there's be average dynamic of over XXXX. currently the that But two-year at and we and low timing so before going end have of not you have will be large going on. U.S. reiterated taxpayer on. very some time we XXXX in to we a expect XX% to cash the

Erik Bass

had is planned then of or ongoing that for investments projects from timing And impact any other or there the thanks. reserve XXXX? the on Okay, efforts the controls remediation either review you

John C. R. Hele

fund what are have, to very unit working we and cost all other will these still initiative hard on additionally the the projects we we're throughout our improvements and No, we making world.

Erik Bass

Can on Steve, last, there the the sorry, board And just your playing? in thank then, you capacity comment just you and is they're what process. commented Okay, had involved review you. that expand

Steven A. Kandarian

them role. oversight of Directors regular quite They're normal we the in Audit we've on the internally playing their a updated and discussions and involved in The the particular, Committee, company is keep basis. in full all had Board that

Erik Bass

Okay. Thank you.

Operator

of the comes ahead. Please line Barclays. go question from from next Gelb Your Jay

Jay Gelb

on range of return billion It for sort $X expectations pointing call. the the outlook capital to XXXX. first is My on around question you. was Thank the

make that's to still reasonable for that sure expectation want XXXX. Just a

John C. R. Hele

under common billion authorization, billion remaining have $X.X would that plan, we the the $X buybacks Yes, outstanding shares exchange Brighthouse the of the include dividend. the and we the

Jay Gelb

That's I what thought. you. Thank

Second, transfer exposure is potential have to to any put-back exposure Brighthouse might with pension risk any regard they there MET? from

John C. R. Hele

ours, have it's and When spun have separation have we up. set we anything prior agreement master a X/X/XXXX, separated, theirs, how to was they and Brighthouse that's and

Jay Gelb

there? separate? MET So, addressed has, potential any it's view, your exposure in fully

John C. R. Hele

Yes.

Jay Gelb

a be And in across just of thanks. segments? XX% final rates for simplicity question rate different on we tax MET's a segments would there different tax. just sake all then to Should Great, XX% or assume

John C. R. Hele

rates be different there'll different Well, in segments.

Our tax have some rate of investments, tax XX%, from rate overseas see is and the our you we XX%, get some will U.S. so we then credits many XX-ish, tax changes.

Jay Gelb

Thanks.

Operator

question Your from Goldman Sachs. next line Please of go Alex comes from ahead. the Scott

Alex Scott

Good morning.

time to cost you'll move-up since ultimately phased the update in the the on guys thinking in? is First I have just any ROE, about of changes program be one following the was the made kind you been unit lot there last you spread there's achieve XX-year and, of that guess, a on have able XX-year that the opined as to

John C. R. Hele

a at and average instantly in over in. quarter. higher we're to that general not sense target is up the and, now follow our When ROE We longer-term I think rates spike think as time. ROE the overall the XX-year said, XX-year as target. company will a we've this up in meant to quarter, you're be to they stay It's Well, it the slightly referring a spikes relative makes

portfolio points, to Our move will earnings will move. correctly? it But over time there won't that. power period points, be question I moving basis and for time and increase your small whole XX towards of takes time Have XX any basis answered direct-it at the a change

Alex Scott

to? terms I around in spread where XX-year, ultimately mean, of you it get sort the of the above just the But is piece Yeah. of can view like unchanged

John C. R. Hele

Yes. time, that post our prove XXXX. basis and points cost to XXX expect XXX to basis we we we're as beyond unit points improve even Over

Alex Scott

And in how whether with it impacting you quantify MetLife the TSAs follow-up may Brighthouse, could earnings for us Holdings be that on just be either or the – Corporate?

John C. R. Hele

time, as help why through. and expect higher this unit goes will will it we Yeah. initiative increase as Well, strand TSAs we we over have to cost have that do go that's down, offset that slowly

in you'll folds other. giving And able So, can all see announced, the offset XXXX with those to ratios time. out expense as starting a and quarterly published track so the to of going tend each on you two basis we some be over start this quarter you to we're us sub first how details,

Alex Scott

Okay. Great, thanks.

Operator

from of Your next Larry comes the question line ahead. Janney. go from Greenberg Please

Larry Greenberg

morning. Good you. Thank

up new idea had that us you Can with the of XX since might give fourth quarter rate. given XX-year bps stand you the roll-off So, versus the over year, money some the beginning where us today?

Steven J. Goulart

it's quarter-by-quarter you color, the hard the given Goulart, lot when money a way. just off a much by in relative This of moves are new around basis, Steve and look not yield. how roll-off quarter, where portfolio sort quarter. we're the overall that on and Probably a needs whether lot roll-off what Larry. our It what is seeing that's at investing we're for reinvesting, for activity value of strategies of coming and our But

at So looking probably really basis think what's I a on. going think is about way to just not the quarter-to-quarter best

we that's earnings that and our portfolio on the You want the to again, going the to trends. And, for good We think for about to portfolio. interest like fact overall up. long-term rates continue think good be move

the would lot an So actual of really but, I that by a impacted to expect on number quarter-to-quarter increase, basis, intra-quarter activity. again, it's in general

Larry Greenberg

linear that path that terms over of that XX-year, happened a would should talking the in at in a assume time, compress? of along X% about how convergence kind that a of period assume But the we Okay. relationship spread two of there's

Steven J. Goulart

breakeven the yield call as we our do where sort point the and roll-off of was we X%, securities is. estimate we've from of heading that the roughly all what between roll-off be we and impacting that's the it's at start again, as dilemma, it's that but and what investment a I positive. reinvesting know yield was we importantly, for linear? new positive our positive are into spread And, X%, like, approach little trend is X% there positive. X% better, would linear, time, been Never for what what mentioned over bit us. higher. mean, what interest several very certainly investing too. but the Is the trend. that Most We that, i.e., referring John quarters, portfolio a options the Well, versus will that it a XX-year roll-off XX-year, money that's And will to level try over assumptions said that Again, exactly John a we same. difference roll-off/reinvest relationships we're all as baked looking stay above rates also some very negative eliminating exactly so look a that probably and are time, are at portfolio, persist the portfolio we approach start

Larry Greenberg

Okay. initiatives, where what just year-end of where XXXX? for initiatives is of Thank you. stood cumulative expectation of as the end tell for kind the And savings the as expense then your savings housekeeping. the you of model one and XXXX Can – us the cumulative just

John C. R. Hele

target And of about had. our $XXX our we're end that's in As basically the million was saves. of XXXX cumulatively that – we

Our one-time is than we had. running a little less

years. get expect We up, next caught they'll the though, throughout two

Larry Greenberg

a number XXXX? then And is year-end there for

John C. R. Hele

again, we we trackings, that to check the of you key still but not the but it we'll some an you. original you had you and, this the on ongoing ratio And not. board you're this first you quarter checks really in save trouble we we'll money on that clarity you said, the it's have growing we're this The guidance basically give you us efficient know how ourselves losing you're UCI flowing but Yeah, basis. for and why give not being in the in measure. saving program, elsewhere your all more elsewhere regular we'll of do an with, for is way on through the firm. follow margin slide you're one making and gave quarter place, programs And easier so good details just these on in the whether the as because it's or that's That's well, each what expense will with, really have sure be these also as I discussions during money

Larry Greenberg

you. Thank

Operator

Your Please from next from ahead. Lee go comes the Humphrey Dowling. question of line

Humphrey Hung Fai Lee

thank and morning, you taking questions. my for Good

risk pension related Just follow transfer. Ryan's want to question to on

have hear your of the clear clients I and changed brokers result business, as about commitments a but or conversation you your loud incident? the with to So

Michel A. Khalaf

mean, that behind the go I our we Humphrey, intermediaries this and is engaging Michel. through key it to doing resources with to the urgency this are address on bring putting speed issue. – them issue addressing clearly the to Clearly, and we are to also we're brokers, and Well, what up

it conversations to the this matter. those we're speak. market will we decide ultimately, So having And as how will react

we we're to missing do we have be to standpoint, deal possible this believe issue annuitants sure process the our best-in-class with place to from think payments I a industry. making that and initiate those that in humanly everything will find in to and

Humphrey Hung Fai Lee

So, in in given I we but for more will John's the remarks, is prepared be expect discussions of some XXXX, back-end he pipeline about pretty XXXX? have, compared will outlook that talked strong XXXX to should still – the some you the mean, of loaded the

Michel A. Khalaf

more be to mean, I We Well, compared in first second back-end of typically the year to tends activity see half. the loaded. the half PRT much

is I regard. this stress could year PRT to in be want just component we expect one typical I RIS to different, So, it mean, also this but that XXXX be of our business. a

and perform settlements, our example, of that business components business as to continue have for well. markets capital We other structured stable strongly, this value,

of So, our that's component one overall business. RIS

Humphrey Hung Fai Lee

still And that now the qualified completed, statement? any it. then, a with so for your financial there opinion are may issue Got your review auditors risks

Steven A. Kandarian

No.

Humphrey Hung Fai Lee

Okay, thanks.

Operator

Bank. from go Please final your Shanker line the Deutsche question ahead. And comes of from today Josh

Josh D. Shanker

to of Finance, of the I York the Or their matter my the their of on really concluded? open-ended position we sort at matter? that answered. this notification Most is inquiry we in thing know want New will the the interest have thanks. and Department been could Yeah, some from an point SEC never questions confirm, with regulatory receive be just

Steven A. Kandarian

let Josh, communicate us know, and the conclusion, to once certainly they'll process, that we'll through marketplace. come their they've like and a felt to they'll go they've

Josh D. Shanker

do potential costs that for funds? you reserve with associated And legal or any have

Steven A. Kandarian

we're It's able that. not something now, to book do that's right not estimable We not. so

Josh D. Shanker

you luck. Okay. and Thank good very much

Operator

this available today gentlemen, replay Eastern will XX. and after through for conference time be Ladies A.M. February XX:XX

AT&T numbers, at for Executive code Teleconference by using with dialing code AT&T That You and does or for the entering participants XXXXXX. access access Thank Those you any the X-XXX-XXX-XXXX participation System International may the time your your access today. again, once Replay dial conclude XXX-XXX-XXXX for conference are XXXXXX. X-XXX-XXX-XXXX and Teleconference. XXX-XXX-XXXX.

You now disconnect. may

MetLife (MET) 14 Feb 182017 Q4 Earnings call transcript