Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the MetLife Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, instructions will be given at that time.

As a reminder, this conference is being recorded.

filings. I in to to yesterday's discussed MetLife's started, about cautionary risk get in statements forward-looking earnings SEC we refer the you note factors Before release and

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

John Hall

operator. We appreciate Good MetLife's us you everyone. earnings XXXX quarter call. morning you joining for Thank second

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

the available Chief call we night, in of in on McCallion, Officer. this to President On website. will members set speak prepared morning along. are Last participating Executive to Chief McCallion his Khalaf, Michel Also the our supplemental and released other management. address John discussion a the are are Officer; of John and them if which senior follow slides, you remarks Financial wish quarter. slides The

other GAAP An appendix to and review. the you disclosures, slides reconciliations, similarly should information, features which

As the one end Q&A one hour. limit and usual, to fairness the to to session, will of In top yourself host we just prior will everyone, promptly question which please prepared follow-up. remarks, after the

that, over to Michelle. With

Michel Khalaf

morning, good Thank you, John, and everyone.

relentless reduces legacy quarter has the runoff the business of As of in of the deal commitment is MetLife's been our our conditions market-leading also delivering been diversified strategy, our financially includes risk. second businesses. to market execution through that fluctuate, attractive the to continue is of also what constant set constant which a underlying performance on enterprise What a accelerate has

This successfully shifting management capabilities currents. are MetLife. foundation us enables to risk navigate Our the bedrock strong of

the our investment are confident prudence of We in portfolio.

effectiveness asset the in of our secure are matching. liability We

are the of balance of our we strength. convinced are our We and safety and and sheet's of liquidity, capital soundness certain

a year earnings or $X.X which ago. Shifting second share quarter $X.X $X.XX compares $X.XX billion, to adjusted billion, last reported share, we or per results, of to night per

We continue which underlying evident the our to quarter. in core momentum be of pleased with businesses, was the

the income Latin with results across Our and sales impressive Asia group, and strong retirement in were board America. solutions,

Our underwriting results levels. targeted within were well

totaled illustrating further operating generate expense leverage. our XX.X%, capacity direct Our ratio to

Our recurring to and of money met other return our than X%, on our XX.X%, adjusted pushing new income rates past continues excluding equity with XX% XX%. of target climb AOCI investment FCTA, to range

We inclusive X.X% million For outlook our below $XXX basis expectation. funds, on variable return equity some income minus the positive return portfolio. class XX private of came real aggregate, X.X%, remains a the our estate asset on quarter, cyclical of investment point In generated returns were in under pressure. equity a capital venture about that an

reflects reached contribution total, we've In trough the Atlantic. announcement required which following elsewhere to second quarter. quarter or real net incur relative the quarterly portfolio was adjusted certain second $XXX believe the we We million, income re-insurance adjustments did our accounting losses our earnings. during in our estate of to Global pending the with material for credit Nonetheless, VIIs transaction not

results. benefits I business the with with our line results group underwriting $XXX start after in performance Shifting expectations to quarter, certain earnings Adjusted with MetLife's US in items. reflecting totaled unfavorable will million our

full firmly expect to adjusted XX% sales we X%, for which year X% are the year-to-date up range, In within outlook PFOs of impact total, XXXX. X% are year-to-date reflecting up to par achieve while the our

when are where XX% enrollment national with strength in additions existing ability has power business growth us of with and you that than growth. for this been sales of ahead, strength sustain attractive The to in our The trajectory new many product customers largest this apparent for XX years, behind to more is made well-known. through is consider accounts, our our our our customer average confident Looking are we relationships capital-light reasons.

broadest regional Our success our expansive share benefits is portfolio, accelerate is by driven gains. of the element efforts the our in this product growth business A to in across key market universe. evident

products. a seen business As success multiple voluntary And in this can again, for proof mid-to-high-teens of our been rate years regional products, now. our to be many also at point, more half new purchase with able customers which than we've a grow

For $X in risk We transfer retirement the all by and strong the or benefits. booked, and range income and $XXX products, rates of longevity Sales in for asset investment good RIS, areas. across year, adjusted a XX% growth these than quarter margins totaled very earnings up prior higher settlements, driven structured billion with pension recurring post-retirement including more balances. solutions, see from reinsurance, million, run were higher

investment In $XXX ago year income. earnings on were of Asia, variable lower a million adjusted below

currency ability Japan, where on sales jumped basis product. bring constant up to new life Sales quickly market Our a by the a in by was the display of the on insurance were in full quarter. to products year-over-year, region, foreign XX% currency led introduction led XX%

strong and respectively put Further, gains another $XXX adjusted America, quarter, constant PFOs Latin basis. XX% currency posted sales XX% to up million. of a both totaled America adjusted Turning which and on Latin in earnings

Taking pandemic expecting we a emerge through we wider the managed lens on to the from the than momentum in our entered. turmoil business, stronger

fullness With that we the true. can time, now of is see

generated full other In billion. our and XXXX, of Some numbers group $XX fees, revenues business can premiums, help. roughly year benefits

roughly of $XX on billion track $X of PFOs a XXXX, at billion more benefits growth representing in are generate X%. than We CAGR to group of

quarterly In variable expectations. $XXX earnings investment generated retirement matching average income solutions business million, XXXX, outlook of with our adjusted income

about XXXX, in adjusted benefit million per the has far VII. So RIS $XXX normal without quarter, of averaged earnings of

XXXX. clear. businesses than million $XXX market per America grown per in quarter The the me, XXXX, an message has more business Latin quarter To steam. $XXX Similarly, earnings our is average with gather associated to roughly million continue in our which of to of fundamentals adjusted averaged leading

quarter. and Moving MetLife second capital remained the management capital with during to cash, active

second pace million slowed repurchased due our stock we announcement of Following the to common impending common to roughly our reinsurance dividend, the stock. we the million $XXX increase of The of to our shareholders, paid in deal. repurchases dividends stock quarter common and $XXX of

of In stock common during in repurchased million we the of our the activity our addition second July. month roughly to $XXX quarter, another

about Here today our which on have July, leaves repurchase common remaining $X.X through approximately billion shares, authorization. of we $X.X expanded our billion repurchased

As $X use the responsible assess the $X.X for we long-term for to of capital we we at debt which on done liquidity third In we balance the maintained. the will carefully in included buffer billion companies, time, in of growth of attractive in our the of quarter, $X top holding have the our billion of billion and every is capital the balance billion above be returning to senior with value cash the investing held terms, of we shareholders. consistently achieving end goal generate sustainable over of July, our issued right $X which between the quarter. At end future cash beginning

remainder Beyond transaction to through this, we the reinsurance add of as further will cash this the move dynamics of year. our

that will the we last be Goulart quarter, us. at call his During retire will of earnings announced August. with Steve Today the end

free questions. feel to with pepper So him

of team span, corporate chief will on before chance. taking to of development not this another distinguished and officer and would MetLife's for acquisitions led moment our president XX roles treasurer MetLife Investment his that get In Steve You I service and investment to Management. and time he his as like MetLife. take thank mergers years as the served to

to to present fixed the at MetLife Steve's established as talent as and broaden billion retirement $XXX a and the start the our provides us XXXX, apart for standing roles our Investment MetLife opportunity its Steve of its in truly of manager. and responsibilities company. sets serves Management some a status fostered clear leaders. real a I income From estate believe growth institutional differentiator top and

president MetLife chief And ability Chuck will Scully MetLife John addition investment for as the MetLife's as add head head McCallion, greatest business, reporting deploy illustrate talent In his portfolio. top to risk our officer to chief our of to responsibility take Ramy officer, customers of Insurance regional with Investments Holdings to draw upon impact directly These on chief MetLife shareholders. to areas officer and role Investment Management. bench and Tadros, the Debel of MetLife's will moves to financial her additional deep will Marlene us lead Marlene.

cycles. a our how shareholders economic invest, what positions deploy how execute, we capital, MetLife's perform value stakeholders. control, In closing, on we of we for we all and we can to how across long-term us weather and strategy focusing By create will range other to continue

Now I'll to it detail. in John over turn to our greater cover performance

John McCallion

Michelle, performance and and the of supplemental on morning. you, our update XQ capital liquidity an with start positions. slides financial Thank and provide good which 'XX our I highlights will

securities that that our Net reinsurance in were Starting loan at provide mortgage associated a three, transaction the the net losses with May. income addition, Page commercial announced Global of update quarter. the of In Atlantic result we I'll on we the primarily of an with investment provide to adjusted earnings on comparison second pending were portfolio. end

unrealized XX purposes, as to GAAP losses this gross transferred June be to net quarter. expected at realized to are Global closing For through required Atlantic be on of income securities

the versus by rates. we were Yen, markets, strengthening U.S. derivative the this benefit, equity MRB interest markets losses to market offset losses to net mostly or the said, rates. risk due interest higher favorable gains, equity addition, In quarter higher had dollar of and That remeasurement due derivative and

a the earnings On Overall, remains second modest, as can the by segment, settlement, notable year-over-year MetLife was you hedging well $XX of continue program adjusted items Page be in the to losses favorable to and expected. credit positioned, XQ the see in performed which no were comparison excluding quarter quarter. accounted portfolio four, reinsurance notable item million of related 'XX, There current of for a primarily Holdings. in

the down constant down on The Adjusted prior also than currency earnings investment recurring driver interest and margins favorable XX% lower primary less income. were year, targeted billion solid Higher ranges. margins were Underwriting but was variable basis. were offsets. partial $X.X XX%, our growth volume a within and

$X.XX on were X% basis. year-over-year share reported down per earnings currency Adjusted constant and a

expectations the adjusted benefits versus were U.S., unfavorable by to benefits million, expense, approximately were Moving earnings businesses below quarter quarter. to items, due adjusted $XXX X% to reduced $XX certain group reinsurance, the the down starting rate year group the earnings and which this prior were Results and run specific period. related million, for reserve with

ratio mortality range target was bottom group-life of XX% with XX%. The at line quarter, the in annual and the end our prior of XX.X%, to essentially year

of that percentage midpoint annual quarter, the ratio XX% which was a $XX million by non-medical was X.X I tax, Regarding items to the We of the benefit referenced. health, the included after of range just the million ratio adjusted XX%. approximately target refinement totaling and disability its reserve in increased points, XX.X% $XX above had interest in

including line, continued roughly PFOs voluntary, underlying the products, to participating our primarily range were up account, up dampened which within to X%, Turning to X% PFOs were by due XXXX strong of adjusted X% into group growth target the approximately X%. contracts year-over-year. year-over-year, and Taking top was momentum growth across benefits solid and growth most X%

products lower versus due QX of RIS were XXX basis variable Spreads rate strong solid benefit in volume addition, spreads were year-over-year. year-to-date, interest rates, income recurring as were million, most by and driven investment and interest or up XX interest money basis In solutions, were caps. group year-over-year. points, This 'XX, VII the primarily partially growth by end XX% XXX RIS, higher adjusted income drivers investment Retirement margins points earnings offset markets. excluding were sales to up as income was well up primary from XX% growth. higher The $XXX points. across basis

flows. X% driven X% due driven account RIS risk grew by continue adjusted settlement which were $X structured PFOs an strong we up RIS exposures reinsurance. longevity active see excluding XX%, were up liability net worth UK primarily With by market. year-over-year, to to pension strong billion in PRT, to general transactions transfers and approximately in of the sales completed two and quarter, growth products liabilities, regards

variable Moving due $XXX reserve to earnings a XX% primarily income. ran approximately earnings ups. certain constant and tax to on and currency lower $XX million Adjusted above down million, investment refinements Asia, X% basis, true due adjusted expectation were to related

well up the were a an April across product account on as were on region. amortized currency as by XX% premium basis year-over-year, channels, FX year-over-year sales to life continued on Asia's and constant annuities constant key were due strong as In general relaunch our under sales growth momentum strong grew management in strong assets a growth X% driven XX% Japan, a basis, cost driven up a FX X. single currency basis, on sales by of life through face-to-face metrics

interest for consumer higher We see continue attractive interest Japanese the to products rates. given FX U.S.

$XX prior million adjusted down year release XQ underwriting IB&R had XX% roughly quarter reserve. currency a from earnings a The America basis, a million, were a benefit related Latin XX% $XXX to due less constant and 'XX. margin earnings of on to versus favorable adjusted COVID of

growth. continues perform up and year-over-year, and up constant by growth XX% on America's well, currency currency basis, region. on margins addition, XX% X% XX% by a PFOs partially as million, constant line EMEA currency XX% offset across were driven were a up top margins. constant earnings were basis, recurring primarily were by down Latin a and adjusted investment solid higher up adjusted In volume basis, sales driven the to $XX interest on

were primarily up the Corporate income. decline PFOs constant tax $XXX and million up basis, by of XX%. quarter region. adjusted $XXX adjusted effective the rate earnings XX% adjusted were loss variable was approximately across was EMEA adjusted of on guidance million, a reflecting XX%. XXXX other holdings our and This constant year. currency MetLife sales million, X% investment the at on were a in basis, lower was company's down strong the currency driven an essentially low XX%, to on of and flat earnings loss end XX% The in prior versus adjusted growth $XXX

pre-tax million plus QX in one while X.X% Page for reported portfolio, equity of On return minus equity ‘XX. a this the return, lag. billion our $XX.X real X.X% are both a $X.X variable chart estate had five, quarter. equity PE income quarter including in billion, prior quarters, estate the investment funds and of a funds on five Real $XXX Private had reflects

be quarter now, the in in anticipate quarter of will VII second we result. the As with line that generally third

VII provide for segment we prior by Page the tax six, quarters. post five On

discrete match noted you've built previously, holds portfolios, to of which investment have each the own As its liabilities. been businesses its

largest assets given RAS, long of As the MetLife the portion in reflected chart, and Asia, continue Holdings their liability VII profile. hold dated to

For and outperforming XQ highest portfolio X.X% generated of MetLife Holdings X.X%, returns at at the at X.X%. ‘XX, Asia's RAS VII

past Page of QX Now the in versus shows for chart QX and Page ‘XX of seven, of split the three left recurring our VII the investment turning the between to net on the income ‘XX. of years

had in few $XXX last VII While reflecting rates asset income, the of higher quarters, over than net lower approximately was income, and the investment returns for balances. up accounts million growth interest recurring has XX% year-over-year, trend which

to right new Shifting your three money which decade outpace yield reached attention global money quarters. its yields our Page, to the the the chart in roll yields more new shows off in off over higher basis X.XX%, XXX recent on versus yield off years, of quarter, roll our past the the the of In this highest level new money points a roll than yield than yield. continue

this to We assuming interest rates levels. expect trend current favorable continue remain near

Page which can a commercial few further on details our updates mortgage supplement. in quarterly our to I'll you eight, provide find loans, Turning financial

larger properties portfolio are stronger stress. $XX who and are periods our mortgage positioned well June quality assets property carrying commercial XX, the better high of is larger geography and in by effectively manage diversified sponsors to billion loan, These of through CML approximately The or and type. CML of As loans portfolio, typically to markets. concentrated value primary in is institutional

Given focus to the this XX% sector, valuation real office our updated received. the to our was trough given believe it here all decline. assuming through office the We the June U.S. team on prudent a valuation XX, has focus attention heightened peak efforts in quarter estate

XQ average now LTV ‘XX, with of coverage of in XX% service expected, average result slightly X.X the increased an As from first quarter in slightly down ratio from times LTVs up an CML ‘XX. of portfolio our debt in a X.X as XX%, times and

asset the X% XX% class. in With losses have the LTVs portfolio. indicator and strong quality on having times. remains in coverage our The and is now XXXX, CML of regards LTVs loans portfolio to increase the ratio loan less more of to the mature robustness with of we XX% schedule portfolio's investing our the for approach minimal than resolved disciplined is DSCRs service than resiliency this take with and to CML of of we one in expectation another only The coupled debt modest the successfully maturities,

Now expenses discuss Page let's on switch gears X. to

direct a of ratio full XX.X%. XXXX, had expense This comparison of and which well ratio as as of for a year QX QX chart 'XX, our 'XX of shows

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

I expense ratio growth and above from an cash is billion expense on ongoing XX, a buffer mindset. consistent focus We remain efficiency direct $X.X March companies to or our achieving capital with QX demonstrating Our target at discuss benefited XXXX, and XX. now and and expense discipline. our top-line June cash in ratio committed solid Page execution to assets of on and year direct consistent holding approximately XX.X% which will full of our Cash at $X billion positions XX. were the $X liquid below

were holding trend of we the May QX dividends, we of cash the period said, have Atlantic. well in totaling as buybacks roughly effects of our and of companies That pending holding in our second million other of reflects in dividend, 'XX The of payment our lower and in company as blackout cash The subsidiary net a $XXX reinsurance at the in transaction repurchases than stock repurchased July. expenses common with as for approximately most quarter, advance flows. recent were $XXX million shares Global share

billion quarter, underwriting, net billion, income year-to-date operating higher billion, For year-over-year, partially by was driven by XXXX favorable offset primarily were approximately increased $X our earnings operating $X.X U.S. $X.X second approximately companies, statutory by preliminary statutory earnings while approximately expenses.

of impact roughly associated was adjusted Atlantic. billion March of $XX.X to the investments total due XXXX, We X% the from U.S. as to June Global expected $XXX be capital down XXXX, XX, transferred XX, temporary with our approximately estimate that to statutory primarily million

on which target to year-end. We expect impacts reverse at by these remains close,

transaction expect approximately combined previously add as RBC points. the to addition, XX disclosed, In we

Finally, be Ratio we the few Japan-Solvency approximately XXX% to expect next weeks. will of will as filed that be which based on XX, the be in Margin statements statutory June

Let me conclude with a few points.

we First, historical while we below VII believe reached returns, a remains trough.

environment. robust from In yielding core to benefit a continue spreads higher addition, remain and

be continues Second, the underlying management. coupled fundamentals with strength expense and to displayed underwriting top-line of business our strong disciplined growth with

cash And for strength, capital sustainable Lastly, the portfolio, and investment value our balance position deploying growth customers to market-leading flow sheet, shareholders. and remains responsible of our and committed a businesses. achieve free generation, diversification in we to our are of MetLife building given our

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

Operator

Instructions] Thank of go ahead. first Please line to with you. we the And Krueger KBW. [Operator Ryan go

Ryan Krueger

Good My risk thanks. in morning. you time? see deal, further Hi, MetLife holdings risk additional was, first transfer the recent over question following transfer opportunities do for

John McCallion

Ryan. It's Good John. morning,

think the we've I probably same would before. commentary we follow given

to We different We to ways are and we to optimize. continuing opportunities. for internally communications look continue look for have external around ways optimize, to

at fit us. think with very similar blocks of to the be this right I have transaction, don't day, needs to value-creative. needs It managing And it the end of ourselves. comfortable we the we by the these businesses to. to of what profile end be to the needs did day, We're for It risk-reducing.

expertise. the for think it's I process conversations. But And a to nonetheless, find have book. optimize have We these ways ways us there that continuing are to different to healthy

Ryan Krueger

extensions you some on on any to of additional his for had are? resolved details versus I of the ask the year-to-date, more the paydowns then extensions color that mix And Steve and been what office have Thanks. loans provide call. on the terms last one Could

Steven Goulart

XX% off. question. already for to me the John mentioned about But earnings this scheduled a resolved. hate total to call of let them actually talk XX% portfolio. the would have Of Again, Hey, been were paid Ryan, loans through the of year your my question. question, mature go I thanks on without that, last

loans contractual positive. extensions. the the of of about mean, And little resolved And again, loan those very are were loans. the distressed average So borrower them through we've is past. XX%. talked in LTV But financially I that not on a XX% those extension bit

financial allow happened to performance tests has they that's to contractual that related have debt again, they LTV, sometimes meet what borrower extend. those. again, to have when the And And both. to related extensions to they yield, with choose And do,

extensions. paid fees get on also We those

And very are, what in portfolio interest so where it's do. those is this just the given it's not choose is to The similar a gave. office I surprise, borrowers rates statistics that that would

the So it's with of we're forward. how rest year. looking moving expect and similar out very would the are pleased We resolutions comfortable very

Ryan Krueger

Okay, you Steve. great. Thank

Operator

Greenspan is Fargo. next And question go with our Please from Wells ahead. Elyse

Elyse Greenspan

of morning. was groups. question, one-off Good thanks. My pointed that around there out Hi, John, first within million you think I items XX

So of is the we forward, in there just the Or the thinking any should about of in the power earnings take think that just for segment? and we other back run-rate seasonality that as normalize year? about that going half should mind

Ramy Tadros

Hi, Ramy. Elyse. It's

to the your short answer yes. So question is

these expect don't unfavorable items So were reoccur. that we to

flavor the of what were. Just to give you items a

So expense to the assessment. related catch-up first which an item state on is one tax a is

The an John And in which second is adjustment the third our disability line non-medical point. health policy. refinement indicated ratio a just is impacted one the on about our by one insurance as life-free a reserve

to these So be expect mentioned. recurring as don't I we

you so, for basis. essentially a those on could go-forward normalize And

Elyse Greenspan

Thanks. you up And question, in my pick second buyback saw July. guys then

in is that I about the are think from dividends July good greater the then level here? year? So believe, As the of closing a run and transaction back we subsidiary of your half typically, holding also rate kind

Michel Khalaf

Good Hi. morning, here. Elyse. Michelle

in transaction. a So second that due the of was there we quarter were for, I would given the of bit July fact that in blackout the part say catch-up re-insurance to

we'll the of So, look I in the assess up rate close run to gives obviously to the the half at here good transaction at environment of We you that of And sort of pacing. looking a the second sort the July to you time. one we date, probably we're sense year. do, if think

record here. and good we're expect how of of, deliberate terms same returning we've major in terms capital divestitures think a after access expeditious built and we here the I in track and,

Elyse Greenspan

Thanks, Michelle.

Operator

ahead. And next Please we Autonomous to go Erik go Bass Research. with

Erik Bass

those experience thinking particular, how results forward? in disability this and more your you health Can provide in underwriting non-medical going the dental about some you're you. quarter, thank on Hi, and color

Ramy Tadros

Erik. Ramy It's Sure, here.

start disability. with I'll So,

were strong of and with And impact we favorable pleased We're earlier. this given all So, we referred about to a just quarter. levels quarter year-over-year. those one-point this refinements very the on seeing favorable of noted incidents ratio and have before, line some I recovery I'm that results which very as reserve the seen performance

to disability, from health here technology tailwinds But continuing macroenvironment of labor underwriting, also our we're from benefiting and and markets. to capabilities, in from the which give factors, we're how to interest capabilities data in to terms benefit On rates deployment of in favorable our pricing the leave macro aside and return and continue and and we also well tight strong resonate absence marketplace. us run this power invest business. we And continue the our

From we in increase costs. a elevation, an a this seen our dental quarter, slight claims driven perspective, our trend have by

of of course adjust sure margins. we part normal pricing this we to As the meet product, make our managing target our

trend and call as XX% monitoring our adjusting about majority annually reprice we're accordingly. So book, the a of always our reminder, dental the it and pricing we

year in of for the maybe at full the we part dental be and here. the managing health range a midpoint want step kind if the to is inclusive ratio of benefit look our terms of and expect So full year back of for is non-medical this of the which to And disability, course you at book. guidance dental

Erik Bass

you. And continue be sales to it very pivot then to could Asia, strong. Thank Japan if

a could business. in this, dynamics the current policy market the driving the So competitive we impact on have more BOJ about in what a could talk change bit what's and little

Lyndon Oliver

Hey, yes, Lyndon thanks It's Erik. here.

with in Asia the So overall we're sales look, we've pleased seen performance quarter. the second very in

and Asia overall seen And XX%. have in of XX%. rest grown You've particular sales up Asia's the Japan up XX% is

to in growth Japan, products The higher strong position drive currency to a look foreign little currency we has premium continue for over rate our environment. there. foreign given annuity we And sales in market single if sustain the market products Now segment. our continue deeper the been

foreign product. internal in remarks, in market our his single launching to structure currency capital ability products has us opening our terms We've in of really also leveraging Bermuda. Michele bring optimized products our premium helped for quickly to new these pointed out by reinsurance our

So face the growing of the speed to strong a has the really the factor face of as both well as well to differentiation, assurance as distribution in product strength the bank combination been as in market, sales. our

of initiatives side, India as look overall, we've on we the the rest broad launches based as taken in new on the seen and the the Asia, And recovered year. have customer we've markets. distribution We've product, well side, improvement If China, these really well helped the really Korea. all this in product

last And look at over management the we momentum. year half the if sales we drive of we challenged to look the going be had comparison half, strong when outlook, ahead given our to really actions year continued the But year have for the second year. a we're second to

high However, we're single the track the on to mid at to be high of end full of year guidance digits.

Erik Bass

you. Thank

Operator

Morgan. ahead. JP a to move question go from Bhullar Jamminder Please we with Next,

Jamminder Bhullar

morning. Good

on So threads business. question the a just in retirement first,

Or sort yield in would yield through now business incremental in customers need your that higher pick spreads where be assume retirement increases that a forward yield well? Assuming be would improve would but up, followed productivity? at would point we curve, any should are you of passed the that it rates through to interest the reasonable to as

John McCallion

have think Hey, And at level QX. Jimmy, it's in it's half things of probably gave for us you if Ford very an as yield, Good We thought exclude and we XXX. healthy if the our strong would I were had end and what like John. much morning. kind And we the and line Look, certainly puts though normalize about around as in. QX kind with of a moved have that we're XXX VI, that, in the all range, VII, first really of We we outlook. you at said, a RIS. the of even high quarter we you that curves the a year, higher

made. would forward, aligned I'm the say, kind not that think you sure exactly, -- why this you it of point. pass-through spreads we does as of necessarily around look hover with is think so comment not now, I'd would perfectly kind it

there's variety of a think factors. I other

how But I QX curve versus think right begins we in to the manifest outlook the impact and now average itself of quarter would in start of shift, as third kind caps maybe spreads. of just vicinity to or end QX. long the the think the view would it's the be somewhere the this I

Michel Khalaf

was as to comment how well they because can my obviously, around there's competition reasonably a much this improve. And limit,

Jamminder Bhullar

meant rates you're terms I pretty a was going point up, keep spread. in already Yes, what if at of good the

more from they So that I'm to here. assuming assume keep a lot improving it's unreasonable

John McCallion

Yes, that's fair.

business I'd is, new point think your I lies. think the your where point, key to us that's for I pricing say is,

I an -- think, we're basis on some we still are have overall short.

where as that's think roll-off was. I So my point there's reinvest,

Jamminder Bhullar

And selling as your well. in is margin, economic unfriendly some not you've that of in becomes capital the Xx then products as a think right now. product sort lot changes And more Okay. solvency have with Japan, of I as of been it or peers friendly

or out how know So if could limit are terms reinsurance you any I that use you a on in use I'm much planning to actually Japan. wondering And products changes the to your offshore of would making relatedly, then there's companies or business offshore to FSA shift reinsurance. don't around if manage let through of

Lyndon Oliver

it's Yes, Lyndon here. look, hey,

comments of Let me make couple around a this.

looking the are couple of years early new at regime. implementation we a the regulations still products the So the And to away. in progress evolving. good these work still continue we're make very is all ESR But and under

on MetLife's local the we currently economic solvency and basis. point on our The price a second statutory here products is

in said, extent, lens field we already an to But of testing. profitability. it's the continue go using evolve. economic product as a analyze we're some regulations to to little early as I middle We're So

This So it's as we be reinsurance modifications would anything will or start plan But I couple like our too include early that. adjustments years of make it would or still needed. product away. implementation to think as progresses, a given

Jamminder Bhullar

Thank you.

Operator

question Gallagher Please next Evercore our go And is from Thomas with ahead. ISI.

Thomas Gallagher

Good morning.

actually one were peers It trend, have been First just seen like me claims. to favorable. earnings care holdings, elevated is underlying pretty on and looked underwriting which a has long-term

much? if elevated that see So claims I care experienced also wanted how if and within so, to you long-term

John McCallion

maybe and end lower on the Thanks. some John. higher relative of as It's first couple Good did towards a on well trend into of as QX and months just morning, terminations Tom. QX claims kind QX some of We the perspective. unfavorability see

Towards the July, into back. then revert QX, trends we've QX those say, seen I should of or end and

we think would still point for we'll but So an as results monitor holding. a aberration, just short-term for aberration, an I overall right now, account around obviously probably that

had that's the case, segment. While we the favorable mortality in

was that but the So a case. positive, long-term That's care. the specifically

the team year-to-date. of We've what at increases our continuing the already side, increases. has a rate of flip typically each year rate premium on really, really met to typical rate year. That's job think been X.X% we assume doing get run good this I

we're off to a great there. So start

Thomas Gallagher

CNBS with follow-up stress my last CMLs that million into portfolio? then update be so million now? or less XQ on all now. it's guess you XXX then probably was going a is, what your that, think also, And of you think meaningful Thanks. foreclosures on test. would the CRE Great. to mentioned curious And be XX any Thanks. What quarter, migration I losses, of I potential It you sounds had as seen credit have related like but than

Steven Goulart

think that. were And marginally stress be Steven really It's Goulart. the We're of you to better direction nothing's portfolio, right to Thanks very comfortable with on in the different. the comfortable question. may note the basically. Obviously, headed continue Anything nothing Tom. testing. time. do last than but with stress the very I Certainly Hey, we testing, results for

have positioned. come talked think foreclosures portfolio to charge-offs well. number. in We the We in a well as going You going very about did The than use that. Frankly, less materially very also. it's small to we're is portfolio

So Can last repeat comfortable through to CNBS the perform continue you question? will sorry. this. of last it question was migration. part we're to I related The it. I'm the with think And very

Thomas Gallagher

on did see have you Steve, on that downgrades, credit Sure. migration portfolio, CNBS, quarter? you that or did portfolio that this took you losses

Steven Goulart

No.

any had portfolio. material haven't in We that losses

Michel Khalaf

I'll just things, two Tom. add

down I losses, think the I'd was made maturities had I even went went no said. a two, I know just actually kind to around The quarter, just we our change comments first the modest to very up. for we Steve's reference estate his broadly of there, a actually, stress CECL if any don't real hotel and point So loss just that quarter speaking the of we put And just think had of was maybe were what kind credit that is potential to in I as losses expectations because around and in materially relative out. this one. less And there say then revaluation around the

So is performing there's there. factors of portfolio in But a lot the I think all well. all,

Thomas Gallagher

Thanks, guys.

Operator

you. Thank

Kamath question from Suneet Please from next is ahead. Jeffries. go Your

Suneet Kamath

Thanks. Good morning.

the to luck best out Steve. of start Just

that? I don't were, but CML if were percentage XX% if on disclose what know of office, mentioned this, that I those here. of you you Just maturities resolved can guess, the

John McCallion

Yes.

was Let's get the were actual roughly second of same in the percentage portfolio. basically one you. the overall And line resolution with of office resolved. get I'll Trying that office. loans, see. for the to The in the percentage

Suneet Kamath

give second I good of and guess, the for we've for disability then I seen guess, results now. back. sort to quarters Okay. can a across maybe board, question couple it I my circle Ramy,

when curious, that start could pricing and some it to imagine feather to its would need point, Just based would work some to I we experience, see think way might do your you on of at start results greater these through. into competition?

wondering thoughts Thanks. timing the Just of that. any on

Ramy Tadros

the margins, I I solutions, mean, if to particularly medium kind short of disciplined ability service rates strong if providing business important got And got thinking is driving that the of in in. I and the factors say will business. we capabilities underwriting you as a are three the the a this claims leave are absence as macro got of first levels core continue for course, advantage and in we then, leader well and in competitive be And I this the appropriate us, factors, management, say environment. drivers like term, invest underwriting, you've renewal. you're market think claim would got competitive four to over and of would this including persistency disability that you've as you've one of get very so this which about to and bundled employment to customer drives at terms capabilities, the continue Sure. you're

think macro that into the look but a in to environment tailwinds 'XX. to of the seeing because we're continue forward. And bit disciplined some be right we're into our about going there's If our bake pricing of uncertainty you fair continuing now, in as pricing those we environment, certainly we

Suneet Kamath

not pricing, of So pretty what terms guys, perspective? but rational in just environment you from terms just you're competitive in seeing a of

Ramy Tadros

say Yes, on competitive. in I given price. beyond we're our to multiple this pulling one those And scale differentiate would business. capabilities every it's It's single rational. also And there's levers and of certainly levers

Steven Goulart

too. that, sorry, up. of is wanted of were But basically, just tip Steve just I I follow five at of this didn't And did, answer Suneet, over half have nearly that We billion my resolutions. fingers. to Hey, And the office. total it's

Suneet Kamath

it. Got

Okay. Thanks.

Operator

go And question from with Ward is our next ahead. Please Citi. Michael

Michael Ward

pretty on VII and guys. I [also] Thanks, the solid overall, Good think, real macro Maybe just estate or considering morning. result, dynamic.

Just the of real on trough, that overall about guess hoping competence wondering or on non-cash sort your if expand in competence. you you trough gains, dynamic, can expand the estate just equity, thinking I can that

John McCallion

good view to Hey, remarks, yes, and Michelle is, Yes, think, in both as come opening John. our It's I a we've morning, our Mike. I trough. mentioned

minus now. estate, portfolio. into PE in think next in real kind in we with that we trough, I line the of I we've We the some funds positive why dynamic X.X, think, generally different is all offsets in different mentioned all, which I are but in positions. saw seen the continues But some in be mentioned, the quarter, headwinds that assets would

insight. a early. ton it's Obviously of, have don't say, We I'll objective

commentary be have how might positive, at second a We've you views. look small driven quarter. a markets, qualitative seen on number stocks, depending the equity of We by some although and

into the that line So, but the and are some I'll lower. return, typically say, directionally betas typically in translates level positive but, of,

U-shaped asset and in kind where trough ahead of a as versus So sharp this this view get want that's of But, ourselves. kind don't a class we kind We just of V. we to are. recovery more of of

now of the right in QX. be we're, view we So view with best kind of kind that would line

Michael Ward

about Thanks, or the for guys' pretty John. in curious from been career sentiment employers, maybe then And labor U.S., market's the resilient. just perspective overall your just for climate U.S. benefits the

Some reductions. headlines around headcount

and benefits. Thanks. in and on that Just curious flows also into are guys how regard overall what demand for you hearing or, that wages

Michel Khalaf

seeing top line a say across would from perspective, we're significant still portfolio. I the Thanks. strength

And So wage a a good It's growth. of portfolio. we're of terms tailwinds that's our portion combination of actions We've of our very persistency, in rate for got pleased a PFO customers. with growth. some new combination

So seeing we're very still strong momentum there.

space, as of double in well increasing opportunities a And as seeing we're as terms voluntary growth alluded within digit both who voluntary don't As site penetration increase to, our in Michelle portfolio. customers white still of work the to with well. lot offer

X,XXX just is spot above That space, which I a below would then National regional bright as for also is define particularly our as And the to X,XXX. we point us. market. emerging

there in segment. that we're internal Our is the we the fair share digits. in cut where take we're high PFO of segment, top data look growth We continuing market single do that X,XXX, three player to a market. at and you data research And bit when below fragmented a by

from driving range both all, That's we're the still PFO we all this X% of in business positive within in environment well to kind as really the seeing have. So that's that tailwinds how growth. positioned we're macro well X% as

Michael Ward

Thanks, guys.

Operator

ahead. Please from And next with Scott question we go to Alexander Goldman a go Sachs.

Alexander Scott

Hi.

interested bit elevated. It of know just of a part some I a is was a expense First little elevated. little looks I bit question. even expenses one housekeeping I some load. bit corporate but of a know of that just the VII, other is in that.

get there's of number going around to So XXX I XXX the confidence just in and wanted in just the there to annualized feel something aware anything to investment on for business if need we heading a or nuanced the be

and in year. the back half into next

John McCallion

John. It's Alex. morning, Good

of VII well. couple C&O historical being point returns things. obviously, kind you on a out puts pressure below One, as As the

Overall So have very expense direct along maybe our Obviously, the were C&O. to would top that's well. came expenses expenses higher referencing. growth. probably in line did strong driver elevated loss one that in you're good We ratio with

and We're XX.X for ratio nonetheless. at quarter, targeting fluctuate So it good full XX.X but a well the our XX.X. the quarter below still was below can year to from quarter obviously

It just on of part of we've part our two of efficiency highlight. piece ever those was rate mindset. are things. it initiatives. that of one-time direct year, relatively this investments did year-over-year. In terms interest corporate our one big last have if And say probably don't quarter main call That's I'll we debt. ratio, all costs our run one due Those of things but of some One, the of kind forward. kind it higher to to item that, the their general to expenses, compare expense was We in second improve some kind that. a exclude then I'd to C&O is you go made

C&O. helps hopefully So with that

Alexander Scott

Yes, helpful. is that

The of is just one debt. downgrade the for you pitch had U.S. I second on

below expect two risk like you now out anything but on, moves the three to so affect maybe your RBC probably any seems impact limited, we and your AAA just and know, rates should composite that that rating would from else should it business? and, get of the affects having wanted think it be reasonably material if thoughts I it in yes,

John McCallion

wouldn't never but anything. there. way ton now, our, our of news. we recent any so has we it you other yesterday terms the saw run our not know, impact impact I'm how one sure of on, right and guess how broad-based change very Obviously, or run John. our investment or in expect and It I business but impacts, portfolio we we it's capital Alex, on think nor a expect doesn't wouldn't outlooks a do Hey it I reaction that really we

Alexander Scott

Got you. it. Thank

Operator

gentlemen, remarks, Global I'd like the call John back And MetLife's final turn to ladies Head to for Relations, and Investor of Hall.

John Hall

everybody and us very with Thanks good Well, much know day. joining and have find a for us you where you follow-up thank any questions. to

Operator

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

disconnect. You may now

MetLife (MET) 3 Aug 232023 Q2 Earnings call transcript