MET - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Second Quarter 2022 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 about forward-looking statements in yesterday's earnings release and to the risk factors discussed in MetLife's SEC filings. With that, I will now turn the call over to John Hall, Global Head of Investor Relations.

John Hall

operator. you, Thank everyone. Good morning, you Earnings joining Second appreciate for us XXXX Call. Quarter We MetLife's

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

GAAP released review. On follow Last session, one other you Financial on set if to wish to and participating Officer. They a than all, Executive the please in are reconciliations An night, members After and which remarks question hour. Officer; the other quarter. those McCallion disclosures, you his yourself President this slides of Khalaf, along. should one end morning fairness we are will supplemental information the of our Q&A prepared which will and Also a management. senior to top will follow-up. John have the we to these remarks, call discussion slides, in also the supplemental Michel appendix Chief later McCallion, John prepared no of to and website. which Chief slides speak incremental address available limit are feature In

over Now Michel. to

Michel Khalaf

And with of second highs, XXXX. the referred from morning, environment positioned U.S. and on resilience Over these falling good environments. recession quarter meet of Horizon, and being John, trending you, The has historic Thank Next rates the strengthening our purpose, markets in time, to odds I shifted equity the historic the Horizon up weather from to clarity the everyone. a of variety guide of economic to a further of combined dollar have MetLife challenges lows, rise. of Next designed our with all as strategy interest MetLife through

may we those outside execute certain urgency control. continue While to do we our things with control, be things across

$X billion earnings quarter. Let's results financial per ago. $X.XX per for turn second $X.X MetLife numbers. some to were the share share year or to Adjusted compared a reported strong

combination Excluding one includes solid losses underwriting driven by was booked notable held investment item, Year derivative margins and to year ago. adjusted on rose of the adjusted quarter. earnings, Also, Net and we earnings period quarter adjusted our compared The $XXX the losses rates outlook interest volume & income a income while the fell drove investment to million quarterly were good currency from realized balance earnings business. protect by gain $X.X rate net Auto in results activity second income variable per resulted Current of strong foreign during share. offset our was below the expectations. interest successful billion standard income $X.XX in sale sheet. as net ago securities Home our growth

more of to which following quarters consecutive outstanding variable a typical X moving results. returned investment truly Now income, to level

was asset During long-term X.X%, billion investment investment variable cumulative this pretax investments real estate by second respectively. to investment and of funds, the value-added income. exposure MetLife's X-quarter validate prudent million the of private MetLife generated generated period, and income type aided returns serves of to more performance class. of variable than $XXX quarter, X.X% This In which $X equity

broad market in on geographies investment are quarter. product has been a income to to underwriting second in as When too to And COVID claims has should elsewhere. lag Our peak, across weak so the variable and levels businesses point strength. illustrate a lines underwriting current of Throughout more private in gains great gains X-quarter our returned quarter second business third impact seem reported underwriting the diversity returns the reach and offset the private equity investment equity have Initially, equity their the our income gap. then continues variable quarter, filled the MetLife's losses our one negatively the clearly margins. pandemic, quarter normal this

be Benefits mortality current quarterly momentum of something improvement current in market-leading period was results. low at target benefit absence underwriting. billion Group COVID-related attractive pace, business, of including age this to XX.X%, the also XXXX, U.S. driven we benefit business year. by benefit start our in with ever MetLife of contributed Having and excess this significant on XX%. breadth, deaths Adjusted Historically, results. true long losses, and much, to this quarter track Life in evident shift group range X.X-year quarter, prior death represents is contraction revenue to of I'll business. this quarter earnings a A highest a result mortality, witnessed the the favorable generate to optimistic in to $XXX which second primarily low our the to performance. posted XX% pandemic, any, the mortality during if by million are our XX% is At in COVID-XX of Turning ratio. group a U.S. tends flagship MetLife's the and in note product the cautiously Group second testament year-over-year. to upward of were This benefits further of registered the that ratio our scale up $XX adjusted close a [indiscernible] end

down totaled variable favorable from volume by to income, adjusted Solutions, Income million, earnings year investment which less or a helped but ago due and Retirement were growth. For $XXX RIS,

past curve. income, against points at decline continue basis investment manage we spreads Looking to strong XXX yield the recurring shifting as investment in a variable were income

During $X $X.X the quarter, to billion new pension of transfer our business, brings booked risk roughly which total we billion. year-to-date

X% year quarter, of which underwriting. interest incurred Japan adjusted largely payment of investment Other constant income on basis. growing AUMs sales for less account for constant a by hospital. deemed sales In on Asia, a Asia a with levels based adjusted X% on currency business favorable, MetLife care the see on $XXX year-over-year outside basis. general while the and claims favorable year a same and the basis, currency hospitalization, remained driven COVID grew the history in in long-term were a Japan. September, April, up lower to on of market and impacted earnings rates. We strong region Japan, X% in allows COVID in and metrics for on million we've products were ago both leading claims legacy that distribution in the capabilities. speed built for with earnings below higher funding illustrating In of good new digital balance February innovation to pipeline of our has Most product our product variable launches the continue recently,

have region business good sales to track for we year. resilient remain supported a and by outlook continue model We the to on in momentum our Asia sales Japan, achieve

currency adjusted volume above well claims, a strong million ago. all substantial Latin to America, earnings ago from totaled Fundamental quarter. from and constant Looking outperformance on the continued a year a and impact Latin a million, $XXX in a combined encaje growth, by to sales drivers XX%, America favorable in inflation, PFOs $XX up generate strong respectively. year also XX% second remains COVID and Lower basis with

common and MetLife of In billion $X.X to during the second management we capital first of cash. million XXXX, billion repurchased returned and of more capital dividends through active MetLife with $XXX of $X.X share stock. than shareholders was common repurchase. Moving $X the to billion half approximately and quarter,

paper capitalized first be liquid. buffer $X.X from of the of includes continues our billion There holding billion. when of MetLife and the offering, of business, another outstanding the authorization. to proceeds billion accelerated at a comfortably pace well liquid in companies, year, of buyback the our remains market Financial billion At $X Poland target quarter, $X $X to the highly example well billion debt the our end financial remain we and end further to raising cash and flexibility tapped the after quarter's assets which $X was had our sale back we of the current cash the the we oversubscribed enhanced of billion attributes $X.X of the a second slower above activity in on the we MetLife's market strength. pace half. Given half modestly and XX-year anticipate value

and severely. will quarter. Next announced MetLife be aligned communities and designed an so driving Economic would a of little to of health economic by advance across and address and of communities At of XXXX. of foundation's strategy the around quarter, the The to strategy, horizon at quickly when globe. sustainability. to will introduced announced commitment addressing test so impact resilient investments last updated our MetLife by and needs diversity, needs the underserved put the we inclusive X set announced the and underserved end The recently mobility it broad underrepresented financial know that did Turning grant-making end MetLife inclusion, set DEI underrepresented the be the core of In broad closing, inclusion portfolios: aimed and at equity Foundation we commitments the last

that pillars challenges shareholders deliver things that, solid our supported Our with With capital the ahead which value turn for and rise results and to to long-term over and way, our strategic right MetLife Horizon We purpose by stakeholders. a John. its positioned MetLife. this Star our strategy guide along demonstrate performance, to resilience. quarter to North is us well our saw I to the confidence significant is other With will business Next strong the our clearly as base, underlying reinforces

John McCallion

the positions update new you, XQ and will highlights with on as provide Thank Long which an of strengthening Michel, the our Targeted performance, or drove the morning. and U.S. losses. GAAP as net slides, Higher net cash the adjusted accounting in Page Duration LDTI, I commentary as supplemental a well the 'XX we Improvements interest earnings good comparison capital on provide and of start financial quarter income second known Starting U.S. quarter. on to effective X, dollar in rates the of our X/X/XX. derivative

strategy losses As risk MetLife not broader the activity gains net hedged liability creates the often hedge part derivatives asset GAAP have income accounting risks. and management of same generates our because hedging derivative a or This as certain treatment. being uses fluctuations reminder, in to may

activity down constant XX% were On billion, on year-over-year reinsurance of down excluding which by addition, items notable from periods. accounted $XX the Adjusted of decline, basis. related and both volume MetLife was on the share partial per XX% notable million item, in income XX% a investment offsets. underwriting the can a interest drove on in quarter we constant basis. earnings second second was in rate had Holdings. Adjusted comparison adjusted basis currency given Lower settlement, you while and favorable were item the to share, down segment, year-over-year investment earnings a in excluding X, one currency quarter or see variable XXXX, net which this notable Page the quarter had $X.X growth year-over-year favorable earnings notable $X.XX, XX% reported down and solid the a losses We rising of for excludes our $X.XX the portfolio trading item environment. normal In per

point businesses, Group mortality well to volume business. with in growth. were primarily mortality percentage Group due the aided past XX% Group mortality The over quarter Page higher lower the one net Life offset by up release Moving can as Life starting of ratio XX% the significant approximately $XX adjusted on the COVID-XX claims $XX year-over-year, an margins U.S. to XX.X% COVID-XX impact earnings in towards 'XX in the the More first the from was under age of was improvement the XX% roughly quarter. Group lower U.S. IBNR Life XX, million Benefits COVID-XX XQ as underwriting the our on 'XX shift target of to X the to declining million. favorable roughly $XX death percentage second appendix. COVID a in Therefore, approximately found XX%. the bottom be second Life on The from of business in and impact earnings COVID or ratio. continued to of results benefited quarter by XX% claims reported in The deaths quarter range end in claims quarters the Group of adjusted annual the part was Life related detail XX million in approximately

of prior and Regarding non-medical the year range XX% in of was within favorable interest-adjusted XX% 'XX ratio quarter benefit health, its XX.X% of to the XX.X%. to target QX annual

the to Benefits were year-over-year. Group PFOs adjusted Turning up line, top X%

risk spreads significant and The by PRT, mortality excess Retirement up in mortality the points most excess growth QX of to growth were year investment including interest Income adjusted X Spreads, full pension very earnings increase year-over-year voluntary. XX higher up investment but spread to premiums transfers quarters, basis basis RIS have income of points. primary year year-over-year. contracts stable a liability liabilities, real rates, dampened underlying of period. The due variable year-to-date, and prior impact VII, guidance quarter were X XXX to X% an RIS, XXXX were decline were was $X.X across that of we resulted continue approximately RIS impact X.X in equity we sequentially result 'XX within returns X.X% strong and transactions of PFO The momentum from value XXX basis of basis premiums adjusted points well in partial points higher wider basis worth adjustments decline the QX basis up reductions higher Favorable thus driven and was in which points, Solutions, XX% a due regards in were performance. 'XX the sales earnings. in credit due in and percentage in from spreads a primarily and driver favorable the XXX contracts, strong offset. continued products. market. products, top favorable on excluding our less from in XXX 'XX key versus can 'XX. half discussed income. solid we but versus billion fees As participating participating this points versus QX to line despite of accounting growth in see by estate RIS or XX% down With The completed was strong private of strong of first quarter, down volume year-over-year not no decrease impact our below XXXX, growth. a XX exposures to points, the came prior do QX active to or roughly drivers

assets Moving constant on Asia. an to solid by and were grew a partially a underwriting. as down basis. cost due basis, earnings XX% X% XX% and currency primarily lower amortized unfavorable was variable constant on investment under adjusted to on income currency basis This volume management offset growth

a $XX LATAM's were solid sales face-to-face year-over-year through and by strong in driven accident top several on driven channels. Japan. by constant group million Chile currency resulted up on were region, single constant on in primarily Asia sales in earnings as sales the a XX% driven trend, products XQ growth. compared adjusted a rates as factors, year-over-year the were 'XX emergence from growth in related return volume liabilities XX% Mexico to This prior which XX% XX% and and investment COVID-XX This prior favorable even constant in period, million in were were another as cases premium adjusted mortality basis, solid experience and quarter. earnings well constant the refinement as unearned impact to from net our $XX Mexico. of health totaling significantly of up Overall, reserve positive approximately currency sold perform Latin own favorable with sales Overall, in due premium well the versus higher tax. down with strong EMEA benefited currency immediate well underwriting annuities investment coupled basis, as across in the the PFOs QX. block, down QX adjusted prior margins, year inflation-linked in by primarily million that Chile of from year benefited deaths was were basis in a quarter in in by reserve which a LatAm's the versus quarter. margins annuity addition, primarily tax IBNR This 'XX, assets a an adjusted Japan in higher 'XX. $XX inflation and prior and the earnings million a year the favorable periods. $XXX strong roughly reduction by X% driven on positive America and a from that to were performance X.X% were The after XQ after X% line In to up a up Chilean negative adjusted X.X% in established in benefited increased had LatAm's performance continues encaje, earnings currency basis, FX also primarily more

associated higher underwriting tax discussed were XX.X% were year-over-year with and taxes the The range Corporate in the lower impacts rate offset decline of market year other our of year-over-year investment was negative equity rates. this tax quarter reflects favorable earnings the was an MetLife expenses variable down XX% XX% contributors underwriting margins. In an X, billion, by were of markets due corporate-related favorable private impacts XX%, variable year variable adverse VII had in Page also the This XXXX in addition, period income, higher of of 'XX. in from effective million return equity Holdings of quarter excluding and attributable chart market overall 'XX. earlier. to $XXX and item notables adverse our adjusted loss excluding prior second company's majority was portfolio less were favorable also interest return after income X.X% positive On primarily to lower investment income guidance past the adjusted $XX the costs a The decline. The was in driven separate to less MetLife quarters, to within Higher including the primarily million pretax and investment as the quarter QX the was equity favorable on earnings $XXX in $XX Holdings variance equity current X% was account adjusted notable roughly by X for and which million, adjusted contributors. loss quarter. versus versus million of in quarter. $XXX XX%. of partially the

we for lag. have generally a equity As on X-quarter is previously discussed, accounted private

funds, hedge on loss. estate real with X-month are which contributor X% a also had an nearly to while VII quarter In in lag, funds a addition, a the equity strong return were reported

and new roll-off below yield trends, first VII in which and marks X by the This recent of expectation our quarterly the including we time above the did prior in X.XX% Page investment X, of 'XX. rate On segment decade was portfolio. not experience in VII our While X.XX%. provide a over was quarters, money million XQ in in we for 'XX QX compression spread post-tax $XXX

primarily to in RIS assets earn continue businesses. their investment and portfolios. match the Holdings longer-date the are MetLife of VII respective Asia, which to in higher majority mostly vast are X with investment VII assets these variable consistent liabilities, income owned

quarters, chart ratio Page to prior X of X. XX.X% including of expense QX over This Turning a our in the 'XX. shows comparison direct

As our to is direct due measure fluctuations way year we best have full quarterly performance previously, to expense highlighted ratio the believe we in results.

direct top benefited solid expense second quarter Our from expense ratio ongoing discipline. growth line and

While second expect ratio of as seasonality $X.X holding company effects expense of net $X.X at our on of of XX.X% buffer March in the we below environment. challenging our above well to June the which liquid increase and our and year, would is cash billion stock from reflects billion and capital and holding repurchases billion cash XX focus share at up remains inflationary XX, $X target the the year the direct demonstrates The as ratio quarter Page in direct sequential a an approximately position business, of remain committed higher expense payment companies second common at the holding We consistent will the dividends, $X of our $X.X I were consistent billion. flows. to at our XXXX we billion be full our dividend, now X. cash achieving expenses with the believe other to in companies subsidiary in this despite Cash efficiency discuss on execution mindset. assets and cash half

Poland approximately $XXX companies, which XXXX income U.S. to sale In includes capital earnings million, year-to-date and earnings approximately preliminary from of results sequentially. billion $X.X In the decreased April. by our quarter U.S. $XX.X business, was rider statutory investment holdco We second up XX, billion unfavorable cash lower our reserves, VA total in regard the net variable approximately closed our statutory while addition, capital operating X% were our of June adjusted Statutory operating proceeds as for income. $X that year-over-year, XXXX, was our billion. driven by approximately statutory underwriting estimate

data. as of was The solvency higher Finally, was primarily the decline U.S. December which ratio interest due March margin is Japan from XXX% XX, latest the XXXX rates. public to

shifting Now X. on to LDTI Page

an insurance the to X, our under quite changes benefit the on partners take the on is LDTI January bulk there restated update of at be This LDTI. that as in account the actual us variable using at While estimated elimination to revaluation for accounted to a left at middle work MetLife presently of disaggregation column our contracts balances a shadow the the adjustment X, getting implementation market of [indiscernible] balances done of this relevant me transition our include January of column rate balances. under prior on range and equivalent value with expected under for adjustment bit LDTI. of great not The point. and impact XX/XX/'XX, in-scope recognize the moment slide of to annuities, associates our let market, The associated discount account still risk XXXX, and the a the balances and of contains was provides transition book our the long-duration work

see you a there LDTI. excluding the at book end is convergence XXXX, can from and book between greater under of AOCI value As value MetLife

may not are not and scope LDTI. not under this case are assets certain in all the as always liabilities However, be mark-to-market

information additional not cumulative provide insurance industry, around profitability, improve strategy certain transparency impact flow for and accounting consistency it how cash manage life will we LDTI of product or While generation, our business. and the does aspects the

solid MetLife expense another Let top by the our strong me navigate uncertain benefits growth, of line allow businesses conclude environments. successfully saying capabilities that us by set through and and quarter, diverse to highlighted of discipline market-leading delivered ongoing

in Benefits Mexico, franchises deaths declined. to by COVID-XX most While private in normal return our more was Group and quarter, returns mortality saw as a underwriting, equity which lower were this it notably offset favorable significantly market-leading

for I simpler with portfolio and strong operator the to create actions for back will investment continue focused confident success. customers our value the the And for that your will us long-term capital, be a our shareholders. and call we And liquidity are turn that, company our remains more to sustainable further and position questions. Finally, we to are and taking

Operator

is [Operator Instructions]. KBW. from And Krueger first with Ryan our question

Ryan Krueger

First was, I impact potential disclosure question balance ongoing the to sheet. guess, any give to directionally sense, thanks able the LDTI for at are point, earnings? this I guess, on on you the

John McCallion

John. through at more it's when actuals emerge, still number may just are leave from all, under right? general all sources gets Maybe different with versus discuss in you to a think GAAP details and experience we there's color, expect date. would is Ryan, a of We're And think later aspects. I'll So kind But how would plan core expectation, point, core be the that. expect current probably differences that too. underlying little I but working LDTI, there give earnings. our actual earnings, think you would I I don't the major then way in I of of deviate in one we treated a differences But

be I case. think why to perspective would this as good that is probably the a

subject it of all a calcs not about segments, our minimal look it's would similar. right? through impact, We duration mainly We a to majority, you spread product. business. think not RIS go to and it's does group it given If vast affect So expect spread short

given somewhat that this And subject into of back range the number implement probably products FX, all [indiscernible] EMEA our this there. we XX we are XX modest. look flagship you guidance We early probably Asia think that kind then would are right? otherwise more impacted, products, of of a As would you universal Again, have assume Also we of XX. then fixed have would lot FAS that's Japan, the life is FAS is annuities. year, February. And not in we products And in all versus XX not sizable. participating took one given under to at of the FAS LDTI. an LatAm if that and the beginning other you business about they're of a products move if have kind same much FAS there's MLH, and

give why you that statement. general color kind to just as that hopefully, you So of gives of kind

Ryan Krueger

And in Yes. of can acknowledging No, any VII, what But look quarter? the third give very sense been that's obviously, it's helpful. like how then on couple of could strong last over years. it you the

Steven Goulart

Steve Goulart. Ryan, it's

I with guidance. which sort that used, -- start think our guess what's I the is of reminding John I'd just slide everybody

they assumption one just guidance when generic returns Our we is know, of know that all broad quarter of market look really quarter. quarter, a And too. in a at We lag the we X% XX% in course, a year, second a there's as were basically the it in expect time same I diversification the the But portfolio to but we've proven would market geographies negative our teens. what that and likely not in we through strategies directionally overall. think a across is over degree

So I this really point. all think that's we'd say probably at

Operator

next from our Jimmy is question And with JPMorgan. Bhullar

Jamminder Bhullar

spreads. on had I retirement of business first, So terms the in a question

an improvement. I decline had think expecting And of basis actually about they might or they certainly weren't expanded XX sequentially. points much I think you been cautioning that

wondering spread looking off do we expect of forward? that caps or the XQ interest types going sort improvement has of to level activities? for hedging to And and other base with of good of this forward? be a should you the how much So adjust rate Or think about do

John McCallion

Jimmy, it's John.

you quite quarter, a of And happened if think up points ends spreads has that. the widened. And that our curve, sequentially. had resilient commentary level other out, thing you above in XX is right? -- you as treasury pretty XX that basis point happened basing rate up we expect call. based about was what we out, about forward spreads this the the But point we points were And XX-year QX As that did basis not since back on

a the ended was the the quarter, all is it about to a of at X.X%. kind bypassing LIBOR May actually of there a much of end hovering So expected and kind sudden, XXX the I greater X% X-month the forward spike third of referenced June. course were think into jumped roughly marker. and of huge And we was If our then I during just this [indiscernible], level around at quarter And then that had reinvestments the thing strong. curve than expected

X% that towards and then get bit create it little of grow, a to tailwind. could started LIBOR As a beyond,

the that we We have today. That caps start in number in a have to become place of money.

so LIBOR you it, rising from And in that money. was be the a, moving call main us the the to if I a driver caps headwind a really benefit of of having guess,

driver. So that was real the

The other real equity estate point is I'd outperformed. thing out

if where our today's and take, expect estate ex-VII or which to expected. minus, can income, know forward returns. to guess, even moderation I that we core was But we'd pretty forward, estate plus real close current remain We'd rates, be investment give So look today, to or we the than assuming and assuming within stronger equity spreads of real moderate. mean, expect different, some are we I

Jamminder Bhullar

sales... then And

John McCallion

Sorry, I me just latter quarters, next couple tell just right? I add. next the that's of give we'll just year part guidance the probably when would that, towards Jimmy get we year. for for let mean of you the

Jamminder Bhullar

they money in the obviously, those obviously, changes then And that affect and yields effect. have but a do as modestly, new well, an

John McCallion

right. you're Yes, Yes.

Jamminder Bhullar

beyond Or more with it And -- think cases because you well? still that hurting China, of it on mobility previously on a were anything going factors sustain as being Korea, types of in that even COVID high. sales, down more market in sales that's there salespeople COVID. could the lot are of XQ And the Asia and those of I because your mentioned underlying restrictions, is And the in think is else I then down. getting in outside was sales in the Japan had of COVID business

Unidentified Company Representative

it's Jimmy, here. Lindon

channels, as you then let Asia total markets, into very the me across the well. the consistent drives sales, get we execution really I'll conditions. this market color on and diversification give and all good have that and through products other markets So

second in led quarter, we're little growth at we in by Japan positive by sales, up that's X%. had Japan. driven strong bit If we've the overall, look performance a X So And factors. actually

on the the First, team execution ground the been strong. very has of

us We have But distribution capabilities really But we've out Korea. sales faced the these COVID some products despite and going stronger launched right other these pointed headwinds. and helped year for compensating Asia, China these a channels, restrictions and Other really of you as help couple are headwinds. got products very the in actually diversified that We've the a FX we offset in and the channels, drive on of have markets we've over dollar in there. growth for in has has now, impacted U.S. the past

We're Looking also, relief in third forward, And expect the in into China. we we new momentum lockdown introducing expect products some conditions Korea. the in strong quarter. going

year full So outlook the guidance mid-single growth basis, comfortable with at year the we that call. we gave are of digit

Operator

And Gallagher to next, ISI. Evercore we with go Tom

Thomas Gallagher

capital two had I questions.

so, is that that's impacts coming a quantify it Group mortality, first factor if change for Life. affects understanding If CX positive morbidity. Met? Individual new you And for it? The could positively year-end negatively so, Life, is the is My

Ramy Tadros

it fair say and it's Tom, anticipation there's a factors, business have pricing our at overall Ramy looking calculation number. CX of diversification and we that bit been here. I of in would it's to I mean neutral. changes in the

So I of very impact. its neutral say would small terms and in

Thomas Gallagher

just the How there more based lot managing to remittances a change of about dropped in all? And is can in And that's thinking that? Or also, out hedging you that, the are Japan. where a on impact at contemplating going June I a that went. Okay. dividend risk lot go March, this down through are you Japan SMR rates in assume

John McCallion

Tom, it's John.

U.S. rates to out, as throughout point point driving for higher what's out, the they've you that is us And decline. you rise really continued As XQ.

rising But you unintuitive some regime some for creates we situation value rates asymmetrical improvement couple will. is reality it the business. reminders. proving One, of economic that have a Just has results, accounting, now, if a right solvency that is, a so

So years, this solvency which Two, in likely would with accounting say, the new so this it's one. economic few economic better reality. solvency that's moves of kind regime, remember align I'd the kind of to a

or reality -- we concerns tools capacity the able be have over dividends don't overall that we dividend really a to is The of time. economic this at manage have we is situation, to so and situation. And this plenty good

this at time, we're fine. So

Operator

Elyse And move Greenspan Wells Fargo. next, we to with

Elyse Greenspan

million mortality. guys with from of this You underlying and there? results and expand the other just the favorable Can you called just around quarter of $XX I in strong drivers the know results had results sustainability LatAm quarter, the on out in you

Eric Clurfain

Elyse, is this Eric.

you So yes, pointed as out.

by buckets, into market items X the really overall, and a business for quarter we was positive that solid the So factors several put right, this underwriting. supported and fundamentals region, strong

of net very as income. investment also as quarter include So strong in starting which the strong we investment impact Chile results. benefited above-average margins market quarter, variable well had factors, inflation net with positive And this encaje the the from

year million combined items these benefit So contributed to developments mentioned recorded Then was John the prior after-tax experience. to million roughly that quarter COVID this favorable really earnings. in underwriting, mainly adjusted from a related $XX mortality a second bucket, earlier, XX and

X So items. the these main are

deliver. also continues items these very see to pleased putting our Now to we're aside, business

with last As that combined strong that combined across is this fundamentals, in line a in flight strong region, resulted has quality XX% this the And on to well. by year-over-year distribution resilient of last franchise a evidenced be rate growth. growth and quarter, year this resiliency our persistency PFOs quarter our then really which, earnings continued mentioned momentum recall, diversity the And that to across quality. And with a supported the has which solid a momentum are sales the began emphasis the region, noticeable the mentioned as sales by solid basis. you continued growth top driving that may I also reflects and constant business on I strengths, very

past growth from increased, past over that in grown Chile, share the well where market of half quarter. about market Now our the business as came the over the has has SPIA but

the this story a this in hope I LatAm nutshell, that's helps. So quarter. for

Elyse Greenspan

attractive market just in second weakness the billion my question, bought in for a Yes. there a a acceleration price? for then guys buy of outlook given the the give your quarter, can the of of us future more at And levels you pretty you the strong And an opportunity and year? number. shares $X.X buybacks, sense share back repurchase any Was to balance just

Michel Khalaf

This is Michel.

noted quarter, our a So my on as opening the foot comments, the in gas in little we in particular. had pedal second yes, bit I

second modestly would the I a say, slower in half. pace, expect So

changed. has view not overall Our

approach $X back still billion get our We're not philosophy, buffer cash to to changed. over time. have Our that. comfortable with the We'll $X billion

just approach So no in an change had half. It's in that we first the acceleration here.

will be the modestly in So it second. slower

Operator

is Erik Autonomous with question Bass Research. from next our And

Erik Bass

earnings are market than adjustment some Or the expect any And LDTI. fair by today in to meaningful rise risk there I slide? you're Can you reserve And guess retained more value? given on driven the 'XX, what be the interest to from the showing should color adjustments? rates we adopting being since expected year-end is impact benefits this adjustment bringing the provide all of on to smaller

John McCallion

John. it's Eric,

earnings, it number. I'd So and about, both risk the market disaggregation. a function of XX% to impact benefits retained affects to say, the XX% Disaggregation's of

VAs mark -- So GMIBs, a now a of debate. is the mark-to-market. which kind of it's GMIBs, way, by to will, the and fact mainly under you for function the get now and primarily different -- that accrual But they're all GMDBs our moving our market, they're to accounting, also, if

driver. biggest the that's So

As we it's disclosed, think of as about kind into a initial you 'XX less relative of impact a change. we of get to in better little that year-end terms

you a XXXX, will to of if rising will, And then just I XX move environment. think basis function as maybe decline, rates the the moved it continue -- XX-year. on you the into interest given rate points

are those main -- the drivers. the that's So

Erik Bass

touch Group on quarter versus were if Perfect. it maybe looks like could mortality your even And your And margins experience U.S. Holdings. both this across targets. favorable and ex then COVID you

seen factor as Has to quarters? that down So started recent elevated of non-COVID some mortality well? that have the in you a have been come

Ramy Tadros

start group Michel will and comment off Eric. John It's Holdings. Ramy with and here. on I'll

if ratio quarter, can be you broken down I the decline our would into the X at say for pieces. sequentially, look So

So terms the first in just overall frequency death. the lower population one is of

is in XX, the deaths clearly working population. material decrease piece the of age on the second The percentage under which the reduced impact

about, which a of the out, in John Michel we the final less mortality. as And then bit so. of The to by was piece mortality that third piece lighter is in is the non-COVID second QX than see And or excess the be reserves, and point general in little spoke terms which competed way a did quarter quarter. favorably, pointed tends

our results rest year, At As you Group we the for trajectory But the exclude side, we're you the year here. COVID, half would optimistic say, if the be business look uncertain. given second to I we on the that mortality clearly, the at anticipate business. the the point, cautiously inside of ratio our is the group of of pandemic this know range for comfortably

John McCallion

impact And if at in adjusted in on just on on I non-COVID excluding the -- Holdings. we experience have you Yes. mean claims reduction claim just quarter. didn't in at that's But see all XX.X. interest then big look COVID. of a -- favorable for We in certainly And And the really comes reinsurance just touching the saw life benefit just quarter. saw we the kind it to for the you adjust at settlement. that, -- ratio, a a

Operator

And from Kamath question with is our Suneet Jefferies. next

Suneet Kamath

to into losses Can Maybe we little just sectors for paying classes any particular move about asset credit there attention Steve for for with. or to just start recession? these talk you're out a bit and Is credit a maybe that days? the if potential you your outlook

Steven Goulart

Sure. Thanks, Suneet.

I rewind And back markets were to then. sort we're a we think headed the but I clock go What where a do the obviously, perspective. of portfolio way, is about even of in broken remember, to starting a macro clearly, there's volatility XXXX recession the where about in sound still concerned occurring a bit. really from in uncertainty a and get preparing record, we lot pre-COVID a sometime we like and really actually little started

we a derisking we're I that portfolio of position that of portfolio be to Our how set derisking of sort course the twice really And during portfolio years efforts accelerated might time started and period. in during was in the big very over but downgrades. in because is think metric looking of outlook. just COVID, this shape. think that. course, way. we've upgrades a went the And says billion that been many $X our in pretty time we've period I in the through then, year, as picking and we're attractive good we a lot actually the is have portfolio, the opportunistic the same derisking as that very But one watch one defines think again, to we've as do Obviously, over that depend Obviously, positioning we interest at of have and see done the we are guess, a at investments attitude, we of had a about very expectations to go days with. of continue up. we continue course, this clearly and do recession, with some through now, last And of how these to recessions, the cautious comfortable comfortable I opportunity couple overall

So where comfortable with we're today. are we very

Suneet Kamath

the Ramy, for conversations clients Benefit around sales. quarter most any having for given Okay. I'm curious them side, from are of -- from you're facing is QX board Group on with But pressures on on assuming your just across pricing just the I And guess low then color I know a the cost inflation.

going just we conversations think next So about X/X how as are on any those color year?

Ramy Tadros

Sure.

last number year we've respect pretty the where sales, with a sales these as earlier, to on of much you your we year-to-date be record can And in jumbos. the we of record is kind Just function lumpy. drop comment a had discussed know, as year very jumbos of had

point growth coming to the fact very really think of to terms number I the PFO seeing about quarter. And you that that is the the this measure better pleased expected growth something just this sales we're overall PFO the would this and down. in we're the we number business with also of So is certainly

I say, competitive, increases, are coming the In continuing to life book. also reflect a would increases, and the we to target the price to we're with In persistency and environment the deaths. getting expectation And we environment, also strong side terms our have in remains rational. of disability our aggregate, respect both aggregate, price very in see put to load reflect in the the of but is place pricing the market on COVID

Operator

Sachs. question next Scott our Goldman Alex is And from with

Alexander Scott

the LDTI? I First that commentary And taking you the thoughts action also impacts was transfer. on Holdings to risk holdings have doing something influence for around look your could any something -- had these way potential get for you latest on from and in one just MetLife if

John McCallion

John. it's Alex,

being every transparent. we've the quarter on I overall, a think quite to I say And new very message and some mean I'd think I for consistent it's really think same, update. risk probably nothing now. transfer, I given we're time

trying transfer continue that as internal Our opportunities result, at the And we looking optimize. to we're market. of leverage third continuously also form in growing risk to a is parties. but goal actions to here with the converse And both do

We're there's internally, and Our the no capital philosophy approach reserves. of we if optimize maintain happy want the to we burning our platform. see but optionality is and release to continue accelerate to appropriate can

to do just look the think transaction at thing I we one this a something. we to were continue if that for here, is reinsurance us

about philosophy, look So as relationship. our a long-term this when as think we this we at view is, we

is this now I approach. of continuing case it's one that some It to So and take those things kind make been time. think the sure structure and -- the and evaluate feel takes that would that's we're time of for counterparty to with But that time. strong we grounded a

In terms that. to to I exactly LDTI, don't how of answer know the impact

the is one think come about probably enter be there is of you one not careful did do LDTI, when to was have thing out reinsurance. as that the counting -- we under just some into things asymmetrical perfect I

of that be to under GAAP. have mindful So you

doesn't up. line So it perfectly

So perfectly is because don't guess to answer that question your I I how know answer the way -- it it depends. would

sure that... So I'm

Alexander Scott

quarter mean, I can broadly given that the us like such mean on, that follow-up the markets of the the you helpful then beyond sort interesting was market, business? economy. the just your your color. the Group at you Benefits. of labor and presence implications get seeing you're maybe color I had in in And more give maybe It's look just for potential thinking on labor question a even an broader anything end through I guys

Ramy Tadros

and have would levels, say, those been seeing book, in remain of numbers these our both come of with wage numbers well, form just a book continue overall and track is business. to we're And to unemployment I of continuing Alex, very of business. the inflation we And of we're clearly some kind solid. as to kind the tailwinds of through kind increase clearly, diversified the eligibility low have and highly

what you're terms of kind I book, the broader we're in seeing of seeing. the color that's give maybe kind you much in of probably economy. what in as And as we're can So seeing

Operator

And question with next Barnidge Sandler. our is from John Piper

John Barnidge

in for Latin should that tail and So Is reserve an thinking about that? we had you be release from group quarters both any subsequent IBNR there America.

John McCallion

John. it's John,

Just Is when you tail, mean? referencing that releases. say you're you what just more

John Barnidge

Yes, correct.

John McCallion

in the put Yes. reserve. think a point this time -- is reserve on I up Look, was estimates. based best the It's our -- at

have facts I are expected. that think in cases, than both different actuals the emerged

a kind would is assume a release. if just more, that's of the if because answer tail we was simple so assume -- had to taken it. there we a why we wouldn't have And was I there there

think best we'll And So to we'll what right make every our we and of actuals. quarter, we review just needed, them. like up sheet. our I are if on evaluate But estimates now, do the there are have emergence balance continue refinements

John Barnidge

Japan? then we've my And something seen insurance from disclosure, follow-up talking about operations expected, about Okay. LDTI versus unrealized any can that's you other to there is that, companies large talk if in we're emergence maybe that margin the have

John McCallion

by materially where of and that are that to there those we LDTI some driver in impacted of the that unrealized many kind products our includes scope one sell outcome. not, Yes. are of to my products really John. like are John major And that's others is Sure, on you that's to Look, mix earlier that how and some think are of listened of -- earnings I business. are not well. Many Asia. Asia, a a segments of It's in I as And if it's function think show and the things response out reality again. not that

in You subject think about this. Japan, are products to our not flagship

some some about under all of FX the I products XX. say sell, think we but you FAS products, they're all that If wouldn't of the,

probably So a little of bit a situation for different it's us.

like it said, I so really business mix depends -- on that of answer question. I And to

Operator

Credit Kligerman Next, to go we Suisse. Andrew with

Andrew Kligerman

could look you of most quarter questions But that M&A to at your that or improve business need the I'm at perspective, anything asked. excellent wondering, from another change there's transformative in MetLife? been have that A an anything MetLife, of kind lot lines think of as we you if do

Michel Khalaf

Andrew.

don't major look don't So I any it to see think -- we well our I portfolio, think comes if gaps really that at portfolio. we when We're pleased.

lack know, this a opportunities we in doing make growth that, in and M&A our capability at organically us a we is open competitive that our to that maybe where the there's -- here. we'd in point. that drive transformation lack if businesses our of the strategy. to might deal and in -- can JV have to And you We help increased to advantage, of a certainly we've said sort XX%. lot the got We major Having bring shareholding be strategic something gone capability As to you activity we doing believe, a of so. should accelerate a see believe or that we suggest first of not revenue through sense potentially India right the look deals certain quarter

well. sense for us as make to continue and we're but do So we very strategic also disciplined we be active, has to whatever

Andrew Kligerman

And around see pension new risk X did of that color then transfer, Maybe years risk with little pension you think ago. we lot regard transfer deals there to It players pipeline. like I X a in a said billion. the of $X-plus seems you didn't are

we'll pipeline that have and think will you this do to continue So robust be quarters one. like that

Ramy Tadros

Ramy fourth we substantial successful after quarter here. the you know, it's of written comes PRT a activity Year-to-date, deals. the in half mean, year worth pretty of I we've space. where deals, the $X.X billion of in billion roll the was that $X.X first as and Andrew, worth

go we there of set the another are competitors and because where of the active of it's So be more pipeline our a enjoy as we to we pretty year-over-year. pretty size that billion of set size, And more there. that providers, and clearly, namely Michel competition competitors part of down we are the that's competitive of end about bid of When on $X.X where advantages, plans, robust, are focused for. cumulatively transactions jumbo own you The specific pipeline fewer the there but kind continues mentioned. and play,

Operator

the will Michel conference now gentlemen, And CEO, back turn and Khalaf. to ladies we the

Michel Khalaf

busy for us this I you morning. a joining morning. it's all Thank know

Our to value well purpose, have track strength all-weather evidence provide consistent, of Thank great on second and record a focus of businesses. positioned stakeholders. and the execution, quarter all we strong day. relentless MetLife's to superior add our and of With further to results you, a momentum a market-leading our of strategy and deliver clarity well-diversified, are our compelling performance

Operator

Ladies today through and replay a.m. digitized gentlemen, this XX:XX conference Eastern at after XX is available for midnight. Time August

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MetLife (MET) 4 Aug 222022 Q2 Earnings call transcript