Metlife ((MET)) has held its Q1 earnings call. Read on for the main highlights of the call.
MetLife’s recent earnings call conveyed a generally positive sentiment, underscoring the company’s strong financial performance and strategic achievements. Despite some challenges, such as declining earnings in Asia and currency impacts in Latin America, the overall highlights, including robust earnings growth and proactive capital management, outweighed the lowlights. This positive sentiment reflects confidence in MetLife’s strategic direction and financial health.
Record Adjusted Earnings Growth
MetLife reported record adjusted earnings of $1.3 billion, or $1.96 per share, marking a 7% increase from the same period last year. This growth is a testament to the company’s robust financial performance and strategic execution.
Strong Group Benefits Performance
The Group Benefits segment demonstrated impressive performance with adjusted earnings of $367 million, a 29% increase from the previous year. This growth was driven by favorable life underwriting margins and lower mortality, highlighting the segment’s strength.
Robust Retirement and Income Solutions Growth
MetLife’s Retirement and Income Solutions (RIS) segment reported adjusted earnings of $401 million. The segment saw strong sales in synthetic GICs and UK longevity reinsurance, with pension risk transfer inflows totaling $1.8 billion, underscoring its growth trajectory.
Successful Risk Transfer Transaction
A significant highlight was MetLife’s risk transfer deal with Talcott Resolution Life Insurance Company, reinsurance of approximately $10 billion in U.S. retail variable annuity and rider reserves. This move reduces enterprise risk and secures investment management mandates for $6 billion of assets.
Capital Management and Shareholder Returns
MetLife returned approximately $1.8 billion to shareholders through dividends and share repurchases. The Board also authorized a new $3 billion share repurchase program and increased the common dividend per share by 4.1%, reflecting strong capital management.
Positive International Sales Momentum
International sales showed positive momentum, with Asia sales up 10% driven by growth in Korea and China. Latin America’s adjusted earnings rose 7% on a constant currency basis, despite currency challenges.
Decline in Asia Earnings
Adjusted earnings in Asia fell by 12% to $374 million, primarily due to lower underwriting margins and higher taxes. This decline highlights the challenges faced in the region.
Latin America Earnings Impacted by Currency
Latin America’s adjusted earnings decreased by 6% from the prior year, although they were up 7% on a constant currency basis. The region’s adjusted PFOs increased by 1% on a reported basis but surged 14% on a constant currency basis.
Lower than Expected Private Equity Returns
Private equity returns were lower than expected, with funds gaining 1.6% in the quarter, falling short of the implied quarterly outlook return. This underperformance is a notable point of concern.
Forward-Looking Guidance
MetLife’s forward-looking guidance reflects the resilience of its business model amidst economic uncertainty. The company anticipates continued strength in its Group Benefits and RIS segments, despite challenges in Asia and Latin America. The strategic risk transfer deal and robust capital management are expected to support future growth and shareholder returns.
In summary, MetLife’s earnings call painted a picture of a company with strong financial performance and strategic achievements, despite some regional challenges. The overall positive sentiment and key takeaways, such as robust earnings growth and proactive capital management, indicate confidence in MetLife’s future prospects.