MET - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Fourth Quarter 2019 Earnings Release Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

Before we get started, I refer you to the cautionary note on the forward-looking statements in yesterday's earnings release.

turn Relations. over will Head John I Investor of that, the to call Hall, With

John Hall

Operator. morning, you, XXXX Thank Good Earnings Fourth to Call. Quarter MetLife's everyone, and welcome

non-GAAP you Before I our which earnings our portion to you measures in in on and financial the of we metlife.com, the refer information quarterly begin, release should Relations Investor on supplements, review.

along. and in Also on Khalaf, members disclosures that An management. number to President remarks, They to features discussions Executive of supplemental a of GAAP website. After Officer; will also a slides and our Q&A appendix Joining in session will here other Michel and to Officer. John supplemental remarks on those Financial participate if follow are me slides speak these John of the which this of prepared Chief call will have Last prepared review. the the released Instructions] morning are extend night, slides. to his you McCallion, a reconciliations, McCallion we available Chief hour. senior should [Operator are top you we set to the wish

will With over the to turn Michel. call that, I

Michel Khalaf

that The underlying strong John, morning, you, good results a from fourth year. had everyone. and financial our is quarter Thank and very MetLife solid headline a

mark-to-market balance income $X.X company. of $XXX of protect the $X.XX earnings fourth earlier. per we rate-related earnings continues, to track is $X.XX XXXX, the compared from and a top-performing million, delivered losses fourth in execution being sheet. basis, billion consistent our in derivatives adjusted interest a quarter Net In to adjusted that the a On on of Our hold committed was share driven quarter record by XXXX. this year to rose leadership to quarter team we $X.X of billion

offset $X.XX, in growth in Backing year-over-year. share management, out higher seasonal expenses factors, and up part included indicated market volume adjusted would of at notable earnings drivers impact came the capital as the we positive case. XX% items, per by The be

quarter, was XX.X% other the year in equity notables, quarter. excluding on compared FCTA with return and than AOCI, Adjusted in the prior XX.X%

XXXX, spoken $X.X For our income while about earnings Net the bring efforts billion, We've adjusted were billion. efforts adjusted XXXX. income to MetLife strong closer full results. before earnings was into succeeded and that delivered very year alignment, in $X.X net

a per $X.XX. up to XX% adjusted basis, rose earnings from On share $X.XX,

lower Across notable that volume drivers items, The per and year Excluding our were earnings management were offset the achievements. $X.XX, adjusted more XXXX higher prior growth XX% businesses, was significant margins. share recurring capital interest impact of a than than the year. of

transfer the best generated risk just Our retirement and our flagship pension of from nearly billion, X U.S. $X.X income group booked year business billion benefits nearly $X.X of years double ever. earlier. earnings earnings we business In adjusted solutions, second this sales,

Just as came points. range delivered a our of that we XXX at points. we rates, basis would commitment within XXX declining important, interest on fall basis Despite investment to XXX in spreads

a double-digit constant of we Asia nearly income basis. within portfolio. variable private investment year-over-year, largely notable on currency earnings growth our total Lat equity our both strength In excluding the generated businesses, delivered billion, And items we on and investments, Am $X.X adjusted of

investment our by basis XX advantage provided fell investment private X points, by points. only competitive protection year treasury basis XX-year assets significant yield when Our sourcing for net In and the declined portfolio. a our

points on and performance prior up from year, XX other return equity business at the target range. basis to year drove excluding FCTA adjusted strong Our midpoint AOCI notables, the and than the right of XX%, for our

expense $XX.XX. XX ratio our improvement at basis over prior FCTA, nearly direct grew share, And to value of the excluding points XX.X%, year. per than Book in AOCI came other XX% an

$XXX million expansion, deliver our unit noted, above which initial have $XXX million is we As of initiative our track margin to cost on commitment. is

significant in consistent value. MetLife's shareholder XXXX execution created

we us robust of return cash the capital form new shareholders billion business at to $X comfortably rates company's share support hurdle roughly of And in billion total to generation common internal deployed to enabled to a repurchases. above shareholder return of flow of rate. $X.X our growing of We Our strength ahead. our we and led another free and appreciation dividends and return the Hong The ALICO XX%. reduced focus, December acquisition simplify will our have in in XXXX to footprint on sale XX drive and announced the themes Investor years Day in our XXXX, of our our strategic of XX, display On that differentiate focus, Kong business. outlined clearly were decisions post from markets at the

continue to businesses portfolio capital fit hurdle exceed strategic or look deploy our rate. the at through that of and risk-adjusted to We meet our can lens

profile. We MetLife, as be in disciplined comes either just will optimizing must the when interest of offering portfolio. it be economics long-term risk transaction our to in or a reduction Any our significant compelling

going we are our pet of innovation growth savings capitalize We we'll competitive those for advantages group adopt efficiency health in and benefits, to very wells well as attractive cost-saving create expand are insurance, years. the we billion positioned with fund And UCI to difficult will $X over our as accounts, the digital on for five such and the forward, next differentiate, business on that to additional value On On U.S. lead. continue replicate. customers. believe creates platform overdeliver to will extend an simplify, target, our benefits others that will we unmatched mindset and capacity an we

have on Independent There us, to well. XX In XXX MetLife's Notably, our in its customers ensure the for strategy. alignment off-site before purpose-driven task early superior of value that a its an XX and people, and were attendance enthusiasm gathered company shareholders. tremendous energy at as Directors we January, senior was of for be its our creates we leaders to meeting full

bold committed aspirations have to for stakeholders, our building who relationships. We our enduring customers and all set remarkable for are

our our both and metrics to leadership commitment strengthen focus. customer concrete steps We are to taking

to people, make our energizes For a difference. that we a promised them culture

progress at I history, were already survey, could cash engagement year, we in need our our of see We When A place flow. was remarkable evidence providing emphasis with progress. point cultural the recent about reached pivot last ago, making the taking employee we evolution MetLife's latest I inflection few are where where years at the MetLife. phase further to a spoke Then we growth. on the a on to de-risking I look improve focus responsible

competitive key highlight today. next points our in Day Investor win covered horizon, detail we are me fully to these aspirations transitioned leveraging shareholders. advantages Now the where to marketplace, I in our which we at to brings in our the for the and will have

adjusted to XX% achieve First, an on return we of equity will XX%.

X year of of the over In X that will we an And of are X-year MetLife's are that next our to to will believe deployable add programs nicely. XX%, efficiency expense generate with billion to dispense we converging Second, $XX cash of serial in will billion pleased consistent capacity of results narrative solid over $X additional which maintain execution. a generate will average we We third, record cash years. XX% free very another that flow years. deliver favor closing, and mindset strong quarter ratio and

thesis clear. is Our

a with free a focused cash are company businesses We flow. and set and great more simpler of strong

free our range. thesis of our is consistent expense XX% record most delivery clear. businesses of flow projected in XX% million cash and $XXX track growth equally attractive savings, to in support in Our in this healthy

With John in quarter that, cover the and to I McCallion our full call performance turn detail. will over to year fourth more

John McCallion

XXXX. evening, released on 'XX Thank last interest slides in supplement. adjusted The adjusted the from fourth morning. discussing schedule which $XXX I in earnings of net release highlight million our income financial losses or X. was earnings Starting and Page billion earnings during XQ you, the in lower Michel, that to This provides is quarter fourth supplemental and of good comparison primarily Net will quarter $X.X year net derivative we and full the a in resulting than by billion. the information begin quarter. rates and quarterly $X.X increase due the variance income of

in earnings hedging investment billion. For $X.X largely the program net the adjusted and expected. portfolio continued perform year, of full mirrored $X.X The income as of results billion to

earnings shown items supplement. are highlighted release and quarterly Notable Page in our and on financial X,

by items details $X.XX on per quarter more I'll earnings shortly. items First, after tax in provide million these tax the share. fourth or favorable increased adjusted tax $XXX

result a $XX of favorable reserves the tax after in or tax and million expenses income was on interest as of items, per of taxes. Second, release share, there direct recorded $X.XX as a a to tax reduction related opposed through is which

the cost decreased initiative unit in tax earnings after by adjusted per to share. or $XXX expenses $X.XX million quarter Finally, related our

year, full or the per $XXX $X.XX million were share. costs For these

will costs spend, be XXXX is the last in reminder, for XXXX. fourth therefore, of a and this UCI-related no there As quarter incremental quarter

were $X.X earnings in notable per the or Excluding adjusted share. quarter, items billion $X.XX

on X in notable Page tax items detail quarter. provides the further the

of U.S. benefit a $XXX tax of resolves related settlement the with repatriation uncertainty subsidiaries tax. This tax a tax reform settlement paid foreign had dividends transition million prior the taxation regarding to the U.S. from to reform. we IRS First, regarding

from treatment Second, Insurance a audit settlement the benefit to Life million of we Company. of of investment $XXX U.K. an IRS tax had owned a tax relating wholly subsidiary Metropolitan

of a XXXX took third the you this recall, quarter some may As related in charge to of MetLife matter.

for closed. now is audit years all have issue and settled matter We this the

On Page notable see excluding year-over-year items earnings, by fourth quarter adjusted can the X, you segment.

share impact on currency a variable and investment adjusted periods, earnings, drivers adjusted was benefits. Overall, constant expense basis. better constant items EPS strength both by reflect excluding continued basis, items, cumulative up an and in equity on Excluding This a earnings all strong The the currency year-over-year were XX% quarter. in XX% partially volume positive basis. from performance, the income, On and both market less reported per margins favorable repurchases. in favorable basis tax a notable on results up XX% notable solid share offset were include growth

XX.X%, partially benefits the and our to by due underwriting, life up year-over-year, investment margins. was range expense prior end Group to were to year solid favorable growth The our annual the less adjusted which of lower volume mortality claims severity. driven the quarter. XX% favorable favorable XX% and target the of was margins quarter. Turning earnings businesses group offset the of to higher at by in This low XX.X% performance is XX% quarter in ratio of

the The benefit prior XX.X%, rate to to The results, disability below was also annual from strong Health Non-Medical which favorable and ratio was for of is higher target benefited and of range primary year actions interest recoveries. XX% XX.X%. claim our driver quarter XX% which renewal adjusted

business to addition the line, sales to voluntary in PFOs X% year in full the growth products. up up strong and the line by grow In XX%, its led top bottom continues adjusted quarter with

spreads year-over-year, or basis investment spreads and down up XQ RIS basis lower margins. were down Solutions, and XX basis XXX adjusted earnings points XX% 'XX, Retirement were investment in Income were RIS, by driven year-over-year, points X sequentially. points while

the within year investment also full basis were XXXX, which points, XXX guidance spreads range. For XXXX was the

guidance PFOs continue we pension basis expect XXX to XX of within RIS in risk to $X.X by up our ahead, billion were billion 'XX. to XXXX year-over-year, range strong $X.X deals spreads Looking driven transfer points. of XQ adjusted remain

billion covers into XXXX. includes Lockheed beneficiaries. week, we expect this The for this and retirees strong, last XX,XXX Martin, announced a remain As and approximately $X.X transaction PRTs continue which with pipeline to

or severity approximately development. adjusted were by injury, within primarily XXX.X%, XX% to overall prior including adverse combined higher Casualty, and quarter. 'XX, down due Property the P&C, points in bodily ratio unfavorable year versus earnings was from The auto underwriting X XQ driven

to planned 'XX. reassessing top were X% accelerated adjusted up X%, rate We and combined and line, within trend were practices our regards P&C be Based rate XQ XXXX to down versus With on expect the have operational are actions, target PFOs sales we actions. ratios. while current

on management, positive The Adjusted margins favorable a partially equity as to well constant earnings growth favorable was markets. currency were general excluding Moving better and fair adjustments, volume This year-over-year basis. investment grew were less assets as under as offset value by XX% up Asia. underwriting. account drivers favorable X% and XX%

challenging basis. annuity denominated quarter, down were given FX market. products, bank sold sales constant XX% the are primarily had driven channels annuity the contraction currency a on through of which foreign bank Japan, sales XX%, currency In Asia another primarily products. by were down

Japan A&H XX% is sales associated in down in of function with laws were which In a certain changes the addition, tax our year-over-year, products.

soft impact excluding up through operations, our of by remain driven We recovering. Korea. before Japan the growth Kong but Asia to sales in sales were X%, half XXXX Other first from divested X%, down the Hong expect

favorable The underwriting partially basis. Chile America were on were earnings from favorable less on XX% the and primary Latin currency growth, were solid margins, our XX% These better compared margins 'XX. constant by offset adjusted volume expense up and higher drivers year-over-year the to capital Encaje. a investment markets impact XQ

sales down a due America up PFOs lower and by currency in Mexico. to were SPIA higher and primarily Brazil basis, on currency XX% America on driven basis, constant Latin sales Chile. X% a Latin adjusted sales were in X% constant

EMEA on were favorable the adjusted drivers from PFOs underwriting volume basis. earnings a up by less were basis These were growth. up were XX% lower main X% basis, The taxes currency XX% margins. constant constant up offset and currency sales were on adjusted a growth a EMEA and across constant and on XX% currency region. partially

MetLife items Holdings as recur. to due margins. adjusted favorable by we were offset favorable driven markets by equity not as to of up year-over-year, These although partially primarily strength earnings were expense the well expect investment less underwriting do margins, XX% and that the

prior with seasonal the and year underwriting, to interest regard to the in was adjusted quarter. line With benefit in XX% expectations favorable ratio XX.X%, life

adjusted full range. the XX.X%, within the items, notable ratio, was XXXX, benefit interest For excluding life target the comfortably year

Other compared margins. items, notable expense was an loss This $XX prior result the investment quarter, and by favorable $XXX partially was lower less favorably This favorable which of adjusted due adjusted margins. & to taxes had offset loss, to year million. excluding Corporate million

of the loss, million million, $XXX Other range $XXX & was For excluding items, an Corporate which our million. XXXX was $XXX notable XXXX, of full within to adjusted adjusted loss year guidance

items, the and earnings tax within in on XX% XX%. effective tax was Excluding of to XXXX adjusted guidance and the company's other the our notable favorable quarter XX.X% rate

within our reminder, expected effective be a XX%. tax is to As rate XXXX guidance to XX%

$XXX investment detail. chart more This income Page quarter. to fourth including earned income variable pretax This solid let's investment in variable for performance turn investment reflects income. XXXX, our to in discuss another million X was the in Now variable

accounted is another on quarter which portfolio, also mortgage quarter; prepayments. higher and the lag, for had X equity private contained a Our quarter solid

pretax guidance $X full was billion to of and $X.X $XXX billion. XXXX range year For our VII above million XXXX,

As range XXXX $XXX our a target reminder, VII million to remains $X.X billion.

our versus and rate This a X.XX% investment regards have rates quarter. income, in new rate money in X.XX% this of With rate money new was 'XX. interest the a of to recurring to X.XX% pressured a roll-off XQ roll-off compares relationship. X.X% of Lower rate

until noted occur we treasury roughly we As previously, of not parity would XX-year a X.XX%. we expect yield have X% to have U.S. to sustained

Turning to our chart XXXX. expense from Page direct This ratio X. shows XXXX through

of XXXX point towards point progress achieving target XXXX, have from our XXXX. and baseline basis versus another XX.X% overall We XX UCI made basis consistent improvement in by marks improvement XXXX. XXX the

The XX.X%. came 'XX and ratio, excluding direct XQ expense items notable PRTs, in above at trend

the As expenses tend higher seasonally higher to fourth to due enrollment group our costs we've in our other premiums business. in quarter benefits indicated, and receiving prior to be incurred

quarter. corporate XX driven addition, primarily the by expense reflects points employee higher In higher initiatives in of basis costs roughly direct XX to unfavorable items, and higher the benefit ratio

results. the Despite that full the year higher direct XQ driving our by progress in quite the company's are improvement made expenses, ratio, with down the we pleased expense as demonstrated overall have of we

track profit to of $XXX XX.X% are equates an ratio over incremental commitment. margin deliver to original We our approximately million year full XXXX, for expense of which on a improvement direct

now capital well and and XX. liquid XX, approximately expenses. will as the net Cash is at $X.X in payment as of of dividend billion the which in billion the assets on at Page from our holding companies I dividends, effects subsidiary $X.X at our up holding discuss cash position common $XXX quarter cash X. December September million share repurchases, increase reflects company were

We XX% ratio XX% we our over returned our term. free the maintaining treasury XX% cash ratio capital to XX% XXXX shareholders, XXXX X-year cash holds with and XX% X.X% average a This a within $X near average target flow to committed XXXX, to of still flow XX-year and approximately In to guidance. between remain and billion free was and X.X%.

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

companies, we RBC NAIC target. U.S. be our our our For ratio XXX% above combined that estimate will

prior mostly billion. earnings of reserves For approximately due were operating year, earnings rider impact from up our lower and prior by underwriting offset net year primarily December XXXX. our XX, We Statutory and VA from by were increased improved preliminary companies, $XX.X paid the derivative adjusted These earnings an dividend to results. The of U.S. statutory was XXXX operating capital XXXX, was by the a increase operating earnings compared to X% the in subsidiary. $XXX dividends billion estimate were billion U.S. to total $X.X partially XX, December that approximately approximately $X.X million investment statutory as and holding company offset losses.

XXXX. was strong to quarter a ratio Japan of as XX, delivered Overall, latest September solid out another solvency which the data. very margin close Finally, is XXX% MetLife the public

businesses maintaining in market-leading firm, strong, led while Our XXXX. has level ability to across of discipline leverage consistent our diverse the drive growth, to to capital-efficient expense a results

share ROE items. excluding notable value year-over-year, We grew of an adjusted generating book by per XX%, XX% while

as sheet In resilient. cash and well addition, and our as balance capital our position remain strong

Finally, we are shareholders. focused continue long-term create will a become and our sustainable our to to simpler confident the value customers actions and we for company are more taking

turn And the the that, questions. I call back for to will your with operator

Operator

Instructions]. [Operator

question first the Your Suisse. comes Andrew Kligerman line from of Crédit from

Andrew Kligerman

benefits. is My question around first group the

doing So the that And under guidance PFO, clearly the was up to to you was this. against X%; and ratio quarter XX%; it's like phenomenal. it of quarter XX.X% so life XX%, sales, mentioned XX% in, up XX.X% seems benefits Non-Med XX% XX% out, the you're

get So insurance? it to is right like little or always ugly the when some because sense at a I And want a of get now? in does going get to it point environment what's pricing uglier

Ramy Tadros

question, here. a for few I if say, into a some very beyond, would that characteristics our and continue we here, advantages results. pleased give you structural that we XXXX attractive strong And say those To about. competitive this it's things. we This with think we and and market context to market. about your extremely an do Andrew, has leader think Ramy are have that very It here. make are talked quarter is One confident we're is I that Phenomenal, it's us, it you attractive fundamentals around would a we in sustainable we press.

the on you the said, like an think specific results about business. If insurance underwriting ratio, is you this remember,

So seasonality have typically quarter-to-quarter, with to quarter to elevated. expect do them, fluctuate bit ratios some you these being they a first do

context of should The expected that think business entirely as you results the in outcomes other the an we're that range business. seeing within our is thing are insurance our of of

ranges So the if given our XXXX, at that year for view from our in December ones not we've range. -- you in look have and of changed mid you full and middle are the the of the the towards expectations same those remain

where competitive. thing a not From say, on voluntary I business, this other a it seek talked It's white irrational. space see of there's factors differentiate in lot And to in white price. of lot particular, competitive the for growth. further is We we about and environment, beyond space a opportunity the we would

Andrew Kligerman

guess, yield? then turnover on the money of you're were us XX as John. said earlier, is yields And you the with kind I the what And against RIS. could what just forward you Great. within annual portfolio getting I to on move XXX, share portfolio you business? range XXX spreads guess, new at as And guided of that

John McCallion

X the bottoming see quarter starting of a benefit would and we get just the the mentioned beginning rate partly expected, that's and with anticipation the fully I'll we fed morning, Yes, part cuts in Good Andrew. John. is I third and to market. previously call, kind consistent say, on -- to what of of this start of spreads, to we with the just there absorbed started It's maybe due

And repo saw was and the that also, dislocation markets subside. so we And one. the

of we last as some spread good near we've of happen the And rate of that's decline quarters. So run bottoming the couple said, think for over pretty we kind a term. seen the

regards It's of about this with handy you terms in again, would -- that rate to But to of RIS just overall for we don't this said, which specifically. to obviously, the roll-off I matters reinvest of the back read to think to book, have In turnover into here IR firm. we've started -- it's But we -- in talk the go have can that mix particular off-line. terms I that hard that, talk think what is A and bottom. lot spreads I -- there, here.

cuts. see benefit You rate of X the full

see a -- in business, it And dropped for of take this before crediting a business. in of can because we it does does that that in few months a it's and there. to kind get It's take that fully floating have that's recognized You rate faster our to recognized fully our little -- some yield rate. time because lot X-month than liabilities has investment LIBOR

So color. I'll let Steve add some

Steven Goulart

just In a add business, you're Steve question. just color, lot reminding Goulart, Andrew. bit I'll is it of a our that business, capital But you markets shorter of I of isn't there where general, a think duration and mismatch. going little which with is

asset even side, there's So when also managing rollover we're rollover the on side. liability on the

So a matched and that reasonably protects it's us. business,

Operator

question Greenspan Your line the of comes from Elyse from Fargo. next Wells

Elyse Greenspan

the year. My first to PRT like end question, momentum some there were it good seems

any If rates a Is I pipeline? what you update seen give seeing you on business? impact went in sales down fourth that and been rates And interest -- quarter, this an you're the there? that of on interest then from with little could have just bit the guess, And they've year. up us the pipeline

Ramy Tadros

We're the It's for $X.X a was pipeline here. results, Remember, The are Good as a from billion our perspective, focusing a quarter Michel the us. the Ramy and larger very quarter $X.X we PRT with of mentioned, the end clearly market. it's morning, both year -- and for focusing for year. Elyse. pleased quarter, we're on billion a

you -- these the on trade That's balance rating, a they taking is our And part ends on have of of when depends and And are the one And sometimes up years. that with for journey, a respect So derisking position ALM the capability that plans, derisking number we this something of to of market the and them, right? it digits, overnight. this plans. investment not scale the these on any our where advantage they competitive current plans, a higher pension are with position big our it allocation. mid-single make only depends input but therefore, overall about that's equity respect an sheet. their is rate of even size journey because a think So to those their

all So that the given that that we're focused XXXX and very in at. of seeing market we're having said a on, we're looking segment still robust

Elyse Greenspan

your And then out both question, impacting well you within Okay. the higher trends my business, called severity in next prior BI as P&C accident quarter, guys current accident year as years.

If you a does color part severity of as of on bit guide you seeing? you're more could give elevated little might this remain just getting what at the XXXX, your least think assume year? for And trends within that

Ramy Tadros

Sure.

clearly, as is injury warranted you strengthening. took here, some been a deterioration challenging in indications strengthening then. trend a headline mentioned, PYDs initial the And saw that's and in the it's a you've quarter, And additional in as we business. that as those some And 'XX. it's we're which for indication worsened the quarter third P&C well bodily know, out-of-period We So as of reserve marketplace. And quarter, the for strengthening severity. fourth the of seeing combination a

we're also looking with tell our and are look pulling we've a forward, very trends practices. looking at at We're XXXX, underwriting but accelerated actions rate these into early levers, beginning disposal, we're the of of we claims you, where which some can As closely. I at rate actions range

auto in of we're are say range. for particular, where within the to we our towards guidance of this. expectations the albeit So stand line, we with end could respect that auto, upper I range that top would remain overall today, our on

the if business. XX% So to auto a recall, XX% that's for you

Elyse Greenspan

question. the The in in said you that Okay. And off was quick quarter, loss move the rates. of John, driven that, one numbers just derivative interest

down in that should this rates about we interest think XXXX, reversing first the Given start year? that quarter to have been

John McCallion

Yes. directionally Yes, correct.

Operator

Tom line from ISI. Your comes next question from Gallagher of the

Thomas Gallagher

XQ a Just was I one catch-up follow-up is question current just auto is property loss for that accident normalized a year And not the The is, current ratio guess, about prior the year loss well? that XX%. the as pick? accident as would it's a Or think heading on we casualty. way XXXX? what a I Because into trend assume quarters combined Like XXX better should ratio be?

Ramy Tadros

if auto you Yes. seasonally I for fourth look at quarter, the us. in I for that is typically mean, fourth you would say, quarter, the quarter the exclude if the higher remember, PYDs

results, think elevation if fourth it's because quarter some that again, So there's PYD, seasonality XX.X%. excluding And you of about here.

Thomas Gallagher

you. And capital question on Got then just a management.

were buybacks and of quarter this your $X.X cash now is holding So buildup company lighter billion. the at

So your this it why reason to first target Any use? a for in above while. time despite the dialed that's slightly back you the quarter having excess cash

Michel Khalaf

Yes, Tom, it's Michel.

in be -- of billion the HoldCo. dividends had As say, Mostly, comfortable then We sort we with are quarter in HoldCo, I opportunistic we of the of had fourth would that the fourth to the $X with buyback the to some third cash our $X mentioned, tend we tandem We this the look billion in repurchases. respect. the activity mentioned forward at share quarter. at that above pulled terms to slightly for buffer in quarter. I would timing related

So say. nothing I that, would more read into to

Thomas Gallagher

just of -- terms the are Michel, right or a balance you M&A are how as And follow-up, now you and in trade-off thinking buybacks? between

Michel Khalaf

No change also in terms our capital of philosophy. management

talked opportunities, alternative we consider view how fit think capital. of of those And also before sort I uses we about accretive. strategic we M&A

dividends it So share management capital we'll repurchases. of return in M&A form the I and and of terms the shareholders, would belongs say philosophy. Excess capital activity, no to absent in our change

Operator

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

Jamminder Bhullar

weak environment talk also had the about America potential sales political your this in in uncertainty a in business, just changes question the of the I lot business. specifically, first pension Latin were on a of what in seeing terms and Chile, where quarter. you're There's and operating

Oscar Schmidt

this Yes, Jimmy, is Oscar.

start me with let social So situation. the

starts magnitude But has when better. and see the that, But there. Chile, everybody. have I in the to February, need environment a really December, say in And we'll what to in profits As activity, to it's the better. getting been happens the surprise January social I of flow far, the much March said was year so remember in summer,

In have there. to-date, as business the from of our a significant the seen impact situation evolves. of circumstances we terms may facts January the course, and not change, But on business, through situation

me to managed able government let they the in Congress for house, your other is in The approved the which, in a present about think, reform, were the pension project to I it make and lower So to talk question. chamber. finally reform, be the

-- the Now to has no activity. is there's go it Congress to February Senate.

right, to I say say, wait to terms to project social until need version kind in -- It's for changes, which would will and don't I discussed, happen. will we we legislative Senate. enacted there good being the going is today, Chile before forward facts, -- approved. not have people ease what But the So based the anticipate a help process improvements the it's we the impact the pension the material say introduced is the the possible say, too to region. ends situation up It's hopefully, to of of financial a is to project law. as March happens But the to that be step in there on of early see to final what the what's introduces, to that the project of in it's be is that impact. more cannot if

we So reform hope I answers your question? really pension efforts. the support that government

Jamminder Bhullar

it as you as impact potential currently? business proposal the of your on And the see

Oscar Schmidt

discussed to big, end. we've because know the senate big. go not we power today, not to going It version to good Now I that but don't is has right? prudent our on for the got business approve through stands the today, be and to it's it, it it's that is how think have and it's has to being As say people, impact executive still we

Jamminder Bhullar

could if then one And John of ask I Okay. more McCallion.

the the next year? are through accounting next more maybe business potential on start you to contracts, even impact changes to in Just wait the implemented, impact you long closer expecting else. in so that quarters? few rules of your as coming haven't would any being until sort you XXXX of Are the on your disclosed on anybody quantifying duration Or either in

John McCallion

time of terms We're at in Yes, still line through point. hard this to working it. tell

So would a in we we that line of terms projected time or estimated share don't really when information. have

Operator

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

Ryan Krueger

Difficulty]. [Technical

you following Holdings the same reinsurers MetLife of are still an of rates from year? in you the Can give that? Investor at decline interest Just amount December Day. update on this on interest And seeing the pieces

John McCallion

your holdings, at updates on I any reinsurers off, the right? but regards question, beginning to activity Ryan, of it is just that with do had from you just to cut with think

Ryan Krueger

impact And That's any from interest as well? you have lower rates right. seen

John McCallion

these something Yes. size Ramy sometimes can turn some PRTs. the that on, to like is way spend for they given refer actually I not time. off. the maybe on it people -- would that to things the turn time and requires It's This described just complexity,

So much. as I don't interest rates to in think they react movements

have that number the no I'd at it's but would there, supply -- So bid-ask but over there's folks spread of I the that. we're wide, still of years, It's say this kind change few fairly point. the seeing there's good a say and of entered out last a still is space capital

Ryan Krueger

And then XXXX. guess, a with us about to give expenses, sense any direct of ratio? how the Can in expense think seasonality, was of, the I there I seasonality you lot guess, normal on

John McCallion

that I why And let is focus from make talked point that, few expense try. have quarter-to-quarter, only of the a direct which will me annual about I said because there ratio. kind just Having that seasonality recall things. we we is Yes, on

to -- those -- tend opening be the my third the and that cost, So remarks to in mentioned, we've we to I enrollment be called for as and did out elevated the quarter tend say previously and that fourth in year, this due you didn't come get customers, to see year, group recall, if we premiums following we an that be And of even the elevated. tends through the until so in quarter. this don't third

So there was some even XQ. into slippage

employee seasonality, benefit going costs expect On X top costs some we onetime costs. earlier We there would some had were benefit the that the the to way. quarters, other quarter recur. in had in employee not we elevated of additional that Remember

had So the they've some kind And we in kind of also or elevated. each spend then was in initiatives neutralized additional corporate other washed quarter, XQ, of out. that

quarter. for XX basis trend fourth points what So above normal would of kind we estimate the XX to be

costs came can that that had of And onetime kind the what expected we as through. so think the of quarter you additional and in

Operator

of Your next question the & Dowling comes from line Humphrey Partners. from Lee

Humphrey Lee

follow that to up expense. want on Just

really XQ you group the back, in back specifically quarter. in XQ. that in just it see don't there's And looking benefits, looking but and seasonality -- we year, about a So see I this fourth talked then, bonds obviously, the of

compared wondering, years anything was year past? different just is I So there to constructionally this

Ramy Tadros

lot, few a we've also, mean, years. growing last the remember I been in right, Well,

the right? We result there's sheer seeing as would things being this, kind pickup a you're investments is of just but growth, into And other there. look made. but there's we'll mean, I I that's say that So -- case. it's can there a again, other go of

hard. it's costs might But -- I as sometimes, been think, we've have that that. last employee said year, and there benefit So offset

some the unemployed well. the segments from costs So market the impact and as of impacts benefit volatility can

So it's but offset, assured, you in can little a there. might see you be

Humphrey Lee

then a And rate. just it. Got the Okay. on follow-up tax question

effective think you struggling in the items talked I that on rate get bit XX.X%. tax prepared I'm remarks, that the to So based out. was about little you a called to number tax your

and think the rate, tax tax think you items, can about effective additional you reported too, tax the if contributed some me to may versus maybe rate? to like have what number then help your I but

John McCallion

Yes.

tax come you in I rate. think in so effective adjust terms closer if -- XXs you notable of something items, to if the the you

it, million because of impact. additional call some over to just as have our kind did were notables out we that not called a the size items So of of positive and, notable $XX approach anything

I a maybe and a to were revision it November, December, to early use which company's think rules the of tax tax provided foreign late on One a GILTI it's the some is fourth few series items. ability credits. there ultimately quarter, the was in additional So some

quarter. tax came remaining the is some effectively then other to that amount provision some So just true-ups And the refinements. estimate through year-end return in and fourth

impact, get XX.X%. exclude call to million it's, you it, those $XX you items, if So

quarter how you the that's reconcile so And ETR.

Operator

Your next question comes from the line of John Barnidge from Piper Sandler.

John Barnidge

Have Sorry. in the election operating I in you subsequent U.K. the and EMEA change seen certainty? muted. following was Brexit environment any favorable

Michel Khalaf

business employee Yes, benefits John, mean, mostly not would much. say in protection. individual U.K. I I and as the our

improvement not no. wouldn't at overall U.K. now there's necessarily our So -- sentiment, an But major but would and out, to with decided. in say impact the post-elections a least I Brexit behind would that of I we've say, call sort no seen the I business that

John Barnidge

Okay. to are adverse within push back And this, specifically of to the this rate then development, were there levels auto? specific what kind you And states from? going correct auto came of to

John McCallion

mean, states saw are and some skew we -- higher some Yes. there there, -- than see clearly I there where we we are severity where others.

we're on clearly So and there states most the is that where writing amount of business. focusing skew the there, we're

in XXXX, terms the if X% you of on rate rate we so took average. taking, book In over across at look

XXXX. accelerated Over days, XX last the we've rate the actions for

going So for just watching rate, we're we've XXXX, this be X% under in carefully. QX taken of and clearly to

to expect additional as warranted. We take rate

Operator

for I'd like to call now And turn back the to any Michel Khalaf comments. closing

Michel Khalaf

results our rest team consistent me close track by urgency by this us. to growing motivated create everyone XXXX said you a greater you value. and leadership let pleased soon. shareholder again, sense of strong of So for assured We're to talk Thank thanking our performance. record that, joining and that meeting is strong this Having with

Operator

gentlemen, that and conclude AT&T for conference does your today. teleconferencing. for your participation Ladies using and you Thank for

You may disconnect. now

MetLife (MET) 6 Feb 202019 Q4 Earnings call transcript