- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Third 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 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. ahead. go Please

John Hall

on Good remarks released available you for operator. begin, along. other We you release follow non-GAAP appreciate reconciliations refer metlife.com, portion appendix supplemental on of Thank and our in third morning, quarter slides speak all, us earnings wish we measures on information MetLife's to in To of to Investor Q&A a John XXXX joining An Relations available features you yourself of our incremental question have you, one Michel these a the website. and the everyone. McCallion, the earnings you I Chief Executive and are which supplements addressed information on should prepared Chief financial of prepared Last later President Officer. to review. McCallion will set please Presenting After slides follow-up. the the disclosures, you senior it if no in remarks, are our the and fairness night, also one and to Khalaf, John to call other members supplemental quarterly GAAP to we should this discussion to Financial will Also call. hour. end morning quarter. In They those than slides and participate are which which his session, management. limit review. will the top in Officer;

Michel. to on Now

Michel Khalaf

year from in quarter. John first you, the Thank good the Many macroeconomic morning, and persisted the the everyone. half of of trends third

backdrop, to resilience Horizon remains of the rates in more strategy with the Next recession execution possibility in of a fell which we markets interest pleased again, and equity some uncertainty. face its continues are As sight. the prove Against this our of rose

areas believe we going us position well several MetLife forward. there ahead, differentiate and are Looking that

relentless track We record have controlling control. can of factors that execution we on a focused established those

growth, organic offsets tactical acquisitions of supplemented diversified and businesses a through built with divestments. portfolio have by We natural strategic

tools VNB commitment high-teen We value such new as have of responsible the a periods. by growth, mid-single-digit produce aided analytical or payback to powerful to IRRs and of use business

an in capacity our And strong flow efficiency future. provides drives we which the invest management. recurring and to us liquidity and mindset that embedded have with the free consistent We generate DNA clear our supports capital and in cash productivity

Starting quarter review million the share. moderated Last investment Turning a reported other was PFOs per Recurring firm. constant earnings headwind on adjusted impact $XXX to night, of annual third XXXX COVID-XX performance of numbers. basis or discipline and greatest income. actuarial our held strong, whole. earnings. rates were aggregate adjusted some in quarterly on we a and as The rate with included or losses in had which rose, assumption a expense share positive investment variable adjustments per Notable $XX million insurance $X.XX $X.XX quarter items the

from quarter. from adjusted Private items, primarily was million. adjusted as and losses hedges a share. to notable were of loss contributor a to equity a is the In our largest standard variable as VII the X.X% income was quarter, investment well negative losses balance third $XX in sheet return investment the investment activity. we generated earnings in million in billion $XXX $X.XX driven Excluding compared $X.X year the earnings and third quarter Net per ago, lower protect to the by hold income derivative quarter

X reported lag. quarter you our portfolio PE on As a know, is

the market second XX.X% equity difficult quarter S&P Third which measured quarter results private fell the by as reflect XXX. equity

good generated proven our the time to its our we be long-dated by has as properties of for private over strategy equity a substantial good only and liabilities. class but Not provides is driven that ALM policyholders asset for have our in a benefit a match investment Our shareholders. long-dated gains this

quarter, the we As on a in partial new investment rates. saw private income grow higher sequentially recurring offset money to equity

managed below new third rate. as For new This past repeated an rate environment quarter in we exceeded our that where to rate money the greater finally money interest roll-off rate rate. our reversed effectively In effect. our our through the roll-off roughly decade, was the second quarter, even

earnings a well breadth to continue going connect MetLife. and were we've have down ago, extending we $XX.X including high understanding volume with year strong lower duration We already by at new target represents aided XX% RIS, of adjusted be MetLife. business annual end a out mortality, are X to In our to Benefits range investment products. for for an million, of due PFO deepen continues registered across earnings and spreads employees variable thing And $X of billion a made impact a were change billion. growth. Life PRT and pension low to deal to largely of market investments losses, off. in income. and at suite $XXX Retirement Group claims COVID-XX our business, interest the rates, insurance the of which our benefit million Benefiting Broadly we build of we from segments. ratio years, Shifting Income With expect the ever strong our this transfer highlight XX% voluntary paying and voluntary Group rates portfolio strategy This Solutions, winning with of including are is years. from communicate with up all our booked remained recurring opportunity range substantial health annual life of for XXX% investment Year-to-date, to XX% adjusted or decline a to employee largest which of a rising time. in see favorable at needs over end nonmedical good was the our roughly growth strong. also our $XXX our enrollment RIS U.S. Execution ratio XX.X%, underwriting, of in pipeline robust was of double-digit of XX%. annual speaking, roughly saw for risk XX%. quarter higher all-time to responsible to low COVID-XX expand year-over-year. the And across to growth income and The driving target our for product The investment our

of earnings $XXX by adjusted unfavorable earnings such claims effect took largely a the of adjusted investment reduced below income hospitalization on mostly greatly year end ago, in will claims claims $XXX lower variable rules quarter the underwriting. million, Japan. reduce Changes Asia, were which looking driven COVID in and hospitalization eligibility For by million claims to at ahead. September,

new currency and to annual strategy. sales prior Accident element momentum. foreign with had quarter, rising another had constant to I visit & XX% earnings on is a quarter disclosed million, region are ago, up significantly to our customers constant third basis strong basis, an reflecting integral ago, to of for business year Two MetLife's to the America, XX% across annuities on our this with ago. value million responsible year. quarter products. where in we Asia, Latin business Japan strong America $XX sales led on a In basis, the the and were and our currency of the weeks Asia fast-changing from advantage. an adjusted be In witness by our focus nimbleness $XXX continue COVID-impacted partners currency from up On and environment, our growth our bear are a execution. of our region year efforts a competitive engage the pursuit strengthening they for the distribution metrics strong, sustained the totaling that Latin opportunity Health team a meet on our

organic show efforts metrics generate that MetLife As underpins able that responsible more growth. growth been efficiently earlier, VNB The to capital and our mentioned support I over to is to effectively put a work tool has time. to

and in we VNB billion We VNB. $X.X score the to for put XXXX, clear we IRR evaluate billion less think our and example, years later, achieved we a VNB, billion. than and business The we've different opportunities. IRR new are $X.X that MetLife. we $X.X generate is differentiators principal no the billion at of merger discipline to XX% results even employ For capital use acquisition to use a generate deployed at X discipline drive higher of to $X.X more to of capital work,

Investment governance MEMS with growth. social During Further, create the Management for attractive expertise differentiated business transaction this while MetLife will a a of new AIMs definitive investment roughly client billion opportunity $X objective Combining our fundamental and solutions acquire to award-winning announced highlighting quarter, AIM global third as corporate MetLife. with strategic management. Affirmative strategic Management. to and investment capabilities underscores offer ESG manager management capability agreement an for under environmental, and M&A our grow investment assets Investment a is

We stock to third capital. cash and capital dividends $XXX the to during Moving shareholders. MetLife paid be management active quarter. million of common with to continued

capitalized economic cash Horizon of mindset cycles. create Next strong these to responsible $X to well future. highly the the our current turn roughly assets target cash MetLife John. In stakeholders We an Together, billion million through billion. efficiency is and continues shares. $X.X market-leading million $XXX bringing serve common to There across end total ingredients of had the the for return things of set us of the of into our October, capital strategy at times to will generation in quarter MetLife At Holdings repurchased $X our that, of quarter, MetLife are businesses, and now we $X.X above also additional flow guide our shares, billion. all-weather companies. the our changing believe billion our be great liquid shareholders of our value remain We outstanding a range and to billion right ahead. the our buffer cash billion we I comfortably free In and will our strategy We $X our $XXX well liquid. to over closing, on the our With diversification of growth, remains right authorization. repurchased $X.X and

John McCallion

provide our 'XX our global Thank you, performance, Net income of start financial of result to provide Page of in metrics our the which cash good supplemental our a will and Michel net I derivative assumption review, XQ were losses value quarter. on we details of the adjusted of interest Starting earnings and updates slides primarily positions. comparison the on and rates. higher actuarial annual capital X, with business third highlights new morning.

net a hedged to as continues income As certain create treatment. program can fluctuations risks. hedge asset strategy perform the part Overall, of same and liability uses losses have in MetLife or risk hedging This broader generate may gains accounting because to the durative management expected. GAAP being as not the reminder, our hedging activity derivatives

highlights $XX million million and investment in The to given non-adjusted $XX environment. total, adjusted actuarial in adjustments had of a rate on favorable was the trading In of losses Page assumption XQ insurance X addition, $XX from with interest net activity net provides million, other the earnings. our review by a earnings and to rising 'XX, In income we normal the to impact positive impact as other Overall, assumption table impact the of In net breakdown as actuarial a review was life negatively MetLife earnings by annuitizations were fairly by impacted of lapses and the annuity model result impacts by with were favorable rates a of well refinements. business. lower-than-expected earnings favorable and partially mortality. offset Holdings, modest. and income in earned the insurance and This adjusted impact as adjustments portfolio higher

a favorable gain earnings had reinsurance $XX to RIS we by addition, In quarter. the adjusted million was which in recapture

down excluding both remained mortality per items, see U.S. $XXX on growth earnings XX% comparison a volume Page periods. which earnings solid year-over-year reported income XX% assumptions. share, currency drove constant unchanged basis. by a you have while notable year-over-year year-over-year variable segment of Lower basis offsets. mean basis. XQ earnings, down excludes underwriting X.XX%. and our on quarter notable at rate investment on in was adjusted favorable we and long-term constant in can third X, million XX% Adjusted interest Our Adjusted were currency decline $X.XX, XX% maintained items And was of notable down reversion down the partial excluding and total items 'XX, the On a

XX Life was well improvement tripled be 'XX. businesses, detail by less which This QX primarily ratio XX% results mortality More growth. Group investment of Group and XX%. favorable lower death starting X life roughly XX% margins quarter benefited The Moving towards Benefits in offset of shift volume COVID-XX was in bottom of U.S. appendix. the end of aided higher to the quarters Life due year-over-year. than COVID margins more target earnings mortality over found age significant the 'XX in the partially Page the XX% U.S. range claims to year-over-year, business with the third favorable percentage the lower in to underwriting The as the expense adjusted annual deaths from a XX past on continued the in can on as of by business. under our and quarter in Group was

adjusted of of end essentially health, non-medical XX% Regarding line annual low benefit its the XX% at ratio QX XX.X% of year and to prior with the the in interest 'XX was in quarter. target range

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

XXX basis As driver primarily growth of X private notable was versus point. points, in most due spreads the points as Solutions, underwriting. basis decline down increase Income Favorable by of significant the was voluntary. in in products, adjusted result well prior The equity year percentage to year-over-year Retirement sequentially. excluding variable X VII, return down basis in from can QX basis were PFO favorable 'XX we of QX continued XX and guidance was due very year resulted XX earnings, QX XXX XXX quarters, 'XX in basis premiums basis Spreads, investment year-over-year. partial points X offset. discussed our versus mortality well a income. across up volume growth in of full higher in primary XXXX decline quarter including excluding quarter, mortality this points solid period. to strong or lower were of roughly points contracts as in points, QX prior less underlying growth were in and participating of participating which investment contracts versus XX% approximately RIS strong a 'XX and excess life to excess below The 'XX a higher the of from dampened The premiums X.X% momentum RIS,

has completed and transfers strong While RIS or by up by have see down active to MetLife worth been growth fees this due record accounting liability an volume With certain This value stable driven sales billion X year-over-year year to were exposures not primarily had products. driven year-to-date. that risk XX% transactions income, do year-to-date and X% as impact market. PRT, $XX.X adjustments RIS spread to for pension a regards continue we we was

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

annuities as channels. adjusted significantly solid basis, strong up and product in were from by $XX This Mexico recurring were year rates in XX% benefit Chile. million to versus down quarter. was volume over a driven were ex Japan. in addition, driven year-over-year past currency Overall, FX America in primarily notables products $XXX COVID-XX-related performance a in higher strong which prior earnings from interest as deaths driven million new were growth. and XX% year-over-year. 'XX the strength underwriting In continued by health Latin inflation LATAM's favorable on Asia Overall, margins the sales sales up of accident constant primarily our year performance capabilities benefited well and Japan by launches and the diversified XQ

quarter. impact driven top well across currency a XX% as up PFOs basis, offset were investment versus negative and by had XQ continues by line variable group to from down constant year than negative constant from perform XX% a income was EMEA and in the prior basis annuity X.X% 'XX earnings, year-over-year a on and immediate LATAM's adjusted more which basis, Chilean due on the to in sales underwriting. currency primarily single reserves XX% basis growth the XX% on to Mexico. encaje were adjusted up this and revenue in a EMEA favorable refinements a [ph] return constant region, X.X% lower on However, Chile currency excluding X% unearned were higher a 'XX a were benefited periods. certain notable compared of currency PFOs favorable adjusted in primarily items, sales premium to constant down strong and very both cases QX which in

pretax the due growth primarily Holdings was market notable impact equity lower $XX was in across constant MetLife market-sensitive was a income. was in periods. to an negative top of down basis, excluding guidance including and for investment XXXX Favorable range company's was variable contributor end chart reflects Holdings XX% offset. lower taxes, rate adjusted which private majority currency underwriting driven past quarter return million 'XX. was the of $XX a The loss both to region. our XX%, of partial by This at tax million On The had items as income on earnings in expenses was attributable separate also quarter X, X.X% return X.X% However, Adverse due a quarters, adjusted up which favorable sales were Corporate earnings roughly employee-related variable MetLife XX%. loss 'XX. XX% variance on equity of X primarily the and billion in variable adjusted adjusted in in quarter. reflecting were effective were our Life investment less in the the loss costs. an account a negative versus investment third this XQ The X% a Page decline margins long-term and versus income other $XXX was care of XX% quarter the higher overall of portfolio million. the $XXX the of negative VII of to to year-over-year

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

of funds addition, X.X% billion. In quarter had a $X.X portfolio return estate in roughly the equity positive real a on

which new While of VII above money points yield was 'XX, rate our X.XX% underperformed X.XX%. our to increased roll-off XQ basis in XX

a for segment the investment their businesses. favorable MetLife VII in rising to assets environment. owned with continue X, of post-tax which the investment 'XX. in in match RIS, QX consistent mostly prior to in Page X On rate VII interest loss million to provide earn higher this a Asia expect respective primarily liabilities Holdings variable including majority by quarters, We X $XX of VII the continue we are assets are and income vast these trend portfolios. longer-dated

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

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

roughly to but expense fluctuations. in employee-related given XX year our quarter sensitive higher target basis recent to are costs points costs trend third full market ratio Our line with contributed was above that the ratio. Those

While with our business, XQ, to year be committed efficiency expense in full mindset. remain challenging of we we'd achieving ratio consistent believe the ratio XXXX expense and this direct higher the focus on an of execution demonstrates our despite environment. We seasonality direct expect in XX.X% our to our consistent target inflationary

relentless Now, to for new let's MetLife's Consistent years, the continue have X. past we Page business a highest for on with turn XXXX. metrics an Next reflects deploying to including for This X and to resources strategy, value segments focus value opportunities. update the capital chart major Horizon our

invested new at X of As a which capital unlevered of billion payback of business to $X.X generating evidence deployed that in with $X.X an XX% years, was period support commitment, MetLife value. of in billion approximately IRR average XXXX roughly

expenses New Page stock as billion reflects $X.X our at business of up billion reflects September were capital Cash $XXX The cash repurchases buffer the target cash remains approximately billion. and as subsidiary approximately responsible effects companies which on companies to was of will other flows. above and payment the million at dividends, I quarter risk. liquid XX. sequential Holdings of June building discuss value, Holdings well Holdings generating $X.X cash well net of XX common and to XX billion now third at share approach disciplined written our $X dividend, in in in the position and cash the while cash creating increase at $X and XXXX assets from mitigating company growth our our

investment U.S. Holdco our issuance for $X.X our cash senior year-to-date approximately includes approximately year-over-year, by estimate regard income income billion XX, quarter companies, earnings U.S. from addition, billion, decreased X% the billion earnings capital, that reserves, and statutory XXXX third expenses. VA September to debt and approximately was proceeds In preliminary net $X was driven while adjusted $XX.X our In year-to-date. $X.X approximately $X.X statutory rider sequentially billion. XXXX, unfavorable were July. statutory operating higher by down our operating lower Statutory the billion as We capital variable of in total

XXX% June data. being decline Finally, March rates public primarily solvency due overall XXXX the interest which rates. business. the from latest interest as XX to of the higher That Japan our was margin solvency ratio The Japan was U.S. economic rising improve of is said,

of underwriting Let and strong, business favorable growth, top me solid the remain ongoing the fundamentals conclude by saying expense line discipline.

were returns equity robust. quarter, spreads this private While down remain core

their Group In and addition, strong results America Latin in Benefits and recovery. growth continue our market-leading franchises,

capital that, customers Finally, build shareholders. sustainable turn and growth call to to MetLife our the for our deploying commitment for positions the to I your responsible our achieve And back will questions. value to operator with

Operator

is Bhullar with [Operator Instructions] And Jimmy JPMorgan. question our from first

Jimmy Bhullar

So first, yield. money I had a question just on your new

If the it And your investments? recent in could stands yield compares about you rise maturing the to how with rates? talk it on where

Steven Goulart

question. the John new but rose for Thanks color Goulart. the it number Steve that on continued was quarter. XXX it's shows some past again and gave and improvement. details yield this And I our actual Jimmy, money think

rates obviously, I in market, of rising. we're think a seeing what with reflection the interest

and and look some existing at the well. think is have, rolled that be what's of to book important off the blocks that we of characteristics given see means of our roll-off looking in portfolio lower with yield that also can volatile trend though, what very of that for new obviously has was the also think of roll-off what the remind like -- it rise our result The bit our about to quarter is past be for is. we're things been with assets a going We're general as couple see that investing. things as than just last would everybody, future are. I continue positive. there'll account this the a I so quarters And the pleased maturity those little This big now rates. just But to we quarter-to-quarter, that money trend

yield We positive over see and portfolio to our money continue income. to spread and new expect investment existing and continue increase net to expect widening for the see to that's obviously

Jimmy Bhullar

as the retirement And improved business, on was raise yield money up decent I terms a Okay. having I noticed you more. rates were are even how that interest-sensitive yield crediting products think, the going amount much but is up and up, the crediting sequentially conditions a little new to or in rates even, bit the

So this spread sequentially ended declining up ex-VII.

Ramy Tadros

Ramy it's Jimmy, here. Tadros

RIS, our is look you the in-force at from If fixed. in-force our vast majority for of a perspective crediting grade

fluctuations increases may we're there spreads, the see at clearly, no You the higher environment. our crediting mostly given really while quarter-to-quarter But new in And we're market terms business that's it grid. because on in-force the writing, crediting fixed. attractive a is or running of pressure has rate

Jimmy Bhullar

picking then Group good, products signs the in strong across market up results reported in that seeing your market similar quarters? all margins and Benefits, results I had Group were lastly, companies Yes. past the companies given any other competition the the pretty on well. Benefits just have of few Are And think, have as you over

Ramy Tadros

Jimmy. Thanks, Ramy again. It's

and of we'd you fourth historically, the to at health But seasonality them ratios to our question. there's may somewhat look in also were pick the as quarter. if So seasonality up those in perspective. I'll answer our both specific expect quarter you to some as Both from just some a results, to well ratio our be favorable give mortality context. your a helpful clearly ratio It broader give nonmedical

looking and this And overall their In back and expecting levers if you employers heard their employers of remain extremely to were of are market, retain variety seeing workplace step more seeing changing those about and to a broadly, market. bullish from we're the we how where more engage terms we're employees dynamics you've all the talent. kind attract, about for of

the really overall here And a these is say secular on a service market. Jimmy, that's irrational of providing beyond past, also rational. of perspective, as any can and that the of of many is factors entire check so other a products, stay natural for From that's nature you is sustained experiences in the pricing kind the as few. kind a competitive about also but pricing. act to digital such market I differentiate talked this that on tailwinds trend We've And this competitive and we like short price to name that's would piece

market some things, to of rationale. So of keep kind the overall to provide are and going landscape these the competitive tailwinds we believe,

are pertinent these germane for and of capabilities industry a broad because Group And scale core we really across that particularly we entire products. Benefits to are the in leader the in giving range They're both the voluntary all invest we've had Now focus our is industry. that leadership us market this to the us offerings. us that of our strategic have differentiate allows to and

the with So with pleased really and really a overall, performance, persistency pleased rational here. market see the continue to competitive but

Operator

Ryan KBW. to on Krueger move we with Next,

Ryan Krueger

you issued for? anything fully there the is debt in available use? to that, Is that's billion $X earmarked the of quarter. Or that was question that First

John McCallion

Ryan, it's John.

$X we So do generally general as up as on coming back as for that maturity great well terms generally and have got of you -- It's in XXXX. it's said, raised a billion some purposes in we debt July. issued execution. We great used

time, over present progress the cash flexibility holdco our the few at next we're all think see how maintaining I generally. and things pretty we'll in flows months. and pleased all, But cash we're with

Ryan Krueger

could emerging the just to a the is you a be negating Japan? there's ESR Or guess the where sending in in focus environment situation in relevant the of factor rates more and on SMR And becomes question SMR then less given Japan? there view on I -- do this cash FX it. a out I big moves that had becoming Got Japan, there. and just

John McCallion

again. that. take John, I'll It's thanks. Yes,

to in X the and current you We'll down remarks, asymmetrical was the tools of do SMR to regime, my interest do can that. things value a but the of of opening have interest help impact overall And said said, rates manage you that want mentioned ignore monitor improve in the utilize we But you as see XX So We sense. because and in to temporary that second the it at would can't that SMR the internal have overall, as certainly rising make economic accounting. rates number in impact the I that we SMR. business. also rising we quarter

overall, So flow or a generation overall They're the better that economics the have reflect known more And of business. moving ESR the concerns years' will as the the few the time. solvency capacity mentioned, economics business cash is in over of free as we you no right capital improving, a framework dividend or economic firm. now, to for

Operator

with ISI. line Gallagher of go Tom Next, the we Evercore to

Tom Gallagher

a couple on of investment Just second one derivatives, on questions on losses.

they've is think $X thought didn't of on that I from that. to losses about should look or adjustment any billion to want impacted generation billion than from statutory generation? on hedges I I losses. X $X just any TAC. that rates, more capital last quarters, real rising But stat as just question I at was to at derivative I your just look the there's Just that capital if and stack an been I interest -- about understand first earnings, think have impact impact just

John McCallion

a And billion GAAP right? clarify, you're number, $X the just to referencing is

Tom Gallagher

right? that see your -- the -- in QFS, It's I Yes. and showing intact, don't the up in not

John McCallion

observation. that's right. And correct accounting That's the Obviously, different occurs there's stat. Yes. versus in that GAAP I think

actively would say CAC you've And there's That's environment. fluctuations. I of that line a with market you it. entities. resilient the punch statutory been the how think leave probably rising we the been overall, capital seen, has operating And I'd very I'd leave as the I rate despite just is manage

Tom Gallagher

Okay.

point you see now that So John, capital out? dividend no that capacity right or generation notable would real be to on impact

John McCallion

No.

Tom Gallagher

to on well? impact I most just to Okay. flowing And have loss stack supplement, then as could just my capital should generation through be those understand in how investment gains about want is, think those I the on losses whether your and IMR. of follow-up think an

So to shed have correctly? reduce the that it annual modest thinking impact. gains that amortization you I think have net that light but extent you losses, a that? I like Am Or some every very about year will on will can

Steven Goulart

Goulart. it's Tom, Steve

and losses in this the I on just the team like. and a what's little in trading and market will bit. tag think and about John I thinking happening But

are rates. First is say in thing I'd just not rising unexpected given this losses environment,

combination they decipher understand of note capital the assets assets also moderating were in businesses, that losses. we're respect. quarter, think PRTs just different to And down things the rotating like flow they're surrenders easy Although a or temporary of and outflows said pretty sort again, longer-term like I which I like. of markets and last that significantly more be it I and it's a permanent quarter shows and needs into cash other taking It's liabilities. whether why usually And last where funding from would environment

of bit impacts. obviously, stage. talk sort sets a that that would little as capital and this expect. John about manage we the from And Again, we the quarter is down last So can though something do

John McCallion

we're today. Yes. typically would And so. you're IMR balance, manage and get But you an correct, we Tom, one in to absorbed, if monitor do to that you have have position plan it's actively and

Operator

Our next question is Research. Erik from Autonomous with Bass

Erik Bass

you wondering think is also hoping just rise this plan transfer pipeline. I'm a contribution rates pricing for $X think the the robust I transactions? strong the You given both was year-to-date in as past, well of I PRT in as sponsor about risk And each a the earnings is could right demand how thumb talk if still about? affecting interest in sales the level you've highlighted billion rule sales. for just to for of from

Ramy Tadros

the I'll and we've to seen plans at the this second to of affordability With overall to have rate in helped I of number the PRT, a And by you you if any our the fill Ramy to is it's the which we levels question to -- is clearly, going we Eric, here. look the and rates first. mean, we're respect improve overall funding front pleased leader interest think kind rising winning rule funding be about headline and robust on we're defined how these benefit a think therefore, earnings run PRT market market, of Yes, year. still level holds pipeline still With should to of here. deal us. the the that's record deals. track extremely of I respect that's largest the thumb answer very with year still Clearly, transfer. pension with are ever risk see in engage IBM.

a note our That record advisers providers size and market. solution leader rating, are of on the thing market the a this placed of actively in jumbo are talked and eye of IBM have the also the of long on is value would their you risk the of the we We the part our our very competitive strengths the with looking market the where smaller clear new have we track pension plan in and terms balance market, of somewhat our We're sponsors sponsors providers have on given the our I capabilities And market investment focused sheet, to of market. in value business. other this last and of strategy see always large set for all experience of like I've this that be point working competitive deep very And with we engaged, jumbo being I'd tends all a aspects about. attributes while business. on transfers. end end

that Going we are targets. with write business that the we referenced within chart enterprise want back and and our ROE ROEs writing business John are to the well which Michel and

Erik Bass

could for been talk was then, you're run American about sales outlook had Latin the I you the and And the There's talked about. to strong hoping you business. that momentum earnings back rate growth

kind right of in about? from the here, growth looking think So double-digit forward, and earnings to PFOs target is

Eric Clurfain

Thanks, is Eric. This Erik. Yes.

what another fundamentals. had is strength So underlying for by quarter of franchise, we supported Yes. our know business strong you the Overall, solid our region, the

market factors quarter and it this of tailwinds and quarter. with a combined last All

growth momentum are our double-digit as in good that PFOs sales deliver and evidenced of and to persistencies by that all continue on mentioned, we across commitments countries. growth continuing Now both our solid reflective see you a and strong to as we're

sales distribution diversification in solidity overall last product reflective continued really growth this the has the and throughout of that year. diversified mix resilience year It and the of began channel, region. franchise the Now and is our momentum the the potential of the

want really and is all this Now with quarter. sales sales to story. Brazil Chile point strong was region -- the quarter I out having across quarter growth a actually channels across the and Brazil record the the

as twice market. the grown fast as have We

of very give quarter, XX% to And Brazil growing across contributed channels all just are this and well the products. to idea, over We sales. region's you all an

So the we're that that referenced and last the quarter I to sales quality persistencies overall that robust to flight of continuing quarter-over-quarter. year-over-year is also by and strong evidenced see

the we're we're overall, with pleased region. across momentum so outlook that update seeing do we'll February don't the very but and the our in we and growth So

Operator

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

Alex Scott

I a been question But know of also expense I good recognize pretty First guys had your to I guided you've few number have businesses. across a growth direct expenses. ratio. you on this getting

better the you operating kind over to to wanted of just I get time? that expect So understand leverage

Michel Khalaf

it's Alex, Michel.

anchored able important we our been last me seeing think X And So few we an in part business. here so investments make and let playing just this and continue over the nicely. to talked that to about of is as we're capacity to to and years efficiency we And -- I this wanted remind want DNA the very our on to maybe traction out free we've up excellent the XX do on building why we mindset is idea front.

benefits of terms of referenced If introduced market speed there, voluntary business introducing some we've you about, new and products. digitizing in to I and capabilities Japan our think of the terms that in

to our types believe advantage forward. of going continue to we those it's important competitive to make drive So investments

X that Now did you -- sort XX when sort also I we've think inflationary environment mindset is consider if to of was it credit pressures moment. the at in again, that this and the different the a everyone obviously, here. efficiency mean is target, feeling we of I Yet, the establish built

achieving thing committed is having when that new does year. $XX in comes to associated obviously not point would PRT business. XX whereas sort year winning I PRT from ratio, And we're There be that to expenses to over not the PRT, the our billion for record X continue into this to factor We a last does yet. deals, expense premiums of standpoint are us direct it help with

continue right we target reasons, that X those to believe all the us. for for XX So is

Alex Scott

deployment capital on of Got follow-up gave. value a business it. That's just really helpful. the the then you and maybe disclosure And new all

the about disclosure Does business you're how that bit new a deploy make that show more noticed behind and to you mean make on I You margins it as getting new much business? Does XXXX that capital? seemingly in less sense to at it I little sense think deployed materially that margins. up you'll better. making we ramp are better deploy

John McCallion

and there. payback of I use I is it's seeing. to we're achieving is going we more at reducing John. the will deploy value, we think where best the also time mean IRR -- can want say, you're right? has can now And we're creating and number over it. to when I very think that on the just deploy. and returns. at deploying right want we think to we not Alex, focused fluctuate. And value on you a and And attractive extent it. important Yes, deploy out call get the deploy at you've We're amount more point. don't to I to I I happened great a its going the reality it's a think while that focused that are amount see, returns, returns improve metric, focused capital solid not that we're we We transition great a that just it's made. It's trend that capital the X to -- a great attractive point would even we're that's do to capital is I can with, do great comfortable ultimately and the mean on Value highest

Operator

Suneet from And our next question with Jefferies. Kamath is

Suneet Kamath

didn't any Just infuse It to that just second. to about think a as support growth in capital you for going look back through business. IBM. I capital PRT to to the wanted needed you think needs like

going I So about the that. self-funding think more front also, is just as sort opportunity pipeline, is want at you you see of the require to of that this Or point? business capital? confirm set But in you that to

John McCallion

my STACK in I maybe referenced high maybe just opening a touch it -- in and on capital. remarks slight this I'll is level decline at Suneet, take a John.

say If attributable the in deal it around that was also we of from that, about morbidity. -- as you the to as some our related that well updates about the and X%. Part large did we third of quarter some think most the I'd and the was capital strain, generation updated positive by offset on CX net impact mortality estimates capital latest of

I net-net, self-fund overall, we've able date. to years So our to been think record

the on outlook. Now your question

feel this now, dependent. volume the within in grow we able I is everything entities, successfully But right comfortable to to question. dependent think needed answering a what's business. I operating being that very is fund mean, factor with

Suneet Kamath

And returns Steve, about higher on I guess change around any of Okay, of then think also longer-term could VII, of of portfolio any what term, for to And kind longer the fourth as quarter? we be? in kind the on thoughts then kind got rates volatile markets, this thought it. given

Steven Goulart

I'd probably portfolio. alternatives the points say several about just and thinking specifically, VII

expectation to for I when First just years a we several That's in just last guidance. to of anticipate this think about portfolio. And that been the part every even your question, going changing. that wouldn't is planning, we're our looking We've say how consistent is X% that. very forward remember now year I'd XX% our quarter.

always The us talked give some is that does gives us one thing less compared and would. volatility we've found it alternatives with is to but And portfolio less we've other our equity-like really about as returns it things lot that alternatives about the this, market too, where public of a second experience. it attractive to general, in extremes the

So attractive us. that's why it's been to very

more very that again, norm turning our to we're extremes last muted sort in the But but volatility challenged. historical and giving couple of saw which -- the several is, quarters couple look terms Now, talked a think where we did last quarters, of little do the in be we still of relationship that at years over attractive we we of when bit expectations returns. we us

but think don't to change I continue we've it for So it now reasons outlook our mentioned. for the would we that like

Operator

a Wells question with Elyse from Greenspan have we Fargo. Next,

Elyse Greenspan

any that bid-ask you I within about there quarter? guys or potential within spread are your in new know just the transaction My within asked Holdings. the you've market blocks first changes typically Anything question, the within seen

John McCallion

still active It's there. out here. an of There Elyse, set still nothing participants. is an new active to update market

we a we holdings, potential way have there seeing we perspective thoughtful as quite where We it's an for participants well continue been opportunity one have optimizing but not feel if internal a do anything some on and as opportunities. speaking to on as opportunity to And external is time. like from both the one being focus with And about it's we're or other.

So -- but nothing new at this point.

Elyse Greenspan

number? And we then of kind anything here? on on how the RIS within think that the ex-VII, should And spread from about core that trending

John McCallion

Elyse, it's again. John

XX, were came ex-VII As total at spreads you in at said, XXX.

So points down sequentially. -- an beneficial. then on rates been Year-over-year, have X year-over-year, up basis basis the interest ex-VII and it's obviously, higher

down called that to expected Sequentially, the excess was it to starting spread. these moderate of some second out estate that I rate in quarter, points. are there more that money that were In we they returns real basis did. interest of add the caps in have the We to X kind are

curve pretty the forward to quarter for year expected. which year. and then in to spread. which much So, X% and X-month caps on morning forward all the up here I'd certainly quarter, end equal based These X-plus just still the above pulled will of as say say third else is bps. next place by And I into the to additive we'd will in to beyond the I thing of grow in came be spreads expected expect rise fourth going be I'd this think LIBOR is

Operator

go Burtis Raymond with of James. line Wilma Next, to the we

Wilma Burdis

million $XXX inflation? PFO the expect expense higher [Indiscernible] costs It million, heading corporate previously should sounds we for XXXX. to and in XX.X% given guidance like into but sticking of rate guided a run to XXXX, corporate $XXX you're growth

John McCallion

this Wilma, is John. question. Good

quarter. think point third a to in of terms things couple of out I just

quarter, stock first third have about million. the by dividends $XX typically in higher preferred First, we and

the July. $X on debt debt little of Second, we raised are on billion interest of a costs we because running in just heavier

market-sensitive we about And some quarters of have do the called ratio basis we lastly, the costs couple we that I get costs or I in down us XX And seen referred PE remarks item corporate last opening think returns been actually, employee-related hit that quarter. last have is probably third expense to. this by couple over out the then -- my on of quarters. higher that points

little XX.X% So think as into meet we a as outlook then we'll we this. February call. to are our get commented about Michel I before, target running heavy, still expect talk despite the And we

that hopefully, So helps.

Wilma Burdis

Okay.

run was it million like previously you've to But guided quarter normal. rate fairly earnings this $XX EMEA. seems question, quarterly million a $XX Second in roughly

a So reflecting currency run wondering rate I'm pressures.? that's if good

John McCallion

Yes.

simple you're the way think the about quarters. I down pretty brought thinking basically last one, rate has that's that it, of of over mean, on. run couple currency a I

the new probably probably to number I So right think you're is that that. closer

Operator

remarks. all the ahead. time And that's available call to have MetLife's CEO, for questions. back closing And the Michel for pass we Please will we now go Khalaf

Michel Khalaf

engagement focus our you was Thank energy an strategy we and major a live and energy and visit give ever. our office The annual and to offices vibrancy, These internationally. purpose. of long-term I've MetLife is and speaks Thanks levels their again in to work all plays this great and morning. participation where in Horizon When in important confidence to deliver out stakeholders. the did opportunity of role had grounded for future and relentlessly in our evolution model survey, ability how in rolled day. the employee joining scores so strategy. I in us engagement underpinning global us we belief encountered sport. palpable our the highest this team Next the we March, evidence have our the reached levels cultural More execute further emerged value our our U.S. now to rates our that on a

Operator

conclude gentlemen, participation. for your and you your Ladies does Thank today. conference that for

may disconnect. You now

MetLife (MET) 3 Nov 222022 Q3 Earnings call transcript